8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 23, 2019

SOUTHWEST GEORGIA FINANCIAL CORPORATION

(Exact name of Registrant as Specified in its Charter)

Georgia	001-12053	58-1392259
(State or other Jurisdiction of	(Commission File Number)	(IRS Employer
Incorporation or Organization)		Identification No.)

201 First Street, S.E.
Moultrie, Georgia	31768
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (229) 985-1120

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act.

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act.

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On July 23, 2019, Southwest Georgia Financial Corporation issued a press release announcing its financial results for the second quarter ended June 30, 2019. A copy of the press release is furnished as Exhibit 99.1 and is incorporated herein by reference.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(c) Exhibits:

The following exhibit is furnished with this report.

Exhibit 99.1: Southwest Georgia Financial Corporation's press release dated July 23, 2019.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

  SOUTHWEST GEORGIA FINANCIAL CORPORATION

  /s/Karen T. Boyd

  By: Karen T. Boyd

 Senior Vice President & Treasurer

 July 23, 2019

  Date

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated July 23, 2019

EX-99.1

News Release

CONTACTS:

Company:	Investor Relations:
Karen T. Boyd	Deborah K. Pawlowski
Senior Vice President and Treasurer	Kei Advisors LLC
Phone: (229) 873-3837	Phone:  (716) 843-3908
investorinfo@sgfc.com	dpawlowski@keiadvisors.com

For Immediate Release

Southwest Georgia Financial Corporation Reports 13% Net Income Growth
for Second Quarter 2019

MOULTRIE, GA, July 23, 2019 -- Southwest Georgia Financial Corporation (the “Company”) (NYSE American: SGB), a full-service community bank holding company, today reported results of operations for the second quarter ended June 30, 2019. Comparisons are with the prior-year period unless otherwise noted.

“The strategic investments made to organically grow our franchise are paying off. Loans grew 12% year-over-year with contributions coming from each of our markets. Our loan growth was funded by 13% deposit growth, which included a meaningful amount of noninterest-bearing transaction accounts. We believe continued disruptions in the banking industry will eventually create additional deposit opportunities for SGB,” commented DeWitt Drew, President and CEO. “We are seeing an extraordinary amount of pricing pressure on both sides of the balance sheet; however, we are encouraged by the continuous growth and true expansion of our net interest margin, which we believe is a direct result of our community and customer centric focus.”

Income Highlights

·Net income increased 13% to $1.3 million, or $0.51 per diluted share, from $1.15 million, or $0.45 per diluted share.

·Net interest income was up $485 thousand to $5.05 million, due to increased interest and fees on loans of
$856 thousand, partially offset by higher costs on interest bearing deposits of $493 thousand. Net interest margin expanded 10 basis points to 4.06%. The provision for loan losses was up $110 thousand to
$250 thousand, due to continued loan growth.

·Noninterest income increased $247 thousand, primarily due to a $244 thousand net gain from the sale of fixed assets. Core noninterest income was up slightly as insurance services growth of 9% offset declines in other business lines.

·Higher net interest income and noninterest income was partially offset by continued investments to drive growth. Noninterest expense was up $418 thousand, or 10%. The largest component of the increase was within salary and employee benefits, which was up $196 thousand.

Balance Sheet Trends

· Total assets at June 30, 2019 were $552.5 million, up 9% or $44.3 million. Total loans grew more than 12%,
or $42.4 million, to $388.3 million, while continuing to maintain high standards of credit quality. Net charge-offs to average loans were 0.16%.

· Total deposits were up nearly 13%, or $52.2 million, to $467.6 million at quarter-end. Federal Home Loan Bank Advances were down $13.3 million, due to strong deposit growth. The average cost of all interest bearing liabilities increased 32 basis points to 1.16%.

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Capital Management

· Book value per share grew 12% to $18.48 at June 30, 2019.

· In June 2019, the Company paid a quarterly cash dividend of $0.12 per common share. Southwest Georgia Financial Corporation or its predecessor, Southwest Georgia Bank, has paid cash dividends for 91 consecutive years.

Webcast and Conference Call

The Company will host a conference call and webcast on Tuesday, July 23, 2019 at 1:00 p.m. ET. Management will review the financial and operating results for the second quarter of 2019, as well as the Company’s strategy and outlook. A question and answer session will follow the formal discussion.

The conference call can be accessed by calling (201) 689-8263. Alternatively, the webcast can be monitored at www.sgb.bank.

A telephonic replay will be available from 4:00 p.m. ET on the day of the teleconference until Tuesday,
July 30, 2019. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13691911, or access the webcast replay at www.sgb.bank/investor-relations, where a transcript will be posted once available.

