Filed by Atlantic Capital Bancshares, Inc.
pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: First Security Group, Inc.
Commission File No.: 000-49747
Date: March 26, 2015
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Atlantic Capital Bancshares, Inc. Merger with First Security Group, Inc.
March 25, 2015
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FORWARD-LOOKING STATEMENTS
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which Congress passed in an effort to encourage companies to provide information about their anticipated future financial performance. This act protects a company from unwarranted litigation if actual results are different from management expectations. This presentation reflects the current views and estimates of the management of Atlantic Capital and First Security. These forward-looking statements are subject to a number of factors and uncertainties which could cause Atlantic Capital’s, First Security’s or the combined company’s actual results and experience to differ from the anticipated results and expectations expressed in such forward-looking statements, and such differences may be material. Forward-looking statements speak only as of the date they are made and neither Atlantic Capital nor First Security assumes any duty to update forward-looking statements. In addition to factors previously disclosed in First Security’s reports filed with the SEC and those identified elsewhere in this presentation, these forward-looking statements include, but are not limited to, statements about (i) the expected benefits of the transaction between Atlantic Capital and First Security and between Atlantic Capital Bank and FSGBank, including future financial and operating results, cost savings, enhanced revenues and the expected market position of the combined company that may be realized from the transaction, and (ii) Atlantic Capital’s and First Security’s plans, objectives, expectations and intentions and other statements contained in this presentation that are not historical facts. Other statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “targets,” “projects” or words of similar meaning generally are intended to identify forward-looking statements. These statements are based upon the current beliefs and expectations of Atlantic Capital’s and First Security’s management and are inherently subject to significant business, economic and competitive risks and uncertainties, many of which are beyond their respective control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ from those indicated or implied in the forward-looking statements and such differences may be material.
The following risks, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) the businesses of Atlantic Capital and First Security may not integrate successfully or the integration may be more difficult, time-consuming or costly than expected; (2) the expected growth opportunities and cost savings from the transaction may not be fully realized or may take longer to realize than expected; (3) revenues following the transaction may be lower than expected as a result of losses of customers or other reasons, including issues arising in connection with integration of the two banks; (4) deposit attrition, operating costs, customer loss and business disruption following the transaction, including difficulties in maintaining relationships with employees, may be greater than expected; (5) governmental approvals of the transaction may not be obtained on the proposed terms or expected timeframe; (6) the terms of the proposed transaction may need to be modified to satisfy such approvals or conditions; (7) Atlantic Capital’s shareholders or First Security’s stockholders may fail to approve the transaction; (8) reputational risks and the reaction of the companies’ customers to the transaction; (9) diversion of management time on merger related issues; (10) changes in asset quality and credit risk; (11) the cost and availability of capital; (12) customer acceptance of the combined company’s products and services; (13) customer borrowing, repayment, investment and deposit practices; (14) the introduction, withdrawal, success and timing of business initiatives; (15) the impact, extent, and timing of technological changes; (16) catastrophic events in our geographic area; (17) a weakening of the economies in which the combined company will conduct operations may adversely affect its operating results; (18) the U.S. legal and regulatory framework, including those associated with the Dodd Frank Wall Street Reform and Consumer Protection Act, could adversely affect the operating results of the combined company; (19) the interest rate environment may compress margins and adversely affect net interest income; and (20) competition from other financial services companies in the companies’ markets could adversely affect operations. Additional factors that could cause First Security’s results to differ materially from those described in the forward-looking statements can be found in First Security’s reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the SEC and available at the SEC’s website (www.sec.gov). All subsequent written and oral forward-looking statements concerning Atlantic Capital, First Security or the proposed merger or other matters and attributable to Atlantic Capital, First Security or any person acting on either of their behalf are expressly qualified in their entirety by the cautionary statements above. Atlantic Capital and First Security do not undertake any obligation to update any forward-looking statement, whether written or oral, to reflect circumstances or events that occur after the date the forward-looking statements are made.
