First Security Group Announces Earnings

Solid Loan Growth Produced in Second Quarter 2008
CHATTANOOGA, Tenn.--(Business Wire)--
First Security Group, Inc. (Nasdaq: FSGI), today announced second
quarter 2008 net income of $1.6 million, compared to $2.9 million
reported for the second quarter of 2007. Earnings per diluted share
was $0.10, compared with $0.17 reported for second quarter 2007.

Year to date, earnings per diluted share was $0.24, compared with
$0.30 for the six months ended June 30, 2007. The year-to-date
increase of $2.3 million in First Security's provision for loan and
lease losses reduced earnings per share by $0.09.

-- Loan Growth: Increases in commercial and industrial (C&I)
loans further improved the diversification of First Security's
loan portfolio, which reached the $1 billion mark at the end
of the second quarter of 2008.

-- Capital: First Security's tangible capital ratio at 9.4
percent at quarter-end remained firmly above the threshold for
well-capitalized bank holding companies.

-- Expense Control: For the six months ended June 30, 2008,
non-interest expense declined by 0.4 percent by careful
management of administrative costs, professional fees and
staffing levels, compared to 2007. From 2007 to 2008, second
quarter non-interest expense increased slightly by 0.5
percent.

"Our team has done an excellent job of cultivating customer
relationships in middle and east Tennessee and north Georgia,
contributing to this quarter's loan and deposit growth," said Rodger
B. Holley, Chairman and CEO of First Security. "As for the current
economic conditions, in my 30 years in the banking industry I have
certainly experienced similar rate environments and credit cycles. We
will remain steadfast in pursuing the strategies that have
successfully propelled First Security so far: consistent, profitable
growth, diversification of our revenue stream and sound asset
quality."

Holley also noted, "We have tremendous opportunity. The
attractiveness of our region is evident by the recent announcement of
a new $1 billion automobile assembly plant here in Chattanooga which
is expected to generate 2,000 jobs directly and up to 14,000 jobs in
total."

For the second quarter of 2008, net interest income declined by
6.7 percent, or $820 thousand, compared to the second quarter of 2007,
due to a reduction in net interest margin. The effect of the Federal
Reserve's interest rate cuts over the past year has resulted in a
reduction of First Security's net interest margin from 4.91 percent
for the second quarter of 2007 to 4.12 percent for the second quarter
of 2008. First Security anticipates its net interest margin will
stabilize in the latter half of 2008.

Non-interest income for the second quarter of 2008 increased by
$342 thousand, or 12.9 percent, on a year-over-year basis to $3.0
million with First Security continuing to realize the benefits of a
diversified income stream. Growth in the wealth management business
produced a $38 thousand, or 23.3 percent, increase in trust income,
and deposit service fees increased $36 thousand, or 2.8 percent, to
$1.3 million, compared to the second quarter of 2007.

Consistent with First Security's focus on controlling expenses,
growth in non-interest expense was limited to $50 thousand, or 0.5
percent, in the second quarter of 2008 as compared to the same quarter
in 2007. Non-interest expense totaled $10.3 million in the second
quarter of 2008. Quarterly expense savings were achieved in a number
of categories including equipment expense, printing and supplies, as
well as salaries and benefits. The number of full-time equivalent
employees declined to 369 as of June 30, 2008, from 375 a year ago and
371 at year-end 2007. Offsetting the expense savings, FDIC insurance
increased by $128 thousand due to higher deposit insurance premiums
imposed on the industry.

First Security has employed a prudent approach to credit
underwriting and monitoring. Net loan charge-offs as a percentage of
average loans annualized was 0.56 percent for the three months ended
June 30, 2008. Non-performing assets to total assets was 1.02 percent,
and the allowance for loan losses to non-performing assets was 91.27
percent at the end of the second quarter 2008. Non-performing assets
plus 90-day delinquencies to total assets, at quarter-end, were 1.08
percent. Loans 90 days past due were $785 thousand at the end of the
second quarter of 2008, a decline on a quarter-over-quarter basis, as
well as on a year-over-year basis. The quarterly provision for loan
and lease losses increased due to higher loan production,
non-performing assets and net charge-offs. As of June 30, 2008, the
allowance for loan and leases losses to total loans was 1.18 percent.

