U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended September 30, 1997 .
-----------------------------------
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from _______________ to ______________
Commission file number 0-22553
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SECURITY BANCORP, INC.
----------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Tennessee 62-1682697
--------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
306 West Main Street, McMinnville, TN 37110
--------------------------------------------
Address of Principal Executive Offices
(931) 473-4483
--------------
(Issuer's Telephone Number, Including Area Code)
N/A
(Former Name, Former Address and Former Fiscal Year, If Changed Since Last
Report)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
[X] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date:
436,425 shares outstanding on September 30, 1997
Transitional Small Business Disclosure Format (check one):
[ ] Yes [X] No
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SECURITY BANCORP, INC. AND SUBSIDIARY
MCMINNVILLE, TENNESSEE
INDEX
PART I. PAGE(S)
FINANCIAL INFORMATION
ITEM 1.
Financial Statements
Consolidated Balance Sheets - (Unaudited)
as of December 31, 1996 and September 30, 1997 ..................... 3
Consolidated Statements of Income (Unaudited)
for the three and nine month periods
ended September 30, 1996 and 1997 .................................. 4
Consolidated Statements of Stockholders' Equity (Unaudited)........... 5
Consolidated Statements of Cash Flows - (Unaudited)
for the nine months ended September 30, 1996 and 1997............... 6
Notes to (Unaudited) Consolidated Financial Statements................ 7-9
ITEM 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations...................... 10-14
PART II.
OTHER INFORMATION
Item 1. Legal Proceedings............................................ 15
Item 2. Changes in Securities........................................ 15
Item 3. Defaults Upon Senior Securities.............................. 15
Item 4. Submission of Matters to a Vote of Security Holders.......... 15
Item 5. Other Information............................................ 15
Item 6. Exhibits and Reports on Form 8-K............................. 15
Signatures........................................................... 16
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SECURITY BANCORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
(in thousands except share information)
ASSETS December 31, September 30,
1996 1997
------ ------
Cash & Noninterest Earning Deposits $ 1,098 $ 1,092
Investment Securities: held to maturity 2,830 2,603
Available for sale 1,742 1,817
Loans receivable, net 36,667 41,613
Real estate owned 0 0
Premises and equipment, net 954 1,029
Federal Home Loan Bank stock 512 540
Accrued interest receivable 278 382
Prepaid expenses and other assets 40 54
------ ------
TOTAL ASSETS $ 44,121 $ 49,130
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 35,790 $ 36,444
ESOP borrowing 0
FHLB Borrowings 5,500 5,350
Advances from Borrowers for property taxes & insurance 66 373
Accrued interest payable 31 29
Accrued expenses and other liabilities 126 86
Federal income taxes payable 158 324
------ ------
Total Liabilities 41,671 42,606
STOCKHOLDERS' EQUITY
Common stock (436,425 shares, $.01 par value) 0 4
Paid-in capital 0 4,062
Retained earnings 2,305 2,616
Unrealized gain on securities available for sale,
net of income taxes 145 191
Unearned compensation: employee stock ownership plan 0 (349)
------ -------
Total stockholders' equity 2,450 6,524
------ ------
Total Liabilities and stockholders' equity $ 44,121 $ 49,130
====== ======
The accompanying notes are an integral part of these consolidated financial
statements.
3
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SECURITY BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Income
(Unaudited)
(in thousands, except per share)
For 3 Months Ended Sept. 30 For 9 Months Ended Sept. 30
1996 1997 1996 1997
INTEREST INCOME:
Loans $ 745 $ 908 $ 2,043 $ 2,595
Investments 73 65 295 200
Interest earning deposits 1 3 5 7
--- --- ----- -----
Total interest income 819 976 2,343 2,802
INTEREST EXPENSE:
Deposits 414 430 1,238 1,292
Advances 54 82 113 290
--- --- ----- -----
Interest Expense 468 512 1,351 1,582
Provision for loan losses 15 15 33 45
--- --- ----- -----
Net interest income after
provision for loan losses 336 449 959 1,175
NON-INTEREST INCOME:
Other 44 112 180 265
--- --- ----- -----
Total non-interest income 44 112 180 265
NON-INTEREST EXPENSES
Compensation 97 118 262 326
Other employee benefits 38 43 106 113
Net occupancy expense 31 52 89 128
Deposit insurance premiums 212 6 248 17
Data processing 19 26 60 83
Other 68 98 197 279
--- --- ----- -----
Total non-interest expenses 465 343 962 946
Income (loss) before
income taxes (85) 218 177 494
Income tax expense (benefit) (26) 85 72 183
---- --- ----- -----
Net income (loss) $ (59) $ 133 $ 105 $ 311
==== === ===== =====
Weighted average common
equivalent share outstanding:
(See Note 3) N/A N/A N/A N/A
Net income per share N/A $ .33 N/A N/A
The accompanying notes are an integral part of these consolidated financial
statements.
