SECURITY FEDERAL CORP - FORM 10-Q

SECURITY FEDERAL CORP - FORM 10-Q - May 14, 2018

Attached files

Attached files

file	filename
EX-32 - EXHIBIT 32 - SECURITY FEDERAL CORP	sfdl-20180331xex32.htm
EX-31.2 - EXHIBIT 31.2 - SECURITY FEDERAL CORP	sfdl-20180331xex312.htm
EX-31.1 - EXHIBIT 31.1 - SECURITY FEDERAL CORP	sfdl-20180331xex311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10 – Q

(Mark one)

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

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2018

( ) 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: 000-16120

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 NORTHWEST, AIKEN, SOUTH CAROLINA 29801

(Address of principal executive office and 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 (§232.405 of this chapter) 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, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.



	Large accelerated filed [ ]		Smaller reporting company [ X ]
	Non-accelerated filer [ ]		Emerging growth company [ ]
	Accelerated filer [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



YES				NO

Indicate by check mark whether the registrant is a shell corporation (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.




PART I.	FINANCIAL INFORMATION (UNAUDITED)	PAGE NO.
Item 1.	Financial Statements (unaudited):	3
	Consolidated Balance Sheets at March 31, 2018 and December 31, 2017	3
	Consolidated Statements of Income for the Three Months Ended March 31, 2018 and 2017	4
	Consolidated Statements of Comprehensive (Loss) Income for the Three Months Ended March 31, 2018 and 2017	5
	Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31, 2018 and 2017	6
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2018 and 2017	7
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	40
Item 4.	Controls and Procedures	40

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	41
	Signatures	43

SCHEDULES OMITTED

All schedules other than those indicated above are omitted because of the absence of the conditions under which they are required or because the information is included in the consolidated financial statements and related notes.

SECURITY FEDERAL CORPORATION AND SUBSIDIARIES

Part 1. Financial Information

Item 1. Financial Statements

Consolidated Balance Sheets



	March 31, 2018			December 31, 2017
	(Unaudited)			(Audited)
ASSETS:
Cash and Cash Equivalents	$	15,598,549		$	10,319,624
Certificates of Deposit with Other Banks	1,950,010			1,950,010
Investment and Mortgage-Backed Securities:
Available For Sale ("AFS")	358,852,200			384,973,906
Held To Maturity (Fair Value of $23,842,005 and $27,054,934 at March 31, 2018 and December 31, 2017, Respectively)	24,258,599			27,080,970
Total Investments and Mortgage-Backed Securities	383,110,799			412,054,876
Loans Receivable, Net:
Held For Sale	2,407,478			3,051,950
Held For Investment (Net of Allowance of $8,204,016 and $8,221,618 at March 31, 2018 and December 31, 2017, Respectively)	414,057,783			387,441,247
Total Loans Receivable, Net	416,465,261			390,493,197
Accrued Interest Receivable:
Loans	1,221,584			1,067,657
Mortgage-Backed Securities	544,327			589,000
Investment Securities	1,591,519			1,699,961
Total Accrued Interest Receivable	3,357,430			3,356,618
Premises and Equipment, Net	22,840,720			22,797,844
Federal Home Loan Bank ("FHLB") Stock, at Cost	2,532,800			2,931,900
Other Real Estate Owned ("OREO")	1,073,856			1,115,671
Bank Owned Life Insurance ("BOLI")	18,932,893			18,797,893
Goodwill	1,199,754			1,199,754
Other Assets	4,624,012			3,795,212
Total Assets	$	871,686,084		$	868,812,599
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Liabilities:
Deposit Accounts	$	716,666,452		$	702,106,619
Advance Payments By Borrowers For Taxes and Insurance	427,603			269,761
Advances From FHLB	41,000,000			51,680,000
Other Borrowings	13,779,454			11,307,161
Note Payable	6,200,000			8,500,000
Junior Subordinated Debentures	5,155,000			5,155,000
Senior Convertible Debentures	6,064,000			6,064,000
Other Liabilities	6,093,678			5,806,604
Total Liabilities	$	795,386,187		$	790,889,145
Shareholders' Equity:
Common Stock, $.01 Par Value; Authorized 5,000,000 Shares; Issued and Outstanding Shares, 3,154,527 and 2,953,324, Respectively, at March 31, 2018 and 3,153,907 and 2,952,974, Respectively, at December 31, 2017	$	31,543		$	31,539
Additional Paid-In Capital	12,220,859			12,212,844
Treasury Stock, at Cost (200,933 Shares)	(4,330,712		)	(4,330,712		)
Accumulated Other Comprehensive Income ("AOCI")	447,409			2,932,122
Retained Earnings	67,930,798			67,077,661
Total Shareholders' Equity	$	76,299,897		$	77,923,454
Total Liabilities and Shareholders' Equity	$	871,686,084		$	868,812,599

