`UNITED STATES
                                        SECURITIES AND EXCHANGE COMMISSION
                                              WASHINGTON, D.C. 20549

                                                     FORM 10-K

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                                    For the fiscal year ended December 31, 2004

                                                        or

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

                              For the transition period from _________ to __________

Commission file number: 000-50224

                                           SECURITY CAPITAL CORPORATION
                   ----------------------------------------------------------------------------
                              (Exact Name of Registrant as specified in its Charter)

                  MISSISSIPPI                                                   64-0681198
--------------------------------------------------------------  ---------------------------------------------
           (State or Other Jurisdiction of                            (I.R.S. Employer Identification Number)
         Incorporation or Organization)

 295 Highway 6 West/P. O. Box 690, Batesville, Mississippi                      38606
-------------------------------------------------------------    ---------------------------------------------
       (Address of principal executive offices)                                (Zip Code)

Registrant's Telephone Number:               (662) 563-9311
                               ------------------------------------------

                               Securities registered under Section 12(b) of the Act:

                                                                           Name of Each Exchange on
             Title of Each Class                                                Which Registered

                  None                                                                None
-------------------------------------------------------------     -----------------------------------------------

                            Securities registered pursuant to section 12(g) of the Act:

                                                                           Name of Each Exchange on
             Title of Each Class                                                Which Registered

         Common Stock, $5 par value                                                   None
------------------------------------------------------------      ------------------------------------------------`

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Indicate by check mark
whether the Registrant (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 periods that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.

`YES [X]   NO [  ]`

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained
herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark
whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the
Act).

`YES [ ]      NO [X]`

Based on the stockholders
of record on December 31, 2004, the aggregate market value of the voting stock
held by nonaffiliates of the Registrant was $69.6 million.

Indicate the number of
shares outstanding of each of the Registrants classes of common stock, as
of the latest practicable date.

`Class                                              Outstanding at December 31, 2004

Common stock ($5.00 par value)                                             2,485,417 Shares`

Portions of the following
documents are incorporated by reference into Parts III of the Form 10-K report:
Proxy Statement dated April 8, 2005.

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`CROSS REFERENCE INDEX

                                                                                                  Page
PART I

Item 1       Business                                                                                2
Item 2       Properties                                                                             13
Item 3       Legal Proceedings                                                                      14
Item 4       Submission of Matters to a Vote of Security Holders                                    14

PART II

Item 5       Market for the Registrant's Common Equity and Related Stockholder Matters and
             Issuer Purchases of Equity Securities                                                  15
Item 6       Selected Financial Data                                                                15
Item 7       Management's Discussion and Analysis of Financial Condition and Results of
             Operations                                                                             18
Item 7A      Quantitative and Qualitative Disclosures About Market Risk                             39
Item 8       Financial Statements and Supplementary Data
Item 9       Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A      Controls and Procedures
Item 9B      Other Information

PART III

Item 10      Directors and Executive Officers of the Registrant
Item 11      Executive Compensation
Item 12      Security Ownership of Management and Related Stockholder Matters
Item 13      Certain Relationships and Related Transactions
Item 14      Principal Accounting Fees and Services

Part IV

Item 15      Exhibits and Financial Statement Schedules

-----------------
* Information called for by Part III (Items 10 through 14) is incorporated by reference to the Registrant's Proxy
Statement dated April 8, 2005.`

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Security Capital
Corporation is a one-bank holding company and has two subsidiaries, First
Security Bank and Batesville Security Building Corporation.

As a bank holding company,
Security Capital Corporation engages in the business of banking through its sole
banking subsidiary and may engage in certain non-banking activities closely
related to banking and may own certain other business corporations that are not
banks, subject to applicable laws and regulations. Security Capital Corporation
is not currently engaging in non-bank activities, and does not own any business
corporations except for Batesville Security Building Corporation and has no
current plans to engage in non-bank activities or own any other business
corporations.

Security Capital
Corporation was incorporated on September 16, 1982 for the purpose of acquiring
First Security Bank and serving as a one-bank holding company.

First Security Bank was
originally chartered under the laws of the State of Mississippi on October 25,
1951.

Batesville Security
Building Corporation, the nonbank subsidiary, was chartered under the laws of
the State of Mississippi on June 23, 1971, for the purpose of acquiring real
estate; to hold, improve, develop, operate, manage, mortgage, sell, exchange and
lease and to generally deal and manage real estate and personal property.
Batesville Security Building Corporation is a wholly owned subsidiary of
Security Capital Corporation which has been inactive in the past years but in
2004 reactivated its operations by investing in new leasehold improvements.

Security Capital
Corporations home or principal office is located at 295 Highway 6 West,
Batesville, Mississippi, 38606. The telephone of the home or principal office is
(662) 563-9311. First Security Banks website is www.firstsecuritybk.com

Security Capital
Corporation, through First Security Bank, engages in a wide range of banking
activities, including accepting demand deposits, accepting savings and time
deposit accounts, making secured and unsecured loans to corporations,
individuals and others, issuing credit cards, issuing and processing ATM cards
and debit cards, issuing commercial and standby letters of credit, originating
mortgage loans, and providing personal and corporate trust services.

Security Capital
Corporations lending services include commercial, real estate,
installment, credit card loans, merchant accounts receivable loans, student
loans, and agricultural loans. Revenues from Security Capital Corporations
Lending activities constitute the largest component of Security Capital
Corporations operating revenues.

At December 31, 2004, the
loan portfolio totaled $234,403 constituting 67% of the earning assets of
$349,276. Security Capital Corporations loan personnel have the authority
to extend credit under guidelines established and approved by the Board of
Directors. Any aggregate credit which exceeds the authority of the loan officer
or a combination of several authority limits is forwarded to the Loan Committee
for approval. The Loan Committee is comprised of various Bank Directors,
including the Chairman.

---

Security Capital
Corporations primary lending areas are the counties of Desoto, Panola,
Quitman and Tunica in the State of Mississippi. Security Capital Corporation may
extend credit to borrowers out of the primary lending area but on a limited
basis in which the risk is low and/or a relationship may exist with the borrower
and an industry or a development in the primary lending area.

The following tables
provide demographic information for Desoto, Panola, Quitman and Tunica counties,
and for the State of Mississippi:

`POPULATION

                                 2000               1990               1980               1970
                                 ----               ----               ----               ----
DeSoto                          107,199             67,910             53,930             35,885

Panola                           34,274             29,996             28,164             26,829

Quitman                          10,117             10,490             12,636             15,888

Tunica                            9,277              8,164              9,652             11,854

Mississippi                   2,844,658          2,573,216          2,520,698          2,216,994

SOURCE: Center for Population Studies, University of Mississippi


                                                      PER CAPITA INCOME

                                 2002           2001           2000            1999           1998
                                 ----           ----           ----            ----           ----
DeSoto                          $27,261       $27,344         $26,074         $24,537        $23,970

Panola                           18,510        18,233          17,188          16,242         15,805

Quitman                          15,854        17,183          14,720          14,568         14,010

Tunica                           17,763        18,966          17,328          17,335         16,395

Mississippi                      22,550        21,967          21,007          20,053         19,545

SOURCE: United States Department of Commerce, Bureau of Economic Analysis


                                           MEDIAN AGE

                                 2000                       1990
                                 ----                       ----
DeSoto                           33.7                       31.5

Panola                           33.0                       30.1

Quitman                          31.8                       30.1

Tunica                           30.6                       25.3

SOURCE: Center for Population Studies, University of Mississippi`

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Panola County and Quitman
County are rural areas, in which agriculture and industry play a big part in the
economy. Desoto County and Tunica County have a different economic structure.
The growth and composition of Desoto County has been dictated, primarily, by the
outflow from Memphis, Tennessee, seeking residential living developments as well
as locations for retail businesses and other commercial developments outside the
Memphis city limits. Tunica Countys economy is dependent on the gaming
industry to provide employment and to provide resources for the operation of the
county. The numerous casinos in the Tunica area employ residents from the
surrounding counties and residents from the States of Tennessee and Arkansas.

Security Capital
Corporation has in the past and intends to continue to make most types of real
estate loans including but not limited to single and multi-family housing, farm
loans, residential and commercial construction loans and loans for commercial
real estate.

Major classifications of
loans were as follows:

`December 31,
                                                                 2004        2002
                                                                 ----        ----
                                                                  (In thousands)

     Commercial, financial and agricultural                     $28,077     $32,878
     Real estate - construction and development                  49,189      37,116
     Real estate - mortgage                                     124,911     103,348
     Installment loans to individuals                            29,898      28,529
     Other                                                        2,328       2,553
                                                               --------    --------
                                                                234,403     204,424
     Less allowance for loan losses                             (3,598)     (3,665)
                                                               --------    --------

                                                               $230,805    $200,759
                                                               ========    ========`

The success of the loan
portfolio is not dependent on a single borrower or group of borrowers. The large
loans of the loan portfolio are defined as those loans with a balance of
$337,000 and over. As of December 31, 2004, the loan portfolio totals $234.4
million of which the large lines total $65 million representing 68 borrowers.

Security Capital
Corporation provides a wide range of personal and corporate trust and
trust-related services which includes serving as executor of estates, as trustee
under testamentary and inter vivos trusts and various pension and other employee
benefit plans, as guardian of the estates of minors and incompetents, as escrow
agent under various agreements, as transfer agent and paying agent of registered
bond issues, and as custodian for assets invested. In addition, the Trust
Department of First Security Bank offers a variety of investment tools which
includes a money management and financial planning program that uses the skills
and abilities of a Certified Financial Planner and a Certified Retirement
Services Professional among other specialists who are within the employment of
First Security Bank and the Trust Department.

---

In recent years, Security
Capital Corporation has opened several new locations to expand the First
Security Banking area. In October of 1998, First Security Banking locations at
Como, Mississippi, and Crenshaw, Mississippi, were purchased from First
Tennessee Bank. In July of 1999, Planters Bank in Tunica was purchased from
First Tennessee Bank. In December of 1995, a loan production office opened in
Desoto County in the city of Olive Branch with one employee. In June of 1997, a
full service bank branch opened and continued First Security Banks
operation in the Olive Branch area with four employees. In October of 2001,
First Security Banks operation in Olive Branch moved to a newly
constructed building with features of four drive-thru lanes and a total square
footage of 7,000 to accommodate the projected growth in that area. The number of
employees at Olive Branch in 2002 grew to twelve. In January 2001, a loan
production office officially opened in Desoto County in the city of Hernando. On
July 1, 2002, the operation in Hernando moved from a loan production facility to
a newly constructed building, a sister to the Olive Branch building, providing
full banking services. In August of 2003, a branch was opened in the town of
Pope. In 2004, First Security Bank prepared to continue to expand in the Desoto
County area with the construction of a new branch in Southaven with an
anticipated 2005 opening. The Security Capital Corporation has offered ATM
services for numerous years and began in 1995 running its own ATMs.
Today, First Security Bank provides ATM services at twenty-two locations,
fifteen of which are not located on bank property. First Security Bank, also,
provides the customer with 24 hours a day, 7 days a week, access to their
account balances and activity through a telephone banking product called First
Line. Initiated in October of 2002, First Security Bank offered internet
banking, called First Teller, to accommodate those customers desiring through
technology to review their accounts activity and images of the activity,
if applicable, and pay their bills from anywhere in the world.

On December 31, 2004, First
Security Bank had 162 full-time equivalent employees.

Security Capital
Corporation and First Security Bank are subject to state and federal banking
laws and regulations which impose specific requirements or restrictions on and
provide for general regulatory oversight with respect to virtually all aspects
of operations. These laws and regulations are generally intended to protect
depositors, not shareholders. To the extent that the following summary describes
statutory or regulatory provisions, it is qualified in its entirety by reference
to the particular statutory and regulatory provisions. Any change in applicable
laws or regulations may have a material effect on the business and prospects of
Security Capital Corporation. Beginning with the enactment of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA)
and following with Federal Deposit Insurance Corporation Improvement Act of 1991
(FDICIA) and the Gramm-Leach-Bliley Act of 1999 (the Financial
Services Modernization Act), numerous additional regulatory requirements
have been placed on the banking industry in the past several years, and
additional changes have been proposed. The operations of Security Capital
Corporation and First Security Bank may be affected by legislative changes and
the policies of various regulatory authorities. Security Capital Corporation is
unable to predict the nature or the extent of the effect on its business and
earnings that fiscal or monetary policies, economic control, or new federal or
state legislation may have in the future.

Security Capital
Corporation is a bank holding company within the meaning of the federal Bank
Holding Company Act of 1956 (the BHCA).

The BHCA. Under the BHCA,
Security Capital Corporation is subject to periodic examination by the Federal
Reserve and is required to file periodic reports of its operations and such
additional information as the Federal Reserve may require. Security Capital
Corporations and First Security Bank activities are limited to
banking, managing or controlling banks, furnishing services to or performing
services for its subsidiaries, and engaging in other activities that the Federal
Reserve determines to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto.

Investments, Control, and
Activities. With certain limited exceptions, the BHCA requires every bank
holding company to obtain the prior approval of the Federal Reserve before (i)
acquiring substantially all the assets of any bank, (ii) acquiring direct or
indirect ownership or control of any voting shares of any bank if after such
acquisition it would own or control more than 5% of the voting shares of such
bank (unless it already owns or controls the majority of such shares), or (iii)
merging or consolidating with another bank holding company.

---

In addition, and subject to
certain exceptions, the BHCA and the Change in Bank Control Act, together with
regulations thereunder, require Federal Reserve approval (or, depending on the
circumstances, no notice of disapproval) prior to any person or company
acquiring control of a bank holding company, such as Security
Capital Corporation. Control is conclusively presumed to exist if an individual
or company acquires 25% or more of any class of voting securities of the bank
holding company. Control is rebuttably presumed to exist if a person acquires
10% or more but less than 25% of any class of voting securities and either
Security Capital Corporation has registered securities under Section 12 of the
Exchange Act or no other person owns a greater percentage of that class of
voting securities immediately after the transaction. The regulations provide a
procedure for challenge of the rebuttable control presumption.

