Security Federal Corporation, the holding company for Security Federal Bank, has announced earnings for the quarter and six-month periods ended June 30.


The company reported net income available to common shareholders of $769,000 or $0.26 per common share (basic) for the quarter ended June 30, 2013, an increase of $148,000 or 23.8 percent compared to net income available to common shareholders of $621,000 or $0.21 per common share (basic) for the quarter ended June 30, 2012.


For the six months ended June 30, 2013, net income available to common shareholders increased $389,000 or 41.3 percent to $1.3 million or $0.45 per common share (basic), compared to net income available to common shareholders of $941,000 or $0.32 per common share (basic) for the same period in 2012. The increases in earnings for the quarter and six month period are primarily a result of increases in non-interest income in both periods.


Non-interest income increased $559,000 or 47.2 percent to $1.7 million for the quarter ended June 30, 2013 from $1.2 million for the comparable quarter in 2012. The increase is a result of an increase in gain on sale of investments of $266,000 or 256.7 percent combined with income related to an award the bank received in recognition of its commitment to community development. During the quarter ended June 30, 2013, the company recognized $220,000 in grant income in connection with this award compared to the same period in 2012 when no grant income was recognized. Non-interest income for the six months ended June 30, 2013 increased $890,000 or 31.8 percent compared to the same period in 2012 as a result of a $636,000 increase in grant income.


Net interest spread increased six basis points to 2.78 percent for the quarter ended June 30, 2013 and increased six basis points to 2.73 percent for the six months ended June 30, 2013 when compared to the same periods in 2012.


Despite an increase in spread, the significant decrease in the volume of interest bearing assets, particularly loans, resulted in a decrease in net interest income. For the quarter ended June 30, 2013, net interest income decreased $135,000 or 2.3 percent to $5.7 million compared to $5.9 million for the quarter ended June 30, 2012. Net interest income decreased $683,000 or 5.7 percent to $11.3 million for the six months ended June 30, 2013 compared to $12.0 million for the six months ended June 30, 2012.


Total assets at June 30, 2013, were $867.4 million compared to $890.4 million at Dec. 31, 2012, a decrease of $23.0 million or 2.6 percent for the six-month period. Total loans receivable, net decreased $23.7 million or 5.9 percent to $374.0 million at June 30, 2013, from $397.7 million at Dec. 31, 2012, due to decreased loan demand. Total deposits decreased $5.3 million or 0.8 percent to $671.1 million at June 30, 2013, compared to $676.3 million at Dec. 31, 2012. Federal Home Loan Bank advances, other borrowings, convertible senior debentures and subordinated debentures decreased $13.4 million or 10.6 Federal Home Loan Bank to $112.4 million at June 30, 2013, from $125.8 million at Dec. 31, 2012.