SFDL Q3 Earnings Rise 59% Y/Y on Higher Net Interest Income

Core Viewpoint - Security Federal Corporation reported strong third-quarter results for 2025, with significant increases in net income and net interest income, reflecting effective management and improved credit quality [2][3][16] Financial Performance - Net income available to common shareholders for Q3 2025 increased to $3.2 million, or $1.01 per share, up from $2 million, or 62 cents per share, a year earlier, marking a 59% increase in quarterly earnings per share [2] - For the nine months ended September 30, 2025, net income totaled $8.1 million, or $2.57 per share, compared to $5.9 million, or $1.83 per share, in the same period of 2024 [3] Key Business Metrics - Net interest income for Q3 grew 16% year over year to $12.1 million, supported by a 3.1% rise in total interest income to $20.1 million and an 11.7% decline in total interest expenses to $8.1 million [4] - Non-interest income increased 0.3% year over year to $2.6 million in Q3, while for the first nine months of 2025, it rose 3.7% to $7.7 million [5] Credit Quality & Risk Management - The company recorded a $200,000 net reversal in credit loss provisions for the first nine months of 2025, compared to a $1.1 million provision in the same period of 2024 [6] - Non-performing assets decreased to $5.7 million as of September 30, 2025, down from $6.8 million a year earlier [6] Balance Sheet Trends - Total assets reached $1.61 billion at the end of Q3, a 2.3% year-over-year increase [7] - Deposits increased 3.1% to $1.37 billion, while borrowings declined 58% to $39 million after full repayment of Federal Reserve advances [8] Capital Position - The total risk-based capital ratio improved to 20.46% from 19.21% a year ago, with a common equity Tier 1 capital ratio of 19.20% [9] - Book value per share rose to $35.80 from $31.97 in the prior year [9] Management Commentary & Outlook - Management attributed the strong performance to higher net interest margins and disciplined expense management despite inflationary pressures [11] - The company is focused on deposit growth, loan quality, and strategic capital deployment while acknowledging potential economic challenges [13] Other Developments - In Q1 2025, Security Federal purchased a multi-tenant property for a future full-service branch, contributing to higher rental income [14] - The company operates 19 full-service branches, offering various financial services through its subsidiary [15]