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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
(Mark One)
[ X ] Annual report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1999 or,
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from
to .
Commission file number 0-20099
SOUTHWEST GEORGIA FINANCIAL CORPORATION
(Exact Name of Registrant as specified in its charter)
Georgia 58-1392259
(State or other jurisdiction of (I.R.S. 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) (912) 985-1120
Securities registered pursuant to Section 12(b) of this Act:
Title of each class Name of each exchange on which registered
Common Stock $1 Par Value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-K is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ X ]
Aggregate market value of voting stock held by nonaffiliates of the
Registrant as of March 6, 2000: $23,988,904 based on 1,827,030 shares at
the price of $13.13 per share.
As of March 24, 2000, 3,000,000 shares of the $1.00 par value Common Stock
of Southwest Georgia Financial Corporation were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Shareholders for the fiscal
year ended December 31, 1999, furnished to the Commission pursuant to Rule
14a-3(b), are incorporated by reference into Part II.
Portions of the Registrant's definitive Proxy Statement for the 2000 annual
meeting of shareholders, filed with the Commission, and Annual Report to
Shareholders for the fiscal year ended December 31, 1999, furnished to the
Commission pursuant to Rule 14a-3(b), are incorporated by reference into
Part III.
PART I
Item 1 - Business
Southwest Georgia Financial Corporation (the "Registrant") is a Georgia bank
holding company organized in 1980, which acquired 100% of the outstanding
shares of Southwest Georgia Bank (the "Bank"), formerly known as Moultrie
National Bank, in 1981. The Registrant's primary business is providing
banking services to individuals and businesses principally in Colquitt
County, Baker County, Thomas County, and their surrounding counties of
southwest Georgia through the Bank, its only subsidiary. The Bank commenced
operations as a national banking association in 1928. Currently, it is an
FDIC insured, state-chartered commercial bank.
The Registrant's executive office is located at 201 First Street, S. E.,
Moultrie, Georgia 31768, and its telephone number is (912) 985-1120.
All references herein to the Registrant include Southwest Georgia Financial
Corporation and the Bank unless the context indicates a different meaning.
General
The Registrant is a registered bank holding company. All of the
Registrant's activities are currently conducted by the Bank. The Bank is
community-oriented and offers such customary banking services as consumer
and commercial checking accounts, NOW accounts, savings accounts,
certificates of deposit, lines of credit, Mastercard and VISA accounts, and
money transfers. The Bank finances commercial and consumer transactions,
makes secured and unsecured loans, and provides a variety of other banking
services. The Bank has a trust department that performs corporate, pension,
and personal trust services and acts as trustee, executor, and administrator
for estates and as administrator or trustee of various types of employee
benefit plans for corporations and other organizations. The Bank owns
Southwest Georgia Insurance Services, Inc., an insurance agency subsidiary,
that offers property and casualty insurance, life, health, and disability
insurance.
Markets
The Registrant conducts banking activities in Colquitt, Baker, and Thomas
Counties and their surrounding counties of Georgia. Agriculture plays an
important part in the Colquitt, Baker, and Thomas County economy. Colquitt
and Thomas County grows a large portion of Georgia's produce crops,
including turnips, cabbage, sweet potatoes, and squash. Also, Colquitt and
Thomas County is home to producers of tobacco, peanuts, cotton, and pork.
Manufacturing firms employ a large number of Colquitt and Thomas County
residents. Apparel, lumber and wood products, and textile manufacturers are
located in the Colquitt and Thomas County area. Baker County's major crops
are cotton and peanuts. The remaining major employers are service
industries and retail stores. Approximately 40,000 persons reside in
Colquitt County while 3,700 and 43,000 persons reside in Baker and Thomas
Counties, respectively.
-2-
Deposits
The Bank offers a full range of depository accounts and services to both
consumers and businesses. At December 31, 1999, the Registrant's deposit
base, totaling $182,072,199 consisted of $24,684,967 in noninterest-bearing
demand deposits (13.56 percent of total deposits), $46,082,230 in interest-
bearing demand deposits including money market accounts (25.31 percent of
total deposits), $13,408,727 in savings deposits (7.36 percent of total
deposits), $72,729,833 in time deposits in amounts less than $100,000 (39.95
percent of total deposits), and $25,166,442 in time deposits of $100,000 or
more (13.82 percent of total deposits).
Loans
The Bank makes both secured and unsecured loans to individuals, firms, and
corporations; and both consumer and commercial lending operations include
various types of credit for the Bank's customers. Secured loans include
first and second real estate mortgage loans. The Bank also makes direct
installment loans to consumers on both a secured and unsecured basis. At
December 31, 1999, consumer installment, real estate (including construction
and mortgage loans), and commercial (including financial and agricultural)
loans represented approximately 10.0%, 72.7% and 17.3%, respectively, of the
Bank's total loan portfolio.
Lending Policy
The current lending policy of the Bank is to offer consumer and commercial
credit services to individuals and entities that meet the Bank's credit
standards. The Bank provides each lending officer with written guidelines
for lending activities. Lending authority is delegated by the Board of
Directors of the Bank to loan officers, each of whom is limited in the
amount of secured and unsecured loans which can be made to a single
borrower or related group of borrowers.
The Loan Committee (the "Committee") of the Bank's Board of Directors is
responsible for approving and monitoring the loan policy and providing
guidance and counsel to all lending personnel. The Committee also approves
all extensions of credit over $100,000. The Committee is composed of the
President and the other executive officers of the Bank, as well as certain
Bank Directors.
Loan Review and Nonperforming Assets
The Bank regularly reviews its loan portfolio to determine deficiencies and
corrective action to be taken. Senior lending officers conduct periodic
review of borrowers with total direct and indirect indebtedness of $100,000
or more and perform an ongoing review of all past due loans. A summary
report of past due loans is reviewed monthly by the Committee, which also
reviews all loans over $100,000, whether current or past due, at least
annually.
-3-
Asset/Liability Management
The Committee is charged with establishing policies to manage the assets and
liabilities of the Bank. The Committee's task is to manage asset growth,
net interest margin and liquidity, and capital in order to maximize income
and reduce interest rate risk. To meet these objectives while maintaining
prudent management of risks, the Committee directs the Bank's overall
acquisition and allocation of funds. At its monthly meetings, the Committee
reviews and discusses the monthly asset and liability funds budget and
income and expense budget in relation to the actual composition and flow of
funds; the ratio of the amount of rate sensitive assets to the amount of
rate sensitive liabilities; the ratio of loan loss reserve to outstanding
loans; and other variables, such as expected loan demand, investment
opportunities, core deposit growth within specified categories, regulatory
changes, monetary policy adjustments, and the overall state of the local,
state, and national economy.
Investment Policy
The Bank's investment portfolio policy is to maximize income consistent with
liquidity, asset quality, and regulatory constraints. The policy is
reviewed periodically by the Board of Directors. Individual transactions,
portfolio composition, and performance are reviewed and approved monthly by
the Board of Directors.
Employees
The Bank has 114 full-time employees. The Bank is not a party to any
collective bargaining agreement, and the Bank believes that its employee
relations are good. None of the Bank's executive officers, except Mr.
