Southwest Georgia Financial Corp. (NYSE MKT:SGB) Q2 2019 Earnings Conference Call - Final Transcript

Jul 23, 2019 • 01:00 pm ET


Southwest Georgia Financial Corp. (NYSE MKT:SGB) Q2 2019 Earnings Conference Call - Final Transcript


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Greetings, and welcome to Southwest Georgia Financial Corporation Second Quarter 2019 Financial Results. [Operator Instructions]

I would now like to turn the conference over to your host, Craig Mychajluk, Investor Relations.

Craig Mychajluk

Yeah. Thank you and good afternoon, everyone. We certainly appreciate your time today, as well as your interest in Southwest Georgia Financial Corporation. Joining me on the call is Karen Boyd, Senior Vice President and Treasurer; Ross Dekle, Executive Vice President and Moultrie Region President; and Donna Lott, Executive Vice President and Chief Administrative Officer.

Karen is going to provide the formal remarks on the second quarter and then we will open up the call for Q&A. You should have a copy of our financial results that were released this morning, and if not, you can find them on our website at As you are aware, we may make some forward-looking statements during the formal discussion, as well as during the Q&A. These statements apply to future events that are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from what is stated on today's call. These risks and uncertainties and other factors are provided in the earnings release, as well as with other documents filed by the Company with the Securities and Exchange Commission. You can find these documents on our website or at

So with that, I'd like to turn the call over to Karen to begin the discussion.

Karen Boyd

Thank you, Craig. Good afternoon, everyone and thanks for being with us today. We had a solid quarter given the backdrop of increased investments related to our expansion efforts and other customer and service enhancing initiatives. Net income was up 13% to $1.3 million and on a per share -- per diluted share basis, earnings were $0.51, which was up $0.03 over the first quarter of this year and up $0.06 over last year. If you recall, in 2018, we achieved record earnings per share and on year-to-date basis, we were on track to meet that performance this year.

We are seeing an extraordinary amount of pricing pressure on both sides of the balance sheet. However, our debt team has done a notable job managing these pressures. The average cost of all interest-bearing liabilities has increased 32 basis points to 1.16%, as interest-bearing deposits continue to move higher -- into higher yielding savings and tiered money market accounts. The loan [Indecipherable] will be repriced at higher rates to help counteract this.

We were able to expand our net interest margin 10 basis points to 4.06% and our continued focus on managing asset mobility mix, combined with our customer-centric and community-focused approach, has allowed us to maintain healthy levels of net interest income. For the quarter, net interest income was up $485,000 to more than $5 million, which reflects higher interest and fees on loans at $856,000, partially offset by higher cost on interest-bearing deposits of $493,000. Our provision was higher, which was commensurate with the level of loan