Southwest Georgia Financial Corporation Reports 13% Net Income Growth for Second Quarter 2019

Southwest Georgia Financial Corporation (the "Company”) (NYSE American: SGB), a full-service community bank holding company, today reported results of operations for the second quarter ended June 30, 2019. Comparisons are with the prior-year period unless otherwise noted.

"The strategic investments made to organically grow our franchise are paying off. Loans grew 12% year-over-year with contributions coming from each of our markets. Our loan growth was funded by 13% deposit growth, which included a meaningful amount of noninterest-bearing transaction accounts. We believe continued disruptions in the banking industry will eventually create additional deposit opportunities for SGB,” commented DeWitt Drew, President and CEO. "We are seeing an extraordinary amount of pricing pressure on both sides of the balance sheet; however, we are encouraged by the continuous growth and true expansion of our net interest margin, which we believe is a direct result of our community and customer centric focus.”

Income Highlights

• Net income increased 13% to $1.3 million, or $0.51 per diluted share, from $1.15 million, or $0.45 per diluted share.
• Net interest income was up $485 thousand to $5.05 million, due to increased interest and fees on loans of $856 thousand, partially offset by higher costs on interest bearing deposits of $493 thousand. Net interest margin expanded 10 basis points to 4.06%. The provision for loan losses was up $110 thousand to $250 thousand, due to continued loan growth.
• Noninterest income increased $247 thousand, primarily due to a $244 thousand net gain from the sale of fixed assets. Core noninterest income was up slightly as insurance services growth of 9% offset declines in other business lines.
• Higher net interest income and noninterest income was partially offset by continued investments to drive growth. Noninterest expense was up $418 thousand, or 10%. The largest component of the increase was within salary and employee benefits, which was up $196 thousand.

Balance Sheet Trends

• Total assets at June 30, 2019 were $552.5 million, up 9% or $44.3 million. Total loans grew more than 12%, or $42.4 million, to $388.3 million, while continuing to maintain high standards of credit quality. Net charge-offs to average loans were 0.16%.
• Total deposits were up nearly 13%, or $52.2 million, to $467.6 million at quarter-end. Federal Home Loan Bank Advances were down $13.3 million, due to strong deposit growth. The average cost of all interest bearing liabilities increased 32 basis points to 1.16%.

Capital Management

• Book value per share grew 12% to $18.48 at June 30, 2019.
• In June 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, July 23, 2019 at 1:00 p.m. ET. Management will review the financial and operating results for the second 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, July 30, 2019. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13691911, 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 $552 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 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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