SCYT Security Bancorp Inc (PK)

Security Bancorp, Inc. (“Company”) (OTCBB: SCYT) today announced consolidated earnings for the third quarter of its fiscal year ended December 31, 2010. The Company is the holding company for Security Federal Savings Bank of McMinnville, Tennessee (“Bank”).

Net income for the three months ended September 30, 2010 was $227,000, or $0.59 per share, compared to $261,000, or $0.66 per share, for the same quarter the previous year. For the nine months ended September 30, 2010, the Company’s net income was $622,000, or $1.60 per share, compared to $685,000, or $1.73 per share, for the same period in 2009.

Net interest income after provision for loan losses for the three months ended September 30, 2010 decreased $10,000, or 0.9%, to $1.08 million from $1.09 million for the same period last year. For the nine months ended September 30, 2010, net interest income after provision for loan losses decreased $76,000, or 2.32%, to $3.19 million from $3.26 million for the comparable period in 2009. The decrease in net interest income after provision for loan losses was attributable to the maturity and payoffs of loans during the first nine months of 2010 as well as the maturity and repricing of investments.

Non-interest income for the three months ended September 30, 2010 was $505,000 compared to $538,000 for the same quarter of 2009, a decrease of 6.1%. For the nine months ended September 30, 2010, non-interest income increased 0.6% to $1.6 million from $1.5 million for the comparable period of 2009. The increases during the quarter and nine months ended September 30, 2010 were attributable to the increase in trust service fees.

Non-interest expense for the three months ended September 30, 2010 increased $13,000 to $1.21 million compared to $1.2 million for the same quarter of 2009. For the nine months ended September 30, 2010, non-interest expense increased $37,000 to $3.71 million from $3.67 million for the comparable period in 2009. The increases during the quarter and the nine months ended September 30, 2010 were attributable to increases in occupancy expenses, data processing and trust service expenses.

Consolidated assets of the Company were $148.5 million at September 30, 2010, compared to $147.1 million at December 31, 2009. The 0.9% increase in assets is attributable to an increase in deposits and the resulting increases in cash balances. Loans receivable, net, decreased $728,000 to $115.1 million at September 30, 2010 from $115.9 million at December 31, 2009. The 0.6% decrease in loans receivable was primarily a result of the net effect of maturities and payoffs during the year.

The provision for loan losses increased 47.0% to $66,000 for the three months ended September 30, 2010 from $45,000 for the same quarter last year. For the nine months ended September 30, 2010, the provision for loan losses increased 22.2% to $193,000 from $158,000 for the same period in 2009. Management determined to increase the provision for loan losses during 2010 in light of the continuing decline in the national and local economies. Non-performing assets increased 16.1% to $915,000 at September 30, 2010 from $788,000 at December 31, 2009. Non-performing assets to total assets were 0.62% at September 30, 2010, compared to 0.54% at December 31, 2009.

Investment and mortgage-backed securities available-for-sale decreased 17.9% to $10.2 million at September 30, 2010, compared to $12.5 million at December 31, 2009. This decrease was due to maturities of investments during the third quarter of 2010.

Deposits increased $7.5 million, or 6.6%, to $121.0 million at September 30, 2010 from $113.5 million at December 31, 2009. The increase was primarily attributable to an increase in certificate of deposit account balances.

Stockholders’ equity at September 30, 2010 was $14.3 million, or 9.6% of total assets, compared to $14.0 million, or 9.5% of total assets, at December 31, 2009.

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

Sept 30,

  Nine months ended

Sept 30,

    2010   2009   2010   2009 Interest income   $1,677   $1,728   $4,982   $5,177 Interest expense   529   591   1,603   1,757 Provision for loan losses   66   45   193   158 Net interest income after provision for loan losses   1,082   1,092   3,186   3,262 Non-interest income   505   538   1,551   1,541 Non-interest expense   1,212   1,199   3,706   3,669 Income before income tax expense   375   431   1,031   1,134 Income tax expense   148   170   409   449 Net income   $227   $261   $622   $685                   FINANCIAL CONDITION DATA   At Sept 30, 2010   At December 31, 2009 Total assets   $148,459   $147,116 Investment and mortgage backed securities available-for-sale   10,244   12,470 Investment and mortgage backed securities held-to-maturity   -0-   -0- Loans receivable, net   115,126   115,854 Deposits   120,993   113,538 FHLB advances   10,359   13,023 Stockholders' equity   14,251   14,038 Non-performing assets   915   788 Non-performing assets to total assets   0.62%   0.54% Allowance for loan losses   1,247   1,163 Allowance for loan losses to total loans receivable   1.07%   0.99%