Southwest Georgia Financial Corporation Net Income Increases 25% to $1.43 Million in the 2019 Third Quarter

MOULTRIE, Ga.--()--Southwest Georgia Financial Corporation (the “Company”) (NYSE American: SGB), a full-service community bank holding company, today reported results of operations for the third quarter and nine months ended September 30, 2019. Comparisons are to prior-year period unless otherwise noted.

We continue to make excellent progress in growing our business. Loans and deposits both saw meaningful growth and when combined with our prudent expense management, we measurably increased our earnings,” commented DeWitt Drew, President and CEO. “We believe we are well positioned to continue to capitalize on future growth opportunities and are confident that our customer-focused strategy will continue to yield positive results as we add new customers and further deepen relationships.”

Third Quarter and Nine-Month Income Highlights

  • Net income increased 25% to $1.43 million, or $0.56 per diluted share, from $1.14 million, or $0.45 per diluted share. Net interest income improved 9% to $5.2 million, primarily due to growth in average total loans of $32.6 million. The net interest margin held steady at 4.08%. The provision for loan losses was up $130 thousand, due to continued loan growth.
  • For the nine months ended September 30, 2019, net income was up 12% to $4.0 million, or $1.56 per diluted share, due mostly to higher net interest income of 9%, or $1.3 million, and increases in noninterest income of 23%, or $704 thousand. Partially offsetting were higher provisions for loan losses of $140 thousand and increased overhead expenses of $911 thousand.

Balance Sheet Trends

  • Total assets at quarter-end were $547.5 million, up 6%, or $32.2 million. Total loans grew approximately 8%, or $28.0 million, to $394.6 million, while continuing to maintain high standards of credit quality. Net charge-offs to average loans were 0.35%.
  • Total deposits of $466.1 million were up $39.9 million, or more than 9%, which reflects a 15% increase in noninterest-bearing deposits and nearly 8% increase in interest bearing deposits.
  • Federal Home Loan Bank Advances were down $13.7 million given the strong deposit gathering activities. The average cost of all interest bearing liabilities increased 24 basis points to 1.19%, while the average cost of interest bearing deposits increased 30 basis points to 1.10%.

Capital Management

  • Book value per share grew 14% to $19.01 at September 30, 2019.
  • In September 2019, the Company paid a quarterly cash dividend of $0.12 per common share. For the year-to-date period, cash dividends totaled $0.36, up 3%. Southwest Georgia Financial Corporation or its predecessor, Southwest Georgia Bank, has paid cash dividends for 91 consecutive years.

Webcast and Conference Call

The Company will host a conference call and webcast on Tuesday, October 22, 2019 at 1:00 p.m. ET. Management will review the financial and operating results for the third quarter 2019, 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) 689-8263. Alternatively, the webcast can be monitored at www.sgb.bank.

A telephonic replay will be available from 4:00 p.m. ET on the day of the teleconference until Tuesday, October 29, 2019. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13694758, or access the webcast replay at www.sgb.bank/investor-relations, 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 $548 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 and branch offices located in Baker County, Worth County, Lowndes County and Tift County. In addition to conventional banking services, the Company 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 at: www.sgb.bank.

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. Important factors that could cause actual results to differ materially from those contemplated today include a change in the Company’s capital structure, new or expanded regulatory requirements, the success of the Company’s growth strategy, customer preferences, the interest rate environment and other factors described in 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,

2019

 

2018

 

2018

 

ASSETS

Cash and due from banks

$

 

13,284

 

$

 

14,051

 

$

 

14,607

 

Interest-bearing deposits in banks

10,557

 

21,448

 

10,911

 

Certificates of deposit in other banks

2,977

 

2,732

 

1,985

 

Investment securities available for sale

71,423

 

58,314

 

58,576

 

Investment securities held to maturity

31,167

 

36,827

 

36,961

 

Federal Home Loan Bank stock, at cost

1,715

 

1,820

 

2,257

 

Loans, less unearned income and discount

394,613

 

376,750

 

366,645

 

Allowance for loan losses

(3,505

)

(3,429

)

(3,078

)

Net loans

391,108

 

373,321

 

363,567

 

Premises and equipment

14,021

 

14,574

 

14,188

 

Bank properties held for sale

0

 

0

 

212

 

Foreclosed assets, net

170

 

128

 

128

 

Intangible assets

0

 

4

 

8

 

Bank owned life insurance

6,880

 

6,779

 

6,677

 

Other assets

4,244

 

4,835

 

5,293

 

Total assets

$

 

