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Southwest Georgia Financial Corporation Reports Net Income Growth for 2014

MOULTRIE, Ga., Jan. 26, 2015 (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, 2014.

Income Highlights

  • For the year ended December 31, 2014, net income was $2.9 million, or $1.14 per diluted share, a 4.7% increase when compared with $2.8 million, or $1.09 per diluted share, for the 2013 period. Earnings growth was driven by higher net interest income resulting from a change in asset mix.
  • Annual net interest income was $13.4 million at year-end 2014, up $545 thousand over the prior-year period. Higher net interest income was partially offset by lower mortgage banking revenue as Empire, the Corporation's commercial mortgage banking subsidiary, continued to wind down.
  • Net income was $662 thousand in the 2014 fourth quarter, or $0.26 per diluted share, compared with $982 thousand, or $0.39 per diluted share, in the fourth quarter of 2013. This difference was mostly due to a $312 thousand gain on the sale of securities in the fourth quarter of 2013.

Balance Sheet Trends and Asset Quality

  • Total assets at December 31, 2014, were consistent at $374 million compared with December 31, 2013. Average assets, however, were up $16 million over the comparable 2013 period.
  • Total loans increased $5.7 million, or 2.6%, to $224.4 million from the same period last year. Average loans grew $8.3 million compared with the year 2013, despite $10.2 million in loan participations that were paid off in 2014. The growth in loans was funded by increases in average noninterest-bearing and money market deposits.
  • Total deposits were $310 million at December 31, 2014, consistent with the end of 2013. Average core deposits were up $18.8 million compared with December 31, 2013.
  • Asset quality continued to remain strong as the non-performing asset ratio was 0.28% at December 31, 2014, an 8 basis point improvement from 0.36% at the end of 2013.

Capital Management

  • The Corporation has a Total Risk-Based Capital Ratio of 15.70% and a Leverage Capital Ratio of 9.14%, up from 15.44% and 8.73%, respectively, compared with 2013. Both ratios are measurably above the federal "well capitalized" standard.
  • Tangible book value per share at December 31, 2014, was $13.45, up from $12.29 at the end of 2013.

DeWitt Drew, President and CEO commented, "In 2014, we demonstrated the strength of our strategy as we increased our annual dividend 60% and generated healthy net income growth while maintaining strong asset quality metrics. Although loan growth has slowed due to perceived lower levels of economic activity and increased competition in our trade area, we remain focused on our strategy to grow low cost core funding to support lending within our local markets."

