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| 8-K - FORM 8-K - SOUTHWEST GEORGIA FINANCIAL CORP | sgfc8k12412.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 Reports Fourth Quarter and 2011 Results
MOULTRIE, GEORGIA, January 24, 2012 -- Southwest Georgia Financial Corporation (the “Corporation”) (NYSE Amex: SGB), a full-service community bank holding company, today reported net income of $396 thousand for the fourth quarter of 2011, up 30% when compared with net income of $304 thousand for the same period in 2010. On a diluted per share basis, net income was up $0.04 to $0.16 in the fourth quarter of 2011. The growth in net income was driven by a $260 thousand increase in net interest income which resulted from lower funding costs and improved earning asset mix. For the year ended December 31, 2011, net income was $1.5 million, or $0.57 per diluted share, down $395 thousand from net income of $1.9 million, or $0.73 per diluted share, for 2010. The year-over-year decrease in net income reflects increased personnel expenses related to additional staffing in Valdosta, Georgia and higher provisions for loan losses.
DeWitt Drew, President and CEO commented, “Construction on our second banking center in Valdosta is moving forward and we expect to have the branch open by the first quarter of 2012. We now have nineteen full-time employees at our Valdosta locations and are completely staffed for our new banking center.”
Balance Sheet Trends and Asset Quality
At December 31, 2011, total assets were $305.7 million, up $9.3 million from December 31, 2010. The increase was due to considerable loan growth driven by the Valdosta market and funded by an increase in total deposits. Total loans increased $23.6 million, or 14.9%, to $181.3 million when compared with the same period last year while investment securities decreased $19.1 million resulting in a measurably improved earning asset mix. The allowance for loan losses was $3.1 million at the end of 2011, or 1.71% of total loans, up $345 thousand from the end of 2010. Net charge-offs to average loans was up 13 basis points to 0.37% for 2011 compared with 2010. Nonperforming assets remained flat at 1.18% of total assets compared with 1.19% at year-end last year, affected by a decline in foreclosed assets of $930 thousand that was offset by an increase in nonaccrual loans.
Total deposits grew $9.4 million to $248.9 million in 2011. Noninterest-bearing deposit accounts experienced a $17.6 million increase compared with the same period last year which more than compensated for an $8.4 million decrease in trust deposits.
Shareholders’ equity was $28.5 million as of December 31, 2011, up from $26.8 million at December 31, 2010. The Corporation maintains a strong capital position with a total risk-based capital ratio of 16.70% and a Tier 1 leverage ratio of 9.46% at December 31, 2011, well in excess of the minimum regulatory guidelines for a well-capitalized financial institution. Average total capital to average total assets was up to 9.1% at the end of 2011.
Fourth Quarter Revenue
Net interest income before provision for loan losses improved to $2.8 million for the fourth quarter of 2011 from $2.5 million for the same period in 2010. The provision for loan losses was $204 thousand for the fourth quarter of 2011 compared with $150 thousand in the same period last year. Total interest income increased $109 thousand to $3.3 million when compared with the 2010 fourth quarter, due primarily to higher interest and fee income from loans. The Corporation’s net interest margin was 4.29% for the fourth quarter of 2011, up 45 basis points from the same period last year due primarily to the effect of a change in asset mix and much lower deposit costs. Total interest expense was $502 thousand for the 2011 fourth quarter, down $151 thousand from the prior year period.
Noninterest income was $1.2 million for the fourth quarter of 2011, relatively flat compared with the same period in 2010. Total noninterest expense increased $120 thousand to $3.4 million for the fourth quarter of 2011 compared with the same prior-year period. Salaries and employee benefits increased $141 thousand to $1.9 million for the fourth quarter. Other operating expenses decreased $103 thousand due partially to lower FDIC insurance assessments, other losses, and foreclosed property expenses.
Review of 2011
Net interest income for 2011 was $781 thousand higher at $10.9 million compared with $10.1 million for the same period in 2010, primarily driven by lower funding costs. A provision for loan losses of $984 thousand was recognized in 2011 compared with $600 thousand in the same period last year. Net interest margin was 4.11% for 2011, up from 3.90% in the same period a year ago.
Noninterest income was $5.2 million in 2011, down $228 thousand from 2010. Excluding gains and losses on sales of securities and other assets, noninterest income increased $129 thousand in 2011. Income from insurance and mortgage banking services increased $148 thousand and $126 thousand, respectively, compared with 2010. These increases were partially offset by a decrease in income from service charges on deposit accounts of $151 thousand compared with the prior year.
