Security Bancorp, Inc. Announces Third Quarter Earnings

MCMINNVILLE, Tenn., Nov. 03, 2023 (GLOBE NEWSWIRE) -- Security Bancorp, Inc. (“Company”) (OTCBB: “SCYT”), the holding company for Security Federal Savings Bank of McMinnville, Tennessee, today announced its consolidated earnings for the third quarter of its fiscal year ended December 31, 2023.

Net income for the three months ended September 30, 2023 was $859,000, or $2.30 per share, compared to $877,000, or $2.34 per share, for the same quarter last year. For the nine months ended September 30, 2023, the Company’s net income was $2.4 million or $6.52 per share, compared to $2.2 million, or $5.86 per share, for the same period in 2022.

For the three months ended September 30, 2023, net interest income increased $69,000, or 2.8%, to $2.5 million from $2.4 million for the three months ended September 30, 2022. For the nine months ended September 30, 2023, net interest income increased $815,000, or 12.5%, to $7.3 million from $6.5 million for the nine months ended September 30, 2022. The increase in net interest income for the three months and nine months ended September 30, 2023 was primarily the result of an increase in loans and an increase in interest rates on loans offset by a lesser increase in interest expense. Net interest income after provision for loan losses for the three months ended September 30, 2023 was $2.5 million, an increase of $36,000, or 1.5%, from the same period in the previous year. For the nine months ended September 30, 2023, net interest income after provision for loan losses increased $723,000, or 11.2%, to $7.2 million from $6.4 million for the same period in 2022. The primary reason for the increase during the three months and nine months ended September 30, 2023 was an increase in net interest income offset by an increase in the provision for loan losses.

Non-interest income for the three months ended September 30, 2023 decreased to $410,000 compared to $451,000 for the three months ended September 30, 2022. Non-interest income for the nine months ended September 30, 2023 also decreased to $1.2 million compared to $1.3 million for the same period of the prior year. The decrease during the three months and nine months ended September 30, 2023 was primarily attributable to a decrease in the gains on the sale of loans due to a decrease in the volume of mortgage activities as a result of the rise in interest rates on mortgage loans.

Non-interest expense for the three months ended September 30, 2023 was unchanged at $1.7 million. For the nine months ended September 30, 2023, non-interest expense was $5.1 million, an increase of $262,000, or 5.4%, compared to the same period in 2022. The increase for the three months and nine months ended September 30, 2023 was primarily due to an increase in occupancy expenses and data processing expenses.

Consolidated assets of the Company increased to $307.3 million at September 30, 2023, compared to $301.8 million at December 31, 2022. The $5.5 million, or 1.8%, increase in assets was a result of an increase in loans receivable funded by investment maturities.   Loans receivable, net, increased $15.4 million, or 7.1%, to $233.0 million at September 30, 2023 from $217.5 million at December 31, 2022. The increase in loans receivable was primarily attributable to a $9.4 million increase in mortgage and construction loans and a $5.6 million increase in commercial loans.

For the three months ended September 30, 2023 the provision for loan losses was $63,000 compared to $30,000 for the same period in 2022. The provision for loan losses was $183,000 for the nine months ended September 30, 2023 compared to $91,000 in the comparable period in 2022, an increase of $92,000.

Non-performing assets increased by $122,000 to $432,000 at September 30, 2023 from $310,000 at December 31, 2022. The increase is attributable to an increase in non-performing loans. Based on our analysis of delinquent loans, non-performing loans and classified loans, management believes that the Company’s allowance for loan losses of $2.3 million at September 30, 2023 was adequate to absorb known and inherent risks in the loan portfolio. At September 30, 2023, the allowance for loan losses to non-performing assets was 543.06% compared to 692.90% at December 31, 2022.

Investment and mortgage-backed securities available-for-sale at September 30, 2023 decreased $7.1 million, or 13.1%, to $47.2 million from $54.3 million at December 31, 2022. The decrease was due to investment maturities and paydowns. There were no investment and mortgage-backed securities held-to-maturity at September 30, 2023 and December 31, 2022.

Deposits increased $3.1 million, or 11.4%, to $274.7 million at September 30, 2023 from $271.6 million at December 31, 2022. The increase was primarily attributable to increases in certificates of deposit offset by a decrease in demand deposit balances.

Stockholders’ equity increased $2.0 million or 7.5% to $29.3 million, or 9.5% of total assets at September 30, 2023 compared to $27.2 million, or 9.0%, of total assets, at December 31, 2022.

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:		Michael D. Griffith
		President & Chief Executive Officer
		[phone]

               

SECURITY BANCORP, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited) (dollars in thousands)
OPERATING DATA	Three months ended September 30,					Six months ended September 30,
	2022		2023			2022		2023
Interest income	$	2,689	$	4,023		$	7,165	$	11,326
Interest expense		244		1,509			632		3,978
Net interest income		2,445		2,514			6,533		7,348
Provision for loan losses		30		63			91		183
Net interest income after provision for loan losses		2,415		2,451			6,442		7,165
Non-interest income		451		410			1,343		1,233
Non-interest expense		1,682		1,705			4,848		5,110
Income before income tax expense		1,184		1,156			2,937		3,288
Income tax expense		307		297			747		850
Net income	$	877	$	859		$	2,190	$	2,438
Net Income per share (basic)	$	2.34	$	2.30		$	5.86	$	6.52
FINANCIAL CONDITION DATA	At September 30, 2023					At December 31, 2022
Total assets	$	307,256				$	301,759
Investments and mortgage backed securities - available for sale		47,200					54,307
Loans receivable, net		232,956					217,526
Deposits		274,745					271,648
Federal Home Loan Bank Advances	-0-					-0-
Stockholders' equity		29,283					27,245
Non-performing assets		432					310
Non-performing assets to total assets		0.14			%		0.10			%
Allowance for loan losses		2,346					2,148
Allowance for loan losses to total loans receivable		1.00			%		0.98			%
Allowance for loan losses to non-performing assets		543.06			%		692.90			%