Exhibit 99.1
First Security’s 2008 Diluted EPS Increases 8 Percent
CHATTANOOGA, Tenn.--(BUSINESS WIRE)--First Security Group, Inc. (Nasdaq: FSGI), today announced first quarter 2008 net income of $2.2 million, compared to $2.4 million reported for first quarter 2007. Earnings per diluted share (EPS) was $0.14, compared with $0.13 reported for first quarter 2007.
- Loan Growth: In the first quarter of 2008, loan growth continued to be strong and diversified, increasing 2.5 percent (10.2 percent annualized). First Security has achieved loan growth for each consecutive quarter since its founding in 1999.
- Capital: Tangible book value of First Security’s common stock increased $0.31 per share, or 4.4 percent, for the three months ended March 31, 2008. Also, the tangible capital ratio at 9.9 percent remained firmly above the banking industry’s well capitalized level at quarter-end.
- Asset Quality: Non-performing assets plus 90-day delinquencies to total assets, at quarter-end, were 0.94 percent and the 90-day delinquencies declined on a quarter-over-quarter basis, as well as on a year-over-year basis. As of March 31, 2008, the allowance for loan and lease losses to total loans was 1.16 percent.
Rodger B. Holley, Chairman and CEO of First Security Group, Inc., said, “We continue to successfully balance growth and profitability, which has been our focus since our founding in 1999. I am extremely pleased with our consistent loan growth and attribute this growth to the ability of our experienced lending team to develop and expand relationships with consumers and businesses in middle and east Tennessee and north Georgia.”
Holley added, “Certainly, this is a challenging time for all of us in the banking industry given the current economic conditions and rate environment. At First Security, we are focused on the critical aspects of our business strategy: quality loan growth, a diversified revenue stream and sound asset quality. While today’s business climate will affect our margin and earnings on a short-term basis, we remain focused on our long-term goals of enhancing our franchise value and creating shareholder wealth.”
For the first quarter of 2008, net interest income declined by 2.9 percent, or $344 thousand, compared to the first quarter of 2007, due to a reduction in the net interest margin. The effect of the Federal Reserve’s interest rate cuts of 300 basis points since the first quarter of 2007, combined with the industry-wide challenge in generating core deposits has resulted in a reduction of the net interest margin from 4.86 percent for the first quarter of 2007 to 4.30 percent for the first quarter of 2008. As rates stabilize, First Security’s deposit pricing, which typically lags loan repricing, will begin to reflect the lower rate environment. First Security anticipates the net interest margin to stabilize in the latter half of 2008.
Non-interest income increased by $740 thousand, or 33.4 percent, on a year-over-year basis to $3.0 million with First Security continuing to realize the benefits of developing a diversified income stream. Growth in the wealth management business produced a $91 thousand, or 70.0 percent, increase in trust income. Deposit service fees increased $135 thousand, or 11.8 percent, to $1.3 million. The $65 thousand increase in mortgage loan fees was due to the election to use the fair value option under Statement of Financial Accounting Standards No. 159. In the first quarter of 2007, First Security incurred a one-time securities impairment charge of $584 thousand; subsequently, no securities impairments have been recognized. The quality of the investment portfolio remains high.
Consistent with First Security’s focus on controlling expenses, non-interest expense in the first quarter of 2008 declined by $134 thousand, or 1.3 percent, to $10.1 million from the same period of 2007. Expense savings were achieved through reducing professional fees by transitioning most internal audit functions in-house, as well as decreasing salaries and benefits through efficiency improvements. The number of full-time equivalent employees declined to 366 as of March 31, 2008, from 369 a year ago and 371 at year-end 2007.
First Security has employed a prudent approach to credit underwriting and monitoring and has increased efforts in this area due to slowing of the national economy. Net loan charge-offs as a percentage of average loans annualized was 0.34 percent for the three months ended March 31, 2008. Non-performing assets to total assets was 0.82 percent, and the allowance for loan losses to non-performing assets was 110.9 percent at first quarter end 2008.
