Exhibit 99.1
First Security Group Announces Third Quarter Results
Continues Long-Term Approach to Capital and Reserves
CHATTANOOGA, Tenn.--(BUSINESS WIRE)--October 20, 2009--First Security Group, Inc. (NASDAQ: FSGI) determined that it was appropriate to write off all goodwill from its balance sheet, which negatively affected earnings during the third quarter. Consequently, First Security posted a net loss available to common shareholders of $28.6 million, or $1.84 per diluted share, for the third quarter of 2009. The after tax goodwill impairment charge totaled $24.8 million and is a one-time, non-cash accounting adjustment that has no effect on cash flows, liquidity, tangible capital or the Company’s ability to conduct business. The charge is due to the continued economic downturn and its implication on bank valuations. Because goodwill is excluded from regulatory capital, the impairment charge has no impact on the regulatory capital ratios of First Security or FSGBank, both of which remain “well capitalized” under regulatory requirements.
Excluding the impact of the goodwill impairment charge in the third quarter, First Security’s net operating loss available to common shareholders was $3.9 million, or $0.25 per diluted share. The quarterly net operating results were primarily driven by loan loss provision of $9.3 million, as the Company bolstered its allowance by conservatively assessing the existing and emerging credit issues related to the national and regional economic slowdown and the corresponding increases in unemployment.
Highlights of the quarter’s performance include:
- Capital: First Security’s tangible capital ratio increased to 11.92 percent at September 30, 2009, from 11.84 percent at June 30, 2009, and well above the threshold for well-capitalized banks. Additionally, First Security’s tangible common equity ratio improved to 9.32 percent as of September 30, 2009 from 9.26 percent as of June 30, 2009.
- Allowance for Loan and Lease Losses: First Security’s allowance increased to $25.7 million, or 2.66 percent of loans and leases, as of September 30, 2009 from $19.3 million, or 1.99 percent, as of June 30, 2009.
- Net interest margin: First Security’s net interest margin increased to 3.96 percent in the third quarter from 3.77 percent in the linked second quarter due to First Security’s ability to reduce its cost of funding liabilities.
“In light of the uncertain economic environment, we eliminated our intangible goodwill in the third quarter through a non-cash accounting adjustment that does not affect cash or liquidity and has no impact on our regulatory or tangible capital ratios,” said Rodger B. Holley, Chairman, CEO and President of First Security. “This non-cash charge does not impact our daily operations in any manner. In fact, our quarter-over-quarter underlying operational performance is encouraging. Core earnings, which consists of pre-tax revenue and non-interest expense before the goodwill impairment, improved by $178 thousand to $3.4 million in the third quarter over the linked quarter.”
Net interest income increased $400 thousand, or 3.8 percent, to $10.9 million for the third quarter of 2009, compared to $10.5 million for the linked quarter. First Security’s net interest margin improved 19 basis points to 3.96 percent in the third quarter from the linked quarter through a combination of reduced dependency on brokered deposits and certificate of deposits repricing at lower, current market rates. For the three and nine months ended September 30, 2009, net interest income declined from the comparable 2008 periods due to the Federal Reserve’s interest rate reductions.
Non-interest income for the third quarter of 2009 improved by $93 thousand, or 3.5 percent, to $2.7 million over the linked quarter primarily due to an increase in fees and fair value adjustments on mortgages originated and sold in the secondary market. Excluding prior year gains on sales of investment securities, non-interest income decreased $174 thousand from the third quarter of 2008 to the third quarter of 2009 due primarily to lower service charges on bank accounts. On a year-to-date basis, non-interest income declined by $1.2 million, or 13.0 percent, from the 2008 period due mainly to lower service charge fees and mortgage origination fees.
For the third quarter of 2009, total non-interest expense of $37.4 million included a pre-tax, one-time, non-cash, estimated goodwill impairment loss of $27.2 million. First Security is currently conducting its annual goodwill impairment testing, based on the September 30, 2009 evaluation date. The estimate will be finalized upon completion of the goodwill impairment testing, which is currently estimating a full impairment charge. Excluding the goodwill impairment charge, non-interest operating expense was $10.2 million for the third quarter of 2009 compared to $9.9 million for the linked quarter and $9.7 million for the third quarter of 2008. The increase was primarily due to increased professional fees and holding costs on foreclosed properties. On a year-to-date basis, non-interest expense, excluding the goodwill impairment, decreased $473 thousand to $29.6 million in 2009 from $30.0 million in 2008, despite significantly rising FDIC insurance costs, which are beyond First Security’s control.
Consistent with First Security’s continued focus on controlling costs, a number of categories of noninterest expense in the third quarter of 2009 declined from the linked quarter, including salaries and benefits which decreased by $140 thousand, or 2.8 percent. On a year-to-date basis, salaries and benefits decreased by $1.3 million from 2008 to 2009. The number of full-time equivalent employees declined to 348 as of September 30, 2009, from 365 a year ago and 353 at June 30, 2009.
“While some economists have declared that ‘the recession is over,’ we anticipate that the lingering effects of the economic downturn will continue to place stress on businesses and borrowers in all markets,” noted Mr. Holley. “As such, we aggressively built our loan loss reserve in the third quarter. We believe that this long-term view of our business and market area will help us manage our short-term challenges, and will also better prepare us for the opportunities that will accompany an extended and gradual economic recovery.”
Non-performing assets increased modestly in the third quarter of 2009 from the linked quarter. Non-accrual loans and leases increased $4.7 million to $31.5 million at the end of the third quarter of 2009, from the linked quarter; the largest categories were construction and development (C&D) loans with $10.6 million, commercial and industrial (C&I) loans with $8.4 million and commercial leases with $5.1 million. Over the same time period, other real estate owned increased $1.3 million to $14.2 million; and repossessed assets increased $577 thousand to $2.1 million at September 30, 2009, from June 30, 2009. Additional detail on asset quality is available in the supplemental data following financial highlights.
As of September 30, 2009, the allowance for loan and lease losses was $25.7 million, or 2.66 percent of total loans, compared to $19.3 million, or 1.99 percent of total loans, as of June 30, 2009. At September 30, 2009, approximately 77 percent of the allowance was allocated to loan pools based on common characteristics in accordance with Financial Accounting Standard (FAS) No. 5, whereas the remainder of the allowance was allocated to impaired loans under FAS No. 114.
