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Southwest Georgia Financial Corporation Reports First Quarter Results

SGB

MOULTRIE, Ga., April 23, 2013 (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, 2013.

First Quarter Income Highlights

  • Net income was $566 thousand in the 2013 first quarter, or $0.22 per diluted share, compared with $571 thousand, or $0.22 per diluted share in the first quarter of 2012.
  • Net interest income grew 8.1% to $3.1 million compared with the first quarter last year due primarily to increased interest and fee income on loans. The Corporation has been able to maintain net interest income in spite of lower margins.
  • Noninterest income decreased $263 thousand to $1.2 million for the first quarter of 2013 driven by a $306 thousand decrease in income from our commercial mortgage banking subsidiary, Empire Financial Services.
  • Noninterest expense grew 2.2% to $3.5 million due primarily to increased employee payroll tax and benefit expenses.

Balance Sheet Trends and Asset Quality

  • Total assets at March 31, 2013 were $366.1 million, an increase of 14.8%, or $47.3 million, from March 31, 2012.
  • Year-over-year asset growth was driven by increases in noninterest-bearing demand deposits, which increased $15.0 million, or 26.1%, as well as low interest-bearing transaction accounts and money market deposit accounts, which increased $35.5 million, or 41.1%.
  • Growth in funding of $48.9 million was employed in a $23.5 million increase in loans, a $12.1 million increase in interest-bearing balances in banks, and a $13.2 million increase in investment securities and certificates of deposit in other banks.

DeWitt Drew, President and CEO commented, "We are encouraged by our extraordinary growth in low cost funding and in our earnings level, even with decreased mortgage banking income. We expect that commercial mortgage servicing income will be low in 2013 due to Empire's loan servicing portfolio decreasing from $700 million at its peak to less than $200 million. We also know that nearly one-third of our deposit growth is in public money that will not be permanent."

Dividends

In March 2013, the Corporation paid a first quarter cash dividend of $0.04 per common share. Southwest Georgia Financial Corporation or its predecessor, Southwest Georgia Bank, has paid cash dividends for 85 consecutive years.

