First Security Group, Inc. (NASDAQ:FSGI) (“First Security” or “FSG”)
reported net income for the first quarter of 2015 of $540 thousand, or
$0.01 per basic and diluted share.
Financial Highlights
-
Net income of $540 thousand for the first quarter of 2015, a $585
thousand improvement from the first quarter of 2014.
-
Loans held-for-investment totaled $734.5 million at quarter-end, an
increase of $70.9 million, or 10.7%, from December 31, 2014.
-
Pure deposits as of March 31, 2015 increased by $13.2 million, or
2.5%, to $543.0 million compared to $529.7 million as of December 31,
2014.
“The first quarter demonstrated our ability to achieve strong loan
growth, highlighted by the growth within our key Knoxville and
Chattanooga markets,” said Michael Kramer, First Security’s President
and Chief Executive Officer. “Our positive results reflect the
tremendous effort put forth by our board, management and our entire team
to transform FSG into a strong community bank.”
The below discussion of First Security’s results of operations and
financial condition is supplemented by the accompanying financial
highlights.
Net Interest Income
For the quarter ended March 31, 2015, net interest income totaled $8.3
million, an increase of $388 thousand, or 4.9%, as compared to the
fourth quarter of 2014 and an increase of $1.4 million, or 20.3%, as
compared to $6.9 million for the first quarter of 2014. The net interest
margin improved to 3.45% for the first quarter of 2015 as compared to
3.32% for the fourth quarter of 2014 and 3.21% for the first quarter of
2014. The consistent improvement in the margin is a result of First
Security's continued balance sheet restructuring; specifically,
deploying a greater percentage of total earning assets into loans and
growing low-cost deposits while reducing the reliance on certificates of
deposit.
Loans
Loans totaled $734.5 million as of March 31, 2015, an increase of $70.9
million, or 10.7%, from December 31, 2014, and an increase of $129.6
million, or 21.4%, from March 31, 2014. Loans held-for-sale totaled
$23.3 million as of quarter-end as compared to $72.2 million and $35.5
million as of December 31, 2014 and March 31, 2014, respectively.
Deposits
The average balance of pure deposits, defined as transaction accounts,
increased by $11.9 million, or 2.3%, and $90.7 million, or 20.3%, during
the first quarter of 2015 as compared to the fourth and first quarters
of 2014, respectively. By further improving its deposit mix towards
lower cost deposits, FSG reduced the overall cost of deposits to 0.46%
for the first quarter of 2015 as compared to 0.49% for the fourth
quarter of 2014 and 0.65% for the first quarter of 2014.
Non-Interest Income
Non-interest income totaled $4.5 million for the quarter ended March 31,
2015, an increase of $693 thousand, or 18.3%, and $1.8 million, or
70.1%, compared to the fourth and first quarter of 2014, respectively.
During the first quarter of 2015, gains on sales of loans totaled $1.1
million, which was the primary driver of the increase. Additionally,
First Security holds certain interest rate swaps that resulted in a $1.2
million gain during the first quarter of 2015, however, an equal and
offsetting amount is included in non-interest expense. As of March 31,
2015, loans held-for-sale total $23.3 million, which are expected to
sell for gains during the second quarter of 2015.
“We successfully executed on approximately $60 million in loan sales
from our TriNet Direct division during the first quarter and recorded in
excess of $1 million in related income. Our TriNet division consistently
provides strong loan originations and we will continue to evaluate and
sell a portion of this production to assist in managing our commercial
real estate and interest rate concentrations,” said John Haddock, First
Security’s EVP and Chief Financial Officer. “We remain focused on
improving our core profitability each and every quarter, as measured by
pre-provision income. Comparing the first quarter of 2015 to the fourth
quarter, we expanded our pre-provision income by $546 thousand, or
nearly 78%.”
Non-Interest Expense
Non-interest expense increased by $976 thousand, or 9.3%, to $11.4
million for the quarter ended March 31, 2015 as compared to the same
period in 2014 and by $521 thousand, or 4.8%, as compared to the fourth
quarter of 2014. Excluding the loss on interest rate swaps above
discussed, non-interest expense decreased by $159 thousand, or 1.5%, and
$90 thousand, or 0.9%, as compared to the first and fourth quarters of
2014, respectively. As of March 31, 2015, full-time equivalent employees
totaled 262 as compared to 275 as of March 31, 2014 and 268 as of
December 31, 2014.
Asset Quality
First Security recorded provision expense of $707 thousand in the first
quarter to adjust the allowance for loan losses to FSG’s current
estimate of $8.7 million as of March 31, 2015. The ratio of the
allowance to total loans decreased to 1.18% from 1.29% as of December
31, 2014. Total non-performing assets (“NPAs”) declined by $264 thousand
during the first quarter to improve the NPA to total assets ratio from
0.84% at December 31, 2014 to 0.82% at March 31, 2015.
