SAVANNAH, Ga., July 18, 2006 (PRIMEZONE) -- The Savannah Bancorp, Inc. (Nasdaq:SAVB) reported net income for the second quarter 2006 of $2,538,000, up 16 percent from $2,184,000 in the second quarter 2005. Net income per diluted share was $0.54 compared to $0.51 per diluted share in the second quarter of 2005, an increase of 5.9 percent. Earnings growth moderated in the second quarter due to higher than anticipated startup costs in Harbourside Community Bank and a slight net interest margin decline from the first quarter 2006. The margin decline resulted from faster deposit repricing in a very competitive market and slower loan growth than anticipated.
Average outstanding diluted shares increased 440,000, or 10 percent, in the second quarter 2006 compared with the second quarter 2005. The increase in average shares outstanding resulted from the private placement sale of 397,000 shares in August, 2005 and additional shares being issued upon exercise of stock options. For the second quarter 2006, return on average equity was 16.91 percent, return on average assets was 1.33 percent, net interest margin was 4.51 percent and the efficiency ratio was 53.84 percent.
For the first six months of 2006, net income was $4,889,000, a 23 percent increase over $3,965,000 in the first six months of 2005. Earnings per diluted share was $1.04, an increase of 12 percent over earnings per diluted share of $0.93 in the first six months of 2005. Return on average equity was 16.53 percent, return on average assets was 1.31 percent, net interest margin was 4.55 percent and the efficiency ratio was 54.16 percent.
Net interest income increased $1,485,000, or 22 percent, in the second quarter 2006 over the same period in 2005. Earning assets growth of 11 percent and 17 consecutive prime rate increases of 25 basis points each over the prior 24 months resulted in significantly higher net interest income for the second quarter and the first six months of 2006 compared with the same periods in 2005. The net interest margin has been increasing during the two year period of rising rates but has recently begun to decrease as funding costs have increased faster than asset yields. Noninterest income was up 4 percent in the second quarter and 6 percent in the first six months of 2006 compared with the same periods in 2005. Higher mortgage interest rates are negatively impacting mortgage origination volume and mortgage related income.
Noninterest expenses increased 23 percent in the second quarter and 24 percent in the first six months of 2006 compared with 2005. Approximately half of the increase in costs is related to additional costs of the recently chartered Harbourside Community Bank on Hilton Head Island, SC.
Loans, excluding loans held for sale, totaled $657 million at June 30, compared with $572 million one year earlier, an increase of 15 percent. Deposits totaled $642 million at June 30, 2006 and $588 million at June 30, 2005, an increase of 9 percent. As of June 30, 2006, demand, savings and money market accounts had increased 13 percent over the prior year as a result of continued focus on core deposit growth. Total assets increased 12 percent to $772 million at June 30, 2006, up from $689 million a year earlier.
Nonperforming assets increased to $2,559,000, or 0.39 percent of total loans, at June 30, 2006 from $2,093,000, or 0.33 percent of loans, at March 31, 2006 and $733,000, or 0.13 percent of total loans, at June 30, 2005. Net loan recoveries for the first half of 2006 were $3,000. Provision for credit losses for the first six months of 2006 was $775,000 and $820,000 for the first six months of 2005.
Harbourside Community Bank, a new subsidiary bank of the Savannah Bancorp, Inc., opened on March 1, 2006 in a new main office facility on Hilton Head Island, SC. At June 30, 2006, Harbourside had total assets of $38 million, total loans of $27 million and total deposits of $28 million. As previously reported in a regulatory filing with the SEC, the employment of Harbourside's CEO terminated during the second quarter and Mike Odom, CEO of The Savannah Bancorp, Inc. is currently serving as interim President and CEO until a suitable replacement is hired.
Today, the Board of Directors approved a regular quarterly cash dividend of 14 cents per share payable on August 14, 2006 to shareholders of record on July 28, 2006.
The Savannah Bancorp, Inc. (SAVB), a bank holding company for The Savannah Bank, N.A. and Bryan Bank & Trust (Richmond Hill, Georgia) and Harbourside Community Bank (Hilton Head Island, SC), is headquartered in Savannah, Georgia. SAVB began operations in 1990. Its primary businesses include deposit, credit, trust and mortgage origination services provided to local customers.
This press release may contain forward-looking statements as defined by federal securities law which involve significant risks and uncertainties. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: changes in interest rates; changes in accounting principles, policies, or guidelines; significant changes in the economic scenario: significant changes in regulatory requirements; and significant changes in securities markets. The Savannah Bancorp, Inc. does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made. Any such statements are made in reliance on the safe harbor protections provided under the Private Securities Act of 1995.
