published Tuesday, February 25th, 2014

FSG Bank rebounds with $11.4 million in profits last year

Chattanooga's biggest independent bank returned to profitability last year after a recapitalization last spring.

First Security Group, Inc., said today it earned $11.4 million in 2013, compared to a loss $39.6 million in the previous year. In the fourth quarter, FSG reported a net loss of $646,000, or only a fraction of the $16.1 million loss in the same period a year ago. FSG CEO Michael Kramer said the bank is cutting expenses and increasing loan volume to make the bank more profitable from operations in 2014.

Last year, FSG made money primarily through a one-time sale of an additional $91.1 million of bank stock last April.

“Last fall, we stated that it was essential to achieve significant improvement in loan and revenue growth,” Kramer said in FSG's quarterly report released today. “With nearly $50 million of loan growth and over $1 million of improvement in non-interest expense in the fourth quarter, the momentum towards a return to operating profitability is real and within reach.”

During the fourth quarter of 2013, FSG loans increased $48.5 million, or 9.1 percent, and net interest income improved by $313,000, or 5.1 percent. Total interest income declined by $22,000 primarily due to lower interest income on investment securities as FSG sold $22.8 million of investment securities to support higher-yielding loan growth.

“While we will remain focused on improving our operational efficiencies in 2014, we will also continue to actively restructure our earning asset mix by growing loans and reducing the excess liquidity in our investment portfolio to improve our overall yield and margin," said John Haddock, First Security’s chief financial officer.

Founded in 1999, First Security Group has 28 full-served banking offices in Tennessee and Georgia. The Chattanooga-based bank holding company has assets of about $1 billion.

about Dave Flessner...

Dave Flessner is the business editor for the Times Free Press. A journalist for 35 years, Dave has been business editor and projects editor for the Chattanooga Times Free Press, city editor for The Chattanooga Times, business and county reporter for the Chattanooga Times, correspondent for the Lansing State Journal and Ingham County News in Michigan, staff writer for the Hastings Daily Tribune in Nebraska, and news director for WCBN-FM in Michigan. Dave, a native ...

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