Michael Kramer is the president of FSG Bank.First Security Group, which owns FSGBank, has secured $90 million in recapitalization as part of a deal to convert the U.S. Treasury’s stake in the business into common stock, as well as sell the majority of the bank’s remaining bad loans.
While FSGBank will remain under a consent order, the deal effectively creates a new bank with a clean balance sheet, company officials say.
“Today marks an important milestone for First Security Group and FSGBank and reflects the culmination of our efforts over the last 15 months,” said Michael Kramer, president and CEO of First Security. “We have rebuilt our executive management team with talented and experienced bankers, solidified our board with four new directors, three of which are former bank CEOs, and initiated the executition of our strategic plan.”
As part of the deal, four lead investors will invest about $36 million in exchange for roughly 40 percent of the company, at a price of $1.50 per share.
“The commitment to our recapitaliztion will enable us to strengthen our balance sheet and provide growth capital to complete the transformation of FSGBank into a banking franchise that our clients, communities and shareholders can be proud of,” Kramer said.