SAVANNAH, Ga., Jan. 28, 2009 (GLOBE NEWSWIRE) -- The Savannah Bancorp, Inc. (Nasdaq:SAVB) reported net income for the fourth quarter 2008 of $778,000 compared to $353,000 for the same period in 2007. Fourth quarter net income per diluted share was $0.13 in 2008 and $0.06 in 2007, an increase of 117 percent. Net income for 2008 was $6,006,000 compared with net income of $7,636,000 in 2007, a decrease of 21 percent. Net income per diluted share was $1.01 for 2008 and $1.29 in 2007, a decrease of 22 percent. The decline in 2008 earnings results primarily from a higher provision for loan losses and a lower net interest margin when compared to 2007. 2008 earnings include the net income derived from the previously announced acquisition of Minis & Co., Inc. ("Minis") on August 31, 2007. Other growth and performance ratios are included in the attached financial highlights and information.
Total assets increased 8.0 percent to $1 billion at December 31, 2008, up $68 million from $932 million a year earlier. Loans totaled $865 million compared with $809 million one year earlier, an increase of 7.0 percent. Deposits totaled $832 million at December 31, 2008 and $764 million at December 31, 2007, an increase of 8.9 percent. Average total assets increased 10 percent to $960 million in 2008 from $869 million in 2007. Average portfolio loans were $822 million in 2008 compared with $754 million in 2007, an increase of 9.0 percent. Average deposits were $785 million in 2008 and $720 million in 2007, an increase of 9.0 percent. Shareholders' equity increased 6.1 percent to $81 million at December 31, 2008 from $76 million at December 31, 2007. The Company's total capital to risk-weighted assets ratio was 11.54 percent, well in excess of the 10 percent required by the regulatory agencies to maintain well-capitalized status.
President and CEO John C. Helmken II said, "Despite the continued headwinds of the current economy we were able to turn in positive earnings in the fourth quarter and a very respectable $6 million in net income for 2008. Our Company crossed the threshold of $1 billion in assets and grew loans and deposits 7% and 9%, respectively, in 2008."
The allowance for loan losses was $13,300,000, or 1.54 percent of loans at December 31, 2008 compared to $12,864,000 or 1.59 percent of total loans a year earlier. Nonperforming assets were $35,707,000 or 4.09 percent of total loans and other real estate owned at December 31, 2008 compared to $19,535,000 or 2.41 percent at December 31, 2007. For 2008, net charge-offs were $5,564,000 compared to $765,000 for 2007. The provision for loan losses for 2008 was $6,000,000 compared to $4,675,000 for 2007. Fourth quarter 2008 net charge-offs were $1,360,000 compared to net charge-offs of $123,000 in the same period in 2007. The provision for loan losses for the fourth quarter of 2008 was $2,270,000 compared to $3,145,000 for the fourth quarter of 2007.
Helmken added, "We continue to commit the expertise, resources and discipline necessary to work through problem assets in our portfolio. While our asset quality trends have not improved they continue to be at a manageable level. However, we remain very much on the offensive as it relates to our team of experienced bankers soliciting new relationships and taking care of the banking needs of our existing customers. We view our 12% deposit market share as 88% opportunity. Management is very focused on working problem credits, continuing to serve our customers and meet their financial needs, and reducing our noninterest expense as we must do -- now more than ever before. Nothing is sacred in that regard. We are evaluating every line item to make sure that our dollars are wisely invested; where they are not, that expense is being eliminated.
"While it is certainly not business as usual in times like these, our growing customer base can continue to expect our high touch, relationship banking that serves our banks and customers well in good times as well as tough times," Helmken said.
Net interest income decreased $733,000, or 2.2 percent, in 2008 over 2007. In 2008, the net interest margin declined to 3.58 percent from 3.99 percent in 2007, primarily due to a decline in noninterest-bearing deposits and higher levels of noninterest-earning assets. Noninterest income increased $2,824,000 or 60 percent, including $1,319,000 in higher trust and asset management fees due primarily to Minis, $498,000 in higher service charges on deposit accounts, and hedging gains of $1,288,000, partially offset by lower mortgage related income. Noninterest expense increased $3,461,000, or 16 percent during 2008 as compared to 2007. Of the increase, $940,000 was related to the full year of operations of Minis. Noninterest expense also included $402,000 of higher FDIC insurance premiums and approximately $483,000 of higher expense related to other real estate and loan costs. The remainder of the increase was due to higher personnel, occupancy and equipment and other expense.
In the fourth quarter, the Company also applied to participate in the TARP Capital Purchase Program offered by the U.S. Treasury Department. The Company is eligible to issue up to $24 million of preferred stock under the guidelines of the program.
The Board of Directors approved a regular quarterly cash dividend of 12.5 cents per share for the first quarter. The first quarter dividend is payable on February 23, 2009 to shareholders of record on February 6, 2009.
The Savannah Bancorp, Inc. ("SAVB"), a bank holding company for The Savannah Bank, N.A., Bryan Bank & Trust (Richmond Hill, GA), Harbourside Community Bank (Hilton Head Island, SC) and Minis & Co., Inc. (a registered investment advisory firm), is headquartered in Savannah, Georgia and began operations in 1990. Its primary businesses include loan, deposit, trust, asset management and mortgage origination services provided to local customers.
Forward-Looking Statements
This press release contains statements that constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934 as amended by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among others, statements identified by words or phrases such as "potential," "opportunity," "believe," "expect," "anticipate," "current," "intention," "estimate," "assume," "outlook," "continue," "seek," "plans," "achieve," and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "may" or similar expressions. These statements are based on the current beliefs and expectations of our management and are subject to significant risks and uncertainties. There can be no assurance that these transactions will occur or that the expected benefits associated therewith will be achieved. A number of important factors could cause actual results to differ materially from those contemplated by our forward-looking statements in this press release. Many of these factors are beyond our ability to control or predict. These factors include, but are not limited to, those found in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise.
