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, 2010. 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, 2010 was $226,000, or $0.58 per share, compared to $180,000, or $0.45 per share, for the same quarter last year. For the six months ended June 30, 2010, the Company’s net income was $395,000, or $1.02 per share, compared to $424,000, or $1.07 per share, for the same period in 2009.

Net interest income after provision for loan losses for the three months ended June 30, 2010 remained relatively unchanged at $1.1 million, compared to the same period in 2009. For the six months ended June 30, 2010, net interest income decreased 3.0% to $2.1 million from $2.2 million for the comparable period in 2009. The decrease in net interest income was attributable to the maturity and payoffs of loans during the first six months of 2010 as well as the maturity and repricing of investments.

Non-interest income for the three months ended June 30, 2010 was $534,000 compared to $510,000 for the same quarter of 2009, an increase of 4.7%. For the six months ended June 30, 2010, non-interest income increased $43,000, or 4.3%, to $1.05 million from $1.0 million for the comparable period in 2009. The increases during the quarter and the six months ended June 30, 2010 were primarily attributable to increases in trust service fees.

Non-interest expense for the three months ended June 30, 2010 was $1.2 million compared to $1.3 million for the same quarter of 2009, a decrease of 3.4%. For the six months ended June 30, 2010, non-interest expense increased $24,000, or 1.0%, to $2.49 million from $2.47 million for the comparable period in 2009. The increases during the quarter and the six months ended June 30, 2010 were primarily a result of an increase in data processing costs and trust service expenses.

Consolidated assets of the Company were $149.6 million at June 30, 2010, compared to $147.1 million at December 31, 2009. The 1.7% increase in assets is attributable to an increase in cash balances as a result of deposit increases during the six months ended June 30, 2010. Loans receivable, net, decreased from $115.9 million at December 31, 2009 to $115.2 million at June 30, 2010. The 0.6% decrease in loans receivable was attributable to the net effect of maturities and payoffs during the year.

The provision for loan losses remained the same at $64,000 for the three months ended June 30, 2010 compared to the same period in the prior year. For the six months ended June 30, 2010, the provision for loan losses increased 12.4% to $127,000 from $113,000 for the same period in 2009. Non-performing assets increased 8.0% from $788,000 at December 31, 2009 to $851,000 at June 30, 2010. Non-performing assets to total assets were 0.57% at June 30, 2010, compared to 0.54% at December 31, 2009.

Investment and mortgage-backed securities available-for-sale decreased 1.4% to $12.3 million at June 30, 2010, compared to $12.5 million at December 31, 2009.

Deposits increased $3.7 million, or 3.3%, from $113.5 million at December 31, 2009 to $117.2 million at June 30, 2010. The increase was primarily attributable to an increase in savings and certificates of deposit accounts.

Stockholders’ equity at June 30, 2010 was $14.4 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)       Three months ended       Six months ended OPERATING DATA     June 30,       June 30,       2010     2009       2010     2009 Interest income     $1,679     $1,722       $3,305     $3,449 Interest expense     531     572       1,074     1,166 Provision for loan losses     64     64       127     113 Net interest income after provision for loan losses     1,084     1,086       2,104     2,170 Non-interest income     534     510       1,046     1,003 Non-interest expense     1,246     1,290       2,494     2,470 Income before income tax expense     372     306       656     703 Income tax expense     146     126       261     279 Net income     $226     $180       $395     $424                             FINANCIAL CONDITION DATA     At June 30, 2010       At December 31, 2009 Total assets     $149,572       $147,116 Investment and mortgage backed securities available-for-sale     12,302       12,470 Investment and mortgage backed securities held-to-maturity     -0-       -0- Loans receivable, net     115,216       115,854 Deposits     117,231       113,538 FHLB advances     12,609       13,023 Stockholders' equity     14,417       14,038 Non-performing assets     851       788 Non-performing assets to total assets     0.57%       0.54% Allowance for loan losses     1,195       1,163 Allowance for loan losses to total loans receivable     1.03%       0.99%