547,544

 

$

 

534,833

 

$

 

515,370

 

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits:

Interest bearing business checking

$

 

29,388

 

$

 

28,071

 

$

 

26,347

 

NOW accounts

17,875

 

35,816

 

20,241

 

Money market

165,387

 

158,730

 

157,631

 

Savings

33,348

 

31,849

 

32,224

 

Certificates of deposit $250,000 and over

34,495

 

16,265

 

24,625

 

Other time accounts

70,594

 

81,214

 

65,019

 

Total interest-bearing deposits

351,086

 

351,945

 

326,087

 

Noninterest-bearing deposits

115,051

 

103,695

 

100,161

 

Total deposits

466,138

 

455,640

 

426,248

 

 

Other borrowings

5,814

 

10,457

 

12,171

 

Long-term debt

23,232

 

21,171

 

30,600

 

Accounts payable and accrued liabilities

3,961

 

3,946

 

3,900

 

Total liabilities

499,145

 

491,214

 

472,919

 

Shareholders' equity:

Common stock - par value $1; 5,000,000 shares

authorized; 2,545,776 shares issued (*)

2,546

 

2,546

 

2,546

 

Additional paid-in capital

18,419

 

18,419

 

7,207

 

Retained earnings

27,884

 

24,841

 

35,653

 

Accumulated other comprehensive income

(450

)

(2,187

)

(2,955

)

Total shareholders' equity

48,399

 

43,619

 

42,451

 

Total liabilities and shareholders' equity

$

 

547,544

 

$

 

534,833

 

$

 

515,370

 

 

* Common stock - shares outstanding

2,545,776

 

2,545,776

 

2,545,776

 

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:

2019*

2018*

2019*

2018*

Interest and fees on loans

$ 5,552

$ 4,876

$ 16,001

$ 13,641

Interest and dividend on securities available for sale

427

365

1,218

1,059

Interest on securities held to maturity

224

252

711

791

Dividends

31

45

79

112

Interest on deposits in banks

102

90

402

357

Interest on certificates of deposit in other banks

19

12

53

35

Total interest income

6,355

5,640

18,465

15,995

 

Interest expense:

Interest on deposits

975

630

3,000

1,483

Interest on federal funds purchased

0

1

0

1

Interest on other borrowings

26

106

99

339

Interest on long-term debt

150

130

342

383

Total interest expense

1,151

867

3,441

2,206

Net interest income

5,205

4,773

15,041

13,789

Provision for loan losses

379

249

745

605

Net interest income after provision for losses on loans

4,826

4,524

14,278

13,184

 

Noninterest income:

Service charges on deposit accounts

234

246

702

737

Income from trust services

55

56

167

178

Income from retail brokerage services

82

90

277

275

Income from insurance services

412

389

1,305

1,194

Income from mortgage banking services

0

1

0

2

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

(1)

(7)

244

(7)

Net gain on the sale of securities

174

0

174

0

Net gain on extinguishment of debt

0

 

0

 

143

 

0

Other income

235

203

724

653

Total noninterest income

1,192

978

3,736

3,032

 

Noninterest expense:

Salary and employee benefits

2,443

2,431

7,524

7,160

Occupancy expense

341

336

975

920

Equipment expense

303

207

921

585

Data processing expense

412

383

1,220

1,088

Amortization of intangible assets

0

4

4

12

Other operating expense

722

788

2,542

2,511

Total noninterest expense

4,220

4,149

13,187

12,276

 

Income before income tax expense

1,797

1,353

4,828

3,940

Provision for income taxes

365

209

869

416

Net income

$ 1,432

$ 1,144

$ 3,959

$ 3,524

 

Net income per share, basic

$ 0.56

$ 0.45

$ 1.56

$ 1.38

Net income per share, diluted

$ 0.56

$ 0.45

$ 1.56

$ 1.38

Dividends paid per share

$ 0.12

$ 0.12

$ 0.36

$ 0.35

Basic weighted average shares outstanding

2,545,776

2,545,776

2,545,776

2,545,494

Diluted weighted average shares outstanding

2,545,776

2,545,776

2,545,776

2,545,494 

SOUTHWEST GEORGIA FINANCIAL CORPORATION

Financial Highlights

(Dollars in thousands except per share data)

 

At September 30

 

2019

 

2018

Assets

$

 

547,544

$

 

515,370

Loans, less unearned income & discount

$

 

394,613

$

 

366,645

Deposits

$

 

466,138

$

 

426,248

Shareholders' equity

$

 

48,399

$

 

