Fidelity Bank parent pares losses

By Paul Donsky

The Atlanta Journal-Constitution

Atlanta-based Fidelity Southern Corp. reported a $425,000 loss on Thursday, or four cents a share, the company’s sixth straight quarter in the red.

But given the state of Georgia’s battered banking industry, the small loss was seen as good news by analysts.

Fidelity, which operates Fidelity Bank, the second-largest bank based in metro Atlanta, recorded much larger losses the first two quarters of the year – more than $8 million.

The bank would have recorded a profit of $398,000 in the latest quarter if not for interest payments the company had to make on the $48 million the federal government invested in the company last year as part of the U.S. Treasury’s Troubled Asset Relief Program.

The bank attributed the improved performance to several factors, including a shrinking pool of bad loans and an increase in income from its home mortgage division.

Fidelity “made really good progress; it’s a positive story no matter how you look at it,” said Chris Marinac, an analyst at FIG Partners in Atlanta. “Right now, we’re looking for small positives in the banking arena, not dramatic improvement. These small victories are important”

More Georgia banks report earnings next week, including SunTrust, Synvous and United Community, which said last month in a regulatory filing that it expected to lose $41 to $44 million in the third quarter.

Marinac cautioned that Fidelity should not be seen as a bellwether for the state’s community banks, which have been taking huge losses tied to the collapsed residential real estate market. Fidelity tied up a much smaller percentage of its loans in home building than many of its peers.