SAVANNAH, Ga., Oct. 17, 2006 (PRIMEZONE) -- The Savannah Bancorp, Inc. (Nasdaq:SAVB) reported net income for the third quarter 2006 of $2,590,000, up 10 percent from $2,354,000 in the third quarter 2005. Net income per diluted share was $0.55 compared to $0.53 per diluted share in the third quarter of 2005, an increase of 3.8 percent. For the third quarter 2006, return on average equity was 16.50 percent, return on average assets was 1.34 percent, net interest margin was 4.42 percent and the efficiency ratio was 53.90 percent.
Significant third quarter events and highlights include:
-- On September 12, 2006, The Savannah Bank opened its sixth
banking office in The Village at Skidaway Island, adjacent to The
Landings community in Savannah.
-- The Savannah Bancorp was recognized as the ninth highest
performing publicly-traded company headquartered in Georgia (out
of 145 companies) by the Atlanta Journal-Constitution based on
selected performance criteria.
-- The Savannah Bancorp was included in the Sandler O'Neil 2006
Small Stars report, recognizing the company as one of the top
performing community banking companies in the nation.
-- The company named Thomas W. Lennox President and CEO of
Harbourside Community Bank. Subject to final regulatory
clearance, Lennox is expected to assume his new position on
October 23.
-- The Board of Directors approved a regular quarterly cash
dividend of 14 cents per share payable on November 13, 2006 to
shareholders of record on October 27, 2006.
For the first nine months of 2006, net income was $7,479,000, an 18 percent increase over $6,319,000 in the first nine months of 2005. Net income per diluted share was $1.59, an increase of 8.7 percent over earnings per diluted share of $1.46 in the first nine months of 2005. For the first nine months of 2006, return on average equity was 16.51 percent, return on average assets was 1.32 percent, net interest margin was 4.50 percent and the efficiency ratio was 54.06 percent.
Average outstanding diluted shares increased by 240,000 shares or 5.4 percent in the third quarter and 371,000 shares or 8.5 percent during the first nine months compared with the same periods in the prior year. The increase in average shares outstanding resulted from the private placement sale of 397,000 shares in August 2005 and additional shares issued upon exercise of stock options.
Net interest income increased $970,000 or 14 percent in the third quarter and $4,231,000 or 21 percent in the first nine months of 2006 compared with the same periods in 2005. Average earning assets growth of 12 percent in the first nine months of 2006 compared with the same period in 2005 and prime rate increases over the prior two years resulted in higher net interest income for the third quarter and the first nine months of 2006. Noninterest income declined 3.4 percent in the third quarter primarily due to lower mortgage related income and lower service charges on deposit accounts. Higher interest rates and a slow down in local residential real estate markets impacted mortgage origination volume. In addition, higher interest rates are negatively impacting service charge income on commercial deposit accounts.
Noninterest expense increased $706,000 or 17 percent in the third quarter and $2,602,000 or 21 percent in the first nine months of 2006 compared with 2005. The year-to-date increase in noninterest expense includes normal operating cost increases, approximately $225,000 non-recurring startup costs related to the opening of Harbourside Community Bank on Hilton Head Island, South Carolina in March, 2006 and approximately $231,000 of equity-based compensation expense. The effective income tax rate was reduced in the third quarter of 2006 to 33% from 35% in the third quarter of 2005 due to the tax benefits associated with certain stock option exercises and an overaccrual of state taxes during the first two quarters. The year-to-date effective tax rate is consistent with the prior year.
Loans, excluding loans held for sale, totaled $684 million at September 30, 2006 compared with $602 million one year earlier, an increase of 14 percent. Deposits totaled $662 million and $603 million at September 30, 2006 and 2005, respectively, an increase of 9.8 percent. As of September 30, 2006, demand, savings and money market accounts had increased 17 percent over the prior year as a result of continued focus on core deposit growth and $14 million in new institutional money market accounts. Total assets increased 11 percent to $794 million at September 30, 2006, up from $713 million a year earlier.