Noninterest expense increased $861 thousand to $13.3 million in 2011 compared with the same period last year. The change was mainly due to a $746 thousand year-over-year increase in salary and employee benefits due primarily to Valdosta’s staffing increase. Also in 2011, pension contributions were $195 thousand higher due to increased pension fund withdrawals and lower returns on the fixed income investment portion of the fund. The cost of providing employee medical insurance has also risen 14% in the past year. Other increases in noninterest expenses were related to the Valdosta market expansion. Other operating expense decreased $80 thousand mostly due to lower FDIC insurance assessments.
Dividends
In February 2011, the Corporation paid a cash dividend of $0.10 per common share. The Corporation’s objective is to maintain sufficient equity required to support efforts to capture greater market share and expand outside of its historic footprint. Southwest Georgia Financial Corporation or its predecessor, Southwest Georgia Bank, has paid cash dividends for 83 consecutive years.
About Southwest Georgia Financial Corporation
Southwest Georgia Financial Corporation
is a state-chartered bank holding company with approximately
$306 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) | (Audited) | ||||||||||
| December 31, | December 31, | December 31, | ||||||||||
| 2011 | 2010 | 2009 | ||||||||||
| ASSETS | ||||||||||||
| Cash and due from banks | $ | 6,552 | $ | 5,112 | $ | 10,050 | ||||||
| Interest-bearing deposits in banks | 14,498 | 10,959 | 13,247 | |||||||||
| Investment securities available for sale | 28,641 | 54,946 | 62,008 | |||||||||
| Investment securities held to maturity | 53,319 | 46,255 | 24,195 | |||||||||
| Federal Home Loan Bank stock, at cost | 1,787 | 1,650 | 1,650 | |||||||||
| Loans, less unearned income and discount | 181,302 | 157,733 | 160,230 | |||||||||
| Allowance for loan losses | (3,100 | ) | (2,755 | ) | (2,533 | ) | ||||||
| Net loans | 178,202 | 154,978 | 157,697 | |||||||||
| Premises and equipment | 9,942 | 9,221 | 7,777 | |||||||||
| Foreclosed assets, net | 2,358 | 3,288 | 3,832 | |||||||||
| Intangible assets | 547 | 641 | 848 | |||||||||
| Bank owned life insurance | 4,593 | 3,029 | 3,124 | |||||||||
| Other assets | 5,228 | 6,325 | 6,580 | |||||||||
| Total assets | $ | 305,667 | $ | 296,404 | $ | 291,008 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
| Deposits: | ||||||||||||
| NOW accounts | $ | 29,841 | $ | 29,239 | $ | 25,075 | ||||||
| Money market | 45,638 | 50,468 | 45,694 | |||||||||
| Savings | 24,367 | 22,635 | 21,365 | |||||||||
| Certificates of deposit $100,000 and over | 32,629 | 32,472 | 30,190 | |||||||||
| Other time accounts | 59,950 | 65,859 | 72,085 | |||||||||
| Total interest-bearing deposits | 192,425 | 200,673 | 194,409 | |||||||||
| Noninterest-bearing deposits | 56,486 | 38,858 | 41,022 | |||||||||
| Total deposits | 248,911 | 239,531 | 235,431 | |||||||||
| Other borrowings | 2,000 | 2,000 | 5,000 | |||||||||
| Long-term debt | 22,000 | 24,000 | 21,000 | |||||||||
| Accounts payable and accrued liabilities | 4,237 | 4,098 | 4,047 | |||||||||
| Total liabilities | 277,148 | 269,629 | 265,478 | |||||||||
| 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 | 19,133 | 17,926 | 16,325 | |||||||||
| Accumulated other comprehensive income | (495 | ) | (1,032 | ) | (676 | ) | ||||||
| Total | 54,633 | 52,889 | 51,644 | |||||||||
