Security Bancorp, Inc. Announces Third Quarter Earnings

  
    
  
  
    
      Security Bancorp, Inc. (“Company”) 
      (OTCBB:SCYT) today announced consolidated earnings for the third quarter 
      of its fiscal year 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 September 30, 2006 was $412,000, 
      or $0.98 per share, compared to $333,000, or $0.79 per share, for the 
      same quarter last year. For the nine months ended September 30, 2006, 
      the Company’s net income was $1.2 million, or 
      $2.75 per share, compared to $898,000, or $1.81 per share, for the same 
      period in 2005.
    
    
      Net interest income after provision for loan losses for the three months 
      ended September 30, 2006 increased 16.4% to $1.3 million from $1.1 
      million for the same period last year. The increase in net interest 
      income was attributable to the increase in loan balances during the 
      quarter.
    
    
      Non-interest income for the three months ended September 30, 2006 was 
      $530,000 compared to $506,000 for the same quarter of 2005. The 4.7% 
      increase was attributable to an increase in the trust and loan servicing 
      fee income and annuity sales commissions.
    
    
      Non-interest expense for the three months ended September 30, 2006 was 
      $1.1 million compared to $1.0 million for the same quarter of 2005. The 
      7.4% increase was primarily a result of an increase in personnel 
      expenses and professional fees.
    
    
      Consolidated assets of the Company were $133.9 million at September 30, 
      2006, unchanged from December 31, 2005. Loans receivable, net, increased 
      from $88.6 million at December 31, 2005 to $91.5 million at September 
      30, 2006. The 3.3% increase in loans receivable was primarily a result 
      of an increase in commercial real estate loans.
    
    
      The provision for loan losses decreased 8.6% to $64,000 for the three 
      months ended September 30, 2006 from $70,000 for the same quarter last 
      year. Non-performing assets decreased 62.1% from $660,000 at December 
      31, 2005 to $250,000 at September 30, 2006 as a result of the sales of 
      foreclosed properties. Non-performing assets to total assets were 0.19% 
      at September 30, 2006, compared to 0.49% at December 31, 2005.
    
    
      Investment and mortgage-backed securities available-for-sale decreased 
      from $28.0 million at December 31, 2005 to $24.9 million at September 
      30, 2006. The 11.1% decrease was a result of receiving the maturities of 
      government securities.
    
    
      Investment and mortgage-backed securities held-to-maturity decreased 
      from $1,000 at December 31, 2005 to zero at September 30, 2006 as a 
      result of the principal payments received.
    
    
      Deposits decreased $1.1 million, or 1.1%, from $105.9 million at 
      December 31, 2005 to $104.8 million at September 30, 2006. The increase 
      was primarily attributable to a decrease in commercial checking account 
      balances.
    
    
      Stockholders’ equity at September 30, 2006 was 
      $13.0 million, or 9.7% of total assets, compared to $12.0 million, or 
      9.0% 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.
    
    
      
        
          SECURITY BANCORP, INC.CONSOLIDATED FINANCIAL 
          HIGHLIGHTS(unaudited) (dollars in thousands)
        
      
      
        
          OPERATING DATA
        
        
          
            Three months ended
          
          
            Sept. 30,
          
        
        
           
        
        
          
            Nine months ended
          
          
            Sept. 30,
          
        
      
      
        
           
        
        
          2006 
        
        
          2005 
        
        
           
        
        
          2006 
        
        
          2005 
        
      
      
        
          Interest income
        
        
          $2,235 
        
        
          $1,866 
        
        
           
        
        
          $6,517 
        
        
          $5,215 
        
      
      
        
          Interest expense
        
        
          859 
        
        
          669 
        
        
           
        
        
          2,472 
        
        
          1,847 
        
      
      
        
          Provision for loan losses
        
        
          64 
        
        
          70 
        
        
           
        
        
          196 
        
        
          187 
        
      
      
        
          Net interest income after provision for loan losses
        
        
          1,312 
        
        
          1,127 
        
        
           
        
        
          3,849 
        
        
          3,181 
        
      
      
        
          Non-interest income
        
        
          530 
        
        
          506 
        
        
           
        
        
          1,522 
        
        
          1,458 
        
      
      
        
          Non-interest expense
        
        
          1,164 
        
        
          1,084 
        
        
           
        
        
          3,482 
        
        
          3,155 
        
      
      
        
          Income before income tax expense
        
        
          678 
        
        
          549 
        
        
           
        
        
          1,889 
        
        
          1,484 
        
      
      
        
          Income tax expense
        
        
          266 
        
        
          216 
        
        
           
        
        
          732 
        
        
          586 
        
      
      
        
          Net income
        
        
          $412 
        
        
          $333 
        
        
           
        
        
          $1,157 
        
        
          $898 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          FINANCIAL CONDITION DATA
        
        
          
            At Sept. 30, 2006
          
        
        
           
        
        
          
            At Dec. 31, 2005
          
        
      
      
        
          Total assets
        
        
          $133,865 
        
        
           
        
        
          $133,854 
        
      
      
        
          Investment and mortgage backed securities available-for-sale
        
        
          24,872 
        
        
           
        
        
          27,966 
        
      
      
        
          Investment and mortgage backed securities held-to-maturity
        
        
          
            -0- 
          
        
        
           
        
        
          1 
        
      
      
        
          Loans receivable, net
        
        
          91,537 
        
        
           
        
        
          88,652 
        
      
      
        
          Deposits
        
        
          104,784 
        
        
           
        
        
