As filed with the Securities and Exchange Commission on January 3, 2003

                                     REGISTRATION STATEMENT NO. 333-_____


                     SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549

                                  FORM S-8

                           REGISTRATION STATEMENT
                      UNDER THE SECURITIES ACT OF 1933


                        SECURITY FEDERAL CORPORATION
--------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)


           South Carolina                                         57-08580504
--------------------------------------------------------------------------------
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                             Identification No.)

                          1705 Whiskey Road South
                        Aiken, South Carolina  29803
                               (803) 641-3000
--------------------------------------------------------------------------------
                  (Address of principal executive offices)

            Security Federal Corporation 2002 Stock Option Plan
--------------------------------------------------------------------------------
                          (Full title of the Plan)

Timothy W. Simmons                                  John F. Breyer, Jr., Esquire
President and Chief Executive Officer                    Breyer & Associates PC
Security Federal Corporation                              8180 Greensboro Drive
1705 Whiskey Road South                                               Suite 785
Aiken, South Carolina  29803                                  McLean, VA  22102
(803) 641-3000                                                   (703) 883-1100
--------------------------------------------------------------------------------
              (Name, address and telephone number of agent for service)

                        Calculation of Registration Fee
--------------------------------------------------------------------------------
Title of
Securities      Amount      Proposed Maximum    Proposed Maximum      Amount of
to be           to be        Offering Price        Aggregate       Registration
Registered    Registered(1)    Per Share         Offering Price          Fee
--------------------------------------------------------------------------------
Common Stock,
$0.01 par value   20,000         $32.00(2)           $640,000           $59.00

--------------------------------------------------------------------------------
(1)  Pursuant to Rule 416 under the Securities Act of 1933, as amended, this
     Registration Statement covers, in addition to the  number of shares set
     forth above, an indeterminate number of shares which, by reason of certain
     events specified in the Plan, may become subject to the Plan.

(2)  Estimated in accordance with Rule 457(h), calculated on the basis of
     $32.00 per share, which was last trading price of Security Federal
     Corporation's common stock.

                                -----------------------

<PAGE>



                                    PART I

              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

     The document(s) containing the information specified in Part I of Form S-8
will be sent or given to participants in the Security Federal Corporation 2002
Stock Option Plan as specified by Rule 428(b)(1) promulgated by the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act").

     Such document(s) are not being filed with the Commission, but constitute
(along with the documents incorporated by reference into the Registration
Statement pursuant to Item 3 of Part II hereof) a prospectus that meets the
requirements of Section 10(a) of the Securities Act.

                                        -2-

<PAGE>



                                  PART II

            INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference
-------

     The following documents previously or concurrently filed by Security
Federal Corporation (the "Registrant") with the Commission are hereby
incorporated by reference in this Registration Statement and the prospectus to
which this Registration Statement relates (the "Prospectus"):

     (a)  The Registrant's Annual Report on Form 10-K for the fiscal year ended
          March 31, 2002 (File No. 0-16120) filed pursuant to the Securities
          Exchange Act of 1934, as amended (the "Exchange Act");

     (b)  all other reports filed pursuant to Section 13(a) or 15(d) of the
          Exchange Act since the end of the fiscal year covered by the Annual
          Report on Form 10-K referred to in Item 3(a) above; and

     (c)  the description of the Registrant's common stock, par value $0.01 per
          share, set forth in the Registrant's Registration Statement on Form
          8-A, registering the Registrant's common stock, pursuant to Section
          12(g) of the Exchange Act, filed on August 12, 1987 and all
          amendments thereto or reports filed for the purpose of updating such
          description.

     All documents subsequently filed by the Registrant with the Commission
pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed incorporated by reference into this Registration
Statement and the Prospectus to be a part hereof and thereof from the date of
the filing of such documents.  Any statement contained in the documents
incorporated, or deemed to be incorporated, by reference herein or therein shall
be deemed to be modified or superseded for purposes of this Registration
Statement and the Prospectus to the extent that a statement contained herein or
therein or in any other subsequently filed document which also is, or is deemed
to be, incorporated by reference herein or therein modifies or supersedes such
statement.  Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement and the Prospectus.

     The Registrant shall furnish without charge to each person to whom the
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the documents incorporated by reference, other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference
to the information that is incorporated).  Requests should be directed to
Secretary of the Corporation, Security Federal Corporation, 1705 Whiskey Road
South, Aiken, South Carolina 29803, telephone number (803) 641-3000.

     All information appearing in this Registration Statement and the Prospectus
is qualified in its entirety by the detailed information, including financial
statements, appearing in the documents incorporated herein or therein by
reference.

Item 4.  Description of Securities
-------

     Not Applicable

Item 5.  Interests of Named Experts and Counsel
-------

     Not Applicable

                                        -3-

<PAGE>

Item 6. Indemnification of Directors and Officers
-------

     Article XIV of the Registrant's Articles of Incorporation requires
indemnification of directors, officers, employees, trustees and agents of the
Registrant for expenses actually and reasonably incurred in connection with the
defense or settlement of any threatened, pending or completed action, suit or
proceeding.

     Chapter 8, Article 5 of the South Carolina Business Corporation Act
provides for permissible, mandatory and court-ordered indemnification of
directors, officers, employees and agents in certain circumstances.  Sections
33-8-510, 33-8-520 and 33-8-560 provide as follows:

     33-8-510  AUTHORITY TO INDEMNIFY.   (a) Except as provided in subsection
(d), a corporation may indemnify an individual made a party to a proceeding
because he is or was a director against liability incurred in the proceeding if:

     (1)  he conducted himself in good faith; and
     (2)  he reasonably believed;
     (i)  in the case of conduct in his official capacity with the corporation,
that his conduct was in the best interest; and
     (ii) in all other cases, that his conduct was at least not opposed to its
best interest; and
     (3)  in the case of any criminal proceeding, he had no reasonable cause to
believe his conduct was unlawful.
     (b)  A director's conduct with respect to an employee benefit plan for a
purpose he reasonably believed to be in the interests of the participants in and
beneficiaries of the plan is conduct that satisfies the requirement of
subsection (a)(2)(ii).
     (c)  The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that the director did not meet the standard of conduct
described in this section.
     (d)  A corporation may not indemnify a director under this section:
     (1)  in connection with a proceeding by or in the right of the corporation
in which the director was adjudged liable to the corporation; or
     (2)  in connection with any other proceeding charging improper personal
benefit to him, whether or not involving action in his official capacity, in
which he was adjudged liable on the basis that personal benefit was improperly
received by him.
     (e) Indemnification permitted under this section in connection with a
proceeding by or in the right of the corporation is limited to reasonable
expenses incurred in connection with the proceeding.

     33-8-520  MANDATORY INDEMNIFICATION.   Unless limited by its articles of
incorporation, a corporation shall indemnify a director who was wholly
successful, on the merits or otherwise, in the defense of any proceeding to
which he was a party because he is or was a director of the corporation against
reasonable expenses incurred by him in connection with the proceeding.

     33-8-560  INDEMNIFICATION OF OFFICERS, EMPLOYEES, AND AGENTS.   Unless a
corporation's articles of incorporation provide otherwise:
     (1) an officer of the corporation who is not a director is entitled to
mandatory indemnification under  Section 33-8-520, and is entitled to apply for
court-ordered indemnification under Section 33-8-540, in each case to the same
extent as a director;
     (2) the corporation may indemnify and advance expenses under this
subchapter to an officer, employee, or agent of the corporation who is not a
director to the same extent as to a director; and
     (3) a corporation also may indemnify and advance expenses to an officer,
employee, or agent who is not a director to the extent, consistent with public
policy, that may be provided by its articles of incorporation, bylaws, general
or specific action of its board of directors, or contract.