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FORWARD-LOOKING STATEMENTS (CONTINUED)
ADDITIONAL INFORMATION ABOUT THE ATLANTIC CAPITAL/FIRST SECURITY MERGER TRANSACTION
This presentation relates to the proposed merger transaction involving Atlantic Capital and First Security. In connection with the proposed merger, Atlantic Capital and First Security will file a registration statement on Form S-4 that will include a joint proxy statement/prospectus, and other relevant documents concerning the merger with the Securities and Exchange Commission (the “SEC”). This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE IN THE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT ATLANTIC CAPITAL, FIRST SECURITY AND THE PROPOSED MERGER.
When available, the joint proxy statement/prospectus will be delivered to shareholders of Atlantic Capital and stockholders of First Security. Investors will also be able to obtain copies of the joint proxy statement/prospectus and other relevant documents (when they become available) free of charge at the SEC’s website (www.sec.gov). Copies of documents filed with the SEC by Atlantic Capital will be available free of charge from Carol Tiarsmith, Executive Vice President and Chief Financial Officer, Atlantic Capital Bancshares, Inc., 3525 Piedmont Road, NE, Suite 500, Atlanta, Georgia 30305, telephone: (404) 995-6050. Documents filed with the SEC by First Security will be available free of charge from First Security by contacting John R. Haddock, Executive Vice President and Chief Financial Officer, First Security Group, Inc., 531 Broad Street, Chattanooga, Tennessee, telephone: (423) 266-2000.
Atlantic Capital, First Security and certain of their directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of Atlantic Capital and the stockholders of First Security in connection with the proposed merger. Information about the directors and executive officers of Atlantic Capital will be included in the joint proxy statement/prospectus for the proposed transaction. Information about the directors and executive officers of First Security is included in the proxy statement for its 2014 annual meeting of stockholders, which was filed with the SEC on April 23, 2014. Additional information regarding the interests of such participants and other persons who may be deemed participants in the transaction will be included in the joint proxy statement/prospectus and the other relevant documents filed with the SEC when they become available.
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Company Snapshots
Corporate Overview
Financial Scale(1)
Business Strengths
Headquartered in Atlanta, GA • Headquartered in Chattanooga, TN
Privately held • NASDAQ listed (FSGI)
Single office location • 26 offices
Corporate and private banking • Small business and retail banking
Atlanta focus • Chattanooga and Knoxville focus
$ 1.3 billion in assets $ 1.1 billion in assets
$ 1.1 billion in deposits $ 906 million in deposits
$ 1.0 billion in total loans $ 736 million total loans
Middle market corporate banking • Small business lending
Commercial real estate finance • Credit tenant loans
SBA / Franchise lending • Mortgage banking
Private banking • Trust and wealth management
Treasury services • Retail deposit channel
Combined
Headquartered in Atlanta, GA
Seeking NASDAQ listing (ACBI)
27 offices (prior to potential consolidations / sales)
Expanded footprint along I-75
$2.4 billion in assets
$2.0 billion in deposits
$1.7 billion total loans
Broad commercial platform
Significant fee income businesses
Diversified funding mix
(1)Combined results do not include purchase accounting adjustments Financial information as of December 31, 2014
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Strategic Rationale
Complementary
Business Strengths
Attractive Southeastern
Regional Footprint
Strong Risk Management
and Leadership Teams
Compelling Financial
Results
Atlantic Capital’s Strengths: C&I, CRE and Private Banking; Corporate Treasury and Private
Banking Deposits
First Security’s Strengths: Small Business and Specialty Commercial Lending; Small Business
and Retail Deposit Channel
Complementary interest rate risk positions – combined company well situated for rising rate
environment
Contiguous market expansion along the I-75 corridor
27 offices combined providing core deposit funding
Atlanta: High density of small businesses and commercial enterprises
Chattanooga/Knoxville: Diversified manufacturing and service economies
Atlantic Capital has finished past 5 years with NPAs/Assets less than 1%
FSGI successfully reduced NPAs/Assets to less than 1% at 2014 year end
Highly talented management team combines commercial, small business and retail expertise
Senior management from both firms bring complementary expertise and market knowledge
Merger plan ensures management continuity
Enhances both banks’ business plans to expand and diversify revenue opportunities
Significant cost saving opportunities provide basis for substantial EPS accretion
Retains a significant portion of FSGI NOLs
Revenue synergy opportunities with increased scale and complementary businesses
Strong regulatory capital ratios
Sustains robust loan origination trends and opportunities in all markets
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Summary of Transaction Terms
Transaction Atlantic Capital Bancshares, Inc. (“ACBI”) merger with First Security Group, Inc. (“FSGI”)
Holding Company Merger FSGI to merge with and into ACBI to create Atlantic Capital Bancshares, Inc.
