UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


___________________
FORM 11-K
___________________

(Mark One)
 
X
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
  SECURITIES EXCHANGE ACT OF 1934
  For the fiscal year ended December 31, 2014
 
OR
   
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
  SECURITIES EXCHANGE ACT OF 1934
  For the transition period from ________ to ________



Commission file number 000-49747
 



A.
Full title of the plan and the address of the plan, if different from that of the issuer named below:

FIRST SECURITY GROUP, INC. 401(k)
AND EMPLOYEE STOCK OWNERSHIP PLAN

B.
Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

First Security Group, Inc.
531 Broad Street
Chattanooga, Tennessee 37402





















FIRST SECURITY GROUP, INC. 401(k)
AND EMPLOYEE STOCK OWNERSHIP PLAN
FINANCIAL STATEMENTS

December 31, 2014








First Security Group, Inc. 401(k) and Employee Stock Ownership Plan

Contents




 
Page No.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
 
 
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
 
 
NOTES TO FINANCIAL STATEMENTS
 
 
 
 
SUPPLEMENTAL SCHEDULE
 
 
 
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
 
 
EXHIBITS
 
 
SIGNATURES














REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Retirement Committee and Plan Administrator of First Security Group, Inc. 401(k) and Employee Stock Ownership Plan
Chattanooga, Tennessee

We have audited the accompanying statements of net assets available for benefits of First Security Group, Inc. 401(k) and Employee Stock Ownership Plan (the Plan) as of December 31, 2014 and 2013, and the related statement of changes in net assets available for benefits for the year ended December 31, 2014. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2014 and 2013, and the changes in the net assets available for benefits for the year ended December 31, 2014 in conformity with U.S. generally accepted accounting principles.

The supplemental Schedule H, Line 4i - Schedule of Assets (Held at End of Year) has been subjected to audit procedures performed in conjunction with the audit of First Security Group, Inc. 401(k) and Employee Stock Ownership Plan's financial statements. The supplemental schedule is the responsibility of the Plan's management. Our audit procedures included determining whether the information presented in the supplemental schedule reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental schedule. In forming our opinion on the supplemental schedule, we evaluated whether the supplemental schedule, including its form and content, is presented in conformity with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental schedule is fairly stated in all material respects in relation to the financial statements taken as a whole.






/s/ Crowe Horwath LLP
Franklin, Tennessee
June 18, 2015









1




FIRST SECURITY GROUP, INC. 401(k) AND EMPLOYEE
STOCK OWNERSHIP PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

December 31, 2014 and 2013

 
 
 
 
 
 
 
 
 
December 31, 2014
 
December 31, 2013
ASSETS
 
 
 
 
 
Investments, at fair value
 
 
 
 
 
Interest-bearing cash
 
 
$
2,524

 
$
1,269

Collective trust fund
 
 
1,742,442

 
1,908,154

Investment in First Security Group, Inc. common stock
 
 
588,309

 
560,212

Mutual funds
 
 
5,477,048

 
5,925,916

Employer contribution
receivable
 
 
32,828

 
34,349

Total assets
 
 
7,843,151

 
8,429,900

 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
Excess contributions payable
 
 

 
3,430

Accrued expenses
 
 
8,944

 
41,250

Total liabilities
 
 
8,944

 
44,680

 
 
 
 
 
 
NET ASSETS AVAILABLE
 FOR BENEFITS
 
 
$
7,834,207

 
$
8,385,220



The accompanying notes are an integral part of the financial statements.




2



FIRST SECURITY GROUP, INC. 401(k) AND EMPLOYEE
STOCK OWNERSHIP PLAN

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

Year Ended December 31, 2014
    
 
 
 
 
 
 
 
December 31, 2014
ADDITIONS
 
 
 
Investment income
 
 
 
Other dividend and interest income
 
 
$
393,543

 
 
 
 
Contributions
 
 
 
Employer
 
 
107,120

Participants
 
 
603,266

Rollover
 
 
17,449

 
 
 
727,835

 
 
 
 
Total additions
 
 
1,121,378

 
 
 
 
DEDUCTIONS
 
 
 
Net depreciation in fair value of investments

 
 
42,746

Benefits paid to participants
 
 
1,620,701

Administrative expenses
 
 
8,944

 
 
 
 
Total deductions
 
 
1,672,391

 
 
 
 
NET DECREASE
 
 
(551,013
)
 
 
 
 
NET ASSETS AVAILABLE FOR BENEFITS
 
 
 
Beginning of year
 
 
8,385,220

End of year
 
 
$
7,834,207


The accompanying notes are an integral part of the financial statements.