     Section 33-8-570 also authorizes a corporation to purchase and maintain
insurance for directors, officers, employees and agents against liability
arising from their positions, whether or not the corporation would have the
power

                                        -4-

<PAGE>



to indemnify against the same liability under Section 33-8-510 or Section
33-8-520.  The Registrant maintains directors' and officers' liability insurance
for the benefit of its directors and officers.

Item 7. Exemption From Registration Claimed
-------

     Not Applicable

Item 8. Exhibits
-------

     The following exhibits are filed with or incorporated by reference into
this Registration Statement on Form S-8:

                                                       Reference to Prior Filing
 Regulation S-K                                          or Exhibit Number as
 Exhibit Number         Description of Exhibits             Attached Hereto
 --------------   -----------------------------------  -------------------------

      4.1         Articles of Incorporation of Security                *
                  Federal Corporation, as amended

      4.2         Bylaws of Security Federal Corporation               **

      4.3         Form of Certificate of Common Stock for
                  Security Federal Corporation                         ***

      5           Opinion of Breyer & Associates PC                    5

      23.1        Consent of Elliott Davis, LLC                        23.1

      23.2        Consent of Breyer & Associates PC      Contained in Exhibit 5

      24          Power of attorney                      Contained on Signature
                                                                    Page

      99          Security Federal Corporation 2002                    99
                  Stock Option Plan
------------------
*    Filed as an exhibit to the Registrant's 1998 Proxy Statement on June 26,
     1998 and incorporated herein by reference.

**   Filed as an exhibit to the Registrant's Registration Statement on Form S-8
     on March 2, 2000 and incorporated herein by reference.

***  Filed as an exhibit to the Registrant's Registration Statement on Form 8-A
     on August 12, 1987 and incorporated herein by reference.

Item 9. Undertakings
-------
     (a)  The undersigned Registrant hereby undertakes:

          1.  To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement: (i) to include
any prospectus required by Section 10(a)(3) of the Securities Act, (ii) to
reflect in the prospectus any facts or events arising after the effective date
of the Registration Statement (or most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement, and (iii) to include any
material information with respect to

                                      -5-
<PAGE>



the plan of distribution not previously disclosed in the Registration Statement
or any material change in such information in the Registration Statement,
provided, however, that clauses (i) and (ii) do not apply if the information
required to be included in a post-effective amendment by those clauses is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in the
Registration Statement.

          2.  That, for the purposes of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed the initial bona fide
offering thereof.

          3.  To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.

     (b)  The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

     (c)  Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officer and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.  In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

                                       -6-

<PAGE>



                                 SIGNATURES


     Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Aiken, State of South Carolina, on the 31st day of
December, 2002.

                                     SECURITY FEDERAL CORPORATION



                                     By: /s/Timothy W. Simmons
                                        ----------------------------------
                                        Timothy W. Simmons
                                        President, Chief Executive Officer and
                                        Director
                                        (Duly Authorized Representative)


                             POWER OF ATTORNEY

     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.  Each person whose signature appears
below hereby makes, constitutes and appoints Timothy W. Simmons his true and
lawful attorney, with full power to sign for such person and in such person's
name and capacity indicated below, and with full power of substitution any and
all amendments to this Registration Statement, hereby ratifying and confirming
such person's signature as it may be signed by said attorney to any and all
amendments.


By:/s/Timothy W. Simmons                                   December 31, 2002
   --------------------------------------------
   Timothy W. Simmons
   President, Chief Executive Officer and
   Director
   (Principal Executive Officer)

By:/s/Roy G. Lindburg                                      December 31, 2002
   --------------------------------------------
   Roy G. Lindburg
   Treasurer and Chief Financial Officer
   (Principal Financial and Accounting Officer)

By:/s/T. Clifton Weeks                                     December 31, 2002
   --------------------------------------------
   T. Clifton Weeks
   Chairman of the Board and Director

By:/s/Gasper L. Toole III                                  December 31, 2002
   --------------------------------------------
   Gasper L. Toole III
   Director

By:/s/Harry O. Weeks Jr.                                   December 31, 2002
   --------------------------------------------
   Harry O. Weeks Jr.
   Director

By:/s/Robert E. Alexander                                  December 31, 2002
   --------------------------------------------
   Robert E. Alexander
   Director

<PAGE>



By:/s/Thomas L. Moore                                      December 31, 2002
   --------------------------------------------
   Thomas L. Moore
   Director

By:/s/William Clyburn                                      December 31, 2002
   --------------------------------------------
   William Clyburn
   Director

By:/s/Thomas C. Clark                                    December 31, 2002
   --------------------------------------------
   Thomas C. Clark
   Director

By:/s/J. Chris Verenes                                     December 31, 2002
   --------------------------------------------
   J. Chris Verenes
   Director

<PAGE>



                        SECURITY FEDERAL CORPORATION

                               EXHIBIT INDEX


                                                       Reference to Prior Filing
 Regulation S-K                                          or Exhibit Number as
 Exhibit Number         Description of Exhibits             Attached Hereto
 --------------   ------------------------------------  ----------------------

      4.1         Articles of Incorporation of Security                *
                  Federal Corporation, as amended

      4.2         Bylaws of Security Federal Corporation               **

      4.3         Form of Certificate of Common Stock for
                  Security Federal Corporation                         ***

      5           Opinion of Breyer & Associates PC                    5

      23.1        Consent of Elliott Davis, LLC                        23.1

      23.2        Consent of Breyer & Associates PC      Contained in Exhibit 5

      24          Power of attorney                      Contained on Signature
                                                                    Page

      99          Security Federal Corporation 2002                    99
                  Stock Option Plan
------------------
*    Filed as an exhibit to the Registrant's 1998 Proxy Statement on June 26,
     1998 and incorporated herein by reference.

**   Filed as an exhibit to the Registrant's Registration Statement on Form S-8
     on March 2, 2000 and incorporated herein by reference.

***  Filed as an exhibit to the Registrant's Registration Statement on Form 8-A
     on August 12, 1987 and incorporated herein by reference.

<PAGE>








                                 Exhibit 5

                     Opinion of Breyer & Associates PC

<PAGE>





                        [Letterhead of Breyer & Associates PC]

                                  January 3, 2003



Board of Directors
Security Federal Corporation
1705 Whiskey Road South
Aiken, South Carolina  29803

Gentlemen:

     We have acted as special counsel to Security Federal Corporation, a South
Carolina corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form S-8 filed with the Securities and Exchange
Commission ("Registration Statement") under the Securities Act of 1933, as
amended, relating to shares of common stock, par value $0.01 per share (the
"Common Stock") of the Company which may be issued pursuant to the terms of the
Security Federal Corporation 2002 Stock Option Plan (the "Plan"), all as more
fully described in the Registration Statement.  You have requested the opinion
of this firm with respect to certain legal aspects of the proposed offering.

     We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion and based thereon, we are of the
opinion that the Common Stock when issued pursuant to and in accordance with the
terms of the Plan will be duly and validly issued, fully paid, and
nonassessable.

     We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8.

                                        Sincerely,

                                        /s/BREYER & ASSOCIATES PC
                                        BREYER & ASSOCIATES PC

<PAGE>









                               Exhibit 23.1

                       Consent of Elliott Davis, LLC

<PAGE>







                         Consent of Independent Auditors


The Board of Directors
Security Federal Corporation
Aiken, South Carolina

We consent to incorporation by reference in the Registration Statement on Form
S-8 of Security Federal Corporation, relating to their 2002 Stock Option Plan,
of our report dated May 2, 2002, relating to the consolidated balance sheet of
Security Federal Corporation and subsidiaries as of March 31, 2002, and the
related consolidated statements of income, shareholders' equity and cash flows
for the year then ended, which report appears in the March 31, 2002 Annual
Report to Stockholders of Security Federal Corporation, which is incorporated by
reference in Security Federal Corporation's Annual Report on Form 10-K for the
year ended March 31, 2002.