A printable PDF format of this entire Annual Earnings Release may be obtained from the Corporate Website at www.savb.com under the "SEC Filings and More" link and the "Latest Earnings Release" selection.
The Savannah Bancorp, Inc. and Subsidiaries
Fourth Quarter Financial Highlights
December 31, 2008 and 2007
($ in thousands, except per share data)
(Unaudited)
--------------------------------------------------------------------
Balance Sheet Data at December 31 2008 2007 % Change
--------------------------------------------------------------------
Total assets $1,007,377 $ 932,459 8.0
Interest-earning assets 931,448 878,992 6.0
Loans 864,974 808,651 7.0
Allowance for loan losses 13,300 12,864 3.4
Nonaccruing loans 26,277 14,663 79
Loans past due 90 days -
accruing 1,330 2,761 (52)
Net charge-offs 5,564 765 NM
Deposits 832,123 764,218 8.9
Interest-bearing liabilities 837,558 759,597 10
Shareholders' equity 80,932 76,272 6.1
Allowance for loan losses
to total loans 1.54% 1.59% (3.1)
Nonperforming assets to total
loans and OREO 4.09% 2.41% 70
Loan to deposit ratio 104% 106% (1.9)
Equity to assets 8.03% 8.18% (1.8)
Tier 1 capital to
risk-weighted assets 10.28% 10.49% (2.0)
Total capital to
risk-weighted assets 11.54% 11.74% (1.7)
Outstanding shares (000s) 5,934 5,924 0.2
Book value per share $ 13.64 $ 12.88 5.9
Tangible book value per share $ 13.19 $ 12.40 6.4
Market value per share $ 8.85 $ 17.14 (48)
Performance Data for the Year
--------------------------------
Net income $ 6,006 $ 7,636 (21)
Return on average assets 0.63% 0.88% (28)
Return on average equity 7.60% 10.68% (29)
Net interest margin 3.58% 3.99% (10)
Efficiency ratio 61.85% 56.09% 14
Per share data:
Net income - basic $ 1.01 $ 1.31 (23)
Net income - diluted $ 1.01 $ 1.29 (22)
Dividends $ .50 $ .48 4.2
Average shares (000s):
Basic 5,930 5,850 1.4
Diluted 5,947 5,922 0.4
Performance Data
for the Fourth Quarter
--------------------------------
Net income $ 778 $ 353 120
Return on average assets 0.31% 0.15% 107
Return on average equity 3.86% 1.83% 111
Net interest margin 3.24% 3.72% (13)
Efficiency ratio 63.89% 60.48% 2.3
Per share data:
Net income - basic $ 0.13 $ 0.06 117
Net income - diluted $ 0.13 $ 0.06 117
Dividends $ 0.125 $ 0.120 4.2
Average shares (000s):
Basic 5,933 5,923 0.2
Diluted 5,942 5,968 (0.4)
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
December 31, 2008 and 2007
($ in thousands, except share data)
--------------------------------------------------------------------
December 31,
2008 2007
--------------------------------------------------------------------
Assets (Unaudited)
Cash and due from banks $ 15,196 $ 12,721
Federal funds sold 9,701 4,435
Interest-bearing deposits in banks 3,312 20,148
--------------------------------------------------------------------
Cash and cash equivalents 28,209 37,304
Securities available for sale, at
fair value (amortized cost of $79,447
and $60,241) 81,619 61,057
Loans held for sale 291 180
Loans, net of allowance for loan losses
of $13,300 and $12,864 851,674 795,787
Premises and equipment, net 11,107 6,830
Other real estate owned 8,100 2,112
Bank-owned life insurance 6,216 5,985
Goodwill and other intangible assets, net 2,642 2,806
Other assets 17,519 20,398
--------------------------------------------------------------------
Total assets $1,007,377 $ 932,459
====================================================================
Liabilities
Deposits:
Noninterest-bearing $ 82,831 $ 88,503
Interest-bearing demand 128,965 127,902
Savings 14,370 16,168
Money market 199,194 176,615
Time deposits 406,763 355,030
--------------------------------------------------------------------
Total deposits 832,123 764,218
Short-term borrowings 66,737 70,599
Federal Home Loan Bank advances -
long-term 11,219 2,973
Subordinated debt to
nonconsolidated subsidiaries 10,310 10,310
Other liabilities 6,056 8,087
--------------------------------------------------------------------
Total liabilities 926,445 856,187
--------------------------------------------------------------------
Shareholders' equity
Preferred stock,
par value $1 per share: authorized
10,000,000 shares, none issued -- --
Common stock, par value $1 per share:
authorized 20,000,000 shares; issued
5,933,789 and 5,923,797 shares 5,934 5,924
Additional paid-in capital 38,516 38,279
Retained earnings 33,552 30,512
Treasury stock, 318 shares in
2008 and 2007 (4) (4)
Accumulated other comprehensive
income, net 2,934 1,561
--------------------------------------------------------------------
Total shareholders' equity 80,932 76,272
--------------------------------------------------------------------
Total liabilities and
shareholders' equity $1,007,377 $ 932,459
====================================================================
