Southwest Georgia Financial Corp (SGB, Financial) filed Quarterly Report for the period ended 2009-06-30.
Southwest Georgia Financial Corporation is a state-chartered bank holding company with approximately hundred ninety million in assets headquartered in Moultrie Georgia. Its primary subsidiary Southwest Georgia Bank offers comprehensive financial services to consumer business and governmental customers. The current banking facilities include the main office located in Colquitt County and branch offices located in Baker County Thomas County and Worth County. In addition to conventional banking services the bank provides investment planning and management trust management mortgage banking and commercial and individual insurance products. Insurance products and advice are provided by Southwest Georgia Insurance Services which has an office in Colquitt County. Mortgage banking for primarily commercial properties is provided by Empire Financial Services Inc. a mortgage banking services firm. Southwest Georgia Financial Corp has a market cap of $18 million; its shares were traded at around $7.09 with a P/E ratio of 19.8 and P/S ratio of 1.1. Southwest Georgia Financial Corp had an annual average earning growth of 8.1% over the past 5 years.
per diluted share compared with $.30 per diluted share for the same quarter
in 2008. The weighted average common diluted shares outstanding for the
quarter were 2.548 million, down eight thousand shares from second quarter
last year. The decrease in average quarterly diluted shares was due to the
expiration of some stock options during 2008 and a decrease in stock price.
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For the first six months of 2009, net income was $640 thousand compared with
net income of $1.503 million for the same period in 2008. Earnings per
diluted share for the first six months of 2009 were $0.25, down 57.6%
compared with earnings per diluted share of $0.59 for the same period in 2008.
Decreased net income was due to a $246 thousand increase in loan loss
provision, higher deposit insurance costs, higher legal expenses, and a
measurable decline in mortgage banking revenue.
We measure our performance on selected key ratios, which are provided for the
previous five quarterly periods ended June 30, 2009.
2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
2009 2009 2008 2008 2008
Return on average total assets 0.38% 0.56% (0.17)% ( 3.99)% 1.10%
Return on average total equity 4.37% 6.48% (2.02)% (42.53)% 11.43%
Average shareholders\' equity
to Average total assets 8.66% 8.62% 8.61% 9.37% 9.60%
Net interest margin
(tax equivalent) 4.12% 4.07% 4.26% 4.19% 3.97%
Noninterest income, which was 26.5% of the Corporation\'s total revenue for
the quarter, was $1.207 million for the second quarter, down 18.8% from the
same period in 2008. Mortgage banking services revenue, which is a large
contributor to noninterest income, decreased $299 thousand, or 48.8%, from
last year\'s second quarter as the credit crisis has made the mortgage funding
environment challenging and has restricted loan opportunities. Regardless of
the economic situation, the mortgage banking business has a strong pipeline
of projects and also services a $384 million portfolio of non-recourse loans.
Trust services and retail brokerage services revenue decreased $6 thousand,
or 9.6%, and $23 thousand, or 23.9%, respectively, in the second quarter of
2009. These decreases were partially offset by a slight increase in revenue
from insurance services, and an increase in service charges on deposit
accounts of $46 thousand, or 11.4%, compared with last year\'s second quarter.
A recent change in our service charge rate structure on deposit accounts
influenced the increase.
For the first six months of 2009, noninterest income was $2.424 million, down
24.2% from the same period in 2008. The majority of the decline was a result
of lower mortgage banking services revenue which decreased $671 thousand, or
51.7%, from the same period last year. Income from insurance services
decreased $58 thousand, or 9.3%, when compared with the six-month period in
2008. Revenue from trust services and income from retail brokerage services
decreased $24 thousand and $52 thousand, respectively when compared with the
same period in 2008. These decreases in revenue were partially offset by an
increase in service charges on deposit accounts of $45 thousand, or 5.6%,
when compared with the same period last year as a change in service charge
rate structure on deposit accounts was implemented during the second quarter.
Other factors used in determining the adequacy of the reserve are
management\'s judgment about factors affecting loan quality and their
assumptions about the local and national economy. The allowance for loan
losses was 1.66% of total loans outstanding at June 30, 2009, compared with
1.59% of loans outstanding at December 31, 2008 and 1.80% at June 30, 2008.
Nonperforming assets totaled $2.6 million at June 30, 2009, or 0.97% of total
assets, compared with $3.2 million in nonperforming assets, or 1.19% of total
assets at June 30, 2008. The decrease in non-performing assets was primarily
related to the partial charge-off of one large commercial real estate loan in
our nonaccrual loans category in the fourth quarter of 2008. This loan was
moved to other real estate owned in the second quarter or 2009 due to
foreclosure of the project. Management considers the allowance for loan
losses as of June 30, 2009, adequate to cover potential losses in the loan
portfolio.
