Security Bancorp, Inc. Announces Second Quarter Earnings

MCMINNVILLE, Tenn., Aug. 14, 2012 (GLOBE NEWSWIRE) -- Security Bancorp, Inc. ("Company") (OTCBB:SCYT) today announced consolidated earnings for the second quarter of its fiscal year ended December 31, 2012. The Company is the bank holding company for Security Federal Savings Bank of McMinnville, Tennessee ("Bank").

Net income for the three months ended June 30, 2012 was $285,000, or $0.74 per share, compared to $275,000, or $0.71 per share, for the same quarter last year. For the six months ended June 30, 2012, the Company's net income was $563,000, or $1.46 per share, compared to $491,000, or $1.28 per share, for the same period in 2011.

For the three months ended June 30, 2012, net interest income remained relatively unchanged at $1.2 million, reflecting a decrease of $20,000, or 1.7%, compared to the same period in 2011. The decrease in net interest income was primarily due to the reduction in interest income on loans. For the six months ended June 30, 2012, net interest income increased 0.73% from $2.3 million in the prior year to $2.4 million. The slight increase in net interest income is primarily due to the reduction in interest expense on customer deposits. Net interest income after provision for loan losses remained relatively unchanged at $1.1 million and $2.2 million for the three and six months ended June 30, 2012, respectively, compared to the same periods in 2011. 

Non-interest income for the three months ended June 30, 2012 was $636,000 compared to $556,000 for the same quarter of 2011, an increase of 14.4%.   For the six months ended June 30, 2012, non-interest income increased $160,000, or 15.1%, to $1.2 million from $1.1 million for the comparable period in 2011. The increases during the quarter and the six months ended June 30, 2012 were primarily attributable to increases in deposit fee income and gains on sale of loans due to the increased volume of mortgage activity.

Non-interest expense for the three months ended June 30, 2012 was unchanged at $1.2 million compared to the same period in 2011, reflecting a decrease of $7,000.   For the six months ended June 30, 2012, non-interest expense was $2.5 million, unchanged from the same period in 2011.

Consolidated assets of the Company were $160.2 million at June 30, 2012, compared to $157.9 million at December 31, 2011. The $2.3 million, or 1.5%, increase in assets is attributable to an increase in investment and cash balances which resulted from deposit increases and loan payoffs during the six months ended June 30, 2012. Loans receivable, net, decreased $2.0 million, or 1.7%, from $117.5 million at December 31, 2011 to $115.5 million at June 30, 2012. The 1.7% decrease in loans receivable was attributable to a decrease primarily in commercial lines of credit.

The provision for loan losses was $106,000 for the three months ended June 30, 2012 compared to $65,000 for the same quarter in 2011, an increase of 63.1%. The provision for loan losses was $191,000 for the six months ended June 30, 2012 compared to $125,000 in 2011, an increase of 52.8%. The increase in the provision for the three and six months ended June 30, 2012 is attributable to an increase in the amount of the monthly provision as a result of management's concerns regarding the state of the local economy. 

Non-performing assets decreased $190,000, or 9.8%, to $1.8 million at June 30, 2012 from $1.9 million at December 31, 2011. Based on its analysis of delinquent loans, non-performing loans and classified loans, management believes that the Company's allowance for loan losses of $1.3 million at June 30, 2012 was adequate to absorb known and inherent risks in the loan portfolio at that date. At June 30, 2012 the allowance for loan losses to non-performing assets was 74.91% compared to 78.95% at December 31, 2011.

Investment and mortgage-backed securities available-for-sale increased $552,000, or 2.2%, to $25.7 million at June 30, 2012, compared to $25.1 million at December 31, 2011.  

Deposits increased $2.8 million, or 2.1%, to $138.5 million at June 30, 2012 from $135.7 million at December 31, 2011. The increase was primarily attributable to an increase in consumer checking, NOW accounts and certificates of deposit accounts.

Stockholders' equity increased $619,000, or 4.1%, to $15.9 million, or 9.9% of total assets at June 30, 2012 compared to $15.3 million, or 9.7%, of total assets, at December 31, 2011.

Safe-Harbor Statement

Certain matters in this News Release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may relate to, among others, expectations of the business environment in which the Company operates and projections of future performance. These forward-looking statements are based upon current management expectations, and may, therefore, involve risks and uncertainties. The Company's actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements as a result of a wide range of factors including, but not limited to, the general business environment, interest rates, competitive conditions, regulatory changes, and other risks.