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

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

MOULTRIE, Ga.--(BUSINESS WIRE)-- 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.