During the third quarter of 2009, net charge-offs declined to $2.9 million, or 1.18 percent annualized of average loans, compared to $6.9 million, or 2.82 percent annualized, in the linked quarter.
First Security continues its focus on strategically reducing certain balance sheet risks. During the third quarter of 2009, loan balances declined by $4.2 million, or 0.4 percent (1.7 percent annualized). This decline was concentrated in C&D loans of $7.1 million and 1-4 family residential loans of $4.0 million.
First Security’s loan portfolio consists of in-market loans originated throughout its branch network. The loan portfolio is well diversified with 29.6 percent in 1-4 family residential, 24.2 percent in commercial real estate, 18.3 percent in C&D and 15.4 percent in C&I. Additional detail on the loan portfolio is available in the supplemental data following financial highlights.
At September 30, 2009, total deposits were $1.0 billion, a decline of 1.3 percent (5.3 percent annualized), compared to the end of the linked quarter. The decline was primarily due to an $8.8 million, or 6.8 percent (27.1 percent annualized), decline in brokered certificates of deposit. Core deposits, which include non-interest bearing demand deposit accounts, interest-bearing demand deposit accounts, savings and money markets and certificates of deposit of less than $100 thousand, increased to 60.5 percent of total deposits, from 60.1 percent in the linked quarter. At September 30, 2009, savings and money market accounts totaled $164.5 million, a 24.0 percent increase from one year ago. Total deposits increased $42.8 million, or 4.4 percent from September 30, 2008.
First Security maintains capital levels exceeding those for well-capitalized banks under applicable regulatory guidelines. The tangible equity to tangible assets ratio as of September 30, 2009 was 11.92 percent compared to 11.84 percent at June 30, 2009. Total stockholders’ equity at the end of the third quarter of 2009 was $145.2 million, and included common stockholders’ equity of $113.9 million and preferred stockholder’s equity of $31.2 million.
“The entire financial industry is under pressure to reduce balance sheet risk and increase reserves to sustain recessionary losses,” Mr. Holley concluded. “With our diversified loan portfolio, strong capital position and increased reserves, we are preparing for the possibility that credit conditions may deteriorate further in the near future; however, I remain optimistic. While the recovery may be slow and significant improvement may be several quarters away, we operate in a region that has excellent prospects for growth and job expansion. Furthermore, we have a team of experienced and dedicated bankers who continue to have success adding new customer relationships, and we continue focusing on our long term objective of consistent and sustainable core earnings growth.”
Webcast and Conference Call Information
First Security’s executive management team will host a conference call and simultaneous webcast on Tuesday October 20, 2009, at 3:00 PM Eastern Daylight Time to discuss third quarter results. The webcast 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 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. The non-GAAP measure of core earnings excludes the provision for loan and lease losses, income taxes, preferred stock dividends, accretion on preferred stock, and non-recurring items. 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 business and its capacity to cover future credit losses through core earnings. 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 1993) that are based on current expectations that involve a number of risks and uncertainties. These forward-looking statements include, among others, an estimated goodwill impairment charge and the assumptions underlying this estimate. 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.
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| First Security Group, Inc. and Subsidiary |
| Consolidated Balance Sheets |
| | September 30, | | December 31, | | September 30, |
| (in thousands, except share data) | | 2009 | | 2008 | | 2008 |
| | (unaudited) | | | | (unaudited) |
| | | | | | |
| ASSETS | | | | | | |
| Cash & Due from Banks | | $ | 14,711 | | | $ | 23,222 | | | $ | 26,822 | |
Federal Funds Sold and Securities Purchased under Agreements to Resell | | | - | | | | - | | | | - | |
| Cash and Cash Equivalents | | | 14,711 | | | | 23,222 | | | | 26,822 | |
| Interest-Bearing Deposits in Banks | | | 5,394 | | | | 918 | | | | 963 | |
| Securities Available-for-Sale | | | 147,175 | | | | 139,305 | | | | 134,437 | |
| Loans Held for Sale | | | 1,001 | | | | 1,609 | | | | 3,972 | |
| Loans | | | 963,294 | | | | 1,009,975 | | | | 1,013,495 | |
| Total Loans | | | 964,295 | | | | 1,011,584 | | | | 1,017,467 | |
| Less: Allowance for Loan and Lease Losses | | | 25,686 | | | | 17,385 | | | | 13,335 | |
| | | 938,609 | | | | 994,199 | | | | 1,004,132 | |
| Premises and Equipment, net | | | 33,587 | | | | 33,808 | | | | 34,289 | |
| Goodwill | | | - | | | | 27,156 | | | | 27,156 | |
| Intangible Assets | | | 2,012 | | | | 2,404 | | | | 2,592 | |
| Other Assets | | | 61,420 | | | | 55,215 | | | | 51,622 | |
