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Southwest Georgia Financial Corporation Reports Second Quarter 2014 Results

SGB

MOULTRIE, Ga., July 25, 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 second quarter ended June 30, 2014.

Second Quarter and Six-Month Income Highlights

  • Net income was $737 thousand for the second quarter of 2014, or $0.28 per diluted share, 28% higher than the $574 thousand, or $0.23 per diluted share, in the second quarter of 2013.
  • For the six months ended June 30, 2014, net income was $1.4 million, or $0.56 per diluted share, a 26% increase from $1.1 million, or $0.45 per diluted share, for the same period in the prior year.
  • Net interest income grew 6.1% and 4.7% in the second quarter and year-to-date period, respectively, over the comparable periods of 2013, due to lower deposit costs combined with increased revenue from a higher volume of earning assets.
  • Noninterest income increased 8.4% to $1.2 million for the second quarter of 2014, as a result of gains from most of the Corporation's business units. Year-to-date noninterest income was up 9.9%.

Balance Sheet Trends and Asset Quality

  • Total assets at June 30, 2014 were $376 million, an increase of 6.9% from June 30, 2013.
  • Total loans were $227 million, an increase of 3.6% over the same period last year.
  • Total deposits grew $17.4 million, or 5.8%, to $314 million at June 30, 2014, from the second quarter of 2013. Net deposit growth was primarily in noninterest-bearing transaction accounts.
  • Assets quality remains strong with extraordinarily low levels of non-performing assets.

DeWitt Drew, President and CEO, commented, "Our second quarter results were strong and demonstrate the strength of our strategy. Although loan growth has slowed, we remain extremely encouraged with our progress. However, we continue to devote significant resources to compliance requirements and are challenged by that burden."

Dividends

In June 2014, the Corporation paid a quarterly cash dividend of $0.08 per common share. Southwest Georgia Financial Corporation or its predecessor, Southwest Georgia Bank, has paid cash dividends for 86 consecutive years.

