FSGI (MM)

Strong Deposit and Loan Growth Achieved

First Security Group, Inc. (NASDAQ: FSGI) (“First Security” or “FSG”) reported net income for the third quarter of 2014 of $927 thousand, or $0.01 per basic and diluted share, and $1.5 million for the nine months ended September 30, 2014, or $0.02 per basic and diluted share.

Financial Highlights

• Net income of $927 thousand for the third quarter, a $314 thousand, or 51%, improvement from the second quarter and a $2.4 million improvement from the third quarter of 2013.
• Loans increased by $83.6 million, or 14.3% (19.2% annualized) from December 31, 2013 to September 30, 2014. Additionally, FSG has transferred $86.3 million of loans into the held-for-sale category during 2014 for net loan production of $169.9 million, or 29.1% (39.0% annualized) of the 2013 year-end balance of $583.1 million.

• Average pure deposits increased by $38.3 million, or 8.4% (33.4% annualized) comparing the second and third quarters of 2014.

“Our goal for the near- and long-term is to enhance our profitability each and every quarter. We made additional progress building a balance sheet that will produce sustainable, predictable and consistently improving earnings,” said Michael Kramer, First Security’s President and Chief Executive Officer. “In the current interest rate environment, we have placed a significant emphasis on growing our deposit base to support our loan growth and we are pleased with the progress achieved during the quarter.”

The below discussion of First Security’s results of operations and financial condition is supplemented by the accompanying financial highlights.

Net Interest Income

For the third quarter of 2014, net interest income improved by $942 thousand, or 12.5%, to $8.5 million compared to $7.5 million for the second quarter of 2014. Interest income on loans, including fees, increased by $1.1 million while total interest income increased by $937 thousand due to the continued reduction in the investment security portfolio. Included in the increase in interest income on loans is approximately $650 thousand of discount accretion as a result of the resolution of various loans purchased at discounts. The net interest margin improved by 30 basis points in the third quarter of 2014 from 3.30% to 3.60% compared to the second quarter. Excluding the discount accretion, the net interest margin for the third quarter improved by 3 basis points to 3.33%.

Loans

Loans totaled $666.7 million as of September 30, 2014 compared to $659.5 million as of June 30, 2014. During the third quarter, approximately $52.7 million of loans were transferred into the held-for-sale category. Including the transfer into the held-for-sale category, net loan production totaled $59.9 million during the third quarter of 2014.

“During the third quarter, we achieved significant loan production from our primary markets of Chattanooga and Knoxville as well as our TriNet line of business,” said John Haddock, First Security’s EVP and Chief Financial Officer. “We will continue to evaluate and sell a portion of our TriNet production to capitalize on market opportunities and manage certain lending concentrations. We expect to realize solid gains on loan sales during the fourth quarter from the $50 million held-for-sale at the end of the quarter.”

Deposits

First Security continued to improve its deposit mix to reduce the overall cost of deposits from 0.59% for the second quarter of 2014 to 0.55% for the third quarter of 2014. Average transaction deposits accounted for 56.8% of average total deposits during the third quarter, up from 54.1% for the second quarter of 2014, totaling $493.7 million as compared to $455.4 million. Average core deposits, defined as transaction accounts plus retail CDs, increased to 75.3% of average total deposits as compared to 74.0% for the second quarter. Brokered CDs declined by $14.7 million during the third quarter, while customer deposits placed and reciprocated through our Promontory© products increased by $11.6 million.

Non-Interest Income

Non-interest income totaled $2.8 million for the third quarter of 2014 compared to $3.0 million for the second quarter of 2014. FSG reported $254 thousand in net gains on sales of loans during the third quarter, or a decline of $196 thousand, as compared to $450 thousand in the second quarter of 2014. This represents the aggregate gains from First Security’s SBA lending department as well as gains from certain commercial real estate loans that were classified as held-for-sale as of June 30, 2014. As of September 30, 2014, loans held-for-sale totaled $46.9 million, which are expected to be sold for gains during the fourth quarter. Mortgage banking income increased by $183 thousand to $462 thousand for the third quarter, assisted by a sale of long-term fixed rate mortgages previously held-for-investment.