Southwest Georgia
Financial Corporation Regulatory Guidelines
For Well Minimum
Risk Based Capital Ratios June 30, 2009 Capitalized Guidelines
Tier 1 capital 14.62% 6.00% 4.00%
Total risk based capital 15.87% 10.00% 8.00%
Tier 1 leverage ratio 8.79% 5.00% 3.00%
Tier 1 capital 14.03% 6.00% 4.00%
Total risk based capital 15.29% 10.00% 8.00%
Tier 1 leverage ratio 8.41% 5.00% 3.00%
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Southwest Georgia Financial Corporation is a state-chartered bank holding company with approximately hundred ninety million in assets headquartered in Moultrie Georgia. Its primary subsidiary Southwest Georgia Bank offers comprehensive financial services to consumer business and governmental customers. The current banking facilities include the main office located in Colquitt County and branch offices located in Baker County Thomas County and Worth County. In addition to conventional banking services the bank provides investment planning and management trust management mortgage banking and commercial and individual insurance products. Insurance products and advice are provided by Southwest Georgia Insurance Services which has an office in Colquitt County. Mortgage banking for primarily commercial properties is provided by Empire Financial Services Inc. a mortgage banking services firm. Southwest Georgia Financial Corp has a market cap of $18 million; its shares were traded at around $7.09 with a P/E ratio of 19.8 and P/S ratio of 1.1. Southwest Georgia Financial Corp had an annual average earning growth of 8.1% over the past 5 years.
Highlight of Business Operations:
On a per share basis, net income for the second quarter decreased 67% to $.10per diluted share compared with $.30 per diluted share for the same quarter
in 2008. The weighted average common diluted shares outstanding for the
quarter were 2.548 million, down eight thousand shares from second quarter
last year. The decrease in average quarterly diluted shares was due to the
expiration of some stock options during 2008 and a decrease in stock price.
-20-
For the first six months of 2009, net income was $640 thousand compared with
net income of $1.503 million for the same period in 2008. Earnings per
diluted share for the first six months of 2009 were $0.25, down 57.6%
compared with earnings per diluted share of $0.59 for the same period in 2008.
Decreased net income was due to a $246 thousand increase in loan loss
provision, higher deposit insurance costs, higher legal expenses, and a
measurable decline in mortgage banking revenue.
We measure our performance on selected key ratios, which are provided for the
previous five quarterly periods ended June 30, 2009.
2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
2009 2009 2008 2008 2008
Return on average total assets 0.38% 0.56% (0.17)% ( 3.99)% 1.10%
Return on average total equity 4.37% 6.48% (2.02)% (42.53)% 11.43%
Average shareholders\' equity
to Average total assets 8.66% 8.62% 8.61% 9.37% 9.60%
Net interest margin
(tax equivalent) 4.12% 4.07% 4.26% 4.19% 3.97%
Noninterest income, which was 26.5% of the Corporation\'s total revenue for
the quarter, was $1.207 million for the second quarter, down 18.8% from the
same period in 2008. Mortgage banking services revenue, which is a large
contributor to noninterest income, decreased $299 thousand, or 48.8%, from
last year\'s second quarter as the credit crisis has made the mortgage funding
environment challenging and has restricted loan opportunities. Regardless of
the economic situation, the mortgage banking business has a strong pipeline
of projects and also services a $384 million portfolio of non-recourse loans.
Trust services and retail brokerage services revenue decreased $6 thousand,
or 9.6%, and $23 thousand, or 23.9%, respectively, in the second quarter of
2009. These decreases were partially offset by a slight increase in revenue
from insurance services, and an increase in service charges on deposit
accounts of $46 thousand, or 11.4%, compared with last year\'s second quarter.
A recent change in our service charge rate structure on deposit accounts
influenced the increase.
For the first six months of 2009, noninterest income was $2.424 million, down
24.2% from the same period in 2008. The majority of the decline was a result
of lower mortgage banking services revenue which decreased $671 thousand, or
51.7%, from the same period last year. Income from insurance services
decreased $58 thousand, or 9.3%, when compared with the six-month period in
2008. Revenue from trust services and income from retail brokerage services
decreased $24 thousand and $52 thousand, respectively when compared with the
same period in 2008. These decreases in revenue were partially offset by an
increase in service charges on deposit accounts of $45 thousand, or 5.6%,
when compared with the same period last year as a change in service charge
rate structure on deposit accounts was implemented during the second quarter.
Other factors used in determining the adequacy of the reserve are
management\'s judgment about factors affecting loan quality and their
assumptions about the local and national economy. The allowance for loan
losses was 1.66% of total loans outstanding at June 30, 2009, compared with
1.59% of loans outstanding at December 31, 2008 and 1.80% at June 30, 2008.
Nonperforming assets totaled $2.6 million at June 30, 2009, or 0.97% of total
assets, compared with $3.2 million in nonperforming assets, or 1.19% of total
assets at June 30, 2008. The decrease in non-performing assets was primarily
related to the partial charge-off of one large commercial real estate loan in
our nonaccrual loans category in the fourth quarter of 2008. This loan was
moved to other real estate owned in the second quarter or 2009 due to
foreclosure of the project. Management considers the allowance for loan
losses as of June 30, 2009, adequate to cover potential losses in the loan
portfolio.
Southwest Georgia
Financial Corporation Regulatory Guidelines
For Well Minimum
Risk Based Capital Ratios June 30, 2009 Capitalized Guidelines
Tier 1 capital 14.62% 6.00% 4.00%
Total risk based capital 15.87% 10.00% 8.00%
Tier 1 leverage ratio 8.79% 5.00% 3.00%
Tier 1 capital 14.03% 6.00% 4.00%
Total risk based capital 15.29% 10.00% 8.00%
Tier 1 leverage ratio 8.41% 5.00% 3.00%
Read the The complete Report