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Southwest Georgia Financial Corporation Reports 16% Net Income Growth for First Quarter 2018
[April 24, 2018]

Southwest Georgia Financial Corporation Reports 16% Net Income Growth for First Quarter 2018


Southwest Georgia Financial Corporation (the "Company") (NYSE American:SGB), a full-service community bank holding company, today reported results of operations for the first quarter ended March 31, 2018. Comparisons are to prior year-periods unless otherwise noted.

"Our first quarter results continue the trend of solid growth in loans, deposits, and earnings. Response in our new Tifton market has been promising, and our Moultrie and Valdosta markets continue to provide growth and stability. We anticipate another successful and exciting year and are confident that our long-term strategy and focus will continue to deliver value," commented DeWitt Drew, President and CEO.

Income Highlights

  • Net income increased 16% to $1.2 million, or $0.48 per diluted share, from $1.1 million, or $0.42 per diluted share. An adjustment was made to estimated tax accruals in the first quarter, and, absent this adjustment, the Company expects it will be accruing a tax rate of approximately 14% for the remainder
    of 2018.
  • Net interest income improved $382 thousand to $4.4 million, primarily due to growth in average total loans of $29.2 million. The increase in provision for loan losses to $215 thousand was necessitated by continued strong loan growth.
  • Higher net interest income was mostly offset by a decrease in noninterest income and increases in provision for loan loss and noninterest expense. Noninterest income continues to be impacted by lower service charges as the economy improves and decreased mortgage banking fees as a result of closing Empire Financial Services.

Balance Sheet Trends

  • Total assets at March 31, 2018, were $510.1 million, up 8% or $39.2 million. Total loans grew 8%, or $24.5 million, to $335.2 million, while continuing to maintain high standards of credit quality. Net charge-offs to average loans were 0.11%.
  • Total deposits were up over 6%, or $25.4 million, to $418.4 million at March 31, 2018. Federal Home Loan Bank Advances were up $12.6 million as further funding for loan growth. The average cost of all interest bearing liabilities increased 18 basis points to 0.77%.

Capital Management

  • Book value per share grew 5% to $16.23 at March 31, 2018.
  • In March 2018, the Company paid a quarterly cash dividend of $0.11 per common share. Southwest Georgia Financial Corporation or its predecessor, Southwest Georgia Bank, has paid cash dividends for 90 consecutive years.

Webcast and Conference Call

The Company will host a conference call and webcast on Tuesday, April 24, 2018 at 1:00 p.m. ET. Management will review the financial and operating results for the first quarter 2018, as well as the Company's strategy and outlook. A question and answer session will follow the formal discussion.

The conference call can be accessed by calling (201) 689-8263. Alternatively, the webcast can be monitored at www.sgb.bank.

A telephonic replay will be available from 4:00 p.m. ET on the day of the teleconference until Tuesday, May 1, 2018. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13678425, or access the webcast replay at www.sgb.bank/investor-relations, where a transcript will be posted once available.

About Southwest Georgia Financial Corporation

Southwest Georgia Financial Corporation is a state-chartered bank holding company with approximately $510 million in assets headquartered in Moultrie, Georgia. Its primary subsidiary, Southwest Georgia Bank, offers comprehensive financial services to consumer, business, and government customers. The current banking facilities include the main office located in Colquitt County, branch offices located in Baker County, Worth County and Lowndes County, and a loan production office located in Tift County. In addition to conventional banking services, the Company provides investment planning and management, trust management, and commercial and individual insurance products. Insurance products and advice are provided by Southwest Georgia Insurance Services, which is located in Colquitt County. The Company routinely posts news and other important information on its website. More information on Southwest Georgia Financial Corporation and Southwest Georgia Bank can be found at: www.sgb.bank.