Non-Interest Expense

Non-interest expense increased by $121 thousand to $10.2 million for the third quarter of 2014 as compared to the second quarter of 2014. Total non-performing asset costs, including write-downs, net gains or losses and associated expenses, increased by $135 thousand during the third quarter of 2014. As of September 30, 2014, full-time equivalent employees remained steady at 264 as compared June 30, 2014 and declined from the 313 as of September 30, 2013. Salary expense declined slightly to $5.2 million in the third quarter as compared to the second quarter.

Asset Quality

First Security recorded provision expense of $11 thousand to adjust the allowance for loan losses to FSG’s current estimate of $8.6 million as of September 30, 2014. Net charge-offs during the third quarter totaled $664 thousand, of which approximately $500 thousand was a release of a previously recorded specific reserve within the allowance. The ratio of the allowance to total loans declined from 1.43% as of June 30, 2014 to 1.29% as of September 30, 2014. Total non-performing assets (“NPAs”) declined by $1.8 million to improve the NPA to total assets ratio from 1.35% to 1.16% comparing June 30, 2014 to September 30, 2014.

Capital

Stockholders’ equity as of September 30, 2014 totaled $88.0 million, a $1.4 million increase from June 30, 2014. As of September 30, 2014, book value per share increased to $1.32 per share compared to $1.30 per share as of June 30, 2014 and $1.26 per share as of December 31, 2013.

“The banking teams that joined FSG this past spring are producing great results in new loan and deposit relationships,” said CEO Kramer. “We believe that our East Tennessee and North Georgia markets will enable us to build a strong community bank that will provide our shareholders with solid returns.” Kramer concluded, “While we are pleased with our progress and proud of our improvement, we are still a long way from satisfied with the level of our earnings.”

About First Security Group, Inc.

First Security Group, Inc. is a bank holding company headquartered in Chattanooga, Tennessee, with $1.0 billion in assets. Founded in 1999, First Security’s community bank subsidiary, FSGBank, N.A. has 26 full-service banking offices along the interstate corridors of eastern and middle Tennessee and northern Georgia. FSGBank provides retail and commercial banking services, trust and investment management, mortgage banking, financial planning, and internet banking (www.FSGBank.com).

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 1993) 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 Financial Highlights

(unaudited)

  3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter Year-to-Date 2014       2014       2014       2013       2013  

September30, 2014

   