/s/ELLIOTT DAVIS, LLC

ELLIOTT DAVIS, LLC

Greenville, South Carolina
January 2, 2003

<PAGE>








                                 Exhibit 99

             Security Federal Corporation 2002 Stock Option Plan

<PAGE>



                        SECURITY FEDERAL CORPORATION

                           2002 STOCK OPTION PLAN

     1.   Plan Purpose.  The purpose of the Plan is to foster and promote the
long-term success of the Corporation and its stockholders by providing a means
for attracting and retaining directors, emeritus directors and employees of the
Corporation and its Affiliates with an equity interest in the Corporation.  The
Plan will assist the Corporation in attracting and retaining the highest quality
of experienced persons as directors, officers and employees and in aligning the
interests of such persons more closely with the interest of the Corporation's
stockholders by encouraging such parties to maintain an equity interest in the
Corporation.

     2.   Definitions.  The following definitions are applicable to the Plan:

     "Affiliate" -- means any "parent corporation" or "subsidiary corporation"
of the Corporation, as such terms are defined in Section 424(e) and (f),
respectively, of the Code.

     "Award" -- means the grant by the Committee of an Incentive Stock Option, a
Non-Qualified Stock Option, a Right, or any combination thereof, as provided in
the Plan.

     "Award Agreement" -- means the agreement evidencing the grant of an Award
made under the Plan.

     "Board" -- means the board of directors of the Corporation.

     "Cause" -- means Termination of Service by reason of personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties or gross negligence.

     "Code" -- means the Internal Revenue Code of 1986, as amended.

     "Committee" -- means the Committee referred to in Section 3 hereof.

     "Corporation" -- means Security Federal Corporation, a South Carolina
corporation, and any successor thereto.

     "Disability" --means any physical or mental injury or disease of a
permanent nature which renders a Participant incapable of meeting the
requirements of the employment or service performed by such Participant
immediately prior to the commencement of such disability.  The determination of
whether a Participant is disabled shall be made by the Board in its sole and
absolute discretion.

     "Incentive Stock Option" -- means an option to purchase Shares granted by
the Committee which is intended to qualify as an incentive stock option under
Section 422(b) of the Code.  Unless otherwise set forth in the Award Agreement,
any Option which does not qualify as an Incentive Stock Option for any reason
shall be deemed ab initio to be a Non-Qualified Stock Option.

     "Market Value" -- means the average of the high and low quoted sales price
on the date in question (or, if there is no reported sale on such date, on the
last preceding date on which any reported sale occurred) of a Share on the
Composite Tape for New York Stock Exchange-Listed Stocks, or, if on such date
the Shares are not quoted on the Composite Tape, on the New York Stock Exchange,
or if the Shares are not listed or admitted to trading on such Exchange, on the
principal United States securities exchange registered under the Securities
Exchange Act of 1934 on which the Shares are listed or admitted to trading, or,
if the Shares are not listed or admitted to trading on any such exchange, the
mean between the closing high bid and low asked quotations with respect to a
Share on such date on the Nasdaq Stock Market, or any similar system then in
use, or, if no such quotations are available, the fair

<PAGE>


market value on such date of a Share as the Committee shall determine based on
the weighted average of the past six trades of the Shares.

     "Non-Qualified Stock Option" -- means an option to purchase Shares granted
by the Committee which does not qualify, for any reason, as an Incentive Stock
Option.

     "Option" -- means an Incentive Stock Option or a Non-Qualified Stock
Option.

     "Participant" -- means any director, emeritus director or employee of the
Corporation or any Affiliate who is selected by the Committee to receive an
Award.

     "Plan" -- means this Security Federal Corporation 2002 Stock Option Plan.

     "Related" -- means (i) in the case of a Right, a Right which is granted in
connection with, and to the extent exercisable, in whole or in part, in lieu of,
an Option or another Right and (ii) in the case of an Option, an Option with
respect to which and to the extent a Right is exercisable, in whole or in part,
in lieu thereof.

     "Right" -- means a stock appreciation right with respect to Shares granted
by the Committee pursuant to the Plan.

     "Shares" -- means the shares of common stock of the Corporation.

     "Termination of Service" -- means cessation of service, for any reason,
whether voluntary or involuntary, so that the affected individual is not either
(i) an employee of the Corporation or any Affiliate for purposes of an Incentive
Stock Option, or (ii) a director, emeritus director or employee of the
Corporation or any Affiliate for purposes of any other Award.

     3.   Administration.  The Plan shall be administered by a Committee
consisting of two or more members of the Board, each of whom (i) shall be an
"outside director," as defined under Section 162(m) of the Code and the Treasury
regulations thereunder, and (ii) shall be a "non-employee director," as defined
under Rule 16(b) of the Securities Exchange Act of 1934 or any similar or
successor provision.  The members of the Committee shall be appointed by the
Board.  Except as limited by the express provisions of the Plan or by
resolutions adopted by the Board, the Committee shall have sole and complete
authority and discretion to (i) select Participants and grant Awards; (ii)
determine the number of Shares to be subject to types of Awards generally, as
well as to individual Awards granted under the Plan; (iii) determine the terms
and conditions upon which Awards shall be granted under the Plan; (iv) prescribe
the form and terms of Award Agreements; (v) establish from time to time
regulations for the administration of the Plan; and (vi) interpret the Plan and
make all determinations deemed necessary or advisable for the administration of
the Plan.

     A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the Committee without a meeting, shall
be acts of the Committee.

     4.   Shares Subject to Plan.

          (a)  Subject to adjustment by the operation of Section 6, the maximum
number of Shares with respect to which Awards may be made under the Plan is
20,000 plus (i) the number of Shares repurchased by the Corporation in the open
market or otherwise with an aggregate price no greater than the cash proceeds
received by the Corporation from the exercise of Options granted under the Plan;
plus (ii) any Shares surrendered to the Corporation in payment of the exercise
price of Options granted under the Plan.  The Shares with respect to which
Awards may be made under the Plan may be either authorized and unissued Shares
or previously issued Shares reacquired and held as treasury Shares.  Shares
which are subject to Related Rights and Related Options shall be
                                      2
<PAGE>

counted only once in determining whether the maximum number of Shares with
respect to which Awards may be granted under the Plan has been exceeded.  An
Award shall not be considered to have been made under the Plan with respect to
any Option or Right which terminates, and new Awards may be granted under the
Plan with respect to the number of Shares as to which such termination has
occurred.

          (b)  During any calendar year, no Participant may be granted Awards
under the Plan with respect to more than 5,000 Shares, subject to adjustment as
provided in Section 6.

     5.   Awards.

          (a)  Options.  The Committee is hereby authorized to grant Options to
Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan and the
requirements of applicable law as the Committee shall determine, including the
granting of Options in tandem with other Awards under the Plan:

               (i)  Exercise Price.  The exercise price per Share for an Option
shall be determined by the Committee; provided, however, that such exercise
price shall not be less than 100% of the Market Value of a Share on the date of
grant of such Option.

               (ii)  Option Term.  The term of each Option shall be fixed by the
Committee, but shall be no greater than 10 years in the case of an Incentive
Stock Option or 15 years in the case of a Non-Qualified Stock Option.

               (iii)  Time and Method of Exercise.  The Committee shall
determine the time or times at which an Option may be exercised in whole or in
part and the method or methods by which, and the form or forms (including,
without limitation, cash, Shares, other Awards or any combination thereof,
having a fair market value on the exercise date equal to the relevant exercise
price) in which, payment of the exercise price with respect thereto may be made
or deemed to have been made.

               (iv)  Incentive Stock Options.  Incentive Stock Options may be
granted by the Committee only to employees of the Corporation or its Affiliates.