Bank Merger Atlantic Capital Bank to merge with and into FSGBank N.A.
Transaction Value Approximately $160 million in the aggregate
60% common stock / 40% cash;
Consideration Mix FSGI shareholders may elect stock based on a fixed exchange ratio of 0.188 shares of ACBI
common stock for each FSGI share or cash equal to $2.35 per share (ACBI plans to register its
shares with the SEC and seek a NASDAQ listing concurrent with the closing of the transaction)
$25 million common equity private placement at $12.60 per ACBI share from Trident IV funds
Source of Financing managed by Stone Point Capital LLC
Remaining proceeds to come from cash and alternative sources of debt financing
Treatment of Options Existing FSGI options to be exchanged for ACBI options
Pro Forma Ownership 53.8% ACBI / 32.7% FSGI / 13.5% Stone Point*
Estimated 23 million pro forma shares outstanding at close
*Stone Point Capital’s pro forma ownership includes 1.125 million shares currently owned plus 1.984 million shares to be issued
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Key Operational Terms
Chief Executive Officer and Director: Douglas Williams (ACBI)
Leadership
President, Chief Operating Officer and Director: Michael Kramer (FSGI)
8 Atlantic Capital / 5 First Security
Board of Directors
Chairman: Walter M. Deriso, Jr. (ACBI)
Atlanta, GA (Holding Company)
Headquarters Chattanooga, TN (Bank)
Holding Company: Atlantic Capital Bancshares, Inc.
Company Brands Bank: Atlantic Capital Bank, N.A.
Atlantic Capital Bank and FSGBank will retain their brands in their respective legacy markets
Required Approvals Customary regulatory and shareholder approvals of both Atlantic Capital and FSGI shareholders
Target Closing Expected late Q3 / early Q4 2015
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Attractive Market Demographics
Creates a leading middle market commercial bank operating along the I-75 corridor
Atlanta-Sandy Springs-Roswell, GA MSA
Total Population 2014: Approximately 5.6 million
2014-2019E Population Growth: 6.4% projected
Median HH Income 2014: $52,533
Total Deposits in Market: Approximately $130 billion
Chattanooga, TN-GA MSA
Total Population 2014: Approximately 544 thousand
2014-2019E Population Growth: 4.0% projected
Median HH Income 2014: $41,704
Total Deposits in Market: Approximately $8.5 billion
Knoxville, TN MSA
Total Population 2014: Approximately 855 thousand
2014-2019E Population Growth: 3.1% projected
Median HH Income 2014: $44,405
Total Deposits in Market: Approximately $14.7 billion
Atlantic Capital First Security
Source: Nielsen, SNL Financial
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Complementary Strategic Attributes
Private
Banking
Residential mortgage
Wealth management
Trust services
Specialty
Lending
SBA loans
Franchise loans
Credit tenant loans
Community
Business Banking
Small business lending
Small business office
network
Mobile banking
capabilities
Commercial
Banking
Regional middle market
corporate banking
Commercial real estate
Selected capital markets
Treasury services
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Attractive Deposit Mix
Atlantic Capital
Brokered Deposits
Jumbo 9%
Time
2%
Trans
37%
MMDAs
52%
First Security
Brokered Deposits
12%
Jumbo Trans
Time 34%
13%
Retail Time
17%
MMDAs
24%
Combined
Brokered Deposits
10%
Jumbo
Time
7% Trans
36%
Retail Time
8%
MMDAs
39%
$ in thousands% of
Amount Total
Transactional $412,055 37%
MMDAs 575,207 52
Retail Time 304 0
Jumbo Time 16,129 2
Brokered Deposits 104,699 9
Total $1,108,394 100 %
Cost of Deposits 0.30%
2yr Core Deposit CAGR 3%
$ in thousands% of
Amount Total