September30, 2013

(in thousands, except per share amounts and full-time equivalent employees) Earnings:     Net interest income $ 8,487 $ 7,545 $ 6,925 $ 6,478 $ 6,165 $ 22,957 $ 16,893 Credit for loan and lease losses $ 11 $ (270 ) $ (972 ) $ (955 ) $ (1,632 ) $ (1,231 ) $ (1,780 ) Non-interest income1 $ 2,805 $ 3,030 $ 2,635 $ 2,188 $ 2,292 $ 8,470 $ 6,497 Non-interest expense1 $ 10,222 $ 10,101 $ 10,445 $ 10,150 $ 11,197 $ 30,768 $ 37,614 Income tax provision (benefit) $ 132 $ 131 $ 132 $ 119 $ 322 $ 395 $ 358 Dividends and accretion on preferred stock $ — $ — $ — $ — $ — $ — $ 1,381 Effect of exchange on preferred stock to common stock $ — $ — $ — $ — $ — $ — $ 26,179 Net income available (loss allocated) to common stockholders $ 927 $ 613 $ (45 ) $ (648 ) $ (1,430 ) $ 1,495 $ 11,996   Per Share Data: Net income available (loss allocated) to common stockholders, basic $ 0.01 $ 0.01 $ 0.00 $ (0.01 ) $ (0.02 ) $ 0.02 $ 0.30 Net income available (loss allocated) to common stockholders, diluted $ 0.01 $ 0.01 $ 0.00 $ (0.01 ) $ (0.02 ) $ 0.02 $ 0.30 Book value per common share $ 1.32 $ 1.30 $ 1.27 $ 1.26 $ 1.25 $ 1.32 $ 1.25   Performance Ratios: Return on average assets 0.36 % 0.24 % (0.02 )% (0.26 )% (0.56 )% 0.20 % 1.52 % Return on average common equity 4.23 % 2.86 % (0.21 )% (3.08 )% (7.21 )% 2.32 % 29.77 % Efficiency ratio 90.52 % 95.52 % 109.26 % 117.12 % 132.4 % 97.90 % 160.81 % Non-interest income to net interest income and non-interest income 24.84 % 28.65 % 27.56 % 25.25 % 27.1 % 26.95 % 27.78 %   Capital: Total equity to total assets 8.56 % 8.55 % 8.63 % 8.56 % 8.24 % 8.56 % 8.24 %   Liquidity, Yields and Rates: Interest-bearing cash - average balance $ 8,436 $ 8,997 $ 13,653 $ 34,075 $ 68,964 $ 10,343 $ 137,291 Investment securities - average balance 230,297 247,459 272,563 330,094 329,385 249,952 291,698 Loans - average balance 702,271       673,175       604,298       550,749       529,406   660,274       544,136   Average Earning Assets $ 941,004       $ 929,631       $ 890,514       $ 914,918       $ 927,755   $ 920,569       $ 973,125   Pure deposits2 - average balance $ 493,707 $ 455,407 $ 446,820 $ 452,495 $ 454,379 $ 465,483 $ 428,826 Core deposits3 - average balance 654,893 622,636 624,365 640,177 653,044 634,076 646,062 Customer deposits4 - average balance 783,996 757,704 773,336 801,827 829,926 771,717 842,066 Brokered deposits - average balance 85,369       84,021       70,204       84,143       90,323   79,920       125,299   Total deposits - average balance $ 869,365       $ 841,725       $ 843,540       $ 885,970       $ 920,249   $ 851,637       $ 967,365   Total loans to total deposits 75.85 % 76.01 % 71.85 % 68.02 % 58.76 % 75.85 % 58.76 % Yield on earning assets 4.14 % 3.86 % 3.85 % 3.53 % 3.57 % 3.96 % 3.32 % Rate on customer deposits (including impact of non-interest bearing DDAs) 0.37 % 0.37 % 0.41 % 0.48 % 0.56 % 0.38 % 0.63 % Cost of deposits 0.55 % 0.59 % 0.65 % 0.74 % 0.84 % 0.60 % 0.94 % Rate on interest-bearing funding 0.66 % 0.68 % 0.78 % 0.73 % 1.01 % 0.70 % 1.09 % Net interest margin, taxable equivalent 3.60 % 3.30 % 3.21 % 2.89 % 2.71 % 3.38 % 2.38 %   Non-Interest Income: Service Charges on Deposits $ 778 $ 769 $ 741 $ 800 $ 798 $ 2,288 $ 2,298 POS Fees 436 439 401 420 401 1,276 1,171 BOLI 234 235 351 239 238 820 723 Mortgage Banking Income 462 279 180 208 420 921 927 Trust 233 235 200 188 193 668 527 Other 398 376 369 165 242 1,143 697 Net Gains on Sales of Loans 254 450 22 — — 726 — Net Gains on AFS sales 10       247       371       168       —   628       154   Total Non-Interest Income $ 2,805       $ 3,030       $ 2,635       $ 2,188       $ 2,292   $ 8,470       $ 6,497     Non-Interest Expense: Salaries and Benefits $ 5,153 $ 5,225 $ 5,274 $ 5,503 $ 5,807 $ 15,652 $ 17,081 Occupancy 814 776 820 799 891 2,410 2,502 Furniture and Fixtures 565 520 557 544 656 1,642 1,799 Professional Fees 658 690 599 417 533 1,947 1,840 FDIC insurance assessments 336 336 311 150 150 983 2,150 Write-downs on OREO and repossessions 289 76 309 375 374 674 1,997 Losses (Gains) on OREO, repossessions and fixed assets, net (113 ) (15 ) 10 57 (116 ) (118 ) (417 ) Non-performing asset expenses, net 204 184 221 450 488 609 3,506 Data processing 577 506 588 517 628 1,671 1,697 Communications 129 147 150 172 141 426 411 Debit card fees 244 232 258 181 207 734 625 Intangible asset amortization 49 49 48 57 67 146 213 Printing and supplies 144 150 207 121 213 501 528 Advertising 140 135 134 65 89 409 246 Insurance 295 303 325 251 523 923 1,873 Other 738       787       634       491       546   2,159       1,562   Total Non-Interest Expense $ 10,222       $ 10,101       $ 10,445       $ 10,150       $ 11,197   $ 30,768       $ 37,613     Asset Quality: Net charge-offs (recoveries) $

