Security Federal Corporation Announces Increase in Quarterly and Year-To-Date Earnings

Rhea-AI Summary

Security Federal Corporation (OTCID:SFDL) reported higher earnings for the quarter and six months ended June 30, 2026. Second-quarter net income available to common shareholders rose to $3.7 million, or $1.19 per share, up 55.4% from 2025, as higher net interest income and non-interest income more than offset increased provision for credit losses and modestly higher non-interest expense.

For the first six months of 2026, net income available to common shareholders increased to $6.8 million, or $2.19 per share, up 36.7% year over year. According to Security Federal, credit quality metrics remained stable, with non-performing assets at $5.9 million (0.37% of total assets) and the allowance for credit losses at $13.7 million, or 1.98% of gross loans. Total assets were $1.60 billion, common equity book value per share was $39.54, and key regulatory capital ratios at the Bank level, including a total risk-based capital ratio of 21.23% and CET1 ratio of 19.98%, remained well above typical minimum requirements.

Positive

• Q2 2026 net income to common $3.7 million, up 55.4% year over year
• Q2 2026 net interest income $12.5 million, up 10.6% from Q2 2025
• Q2 2026 non-interest income $3.2 million, up 23.7% year over year
• YTD 2026 net income to common $6.8 million, up 36.7% from 2025 period
• YTD 2026 non-interest income $6.1 million, up 21.7% year over year
• Common equity book value per share $39.54, higher than $37.74 at 12/31/2025

Negative

• Provision for credit losses Q2 2026 $240,000 versus no provision in Q2 2025
• YTD 2026 provision for credit losses $465,000 versus none in 2025 period
• YTD 2026 non-interest expense $21.1 million, up 4.5% year over year
• Total assets 6/30/2026 $1.60 billion, down from $1.63 billion at 12/31/2025

AI-generated analysis. How Rhea-AI works. Not financial advice.

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AIKEN, S.C., July 31, 2026 (GLOBE NEWSWIRE) -- Security Federal Corporation (the “Company”) (OTCID: SFDL), the holding company for Security Federal Bank (the “Bank”), today announced earnings and financial results for the three and six months ended June 30, 2026.

Second Quarter Financial Highlights

Net income available to common shareholders was $3.7 million, or $1.19 per common share, for the second quarter of 2026, an increase of $1.3 million, or 55.4% from the second quarter of 2025. The increase in net income was driven by higher net interest income (up $1.2 million, or 10.6%) and non-interest income (up $615,000, or 23.7%), which offset increased provision for credit losses (up $240,000, or 100.0%) and non-interest expense (up $181,000, or 1.7%).

	Quarter Ended
(Dollars in Thousands, except for Earnings per Share)	6/30/2026			6/30/2025
Total interest income	$	18,926		$	19,449
Total interest expense		6,417			8,137
Net interest income		12,509			11,312
Provision for credit losses		240			-
Net interest income after provision for credit losses		12,269			11,312
Non-interest income		3,210			2,595
Non-interest expense		10,542			10,361
Income before income taxes		4,937			3,546
Provision for income taxes		832			756
Net income		4,105			2,790
Preferred stock dividends		415			415
Net income available to common shareholders	$	3,690		$	2,375
Earnings per common share (basic)	$	1.19		$	0.75

Year-to-Date (Six Months) Comparative Financial Highlights

Net income available to common shareholders was $6.8 million, or $2.19 per common share, for the first six months of 2026, an increase of $1.8 million, or 36.7% from the first six months of 2025. The increase in net income was driven by higher net interest income (up $2.2 million, or 10.0%) and non-interest income (up $1.1 million, or 21.7%), which offset increased provision for credit losses (up $465,000, or 100.0%) and non-interest expense (up $900,000, or 4.5%).