| Treasury stock - at cost (**) | (26,114 | ) | (26,114 | ) | (26,114 | ) | ||||||
| Total shareholders' equity | 28,519 | 26,775 | 25,530 | |||||||||
| Total liabilities and shareholders' equity | $ | 305,667 | $ | 296,404 | $ | 291,008 | ||||||
| * 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 | |||||||||
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, | |||||||||||||||
| 2011* | 2010* | 2011* | 2010 | |||||||||||||
| Interest income: | ||||||||||||||||
| Interest and fees on loans | $ | 2,700 | $ | 2,476 | $ | 10,408 | $ | 9,944 | ||||||||
| Interest and dividend on securities available for sale | 248 | 426 | 1,439 | 2,041 | ||||||||||||
| Interest on securities held to maturity | 329 | 265 | 1,207 | 969 | ||||||||||||
| Dividends on Federal Home Loan Bank stock | 4 | 2 | 15 | 5 | ||||||||||||
| Interest on deposits in banks | 8 | 11 | 35 | 58 | ||||||||||||
| Total interest income | 3,289 | 3,180 | 13,104 | 13,017 | ||||||||||||
| Interest expense: | ||||||||||||||||
| Interest on deposits | 300 | 442 | 1,370 | 2,054 | ||||||||||||
| Interest on federal funds purchased | 0 | 0 | 2 | 0 | ||||||||||||
| Interest on other borrowings | 11 | 1 | 42 | 111 | ||||||||||||
| Interest on long-term debt | 191 | 210 | 781 | 724 | ||||||||||||
| Total interest expense | 502 | 653 | 2,195 | 2,889 | ||||||||||||
| Net interest income | 2,787 | 2,527 | 10,909 | 10,128 | ||||||||||||
| Provision for loan losses | 204 | 150 | 984 | 600 | ||||||||||||
| Net interest income after provision for losses on loans | 2,583 | 2,377 | 9,925 | 9,528 | ||||||||||||
| Noninterest income: | ||||||||||||||||
| Service charges on deposit accounts | 340 | 379 | 1,416 | 1,567 | ||||||||||||
| Income from trust services | 50 | 54 | 214 | 241 | ||||||||||||
| Income from retail brokerage services | 76 | 72 | 324 | 300 | ||||||||||||
| Income from insurance services | 339 | 277 | 1,273 | 1,125 | ||||||||||||
| Income from mortgage banking services | 358 | 353 | 1,477 | 1,351 | ||||||||||||
| Provision for foreclosed property losses | (75 | ) | (75 | ) | (300 | ) | (275 | ) | ||||||||
| Net gain (loss) on the sale or disposition of assets | 4 | 52 | (160 | ) | 31 | |||||||||||
| Net gain on the sale of securities | 5 | 0 | 381 | 535 | ||||||||||||
| Net loss on the impairment of equity securities | 0 | 0 | (12 | ) | 0 | |||||||||||
| Other income | 138 | 117 | 546 | 512 | ||||||||||||
| Total noninterest income | 1,235 | 1,229 | 5,159 | 5,387 | ||||||||||||
| Noninterest expense: | ||||||||||||||||
| Salary and employee benefits | 1,934 | 1,793 | 7,717 | 6,971 | ||||||||||||
| Occupancy expense | 236 | 239 | 953 | 891 | ||||||||||||
| Equipment expense | 233 | 178 | 812 | 739 | ||||||||||||
| Data processing expense | 265 | 239 | 1,039 | 990 | ||||||||||||
| Amortization of intangible assets | 56 | 52 | 219 | 208 | ||||||||||||
| Other operating expense | 627 | 730 | 2,596 | 2,676 | ||||||||||||
| Total noninterest expense | 3,351 | 3,231 | 13,336 | 12,475 | ||||||||||||
| Income before income tax expense | 467 | 375 | 1,748 | 2,440 | ||||||||||||
| Provision for income taxes | 71 | 71 | 287 | 584 | ||||||||||||
| Net income | $ | 396 | $ | 304 | $ | 1,461 | $ | 1,856 | ||||||||
| Net income per share, basic | $ | 0.16 | $ | 0.12 | $ | 0.57 | $ | 0.73 | ||||||||
| Net income per share, diluted | $ | 0.16 | $ | 0.12 | $ | 0.57 | $ | 0.73 | ||||||||
| Dividends paid per share | $ | — | $ | — | $ | 0.10 | $ | 0.10 | ||||||||
| 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 | 2,547,865 | 2,547,894 | ||||||||||||