Capital
Stockholders’ equity as of March 31, 2015 totaled $90.7 million, a $746
thousand increase from December 31, 2014 and a $6.1 million increase
from March 31, 2014. As of March 31, 2015, book value per share
increased to $1.36 per share compared to $1.35 per share as of December
31, 2014 and $1.27 per share as of March 31, 2014.
“As we announced in March, we have entered into a definitive merger
agreement with Atlantic Capital Bancshares, based in Atlanta,” said CEO
Kramer. “We believe the combination of the two banks will provide the
foundation to build a premier financial institution in the Southeast
that is focused on business and private banking.”
About First Security Group, Inc.
First Security Group, Inc. is a bank holding company headquartered in
Chattanooga, Tennessee, with $1.1 billion in assets. Founded in 1999,
First Security’s community bank subsidiary, FSGBank, N.A. has 26
full-service banking offices along the interstate corridors of eastern
and middle Tennessee and northern Georgia. FSGBank provides retail and
commercial banking services, trust and investment management, mortgage
banking, financial planning, and internet banking (www.FSGBank.com).
Information About Atlantic Capital Bancshares, Inc.
Atlantic Capital Bancshares, Inc. ("Atlantic Capital") is a bank holding
company headquartered in Atlanta, Georgia. Atlantic Capital was founded
in 2007 through the then-largest equity capital raise in U.S. history by
a de novo bank holding company. Atlantic Capital’s wholly-owned bank
subsidiary, Atlantic Capital Bank, has grown to $1.3 billion in assets
with a single office and significant investments in technology, talent
and customer service. Atlantic Capital Bank serves privately held small-
and mid-size companies and not-for-profit organizations;
institutional-caliber commercial real estate developers and investors;
and individuals throughout metropolitan Atlanta.
Non-GAAP Financial Measures
This press release contains financial information determined by methods
other than in accordance with generally accepted accounting principles
in the United States of America (GAAP). First Security’s management uses
these “non-GAAP” measures in its analysis of First Security’s
performance. Non-GAAP measures typically adjust GAAP performance
measures to exclude the effects of significant gains, losses or expenses
that are unusual in nature and not expected to recur. Non-GAAP measures
may also exclude non-recurring charges, expenses and gains related to
the consummation of mergers and acquisitions, and costs related to the
integration of merged entities. Since these items and their impact on
First Security’s performance are difficult to predict, management
believes presentations of financial measures excluding the impact of
these items provide useful supplemental information that is important
for a proper understanding of the operating results of First Security’s
core business. These disclosures should not be viewed as a substitute
for operating results determined in accordance with GAAP, nor are they
necessarily comparable to non-GAAP performance measures that may be
presented by other companies.
Additional Information About the Atlantic Capital/First Security
Transaction:
On March 25, 2015, First Security and Atlantic Capital issued a joint
press release to announce the signing of a definitive merger agreement
pursuant to which Atlantic Capital will acquire First Security.
This press release relates to the proposed merger transaction involving
Atlantic Capital and First Security. In connection with the proposed
merger, Atlantic Capital and First Security will file a registration
statement on Form S-4 that will include a joint proxy
statement/prospectus, and other relevant documents concerning the merger
with the Securities and Exchange Commission (the “SEC”). This press
release does not constitute an offer to sell or the solicitation of an
offer to buy any securities or a solicitation of any vote or approval.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO
READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS TO BE
FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR
INCORPORATED BY REFERENCE IN THE JOINT PROXY STATEMENT/PROSPECTUS
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT ATLANTIC CAPITAL,
FIRST SECURITY AND THE PROPOSED MERGER. When available, the joint proxy
statement/prospectus will be delivered to shareholders of Atlantic
Capital and shareholders of First Security. Investors will also be able
to obtain copies of the joint proxy statement/prospectus and other
relevant documents (when they become available) free of charge at the
SEC’s website (www.sec.gov).
Copies of documents filed with the SEC by Atlantic Capital will be
available free of charge from Carol Tiarsmith, Executive Vice President
and Chief Financial Officer, Atlantic Capital Bancshares, 3280 Peachtree
Road, N.E., Suite 1600, Atlanta, Georgia, 30305, telephone:
404-995-6050. Documents filed with the SEC by First Security will be
available free of charge from First Security by contacting John R.
Haddock, Executive Vice President and Chief Financial Officer, First
Security Group, Inc., 531 Broad Street, Chattanooga, Tennessee,
telephone: (423) 308-2075.
Atlantic Capital, First Security and certain of their directors,
executive officers and other members of management and employees may be
deemed to be participants in the solicitation of proxies from the
shareholders of Atlantic Capital and the shareholders of First Security
in connection with the proposed merger. Information about the directors
and executive officers of Atlantic Capital will be included in the joint
proxy statement/prospectus for the proposed transaction. Information
about the directors and executive officers of First Security is included
in the proxy statement for its 2015 annual meeting of shareholders,
which was filed with the SEC on April 29, 2015. Additional information
regarding the interests of such participants and other persons who may
be deemed participants in the transaction will be included in the joint
proxy statement/prospectus and the other relevant documents filed with
the SEC when they become available.
