10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC  20549

FORM 10 – Q/A

(Amendment No. 1)

(Mark one)

(X)     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

            FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2012

(_)     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

            FOR THE TRANSITION PERIOD:

            FROM:  ____________________     TO:  ____________________

COMMISSION FILE NUMBER:  0-16120

SECURITY FEDERAL CORPORATION

(Exact name of registrant as specified in its charter)

South Carolina	57-0858504
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

238 RICHLAND AVENUE WEST, AIKEN, SOUTH CAROLINA                                                                        29801

(Address of Principal Executive Office)                                                                                                               (Zip code)

(803) 641-3000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant:  (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

                               YES     [X]          NO     [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.)  Yes [ X ]      No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filed                                           [  ]                                Accelerated filer                                                                 [     ]

Non-accelerated filer                                             [  ]                                Smaller reporting company                                                [ X ]

Indicate by check mark whether the registrant is a shell company (defined in Rule 12b-2 of the Exchange Act).

                               YES     [  ]          NO     [X]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

CLASS:	OUTSTANDING SHARES AT:	SHARES:
Common Stock, par value $0.01 per share	August 13, 2012	2,944,001

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-Q/A (“Form 10-Q/A”) to our Form 10-Q for the quarter ended June 30, 2012, initially filed with the Securities and Exchange Commission (“SEC”) on August 14, 2012 (“Original Form 10-Q”), is being filed to amend Item 6 of Part II to furnish Exhibit 101 XBRL (eXtensible Business Reporting Language) interactive data files in accordance with Rule 401(a)(2) of Regulation S-T.  Exhibit 101 to this Form 10-Q/A includes the following information formatted in XBRL: (a) Consolidated Balance Sheets; (b) Consolidated Statements of Income; (c) Consolidated Statements of Comprehensive Income; (d) Consolidated Statements of Changes in Shareholders’Equity and Comprehensive Income; (e) Consolidated Statements of Cash Flows; and (f) Notes to Consolidated Financial StatementS.

No other changes have been made to the Original Form 10-Q, and this Form 10-Q/A does not reflect any subsequent events occurring after the filing date of the Original Form 10-Q or modify or update any other disclosures made in the Original Form 10-Q.

Part II: Other Information

Item 6           Exhibits

3.1 Articles of Incorporation, as amended (1)

3.2 Articles of Amendment, including Certificate of Designation relating to the Company’s Fixed Rate Cumulative Perpetual Preferred Stock Series B (2)

3.3 Amended and Restated Bylaws (3)

4.1 Form of Stock Certificate of the Company and other instruments defining the rights of security holders, including indentures (4)

4.2 Form of Stock Certificate for the Series B Preferred Shares (2)

4.3 Warrant to purchase shares of the Company’s common stock dated December 19, 2008 (5)

4.4 Form of Indenture with respect to the Company’s 8.0% Convertible Senior Debentures Due 2029 (6)

4.5 Specimen Convertible Senior Debenture Due 2029 (6)

4.6 Letter Agreement dated September 29, 2010 between Security Federal Corporation and the United States Department of the Treasury, including the Exchange Agreement – Standard Terms, with respect to the exchange of the Series A Fixed Rate Cumulative Perpetual Preferred Stock for the Series B Fixed Rate Cumulative Perpetual Preferred Stock (2)

4.7 Letter Agreement dated September 29, 2010 between Security Federal Corporation and the United States Department of the Treasury, including the Securities Purchase Agreement – Standard Terms, with respect to the purchase of the Series B Fixed Rate Cumulative Perpetual Preferred Stock (2)

10.1 1993 Salary Continuation Agreements (7)

10.2 Amendment One to 1993 Salary Continuation Agreements (8)

10.3 Form of 2006 Salary Continuation Agreement (9)

10.4 1999 Stock Option Plan (10)

10.5 2002 Stock Option Plan (11)

10.6 2006 Stock Option Plan (12)

10.7 2008 Equity Incentive Plan (13)

10.8 Form of incentive stock option agreement and non-qualified stock option agreement pursuant to the 2006 Stock Option Plan (12)

10.9 2004 Employee Stock Purchase Plan (14)

10.10 Incentive Compensation Plan (7)

10.11 Form of Security Federal Bank Salary Continuation Agreement (9)

10.12 Form of Security Federal Split Dollar Agreement (9)

10.13 Form of Compensation Modification Agreement (5)

14 Code of Ethics (15)

25 Form T-1; Statement Eligibility of Trustee (6)

31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act (16)

31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act (16)

32 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act (16)

Item 6           Exhibits (continued)

101 The following materials from Security Federal Corporation’s Quarterly Report on Form 10-Q for the quarter ended  June 30, 2012, formatted in Extensible Business Reporting Language (XBRL): (a) Consolidated Balance Sheets; (b) Consolidated Statements of Income; (c) Consolidated Statements of Comprehensive Income; (d) Consolidated Statements of Changes in Shareholders’Equity and Comprehensive Income; (e) Consolidated Statements of Cash Flows; and (f) Notes to Consolidated Financial Statements (17)

__________________

(1) Filed on June 26, 1998, as an exhibit to the Company’s Proxy Statement and incorporated herein by reference.

(2) Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 30, 2010.

(3) Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 19, 2011.

(4) Filed on August 12, 1987, as an exhibit to the Company’s Registration Statement on Form 8-A and incorporated herein by reference.

(5) Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 23, 2008.

(6) Filed on July 13, 2009 as an exhibit to the Company’s Registration Statement on Form S-1 (File No. 333-160553) and incorporated herein by reference.

(7) Filed on June 28, 1993, as an exhibit to the Company’s Annual Report on Form 10-KSB and incorporated herein by reference.

(8) Filed as an exhibit to the Company’s Quarterly Report on Form 10-QSB for the quarter ended September 30, 1993 and incorporated herein by reference.

(9) Filed on May 24, 2006 as an exhibit to the Company’s Current Report on Form 8-K dated May 18, 2006 and incorporated herein by reference.

(10) Filed on March 2, 2000, as an exhibit to the Company's Registration Statement on Form S-8 and incorporated herein by reference

(11) Filed on January 3, 2003, as an exhibit to the Company's Registration Statement on Form S-8 and incorporated herein by reference.

(12) Filed on August 22, 2006, as an exhibit to the Company's Registration Statement on Form S-8 (Registration Statement No. 333-136813) and incorporated herein by reference.

(13) Filed on November 12, 2008, as an exhibit to the Company's Registration Statement on Form S-8 and incorporated herein by reference.

(14) Filed on June 18, 2004, as an exhibit to the Company’s Proxy Statement and incorporated herein by reference.

(15) Filed on June 29, 2006, as an exhibit to the Company’s Annual Report on Form 10-K and incorporated herein by reference.

(16) Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, which was filed with the Securities and Exchange Commission on August 14, 2012.

(17) Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

Signatures

Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SECURITY FEDERAL CORPORATION

Date:	September 13, 2012	By:	/s/J. Chris Verenes
				J. Chris Verenes
				President & Chief Executive Officer
				Duly Authorized Representative

Date:	September 13, 2012	By:	/s/Roy G. Lindburg
				Roy G. Lindburg
				CFO
				Duly Authorized Representative

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Carrying Amounts and Fair Value of Financial Instruments: Schedule of Assets Measured on Recurring Basis (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Assets Measured on Recurring Basis

	Quoted
	Market	Significant
	Price In	Other	Significant
	Active	Observable	Unobservable
	Markets	Inputs	Inputs
	(Level 1)	(Level 2)	(Level 3)
Assets:
FHLB Securities	$-	$2,511,640	$-
Federal National Mortgage
Association (“FNMA”) and
Federal Home Loan Mortgage
Corporation (“FHLMC”) Bonds	-	1,000,790	-
Small Business Administration (“SBA”) Bonds	-	89,401,019	-
Tax Exempt Municipal Securities	-	31,969,427	-
Mortgage-Backed Securities	-	233,381,604	-
Equity Securities	-	72,750	-
Total	$-	$358,337,230	$-

	Quoted
	Market	Significant
	Price In	Other	Significant
	Active	Observable	Unobservable
	Markets	Inputs	Inputs
	(Level 1)	(Level 2)	(Level 3)
Assets:
FHLB Securities	$-	$2,698,894	$-
FNMA and FHLMC Bonds		2,921,851
SBA Bonds		86,278,802
Tax Exempt Municipal Bonds		24,125,725
Mortgage-Backed Securities	-	237,853,835	-
Equity Securities	-	75,750	-
Total	$-	$353,954,857	$-

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Loans Receivable, Net: Schedule of Loans Receivable Individually and Collectively Evaluated for Impairment (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Loans Receivable Individually and Collectively Evaluated for Impairment

	June 30, 2012
	Loans Receivable
	Individually	Collectively
	Evaluated For	Evaluated For
	Impairment	Impairment	Total
Residential Real Estate	$3,405,599	$92,268,437	$95,674,036
Consumer	449,577	56,860,911	57,310,488
Commercial Business	14,143	8,879,526	8,893,669
Commercial Real Estate	38,761,301	223,441,714	262,203,015
Total	$42,630,620	$381,450,588	$424,081,208

	March 31, 2012
	Loans Receivable
	Individually	Collectively
	Evaluated For	Evaluated For
	Impairment	Impairment	Total
Residential Real Estate	$3,544,061	$94,263,856	$97,807,917
Consumer	1,849,046	56,835,954	58,685,000
Commercial Business	172,362	9,380,213	9,552,575
Commercial Real Estate	35,231,717	241,086,180	276,317,897
Total	$40,797,186	$401,566,203	$442,363,389

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Loans Receivable, Net: Schedule of Accounts, Notes, Loans and Financing Receivable (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Accounts, Notes, Loans and Financing Receivable

	June 30, 2012	March 31, 2012
Residential Real Estate	$95,674,036	$97,807,917
Consumer	57,310,488	58,685,000
Commercial Business	8,893,669	9,552,575
Commercial Real Estate	262,203,015	276,317,897
Total Loans Held For Investment	424,081,208	442,363,389
Loans Held For Sale	3,158,501	2,671,771
Total Loans Receivable, Gross	427,239,709	445,035,160
Less:
Allowance For Possible Loan Loss	12,684,327	14,615,198
Loans In Process	1,472,379	1,886,652
Deferred Loan Fees	16,108	22,704
	14,172,814	16,524,554
Total Loans Receivable, Net	$413,066,895	$428,510,606

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Investment And Mortgage-Backed Securities, Available For Sale: Schedule of Held to Maturity Securities Amortized Cost, Gross Unrealized Losses and Fair Value (Details) (USD $)	Jun. 30, 2012	Mar. 31, 2012
Fair Value of Securities Held To Maturity	$ 67,704,158	$ 69,965,869
FHLB Securities
Held to Maturity Securities Amortized Cost	10,547,804	11,554,627
Held to Maturity Securities Gross Unrealized Gains	196,752	221,726
Held to Maturity Securities Gross Unrealized Losses		13,517
Fair Value of Securities Held To Maturity	10,744,556	11,762,836
Federal Farm Credit Securities
Held to Maturity Securities Amortized Cost	1,999,540	1,999,516
Held to Maturity Securities Gross Unrealized Gains	13,720	6,534
Held to Maturity Securities Gross Unrealized Losses		23,410
Fair Value of Securities Held To Maturity	2,013,260	1,982,640
FNMA and FHLMC Bonds
Held to Maturity Securities Amortized Cost	5,985,244	6,983,004
Held to Maturity Securities Gross Unrealized Gains	46,006	19,863
Held to Maturity Securities Gross Unrealized Losses		49,147
Fair Value of Securities Held To Maturity	6,031,250	6,953,720
SBA Bonds
Held to Maturity Securities Amortized Cost	3,251,636	3,251,151
Held to Maturity Securities Gross Unrealized Gains	356,074	305,430
Fair Value of Securities Held To Maturity	3,607,710	3,556,581
Mortgage-Backed Securities
Held to Maturity Securities Amortized Cost	43,150,174	43,732,912
Held to Maturity Securities Gross Unrealized Gains	2,002,208	1,822,180
Fair Value of Securities Held To Maturity	45,152,382	45,555,092
Equity Securities
Held to Maturity Securities Amortized Cost	155,000	155,000
Fair Value of Securities Held To Maturity	155,000	155,000
Total Securities
Held to Maturity Securities Amortized Cost	65,089,398	67,676,210
Held to Maturity Securities Gross Unrealized Gains	2,614,760	2,375,733
Held to Maturity Securities Gross Unrealized Losses		86,074
Fair Value of Securities Held To Maturity	$ 67,704,158	$ 69,965,869

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Loans Receivable, Net: Schedule of Impaired Loans With No Related Allowance and With An Allowance Recorded (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Impaired Loans With No Related Allowance and With An Allowance Recorded

	June 30, 2012
		Unpaid		Average	Interest
	Recorded	Principal	Related	Recorded	Income
	Investment	Balance	Allowance	Investment	Recognized
Impaired Loans
With no related allowance recorded:
Residential Real Estate	$2,570,235	$2,625,235	$-	$2,385,897	$19,202
Consumer Loans	449,577	513,577	-	1,139,528	3,498
Commercial Business	14,143	14,143	-	18,948	161
Commercial Real Estate	38,506,851	43,446,649	-	32,966,362	211,447
With an allowance recorded:
Residential Real Estate	835,364	1,547,364	34,917	1,088,933	-
Consumer Loans	-	-	-	9,784	-
Commercial Business	-	-	-	74,305	-
Commercial Real Estate	254,450	700,374	9,624	4,030,147	-
Total
Residential Real Estate	3,405,599	4,172,599	34,917	3,474,830	19,202
Consumer Loans	449,577	513,577	-	1,149,312	3,498
Commercial Business	14,143	14,143	-	93,253	161
Commercial Real Estate	38,761,301	44,147,023	9,624	36,996,509	211,447
Total	$42,630,620	$48,847,342	$44,541	$41,713,904	$234,308

	March 31, 2012
		Unpaid		Average	Interest
	Recorded	Principal	Related	Recorded	Income
	Investment	Balance	Allowance	Investment	Recognized
Impaired Loans
With no related allowance recorded:
Residential Real Estate	$2,201,560	$2,456,960	$-	$2,066,066	$65,818
Consumer Loans	1,829,478	1,879,478	-	2,398,298	86,180
Commercial Business	23,752	47,752	-	294,894	1,677
Commercial Real Estate	27,425,873	29,175,328	-	24,020,047	1,186,679
With an allowance recorded:
Residential Real Estate	1,342,501	1,954,501	155,000	586,109	6,137
Consumer Loans	19,568	60,668	19,568	28,181	-
Commercial Business	148,610	148,610	148,610	207,135	5,608
Commercial Real Estate	7,805,844	9,945,912	1,313,670	4,687,210	228,483
Total
Residential Real Estate	3,544,061	4,411,461	155,000	2,652,175	71,955
Consumer Loans	1,849,046	1,940,146	19,568	2,426,479	86,180
Commercial Business	172,362	196,362	148,610	502,029	7,285
Commercial Real Estate	35,231,717	39,121,240	1,313,670	28,707,257	1,415,162
Total	$40,797,186	$45,669,209	$1,636,848	$34,287,940	$1,580,582

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Loans Receivable, Net: Schedule of Activity in Allowance for Loan Losses by Category (Details) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Residential Real Estate
Allowance Balance at Beginning of Period	$ 1,928,625	$ 1,702,864
Provision for Loan Loss by Category	319,110,000	231,632,000
Allowance for Doubtful Accounts Receivable, Charge-offs	(226,972)	(171,039)
Allowance for Doubtful Accounts Receivable, Recoveries	9,759
Allowance Balance at End of Period	2,030,522	1,763,457
Consumer
Allowance Balance at Beginning of Period	1,498,111	1,122,055
Provision for Loan Loss by Category	(134,166,000)	24,893,000
Allowance for Doubtful Accounts Receivable, Charge-offs	(120,427)	(54,738)
Allowance for Doubtful Accounts Receivable, Recoveries	8,281	10,557
Allowance Balance at End of Period	1,251,799	1,102,767
Commercial Business
Allowance Balance at Beginning of Period	644,855	924,149
Provision for Loan Loss by Category	16,574,000	(211,990,000)
Allowance for Doubtful Accounts Receivable, Charge-offs	(188,730)	(72,811)
Allowance for Doubtful Accounts Receivable, Recoveries	525	12,078
Allowance Balance at End of Period	473,224	651,426
Commercial Real Estate
Allowance Balance at Beginning of Period	10,543,607	8,752,732
Provision for Loan Loss by Category	523,482,000	2,255,465,000
Allowance for Doubtful Accounts Receivable, Charge-offs	(2,285,896)	(1,023,274)
Allowance for Doubtful Accounts Receivable, Recoveries	147,589
Allowance Balance at End of Period	8,928,782	9,984,923
Total Loans
Allowance Balance at Beginning of Period	14,615,198	12,501,800
Provision for Loan Loss by Category	725,000,000	2,300,000,000
Allowance for Doubtful Accounts Receivable, Charge-offs	(2,822,025)	(1,321,862)
Allowance for Doubtful Accounts Receivable, Recoveries	166,154	22,635
Allowance Balance at End of Period	$ 12,684,327	$ 13,502,573

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Investment And Mortgage-Backed Securities, Available For Sale: Schedule of Amortized Cost and Fair Value of Held to Maturity Securities by Contractual Maturity (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Amortized Cost and Fair Value of Held to Maturity Securities by Contractual Maturity

	Amortized	Fair
	Cost	Value
Less Than One Year	$1,000,000	$1,045,040
One – Five Years	5,368,392	5,505,044
Over Five – Ten Years	7,990,319	8,039,860
More Than Ten Years	7,580,513	7,961,832
Mortgage-Backed Securities	43,150,174	45,152,382
Total	$65,089,398	$67,704,158

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Investment And Mortgage-Backed Securities, Available For Sale: Marketable Securities Available for Sale Securities Policy (Policies)

3 Months Ended

Jun. 30, 2012

Policies

Marketable Securities Available for Sale Securities Policy

FHLB securities, FNMA and FHLMC bonds, and FNMA and FHLMC mortgage-backed securities are issued by government-sponsored enterprises (“GSEs”).  GSEs are not backed by the full faith and credit of the United States government.  SBA bonds are backed by the full faith and credit of the United States government. Included in the tables above in mortgage-backed securities are GNMA mortgage-backed securities, which are also backed by the full faith and credit of the United States government.  At June 30, 2012 and March 31, 2012, the Company held an amortized cost and fair value of $147.8 million$147,800,000 and $153.5 million, respectively, and $143.8 million and $149.3 million, respectively, in GNMA mortgage-backed securities included in mortgage-backed securities listed above. All mortgage-backed securities in the Company’s portfolio are either GSEs or GNMA mortgage-backed securities. The balance does not include any private label mortgage-backed securities.

The Bank received approximately $7.8 million and $8.3 million, respectively, in proceeds from sales of available for sale securities during the quarters ended June 30, 2012 and 2011 and recognized $104,000 and $171,000 in gross gains during the quarters ended June 30, 2012 and June 30, 2011, respectively.

