1
Security Federal Corporation Annual Meeting of Shareholders
Financial Presentation
$5,676 $6,162 $5,918 $7,207
$7,794
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
2015 2016 2017 2018 2019
Thou
sand
s NET INCOME
SECURITY FEDERAL CORPORATION
+8%
2
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,00020
0020
0120
0220
0320
0420
0520
0620
0720
0820
0920
1020
1120
1220
1320
1420
1520
1620
1720
1820
19
Thou
sand
s NET INCOME
SECURITY FEDERAL CORPORATION
7% AVERAGE ANNUAL OVER 20 YRS
3
$800 $813 $869 $913
$963
$0$100$200$300$400$500$600$700$800$900
$1,000
2015 2016 2017 2018 2019
TOTAL ASSETS SECURITY FEDERAL CORPORATION
Mill
ions
+6%
4
$342 $372 $406
$447 $473
$0$50
$100$150$200$250$300$350$400$450$500
2015 2016 2017 2018 2019
Mill
ions
TOTAL GROSS LOANS
SECURITY FEDERAL CORPORATION +6%
5
6
1.4%
1.0% 0.8% 0.9%
0.4% 0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
2015 2016 2017 2018 2019
Thou
sand
s
Non-Performing Assets % Of Total Assets
NON- PERFORMING ASSETS AS A % OF TOTAL ASSETS
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
12/2015 12/2016 12/2017 12/2018 12/2019
Thou
sand
s CHECKING AND SAVINGS DEPOSITS SECURITY FEDERAL CORPORATION
PERSONAL COMM
28.7% of Total
Deposits
40.3% of Total
Deposits
16% Growth
7
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
2015 2016 2017 2018 2019
Thou
sand
s NET INTEREST INCOME
SECURITY FEDERAL CORPORATION
+4%
8
0.71%
0.92%
- 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000
0.50%0.55%0.60%0.65%0.70%0.75%0.80%0.85%0.90%0.95%1.00%
2015 2016 2017 2018 2019
Thou
sand
s
NON-INTEREST INCOME SECURITY FEDERAL CORPORATION
Non- Interest Income National Peers SFB
+19%
9
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
US TREASURY RATES (PRIOR YEAR SLIDE)
One Year Ten Year
10
11
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
US TREASURY RATES SECURITY FEDERAL CORPORATION
ONE YEAR TEN YEAR
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
12/16 06/19 03/20
US TREASURY RATES THROUGH 2020 SECURITY FEDERAL CORPORATION
One Year Ten Year
12
CURRENT ENVIRONMENT (PRIOR YEAR SLIDE)
• How do we prepare for all possible environments? – Diversify Income and Risk – Build Reserves
• Allowance for Loan Losses • Capital
13
BANK CAPITAL RESERVES
– In November 2019, Security Federal Corporation issued $30 million in subordinated debentures.
– Security Federal Corporation took $10 million of the proceeds of this issuance and injected into Security Federal Bank as capital.
– The remaining $20 million can be injected as needed to provide capital to the Bank.
14
15
9.80%
16.20% 17.50%
10.40%
18.20% 19.40%
4%
8%
12%
16%
20%
Leverage Tier 1 Risk Based Total Risk Based
CAPITAL RATIOS SECURITY FEDERAL BANK
2018 2019
WELL CAPITALIZED MINIMUMS
LOCAL PEERS SC/GA
NATIONAL PEERS
SECURITY FEDERAL BANK 19.44%
16.43%
15.85%
10.00%
0.00% 5.00% 10.00% 15.00% 20.00% 25.00%
TOTAL RISK- BASED CAPITAL RATIO (% OF RISK WEIGHTED ASSETS)
WELL CAPITALIZED
NATIONAL PEERS
LOCAL PEERS- SC/ GA
SECURITY FEDERAL BANK
$108 million vs $88 million $20 MILLION IN EXCESS
CAPITAL
16
SECURITY FEDERAL BANK
LOCAL PEERS- SC/GA
NATIONAL PEERS
2.01%
1.27%
1.25%
0.00% 0.50% 1.00% 1.50% 2.00% 2.50%
ALLOWANCE FOR LOAN LOSSES (AS A % OF TOTAL LOANS)
SECURITY FEDERAL BANK
LOCAL PEERS- SC/ GA
NATIONAL PEERS
$9.3 million vs $5.8 million $3.5 MILLION MORE IN
LOAN RESERVES
17
OUR FOCUS IN 2020 • The health and well-being of our employees
and customers • Helping our customers and communities
weather the storm – Participation in the Payroll Protection Program – Staying in communication with customers
• Building reserves • Maintaining a strong liquidity position
18
SHAREHOLDER STATS
19
$0.40
$0.00$0.05$0.10$0.15$0.20$0.25$0.30$0.35$0.40$0.45
ANNUAL DIVIDEND RATE SECURITY FEDERAL CORPORATION
-FIRST DIVIDEND WAS PAID IN MARCH 1991 -NOW $0.40/ SHARE ANNUALLY
-DIVIDEND YIELD ON CURRENT PRICE IS 1.4% 20
21
$28.30 $35.00
$-
$5
$10
$15
$20
$25
$30
$35
$40
STOCK PRICES SECURITY FEDERAL CORPORATION
$2,194
$292
$2,585
$1,153
$1,680
$2,336
$0$500
$1,000$1,500$2,000$2,500$3,000$3,500$4,000$4,500
1 Year Treasury S & P 500 Index Russell 2000 Index Security FederalCorporation Stock
$100 INVESTED ON 10/31/87 WOULD BE AT MARCH 31, 2020
10.2% W/ DIV
9.1% RETURN
RUSSELL 2000 INDEX – 7.3% RETURN S&P 500 INDEX – 7.4% RETURN
1 YR UST– 3.4% RETURN 22