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&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;&lt;b&gt;&lt;u&gt;Basis of Presentation&lt;/u&gt;&lt;/b&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;Southwest Georgia Financial Corporation
(the &amp;#147;Corporation&amp;#148;), a bank-holding company organized under the laws of Georgia, provides deposit, lending, and other
financial services to businesses and individuals primarily in the Southwest region of Georgia. The Corporation and its subsidiaries
are subject to regulation by certain federal and state agencies.&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;The accompanying unaudited consolidated
financial statements have been prepared in accordance with the instructions to Form 10-Q 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. The interim
consolidated financial statements should be read in conjunction with the Corporation&amp;#146;s 2012 Annual Report on Form 10K.&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>The entire disclosure for the business description and basis of presentation concepts.  Business description describes the nature and type of organization including but not limited to organizational structure as may be applicable to holding companies, parent and subsidiary relationships, business divisions, business units, business segments, affiliates and information about significant ownership of the reporting entity.  Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS).</ElementDefenition><ElementReferences>No definition available.</ElementReferences><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>Basis of Presentation</Label></Row></Rows><Footnotes /><IsEquityReport>false</IsEquityReport><ReportName>Basis of Presentation</ReportName><MonetaryRoundingLevel>UnKnown</MonetaryRoundingLevel><SharesRoundingLevel>UnKnown</SharesRoundingLevel><PerShareRoundingLevel>UnKnown</PerShareRoundingLevel><ExchangeRateRoundingLevel>UnKnown</ExchangeRateRoundingLevel><HasCustomUnits>true</HasCustomUnits><IsEmbedReport>false</IsEmbedReport><IsMultiCurrency>false</IsMultiCurrency><ReportType>Sheet</ReportType><RoleURI>http://sgfc.com/role/BasisOfPresentation</RoleURI><NumberOfCols>1</NumberOfCols><NumberOfRows>2</NumberOfRows></InstanceReport>
