<PAGE>
<PAGE>
                               FORM 10-QSB


                   SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C.  20549


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

       For the quarterly period ended March 31, 1997

                                       OR

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


Commission File Number:  0-25728 
                         -------

                   Security Federal Bancorp, Inc.
------------------------------------------------------------
     (Exact name of registrant as specified in its charter)

           Delaware                             63-1134627 
-----------------------------              -------------------
(State or other jurisdiction of             (I.R.S. Employer 
 incorporation or organization)             Identification No.)

2301 University Boulevard, Tuscaloosa, Alabama      35401   
----------------------------------------------    ----------
(Address of principal executive offices)           (Zip Code)

Registrant's telephone number, 
including area code:             (205) 345-8800
                                 --------------

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past ninety days.  Yes  X   No 
                                            ----     ------
 
       Indicate the number of shares outstanding of each of the
issuer's classes of common stock as of the latest practicable
date.    671,469  
       -----------<PAGE>
<PAGE>
         SECURITY FEDERAL BANCORP, INC., AND SUBSIDIARY

                       Tuscaloosa, Alabama

                           FORM 10-QSB

                          March 31, 1997
--------------------------------------------------------------


                            CONTENTS


PART I.  FINANCIAL INFORMATION
         ---------------------
                                                          Page
                                                          -----
  Item 1.  Financial Statements

       Independent Accountant's Report                       1
       Consolidated Statements of Financial Condition       2-3
       Consolidated Statements of Income                    4-5
       Consolidated Statements of Cash Flows                6-7
       Notes to Consolidated Financial Statements           8-9

  Item 2.  Management's Discussion and Analysis of 
           Financial Condition and Results of 
           Operations                                      10-13


PART II.  OTHER INFORMATION
          -----------------

  Item 1.  Legal Proceedings                                14

  Item 2.  Changes in Securities                            14

  Item 3.  Defaults upon Senior Securities                  14

  Item 4.  Submission of Matters to a Vote of 
           Security Holders                                 14

  Item 5.  Other Information                                14

  Item 6.  Exhibits and Reports on Form 8-K                 14


SIGNATURES
<PAGE>
<PAGE>

PART I.  FINANCIAL INFORMATION

     Item 1.  Financial Statements

          [Jamison, Money, Farmer & Co., P.C. Letterhead]

May 1, 1997


Board of Directors
Security Federal Bancorp, Inc., and Subsidiary
Tuscaloosa, Alabama

                   INDEPENDENT ACCOUNTANT'S REPORT

     We have reviewed the accompanying consolidated statement of
financial condition of Security Federal Bancorp, Inc., and
Subsidiary, as of March 31, 1997, and the related statements of
income for the three and six month periods and statement of cash
flows for the six months then ended.  These financial statements
are the responsibility of the Company's management. 

     We conducted our review in accordance with standards
established by the American Institute of Certified Public
Accountants.  A review of interim financial information consists
principally of applying analytical procedures to financial data
and making inquiries of persons responsible for financial and
accounting matters.  It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.  The consolidated financial
statements of Security Federal Bancorp, Inc., and Subsidiary as
of March 31, 1996, were reviewed by other accountants whose
report dated May 7, 1996, stated that they were not aware of any
material modifications that needed to be made to the financial
statements in order for them to be in conformity with generally
accepted accounting principles.

     Based on our review, we are not aware of any material
modifications that should be made to the financial statements as
of March 31, 1997, in order for them to be in conformity with
generally accepted accounting principles.




                       /s/ Jamison, Money, Farmer & Co., P.C.
                       Certified Public Accountants

Tuscaloosa, Alabama

                                1
<PAGE>
<PAGE>
           SECURITY FEDERAL BANCORP, INC., AND SUBSIDIARY
                       Tuscaloosa, Alabama

        CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
              March 31, 1997 and September 30, 1996
________________________________________________________________

                           ASSETS           
<TABLE>
<CAPTION>
       
                                               (Unaudited)   
                                                 March 31,    September 30,
                                                   1997          1996     
                                               -----------    -------------
<S>                                            <C>          <C>
Cash and Cash Equivalents                      $  649,826   $   611,576
Federal Home Loan Bank - Interest-
  Bearing Deposits                                420,041       426,084

Investment Securities:
   Securities available-for-sale, 
     at fair value                              3,021,102     2,984,586