3



First Security Group, Inc. 401(k) and
Employee Stock Ownership Plan

Notes to Financial Statements
December 31, 2014 and 2013



NOTE 1 - PLAN DESCRIPTION

The following description of the First Security Group, Inc. 401(k) and Employee Stock Ownership Plan (the Plan) is provided for general information purposes only. More complete information regarding the Plan's provisions is provided in the Plan documents.

General
The Plan, as amended, is a defined contribution plan covering all employees of First Security Group, Inc. and Subsidiary (the Company) who have completed 90 days of service and are twenty-one years of age or older. Employees that have not met the age requirement are eligible to participate in the Plan after completing 1 year of service with at least 1,000 hours of service. The Plan is subject to the provisions of the Employee Retirement Income Security Act (ERISA) and designed to comply with all regulations of the Internal Revenue Service (IRS).

Within the Plan, there are two parts, the Employee Stock Ownership Plan (ESOP) and the 401(k) Plan (401(k)). Unless specified, the following information applies to both parts of the Plan.

Contributions
401(k) - Each year, participants may contribute up to 75 percent of pretax annual compensation, not to exceed the annual limitations set by the IRS. Participants may also contribute amounts representing eligible rollover distributions from other eligible retirement plans. Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan currently offers seventeen mutual funds and one collective trust fund, as well as Company stock as the investment options for participants. The Company matches eligible employee contributions dollar for dollar in Company common stock up to 1 percent of the participant's eligible compensation. The Plan provides immediate vesting and immediate diversification of the Company contributions. As such, the Company contributions are considered to be participant directed transactions. Contributions are subject to certain limitations.

ESOP - Discretionary contributions can be made at the option of the Company's Board of Directors. The Company did not make any discretionary contributions in 2014.

Participant Accounts
401(k) - Each participant's account is credited with the participant's contribution and allocations of (a) the Company's contribution, (b) Plan earnings, and is charged with his or her withdrawals and an allocation of Plan expenses. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account.

ESOP - Each participant's account is credited with the allocated shares of Company stock. Stock dividends on shares held by participants are credited to each participant's account. Based on each participant's election, cash dividends on shares may be (a) credited to the participant account and reinvested in Company stock or (b) distributed in cash to the participant.

Forfeitures and Vesting
Effective January 1, 2007, all participants were fully vested in Company matching contributions and any earnings thereon. Effective August 26, 2009, prior forfeited balances of terminated participants' non-vested accounts are available to pay administrative expenses of the Plan or to reduce Company contributions to the Plan. As of December 31, 2014 and 2013, forfeited nonvested accounts totaled $8,944 and $43,084, respectively. During 2014, the Company used $41,250 of the 2013 forfeited nonvested accounts to pay administrative expenses of the Plan. Forfeitures were not used to reduce employer contributions during the year.

Payment of Benefits
401(k) - Upon termination of service due to death, disability or retirement, or for other reasons, a participant will receive a lump-sum distribution equal to the value of the participant's vested interest in his or her account.

ESOP - Upon termination of service due to death, disability or retirement, a participant will receive the vested portion of his or her account in whole shares of Company stock, cash or a combination of both as elected by the participant.


4



Voting Rights
Each participant is entitled to exercise voting rights attributable to the shares allocated to his or her account and is notified by FSGBank, N.A., the Trustee of the Plan (the Trustee), prior to the time that such rights are to be exercised. The Trustee is not permitted to vote any allocated shares for which instructions have not been given by a participant.

Diversification
A participant may diversify his or her account, including the allocated Company stock in the ESOP, to any available investment options of the Plan.

Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become fully vested in their employer contributions.

