Southwest Georgia Financial Corporation Reports 7% Earnings Growth for Second Quarter 2018

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 and six months ended June 30, 2018. Comparisons are to prior-year period unless otherwise noted.

"We are encouraged by our results both in the second quarter and year-to-date as we continued to achieve higher earnings and balance sheet growth. During the recent quarter, we completed the modifications to our deposit offerings, highlighted by the introduction of an interest bearing business checking account. We see this new product as a valuable retention tool and early results have been positive as our customers moved just under $30 million in deposits into that product,” commented DeWitt Drew, President and CEO. "Weather and construction delays on our Tifton location have us behind schedule, but we are working toward a late summer opening.”

Second Quarter and Six-Month Income Highlights

• Net income increased 7% to $1.15 million, or $0.45 per diluted share, from $1.07 million, or $0.42 per diluted share. Net interest income improved 5% to $4.6 million, primarily due to growth in average total loans of $24.2 million. An increase in provision for loan losses of $65 thousand and an increase in other operating expenses partially offset growth in net interest income.
• For the six months ended June 30, 2018, net income was up over 11% to $2.4 million, or $0.94 per diluted share, due mostly to increases in net interest income of 7% and lower effective tax rates in the first half of 2018. Partially offsetting were higher provisions for loan losses, which more than doubled due to continued strong loan growth, increased overhead expenses of $225 thousand, or 15%, and lower noninterest income.

Balance Sheet Trends

• Total assets at June 30, 2018, were $508.2 million, up 8%, or $37.8 million. Total loans grew 7%, or $23.2 million, to $345.9 million, and were funded by a 6% growth in total deposits. Higher levels of liquidity are being held due to the Company’s strong loan pipeline as well as concerns about higher interest rates causing disintermediation.
• Total deposits were up $24.2 million to $415.4 million at June 30, 2018, with a noticeable shift from noninterest-bearing deposits to the new interest bearing business checking account offering.
• Federal Home Loan Bank Advances were up $12.6 million providing further funding for loan growth and liquidity. The average cost of all interest bearing liabilities increased 22 basis points to 0.81%.

Capital Management

• Book value per share grew 4% to $16.47 at June 30, 2018.
• In June 2018, the Company paid a quarterly cash dividend of $0.12 per common share, an increase from $0.11 per common share in March 2018. Southwest Georgia Financial Corporation or its predecessor, Southwest Georgia Bank, has paid cash dividends for 90 consecutive years.

Webcast and Conference Call

The Company will host a conference call and webcast on Tuesday, July 24, 2018 at 1:00 p.m. ET. Management will review the financial and operating results for the second quarter 2018, 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 31, 2018. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13680878, 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 $508 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, branch offices located in Baker County, Worth County and Lowndes County, and a loan production office located in 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. More information on Southwest Georgia Financial Corporation and Southwest Georgia Bank can be found 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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