The Office of the Comptroller of the Currency has lifted a regulatory enforcement action against First Security Group (FSGI) unit FSGBank.
The April 2010 OCC order had required the Chattanooga, Tenn., bank to raise capital and resolve asset quality problems. The $1 billion-asset bank had roughly $130 million in capital losses from 2008 to 2012, according to Chattanoogan.com.
FSGBank hired Triumph Investment Managers in May 2011 to develop a capital plan. Later that year, the bank conducted a 1-for-10 reverse stock split and hired a new chief executive.
Last year, four institutional investors led a recapitalization that raised $91.1 million. At the same time, FSGBank announced that it sold nonperforming loans with outstanding balances of $36.2 million.
Overall, the recapitalization raised FSGBank's Tier 1 leverage ratio to 8.5% from 2.5%, and its total risk-based capital ratio to 16.7% from 5.8%.
"The lifting of the consent order removes significant operational and financial constraints while enhancing our ability to execute our strategic plan," Michael Kramer, First Security's president and chief executive, said in a press release Tuesday. "We can now direct more of our time and energy toward returning to core profitability and building long-term shareholder value."