Filed pursuant to Rule 424(b)(4)
Registration No. 333-86304
FIDELITY NATIONAL CORPORATION
50,000 SHARES OF COMMON STOCK
NO PAR VALUE
Fidelity National Corporation ("Fidelity" or "Company") is a registered
bank holding company headquartered in Atlanta, Georgia. All of our activities
are conducted by our wholly owned subsidiaries: Fidelity National Bank ("FNB" or
the "Bank"), which was organized as a national banking corporation in 1973; and
Fidelity National Capital Investors, Inc. ("Fidelity Capital"), organized as a
Georgia corporation in 1992.
The Bank provides traditional deposit, lending, mortgage, securities
brokerage and international trade services to its commercial and retail
customers. The Bank is a full-service banking corporation and Fidelity Capital
is a securities brokerage operation. We conduct full-service banking and
residential mortgage lending through 19 locations in the metropolitan Atlanta
area and one cyber bank office.
We conduct our indirect automobile lending (the purchase of consumer
automobile installment sales contracts from automobile dealers), residential
mortgage lending and residential construction lending through certain of our
Atlanta offices and our Jacksonville, Florida location. At December 31, 2001,
the total assets of Fidelity were $994 million, total loans were $791 million,
total deposits were $818 million and shareholders' equity was $59 million.
We are registering 50,000 shares of common stock that were acquired on
April 11, 2002 by Raymond James & Associates, Inc. ("Selling Shareholder") upon
its exercise in part of the warrant granted on December 12, 1997. Raymond James
also received 11,859 shares of common stock upon its cashless exercise of the
warrant on April 11, 2002. The warrant, which has been fully exercised, was
issued in connection with our public offering of 3,450,000 shares of common
stock in December 1997. Raymond James was the primary underwriter of that public
offering. (see "Selling Shareholder").
Our common stock is listed for trading on The Nasdaq National Market under
the symbol LION. On April 12, 2002, the closing sales price for our common stock
was $9.75 per share.
INVESTING IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 8.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
This Prospectus is dated April 22, 2002.
THE OFFERING
The 50,000 shares of common stock purchased upon the exercise of the
warrant may be offered or sold by the selling shareholder from time to time in
The Nasdaq National Market, or otherwise at market prices then prevailing in
negotiated transactions or otherwise. Brokers or dealers will receive
commissions or discounts from the selling shareholder in amounts to be
negotiated immediately prior to the sale. Such resales are subject to the
prospectus delivery requirements of the Securities Act of 1933, as amended (the
"Securities Act"). In connection with any such sales, the selling shareholder
and any brokers and dealers participating in such sales may be deemed to be
"underwriters" within the meaning of the Securities Act.
USE OF PROCEEDS
The net proceeds from the sale of the common stock being offered pursuant
to this Prospectus will be received by the selling shareholder.
The Company will not receive any of the proceeds from the resale of the
common stock, but received the proceeds upon the exercise of the warrant to
purchase 50,000 shares of common stock in the amount of $412,500. See "Selling
Shareholder" and "Plan of Distribution".
SELLING SHAREHOLDER
In December 1997, we issued a warrant to Raymond James to purchase 150,000
shares of our common stock. The exercise price is $8.25 per share. This warrant
would expire on December 8, 2002, unless exercised prior to that date.
The warrant contains provisions that protect the holder against dilution
by adjustment of the exercise price upon the occurrence of certain events,
including stock dividends, stock splits, mergers, and sale of substantially all
of the Company's assets. The holder of the warrant will not possess any rights
as a shareholder unless and until the holder exercises the warrant and the
common stock is issued.
On April 11, 2002, Raymond James exercised the warrant to purchase 50,000
shares of common stock for an aggregate consideration of $412,500 and received
11,859 shares of common stock through the cashless exercise of the warrant to
purchase 100,000 shares of common stock. The shares were acquired in a private
placement in compliance with Section 4(2) of the Securities Act and Rule 144
promulgated under the Securities Act. The 50,000 shares of common stock
purchased for cash by Raymond James are included in this Prospectus. The 11,859
shares of common stock acquired through the cashless exercise of the warrant are
not included in this Prospectus and may be sold by Raymond James in a brokerage
transaction in accordance with Rule 144 promulgated under the Securities Act at
any time after acquisition.