The amortized cost and fair value of investment and mortgage-backed securities available for sale at June 30, 2012 are shown below by contractual maturity.  Expected maturities will differ from contractual maturities because borrowers have the right to prepay obligations with or without call or prepayment penalties. Mortgage-backed securities are presented as a separate line item since paydowns are expected to occur before the contractual maturity dates.

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Loans Receivable, Net: Schedule of Financing Receivables Allowance for Loan Losses Individually and Collectively Evaluated for Impairment (Details) (USD $)	Jun. 30, 2012	Mar. 31, 2012
Residential Real Estate
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment	$ 34,917	$ 155,000
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	1,995,605	1,773,625
Total Financing receivable Allowance for Credit Losses Individually and Collectively Evaluated for Impairment	2,030,522	1,928,625
Consumer
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment		19,568
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	1,251,799	1,478,543
Total Financing receivable Allowance for Credit Losses Individually and Collectively Evaluated for Impairment	1,251,799	1,498,111
Commercial Business
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment		148,610
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	473,224	496,245
Total Financing receivable Allowance for Credit Losses Individually and Collectively Evaluated for Impairment	473,224	644,855
Commercial Real Estate
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment	9,624	1,313,670
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	8,919,158	9,229,937
Total Financing receivable Allowance for Credit Losses Individually and Collectively Evaluated for Impairment	8,928,782	10,543,607
Total Loans
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment	44,541	1,636,848
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	12,639,786	12,978,350
Total Financing receivable Allowance for Credit Losses Individually and Collectively Evaluated for Impairment	$ 12,684,327	$ 14,615,198

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Investment And Mortgage-Backed Securities, Available For Sale: Schedule of Held to Maturity Securities by Length of Time in Continuous Unrealized Loss Position (Details) (USD $)	Mar. 31, 2012
FHLB Securities
Held to Maturity Securities Gross Unrealized Losses	$ 13,517
Federal Farm Credit Securities
Held to Maturity Securities Gross Unrealized Losses	23,410
FNMA and FHLMC Bonds
Held to Maturity Securities Gross Unrealized Losses	49,147
Total Securities
Held to Maturity Securities Gross Unrealized Losses	86,074
Less than 12 Months | FHLB Securities
Held to Maturity Securities Continuous Unrealized Loss Position Fair Value	4,532,636
Held to Maturity Securities Continuous Unrealized Loss Position Gross Unrealized Losses	13,517
Less than 12 Months | Federal Farm Credit Securities
Held to Maturity Securities Continuous Unrealized Loss Position Fair Value	976,590
Held to Maturity Securities Continuous Unrealized Loss Position Gross Unrealized Losses	23,410
Less than 12 Months | FNMA and FHLMC Bonds
Held to Maturity Securities Continuous Unrealized Loss Position Fair Value	4,939,150
Held to Maturity Securities Continuous Unrealized Loss Position Gross Unrealized Losses	49,147
Less than 12 Months | Total Securities
Held to Maturity Securities Continuous Unrealized Loss Position Fair Value	10,448,376
Held to Maturity Securities Continuous Unrealized Loss Position Gross Unrealized Losses	86,074
Total Amount | FHLB Securities
Held to Maturity Securities Continuous Unrealized Loss Position Fair Value	4,532,636
Held to Maturity Securities Gross Unrealized Losses	13,517
Total Amount | Federal Farm Credit Securities
Held to Maturity Securities Continuous Unrealized Loss Position Fair Value	976,590
Held to Maturity Securities Gross Unrealized Losses	23,410
Total Amount | FNMA and FHLMC Bonds
Held to Maturity Securities Continuous Unrealized Loss Position Fair Value	4,939,150
Held to Maturity Securities Gross Unrealized Losses	49,147
Total Amount | Total Securities
Held to Maturity Securities Continuous Unrealized Loss Position Fair Value	10,448,376
Held to Maturity Securities Gross Unrealized Losses	$ 86,074

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Earnings Per Share: Schedule of Effects of Dilutive Options and Warrants on Earnings Per Share (Details) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Basic Earnings Per Share
Common Stock Income	$ 620,728	$ 351,047
Common Stock Shares	2,944,001	2,944,001
Common Stock Per Share Amount	$ 0.21	$ 0.12
Diluted Earnings Per Share
Common Stock Income	$ 620,728	$ 351,047
Common Stock Shares	2,944,001	2,944,001
Common Stock Per Share Amount	$ 0.21	$ 0.12

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Loans Receivable, Net: Schedule of Age Analysis of Loans Receivable Past Due (Details) (USD $)	Jun. 30, 2012	Mar. 31, 2012
Residential Real Estate
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	$ 1,463,721	$ 2,778,235
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	166,352	742,345
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	3,353,517	3,638,929
Financing Receivable, Recorded Investment, Past Due	4,983,590	7,159,509
Financing Receivable, Recorded Investment, Current	90,690,446	90,648,408
Total Loans Receivable Age Analysis	95,674,036	97,807,917
Consumer
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	935,040	659,028
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	188,277	352,421
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	549,203	620,358
Financing Receivable, Recorded Investment, Past Due	1,672,520	1,631,807
Financing Receivable, Recorded Investment, Current	55,637,968	57,053,193
Total Loans Receivable Age Analysis	57,310,488	58,685,000
Commercial Business
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	230,448	174,420
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	224,071	209,418
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	45,888	20,808
Financing Receivable, Recorded Investment, Past Due	500,407	404,646
Financing Receivable, Recorded Investment, Current	8,393,262	9,147,929
Total Loans Receivable Age Analysis	8,893,669	9,552,575
Commercial Real Estate
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	21,559,130	18,332,136
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	2,466,893	4,682,891
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	24,292,887	18,378,165
Financing Receivable, Recorded Investment, Past Due	48,318,910	41,393,192
Financing Receivable, Recorded Investment, Current	213,884,105	234,924,705
Total Loans Receivable Age Analysis	262,203,015	276,317,897
Total Loans
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	24,188,339	21,943,819
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	3,045,593	5,987,075
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	28,241,495	22,658,260
Financing Receivable, Recorded Investment, Past Due	55,475,427	50,589,154
Financing Receivable, Recorded Investment, Current	368,605,781	391,774,235
Total Loans Receivable Age Analysis	$ 424,081,208	$ 442,363,389

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Loans Receivable, Net: Schedule of Impaired Loans With No Related Allowance and With An Allowance Recorded (Details) (USD $)	Jun. 30, 2012	Mar. 31, 2012
Impaired Loans Recorded Investment	$ 42,600,000	$ 40,800,000
With no related allowance recorded | Residential Real Estate
Impaired Loans Recorded Investment	2,570,235	2,201,560
Impaired Loans Unpaid Principal Balance	2,625,235	2,456,960
Impaired Loans Average Recorded Investment	2,385,897	2,066,066
Impaired Loans Interest Income Recognized	19,202	65,818
With no related allowance recorded | Consumer
Impaired Loans Recorded Investment	449,577	1,829,478
Impaired Loans Unpaid Principal Balance	513,577	1,879,478
Impaired Loans Average Recorded Investment	1,139,528	2,398,298
Impaired Loans Interest Income Recognized	3,498	86,180
With no related allowance recorded | Commercial Business
Impaired Loans Recorded Investment	14,143	23,752
Impaired Loans Unpaid Principal Balance	14,143	47,752
Impaired Loans Average Recorded Investment	18,948	294,894
Impaired Loans Interest Income Recognized	161	1,677
With no related allowance recorded | Commercial Real Estate
Impaired Loans Recorded Investment	38,506,851	27,425,873
Impaired Loans Unpaid Principal Balance	43,446,649	29,175,328
Impaired Loans Average Recorded Investment	32,966,362	24,020,047
Impaired Loans Interest Income Recognized	211,447	1,186,679
With an allowance recorded | Residential Real Estate
Impaired Loans Recorded Investment	835,364	1,342,501
Impaired Loans Unpaid Principal Balance	1,547,364	1,954,501
Impaired Loans Related Allowance	34,917	155,000
Impaired Loans Average Recorded Investment	1,088,933	586,109
Impaired Loans Interest Income Recognized		6,137
With an allowance recorded | Consumer
Impaired Loans Recorded Investment		19,568
Impaired Loans Unpaid Principal Balance		60,668
Impaired Loans Related Allowance		19,568
Impaired Loans Average Recorded Investment	9,784	28,181
With an allowance recorded | Commercial Business
Impaired Loans Recorded Investment		148,610
Impaired Loans Unpaid Principal Balance		148,610
Impaired Loans Related Allowance		148,610
Impaired Loans Average Recorded Investment	74,305	207,135
Impaired Loans Interest Income Recognized		5,608
With an allowance recorded | Commercial Real Estate
Impaired Loans Recorded Investment	254,450	7,805,844
Impaired Loans Unpaid Principal Balance	700,374	9,945,912
Impaired Loans Related Allowance	9,624	1,313,670
Impaired Loans Average Recorded Investment	4,030,147	4,687,210
Impaired Loans Interest Income Recognized		228,483
Total without and with a related allowance recorded | Residential Real Estate
Impaired Loans Recorded Investment	3,405,599	3,544,061
Impaired Loans Unpaid Principal Balance	4,172,599	4,411,461
Impaired Loans Related Allowance	34,917	155,000
Impaired Loans Average Recorded Investment	3,474,830	2,652,175
Impaired Loans Interest Income Recognized	19,202	71,955
Total without and with a related allowance recorded | Consumer
Impaired Loans Recorded Investment	449,577	1,849,046
Impaired Loans Unpaid Principal Balance	513,577	1,940,146
Impaired Loans Related Allowance		19,568
Impaired Loans Average Recorded Investment	1,149,312	2,426,479
Impaired Loans Interest Income Recognized	3,498	86,180
Total without and with a related allowance recorded | Commercial Business
Impaired Loans Recorded Investment	14,143	172,362
Impaired Loans Unpaid Principal Balance	14,143	196,362
Impaired Loans Related Allowance		148,610
Impaired Loans Average Recorded Investment	93,253	502,029
Impaired Loans Interest Income Recognized	161	7,285
Total without and with a related allowance recorded | Commercial Real Estate
Impaired Loans Recorded Investment	38,761,301	35,231,717
Impaired Loans Unpaid Principal Balance	44,147,023	39,121,240
Impaired Loans Related Allowance	9,624	1,313,670
Impaired Loans Average Recorded Investment	36,996,509	28,707,257
Impaired Loans Interest Income Recognized	211,447	1,415,162
Total without and with a related allowance recorded | Total Loans
Impaired Loans Recorded Investment	42,630,620	40,797,186
Impaired Loans Unpaid Principal Balance	48,847,342	45,669,209
Impaired Loans Related Allowance	44,541	1,636,848
Impaired Loans Average Recorded Investment	41,713,904	34,287,940
Impaired Loans Interest Income Recognized	$ 234,308	$ 1,580,582

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Loans Receivable, Net: Schedule of Financing Receivables, Non Accrual Status (Details) (Nonaccrual Loans, USD $)	Jun. 30, 2012		Mar. 31, 2012
Residential Real Estate
Loans Receivable Non-Accrual Amount	$ 3,353,517		$ 3,638,929
Loans Receivable Non-Accrual Percent	0.80%	[1]	0.80%	[1]
Loans Receivable Non-Accrual Amount Increase (Decrease)	(285,412)
Loans Receivable Non-Accrual Percent Increase (Decrease)	7.80%
Commercial Business
Loans Receivable Non-Accrual Amount	45,888		20,808
Loans Receivable Non-Accrual Percent	0.10%	[1]
Loans Receivable Non-Accrual Amount Increase (Decrease)	25,080
Loans Receivable Non-Accrual Percent Increase (Decrease)	120.50%
Commercial Real Estate
Loans Receivable Non-Accrual Amount	24,292,887		18,378,165
Loans Receivable Non-Accrual Percent	5.70%	[1]	4.20%	[1]
Loans Receivable Non-Accrual Amount Increase (Decrease)	5,914,722
Loans Receivable Non-Accrual Percent Increase (Decrease)	32.20%
Consumer
Loans Receivable Non-Accrual Amount	549,203		620,358
Loans Receivable Non-Accrual Percent	0.10%	[1]	0.10%	[1]
Loans Receivable Non-Accrual Amount Increase (Decrease)	(71,155)
Loans Receivable Non-Accrual Percent Increase (Decrease)	11.50%
Total Non-Accrual Loans
Loans Receivable Non-Accrual Amount	28,241,495		22,658,260
Loans Receivable Non-Accrual Percent	6.70%	[1]	5.10%	[1]
Loans Receivable Non-Accrual Amount Increase (Decrease)	$ 5,583,235
Loans Receivable Non-Accrual Percent Increase (Decrease)	24.60%

[1] Percent of gross loans receivable, net of deferred fees and loans in process and loans held for sale.

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Investment And Mortgage-Backed Securities, Available For Sale (Details) (USD $)	Jun. 30, 2012	Mar. 31, 2012
Held to Maturity GNMA mortgage-backed securities amortized cost	$ 41,900,000	$ 42,200,000
Held to Maturity GNMA mortgage-backed securities fair value	$ 43,800,000	$ 43,900,000

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Carrying Amounts and Fair Value of Financial Instruments: Fair Value of Investment Securities Available for Sale Policy (Policies)

3 Months Ended

Jun. 30, 2012

Policies

Fair Value of Investment Securities Available for Sale Policy

Investment securities available for sale are recorded at fair value on a recurring basis. At June 30, 2012, the Company’s investment portfolio was comprised of government and agency bonds, mortgage-backed securities issued by government agencies or government sponsored enterprises, municipal securities and one equity investment. The portfolio did not contain any private label mortgage-backed securities. Fair value measurement is based upon prices obtained from third party pricing services who use independent pricing models which rely on a variety of factors including reported trades, broker/dealer quotes, benchmark yields, economic and industry events and other relevant market information. As such, these securities are classified as Level 2.

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Loans Receivable, Net: Schedule of Age Analysis of Loans Receivable Past Due (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Age Analysis of Loans Receivable Past Due

	June 30, 2012
			90 Day
			or More	Total		Total
	30-59 Days	60-89 Days	Past	Past		Loans
	Past Due	Past Due	Due	Due	Current	Receivable
Residential Real Estate	$1,463,721	$166,352	$3,353,517	$4,983,590	$90,690,446	$95,674,036
Consumer	935,040	188,277	549,203	1,672,520	55,637,968	57,310,488
Commercial Business	230,448	224,071	45,888	500,407	8,393,262	8,893,669
Commercial Real Estate	21,559,130	2,466,893	24,292,887	48,318,910	213,884,105	262,203,015
Total	$24,188,339	$3,045,593	$28,241,495	$55,475,427	$368,605,781	$424,081,208

	March 31, 2012
			90 Day
			or More	Total		Total
	30-59 Days	60-89 Days	Past	Past		Loans
	Past Due	Past Due	Due	Due	Current	Receivable
Residential Real Estate	$2,778,235	$742,345	$3,638,929	$7,159,509	$90,648,408	$97,807,917
Consumer	659,028	352,421	620,358	1,631,807	57,053,193	58,685,000
Commercial Business	174,420	209,418	20,808	404,646	9,147,929	9,552,575
Commercial Real Estate	18,332,136	4,682,891	18,378,165	41,393,192	234,924,705	276,317,897
Total	$21,943,819	$5,987,075	$22,658,260	$50,589,154	$391,774,235	$442,363,389

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Investment And Mortgage-Backed Securities, Available For Sale: Schedule of Available-for-sale Securities Reconciliation (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Available-for-sale Securities Reconciliation

	June 30, 2012
		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	value
FHLB Securities	$2,440,263	$71,377	$-	$2,511,640
FNMA and FHLMC Bonds	1,000,000	790	-	1,000,790
SBA Bonds	87,773,083	1,730,497	102,561	89,401,019
Tax Exempt Municipal Bonds	30,632,658	1,398,464	61,695	31,969,427
Mortgage-Backed Securities	224,933,434	8,589,965	141,795	233,381,604
Equity Securities	102,938	-	30,188	72,750
Total	$346,882,376	$11,791,093	336,239	$358,337,230

	March 31, 2012
		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	value
FHLB Securities	$2,634,234	$64,660	$-	$2,698,894
FNMA and FHLMC Bonds	2,926,566	560	5,275	2,921,851
SBA Bonds	85,064,224	1,357,490	142,912	86,278,802
Tax Exempt Municipal Bonds	23,231,375	971,739	77,389	24,125,725
Mortgage-Backed Securities	229,462,521	8,486,387	95,073	237,853,835
Equity Securities	102,938	-	27,188	75,750
Total	$343,421,858	$10,880,836	$347,837	$353,954,857

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Loans Receivable, Net: Schedule of Loans Receivable Credit Quality Indicators (Details) (USD $)	Jun. 30, 2012	Mar. 31, 2012
Loans Receivable Residential Real Estate	$ 95,674,036	$ 97,807,917
Loans and Leases Receivable, Gross, Consumer	57,310,488	58,685,000
Loans Receivable Commercial Business	8,893,669	9,552,575
Loans Receivable, Gross, Commercial, Real Estate	262,203,015	276,317,897
Pass
Loans Receivable Residential Real Estate	87,436,807	88,536,685
Loans and Leases Receivable, Gross, Consumer	55,352,127	57,113,676
Loans Receivable Commercial Business	7,932,730	8,608,378
Loans Receivable, Gross, Commercial, Real Estate	181,617,951	190,230,745
Total Loans Receivable by Credit Quality Indicator	332,339,615	344,489,484
Caution
Loans Receivable Residential Real Estate	225,553
Loans and Leases Receivable, Gross, Consumer	177,115	159,805
Loans Receivable Commercial Business	395,763	446,815
Loans Receivable, Gross, Commercial, Real Estate	18,860,609	21,874,264
Total Loans Receivable by Credit Quality Indicator	19,659,040	22,480,884
Special Mention
Loans Receivable Residential Real Estate	295,572	573,887
Loans and Leases Receivable, Gross, Consumer	103,146	27,604
Loans Receivable Commercial Business	177,500
Loans Receivable, Gross, Commercial, Real Estate	17,022,335	19,783,230
Total Loans Receivable by Credit Quality Indicator	17,598,553	20,384,721
Substandard
Loans Receivable Residential Real Estate	7,716,104	8,697,345
Loans and Leases Receivable, Gross, Consumer	1,678,100	1,383,915
Loans Receivable Commercial Business	387,676	497,382
Loans Receivable, Gross, Commercial, Real Estate	44,702,120	44,429,658
Total Loans Receivable by Credit Quality Indicator	54,484,000	55,008,300
Total Loans
Loans Receivable Residential Real Estate	95,674,036	97,807,917
Loans and Leases Receivable, Gross, Consumer	57,310,488	58,685,000
Loans Receivable Commercial Business	8,893,669	9,552,575
Loans Receivable, Gross, Commercial, Real Estate	262,203,015	276,317,897
Total Loans Receivable by Credit Quality Indicator	$ 424,081,208	$ 442,363,389