“Safe Harbor” Statement Under the Private Securities Litigation
Reform Act of 1995:
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, which
Congress passed in an effort to encourage companies to provide
information about their anticipated future financial performance. This
act protects a company from unwarranted litigation if actual results are
different from management expectations. This press release reflects the
current views and estimates of future economic circumstances, industry
conditions, company performance, and financial results of the management
of Atlantic Capital and First Security. These forward-looking statements
are subject to a number of factors and uncertainties which could cause
Atlantic Capital’s, First Security’s or the combined company’s actual
results and experience to differ from the anticipated results and
expectations expressed in such forward-looking statements, and such
differences may be material. Forward-looking statements speak only as of
the date they are made and neither Atlantic Capital nor First Security
assumes any duty to update forward-looking statements. In addition to
factors previously disclosed in First Security’s reports filed with the
SEC and those identified elsewhere in this press release, these
forward-looking statements include, but are not limited to, statements
about (i) the expected benefits of the transaction between Atlantic
Capital and First Security and between Atlantic Capital Bank and
FSGBank, including future financial and operating results, cost savings,
enhanced revenues and the expected market position of the combined
company that may be realized from the transaction, and (ii) Atlantic
Capital’s and First Security’s plans, objectives, expectations and
intentions and other statements contained in this press release that are
not historical facts. Other statements identified by words such as
“expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,”
“estimates,” “targets,” “will,” “projects” or words of similar meaning
generally are intended to identify forward-looking statements. These
statements are based upon the current beliefs and expectations of
Atlantic Capital’s and First Security’s management and are inherently
subject to significant business, economic and competitive risks and
uncertainties, many of which are beyond their respective control. In
addition, these forward-looking statements are subject to assumptions
with respect to future business strategies and decisions that are
subject to change. Actual results may differ from those indicated or
implied in the forward-looking statements and such differences may be
material.
The following risks, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed
in the forward-looking statements: (1) the businesses of Atlantic
Capital and First Security may not integrate successfully or the
integration may be more difficult, time-consuming or costly than
expected; (2) the expected growth opportunities and cost savings from
the transaction may not be fully realized or may take longer to realize
than expected; (3) revenues following the transaction may be lower than
expected as a result of losses of customers or other reasons, including
issues arising in connection with integration of the two banks; (4)
deposit attrition, operating costs, customer loss and business
disruption following the transaction, including difficulties in
maintaining relationships with employees, may be greater than expected;
(5) governmental approvals of the transaction may not be obtained on the
proposed terms or expected timeframe; (6) the terms of the proposed
transaction may need to be modified to satisfy such approvals or
conditions; (7) Atlantic Capital's shareholders or First Security's
shareholders may fail to approve the transaction; (8) reputational risks
and the reaction of the companies’ customers to the transaction; (9)
diversion of management time on merger related issues; (10) changes in
asset quality and credit risk; (11) the cost and availability of
capital; (12) customer acceptance of the combined company’s products and
services; (13) customer borrowing, repayment, investment and deposit
practices; (14) the introduction, withdrawal, success and timing of
business initiatives; (15) the impact, extent, and timing of
technological changes; (16) severe catastrophic events in our geographic
area; (17) a weakening of the economies in which the combined company
will conduct operations may adversely affect its operating results; (18)
the U.S. legal and regulatory framework, including those associated with
the Dodd Frank Wall Street Reform and Consumer Protection Act, could
adversely affect the operating results of the combined company; (19) the
interest rate environment may compress margins and adversely affect net
interest income; (20) competition from other financial services
companies in the companies’ markets could adversely affect operations;
and (21) Atlantic Capital may not be able to raise sufficient financing
to consummate the merger. Additional factors that could cause First
Security’s results to differ materially from those described in the
forward-looking statements can be found in First Security’s reports
(such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K) filed with the SEC and available at the
SEC’s website (www.sec.gov).
All subsequent written and oral forward-looking statements concerning
Atlantic Capital, First Security or the proposed merger or other matters
and attributable to Atlantic Capital, First Security or any person
acting on either of their behalf are expressly qualified in their
entirety by the cautionary statements above. Atlantic Capital and First
Security do not undertake any obligation to update any forward-looking
statement, whether written or oral, to reflect circumstances or events
that occur after the date the forward-looking statements are made.
