Security Federal Corp 8-K, filed Nov 1, 2021
Security Federal Corp (SFDL)
8-K
2021-11-01
For: 2021-11-01
View Original
Added on
April 11, 2026
About this 8-K
Security Federal Corp filed this 8-K on November 1, 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
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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):
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(Exact name of registrant as specified in its charter)
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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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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number (including area code): (
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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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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 November 1, 2021, Security Federal Corporation issued its earnings release for the quarter ended September 30, 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
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, hereunto duly authorized.
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SECURITY FEDERAL CORPORATION
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Date: November 1, 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 INCREASE IN THIRD QUARTER EARNINGS
Aiken, South Carolina (November 1, 2021) - Security Federal Corporation (“Company”) (OTCBB: SFDL), the holding company for Security Federal Bank (“Bank”),
today announced earnings and financial results for the three and nine months ended September 30, 2021.
Net income increased $3.7 million, or 412.9%, to $4.6 million, or $1.43 per common share, for the quarter ended September 30, 2021 compared to $905,000, or
$0.28 per common share, for the same quarter last year. Year to date net income increased $6.8 million or 169.6%, to $10.7 million, or $3.30 per common share, for the nine months ended September 30, 2021 compared to $4.0 million, or $1.25 per common
share, during the nine months ended September 30, 2020. The increase in net income during both periods was primarily the result of decreases in interest expense and the provision for loan losses combined with an increase in non-interest income.
Third Quarter Financial Highlights
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Net interest income increased $915,000, or 11.6%, to $8.8 million, primarily due to lower interest expense and higher interest
income from loans.
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Total non-interest income increased $1.5 million, or 51.6%, to $4.5 million, primarily due to a $1.8 million grant received during the third
quarter of 2021. The grant was awarded by the Community Development Financial Institutions (CDFI) Rapid Response Program (RRP) in order to provide certified CDFIs with resources to help counter the economic impact of COVID-19 in distressed
and underserved communities. The grant proceeds were used to fund qualified loans within the Bank’s target market areas.
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Total non-interest expense increased $363,000, or 4.7%, to $8.0 million.
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Average interest earning assets grew $89.0 million to $1.1 billion for the third quarter of 2021 compared to $1.0 billion for the same quarter
last year.
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Average interest bearing liabilities grew $30.8 million to $866.6 million compared to $835.8 million for the same quarter last year.
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Quarter Ended
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(Dollars in Thousands, except for Earnings per Share)
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9/30/2021
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9/30/2020
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Total interest income
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$ 9,668
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$ 9,339
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Total interest expense
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845
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1,431
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Net interest income
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8,823
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7,908
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Provision for loan losses
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(665)
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2,200
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Net interest income after provision for loan losses
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9,488
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5,708
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Non-interest income
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4,530
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2,988
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Non-interest expense
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8,049
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7,686
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Income before income taxes
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5,969
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1,010
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Provision for income taxes
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1,327
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105
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Net income
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$ 4,642
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$ 905
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Earnings per common share (basic)
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$ 1.43
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$ 0.28
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Year to Date (Nine Months) Comparative Financial Highlights
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Net interest income increased $2.5 million, or 11.1%, to $24.6 million, as the decline in interest expense exceeded the decline
in interest income.
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Non-interest income increased $1.4 million, or 16.3%, primarily due to increases in gain on sale of loans, trust income, ATM and check card fee
income and grant income. These increases were partially offset by a decline in net gain on sale of investments.
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Non-interest expense increased $784,000 or 3.5%, primarily due to increases in salaries expense and depreciation and maintenance of equipment.
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Average interest earning assets grew $117.6 million, or 11.8%, to $1.1 billion for the first nine months of 2021 compared to $992.7 million for
the same period in 2020.
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Average interest bearing liabilities grew $41.8 million, or 5.0%, to $869.7 million.
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Nine Months Ended
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(Dollars in Thousands, except for Earnings per Share)
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9/30/2021
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9/30/2020
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Total interest income
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$ 27,483
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$ 27,533
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Total interest expense
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2,900
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5,407
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Net interest income
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24,583
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22,126
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Provision for loan losses
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(2,270)
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3,600
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Net interest income after provision for loan losses
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26,853
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18,526
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Non-interest income
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9,991
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8,590
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Non-interest expense
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23,105
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22,321
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Income before income taxes
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13,739
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4,795
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Provision for income taxes
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2,993
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810
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Net income
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$ 10,746
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$ 3,985
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Earnings per common share (basic)
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$ 3.30
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$ 1.25
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Credit Quality Highlights
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We had a negative provision for loan losses of $2.3 million for the nine months ended September 30, 2021 compared to provision expense of $3.6
million for the nine months ended September 30, 2020. The negative provision during 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 September 30, 2021.
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Non-performing assets improved to $3.1 million at September 30, 2021 from $3.6 million and $4.0 million at December 31, 2020 and September 30,
2020, respectively.
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Allowance for loan losses as a percentage of gross loans was 2.20% at September 30, 2021 compared to 2.64% at December 31,
2020 and 2.41% at September 30, 2020.
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Quarter Ended
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Nine Months Ended
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(Dollars in thousands)
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9/30/2021
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9/30/2020
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9/30/2021
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9/30/2020
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Provision for loan losses
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$ (665)
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$ 2,200
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$ (2,270)
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$ 3,600
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Net (recoveries) charge-offs
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$ (413)
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$ 31
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$ (608)
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$ (20)
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At Period End (dollars in thousands):
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9/30/2021
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12/31/2020
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9/30/2020
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Non-performing assets
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$ 3,063
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$ 3,624
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$ 3,995
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Non-performing assets to gross loans
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0.60%
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0.75%
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0.75%
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Allowance for loan losses
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$ 11,172
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$ 12,843
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$ 12,846
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Allowance to gross loans
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2.20%
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2.64%
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2.41%
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Balance Sheet Highlights and Capital Management
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Total assets increased $58.6 million during the first nine months of 2021 to $1.2 billion at September 30, 2021.
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Net loans receivable increased $21.4 million or 4.5% since the prior year end to $500.6 million.
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Investment and mortgage-backed securities increased $42.7 million or 7.0% to $650.3 million at September 30, 2021.
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Total deposits increased $98.5 million or 10.7% during the first nine months of 2021 to $1.0 billion as a result of SBA PPP and other stimulus
funds deposited.
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Book value per share increased to $35.87 at September 30, 2021 from $34.40 at December 31, 2020 and $33.52 at September 30, 2020.
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Dollars in thousands (except per share amounts)
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9/30/2021
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12/31/2020
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9/30/2020
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Total assets
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$ 1,230,280
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$ 1,171,710
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$ 1,129,203
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Cash and cash equivalents
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13,555
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18,025
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15,607
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Total loans receivable, net *
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500,601
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479,167
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527,870
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Investment and mortgage-backed securities
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650,254
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607,579
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520,650
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Deposits
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1,016,567
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918,096
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904,792
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Borrowings
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87,138
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131,972
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105,948
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Shareholders' equity
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116,681
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111,906
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109,051
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Book value per share
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$ 35.87
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$ 34.40
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$ 33.52
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Total risk based capital ratio (1)
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20.06%
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19.89%
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19.59%
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Common equity tier one ratio (1)
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18.80%
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18.63%
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18.32%
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Tier 1 leverage capital ratio (1)
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10.20%
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9.76%
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9.71%
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* Includes PPP loans of $32.1 million, $47.1 million and $75.3 million at 9/30/2021, 12/31/2020 and 9/30/2020, 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.