SGB Southwest Georgia Financial Corp

Southwest Georgia Financial Corporation (the “Company”) (NYSE American:SGB), a full-service community bank holding company, today reported results of operations for the first quarter ended March 31, 2019. Comparisons are with the prior-year period unless otherwise noted.

“Our customer-centric approach continues to drive solid results with income before taxes up nearly 20%, or $241 thousand, despite the impact of higher funding costs and investments made in a tight labor market,” commented DeWitt Drew, President and CEO. “While the deposit mix has evolved and deposit costs continue to increase, we have been successful in capitalizing on the right opportunities. Total deposits increased $35 million in the quarter, with more than two-thirds from business customers, and importantly, half of that growth was in noninterest bearing transaction accounts. Over the coming quarters, we will continue to focus on deposit pricing and mix, while also repricing balloon loans at higher rates. We are cautious in our considerations, lending is slowing in our markets, the labor market is tightening, and customers are moving money into higher yielding accounts.”

Income Highlights

• Net income of $1.23 million, or $0.48 per diluted share, was unchanged from the prior-year period. Income before taxes, however, was up $241 thousand as the prior year was positively impacted by an adjustment to estimated tax accruals.
• Net interest income increased $319 thousand to $4.77 million, due to increased interest and fees on loans of $828 thousand, partially offset by higher costs on interest bearing deposits of $678 thousand. The provision for loan losses decreased $99 thousand to $116 thousand.
• Noninterest income increased $243 thousand, due to higher revenue from insurance services, retail brokerage services, and swipe fees from debit cards, and a $143 thousand net gain from the early retirement of debt.
• Higher net interest income and noninterest income was partially offset by higher noninterest expense. Salary and employee benefits were up $155 thousand, largely due to higher hourly wages of $132 thousand and making a number of strategic hires to support the Company’s growth.

Balance Sheet Trends

• Total assets at March 31, 2019, were $551.1 million, up 8% or $40.9 million. Total loans grew 12.7%, or $42.5 million, to $377.7 million, while continuing to maintain high standards of credit quality. Net charge-offs to average loans were 0.19%.
• Total deposits were up nearly 17%, or $70.2 million, to $488.6 million at quarter-end. Federal Home Loan Bank Advances were down $33.3 million, due to strong deposit growth. The average cost of all interest bearing liabilities increased 46 basis point to 1.23%.

Capital Management

• Book value per share grew 9.5% to $17.78 at March 31, 2019.
• In March 2019, the Company paid a quarterly cash dividend of $0.12 per common share. 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, April 23, 2019 at 1:00 p.m. ET. Management will review the financial and operating results for the first quarter of 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, April 30, 2019. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13689431, 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 $551 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.