4
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SECURITY BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity
(Unaudited)
(in thousands except share information)
Unrealiized Unearned
Common Paid-in Retained Treasury Gain on Compensation
Stock Capital Earnings Stock Securities for ESOP Total
----- ------- -------- ----- --------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at 12/31/96 $ - $ - $2,305 $ - $ 145 $ - $2,450
Net income - - 311 - - - 311
Unrealized gain on securities
available for sale,
net of income taxes - - - - 46 - 46
Sale of common stock
(436,425 shares) 4 4,060 - - - (349) 3,715
Unearned Compensation - 2 - - - - 2
----- ----- ----- ----- ----- ----- -----
Balance at 9/30/97 $ 4 $4,062 $2,616 $ - $ 191 $(349) $6,524
===== ===== ===== ===== ===== ===== =====
The accompanying notes are an integral part of these consolidated financial statements.
5
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SECURITY BANCORP. INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
NINE MONTHS ENDED SEPT. 30
1996 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 105 $ 311
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 36 43
Dividend on FHLB stock (25) (28)
(Gain) loss on sale of investments 2 -
Provision for loan losses 33 45
Increase (decrease) in interest receivable 35 104
(Increase) decrease in other assets (26) (14)
Increase (decrease) in accrued liabilities 182 (40)
Increase (decrease) in income taxes payable (48) 128
Increase (decrease) in deferred taxes payable (3) 28
Sale of mortgage loans held for sale 4,070 4,289
Originations of mortgage loans held for sale (4,070) (4,477)
Total adjustments 186 78
------ -----
Net cash provided by operating activities 291 389
CASH FLOWS FROM INVESTING ACTIVITIES:
Loan originations net of principal payments (8,079) (4,974)
Loans purchased (277) -
Purchase of:
Available for sale - investment securities (1,500) (250)
Held to maturity - investment securities (748)
Proceeds from sale of:
Available for sale - investment securities 999 -
Available for sale - mortgage-backed securities 527 -
Proceeds from maturities and repayments of:
Held to maturity investment securities 2,500 1000
Held to maturity mortgage-backed securities 222 227
Cash payments for the purchase of property (73) (117)
Proceeds from sale of foreclosed real estate - -
------- ------
Net cash provided (used) by investing activities (5,681) (4,862)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposit accounts 1,848 654
Proceeds from FHLB advances 3,350 (150)
Net increase (decrease) in escrow accounts 250 307
Net proceeds from issuance of capital stock - 3,715
----- -----
Net cash provided (used) by financing activities 5,448 4,526
----- -----
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 58 53
CASH AND EQUIVALENTS, BEGINNING OF YEAR 288 1,098
----- -----
CASH AND EQUIVALENTS, END OF PERIOD $ 346 $ 1,151
===== =====
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest expense $ 1,350 $ 1,581
Income taxes $ 120 $ 84
The accompanying notes are an integral part of these consolidated financial
statements.
6
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SECURITY BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
1. SECURITY BANCORP, INC.
Security Bancorp, Inc. (the "Company"), a Tennessee corporation, is the savings
and loan holding company for Security Federal Savings Bank of McMinnville, TN
(the "Savings Bank"). The Savings Bank converted from a federally chartered
mutual savings bank to a federally chartered stock savings bank effective June
30, 1997 (the "Conversion").
The consolidated financial statements included herein are for the Company and
the Savings Bank.