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
for the Two Years and Five Quarters Ending December 31, 2008
($ in thousands, except per share data)
------------------------------------------------------------------
For the Years Ended
------------------------------------------------------------------
December 31, %
2008 2007 Chg
------------------------------------------------------------------
Interest and dividend income
Loans, including fees $ 53,259 $ 59,435 (10)
Loans held for sale 60 98 (39)
Investment securities 3,081 2,907 6.0
Deposits with banks 149 346 (57)
Federal funds sold 133 472 (72)
------------------------------------------------------------------
Total interest and dividend income 56,682 63,258 (10)
------------------------------------------------------------------
Interest expense
Deposits 21,842 26,415 (17)
Short-term borrowings & sub debt 2,303 3,454 (33)
FHLB advances 294 413 (29)
------------------------------------------------------------------
Total interest expense 24,439 30,282 (19)
------------------------------------------------------------------
Net interest income 32,243 32,976 (2.2)
Provision for loan losses 6,000 4,675 28
------------------------------------------------------------------
Net interest income after the
provision for loan losses 26,243 28,301 (7.3)
------------------------------------------------------------------
Noninterest income
Trust and asset management fees 2,832 1,513 87
Service charges on deposits 1,881 1,383 36
Mortgage related income, net 295 615 (52)
Other operating income 1,216 1,242 (2.1)
Gain on hedges 1,288 -- --
Gain (loss) on sale of OREO (142) (44) 223
Gain on sale of securities 163 -- --
------------------------------------------------------------------
Total noninterest income 7,533 4,709 60
------------------------------------------------------------------
Noninterest expense
Salaries and employee benefits 13,536 11,846 14
Occupancy and equipment 3,884 3,294 18
Information technology 1,633 1,616 1.1
Other operating expense 5,547 4,383 27
------------------------------------------------------------------
Total noninterest expense 24,600 21,139 16
------------------------------------------------------------------
Income before income taxes 9,176 11,871 (23)
Income tax expense 3,170 4,235 (25)
------------------------------------------------------------------
Net income $ 6,006 $ 7,636 (21)
==================================================================
Net income per share:
Basic $ 1.01 $ 1.31 (23)
==================================================================
Diluted $ 1.01 $ 1.29 (22)
==================================================================
Average basic shares (000s) 5,930 5,850 1.4
Average diluted shares (000s) 5,947 5,922 0.4
Performance Ratios
Return on average equity 7.60% 10.68% (29)
Return on average assets 0.63% 0.88% (28)
Net interest margin 3.58% 3.99% (10)
Efficiency ratio 61.8% 56.1% 10
Average equity 78,998 71,516 10
Average assets 960,260 869,026 10
Average interest-earning assets 898,295 830,900 8.1
---------------------------------------------------------------------
(Unaudited)
---------------------------------------------------------------------
2008 2007 Q4-08 /
------------------------------------------------------------- -------
Fourth Third Second First Fourth Q4-07
Quarter Quarter Quarter Quarter Quarter % Chg
---------------------------------------------------------------------
Interest and
dividend income
Loans,
including
fees $ 12,268 $ 13,333 $ 13,447 $ 14,211 $ 15,016 (18)
Loans held for
sale 8 20 20 12 14 (43)
Investment
securities 817 722 760 782 767 6.5
Deposits with
banks 18 30 34 67 100 (82)
Federal funds
sold 16 31 33 53 45 (64)
---------------------------------------------------------------------
Total interest
and dividend
income 13,127 14,136 14,294 15,125 15,942 (18)
---------------------------------------------------------------------
Interest expense
Deposits 4,969 5,391 5,358 6,124 6,881 (28)
Short-term
borrowings &
sub debt 543 412 467 881 935 (42)
FHLB advances 80 82 83 49 46 74
---------------------------------------------------------------------
Total interest
expense 5,592 5,885 5,908 7,054 7,862 (29)
---------------------------------------------------------------------
Net interest
income 7,535 8,251 8,386 8,071 8,080 (6.7)
Provision for
loan losses 2,270 1,505 1,155 1,070 3,145 (28)
---------------------------------------------------------------------
Net interest
income after
the provision
for loan
losses 5,265 6,746 7,231 7,001 4,935 6.7
---------------------------------------------------------------------
Noninterest income
Trust and asset
management
fees 675 713 720 724 769 (12)
Service
charges on
deposits 447 513 534 387 349 28
Mortgage
related
income, net 60 86 86 63 98 (39)
Other
operating
