**UNITED
          STATES**
 **SECURITIES
          AND EXCHANGE COMMISSION**
 **WASHINGTON,
          D. C. 20549**
 
 **FORM
          10-Q**
 
 T
                QUARTERLY
                    REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE
                    ACT OF
                    1934
 
 FOR
                    THE QUARTERLY PERIOD ENDED:
                **June
                    30, 2007**
 
 OR
 
 o
                TRANSITION
                    REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE
                    ACT OF
                    1934
 
 
 COMMISSION
                    FILE NUMBER:
                **000-50224**
 
 
 **SECURITY
            CAPITAL CORPORATION**
 (EXACT
          NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
 **MISSISSIPPI**
                **64-0681198**(STATE
                    OF INCORPORATION)
                (I.
                    R. S. EMPLOYER IDENTIFICATION NO.)
 
 **295
                    HIGHWAY 6 WEST/ P. O. BOX 690**
                ******BATESVILLE,
                    MISSISSIPPI**
                **38606**(ADDRESS
                    OF PRINCIPAL
                (ZIP
                    CODE)EXECUTIVE
                    OFFICES)
 
 662-563-9311
 (ISSUER’S
          TELEPHONE NUMBER, INCLUDING AREA CODE)
 
 NONE
 (FORMER
          NAME, ADDRESS AND FISCAL YEAR, IF CHANGED SINCE LAST REPORT
 
 INDICATE
          BY CHECK MARK WHETHER THE ISSUER:  (1) HAS FILED ALL REPORTS REQUIRED
          TO BE FILED BY SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934
          DURING THE PRECEDING 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.
 
 T
          YES  £
          NO
 
 INDICATE
          BY CHECK MARK WHETHER THE REGISTRANT IS A LARGE ACCELERATED FILER, AN
          ACCELERATED FILER OR A NON-ACCELERATED FILER.  SEE DEFINITION OF
“ACCELERATED FILER AND LARGE ACCELERATED FILER” IN RULE 12B-2 OF THE EXCHANGE
          ACT.  (CHECK ONE):
 LARGE
                    ACCELERATED FILER £
                ACCELERATED
                    FILER T
                NON-ACCELERATED
                    FILER £
   
  INDICATE
          BY CHECK MARK WHETHER THE REGISTRANT IS A SHELL COMPANY (AS DEFINED IN
          RULE
          12B-2 OF THE EXCHANGE ACT.)
 
 £
          YES  T
          NO
 
 
 INDICATE
          THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER’S CLASSES OF COMMON STOCK
          AS OF JUNE 30, 2007.
 
 TITLE
                OUTSTANDINGCOMMON
                    STOCK, $5.00 PAR VALUE
                2,745,020
  
 SECURITY
            CAPITAL CORPORATION
 FORM
            10-Q
 
 SECOND
            QUARTER 2007 INTERIM FINANCIAL STATEMENTS
 
 TABLE
                      OF CONTENTSPART
                      I.
                  FINANCIAL
                      INFORMATIONItem
                      1.
                  Consolidated
                      Financial StatementsConsolidated
                      Balance Sheets
                    June
                      30, 2007 and December 31, 2006Consolidated
                      Statements of Income
                    Six
                      months and three months ended June 30, 2007 and
                      2006Consolidated
                      Statements of Comprehensive
                      Income
                    Six
                      months and three months ended June 30, 2007 and
                      2006Consolidated
                      Statements of Cash Flows
                    Six
                      months ended June 30, 2007 and 2006Notes
                      to Consolidated Financial
                      StatementsItem
                      2.
                  Management’s
                      Discussion and Analysis of Financial Condition
                      and Results of OperationsItem
                      3.
                  Quantitative
                      and Qualitative Disclosures about Market
                      RiskItem
                      4.
                  Controls
                      and ProceduresPART
                      II.
                  OTHER
                      INFORMATIONItem
                      1.
                  Legal
                      ProceedingsItem
                      2.
                  Changes
                      in SecuritiesItem
                      3.
                  Defaults
                      upon Senior SecuritiesItem
                      4.
                  Submission
                      of Matters to a Vote of Security
                      HoldersItem
                      5.
                  Other
                      InformationItem
                      6.
                  Exhibits
                      and Reports on Form
                      8-K
 ***Table
              of Contents***
 
 PART
          1 – FINANCIAL INFORMATION
 
 ITEM
                    NO. 1
                FINANCIAL
                    STATEMENTS
 
 SECURITY
                    CAPITAL CORPORATIONCONSOLIDATED
                    BALANCE SHEETS(dollar
                    amounts presented in thousands)(Unaudited)June
                    30,
                
                
                Dec.
                    31,2007
                
                
                2006ASSETSCash
                    and due from banks
                
                $
                17,204
                
                
                $
                23,073Interest-bearing
                    deposits with banks
                
                
                4,855
                
                
                
                374Total
                    cash and cash equivalents
                
                
                22,059
                
                
                
                23,447Federal
                    funds sold
                
                
                9,600
                
                
                