664

$ (470 ) $ 228 $ (754 ) $ (32 ) $ 422 $ 1,320 Net loan charge-offs (recoveries) to average loans, annualized 0.19 % (0.14 )% 0.15 % (0.55 )% (0.02 )% 0.09 % 0.32 % Non-accrual loans $ 4,000 $ 4,891 $ 6,027 $ 7,203 $ 6,803 $ 4,000 $ 6,803 Other real estate owned and repossessed assets, net $ 5,960 $ 7,725 $ 7,075 $ 8,213 $ 8,678 $ 5,960 $ 8,678 Loans 90 days past due $ 1,951 $ 1,083 $ 854 $ 928 $ 509 $ 1,951 $ 509 Non-performing assets (NPA) $ 11,911 $ 13,699 $ 13,956 $ 16,344 $ 15,990 $ 11,911 $ 15,990 NPA to total assets 1.16 % 1.35 % 1.42 % 1.67 % 1.58 % 1.16 % 1.58 % Non-performing loans (NPL) $ 5,951 $ 5,974 $ 6,881 $ 8,131 $ 7,312 $ 5,951 $ 7,312 NPL to total loans 0.89 % 0.91 % 1.14 % 1.39 % 1.37 % 0.89 % 1.37 % Allowance for loan and lease losses to total loans 1.29 % 1.43 % 1.52 % 1.80 % 2.00 % 1.29 % 2.00 % Allowance for loan and lease losses to NPL 144.51 % 157.35 % 133.70 % 129.14 % 146.33 % 144.51 % 146.33 %   Period End Balances: Loans, excluding HFS $ 666,728 $ 659,539 $ 604,859 $ 583,097 $ 534,627 $ 666,728 $ 534,627 Allowance for loan and lease losses $ 8,600 $ 9,400 $ 9,200 $ 10,500 $ 10,700 $ 8,600 $ 10,700 Intangible assets $ 184 $ 233 $ 282 $ 330 $ 388 $ 184 $ 388 Assets $ 1,027,882 $ 1,012,685 $ 980,505 $ 977,574 $ 1,011,855 $ 1,027,882 $ 1,011,855 Total deposits $ 879,029 $ 867,709 $ 841,832 $ 857,268 $ 909,848 $ 879,029 $ 909,848 Common stockholders' equity $ 87,963 $ 86,566 $ 84,654 $ 83,649 $ 83,388 $ 87,963 $ 83,388 Total stockholders' equity $ 87,963 $ 86,566 $ 84,654 $ 83,649 $ 83,388 $ 87,963 $ 83,388 Common stock market capitalization $ 132,315 $ 144,594 $ 138,601 $ 153,187 $ 138,534 $ 132,315 $ 138,534 Full-time equivalent employees 264 264 275 285 313 264 313 Common shares outstanding 66,826 66,633 66,635 66,603 66,603 66,826 66,603   Average Balances: Loans, including HFS $ 702,271 $ 673,175 $ 604,298 $ 550,749 $ 529,406 $ 660,274 $ 544,136 Intangible assets $ 217 $ 265 $ 313 $ 363 $ 405 $ 264 $ 501 Earning assets $ 941,004 $ 929,631 $ 890,514 $ 914,918 $ 927,755 $ 920,569 $ 973,125 Assets $ 1,017,631 $ 1,006,143 $ 967,624 $ 993,447 $ 1,016,919 $ 997,316 $ 1,055,611 Deposits $ 869,365 $ 841,725 $ 843,540 $ 885,970 $ 920,249 $ 851,637 $ 967,365 Common stockholders' equity $ 87,656 $ 85,613 $ 84,340 $ 84,125 $ 79,382 $ 85,882 $ 53,720 Total stockholders' equity $ 87,656 $ 85,613 $ 84,340 $ 84,125 $ 79,382 $ 85,882 $ 65,659 Common shares outstanding, basic - wtd 65,869 65,731 65,726 66,603 62,600 65,776 40,020 Common shares outstanding, diluted - wtd 65,874 65,737 65,726 66,603 62,600 65,779 40,020   1 Certain amounts were reclassified between non-interest income and non-interest expense to conform with the current presentation. 2 Pure deposits are all transaction-based accounts, including non-interest bearing DDAs, interest bearing DDAs, money market accounts and savings accounts. 3 Core deposits are Pure deposits plus customer certificates of deposits less than $100,000. 4 Customer deposits are total deposits less brokered deposits.                  

