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 June 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 July 15, 1996
Common Stock, $1 Par Value 1,500,000
<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 - June 30, 1996 and
December 31, 1995.
b. Consolidated statements of income - for the six
months and the three months ended June 30, 1996
and 1995.
c. Consolidated statements of cash flows - for the
six months ended June 30, 1996 and 1995.
1
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<TABLE>
SOUTHWEST GEORGIA FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
__________
<CAPTION>
June 30, December 31,
1996 1995
<S> <C> <C>
ASSETS
Cash and due from banks $ 6,405,005 $ 7,645,411
Interest-bearing deposits with banks 63,477 4,416,595
Investment securities held to maturity:
Taxable (market value $72,604,821
and $72,486,156) 72,979,674 70,827,387
Tax exempt (market value $514,744
and $524,478) 500,000 500,000
Total investment securities 73,479,674 71,327,387
Other short-term investments 335,000 85,000
Loans 114,730,885 116,769,885
Less: Unearned income ( 161,200) ( 177,172)
Allowance for loan losses ( 1,986,076) ( 2,139,532)
Loans, net 112,583,609 114,453,181
Premise and equipment 3,260,442 3,271,607
Other assets 5,743,425 6,164,757
Total assets $ 201,870,632 $ 207,363,938
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 18,470,818 $ 21,509,590
Interest bearing 148,280,203 152,300,366
Total deposits 166,751,021 173,809,956
Short-term borrowings 3,498,628 3,310,000
Long-term borrowings 8,000,000 8,000,000
Accounts payable and accrued
liabilities 2,384,474 2,239,058
Total liabilities 180,634,123 187,359,014
Stockholders' equity:
Common stock - par value $1 authorized
5,000,000 shares; issued 1,500,000
shares 1,500,000 1,500,000
Surplus 1,979,740 1,961,067
Retained earnings 20,185,118 18,992,226
Total 23,664,858 22,453,293
Treasury stock - (220,759 in 1996
and 222,579 in 1995) shares at cost ( 2,428,349) ( 2,448,369)
Total stockholders' equity 21,236,509 20,004,924
Total liabilities and
stockholders' equity $ 201,870,632 $ 207,363,938
</TABLE>
2
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<TABLE>
SOUTHWEST GEORGIA FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
__________
<CAPTION>
For The Six Months For The Three Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Interest income:
Interest and fees
on loans $ 5,930,117 $ 6,019,969 $ 2,937,016 $ 3,026,465
Interest and dividends on
investment securities:
Taxable 2,291,089 2,138,009 1,163,992 1,085,062
Tax exempt 18,750 18,750 9,375 9,375
Interest on other
short-term investments 163,530 201,830 78,880 88,586
Total interest
income 8,403,486 8,378,558 4,189,263 4,209,488
Interest expense:
Deposits 3,254,671 3,154,727 1,602,797 1,630,249
Other borrowings 337,379 337,467 167,945 170,847
Total interest
expense 3,592,050 3,492,194 1,770,742 1,801,096
Net interest income 4,811,436 4,886,364 2,418,521 2,408,392
Provision for loan losses 90,000 60,000 45,000 30,000
Net interest income
after provision
for possible
loan losses 4,721,436 4,826,364 2,373,521 2,378,392
Other income:
Service charges on
deposit accounts 418,568 414,060 214,367 210,118
Other 394,982 385,854 112,238 200,631
Total other income 813,550 799,914 326,605 410,749
Other expense:
Salary and employee
benefits 1,739,922 1,658,305 867,942 832,270
Net occupancy and
equipment expense 346,814 301,964 180,584 152,702
Computer expense 162,718 143,686 81,750 72,207
Other operating expense 896,687 967,541 474,466 489,970
Total other expense 3,146,141 3,071,496 1,604,742 1,547,149
Income before income tax
expense 2,388,845 2,554,782 1,095,384 1,241,992
Provision for income taxes 786,600 856,400 399,800 417,500
Net income $ 1,602,245 $ 1,698,382 $ 695,584 $ 824,492
Income per share based on
weighted average
outstanding shares:
Weighted average
outstanding shares 1,278,031 1,269,763 1,278,381 1,270,390
Net income $ 1.25 $ 1.34 $ .54 $ .65
Dividends per share .32 .30 .32 .30
</TABLE>
3
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<TABLE>
SOUTHWEST GEORGIA FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
__________
<CAPTION>
Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Operating activities:
Net income $ 1,602,245 $ 1,698,382
Adjustments to reconcile net income to
net cash provided by operating
activities:
Provision for loan losses 90,000 60,000
Depreciation 179,661 146,704
Net loss (gain) on disposal of assets ( 2,560) 17,410
Amortization 28,751 51,425
Changes in:
Other assets ( 16,514) (1,780,937)
Other liabilities 145,416 178,654
Net cash provided (required) by
operating activities 2,026,999 371,638
Investing activities:
Proceeds from maturing investment
securities 5,000,000 7,250,000
Purchase of investment securities (7,181,038) (9,907,809)
Decrease on short-term investments 4,103,118 969,159
Net decrease in loans 1,779,572 585,847
Proceeds from sale of other assets 444,615 -
Purchase of premise and equipment ( 172,702) ( 789,753)
Net cash used for
investing activities 3,973,565 (1,892,556)
Financing activities:
Net increase (decrease) in demand
deposits (3,038,771) (1,263,006)
Net increase (decrease) in interest
bearing deposits (4,020,163) 2,419,474
Net increase (decrease) in short-term
borrowings 188,628 (1,128,000)
Dividends ( 409,357) ( 381,303)
Proceeds from sale of treasury stock 38,693 31,578
Net cash provided by
financing activities (7,240,970) ( 321,257)
Increase in cash and due from banks (1,240,406) (1,842,175)
Cash and due from banks - beginning
of period 7,645,411 8,683,397
Cash and due from banks - end of period $ 6,405,005 $ 6,841,222
</TABLE>
4
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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
CONDITIONAND RESULTS OF OPERATIONS
The Corporation's net income before taxes for the six month
period of 1996 was $2.39 million compared to $2.55 million for
the same period in 1995. This $166 thousand or 6.9 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 $25 thousand comparing the
first six 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 $153 thousand increase in interest income
on investment securities primarily relates to a $6.1 million
growth in the average volume of investment securities. The total
yield on the investment portfolio decreased 16 basis points for
the first six 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 $100 thousand or 3.2
percent in the first six months of 1996 compared to the same
period in 1995. This increase in total interest expense is
primarily related to shifting of deposits from savings and NOW
accounts to Certificates of Deposit. The rate on interest-bearing
liabilities increased 10 basis points comparing the first six
months of 1996 to the same period in 1995.