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Stock-Based Compensation: Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range

	June 30, 2012		June 30, 2011
		Weighted Average		Weighted Average
For the Quarter Ended	Shares	Exercise Price	Shares	Exercise Price
Balance, Beginning of Period	72,900	$22.62	81,400	$22.51
Options Granted	-	-	-	-
Options Exercised	-	-	-	-
Options Forfeited	-	-	7,000	21.72
Balance, End Of Period	72,900	$22.62	74,400	$22.59
Options Exercisable	44,000	$22.07	49,900	$21.91
Options Available For Grant	50,000		50,000

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Loans Receivable, Net: Schedule of Activity in Allowance for Loan Losses by Category (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Activity in Allowance for Loan Losses by Category

	For the Three Months Ended June 30, 2012
	Residential		Commercial	Commercial
	Real Estate	Consumer	Business	Real Estate	Total
Allowance For Loan Losses
Beginning Balance	$1,928,625	$1,498,111	$644,855	$10,543,607	$14,615,198
Provision	319,110	(134,166)	16,574	523,482	725,000
Charge-Offs	(226,972)	(120,427)	(188,730)	(2,285,896)	(2,822,025)
Recoveries	9,759	8,281	525	147,589	166,154
Ending Balance	$2,030,522	$1,251,799	$473,224	$8,928,782	$12,684,327

	For the Three Months Ended June 30, 2011
	Residential		Commercial	Commercial
	Real Estate	Consumer	Business	Real Estate	Total
Allowance For Loan Losses
Beginning Balance	$1,702,864	$1,122,055	$924,149	$8,752,732	$12,501,800
Provision	231,632	24,893	(211,990)	2,255,465	2,300,000
Charge-Offs	(171,039)	(54,738)	(72,811)	(1,023,274)	(1,321,862)
Recoveries	-	10,557	12,078	-	22,635
Ending Balance	$1,763,457	$1,102,767	$651,426	$9,984,923	$13,502,573

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Investment And Mortgage-Backed Securities, Available For Sale: Marketable Securities Available for Sale Securities Policy (Details) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Mar. 31, 2012
Available for Sale GNMA mortgage-backed securities amortized cost	$ 147,800,000		$ 143,800,000
Available for sale GNMA mortgage-backed securities fair value	153,500,000		149,300,000
Proceeds From Sale of Investment Securities Available For Sale	7,800,000	8,300,000
Available-for-sale Securities, Gross Realized Gains	$ 104,000	$ 171,000

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Carrying Amounts and Fair Value of Financial Instruments (Details) (USD $)			6 Months Ended
	Jun. 30, 2012	Mar. 31, 2012	Jun. 30, 2012 Impaired Loans	Jun. 30, 2012 Foreclosed Assets
Liabilities, Fair Value Disclosure, Recurring	$ 0	$ 0
Liabilities, Fair Value Disclosure, Nonrecurring	0	0
Fair Value Measurements Level 3			$ 42,586,079	$ 13,745,651
Fair Value Measurements, Valuation Techniques			Appraised Value/Discounted Cash Flows	Appraised Value/Comparable Sales
Significant Unobservable Inputs Level 3			Appraisals And/ Or Sales Of Comparable Properties	Appraisals And/ Or Sales Of Comparable Properties/Bids
Level 3 Assets and Liabilities Percentage Range			0% - 98%	0% - 91%

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Investment And Mortgage-Backed Securities, Available For Sale: Schedule of Held to Maturity Securities by Length of Time in Continuous Unrealized Loss Position (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Held to Maturity Securities by Length of Time in Continuous Unrealized Loss Position

	March 31, 2012
	Less than 12 Months		12 Months or More		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
	Value	Losses	Value	Losses	Value	Losses
FHLB Securities	$4,532,636	$13,517	$-	$-	$4,532,636	$13,517
FFCB Securities	976,590	23,410	-	-	976,590	23,410
FNMA And FHLMC Bonds	4,939,150	49,147	-	-	4,939,150	49,147
Total	$10,448,376	$86,074	$-	$-	$10,448,376	$86,074

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Basis of Presentation

3 Months Ended

Jun. 30, 2012

Notes

Basis of Presentation

1.  Basis of Presentation

The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and accounting principles generally accepted in the United States of America; therefore, they do not include all disclosures necessary for a complete presentation of financial condition, results of operations, and cash flows.  Such statements are unaudited but, in the opinion of management, reflect all adjustments, which are of a normal recurring nature and necessary for a fair presentation of results for the selected interim periods.  Users of financial information produced for interim periods are encouraged to refer to the footnotes contained in the audited financial statements appearing in Security Federal Corporation’s (the “Company”) 2012 Annual Report to Shareholders which was filed as an exhibit to our Annual Report on Form 10-K for the year ended March 31, 2012 (“2012 10-K”) when reviewing interim financial statements.  The results of operations for the three month period ended June 30, 2012 are not necessarily indicative of the results that may be expected for the entire fiscal year.

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Carrying Amounts and Fair Value of Financial Instruments: Schedule of Assets Measured on Recurring Basis (Details) (Assets, USD $)	Jun. 30, 2012	Mar. 31, 2012
FHLB Securities
Significant Other Observable Inputs (Level 2)	$ 2,511,640	$ 2,698,894
FNMA and FHLMC Bonds
Significant Other Observable Inputs (Level 2)	1,000,790	2,921,851
SBA Bonds
Significant Other Observable Inputs (Level 2)	89,401,019	86,278,802
Tax Exempt Municipal Securities
Significant Other Observable Inputs (Level 2)	31,969,427
Mortgage-Backed Securities
Significant Other Observable Inputs (Level 2)	233,381,604	237,853,835
Equity Securities
Significant Other Observable Inputs (Level 2)	72,750	75,750
Total Securities
Significant Other Observable Inputs (Level 2)	358,337,230	353,954,857
Tax Exempt Municipal Bonds
Significant Other Observable Inputs (Level 2)		$ 24,125,725

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Investment And Mortgage-Backed Securities, Available For Sale: Schedule of Amortized Cost and Fair Value of Available for Sale Securities by Contractual Maturity (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Amortized Cost and Fair Value of Available for Sale Securities by Contractual Maturity

	Amortized	Fair
	Cost	Value
Less Than One Year	$-	$-
One – Five Years	11,294,504	11,549,597
Over Five – Ten Years	49,782,758	50,761,034
After Ten Years	60,871,680	62,644,995
Mortgage-Backed Securities	224,933,434	233,381,604
Total	$346,882,376	$358,337,230

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Carrying Amounts and Fair Value of Financial Instruments: Fair Value of Goodwill and Other Intangible Assets Policy (Policies)

3 Months Ended

Jun. 30, 2012

Policies

Fair Value of Goodwill and Other Intangible Assets Policy

Goodwill and identified intangible assets are subject to impairment testing. The Company’s approach to testing for impairment is to compare the business unit’s carrying value to the implied fair value based on a multiple of revenue approach. Impairment testing is performed annually as of September 30th or when events or circumstances occur indicating that goodwill of the reporting unit might be impaired.  In the event the fair value is determined to be less than the carrying value, the asset is recorded at fair value as determined by the valuation model. As such, goodwill and other intangible assets subjected to nonrecurring fair value adjustments are classified as Level 3.

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Carrying Amounts and Fair Value of Financial Instruments: Fair Value of Foreclosed Assets Policy (Policies)

3 Months Ended

Jun. 30, 2012

Policies

Fair Value of Foreclosed Assets Policy

Foreclosed assets are adjusted to fair value upon transfer of the loans to foreclosed assets. Subsequently, foreclosed assets are carried at the lower of carrying value or fair value. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. The Company records these assets as nonrecurring Level 3.

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Earnings Per Share: Schedule of Reconciliation of Net Income to Net Income Available to Common Shareholders (Details) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Earnings Available to Common Shareholders Net Income	$ 730,728	$ 461,047
Earnings Available to Common Shareholders Preferred Stock Dividends	110,000	110,000
Net Income Available to Common Shareholders by Quarter	$ 620,728	$ 351,047

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Investment And Mortgage-Backed Securities, Available For Sale: Schedule of Available for Sale Securities by Length of Time in Continuo9us Unrealized Loss Position (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Available for Sale Securities by Length of Time in Continuo9us Unrealized Loss Position

	June 30, 2012
	Less than 12 Months		12 Months or More		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
	Value	Losses	Value	Losses	Value	Losses
SBA Bonds	$10,726,866	$102,561	$-	$-	$10,726,866	$102,561
Tax Exempt Municipal Bond	8,577,089	61,695	-	-	8,577,089	61,695
Mortgage-Backed Securities	21,961,960	141,795	-	-	21,961,960	141,795
Equity Securities	-	-	72,750	30,188	72,750	30,188
Total	$41,265,915	$306,051	$72,750	$30,188	$41,338,665	$336,239

	March 31, 2012
	Less than 12 Months		12 Months or More		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
	Value	Losses	Value	Losses	Value	Losses
FNMA And FHLMC Bonds	$1,921,291	$5,275	$-	$-	$1,921,291	$5,275
SBA Bonds	12,508,821	142,912	-	-	12,508,821	142,912
Tax Exempt Municipal Bond	3,390,580	77,389	-	-	3,390,580	77,389
Mortgage-Backed Securities	23,053,784	95,073	-	-	23,053,784	95,073
Equity Securities	-	-	75,750	27,188	75,750	27,188
Total	$40,874,476	$320,649	$75,750	$27,188	$40,950,226	$347,837

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Carrying Amounts and Fair Value of Financial Instruments: Fair Value of Off Balance Sheet Financial Instruments Policy (Policies)

3 Months Ended

Jun. 30, 2012

Policies

Fair Value of Off Balance Sheet Financial Instruments Policy

Cash and cash equivalents—The carrying amount of these financial instruments approximates fair value. All mature within 90 days and do not present unanticipated credit concerns. These are classified as Level 1.

Certificates of deposits with other banks—Fair value is based on market prices for similar assets. These are classified as Level 1.

Investment securities held to maturity—Securities held to maturity are valued at quoted market prices or dealer quotes. These are classified as Level 2.

Loans—The fair value of loans are estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. As discount rates are based on current loan rates as well as management estimates, the fair values presented may not be indicative of the value negotiated in an actual sale. These are classified as Level 2.

FHLB Stock—The fair value approximates the carrying value. This is classified as Level 1.

Deposits—The fair value of demand deposits, savings accounts, and money market accounts is the amount payable on demand at the reporting date. These are classified as Level 1. The fair value of fixed-maturity certificates of deposits is estimated by discounting the future cash flows using rates currently offered for deposits of similar remaining maturities. These are classified as Level 2.

 FHLB Advances—Fair value is estimated based on discounted cash flows using current market rates for borrowings with similar terms. These are classified as Level 2.

Other Borrowed Money—The carrying value of these short term borrowings approximates fair value. These are classified as Level 1.

Senior Convertible Debentures— The fair value is estimated by discounting the future cash flows using the current rates at which similar debenture offerings with similar terms and maturities would be issued by similar institutions. As discount rates are based on current debenture rates as well as management estimates, the fair values presented may not be indicative of the value negotiated in an actual sale. These are classified as Level 2.

Junior Subordinated Debentures—The carrying value of junior subordinated debentures approximates fair value. These are classified as Level 2.

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Carrying Amounts and Fair Value of Financial Instruments: Off Balance Sheet Financial Commitments Policy (Policies)

3 Months Ended

Jun. 30, 2012

Policies

Off Balance Sheet Financial Commitments Policy

At June 30, 2012, the Bank had $33.4 million of off-balance sheet financial commitments.  These commitments are to originate loans and unused consumer lines of credit and credit card lines.  Because these obligations are based on current market rates, if funded, the original principal is considered to be a reasonable estimate of fair value.

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Security Federal Corporation and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash Flows From Operating Activities:
Net Income	$ 730,728	$ 461,047
Adjustments To Reconcile Net Income To Net Cash Provided By Operating Activities:
Depreciation And Amortization Expense	354,164	368,806
Amortization of Intangible Assets	12,501	22,520
Stock Option Compensation Expense	8,281	8,281
Discount Accretion And Premium Amortization	1,796,814	1,065,030
Provisions For Losses On Loans	725,000	2,300,000
Gain On Sales Of Investments Available For Sale	(4,063)	(102,865)
Gain On Sales Of Mortgage-Backed Securities Available For Sale	(99,596)	(68,359)
Gain On Sales Of Loans	(132,952)	(107,270)
Gain On Sale Of Real Estate	(9,286)	(62,222)
Write Down On Real Estate	541,500
Amortization Of Deferred Fees On Loans	(1,645)	(6,406)
Mandatorily Redeemable Financial Instrument Valuation		(50,000)
Income From Bank Owned Life Insurance	(105,000)	(105,000)
Proceeds From Sale Of Loans Held For Sale	6,661,202	11,132,175
Origination Of Loans Held For Sale	(7,014,980)	(9,910,939)
(Increase) Decrease In Accrued Interest Receivable:
Loans	295,660	118,001
Mortgage-Backed Securities	34,731	2,581
Investments	(245,564)	(219,347)
(Decrease) Increase In Advance Payments By Borrowers	136,686	128,736
Other, Net	(666,302)	(161,204)
Net Cash Provided By Operating Activities	3,017,879	4,813,565
Cash Flows From Investing Activities:
Principal Repayments On Mortgage-Backed Securities Available For Sale	13,192,807	11,555,205
Principal Repayments On Mortgage-Backed Securities Held To Maturity	440,472	375,243
Purchase Of Investment Securities Available For Sale	(15,664,373)	(11,597,706)
Purchase Of Mortgage-Backed Securities Available For Sale	(15,566,323)	(8,913,028)
Purchase of Investment Securities Held To Maturity		(1,990,350)
Purchase Of Mortgage-Backed Securities Held To Maturity		(8,704,676)
Maturities Of Investment Securities Available For Sale	5,265,399	3,547,649
Maturities of Investment Securities Held To Maturity	2,000,000	1,000,000
Proceeds From Sale of Investment Securities Available For Sale	7,800,000	8,300,000
Proceeds From Sale of Mortgage-Backed Securities Available For Sale	6,041,858	3,592,201
Purchase Of FHLB Stock		(34,343)
Redemption Of FHLB Stock	1,542,604	1,247,628
Decrease In Loans To Customers	14,054,080	11,350,642
Proceeds From Sale Of Repossessed Assets	1,035,240	2,739,952
Purchase And Improvement Of Premises And Equipment	(51,527)	(27,412)
Net Cash Provided By Investing Activities	14,013,536	8,799,755
Cash Flows From Financing Activities:
Increase (Decrease) In Deposit Accounts	(1,681,382)	(6,164,151)
Proceeds From FHLB Advances	18,800,000	34,400,000
Repayment Of FHLB Advances	(32,704,186)	(39,154,103)
Net Proceeds (Repayments) Of Other Borrowings	221,509	(480,676)
Dividends To Preferred Shareholders	(110,000)	(110,000)
Dividends To Common Shareholders	(235,520)	(235,520)
Net Cash Used By Financing Activities	(15,709,579)	(11,744,450)
Net Increase (Decrease) In Cash And Cash Equivalents	1,321,836	1,868,870
Cash And Cash Equivalents At Beginning Of Period	9,331,372	7,835,638
Cash And Cash Equivalents At End Of Period	10,653,208	9,704,508
Supplemental Disclosure Of Cash Flows Information:
Cash Paid During The Period For Interest	2,837,441	3,476,818
Cash Paid During The Period For Income Taxes	31,781	456,321
Additions To Repossessed Assets Acquired Through Foreclosure	1,153,006	1,897,773
Change In Unrealized Gain or Loss On Securities Available For Sale, Net of Taxes	$ 571,800	$ 2,707,501

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Accounting and Reporting Changes: New Accounting Pronouncements Policy (Policies)

3 Months Ended

Jun. 30, 2012

Policies

New Accounting Pronouncements Policy

The following is a summary of recent authoritative pronouncements that could impact the accounting, reporting, and/or disclosure of financial information by the Company.

In September 2011, the Intangibles topic of the Accounting Standards Codification (“ASC”) was amended to permit an entity to consider qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test.  These amendments were effective for the Company on April 1, 2012.

In April 2011, the criteria used to determine effective control of transferred assets in the Transfers and Servicing topic of the ASC  was amended by Accounting Standard Update (“ASU”) 2011-03.  The requirement for the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms and the collateral maintenance implementation guidance related to that criterion were removed from the assessment of effective control.  The other criteria to assess effective control were not changed.  The amendments were effective for the Company on April 1, 2012 and had no effect on the financial statements.

ASU 2011-04 was issued in May 2011 to amend the Fair Value Measurement topic of the ASC by clarifying the application of existing fair value measurement and disclosure requirements and by changing particular principles or requirements for measuring fair value or for disclosing information about fair value measurements.  These amendments were effective for the Company beginning April 1, 2012 and had no effect on the financial statements.

The Comprehensive Income topic of the ASC was amended in June 2011.  The amendment eliminates the option to present other comprehensive income as a part of the statement of changes in stockholders’ equity and requires consecutive presentation of the statement of net income and other comprehensive income.  The amendments were applicable to the Company on April 1, 2012 and have been applied retrospectively.  In December 2011, the topic was further amended to defer the effective date of presenting reclassification adjustments from other comprehensive income to net income on the face of the financial statements.  Companies should continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect prior to the amendments while the Financial Accounting Standards Board (“FASB”) redeliberates future requirements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

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Carrying Amounts and Fair Value of Financial Instruments: Schedule of Fair Value of Assets and Liabilities on Nonrecurring Basis (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Fair Value of Assets and Liabilities on Nonrecurring Basis

				Balance At
	Level 1	Level 2	Level 3	June 30, 2012
Assets:
Mortgage Loans Held For Sale	$-	$3,158,501	-	$3,158,501
Impaired Loans (1)	-	-	42,586,079	42,586,079
Foreclosed Assets	-	-	13,745,651	13,745,651
Total	$-	$3,158,501	56,331,730	$59,490,231

(1) IMPAIRED LOANS ARE REPORTED NET OF SPECIFIC RESERVES OF $44,541.

				Balance At
	Level 1	Level 2	Level 3	March 31, 2012
Assets:
Mortgage Loans Held For Sale	$-	$2,671,771	$-	$2,671,771
Impaired Loans (1)	-	-	39,160,338	39,160,338
Foreclosed Assets	-	-	14,160,099	14,160,099
Total	$-	$2,671,771	$53,320,437	$55,992,208

(1) IMPAIRED LOANS ARE REPORTED NET OF SPECIFIC RESERVES OF $1,636,848.