                -Term
                    deposits with other banks
                
                
                198
                
                
                
                198Securities
                    available-for-sale
                
                
                61,207
                
                
                
                61,028Securities
                    held-to-maturity, estimated fair value of $7,510 in 2007 and
                    $8,150 in
                    2006
                
                
                7,397
                
                
                
                7,850Securities,
                    other
                
                
                1,789
                
                
                
                2,250Total
                    securities
                
                
                70,393
                
                
                
                71,128Loans,
                    less allowance for loan losses of
                  $4,601
                    in 2007 and $4,334 in 2006
                
                
                342,995
                
                
                
                322,324Interest
                    receivable
                
                
                5,474
                
                
                
                5,091Premises
                    and equipment
                
                
                21,898
                
                
                
                21,969Intangible
                    assets
                
                
                3,874
                
                
                
                3,874Cash
                    surrender value of life insurance
                
                
                5,970
                
                
                
                5,869Other
                    assets
                
                
                4,209
                
                
                
                4,429Total
                    Assets
                
                $
                486,670
                
                
                $
                458,329LIABILITIES
                    AND SHAREHOLDERS' EQUITYLiabilities:Noninterest-bearing
                    deposits
                
                $
                54,863
                
                
                $
                59,380Time
                    deposits of $100,000 or more
                
                
                92,530
                
                
                
                77,169Other
                    interest-bearing deposits
                
                
                255,365
                
                
                
                230,150Total
                    deposits
                
                
                402,758
                
                
                
                366,699Interest
                    payable
                
                
                1,832
                
                
                
                1,591Federal
                    Funds Purchased
                
                
                -
                
                
                
                8,000Borrowed
                    funds
                
                
                24,868
                
                
                
                27,380Other
                    liabilities
                
                
                2,328
                
                
                
                2,675Total
                    Liabilities
                
                
                431,786
                
                
                
                406,345Shareholders'
                    equity:Common
                    stock - $5 par value, 5,000,000 shares authorized, 2,753,557
                    shares issued
                    in 2007 and 2006
                
                
                13,768
                
                
                
                13,768Surplus
                
                
                35,696
                
                
                
                35,654Retained
                    Earnings
                
                
                6,062
                
                
                
                2,651Accumulated
                    other comprehensive income
                
                
                (599
                )
                
                
                (41
                )Treasury
                    stock, at par, 8,537 shares and 9,487 shares in 2007 and 2006,
                    respectively
                
                
                (43
                )
                
                
                (48
                )Total
                    Shareholders' Equity
                
                
                54,884
                
                
                
                51,984Total
                    Liabilities and Shareholders' Equity
                
                $
                486,670
                
                
                $
                458,329
  ***Table
              of Contents***
 SECURITY
                    CAPITAL CORPORATIONCONSOLIDATED
                    STATEMENTS OF INCOME(dollar
                    amounts presented in thousands)(Unaudited)
                
                
                (Unaudited)For
                    the three months
                
                
                For
                    the six monthsended
                    June 30,
                
                
                ended
                    June 30,2007
                
                
                2006
                
                
                2007
                
                
                2006INTEREST
                    INCOMEInterest
                    and fees on loans
                
                $
                7,685
                
                
                $
                6,786
                
                
                $
                14,884
                
                
                $
                12,881Interest
                    and dividends on securities
                
                
                900
                
                
                
                842
                
                
                
                1,696
                
                
                
                1,661Federal
                    funds sold
                
                
                36
                
                
                
                8
                
                
                
                97
                
                
                
                42Other
                
                
                24
                
                
                
                49
                
                
                
                115
                
                
                
                107Total
                    interest income
                
                
                8,645
                
                
                
                7,685
                
                
                
                16,792
                
                
                
                14,691INTEREST
                    EXPENSEInterest
                    on deposits
                
                
                3,157
                
                
                
                2,406
                
                
                
                6,091
                
                
                
                4,542Interest
                    on borrowings
                
                
                330
                
                
                
                184
                
                
                
                616
                
                
                
                343Interest
                    on federal funds purchased
                
                
                26
                
                
                
                79
                
                
                
                48
                
                
                
                103Total
                    interest expense
                
                
                3,513
                
                
                
                2,669
                
                
                
                6,755
                
                
                
                4,988Net
                    Interest Income
                
                
                5,132
                
                
                
                5,016
                
                
                
                10,037
                
                
                
                9,703Provision
                    for loan losses
                
                
                161
                
                
                
                242
                
                
                
                434
                
                
                
                483Net
                    interest income after provision for loan losses
                
                
                4,971
                
                
                
                4,774
                
                
                
                9,603
                
                
                
                9,220OTHER
                    INCOMEService
                    charges on deposit accounts
                
                
                1,297
                
                
                
                1,125
                
                
                
                2,559
                
                
                
                2,237Trust
                    Department income
                
                
                228
                
                
                
                243
                
                
                
                499
                
                
                
                501Securities
                    net gain (loss)
                
                
                -
                
                
                
