Timothy W. Simmons

About Timothy W. Simmons

Timothy W. Simmons (age 79 as of December 31, 2024) is the non‑executive Chairman of the Board of Security Federal Corporation (SFDL) and a director of Security Federal Bank. He has served on the board since 1983 and became Chairman in October 2011. Simmons previously served as President (1987–2001 at the Bank; 1987–2012 at the Company) and CEO (1988–2010 at the Bank; 1994–2012 at the Company), retiring January 1, 2012; his background is “expertise in all areas of banking.”

Past Roles

External Roles

No other public company directorships or external board roles for Simmons are disclosed in the proxy materials.

Board Governance

• Board leadership: Non‑executive Chairman with CEO role separated since 1994; board believes this structure is best under current circumstances.
• Independence: The Company applies Nasdaq definitions; Simmons is listed as an independent director, but is “not independent for purposes of audit committee membership.”
• Committee assignments (Company): Executive (Chair), Compensation (Chair), Proxy (Chair), Nominating (Chair), Audit (Member). Audit Committee members other than Simmons are independent; Cummins is designated an audit committee financial expert.
• Committee assignments (Bank): Executive, Loan, Audit, Compensation (Chair), Trust, Investment (member across multiple).
• Attendance: In 2024, the Company board held 16 regular meetings and the Bank board met 15 times; no director attended fewer than 75% of meetings/committees (except Mr. Clyburn, excused). All directors attended the 2024 annual meeting except Mr. Clyburn.

Fixed Compensation

• Director fee structure (Bank pays all director fees): 2023—Directors $2,625/month; Executive Committee $2,500/month (no fee to Verenes/Lindburg); Audit Committee $1,442 per meeting; Audit Chair $350/month; Trust/Investment $542/month; No fees for Compensation or Loan Committees.
• Director fee structure (2024 updates): Directors $2,750/month; Executive Committee $2,625/month (no fee to Verenes/Lindburg); Audit Committee $1,508 per meeting; Audit Chair $367/month; Trust/Investment $567/month; No fees for Compensation or Loan Committees.
• Salary Continuation Agreement (Simmons): Monthly benefit $4,057 began Jan 1, 2012; equals 20% of final pay payable over 15 years.

Performance Compensation

The Company states directors did not receive stock or option awards, or non‑equity incentives; executive incentive plan paid no awards for 2023/2024 as thresholds were not met (applies to executives, not directors).

Other Directorships & Interlocks

• Not disclosed for Simmons; no other public company board service identified.
• Ownership interlocks: T. Clifton Weeks Family Ltd. Partnership owns 9.28% in 2025 (9.16% in 2024); Simmons’ wife is a partner in this LP; those shares are excluded from Simmons’ beneficial ownership. Potential influence/affiliation in the shareholder base.

Expertise & Qualifications

• Board qualifications: “Expertise in all areas of banking” from multi‑decade leadership at Company and Bank.
• Risk oversight: Board oversees risk via Executive, Audit, Nominating Committees; CEO and functional risk reports; Bank committees (Loan, Trust, Investment) supplement oversight.

Equity Ownership

• Notes: Includes 79,598 shares held by his wife; excludes shares owned by T. Clifton Weeks Family Ltd. Partnership (wife is a partner).
• Group totals: Directors and officers as a group (12 persons) owned 35.89% in 2024 and 36.38% in 2025.
• Pledging/hedging: No pledging/hedging disclosure for Simmons; insider trading policy prohibits short‑term trading.

Governance Assessment

• Strengths

  • Significant “skin‑in‑the‑game”: 22.5% ownership aligns incentives with shareholders.
  • Non‑executive Chairman with separated CEO role; active committee service; high board and committee engagement/attendance.
  • Audit Committee has an identified financial expert (Cummins) and reports standard oversight practices; recurring external auditor engagement.
  • Say‑on‑pay support strong: 93% approval in 2024; 92% in 2025.

• Risks and red flags

  • Concentrated ownership and extensive chair roles (Executive, Compensation, Proxy, Nominating) may centralize influence and reduce checks and balances.
  • Not independent for audit committee membership, yet serving on Audit Committee; while the company applies Nasdaq definitions, it is not listed on Nasdaq, potentially reducing independence rigor in audit oversight.
  • Ongoing Salary Continuation payments to a current director who is a former CEO (contractual, but could be viewed as legacy entrenchment); $48,680 annually reflected in director “All Other Compensation.”
  • Related‑party affiliation via spouse’s partnership in a 9%+ shareholder LP; while excluded from his beneficial ownership, it is a governance consideration for influence/interlocks.

• Shareholder sentiment indicators

  • Say‑on‑pay outcomes:

    Year	For (%)	Against (%)	Abstain (%)
    2024	93%	6%	1%
    2025	92%	7%	1%

• Attendance signal: Board met frequently (16 Company; 15 Bank in 2024); directors maintained ≥75% attendance (except one excused).

Appendix: Committee Memberships (Selected)

• Company Board Committees:

  • Executive Committee: Simmons (Chair) plus all directors. Met 3 times in 2024.
  • Audit Committee: Moore (Chair), Simmons (Member, not independent for audit), Clyburn, Alexander, Thomas, Toole, Harmon, Cummins. Met 15 times in 2024; Cummins is audit committee financial expert.
  • Compensation Committee: Simmons (Chair) and all independent directors except Simmons; did not meet in 2024 (Bank’s Compensation Committee handled decisions).
  • Proxy Committee: Simmons (Chair) and directors; met once in 2024.
  • Nominating Committee: Simmons (Chair) and independent directors; met once in 2024.

• Bank Board Committees:

  • Executive: Broad membership; met 44 times in 2024.
  • Loan: Broad membership; met 47 times in 2024.
  • Audit: Same as Company audit membership; met 15 times in 2024.
  • Compensation: Simmons (Chair) and directors; met 10 times in 2024.
  • Trust: Broad membership; met 26 times in 2024.
  • Investment: Broad membership; met 12 times in 2024.

Related‑party transactions policy: Insider loans must be at market terms, ordinary course, reviewed by CEO and Loan Committee, with Board review for loans ≥$500,000 per Regulation O. Aggregate insider loans were ~3.0% of equity at 12/31/24; employee loan program details disclosed (Simmons not listed among program borrowers).

Director independence roster (Company’s Nasdaq‑based assessment): Independent—Alexander, Clyburn, Cummins, Harmon, Moore, Simmons, Thomas, Toole, Weeks; Not independent—Verenes, Lindburg (executive officers).