Southwest Georgia Financial Corporation Reports First Quarter 2019 Results

Southwest Georgia Financial Corporation (the "Company”) (NYSE American:SGB), a full-service community bank holding company, today reported results of operations for the first quarter ended March 31, 2019. Comparisons are with the prior-year period unless otherwise noted.

"Our customer-centric approach continues to drive solid results with income before taxes up nearly 20%, or $241 thousand, despite the impact of higher funding costs and investments made in a tight labor market,” commented DeWitt Drew, President and CEO. "While the deposit mix has evolved and deposit costs continue to increase, we have been successful in capitalizing on the right opportunities. Total deposits increased $35 million in the quarter, with more than two-thirds from business customers, and importantly, half of that growth was in noninterest bearing transaction accounts. Over the coming quarters, we will continue to focus on deposit pricing and mix, while also repricing balloon loans at higher rates. We are cautious in our considerations, lending is slowing in our markets, the labor market is tightening, and customers are moving money into higher yielding accounts.”

Income Highlights

• Net income of $1.23 million, or $0.48 per diluted share, was unchanged from the prior-year period. Income before taxes, however, was up $241 thousand as the prior year was positively impacted by an adjustment to estimated tax accruals.
• Net interest income increased $319 thousand to $4.77 million, due to increased interest and fees on loans of $828 thousand, partially offset by higher costs on interest bearing deposits of $678 thousand. The provision for loan losses decreased $99 thousand to $116 thousand.
• Noninterest income increased $243 thousand, due to higher revenue from insurance services, retail brokerage services, and swipe fees from debit cards, and a $143 thousand net gain from the early retirement of debt.
• Higher net interest income and noninterest income was partially offset by higher noninterest expense. Salary and employee benefits were up $155 thousand, largely due to higher hourly wages of $132 thousand and making a number of strategic hires to support the Company’s growth.

Balance Sheet Trends

• Total assets at March 31, 2019, were $551.1 million, up 8% or $40.9 million. Total loans grew 12.7%, or $42.5 million, to $377.7 million, while continuing to maintain high standards of credit quality. Net charge-offs to average loans were 0.19%.
• Total deposits were up nearly 17%, or $70.2 million, to $488.6 million at quarter-end. Federal Home Loan Bank Advances were down $33.3 million, due to strong deposit growth. The average cost of all interest bearing liabilities increased 46 basis point to 1.23%.

Capital Management

• Book value per share grew 9.5% to $17.78 at March 31, 2019.
• In March 2019, the Company paid a quarterly cash dividend of $0.12 per common share. Southwest Georgia Financial Corporation or its predecessor, Southwest Georgia Bank, has paid cash dividends for 91 consecutive years.

Webcast and Conference Call

The Company will host a conference call and webcast on Tuesday, April 23, 2019 at 1:00 p.m. ET. Management will review the financial and operating results for the first quarter of 2019, 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) 689-8263. Alternatively, the webcast can be monitored at www.sgb.bank.

A telephonic replay will be available from 4:00 p.m. ET on the day of the teleconference until Tuesday, April 30, 2019. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13689431, or access the webcast replay at www.sgb.bank/investor-relations, 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 $551 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, and branch offices located in Baker County, Worth County, Lowndes County and 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.sgb.bank.

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.

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