Southwest Georgia Financial Corporation Reports 17% Increase in Net Income for the 2016 Second Quarter

MOULTRIE, Ga., July 21, 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 second quarter ended June 30, 2016.

Second Quarter and Six-Month Income Highlights

  • Second quarter net income increased 17% to $1.0 million, or $0.40 per diluted share, from $865 thousand, or $0.34 per diluted share. Net interest income improved 9% to $3.9 million when compared with last year’s second quarter due primarily to higher interest income and fees on loans.
  • For the six months ended June 30, 2016, net income was $2.1 million, or $0.81 per diluted share, up 23% from $1.7 million, or $0.66 per diluted share, for the same period in 2015. The increase was driven by continued loan growth and pricing discipline on deposits.

Balance Sheet Trends and Asset Quality

  • Total assets at June 30, 2016, were $422.5 million, up 8% from $391.0 million at June 30, 2015. The increase in assets and change in asset mix reflects loan growth that was funded by increased deposits, reallocated funds from the investment portfolio, and an increase in Federal Home Loan Bank borrowings.
  • Total loans increased $51.3 million, or 22%, to $288.0 million from the second quarter 2015 and were up over 14% from year-end 2015.
  • Total deposits were up $22.2 million, or 7%, to $344.0 million at June 30, 2016, compared with the prior year. While deposit growth lagged loan growth, noninterest-bearing deposits increased over 21% to $109.5 million year-over-year.
  • Nonperforming loans were $665 thousand at the end of the second quarter, down $393 thousand from a year ago.

Capital Management

  • Tangible book value per share at June 30, 2016, was $15.11, up from $13.92 at June 30, 2015.

“Investments in expanding our footprint and deepening relationships in the communities we serve are paying off. Loans were up over $50 million in the past year and net income increased measurably for the second quarter and first half of 2016,” commented DeWitt Drew, President and CEO. “The results from our expansion in the Valdosta market are very favorable with a significant portion of the loan growth coming from this market. We are also seeing favorable results from our recent entry into the Tifton market. Looking to the rest of 2016, we are in an excellent position to continue to build on our strong franchise and win greater customer share in our markets.”