Clark, is employed pursuant to any employment contract. See Exhibit 10.3,
which is incorporated herein by reference.
Competition
The banking business is highly competitive. The Bank competes with two
other depository institutions in Colquitt County but no depository
institution in Baker County. The newly acquired branch in Pavo, Georgia has
no other depository institution in this town, but there are other financial
institutions within the county of Thomas. The Bank also competes with other
financial service organizations located outside Colquitt, Baker, and Thomas
Counties, including brokers, finance companies, credit unions and certain
governmental agencies. To the extent that banks must maintain noninterest
earning reserves against deposits, they may be at a competitive disadvantage
when compared with other financial service organizations that are not
required to maintain reserves against substantially equivalent sources of
funds. Further, changes in the laws applicable to banks, savings and loan
associations, and other financial institutions and the increased competition
from investment bankers, brokers, and other financial service organizations
may have a significant impact on the competitive environment in which the
Bank operates. See "Supervision and Regulation."
At December 31, 1999, the Registrant's total consolidated deposits and
assets were $182,072,199 and $223,059,652, respectively. The Registrant's
bank subsidiary is ranked as the largest among three depository institutions
in Colquitt County, Georgia.
-4-
Monetary Policies
The results of operations of the Bank are affected by credit policies of
monetary authorities, particularly the Board of Governors of the Federal
Reserve System (the "Federal Reserve"). The instruments of monetary policy
employed by the Federal Reserve include open market operations in U. S.
Government securities, changes in the discount rate on member bank
borrowings, and changes in reserve requirements against member bank
deposits. In view of changing conditions in the national economy and in the
money markets, as well as the effect of action by monetary and fiscal
authorities, including the Federal Reserve, no prediction can be made as to
possible future changes in interest rates, deposit levels, loan demand, or
the business and earnings of the Bank.
Payment of Dividends
The Registrant is a legal entity separate and distinct from the Bank. Most
of the revenues of the Registrant result from dividends paid to it by the
Bank. Statutory and regulatory restrictions exist that are applicable to
the payment of dividends by the Bank as well as by the Registrant to its
shareholders.
The Bank is a state chartered bank regulated by the Department of Banking
and Finance (the "DBF") and the Federal Deposit Insurance Corporation (the
"FDIC"). Under the regulations of the DBF, dividends may not be declared
out of the retained earnings of a state bank without first obtaining the
written permission of the DBF unless such bank meets all the following
requirements:
(a) Total classified assets as of the most recent examination of the
bank do not exceed 80% of equity capital (as defined by regulation);
(b) The aggregate amount of dividends declared or anticipated to be
declared in the calendar year does not exceed 50% of the net profits
after taxes but before dividends for the previous calendar year; and,
(c) The ratio of equity capital to adjusted assets is not less than 6%.
The payment of dividends by the Registrant and the Bank may also be affected
or limited by other factors, such as the requirement to maintain adequate
capital above regulatory guidelines. In addition, if, in the opinion of the
applicable regulatory authority, a bank under its jurisdiction is engaged in
or is about to engage in an unsafe or unsound practice (which, depending
upon the financial condition of the bank, could include the payment of
dividends), such authority may require, after notice and hearing, that such
bank cease and desist from such practice. The FDIC has issued a policy
statement providing that insured banks should generally only pay dividends
out of current operating earnings. At December 31, 1999, retained earnings
totaled $18.8 million of which $10.5 million has been appropriated in order
for the Bank to provide adequate lending limits for a single borrower. The
remaining $8.3 million of retained earnings are available from the Bank to
pay dividends. For 1999 the Registrant's cash dividend payout to
stockholders was 33.6% of net income.
-5-
Supervision and Regulation
The Registrant is a registered bank holding company subject to regulation by
the Federal Reserve under the Bank Holding Company Act of 1956, as amended
(the "Act"). As a bank holding company, the Registrant is required to file
with the Federal Reserve an annual report of its operations at the end of
each fiscal year and such additional information as the Federal Reserve may
require pursuant to the Act. The Federal Reserve may also make examinations
of the Registrant.
The Act requires every bank holding company to obtain prior approval of the
Federal Reserve (i) before it may acquire direct or indirect ownership or
control of more than five percent (5%) of the voting shares of any bank that
is not already controlled; (ii) before it or any of its subsidiaries, other
than a bank, may acquire all or substantially all of the assets of a bank;
and (iii) before it may merge or consolidate with any other bank holding
company. In addition, a bank holding company is generally prohibited from
engaging in non-banking activities or acquiring direct or indirect control
of voting shares of any company engaged in such activities. This prohibition
does not apply to activities found by the Federal Reserve, by order or
regulation, to be so closely related to banking or managing or controlling
banks as to be a proper incident thereto. Some of the activities that the
Federal Reserve has determined by regulation or order to be closely related
to banking are:
(a) making or servicing loans and certain types of leases;
(b) performing certain data processing services;
(c) acting as fiduciary, investment or financial advisors;
(d) providing full-service brokerage under certain conditions;
(e) underwriting bank eligible securities;
(f) underwriting debt and equity securities on a limited basis through
separately capitalized subsidiaries; and
(g) making investments in corporations or projects designed primarily to
promote community welfare.
In addition, effective March 11, 2000, bank holding companies whose banking
subsidiaries are all well-capitalized and well-managed may apply to become a
financial holding company. Financial holding companies have the authority
to engage in activities that are "financial in nature" that are not
permitted for other bank holding companies. Some of the activities that the
Act provides are financial in nature are:
(a) lending, exchanging, transferring, investing for others or safeguarding
money or securities;
(b) insuring, guaranteeing, or indemnifying against loss, harm, damage,
illness, disability, or death, or providing and issuing annuities, and
acting as principal, agent, or broker with respect thereto;
(c) providing financial, investment, or economic advisory services, including
advising an investment company;
(d) issuing or selling instruments representing interests in pools of assets
permissible for a bank to hold directly; and
(e) underwriting, dealing in or making a market in securities.
The Registrant has no immediate plans to register as a financial holding
company.
-6-
The laws of Georgia require annual registration with the DBF by all Georgia
bank holding companies. Such registration includes information with respect
to the financial condition, operations, management, and intercompany
relationships of a bank holding company and its subsidiaries and related
matters. The DBF may also require such other information as is necessary to
keep itself informed as to whether the provisions of Georgia law and the
regulations and orders issued thereunder by the DBF have been complied with;
and the DBF may make examinations of the Registrant and of the Bank.
The Bank, as a member of the Federal Reserve System, is subject to the
supervision of, and is regularly examined by, the Federal Reserve and DBF.
Both the FDIC and the DBF must grant prior approval of any merger,
consolidation, or other corporate reorganization involving the Bank. A bank
can be held liable for any loss incurred by, or reasonably expected to be
incurred by, the FDIC in connection with the default of a commonly-
controlled institution.