Under the BHCA, a bank
holding company is generally prohibited from engaging in, or acquiring direct or
indirect control of more than 5% of the voting shares of any company engaged in
nonbanking activities, unless the Federal Reserve Board, by order or regulation,
has found those activities to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto. Some of the activities
that the Federal Reserve Board has determined by regulation to be proper
incidents to the business of a bank holding company include making or servicing
loans and certain types of leases, engaging in certain insurance and discount
brokerage activities, performing certain data processing services, acting in
certain circumstances as a fiduciary or investment or financial adviser, owning
savings associations, and making investments in certain corporations or projects
designed primarily to promote community welfare.

The Federal Reserve Board
has imposed certain capital requirements on bank holding companies under the
BHCA, including a minimum leverage ratio and a minimum ratio of
qualifying capital to risk-weighted assets. These requirements are
described below under Capital Regulations. Subject to its capital
requirements and certain other restrictions, Security Capital Corporation may
borrow money to make a capital contribution to First Security Bank, and such
loans may be repaid from dividends paid from First Security Bank to Security
Capital Corporation (although the ability of First Security Bank to pay
dividends is subject to regulatory restrictions as described below in
Dividends under Item 5). Security Capital Corporation is also able
to raise capital for contribution to First Security Bank by issuing securities
without having to receive regulatory approval, subject to compliance with
federal and state securities laws.

Source of Strength;
Cross-Guarantee. In accordance with Federal Reserve Board policy, Security
Capital Corporation is expected to act as a source of financial strength to
First Security Bank and to commit resources to support First Security Bank in
circumstances in which Security Capital Corporation might not otherwise do so.
Under the BHCA, the Federal Reserve Board may require a bank holding company to
terminate any activity or relinquish control of a nonbank subsidiary (other than
a nonbank subsidiary of a bank) upon the Federal Reserve Boards
determination that such activity or control constitutes a serious risk to the
financial soundness or stability of any subsidiary depository institution of the
bank holding company. Further, federal bank regulatory authorities have
additional discretion to require a bank holding company to divest itself of any
bank or nonbank subsidiary if the agency determines that divestiture may aid the
depository institutions financial condition.

State and FDIC Regulation.
First Security Bank is subject to regulation and periodic examinations by the
FDIC and the State of Mississippi Department of Banking and Consumer Finance.
These regulatory authorities examine such areas as reserves, loan and investment
quality, management policies, procedures and practices and other aspects of
operations. These examinations are designed for the protection of the
Banks depositors, rather than their stockholders. In addition to these
regular examinations, the Company and the Banks must furnish periodic reports to
their respective regulatory authorities containing a full and accurate statement
of their affairs.

FDICIA.   All insured institutions must undergo regular on-site examinations
by their appropriate
banking agency.  The cost of examinations of insured depository institutions and any affiliates may be assessed
by the appropriate agency against each institution or affiliate as it deems necessary or appropriate.  Insured
institutions are required to submit annual reports to the FDIC and the appropriate agency (and state supervisor
when applicable).  FDICIA also directs the FDIC to develop with other appropriate agencies a method for insured
depository institutions to provide supplemental disclosure of the estimated fair market value of assets and
liabilities, to the extent feasible and practicable, in any balance sheet, financial statement, report of
condition, or any other report of any insured depository institution.  FDICIA also requires the federal banking
regulatory agencies to prescribe, by regulation, standards for all insured depository institutions and depository
institution holding companies relating, among other things, to: (i) internal controls, information systems, and
audit systems; (ii) loan documentation; (iii) credit underwriting; (iv) interest rate risk exposure; and (v)
asset quality.

---

FDICIA contains a
prompt corrective action section intended to resolve problem
institutions at the least possible long-term cost to the deposit insurance
funds. Pursuant to this section, the federal banking agencies are required to
prescribe a leverage limit and a risk-based capital requirement indicating
levels at which institutions will be deemed to be well capitalized,
adequately capitalized, undercapitalized,
significantly undercapitalized and critically
undercapitalized. In the case of a depository institution that is
critically undercapitalized (a term defined to include institutions
which still have positive net worth), the federal banking regulators are
generally required to appoint a conservator or receiver.

Deposit Insurance. The FDIC
establishes rates for the payment of premiums by federally insured banks and
thrifts for deposit insurance. A separate Bank Insurance Fund (BIF)
and Savings Association Insurance Fund (SAIF) are maintained for
commercial banks and thrifts, respectively, with insurance premiums from the
industry used to offset losses from insurance payouts when banks and thrifts
fail. Since 1993, insured depository institutions like First Security Bank have
paid for deposit insurance under a risk-based premium system.

Transactions With
Affiliates and Insiders. First Security Bank is subject to Section 23A of the
Federal Reserve Act, which places limits on the amount of loans to, and certain
other transactions with, affiliates, as well as on the amount of advances to
third parties collateralized by the securities or obligations of affiliates. The
aggregate of all covered transactions is limited in amount, as to any one
affiliate, to 10% of the Banks capital and surplus and, as to all
affiliates combined, to 20% of the Banks capital and surplus. Furthermore,
within the foregoing limitations as to amount, each covered transaction must
meet specified collateral requirements.

First Security Bank is also
subject to Section 23B of the Federal Reserve Act, which prohibits an
institution from engaging in certain transactions with affiliates unless the
transactions are on terms substantially the same, or at least as favorable to
such institution, as those prevailing at the time for comparable transactions
with nonaffiliated companies. First Security Bank is subject to certain
restrictions on extensions of credit to executive officers, directors, certain
principal shareholders, and their related interests. Such extensions of credit
(i) must be made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
third parties and (ii) must not involve more than the normal risk of repayment
or present other unfavorable features.

Community Reinvestment Act.
The Community Reinvestment Act requires that, in connection with examinations of
financial institutions within their respective jurisdictions, the Federal
Reserve, the FDIC, the OCC, or the Office of Thrift Supervision shall evaluate
the record of the financial institutions in meeting the credit needs of their
local communities, including low and moderate income neighborhoods, consistent
with the safe and sound operation of those institutions. These factors are also
considered in evaluating mergers, acquisitions, and applications to open a
branch or facility.

The Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley Act"), which became law
on July 30, 2002, added new
legal requirements for all publicly-held companies affecting corporate governance, accounting and corporate
reporting.  The Securities and Exchange Commission has been delegated the task of enacting rules to implement
various provisions, and the Company is required to comply with such rules to the extent they are applicable to
the Company.  In addition, each of the national stock exchanges has developed new corporate governance rules,
including rules strengthening director independence requirements for boards, the adoption of corporate governance
codes, and charters for the nominating and audit committees.

Other Regulations. Interest
and certain other charges collected or contracted for by First Security Bank are
subject to state usury laws and certain federal laws concerning interest rates.
First Security Banks loan operations are subject to certain federal laws
applicable to credit transactions, such as the federal Truth-In-Lending Act,
governing disclosures of credit terms to consumer borrowers; the Home Mortgage
Disclosure Act of 1975, requiring financial institutions to provide information
to enable the public and public officials to determine whether a financial
institution is fulfilling its obligation to help meet the housing needs
community it serves; the Equal Credit Opportunity Act, prohibiting
discrimination on the basis of creed or other prohibited factors in extending
credit; the Fair Credit Reporting Act of 1978, governing the use and provision
of information to credit reporting agencies; the Fair Debt Collection Act,
concerning the manner in which consumer debts may be collected by collection
agencies; and the rules and regulations of the various federal agencies charged
with the responsibility of implementing such federal laws. The deposit
operations of First Security Bank also are subject to the Right to Financial
Privacy Act, which imposes a duty to maintain confidentiality of consumer
financial records and prescribes procedures for complying with administrative
subpoenas of financial records, and the Electronic Funds Transfer Act and
Regulation E issued by the Federal Reserve Board to implement that Act, which
governs automatic deposits to and withdrawals from deposit accounts and
customers rights and liabilities arising from the use of automated teller
machines and other electronic banking services.

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Enforcement Powers. FIRREA
expanded and increased civil and criminal penalties available for use by the
federal regulatory agencies against depository institutions and certain
institution-affiliated parties (primarily including management,
employees, and agents of a financial institution, independent contractors such
as attorneys and accountants, and others who participate in the conduct of the
financial institutions affairs). These practices can include the failure
of an institution to timely file required reports; the filing of false or
misleading information; or the submission of inaccurate reports. Civil penalties
may be as high as $1,000,000 a day for such violations. Criminal penalties for
some financial institution crimes have been increased to twenty years. In
addition, regulators are provided with greater flexibility to commence
enforcement actions against institutions and institution-affiliated parties.
Possible enforcement actions include the termination of deposit insurance.
Furthermore, FIRREA expanded the appropriate banking agencies power to
issue cease and desist orders that may, among other things, require affirmative
action to correct any harm resulting from a violation or practice, including
restitution, reimbursement, indemnifications, or guarantees against loss. A
financial institution may also be ordered to restrict its growth, dispose of
certain assets, rescind agreements or contracts, or take other actions as
determined by the ordering agency to be appropriate.

Effect of Governmental
Monetary Policies. The earnings of First Security Bank are affected by domestic
economic conditions and the monetary and fiscal policies of the United States
government and its agencies. The Federal Reserve Boards monetary policies
have had, and are likely to continue to have, an important impact on the
operating results of commercial banks through its power to implement national
monetary policy in order, among other things, to curb inflation or combat a
recession. The monetary policies of the Federal Reserve Board have major effects
upon the levels of bank loans, investments, and deposits through its open market
operations in United States government securities and through its regulation of
the discount rate on borrowings of member banks and the reserve requirements
against member bank deposits. It is not possible to predict the nature or impact
of future changes in monetary and fiscal policies.

Financial Services
Modernization Act. On November 12, 1999, President Clinton signed into law the
Gramm-Leach-Bliley Act of 1999 (the Financial Services Modernization
Act). The Financial Services Modernization Act repeals the two affiliation
provisions of the Glass-Steagall Act: Section 20, which restricted the
affiliation of Federal Reserve Member Banks with firms engaged
principally in specified securities activities; and Section 32, which
restricts officer, director, or employee interlocks between a member bank and
any company or person primarily engaged in specified securities
activities. In addition, the Financial Services Modernization Act also contains
provisions that expressly preempt any state law restricting the establishment of
financial affiliations, primarily related to insurance. The general effect of
the law is to establish a comprehensive framework to permit affiliations among
commercial banks, insurance companies, securities firms, and other financial
service providers by revising and expanding the BHCA framework to permit a
holding company system to engage in a full range of financial activities through
a new entity known as a Financial Holding Company. Financial
activities is broadly defined to include not only banking, insurance, and
securities activities, but also merchant banking and additional activities that
the Federal Reserve, in consultation with the Secretary of the Treasury,
determines to be financial in nature, incidental to such financial activities,
or complementary activities that do not pose a substantial risk to the safety
and soundness of depository institutions or the financial system generally.

Generally, the Financial Services Modernization Act:

`o        Repeals historical restrictions on, and eliminates many federal and state law barriers to,
                  affiliations among banks, securities firms, insurance companies, and other financial service
                  providers;

         o        Provides a uniform framework for the functional regulation of the activities of banks, savings
                  institutions, and their holding companies;

         o        Broadens the activities that may be conducted by national banks, banking subsidiaries of bank
                  holding companies, and their financial subsidiaries;

         o        Provides an enhanced framework for protecting the privacy of consumer information;`

---

`o        Adopts a number of provisions related to the capitalization, membership, corporate governance,
                  and other measures designed to modernize the Federal Home Loan Bank system;

         o        Modifies the laws governing the implementation of the Community Reinvestment Act ("CRA"); and

         o        Addresses a variety of other legal and regulatory issues affecting both day-to-day operations
                  and long-term activities of financial institutions.`

In order for a bank holding
company to take advantage of the ability to affiliate with other financial
services providers, that company must become a Financial Holding
Company as permitted under an amendment to the BHCA. To become a Financial
Holding Company, Security Capital Corporation would file a declaration with the
Federal Reserve, electing to engage in activities permissible for Financial
Holding Companies and certifying that it is eligible to do so because all of its
insured depository institution subsidiaries are well-capitalized and
well-managed. In addition, the Federal Reserve must also determine that each
insured depository institution subsidiary of Security Capital Corporation has at
least a satisfactory CRA rating.

The Financial Services
Modernization Act also includes a new section of the Federal Deposit Insurance
Act governing subsidiaries of state banks that engage in activities as
principal that would only be permissible for a national bank to conduct in
a financial subsidiary. It expressly preserves the ability of a state bank to
retain all existing subsidiaries. In order to form a financial subsidiary, a
state bank must be well-capitalized, and the state bank would be subject to the
same capital deduction, risk management and affiliate transaction rules as
applicable to national banks.

Security Capital
Corporation and First Security Bank do not believe that the Financial Services
Modernization Act will have a material adverse effect on operations in the
near-term. However, to the extent that it permits banks, securities firms, and
insurance companies to affiliate, the financial services industry may experience
further consolidation. The Financial Services Modernization Act is intended to
grant to community banks certain powers as a matter of right that larger
institutions have accumulated on an ad hoc basis. Nevertheless, this act may
have the result of increasing the amount of competition that Security Capital
Corporation and First Security Bank face from larger institutions and other
types of companies offering financial products, many of which may have
substantially more financial resources than Security Capital Corporation and
First Security Bank.

Capital.   Security Capital Corporation and First Security Bank are
required to comply with the capital
adequacy standards established by the Federal Reserve Board and the FDIC.  There are two basic measures of
capital adequacy for bank holding companies and their banking subsidiaries: a risk-based measure and a leverage
measure.

The risk-based capital
standards are designed to make regulatory capital requirements more sensitive to
differences in risk profile among depository institutions and bank holding
companies, to account for off-balance sheet exposure, and to minimize
disincentives for holding liquid assets. Assets and off-balance sheet items are
assigned to broad risk categories, each with appropriate weights. The resulting
capital ratios represent capital as a percentage of total risk-weighted assets
and off-balance sheet items.

The minimum guideline for
the total capital to risk-weighted assets, including certain off-balance sheet
items such as standby letters of credit (total capital ratio) is 8.0
percent. At least half of total capital must be composed of common equity,
undivided profits, minority interests in the equity accounts of consolidated
subsidiaries, noncumulative perpetual preferred stock, and a limited amount of
cumulative perpetual preferred stock, less goodwill and certain other intangible
assets (Tier 1 capital). The remainder may consist of subordinated
debt, other preferred stock, a limited amount of loan loss reserves, and
unrealized gains on equity securities subject to limitations (Tier 2
capital).

