MOULTRIE, Ga., Jan. 24, 2017 (GLOBE NEWSWIRE) -- Southwest Georgia Financial Corporation (the “Company”) (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, 2016.
“We are very encouraged with the progress we are making. We achieved a second consecutive record of annual earnings per share with a 20% year-over-year improvement in net income,” commented DeWitt Drew, President and CEO. “We experienced excellent growth in both our Valdosta and Moultrie markets, and we are currently applying for a branch in Tifton, where our loan production office has seen good results. As we look forward, we expect continued success in strengthening and growing our core markets. Importantly, our balance sheet, with its liability structure, is well positioned to benefit in a rising interest rate environment, although there will be some lag in realizing the benefit of raising rates in our loan portfolio.”
Fourth Quarter and Year-End Highlights
- Net income was up $0.2 million to $1.0 million in the 2016 fourth quarter, a 19% increase compared with the prior-year period. Earnings per diluted share for the quarter increased 18% to $0.39 from $0.33. Net interest income increased $0.4 million to $4.0 million mostly owing to increased interest and fees on loans in the fourth quarter of 2016.
- Net income for 2016 was $4.0 million, up $0.7 million over the prior year. On a per diluted share basis, earnings were $1.58, a 20% increase when compared with $1.32 in 2015. Record earnings per share were driven by loan growth of 17% and an improved asset mix that was funded by low cost core deposits.
- Annual net interest income was $15.8 million for 2016, up $1.7 million over the prior year. The growth was the result of a $45.1 million increase in average total loans to $281.0 million. Growth in net interest income more than offset the $885 thousand increase in noninterest expense due primarily to investment in personnel for the expanding Valdosta and Tifton markets.
Balance Sheet Trends and Asset Quality
- Total assets at year-end expanded $33.6 million to $448.5 million, an 8% increase over 2015, driven by strong loan growth.
- Total loans increased $41.7 million to $292.5 million from year-end 2015.
- The loan portfolio expansion was funded by a 10% increase in deposits combined with decreases in investments in securities and overnight balances. Total deposits were up $32.5 million to $371.5 million at December 31, 2016, compared with the prior year. Noninterest-bearing deposits increased 15% to $116.6 million year-over-year while interest-bearing deposit accounts increased 7%. The average cost of interest bearing funds was 0.58% for the year.
- High asset quality led to net charge-offs to average loans of just 0.02% for 2016. Nonperforming assets were $373 thousand at December 31, 2016, down $1.3 million from year-end 2015.
Capital Management
- Book value per share at the end of 2016 expanded 6.6% to $15.11, up $0.94 from December 31, 2015.
- In December 2016, the Company paid a quarterly cash dividend of $0.11 per common share. The Company paid dividends of $0.42 per common share in 2016, up 5% increase compared with $0.40 per common share paid in 2015. Southwest Georgia Financial Corporation or its predecessor, Southwest Georgia Bank, has paid cash dividends for 88 consecutive years.
- The Company repurchased 400 shares at an average price of $16.64 per share under the $1.75 million share repurchase program authorized in October 2016.
