Security Federal Corporation Announces Increase in Second Quarter Earnings.

AIKEN, S.C. -- Security Federal Corporation (OTCBB:SFDL), holding company of Security Federal Bank, announced earnings of $950,000 or $0.38 per share (basic) for the three months ending September 30, 2005 which is an 18.7% increase compared to $800,000 or $0.32 per share (basic) for the three months

ending September 30, 2004. For the six months ending September 30, 2005, earnings increased 17.3% from $1.6 million or $0.64 per share (basic) to $1.9 million or $0.74 per share (basic). The increase in earnings is a result of a $690,000 and $1.2 million increase in net interest income offset partially by a $460,000 and $763,000 increase in general and administrative expenses for the three and six months ending September 30, 2005.

Total assets at September 30, 2005 were $613.5 million compared to $586.0 million at March 31, 2005, an increase of 4.7%. Net loans receivable increased $22.9 million or 7.2% to $339.8 million at September 30, 2005 from $316.9 million at March 31, 2005. Total deposits were $449.7 million at September 30, 2005 compared to $430.3 million at March 31, 2005, an increase of 4.5%. Federal Home Loan Bank advances and other borrowings increased $5.4 million or 4.6% to $123.0 million at September 30, 2005.

Security Federal Bank has eleven full service branch locations in Aiken, Clearwater, Graniteville, Langley, Lexington, North Augusta, Wagener, and West Columbia, South Carolina. Additional financial services are provided by three of the Bank's wholly owned subsidiaries, Security Federal Insurance, Inc., Security Federal Investments, Inc., and Security Federal Trust, Inc.

Safe-Harbor Statement

The information contained in this press release contains forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, and these factors are enumerated in the Company's filings with the Securities and Exchange Commission.