42,451

 

Three Months Ended

September 30,

Nine Months Ended
September 30,

 

 

2019

 

 

 

2018

 

 

 

2019

 

 

 

2018

 

Performance Data & Ratios

Net income

$

1,432

 

$

1,144

 

$

3,959

 

$

3,524

 

Earnings per share, basic

$

0.56

 

$

0.45

 

$

1.56

 

$

1.38

 

Earnings per share, diluted

$

0.56

 

$

0.45

 

$

1.56

 

$

1.38

 

Dividends paid per share

$

0.12

 

$

0.12

 

$

0.36

 

$

0.35

 

Return on assets

 

1.04

%

 

0.90

%

 

0.97

%

 

0.93

%

Return on equity

 

11.92

%

 

10.74

%

 

11.43

%

 

11.20

%

Net interest margin (tax equivalent)

 

4.08

%

 

4.08

%

 

4.01

%

 

4.01

%

Dividend payout ratio

 

21.13

%

 

26.71

%

 

23.15

%

 

25.29

%

Efficiency ratio

 

65.25

%

 

71.01

%

 

69.45

%

 

71.77

%

 

Asset Quality Data & Ratios

Total nonperforming loans

$

1,918

 

$

2,123

 

$

1,918

 

$

2,123

 

Total nonperforming assets

$

2,088

 

$

2,251

 

$

2,088

 

$

2,251

 

Net loan charge offs

$

339

 

$

364

 

$

669

 

$

570

 

Reserve for loan losses to total loans

 

0.89

%

 

0.84

%

 

0.89

%

 

0.84

%

Nonperforming loans/total loans

 

0.49

%

 

0.58

%

 

0.49

%

 

0.58

%

Nonperforming assets/total assets

 

0.38

%

 

0.44

%

 

0.38

%

 

0.44

%

Net charge offs / average loans

 

0.35

%

 

0.40

%

 

0.23

%

 

0.22

%

 

Capital Ratios

Average common equity to average total assets

 

8.73

%

 

8.36

%

 

8.46

%

 

8.32

%

Common equity Tier 1 capital ratio

 

12.25

%

 

12.14

%

 

12.25

%

 

12.14

%

Tier 1 capital ratio

 

12.25

%

 

12.14

%

 

12.25

%

 

12.14

%

Tier 1 leverage ratio

 

8.81

%

 

8.89

%

 

8.81

%

 

8.89

%

Total risk based capital ratio

 

13.14

%

 

12.96

%

 

13.14

%

 

12.96

%

Book value per share

$

19.01

 

$

16.67

 

$

19.01

 

$

16.67

 

Tangible book value per share

$

19.01

 

$

16.67

 

$

19.01

 

$

16.67

 

Quarterly

3rd Qtr

2nd Qtr

1st Qtr

4th Qtr

3rd Qtr

Averages

 

2019

 

 

2019

 

 

2019

 

 

2018

 

 

2018

 

 

Assets

$

550,737

 

$

545,292

 

$

542,361

 

$

530,054

 

$

509,416

 

Loans, less unearned income & discount

$

389,531

 

$

383,167

 

$

377,995

 

$

373,324

 

$

356,981

 

Deposits

$

467,055

 

$

476,529

 

$

469,726

 

$

444,256

 

$

417,092

 

Equity

$

48,067

 

$

46,067

 

$

44,431

 

$

42,887

 

$

42,581

 

Return on assets

 

1.04

%

 

0.95

%

 

0.91

%

 

0.85

%

 

0.90

%

Return on equity

 

11.92

%

 

11.27

%

 

11.06

%

 

10.48

%

 

10.74

%

Net income

$

1,432

 

$

1,298

 

$

1,229

 

$

1,123

 

$

1,144

 

Net income per share, basic

$

0.56

 

$

0.51

 

$

0.48

 

$

0.44

 

$

0.45

 

Net income per share, diluted

$

0.56

 

$

0.51

 

$

0.48

 

$

0.44

 

$

0.45

 

Dividends paid per share

$

0.12

 

$

0.12

 

$

0.12

 

$

0.12

 

$

0.12

 

 

Contacts

Karen T. Boyd
Senior Vice President and Treasurer
Phone: (229) 873-3837
investorinfo@sgfc.com

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

Release Summary

Southwest Georgia Financial Corporation Net Income Increases 25% to $1.43 Million in the 2019 Third Quarter

Contacts

Karen T. Boyd
Senior Vice President and Treasurer
Phone: (229) 873-3837
investorinfo@sgfc.com

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