Fidelity Southern Corporation Reports 2008 First Quarter Profit

ATLANTA, April 17 /PRNewswire-FirstCall/ -- Fidelity Southern Corporation
("Fidelity" or "the Company") (Nasdaq: LION) reported basic and diluted
earnings per share for the first quarter of 2008 of $.12 compared to $.28 for
the same period in 2007 and to $.03 in the last quarter of 2007. Net income
was $1,109,000 for the first quarter of 2008 compared to $2,564,000 for the
same quarter in 2007, a decrease of $1,455,000.
Significant year-over-year and first quarter 2008 compared to first
quarter 2007 developments include:
-- Net interest income grew 4.1%
-- Noninterest income grew 27.1%
-- Equity grew 4.4%
-- Total loans grew 7.7%
-- Total assets grew 7.1%
-- Allowance for loan losses grew 37.9% or $5.2 million, to 1.34%
-- Net interest margin was 2.94%
-- Net charge-offs were .60%

The Company benefited in the first quarter of 2008 from a gain of
$1,252,000 on the mandatory redemption of 29,267 shares of Visa, Inc. common
stock upon Visa's successful initial public offering. The Company reversed a
$567,000 litigation expense accrual recorded in the fourth quarter of 2007 to
recognize the Company's proportional share of Visa litigation settlements and
litigation reserves. Fidelity now owns 33,168 shares of restricted Visa stock
as a result of the initial public offering, with a zero cost basis.
Chairman James B. Miller, Jr. said, "Our quarter-over-quarter increase in
earnings reflects our early effort to handle emerging real estate credit
problems. However, we see little improvement for real estate in the next two
quarters, as the unwinding by banks of real estate loans continues. There
will be more bank owned houses and lots on the market with the drag that
implies. In the midst of these difficulties, houses are still being built,
sold, and mortgaged and our share of this good business, we believe, is
growing.
"Similarly, we continue to have double digit increases in the number of
transaction accounts, which broadens our deposit share and, we believe,
increases our market share.
"Commercial and SBA lending continue to have strong loan demand but
pricing competition continues to be unreasonably fierce.
"Indirect Lending has continued to have strong demand and relatively
strong credit quality. Because loan demand has been so strong, we have
selectively reduced the number of dealers we buy from to appropriately control
our volume. Loan sales to other institutions continue strong. We currently
see few signs that the financial and real estate contagion has spread to the
consumer, but we are planning for that nevertheless."
Net interest income for the first quarter of 2008 increased $456,000, or
4.1%, when compared to the same period in 2007. The increase was primarily a
result of higher average interest-earning assets. The net interest margin
decreased only eight basis points to 2.94% in the first quarter of 2008 when
compared to the same period in 2007. The decline in net interest margin in
the first quarter of 2008 was due primarily to reductions in the prime rate
and an increase in nonperforming loans.
Total interest income for the first quarter of 2008 increased $72,000, or
.3%, compared to the same period in 2007. The increase in interest income for
the first quarter of 2008 was the result of a decrease of 45 basis points in
the yield on average interest-earning assets, more than offset by the growth
in average interest-earning assets, which increased $88.7 million or 5.8%.
Interest expense for the first quarter of 2008, decreased $384,000, or
2.4%, compared to the same period in 2007. The decrease in interest expense
was attributable to an increase in average interest-bearing liabilities of
$102.1 million, more than offset by a 49 basis point decrease in the cost of
interest-bearing liabilities.
The provision for loan losses for the first quarter of 2008 was $4.6
million compared to $500,000 for the same period in 2007, due to adverse
credit trends in the construction loan portfolio and to a lesser extent in the
consumer loan portfolio. Net charge-offs increased $1.2 million to $2.1
million for the first quarter of 2008 when compared to the same period in
2007. The ratio of net charge-offs to average loans outstanding was .60% for
the first quarter of 2008, compared to .27% for the same period of 2007.
However, the allowance for loan losses as a percentage of loans increased from
1.19% at December 31, 2007, to 1.34% at March 31, 2008, compared to 1.04% at
March 31, 2007. Nonperforming assets increased to $37.0 million at the end of
the first quarter of 2008 compared to $9.1 million at the end of the first
quarter of 2007 and $24.2 million at the end of 2007. The increase in
nonperforming assets was primarily driven by increases in nonaccrual loans and
other real estate. Management believes it has identified and placed on
nonaccrual, charged down, and charged off these nonperforming assets timely
and appropriately.
Noninterest income increased $1.2 million or 27.1% to $5.7 million in the
first quarter of 2008, compared to the same period in 2007. This increase was
primarily due to the $1.3 million securities gain from the mandatory
redemption of 29,267 shares of Visa, Inc. common stock. Visa distributed the
stock proceeds on March 28, 2008. Indirect lending revenues increased
$213,000, or 15.5%, to $1.6 million during the first quarter of 2008 when
compared to the same period last year due to an increase in the number and
volume of indirect loans sold and increases in servicing and other fees from
indirect loans serviced. Revenue from SBA lending activities decreased
$230,000, or 35.7%, to $414,000 for the first quarter of 2008, when compared
to the same period in 2007. The decrease in SBA revenue in the first quarter
was a result of fewer sales and lower gains on sales compared to the same
quarter in 2007 due to the liquidity, credit and economic concerns prevalent
in the market. Service charges on deposit accounts increased $45,000, or
4.0%, to $1.2 million due to the growing number of transaction accounts
resulting from the transaction account acquisition program to broaden the base
of transaction accounts.
Noninterest expense for the first quarter of 2008 decreased $150,000, or
1.3%, to $11.4 million when compared to the same period in 2007. This
decrease was primarily related to the reversal of the fourth quarter 2007 Visa
litigation accrual of $567,000. Offsetting in part the accrual reversal were
increases in salaries and benefits expense of $437,000, or 6.8%, to $6.9
million. The increases in salaries and benefits expenses were primarily due
to the addition of seasoned loan production and branch operations staff,
including SBA, indirect automobile, and commercial lenders to increase lending
volume, and staff for the three branches opened in 2007.
Fidelity Southern Corporation, through its operating subsidiaries Fidelity
Bank and LionMark Insurance Company, provides banking services and a credit
related insurance product through 23 branches in Atlanta, Georgia, a branch in
Jacksonville, Florida, and an insurance office in Atlanta, Georgia.
Automobile loans and SBA loans are provided through employees located
throughout the Southeast. For additional information about Fidelity's
products and services, please visit the website at www.FidelitySouthern.com.
This news release contains forward-looking statements, as defined by
Federal Securities Laws, including statements about financial outlook and
business environment. These statements are provided to assist in the
understanding of future financial performance and such performance involves
risks and uncertainties that may cause actual results to differ materially
from those in such statements. Any such statements are based on current
expectations and involve a number of risks and uncertainties. For a
discussion of some factors that may cause such forward-looking statements to
differ materially from actual results, please refer to the section entitled
"Forward Looking Statements" on page 3 of Fidelity Southern Corporation's 2006
Annual Report filed on Form 10-K with the Securities and Exchange Commission.