Public companies, from time to time, become aware of rumors concerning
their business. Investors are cautioned that in this age of instant
communication and internet access, it may be important to avoid relying
on rumors and unsubstantiated information. First Security complies with
Federal and State law applicable to disclosure of information. Investors
may be at significant risk in relying on unsubstantiated information
from other sources.
|
First Security Group, Inc. and Subsidiary
Consolidated Financial Highlights
(unaudited)
|
|
|
1st Quarter
|
|
4th Quarter
|
|
3rd Quarter
|
|
2nd Quarter
|
|
1st Quarter
|
|
|
2015
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
|
(in thousands, except per share amounts and full-time equivalent
employees)
|
Earnings:
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
$
|
8,332
|
|
|
$
|
7,944
|
|
|
$
|
8,487
|
|
|
$
|
7,545
|
|
|
$
|
6,925
|
|
Provision (credit) for loan and lease losses
|
|
$
|
707
|
|
|
$
|
(221
|
)
|
|
$
|
11
|
|
|
$
|
(270
|
)
|
|
$
|
(972
|
)
|
Non-interest income1
|
|
$
|
4,481
|
|
|
$
|
3,788
|
|
|
$
|
2,805
|
|
|
$
|
3,030
|
|
|
$
|
2,635
|
|
Non-interest expense1
|
|
$
|
11,421
|
|
|
$
|
10,900
|
|
|
$
|
10,222
|
|
|
$
|
10,101
|
|
|
$
|
10,445
|
|
Income tax provision
|
|
$
|
145
|
|
|
$
|
131
|
|
|
$
|
132
|
|
|
$
|
131
|
|
|
$
|
132
|
|
Net income (loss)
|
|
$
|
540
|
|
|
$
|
922
|
|
|
$
|
927
|
|
|
$
|
613
|
|
|
$
|
(45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Data:
|
|
|
|
|
|
|
|
|
|
|
Net income (loss), basic
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
$
|
(0.00
|
)
|
Net income (loss), diluted
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
$
|
(0.00
|
)
|
Book value per common share
|
|
$
|
1.36
|
|
|
$
|
1.35
|
|
|
$
|
1.32
|
|
|
$
|
1.30
|
|
|
$
|
1.27
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios:
|
|
|
|
|
|
|
|
|
|
|
Return on average assets
|
|
|
0.20
|
%
|
|
|
0.36
|
%
|
|
|
0.36
|
%
|
|
|
0.24
|
%
|
|
|
(0.02
|
)%
|
Return on average common equity
|
|
|
2.38
|
%
|
|
|
4.13
|
%
|
|
|
4.23
|
%
|
|
|
2.86
|
%
|
|
|
(0.21
|
)%
|
Efficiency ratio
|
|
|
89.14
|
%
|
|
|
92.91
|
%
|
|
|
90.52
|
%
|
|
|
95.52
|
%
|
|
|
109.26
|
%
|
Non-interest income to net interest income and non-interest income
|
|
|
34.97
|
%
|
|
|
32.29
|
%
|
|
|
24.84
|
%
|
|
|
28.65
|
%
|
|
|
27.56
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Capital:
|
|
|
|
|
|
|
|
|
|
|
Total equity to total assets
|
|
|
8.56
|
%
|
|
|
8.41
|
%
|
|
|
8.56
|
%
|
|
|
8.55
|
%
|
|
|
8.63
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity, Yields and Rates:
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing cash - average balance
|
|
$
|
11,211
|
|
|
$
|
9,757
|
|
|
$
|
8,436
|
|
|
$
|
8,997
|
|
|
$
|
13,653
|
|
Investment securities - average balance
|
|
|
215,693
|
|
|
|
225,253
|
|
|
|
230,297
|
|
|
|
247,459
|
|
|
|
272,563
|
|
Loans - average balance
|
|
|
758,215
|
|
|
|
718,917
|
|
|
|
702,271
|
|
|
|
673,175
|
|
|
|
604,298
|
|
Average Earning Assets
|
|
$
|
985,119
|
|
|
$
|
953,927
|
|
|
$
|
941,004
|
|
|
$
|
929,631
|
|
|
$
|
890,514
|
|
Pure deposits2 - average balance
|
|
$
|
537,543
|
|
|
$
|
525,691
|
|
|
$
|
493,707
