Security Federal Corp 8-K, filed May 3, 2021
Security Federal Corp (SFDL)
8-K
2021-05-03
For: 2021-05-03
View Original
Added on
April 11, 2026
About this 8-K
Security Federal Corp filed this 8-K on May 3, 2021.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
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UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
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Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): May
3, 2021
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SECURITY FEDERAL CORPORATION
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(Exact name of registrant as specified in its charter)
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South Carolina
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000-16120
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57-0858504
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(State or other jurisdiction
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(Commission
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(IRS Employer
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of incorporation)
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File Number)
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Identification No.)
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238 Richland Avenue NW, Aiken, South Carolina
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29801
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number (including area code): (803) 641-3000
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions.
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[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
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Item 2.02 Results of Operations and Financial Condition
On May 3, 2021, Security Federal Corporation issued its earnings release for the quarter ended March 31, 2021. A copy of the earnings
release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, hereunto duly authorized.
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SECURITY FEDERAL CORPORATION
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Date: May 3, 2021
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By:
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/s/ Darrell Rains |
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Darrell Rains
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Chief Financial Officer
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Exhibit 99.1
NEWS RELEASE
SECURITY FEDERAL CORPORATION ANNOUNCES INCREASED FIRST QUARTER EARNINGS
Aiken, South Carolina (May 3, 2021) - Security Federal Corporation (“Company”) (OTCBB: SFDL), the holding company for Security Federal Bank (“Bank”), today
announced earnings results for the quarter ended March 31, 2021. Net income increased to $3.2 million or $0.98 per common share (basic) for the quarter ended March 31, 2021 compared to $1.1 million or $0.34 per common share (basic) for the first
quarter of 2020. The $2.1 million increase in net income was primarily the result of decreases in interest expense and loan loss provision expense during the first quarter of 2021.
First Quarter Financial Highlights
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Total interest income was $9.1 million for the first quarters of both 2021 and 2020, while interest expense decreased $1.1
million or 51.5% to $1.1 million for the quarter ended March 31, 2021
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Non-interest income and expense remained flat at $2.8 million and $7.6 million, respectively, for the quarters ended March 31, 2021 and 2020
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Average interest earning assets grew $167 million to $1.1 billion at March 31, 2021 compared to $926 million at March 31, 2020
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Average interest bearing liabilities increased $60.1 million to $868.9 million at March 31, 2021 from $808.8 million at March 31, 2020
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Quarter Ended
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(Dollars in Thousands, except for Earnings per Share)
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3/31/2021
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3/31/2020
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Total interest income
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$ 9,097
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$ 9,095
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Total interest expense
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1,077
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2,219
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Net interest income
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8,020
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6,876
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Provision for loan losses
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(870)
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700
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Net interest income after provision for loan losses
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8,890
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6,176
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Non-interest income
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2,774
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2,796
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Non-interest expense
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7,610
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7,644
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Income before income taxes
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4,054
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1,328
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Provision for income taxes
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875
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264
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Net income
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$ 3,179
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$ 1,064
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Earnings per common share (basic)
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$ 0.98
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$ 0.34
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Credit Quality Highlights
We had a negative provision for loan losses of $870,000 for the first quarter of 2021, compared to provision expense of $700,000 for the first quarter of
2020. The negative provision for the first quarter of 2021 resulted from a reduction in qualitative adjustment factors related to improvement in the economic and business conditions at both the national and regional levels as of March 31, 2021.
Other credit quality highlights are included in the tables below.