---

The following table
represents the capital ratios for Security Capital Corporation and First
Security Bank as of December 31, 2004:

`Corporation             Bank
Risk-Based Capital Ratio                       Ratio                 Ratio           Requirements
------------------------                       -----                 -----           ------------
Total Capital                                  15.80                 15.20                8
Tier 1 Capital                                 14.60                 13.90                4
Leverage Capital                               10.40                  9.90                3`

Deposit Insurance
Assessments. The deposits of First Security Bank are insured by the FDIC up to
the limits set forth under applicable law. A majority of the deposits of First
Security Bank are subject to the deposit insurance assessments of the Bank
Insurance Fund (BIF) of the FDIC. However, a portion of First
Security Banks deposits, relating to a savings association acquisition,
are subject to assessments imposed by the Savings Association Insurance Fund
(SAIF) of the FDIC. The FDIC equalized the assessment rates for
BIF-insured and SAIF-insured deposits effective January 1, 1997. The assessments
imposed on all FDIC deposits for deposit insurance have an effective rate
ranging from 0 to 27 basis points per $100 of insured deposits, depending on the
institutions capital position and other supervisory factors. Legislation
was enacted in 1996 requiring both SAIF-insured and BIF-insured deposits to pay
a pro rata portion of the interest due on the obligations issued by the
Financing Corporation (FICO). Based on the assigned FICO debt
service rates, the assessments paid by the Bank during 2004 ranged from 1.54
basis points to 1.46 basis points, per $100 of deposits. The assessments for the
first quarter of 2005 will be paid based on an assigned FICO debt service rate
of 1.44 basis points

The banking business is a
highly competitive business. Security Capital Corporations market area
consists principally of Panola, Quitman, Desoto and Tunica Counties in
Mississippi. Security Capital Corporation competes with other financial
institutions, as well as insurance companies and various other entities, for
deposits and in providing financial services in these counties and the
surrounding counties. Security Capital Corporation, as provided by the FDIC
Market Share Report of June 30, 2004 (the latest Market Share Report), held
56.45% of the deposit market in Panola County. In Quitman County - an area with
no growth and poor economy in the best of years - this same report reflects
Security Capital Corporation holding 20.53 % of the deposit market. In Desoto
County, an area filled with large regional banks and national banks, Security
Capital Corporation occupies a growing share of 5.83% of the deposit market as
of June 30, 2004. Management measures the success of the locations in this area,
not only by the growth of the deposits, but by its ability to continue to be
competitive and to grow in the loan production area. In Tunica County, Security
Capital Corporation experienced growth as indicated by its 41.77% share of the
deposit base.

Because of the Lack of an
Established Trading Market and Restrictions on Transfer, Shareholders May Not be
Able to Quickly and Easily Sell Their Common Stock.

There has been no
established or liquid market for the Common Stock. Because of the substantial
restrictions on transfer of the Common Stock, Security Capital Corporation does
not anticipate that a reliable or liquid secondary trading market for the Common
Stock will exist or develop in the foreseeable future.

---

Changes in Local Economic
Conditions Could Reduce Our Income and Growth, and Could Lead to Higher Levels
of Problem Loans and Charge-Offs.

Security Capital
Corporation makes loans, and most of its assets are located in Panola, Quitman,
Desoto, and Tunica Counties in Mississippi. Adverse changes in economic
conditions in these areas could hurt Security Capital Corporations ability
to collect loans, could reduce the demand for loans, and could negatively impact
performance and financial condition.

Security Capital Corporation's Profitability Depends on Economic Policies
and Factors Beyond Our Control.

Security Capital
Corporations earnings depend to a great extent on rate
differentials, which are the differences between interest income that
Security Capital Corporation earns on loans and investments and the interest
expense paid on deposits and other borrowings. These rates are highly sensitive
to many factors which are beyond Security Capital Corporations control,
including general economic conditions and the policies of various government and
regulatory authorities. Changes in interest rate policy by the Board of
Governors of the Federal Reserve System affect Security Capital
Corporations interest income, interest expense and investment portfolio.
Also, governmental policies such as the creation of a tax deduction for
individual retirement accounts can increase savings and affect the cost of
funds. A rapid increase or decrease in interest rates could have an adverse
effect on the net interest margin and results of operations of Security Capital
Corporation. The nature, timing and effect of any future changes in federal
monetary and fiscal policies on Security Capital Corporation and its results of
operations are not predictable.

There is No Assurance That
Security Capital Corporation Will be Able to Successfully Compete with Others
for Business.

The banking business is
highly competitive, and the profitability of Security Capital Corporation
depends principally upon its ability to compete in the market areas where its
banking operations are located. Security Capital Corporation competes with other
commercial banks, savings banks, savings and loan associations, credit unions,
mortgage companies, finance companies, mutual funds, insurance companies,
brokerage and investment banking firms, asset-based non-bank lenders and certain
other non-financial entities, including retail stores which may maintain their
own credit programs and certain governmental organizations which may offer more
favorable financing than Security Capital Corporation. Many of these competitors
have greater financial and other resources than Security Capital Corporation,
and certain larger competitors are recent entrants into Security Capital
Corporations markets.

The Company maintains an
internet website at www.firstsecuritybk.com. The Company, effective in 2004,
provided on its website the quarterly reports on Form 10-Q as filed with the
Securities and Exchange Commission and will in 2005 provide these reports as
well as the annual reports on Form 10-K, current reports on Form 8-K, and
amendments to those reports as filed with the Securities and Exchange Commission
These reports will be available on the Companys website as soon as
reasonably practical after the reports are filed with the Commission.
Information on the Companys website is not incorporated into this Form
10-K or the Companys other securities filings and is not a part of them.
Electronic or paper copies of the reports will be provided, free of charge, upon
request by mail, through our website or in person.

The statistical disclosures
for the Company are contained in Tables 1 through 16.

---

`Table 1 - Five Year Financial Summary


Table 2 - Average Balances, Interest Earned and Interest Yields


Table 3 - Net Interest Earning Assets


Table 3A - Volume/Rate Analysis


Table 4 - Non-Interest Income and Expense


Table 5 - Loans by Type


Table 6 - Loan Liquidity


Table 7 - Allowance for Loan Losses


Table 8 - Nonperforming Assets


Table 8A - Allocation of the Allowance for Loan Losses


Table 9 - Securities


Table 10 - Securities Maturity and Repricing Schedule


Table 11 - Securities Weighted Maturity and Tax Equivalent Yield by Classification


Table 12 - Deposit Information


Table 13 - Maturity Ranges of Time Deposits with Balances More Than $100,000


Table 14 - Funding Uses and Sources


Table 15 - Liquidity; Interest Rate Sensitivity


Table 15A - Changes in Net Interest Income Over One Year Horizon


Table 16 - Capital Ratios`

---

Security Capital
Corporation through First Security Bank, currently operates from its main office
in central Batesville and from 11 additional branches in Panola, Quitman,
Desoto, and Tunica Counties - all located in Mississippi. Information about
these branches is set forth in the table below:

`Name of Office                        Location/Telephone Number                   Banking Services Offered
--------------                        -------------------------                   ------------------------

Main Office                           295 Highway 6 West;                         Loans, Deposits, Cash,
                                      Batesville, Mississippi 38606;              Safe Deposit Boxes, ATM,
                                      662-563-9311                                Trust, Drive-thru.

Express Branch                        130 Highway 51 North                        Drive-thru, Cash.
                                      Batesville, Mississippi 38606;
                                      662-563-9311

Marks Branch                          Highway 3 South                             Loans, Deposits, Cash,
                                      Marks, Mississippi 38646;                   Safe Deposit Boxes,
                                      662-326-8053                                Drive-thru.

Power Drive Branch                    230 Power Drive                             Loans, Deposits, ATM
                                      Batesville, Mississippi 38606;              Safe Deposit Boxes,
                                      662-563-9311                                Cash, Drive-thru

Sardis Branch                         201 South Main                              Loans, Deposits, Cash
                                      Sardis, Mississippi 38666;                  Safe Deposit Boxes,
                                      662-487-1661                                Drive-thru.

Olive Branch Branch                   6659 Highway 305                            Loans, Deposits, Cash,
                                      Olive Branch, Mississippi 38654;            Safe Deposit Boxes, ATM,
                                      662-895-1994                                Drive-thru.

Como Branch                           227 Main Street                             Loans, Deposits, Cash
                                      Como, Mississippi 38619Safe Deposit Boxes,
                                      662-526-5191                                Drive-thru.

Crenshaw Branch                       729 Broad Street                            Loans, Deposits, Cash,
                                      Crenshaw, Mississippi                       Safe Deposit Boxes,
                                      662-382-5215                                Drive-thru.

Tunica Branch                         1262 Edwards Street                         Loans, Deposits, Drive-
                                      Tunica, Mississippi                         thru, Safe Deposit Boxes,
                                      662-363-2311                                ATM. Cash.

Robinsonville Branch                  11490 Old Highway 61                        Loans, Deposits, Drive-
                                      Robinsonville, Mississippi                  thru, Cash, ATM.
                                      662-363-5015`

---

`Name of Office                        Location/Telephone Number                   Banking Services Offered
--------------                        -------------------------                   ------------------------

Hernando Branch                       985 Commerce Street                         Loans, Deposits, Cash,
                                      Hernando, Mississippi                       Safe Deposit Boxes,
                                      662-449-4115                                ATM, Drive-thru.

Pope Branch                           7024 Highway 51                             Deposits, Cash, ATM,
                                      Pope, Mississippi                           Drive-thru.
                                      662-578-5650

Trust and Financial Services          220 Power Drive                             Investment Planning &
Branch                                Batesville, Mississippi                     Management, Personal Trusts,
                                      662-563-9311                                Corporate Trusts, Pension &
                                                                                  Profit-Sharing Plans, IRAs,
                                                                                  Paying Agent Accounts.`

First Security Bank owns
its main office and all of its branch offices, except the Express Branch. The
Express Branch is leased for an annual rent of $9,600 under a ground lease
agreement that expires in 2007, with an option to renew. The main office
facility, originally was occupied in 1973, is used solely by Security Capital
Corporation and First Security Bank. This facility contains approximately 21,300
square feet and houses the executive offices and the operations department as
well as providing the customer area for cash, deposit, safe deposit and loan
transactions. The other branch buildings range in size from approximately 600
square feet for the Express Branch to 7,000 square feet for the Hernando and
Olive Branch locations.

First Security Bank is the
defendant in a case styled Amy French, individually, and Austin Lenard, a minor,
by and through His Next Friend and Mother, Amy French vs. First Security Bank
and Joshua Hawkins, Cause No. 2002-327-BB, filed on December 17, 2002 in the
Circuit Court of the Second Judicial District of Panola County, Mississippi. The
case involves an accident that occurred when a First Security Bank employee
traveling in his personal vehicle to service an ATM was involved in an
automobile accident. The pregnant occupant of the other vehicle gave birth later
that day. The claims in the lawsuit are that the mother and child are
experiencing permanent and continuing injuries, and the plaintiffs ask for
compensatory damages in the amount determined to be fair by the jury. Analysis
by legal counsel anticipates possible awards to the claimants to be within the
insurance coverage with no potential loss to the Bank and closure of the case is
dependent on forthcoming medical documentation on status of claimants.

From time to time First
Security Bank is a defendant in various other lawsuits arising out of the normal
course of business. In the opinion of management, the ultimate resolution of
this category of claims should not have a material adverse effect on Security
Capital Corporations consolidated financial position or results of
operations.

No matters were submitted
to a shareholder vote during the fourth quarter of 2004.

---

There is no public trading
market for the Common Stock of Security Capital Corporation. The articles and
bylaws of Security Capital Corporation give Security Capital Corporation a right
of first refusal to acquire shares when a shareholder wishes to sell stock.

Security Capital
Corporation paid an annual cash dividend of $1.00 per share in 2004 and $.90 per
share (split adjusted) in 2003. The primary source of funds for dividends paid
by Security Capital Corporation to its shareholders is the dividend income
received from First Security Bank. There are certain restrictions on the payment
of such dividends imposed by federal and state banking laws, regulations and
authorities. Under Mississippi law, the payment of dividends by First Security
Bank must be approved by the Mississippi Department of Banking and Consumer
Finance. The FDIC also has the authority to regulate the payment of dividends
and to prohibit a regulated depository institution from engaging in what in such
agencys opinion constitutes an unsafe or unsound practice for conducting
business. Depending upon the financial condition of the depository institution,
payment of dividends could be deemed to constitute such an unsafe or unsound
practice. In addition, a depository institution may not pay a dividend or
otherwise make a capital distribution if the payment thereof would cause such
institution to fail to satisfy its capital requirements.

During 2004, Security Capital Corporation, under a limited repurchase plan,
purchased 255 shares from
two stockholders at a price established by an annual stock appraisal and diluted by a subsequent stock dividend.

At December 31, 2004, there
were 670 stockholders of record of the Companys common stock.

---

The following table sets
forth certain financial information for Security Capital Corporation on a
consolidated historical basis. Such information should be read in conjunction
with, and is qualified in its entirety by, the consolidated financial statements
and notes appearing elsewhere in this report.

`Security Capital Corporation
                                     Table 1 - Five Year Financial Summary


                                        12/31/04     12/31/03      12/31/02      12/31/01       12/31/00
                                          (in thousands except per share data and Other Financial Data)

    Income Statement Data:
    Interest Income                         19,092        17,009       16,847         19,834         20,487
    Interest Expense                         4,139         3,955        4,760          7,744          8,966
    Net Interest Income                     14,953        13,054       12,087         12,090         11,521
    Provision for Loan Losses                  637           546          672            701            326
    Net Interest Income After Provision     14,316        12,508       11,415         11,389         11,195
    Noninterest Income                       5,657         5,666        5,155          4,591          2,885
    Noninterest Expenses                    11,410        10,618       10,092          9,555          8,779
    Income Before Income Taxes               8,563         7,556        6,478          6,425          5,301
    Income Tax Expense                       2,431         2,039        1,666          1,814          1,079
    NET INCOME                               6,132         5,517        4,812          4,611          4,222

    Per Share Data:
    Net Income*                               2.46          2.23         1.94           1.86           1.70
    Cash Dividends*                           1.00          0.90         0.82           0.73           0.66
    Book Value*                              17.66         16.47        15.27          13.89          12.45

    Other Ratios:
    Return on Average Assets                  1.65          1.66         1.60           1.62           1.52
    Return on Equity                         14.22         13.73        13.45          13.78          14.67
    Loans to Deposits                        70.29         70.87        70.60          72.33          77.84
    Loans to Total Assets                    60.06         60.08        59.42          61.08          63.26
    Equity Capital to Total Assets           11.24         12.01        12.00          12.36          10.87
    Average Equity to Average Assets         11.61         12.12        11.94          11.73          10.35
    Dividend Payout Ratio                    40.53         40.60        42.06          39.51          38.83

    Other Financial Data:
    Cash Dividends Declared              2,484,937     2,243,187    2,022,867      1,819,753      1,632,254
    Weighted Average
    Outstanding Common Shares            2,484,306     2,479,440    2,478,701      2,478,930      2,483,141

    * The per share information is based upon the retroactive effect of the stock dividends for the period.

