Security Federal Corporation reported its financial results for the first quarter of 2025, revealing a net income of $3.0 million, or $0.81 per share, a significant increase of 47.8% compared to $1.8 million, or $0.54 per share, in the same period last year. The rise in profitability was attributed to a 12.5% increase in net interest income, which reached $11.2 million, driven by higher average interest-earning assets and an improved net interest margin of 3.05%. Total interest income rose to $19.2 million, while interest expense decreased to $8.0 million, reflecting a favorable shift in the interest rate environment.
Total assets for Security Federal decreased by $26.3 million to $1.59 billion as of March 31, 2025, primarily due to a $45.2 million decline in cash and cash equivalents, which was partially offset by a $15.1 million increase in available-for-sale (AFS) securities. Loans receivable, net, including loans held for sale, increased slightly by $2.8 million to $689.9 million, with notable growth in residential and commercial real estate loans. The company also reported a 1.6% increase in total deposits, which reached $1.35 billion, driven by higher balances in certificates of deposit and money market accounts.
In terms of operational developments, Security Federal's total loans held for investment showed a mixed performance, with residential mortgage loans increasing by 2.2% to $208.1 million, while commercial and agricultural loans decreased by 14.6% to $31.5 million. The company maintained a strong capital position, with shareholders' equity rising to $188.2 million, a 3.2% increase from the previous quarter, supported by retained earnings and a reduction in accumulated other comprehensive loss.
Looking ahead, Security Federal remains focused on enhancing its community development initiatives, particularly through its participation in the Community Development Financial Institutions (CDFI) program. The company is currently evaluating the revised CDFI Certification Application requirements and aims to leverage its certification to access funding opportunities and enhance its credibility in serving underserved communities. Management expressed confidence in the company's liquidity position and operational strategies, anticipating continued growth in loan originations and deposit retention amid evolving market conditions.
About SECURITY FEDERAL CORP
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