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Southwest Georgia Financial Corporation Reports 30% Net Income Growth for 2016 First Quarter

MOULTRIE, Ga., April 22, 2016 (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 first quarter ended March 31, 2016.

First Quarter Income Highlights

  • Net income increased 30% to $1.0 million, or $0.41 per diluted share, from $809 thousand, or $0.32 per diluted share, in the first quarter of 2016.
  • Net interest income improved over 15% to $3.9 million when compared with last year’s first quarter. The increase was due primarily to higher interest income and fees on loans related to a $37.1 million growth in average loans. Net interest margin increased to 4.29%, up 33 basis points from the 2015 first quarter.
  • Noninterest expense increased 7% to $3.7 million as personnel and data processing expenses grew primarily due to continued Valdosta and Tifton expansion.

Balance Sheet Trends and Asset Quality

  • Total assets at March 31, 2016 were $409.1 million, up from $399.9 million at March 31, 2015. The change in asset mix reflects higher loan balances and decreased overnight balances and investment securities.
  • Total loans increased $40.6 million, or 18%, to $270.8 million from the first quarter last year.
  • Quarterly average deposits were up $8 million to $338.4 million, nearly 3% over first quarter last year. End of the period total deposits were $331.4 million at March 31, 2016, down $3.4 million from the first quarter of 2015. Noninterest-bearing deposits increased $3.8 million to $101.2 million quarter-over-quarter.
  • Nonperforming loans were $5 thousand at the end of the first quarter of 2016, down $528 thousand from a year ago. Net charge-offs (recoveries) to average loans outstanding ratio improved to (0.01)% for the quarter ended March 31, 2016, with the level of allowance for loan losses remaining flat.

Capital Management

  • Tangible book value per share at March 31, 2016, was $14.71, up from $13.85 at March 31, 2015.

“We are off to a very strong start in 2016 with 30% growth in net income due primarily to an 18% increase in total loans,” commented DeWitt Drew, President and CEO. “Notably, even with strong loan growth over the last year our credit quality remains exceptionally strong with nonperforming loans close to zero at quarter end. While deposit growth is currently trailing loan growth, our mix remains favorable with non-interest bearing deposits currently making up 30% of total deposits, and 55% of deposits in transaction accounts. Our focus on growing higher yielding commercial loans and lower cost core deposits is driving expansion of our net interest margin which was up over 30 basis points from last year.”

Mr. Drew added, “We are continuing to invest in growing our business. Expenses increased in the quarter as we added staff in the Valdosta market and continue our expansion into the Tifton market. The results from our entry into Valdosta have been very favorable with a significant portion of the loan growth in the last year coming from this market.”

Dividends

In March 2016, 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 88 consecutive years.