Loan balances increased $113.5 million, or 13.1 percent, to $977.4 million at the end of the first quarter 2008 compared to the end of the first quarter of 2007. From year-end 2007 to March 31, 2008, loans grew $24.3 million, or 2.5 percent (10.2 percent annualized), led by increases in 1-4 family residential loans of $10.1 million, or 3.8 percent (15.4 percent annualized), and increases in commercial and industrial (C&I) loans of $9.5 million, or 6.8 percent (27.4 percent annualized). First Security’s loan portfolio is primarily in-market and is well diversified with 27.9 percent in 1-4 family residential, 22.8 percent in commercial real estate, 22.4 percent in construction and development and 15.1 percent in C&I.
At March 31, 2008, total deposits were $935.5 million, an increase of $9.2 million, or 1.0 percent, compared to the end of the first quarter 2007. Core deposits increased $7.7 million, or 1.2 percent (5.0 percent annualized), from December 31, 2007. The increase is attributable to FSGBank’s effective deposit-gathering activities at the branch and regional level, as well as the successful promotion of new products such as remote deposit capture (RDC) for business customers. In the first quarter, the Company’s RDC transaction volume increased by 57 percent over the linked fourth quarter.
First Security maintained capital levels exceeding those for well-capitalized banks and bank holding companies under applicable regulatory guidelines. The tangible equity to tangible assets ratio as of March 31, 2008 was 9.9 percent. Stockholders’ equity at March 31, 2008 was $150.3 million.
Mr. Holley concluded, “At First Security, we are focused on relationship-banking, and fortunately, we have not been distracted by the national liquidity and credit market issues that have weighed heavily on others in the industry. We have a great team in place, and I am confident about our prospects for the balance of the year.”
Web Cast and Conference Call Information
First Security's executive management team will host a conference call and simultaneous web cast on Tuesday, April 22, 2008 at 3:00 PM Eastern Daylight Time to discuss first quarter results. The web cast can be accessed live on First Security's website, www.FSGBank.com, on the Corporate Information/Investor Relations page. A replay will be available approximately two hours after the live conference call ends, and will be archived on First Security's website for one month.
About First Security Group, Inc.
First Security Group, Inc. is a bank holding company headquartered in Chattanooga, Tennessee with $1.2 billion in assets. Founded in 1999, First Security's community bank subsidiary, FSGBank, N.A. has 39 full-service banking offices along the interstate corridors of eastern and middle Tennessee and northern Georgia. In Dalton, Georgia, FSGBank operates under the name of Dalton Whitfield Bank; along the Interstate 40 corridor in Tennessee, FSGBank operates under the name of Jackson Bank & Trust. FSGBank provides retail and commercial banking services, trust and investment management, mortgage banking, financial planning, Internet banking (www.FSGBank.com) and equipment leasing through its wholly-owned subsidiaries, Kenesaw Leasing and J & S Leasing.
Non-GAAP Financial Measures
This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States of America (GAAP). First Security's management uses these "non-GAAP" measures in their analysis of First Security's performance. Non-GAAP measures typically adjust GAAP performance measures to exclude the effects of charges, expenses and gains related to the consummation of mergers and acquisitions, and costs related to the integration of merged entities. These non-GAAP measures may also exclude other significant gains, losses or expenses that are unusual in nature and not expected to recur. Since these items and their impact on First Security's performance are difficult to predict, management believes presentations of financial measures excluding the impact of these items provide useful supplemental information that is important for a proper understanding of the operating results of First Security's core business. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
Forward-Looking Statements
This news release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Actual results may differ materially from the results expressed in forward-looking statements. Factors that might cause such a difference include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulation; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; changes in the national and local economy; and other factors, including risk factors, referred to from time to time in filings made by First Security with the Securities and Exchange Commission. First Security undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.
