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Security Bancorp, Inc. Announces Second Quarter Earnings

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MCMINNVILLE, Tenn., Aug. 07, 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 second quarter of its fiscal year ended December 31, 2018.

Net income for the three months ended June 30, 2018 was $532,000, or $1.37 per share, compared to $378,000, or $0.97 per share, for the same quarter last year. For the six months ended June 30, 2018, the Company's net income was $1.0 million or $2.67 per share, compared to $762,000, or $1.97 per share, for the same period in 2017.

For the three months ended June 30, 2018, net interest income increased $183,000, or 11.6%, to $1.8 million from $1.6 million for the same period in 2017.  For the six months ended June 30, 2018, net interest income increased $306,000, or 9.7%, to $3.5 million from $3.1 million for the same period in 2017.  The increase in net interest income for the three months and six months ended June 30, 2018 was primarily the result of an increase in interest income on loans and investments.  Net interest income after provision for loan losses for the three months ended June 30, 2018 was $1.7 million, an increase of $173,000, or 11.1%, from the same period in the previous year.  For the six months ended June 30, 2018, net interest income after provision for loan losses increased $295,000, or 9.5%, to $3.4 million from $3.1 million for the same period in 2017.  The primary reason for this increase during the three and six months ended June 30, 2018 was an increase in net interest income.

Non-interest income for the three months ended June 30, 2018 was $422,000 compared to $425,000 for the same quarter of 2017, a decrease of $3,000, or 0.7%.  The decrease during the quarter ended June 30, 2018 was primarily attributable to a decrease in the gains on sales of loans due to a lower volume of activity. For the six months ended June 30, 2018, non-interest income was $830,000, reflecting a decrease of $56,000, or 6.3%, compared to $886,000 for the same period in 2017. The decrease during the six months ended June 30, 2018 was primarily due to a decrease in gains on sales of loans.

Non-interest expense was relatively stable for both the three months and the six months ended June 30, 2018.  For the three months ended June 30, 2018 non-interest expense was $1.4 million and was $2.8 million for the six months ended June 30, 2018.   

Consolidated assets of the Company were $206.8 million at June 30, 2018, compared to $203.6 million at December 31, 2017.  The $3.2 million, or 1.6%, increase in assets was a result of loan growth funded by a decrease in cash and due from bank accounts.  Loans receivable, net, increased $7.0 million, or 5.2%, to $141.2 million at June 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 $10,000, or 50%, to $30,000 for the three months ended June 30, 2018 from $20,000 for the comparable period in 2017.  The provision for loan losses was $61,000 for the six months ended June 30, 2018 compared to $50,000 in the comparable period in 2017, an increase of $11,000, or 22%. The increase in the provision during the three and six months ended June 30, 2018 is the result loan growth.

Non-performing assets increased $8,000, or 1.2%, to $688,000 at June 30, 2018 from $680,000 at December 31, 2018.  The increase is attributable to an increase in 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 June 30, 2018 was adequate to absorb known and inherent risks in the loan portfolio at that date.  At June 30, 2018 the allowance for loan losses to non-performing assets was 214.24%% compared to 216.03% at December 31, 2017.

Investment and mortgage-backed securities available-for-sale increased $768,000, or 1.8%, to $43.5 million at June 30, 2018, compared to $42.7 million at December 31, 2017.  The slight increase was funded by a decrease in due from account balances.  There were no investment and mortgage-backed securities held-to-maturity at June 30, 2018 and December 31, 2017.

Deposits increased $1.9 million, or 1.1%, to $180.0 million at June 30, 2018 from $178.1 million at December 31, 2017.  The increase was primarily attributable to increases in customer savings account balances.  The balance in repurchase agreements increased to $3.5 million at June 30, 2018 compared to $3.0 million at December 31, 2017, reflecting an increase of $513,000, or 16.9%.

Stockholders' equity increased $741,000, or 3.6%, to $21.2 million, or 10.3% of total assets at June 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
 June 30,
Six months ended
June 30,
   2018  2017   2018  2017 
Interest income $2,046 $1,759 $3,986 $3,494
Interest expense 280 176 535 349
Net interest income 1,766 1,583 3,451 3,145
Provision for loan losses 30 20 61 50
Net interest income after provision for loan losses 1,736 1,563 3,390 3,095
Non-interest income 422 425 830 886
Non-interest expense 1,449 1,406 2,843 2,792
Income before income tax expense 709 582 1,377 1,189
Income tax expense 177 204 342 427
Net income $532 $378 $1,035 $762
Net Income per share (basic) $1.37 $0.97 $2.67 $1.97
         
FINANCIAL CONDITION DATA At June 30, 2018 At December 31, 2017
Total assets $206,787 $203,587
Investments and mortgage backed securities - available for sale 43,474 42,706
Loans receivable, net 141,189 134,187
Deposits 179,971 178,099
Repurchase agreements 3,545 3,032
Stockholders' equity 21,217 20,476
Non-performing assets 688 680
Non-performing assets to total assets 0.33% 0.33%
Allowance for loan losses 1,474 1,469
Allowance for loan losses to total loans receivable 1.03% 1.09%
Allowance for loan losses to non-performing assets 214.24% 216.03%

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