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AVAILABLE INFORMATION
We are subject to the information requirements of the Securities Exchange
Act of 1934, as amended ("Exchange Act") and, in accordance therewith, files
reports, proxy and information statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy and
information statements and other information filed by the Company can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at its
regional offices at Northwestern Atrium Center, 500 West Madison Street,
Chicago, Illinois 60661-2511 or 233 Broadway, New York, New York 10279. Copies
of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 at
prescribed rates. In addition, the Commission maintains a web site at
http:/www.sec.gov containing reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission,
including our company.
We have filed with the Commission a Registration Statement (together with
all amendments and exhibits, the "Registration Statement") on Form S-3 under the
Securities Act of 1933, as amended, with respect to the common stock offered
pursuant to this Prospectus. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission.
Statements made in this Prospectus as to the contents of any agreement or other
document referred to herein are not necessarily complete and reference is made
to the copy of such agreement or to the Registration Statement and to the
exhibits and schedules filed therewith. Copies of the material containing this
information may be obtained from the Commission upon payment of the prescribed
fee.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
2001;
(b) Report on Form 8-K filed on March 29, 2002; and
(c) Definitive Proxy Statement for the Company's 2002 Annual Meeting of
Shareholders, as filed on April 3, 2002.
All documents subsequently filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended and prior to the termination of this offering, shall be deemed
to be incorporated by reference in this Prospectus. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein, or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein,
modifies or
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supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
We will provide, without charge, to each person, including any beneficial
owner, to whom a copy of this Prospectus is delivered, upon the written oral
request of such person, a copy of any or all of the documents that have been
incorporated herein by reference, other than Exhibits to such documents (unless
such Exhibits are specifically incorporated by reference therein). Requests for
such copies should be directed to: Martha Fleming, Secretary, Fidelity National
Corporation, 3490 Piedmont Road, Suite 1550, Atlanta, Georgia 30305
(404/240-1504).
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PROSPECTUS SUMMARY
This summary highlights some information from this Prospectus. It may not
contain all of the information that is important to you. To understand this
offering fully, you should read the entire Prospectus carefully, including the
risk factors and the financial statements incorporated by reference.
THE COMPANY
Fidelity is a registered bank holding company headquartered in Atlanta,
Georgia. All of our activities are conducted by our wholly-owned subsidiaries:
Fidelity National Bank ("FNB" or the "Bank"), which was organized as a national
banking corporation in 1973; and Fidelity National Capital Investors, Inc.
("Fidelity Capital"), organized as a Georgia corporation in 1992.
The Bank provides traditional deposit, lending, mortgage, securities
brokerage and international trade services to its commercial and retail
customers. The Bank is a full-service banking corporation and Fidelity Capital
is a securities brokerage operation. We conduct full-service banking and
residential mortgage lending through 19 locations in the metropolitan Atlanta
area and on cyber branch location.
We conduct indirect automobile lending (the purchase of consumer
automobile installment sales contracts from automobile dealers), residential
mortgage lending and residential construction lending through certain of our
Atlanta offices and our Jacksonville, Florida location. At December 31, 2001,
the total assets of Fidelity were $994 million, total loans were $791 million,
total deposits were $818 million and shareholders' equity was $59 million.
The Company's headquarters is located at 3490 Piedmont Road, Suite 1550,
Atlanta, Georgia 30305 (telephone number: 404/240-1504).
MARKET AREA
Our subsidiary bank conducts banking business primarily through 19
branches located in Fulton, DeKalb, Cobb, Clayton and Gwinnett counties in
Georgia and one cyber branch location. The Bank's customers are primarily
individuals and small and medium sized businesses. The customer base for our
credit card portfolio is national in scope, with customers in all 50 states. We
conduct indirect automobile, residential construction and mortgage lending from
the Jacksonville, Florida office in addition to the offices in Georgia.
Customers of our other services are located almost exclusively in Georgia.
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PRODUCTS AND SERVICES
Our products and services include (i) depository accounts, (ii) direct and
indirect automobile and home equity lending, (iii) secured and unsecured
installment loans, (iv) credit card loans, (v) construction and residential real
estate loans, (vi) commercial loans, including commercial loans secured by real
estate, (vii) securities brokerage services and (viii) international trading
services.
