Southwest Georgia Financial Corporation Announces Earnings for First Quarter of 2012

  Southwest Georgia Financial Corporation Announces Earnings for First Quarter
  of 2012

  *Net interest margin grew 29 basis points to 4.10%
  *Nonperforming assets decreased 26%
  *Second banking center in Valdosta opened during the first quarter

Business Wire

MOULTRIE, Ga. -- April 24, 2012

Southwest Georgia Financial Corporation (the “Corporation”) (NYSE Amex: SGB),
a full-service community bank holding company, today reported net income of
$571 thousand for the first quarter of 2012, up 52% from net income of $375
thousand for the same period in 2011. On a diluted per share basis, net income
was up $0.07 to $0.22 in the first quarter of 2012. The growth in net income
was driven by increases in net interest income and noninterest income. Net
interest income grew $260 thousand on lower funding costs and improved earning
asset mix while noninterest income increased $172 thousand primarily as a
result of higher income from mortgage banking services.

DeWitt Drew, President and CEO commented, “While the pace of loan growth has
slowed and earnings have benefited from lower provisions for loan losses, we
expect that credit costs will remain elevated over the near term. We continue
to build a specific reserve for foreclosed assets at $75 thousand per quarter
and continue to build the loan loss reserve to accommodate the growth we see
in Valdosta.”

Return on average equity for the first quarter of 2012 improved to 7.88%
compared with 5.57% for the first quarter of 2011. Return on average assets
for the quarter increased to 0.71% compared with 0.48% for the same period in
2011.

Balance Sheet Trends and Asset Quality

At March 31, 2012, total assets were $318.8 million, up $4.6 million from
March 31, 2011. The earning asset mix improved significantly due to loan
growth driven by the Valdosta market. Total loans increased $16.0 million, or
9.5%, to $184.3 million when compared with the same period last year while
investment securities decreased $20.0 million. Interest-bearing deposits with
other banks remained artificially high at $21.6 million, a $6.0 million
increase from the first quarter last year. Nonperforming assets decreased to
0.97% of total assets compared with 1.34% at the end of the first quarter
2011, primarily due to a decline in foreclosed assets of $858 thousand and a
$224 thousand decline in nonaccrual loans. The reserve for loan losses
increased $373 thousand year-over-year, to $3.2 million.

Total deposits grew $4.8 million year-over-year to $261.8 million at March 31,
2012. A 14% year-over-year decrease in public funds accounts was offset by 19%
growth in noninterest-bearing personal and business deposits. Overall,
noninterest bearing accounts increased $7.6 million, or 15%.

Shareholders’ equity was $29.0 million as of March 31, 2012, up from $26.9
million at March 31, 2011. The Corporation maintains a strong capital position
with a total risk-based capital ratio of 16.57% and a Tier 1 leverage ratio of
8.98% at March 31, 2012, well in excess of the minimum regulatory guidelines
for a well-capitalized financial institution. Average total capital to average
total assets was up to 8.98% at the end of the first quarter of 2012.

Revenue

Total interest income increased $156 thousand to $3.3 million when compared
with the first quarter of 2011, reflecting a $286 thousand increase in
interest and fee income on loans. Net interest income before provision for
loan losses improved to $2.8 million for the first quarter of 2012 compared
with $2.6 million for the same period in 2011. The Corporation’s net interest
margin was 4.10% for the first quarter of 2012, up 29 basis points from the
same period last year. Total interest expense was $492 thousand for the first
quarter of 2012, down $105 thousand from the same period a year ago due
primarily to interest paid on deposits. The provision for loan losses was $105
thousand for the first quarter of 2012, down $45 thousand compared to the same
period last year.

Noninterest income was $1.5 million for the first quarter of 2012, up $172
thousand from the same period in 2011 primarily due to a $264 thousand
increase in income from mortgage banking services. Revenue from retail
brokerage and insurance services increased moderately during the quarter.
Partially offsetting these increases, the Corporation recognized a $56
thousand net loss on the sale or disposition of assets, and service charges on
deposit accounts decreased $54 thousand.