Webcast and Conference Call
The Company will host a conference call and webcast on Tuesday, January 24, 2017 at 1:00 p.m. ET. Management will review the financial and operating results for the fourth quarter and full year of 2016, 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, January 31, 2017. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13652414, 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 $448 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 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.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. 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) | (Audited) | |||||||
| December 31, | December 31, | December 31, | |||||||
| 2016 | 2015 | 2014 | |||||||
| ASSETS | |||||||||
| Cash and due from banks | $ | 7,700 | $ | 6,157 | $ | 6,783 | |||
| Interest-bearing deposits in banks | 18,819 | 24,923 | 5,776 | ||||||
| Certificates of deposit in other banks | 0 | 245 | 1,470 | ||||||
| Investment securities available for sale | 53,566 | 51,476 | 53,838 | ||||||
| Investment securities held to maturity | 54,603 | 60,889 | 61,588 | ||||||
| Federal Home Loan Bank stock, at cost | 1,874 | 1,869 | 1,560 | ||||||
| Loans, less unearned income and discount | 292,524 | 250,786 | 224,400 | ||||||
| Allowance for loan losses | (3,124 | ) | (3,032 | ) | (3,114 | ) | |||
| Net loans | 289,400 | 247,754 | 221,286 | ||||||
| Premises and equipment | 11,209 | 11,158 | 11,756 | ||||||
| Bank properties held for sale | 212 | 0 | 0 | ||||||
| Foreclosed assets, net | 127 | 82 | 274 | ||||||
| Intangible assets | 35 | 51 | 66 | ||||||
| Bank owned life insurance | 5,357 | 5,231 | 5,104 | ||||||
| Other assets | 5,562 | 5,020 | 4,779 | ||||||
| Total assets | $ | 448,464 | $ | 414,855 | $ | 374,280 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
| Deposits: | |||||||||
| NOW accounts | $ | 47,420 | $ | 25,383 | $ | 22,890 | |||
| Money market | 95,659 | 108,226 | 99,918 | ||||||
| Savings | 29,007 | 27,721 | 28,156 | ||||||
| Certificates of deposit $100,000 and over | 43,235 | 25,189 | 31,367 | ||||||
| Other time accounts | 39,524 | 50,728 | 46,300 | ||||||
| Total interest-bearing deposits | 254,845 | 237,247 | 228,631 | ||||||
| Noninterest-bearing deposits | 116,648 | 101,769 | 81,343 | ||||||
| Total deposits | 371,493 | 339,016 | 309,974 | ||||||
| Other borrowings | 8,448 | 7,591 | 5,133 | ||||||
| Long-term debt | 26,029 | 28,476 | 22,067 | ||||||
| Accounts payable and accrued liabilities | 3,999 | 3,675 | 2,771 | ||||||
| Total liabilities | 409,969 | 378,758 | 339,945 | ||||||
| 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 | 30,333 | 27,369 | 25,015 | ||||||
| Accumulated other comprehensive income | (1,713 | ) | (1,153 | ) | (561 | ) | |||
| Total | 64,615 | 62,211 | 60,449 | ||||||
| Treasury stock - at cost (**) | (26,120 | ) | (26,114 | ) | (26,114 | ) | |||
| Total shareholders' equity | 38,495 | 36,097 | 34,335 | ||||||
| Total liabilities and shareholders' equity | $ | 448,464 | $ | 414,855 | $ | 374,280 | |||
| * Common stock - shares outstanding | 2,547,437 | 2,547,837 | 2,547,837 | ||||||
| ** Treasury stock - shares | 1,746,398 | 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, | ||||||||||
| 2016* | 2015* | 2016* | 2015 | ||||||||