| TOTAL ASSETS | | $ | 1,202,908 | | | $ | 1,276,227 | | | $ | 1,282,013 | |
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| LIABILITIES | | | | | | |
| Deposits | | | | | | |
| Noninterest-Bearing Demand | | $ | 146,820 | | | $ | 150,047 | | | $ | 162,631 | |
| Interest-Bearing Demand | | | 61,502 | | | | 61,402 | | | | 62,031 | |
| Savings and Money Market Accounts | | | 164,490 | | | | 151,259 | | | | 132,646 | |
| Certificates of Deposit of less than $100 thousand | | | 244,127 | | | | 249,978 | | | | 256,727 | |
| Certificates of Deposit of $100 thousand or more | | | 203,533 | | | | 206,502 | | | | 213,440 | |
| Brokered Deposits | | | 198,815 | | | | 257,098 | | | | 149,045 | |
| Total Deposits | | | 1,019,287 | | | | 1,076,286 | | | | 976,520 | |
Federal Funds Purchased and Securities Sold under Agreements to Repurchase | | | 20,463 | | | | 40,036 | | | | 50,571 | |
| Security Deposits | | | 1,444 | | | | 2,078 | | | | 2,118 | |
| Other Borrowings | | | 7,724 | | | | 2,777 | | | | 92,780 | |
| Other Liabilities | | | 8,801 | | | | 10,806 | | | | 11,493 | |
| Total Liabilities | | | 1,057,719 | | | | 1,131,983 | | | | 1,133,482 | |
| STOCKHOLDERS' EQUITY | | | | | | |
Preferred Stock - no par value 10,000,000 authorized; 33,000 issued as of September 30, 2009; none issued as of December 31, 2008 and September 30, 2008 | | | 31,248 | | | | - | | | | - | |
Common Stock - $.01 par value 50,000,000 shares authorized; 16,418,327 issued as of September 30, 2009; 16,419,883 issued as of December 31, 2008; 16,419,883 issued as of September 30, 2008 | | | 114 | | | | 114 | | | | 114 | |
| Paid-In Surplus | | | 111,999 | | | | 111,777 | | | | 111,927 | |
| Common Stock Warrants | | | 2,006 | | | | - | | | | - | |
| Unallocated ESOP Shares | | | (6,446 | ) | | | (5,944 | ) | | | (3,856 | ) |
| (Accumulated Deficit) Retained Earnings | | | (524 | ) | | | 32,387 | | | | 36,487 | |
| Accumulated Other Comprehensive Income | | | 6,792 | | | | 5,910 | | | | 3,859 | |
| Total Stockholders' Equity | | | 145,189 | | | | 144,244 | | | | 148,531 | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 1,202,908 | | | $ | 1,276,227 | | | $ | 1,282,013 | |
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| First Security Group, Inc. and Subsidiary |
| Consolidated Income Statements |
| | Three Months Ended | | Year-to-Date |
| | September 30, | | September 30, |
| (in thousands except per share amounts) | | 2009 | | 2008 | | 2009 | | 2008 |
| | (unaudited) | | (unaudited) | | (unaudited) | | (unaudited) |
| INTEREST INCOME | | | | | | | | |
| Loans, including fees | | $ | 14,462 | | | $ | 17,505 | | $ | 43,859 | | | $ | 53,616 |
| Debt Securities - taxable | | | 1,097 | | | | 1,149 | | | 3,435 | | | | 3,410 |
| Debt Securities - non-taxable | | | 396 | | | | 395 | | | 1,200 | | | | 1,184 |
| Other | | | 3 | | | | 9 | | | 38 | | | | 41 |
| Total Interest Income | | | 15,958 | | | | 19,058 | | | 48,532 | | | | 58,251 |
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| INTEREST EXPENSE | | | | | | | | |
| Interest-Bearing Demand Deposits | | | 45 | | | | 69 | | | 146 | | | | 262 |
| Savings Deposits and Money Market Accounts | | | 384 | | | | 548 | | | 1,255 | | | | 1,754 |
| Certificates of Deposit of less than $100 thousand | | | 1,738 | | | | 2,525 | | | 5,687 | | | | 8,202 |
| Certificates of Deposit of $100 thousand or more | | | 1,530 | | | | 2,206 | | | 4,934 | | | | 7,242 |
| Brokered Deposits | | | 1,225 | | | | 1,114 | | | 4,478 | | | | 2,941 |
| Other | | | 136 | | | | 900 | | | 395 | | | | 3,223 |
| Total Interest Expense | | | 5,058 | | | | 7,362 | | | 16,895 | | | | 23,624 |
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| NET INTEREST INCOME | | | 10,900 | | | | 11,696 | | | 31,637 | | | | 34,627 |
| Provision for Loan and Lease Losses | | | 9,280 | | | | 3,960 | | | 20,469 | | | | 7,091 |
| NET INTEREST INCOME AFTER PROVISION | | | | | | | | |
| FOR LOAN AND LEASE LOSSES | | | 1,620 | | | | 7,736 | | | 11,168 | | | | 27,536 |
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| NON-INTEREST INCOME | | | | | | | | |
| Service Charges on Deposit Accounts | | | 1,184 | | | | 1,338 | | | 3,501 | | | | 3,950 |
| Gain on Sales of Available for Sale Securities, net | | | - | | | | 146 | | | - | | | | 146 |
| Other | | | 1,553 | | | | 1,573 | | | 4,331 | | | | 4,911 |
| Total Non-interest Income | | | 2,737 | | | | 3,057 | | | 7,832 | | | | 9,007 |
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| NON-INTEREST EXPENSE | | | | | | | | |
| Salaries and Employee Benefits | | | 4,903 | | | | 5,105 | | | 15,303 | | | | 16,629 |
| Expense on Premises and Fixed Assets, net of rental income | | | 1,493 | | | | 1,583 | | | 4,525 | | | | 4,970 |
| Impairment of Goodwill | | | 27,156 | | | | - | | | 27,156 | | | | - |
| Other | | | 3,811 | | | | 3,017 | | | 9,731 | | | | 8,433 |
| Total Non-interest Expense | | | 37,363 | | | | 9,705 | | | 56,715 | | | | 30,032 |
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| (LOSS) INCOME BEFORE INCOME TAX (BENEFIT) PROVISION | | | (33,006 | ) | | | 1,088 | | | (37,715 | ) | | | 6,511 |
| Income Tax (Benefit) Provision | | | (4,877 | ) | | | 262 | | | (7,326 | ) | | | 1,838 |