FIDELITY SOUTHERN CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

(DOLLARS IN THOUSANDS, EXCEPT PER YEAR-TO-DATE
SHARE DATA) MARCH 31,
2008 2007

INTEREST INCOME
LOANS, INCLUDING FEES $25,715 $25,453
INVESTMENT SECURITIES 1,716 1,847
FEDERAL FUNDS SOLD AND BANK
DEPOSITS 42 101
TOTAL INTEREST INCOME 27,473 27,401

INTEREST EXPENSE
DEPOSITS 13,319 14,139
SHORT-TERM BORROWINGS 747 511
SUBORDINATED DEBT 1,408 1,105
OTHER LONG-TERM DEBT 285 388
TOTAL INTEREST EXPENSE 15,759 16,143

NET INTEREST INCOME 11,714 11,258

PROVISION FOR LOAN LOSSES 4,600 500

NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 7,114 10,758

NONINTEREST INCOME
SERVICE CHARGES ON DEPOSIT ACCOUNTS 1,163 1,118
OTHER FEES AND CHARGES 464 456
MORTGAGE BANKING ACTIVITIES 70 121
BROKERAGE ACTIVITIES 161 237
INDIRECT LENDING ACTIVITIES 1,586 1,373
SBA LENDING ACTIVITIES 414 644
SECURITIES GAINS, NET 1,264 -
BANK OWNED LIFE INSURANCE 303 287
OTHER OPERATING INCOME 252 229
TOTAL NONINTEREST INCOME 5,677 4,465

