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Security Bancorp, Inc. Announces Third Quarter Earnings

MCMINNVILLE, Tenn., Nov. 08, 2017 (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 third quarter of its fiscal year ending December 31, 2017.

Net income for the three months ended September 30, 2017 was $457,000, or $1.18 per share, compared to $348,000, or $0.90 per share, for the same quarter last year. For the nine months ended September 30, 2017, the Company’s net income was $1.2 million, or $3.14 per share, compared to $992,000, or $2.57 per share, for the same period in 2016.

For the three months ended September 30, 2017, net interest income increased $193,000, or 13%, to $1.7 million from $1.5 million for the same period in 2016. For the nine months ended September 30, 2017, net interest income increased $468,000, or 10.7%, to $4.8 million from $4.4 million for the same period in 2016. The increase in net interest income for the three months and nine months ended September 30, 2017 was primarily the result of an increase in interest income on loans and investments as well as a reduction in the interest expense on deposits. Net interest income after provision for loan losses for the three months ended September 30, 2017 was $1.7 million, an increase of $200,000, or 13.6%, from the same period in the previous year. For the nine months ended September 30, 2017, net interest income after provision for loan losses increased $493,000, or 11.5%, to $4.8 million from $4.3 million for the same period in 2016. The primary reason for this increase during the three and nine months ended September 30, 2017 was an increase in net interest income as well as a decrease in the provision for loan losses.

Non-interest income for the three months ended September 30, 2017 was $409,000 compared to $445,000 for the same quarter of 2016, a decrease of $36,000, or 8.1%. The decrease during the quarter ended September 30, 2017 was primarily attributable to a decrease in the gains on sales of loans and deposit service charges and fees. For the nine months ended September 30, 2017, non-interest income remained relatively unchanged at $1.3 million.

Non-interest expense for the three months ended September 30, 2017 was $1.4 million, relatively unchanged from the same period in 2016. For the nine months ended September 30, 2017, non-interest expense was $4.2 million, an increase of $100,000, or 2.5%, from $4.1 million for the same period in 2016. The increases during the three and nine months ended September 30, 2017 were attributable to increases in employee expense and data processing expense offset by a decrease in insurance premiums.

Consolidated assets of the Company were $199.8 million at September 30, 2017, compared to $190.2 million at December 31, 2016. The $9.6 million, or 5.0%, increase in assets was a result of funds received from an increase in deposits offset by a decrease in repurchase agreements. Loans receivable, net, increased $6.0 million, or 4.5%, to $138.4 million at September 30, 2017 from $132.4 million at December 31, 2016. The increase in loans receivable was primarily attributable to an increase in real estate loans.

The provision for loan losses decreased $7,000, or 70%, to $3,000 for the three months ended September 30, 2017 from $10,000 for the comparable period in 2016. The provision for loan losses was $53,000 for the nine months ended September 30, 2017 compared to $78,000 in the comparable period in 2016, a decrease of $25,000, or 32.1%. The decrease in the provision during the three and nine months ended September 30, 2017 was the result of improved asset quality.

Non-performing assets decreased $842,000, or 53.9%, to $720,000 at September 30, 2017 from $1.6 million at December 31, 2016. The decrease was attributable to a reduction in non-accrual loans and other real estate owned. Based on its analysis of delinquent loans, non-performing loans and classified loans, management believes that the Company’s allowance for loan losses of $1.5 million at September 30, 2017 was adequate to absorb known and inherent risks in the loan portfolio at that date. At September 30, 2017 the allowance for loan losses to non-performing assets was 205.97% compared to 92.0% at December 31, 2016.

Investment and mortgage-backed securities available-for-sale increased $207,000, or 0.58%, to $35.7 million at September 30, 2017, compared to $35.5 million at December 31, 2016. The increase is attributable to the purchase of investments funded by deposit growth. There were no investment and mortgage-backed securities held-to-maturity at September 30, 2017 and December 31, 2016.

Deposits increased $12.9 million, or 8.0%, to $175.4 million at September 30, 2017 from $162.4 million at December 31, 2016. The increase was primarily attributable to increases in interest-bearing deposits in savings and certificates of deposit. The balance in repurchase agreements was $1.9 million at September 30, 2017 compared to $6.6 million at December 31, 2016, reflecting a decrease of $4.8 million, or 72%.

Stockholders’ equity increased $1.0 million, or 5.2%, to $20.4 million, or 10.2% of total assets at September 30, 2017 compared to $19.4 million, or 10.2%, of total assets, at December 31, 2016.

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


SECURITY BANCORP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(unaudited) (dollars in thousands)
OPERATING DATAThree months ended
Sept 30,
Nine months ended
Sept 30,
2017201620172016
Interest income$1,862$1,668$5,356$4,916
Interest expense185184534562
Net interest income1,6771,4844,8224,354
Provision for loan losses3105378
Net interest income after provision for loan losses1,6741,4744,7694,276
Non-interest income4094451,2951,339
Non-interest expense1,3811,3734,1734,073
Income before income tax expense7025461,8911,542
Income tax expense245198672550
Net income$457$348$1,219$992
Net Income per share (basic)$1.18$0.90$3.14$2.57
FINANCIAL CONDITION DATAAt Sept 30, 2017At December 31, 2016
Total assets$199,799$190,242
Investments and mortgage backed securities - available for sale35,71735,510
Loans receivable, net138,379132,367
Deposits175,355162,362
Repurchase agreements1,8546,619
Stockholders' equity20,41919,417
Non-performing assets7201,562
Non-performing assets to total assets0.36%0.82%
Allowance for loan losses1,4831,437
Allowance for loan losses to total loans receivable1.06%1.07%
Allowance for loan losses to non-performing assets205.97%92.00%

Source:Security Bancorp, Inc.