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Southwest Georgia Financial Corporation Reports Results For Third Quarter Of 2011

Southwest Georgia Financial Corporation (the “Corporation”) (NYSE Amex: SGB), a full-service community bank holding company, today reported net income of $99 thousand, or $0.04 per diluted share, for the third quarter of 2011, down $140 thousand from net income of $239 thousand, or $0.09 per diluted share, for the third quarter of 2010. The decrease in net income reflects increased provisions for loan losses related to one large nonaccrual loan and increased personnel expenses related to staffing the Corporation’s continued expansion in Valdosta, Georgia.

DeWitt Drew, President and CEO commented, “In spite of the current economic environment, we are moving forward in Valdosta. Construction on our second banking center has begun and we expect to have the branch open by the first quarter of 2012.”

Return on average equity for the third quarter of 2011 was 1.39% compared with 3.49% for the third quarter of 2010. Return on average assets for the quarter was 0.13% compared with 0.31% for the same period in 2010.

For the first nine months of 2011, net income was $1.1 million compared with $1.6 million for the same period in 2010. The decline in net income primarily reflects losses from the sale of foreclosed properties, lower net gains on the sale of securities and increased salary and employee benefits. Earnings per diluted share for the first nine months of 2011 were $0.42, down from $0.61 for the same period in 2010. Year-to-date return on average equity was 5.13% compared with 7.74% for the same period last year, while return on average assets decreased 23 basis points to 0.46%.

Balance Sheet Trends and Asset Quality

At September 30, 2011, total assets were $293.8 million, a decrease of $17.1 million when compared with $310.9 million in the same quarter last year. The decrease was mainly due to decreased interest-bearing deposits with other banks, which were down $32.0 million, as well as investment securities which decreased $7.5 million. These decreases were partially offset by considerable loan growth driven by the Valdosta market, where loans are now over $45 million. Total loans increased $21.1 million, or 13.1%, to $182.4 million when compared with the same quarter last year. Nonperforming assets increased to 2.32% of total assets compared with 1.18% in the third quarter last year. Nonperforming assets were affected by one large commercial real estate loan that was placed in nonaccrual and charged down by $412 thousand in the third quarter of 2011. A specific reserve for loan losses was also created for this loan.

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