Security Federal Corporation Reports 11.6% Increase in Net Income for Q2 2025

Security Federal Corporation reported a modest increase in its financial performance for the second quarter of 2025, with net income available to common shareholders rising to $2.4 million, or $0.75 per share, compared to $2.1 million, or $0.66 per share, in the same period last year. This 11.6% increase in net income was primarily driven by a rise in net interest income and non-interest income, alongside a decrease in the provision for credit losses. Total interest income for the quarter reached $19.5 million, up from $18.9 million, while interest expense decreased to $8.1 million from $8.6 million, resulting in a net interest income of $11.3 million, an increase of 11.1% year-over-year.

In terms of overall financial health, Security Federal's total assets increased by $13.5 million to $1.63 billion as of June 30, 2025, compared to $1.61 billion at the end of 2024. This growth was largely attributed to an increase in available-for-sale (AFS) securities, which rose by $62.6 million to $588.2 million, while held-to-maturity (HTM) securities decreased by $15.8 million to $119.4 million. The company’s total loans receivable also saw a slight increase, reaching $687.7 million, up from $687.1 million at the end of the previous fiscal year.

Operationally, Security Federal experienced a 4.5% increase in total deposits, which rose to $1.38 billion, driven by higher balances in certificates of deposit and money market accounts. The bank's strategy to attract and retain customers amid competitive pressures has been effective, as evidenced by the growth in these higher-cost deposit accounts. Additionally, the company reported a decrease in loans past due by 30 days or more, which fell to $7.3 million, or 1.0% of total loans, down from $12.6 million, or 1.8%, at the end of 2024.

Looking ahead, Security Federal remains optimistic about its growth trajectory, bolstered by its strong capital position. The bank exceeded all regulatory capital requirements, with a Common Equity Tier 1 Capital ratio of 19.2% as of June 30, 2025. The company is also actively evaluating opportunities for expansion and investment, particularly in underserved communities, as it continues to navigate the evolving economic landscape. Management's focus on maintaining a well-capitalized status and enhancing operational efficiencies positions the bank favorably for future growth.