Chattanooga, Tennessee-based bank holding company First Security Group, Inc. (FSGI) Tuesday said it turned to a loss for the third quarter, on a $24.8 million one-time non-cash accounting adjustment of goodwill impairment charge, as well as a higher loan loss provision.
Net loss available to common shareholders was $28.6 million or $1.84 per share compared with profit of $826 thousand or $0.05 per share for the year-ago quarter. Excluding one-time charge, First Security's net operating loss was $3.9 million or $0.25 per share.
Rodger Holley, chairman of First Security said, "Core earnings, consisting of pre-tax revenue and non-interest expense before the goodwill impairment, improved by $178 thousand to $3.4 million in the third quarter over the linked quarter."
Third-quarter net interest income declined 3.8% to $10.9 million from $11.7 million a year ago, due to the Federal Reserve's interest rate reductions.
Non-interest income decreased 3.5% to $2.7 million from $3.1 million, primarily due to an increase in fees and fair value adjustments on mortgages originated and sold in the secondary market.
Provision for loan and lease losses increased to $9.3 million from $3.9 million last year. Net interest income after provision for loan and lease losses was $1.6 million compared with $7.8 million last year.
Third-quarter non-interest expense was $37.4 million compared with $9.7 million for the year-ago period, including a pre-tax, one-time, non-cash, estimated goodwill impairment loss of $27.2 million.
First Security said third-quarter results were impacted primarily by a loan loss provision of $9.3 million, as it bolstered its allowance by conservatively assessing the existing and emerging credit issues related to the national and regional economic slowdown and the corresponding increases in unemployment.
First Security's net interest margin increased to 3.96% from 3.77% in the linked second quarter due to its ability to reduce its cost of funding liabilities.
For the nine months ended September 30, net loss available to common shareholders was $31.8 million or $2.05 per share compared with profit of $4.7 million or $0.29 per share last year.
Nine-month net interest income decreased to $31.7 million from $34.7 million a year ago. Year-to-date non-interest income declined 13.0% to $7.8 million from $9.0 million, due mainly to lower service charge fees and mortgage origination fees.
For the period, provision for loan and lease losses increased to $20.5 million from $7.1 million last year. Nine-month net interest income after provision for loan and lease losses was $11.2 million compared with $27.5 million last year.
Looking ahead, First Security said the lingering effects of the economic downturn would continue to place stress on businesses and borrowers in all markets.
Monday, FSGI closed regular trading at $3.70 on the Nasdaq.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.