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Southwest Georgia Financial Corporation Reports 17% Increase in Net Income for Second Quarter 2015

MOULTRIE, Ga., July 16, 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 second quarter ended June 30, 2015.

Second Quarter and Six-Month Income Highlights

  • Net income increased 17% to $865 thousand in the second quarter of 2015, or $0.34 per diluted share, from $737 thousand, or $0.28 per diluted share, in the second quarter of 2014.
  • For the six months ended June 30, 2015, net income was $1.7 million, or $0.66 per diluted share, a 16% increase from $1.4 million, or $0.56 per diluted share, for the same period in the prior year.
  • Net interest income grew 5.4% and 6.3% in the second quarter and year-to-date period, respectively, over the comparable periods of 2014, due to increased revenue from higher loan volumes.
  • Noninterest income decreased $201 thousand to $1.0 million for the second quarter of 2015, due to a $133 thousand decline in mortgage banking fees and decreased service charges on deposit accounts of $67 thousand. Year-to-date noninterest income was down 14.8%, due to these decreases as well as less net gain on sale of securities that benefitted the prior year.
  • Prudent cost control drove noninterest expense down 3.8% and 2.1% for the second quarter and year-to-date period, respectively.

Balance Sheet Trends and Asset Quality

  • Total assets at June 30, 2015 were $391.0 million, an increase of 4.1% from June 30, 2014.
  • Total loans were $236.8 million, an increase of $9.5 million, or 4.2%, over the same period last year.
  • Total deposits grew $8.0 million to $321.8 million at June 30, 2015 from the second quarter of 2014 on higher noninterest-bearing and money market accounts.
  • Non-performing asset ratio improved 8 basis points to 0.30% at June 30, 2015.

DeWitt Drew, President and CEO, commented, "We continue to make excellent progress in growing the business and earnings while maintaining a strong balance sheet and superior credit metrics. Notably, net income increased by double digits for the quarter and year-to-date period, and key profitability measures of return on assets and return on equity were up for both periods. Our positive results, in a very competitive banking market and challenging rate environment, are being driven by core deposit and quality loan growth, favorable changes in our earning asset mix, and the contributions of our talented and dedicated staff."

Dividends

In June 2015, the Corporation paid a quarterly cash dividend of $0.10 per common share. Southwest Georgia Financial Corporation or its predecessor, Southwest Georgia Bank, has paid cash dividends for 87 consecutive years.

About Southwest Georgia Financial Corporation

Southwest Georgia Financial Corporation is a state-chartered bank holding company with approximately $391 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, and commercial and individual insurance products. Insurance products and advice are provided by Southwest Georgia Insurance Services, which is located in Colquitt County.