Transactional $ 312,705 34 %
MMDAs 217,006 24
Retail Time 151,089 17
Jumbo Time 119,514 13
Brokered Deposits 105,299 12
Total $ 905,613 100 %
Cost of Deposits 0.53%
2yr Core Deposit CAGR 10%
$ in thousands% of
Amount Total
Transactional $724,760 36%
MMDAs 792,213 39
Retail Time 151,393 8
Jumbo Time 135,643 7
Brokered Deposits 209,998 10
Total $2,014,007 100 %
Cost of Deposits 0.40%
2yr Core Deposit CAGR 6%
Note: Data as of December 31, 2014 Source: SNL Financial
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Diversified Loan Mix
Atlantic Capital
Cons. & 1-4 Fam
Other 3% Multifam
13% 9%
Comm RE
13%
C&I
35%
Owner
Occupied
19%
C&D
8%
First Security
Cons. & Other
C&I 4%
10% 1-4 Fam
C&D 25%
6%
Multifam
2%
Owner
Occupied
23%
Comm RE
30%
Combined
Cons. & Other 1-4 Fam
9% 12%
Multifam
6%
C&I
25%
Comm RE
20%
C&D
8%
Owner
Occupied
20%
$ in thousands% of
Amount Total
1-4 Family $29,736 3%
Multifamily 96,485 9
Comm RE 138,816 13
Owner Occupied 193,892 19
C&D 82,345 8
C&I 364,211 35
Consumer & Other 134,227 13
Total $1,039,712 100 %
Portfolio Yield 3.55%
NPAs/Assets 0.62%
2yr CAGR 18%
$ in thousands% of
Amount Total
1-4 Family $ 183,819 25 %
Multifamily 14,938 2
Comm RE 220,529 30
Owner Occupied 166,756 23
C&D 47,831 6
C&I 74,175 10
Consumer & Other 27,816 4
Total $ 735,864 100 %
Portfolio Yield 4.57%
NPAs/Assets 0.89%
2yr CAGR 14%
$ in thousands% of
Amount Total
1-4 Family $213,555 12%
Multifamily 111,423 6
Comm RE 359,345 20
Owner Occupied 360,648 20
C&D 130,176 8
C&I 438,387 25
Consumer & Other 162,043 9
Total $1,775,577 100 %
Portfolio Yield 3.97%
NPAs/Assets 0.74%
2yr CAGR 16%
Note: Data as of December 31, 2014; NPAs include performing TDRs Source: SNL Financial
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Comprehensive Due Diligence
Reciprocal, merger-of-equals approach to due diligence
• Reviewed credit and rate marks
Financial Due Diligence • Detailed analysis of cost savings and one-time merger costs
• Analyzed impact of various interest rate environments
• Comprehensive, mutual due diligence process covering core systems, legal, accounting, tax
Operational Due and HR functions
Diligence • Review of IT and infrastructure
• Branch consolidation/divestiture opportunities identified
• Thorough credit due diligence review conducted by both internal teams and third parties
o Thorough review of “pass” portfolio including CRE, C&I, Owner-Occupied and Consumer
loans
Credit Due Diligence o Review of all “non-pass” credits in excess of $300,000
• In-depth review of underwriting methodology and practices
• Mutual agreement on prospective underwriting guidelines
Tax Due Diligence • Detailed analysis of deferred tax assets and potential IRC Section 382 limitations
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Pro Forma Financial Results
Key Merger Assumptions
Earnings estimates based on combined management discussions
Cost savings estimated to equal approximately 15% of
FSGI’s non-interest expense base o Approximately 75% realized in 2016
One-time merger-related expenses of approximately $10.0 million (6.3% of total transaction value)
Credit and interest rate marks estimated to total approximately $3.5 million net of $9.7 million reserve
Deferred tax asset preservation currently estimated to total $49.0 million(1)
New common issued (ACBI) $12.60 per share
Subordinated debt issued by ACBI up to $38 million
Revenue synergies and additional cost savings identified but not incorporated
Projected closing date September 30, 2015
Estimated Pro Forma Financial Results
Estimated Pro Forma 2016 EPS $0.95—$1.10
Estimated TBV at close $10.60 per share