Other income increased $13 thousand or 1.7 percent for the
first six months of 1996 compared to the same period a year ago.
This increase in other non-interest income primarily relates to
increases in security sales commissions and insurance
commissions.
Total other expenses increased $74 thousand or 2.4 percent
for the first six 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, and computer
expense partially offset by decreases in the FDIC assessment,
credit collection and recovery, legal fees, advertising and
promotions and other operating expenses. Management will
continue to monitor expenses closely in an effort to achieve all
cost efficiencies available.
6
<PAGE>
PART II - OTHER INFORMATION
__________
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) Date - May 14, 1996 - annual shareholders' meeting.
(b) Elected the following directors:
Albert W. Barber Richard L. Moss
Leo T. Barber, Jr. Lee C. Redding
John H. Clark Roy Reeves
Robert M. Duggan Jack Short
E. J. McLean, Jr. Johnny R. Slocumb
Glenn D. Moon R. Bradford Burnette
Director Emeritus:
Mrs. Kenneth V. Cope
J. Reeves Haley
Sam Sells, Jr.
Mrs. Hugh Turner
(c) The following matters were voted on at the annual
shareholders' meeting.
Number Of Percent Of
Votes Cast Outstanding Shares
(1) Election Of Directors
For 1,014,663 79.40%
Against 2,000 .20%
(2) Amendment of the Company's Articles Of Incorporation to
authorize the issuance of up to 3,000,000 shares of
Preferred Stock, $1.00 par value per share.
For 1,005,605 78.70%
Against 10,043 .78%
Abstain 2,825 .22%
(3) Amendment of the Company's Articles Of Incorporation to
authorize the Board of Directors to consider constituencies
when evaluating a business combination proposal.
For 1,008,928 79.00%
Against 4,210 .33%
Abstain 4,675 .37%
7
<PAGE>
PART II - OTHER INFORMATION, Continued
__________
(4) Amendment of the Company's Articles Of Incorporation to
eliminate cumulative voting for directors.
For 1,005,747 78.70%
Against 3,605 .28%
Abstain 9,261 .72%
(5) Amendment of the Company's Articles Of Incorporation to
provide for the limitation of director liability.
For 1,001,403 78.40%
Against 10,427 .80%
Abstain 6,783 .50%
(6) Amendment of the Company's Articles Of Incorporation to
require the affirmative vote of the holders of 80% of the
issued and outstanding shares entitled to vote thereon to
amend the Articles Of Incorporation or the By-Laws of the
Company.
For 1,006,883 78.80%
Against 5,880 .49%
Abstain 6,000 .51%
(7) Amendment of the Company's Articles Of Incorporation to
enact a provision to govern potential business combination
transactions with interested shareholders.
For 1,008,045 78.90%
Against 5,705 .48%
Abstain 5,013 .42%
(8) Amendment of the Company's Articles Of Incorporation to
provide that directors can be removed only for cause by the
affirmative vote of the holders of 80% of the issued and
outstanding shares entitled to vote thereon.
For 1,000,123 78.30%
Against 8,077 .65%
Abstain 10,563 .85%
8
<PAGE>
PART II - OTHER INFORMATION, Continued
__________
(9) In the discretion of management, to adjourn the Annual
Meeting to permit solicitation of additional proxies in
the event there are not sufficient affirmative votes to
approve one or more amendments to the Articles of
Incorporation.
For 1,011,011 79.20%
Against 5,380 .42%
Abstain 2,372 .18%
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits - None
b. There have been no reports filed on Form 8-K
for the quarter ended June 30, 1996.
9
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SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SOUTHWEST GEORGIA FINANCIAL CORPORATION
Date: August 13, 1996 BY: s/George R. Kirkland
GEORGE R. KIRKLAND
SENIOR VICE-PRESIDENT
FINANCIAL AND ACCOUNTING OFFICER
10
<PAGE>
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