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Loans Receivable, Net: Schedule of Financing Receivables Allowance for Loan Losses Individually and Collectively Evaluated for Impairment (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Financing Receivables Allowance for Loan Losses Individually and Collectively Evaluated for Impairment

	June 30, 2012
	Allowance For Loan Losses
	Individually	Collectively
	Evaluated For	Evaluated For
	Impairment	Impairment	Total
Residential Real Estate	$34,917	$1,995,605	$2,030,522
Consumer	-	1,251,799	1,251,799
Commercial Business	-	473,224	473,224
Commercial Real Estate	9,624	8,919,158	8,928,782
Total	$44,541	$12,639,786	$12,684,327

	March 31, 2012
	Allowance For Loan Losses
	Individually	Collectively
	Evaluated For	Evaluated For
	Impairment	Impairment	Total
Residential Real Estate	$155,000	$1,773,625	$1,928,625
Consumer	19,568	1,478,543	1,498,111
Commercial Business	148,610	496,245	644,855
Commercial Real Estate	1,313,670	9,229,937	10,543,607
Total	$1,636,848	$12,978,350	$14,615,198

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Investment And Mortgage-Backed Securities, Available For Sale: Schedule of Amortized Cost and Fair Value of Held to Maturity Securities by Contractual Maturity (Details) (USD $)	Jun. 30, 2012
Less Than One Year
Held to Maturity Securities Amortized Cost by Contractual Maturity	$ 1,000,000
Held to Maturity Securities Fair Value by Contractual Maturity	1,045,040
One to Five Years
Held to Maturity Securities Amortized Cost by Contractual Maturity	5,368,392
Held to Maturity Securities Fair Value by Contractual Maturity	5,505,044
Over Five to Ten Years
Held to Maturity Securities Amortized Cost by Contractual Maturity	7,990,319
Held to Maturity Securities Fair Value by Contractual Maturity	8,039,860
After Ten Years
Held to Maturity Securities Amortized Cost by Contractual Maturity	7,580,513
Held to Maturity Securities Fair Value by Contractual Maturity	7,961,832
Mortgagae-Backed Securities
Held to Maturity Securities Amortized Cost by Contractual Maturity	43,150,174
Held to Maturity Securities Fair Value by Contractual Maturity	45,152,382
Total Securities
Held to Maturity Securities Amortized Cost by Contractual Maturity	65,089,398
Held to Maturity Securities Fair Value by Contractual Maturity	$ 67,704,158

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Security Federal Corporation and Subsidiaries Consolidated Balance Sheets (Unaudited) (USD $)	Jun. 30, 2012	Mar. 31, 2012
Assets:
Cash And Cash Equivalents	$ 10,653,208	$ 9,331,372
Certificates of Deposit with Other Banks	1,727,657	1,727,210
Investment And Mortgage-Backed Securities:
Available For Sale	358,337,230	353,954,857
Held To Maturity	65,089,398	67,676,210
Total Investment And Mortgage-Backed Securities	423,426,628	421,631,067
Loans Receivable, Net
Held For Sale	3,158,501	2,671,771
Held For Investment	409,908,394	425,838,835
Total Loans Receivable, Net	413,066,895	428,510,606
Accrued Interest Receivable:
Loans	1,422,592	1,718,252
Mortgage-Backed Securities	953,180	987,911
Investments	1,038,772	793,655
Premises And Equipment, Net	18,423,662	18,726,299
Federal Home Loan Bank ("FHLB") Stock, At Cost	6,928,496	8,471,100
Bank Owned Life Insurance	10,941,305	10,836,305
Repossessed Assets Acquired In Settlement Of Loans	13,745,651	14,160,099
Intangible Assets, Net	86,976	99,477
Goodwill	1,199,754	1,199,754
Other Assets	6,496,787	6,443,501
Total Assets	910,111,563	924,636,608
Liabilities:
Deposit Accounts	694,519,674	696,201,056
Advances From FHLB	108,165,616	122,069,802
Other Borrowed Money	10,022,895	9,801,386
Advance Payments By Borrowers For Taxes And Insurance	487,150	350,464
Junior Subordinated Debentures	5,155,000	5,155,000
Senior Convertible Debentures	6,084,000	6,084,000
Other Liabilities	3,940,053	4,203,014
Total Liabilities	828,374,388	843,864,722
Shareholders' Equity:
Serial Preferred Stock, $.01 Par Value	22,000,000	22,000,000
Common Stock, $.01 Par Value	31,449	31,449
Warrant Issued In Conjunction With Serial Preferred Stock	400,000	400,000
Additional Paid-In Capital	11,634,526	11,626,245
Treasury Stock, at Cost	(4,330,712)	(4,330,712)
Accumulated Other Comprehensive Income	7,105,373	6,533,573
Retained Earnings, Substantially Restricted	44,896,539	44,511,331
Total Shareholders' Equity	81,737,175	80,771,886
Total Liabilities And Shareholders' Equity	$ 910,111,563	$ 924,636,608

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Investment And Mortgage-Backed Securities, Available For Sale: Schedule of Held to Maturity Securities Amortized Cost, Gross Unrealized Losses and Fair Value (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Held to Maturity Securities Amortized Cost, Gross Unrealized Losses and Fair Value

	June 30, 2012
		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	Value
FHLB Securities	$10,547,804	$196,752	$-	10,744,556
Federal Farm Credit Securities	1,999,540	13,720	-	2,013,260
FNMA and FHLMC Bonds	5,985,244	46,006	-	6,031,250
SBA Bonds	3,251,636	356,074	-	3,607,710
Mortgage-Backed Securities	43,150,174	2,002,208	-	45,152,382
Equity Securities	155,000	-	-	155,000
Total	$65,089,398	$2,614,760	$-	67,704,158

	March 31, 2012
		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	Value
FHLB Securities	$11,554,627	$221,726	$13,517	$11,762,836
FFCB Securities	1,999,516	6,534	23,410	1,982,640
FNMA and FHLMC Bonds	6,983,004	19,863	49,147	6,953,720
SBA Bonds	3,251,151	305,430	-	3,556,581
Mortgage-Backed Securities	43,732,912	1,822,180	-	45,555,092
Equity Securities	155,000	-	-	155,000
Total	$67,676,210	$2,375,733	$86,074	$69,965,869

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Security Federal Corporation and Subsidiaries Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) (USD $)	3 Months Ended
	Jun. 30, 2012
Taxes on Unrealized Holding Gains On Securities Available For Sale	$ 389,848
Taxes on Reclassification Adjustment For Gains Included In Net Income	$ 39,390

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Stock-Based Compensation: Schedule of Stock Options Outstanding (Details) (USD $)	Jun. 30, 2012
Grant Date 09/01/2003
Stock Options Outstanding	2,400
Stock Options Price	$ 24.00
Stock Options Expiration Date	Aug. 31, 2013
Grant Date 12/01/2003
Stock Options Outstanding	3,000
Stock Options Price	$ 23.65
Stock Options Expiration Date	Nov. 30, 2013
Grant Date 01/01/2004
Stock Options Outstanding	5,000
Stock Options Price	$ 24.22
Stock Options Expiration Date	Dec. 31, 2013
Grant Date 03/08/2004
Stock Options Outstanding	7,000
Stock Options Price	$ 21.43
Stock Options Expiration Date	Mar. 08, 2014
Grant Date 06/07/2004
Stock Options Outstanding	2,000
Stock Options Price	$ 24.00
Stock Options Expiration Date	Jun. 07, 2014
Grant Date 01/01/2005
Stock Options Outstanding	19,000
Stock Options Price	$ 20.55
Stock Options Expiration Date	Dec. 31, 2014
Grant Date 01/01/2006
Stock Options Outstanding	4,000
Stock Options Price	$ 23.91
Stock Options Expiration Date	Jan. 01, 2016
Grant Date 08/24/2006
Stock Options Outstanding	6,000
Stock Options Price	$ 23.03
Stock Options Expiration Date	Aug. 24, 2016
Grant Date 05/24/2007
Stock Options Outstanding	2,000
Stock Options Price	$ 24.34
Stock Options Expiration Date	May 24, 2017
Grant Date 07/09/2007
Stock Options Outstanding	1,000
Stock Options Price	$ 24.61
Stock Options Expiration Date	Jul. 09, 2017
Grant Date 10/01/2007
Stock Options Outstanding	2,000
Stock Options Price	$ 24.28
Stock Options Expiration Date	Oct. 01, 2017
Grant Date 01/01/2008
Stock Options Outstanding	15,000
Stock Options Price	$ 23.49
Stock Options Expiration Date	Jan. 01, 2018
Grant Date 05/19/2008
Stock Options Outstanding	2,500
Stock Options Price	$ 22.91
Stock Options Expiration Date	May 19, 2018
Grant Date 07/01/2008
Stock Options Outstanding	2,000
Stock Options Price	$ 22.91
Stock Options Expiration Date	Jul. 01, 2018

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Earnings Per Share: Schedule of Reconciliation of Net Income to Net Income Available to Common Shareholders (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Reconciliation of Net Income to Net Income Available to Common Shareholders

	For the Quarter Ended June 30,
	2012	2011
Earnings Available To Common Shareholders:
Net Income	$730,728	$461,047
Preferred Stock Dividends	110,000	110,000
Net Income Available To Common Shareholders	$620,728	$351,047

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Carrying Amounts and Fair Value of Financial Instruments: Off Balance Sheet Financial Commitments Policy (Details) (USD $)	Jun. 30, 2012
Off Balance Sheet Financial Commitments	$ 33,400,000

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Earnings Per Share: Earnings Per Share Policy (Policies)

3 Months Ended

Jun. 30, 2012

Policies

Earnings Per Share Policy

Accounting guidance specifies the computation, presentation and disclosure requirements for earnings per share (“EPS”) for entities with publicly held common stock or potential common stock such as options, warrants, convertible securities or contingent stock agreements if those securities trade in a public market. Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding.  Diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive common shares had been issued.  The dilutive effect of options outstanding under the Company’s stock option plan is reflected in diluted earnings per share by application of the treasury stock method.

Net income available to common shareholders represents consolidated net income adjusted for preferred dividends declared, accretions of discounts and amortization of premiums on preferred stock issuances and cumulative dividends related to the current dividend period that have not been declared as of period end. The following table provides a reconciliation of net income to net income available to common shareholders for the periods presented:

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Earnings Per Share: Schedule of Effects of Dilutive Options and Warrants on Earnings Per Share (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Effects of Dilutive Options and Warrants on Earnings Per Share

	For the Quarter Ended
	June 30, 2012
	Income
	(Numerator)	Shares
	Amount	(Denominator)	Per Share
Basic EPS	$620,728	2,944,001	$0.21
Effect Of Diluted Securities:
Stock Options And Warrants	-	-	-
Diluted EPS	$620,728	2,944,001	$0.21

	For the Quarter Ended
	June 30, 2011
	Income
	(Numerator)	Shares
	Amount	(Denominator)	Per Share
Basic EPS	$351,047	2,944,001	$0.12
Effect Of Diluted Securities:
Stock Options And Warrants	-	-	-
Diluted EPS	$351,047	2,944,001	$0.12

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Carrying Amounts and Fair Value of Financial Instruments: Fair Vaue of Financial Instruments Policy (Policies)

3 Months Ended

Jun. 30, 2012

Policies

Fair Vaue of Financial Instruments Policy

Accounting guidance emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1	Valuation is based upon quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market, as well as U.S. Treasuries and money market funds.
Level 2	Valuation is based upon quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments, mortgage-backed securities, municipal bonds, corporate debt securities and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes certain derivative contracts and impaired loans.
Level 3	Valuation is generated from model-based techniques that use at least one significant assumption based on unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

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Investment And Mortgage-Backed Securities, Available For Sale: Schedule of Amortized Cost and Fair Value of Available for Sale Securities by Contractual Maturity (Details) (USD $)	Jun. 30, 2012
One to Five Years
Available for Sale Amortized Cost by Contractual Maturity	$ 11,294,504
Available for Sale Fair Value by Contractual Maturity	11,549,597
Over Five to Ten Years
Available for Sale Amortized Cost by Contractual Maturity	49,782,758
Available for Sale Fair Value by Contractual Maturity	50,761,034
After Ten Years
Available for Sale Amortized Cost by Contractual Maturity	60,871,680
Available for Sale Fair Value by Contractual Maturity	62,644,995
Mortgagae-Backed Securities
Available for Sale Amortized Cost by Contractual Maturity	224,933,434
Available for Sale Fair Value by Contractual Maturity	233,381,604
Total Securities
Available for Sale Amortized Cost by Contractual Maturity	346,882,376
Available for Sale Fair Value by Contractual Maturity	$ 358,337,230

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Security Federal Corporation and Subsidiaries Consolidated Statements of Changes in Shareholders' Equity and Comprehensive Income (Unaudited) (USD $)	Preferred Stock	Warrants	Common Stock	Additional Paid-In Capital	Treasury Stock	Accumulated Other Comprehensive Income	Retained Earnings	Total Stockholder's Equity
Balances At Beginning Of Period at Mar. 31, 2011	$ 22,000,000	$ 400,000	$ 31,449	$ 11,634,526	$ (4,330,712)	$ 7,105,373	$ 44,896,539	$ 81,737,175
Net Income							461,047	461,047
Other Comprehensive Income, Net of Tax						2,707,501		2,707,501
Redemption Of Mandatorily Redeemable Financial Instrument			565	1,416,747				1,417,312
Stock Compensation Expense							8,281	8,281
Cash Dividends On Preferred							(110,000)	(110,000)
Cash Dividends On Common							(235,520)	(235,520)
Balances At End Of Period at Jun. 30, 2011	22,000,000	400,000	31,449	11,593,122	(4,330,712)	6,345,176	44,221,791	80,260,826
Balances At Beginning Of Period at Mar. 31, 2012	22,000,000	400,000	31,449	11,626,245	(4,330,712)	6,533,573	44,511,331	80,771,886
Net Income							730,728	730,728
Other Comprehensive Income, Net of Tax						571,800		571,800
Stock Compensation Expense				8,281				8,281
Cash Dividends On Preferred							(110,000)	(110,000)
Cash Dividends On Common							(235,520)	(235,520)
Balances At End Of Period at Jun. 30, 2012	$ 22,000,000	$ 400,000	$ 31,449	$ 11,634,526	$ (4,330,712)	$ 7,105,373	$ 44,896,539	$ 81,737,175

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Security Federal Corporation and Subsidiaries Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2012	Mar. 31, 2012
Assets:
Amortized Cost of Investment And Mortgage-Backed Securities Available For Sale	$ 346,882,376	$ 343,421,858
Fair Value of Securities Held To Maturity	67,704,158	69,965,869
Allowance for Loan Losses on Loans Receivable Held For Investment	$ 12,684,327	$ 14,615,198
Shareholders' Equity:
Serial Preferred Stock Par Value Per Share	$ 0.01	$ 0.01
Serial Preferred Stock Shares Authorized	200,000	200,000
Serial Preferred Stock Shares Issued	22,000	22,000
Serial Preferred Stock Shares Outstanding	22,000	22,000
Common Stock Par Value Per Share	$ 0.01	$ 0.01
Common Stock Shares Authorized	5,000,000	5,000,000
Common Stock Shares Issued	3,144,934	3,144,934
Common Stock Shares Outstanding	2,944,001	2,944,001
Treasury Stock Shares Held	200,933	200,933

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Investment And Mortgage-Backed Securities, Available For Sale

3 Months Ended

Jun. 30, 2012

Notes

Investment And Mortgage-Backed Securities, Available For Sale

9.  Securities

Investment And Mortgage-Backed Securities, Available For Sale

The amortized cost, gross unrealized gains, gross unrealized losses, and fair values of investment and mortgage-backed securities available for sale are as follows:

	June 30, 2012
		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	value
FHLB Securities	$2,440,263	$71,377	$-	$2,511,640
FNMA and FHLMC Bonds	1,000,000	790	-	1,000,790
SBA Bonds	87,773,083	1,730,497	102,561	89,401,019
Tax Exempt Municipal Bonds	30,632,658	1,398,464	61,695	31,969,427
Mortgage-Backed Securities	224,933,434	8,589,965	141,795	233,381,604
Equity Securities	102,938	-	30,188	72,750
Total	$346,882,376	$11,791,093	336,239	$358,337,230

	March 31, 2012
		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	value
FHLB Securities	$2,634,234	$64,660	$-	$2,698,894
FNMA and FHLMC Bonds	2,926,566	560	5,275	2,921,851
SBA Bonds	85,064,224	1,357,490	142,912	86,278,802
Tax Exempt Municipal Bonds	23,231,375	971,739	77,389	24,125,725
Mortgage-Backed Securities	229,462,521	8,486,387	95,073	237,853,835
Equity Securities	102,938	-	27,188	75,750
Total	$343,421,858	$10,880,836	$347,837	$353,954,857

FHLB securities, FNMA and FHLMC bonds, and FNMA and FHLMC mortgage-backed securities are issued by government-sponsored enterprises (“GSEs”).  GSEs are not backed by the full faith and credit of the United States government.  SBA bonds are backed by the full faith and credit of the United States government. Included in the tables above in mortgage-backed securities are GNMA mortgage-backed securities, which are also backed by the full faith and credit of the United States government.  At June 30, 2012 and March 31, 2012, the Company held an amortized cost and fair value of $147.8 million$147,800,000 and $153.5 million, respectively, and $143.8 million and $149.3 million, respectively, in GNMA mortgage-backed securities included in mortgage-backed securities listed above. All mortgage-backed securities in the Company’s portfolio are either GSEs or GNMA mortgage-backed securities. The balance does not include any private label mortgage-backed securities.

The Bank received approximately $7.8 million and $8.3 million, respectively, in proceeds from sales of available for sale securities during the quarters ended June 30, 2012 and 2011 and recognized $104,000 and $171,000 in gross gains during the quarters ended June 30, 2012 and June 30, 2011, respectively.

The amortized cost and fair value of investment and mortgage-backed securities available for sale at June 30, 2012 are shown below by contractual maturity.  Expected maturities will differ from contractual maturities because borrowers have the right to prepay obligations with or without call or prepayment penalties. Mortgage-backed securities are presented as a separate line item since paydowns are expected to occur before the contractual maturity dates.

	Amortized	Fair
	Cost	Value
Less Than One Year	$-	$-
One – Five Years	11,294,504	11,549,597
Over Five – Ten Years	49,782,758	50,761,034
After Ten Years	60,871,680	62,644,995
Mortgage-Backed Securities	224,933,434	233,381,604
Total	$346,882,376	$358,337,230

The following tables show gross unrealized losses and fair value, aggregated by investment category, and length of time that individual available for sale securities have been in a continuous unrealized loss position for the periods indicated.