Deposits
Our subsidiary bank offers a full range of depository accounts and
services to both individuals and businesses. As of December 31, 2001, the
deposit base totaled approximately $818 million, consisting of approximately
$112 million in noninterest-bearing demand deposits (13.8% of total deposits),
approximately $120 million in interest-bearing demand deposits and money market
accounts (14.7% of total deposits), approximately $101 million in savings
deposits (12.4% of total deposits), approximately $319 million in time deposits
in amounts less than $100,000 (38.9% of total deposits), and approximately $166
million in time deposits of $100,000 or more (20.2% of total deposits). Brokered
deposits at December 31, 2001, included in time deposits in amounts less than
$100,000, totaled $20 million.
Lending
Our primary lending activities include consumer loans (direct and indirect
automobile loans and credit card loans), real estate loans and commercial loans
to small and medium sized businesses.
As of December 31, 2001, consumer (including installment and credit card
loans), real estate (including residential mortgage, construction and commercial
loans secured by real estate), and commercial loans were $444 million, $293
million and $64 million, respectively, representing approximately 55.4%, 36.6%
and 8.0%, respectively, of the total loan portfolio. Real estate loans included
$98 million in construction loans, $129 million in residential real estate loans
and $66 million in commercial loans secured by real estate. As of December 31,
2001, commercial loans, including commercial loans secured by real estate,
totaled $130 million.
Consumer Lending
Our consumer lending primarily consists of indirect automobile lending and
consumer credit cards. We also make direct consumer loans, including direct
automobile loans, home equity and personal loans.
Indirect Automobile Lending
We acquire, on a nonrecourse basis, consumer installment contracts secured
by new and used vehicles purchased by consumers from franchised motor vehicle
dealers located
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primarily in Georgia, Florida and North Carolina. As of December 31, 2001, the
aggregate amount of indirect automobile loans outstanding was $342 million,
representing 42.7% of our total loan portfolio. Approximately 54% and 26% of the
outstanding indirect automobile loans at December 31, 2001, were originated in
the Atlanta, Georgia and Jacksonville, Florida offices, respectively. An
additional $276 million of indirect automobile loans originated and sold by us
are being serviced by us for others.
The potential charge-offs in excess of dealer holdbacks are provided for
by the allowance for loan losses. Net charge-offs on indirect automobile loans
for the years ended December 31, 2001 and 2000, were $1.7 million and $1.9
million, respectively.
Credit Card Loans
We offer Visa, MasterCard, Visa Gold, Business and affinity Visa programs
and sponsors Visa/MasterCard agent bank relationships. At December 31, 2001,
credit card loans were approximately $81 million, or 11.0% of the total loan
portfolio.
Residential Mortgage Banking
The Bank is engaged in the residential mortgage banking business, focusing
on one-to-four family properties. The Bank offers Federal Housing Authority
("FHA"), Veterans Administration ("VA"), conventional and non-conforming loans
(those with balances over $300,700). In addition, loans are purchased from
independent mortgage companies located in the Southeast.
During 2001, the Bank originated approximately $5 million in loans to be
held in its portfolio.
Securities Brokerage Services
Fidelity Capital is a full-service securities broker which was established
in 1992.
International Trade Services
Fidelity provides services to individuals and business clients in meeting
their international business requirements. Letters of credit, foreign currency
drafts, foreign and documentary collections, export finance and international
wire transfers represent some of the services provided.
Recent Developments
The Bank entered into an agreement with the Office of the Comptroller of
the Currency ("OCC") on September 5, 2001, (the "Letter Agreement"). The Letter
Agreement, which stems from the OCC's examination of the Bank as of December 31,
2000, calls for, among other things (i) the appointment of a Compliance
Committee; (ii) total Bank capital of 11% of risk-weighted assets and a leverage
ratio of 8% of adjusted total assets; (iii) three-year strategic
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and capital plans, revised as necessary; (iv) payment of dividends by the Bank
only when there is no supervisory objection; (v) formalizing the process for
reviewing new management capabilities and strengthen management, as required;
(vii) a review of loan policies, loan management information systems, and the
internal loan review process especially related to criticized assets, nonaccrual
loans and the allowance for loan losses; and (viii) revisions to the internal
audit process. Fidelity does not expect to incur significant additional costs to
comply with the consent order or the Letter Agreement, as most items have
already been addressed or can be addressed internally.