                6
                
                
                
                -
                
                
                
                (7
                )Impairment
                    loss on securities
                
                
                -
                
                
                
                -
                
                
                
                (448
                )
                
                
                -Other
                    income
                
                
                249
                
                
                
                193
                
                
                
                487
                
                
                
                420Total
                    other income
                
                
                1,774
                
                
                
                1,567
                
                
                
                3,097
                
                
                
                3,151OTHER
                    EXPENSESSalaries
                    and employee benefits
                
                
                2,578
                
                
                
                2,298
                
                
                
                5,079
                
                
                
                4,572Occupancy
                    expense
                
                
                621
                
                
                
                468
                
                
                
                1,213
                
                
                
                889Other
                    operating expense
                
                
                819
                
                
                
                821
                
                
                
                1,465
                
                
                
                1,577Total
                    other expenses
                
                
                4,018
                
                
                
                3,587
                
                
                
                7,757
                
                
                
                7,038INCOME
                    BEFORE PROVISION FOR INCOME TAXES
                
                
                2,727
                
                
                
                2,754
                
                
                
                4,943
                
                
                
                5,333PROVISION
                    FOR INCOME TAXES
                
                
                831
                
                
                
                927
                
                
                
                1,531
                
                
                
                1,724NET
                    INCOME
                
                $
                1,896
                
                
                $
                1,827
                
                
                $
                3,412
                
                
                $
                3,609BASIC
                    NET INCOME PER SHARE
                
                $
                0.69
                
                
                $
                0.67
                
                
                $
                1.24
                
                
                $
                1.32
 ***Table
                of Contents***
  SECURITY
                    CAPITAL CORPORATIONCONSOLIDATED
                    STATEMENTS OF COMPREHENSIVE INCOME(dollar
                    amounts presented in thousands)(Unaudited)
                
                
                (Unaudited)For
                    the three months
                
                
                For
                    the six monthsended
                    June 30,
                
                
                ended
                    June 30,2007
                
                
                2006
                
                
                2007
                
                
                2006Net
                    income
                
                $
                1,896
                
                
                $
                1,827
                
                
                $
                3,412
                
                
                $
                3,609Other
                    comprehensive income, net of tax:Unrealized
                    holding gains/(losses)
                
                
                (761
                )
                
                
                (546
                )
                
                
                (830
                )
                
                
                (631
                )Comprehensive
                    income
                
                $
                1,135
                
                
                $
                1,281
                
                
                $
                2,582
                
                
                $
                2,978
 ***Table
                of Contents***
  SECURITY
                    CAPITAL CORPORATIONCONSOLIDATED
                    STATEMENTS OF CASH FLOWS(dollar
                    amounts presented in thousands)(Unaudited)Six
                    months endedJune
                    30,2007
                
                
                2006CASH
                    FLOWS FROM OPERATING ACTIVITIES:NET
                    INCOME
                
                
                3,412
                
                
                
                3,609Adjustments
                    to reconcile net income to net cash provided by operating
                    activities:Provision
                    for loan losses
                
                
                434
                
                
                
                483Amortization
                    of premiums and discounts on securities, net
                
                
                65
                
                
                
                162Depreciation
                    and amortization
                
                
                569
                
                
                
                477FHLB
                    stock dividend
                
                
                45
                
                
                
                (29
                )Loss
                    (gain) on securities
                
                
                -
                
                
                
                7Impairment
                    loss on securities
                
                
                448
                
                
                
                -Gain
                    on sale/disposal of other assets
                
                
                (12
                )
                
                
                (36
                )Changes
                    in:Interest
                    receivable
                
                
                (383
                )
                
                
                (380
                )Cash
                    value of life insurance, net
                
                
                (102
                )
                
                
                (95
                )Other
                    assets
                
                
                170
                
                
                
                (6,611
                )Interest
                    payable
                
                
                241
                
                
                
                289Other
                    liabilities
                
                
                (347
                )
                
                
                (1,124
                )Net
                    cash provided by operating activities
                
                
                4,540
                
                
                
                (3,248
                )CASH
                    FLOWS FROM INVESTING ACTIVITIESIncrease
                    in loans
                
                
                (20,938
                )
                
                
                (20,658
                )Purchase
                    of securities available for sale
                
                
                (25,405
                )
                
                
                (6,500
                )Proceeds
                    of maturities and calls of securities available for sale
                
                
                24,064
                
                
                
                9,866Proceeds
                    of maturities and calls of securities held to maturity
                
                
                210
                
                
                
                -Additions
                    to premises and equipment
                
                
                (213
                )
                
                
                2,660Proceeds
                    of sale of other assets
                
                
                360
                
                
                
                510Changes
                    in:Federal
                    funds sold
                
                
                (9,600
                )
                
                
                -Net
                    cash used in investing activities
                
                
                (31,522
                )
                
                
                (14,122
                )CASH
                    FLOWS FROM FINANCING ACTIVITIESChanges
                    in:Deposits
                
                
                36,059
                
                
                