TBV dilution earn back estimated at approximately 5 years
Pro Forma balance sheet o $2.7 billion assets o $1.9 billion net loans o $2.2 billion deposits o $264 million equity
Pro Forma capital ratios – consolidated o 9.2% TCE/TA o 8.0% Leverage ratio o 11.0% Total risk based capital
Pro Forma capital ratios – bank o 10.2% TCE/TA o 9.3% Leverage ratio
Pro Forma shares outstanding – approximately 23 million
(1)Based on the highest IRS published applicable tax exempt rate as of March 1, 2015 of 2.67%. The value of the deferred tax asset is subject to future potential adjustments.
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Strategic Priorities
• Integrate operating platforms and product capabilities
Complete Integration • Divest non-strategic offices in east Tennessee; leverage combined technology and product
and Realize Cost capabilities for greater efficiency and better service
Savings and Revenue • Add middle market corporate banking effort in east Tennessee
Synergies • Begin focused small business effort in Atlanta with limited office footprint
• Expand mortgage and trust/wealth management effort to Atlanta
• Articulate corporate mission, values, and cultural aspirations
Integrate Organizations • Choose leaders committed to our mission who demonstrate our values and reach for our
aspirations
with Common Culture
• Use our talent appropriately and efficiently to build an organization which encourages people
to grow and perform at a high level
Focus on Key Business
• Middle market treasury management opportunities in Tennessee markets
Combination
• Small business, wealth management and mortgage in Atlanta
Opportunities
Established Performance • 1.0% ROAA within 24 months
Targets • 12.0% ROATCE within 24 months
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Summary
• Atlantic Capital’s Strengths: C&I, CRE and Private Banking; Corporate Treasury and Private
Banking Deposits
Complementary • First Security’s Strengths: Small Business and Specialty Commercial Lending; Small Business
Business Strengths and Retail Deposit Channel
• Complementary interest rate risk positions – combined company well situated for rising rate
environment
• Contiguous market expansion along the I-75 corridor
Attractive Southeastern • 27 offices combined providing core deposit funding
Regional Footprint • Atlanta: High density of small businesses and commercial enterprises
• Chattanooga/Knoxville: Diversified manufacturing and service economies
• Atlantic Capital has finished past 5 years with NPAs/Assets less than 1%
Strong Risk Management • FSGI successfully reduced NPAs/Assets to less than 1% at 2014 year end
• Highly talented management team combines commercial, small business and retail expertise
and Leadership Teams
• Senior management from both firms bring complementary expertise and market knowledge
• Merger plan ensures management continuity
• Enhances both banks’ business plans to expand and diversify revenue opportunities
• Significant cost saving opportunities provide basis for substantial EPS accretion
Compelling Financial • Retains a significant portion of FSGI NOLs
• Revenue synergy opportunities with increased scale and complementary businesses
Results
• Strong regulatory capital ratios
• Sustains robust loan origination trends and opportunities in all markets
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APPENDIX
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Management Biographies
Name and Title Age Experience
Walter M. “Sonny” Deriso, Jr. 68 • Retired Vice Chairman of Synovus Financial Corp. in Columbus, Georgia.
