Exhibit 99.1
First Security Group Announces Earnings
Solid Loan Growth Produced in Second Quarter 2008
CHATTANOOGA, Tenn.--(BUSINESS WIRE)--First Security Group, Inc. (Nasdaq: FSGI), today announced second quarter 2008 net income of $1.6 million, compared to $2.9 million reported for the second quarter of 2007. Earnings per diluted share was $0.10, compared with $0.17 reported for second quarter 2007.
Year to date, earnings per diluted share was $0.24, compared with $0.30 for the six months ended June 30, 2007. The year-to-date increase of $2.3 million in First Security’s provision for loan and lease losses reduced earnings per share by $0.09.
- Loan Growth: Increases in commercial and industrial (C&I) loans further improved the diversification of First Security’s loan portfolio, which reached the $1 billion mark at the end of the second quarter of 2008.
- Capital: First Security’s tangible capital ratio at 9.4 percent at quarter-end remained firmly above the threshold for well-capitalized bank holding companies.
- Expense Control: For the six months ended June 30, 2008, non-interest expense declined by 0.4 percent by careful management of administrative costs, professional fees and staffing levels, compared to 2007. From 2007 to 2008, second quarter non-interest expense increased slightly by 0.5 percent.
“Our team has done an excellent job of cultivating customer relationships in middle and east Tennessee and north Georgia, contributing to this quarter’s loan and deposit growth,” said Rodger B. Holley, Chairman and CEO of First Security. “As for the current economic conditions, in my 30 years in the banking industry I have certainly experienced similar rate environments and credit cycles. We will remain steadfast in pursuing the strategies that have successfully propelled First Security so far: consistent, profitable growth, diversification of our revenue stream and sound asset quality.”
Holley also noted, “We have tremendous opportunity. The attractiveness of our region is evident by the recent announcement of a new $1 billion automobile assembly plant here in Chattanooga which is expected to generate 2,000 jobs directly and up to 14,000 jobs in total.”
For the second quarter of 2008, net interest income declined by 6.7 percent, or $820 thousand, compared to the second quarter of 2007, due to a reduction in net interest margin. The effect of the Federal Reserve’s interest rate cuts over the past year has resulted in a reduction of First Security’s net interest margin from 4.91 percent for the second quarter of 2007 to 4.12 percent for the second quarter of 2008. First Security anticipates its net interest margin will stabilize in the latter half of 2008.
Non-interest income for the second quarter of 2008 increased by $342 thousand, or 12.9 percent, on a year-over-year basis to $3.0 million with First Security continuing to realize the benefits of a diversified income stream. Growth in the wealth management business produced a $38 thousand, or 23.3 percent, increase in trust income, and deposit service fees increased $36 thousand, or 2.8 percent, to $1.3 million, compared to the second quarter of 2007.
Consistent with First Security’s focus on controlling expenses, growth in non-interest expense was limited to $50 thousand, or 0.5 percent, in the second quarter of 2008 as compared to the same quarter in 2007. Non-interest expense totaled $10.3 million in the second quarter of 2008. Quarterly expense savings were achieved in a number of categories including equipment expense, printing and supplies, as well as salaries and benefits. The number of full-time equivalent employees declined to 369 as of June 30, 2008, from 375 a year ago and 371 at year-end 2007. Offsetting the expense savings, FDIC insurance increased by $128 thousand due to higher deposit insurance premiums imposed on the industry.
First Security has employed a prudent approach to credit underwriting and monitoring. Net loan charge-offs as a percentage of average loans annualized was 0.56 percent for the three months ended June 30, 2008. Non-performing assets to total assets was 1.02 percent, and the allowance for loan losses to non-performing assets was 91.27 percent at the end of the second quarter 2008. Non-performing assets plus 90-day delinquencies to total assets, at quarter-end, were 1.08 percent. Loans 90 days past due were $785 thousand at the end of the second quarter of 2008, a decline on a quarter-over-quarter basis, as well as on a year-over-year basis. The quarterly provision for loan and lease losses increased due to higher loan production, non-performing assets and net charge-offs. As of June 30, 2008, the allowance for loan and leases losses to total loans was 1.18 percent.