Fees
Investment management fees and operating expenses charged to the Plan for investments in the mutual funds are deducted from income earned on a daily basis and are not separately reflected. Consequently, management fees and operating expenses are reflected as a reduction of investment return for such investments.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies and practices followed by the Plan are as follows:

Basis of Accounting
The accompanying financial statements are prepared on the accrual basis of accounting.

Investment Valuation and Income Recognition
The Plan's investments are stated at fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

Fair value measurements and disclosures (ASC 820) defines fair value as the price that would be received by the Plan for an asset or paid by the Plan to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date in the Plan's principal or most advantageous market for the asset or liability. ASC 820 establishes a fair value hierarchy which requires the Plan to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The hierarchy places the highest priority on unadjusted quoted market prices in active markets for identical assets or liabilities (level 1 measurements) and gives the lowest priority to unobservable inputs (level 3 measurements). The three levels of inputs within the fair value hierarchy are defined as follows:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Plan has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect the Plan's own assumptions about the assumptions that market participants would use in pricing an asset or liability.

In many cases, a valuation technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.

The following descriptions of the valuation methods and assumptions used by the Plan to estimate the fair values of investments apply to investments held directly by the Plan.

Mutual funds: The fair values of mutual fund investments are determined by obtaining quoted prices on nationally recognized securities exchanges (level 1 inputs).

Company common stock: Investments in Company common stock are valued by quoted market prices on a nationally recognized securities exchange (level 1 inputs).

5




Collective trust fund: The fair value of interests in the collective trust fund (the fund) classified as a stable value fund is based upon the net asset value of such fund reflecting all investments at fair value, including indirect interests in fully benefit responsive contracts, as reported in the audited financial statements of the fund (level 2 inputs). The Company has elected to adopt Accounting Standards Update ("ASU") 2015-07 - Fair Value Measurement (Topic 820), Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). By early adopting this ASU, the Company is no longer required to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient (see Note 3). As required by the ASU, the Company has applied this amendment retrospectively to all periods presented. The collective trust has underlying investments in guaranteed investment contracts (GICs), synthetic GICs and money market instruments that potentially have investments in various high-quality, short-term, fixed-income securities that can be carried at contract value and investment companies invested primarily in such high-quality, short-term, fixed-income securities. The fund may invest in any other fixed-income securities that can be carried at contract value, including bank investment contracts (BICs), annuities, group annuity contracts and funding agreements issued by insurance companies. Under normal market conditions, the fund will attempt to invest at least 90% of its assets in GICs and synthetic GICs. The fund generally will attempt to maintain a cash position between 5% and 10% of total fund assets, which will be invested in money market instruments. No more than 10% of the fund's total assets at the time of purchase will be invested in GICs issued by any single insurance company. The fund maintains a weighted average credit quality of at least AA. The collective trust provides for daily redemptions by the Plan at reported net asset values per share, with no advance notice requirement for funding participant directed transactions. Other withdrawals from the fund require 12 months advance written notice. The investment objective of the fund is stability of principal and high current income.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

See Note 3 for additional information on fair value.

Net Appreciation (Depreciation) in the Fair Value of Investments
The Plan presents in the Statement of Changes in Net Assets Available for Benefits the net appreciation (depreciation) in the fair value of its investments, which consist of realized gains and losses and the unrealized appreciation (depreciation) on those investments.

Fully Benefit-Responsive Investment Contracts
While Plan investments are presented at fair value in the Statement of Net Assets Available for Benefits, any material difference between the fair value of the Plan's direct and indirect interests in fully benefit-responsive investment contracts and their contract value is presented as an adjustment line in the Statement of Net Assets Available for Benefits, because contract value is the relevant measurement attribute for that portion of the Plan's net assets available for benefits. Contract value represents contributions made to a contract, plus earnings, less participant withdrawals and administrative expenses. Participants in fully benefit-responsive contracts may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. The Plan holds an indirect interest in such contracts through its investment in a stable value fund. No adjustments from fair value to contract value are presented in the Statement of Net Assets Available for Benefits, as the amounts of the adjustments have been determined to be immaterial.

