AIKEN, S.C. -- (Business Wire)
Security Federal Corporation (“Company”) (OTCBB:SFDL), the holding
company for Security Federal Bank (“Bank”), today announced earnings for
the quarter and six month periods ended June 30, 2014. The Company
reported net income available to common shareholders of $1.4 million or
$0.46 per common share (basic) for the quarter ended June 30, 2014, an
increase of $598,000 or 77.8% compared to net income available to common
shareholders of $769,000 or $0.26 per common share (basic) for the
quarter ended June 30, 2013. For the six months ended June 30, 2014, net
income available to common shareholders increased $1.2 million or 92.4%
to $2.6 million or $0.87 per common share (basic), compared to net
income available to common shareholders of $1.3 million or $0.45 per
common share (basic) for the same period in 2013. The increases in
earnings for the quarter and six month periods are primarily a result of
increases in net interest income combined with decreases in the
provision for loan losses. These factors were offset slightly by a
decrease in non-interest income in both periods.
Net interest spread increased 27 basis points to 3.05% for the quarter
ended June 30, 2014 and increased 20 basis points to 2.93% for the six
months ended June 30, 2014 when compared to the same periods in 2013.
The improvement in net interest spread was achieved through lower cost
of funds as total interest expense decreased 23.1% and 24.9% for the
quarter and six month periods ended June 30, 2014, respectively,
compared the same periods in the prior year. The decrease in interest
expense was partially offset by slightly lower interest income.
Consistent with the increase in interest spread, net interest income
increased $409,000 or 7.1% to $6.1 million for the quarter ended June
30, 2014, compared to $5.7 million for the quarter ended June 30, 2013.
Net interest income increased $462,000 or 4.1% to $11.8 million for the
six months ended June 30, 2014 compared to $11.3 million for the six
months ended June 30, 2013.
The provision for loan losses declined $800,000 or 88.9% to $100,000 for
the second quarter of 2014 from $900,000 for the second quarter of 2013.
Net charge-offs declined $164,000 or 16.5% to $834,000 for the second
quarter of 2014 from $998,000 for the comparable quarter in 2013, with
the ratio of net charge-offs to gross loans decreasing to 0.94% in the
second quarter of 2014 from 1.05% in the same quarter one year ago. Net
charge-offs for the six months ended June 30, 2014 were $1.3 million, a
decline of $1.1 million or 43.6% compared to $2.4 million for the
comparable period in 2013, with the ratio of net charge-offs to gross
loans decreasing to 0.75% for the six months ended June 30, 2014 from
1.24% for the same period one year ago. The allowance for loan losses
represented 342.6% of annualized net charge-offs during the six months
ended June 30, 2014 compared to 233.6% of annualized net charge-offs
during the comparable period in 2013.
Non-interest income decreased $411,000 or 23.6% to $1.3 million for the
quarter ended June 30, 2014 from $1.7 million for the comparable quarter
in 2013. Non-interest income for the six-months ended June 30, 2014
decreased $820,000 or 22.2% to $2.9 million compared to $3.7 million for
the same period in 2013. The decreases in both periods were the result
of a decrease in gain on sale of investments combined with a decrease in
grant income from CDFI programs. For the quarter ended June 30, 2014 the
loss on sale of investments was $40,000, a decrease of $409,000 or
110.7% from a gain of $370,000 for the same period in 2013. For the six
months ended June 30, 2014, gain on sale of investments decreased
$709,000 or 94.1% to $45,000. Grant income decreased $336,000 or 52.9%
during the same period.
Non-interest expense decreased $75,000 or 1.4% to $5.3 million for the
quarter ended June 30, 2014 from $5.4 million for the comparable quarter
in 2013. For the six months ended June 30, 2014, non-interest expense
decreased $262,000 or 2.4% to $10.6 million, compared to $10.9 million
for the same period in 2013. The decreases in both periods were
primarily the result of a decrease in costs associated with other real
estate owned combined with a decrease in prepayment penalties incurred
for paying down Federal Home Loan Bank advances. Net costs associated
with other real estate owned decreased $87,000 or 25.5% and $214,000 or
29.0%, respectively for the quarter and six month periods ended June 30,
2014 when compared to the same periods in the prior year. The Company
incurred prepayment penalties of $238,000 for paying down Federal Home
Loan Bank advances during the six months ended June 30, 2013 compared to
zero for the same period in 2014.
Total assets at June 30, 2014 were $844.3 million compared to $849.2
million at December 31, 2013, a decrease of $4.9 million or 0.6% for the
six month period. Net loans receivable decreased $12.3 million or 3.4%
to $346.6 million at June 30, 2014 from $358.9 million at December 31,
2013 due to decreased loan demand. Total deposits decreased $273,000 to
$658.4 million at June 30, 2014 compared to $658.7 million at December
31, 2013. FHLB advances, other borrowings, convertible senior debentures
and subordinated debentures decreased $9.2 million or 8.6% to $97.8
million at June 30, 2014 from $107.0 million at December 31, 2013.