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

SECURITY FEDERAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)



	Three Months Ended March 31,
	2018		2017
Interest Income:
Loans	$	5,389,487	$	4,747,478
Mortgage-Backed Securities	1,315,420		1,122,067
Investment Securities	1,060,666		1,113,582
Other	8,248		20,198
Total Interest Income	7,773,821		7,003,325
Interest Expense:
NOW and Money Market Accounts	187,205		133,232
Statement Savings Accounts	11,553		9,272
Certificate Accounts	537,561		425,787
FHLB Advances and Other Borrowed Money	191,022		121,284
Note Payable	76,671		111,947
Senior Convertible Debentures	121,280		121,680
Junior Subordinated Debentures	43,685		34,734
Total Interest Expense	1,168,977		957,936
Net Interest Income	6,604,844		6,045,389
Provision For Loan Losses	—		—
Net Interest Income After Provision For Loan Losses	6,604,844		6,045,389
Non-Interest Income:
Gain on Sale of Investment Securities	436,304		583,391
Gain on Sale of Loans	286,003		280,368
Service Fees on Deposit Accounts	257,179		240,885
Commissions From Insurance Agency	179,225		153,992
Trust Income	232,500		182,000
BOLI Income	135,000		120,000
Check Card Fee Income	307,046		270,992
Other	210,763		165,721
Total Non-Interest Income	2,044,020		1,997,349
Non-Interest Expense:
Compensation and Employee Benefits	3,809,124		3,511,487
Occupancy	551,268		518,052
Advertising	188,672		135,535
Depreciation and Maintenance of Equipment	540,297		465,564
Federal Deposit Insurance Corporation ("FDIC") Insurance Premiums	66,786		64,674
Net Cost (Benefit) of Operation of OREO	38,733		(119,104		)
Other	1,324,066		1,252,730
Total Non-Interest Expense	6,518,946		5,828,938
Income Before Income Taxes	2,129,918		2,213,800
Provision For Income Taxes	399,801		585,182
Net Income	$	1,730,117	$	1,628,618
Net Income Per Common Share (Basic)	$	0.59	$	0.55
Net Income Per Common Share (Diluted)	$	0.56	$	0.52
Cash Dividend Per Share on Common Stock	$	0.09	$	0.09
Weighted Average Shares Outstanding (Basic)	2,953,180		2,944,001
Weighted Average Shares Outstanding (Diluted)	3,257,532		3,250,549

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

SECURITY FEDERAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive (Loss) Income (Unaudited)



	Three Months Ended March 31,
	2018			2017
Net Income	$	1,730,117		$	1,628,618
Other Comprehensive (Loss) Income
Unrealized (Losses) Gains on Securities:
Unrealized Holding (Losses) Gains on Securities Available For Sale, Net of Taxes of $(896,557) and $539,973 at March 31, 2018 and 2017, Respectively	(2,742,899		)	869,685
Reclassification Adjustment for Gains Included in Net Income, Net of Taxes of $109,076 and $221,689 at March 31, 2018 and 2017, Respectively	(327,228		)	(361,702		)
Amortization of Unrealized Gains on Available For Sale Securities Transferred to Held To Maturity, Net of Taxes of $(10,865) and $(20,361) at March 31, 2018 and 2017, Respectively	(25,677		)	(33,278		)
Other Comprehensive (Loss) Income	(3,095,804		)	474,705
Comprehensive (Loss) Income	$	(1,365,687	)	$	2,103,323

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

SECURITY FEDERAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Shareholders' Equity (Unaudited)

For the Three Months Ended March 31, 2018 and 2017



	Common Stock		Unvested Restricted Stock			Additional Paid – In Capital		Treasury Stock			Accumulated Other Comprehensive Income		Retained Earnings			Total
Balance at December 31, 2016	$	31,464	$	(25,358	)	$	12,036,744	$	(4,330,712	)	$	1,180,086	$	62,220,050		$	71,112,274
Net Income	—		—			—		—			—		1,628,618			1,628,618
Other Comprehensive Income, Net of Tax	—		—			—		—			474,705		—			474,705
Vesting of Restricted Stock			25,358			—		—			—		—			25,358
Cash Dividends on Common Stock	—		—			—		—			—		(265,092		)	(265,092		)
Balance at March 31, 2017	$	31,464	$	—		$	12,036,744	$	(4,330,712	)	$	1,654,791	$	63,583,576		$	72,975,863