| NET (LOSS) INCOME | | | (28,129 | ) | | | 826 | | | (30,389 | ) | | | 4,673 |
| Preferred Stock Dividends | | | 412 | | | | - | | | 1,196 | | | | - |
| Accretion on Preferred Stock Discount | | | 90 | | | | - | | | 254 | | | | - |
| NET (LOSS) INCOME AVAILABLE TO COMMON STOCKHOLDERS | | $ | (28,631 | ) | | $ | 826 | | $ | (31,839 | ) | | $ | 4,673 |
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| NET (LOSS) INCOME PER COMMON SHARE: | | | | | | | | |
| Net Income Per Common Share - basic | | $ | (1.84 | ) | | $ | 0.05 | | $ | (2.05 | ) | | $ | 0.29 |
| Net Income Per Common Share - diluted | | $ | (1.84 | ) | | $ | 0.05 | | $ | (2.05 | ) | | $ | 0.29 |
| Dividends Declared Per Common Share | | $ | 0.01 | | | $ | 0.05 | | $ | 0.07 | | | $ | 0.15 |
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| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | | | | | | | | |
| BASIC | | | 15,543 | | | | 16,065 | | | 15,539 | | | | 16,087 |
| DILUTED | | | 15,543 | | | | 16,159 | | | 15,539 | | | | 16,243 |
| 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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| | 3rd Quarter
2009 | | | 2nd Quarter
2009 | | | 1st Quarter
2009 | | | 4th Quarter
2008 | | | 3rd Quarter
2008 | | | Year-to-Date
September 30,
2009 | | | Year-to-Date
September 30,
2008 | |
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| Earnings: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | $ | 10,900 | | | $ | 10,500 | | | $ | 10,237 | | | $ | 10,600 | | | $ | 11,696 | | | $ | 31,637 | | | $ | 34,627 | |
| Provision for loan and lease losses | | $ | 9,280 | | | $ | 6,196 | | | $ | 4,993 | | | $ | 8,662 | | | $ | 3,960 | | | $ | 20,469 | | | $ | 7,091 | |
| Non-interest income | | $ | 2,737 | | | $ | 2,644 | | | $ | 2,451 | | | $ | 2,675 | | | $ | 3,057 | | | $ | 7,832 | | | $ | 9,007 | |
| Non-interest expense | | $ | 37,363 | | | $ | 9,892 | | | $ | 9,460 | | | $ | 10,350 | | | $ | 9,705 | | | $ | 56,715 | | | $ | 30,032 | |
| Dividends and accretion on preferred stock | | $ | 502 | | | $ | 500 | | | $ | 448 | | | $ | - | | | $ | - | | | $ | 1,450 | | | $ | - | |
| Net (loss) income available to common stockholders | | $ | (28,631 | ) | | $ | (1,908 | ) | | $ | (1,300 | ) | | $ | (3,312 | ) | | $ | 826 | | | $ | (31,839 | ) | | $ | 4,673 | |
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| Earnings - Normalized | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-interest operating expense (1) | | $ | 10,207 | | | $ | 9,892 | | | $ | 9,460 | | | $ | 10,350 | | | $ | 9,705 | | | $ | 29,559 | | | $ | 30,032 | |
| Net operating income, net of tax (1) | | $ | (3,869 | ) | | $ | (1,908 | ) | | $ | (1,300 | ) | | $ | (3,312 | ) | | $ | 826 | | | $ | (7,077 | ) | | $ | 4,673 | |
Core earnings (2) | | $ | 3,430 | | | $ | 3,252 | | | $ | 3,228 | | | $ | 2,925 | | | $ | 5,048 | | | $ | 9,910 | | | $ | 13,602 | |
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| Per Share Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net (loss) income available to common stockholders, basic | | $ | (1.84 | ) | | $ | (0.12 | ) | | $ | (0.08 | ) | | $ | (0.21 | ) | | $ | 0.05 | | | $ | (2.05 | ) | | $ | 0.29 | |
| Net (loss) income available to common stockholders, diluted | | $ | (1.84 | ) | | $ | (0.12 | ) | | $ | (0.08 | ) | | $ | (0.21 | ) | | $ | 0.05 | | | $ | (2.05 | ) | | $ | 0.29 | |
| Cash dividends declared on common shares | | $ | 0.01 | | | $ | 0.01 | | | $ | 0.05 | | | $ | 0.05 | | | $ | 0.05 | | | $ | 0.07 | | | $ | 0.15 | |
| Book value per common share | | $ | 6.94 | | | $ | 8.61 | | | $ | 8.76 | | | $ | 8.78 | | | $ | 9.05 | | | $ | 6.94 | | | $ | 9.05 | |
| Tangible book value per common share | | $ | 6.82 | | | $ | 6.82 | | | $ | 6.97 | | | $ | 6.98 | | | $ | 7.23 | | | $ | 6.82 | | | $ | 7.23 | |
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| Per Share Data - Normalized: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net operating income, basic (1) | | $ | (0.25 | ) | | $ | (0.12 | ) | | $ | (0.08 | ) | | $ | (0.21 | ) | | $ | 0.05 | | | $ | (0.46 | ) | | $ | 0.29 | |
| Net operating income, diluted (1) | | $ | (0.25 | ) | | $ | (0.12 | ) | | $ | (0.08 | ) | | $ | (0.21 | ) | | $ | 0.05 | | | $ | (0.46 | ) | | $ | 0.29 | |
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| Performance Ratios: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | -9.30 | % | | | -0.61 | % | | | -0.40 | % | | | -1.04 | % | | | 0.26 | % | | | -3.37 | % | | | 0.50 | % |
| Return on average common equity | | | -80.88 | % | | | -5.28 | % | | | -3.57 | % | | | -8.98 | % | | | 2.22 | % | | | -29.51 | % | | | 4.18 | % |
| Return on average tangible assets | | | -9.52 | % | | | -0.62 | % | | | -0.41 | % | | | -1.06 | % | | | 0.27 | % | | | -3.45 | % | | | 0.51 | % |
| Return on average tangible common equity | | | -101.66 | % | | | -6.63 | % | | | -4.48 | % | | | -11.24 | % | | | 2.78 | % | | | -37.04 | % | | | 5.24 | % |
| Net interest margin, taxable equivalent | | | 3.96 | % | | | 3.77 | % | | | 3.63 | % | | | 3.74 | % | | | 4.13 | % | | | 3.78 | % | | | 4.18 | % |
| Efficiency ratio | | | 273.98 | % | | | 75.26 | % | | | 74.56 | % | | | 77.97 | % | | | 65.78 | % | | | 143.70 | % | | | 68.83 | % |