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| First Security Group, Inc. and Subsidiary |
| Consolidated Statements of Income |
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| | Three Months Ended |
| | March 31, |
| (in thousands except per share amounts) | | 2008 | | 2007 |
| | (unaudited) | | (unaudited) |
| INTEREST INCOME | | | | |
| Loans, including fees | | $ | 18,603 | | $ | 18,372 | |
| Debt Securities - taxable | | | 1,135 | | | 1,292 | |
| Debt Securities - non-taxable | | | 398 | | | 410 | |
| Other | | | 11 | | | 24 | |
| Total Interest Income | | | 20,147 | | | 20,098 | |
| | | | |
| INTEREST EXPENSE | | | | |
| Interest Bearing Demand Deposits | | | 99 | | | 125 | |
| Savings Deposits and Money Market Accounts | | | 638 | | | 771 | |
| Certificates of Deposit of $100 thousand or more | | | 2,714 | | | 2,629 | |
| Certificates of Deposit of less than $100 thousand | | | 3,037 | | | 3,152 | |
| Brokered Certificates of Deposit | | | 736 | | | 982 | |
| Other | | | 1,408 | | | 580 | |
| Total Interest Expense | | | 8,632 | | | 8,239 | |
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| NET INTEREST INCOME | | | 11,515 | | | 11,859 | |
| Provision for Loan and Lease Losses | | | 1,178 | | | 417 | |
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES | | | 10,337 | | | 11,442 | |
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| NONINTEREST INCOME | | | | |
| Service Charges on Deposit Accounts | | | 1,275 | | | 1,140 | |
| Other than Temporary Impairment of Available-for-Sale Securities | | | - | | | (584 | ) |
| Other | | | 1,679 | | | 1,658 | |
| Total Noninterest Income | | | 2,954 | | | 2,214 | |
| | | | |
| NONINTEREST EXPENSE | | | | |
| Salaries and Employee Benefits | | | 5,757 | | | 5,822 | |
| Expense on Premises and Fixed Assets, net of rental income | | | 1,684 | | | 1,627 | |
| Other | | | 2,623 | | | 2,749 | |
| Total Noninterest Expense | | | 10,064 | | | 10,198 | |
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| INCOME BEFORE INCOME TAX PROVISION | | | 3,227 | | | 3,458 | |
| Income Tax Provision | | | 984 | | | 1,104 | |
| NET INCOME | | | 2,243 | | | 2,354 | |
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| NET INCOME PER SHARE: | | | | |
| Net Income Per Share - basic | | $ | 0.14 | | $ | 0.14 | |
| Net Income Per Share - diluted | | $ | 0.14 | | $ | 0.13 | |
| Dividends Declared Per Common Share | | $ | 0.05 | | $ | 0.05 | |
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| First Security Group, Inc. and Subsidiary |
| Consolidated Balance Sheets |
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| | March 31, | | December 31, | | March 31, |
| (in thousands, except share data) | | 2008 | | 2007 | | 2007 |
| | (unaudited) | | | | (unaudited) |
| | | | | | |
| ASSETS | | | | | | |
| Cash & Due from Banks | | $ | 34,518 | | | $ | 27,394 | | | $ | 31,472 | |
Federal Funds Sold and Securities Purchased under Agreements to Resell | | | - | | | | - | | | | - | |
| Cash and Cash Equivalents | | | 34,518 | | | | 27,394 | | | | 31,472 | |
| Interest-Bearing Deposits in Bank | | | 1,461 | | | | 296 | | | | 189 | |
| Securities Available-for-Sale | | | 131,352 | | | | 131,849 | | | | 153,649 | |
