First Security (FSGI) 8-K First Security Group Announces Return to Profitability

First Security Group, Inc. and Subsidiary

Consolidated Balance Sheets

	June 30, 2014			December 31, 2013			June 30, 2013
(in thousands, except share data)	(unaudited)						(unaudited)
ASSETS
Cash & Due from Banks	$	8,880		$	10,742		$	11,757
Interest Bearing Deposits in Banks	16,498			10,126			101,495
Cash and Cash Equivalents	25,378			20,868			113,252
Securities Available-for-Sale	102,429			172,830			337,322
Securities Held-to-Maturity, at amortized cost (fair value - $132,695)	130,709			132,568			—
Loans Held for Sale	28,547			220			3,785
Loans	659,539			583,097			542,019
Less: Allowance for Loan and Lease Losses	9,400			10,500			12,300
Net Loans	650,139			572,597			529,719
Premises and Equipment, net	26,510			27,888			29,014
Bank Owned Life Insurance	28,835			28,346			27,961
Other Real Estate Owned	7,717			8,201			10,533
Other Assets	12,421			14,056			15,063
TOTAL ASSETS	$	1,012,685		$	977,574		$	1,066,649
LIABILITIES
Deposits
Noninterest-Bearing Demand	$	149,588		$	144,365		$	138,543
Interest-Bearing Demand	102,106			95,559			90,854
Savings and Money Market Accounts	233,502			206,125			206,539
Certificates of Deposit of less than $100 thousand	163,486			182,408			215,098
Certificates of Deposit of $100 thousand or more	131,991			153,750			196,896
Brokered Deposits	87,036			75,062			109,881
Total Deposits	867,709			857,269			957,811
Federal Funds Purchased and Securities Sold
under Agreements to Repurchase	15,911			12,520			14,067
Other Borrowings	38,075			20,000			—
Other Liabilities	4,424			4,137			8,117
Total Liabilities	926,119			893,926			979,995
STOCKHOLDERS' EQUITY
Common Stock - $.01 par value 150,000,000 shares authorized; 66,632,601 shares issued as of June 30, 2014; 66,602,601 shares issued as of December 31, 2013, 62,428,367 shares issued as of June 30, 2013	764			764			723
Paid-In Surplus	197,197			196,536			191,629
Common Stock Warrants	—			—			—
Accumulated Deficit	(103,474		)	(104,042		)	(101,965		)
Accumulated Other Comprehensive Income	(7,921		)	(9,610		)	(3,733		)
Total Stockholders' Equity	86,566			83,648			86,654
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,012,685		$	977,574		$	1,066,649

First Security Group, Inc. and Subsidiary

Consolidated Statements of Operations

(unaudited)

	Three Months Ended						Six Months Ended
	June 30						June 30
(in thousands, except per share data)	2014			2013			2014			2013
INTEREST INCOME
Loans, including fees	$	7,672		$	6,406		$	14,688		$	13,076
Investment Securities – taxable	936			1,009			1,996			1,821
Investment Securities – non-taxable	198			231			438			437
Other	37			139			50			260
Total Interest Income	8,843			7,785			17,172			15,594
INTEREST EXPENSE
Interest Bearing Demand Deposits	48			77			95			152
Savings Deposits and Money Market Accounts	144			218			274			440
Certificates of Deposit of less than $100 thousand	262			520			571			1,084
Certificates of Deposit of $100 thousand or more	243			527			547			1,083
Brokered Deposits	531			941			1,097			2,078
Other	70			16			118			31
Total Interest Expense	1,298			2,299			2,702			4,868
NET INTEREST INCOME	7,545			5,486			14,470			10,726
Credit for Loan and Lease Losses	(270		)	(826		)	(1,242		)	(148		)
NET INTEREST INCOME AFTER CREDIT FOR LOAN AND LEASE LOSSES	7,815			6,312			15,712			10,874
NONINTEREST INCOME
Service Charges on Deposit Accounts	769			763			1,510			1,500
Mortgage Banking Income	279			211			459			507
Gain on Sales of Securities Available-for-Sale	247			154			618			154
Gain on Sales of Loans	450			—			472			—
Other	1,285			1,062			2,606			2,043
Total Noninterest Income	3,030			2,190			5,665			4,204
NONINTEREST EXPENSES
Salaries and Employee Benefits	5,225			5,665			10,499			11,274
Expense on Premises and Fixed Assets, net of rental income	1,296			1,389			2,673			2,756
Other	3,580			5,524			7,374			12,384
Total Noninterest Expenses	10,101			12,578			20,546			26,414
INCOME (LOSS) BEFORE INCOME TAX PROVISION (BENEFIT)	744			(4,076		)	831			(11,336		)
Income Tax Provision (Benefit)	131			(83		)	263			36
NET INCOME (LOSS)	613			(3,993		)	568			(11,372		)
Preferred Stock Dividends	—			(517		)	—			(929		)
Accretion on Preferred Stock Discount	—			(341		)	—			(452		)
Effect of Exchange of Preferred Stock to Common Stock	—			26,179			—			26,179
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	613		$	21,328		$	568		$	13,426
NET INCOME PER SHARE:
Net Income Per Share – Basic	$	0.01		$	0.39		$	0.01		$	0.47
Net Income Per Share – Diluted	$	0.01		$	0.39		$	0.01		$	0.47
Dividends Declared Per Common Share	$	—		$	—		$	—		$	—