U.S. Treasury appoints board member to Chattanooga-based First Security Group

U.S. Treasury appoints board member to Chattanooga-based First Security Group

February 10th, 2012 by Ellis Smith in Business Around the Region

FSG BOARD MEMBERS


Michael Kramer, CEO and president

Denise Cobb, executive vice president and chief admini-strative officer

John Haddock, secretary, executive vice president and chief financial officer

Chris Tietz, executive vice president and chief credit officer

Joe Dell, executive vice president and chief lending officer

Martin Schrodt, executive vice president and retail banking officer

Bart Rolen, executive vice president and director of wealth management and trust

Source: First Security Group

The U.S. Treasury has appointed an Ohio banking expert to the board of Chattanooga-based First Security Group, the holding company for FSGBank.

Robert R. Lane will also serve on the board of FSGBank, according to a filing with the Securities and Exchange Commission. The federal government has the authority to name one more board member.

The U.S. Treasury's power over the board stems from FSGBank's participation in TARP, or the Troubled Asset Relief Program. The bank took $33 million in TARP aid after losing $34.9 million in 2009.

As part of TARP, the federal government bailed out the bank in exchange for so-called "Series A preferred stock" under an agreement that required the bank to pay dividends each quarter, according to the filing.

But should FSGBank fail to pay dividends for six quarters, the "Treasury will retain the right to appoint such directors at subsequent annual meetings of shareholders until all accrued and unpaid dividends ... have been paid," according to the SEC filing.

FSGBank's announcement Thursday came as the company put the finishing touches on a management shake-up, which included the bank's appointment of three new executive vice presidents.

New executives are Chris Tietz as chief credit officer, Martin Schrodt as retail banking officer, and Bart Rolen as director of wealth management and trust, according to a news release.

The bank's CEO, Michael Kramer, is also new. He was appointed in December 2011.

"We now have the full team that can execute our strategy to transform FSGBank into the bank of choice in middle and east Tennessee as well as north Georgia," Kramer said. "With these additions to our existing team, we can turn our full attention to the opportunity of creating a successful, profitable community bank."

The bank's old management structure has been virtually wiped away after former CEO Rodger Holley stepped down in April 2011 after 11 years as CEO, and was succeeded by then-chief operating officer, Ralph Coffman, who has also since stepped down.

The company filed a report that noted it lacked an "effective control environment" under Holley, during which time the bank hired his wife for decorating services.

Lane, the bank's new director, is faculty adviser at the Fisher College of Business at Ohio State University, and also is CEO of the Lane Leadership Group, which is described in the filing as "a consulting company specializing in executive coaching and professional development."