About Southwest Georgia Financial Corporation

Southwest Georgia Financial Corporation is a state-chartered bank holding company with approximately
$552 million in assets headquartered in Moultrie, Georgia. Its primary subsidiary, Southwest Georgia Bank, offers comprehensive financial services to consumer, business and government customers. The current banking facilities include the main office located in Colquitt County and branch offices located in Baker County, Worth County, Lowndes County and Tift County. In addition to conventional banking services, the Company provides investment planning and management, trust management, and commercial and individual insurance products. Insurance products and advice are provided by Southwest Georgia Insurance Services, which is located in Colquitt County. The Company routinely posts news and other important information on its website at www.sgb.bank.

SAFE HARBOR STATEMENT
This news release contains forward-looking statements, as defined by federal securities laws, including statements about the Company’s financial outlook. These statements are based on current expectations and are provided to assist in the understanding of future financial performance. Such performance involves risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements. Important factors that could cause actual results to differ materially from those contemplated today include a change in the Company’s capital structure, new or expanded regulatory requirements, the success of the Company’s growth strategy, customer preferences, the interest rate environment and other factors described in the Company’s filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q under the sections entitled “Forward-Looking Statements” and “Risk Factors.” The Company undertakes no obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as otherwise required by law.

Financial tables follow.

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SOUTHWEST GEORGIA FINANCIAL CORPORATION

CONSOLIDATED STATEMENT OF CONDITION

(Dollars in thousands except per share data)

	(Unaudited)			(Audited)			(Unaudited)
	June 30,			December 31,			June 30,
	2019			2018			2018
ASSETS
Cash and due from banks	$	13,173		$	14,051		$	7,786
Interest-bearing deposits in banks		17,449			21,448			27,292
Certificates of deposit in other banks		2,977			2,732			1,985
Investment securities available for sale		73,713			58,314			59,281
Investment securities held to maturity		32,546			36,827			41,189
Federal Home Loan Bank stock, at cost		1,870			1,820			2,475
Loans, less unearned income and discount		388,268			376,750			345,852
Allowance for loan losses		(3,465	)		(3,429	)		(3,193	)
Net loans		384,803			373,321			342,659
Premises and equipment		14,264			14,574			13,693
Bank properties held for sale		0			0			212
Foreclosed assets, net		38			128			38
Intangible assets		0			4			12
Bank owned life insurance		6,846			6,779			6,636
Other assets		4,796			4,835			4,895
Total assets	$	552,475		$	534,833		$	508,153
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Interest bearing business checking	$	31,309		$	28,071		$	29,315
NOW accounts		20,773			35,816			54,043
Money market		156,449			158,730			115,022
Savings		33,593			31,849			32,831
Certificates of deposit $100,000 and over		27,257			16,265			22,472
Other time accounts		80,967			81,214			63,449
Total interest-bearing deposits		350,348			351,945			317,132
Noninterest-bearing deposits		117,289			103,695			98,305
Total deposits		467,637			455,640			415,437
Other borrowings		6,314			10,457			19,471
Long-term debt		27,386			21,171			27,557
Accounts payable and accrued liabilities		4,079			3,946			3,754
Total liabilities		505,416			491,214			466,219
Shareholders' equity:
Common stock - par value $1;  5,000,000 shares
authorized; 2,545,776 shares issued (*)		2,546			2,546			2,546
Additional paid-in capital		18,419			18,419			18,707
Retained earnings		26,758			24,841			23,315
Accumulated other comprehensive income		(664	)		(2,187	)		(2,634	)
Total shareholders' equity		47,059			43,619			41,934
Total liabilities and shareholders' equity	$	552,475		$	534,833		$	508,153
*    Common stock - shares outstanding		2,545,776			2,545,776			2,545,776

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SOUTHWEST GEORGIA FINANCIAL CORPORATION

CONSOLIDATED INCOME STATEMENT (unaudited*)

(Dollars in thousands except per share data)

