The silver lining has brightened for FSGBank despite the loss of another $25.1 million, or $15.79 per share, in 2011.
In its annual report released Friday night, First Security Group said it narrowed its annual losses from $46.4 million in 2010 to $25.1 million last year. The bank's loan and lease losses also shrunk from $33.6 million in 2010 to $10.9 million last year as it continued to improve its portfolio.
FSG, Chattanooga's biggest independent bank, shrunk its loan portfolio from $727.1 million in 2010 to $584.5 million last year. While deposits remained constant at $1 billion, total consolidated assets fell by $100 million to $1.1 billion.
Part of the drop in net income was derived from a drop in net interest income, which fell by $6.9 million during the year due to a a smaller loan portfolio.
Looking forward, the company anticipates that it will be able to reduce the cash it is required to keep on hand and begin making additional loans in 2012, which could improve its shrinking margins.
That plan depends on raising deposits and increasing loans, FSGBank said in a news release.
As part of its turnaround, FSGBank conducted an extensive management sweep of former executives and brought in an all-new team, including Michael Kramer as president and CEO and John Haddock as chief financial officer. The company also hired Bart Rolen as executive vice president of wealth management, Chris Tietz as chief credit officer and Martin Schrodt as retail banking officer.
The bank also shook up its board, which was augmented by the appointment of two board members by the U.S. Treasury. FSGBank now says it has completed the shake-up of the former management group, led by ex-CEO Roger Holley, and has a new plan for profitability.
The most recent board appointee, William Grant, was appointed by the Treasury after FSGBank didn't pay back the government for aid received under the Troubled Asset Relief Program, or TARP.
Grant formerly served in the Treasury's Office of teh Comptroller of the Currency for 27 years, and currently serves as a founding director bank for Square 1 Bank in Durham, N.C.