Dividends

In June 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 $422 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)
June 30, December 31, June 30,
2016 2015 2015
ASSETS
Cash and due from banks$ 5,835 $ 6,157 $ 7,178
Interest-bearing deposits in banks 7,687 24,923 13,863
Certificates of deposit in other banks 0 245 1,470
Investment securities available for sale 43,055 51,476 49,313
Investment securities held to maturity 57,701 60,889 62,373
Federal Home Loan Bank stock, at cost 1,905 1,869 1,662
Loans, less unearned income and discount 288,030 250,786 236,762
Allowance for loan losses (3,113) (3,032) (3,180)
Net loans 284,917 247,754 233,582
Premises and equipment 11,080 11,158 11,541
Foreclosed assets, net 82 82 102
Intangible assets 43 51 58
Bank owned life insurance 5,295 5,231 5,157
Other assets 4,865 5,020 4,696
Total assets$ 422,465 $ 414,855 $ 390,995
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
NOW accounts$ 28,384 $ 25,383 $ 24,814
Money market 94,093 108,226 99,243
Savings 29,650 27,721 29,146
Certificates of deposit $100,000 and over 33,568 25,189 28,998
Other time accounts 48,817 50,728 49,375
Total interest-bearing deposits 234,512 237,247 231,576
Noninterest-bearing deposits 109,504 101,769 90,251
Total deposits 344,016 339,016 321,827
Other borrowings 7,591 7,591 9,133
Long-term debt 28,476 28,476 22,067
Accounts payable and accrued liabilities 3,839 3,675 2,436
Total liabilities 383,922 378,758 355,463
Shareholders' equity:
Common stock - par value $1; 5,000,000 shares
authorized; 4,293,835 shares issued (*) 4,294 4,294 4,294
Additional paid-in capital 31,701 31,701 31,701
Retained earnings 28,919 27,369 26,179
Accumulated other comprehensive income (257) (1,153) (528)
Total 64,657 62,211 61,646
Treasury stock - at cost (**) (26,114) (26,114) (26,114)
Total shareholders' equity 38,543 36,097 35,532
Total liabilities and shareholders' equity$ 422,465 $ 414,855 $ 390,995
* 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: 2016* 2015* 2016* 2015*
Interest and fees on loans$ 3,657 $ 3,208 $ 7,232 $ 6,209
Interest and dividend on securities available for sale 250 289 550 588
Interest on securities held to maturity 340 368 689 726
Dividends on Federal Home Loan Bank stock 23 17 46 36
Interest on deposits in banks 17 13 39 27
Interest on certificates of deposit in other banks 0 3 0 7
Total interest income 4,287 3,898 8,556 7,593
Interest expense:
Interest on deposits 226 196 433 386
Interest on other borrowings 24 15 47 29
Interest on long-term debt 144 113 289 224
Total interest expense 394 324 769 639
Net interest income 3,893 3,574 7,787 6,954
Provision for loan losses 40 45 70 90
Net interest income after provision for losses on loans 3,853 3,529 7,717 6,864
Noninterest income:
Service charges on deposit accounts 255 264 532 556
Income from trust services 51 68 103 138
Income from retail brokerage services 88 104 168 198
Income from insurance services 342 347 814 736
Income from mortgage banking services 92 78 183 156
Net gain (loss) on the sale or disposition of assets (1) 3 (1) 22
Net gain on the sale of securities 84 4 112 4
Other income 186 177 412 396
Total noninterest income 1,097 1,045 2,323 2,206
Noninterest expense:
Salary and employee benefits 2,178 1,963 4,354 3,972
Occupancy expense 279 276 567 556
Equipment expense 228 220 450 438
Data processing expense 311 314 654 607
Amortization of intangible assets 4 4 8 8
Other operating expense 680 716 1,375 1,399
Total noninterest expense 3,680 3,493 7,408 6,980
Income before income tax expense 1,270 1,081 2,632 2,090
Provision for income taxes 259 216 573 417
Net income$ 1,011 $ 865 $ 2,059 $ 1,673
Net income per share, basic$ 0.40 $ 0.34 $ 0.81 $ 0.66
Net income per share, diluted$ 0.40 $ 0.34 $ 0.81 $ 0.66
Dividends paid per share$ 0.10 $ 0.10 $ 0.20 $ 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 June 30 2016 2015
Assets $422,465 $390,995
Loans, less unearned income & discount $288,030 $236,762
Deposits $344,016 $321,827
Shareholders' equity $ 38,543 $ 35,532
Three Months Ended June 30, Six Months Ended June 30,
2016 2015 2016 2015
Performance Data & Ratios
Net income$ 1,011 $ 865 $ 2,059 $ 1,673
Earnings per share, basic$ 0.40 $ 0.34 $ 0.81 $ 0.66
Earnings per share, diluted$ 0.40 $ 0.34 $ 0.81 $ 0.66
Dividends paid per share$ 0.10 $ 0.10 $ 0.20 $ 0.20
Return on assets 0.96% 0.87% 0.99% 0.85%
Return on equity 10.63% 9.69% 10.96% 9.45%
Net interest margin (tax equivalent) 4.21% 4.12% 4.25% 4.04%
Dividend payout ratio 25.19% 29.47% 24.75% 30.45%
Efficiency ratio 70.69% 72.29% 70.27% 72.92%
Asset Quality Data & Ratios
Total nonperforming loans$ 665 $ 1,058 $ 665 $ 1,058
Total nonperforming assets$ 747 $ 1,167 $ 747 $ 1,167
Net loan charge offs$ (7) $ (1) $ (10) $ 24
Reserve for loan losses to total loans 1.08% 1.34% 1.08% 1.34%
Nonperforming loans/total loans 0.23% 0.45% 0.23% 0.45%
Nonperforming assets/total assets 0.18% 0.30% 0.18% 0.30%
Net charge offs / average loans (0.01)% 0.00% (0.01)% 0.02%
Capital Ratios
Average common equity to average total assets 9.05% 8.99% 8.99% 8.94%
Common equity Tier 1 capital ratio 13.28% 14.26% 13.28% 14.26%
Tier 1 capital ratio 13.28% 14.26% 13.28% 14.26%
Tier 1 leverage ratio 9.22% 9.08% 9.22% 9.08%
Total risk based capital ratio 14.35% 15.51% 14.35% 15.51%
Book value per share$ 15.13 $ 13.95 $ 15.13 $ 13.95
Tangible book value per share$ 15.11 $ 13.92 $ 15.11 $ 13.92

Quarterly2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
Averages 2016 2016 2015 2015 2015
Assets$ 420,685 $415,168 $407,924 $394,441 $ 396,762
Loans, less unearned income & discount$ 279,543 $262,715 $246,353 $238,023 $ 233,464
Deposits$ 341,569 $338,399 $337,194 $327,072 $ 329,869
Equity$ 38,080 $ 37,097 $ 36,833 $ 36,154 $ 35,687
Return on assets 0.96% 1.01% 0.83% 0.87% 0.87%
Return on equity 10.63% 11.30% 9.16% 9.48% 9.69%
Net income$ 1,011 $ 1,048 $ 843 $ 857 $ 865
Net income per share, basic$ 0.40 $ 0.41 $ 0.33 $ 0.33 $ 0.34
Net income per share, diluted$ 0.40 $ 0.41 $ 0.33 $ 0.33 $ 0.34
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