Southwest Georgia Financial Corporation Reports Net Income Growth For Third Quarter 2012

Southwest Georgia Financial Corporation (the “Corporation”) (NYSE MKT: SGB), a full-service community bank holding company, today reported its results of operations for the third quarter ended September 30, 2012.

Third Quarter and Nine-Month Income Highlights
  • Net income was $421 thousand in the 2012 third quarter, or $0.17 per diluted share, compared with $99 thousand, or $0.04 per diluted share, in the third quarter of 2011. The increase was the result of a $375 thousand reduction in the Company’s provision for loan losses.
  • For the nine months ended September 30, 2012, net income was $1.3 million, or $0.51 per diluted share, a 21.8% increase when compared with $1.1 million, or $0.42 per diluted share, for the same period in the prior year.
  • Net interest margin grew to 4.32% for the third quarter of 2012 and 4.22% for the first nine months of 2012, up 19 and 17 basis points compared with the respective prior-year periods. Strengthened net interest margin was mainly attributed to continued loan growth.
  • Net interest income after provision for loan losses increased 29.4% to $2.9 million from $2.2 million in the 2011 third quarter.

Balance Sheet Trends and Asset Quality
  • Total assets at September 30, 2012, were $332.2 million, an increase of 13.1%, or $38.5 million, from September 30, 2011.
  • Total loans increased $20.0 million, or 11.0%, to $202.5 million compared with the same period last year. The growth in loans was funded by increases in noninterest-bearing deposits.
  • Total deposits grew $40.8 million to $277.7 million at September 30, 2012, an increase of 17.2% from the third quarter of 2011.
  • Non-performing asset ratio was 0.78% at September 30, 2012, a 154 basis point improvement when compared with 2.32% at the end of the third quarter 2011.

Capital Management
  • The Company has a total risk based capital ratio of 15.63%, measurably above the federal “well capitalized” standard.
  • Return on equity increased to 5.76% compared with 1.39% in the third quarter of 2011.
  • Tangible book value per share at September 30, 2012, was $11.28, up 4.1% from the end of the third quarter of 2011.

DeWitt Drew, President and CEO, commented, “We are experiencing solid net income growth this year, due mostly to increased loans and noninterest bearing deposits combined with improved credit costs. While other expenses are high, we believe our investment in people and infrastructure in growing communities will allow us to continue to grow at a reasonable pace.”

Dividends

In September 2012, the Corporation paid a third quarter cash dividend of $0.04 per common share. Southwest Georgia Financial Corporation or its predecessor, Southwest Georgia Bank, has paid cash dividends for 84 consecutive years.

About Southwest Georgia Financial Corporation

Southwest Georgia Financial Corporation is a state-chartered bank holding company with approximately $332 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)
September 30, December 31, September 30,
2012 2011 2011
ASSETS
Cash and due from banks $ 7,568 $ 6,552 $ 5,602
Interest-bearing deposits in banks 27,525 14,498 6,862
Certificates of deposit in other banks 1,715 980 0
Investment securities available for sale 13,918 28,641 31,945
Investment securities held to maturity 57,193 52,339 45,297
Federal Home Loan Bank stock, at cost 1,447 1,787 1,943
Loans, less unearned income and discount 202,483 181,302 182,442
Allowance for loan losses (2,745) (3,100) (2,903)
Net loans 199,738 178,202 179,539
Premises and equipment 10,567 9,942 9,669
Foreclosed assets, net 1,837 2,358 2,365
Intangible assets 381 547 602
Bank owned life insurance 4,722 4,593 4,537
Other assets 5,621 5,211 5,393
Total assets $ 332,232 $ 305,650 $ 293,754
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
NOW accounts $ 42,975 $ 29,841 $ 27,314
Money market 38,840 45,638 46,411
Savings 25,688 24,367 24,411
Certificates of deposit $100,000 and over 39,721 32,629 31,274
Other time accounts 57,343 59,950 60,116
Total interest-bearing deposits 204,567 192,425 189,526
Noninterest-bearing deposits 73,084 56,486 47,361
Total deposits 277,651 248,911 236,887
 
Other borrowings 2,000 2,000 2,000
Long-term debt 20,000 22,000 22,000
Accounts payable and accrued liabilities 3,462 4,188 4,651
Total liabilities 303,113 277,099 265,538
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 20,123 19,133 18,736
Accumulated other comprehensive income (885) (463) (401)
Total 55,233 54,665 54,330
Treasury stock - at cost (**) (26,114) (26,114) (26,114)
Total shareholders' equity 29,119 28,551 28,216
Total liabilities and shareholders' equity $ 332,232 $ 305,650 $ 293,754
 
* 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 Nine Months
Ended September 30, Ended September 30,
Interest income: 2012*     2011* 2012*       2011*
Interest and fees on loans $ 2,921 $ 2,605 $ 8,403 $ 7,708
Interest and dividend on securities available for sale 136 297 560 1,190
Interest on securities held to maturity 362 312 1,097 878
Dividends on Federal Home Loan Bank stock 6 4 22 11
Interest on deposits in banks 12 7 42 27
Interest on certificates of deposit in other banks   5   0   13   0
Total interest income   3,442   3,225   10,136   9,815
 
