Southwest Georgia Financial Corporation Reports Fourth Quarter and Full Year 2017 Financial Results

Southwest Georgia Financial Corporation (the "Company”) (NYSE American: SGB), a full-service community bank holding company, today reported results of operations for the fourth quarter and year ended December 31, 2017. Comparisons are to prior-year periods unless otherwise noted.

"2017 was an outstanding year in many respects. Loan growth was almost 14 percent, deposit growth was over 6 percent, we substantially completed the migration to a new core processing provider, and core earnings growth was strong against last year,” commented DeWitt Drew, President and CEO. "Fourth quarter and full year results were impacted by the new tax legislation. We are looking forward to lower tax rates in the future, but needed to revalue our net deferred tax assets. The result was an impairment charge of $419 thousand negatively impacting the income statement. The effect was a $0.17 reduction in earnings per share for the quarter and year.”

Income Highlights

• Net income for 2017 was $3.8 million, down $227 thousand, due primarily to the revaluing of net deferred tax assets. On a per diluted share basis, earnings were $1.49. Excluding the deferred tax impairment of $419 thousand, net income was $4.2 million, or $1.66 per diluted share, a 5% increase from 2016. Average loan growth of 13% and an improved asset mix grew net interest income over 9%.
• Annual net interest income was $17.2 million, up $1.4 million. The growth was the result of a $36.7 million increase in average total loans to $317.7 million. Growth in net interest income more than offset the $915 thousand increase in noninterest expense due in large part to higher professional fees, migration to a new core processing provider, and investment in personnel.
• Fourth quarter net income was $717 thousand, or $0.28 per diluted share. Excluding the deferred tax impairment mentioned above, net income for the quarter was $1.1 million, up 13% over the prior-year period. Net interest income for the quarter increased $441 thousand to $4.5 million primarily due to a $523 thousand increase in interest and fees on loans.

Balance Sheet Trends

• Total assets grew 9% to $489.2 million, driven by healthy loan growth of $37.7 million, or 13%, to $330.2 million at period end.
• Growth in the loan portfolio was funded by an increase in total deposits of $25.5 million to $397.0 million at December 31, 2017. Noninterest-bearing deposit accounts grew over 9% to $127.7 million. Federal Home Loan Bank Advances were up $12.6 million at year-end as further funding for loan growth.

Capital Management

• Book value per share grew over 6% to $16.03.
• The Company has a Total Risk-Based Capital Ratio of 13.55%, a Common Equity Tier 1 Capital Ratio of 12.64%, and a Leverage Capital Ratio of 8.72%, all measurably above the federal "well capitalized” standard.
• In December 2017, the Company paid a quarterly cash dividend of $0.11 per common share. Southwest Georgia Financial Corporation or its predecessor, Southwest Georgia Bank, has paid cash dividends for 89 consecutive years.

Webcast and Conference Call

The Company will host a conference call and webcast on Tuesday, January 23, 2018 at 1:00 p.m. ET. Management will review the financial and operating results for the fourth quarter and full year 2017, 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.sgfc.com.

A telephonic replay will be available from 4:00 p.m. ET on the day of the teleconference until Tuesday, January 30, 2018. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13675051, or access the webcast replay at www.sgfc.com/investorrelations.cfm, 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 $489 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.sgfc.com.

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.

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