Attached files
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 Reports Results for
Fourth Quarter and 2010
* Net income of $1.86 million for 2010
* Total risk based capital ratio at 17.58%
* Nonperforming assets to total assets reduced to 1.19%
MOULTRIE, GEORGIA, January 25, 2011 -- Southwest Georgia Financial
Corporation (NYSE Amex: SGB), a full service community bank holding company,
today reported net income of $304 thousand, or $0.12 per diluted share, for
the fourth quarter of 2010, down from a net income of $706 thousand, or
$0.28 per diluted share, for the fourth quarter of 2009. The decline in net
income was partially a result of an increase in salaries and employee benefits
of $298 thousand mostly attributed to additional staffing of our new
banking center in Valdosta, Georgia. The fourth quarter earnings comparison
reflected a $221 thousand nonrecurring gain on the sale of securities
recognized in last year's fourth quarter. Other decreases in income were in
service charges on deposit accounts and provision for market value changes in
foreclosed property.
Return on average equity for the fourth quarter of 2010 decreased to 4.42%
compared with 11.11% for the same period in 2009. Return on average assets
for the quarter was 0.40%, a decrease of 58 basis points when compared with
the same period in 2009.
For the year ended December 31, 2010, net income was $1.86 million, or $0.73
per diluted share, compared with a net income of $1.81 million, or $0.71 per
diluted share, for the same period in 2009. Year to date net earnings
increases occurred mainly in net interest income, gain on sales of
securities, reductions in legal fees and FDIC insurance assessment expenses.
Return on average equity decreased to 6.89% for 2010 compared with 7.48% for
the same period last year. Return on average assets decreased to 0.62%
compared with 0.65% for the same period in 2009.
DeWitt Drew, President and CEO of Southwest Georgia Financial commented,
"The economic downturn continues to challenge our region, however, our
strength and stability in the market and our focused efforts enabled us to
achieve solid results in 2010. We continued to invest in our people and
communities, fully aware of the near-term impact that would have on
earnings."
Mr. Drew continued, "While we made progress in establishing our presence in
Valdosta with our new banking center, there is more to be done to drive
market share growth. Accordingly, we announced in early January the
strategic hiring of four new team members with significant experience in the
market area."
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Balance Sheet Trends and Asset Quality
At December 31, 2010, total assets increased $5.4 million, or 1.9%, to
$296.4 million from $291.0 million at the end of last year's fourth quarter.
The bulk of the increase in assets and changes in the asset mix occurred in
investment securities growing $15 million primarily due to reduction in cash
and due from banks balances and employing funds from deposit growth. Also,
total loans decreased $2.5 million to $157.7 million compared with $160.2
million at December 31, 2009.
The loan loss reserve coverage to total loans was 1.75% at the end of the
fourth quarter of 2010 compared with 1.58% at the end of the fourth quarter
of 2009. Nonperforming assets were reduced to $3.5 million, or 1.19% of
total assets, in the fourth quarter of 2010, down from $5.5 million, or
1.88% of total assets in the same period last year. There were $3.3 million
of foreclosed properties in nonperforming assets at the end of the current
quarter compared with $3.8 million at the prior year end.
Mr. Drew noted, "Credit quality continued to improve in the fourth quarter
as our nonperforming assets declined 35.4% year-over-year. We are
encouraged by the progress made in credit quality metrics, but recognize
that an extremely difficult operating environment still exists. We will
continue to monitor credit trends and maintain an appropriate level of
reserve, while preserving the strength of our balance sheet."
Total deposits of $239.5 million were up $4.1 million, or 1.7%, compared
with the previous year-end, due mainly to increases in money market and NOW
accounts. Average deposits were up $13.2 million to $244.1 million for the
fourth quarter of 2010 when compared with the same period last year.
Shareholders' equity was $26.8 million as of December 31, 2010, up from
$25.5 million at December 31, 2009. On a per share basis, book value at year
end was $10.51, up from $10.02 at the end of 2009. The Corporation
maintained a strong capital position with a total risk-based capital ratio
of 17.58% at December 31, 2010, in excess of the minimum regulatory
guidelines of 10% for a well capitalized financial institution. The
Corporation has approximately 2.5 million shares of common stock
outstanding.