Risks and Uncertainties
The Plan's investments consist of a combination of investments. Investments are exposed to various risks, such as interest rate, market, liquidity and credit risks. Due to the level of risk associated with certain investments and the sensitivity of certain fair value estimates to changes in valuation assumptions, it is at least reasonably possible that changes in risks in the near term would materially affect participants' account balances and the amount reported in the financial statements. See Note 6 for concentration of market risks and other exposures.

Payment of Benefits
Benefits are recorded when paid.


6



Excess Contributions
Refunds of excess participant deferral contributions may be required to satisfy the relevant nondiscrimination provisions of the Plan. Such refunds are accrued as a liability and reduction in contributions in the Plan year in which the excess deferrals were made to the Plan.

Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.



NOTE 3 - FAIR VALUE

As described in Note 2, the Plan uses fair value, as defined by ASC 820, for the Plan investments. Investments measured at fair value on a recurring basis are summarized below:

Plan Investments Measured at Fair Value on a Recurring Basis as of December 31, 2014
 
Balance as of December 31, 2014
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
 
 
 
 
 
 
 
     Collective trust fund
$
1,742,442

1 
$

 
$

 
$

     Domestic equity mutual funds
3,236,189

 
3,236,189

 

 

     Foreign equity mutual funds
310,733

 
310,733

 

 

     Bond mutual funds
688,027

 
688,027

 

 

     Life cycle mutual funds
1,242,099

 
1,242,099

 

 

     Company common stock
588,309

 
588,309

 

 

     Interest-bearing cash
2,524

 
2,524

 

 


There were no transfers between levels 1 and 2 during 2014.

Plan Investments Measured at Fair Value on a Recurring Basis as of December 31, 2013
 
Balance as of December 31, 2013
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
 
 
 
 
 
 
 
     Collective trust fund
$
1,908,154

1 
$

 
$

 
$

     Domestic equity mutual funds
3,502,868

 
3,502,868

 

 

     Foreign equity mutual funds
435,825

 
435,825

 

 

     Bond mutual funds
730,876

 
730,876

 

 

     Life cycle mutual funds
1,256,347

 
1,256,347

 

 

     Company common stock
560,212

 
560,212

 

 

     Interest-bearing cash
1,269

 
1,269

 

 


1In accordance with ASC 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this total are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statements of net assets available for benefits.




7



NOTE 4 - INVESTMENTS

The fair value of the individual investments applicable to the 401(k) that represent 5 percent or more of the Plan's net assets available for benefits are separately identified as follows:

 
December 31, 2014
 
December 31, 2013
 
Interest-bearing Cash
 
 
 
 
Other Funds *
$
2,524

 
$
1,269

 
 
 
 
 
 
Collective Trust Fund
 
 
 
 
Federated Capital Preservation Fund ISP
1,742,442

 
1,908,154

 
 
 
 
 
 
Mutual Funds
 
 
 
 
T. Rowe Price Retirement 2020 ADV
721,343

 
778,781

 
Goldman Sachs Mid Cap Value - Service
520,512

 
553,315

 
Hartford Midcap R4
598,770

 
750,963

 
Federated Max Cap Index Fund Svc
462,467

 
391,080

*
T. Rowe Price Blue Chip Growth Adv
804,287

 
781,689

 
T. Rowe Price Equity Income Fund - R
484,862

 
569,368

 
Federated Total Return Bond Svc
562,778

 
630,893

 
Other Funds *
1,322,029

 
1,469,827

 
 
5,477,048

 
5,925,916

 
 
 
 
 
 
Company Stock
 
 
 
 
First Security Group, Inc. Common Stock
588,309

 
560,212

 
 
 
 
 
 
TOTAL INVESTMENTS
$
7,810,323

 
$
8,395,551

 

* Fair value of investments did not represent 5 percent or more of the Plan's net assets available for benefits.

During 2014, the mutual funds within the 401(k) (including gains and losses on investments bought and sold as well as held during the year) depreciated in value by $31,991.

ESOP - The ESOP's investments consist solely of the Company's common stock as follows:

 
December 31, 2014
 
December 31, 2013
 
 
 
 
Number of shares
260,313

 
243,570

Cost
$
448,440

 
$
406,961

Fair value
$
588,309

 
$
560,212


The fair value of the Company's common stock represents 5 percent or more of the Plan's net assets available for benefits as of December 31, 2014 and 2013. The fair value of the ESOP investments have been measured by quoted prices in an active market. In addition to the matching ESOP contributions, participants may directly purchase Company common stock and may reinvest Company common stock cash dividends into additional shares. These participant-directed investments into Company common stock are purchased in open market transactions. The Company common stock depreciated in value by $10,755 during 2014.