About Southwest Georgia Financial Corporation

Southwest Georgia Financial Corporation is a state-chartered bank holding company with approximately $409 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 and a loan production office located in Tift 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)
March 31, December 31, March 31,
2016 2015 2015
ASSETS
Cash and due from banks$ 7,742 $ 6,157 $ 7,712
Interest-bearing deposits in banks 9,620 24,923 21,942
Certificates of deposit in other banks 0 245 1,470
Investment securities available for sale 41,255 51,476 55,313
Investment securities held to maturity 59,373 60,889 63,397
Federal Home Loan Bank stock, at cost 1,905 1,869 1,560
Loans, less unearned income and discount 270,768 250,786 230,160
Allowance for loan losses (3,066) (3,032) (3,134)
Net loans 267,702 247,754 227,026
Premises and equipment 11,145 11,158 11,653
Foreclosed assets, net 82 82 186
Intangible assets 47 51 63
Bank owned life insurance 5,263 5,231 5,120
Other assets 4,955 5,020 4,452
Total assets$ 409,089 $ 414,855 $ 399,894
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
NOW accounts$ 28,153 $ 25,383 $ 28,690
Money market 97,045 108,226 101,571
Savings 29,398 27,721 29,385
Certificates of deposit $100,000 and over 26,553 25,189 30,923
Other time accounts 49,068 50,728 46,814
Total interest-bearing deposits 230,217 237,247 237,383
Noninterest-bearing deposits 101,188 101,769 97,400
Total deposits 331,405 339,016 334,783
Other borrowings 7,590 7,591 5,133
Long-term debt 28,476 28,476 22,067
Accounts payable and accrued liabilities 4,097 3,675 2,574
Total liabilities 371,568 378,758 364,557
Shareholders' equity:
Common stock - par value $1; 5,000,000 shares
authorized; 4,293,835 shares issued (*) 4,294 4,294 4,294
Additional paid-in capital 31,701 31,701 31,701
Retained earnings 28,163 27,369 25,569
Accumulated other comprehensive income (523) (1,153) (113)
Total 63,635 62,211 61,451
Treasury stock - at cost (**) (26,114) (26,114) (26,114)
Total shareholders' equity 37,521 36,097 35,337
Total liabilities and shareholders' equity$ 409,089 $ 414,855 $ 399,894
* 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 March 31,
Interest income: 2016* 2015*
Interest and fees on loans$ 3,575 $ 3,002
Interest and dividend on securities available for sale 300 300
Interest on securities held to maturity 350 358
Dividends on Federal Home Loan Bank stock 22 19
Interest on deposits in banks 22 14
Interest on certificates of deposit in other banks 0 3
Total interest income 4,269 3,696
Interest expense:
Interest on deposits 208 190
Interest on other borrowings 23 14
Interest on long-term debt 144 112
Total interest expense 375 316
Net interest income 3,894 3,380
Provision for loan losses 30 45
Net interest income after provision for losses on loans 3,864 3,335
Noninterest income:
Service charges on deposit accounts 276 292
Income from trust services 52 70
Income from retail brokerage services 80 94
Income from insurance services 472 389
Income from mortgage banking services 91 78
Net gain on the sale or disposition of assets 0 19
Net gain on the sale of securities 28 0
Other income 227 219
Total noninterest income 1,226 1,161
Noninterest expense:
Salary and employee benefits 2,176 2,010
Occupancy expense 288 280
Equipment expense 222 218
Data processing expense 343 293
Amortization of intangible assets 4 4
Other operating expense 695 682
Total noninterest expense 3,728 3,487
Income before income tax expense 1,362 1,009
Provision for income taxes 314 200
Net income$ 1,048 $ 809
Net income per share, basic$ 0.41 $ 0.32
Net income per share, diluted$ 0.41 $ 0.32
Dividends paid per share$ 0.10 $ 0.10
Basic weighted average shares outstanding 2,547,837 2,547,837
Diluted weighted average shares outstanding 2,547,837 2,547,837


SOUTHWEST GEORGIA FINANCIAL CORPORATION
Financial Highlights
(Dollars in thousands except per share data)
2016 2015
Performance Data & Ratios
Net income$ 1,048 $ 809
Earnings per share, basic$ 0.41 $ 0.32
Earnings per share, diluted$ 0.41 $ 0.32
Dividends paid per share$ 0.10 $ 0.10
Return on assets 1.01% 0.82%
Return on equity 11.30% 9.21%
Net interest margin (tax equivalent) 4.29% 3.96%
Dividend payout ratio 24.32% 31.50%
Efficiency ratio 69.86% 73.57%
Asset Quality Data & Ratios
Total nonperforming loans$ 5 $ 528
Total nonperforming assets$ 87 $ 721
Net loan charge offs (recoveries)$ (4) $ 25
Reserve for loan losses to total loans 1.13% 1.36%
Nonperforming loans/total loans 0.00% 0.23%
Nonperforming assets/total assets 0.02% 0.18%
Net charge offs (recoveries)/ average loans (0.01)% 0.04%
Capital Ratios
Average common equity to average total assets 8.94% 8.89%
Common equity Tier 1 capital ratio 13.71% 14.27%
Tier 1 capital ratio 13.71% 14.27%
Tier 1 leverage ratio 9.16% 8.96%
Total risk based capital ratio 14.82% 15.52%
Book value per share$ 14.73 $ 13.87
Tangible book value per share$ 14.71 $ 13.85

Quarterly1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
Averages 2016 2015 2015 2015 2015
Assets$415,168 $407,924 $394,441 $396,762 $395,220
Loans, less unearned income & discount $262,715 $246,353 $238,023 $233,464 $225,665
Deposits$338,399 $337,194 $327,072 $329,869 $330,394
Equity$ 37,097 $ 36,833 $ 36,154 $ 35,687 $ 35,134
Return on assets 1.01% 0.83% 0.87% 0.87% 0.82%
Return on equity 11.30% 9.16% 9.48% 9.69% 9.21%
Net income$ 1,048 $ 843 $ 857 $ 865 $ 809
Net income per share, basic$ 0.41 $ 0.33 $ 0.33 $ 0.34 $ 0.32
Net income per share, diluted$ 0.41 $ 0.33 $ 0.33 $ 0.34 $ 0.32
Dividends paid per share$ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10


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