Southwest Georgia Financial Corporation Reports 13% Increase in Net Income for the 2016 Third Quarter

MOULTRIE, Ga., Oct. 25, 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 third quarter ended September 30, 2016.  

“Our performance was strong in the quarter as double-digit growth in loans and deposits drove a 13% increase in net income,” commented DeWitt Drew, President and CEO.  “We continue to achieve excellent results from our market expansion, which is making a significant contribution to our higher loan originations and healthy pipeline.  In consideration of our increased earnings power, solid balance sheet, and excellent asset quality, the board recently increased the quarterly dividend by 10%, reflecting our long-time commitment to returning earnings to shareholders.” 

Third Quarter and Nine-Month Income Highlights

  • Third quarter net income increased 13% to $973 thousand, or $0.38 per diluted share, from $857 thousand, or $0.33 per diluted share.  Net interest income improved 12% to $4.0 million when compared with last year’s third quarter, due primarily to higher interest income and fees on loans. 
  • For the nine months ended September 30, 2016, net income was $3.0 million, or $1.19 per diluted share, up 20% from $2.5 million, or $0.99 per diluted share, for the same period in 2015.  Net interest income was up $1.3 million, or 12%, year-over-year to $11.8 million, more than offsetting increased personnel expenses due to expansion in Tifton and Valdosta. 

Balance Sheet Trends and Asset Quality

  • Total assets at quarter-end were $443.0 million, up 13% from $392.0 million at September 30, 2015.  The increase in assets and change in asset mix reflect 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 $48.1 million, or 20%, to $287.0 million from the third quarter 2015 and were up over 14% from year-end 2015. 
  • Total deposits were up $41.5 million, or 13%, to $364.3 million at September 30, 2016 compared with the prior year.  While deposit growth lagged loan growth, noninterest-bearing deposits increased over 25% to $119.0 million year-over-year and 17% since year end.  Noninterest-bearing deposit growth was primarily in commercial and business accounts.  
  • Nonperforming loans were $352 thousand at the end of the third quarter, down $1.0 million from a year ago. 

Capital Management

  • Tangible book value per share at September 30, 2016 was $15.33, up from $14.31 at September 30, 2015.
  • In September 2016, the Corporation paid a quarterly cash dividend of $0.11 per common share, a 10% increase compared with $0.10 per common share paid each quarter since the previous increase in March 2015.  Southwest Georgia Financial Corporation or its predecessor, Southwest Georgia Bank, has paid cash dividends for 88 consecutive years.

Webcast and Conference Call

The Company will host a conference call and webcast on Tuesday, October 25, 2016 at 1:00 p.m. ET.  Management will review the financial and operating results for the quarter, as well as the Company’s strategy and outlook.  A question and answer session will follow the formal discussion. 

The conference call can be accessed by calling (201) 493-6725.  Alternatively, the webcast can be monitored at www.sgfc.com

A telephonic replay will be available from 4:00 p.m. ET on the day of the teleconference until Tuesday, November 1, 2016.  To listen to the archived call, dial (858) 384-5517 and enter conference ID number 13645507, or access the webcast replay at www.sgfc.com/investorrelations.cfm, where a transcript will be posted once available.

About Southwest Georgia Financial Corporation

Southwest Georgia Financial Corporation is a state-chartered bank holding company with approximately $443 million in assets headquartered in Moultrie, Georgia.  Its primary subsidiary, Southwest Georgia Bank, offers comprehensive financial services to consumer, business, and government customers.  The current banking facilities include the main office located in Colquitt County, 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.  The Company routinely posts news and other important information on its website.