	June 30, 2012
	Less than 12 Months		12 Months or More		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
	Value	Losses	Value	Losses	Value	Losses
SBA Bonds	$10,726,866	$102,561	$-	$-	$10,726,866	$102,561
Tax Exempt Municipal Bond	8,577,089	61,695	-	-	8,577,089	61,695
Mortgage-Backed Securities	21,961,960	141,795	-	-	21,961,960	141,795
Equity Securities	-	-	72,750	30,188	72,750	30,188
Total	$41,265,915	$306,051	$72,750	$30,188	$41,338,665	$336,239

	March 31, 2012
	Less than 12 Months		12 Months or More		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
	Value	Losses	Value	Losses	Value	Losses
FNMA And FHLMC Bonds	$1,921,291	$5,275	$-	$-	$1,921,291	$5,275
SBA Bonds	12,508,821	142,912	-	-	12,508,821	142,912
Tax Exempt Municipal Bond	3,390,580	77,389	-	-	3,390,580	77,389
Mortgage-Backed Securities	23,053,784	95,073	-	-	23,053,784	95,073
Equity Securities	-	-	75,750	27,188	75,750	27,188
Total	$40,874,476	$320,649	$75,750	$27,188	$40,950,226	$347,837

Securities classified as available for sale are recorded at fair market value. The Company has the ability and intent to hold these securities until such time as the value recovers or the securities mature.  The Company believes, based on industry analyst reports and credit ratings, that the deterioration in value was attributable to changes in market interest rates and is not in the credit quality of the issuer and therefore, these losses are not considered other-than-temporary. The Company reviews its investment securities portfolio at least quarterly and more frequently when economic conditions warrant, assessing whether there is any indication of other-than-temporary impairment (“OTTI”). Factors considered in the review include estimated future cash flows, length of time and extent to which market value has been less than cost, the financial condition and near term prospects of the issuer, and our intent and ability to retain the security to allow for an anticipated recovery in market value.

If the review determines that there is OTTI, then an impairment loss is recognized in earnings equal to the entire difference between the investment’s cost and its fair value at the balance sheet date of the reporting period for which the assessment is made, or a portion may be recognized in other comprehensive income. The fair value of investments on which OTTI is recognized then becomes the new cost basis of the investment.

Investment and Mortgage-Backed Securities, Held to Maturity

The amortized cost, gross unrealized gains, gross unrealized losses, and fair values of investment and mortgage-backed securities held to maturity are as follows:

	June 30, 2012
		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	Value
FHLB Securities	$10,547,804	$196,752	$-	10,744,556
Federal Farm Credit Securities	1,999,540	13,720	-	2,013,260
FNMA and FHLMC Bonds	5,985,244	46,006	-	6,031,250
SBA Bonds	3,251,636	356,074	-	3,607,710
Mortgage-Backed Securities	43,150,174	2,002,208	-	45,152,382
Equity Securities	155,000	-	-	155,000
Total	$65,089,398	$2,614,760	$-	67,704,158

	March 31, 2012
		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	Value
FHLB Securities	$11,554,627	$221,726	$13,517	$11,762,836
FFCB Securities	1,999,516	6,534	23,410	1,982,640
FNMA and FHLMC Bonds	6,983,004	19,863	49,147	6,953,720
SBA Bonds	3,251,151	305,430	-	3,556,581
Mortgage-Backed Securities	43,732,912	1,822,180	-	45,555,092
Equity Securities	155,000	-	-	155,000
Total	$67,676,210	$2,375,733	$86,074	$69,965,869

Included in the tables above in mortgage-backed securities are GNMA mortgage-backed securities, which are also backed by the full faith and credit of the United States government.  At June 30, 2012, the Company held an amortized cost and fair value of $41.9 million and $43.8 million, respectively, in GNMA mortgage-backed securities included in mortgage-backed securities listed above. At March 31, 2012, the Company held an amortized cost and fair value of $42.2 million and $43.9 million, respectively, in GNMA mortgage-backed securities, which are included in mortgage-backed securities line item in the table above. All mortgage-backed securities in the Company’s portfolio above are either GSEs or GNMA mortgage-backed securities. The balance does not include any private label mortgage-backed securities.

The amortized cost and fair value of investment and mortgage-backed securities held to maturity at June 30, 2012, by contractual maturity, are shown below.  Expected maturities will differ from contractual maturities resulting from call features on certain investments. Mortgage-backed securities are presented as a separate line item since paydowns are expected to occur before the contractual maturity dates.

	Amortized	Fair
	Cost	Value
Less Than One Year	$1,000,000	$1,045,040
One – Five Years	5,368,392	5,505,044
Over Five – Ten Years	7,990,319	8,039,860
More Than Ten Years	7,580,513	7,961,832
Mortgage-Backed Securities	43,150,174	45,152,382
Total	$65,089,398	$67,704,158

The Company did not have any held to maturity securities in an unrealized loss position at June 30, 2012. The following table shows the held to maturity securities in an unrealized loss position at March 31, 2012.

	March 31, 2012
	Less than 12 Months		12 Months or More		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
	Value	Losses	Value	Losses	Value	Losses
FHLB Securities	$4,532,636	$13,517	$-	$-	$4,532,636	$13,517
FFCB Securities	976,590	23,410	-	-	976,590	23,410
FNMA And FHLMC Bonds	4,939,150	49,147	-	-	4,939,150	49,147
Total	$10,448,376	$86,074	$-	$-	$10,448,376	$86,074

The Company’s held to maturity portfolio is recorded at amortized cost.  The Company has the ability and intends to hold these securities to maturity. There were no sales of securities held to maturity during the quarters ended June 30, 2012 or 2011, or during the year ended March 31, 2012.

XML

Document and Entity Information	3 Months Ended
	Jun. 30, 2012
Document and Entity Information:
Entity Registrant Name	Security Federal Corporation
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	true
Entity Central Index Key	0000818677
Current Fiscal Year End Date	--03-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Amendment Description	1

XML

Loans Receivable, Net

3 Months Ended

Jun. 30, 2012

Notes

Loans Receivable, Net

10.  Loans Receivable, Net

Loans receivable, net, at June 30, 2012 and March 31, 2012 consisted of the following:

	June 30, 2012	March 31, 2012
Residential Real Estate	$95,674,036	$97,807,917
Consumer	57,310,488	58,685,000
Commercial Business	8,893,669	9,552,575
Commercial Real Estate	262,203,015	276,317,897
Total Loans Held For Investment	424,081,208	442,363,389
Loans Held For Sale	3,158,501	2,671,771
Total Loans Receivable, Gross	427,239,709	445,035,160
Less:
Allowance For Possible Loan Loss	12,684,327	14,615,198
Loans In Process	1,472,379	1,886,652
Deferred Loan Fees	16,108	22,704
	14,172,814	16,524,554
Total Loans Receivable, Net	$413,066,895	$428,510,606

The Company uses a risk based approach based on the following credit quality measures when analyzing the loan portfolio: pass, caution, special mention, and substandard. These indicators are used to rate the credit quality of loans for the purposes of determining the Company’s allowance for loan losses. Pass loans are loans that are performing and are deemed adequately protected by the net worth of the borrower or the underlying collateral value. These loans are considered the least risky in terms of determining the allowance for loan losses. Substandard loans are considered the most risky category. These loans typically have an identified weakness or weaknesses and are inadequately protected by the net worth of the borrower or collateral value. All loans 60 days or more past due are automatically classified in this category. The other two categories fall in between these two grades.

The following tables list the loan grades used by the Company as credit quality indicators and the balance in each category, excluding loans held for sale, for the periods indicated.

	June 30, 2012
	Credit Quality Measures
			Special		Total
	Pass	Caution	Mention	Substandard	Loans
Residential Real Estate	$87,436,807	$225,553	$295,572	$7,716,104	$95,674,036
Consumer	55,352,127	177,115	103,146	1,678,100	57,310,488
Commercial Business	7,932,730	395,763	177,500	387,676	8,893,669
Commercial Real Estate	181,617,951	18,860,609	17,022,335	44,702,120	262,203,015
Total	$332,339,615	$19,659,040	$17,598,553	$54,484,000	$424,081,208

	March 31, 2012
	Credit Quality Measures
			Special		Total
	Pass	Caution	Mention	Substandard	Loans
Residential Real Estate	$88,536,685	$-	$573,887	$8,697,345	$97,807,917
Consumer	57,113,676	159,805	27,604	1,383,915	58,685,000
Commercial Business	8,608,378	446,815	-	497,382	9,552,575
Commercial Real Estate	190,230,745	21,874,264	19,783,230	44,429,658	276,317,897
Total	$344,489,484	$22,480,884	$20,384,721	$55,008,300	$442,363,389

The following tables present an age analysis of past due balances by category, excluding loans held for sale, at the periods indicated.

	June 30, 2012
			90 Day
			or More	Total		Total
	30-59 Days	60-89 Days	Past	Past		Loans
	Past Due	Past Due	Due	Due	Current	Receivable
Residential Real Estate	$1,463,721	$166,352	$3,353,517	$4,983,590	$90,690,446	$95,674,036
Consumer	935,040	188,277	549,203	1,672,520	55,637,968	57,310,488
Commercial Business	230,448	224,071	45,888	500,407	8,393,262	8,893,669
Commercial Real Estate	21,559,130	2,466,893	24,292,887	48,318,910	213,884,105	262,203,015
Total	$24,188,339	$3,045,593	$28,241,495	$55,475,427	$368,605,781	$424,081,208

	March 31, 2012
			90 Day
			or More	Total		Total
	30-59 Days	60-89 Days	Past	Past		Loans
	Past Due	Past Due	Due	Due	Current	Receivable
Residential Real Estate	$2,778,235	$742,345	$3,638,929	$7,159,509	$90,648,408	$97,807,917
Consumer	659,028	352,421	620,358	1,631,807	57,053,193	58,685,000
Commercial Business	174,420	209,418	20,808	404,646	9,147,929	9,552,575
Commercial Real Estate	18,332,136	4,682,891	18,378,165	41,393,192	234,924,705	276,317,897
Total	$21,943,819	$5,987,075	$22,658,260	$50,589,154	$391,774,235	$442,363,389

At June 30, 2012, the Company did not have any loans that were 90 days or more past due and still accruing interest. Our strategy is to work with our borrowers to reach acceptable payment plans while protecting our interests in the existing collateral.  In the event an acceptable arrangement cannot be reached, we may have to acquire these properties through foreclosure or other means and subsequently sell, develop, or liquidate them. The following table shows non-accrual loans by category at June 30, 2012 compared to March 31, 2012.

					$	%
	At June 30, 2012		At March 31, 2012		Increase	Increase
	Amount	Percent (1)	Amount	Percent (1)	(Decrease)	(Decrease)
Non-accrual loans:
Residential real estate	$3,353,517	0.8%	$3,638,929	0.8%	$(285,412)	7.8%
Commercial business	45,888	0.1%	20,808	-%	25,080	120.5%
Commercial real estate	24,292,887	5.7%	18,378,165	4.2%	5,914,722	32.2%
Consumer	549,203	0.1%	620,358	0.1%	(71,155)	11.5%
Total non-accrual loans	$28,241,495	6.7%	$22,658,260	5.1%	$5,583,235	24.6%

(1) Percent of gross loans receivable, net of deferred fees and loans in process and loans held for sale

The following tables show the activity in the allowance for loan losses by category for the periods indicated.

	For the Three Months Ended June 30, 2012
	Residential		Commercial	Commercial
	Real Estate	Consumer	Business	Real Estate	Total
Allowance For Loan Losses
Beginning Balance	$1,928,625	$1,498,111	$644,855	$10,543,607	$14,615,198
Provision	319,110	(134,166)	16,574	523,482	725,000
Charge-Offs	(226,972)	(120,427)	(188,730)	(2,285,896)	(2,822,025)
Recoveries	9,759	8,281	525	147,589	166,154
Ending Balance	$2,030,522	$1,251,799	$473,224	$8,928,782	$12,684,327

	For the Three Months Ended June 30, 2011
	Residential		Commercial	Commercial
	Real Estate	Consumer	Business	Real Estate	Total
Allowance For Loan Losses
Beginning Balance	$1,702,864	$1,122,055	$924,149	$8,752,732	$12,501,800
Provision	231,632	24,893	(211,990)	2,255,465	2,300,000
Charge-Offs	(171,039)	(54,738)	(72,811)	(1,023,274)	(1,321,862)
Recoveries	-	10,557	12,078	-	22,635
Ending Balance	$1,763,457	$1,102,767	$651,426	$9,984,923	$13,502,573

The following tables present information related to impaired loans evaluated individually for impairment and collectively evaluated for impairment in the allowance for loan losses for the periods indicated.

	June 30, 2012
	Allowance For Loan Losses
	Individually	Collectively
	Evaluated For	Evaluated For
	Impairment	Impairment	Total
Residential Real Estate	$34,917	$1,995,605	$2,030,522
Consumer	-	1,251,799	1,251,799
Commercial Business	-	473,224	473,224
Commercial Real Estate	9,624	8,919,158	8,928,782
Total	$44,541	$12,639,786	$12,684,327

	March 31, 2012
	Allowance For Loan Losses
	Individually	Collectively
	Evaluated For	Evaluated For
	Impairment	Impairment	Total
Residential Real Estate	$155,000	$1,773,625	$1,928,625
Consumer	19,568	1,478,543	1,498,111
Commercial Business	148,610	496,245	644,855
Commercial Real Estate	1,313,670	9,229,937	10,543,607
Total	$1,636,848	$12,978,350	$14,615,198

The following tables present information related to impaired loans evaluated individually for impairment and collectively evaluated for impairment in loans receivable for the periods indicated.

	June 30, 2012
	Loans Receivable
	Individually	Collectively
	Evaluated For	Evaluated For
	Impairment	Impairment	Total
Residential Real Estate	$3,405,599	$92,268,437	$95,674,036
Consumer	449,577	56,860,911	57,310,488
Commercial Business	14,143	8,879,526	8,893,669
Commercial Real Estate	38,761,301	223,441,714	262,203,015
Total	$42,630,620	$381,450,588	$424,081,208

	March 31, 2012
	Loans Receivable
	Individually	Collectively
	Evaluated For	Evaluated For
	Impairment	Impairment	Total
Residential Real Estate	$3,544,061	$94,263,856	$97,807,917
Consumer	1,849,046	56,835,954	58,685,000
Commercial Business	172,362	9,380,213	9,552,575
Commercial Real Estate	35,231,717	241,086,180	276,317,897
Total	$40,797,186	$401,566,203	$442,363,389

Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired management measures impairment and records the loan at fair value. Fair value is estimated using one of the following methods: fair value of the collateral less estimated costs to sale, discounted cash flows, or market value of the loan based on similar debt. The fair value of the collateral less estimated costs to sell is the most frequently used method. Typically, the Company reviews the most recent appraisal and if it is over 24 months old will request a new third party appraisal. Depending on the particular circumstances surrounding the loan, including the location of the collateral, the date of the most recent appraisal and the value of the collateral relative to the recorded investment in the loan, management may order an independent appraisal immediately or, in some instances, may elect to perform an internal analysis.

The following tables are a summary of information related to impaired loans as of periods indicated.

	June 30, 2012
		Unpaid		Average	Interest
	Recorded	Principal	Related	Recorded	Income
	Investment	Balance	Allowance	Investment	Recognized
Impaired Loans
With no related allowance recorded:
Residential Real Estate	$2,570,235	$2,625,235	$-	$2,385,897	$19,202
Consumer Loans	449,577	513,577	-	1,139,528	3,498
Commercial Business	14,143	14,143	-	18,948	161
Commercial Real Estate	38,506,851	43,446,649	-	32,966,362	211,447
With an allowance recorded:
Residential Real Estate	835,364	1,547,364	34,917	1,088,933	-
Consumer Loans	-	-	-	9,784	-
Commercial Business	-	-	-	74,305	-
Commercial Real Estate	254,450	700,374	9,624	4,030,147	-
Total
Residential Real Estate	3,405,599	4,172,599	34,917	3,474,830	19,202
Consumer Loans	449,577	513,577	-	1,149,312	3,498
Commercial Business	14,143	14,143	-	93,253	161
Commercial Real Estate	38,761,301	44,147,023	9,624	36,996,509	211,447
Total	$42,630,620	$48,847,342	$44,541	$41,713,904	$234,308

	March 31, 2012
		Unpaid		Average	Interest
	Recorded	Principal	Related	Recorded	Income
	Investment	Balance	Allowance	Investment	Recognized
Impaired Loans
With no related allowance recorded:
Residential Real Estate	$2,201,560	$2,456,960	$-	$2,066,066	$65,818
Consumer Loans	1,829,478	1,879,478	-	2,398,298	86,180
Commercial Business	23,752	47,752	-	294,894	1,677
Commercial Real Estate	27,425,873	29,175,328	-	24,020,047	1,186,679
With an allowance recorded:
Residential Real Estate	1,342,501	1,954,501	155,000	586,109	6,137
Consumer Loans	19,568	60,668	19,568	28,181	-
Commercial Business	148,610	148,610	148,610	207,135	5,608
Commercial Real Estate	7,805,844	9,945,912	1,313,670	4,687,210	228,483
Total
Residential Real Estate	3,544,061	4,411,461	155,000	2,652,175	71,955
Consumer Loans	1,849,046	1,940,146	19,568	2,426,479	86,180
Commercial Business	172,362	196,362	148,610	502,029	7,285
Commercial Real Estate	35,231,717	39,121,240	1,313,670	28,707,257	1,415,162
Total	$40,797,186	$45,669,209	$1,636,848	$34,287,940	$1,580,582

The Company considers a loan to be a TDR when the debtor experiences financial difficulties and the Company provides concessions such that we will not collect all principal and interest in accordance with the original terms of the loan agreement.  Concessions can relate to the contractual interest rate, maturity date, or payment structure of the note.  As part of our workout plan for individual loan relationships, we may restructure loan terms to assist borrowers facing challenges in the current economic environment.  TDRs included in impaired loans at June 30, 2012 and March 31, 2012 amounted to $16.8 million and $18.0 million, respectively.

During the quarter ended June 30, 2012, there were no loan modifications that were considered to be TDRs. During the quarter ended June 30, 2012, four loans with a recorded investment of $879,000 that had been restructured during the last 12 months subsequently defaulted during the period.  The Bank considers any loan 30 days or more past due to be in default.

Our policy with respect to accrual of interest on loans restructured in a TDR follows relevant supervisory guidance.  That is, if a borrower has demonstrated performance under the previous loan terms and shows capacity to perform under the restructured loan terms, continued accrual of interest at the restructured interest rate is likely.  If a borrower was materially delinquent on payments prior to the restructuring but shows capacity to meet the restructured loan terms, the loan will likely continue as nonaccrual going forward.  Lastly, if the borrower does not perform under the restructured terms, the loan is placed on nonaccrual status.

We will continue to closely monitor these loans and will cease accruing interest on them if management believes that the borrowers may not continue performing based on the restructured note terms.  If, after previously being classified as a TDR, a loan is restructured a second time, then that loan is automatically placed on nonaccrual status.  Our policy with respect to nonperforming loans requires the borrower to make a minimum of six consecutive payments in accordance with the loan terms before that loan can be placed back on accrual status.  Further, the borrower must show capacity to continue performing into the future prior to restoration of accrual status.