The Registrant and the Bank are "affiliates" under the Federal Reserve Act,
which imposes certain restrictions on (i) loans by the Bank to affiliates,
(ii) investments in the stock of affiliates by the Bank, (iii) the Bank's
taking the stock of affiliates as collateral for loans by it to a borrower,
and (iv) the purchase of assets from the Registrant by the Bank. Further, a
bank holding company and its subsidiaries are prohibited from engaging in
certain tie-in arrangements in connection with any extensions of credit,
lease or sale of property, or furnishing of services.
Capital Adequacy
The Federal Reserve has risk-based rules for assessing bank and bank holding
company capital adequacy. These regulations establish minimum capital
standards in relation to assets and off-balance sheet exposures, as adjusted
for credit risk. Banks and bank holding companies are required to have (1)
a minimum standard of total capital (as defined) to risk-rated assets of
eight percent (8%); (2) a minimum Tier One Capital (as defined) to risk-
rated assets of four percent (4%); and (3) a minimum stockholders' equity to
risk-based assets of four percent (4%). In addition, the Federal Reserve
has established a minimum of three percent (3%) leverage ratio of Tier One
Capital to total assets for the most highly rated banks. "Tier One Capital"
generally consists of common equity not including unrecognized gains and
losses on securities, minority interests in equity accounts of consolidated
subsidiaries, and certain perpetual preferred stock less certain
intangibles. The Federal Reserve will require a bank holding company to
maintain a leverage ratio greater than three percent (3%) if it is
experiencing or anticipating significant growth or is operating with less
than well-diversified risks in the opinion of the Federal Reserve. The
Federal Reserve uses the leverage ratio in tandem with the risk-based ratio
to assess capital adequacy of banks and bank holding companies. The FDIC,
the Office of Comptroller of Currency ("OCC"), and the Federal Reserve have
amended, effective January 1, 1997, the capital adequacy standards to
provide for the consideration of interest rate risk in the overall
determination of a bank's capital ratio, requiring banks with greater
interest rate risk to maintain adequate capital for the risk. The revised
standards have not had a significant effect on the Registrant's capital
requirements.
-7-
Effective December 19, 1992, a new Section 38 to the Federal Deposit
Insurance Corporation Act implemented the prompt corrective action
provisions that Congress enacted as a part of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (the "1991 Act"). The "prompt
corrective action" program is based upon five regulatory zones for banks in
which all banks would be placed, largely based on their capital positions.
Regulators are permitted to take increasingly harsh action as a bank's
financial condition declines. Regulators are also empowered to place a bank
in receivership or require the sale of a bank to another depository
institution when a bank's capital leverage ratio reaches two percent.
Better capitalized institutions will generally be subject to less onerous
regulation and supervision than banks with lesser amounts of capital. The
Federal Reserve has adopted regulations implementing the prompt corrective
action provisions of the 1991 Act which place financial institutions in the
following five categories based upon capitalization ratios: (1) A "well
capitalized" institution has a total risk-based capital ratio of at least 10
percent, a Tier One risk-based ratio of at least 6 percent, and a leverage
ratio of at least 5 percent; (2) An "adequately capitalized" institution has
a total risk-based ratio of at least 8 percent, a Tier One risk-based ratio
of at least 4 percent, and a leverage ratio of at least 4 percent; (3) An
"undercapitalized" institution has a total risk-based capital ratio of under
8 percent, a Tier One risk-based capital ratio of under 4 percent, or a
leverage ratio of under 4 percent; (4) A "significantly undercapitalized"
institution has a total risk-based capital ratio of under 6 percent, a Tier
One risk-based ratio of under 3 percent, or a leverage ratio of under 3
percent; and (5) A "critically undercapitalized" institution has a leverage
ratio of 2 percent or less. Any institution in any of the three
undercapitalized categories would be prohibited from declaring dividends or
making capital distributions. The proposed regulations also establish
procedures for "downgrading" an institution to a lower capital category based
on supervisory factors other than capital. The Bank at December 31, 1999,
would be considered to be a "well capitalized" institution if solely viewed
on the basis of capital ratios. As an institution drops below the "well
capitalized" category, it becomes subject to increasing scrutiny,
decreasing management flexibility, and increasingly harsh regulatory
actions. It is therefore important for banks to remain in the "well
capitalized" category notwithstanding the minimum capital ratios described
above. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Capital Resources and Dividends" contained on page
15 of the Registrant's 1999 Annual Report to Shareholders, which is
incorporated herein by reference, for the Registrant's capital position.
Recent Legislation
On November 12, 1999, President Clinton signed the Gramm-Leach-Bliley Act, a
very significant piece of legislation intended to modernize the financial
services industry. The bill repeals the anti-affiliation provisions of the
1933 Glass-Steagall Act to allow for the merger of banking and securities
organizations and permits banking organizations to engage in insurance
activities including insurance underwriting. The bill also allows bank
holding companies to engage in financial activities that are "financial in
nature or complementary to a financial activity." The act lists the
expanded areas that are financial in nature and includes insurance and
securities underwriting and merchant banking among others. The bill also:
-8-
(a) prohibits non-financial entities from acquiring or establishing a thrift
while grandfathering existing thrifts owned by non-financial entities.
(b) establishes state regulators as the appropriate functional regulators for
insurance activities but provides that state regulators cannot "prevent
or significantly interfere" with affiliations between banks and insurance
firms.
(c) contains provisions designed to protect consumer privacy. The bill
requires financial institutions to disclose their policy for collecting
and protecting confidential information and allows consumers to "opt out"
of information sharing except with unaffiliated third parties who market
the institutions' own products and services or pursuant to joint
agreements between two or more financial institutions.
(d) provides for functional regulation of a bank's securities activities by
the Securities and Exchange Commission.
Various portions of the bill have different effective dates, ranging from
immediately to more than a year for implementation.
On January 26, 1996, the Georgia legislature adopted a bill (the "Georgia
Intrastate Bill") to permit, effective July 1, 1996, any Georgia bank or
group of affiliated banks under one holding company to establish up to an
aggregate of three new or additional branch banks anywhere within the State
of Georgia excluding any branches established by a bank in a county which it
is already located. After July 1, 1998, all restrictions on state-wide
branching were removed. Before adoption of the Georgia Intrastate Bill,
Georgia only permitted branching via merger or consolidation with an
existing bank or in certain other limited circumstances.
Executive Officers Of The Registrant
Executive officers are elected by the Board of Directors annually in April
and hold office until the following April unless they resign or are removed
from office by the Board of Directors.
