SECURITY BANCORP, INC. ANNOUNCES 1991 OPERATING RESULTS
SECURITY BANCORP, INC. ANNOUNCES 1991 OPERATING RESULTS SOUTHGATE, Mich., Jan. 23 /PRNewswire/ -- Security Bancorp, Inc.
(NASDAQ-NMS: SECB) of Southgate announced that 1991 consolidated net income increased 7.4 percent to $24,585,000 as compared to restated consolidated net income of $22,895,000 in 1990. After the required dividend on the company's convertible preferred stock, net income applicable to common stock increased 8.9 percent as compared to 1990. Primary net income per common share for 1991 increased 7.5 percent to $2.01 from $1.87 in 1990 and fully diluted net income per common share increased 6.4 percent to $1.83 as compared to $1.72 for 1990.
During a routine review by the staff of the Securities and Exchange Commission ("SEC") in January 1992, of the company's consolidated financial statements through Sept. 30, 1991, which were filed with the SEC in connection with the proposed merger with First of America Bank Corporation (NYSE: FOA), the SEC staff disagreed with the timing of the company's decision to realize a loss on its investment in Student Loan Marketing Association adjustable-rate preferred stock. In September 1991, the company had concluded that a decline in the market value of this investment from its carrying value could no longer be considered temporary, and charged an after-tax loss of $19 million against income in the third quarter of 1991. Since 1988, the company had been providing for market value declines on this stock with an allowance recorded in shareholders' equity. The stock remains one of high credit quality, currently returns an above-market yield, and the company intends to hold the stock for a period of time which it expects will be sufficient to allow for a recovery of substantially all of its initial investment. While not disagreeing with the company's investment strategy or its intent to hold the stock, the SEC staff believed that the market decline should have been considered other than temporary earlier than 1991. Accordingly, the company has restated its consolidated financial statements since 1988 to reflect the SEC's staff position. Net income for 1990 was reduced by $7,380,000 ($.71 per primary share and $.55 per fully diluted share, respectively.) Because of the previously recorded allowance in shareholders' equity, the company's consolidated financial position has not been affected by this restatement. During the fourth quarter of 1991, the company, through a provision charge to earnings, increased its Reserve for Loan Losses by $6 million. The purpose of this increase in the reserve was to increase the company's reserve coverage of nonperforming assets. The increase in Security's reserve improved the coverage ratio from 87.5 percent to 110.3 percent. Security Bancorp, Inc. is the parent company of Security Bank and Trust Company, Security Bank of Commerce, Security Bank Northeast, Security Bank St. Clair Shores, Security Bank of Monroe and SecureData Corporation. SECURITY BANCORP, INC. FINANCIAL HIGHLIGHTS For the Year 1991 1990 Net income $24,585,000 $22,895,000 Primary net income per common share 2.01 1.87 Fully diluted net income per common share 1.83 1.72 Cash dividends declared on common stock 1.00 .94 Primary net income per common share is based on net income less preferred stock dividends. Fully diluted net income per common share is based on the shares that would be outstanding if all of the company's Series A convertible preferred stock was exchanged for common stock. The current annualized indicated cash dividend on common stock is $1.00. -0- 1/23/92 /CONTACT: Security Bancorp, Inc. Investor Relations, 313-281-5436/ (SECB) CO: Security Bancorp, Inc. ST: Michigan IN: FIN SU: ERN
JG-KK -- DE021 -- 2921 01/23/92 15:06 EST
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|Date:||Jan 23, 1992|
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