NONINTEREST EXPENSE
SALARIES AND EMPLOYEE BENEFITS 6,856 6,419
FURNITURE AND EQUIPMENT 777 684
NET OCCUPANCY 1,039 971
COMMUNICATION EXPENSES 388 399
PROFESSIONAL AND OTHER SERVICES 907 916
ADVERTISING AND PROMOTION 156 244
STATIONERY, PRINTING AND SUPPLIES 179 174
INSURANCE EXPENSES 102 70
OTHER OPERATING EXPENSES 983 1,660
TOTAL NONINTEREST EXPENSE 11,387 11,537

INCOME BEFORE INCOME TAX EXPENSE 1,404 3,686
INCOME TAX EXPENSE 295 1,122

NET INCOME $1,109 $2,564

EARNINGS PER SHARE:
BASIC EARNINGS PER SHARE $0.12 $0.28
DILUTED EARNINGS PER SHARE $0.12 $0.28

WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING-BASIC 9,375,915 9,296,933

WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING-FULLY DILUTED 9,375,915 9,306,052

FIDELITY SOUTHERN CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

(DOLLARS IN THOUSANDS) MARCH 31, DECEMBER 31, MARCH 31,
ASSETS 2008 2007 2007

CASH AND DUE FROM BANKS $28,641 $23,442 $23,604
FEDERAL FUNDS SOLD 13,788 6,605 23,700
CASH AND CASH EQUIVALENTS 42,429 30,047 47,304
INVESTMENTS AVAILABLE-FOR-SALE 118,386 103,149 111,569
INVESTMENTS HELD-TO-MATURITY 27,978 29,064 32,074
INVESTMENT IN FHLB STOCK 6,632 5,665 4,090
LOANS HELD-FOR-SALE 58,094 63,655 36,838
LOANS 1,417,722 1,388,358 1,333,251
ALLOWANCE FOR LOAN LOSSES (19,046) (16,557) (13,809)
LOANS, NET 1,398,676 1,371,801 1,319,442
PREMISES AND EQUIPMENT, NET 19,239 18,821 18,421
OTHER REAL ESTATE 8,200 7,307 342
ACCRUED INTEREST RECEIVABLE 8,490 9,367 8,723
BANK OWNED LIFE INSURANCE 26,957 26,699 25,942
OTHER ASSETS 20,612 20,909 16,120

TOTAL ASSETS $1,735,693 $1,686,484 $1,620,865

LIABILITIES

DEPOSITS:
NONINTEREST BEARING DEMAND $130,594 $131,597 $141,297
INTEREST BEARING DEMAND/
MONEY MARKET 283,454 314,067 295,212
SAVINGS 218,483 216,442 196,269
TIME DEPOSITS, $100,000
AND OVER 301,009 285,497 297,454
OTHER TIME DEPOSITS 468,954 458,022 471,518
TOTAL DEPOSIT LIABILITIES 1,402,494 1,405,625 1,401,750

FEDERAL FUNDS PURCHASED 27,000 5,000 -
OTHER SHORT-TERM BORROWINGS 79,348 70,954 25,151
SUBORDINATED DEBT 67,527 67,527 46,908
OTHER LONG-TERM DEBT 45,000 25,000 37,000
ACCRUED INTEREST PAYABLE 7,070 6,760 7,138
OTHER LIABILITIES 6,157 5,655 6,066
TOTAL LIABILITIES 1,634,596 1,586,521 1,524,013

SHAREHOLDERS' EQUITY

COMMON STOCK 46,300 46,164 45,159
ACCUMULATED OTHER COMPREHENSIVE
INCOME (LOSS) 522 (804) (1,361)
RETAINED EARNINGS 54,275 54,603 53,054
TOTAL SHAREHOLDERS' EQUITY 101,097 99,963 96,852

TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,735,693 $1,686,484 $1,620,865