8





NOTE 5 - TAX STATUS

The Internal Revenue Service has determined and informed the Company, by a letter dated September 24, 2013, that the Plan and the related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has not been amended since receiving the determination letter. The Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC.

U.S. generally accepted accounting principles requires plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2014 and 2013, there are no uncertain tax positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The plan administrator believes it is no longer subject to income tax examinations for years prior to 2011.


NOTE 6 - CONCENTRATION OF MARKET RISKS AND OTHER EXPOSURES

The Plan had investments in the common stock of the Company of $588,309, approximating 7.5 percent of total assets and net assets available for benefits as of December 31, 2014, and $560,212, approximating 6.6 percent of total assets and 6.7 percent of net assets available for benefits as of December 31, 2013.

The investments in the common stock of the Plan Sponsor are exposed to market risk and potential economic loss that may result from adverse changes in fair value. Other investments of the Plan are also exposed to various risks, such as interest rate, market, liquidity and credit risks that may result in adverse changes in fair value.

Due to the level of risk associated with the common stock of the Company and other investments of the Plan and the sensitivity of certain fair value estimates to changes in valuation assumptions, it is reasonably possible that changes in the values of investments will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the Statement of Net Assets Available for Benefits.


NOTE 7 - PLAN AMENDMENTS

From time to time, the Plan has been amended to comply with the provisions of ERISA and all applicable regulations of the IRS.


NOTE 8 - PARTY-IN-INTEREST TRANSACTIONS

Parties in interest are defined under Department of Labor regulations as any fiduciary of the Plan, any party rendering service to the Plan, the employer, and certain others. The Plan holds shares of First Security Group, Inc. common stock, and recognized no dividend income during 2014 from this related party investment. Certain administrative functions are performed by officers or employees of the Company. No such officer or employee receives compensation from the Plan. The Company pays a majority of administrative fees on behalf of the Plan, including all legal and accounting fees. The participants of the Plan are responsible for all advisory and investment fees. Great West Financial is the recordkeeper for the Plan. EMJAY Corporation is the custodian for the Plan.

On May 10, 2013, the Retirement Committee, under the authorization provided in the Plan Document, directed and approved the sale of 105,315 allocated shares of Company common stock in the Plan. The stock was sold over a four day business period of May 17 through May 22, 2013 at an average share price of $4.90 and the proceeds were allocated to each respective participant account. Additionally, a stock subscription rights offering "rights offering" (opportunity to purchase shares at $1.50 per share), was provided to all Company common stock shareholders as of April 10, 2013. In order to treat the plan participant shareholders the same as other shareholders, the Plan participated in the rights offering. The rights offering period commenced on August 21, 2013 and ended on September 27, 2013. A total of 343,268 shares of Company common stock were purchased by participants at $1.50 per share during the rights offering period.


9



In June 2014, the Company submitted a retroactive Prohibited Transaction Exemption application to the U.S. Department of Labor. The application relates to the acquisition and holding of the stock rights by the Plan, as employer stock rights are not identified as "qualified employer securities" under ERISA. Although Company common stock qualifies as "qualified employer securities," subscription rights to acquire stock do not technically fall within that definition. Therefore, to comply with relevant Department of Labor guidance, the Company submitted the exemption application. The Department of Labor has granted such exemptions to other plan sponsors in similar situations and Plan management believes the application relating to the Company will be granted as well. As of the date of this report, the Company's application is still pending.


NOTE 9 - TRUSTEE

The Trustee under the Plan shall have no discretionary authority or responsibility to direct the investment of assets under the Plan other than as specifically directed by the Retirement Committee of the Company or participants and beneficiaries of the Plan.


