Year End 2014

February 16, 2015



As we stated last year, in 2014 we began to reap the benefits of our investment and further expansion into Evansville and Newburgh, Indiana along with Lexington, Kentucky. The performance illustrated below indicates our success in these and other areas.

  • Another record year for First Security in terms of performance, growth, and profitability
  • Earnings were $3.1 million, nearly triple over 2013 net income and an all-time record for First Security, Inc.
  • Over $67 million in asset growth, 14% above prior year
  • Opened the Wellington branch office in Lexington, Kentucky, our second in the market
  • Raised $31.7 million in new capital to help support our continued expansion and growth strategy
  • Registered First Security, Inc. as an OTC Bulletin Board Stock, symbol FIIT
  • All new branches show nice profitability
  • Credit quality continues to remain strong and better than our peers
  • Introduction of a Wealth Management division which includes brokerage, asset management, and other high net worth products and services

Our year-end 2014 financial report for First Security is enclosed. Financial highlights for the year are compared to one year ago unless indicated otherwise.

  • Assets at year end total $546 million, representing an increase of 14%.
  • Loans and Deposits - Loans increased 16%, while deposits remained relatively flat.

  • Deposit Mix - Our certificate of deposit balances, the higher cost deposit group, declined during 2014. This decline was offset by a meaningful increase of lower cost demand, savings, and money market deposit accounts resulting in a very positive impact on net interest income.

  • Tangible Book Value decreased $1.17 or 5%, primarily as a result of the significant amount of new capital raised during 2014.

  • Net Income for the 4th quarter was $1.1 million or an increase of $800,000 over the same quarter in 2013. Year-to-date net income was $3.1 million, an increase of $2.0 million or 182% over 2013.
  • Non-Interest Income, excluding investment gains, was up 30% for the year.

  • Non-Interest Expense was up only 1% for the year.

  • Non-Performing Assets to total assets were 0.75% at the end of 2014, an improvement of .22% from the prior year’s ratio of 0.97%.

  • Return on Assets improved from 0.25% to 0.62% for the year and improved from 0.24% to 0.81% compared to fourth quarter of 2013 to 2014.

  • Return on Equity for the year improved from 4.51% to 6.23% and improved from 4.78% to 7.58% compared to fourth quarter of 2013 to 2014.

  • Basic Earnings-Per-Share were $1.60, an increase of $0.20 per share or 14% over the prior year. Comparing fourth quarter of 2014 to 2013 reflects an increase of $0.11 per share or 30%.

Your Board of Directors has declared a dividend of $0.16 per share, our 46th consecutive dividend, to all shareholders of record as of February 15, 2015. Your check is enclosed or has been direct deposited into your account.

Maintaining strong credit quality will continue to be a focus. While not immune from credit losses, we have continued to perform better than our peer group. The total amount set aside as reserves to cover losses within the Company’s loan portfolio totals $4.8 million, representing 1.09% of total loans.

We had a major conversion to a new core-processing system this past fall. This new system will provide us the means to continue to grow for years to come. As with all change, issues have emerged that we are quickly clearing up. If you experienced some of those issues, please call us so that we may provide you with the service you deserve. Coming soon is our Mobile Banking service.

We opened our 11th branch, located in Lexington, Kentucky, the first week of January of this year. We took advantage of an opportunity to purchase a former bank branch building off Reynolds Road on Ruccio Way known in the Lexington area as Wellington. This is our second location in Lexington, and is currently our fastest growing market in the company. Click on “locations” on our website, www.firstsecurity.net to view a picture of the new facility.

With strong capital and good earnings, we believe we are building a franchise that positions us well for many years to come. We continue to look at opportunities to expand not only in the existing markets we serve but also in other strategic locations. We are keenly focused on balancing our investments while still providing solid, long-term returns for our shareholders.

As always, please feel free to contact us should you have any questions, suggestions, or comments. We thank you for your continued support and welcome any opportunity to provide you with banking products and services to meet your needs. My direct number is 270-663-4678 or feel free to email me at LCooper@FirstSecurity.net. Thank you for your investment in First Security.



M. Lynn Cooper                                                                                 James T. “Tab” Quisenberry

President and CEO                                                                            Chairman of the Board



Equal Housing Lender   Member FDIC
©Copyright 2008 - 2013 First Security Bank