2. BASIS OF PREPARATION
The accompanying unaudited consolidated financial statements were prepared in
accordance with instructions for Form 10-QSB and, therefore, do not include all
disclosures necessary for a complete presentation of the consolidated balance
sheets, consolidated statements of income, consolidated statements of
stockholders' equity, and consolidated statements of cash flows in conformity
with generally accepted accounting principles. However, all adjustments which
are, in the opinion of management, necessary for the fair presentation of the
interim financial statements have been included. All such adjustments are of a
normal recurring nature. The statements of income for the three and nine month
period ended September 30, 1997 are not necessarily indicative of the results
which may be expected for the entire year.
The unaudited consolidated financial statements should be read in conjunction
with the audited financial statements and notes thereto for the Savings Bank for
the year ended December 31, 1996.
3. EARNINGS PER SHARE
Earnings per share for the three month period ended September 30, 1997 was
33(cent) per share. Earnings per share is not meaningful for 1996 or for the
nine months ending September 30, 1997 because the mutual to stock conversion was
not effective until June 30, 1997.
4. STOCKHOLDERS' EQUITY
In connection with the Conversion, which was consummated on June 30, 1997, the
Company issued and sold 436,425 shares of common stock at a price of $10.00 per
share for total net proceeds of approximately $4.1 million after conversion
expenses of approximately $300,000. The Company retained $406,000 of the net
proceeds and used the remaining net proceeds to purchase the newly issued
capital stock of the Savings Bank.
7
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The Savings Bank may not declare or pay a cash dividend if the effect thereof
would cause its net worth to be reduced below either the amounts required for
the liquidation account discussed below or the regulatory capital requirements
imposed by federal and state regulations.
As required by the regulations of the Office of Thrift Supervision, at the time
of Conversion, the Savings Bank established a liquidation account in an amount
equal to its retained earnings as reflected in the latest balance sheet used in
the final conversion prospectus. The liquidation account is maintained for the
benefit of eligible account holders who continue to maintain their deposit
accounts in the Savings Bank after conversion. In the event of a complete
liquidation of the Savings Bank (and only in such an event), eligible depositors
who continue to maintain accounts shall be entitled to receive a distribution
from the liquidation account before any liquidation may be made with respect to
the Company's common stock.
5. EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)
As part of the Conversion discussed in Note 4, an Employee Stock Ownership Plan
(ESOP) was established for all employees who have attained the age of 21 and
have been credited with at least 1000 hours of service during a 12-month period.
The ESOP borrowed approximately $349,000 from the Company and used the funds to
purchase 34,914 shares of common stock of the Company issued in the Conversion.
The loan will be repaid principally from the Company's discretionary
contributions to the ESOP over a period of 10 years. On September 30, 1997, the
loan had an outstanding balance of approximately $349,000 and an interest rate
of 8.50%. The loan obligation of the ESOP is considered unearned compensation
and, as such, recorded as a reduction of the Company's stockholders' equity.
Both the loan obligation and the unearned compensation are reduced by an amount
of the loan repayments made by the ESOP. Shares purchased with the loan proceeds
are held in a suspense account for allocation among participants as the loan is
repaid. Contributions to the ESOP and shares released from the suspense account
are allocated among participants on the basis of compensation in the year of
allocation. Benefits become fully vested at the end of six years of service
under the terms of the ESOP Plan. Benefits may be payable upon retirement,
death, disability, or separation from service. Since the Company's annual
contributions are discretionary, benefits payable under the ESOP cannot be
estimated. Compensation expenses are recognized to the extent of the fair value
of shares committed to be released.
For the three and nine months ending September 30, 1997, there was no
compensation from the ESOP. Compensation will be recognized at the average fair
value of the ratably released shares during the accounting period as the
employees performed services. At September 30, 1997, the ESOP had 34,914
unallocated shares.
8
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The ESOP administrators will determine whether dividends on allocated and
unallocated shares will be used for debt service. Any allocated dividends used
will be replaced with common stock of equal value. For the purpose of computing
earnings per share, all ESOP shares committed to be released have been
considered outstanding.
6. ASSET QUALITY
At September 30, 1997, the Company had total nonperforming loans (i.e., loans
which are contractually past due 90 days or more) of approximately $23,000. The
Company had no real estate acquired through foreclosure as of September 30,
1997. As a percentage of net loans at September 30, 1997, nonperforming loans
was .06%. Total nonperforming assets as a percentage of total assets at
September 30, 1997 was .05%.