First Security’s relationship-banking approach produced in the last year an increase of $97.5 million in loan balances, or 10.7 percent, to $1.0 billion at the end of the second quarter 2008. During the quarter, loans grew $29.3 million, or 3.0 percent (12.0 percent annualized), led by increases in C&I loans of $22.4 million, or 15.2 percent (60.7 percent annualized) and commercial real estate loans (CRE) of $14.0 million, or 6.3 percent (25.1 percent annualized). Construction and development (C&D) loans declined $8.6 million, or 3.9 percent (15.7 percent annualized).
First Security’s loan portfolio is primarily within its footprint and is well diversified with 27.4 percent in 1-4 family residential, 23.5 percent in CRE, 20.9 percent in C&D and 16.9 percent in C&I.
At June 30, 2008, total deposits were $950.5 million, an increase of $24.8 million, or 2.7 percent, compared to the end of the second quarter 2007. Total deposits increased $14.9 million, or 1.6 percent (6.4 percent annualized), from March 31, 2008. Non-interest bearing demand deposit accounts grew $7.4 million, or 4.5 percent (18.0 percent annualized), and savings and money market accounts grew $8.5 million, or 6.3 percent (25.0 percent annualized), during the 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 June 30, 2008 was 9.43 percent. Stockholders’ equity at June 30, 2008 was $147.0 million.
“We have seen significant changes in the banking environment,” Mr. Holley concluded. “Yet, we remain committed to owner-managed businesses and consumers who seek a bank partner that provides consistency and reliability.”
Web Cast and Conference Call Information
First Security's executive management team will host a conference call and simultaneous web cast on Tuesday, July 22, 2008 at 3:00 PM Eastern Daylight Time to discuss second 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 $1.3 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 its 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.
Public companies, from time to time, become aware of rumors concerning their business. Investors are cautioned that in this age of instant communication and internet access, it may be important to avoid relying on rumors and unsubstantiated information. First Security complies with Federal and State law applicable to disclosure of information. Investors may be at significant risk in relying on unsubstantiated information from other sources.
| First Security Group, Inc. and Subsidiary |
| Consolidated Balance Sheets |
| June 30, | | December 31, | | June 30, |
| (in thousands, except share data) | | 2008 | | | | 2007 | | | | 2007 | |
| (unaudited) | | | | (unaudited) |
| | | | | |
| ASSETS | | | | | |
| Cash & Due from Banks | $ | 28,151 | | | $ | 27,394 | | | $ | 26,836 | |
| | | | | |
Federal Funds Sold and Securities Purchased under Agreements to Resell | | - | | | | - | | | | - | |
| Cash and Cash Equivalents | | 28,151 | | | | 27,394 | | | | 26,836 | |
| Interest-Bearing Deposits in Bank | | 4,153 | | | | 296 | | | | 2,205 | |
| Securities Available-for-Sale | | 130,405 | | | | 131,849 | | | | 122,106 | |
| Loans Held for Sale | | 6,007 | | | | 4,396 | | | | 10,971 | |
| Loans | | 1,000,698 | | | | 948,709 | | | | 898,206 | |
| Total Loans | | 1,006,705 | | | | 953,105 | | | | 909,177 | |
| Less: Allowance for Loan and Lease Losses | | 11,855 | | | | 10,956 | | | | 10,363 | |