Fidelity's Board of Directors on March 21, 2002, adopted a resolution
requested by the Federal Reserve Bank of Atlanta ("Board Resolution"). The Board
Resolution, which followed the Federal Reserve Bank inspection of Fidelity as of
December 31, 2000 and September 30, 2001, among other things, prohibits Fidelity
from redeeming its capital stock, paying dividends on its common stock or
incurring debt without the prior approval of the FRB. The Board Resolution
continues until cancelled by the FRB.
On March 22, 2002 the Bank entered into an alliance and sales agreements
with NOVA Information Systems ("NOVA") pursuant to which NOVA will provide
payment processing services to the merchant customers of the Bank located
predominately in the states of Georgia and Florida. Pursuant to the sales
agreement the Bank sold its existing merchant processing agreements and
recognized a gain of approximately $3.5 million. Under the agreement the Bank
will maintain an interest in the ongoing net revenues from new customers
acquired through this alliance. It is anticipated that the future earnings from
the alliance with NOVA will not be material.
In the conduct of our business, we are subject to various claims, lawsuits
and arbitration proceedings which arise in the normal course of business. These
matters include a recent arbitration award against our securities broker
subsidiary in the aggregate amount of approximately $600,000 plus interest and
fees with respect to the claims filed by 14 claimants. On the basis of present
information, anticipated insurance coverage and advice received from our
counsel, it is our management's opinion that the disposition or ultimate
determination of these pending claims, lawsuits and proceedings will not have a
material adverse affect on our consolidated results of operations or our
consolidated financial position.
RISK FACTORS
Before you invest in our common stock, you should be aware that there are
various risks, including those described below. You should consider carefully
these risk factors together with all of the other information included in this
Prospectus before you decided to purchase shares of our common stock. No
investment should be made by any person who is not in a position to lose the
entire amount of the investment.
Some of the information and statements contained in this Prospectus may
include forward-looking statements that reflect our current expectations
regarding the future and involve risks and uncertainties. These statement may be
identified by the use of forwarding-
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looking terminology such as "believes," "expects," "anticipates," "estimates"
and "intends" and similar expressions. These forwarding-looking statements
involve certain risks and uncertainties. The actual results could differ
materially from those projected for many reasons, including without limitation,
changing events and trends that have influenced Fidelity's assumptions. These
trends and events include (i) changes in the interest rate environment which may
reduce margins, (ii) non-achievement of expected growth, (iii) less favorable
then anticipated changes in the national and local business environment and
securities markets, (iv) adverse changes in the regulatory requirements
affecting the Company, (v) greater competitive pressures among financial
institutions in our market, and (vi) greater loan losses than historic levels.
Investors are encouraged to read the related section in Fidelity's 2001 Annual
Report to Shareholders and those discussed below under "Risk Factors".
Prior Regulatory Approval of Dividends Is Required
Our subsidiary bank is restricted in the payment of dividends to Fidelity
pursuant to the Letter Agreement with the OCC and Fidelity is restricted in the
payment of dividends to our shareholders by the Board Resolution adopted at the
request of the Federal Reserve Bank of Atlanta ("FRB"). Our ability to continue
to pay dividends is subject to the approval of the FRB and the OCC pursuant to
these undertakings. The inability to pay dividends or the reduction in the
amount of the dividends may adversely affect the market price of our common
stock.
Increases in Credit Card Loan Loss Will Adversely Affect Our Financial
Condition
Our loan losses on credit card loans approximate industry norms. There can
be no assurance that credit card losses will not return to higher than
historical levels. Credit card loan losses exceeding our current rate could have
a material adverse effect on the results of our operations and financial
condition.
Increase of Loan Losses in Excess of Allowances for Loan Losses and Loan
Concentration Will Adversely Affect Our Financial Condition
A major risk facing lenders is the risk of losing principal and interest
as a result of a borrower's failure to perform according to the terms of the
loan agreement, or "credit risk." Real estate loans include residential
mortgages and construction and commercial loans secured by real estate. Our
credit risk with respect to real estate loans relates principally to the value
of the underlying collateral. Our credit risk with respect to indirect
automobile loans and commercial loans relates principally to the general
creditworthiness of the borrowers, who primarily are individuals and small and
medium-sized businesses in the metropolitan areas of Atlanta, Georgia and
Jacksonville, Florida. While indirect automobile loans are secured, they are
characterized by loan to value ratios that could result in our not recovering
the full value of an outstanding loan upon default by our borrower. The credit
risk with respect to our credit card portfolio relates principally to the
general creditworthiness of individuals in light of the unsecured nature of
credit card loans. There can be no assurance that our allowance for loan losses
will be adequate to cover future losses in our existing loan portfolios. Loan
losses exceeding historical rates could have a material adverse affect on the
results of our operations and financial condition.
