MCMINNVILLE, Tenn., Nov. 08, 2019 (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, 2019.

Net income for the three months ended September 30, 2019 was $644,000, or $1.67 per share, compared to $603,000, or $1.55 per share, for the same quarter last year. For the nine months ended September 30, 2019, the Company’s net income was $1.9 million or $4.95 per share, compared to $1.6 million, or $4.21 per share, for the same period in 2018.

For the three months ended September 30, 2019, net interest income increased $131,000, or 7.1%, to $2.0 million from $1.8 million for the same period in 2018.  For the nine months ended September 30, 2019, net interest income increased $477,000, or 9.0%, to $5.8 million from $5.3 million for the same period in 2018.  The increase in net interest income for the three months and nine months ended September 30, 2019 was primarily the result of an increase in interest income on loans due to loan growth.  Net interest income after provision for loan losses for the three months ended September 30, 2019 was $1.9 million, an increase of $123,000, or 6.8%, from the same period in the previous year.  For the nine months ended September 30, 2019, net interest income after provision for loan losses increased $528,000, or 10.2%, to $5.7 million from $5.2 million for the same period in 2018.  The primary reason for this increase during the three and nine months ended September 30, 2019 was an increase in net interest income.

Non-interest income for the three months ended September 30, 2019 was relatively stable at $442,000 and $441,000 for the same period in 2018.  For the nine months ended September 30, 2019, non-interest income was $1.2 million, reflecting a decrease of $45,000, or 3.5%, compared to $1.3 million for the same period in 2018. The decrease during the nine months ended September 30, 2019 was primarily attributable to a decrease in deposit service charges and fees.

Non-interest expense for the three months ended September 30, 2019 was $1.5 million, an increase of $54,000, or 3.7%, compared to $1.4 million for the same period in 2018.  For the nine months ended September 30, 2019 non-interest expense increased $98,000, or 2.3%, to $4.4 million from $4.3 million for the same period the previous year.  For the three months and nine months ended September 30, 2019 the increases were attributable to slight increases in employee expenses, occupancy expenses and data processing expenses.     

Consolidated assets of the Company were $217.9 million at September 30, 2019, compared to $213.6 million at December 31, 2018.  The $4.3 million, or 2.0%, increase in assets was a result of an increase in loans receivable.  Loans receivable, net, increased $12.2 million, or 8.2%, to $161.9 million at September 30, 2019 from $149.7 million at December 31, 2018.  The increase in loans receivable was primarily attributable to an increase in commercial real estate loans.

For the three months ended September 30, 2019 provision for loan losses was $39,000 compared to a $31,000 provision in the same period in 2018.  The provision for loan losses was $41,000 for the nine months ended September 30, 2019 compared to $92,000 in the comparable period in 2018, a decrease of $51,000.  

Non-performing assets increased $137,000, or 18%, to $900,000 at September 30, 2019 from $763,000 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 $1.6 million at September 30, 2019 was adequate to absorb known and inherent risks in the loan portfolio at that date.  At September 30, 2019 the allowance for loan losses to non-performing assets was 181.56% compared to 208.1% at December 31, 2018.

Investment and mortgage-backed securities available-for-sale decreased $5.0 million, or 12.7%, to $34.6 million at September 30, 2019, compared to $39.6 million at December 31, 2018.  The decrease was due to maturities and payments on investments used to fund loan growth.  There were no investment and mortgage-backed securities held-to-maturity at September 30, 2019 and December 31, 2018.

Deposits increased $4.0 million, or 2.3%, to $181.7 million at September 30, 2019 from $177.7 million at December 31, 2018.  The increase was primarily attributable to increases in commercial interest-bearing checking account balances.  The balance in repurchase agreements decreased to $3.8 million at September 30, 2019 compared to $7.7 million at December 31, 2018, reflecting a decrease of $3.8 million, or 50%.

Stockholders’ equity increased $1.9 million, or 8.7%, to $24.0 million, or 11% of total assets at September 30, 2019 compared to $22.1 million, or 10.4%, of total assets, at December 31, 2018.

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	2019	2018	2019
Interest income	$2,150	$2,416	$6,135	$7,057
Interest expense	317	452	852	1,297
Net interest income	1,833	1,964	5,283	5,760
Provision for loan losses	31	39	92	41
Net interest income after provision for loan losses	1,802	1,925	5,191	5,719
Non-interest income	441	442	1,271	1,226
Non-interest expense	1,447	1,501	4,290	4,388
Income before income tax expense	796	866	2,172	2,557
Income tax expense	193	222	535	646
Net income	$603	$644	$1,637	$1,911
Net Income per share (basic)	$1.55	$1.67	$4.21	$4.95
FINANCIAL CONDITION DATA	At September 30, 2019		At December 31, 2018
Total assets	$217,916		$213,579
Investments and mortgage backed securities - available for sale	34,573		39,591
Loans receivable, net	161,929		149,720
Deposits	181,696		177,654
Repurchase agreements	3,815		7,652
Federal Home Loan Bank Advances	6,000		4,000
Stockholders' equity	24,049		22,125
Non-performing assets	900		763
Non-performing assets to total assets	0.41%		0.36%
Allowance for loan losses	1,634		1,587
Allowance for loan losses to total loans receivable	1.00%		1.05%
Allowance for loan losses to non-performing assets	181.56%		208.1%

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