| | 994,850 | | | | 942,149 | | | | 898,814 | |
| Premises and Equipment, net | | 34,854 | | | | 34,751 | | | | 35,966 | |
| Goodwill | | 27,156 | | | | 27,156 | | | | 27,156 | |
| Intangible Assets | | 2,766 | | | | 3,200 | | | | 3,666 | |
| Other Assets | | 48,417 | | | | 45,160 | | | | 41,170 | |
| TOTAL ASSETS | $ | 1,270,752 | | | $ | 1,211,955 | | | $ | 1,157,919 | |
| | | | | |
| LIABILITIES | | | | | |
| Deposits | | | | | |
| Noninterest-Bearing Demand | $ | 170,351 | | | $ | 159,790 | | | $ | 174,650 | |
| Interest-Bearing Demand | | 64,432 | | | | 62,637 | | | | 69,234 | |
| | 234,783 | | | | 222,427 | | | | 243,884 | |
| Savings and Money Market Accounts | | 143,747 | | | | 131,352 | | | | 134,106 | |
| Time Deposits: | | | | | |
| Certificates of Deposit of less than $100 thousand | | 249,317 | | | | 259,628 | | | | 267,772 | |
| Certificates of Deposit of $100 thousand or more | | 207,260 | | | | 225,491 | | | | 221,495 | |
| Brokered Certificates of Deposit | | 115,354 | | | | 63,731 | | | | 58,371 | |
| | 571,931 | | | | 548,850 | | | | 547,638 | |
| Total Deposits | | 950,461 | | | | 902,629 | | | | 925,628 | |
| | | | | |
Federal Funds Purchased and Securities Sold under Agreements to Repurchase | | 65,470 | | | | 62,286 | | | | 27,452 | |
| Security Deposits | | 2,225 | | | | 2,799 | | | | 3,494 | |
| Other Borrowings | | 92,785 | | | | 80,459 | | | | 42,445 | |
| Other Liabilities | | 12,857 | | | | 16,089 | | | | 14,006 | |
| Total Liabilities | | 1,123,798 | | | | 1,064,262 | | | | 1,013,025 | |
| STOCKHOLDERS' EQUITY | | | | | |
| Common stock - $.01 par value 50,000,000 shares authorized; 16,419,883 issued as of June 30, 2008; 16,774,728 issued as of December 31, 2007; 17,498,482 issued as of June 30, 2007 | | | | | |
| | | | |
| | | | |
| 114 | | | | 116 | | | | 121 | |
| Paid-In Surplus | | 111,892 | | | | 114,631 | | | | 121,610 | |
| Unallocated ESOP Shares | | (3,656 | ) | | | (4,310 | ) | | | (4,701 | ) |
| Retained Earnings | | 36,485 | | | | 34,279 | | | | 29,849 | |
| Accumulated Other Comprehensive Gain / (Loss) | | 2,119 | | | | 2,977 | | | | (1,985 | ) |
| Total Stockholders' Equity | | 146,954 | | | | 147,693 | | | | 144,894 | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,270,752 | | | $ | 1,211,955 | | | $ | 1,157,919 | |
| First Security Group, Inc. and Subsidiary |
| Consolidated Statements of Income |
| Three Months Ended | | Six Months Ended |
| June 30, | | June 30, |
| (in thousands except per share amounts) | 2008 | | 2007 | | 2008 | | 2007 |
| (unaudited) | | (unaudited) | | (unaudited) | | (unaudited) |
| INTEREST INCOME | | | | | | | |
| Loans, including fees | $ 17,508 | | $ 19,093 | | $ 36,111 | | $ 37,465 |
| Debt Securities - taxable | 1,126 | | 1,078 | | 2,261 | | 2,370 |
| Debt Securities - non-taxable | 391 | | 405 | | 789 | | 815 |
| Other | 21 | | 34 | | 32 | | 58 |
| Total Interest Income | 19,046 | | 20,610 | | 39,193 | | 40,708 |
| | | | | | | |
| INTEREST EXPENSE | | | | | | | |
| Interest Bearing Demand Deposits | 94 | | 132 | | 193 | | 257 |
| Savings Deposits and Money Market Accounts | 568 | | 778 | | 1,206 | | 1,549 |
| Certificates of Deposit of less than $100 thousand | 2,640 | | 3,254 | | 5,677 | | 6,406 |
| Certificates of Deposit of $100 thousand or more | 2,322 | | 2,752 | | 5,036 | | 5,381 |
| Brokered Certificates of Deposit | 1,091 | | 853 | | 1,827 | | 1,835 |