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Changes in Interest Rates May Adversely Affect Net Interest Income
Our profitability depends to a large extent upon net interest income,
which is the difference between interest income on interest-earning assets, such
as loans and investments, and interest expense on interest-bearing liabilities,
such as deposits and borrowings. Our net interest income would be adversely
affected if changes in market interest rates resulted in the cost of
interest-bearing liabilities increasing faster than the increase in the yield on
our interest-earning assets. In addition, a decline in interest rates may result
in greater than normal prepayments of the higher interest-bearing obligations
held by the Company.
Failure to Update Management Information Systems May Adversely Affect Our
Financial Condition
The sophistication and level of risk of our business requires the
utilization of thorough and accurate management information systems. Our failure
to effectively implement, maintain, update and utilize updated management
information systems could prevent management from recognizing in a timely manner
deterioration in the performance of our business, particularly the credit card
and indirect automobile loan portfolios. Such failure to effectively implement,
maintain, update and utilize comprehensive management information systems could
have a material adverse effect on our results of operations and financial
condition.
Adverse Economic Conditions Could Adversly Affect Our Financial Condition
Our major lending activities are indirect automobile, credit card, and
real estate and commercial loans. Indirect automobile loans and residential
mortgage loans are also produced for resale, with servicing rights retained for
indirect automobile loans only. An increase in interest rates could have a
material adverse effect on the housing and automobile industries and consumer
spending generally. In addition, an increase in interest rates could cause a
decline in the value of residential mortgages and indirect automobile loans
held-for-sale. These events could adversely affect our results of operations and
financial condition.
As of December 31, 2001, residential mortgages held-for-sale were
principally on real property located in the metropolitan areas of Atlanta,
Georgia, and Jacksonville, Florida. Indirect automobile loans have been obtained
principally from automobile dealers located in the metropolitan areas of
Jacksonville, Florida, and Atlanta, Georgia. As of December 31, 2001, credit
card loans were concentrated with borrowers in Georgia, California, Texas and
Florida. Adverse national, regional and local economic conditions may adversely
affect our results of operations and financial condition.
The Company is Dependent on Key Personnel
We currently depend heavily on the services of our Chief Executive
Officer, James B. Miller, Jr., and a number of other key management personnel.
The loss of Mr. Miller's services or of other key personnel could materially and
adversely affect our results of operations and financial condition. Our success
will also depend in part on the ability to attract
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and retain additional qualified management personnel. Competition for such
personnel is strong in the banking industry and we may not be successful in
attracting or retaining the personnel we require.
Changes In Governmental Regulation Restrictions Affecting Our Subsidiary
Bank May Adversely Affect Competition and the Cost of Doing Business
We are subject to extensive supervision, regulation and control by several
Federal and state governmental agencies, including the FRB, OCC, Georgia
Department of Banking and Finance ("GBDF"), Federal Deposit Insurance
Corporation ("FDIC"), Federal National Mortgage Association ("FNMA"), Federal
Home Loan Mortgage Corporation ("FHLMC") and GNMA. Future legislation,
regulations and government policy could adversely affect our business and the
financial institution industry as a whole, including the cost of doing business.
Although the impact of such legislation, regulation and policies cannot be
predicted, future changes may alter the structure of and competitive
relationships among financial institutions and the cost of doing business.