Loans Held for Sale, Net of Deferred Fees       1,211,000     1,514,050

Loans Receivable - Net                         67,560,175    68,510,569

Real Estate Owned                                  79,593       117,217

Office Properties and Equipment                 1,124,630     1,155,670

Federal Home Loan Bank Stock - at Cost            620,300       539,000

Accrued Interest and Dividends Receivable         400,064       421,300

Deferred Tax Asset                                  5,658       258,109

Other Assets                                      595,248       456,635
                                              -----------   -----------
            TOTAL ASSETS                      $75,687,637   $76,994,796
                                              ===========   ===========
</TABLE>
See Independent Accountant's Report.
See Notes to Consolidated Financial Statements.
                                 2<PAGE>
<PAGE>
               SECURITY FEDERAL BANCORP, INC., AND SUBSIDIARY
                            Tuscaloosa, Alabama

           CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
               March 31, 1997 and September 30, 1996
______________________________________________________________

               LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                (Unaudited)   
                                                 March 31,   September 30,
                                                   1996          1996     
                                                -----------  -------------
<S>                                               <C>           <C>
Deposits                                          $63,937,529   $61,252,015
Checks Outstanding in Excess of Deposits                    -       174,177
Advances from Federal Home Loan Bank                1,585,000     2,835,000
Advances from Borrowers for Taxes and Insurance       469,036       662,689
Income and Excise Tax Payable - Current               135,780       338,073
Unremitted Collections on Mortgage Loans Serviced     294,420       299,630
Mortgage Note Payable                                  38,292        39,597
Accrued Expenses and Other Liabilities                319,311       771,371
                                                  -----------   -----------
        Total Liabilities                          66,779,368    66,372,552
                                                  -----------   -----------
Stockholders' Equity:
    Common stock, $.01 par value, 1,900,000
      shares authorized, 671,469 shares 
      issued and outstanding                            6,714         6,714
    Additional paid-in capital                      3,655,434     6,144,956
    Net unrealized gain loss on equity securities
      available-for-sale, net of deferred tax         (35,564)      (58,800)
    Retained earnings, substantially restricted     5,281,685     4,529,374
                                                  -----------   -----------
        Total Stockholders' Equity                  8,908,269    10,622,244
                                                  -----------   -----------
                   TOTAL LIABILITIES AND
                     STOCKHOLDERS' EQUITY         $75,687,637   $76,994,796
                                                  ===========   ===========
</TABLE>
See Independent Accountant's Report.
See Notes to Consolidated Financial Statements.

                                     3<PAGE>
<PAGE>
                 SECURITY FEDERAL BANCORP, INC., AND SUBSIDIARY
                              Tuscaloosa, Alabama
                    CONSOLIDATED STATEMENTS OF INCOME
         For the Six and Three Months Ended March 31, 1997 and 1996
_________________________________________________________________________
<TABLE>
<CAPTION>

                                     (Unaudited)               (Unaudited)
                                 Six Months Ended           Three Months Ended
                                      March 31,                  March 31,
                            -------------------------    --------------------------
                              1 9 9 7       1 9 9 6        1 9 9 7        1 9 9 6  
                            ----------    -----------    -----------    -----------
<S>                      <C>           <C>              <C>             <C>
Interest Income
---------------
Loans:
  Mortgage loans         $2,882,370    $2,640,597       $1,448,508      $1,339,349
  Consumer and other 
    loans                    17,222        20,085            7,886          10,320
Investment securities, 
  mortgage backed 
  securities, and
  Federal Home Loan 
  Bank Deposits             159,869       258,321           74,976         120,784
                         ----------    ----------       ----------      ----------
      Total Interest 
         Income           3,059,461     2,919,003        1,531,370       1,470,453
                         ----------    ----------       ----------      ----------

Interest Expense
----------------
 Deposits - savings          70,057        65,889           35,579          33,459
 Deposits - certificates  1,723,937     1,666,901          856,860         832,112
 Mortgage note payable        1,562         1,662              775             825
 Borrowed funds              41,756        14,819           15,608           4,340
                         ----------    ----------       ----------       ---------
      Total Interest 
         Expense          1,837,312     1,749,271          908,822         870,736
                         ----------    ----------       ----------       ---------

      Net Interest 
        Income            1,222,149     1,169,732          622,548         599,717