income 314 296 300 306 315 (0.3)
Gain on hedges 574 430 -- 284 -- --
Gain (loss) on
sale of OREO (141) (17) 17 (1) (38) 271
Gain on sale
of
securities 29 -- 134 -- -- --
---------------------------------------------------------------------
Total
noninterest
income 1,958 2,021 1,791 1,763 1,493 31
---------------------------------------------------------------------
Noninterest expense
Salaries and
employee
benefits 3,095 3,479 3,489 3,473 3,125 (1.0)
Occupancy and
equipment 1,118 967 910 889 958 17
Information
technology 421 424 395 393 422 (0.2)
Other
operating
expense 1,431 1,364 1,357 1,395 1,285 11
---------------------------------------------------------------------
Total
noninterest
expense 6,065 6,234 6,151 6,150 5,790 4.7
---------------------------------------------------------------------
Income before
income taxes 1,158 2,533 2,871 2,614 638 82
Income tax
expense 380 895 985 910 285 33
---------------------------------------------------------------------
Net income $ 778 $ 1,638 $ 1,886 $ 1,704 $ 353 120
=====================================================================
Net income per share:
Basic $ .13 $ 0.28 $ 0.32 $ .29 $ .06 117
=====================================================================
Diluted $ .13 $ 0.28 $ 0.32 $ .29 $ .06 117
=====================================================================
Average basic
shares (000s) 5,933 5,930 5,931 5,927 5,923 0.2
Average diluted
shares (000s) 5,942 5,943 5,952 5,952 5,968 (0.4)
Performance Ratios
Return on
average
equity 3.86% 8.24% 9.65% 8.76% 1.83% 110
Return on
average
assets 0.31% 0.68% 0.80% 0.73% 0.15% 107
Net interest
margin 3.24% 3.63% 3.77% 3.70% 3.72% (13)
Efficiency
ratio 63.9% 60.7% 60.4% 62.5% 60.5% 5.6
Average equity 80,138 79,035 78,596 78,210 74,447 7.6
Average assets 991,368 964,762 949,937 934,756 910,785 8.8
Average
interest-
earning
assets 922,642 901,992 892,397 876,022 865,430 6.6
The Savannah Bancorp, Inc. and Subsidiaries
Selected Financial Condition Highlights - Five-Year Comparison
($ in thousands, except per share data)
(Unaudited)
---------------------------------------------------------------------
2008 2007 2006 2005 2004
---------------------------------------------------------------------
Selected Average Balances
-------------------------
Assets $ 960,260 $ 869,026 $ 769,917 $ 685,163 $ 557,474
Loans held for
sale 765 1,299 7,842 23,033 27,209
Loans, net of
unearned income 821,673 754,490 658,750 565,131 441,421
Securities 62,019 58,910 50,600 41,300 40,703
Other interest-
earning assets 13,838 16,201 17,278 26,168 22,383
Total interest-
earning assets 898,295 830,900 734,470 655,632 531,716
Interest-bearing
deposits 701,045 628,310 542,375 487,493 371,877
Borrowed funds 88,553 70,939 62,255 55,255 67,353
Total interest-
bearing
liabilities 789,598 699,249 604,630 542,748 439,230
Noninterest-
bearing deposits 83,678 91,367 96,113 89,386 76,593
Total deposits 784,723 719,677 638,488 576,879 448,470
Shareholders'
equity 78,998 71,516 61,766 47,428 38,126
Loan to deposit
ratio - average 105% 105% 103% 98% 98%
Selected Financial
Data at Year-End
------------------
Assets $1,007,377 $ 932,459 $ 843,514 $ 717,901 $ 617,341
Interest-earning
assets 931,448 878,992 803,927 685,531 593,035
Loans held for
sale 291 180 914 10,473 26,471
Loans, net of
unearned income 864,974 808,651 720,918 613,667 499,868
Deposits 832,123 764,218 706,824 600,510 506,120
Loan to deposit
ratio 104% 106% 102% 102% 99%
Interest-bearing
liabilities 837,558 759,597 669,974 558,116 488,546
Shareholders'
equity 80,932 76,272 66,574 58,543 40,071
Shareholders'
equity
to total assets 8.03% 8.18% 7.89% 8.15% 6.49%
Dividend payout
ratio 49.38% 36.73% 25.92% 25.53% 37.69%
Risk-based capital
ratios:
Tier 1 capital
to risk-
weighted assets 10.28% 10.49% 11.09% 11.52% 9.95%
Total capital to
risk-weighted
assets 11.54% 11.74% 12.34% 12.77% 11.20%
Loan Quality Data
-----------------
Nonperforming
assets $ 35,707 $ 19,535 $ 2,776 $ 1,357 $ 998
Nonperforming
loans 27,607 17,424 2,231 1,357 538
Net charge-offs 5,564 765 444 76 128
Allowance for loan
losses 13,300 12,864 8,954 7,813 6,389
Nonperforming
loans to loans 3.19% 2.15% 0.31% 0.22% 0.11%
Nonperforming
assets to loans
and other real
estate owned 4.09% 2.41% 0.39% 0.22% 0.20%
Net charge-offs to
average loans 0.68% 0.01% 0.07% 0.01% 0.03%
Allowance for loan
losses to total
loans 1.54% 1.59% 1.24% 1.27% 1.28%
Per Share Data at
Year-End (a)
-----------------
Book value $ 13.64 $ 12.88 $ 11.52 $ 10.20 $ 7.80
Tangible book
value 13.19 12.40 11.52 10.20 7.80
Common stock
closing price
(Nasdaq) 8.85 17.14 27.25 28.38 21.64
Common shares
outstanding(000s) 5,934 5,924 5,781 5,739 5,140
(a) Share and per share amounts have been restated to reflect the
effect of a 5-for-4 stock split in December 2006.
