Exhibit 99.1

First Security Group Announces Fourth Quarter Results

CHATTANOOGA, Tenn.--(BUSINESS WIRE)--January 27, 2011--First Security Group, Inc. (NASDAQ: FSGI), today reported a net loss available to common shareholders of $11.8 million, or $0.75 per diluted share for the quarter ending December 31, 2010, and a net loss of $46.4 million, or $2.95 per diluted share for the year. For 2010, First Security recorded $33.6 million in provision for loan and lease losses and established a $24.6 million valuation allowance for deferred taxes.

“All of us in senior management appreciate the support of shareholders and customers and the dedication of our employees. Knowing their level of commitment makes the most recent operating results all the more disappointing,” said Rodger B. Holley, Chairman and Chief Executive Officer of First Security. “Continued procedural improvements, led by our new President and Chief Operating Officer Gene Coffman, are underway. Mr. Coffman is managing the bank on a day-to-day basis and will continue spearheading our change initiatives.”

To better position First Security for short-term stability and long-term success, several important management changes have taken place over the past year. In addition to the hiring of the president and chief operating officer, an experienced chief credit officer joined the Bank in the second quarter of 2010 to oversee credit administration. The positions of chief risk officer, retail banking president and commercial banking president were also created and filled during 2010.

These organizational changes provide centralized oversight and control. Market executives were also appointed to maintain local knowledge and uphold the Bank’s commitment to superior customer service. Operationally, loan underwriting, collections and loan document areas have been centralized. Additionally, the marketing and sales of foreclosed residential and commercial properties has been outsourced to selective local and regional real estate firms. These changes ensure consistency, increase effectiveness and provide higher levels of operational efficiencies.

Fourth Quarter Overview

For the fourth quarter of 2010, net interest income totaled $7.9 million, a decline of 2.8 percent on a linked quarter basis and a decline of 25.2 percent from the fourth quarter of 2009. On a year-over-year basis, net interest income declined by 17.8 percent to $34.7 million in 2010. Lower net interest income is primarily attributed to decreased interest income from reductions in the loan portfolio and increased interest costs associated with higher levels of brokered deposits, partially offset by reductions in interest expense on customer deposits.

Non-interest income for the fourth quarter of 2010 totaled $2.2 million, 6.9 percent lower than the third quarter of 2010, and 10.6 percent lower than the fourth quarter of 2009. On a linked quarter basis, most of the $167 thousand decline was due to reduced mortgage loan and related fee income. For 2010, non-interest income was $9.5 million, compared to $10.3 million in 2009. This decline was primarily due to $730 thousand less in total deposit fees and a $171 thousand reduction in gains on sales of assets.

Non-interest expense in the fourth quarter of 2010 declined to $11.1 million, from $12.5 million in the third quarter of 2010, and $12.1 million in the fourth quarter of 2009. Full-time equivalent employees declined to 311 as of December 31, 2010, from 325 at the end of the third quarter and 347 a year ago. Accordingly, salary and benefit expense declined by 6.2% on a linked quarter basis and 6.5% for the year. Expenses associated with nonperforming assets, including write-downs, losses and holding costs, totaled $1.6 million in the fourth quarter of 2010 and $6.3 million for the year.

In the fourth quarter of 2010, the provision for loan and lease losses declined to $7.2 million, from $18.4 million in the third quarter of 2010. The provision of $33.6 million for 2010 was 32.3% higher than the provision for 2009.

Economic uncertainty, higher unemployment rates and reduced consumer spending have created financial challenges for many owner-managed businesses and individuals. As of December 31, 2010, the allowance for loan and lease losses was $24.0 million or 3.30 percent of total loans, compared to $25.3 million, or 3.26 percent of total loans, as of September 30, 2010. Net charge-offs totaled $8.5 million, or 4.49 percent of average loans on an annualized basis during the fourth quarter of 2010.

From September 30, 2010, non-accrual loans and leases declined $1.0 million to $54.1 million at the end of the fourth quarter of 2010; the largest categories were construction and development (C&D) with $25.6 million, commercial real estate (CRE) loans with $10.0 million, and residential real estate with $8.9 million. During the same time period, other real estate owned increased $1.5 million to $24.4 million; and repossessed assets declined $466 thousand to $763 thousand. Additional detail on asset quality is available in the supplemental data following the financial highlights.

