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| 8-K - 8-K - SOUTHWEST GEORGIA FINANCIAL CORP | sgfc8k042412.htm |
News Release
INVESTOR AND MEDIA CONTACT:
George R. Kirkland
Senior Vice President and Treasurer
Phone: (229) 873-3830
investorinfo@sgfc.com
For Immediate Release
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
MOULTRIE, GEORGIA, 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.
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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.
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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 in banks | 21,584 | 14,498 | 15,569 | |||||||||
| Certificates of deposit in other banks | 980 | 980 | 0 | |||||||||
| Investment securities available for sale | 26,581 | 28,641 | 59,143 | |||||||||
| Investment securities held to maturity | 56,173 | 52,339 | 43,737 | |||||||||
| Federal Home Loan Bank stock, at cost | 1,789 | 1,787 | 1,650 | |||||||||
| Loans, less unearned income and discount | 184,307 | 181,302 | 168,298 | |||||||||
| 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 $100,000 and over | 32,813 | 32,629 | 32,121 | |||||||||
| Other time accounts | 58,936 | 59,950 | 63,372 | |||||||||
| Total interest-bearing deposits | 204,212 | 192,425 | 206,914 | |||||||||
| Noninterest-bearing deposits | 57,566 | 56,486 | 50,022 | |||||||||
| 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 accrued liabilities | 3,992 | 4,188 | 4,308 | |||||||||
| Total liabilities | 289,770 | 277,099 | 287,244 | |||||||||
| 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 | 19,602 | 19,133 | 18,046 | |||||||||
| Accumulated other comprehensive income | (502 | ) | (463 | ) | (1,018 | ) | ||||||
| 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 shareholders' equity | $ | 318,751 | $ | 305,650 | $ | 314,153 | ||||||
| * 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 | |||||||||
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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 for sale | 232 | 467 | ||||||
| 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 banks | 4 | 0 | ||||||
| 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 on loans | 2,723 | 2,418 | ||||||
| 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 assets | (56 | ) | 18 | |||||
| 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 | ||||||
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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 & discount | $ | 180,796 | $ | 180,567 | $ | 179,093 | $ | 172,367 | $ | 161,061 | ||||||||||
| 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 share, basic | $ | 0.22 | $ | 0.16 | $ | 0.04 | $ | 0.23 | $ | 0.15 | ||||||||||
| Net income per share, diluted | $ | 0.22 | $ | 0.16 | $ | 0.04 | $ | 0.23 | $ | 0.15 | ||||||||||
| Dividends paid per share | $ | 0.04 | $ | — | $ | — | $ | — | $ | 0.10 |
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