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Security Bancorp, Inc. Announces Third Quarter Earnings

MCMINNVILLE, Tenn., Nov. 10, 2014 (GLOBE NEWSWIRE) -- Security Bancorp, Inc. ("Company") (OTCBB:SCYT) today announced consolidated earnings for the third quarter of its fiscal year ended December 31, 2014. The Company is the bank holding company for Security Federal Savings Bank of McMinnville, Tennessee, a Tennessee chartered commercial bank.

Net income for the three months ended September 30, 2014 was $423,000, or $1.10 per share, compared to $280,000 or $0.73 per share, for the same quarter last year. For the nine months ended September 30, 2014, the Company's net income was $1.1 million, or $2.76 per share, compared to $852,000, or $2.21 per share, for the same period in 2013.

For the three months ended September 30, 2014, net interest income increased $151,000, or 11.9%, to $1.4 million compared to $1.3 million for the same period in 2013. The increase in net interest income was the result of an increase in interest income for the three months ended September 30, 2014 of $103,000, or 6.8%, and a decrease in interest expense of $48,000, or 19.6%. For the nine months ended September 30, 2014, net interest income increased $374,000, or 10.1%, to $4.1 million from $3.7 million for the same period in 2013. The increase in net interest income was the result of an increase in interest income for the nine months ended September 30, 2014 of $205,000, or 4.6%, and a decrease in interest expense of $169,000, or 21.6%. The increase in interest income and decrease in interest expense for the quarter and the nine months ended September 30, 2014 was primarily due to the reduction in interest expense on customer deposits as well as an increase in interest income due to loan growth. Net interest income after provision for loan losses increased $145,000, or 12.3%, to $1.3 million for the three months ended September 30, 2014 compared to $1.2 million for the same period in 2013. For the nine months ended September 30, 2014 net interest income after provision for loan losses increased $365,000, or 10.7%, to $3.8 million from $3.4 million for the same period in 2013.

Non-interest income for the three months ended September 30, 2014 was $545,000, an increase of $8,000, or 1.5%, compared to $537,000 for the same quarter of 2013. For the nine months ended September 30, 2014, non-interest income was $1.6 million, a decrease of $211,000, or 11.8%, compared to $1.8 million for the same period in 2013. The decreases during the quarter and the nine months ended September 30, 2014 were primarily attributable to a decrease in the gains on the sale of securities and gains on the sale of loans.

Non-interest expense for the three months ended September 30, 2014 decreased $28,000, or 2.2%, to $1.2 million from $1.3 million for the same period in 2013. For the nine months ended September 30, 2014, non-interest expense was $3.7 million, reflecting a decrease of $83,000, or 2.2%, from $3.8 million for the same period in 2013. The decreases during the quarter and the nine months ended September 30, 2014 were primarily due to a decrease in data processing expenses.

Consolidated assets of the Company were $174.6 million at September 30, 2014, compared to $159.1 million at December 31, 2013. The $15.5 million, or 9.7%, increase in assets is primarily attributable to an increase in net loans receivable. Loans receivable, net, increased $12.6 million, or 10.4%, to $133.0 million at September 30, 2014 from $120.4 million at December 31, 2013. The increase in loans receivable was primarily attributable to an increase in commercial real estate loans.

The provision for loan losses was increased slightly to $96,000 for the three months ended September 30, 2014 compared to $90,000 for the same period in 2013. The provision for loan losses was $279,000 for the nine months ended September 30, 2014 compared to $270,000 in the comparable period in 2013, an increase of $9,000, or 3.3%.

Non-performing assets decreased $239,000, or 15.7%, to $1.3 million at September 30, 2014 from $1.5 million at December 31, 2013. The decrease is attributable to the sales of other real estate owned and a decrease in non-accrual 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 $1.2 million at September 30, 2014 was adequate to absorb known and inherent risks in the loan portfolio at that date. At September 30, 2014 the allowance for loan losses to non-performing assets was 95.0% compared to 79.3% at December 31, 2013.

Investment and mortgage-backed securities available-for-sale increased $366,000, or 1.7%, to $22.4 million at September 30, 2014, compared to $22.1 million at December 31, 2013.

Deposits increased $8.1 million, or 5.9%, to $146.9 million at September 30, 2014 from $138.8 million at December 31, 2013. The increase was primarily attributable to increases in commercial checking and NOW account balances.

Stockholders' equity increased $741,000, or 4.5%, to $17.3 million, or 9.9% of total assets at September 30, 2014 compared to $16.6 million, or 10.4%, of total assets, at December 31, 2013.

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.

SECURITY BANCORP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(unaudited) (dollars in thousands)
Three months ended Nine months ended
OPERATING DATA September 30, September 30,
2014 2013 2014 2013
Interest income $1,616 $1,513 $4,675 $4,470
Interest expense 197 245 613 782
Net interest income 1,419 1,268 4,062 3,688
Provision for loan losses 96 90 279 270
Net interest income after provision for loan losses 1,323 1,178 3,783 3,418
Non-interest income 545 537 1,574 1,785
Non-interest expense 1,235 1,263 3,736 3,819
Income before income tax expense 633 452 1,621 1,384
Income tax expense 210 172 557 532
Net income $423 $280 $1,064 $852
Net income per share $1.10 $0.73 $2.76 $2.21
FINANCIAL CONDITION DATA At September 30, 2014 At December 31, 2013
Total assets $174,612 $159,107
Investment and mortgage backed securities available-for-sale 22,439 22,073
Loans receivable, net 133,023 120,448
Deposits 146,947 138,798
Repurchase agreements 8,957 2,588
Stockholders' equity 17,320 16,579
Non-performing assets 1,281 1,520
Non-performing assets to total assets 0.73% 0.96%
Allowance for loan losses 1,217 1,206
Allowance for loan losses to total loans receivable 0.91% 0.99%
Allowance for loan losses to non-performing assets 95.0% 79.34%

CONTACT: Joe Pugh President & Chief Executive Officer (931) 473-4483Source:Security Bancorp, Inc.