Southwest Georgia Financial Corporation, a full-service community bank holding company, reported results of operations for the second quarter and six months ended June 30, 2018. Comparisons are to prior-year period unless otherwise noted.

“We are encouraged by our results both in the second quarter and year-to-date as we continued to achieve higher earnings and balance sheet growth. During the recent quarter, we completed the modifications to our deposit offerings, highlighted by the introduction of an interest bearing business checking account. We see this new product as a valuable retention tool and early results have been positive as our customers moved just under $30 million in deposits into that product,” commented DeWitt Drew, President and CEO. “Weather and construction delays on our Tifton location have us behind schedule, but we are working toward a late summer opening.”

Second Quarter and Six-Month Income Highlights

- Net income increased 7% to $1.15 million, or $0.45 per diluted share, from $1.07 million, or $0.42 per diluted share. Net interest income improved 5% to $4.6 million, primarily due to growth in average total loans of $24.2 million. An increase in provision for loan losses of $65 thousand and an increase in other operating expenses partially offset growth in net interest income.

- For the six months ended June 30, 2018, net income was up over 11% to $2.4 million, or $0.94 per diluted share, due mostly to increases in net interest income of 7% and lower effective tax rates in the first half of 2018. Partially offsetting were higher provisions for loan losses, which more than doubled due to continued strong loan growth, increased overhead expenses of $225 thousand, or 15%, and lower noninterest income.

Balance Sheet Trends

- Total assets at June 30, 2018, were $508.2 million, up 8%, or $37.8 million. Total loans grew 7%, or $23.2 million, to $345.9 million, and were funded by a 6% growth in total deposits. Higher levels of liquidity are being held due to the Company’s strong loan pipeline as well as concerns about higher interest rates causing disintermediation.

- Total deposits were up $24.2 million to $415.4 million at June 30, 2018, with a noticeable shift from noninterest-bearing deposits to the new interest bearing business checking account offering.

- Federal Home Loan Bank Advances were up $12.6 million providing further funding for loan growth and liquidity. The average cost of all interest bearing liabilities increased 22 basis points to 0.81%.
Capital Management

- Book value per share grew 4% to $16.47 at June 30, 2018.

- In June 2018, the Company paid a quarterly cash dividend of $0.12 per common share, an increase from $0.11 per common share in March 2018. Southwest Georgia Financial Corporation or its predecessor, Southwest Georgia Bank, has paid cash dividends for 90 consecutive years.