| Other | 915 | | 605 | | 2,323 | | 1,185 |
| Total Interest Expense | 7,630 | | 8,374 | | 16,262 | | 16,613 |
| | | | | | | |
| NET INTEREST INCOME | 11,416 | | 12,236 | | 22,931 | | 24,095 |
| Provision for Loan and Lease Losses | 1,953 | | 416 | | 3,131 | | 833 |
| NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES | | | | | | | |
| 9,463 | | 11,820 | | 19,800 | | 23,262 |
| | | | | | | |
| NONINTEREST INCOME | | | | | | | |
| Service Charges on Deposit Accounts | 1,337 | | 1,301 | | 2,612 | | 2,441 |
Loss on Sales of Available-for-Sale Securities, net | - | | (168) | | - | | (168) |
| Other than Temporary Impairment of Available-for-Sale Securities | - | | - | | - | | (584) |
| Other | 1,659 | | 1,521 | | 3,338 | | 3,179 |
| Total Noninterest Income | 2,996 | | 2,654 | | 5,950 | | 4,868 |
| | | | | | | |
| NONINTEREST EXPENSE | | | | | | | |
| Salaries and Employee Benefits | 5,767 | | 5,823 | | 11,524 | | 11,645 |
| Expense on Premises and Fixed Assets, net of rental income | 1,703 | | 1,699 | | 3,387 | | 3,326 |
| Other | 2,793 | | 2,691 | | 5,416 | | 5,440 |
| Total Noninterest Expense | 10,263 | | 10,213 | | 20,327 | | 20,411 |
| | | | | | | |
| INCOME BEFORE INCOME TAX PROVISION | 2,196 | | 4,261 | | 5,423 | | 7,719 |
| Income Tax Provision | 592 | | 1,373 | | 1,576 | | 2,477 |
| NET INCOME | 1,604 | | 2,888 | | 3,847 | | 5,242 |
| | | | | | | |
| | | | | | | |
| NET INCOME PER SHARE: | | | | | | | |
| Net Income Per Share - basic | $ 0.10 | | $ 0.17 | | $ 0.24 | | $ 0.31 |
| Net Income Per Share - diluted | $ 0.10 | | $ 0.17 | | $ 0.24 | | $ 0.30 |
| Dividends Declared Per Common Share | $ 0.05 | | $ 0.05 | | $ 0.10 | | $ 0.10 |
First Security Group, Inc. and Subsidiary |
| Consolidated Financial Highlights |
| (unaudited) |
| |
| |
| (in thousands, except per share amounts and full-time equivalent employees) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2nd Quarter | | 1st Quarter | | 4th Quarter | | 3rd Quarter | | 2nd Quarter 2007 | | Year-to-Date June 30, 2008 | | Year-to-Date June 30, 2007 |
| | | | 2008 | | | | 2008 | | | | 2007 | | | | 2007 | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Earnings: | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | | $ | 11,416 | | | $ | 11,515 | | | $ | 12,301 | | | $ | 12,526 | | | $ | 12,236 | | | $ | 22,931 | | | $ | 24,095 | |
| Provision for loan and lease losses | | | $ | 1,953 | | | $ | 1,178 | | | $ | 746 | | | $ | 576 | | | $ | 416 | | | $ | 3,131 | | | $ | 833 | |
| Non-interest income | | | $ | 2,996 | | | $ | 2,954 | | | $ | 3,338 | | | $ | 3,094 | | | $ | 2,654 | | | $ | 5,950 | | | $ | 4,868 | |
| Non-interest expense | | | $ | 10,263 | | | $ | 10,064 | | | $ | 10,474 | | | $ | 10,556 | | | $ | 10,213 | | | $ | 20,327 | | | $ | 20,411 | |
| Net income | | | $ | 1,604 | | | $ | 2,243 | | | $ | 3,092 | | | $ | 3,022 | | | $ | 2,888 | | | $ | 3,847 | | | $ | 5,242 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Per Share Data: | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net income, basic | | | $ | 0.10 | | | $ | 0.14 | | | $ | 0.19 | | | $ | 0.18 | | | $ | 0.17 | | | $ | 0.24 | | | $ | 0.31 | |
| Net income, diluted | | | $ | 0.10 | | | $ | 0.14 | | | $ | 0.18 | | | $ | 0.18 | | | $ | 0.17 | | | $ | 0.24 | | | $ | 0.30 | |
| Cash dividends declared | | | $ | 0.05 | | | $ | 0.05 | | | $ | 0.05 | | | $ | 0.05 | | | $ | 0.05 | | | $ | 0.10 | | | $ | 0.10 | |