	For the Six Months Ended
(Dollars in Thousands, except for Earnings per Share)	6/30/2026			6/30/2025
Total interest income	$	37,747		$	38,682
Total interest expense		12,957			16,141
Net interest income		24,790			22,541
Provision for credit losses		465			-
Net interest income after provision for credit losses		24,325			22,541
Non-interest income		6,134			5,039
Non-interest expense		21,102			20,202
Income before income taxes		9,357			7,378
Provision for income taxes		1,737			1,582
Net income		7,620			5,796
Preferred stock dividends		830			830
Net income available to common shareholders	$	6,790		$	4,966
Earnings per common share (basic)	$	2.19		$	1.56

Credit Quality

The Bank recorded a $350,000 provision for credit losses on loans and a $115,000 provision for credit losses on unfunded commitments, resulting in a total provision for credit losses of $465,000 for the first six months of 2026 compared to no provision for credit losses during the same period in 2025. The following table shows the non-performing assets and allowance for credit losses balances at the periods indicated.

At Period End (dollars in thousands):	6/30/2026		12/31/2025		6/30/2025
Non-performing assets	$	5,945	$	5,842	$	5,954
Non-performing assets to total assets		0.37%		0.36%		0.37%
Allowance for credit losses	$	13,685	$	13,529	$	14,007
Allowance for credit losses to gross loans		1.98%		1.97%		2.00%

Balance Sheet Highlights and Capital Ratios

Dollars in thousands (except per share amounts)	6/30/2026		12/31/2025		6/30/2025
Total assets	$	1,603,495	$	1,618,084	$	1,625,236
Cash and cash equivalents		84,678		75,335		142,190
Total loans receivable, net		677,710		676,182		685,501
Investment securities		750,698		776,285		707,609
Deposits		1,360,517		1,371,777		1,383,201
Borrowings		26,107		35,262		39,566
Total shareholders' equity		205,219		200,455		191,279
Common shareholders' equity		122,270		117,506		108,330
Common equity book value per share	$	39.54	$	37.74	$	34.02
Total risk based capital to risk weighted assets (1)		21.23%		20.56%		20.46%
CET1 capital to risk weighted assets (1)		19.98%		19.30%		19.20%
Tier 1 leverage capital ratio (1)		10.83%		10.18%		10.54%
(1) - Ratio is calculated using Bank only information and not consolidated information

Security Federal has 19 full-service branches located in Aiken, Ballentine, Clearwater, Columbia, Graniteville, Langley, Lexington, North Augusta, Ridge Spring, Wagener and West Columbia, South Carolina and Augusta 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 Nathan Crowe, Chief Financial Officer, at (803) 641-3000.

FAQ

How did Security Federal (SFDL) perform financially in Q2 2026?

Security Federal reported Q2 2026 net income available to common shareholders of $3.7 million, up 55.4% year over year. According to Security Federal, earnings per common share rose to $1.19, driven by higher net interest income and a 23.7% increase in non-interest income.

What were Security Federal’s year-to-date 2026 earnings compared with 2025 (SFDL)?

For the first six months of 2026, Security Federal’s net income available to common shareholders was $6.8 million, up 36.7% from 2025. According to Security Federal, basic earnings per share increased to $2.19, supported by 10.0% growth in net interest income and 21.7% growth in non-interest income.

How did credit quality and provisions for credit losses change at Security Federal in 2026?

Security Federal recorded a $465,000 total provision for credit losses for the first six months of 2026, versus none in 2025. According to Security Federal, non-performing assets were $5.9 million, or 0.37% of total assets, and the allowance for credit losses was $13.7 million (1.98% of gross loans).

What are Security Federal’s key capital ratios as of June 30, 2026?

As of June 30, 2026, Security Federal Bank’s total risk-based capital ratio was 21.23% and CET1 ratio was 19.98%. According to Security Federal, the Tier 1 leverage capital ratio was 10.83%, all calculated on a Bank-only basis, not consolidated information.

How did Security Federal’s net interest income and expenses trend in 2026?

In Q2 2026, net interest income rose to $12.5 million, up 10.6% year over year, while year-to-date net interest income reached $24.8 million. According to Security Federal, total interest expense declined versus 2025, partly offsetting slightly lower total interest income.

What was Security Federal’s book value per share and balance sheet size in mid-2026?

At June 30, 2026, common equity book value per share was $39.54 and total assets were $1.60 billion. According to Security Federal, common shareholders’ equity increased to $122.3 million, while deposits totaled $1.36 billion and net loans were $677.7 million.