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Loans Receivable, Net: Schedule of Loans Receivable Individually and Collectively Evaluated for Impairment (Details) (USD $)	Jun. 30, 2012	Mar. 31, 2012
Residential Real Estate
Financing Receivable, Individually Evaluated for Impairment	$ 3,405,599	$ 3,544,061
Financing Receivable, Collectively Evaluated for Impairment	92,268,437	94,263,856
Total Loans Receivable Individually and Collectively Evaluated for Impairment	95,674,036	97,807,917
Consumer
Financing Receivable, Individually Evaluated for Impairment	449,577	1,849,046
Financing Receivable, Collectively Evaluated for Impairment	56,860,911	56,835,954
Total Loans Receivable Individually and Collectively Evaluated for Impairment	57,310,488	58,685,000
Commercial Business
Financing Receivable, Individually Evaluated for Impairment	14,143	172,362
Financing Receivable, Collectively Evaluated for Impairment	8,879,526	9,380,213
Total Loans Receivable Individually and Collectively Evaluated for Impairment	8,893,669	9,552,575
Commercial Real Estate
Financing Receivable, Individually Evaluated for Impairment	38,761,301	35,231,717
Financing Receivable, Collectively Evaluated for Impairment	223,441,714	241,086,180
Total Loans Receivable Individually and Collectively Evaluated for Impairment	262,203,015	276,317,897
Total Loans
Financing Receivable, Individually Evaluated for Impairment	42,630,620	40,797,186
Financing Receivable, Collectively Evaluated for Impairment	381,450,588	401,566,203
Total Loans Receivable Individually and Collectively Evaluated for Impairment	$ 424,081,208	$ 442,363,389

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Security Federal Corporation and Subsidiaries Consolidated Statements of Income (Unaudited) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Interest Income:
Interest Income - Loans	$ 6,086,191	$ 7,340,697
Interest Income - Mortgage-Backed Securities	1,764,712	2,117,531
Interest Income - Investment Securities	622,536	771,454
Other Interest Income	1,966	469
Total Interest Income	8,475,405	10,230,151
Interest Expense:
NOW And Money Market Accounts	291,585	446,880
Statement Savings Accounts	10,901	12,674
Certificate Accounts	1,033,105	1,440,603
FHLB Advances And Other Borrowed Money	1,133,300	1,269,056
Junior Convertible Debentures	28,311	57,847
Senior Subordinated Debentures	121,680	121,680
Total Interest Expense	2,618,882	3,348,740
Net Interest Income	5,856,523	6,881,411
Provision For Loan Losses	725,000	2,300,000
Net Interest Income After Provision For Loan Losses	5,131,523	4,581,411
Non-Interest Income:
Gain On Sale Of Investments	103,659	171,224
Gain On Sale Of Loans	132,952	107,270
Service Fees On Deposit Accounts	278,563	270,693
Income From Cash Value Of Life Insurance	105,000	105,000
Commissions On Insurance	107,773	92,102
Trust Income	120,000	114,000
Mandatorily Redeemable Financial Instrument Valuation		50,000
Check Card Fee Income	204,860	202,392
Other Non-Interest Income	130,929	158,613
Total Non-Interest Income	1,183,736	1,271,294
General And Administrative Expenses:
Salaries And Employee Benefits	2,614,044	2,842,978
Occupancy	491,747	478,752
Advertising	81,944	85,680
Depreciation And Maintenance Of Equipment	404,594	412,625
FDIC Insurance Premiums	185,628	292,205
Amortization of Intangibles	12,501	22,520
Net cost of operation of other real estate owned	642,151	36,610
Other Expense	865,599	989,154
Total General And Administrative Expenses	5,298,208	5,160,524
Income Before Income Taxes	1,017,051	692,181
Provision For Income Taxes	286,323	231,134
Net Income	730,728	461,047
Preferred Stock Dividends	110,000	110,000
Net Income Available To Common Shareholders	$ 620,728	$ 351,047
Basic Net Income Per Common Share	$ 0.21	$ 0.12
Diluted Net Income Per Common Share	$ 0.21	$ 0.12
Cash Dividend Per Share On Common Stock	$ 0.08	$ 0.08
Basic Weighted Average Common Shares Outstanding	2,944,001	2,944,001
Diluted Weighted Average Common Shares Outstanding	2,944,001	2,944,001

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Earnings Per Share

3 Months Ended

Jun. 30, 2012

Notes

Earnings Per Share

4.  Earnings Per Common Share

Accounting guidance specifies the computation, presentation and disclosure requirements for earnings per share (“EPS”) for entities with publicly held common stock or potential common stock such as options, warrants, convertible securities or contingent stock agreements if those securities trade in a public market. Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding.  Diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive common shares had been issued.  The dilutive effect of options outstanding under the Company’s stock option plan is reflected in diluted earnings per share by application of the treasury stock method.

Net income available to common shareholders represents consolidated net income adjusted for preferred dividends declared, accretions of discounts and amortization of premiums on preferred stock issuances and cumulative dividends related to the current dividend period that have not been declared as of period end. The following table provides a reconciliation of net income to net income available to common shareholders for the periods presented:

	For the Quarter Ended June 30,
	2012	2011
Earnings Available To Common Shareholders:
Net Income	$730,728	$461,047
Preferred Stock Dividends	110,000	110,000
Net Income Available To Common Shareholders	$620,728	$351,047

The following table shows the effect of dilutive options and warrants on the Company’s earnings per common share for the periods indicated:

	For the Quarter Ended
	June 30, 2012
	Income
	(Numerator)	Shares
	Amount	(Denominator)	Per Share
Basic EPS	$620,728	2,944,001	$0.21
Effect Of Diluted Securities:
Stock Options And Warrants	-	-	-
Diluted EPS	$620,728	2,944,001	$0.21

	For the Quarter Ended
	June 30, 2011
	Income
	(Numerator)	Shares
	Amount	(Denominator)	Per Share
Basic EPS	$351,047	2,944,001	$0.12
Effect Of Diluted Securities:
Stock Options And Warrants	-	-	-
Diluted EPS	$351,047	2,944,001	$0.12

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Critical Accounting Policies

3 Months Ended

Jun. 30, 2012

Notes

Critical Accounting Policies

3.  Critical Accounting Policies

The Company has adopted various accounting policies, which govern the application of accounting principles generally accepted in the United States in the preparation of our financial statements.  Our significant accounting policies are described in the footnotes to the audited consolidated financial statements at March 31, 2012 included in our 2012 Annual Report to Stockholders.  Certain accounting policies involve significant judgments and assumptions by management, which have a material impact on the carrying value of certain assets and liabilities, and, as such, have a greater possibility of producing results that could be materially different than originally reported.  We consider these accounting policies to be critical accounting policies.  The judgments and assumptions we use are based on historical experience and other factors, which we believe to be reasonable under the circumstances.  Because of the nature of the judgments and assumptions we make, actual results could differ from these judgments and estimates which could have a material impact on our carrying values of assets and liabilities and our results of operations.

The Company believes the allowance for loan losses is a critical accounting policy that requires the most significant judgments and estimates used in preparation of the consolidated financial statements.  The impact of an unexpected and sudden large loss could deplete the allowance and potentially require increased provisions to replenish the allowance, which would negatively affect earnings. The Company provides for loan losses using the allowance method.  Accordingly, all loan losses are charged to the related allowance and all recoveries are credited to the allowance for loan losses.  Additions to the allowance for loan losses are provided by charges to operations based on various factors, which, in management’s judgment, deserve current recognition in estimating possible losses.  Such factors considered by management include the fair value of the underlying collateral, stated guarantees by the borrower (if applicable), the borrower’s ability to repay from other economic resources, growth and composition of the loan portfolio, the relationship of the allowance for loan losses to the outstanding loans, loss experience, delinquency trends, and general economic conditions.  Management evaluates the carrying value of the loans periodically and the allowance is adjusted accordingly.

While management uses the best information available to make evaluations, future adjustments may be necessary if economic conditions differ substantially from the assumptions used in making these evaluations.  The allowance for loan losses is subject to periodic evaluations by various authorities and may be subject to adjustments based upon the information that is available at the time of their examination. For additional information see the risk factor entitled: “Our provision for loan losses and net loan charge offs have remained at elevated levels and we may be required to make further increases in our provisions for loan losses and to charge off additional loans in the future, which could adversely affect our results of operations ,” in Item 1A. Risk Factors of our 2012 Form 10-K. The Company values impaired loans at the loan’s fair value if it is probable that the Company will be unable to collect all amounts due according to the terms of the loan agreement at the present value of expected cash flows, the market price of the loan, if available, or the value of the underlying collateral.  Expected cash flows are required to be discounted at the loan’s effective interest rate.  When the ultimate collectibility of an impaired loan’s principal is in doubt, wholly or partially, all cash receipts are applied to principal.  When this doubt does not exist, cash receipts are applied under the contractual terms of the loan agreement first to interest and then to principal.  Once the recorded principal balance has been reduced to zero, future cash receipts are applied to interest income to the extent that any interest has been foregone.  Further cash receipts are recorded as recoveries of any amounts previously charged off.

The Company uses assumptions and estimates in determining income taxes payable or refundable for the current year, deferred income tax liabilities and assets for events recognized differently in its financial statements and income tax returns, and income tax expense. Determining these amounts requires analysis of certain transactions and interpretation of tax laws and regulations. The Company exercises considerable judgment in evaluating the amount and timing of recognition of the resulting tax liabilities and assets. These judgments and estimates are reevaluated on a continual basis as regulatory and business factors change. No assurance can be given that either the tax returns submitted by us or the income tax reported on the Consolidated Financial Statements will not be adjusted by either adverse rulings by the United States Tax Court, changes in the tax code, or assessments made by the Internal Revenue Service.

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Stock Warrants: Stock Warrants Policy (Policies)

3 Months Ended

Jun. 30, 2012

Policies

Stock Warrants Policy

In conjunction with its participation in the U.S. Department of the Treasury’s (“U.S. Treasury”) Capital Purchase Program, the Company sold a warrant to the U.S. Treasury to purchase 137,966 shares of the Company’s common stock at $19.57 per share. The warrant has a 10-year term and was immediately exercisable upon issuance. At June 30, 2012 and 2011, the warrant was not deemed to be dilutive. There were no changes in the Company’s stock warrants during the three months ended June 30, 2012 and 2011.

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Subsequent Events

3 Months Ended

Jun. 30, 2012

Notes

Subsequent Events

11.  Subsequent Events

Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including estimates inherent in the process of preparing financial statements. Nonrecognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date.

On August 6, 2012, the U.S. Treasury’s Community Development Financial Institutions Fund (“CDFI Fund”) announced its intention to award the Bank a grant totaling $1.5 million in recognition of its commitment to community development. The award is part of a CDFI program that recognizes organizations who serve low-income and distressed communities. The Bank is currently in the process of evaluating the provisions of the agreement and has not yet signed a contract to receive the funds.  If the Bank agrees to the provisions, management expects to sign the contract and receive the funds within the next quarter.

Management has reviewed events occurring through the date the financial statements were available to be issued and no other subsequent events occurred requiring accrual or disclosure.

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Carrying Amounts and Fair Value of Financial Instruments

3 Months Ended

Jun. 30, 2012

Notes

Carrying Amounts and Fair Value of Financial Instruments

7.  Carrying Amounts and Fair Value of Financial Instruments

Accounting guidance emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1	Valuation is based upon quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market, as well as U.S. Treasuries and money market funds.
Level 2	Valuation is based upon quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments, mortgage-backed securities, municipal bonds, corporate debt securities and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes certain derivative contracts and impaired loans.
Level 3	Valuation is generated from model-based techniques that use at least one significant assumption based on unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

The following is a description of the valuation methodologies used for assets and liabilities recorded at fair value.

Investment Securities Available for Sale

Investment securities available for sale are recorded at fair value on a recurring basis. At June 30, 2012, the Company’s investment portfolio was comprised of government and agency bonds, mortgage-backed securities issued by government agencies or government sponsored enterprises, municipal securities and one equity investment. The portfolio did not contain any private label mortgage-backed securities. Fair value measurement is based upon prices obtained from third party pricing services who use independent pricing models which rely on a variety of factors including reported trades, broker/dealer quotes, benchmark yields, economic and industry events and other relevant market information. As such, these securities are classified as Level 2.

Mortgage Loans Held for Sale

The Company originates fixed rate residential loans on a servicing released basis in the secondary market. Loans closed but not yet settled with Freddie Mac or other investors, are carried in the Company’s loans held for sale portfolio.  These loans are fixed rate residential loans that have been originated in the Company’s name and have closed.  Virtually all of these loans have commitments to be purchased by investors and the majority of these loans were locked in by price with the investors on the same day or shortly thereafter that the loan was locked in with the Company’s customers.  Therefore, these loans present very little market risk for the Company.

The Company usually delivers to, and receives funding from, the investor within 30 days.  Commitments to sell these loans to the investor are considered derivative contracts and are sold to investors on a “best efforts" basis. The Company is not obligated to deliver a loan or pay a penalty if a loan is not delivered to the investor. As a result of the short-term nature of these derivative contracts, the fair value of the mortgage loans held for sale in most cases is the same as the value of the loan amount at its origination. These loans are classified as Level 2.

Impaired Loans

The Company does not record loans held for investment at fair value on a recurring basis. However, from time to time, a loan is considered impaired and an allowance for loan losses is established as necessary. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, management measures impairment.

Fair value is estimated using one of the following methods: fair value of the collateral less estimated costs to sell, discounted cash flows, or market value of the loan based on similar debt. The fair value of the collateral less estimated costs to sell is the most frequently used method. Typically, the Company reviews the most recent appraisal and if it is over 24 months old will request a new third party appraisal. Depending on the particular circumstances surrounding the loan, including the location of the collateral, the date of the most recent appraisal and the value of the collateral relative to the recorded investment in the loan, management may order an independent appraisal immediately or, in some instances, may elect to perform an internal analysis. Specifically as an example, in situations where the collateral on a nonperforming commercial real estate loan is out of the Company’s primary market area, management would typically order an independent appraisal immediately, at the earlier of the date the loan becomes nonperforming or immediately following the determination that the loan is impaired. However, as a second example, on a nonperforming commercial real estate loan where management is familiar with the property and surrounding areas and where the original appraisal value far exceeds the recorded investment in the loan, management may perform an internal analysis whereby the previous appraisal value would be reviewed and adjusted for current conditions including recent sales of similar properties in the area and any other relevant economic trends. These valuations are reviewed at a minimum on a quarterly basis.

Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. At June 30, 2012, substantially all of the total impaired loans were evaluated based on the fair value of the collateral. Impaired loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. The Company records impaired loans as nonrecurring Level 3.

As of June 30, 2012 and March 31, 2012, the recorded investment in impaired loans was $42.6 million and $40.8 million, respectively. The average recorded investment in impaired loans was $41.7 million for the quarter ended June 30, 2012 and $34.3 million for the year ended March 31, 2012.

Foreclosed Assets

Foreclosed assets are adjusted to fair value upon transfer of the loans to foreclosed assets. Subsequently, foreclosed assets are carried at the lower of carrying value or fair value. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. The Company records these assets as nonrecurring Level 3.

Goodwill and Other Intangible Assets

Goodwill and identified intangible assets are subject to impairment testing. The Company’s approach to testing for impairment is to compare the business unit’s carrying value to the implied fair value based on a multiple of revenue approach. Impairment testing is performed annually as of September 30th or when events or circumstances occur indicating that goodwill of the reporting unit might be impaired.  In the event the fair value is determined to be less than the carrying value, the asset is recorded at fair value as determined by the valuation model. As such, goodwill and other intangible assets subjected to nonrecurring fair value adjustments are classified as Level 3.

There were no liabilities measured at fair value on a recurring basis as of June 30, 2012 or March 31, 2012.

Assets measured at fair value on a recurring basis are as follows as of June 30, 2012 and March 31, 2012:

	Quoted
	Market	Significant
	Price In	Other	Significant
	Active	Observable	Unobservable
	Markets	Inputs	Inputs
	(Level 1)	(Level 2)	(Level 3)
Assets:
FHLB Securities	$-	$2,511,640	$-
Federal National Mortgage
Association (“FNMA”) and
Federal Home Loan Mortgage
Corporation (“FHLMC”) Bonds	-	1,000,790	-
Small Business Administration (“SBA”) Bonds	-	89,401,019	-
Tax Exempt Municipal Securities	-	31,969,427	-
Mortgage-Backed Securities	-	233,381,604	-
Equity Securities	-	72,750	-
Total	$-	$358,337,230	$-

	Quoted
	Market	Significant
	Price In	Other	Significant
	Active	Observable	Unobservable
	Markets	Inputs	Inputs
	(Level 1)	(Level 2)	(Level 3)
Assets:
FHLB Securities	$-	$2,698,894	$-
FNMA and FHLMC Bonds		2,921,851
SBA Bonds		86,278,802
Tax Exempt Municipal Bonds		24,125,725
Mortgage-Backed Securities	-	237,853,835	-
Equity Securities	-	75,750	-
Total	$-	$353,954,857	$-

The Company may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis. These include assets that are measured at the lower of cost or market that were recognized at fair value below cost at the end of the period. The tables below present assets and liabilities measured at fair value on a nonrecurring basis as of June 30, 2012 and March 31, 2012, aggregated by the level in the fair value hierarchy within which those measurements fall. 

				Balance At
	Level 1	Level 2	Level 3	June 30, 2012
Assets:
Mortgage Loans Held For Sale	$-	$3,158,501	-	$3,158,501
Impaired Loans (1)	-	-	42,586,079	42,586,079
Foreclosed Assets	-	-	13,745,651	13,745,651
Total	$-	$3,158,501	56,331,730	$59,490,231

(1) IMPAIRED LOANS ARE REPORTED NET OF SPECIFIC RESERVES OF $44,541.

				Balance At
	Level 1	Level 2	Level 3	March 31, 2012
Assets:
Mortgage Loans Held For Sale	$-	$2,671,771	$-	$2,671,771
Impaired Loans (1)	-	-	39,160,338	39,160,338
Foreclosed Assets	-	-	14,160,099	14,160,099
Total	$-	$2,671,771	$53,320,437	$55,992,208

(1) IMPAIRED LOANS ARE REPORTED NET OF SPECIFIC RESERVES OF $1,636,848.

There were no liabilities measured at fair value on a non- recurring basis as of June 30, 2012 or March 31, 2012.

For Level 3 assets and liabilities measured at fair value on a recurring or non-recurring basis as of June 30, 2012, the significant unobservable inputs used in the fair value measurements were as follows:

			Significant
	Fair Value	Valuation	Unobservable
	June 30, 2012	Technique	Inputs	Range
Impaired Loans	$42,586,079	Appraised Value/Discounted Cash Flows	Appraisals And/ Or Sales Of Comparable Properties	0% - 98%
Foreclosed Assets	13,745,651	Appraised Value/Comparable Sales	Appraisals And/ Or Sales Of Comparable Properties/Bids	0% - 91%

For assets and liabilities that are not presented on the balance sheet at fair value, the following methods are used to determine the fair value:

Cash and cash equivalents—The carrying amount of these financial instruments approximates fair value. All mature within 90 days and do not present unanticipated credit concerns. These are classified as Level 1.

