Security Bancorp, Inc. Announces First Quarter Earnings

MCMINNVILLE, Tenn., May 07, 2020 (GLOBE NEWSWIRE) -- Security Bancorp, Inc. (OTCBB “SCYT”) (“Company”) today announced consolidated earnings for the first quarter ended March 31, 2020.  The Company is the holding company for Security Federal Savings Bank of McMinnville, Tennessee (“Bank”).

Net income for the three months ended March 31, 2020 was $580,000, or $1.52 basic earnings per share, compared to $613,000, or $1.59 basic earnings per share, for the quarter ended March 31, 2019.

For the three months ended March 31, 2020, net interest income remained relatively stable at $1.9 million compared to the same period in 2019.  Total interest income increased to $2.5 million for the three months ended March 31, 2020 compared to $2.3 million for the same period in the previous year.  The increase of $191,000, or 8.4%, was primarily attributable to an increase in interest income from loans due to the growth in loans.  Total interest expense increased $99,000, or 23.4%, to $522,000 for the three months ended March 31, 2020, from $423,000 for the quarter ended March 31, 2019.  The increase in interest expense was primarily due to an increase in the interest paid on certificates of deposit and repurchase agreements.  Net interest income, after provision for loan losses, for the three months ended March 31, 2020 remained relatively stable at $1.9 million compared to the same period in 2019. 

Non-interest income for the three months ended March 31, 2020 was $412,000 compared to $378,000 for the three months ended March 31, 2019, an increase of $34,000, or 9.0%.  The increase was primarily attributable to an increase in gains on sale of loans due to an increase in the volume of mortgage activity.

Non-interest expense for the three months ended March 31, 2020 was $1.6 million compared to $1.4 million for the same period the prior year, an increase of $146,000, or 10.3%.  The increase was primarily due to an increase in the salaries and employee benefit expenses as well as an increase in occupancy costs.  

The Company’s consolidated assets increased $8.6 million, or 3.8%, to $233.0 million at March 31, 2020 from $224.5 million at December 31, 2019.  The increase in consolidated assets was funded primarily by an increase in certificates of deposit and repurchase agreements.  Loans receivable, net, increased $2.9 million, or 1.7%, to $173.8 million at March 31, 2020 from $171.0 million at December 31, 2019. 

The provision for loan losses was $30,000 for the three months ended March 31, 2020, an increase of $28,000 from $2,000 for the three months ended March 31, 2019. The increase of the provision for loan losses was due to the increase in loan balances.

Non-performing assets decreased $303,000, or 42%, to $417,000 at March 31, 2020 from $720,000 at December 31, 2019.  The decrease is primarily attributable to a decrease in other real estate owned.  Based on our analysis of delinquent loans, non-performing loans and classified loans, we believe that the Company’s allowance for loan losses of $1.7 million at March 31, 2020 is adequate to absorb known and inherent risks in the loan portfolio at that date. The allowance for loan losses at March 31, 2020 represented 407.91% of non-performing assets compared to 231.81% at December 31, 2019.  

Investments and mortgage-backed securities available-for-sale decreased $3.3 million or 9.2%, to $32.5 million at March 31, 2020 from $35.8 million at December 31, 2019.  The decrease was primarily due to maturities of investments.

Deposits increased $6.2 million, or 3.3%, to $193.2 million at March 31, 2020 from $187.0 million at December 31, 2019.  The increase was primarily attributable to an increase in certificates of deposit.

Stockholders’ equity at March 31, 2020 was $25.2 million, or 10.8% of total assets, compared to $24.7 million, or 11.0% of total assets at December 31, 2019.

Executive Orders addressing COVID-19 in Tennessee were not enacted until March 20^th 2020. Those resulting orders had not materially impacted financial results for the first quarter. The Bank is deemed an essential service and management implemented a variety of measures to insure the health and safety of our employees and customers. The impact of COVID-19 is continuously monitored and will be an ongoing due diligence factor for management for the remainder of 2020.

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 ,financial market conditions and other uncertainties resulting from the COVID-19  and other risks.

Contact:
Joe Pugh
President & Chief Executive Officer
(931) 473-4483