About Southwest Georgia Financial Corporation

Southwest Georgia Financial Corporation is a state-chartered bank holding company with approximately $376 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 Corporation'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 Corporation's actual results to differ materially from such statements, please refer to the Corporation'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 Corporation 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) (Unaudited)
June 30,
2014
December 31,
2013
June 30,
2013
ASSETS
Cash and due from banks $ 8,310 $ 7,074 $ 7,237
Interest-bearing deposits in banks 4,910 28,296 6,308
Certificates of deposit in other banks 3,430 3,430 4,165
Investment securities available for sale 52,691 36,461 31,769
Investment securities held to maturity 58,429 59,624 62,095
Federal Home Loan Bank stock, at cost 1,506 1,721 1,406
Loans, less unearned income and discount 227,273 218,688 219,385
Allowance for loan losses (3,127) (3,078) (3,049)
Net loans 224,146 215,610 216,336
Premises and equipment 11,702 10,336 10,176
Foreclosed assets, net 438 406 1,069
Intangible assets 74 111 219
Bank owned life insurance 5,030 4,980 4,890
Other assets 4,912 5,846 5,700
Total assets $ 375,578 $ 373,895 $ 351,370
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
NOW accounts $ 24,284 $ 23,088 $ 20,947
Money market 96,527 89,934 87,320
Savings 30,225 28,792 29,180
Certificates of deposit $100,000 and over 29,892 36,956 32,378
Other time accounts 46,642 49,836 52,202
Total interest-bearing deposits 227,570 228,606 222,027
Noninterest-bearing deposits 86,248 81,829 74,368
Total deposits 313,818 310,435 296,395
Other borrowings 8,800 11,800 12,000
Long-term debt 17,200 17,200 10,000
Accounts payable and accrued liabilities 2,602 3,040 2,772
Total liabilities 342,420 342,475 321,167
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 23,957 22,927 21,600
Accumulated other comprehensive income (680) (1,388) (1,278)
Total 59,272 57,534 56,317
Treasury stock - at cost (**) (26,114) (26,114) (26,114)
Total shareholders' equity 33,158 31,420 30,203
Total liabilities and shareholders' equity $ 375,578 $ 373,895 $ 351,370
* 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 For the Six Months
Ended June 30, Ended June 30,
Interest income: 2014* 2013* 2014* 2013*
Interest and fees on loans $3,058 $3,034 $6,007 $5,953
Interest and dividend on securities available for sale 292 170 512 332
Interest on securities held to maturity 341 365 683 731
Dividends on Federal Home Loan Bank stock 13 8 25 16
Interest on deposits in banks 13 14 34 37
Interest on certificates of deposit in other banks 9 11 19 21
Total interest income 3,726 3,602 7,280 7,090
Interest expense:
Interest on deposits 192 216 388 460
Interest on other borrowings 38 80 140 94
Interest on long-term debt 104 109 207 283
Total interest expense 334 405 735 837
Net interest income 3,392 3,197 6,545 6,253
Provision for loan losses 75 105 180 210
Net interest income after provision for losses on loans 3,317 3,091 6,365 6,043
Noninterest income:
Service charges on deposit accounts 331 287 656 586
Income from trust services 58 53 113 104
Income from retail brokerage services 99 91 191 167
Income from insurance services 347 312 708 671
Income from mortgage banking services 211 237 346 498
Net gain (loss) on the sale or disposition of assets 20 (3) 20 (57)
Net gain on the sale of securities 0 0 154 0
Other income 180 172 400 386
Total noninterest income 1,246 1,149 2,588 2,355
Noninterest expense:
Salary and employee benefits 2,071 2,074 4,139 4,177
Occupancy expense 257 253 510 506
Equipment expense 215 229 432 461
Data processing expense 284 272 558 548
Amortization of intangible assets 4 54 37 108
Other operating expense 799 746 1,457 1,377
Total noninterest expense 3,630 3,628 7,133 7,177
Income before income tax expense 933 612 1,820 1,221
Provision for income taxes 196 39 382 81
Net income $737 $574 $1,438 $1,140
Net income per share, basic $0.28 $0.23 $0.56 $0.45
Net income per share, diluted $0.28 $0.23 $0.56 $0.45
Dividends paid per share $0.08 $0.04 $0.16 $0.08
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 June 30 2014 2013
Assets $375,578 $351,370
Loans, less unearned income & discount $227,273 $219,385
Deposits $313,818 $296,395
Shareholders' equity $33,158 $30,203
Three Months Ended June 30, Six Months Ended June 30,
2014 2013 2014 2013
Performance Data & Ratios
Net income $737 $574 $1,438 $1,140
Earnings per share, basic $0.28 $0.23 $0.56 $0.45
Earnings per share, diluted $0.28 $0.23 $0.56 $0.45
Dividends paid per share $0.08 $0.04 $0.16 $0.08
Return on assets 0.77% 0.64% 0.74% 0.63%
Return on equity 8.95% 7.47% 8.83% 7.43%
Net interest margin (tax equivalent) 4.02% 4.10% 3.90% 4.03%
Dividend payout ratio 27.66% 17.76% 14.17% 17.88%
Efficiency ratio 75.42% 80.12% 75.20% 80.03%
Asset Quality Data & Ratios
Total nonperforming loans $104 $749 $104 $749
Total nonperforming assets $542 $1,993 $542 $1,993
Net loan charge offs $22 $0 $131 $6
Reserve for loan losses to total loans 1.38% 1.39% 1.38% 1.39%
Nonperforming loans/total loans 0.05% 0.34% 0.05% 0.34%
Nonperforming assets/total assets 0.14% 0.57% 0.14% 0.57%
Net charge offs / average loans 0.04% 0.00% 0.24% 0.01%
Capital Ratios
Average common equity to average total assets 8.56% 8.54% 8.43% 8.44%
Tier 1 capital ratio 13.87% 13.44% 13.87% 13.44%
Tier 1 leverage ratio 8.78% 8.69% 8.78% 8.69%
Total risk based capital ratio 15.12% 14.73% 15.12% 14.73%
Book value per share $13.01 $11.85 $13.01 $11.85
Tangible book value per share $12.98 $11.77 $12.98 $11.77
Quarterly 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
Averages 2014 2014 2013 2013 2013
Assets $384,745 $387,889 $374,542 $366,206 $359,767
Loans, less unearned income & discount $223,348 $219,971 $222,723 $221,767 $212,274
Deposits $326,773 $322,888 $310,406 $304,131 $303,995
Equity $32,926 $32,184 $31,436 $30,639 $30,723
Return on assets 0.77% 0.72% 1.05% 0.71% 0.64%
Return on equity 8.95% 8.71% 12.50% 8.49% 7.47%
Net income $737 $701 $982 $651 $574
Net income per share, basic $0.28 $0.28 $0.39 $0.25 $0.23
Net income per share, diluted $0.28 $0.28 $0.39 $0.25 $0.23
Dividends paid per share $0.08 $0.08 $0.08 $0.04 $0.04

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

Source:Southwest Georgia Financial Corporation