First Security's relationship-banking approach produced in the
last year an increase of $97.5 million in loan balances, or 10.7
percent, to $1.0 billion at the end of the second quarter 2008. During
the quarter, loans grew $29.3 million, or 3.0 percent (12.0 percent
annualized), led by increases in C&I loans of $22.4 million, or 15.2
percent (60.7 percent annualized) and commercial real estate loans
(CRE) of $14.0 million, or 6.3 percent (25.1 percent annualized).
Construction and development (C&D) loans declined $8.6 million, or 3.9
percent (15.7 percent annualized).

First Security's loan portfolio is primarily within its footprint
and is well diversified with 27.4 percent in 1-4 family residential,
23.5 percent in CRE, 20.9 percent in C&D and 16.9 percent in C&I.

At June 30, 2008, total deposits were $950.5 million, an increase
of $24.8 million, or 2.7 percent, compared to the end of the second
quarter 2007. Total deposits increased $14.9 million, or 1.6 percent
(6.4 percent annualized), from March 31, 2008. Non-interest bearing
demand deposit accounts grew $7.4 million, or 4.5 percent (18.0
percent annualized), and savings and money market accounts grew $8.5
million, or 6.3 percent (25.0 percent annualized), during the quarter.

First Security maintained capital levels exceeding those for
well-capitalized banks and bank holding companies under applicable
regulatory guidelines. The tangible equity to tangible assets ratio as
of June 30, 2008 was 9.43 percent. Stockholders' equity at June 30,
2008 was $147.0 million.

"We have seen significant changes in the banking environment," Mr.
Holley concluded. "Yet, we remain committed to owner-managed
businesses and consumers who seek a bank partner that provides
consistency and reliability."

Web Cast and Conference Call Information

First Security's executive management team will host a conference
call and simultaneous web cast on Tuesday, July 22, 2008 at 3:00 PM
Eastern Daylight Time to discuss second quarter results. The web cast
can be accessed live on First Security's website, www.FSGBank.com, on
the Corporate Information/Investor Relations page. A replay will be
available approximately two hours after the live conference call ends,
and will be archived on First Security's website for one month.

About First Security Group, Inc.

First Security Group, Inc. is a bank holding company headquartered
in Chattanooga, Tennessee with $1.3 billion in assets. Founded in
1999, First Security's community bank subsidiary, FSGBank, N.A., has
39 full-service banking offices along the interstate corridors of
eastern and middle Tennessee and northern Georgia. In Dalton, Georgia,
FSGBank operates under the name of Dalton Whitfield Bank; along the
Interstate 40 corridor in Tennessee, FSGBank operates under the name
of Jackson Bank & Trust. FSGBank provides retail and commercial
banking services, trust and investment management, mortgage banking,
financial planning, internet banking (www.FSGBank.com) and equipment
leasing through its wholly-owned subsidiaries, Kenesaw Leasing and J &
S Leasing.

Non-GAAP Financial Measures

This press release contains financial information determined by
methods other than in accordance with generally accepted accounting
principles in the United States of America (GAAP). First Security's
management uses these "non-GAAP" measures in its analysis of First
Security's performance. Non-GAAP measures typically adjust GAAP
performance measures to exclude the effects of charges, expenses and
gains related to the consummation of mergers and acquisitions, and
costs related to the integration of merged entities. These non-GAAP
measures may also exclude other significant gains, losses or expenses
that are unusual in nature and not expected to recur. Since these
items and their impact on First Security's performance are difficult
to predict, management believes presentations of financial measures
excluding the impact of these items provide useful supplemental
information that is important for a proper understanding of the
operating results of First Security's core business. These disclosures
should not be viewed as a substitute for operating results determined
in accordance with GAAP, nor are they necessarily comparable to
non-GAAP performance measures that may be presented by other
companies.