|
|
|
$
|
455,407
|
|
|
$
|
446,820
|
|
Core deposits3 - average balance
|
|
|
687,403
|
|
|
|
680,008
|
|
|
|
654,893
|
|
|
|
622,636
|
|
|
|
624,365
|
|
Customer deposits4 - average balance
|
|
|
805,054
|
|
|
|
802,837
|
|
|
|
783,996
|
|
|
|
757,704
|
|
|
|
773,336
|
|
Brokered deposits - average balance
|
|
|
109,734
|
|
|
|
83,490
|
|
|
|
85,369
|
|
|
|
84,021
|
|
|
|
70,204
|
|
Total deposits - average balance
|
|
$
|
914,788
|
|
|
$
|
886,327
|
|
|
$
|
869,365
|
|
|
$
|
841,725
|
|
|
$
|
843,540
|
|
Total loans to total deposits
|
|
|
79.53
|
%
|
|
|
73.28
|
%
|
|
|
75.85
|
%
|
|
|
76.01
|
%
|
|
|
71.85
|
%
|
Yield on earning assets
|
|
|
3.89
|
%
|
|
|
3.79
|
%
|
|
|
4.14
|
%
|
|
|
3.86
|
%
|
|
|
3.85
|
%
|
Rate on customer deposits (including impact of non-interest bearing
DDAs)
|
|
|
0.36
|
%
|
|
|
0.37
|
%
|
|
|
0.37
|
%
|
|
|
0.37
|
%
|
|
|
0.41
|
%
|
Cost of deposits
|
|
|
0.46
|
%
|
|
|
0.49
|
%
|
|
|
0.55
|
%
|
|
|
0.59
|
%
|
|
|
0.65
|
%
|
Rate on interest-bearing funding
|
|
|
0.53
|
%
|
|
|
0.58
|
%
|
|
|
0.66
|
%
|
|
|
0.68
|
%
|
|
|
0.78
|
%
|
Net interest margin, taxable equivalent
|
|
|
3.45
|
%
|
|
|
3.32
|
%
|
|
|
3.60
|
%
|
|
|
3.30
|
%
|
|
|
3.21
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Income:
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposits
|
|
$
|
674
|
|
|
$
|
793
|
|
|
$
|
778
|
|
|
$
|
769
|
|
|
$
|
741
|
|
POS fees
|
|
|
422
|
|
|
|
426
|
|
|
|
436
|
|
|
|
439
|
|
|
|
401
|
|
BOLI
|
|
|
210
|
|
|
|
235
|
|
|
|
234
|
|
|
|
235
|
|
|
|
351
|
|
Mortgage banking income
|
|
|
212
|
|
|
|
357
|
|
|
|
462
|
|
|
|
279
|
|
|
|
180
|
|
Trust
|
|
|
265
|
|
|
|
245
|
|
|
|
233
|
|
|
|
235
|
|
|
|
200
|
|
Net gains on sales of loans
|
|
|
1,060
|
|
|
|
886
|
|
|
|
254
|
|
|
|
450
|
|
|
|
22
|
|
Interest rate swap gains
|
|
|
1,240
|
|
|
|
629
|
|
|
|
138
|
|
|
|
132
|
|
|
|
105
|
|
Other
|
|
|
390
|
|
|
|
217
|
|
|
|
260
|
|
|
|
244
|
|
|
|
264
|
|
Net gains on securities available-for-sale
|
|
|
8
|
|
|
|
—
|
|
|
|
10
|
|
|
|
247
|
|
|
|
371
|
|
Total Non-Interest Income
|
|
$
|
4,481
|
|
|
$
|
3,788
|
|
|
$
|
2,805
|
|
|
$
|
3,030
|
|
|
$
|
2,635
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Expense:
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits
|
|
$
|
5,420
|
|
|
$
|
5,576
|
|
|
$
|
5,153
|
|
|
$
|
5,225
|
|
|
$
|
5,274
|
|
Occupancy
|
|
|
798
|
|
|
|
732
|
|
|
|
814
|
|
|
|
776
|
|
|
|
820
|
|
Furniture and fixtures
|
|
|
665
|
|
|
|
580
|
|
|
|
565
|
|
|
|
520
|
|
|
|
557
|
|
Professional fees
|
|
|
605
|
|
|
|
888
|
|
|
|
658
|
|
|
|
690
|
|
|
|
599
|
|
FDIC insurance assessments
|
|
|
242
|
|
|
|
336
|
|
|
|
336
|
|
|
|
336
|
|
|
|
311
|
|
Write-downs on OREO and repossessions
|
|
|
143
|
|
|
|
59
|
|
|
|
289
|
|
|
|
76
|
|
|
|
309
|
|
Losses (Gains) on OREO, repossessions and fixed assets, net
|
|
|
3
|
|
|
|
(369
|
)
|
|
|
(113
|
)
|
|
|
(15
|
)
|
|
|
10
|
|
Non-performing asset expenses, net
|
|
|
107
|
|
|
|
193
|
|
|
|
204
|
|
|
|
184
|
|
|
|
221
|
|
Data processing
|
|
|
533
|
|
|
|
618
|
|
|
|
577
|
|
|
|
506
|
|
|
|
588
|
|
Communications
|
|
|
116
|
|
|
|
120
|
|
|
|
129
|
|
|
|
147
|
|
|
|
150
|
|
Debit card fees
|
|
|
244
|
|
|
|
307
|
|
|
|
