Following a year of record profits, First Security Group Inc. on Tuesday reported first-quarter earnings were down slightly from the same period last year.
The Chattanooga-based parent of FSGBank reported a net income of $2.2 million, or 14 cents a share, for the first quarter of 2008, compared with $2.4 million, or 13 cents a share, for the same period last year.
First Security’s stock closed Tuesday at $9.05 a share, down 4 cents.
Bank officials cited the Federal Reserve System’s interest rate cuts in the past year as contributing to the decline. As a result of lower rates, the company reported net interest income of $11.5 million for the three-month period, down $344,000 from the first quarter of 2007.
“Certainly this is a challenging time for all of us in the banking industry given the current economic conditions and rate environment,” said Rodger B. Holley, chairman and chief executive of First Security Group.
First Security’s loan balances increased 13 percent to $977.4 million at the end of the first quarter compared with $864 million for the same period last year.
Mr. Holley said he is pleased with the company’s loan growth, which he credits to an experienced lending team in Chattanooga and Knoxville.
David Scharf, an analyst with FTN Midwest Securities in Nashville, said the company’s performance is typical of financial institutions these days.
“They are probably faring better than a lot of others, certainly better than a lot of their southeastern peers and banks in the metro Atlanta market,” he said. “Being focused in Chattanooga, Dalton and Knoxville has afforded them a pretty steady growth opportunity.”
FSGBank’s total deposits increased $9.2 million in the quarter to $935.5 million.