9
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
The following discussion and analysis is intended to assist in understanding the
financial condition and the results of operations of the Company. References to
the "Company" include Security Bancorp, Inc. and/or Security Federal Savings
Bank, of McMinnville, TN, as appropriate.
COMPARISON OF FINANCIAL CONDITION AT DECEMBER 31, 1996
AND SEPTEMBER 30, 1997
The Company's total consolidated assets increased by approximately $5.0 million
or 11.3%, from $44.1 million at December 31, 1996 to $49.1 million at September
30, 1997. The increase in assets for the period was primarily attributable to an
increase in loans receivable and an increase in stockholders' equity resulting
from capital raised during the stock conversion.
Loans receivable, net, were $41.6 million at September 30, 1997 compared to
$36.7 million at December 31, 1996, a 13.4% increase. This increase was
primarily attributable to an increase in first mortgage residential loans of
$2.3 million, an increase in commercial loans of $2.1 million, and an increase
in consumer loans of $500,000. The largest loan originated during this period
was a commercial land development line of credit loan for $500,000 at 8.5% fixed
for 5 years.
Deposits increased $700,000 or 1.8%, from $35.8 million at December 31, 1996 to
$36.5 million at September 30, 1997. The increase in deposits was primarily
attributable to an increase in commercial checking accounts.
COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS
ENDED SEPTEMBER 30, 1996 AND 1997.
NET INCOME. Net income for the three months ended September 30, 1997 was
$133,000 compared to a loss of $59,000 for the same quarter last year. The prior
year's loss includes the one time pre-tax SAIF assessment of $193,000 levied by
the Federal Deposit Insurance Corporation. The return on average assets was
1.11% for the three months ended September 30, 1997.
NET INTEREST INCOME. Net interest income increased $113,000 or 33.6% from
$336,000 for the three months ended September 30, 1996 to $449,000 for the three
months ended September 30, 1997. The interest rate spread increased from 3.38%
for three months ending September 30, 1996 to 3.67% for the three months ending
September 30, 1997 as a result of the average rates of the loan portfolio
increasing more than the average rate of deposits and borrowings.
10
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Total interest income increased $157,000 from $819,000 for the three months
ended September 30, 1996 to $976,000 for the three months ended September 30,
1997. Interest on loans increased $163,000 or 21.9% as a result of a $6.4
million increase in average loans outstanding substantially in non-residential
mortgage loans.
Interest expense increased $44,000 from $468,000 for the three months ended
September 30, 1996 to $512,000 for the three months ended September 30, 1997.
The increase for the three months ending September 30, 1997 was the result of an
increase in the average balance of deposits and in the average balance of
FHLB-Cincinnati advances, both of which were used to fund loan demand.
PROVISION FOR LOAN LOSSES. Provisions for loan losses are charges to earnings to
bring the total allowance for loan losses to a level considered adequate by
management to provide for estimated loan losses based on management's evaluation
of the collectability of the loan portfolio, including past loan loss
experience, adverse situations that may affect the borrower's ability to repay,
the estimated value of any underlying collateral, and current economic
conditions. The provision for loan losses for each of the three month periods
ended September 30, 1996 and 1997 was $15,000. Historically, management has
emphasized the Company's loss experience over other factors in establishing
provisions for loan losses. Management deemed the allowance for loan losses
adequate at September 30, 1997.
NONINTEREST INCOME. Noninterest income increased 154.5% to $112,000 for the
three months ended September 30, 1997 from $44,000 for the three months ended
September 30, 1996. This increase is primarily due to gains from the sale of
residential loans increasing $56,000 in the 1997 period due to selling more
residential loans and implementing SFAS 125, accounting for transfers and
servicing of financial assets, effective January 1, 1997. Additionally,
noninterest income increased as a result of increased mortgage servicing income
on loans sold and increasing service charges on deposit accounts.