Quarterly Revenue and Expenses
Net interest income for the fourth quarter of 2010 decreased slightly to
$2.53 million compared with $2.61 million for the same period in 2009,
reflecting lower interest income partially offset by lower costs of
deposits. During the quarter, the Corporation provisioned $150 thousand for
loan losses compared with the same amount for the fourth quarter of 2009.
Total interest income decreased to $3.18 million when compared with $3.48
million in the fourth quarter of last year, reflecting lower interest income
from investment securities, of $270 thousand, and slightly lower interest
and fees earned on loans of $26 thousand. The Corporation's net interest
margin was 3.84% for the fourth quarter of 2010, down 38 basis points from
the same period last year. The decline in net interest margin was mainly
impacted from securities which were either sold, called or matured, and
reinvested into lower yielding securities or overnight balances carried at
the Federal Reserve Bank. Total interest expense was $653 thousand for the
fourth quarter of 2010, down $214 thousand from the same period a year ago,
primarily due to a lower interest rate environment. The average rate paid
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on interest-bearing time deposits decreased 64 basis points for the quarter
compared with the same period a year ago.
Noninterest income, which was 26.6% of the Corporation's total revenue for
the quarter, decreased to $1.15 million when compared with $1.41 million for
the fourth quarter of 2009. Revenue from service charges on deposit
accounts decreased 14.8% to $379 thousand for the current quarter when
compared with the same period a year ago. Also negatively impacting
noninterest income was a provision for market value changes in foreclosure
property of $75 thousand in the fourth quarter of 2010. These decreases
were partially offset by revenue from mortgage banking services which
increased $64 thousand compared with the prior year's fourth quarter as well
as a gain on the disposition of a split dollar life insurance policy. Last
year's fourth quarter was positively impacted by a $221 thousand gain on the
sale of investment securities.
Total noninterest expense increased to $3.15 million from $2.83 million for
the fourth quarter of 2009. Most of the increase was related to staffing
the new Valdosta banking center of $298 thousand, as well as an increase in
occupancy and equipment expenses of $37 thousand. All other categories of
noninterest expense remained relatively flat.
2010 Results
Net interest income after provision for loan losses for 2010 increased $139
thousand to $9.53 million compared with $9.39 million for the same period in
2009 primarily due to $783 thousand in lower interest paid on deposits,
which more than offset the $580 thousand decline in total interest income.
A decline in interest on securities was due to the sale of longer-term
mortgage-backed securities and high risk corporate notes. The Corporation
recognized a $600 thousand provision for loan losses in 2010, compared with
a provision for loan losses of $536 thousand in 2009. Net interest margin
declined 24 basis points to 3.90% for 2010, when compared with the same
period a year ago.
For 2010, noninterest income was $5.09 million, down from $5.12 million in
the same period of 2009. The majority of the decline was a result of a $275
thousand provision for changes in market value of foreclosed properties and
a decrease in service charges on deposit accounts of $199 thousand compared
with same period last year. These decreases were partially offset by a $535
thousand gain on the sale of securities compared with a $255 thousand gain
in 2009. Other increases in income occurred from insurance, trust, retail
brokerage, and mortgage banking services activities which increased $56
thousand, $28 thousand, $34 thousand and $24 thousand, respectively.
Noninterest expense decreased slightly to $12.18 million in 2010 compared
with $12.19 million in the same period last year. A decrease of $749
thousand, or 21.9%, in other operating expenses was mainly due to lower
legal expense and insurance assessments to the FDIC. This decline was
partially offset by increased expenses related to the new Valdosta banking
center.
Mr. Drew concluded, "Although the economy is slowly recovering, regulatory
burdens continue to outpace growth opportunities. Despite those challenges,
we will continue to focus on providing superior customer service and
proactive support and advice to our customers and believe that our strategic
positioning, strong balance sheet and capital levels position us to sustain
our franchise, capture market share and build customer loyalty."
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Dividends
In February 2010, the Corporation paid a cash dividend of $0.10 per common
share. The Corporation's objective is to retain sufficient equity required
to support efforts to capture greater market share and expand outside of its
historic footprint.