The executive officers of the Registrant and their ages, positions with the
Registrant, and terms of office as of January 31, 2000, are as follows:
Officer Of The
Registrant
Name (Age) Principal Position Since
John H. Clark Chief Executive Officer and Chairman 1980
(62) of the Registrant and Bank
Violet K. Weaver Executive Vice President and Secretary 1981
(64) of the Registrant and Bank
G. DeWitt Drew Executive Vice President of the 1999
(43) Registrant and Bank
-9-
John J. Cole, Jr. Senior Vice President of the 1984
(49) Registrant and Senior Vice President
and Cashier of the Bank
George R. Kirkland Senior Vice President and Treasurer 1991
(49) of the Registrant and Senior Vice
President and Comptroller of the Bank
C. Wallace Sansbury Senior Vice President of the Registrant 1996
(57) and Bank
Randall L. Webb, Jr. Senior Vice President of the Registrant 1994
(51) and Bank
William T. Hand Senior Vice President of the Registrant 1998
(52) and Bank
Jan E. Hartman Senior Vice President of the Registrant 1999
(63) and Bank
Judy M. Owens Vice President of the Registrant 1993
(55) and Bank
Geraldine A. Ferrone Vice President of the Registrant 1995
(53) and Bank
Robert M. Carlton, Jr. Vice President of the Registrant 1995
(58) and Bank
Charles H. Bannister Vice President of the Registrant 1997
(41) and Bank
John W. Gandy Vice President of the Registrant 1997
(46) and Bank
Peggy C. Weeks Vice President of the Registrant 1997
(62) and Bank
-10-
Richard E. Holland Vice President of the Registrant 1998
(54) and Bank
Barbara P. Hall Vice President of the Registrant 1999
(50) and Bank
The following is a brief description of the business experience of the
executive officers of the Registrant. Except as otherwise indicated, each
executive officer has been engaged in their present or last employment, in
the same or similar position, for more than five years.
Mr. Clark was named the Chief Executive Officer and Chairman of the Board of
both the Bank and the Registrant in April 1999. Previously, he has served
as Chief Executive Officer and Vice Chairman of the Board of the Registrant
since 1996 and as President and Director of the Bank since 1978 and
President and Director of the Registrant since 1980.
Mrs. Weaver became Executive Vice President in December 1996. Previously,
she has served as Senior Vice President and Secretary of the Bank since 1986
and became Senior Vice President and Secretary of the Registrant in 1992.
Previously, she has served in various positions with the Registrant and the
Bank since 1976.
Mr. Drew became Executive Vice President in 1999. Previously, he had been
Senior Vice President and Loan Administrator at Citizens Bank in
Russellville, Alabama since 1993.
Mr. Cole became Senior Vice President and Cashier of the Bank and Senior
Vice President of the Registrant in 1992. Previously, he had been Senior
Vice President and Comptroller of the Bank from 1986 to 1992 and Vice
President and Treasurer of the Registrant since 1984.
Mr. Kirkland became Senior Vice President and Treasurer of the Registrant
and Senior Vice President and Comptroller of the Bank in 1993. Previously
he had been Vice President and Comptroller of the Bank and Vice President
and Treasurer of the Registrant since 1991.
Mr. Sansbury became Senior Vice President of the Bank and Registrant in
December 1996. Previously, he had been Executive Vice President and Senior
Credit Officer at Regions Bank in Ellijay, Georgia, from 1994 to 1996 and an
Officer of Nationsbank of Georgia, N.A. from 1983 to 1994.
Mr. Webb became Senior Vice President of the Bank and Registrant in 1997.
Previously, he had been Vice President of the Bank and Registrant since 1994
and Assistant Vice President of the Bank since 1984.
-11-
Mr. Hand became Senior Vice President of the Bank and Registrant in 1998.
Previously, he had been President, Chief Executive Officer, Trust Officer
and Director of First Bancorporation of Cleveland, Inc. and its banking
subsidiary First Bank & Trust located in Cleveland, Texas from 1990 to 1998.
Mr. Hartman became Senior Vice President of the Bank and Registrant in 1999.
Previously, he had been Senior Marketing Manager at Nobel Insurance Company
in Columbia, South Carolina from 1996 to 1999, Agency Manager at Dean &
Moore Insurance Company in Cartersville, Georgia in 1995, and as Business
Development Manager at Vesta Insurance Company in Birmingham, Alabama from
1992 to 1994.
Mrs. Owens became Vice President of the Bank and Vice President of the
Registrant in 1993. Previously, she had been Assistant Vice President and
Trust Officer of the Bank from 1991 to 1993 and Assistant Trust Officer of
the Bank since 1984.
Mrs. Ferrone became Vice President of the Bank and Registrant in 1995.
Previously, she had been Assistant Vice President of the Bank since 1988.
Mr. Carlton became Vice President of the Bank and Registrant in 1995.
Previously, he had been Assistant Vice President of the Bank since 1992.
Also, he had served as Vice President and Cashier of Citizens and Southern
National Bank of Georgia from 1969 to 1991.
Mr. Bannister became Vice President of the Bank and Registrant in 1997.
Previously, he had been Assistant Vice President of the Bank since 1993 and
has served in various other positions with the Bank since 1989.
Mr. Gandy became Vice President of the Bank and Registrant in 1997.
Previously, he had been Assistant Vice President of the Bank since 1993.
Also, he had been Assistant Vice President of Nationsbank of Georgia, N.A.,
since 1985.
Mrs. Weeks became Vice President of the Bank and Registrant in 1997.
Previously, she had been Assistant Vice President of the Bank since 1994 and
has served in various other positions with the Bank since 1991.
Mr. Holland became Vice President of the Bank and Registrant in 1998.
Previously, he had been Vice President City Manager of Nationsbank Florida,
N.A. from 1993 to 1998. Also, he had been Vice President Administration of
C&S/Sovran Corporation from 1987 to 1993.
Mrs. Hall became Vice President of the Bank and Registrant in 1999.
Previously, she had been Assistant Vice President of the Bank since 1995 and
has served in various other positions with the Bank since 1974.
-12-
Selected Statistical Information
The statements below show, for the periods indicated, the daily average
balances outstanding for the major categories of earning assets and
interest-bearing liabilities and the average interest rate earned or paid
thereon. Except for percentages, all data is in thousands of dollars.
