Southwest Georgia Financial Corporation Reports Record Earnings for 2018

Southwest Georgia Financial Corporation (the "Company”) (NYSE American: SGB), a full-service community bank holding company, today reported results of operations for the fourth quarter and year ended December 31, 2018. Comparisons are to prior-year periods unless otherwise noted.

"2018 was a strong year, highlighted by 14% loan growth and 15% deposit growth. And, while the record level of earnings certainly benefited from lower corporate tax rates, it also reflects significant investments made throughout the organization that were necessary to grow organically in the markets in which we currently operate,” commented DeWitt Drew, President and CEO. "We remain encouraged by our entry into the Tifton market and are keenly focused on achieving strong results in 2019.”

Income Highlights

• Achieved record annual net income of $4.7 million, up $875 thousand, or 23%. On a per diluted share basis, earnings were $1.84, up 23%. Net interest income increased 8%, or $1.3 million, to $18.6 million, primarily due to growth in average total loans of $32.2 million and an improved asset mix. Further benefiting net income was a 57% decrease in income tax expense due to the 2017 Tax Cuts and Jobs Act.
• Growth in net interest income more than offset a higher provision, which reflected strong loan growth, and $736 thousand increase in noninterest expense that was due in large part to investments made in people, products and processes, and infrastructure, including the completion of a full service banking center in Tifton, GA.
• Fourth quarter net income was $1.2 million, or $0.46 per diluted share, consistent with the fourth quarter last year when excluding the $419 thousand deferred tax impairment charge in last year’s period. Net interest income for the quarter increased $324 thousand to $4.8 million due to an $818 thousand increase in interest and fees on loans, which was partially offset by a $568 thousand increase in interest on deposit accounts.

Balance Sheet Trends

• Total assets grew more than 9% to $534.7 million, driven by healthy loan growth of $46.6 million, or 14%, to $376.8 million at period end.
• Growth in the loan portfolio was funded by an increase in total deposits of $58.6 million, or nearly 15%, to $455.6 million at December 31, 2018. Given the increasing rate environment and a new business checking product aimed at retaining deposits, the mix has shifted with interest-bearing deposits up 31% to $351.9 million and noninterest-bearing deposits down 19% to $103.7 million. Federal Home Loan Bank Advances were down $15.4 million at year-end due to the strong deposit gathering activities during the year.

Capital Management

• Book value grew 6% to $17.20 per share.
• The Company has a Total Risk-Based Capital Ratio of 12.91%, a Common Equity Tier 1 Capital Ratio of 12.02%, and a Leverage Capital Ratio of 8.97%, all measurably above the federal "well capitalized” standard.
• In December 2018, the Company paid a quarterly cash dividend of $0.12 per common share and for the full year paid $0.47 per share, up 7%. Southwest Georgia Financial Corporation or its predecessor, Southwest Georgia Bank, has paid cash dividends for 90 consecutive years.

Webcast and Conference Call

The Company will host a conference call and webcast on Tuesday, January 22, 2019 at 1:00 p.m. ET. Management will review the financial and operating results for the fourth quarter and full year 2018, 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, January 29, 2019. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13686181, 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 $535 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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