Changes In Governmental Regulation Restrictions Regarding Mortgage
Banking May Adversely Affect Our Financial Condition
The mortgage banking operations of our subsidiary bank are subject to
extensive regulation by Federal and state governmental authorities and agencies,
including FNMA, FHLMC, Government National Mortgage Association ("GNMA"), the
Federal Housing Authority and the Veterans Administration. Consequently, We are
subject to various laws, rules and regulations and judicial and administrative
decisions that, among other things, regulate credit-granting activities, govern
secured transactions, and establish collection, repossession and claims-handling
procedures and other trade practices. Our failure to comply with these
regulatory requirements can lead to loss of approved status, termination of
servicing contracts without compensation to the servicer, demands for
indemnification or mortgage loan repurchases, class action lawsuits and
administrative enforcement actions. Although we believe that we are in
compliance in all material respects with applicable federal, state and agency
laws, rules and regulations, there can be no assurance that more restrictive
laws, rules and regulations will not be adopted in the future which could make
compliance more difficult or expensive, restrict our ability to originate,
purchase or sell mortgage loans, further limit or restrict the amount of
interest and other fees that may be earned or charged on mortgage loans
originated, purchased or serviced by us or otherwise adversely affect the
results of our operations and financial condition.
Changes In Governmental Regulation Restrictions of Broker-Dealers May
Increase Costs
The securities industry in the United States is subject to extensive
regulation under both Federal and state laws. Broker-dealers are subject to
regulations covering all aspects of the securities business, including sales
methods, trade practices among broker-dealers, use and safekeeping of customers'
funds and securities, capital structure, record keeping and the conduct of
directors, officers and employees. Our securities broker subsidiary is required
to comply with many complex laws and rules as a broker-dealer, including rules
relating to possession and control of customer funds and securities, margin
lending and execution and settlement of transactions.
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Additional legislation, changes in rules promulgated by the Commission,
NASD, the FRB, the various stock exchange and other self-regulatory
organizations, or changes in the interpretation or enforcement of existing laws
and rules, may directly affect the mode of operation and profitability of
broker-dealers. The Commission, the NASD, and other self-regulatory
organizations and state securities commissions may conduct administrative
proceedings regarding alleged violations of their rules, which can result in
censure, fine, the issuance of cease-and-desist orders or the suspension or
expulsion of a broker-dealer or any of its officers or employees. Our securities
broker subsidiary's ability to comply with all applicable laws and rules is
dependent in large part upon the establishment and maintenance of a compliance
system reasonably designed to ensure such compliance, as well as its ability to
attract and retain qualified compliance personnel. The principal purpose of
regulation and discipline of broker-dealers is the protection of customers and
the securities markets, rather than protection of creditors and stockholders of
broker-dealers. Our securities broker subsidiary could in the future be subject
to disciplinary or other actions due to claimed noncompliance, which could have
a material adverse effect on the results of our operations and financial
condition.
Changes In Consumer and Debtor Protection Laws Compliance May Increase
Costs and Adversely Affect Collections
We are subject to numerous Federal and state consumer protection laws that
impose requirements related to offering and extending credit. The United States
Congress and state governments may enact laws and amend existing laws to
regulate further the consumer industry or to reduce finance charges or other
fees or charges applicable to credit card and other consumer revolving loan
accounts. Such laws, as well as any new laws or rulings which may be adopted,
may adversely affect our ability to collect on account balances or maintain
previous levels of finance charges and other fees and charges with respect to
the accounts. Any failure to comply with such legal requirements also could
adversely affect our ability to collect the full amount of the account balances.
Changes in Federal and state bankruptcy and debtor relief laws could adversely
affect our results of operations and financial condition if such changes result
in, among other things, additional administrative expenses and accounts being
written off as uncollectible.
Our Real Estate Loans Are Affected by the Conditions of the Georgia and
Florida Market
Our subsidiary bank's real estate loan portfolio includes residential
mortgages and construction and commercial loans secured by real estate. All of
our real estate mortgage loans are generated in Georgia and Florida. Therefore,
conditions of these real estate markets could strongly influence the level of
our non-performing mortgage loans and the results of our operations and
financial condition. Real estate values and the demand for mortgages and
construction loans are affected by, among other things, changes in general or
local economic conditions, changes in governmental rules or policies, the
availability of loans to potential purchasers and acts of nature. Although our
underwriting standards are intended to protect us against adverse general and
local real estate trends, declines in real estate markets could adversely impact
the demand for new real estate loans, the value of the collateral securing our
loans and the results of our operations and financial condition.
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Changes in Monetary Policy by the Federal Reserve May Adversely Affect Our
Business
Our operating results are affected by credit policies of monetary
authorities, particularly the Federal Reserve. The instruments of monetary
policy employed by the Federal Reserve include open market operations in U.S.
