Southwest Georgia Financial Corporation Reports Third Quarter 2013 Results

SGB

MOULTRIE, Ga., Oct. 21, 2013 (GLOBE NEWSWIRE) -- Southwest Georgia Financial Corporation (the "Corporation") (NYSE MKT:SGB), a full-service community bank holding company, today reported its results of operations for the third quarter ended September 30, 2013.

Third Quarter and Nine-Month Income Highlights

  • Net income increased 54.6% to $651 thousand in the 2013 third quarter, or $0.25 per diluted share, from $421 thousand, or $0.17 per diluted share, in the third quarter of 2012. The increase in net income is due to higher net interest income of $272 thousand on strong loan growth.
  • For the nine months ended September 30, 2013, net income was $1.8 million, or $0.70 per diluted share, a 38.0% increase from $1.3 million, or $0.51 per diluted share, for the same period in the prior year driven by higher net interest income.
  • Noninterest income was down $737 thousand to $3.5 million from the first nine months of last year, mostly attributed to decreased mortgage banking fee income.

Balance Sheet Trends and Asset Quality

  • Total assets at September 30, 2013 were $372.0 million, an increase of 12.0%, or $39.8 million, from September 30, 2012.
  • Total loans increased $19.0 million, or 9.4%, to $221.5 million compared with the same period last year.
  • Total deposits grew $31.0 million to $308.7 million at September 30, 2013, an increase of 11.2% from the third quarter of 2012.
  • Non-performing asset ratio was 0.51% at September 30, 2013, a 27 basis point improvement when compared with the third quarter 2012.

Capital Management

  • The Company has a total risk based capital ratio of 14.98%, measurably above the federal "well capitalized" standard.
  • Return on equity increased to 8.49% compared with 5.76% in the third quarter of 2012.
  • Tangible book value per share was $12.03 at September 30, 2013, up from $11.28 at the end of the 2012 third quarter.

"This quarter we continued to experience high quality loan growth combined with continued growth in core deposits," stated DeWitt Drew, President and CEO. "However, the interest rate environment is concerning, especially as it pertains to our bond portfolio whose duration has become very short. We are also taking a cautious approach to our mortgage banking activities which are becoming difficult to rationalize given the current political and regulatory environment."

Dividends

In September 2013, the Corporation paid a third quarter cash dividend of $0.04 per common share. Southwest Georgia Financial Corporation or its predecessor, Southwest Georgia Bank, has paid cash dividends for 85 consecutive years.

About Southwest Georgia Financial Corporation

Southwest Georgia Financial Corporation is a state-chartered bank holding company with approximately $372 million in assets headquartered in Moultrie, Georgia. Its primary subsidiary, Southwest Georgia Bank, offers comprehensive financial services to consumer, business, and governmental customers. The current banking facilities include the main office located in Colquitt County, and branch offices located in Baker County, Thomas County, Worth County, and Lowndes County. In addition to conventional banking services, the bank provides investment planning and management, trust management, mortgage banking, and commercial and individual insurance products. Insurance products and advice are provided by Southwest Georgia Insurance Services which is located in Colquitt County. Mortgage banking for primarily commercial properties is provided by Empire Financial Services, Inc., a mortgage banking services firm.

More information on Southwest Georgia Financial Corp. and Southwest Georgia Bank can be found at its website: www.sgfc.com.

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. For a discussion of some risks and other factors that could cause the Company's actual results to differ materially from such statements, please refer to 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.

Financial tables follow.