	Common Stock		Additional Paid – In Capital		Treasury Stock			Accumulated Other Comprehensive Income			Retained Earnings			Total
Balance at December 31, 2017	$	31,539	$	12,212,844	$	(4,330,712	)	$	2,932,122		$	67,077,661		$	77,923,454
Net Income	—		—		—			—			1,730,117			1,730,117
Other Comprehensive Income, Net of Tax	—		—		—			(3,095,804		)	—			(3,095,804		)
Reclassification of stranded tax effects from AOCI to Retained Earnings	—		—		—			611,091			(611,091		)	—
Stock Options Exercised	4		8,015		—			—			—			8,019
Cash Dividends on Common Stock	—		—		—			—			(265,889		)	(265,889		)
Balance at March 31, 2018	$	31,543	$	12,220,859	$	(4,330,712	)	$	447,409		$	67,930,798		$	76,299,897

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

SECURITY FEDERAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)



	Three Months Ended March 31,
	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	1,730,117		$	1,628,618
Adjustments To Reconcile Net Income To Net Cash Provided By Operating Activities:
Depreciation Expense	358,865			330,970
Stock Option Compensation Expense	—			25,358
Discount Accretion and Premium Amortization	1,466,178			1,363,031
Earnings on BOLI	(135,000		)	(120,000		)
Gain on Sales of Loans	(286,003		)	(280,368		)
Gain on Sales of Mortgage-Backed Securities ("MBS")	(181,034		)	(284,935		)
Gain on Sales of Investment Securities	(255,270		)	(298,456		)
Gain on Sales of OREO	(11,846		)	(214,025		)
Write Down on OREO	10,000			18,000
Amortization of Deferred Loan Costs	16,384			25,899
Proceeds From Sale of Loans Held For Sale	10,210,795			10,585,391
Origination of Loans Held For Sale	(9,280,320		)	(7,179,868		)
(Increase) Decrease in Accrued Interest Receivable:
Loans	(153,927		)	4,670
MBS	44,673			34,282
Investment Securities	108,442			(105,929		)
Increase in Advance Payments By Borrowers	157,842			179,825
Other, Net	438,231			808,495
Net Cash Provided By Operating Activities	$	4,238,127		$	6,520,958
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of MBS AFS	$	(10,238,188	)	$	(6,638,366	)
Proceeds from Payments and Maturities of MBS AFS	9,160,773			9,239,992
Proceeds from Sale of MBS AFS	17,007,024			11,047,043
Proceeds from Payments and Maturities of MBS Held To Maturity ("HTM")	724,785			1,003,401
Purchase of Investment Securities AFS	(14,115,856		)	(42,474,277		)
Proceeds from Payments and Maturities of Investment Securities AFS	7,736,448			5,354,864
Proceeds from Sale of Investment Securities AFS	11,563,456			4,256,705
Purchase of Investment Securities HTM	—			(3,997,750		)
Proceeds from Payments and Maturities of Investment Securities HTM	2,000,000			—
Proceeds from Redemption of Certificates of Deposits with Other Banks	—			850,000
Purchase of FHLB Stock	(2,186,200		)	(2,222,900		)
Redemption of FHLB Stock	2,585,300			2,653,200
Increase in Loans Receivable	(26,711,520		)	1,219,032
Proceeds From Sale of OREO	122,261			989,846
Purchase and Improvement of Premises and Equipment	(401,741		)	(772,043		)
Net Cash Used By Investing Activities	$	(2,753,458	)	$	(19,491,253	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Deposit Accounts	$	14,559,833		$	43,576,643
Proceeds from FHLB Advances	80,660,000			26,540,000
Repayment of FHLB Advances	(91,340,000		)	(36,935,000		)
Increase in Other Borrowings, Net	2,472,293			448,601
Repayment of Note Payable	(2,300,000		)	(1,000,000		)
Proceeds from Employee Stock Options Exercised	8,019			—
Dividends to Common Stock Shareholders	(265,889		)	(265,092		)
Net Cash Provided By Financing Activities	$	3,794,256		$	32,365,152
Net Increase in Cash and Cash Equivalents	5,278,925			19,394,857
Cash and Cash Equivalents at Beginning of Period	10,319,624			9,374,549
Cash and Cash Equivalents at End of Period	$	15,598,549		$	28,769,406

