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."


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:


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.




(Dollars in thousands except per share data)

September 30,December 31,September 30,
Cash and due from banks$7,568$6,552$5,602
Interest-bearing deposits in banks27,52514,4986,862
Certificates of deposit in other banks1,7159800
Investment securities available for sale13,91828,64131,945
Investment securities held to maturity57,19352,33945,297
Federal Home Loan Bank stock, at cost1,4471,7871,943
Loans, less unearned income and discount202,483181,302182,442
Allowance for loan losses(2,745)(3,100)(2,903)
Net loans199,738178,202179,539
Premises and equipment10,5679,9429,669
Foreclosed assets, net1,8372,3582,365
Intangible assets381547602
Bank owned life insurance4,7224,5934,537
Other assets5,6215,2115,393
Total assets$332,232$305,650$293,754
NOW accounts$42,975$29,841$27,314
Money market38,84045,63846,411
Certificates of deposit $100,000 and over39,72132,62931,274
Other time accounts57,34359,95060,116
Total interest-bearing deposits204,567192,425189,526
Noninterest-bearing deposits73,08456,48647,361
Total deposits277,651248,911236,887
Other borrowings2,0002,0002,000
Long-term debt20,00022,00022,000
Accounts payable and accrued liabilities3,4624,1884,651
Total liabilities303,113277,099265,538
Shareholders' equity:
Common stock - par value $1; 5,000,000 shares
authorized; 4,293,835 shares issued (*)4,2944,2944,294
Additional paid-in capital31,70131,70131,701
Retained earnings20,12319,13318,736
Accumulated other comprehensive income(885)(463)(401)
Treasury stock - at cost (**)(26,114)(26,114)(26,114)
Total shareholders' equity29,11928,55128,216
Total liabilities and shareholders' equity$332,232$305,650$293,754
* Common stock - shares outstanding2,547,8372,547,8372,547,837
** Treasury stock - shares1,745,9981,745,9981,745,998



(Dollars in thousands except per share data)

For the Three MonthsFor 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 sale1362975601,190
Interest on securities held to maturity3623121,097878
Dividends on Federal Home Loan Bank stock642211
Interest on deposits in banks1274227
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 deposits2743248431,070
Interest on federal funds purchased0002
Interest on other borrowings18134030
Interest on long-term debt 177 191 556 590
Total interest expense 469 529 1,439 1,693
Net interest income2,9732,6968,6988,122
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 accounts3203609201,033
Income from trust services5153153164
Income from retail brokerage services8173282248
Income from insurance services272273975935
Income from mortgage banking services3403461,3581,119
Provision for foreclosed property losses(75)(75)(225)(225)
Net gain (loss) on the sale or disposition of assets16(111)(80)(164)
Net gain on the sale of securities0156338377
Net loss on the impairment of equity securities000(12)
Other income 158 113 534 450
Total noninterest income 1,163 1,188 4,254 3,924
Non-interest expense:
Salary and employee benefits2,0301,9666,7325,782
Occupancy expense261262742717
Equipment expense239216683578
Data processing expense277257840775
Amortization of intangible assets5456166164
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 expense480
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