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

Nine-month net interest income rose 8.2%, while the bank's capital ratios increased from year-end 2025.

Rhea-AI Summary

Security Federal (SFDL) reported third-quarter common shareholder earnings of $3.587 million, an increase of 13.0% from the prior-year quarter. Basic earnings per share rose to $1.16 from $1.01. Net interest income increased 4.9%, while non-interest income rose 6.0%. Higher non-interest expenses and the absence of the prior-year credit-loss provision reversal partly offset those gains.

For the nine months ended September 30, 2026, common shareholder earnings increased 27.5% to $10.376 million, with basic earnings per share of $3.35 versus $2.57. At September 30, deposits were $1.385140 billion and borrowings were $26.683 million, compared with $1.371777 billion and $35.262 million at year-end 2025. Non-performing assets declined to $5.339 million from $5.842 million over that period. The board authorized repurchases of up to 124,035 common shares under the current program.

21 points · 0 major

MixediHow this balance works

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0 major · 11 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointThird-quarter common shareholder earnings rose 13.0% to $3.587 million from the third quarter of 2025.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Common stock repurchases authorized under the current program cover up to 124,035 shares, at management-determined prices.
• Moderate pointThird-quarter net interest income increased 4.9% to $12.671 million year over year.
• Moderate pointThird-quarter non-interest income increased 6.0% to $2.791 million year over year.
• Minor pointThird-quarter basic earnings per share increased to $1.16 from $1.01 a year earlier.

16 minor points

• Minor pointNine-month common shareholder earnings increased 27.5% to $10.376 million from the first nine months of 2025.
• Minor pointNine-month basic earnings per share rose to $3.35 from $2.57 a year earlier.
• Minor pointNine-month net interest income increased 8.2% to $37.461 million year over year.
• Minor pointThird-quarter interest expense fell to $6.478 million from $8.052 million a year earlier.
• Minor pointNine-month interest expense fell to $19.435 million from $24.194 million a year earlier.
• Minor pointNine-month non-interest income increased 16.3% to $8.924 million year over year.
• Minor pointDeposits increased to $1.385140 billion at September 30, 2026, from $1.371777 billion at year-end 2025.
• Minor pointBorrowings declined to $26.683 million at September 30, 2026, from $35.262 million at year-end 2025.
• Minor pointCash and equivalents increased to $110.342 million at September 30, 2026, from $75.335 million at year-end 2025.
• Minor pointNet loans increased to $681.588 million at September 30, 2026, from $676.182 million at year-end 2025.
• Minor pointTotal assets increased to $1.624945 billion at September 30, 2026, from $1.618084 billion at year-end 2025.
• Minor pointNon-performing assets fell to $5.339 million, or 0.33% of assets, from $5.842 million and 0.36% at year-end 2025.
• Minor pointCommon equity book value per share increased to $37.94 at September 30, 2026, from $37.74 at year-end 2025.
• Minor pointBank total risk-based capital ratio increased to 21.56% at September 30, 2026, from 20.56% at year-end 2025.
• Minor pointBank common equity tier 1 capital ratio increased to 20.31% at September 30, 2026, from 19.30% at year-end 2025.
• Minor pointBank tier 1 leverage capital ratio increased to 11.04% at September 30, 2026, from 10.18% at year-end 2025.

Negative

• Moderate pointNine-month credit-loss provision was $465,000, versus a $200,000 net reversal in the first nine months of 2025.
• Moderate pointThird-quarter non-interest expense increased 1.1% to $10.466 million year over year.
• Moderate pointThird-quarter interest income declined to $19.149 million from $20.131 million a year earlier.
• Minor pointThird-quarter credit-loss provision was zero, versus a $200,000 reversal in the third quarter of 2025.
• Minor pointNine-month non-interest expense increased 3.3% to $31.568 million year over year.

6 minor points

• Minor pointNine-month interest income declined to $56.896 million from $58.813 million a year earlier.
• Minor pointInvestment securities declined to $739.026 million at September 30, 2026, from $776.285 million at year-end 2025.
• Minor pointTotal shareholders' equity declined to $200.031 million at September 30, 2026, from $200.455 million at year-end 2025.
• Minor pointCredit-loss allowance relative to gross loans declined to 1.96% at September 30, 2026, from 1.97% at year-end 2025.
• Minor pointThird-quarter income tax provision increased to $994,000 from $973,000 a year earlier.
• Minor pointNine-month income tax provision increased to $2.731 million from $2.555 million a year earlier.

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AIKEN, South Carolina, Oct. 30, 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 nine months ended September 30, 2026.

