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, 1997
[ ] 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 October 15, 1997
Common Stock, $1 Par Value 3,000,000
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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, 1997 and December 31, 1996.
b. Consolidated statements of income - for the nine months and the three
months ended September 30, 1997 and 1996.
c. Consolidated statements of cash flows for the nine months ended
September 30, 1997 and 1996.
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<TABLE>
SOUTHWEST GEORGIA FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
September 30, 1997 and December 31, 1996
<CAPTION>
September 30, December 31,
1997 1996
<S> <C> <C>
ASSETS
Cash and due from banks $ 5,398,314 $ 7,353,763
Interest-bearing deposits with banks 8,194,149 1,231,827
Federal funds sold 2,125,000 2,010,000
Securities to be held to maturity
Taxable (market value $70,437,202 and $75,489,134) 69,826,172 74,980,199
Tax exempt (market value $0 and $507,952) 0 500,000
Total investment securities 69,826,172 75,480,199
Loans 120,034,140 116,365,754
Less: Unearned income ( 136,557) ( 156,871)
Allowance for loan losses ( 1,984,196) ( 2,008,655)
Loans, net 117,913,387 114,200,228
Premises and equipment, net 3,373,686 3,333,961
Other assets 5,234,852 5,873,453
Total assets $ 212,065,560 $ 209,483,431
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing $ 22,068,492 $ 22,023,134
Other time accounts 152,326,771 150,845,940
Total deposits 174,395,263 172,869,074
Federal funds purchased and securities
sold under repurchase agreements 1,760,300 2,176,946
Other borrowed funds 1,500,000 1,500,000
Long-term debt 8,000,000 8,000,000
Other liabilities 2,062,230 2,424,097
Total liabilities 187,717,793 186,970,117
Stockholders' equity:
Common stock - par value $1; authorized
5,000,000 shares; issued 3,000,000 shares 3,000,000 3,000,000
Capital surplus 2,010,046 2,010,046
Retained earnings 21,753,370 19,918,917
Treasury stock 439,209 shares for
1997 and 1996, at cost ( 2,415,649) ( 2,415,649)
Total stockholders' equity 24,347,767 22,513,314
Total liabilities and stockholders' equity $ 212,065,560 $ 209,483,431
</TABLE>
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<TABLE>
SOUTHWEST GEORGIA FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
__________
<CAPTION>
For The Nine Months For The Three Months
Ended September 30, Ended September 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $ 9,424,415 $ 9,220,669 $ 3,223,852 $ 3,193,389
Interest and dividends on securities
held to maturity:
Taxable 3,692,500 3,454,106 1,192,320 1,163,017
Tax exempt 18,750 28,125 0 9,375
Interest on other short-term investments 201,336 182,877 69,278 19,347
Total interest income 13,337,001 12,885,777 4,485,450 4,385,128
Interest expense:
Deposits 4,949,237 4,875,218 1,675,171 1,620,547
Other borrowings 515,122 512,727 169,712 175,348
Total interest expense 5,464,359 5,387,945 1,844,883 1,795,895
Net interest income 7,872,642 7,497,832 2,640,567 2,589,233
Provision for loan losses 155,000 135,000 65,000 45,000
Net interest income after
provision for loan losses 7,717,642 7,362,832 2,575,567 2,544,233
Noninterest income:
Service charges on deposit accounts 660,641 639,820 232,319 221,252
Fees for trust services 189,215 168,501 56,702 64,401
Other income 263,010 258,578 75,312 64,859
Total noninterest income 1,112,866 1,066,899 364,333 350,512
Noninterest expense:
Salaries and employee benefits 2,900,489 2,623,562 977,472 883,640
Occupancy expense 295,265 284,596 106,151 96,831
Equipment expense 326,598 276,226 109,830 117,177
Other operating expenses 1,454,364 1,639,188 453,783 579,783
Total noninterest expenses 4,976,716 4,823,572 1,647,236 1,677,431
Income before income taxes 3,853,792 3,606,159 1,292,664 1,217,314
Provision for income taxes 1,251,100 1,221,600 446,300 435,000
Net income $ 2,602,692 $ 2,384,559 $ 846,364 $ 782,314
Earnings per share of common stock:
Net income $ 1.02 $ 0.93 $ 0.33 $ 0.31
Dividends paid 0.30 0.32 0.10 0.16
Weighted average outstanding shares 2,560,791 2,556,875 2,560,791 2,558,482
</TABLE>
3
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<TABLE>
SOUTHWEST GEORGIA FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
For The Nine Months
Ended September 30,
1997
1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,602,692 $ 2,384,559
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for loan losses 155,000 135,000
Depreciation 341,465 301,111
Net amortization and accretion of investment securities ( 61,695) 30,427
Net loss (gain) on sale and disposal of assets 2,665 ( 2,560)
Changes in:
Other assets ( 250,097) ( 36,065)
Other liabilities ( 361,867) ( 21,793)
Net cash provided by operating activities 2,428,163 2,790,679
Investing activities:
Proceeds from maturities of securities held
to maturity 14,530,000 7,000,000
Purchase of securities held to maturity ( 8,814,279) ( 7,181,038)
Net change in other short-term investments ( 115,000) 2,963,710
Net change in loans ( 3,868,159) ( 712,740)
Purchase of premises and equipment ( 381,189) ( 428,726)
Proceeds from sales of other assets 886,033 444,615
Net change in interest bearing deposits with banks ( 6,962,322) ( 3,366,356)
Net cash used for investing activities ( 4,724,916) ( 1,280,535)
Financing activities:
Net change in deposits 1,526,189 ( 1,924,080)
Net change in federal funds purchased and
securities sold under repurchase agreements ( 416,646) 430,306
Cash dividends declared ( 768,239) ( 409,357)
Proceeds from sale of treasury stock 0 38,693
Net cash provided by (required for)
financing activities 341,304 ( 1,864,438)
Increase (decrease) in cash and due from bank ( 1,955,449) ( 354,294)
Cash and due from banks - beginning of period 7,353,763 7,645,411
Cash and due from banks - end of period $ 5,398,314 $ 7,291,117
</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
CONDITION AND RESULTS OF OPERATIONS
Southwest Georgia Financial Corporation's net earnings for the third quarter of
1997 are up more than 8 percent compared with the same quarter a year ago.