BOOK VALUE PER SHARE $10.78 $10.67 $10.41
SHARES OF COMMON STOCK OUTSTANDING 9,380,812 9,368,904 9,304,573

FIDELITY SOUTHERN CORPORATION
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
(UNAUDITED)

(DOLLARS IN THOUSANDS) YEAR-TO-DATE YEAR ENDED
MARCH 31, DECEMBER 31,
2008 2007 2007

BALANCE AT BEGINNING OF PERIOD $16,557 $14,213 $14,213
CHARGE-OFFS:
COMMERCIAL, FINANCIAL AND
AGRICULTURAL 14 - 200
SBA - - -
REAL ESTATE-CONSTRUCTION 535 161 1,934
REAL ESTATE-MORTGAGE 11 6 82
CONSUMER INSTALLMENT 1,869 952 5,301
TOTAL CHARGE-OFFS 2,429 1,119 7,517
RECOVERIES:
COMMERCIAL, FINANCIAL AND
AGRICULTURAL - 10 257
SBA 56 3 -
REAL ESTATE-CONSTRUCTION - - 190
REAL ESTATE-MORTGAGE 13 1 78
CONSUMER INSTALLMENT 249 201 836
TOTAL RECOVERIES 318 215 1,361
NET CHARGE-OFFS 2,111 904 6,156
PROVISION FOR LOAN LOSSES 4,600 500 8,500
BALANCE AT END OF PERIOD $19,046 $13,809 $16,557

RATIO OF NET CHARGE-OFFS DURING
PERIOD TO AVERAGE LOANS
OUTSTANDING, NET 0.60% 0.27% 0.45%
ALLOWANCE FOR LOAN LOSSES AS A
PERCENTAGE OF LOANS 1.34% 1.04% 1.19%

NONPERFORMING ASSETS
(UNAUDITED)

(DOLLARS IN THOUSANDS)
MARCH 31,
2008 2007

NONACCRUAL LOANS $26,415 $7,549
REPOSSESSIONS 2,341 1,187
OTHER REAL ESTATE 8,200 342
TOTAL NONPERFORMING ASSETS $36,956 $9,078

LOANS PAST DUE 90 DAYS OR MORE AND
STILL ACCRUING $125 $-

RATIO OF LOANS PAST DUE 90 DAYS OR
MORE AND STILL ACCRUING TO TOTAL LOANS -% -%

RATIO OF NONPERFORMING ASSETS TO
TOTAL LOANS AND REPOSSESSIONS 2.50% 0.66%

FIDELITY SOUTHERN CORPORATION
LOANS, BY CATEGORY
(UNAUDITED)

(DOLLARS IN THOUSANDS) PERCENT CHANGE
Mar. 31, Mar. 31,
2008/ 2008/
MAR. 31, DEC. 31, MAR. 31, Dec. 31, Mar. 31,
2008 2007 2007 2007 2007

COMMERCIAL, FINANCIAL
AND AGRICULTURAL $119,163 $107,325 $111,726 11.03 % 6.66 %
TAX-EXEMPT COMMERCIAL 9,014 9,235 16,626 (2.39)% (45.78)%
REAL ESTATE MORTGAGE
- COMMERCIAL 186,961 189,881 178,435 (1.54)% 4.78 %
TOTAL COMMERCIAL 315,138 306,441 306,787 2.84 % 2.72 %
REAL ESTATE
- CONSTRUCTION 287,248 282,056 288,754 1.84 % (0.52)%
REAL ESTATE
- MORTGAGE 97,980 93,673 91,703 4.60 % 6.84 %
CONSUMER INSTALLMENT 717,356 706,188 646,007 1.58 % 11.04 %
LOANS 1,417,722 1,388,358 1,333,251 2.12 % 6.34 %
LOANS HELD-FOR-SALE:
ORIGINATED RESIDENTIAL
MORTGAGE LOANS 2,121 1,412 381 50.21 % 456.69 %
SBA LOANS 29,973 24,243 11,457 23.64 % 161.61 %
INDIRECT AUTO
LOANS 26,000 38,000 25,000 (31.58)% 4.00 %
TOTAL LOANS
HELD-FOR-SALE 58,094 63,655 36,838 (8.74)% 57.70 %
TOTAL LOANS $1,475,816 $1,452,013 $1,370,089 1.64 % 7.72 %