Third Quarter Financial Highlights

Net income available to common shareholders was $3.6 million, or $1.16 per common share, for the third quarter of 2026, an increase of $413,000, or 13.0% compared to the third quarter of 2025. The increase in net income was driven by higher net interest income (up $592,000, or 4.9%) and non-interest income (up $157,000, or 6.0%), which offset increased non-interest expense (up $115,000, or 1.1%) and provision for credit losses (no provision in 2026 compared to a $200,000 reversal in the third quarter of 2025).

		Quarter Ended
(Dollars in Thousands, except for Earnings per Share)		9/30/2026				9/30/2025
Total interest income		$	19,149			$	20,131
Total interest expense			6,478				8,052
Net interest income			12,671				12,079
Provision for credit losses			-				(200	)
Net interest income after provision for credit losses			12,671				12,279
Non-interest income			2,791				2,634
Non-interest expense			10,466				10,351
Income before income taxes			4,996				4,562
Provision for income taxes			994				973
Net income			4,002				3,589
Preferred stock dividends			415				415
Net income available to common shareholders		$	3,587			$	3,174
Earnings per common share (basic)		$	1.16			$	1.01

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

Net income available to common shareholders was $10.4 million, or $3.35 per common share, for the first nine months of 2026, an increase of $2.2 million, or 27.5% compared to the first nine months of 2025. The increase in net income was driven by higher net interest income (up $2.8 million, or 8.2%) and non-interest income (up $1.3 million, or 16.3%), which more than offset the increase in provision for credit losses (up $665,000) and higher non-interest expense (up $1.0 million, or 3.3%). 

	For the Nine Months Ended
(Dollars in Thousands, except for Earnings per Share)	9/30/2026				9/30/2025
Total interest income	$	56,896			$	58,813
Total interest expense		19,435				24,194
Net interest income		37,461				34,619
Provision for credit losses		465				(200	)
Net interest income after provision for credit losses		36,996				34,819
Non-interest income		8,924				7,673
Non-interest expense		31,568				30,553
Income before income taxes		14,352				11,939
Provision for income taxes		2,731				2,555
Net income		11,621				9,384
Preferred stock dividends		1,245				1,245
Net income available to common shareholders	$	10,376			$	8,139
Earnings per common share (basic)	$	3.35			$	2.57

Credit Quality

The Company 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 nine months of 2026 compared to a $317,000 reversal of provision for credit losses on loans and a $117,000 provision for credit losses on unfunded commitments, resulting in a $200,000 net reversal in the provision for credit losses for the first nine months of 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):	9/30/2026			12/31/2025			9/30/2025
Non-performing assets	$	5,339		$	5,842		$	5,669
Non-performing assets to total assets		0.33	%		0.36	%		0.35	%
Allowance for credit losses	$	13,597		$	13,529		$	13,603
Allowance for credit losses to gross loans		1.96	%		1.97	%		1.97	%

Balance Sheet Highlights and Capital Ratios

Dollars in thousands (except per share amounts)	9/30/2026			12/31/2025			9/30/2025
Total assets	$	1,624,945		$	1,618,084		$	1,612,017
Cash and cash equivalents		110,342			75,335			51,805
Total loans receivable, net		681,588			676,182			678,114
Investment securities		739,026			776,285			789,261
Deposits		1,385,140			1,371,777			1,365,470
Borrowings		26,683			35,262			39,044
Total shareholders' equity		200,031			200,455			194,791
Common shareholders' equity		117,082			117,506			111,842
Common equity book value per share	$	37.94		$	37.74		$	35.80
Total risk based capital to risk weighted assets (1)		21.56	%		20.56	%		19.93	%
CET1 capital to risk weighted assets (1)		20.31	%		19.30	%		18.67	%
Tier 1 leverage capital ratio (1)		11.04	%		10.18	%		10.14	%
(1) - Ratio is calculated using Bank only information and not consolidated information

The Company announced that its Board of Directors has authorized the repurchase of up to 124,035 shares of the Company’s outstanding common stock under its current repurchase program at such prices as may be determined by the Company’s management.

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

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Security Federal's third-quarter 2026 earnings?

Security Federal earned $3.587 million available to common shareholders in the quarter ended September 30, 2026, up 13.0% from the third quarter of 2025. Basic earnings per common share increased to $1.16 from $1.01.

How many shares did Security Federal authorize for repurchase?

The board authorized repurchases of up to 124,035 outstanding common shares under the current repurchase program. Management will determine the purchase prices.

What made up Security Federal's nine-month 2026 credit-loss provision?

The $465,000 total provision comprised $350,000 for loan credit losses and $115,000 for unfunded commitments. In the first nine months of 2025, a $317,000 loan provision reversal and a $117,000 provision for unfunded commitments produced a $200,000 net reversal.