| Loans Held for Sale | | | 6,385 | | | | 4,396 | | | | 5,251 | |
| Loans | | | 971,011 | | | | 948,709 | | | | 858,689 | |
| Total Loans | | | 977,396 | | | | 953,105 | | | | 863,940 | |
| Less: Allowance for Loan and Lease Losses | | | 11,313 | | | | 10,956 | | | | 10,154 | |
| | | 966,083 | | | | 942,149 | | | | 853,786 | |
| Premises and Equipment, net | | | 34,273 | | | | 34,751 | | | | 35,830 | |
| Goodwill | | | 27,156 | | | | 27,156 | | | | 27,156 | |
| Intangible Assets | | | 2,975 | | | | 3,200 | | | | 3,921 | |
| Other Assets | | | 49,851 | | | | 45,160 | | | | 41,774 | |
| TOTAL ASSETS | | $ | 1,247,669 | | | $ | 1,211,955 | | | $ | 1,147,777 | |
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| LIABILITIES | | | | | | |
| Deposits | | | | | | |
| Noninterest-Bearing Demand | | $ | 162,996 | | | $ | 159,790 | | | $ | 166,492 | |
| Interest-Bearing Demand | | | 68,963 | | | | 62,637 | | | | 68,649 | |
| | | 231,959 | | | | 222,427 | | | | 235,141 | |
| Savings and Money Market Accounts | | | 135,288 | | | | 131,352 | | | | 135,897 | |
| Time Deposits: | | | | | | |
| Certificates of Deposit of $100 thousand or more | | | 219,611 | | | | 225,491 | | | | 212,536 | |
| Certificates of Deposit of less than $100 thousand | | | 253,812 | | | | 259,628 | | | | 263,514 | |
| Brokered Certificates of Deposit | | | 94,848 | | | | 63,731 | | | | 79,225 | |
| | | 568,271 | | | | 548,850 | | | | 555,275 | |
| Total Deposits | | | 935,518 | | | | 902,629 | | | | 926,313 | |
Federal Funds Purchased and Securities Sold under Agreements to Repurchase | | | 51,382 | | | | 62,286 | | | | 26,991 | |
| Security Deposits | | | 2,478 | | | | 2,799 | | | | 3,704 | |
| Other Borrowings | | | 92,788 | | | | 80,459 | | | | 31,928 | |
| Other Liabilities | | | 15,214 | | | | 16,089 | | | | 12,442 | |
| Total Liabilities | | | 1,097,380 | | | | 1,064,262 | | | | 1,001,378 | |
| STOCKHOLDERS' EQUITY | | | | | | |
Common stock - $0.01 par value 50,000,000 shares authorized; 16,454,823 issued as of March 31, 2008; 16,774,728 issued as of December 31, 2007; 17,678,082 issued as of March 31, 2007 | | | 114 | | | | 116 | | | | 123 | |
| Paid-In Surplus | | | 112,264 | | | | 114,631 | | | | 123,448 | |
| Unallocated ESOP Shares | | | (4,040 | ) | | | (4,310 | ) | | | (4,876 | ) |
| Retained Earnings | | | 35,702 | | | | 34,279 | | | | 27,827 | |
| Accumulated Other Comprehensive Gain / (Loss) | | | 6,249 | | | | 2,977 | | | | (123 | ) |
| Total Stockholders' Equity | | | 150,289 | | | | 147,693 | | | | 146,399 | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 1,247,669 | | | $ | 1,211,955 | | | $ | 1,147,777 | |
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| First Security Group, Inc and Subsidiary | |
| Consolidated Financial Highlights | |
| (unaudited) | |
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| | (in thousands, except per share amounts and full-time equivalent employees) | |
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| | 1st Quarter | | 4th Quarter | | 3rd Quarter | | 2nd Quarter | | 1st Quarter | | YTD | | YTD | |
| | 2008 | | 2007 | | 2007 | | 2007 | | 2007 | | March 31, 2008 | | March 31, 2007 | |
