Security Federal Corp Enters Material Definitive Agreement

TL;DR

SFDL signed a big deal, details TBD.

AI Summary

On January 10, 2025, Security Federal Corporation (SFDL) entered into a material definitive agreement. The filing does not disclose the specific details of this agreement or any associated dollar amounts. The company is incorporated in South Carolina and its principal executive offices are located in Aiken.

Why It Matters

This filing indicates a significant new agreement for Security Federal Corp, which could impact its future operations and financial performance.

Risk Assessment

Risk Level: medium — The lack of specific details about the material definitive agreement introduces uncertainty regarding its potential impact on the company.

Key Players & Entities

• Security Federal Corporation (company) — Registrant
• South Carolina (location) — State of incorporation
• Aiken (location) — City of principal executive offices

FAQ

Filing Documents

• sfdl20250113_8k.htm (8-K) — 33KB
• ex_765069.htm (EX-10.1) — 237KB
• chart1.jpg (GRAPHIC) — 39KB
• pic01.jpg (GRAPHIC) — 6KB
• pic02.jpg (GRAPHIC) — 4KB
• rainssig.jpg (GRAPHIC) — 5KB
• 0001437749-25-001102.txt ( ) — 502KB
• sfdl-20250110.xsd (EX-101.SCH) — 3KB
• sfdl-20250110_def.xml (EX-101.DEF) — 10KB
• sfdl-20250110_lab.xml (EX-101.LAB) — 14KB
• sfdl-20250110_pre.xml (EX-101.PRE) — 10KB
• sfdl20250113_8k_htm.xml (XML) — 2KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. On January 10, 2025, Security Federal Corporation (the "Company"), the holding company of Security Federal Bank, entered into an ECIP Securities Purchase Option Agreement (the "Agreement") with the United States Department of the Treasury ("Treasury"). Treasury is currently the record and beneficial owner of all 82,949 shares of the Company's Senior Non-Cumulative Preferred Stock (the "Preferred Stock"), which was issued pursuant to the Treasury's Emergency Capital Investment Program ("ECIP") on May 24, 2022 (the "Original Closing Date"), as previously disclosed. Pursuant to the Agreement, Treasury granted the Company an option to purchase all of the Preferred Stock during the Option Period, which is the first fifteen years following the Original Closing Date. The purchase price for the Preferred Stock pursuant to the purchase option is determined based on a formula equal to the present value of the Preferred Stock, calculated as set forth in the Agreement, together with any accrued and unpaid dividends thereon, as of the closing date. Subject to variations in interest rates and the equity risk premium, which are components included in the purchase price calculation, the Company presently expects that the purchase price will be at a substantial discount from the face value of the Preferred Stock. The purchase option may not be exercised during the ECIP period, which is the first ten years following the Original Closing Date unless and until at least one of the Threshold Conditions under the Agreement has been met. The Threshold Conditions are as follows: during the ten years that follow the Original Closing Date (the "ECIP Period") either (1) over any sixteen consecutive quarters, an average of at least 60% of the Company's Total Originations, as defined pursuant to the terms of the ECIP, qualifies as "Deep Impact Lending," as defined pursuant to the terms of the ECIP (the "Deep Impact Condition"); (2) over a

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits (d) Exhibits 10.1 ECIP Securities Purchase Option Agreement dated January 10, 2025, by and between Security Federal Corporation and the United States Department of the Treasury. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) 3

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. SECURITY FEDERAL CORPORATION Date: January 14, 2025 By: /s/ Darrell Rains Darrell Rains Chief Financial Officer 4

View Full Filing

View this 8-K filing on SEC EDGAR