First Security Group, Inc. (NASDAQ: FSGI) (the “Company” or “First Security”), the bank holding company for its wholly-owned subsidiary FSGBank, N.A. (“FSGBank”), announced today that it has entered into definitive stock purchase agreements with institutional investors as part of an approximate $90 million recapitalization (the “Recapitalization”). Four investors will lead the Recapitalization, which also includes a conversion of the Company’s TARP CPP Preferred Stock to common stock and sale of under- and non-performing loans. The lead investors will each invest approximately $9 million to acquire pro-forma ownership of approximately 9.9% of the total outstanding common stock, respectively. The Recapitalization is priced at $1.50 per share and was unanimously approved by the Company’s board of directors. “Today marks an important milestone for First Security Group and FSGBank and reflects the culmination of our efforts over the last fifteen months,” said Michael Kramer, President and Chief Executive Officer of First Security. “We have rebuilt our executive management team with talented and experienced bankers, solidified our board with four new directors, three of which are former bank CEOs, and initiated the execution of our strategic plan. We appreciate the confidence and support of our lead investors. Their commitment to our Recapitalization will enable us to strengthen our balance sheet and provide growth capital to complete the transformation of FSGBank into a banking franchise that our clients, communities and shareholders can be proud of.” Kramer concluded, “We are also pleased to announce that our current shareholders will have the opportunity to buy additional shares in First Security at the same price as the Recapitalization through a follow-on rights offering.” The Company plans to downstream a majority of the net proceeds to FSGBank in order to support future balance sheet growth as well as fund the losses associated with the recently completed loan sale. The combined effects of the additional capital and the loan sale are expected to result in an improved risk profile, enhanced profitability and compliance with most, if not all, aspects of the regulatory orders of the Company and FSGBank.