NONINTEREST EXPENSE. Noninterest expenses decreased 26.2% to $343,000 for the
three months ended September 30, 1997 from $465,000 for the three months ended
September 30, 1996. This decrease resulted primarily from the one time pre-tax
SAIF assessment of $193,000 levied by the FDIC in the third quarter of 1996. As
a result of the SAIF recapitalization, the Savings Bank's annual deposit
insurance premiums decreased from 23 basis points to 6.5 basis points of
assessable deposits effective January 1, 1997. Compensation and occupancy
expenses increased by $20,000 and $21,000, respectively, from the three months
ending September 30, 1996 to the three months ending September 30, 1997. These
increases were primarily due to costs arising from opening the Smithville
Highway branch in March, 1997. The increase in operating expenses of $30,000 for
the three months ended September 30, 1997 is primarily due to marketing
expenditures for deposits and the new costs associated with being a public
company.
11
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INCOME TAXES. Income tax expense for the three months ending September 30, 1997
was $85,000 compared to income tax benefit of $(26,000) for the same period in
1996. This increase was the result of pre-tax income increasing by $303,000 for
the three months in 1997.
COMPARISON OF RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 AND 1997
NET INCOME. Net income for the nine months ended September 30, 1997 was $311,000
compared to $105,000 for the nine months ended September 30, 1996, a 196.2%
increase. The increase resulted primarily from the one-time pre-tax SAIF
assessment levied by the FDIC in the third quarter of 1996. The return on
average assets was .86% for the nine months ended September 30, 1997 compared to
.34% for the nine months ended September 30, 1996.
NET INTEREST INCOME. Net interest income increased 22.5% to $1,175,000 for the
nine months ended September 30, 1997 from $959,000 for the nine months ended
September 30, 1996, as a result of an increase in total interest income that
more than offset an increase in total interest expense.
Total interest income increased 19.6% to $2,802,000 for the nine months ended
September 30, 1997 from $2,343,000 for the same 1996 period primarily as a
result of increases in both the average balance of and average yield on loans
receivable, net. The average balance of loans receivable, net increased to $40.6
million from $34.1 million, and the average yield increased to 8.80% from 8.55%.
Both increases are attributable to the substantial increase in nonresidential
mortgage loans.
Interest expense increased 17.1% to $1,582,000 for the nine months ended
September 30, 1997 from $1,351,000 for the same 1996 period, primarily as a
result of an increase in average balances of interest-bearing deposits and
FHLB-Cincinnati advances, both of which were used to fund loan demand.
PROVISION FOR LOAN LOSSES. The provision for loan losses was $45,000 for the
nine months ended September 30, 1997 compared to $33,000 for the nine months
ended September 30, 1996. Management deemed the increase in the provision for
loan losses necessary in light of the growth of the loan portfolio, particularly
in the areas of nonresidential mortgage loans (i.e., construction, commercial
real estate, acquisition and development, commercial business and consumer
loans) that are generally considered to have a greater risk of loss. Management
deemed the allowance for loan losses adequate at September 30, 1997.
NONINTEREST INCOME. Noninterest income increased 47.2% to $265,000 for the nine
months ended September 30, 1997 from $180,000 for the same 1996 period. This
increase is primarily due to gains from the sale of residential loans increasing
$50,000 in the 1997 period due to selling more residential loans and
implementing SFAS 125, accounting for transfers and servicing of financial
assets, effective January 1, 1997. Additionally, noninterest income increased as
a result of increased mortgage servicing income on loans sold and increased
service charges on deposit accounts.
12
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NONINTEREST EXPENSE. Noninterest expenses decreased 2.4% from $962,000 for the
nine months ended September 30, 1996 to $946,000 for the same period in 1997.
The decrease is a result of the one-time SAIF assessment levied in the third
quarter of 1996. Compensation and occupancy expense increased by $64,000 and
$39,000, respectively, for the nine months ended September 30, 1997. These
increases were primarily due to costs arising from opening the Smithville
Highway Branch in March, 1997. The increase in other operating expenses of
$82,000 for the nine months ended September 30, 1997 is primarily due to
marketing expenditures for deposits and the new costs associated with being a
public company. Offsetting these expense increases was a decrease in FDIC
deposit insurance premiums. As a result of the SAIF recapitalization, the Saving
Bank's annual deposit insurance premiums decreased from 23 basis points to 6.5
basis points of assessable deposits effective January 1, 1997.
