Security Bancorp, Inc. Announces Third Quarter Earnings

MCMINNVILLE, Tenn., Nov. 08, 2018 (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 ended December 31, 2018.

Net income for the three months ended September 30, 2018 was $603,000, or $1.55 per share, compared to $457,000, or $1.18 per share, for the same quarter last year. For the nine months ended September 30, 2018, the Company’s net income was $1.6 million or $4.21 per share, compared to $1.2 million, or $3.14 per share, for the same period in 2017.

For the three months ended September 30, 2018, net interest income increased $156,000, or 9.3%, to $1.8 million from $1.7 million for the same period in 2017.  For the nine months ended September 30, 2018, net interest income increased $461,000, or 9.6%, to $5.3 million from $4.8 million for the same period in 2017.  The increase in net interest income for the three months and nine months ended September 30, 2018 was primarily the result of an increase in interest income on loans and investments slightly reduced by an increase in interest expense.  Net interest income after provision for loan losses for the three months ended September 30, 2018 was $1.8 million, an increase of $128,000, or 7.6%, from the same period in the previous year.  For the nine months ended September 30, 2018, net interest income after provision for loan losses increased $422,000, or 8.8%, to $5.2 million from $4.8 million for the same period in 2017.  The primary reason for this increase during the three and nine months ended September 30, 2018 was an increase in net interest income.

Non-interest income for the three months ended September 30, 2018 was $441,000 compared to $409,000 for the same quarter of 2017, an increase of $32,000, or 7.8%.  The increase during the quarter ended September 30, 2018 was primarily attributable to an increase in the gains on sales of loans due to loan volume.  For the nine months ended September 30, 2018, non-interest income remained stable at $1.3 million, unchanged from the same period in 2017.

Non-interest expense was relatively stable at $1.4 million for the three months ended September 30, 2018 and the same period in 2017.  For the nine months ended September 30, 2018 non-interest expense increased $117,000, or 2.8%, to $4.3 million from $4.2 million for the same period in 2017.  The increase was primarily due to an increase in employee expense.

Consolidated assets of the Company were $205.7 million at September 30, 2018, compared to $203.6 million at December 31, 2017.  The $2.1 million, or 1.0%, increase in assets was a result of loan growth funded by a decrease in cash and due from bank accounts.  Loans receivable, net, increased $12.0 million, or 8.9%, to $146.2 million at September 30, 2018 from $134.2 million at December 31, 2017.  The increase in loans receivable was primarily attributable to an increase in commercial real estate loans.

The provision for loan losses increased $28,000 to $31,000 for the three months ended September 30, 2018 from $3,000 for the comparable period in 2017.  The provision for loan losses was $92,000 for the nine months ended September 30, 2018 compared to $53,000 in the comparable period in 2017, an increase of $39,000, or 73.6%. The increase in the provision during the three and nine months ended September 30, 2018 was the result loan growth.

Non-performing assets increased $73,000, or 10.7%, to $753,000 at September 30, 2018 from $680,000 at December 31, 2017.  The increase was 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 $1.5 million at September 30, 2018 was adequate to absorb known and inherent risks in the loan portfolio at that date.  At September 30, 2018 the allowance for loan losses to non-performing assets was 200.27% compared to 216.03% at December 31, 2017.

Investment and mortgage-backed securities available-for-sale decreased $1.7 million or 3.9%, to $41.0 million at September 30, 2018, compared to $42.7 million at December 31, 2017.  The decrease was due to principal payments and the maturities of investments.  There were no investment and mortgage-backed securities held-to-maturity at September 30, 2018 and December 31, 2017.

Deposits decreased $1.7 million, or 0.96%, to $176.4 million at September 30, 2018 from $178.1 million at December 31, 2017.  The decrease was primarily attributable to decreases in customer money market balances and certificates of deposit.  The balance in federal funds purchased and repurchase agreements decreased to $2.2 million at September 30, 2018 compared to $3.0 million at December 31, 2017, reflecting a decrease of $845,000, or 27.9%.  Advances from the Federal Home Loan Bank increased to $3.5 million as of September 30, 2018.

Stockholders’ equity increased $845,000, or 4.1%, to $21.3 million, or 10.4% of total assets at September 30, 2018 compared to $20.5 million, or 10.0%, of total assets, at December 31, 2017.

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 DATA Three months ended
 Sept 30,
Nine months ended
Sept 30,
  2018 2017 2018 2017
Interest income $2,150 $1,862 $6,135 $5,356
Interest expense 317 185 852 534
Net interest income 1,833 1,677 5,283 4,822
Provision for loan losses 31 3 92 53
Net interest income after provision for loan losses 1,802 1,674 5,191 4,769
Non-interest income 441 409 1,271 1,295
Non-interest expense 1,447 1,381 4,290 4,173
Income before income tax expense 796 702 2,172 1,891
Income tax expense 193 245 535 672
Net income $603 $457 $1,637 $1,219
Net Income per share (basic) $1.55 $1.18 $4.21 $3.14
         
FINANCIAL CONDITION DATA At Sept 30, 2018 At December 31, 2017
Total assets $205,674 $203,587
Investments and mortgage backed securities – available for sale 41,038 42,706
Loans receivable, net 146,160 134,187
Deposits 176,397 178,099
Fed Funds purchased and repurchase agreements 2,187 3,032
FHLB Borrowings 3,500 -0-
Stockholders’ equity 21,321 20,476
Non-performing assets 753 680
Non-performing assets to total assets 0.37% 0.33%
Allowance for loan losses 1,508 1,469
Allowance for loan losses to total loans receivable 1.02% 1.09%
Allowance for loan losses to non-performing assets 200.27% 216.03%