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| Earnings: | | | | | | | | | | | | | | | |
| Net interest income | | $ | 11,515 | | | $ | 12,301 | | | $ | 12,526 | | | $ | 12,236 | | | $ | 11,859 | | | $ | 11,515 | | | $ | 11,859 | | |
| Provision for loan and lease losses | | $ | 1,178 | | | $ | 746 | | | $ | 576 | | | $ | 416 | | | $ | 417 | | | $ | 1,178 | | | $ | 417 | | |
| Non-interest income | | $ | 2,954 | | | $ | 3,338 | | | $ | 3,094 | | | $ | 2,654 | | | $ | 2,214 | | | $ | 2,954 | | | $ | 2,214 | | |
| Non-interest expense | | $ | 10,064 | | | $ | 10,474 | | | $ | 10,556 | | | $ | 10,213 | | | $ | 10,198 | | | $ | 10,064 | | | $ | 10,198 | | |
| Net income | | $ | 2,243 | | | $ | 3,092 | | | $ | 3,022 | | | $ | 2,888 | | | $ | 2,354 | | | $ | 2,243 | | | $ | 2,354 | | |
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| Per Share Data: | | | | | | | | | | | | | | | |
| Net income, basic | | $ | 0.14 | | | $ | 0.19 | | | $ | 0.18 | | | $ | 0.17 | | | $ | 0.14 | | | $ | 0.14 | | | $ | 0.14 | | |
| Net income, diluted | | $ | 0.14 | | | $ | 0.18 | | | $ | 0.18 | | | $ | 0.17 | | | $ | 0.13 | | | $ | 0.14 | | | $ | 0.13 | | |
| Cash dividends declared | | $ | 0.05 | | | $ | 0.05 | | | $ | 0.05 | | | $ | 0.05 | | | $ | 0.05 | | | $ | 0.05 | | | $ | 0.05 | | |
| Book value | | $ | 9.13 | | | $ | 8.80 | | | $ | 8.59 | | | $ | 8.28 | | | $ | 8.28 | | | $ | 9.13 | | | $ | 8.28 | | |
| Tangible book value | | $ | 7.30 | | | $ | 6.99 | | | $ | 6.82 | | | $ | 6.52 | | | $ | 6.52 | | | $ | 7.30 | | | $ | 6.52 | | |
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| Performance Ratios: | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.73 | % | | | 1.03 | % | | | 1.03 | % | | | 1.01 | % | | | 0.83 | % | | | 0.73 | % | | | 0.83 | % | |
| Return on average equity | | | 6.02 | % | | | 8.37 | % | | | 8.27 | % | | | 7.89 | % | | | 6.46 | % | | | 6.02 | % | | | 6.46 | % | |
| Return on average tangible assets | | | 0.75 | % | | | 1.05 | % | | | 1.05 | % | | | 1.04 | % | | | 0.85 | % | | | 0.75 | % | | | 0.85 | % | |
| Return on average tangible equity | | | 7.55 | % | | | 10.54 | % | | | 10.48 | % | | | 10.01 | % | | | 8.22 | % | | | 7.55 | % | | | 8.22 | % | |
| Net interest margin, taxable equivalent | | | 4.30 | % | | | 4.61 | % | | | 4.80 | % | | | 4.91 | % | | | 4.86 | % | | | 4.30 | % | | | 4.86 | % | |
| Efficiency ratio | | | 69.56 | % | | | 66.97 | % | | | 67.58 | % | | | 68.59 | % | | | 72.47 | % | | | 69.56 | % | | | 72.47 | % | |
Core efficiency ratio(1) | | | 67.20 | % | | | 60.55 | % | | | 64.68 | % | | | 64.95 | % | | | 66.12 | % | | | 67.20 | % | | | 66.12 | % | |
| Non-interest income to net interest income and non-interest income | | | 20.42 | % | | | 21.34 | % | | | 19.81 | % | | | 17.82 | % | | | 15.73 | % | | | 20.42 | % | | | 15.73 | % | |
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| Capital & Liquidity: | | | | | | | | | | | | | | | |
| Total equity to total assets | | | 12.05 | % | | | 12.19 | % | | | 12.38 | % | | | 12.51 | % | | | 12.76 | % | | | 12.05 | % | | | 12.76 | % | |
| Tangible equity to tangible assets | | | 9.87 | % | | | 9.93 | % | | | 10.08 | % | | | 10.12 | % | | | 10.33 | % | | | 9.87 | % | | | 10.33 | % | |