SOUTHWEST GEORGIA FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF CONDITION
(Dollars in thousands except per share data)
(Unaudited)
September 30,
2013
(Audited)
December 31,
2012
(Unaudited)
September 30,
2012
ASSETS
Cash and due from banks $ 7,390 $ 8,646 $ 7,568
Interest-bearing deposits in banks 25,103 27,935 27,525
Certificates of deposit in other banks 4,165 3,920 1,715
Investment securities available for sale 33,212 21,672 13,918
Investment securities held to maturity 60,391 59,863 57,193
Federal Home Loan Bank stock, at cost 1,721 1,448 1,447
Loans, less unearned income and discount 221,492 204,137 202,483
Allowance for loan losses (3,099) (2,845) (2,745)
Net loans 218,393 201,292 199,738
Premises and equipment 10,117 10,149 10,567
Foreclosed assets, net 581 1,690 1,837
Intangible assets 165 327 381
Bank owned life insurance 4,935 4,767 4,722
Other assets 5,820 5,472 5,621
Total assets $ 371,993 $ 347,181 $ 332,232
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
NOW accounts $ 21,499 $ 28,881 $ 42,975
Money market 83,865 77,133 38,840
Savings 29,291 25,988 25,688
Certificates of deposit $100,000 and over 41,578 36,591 39,721
Other time accounts 50,586 55,098 57,343
Total interest-bearing deposits 226,819 223,691 204,567
Noninterest-bearing deposits 81,838 68,071 73,084
Total deposits 308,657 291,762 277,651
Other borrowings 10,000 2,000 2,000
Long-term debt 19,000 20,000 20,000
Accounts payable and accrued liabilities 3,530 3,544 3,462
Total liabilities 341,187 317,306 303,113
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 31,701 31,701 31,701
Retained earnings 22,148 20,664 20,123
Accumulated other comprehensive income (1,223) (670) (885)
Total 56,920 55,989 55,233
Treasury stock - at cost (**) (26,114) (26,114) (26,114)
Total shareholders' equity 30,806 29,875 29,119
Total liabilities and shareholders' equity $ 371,993 $ 347,181 $ 332,232
* Common stock - shares outstanding 2,547,837 2,547,837 2,547,837
** Treasury stock - shares 1,745,998 1,745,998 1,745,998
SOUTHWEST GEORGIA FINANCIAL CORPORATION
CONSOLIDATED INCOME STATEMENT (unaudited*)
(Dollars in thousands except per share data)
For the Three Months
Ended September 30,
For the Nine Months
Ended September 30,
Interest income: 2013* 2012* 2013* 2012*
Interest and fees on loans $ 3,104 $ 2,921 $ 9,057 $ 8,403
Interest and dividend on securities available for sale 164 136 495 560
Interest on securities held to maturity 347 362 1,079 1,097
Dividends on Federal Home Loan Bank stock 10 6 27 22
Interest on deposits in banks 13 12 49 42
Interest on certificates of deposit in other banks 11 5 32 12
Total interest income 3,649 3,442 10,739 10,136
Interest expense:
Interest on deposits 209 274 669 843
Interest on other borrowings 103 18 197 40
Interest on long-term debt 92 177 374 556
Total interest expense 404 469 1,240 1,439
Net interest income 3,245 2,973 9,499 8,697
Provision for loan losses 105 105 315 315
Net interest income after provision for losses on loans 3,140 2,868 9,184 8,382
Noninterest income:
Service charges on deposit accounts 338 320 925 920
Income from trust services 61 51 164 153
Income from retail brokerage services 88 81 255 282
Income from insurance services 308 272 979 975
Income from mortgage banking services 205 340 702 1,358
Provision for foreclosed property losses 0 (75) 0 (225)
Net gain (loss) on the sale or disposition of assets (11) 16 (68) (80)
