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SCYT News Security Bancorp, Inc. Announces Fourth Quarter Earnings

MCMINNVILLE, Tenn.--(BUSINESS WIRE)--Security Bancorp, Inc. (OTCBB:SCYT) today announced consolidated earnings for the fourth quarter ended December 31, 2006. The Company is the holding company for Security Federal Savings Bank of McMinnville, Tennessee (“Bank”).

Net income for the three months ended December 31, 2006 was $440,000, or $1.03 per share, compared to $355,000, or $0.85 per share, for the same quarter the previous year. Net income for the year ended December 31, 2006 was $1.6 million, or $3.90 per share, compared to $1.2 million or $3.08 per share, for the same period a year ago.

Net interest income after provision for loan losses for the three months ended December 31, 2006 increased 18.1% to $1.3 million from $1.1 million for the same period the prior year. Net interest income after provision for loan losses for the year ended December 31, 2006 increased to $5.5 million compared to $4.6 million for the same period a year ago. The increase in net interest income was attributable to the increase in total interest income offset to a lesser degree by an increase in total interest expense.

Non-interest income for the three months ended December 31, 2006 was $516,000 compared to $500,000 for the same quarter of 2005. The 3.2% increase for the quarter was primarily attributable to an increase in trust service fee income. Non-interest income for the year ended December 31, 2006 remained at $1.8 million, unchanged from the comparable period in 2006.

Non-interest expense for the three months ended December 31, 2006 was $1.1 million compared to $1.0 million for the same quarter of 2005. Non-interest expense for the year ended December 31, 2006 increased to $4.7 million compared to $4.3 million for the same period a year ago. The increase was primarily a result of salary increases and increased occupancy expenses.

Consolidated assets of the Company increased 4.77% to $140.2 million at December 31, 2006 from $133.8 million at December 31, 2005. Loans receivable, net, increased 3.3% from $88.6 million at December 31, 2005 to $91.6 million at December 31, 2006. The increase in consolidated assets was primarily a result of an increase in deposits and commercial loans.

The provision for loan losses increased to $65,000 for the three months ended December 31, 2006 from $59,000 for the three months ended December 31, 2005. Non-performing assets decreased from $660,000 at December 31, 2005 to $260,000 at December 31, 2006. Non-performing assets to total assets were 0.19% at December 31, 2006, compared to 0.49% at December 31, 2005.

Investments and mortgage-backed securities available-for-sale decreased from $28.0 million at December 31, 2005 to $27.8 million at December 31, 2006.

Investments and mortgage-backed securities held-to-maturity decreased from $1,000 at December 31, 2005 to zero at December 31, 2006 as a result of the repayment of principal on mortgage-backed securities.

Deposits increased $2.1 million from $105.9 million at December 31, 2005 to $108.0 million at December 31, 2006. The increase was primarily attributable to an increase in certificates of deposit.

Stockholders’ equity at December 31, 2006 was $13.5 million, or 9.6% of total assets, compared to $12.0 million, or 8.9% of total assets, at December 31, 2005.

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.