SOUTHWEST GEORGIA FINANCIAL CORPORATION
Financial Highlights
(Dollars in thousands except per share data)
| At December 31 | 2011 | 2010 | |||||||
| Assets | $ | 305,667 | $ | 296,404 | |||||
| Loans, less unearned income & discount | $ | 181,302 | $ | 157,733 | |||||
| Deposits | $ | 248,911 | $ | 239,531 | |||||
| Shareholders' equity | $ | 28,519 | $ | 26,775 | |||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Performance Data & Ratios | ||||||||||||||||
| Net income | $ | 396 | $ | 304 | $ | 1,461 | $ | 1,856 | ||||||||
| Earnings per share, basic | $ | 0.16 | $ | 0.12 | $ | 0.57 | $ | 0.73 | ||||||||
| Earnings per share, diluted | $ | 0.16 | $ | 0.12 | $ | 0.57 | $ | 0.73 | ||||||||
| Dividends paid per share | $ | — | $ | — | $ | 0.10 | $ | 0.10 | ||||||||
| Return on assets | 0.53 | % | 0.40 | % | 0.48 | % | 0.62 | % | ||||||||
| Return on equity | 5.57 | % | 4.42 | % | 5.25 | % | 6.89 | % | ||||||||
| Net interest margin (tax equivalent) | 4.29 | % | 3.84 | % | 4.11 | % | 3.90 | % | ||||||||
| Dividend payout ratio | 0.00 | % | 0.00 | % | 17.44 | % | 13.73 | % | ||||||||
| Efficiency ratio | 80.60 | % | 83.21 | % | 80.63 | % | 77.91 | % | ||||||||
| Asset Quality Data & Ratios | ||||||||||||||||
| Total nonperforming loans | $ | 1,153 | $ | 186 | $ | 1,153 | $ | 186 | ||||||||
| Total nonperforming assets | $ | 3,621 | $ | 3,542 | $ | 3,621 | $ | 3,542 | ||||||||
| Net loan charge offs | $ | 7 | $ | 398 | $ | 638 | $ | 378 | ||||||||
| Reserve for loan losses to total loans | 1.71 | % | 1.75 | % | 1.71 | % | 1.75 | % | ||||||||
| Nonperforming loans/total loans | 0.64 | % | 0.12 | % | 0.64 | % | 0.12 | % | ||||||||
| Nonperforming assets/total assets | 1.18 | % | 1.19 | % | 1.18 | % | 1.19 | % | ||||||||
| Net charge offs / average loans | 0.02 | % | 0.99 | % | 0.37 | % | 0.24 | % | ||||||||
| Capital Ratios | ||||||||||||||||
| Average common equity to average total assets | 9.46 | % | 9.14 | % | 9.06 | % | 8.95 | % | ||||||||
| Tier 1 capital ratio | 15.45 | % | 16.33 | % | 15.45 | % | 16.33 | % | ||||||||
| Tier 1 leverage ratio | 9.46 | % | 8.97 | % | 9.46 | % | 8.97 | % | ||||||||
| Total risk based capital ratio | 16.70 | % | 17.58 | % | 16.70 | % | 17.58 | % | ||||||||
| Book value per share | $ | 11.19 | $ | 10.51 | $ | 11.19 | $ | 10.51 | ||||||||
| Tangible book value per share | $ | 10.98 | $ | 10.26 | $ | 10.98 | $ | 10.26 | ||||||||
| Quarterly | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | |||||||||||||||
| Averages | 2011 | 2011 | 2011 | 2011 | 2010 | |||||||||||||||
| Assets | $ | 300,864 | $ | 302,256 | $ | 312,898 | $ | 314,028 | $ | 301,355 | ||||||||||
| Loans, less unearned income & discount | $ | 180,567 | $ | 179,093 | $ | 172,367 | $ | 161,061 | $ | 159,635 | ||||||||||
| Deposits | $ | 243,893 | $ | 245,051 | $ | 250,335 | $ | 257,083 | $ | 244,120 | ||||||||||
| Equity | $ | 28,457 | $ | 28,446 | $ | 27,515 | $ | 26,909 | $ | 27,532 | ||||||||||
| Return on assets | 0.53 | % | 0.13 | % | 0.76 | % | 0.48 | % | 0.40 | % | ||||||||||
| Return on equity | 5.57 | % | 1.39 | % | 8.59 | % | 5.57 | % | 4.42 | % | ||||||||||
| Net income | $ | 396 | $ | 99 | $ | 591 | $ | 375 | $ | 304 | ||||||||||
| Net income per share, basic | $ | 0.16 | $ | 0.04 | $ | 0.23 | $ | 0.15 | $ | 0.12 | ||||||||||
| Net income per share, diluted | $ | 0.16 | $ | 0.04 | $ | 0.23 | $ | 0.15 | $ | 0.12 | ||||||||||
| Dividends paid per share | $ | — | $ | — | $ | — | $ | 0.10 | $ | — |