About Southwest Georgia Financial Corporation
Southwest Georgia Financial Corporation is a state-chartered bank holding
company with approximately $296 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 certain brief forward-looking statements
concerning the Company's outlook. The Company cautions that any forward-
looking statements are summary in nature involve risks and uncertainties and
are subject to change based on various important factors, many of which may
be beyond the Company's control. Accordingly, the Company's future
performance and financial results may differ materially from those expressed
or implied in any such forward-looking statements. The following factors,
among others, could affect the Company's actual results and could cause
actual results in the future to differ materially from those expressed or
implied in any forward-looking statements included in this release: the
ability of the bank to manage the interest rate environment, the success of
reducing operating costs, overall economic conditions, customer preferences,
the impact of competition, the ability to execute its strategy for growth.
Additional information regarding these risks and other factors that could
cause the Company's actual results to differ materially from our
expectations is contained in the Company's filings with the Securities and
Exchange Commission. Except as otherwise required by federal securities
laws, Southwest Georgia Financial undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Financial tables follow.
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SOUTHWEST GEORGIA FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF CONDITION
(Dollars in thousands except per share data)
(Unaudited) (Audited) (Audited)
December 31, December 31, December 31,
2010 2009 2008
ASSETS
Cash and due from banks $ 5,112 $ 10,050 $ 7,470
Interest-bearing deposits in banks 10,959 13,247 30
Investment securities available for sale 54,946 62,008 83,212
Investment securities held to maturity 46,255 24,195 12,108
Federal Home Loan Bank stock, at cost 1,650 1,650 1,618
Loans, less unearned income and discount 157,733 160,230 149,070
Allowance for loan losses ( 2,755) ( 2,533) ( 2,376)
Net loans 154,978 157,697 146,694
Premises and equipment 9,221 7,777 5,783
Foreclosed assets, net 3,288 3,832 211
Intangible assets 641 848 1,056
Other assets 9,354 9,704 9,115
Total assets $ 296,404 $ 291,008 $ 267,297
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
NOW accounts $ 29,239 $ 25,075 $ 25,283
Money market 50,468 45,694 35,701
Savings 22,635 21,365 21,213
Certificates of deposit $100,000 and over 32,472 30,190 28,755
Other time accounts 65,859 72,085 64,216
Total interest-bearing deposits 200,673 194,409 175,168
Noninterest-bearing deposits 38,858 41,022 39,373
Total deposits 239,531 235,431 214,541
Federal funds purchased 0 0 430
Other borrowings 5,000 5,000 15,000
Long-term debt 21,000 21,000 10,000
Accounts payable and accrued liabilities 4,098 4,047 4,010
Total liabilities 269,629 265,478 243,981
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 17,772 16,325 14,512
Accumulated other comprehensive income ( 878) ( 676) ( 1,077)
Total 52,889 51,644 49,430
Treasury stock - at cost (**) ( 26,114) ( 26,114) ( 26,114)
Total shareholders' equity 26,775 25,530 23,316
Total liabilities and
shareholders' equity $ 296,404 $ 291,008 $ 267,297
* 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 For the Twelve Months
Ended December 31, Ended December 31,
2010* 2009* 2010* 2009
Interest income:
Interest and fees on loans $ 2,476 $ 2,502 $ 9,944 $ 9,524
Interest and dividend on securities
available for sale 426 852 2,041 3,610
Interest on securities held to maturity 265 109 969 425
Dividends on Federal Home Loan Bank stock 2 2 5 5
Interest on deposits in bank 11 11 58 33
Total interest income 3,180 3,476 13,017 13,597
Interest expense:
Interest on deposits 442 656 2,054 2,885
