ex99142313.htm
Exhibit 99.1
News Release
SECURITY FEDERAL CORPORATION ANNOUNCES EARNINGS INCREASE
FOR THE QUARTER ENDED MARCH 31, 2013
Aiken, South Carolina (April 22, 2013) - Security Federal Corporation (“Company”) (OTCBB:SFDL), the holding company for Security Federal Bank (“Bank”), today announced results for the first quarter of its fiscal year ending December 31, 2013. The Company reported net income available to common shareholders of $561,000 or $0.19 per common share (basic) for the quarter ended March 31, 2013, an increase of $241,000 or 75.3% compared to net income available to common shareholders of $320,000 or $0.11 per common share (basic) for the quarter ended March 31, 2012. The increase in earnings for the quarter ended March 31, 2013 is primarily a result of a decrease of $805,000 in the provision for loan losses offset slightly by a decrease of $548,000 in net interest income.
Non-performing assets, which consist of non-accrual loans and repossessed assets decreased $3.9 million or 15.5% to $21.2 million at March 31, 2013 from $25.2 million at December 31, 2012 and decreased $15.6 million from $36.8 million at March 31, 2012. Consistent with the decrease in non-performing assets, the provision for loan losses decreased $805,000 or 41.3% to $1.1 million for the quarter ended March 31, 2013 compared to $2.0 million for the same quarter in the previous year. Management closely monitors the loan portfolio on an ongoing basis to proactively identify any potential problem loans. The allowance for loan losses represented 2.83% of total loans held for investment at March 31, 2013 and 2.80% of total loans held for investment at December 31, 2012.
For the three months ended March 31, 2013, net interest margin decreased 14 basis points to 2.79% from 2.93% for the same quarter in 2012. As a result, net interest income decreased $548,000 or 8.9% to $5.6 million for the three months ended March 31, 2013, compared to $6.1 million for the three months ended March 31, 2012.
Non-interest income increased $331,000 or 20.5% to $1.9 million for the quarter ended March 31, 2013 from $1.6 million for the comparable quarter in 2012 primarily due to an increase in income related to an award the Bank received in recognition of its commitment to community development. During the quarter ended March 31, 2013, the Company recognized $416,000 in grant income in connection with this reward. The Company did not recognize any grant income during the quarter ended March 31, 2012.
Non-interest expense increased $388,000 or 7.6% to $5.5 million for the quarter ended March 31, 2013 from $5.1 million for the comparable quarter in 2012. The increase was primarily the result of a prepayment penalty of $153,000 the Company incurred for paying down Federal Home Loan Bank (“FHLB”) advances during the three months ended March 31, 2013. As part of the Company’s strategy, management elected to replace some higher rate advances with lower rate callable certificates of deposit.
Total assets at March 31, 2013 were $875.7 million compared to $890.4 million at December 31, 2012, a decrease of $14.6 million or 1.6% for the three month period. Net loans receivable, net decreased $14.7 million or 3.7% to $383.0 million at March 31, 2013 from $397.7 million at December 31, 2012 due to decreased loan demand. Total deposits decreased $1.8 million or 0.3% to $674.5 million at March 31, 2013 compared to $676.3 million at December 31, 2012. FHLB advances, other borrowings, convertible senior debentures and subordinated debentures decreased $12.0 million or 9.5% to $113.8 million at March 31, 2013 from $125.8 million at December 31, 2012.
Security Federal Bank has 13 full service branch locations in Aiken, Clearwater, Graniteville, Langley, Lexington, North Augusta, Wagener, Columbia and West Columbia, South Carolina 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.
For additional information contact Roy Lindburg, Chief Financial Officer, at (803) 641-3070
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, 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; regulatory and accounting changes; 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-KT for the fiscal year ended December 31, 2012. 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.
SECURITY FEDERAL CORPORATION
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UNAUDITED CONSOLIDATED FINANCIAL HIGHLIGHTS
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(In Thousands, except for Earnings per Share and Ratios)
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INCOME STATEMENT HIGHLIGHTS
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For the quarter ended March 31,
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2013
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2012
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Total interest income
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$7,704
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$8,952
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Total interest expense
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2,114
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2,814
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Net interest income
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5,590
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6,138
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Provision for loan losses
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1,145
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1,950
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Net interest income after the provision
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for loan losses
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4,445
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4,188
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Non-interest income
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1,945
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1,614
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Non-interest expense
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5,513
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5,125
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Income before income taxes
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877
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677
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Provision for income taxes
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206
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247
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Net income
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$671
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$430
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Preferred stock dividends and accretion
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of preferred stock to redemption value
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110
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110
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Net income available to common shareholders
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$561
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$320
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Earnings per common share (basic)
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$0.19
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$0.11
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BALANCE SHEET HIGHLIGHTS
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March 31,
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December 31,
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%
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2013
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2012
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Change
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Total assets
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$875,721
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$890,355
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-1.6%
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Cash and cash equivalents
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10,391
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7,904
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31.5%
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Total loans receivable, net
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383,017
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397,706
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-3.7%
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Investment and mortgage-backed securities
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429,598
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430,988
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-0.3%
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Deposits
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674,526
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676,339
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-0.3%
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Borrowings
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113,798
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125,813
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-9.5%
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Shareholders' equity
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81,757
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82,592
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-1.0%
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Book value per common share
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$20.16
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$20.45
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-1.4%
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Total risk based capital ratio (1)
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21.31%
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20.77%
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-5.8%
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Non performing assets
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21,248
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25,159
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-15.5%
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Non performing assets to total assets
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2.43%
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2.83%
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-14.1%
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Allowance as a percentage of gross loans, held for
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investment
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2.83%
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2.80%
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1.1%
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(1)- This ratio is calculated using Bank only information and not consolidated information.
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