          105,900 
        
      
      
        
          FHLB advances
        
        
          3,000 
        
        
           
        
        
          3,000 
        
      
      
        
          Stockholders' equity
        
        
          12,962 
        
        
           
        
        
          12,021 
        
      
      
        
          Non-performing assets
        
        
          250 
        
        
           
        
        
          660 
        
      
      
        
          Non-performing assets to total assets
        
        
          0.19%
        
        
           
        
        
          0.49%
        
      
      
        
          Allowance for loan losses
        
        
          1,119 
        
        
           
        
        
          1,022 
        
      
      
        
          Allowance for loan losses to total loans receivable, net
        
        
          1.21%
        
        
           
        
        
          1.14%
        
      
    
  
Security Bancorp, Inc. ("Company") (OTCBB:SCYT) today announced
consolidated earnings for the third quarter of its fiscal year 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 September 30, 2006 was
$412,000, or $0.98 per share, compared to $333,000, or $0.79 per
share, for the same quarter last year. For the nine months ended
September 30, 2006, the Company's net income was $1.2 million, or
$2.75 per share, compared to $898,000, or $1.81 per share, for the
same period in 2005.

   Net interest income after provision for loan losses for the three
months ended September 30, 2006 increased 16.4% to $1.3 million from
$1.1 million for the same period last year. The increase in net
interest income was attributable to the increase in loan balances
during the quarter.

   Non-interest income for the three months ended September 30, 2006
was $530,000 compared to $506,000 for the same quarter of 2005. The
4.7% increase was attributable to an increase in the trust and loan
servicing fee income and annuity sales commissions.

   Non-interest expense for the three months ended September 30, 2006
was $1.1 million compared to $1.0 million for the same quarter of
2005. The 7.4% increase was primarily a result of an increase in
personnel expenses and professional fees.

   Consolidated assets of the Company were $133.9 million at
September 30, 2006, unchanged from December 31, 2005. Loans
receivable, net, increased from $88.6 million at December 31, 2005 to
$91.5 million at September 30, 2006. The 3.3% increase in loans
receivable was primarily a result of an increase in commercial real
estate loans.

   The provision for loan losses decreased 8.6% to $64,000 for the
three months ended September 30, 2006 from $70,000 for the same
quarter last year. Non-performing assets decreased 62.1% from $660,000
at December 31, 2005 to $250,000 at September 30, 2006 as a result of
the sales of foreclosed properties. Non-performing assets to total
assets were 0.19% at September 30, 2006, compared to 0.49% at December
31, 2005.

   Investment and mortgage-backed securities available-for-sale
decreased from $28.0 million at December 31, 2005 to $24.9 million at
September 30, 2006. The 11.1% decrease was a result of receiving the
maturities of government securities.

   Investment and mortgage-backed securities held-to-maturity
decreased from $1,000 at December 31, 2005 to zero at September 30,
2006 as a result of the principal payments received.

   Deposits decreased $1.1 million, or 1.1%, from $105.9 million at
December 31, 2005 to $104.8 million at September 30, 2006. The
increase was primarily attributable to a decrease in commercial
checking account balances.

   Stockholders' equity at September 30, 2006 was $13.0 million, or
9.7% of total assets, compared to $12.0 million, or 9.0% 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.

-0-
*T
                        SECURITY BANCORP, INC.
                  CONSOLIDATED FINANCIAL HIGHLIGHTS
                  (unaudited) (dollars in thousands)
                                  Three months ended Nine months ended
          OPERATING DATA              Sept. 30,          Sept. 30,
----------------------------------------------------------------------
                                     2006     2005     2006     2005
----------------------------------------------------------------------
Interest income                       $2,235 $1,866     $6,517 $5,215
----------------------------------------------------------------------
Interest expense                         859    669      2,472  1,847
----------------------------------------------------------------------
Provision for loan losses                 64     70        196    187
----------------------------------------------------------------------
Net interest income after
 provision for loan losses             1,312  1,127      3,849  3,181
----------------------------------------------------------------------
Non-interest income                      530    506      1,522  1,458
----------------------------------------------------------------------
Non-interest expense                   1,164  1,084      3,482  3,155
----------------------------------------------------------------------
Income before income tax expense         678    549      1,889  1,484
----------------------------------------------------------------------
Income tax expense                       266    216        732    586
----------------------------------------------------------------------
Net income                              $412   $333     $1,157   $898
----------------------------------------------------------------------


     FINANCIAL CONDITION DATA     At Sept. 30, 2006  At Dec. 31, 2005
----------------------------------------------------------------------
Total assets                               $133,865          $133,854
----------------------------------------------------------------------
Investment and mortgage backed
 securities available-for-sale               24,872            27,966
----------------------------------------------------------------------
Investment and mortgage backed
 securities held-to-maturity                    -0-                 1
----------------------------------------------------------------------
Loans receivable, net                        91,537            88,652
----------------------------------------------------------------------
Deposits                                    104,784           105,900
----------------------------------------------------------------------
FHLB advances                                 3,000             3,000
----------------------------------------------------------------------
Stockholders' equity                         12,962            12,021
----------------------------------------------------------------------
Non-performing assets                           250               660
----------------------------------------------------------------------
Non-performing assets to total
 assets                                        0.19%             0.49%
----------------------------------------------------------------------
Allowance for loan losses                     1,119             1,022
----------------------------------------------------------------------
Allowance for loan losses to total
 loans receivable, net                         1.21%             1.14%
----------------------------------------------------------------------
*T