Security Federal Corp. · OTC:SFDL
Security Federal — Shareholder Meeting (May 2020)
23 slides from Security Federal's shareholder meeting presentation, May 1, 2020
Slide 1: Notice: Changing the 2020 Annual Meeting of Shareholders Format
(877) 568 4106. When prompted, enter the access code bank@securityfederalbank.com 238 Richland Avenue NW Post Office Box 810 (29802) Aiken, South Carolina 29801 April 30, 2020 Notice: Changing the 2020 Annual Meeting of Shareholders Format Dear Fellow Shareholder: As a result of the continuing publi
Slide 2: Annual Meeting of Shareholders Financial Presentation
#Ba cal Security Federal Corporation Annual Meeting of Shareholders Financial Presentation
Slide 3: Net Income
Thousands NET INCOME SECURITY FEDERAL CORPORATION $9,000 $8,000 +8% $7,000 $6,000 $5,000 $4,000 $7,207 $3,000 $5,676 $5,918 $2,000 $1,000 So 2015 2016 2017 2018 2019
Slide 4: Net Income: 7% Average Annual
Thousands NET INCOME SECURITY FEDERAL CORPORATION 7% AVERAGE ANNUAL OVER 20 YRS
Slide 5: Total Assets
Millions TOTAL ASSETS SECURITY FEDERAL CORPORATION +6% $963 ; 2015 2016 2017 2018 2019 4
Slide 6: Total Gross Loans
Millions TOTAL GROSS LOANS SECURITY FEDERAL CORPORATION +6% $500 $450 $400 saa7 M7? $350 $406 eee 9342 M370 $250 $200 $150 $100 $50 so 2015 2016 2017 2018 2019
Slide 7: Non-Performing Assets as a % of Total Assets
Thousands NON- PERFORMING ASSETS AS A % OF TOTAL ASSETS 2015 2016 2017 2018 2019 miNon-Performing Assets —% Of Total Assets 2.5% 2.0% 1.5% 1.0% 0.5% 0.0%
Slide 8: Checking and Savings Deposits
CHECKING AND SAVINGS DEPOSITS SECURITY FEDERAL CORPORATION $350,000 16% Growth $300,000 a 40.3% of $250,000 Total Deposits nw $200,000 8 = n 3 $150,000 | 28.7% of £ Total $100,000 + Deposits $50,000 = 0) T z T 12/2015 12/2016 12/2017 12/2018 12/2019 m PERSONAL CHECKING mCOMMCHECKING m SAVINGS 7
Slide 9: Net Interest Income
$35,000 $30,000 w» $25,000 2 3 $20,000 = $15,000 $10,000 $5,000 so NET INTEREST INCOME SECURITY FEDERAL CORPORATION +4% 2015 2016 2017 2018 2019
Slide 10: Non-Interest Income
1.00% 0.95% 0.90% 0.85% 0.80% 0.75% 0.70% 0.65% 0.60% 0.55% 0.50% NON-INTEREST INCOME SECURITY FEDERAL CORPORATION +19% 2% % 2015 2016 2017 2018 2019 MNon- Interest Income National Peers —SFB an Oo fo} oO ed ° fo} 5 Thousands
Slide 11: US Treasury Rates (Prior Year Slide)
US TREASURY RATES (PRIOR YEAR SLIDE) 6.00% —One Year —Ten Year 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2M er DO CK BD A WO WF wD DB ww WD vO WN wo OD? VOM WO? OP VO" WP WOE VS WS” WSS? VS OS? OWS NS OS II AD DAD DAD ADD AD DAD A a 10
Slide 12: US Treasury Rates
US TREASURY RATES SECURITY FEDERAL CORPORATION —ONE YEAR —TEN YEAR 4.00% 3.50% 3.00% 2.50% 2.00% OW 1.50% +f 1.00% ose A 0.00% Pi TTT Ti 2? we wt nh DD WD a) Sv ONS ov 11 SB QD OO ww ww OP VWOe VS OS” OWS SS SY a
Slide 13: US Treasury Rates Through 2020
3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% US TREASURY RATES THROUGH 2020 SECURITY FEDERAL CORPORATION —One Year —Ten Year 12/16 06/19
Slide 14: Current Environment (Prior Year Slide)
CURRENT ENVIRONMENT (PRIOR YEAR SLIDE) * How do we prepare for all possible environments? — Diversify Income and Risk — Build Reserves ¢ Allowance for Loan Losses * Capital
Slide 15: Bank Capital Reserves
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 ne
Slide 16: Capital Ratios
20% 16% 12% 8% 4% CAPITAL RATIOS SECURITY FEDERAL BANK 19.40% 8.20% 17.50% 9.80% 10.40% -80% Leverage Tier 1 Risk Based _‘ Total Risk Based m2018 m 2019 15
Slide 17: Total Risk-Based Capital Ratio
TOTAL RISK- BASED CAPITAL RATIO (% OF RISK WEIGHTED ASSETS) WELL 10.00% CAPITALIZED CAPITAL NATIONAL PEERS 15.85% LOCAL PEERS- SC/GA 16.43% 19.44% SECURITY FEDERAL BANK $108 million vs S88 million $20 MILLION IN EXCESS 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 16
Slide 18: Allowance for Loan Losses
ALLOWANCE FOR LOAN LOSSES (AS A % OF TOTAL LOANS) NATIONAL PEERS LOCAL PEERS- SC/ GA 1.25% 1.27% SECURITY FEDERAL BANK $9.3 million vs $5.8 million $3.5 MILLION MORE IN LOAN RESERVES 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 17
Slide 19: Our Focus in 2020
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
Slide 20: Shareholder Stats
SHAREHOLDER STATS
Slide 21: Annual Dividend Rate
ANNUAL DIVIDEND RATE SECURITY FEDERAL CORPORATION $0.45 $0.40 $0.35 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 69+ 699/99 g/g |OT_ gE gf 99 $0.40 -FIRST DIVIDEND WAS PAID IN MARCH 1991 -NOW S0.40/ SHARE ANNUALLY -DIVIDEND YIELD ON CURRENT PRICE IS 1.4% 20
Slide 22: Stock Prices
STOCK PRICES SECURITY FEDERAL CORPORATION $35.00 $28.30} 21
Slide 23: $100 Invested on 10/31/87
$100 INVESTED ON 10/31/87 WOULD BE $4,500 AT MARCH 31, 2020 10.2% W/ DIV $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $2,585 $1,000 $500 $1,153 0 —__ Ea 1 Year Treasury S&P500Index Russell 2000 Index Security Federal Corporation Stock RUSSELL 2000 INDEX — 7.3% RETURN S&P 500 INDEX — 7.4% RETURN 1 YR US