Forward-Looking Statements

This news release contains comments or information that constitute
forward-looking statements (within the meaning of the Private
Securities Litigation Reform Act of 1995) that are based on current
expectations that involve a number of risks and uncertainties. Actual
results may differ materially from the results expressed in
forward-looking statements. Factors that might cause such a difference
include changes in interest rates and interest rate relationships;
demand for products and services; the degree of competition by
traditional and non-traditional competitors; changes in banking
regulation; changes in tax laws; changes in prices, levies, and
assessments; the impact of technological advances; governmental and
regulatory policy changes; the outcomes of contingencies; trends in
customer behavior as well as their ability to repay loans; changes in
the national and local economy; and other factors, including risk
factors, referred to from time to time in filings made by First
Security with the Securities and Exchange Commission. First Security
undertakes no obligation to update or clarify forward-looking
statements, whether as a result of new information, future events or
otherwise.

Public companies, from time to time, become aware of rumors
concerning their business. Investors are cautioned that in this age of
instant communication and internet access, it may be important to
avoid relying on rumors and unsubstantiated information. First
Security complies with Federal and State law applicable to disclosure
of information. Investors may be at significant risk in relying on
unsubstantiated information from other sources.

-0-
*T
First Security Group, Inc. and Subsidiary
Consolidated Balance Sheets
June 30, December 31, June 30,
(in thousands, except share data) 2008 2007 2007
---------------------------------------------------------- -----------
(unaudited) (unaudited)

ASSETS
Cash & Due from Banks $ 28,151 $ 27,394 $ 26,836

Federal Funds Sold and Securities
Purchased under Agreements to
Resell - - -
----------- ------------ -----------
Cash and Cash Equivalents 28,151 27,394 26,836
----------- ------------ -----------
Interest-Bearing Deposits in Bank 4,153 296 2,205
----------- ------------ -----------
Securities Available-for-Sale 130,405 131,849 122,106
----------- ------------ -----------
Loans Held for Sale 6,007 4,396 10,971
Loans 1,000,698 948,709 898,206
----------- ------------ -----------
Total Loans 1,006,705 953,105 909,177
Less: Allowance for Loan and Lease
Losses 11,855 10,956 10,363
----------- ------------ -----------
994,850 942,149 898,814
----------- ------------ -----------
Premises and Equipment, net 34,854 34,751 35,966
----------- ------------ -----------
Goodwill 27,156 27,156 27,156
----------- ------------ -----------
Intangible Assets 2,766 3,200 3,666
----------- ------------ -----------
Other Assets 48,417 45,160 41,170
----------- ------------ -----------
TOTAL ASSETS $1,270,752 $1,211,955 $1,157,919
=========== ============ ===========

LIABILITIES
Deposits
Noninterest-Bearing Demand $ 170,351 $ 159,790 $ 174,650
Interest-Bearing Demand 64,432 62,637 69,234
----------- ------------ -----------
234,783 222,427 243,884
----------- ------------ -----------
Savings and Money Market Accounts 143,747 131,352 134,106
----------- ------------ -----------
Time Deposits:
Certificates of Deposit of less
than $100 thousand 249,317 259,628 267,772
Certificates of Deposit of $100
thousand or more 207,260 225,491 221,495
Brokered Certificates of Deposit 115,354 63,731 58,371
----------- ------------ -----------
571,931 548,850 547,638
----------- ------------ -----------
Total Deposits 950,461 902,629 925,628

Federal Funds Purchased and
Securities Sold under Agreements
to Repurchase 65,470 62,286 27,452
Security Deposits 2,225 2,799 3,494
Other Borrowings 92,785 80,459 42,445
Other Liabilities 12,857 16,089 14,006
----------- ------------ -----------
Total Liabilities 1,123,798 1,064,262 1,013,025
----------- ------------ -----------
STOCKHOLDERS' EQUITY
Common stock - $.01 par value
50,000,000 shares authorized;
16,419,883 issued as of June
30, 2008; 16,774,728 issued as
of December 31, 2007;
17,498,482 issued as of June
30, 2007 114 116 121
Paid-In Surplus 111,892 114,631 121,610
Unallocated ESOP Shares (3,656) (4,310) (4,701)
Retained Earnings 36,485 34,279 29,849
Accumulated Other Comprehensive
Gain / (Loss) 2,119 2,977 (1,985)
----------- ------------ -----------
Total Stockholders' Equity 146,954 147,693 144,894
----------- ------------ -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,270,752 $1,211,955 $1,157,919
=========== ============ ===========
*T