| Total loans to total deposits | | | 104.48 | % | | | 105.59 | % | | | 99.90 | % | | | 98.22 | % | | | 93.27 | % | | | 104.48 | % | | | 93.27 | % | |
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| Asset Quality: | | | | | | | | | | | | | | | |
| Net charge-offs | | $ | 815 | | | $ | 419 | | | $ | 298 | | | $ | 201 | | | $ | 211 | | | $ | 815 | | | $ | 211 | | |
| Net loans charged-off to average loans, annualized | | | 0.34 | % | | | 0.18 | % | | | 0.13 | % | | | 0.09 | % | | | 0.10 | % | | | 0.34 | % | | | 0.10 | % | |
| Non-accrual loans | | $ | 5,047 | | | $ | 3,372 | | | $ | 1,687 | | | $ | 938 | | | $ | 1,755 | | | $ | 5,047 | | | $ | 1,755 | | |
| Other real estate owned | | $ | 3,510 | | | $ | 2,452 | | | $ | 2,646 | | | $ | 2,014 | | | $ | 2,796 | | | $ | 3,510 | | | $ | 2,796 | | |
| Repossessed assets | | $ | 1,641 | | | $ | 1,834 | | | $ | 2,489 | | | $ | 1,707 | | | $ | 1,734 | | | $ | 1,641 | | | $ | 1,734 | | |
| Non-performing assets (NPA) | | $ | 10,198 | | | $ | 7,658 | | | $ | 6,822 | | | $ | 4,659 | | | $ | 6,285 | | | $ | 10,198 | | | $ | 6,285 | | |
| NPA to total assets | | | 0.82 | % | | | 0.63 | % | | | 0.57 | % | | | 0.40 | % | | | 0.55 | % | | | 0.82 | % | | | 0.55 | % | |
| Loans 90 days past due | | $ | 1,473 | | | $ | 2,289 | | | $ | 585 | | | $ | 1,639 | | | $ | 1,640 | | | $ | 1,473 | | | $ | 1,640 | | |
| NPA + loans 90 days past due to total assets | | | 0.94 | % | | | 0.82 | % | | | 0.62 | % | | | 0.54 | % | | | 0.69 | % | | | 0.94 | % | | | 0.69 | % | |
| Allowance for loan and lease losses to total loans | | | 1.16 | % | | | 1.15 | % | | | 1.13 | % | | | 1.14 | % | | | 1.18 | % | | | 1.16 | % | | | 1.18 | % | |
| Allowance for loan and lease losses to NPA | | | 110.93 | % | | | 143.07 | % | | | 155.89 | % | | | 222.43 | % | | | 161.56 | % | | | 110.93 | % | | | 161.56 | % | |
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| Period End Balances: | | | | | | | | | | | | | | | |
| Loans | | $ | 977,396 | | | $ | 953,105 | | | $ | 940,025 | | | $ | 909,177 | | | $ | 863,940 | | | $ | 977,396 | | | $ | 863,940 | | |
| Intangible assets | | $ | 30,131 | | | $ | 30,356 | | | $ | 30,579 | | | $ | 30,822 | | | $ | 31,077 | | | $ | 30,131 | | | $ | 31,077 | | |
| Assets | | $ | 1,247,669 | | | $ | 1,211,955 | | | $ | 1,198,465 | | | $ | 1,157,919 | | | $ | 1,147,777 | | | $ | 1,247,669 | | | $ | 1,147,777 | | |
| Deposits | | $ | 935,518 | | | $ | 902,629 | | | $ | 940,988 | | | $ | 925,628 | | | $ | 926,313 | | | $ | 935,518 | | | $ | 926,313 | | |
| Stockholders' equity | | $ | 150,289 | | | $ | 147,693 | | | $ | 148,318 | | | $ | 144,894 | | | $ | 146,399 | | | $ | 150,289 | | | $ | 146,399 | | |
| Common stock market capitalization | | $ | 149,411 | | | $ | 150,640 | | | $ | 172,750 | | | $ | 188,978 | | | $ | 201,176 | | | $ | 149,411 | | | $ | 201,176 | | |
| Full-time equivalent employees | | | 366 | | | | 371 | | | | 373 | | | | 375 | | | | 369 | | | | 366 | | | | 369 | | |
| Shares outstanding | | | 16,455 | | | | 16,775 | | | | 17,275 | | | | 17,498 | | | | 17,678 | | | | 16,455 | | | | 17,678 | | |
