UNITED STATES
|
||||
SECURITIES AND EXCHANGE COMMISSION
|
||||
Washington, D.C. 20549
|
||||
FORM 8-K
|
||||
CURRENT REPORT
|
||||
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
|
||||
Date of Report (Date of earliest event reported): July
31, 2020
|
||||
SECURITY FEDERAL CORPORATION
|
||||
(Exact name of registrant as specified in its charter)
|
||||
South Carolina
|
000-16120
|
57-0858504
|
||
(State or other jurisdiction
|
(Commission
|
(IRS Employer
|
||
of incorporation)
|
File Number)
|
Identification No.)
|
||
238 Richland Avenue NW, Aiken, South Carolina
|
29801
|
|||
(Address of principal executive offices)
|
(Zip Code)
|
|||
Registrant's telephone number (including area code): (803) 641-3000
|
||||
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.
|
||||
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
||||
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
||||
[ ] 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. [ ]
|
SECURITY FEDERAL CORPORATION
|
||
Date: July 31, 2020
|
By:
|
/s/Darrrell Rains |
Darrell Rains
|
||
Chief Financial Officer
|
•
|
Net interest income increased $223,000, or 3.1%, to $7.3 million
|
•
|
Total non-interest income increased $313,000, or 12.6%, to $2.8 million
|
•
|
Total non-interest expense was down $250 million, the first second quarter year-over-year decrease since 2014
|
•
|
Average interest earning assets grew $128.4 million to $1.0 billion for the second quarter of 2020 compared to $872.2 million for the same
quarter last year
|
•
|
Average interest bearing liabilities grew $96.5 million to $839 million
|
Quarter Ended
|
||
(Dollars in Thousands, except for Earnings per Share)
|
6/30/2020
|
6/30/2019
|
Total interest income
|
$ 9,098
|
$ 9,128
|
Total interest expense
|
1,756
|
2,009
|
Net interest income
|
7,342
|
7,119
|
Provision for loan losses
|
700
|
-
|
Net interest income after provision for loan losses
|
6,642
|
7,119
|
Non-interest income
|
2,806
|
2,493
|
Non-interest expense
|
6,991
|
7,241
|
Income before income taxes
|
2,457
|
2,371
|
Provision for income taxes
|
441
|
487
|
Net income
|
$ 2,016
|
$ 1,884
|
Earnings per common share (basic)
|
$ 0.62
|
$ 0.64
|
•
|
Net interest income decreased $158,000, or 1.1%, to $14.2 million, as the growth in interest expense exceeded the growth in
interest income
|
•
|
Non-interest income increased $914,000 or 19.5%
|
•
|
Non-interest expense increased $650,000 or 4.6%
|
•
|
Average interest earning assets grew $101 million, or 11.7%, to $963 million for the first half of 2020 compared to $862 million for the same
period in 2019
|
•
|
Average interest bearing liabilities grew $89 million, or 12.1%, to $824 million
|
Six Months Ended
|
|||
(Dollars in Thousands, except for Earnings per Share)
|
6/30/2020
|
|
6/30/2019
|
Total interest income
|
$ 18,194
|
|
$ 18,159
|
Total interest expense
|
3,976
|
3,783
|
|
Net interest income
|
14,218
|
|
14,376
|
Provision for loan losses
|
1,400
|
100
|
|
Net interest income after provision for loan losses
|
12,818
|
|
14,276
|
Non-interest income
|
5,602
|
4,688
|
|
Non-interest expense
|
14,635
|
|
13,985
|
Income before income taxes
|
3,785
|
4,979
|
|
Provision for income taxes
|
705
|
|
1,006
|
Net income
|
$ 3,080
|
$ 3,973
|
|
Earnings per common share (basic)
|
$ 0.97
|
|
$ 1.34
|
•
|
Year-to-date provision for loan losses was $1.4 million compared to $100,000 for the same period last year due to the increased risk of
charge-offs from loan defaults as a result of COVID-19
|
•
|
Non-performing assets improved to $4.0 million at June 30, 2020
|
•
|
Allowance for loan losses as a percentage of gross loans was 1.98% at June 30, 2020 compared to 2.01% at December 31, 2019
and 1.96% at June 30, 2019
|
Quarter Ended
|
Six Months Ended
|
|||
(Dollars in thousands)
|
6/30/2020
|
6/30/2019
|
6/30/2020
|
6/30/2019
|
Provision for loan losses
|
$ 700
|
$ -
|
$ 1,400
|
$ 100
|
Net charge-offs (recoveries)
|
$ (104)
|
$ 45
|
$ (51)
|
$ 518
|
At Period End (dollars in thousands):
|
6/30/2020
|
12/31/2019
|
6/30/2019
|
Non-performing assets
|
$ 3,995
|
$ 4,114
|
$ 5,196
|
Non-performing assets to gross loans
|
0.74%
|
0.90%
|
1.16%
|
Allowance for loan losses
|
$ 10,676
|
$ 9,226
|
$ 8,754
|
Allowance to gross loans
|
1.98%
|
2.01%
|
1.96%
|
•
|
Total assets increased $137 million during the first half of 2020 to $1.1 billion at June 30, 2020
|
•
|
Net loans receivable increased $82 million or 18.0% since the prior year end and $93 million or 21% from one year ago
|
•
|
Investment and mortgage-backed securities increased $55 million or 12.7% to $489 million
|
•
|
Total deposits increased $104 million or 13.5% to $875 million as a result of PPP funds deposited
|
•
|
Book value per share increased to $32.92 at June 30, 2020 from $31.03 at December 31, 2019
|
Dollars in thousands (except per share amounts)
|
6/30/2020
|
12/31/2019
|
6/30/2019
|
|
Total assets
|
$ 1,100,519
|
$ 963,228
|
$ 973,413
|
|
Cash and cash equivalents
|
15,341
|
12,563
|
11,019
|
|
Total loans receivable, net *
|
534,446
|
452,859
|
441,576
|
|
Investment and mortgage-backed securities
|
488,790
|
433,892
|
456,707
|
|
Deposits
|
875,186
|
771,407
|
786,449
|
|
Borrowings
|
108,308
|
90,917
|
87,653
|
|
Shareholders' equity
|
107,073
|
91,758
|
89,137
|
|
Book value per share
|
$ 32.92
|
$ 31.03
|
$ 31.16
|
|
Total risk based capital ratio (1)
|
19.6%
|
19.4%
|
17.3%
|
|
Common equity tier one ratio (1)
|
18.3%
|
18.2%
|
16.0%
|
|
* Includes PPP loans of $72.7 million at 6/30/2020
|
||||
(1)- Ratio is calculated using Bank only information and not consolidated information
|