During the fourth quarter of 2010, loan balances declined by $50.3 million, or 6.5 percent (25.9 percent annualized) on a linked quarter basis. Most categories declined, and the reduction was concentrated in C&D loans, which declined by 17.3 percent (69.3 percent annualized) to $84.2 million, and CRE loans, which declined by 4.5 percent (17.9 percent annualized) to $226.4 million.

First Security’s loan portfolio consists of in-market loans originated throughout its branch network. The loan portfolio is well diversified with 34.7 percent in 1-4 family residential, 31.1 percent in CRE, 11.6 percent in C&D and 11.4 percent in commercial and industrial. Additional detail on the loan portfolio is available in the supplemental data following the financial highlights.

At December 31, 2010, deposits totaled $1.0 billion, a decline of $134.0 million, or 11.3 percent on a year over year basis. The majority of the decline was in the certificates of deposits with jumbo CDs declining $54.3 million and retail CDs declining $38.6 million over the last year. Noninterest bearing and interest bearing demand deposit accounts were stable.

First Security continues to consider a variety of strategic alternatives intended to achieve and maintain elevated capital ratios. Stockholders’ equity at the end of the fourth quarter of 2010 was $93.4 million, and common stockholders’ equity was $61.7 million. As of December 31, 2010, FSGBank was below the elevated capital ratios required by the Office of the Comptroller of the Currency, but continued to maintain capital ratios above the thresholds established for well-capitalized institutions under federal regulatory guidelines. In the area of liquidity, First Security maintains an elevated level of cash to fund prudent loans and future contractual obligations.

“The organizational changes made in 2010 have positioned us to return our focus to the business of banking,” said Ralph E. “Gene” Coffman, Jr., President and Chief Operating Officer. “While our special assets department continues to work to reduce nonperforming assets, our lenders are focused on meeting the needs of our credit worthy customers here in east Tennessee and north Georgia. We are committed to redoubling our efforts to implement our core strategies of addressing and improving asset quality, being the community bank of choice and returning to profitability.”

Webcast and Conference Call Information

First Security’s executive management team will host a conference call and simultaneous webcast on Thursday, January 27, 2011, at 3:00 PM Eastern Standard Time to discuss fourth quarter results. The webcast 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 $1.2 billion in assets. Founded in 1999, First Security’s community bank subsidiary, FSGBank, N.A. has 37 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 and internet banking services (www.FSGBank.com).

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.

Note Regarding Forward Looking Statements

Some of our statements contained in this release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events or our future financial performance and include statements about the competitiveness of the banking industry, potential regulatory obligations, our entrance and expansion into other markets, our other business strategies and other statements that are not historical facts. Forward-looking statements are not guarantees of performance or results. When we use words like “may,” “plan,” “contemplate,” “anticipate,” “believe,” “intend,” “continue,” “expect,” “project,” “predict,” “estimate,” “could,” “should,” “would,” “will,” and similar expressions, you should consider them as identifying forward-looking statements, although we may use other phrasing. These forward-looking statements involve risks and uncertainties and are based on our beliefs and assumptions, and on the information available to us at the time that these disclosures were prepared.

These forward-looking statements involve risks and uncertainties and may not be realized due to a variety of factors, including, but not limited to the following: deterioration in the financial condition of borrowers; changes in loan underwriting, credit review or loss reserve policies; the failure of assumptions underlying the establishment of reserves for possible loan losses; changes in political and economic conditions; changes in financial market conditions; fluctuations in markets for equity, fixed-income, commercial paper and other securities, which could affect availability, market liquidity levels, and pricing; governmental monetary and fiscal policies, as well as legislative and regulatory changes; First Security’s participation or lack of participation in governmental programs; First Security’s lack of participation in a “stress test” under the Federal Reserve’s Supervisory Capital Assessment Program; the effects of competition from other commercial banks, thrifts, and other financial institutions; and the effect of any mergers, acquisitions or other transactions, to which we or our subsidiary may from time to time be a party.

Many of these risks are beyond our ability to control or predict, and you are cautioned not to put undue reliance on such forward-looking statements. First Security does not intend to update or reissue any forward-looking statements contained in this release as a result of new information or other circumstances that may become known to First Security.

All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this Note. Our actual results may differ significantly from those we discuss in these forward-looking statements.

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.

CONTACT:
At First Security:
William L. (Chip) Lusk, Jr., CFO, 423-266-2000
clusk@FSGBank.com
or
Media Contact:
Melissa P. Kelly, 931-636-0909
principal@mpkandassociates.com