               (v)  Termination of Service.  Unless otherwise determined by the
Committee and set forth in the Award Agreement evidencing the grant of the
Option, upon Termination of Service of the Participant for any reason other than
for Cause, all Options then currently exercisable shall remain exercisable until
the expiration of the Option by its terms.  Upon Termination of Service for
Cause, all Options not previously exercised shall immediately be forfeited.

          (b)  Rights.  A Right shall, upon its exercise, entitle the
Participant to whom such Right was granted to receive a number of Shares or cash
or combination thereof, as the Committee in its discretion shall determine, the
aggregate value of which (i.e., the sum of the amount of cash and/or Market
Value of such Shares on date of exercise) shall equal (as nearly as possible, it
being understood that the Corporation shall not issue any fractional Shares) the
amount by which the Market Value per Share on the date of such exercise shall
exceed the exercise price of such Right, multiplied by the number of Shares with
respect to which such Right shall have been exercised.  A Right may be Related
to an Option or may be granted independently of any Option as the Committee
shall from time to time in each case determine.  In the case of a Related
Option, such Related Option shall cease to be exercisable to the extent of the
Shares with respect to which the Related Right was exercised.  Upon the exercise
or termination of a Related Option, any Related Right shall terminate to the
extent of the Shares with respect to which the Related Option was exercised or
terminated.

     6.   Adjustments Upon Changes in Capitalization.  In the event of any
change in the outstanding Shares subsequent to the effective date of the Plan by
reason of any reorganization, recapitalization, stock split,

                                        3

<PAGE>

stock dividend, capital distribution, combination or exchange of shares, merger,
consolidation or any change in the corporate structure or Shares of the
Corporation, the maximum aggregate number and class of shares and exercise price
of the Award, if any, as to which Awards may be granted under the Plan and the
number and class of shares and exercise price of the Award, if any, with respect
to which Awards have been granted under the Plan shall be appropriately adjusted
by the Committee, whose determination shall be conclusive.  Except as otherwise
provided herein, any Award which is adjusted as a result of this Section 6 shall
be subject to the same terms and conditions as the original Award.

     7.   Effect of Merger on Options or Rights.  In the case of any merger,
consolidation or combination of the Corporation (other than a merger,
consolidation or combination in which the Corporation is the continuing
corporation and which does not result in the outstanding Shares being converted
into or exchanged for different securities, cash or other property, or any
combination thereof), any Participant to whom an Option or Right has been
granted shall have the additional right (subject to the provisions of the Plan
and any limitation applicable to such Option or Right), thereafter and during
the term of each such Option or Right, to receive upon exercise of any such
Option or Right an amount equal to the excess of the fair market value on the
date of such exercise of the securities, cash or other property, or combination
thereof, receivable upon such merger, consolidation or combination in respect of
a Share over the exercise price of such Right or Option, multiplied by the
number of Shares with respect to which such Option or Right shall have been
exercised.  Such amount may be payable fully in cash, fully in one or more of
the kind or kinds of property payable in such merger, consolidation or
combination, or partly in cash and partly in one or more of such kind or kinds
of property, all in the discretion of the Committee.

     8.   Effect of Change in Control. Each of the events specified in the
following clauses (i) through (iii) of this Section 8 shall be deemed a "change
in control": (i) any third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, shall become the beneficial
owner of shares of the Corporation with respect to which 25% or more of the
total number of votes for the election of the Board may be cast, (ii) as a
result of, or in connection with, any cash tender offer, merger or other
business combination, sale of assets or contested election, or combination of
the foregoing, the persons who were directors of the Corporation shall cease to
constitute a majority of the Board, or (iii) the stockholders of the Corporation
shall approve an agreement providing either for a transaction in which the
Corporation will cease to be an independent publicly-owned corporation or for a
sale or other disposition of all or substantially all the assets of the
Corporation. If a tender offer or exchange offer for Shares (other than such an
offer by the Corporation) is commenced, or if a change in control shall occur,
unless the Committee shall have otherwise provided in the Award Agreement, and
except as otherwise provided in an employment agreement or arrangement between
the Corporation or an Affiliate and the Participant, all Options and Rights
granted and not fully exercisable shall become exercisable in full upon the
happening of such event; provided, however, that no Option or Right which has
previously been exercised or otherwise terminated shall become exercisable.

     9.   Assignments and Transfers.  No Incentive Stock Option granted under
the Plan shall be transferable other than by will or the laws of descent and
distribution.  Any other Award shall be transferable by will, the laws of
descent and distribution, a "domestic relations order," as defined in Section
414(p)(1)(B) of the Code, or a gift to any member of the Participant's immediate
family or to a trust for the benefit of one or more of such immediate family
members.  During the lifetime of an Award recipient, an Award shall be
exercisable only by the Award recipient unless it has been transferred as
permitted hereby, in which case it shall be exercisable only by such transferee.
For the purpose of this Section 9, a Participant's "immediate family" shall mean
the Participant's spouse, children and grandchildren.

     10.  Employee Rights Under the Plan.  No person shall have a right to be
selected as a Participant nor, having been so selected, to be selected again as
a Participant, and no employee or other person shall have any claim or right to
be granted an Award under the Plan or under any other incentive or similar plan
of the Corporation or any Affiliate.  Neither the Plan nor any action taken
thereunder shall be construed as giving any employee any right to be retained in
the employ of the Corporation or any Affiliate.

                                         4

<PAGE>



     11.  Delivery and Registration of Stock.  The Corporation's obligation to
deliver Shares with respect to an Award shall, if the Committee so requests, be
conditioned upon the receipt of a representation as to the investment intention
of the Participant to whom such Shares are to be delivered, in such form as the
Committee shall determine to be necessary or advisable to comply with the
provisions of the Securities Act of 1933 or any other federal, state or local
securities legislation.  It may be provided that any representation requirement
shall become inoperative upon a registration of the Shares or other action
eliminating the necessity of such representation under such Securities Act or
other securities legislation.  The Corporation shall not be required to deliver
any Shares under the Plan prior to (i) the admission of such Shares to listing
on any stock exchange on which Shares may then be listed and (ii) the completion
of such registration or other qualification of such Shares under any state or
federal law, rule or regulation, as the Committee shall determine to be
necessary or advisable.

     12.  Withholding Tax.  The Corporation shall have the right to deduct from
all amounts paid in cash with respect to the exercise of a Right under the Plan
any taxes required by law to be withheld with respect to such cash payments.
Where a Participant or other person is entitled to receive Shares pursuant to
the exercise of an Option or Right pursuant to the Plan, the Corporation shall
have the right to require the Participant or such other person to pay the
Corporation the amount of any taxes which the Corporation is required to
withhold with respect to such Shares, or, in lieu thereof, to retain, or sell
without notice, a number of such Shares sufficient to cover the amount required
to be withheld.  All withholding decisions pursuant to this Section 12 shall be
at the sole discretion of the Committee or the Corporation.

     13.  Amendment or Termination.

          (a)  The Board may amend, alter, suspend, discontinue, or terminate
the Plan without the consent of shareholders or Participants, except that any
such action will be subject to the approval of the Corporation's shareholders
if, when and to the extent such shareholder approval is necessary or required
for purposes of any applicable federal or state law or regulation or the rules
of any stock exchange or automated quotation system on which the Shares may then
be listed or quoted, or if the Board, in its discretion, determines to seek such
shareholder approval.

          (b)  The Committee may waive any conditions of or rights of the
Corporation or modify or amend the terms of any outstanding Award.  The
Committee may not, however, amend, alter, suspend, discontinue or terminate any
outstanding Award without the consent of the Participant or holder thereof,
except as otherwise provided herein.

     14.  Effective Date and Term of Plan.  The Plan shall become effective upon
the later of its adoption by the Board or its approval by the shareholders of
the Corporation.  It shall continue in effect for a term of ten years thereafter
unless sooner terminated under Section 13 hereof.