Distribution of Assets, Liabilities, and Shareholders' Equity; Interest
Rates and Interest Differentials
Average Balance Sheets and Net Interest Income Analysis
Condensed average balance sheets for the years indicated are presented
below:
Year Ended December 31, 1999
Average
Balance Interest Rate
(Thousands Of Dollars)
ASSETS
Cash and due from banks $ 6,357 $ - - %
Earning assets:
Interest-bearing deposits 11,894 595 5.00%
Loans, net (a) (b) (c) 111,198 11,734 10.55%
Taxable investment securities
held to maturity 68,148 4,231 6.21%
Nontaxable investment securities
held to maturity (c) 3,307 207 6.26%
Nontaxable investment securities
available for sale (c) 10,757 750 6.97%
Other investment securities
available for sale 1,977 970 49.06%
Federal funds sold and securities
purchased with agreements to resell 1,683 80 4.75%
Total earning assets 208,964 18,567 8.89%
Premises and equipment 4,579
Other assets 5,161
Total assets $ 225,061
LIABILITIES AND SHAREHOLDERS' EQUITY
Demand deposits $ 25,387 $ - - %
Interest-bearing liabilities:
Savings deposits 60,135 1,231 2.05%
Time deposits 99,183 4,944 4.98%
Federal funds purchased and securities
sold under agreements to repurchase 174 10 5.75%
Other borrowings 9,500 565 5.95%
Total interest-bearing liabilities 168,992 6,750 3.99%
Other liabilities 2,017
Total liabilities 196,396
Common stock 3,000
Surplus 1,901
Retained earnings 25,968
Less treasury stock ( 2,204)
Total shareholders' equity 28,665
Total liabilities and
shareholders' equity $ 225,061
Net interest income and margin $ 11,817 5.66%
-13-
Year Ended December 31, 1998
Average
Balance Interest Rate
(Thousands Of Dollars)
ASSETS
Cash and due from banks $ 5,943 $ - - %
Earning assets:
Interest-bearing deposits 8,886 472 5.31%
Loans, net (a) (b) (c) 113,820 12,466 10.95%
Taxable investment securities
held to maturity 73,122 4,604 6.30%
Nontaxable investment securities
held to maturity (c) 810 53 6.54%
Nontaxable investment securities
available for sale (c) 2,124 149 7.02%
Other investment securities
available for sale 2,131 721 33.83%
Federal funds sold and securities
purchased with agreements to resell 2,128 114 5.36%
Total earning assets 203,021 18,579 9.15%
Premises and equipment 4,367
Other assets 4,505
Total assets $ 217,836
LIABILITIES AND SHAREHOLDERS' EQUITY
Demand deposits $ 21,706 $ - - %
Interest-bearing liabilities:
Savings deposits 61,121 1,560 2.55%
Time deposits 96,887 5,399 5.57%
Federal funds purchased and securities
sold under agreements to repurchase 498 26 5.22%
Other borrowings 9,500 571 6.01%
Total interest-bearing liabilities 168,006 7,556 4.50%
Other liabilities 1,768
Total liabilities 191,480
Common stock 3,000
Surplus 2,070
Retained earnings 23,680
Less treasury stock ( 2,394)
Total shareholders' equity 26,356
Total liabilities and
shareholders' equity $ 217,836
Net interest income and margin $ 11,023 5.43%
-14-
Year Ended December 31, 1997
Average
Balance Interest Rate
(Thousands Of Dollars)
ASSETS
Cash and due from banks $ 5,361 $ - - %
Earning assets:
Interest-bearing deposits 5,132 283 5.51%
Loans, net (a) (b) (c) 117,029 12,630 10.79%
Taxable investment securities
held to maturity 70,601 4,487 6.36%
Nontaxable investment securities
held to maturity (c) 248 29 11.69%
Other investment securities
available for sale 2,000 496 24.80%
Federal funds sold and securities
purchased with agreements to resell 1,870 101 5.40%
Total earning assets 196,880 18,026 9.16%
Premises and equipment 3,419
Other assets 5,578
Total assets $ 211,238
LIABILITIES AND SHAREHOLDERS' EQUITY
Demand deposits $ 20,918 $ - - %
Interest-bearing liabilities:
Savings deposits 60,612 1,600 2.64%
Time deposits 92,408 5,070 5.49%
Federal funds purchased and securities
sold under agreements to repurchase 1,939 107 5.52%
Other borrowings 9,500 572 6.02%
Total interest-bearing liabilities 164,459 7,349 4.47%
Other liabilities 2,026
Total liabilities 187,403
Common stock 3,000
Surplus 2,012
Retained earnings 21,238
Less treasury stock ( 2,415)
Total shareholders' equity 23,835
Total liabilities and
shareholders' equity $ 211,238
Net interest income and margin $ 10,677 5.42%
Interest Rates
(a) Average loans are shown net of unearned income and the allowance for
loan losses. Nonperforming loans are included.
(b) Interest income includes loan fees as follows (in thousands):
1999 - $556, 1998 - $416, and 1997 - $470.
(c) Reflects taxable equivalent adjustments using a tax rate of 34 percent
for 1999, 1998, and 1997.
-15-
Interest Differentials
The following table sets forth, for the indicated years ended December 31, a
summary of the changes in interest paid resulting from changes in volume and
changes in rate. The change due to volume is calculated by multiplying the
change in volume by the prior year's rate. The change due to rate is
calculated by multiplying the change in rate by the prior year's volume.
The change attributable to both volume and rate is calculated by multiplying
the change in volume by the change in rate.
(a)
Due To
Increase Changes In
1999 1998 (Decrease) Volume Rate
(Thousands Of Dollars)
Interest earned on:
Interest-bearing deposits $ 595 $ 472 $ 123 $ 149 $( 26)
Loans, net (b) 11,734 12,466 (732) (283) (449)
Taxable investment
securities held to maturity 4,231 4,604 (373) (308) ( 65)
Nontaxable investment
securities held to
maturity (b) 207 53 154 156 ( 2)
Nontaxable investment
securities available
for sale (b) 750 149 601 602 ( 1)
Other securities available for sale 970 721 249 ( 47) 296
Federal funds sold and
securities purchased
under agreements to resell 80 114 ( 34) ( 22) ( 12)
Total interest income 18,567 18,579 ( 12) 247 (259)
Interest paid on:
Savings deposits 1,231 1,560 (329) ( 25) (304)
Time deposits 4,944 5,399 (455) 131 (586)
Federal funds purchased
and securities sold under
agreements to repurchase 10 26 ( 16) ( 19) 3
Other borrowings 565 571 ( 6) - ( 6)
Total interest expense 6,750 7,556 (806) 87 (893)
Net interest earnings $ 11,817 $ 11,023 $ 794 $ 160 $ 634
-16-
(a)
Due To
Increase Changes In
1998 1997 (Decrease) Volume Rate
(Thousands Of Dollars)
Interest earned on:
Interest-bearing deposits $ 472 $ 283 $ 189 $ 199 $( 10)
Loans, net (b) 12,466 12,630 (164) (357) 193
Taxable investment
securities held to maturity 4,604 4,487 117 159 ( 42)
Nontaxable investment
securities held to
maturity (b) 53 29 24 30 ( 6)
Nontaxable investment
securities available
for sale (b) 149 - 149 149 -
Other securities available for sale 721 496 225 34 191
Federal funds sold and
securities purchased
under agreements to resell 114 101 13 14 ( 1)
Total interest income 18,579 18,026 553 228 325
Interest paid on:
Savings deposits 1,560 1,600 ( 40) 12 ( 52)
Time deposits 5,399 5,070 329 253 76
Federal funds purchased
and securities sold under
agreements to repurchase 26 107 ( 81) ( 75) ( 6)
Other borrowings 571 572 ( 1) - ( 1)
Total interest expense 7,556 7,349 207 190 17
Net interest earnings $ 11,023 $ 10,677 $ 346 $ 38 $ 308
-17-
(a)
Due To
Increase Changes In
1997 1996 (Decrease) Volume Rate
(Thousands Of Dollars)
Interest earned on:
Interest-bearing deposits $ 283 $ 151 $ 132 $ 130 $ 2
Loans, net (b) 12,630 12,302 328 416 ( 88)
Taxable investment
securities held to maturity 4,487 4,525 ( 38) 17 ( 55)
Nontaxable investment
securities held to
maturity (b) 29 56 ( 27) ( 29) 2
Other securities available for sale 496 99 397 60 337
Federal funds sold and
securities purchased
under agreements to resell 101 104 ( 3) ( 6) 3
Total interest income 18,026 17,237 789 588 201
Interest paid on:
Savings deposits 1,600 1,622 ( 22) ( 22) -
Time deposits 5,070 4,902 168 168 -
Federal funds purchased
and securities sold under
agreements to repurchase 107 117 ( 10) ( 7) ( 3)
Other borrowings 572 571 1 - 1
Total interest expense 7,349 7,212 137 139 ( 2)
Net interest earnings $ 10,677 $ 10,025 $ 652 $ 449 $ 203
(a) Volume and rate components are in proportion to the relationship of the
absolute dollar amounts of the change in each.