INCOME TAX EXPENSE. Income tax expense for the nine months ended September 30,
1997 was $183,000 compared to $72,000 for the same period in 1996. The increase
was the result of pre-tax income increasing by $317,000 for the nine months in
1997.
LIQUIDITY AND CAPITAL RESOURCES. The company's primary sources of funds are
deposits and proceeds from principal and interest payments on loans. While
maturities and scheduled amortization of loans are a predictable source of
funds, deposit flows and mortgage prepayments are greatly influenced by general
interest rates, economic conditions and competition. The Company's primary
investing activity is loan originations. The Company maintains liquidity levels
adequate to fund loan commitments, investment opportunities, deposit withdrawals
and other financial commitments. At September 30, 1997, the Savings Bank's
liquidity ratio was 10.5% (required ratio at that date was 5% pursuant to OTS
regulations). At September 30, 1997, there were no material commitments for
capital expenditures and the Company had unfunded loan commitments of
approximately $1,582,000. At September 30, 1997, management had no knowledge of
any trends, events or uncertainties that will have or are reasonably likely to
have material effects on the liquidity, capital resources or operations of the
Company. Further at September 30, 1997, management was not aware of any current
recommendations by the regulatory authorities which, if implemented, would have
such an effect.
THE YEAR 2000 ISSUE. Management believes the Company has taken the necessary
steps to adequately address the operational issues surrounding the Year 2000 and
anticipates no material Year 2000 effects.
The Savings Bank exceeded all of its capital requirements at September 30, 1997.
The Savings Bank had the following capital ratios at September 30, 1997:
13
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SECURITY BANCORP, INC. AND SUBSIDIARY
(Unaudited)
AS OF SEPTEMBER 30, 1997 ACTUAL FOR CAPITAL CATEGORIZED AS
ADEQUACY PURPOSES "WELL CAPITALIZED"(1)
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
<S> <C> <C> <C> <C> <C> <C>
Total Capital
(to risk weighted assets) $ 6,251 20.97% $ 2,385 8.00% $ 2,981 10.00%
Tier I Capital
(to risk weighted assets) 5,929 19.89% 1,192 4.00% 1,789 6.00%
Tier 1 Capital
(to total assets) 5,929 12.07% 1,474 3.00% 2,456 5.00%
Tangible Capital
(to total assets) 5,929 12.07% 737 1.50% N/A -
(1) As categorized under the Prompt Corrective Action Provisions.
14
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
From time to time, the Company and any subsidiaries may be a party to various
legal proceedings incident to its or their business. At September 30, 1997,
there were no legal proceedings to which the Company or any subsidiary was a
party, or to which of any of their property was subject, which were expected my
management to result in a material loss.
Item 2. Changes in Securities
---------------------
None
Item 3. Defaults Upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
Item 5. Other Information
-----------------
None
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
Exhibits
3(a) Charter of Security Bancorp, Inc.* 3(b) Bylaws of Security
Bancorp, Inc.*
10(a) Employment Agreement with Joe H. Pugh
10(b) Severance Agreement with John W. Duncan
10(c) Severance Agreement with Ray Talbert
27 Financial Data Schedule
Certain exhibits are incorporated by reference in this 10-Q
by reference to the last 10-Q.
No reports on Form 8-K were filed during the quarter ended September 30, 1997.
---------------------
* Incorporated by reference to Registrant's Registration
Statement on Form SB-2, as amended (File No. 333-6670)
15
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SECURITY BANCORP, INC.
Date: November 12, 1997 By /s/ Joe H. Pugh
---------------
Joe H. Pugh
President and Chief Executive Officer
SECURITY BANCORP, INC.
Date: November 12, 1997 By /s/ John W. Duncan
------------------
John W. Duncan
Chief Financial Officer
16
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<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 1092
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1817
<INVESTMENTS-CARRYING> 2603
<INVESTMENTS-MARKET> 2619
<LOANS> 41613
<ALLOWANCE> 322
<TOTAL-ASSETS> 49130
<DEPOSITS> 36444
<SHORT-TERM> 2350
<LIABILITIES-OTHER> 812
<LONG-TERM> 3000
0
0
<COMMON> 4
<OTHER-SE> 6520
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</TABLE>