Interest on federal funds purchased 0 0 0 1
Interest on other borrowings 44 36 154 169
Interest on long-term debt 167 175 681 617
Total interest expense 653 867 2,889 3,672
Net interest income 2,527 2,609 10,128 9,925
Provision for loan losses 150 150 600 536
Net interest income after provision
for losses on loans 2,377 2,459 9,528 9,389
Noninterest income:
Service charges on deposit accounts 379 445 1,567 1,766
Income from trust services 54 55 241 213
Income from retail brokerage services 72 78 300 266
Income from insurance services 277 274 1,125 1,069
Income from mortgage banking services 353 289 1,351 1,327
Provision for foreclosed property losses (75) 0 (275) 0
Net gain on the sale or disposition of assets 52 0 31 0
Net gain on the sale of securities 0 221 535 255
Other income 40 44 214 228
Total noninterest income 1,152 1,406 5,089 5,124
Noninterest expense:
Salary and employee benefits 1,793 1,495 6,971 6,360
Occupancy expense 239 209 891 846
Equipment expense 178 171 739 667
Data processing expense 162 166 692 686
Amortization of intangible assets 52 52 208 208
Other operating expense 730 735 2,676 3,425
Total noninterest expense 3,154 2,828 12,177 12,192
Income before income tax expense 375 1,037 2,440 2,321
Provision for income taxes 71 331 584 508
Net income $ 304 $ 706 $ 1,856 $ 1,813
Net income per share, basic $ 0.12 $ 0.28 $ 0.73 $ 0.71
Net income per share, diluted $ 0.12 $ 0.28 $ 0.73 $ 0.71
Dividends paid per share $ - $ - $ 0.10 $ 0.07
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 2,547,894 2,547,837
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SOUTHWEST GEORGIA FINANCIAL CORPORATION
Financial Highlights
(Dollars in thousands except per share data)
At December 31 2010 2009
Assets $ 296,404 $ 291,008
Loans, less unearned income & discount $ 157,733 $ 160,230
Deposits $ 239,531 $ 235,431
Shareholders' equity $ 26,775 $ 25,530
Three Months Twelve Months
Ended December 31, Ended December 31,
2010 2009 2010 2009
Performance Data & Ratios
Net income $ 304 $ 706 $ 1,856 $ 1,813
Earnings per share, basic $ 0.12 $ 0.28 $ 0.73 $ 0.71
Earnings per share, diluted $ 0.12 $ 0.28 $ 0.73 $ 0.71
Dividends paid per share $ - $ - $ 0.10 $ 0.07
Return on assets 0.40% 0.98% 0.62% 0.65%
Return on equity 4.42% 11.11% 6.89% 7.48%
Net interest margin (tax equivalent) 3.84% 4.22% 3.90% 4.14%
Dividend payout ratio - - 13.73% 9.84%
Efficiency ratio 83.21% 68.16% 77.91% 78.53%
Asset Quality Data & Ratios
Total nonperforming loans $ 186 $ 1,521 $ 186 $ 1,521
Total nonperforming assets $ 3,542 $ 5,484 $ 3,542 $ 5,484
Net loan charge offs $ 398 $ 45 $ 378 $ 379
Reserve for loan losses to total loans 1.75% 1.58% 1.75% 1.58%
Nonperforming loans/total loans 0.12% 0.95% 0.12% 0.95%
Nonperforming assets/total assets 1.19% 1.88% 1.19% 1.88%
Net charge offs (recoveries)/ average loans 0.99% 0.11% 0.24% 0.25%
Capital Ratios
Average common equity to
average total assets 9.14% 8.84% 8.95% 8.71%
Tier 1 capital ratio 16.33% 14.90% 16.33% 14.90%
Tier 1 leverage ratio 8.97% 8.83% 8.97% 8.83%
Total risk based capital ratio 17.58% 16.14% 17.58% 16.14%
Book value per share $ 10.51 $ 10.02 $ 10.51 $ 10.02
Tangible book value per share $ 10.26 $ 9.69 $ 10.26 $ 9.69
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Quarterly 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
Averages 2010 2010 2010 2010 2009
Assets $301,355 $305,419 $298,618 $297,496 $287,348
Loans, less unearned income & discount $159,635 $160,584 $160,761 $160,451 $159,180
Deposits $244,120 $243,395 $242,010 $241,100 $230,903
Equity $ 27,532 $ 27,412 $ 26,727 $ 26,012 $ 25,402
Return on assets 0.40% 0.31% 1.21% 0.55% 0.98%
Return on equity 4.42% 3.49% 13.56% 6.26% 11.11%
Net income $ 304 $ 239 $ 906 $ 407 $ 706
Net income per share, basic $ 0.12 $ 0.09 $ 0.36 $ 0.16 $ 0.28
Net income per share, diluted $ 0.12 $ 0.09 $ 0.36 $ 0.16 $ 0.28
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