    The per share data being reflected was derived using the weighted average number of outstanding shares at
    December 31, 2004 as the denominator. (The weighted average number of outstanding shares at December 31,
    2004 was 2,484,306.)  For example, the cash dividends per share was determined by dividing the amount of
    dividends by 2,484,306.

    Balance Sheet Data:
    Total Assets                           390,274       340,253      315,596        278,512        284,579
    Earning Assets                         349,276       304,056      276,677        244,345        250,369
    Investment Securities AFS               96,669        76,320       74,879         62,056         68,086
    Investment Securites HTM                 2,050         2,053            0              0              0
    Other Securities                         1,259           991          738            717            682
    Loans - Net                            230,805       200,759      184,060        167,079        177,115
    Allowance for Loan Losses                3,598         3,665        3,455          3,039          2,920
    Total Deposits                         333,458       288,442      265,597        235,192        231,302
    Savings Deposits                        28,416        25,869       19,747         17,552         16,714
    Time Deposits                          116,064       110,914      121,093        112,032        105,051
    Long Term Borrowings                     8,634         4,738        5,113          3,678          2,423
    Shareholders' Equity                    43,870        40,848       37,857         34,429         30,920`

---

`Average Balances:
    Total Assets                           371,424       331,612      299,830        285,249        278,081
    Earning Assets                         333,561       296,651      268,860        257,788        251,152
    Securities                              97,514        87,954       69,521         67,788         75,395
    Total Loans                            221,309       197,814      179,295        178,263        167,795
    Allowance for Loan Losses                3,850         3,667        3,232          3,006          2,807
    Savings Deposits                        26,663        23,006       18,340         16,277         16,764
    Time Deposits                          114,125       114,998      110,189        114,704        103,388
    Long-Term Borrowings                     7,695         3,197        4,852          3,539          2,460
    Shareholder's Equity                    43,110        40,183       35,790         33,470         28,775

    Other Data:
    Number of Employees                        162           157          146            140            130`

---

Release 33-8098 requires
the company to disclose any accounting estimates based on highly uncertain data
and any material impact from adopting an accounting statement or policy.

The primary area in which
there is uncertainty is the potential losses in the loan portfolio. In this
area, an estimate is derived from an analysis of the loan portfolio and the
Allowance for Loan Losses of the loans and the loan types that pose a risk of
being a future loss. To prepare for the potential loss, an increase will be made
to the loan loss reserve, if needed, for the inclusion of the balances or a
percentage of the balances of the identified risks in the loan portfolio. With
the need to increase the Allowance for Loan Losses, an increase will occur in
bad debt expense or the Provision for Loan Losses expense which ultimately
lowers the net income which is reflected on the Income Statement. In addition,
the building up of the Allowance for Loan Losses results in a decrease in the
total assets reflected on the balance sheet by the decrease in the net loan
portfolio. The amount expensed - which is a non-cash transaction - for the
accounting period will be an adjustment on the Statement of Cash Flows. In 2004,
the allocation to Allowance for Loan Losses increased expenses and lowered net
income and net assets by $637 thousand. For future periods, the affect on the
income statement and the balance sheet will be dependent on the amount of loan
charge offs and the strength of the loan portfolio for the accounting period. If
the charge offs decrease and the analysis of the loan portfolio and the
Allowance for Loan Losses determine no additional provisions are required, the
cease or decrease of the accrual estimate will boost income and net assets. See
Allowance and Provision for Loan Losses for more details.

Managements
Discussion and Analysis of Financial Condition and Results of Operations
analyzes the major elements of Security Capital Corporations balance
sheets and statements of income. This section should be read in conjunction with
Security Capital Corporations Consolidated Financial Statements and
accompanying Notes and other detailed information appearing elsewhere in this
report.

This discussion includes
various forward-looking statements with respect to credit quality (including
delinquency trends and the allowance for loan losses), corporate objectives and
other financial and business matters. When used in this discussion the words
anticipate, project, expect,
believe, and similar expressions are intended to identify
forward-looking statements. Security Capital Corporation cautions that these
forward-looking statements are subject to numerous assumptions, risks and
uncertainties, all of which may change over time. Actual results could differ
materially from forward-looking statements.

In addition to factors
disclosed by Security Capital Corporation elsewhere in this report, the
following factors, among others, could cause actual results to differ materially
from such forward-looking statements: exposure to local economic conditions,
interest rate risk, credit quality, risks inherent in consumer and commercial
lending, competition, and the extent and timing of legislative and regulatory
actions and reforms.

---

Security Capital
Corporation earned $6,132,173 or $2.46 per share for 2004, $5,517,464 or $2.23
per share for 2003, and $4,812,292 or $1.94 per share for 2002 representing an
increase of $1,319,881 or $.52 per share for the period from year 2002 through
year 2004. These changes are due primarily to an increase in service charges on
deposits and a decline in interest rates on deposits, offset by increases in
salaries and employee benefits.

Net interest income is the
most significant component of Security Capital Corporations earnings. Net
interest income is the difference between interest and fees realized on earning
assets, primarily loans and securities, and interest paid on deposits and other
borrowed funds. The net interest income is determined by several factors,
including the volume of earning assets and liabilities, the mix of earning
assets and liabilities and interest rates. Although there are a certain number
of these factors which can be controlled by management policies and actions,
there are certain other factors, such as the general level of credit demand, the
Federal Reserve Board monetary policy, and changes in tax law that are beyond
the control of management.

The increase in net
interest income in 2004 as compared to 2003 is due primarily to the increase in
loans.

The following table sets
forth the major components of interest earning assets and interest-bearing
liabilities for three consecutive years ending December 31, 2004. In the table
below, the loan interest includes loan fees and the interest on securities
considers discount accretion and premium amortization.

---

`Security Capital Corporation

                             Table 2 - Average Balances; Interest Earned and Interest Yields
                                                  (dollars in thousands)

                                                                 Years ended December 31,
                                 ----------------------------------------------------------------------------------------
                                             2004                          2003                          2002
                                 ----------------------------  ----------------------------  ----------------------------
                                  Average             Average   Average             Average   Average             Average
                                  Balance   Interest  Yields    Balance   Interest  Yields    Balance   Interest  Yields
                                 --------   --------  -------  ---------  --------  -------  ---------  --------  -------

  Assets:
  Interest-Earning Assets:
  Securities                       96,219     3,826      3.98    85,582     3,256      3.80    66,418     3,210     4.83
  BV to MV                          1,295                         2,372                         3,103
  Total Securities                 97,514     3,826      3.92    87,954     3,256      3.70    69,521     3,210     4.62

  Loans
  Commerical/Agricultural         150,633     8,951      5.94   138,228     8,409      6.08   124,815     8,241     6.60
  Consumer/Installment             66,148     5,050      7.63    55,178     4,559      8.26    49,593     4,348     8.77
  Mortgage                          1,096        89      8.12     1,565       127      8.12     2,119       187     8.82
  Other Personal Loans              3,432       952     27.74     2,843       489     17.20     2,768       399    14.41
  Total Loans                     221,309    15,042      6.80   197,814    13,584      6.87   179,295    13,175     7.35

  Other Investments
  CDs with Other Banks                529        19      3.59       677        28      4.14     2,742       167     6.09
  Federal Funds Sold                4,488        58      1.29     5,412        64      1.18     5,908        98     1.66
  FHLB Account/Bank
    Accounts/Other                  9,721       147      1.51     4,794        77      1.61    11,394       197     1.73
  Total Other                      14,738       224      1.52    10,883       169      1.55    20,044       462     2.30

  Total Earning Assets            333,561    19,092      5.72   296,651    17,009      5.73   268,860    16,847     6.27

  Noninterest Earning Assets:

  Allowance for Loan Losses        -3,850                        -3,667                        -3,232
  Fixed Assets                     12,612                        11,277                        11,077
  Other Assets                     14,951                        14,808                        12,075
  Cash and Due Froms               14,150                        12,543                        11,050

  Total Noninterest Earning
    Assets                         37,863                        34,961                        30,970

  Total Assets                    371,424                       331,612                       299,830

  Liabilities & Shareholder Equity

  Interest-Bearing Liabilities
  Deposits:
  Interest-Bearing DDA            123,215     1,280      1.04    93,409       932      1.00    79,950     1,063     1.33
  Savings Deposits                 26,663       280      1.05    22,780       258      1.13    18,127       289     1.59
  Time Deposits                   114,125     2,230      1.95   114,998     2,421      2.11   110,189     2,939     2.67

  Total Interest-Bearing
    Deposits                      264,003     3,790      1.44   231,187     3,611      1.56   208,266     4,291     2.06

  Borrowed Funds
  Short-Term Borrowings             1,032        15      1.45       860        10      1.16       625        10     1.60
  FHLB Advances-Short/Long-Term     7,695       334      4.34     7,985       334      4.18     9,809       459     4.68

  Total Borrowed Funds              8,727       349      4.00     8,845       344      3.89    10,434       469     4.49

  Total Interest-Bearing
    Liabilities                   272,730     4,139      1.52   240,032     3,955      1.65   218,700     4,760     2.18

  Non-Interest-Bearing Liabilities
  Non-Interest-Bearing Deposits    51,798                        47,260                        41,765
  Other Liabilities                 3,786                         4,137                         3,575

  Shareholders' Equity             43,110                        40,183                        35,790

  Total Liabilities & SH Equity   371,424                       331,612                       299,830

  Net Interest Income &
  Interest Rate Spread                       14,953      4.21              13,054      4.09              12,087     4.09

  Net Interest Margin                                    4.48                          4.40                         4.50`

---

The following table sets
forth net interest earning assets and liabilities for 2004, 2003 and 2002.

`Table 3 - Net Interest Earning Assets
                                                  (in thousands)

                                                2004                 2003                 2002

                  Average Interest
                     Earning Assets            333,561             296,651               268,860

                  Average Interest
                     Bearing Liabilities       272,730             240,032               218,700

                  Net                           60,831              56,619                50,160`

Table 3A - Volume/Rate
Analysis depicts the dollar effect of volume and rate changes from 2002 to 2004.
Variances which were not specifically attributable to volume or rate were
allocated proportionately between rate and volume using the absolute values of
each for a basis for the allocation. Non-accruing loans were included in the
average loan balances used in determining the yields.

`Table 3A - Volume/Rate Analysis
                                                                       (in thousands)

                                                 2004 Change from 2003              2003 Change from 2002
                                             Volume      Rate       Total       Volume       Rate       Total
                                             ------      ----       -----       ------       ----       -----
       INTEREST INCOME: (1)

       Loans                                  1,518       -475        1,458       1,241        -983       258

       Investment Securities                    375        176          570         686        -644        42

       Other                                     59         26           55        -117        -186      -303

       Total Interest Income                  1,952       -273        2,083       1,810      -1,813        -3

       INTEREST EXPENSE: (2)

       Interest Bearing
       Demand Deposit Accounts                  310         37          358         135        -276      -141

       Savings Deposits                          43        -21           22          53         -84       -31

       Time Deposits                            -17       -184         -201         101        -619      -518

       Borrowed Funds                            -5         11            5         -62         -63      -125

       Total Interest Expense                   331       -157          184         227      -1,042      -815

       NET INTEREST INCOME                    1,621       -116        1,899       1,583        -771       812`

---

Non-interest expense
increased by 5.21% from 2002 to 2003 and increased by 7.46 % from 2003 to 2004,
primarily because of increases in salaries and employee benefits. Increases in
non-interest expense signifies Security Capital Corporations preparation
for a move into a new market area in Desoto County that required expenditures
for banking facilities as well as training employees to perform the operational
procedures. Security Capital Corporation has provided its Desoto County
locations with new state of the art buildings to address the needs of its staff
and the increase in business as well as to present an attractive banking
establishment for its customers. With the establishment of a new facility, other
costs are involved such as the purchase of new equipment and the increase in the
maintenance costs of the equipment. In addition to the increase in employees,
salaries and employee benefits normally increase in a range from 3% to 7%
depending the profits and the attainment of performance goals.

Non-interest income
decreased by $9 thousand from 2003 to 2004. Included in the 2004 non-interest
income is an insurance settlement payment of $350,000 for loss of the original
branch buildingin 2002 due to fire. This payment was partially offset by loss of
$123,000 on disposal of obsolete fixed assets.

The following table
provides details on non-interest income and expense for the Years ended December
31, 2002 through 2004.

`Table 4 - Non-Interest Income and Expense
                                                  (in thousands)

                                                                  2004      2003      2002
                       Non-Interest Income:
                       Trust Department Income                      911       876       734
                       Service Charges: Deposits                  3,876     3,758     3,671
                       Other Operating Income                       870     1,032       750

                       Total Non-Interest Income                  5,657     5,666     5,155

                       Non-Interest Expense:
                       Salaries & Employee Benefits               7,607     6,649     6,145
                       Occupancy Expense                          1,236     1,311     1,277
                       Other Operating Expense                    2,567     2,658     2,670

                       Total Non-Interest Expense                11,410    10,618    10,092`

Security Capital
Corporation records a provision for income taxes currently payable, along with a
provision for those taxes in the future. Such deferred taxes arise from
differences in timing of certain items for financial statement reporting rather
than income tax reporting. Security Capital Corporation benefits in its
computation of income taxes due from having tax-exempt securities and loans.