SAFE HARBOR STATEMENT

This news release contains forward-looking statements, as defined by federal securities laws, including statements about the Company's financial outlook. These statements are based on current expectations and are provided to assist in the understanding of future financial performance. Such performance involves risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements. Important factors that could cause actual results to differ materially from those contemplated today include a change in the Company's capital structure, new or expanded regulatory requirements, the success of the Company's growth strategy, customer preferences, the interest rate environment and other factors described in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q under the sections entitled "Forward-Looking Statements" and "Risk Factors". The Company undertakes no obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as otherwise required by law.





SOUTHWEST GEORGIA FINANCIAL CORPORATION

CONSOLIDATED STATEMENT OF CONDITION

(Dollars in thousands except per share data)

 
  (Unaudited)   (Audited)   (Unaudited)
March 31, December 31, March 31,
2018 2017 2017
ASSETS
Cash and due from banks $ 9,777 $ 11,143 $ 7,133
Interest-bearing deposits in banks 39,210 22,995 18,106
Certificates of deposit in other banks 1,985 1,985 1,235
Investment securities available for sale 56,228 54,364 59,692
Investment securities held to maturity 43,898 44,591 52,698
Federal Home Loan Bank stock, at cost 2,475 2,438 1,905
Loans, less unearned income and discount 335,185 330,173 310,707
Allowance for loan losses (3,170 ) (3,044 ) (3,162 )
Net loans 332,015   327,129   307,545  
Premises and equipment 12,975 12,250 11,260
Bank properties held for sale 212 212 212
Foreclosed assets, net 0 759 127
Intangible assets 16 20 31
Bank owned life insurance 6,595 6,553 5,390
Other assets 4,747   4,633   5,563  
Total assets $ 510,133   $ 489,072   $ 470,897  
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
NOW accounts $ 28,318 $ 25,871 $ 38,164
Money market 139,728 129,040 114,702
Savings 32,683 30,794 30,190
Certificates of deposit $250,000 and over 22,636 22,662 21,017
Other time accounts 62,186   60,969   60,215  
Total interest-bearing deposits 285,551 269,337 264,287
Noninterest-bearing deposits 132,898   127,669   128,720  
Total deposits 418,449   397,006   393,007  
 
Other borrowings 19,471 17,971 8,448
Long-term debt 27,557 29,057 26,029
Accounts payable and accrued liabilities 3,330   3,895   4,110  
Total liabilities 468,807   447,929   431,594  
Shareholders' equity:

Common stock - par value $1; 5,000,000 shares authorized; 4,293,835 shares issued (*)

4,294 4,294 4,294
Additional paid-in capital 5,459 31,701 31,701
Retained earnings 33,972 33,021 31,118
Accumulated other comprehensive income (2,399 ) (1,630 ) (1,690 )
Total 41,326 67,386 65,423
Treasury stock - at cost (**) 0   (26,243 ) (26,120 )
Total shareholders' equity 41,326   41,143   39,303  
Total liabilities and shareholders' equity $ 510,133   $ 489,072   $ 470,897  
 

*  Common stock - shares outstanding

2,545,776 2,541,505 2,547,437
** Treasury stock - shares 0 1,752,330 1,746,398
 

SOUTHWEST GEORGIA FINANCIAL CORPORATION

CONSOLIDATED INCOME STATEMENT (unaudited*)

(Dollars in thousands except per share data)

 
  For the Three Months
Ended March 31,
Interest income: 2018*   2017*
Interest and fees on loans $

4,293

 

$

3,785

 

Interest and dividend on securities available for sale 331 325
Interest on securities held to maturity 277 316
Dividends on Federal Home Loan Bank stock 32 24
Interest on deposits in banks 118 50
Interest on certificates of deposit in other banks   11     2  
Total interest income   5,062     4,502  
 
Interest expense:
Interest on deposits 372 272
Interest on other borrowings 116 26
Interest on long-term debt   126     138  
Total interest expense   614     436  
Net interest income 4,448 4,066
Provision for loan losses   215     75  
Net interest income after provision for losses on loans   4,233     3,991  
 