The Savannah Bancorp, Inc. and Subsidiaries
Selected Operating Highlights - Five-Year Comparison
($ in thousands, except per share data)
(Unaudited)
------------------------------------------------------------------
2008 2007 2006 2005 2004
------------------------------------------------------------------
Summary of operations
Interest income -
taxable equivalent $56,714 $63,414 $55,347 $42,544 $28,947
Interest expense 24,439 30,282 22,737 14,679 8,427
------------------------------------------------------------------
Net interest income -
taxable equivalent 32,275 33,132 32,610 27,865 20,520
Taxable equivalent
adjustment (32) (156) (158) (186) (240)
------------------------------------------------------------------
Net interest income 32,243 32,976 32,452 27,679 20,280
Provision for loan
losses 6,000 4,675 1,585 1,500 1,450
------------------------------------------------------------------
Net interest income
after provision for
loan losses 26,243 28,301 30,867 26,179 18,830
------------------------------------------------------------------
Noninterest income
Trust and asset
management fees 2,832 1,513 658 501 442
Service charges on
deposit accounts 1,881 1,383 1,526 1,622 1,598
Mortgage related
income, net 295 615 886 1,292 1,079
Other operating
income 1,216 1,242 1,233 972 981
Gain on hedges 1,288 -- -- -- --
Loss on sale of OREO (142) (44) -- -- --
Gain on sale of
securities 163 -- -- -- --
------------------------------------------------------------------
Total noninterest
income 7,533 4,709 4,303 4,387 4,100
------------------------------------------------------------------
Noninterest expense
Salaries and employee
benefits 13,536 11,846 10,852 9,530 8,362
Occupancy and
equipment 3,884 3,294 2,920 2,199 1,963
Information
technology 1,633 1,616 1,525 1,244 1,049
Other operating
expense 5,547 4,383 4,656 3,673 2,880
------------------------------------------------------------------
Total noninterest
expense 24,600 21,139 19,953 16,646 14,254
------------------------------------------------------------------
Income before income
taxes 9,176 11,871 15,217 13,920 8,676
Income tax expense 3,170 4,235 5,215 4,880 2,940
------------------------------------------------------------------
Net income $ 6,006 $ 7,636 $10,002 $ 9,040 $ 5,736
==================================================================
Net income per share:(a)
Basic $ 1.01 $ 1.31 $ 1.73 $ 1.68 $ 1.12
Diluted $ 1.01 $ 1.29 $ 1.70 $ 1.63 $ 1.09
Cash dividends paid
per share $ 0.50 $ 0.48 $ 0.45 $ 0.43 $ 0.42
Average basic shares
outstanding (000s) 5,930 5,850 5,765 5,396 5,136
Average diluted shares
outstanding (000s) 5,947 5,922 5,876 5,531 5,261
Performance ratios
Net interest margin 3.58% 3.99% 4.44% 4.25% 3.86%
Return on average
assets 0.63% 0.88% 1.30% 1.32% 1.03%
Return on average
equity 7.60% 10.68% 16.19% 19.06% 15.04%
Efficiency ratio 61.85% 56.09% 54.29% 51.91% 58.47%
(a) Share and per share amounts have been restated to reflect the
effect of a 5-for-4 stock split in December 2006.
The Savannah Bancorp, Inc. and Subsidiaries
Selected Quarterly Data - 2008 and 2007
($ in thousands, except per share data)
(Unaudited)
Condensed Quarterly Income Statements
The following is a summary of unaudited quarterly results for
2008 and 2007:
2008
--------------------------------------------------------------------
Fourth Third Second First
--------------------------------------------------------------------
Net interest income $7,535 $8,251 $8,386 $8,071
Provision for loan losses 2,270 1,505 1,155 1,070
--------------------------------------------------------------------
Net interest income after
provision for loan losses 5,265 6,746 7,231 7,001
Noninterest income 1,958 2,021 1,791 1,763
Noninterest expense 6,065 6,234 6,151 6,150
--------------------------------------------------------------------
Income before income taxes 1,158 2,533 2,871 2,614
Income tax expense 380 895 985 910
--------------------------------------------------------------------
Net income $ 778 $1,638 $1,886 $1,704
====================================================================
Per share: (a)
Net income - basic $ .131 $ .276 $ .318 $ .287
Net income - diluted $ .131 $ .276 $ .317 $ .286
Dividends $ .125 $ .125 $ .125 $ .125
Average shares (000s)
Basic 5,933 5,930 5,931 5,928
Diluted 5,942 5,943 5,952 5,951
2007
--------------------------------------------------------------------
Fourth Third Second First
--------------------------------------------------------------------
Net interest income $8,080 $8,308 $8,412 $8,176
Provision for loan losses 3,145 635 395 500
--------------------------------------------------------------------
Net interest income after
provision for loan losses 4,935 7,673 8,017 7,676
Noninterest income 1,493 1,164 1,000 1,052
Noninterest expense 5,790 5,176 5,026 5,147
--------------------------------------------------------------------
Income before income taxes 638 3,661 3,991 3,581
Income tax expense 285 1,280 1,400 1,270
--------------------------------------------------------------------
Net income $ 353 $2,381 $2,591 $2,311
====================================================================
Per share: (a)
Net income - basic $ .060 $ .406 $ .445 $ .400
Net income - diluted $ .059 $ .402 $ .439 $ .392
Dividends $ .120 $ .120 $ .120 $ .120
Average shares (000s)
Basic 5,923 5,862 5,824 5,782
Diluted 5,968 5,928 5,899 5,890
Quarterly Market Values of Common Shares
The Company's common stock was sold in an initial public offering
on April 10, 1990. It is traded on the NASDAQ Global Market under
the symbol SAVB. The quarterly high, low and closing stock trading
prices for 2008 and 2007 are listed below. There were approximately
650 holders of record of Company Common Stock and, according to
information available to the Company, approximately 1,150 additional
shareholders in street name through brokerage accounts at December
31, 2008.
