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): January 23, 2007
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 January 23, 2007, Security Federal Corporation issued its earnings
release for the quarter ended December 31, 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 January 23,
2007.
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: January 23, 2007 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
THIRD QUARTER EARNINGS
Aiken, South Carolina (January 23, 2007) - Security Federal Corporation
(OTCBB:SFDL.OB), the holding company of Security Federal Bank, today announced
earnings for the third quarter of its fiscal year ending March 31, 2007. The
Company reported net income of $977,000 or $0.37 per share (basic) for the
three months ending December 31, 2006, a 2.0% increase from net income of
$958,000 or $0.38 per share (basic) for the three months ending December 31,
2005. For the nine months ending December 31, 2006, net income increased 6.7%
to $3.0 million or $1.16 per share (basic) from $2.8 million or $1.12 per
share (basic) for the nine months ending December 31, 2005. The increase in
quarterly earnings is the result of a $196,000 increase in net interest
income, a $354,000 increase in non-interest income, and a $66,000 decrease in
provision for income taxes offset partially by a $612,000 increase in
non-interest expense. For the nine months ending December 31, 2006, the
increase in earnings is the result of a $987,000 increase in net interest
income and a $764,000 increase in non-interest income offset partially by a
$1.6 million increase in non-interest expense.
Total assets at December 31, 2006 were $714.6 million compared to $658.7
million at March 31, 2006, an increase of $55.9 million or 8.5% for the
nine-month period. Net loans receivable increased $46.4 million or 12.4% to
$421.5 million at December 31, 2006 from $375.1 million at March 31, 2006.
Total deposits increased $28.4 million or 5.9% to $507.6 million at December
31, 2006 compared to $479.2 million at March 31, 2006. Federal Home Loan Bank
advances, other borrowings, and junior subordinated debentures increased $21.7
million or 15.7% to $160.4 million at December 31, 2006 from $138.7 million at
March 31, 2006.
During the three months ended December 31, 2006, the Company acquired land in
northeast Richland County to further expand its branch network. The Company
previously acquired lots in north Aiken and Ballentine, South Carolina, and in
Evans, Georgia, which it intends to use for future branches. Construction
began recently on the Evans branch facility. These additional branches will
diversify the Company's markets from primarily Aiken and Lexington Counties to
also include Richland County, South Carolina and Columbia County, Georgia. In
June 2006, the Company acquired Collier Jennings, a local insurance agency in
order to diversify its revenue base. It is believed that these expansions
will have a short-term negative impact on earnings, but should have a positive
impact on earnings over the long term.
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 Nine Months Ended
December 31, December 31,
2006 2005 2006 2005
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Total interest income $10,788 $8,324 $30,611 $23,672
Total interest expense 6,379 4,112 17,338 11,385
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Net interest income 4,409 4,212 13,273 12,287
Provision for loan losses 150 165 450 495
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Net interest income after
provision for loan losses 4,259 4,047 12,823 11,792
Non-interest income 1,014 661 2,763 1,999
Non-interest expense 3,817 3,205 10,989 9,372
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Income before income taxes 1,456 1,503 4,597 4,419
Provision for income taxes 479 545 1,571 1,582
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Net income $ 977 $ 958 $ 3,026 $ 2,837
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Earnings per share $0.37 $0.38 $1.16 $1.12
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BALANCE SHEET HIGHLIGHTS
(In Thousands, except for Book Value per Share)
December 31, March 31,
2006 2006
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Total assets $714,625 $658,678
Cash and cash equivalents 10,694 14,351
Total loans receivable, net 421,483 375,109
Investment and mortgage-
backed securities 244,477 238,433
Deposits 507,562 479,229
Borrowings 160,370 138,653
Shareholders' equity 41,568 37,602
Book value per share $15.89 $14.82