FIDELITY SOUTHERN CORPORATION
AVERAGE BALANCE, INTEREST AND YIELDS
(UNAUDITED)

YEAR-TO-DATE
March 2008
Average Income/ Yield/
(dollars in thousands) Balance Expense Rate
Assets
Interest-earning assets:
Loans, net of unearned income
Taxable $1,462,829 $25,603 7.04%
Tax-exempt (1) 9,095 168 7.45%
Total loans 1,471,924 25,771 7.04%

Investment securities
Taxable 128,666 1,604 4.99%
Tax-exempt 10,762 173 6.37%
Total investment securities 139,428 1,777 5.10%

Interest-bearing deposits 1,499 12 3.23%
Federal funds sold 3,609 30 3.42%
Total interest-earning assets 1,616,460 27,590 6.86%

Cash and due from banks 21,448
Allowance for loan losses (18,114)
Premises and equipment, net 18,985
Other real estate owned 7,873
Other assets 55,633
Total assets $1,702,285

Liabilities and shareholders' equity
Interest-bearing liabilities:
Demand deposits $304,212 $2,179 2.88%
Savings deposits 218,081 1,886 3.48%
Time deposits 754,181 9,254 4.94%
Total interest-bearing deposits 1,276,474 13,319 4.20%

Federal funds purchased 17,703 154 3.50%
Securities sold under agreements to
repurchase 26,887 187 2.80%
Other short-term borrowings 42,549 406 3.83%
Subordinated debt 67,527 1,408 8.36%
Long-term debt 29,396 285 3.90%
Total interest-bearing liabilities 1,460,536 15,759 4.33%

Noninterest-bearing:
Demand deposits 127,542
Other liabilities 15,062
Shareholders' equity 99,145
Total liabilities and
shareholders' equity $1,702,285

Net interest income / spread $11,831 2.54%
Net interest margin 2.94%

YEAR-TO-DATE
March 2007
Average Income/ Yield/
(dollars in thousands) Balance Expense Rate
Assets
Interest-earning assets:
Loans, net of unearned income
Taxable $1,357,148 $25,231 7.54%
Tax-exempt (1) 15,855 330 8.43%
Total loans 1,373,003 25,561 7.55%

Investment securities
Taxable 144,449 1,823 5.05%
Tax-exempt 2,474 37 3.93%
Total investment securities 146,923 1,860 5.03%

Interest-bearing deposits 1,312 17 5.23%
Federal funds sold 6,550 84 5.23%
Total interest-earning assets 1,527,788 27,522 7.31%

Cash and due from banks 23,551
Allowance for loan losses (13,856)
Premises and equipment, net 18,900
Other real estate owned 8
Other assets 48,364
Total assets $1,604,755

Liabilities and shareholders' equity
Interest-bearing liabilities:
Demand deposits $272,471 $2,337 3.48%
Savings deposits 188,436 2,080 4.48%
Time deposits 763,566 9,722 5.16%
Total interest-bearing deposits 1,224,473 14,139 4.68%

Federal funds purchased 9,578 132 5.57%
Securities sold under agreements to
repurchase 18,653 134 2.91%
Other short-term borrowings 21,856 245 4.55%
Subordinated debt 46,908 1,105 9.56%
Long-term debt 37,000 388 4.26%
Total interest-bearing liabilities 1,358,468 16,143 4.82%

Noninterest-bearing:
Demand deposits 136,783
Other liabilities 14,672
Shareholders' equity 94,832
Total liabilities and
shareholders' equity $1,604,755

Net interest income / spread $11,379 2.49%
Net interest margin 3.02%

(1) Interest income includes the effect of taxable-equivalent
adjustment for 2008 and 2007 of $57,000 and $109,000 respectively.

Contacts: Martha Fleming, Rod Marlow
Fidelity Southern Corporation (404) 240-1504

SOURCE Fidelity Southern Corporation

Martha Fleming, or Rod Marlow, both of Fidelity Southern Corporation,
+1-404-240-1504