                6,871Federal
                    funds purchased
                
                
                (8,000
                )
                
                
                (3,000
                )Reissuance
                    of treasury stock
                
                
                46
                
                
                
                30Repayment
                    of debt
                
                
                (32,026
                )
                
                
                (1,388
                )Proceeds
                    from issuance of debt
                
                
                29,515
                
                
                
                12,712Net
                    cash provided by financing activities
                
                
                25,594
                
                
                
                15,225Net
                    increase in cash and cash equivalents
                
                
                (1,388
                )
                
                
                (2,145
                )Cash
                    and cash equivalents at beginning of period
                
                
                23,447
                
                
                
                19,677Cash
                    and cash equivalents at end of period
                
                
                22,059
                
                
                
                17,532Cash
                    paid during the period for:Interest
                
                
                6,514
                
                
                
                4,699Income
                    taxes
                
                
                1,588
                
                
                
                1,821
 ***Table
                of Contents***
  SECURITY
          CAPITAL CORPORATION
 
 NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
 NOTE
          A –
BASIS OF PRESENTATION
 
 The
          accompanying unaudited consolidated financial statements have been prepared
          in
          accordance with generally accepted accounting principles for interim financial
          statements.  Accordingly, they do not include all of the information
          and footnotes required by generally accepted accounting principles for
          complete
          financial statements.  However, in the opinion of management, all
          adjustments (consisting of normal recurring adjustments) considered necessary
          for fair presentation have been included.  Operating results for the
          six months ended June 30, 2007, are not necessarily indicative of the results
          that may be expected for the year ending December 31, 2007.  For
          further information, please refer to the Company’s Form 10-K filed March 16,
          2007, which includes the consolidated financial statements and footnotes
          for the
          year ended December 31, 2006.
 
 NOTE
          B –
SUMMARY OF ORGANIZATION
 
 Security
          Capital Corporation (the “Company) was incorporated September 16, 1982, under
          the laws of the State of Mississippi for the purpose of acquiring First
          Security
          Bank and serving as a one-bank holding company.
 
 First
          Security Bank (the “Bank” or the “subsidiary Bank”) and Batesville Security
          Building Corporation are wholly owned subsidiaries of the Company.
 
 First
          Security Bank was originally chartered under the laws of the State of
          Mississippi on October 25, 1951, and engages in a wide range of commercial
          banking activities and emphasizes its local management, decision-making
          and
          ownership.  The Bank offers a full range of banking services designed
          to meet the basic financial needs of its customers.  These services
          include checking accounts, NOW accounts, money market deposit accounts,
          savings
          accounts, certificates of deposit, and individual retirement
          accounts.  The Bank also offers a wide range of personal and corporate
          trust services and commercial, agricultural, mortgage and personal loans.
          Its
          full-service banking locations expanded to eleven with the October 31,
          2001
          opening in Olive Branch, Mississippi, the July 1, 2002 opening in Hernando,
          Mississippi and the August 2003 opening in Pope, Mississippi.  In
          April of 2005, a twelfth full service branch opened in Southaven,
          Mississippi.  Construction was completed in July of 2006 on a new
          facility for the Robinsonville banking location.  The facility for a
          new full-service branch on the corner of Goodman Road and Pleasant Hill
          Road in
          Desoto County was ready for occupancy at the end of September of 2006.
          Each of
          the newly constructed buildings represents state of the art facilities
          and will
          meet the needs of the staff and the level of customer activity.  To
          better serve the customers in the northern Panola County, an additional
          location
          in Sardis   opened in October of 2006.
 
 Batesville
          Security Building Corporation, the non-bank subsidiary, was chartered under
          the
          laws of the State of Mississippi on June 23, 1971, generally, to deal in
          and
          manage real estate and personal property.
 
 The
          Company filed its initial registration statement, Form 10-SB, with the
          Securities and Exchange Commission on March 28, 2003 having reached and
          exceeded
          500 shareholders in 2002.
 
 NOTE
          C –
EARNINGS PER COMMON SHARE
 
 Basic
          per
          share data is calculated based on the weighted average number of common
          shares
          outstanding during the reporting period.  Diluted per share data
          includes any dilution from potential common stock outstanding, such as
          the
          exercise of stock options.  For the periods presented below, there
          were no potential dilutive common shares.  All weighted average,
          actual shares or per share information in the financial statements have
          been
          adjusted retroactively for the effect of stock dividends.
  ***Table
              of Contents***
  For
                    the Three Months EndedJune
                    30, 2007Net
                    Income
                
                
                Shares
                
                
                Per
                    Share(Numerator)
                
                
                (Denominator)
                
                
                DataBasic
                    per Share
                
                $
                1,895,173
                
                
                
                2,744,762
                
                
                $
                0.69For
                    the Six Months EndedJune
                    30, 2007Net
                    Income
                
                
                Shares
                
                
                Per
                    Share(Numerator)
                
                
                (Denominator)
                
                
                DataBasic
                    per Share
                
                $
                3,411,607
                
                
                