-0-
*T
First Security Group, Inc. and Subsidiary
Consolidated Statements of Income
Three Months Ended Six Months Ended
June 30, June 30,
(in thousands except
per share amounts) 2008 2007 2008 2007
----------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)
INTEREST INCOME
Loans, including fees $17,508 $19,093 $36,111 $37,465
Debt Securities -
taxable 1,126 1,078 2,261 2,370
Debt Securities -
non-taxable 391 405 789 815
Other 21 34 32 58
----------- ----------- ----------- -----------
Total Interest
Income 19,046 20,610 39,193 40,708
----------- ----------- ----------- -----------

INTEREST EXPENSE
Interest Bearing
Demand Deposits 94 132 193 257
Savings Deposits and
Money Market
Accounts 568 778 1,206 1,549
Certificates of
Deposit of less than
$100 thousand 2,640 3,254 5,677 6,406
Certificates of
Deposit of $100
thousand or more 2,322 2,752 5,036 5,381
Brokered Certificates
of Deposit 1,091 853 1,827 1,835
Other 915 605 2,323 1,185
----------- ----------- ----------- -----------
Total Interest
Expense 7,630 8,374 16,262 16,613
----------- ----------- ----------- -----------

NET INTEREST INCOME 11,416 12,236 22,931 24,095
Provision for Loan
and Lease Losses 1,953 416 3,131 833
----------- ----------- ----------- -----------
NET INTEREST INCOME
AFTER PROVISION FOR
LOAN AND LEASE LOSSES 9,463 11,820 19,800 23,262
----------- ----------- ----------- -----------

NONINTEREST INCOME
Service Charges on
Deposit Accounts 1,337 1,301 2,612 2,441
Loss on Sales of
Available-for-Sale
Securities, net - (168) - (168)
Other than Temporary
Impairment of
Available-for-Sale
Securities - - - (584)
Other 1,659 1,521 3,338 3,179
----------- ----------- ----------- -----------
Total Noninterest
Income 2,996 2,654 5,950 4,868
----------- ----------- ----------- -----------

NONINTEREST EXPENSE
Salaries and Employee
Benefits 5,767 5,823 11,524 11,645
Expense on Premises
and Fixed Assets,
net of rental income 1,703 1,699 3,387 3,326
Other 2,793 2,691 5,416 5,440
----------- ----------- ----------- -----------
Total Noninterest
Expense 10,263 10,213 20,327 20,411
----------- ----------- ----------- -----------

INCOME BEFORE INCOME
TAX PROVISION 2,196 4,261 5,423 7,719
Income Tax Provision 592 1,373 1,576 2,477
----------- ----------- ----------- -----------
NET INCOME 1,604 2,888 3,847 5,242
=========== =========== =========== ===========

NET INCOME PER SHARE:
Net Income Per Share
- basic $0.10 $0.17 $0.24 $0.31
Net Income Per Share
- diluted $0.10 $0.17 $0.24 $0.30
Dividends Declared
Per Common Share $0.05 $0.05 $0.10 $0.10
*T

-0-
*T
First Security Group, Inc. and Subsidiary
Consolidated Financial Highlights
(unaudited)

(in thousands, except per share amounts and full-time equivalent
employees)

2nd Quarter 1st Quarter 4th Quarter 3rd Quarter
2008 2008 2007 2007
----------- ----------- ----------- -----------

Earnings:
Net interest income $ 11,416 $ 11,515 $ 12,301 $ 12,526
Provision for loan
and lease losses $ 1,953 $ 1,178 $ 746 $ 576
Non-interest income $ 2,996 $ 2,954 $ 3,338 $ 3,094
Non-interest expense $ 10,263 $ 10,064 $ 10,474 $ 10,556
Net income $ 1,604 $ 2,243 $ 3,092 $ 3,022

