Southwest Georgia Financial Corporation Reports Fourth Quarter and 2013 Results

SGB

MOULTRIE, Ga., Jan. 22, 2014 (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 fourth quarter and year ended December 31, 2013.

Fourth Quarter and Year-End Income Highlights

  • Net income was $982 thousand in the 2013 fourth quarter, or $0.39 per diluted share, compared with $642 thousand, or $0.25 per diluted share, in the fourth quarter of 2012.
  • For the year ended December 31, 2013, net income was $2.8 million, or $1.09 per diluted share, a 43.0% increase when compared with $1.9 million, or $0.76 per diluted share, for the same period in the prior year. Earnings growth was driven by higher net interest income resulting from continued loan growth.
  • Year-to-date and quarter-to-date net income were affected by a $736 thousand (for the year) decrease in commercial mortgage banking revenue. Partially offsetting the decrease was a fourth quarter gain on sale of holdings of Fannie Mae preferred stock.

Balance Sheet Trends and Asset Quality

  • Total assets at December 31, 2013 were $373.9 million, an increase of 7.7%, or $26.7 million from December 31, 2012.
  • Total loans increased $14.6 million, or 7.1%, to $218.7 million compared with the same period last year. The growth in loans was funded by increases in noninterest-bearing and money market deposits.
  • Total deposits grew $18.7 million to $310.4 million at December 31, 2013, an increase of 6.4% from the end of 2012.
  • Our non-performing asset ratio was 0.36% at December 31, 2013, a 17 basis point improvement when compared with 0.53% at the end of 2012.

Capital Management

  • The Company has a Total Risk-Based Capital Ratio of 15.44% and a Leverage Capital Ratio of 8.73%, both measurably above the federal "well capitalized" standard.
  • Return on equity increased to 12.50% compared with 8.68% in the fourth quarter of 2012. For the year, return on equity increased to 9.02% from 6.62% for 2012.
  • Tangible book value per share at December 31, 2013, was $12.29, up from $11.60 at the end of 2012.

DeWitt Drew, President and CEO commented, "The driver of our growth has been increases in noninterest-bearing accounts. The majority of these funds are employed in short-term investments with the Federal Reserve earning very little interest in the current environment and also creating very little credit risk. Strong asset quality metrics, improved earnings performance, and the nature of our growth allow us to remain confident in the quality of our capital."