| Interest income: | |||||||||||
| Interest and fees on loans | $ | 3,780 | $ | 3,271 | $ | 14,796 | $ | 12,695 | |||
| Interest and dividend on securities available for sale | 284 | 280 | 1,078 | 1,146 | |||||||
| Interest on securities held to maturity | 324 | 353 | 1,346 | 1,440 | |||||||
| Dividends on Federal Home Loan Bank stock | 22 | 19 | 90 | 73 | |||||||
| Interest on deposits in banks | 38 | 21 | 103 | 62 | |||||||
| Interest on certificates of deposit in other banks | 0 | 2 | 0 | 12 | |||||||
| Total interest income | 4,448 | 3,946 | 17,413 | 15,428 | |||||||
| Interest expense: | |||||||||||
| Interest on deposits | 259 | 208 | 935 | 796 | |||||||
| Interest on other borrowings | 27 | 20 | 104 | 68 | |||||||
| Interest on long-term debt | 144 | 125 | 573 | 453 | |||||||
| Total interest expense | 430 | 353 | 1,612 | 1,317 | |||||||
| Net interest income | 4,018 | 3,593 | 15,801 | 14,111 | |||||||
| Provision for loan losses | 45 | 0 | 160 | 141 | |||||||
| Net interest income after provision for losses on loans | 3,973 | 3,593 | 15,641 | 13,970 | |||||||
| Noninterest income: | |||||||||||
| Service charges on deposit accounts | 278 | 282 | 1,086 | 1,121 | |||||||
| Income from trust services | 53 | 55 | 210 | 245 | |||||||
| Income from retail brokerage services | 84 | 140 | 342 | 421 | |||||||
| Income from insurance services | 354 | 306 | 1,478 | 1,373 | |||||||
| Income from mortgage banking services | 83 | 82 | 354 | 318 | |||||||
| Net gain (loss) on the sale or disposition of assets | 38 | 0 | 38 | 22 | |||||||
| Net gain on the sale of securities | 0 | 0 | 169 | 4 | |||||||
| Other income | 186 | 181 | 782 | 756 | |||||||
| Total noninterest income | 1,076 | 1,046 | 4,459 | 4,260 | |||||||
| Noninterest expense: | |||||||||||
| Salary and employee benefits | 2,191 | 2,034 | 8,766 | 7,914 | |||||||
| Occupancy expense | 276 | 266 | 1,140 | 1,121 | |||||||
| Equipment expense | 228 | 259 | 861 | 923 | |||||||
| Data processing expense | 345 | 303 | 1,349 | 1,224 | |||||||
| Amortization of intangible assets | 4 | 4 | 16 | 16 | |||||||
| Other operating expense | 723 | 724 | 2,782 | 2,831 | |||||||
| Total noninterest expense | 3,767 | 3,590 | 14,914 | 14,029 | |||||||
| Income before income tax expense | 1,282 | 1,049 | 5,186 | 4,201 | |||||||
| Provision for income taxes | 280 | 206 | 1,152 | 827 | |||||||
| Net income | $ | 1,002 | $ | 843 | $ | 4,034 | $ | 3,374 | |||
| Net income per share, basic | $ | 0.39 | $ | 0.33 | $ | 1.58 | $ | 1.32 | |||
| Net income per share, diluted | $ | 0.39 | $ | 0.33 | $ | 1.58 | $ | 1.32 | |||
| Dividends paid per share | $ | 0.11 | $ | 0.10 | $ | 0.42 | $ | 0.40 | |||
| Basic weighted average shares outstanding | 2,547,602 | 2,547,837 | 2,547,778 | 2,547,837 | |||||||
| Diluted weighted average shares outstanding | 2,547,602 | 2,547,837 | 2,547,778 | 2,547,837 | |||||||
| SOUTHWEST GEORGIA FINANCIAL CORPORATION | |||||||||||||||||
| Financial Highlights | |||||||||||||||||
| (Dollars in thousands except per share data) | |||||||||||||||||
| At December 31 | 2016 | 2015 | |||||||||||||||
| Assets | $ | 448,464 | $ | 414,855 | |||||||||||||
| Loans, less unearned income & discount | $ | 292,524 | $ | 250,786 | |||||||||||||
| Deposits | $ | 371,493 | $ | 339,016 | |||||||||||||