Per Share Data:
Net income, basic $ 0.10 $ 0.14 $ 0.19 $ 0.18
Net income, diluted $ 0.10 $ 0.14 $ 0.18 $ 0.18
Cash dividends
declared $ 0.05 $ 0.05 $ 0.05 $ 0.05
Book value $ 8.95 $ 9.13 $ 8.80 $ 8.59
Tangible book value $ 7.13 $ 7.30 $ 6.99 $ 6.82

Performance Ratios:
Return on average
assets 0.51% 0.73% 1.03% 1.03%
Return on average
equity 4.30% 6.02% 8.37% 8.27%
Return on average
tangible assets 0.52% 0.75% 1.05% 1.05%
Return on average
tangible equity 5.38% 7.55% 10.54% 10.48%
Net interest margin,
taxable equivalent 4.12% 4.30% 4.61% 4.80%
Efficiency ratio 71.21% 69.56% 66.97% 67.58%
Core efficiency ratio
(1) 68.62% 67.20% 60.55% 64.68%
Non-interest income
to net interest
income and non-
interest income 20.79% 20.42% 21.34% 19.81%

Capital & Liquidity:
Total equity to total
assets 11.56% 12.05% 12.19% 12.38%
Tangible equity to
tangible assets 9.43% 9.87% 9.93% 10.08%
Total loans to total
deposits 105.92% 104.48% 105.59% 99.90%

Asset Quality:
Net charge-offs $ 1,405 $ 815 $ 419 $ 298
Net loans charged-off
to average loans,
annualized 0.56% 0.34% 0.18% 0.13%
Non-accrual loans $ 6,845 $ 5,047 $ 3,372 $ 1,687
Other real estate
owned $ 4,605 $ 3,510 $ 2,452 $ 2,646
Repossessed assets $ 1,539 $ 1,641 $ 1,834 $ 2,489
Non-performing assets
(NPA) $ 12,989 $ 10,198 $ 7,658 $ 6,822
NPA to total assets 1.02% 0.82% 0.63% 0.57%
Loans 90 days past
due $ 785 $ 1,473 $ 2,289 $ 585
NPA + loans 90 days
past due to total
assets 1.08% 0.94% 0.82% 0.62%
Allowance for loan
and lease losses to
total loans 1.18% 1.16% 1.15% 1.13%
Allowance for loan
and lease losses to
NPA 91.27% 110.93% 143.07% 155.89%

Period End Balances:
Loans $1,006,705 $ 977,396 $ 953,105 $ 940,025
Intangible assets $ 29,922 $ 30,131 $ 30,356 $ 30,579
Assets $1,270,752 $1,247,669 $1,211,955 $1,198,465
Deposits $ 950,461 $ 935,518 $ 902,629 $ 940,988
Stockholders' equity $ 146,954 $ 150,289 $ 147,693 $ 148,318
Common stock market
capitalization $ 91,624 $ 149,411 $ 150,640 $ 172,750
Full-time equivalent
employees 369 366 371 373
Shares outstanding 16,420 16,455 16,775 17,275

Average Balances:
Loans $ 999,859 $ 966,004 $ 950,640 $ 926,216
Intangible assets $ 30,034 $ 30,256 $ 30,475 $ 30,708
Earning assets $1,135,027 $1,099,190 $1,080,278 $1,053,908
Assets $1,259,203 $1,224,678 $1,204,038 $1,178,298
Deposits $ 935,899 $ 893,838 $ 926,149 $ 934,034
Stockholders' equity $ 149,316 $ 149,015 $ 147,832 $ 146,101
Shares outstanding,
basic - wtd 16,052 16,144 16,585 16,901
Shares outstanding,
diluted - wtd 16,237 16,334 16,849 17,223

2nd Quarter Year-to-Date Year-to-Date
2007 June 30, 2008 June 30, 2007
----------- ------------- -------------

Earnings:
Net interest income $ 12,236 $ 22,931 $ 24,095
Provision for loan and lease
losses $ 416 $ 3,131 $ 833
Non-interest income $ 2,654 $ 5,950 $ 4,868
Non-interest expense $ 10,213 $ 20,327 $ 20,411
Net income $ 2,888 $ 3,847 $ 5,242