(b) Reflects taxable equivalent adjustments using a tax rate of 34 percent
for 1999, 1998, and 1997 in adjusting interest on nontaxable loans and
securities to a fully taxable basis.
-18-
Investment Portfolio
The carrying values of investment securities for the indicated years are
presented below:
Year Ended December 31,
1999 1998 1997
(Thousands Of Dollars)
Securities held to maturity:
U. S. Treasury and other
U. S. Government Agencies $ 64,704 $ 63,806 $ 62,561
State and municipal 6,174 5,280 2,080
Total securities held to maturity $ 70,878 $ 69,086 $ 64,641
Securities available for sale:
Equity securities $ 2,270 $ 2,484 $ 2,185
State and municipal 12,567 8,926 -
Mortgage backed 1,862 - -
Total securities available for sale $ 16,699 $ 11,410 $ 2,185
The following table shows the maturities of debt securities at December 31,
1999, and the weighted average yields (for nontaxable obligations
on a fully taxable basis assuming a 34% tax rate) of such securities.
MATURITY
After One After Five
Within But Within But Within After
One Year Five Years Ten Years Ten Years
Amount Yield Amount Yield Amount Yield Amount Yield
(Thousands Of Dollars)
Debt Securities:
U.S. Treasury
and other U.S.
Government
Agencies $14,004 6.79% $34,174 5.96% $16,526 6.34% $ - -
State and
municipal 60 7.45% 3,490 6.70% 2,462 7.26% 12,729 7.51%
Mortgage
backed - - % - - % 970 6.94% 892 6.30%
Total $14,064 6.79% $37,664 6.03% $19,958 6.48% $13,621 7.43%
-19-
The calculation of weighted average yields is based on the cost and
effective yields of each security weighted for the scheduled maturity of
each security. At December 31, 1999 and 1998, securities carried at
approximately $28,859,000 and $28,614,000, respectively, were pledged to
secure public and trust deposits as required by law.
Loan Portfolio
Types of Loans
The amount of loans outstanding for the indicated years are shown in the
following table according to type of loan.
Year Ended December 31,
1999 1998 1997 1996 1995
(Thousands Of Dollars)
Commercial, financial and
agricultural $ 19,144 $ 15,490 $ 17,076 $ 18,450 $ 17,706
Real estate - mortgage 80,558 88,767 90,111 85,338 87,319
Other 176 150 448 208 45
Installment 10,870 11,219 12,052 12,369 11,700
Total loans 110,748 115,626 119,687 116,365 116,770
Less:
Unearned income 129 128 143 156 177
Allowance for loan losses 1,944 2,003 1,999 2,009 2,140
Net loans $108,675 $113,495 $117,545 $114,200 $114,453
Loan Maturities and Sensitivity to Changes in Interest Rates
The following table shows the distribution of the commercial, financial and
agricultural loan portfolio, excluding real estate mortgage and consumer loans
at December 31, 1999.
Commercial,
Financial and
Agricultural
(Thousands Of Dollars)
Distribution of loans which are due:
In one year or less $ 15,142
After one year but within five years 3,075
After five years 927
Total $ 19,144
-20-
The following table shows, for the selected loans above due after one year,
the amounts which have predetermined interest rates and the amounts
which have floating or adjustable interest rates at December 31, 1999.
Loans With
Predetermined Loans With
Rates Floating Rates Total
(Thousands Of Dollars)
Commercial, financial
and agricultural $ 870 $ 3,132 $ 4,002
Risk Elements In The Loan Portfolio
The following table presents information concerning outstanding balances of
nonperforming loans for the indicated years ended December 31.
Nonperforming loans comprise: (a) loans accounted for on a nonaccrual basis
("nonaccrual loans"); (b) loans which are contractually past due 90 days or
more as to interest or principal payments ("past-due loans"); (c) loans for
which the terms have been renegotiated to provide a reduction or deferral
of interest or principal because of a deterioration in the financial
position of the borrower ("renegotiated loans"); and (d) loans now current
but where there are serious doubts as to the ability of the borrower to
comply with present loan repayment terms ("potential problem loans").
Nonaccrual Past-Due Renegotiated Potential
Loans Loans Loans Problem Loans Total
(Thousands Of Dollars)
December 31, 1999 $ 858 $ 488 $ 0 $ 287 $ 1,633
December 31, 1998 $ 1,806 $ 281 $ 0 $ 289 $ 2,376
December 31, 1997 $ 96 $ 385 $ 0 $ 211 $ 692
December 31, 1996 $ 225 $ 74 $ 70 $ 229 $ 598
December 31, 1995 $ 304 $ 35 $ 72 $ 302 $ 713
The Registrant follows a policy of continuing to accrue interest on consumer
and bank card loans that are contractually past due up to the time of
charging the loan amount against the allowance for loan losses.
-21-
Summary of Loan Loss Experience
The following table is a summary of average loans outstanding during the
reported periods, changes in the allowance for loan losses arising from
loans charged off and recoveries on loans previously charged off by loan
category, and additions to the allowance which have been charged to
operating expenses.
Year Ended December 31,
1999 1998 1997 1996 1995
(Thousands Of Dollars)
Average amount of net
loans outstanding $111,198 $113,820 $117,029 $113,123 $113,515
Amount of allowance for
loan losses at beginning
of period $ 2,003 $ 1,999 $ 2,009 $ 2,140 $ 2,028
Amount of loans charged off
during period:
Commercial, financial and
agricultural 174 201 69 234 35
Real estate - mortgage 13 37 11 1 51
Installment 123 127 234 136 127
Total loans charged off 310 365 314 371 213
Amount of recoveries during
period:
Commercial, financial, and
agricultural 9 31 26 11 -
Real estate - mortgage 4 2 0 5 11
Installment 58 56 48 44 54
Total loans recovered 71 89 74 60 65
Net loans charged off
during period 239 276 240 311 148
Additions to allowance for
loan losses charged to
operating expense during
period 180 280 230 180 260
Amount of allowance for
loan losses at end
of period $ 1,944 $ 2,003 $ 1,999 $ 2,009 $ 2,140
Ratio of net charge-offs
during period to average
loans outstanding for
the period .21% .24% .21% .27% .13%
The allowance is based upon management's analysis of the portfolio under
current and expected economic conditions. This analysis includes a study of
loss experience, a review of delinquencies, and an estimate of the
possibility of loss in view of the risk characteristics of the portfolio.
Based on the above factors, management considers the current allowance to be
adequate.
-22-
Allocation of Allowance For Loan Losses
Management has allocated the allowance for loan losses within the categories
of loans set forth in the table below according to amounts deemed reasonably
necessary to provide for possible losses. The amount of the allowance
applicable to each category and the percentage of loans in each category to
total loans are presented below.