Chairman (Non-Executive) • Former President of Security Bank and Trust Company of Albany, a Synovus bank
• Former Partner in the law firm of Divine, Wilkin, Deriso, Raulerson & Fields
• Former Chairman of the Georgia Bankers Association
• Current Member of the Board of Trustees of Emory University, member of the Board of Directors of Post
Properties, Chairman of the Board of the Georgia Regional Transportation Authority (GRTA), Chairman
of The Foundation of the Methodist Children’s Home of the South Georgia Conference and member of
the Board of Directors of the Georgia Chamber of Commerce
Douglas Williams 57 • Chief Executive Officer of Atlantic Capital since its inception
Chief Executive Officer • Former Managing Director and Head of Wachovia Corporation’s International Corporate Finance Group
• Held numerous roles within Wachovia, including Executive Vice President and Head of the Global
Corporate Banking Division; Chief Risk Officer for all corporate, institutional, and wholesale banking
activities; Executive Vice President and Co-Head of Wachovia’s Capital Markets Division and Executive
Vice President and Head of Wachovia’s US Corporate Banking Division
• Chairman of the Community Depository Institutions Advisory Council (CDIAC) of the Federal Reserve
Bank of Atlanta and its representative to the CDIAC of the Federal Reserve Board of Governors
• Serves on the Boards of the Metro Atlanta Chamber of Commerce, the Georgia Chamber of Commerce,
and the YMCA of Metropolitan Atlanta and the High Museum of Art and is a Member of the Buckhead
Coalition
Michael Kramer 57 • Chief Executive Officer and President of First Security since December and Chief Executive Officer of
President, FSGBank since 2011
Chief Operating Officer • Former Managing Director of Ridley Capital Group
• Former Director, Chief Executive Officer and President of Ohio Legacy Corporation
• Former Chief Operating Officer and Chief Technology Officer of Integra Bank Corporation
• Serves on the Boards of Chattanooga Chamber of Commerce, Chattanooga, United Way, The
Tennessee Bankers Association and the Chattanooga Young Life Committee
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ACBI Historical Balance Sheet
($ in thousands) 2011Y 2012Y 2013Y 2014Y
Assets
Cash & Due from Banks $ 10,851 $ 25,904 $ 29,545 $ 24,010
Interest Bearing Deposits 147,646 171,950 165,581 12,136
Cash & Cash Equivalents $ 158,497 $ 197,854 $ 195,126 $ 36,146
Securities Available-for-Sale 125,361 127,751 150,739 145,931
Securities Held-to-Maturity — —
Loans Held for Sale—64,353 8,026 -
Loans 700,562 746,392 808,976 1,039,713
Less: Allowance for Loan and Lease Losses 9,731 10,736 10,815 11,421
Net Loans $ 690,831 $ 735,656 $ 798,161 $ 1,028,292
Fed Funds 9,295 25,515 25,060 45,623
Premises and Equipment, net 2,293 3,662 2,422 1,868
Intangible Assets—32 36 782
Other Real Estate Owned 1,775 1,531 1,531 1,531
Other Assets 33,259 45,233 48,306 54,847