2008
--------------------------------------------------------------------
Closing Market Prices Fourth Third Second First
--------------------------------------------------------------------
High $13.35 $15.00 $18.73 $18.49
Low 8.57 11.89 12.75 15.76
Close 8.85 13.25 13.00 17.50
2007
--------------------------------------------------------------------
Closing Market Prices Fourth Third Second First
--------------------------------------------------------------------
High $24.69 $25.97 $27.20 $28.07
Low 17.10 23.00 24.71 27.00
Close 17.14 24.69 25.10 27.00
The Savannah Bancorp, Inc. and Subsidiaries
Allowance for Loan Losses and Nonperforming Loans
(Unaudited)
2008 2007
--------------------------------------------------------------------
Fourth Third Second First Fourth
($ in thousands) Quarter Quarter Quarter Quarter Quarter
--------------------------------------------------------------------
Allowance for loan losses
Balance at
beginning
of period $12,390 $12,445 $12,128 $12,864 $ 9,842
Provision for loan
losses 2,270 1,505 1,155 1,070 3,145
Net charge-offs (1,360) (1,560) (838) (1,806) (123)
--------------------------------------------------------------------
Balance at end of
period $13,300 $12,390 $12,445 $12,128 $12,864
====================================================================
As a % of loans 1.54% 1.45% 1.48% 1.45% 1.59%
As a % of
nonperforming loans 48.18% 56.25% 66.61% 69.26% 73.83%
As a % of
nonperforming
assets 37.25% 43.94% 59.18% 62.08% 65.85%
Net charge-offs as a
% of average loans
(a) 0.65% 0.75% 0.40% 0.90% 0.07%
Risk element assets
Nonaccruing loans $26,277 $17,753 $16,991 $16,915 $14,663
Loans past due 90
days - accruing 1,330 4,274 1,693 596 2,761
--------------------------------------------------------------------
Total nonperforming
loans 27,607 22,027 18,684 17,511 17,424
Other real estate
owned 8,100 6,168 2,346 2,025 2,112
--------------------------------------------------------------------
Total
nonperforming
assets $35,707 $28,195 $21,030 $19,536 $19,536
====================================================================
Loans past due
30-89 days $ 8,269 $ 8,841 $ 6,528 $11,014 $ 4,723
Nonperforming loans
as a % of loans 3.19% 2.58% 2.22% 2.10% 2.24%
Nonperforming
assets as a % of
loans and other
real estate owned 4.09% 3.28% 2.50% 2.33% 2.51%
(a) Annualized
The Savannah Bancorp, Inc. and Subsidiaries
Average Balance Sheet and Rate/Volume Analysis - 2008 and 2007
Average Balance Average Rate
----------------------------------
2008 2007 2008 2007
-------------------------------------------------------------------
($ in thousands) (%)
Assets
$ 7,033 $ 6,958 2.11 4.97 Interest-bearing deposits
60,136 56,851 4.98 5.01 Investments - taxable
1,883 2,059 5.46 7.33 Investments - non-taxable
6,805 9,243 1.95 5.11 Federal funds sold
765 1,299 7.82 7.54 Loans held for sale
821,673 754,490 6.47 7.89 Loans (c)
-------------------
898,295 830,900 6.30 7.63 Total interest-earning assets
------------
61,965 38,126 Noninterest-earning assets
-------------------
$960,260 $869,026 Total assets
===================
Liabilities and equity
Deposits
$120,661 $114,053 1.15 2.00 NOW accounts
15,488 17,831 0.88 0.99 Savings accounts
128,826 120,898 2.38 4.43 Money market accounts
68,464 46,989 2.66 3.85 MMA - institutional
147,576 131,553 4.52 5.35 CDs, $100M or more
85,790 74,234 3.49 4.83 CDs, broker
134,240 122,752 4.25 5.03 Other time deposits
-------------------
701,045 628,310 3.11 4.20 Total interest-bearing deposits
10,264 7,833 2.86 5.27 FHLB advances - long term
67,979 52,796 2.44 4.95 Short-term borrowings
10,310 10,310 6.21 8.17 Subordinated debt
------------------
Total interest-bearing
789,598 699,249 3.09 4.33 liabilities
------------
83,678 91,367 Noninterest-bearing deposits
7,986 6,894 Other liabilities
78,998 71,516 Shareholders' equity
-------------------
$960,260 $869,026 Liabilities and equity
===================
3.21 3.30 Interest rate spread
============
3.58 3.99 Net interest margin
============
Net interest income
$108,697 $131,651 Net earning assets
===================
$784,723 $719,677 Average deposits
===================
2.78 3.67 Average cost of deposits
============
105% 105% Average loan to deposit ratio
===================
Taxable-
Equivalent (a) Variance
Interest (b) Attributable to
---------------- Vari- -------------------
2008 2007 ance Rate Volume
---------------------------------------------------------------------
($ in thousands) ($ in thousands)
Assets
Interest-bearing
deposits $ 149 $ 346 $ (197) $ (200) $ 3
Investments - taxable 3,002 2,848 154 (17) 171
Investments - non-
taxable 103 151 (48) (39) (9)
Federal funds sold 133 472 (339) (293) (46)
Loans held for sale 60 98 (38) 4 (42)
Loans (c) 53,267 59,499 (6,232) (10,743) 4,511
--------------------------
Total interest-
earning assets 56,714 63,414 (6,700) (11,081) 4,381
-----------------------------------------------
Noninterest-earning
assets
Total assets
Liabilities and
equity
Deposits
NOW accounts 1,396 2,279 (883) (972) 89
Savings accounts 137 176 (39) (20) (19)
Money market accounts 3,079 5,355 (2,276) (2,485) 209
MMA - institutional 1,827 1,809 18 (561) 579
CDs, $100M or more 6,685 7,020 (335) (1,082) 747
CDs, broker 2,998 3,605 (607) (1,020) 413
Other time deposits 5,720 6,171 (451) (960) 509
--------------------------
Total interest-
bearing deposits 21,842 26,415 (4,573) (6,867) 2,294
FHLB advances - long
term 294 413 (119) (189) 70
Short-term borrowings 1,661 2,612 (951) (1,329) 378
Subordinated debt 642 842 (200) (203) 3
--------------------------
Total interest-
bearing
liabilities 24,439 30,282 (5,843) (8,694) 2,851
-----------------------------------------------
Noninterest-bearing
deposits
Other liabilities
Shareholders' equity
Liabilities and
equity
Interest rate spread
Net interest margin
Net interest income $32,275 $33,132 $ (857) $ (2,387) $ 1,530
==============================================
Net earning assets
Average deposits
Average cost of
deposits
Average loan to
deposit ratio
(a) This table shows the changes in interest income and interest
expense for the comparative periods based on either changes in
average volume or changes in average rates for interest-earning
assets and interest-bearing liabilities. Changes which are not
solely due to rate changes or solely due to volume changes
are attributed to volume.