More information on Southwest Georgia Financial Corp. and Southwest Georgia Bank can be found at: 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.  Important factors that could cause actual results to differ materially from those contemplated today include a change in the Corporation’s capital structure, new or expanded regulatory requirements, the success of the Corporations’ growth strategy, customer preferences, the interest rate environment and other factors described in 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)
    September 30,   December 31,   September 30,
      2016       2015       2015  
ASSETS            
Cash and due from banks $   6,515   $   6,157   $   7,741  
Interest-bearing deposits in banks     26,503       24,923       13,557  
Certificates of deposit in other banks     0       245       1,225  
Investment securities available for sale     45,338       51,476       49,589  
Investment securities held to maturity     56,389       60,889       61,336  
Federal Home Loan Bank stock, at cost     1,874       1,869       1,614  
Loans, less unearned income and discount     287,226       250,786       239,086  
Allowance for loan losses     (3,093 )     (3,032 )     (3,180 )
Net loans     284,133       247,754       235,906  
Premises and equipment     11,772       11,158       11,356  
Foreclosed assets, net     127       82       0  
Intangible assets     39       51       55  
Bank owned life insurance     5,325       5,231       5,194  
Other assets     5,015       5,020       4,648  
Total assets $   443,030   $   414,855   $   392,221  
LIABILITIES AND SHAREHOLDERS’ EQUITY            
Deposits:            
NOW accounts $   32,983   $   25,383   $   24,823  
Money market     97,975       108,226       99,128  
Savings     30,834       27,721       29,774  
Certificates of deposit $100,000 and over     35,393       25,189       25,354  
Other time accounts     48,029       50,728       48,979  
Total interest-bearing deposits     245,214       237,247       228,058  
Noninterest-bearing deposits     119,042       101,769       94,714  
Total deposits     364,256       339,016       322,772  
             
Other borrowings     8,448       7,591       6,733  
Long-term debt     26,886       28,476       23,333  
Accounts payable and accrued liabilities     4,349       3,675       2,878  
Total liabilities     403,939       378,758       355,716  
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     29,612       27,369       26,781  
Accumulated other comprehensive income     (402 )     (1,153 )     (157 )
Total     65,205       62,211       62,619  
Treasury stock – at cost (**)     (26,114 )     (26,114 )     (26,114 )
Total shareholders’ equity     39,091       36,097       36,505  
Total liabilities and shareholders’ equity $   443,030   $   414,855   $   392,221  
             
*   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,
  2016*   2015*   2016*   2015*
Interest income:              
Interest and fees on loans $ 3,785     $ 3,215     $ 11,017     $ 9,424  
Interest and dividend on securities available for sale   243       278       793       867  
Interest on securities held to maturity   332       360       1,022       1,087  
Dividends on Federal Home Loan Bank stock   22       18       68       54  
Interest on deposits in banks   26       15       65       41  
Interest on certificates of deposit in other banks   0       3       0       10  
Total interest income   4,408       3,889       12,965       11,483  
               
Interest expense:              
Interest on deposits   243       202       676       589  
Interest on other borrowings   28       19       76       47  
Interest on long-term debt   141       104       430       329  
Total interest expense   412       325       1,182       965  
Net interest income   3,996       3,564       11,783       10,518  
Provision for loan losses   45       51       115       141  
Net interest income after provision for losses on loans   3,951       3,513       11,668       10,377  
               
Noninterest income:              
Service charges on deposit accounts   277       284       808       839  
Income from trust services   54       52       157       190  
Income from retail brokerage services   90       82       258       281  
Income from insurance services   310       331       1,124       1,067  
Income from mortgage banking services   89       80       272       236  
Net gain (loss) on the sale or disposition of assets   0       0       0       22  
Net gain on the sale of securities   57       0       169       3  
Other income   183       179       596       576  
Total noninterest income   1,060       1,008       3,384       3,214  
               
Noninterest expense:              
Salary and employee benefits   2,222       1,907       6,575       5,880  
Occupancy expense   297       299       864       855  
Equipment expense   182       227       633       664  
Data processing expense   350       314       1,004       921  
Amortization of intangible assets   4       4       12       12  
Other operating expense   684       708       2,059       2,107  
Total noninterest expense   3,739       3,459       11,147       10,439  
               
Income before income tax expense   1,272       1,062       3,905       3,152  
Provision for income taxes   299       205       873       621  
Net income $ 973     $ 857     $ 3,032     $ 2,531  
               
