published Wednesday, February 26th, 2014

Chattanooga bank FSG rebounds with $11.4 million in profits last year

Michael Kramer
Michael Kramer
Photo by Jake Daniels /Chattanooga Times Free Press.


FSG reported its first net income in five years last year:

2009 — $35.4 million loss

2010 — $46.4 million loss

2011 — $25.1 million loss

2012 — $16.1 million loss

2013 — $11.4 million profit

Source: First Security Group

Chattanooga's biggest independent bank returned to profitability last year after outside investors pumped $91.1 million of new capital into the struggling bank.

First Security Group Inc. earned $11.4 million in 2013, the first profitable year for the bank in five years. FSG CEO Michael Kramer said Tuesday the bank is cutting expenses and increasing loan volume and should be more profitable from operations in 2014.

In the fourth quarter, FSG reported a net loss of $646,000, or only a fraction of the $16.1 million loss in the same period a year ago.

"Last fall, we stated that it was essential to achieve significant improvement in loan and revenue growth," Kramer said in the bank's quarterly earnings report. "With nearly $50 million of loan growth and over $1 million of improvement in noninterest expense in the fourth quarter, the momentum toward a return to operating profitability is real and within reach."

During the fourth quarter of 2013, FSG loans increased $48.5 million, or 9.1 percent, and net interest income improved by $313,000, or 5.1 percent.

Total interest income declined by $22,000 primarily because of lower interest income on investment securities as FSG sold $22.8 million of investment securities to support higher yielding loan growth.

"While we will remain focused on improving our operational efficiencies in 2014, we will also continue to actively restructure our earning asset mix by growing loans and reducing the excess liquidity in our investment portfolio to improve our overall yield and margin," said John Haddock, First Security's chief financial officer.

Following the release of FSG's results Tuesday, the company's stock jumped by 10 cents a share, or 5.1 percent, to close Tuesday at $2.06 per share in trading on the Nasdaq Exchange.

Founded in 1999, First Security Group has 28 full-served banking offices in Tennessee and Georgia. The Chattanooga-based bank holding company has assets of about $1 billion.

Contact Dave Flessner at or at 757-6340.

about Dave Flessner...

Dave Flessner is the business editor for the Times Free Press. A journalist for 35 years, Dave has been business editor and projects editor for the Chattanooga Times Free Press, city editor for The Chattanooga Times, business and county reporter for the Chattanooga Times, correspondent for the Lansing State Journal and Ingham County News in Michigan, staff writer for the Hastings Daily Tribune in Nebraska, and news director for WCBN-FM in Michigan. Dave, a native ...

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