(b) The taxable equivalent adjustment results from tax exempt income
less non-deductible TEFRA interest expense and was $32 and $156
in 2008 and 2007.
(c) Average nonaccruing loans have been excluded from total average
loans and categorized in noninterest-earning assets.
The Savannah Bancorp, Inc. and Subsidiaries
Average Balance Sheet and Rate/Volume Analysis - Fourth Quarter,
2008 and 2007
Average Balance Average Rate
-------------------------------------
QTD QTD QTD QTD
2008 2007 2008 2007
--------------------------------------------------------------------
($ in thousands) (%)
Assets
$ 9,998 $ 9,067 0.71 4.38 Interest-bearing deposits
67,557 58,946 4.70 5.07 Investments - taxable
1,792 1,917 5.09 7.45 Investments - non-taxable
7,366 5,368 0.86 3.33 Federal funds sold
159 669 19.96 8.30 Loans held for sale
835,770 789,463 5.82 7.55 Loans (c)
--------------------
922,642 865,430 5.65 7.33 Total interest-earning assets
---------------
68,726 45,355 Noninterest-earning assets
--------------------
$991,368 $910,785 Total assets
====================
Liabilities and equity
Deposits
$127,757 $112,785 0.79 1.85 NOW accounts
14,636 16,437 0.89 0.94 Savings accounts
106,073 136,133 2.06 3.64 Money market accounts
81,776 46,989 2.26 4.99 MMA - institutional
143,900 148,231 4.05 5.36 CDs, $100M or more
107,637 72,360 3.11 4.82 CDs, broker
142,450 126,018 3.77 5.02 Other time deposits
--------------------
724,229 658,953 2.72 4.14 Total interest-bearing deposits
11,609 3,021 2.73 6.04 FHLB advances - long term
73,959 63,952 2.00 4.48 Other borrowings
10,310 10,310 6.58 8.20 Subordinated debt
--------------------
Total interest-bearing
810,107 736,236 2.71 4.24 liabilities
---------------
83,506 90,895 Noninterest-bearing deposits
7,617 7,207 Other liabilities
80,138 76,447 Shareholders' equity
--------------------
$991,368 $910,785 Liabilities and equity
====================
2.94 3.09 Interest rate spread
===============
3.24 3.72 Net interest margin
===============
Net interest income
$102,535 $129,194 Net earning assets
====================
$807,735 $749,848 Average deposits
====================
2.44 3.64 Average cost of deposits
===============
103% 105% Average loan to deposit ratio
====================
Taxable
Equivalent (a) Variance
Interest (b) Attributable to
----------------- -----------------
QTD QTD Vari-
2008 2007 ance Rate Volume
--------------------------------------------------------------------
($ in thousands) ($ in thousands)
Assets
Interest-bearing
deposits $ 18 $ 100 ($82) $ (84) $ 2
Investments - taxable 800 754 46 (55) 101
Investments - non-
taxable 23 36 (13) (11) (2)
Federal funds sold 16 45 (29) (33) 4
Loans held for sale 8 14 (6) 20 (26)
Loans (c) 12,270 15,032 (2,762) (3,442) 680
-------------------------
Total interest-earning
assets 13,135 15,981 (2,846) (3,665) 819
---------------------------------------------
Noninterest-earning
assets
Total assets
Liabilities and equity
Deposits
NOW accounts 254 527 (273) (301) 28
Savings accounts 33 39 (6) (2) (4)
Money market accounts 550 1,250 (700) (542) (158)
MMA - institutional 466 591 (125) (323) 198
CDs, $100M or more 1,468 2,001 (533) (489) (44)
CDs, broker 843 880 (37) (312) 275
Other time deposits 1,355 1,593 (238) (397) 159
-------------------------
Total interest-bearing
deposits 4,969 6,881 (1,912) (2,359) 447
FHLB advances - long
term 80 46 34 (25) 59
Other borrowings 372 722 (350) (400) 50
Subordinated debt 171 213 (42) (42) --
-------------------------
Total interest-bearing
liabilities 5,592 7,862 (2,270) (2,839) 569
---------------------------------------------
Noninterest-bearing
deposits
Other liabilities
Shareholders' equity
Liabilities and equity
Interest rate spread
Net interest margin
Net interest income $ 7,543 $ 8,119 $ (576) $ (826) $ 250
=============================================
Net earning assets
Average deposits
Average cost of
deposits
Average loan to
deposit ratio
(a) This table shows the changes in interest income and interest
expense for the comparative periods based on either changes in
average volume or changes in average rates for interest-earning
assets and interest-bearing liabilities. Changes which are not
solely due to rate changes or solely due to volume changes are
attributed to volume.
(b) The taxable equivalent adjustment results from tax exempt income
less non-deductible TEFRA interest expense and was $8 and $39 in
the fourth quarter 2008 and 2007, respectively.
(c) Average nonaccruing loans have been excluded from total average
loans and categorized in noninterest-earning assets.