---

The loan portfolio
constitutes the major earning asset of Security Capital Corporation and in the
opinion of management offers the best alternative for maximizing interest spread
above the cost of funds. The continuing loan growth is primarily due to Security
Capital Corporations move to a market area that is experiencing rapid
growth in the building of residential and commercial structures. Real Estate
Loans and Commercial Loans comprise the largest segment of the loan portfolio.
Commercial loans which bear a higher degree of risk comprise 6.54% of the loan
portfolio at December 31, 2004. Agricultural loans, another type of loan that
carries a higher degree of risk, are only 1.36% of the loan portfolio at
December 31, 2004.

The Board of Directors of
the Corporation has approved guidelines and policies specific for each type
loan. These guidelines are followed under the direction of the President and the
Senior Loan Officer. All loans made above $25,000 will be presented by the
officer originating the loan to a committee of loan officers for a review of the
maker(s), the repayment ability, source of repayment, type and sufficiency of
collateral and length of repayment. The loans reviewed will be compiled into a
report certifying that the loans have been made in accordance with the Board
approved policies and principles. This periodic report is submitted to the
Directors Loan Committee for review and then ratified at the next scheduled
meeting. Each loan officer has an individual lending limit (not to exceed the
legal limit of $250,000) which is awarded based on his or her lending experience
and length of service. Any loan in excess of the loan officers limit must
be approved prior to consummation by the Senior Loan Officer or the President or
the Board of Directors or by a combined lending authority with another loan
officer. All loans or lines of credit over $250,000 must be pre-approved by the
Directors Loan Committee.

All loans must have an
ample margin of safety between the loan advance and the current fair value of
the collateral. The benchmark, under normal circumstances, is loan advances for
all types of loans should not to exceed 80% of the current fair value of the
collateral. However, decisions of judgement are needed in special circumstances
and this percentage may be reduced by the abnormality/unusual nature of the
collateral. Documentation of the collateral is properly collected before the
loan transaction is completed and will meet the requirements (to name a few) of
the Mississippi Uniform Commercial Code, the Loan Policy, and all pertinent
regulations. In an effort to secure and to protect the liens of the First
Security Bank, a staff provides loan management with periodic reports
highlighting loan accounts requiring additional documentation. In addition, the
compliance and loan review officer along with the internal audit staff monitor
the procedures on an ongoing basis with reports for management of any
deficiencies.

The composition of the loan
portfolio consists chiefly of real estate, agricultural, consumer and commercial
loans. Real estate loans, in addition to the general collateral and
documentation requirements, require the performance of an appraisal or
evaluation before the credit decision is made. An appraisal is required for all
new real estate loans where the loan amount is $250,000 or greater. All
appraisals must be prepared by a certified appraiser. However, on 1-4 family
residential real estate loans less than $1,000,000, the appraisal may be
prepared by a licensed appraiser. For small loans (less than $250,000), the
appraisals may be performed by a certified or licenced in-house appraiser. Real
estate loans are normally considered a low risk due to the required strength in
collateral. Agricultural loans mandate an extensive review of the
customers farming tract record, financial statements, cash flow
statements, projected income and collateral. The depth of these reviews should
determine the honesty, integrity, the debt status, the repayment ability and the
collateral strength of the farmer. To combat this high risk area, the
banks policy is for production loans to be completely secured with
tangible assets and not to exceed 60% of the projected cash repayment ability.
Consumer loans is another area of high risk due to the type and location of the
collateral and the volatility of the economy which may affect the payback
ability of the customer. The consumer loans normally require the pledging of
collateral. However, up to $10,000 may be extended without the pledging of the
collateral but must be based on the creditworthiness of the loan applicant.
Credit card loans (a very high risk area) - in the consumer group - require a
financial statement submitted in order for a credit limit of $5,000 and over to
be granted. Commercial loans require a review of the purpose and the assessment
of the future benefit of the operation, the financial statements, and the
collateral on the onset to determine the strength of the potential loan asset.
The degree of risks associated with the commercial lending is dependent on the
completeness of the initial loan evaluation process.

---

The bank monitors its loans
in a manner that the loan portfolio will not represent an excessive risk due to
concentrations of credit from a large volume of economically related assets
advanced to one individual, related groups of borrowers or industry. Loans to
one individual or corporation shall not exceed the limits set by state law.
Mississippi state law states that the limit of lending to one individual or
entity shall not exceed 20% of unimpaired capital and reserves. To keep abreast
of the loan concentrations, a tracking of individual borrowers, related groups
of borrowers and industry groups as well as geographical locations is compiled
in a quarterly report that is presented to the Directors Loan Committee.

The following table
reflects outstanding balances by loan types for the past five years.

`Table 5 - Loans by Type
                                                (in thousands)

                                                       2004       2003        2002      2001      2000
      Commercial, Financial & Agricultural             28,077      32,878     38,229    34,459    43,539
      Real Estate - Construction & Development         49,189      37,116     27,165    21,183    21,792
      Real Estate - Mortgage                          124,911     103,348     96,737    88,074    82,927
      Installment Loans to Individuals                 29,898      28,529     22,602    23,893    28,192
      Other                                             2,328       2,553      2,782     2,509     3,585

      Total Loans                                     234,403     204,424    187,515   170,118   180,035`

The following table reflects
the maturity schedule or repricing frequency of all loans that will reprice or
mature within one year.

`Table 6 - Loan Liquidity
                                                (in thousands)

                                                            Within    1 thr 5    Over
            Loans That Will Reprice or Will Mature:         1 Year     Years    5 Years     Total
                                                            -------   -------   -------     -------
            Commercial, financial and agriculture loans      15,457    12,465       155      28,077
            Construction and development                     41,020     8,169                49,189


            Fixed Rate                                       16,619     9,673        28      26,320
            Variable Rate                                    39,858    10,961       127      50,946

            Total                                            56,477    20,634       155      77,266
            Percent of Total                                  73.09%    26.71%     0.20%     100.00%`

---

The provision for loan
losses represent charges made to earnings to maintain an adequate allowance for
loan losses. The allowance is maintained at an amount believed by management to
be sufficient to absorb losses inherent in the credit portfolio. Factors
considered in establishing an appropriate allowance include: a careful
assessment of the financial condition of the borrower; a realistic determination
for the value and adequacy of underlying collateral; the condition of the local
economy and the condition of the specific industry of the borrower; a
comprehensive analysis of the levels and trends of loan categories; and review
of delinquent and classified loans.

Security Capital
Corporation maintains a comprehensive loan review program to evaluate loan
administration, credit quality, and loan documentation. This program includes a
regular review of problem loans, delinquencies, and charge-offs. The adequacy of
the allowance for loan losses is evaluated on a quarterly basis. This evaluation
focuses on specific loan reviews, changes in the type and volume of the loan
portfolio given the current and forecasted economic conditions, and historical
loss experience. Any one of the following conditions may necessitate a review of
a specific loan: a question of whether the customers cash flow or net
worth may not be sufficient to repay the loan; the loan has been criticized in a
regulatory examination; the accrual of interest has been suspended; serious
delinquency; or other reasons where either the ultimate collectibility of the
loan is in question or the loan has other special or unusual characteristics
which require special monitoring.

Activity in the allowance
for loan losses is reflected in Table 7 - Analysis of Allowance for Loan Losses.
The recorded values of loans and leases actually removed from the consolidated
balance sheets are referred to as charge-offs and, after netting out recoveries
on previously charged-off assets, become net charge-offs. Security Capital
Corporations policy is to charge-off loans, when, in managements
opinion, the loan is deemed uncollectible, although concerted efforts are made
to maximize recovery.

`Security Capital Corporation
                                      Table 7 - Allowance for Loan Losses
                                                (in thousands)

                                                        2004     2003       2002      2001      2000
          Balance at Beginning of Year                  3,665    3,455      3,039     2,920     2,716

          Loans Charged-Off
          Commercial, Financial & Agricultural            242      146         75        58       252
          Real Estate - Construction & Development          6        4          0
          Real Estate - Mortgage                          225       69         75       121
          Installment Loans to Individuals                655      167        584       666       116
          Other                                                    324          4        21        15
          Total Charge-Offs                             1,128      710        738       866       383

          Charge-Off Recovered
          Commercial, Financial & Agricultural              2       36          8        18        69
          Real Estate - Construction & Development                  26          6         2
          Real Estate - Mortgage                           24                  39         6         6
          Installment Loans to Individuals                398      104        423       254       185
          Other                                                    208          6         4         1
          Total Recoveries                                424      374        482       284       261

          Net Charge-Offs                                 704      336        256       582       122

          Current Year Provision                          637      546        672       701       326
          Adjustment (1)

          Balance at EOY                                3,598    3,665      3,455     3,039     2,920


          Loans at EOY                                230,805  200,759    187,515   170,118   180,035

          Ratio: Allowance to Loans                     1.56%    1.83%      1.84%     1.79%     1.62%

          Average Loans                               221,309  197,814    179,295   178,263   167,795

          Ratio:Allow. To Avg Loans                     1.63%    1.85%      1.93%     1.70%     1.74%

          Ratio:  Net Charge Offs to Average Loans      0.32%    0.17%      0.14%     0.33%     0.07%

          (1) Reserves were obtained with the
              acquisition of a branch.`

---

Nonperforming assets and
relative percentages to loan balances are presented in Table 8 - Nonperforming
Assets. The level of nonperforming loans and leases is an important element in
assessing asset quality and the relevant risk in the credit portfolio.
Nonperforming loans include non-accrual loans, restructured loans, and loans
delinquent 90 days or more. Loans are classified as non-accrual when management
believes that collection of interest is doubtful, typically when payments are
past due over 90 days, unless well secured and in the process of collection.
Another element associated with asset quality is other real estate owned (OREO),
which represents properties acquired by Security Capital Corporation through
loan defaults by customers.

`Table 8 - Nonperforming Assets
                                                  (in thousands)

                                                       2004       2003     2002      2001       2000
               Loans:
               Non-accrual                              172         78      590       495        306
               90 Days+ Past-Due                        724        629      307       333        162

               Total Nonperforming Loans                896        707      828       828        468
               As % of Total Loans                    0.38%      0.35%    0.44%     0.49%      0.26%

               Other Real Estate                        165        129      234       228        214
               As % of Total Loans                    0.07%      0.06%    0.12%     0.13%      0.12%

               Loan Loss Reserve                      3,598      3,665    3,455     2,959      2,839

               Loan Charge-Offs                        1128        710      738       865        384

               Total Loans                          234,403    204,424  187,515   170,118    180,034`

The consolidated reserve
for loan losses reflected in Table 7 are the balances remaining after the charge
offs for the year.

The loan portfolio
contained an aggregate of $172 thousand in non-accrual loans and an aggregate of
$724 thousand of 90 days past due and over as of December 31, 2004. If the
non-accrual loans had been performing loans during the 2004 period, interest
income would have shown an addition of $12 thousand. The 90 days and over past
due loans are not subject to a non-accrual status and interest is accrued and
recognized daily as income. The interest income recognized in 2004 for the loans
classified as 90 days and over past due at December 31, 2004 totaled $72
thousand.

As of December 31, 2004,
one loan (not included in the non-accrual and the 90 day and over totals)
totaling $426 thousand has been identified by loan management as being doubtful
as to the ability of the borrowers to comply with the present loan repayment
terms. Analysis of possible workout plans does not anticipate any deficiency.
The actual deficiency depends on the market for the equipment and real estate at
the time of disposal.

Management believes loans
classified for regulatory purposes as loss, doubtful, or substandard that are
not included in nonperforming or impaired loans do not represent or result from
trends or uncertainties which will have a material impact on future operating
results, liquidity, or capital resources. The most recent safety and soundness
exam conducted by the FDIC as of December 31, 2003 identified $1,647,000 as
Substandard loans and $44,000 as Loss loans. These loans have been watched by
management.

In addition to loans
classified for regulatory purposes, management, also, designates certain loans
for internal monitoring purposes in a watch category. Loans may be placed on
managements watch list as a result of delinquent status, concern about the
borrowers financial condition or the value of the collateral securing the
loan, substandard classification during regulatory examinations, or simply as a
result of managements desire to monitor more closely a borrowers
financial condition and performance. Watch category loans may include loans with
loss potential that are still performing and accruing interest and may be
current under the terms of the loan agreement; however, management may have a
significant degree of concern about the borrowers ability to continue to
perform according to the terms of the loan. Loss exposure on these loans is
typically evaluated based primarily upon the estimated liquidation value of the
collateral securing the loan. Also, watch category loans may include credits
which, although adequately secured and performing, reflect a past delinquency
problem or unfavorable financial trends exhibited by the borrower.

---

All watch list loans are
subject to additional scrutiny and monitoring. Security Capital
Corporations policies require loan officers to identify borrowers that
should be monitored in this fashion and believe this process ultimately results
in the identification of problem loans in a more timely fashion. At December 31,
2004, Security Capital Corporation in its Loan Loss Reserve Analysis classified
$8,045,036 with a rating of Watch, $1,597,408 with a rating of Substandard, and
$161,867 with a rating of Doubtful.

All other real estate is
carried by Security Capital Corporation at the lower of cost or market value
less costs to dispose. Any normal expense of holding the other real estate is
expensed as occurred. Any expenses from the other real estate that is
substantial or that extends the life of the asset is capitalized.

An analysis of the loan
portfolio and the loan loss reserve or allowance is conducted on a quarterly
basis by the President and loan administrators and approved by the Board of
Directors to insure that the bank is well protected against any potential and/or
unexpected loan losses. To arrive at the proper grades or classifications needed
in the loan loss reserve analysis, each loan officer reviews each loan in his or
her portfolio. The review process will include consideration of the payment
history of the customer, bankruptcy status, and stimuli in the economy or in the
area that may affect the future cash flow of the customer. The loan officer
and/or the senior loan administrator will grade the loan as exceptional,
satisfactory, watch, substandard or doubtful. This quarterly review and grading
process is conducted on an ongoing basis to identify the loans that are
non-performing as well as loans that no longer require an allocation in the loan
loss reserve. The required reserve will fluctuate from quarter to quarter due to
the loan portfolio performance being monitored.