SECURITY FEDERAL CORPORATION AND SUBSIDIARIES



Consolidated Statements of Cash Flows (Unaudited) (Continued)

	Three Months Ended March 31,
	2018			2017
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash Paid During The Period For:
Interest	$	1,033,699		$	830,766
Income Taxes	$	—		$	—
Supplemental Schedule of Non Cash Transactions:
Transfers From Loans Receivable to OREO	$	78,600		$	128,008
(Decrease) Increase in Unrealized Gains on Securities AFS, Net of Taxes	$	(3,095,804	)	$	474,705

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

SECURITY FEDERAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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 ("U.S. GAAP"); 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 consolidated financial statements appearing in Security Federal Corporation’s (the “Company”) 2017 Annual Report to Shareholders which was filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2017 (“2017 10-K”) when reviewing interim financial statements. The unaudited consolidated results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

2. Principles of Consolidation

The accompanying unaudited 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 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 Security Federal Auto Insurance, The Auto Insurance Store Inc., and Security Federal Premium Pay Plans Inc. 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 is currently inactive. All significant intercompany transactions and balances have been eliminated in consolidation.

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.

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 December 31, 2017 included in our 2017 Annual Report to Shareholders. 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.

SECURITY FEDERAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

3. Critical Accounting Policies, Continued

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 our bank regulatory agencies, including the Board of Governors of the Federal Reserve System ("Federal Reserve"), the FDIC and the South Carolina Board of Financial Institutions, that may require adjustments to be made to the allowance based upon the information that is available at the time of their examination.

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.

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 EPS by application of the treasury stock method. All of the options outstanding at March 31, 2018 and 2017 had an exercise price below the average market price during the three months ended March 31, 2018 and 2017. Therefore, these options were considered to be dilutive to EPS in those periods.

The following tables include a summary of the Company's basic and diluted EPS for the periods indicated.



	Three Months Ended March 31,
	2018						2017
	Income		Shares	Per Share Amounts			Income		Shares	Per Share Amounts
Basic EPS	$	1,730,117	2,953,180	$	0.59		$	1,628,618	2,944,001	$	0.55
Effect of Dilutive Securities:
Stock Options	—		1,152	—			—		2,348	—
Senior Convertible Debentures	90,960		303,200	(0.03		)	75,442		304,200	(0.03)
Diluted EPS	$	1,821,077	3,257,532	$	0.56		$	1,704,060	3,250,549	$	0.52

SECURITY FEDERAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

5. Stock-Based Compensation

Certain officers and directors of the Company participate in incentive and non-qualified stock option plans. 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:



	Three Months Ended March 31,
	2018		2017
	Shares	Weighted Average Exercise Price	Shares	Weighted Average Exercise Price
	Shares	Weighted Average Exercise Price	Shares	Weighted Average Exercise Price
Balance, Beginning of Period	4,500	$22.91	21,500	$23.57
Options Exercised	350	22.91	—	—
Balance, End of Period	4,150	$22.91	21,500	$23.57

Options Exercisable	4,150		20,600

Options Available For Grant	50,000		50,000

At March 31, 2018, the Company had the following options outstanding:

SECURITY FEDERAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

6. 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 at the dates indicated were as follows:



	March 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Student Loan Pools	$	11,509,602	$	11,702	$	89,690	$	11,431,614
Small Business Administration (“SBA”) Bonds	116,226,896		914,781		328,335		116,813,342
Tax Exempt Municipal Bonds	57,866,536		1,231,282		445,775		58,652,043
Taxable Municipal Bonds	2,015,694		—		34,364		1,981,330
Mortgage-Backed Securities	170,554,894		1,178,301		1,914,324		169,818,871
Equity Securities	155,000		—		—		155,000
Total Available For Sale	$	358,328,622	$	3,336,066	$	2,812,488	$	358,852,200

	December 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Student Loan Pools	$	8,522,043	$	1,288	$	1,546	$	8,521,785
SBA Bonds	123,324,802		1,113,160		189,518		124,248,444
Tax Exempt Municipal Bonds	59,623,185		2,789,233		56,851		62,355,567
Taxable Municipal Bonds	2,016,833		—		19,703		1,997,130
Mortgage-Backed Securities	186,732,705		1,936,847		973,572		187,695,980
Equity Securities	155,000		—		—		155,000
Total Available For Sale	$	380,374,568	$	5,840,528	$	1,241,190	$	384,973,906

Student Loan Pools are typically 97% guaranteed by the United States government while SBA bonds are 100% backed by the full faith and credit of the United States government. Included in the tables above and below in mortgage-backed securities are Government National Mortgage Association ("GNMA") mortgage-backed securities, which are also backed by the full faith and credit of the United States government. At March 31, 2018, AFS GNMA mortgage-backed securities had an amortized cost and fair value of $83.3 million and $83.2 million, respectively, compared to an amortized cost and fair value of $101.3 million and $102.1 million, respectively, at December 31, 2017.