Provision for Losses 
 on Loans                         -             -                -               -
                         ----------    ----------       ----------       ---------

Net Interest Income after 
 Provision for Losses
    on loans              1,222,149     1,169,732          622,548         599,717
                         ----------    ----------       ----------       ---------
</TABLE>
                            (continued)

See Independent Accountant's Report.
See Notes to Consolidated Financial Statements.
                                     4<PAGE>
<PAGE>
                 SECURITY FEDERAL BANCORP, INC., AND SUBSIDIARY
                              Tuscaloosa, Alabama

                 CONSOLIDATED STATEMENTS OF INCOME(Continued)
        For the Six and Three Months Ended March 31, 1997 and 1996
___________________________________________________________________
<TABLE>
<CAPTION>
                                (Unaudited)                   (Unaudited)
                             Six Months Ended              Three Months Ended
                                 March 31,                      March 31,
                         -------------------------      --------------------------
                           1 9 9 7       1 9 9 6          1 9 9 7        1 9 9 6  
                         ----------    -----------      -----------     ----------
<S>                       <C>            <C>             <C>            <C>          
Non-Interest Income:
 Servicing fees           $ 102,404      $ 117,068       $  49,705      $   58,557
 Income from late 
    charges                  20,439         17,559          11,098           8,644
 Other operating 
    revenue                   4,296          7,383           2,180           4,708
 Gain (loss) on sale
    of loans                139,320        (21,963)         48,916          (5,128)
 Gain on sale of other
    assets                       54              -              54               - 
 Gain on sales of 
    securities                    -         36,960               -               -
                          ---------      ---------       ---------      ----------
      Total Non-
         Interest 
         Income             266,513        157,007         111,953          66,781
                          ---------      ---------       ---------      ----------

Non-Interest Expenses:
 Salaries and employee 
    benefits                404,862        473,392         177,888         156,431
 Net occupancy expenses      48,116         66,990          23,900          24,555
 Equipment expenses          48,506         52,393          23,633          24,277
 OTS/FDIC premiums           51,363         81,092          33,086          40,689
 Net expenses of real 
    estate owned                378          1,834               -           6,359 
 Other operating expenses   185,557        176,978          90,267          89,889
                          ---------      ---------       ---------       ---------

      Total Non-Interest 
         Expenses           738,782        852,679         348,774         342,200
                         ----------      ---------       ---------       ---------
Income Before Income Taxes  749,880        474,060         385,727         324,298

Income Tax Expense          271,244        175,401         134,926         132,432
                         ----------      ---------       ---------       ---------

Net Income               $  478,636      $ 298,659       $ 250,801       $ 191,866
                         ==========      =========       =========       =========
Net Income Per Share     $      .71      $     .44       $     .37       $     .29
                         ==========      =========       =========       =========

</TABLE>

See Independent Accountant's Report.
See Notes to Consolidated Financial Statements.
                                       5<PAGE>
<PAGE>
                 SECURITY FEDERAL BANCORP, INC., AND SUBSIDIARY
                              Tuscaloosa, Alabama

               CONSOLIDATED STATEMENTS OF CASH FLOWS
           For the Six Months Ended March 31, 1997 and 1996
__________________________________________________________________

         INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
                                                       (Unaudited)
                                                    1997          1996     
                                                 -----------  ------------
<S>                                             <C>            <C>         
Cash Flows from Operating Activities:
 Net income                                     $   478,636    $   298,659
 Adjustments to reconcile net income to net
    cash provided by operating activities:
    (Gain) on sale of assets                       (139,581)       (14,997)
    Depreciation expense                             33,011         37,044
    Amortization of premium/discounts on 
      investments                                       192           (871)
    Decrease in accrued interest
      and dividends receivable                       21,236         33,029 
    Decrease in deferred tax asset                  238,979              -
    (Increase) decrease in other assets              24,211       (357,468)
    Decrease in loans held for sale                 303,050              -
    Increase (decrease) in accounts payable and 
      other liabilities                            (452,060)        90,727
    Increase (decrease) in deferred loan fees       (13,662)        51,171
    Increase (decrease) in income tax payable      (202,293)        32,128
                                                -----------    -----------
      Net Cash Provided by Operating 
         Activities                                 291,719        169,422
                                                -----------    -----------