First Security Group, Inc. and Subsidiary

Consolidated Financial Highlights

Non-GAAP Reconciliation Table

(unaudited)

  3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter Year-to-Date 2014     2014     2014     2013     2013      

September30, 2014

 

September30, 2013

(in thousands, except per share data)   Total stockholders' equity $ 87,963 $ 86,566 $ 84,654 $ 83,649 $ 83,388 $ 87,963 $ 83,388 Effect of preferred stock —     —     —     —     —   —     —   Common stockholders' equity $ 87,963     $ 86,566     $ 84,654     $ 83,649     $ 83,388   $ 87,963     $ 83,388     Average total stockholders' equity $ 87,657 $ 85,613 $ 84,340 $ 84,125 $ 79,382 $ 85,882 $ 65,659 Effect of average preferred stock —     —     —     —     —   —    

(11,939

) Average common stockholders' equity $ 87,657     $ 85,613     $ 84,340     $ 84,125     $ 79,382   $ 85,882     $ 53,720        

First Security Group, Inc. and Subsidiary

Consolidated Balance Sheets

 

September 30,2014

December 31,2013

September 30,2013

(in thousands)

(unaudited)

(unaudited) ASSETS Cash and Due from Banks $ 11,519 $ 10,742 $ 10,357 Interest Bearing Deposits in Banks 7,344   10,126   59,943   Cash and Cash Equivalents 18,863 20,868 70,300 Securities Available-for-Sale 98,677 172,830 207,009 Securities Held-to-Maturity, at amortized cost (fair value - $131,549 at September 30, 2014, $132,104 at December 31, 2013 and $130,170 at September 30, 2013) 129,313 132,568 129,164 Loans Held-for-Sale 46,904 220 1,661 Loans 666,728 583,097 534,627 Less: Allowance for Loan and Lease Losses 8,600   10,500   10,700   Net Loans 658,128 572,597 523,927 Premises and Equipment, net 27,862 27,888 28,810 Bank Owned Life Insurance 29,020 28,346 28,155 Other Real Estate Owned 5,952 8,201 8,662 Other Assets 13,163   14,056   14,167   TOTAL ASSETS $ 1,027,882   $ 977,574   $ 1,011,855     LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES Deposits Noninterest Bearing Demand $ 155,177 $ 144,365 $ 147,865 Interest Bearing Demand 104,404 95,559 92,108 Savings and Money Market Accounts 252,218 206,125 215,293 Certificates of Deposit less than $100 thousand 157,629 182,408 195,129 Certificates of Deposit of $100 thousand or more 125,606 153,750 170,466 Brokered Deposits 83,995   75,062   88,987   Total Deposits 879,029 857,269 909,848 Federal Funds Purchased and Securities Sold under Agreements to Repurchase 12,878 12,520 12,657 Other Borrowings 43,485 20,000 — Other Liabilities 4,527   4,137   5,962   Total Liabilities 939,919   893,926   928,467   SHAREHOLDERS’ EQUITY Common Stock – $.01 par value – 150,000,000 shares authorized; 66,826,254 shares issued as of September 30, 2014, 66,602,601 shares issued as of December 31, 2013, and 66,602,601 shares issued as of September 30, 2013 766 764 764 Paid-In Surplus 197,326 196,536 196,059 Accumulated Deficit (102,547 ) (104,042 ) (103,395 ) Accumulated Other Comprehensive Loss (7,582 ) (9,610 ) (10,040 ) Total Shareholders’ Equity 87,963   83,648   83,388   TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,027,882   $ 977,574   $ 1,011,855    