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, December 31, June 30,
2015 2014 2014
ASSETS
Cash and due from banks $ 7,178 $ 6,783 $ 8,310
Interest-bearing deposits in banks 13,863 5,776 4,910
Certificates of deposit in other banks 1,470 1,470 3,430
Investment securities available for sale 49,313 53,838 52,691
Investment securities held to maturity 62,373 61,588 58,429
Federal Home Loan Bank stock, at cost 1,662 1,560 1,506
Loans, less unearned income and discount 236,762 224,400 227,273
Allowance for loan losses (3,180) (3,114) (3,127)
Net loans 233,582 221,286 224,146
Premises and equipment 11,541 11,756 11,702
Foreclosed assets, net 102 274 438
Intangible assets 58 66 74
Bank owned life insurance 5,157 5,104 5,030
Other assets 4,696 4,779 4,912
Total assets $ 390,995 $ 374,280 $ 375,578
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
NOW accounts $ 24,814 $ 22,890 $ 24,284
Money market 99,243 99,918 96,527
Savings 29,146 28,156 30,225
Certificates of deposit $100,000 and over 28,998 31,367 29,892
Other time accounts 49,375 46,300 46,642
Total interest-bearing deposits 231,576 228,631 227,570
Noninterest-bearing deposits 90,251 81,343 86,248
Total deposits 321,827 309,974 313,818
Other borrowings 9,133 5,133 8,800
Long-term debt 22,067 22,067 17,200
Accounts payable and accrued liabilities 2,436 2,771 2,602
Total liabilities 355,463 339,945 342,420
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 26,179 25,015 23,957
Accumulated other comprehensive income (528) (561) (680)
Total 61,646 60,449 59,272
Treasury stock - at cost (**) (26,114) (26,114) (26,114)
Total shareholders' equity 35,532 34,335 33,158
Total liabilities and shareholders' equity $ 390,995 $ 374,280 $ 375,578
* 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: 2015* 2014* 2015* 2014*
Interest and fees on loans $ 3,208 $ 3,058 $ 6,209 $ 6,007
Interest and dividend on securities available for sale 289 292 588 512
Interest on securities held to maturity 368 341 726 683
Dividends on Federal Home Loan Bank stock 17 13 36 25
Interest on deposits in banks 13 13 27 34
Interest on certificates of deposit in other banks 3 9 7 19
Total interest income 3,898 3,726 7,593 7,280
Interest expense:
Interest on deposits 196 192 386 388
Interest on other borrowings 15 38 29 140
Interest on long-term debt 113 104 224 207
Total interest expense 324 334 639 735
Net interest income 3,574 3,392 6,954 6,545
Provision for loan losses 45 75 90 180
Net interest income after provision for losses on loans 3,529 3,317 6,864 6,365
Noninterest income:
Service charges on deposit accounts 264 331 556 656
Income from trust services 68 58 138 113
Income from retail brokerage services 104 99 198 191
Income from insurance services 347 347 736 708
Income from mortgage banking services 78 211 156 346
Net gain (loss) on the sale or disposition of assets 3 20 22 20
Net gain on the sale of securities 4 0 4 154
Other income 177 180 396 400
Total noninterest income 1,045 1,246 2,206 2,588
Noninterest expense:
Salary and employee benefits 1,963 2,071 3,972 4,139
Occupancy expense 276 257 556 510
Equipment expense 220 215 438 432
Data processing expense 314 284 607 558
Amortization of intangible assets 4 4 8 37
Other operating expense 716 799 1,399 1,457
Total noninterest expense 3,493 3,630 6,980 7,133
Income before income tax expense 1,081 933 2,090 1,820
Provision for income taxes 216 196 417 382
Net income $ 865 $ 737 $ 1,673 $ 1,438
Net income per share, basic $ 0.34 $ 0.28 $ 0.66 $ 0.56
Net income per share, diluted $ 0.34 $ 0.28 $ 0.66 $ 0.56
Dividends paid per share $ 0.10 $ 0.08 $ 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 June 30 2015 2014
Assets $ 390,995 $ 375,578
Loans, less unearned income & discount $ 236,762 $ 227,273
Deposits $ 321,827 $ 313,818
Shareholders' equity $ 35,532 $ 33,158
Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 2014
Performance Data & Ratios
Net income $ 865 $ 737 $ 1,673 $ 1,438
Earnings per share, basic $ 0.34 $ 0.28 $ 0.66 $ 0.56
Earnings per share, diluted $ 0.34 $ 0.28 $ 0.66 $ 0.56
Dividends paid per share $ 0.10 $ 0.08 $ 0.20 $ 0.16
Return on assets 0.87% 0.77% 0.85% 0.74%
Return on equity 9.69% 8.95% 9.45% 8.83%
Net interest margin (tax equivalent) 4.12% 4.02% 4.04% 3.90%
Dividend payout ratio 29.47% 27.66% 30.45% 28.35%
Efficiency ratio 72.29% 75.42% 72.92% 75.20%
Asset Quality Data & Ratios
Total nonperforming loans $ 1,058 $ 1,006 $ 1,058 $ 1,006
Total nonperforming assets $ 1,167 $ 1,444 $ 1,167 $ 1,444
Net loan charge offs $ (1) $ 22 $ 24 $ 131
Reserve for loan losses to total loans 1.34% 1.38% 1.34% 1.38%
Nonperforming loans/total loans 0.45% 0.44% 0.45% 0.44%
Nonperforming assets/total assets 0.30% 0.38% 0.30% 0.38%
Net charge offs / average loans 0.00% 0.04% 0.02% 0.24%
Capital Ratios
Average common equity to average total assets 8.99% 8.56% 8.94% 8.43%
Common equity Tier 1 capital ratio 14.26% 13.87% 14.26% 13.87%
Tier 1 capital ratio 14.26% 13.87% 14.26% 13.87%
Tier 1 leverage ratio 9.08% 8.78% 9.08% 8.78%
Total risk based capital ratio 15.51% 15.12% 15.51% 15.12%
Book value per share $ 13.95 $ 13.01 $ 13.95 $ 13.01
Tangible book value per share $ 13.92 $ 12.98 $ 13.92 $ 12.98
Quarterly 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
Averages 2015 2015 2014 2014 2014
Assets $ 396,762 $ 395,220 $ 381,239 $ 374,509 $ 384,745
Loans, less unearned income & discount $ 233,464 $ 225,665 $ 223,906 $ 225,934 $ 223,348
Deposits $ 329,869 $ 330,394 $ 313,595 $ 309,953 $ 326,773
Equity $ 35,687 $ 35,134 $ 34,186 $ 33,579 $ 32,926
Return on assets 0.87% 0.82% 0.69% 0.86% 0.77%
Return on equity 9.69% 9.21% 7.75% 9.57% 8.95%
Net income $ 865 $ 809 $ 662 $ 804 $ 737
Net income per share, basic $ 0.34 $ 0.32 $ 0.26 $ 0.32 $ 0.28
Net income per share, diluted $ 0.34 $ 0.32 $ 0.26 $ 0.32 $ 0.28
Dividends paid per share $ 0.10 $ 0.10 $ 0.08 $ 0.08 $ 0.08

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

Source:Southwest Georgia Financial Corporation