Security Bancorp, Inc. Announces Third Quarter Earnings

MCMINNVILLE, Tenn., Nov. 14, 2013 (GLOBE NEWSWIRE) -- Security Bancorp, Inc. ("Company") (OTCBB:SCYT) today announced consolidated earnings for the third quarter of its fiscal year ended December 31, 2013. The Company is the bank holding company for Security Federal Savings Bank of McMinnville, Tennessee ("Bank").

Net income for the three months ended September 30, 2013 was $280,000, or $0.73 per share, compared to $303,000, or $0.79 per share, for the same quarter last year. For the nine months ended September 30, 2013, the Company's net income was $852,000, or $2.21 per share, compared to $866,000, or $2.24 per share, for the same period in 2012.

For the three months ended September 30, 2013, net interest income increased $79,000, or 6.6%, to $1.3 million, compared to $1.2 million for the same period in 2012. For the nine months ended September 30, 2013, net interest income increased $137,000, or 3.9%, to $3.7 million, from $3.6 million for the same period in 2012. The increase in net interest income for the quarter and year-to-date is primarily due to the reduction in interest expense on customer deposits. Net interest income after provision for loan losses also increased $54,000, or 4.8% to $1.2 million for the three months ended September 30, 2013 from $1.1 million for the same period in 2012. For the nine months ended September 30, 2013, net interest income after provision for loan losses increased $123,000, or 3.7%, to $3.4 million from $3.3 million for the same period in 2012.

Non-interest income for the three months ended September 30, 2013 was $537,000 compared to $626,000 for the same quarter of 2012, a decrease of 14.2%.   For the nine months ended September 30, 2013, non-interest income remained relatively unchanged at $1.8 million, reflecting a decrease of $62,000, or 3.4%, compared to the same period in 2012. The decreases during the quarter and the nine months ended September 30, 2013 were primarily attributable to gains on the sale of securities offset by a reduction in the gains on the sale of loans.

Non-interest expense for the three months ended September 30, 2013 remained relatively unchanged at $1.3 million, reflecting an increase of $10,000 compared to the same period in 2012.  For the nine months ended September 30, 2013, non-interest expense increased $113,000, or 3.0%, to $3.8 million, compared to $3.7 million for the same period in 2012. The increases are primarily due to increases in data processing expense and expenses related to real estate owned.  Data processing expenses reflect an increase due to software conversion costs during the current year.

Consolidated assets of the Company were $162.3 million at September 30, 2013, compared to $163.2 million at December 31, 2012. The $913,000, or 0.56%, decrease in assets is primarily attributable to a decrease in the balances of repurchase agreements that were used to fund these assets as well as a decrease in investments and cash. Loans receivable, net, increased $1.8 million, or 1.5%, from $117.1 million at December 31, 2012 to $118.8 million at September 30, 2013. The increase in loans receivable was attributable to an increase primarily in consumer secured loans.

The provision for loan losses was $90,000 for the three months ended September 30, 2013 compared to $65,000 for the same quarter in 2012, an increase of $25,000 or 38.5%. The provision for loan losses was $270,000 for the nine months ended September 30, 2013 compared to $256,000 in the comparable period in 2012, an increase of $14,000, or 5.5%.

Non-performing assets increased $118,000, or 8.6%, to $1.5 million at September 30, 2013 from $1.4 million at December 31, 2012. Based on its analysis of delinquent loans, non-performing loans and classified loans, management believes that the Company's allowance for loan losses of $1.1 million at September 30, 2013 was adequate to absorb known and inherent risks in the loan portfolio at that date. At September 30, 2013 the allowance for loan losses to non-performing assets was 76.40% compared to 78.31% at December 31, 2012.

Investment and mortgage-backed securities available-for-sale decreased $769,000, or 3.0%, to $24.5 million at September 30, 2013, compared to $25.3 million at December 31, 2012.  

Deposits increased $72,000, or 0.05%, to $143.0 million at September 30, 2013 from $142.9 million at December 31, 2012. The increase was primarily attributable to an increase in consumer checking and savings account balances.

Stockholders' equity increased $338,000, or 2.1%, to $16.4 million, or 10.1% of total assets at September 30, 2013 compared to $16.1 million, or 9.8%, of total assets, at December 31, 2012.

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.