Per Share Data:
Net income, basic $ 0.17 $ 0.24 $ 0.31
Net income, diluted $ 0.17 $ 0.24 $ 0.30
Cash dividends declared $ 0.05 $ 0.10 $ 0.10
Book value $ 8.28 $ 8.95 $ 8.28
Tangible book value $ 6.52 $ 7.13 $ 6.52

Performance Ratios:
Return on average assets 1.01% 0.62% 0.92%
Return on average equity 7.89% 5.16% 7.18%
Return on average tangible
assets 1.04% 0.64% 0.95%
Return on average tangible
equity 10.01% 6.46% 9.12%
Net interest margin, taxable
equivalent 4.91% 4.21% 4.89%
Efficiency ratio 68.59% 70.38% 70.47%
Core efficiency ratio (1) 64.95% 69.01% 65.52%
Non-interest income to net
interest income and non-
interest income 17.82% 20.60% 16.81%

Capital & Liquidity:
Total equity to total assets 12.51% 11.56% 12.51%
Tangible equity to tangible
assets 10.12% 9.43% 10.12%
Total loans to total deposits 98.22% 105.92% 98.22%

Asset Quality:
Net charge-offs $ 201 $ 2,220 $ 412
Net loans charged-off to
average loans, annualized 0.09% 0.45% 0.09%
Non-accrual loans $ 938 $ 6,845 $ 938
Other real estate owned $ 2,014 $ 4,605 $ 2,014
Repossessed assets $ 1,707 $ 1,539 $ 1,707
Non-performing assets (NPA) $ 4,659 $ 12,989 $ 4,659
NPA to total assets 0.40% 1.02% 0.40%
Loans 90 days past due $ 1,639 $ 785 $ 1,639
NPA + loans 90 days past due
to total assets 0.54% 1.08% 0.54%
Allowance for loan and lease
losses to total loans 1.14% 1.18% 1.14%
Allowance for loan and lease
losses to NPA 222.43% 91.27% 222.43%

Period End Balances:
Loans $ 909,177 $1,006,705 $ 909,177
Intangible assets $ 30,822 $ 29,922 $ 30,822
Assets $1,157,919 $1,270,752 $1,157,919
Deposits $ 925,628 $ 950,461 $ 925,628
Stockholders' equity $ 144,894 $ 146,954 $ 144,894
Common stock market
capitalization $ 188,978 $ 91,624 $ 188,978
Full-time equivalent employees 375 369 375
Shares outstanding 17,498 16,420 17,498

Average Balances:
Loans $ 884,383 $ 982,931 $ 869,984
Intangible assets $ 30,958 $ 30,145 $ 31,088
Earning assets $1,018,666 $1,117,098 $1,014,445
Assets $1,141,946 $1,241,771 $1,139,874
Deposits $ 917,215 $ 914,830 $ 918,965
Stockholders' equity $ 146,412 $ 149,158 $ 146,042
Shares outstanding, basic -
wtd 17,117 16,098 17,179
Shares outstanding, diluted -
wtd 17,482 16,285 17,561

(1) In accordance with SNL Financial practice, the core efficiency
ratio is calculated on a fully tax equivalent basis excluding certain
non-cash items, such as amortization of intangibles, gains or losses
on investment securities and gains, losses and write-downs on
foreclosed and repossessed properties.

*T

-0-
*T
Non-GAAP Reconciliation Table

(in thousands, except per share data)

2nd 1st 4th 3rd 2nd
Quarter Quarter Quarter Quarter Quarter
2008 2008 2007 2007 2007
-------- -------- -------- -------- --------

Return on average assets 0.51% 0.73% 1.03% 1.03% 1.01%
Effect of intangible
assets 0.01% 0.02% 0.02% 0.02% 0.03%
-------- -------- -------- -------- ---------
Return on average
tangible assets 0.52% 0.75% 1.05% 1.05% 1.04%
======== ======== ======== ======== =========

