First Security Group lost another $9.4 million, or $5.79 per share, in the third quarter, leaving Chattanooga's biggest independent bank without enough equity to be "adequately capitalized" under regulatory standards.
But FSG said Thursday the loss reflects the bank's cleansing of its underperforming loan portfolio, and FSG continues to pursue a plan to recapitalize the bank.
"During the third quarter, we aggressively disposed of nearly 25 percent of our nonperforming assets, which was a significant driver of the loss in the third quarter," FSG CEO Michael Kramer said.
The bank lost $23.5 million, or $14.54 per share, in the first nine months of the year. But Kramer said FSG has revamped its management, disposed of nonperforming loans and added talent to help ensure the bank is positioned and attractive for outside investors to pump capital into the bank.
"We continue to make solid progress, " Kramer said in a regulatory filing Thursday.
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