| Shareholders' equity | $ | 38,495 | $ | 36,097 | |||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||
| Performance Data & Ratios | |||||||||||||||||
| Net income | $ | 1,002 | $ | 843 | $ | 4,034 | $ | 3,374 | |||||||||
| Earnings per share, basic | $ | 0.39 | $ | 0.33 | $ | 1.58 | $ | 1.32 | |||||||||
| Earnings per share, diluted | $ | 0.39 | $ | 0.33 | $ | 1.58 | $ | 1.32 | |||||||||
| Dividends paid per share | $ | 0.11 | $ | 0.10 | $ | 0.42 | $ | 0.40 | |||||||||
| Return on assets | 0.89 | % | 0.83 | % | 0.94 | % | 0.85 | % | |||||||||
| Return on equity | 10.23 | % | 9.16 | % | 10.51 | % | 9.38 | % | |||||||||
| Net interest margin (tax equivalent) | 3.97 | % | 3.99 | % | 4.14 | % | 4.04 | % | |||||||||
| Dividend payout ratio | 27.97 | % | 30.22 | % | 26.53 | % | 30.21 | % | |||||||||
| Efficiency ratio | 71.06 | % | 73.99 | % | 70.64 | % | 73.03 | % | |||||||||
| Asset Quality Data & Ratios | |||||||||||||||||
| Total nonperforming loans | $ | 246 | $ | 1,546 | $ | 246 | $ | 1,546 | |||||||||
| Total nonperforming assets | $ | 373 | $ | 1,629 | $ | 373 | $ | 1,629 | |||||||||
| Net loan charge offs | $ | 14 | $ | 148 | $ | 68 | $ | 223 | |||||||||
| Reserve for loan losses to total loans | 1.07 | % | 1.21 | % | 1.07 | % | 1.21 | % | |||||||||
| Nonperforming loans/total loans | 0.08 | % | 0.62 | % | 0.08 | % | 0.62 | % | |||||||||
| Nonperforming assets/total assets | 0.08 | % | 0.39 | % | 0.08 | % | 0.39 | % | |||||||||
| Net charge offs / average loans | 0.02 | % | 0.24 | % | 0.02 | % | 0.09 | % | |||||||||
| Capital Ratios | |||||||||||||||||
| Average common equity to average total assets | 8.65 | % | 9.03 | % | 8.90 | % | 9.02 | % | |||||||||
| Common equity Tier 1 capital ratio | 13.03 | % | 14.09 | % | 13.03 | % | 14.09 | % | |||||||||
| Tier 1 capital ratio | 13.03 | % | 14.09 | % | 13.03 | % | 14.09 | % | |||||||||
| Tier 1 leverage ratio | 8.87 | % | 9.13 | % | 8.87 | % | 9.13 | % | |||||||||
| Total risk based capital ratio | 14.04 | % | 15.24 | % | 14.04 | % | 15.24 | % | |||||||||
| Book value per share | $ | 15.11 | $ | 14.17 | $ | 15.11 | $ | 14.17 | |||||||||
| Tangible book value per share | $ | 15.10 | $ | 14.15 | $ | 15.10 | $ | 14.15 | |||||||||
| Quarterly | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | ||||||||||||||||
| Averages | 2016 | 2016 | 2016 | 2016 | 2015 | ||||||||||||||||
| Assets | $ | 452,865 | $ | 435,880 | $ | 420,685 | $ | 415,168 | $ | 407,924 | |||||||||||
| Loans, less unearned income & discount | $ | 291,573 | $ | 289,978 | $ | 279,543 | $ | 262,715 | $ | 246,353 | |||||||||||
| Deposits | $ | 374,346 | $ | 357,421 | $ | 341,569 | $ | 338,399 | $ | 337,194 | |||||||||||
| Equity | $ | 39,178 | $ | 39,110 | $ | 38,080 | $ | 37,097 | $ | 36,833 | |||||||||||
| Return on assets | 0.89 | % | 0.89 | % | 0.96 | % | 1.01 | % | 0.83 | % | |||||||||||
| Return on equity | 10.23 | % | 9.95 | % | 10.63 | % | 11.30 | % | 9.16 | % | |||||||||||
| Net income | $ | 1,002 | $ | 973 | $ | 1,011 | $ | 1,048 | $ | 843 | |||||||||||
| Net income per share, basic | $ | 0.39 | $ | 0.38 | $ | 0.40 | $ | 0.41 | $ | 0.33 | |||||||||||
| Net income per share, diluted | $ | 0.39 | $ | 0.38 | $ | 0.40 | $ | 0.41 | $ | 0.33 | |||||||||||
| Dividends paid per share | $ | 0.11 | $ | 0.11 | $ | 0.10 | $ | 0.10 | $ | 0.10 | |||||||||||