Also included in mortgage-backed securities in the tables above and below are private label collateralized mortgage obligation ("CMO") securities, which are issued by non-governmental real estate mortgage investment conduits and are not backed by the full faith and credit of the United States government. At March 31, 2018 the Bank held AFS private label CMO mortgage-backed securities with an amortized cost and fair value of $30.3 million and $30.2 million, respectively, compared to an amortized cost and fair value of $26.9 million and $26.9 million, respectively, at December 31, 2017.

SECURITY FEDERAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

6. Investment and Mortgage-Backed Securities, Available For Sale, Continued

The amortized cost and fair value of investment and mortgage-backed securities available for sale at March 31, 2018 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. Since mortgage-backed securities are not due at a single maturity date, they are disclosed separately, rather than allocated over the maturity groupings set forth in the table below.



	March 31, 2018
Investment Securities:	Amortized Cost		Fair Value
One Year or Less	$	213,937	$	213,021
After One – Five Years	12,738,020		12,739,270
After Five – Ten Years	41,482,362		41,522,064
More Than Ten Years	133,339,409		134,558,974
Mortgage-Backed Securities	170,554,894		169,818,871
Total Available For Sale	$	358,328,622	$	358,852,200

At March 31, 2018 the amortized cost and fair value of investment and mortgage-backed securities available for sale pledged as collateral for certain deposit accounts, FHLB advances and other borrowings were $117.7 million and $118 million, respectively, compared to an amortized cost and fair value of $99.2 million and $100.5 million, respectively, at December 31, 2017.

The Bank received $28.6 million and $15.3 million in gross proceeds from sales of available for sale securities during the three months ended March 31, 2018 and 2017, respectively. As a result, the Bank recognized gross gains of $503,000 and $583,000, respectively, with $67,000 and $0 gross losses recognized for the same periods.

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



	March 31, 2018
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Student Loan Pools	$	7,493,392	$	89,690	$	—	$	—	$	7,493,392	$	89,690
SBA Bonds	35,400,695		266,288		5,383,454		62,047		40,784,149		328,335
Tax Exempt Municipal Bonds	18,123,386		300,371		4,216,431		145,404		22,339,817		445,775
Taxable Municipal Bonds	1,981,330		34,364		—		—		1,981,330		34,364
Mortgage-Backed Securities	86,647,947		1,407,637		23,803,408		506,687		110,451,355		1,914,324
	$	149,646,750	$	2,098,350	$	33,403,293	$	714,138	$	183,050,043	$	2,812,488



	December 31, 2017
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Student Loan Pools	$	7,556,014	$	1,546	$	—	$	—	$	7,556,014	$	1,546
SBA Bonds	24,433,422		151,459		5,588,532		38,059		30,021,954		189,518
Tax Exempt Municipal Bonds	4,406,162		13,852		4,328,229		42,999		8,734,391		56,851
Taxable Municipal Bond	1,997,130		19,703		—		—		1,997,130		19,703
Mortgage-Backed Securities	62,574,910		624,772		23,612,359		348,800		86,187,269		973,572
	$	100,967,638	$	811,332	$	33,529,120	$	429,858	$	134,496,758	$	1,241,190

SECURITY FEDERAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

6. Investment and Mortgage-Backed Securities, Available For Sale, Continued

Securities classified as available for sale are recorded at fair market value. At March 31, 2018 and December 31, 2017, 25.4% and 34.6% of the unrealized losses, representing 31 and 30 individual securities, respectively, consisted of securities in a continuous loss position for 12 months or more. 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 is 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 the Company may recognize a portion in other comprehensive income. The fair value of investments on which OTTI is recognized then becomes the new cost basis of the investment. There was no OTTI recognized during the three months ended March 31, 2018.