| Non-interest income to net interest income and non-interest income | | | 20.07 | % | | | 20.12 | % | | | 19.32 | % | | | 20.15 | % | | | 20.72 | % | | | 19.84 | % | | | 20.64 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Performance Ratios - Normalized: | | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating return on average assets (1) | | | -1.26 | % | | | -0.61 | % | | | -0.40 | % | | | -1.04 | % | | | 0.26 | % | | | -0.75 | % | | | 0.50 | % |
| Operating return on average common equity (1) | | | -10.93 | % | | | -5.28 | % | | | -3.57 | % | | | -8.98 | % | | | 2.22 | % | | | -6.56 | % | | | 4.18 | % |
| Operating return on average tangible assets (1) | | | -1.29 | % | | | -0.62 | % | | | -0.41 | % | | | -1.06 | % | | | 0.27 | % | | | -0.77 | % | | | 0.51 | % |
| Operating return on average tangible common equity (1) | | | -13.74 | % | | | -6.63 | % | | | -4.48 | % | | | -11.24 | % | | | 2.78 | % | | | -8.23 | % | | | 5.24 | % |
Core efficiency ratio (3) | | | 71.13 | % | | | 71.64 | % | | | 70.69 | % | | | 68.98 | % | | | 63.16 | % | | | 71.16 | % | | | 66.32 | % |
Non-interest operating income to net interest income and non-interest operating income (1) | | | 20.07 | % | | | 20.12 | % | | | 19.32 | % | | | 20.15 | % | | | 20.72 | % | | | 19.84 | % | | | 20.64 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Capital & Liquidity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total equity to total assets | | | 12.07 | % | | | 13.93 | % | | | 13.73 | % | | | 11.30 | % | | | 11.59 | % | | | 12.07 | % | | | 11.59 | % |
| Tangible equity to tangible assets | | | 11.92 | % | | | 11.84 | % | | | 11.69 | % | | | 9.20 | % | | | 9.49 | % | | | 11.92 | % | | | 9.49 | % |
| Tangible common equity to tangible assets | | | 9.32 | % | | | 9.26 | % | | | 9.20 | % | | | 9.20 | % | | | 9.49 | % | | | 9.32 | % | | | 9.49 | % |
| Total loans to total deposits | | | 94.60 | % | | | 93.75 | % | | | 93.08 | % | | | 93.99 | % | | | 104.19 | % | | | 94.60 | % | | | 104.19 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Asset Quality: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net charge-offs | | $ | 2,862 | | | $ | 6,944 | | | $ | 2,344 | | | $ | 4,606 | | | $ | 2,474 | | | $ | 12,150 | | | $ | 4,694 | |
| Net loans charged-off to average loans, annualized | | | 1.18 | % | | | 2.82 | % | | | 0.94 | % | | | 1.82 | % | | | 0.98 | % | | | 1.65 | % | | | 0.63 | % |
| Non-accrual loans | | $ | 31,463 | | | $ | 26,782 | | | $ | 26,706 | | | $ | 18,453 | | | $ | 8,773 | | | $ | 31,463 | | | $ | 8,773 | |
| Other real estate owned | | $ | 14,206 | | | $ | 12,930 | | | $ | 11,309 | | | $ | 7,145 | | | $ | 5,561 | | | $ | 14,206 | | | $ | 5,561 | |
| Repossessed assets | | $ | 2,050 | | | $ | 1,473 | | | $ | 1,864 | | | $ | 1,680 | | | $ | 1,293 | | | $ | 2,050 | | | $ | 1,293 | |
| Non-performing assets (NPA) | | $ | 47,719 | | | $ | 41,185 | | | $ | 39,879 | | | $ | 27,278 | | | $ | 15,627 | | | $ | 47,719 | | | $ | 15,627 | |
| NPA to total assets | | | 3.97 | % | | | 3.33 | % | | | 3.13 | % | | | 2.14 | % | | | 1.22 | % | | | 3.97 | % | | | 1.22 | % |
| Loans 90 days past due | | $ | 3,377 | | | $ | 3,373 | | | $ | 5,413 | | | $ | 2,706 | | | $ | 2,250 | | | $ | 3,377 | | | $ | 2,250 | |
| NPA + loans 90 days past due to total assets | | | 4.25 | % | | | 3.60 | % | | | 3.55 | % | | | 2.35 | % | | | 1.39 | % | | | 4.25 | % | | | 1.39 | % |
| Allowance for loan and lease losses to total loans | | | 2.66 | % | | | 1.99 | % | | | 2.02 | % | | | 1.72 | % | | | 1.31 | % | | | 2.66 | % | | | 1.31 | % |
| Allowance for loan and lease losses to NPA | | | 53.83 | % | | | 46.80 | % | | | 50.22 | % | | | 63.73 | % | | | 85.33 | % | | | 53.83 | % | | | 85.33 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Period End Balances: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 964,295 | | | $ | 968,493 | | | $ | 992,647 | | | $ | 1,011,584 | | | $ | 1,017,467 | | | $ | 964,295 | | | $ | 1,017,467 | |
| Intangible assets | | $ | 2,012 | | | $ | 29,295 | | | $ | 29,425 | | | $ | 29,560 | | | $ | 29,748 | | | $ | 2,012 | | | $ | 29,748 | |
| Assets | | $ | 1,202,908 | | | $ | 1,238,393 | | | $ | 1,274,385 | | | $ | 1,276,227 | | | $ | 1,282,013 | | | $ | 1,202,908 | | | $ | 1,282,013 | |
| Deposits | | $ | 1,019,287 | | | $ | 1,033,046 | | | $ | 1,066,395 | | | $ | 1,076,286 | | | $ | 976,520 | | | $ | 1,019,287 | | | $ | 976,520 | |
| Common stockholders' equity | | $ | 113,941 | | | $ | 141,305 | | | $ | 143,911 | | | $ | 144,244 | | | $ | 148,531 | | | $ | 113,941 | | | $ | 148,531 | |
| Total stockholders' equity | | $ | 145,189 | | | $ | 172,463 | | | $ | 174,982 | | | $ | 144,244 | | | $ | 148,531 | | | $ | 145,189 | | | $ | 148,531 | |
| Common stock market capitalization | | $ | 63,209 | | | $ | 62,388 | | | $ | 55,335 | | | $ | 75,860 | | | $ | 120,194 | | | $ | 63,209 | | | $ | 120,194 | |
| Full-time equivalent employees | | | 348 | | | | 353 | | | | 361 | | | | 361 | | | | 365 | | | | 348 | | | | 365 | |
| Common shares outstanding | | | 16,418 | | | | 16,418 | | | | 16,420 | | | | 16,420 | | | | 16,420 | | | | 16,418 | | | | 16,420 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average Balances: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 966,677 | | | $ | 984,210 | | | $ | 999,954 | | | $ | 1,011,727 | | | $ | 1,011,609 | | | $ | 983,492 | | | $ | 992,563 | |