The Savannah Bancorp, Inc. and Subsidiaries
Second Quarter Financial Highlights
June 30, 2006 and 2005
(Unaudited)
(thousands, except share data)
%
Balance Sheet Data at June 30 2006 2005 Change
----------------------------------------------------------------
Total assets $772,026 $689,271 12
Interest-earning assets 734,420 659,759 11
Loans 657,128 572,317 15
Deposits 642,393 588,249 9.2
Interest-bearing liabilities 659,759 545,340 21
Shareholders' equity 61,018 43,619 40
Allowance for credit losses 8,591 7,202 19
Non-accruing loans 2,049 184 1014
Loans past due 90 day -
accruing 510 549 (7.1)
Allowance for credit losses
to total loans 1.31% 1.26% 4.0
Nonperforming assets to
total loans and other real
estate owned 0.39% 0.13% 204
Loan to deposit ratio 102.29% 97.29% 5.1
Equity to assets 7.90% 6.33% 25
Tier 1 capital to risk-
weighted assets 11.47% 9.39% 22
Total capital to risk-
weighted assets 12.72% 10.64% 20
Book value per share $ 13.24 $ 10.40 27
Outstanding shares 4,608 4,194 9.9
Market value per share $ 37.82 $ 30.95 22
Performance Ratios
----------------------------------------------------------------
%
For the Second Quarter 2006 2005 Change
----------------------------------------------------------------
Net income $ 2,538 $ 2,184 16
Return on average assets 1.33% 1.29% 2.8
Return on average equity 16.91% 20.51% (18)
Net interest margin 4.51% 4.16% 8.4
Efficiency ratio 53.84% 52.20% 3.1
Per share data:
Net income - basic $ 0.55 $ 0.52 5.8
Net income - diluted $ 0.54 $ 0.51 5.9
Dividends $ 0.140 $ 0.135 3.7
Average shares:
Basic 4,607 4,177 10
Diluted 4,715 4,275 10
----------------------------------------------------------------
%
For the First Six Months 2006 2005 Change
----------------------------------------------------------------
Net income $ 4,889 $ 3,965 23
Return on average assets 1.31% 1.21% 8.5
Return on average equity 16.53% 19.10% (13)
Net interest margin 4.55% 4.12% 10
Efficiency ratio 54.16% 53.70% 0.9
Per share data:
Net income - basic $ 1.06 $ 0.95 11
Net income - diluted $ 1.04 $ 0.93 12
Dividends $ 0.28 $ 0.27 3.7
Average shares:
Basic 4,607 4,163 11
Diluted 4,712 4,266 10
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
June 30, 2006 and 2005
(Unaudited)
(thousands, except share data)
June 30
------------------------
2006 2005
---------- ----------
ASSETS
Cash and due from banks $ 19,413 $ 16,380
Interest-bearing deposits 4,400 14,944
Federal funds sold 18,266 4,673
---------------------------------------------------------------------
Cash and cash equivalents 42,079 35,997
Securities available for sale, at
fair value
(amortized cost of $52,268 in 2006
and $39,880 in 2005 51,220 39,856
Loans held for sale 4,407 28,120
Loans, net of allowance for credit
losses of $8,591 in 2006 and
$7,202 in 2005 648,537 565,115
Premises and equipment, net 5,714 4,762
Other real estate owned - -
Bank-owned life insurance 5,655 5,449
Other assets 14,414 9,972
---------------------------------------------------------------------
Total assets $772,026 $689,271
=====================================================================
LIABILITIES
Deposits:
Noninterest-bearing $ 97,909 $ 95,890
Interest-bearing demand 94,081 87,376
Savings 18,540 20,670
Money market 137,721 105,529
Time deposits 294,142 278,784
---------------------------------------------------------------------
Total deposits 642,393 588,249
Short-term borrowings 36,560 21,983
FHLB advances - long-term 15,474 20,688
Subordinated debt 10,310 10,310
Other liabilities 6,271 4,422
---------------------------------------------------------------------
Total liabilities 711,008 645,652
---------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Common stock, par value $1 per
share: authorized 20,000,000
shares; issued 4,607,647 and
4,194,066 in 2006 and 2005 4,608 4,194
Preferred stock, par value $1:
authorized 10,000,000 shares - -
Additional paid-in capital 36,480 25,066
Retained earnings 21,870 14,383
Treasury stock, at cost, 267 in
2006 and 2005 (4) (4)
Accumulated other comprehensive
(loss), net (1,936) (20)
---------------------------------------------------------------------
Total shareholders' equity 61,018 43,619
---------------------------------------------------------------------
Total liabilities and
shareholders' equity $772,026 $689,271
=====================================================================
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
Second Quarter and First Six Months, 2006 and 2005
(Unaudited)
(thousands, except per share data)
For the For the
Quarter Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2006 2005 2006 2005
--------------------------------------------------------------------
INTEREST AND DIVIDEND INCOME
Loans, including fees $12,548 $9,244 $24,269 $17,458
Loans held for sale 233 369 441 804
