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Security Bancorp, Inc. Announces Second Quarter Earnings

MCMINNVILLE, Tenn., Aug. 11, 2015 (GLOBE NEWSWIRE) -- Security Bancorp, Inc. ("Company") (OTCBB:SCYT), the holding company for Security Federal Savings Bank of McMinnville, Tennessee, today announced consolidated earnings for the second quarter of its fiscal year ended December 31, 2015.

Net income for the three months ended June 30, 2015 was $268,000, or $0.69 per share, compared to $350,000, or $0.91 per share, for the same quarter last year. For the six months ended June 30, 2015, the Company's net income was $628,000, or $1.63 per share, compared to $642,000, or $1.66 per share, for the same period in 2014.

For the three months ended June 30, 2015 and 2014, net interest income was $1.4 million. For the six months ended June 30, 2015, net interest income increased $72,000, or 2.7%, to $2.7 million from $2.6 million for the same period in 2014. The increase in net interest income for the quarter and the six months ended June 30, 2015 was primarily due to the reduction in interest expense on customer deposits as well as an increase in interest income on investments. Net interest income after provision for loan losses for the three months ended June 30, 2015 was $1.3 million, unchanged from the same period in the previous year. For the six months ended June 30, 2015, net interest income after provision for loan losses increased $61,000, or 2.5%, but remained at $2.5 million, unchanged from the same period the previous year.

Non-interest income for the three months ended June 30, 2015 was $422,000 compared to $513,000 for the same quarter of 2014, a decrease of $91,000, or 17.7%. For the six months ended June 30, 2015, non-interest income was $920,000, reflecting a decrease of $109,000, or 10.6%, compared to $1.0 million for the same period in 2014. The decreases during the quarter and the six months ended June 30, 2015 were primarily attributable to a decrease in the income from financial services and deposit service charges.

Non-interest expense for the three and six months ended June 30, 2015 remained relatively unchanged for the same periods in 2014. For the three months ended June 30, 2015, non-interest expense was $1.3 million, reflecting an increase of $7,000, or 0.6%, from the same period in 2014. For the six months ended June 30, 2015, non-interest expense was $2.5 million, reflecting a decrease of $1,000 from the same period in 2014.

Consolidated assets of the Company were $180.2 million at June 30, 2015, compared to $175.6 million at December 31, 2014. The $4.6 million, or 2.6%, increase in assets is primarily attributable to an increase in investments which were funded by deposit growth and loan repayments. Loans receivable, net, decreased $6.7 million, or 5.3%, to $121.1 million at June 30, 2015 from $127.8 million at December 31, 2014. The decrease in loans receivable was attributable primarily to loan repayments on commercial real estate loans.

The provision for loan losses increased $7,000, or 7.8%, to $97,000 for the three months ended June 30, 2015 from $90,000 for the comparable period in 2014. The provision for loan losses was $194,000 for the six months ended June 30, 2015 compared to $183,000 in the comparable period in 2014, an increase of $11,000, or 6.0%.

Non-performing assets increased $128,000, or 11.3%, to $1.3 million at June 30, 2015 from $1.1 million at December 31, 2014. The increase is attributable to an increase 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 June 30, 2015 was adequate to absorb known and inherent risks in the loan portfolio at that date. At June 30, 2015 the allowance for loan losses to non-performing assets was 94.4% compared to 96.9% at December 31, 2014.

Investment and mortgage-backed securities available-for-sale increased $16.2 million, or 70.7%, to $39.1 million at June 30, 2015, compared to $22.9 million at December 31, 2014. The increase is attributable to the purchase of investments funded by deposit growth and loan repayments. There were no investment and mortgage-backed securities held-to-maturity at June 30, 2015 and December 31, 2014.

Deposits increased $7.3 million, or 4.9%, to $156.6 million at June 30, 2015 from $149.3 million at December 31, 2014. The increase was primarily attributable to increases in money market and savings accounts.

Stockholders' equity increased $553,000, or 3.1%, to $18.3 million, or 10.2% of total assets at June 30, 2015 compared to $17.8 million, or 10.1%, of total assets, at December 31, 2014.

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 Six months ended
OPERATING DATA June 30, June 30,
2015 2014 2015 2014
Interest income $1,555 $1,567 $3,101 $3,058
Interest expense 194 208 387 416
Net interest income 1,361 1,359 2,714 2,642
Provision for loan losses 97 90 194 183
Net interest income after provision for loan losses 1,264 1,269 2,520 2,459
Non-interest income 422 513 920 1,029
Non-interest expense 1,261 1,254 2,498 2,499
Income before income tax expense 425 528 942 989
Income tax expense 157 178 314 347
Net income $268 $350 $628 $642
Net income per share $0.69 $0.91 $1.63 $1.66
FINANCIAL CONDITION DATA At June 30, 2015 At December 31, 2014
Total assets $180,218 $175,590
Investment and mortgage backed securities available-for-sale 39,125 22,926
Investment and mortgage backed securities held-to-maturity -0-- -0--
Loans receivable, net 121,094 127,832
Deposits 156,565 149,302
Repurchase agreements 3,871 7,175
Stockholders' equity 18,308 17,755
Non-performing assets 1,260 1,132
Non-performing assets to total assets 0.70% 0.64%
Allowance for loan losses 1,190 1,097
Allowance for loan losses to total loans receivable 0.97% 0.85%
Allowance for loan losses to non-performing assets 94.44% 96.90%

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