| Book value | | | $ | 8.95 | | | $ | 9.13 | | | $ | 8.80 | | | $ | 8.59 | | | $ | 8.28 | | | $ | 8.95 | | | $ | 8.28 | |
| Tangible book value | | | $ | 7.13 | | | $ | 7.30 | | | $ | 6.99 | | | $ | 6.82 | | | $ | 6.52 | | | $ | 7.13 | | | $ | 6.52 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Performance Ratios: | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | | 0.51 | % | | | 0.73 | % | | | 1.03 | % | | | 1.03 | % | | | 1.01 | % | | | 0.62 | % | | | 0.92 | % |
| Return on average equity | | | | 4.30 | % | | | 6.02 | % | | | 8.37 | % | | | 8.27 | % | | | 7.89 | % | | | 5.16 | % | | | 7.18 | % |
| Return on average tangible assets | | | | 0.52 | % | | | 0.75 | % | | | 1.05 | % | | | 1.05 | % | | | 1.04 | % | | | 0.64 | % | | | 0.95 | % |
| Return on average tangible equity | | | | 5.38 | % | | | 7.55 | % | | | 10.54 | % | | | 10.48 | % | | | 10.01 | % | | | 6.46 | % | | | 9.12 | % |
| Net interest margin, taxable equivalent | | | | 4.12 | % | | | 4.30 | % | | | 4.61 | % | | | 4.80 | % | | | 4.91 | % | | | 4.21 | % | | | 4.89 | % |
| Efficiency ratio | | | | 71.21 | % | | | 69.56 | % | | | 66.97 | % | | | 67.58 | % | | | 68.59 | % | | | 70.38 | % | | | 70.47 | % |
| Core efficiency ratio (1) | | | | 68.62 | % | | | 67.20 | % | | | 60.55 | % | | | 64.68 | % | | | 64.95 | % | | | 69.01 | % | | | 65.52 | % |
| Non-interest income to net interest income and non-interest income | | | | 20.79 | % | | | 20.42 | % | | | 21.34 | % | | | 19.81 | % | | | 17.82 | % | | | 20.60 | % | | | 16.81 | % |
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| Capital & Liquidity: | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total equity to total assets | | | | 11.56 | % | | | 12.05 | % | | | 12.19 | % | | | 12.38 | % | | | 12.51 | % | | | 11.56 | % | | | 12.51 | % |
| Tangible equity to tangible assets | | | | 9.43 | % | | | 9.87 | % | | | 9.93 | % | | | 10.08 | % | | | 10.12 | % | | | 9.43 | % | | | 10.12 | % |
| Total loans to total deposits | | | | 105.92 | % | | | 104.48 | % | | | 105.59 | % | | | 99.90 | % | | | 98.22 | % | | | 105.92 | % | | | 98.22 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Asset Quality: | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net charge-offs | | | $ | 1,405 | | | $ | 815 | | | $ | 419 | | | $ | 298 | | | $ | 201 | | | $ | 2,220 | | | $ | 412 | |
| Net loans charged-off to average loans, annualized | | | | 0.56 | % | | | 0.34 | % | | | 0.18 | % | | | 0.13 | % | | | 0.09 | % | | | 0.45 | % | | | 0.09 | % |
| Non-accrual loans | | | $ | 6,845 | | | $ | 5,047 | | | $ | 3,372 | | | $ | 1,687 | | | $ | 938 | | | $ | 6,845 | | | $ | 938 | |
| Other real estate owned | | | $ | 4,605 | | | $ | 3,510 | | | $ | 2,452 | | | $ | 2,646 | | | $ | 2,014 | | | $ | 4,605 | | | $ | 2,014 | |
| Repossessed assets | | | $ | 1,539 | | | $ | 1,641 | | | $ | 1,834 | | | $ | 2,489 | | | $ | 1,707 | | | $ | 1,539 | | | $ | 1,707 | |
| Non-performing assets (NPA) | | | $ | 12,989 | | | $ | 10,198 | | | $ | 7,658 | | | $ | 6,822 | | | $ | 4,659 | | | $ | 12,989 | | | $ | 4,659 | |
| NPA to total assets | | | | 1.02 | % | | | 0.82 | % | | | 0.63 | % | | | 0.57 | % | | | 0.40 | % | | | 1.02 | % | | | 0.40 | % |
| Loans 90 days past due | | | $ | 785 | | | $ | 1,473 | | | $ | 2,289 | | | $ | 585 | | | $ | 1,639 | | | $ | 785 | | | $ | 1,639 | |
