First Security Group, Inc. (NASDAQ: FSGI) (the “Company” or “First Security”), the bank holding company for FSGBank, N.A. (“FSGBank”), announced today the results of the Company’s rights offering. Nearly $7.8 million of additional common stock was requested for the $5.0 million offering. Final allocations and delivery of shares are expected by the end of September.
In April 2013, the Company completed a recapitalization (the “Recapitalization”), including the restructuring of its TARP CPP preferred stock. On April 11, 2013, the Company issued approximately 9.9 million shares of the Company’s common stock to the U.S. Treasury (the “Treasury”) for full satisfaction of the Treasury’s TARP CPP investment in the Company. The Treasury immediately sold the common stock to institutional and other accredited investors previously identified by the Company at $1.50 per share. On April 12, 2013, the Company issued an additional approximately 50.8 million shares of common stock at $1.50 per share to institutional and other accredited investors. In aggregate, investors purchased 60,735,000 shares for $91.1 million.
As part of the Recapitalization, shareholders of record as of April 10, 2013 (the “Legacy Shareholders”) were provided the right to purchase two shares of Company common stock for every share owned as of the record date, as well as the opportunity to request additional shares of Company common stock, if available. The subscription price was $1.50 per share with a maximum of 3,329,234 shares of Company common stock available, or approximately $5.0 million (collectively, the “Rights Offering”).
“As the final component of the recapitalization, we are very grateful for the positive response from our legacy shareholders,” said Michael Kramer, President and Chief Executive Officer of First Security. “With requests totaling over 150% of the maximum size of the offering, we believe that this is another vote of confidence for our markets, our business plan, and our people.”
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