First Security Group Announces Fourth Quarter Results
First Security Group, Inc. (NASDAQ: FSGI), today reported a net loss available to common shareholders of $11.8 million, or $0.75 per diluted share for the quarter ending December 31, 2010, and a net loss of $46.4 million, or $2.95 per diluted share for the year. For 2010, First Security recorded $33.6 million in provision for loan and lease losses and established a $24.6 million valuation allowance for deferred taxes.
“All of us in senior management appreciate the support of shareholders and customers and the dedication of our employees. Knowing their level of commitment makes the most recent operating results all the more disappointing,” said Rodger B. Holley, Chairman and Chief Executive Officer of First Security. “Continued procedural improvements, led by our new President and Chief Operating Officer Gene Coffman, are underway. Mr. Coffman is managing the bank on a day-to-day basis and will continue spearheading our change initiatives.”
To better position First Security for short-term stability and long-term success, several important management changes have taken place over the past year. In addition to the hiring of the president and chief operating officer, an experienced chief credit officer joined the Bank in the second quarter of 2010 to oversee credit administration. The positions of chief risk officer, retail banking president and commercial banking president were also created and filled during 2010.
These organizational changes provide centralized oversight and control. Market executives were also appointed to maintain local knowledge and uphold the Bank’s commitment to superior customer service. Operationally, loan underwriting, collections and loan document areas have been centralized. Additionally, the marketing and sales of foreclosed residential and commercial properties has been outsourced to selective local and regional real estate firms. These changes ensure consistency, increase effectiveness and provide higher levels of operational efficiencies.Fourth Quarter Overview For the fourth quarter of 2010, net interest income totaled $7.9 million, a decline of 2.8 percent on a linked quarter basis and a decline of 25.2 percent from the fourth quarter of 2009. On a year-over-year basis, net interest income declined by 17.8 percent to $34.7 million in 2010. Lower net interest income is primarily attributed to decreased interest income from reductions in the loan portfolio and increased interest costs associated with higher levels of brokered deposits, partially offset by reductions in interest expense on customer deposits.
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