Certificates of deposits with other banks—Fair value is based on market prices for similar assets. These are classified as Level 1.

Investment securities held to maturity—Securities held to maturity are valued at quoted market prices or dealer quotes. These are classified as Level 2.

Loans—The fair value of loans are estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. As discount rates are based on current loan rates as well as management estimates, the fair values presented may not be indicative of the value negotiated in an actual sale. These are classified as Level 2.

FHLB Stock—The fair value approximates the carrying value. This is classified as Level 1.

Deposits—The fair value of demand deposits, savings accounts, and money market accounts is the amount payable on demand at the reporting date. These are classified as Level 1. The fair value of fixed-maturity certificates of deposits is estimated by discounting the future cash flows using rates currently offered for deposits of similar remaining maturities. These are classified as Level 2.

 FHLB Advances—Fair value is estimated based on discounted cash flows using current market rates for borrowings with similar terms. These are classified as Level 2.

Other Borrowed Money—The carrying value of these short term borrowings approximates fair value. These are classified as Level 1.

Senior Convertible Debentures— The fair value is estimated by discounting the future cash flows using the current rates at which similar debenture offerings with similar terms and maturities would be issued by similar institutions. As discount rates are based on current debenture rates as well as management estimates, the fair values presented may not be indicative of the value negotiated in an actual sale. These are classified as Level 2.

Junior Subordinated Debentures—The carrying value of junior subordinated debentures approximates fair value. These are classified as Level 2.

The following table is a summary of the carrying value and estimated fair value of the Company’s financial instruments as of June 30, 2012 and March 31, 2012 presented in accordance with the applicable accounting guidance.

	June 30, 2012
	Carrying	Fair Value
	Amount	Total	Level 1	Level 2	Level 3
(In Thousands)
Financial Assets:
Cash And Cash Equivalents	$10,653	$10,653	$10,653	$-	$-
Certificates of Deposits With Other Banks	1,728	1,728	1,728	-	-
Investment And Mortgage-Backed Securities	423,427	426,041	-	426,041	-
Loans Receivable, Net	413,067	411,970	-	411,970	-
FHLB Stock	6,928	6,928	6,928	-	-
Financial Liabilities:
Deposits:
Checking, Savings, And Money Market Accounts	379,597	379,597	379,597	-	-
Certificate Accounts	314,922	317,069	-	317,069	-
Advances From FHLB	108,166	117,571	-	117,571	-
Other Borrowed Money	10,023	10,023	10,023	-	-
Senior Convertible Debentures	5,155	5,155	-	5,155	-
Junior Subordinated Debentures	6,084	6,084	-	6,084	-

	March 31, 2012
	Carrying	Estimated
	Amount	Fair Value
Financial Assets:
Cash And Cash Equivalents	$9,331	$9,331
Certificates of Deposits With Other Banks	1,727	1,727
Investment And Mortgage-Backed Securities	421,631	423,921
Loans Receivable, Net	428,511	427,212
FHLB Stock	8,471	8,471
Financial Liabilities:
Deposits:
Checking, Savings, And Money Market Accounts	$371,295	$371,295
Certificate Accounts	324,906	327,117
Advances From FHLB	122,070	131,679
Other Borrowed Money	9,801	9,801
Senior Convertible Debentures	6,084	6,084
Junior Subordinated Debentures	5,155	5,155

At June 30, 2012, the Bank had $33.4 million of off-balance sheet financial commitments.  These commitments are to originate loans and unused consumer lines of credit and credit card lines.  Because these obligations are based on current market rates, if funded, the original principal is considered to be a reasonable estimate of fair value.

Fair value estimates are made on a specific date, based on relevant market data and information about the financial instrument.  These estimates do not reflect any premium or discount that could result from offering for sale the Bank’s entire holdings of a particular financial instrument.  Because no active market exists for a significant portion of the Bank’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, current interest rates and prepayment trends, risk characteristics of various financial instruments, and other factors.  These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision.  Changes in any of these assumptions used in calculating fair value would also significantly affect the estimates. Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments.  For example, the Bank has significant assets and liabilities that are not considered financial assets or liabilities including deposit franchise values, loan servicing portfolios, deferred tax liabilities, and premises and equipment.

In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of these estimates. The Company has used management’s best estimate of fair value on the above assumptions.  Thus, the fair values presented may not be the amounts, which could be realized, in an immediate sale or settlement of the instrument.  In addition, any income taxes or other expenses that would be incurred in an actual sale or settlement are not taken into consideration in determining fair value.

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Carrying Amounts and Fair Value of Financial Instruments: Fair Value of Impaired Loans Policy (Details) (USD $)	3 Months Ended	12 Months Ended
	Jun. 30, 2012	Mar. 31, 2012
Impaired Loans Recorded Investment	$ 42,600,000	$ 40,800,000
Average Recorded Investment in Impaired Loans	$ 41,700,000	$ 34,300,000

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Stock-Based Compensation

3 Months Ended

Jun. 30, 2012

Notes

Stock-Based Compensation

5.  Stock-Based Compensation

Certain officers and directors of the Company participate in an incentive and non-qualified stock option plan. Options are granted at exercise prices not less than the fair value of the Company’s common stock on the date of the grant. The following is a summary of the activity under the Company’s stock option plans for the periods presented:

	June 30, 2012		June 30, 2011
		Weighted Average		Weighted Average
For the Quarter Ended	Shares	Exercise Price	Shares	Exercise Price
Balance, Beginning of Period	72,900	$22.62	81,400	$22.51
Options Granted	-	-	-	-
Options Exercised	-	-	-	-
Options Forfeited	-	-	7,000	21.72
Balance, End Of Period	72,900	$22.62	74,400	$22.59
Options Exercisable	44,000	$22.07	49,900	$21.91
Options Available For Grant	50,000		50,000

At June 30, 2012, the Company had the following options outstanding:

	Outstanding Options	Option Price	Expiration Date
Grant Date
09/01/03	2,400	$24.00	08/31/13
12/01/03	3,000	$23.65	11/30/13
01/01/04	5,000	$24.22	12/31/13
03/08/04	7,000	$21.43	03/08/14
06/07/04	2,000	$24.00	06/07/14
01/01/05	19,000	$20.55	12/31/14
01/01/06	4,000	$23.91	01/01/16
08/24/06	6,000	$23.03	08/24/16
05/24/07	2,000	$24.34	05/24/17
07/09/07	1,000	$24.61	07/09/17
10/01/07	2,000	$24.28	10/01/17
01/01/08	15,000	$23.49	01/01/18
05/19/08	2,500	$22.91	05/19/18
07/01/08	2,000	$22.91	07/01/18

None of the options outstanding at June 30, 2012 or 2011 had an exercise price below the average market price during the three month period ended June 30, 2012 or 2011, respectively. Therefore these options were not deemed to be dilutive to earnings per share in those periods.

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Stock Warrants

3 Months Ended

Jun. 30, 2012

Notes

Stock Warrants

6.  Stock Warrants

In conjunction with its participation in the U.S. Department of the Treasury’s (“U.S. Treasury”) Capital Purchase Program, the Company sold a warrant to the U.S. Treasury to purchase 137,966 shares of the Company’s common stock at $19.57 per share. The warrant has a 10-year term and was immediately exercisable upon issuance. At June 30, 2012 and 2011, the warrant was not deemed to be dilutive. There were no changes in the Company’s stock warrants during the three months ended June 30, 2012 and 2011.

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Accounting and Reporting Changes

3 Months Ended

Jun. 30, 2012

Notes

Accounting and Reporting Changes

8.  Accounting and Reporting Changes

The following is a summary of recent authoritative pronouncements that could impact the accounting, reporting, and/or disclosure of financial information by the Company.

In September 2011, the Intangibles topic of the Accounting Standards Codification (“ASC”) was amended to permit an entity to consider qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test.  These amendments were effective for the Company on April 1, 2012.

In April 2011, the criteria used to determine effective control of transferred assets in the Transfers and Servicing topic of the ASC  was amended by Accounting Standard Update (“ASU”) 2011-03.  The requirement for the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms and the collateral maintenance implementation guidance related to that criterion were removed from the assessment of effective control.  The other criteria to assess effective control were not changed.  The amendments were effective for the Company on April 1, 2012 and had no effect on the financial statements.

ASU 2011-04 was issued in May 2011 to amend the Fair Value Measurement topic of the ASC by clarifying the application of existing fair value measurement and disclosure requirements and by changing particular principles or requirements for measuring fair value or for disclosing information about fair value measurements.  These amendments were effective for the Company beginning April 1, 2012 and had no effect on the financial statements.

The Comprehensive Income topic of the ASC was amended in June 2011.  The amendment eliminates the option to present other comprehensive income as a part of the statement of changes in stockholders’ equity and requires consecutive presentation of the statement of net income and other comprehensive income.  The amendments were applicable to the Company on April 1, 2012 and have been applied retrospectively.  In December 2011, the topic was further amended to defer the effective date of presenting reclassification adjustments from other comprehensive income to net income on the face of the financial statements.  Companies should continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect prior to the amendments while the Financial Accounting Standards Board (“FASB”) redeliberates future requirements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

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Carrying Amounts and Fair Value of Financial Instruments: Schedule of Carrying Values and Estimated Fair Values of Debt Instruments (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Mar. 31, 2012
Checking, Savings, and Money Market Accounts
Financial Instruments Carrying Amount	$ 379,597	$ 371,295
Fair Value Financial Instruments Total	379,597
Fair Value Financial Instruments Level 1	379,597
Financial Instruments, Owned, at Fair Value		371,295
Certificate Accounts
Financial Instruments Carrying Amount	314,922	324,906
Fair Value Financial Instruments Total	317,069
Fair Value Financial Instruments Level 2	317,069
Financial Instruments, Owned, at Fair Value		327,117
Advances from FHLB
Financial Instruments Carrying Amount	108,166	122,070
Fair Value Financial Instruments Total	117,571
Fair Value Financial Instruments Level 2	117,571
Financial Instruments, Owned, at Fair Value		131,679
Other Borrowed Money
Financial Instruments Carrying Amount	10,023	9,801
Fair Value Financial Instruments Total	10,023
Fair Value Financial Instruments Level 1	10,023
Financial Instruments, Owned, at Fair Value		9,801
Senior Convertible Debentures
Financial Instruments Carrying Amount	5,155	6,084
Fair Value Financial Instruments Total	5,155
Fair Value Financial Instruments Level 2	5,155
Financial Instruments, Owned, at Fair Value		6,084
Junior Subordinated Debentures
Financial Instruments Carrying Amount	6,084	5,155
Fair Value Financial Instruments Total	6,084
Fair Value Financial Instruments Level 2	6,084
Financial Instruments, Owned, at Fair Value		5,155
Cash and Cash Equivalents
Financial Instruments Carrying Amount	10,653	9,331
Fair Value Financial Instruments Total	10,653
Fair Value Financial Instruments Level 1	10,653
Financial Instruments, Owned, at Fair Value		9,331
Certificates of Deposits With Other Banks
Financial Instruments Carrying Amount	1,728	1,727
Fair Value Financial Instruments Total	1,728
Fair Value Financial Instruments Level 1	1,728
Financial Instruments, Owned, at Fair Value		1,727
Investment and Mortgage Backed Securities
Financial Instruments Carrying Amount	423,427	421,631
Fair Value Financial Instruments Total	426,041
Fair Value Financial Instruments Level 2	426,041
Financial Instruments, Owned, at Fair Value		423,921
Loans Receivable Net
Financial Instruments Carrying Amount	413,067	428,511
Fair Value Financial Instruments Total	411,970
Fair Value Financial Instruments Level 2	411,970
Financial Instruments, Owned, at Fair Value		427,212
FHLB Stock
Financial Instruments Carrying Amount	6,928	8,471
Fair Value Financial Instruments Total	6,928
Fair Value Financial Instruments Level 1	6,928
Financial Instruments, Owned, at Fair Value		$ 8,471

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Investment And Mortgage-Backed Securities, Available For Sale: Schedule of Available-for-sale Securities Reconciliation (Details) (USD $)	Jun. 30, 2012	Mar. 31, 2012
FHLB Securities
Amortized Cost of Investment And Mortgage-Backed Securities Available For Sale	$ 2,440,263	$ 2,634,234
Available-for-sale Securities, Gross Unrealized Gains	71,377	64,660
Available-for-sale Securities, Debt Maturities, Fair Value	2,511,640	2,698,894
FNMA and FHLMC Bonds
Amortized Cost of Investment And Mortgage-Backed Securities Available For Sale	1,000,000	2,926,566
Available-for-sale Securities, Gross Unrealized Gains	790	560
Available-for-sale Securities, Gross Unrealized Losses		5,275
Available-for-sale Securities, Debt Maturities, Fair Value	1,000,790	2,921,851
SBA Bonds
Amortized Cost of Investment And Mortgage-Backed Securities Available For Sale	87,773,083	85,064,224
Available-for-sale Securities, Gross Unrealized Gains	1,730,497	1,357,490
Available-for-sale Securities, Gross Unrealized Losses	102,561	142,912
Available-for-sale Securities, Debt Maturities, Fair Value	89,401,019	86,278,802
Tax Exempt Municipal Bonds
Amortized Cost of Investment And Mortgage-Backed Securities Available For Sale	30,632,658	23,231,375
Available-for-sale Securities, Gross Unrealized Gains	1,398,464	971,739
Available-for-sale Securities, Gross Unrealized Losses	61,695	77,389
Available-for-sale Securities, Debt Maturities, Fair Value	31,969,427	24,125,725
Mortgage-Backed Securities
Amortized Cost of Investment And Mortgage-Backed Securities Available For Sale	224,933,434	229,462,521
Available-for-sale Securities, Gross Unrealized Gains	8,589,965	8,486,387
Available-for-sale Securities, Gross Unrealized Losses	141,795	95,073
Available-for-sale Securities, Debt Maturities, Fair Value	233,381,604	237,853,835
Equity Securities
Amortized Cost of Investment And Mortgage-Backed Securities Available For Sale	102,938	102,938
Available-for-sale Securities, Gross Unrealized Losses	30,188	27,188
Available-for-sale Securities, Debt Maturities, Fair Value	72,750	75,750
Total Securities
Amortized Cost of Investment And Mortgage-Backed Securities Available For Sale	346,882,376	343,421,858
Available-for-sale Securities, Gross Unrealized Gains	11,791,093	10,880,836
Available-for-sale Securities, Gross Unrealized Losses	336,239	347,837
Available-for-sale Securities, Debt Maturities, Fair Value	$ 358,337,230	$ 353,954,857

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Carrying Amounts and Fair Value of Financial Instruments: Schedule of Fair Value of Assets and Liabilities on Nonrecurring Basis (Details) (Assets, USD $)	Jun. 30, 2012		Mar. 31, 2012
Mortgage Loans Held for Sale
Fair Value Assets and Liabilities Nonrecurring Level 2	$ 3,158,501		$ 2,671,771
Fair Value of Assets and Liabilities on Nonrecurring Basis Balance at June 30, 2012	3,158,501
Fair Value of Assets and Liabilities on Nonrecurring Basis Balance at March 31, 2012			2,671,771
Impaired Loans
Fair Value Assets and Liabilities Nonrecurring Level 3	42,586,079	[1]	39,160,338	[2]
Fair Value of Assets and Liabilities on Nonrecurring Basis Balance at June 30, 2012	42,586,079	[1]
Fair Value of Assets and Liabilities on Nonrecurring Basis Balance at March 31, 2012			39,160,338	[2]
Foreclosed Assets
Fair Value Assets and Liabilities Nonrecurring Level 3	13,745,651		14,160,099
Fair Value of Assets and Liabilities on Nonrecurring Basis Balance at June 30, 2012	13,745,651
Fair Value of Assets and Liabilities on Nonrecurring Basis Balance at March 31, 2012			14,160,099
Total Nonrecurring Assets
Fair Value Assets and Liabilities Nonrecurring Level 2	3,158,501		2,671,771
Fair Value Assets and Liabilities Nonrecurring Level 3	56,331,730		53,320,437
Fair Value of Assets and Liabilities on Nonrecurring Basis Balance at June 30, 2012	59,490,231
Fair Value of Assets and Liabilities on Nonrecurring Basis Balance at March 31, 2012			$ 55,992,208

[1] IMPAIRED LOANS ARE REPORTED NET OF SPECIFIC RESERVES OF $44,541.

[2] IMPAIRED LOANS ARE REPORTED NET OF SPECIFIC RESERVES OF $1,636,848.

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Loans Receivable, Net: Loans and Leases Receivable, Troubled Debt Restructuring Policy (Policies)

3 Months Ended

Jun. 30, 2012

Policies

Loans and Leases Receivable, Troubled Debt Restructuring Policy

The Company considers a loan to be a TDR when the debtor experiences financial difficulties and the Company provides concessions such that we will not collect all principal and interest in accordance with the original terms of the loan agreement.  Concessions can relate to the contractual interest rate, maturity date, or payment structure of the note.  As part of our workout plan for individual loan relationships, we may restructure loan terms to assist borrowers facing challenges in the current economic environment.  TDRs included in impaired loans at June 30, 2012 and March 31, 2012 amounted to $16.8 million and $18.0 million, respectively.

During the quarter ended June 30, 2012, there were no loan modifications that were considered to be TDRs. During the quarter ended June 30, 2012, four loans with a recorded investment of $879,000 that had been restructured during the last 12 months subsequently defaulted during the period.  The Bank considers any loan 30 days or more past due to be in default.

Our policy with respect to accrual of interest on loans restructured in a TDR follows relevant supervisory guidance.  That is, if a borrower has demonstrated performance under the previous loan terms and shows capacity to perform under the restructured loan terms, continued accrual of interest at the restructured interest rate is likely.  If a borrower was materially delinquent on payments prior to the restructuring but shows capacity to meet the restructured loan terms, the loan will likely continue as nonaccrual going forward.  Lastly, if the borrower does not perform under the restructured terms, the loan is placed on nonaccrual status.

We will continue to closely monitor these loans and will cease accruing interest on them if management believes that the borrowers may not continue performing based on the restructured note terms.  If, after previously being classified as a TDR, a loan is restructured a second time, then that loan is automatically placed on nonaccrual status.  Our policy with respect to nonperforming loans requires the borrower to make a minimum of six consecutive payments in accordance with the loan terms before that loan can be placed back on accrual status.  Further, the borrower must show capacity to continue performing into the future prior to restoration of accrual status.