                                  * * * * *

<PAGE>
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{"company-data": {"conformed-name": "SECURITY FEDERAL CORPORATION", "cik": "0000818677", "assigned-sic": "6035", "irs-number": "570858504", "state-of-incorporation": "SC", "fiscal-year-end": "0331"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-102337", "film-number": "03502746"}, "business-address": {"street1": "1705 WHISKEY RD SOUTH", "city": "AIKEN", "state": "SC", "zip": "29803", "phone": "8036413000"}, "mail-address": {"street1": "1705 WHISKEY RD SOUTH", "city": "AIKEN", "state": "SC", "zip": "29803"}}
As filed with the Securities and Exchange Commission on January 3, 2003

                                     REGISTRATION STATEMENT NO. 333-_____

                     SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549

                                  FORM S-8

                           REGISTRATION STATEMENT
                      UNDER THE SECURITIES ACT OF 1933

                        SECURITY FEDERAL CORPORATION
--------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)

           South Carolina                                         57-08580504
--------------------------------------------------------------------------------
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                             Identification No.)

                          1705 Whiskey Road South
                        Aiken, South Carolina  29803
                               (803) 641-3000
--------------------------------------------------------------------------------
                  (Address of principal executive offices)

            Security Federal Corporation 2002 Stock Option Plan
--------------------------------------------------------------------------------
                          (Full title of the Plan)

Timothy W. Simmons                                  John F. Breyer, Jr., Esquire
President and Chief Executive Officer                    Breyer & Associates PC
Security Federal Corporation                              8180 Greensboro Drive
1705 Whiskey Road South                                               Suite 785
Aiken, South Carolina  29803                                  McLean, VA  22102
(803) 641-3000                                                   (703) 883-1100
--------------------------------------------------------------------------------
              (Name, address and telephone number of agent for service)

                        Calculation of Registration Fee
--------------------------------------------------------------------------------
Title of
Securities      Amount      Proposed Maximum    Proposed Maximum      Amount of
to be           to be        Offering Price        Aggregate       Registration
Registered    Registered(1)    Per Share         Offering Price          Fee
--------------------------------------------------------------------------------
Common Stock,
$0.01 par value   20,000         $32.00(2)           $640,000           $59.00

--------------------------------------------------------------------------------
(1)  Pursuant to Rule 416 under the Securities Act of 1933, as amended, this
     Registration Statement covers, in addition to the  number of shares set
     forth above, an indeterminate number of shares which, by reason of certain
     events specified in the Plan, may become subject to the Plan.

(2)  Estimated in accordance with Rule 457(h), calculated on the basis of
     $32.00 per share, which was last trading price of Security Federal
     Corporation's common stock.

                                -----------------------
PART I

              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

     The document(s) containing the information specified in Part I of Form S-8
will be sent or given to participants in the Security Federal Corporation 2002
Stock Option Plan as specified by Rule 428(b)(1) promulgated by the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act").

     Such document(s) are not being filed with the Commission, but constitute
(along with the documents incorporated by reference into the Registration
Statement pursuant to Item 3 of Part II hereof) a prospectus that meets the
requirements of Section 10(a) of the Securities Act.

                                        -2-
PART II

            INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference
-------

     The following documents previously or concurrently filed by Security
Federal Corporation (the "Registrant") with the Commission are hereby
incorporated by reference in this Registration Statement and the prospectus to
which this Registration Statement relates (the "Prospectus"):

     (a)  The Registrant's Annual Report on Form 10-K for the fiscal year ended
          March 31, 2002 (File No. 0-16120) filed pursuant to the Securities
          Exchange Act of 1934, as amended (the "Exchange Act");

     (b)  all other reports filed pursuant to Section 13(a) or 15(d) of the
          Exchange Act since the end of the fiscal year covered by the Annual
          Report on Form 10-K referred to in Item 3(a) above; and

     (c)  the description of the Registrant's common stock, par value $0.01 per
          share, set forth in the Registrant's Registration Statement on Form
          8-A, registering the Registrant's common stock, pursuant to Section
          12(g) of the Exchange Act, filed on August 12, 1987 and all
          amendments thereto or reports filed for the purpose of updating such
          description.

     All documents subsequently filed by the Registrant with the Commission
pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed incorporated by reference into this Registration
Statement and the Prospectus to be a part hereof and thereof from the date of
the filing of such documents.  Any statement contained in the documents
incorporated, or deemed to be incorporated, by reference herein or therein shall
be deemed to be modified or superseded for purposes of this Registration
Statement and the Prospectus to the extent that a statement contained herein or
therein or in any other subsequently filed document which also is, or is deemed
to be, incorporated by reference herein or therein modifies or supersedes such
statement.  Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement and the Prospectus.

     The Registrant shall furnish without charge to each person to whom the
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the documents incorporated by reference, other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference
to the information that is incorporated).  Requests should be directed to
Secretary of the Corporation, Security Federal Corporation, 1705 Whiskey Road
South, Aiken, South Carolina 29803, telephone number (803) 641-3000.

     All information appearing in this Registration Statement and the Prospectus
is qualified in its entirety by the detailed information, including financial
statements, appearing in the documents incorporated herein or therein by
reference.

Item 4.  Description of Securities
-------

     Not Applicable

Item 5.  Interests of Named Experts and Counsel
-------

     Not Applicable

                                        -3-
Item 6. Indemnification of Directors and Officers
-------

     Article XIV of the Registrant's Articles of Incorporation requires
indemnification of directors, officers, employees, trustees and agents of the
Registrant for expenses actually and reasonably incurred in connection with the
defense or settlement of any threatened, pending or completed action, suit or
proceeding.

     Chapter 8, Article 5 of the South Carolina Business Corporation Act
provides for permissible, mandatory and court-ordered indemnification of
directors, officers, employees and agents in certain circumstances.  Sections
33-8-510, 33-8-520 and 33-8-560 provide as follows:

     33-8-510  AUTHORITY TO INDEMNIFY.   (a) Except as provided in subsection
(d), a corporation may indemnify an individual made a party to a proceeding
because he is or was a director against liability incurred in the proceeding if:

     (1)  he conducted himself in good faith; and
     (2)  he reasonably believed;
     (i)  in the case of conduct in his official capacity with the corporation,
that his conduct was in the best interest; and
     (ii) in all other cases, that his conduct was at least not opposed to its
best interest; and
     (3)  in the case of any criminal proceeding, he had no reasonable cause to
believe his conduct was unlawful.
     (b)  A director's conduct with respect to an employee benefit plan for a
purpose he reasonably believed to be in the interests of the participants in and
beneficiaries of the plan is conduct that satisfies the requirement of
subsection (a)(2)(ii).
     (c)  The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that the director did not meet the standard of conduct
described in this section.
     (d)  A corporation may not indemnify a director under this section:
     (1)  in connection with a proceeding by or in the right of the corporation
in which the director was adjudged liable to the corporation; or
     (2)  in connection with any other proceeding charging improper personal
benefit to him, whether or not involving action in his official capacity, in
which he was adjudged liable on the basis that personal benefit was improperly
received by him.
     (e) Indemnification permitted under this section in connection with a
proceeding by or in the right of the corporation is limited to reasonable
expenses incurred in connection with the proceeding.

     33-8-520  MANDATORY INDEMNIFICATION.   Unless limited by its articles of
incorporation, a corporation shall indemnify a director who was wholly
successful, on the merits or otherwise, in the defense of any proceeding to
which he was a party because he is or was a director of the corporation against
reasonable expenses incurred by him in connection with the proceeding.

     33-8-560  INDEMNIFICATION OF OFFICERS, EMPLOYEES, AND AGENTS.   Unless a
corporation's articles of incorporation provide otherwise:
     (1) an officer of the corporation who is not a director is entitled to
mandatory indemnification under  Section 33-8-520, and is entitled to apply for
court-ordered indemnification under Section 33-8-540, in each case to the same
extent as a director;
     (2) the corporation may indemnify and advance expenses under this
subchapter to an officer, employee, or agent of the corporation who is not a
director to the same extent as to a director; and
     (3) a corporation also may indemnify and advance expenses to an officer,
employee, or agent who is not a director to the extent, consistent with public
policy, that may be provided by its articles of incorporation, bylaws, general
or specific action of its board of directors, or contract.