| NPA + loans 90 days past due to total assets | | | | 1.08 | % | | | 0.94 | % | | | 0.82 | % | | | 0.62 | % | | | 0.54 | % | | | 1.08 | % | | | 0.54 | % |
| Allowance for loan and lease losses to total loans | | | | 1.18 | % | | | 1.16 | % | | | 1.15 | % | | | 1.13 | % | | | 1.14 | % | | | 1.18 | % | | | 1.14 | % |
| Allowance for loan and lease losses to NPA | | | | 91.27 | % | | | 110.93 | % | | | 143.07 | % | | | 155.89 | % | | | 222.43 | % | | | 91.27 | % | | | 222.43 | % |
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| Period End Balances: | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | | $ | 1,006,705 | | | $ | 977,396 | | | $ | 953,105 | | | $ | 940,025 | | | $ | 909,177 | | | $ | 1,006,705 | | | $ | 909,177 | |
| Intangible assets | | | $ | 29,922 | | | $ | 30,131 | | | $ | 30,356 | | | $ | 30,579 | | | $ | 30,822 | | | $ | 29,922 | | | $ | 30,822 | |
| Assets | | | $ | 1,270,752 | | | $ | 1,247,669 | | | $ | 1,211,955 | | | $ | 1,198,465 | | | $ | 1,157,919 | | | $ | 1,270,752 | | | $ | 1,157,919 | |
| Deposits | | | $ | 950,461 | | | $ | 935,518 | | | $ | 902,629 | | | $ | 940,988 | | | $ | 925,628 | | | $ | 950,461 | | | $ | 925,628 | |
| Stockholders' equity | | | $ | 146,954 | | | $ | 150,289 | | | $ | 147,693 | | | $ | 148,318 | | | $ | 144,894 | | | $ | 146,954 | | | $ | 144,894 | |
| Common stock market capitalization | | | $ | 91,624 | | | $ | 149,411 | | | $ | 150,640 | | | $ | 172,750 | | | $ | 188,978 | | | $ | 91,624 | | | $ | 188,978 | |
| Full-time equivalent employees | | | | 369 | | | | 366 | | | | 371 | | | | 373 | | | | 375 | | | | 369 | | | | 375 | |
| Shares outstanding | | | | 16,420 | | | | 16,455 | | | | 16,775 | | | | 17,275 | | | | 17,498 | | | | 16,420 | | | | 17,498 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Average Balances: | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | | $ | 999,859 | | | $ | 966,004 | | | $ | 950,640 | | | $ | 926,216 | | | $ | 884,383 | | | $ | 982,931 | | | $ | 869,984 | |
| Intangible assets | | | $ | 30,034 | | | $ | 30,256 | | | $ | 30,475 | | | $ | 30,708 | | | $ | 30,958 | | | $ | 30,145 | | | $ | 31,088 | |
| Earning assets | | | $ | 1,135,027 | | | $ | 1,099,190 | | | $ | 1,080,278 | | | $ | 1,053,908 | | | $ | 1,018,666 | | | $ | 1,117,098 | | | $ | 1,014,445 | |
| Assets | | | $ | 1,259,203 | | | $ | 1,224,678 | | | $ | 1,204,038 | | | $ | 1,178,298 | | | $ | 1,141,946 | | | $ | 1,241,771 | | | $ | 1,139,874 | |
| Deposits | | | $ | 935,899 | | | $ | 893,838 | | | $ | 926,149 | | | $ | 934,034 | | | $ | 917,215 | | | $ | 914,830 | | | $ | 918,965 | |
| Stockholders' equity | | | $ | 149,316 | | | $ | 149,015 | | | $ | 147,832 | | | $ | 146,101 | | | $ | 146,412 | | | $ | 149,158 | | | $ | 146,042 | |
| Shares outstanding, basic - wtd | | | | 16,052 | | | | 16,144 | | | | 16,585 | | | | 16,901 | | | | 17,117 | | | | 16,098 | | | | 17,179 | |
| Shares outstanding, diluted - wtd | | | | 16,237 | | | | 16,334 | | | | 16,849 | | | | 17,223 | | | | 17,482 | | | | 16,285 | | | | 17,561 | |
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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. |
|
| Non-GAAP Reconciliation Table |
| |
| |
| (in thousands, except per share data) |
| | | | | | | | | | | | | | |
| | 2nd Quarter
2008 | | 1st Quarter
2008 | | 4th Quarter
2007 | | 3rd Quarter
2007 | | 2nd Quarter
2007 | | Year-to-Date
June 30, 2008 | | Year-to-Date