244
|
|
|
|
232
|
|
|
|
258
|
|
Intangible asset amortization
|
|
|
50
|
|
|
|
50
|
|
|
|
49
|
|
|
|
49
|
|
|
|
48
|
|
Printing and supplies
|
|
|
136
|
|
|
|
147
|
|
|
|
144
|
|
|
|
150
|
|
|
|
207
|
|
Advertising
|
|
|
153
|
|
|
|
147
|
|
|
|
140
|
|
|
|
135
|
|
|
|
134
|
|
Insurance
|
|
|
295
|
|
|
|
296
|
|
|
|
295
|
|
|
|
303
|
|
|
|
325
|
|
Interest rate swap loss
|
|
|
1,240
|
|
|
|
629
|
|
|
|
138
|
|
|
|
138
|
|
|
|
105
|
|
Other
|
|
|
671
|
|
|
|
591
|
|
|
|
600
|
|
|
|
649
|
|
|
|
529
|
|
Total Non-Interest Expense
|
|
$
|
11,421
|
|
|
$
|
10,900
|
|
|
$
|
10,222
|
|
|
$
|
10,101
|
|
|
$
|
10,445
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality:
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (recoveries)
|
|
$
|
561
|
|
|
$
|
(221
|
)
|
|
$
|
664
|
|
|
$
|
(470
|
)
|
|
$
|
228
|
|
Net loan charge-offs (recoveries) to average loans, annualized
|
|
|
0.30
|
%
|
|
|
(0.03
|
)%
|
|
|
0.19
|
%
|
|
|
(0.14
|
)%
|
|
|
0.15
|
%
|
Non-accrual loans
|
|
$
|
4,150
|
|
|
$
|
4,348
|
|
|
$
|
4,000
|
|
|
$
|
4,891
|
|
|
$
|
6,027
|
|
Other real estate owned and repossessed assets, net
|
|
$
|
4,207
|
|
|
$
|
4,519
|
|
|
$
|
5,960
|
|
|
$
|
7,725
|
|
|
$
|
7,075
|
|
Loans 90 days past due
|
|
$
|
347
|
|
|
$
|
100
|
|
|
$
|
1,951
|
|
|
$
|
1,083
|
|
|
$
|
854
|
|
Non-performing assets (NPA)
|
|
$
|
8,704
|
|
|
$
|
8,967
|
|
|
$
|
11,911
|
|
|
$
|
13,699
|
|
|
$
|
13,956
|
|
NPA to total assets
|
|
|
0.82
|
%
|
|
|
0.84
|
%
|
|
|
1.16
|
%
|
|
|
1.35
|
%
|
|
|
1.42
|
%
|
Non-performing loans (NPL)
|
|
$
|
4,497
|
|
|
$
|
4,448
|
|
|
$
|
5,951
|
|
|
$
|
5,974
|
|
|
$
|
6,881
|
|
NPL to total loans
|
|
|
0.61
|
%
|
|
|
0.67
|
%
|
|
|
0.89
|
%
|
|
|
0.91
|
%
|
|
|
1.14
|
%
|
Allowance for loan and lease losses to total loans
|
|
|
1.18
|
%
|
|
|
1.29
|
%
|
|
|
1.29
|
%
|
|
|
1.43
|
%
|
|
|
1.52
|
%
|
Allowance for loan and lease losses to NPL
|
|
|
192.35
|
%
|
|
|
192.22
|
%
|
|
|
144.51
|
%
|
|
|
157.35
|
%
|
|
|
133.70
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Period End Balances:
|
|
|
|
|
|
|
|
|
|
|
Loans, excluding HFS
|
|
$
|
734,478
|
|
|
$
|
663,622
|
|
|
$
|
666,728
|
|
|
$
|
659,539
|
|
|
$
|
604,859
|
|
Allowance for loan and lease losses
|
|
$
|
8,650
|
|
|
$
|
8,550
|
|
|
$
|
8,600
|
|
|
$
|
9,400
|
|
|
$
|
9,200
|
|
Loans held-for-sale
|
|
$
|
23,347
|
|
|
$
|
72,242
|
|
|
$
|
46,904
|
|
|
$
|
28,547
|
|
|
$
|
35,503
|
|
Intangible assets
|
|
$
|
84
|
|
|
$
|
134
|
|
|
$
|
184
|
|
|
$
|
233
|
|
|
$
|
282
|
|
Assets
|
|
$
|
1,059,278
|
|
|
$
|
1,070,244
|
|
|
$
|
1,027,882
|
|
|
$
|
1,012,685
|
|
|
$
|
980,505
|
|
Deposits
|
|
$
|
923,552
|
|
|
$
|
905,613
|
|
|
$
|
879,029
|
|
|
$
|
867,709
|
|
|
$
|
841,832
|
|
Total shareholders' equity
|
|
$
|
90,726
|
|
|
$
|
89,980
|
|
|
$
|
87,963
|
|
|
$
|
86,566
|
|
|
$
|
84,654
|
|
Common stock market capitalization
|
|
$
|
160,332
|
|
|
$
|
151,027
|
|
|
$
|
132,315
|
|
|
$
|
144,594
|
|
|
$
|
138,601
|
|
Full-time equivalent employees
|
|
|
262
|
|
|
|
268
|
|
|
|
264
|
|
|
|
264
|
|
|
|
275
|
|
Common shares outstanding
|
|
|
66,805
|
|
|
|
66,826
|
|
|
|
66,826
|
|
|
|
66,633
|
|
|
|
66,635
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Balances:
|
|
|
|
|
|
|
|
|
|
|
Loans, including HFS
|
|
$
|
758,215
|
|
|
$
|
718,917
|
|
|
$
|
702,271
|
|
|
$
|
673,175
|
|
|
$
|
604,298
|
|
Intangible assets
|
|
$
|
116
|
|
|
$
|
166
|
|
|
$
|
217
|
|
|
$
|
265
|
|
|
$
|
313
|
|
Earning assets
|
|
$
|
985,119
|
|
|
$
|
953,927
|
|
|
$
|
941,004
|
|
|
$
|
929,631
|
|
|
$
|
890,514
|
|
Assets
|
|
$
|
1,069,751
|
|
|
$
|
1,033,327
|
|
|
$
|
1,017,631
|
|
|
$
|
1,006,143
|
|
|
$
|
967,624
|
|
Deposits
|
|
$
|
914,788
|
|
|
$
|
886,327
|
|
|
$
|
869,365
|
|
|
$
|
841,725
|
|
|
$
|
843,540
|
|
Total shareholders' equity
|
|
$
|
90,923
|
|
|
$
|
89,205
|
|
|
$
|
87,656
|
|
|
$
|
85,613
|
|
|
$
|
84,340
|
|
Common shares outstanding, basic - wtd
|
|
|
65,932
|
|
|
|
65,915
|
|
|
|
65,869
|
|
|
|
65,731
|
|
|
|
65,726
|
|
Common shares outstanding, diluted - wtd
|
|
|
65,932
|
|
|
|
65,950
|
|
|
|
65,874
|
|
|
|
65,737
|
|
|
|
65,726
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Certain amounts were reclassified between non-interest
income and non-interest expense to conform with the current
presentation.
|
2 Pure deposits are all transaction-based accounts,
including non-interest bearing DDAs, interest bearing DDAs, money
market accounts and savings accounts.
|
3 Core deposits are Pure deposits plus customer
certificates of deposits less than $100,000.
|
4 Customer deposits are total deposits less brokered
deposits.
|
|
|
First Security Group, Inc. and Subsidiary
Consolidated Balance Sheets
|
|
|
|
March 31, 2015
|
|
December 31, 2014
|
|
March 31, 2014
|
(in thousands, except share amounts)
|
|
(unaudited)
|
|
|
|
(unaudited)
|
ASSETS
|
|
|
|
|
|
|
Cash and Due from Banks
|
|
$
|
14,486
|
|
$
|
18,447
|
|
$
|
7,896
|
|
Interest Bearing Deposits in Banks
|
|
|
7,569
|
|
|
29,582
|
|
|
11,503
|
|
Cash and Cash Equivalents
|
|
|
22,055
|
|
|
48,029
|
|
|
19,399
|
|
Securities Available-for-Sale
|
|
|
91,962
|
|
|
95,571
|
|
|
120,087
|
|
Securities Held-to-Maturity, at amortized cost (fair value -
$124,563 at March 31, 2015; $128,058 at December 31, 2014 and
$132,695 at March 31, 2014)
|
|
|
119,224
|
|
|
124,485
|
|
|
131,819
|
|
Loans Held-for-Sale
|
|
|
23,347
|
|
|
72,242
|
|
|
35,503
|
|
Loans
|
|
|
734,478
|
|
|
663,622
|
|
|
604,859
|
|
Less: Allowance for Loan and Lease Losses
|
|
|
8,650
|
|
|
8,550
|
|
|
9,200
|
|
Net Loans
|
|
|
725,828
|
|
|
655,072
|
|
|
595,659
|
|
Premises and Equipment, net
|
|
|
29,318
|
|
|
28,347
|
|
|
28,143
|
|
Bank Owned Life Insurance
|
|
|
29,362
|
|
|
29,204
|
|
|
28,649
|
|
Other Real Estate Owned
|
|
|
4,199
|
|
|
4,511
|
|
|
7,067
|
|
Other Assets
|
|
|
13,983
|
|
|
12,783
|
|
|
14,179
|
|
TOTAL ASSETS
|
|
$
|
1,059,278
|
|
$
|
1,070,244
|
|
$
|
980,505
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
Noninterest Bearing Demand
|
|
$
|
160,128
|
|
$
|
159,996
|
|
$
|
150,075
|
|
Interest Bearing Demand
|
|
|
117,557
|
|
|
111,021
|
|
|
100,495
|
|
Savings and Money Market Accounts
|
|
|
265,269
|
|
|
258,694
|
|
|
204,007
|
|
Certificates of Deposit less than $250 thousand
|
|
|
244,891
|
|
|
151,089
|
|
|
284,931
|
|
Certificates of Deposit of $250 thousand or more
|
|
|
20,738
|
|
|
119,514
|
|
|
29,765
|
|
Brokered Deposits