The composition of the
allowance or reserve for loan losses is based on the risk elements in the loan
portfolio. Loans with the highest risk are graded doubtful. These would be loans
that have been restructured due to poor payment performance, insufficient
collateral to support the loan balance, non-accrual loans and loans that have
been modified due to a change in the financial condition of the borrower to such
an extent that a loss would most normally be expected. Loans with the second
highest risk are graded substandard. These loans normally portray extremely weak
credit with a potential for either partial or total loss which must be
recognized. With these loans, legal action is anticipated with the debt not
being retired through liquidation of the collateral. The next risk level is the
loans that are considered to be on the watch list. These loan
customers display inadequate financial strength or credit to provide loan
management with the assurance that they will meet the scheduled repayment plan.
Loan customers who have filed bankruptcy present a high risk due to likelihood
of the payment plan may not be re-affirmed. Due to the type of collateral or
lack of collateral, consumer loans without real estate are considered another
area of risk requiring more reserves. Agricultural loans, by the nature of the
purpose and the unforeseen elements in the farming process, completes the loans
identified as having more than the normal risks.

`Table 8A - Allocation of the Allowance for Loan Losses
                                                    (Dollars in thousands)

                                                                     At December 31,
                            -------------------------------------------------------------------------------------------------
                                  2004                2003                2002                2001                2000
                            -------------------------------------------------------------------------------------------------
                            Amount    Percent   Balance   Percent   Balance   Percent   Amount    Percent   Amount    Percent
                            -------------------------------------------------------------------------------------------------
  Commercial, Financial
     & Agricultural         $   538   14.95%    $   856   23.36%    $ 1,006   29.12%    $   679   22.34%    $ 1,116   38.22%

  Real Estate - Construction
     & Development              522   14.51%        461   12.58%        298    8.63%        227    7.47%        230    7.88%

  Real Estate - Mortgage      1,735   48.22%      1,533   41.83%      1,246   36.06%      1,040   34.22%        968   33.15%

  Installment Loans
     to Individuals             780   21.68%        732   19.97%        816   23.62%        859   28.27%        538   18.42%

  Other Loans                    23    0.64%         26    0.71%         28    0.81%         25    0.82%         36    1.23%

  Unallocated                     0         0        57    1.56%         61    1.77%        209     6.88%        32     1.10%

  Total Loans               $ 3,598   100.00%   $ 3,665   100.00%   $ 3,455   100.00%   $ 3,039   100.00%   $ 2,920   100.00%

  Note: Percent in the above table represents the amount represented by the loan type in the loan portfolio.`

The loan loss reserve at
December 31, 2000 showed a small increase of $204 thousand from the previous
year, which can be justified by the increase in the loan portfolio. The loan
loss reserve at December 31, 2000

was represented by 15% of
the substandard loans ($101 thousand), 50% of the doubtful loans ($43 thousand),
20% of the bankruptcy loans ($210 thousand), 5% of the credit card loans ($40
thousand), 4% of the agricultural loans ($732 thousand), 2% of the consumer
loans without real estate collateral ($257 thousand), 2% of the watch loans ($96
thousand) and 1% for the remainder of the adjusted loan portfolio ($1,409
thousand). The primary reasons for major changes in the allocation from the
previous year were: substandard loans decreased from $996 thousand to $676
thousand; consumer loans without real estate collateral dropped from $14.4
million to $12.8 million; and the risk factor (%) for credit card loans
decreased from 10% to 5%. This decrease in the risk factor for credit card loans
was due to the current analysis of the potential problem accounts along with the
banks historical loss experience factor.

---

At December 31, 2001, the
loan loss reserve grew approximately $119 thousand from December 31, 2000. The
allocation for substandard loans increased from $101 thousand to $169 thousand
due to the increase in the loans in this risk category from $676 thousand to
$1.1 million. Bankruptcy loans increased by approximately $800 and caused an
increase in its loan loss reserve allocation of $156 thousand. The loans
classified as agricultural loans decreased by approximately $1.6 million. This
decrease with a decrease in the risk factor of 1.25% created a decrease in the
agricultural loans allocation by $274 thousand. The allocation for consumer
loans without real estate collateral increased by $204 thousand due to the
increase from $12.8 million in 2000 to $23 million in 2001. Other variables in
the loan loss reserve allocation remained constant. The allocation for December
31, 2001 is as follows: 15% of substandard loans, $169 thousand; 50% of doubtful
loans, $39 thousand; 20% of bankruptcy loans, $367 thousand; 5% of credit card
loans, $38 thousand; $2.75% of agricultural loans, $458 thousand; 2% of consumer
loans without real estate collateral, $461 thousand; 2% of watch loans, $83
thousand and 1% of the remainder of the adjusted loan portfolio, $1,215
thousand.

At December 31, 2002, the
loan portfolio analysis required an increase in the loan loss reserve. The major
stimulus for the increase was the growth in the loan portfolio from $170 million
to $187.5 million. In addition, increases were made to the risk factors for the
following categories: agricultural loans, 1.25% and consumer loans without real
estate collateral, 1%. These risk factor increases were the result of a
continuing study of the loan quality and the banks experience record in
these categories. A decrease in the amount allocated for doubtful loans from $38
thousand to $7 thousand was attributed to a decrease in the balance of loans
with this grade. The loan loss reserve at December 31, 2002 was allocated as
follows: 15% of substandard loans, $201 thousand; 50% of doubtful loans, $7
thousand; 20% of bankruptcy loans, $350 thousand; 5% of credit card loans, $39
thousand; 4% of agricultural loans, $742 thousand; 3% of consumer loans without
real estate collateral, $645 thousand; 2% of watch loans, $133 thousand; and 1%
of the remainder of the adjusted loan portfolio, $1,277 thousand.

Due to the growth in the
loan portfolio from $187.5 million to $204.4 million during 2003, the loan
portfolio analysis required an increase in the loan loss reserve. Another
stimuli for the growth in the reserve was the increase of 4% in the risk factor
for the category of watch loans. The assigned risk factors are the result of a
continuing study of the loan quality and the banks experience record in
these categories. The allocation for doubtful loans reflected an increase of $17
thousand primarily due to using a specific allocation instead of the 50% of the
loan balance as used in previous periods. A specific allocation is a deficiency
when the balance of the loans exceeds the market value of the collateral. The
loan loss reserve at December 31, 2003 was allocated as follows: 15% of
substandard loans, $166 thousand; specific allocation of doubtful loans, $25
thousand; 20% of bankruptcy loans, $439 thousand; 5% of credit card loans, $38
thousand; 4% of agricultural loans, $575 thousand; 2% of consumer loans without
real estate collateral, $540 thousand; 6% of watch loans, $260 thousand; and 1%
of the remainder of the adjusted loan portfolio, $1,622 thousand.

At December 31, 2004, the
loan loss reserve reflected a small decrease of $67 thousand from the previous
year. This decrease was due to an intensive evaluation of the loan quality and
an aggressive recognition of loan loss. The growth of the loan portfolio spurred
an increase in the potential risk areas. The loan loss reserve at December 31,
2004 was composed of the following: 10% of substandard loans, $160 thousand; an
allocation for deemed uncollectible doubtful loans, $113 thousand; 16% of
bankruptcy loans, $448 thousand; 6% of credit card loans, $49 thousand; 3% of
agricultural loans, $288 thousand; 2% of consumer loans without real estate
collateral, $558 thousand; 3% of watch loans, $202 thousand; and 1% of the
remainder of the adjusted loan portfolio, $780 thousand. Changes were made in
the risk factor (%) due to the ongoing analysis of the potential loss elements
within the actual loan categories. The additional risk were allocated with
increases in the following categories at December 31, 2004: 1% for credit card
loans and 26% for deposit overdrafts. Lower risk factors were allocated with
decreases in the following categories at December 31, 2004: 5% for substandard
loans; 4% for bankruptcy loans; 1% for agricultural loans; 3% for watch loans.

Loan charge offs in 2003
and 2004 were $710 and $1,128 thousand, respectively, reflecting a significant
increase over the average loan charge offs of $662 thousand for the prior three
years. This increase in loan charge offs mandated the need to maintain the
increase in provisions for the Allowance for Loan Losses for 2003 and 2004,
respectively, $546 thousand and $637 thousand. The regulatory exam as of
December 31, 2003, however, classified $1.6 million of loans as substandard,
down from $3.1 million as reflected in the regulatory exam as of December 31,
2001which was a consideration in the analysis of needed loan provisions.
Recoveries reflected an increase in 2004 from $374 thousand to $424 thousand as
a result of the diligent efforts by loan and deposit personnel to regain
principal from the classified loan activity. The ratio of the Allowance for Loan
Losses to Loan for the other years presented shows a small increase with each
year.

---

Securities are identified
as either Available for Sale, Held to Maturity or Other Securities. Securities
held to maturity are those securities which Security Capital Corporation has
both the intent and the ability to hold to maturity and are reported at the
amortized cost. Securities available for sale are those securities which
Security Capital Corporation may decide to sell if needed for liquidity,
asset/liability management or other reasons. Securities that are available for
sale are reported at market value with the unrealized gains or losses included
as a separate component of equity, net of tax. Other securities are carried at
cost and are investments in FHLB, First National Bankers Bankshares and
Federal Agricultural Mortgage Corporation.

`Table 9 - Securities
                                                   (in thousands)

                                                        2004      2003      2002      2001      2000
               Securities Available for Sale
               U. S. Treasuries                        -             702       713     1,007     1,506
               U. S. Agencies                           23,316    28,560    15,026     1,032     4,017
               Mortgage Backed                          22,419     9,611    17,158    14,045    14,664
               State, Municipals & Other                50,934    37,447    41,982    45,972    47,899

               Total Securities AFS                     96,669    76,320    74,879    62,056    68,086

               Securities Held to Maturity
               U. S. Treasuries                              0         0         0         0         0
               U. S. Agencies                                0         0         0         0         0
               Mortgage Backed                               0         0         0         0         0
               State, Municipals & Other                 2,050     2,053         0         0         0

               Total Securities HTM                      2,050     2,053         0         0         0

               Other Securities                          1,259       991       738       717       682

               Total Securities                         99,978    79,364    75,617    62,773    68,768`

The security portfolio is composed of U. S. Treasury securities, U. S. Agency
securities, State and
Municipal securities - both tax-exempt and taxable, equities, and mortgage-backed securities.

`Table 10
                                      Securities Maturity & Repricing Schedule
                                                   For 12/31/2004
                                                   (in thousands)

                                              1 Year        After 1 Year   5 to 10        Over
                                              and Less      Thru 5 Years    Years       10 Years
                      Agencies
                      Fair Value                 1,985          1,499        6,017       13,815
                      Book Yield                 2.547          3.170        4.410        4.350

                      Taxable Municipals
                      Fair Value                   912          1,125          171           44
                      Book Yield                 6.189          5.725        4.640        4.910

                      Municipals
                      Fair Value                 7,300         17,621       10,994       14,820
                      Book Yield                 3.920          3.339        4.090        4.820

                      Equity-FHLB                    0              0            0        1,005
                      Book Yield                                                          2.440

                      Other Securities               0              0            0          254

                      MBS
                      Fair Value                     0              0            0       22,419
                      Book Yield                                                          5.014

                      Total Fair Values         10,197         20,245       17,182       52,357
                      Weigh Bk Yields            3.816          3.527        4.198        4.765`

---

`Table 11 - Securities Weighted Maturity and Tax Equivalent Yield by Classification
                                               December 31, 2004
                                                                               Weighted
                                                         Weighted           Tax-Equivalent
                                                         Maturity                Yield

        U. S. Agencies                                   10.22 Yrs                4.060%
        Mortgage Backed                                   3.28 Yrs                4.780%
        Taxable Municipals                                2.25 Yrs                5.830%
        Tax-Exempt Municipals                             6.79 Yrs                5.890%

        Total Securities Portfolio                        7.54 Yrs                5.048%`

The weighted tax-equivalent
yields reflected in the table above were calculated using amortized costs and a
tax rate of 34%.

The securities portfolio
carries varying degrees of risk. Investments in U. S. Treasury and U. S. Agency
securities have little or no credit risk. Mortgage-backed securities are
substantially issues of federal agencies. Obligations of states and political
subdivisions are the areas of highest potential credit exposure in the
portfolio. This risk is minimized through the purchase of high quality
investments. When purchased, obligations of states and political subdivisions
and corporate bonds must have a credit rating by Moodys or Standard and
Poors of A or better. The risk of non-rated municipal bonds is
minimized by limiting the amounts invested in local issues. Management believes
the non-rated securities are of high equality. No securities of an individual
issuer exceeded 10% of Security Capital Corporations shareholders
equity as of December 31, 2004. Security Capital Corporation does not use
off-balance sheet derivative financial instruments as defined in Statement of
Financial Accounting Standards No. 119, Disclosure about Derivative
Financial Instruments and Fair Value of Financial Instruments.

Though earning assets
increased from 2000 through 2002, the security portfolio balances were not
reciprocal as when securities matured the proceeds during those years funded the
increase in the loan portfolio. In 2003 and 2004, the securities investment was
increased by approximately $21 million as investment decisions favored
securities investments when adequate loan funding was maintained.

Security Capital
Corporation offers a wide variety of deposit services to individual and
commercial customers, such as non-interest-bearing and interest-bearing checking
accounts, savings accounts, money market deposit accounts, and time deposit. The
deposit base provides the major funding source for earning assets. Total average
deposits have shown steady growth over the past few years. Time deposits
continue to be the largest single source of Security Capital Corporations
deposit base.

A five year schedule of
average balances of deposits by type is presented in Table 12. Also, the
maturities of time deposits greater than $100,000 is presented in Table 13.

---

`Table 12 - Deposit Information
                                                   (in thousands)
                                2004                2003             2002            2001         2000
                               Average   Avg   Average   Avg    Average   Avg    Average   Avg   Average   Avg
                               Balance Rate   Balance    Rate  Balance    Rate  Balance  Rate    Balance   Rate
      Noninterest- Bearing
         Demand                 51,557          47,034           41,552           38,736          42,321
         Savings                   241             226              213              181             205
      Interest-bearing
         Demand                123,215  1.04    93,409   1.00    79,950   1.34    70,591  2.39    73,049   3.14
         Savings                26,663  1.05    22,780   1.13    18,127   1.58    16,097  2.01    16,560   2.03
                               -------         -------          -------          -------         -------
         Time Deposits         114,125  1.95   114,998   2.11   110,189   2.67   114,704  4.73   103,388   5.52
                               -------         -------          -------          -------         -------
                               315,801         278,447          250,031          240,309         235,523
                               =======         =======          =======          =======         =======


                                    Table 13 - Maturity Ranges of Time Deposits
                                         With Balances More Than $100,000
                                             As of December 31, 2004
                                                   (in thousands)

                         3 Months or Less                                          $22,198
                         Over 3 Months thru 6 Months                                 7,271
                         Over 6 Months thru 12 Months                               10,501
                         Over 12 Months                                              8,714
                                                                                   -------
                                                                                    48,684
                                                                                   =======`

Security Capital
Corporation in its normal course of business will acquire large certificates of
deposit (time deposits), generally from public entities that exhibit a variety
of maturities. These funds are acquired on a bid basis and are considered to be
part of the deposit base of Security Capital Corporation.