More information on Southwest Georgia Financial Corporation and Southwest Georgia Bank can be found 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) March 31, December 31, March 31, 2019 2018 2018 ASSETS Cash and due from banks $ 11,348 $ 14,051 $ 9,777 Interest-bearing deposits in banks 37,667 21,448 39,210 Certificates of deposit in other banks 2,732 2,732 1,985 Investment securities available for sale 62,962 58,314 56,228 Investment securities held to maturity 35,185 36,827 43,898 Federal Home Loan Bank stock, at cost 1,020 1,820 2,475 Loans, less unearned income and discount 377,694 376,750 335,185 Allowance for loan losses (3,367) (3,429) (3,170) Net loans 374,327 373,320 332,015 Premises and equipment 14,444 14,574 12,975 Bank properties held for sale 0 0 212 Foreclosed assets, net 128 128 0 Intangible assets 0 4 16 Bank owned life insurance 6,813 6,779 6,595 Other assets 4,446 4,835 4,747 Total assets $ 551,071 $ 534,833 $ 510,133 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Interest bearing business checking $ 33,419 $ 28,071 $ 0 NOW accounts 40,651 35,816 28,318 Money market 163,904 158,730 139,728 Savings 33,580 31,849 32,683 Certificates of deposit $250,000 and over 16,832 16,265 22,636 Other time accounts 85,565 81,214 62,186 Total interest-bearing deposits 373,951 351,945 285,551 Noninterest-bearing deposits 114,668 103,696 132,898 Total deposits 488,619 455,640 418,449   Other borrowings 3,100 10,457 19,471 Long-term debt 10,600 21,171 27,557 Accounts payable and accrued liabilities 3,493 3,946 3,330 Total liabilities 505,811 491,214 468,807 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 18,796 Retained earnings 25,765 24,842 22,383 Accumulated other comprehensive income (1,470) (2,187) (2,399) Total shareholders' equity 45,260 43,619 41,326 Total liabilities and shareholders' equity $ 551,071 $ 534,833 $ 510,133   * 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 Ended March 31, Interest income: 2019*     2018* Interest and fees on loans $ 5,121 $ 4,293 Interest and dividend on securities available for sale 376 331 Interest on securities held to maturity 250 277 Dividends on Federal Home Loan Bank stock 27 32 Interest on deposits in banks 171 118 Interest on certificates of deposit in other banks   17   11 Total interest income   5,962   5,062   Interest expense: Interest on deposits 1,050 372 Interest on other borrowings 36 116 Interest on long-term debt   109   126 Total interest expense   1,196   614 Net interest income 4,766 4,448 Provision for loan losses   116   215 Net interest income after provision for losses on loans   4,650   4,233   Noninterest income: Service charges on deposit accounts 238 224 Income from trust services 57 59 Income from retail brokerage services 107 88 Income from insurance services 436 388 Income from mortgage banking services 0 1 Net gain (loss) on the sale or disposition of assets 1 (7) Net gain on extinguishment of debt 143 0 Other income   254   241 Total noninterest income   1,237   994   Noninterest expense: Salary and employee benefits 2,496 2,341 Occupancy expense 315 290 Equipment expense 308 190 Data processing expense 404 354 Amortization of intangible assets 4 4 Other operating expense   887   817 Total noninterest expense   4,416   3,996   Income before income tax expense 1,472 1,231 Provision for income taxes   243   (1) Net income $ 1,229 $ 1,232   Net income per share, basic $ 0.48 $ 0.48 Net income per share, diluted $ 0.48 $ 0.48 Dividends paid per share $ 0.12 $ 0.11 Basic weighted average shares outstanding   2,545,776   2,544,922 Diluted weighted average shares outstanding   2,545,776   2,544,922             SOUTHWEST GEORGIA FINANCIAL CORPORATION Financial Highlights (Dollars in thousands except per share data) At March 31 2019 2018 Assets $ 551,071 $ 510,133 Loans, less unearned income & discount $ 377,694 $ 335,185 Deposits $ 488,619 $ 418,449 Shareholders' equity $ 45,260 $ 41,326   Three Months Ended March 31, 2019 2018 Performance Data & Ratios Net income $ 1,229 $ 1,232 Earnings per share, basic $ 0.48 $ 0.48 Earnings per share, diluted $ 0.48 $ 0.48 Dividends paid per share $ 0.12 $ 0.11 Return on assets 0.91% 0.99% Return on equity 11.06% 11.89% Net interest margin (tax equivalent) 3.82% 4.05% Dividend payout ratio 24.86% 22.72% Efficiency ratio 72.61% 70.92%   Asset Quality Data & Ratios Total nonperforming loans $ 905 $ 1,506 Total nonperforming assets $ 1,033 $ 1,506 Net loan charge offs $ 178 $ 89 Reserve for loan losses to total loans 0.89% 0.95% Nonperforming loans/total loans 0.24% 0.45% Nonperforming assets/total assets 0.19% 0.30% Net charge offs / average loans 0.19% 0.11%   Capital Ratios Average common equity to average total assets 8.19% 8.33% Common equity Tier 1 capital ratio 12.26% 12.86% Tier 1 capital ratio 12.26% 12.86% Tier 1 leverage ratio 8.61% 8.78% Total risk based capital ratio 13.14% 13.79% Book value per share $ 17.78 $ 16.23 Tangible book value per share $ 17.78 $ 16.23   Quarterly       1st Qtr     4th Qtr     3rd Qtr     2nd Qtr     1st Qtr Averages 2019 2018 2018 2018 2018   Assets $ 542,361 $ 529,842 $ 509,416 $ 504,308 $ 497,562 Loans, less unearned income & discount $ 377,995 $ 373,324 $ 356,981 $ 337,092 $ 331,822 Deposits $ 469,726 $ 444,256 $ 417,092 $ 412,133 $ 405,827 Equity $ 44,431 $ 43,016 $ 42,581 $ 41,747 $ 41,466 Return on assets 0.91% 0.86% 0.90% 0.91% 0.99% Return on equity 11.06% 10.57% 10.74% 11.00% 11.89% Net income $ 1,229 $ 1,159 $ 1,144 $ 1,148 $ 1,232 Net income per share, basic $ 0.48 $ 0.46 $ 0.45 $ 0.45 $ 0.48 Net income per share, diluted $ 0.48 $ 0.46 $ 0.45 $ 0.45 $ 0.48 Dividends paid per share $ 0.12 $ 0.12 $ 0.12 $ 0.12 $ 0.11  

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Company:Karen T. BoydSenior Vice President and TreasurerPhone: (229) 873-3837investorinfo@sgfc.com

Investor Relations:Deborah K. PawlowskiKei Advisors LLCPhone: (716) 843-3908dpawlowski@keiadvisors.com