7. Investment and Mortgage-Backed Securities, Held to Maturity

The amortized cost, gross unrealized gains, gross unrealized losses, and fair values of held to maturity securities at the dates indicated below were as follows:



	March 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Federal Home Loan Mortgage Corporation ("FHLMC") Bond	$	998,214	$	—	$	25,236	$	972,978
Mortgage-Backed Securities ⁽¹⁾	23,260,385		89,284		480,642		22,869,027
Total Held To Maturity	$	24,258,599	$	89,284	$	505,878	$	23,842,005

	December 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
FHLB Bonds	$	2,000,000	$	—	$	2,984	$	1,997,016
FHLMC Bond	998,102		—		12,588		985,514
Mortgage-Backed Securities ⁽¹⁾	24,082,868		120,843		131,307		24,072,404
Total Held To Maturity	$	27,080,970	$	120,843	$	146,879	$	27,054,934

^{(1) COMPRISED OF MORTGAGE-BACKED SECURITIES OF GSEs OR GNMA}

The FHLB, FHLMC and the Federal National Mortgage Association ("FNMA") are government sponsored enterprises ("GSEs") and the securities and bonds issued by GSEs are not backed by the full faith and credit of the United States government. At March 31, 2018, the Bank held an amortized cost and fair value of $15.5 million and $15.2 million, respectively, in GNMA mortgage-backed securities classified as held to maturity, which are included in the table above, compared to an amortized cost and fair value of $15.9 million and $15.9 million, respectively, at December 31, 2017. The Company has not invested in any private label mortgage-backed securities classified as held to maturity.

At March 31, 2018, the amortized cost and fair value of mortgage-backed securities held to maturity that were pledged as collateral for certain deposit accounts, FHLB advances and other borrowings were $22.4 million and $22.0 million, respectively, compared to an amortized cost and fair value of $22.3 million at December 31, 2017.

SECURITY FEDERAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

7. Investment and Mortgage-Backed Securities, Held to Maturity, Continued

The amortized cost and fair value of investment and mortgage-backed securities held to maturity at March 31, 2018 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. Since mortgage-backed securities are not due at a single maturity date, they are disclosed separately, rather than allocated over the maturity groupings set forth in the table below.



	March 31, 2018
Investment Securities:	Amortized Cost		Fair Value
One – Five Years	$	998,214	$	972,978
Mortgage-Backed Securities	23,260,385		22,869,027
Total Held to Maturity	$	24,258,599	$	23,842,005

The following tables show gross unrealized losses, fair value, and length of time that individual held to maturity securities have been in a continuous unrealized loss position at the dates indicated below.



	March 31, 2018
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
FHLMC Bond	$	972,978	$	25,236	$	—	$	—	$	972,978	$	25,236
Mortgage-Backed Securities ⁽¹⁾	18,471,355		422,586		1,245,298		58,056		19,716,653		480,642
	$	19,444,333	$	447,822	$	1,245,298	$	58,056	$	20,689,631	$	505,878

^{(1) COMPRISED OF MORTGAGE-BACKED SECURITIES OF GSEs OR GNMA}



	December 31, 2017
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
FHLB Bond	$	1,997,016	$	2,984	$	—	$	—	$	1,997,016	$	2,984
FHLMC Bond	985,514		12,588		—		—		985,514		12,588
Mortgage-Backed Securities ⁽¹⁾	17,645,676		103,387		1,284,971		27,920		18,930,647		131,307
	$	20,628,206	$	118,959	$	1,284,971	$	27,920	$	21,913,177	$	146,879

^{(1) COMPRISED OF MORTGAGE-BACKED SECURITIES OF GSEs OR GNMA}

The Company’s held to maturity portfolio is recorded at amortized cost. The Company has the ability and intent to hold these securities to maturity.

SECURITY FEDERAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

8. Loans Receivable, Net

Loans receivable, net, consisted of the following as of the dates indicated below:



	March 31, 2018		December 31, 2017
Residential Real Estate Loans	$	83,589,911	$	81,255,167
Consumer Loans	56,987,930		56,761,695
Commercial Business Loans	27,418,240		26,777,893
Commercial Real Estate Loans	260,934,120		237,814,628
Total Loans Held For Investment	428,930,201		402,609,383
Loans Held For Sale	2,407,478		3,051,950
Total Loans Receivable, Gross	$	431,337,679	$	405,661,333
Less:
Allowance For Loan Losses	8,204,016		8,221,618
Loans In Process	6,485,095		6,804,533
Deferred Loan Fees	183,307		141,985
	14,872,418		15,168,136
Total Loans Receivable, Net	$	416,465,261	$	390,493,197

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 to have the least amount of risk in terms of determining the allowance for loan losses. Loans that are graded as substandard are considered to have the most risk. 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 90 days or more past due are automatically classified in this category. The caution and special mention categories fall in between the pass and substandard grades and consist of loans that do not currently expose the Company to sufficient risk to warrant adverse classification but possess weaknesses.