Noninterest income:
Service charges on deposit accounts 224 270
Income from trust services 59 54
Income from retail brokerage services 88 89
Income from insurance services 388 433
Income from mortgage banking services 1 72
Net gain (loss) on the sale or disposition of assets (7 ) 0
Net gain on the sale of securities 0 124
Other income   241     241  
Total noninterest income   994     1,283  
 
Noninterest expense:
Salary and employee benefits 2,341 2,298
Occupancy expense 290 279
Equipment expense 190 205
Data processing expense 354 387
Amortization of intangible assets 4 4
Other operating expense   817     728  
Total noninterest expense   3,996     3,901  
 
Income before income tax expense 1,231 1,373
Provision for income taxes   (1 )   308  
Net income $ 1,232   $ 1,065  
 
Net income per share, basic $ 0.48   $ 0.42  
Net income per share, diluted $ 0.48   $ 0.42  
Dividends paid per share $ 0.11   $ 0.11  
Basic weighted average shares outstanding   2,544,922     2,547,437  
Diluted weighted average shares outstanding   2,544,922     2,547,437  
 

SOUTHWEST GEORGIA FINANCIAL CORPORATION

Financial Highlights

(Dollars in thousands except per share data)

 
At March 31   2018   2017
Assets $ 510,133 $ 470,897
Loans, less unearned income & discount $ 335,185 $ 310,707
Deposits $ 418,449 $ 393,007
Shareholders' equity $ 41,326 $ 39,303
 
Three Months Ended March 31,
2018 2017
Performance Data & Ratios
Net income $ 1,232 $ 1,065
Earnings per share, basic $ 0.48 $ 0.42
Earnings per share, diluted $ 0.48 $ 0.42
Dividends paid per share $ 0.11 $ 0.11
Return on assets 0.99 % 0.91 %
Return on equity 11.89 % 10.91 %
Net interest margin (tax equivalent) 4.05 % 3.98 %
Dividend payout ratio 22.74 % 26.30 %
Efficiency ratio 70.92 % 70.15 %
 
Asset Quality Data & Ratios
Total nonperforming loans $ 1,506 $ 1,222
Total nonperforming assets $ 1,506 $ 1,349
Net loan charge offs $ 89 $ 38
Reserve for loan losses to total loans 0.95 % 1.02 %
Nonperforming loans/total loans 0.45 % 0.39 %
Nonperforming assets/total assets 0.30 % 0.29 %
Net charge offs / average loans 0.11 % 0.05 %
 
Capital Ratios
Average common equity to average total assets 8.33 % 8.38 %
Common equity Tier 1 capital ratio 12.86 % 12.54 %
Tier 1 capital ratio 12.86 % 12.54 %
Tier 1 leverage ratio 8.78 % 8.79 %
Total risk based capital ratio 13.79 % 13.50 %
Book value per share $ 16.23 $ 15.43
Tangible book value per share $ 16.23 $ 15.42
 
 
Quarterly   1st Qtr   4th Qtr   3rd Qtr   2nd Qtr   1st Qtr
Averages 2018 2017 2017 2017 2017
 
Assets $ 497,562 $ 486,699 $ 471,643 $ 469,201 $ 466,019
Loans, less unearned income & discount $ 331,822 $ 330,842 $ 324,206 $ 312,848 $ 302,620
Deposits $ 405,827 $ 396,746 $ 385,989 $ 390,268 $ 388,761
Equity $ 41,466 $ 41,502 $ 41,089 $ 40,169 $ 39,054
Return on assets 0.99 % 0.59 % 0.81 % 0.92 % 0.91 %
Return on equity 11.89 % 6.91 % 9.26 % 10.69 % 10.91 %
Net income $ 1,232 $ 717 $ 952 $ 1,074 $ 1,065
Net income per share, basic $ 0.48 $ 0.28 $ 0.37 $ 0.42 $ 0.42
Net income per share, diluted $ 0.48 $ 0.28 $ 0.37 $ 0.42 $ 0.42
Dividends paid per share $ 0.11 $ 0.11 $ 0.11 $ 0.11 $ 0.11


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