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): October 27, 2006
SECURITY FEDERAL CORPORATION
(Exact name of registrant as specified in its charter)
South Carolina 0-16120 57-0858504
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1705 Whiskey Road South, Aiken, South Carolina 29801
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(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))
Item 2.02 Results of Operations and Financial Condition
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On October 27, 2006, Security Federal Corporation issued its earnings release
for the quarter ended September 30, 2006. A copy of the earnings release is
attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
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(c) Exhibits
99.1 Press Release of Security Federal Corporation dated October 27,
2006.
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.
SECURITY FEDERAL CORPORATION
Date: October 27, 2006 By:/s/Roy G. Lindburg
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Roy G. Lindburg
Treasurer and Chief Financial Officer
Exhibit 99.1
News Release
SECURITY FEDERAL CORPORATION ANNOUNCES INCREASE IN
SECOND QUARTER EARNINGS
Aiken, South Carolina (October 27, 2006) - Security Federal Corporation
("Company") (OTCBB:SFDL.OB), the holding company of Security Federal Bank,
today announced earnings for the second quarter of its fiscal year ending
March 31, 2007. The Company reported net income of $1.0 million or $0.39 per
share (basic) for the three months ending September 30, 2006, an 8.14%
increase from net income of $950,000 or $0.38 per share (basic) for the three
months ended September 30, 2005. For the six months ended September 30, 2006,
net income was $2.0 million or $0.80 per share (basic) a 9.07% increase from
$1.9 million or $0.74 per share (basic) for the six months ended September 30,
2005. The increase in quarterly earnings is the result of a $351,000 increase
in net interest income and a $300,000 increase in non-interest income offset
partially by a $558,000 increase in non-interest expense. For the six months
ending September 30, 2006, the increase in earnings is the result of a
$790,000 increase in net interest income and a $410,000 increase in
non-interest income offset partially by a $1.0 million increase in
non-interest expense.
Total assets at September 30, 2006 were $684.7 million compared to $658.7
million at March 31, 2006, an increase of $26.0 million or 3.95% for the
six-month period. Net loans receivable increased $31.4 million or 8.37% to
$406.5 million at September 30, 2006 from $375.1 million at March 31, 2006.
Total deposits increased $7.8 million or 1.64% to $487.1 million at September
30, 2006 compared to $479.2 million at March 31, 2006. Federal Home Loan Bank
advances, other borrowings, and junior subordinated debentures increased $13.2
million or 9.55% to $151.9 million at September 30, 2006 from $138.7 million
at March 31, 2006.
During the three months ended September 30, 2006, the Company completed a $5.0
million trust preferred securities offering. The offering provides capital
that will allow the Company to continue its growth plan. Also, the Company
acquired land near Ballentine, South Carolina to further expand its branch
network.
Security Federal Bank has eleven full service branch locations in Aiken,
Clearwater, Graniteville, Langley, Lexington, North Augusta, Wagener, and West
Columbia, South Carolina. Additional financial services are provided by three
of the Bank's wholly owned subsidiaries, Security Federal Insurance, Inc.,
Security Federal Investments, Inc., and Security Federal Trust, 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-K for the fiscal year ended March 31, 2006.
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
INCOME STATEMENT HIGHLIGHTS
(In Thousands, except for Earnings per Share)
Quarter Ended Six Months Ended
September 30, September 30,
2006 2005 2006 2005
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Total interest income $10,199 $7,836 $19,824 $15,248
Total interest expense 5,744 3,784 10,959 7,273
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Net interest income 4,455 4,052 8,865 7,975
Provision for loan losses 150 165 300 330
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Net interest income after
provision for loan losses 4,305 3,887 8,565 7,645
Non-interest income 996 749 1,749 1,439
Non-interest expense 3,729 3,172 7,173 6,168
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Income before income
taxes 1,572 1,464 3,141 2,916
Provision for income
taxes 545 514 1,092 1,037
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Net income $1,027 $950 $2,049 $1,879
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Earnings per share
(basic) $0.39 $0.38 $0.80 $0.74
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BALANCE SHEET HIGHLIGHTS
(In Thousands, except for Book Value per Share)
September 30, 2006 March 31, 2006
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Total assets $684,714 $658,678
Cash and cash equivalents 8,333 14,351
Total loans receivable, net 406,504 375,109
Investment and mortgage-
backed securities 233,477 238,433
Deposits 487,065 479,229
Borrowings 151,896 138,653
Shareholders' equity 40,417 37,602
Book value per share $15.44 $14.82