Cash Flows from Investing Activities:
  Sales of U. S. government treasuries
    and agencies                                          -      2,042,436 
  Proceeds from sales of real estate owned          116,902         79,829
  Sales of Federal Home Loan Bank Overnight
    Deposits                                          6,043         59,787
  Loan originations, net of repayments           (9,006,915)   (10,565,376)
  Purchases of property, plant and equipment         (2,142)             -
  Proceeds from sales of loans                    9,868,397      6,744,613
  Purchase of Federal Home Loan Bank stock          (81,300)       (31,100)
  Proceeds from sales of other assets                   225              -
                                                -----------    -----------
      Net Cash Provided by (used in) 
       Investing Activities                         901,210     (1,669,811)
                                                -----------    -----------
</TABLE>
                           (continued)

See Independent Accountant's Report.
See Notes to Consolidated Financial Statements.

                                          6<PAGE>
<PAGE>
               SECURITY FEDERAL BANCORP, INC., AND SUBSIDIARY
                            Tuscaloosa, Alabama

               CONSOLIDATED STATEMENTS OF CASH FLOWS(Continued)
               For the Six Months Ended March 31, 1997 and 1996
__________________________________________________________________

   INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (Continued)
<TABLE>
<CAPTION>
                                                        (Unaudited)
                                                    1997          1996     
                                                 -----------  -------------
<S>                                                <C>         <C>
Cash Flows from Financing Activities:
 Net increase (decrease) in advances from 
    Federal Home Loan Bank                       $(1,250,000)  $1,300,000
 Cash dividends and return of capital paid        (2,215,848)    (335,734)
 Net (decrease) in advances from borrowers
    for tax and insurance                           (193,653)    (247,105)
 (Decrease) in bank overdraft                       (174,177)           -
 Repayments of mortgage notes payable                 (1,305)      (1,205)
 Net (decrease) from unremitted collections
   on mortgage loans serviced                         (5,210)    (276,393)
 Net increase (decrease) in savings accounts         312,694      514,327
 Net increase in certificates of deposit           2,372,820      733,853
                                                 -----------   ----------
      Net Cash Provided by (Used in) 
         Financing Activities                     (1,154,679)   1,687,743
                                                 -----------  -----------

Net Increase in Cash and Cash Equivalents             38,250      187,354
 
Cash and Cash Equivalents, Beginning of Period       611,576      813,264
                                                 -----------  -----------

Cash and Cash Equivalents, End of Period         $   649,826   $1,000,618
                                                 ===========   ==========
</TABLE>


<TABLE>
<CAPTION>


         SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
         -------------------------------------------------

                                  1 9 9 7         1 9 9 6     
                                  -------         -------
      <S>                         <C>           <C>
      Interest paid               $1,865,095    $1,773,067
      Income taxes paid              234,133       143,273
      Additions to real estate
        owned through foreclosure     79,593        34,974

</TABLE>
See Independent Accountant's Report.
See Notes to Consolidated Financial Statements.

                                     7
<PAGE>
<PAGE>
            SECURITY FEDERAL BANCORP, INC., AND SUBSIDIARY
                        Tuscaloosa, Alabama

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         March 31, 1997
________________________________________________________________

1.  Organization
    ------------

Security Federal Bancorp, Inc. (the "Company"), a Delaware
corporation, was incorporated in June, 1994, for the purpose of
acting as a savings and loan holding company with the Bank as its
sole subsidiary.  On March 31, 1995, the Company acquired all of
the common stock of the Bank upon its conversion from mutual to
stock form.  The Company's principal business is the business of
the Bank. The Bank is a federally chartered stock savings bank
and a member of the Federal Home Loan Bank System.

2.  Basis of Presentation
    ---------------------

The accompanying unaudited consolidated financial statements were
prepared in accordance with instructions for Form 10QSB and,
therefore, do not include information or notes necessary for a
complete presentation of financial position, results of
operations, retained earnings, and cash flows in conformity with
generally accepted accounting principles.  These financial
statements should be read in conjunction with the Consolidated
Financial Statements and notes thereto included in the Company's
annual report on Form 10-K for the year ended September 30, 1996. 
The accounting policies shown in Note 1 to the Consolidated
Financial Statements for December 31, 1996, have been consistently
followed.  It is management's opinion that all adjustments
necessary for a fair presentation of the consolidated financial
statements presented have been recorded.  Such adjustments were of
a normal recurring nature.  The results of operations for the
interim period are not necessarily indicative of the results that
may be expected for the full fiscal year.

