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First Security Group (FSGI) in Chattanooga, Tenn., is poised to raise $90 million from institutional investors.
February 26 -
The Treasury Department this week appointed directors to join a pair of banking companies that have missed multiple dividend payments tied to the Troubled Asset Relief Program: Intervest Bancshares and First Security Group.
March 29
First Security Group (FSGI) in Chattanooga, Tenn., has completed a $5 million rights offering.
The offering followed the $1.1 billion-asset company's April recapitalization, in which it raised $91.1 million from institutional and other accredited investors. First Security exchanged about 9.9 million shares of common stock for the preferred shares it originally issued to the Treasury Department under the Troubled Asset Relief Program. The Treasury then sold the common stock to investors at $1.50 a share. First Security also issued an additional 50.8 million shares of common stock to investors.
As part of the recapitalization, First Security gave shareholders the right to buy two shares of common stock for every share owned as of April 10, as well as the opportunity to request additional shares if available. The company ultimately sold 3.3 million shares of common stock at $1.50 a share for a total of about $5 million.
The rights offering, which was oversubscribed, is expected to close by the end of September.
"As the final component of the recapitalization, we are very grateful for the positive response from our legacy shareholders," First Security president and chief executive Michael Kramer said in a Wednesday press release. "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."
First Security plans to use the proceeds to