Total noninterest expense increased $227 thousand to $3.5 million for the
first quarter of 2012 compared with the first quarter of 2011. The largest
component of noninterest expense, salaries and employee benefits, increased
$116 thousand to $2.0 million for the first quarter mainly due to higher
pension contributions and incentive-based compensation. Equipment and data
processing expense also increased $42 thousand and $21 thousand, respectively,
largely due to our Valdosta expansion and enhancing information technology
infrastructure. Other operating expense increased $38 thousand primarily due
to higher foreclosed property expenses and other operational losses.

Dividends

In March 2012, the Corporation paid a cash dividend of $0.04 per common share
and announced plans to resume paying cash dividends on a quarterly basis.
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

$319 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.

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,
                                  2012            2011             2011
ASSETS
Cash and due from banks         $ 7,458         $ 6,552          $ 6,407
Interest-bearing deposits         21,584          14,498           15,569
in banks
Certificates of deposit in        980             980              0
other banks
Investment securities             26,581          28,641           59,143
available for sale
Investment securities held        56,173          52,339           43,737
to maturity
Federal Home Loan Bank            1,789           1,787            1,650
stock, at cost
Loans, less unearned income       184,307         181,302          168,298
and discount
Allowance for loan losses         (3,244)         (3,100)          (2,871)
Net loans                         181,063         178,202          165,427
Premises and equipment            10,620          9,942            9,204
Foreclosed assets, net            2,327           2,358            3,185
Intangible assets                 491             547              589
Bank owned life insurance         4,635           4,593            3,057
Other assets                      5,050           5,211            6,185
Total assets                    $ 318,751       $ 305,650        $ 314,153
LIABILITIES AND
SHAREHOLDERS' EQUITY
Deposits:
NOW accounts                    $ 31,728        $ 29,841         $ 40,828
Money market                      54,597          45,638           46,712
Savings                           26,138          24,367           23,881
Certificates of deposit           32,813          32,629           32,121
$100,000 and over
Other time accounts               58,936          59,950           63,372
Total interest-bearing            204,212         192,425          206,914
deposits
Noninterest-bearing               57,566          56,486           50,022
deposits
Total deposits                    261,778         248,911          256,936
                                                                   
Other borrowings                  2,000           2,000            2,000
Long-term debt                    22,000          22,000           24,000
Accounts payable and              3,992           4,188            4,308
accrued liabilities
Total liabilities                 289,770         277,099          287,244
Shareholders' equity:
Common stock - par value
$1; 5,000,000 shares
authorized; 4,293,835             4,294           4,294            4,294
shares issued (*)
Additional paid-in capital        31,701          31,701           31,701
Retained earnings                 19,602          19,133           18,046
Accumulated other                 (502)           (463)            (1,018)
comprehensive income
Total                             55,095          54,665           53,023
Treasury stock - at cost          (26,114)        (26,114)         (26,114)
(**)
Total shareholders' equity        28,981          28,551           26,909
Total liabilities and           $ 318,751       $ 305,650        $ 314,153
shareholders' equity
                                                                   
* Common stock - shares           2,547,837       2,547,837        2,547,837
outstanding
** 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
                                                     Ended March 31,
Interest income:                                     2012*         2011*
Interest and fees on loans                           $ 2,701       $ 2,415
Interest and dividend on securities available          232           467
for sale
Interest on securities held to maturity                359           266
Dividends on Federal Home Loan Bank stock              6             4
Interest on deposits in banks                          18            13
Interest on certificates of deposit in other          4            0
banks
Total interest income                                 3,320        3,165
                                                                   
Interest expense:
Interest on deposits                                   292           391
Interest on other borrowings                           11            8
Interest on long-term debt                            189          198
Total interest expense                                492          597
Net interest income                                    2,828         2,568
Provision for loan losses                             105          150
Net interest income after provision for losses        2,723        2,418
on loans
                                                                   
Noninterest income:
Service charges on deposit accounts                    299           353
Income from trust services                             51            55
Income from retail brokerage services                  95            70
Income from insurance services                         375           353
Income from mortgage banking services                  567           303
Provision for foreclosed property losses               (75)          (75)
Net gain (loss) on the sale or disposition of          (56)          18
assets
Net gain on the sale of securities                     0             32
Other income                                          213          188
Total noninterest income                              1,469        1,297
                                                                   
