SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
(Mark One)
[ X ] Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1996
[ ] Transition report under Section 13 or 15(d) of the
Exchange Act.
For the transition period from to .
Commission file number 0-20099
SOUTHWEST GEORGIA FINANCIAL CORPORATION
(Exact Name Of Small Business Issuer as specified in its Charter)
Georgia 58-1392259
(State Or Other Jurisdiction Of (I.R.S. Employer
Incorporation Or Organization) Identification No.)
201 FIRST STREET, S.E., MOULTRIE, GEORGIA 31768
Address Of Principal Executive Offices
(912) 985-1120
Issuer's Telephone Number, Including Area Code
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) (has been subject to such filing requirements for the past 90
days.)
YES X NO
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date of the period covered
by this report.
Class Outstanding At September 30, 1996
Common Stock, $1 Par Value 3,000,000
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following financial statements are provided for Southwest Georgia
Financial Corporation as required by this Item 1.
a. Consolidated balance sheets - September 30, 1996 and
December 31, 1995.
b. Consolidated statements of income - for the nine months
and the three months ended September 30, 1996 and 1995.
c. Consolidated statements of cash flows - for the nine
months ended September 30, 1996 and 1995.
1
<PAGE>
<TABLE>
SOUTHWEST GEORGIA FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
__________
<CAPTION>
September 30, December 31,
1996 1995
<S> <C> <C>
ASSETS
Cash and due from banks $ 7,291,117 $ 7,645,411
Interest-bearing deposits with banks 197,885 4,416,595
Investment securities held to maturity:
Taxable (market value $70,829,432
and $72,486,156) 70,977,998 70,827,387
Tax exempt (market value $510,945
and $524,478) 500,000 500,000
Total investment securities 71,477,998 71,327,387
Other short-term investments 1,340,000 85,000
Loans 117,188,953 116,769,885
Less: Unearned income ( 165,001) ( 177,172)
Allowance for loan losses ( 1,993,031) ( 2,139,532)
Loans, net 115,030,921 114,453,181
Premise and equipment 3,395,016 3,271,607
Other assets 5,762,974 6,164,757
Total assets $ 204,495,911 $ 207,363,938
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 19,585,510 $ 21,509,590
Interest bearing 148,934,010 152,300,366
Total deposits 168,519,520 173,809,956
Short-term borrowings 3,740,306 3,310,000
Long-term borrowings 8,000,000 8,000,000
Accounts payable and accrued
liabilities 2,217,265 2,239,058
Total liabilities 182,477,091 187,359,014
Stockholders' equity:
Common stock - par value $1 authorized
5,000,000 shares; issued 3,000,000 shares 3,000,000 3,000,000
Surplus 1,979,740 1,961,067
Retained earnings 19,467,429 17,492,226
Total 24,447,169 22,453,293
Treasury stock - (441,518 in 1996
and 445,158 in 1995) shares at cost ( 2,428,349) ( 2,448,369)
Total stockholders' equity 22,018,820 20,004,924
Total liabilities and
stockholders' equity $ 204,495,911 $ 207,363,938
</TABLE>
2
<PAGE>
<TABLE>
SOUTHWEST GEORGIA FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
__________
<CAPTION>
For The Nine Months For The Three Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on
loans $ 9,056,231 $ 9,086,190 $ 3,126,114 $ 3,066,221
Interest and dividends
on investment securities:
Taxable 3,454,106 3,192,519 1,163,017 1,054,510
Tax exempt 28,125 28,125 9,375 9,375
Interest on other
short-term investments 182,877 264,277 19,347 62,447
Total interest income 12,721,339 12,571,111 4,317,853 4,192,553
Interest expense:
Deposits 4,875,218 4,844,967 1,620,547 1,690,240
Other borrowings 512,727 514,996 175,348 177,529
Total interest expense 5,387,945 5,359,963 1,795,895 1,867,769
Net interest income 7,333,394 7,211,148 2,521,958 2,324,784
Provision for loan losses 135,000 90,000 45,000 30,000
Net interest income
after provision for
possible loan losses 7,198,394 7,121,148 2,476,958 2,294,784
Other income:
Service charges on
deposit accounts 639,820 616,590 221,252 202,530
Other 591,517 645,262 196,535 259,408
Total other income 1,231,337 1,261,852 417,787 461,938
Other expense:
Salary and employee
benefits 2,623,562 2,495,514 883,640 837,209
Net occupancy and
equipment expense 560,822 481,056 214,008 179,092
Computer expense 243,826 228,201 81,108 84,515
Other operating expense 1,395,362 1,432,646 498,675 465,105
Total other expense 4,823,572 4,637,417 1,677,431 1,565,921
Income before income tax
expense 3,606,159 3,745,583 1,217,314 1,190,801
Provision for income taxes 1,221,600 1,266,500 435,000 410,100
Net income $ 2,384,559 $ 2,479,083 $ 782,314 $ 780,701
Income per share based on
weighted average
outstanding shares:
Weighted average
outstanding shares 2,556,875 2,543,062 2,558,482 2,547,588
Net income $ .93 $ .97 $ .31 $ .31
Dividends per share .16 .15 .00 .00
</TABLE>
3
<PAGE>
<TABLE>
SOUTHWEST GEORGIA FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
__________
<CAPTION>
Nine Months Ended
September 30,
1996 1995
<S> <C> <C>
Operating activities:
Net income $ 2,384,559 $ 2,479,083
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for loan losses 135,000 90,000
Depreciation 301,111 237,906
Net (gain) loss on disposal of assets ( 2,560) 14,171
Amortization 30,427 79,417
Changes in:
Other assets ( 36,065) ( 1,935,775)
Other liabilities ( 21,793) 105,107
Net cash provided by operating
activities 2,790,679 1,069,909
Investing activities:
