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): April 25, 2007 SECURITY FEDERAL CORPORATION (Exact name of registrant as specified in its charter) South Carolina 0-16120 57-0858504 - ---------------------------- ------------------ -------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 1705 Whiskey Road South, 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)) Item 2.02 Results of Operations and Financial Condition - -------------------------------------------------------- On April 25, 2007, Security Federal Corporation issued its earnings release for the fourth quarter and fiscal year ended March 31, 2007. 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 - -------------------------------------------- (c) Exhibits 99.1 Press Release of Security Federal Corporation dated April 25, 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: April 25, 2007 By:/s/Roy G. Lindburg ----------------------------- Roy G. Lindburg Treasurer and Chief Financial Officer Exhibit 99.1 Security Federal Corporation Announces Increase in Annual Earnings AIKEN, S.C.--(BUSINESS WIRE)--Security Federal Corporation (OTCBB:SFDL - News), the holding company of Security Federal Bank, today announced earnings for its fiscal year and for the fourth quarter of its fiscal year both ending March 31, 2007. The Company reported net income of $4.1 million or $1.59 per share (basic) for its fiscal year ending March 31, 2007, an 8.2% increase from net income of $3.8 million or $1.51 per share (basic) for its prior fiscal year ending March 31, 2006. This increase in net income is primarily a result of a $1.5 million or 9.1% increase in net interest income and a $1.2 million or 46.8% increase in non-interest income offset partially by a $2.1 million or 16.4% increase in general and administrative expenses for its fiscal year ending March 31, 2007 when compared to its fiscal year ending March 31, 2006. For the quarter ending March 31, 2007, net income was $1.1 million or $.42 per share (basic), a 12.8% increase from net income of $976,000 or $.38 per share (basic) for the quarter ending March 31, 2006. This increase in net income is primarily a result of a $577,000 or 91.5% increase in non-interest income and a $420,000 or 9.6% increase in net interest income partially offset by a $513,000 or 14.0% increase in general and administrative expenses. Total assets at March 31, 2007 were $738.1 million compared to $658.7 million at March 31, 2006, an increase of 12.1% for the year. Net loans receivable increased $60.9 million or 16.2% to $436.0 million at March 31, 2007 from $375.1 million at March 31, 2006. Total deposits were $523.7 million at March 31, 2007 compared to $479.2 million at March 31, 2006, and increase of 9.3%. Federal Home Loan Bank Advances, other borrowings, and subordinated debentures increased $27.6 million or 19.9% to $166.3 million at March 31, 2007 from $138.7 million at March 31, 2006. Security Federal Bank has eleven full service branches located in Aiken, Clearwater, Graniteville, Langley, Lexington, North Augusta, Wagener, and West Columbia, South Carolina. Additional financial services are offered through the Bank's three 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 non0-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 ending March 31, 2006, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. 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 Twelve Months Ended March 31, March 31, 2007 2006 2007 2006 ------------------------ ------------------- Total interest income $11,387 $8,945 $42,109 $32,617 Total interest expense 6,606 4,584 23,944 15,969 ------------------------ ------------------- Net interest income 4,781 4,361 18,165 16,648 Provision for loan losses 150 165 600 660 ------------------------ ------------------- Net interest income after provision for loan losses 4,631 4,196 17,565 15,988 Gain on sale of loans 165 93 461 467 Service fees on deposit accounts 374 257 1,240 1,132 Other income 669 281 2,159 1,031 General and administrative expenses 4,168 3,655 15,157 13,027 ------------------------ ------------------- Income before income taxes 1,671 1,172 6,268 5,591 Provision for income taxes 571 196 2,141 1,778 ------------------------ ------------------- Net income $1,100 $976 $4,127 $3,813 ======================== =================== Earnings per share $0.42 $0.38 $1.59 $1.51 ======================== =================== BALANCE SHEET HIGHLIGHTS (In Thousands, except for Book Value per Share) March 31, March 31, 2007 2006 -------------------- Total assets $738,100 $658,678 Cash and cash equivalents 13,438 14,351 Total loans receivable, net 436,038 375,109 Investment and mortgage- backed securities 249,750 238,433 Deposits 523,738 479,229 Borrowings 166,292 138,653 Shareholders' equity 42,683 37,602 Book value per share $16.36 $14.82 Contact: Security Federal Corporation Roy Lindburg, 803-641-3070 Chief Financial Officer