     Section 33-8-570 also authorizes a corporation to purchase and maintain
insurance for directors, officers, employees and agents against liability
arising from their positions, whether or not the corporation would have the
power

                                        -4-
to indemnify against the same liability under Section 33-8-510 or Section
33-8-520.  The Registrant maintains directors' and officers' liability insurance
for the benefit of its directors and officers.

Item 7. Exemption From Registration Claimed
-------

     Not Applicable

Item 8. Exhibits
-------

     The following exhibits are filed with or incorporated by reference into
this Registration Statement on Form S-8:

                                                       Reference to Prior Filing
 Regulation S-K                                          or Exhibit Number as
 Exhibit Number         Description of Exhibits             Attached Hereto
 --------------   -----------------------------------  -------------------------

      4.1         Articles of Incorporation of Security                *
                  Federal Corporation, as amended

      4.2         Bylaws of Security Federal Corporation               **

      4.3         Form of Certificate of Common Stock for
                  Security Federal Corporation                         ***

      5           Opinion of Breyer & Associates PC                    5

      23.1        Consent of Elliott Davis, LLC                        23.1

      23.2        Consent of Breyer & Associates PC      Contained in Exhibit 5

      24          Power of attorney                      Contained on Signature
                                                                    Page

      99          Security Federal Corporation 2002                    99
                  Stock Option Plan
------------------
*    Filed as an exhibit to the Registrant's 1998 Proxy Statement on June 26,
     1998 and incorporated herein by reference.

**   Filed as an exhibit to the Registrant's Registration Statement on Form S-8
     on March 2, 2000 and incorporated herein by reference.

***  Filed as an exhibit to the Registrant's Registration Statement on Form 8-A
     on August 12, 1987 and incorporated herein by reference.

Item 9. Undertakings
-------
     (a)  The undersigned Registrant hereby undertakes:

          1.  To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement: (i) to include
any prospectus required by Section 10(a)(3) of the Securities Act, (ii) to
reflect in the prospectus any facts or events arising after the effective date
of the Registration Statement (or most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement, and (iii) to include any
material information with respect to

                                      -5-
the plan of distribution not previously disclosed in the Registration Statement
or any material change in such information in the Registration Statement,
provided, however, that clauses (i) and (ii) do not apply if the information
required to be included in a post-effective amendment by those clauses is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in the
Registration Statement.

          2.  That, for the purposes of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed the initial bona fide
offering thereof.

          3.  To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.

     (b)  The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

     (c)  Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officer and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.  In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

                                       -6-
SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Aiken, State of South Carolina, on the 31st day of
December, 2002.

                                     SECURITY FEDERAL CORPORATION

                                     By: /s/Timothy W. Simmons
                                        ----------------------------------
                                        Timothy W. Simmons
                                        President, Chief Executive Officer and
                                        Director
                                        (Duly Authorized Representative)

                             POWER OF ATTORNEY

     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.  Each person whose signature appears
below hereby makes, constitutes and appoints Timothy W. Simmons his true and
lawful attorney, with full power to sign for such person and in such person's
name and capacity indicated below, and with full power of substitution any and
all amendments to this Registration Statement, hereby ratifying and confirming
such person's signature as it may be signed by said attorney to any and all
amendments.

By:/s/Timothy W. Simmons                                   December 31, 2002
   --------------------------------------------
   Timothy W. Simmons
   President, Chief Executive Officer and
   Director
   (Principal Executive Officer)

By:/s/Roy G. Lindburg                                      December 31, 2002
   --------------------------------------------
   Roy G. Lindburg
   Treasurer and Chief Financial Officer
   (Principal Financial and Accounting Officer)

By:/s/T. Clifton Weeks                                     December 31, 2002
   --------------------------------------------
   T. Clifton Weeks
   Chairman of the Board and Director

By:/s/Gasper L. Toole III                                  December 31, 2002
   --------------------------------------------
   Gasper L. Toole III
   Director

By:/s/Harry O. Weeks Jr.                                   December 31, 2002
   --------------------------------------------
   Harry O. Weeks Jr.
   Director

By:/s/Robert E. Alexander                                  December 31, 2002
   --------------------------------------------
   Robert E. Alexander
   Director
By:/s/Thomas L. Moore                                      December 31, 2002
   --------------------------------------------
   Thomas L. Moore
   Director

By:/s/William Clyburn                                      December 31, 2002
   --------------------------------------------
   William Clyburn
   Director

By:/s/Thomas C. Clark                                    December 31, 2002
   --------------------------------------------
   Thomas C. Clark
   Director

By:/s/J. Chris Verenes                                     December 31, 2002
   --------------------------------------------
   J. Chris Verenes
   Director
SECURITY FEDERAL CORPORATION

                               EXHIBIT INDEX

                                                       Reference to Prior Filing
 Regulation S-K                                          or Exhibit Number as
 Exhibit Number         Description of Exhibits             Attached Hereto
 --------------   ------------------------------------  ----------------------

      4.1         Articles of Incorporation of Security                *
                  Federal Corporation, as amended

      4.2         Bylaws of Security Federal Corporation               **

      4.3         Form of Certificate of Common Stock for
                  Security Federal Corporation                         ***

      5           Opinion of Breyer & Associates PC                    5

      23.1        Consent of Elliott Davis, LLC                        23.1

      23.2        Consent of Breyer & Associates PC      Contained in Exhibit 5

      24          Power of attorney                      Contained on Signature
                                                                    Page

      99          Security Federal Corporation 2002                    99
                  Stock Option Plan
------------------
*    Filed as an exhibit to the Registrant's 1998 Proxy Statement on June 26,
     1998 and incorporated herein by reference.

**   Filed as an exhibit to the Registrant's Registration Statement on Form S-8
     on March 2, 2000 and incorporated herein by reference.

***  Filed as an exhibit to the Registrant's Registration Statement on Form 8-A
     on August 12, 1987 and incorporated herein by reference.
Exhibit 5

                     Opinion of Breyer & Associates PC
[Letterhead of Breyer & Associates PC]

                                  January 3, 2003

Board of Directors
Security Federal Corporation
1705 Whiskey Road South
Aiken, South Carolina  29803

Gentlemen:

     We have acted as special counsel to Security Federal Corporation, a South
Carolina corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form S-8 filed with the Securities and Exchange
Commission ("Registration Statement") under the Securities Act of 1933, as
amended, relating to shares of common stock, par value $0.01 per share (the
"Common Stock") of the Company which may be issued pursuant to the terms of the
Security Federal Corporation 2002 Stock Option Plan (the "Plan"), all as more
fully described in the Registration Statement.  You have requested the opinion
of this firm with respect to certain legal aspects of the proposed offering.

     We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion and based thereon, we are of the
opinion that the Common Stock when issued pursuant to and in accordance with the
terms of the Plan will be duly and validly issued, fully paid, and
nonassessable.

     We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8.

                                        Sincerely,

                                        /s/BREYER & ASSOCIATES PC
                                        BREYER & ASSOCIATES PC
Exhibit 23.1

                       Consent of Elliott Davis, LLC
Consent of Independent Auditors

The Board of Directors
Security Federal Corporation
Aiken, South Carolina

We consent to incorporation by reference in the Registration Statement on Form
S-8 of Security Federal Corporation, relating to their 2002 Stock Option Plan,
of our report dated May 2, 2002, relating to the consolidated balance sheet of
Security Federal Corporation and subsidiaries as of March 31, 2002, and the
related consolidated statements of income, shareholders' equity and cash flows
for the year then ended, which report appears in the March 31, 2002 Annual
Report to Stockholders of Security Federal Corporation, which is incorporated by
reference in Security Federal Corporation's Annual Report on Form 10-K for the
year ended March 31, 2002.