Dividends

In December 2014, the Corporation paid a fourth quarter cash dividend of $0.08 per common share. The Corporation paid dividends of $0.32 per common share in 2014, a 60% increase over the $0.20 per common share paid in 2013. 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 $374 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, 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)
December 31,
2014
(Audited)
December 31,
2013
(Audited)
December 31,
2012
ASSETS
Cash and due from banks $ 6,783 $ 7,074 $ 8,646
Interest-bearing deposits in banks 5,776 28,296 27,935
Certificates of deposit in other banks 1,470 3,430 3,920
Investment securities available for sale 53,838 36,461 21,672
Investment securities held to maturity 61,588 59,624 59,863
Federal Home Loan Bank stock, at cost 1,560 1,721 1,448
Loans, less unearned income and discount 224,400 218,688 204,137
Allowance for loan losses (3,114) (3,078) (2,845)
Net loans 221,286 215,610 201,292
Premises and equipment 11,756 10,336 10,149
Foreclosed assets, net 274 406 1,690
Intangible assets 66 111 327
Bank owned life insurance 5,104 4,980 4,767
Other assets 4,779 5,846 5,472
Total assets $ 374,280 $ 373,895 $ 347,181
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
NOW accounts $ 22,890 $ 23,088 $ 28,881
Money market 99,918 89,934 77,133
Savings 28,156 28,792 25,988
Certificates of deposit $100,000 and over 31,367 36,956 36,591
Other time accounts 46,300 49,836 55,098
Total interest-bearing deposits 228,631 228,606 223,691
Noninterest-bearing deposits 81,343 81,829 68,071
Total deposits 309,974 310,435 291,762
Other borrowings 5,133 11,800 2,000
Long-term debt 22,067 17,200 20,000
Accounts payable and accrued liabilities 2,771 3,040 3,544
Total liabilities 339,945 342,475 317,306
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 25,015 22,927 20,664
Accumulated other comprehensive income (561) (1,388) (670)
Total 60,449 57,534 55,989
Treasury stock - at cost (**) (26,114) (26,114) (26,114)
Total shareholders' equity 34,335 31,420 29,875
Total liabilities and shareholders' equity $ 374,280 $ 373,895 $ 347,181
* 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 December 31,
For the Twelve Months
Ended December 31,
2014* 2013* 2014* 2013
Interest income:
Interest and fees on loans $ 3,061 $ 3,162 $ 12,135 $ 12,219
Interest and dividend on securities available for sale 280 178 1,069 673
Interest on securities held to maturity 333 357 1,353 1,435
Dividends on Federal Home Loan Bank stock 18 12 70 39
Interest on deposits in banks 12 16 52 66
Interest on certificates of deposit in other banks 6 10 33 43
Total interest income 3,710 3,735 14,712 14,475
Interest expense:
Interest on deposits 184 213 750 882
Interest on other borrowings 16 98 169 295
Interest on long-term debt 114 111 436 486
Total interest expense 314 422 1,355 1,663
Net interest income 3,396 3,313 13,357 12,812
Provision for loan losses 75 105 330 420
Net interest income after provision for losses on loans 3,321 3,208 13,027 12,392
Noninterest income:
Service charges on deposit accounts 312 354 1,275 1,278
Income from trust services 53 63 241 228
Income from retail brokerage services 105 83 376 338
Income from insurance services 332 349 1,324 1,328
Income from mortgage banking services 111 238 645 940
Net gain (loss) on the sale or disposition of assets 32 0 89 (68)
Net gain on the sale of securities 0 312 293 312
Other income 170 175 743 735
Total noninterest income 1,115 1,574 4,986 5,091
Noninterest expense:
Salary and employee benefits 2,086 2,164 8,359 8,455
Occupancy expense 280 252 1,061 1,025
Equipment expense 237 218 896 902
Data processing expense 290 271 1,130 1,097
Amortization of intangible assets 4 54 45 216
Other operating expense 728 638 2,879 2,651
Total noninterest expense 3,625 3,597 14,370 14,346
Income before income tax expense 811 1,185 3,643 3,137
Provision for income taxes 149 203 739 365
Net income $ 662 $ 982 $ 2,904 $ 2,772
Net income per share, basic $ 0.26 $ 0.39 $ 1.14 $ 1.09
Net income per share, diluted $ 0.26 $ 0.39 $ 1.14 $ 1.09
Dividends paid per share $ 0.08 $ 0.08 $ 0.32 $ 0.20
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 2014 2013
Assets $374,280 $373,895
Loans, less unearned income & discount $224,400 $218,688
Deposits $309,974 $310,435
Shareholders' equity $ 34,335 $ 31,420
Three Months Ended December 31, Twelve Months Ended December 31,
2014 2013 2014 2013
Performance Data & Ratios
Net income $ 662 $ 982 $ 2,904 $ 2,772
Earnings per share, basic $ 0.26 $ 0.39 $ 1.14 $ 1.09
Earnings per share, diluted $ 0.26 $ 0.39 $ 1.14 $ 1.09
Dividends paid per share $ 0.08 $ 0.08 $ 0.32 $ 0.20
Return on assets 0.69% 1.05% 0.76% 0.76%
Return on equity 7.75% 12.50% 8.74% 9.02%
Net interest margin (tax equivalent) 4.03% 4.02% 3.99% 4.02%
Dividend payout ratio 30.77% 20.75% 28.08% 18.38%
Efficiency ratio 77.30% 70.91% 75.43% 77.00%
Asset Quality Data & Ratios
Total nonperforming loans $ 786 $ 913 $ 786 $ 913
Total nonperforming assets $ 1,060 $ 1,363 $ 1,060 $ 1,363
Net loan charge offs $ 157 $ 127 $ 293 $ 187
Reserve for loan losses to total loans 1.39% 1.41% 1.39% 1.41%
Nonperforming loans/total loans 0.35% 0.42% 0.35% 0.42%
Nonperforming assets/total assets 0.28% 0.36% 0.28% 0.36%
Net charge offs / average loans 0.28% 0.23% 0.13% 0.09%
Capital Ratios
Average common equity to average total assets 8.97% 8.39% 8.70% 8.41%
Tier 1 capital ratio 14.45% 14.17% 14.45% 14.17%
Tier 1 leverage ratio 9.14% 8.73% 9.14% 8.73%
Total risk based capital ratio 15.70% 15.44% 15.70% 15.44%
Book value per share $ 13.48 $ 12.33 $ 13.48 $ 12.33
Tangible book value per share $ 13.45 $ 12.29 $ 13.45 $ 12.29
Quarterly 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
Averages 2014 2014 2014 2014 2013
Assets $ 381,239 $ 374,509 $ 384,745 $ 387,889 $ 374,542
Loans, less unearned income & discount $ 223,906 $ 225,934 $ 223,348 $ 219,971 $ 222,723
Deposits $ 313,595 $ 309,953 $ 326,773 $ 322,888 $ 310,406
Equity $ 34,186 $ 33,579 $ 32,926 $ 32,184 $ 31,436
Return on assets 0.69% 0.86% 0.77% 0.72% 1.05%
Return on equity 7.75% 9.57% 8.95% 8.71% 12.50%
Net income $ 662 $ 804 $ 737 $ 701 $ 982
Net income per share, basic $ 0.26 $ 0.32 $ 0.28 $ 0.28 $ 0.39
Net income per share, diluted $ 0.26 $ 0.32 $ 0.28 $ 0.28 $ 0.39
Dividends paid per share $ 0.08 $ 0.08 $ 0.08 $ 0.08 $ 0.08

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

Source:Southwest Georgia Financial Corporation