The Savannah Bancorp, Inc. and Subsidiaries
Regulatory Capital Ratios
The banking regulatory agencies of The Savannah Bancorp, Inc. and
Subsidiary Banks have adopted capital requirements that specify the
minimum level for which no prompt corrective action is required. In
addition, the Federal Deposit Insurance Corporation ("FDIC") has
adopted FDIC insurance assessment rates based on certain
"well-capitalized" risk-based and equity capital ratios. Failure to
meet minimum capital requirements can result in the initiation of
certain actions by the regulators that, if undertaken, could have a
material effect on the Company's and the Subsidiary Banks' financial
statements. The following tables show the capital ratios for the
Company and the Subsidiary Banks at December 31, 2008 and 2007:
($ in thousands) Company Savannah
---------------------------------------------------------------------
2008 2007 2008 2007
---------------------------------------------------------------------
Qualifying Capital
------------------
Tier 1 capital $85,356 $81,049 $54,665 $50,433
Total capital 95,767 90,747 61,434 56,864
Leverage Ratios
---------------
Tier 1 capital to
average assets 8.61% 8.90% 8.39% 8.29%
Risk-based Ratios
-----------------
Tier 1 capital to
risk-weighted assets 10.28% 10.49% 10.13% 9.84%
Total capital to
risk-weighted assets 11.54% 11.74% 11.38% 11.09%
($ in thousands) Bryan Harbourside
---------------------------------------------------------------------
2008 2007 2008 2007
---------------------------------------------------------------------
Qualifying Capital
------------------
Tier 1 capital $20,553 $18,045 $ 6,128 $ 8,681
Total capital 23,176 20,328 6,942 9,611
Leverage Ratios
---------------
Tier 1 capital to
average assets 8.62% 8.62% 7.49% 10.11%
Risk-based Ratios
-----------------
Tier 1 capital to
risk-weighted assets 9.80% 9.88% 9.57% 11.86%
Total capital to
risk-weighted assets 11.05% 11.13% 10.84% 13.13%
Following are the regulatory capital ratios minimum ratio and the
minimum ratios to be classified as a well-capitalized holding
company or bank:
---------------------------------------------------------------------
Well-
Regulatory Capital Guidelines: Capitalized Minimum
---------------------------------------------------------------------
Tier 1 capital to average assets 5.00% 4.00%
Tier 1 capital to risk-weighted assets 6.00% 4.00%
Total capital to risk-weighted assets 10.00% 8.00%
The Savannah Bancorp, Inc. and Subsidiaries
Loan Concentration Schedule
% of % of % Dollar
($ in thousands) 12/31/08 Total 12/31/07 Total Change
---------------------------------------------------------------------
Non-residential real estate
Owner-occupied $137,742 16 $118,714 15 16
Non owner-occupied 124,502 14 118,904 15 4.7
Construction 26,965 3 33,923 4 (21)
Commercial land and lot
development 42,590 5 38,127 5 12
------------------------------------------------------------
Total non-residential
real estate 331,799 38 309,668 39 7.1
------------------------------------------------------------
Residential real estate
Owner-occupied - 1-4 family 89,774 10 83,828 10 7.1
Non owner-occupied -
1-4 family 147,396 17 114,992 14 28
Construction 43,431 5 57,541 7 (25)
Residential land and lot
development 98,715 12 109,718 14 (10)
Home equity lines 55,092 6 43,322 5 27
------------------------------------------------------------
Total residential real estate 434,408 50 409,401 50 6.1
------------------------------------------------------------
Total real estate loans 766,207 88 719,069 89 6.6
Commercial 81,348 10 71,370 9 14
Consumer 17,628 2 18,692 2 (5.7)
Unearned fees, net (209) -- (480) -- (56)
------------------------------------------------------------
Total loans, net of
unearned fees $864,974 100 $808,651 100 7.0
=====================================================================
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Statement of Shareholders' Equity
For the Three Years Ended December 31, 2008
($ in thousands, except share data)
December 31,
--------------------------------------------------------------------
2008 2007 2006
--------------------------------------------------------------------
Common shares issued
Shares, beginning
of year 5,923,797 5,781,381 4,591,339
Common stock issued 6,211 78,000 --
Stock split / dividend -- -- 1,155,564
Exercise of options 3,781 64,416 34,478
--------------------------------------------------------------------
Shares, end of year 5,933,789 5,923,797 5,781,381
====================================================================
Treasury shares owned
Shares, beginning of year 318 318 267
Stock split / dividend -- -- 63
Exercise of options -- -- (12)
--------------------------------------------------------------------
Shares, end of year 318 318 318
====================================================================
Common stock
Balance, beginning of
year $ 5,924 $ 5,781 $ 4,591
Common stock issued 6 78 --
Stock split / dividend -- -- 1,156
Exercise of options 4 65 34
--------------------------------------------------------------------
Balance, end of year 5,934 5,924 5,781
--------------------------------------------------------------------
Additional paid-in capital
Balance, beginning
of year 38,279 35,747 36,257
Common stock issued, net
of issuance costs 68 1,702 --
Stock split / dividend -- -- (1,156)
Stock-based compensation,
net 137 147 299
Exercise of options 32 683 272
Stock options tax benefit -- -- 75
--------------------------------------------------------------------
Balance, end of year 38,516 38,279 35,747
--------------------------------------------------------------------
Retained earnings
Balance, beginning
of year 30,512 25,681 18,272
Net income 6,006 7,636 10,002
Dividends paid (2,966) (2,805) (2,593)
--------------------------------------------------------------------
Balance, end of year 33,552 30,512 25,681
--------------------------------------------------------------------
Treasury stock
Balance, beginning and
end of year (4) (4) (4)
--------------------------------------------------------------------
Accumulated other
comprehensive income
(loss), net
Balance, beginning of year 1,561 (631) (573)
Change in unrealized
gains/losses on securities
available for sale,
net of tax 842 662 178
Change in fair value of
derivative instruments,
net of tax 531 1,530 (236)
--------------------------------------------------------------------
Balance, end of year 2,934 1,561 (631)
--------------------------------------------------------------------
Total shareholders'
equity $ 80,932 $ 76,272 $ 66,574
====================================================================