The tables below summarize the balance within each risk category by loan type, excluding loans held for sale, at March 31, 2018 and December 31, 2017.



March 31, 2018	Pass		Caution		Special Mention		Substandard		Total Loans
Residential Real Estate	$	76,150,747	$	2,371,703	$	1,373,452	$	3,694,009	$	83,589,911
Consumer	52,494,595		2,017,966		333,232		2,142,137		56,987,930
Commercial Business	23,898,935		2,159,204		741,347		618,754		27,418,240
Commercial Real Estate	175,923,588		52,257,154		26,210,285		6,543,093		260,934,120
Total	$	328,467,865	$	58,806,027	$	28,658,316	$	12,997,993	$	428,930,201



December 31, 2017	Pass		Caution		Special Mention		Substandard		Total Loans
Residential Real Estate	$	73,225,237	$	2,352,536	$	1,384,222	$	4,293,172	$	81,255,167
Consumer	52,249,017		1,862,340		344,361		2,305,977		56,761,695
Commercial Business	23,396,550		2,066,749		767,048		547,546		26,777,893
Commercial Real Estate	158,232,465		53,798,061		21,269,279		4,514,823		237,814,628
Total	$	307,103,269	$	60,079,686	$	23,764,910	$	11,661,518	$	402,609,383

SECURITY FEDERAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

8. Loans Receivable, Net, Continued

The following tables present an age analysis of past due balances, including loans on non-accrual status, by category at March 31, 2018 and December 31, 2017:



	March 31, 2018
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans Receivable
Residential Real Estate	$	779,645	$	—	$	982,293	$	1,761,938	$	81,827,973	$	83,589,911
Consumer	976,440		56,511		127,939		1,160,890		55,827,040		56,987,930
Commercial Business	287,093		110,527		5,000		402,620		27,015,620		27,418,240
Commercial Real Estate	2,718,387		2,225,386		2,030,087		6,973,860		253,960,260		260,934,120
Total	$	4,761,565	$	2,392,424	$	3,145,319	$	10,299,308	$	418,630,893	$	428,930,201



	December 31, 2017
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans Receivable
Residential Real Estate	$	395,763	$	—	$	948,875	$	1,344,638	$	79,910,529	$	81,255,167
Consumer	604,809		85,178		182,757		872,744		55,888,951		56,761,695
Commercial Business	185,526		102,244		—		287,770		26,490,123		26,777,893
Commercial Real Estate	2,207,655		364,515		1,919,292		4,491,462		233,323,166		237,814,628
Total	$	3,393,753	$	551,937	$	3,050,924	$	6,996,614	$	395,612,769	$	402,609,383

At March 31, 2018 and December 31, 2017, 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 March 31, 2018 compared to December 31, 2017:



	March 31, 2018				December 31, 2017				$			%
	Amount		Percent ⁽¹⁾		Amount		Percent ⁽¹⁾		Increase (Decrease)			Increase (Decrease)
Non-accrual Loans:
Residential Real Estate	$	2,019,106	0.5	%	$	1,948,524	0.5	%	$	70,582		3.6%
Consumer	322,268		0.1		318,926		0.1		$	3,342		1.0
Commercial Business	95,001		—		109,401		—		(14,400		)	(13.2)
Commercial Real Estate	4,144,839		1.0		3,340,904		0.8		803,935			24.1
Total Non-accrual Loans	$	6,581,214	1.6	%	$	5,717,755	1.5	%	$	863,459		15.1%

^{(1) PERCENT OF TOTAL LOANS HELD FOR INVESTMENT, NET OF DEFERRED FEES AND LOANS IN PROCESS.}

SECURITY FEDERAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

8. Loans Receivable, Net, Continued

The following tables show the activity in the allowance for loan losses by category for the three months ended March 31, 2018 and 2017:



	Three Months Ended March 31, 2018
	Residential Real Estate			Consumer			Commercial Business			Commercial Real Estate			Total
Beginning Balance	$	1,233,843		$	1,144,815		$	1,011,227		$	4,831,733		$	8,221,618
Provision for Loan Losses	(15,445		)	(112,933		)	138,940			(10,562		)	—
Charge-Offs	(11,351		)	(17,252		)	(21,487		)	—			(50,090		)
Recoveries	207			27,520			—			4,761			32,488
Ending Balance	$	1,207,254		$	1,042,150		$	1,128,680		$	4,825,932		$	8,204,016