|
|
|
114,969
|
|
|
105,299
|
|
|
72,559
|
|
Total Deposits
|
|
|
923,552
|
|
|
905,613
|
|
|
841,832
|
|
Federal Funds Purchased and Securities Sold under Agreements to
Repurchase
|
|
|
13,292
|
|
|
12,750
|
|
|
12,661
|
|
Other Borrowings
|
|
|
24,500
|
|
|
56,000
|
|
|
37,585
|
|
Other Liabilities
|
|
|
7,208
|
|
|
5,901
|
|
|
3,773
|
|
Total Liabilities
|
|
|
968,552
|
|
|
980,264
|
|
|
895,851
|
|
SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
Common Stock – $.01 par value – 150,000,000 shares authorized;
66,805,259 shares issued as of March 31, 2015; 66,826,134 shares
issued as of December 31, 2014 and 66,635,101 shares issued as of
March 31, 2014
|
|
|
766
|
|
|
766
|
|
|
764
|
|
Paid-In Surplus
|
|
|
197,908
|
|
|
197,614
|
|
|
196,841
|
|
Accumulated Deficit
|
|
|
(101,085
|
)
|
|
(101,625
|
)
|
|
(104,087
|
)
|
Accumulated Other Comprehensive Loss
|
|
|
(6,863
|
)
|
|
(6,775
|
)
|
|
(8,864
|
)
|
Total Shareholders’ Equity
|
|
|
90,726
|
|
|
89,980
|
|
|
84,654
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
$
|
1,059,278
|
|
$
|
1,070,244
|
|
$
|
980,505
|
|
|
|
|
|
|
|
|
|
First Security Group, Inc. and Subsidiary
Consolidated Statements of Operations
(unaudited)
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
(in thousands, except per share data)
|
|
2015
|
|
2014
|
INTEREST INCOME
|
|
|
|
|
Loans, including fees
|
|
$
|
8,456
|
|
$
|
7,016
|
|
Investment Securities – taxable
|
|
|
841
|
|
|
1,060
|
|
Investment Securities – non-taxable
|
|
|
78
|
|
|
240
|
|
Other
|
|
|
18
|
|
|
13
|
|
Total Interest Income
|
|
|
9,393
|
|
|
8,329
|
|
INTEREST EXPENSE
|
|
|
|
|
Interest Bearing Demand Deposits
|
|
|
47
|
|
|
47
|
|
Savings Deposits and Money Market Accounts
|
|
|
203
|
|
|
130
|
|
Certificates of Deposit
|
|
|
474
|
|
|
613
|
|
Brokered Deposits
|
|
|
310
|
|
|
561
|
|
Other
|
|
|
27
|
|
|
53
|
|
Total Interest Expense
|
|
|
1,061
|
|
|
1,404
|
|
NET INTEREST INCOME
|
|
|
8,332
|
|
|
6,925
|
|
Provision (Credit) for Loan and Lease Losses
|
|
|
707
|
|
|
(972
|
)
|
NET INTEREST INCOME AFTER CREDIT FOR LOAN AND LEASE LOSSES
|
|
|
7,625
|
|
|
7,897
|
|
NONINTEREST INCOME
|
|
|
|
|
Service Charges on Deposit Accounts
|
|
|
674
|
|
|
741
|
|
Mortgage Banking Income
|
|
|
212
|
|
|
180
|
|
Gain on Sales of Securities Available-for-Sale
|
|
|
8
|
|
|
371
|
|
Gain on Sales of Loans
|
|
|
1,060
|
|
|
—
|
|
Other
|
|
|
2,527
|
|
|
1,343
|
|
Total Noninterest Income
|
|
|
4,481
|
|
|
2,635
|
|
NONINTEREST EXPENSES
|
|
|
|
|
Salaries and Employee Benefits
|
|
|
5,420
|
|
|
5,274
|
|
Expense on Premises and Fixed Assets, net of rental income
|
|
|
1,463
|
|
|
1,377
|
|
Other
|
|
|
4,538
|
|
|
3,794
|
|
Total Noninterest Expenses
|
|
|
11,421
|
|
|
10,445
|
|
INCOME (LOSS) BEFORE INCOME TAX PROVISION
|
|
|
685
|
|
|
87
|
|
Income Tax Provision
|
|
|
145
|
|
|
132
|
|
NET INCOME (LOSS)
|
|
|
540
|
|
|
(45
|
)
|
NET INCOME (LOSS) PER SHARE:
|
|
|
|
|
Net Income (Loss) Per Share – Basic
|
|
$
|
0.01
|
|
$
|
(0.00
|
)
|
Net Income (Loss) Per Share – Diluted
|
|
$
|
0.01
|
|
$
|
(0.00
|
)
|
Dividends Declared Per Common Share
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
Copyright Business Wire 2015