Southwest Georgia Financial Corporation Reports Fourth Quarter and 2012 Results

Southwest Georgia Financial Corporation Reports Fourth Quarter and 2012 Results

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 fourth quarter and year ended December 31, 2012.

Fourth Quarter and Year-End Income Highlights

  • Net income was $643 thousand in the 2012 fourth quarter, or $0.25 per diluted share, compared with $396 thousand, or $0.15 per diluted share in the fourth quarter of 2011. The increase was mainly due to a $352 thousand increase in income from interest and fees on loans and a $74 thousand decrease in provision for loan losses.

  • For the year ended December 31, 2012, net income was $1.9 million, or $0.76 per diluted share, a 32.7% increase, when compared with $1.5 million, or $0.57 per diluted share for the same period in the prior year.

  • Net interest margin was 4.23% for the fourth quarter of 2012 and 4.22% for the year ended December 31, 2012, down 6 and up 11 basis points, compared with the respective prior-year periods. Strengthened net interest margin for the year was mainly attributed to continued growth in loans.

  • Net interest income after provision for loan losses increased 14.8% to $11.4 million for the twelve months ending December 31, 2012. The improvement was due to a $927 thousand increase in net interest income and a $539 thousand decrease in loan loss provisions.


Balance Sheet Trends and Asset Quality

  • Total assets at December 31, 2012 were $347.2 million, an increase of 13.6%, or $41.5 million from December 31, 2011.

  • Total loans increased $22.8 million, or 12.6%, to $204.1 million, compared with the same period last year. The growth in loans was funded by increases in noninterest-bearing and money market deposits.

  • Total deposits grew $42.9 million to $291.8 million at December 31, 2012, an increase of 17.2% from the end of 2011.

  • Non-performing asset ratio was 0.53% at December 31, 2012, a 65 basis point improvement when compared with 1.18% at the end of 2011.

Capital Management

  • The Company has a total risk based capital ratio of 15.56% and Tier 1 capital ratio of 14.31%, both measurably above the Federal "well capitalized" standard.

  • Return on equity increased to 8.68% compared with 5.57% in the fourth quarter of 2011. For the full year, return on equity increased to 6.62% from 5.25% for 2011.

  • Tangible book value per share at December 31, 2012, was $11.60, up from $10.99 at the end of 2011.

DeWitt Drew, President and CEO commented, "It is encouraging that our deposit growth is evenly spread among our three banking regions. Our effort to focus on core funding and investments in growing markets is beginning to show up in our earnings. And while work remains to be done, our asset quality indicators look to be at a relatively normal level."

Dividends

In December 2012, the Corporation paid a fourth quarter cash dividend of $0.04 per common share. The Corporation paid dividends of $0.16 per common share in 2012 compared with $0.10 per common share in 2011. 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 $347 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.

SOUTHWEST GEORGIA FINANCIAL CORPORATION

CONSOLIDATED STATEMENT OF CONDITION

(Dollars in thousands except per share data)

(Unaudited)

(Audited)

(Audited)

December 31,

December 31,

December 31,

2012

2011

2010

ASSETS

Cash and due from banks

$

8,646

$

6,552

$

5,112

Interest-bearing deposits in banks

27,935

14,498

10,959

Certificates of deposit in other banks

3,920

980

0

Investment securities available for sale

21,672

28,641

54,946

Investment securities held to maturity

59,863

52,339

46,255

Federal Home Loan Bank stock, at cost

1,448

1,787

1,650

Loans, less unearned income and discount

204,137

181,302

157,733

Allowance for loan losses

(2,845

)

(3,100

)

(2,755

)

Net loans

201,292

178,202

154,978

Premises and equipment

10,149

9,942

9,221

Foreclosed assets, net

1,690

2,358

3,288

Intangible assets

327

547

641

Bank owned life insurance

4,767

4,593

3,029

Other assets

5,472

5,211

6,325

Total assets

$

347,181

$

305,650

$

296,404

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits:

NOW accounts

$

28,881

$

29,841

$

29,239

Money market

77,133

45,638

50,468

Savings

25,988

24,367

22,635

Certificates of deposit $100,000 and over

36,591

32,629

32,472

Other time accounts

55,098

59,950

65,859

Total interest-bearing deposits

223,691

192,425

200,673

Noninterest-bearing deposits

68,071

56,486

38,858

Total deposits

291,762

248,911

239,531

Other borrowings

2,000

2,000

2,000

Long-term debt

20,000

22,000

24,000

Accounts payable and accrued liabilities

3,544

4,188

4,098

Total liabilities

317,306

277,099

269,629

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

20,664

19,133

17,926

Accumulated other comprehensive income

(670

)

(463

)

(1,032

)

Total

55,989

54,665

52,889

Treasury stock - at cost (**)

(26,114

)

(26,114

)

(26,114

)

Total shareholders' equity

29,875

28,551

26,775

Total liabilities and shareholders' equity

$

347,181

$

305,650

$

296,404

* 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 Twelve Months

Ended December 31,

Ended December 31,

Interest income:

2012*

2011*

2012*

2011

Interest and fees on loans

$

3,052

$

2,700

$

11,455

$

10,408

Interest and dividend on securities available for sale

151

248

711

1,439

Interest on securities held to maturity

359

327

1,456

1,205

Dividends on Federal Home Loan Bank stock

11

4

33

15

Interest on deposits in banks

18

8

60

35

Interest on certificates of deposit in other banks

7

2

19

2

Total interest income

3,598

3,289

13,734

13,104

Interest expense:

Interest on deposits

269

300

1,111

1,370

Interest on federal funds purchased

0

0

0

2

Interest on other borrowings

14

11

54

42

Interest on long-term debt

177

191

733

781

Total interest expense

460

502

1,898

2,195

Net interest income

3,138

2,787

11,836

10,909

Provision for loan losses

130

204

445

984

Net interest income after provision for losses on loans

3,008

2,583

11,391

9,925

Non-interest income:

Service charges on deposit accounts

322

327

1,242

1,360

Income from trust services

53

50

205

214

Income from retail brokerage services

100

76

382

324

Income from insurance services

305

339

1,280

1,273

Income from mortgage banking services

318

358

1,676

1,477

Provision for foreclosed property losses

(95

)

(75

)

(320

)

(300

)

Net gain (loss) on the sale or disposition of assets

104

4

24

(160

)

Net gain on the sale of securities

0

5

338

381

Net loss on the impairment of equity securities

0

0

0

(12

)

Other income

164

151

698

602

Total noninterest income

1,271

1,235

5,525

5,159

Non-interest expense:

Salary and employee benefits

1,986

1,934

8,717

7,717

Occupancy expense

265

236

1,006

953

Equipment expense

256

233

940

812

Data processing expense

241

265

1,082

1,039

Amortization of intangible assets

54

56

220

219

Other operating expense

667

627

2,631

2,596

Total non-interest expense

3,469

3,351

14,596

13,336

Income before income tax expense

810

467