Investment securities:
Taxable 471 320 894 620
Tax-exempt 32 60 70 128
Dividends 56 35 104 72
Deposits with banks 54 100 102 179
Federal funds sold 148 69 275 114
--------------------------------------------------------------------
Total interest and
dividend income 13,542 10,197 26,155 19,375
--------------------------------------------------------------------
INTEREST EXPENSE
Deposits 4,443 3,010 8,336 5,428
Short-term borrowings 546 114 911 349
Federal Home Loan Bank
advances 197 253 444 503
Subordinated debt 200 149 389 283
--------------------------------------------------------------------
Total interest expense 5,386 3,526 10,080 6,563
--------------------------------------------------------------------
NET INTEREST INCOME 8,156 6,671 16,075 12,812
Provision for credit losses 360 315 775 820
--------------------------------------------------------------------
Net interest income after
provision for credit losses 7,796 6,356 15,300 11,992
--------------------------------------------------------------------
NONINTEREST INCOME
Service charges on deposit
accounts 377 427 753 814
Mortgage related income, net 252 305 482 580
Trust fees 166 117 325 233
Other operating income 291 223 599 439
Loss on sale other real estate
owned, net - (24) - (24)
--------------------------------------------------------------------
Total noninterest income 1,086 1,048 2,159 2,042
--------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee
benefits 2,785 2,291 5,476 4,634
Occupancy and equipment 746 551 1,397 1,063
Information technology 374 298 736 599
Other operating expenses 1,071 892 2,266 1,679
--------------------------------------------------------------------
Total noninterest expense 4,976 4,032 9,875 7,975
--------------------------------------------------------------------
Income before income taxes 3,906 3,372 7,584 6,059
Income tax expense 1,368 1,188 2,695 2,094
--------------------------------------------------------------------
NET INCOME $ 2,538 $ 2,184 $ 4,889 $ 3,965
====================================================================
Net income per share:
Basic $ 0.55 $ 0.52 $ 1.06 $ 0.95
====================================================================
Diluted $ 0.54 $ 0.51 $ 1.04 $ 0.93
====================================================================
The Savannah Bancorp, Inc. and Subsidiaries
Historical Trend Data - Five Years and Five Quarters
The following tables show per share information for the most recent
five years and five quarters. Share and per share information have
been restated to reflect the effect of a 5-for-4 stock split in
December 2004.
(amounts in thousands except per share data)
For the Most Recent Five Years
------------------------------
2005 2004 2003 2002 2001
---- ---- ---- ---- ----
Net income $9,040 $5,736 $4,644 $4,508 $4,358
Average shares
Basic 4,317 4,109 4,103 4,100 4,068
Diluted 4,425 4,209 4,181 4,160 4,140
Net income per
share ($)
Basic 2.09 1.40 1.13 1.10 1.07
Diluted 2.04 1.36 1.11 1.08 1.05
Dividends per share 0.54 0.52 0.51 0.49 0.45
Market price per
common share ($)
High close 37.50 27.60 23.20 17.68 18.18
Low close 26.50 20.14 15.18 14.18 12.40
Year-end close 35.48 27.05 23.20 15.25 14.84
At December 31 ($)
Assets 717,901 617,341 476,865 437,598 376,183
Shareholders' equity 58,543 40,071 36,771 34,756 32,071
Book value per share 12.75 9.74 8.96 8.48 7.86
Outstanding shares 4,591 4,112 4,103 4,101 4,079
Performance ratios (%)
Return on equity 19.06 15.04 12.99 13.50 14.27
Return on assets 1.32 1.03 1.05 1.14 1.20
Net interest margin 4.25 3.86 3.91 4.10 4.13
Efficiency ratio 51.91 58.47 59.40 59.17 57.11
For the Most Recent Five Quarters (Unaudited)
---------------------------------------------
(amounts in thousands except per share data)
2006 2005
------------------- -----------------------------
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
Net income $2,538 $2,351 $2,721 $2,354 $2,184
Average shares
Basic 4,607 4,607 4,591 4,346 4,177
Diluted 4,715 4,709 4,709 4,467 4,275
Net income per
share ($)
Basic 0.551 0.510 0.590 0.542 0.523
Diluted 0.538 0.500 0.580 0.527 0.511
Dividends per share 0.140 0.140 0.135 0.135 0.135
Market price per
common share ($)
High close 38.00 36.97 37.50 34.54 33.46
Low close 34.08 33.90 34.25 30.27 27.80
Quarter-end close 37.82 35.08 35.48 34.50 30.95
At quarter-end ($)
Assets 772,026 764,087 717,901 713,082 689,271
Shareholders' equity 61,018 59,646 58,543 56,696 43,619
Book value per share 13.24 12.95 12.75 12.35 10.40
Outstanding shares 4,607 4,607 4,591 4,591 4,194
Performance ratios (%)
Return on equity 16.91 16.14 18.75 19.16 20.51
Return on assets 1.33 1.29 1.50 1.34 1.29
Net interest margin 4.51 4.59 4.48 4.28 4.16
Efficiency ratio 53.84 54.50 49.40 51.43 52.20
Additional financial highlights are available at www.savb.com