Aside from the core deposit
base and large denomination certificates of deposit mentioned above, the
remaining funding sources include short-term and long-term borrowings. As of
December 31, 2004, Security Capital Corporations short-term borrowings
consisted of $1,497,000 of the Treasury Tax and Loan open-end note and
$8,634,000 borrowed from the Federal Home Loan Bank. As of December 31, 2003,
Security Capital Corporations short-term borrowings consisted only of
$930,000 in the Treasury, Tax and Loan open-end note and $8,237,000 borrowed
from the Federal Home Loan Bank. As of December 31, 2002, Security Capital
Corporation had $9,613,000 in borrowings from the Federal Home Loan Bank and
$316,000 in Treasury, Tax and Loan open-end note. Security Capital Corporation
foresees short-term borrowings to be a continued source of liquidity and will
continue to use these borrowings as a method to fund short-term needs.

Security Capital
Corporation at the end of 2004 had long-term debt in the amount of $8,634,272
with scheduled principal payments of $370,787 due to the Federal Home Loan Bank
in 2005. The rates on the debt with Federal Home Loan Bank as of December 31,
2004 ranged from 2.335% to 6.575% with the maturities ranging to 2024. The
maximum month-end balance during 2004 with Federal Home Loan Bank occurred at
the end of the year with the balance of $8,634,272. For 2004, the average
outstanding long-term balance was $7,694,000 for debt with Federal Home Loan
Bank.

---

Liquidity management is the
process by which Security Capital Corporation ensures that adequate liquid funds
are available to meet financial commitments on a timely basis. These commitments
including honoring withdrawals by depositors, funding credit obligations to
borrowers, servicing long-term obligations, making shareholder dividend
payments, paying operating expenses, funding capital expenditures and
maintaining reserve requirements. Interest rate risk is the exposure to
Corporation earnings and capital from changes in future interest rates. All
financial institutions assume interest rate risk as an integral part of normal
operations. Managing and measuring the interest rate risk is the process that
ranges from reducing the exposure of Security Capital Corporations
interest margin regarding swings in interest rates assuring that there are
sufficient capital and liquidity to support future balance sheet growth.

Liquidity risk is the risk
to a banks earnings and capital arising from its inability to meet
obligations when they come due without incurring losses. Bank management must
ensure that sufficient funds are available at a reasonable cost to meet
potential demands from both funds providers and borrowers.

Security Capital
Corporation addresses shortterm liquidity from both an asset liquidity and
a liability liquidity viewpoint. Short-term asset liquidity is provided by money
market assets, the investment portfolio, and readily saleable bank assets.
Short-term liability liquidity is measured by the liabilities considered to be
more volatile in nature and more likely to be sensitive to changes in interest
rates. Short-term liquidity is monitored thru the asset/liability reports in a
measure of a coverage ratio and a crisis coverage ratio. These ratios measure
the ability of the bank to raise cash quickly and how many times this cash will
cover volatile liabilities. For December 31, 2004, the coverage ratio was 5.03X
- which was in compliance of the policy limit of 1X. Of this ratio, the
calculated reserves or the source for cash was $85.7 million which would be
needed to meet the demand of the identified volatile liabilities and unused loan
commitments of $17 million and $12.6 million, respectively. The crisis ratio
looks at the coverage of volatile liabilities under a scenario where cash is
needed immediately. The crisis ratio for December 31, 2004 was 1.97X, adequately
within the policy limit of .50X. The identified reserves for a crisis ratio
totaled $67 million and the volatile liabilities and unused loan commitments
totaled $55 million. Additionally, the bank monitors liquidity by looking at the
ratio of cash and short-term investments versus non-core funding. The liquidity
ratio for December 31, 2004 was in compliance with the policy limit of 15% with
a ratio of 22.58%. This ratio measures the net cash and short-term marketable
assets of $60 million to the net deposits and short-term liabilities of $266
million. The corporations dependency ratio complied with policy with a
ratio of 1.97% at December 31, 2004. This ratio measures the net volatile
liabilities to the earning assets less short-term investments.

Long-term liquidity is the
ability of the bank to maintain its reputation in the market and to produce an
acceptable return to its shareholders. Adverse effects of reputation
deterioration could cause depositors and other funds providers as well as
investors, to seek higher compensation and negatively impact the banks
earnings and capital. If negative public opinion occurred, withdrawals of
funding could become debilitating. The bank will take steps to minimize its
reputation risk and the potential impact on liquidity. One step is to monitor
its reliance on credit-sensitive funding. Another issue that is monitored is
asset growth. Strategic consideration will be given to the development of new
business. A significant component of reputation risk is the underlying credit
underwriting process of the financial institution. Continued stringent
underwriting standards for both existing and for new business will be employed.
Additionally, concentrations of credit will be closely monitored.

At December 31, 2004, we
had outstanding loan origination commitments and unused commercial and
commercial and retail lines of credit of $41.9 million. Letters of credit
commitments totaling $15.7 million consisted of financial standby letters of
credit of $10.4 million, performance standby letters of credit of $768 thousand
and commercial letters of credit of $4.5 million. We anticipate that we will
have sufficient funds available to meet current origination and other lending
commitments. As a contingency plan for significant funding needs, the
Asset/Liability Management Committee may also consider the sale of securities,
sale of loans and/or the temporary curtailment of lending activities.
Certificates of deposit that are scheduled to mature within one year totaled
approximately $82.9 million at December 31, 2004. We expect to retain a
substantial majority of these certificates of deposit.

---

The asset/liability
committee is responsible for managing liquidity issues and interest rate risk,
among other matters. Various interest rate movements are factored into a
simulation model to assist the asset/liability committee in assessing interest
rate risk. The committee analyzes the results of the simulation model to
formulate strategies to effectively manage the interest rate risk that may
exist.

The liquidity of Security
Capital Corporation is dependent on the receipt of dividends from First Security
Bank. Management expects that in the aggregate, First Security Bank will
continue to have the ability to provide adequate funds to Security Capital
Corporation.

The Interest Rate Risk
Management System is comprised of six different steps. They are: Board
Oversight; Senior Management Oversight; Risk Limits and Controls; Risk
Identification and Measurement; Risk Monitoring and Reporting; and Independent
Review. A strategic plan highlighting risk tolerance levels is established and
monitored by the Board. Senior management implements the strategic plan of
goals, objectives and risk limits. Risk limits are set for Earnings at Risk, Gap
Analysis, Economic Value and Value at Risk. The status of liquidity and rate
sensitivity is forecasted in a quarterly report, Asset/Liability Performance
Analysis which is provided by an independent outside organization. The resulting
analysis report notifies Security Capital Corporation of compliance with the
limitations/goals established by Security Capital Corporation and regulatory
agencies as well as projecting a flat rate scenario where rates do not change
from the starting point of the analysis, the scenario of rates increasing by 200
and 300 basis points and the scenario of rates decreasing by 200 or 300 basis
points.

The areas of interest rate
risk which Security Capital Corporation is susceptible are Repricing Risk,
Option Risk and Yield Curve/Basis Risk. Repricing Risk is the difference in the
timing of the assets and the liabilities due to either maturities or repricing
within a certain time frame. Option Risk is the interest rate related options
embedded in the banks assets and liabilities which change the cash flow
characteristics of the assets and liabilities. Yield Curve/Basis Risk are the
changes in the relationship between different interest rates with the same
maturity or interest rates across a maturity spectrum which create compression
or expansion of net interest margins.

Gap Analysis is the
analytical tools that places maturing and repricing assets and liabilities into
time buckets to measure the short and long term pricing imbalances for a given
period. The broad guidelines set by Security Capital Corporation for this
measure are set in time frames of three months, six months, and twelve months
with a +/- cumulative gap position limit of 30%. Earnings at Risk (EAR), another
analysis tool, is considered managements best source of managing
short-term interest rate risk (in a one-year time frame.) The EAR variance is
the percentage change in net interest income over 12 months relative to the base
case scenario (with rates being flat) for a +/- instantaneous parallel movement.
The first limit or level is set at 10% of net interest income which will serve
as a warning to management. The second level of 15% represents a risk earnings
and is not acceptable to management. When this occurs, an explanation of the
variance is reported to Asset/Liability Committee and to the Board of Directors
with an action plan to decrease the variance. Among the possible actions are
loan sales, use of FHLB borrowings and investment portfolio restructuring.
Economic Value of Equity is the tool for measuring long-term interest rate risk.
This tool measures the long-term safety and soundness of the institution being
compromised for the sake of short-term results. The two limits of Economic Value
of Equity are level I designated having a variance of 30-39% and level II
designated having a variance of 40% or higher and uses the same concern or
action level as for Earnings at Risk

The analysis performed
using December 31, 2004 data projecting for the period ending December 31, 2005
reflected the net interest income at $16.3 million. There were no exceptions to
policy for the 12 month period. Return on Assets and Return on Equity at 1.35%
and 12.31%, respectively, compare to December 31, 2004 actuals at 1.65% and
14.22%, respectively. Historical comparison of the analysis show a third quarter
(2004) of 1.65% Return on Assets and 13.45% Return on Equity. The model for
December 31, 2004 shows asset sensitivity as rates ramp up. The net interest
income increases 1.74% in the 200 ramp up and 3.42% in the up 300 ramp. Economic
Value of Equity increased 10.12% in the up 200 ramp. The down 200 ramp results
in a decrease to net interest income of 3.32% which is well within the policy
limit of 10%. As rates move down 100 basis points we see a decrease in net
interest income of 1.87% . The recommendations from the analysis is to move
available funds from Fed Funds (a waiting on the Fed strategy) to a
one time callable agency security to minimize the extension exposure.

---

First Security Banks
source of funding is predominantly core deposits consisting of both commercial
and individual deposits, maturities of securities, repayments of loan principal
and interest, federal funds purchased, and long-term borrowings from the FHLB.
With the deposit base being diversified between individual and commercial
accounts, First Security Bank avoids dependence on large concentrations of
funds. Security Capital Corporation does not solicit certificates of deposit
from brokers. The primary sources of liquidity on the asset side of the balance
sheet are federal funds sold and securities classified as available for sale.
Most of the investment securities portfolio are classified in the available for
sale category and are subject to be sold should liquidity needs arise.

Along with the cash
provided by operations of $5.5 million in 2002, the cash available for use was
provided by an increase of deposits of $30 million and a net increase of
borrowings of $2.8 million. These funds were used to provide for an increase in
loan demand of $17.6 million, the increase of an investment of $12.4 million in
securities, the paying of a cash dividend of $2 million, the increase of $8.6
million in federal funds sold, the addition of buildings and equipment of $1.6
million and the purchase of bank owned life insurance of $3 million.

In 2003, funds available
for use were basically provided by net income adjusted for non-cash transactions
for a total of $6.9 million, maturities and calls of securities of $47 million,
long-term debt advances of $3.3 million and withdrawal of certificates of
deposits of $1.3 million. The major use of the funds provided were to invest
$52.8 million in securities and $16.9 million in loans. Further funding was
provided by the increase of deposits of $22.8 million. Other cash uses during
2003 were to fund the cash dividends paid on common stock ($2.2 million) and to
retire debt of $4 million.

In 2004, the funds provided
by operation activities totaled $6.4 million. The funds available from
operations, maturities, calls and sales of securities of $36 million, and
increases in deposits of $45 million were used to invest in securities of $59
million and in loans of $30 million. Other major uses of funds were cash
dividends of $2.5 million and investment in buildings and locations of $2.9
million.

Table 14 - Funding Uses and
Sources details the main components of cash flows for 2002 thru 2004.

`Table 14 - Funding Uses and Sources
                                                         (in thousands)
                                            2004                             2003                             2002
                                          Increase                          Increase                        Increase
                               Average   (Decrease)      %      Average    (Decrease)      %     Average   (Decrease)      %
                               Balance     Amount     Change    Balance      Amount    Change    Balance     Amount      Change
  Funding Uses
  Loans                        221,309       23,495     11.88    197,814        18,519   10.33   179,295         1,032     0.58
  Securities*                   96,219       10,637     12.43     85,582        19,164   28.85    66,418            15     0.02
  Federal Funds Sold             4,488         -924    -17.07      5,412          -496   -8.40     5,908         1,153    24.25
                               322,016       33,208     11.50    288,808        37,187   14.78   251,621         2,200     0.88

  Funding Sources
  Noninterest Bearing Deposits

     Demand Deposits            51,557        4,523      9.62     47,034         5,482 5482.00    41,552         2,816     7.27
     Savings Deposits              241           15      6.64        226            13    6.10       213            32    17.68
  Interest Bearing Deposits
     Demand Deposits           123,215       29,806     31.91     93,409        13,459   16.83    79,950         9,359    13.26
     Savings Deposits           26,663        3,883     17.05     22,780         4,653   25.67    18,127         2,030    12.61
     Time Deposits             114,125         -873     -0.76    114,998         4,809    4.36   110,189        -4,515    -3.94
  Borrowings                     8,727         -118     -1.33      8,845        -1,589  -15.23    10,434         2,281    27.98
                               324,528       37,236     12.96    287,292        26,827   10.30   260,465        12,003     4.83

  *Cost basis is used for
   securities instead of
   market values.`

Table 15 - Liquidity and
Interest Rate Sensitivity reflects interest earning assets and interest-bearing
liabilities by maturity distribution. Product lines repricing in time periods
predetermined by contractual agreements are included in the respective maturity
categories.