Return of average equity 4.30% 6.02% 8.37% 8.27% 7.89%
Effect of intangible
assets 1.08% 1.53% 2.17% 2.21% 2.12%
-------- -------- -------- -------- ---------
Return on average
tangible equity 5.38% 7.55% 10.54% 10.48% 10.01%
======== ======== ======== ======== =========

Total equity to total
assets 11.56% 12.05% 12.19% 12.38% 12.51%
Effect of intangible
assets -2.13% -2.18% -2.26% -2.30% -2.39%
-------- -------- -------- -------- ---------
Tangible equity to
tangible assets 9.43% 9.87% 9.93% 10.08% 10.12%
======== ======== ======== ======== =========

Efficiency ratio 71.21% 69.56% 66.97% 67.58% 68.59%
Effect of non-cash
items -1.48% -1.27% -5.46% -1.91% -2.61%
Effect of net interest
income, tax
equivalent adjustment -1.11% -1.09% -0.96% -0.99% -1.03%
-------- -------- -------- -------- ---------
Core efficiency ratio 68.62% 67.20% 60.55% 64.68% 64.95%
======== ======== ======== ======== =========

Per Share Data
Book value $8.95 $9.13 $8.80 $8.59 $8.28
Effect of intangible
assets (1.82) (1.83) (1.81) (1.77) (1.76)
-------- -------- -------- -------- ---------
Tangible book value $7.13 $7.30 $6.99 $6.82 $6.52
======== ======== ======== ======== =========

Supplemental Data (in thousands)

Allowance for loan and
lease losses $11,855 $11,313 $10,956 $10,635 $10,363
Net interest income, tax
equivalent $11,646 $11,749 $12,541 $12,761 $12,474
Amortization of
intangibles $209 $225 $223 $243 $254
Loss on sales of
available-for-sale
securities, net $- $- $- $- $168
Other-than-temporary
impairment of
securities $- $- $- $- $-
Gain on sales of
foreclosed and
repossessed property,
leased equipment,
premises and equipment
and loans $(213) $(97) $(508) $(210) $(68)
Losses on sales of
foreclosed and
repossessed property
and premises and
equipment $28 $14 $370 $156 $8
Write-downs on
foreclosed and
repossessed property $125 $10 $574 $38 $60
Mortgage loan and
related fees $413 $523 $352 $396 $388

Year-to-Date Year-to-Date
June 30, 2008 June 30, 2007
------------- -------------

Return on average assets 0.62% 0.92%
Effect of intangible assets 0.02% 0.03%
------------- -------------
Return on average tangible assets 0.64% 0.95%
============= =============

Return of average equity 5.16% 7.18%
Effect of intangible assets 1.30% 1.94%
------------- -------------
Return on average tangible equity 6.46% 9.12%
============= =============

Total equity to total assets 11.56% 12.51%
Effect of intangible assets -2.13% -2.39%
------------- -------------
Tangible equity to tangible assets 9.43% 10.12%
============= =============

Efficiency ratio 70.38% 70.47%
Effect of non-cash items -1.37% -3.88%
Effect of net interest income, tax
equivalent adjustment 0.00% -1.07%
------------- -------------
Core efficiency ratio 69.01% 65.52%
============= =============

Per Share Data
Book value $8.95 $8.28
Effect of intangible assets (1.82) (1.76)
------------- -------------
Tangible book value $7.13 $6.52
============= =============

Supplemental Data (in thousands)

Allowance for loan and lease losses $11,855 $10,363
Net interest income, tax equivalent $22,931 $24,577
Amortization of intangibles $434 $519
Loss on sales of available-for-sale
securities, net $- $168
Other-than-temporary impairment of
securities $- $584
Gain on sales of foreclosed and
repossessed property, leased equipment,
premises and equipment and loans $(310) $(256)
Losses on sales of foreclosed and
repossessed property and premises and
equipment $42 $15
Write-downs on foreclosed and repossessed
property $135 $259
Mortgage loan and related fees $936 $846
*T

First Security Group, Inc.
Rodger B. Holley, Chairman & CEO, 423-308-2080
rholley@FSGBank.com
or
William L. (Chip) Lusk, Jr., EVP & CFO, 423-308-2070
clusk@FSGBank.com

Copyright Business Wire 2008