Net income for the third quarter is $846 thousand or $ .33 per share compared
with $782 thousand or $ .31 per share for the same period in 1996.
For the first nine months of 1997, the company earned a record $2.603 million
or $ 1.02 per share compared to $2.385 million and or $ .93 per share in 1996.
As of September 30, 1997, total assets of the company were $212.1 million,
a 3.7 percent increase from a year ago. Total deposits grew 3.5 percent to
$174.4 million at the end of the quarter. In other year-to-year comparisons,
loans net of unearned income increased 2.5 percent to $119.9 million and total
shareholders' equity increased 10.6 percent to $24.3 million.
Average assets of $209.5 million for the third quarter increased 2.6 percent
compared to the same period in 1996. This quarter's earnings represent a
return on average assets of 1.62 percent compared to 1.53 percent in the same
quarter in 1996. The third quarter net interest margin of 5.44 percent was
down slightly from 5.48 percent in the third quarter of 1996. The return on
average equity for the quarter was 14.01 percent compared to 14.48 percent for
the same period in 1996. Net income for the third quarter of 1997 is down from
the previous quarter primarily due to the amount of dividends received from the
stock investment in Empire Financial Services, Inc. Dividends from Empire
received during the second quarter of 1997 were greater than normal because
they represented dividends for more than a three-month period.
Net interest income for the third quarter was $2.6 million, an increase of $52
thousand compared to the same period in 1996. The level of provision for loan
losses increased to $65 thousand for the third quarter. Noninterest income
increased $14 thousand for the third quarter of 1997 compared to the third
quarter of 1996. This rise was primarily attributed to increases in income
from service charges on deposit accounts and insurance commissions.
Noninterest expense for the third quarter of 1997 decreased 1.8 percent from
the same period a year ago, primarily due to decreases in FDIC assessment
expenses partially offset by increases in expenses from growth of normal
operations.
6
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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
September 30, 1997.
7
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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: November 13, 1997 BY: s/George R. Kirkland
GEORGE R. KIRKLAND
SENIOR VICE-PRESIDENT
FINANCIAL AND ACCOUNTING OFFICER
8
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 5398
<INT-BEARING-DEPOSITS> 8194
<FED-FUNDS-SOLD> 2125
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 69826
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 119898
<ALLOWANCE> 1984
<TOTAL-ASSETS> 212066
<DEPOSITS> 174395
<SHORT-TERM> 3260
<LIABILITIES-OTHER> 2062
<LONG-TERM> 8000
<COMMON> 3000
0
0
<OTHER-SE> 21348
<TOTAL-LIABILITIES-AND-EQUITY> 212066
<INTEREST-LOAN> 9424
<INTEREST-INVEST> 3711
<INTEREST-OTHER> 201
<INTEREST-TOTAL> 13337
<INTEREST-DEPOSIT> 4949
<INTEREST-EXPENSE> 5464
<INTEREST-INCOME-NET> 7873
<LOAN-LOSSES> 155
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 4977
<INCOME-PRETAX> 3854
<INCOME-PRE-EXTRAORDINARY> 3854
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2603
<EPS-PRIMARY> 1.02
<EPS-DILUTED> 1.02
<YIELD-ACTUAL> 5.42
<LOANS-NON> 117
<LOANS-PAST> 167
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 732
<ALLOWANCE-OPEN> 2009
<CHARGE-OFFS> 237
<RECOVERIES> 58
<ALLOWANCE-CLOSE> 1984
<ALLOWANCE-DOMESTIC> 1970
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 14
</TABLE>