3.  Principles of Consolidation
    ---------------------------

The accompanying unaudited consolidated financial statements
include the accounts of Security Federal Bancorp, Inc., and
Security Federal Bank.  All significant intercompany items have
been eliminated.

4.  Retained Earnings
    -----------------

The Bank is required to maintain certain levels of regulatory
capital.  At March  31, 1997 the Bank was in compliance with all
regulatory capital requirements.  In addition to these
requirements, the Bank must maintain sufficient capital for the
"liquidation account" for the benefit of eligible account holders. 
In the event of a complete liquidation of the Bank, eligible
depositors would have an interest in the account.

                        (continued)
                            8<PAGE>
<PAGE>
            SECURITY FEDERAL BANCORP, INC., AND SUBSIDIARY
                        Tuscaloosa, Alabama

    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                      March 31, 1997
_________________________________________________________________

5.  Mortgage Servicing Rights
    -------------------------

In May, 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 122, "Accounting
for Mortgage Servicing Rights, an Amendment of FASB 65,"
effective for fiscal years beginning after December 15, 1995. 
When a company has a definitive plan to sell or securitize
mortgage loans it originated and intends to retain the mortgage
servicing rights, Statement No. 122 requires that the cost of
mortgage servicing rights are capitalized separately from the
cost of originating the loan.  Under Statement No. 65, only
mortgage  servicing rights that  are purchased are  capitalized. 
Statement No. 122  eliminates the disparity between the treatment
of mortgage servicing rights obtained through loan origination
and those that are purchased from other parties.  In addition,
Statement No. 122 requires that capitalized mortgage servicing
rights should be amortized in proportion to and over the period
of estimated servicing income and should be evaluated for
impairment based on their fair value.  The Company adopted
Statement No. 122 for the quarter ended December 31, 1996.  For
the six months ended March 31, 1997, a total of $162,825 of
mortgage servicing rights have been capitalized on loans sold
with servicing retained.

See Independent Accountants Report.
                            9<PAGE>
<PAGE>
     Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
             CONDITION AND RESULTS OF OPERATIONS

Financial Condition
-------------------

     The company's total assets decreased by $1.31 million, or
1.7%, to $75.7 million at March 31, 1997, from $77.0 million at
September 30, 1996.   This decrease was primarily a result of a
decrease in loans receivable of $ .95 million, or 1.4%, from
$68.5 million at September 30, 1996, to $67.6 million at
March 31, 1997, due to the sale of mortgage loans.  In addition,
deferred tax assets decreased $252,000, or 97.8%,  primarily due
to the payment of the SAIF assessment and benefits payable under
the director's retirement plan.  These were partially offset by
an increase in other assets of $138,000 from $457,000 at
September 30, 1996, to $595,000 at March 31, 1997, principally
due to the adoption of SFAS No. 122 relating to the increase in
mortgage servicing rights of $160,000.

     Deposits increased by $2.7 million, or 4.4%, from $61.3
million at September 30, 1996, to $63.9 million at March 31,
1997, primarily from increases in short-term certificates of
deposit.  The company anticipates that deposits will continue to
increase, as it will begin to offer full service checking
accounts to its customers in the third quarter.  The increase in
deposits was partially offset by a decrease in short-term
advances from the Federal Home Loan Bank of $1.25 million, or
44%, from $2.84 million at September 30, 1996, to $1.59 million
at March 31, 1997.  Furthermore, accrued expenses and other
liabilities decreased by $452,000 or 58.6%, from $771,000 at
September 30, 1996, to $319,000 at March 31, 1997, due to the
payment of the SAIF assessment. 

     Stockholder's equity decreased approximately 16% to $8.9
million at March 31, 1997, compared with $10.7 million at March
31, 1996, and $10.6 million at September 30, 1996.  This decrease
was caused by the one-time cash distribution and return of
capital of approximately $2.02 million made during the first
quarter of 1997.