Interest expense:
Interest on deposits 274 324 843 1,070
Interest on federal funds purchased 0 0 0 2
Interest on other borrowings 18 13 40 30
Interest on long-term debt   177   191   556   590
Total interest expense   469   529   1,439   1,693
Net interest income 2,973 2,696 8,698 8,122
Provision for loan losses   105   480   315   780
Net interest income after provision for losses on loans   2,868   2,216   8,383   7,342
 
Non-interest income:
Service charges on deposit accounts 320 360 920 1,033
Income from trust services 51 53 153 164
Income from retail brokerage services 81 73 282 248
Income from insurance services 272 273 975 935
Income from mortgage banking services 340 346 1,358 1,119
Provision for foreclosed property losses (75) (75) (225) (225)
Net gain (loss) on the sale or disposition of assets 16 (111) (80) (164)
Net gain on the sale of securities 0 156 338 377
Net loss on the impairment of equity securities 0 0 0 (12)
Other income   158   113   534   450
Total noninterest income   1,163   1,188   4,254   3,924
 
Non-interest expense:
Salary and employee benefits 2,030 1,966 6,732 5,782
Occupancy expense 261 262 742 717
Equipment expense 239 216 683 578
Data processing expense 277 257 840 775
Amortization of intangible assets 54 56 166 164
Other operating expense   690   624   1,964   1,970
Total non-interest expense   3,551   3,381   11,126   9,985
 
Income before income tax expense 480 24 1,510 1,281
Provision for income taxes   59   (75)   213   216
Net income $ 421 $ 99 $ 1,297 $ 1,065
 
Net income per share, basic $ 0.17 $ 0.04 $ 0.51 $ 0.42
Net income per share, diluted $ 0.17 $ 0.04 $ 0.51 $ 0.42
Dividends paid per share $ 0.04 $ - $ 0.12 $ 0.10
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   2,547,875
 
         

SOUTHWEST GEORGIA FINANCIAL CORPORATION

Financial Highlights

(Dollars in thousands except per share data)
 
At September 30 2012

2011

 
Assets $332,232

$293,754

 
Loans, less unearned income & discount $202,483

$182,442

 
Deposits $277,651

$236,887

 
Shareholders' equity

$ 29,119

$ 28,216

 
 

Three Months Ended September 30,
Nine Months Ended September 30,
2012   2011 2012     2011
Performance Data & Ratios
Net income $ 421 $ 99 $ 1,297 $ 1,065
Earnings per share, basic $ 0.17 $ 0.04 $ 0.51 $ 0.42
Earnings per share, diluted $ 0.17 $ 0.04 $ 0.51 $ 0.42
Dividends paid per share $ 0.04 $ - $ 0.12 $ 0.10
Return on assets 0.53% 0.13% 0.54% 0.46%
Return on equity 5.76% 1.39% 5.93% 5.13%
Net interest margin (tax equivalent) 4.32% 4.13% 4.22% 4.05%
Dividend payout ratio 24.23% 0.00% 23.58% 23.93%
Efficiency ratio 82.69% 84.35% 82.98% 80.63%
 
Asset Quality Data & Ratios
Total non-performing loans $ 669 $ 4,286 $ 669 $ 4,286
Total non-performing assets $ 2,576 $ 6,803 $ 2,576 $ 6,803
Net loan charge offs $ 270 $ 488 $ 670 $ 631
Reserve for loan losses to total loans 1.36% 1.59% 1.36% 1.59%
Non-performing loans/total loans 0.33% 2.35% 0.33% 2.35%
Non-performing assets/total assets 0.78% 2.32% 0.78% 2.32%
Net charge offs / average loans 0.54% 1.08% 0.47% 0.49%
 
Capital Ratios
Average common equity to average total assets 9.14% 9.41% 9.10% 8.93%
Tier 1 capital ratio 14.38% 15.11% 14.38% 15.11%
Tier 1 leverage ratio 9.27% 9.28% 9.27% 9.28%
Total risk based capital ratio 15.63% 16.36% 15.63% 16.36%
Book value per share $ 11.43 $ 11.07 $ 11.43 $ 11.07
Tangible book value per share $ 11.28 $ 10.84 $ 11.28 $ 10.84
 
                                         
Quarterly 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr
Averages 2012 2012 2012 2011 2011
 
Assets $       319,266 $         319,525 $       322,726 $       300,863 $       302,256
Loans, less unearned income & discount $ 199,145 $ 190,142 $ 180,796 $ 180,567 $ 179,093
Deposits $ 263,747 $ 262,095 $ 265,993 $ 243,893 $ 245,051
Equity $ 29,194 $ 29,343 $ 28,984 $ 28,458 $ 28,446
Return on assets 0.53% 0.38% 0.71% 0.53% 0.13%
Return on equity 5.76% 4.16% 7.88% 5.57% 1.39%
Net income $ 421 $ 305 $ 571 $ 396 $ 99
Net income per share, basic $ 0.17 $ 0.12 $ 0.22 $ 0.16 $ 0.04
Net income per share, diluted $ 0.17 $ 0.12 $ 0.22 $ 0.16 $ 0.04
Dividends paid per share $ 0.04 $ 0.04 $ 0.04 $ - $ -
 

Copyright Business Wire 2010

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