Security Federal Corporation announced that it has entered into a security purchase agreement for the issuance of 82,949 senior non-cumulative perpetual series ECIP preferred stock at a price of $1,000 per share for gross proceeds of $82,949,000 to returning investor United States Department of The Treasury on May 24, 2022. The preferred shares have no par value and a liquidation value of $1,000 per share. The preferred stock may be redeemed at the option of the company on or after the fifth anniversary of issuance.

The preferred stock bears no dividend for the first twenty-four months and thereafter, the annual dividend rate will be adjusted, not higher than 2%, based on our extension of credit of qualified lending as defined in the terms of the Emergency Capital Investment Program. The preferred stock dividend will be fixed after the tenth anniversary of the investment based on the average annual amount of lending in years and will be payable quarterly in arrears on March 15, June 15, September 15, and December 15. The preferred stock was issued in a private placement exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.