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, 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 July 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 - June 30, 1997 and
December 31, 1996.
b. Consolidated statements of income - for the six
months and the three months ended June 30, 1997 and 1996.
c. Consolidated statements of cash flows - for the six
months ended June 30, 1997 and 1996.
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<TABLE>
SOUTHWEST GEORGIA FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
June 30, 1997 and December 31, 1996
<CAPTION>
June 30, December 31,
1997 1996
<S> <C> <C>
ASSETS
Cash and due from banks $ 6,835,588 $ 7,353,763
Interest-bearing deposits with banks 450,628 1,231,827
Federal funds sold 1,750,000 2,010,000
Securities to be held to maturity
Taxable (Market Value $74,145,199 and $75,489,134) 73,827,381 74,980,199
Tax Exempt (Market Value $500,000 and $507,952) 500,000 500,000
Total Investment Securities 74,327,381 75,480,199
Loans 117,283,348 116,365,754
Less: Unearned Income ( 142,100) ( 156,871)
Allowance for loan losses (1,964,868) (2,008,655)
Loans, net 115,176,380 114,200,228
Premises and equipment, net 3,435,031 3,333,961
Other assets 5,775,258 5,873,453
Total assets $ 207,750,266 $ 209,483,431
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing $ 20,592,369 $ 22,023,134
Other time accounts 149,997,374 150,845,940
Total deposits 170,589,743 172,869,074
Federal funds purchased and securities
sold under repurchase agreements 1,960,300 2,176,946
Other borrowed funds 1,500,000 1,500,000
Long-term debt 8,000,000 8,000,000
Other liabilities 1,942,741 2,424,097
Total liabilities 183,992,784 186,970,117
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 21,163,085 19,918,917
Treasury stock 439,209 shares for
1997 and 1996, at cost (2,415,649) (2,415,649)
Total stockholders' equity 23,757,482 22,513,314
Total liabilities and stockholders' equity $ 207,750,266 $ 209,483,431
</TABLE>
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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,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $ 6,200,563 $ 6,027,280 $ 3,122,354 $ 2,993,478
Interest and dividends on securities
held to maturity:
Taxable 2,500,180 2,291,089 1,323,575 1,163,992
Tax exempt 18,750 18,750 9,375 9,375
Interest on other short-term investments 132,058 163,530 47,445 78,880
Total interest income 8,851,551 8,500,649 4,502,749 4,245,725
Interest expense:
Deposits 3,274,066 3,254,671 1,643,331 1,602,797
Other borrowings 345,410 337,379 173,401 167,945
Total interest expense 3,619,476 3,592,050 1,816,732 1,770,742
Net interest income 5,232,075 4,908,599 2,686,017 2,474,983
Provision for loan losses 90,000 90,000 45,000 45,000
Net interest income after
provision for loan losses 5,142,075 4,818,599 2,641,017 2,429,983
Noninterest income:
Service charges on deposit accounts 428,322 418,568 219,702 214,367
Fees for trust services 132,513 104,100 65,258 57,904
Other income 187,698 193,719 82,872 (2,128)
Total noninterest income 748,533 716,387 367,832 270,143
Noninterest expense:
Salaries and employee benefits 1,923,017 1,739,922 970,254 867,942
Occupancy expense 189,114 187,765 94,722 95,424
Equipment expense 216,768 159,049 107,944 85,160
Other operating expenses 1,000,581 1,059,405 497,085 556,216
Total noninterest expenses 3,329,480 3,146,141 1,670,005 1,604,742
Income before income taxes 2,561,128 2,388,845 1,338,844 1,095,384
Provision for income taxes 804,800 786,600 421,700 399,800
Net income $ 1,756,328 $ 1,602,245 $ 917,144 $ 695,584
Earnings per share of common stock:
Net income $ 0.69 $ 0.63 $ 0.36 $ 0.27
Dividends paid 0.20 0.16 0.10 -
Weighted average outstanding shares 2,560,791 2,556,062 2,560,791 2,556,762
</TABLE>
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<TABLE>
SOUTHWEST GEORGIA FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
__________
<CAPTION>
For The Six Months
Ended June 30,
1997 1996
<S> <C> <C>
Operating activities:
Net income $ 1,756,328 $ 1,602,245
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for loan losses 90,000 90,000
Depreciation 224,942 179,661
Net amortization and accretion of investment
securities ( 62,903) 28,751
Net loss (gain) on sale and disposal of assets 2,665 ( 2,560)
Changes in:
Other assets ( 35,503) ( 16,514)
Other liabilities ( 481,356) 145,416
Net cash provided (required) by
operating activities 1,494,173 2,026,999
Investing activities:
Proceeds from maturities of securities held
to maturity 10,030,000 5,000,000
Purchase of securities held to maturity ( 8,814,279) ( 7,181,038)
Net change in other short-term investments 260,000 4,103,118
Net change in loans ( 1,066,152) 1,779,572
Purchase of premises and equipment ( 326,012) ( 172,702)
Proceeds from sales of other assets 131,033 444,615
Net (increase) decrease in interest bearing
deposits with banks 781,199 ( 4,020,163)
Net cash used for investing activities 995,789 ( 46,598)
Financing activities:
Net change in deposits ( 2,279,331) ( 3,038,771)
Net change in federal funds purchased and
securities sold under repurchase agreements ( 216,646) 188,628
Cash dividends declared ( 512,160) ( 409,357)
Proceeds from sale of treasury stock 0 38,693
Net cash provided by (required for)
financing activities ( 3,008,137) ( 3,220,807)
Increase (decrease) in cash and due from bank ( 518,175) ( 1,240,406)
Cash and due from banks - beginning of period 7,353,763 7,645,411
Cash and due from banks - end of period $ 6,835,588 $ 6,405,005
</TABLE>
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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
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Southwest Georgia Financial Corporation's net earnings continue to strengthen
during the year rising over 9 percent from the previous quarter. Net income
for the second quarter is a record $917 thousand or $ .36 per share compared
with $696 thousand or $.27 per share for the same period in 1996, an increase
of 31.8 percent.
For the first six months of 1997, the company earned a record $1.756 million
or $ .69 per share compared to $1.602 million and or $ .63 per share in 1996.
As of June 30, 1997, total assets of the company were $207.8 million, a 2.9
percent increase from a year ago. Total deposits grew 2.3 percent to $170.6
million at the end of the quarter. In other year-to-year comparisons, loans
increased 2.2 percent to $117.1 million and total shareholders' equity
increased 11.9 percent to $23.8 million.
The second quarter's earnings represent a return on average assets of 1.74
percent compared to 1.36 percent in the same quarter in 1996. The second
quarter net interest margin of 5.61 percent was up from the 5.30 percent in
the second quarter of 1996. The return on average equity for the quarter was
15.59 percent compared to 13.12 percent for the same period in 1996. A large
part of the company's second quarter earnings growth over the previous quarter
resulted from dividends received from the stock investment in Empire Financial
Services, Inc. On March 31, 1997, the company's subsidiary, Southwest Georgia
Bank, purchased 50% of the stock of Empire Financial Services, Inc., of
Milledgeville, Georgia, from Regions Financial Corporation, Birmingham,
Alabama.
Net interest income for the second quarter was $2.7 million, an increase of
$212 thousand compared to the same period in 1996. The level of provision for
loan losses remained at $45 thousand for the second quarter. Noninterest
income increased $98 thousand for the second quarter of 1997 compared to the
second quarter of 1996. This rise was primarily attributed to increases in
income from other real estate. Noninterest expense for the second quarter of
1997 increased 4.2 percent from the same period a year ago, primarily due to
increases in expenses from growth of normal operations.
6
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PART II - OTHER INFORMATION
__________
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) Date - April 22, 1997 - annual shareholders' meeting.
(b) Elected the following directors:
Cecil W. Alvis Glenn D. Moon
Albert W. Barber Richard L. Moss
Leo T. Barber, Jr. Lee C. Redding
R. Bradford Burnette Roy Reeves
John H. Clark Jack Short
Robert M. Duggan Johnny R. Slocumb
E. J. McLean, Jr.
Director Emeritus:
Mrs. Kenneth V. Cope
J. Reeves Haley
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 1,898,182 74.10%
Against 9,800 .40%
Total Shares Voted 1,907,982 74.50%
(2) The approval of the Southwest Georgia Financial
Corporation Key Individual Stock Option Plan (the
"Plan").
For 1,840,992 71.90%
Against 14,686 .60%
Abstain 52,304 2.00%
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, 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: August 13, 1997 BY: s/George R. Kirkland
GEORGE R. KIRKLAND
SENIOR VICE-PRESIDENT
FINANCIAL AND ACCOUNTING OFFICER
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