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MOULTRIE, Ga., Oct. 25, 2016 -- 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 | |||||||||
CONTACTS: Company: George R. Kirkland Executive Vice President, CFO and Treasurer Phone: (229) 873-3830 [email protected] Investor Relations: Deborah K. Pawlowski Kei Advisors LLC Phone: (716) 843-3908 [email protected]