	Three Months Ended March 31, 2017
	Residential Real Estate			Consumer			Commercial Business			Commercial Real Estate			Total
Beginning Balance	$	1,360,346		$	996,620		$	882,999		$	5,116,266		$	8,356,231
Provision for Loan Losses	110,338			100,554			87,379			(298,271		)	—
Charge-Offs	(6,517		)	(23,611		)	(5,890		)	—			(36,018		)
Recoveries	750			27,141			—			29,795			57,686
Ending Balance	$	1,464,917		$	1,100,704		$	964,488		$	4,847,790		$	8,377,899

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



	Allowance For Loan Losses
March 31, 2018	Individually Evaluated For Impairment		Collectively Evaluated For Impairment		Total
Residential Real Estate	$	—	$	1,207,254	$	1,207,254
Consumer	—		1,042,150		1,042,150
Commercial Business	—		1,128,680		1,128,680
Commercial Real Estate	102,756		4,723,176		4,825,932
Total	$	102,756	$	8,101,260	$	8,204,016



	Allowance For Loan Losses
December 31, 2017	Individually Evaluated For Impairment		Collectively Evaluated For Impairment		Total
Residential Real Estate	$	—	$	1,233,843	$	1,233,843
Consumer	—		1,144,815		1,144,815
Commercial Business	—		1,011,227		1,011,227
Commercial Real Estate	—		4,831,733		4,831,733
Total	$	—	$	8,221,618	$	8,221,618

SECURITY FEDERAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

8. Loans Receivable, Net, Continued

The following tables present information related to impaired loans evaluated individually and collectively for impairment in loans receivable at the dates indicated:



	Loans Receivable
March 31, 2018	Individually Evaluated For Impairment		Collectively Evaluated For Impairment		Total
Residential Real Estate	$	1,685,496	$	81,904,415	$	83,589,911
Consumer	178,778		56,809,152		56,987,930
Commercial Business	90,001		27,328,239		27,418,240
Commercial Real Estate	6,836,118		254,098,002		260,934,120
Total	$	8,790,393	$	420,139,808	$	428,930,201



	Loans Receivable
December 31, 2017	Individually Evaluated For Impairment		Collectively Evaluated For Impairment		Total
Residential Real Estate	$	1,883,741	$	79,371,426	$	81,255,167
Consumer	181,617		56,580,078		56,761,695
Commercial Business	100,401		26,677,492		26,777,893
Commercial Real Estate	6,276,547		231,538,081		237,814,628
Total	$	8,442,306	$	394,167,077	$	402,609,383

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 the 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 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. The average balance of impaired loans was $8.9 million for the three months ended March 31, 2018 compared to $8.8 million for the three months ended March 31, 2017.

SECURITY FEDERAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

8. Loans Receivable, Net, Continued

The following tables present information related to impaired loans by loan category at March 31, 2018 and December 31, 2017 and for the three months ended March 31, 2018 and 2017.



	March 31, 2018						December 31, 2017
Impaired Loans	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With No Related Allowance Recorded:
Residential Real Estate	$	1,685,497	$	2,212,677	$	—	$	1,883,741	$	2,333,741	$	—
Consumer	178,778		246,588		—		181,617		209,427		—
Commercial Business	90,001		985,001		—		100,401		950,401		—
Commercial Real Estate	6,582,213		7,973,300		—		6,276,547		7,583,847		—
With an Allowance Recorded:
Commercial Real Estate	253,905		253,905		102,756		—		—		—
Total
Residential Real Estate	1,685,497		2,212,677		—		1,883,741		2,333,741		—
Consumer	178,778		246,588		—		181,617		209,427		—
Commercial Business	90,001		985,001		—		100,401		950,401		—
Commercial Real Estate	6,836,118		8,227,205		102,756		6,276,547		7,583,847		—
Total	$	8,790,394	$	11,671,471	$	102,756	$	8,442,306	$	11,077,416	$	—



	Three Months Ended March 31,
	2018				2017
Impaired Loans	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With No Related Allowance Recorded:
Residential Real Estate	$	1,757,575	$	—	$	2,243,655	$	—
Consumer	180,610		—		108,424		—
Commercial Business	96,401		—		145,401		—
Commercial Real Estate	6,625,186		37,207		5,817,309		38,632
With an Allowance Recorded:
Consumer	—		—		60,027		—
Commercial Real Estate	253,905		340		398,329		6,514
Total
Residential Real Estate	1,757,575		—		2,243,655		—
Consumer	180,610		—		168,451		—
Commercial Business	96,401		—		145,401

OUTSTANDING SHARES AT:

Common Stock, par value $0.01 per share

May 14, 2018