---

`Table 15 - Liquidity; Interest Rate Sensitivity
                                                (in thousands)

                                                               As of December 31, 2004
                                               Less        Over 3 Mos     Over 1 yr      Over
                                               3 Mos       thru 1 Yr      thru 3 Yrs     3 Yrs       Total
     Interest Earning Assets
     Loans                                    120,892          28,504        39,388     45,619     234,403
     Short-Term Investments                    14,591         -              -           -          14,591
     Investment Securities                     24,432          25,530        18,404     31,612      99,978
     Other                                      -             -              -           3,902       3,902
     Total Interest Earning Assets            159,915          54,034        57,792     81,133     352,874

     Interest Bearing Liabilities
     NOW                                       18,301         -               6,061     48,679      73,041
     Money Market                              23,725         -               4,271     34,439      62,435
     Savings Deposits                          10,798         -               1,989     15,629      28,416
     Time Deposits                             39,909          42,954        26,426      6,775     116,064
     Short-Term Borrowings                      1,497         -              -           -           1,497
     Long-Term Borrowings                          71             300         1,800      6,463       8,634
     Total Interest Bearing Liabilities        94,301          43,254        40,547    111,985     217,046

     Rate Sensitive Assets (RSA)              159,915         213,949       271,741    352,874     352,874
     Rate Sensitive Liabilities (RSL)          94,301         137,555       178,102    290,087     290,087
     Rate Sensitive Gap                        65,614          10,780        17,245    -30,852     135,828
     Rate Sensitive Cumulative Gap             65,614          76,394        93,639     62,787     135,828
     Cumulative % of Earning Assets            18.59%          21.65%        26.54%     17.79%      38.49%
     Cumulative % of Total Assets              19.28%          22.45%        27.52%     18.45%      39.92%`

Interest rate risk can also
be measured by analyzing the extent to which the repricing of assets and
liabilities are mismatched to create an interest sensitivity gap. An
asset or liability is said to be interest rate sensitive within a specific time
period. The interest rate sensitivity gap is defined as the difference between
the amount of interest earning assets maturing or repricing within a specific
time period and the amount of interest bearing liabilities maturing or repricing
within that same time period. A gap is considered positive when the amount of
interest rate sensitive assets exceeds the amount of interest rate sensitive
liabilities. A gap is considered negative when the amount of interest rate
sensitive liabilities exceeds the amount of interest rate sensitive assets.
During a period of rising interest rates, therefore, a negative gap would tend
to adversely affect the net interest income. Conversely, during a period of
falling interest rates, a negative gap position would tend to result in an
increase in net interest income.

As of December 31, 2004,
Security Capital Corporation had a positive gap of 14.60% in a 12 month time
frame in a rate ramp of 200, well within the policy of a +/- 35.

Certain shortcomings are
inherent in the method of analysis presented in the foregoing table. For
example, although certain assets and liabilities may have similar maturities or
periods to repricing, they may react in different degrees to changes in market
interest rates. Also, the interest rates on certain types of assets and
liabilities may fluctuate in advance of changes in market interest rates, while
interest rates on other types of assets may lag behind changes in market rates.
Additionally, in the event of a change in interest rates, prepayment and early
withdrawal levels would likely deviate significantly from those assumed in
calculating the table. Therefore, we do not rely solely on a gap analysis to
manage our interest rate risk, but rather we use what we believe to be the more
reliable simulation model - relating to changes in net interest income.

---

Based on simulation
modeling at December 31, 2004 and December 31, 2003, our net interest income
would change over a one-year time period due to changes in interest rates as
follows:

`Table 15A - Change in Net Interest Income Over One Year Horizon

                                                                    (Dollars in Thousands)
                                                      at December 31, 2004        at December 31, 2003
                                                     ----------------------------------------------------
                                                       Dollar          %          Dollar             %
     Changes in Levels of Interest Rates               Change        Change       Change          Change
                                                     ----------------------------------------------------
                    Increase 2.00%                       $285          1.74%       $418             3.15%
                    Increase 1.00%                        185          1.13%        195             1.47%
                    Decrease 1.00%                       -306         -1.87%       -243            -1.83%
                    Decrease 2.00%                       -542         -3.32%       -439            -3.31%`

Analysis of the simulation
presented indicates as of December 31, 2003 there is little short term interest
rate risk as the projected decrease in net interest income would be limited to
3.31% in a down 200 basis point rate ramp. As of December 31, 2004, the asset
sensitivity is evident as reflected in the projected 1.74% increase in the up
200 ramp. The down 200 ramp as of December 31, 2004 results in a decrease to net
interest income of 3.32%, well within the policy limit of (10%).

Security Capital
Corporation and First Security Bank are subject to various regulatory capital
guidelines as required by federal and state banking agencies, as discussed in
greater detail under Item 1 hereof. These guidelines define the various
components of core capital and assign risk weights to various categories of
assets.

The Federal Deposit
Insurance Corporation Improvement Act of 1991 (FDICIA) requires
federal regulatory agencies to define capital tiers. These are: well
capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized, and critically undercapitalized. Under these regulations, a
well-capitalized institution must achieve a Tier I risk-based
capital ration of at least 6.00%, and a total capital ratio of at least 10.00%,
and a leverage ratio of at least 5.00% and not be under a capital directive
order. Failure to meet capital requirements can initiate regulatory action that
could have a direct material effect on Security Capital Corporations
financial statements. If adequately capitalized, regulatory approval is required
to accept brokered deposits. If undercapitalized, capital distributions, asset
growth and expansion is limited, in addition to the institution being required
to submit a capital restoration plan.

Management believes
Security Capital Corporation and First Security Bank meet all the capital
requirements as of December 31, 2004, as noted below in Table 16 - Capital
Ratios, and is well-capitalized under the guidelines established by the banking
regulators. To be well-capitalized, Security Capital Corporation and First
Security Bank must maintain the prompt corrective action capital guidelines
described above.

Security Capital
Corporation increased the amount of dividends paid to $2,484,937 in 2004
compared to $2,243,187 in 2003, an increase of $241,750 or 10.78%.

---

`Table 16 - Capital Ratios
                        (Dollars in thousands)

                                             As of December 31,
                                         2004       2003       2002
  Tier 1 Capital

  Total Tier 1 Capital                   39,486     35,690     32,496

  Total Capital
  Tier 1 Capital                         39,486     35,690     32,496
  Allowable Allowance for Loan Losses     3,373      2,940      2,738

  Total Capital                          42,859     38,630     35,234

  Risk Weighted Assets

  Net Average Assets                    378,931    334,653    313,327

  Total Risk Weighted Assets            271,296    234,441    218,436

  Risk Based Ratios
  Tier 1 Leverage Ratio                   10.42      10.79      10.50
  Tier 1 Risk Based Capital Ratio         14.55      15.22      14.88
  Total Risk Based Capital Ratio          15.80      16.48      16.13




Off-Balance Sheet Arrangements

There were no off-balance sheet arrangements existing at December 31, 2004.

Tabular Disclosure of Contractual Obligations

            (in thousands)                                       Payment due by period
---------------------------------    ------------------------------------------------------------------------------
    Contractual Obligations                                   Less than      1-3 years       3-5 years   More than
                                              Total             1 year       1-3 years      3-5 years     5 years
---------------------------------    ------------------------------------------------------------------------------
    Long-Term Debt Obligations                8,634              371           1,800         2,883          3,580
    Capital Lease Obligations                     0                0               0             0              0
    Operating Lease Obligations                  29               10              19             0              0
    Purchase Obligations                          0                0               0             0              0
    Other Long-Term Liabilities                   0                0               0             0              0
      Reflected on the Registrant's
      Balance Sheet under GAAP
    Total                                     8,663              381           1,819         2,883          3,580`

---

Market risk is the
potential of loss arising from adverse changes in interest rates and prices. The
Company is exposed to market risk as a consequence of the normal course of
conducting its business activities. Financial products that expose the Company
to market risk include investment securities, loans, deposits and debt. The
Companys market risk management process involves measuring, monitoring,
controlling and managing risks that can significantly impact the Companys
financial position and operating results. In this management process, market
risks are balanced with expected returns in an effort to enhance earnings
performance and shareholder value, while limiting the volatility of each..
Normal business transactions expose the Companys balance sheet profile to
varying degrees of market risk. The Companys primary market risk exposure
is interest rate risk. A key element in the process of managing market risk
involves oversight by senior management and the Board of Directors as to the
level of such risk assumed by the Company in its balance sheet. The Board of
Directors reviews and approves risk management policies, including risk limits
and guidelines and delegates oversight functions to the Asset Liability
Management Committee (ALCO). The ALCO, consisting of senior business
and finance officers, monitors the Companys market risk exposure and as
market conditions dictate, modifies balance sheet positions.

(To be imported)

Not Applicable

As defined by the
Securities and Exchange Commission in Exchange Act Rules 13a-15(e), a
companys disclosure controls and procedures means controls and
other procedures of an issuer that are designed to ensure that information
required to be disclosed by the issuer in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the Commissions rules and forms.

As of December 31, 2004
(the Evaluation Date), the Companys Chief Executive Officer
and Chief Financial Officer have evaluated the effectiveness of the
Companys disclosure controls and procedures as defined in the Exchange Act
Rules. Based on their evaluation, the Companys Chief Executive Officer and
Chief Financial Officer have concluded that the Companys disclosure
controls and procedures are sufficiently effective to ensure that material
information relating to the Company and required to be disclosed by the Company
in the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
Commissions rules and forms.

Subsequent to the
Evaluation Date, there have been no significant changes in the Companys
internal controls or in other factors that could significantly affect these
controls.

Not Applicable

---

Included under the heading
Information Concerning Nominees and Directors in the Companys
Proxy Statement dated April 8, 2005 and incorporated by reference herein.

The Companys Board of
Directors has adopted a Code of Ethics that applies to the Companys
principal executive officer, principal financial officer, principal accounting
officer, or persons performing similar functions. A copy of this Code of Ethics
can be found at the Companys internet website at www.firstsecuritybk.com.
The Company intends to disclose any amendments to its Code of Ethics, and any
waiver from a provision of the Code of Ethics granted to the Companys
principal executive officer, principal financial officer, principal accounting
officer, or persons performing similar functions, on the Companys internet
website within five business days following such amendment or waiver. The
information contained on or connected to the Companys internet website is
not incorporated by reference into this Form 10-K and should not be considered
part of this or any other report that we file with or furnish to the SEC.

Included under the heading
Executive Compensation in the Companys Proxy Statement dated
April 8, 2005 and incorporated by reference herein.

Included under the heading
Security Ownership of Certain Beneficial Owners and Management in
the Companys Proxy Statement dated April 8, 2005 and incorporated by
reference herein.

Included under the heading
Certain Relationship and Related Transactions in the Companys
Proxy Statement dated April 8, 2005 and incorporated by reference herein.

Included under the heading
Independent Public Accountants and Fees in the Companys Proxy
Statement dated April 8, 2005 and incorporated by reference herein.

The following financial
statements included under the heading Financial Statements and
Supplementary Data are included in this report:

(a)   Independent Auditors' Report

None.

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`SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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


Date: March 30, 2005                By   /s/ Frank West
                                       -------------------------------------------
                                          Frank West, Chief Executive Officer

Date: March 30, 2005                By   /s/ Connie Hawkins
                                       -------------------------------------------
                                          Connie Hawkins, Chief Financial Officer`

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`SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the
following  persons on behalf of the Registrant and in the capacities and on the dates indicated:



DATE:    March 30, 2005
       -----------------------
                               /s/ Larry Pratt              , Director


DATE:    March 30, 2005
       -----------------------
                               /s/ Frank West               , Director


DATE:    March 30, 2005
       -----------------------
                               /s/ John Mothershed          , Director


DATE:    March 30, 2005
       -----------------------
                               /s/ Joe Brown                , Director


DATE:    March 30, 2005
       -----------------------
                               /s/ Ben Smith                , Director


DATE:    March 30, 2005
       -----------------------
                               /s/ G. E. McKittrick         , Director


DATE:    March 30, 2005
       -----------------------
                               /s/ Will Hays                , Director


DATE:    March 30, 2005
       -----------------------
                               /s/ Steve Ballard            , Director


DATE:    March 30, 2005
       -----------------------
                               /s/ Tony Jones               , Director`

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`EXHIBIT INDEX

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
         Financial Statements and Schedules
         The following Consolidated Financial Statements of Security Capital Corporation are included in Item 8
         of this report:
         Consolidated Statements of Income--Years ended December 31, 2004, 2003, and 2002
         Consolidated Balance Sheets--December 31, 2004 and 2003
         Consolidated Statements of Shareholders' Equity--Years ended December 31, 2004, 2003, and 20021
         Consolidated Statements of Cash Flows--Years ended December 31, 2004, 2003, and 2002
         Notes to Consolidated Financial Statements
All other schedules to the Consolidated Financial Statements stipulated by Article 9 of Regulation S-X and all
other schedules to the financial statements of the registrant required by Article 5 of Regulation S-X are not
required under the related instructions or are inapplicable and, therefore, have been omitted.

     31.1     Certification of Annual Report on Form 10-K pursuant to Rule 13a-14(a) by Chief Executive Officer
                  and President
     31.2     Certification of Annual Report on Form 10-K pursuant to Rule 13a-14(a) by Chief
              Financial Officer, Cashier and Executive Vice-President.

     32.0     Certification of Annual Report on Form 10-K pursuant to 18 U. S. C. Section 1350 and Rule 13a-14(b)`

---

`REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Shareholders
Security Capital Corporation


We have audited the accompanying  consolidated  balance sheets of Security Capital  Corporation and subsidiaries as
of December 31, 2004 and 2003, and the related consolidated  statements of income,  changes in shareholders' equity
and cash flows for each of the three years in the period ended  December 31,  2004. These financial  statements are
the  responsibility  of the  Corporation's  management.  Our  responsibility  is to  express  an  opinion  on these
financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company  Accounting  Oversight Board (United
States).  Those standards require that we plan and perform the audit to obtain  reasonable  assurance about whether
the  financial  statements  are free of  material  misstatement.  An audit  includes  examining,  on a test  basis,
evidence  supporting the amounts and  disclosures  in the financial  statements.  An audit also includes  assessing
the accounting  principles  used and  significant  estimates made by management,  as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our  opinion,  the  financial  statements  referred to above,  present  fairly,  in all material  respects,  the
consolidated  financial  position of Security  Capital  Corporation and  subsidiaries  as of December 31,  2004 and
2003,  and the  consolidated  results of their  operations  and their cash flows for each of the three years in the
period ended December 31, 2004, in conformity with accounting  principles  generally  accepted in the United States
of America.


                                                                        /s/ T. E. LOTT & COMPANY


Columbus, Mississippi
January 19, 2005`