                2,744,506
                
                
                $
                1.24For
                    the Three Months EndedJune
                    30, 2006(as
                    restated for stock dividend)Net
                    Income
                
                
                Shares
                
                
                Per
                    Share(Numerator)
                
                
                (Denominator)
                
                
                DataBasic
                    per Share
                
                $
                1,826,550
                
                
                
                2,742,950
                
                
                $
                0.67For
                    the Six Months EndedJune
                    30, 2006(as
                    restated for stock dividend)Net
                    Income
                
                
                Shares
                
                
                Per
                    Share(Numerator)
                
                
                (Denominator)
                
                
                DataBasic
                    per Share
                
                $
                3,608,873
                
                
                
                2,742,797
                
                
                $
                1.32
 
 
 NOTE
          D –
RECLASSIFICATION
 
 Certain
          amounts in the 2006 consolidated financial statements have been reclassified
          to
          conform to the classifications used in 2007.  The reclassifications
          occurred in the Consolidated Statements of Cash Flows and had no material
          effect
          on the presentation.
 
 ITEM
                    NO. 1A
                RISK
                    FACTORS
 
 There
          are
          no material changes to the Company’s risk factors from what was previously
          disclosed in the Annual Report on Form 10-K for the year ended December
          31,
          2006.
 
 ITEM
                    NO. 2
                MANAGEMENT’S
                    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                    OPERATIONS
 
 The
          following discussion contains “forward-looking statements” relating to, without
          limitation, future economic performance, plan and objectives of management
          for
          future operations, and projections of revenues and other financial items
          that
          are based on the beliefs of the Company’s management, as well as assumptions
          made by and information currently available to the Company’s
          management.  The words “expect,” “estimate,” “anticipate,” and
“believe,” as well as similar expressions, are intended to identify
          forward-looking statements.  The Company’s actual results may differ
          and the Company’s operating performance each quarter is subject to various risks
          and uncertainties that are discussed in detail in the Company’s filing of the
          Form 10Q with the Securities and Exchange Commission.
  ***Table
              of Contents***
  The
          subsidiary Bank represents the primary assets of the
          Company.   On June 30, 2007, First Security Bank had
          approximately $485.6 million in assets compared to $451.2 million at June
          30,
          2006.  Loans increased to $344.7 million at June 30, 2007, from $323.3
          million at June 30, 2006.  Deposits increased by $41.3 million from
          June 30, 2006 to June 30, 2007, for a total of $402.9 million.  For
          the six months ended June 30, 2007, and June 30, 2006, the Bank reported
          income
          of approximately $3,501,945 and $3,711,011 respectively.
 
 CHANGES
          IN FINANCIAL CONDITION
 
 The
          cash
          and cash equivalents of $22.1 million at June 30, 2007, reflected a decrease
          of
          $1.3 million from the cash position of $23.4 million at December 31,
          2006.  This decrease is attributed to a daily fluctuation due to
          normal bank transactions.  The cash management team readily invests
          available cash and assesses the investment tools for the most desirable
          yield
          and the funding needs of the bank.
 
 The
          earning assets at December 31, 2006, were $404.6 million and at June 30,
          2007,
          were $437.3 million.  The   increase is attributable
          mainly to the growth in the loan portfolio.  The premises and
          equipment, net of the accumulated depreciation, at December 31, 2006, and
          at
          June 30, 2007, totaled approximately $22.0 million – reflecting a decrease of
          $71 thousand for the first six months in 2007 due to disposals and depreciation
          offsetting purchases.  Investment securities decreased from $71.1
          million at December 31, 2006, to $70.4 million at June 30,
          2007.  Other assets decreased to $4.2 million at June 30, 2007, from
          $4.4 million at December 31, 2006.
 
 Deposit
          liabilities at June 30, 2007, reflected a 9.8% growth or a $36.1 million
          increase for the first six months in 2007.  The rise in deposits,
          which is largely attributable to a normal seasonal increase in public funds,
          decreases the amount of long-term borrowings and short-term borrowings
          needed
          for funding investments in loans and facilities.  Short-term
          borrowings provide a tool in providing the funding for unforeseen deposit
          withdrawals and seasonal loan demands.  The short-term funding was
          eliminated during the first six months in 2007 with the payment of $28
          million
          to the Federal Home Loan Bank.  Federal funds purchased at December
          31, 2006, of $8 million have been repaid.
 
 The
          net
          unrealized gain on available-for-sale securities reflected in accumulated
          other
          comprehensive income (loss) in shareholders’ equity at December 31, 2006, was
          $41 thousand.  At June 30, 2007, accumulated other comprehensive
          income (loss) reflected a net unrealized loss on available-for-sale securities
          of $599 thousand.   The change over these reporting periods
          reflects the volatile nature of the market.  The changes in the market
          affected  accumulated other comprehensive income (loss) with a net
          decrease of $830 thousand for the six months ended June 30, 2007 and a
          decrease
          of $631 thousand for the six months ended June 30, 2006.
 