Noninterest expense:
Salary and employee benefits                           2,022         1,906
Occupancy expense                                      234           229
Equipment expense                                      223           181
Data processing expense                                278           257
Amortization of intangible assets                      56            52
Other operating expense                               659          621
Total noninterest expense                             3,472        3,246
                                                                   
Income before income tax expense                       720           469
Provision for income taxes                            149          94
Net income                                           $ 571         $ 375
                                                                   
Net income per share, basic                          $ 0.22        $ 0.15
Net income per share, diluted                        $ 0.22        $ 0.15
Dividends paid per share                             $ 0.04        $ 0.10
Basic weighted average shares outstanding             2,547,837    2,547,837
Diluted weighted average shares outstanding           2,547,837    2,547,949
                                                                     
                                                                     

SOUTHWEST GEORGIA FINANCIAL CORPORATION
Financial Highlights
(Dollars in thousands except per share data)
                                                            
At March 31                                       2012               2011
                                                                     
Assets                                          $ 318,751        $   314,153
Loans, less unearned income & discount          $ 184,307        $   168,298
Deposits                                        $ 261,778        $   256,936
Shareholders' equity                            $ 28,981         $   26,909
                                                                     
                                                  Three Months Ended March 31,
                                                  2012               2011
Performance Data & Ratios
Net income                                      $ 571            $   375
Earnings per share, basic                       $ 0.22           $   0.15
Earnings per share, diluted                     $ 0.22           $   0.15
Dividends paid per share                        $ 0.04           $   0.10
Return on assets                                  0.71%              0.48%
Return on equity                                  7.88%              5.57%
Net interest margin (tax equivalent)              4.10%              3.81%
Dividend payout ratio                             17.84%             67.99%
Efficiency ratio                                  78.10%             81.36%
                                                                     
Asset Quality Data & Ratios
Total nonperforming loans                       $ 651            $   875
Total nonperforming assets                      $ 3,088          $   4,196
Net loan charge offs                            $ (39)           $   34
Reserve for loan losses to total loans            1.76%              1.71%
Nonperforming loans/total loans                   0.35%              0.52%
Nonperforming assets/total assets                 0.97%              1.34%
Net charge offs / average loans                   (0.09)%            0.09%
                                                                     
Capital Ratios
Average common equity to average total assets     8.98%              8.57%
Tier 1 capital ratio                              15.32%             15.76%
Tier 1 leverage ratio                             8.98%              8.71%
Total risk based capital ratio                    16.57%             17.01%
Book value per share                            $ 11.37          $   10.56
Tangible book value per share                   $ 11.18          $   10.33

                                                       
Quarterly            1st Qtr    4th Qtr    3rd Qtr    2nd Qtr    1st Qtr
Averages               2012        2011        2011        2011        2011
                                                                       
Assets               $ 322,726   $ 300,863   $ 302,256   $ 312,898   $ 314,028
Loans, less
unearned income      $ 180,796   $ 180,567   $ 179,093   $ 172,367   $ 161,061
& discount
Deposits             $ 265,993   $ 243,893   $ 245,051   $ 250,335   $ 257,083
Equity               $ 28,984    $ 28,458    $ 28,446    $ 27,515    $ 26,909
Return on assets       0.71%       0.53%       0.13%       0.76%       0.48%
Return on equity       7.88%       5.57%       1.39%       8.59%       5.57%
Net income           $ 571       $ 396       $ 99        $ 591       $ 375
Net income per       $ 0.22      $ 0.16      $ 0.04      $ 0.23      $ 0.15
share, basic
Net income per       $ 0.22      $ 0.16      $ 0.04      $ 0.23      $ 0.15
share, diluted
Dividends paid       $ 0.04      $ -         $ -         $ -         $ 0.10
per share

Contact:

INVESTOR AND MEDIA:
Southwest Georgia Financial Corporation
George R. Kirkland, 229-873-3830
Senior Vice President and Treasurer
investorinfo@sgfc.com
 
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