/s/ELLIOTT DAVIS, LLC

ELLIOTT DAVIS, LLC

Greenville, South Carolina
January 2, 2003
Exhibit 99

             Security Federal Corporation 2002 Stock Option Plan
SECURITY FEDERAL CORPORATION

                           2002 STOCK OPTION PLAN

     1.   Plan Purpose.  The purpose of the Plan is to foster and promote the
long-term success of the Corporation and its stockholders by providing a means
for attracting and retaining directors, emeritus directors and employees of the
Corporation and its Affiliates with an equity interest in the Corporation.  The
Plan will assist the Corporation in attracting and retaining the highest quality
of experienced persons as directors, officers and employees and in aligning the
interests of such persons more closely with the interest of the Corporation's
stockholders by encouraging such parties to maintain an equity interest in the
Corporation.

     2.   Definitions.  The following definitions are applicable to the Plan:

     "Affiliate" -- means any "parent corporation" or "subsidiary corporation"
of the Corporation, as such terms are defined in Section 424(e) and (f),
respectively, of the Code.

     "Award" -- means the grant by the Committee of an Incentive Stock Option, a
Non-Qualified Stock Option, a Right, or any combination thereof, as provided in
the Plan.

     "Award Agreement" -- means the agreement evidencing the grant of an Award
made under the Plan.

     "Board" -- means the board of directors of the Corporation.

     "Cause" -- means Termination of Service by reason of personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties or gross negligence.

     "Code" -- means the Internal Revenue Code of 1986, as amended.

     "Committee" -- means the Committee referred to in Section 3 hereof.

     "Corporation" -- means Security Federal Corporation, a South Carolina
corporation, and any successor thereto.

     "Disability" --means any physical or mental injury or disease of a
permanent nature which renders a Participant incapable of meeting the
requirements of the employment or service performed by such Participant
immediately prior to the commencement of such disability.  The determination of
whether a Participant is disabled shall be made by the Board in its sole and
absolute discretion.

     "Incentive Stock Option" -- means an option to purchase Shares granted by
the Committee which is intended to qualify as an incentive stock option under
Section 422(b) of the Code.  Unless otherwise set forth in the Award Agreement,
any Option which does not qualify as an Incentive Stock Option for any reason
shall be deemed ab initio to be a Non-Qualified Stock Option.

     "Market Value" -- means the average of the high and low quoted sales price
on the date in question (or, if there is no reported sale on such date, on the
last preceding date on which any reported sale occurred) of a Share on the
Composite Tape for New York Stock Exchange-Listed Stocks, or, if on such date
the Shares are not quoted on the Composite Tape, on the New York Stock Exchange,
or if the Shares are not listed or admitted to trading on such Exchange, on the
principal United States securities exchange registered under the Securities
Exchange Act of 1934 on which the Shares are listed or admitted to trading, or,
if the Shares are not listed or admitted to trading on any such exchange, the
mean between the closing high bid and low asked quotations with respect to a
Share on such date on the Nasdaq Stock Market, or any similar system then in
use, or, if no such quotations are available, the fair
market value on such date of a Share as the Committee shall determine based on
the weighted average of the past six trades of the Shares.

     "Non-Qualified Stock Option" -- means an option to purchase Shares granted
by the Committee which does not qualify, for any reason, as an Incentive Stock
Option.

     "Option" -- means an Incentive Stock Option or a Non-Qualified Stock
Option.

     "Participant" -- means any director, emeritus director or employee of the
Corporation or any Affiliate who is selected by the Committee to receive an
Award.

     "Plan" -- means this Security Federal Corporation 2002 Stock Option Plan.

     "Related" -- means (i) in the case of a Right, a Right which is granted in
connection with, and to the extent exercisable, in whole or in part, in lieu of,
an Option or another Right and (ii) in the case of an Option, an Option with
respect to which and to the extent a Right is exercisable, in whole or in part,
in lieu thereof.

     "Right" -- means a stock appreciation right with respect to Shares granted
by the Committee pursuant to the Plan.

     "Shares" -- means the shares of common stock of the Corporation.

     "Termination of Service" -- means cessation of service, for any reason,
whether voluntary or involuntary, so that the affected individual is not either
(i) an employee of the Corporation or any Affiliate for purposes of an Incentive
Stock Option, or (ii) a director, emeritus director or employee of the
Corporation or any Affiliate for purposes of any other Award.

     3.   Administration.  The Plan shall be administered by a Committee
consisting of two or more members of the Board, each of whom (i) shall be an
"outside director," as defined under Section 162(m) of the Code and the Treasury
regulations thereunder, and (ii) shall be a "non-employee director," as defined
under Rule 16(b) of the Securities Exchange Act of 1934 or any similar or
successor provision.  The members of the Committee shall be appointed by the
Board.  Except as limited by the express provisions of the Plan or by
resolutions adopted by the Board, the Committee shall have sole and complete
authority and discretion to (i) select Participants and grant Awards; (ii)
determine the number of Shares to be subject to types of Awards generally, as
well as to individual Awards granted under the Plan; (iii) determine the terms
and conditions upon which Awards shall be granted under the Plan; (iv) prescribe
the form and terms of Award Agreements; (v) establish from time to time
regulations for the administration of the Plan; and (vi) interpret the Plan and
make all determinations deemed necessary or advisable for the administration of
the Plan.

     A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the Committee without a meeting, shall
be acts of the Committee.

     4.   Shares Subject to Plan.

          (a)  Subject to adjustment by the operation of Section 6, the maximum
number of Shares with respect to which Awards may be made under the Plan is
20,000 plus (i) the number of Shares repurchased by the Corporation in the open
market or otherwise with an aggregate price no greater than the cash proceeds
received by the Corporation from the exercise of Options granted under the Plan;
plus (ii) any Shares surrendered to the Corporation in payment of the exercise
price of Options granted under the Plan.  The Shares with respect to which
Awards may be made under the Plan may be either authorized and unissued Shares
or previously issued Shares reacquired and held as treasury Shares.  Shares
which are subject to Related Rights and Related Options shall be
                                      2
counted only once in determining whether the maximum number of Shares with
respect to which Awards may be granted under the Plan has been exceeded.  An
Award shall not be considered to have been made under the Plan with respect to
any Option or Right which terminates, and new Awards may be granted under the
Plan with respect to the number of Shares as to which such termination has
occurred.

          (b)  During any calendar year, no Participant may be granted Awards
under the Plan with respect to more than 5,000 Shares, subject to adjustment as
provided in Section 6.

     5.   Awards.

          (a)  Options.  The Committee is hereby authorized to grant Options to
Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan and the
requirements of applicable law as the Committee shall determine, including the
granting of Options in tandem with other Awards under the Plan:

               (i)  Exercise Price.  The exercise price per Share for an Option
shall be determined by the Committee; provided, however, that such exercise
price shall not be less than 100% of the Market Value of a Share on the date of
grant of such Option.

               (ii)  Option Term.  The term of each Option shall be fixed by the
Committee, but shall be no greater than 10 years in the case of an Incentive
Stock Option or 15 years in the case of a Non-Qualified Stock Option.

               (iii)  Time and Method of Exercise.  The Committee shall
determine the time or times at which an Option may be exercised in whole or in
part and the method or methods by which, and the form or forms (including,
without limitation, cash, Shares, other Awards or any combination thereof,
having a fair market value on the exercise date equal to the relevant exercise
price) in which, payment of the exercise price with respect thereto may be made
or deemed to have been made.

               (iv)  Incentive Stock Options.  Incentive Stock Options may be
granted by the Committee only to employees of the Corporation or its Affiliates.

