Security Bancorp, Inc. Announces Third Quarter Earnings

Rhea-AI Summary

Security Bancorp, Inc. (OTCBB: SCYT) reported a net income of $671,000 or $1.79 per share for Q3 of fiscal 2021, a rise from $561,000 or $1.50 per share in Q3 2020. Year-to-date, net income stands at $2.0 million, up from $1.7 million, with earnings per share increasing to $5.26 from $4.38. Total assets grew 10.9% to $289.3 million, driven by increased deposits and commercial real estate loans. Non-interest income rose to $693,000, while non-interest expenses were $1.6 million, reflecting ongoing investment in services.

Positive

• Net income increased by 19.6% year-over-year for Q3 2021.
• Total assets grew by $28.5 million (10.9%) since December 2020.
• Non-interest income surged by $128,000 (22.7%) compared to Q3 2020.

Negative

• Net interest income after provision for loan losses decreased by $56,000 (1.0%) for the nine-month period ending September 30, 2021.
• Non-interest expenses increased by $49,000 (1.1%) compared to the same period in 2020.

MCMINNVILLE, Tenn., Nov. 08, 2021 (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, 2021.

Net income for the three months ended September 30, 2021 was $671,000, or $1.79 per share, compared to $561,000, or $1.50 per share, for the same quarter last year. For the nine months ended September 30, 2021, the Company’s net income was $2.0 million or $5.26 per share, compared to $1.7 million, or $4.38 per share, for the same period in 2020.

For the three months ended September 30, 2021, net interest income increased slightly to $1.9 million from $1.8 million for the same period in 2020. The increase in net interest income for the three months ended September 30, 2021 was due to the decrease in interest expense during the quarter as a result of the decline in interest rates. For the nine months ended September 30, 2021, net interest income, compared to the same quarter in 2020 was unchanged at $5.5 million. Net interest income after provision for loan losses for the three months ended September 30, 2021 was $1.8 million, an increase of $83,000, or 4.8%, from the same period in the previous year. For the nine months ended September 30, 2021, net interest income after provision for loan losses decreased $56,000, or 1.0%, to $5.3 million from $5.4 million for the same period in 2020. The primary reason for the increase during the three months ended September 30, 2021 was a decrease in interest income offset by a decrease in interest expense.

Non-interest income for the three months ended September 30, 2021 was $693,000 compared to $565,000 for the same quarter of 2020, an increase of $128,000. Non-interest income for the nine months ended September 30, 2021 was $2.0 million compared to $1.4 million for the same period the prior year, an increase of $548,000. The increase during the three and nine months ended September 30, 2021 was primarily attributable to an increase in the gains on the sale of loans due to the increase in the volume of mortgage loan originations as well as an increase in financial service fees.

Non-interest expense for the three months ended September 30, 2021 was $1.6 million for the three months ended September 30, 2021 compared to $1.5 million for the same period in 2020. For the nine months ended September 30, 2021, non-interest expense was $4.7 million, an increase of $49,000 from the same period in 2020. The increase in non-interest expense was attributable to an increase in data processing expenses and FDIC insurance premiums.

Consolidated assets of the Company were $289.3 million at September 30, 2021, compared to $260.8 million at December 31, 2020. The $28.5 million, or 10.9%, increase in assets was a result of an increase in interest-bearing deposits, investments, and loans receivable.   Loans receivable, net, increased $5.5 million, or 3.1%, to $180.4 million at September 30, 2021 from $174.9 million at December 31, 2020. The increase in loans receivable was attributable to an increase in commercial real estate loans.

For the three months ended September 30, 2021 the provision for loan losses was $60,000, unchanged from the same period in 2020. The provision for loan losses was $180,000 for the nine months ended September 30, 2021 compared to $140,000 in the comparable period in 2020, an increase of $40,000.

Non-performing assets decreased $61,000, or 20.7%, to $233,000 at September 30, 2021 from $294,000 at December 31, 2020. The decrease is attributable to a decrease 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 $2.0 million at September 30, 2021 was adequate to absorb known and inherent risks in the loan portfolio at that date. At September 30, 2021, the allowance for loan losses to non-performing assets was 848.07% compared to 609.46% at December 31, 2020.

Investment and mortgage-backed securities available-for-sale increased $10.0 million, or 27.0%, to $47.3 million at September 30, 2021, compared to $37.2 million at December 31, 2020. The increase was due to investment purchases funded by the increase in customer deposit balances. There were no investment and mortgage-backed securities held-to-maturity at September 30, 2021 and December 31, 2020.

Deposits increased $34.8 million, or 15.7%, to $257.2 million at September 30, 2021 from $222.4 million at December 31, 2020. The increase was primarily attributable to increases in consumer and commercial checking accounts, savings, and certificate of deposits balances. The balance in repurchase agreements decreased from $7.7 million at December 31, 2020 to a zero balance at September 30, 2021 as a result of the transfer of these balances to commercial checking accounts.

Stockholders’ equity increased $1.3 million or 5.0%, to $27.6 million, or 9.5% of total assets at September 30, 2021, 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, and other risks.

Contact:
Joe H. 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,
	2020	2021	2020	2021
Interest income	$2,182	$2,126	$6,882	$6,345
Interest expense	387	248	1,359	838
Net interest income	1,795	1,878	5,523	5,507
Provision for loan losses	60	60	140	180
Net interest income after provision for loan losses	1,735	1,818	5,383	5,327
Non-interest income	565	693	1,440	1,988
Non-interest expense	1,547	1,603	4,615	4,664
Income before income tax expense	753	908	2,208	2,651
Income tax expense	192	237	551	680
Net income	$561	$671	$1,657	$1,971
Net Income per share (basic)	$1.50	$1.79	$4.38	$5.26

FINANCIAL CONDITION DATA	At September 30, 2021	At December 31, 2020
Total assets	$289,331	$260,827
Investments and mortgage backed securities - available for sale	47,271	37,216
Loans receivable, net	180,364	174,913
Deposits	257,199	222,352
Repurchase agreements	-0-	7,719
Federal Home Loan Bank Advances	2,000	2,000
Stockholders' equity	27,614	26,298
Non-performing assets	233	294
Non-performing assets to total assets	0.08%	0.11%
Allowance for loan losses	$1,976	$1,793
Allowance for loan losses to total loans receivable	1.08%	1.02%
Allowance for loan losses to non-performing assets	848.07%	609.46%

FAQ

What were the earnings results for Security Bancorp (SCYT) in Q3 2021?

Security Bancorp reported a net income of $671,000 or $1.79 per share in Q3 2021.

How did the total assets of Security Bancorp (SCYT) change from December 2020 to September 2021?

Total assets increased by $28.5 million (10.9%) to $289.3 million.

What was the year-to-date net income for Security Bancorp (SCYT) as of September 30, 2021?

Year-to-date net income was $2.0 million, up from $1.7 million in 2020.

Did Security Bancorp (SCYT) see an increase in its non-interest income in Q3 2021?

Yes, non-interest income rose by $128,000 (22.7%) compared to Q3 2020.

What are the key financial highlights for Security Bancorp (SCYT) as of September 30, 2021?

Key highlights include total assets of $289.3 million, net income of $671,000 for Q3, and non-interest expenses of $1.6 million.