Net income per share, basic $ 0.38     $ 0.33     $ 1.19     $ 0.99  
Net income per share, diluted $ 0.38     $ 0.33     $ 1.19     $ 0.99  
Dividends paid per share $ 0.11     $ 0.10     $ 0.31     $ 0.30  
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 September 30     2016           2015    
Assets   $ 443,030         $ 392,221    
Loans, less unearned income & discount   $ 287,226         $ 239,086    
Deposits   $ 364,256         $ 322,772    
Shareholders’ equity   $ 39,091         $ 36,505    
               
  Three Months Ended September 30,   Nine Months Ended September 30,
    2016       2015       2016       2015  
Performance Data & Ratios              
Net income $ 973     $ 857     $ 3,032     $ 2,531  
Earnings per share, basic $ 0.38     $ 0.33     $ 1.19     $ 0.99  
Earnings per share, diluted $ 0.38     $ 0.33     $ 1.19     $ 0.99  
Dividends paid per share $ 0.11     $ 0.10     $ 0.31     $ 0.30  
Return on assets   0.89 %     0.87 %     0.95 %     0.85 %
Return on equity   9.95 %     9.48 %     10.61 %     9.46 %
Net interest margin (tax equivalent)   4.12 %     4.10 %     4.20 %     4.04 %
Dividend payout ratio   28.81 %     29.72 %     26.05 %     30.20 %
Efficiency ratio   70.96 %     72.27 %     70.50 %     72.70 %
               
Asset Quality Data & Ratios              
Total nonperforming loans $ 352     $ 1,359     $ 352     $ 1,359  
Total nonperforming assets $ 479     $ 1,359     $ 479     $ 1,359  
Net loan charge offs $ 64     $ 51     $ 54     $ 75  
Reserve for loan losses to total loans   1.08 %     1.33 %     1.08 %     1.33 %
Nonperforming loans/total loans   0.12 %     0.57 %     0.12 %     0.57 %
Nonperforming assets/total assets   0.11 %     0.35 %     0.11 %     0.35 %
Net charge offs / average loans   0.09 %     0.09 %     0.03 %     0.04 %
               
Capital Ratios              
Average common equity to average total assets   8.97 %     9.17 %     8.99 %     9.02 %
Common equity Tier 1 capital ratio   13.18 %     14.41 %     13.18 %     14.41 %
Tier 1 capital ratio   13.18 %     14.41 %     13.18 %     14.41 %
Tier 1 leverage ratio   9.06 %     9.29 %     9.06 %     9.29 %
Total risk based capital ratio   14.21 %     15.66 %     14.21 %     15.66 %
Book value per share $ 15.34     $ 14.33     $ 15.34     $ 14.33  
Tangible book value per share $   15.33     $   14.31     $   15.33     $   14.31  

 

Quarterly 3rd Qtr   2nd Qtr   1st Qtr   4th Qtr   3rd Qtr
Averages   2016       2016       2016       2015       2015  
                   
Assets $  435,880     $  420,685     $  415,168     $  407,924     $  394,441  
Loans, less unearned income & discount $  289,978     $  279,543     $  262,715     $  246,353     $  238,023  
Deposits $  357,421     $  341,569     $  338,399     $  337,194     $  327,072  
Equity $   39,110     $   38,080     $   37,097     $   36,833     $   36,154  
Return on assets   0.89 %     0.96 %     1.01 %     0.83 %     0.87 %
Return on equity   9.95 %     10.63 %     11.30 %     9.16 %     9.48 %
Net income $    973     $   1,011     $   1,048     $   843     $   857  
Net income per share, basic $   0.38     $   0.40     $   0.41     $   0.33     $   0.33  
Net income per share, diluted $   0.38     $   0.40     $   0.41     $   0.33     $   0.33  
Dividends paid per share $   0.11     $   0.10     $   0.10     $   0.10     $   0.10  

 

CONTACT: CONTACTS:
Company: 
George R. Kirkland
Executive Vice President, CFO and Treasurer
Phone: (229) 873-3830
investorinfo@sgfc.com 

Investor Relations: 
Deborah K. Pawlowski
Kei Advisors LLC
Phone: (716) 843-3908
dpawlowski@keiadvisors.com