Total Assets $ 1,021,311 $ 1,201,587 $ 1,229,407 $ 1,315,020
Liabilities
Non-Interest-Bearing Demand $ 136,823 $ 166,627 $ 244,089 $ 319,961
Interest-Bearing Demand 737,557 859,184 837,079 786,021
Total Deposits $ 874,380 $ 1,025,811 $ 1,081,168 $ 1,105,982
Other Borrowings 17,912 37,634 7,837 56,517
Other Liabilities 7,601 10,057 9,166 11,694
Total Liabilities $ 899,893 $ 1,073,502 $ 1,098,171 $ 1,174,193
Stockholder’s Equity
Common Stock $ 13,261 $ 13,384 $ 13,438 $ 13,497
Paid-in Surplus 120,542 121,985 122,731 123,405
Retained Earnings / (Deficit)(13,286)(8,199)(3,056) 4,358
Accumulated Other Comprehensive Income 937 1,550(1,266) 609
Treasury Stock(36)(635)(611)(1,042)
Total Stockholder’s Equity $ 121,418 $ 128,085 $ 131,236 $ 140,827
Total Liabilities and Stockholder’s Equity $ 1,021,311 $ 1,201,587 $ 1,229,407 $ 1,315,020
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ACBI Historical Income Statement
($ in thousands) 2012 2013 2014 4Q 2014
Interest Income
Total Interest Income $ 30,933 $ 32,536 $ 36,541 $ 9,877
Interest Expense
Total Interest Expense $ 4,196 $ 3,616 $ 3,448 $ 890
Net Interest Income $ 26,737 $ 28,920 $ 33,093 $ 8,987
Loan Loss Provision(1,322) 246 487 18
Net Interest Income After Provision $ 28,059 $ 28,674 $ 32,606 $ 8,969
Non Interest Income
Service Charges on Deposit Accounts $ 759 $ 932 $ 1,165 $ 334
Gain on Sales of OREO & Other Assets(271) 500(8) -
Gain on Sale of Available for Sale Securities 27 167 59 15
Other 2,296 2,270 4,076 1,141
Total Non Interest Income $ 2,811 $ 3,869 $ 5,292 $ 1,490
Non Interest Expense
Salaries & Benefits $ 14,864 $ 17,318 $ 18,774 $ 5,108
Expense on Premises and Fixed Assets 1,838 1,893 2,036 503
Other 4,989 5,674 5,880 1,718
Total Non Interest Expense $ 21,691 $ 24,885 $ 26,690 $ 7,329
Operating Income $ 9,179 $ 7,658 $ 11,208 $ 3,130
Taxes 3,248 2,515 3,794 1,081
Net Income $ 5,931 $ 5,143 $ 7,414 $ 2,049
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Pro Forma Comparable Group Analysis – Southeast
Financial data as of or for the twelve months ended December 31, 2014
Market data as of March 24, 2015
Selected Major Exchange Southeast Banks with Total Assets $2.0 Billion—$5.0 Billion; NPAs / Assets < 2.0%
Market Information Balance Sheet LTM Profitability Asset Quality
Price / Tier 1 Total
Market% of 52- 2016E Total Loans / TCE / Lev. RBC Eff. NPAs / LLR /
Cap. wk high BV TBV EPS Assets Deposits TA Ratio Ratio ROAA ROAE NIM Ratio Assets (1) Loans
Company City, St. Ticker($mm)(%)(%)(%)(x)($mm)(%)(%)(%)(%)(%)(%)(%)(%)(%)(%)
TowneBank Portsmouth, VA TOWN 838 97.7 110 147 — 4,982 88.3 8.2 9.9 13.7 0.9 7.4 3.4 68.0 1.61 1.04
Simmons First National Corp. Pine Bluff, AR SFNC 1,325 98.4 162 219 12.8 4,643 70.9 8.1 8.8 14.5 0.8 8.1 4.5 70.0 1.28 1.05
Yadkin Financial Corporation Raleigh, NC YDKN 632 90.9 119 175 11.7 4,266 89.2 8.8 9.3 12.3 0.7 5.7 4.4 62.2 0.77 0.27