December 31, 1999 December 31, 1998 December 31, 1997
Percent Of Percent Of Percent Of
Loans In Loans In Loans In
Category Allocation Category Allocation Category Allocation Category
(Thousands Of Dollars)
Domestic:
Commercial,
financial and
agricultural $ 336 17.3% $ 268 13.4% $ 271 13.6%
Real estate -
mortgage 1,413 72.7% 1,538 76.8% 1,523 76.2%
Installment 195 10.0% 197 9.8% 205 10.2%
Total $ 1,944 100.0% $ 2,003 100.0% $ 1,999 100.0%
December 31, 1996 December 31, 1995
Percent Of Percent Of
Loans In Loans In
Category Allocation Category Allocation Category
(Thousands Of Dollars)
Domestic:
Commercial,
financial and
agricultural $ 402 15.9% $ 449 13.7%
Real estate -
mortgage 1,406 73.8% 1,476 76.2%
Installment 201 10.3% 215 10.1%
Total $ 2,009 100.0% $ 2,140 100.0%
The calculation is based upon total loans including unearned interest.
Management believes that the portfolio is well diversified and, to a large
extent, secured without undue concentrations in any specific risk area.
Control of loan quality is regularly monitored by management and is reviewed
by the Bank's Board of Directors which meets monthly. Independent external
review of the loan portfolio is provided by examinations conducted by
regulatory authorities. The amount of additions to the allowance for loan
losses charged to operating expense for the periods indicated were based
upon many factors, including actual charge offs and evaluations of current
and prospective economic conditions in the market area. Management believes
the allowance for loan losses is adequate to cover any potential loan
losses.
-23-
Deposits
The average amounts of deposits for the last three years are presented
below.
Year Ended December 31,
1999 1998 1997
(Thousands Of Dollars)
Domestic Bank Offices
Noninterest-bearing
demand deposits $ 25,387 $ 21,706 $ 20,918
NOW accounts 37,091 38,135 34,332
Money market deposit
accounts 8,858 9,164 11,905
Savings 14,186 13,822 14,373
Time deposits 99,183 96,887 92,409
Total interest-bearing 159,318 158,008 153,019
Total average deposits $ 184,705 $ 179,714 $ 173,937
The maturity of certificates of $100,000 or more as of December 31, 1999,
are presented below.
(Thousands Of Dollars)
3 months or less $ 8,031
Over 3 months through 6 months 5,617
Over 6 months through 12 months 7,572
Over 12 months 3,946
Total outstanding $ 25,166
-24-
Return On Equity And Assets
Certain financial ratios are presented below.
Year Ended December 31,
1999 1998 1997
Return on average assets 1.69% 1.66% 1.62%
Return on average equity 13.26% 13.74% 14.37%
Dividend payout ratio
(dividends declared
divided by net income) 33.60% 31.88% 30.65%
Average equity to average
assets ratio 12.74% 12.10% 11.28%
Item 2 - Property
The executive offices of the Registrant and the main banking office of the
Bank are located in a 19,000 square foot facility at 201 First Street, S.
E., Moultrie, Georgia. Also, in 1991 the Registrant acquired an 11,000
square foot Federal Branch office, and an adjacent 5,000 square foot
building was renovated in 1992 for the Bank's Operations Center. The Trust
and Investment Division has been relocated to the federal branch building
located at 25 Second Avenue, Moultrie, Georgia. Also, the federal branch
banking operations were merged into the main office. In 1993 the Registrant
purchased a vacant building and lot located across the street from the main
office at 205 Second Street, S. E., Moultrie, Georgia. This building was
renovated for the Bank's Administrative Services Division offices, training
and meeting rooms, and record storage. In 1994 the Registrant acquired a
4,400 square foot Baker County branch banking office located at the
intersection of Highways 91 and 200, Newton, Georgia. In 1998, the
Registrant acquired a 3,900 square foot Bank of Pavo branch banking office
located at 1102 West Harris Street, Pavo, Georgia. In 1999, the Registrant
acquired the ownership of McLaughlin, Edwards, and Robison, Inc. d/b/a
Moultrie Insurance Agency which is located in Moultrie, Georgia. The
insurance agency was merged into Southwest Georgia Insurance Services, Inc.
which is a subsidiary of Southwest Georgia Bank, and has its headquarters in
Newton, Georgia. The Registrant signed a purchase agreement to acquire in
February 2000 the 5,600 square-foot insurance agency building located at 501
South Main Street, Moultrie, Georgia. All of these facilities are adequate
for present operations.
All the buildings and land, which include parking and ten drive-in teller
stations, are owned by the Bank. There are two automated teller machines on
the Bank's main office premises, one in the Baker County branch office and
the Bank of Pavo branch office, and one additional automated teller machine
located in Doerun, Georgia. These automated teller machines are linked to
the STAR network of automated teller machines.
-25-
Item 3 - Legal Proceedings
There are no material pending legal proceedings to which the Registrant or
the Bank is a party or to which any of their property is subject.
Item 4 - Submission of Matters to a Vote of Security Holders
There were no matters submitted during the fourth quarter of 1999 for a vote
of the security holders through the solicitation of proxies or otherwise.
-26-
PART II
Item 5 - Market for Registrant's Common Equity and Related Stockholder
Matters
Market for common equity and related stockholder matters appear under the
caption "Management's Discussion and Analysis of Financial Condition and
Results of Operation" on pages 11 through 17 of the Registrant's 1999 Annual
Report to Shareholders and is incorporated herein by reference.
Item 6 - Selected Financial Data
Five years of selected financial data appears on page 9 and 10 of the
Registrant's 1999 Annual Report to Shareholders and is incorporated herein
by reference.
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Management's discussion and analysis of financial condition and results of
operation appears under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations" on pages 11 through 17 of the
Registrant's 1999 Annual Report to Shareholders and is incorporated herein
by reference. For further information about the Registrant, see Selected
Statistical Information on pages 13 - 25 of this report on Form 10-K.
Item 7A - Quantitative and Qualitative Disclosures About Market Risk
Management's quantitative and qualitative information about market risk
appears under the caption "Quantitative and Qualitative Disclosures About
Market Risk" on pages 16 through 17 of the Registrant's 1999 Annual Report
to Shareholders and is incorporated herein by reference.
Item 8 - Financial Statements and Supplementary Data
The report of independent auditors, the consolidated financial statements,
and notes to the consolidated financial statements on pages 18 through 38 of
the Registrant's 1999 Annual Report to Shareholders are incorporated herein
by reference.
Item 9 - Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
During the Registrant's two most recent fiscal years, the Registrant did not
change accountants and had no disagreement with its accountants on any
matter of accounting principles or practices or financial statement
disclosure.
-27-
PART III
Item 10 - Directors and Executive Officers of the Registrant
The information contained under the heading "Information About Nominees For
Director" in the definitive Proxy Statement used in connection with the
solicitation of proxies for the Registrant's annual meeting of shareholders
to be held on April 25, 2000, filed with the Commission, is incorporated
herein by reference. Information on Form 10-K relating to the executive
officers of the Registrant is included in Item 1 of this report.