Proceeds from maturing investment
securities 7,000,000 10,250,000
Purchase of investment securities ( 7,181,038) (11,898,422)
Decrease in short-term investments 2,963,710 140,504
Net decrease (increase) in loans ( 712,740) 4,980,067
Proceeds from sale of other assets 444,615 -
Purchase of premise and equipment ( 428,726) ( 869,994)
Net cash provided by investing
activities 2,085,821 2,602,155
Financing activities:
Net decrease in demand deposits ( 1,924,080) ( 3,343,916)
Net increase (decrease) in interest
bearing deposits ( 3,366,356) ( 1,143,445)
Net decrease in short-term borrowings 430,306 ( 928,000)
Dividends ( 409,357) ( 381,303)
Proceeds from sale of Treasury stock 38,693 98,658
Net cash provided by financing
activities ( 5,230,794) ( 5,698,006)
Increase (decrease) in cash and due
from banks ( 354,294) ( 2,025,942)
Cash and due from banks - beginning
of period 7,645,411 8,683,397
Cash and due from banks - end of period $ 7,291,117 $ 6,657,455
</TABLE>
4
<PAGE>
SOUTHWEST GEORGIA FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
_________
Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-QSB and
therefore do not include all information and footnotes necessary for
a fair presentation of financial position, results of operations, and
changes in financial position in conformity with generally accepted
accounting principles.
The interim financial statements furnished reflect all adjustments
which are, in the opinion of management, necessary to a fair
statement of the results for the interim periods presented.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - SEPTEMBER 30, 1996
The Corporation's net income before taxes for the nine month
period of 1996 was $3.61 million compared to $3.75 million for
the same period in 1995. This $139 thousand or 3.7 percent
decrease in earnings before taxes is primarily attributable to
increases in interest expense, the provisions for loan losses and
other various non-interest expenses.
Total interest income increased $150 thousand comparing the first
nine months in 1996 to the same period in 1995. The majority of
the increase in interest income occurred in interest and
dividends on investment securities offset by a decrease in
interest income on other short-term investments and a decrease in
interest on loans. The $262 thousand increase in interest income
on investment securities primarily relates to a $6.6 million
growth in the average volume of investment securities. The total
yield on the investment portfolio decreased 14 basis points for
the first nine months of 1996 compared to the same period in
1995. This decrease in yield is attributable to maturing
investments being reinvested at lower rates.
The total interest expense increased $28 thousand or 0.52 percent
in the first nine months of 1996 compared to the same period in
1995. Over this period, the average balances on interest bearing
deposits grew less than $1 million or 0.40 percent. The increase
in interest expense is primarily related to a rise in rates on
time deposits partially offset by lower rates on savings
deposits. The rate on time deposits increased 26 basis points
while the rate on savings deposits declined .38 basis points
comparing the first nine months of 1996 to the same period in
1995.
Other income decreased $31 thousand or 2.4 percent for the first
nine months of 1996 compared to the same period a year ago. This
decrease in other non-interest income primarily relates to a
decrease in income from other real estate owned.
Total other expenses increased $186 thousand or 4.0 percent for
the first nine months of 1996 compared to the same period in
1995. This increase in other non-interest expenses primarily
resulted from increases in salary and employee benefits, net
occupancy and equipment expense, professional fees, travel and
entertainment, and computer expense partially offset by decreases
in the FDIC assessment, legal fees, advertising and promotions,
charitable contributions, and amortization of premium on
purchased deposits. Management will continue to monitor expenses
closely in an effort to achieve all cost efficiencies available.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
SOUTHWEST GEORGIA FINANCIAL CORPORATION
Date: November 1, 1996 BY: s/George R. Kirkland
GEORGE R. KIRKLAND
SENIOR VICE-PRESIDENT
FINANCIAL AND ACCOUNTING OFFICER
7
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 7291
<INT-BEARING-DEPOSITS> 198
<FED-FUNDS-SOLD> 1340
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 71478
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 117188
<ALLOWANCE> 1993
<TOTAL-ASSETS> 204496
<DEPOSITS> 168520
<SHORT-TERM> 3740
<LIABILITIES-OTHER> 2217
<LONG-TERM> 8000
<COMMON> 3000
0
0
<OTHER-SE> 19019
<TOTAL-LIABILITIES-AND-EQUITY> 204496
<INTEREST-LOAN> 9056
<INTEREST-INVEST> 3482
<INTEREST-OTHER> 183
<INTEREST-TOTAL> 12721
<INTEREST-DEPOSIT> 4875
<INTEREST-EXPENSE> 5388
<INTEREST-INCOME-NET> 7333
<LOAN-LOSSES> 135
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 4824
<INCOME-PRETAX> 3606
<INCOME-PRE-EXTRAORDINARY> 3606
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2385
<EPS-PRIMARY> .93
<EPS-DILUTED> .93
<YIELD-ACTUAL> 5.20
<LOANS-NON> 94
<LOANS-PAST> 233
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 575
<ALLOWANCE-OPEN> 2140
<CHARGE-OFFS> 333
<RECOVERIES> 51
<ALLOWANCE-CLOSE> 1993
<ALLOWANCE-DOMESTIC> 1115
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 878
</TABLE>