Results of Operations
---------------------

     The earnings of the company depend primarily on its level of
net interest income, which is the difference between interest
earned on the company's interest-earning assets, consisting
primarily of mortgage loans, consumer loans, and investment
securities, and the interest paid on interest-bearing
liabilities.  Net interest income totaled $1.2 million and
$623,000 for the six and three month periods ended March 31,
1997, which is an increase of $52,000 and $23,000 over the
respective and six and three month periods ended March 31, 1996.

See Independent Accountants Report.

                              10
<PAGE>
<PAGE>
      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS (CONTINUED)



Net Interest Income
-------------------

     The increase in net interest income for the three and six
months ended March 31, 1997, was primarily caused by an increase
in interest earning assets.  Total interest income for the second
quarter of 1997 increased by $61,000, or 4.1%, to $1.53 million,
as compared to $1.47 million earned in the second quarter of
1996. This is primarily due to an increase in interest income on
mortgage loans of $109,000, or 8.2%, partially offset by a
decrease in interest income on investments of $46,000, or 37.9%. 
Total interest income for the first six months of 1997 increased
by $140,000, or 4.8%, compared to the same period in the prior
year. 

     Total interest expense increased by $38,000, or 4.4%, from
$871,000 for the three month period ended March 31, 1996, to
$909,000 for the three month period ended March 31, 1997.  This
is primarily due to an increase in interest expense on deposits
of $27,000, or 3.1%.  The increase in interest expense on
deposits generally reflects the growth of deposits from the same
period in the prior year.  For the first six months of 1997,
interest expense increased by $88,000, or 5.0%, to $1.84 million
as compared with $1.75 million for the first six months of 1996.  
This results from both an increase in interest on deposits of
$61,000, or 3.5%, and an increase in interest on borrowed funds
of $27,000,  or 163%, when compared to the first six months of
1996.  

Provision for Losses
--------------------

     There were no additions made to the provision for loan
losses for the three month or six month periods ended March 31,
1997.  Management periodically reviews the need to increase the
provision for loan losses based upon their evaluation of known
and inherent risk characteristics of the loan portfolio.  Total
non-performing assets were $534,000 and $720,000 at March 31,
1997 and 1996, which represents .71% and .99% of total assets as
of these dates.  Management believes that the existing provision
for loan losses is adequate based on their evaluation of known
and inherent risk characteristics of the loan portfolio.

Non-Interest Income
-------------------

     Non-interest income for the second quarter of 1997 increased
by $45,000, or 67.6%, compared to the second quarter of 1996. 
Non-interest income for the first six months of 1997 increased by
$110,000, or 69.8%, from the first six months of 1996.  These
increases are the result of increases in gains on sale of loans
of $54,000 for the second quarter of 1997 and $161,000 for the
first six months of 1997 when compared to the same periods in the
previous year.  This increase was principally caused by the
adoption of Statement of Financial Accounting Standards #122 in
the first quarter of 1997.  This statement requires that the
Company capitalizes the rights to service all mortgage loans,
including those obtained through origination.   The increase in
non-interest income for the six months ended March 31, 1997, was
partially offset by a decrease in gains on sales of investments
of $37,000, or 100%, for the six month period ended March 31,
1997, compared to the same period in the prior year.

See Independent Accountants Report.

                              11
<PAGE>
      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Non-Interest Expense
--------------------

     Non-interest expense decreased by $114,000 or 13.3%, to
$739,000 for the six month period ended March 31, 1997, from
$853,000 for the six month period ended March 31, 1996.  This 
resulted from a decrease in salaries and employee benefits
related to accrued benefits for the directors retirement plan and
the management recognition plan and a decrease in deposit
insurance due to the restructuring of the Savings Association
Insurance Fund.  Non-interest expense for the second quarter of
1997 increased $7,000, or 1.9%, from the second quarter of 1996.

Income Taxes
------------

     Income tax provisions for three and six month periods ended
March 31, 1997 and 1996, are generally reflective of the amounts
of the company's pre-tax income and the effective income tax rate
then in effect.

Liquidity and Capital Resources
-------------------------------

     The Bank is required to maintain minimum levels of liquid
assets as defined by OTS regulations.  This requirement, which
varies from time to time depending upon economic conditions and
deposit flows, is based upon a percentage of deposits and short-
term borrowings.  The required ratio currently is 5.0%.  The
Bank's liquidity ratio averaged 6.14% for the  period ended March
31, 1997.  The Bank adjusts its liquidity levels in order to meet
funding needs of deposit outflows, payment of real estate taxes
on mortgage loans and repayment of borrowings and loan
commitments.  The Bank also adjusts liquidity as appropriate to
meet its asset and liability management objectives.