 The
          consolidated statements of cash flows summarize the changes in the financial
          condition of the Company.  The most prevalent of the changes for the
          six months ended June 30, 2007, are:  an increase of $20.9 million in
          loans;  purchases of securities of $25.4 million offset by an
          approximate $24.1 million in maturities and sales; an increase of $36.1
          million
          in deposits; a net decrease of $2.5 million in Federal Home Loan Bank advances
          attributable to repayments of  $32.0 million offset by advances of
          $29.5 million; and a decrease of $8 million in federal funds
          purchased.
 
 NONPERFORMING
          ASSETS AND RISK ELEMENTS
 
 Diversification
          within the loan portfolio is an important means of reducing inherent lending
          risks.  The loan portfolio is represented by the following
          mix:  Commercial 5.85%; Agricultural 2.75%; Real Estate 83.31%;
          Consumer 7.65% and Other .44%.  The major components of the real
          estate loans are 43.71% for construction and land development property,
          22.18%
          for first liens on 1-4 family residential property and 29.18% for nonfarm
          and
          nonresidential property.
 ***Table
                of Contents***
  At
          June
          30, 2007, the subsidiary Bank had loans past due as follows:
 (in
                    thousands)Past
                    due 30 days through 89 days
                $5,546Past
                    due 90 days or more and still accruing
                $1,080
 
 The
          accrual of interest is discontinued on loans which become ninety days past
          due
          unless the loans are adequately secured and in the process of
          collection.  The non-accrual loans at June 30, 2007 totaled $801
          thousand.  Any other real estate owned is carried at lower of cost or
          current appraised value less cost to dispose.  Other real estate at
          June 30, 2007, totaled $97 thousand.  A loan is classified as a
          restructured loan when the interest rate is materially reduced or the term
          is
          extended beyond the original maturity date because of the inability of
          the
          borrower to service the debt under the original terms.  The subsidiary
          Bank had no restructured loans at June 30, 2007.
 
 For
          the
          six months ended June 30, 2007, the Company experienced $535 thousand in
          charge-offs of loans and $368 thousand in recoveries of loans for a net
          decrease
          effect to the Allowance for Loan Losses of $167 thousand.  The net
          charge-offs represent .05% of average loans.  Of the $535 thousand
          charge to the Allowance for Loan Losses, the breakdown is 4.11% for 1-4
          family
          residential loans and 92.34% for consumer loans.  Consumer loan
          collections of $346 thousand represent the major component of the $368
          thousand
          in recoveries.
 
 LIQUIDITY
 
 The
          Company has an asset and liability management program that assists management
          in
          maintaining net interest margins during times of both rising and falling
          interest rates and in maintaining sufficient
          liquidity.    The asset and liability reports for June 30,
          2007, substantiates that the Company remains in a neutral position to changes
          in
          rates. A 1% increase or decrease in market rates will basically not affect
          net
          interest income.  The Company’s policy allows for no more than a 10%
          movement in NII (net interest income) in a 200 basis point ramp of market
          rates
          over a one-year period.  When funds exceed the needs for reserve
          requirements or short-term liquidity needs, the Company will increase its
          security investments or invest in federal funds.  It is management’s
          policy to maintain an adequate portion of its portfolio of assets and
          liabilities on a short-term basis to insure rate flexibility and to meet
          loan
          funding and liquidity needs.
 
 The
          financial status at June 30, 2007, reflects a net interest margin of 4.27%,
          a
          return on average assets of 1.48%, and a return on equity of
          13.59%.  These ratios are consistent with prior periods and represent
          the continuing effort of management in managing the rates and the
          funding.  At June 30, 2007, the regulatory liquidity ratio of 18.07%
          and the volatile dependency ratio of 17.30% are well within the policy
          requirement of a minimum liquidity ratio of 15% and 20%,
          respectively.  In addition, the core deposits represent 63.35% of
          total assets and temporary investments represent 4.59% of total assets
          and
          volatile liabilities represent 21.09% of total assets.
 
 At
          June
          30, 2007, the tools to meet these needs are the secured and unsecured lines
          of
          credit with the correspondent banks totaling $40.5 million (to borrow federal
          funds) and the line of credit with the Federal Home Loan Bank that exceeded
          $136
          million.  At June 30, 2007, the Company had available (unused) line of
          credit of approximately $112.7 million.
 
 CAPITAL
          RESOURCES
 
 Total
          consolidated equity capital at June 30, 2007, was $54.9 million or approximately
          11.28% of total assets.  The main source of capital for the
          Corporation has been the retention of net income.
 
 Quantitative
          measures established by regulation to ensure capital adequacy require the
          Company to maintain minimum amounts and ratios of Total Capital, Tier 1
          Capital
          and Leverage Capital.  Currently, the Company and the Bank have
          adequate capital positions as of June 30, 2007, as reflected below:
 ***Table
                of Contents***
  Company
                BankRisk-Based
                    Capital Ratio
                Ratio
                Ratio
                RequirementsTotal
                    Capital
                14.67%
                14.40%
                8%Tier
                    1 Capital
                13.46%
                13.17%
                4%Leverage
                    Capital
                10.81%
                10.66%
                3%
  RESULTS
          OF OPERATIONS – QUARTERLY
 
 The
          consolidated net income for the Company for the three months ended June
          30,
          2007, was $1.9 million which reflected an increase of $69 thousand or a
          3.78%
          increase from the same period in 2006.
 