Dividends

In December 2013, the Corporation paid a fourth quarter cash dividend of $0.08 per common share. The Corporation paid dividends of $0.20 per common share in 2013 compared with $0.16 per common share in 2012. 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 $373 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) (Audited) (Audited)
December 31, December 31, December 31,
2013 2012 2011
ASSETS
Cash and due from banks $ 7,074 $ 8,646 $ 6,552
Interest-bearing deposits in banks 28,296 27,935 14,498
Certificates of deposit in other banks 3,430 3,920 980
Investment securities available for sale 36,461 21,672 28,641
Investment securities held to maturity 59,624 59,863 52,339
Federal Home Loan Bank stock, at cost 1,721 1,448 1,787
Loans, less unearned income and discount 218,688 204,137 181,302
Allowance for loan losses (3,078) (2,845) (3,100)
Net loans 215,610 201,292 178,202
Premises and equipment 10,336 10,149 9,942
Foreclosed assets, net 406 1,690 2,358
Intangible assets 111 327 547
Bank owned life insurance 4,980 4,767 4,593
Other assets 5,846 5,472 5,211
Total assets $ 373,895 $ 347,181 $ 305,650
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
NOW accounts $ 23,088 $ 28,881 $ 29,841
Money market 89,934 77,133 45,638
Savings 28,792 25,988 24,367
Certificates of deposit $100,000 and over 36,956 36,591 32,629
Other time accounts 49,836 55,098 59,950
Total interest-bearing deposits 228,606 223,691 192,425
Noninterest-bearing deposits 81,829 68,071 56,486
Total deposits 310,435 291,762 248,911
Other borrowings 11,800 2,000 2,000
Long-term debt 17,200 20,000 22,000
Accounts payable and accrued liabilities 3,040 3,544 4,188
Total liabilities 342,475 317,306 277,099
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 22,927 20,664 19,133
Accumulated other comprehensive income (1,388) (670) (463)
Total 57,534 55,989 54,665
Treasury stock - at cost (**) (26,114) (26,114) (26,114)
Total shareholders' equity 31,420 29,875 28,551
Total liabilities and shareholders' equity $ 373,895 $ 347,181 $ 305,650
SOUTHWEST GEORGIA FINANCIAL CORPORATION
CONSOLIDATED INCOME STATEMENT (unaudited*)
(Dollars in thousands except per share data)
For the Three Months For the Twelve Months
Ended December 31, Ended December 31,
Interest income: 2013* 2012* 2013* 2012
Interest and fees on loans $3,162 $3,052 $12,219 $11,455
Interest and dividend on securities available for sale 178 151 673 711
Interest on securities held to maturity 357 359 1,435 1,456
Dividends on Federal Home Loan Bank stock 12 11 39 33
Interest on deposits in banks 16 18 66 60
Interest on certificates of deposit in other banks 10 7 43 19
Total interest income 3,735 3,598 14,475 13,734
Interest expense:
Interest on deposits 213 269 882 1,111
Interest on other borrowings 98 14 295 54
Interest on long-term debt 111 177 486 733
Total interest expense 422 460 1,663 1,898
Net interest income 3,313 3,138 12,812 11,836
Provision for loan losses 105 130 420 445
Net interest income after provision for losses on loans 3,208 3,008 12,392 11,391
Noninterest income:
Service charges on deposit accounts 354 322 1,278 1,242
Income from trust services 63 53 228 205
Income from retail brokerage services 83 100 338 382
Income from insurance services 349 305 1,328 1,280
Income from mortgage banking services 238 318 940 1,676
Provision for foreclosed property losses 0 (95) 0 (320)
Net gain (loss) on the sale or disposition of assets 0 104 (68) 24
Net gain on the sale of securities 312 0 312 338
Other income 175 164 735 698
Total noninterest income 1,574 1,271 5,091 5,525
Noninterest expense:
Salary and employee benefits 2,164 1,986 8,455 8,717
Occupancy expense 252 265 1,025 1,006
Equipment expense 218 256 902 940
Data processing expense 271 241 1,097 1,082
Amortization of intangible assets 54 54 216 220
Other operating expense 638 667 2,651 2,631
Total noninterest expense 3,597 3,469 14,346 14,596
Income before income tax expense 1,185 810 3,137 2,320
Provision for income taxes 203 167 365 381
Net income $982 $642 $2,772 $1,939
Net income per share, basic $0.39 $0.25 $1.09 $0.76
Net income per share, diluted $0.39 $0.25 $1.09 $0.76
Dividends paid per share $0.08 $0.04 $0.20 $0.16
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 December 31 2013 2012
Assets $373,895 $347,181
Loans, less unearned income & discount $218,688 $204,137
Deposits $310,435 $291,762
Shareholders' equity $31,420 $29,875
Three Months Ended December 31, Twelve Months Ended December 31,
2013 2012 2013 2012
Performance Data & Ratios
Net income $982 $643 $2,772 $1,939
Earnings per share, basic $0.39 $0.25 $1.09 $0.76
Earnings per share, diluted $0.39 $0.25 $1.09 $0.76
Dividends paid per share $0.08 $0.04 $0.20 $0.16
Return on assets 1.05% 0.75% 0.76% 0.60%
Return on equity 12.50% 8.68% 9.02% 6.62%
Net interest margin (tax equivalent) 4.02% 4.23% 4.02% 4.22%
Dividend payout ratio 20.75% 15.86% 18.38% 21.02%
Efficiency ratio 70.91% 75.79% 77.00% 81.15%
Asset Quality Data & Ratios
Total nonperforming loans $913 $25 $913 $25
Total nonperforming assets $1,363 $1,849 $1,363 $1,849
Net loan charge offs $127 $30 $187 $700
Reserve for loan losses to total loans 1.41% 1.39% 1.41% 1.39%
Nonperforming loans/total loans 0.42% 0.01% 0.42% 0.01%
Nonperforming assets/total assets 0.36% 0.53% 0.36% 0.53%
Net charge offs / average loans 0.23% 0.06% 0.09% 0.36%
Capital Ratios
Average common equity to average total assets 8.39% 8.68% 8.41% 8.99%
Tier 1 capital ratio 14.17% 14.31% 14.17% 14.31%
Tier 1 leverage ratio 8.73% 8.85% 8.73% 8.85%
Total risk based capital ratio 15.44% 15.56% 15.44% 15.56%
Book value per share $12.33 $11.73 $12.33 $11.73
Tangible book value per share $12.29 $11.60 $12.29 $11.60
Quarterly 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
Averages 2013 2013 2013 2013 2012
Assets $374,542 $366,206 $359,767 $362,225 $341,418
Loans, less unearned income & discount $222,723 $221,767 $212,274 $203,106 $203,871
Deposits $310,406 $304,131 $303,995 $306,934 $285,965
Equity $31,436 $30,639 $30,723 $30,186 $29,624
Return on assets 1.05% 0.71% 0.64% 0.62% 0.75%
Return on equity 12.50% 8.49% 7.47% 7.50% 8.68%
Net income $982 $651 $574 $566 $643
Net income per share, basic $0.39 $0.25 $0.23 $0.22 $0.25
Net income per share, diluted $0.39 $0.25 $0.23 $0.22 $0.25
Dividends paid per share $0.08 $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