Security Bancorp, Inc. Announces First Quarter Earnings

Rhea-AI Summary

Security Bancorp, Inc. (SCYT) reported consolidated earnings of $671,000, or $1.84 per share, for Q1 2021, up from $580,000, or $1.52 per share, in Q1 2020. Total interest income declined 14.6% to $2.1 million due to lower loan interest rates, while net interest income dropped 7% to $1.8 million. Non-interest income surged 66.7% to $687,000, driven by increased mortgage activity. Assets rose 4.7% to $273 million, with deposits climbing 8.7% to $241.6 million. Non-performing assets decreased 52.7% to $139,000, indicating improved loan performance.

Positive

• Net income increased to $671,000 for Q1 2021, up from $580,000 in Q1 2020.
• Non-interest income rose significantly by 66.7% to $687,000 due to higher mortgage activity.
• Consolidated assets increased by 4.7% to $273 million.
• Deposits grew by 8.7% to $241.6 million.

Negative

• Total interest income fell by 14.6% to $2.1 million.
• Net interest income decreased by 7% to $1.8 million.
• Provision for loan losses increased by $30,000 to $60,000 due to rising loan balances.

MCMINNVILLE, Tenn., May 07, 2021 (GLOBE NEWSWIRE) -- Security Bancorp, Inc. (OTCBB “SCYT”) (“Company”) today announced consolidated earnings for the first quarter ended March 31, 2021. The Company is the holding company for Security Federal Savings Bank of McMinnville, Tennessee (“Bank”).

Net income for the three months ended March 31, 2021 was $671,000, or $1.84 basic earnings per share, compared to $580,000, or $1.52 basic earnings per share, for the quarter ended March 31, 2020.

For the three months ended March 31, 2021, net interest income decreased $137,000, or 7.0%, to $1.8 million from $1.9 million for the same period in 2020.   Total interest income decreased to $2.1 million for the three months ended March 31, 2021 compared to $2.5 million for the same period in the previous year. The decrease of $361,000, or 14.6%, was primarily attributable to a decrease in interest income from loans due to a reduction in interest rates. Total interest expense decreased $224,000, or 42.9%, to $298,000 for the three months ended March 31, 2021, from $522,000 for the quarter ended March 31, 2020. The decrease in interest expense was primarily due to a reduction in the interest rates on interest-bearing demand deposits, certificates of deposit and repurchase agreements. Net interest income, after provision for loan losses, for the three months ended March 31, 2021 decreased to $1.7 million, or $167,000, from $1.9 million compared to the same period in 2020.

Non-interest income for the three months ended March 31, 2021 was $687,000 compared to $412,000 for the three months ended March 31, 2020, an increase of $275,000, or 66.7%. The increase was primarily attributable to an increase in gains on sale of loans due to an increase in the volume of mortgage activity.

Non-interest expense for the three months ended March 31, 2021 remained relatively unchanged at $1.5 million compared to the same period the prior year.

The Company’s consolidated assets increased $12.2 million, or 4.7%, to $273.0 million at March 31, 2021 from $260.8 million at December 31, 2020. The increase in consolidated assets was funded primarily by an increase in demand deposits. Loans receivable, net, increased $1.1 million, or 0.63%, to $176.0 million at March 31, 2021 from $174.9 million at December 31, 2020.

The provision for loan losses was $60,000 for the three months ended March 31, 2021, an increase of $30,000 when compared to the three months ended March 31, 2020. The increase of the provision for loan losses was due to the increase in loan balances.

Non-performing assets decreased $155,000, or 52.7%, to $139,000 at March 31, 2021 from $294,000 at December 31, 2020. The decrease is primarily attributable to a decrease in non-performing loans. Based on our analysis of delinquent loans, non-performing loans and classified loans, we believe that the Company’s allowance for loan losses of $1.9 million at March 31, 2021 is adequate to absorb known and inherent risks in the loan portfolio at that date. The allowance for loan losses at March 31, 2021 represented 1,333.8% of non-performing assets compared to 609.46% at December 31, 2020.   

Investments and mortgage-backed securities available-for-sale increased slightly by $540,000, or 1.5%, to $37.8 million at March 31, 2021 from $37.2 million at December 31, 2020. The increase was primarily due to the purchase of additional investments.
              
Deposits increased $19.3 million, or 8.7%, to $241.6 million at March 31, 2021 from $222.4 million at December 31, 2020. The increase was primarily attributable to an increase in both commercial and consumer demand deposits.

Stockholders’ equity at March 31, 2021 was $26.7 million, or 9.8% of total assets, compared to $26.3 million, or 10.1% of total assets at December 31, 2020.

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 ,financial market conditions and other uncertainties resulting from the COVID-19 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 March 31,
	2021	2020
Interest income	$2,107	$2,468
Interest expense	298	522
Net interest income	1,809	1,946
Provision for loan losses	60	30
Net interest income after provision for loan losses	1,749	1,916
Non-interest income	687	412
Non-interest expense	1,539	1,558
Income before income tax expense	897	770
Income tax expense	226	190
Net income	$671	$580
Net Income per share (basic)	$1.84	$1.52
FINANCIAL CONDITION DATA	At March 31, 2021		At December 31, 2020
Total assets	$273,044		$260,827
Investments and mortgage-backed securities - available for sale	37,756		37,216
Loans receivable, net	176,023		174,913
Deposits	241,623		222,352
Repurchase agreements	-0-		7,719
Federal Home Loan Bank Advances	2,000		2,000
Stockholders' equity	26,745		26,298
Non-performing assets	139		294
Non-performing assets to total assets	0.05%		0.11%
Allowance for loan losses	1,854		$1,793
Allowance for loan losses to total loans receivable	1.04%		1.02%
Allowance for loan losses to non-performing assets	1333.8		609.46

FAQ

What were the earnings results for SCYT in Q1 2021?

Security Bancorp reported a net income of $671,000, or $1.84 per share, for Q1 2021.

What were the key financial highlights for Security Bancorp in Q1 2021?

Key highlights include a 66.7% increase in non-interest income and a 4.7% rise in total assets.

How did total interest income change for SCYT in Q1 2021?

Total interest income decreased by 14.6% to $2.1 million compared to Q1 2020.

What is the current status of non-performing assets for SCYT?

Non-performing assets decreased by 52.7% to $139,000 at the end of Q1 2021.

How much did deposits increase for SCYT in Q1 2021?

Deposits increased by 8.7% to $241.6 million for Q1 2021.