     The Bank's primary sources of funds are deposits, sale of
mortgage loans, amortization and prepayment of loans, maturities
of investment securities and other investments, borrowings
through advances from the FHLB, and earnings and funds provided
from operations.  While scheduled principal repayments on loans
are a relatively predictable source of funds, deposit flows and
loan prepayments are greatly influenced by interest rates,
economic conditions, and competition.  The Bank manages the
pricing of its deposits to maintain a desired deposit balance. 
In addition, the Bank invests in short-term interest-earning
assets, which provide liquidity to meet lending requirements. 
The Bank periodically uses advances from the FHLB of Atlanta for
liquidity purposes.

     During the six months ended March 31, 1997, the company's
cash and cash equivalents (cash and short-term investments with
maturities less than 90 days) increased by $38,000.  Cash was
provided by operating activities of $292,000, net proceeds from
sales of loans of $9.87 million, net increases in deposit
accounts of $2.69 million, and proceeds from sales of real estate
owned of $117,000.  These were offset by an increase in loan
originations, net of repayments of $9.0 million, decreases in
advances from borrowers for tax and insurance of $194,000, a
decrease in advances from FHLB of $1.25 million, and cash
dividends and return of capital paid of $2.22 million.

See Independent Accountants Report.

                              12
<PAGE>
<PAGE>
      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Liquidity and Capital Resources  (Continued)
-------------------------------

     Management monitors projected liquidity needs and determines
the level desirable based in part on commitments to make loans
and management's assessments of their ability to generate funds. 
Loan commitments at March 31, 1997, including loans-in-process,
were $3.6 million.  These commitments are expected to be funded
from liquid assets, cash flow from loan repayments, and, if
needed, advances from FHLB of Atlanta.

     Under the regulatory capital requirements of the OTS, the
Bank is required to maintain minimal capital requirements by
satisfying three capital standards:  a tangible capital
requirement, a leverage ratio requirement, and a risk-based
capital requirement.  Under the tangible capital requirement, the
Bank's tangible capital must be equal to 1.5% of adjusted total
assets.  Under the leverage ratio requirement, the Bank's core
capital must be equal to 3.0% of adjusted total assets.  In
addition, under the risk-based capital requirement, the Bank must
maintain core and supplemental capital (core capital plus any
general loss reserves) equal to 8% of risk-weighted assets (total
assets, plus off-balance-sheet items multiplied by the
appropriate risk weight).

     The following table presents the Bank's capital position
based on the March 31, 1997, financial statements:

<TABLE>
<CAPTION>
                           Percent             Percent            Percent
                 Actual      of     Required     of      Excess     of
                 Amount    Assets    Amount    Assets    Amount    Assets 
                 ------    ------   -------   -------   -------   --------
<S>            <C>         <C>      <C>         <C>     <C>        <C>   
Tangible       $8,361,000  11.05    $1,136,000  1.50    $7,225,000   9.55
Core            8,361,000  11.05     2,272,000  3.00     6,089,000   8.05
Risk-weighted   8,690,000  21.42     3,246,000  8.00     5,444,000  13.42

</TABLE>

See Independent Accountants Report.

                             13<PAGE>
<PAGE>

PART II.  OTHER INFORMATION
          -----------------

Item 1.  Legal Proceedings

         None

Item 2.  Changes in Securities

         None

Item 3.  Defaults upon Senior Securities

         None

Item 4.  Submission of Matters to a Vote of Security Holders

         None.

Item 5.  Other Information

         None

Item 6.  Exhibits and Reports on Form 8-K

         Exhibits:

         Exhibit 27   Financial Data Schedule

         Reports on Form 8-K:

         None
                              14<PAGE>
<PAGE>

                        SIGNATURES


     In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


Date: May 15, 1997          Security Federal Bancorp, Inc.
                            (Registrant)




                                                                  
    
                            /s/ Marlin D. Moore, Jr.
                            -----------------------------
                            Marlin D. Moore, Jr.
                            Chairman and Chief Executive Officer
                            (The Duly Authorized Representative)



                            /s/ John F. Harvard
                            -------------------------------
                            John F. Harvard
                            President and Chief Financial Officer