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Quarter Ended
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Dollars in thousands
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3/31/2021
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3/31/2020
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Provision for loan losses
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$ (870)
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$ 700
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Net charge-offs
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$ 26
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$ 54
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At Period End (dollars in thousands):
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3/31/2021
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12/31/2020
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3/31/2020
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Non-performing assets
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$ 3,861
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$ 3,624
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$ 4,443
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Non-performing assets to gross loans
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0.75%
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0.75%
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0.96%
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Allowance for loan losses
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$ 11,967
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$ 12,843
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$ 9,872
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Allowance to gross loans
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2.33%
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2.64%
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2.13%
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Balance Sheet Highlights and Capital Management
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Total assets increased $7.7 million during the first quarter of 2021 and $149.6 million since the first quarter of 2020 to $1.2 billion at March
31, 2021
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Net loans receivable increased $29.6 million during the first quarter of 2021 and $48.8 million since the first quarter of 2020 to $508.8 million
at March 31, 2021, primarily due to originations of Paycheck Protection Program (“PPP”) loans
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Investment and mortgage-backed securities decreased $21.5 million, or 3.5%, during the first quarter to $586.1 million at March 31, 2021,
primarily due to principal pay downs received and maturities of investment and mortgage-backed securities
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Total deposits increased $51.7 million to $969.8 million at March 31, 2021 from $918.1 million at December 31, 2020, primarily due to PPP funds
deposited and an increase in commercial checking accounts
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Dollars in thousands (except per share amounts)
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3/31/2021
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12/31/2020
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3/31/2020
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Total assets
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$ 1,179,421
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$ 1,171,710
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$ 1,029,774
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Cash and cash equivalents
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19,105
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18,506
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15,462
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Total loans receivable, net *
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508,789
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479,167
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459,967
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Investment and mortgage-backed securities
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586,073
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607,579
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487,611
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Deposits
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969,802
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918,096
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776,000
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Borrowings
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90,652
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131,972
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147,830
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Shareholders' equity
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109,261
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111,906
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96,262
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Book value per share
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$ 33.59
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$ 34.40
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$ 29.59
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Total risk based capital to risk weighted assets (1)
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19.67%
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19.89%
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17.33%
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CET1 capital to risk weighted assets (1)
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18.42%
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18.63%
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16.08%
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Tier 1 leverage capital ratio (1)
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9.80%
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9.76%
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10.30%
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* Includes PPP loans of $60.2 million and $47.1 million at 3/31/2021 and 12/31/2020, respectively.
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(1)- Ratio is calculated using Bank only information and not consolidated information
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Security Federal has 17 full service branches located in Aiken, Ballentine, Clearwater, Columbia, Graniteville, Langley, Lexington, North Augusta, Ridge
Spring, Wagener and West Columbia, South Carolina and Augusta and Evans, Georgia. A full range of financial services, including trust and investments, are provided by the Bank and insurance services are provided by the Bank’s wholly owned subsidiary,
Security Federal Insurance, Inc. The Bank’s newest branch, located in Augusta, Georgia, is under construction but scheduled to open later this year. It will be a full-service branch offering depository banking as well as commercial and consumer
lending.
For additional information contact Darrell Rains, Chief Financial Officer, at (803) 641-3000.
Forward-looking statements:
Certain matters discussed in this press release may contain forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements relate to, among other things, expectations of the business environment in which the Company operates, projections of future performance, perceived opportunities in the market,
potential future credit experience, and statements regarding the Company’s mission and vision. These forward-looking statements are based upon current management expectations and may, therefore, involve risks and uncertainties. The Company’s actual
results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements as a result of a wide variety or range of factors including, but not limited to: the effect of the COVID-19
pandemic, including on the Company’s credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties resulting from the COVID-19 pandemic, such as the extent and duration of
the impact on public health, the U.S. and global economies, and consumer and corporate customers, including economic activity, employment levels and market liquidity; interest rate fluctuations; economic conditions in the Company’s primary market
area; demand for residential, commercial business and commercial real estate, consumer, and other types of loans; success of new products; competitive conditions between banks and non-bank financial service providers; legislative or regulatory
changes that adversely affect the Company’s business including changes in regulatory policies and principles, and changes related to the Basel III requirements, the impact of the effect of the Dodd-Frank Wall Street Reform and Consumer Protection Act
and the implementing regulations, including the interpretation of regulatory capital or other rules; the ability to attract and retain deposits; the availability of resources to address changes in laws, rules, or regulations or to respond to
regulatory actions; adverse changes in the securities markets; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board, including additional guidance
and interpretation on accounting issues and details of the implementation of new accounting methods; technology factors affecting operations; pricing of products and services; and other risks detailed in the Company’s reports filed with the
Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2020. Accordingly, these factors should be considered in evaluating forward-looking statements, and undue reliance should not be
placed on such statements. The Company undertakes no responsibility to update or revise any forward-looking statement.