Item 11 - Executive Compensation
The information contained under the heading "Executive Compensation" in the
definitive Proxy Statement used in connection with the solicitation of
proxies for the Registrant's annual meeting of shareholders to be held on
April 25, 2000, filed with the Commission, is incorporated herein by
reference.
Item 12 - Security Ownership of Certain Beneficial Owners and Management
The information contained under the heading "Voting Securities and Principal
Holders" in the definitive Proxy Statement used in connection with the
solicitation of proxies for the Registrant's annual meeting of shareholders
to be held on April 25, 2000, filed with the Commission, is incorporated
herein by reference. For purposes of determining the aggregate market value
of the Registrant's voting stock held by nonaffiliates, shares held by all
directors and executive officers of the Registrant have been excluded. The
exclusion of such shares is not intended to, and shall not, constitute a
determination as to which persons or entities may be "affiliates" of the
Registrant as defined by the Securities and Exchange Commission.
Item 13 - Certain Relationships and Related Transactions
The information contained under the heading "Certain Relationships and
Related Transactions" in the definitive Proxy Statement used in connection
with the solicitation of proxies for the Registrant's annual meeting of
shareholders to be held on April 25, 2000, filed with the Commission, is
incorporated herein by reference.
-28-
Item 14 - Exhibits, Financial Statement Schedules, and Reports on Form 8-K
a.Exhibits:
The exhibits filed as part of this registration statement are as follows:
Exhibit
Number Description Of Exhibit
3.1 Articles of Incorporation of Southwest Georgia Financial Corporation,
as amended and restated (included as Exhibit 3.1 to the Registrant's
Form 10-KSB dated December 31, 1996, previously filed with the
commission and incorporated herein by reference).
3.2 By-Laws of the Registrant as amended (included as Exhibit 3.2 to the
Registrant's Form 10-KSB dated December 31, 1995, previously filed with
the Commission and incorporated herein by reference).
10.1 Pension Retirement Plan of the Registrant, as amended and restated
(included as Exhibit 10.1 to the Registrant's Form 10-KSB dated
December 31, 1994, and previously filed with the Commission and
incorporated herein by reference).*
10.2 Form of Directors' Deferred Compensation Plan of the Registrant
(included as Exhibit 10.3 to the Registrant's Form S-18 dated
January 23, 1990, previously filed with the Commission and incorporated
herein by reference).*
10.3 Employment Agreement of John H. Clark, as amended (included as Exhibit
10.3 to the Registrant's Form 10-K dated December 31, 1997, previously
filed with the Commission and incorporated herein by reference).*
10.4 Directors' and Executive Officers' Stock Purchase Plan of the
Registrant dated March 18, 1992 (included as Exhibit 10.7 to the
Registrant's Form 10-KSB dated December 31, 1992, previously filed with
the Commission and incorporated herein by reference).*
10.5 Advances, specific collateral pledged, and security agreement between
the Federal Home Loan Bank of Atlanta and the Bank dated January 27,
1992, and confirmation of credit services transaction for new money
advances in the amount of $4,000,000 dated February 10, 1992,
$2,500,000 dated September 4, 1992, and $1,500,000 dated September 8,
1992 (included as Exhibit 10.10 to the Registrant's Form 10-KSB dated
December 31, 1992, previously filed with the Commission and incorporated
herein by reference).
10.6a Supplemental Retirement Plan of the Registrant dated December 21,
1994 (included as Exhibit 10.11 to the Registrant's Form 10-KSB dated
December 31, 1994, previously filed with the Commission and
incorporated herein by reference).*
-29-
10.6b Trust under the Registrant's Supplemental Retirement Plan, as amended
(included as Exhibit 10.6b to the Registrant's Form 10-K dated December
31, 1997, previously filed with the Commission and incorporated herein
by reference).*
10.7 Employee Stock Ownership Plan and Trust of the Registrant as amended
by Amendment No. 2 (included as Exhibit 10.13 to the Registrant's Form
10-KSB dated December 31, 1994, previously filed with the Commission
and incorporated herein by reference).*
10.8 Dividend Reinvestment and Share Purchases Plan of the Registrant as
amended and restated by Amendment No. 1 (included as Exhibit
99 to the Registrant's Form S-3DPOS dated September 30, 1998, previously
filed with the Commission and incorporated herein by reference).
10.9 Key Individual Stock Option Plan of the Registrant dated March 19,
1997 (included as Exhibit 10.9 to the Registrant's Form 10-K dated
December 31, 1997, previously filed with the Commission and
incorporated herein by reference).*
13 Southwest Georgia Financial Corporation Annual Report to Shareholders
for the fiscal year ended December 31, 1999. With the exception of
information expressly incorporated herein, the 1999 Annual Report to
Shareholders is not deemed to be filed as part of this Report on
Form 10-K.
22 Subsidiaries of the Registrant (included as Exhibit 22 to the
Registrant's Form 10-KSB dated December 31, 1995, previously filed
with the Commission and incorporated herein by reference).
* Management contract or compensatory plan or arrangement required to be
filed as an exhibit to this form.
b. No reports on Form 8-K were filed by the Registrant during the fourth
quarter of 1999.
-30-
Exhibit Index
Exhibit
Number Description Of Exhibit Page Number
13 Southwest Georgia Financial Corporation Annual 34
Report to Shareholders for the fiscal year ended
December 31, 1999. With the exception of
information expressly incorporated herein, the
1999 Annual Report to Shareholders is not deemed
to be filed as part of this Report on Form 10-K.
-31-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Southwest Georgia Financial Corporation
(Registrant)
Date: March 24, 2000 By: /s/ John H. Clark
JOHN H. CLARK
CHAIRMAN AND CHIEF
EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ John H. Clark Date: March 24, 2000
JOHN H. CLARK
Chairman and Chief Executive Officer
[Principal Executive Officer]
/s/ George R. Kirkland Date: March 24, 2000
GEORGE R. KIRKLAND
Senior Vice-President and Treasurer
[Principal Financial and Accounting Officer]
/s/ Cecil W. Alvis Date: March 24, 2000
CECIL W. ALVIS
Director
/s/ Albert W. Barber Date: March 24, 2000
ALBERT W. BARBER
Director
/s/ Cecil H. Barber Date: March 24, 2000
CECIL H. BARBER
Director
-32-
/s/ Robert M. Duggan Date: March 24, 2000
ROBERT M. DUGGAN
Director
/s/ Richard L. Moss Date: March 24, 2000
RICHARD L. MOSS
Director
/s/ Michael J. McLean Date: March 24, 2000
MICHAEL J. MCLEAN
Director
/s/ Johnny R. Slocumb Date: March 24, 2000
JOHNNY R. SLOCUMB
Director
/s/ Roy Reeves Date: March 24, 2000
ROY REEVES
Director
/s/ Lee C. Redding Date: March 24, 2000
LEE C. REDDING
Director
/s/ Violet K. Weaver Date: March 24, 2000
VIOLET K. WEAVER
Director
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