SCYT Security Bancorp Inc (PK)

Security Bancorp, Inc. (“Company”) (OTCBB:SCYT) today announced consolidated earnings for the second quarter of its fiscal year ended December 31, 2009. The Company is the bank holding company for Security Federal Savings Bank of McMinnville, Tennessee (“Bank”).

Net income for the three months ended June 30, 2009 was $180,000, or $0.45 per share, compared to $433,000, or $0.99 per share, for the same quarter last year. For the six months ended June 30, 2009, the Company’s net income was $424,000, or $1.07 per share, compared to $930,000, or $2.14 per share, for the same period in 2008.

Net interest income after provision for loan losses for the three months ended June 30, 2009 decreased 22.6% to $1.1 million from $1.4 million for the same period last year. For the six months ended June 30, 2009, net interest income decreased 22.8% to $2.2 million from $2.8 million for the comparable period in 2008. The decrease in net interest income was attributable to the maturity and repricing of loans at lower interest rates during the first six months of 2009.

Non-interest income for the three months ended June 30, 2009 was $510,000 compared to $497,000 for the same quarter of 2008, an increase of 2.6%. For the six months ended June 30, 2009, non-interest income increased 3.4% to $1.0 million from $970,000 for the comparable period in 2008. The increases during the quarter and the six months ended June 30, 2009 were primarily attributable to increases in the number of new and refinanced mortgage loans processed by the mortgage loan division.

Non-interest expense for the three months ended June 30, 2009 was $1.3 million compared to $1.2 million for the same quarter of 2008, an increase of 7.1%. For the six months ended June 30, 2009, non-interest expense increased 4.7% to $2.5 million from $2.4 million for the comparable period in 2008. The increases during the quarter and the six months ended June 30, 2009 were primarily a result of an increase in occupancy expenses associated with the new branch location and the accrual of the FDIC special assessment.

Consolidated assets of the Company were $143.7 million at June 30, 2009, compared to $134.8 million at December 31, 2008. The increase in assets is attributable to an increase in loans receivable during the six months ended June 30, 2009. Loans receivable, net, increased from $106.6 million at December 31, 2008 to $114.1 million at June 30, 2009. The 7.0% increase in loans receivable was primarily a result of an increase in commercial real estate loans and one to four family mortgage loans.

The provision for loan losses increased 113.3% to $64,000 for the three months ended June 30, 2009 from $30,000 for the same quarter last year. For the six months ended June 30, 2009, the provision for loan losses increased 85.2% to $113,000 from $61,000 for the same period in 2008. The provision for loan losses during the six months ended June 30, 2009 was increased due to the state of the local economy. On the other hand, non-performing assets decreased 18.1% from $957,000 at December 31, 2008 to $784,000 at June 30, 2009. Non-performing assets to total assets were 0.54% at June 30, 2009, compared to 0.71% at December 31, 2008.

Investment and mortgage-backed securities available-for-sale remained relatively stable at $14.6 million at December 31, 2008 and June 30, 2009.

Deposits increased $3.0 million, or 2.8%, from $109.2 million at December 31, 2008 to $112.3 million at June 30, 2009. The increase was primarily attributable to an increase in savings and certificates of deposit accounts.

Stockholders’ equity at June 30, 2009 was $13.7 million, or 9.5% of total assets, compared to $13.9 million, or 10.3% of total assets, at December 31, 2008.

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.

  SECURITY BANCORP, INC.CONSOLIDATED FINANCIAL HIGHLIGHTS(unaudited) (dollars in thousands) OPERATING DATA   Three months ended

June 30,

  Six months ended

June 30,

    2009 2008   2009 2008 Interest income   $1,722 $2,162   $3,449 $4,447 Interest expense   572 729   1,166 1,576 Provision for loan losses   64 30   113 61 Net interest income after provision for loan losses   1,086 1,403   2,170 2,810 Non-interest income   510 497   1,003 970 Non-interest expense   1,290 1,204   2,470 2,358 Income before income tax expense   306 696   703 1,422 Income tax expense   126 263   279 492 Net income   $180 $433   $424 $930                   FINANCIAL CONDITION DATA   At June 30, 2009   At December 31, 2008 Total assets   $143,660   $134,790 Investment and mortgage backed securities available-for-sale   14,599   14,562 Investment and mortgage backed securities held-to-maturity   -0-   -0- Loans receivable, net   114,096   106,600 Deposits   112,272   109,237 FHLB advances   8,514   6,000 Stockholders' equity   13,673   13,857 Non-performing assets   784   957 Non-performing assets to total assets   0.54%   0.71% Allowance for loan losses   1,157   1,146 Allowance for loan losses to total loans receivable   1.00%   1.06%