       

First Security Group, Inc. and Subsidiary

Consolidated Statements of Operations

(unaudited)

  Three Months EndedSeptember 30, Nine Months EndedSeptember 30, (in thousands, except per share data) 2014       2013 2014       2013 INTEREST INCOME Loans, including fees $ 8,805 $ 6,461 $ 23,493 $ 19,537 Investment Securities – taxable 887 1,321 2,883 3,143 Investment Securities – non-taxable 86 312 524 749 Other 2   77   52   338   Total Interest Income 9,780   8,171   26,952   23,767   INTEREST EXPENSE Interest Bearing Demand Deposits 42 62 137 213 Savings Deposits and Money Market Accounts 193 188 467 628 Certificates of Deposit of less than $100 thousand 253 466 824 1,551 Certificates of Deposit of $100 thousand or more 246 475 793 1,558 Brokered Deposits 484 795 1,576 2,873 Other 75   20   198   51   Total Interest Expense 1,293   2,006   3,995   6,874   NET INTEREST INCOME 8,487 6,165 22,957 16,893 Provision (Credit) for Loan and Lease Losses 11   (1,632 ) (1,231 ) (1,780 ) NET INTEREST INCOME AFTER CREDIT FOR LOAN AND LEASE LOSSES 8,476   7,797   24,188   18,673   NONINTEREST INCOME Service Charges on Deposit Accounts 778 798 2,288 2,298 Mortgage Banking Income 462 420 921 927 Gain on Sales of Securities Available-for-Sale 10 — 628 154 Gain on Sales of Loans 254 — 726 — Other 1,301   1,074   3,907   3,118   Total Noninterest Income 2,805   2,292   8,470   6,497   NONINTEREST EXPENSES Salaries and Employee Benefits 5,153 5,807 15,652 17,081 Expense on Premises and Fixed Assets, net of rental income 1,379 1,547 4,052 4,301 Other 3,690   3,843   11,064   16,232   Total Noninterest Expenses 10,222   11,197   30,768   37,614   INCOME (LOSS) BEFORE INCOME TAX PROVISION (BENEFIT) 1,059 (1,108 ) 1,890 (12,444 ) Income Tax Provision 132   322   395   358   NET INCOME (LOSS) 927 (1,430 ) 1,495 (12,802 ) Preferred Stock Dividends — — — (929 ) Accretion on Preferred Stock Discount — — — (452 ) Effect of Exchange of Preferred Stock to Common Stock —   —   —   26,179   NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ 927   $ (1,430 ) $ 1,495   $ 11,996   NET INCOME PER SHARE: Net Income (Loss) Per Share – Basic $ 0.01 $ (0.02 ) $ 0.02 $ 0.30 Net Income (Loss) Per Share – Diluted $ 0.01 $ (0.02 ) $ 0.02 $ 0.30 Dividends Declared Per Common Share $ — $ — $ — $ —

First Security Group, Inc.John R. Haddock, 423-308-2075EVP & CFOjhaddock@FSGBank.com