NOTE 10 - SUBSEQUENT EVENTS

On March 25, 2015, First Security Group, Inc. (the "Plan Sponsor" or "First Security") and Atlantic Capital Bancshares, Inc. ("Atlantic Capital") entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which the Plan Sponsor will merge with and into Atlantic Capital (the "Merger"), with Atlantic Capital continuing as the surviving corporation (the "Surviving Company"). Immediately following the Merger, Atlantic Capital Bank, the wholly-owned bank subsidiary of Atlantic Capital, will merge with and into FSGBank, First Security's wholly-owned bank subsidiary, with FSGBank continuing as the surviving bank (the "Bank Merger"). Following completion of the Bank Merger, the Surviving Bank will change its name to "Atlantic Capital Bank, National Association."

The Merger is still subject to regulatory approval and other conditions set forth in the Merger Agreement. The transaction is expected to close in the fourth quarter of 2015. The current effect on the Plan is unknown at this time.


10


































SUPPLEMENTAL SCHEDULE







FIRST SECURITY GROUP, INC. 401(k) AND EMPLOYEE
STOCK OWNERSHIP PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
Schedule H, Part IV, Line 4(i) to Form 5500

December 31, 2014


Employer Identification Number: 58-246148 Plan Number: 001

Identity of Issue, Borrower,
Description
 
Current
  Lessor or Similar Party
Of Investment
Cost
Value
 
 
 
 
Interest-bearing Cash:
 
 
 
*First Security Stock Awaiting Purchase Fund

**
$
2,524

 
 
 
 
Collective Trust Fund:
 
 
 
Federated Capital Preservation Fund ISP
174,244 units

**
1,742,442

 
 
 
 
Mutual Funds:
 
 
 
T. Rowe Price Retirement 2010 ADV
14,993 units

**
264,783

T. Rowe Price Retirement 2020 ADV
35,034 units

**
721,343

T. Rowe Price Retirement 2030 ADV
9,300 units

**
212,592

T. Rowe Price Retirement 2040 ADV
1,100 units

**
26,118

T. Rowe Price Retirement 2050 ADV
1,297 units

**
17,265

American Funds New World Fund R3
6 units

**
295

T. Rowe Price Int'l Growth & Income R
22,431 units

**
310,438

Baron Small Cap Fund
2,845 units

**
94,771

Franklin Small Cap Value Fund - R
954 units

**
51,051

Goldman Sachs Mid Cap Value - Service
12,808 units

**
520,512

Hartford Midcap R4
21,128 units

**
598,770

Federated Max Cap Index Fund Svc
28,868 units

**
462,467

T. Rowe Price Blue Chip Growth Adv
12,049 units

**
804,287

T. Rowe Price Equity Income Fund - R
14,841 units

**
484,862

Federated Global Allocation Fund A
12,026 units

**
219,467

Federated High Yield Fund SS
18,666 units

**
125,249

Federated Total Return Bond Svc
50,976 units

 
562,778

Common Stock:
 
 
 
*First Security Group, Inc. (allocated to participants)
260,313 shares

**
588,309

 
 
 
 
TOTAL INVESTMENTS
 
 
$
7,810,323

 
 
 
 

*A party-in-interest as defined by ERISA.
**Cost omitted for participant directed investments.



11



EXHIBITS



The following exhibits are filed with this statement:

Exhibit No.     Description

23.1     Consent of Crowe Horwath LLP.



12



SIGNATURES




Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

 
FIRST SECURITY GROUP, INC. 401(k) AND EMPLOYEE STOCK OWNERSHIP PLAN
 
  
 
Date: June 18, 2015
By:  
FSGBank, N.A.,
as trustee

By:/s/ John R. Haddock                
John R. Haddock
Secretary, Chief Financial Officer & Executive Vice President



13




Exhibit Index

    
 
Exhibit No.
Description
 
 
 
 
23.1
Consent of Crowe Horwath LLP.



14






Exhibit 23.1




CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


We consent to the incorporation by reference in Registration Statement No. 333-139736 on Form S-8 of First Security Group, Inc. of our report dated June 18, 2015 appearing in this Annual Report on Form 11-K of First Security Group, Inc. 401(k) and Employee Stock Ownership Plan for the year ended December 31, 2014.


/s/ Crowe Horwath LLP
Franklin, Tennessee
June 18, 2015



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