Security Federal Corp., the holding company for Security Federal Bank, announced earnings and results for the quarter and year ended Dec. 31, 2020.
Net income increased $1.5 million, or 91.3%, to $3.1 million, or $0.94 per share, for the quarter ended Dec. 31, 2020, compared to $1.6 million, or $0.54 per share, for the fourth quarter of 2019. The increase in net income was primarily due to a $1.5 million, or 21.6%, increase in net interest income.
For the year ended Dec. 31, 2020, net income was $7.1 million, or $2.19 per share, a decrease of $744,000, or 9.5%, compared to $7.8 million, or $2.64 per share, during 2019. The decrease in net income was the result of significantly higher loan loss provisions recorded during 2020 in response to the potential and unknown economic impact of the ongoing COVID-19 pandemic.
Through the Small Business Administration’s (SBA) Paycheck Protection Program (PPP), the bank provided over $75 million in funding to more than 1,450 customers during the year ended Dec. 31, 2020.
Chief Executive Officer Chris Verenes commented, “We were responsive to the PPP needs of our customers at a critical time for them and were pleased to extend help to others in the communities that we serve.”
The bank began the process of working with customers through the SBA forgiveness process in the fourth quarter of 2020 which resulted in $28.2 million in PPP loan repayments. As a result of these repayments, the bank recognized over $1 million in deferred PPP loan fees which increased net interest income. At Dec. 31, 2020, the bank had $47.1 million in PPP loans remaining.
The bank also provided other payment relief options, such as payment deferrals and waived fees, during the year ended Dec. 31, 2020, in response to the COVID-19 pandemic. Since March 31, 2020, the bank has approved 343 loan modifications in accordance with the CARES Act with a combined loan balance, net of deferred fees, of over $100 million. The majority of these deferrals have resumed regular principal and interest payments. As of Dec. 31, 2020, there were eight of these loans that were still on deferral with a combined balance of $3.0 million.
Security Federal has 17 full service branches located in Aiken, Ballentine, Clearwater, Columbia, Graniteville, Langley, Lexington, North Augusta, Ridge Spring, Wagener and West Columbia in South Carolina, and Augusta and Evans in Georgia.