Security Bancorp, Inc. Announces Third Quarter Earnings

MCMINNVILLE, Tenn., Nov. 08, 2022 (GLOBE NEWSWIRE) -- Security Bancorp, Inc. (“Company”) (OTCBB: “SCYT”), the holding company for Security Federal Savings Bank of McMinnville, Tennessee, today announced its consolidated earnings for the third quarter of its fiscal year ended December 31, 2022.

Net income for the three months ended September 30, 2022 was $877,000, or $2.34 per share, compared to $671,000, or $1.79 per share, for the same quarter last year. For the nine months ended September 30, 2022, the Company’s net income was $2.2 million or $5.86 per share, compared to $2.0 million, or $5.26 per share, for the same period in 2021.

For the three months ended September 30, 2022, net interest income increased to $2.4 million from $1.9 million for the same period in 2021. The increase in net interest income for the three months ended September 30, 2022 was due to the increase in loan interest rates during the quarter as well as loan growth. For the nine months ended September 30, 2022, net interest income, compared to the same quarter in 2021 increased $1.0 million, or 18.6%, to $6.5 million. Net interest income after provision for loan losses for the three months ended September 30, 2022 was $2.4 million, an increase of $597,000, or 32.8%, from the same period in the previous year. For the nine months ended September 30, 2022, net interest income after provision for loan losses increased $1.1 million, or 20.9%, to $6.4 million from $5.3 million for the same period in 2021. The primary reason for the increases was an increase in interest income on loans as well as a decrease in provision for loan losses and interest expense on customer deposits.

Non-interest income for the three months ended September 30, 2022 was $451,000 compared to $693,000 for the same quarter of 2021, a decrease of $242,000, or 34.9%. Non-interest income for the nine months ended September 30, 2022 was $1.3 million compared to $2.0 million for the same period the prior year, a decrease of $645,000. The decrease during the three and nine months ended September 30, 2022 was primarily attributable to a decrease in the gains on the sale of loans due to the decrease in the volume of mortgage loan originations slightly offset by an increase in deposit and financial services fees.

Non-interest expense for the three months ended September 30, 2022 was $1.7 million for the three months ended September 30, 2022 compared to $1.6 million for the same period in 2021. For the nine months ended September 30, 2022, non-interest expense was $4.8 million, an increase of $184,000 from the same period in 2021. The increase in non-interest expense was attributable to an increase in data processing expenses and occupancy expenses.

Consolidated assets of the Company were $291.1 million at September 30, 2022, compared to $295.7 million at December 31, 2021. The $4.7 million, or 1.6%, decrease in assets was a result of a decrease in interest-bearing deposits and investments offset by an increase in loans receivable.   Loans receivable, net, increased $30.0 million, or 16.5%, to $211.2 million at September 30, 2022 from $181.2 million at December 31, 2021. The increase in loans receivable was primarily attributable to an increase in commercial real estate loans, including participation loans within the Middle Tennessee market.

For the three months ended September 30, 2022 the provision for loan losses was $30,000. The provision for loan losses was $91,000 for the nine months ended September 30, 2022 compared to $180,000 in the comparable period in 2021, a decrease of $89,000.

Non-performing assets increased $75,000, or 24.9%, to $376,000 at September 30, 2022 from $301,000 at December 31, 2021. The increase is attributable to an increase in non-performing loans. Based on its analysis of delinquent loans, non-performing loans and classified loans, management believes that the Company’s allowance for loan losses of $2.1 million at September 30, 2022 was adequate to absorb known and inherent risks in the loan portfolio at that date. At September 30, 2022, the allowance for loan losses to non-performing assets was 548.14% compared to 677.41% at December 31, 2021.

Investment and mortgage-backed securities available-for-sale decreased $3.9 million, or 6.6%, to $54.9 million at September 30, 2022, compared to $58.8 million at December 31, 2021. The decrease was due to investment paydowns and maturities. There were no investment and mortgage-backed securities held-to-maturity at September 30, 2022 and December 31, 2021.

Deposits decreased $2.9 million, or 1.1%, to $262.3 million at September 30, 2022 from $265.2 million at December 31, 2021. The decrease was primarily attributable to decreases in certificates of deposit.

Stockholders’ equity decreased $2.0 million or 7.3%, to $26.0 million, or 8.9% of total assets at September 30, 2022, compared to $28.0 million, or 9.5%, of total assets, at December 31, 2021. The decrease in stockholders’ equity is due to the increase in unrealized losses on securities available-for-sale primarily as a result of increases in market interest rates.

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.

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