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| Average Balances: | | | | | | | | | | | | | | | |
| Loans | | $ | 966,004 | | | $ | 950,640 | | | $ | 926,216 | | | $ | 884,383 | | | $ | 855,569 | | | $ | 966,004 | | | $ | 855,569 | | |
| Intangible assets | | $ | 30,256 | | | $ | 30,475 | | | $ | 30,708 | | | $ | 30,958 | | | $ | 31,220 | | | $ | 30,256 | | | $ | 31,220 | | |
| Earning assets | | $ | 1,099,190 | | | $ | 1,080,278 | | | $ | 1,053,908 | | | $ | 1,018,666 | | | $ | 1,010,315 | | | $ | 1,099,190 | | | $ | 1,010,315 | | |
| Assets | | $ | 1,224,678 | | | $ | 1,204,038 | | | $ | 1,178,298 | | | $ | 1,141,946 | | | $ | 1,137,915 | | | $ | 1,224,678 | | | $ | 1,137,915 | | |
| Deposits | | $ | 893,838 | | | $ | 926,149 | | | $ | 934,034 | | | $ | 917,215 | | | $ | 920,718 | | | $ | 893,838 | | | $ | 920,718 | | |
| Stockholders' equity | | $ | 149,015 | | | $ | 147,832 | | | $ | 146,101 | | | $ | 146,412 | | | $ | 145,778 | | | $ | 149,015 | | | $ | 145,778 | | |
| Shares outstanding, basic - wtd | | | 16,144 | | | | 16,585 | | | | 16,901 | | | | 17,117 | | | | 17,241 | | | | 16,144 | | | | 17,241 | | |
| Shares outstanding, diluted - wtd | | | 16,334 | | | | 16,849 | | | | 17,223 | | | | 17,482 | | | | 17,641 | | | | 16,334 | | | | 17,641 | | |
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(1) In accordance with SNL Financial practice, the core efficiency ratio is calculated on a fully tax equivalent basis excluding certain non-cash items, such as amortization of intangibles, gains or losses on investment securities and gains, losses and write-downs on foreclosed and repossessed properties. | |
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| Non-GAAP Reconciliation Table | |
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| | (in thousands, except per share data) | |
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| | 1st Quarter | | 4th Quarter | | 3rd Quarter | | 2nd Quarter | | 1st Quarter | | Year-to-Date | | Year-to-Date | |
| | 2008 | | 2007 | | 2007 | | 2007 | | 2007 | | March 31, 2008 | | March 31, 2007 | |
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| Return on average assets | | | 0.73 | % | | | 1.03 | % | | | 1.03 | % | | | 1.01 | % | | | 0.83 | % | | | 0.73 | % | | | 0.83 | % | |
| Effect of intangible assets | | | 0.02 | % | | | 0.02 | % | | | 0.02 | % | | | 0.03 | % | | | 0.02 | % | | | 0.02 | % | | | 0.02 | % | |
| Return on average tangible assets | | | 0.75 | % | | | 1.05 | % | | | 1.05 | % | | | 1.04 | % | | | 0.85 | % | | | 0.75 | % | | | 0.85 | % | |
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Return on average equity | | | 6.02 | % | | | 8.37 | % | | | 8.27 | % | | | 7.89 | % | | | 6.46 | % | | | 6.02 | % | | | 6.46 | % | |
| Effect of intangible assets | | | 1.53 | % | | | 2.17 | % | | | 2.21 | % | | | 2.12 | % | | | 1.76 | % | | | 1.53 | % | | | 1.76 | % | |
| Return on average tangible equity | | | 7.55 | % | | | 10.54 | % | | | 10.48 | % | | | 10.01 | % | | | 8.22 | % | | | 7.55 | % | | | 8.22 | % | |
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| Total equity to total assets | | | 12.05 | % | | | 12.19 | % | | | 12.38 | % | | | 12.51 | % | | | 12.76 | % | | | 12.05 | % | | | 12.76 | % | |