Net gain on the sale of securities 0 0 0 338
Other income 174 158 560 533
Total noninterest income 1,163 1,163 3,517 4,254
Noninterest expense:
Salary and employee benefits 2,114 2,030 6,291 6,732
Occupancy expense 266 261 773 742
Equipment expense 224 239 684 683
Data processing expense 278 277 826 840
Amortization of intangible assets 54 54 162 165
Other operating expense 636 690 2,013 1,964
Total noninterest expense 3,572 3,551 10,749 11,126
Income before income tax expense 731 480 1,952 1,510
Provision for income taxes 80 59 162 213
Net income $ 651 $ 421 $ 1,790 $ 1,297
Net income per share, basic $ 0.25 $ 0.17 $ 0.70 $ 0.51
Net income per share, diluted $ 0.25 $ 0.17 $ 0.70 $ 0.51
Dividends paid per share $ 0.04 $ 0.04 $ 0.12 $ 0.12
Basic weighted average shares outstanding 2,547,837 2,547,837 2,547,837 2,547,837
Diluted weighted average shares outstanding 2,547,837 2,547,837 2,547,837 2,547,837
SOUTHWEST GEORGIA FINANCIAL CORPORATION
Financial Highlights
(Dollars in thousands except per share data)
At September 30 2013 2012
Assets $371,993 $332,232
Loans, less unearned income & discount $221,492 $202,483
Deposits $308,657 $277,651
Shareholders' equity $ 30,806 $ 29,119
Three Months Ended September 30, Nine Months Ended September 30,
2013 2012 2013 2012
Performance Data & Ratios
Net income $ 651 $ 421 $ 1,790 $ 1,297
Earnings per share, basic $ 0.25 $ 0.17 $ 0.70 $ 0.51
Earnings per share, diluted $ 0.25 $ 0.17 $ 0.70 $ 0.51
Dividends paid per share $ 0.04 $ 0.04 $ 0.12 $ 0.12
Return on assets 0.71% 0.53% 0.66% 0.54%
Return on equity 8.49% 5.76% 7.82% 5.93%
Net interest margin (tax equivalent) 4.04% 4.32% 4.03% 4.22%
Dividend payout ratio 15.66% 24.23% 17.08% 23.58%
Efficiency ratio 77.83% 82.69% 79.29% 82.98%
Asset Quality Data & Ratios
Total nonperforming loans $ 1,134 $ 669 $ 1,134 $ 669
Total nonperforming assets $ 1,890 $ 2,576 $ 1,890 $ 2,576
Net loan charge offs $ 55 $ 270 $ 61 $ 670
Reserve for loan losses to total loans 1.40% 1.36% 1.40% 1.36%
Nonperforming loans/total loans 0.51% 0.33% 0.51% 0.33%
Nonperforming assets/total assets 0.51% 0.78% 0.51% 0.78%
Net charge offs / average loans 0.10% 0.54% 0.04% 0.47%
Capital Ratios
Average common equity to average total assets 8.37% 9.14% 8.41% 9.10%
Tier 1 capital ratio 13.68% 14.38% 13.68% 14.38%
Tier 1 leverage ratio 8.71% 9.27% 8.71% 9.27%
Total risk based capital ratio 14.98% 15.63% 14.98% 15.63%
Book value per share $ 12.09 $ 11.43 $ 12.09 $ 11.43
Tangible book value per share $ 12.03 $ 11.28 $ 12.03 $ 11.28
Quarterly 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr
Averages 2013 2013 2013 2012 2012
Assets $366,206 $359,767 $362,225 $341,418 $319,266
Loans, less unearned income & discount $221,767 $212,274 $203,106 $203,871 $199,145
Deposits $304,131 $303,995 $306,934 $285,965 $263,747
Equity $ 30,639 $ 30,723 $ 30,186 $ 29,624 $ 29,194
Return on assets 0.71% 0.64% 0.62% 0.75% 0.53%
Return on equity 8.49% 7.47% 7.50% 8.68% 5.76%
Net income $ 651 $ 574 $ 566 $ 643 $ 421
Net income per share, basic $ 0.25 $ 0.23 $ 0.22 $ 0.25 $ 0.17
Net income per share, diluted $ 0.25 $ 0.23 $ 0.22 $ 0.25 $ 0.17
Dividends paid per share $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04

CONTACT: INVESTOR AND MEDIA CONTACT: George R. Kirkland Senior Vice President and Treasurer Phone: (229) 873-3830 investorinfo@sgfc.com

Source:Southwest Georgia Financial Corporation