 Interest
          income increased to $8.6 million for the three months ended June 30, 2007
          which
          was a $960 thousand increase from the $7.7 million for the three months
          ended
          June 30, 2006.  Other Income for the three months ended June 30, 2007,
          was $1.8 million reflecting a $207 thousand increase from the three months
          ended
          June 30, 2006.
 
 Interest
          expense reflects an increase of $844 thousand to $3.5 million for the three
          months ended June 30, 2007, from $2.7 million for the same period in
          2006.  The increase in interest expense can be attributed to the
          competitive pricing of the deposit accounts in a rising rate
          market.  Other expenses, consisting primarily of salaries, employee
          benefits and occupancy expense, for the three months ended June 30, 2007,
          reveal
          an increase of $431 thousand from the same period in 2006.
 
 A
          decrease of $81 thousand in the provision for loan losses was brought about
          by
          the Loan Loss Reserve analysis that measures inherent risk in the loan
          portfolio
          on a loan by loan basis.  The aforementioned analysis revealed that
          the Loan Loss Reserve was over funded and an entry was made to reverse
          the
          over-funded balance against the provision for loan losses.
 
 RESULTS
          OF OPERATIONS – YEAR-TO-DATE
 
 The
          consolidated net income for the Company for the six months ended June 30,
          2007,
          was $3.4 million which reflects a decrease of $197 thousand in consolidated
          net
          income for the same period in 2006.  This decrease is chiefly
          attributable to the loss recognition of $273 thousand in the restated quarter
          ended March 31, 2007, for the other-than-temporary impairment on
          available-for-sale securities, net of allocated tax benefit.
 
 Interest
          income increased to $16.8 million for the six months ended June 30, 2007,
          indicating an increase of $2.1 million from the $14.7 million for the six
          months
          ended June 30, 2006.  The increase in interest income signifies an
          increase in the pricing of the loan products.
 
 Interest
          expense reflects an increase of $1.8 million to $6.8 million for the six
          months
          ended June 30, 2007, from $5.0 million for the same period in
          2006.  The increase in interest expense can be attributed to the
          continued competitive pricing of the deposit accounts to attract new customers
          and maintain existing customers.
 
 The
          decrease in the provision for loan losses of $49 thousand is attributed
          to the
          evaluation of the quality of the loan portfolio and the quarterly analysis
          of
          the Allowance for Loan Losses which determines the requirements for and
          the
          adequacy of the provision.
 
 Non-interest
          income for the six months ended June 30, 2007, was $3.1 million which is
          a
          decrease of $61 thousand from the income for the same period in
          2006.  The main component of the decrease in the non-routine income in
          2007 is attributable to the recognition of the loss of $448 thousand in
          the
          restated quarter ended March 31, 2007, for the other-than-temporary impairment
          of securities.   The service charges on deposit accounts, for the
          six months ended June 30, 2007, and June 30, 2006, totaled $2.6 million
          and $2.2
          million, respectively.
 
 Other
          expenses, consisting primarily of salaries, employee benefits and occupancy
          expense, for the six months ended June 30, 2007, reveal an increase of
          $712
          thousand or 10.11% from the same period in 2006.  Salaries and
          employee benefits of $5.1 million for the six months ended June 30, 2007,
          represent the largest component of other expenses and steadily increases
          with
          the development of the market area and the training of future bank management,
          in both areas of commercial banking and trust.
  ***Table
              of Contents***
  Income
          tax expense of $1.5 million for the six months ended June 30, 2007, reflects
          a
          decrease of $193 thousand from the same period in 2006.  The decrease
          is indicative of the reduced tax provision related to the decrease in the
          income
          for 2007, chiefly resulting from the $448 thousand loss in the
          other-than-temporary impairment of securities, discussed above.
 
 The
          net
          interest margin for the six months ended June 30, 2007, is 4.27%.  The
          return on equity for the six month period ended June 30, 2007 is
          13.59%.  For the six months ended June 30, 2007, the return on average
          assets is reflected at 1.48%.  These ratios, reflecting the financial
          status of the Company, are consistent with the ratios for prior reporting
          periods.
 