About Southwest Georgia Financial Corporation

Southwest Georgia Financial Corporation is a state-chartered bank holding company with approximately $366 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 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) (Audited) (Unaudited)
March 31, December 31, March 31,
2013 2012 2012
ASSETS
Cash and due from banks $ 6,579 $ 8,646 $ 7,458
Interest-bearing deposits in banks 33,712 27,935 21,584
Certificates of deposit in other banks 4,165 3,920 980
Investment securities available for sale 31,210 21,672 26,581
Investment securities held to maturity 61,968 59,863 56,173
Federal Home Loan Bank stock, at cost 1,406 1,448 1,789
Loans, less unearned income and discount 207,760 204,137 184,307
Allowance for loan losses (2,944) (2,845) (3,244)
Net loans 204,816 201,292 181,063
Premises and equipment 10,177 10,149 10,620
Foreclosed assets, net 1,524 1,690 2,327
Intangible assets 273 327 491
Bank owned life insurance 4,775 4,767 4,635
Other assets 5,445 5,472 5,050
Total assets $ 366,050 $ 347,181 $ 318,751
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
NOW accounts $ 27,716 $ 28,881 $ 31,728
Money market 94,070 77,133 54,597
Savings 27,587 25,988 26,138
Certificates of deposit $100,000 and over 34,986 36,591 32,813
Other time accounts 53,694 55,098 58,936
Total interest-bearing deposits 238,053 223,691 204,212
Noninterest-bearing deposits 72,604 68,071 57,566
Total deposits 310,657 291,762 261,778
Other borrowings 2,000 2,000 2,000
Long-term debt 20,000 20,000 22,000
Accounts payable and accrued liabilities 3,045 3,544 3,992
Total liabilities 335,702 317,306 289,770
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 21,128 20,664 19,602
Accumulated other comprehensive income (661) (670) (502)
Total 56,462 55,989 55,095
Treasury stock - at cost (**) (26,114) (26,114) (26,114)
Total shareholders' equity 30,348 29,875 28,981
Total liabilities and shareholders' equity $ 366,050 $ 347,181 $ 318,751
* 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: 2013* 2012*
Interest and fees on loans $2,918 $2,701
Interest and dividend on securities available for sale 162 232
Interest on securities held to maturity 366 359
Dividends on Federal Home Loan Bank stock 8 6
Interest on deposits in banks 23 18
Interest on certificates of deposit in other banks 11 4
Total interest income 3,488 3,320
Interest expense:
Interest on deposits 245 292
Interest on other borrowings 14 11
Interest on long-term debt 173 189
Total interest expense 432 492
Net interest income 3,056 2,828
Provision for loan losses 105 105
Net interest income after provision for losses on loans 2,951 2,723
Noninterest income:
Service charges on deposit accounts 300 299
Income from trust services 50 51
Income from retail brokerage services 76 95
Income from insurance services 359 375
Income from mortgage banking services 261 567
Provision for foreclosed property losses 0 (75)
Net gain (loss) on the sale or disposition of assets (54) (56)
Other income 214 213
Total noninterest income 1,206 1,469
Noninterest expense:
Salary and employee benefits 2,103 2,022
Occupancy expense 253 234
Equipment expense 232 223
Data processing expense 277 278
Amortization of intangible assets 54 56
Other operating expense 630 659
Total noninterest expense 3,549 3,472
Income before income tax expense 608 720
Provision for income taxes 42 149
Net income $566 $571
Net income per share, basic $0.22 $0.22
Net income per share, diluted $0.22 $0.22
Dividends paid per share $0.04 $0.04
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)
At March 31 2013 2012
Assets $366,050 $318,751
Loans, less unearned income & discount $207,760 $184,307
Deposits $310,657 $261,778
Shareholders' equity $30,348 $28,981
Three Months Ended March 31,
2013 2012
Performance Data & Ratios
Net income $566 $571
Earnings per share, basic $0.22 $0.22
Earnings per share, diluted $0.22 $0.22
Dividends paid per share $0.04 $0.04
Return on assets 0.62% 0.71%
Return on equity 7.50% 7.88%
Net interest margin (tax equivalent) 3.94% 4.10%
Dividend payout ratio 18.01% 17.84%
Efficiency ratio 79.94% 78.10%
Asset Quality Data & Ratios
Total nonperforming loans $848 $651
Total nonperforming assets $2,547 $3,088
Net loan charge offs $6 $ (39)
Reserve for loan losses to total loans 1.42% 1.76%
Nonperforming loans/total loans 0.41% 0.35%
Nonperforming assets/total assets 0.70% 0.97%
Net charge offs / average loans 0.01% (0.09)%
Capital Ratios
Average common equity to average total assets 8.33% 8.98%
Tier 1 capital ratio 14.08% 15.32%
Tier 1 leverage ratio 8.49% 8.98%
Total risk based capital ratio 15.35% 16.57%
Book value per share $11.91 $11.37
Tangible book value per share $11.80 $11.18
Quarterly 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
Averages 2013 2012 2012 2012 2012
Assets $362,225 $341,418 $319,266 $319,525 $322,726
Loans, less unearned income & discount $203,106 $203,871 $199,145 $190,142 $180,796
Deposits $306,934 $285,965 $263,747 $262,095 $265,993
Equity $30,186 $29,624 $29,194 $29,343 $28,984
Return on assets 0.62% 0.75% 0.53% 0.38% 0.71%
Return on equity 7.50% 8.68% 5.76% 4.16% 7.88%
Net income $566 $643 $421 $305 $571
Net income per share, basic $0.22 $0.25 $0.17 $0.12 $0.22
Net income per share, diluted $0.22 $0.25 $0.17 $0.12 $0.22
Dividends paid per share $0.04 $0.04 $0.04 $0.04 $0.04

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

Source:Southwest Georgia Financial Corporation