Southwest Georgia Financial Corporation, a full-service community bank holding company, reported results of operations for the fourth quarter and year ended December 31, 2019. Comparisons are to prior-year periods unless otherwise noted.

“2019 was a record year as our team of exceptional bankers grew loans and improved our deposit mix, all while increasing asset yields over 20 basis points and decreasing funding costs by almost 20 basis points. For the fourth quarter, our net interest margin improved to 4.30 percent, 36 basis points higher than the fourth quarter last year,” commented DeWitt Drew, President and CEO. “Our investments in Valdosta and Tifton have been transformational for our Company, and have allowed us to unlock the value of the core funding in our Moultrie and Sylvester operations.”

Mr. Drew added, “We are excited about our agreement to merge with and into The First Bancshares, Inc. (Nasdaq: FBMS). The combination will provide significant new resources and value to our staff, our customers, and most importantly, our shareholders. It is anticipated that, after customary approvals, a closing can occur in the second quarter of 2020.”

Income Highlights

Achieved record annual net income of $5.3 million, up $653 thousand, or 14%. On a per diluted share basis, earnings increased $0.25 to $2.08. Net interest income increased 11% or $2.0 million, primarily due to higher yields on loans, lower rates on interest bearing deposits, and improved deposit mix.

Higher annual net interest income, and a 15%, or $611 thousand, increase in non-interest income, more than offset the $1.5 million, or 9%, increase in non-interest expenses.

Fourth quarter net income was up 20% to $1.3 million, or $0.53 per diluted share, compared with $1.1 million, or $0.44 per diluted share. Net interest income for the quarter increased $775 thousand, or 16%. Non-interest expense was up $563 thousand, or 13%, reflecting higher pension, legal, professional, and post-employment benefits expenses that were up $472 thousand, in aggregate.

Balance Sheet Trends

Total assets at year-end were $555.4 million, up 4%. Loans grew approximately 6%, or $21.3 million, to $398.1 million, while continuing to maintain high standards of credit quality. Nonperforming loans to total loans were 0.06%.

Total deposits of $473.4 million, were up $17.8 million, or 4%, which reflects a $10.2 million, or 10%, increase in non-interest bearing deposits. Federal Home Loan Bank advances were down slightly to $28.5 million.

Capital Management

Book value grew 13% to $19.39 per share.

The Company has a Total Risk Based Capital Ratio of 13.06%, a Common Equity Tier 1 Capital Ratio of 12.14%, and a Leverage Capital Ratio of 8.59%, all measurably above the federal “well capitalized” standard.

In December 2019 the Company paid a quarterly cash dividend of $0.12 per common share, and for the full year paid $0.48 per share. Southwest Georgia Financial Corporation, or its predecessor, Southwest Georgia Bank, has paid cash dividends for 91 consecutive years.