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): October 28, 2019
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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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SECURITY FEDERAL CORPORATION
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Date: October 29, 2019
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By:
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/s/ Jessica T. Cummins |
Jessica T. Cummins
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Chief Financial Officer
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•
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Net income of $2.2 million was highest in Company history
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•
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Average interest earning assets grew $78 million to $912 million at September 30, 2019
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•
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Average yield on interest earning assets increased 13 basis points to 4.25%
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•
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Total interest income increased $1.1 million, or 13.3%, to $9.6 million
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•
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Total interest expense increased $862,000 or 60.3% to $2.3 million
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•
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Net interest income increased to $7.3 million for the third quarter of 2019
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•
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Increased quarterly dividend payment to $0.10 per share
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•
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The Bank opened its 17th full service branch, located in Augusta, Georgia
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Quarter Ended September 30,
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(Dollars in Thousands, except for Earnings per Share)
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2019
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2018
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Total interest income
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$
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9,641
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$
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8,507
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Total interest expense
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2,291
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1,430
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Net interest income
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7,350
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7,077
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Provision for loan losses
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75
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150
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Net interest income after provision for loan losses
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7,275
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6,927
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Non-interest income
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2,408
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2,070
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Non-interest expense
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6,989
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6,418
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Income before income taxes
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2,694
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2,579
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Provision for income taxes
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475
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471
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Net income
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$
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2,219
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$
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2,108
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Earnings per common share (basic)
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$
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0.75
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$
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0.71
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Earnings per common share (diluted)
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$
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0.71
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$
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0.68
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•
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Net income of $6.2 million was highest year to date earnings in Company history
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•
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Net interest income increased $1.3 million, or 6.4%, to $21.7 million
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•
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Interest income increased $3.5 million, or 14.4%, to $27.8 million, while interest expense increased $2.2 million, or 56.4%, to $6.1 million.
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Nine Months Ended September 30,
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(Dollars in Thousands, except for Earnings per Share)
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2019
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2018
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Total interest income
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$
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27,801
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$
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24,309
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Total interest expense
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6,075
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3,884
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Net interest income
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21,726
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20,425
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Provision for loan losses
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175
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150
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Net interest income after provision for loan losses
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21,551
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20,275
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Non-interest income
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7,097
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5,858
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Non-interest expense
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20,975
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19,177
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Income before income taxes
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7,673
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6,956
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Provision for income taxes
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1,481
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1,298
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Net income
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$
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6,192
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$
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5,658
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Earnings per common share (basic)
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$
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2.10
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$
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1.92
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Earnings per common share (diluted)
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$
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1.98
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$
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1.82
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•
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Net charge-offs decreased $89,000, or 56.1%, to $70,000 for the third quarter of 2019 compared to $159,000 for the same period in 2018.
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•
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Provision for loan losses was $75,000 during the third quarter of 2019 compared to $150,000 for the same quarter last year.
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•
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Non-performing assets improved to $4.8 million at September 30, 2019 from $10.9 million at September 30, 2018.
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•
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Allowance for loan losses as a percentage of gross loans was 1.9% at September 30, 2019 compared to 2.0% at September 30, 2018.
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Quarter Ended
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Nine Months Ended
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Dollars in thousands
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9/30/2019
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9/30/2018
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9/30/2019
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9/30/2018
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Provision for loan losses
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$
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75
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$
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150
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$
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175
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$
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150
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Net charge-offs (recoveries)
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$
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70
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$
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159
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$
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588
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$
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(230
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)
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At Period End (dollars in thousands):
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9/30/2019
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12/31/2018
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9/30/2018
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Non-performing assets
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$
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4,786
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$
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7,771
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$
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10,856
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Non-performing assets to gross loans
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1.0
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%
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1.8
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%
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2.5
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%
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Allowance for loan losses
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$
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8,759
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$
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9,172
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$
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8,602
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Allowance to gross loans
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1.9
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%
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2.1
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%
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2.0
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%
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•
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Total assets were $991 million at September 30, 2019, an increase of $89 million, or 9.9%, from September 30, 2018.
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•
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Investment securities increased $64 million, or 16.1%, to $460 million at September 30, 2019 from $396 million at September 30, 2018.
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•
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Net loans receivable were $454 million at September 30, 2019, an increase of $30 million, or 7.0%, from one year prior. The most significant increase was in the
commercial real estate category.
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•
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Total deposits increased $64 million, or 8.5%, to $815 million at September 30, 2019 from $751 million one year prior. The most significant increases were in demand
deposits and time deposits.
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•
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Book value per share increased to $31.22 at September 30, 2019 from $26.03 at September 30, 2018.
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BALANCE SHEET HIGHLIGHTS
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Dollars in thousands
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9/30/2019
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12/31/2018
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9/30/2018
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Total assets
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$
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991,261
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$
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912,614
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$
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902,235
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Cash and cash equivalents
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$
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13,793
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$
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12,706
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$
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20,110
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Total loans receivable, net
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$
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453,641
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$
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430,054
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$
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423,980
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Investment & mortgage-backed securities
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$
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459,660
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$
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409,894
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$
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396,044
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Deposits
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$
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814,620
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$
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767,497
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$
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750,998
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Borrowings
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$
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73,988
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$
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58,310
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$
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66,771
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Shareholders' equity
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$
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92,302
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$
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80,518
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$
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76,886
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Book value per share
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$
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31.22
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$
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27.25
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$
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26.03
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Total risk based capital ratio (1)
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16.95
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%
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17.47
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%
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17.78
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%
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Common equity tier one ratio (1)
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15.70
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%
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16.21
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%
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16.53
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%
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(1)- Ratio is calculated using Bank only information and not consolidated information
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