Security Federal Corporation, the holding company for Security Federal Bank, announced results for the quarter and six month periods ended June 30, 2017. Net income available to common shareholders increased $22,000 or 1.5% to $1.5 million or $0.50 per common share (basic) for the quarter ended June 30, 2017, compared to $0.49 per common share (basic) for the quarter ended June 30, 2016.

For the six months ended June 30, 2017, net income available to common shareholders increased $43,000 or 1.4% to $3.1 million or $1.06 per common share (basic), compared to $1.04 per common share (basic) for the same period in 2016. The increase in net income available to common shareholders for the six month period was primarily the result of increases in net interest income and non-interest income combined with the absence of preferred stock dividends. These items were partially offset by an increase in non-interest expense.

Net interest income was $12.4 million for the six months ended June 30, 2017, an increase of $69,000 from the same period in 2016. The increase in net interest income was primarily the result of average earning assets increasing by $24.8 million. The Company's net interest spread was 3.24% for the six months ended June 30, 2017.

Non-interest income increased $138,000 or 4.2% to $3.4 million for the six months ended June 30, 2017 from $3.3 million for the same period in 2016. The increase was primarily the result of a $217,000 or 52.7% increase in net gain on sale of investment securities and a $120,000 or 29.9% increase in gain on sale of loans. These increases were partially offset by a $265,000 decrease in grant income. The Company received a Bank Enterprise Award grant from the Unites States Department of the Treasury in 2016 in recognition of its continued commitment to community development in economically distressed areas. Our commitment to these areas has continued in 2017 and we anticipate receiving another BEA; however, based on timing changes made by the US Treasury, we do not expect to receive the award until the third quarter of 2017 and we cannot be assured that new BEA will equal the prior grant award.

Non-interest expense increased $467,000 or 4.2% to $11.7 million for the six months ended June 30, 2017 compared to $11.2 million for the same period in 2016. The largest increases were in salaries and employee benefits expense and occupancy expense, which were the result of increased headcount and building expenses directly attributable to the addition of our newest branch in Evans, Georgia that opened during the second quarter of 2017.

"The anticipated earnings pressure resulting from our recent investments in branches and personnel in the midlands market in South Carolina and the Augusta, Georgia market will continue in the near term but we believe these investments place us in the best possible competitive position to grow the Bank and its earnings," commented Chief Executive Officer Chris Verenes.

Total deposits increased $37.3 million or 5.7% to $691.4 million at June 30, 2017 compared to $654.1 million at December 31, 2016. Checking and savings deposits accounted for the majority of the growth, increasing $28.0 million during 2017.

Net loans receivable increased $240,000 or 0.1% to $360.0 million at June 30, 2017 from $359.7 million at December 31, 2016. Total assets increased $44.2 million or 5.4% to $856.9 million at June 30, 2017 from $812.7 million at December 31, 2016, primarily due to a $40.9 million or 10.6% increase in investment and mortgage-backed securities.