 RECENT
          ACCOUNTING PRONOUNCEMENTS
 
 **The
          following accounting standards, issued recently have been
          considered:**
 
 **Financial
          Accounting Standards Board Statement (FASB) No. 159, Fair Value Option
          for
          Financial Assets and Financial Liabilities; FASB No. 158, Employers’ Accounting
          for Defined Benefit Pension and Other Retirement Plans; FASB No. 157, Fair
          Value
          Measurements; FASB No. 48, Accounting for Uncertainty in Income Taxes;
          FASB No.
          156, Accounting for Servicing of Financial Assets; FASB No. 155, Accounting
          for
          Certain Hybrid Financial Instruments; and Staff Accounting Bulletin (SAB)
          No.
          108, Considering the Effects of Prior Year Misstatements when Quantifying
          Misstatements in Current Year Financial Statements.**
 
 **Of
          these standards, FASB No. 159, Fair Value Option for Financial Assets and
          Financial Liabilities, and FASB No. 157, Fair Value Measurements, were
          adopted
          but due to the adoption not being substantive with the intent and spirit
          of FASB
          No. 159, the identification of selected financial assets and financial
          liabilities has been reversed.**
 
 ITEM
                    NO. 3
                QUANTITIVE
                    AND QUALITATIVE DISCLOSURE ABOUT MARKET
                    RISK
 
 There
          have been no material changes in market risk exposures that affect the
          quantitative and qualitative disclosures presented as of December 31, 2006,
          in
          the Company’s Form 10-K and Annual Report.
  ITEM
                    NO. 4
                CONTROLS
                    AND PROCEDURES
 
 Within
          90
          days prior to the filing of this report, an evaluation under the direction
          and
          with the participation of our principal executive officer and principal
          financial officer was performed to determine the effectiveness of the design
          and
          operation of the disclosure controls and procedures.   The
          principal executive officer and the principal financial officer concluded
          that
          our disclosure controls and procedures are effective in timely alerting
          them to
          material information required to be included in our periodic SEC
          reports.  There have been no significant changes in the Corporation’s
          internal controls or in other factors subsequent to the date of the evaluation
          that could significantly affect these controls.
 
 
 PART
                    II--
                OTHER
                    INFORMATION
 
 
 ITEM
                    1.
                LEGAL
                    PROCEEDINGS
 
 **Out
          of the normal course of business, First Security Bank may be defendant
          in a
          lawsuit.  In regard to any legal proceedings, which occurred during
          the reporting period, management expects no material impact on the Company’s
          consolidated financial position or results of operation.**
 ***Table
                of Contents***
  ITEM
                    NO. 1A
                RISK
                    FACTORS
 
 There
          are
          no material changes to the Company’s risk factors from what was previously
          disclosed in the Annual Report on Form 10-K for the year ended December
          31,
          2006.
 
 ITEM
                    2.
                CHANGES
                    IN SECURITIES
 
 Not
          Applicable
 
 ITEM
                    3.
                DEFAULT
                    UPON SENIOR SECURITIES
 
 Not
          Applicable
 
 ITEM
                    4.
                SUBMISSION
                    OF MATTERS TO A VOTE OF SECURITY
                    HOLDERS
 
 The
          Corporation held its Annual Meeting of Shareholders on April 19, 2007,
          at 10:00
          a. m. at the Main Office building of the First Security Bank, 295 Highway
          6
          West, Batesville, Mississippi.  The total shares issued of 2,753,557
          were reduced by 8,987 shares held as treasury stock, by 78,625 held by
          irrevocable trusts in the First Security Bank Trust Department and by 194,762
          shares held by the First Security Bank Employee Stock Ownership Plan to
          determine the shares eligible to vote of 2,471,183.  At this meeting,
          there were 1,665,244 shares or 67% of the Corporation’s eligible shares of
          common stock represented either in person or by proxy.
 
 An
          election was held to elect three Class II directors to a three-year term
          expiring in 2010.  The votes for each nominee were:
 
 Ken
                    Murphree
                1,656,949Tony
                    Jones
                1,665,142Ben
                    Barrett Smith
                1,665,142
 
 ITEM
                    5.
                OTHER
                    INFORMATION
 
 Not
          Applicable
 
 ITEM
                    6.
                EXHIBITS
                    AND REPORTS ON FORM 8-K
 
 (a)
                Exhibits
 
 Exhibit
          No. 31.1 Certification of principal executive officer
          pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
 Exhibit
          No. 31.2 Certification of principal financial officer
          pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
 Exhibit
          No. 32.1 Certification of principal executive officer
          pursuant to 18 U. S. C. Section 1350, as adopted pursuant to Section 906
          of the
          Sarbanes-Oxley Act of 2002.
 
 Exhibit
          No. 32.2 Certification of principal financial officer
          pursuant to 18 U. S. C. Section 1350, as adopted pursuant to Section 906
          of the
          Sarbanes-Oxley Act of 2002.
 
 (b)
                The
                    Company did not file any reports on Form 8-K during the quarter
                    ended June
                    30, 2007.
 ***Table
                of Contents***
  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
          CAPITAL CORPORATION
 
 BY
                /s/
                    Frank West
                BY
                /s/
                    Connie Woods HawkinsFrank
                    West
                
                Connie
                    Woods HawkinsPresident
                    and Chief Executive Officer
                
                Executive
                    Vice-President, Cashierand
                    Chief Financial OfficerDATE:  August
                  8, 2007
                DATE:  August
                  8, 2007