| Intangible assets | | $ | 28,941 | | | $ | 29,365 | | | $ | 29,498 | | | $ | 29,677 | | | $ | 29,830 | | | $ | 29,266 | | | $ | 30,039 | |
| Earning assets | | $ | 1,115,542 | | | $ | 1,142,338 | | | $ | 1,168,135 | | | $ | 1,150,799 | | | $ | 1,146,650 | | | $ | 1,144,254 | | | $ | 1,127,030 | |
| Assets | | $ | 1,231,926 | | | $ | 1,258,363 | | | $ | 1,286,371 | | | $ | 1,274,674 | | | $ | 1,275,353 | | | $ | 1,258,687 | | | $ | 1,253,052 | |
| Deposits | | $ | 1,024,105 | | | $ | 1,047,865 | | | $ | 1,075,316 | | | $ | 1,046,970 | | | $ | 950,473 | | | $ | 1,048,908 | | | $ | 926,800 | |
| Common stockholders' equity | | $ | 141,600 | | | $ | 144,476 | | | $ | 145,588 | | | $ | 147,499 | | | $ | 148,824 | | | $ | 143,873 | | | $ | 149,040 | |
| Total stockholders' equity | | $ | 172,779 | | | $ | 175,568 | | | $ | 172,815 | | | $ | 147,499 | | | $ | 148,824 | | | $ | 173,720 | | | $ | 149,040 | |
| Common shares outstanding, basic - wtd | | | 15,543 | | | | 15,503 | | | | 15,573 | | | | 15,817 | | | | 16,065 | | | | 15,539 | | | | 16,087 | |
| Common shares outstanding, diluted - wtd | | | 15,543 | | | | 15,503 | | | | 15,573 | | | | 15,859 | | | | 16,159 | | | | 15,539 | | | | 16,243 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) These amounts and ratios are calculated using net operating income (net of tax) which excludes certain non-recurring items. Since these items and their impact on First Security's performance are difficult to predict, management believes presentation 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 business. Refer to the following non-GAAP reconciliation table for a detail of the non-recurring items. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(2) Core earnings measures total revenue and noninterest expense excluding the goodwill impairment. The amount excludes provision for loan and lease losses, income taxes (benefits) and preferred stock dividends and accretion of preferred stock from net income available to common shareholders. Management believes presentation of core earnings provides useful supplemental information that is important for a proper understanding of the operating results of First Security's business. Refer to the following non-GAAP reconciliation table for detail of the excluded items. |
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(3) In accordance with SNL Financial practice, the core efficiency ratio is calculated on a fully tax equivalent basis excluding non-recurring items (see footnote (1) and non-GAAP reconciliation table) and 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) |
| | | | | | | | | | | | | | | | | | | | | |
| | 3rd Quarter
2009 | | | 2nd Quarter
2009 | | | 1st Quarter
2009 | | | 4th Quarter
2008 | | | 3rd Quarter
2008 | | | Year-to-Date
September 30,
2009 | | | Year-to-Date
September 30,
2008 | |
| | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | -9.30 | % | | | -0.61 | % | | | -0.40 | % | | | -1.04 | % | | | 0.26 | % | | | -3.37 | % | | | 0.50 | % |
| Effect of intangible assets | | | -0.22 | % | | | -0.01 | % | | | -0.01 | % | | | -0.02 | % | | | 0.01 | % | | | -0.08 | % | | | 0.01 | % |
| Return on average tangible assets | | | -9.52 | % | | | -0.62 | % | | | -0.41 | % | | | -1.06 | % | | | 0.27 | % | | | -3.45 | % | | | 0.51 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Return on average common equity | | | -80.88 | % | | | -5.28 | % | | | -3.57 | % | | | -8.98 | % | | | 2.22 | % | | | -29.51 | % | | | 4.18 | % |
| Effect of intangible assets | | | -20.78 | % | | | -1.35 | % | | | -0.91 | % | | | -2.26 | % | | | 0.56 | % | | | -7.53 | % | | | 1.06 | % |
| Return on average common tangible equity | | | -101.66 | % | | | -6.63 | % | | | -4.48 | % | | | -11.24 | % | | | 2.78 | % | | | -37.04 | % | | | 5.24 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Total equity to total assets | | | 12.07 | % | | | 13.93 | % | | | 13.73 | % | | | 11.30 | % | | | 11.59 | % | | | 12.07 | % | | | 11.59 | % |
| Effect of intangible assets | | | -0.15 | % | | | -2.09 | % | | | -2.04 | % | | | -2.10 | % | | | -2.10 | % | | | -0.15 | % | | | -2.10 | % |
| Tangible equity to tangible assets | | | 11.92 | % | | | 11.84 | % | | | 11.69 | % | | | 9.20 | % | | | 9.49 | % | | | 11.92 | % | | | 9.49 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Efficiency ratio | | | 273.98 | % | | | 75.26 | % | | | 74.56 | % | | | 77.97 | % | | | 65.78 | % | | | 143.70 | % | | | 68.83 | % |
| Effect of non-recurring items | | | -196.88 | % | | | - | | | | - | | | | - | | | | - | | | | -68.11 | % | | | - | |
| Effect of non-cash items | | | -4.78 | % | | | -2.36 | % | | | -2.57 | % | | | -7.74 | % | | | -1.62 | % | | | -3.18 | % | | | -1.45 | % |
| Effect of net interest income, tax equivalent adjustment | | | -1.19 | % | | | -1.26 | % | | | -1.30 | % | | | -1.25 | % | | | -1.00 | % | | | -1.25 | % | | | -1.06 | % |
| Core efficiency ratio | | | 71.13 | % | | | 71.64 | % | | | 70.69 | % | | | 68.98 | % | | | 63.16 | % | | | 71.16 | % | | | 66.32 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Non-interest expense | | $ | 37,363 | | | $ | 9,892 | | | $ | 9,460 | | | $ | 10,350 | | | $ | 9,705 | | | $ | 56,715 | | | $ | 30,032 | |