ServisFirst Bancshares Inc. Birmingham, AL SFBS 821 91.8 218 218 12.2 4,099 98.9 9.0 9.9 13.4 1.4 14.6 3.7 38.9 0.57 1.06
BNC Bancorp High Point, NC BNCN 585 94.4 149 190 10.6 4,073 90.5 7.7 8.4 12.5 0.8 9.1 4.6 58.8 1.54 0.98
CenterState Banks Davenport, FL CSFL 549 97.9 121 152 12.6 3,777 78.6 9.8 10.1 15.1 0.4 3.3 4.4 72.2 1.22 0.82
City Holding Co. Charleston, WV CHCO 722 96.8 184 227 14.2 3,462 92.3 9.3 9.9 14.2 1.6 13.4 4.0 53.2 1.34 0.76
Cardinal Financial Corp. McLean, VA CFNL 649 98.3 172 190 14.6 3,399 101.8 10.1 10.8 11.8 1.0 8.8 3.6 60.9 0.13 0.98
Seacoast Banking Corp. of FL Stuart, FL SBCF 463 98.2 148 166 17.0 3,093 75.4 9.1 10.3 16.3 0.2 2.2 3.2 81.3 1.75 0.93
Fidelity Southern Corp. Atlanta, GA LION 366 99.8 138 140 12.6 3,085 91.7 8.5 10.4 12.0 1.1 12.1 3.6 74.1 2.02 0.97
State Bank Finl Corp. Atlanta, GA STBZ 749 99.8 146 150 18.4 2,882 68.3 15.7 15.9 24.4 1.2 6.9 5.9 63.1 0.20 1.75
First Community Bancshares Inc Bluefield, VA FCBC 332 99.4 98 143 12.8 2,608 84.4 9.2 10.1 17.7 1.0 7.4 4.1 63.7 1.22 1.20
NewBridge Bancorp Greensboro, NC NBBC 354 99.0 146 165 13.0 2,520 98.5 8.2 8.6 12.2 0.6 6.5 3.7 67.4 0.45 1.22
Park Sterling Corporation Charlotte, NC PSTB 319 91.0 116 136 13.7 2,359 85.4 10.1 10.2 14.0 0.6 4.8 4.0 75.6 0.76 0.52
High 1,325 99.8 218 227 18.4 4,982 101.8 15.7 15.9 24.4 1.6 14.6 5.9 81.3 2.02 1.75
Low 319 90.9 98 136 10.6 2,359 68.3 7.7 8.4 11.8 0.2 2.2 3.2 38.9 0.13 0.27
Mean 622 96.7 145 173 13.5 3,518 86.7 9.4 10.2 14.6 0.9 7.9 4.1 65.0 1.06 0.97
Median 609 98.0 146 165 12.8 3,430 88.8 9.0 10.0 13.8 0.9 7.4 4.0 65.5 1.22 0.98
(1)NPAs/Assets = (nonaccrual loans + TDR + OREO)/total assets Source: SNL Financial
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Interest Rate Sensitivity
Interest Rate Scenario Asset Sensitivity
% Change
FSGI FSGI from Actual
Actual 0.0 % Total Loans $735.9
UP 100 bps 4.3 % Fixed 62%
UP 200 8.6 % Variable 14%
UP 300 12.9 % Adjustable 24% 100%
% Change
ACBI ACBI
from Actual
Actual 0.0 % Total Loans $1,040.0
UP 100 bps 9.5 % Fixed 12%
UP 200 19.2 % Variable 88%
UP 300 30.5 % Adjustable 0%
100%
% Change
Combined Combined
from Actual
Actual 0.0 % Total Loans $1,775.9
UP 100 bps 6.9 % Fixed 33%
UP 200 14.2 % Variable 57%
UP 300 22.0 % Adjustable 10%
100%
Note: Dollars in millions
Source: Based on First Security and Atlantic Capital income sensitivity analysis as of December 31, 2014. An income sensitivity analysis is model driven, and based upon a number of material assumptions, including interest rate levels, the shape of the yield curve, and customer preferences and behaviors in light of changing rates. The model also assumes no growth and no change in asset mix. Actual results are likely to differ, potentially materially. In analyzing the income sensitivity analysis, you should review the Forward-Looking Statements disclaimer at the beginning of this presentation in its entirety.
Atlantic Capital
First Security Group
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