| Effect of intangible assets | | | -2.18 | % | | | -2.26 | % | | | -2.30 | % | | | -2.39 | % | | | -2.43 | % | | | -2.18 | % | | | -2.43 | % | |
| Tangible equity to tangible assets | | | 9.87 | % | | | 9.93 | % | | | 10.08 | % | | | 10.12 | % | | | 10.33 | % | | | 9.87 | % | | | 10.33 | % | |
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| Efficiency ratio | | | 69.56 | % | | | 66.97 | % | | | 67.58 | % | | | 68.59 | % | | | 72.47 | % | | | 69.56 | % | | | 72.47 | % | |
| Effect of non-cash items | | | -1.27 | % | | | -5.46 | % | | | -1.91 | % | | | -2.61 | % | | | -5.24 | % | | | -1.27 | % | | | -5.24 | % | |
| Effect of net interest income, tax equivalent adjustment | | | -1.09 | % | | | -0.96 | % | | | -0.99 | % | | | -1.03 | % | | | -1.11 | % | | | -1.09 | % | | | -1.11 | % | |
| Core efficiency ratio | | | 67.20 | % | | | 60.55 | % | | | 64.68 | % | | | 64.95 | % | | | 66.12 | % | | | 67.20 | % | | | 66.12 | % | |
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| Per Share Data | | | | | | | | | | | | | | | |
| Book value | | $ | 9.13 | | | $ | 8.80 | | | $ | 8.59 | | | $ | 8.28 | | | $ | 8.28 | | | $ | 9.13 | | | $ | 8.28 | | |
| Effect of intangible assets | | | (1.83 | ) | | | (1.81 | ) | | | (1.77 | ) | | | (1.76 | ) | | | (1.76 | ) | | | (1.83 | ) | | | (1.76 | ) | |
| Tangible book value | | $ | 7.30 | | | $ | 6.99 | | | $ | 6.82 | | | $ | 6.52 | | | $ | 6.52 | | | $ | 7.30 | | | $ | 6.52 | | |
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| Supplemental Data | | (in thousands) | |
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| Allowance for loan and lease losses | | $ | 11,313 | | | $ | 10,956 | | | $ | 10,635 | | | $ | 10,363 | | | $ | 10,154 | | | $ | 11,313 | | | $ | 10,154 | | |
| Net interest income, tax equivalent | | $ | 11,749 | | | $ | 12,541 | | | $ | 12,761 | | | $ | 12,474 | | | $ | 12,102 | | | $ | 11,749 | | | $ | 12,102 | | |
| Amortization of intangibles | | $ | 225 | | | $ | 223 | | | $ | 243 | | | $ | 254 | | | $ | 265 | | | $ | 225 | | | $ | 265 | | |
Loss on sales of available-for-sale securities, net | | $ | - | | | $ | - | | | $ | - | | | $ | 168 | | | $ | - | | | $ | - | | | $ | - | | |
| Other-than-temporary impairment of securities | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 584 | | | $ | - | | | $ | 584 | | |
| Gain on sales of foreclosed and repossessed property, leased equipment, premises and equipment and loans | | $ | (97 | ) | | $ | (508 | ) | | $ | (210 | ) | | $ | (68 | ) | | $ | (188 | ) | | $ | (97 | ) | | $ | (188 | ) | |
| Losses on sales of foreclosed and repossessed property and premises and equipment | | $ | 14 | | | $ | 370 | | | $ | 156 | | | $ | 8 | | | $ | 7 | | | $ | 14 | | | $ | 7 | | |
| Write-downs on foreclosed and repossessed property | | $ | 10 | | | $ | 574 | | | $ | 38 | | | $ | 60 | | | $ | 199 | | | $ | 10 | | | $ | 199 | | |
| Mortgage loan and related fees | | $ | 523 | | | $ | 352 | | | $ | 396 | | | $ | 388 | | | $ | 458 | | | $ | 523 | | | $ | 458 | | |
CONTACT:
First Security Group, Inc.
Rodger B. Holley, 423-308-2080
Chairman & CEO
rholley@FSGBank.com
or
William L. (Chip) Lusk, Jr., 423-308-2070
EVP & CFO
clusk@FSGBank.com