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 Jessica Cummins, 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, 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-K for the fiscal year
ended December 31, 2013.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 |
UNAUDITED CONSOLIDATED FINANCIAL HIGHLIGHTS |
(In Thousands, except for Earnings per Share and Ratios)
|
|
| |
| |
| |
| |
| | | | | | | |
|
|
| INCOME STATEMENT HIGHLIGHTS |
| | | | | | | |
|
| |
Quarter Ended June 30,
| |
Six Months Ended June 30,
|
| |
2014
|
|
2013
| |
2014
|
|
2013
|
Total interest income
| |
$7,637
| | |
$7,680
| | |
$14,830
| | |
$15,384
|
| | | | | | | |
|
Total interest expense
| |
1,507
|
|
|
1,959
|
| |
3,057
|
|
|
4,073
|
| | | | | | | |
|
Net interest income
| |
6,130
| | |
5,721
| | |
11,773
| | |
11,311
|
| | | | | | | |
|
Provision for loan losses
| |
100
|
|
|
900
|
| |
200
|
|
|
2,045
|
| | | | | | | |
|
Net interest income after
| | | | | | | | |
provision for loan losses
| |
6,030
| | |
4,821
| | |
11,573
| | |
9,266
|
| | | | | | | |
|
Non-interest income
| |
1,332
| | |
1,743
| | |
2,868
| | |
3,688
|
| | | | | | | |
|
Non-interest expense
| |
5,317
|
|
|
5,392
|
| |
10,643
|
|
|
10,905
|
| | | | | | | |
|
Income before income taxes
| |
2,045
| | |
1,172
| | |
3,798
| | |
2,049
|
| | | | | | | |
|
Provision for income taxes
| |
568
|
|
|
293
|
| |
1,019
|
|
|
499
|
| | | | | | | |
|
Net income
| |
$1,477
|
|
|
$879
|
| |
$2,779
|
|
|
$1,550
|
| | | | | | | |
|
Preferred stock dividends
| |
110
| | |
110
| | |
220
| | |
220
|
| | | | | | | |
|
Net income available to common
| | | | | | | | |
Shareholders
| |
$1,367
|
|
|
$769
|
| |
$2,559
|
|
|
$1,330
|
| | | | | | | |
|
Earnings per common share (basic)
| |
$0.46
|
|
|
$0.26
|
| |
$0.87
|
|
|
$0.45
|
| | | | | | | |
|
| | | | | | | |
|
| | BALANCE SHEET HIGHLIGHTS |
| | | | | | | |
|
| |
June 30, 2014
| |
December 31, 2013
| |
%
| | |
| | | | | | | |
|
Total assets
| |
$844,322
| | |
$849,248
| | |
-0.6
|
%
| | |
| | | | | | | |
|
Cash and cash equivalents
| |
12,531
| | |
7,630
| | |
64.2
|
%
| | |
| | | | | | | |
|
Total loans receivable, net
| |
346,605
| | |
358,917
| | |
-3.4
|
%
| | |
| | | | | | | |
|
Investment & mortgage-backed securities
| |
436,811
| | |
431,003
| | |
1.3
|
%
| | |
| | | | | | | |
|
Deposits
| |
658,424
| | |
658,697
| | |
0.0
|
%
| | |
| | | | | | | |
|
Borrowings
| |
97,750
| | |
106,982
| | |
-8.6
|
%
| | |
| | | | | | | |
|
Shareholders' equity
| |
84,502
| | |
77,990
| | |
8.3
|
%
| | |
| | | | | | | |
|
Book value per share
| |
$21.23
| | |
$19.02
| | |
11.6
|
%
| | |
| | | | | | | |
|
Total risk based capital ratio (1)
| |
23.1
|
%
| |
21.8
|
%
| |
5.8
|
%
| | |
| | | | | | | |
|
Non performing assets
| |
19,613
| | |
13,960
| | |
40.5
|
%
| | |
| | | | | | | |
|
Non performing assets to total assets
| |
2.32
|
%
| |
1.64
|
%
| |
41.5
|
%
| | |
| | | | | | | |
|
Allowance as a percentage of gross loans, held for investment
| |
2.57
|
%
| |
2.78
|
%
| |
-7.6
|
%
| | |
| | | | | | | |
|
(1)- This ratio is calculated using Bank only information and not
consolidated information
|
Contacts:
Security Federal Corporation
Jessica Cummins, Chief Financial
Officer, 803-641-3000
Source: Security Federal Corporation
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