	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
	2019*		2018*		2019*		2018*
Interest income:
Interest and fees on loans	$	5,327	$	4,472	$	10,449	$	8,765
Interest and dividend on securities available for sale		415		363		791		693
Interest on securities held to maturity		237		262		487		540
Dividends on Federal Home Loan Bank stock		21		35		48		68
Interest on deposits in banks		130		148		300		266
Interest on certificates of deposit in other banks		17		12		34		23
Total interest income		6,147		5,292		12,109		10,355
Interest expense:
Interest on deposits		975		481		2,025		854
Interest on federal funds purchased		0		0		0		0
Interest on other borrowings		37		117		73		233
Interest on long-term debt		83		127		193		252
Total interest expense		1,095		725		2,291		1,339
Net interest income		5,052		4,567		9,818		9,016
Provision for loan losses		250		140		366		356
Net interest income after provision for losses on loans		4,802		4,427		9,452		8,660
Noninterest income:
Service charges on deposit accounts		230		266		468		491
Income from trust services		55		63		112		122
Income from retail brokerage services		88		97		195		185
Income from insurance services		456		417		893		805
Income from mortgage banking services		0		1		0		1
Net gain (loss) on the sale or disposition of assets		244		7		245		0
Net gain on extinguishment of debt		0		0		143		0
Other income		234		209		489		450
Total noninterest income		1,307		1,060		2,545		2,054
Noninterest expense:
Salary and employee benefits		2,584		2,388		5,081		4,729
Occupancy expense		319		295		633		584
Equipment expense		311		187		618		377
Data processing expense		405		351		809		705
Amortization of intangible assets		0		4		4		8
Other operating expense		931		907		1,821		1,724
Total noninterest expense		4,550		4,132		8,966		8,127
Income before income tax expense		1,559		1,355		3,031		2,587
Provision for income taxes		261		207		504		207
Net income	$	1,298	$	1,148	$	2,527	$	2,380
Net income per share, basic	$	0.51	$	0.45	$	0.99	$	0.93
Net income per share, diluted	$	0.51	$	0.45	$	0.99	$	0.93
Dividends paid per share	$	0.12	$	0.12	$	0.24	$	0.23
Basic weighted average shares outstanding		2,545,776		2,545,776		2,545,776		2,545,351
Diluted weighted average shares outstanding		2,545,776		2,545,776		2,545,776		2,545,351

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SOUTHWEST GEORGIA FINANCIAL CORPORATION

Financial Highlights

(Dollars in thousands except per share data)

At June 30	2019		2018
Assets	$	552,475	$	508,153
Loans, less unearned income & discount	$	388,268	$	345,852
Deposits	$	467,637	$	415,437
Shareholders' equity	$	47,058	$	41,934

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Performance Data & Ratios
Net income	$	1,298		$	1,148		$	2,527		$	2,380
Earnings per share, basic	$	0.51		$	0.45		$	0.99		$	0.93
Earnings per share, diluted	$	0.51		$	0.45		$	0.99		$	0.93
Dividends paid per share	$	0.12		$	0.12		$	0.24		$	0.23
Return on assets		0.95	%		0.91	%		0.93	%		0.95	%
Return on equity		11.27	%		11.00	%		11.17	%		11.44	%
Net interest margin (tax equivalent)		4.06	%		3.96	%		3.68	%		3.97	%
Dividend payout ratio		23.53	%		24.42	%		24.18	%		24.60	%
Efficiency ratio		70.70	%		71.10	%		71.62	%		71.01	%
Asset Quality Data & Ratios
Total nonperforming loans	$	1,609		$	1,720		$	1,609		$	1,720
Total nonperforming assets	$	1,647		$	1,758		$	1,647		$	1,758
Net loan charge offs (recoveries)	$	152		$	118		$	330		$	206
Reserve for loan losses to total loans		0.89	%		0.92	%		0.89	%		0.92	%
Nonperforming loans/total loans		0.41	%		0.50	%		0.41	%		0.50	%
Nonperforming assets/total assets		0.30	%		0.35	%		0.30	%		0.35	%
Net charge offs (recoveries) / average loans		0.16	%		0.14	%		0.17	%		0.12	%
Capital Ratios
Average common equity to average total assets		8.45	%		8.28	%		8.32	%		8.31	%
Common equity Tier 1 capital ratio		12.18	%		12.68	%		12.18	%		12.68	%
Tier 1 capital ratio		12.18	%		12.68	%		12.18	%		12.68	%
Tier 1 leverage ratio		8.76	%		8.81	%		8.76	%		8.81	%
Total risk based capital ratio		13.07	%		13.59	%		13.07	%		13.59	%
Book value per share	$	18.48		$	16.47		$	18.48		$	16.47
Tangible book value per share	$	18.48		$	16.47		$	18.48		$	16.47

Quarterly	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr
Averages	2019			2019			2018			2018			2018
Assets	$	545,292		$	542,361		$	530,054		$	509,416		$	504,308
Loans, less unearned income & discount	$	383,167		$	377,995		$	373,324		$	356,981		$	337,092
Deposits	$	476,529		$	469,726		$	444,256		$	417,092		$	412,133
Equity	$	46,067		$	44,431		$	42,887		$	42,581		$	41,747
Return on assets		0.95	%		0.91	%		0.85	%		0.90	%		0.91	%
Return on equity		11.27	%		11.06	%		10.48	%		10.74	%		11.00	%
Net income	$	1,298		$	1,229		$	1,123		$	1,144		$	1,148
Net income per share, basic	$	0.51		$	0.48		$	0.44		$	0.45		$	0.45
Net income per share, diluted	$	0.51		$	0.48		$	0.44		$	0.45		$	0.45
Dividends paid per share	$	0.12		$	0.12		$	0.12		$	0.12		$	0.12

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