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Loans Receivable, Net: Schedule of Financing Receivables, Non Accrual Status (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Financing Receivables, Non Accrual Status

					$	%
	At June 30, 2012		At March 31, 2012		Increase	Increase
	Amount	Percent (1)	Amount	Percent (1)	(Decrease)	(Decrease)
Non-accrual loans:
Residential real estate	$3,353,517	0.8%	$3,638,929	0.8%	$(285,412)	7.8%
Commercial business	45,888	0.1%	20,808	-%	25,080	120.5%
Commercial real estate	24,292,887	5.7%	18,378,165	4.2%	5,914,722	32.2%
Consumer	549,203	0.1%	620,358	0.1%	(71,155)	11.5%
Total non-accrual loans	$28,241,495	6.7%	$22,658,260	5.1%	$5,583,235	24.6%

(1) Percent of gross loans receivable, net of deferred fees and loans in process and loans held for sale

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Critical Accounting Policies: Significant Accounting Policies (Policies)

3 Months Ended

Jun. 30, 2012

Policies

Significant Accounting Policies

The Company has adopted various accounting policies, which govern the application of accounting principles generally accepted in the United States in the preparation of our financial statements.  Our significant accounting policies are described in the footnotes to the audited consolidated financial statements at March 31, 2012 included in our 2012 Annual Report to Stockholders.  Certain accounting policies involve significant judgments and assumptions by management, which have a material impact on the carrying value of certain assets and liabilities, and, as such, have a greater possibility of producing results that could be materially different than originally reported.  We consider these accounting policies to be critical accounting policies.  The judgments and assumptions we use are based on historical experience and other factors, which we believe to be reasonable under the circumstances.  Because of the nature of the judgments and assumptions we make, actual results could differ from these judgments and estimates which could have a material impact on our carrying values of assets and liabilities and our results of operations.

The Company believes the allowance for loan losses is a critical accounting policy that requires the most significant judgments and estimates used in preparation of the consolidated financial statements.  The impact of an unexpected and sudden large loss could deplete the allowance and potentially require increased provisions to replenish the allowance, which would negatively affect earnings. The Company provides for loan losses using the allowance method.  Accordingly, all loan losses are charged to the related allowance and all recoveries are credited to the allowance for loan losses.  Additions to the allowance for loan losses are provided by charges to operations based on various factors, which, in management’s judgment, deserve current recognition in estimating possible losses.  Such factors considered by management include the fair value of the underlying collateral, stated guarantees by the borrower (if applicable), the borrower’s ability to repay from other economic resources, growth and composition of the loan portfolio, the relationship of the allowance for loan losses to the outstanding loans, loss experience, delinquency trends, and general economic conditions.  Management evaluates the carrying value of the loans periodically and the allowance is adjusted accordingly.

While management uses the best information available to make evaluations, future adjustments may be necessary if economic conditions differ substantially from the assumptions used in making these evaluations.  The allowance for loan losses is subject to periodic evaluations by various authorities and may be subject to adjustments based upon the information that is available at the time of their examination. For additional information see the risk factor entitled: “Our provision for loan losses and net loan charge offs have remained at elevated levels and we may be required to make further increases in our provisions for loan losses and to charge off additional loans in the future, which could adversely affect our results of operations ,” in Item 1A. Risk Factors of our 2012 Form 10-K. The Company values impaired loans at the loan’s fair value if it is probable that the Company will be unable to collect all amounts due according to the terms of the loan agreement at the present value of expected cash flows, the market price of the loan, if available, or the value of the underlying collateral.  Expected cash flows are required to be discounted at the loan’s effective interest rate.  When the ultimate collectibility of an impaired loan’s principal is in doubt, wholly or partially, all cash receipts are applied to principal.  When this doubt does not exist, cash receipts are applied under the contractual terms of the loan agreement first to interest and then to principal.  Once the recorded principal balance has been reduced to zero, future cash receipts are applied to interest income to the extent that any interest has been foregone.  Further cash receipts are recorded as recoveries of any amounts previously charged off.

The Company uses assumptions and estimates in determining income taxes payable or refundable for the current year, deferred income tax liabilities and assets for events recognized differently in its financial statements and income tax returns, and income tax expense. Determining these amounts requires analysis of certain transactions and interpretation of tax laws and regulations. The Company exercises considerable judgment in evaluating the amount and timing of recognition of the resulting tax liabilities and assets. These judgments and estimates are reevaluated on a continual basis as regulatory and business factors change. No assurance can be given that either the tax returns submitted by us or the income tax reported on the Consolidated Financial Statements will not be adjusted by either adverse rulings by the United States Tax Court, changes in the tax code, or assessments made by the Internal Revenue Service.

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Carrying Amounts and Fair Value of Financial Instruments: Fair Value of Mortgage Loans Held for Sale Policy (Policies)

3 Months Ended

Jun. 30, 2012

Policies

Fair Value of Mortgage Loans Held for Sale Policy

The Company originates fixed rate residential loans on a servicing released basis in the secondary market. Loans closed but not yet settled with Freddie Mac or other investors, are carried in the Company’s loans held for sale portfolio.  These loans are fixed rate residential loans that have been originated in the Company’s name and have closed.  Virtually all of these loans have commitments to be purchased by investors and the majority of these loans were locked in by price with the investors on the same day or shortly thereafter that the loan was locked in with the Company’s customers.  Therefore, these loans present very little market risk for the Company.

The Company usually delivers to, and receives funding from, the investor within 30 days.  Commitments to sell these loans to the investor are considered derivative contracts and are sold to investors on a “best efforts" basis. The Company is not obligated to deliver a loan or pay a penalty if a loan is not delivered to the investor. As a result of the short-term nature of these derivative contracts, the fair value of the mortgage loans held for sale in most cases is the same as the value of the loan amount at its origination. These loans are classified as Level 2.

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Loans Receivable, Net: Schedule of Loans Receivable Credit Quality Indicators (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Loans Receivable Credit Quality Indicators

	June 30, 2012
	Credit Quality Measures
			Special		Total
	Pass	Caution	Mention	Substandard	Loans
Residential Real Estate	$87,436,807	$225,553	$295,572	$7,716,104	$95,674,036
Consumer	55,352,127	177,115	103,146	1,678,100	57,310,488
Commercial Business	7,932,730	395,763	177,500	387,676	8,893,669
Commercial Real Estate	181,617,951	18,860,609	17,022,335	44,702,120	262,203,015
Total	$332,339,615	$19,659,040	$17,598,553	$54,484,000	$424,081,208

	March 31, 2012
	Credit Quality Measures
			Special		Total
	Pass	Caution	Mention	Substandard	Loans
Residential Real Estate	$88,536,685	$-	$573,887	$8,697,345	$97,807,917
Consumer	57,113,676	159,805	27,604	1,383,915	58,685,000
Commercial Business	8,608,378	446,815	-	497,382	9,552,575
Commercial Real Estate	190,230,745	21,874,264	19,783,230	44,429,658	276,317,897
Total	$344,489,484	$22,480,884	$20,384,721	$55,008,300	$442,363,389

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Carrying Amounts and Fair Value of Financial Instruments: Schedule of Carrying Values and Estimated Fair Values of Debt Instruments (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

	June 30, 2012
	Carrying	Fair Value
	Amount	Total	Level 1	Level 2	Level 3
(In Thousands)
Financial Assets:
Cash And Cash Equivalents	$10,653	$10,653	$10,653	$-	$-
Certificates of Deposits With Other Banks	1,728	1,728	1,728	-	-
Investment And Mortgage-Backed Securities	423,427	426,041	-	426,041	-
Loans Receivable, Net	413,067	411,970	-	411,970	-
FHLB Stock	6,928	6,928	6,928	-	-
Financial Liabilities:
Deposits:
Checking, Savings, And Money Market Accounts	379,597	379,597	379,597	-	-
Certificate Accounts	314,922	317,069	-	317,069	-
Advances From FHLB	108,166	117,571	-	117,571	-
Other Borrowed Money	10,023	10,023	10,023	-	-
Senior Convertible Debentures	5,155	5,155	-	5,155	-
Junior Subordinated Debentures	6,084	6,084	-	6,084	-

	March 31, 2012
	Carrying	Estimated
	Amount	Fair Value
Financial Assets:
Cash And Cash Equivalents	$9,331	$9,331
Certificates of Deposits With Other Banks	1,727	1,727
Investment And Mortgage-Backed Securities	421,631	423,921
Loans Receivable, Net	428,511	427,212
FHLB Stock	8,471	8,471
Financial Liabilities:
Deposits:
Checking, Savings, And Money Market Accounts	$371,295	$371,295
Certificate Accounts	324,906	327,117
Advances From FHLB	122,070	131,679
Other Borrowed Money	9,801	9,801
Senior Convertible Debentures	6,084	6,084
Junior Subordinated Debentures	5,155	5,155

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Security Federal Corporation and Subsidiaries Consolidated Statements of Comprehensive Income (Unaudited) (USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Net Income	$ 730,728	$ 461,047
Unrealized Gains On Securities:
Unrealized Holding Gains On Securities Available For Sale, Net of Taxes	636,069	2,813,659
Reclassification Adjustment For Gains Included In Net Income, Net of Taxes	(64,269)	(106,158)
Total Other Comprehensive Income	571,800	2,707,501
Total Comprehensive Income	$ 1,302,528	$ 3,168,548

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Principles of Consolidation

3 Months Ended

Jun. 30, 2012

Notes

Principles of Consolidation

2.  Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Security Federal Bank (the “Bank”) and the Bank’s wholly owned subsidiaries, Security Federal Insurance, Inc. (“SFINS”) and Security Financial Services Corporation (“SFSC”). SFINS was formed during fiscal 2002 and began operating during the December 2001 quarter and is an insurance agency offering auto, business, health, and home insurance.  SFINS has a wholly owned subsidiary, Collier Jennings Financial Corporation which has as subsidiaries Collier Jennings Inc., The Auto Insurance Store Inc., and Security Federal Premium Pay Plans Inc. (the “Collier Jennings Companies”). Security Federal Premium Pay Plans Inc. has one wholly owned premium finance subsidiary and also has an ownership interest in four other premium finance subsidiaries.

SFSC was formed in 1975 and was inactive for several years. During the quarter ended December 31, 2010, it was reactivated and utilized to hold and operate a repossessed hotel located in Hardeeville, South Carolina. Subsequently, in fiscal 2012 the hotel was sold and the subsidiary once again returned to inactive status.

The Company has a wholly owned subsidiary, Security Federal Statutory Trust (the “Trust”), which issued and sold fixed and floating rate capital securities of the Trust.  However, under current accounting guidance, the Trust is not consolidated in the Company’s financial statements.  The Bank is primarily engaged in the business of accepting savings and demand deposits and originating mortgage loans and other loans to individuals and small businesses for various personal and commercial purposes.

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Stock-Based Compensation: Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range (Details) (USD $)	Jun. 30, 2012	Jun. 30, 2011
Balance Beginning of Period
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Outstanding Options	72,900	81,400
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Exercise Price	$ 22.62	$ 22.51
Options Forfeited
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Outstanding Options		7,000
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Exercise Price		$ 21.72
Balance End of Period
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Outstanding Options	72,900	74,400
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Exercise Price	$ 22.62	$ 22.59
Options Exercisable
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Outstanding Options	44,000	49,900
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Exercise Price	$ 22.07	$ 21.91
Options Available for Grant
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Outstanding Options	50,000	50,000

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Loans Receivable, Net: Loans and Leases Receivable, Troubled Debt Restructuring Policy (Details) (USD $)	12 Months Ended
	Jun. 30, 2012	Mar. 31, 2012
Troubled debt restructurings included in impaired loans	$ 16,800,000	$ 18,000,000
Troubled debt restructurings subsequently defaulted	$ 879,000

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Investment And Mortgage-Backed Securities, Available For Sale: Schedule of Available for Sale Securities by Length of Time in Continuo9us Unrealized Loss Position (Details) (USD $)	Jun. 30, 2012	Mar. 31, 2012
Less than 12 Months | SBA Bonds
Available for Sale Securities Continuous Unrealized Loss Position Fair Value	$ 10,726,866	$ 12,508,821
Available for Sale Securities Continuous Loss Position Gross Unrealized Losses	102,561	142,912
Less than 12 Months | Tax Exempt Municipal Bonds
Available for Sale Securities Continuous Unrealized Loss Position Fair Value	8,577,089	3,390,580
Available for Sale Securities Continuous Loss Position Gross Unrealized Losses	61,695	77,389
Less than 12 Months | Mortgage-Backed Securities
Available for Sale Securities Continuous Unrealized Loss Position Fair Value	21,961,960	23,053,784
Available for Sale Securities Continuous Loss Position Gross Unrealized Losses	141,795	95,073
Less than 12 Months | Total Securities
Available for Sale Securities Continuous Unrealized Loss Position Fair Value	41,265,915	40,874,476
Available for Sale Securities Continuous Loss Position Gross Unrealized Losses	306,051	320,649
Less than 12 Months | FNMA and FHLMC Bonds
Available for Sale Securities Continuous Unrealized Loss Position Fair Value		1,921,291
Available for Sale Securities Continuous Loss Position Gross Unrealized Losses		5,275
12 Months or More | Equity Securities
Available for Sale Securities Continuous Unrealized Loss Position Fair Value	72,750	75,750
Available for Sale Securities Continuous Loss Position Gross Unrealized Losses	30,188	27,188
12 Months or More | Total Securities
Available for Sale Securities Continuous Unrealized Loss Position Fair Value	72,750	75,750
Available for Sale Securities Continuous Loss Position Gross Unrealized Losses	30,188	27,188
Total Amount | SBA Bonds
Available for Sale Securities Continuous Unrealized Loss Position Fair Value	10,726,866	12,508,821
Available for Sale Securities Continuous Loss Position Gross Unrealized Losses	102,561	142,912
Total Amount | Tax Exempt Municipal Bonds
Available for Sale Securities Continuous Unrealized Loss Position Fair Value	8,577,089	3,390,580
Available for Sale Securities Continuous Loss Position Gross Unrealized Losses	61,695	77,389
Total Amount | Mortgage-Backed Securities
Available for Sale Securities Continuous Unrealized Loss Position Fair Value	21,961,960	23,053,784
Available for Sale Securities Continuous Loss Position Gross Unrealized Losses	141,795	95,073
Total Amount | Equity Securities
Available for Sale Securities Continuous Unrealized Loss Position Fair Value	72,750	75,750
Available for Sale Securities Continuous Loss Position Gross Unrealized Losses	30,188	27,188
Total Amount | Total Securities
Available for Sale Securities Continuous Unrealized Loss Position Fair Value	41,338,665	40,950,226
Available for Sale Securities Continuous Loss Position Gross Unrealized Losses	336,239	347,837
Total Amount | FNMA and FHLMC Bonds
Available for Sale Securities Continuous Unrealized Loss Position Fair Value		1,921,291
Available for Sale Securities Continuous Loss Position Gross Unrealized Losses		$ 5,275

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Carrying Amounts and Fair Value of Financial Instruments: Fair Value of Impaired Loans Policy (Policies)

3 Months Ended

Jun. 30, 2012

Policies

Fair Value of Impaired Loans Policy

The Company does not record loans held for investment at fair value on a recurring basis. However, from time to time, a loan is considered impaired and an allowance for loan losses is established as necessary. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, management measures impairment.

Fair value is estimated using one of the following methods: fair value of the collateral less estimated costs to sell, discounted cash flows, or market value of the loan based on similar debt. The fair value of the collateral less estimated costs to sell is the most frequently used method. Typically, the Company reviews the most recent appraisal and if it is over 24 months old will request a new third party appraisal. Depending on the particular circumstances surrounding the loan, including the location of the collateral, the date of the most recent appraisal and the value of the collateral relative to the recorded investment in the loan, management may order an independent appraisal immediately or, in some instances, may elect to perform an internal analysis. Specifically as an example, in situations where the collateral on a nonperforming commercial real estate loan is out of the Company’s primary market area, management would typically order an independent appraisal immediately, at the earlier of the date the loan becomes nonperforming or immediately following the determination that the loan is impaired. However, as a second example, on a nonperforming commercial real estate loan where management is familiar with the property and surrounding areas and where the original appraisal value far exceeds the recorded investment in the loan, management may perform an internal analysis whereby the previous appraisal value would be reviewed and adjusted for current conditions including recent sales of similar properties in the area and any other relevant economic trends. These valuations are reviewed at a minimum on a quarterly basis.

Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. At June 30, 2012, substantially all of the total impaired loans were evaluated based on the fair value of the collateral. Impaired loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. The Company records impaired loans as nonrecurring Level 3.

As of June 30, 2012 and March 31, 2012, the recorded investment in impaired loans was $42.6 million and $40.8 million, respectively. The average recorded investment in impaired loans was $41.7 million for the quarter ended June 30, 2012 and $34.3 million for the year ended March 31, 2012.

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Loans Receivable, Net: Schedule of Accounts, Notes, Loans and Financing Receivable (Details) (USD $)	Jun. 30, 2012	Mar. 31, 2012
Loans Receivable Residential Real Estate	$ 95,674,036	$ 97,807,917
Loans and Leases Receivable, Gross, Consumer	57,310,488	58,685,000
Loans Receivable Commercial Business	8,893,669	9,552,575
Loans Receivable, Gross, Commercial, Real Estate	262,203,015	276,317,897
Total Loans Held For Investment	424,081,208	442,363,389
Loans Receivable Held For Sale	3,158,501	2,671,771
Total Loans Receivable Gross	427,239,709	445,035,160
Allowance for Possible Loan Losses	12,684,327	14,615,198
Loans and Leases Receivable, Loans in Process	1,472,379	1,886,652
Loans Receivable Deferred Loan Fees	16,108	22,704
Total Loans Receivable, Net	$ 413,066,895	$ 428,510,606

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Stock-Based Compensation: Schedule of Stock Options Outstanding (Tables)

3 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Stock Options Outstanding

	Outstanding Options	Option Price	Expiration Date
Grant Date
09/01/03	2,400	$24.00	08/31/13
12/01/03	3,000	$23.65	11/30/13
01/01/04	5,000	$24.22	12/31/13
03/08/04	7,000	$21.43	03/08/14
06/07/04	2,000	$24.00	06/07/14
01/01/05	19,000	$20.55	12/31/14
01/01/06	4,000	$23.91	01/01/16
08/24/06	6,000	$23.03	08/24/16
05/24/07	2,000	$24.34	05/24/17
07/09/07	1,000	$24.61	07/09/17
10/01/07	2,000	$24.28	10/01/17
01/01/08	15,000	$23.49	01/01/18
05/19/08	2,500	$22.91	05/19/18
07/01/08	2,000	$22.91	07/01/18

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Basis of Presentation: Basis of Presentation Policy (Policies)

3 Months Ended

Jun. 30, 2012

Policies

Basis of Presentation Policy

The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and accounting principles generally accepted in the United States of America; therefore, they do not include all disclosures necessary for a complete presentation of financial condition, results of operations, and cash flows.  Such statements are unaudited but, in the opinion of management, reflect all adjustments, which are of a normal recurring nature and necessary for a fair presentation of results for the selected interim periods.  Users of financial information produced for interim periods are encouraged to refer to the footnotes contained in the audited financial statements appearing in Security Federal Corporation’s (the “Company”) 2012 Annual Report to Shareholders which was filed as an exhibit to our Annual Report on Form 10-K for the year ended March 31, 2012 (“2012 10-K”) when reviewing interim financial statements.  The results of operations for the three month period ended June 30, 2012 are not necessarily indicative of the results that may be expected for the entire fiscal year.