Effect of impairment of goodwill | | | (27,156 | ) | | | - | | | | - | | | | - | | | | - | | | | (27,156 | ) | | | - | |
| Non-interest operating expense | | $ | 10,207 | | | $ | 9,892 | | | $ | 9,460 | | | $ | 10,350 | | | $ | 9,705 | | | $ | 29,559 | | | $ | 30,032 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net income | | $ | (28,631 | ) | | $ | (1,908 | ) | | $ | (1,300 | ) | | $ | (3,312 | ) | | $ | 826 | | | $ | (31,839 | ) | | $ | 4,673 | |
Effect of non-recurring expenses, net of tax | | | 24,762 | | | | - | | | | - | | | | - | | | | - | | | | 24,762 | | | | - | |
| Net operating income, net of tax | | | (3,869 | ) | | | (1,908 | ) | | | (1,300 | ) | | | (3,312 | ) | | | 826 | | | | (7,077 | ) | | | 4,673 | |
Effect of provision for loan and lease losses | | 9,280 | | | 6,196 | | | 4,993 | | | 8,662 | | | 3,960 | | | 20,469 | | | 7,091 | |
Effect of income tax (benefit) provision, excluding tax effect of goodwill impairment | | (2,483) | | | (1,536) | | | (913) | | | (2,425) | | | 262 | | | (4,932) | | | 1,838 | |
Effect of preferred stock dividends and discount accretion | | 502 | | | 500 | | | 448 | | | - | | | - | | | 1,450 | | | - | |
Core earnings | | $ 3,430 | | | $ 3,252 | | | $ 3,228 | | | $ 2,925 | | | $ 5,048 | | | $ 9,910 | | | $ 13,602 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total stockholders' equity | | $ | 145,189 | | | $ | 172,463 | | | $ | 174,982 | | | $ | 144,244 | | | $ | 148,531 | | | $ | 145,189 | | | $ | 148,531 | |
| Effect of preferred stock | | | (31,248 | ) | | | (31,158 | ) | | | (31,071 | ) | | | - | | | | - | | | | (31,248 | ) | | | - | |
| Common stockholders' equity | | $ | 113,941 | | | $ | 141,305 | | | $ | 143,911 | | | $ | 144,244 | | | $ | 148,531 | | | $ | 113,941 | | | $ | 148,531 | |
| | | | | | | | | | | | | | | | | | | | | |
| Average total stockholders' equity | | $ | 172,779 | | | $ | 175,568 | | | $ | 172,815 | | | $ | 147,499 | | | $ | 148,824 | | | $ | 173,720 | | | $ | 149,040 | |
| Effect of average preferred stock | | | (31,179 | ) | | | (31,092 | ) | | | (27,227 | ) | | | - | | | | - | | | | (29,847 | ) | | | - | |
| Average common stockholders' equity | | $ | 141,600 | | | $ | 144,476 | | | $ | 145,588 | | | $ | 147,499 | | | $ | 148,824 | | | $ | 143,873 | | | $ | 149,040 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Per Share Data | | | | | | | | | | | | | | | | | | | | | |
| Book value per common share | | $ | 6.94 | | | $ | 8.61 | | | $ | 8.76 | | | $ | 8.78 | | | $ | 9.05 | | | $ | 6.94 | | | $ | 9.05 | |
| Effect of intangible assets | | | (0.12 | ) | | | (1.79 | ) | | | (1.79 | ) | | | (1.80 | ) | | | (1.82 | ) | | | (0.12 | ) | | | (1.82 | ) |
| Tangible book value per common share | | $ | 6.82 | | | $ | 6.82 | | | $ | 6.97 | | | $ | 6.98 | | | $ | 7.23 | | | $ | 6.82 | | | $ | 7.23 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Supplemental Data | | (in thousands) |
| | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan and lease losses | | $ | 25,686 | | | $ | 19,275 | | | $ | 20,028 | | | $ | 17,385 | | | $ | 13,335 | | | $ | 25,686 | | | $ | 13,335 | |
| Net interest income, tax equivalent | | $ | 11,126 | | | $ | 10,729 | | | $ | 10,469 | | | $ | 10,841 | | | $ | 11,924 | | | $ | 32,325 | | | $ | 35,309 | |
| Impairment of goodwill | | $ | 27,156 | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 27,156 | | | $ | - | |
| Amortization of intangibles | | $ | 127 | | | $ | 129 | | | $ | 135 | | | $ | 188 | | | $ | 175 | | | $ | 391 | | | $ | 609 | |
| (Gain)/Loss on sales of available-for-sale securities, net | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | (146 | ) | | $ | - | | | $ | (146 | ) |
| Gain on sales of foreclosed and repossessed property, leased equipment, premises and equipment and loans | | $ | (70 | ) | | $ | (146 | ) | | $ | (70 | ) | | $ | (72 | ) | | $ | (169 | ) | | $ | (286 | ) | | $ | (479 | ) |
| Losses on sales of foreclosed and repossessed property and premises and equipment | | $ | 149 | | | $ | 82 | | | $ | 59 | | | $ | 149 | | | $ | 158 | | | $ | 290 | | | $ | 200 | |
| Write-downs on foreclosed and repossessed property and other assets | | $ | 120 | | | $ | 205 | | | $ | 182 | | | $ | 740 | | | $ | 109 | | | $ | 507 | | | $ | 245 | |
| Mortgage loan and related fees | | $ | 385 | | | $ | 199 | | | $ | 242 | | | $ | 172 | | | $ | 335 | | | $ | 826 | | | $ | 1,271 | |
| | | | | | | | | | | | | | | | | | | | | |
| Loans by Type | | | | | | | | | | | | | | | | | | | | | |
Loans secured by real estate - | | | | | | | | | | | | | | | | | | | | | |
| Residential 1-4 family | | $ | 284,811 | | | $ | 288,836 | | | $ | 294,314 | | | $ | 296,454 | | | $ | 284,256 | | | $ | 284,811 | | | $ | 284,256 | |
| Commercial | | | 233,692 | | | | 225,790 | | | | 223,759 | | | | 234,630 | | | | 230,134 | | | | 233,692 | | | | 230,134 | |
| Construction | | | 176,570 | | | | 183,623 | | | | 190,581 | | | | 194,603 | | | | 206,453 | | | | 176,570 | | | | 206,453 | |
| Multi-family and Farmland | | | 37,461 | | | | 33,847 | | | | 36,541 | | | | 34,273 | | | | 33,114 | | | | 37,461 | | | | 33,114 | |