Government securities, changes in the discount rate on bank borrowings and
changes in reserve requirements against bank deposits. In view of changing
conditions in the national economy and in the money markets, as well as the
effect of action by monetary and fiscal authorities, including the Federal
Reserve, no prediction can be made as to possible effects of future changes in
interest rates, deposit levels and loan demand on the results of our operations
and business.
Changes in Our Relationships with Dealers May Adversely Affect the Volume
of Finance Contracts Acquired and Sold
Our indirect automobile lending operation depends in large part upon its
ability to maintain and service its relationship with automobile dealers. There
can be no assurance we will be successful in maintaining such relationships or
increasing the number of dealers with which we do business or that our existing
dealer base will continue to generate a volume of finance contracts comparable
to the volume historically generated by such dealers.
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PLAN OF DISTRIBUTION
Raymond James may sell the shares of common stock subject to this
Prospectus directly to purchasers in the over-the-counter market, through
broker-dealers acting as agents for selling shareholder or to broker-dealers who
may purchase securities as principals and thereafter sell the common stock from
time to time in the over-the-counter market, in negotiated transactions or
otherwise. Such broker-dealers, if any, may receive compensation in the form of
discounts, concessions or commissions from the selling shareholder and/or the
purchasers for whom such broker-dealers act as agents or to whom it may sell as
principals or otherwise (which compensation as to a particular broker-dealer may
exceed customary commissions). The selling shareholder will pay all commissions,
transfer taxes, and other expenses associated with the sale of common stock by
it.
The selling shareholder and broker-dealers, if any, acting in connection
with such sales may be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act and any commission received by them and any profit
on the resale of the securities by them might be deemed to be underwriting
discounts and commissions under the Securities Act. We have agreed to indemnify
the selling shareholder against certain liabilities under the Securities Act.
From time to time this Prospectus will be supplemented and amended as
required by the Securities Act. During any time when a supplement or amendment
is so required, the selling shareholder is to cease sales until the Prospectus
has been supplemented or amended. Pursuant to the registration rights granted to
the selling shareholder, we have agreed to update and maintain the effectiveness
of this Prospectus. The selling shareholder also is entitled to sell its shares
without the use of this Prospectus, provided that it complies with the
requirements of Rule 144 promulgated under the Securities Act.
We are bearing all costs relating to the registration of the shares of
common stock offered hereby other than certain fees and expenses, if any, of
advisors to the selling shareholder. Any commissions, discounts or other fees
payable to brokers or dealers in connection with any sale of the shares will be
borne by the selling shareholder, the purchasers participating in such
transaction, or both.
EXPERTS
The consolidated financial statements of Fidelity National Corporation and
Subsidiaries incorporated by reference in Fidelity National Corporation's Annual
Report (Form 10-K) for the year ended December 31, 2001 have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
incorporated by reference therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
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LEGAL MATTERS
The validity of the issuance of the shares of common stock offered hereby and
certain other legal matters in connection with this offering have been passed
upon for us by Nelson Mullins Riley & Scarborough, LLP, Atlanta, Georgia.
LIMITATION OF LIABILITY AND INDEMNIFICATION
The Company has adopted provisions in its Article of Incorporation that
eliminate the personal liability of its directors for monetary damages arising
from a breach of their fiduciary duties in certain circumstances to the fullest
extent permitted by law and that authorize the Company to indemnify its
directors and officers to the fullest extent permitted by law. Such limitation
of liability does not affect the availability of equitable remedies such as
injunctive relief or rescission.
The Bylaws provide that the Company shall indemnify its directors and
officers to the fullest extent permitted by the laws of Georgia, including
circumstances in which indemnification is otherwise discretionary under Georgia
law. The Bylaws also provide that, to the fullest extent permitted by Georgia
law, the Company shall advance expenses incurred by its directors and officers
as a result of any proceedings against them as to which they could be
indemnified.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable. The Company believes that its Articles of Incorporation and Bylaw
provisions and indemnification agreements are necessary to attract and retain
qualified persons as directors and officers.
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TABLE OF CONTENTS
PAGE
The Offering 2
Use of Proceeds 2
Selling Shareholder 2
Available Information 3
Documents Incorporated by Reference 3
Prospectus Summary 5
The Company 5
Risk Factors 8
Plan of Distribution 14
Experts 14
Legal Matters 15
Limitation of Liability and Indemnification 15
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