               (v)  Termination of Service.  Unless otherwise determined by the
Committee and set forth in the Award Agreement evidencing the grant of the
Option, upon Termination of Service of the Participant for any reason other than
for Cause, all Options then currently exercisable shall remain exercisable until
the expiration of the Option by its terms.  Upon Termination of Service for
Cause, all Options not previously exercised shall immediately be forfeited.

          (b)  Rights.  A Right shall, upon its exercise, entitle the
Participant to whom such Right was granted to receive a number of Shares or cash
or combination thereof, as the Committee in its discretion shall determine, the
aggregate value of which (i.e., the sum of the amount of cash and/or Market
Value of such Shares on date of exercise) shall equal (as nearly as possible, it
being understood that the Corporation shall not issue any fractional Shares) the
amount by which the Market Value per Share on the date of such exercise shall
exceed the exercise price of such Right, multiplied by the number of Shares with
respect to which such Right shall have been exercised.  A Right may be Related
to an Option or may be granted independently of any Option as the Committee
shall from time to time in each case determine.  In the case of a Related
Option, such Related Option shall cease to be exercisable to the extent of the
Shares with respect to which the Related Right was exercised.  Upon the exercise
or termination of a Related Option, any Related Right shall terminate to the
extent of the Shares with respect to which the Related Option was exercised or
terminated.

     6.   Adjustments Upon Changes in Capitalization.  In the event of any
change in the outstanding Shares subsequent to the effective date of the Plan by
reason of any reorganization, recapitalization, stock split,

                                        3
stock dividend, capital distribution, combination or exchange of shares, merger,
consolidation or any change in the corporate structure or Shares of the
Corporation, the maximum aggregate number and class of shares and exercise price
of the Award, if any, as to which Awards may be granted under the Plan and the
number and class of shares and exercise price of the Award, if any, with respect
to which Awards have been granted under the Plan shall be appropriately adjusted
by the Committee, whose determination shall be conclusive.  Except as otherwise
provided herein, any Award which is adjusted as a result of this Section 6 shall
be subject to the same terms and conditions as the original Award.

     7.   Effect of Merger on Options or Rights.  In the case of any merger,
consolidation or combination of the Corporation (other than a merger,
consolidation or combination in which the Corporation is the continuing
corporation and which does not result in the outstanding Shares being converted
into or exchanged for different securities, cash or other property, or any
combination thereof), any Participant to whom an Option or Right has been
granted shall have the additional right (subject to the provisions of the Plan
and any limitation applicable to such Option or Right), thereafter and during
the term of each such Option or Right, to receive upon exercise of any such
Option or Right an amount equal to the excess of the fair market value on the
date of such exercise of the securities, cash or other property, or combination
thereof, receivable upon such merger, consolidation or combination in respect of
a Share over the exercise price of such Right or Option, multiplied by the
number of Shares with respect to which such Option or Right shall have been
exercised.  Such amount may be payable fully in cash, fully in one or more of
the kind or kinds of property payable in such merger, consolidation or
combination, or partly in cash and partly in one or more of such kind or kinds
of property, all in the discretion of the Committee.

     8.   Effect of Change in Control. Each of the events specified in the
following clauses (i) through (iii) of this Section 8 shall be deemed a "change
in control": (i) any third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, shall become the beneficial
owner of shares of the Corporation with respect to which 25% or more of the
total number of votes for the election of the Board may be cast, (ii) as a
result of, or in connection with, any cash tender offer, merger or other
business combination, sale of assets or contested election, or combination of
the foregoing, the persons who were directors of the Corporation shall cease to
constitute a majority of the Board, or (iii) the stockholders of the Corporation
shall approve an agreement providing either for a transaction in which the
Corporation will cease to be an independent publicly-owned corporation or for a
sale or other disposition of all or substantially all the assets of the
Corporation. If a tender offer or exchange offer for Shares (other than such an
offer by the Corporation) is commenced, or if a change in control shall occur,
unless the Committee shall have otherwise provided in the Award Agreement, and
except as otherwise provided in an employment agreement or arrangement between
the Corporation or an Affiliate and the Participant, all Options and Rights
granted and not fully exercisable shall become exercisable in full upon the
happening of such event; provided, however, that no Option or Right which has
previously been exercised or otherwise terminated shall become exercisable.

     9.   Assignments and Transfers.  No Incentive Stock Option granted under
the Plan shall be transferable other than by will or the laws of descent and
distribution.  Any other Award shall be transferable by will, the laws of
descent and distribution, a "domestic relations order," as defined in Section
414(p)(1)(B) of the Code, or a gift to any member of the Participant's immediate
family or to a trust for the benefit of one or more of such immediate family
members.  During the lifetime of an Award recipient, an Award shall be
exercisable only by the Award recipient unless it has been transferred as
permitted hereby, in which case it shall be exercisable only by such transferee.
For the purpose of this Section 9, a Participant's "immediate family" shall mean
the Participant's spouse, children and grandchildren.

     10.  Employee Rights Under the Plan.  No person shall have a right to be
selected as a Participant nor, having been so selected, to be selected again as
a Participant, and no employee or other person shall have any claim or right to
be granted an Award under the Plan or under any other incentive or similar plan
of the Corporation or any Affiliate.  Neither the Plan nor any action taken
thereunder shall be construed as giving any employee any right to be retained in
the employ of the Corporation or any Affiliate.

                                         4
11.  Delivery and Registration of Stock.  The Corporation's obligation to
deliver Shares with respect to an Award shall, if the Committee so requests, be
conditioned upon the receipt of a representation as to the investment intention
of the Participant to whom such Shares are to be delivered, in such form as the
Committee shall determine to be necessary or advisable to comply with the
provisions of the Securities Act of 1933 or any other federal, state or local
securities legislation.  It may be provided that any representation requirement
shall become inoperative upon a registration of the Shares or other action
eliminating the necessity of such representation under such Securities Act or
other securities legislation.  The Corporation shall not be required to deliver
any Shares under the Plan prior to (i) the admission of such Shares to listing
on any stock exchange on which Shares may then be listed and (ii) the completion
of such registration or other qualification of such Shares under any state or
federal law, rule or regulation, as the Committee shall determine to be
necessary or advisable.

     12.  Withholding Tax.  The Corporation shall have the right to deduct from
all amounts paid in cash with respect to the exercise of a Right under the Plan
any taxes required by law to be withheld with respect to such cash payments.
Where a Participant or other person is entitled to receive Shares pursuant to
the exercise of an Option or Right pursuant to the Plan, the Corporation shall
have the right to require the Participant or such other person to pay the
Corporation the amount of any taxes which the Corporation is required to
withhold with respect to such Shares, or, in lieu thereof, to retain, or sell
without notice, a number of such Shares sufficient to cover the amount required
to be withheld.  All withholding decisions pursuant to this Section 12 shall be
at the sole discretion of the Committee or the Corporation.

     13.  Amendment or Termination.

          (a)  The Board may amend, alter, suspend, discontinue, or terminate
the Plan without the consent of shareholders or Participants, except that any
such action will be subject to the approval of the Corporation's shareholders
if, when and to the extent such shareholder approval is necessary or required
for purposes of any applicable federal or state law or regulation or the rules
of any stock exchange or automated quotation system on which the Shares may then
be listed or quoted, or if the Board, in its discretion, determines to seek such
shareholder approval.

          (b)  The Committee may waive any conditions of or rights of the
Corporation or modify or amend the terms of any outstanding Award.  The
Committee may not, however, amend, alter, suspend, discontinue or terminate any
outstanding Award without the consent of the Participant or holder thereof,
except as otherwise provided herein.

     14.  Effective Date and Term of Plan.  The Plan shall become effective upon
the later of its adoption by the Board or its approval by the shareholders of
the Corporation.  It shall continue in effect for a term of ten years thereafter
unless sooner terminated under Section 13 hereof.

                                  * * * * *