| Total loans secured by real estate | | | 732,534 | | | | 732,096 | | | | 745,195 | | | | 759,960 | | | | 753,957 | | | | 732,534 | | | | 753,957 | |
| Commercial loans | | | 148,473 | | | | 150,472 | | | | 162,534 | | | | 157,906 | | | | 166,024 | | | | 148,473 | | | | 166,024 | |
| Consumer installment loans | | | 51,866 | | | | 54,261 | | | | 53,406 | | | | 58,296 | | | | 61,400 | | | | 51,866 | | | | 61,400 | |
| Leases, net of unearned income | | | 24,679 | | | | 26,784 | | | | 29,117 | | | | 30,873 | | | | 33,663 | | | | 24,679 | | | | 33,663 | |
| Other | | | 6,743 | | | | 4,880 | | | | 2,395 | | | | 4,549 | | | | 2,423 | | | | 6,743 | | | | 2,423 | |
| Total loans | | $ | 964,295 | | | $ | 968,493 | | | $ | 992,647 | | | $ | 1,011,584 | | | $ | 1,017,467 | | | $ | 964,295 | | | $ | 1,017,467 | |
| Supplemental Data (continued) |
| Asset Quality Information |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | 3rd Quarter
2009 | | 3rd Quarter
2009 | | 2nd Quarter
2009 | | 2nd Quarter
2009 | | 1st Quarter
2009 | | 1st Quarter
2009 | | Year-to-Date
2009 | | Year-to-Date
2009 |
| | (in thousands) | | (units) | | (in thousands) | | (units) | | (in thousands) | | (units) | | (in thousands) | | (units) |
| Non-Accrual Loans and Leases - Activity | | | | | | | | | | | |
| Beginning Balance | | $ | 26,782 | | | 91 | | $ | 26,706 | | | 70 | | $ | 18,453 | | | 57 | | $ | 18,453 | | | 57 |
| Additions | | | 11,081 | | | | | | 9,643 | | | | | | 12,589 | | | | | | 33,313 | | | |
| Reductions | | | (6,400) | | | | | | (9,567 | ) | | | | | (4,336 | ) | | | | | (20,303 | ) | | |
| Ending Balance | | $ | 31,463 | | | 106 | | $ | 26,782 | | | 91 | | $ | 26,706 | | | 70 | | $ | 31,463 | | | 106 |
| | | | | | | | | | | | | | | | |
| Non-Accrual Loans and Leases - Classification | | | | | | | | | | |
| Construction/Development Loans | | $ | 10,583 | | | 15 | | $ | 8,706 | | | 9 | | $ | 9,040 | | | 12 | | $ | 10,583 | | | 15 |
| Residential Real Estate Loans | | | 3,758 | | | 32 | | | 3,713 | | | 30 | | | 2,179 | | | 18 | | | 3,758 | | | 32 |
| Commercial Real Estate Loans | | | 2,162 | | | 11 | | | 4,595 | | | 16 | | | 3,575 | | | 12 | | | 2,162 | | | 11 |
| Commercial & Industrial Loans | | | 8,432 | | | 25 | | | 3,160 | | | 15 | | | 6,904 | | | 20 | | | 8,432 | | | 25 |
| Commercial Leases | | | 5,064 | | | 21 | | | 5,126 | | | 16 | | | 3,523 | | | 4 | | | 5,064 | | | 21 |
| Consumer and Other Loans | | | 1,464 | | | 2 | | | 1,482 | | | 5 | | | 1,485 | | | 4 | | | 1,464 | | | 2 |
| Total | | $ | 31,463 | | | 106 | | $ | 26,782 | | | 91 | | $ | 26,706 | | | 70 | | $ | 31,463 | | | 106 |
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| Other Real Estate Owned - Activity | | | | | | | | | | | | | |
| Beginning Balance | | $ | 12,930 | | | 61 | | $ | 11,309 | | | 49 | | $ | 7,145 | | | 51 | | $ | 7,145 | | | 51 |
| Additions | | | 5,599 | | | | | | 4,522 | | | | | | 5,111 | | | | | | 15,232 | | | |
| Reductions | | | (4,323 | ) | | | | | (2,901 | ) | | | | | (947 | ) | | | | | (8,171 | ) | | |
| Ending Balance | | $ | 14,206 | | | 68 | | $ | 12,930 | | | 61 | | $ | 11,309 | | | 49 | | $ | 14,206 | | | 68 |
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| Other Real Estate Owned - Classification | | | | | | | | | | | |
| Construction/Development Loans | | $ | 6,339 | | | 31 | | $ | 7,187 | | | 38 | | $ | 5,484 | | | 30 | | $ | 6,339 | | | 31 |
| Residential Real Estate Loans | | | 3,688 | | | 25 | | | 2,657 | | | 14 | | | 2,598 | | | 14 | | | 3,688 | | | 25 |
| Commercial Real Estate Loans | | | 4,179 | | | 12 | | | 3,086 | | | 9 | | | 3,227 | | | 5 | | | 4,179 | | | 12 |
| Total | | $ | 14,206 | | | 68 | | $ | 12,930 | | | 61 | | $ | 11,309 | | | 49 | | $ | 14,206 | | | 68 |
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| Loans 90 Days Past Due - Classification | | | | | | | | | | | |
| Construction/Development Loans | | $ | 532 | | | 3 | | $ | 94 | | | 4 | | $ | 481 | | | 7 | | $ | 532 | | | 3 |
| Residential Real Estate Loans | | | 1,145 | | | 19 | | | 795 | | | 12 | | | 765 | | | 13 | | | 1,145 | | | 19 |
| Commercial Real Estate Loans | | | 108 | | | 2 | | | 41 | | | 1 | | | 2,898 | | | 8 | | | 108 | | | 2 |
| Commercial & Industrial Loans | | | 67 | | | 4 | | | 59 | | | 6 | | | 673 | | | 12 | | | 67 | | | 4 |
| Commercial Leases | | | 1,307 | | | 36 | | | 2,308 | | | 24 | | | 478 | | | 13 | | | 1,307 | | | 36 |
| Consumer and Other Loans | | | 218 | | | 19 | | | 76 | | | 10 | | | 118 | | | 20 | | | 218 | | | 19 |
| Total | | $ | 3,377 | | | 83 | | $ | 3,373 | | | 57 | | $ | 5,413 | | | 73 | | $ | 3,377 | | | 83 |
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| Repossessed Assets - Activity | | | | | | | | | | | | | | |
| Beginning Balance | | $ | 1,473 | | | 56 | | $ | 1,864 | | | 63 | | $ | 1,680 | | | 56 | | $ | 1,680 | | | 56 |
| Additions | | | 1,978 | | | | | | 810 | | | | | | 1,318 | | | | | | 4,106 | | | |
| Reductions | | | (1,401 | ) | | | | | (1,201 | ) | | | | | (1,134 | ) | | | | | (3,736 | ) | | |
| Ending Balance | | $ | 2,050 | | | 163 | | $ | 1,473 | | | 56 | | $ | 1,864 | | | 63 | | $ | 2,050 | | | 163 |
CONTACT:
First Security Group, Inc.
Rodger B. Holley, Chairman, CEO and President, 423-308-2080
rholley@FSGBank.com
or
William L. (Chip) Lusk, Jr., EVP & CFO, 423-308-2070
clusk@FSGBank.com