June 30, 2007 |
| | | | | | | | | | | | | | |
| Return on average assets | | 0.51% | | 0.73% | | 1.03% | | 1.03% | | 1.01% | | 0.62% | | 0.92% |
| Effect of intangible assets | | 0.01% | | 0.02% | | 0.02% | | 0.02% | | 0.03% | | 0.02% | | 0.03% |
| Return on average tangible assets | | 0.52% | | 0.75% | | 1.05% | | 1.05% | | 1.04% | | 0.64% | | 0.95% |
| | | | | | | | | | | | | | |
| Return of average equity | | 4.30% | | 6.02% | | 8.37% | | 8.27% | | 7.89% | | 5.16% | | 7.18% |
| Effect of intangible assets | | 1.08% | | 1.53% | | 2.17% | | 2.21% | | 2.12% | | 1.30% | | 1.94% |
| Return on average tangible equity | | 5.38% | | 7.55% | | 10.54% | | 10.48% | | 10.01% | | 6.46% | | 9.12% |
| | | | | | | | | | | | | | |
| Total equity to total assets | | 11.56% | | 12.05% | | 12.19% | | 12.38% | | 12.51% | | 11.56% | | 12.51% |
| Effect of intangible assets | | -2.13% | | -2.18% | | -2.26% | | -2.30% | | -2.39% | | -2.13% | | -2.39% |
| Tangible equity to tangible assets | | 9.43% | | 9.87% | | 9.93% | | 10.08% | | 10.12% | | 9.43% | | 10.12% |
| | | | | | | | | | | | | | |
| Efficiency ratio | | 71.21% | | 69.56% | | 66.97% | | 67.58% | | 68.59% | | 70.38% | | 70.47% |
| Effect of non-cash items | | -1.48% | | -1.27% | | -5.46% | | -1.91% | | -2.61% | | -1.37% | | -3.88% |
| Effect of net interest income, tax equivalent adjustment | | -1.11% | | -1.09% | | -0.96% | | -0.99% | | -1.03% | | 0.00% | | -1.07% |
| Core efficiency ratio | | 68.62% | | 67.20% | | 60.55% | | 64.68% | | 64.95% | | 69.01% | | 65.52% |
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| Per Share Data | | | | | | | | | | | | | | |
| Book value | | $ 8.95 | | $ 9.13 | | $ 8.80 | | $ 8.59 | | $ 8.28 | | $ 8.95 | | $ 8.28 |
| Effect of intangible assets | | (1.82) | | (1.83) | | (1.81) | | (1.77) | | (1.76) | | (1.82) | | (1.76) |
| Tangible book value | | $ 7.13 | | $ 7.30 | | $ 6.99 | | $ 6.82 | | $ 6.52 | | $ 7.13 | | $ 6.52 |
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| Supplemental Data | | (in thousands) |
| | | | | | | | | | | | | | |
| Allowance for loan and lease losses | | $ 11,855 | | $ 11,313 | | $ 10,956 | | $ 10,635 | | $ 10,363 | | $ 11,855 | | $ 10,363 |
| Net interest income, tax equivalent | | $ 11,646 | | $ 11,749 | | $ 12,541 | | $ 12,761 | | $ 12,474 | | $ 22,931 | | $ 24,577 |
| Amortization of intangibles | | $ 209 | | $ 225 | | $ 223 | | $ 243 | | $ 254 | | $ 434 | | $ 519 |
Loss on sales of available-for-sale securities, net | | $ - | | $ - | | $ - | | $ - | | $ 168 | | $ - | | $ 168 |
| Other-than-temporary impairment of securities | | $ - | | $ - | | $ - | | $ - | | $ - | | $ - | | $ 584 |
| Gain on sales of foreclosed and repossessed property, leased equipment, premises and equipment and loans | | $ (213) | | $ (97) | | $ (508) | | $ (210) | | $ (68) | | $ (310) | | $ (256) |
| Losses on sales of foreclosed and repossessed property and premises and equipment | | $ 28 | | $ 14 | | $ 370 | | $ 156 | | $ 8 | | $ 42 | | $ 15 |
| Write-downs on foreclosed and repossessed property | | $ 125 | | $ 10 | | $ 574 | | $ 38 | | $ 60 | | $ 135 | | $ 259 |
| Mortgage loan and related fees | | $ 413 | | $ 523 | | $ 352 | | $ 396 | | $ 388 | | $ 936 | | $ 846 |
CONTACT:
First Security Group, Inc.
Rodger B. Holley, Chairman & CEO, 423-308-2080
rholley@FSGBank.com
or
William L. (Chip) Lusk, Jr., EVP & CFO, 423-308-2070
clusk@FSGBank.com