Nonperforming assets increased to $3,637,000, or 0.53 percent of the total of loans and other real estate owned, at September 30, 2006 from $1,965,000, or 0.33 percent of total loans, at September 30, 2005. Nonperforming assets at September 30, 2006 included $1,800,000 of other real estate owned. Net loan charge-offs for the first nine months of 2006 were $337,000 or 0.07 percent of average loans on an annualized basis compared to $8,000 in the same period of 2005. One residential real estate loan charge-off of $300,000 in the third quarter of 2006 comprised most of the year to date charge-offs. Provision for credit losses for the first nine months of 2006 was $1,135,000 compared to $1,195,000 for the first nine months of 2005.
The Savannah Bancorp, Inc. (SAVB), a bank holding company for The Savannah Bank, N.A., Bryan Bank & Trust (Richmond Hill, Georgia) and Harbourside Community Bank, FSB (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
Third Quarter Financial Highlights
September 30, 2006 and 2005
(Unaudited)
(thousands, except per share data)
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BALANCE SHEET DATA AT SEPTEMBER 30, 2006 2005 % Chg
---------------------------------------------------------------------
Total assets $793,746 $713,082 11
Interest-earning assets 758,584 678,974 12
Loans 683,926 601,554 14
Deposits 662,381 603,303 9.8
Interest-bearing liabilities 618,228 556,550 11
Shareholders' equity 64,394 56,696 14
Allowance for credit losses 8,611 7,576 14
Non-accruing loans 1,371 1,113 23
Loans past due 90 day - accruing 466 852 (45)
Other real estate owned 1,800 -- --
Allowance for credit losses
to total loans 1.26% 1.26% --
Nonperforming assets to total
loans and other real estate owned 0.53% 0.33% (18)
Loan to deposit ratio 103.25% 99.71% 3.6
Equity to assets 8.11% 7.95% 2.0
Tier 1 capital to risk-weighted assets 11.30% 11.36% (0.5)
Total capital to risk-weighted assets 12.55% 12.62% (0.6)
Book value per share $ 13.95 $ 12.35 13
Outstanding shares 4,617 4,591 0.6
Market value per share $ 33.30 $ 34.50 (3.5)
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PERFORMANCE RATIOS
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FOR THE THIRD QUARTER 2006 2005 % Chg
---------------------------------------------------------------------
NET INCOME $ 2,590 $ 2,354 10
Return on average assets 1.34% 1.34% --
Return on average equity 16.50% 19.16% (14)
Net interest margin 4.42% 4.28% 3.3
Efficiency ratio 53.90% 51.43% 4.8
PER SHARE DATA:
Net income - basic $ 0.56 $ 0.54 3.7
Net income - diluted $ 0.55 $ 0.53 3.8
Dividends $ 0.14 $ 0.135 3.7
AVERAGE SHARES:
Basic 4,607 4,346 6.0
Diluted 4,707 4,467 5.4
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FOR THE FIRST NINE MONTHS 2006 2005 % Chg
---------------------------------------------------------------------
NET INCOME $ 7,479 $ 6,319 18
Return on average assets 1.32% 1.25% 5.7
Return on average equity 16.51% 19.20% (14)
Net interest margin 4.50% 4.17% 7.9
Efficiency ratio 54.06% 52.88% 2.2
PER SHARE DATA:
Net income - basic $ 1.62 $ 1.50 8.2
Net income - diluted $ 1.59 $ 1.46 8.7
Dividends $ 0.42 $ 0.405 3.7
AVERAGE SHARES:
Basic 4,608 4,224 9.1
Diluted 4,711 4,340 8.5
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
Third Quarter and First Nine Months, 2006 and 2005
(Unaudited)
---------------------------------------------------------------------
(thousands, except per share data)
For the For the
Quarter Ended Nine Months Ended
September 30, September 30,
---------------------------------------------------------------------
2006 2005 2006 2005
---------------------------------------------------------------------
INTEREST AND FEE INCOME
Interest and fees on loans $13,209 $10,109 $37,478 $27,567
Interest on loans held for sale 64 304 506 1,108
Interest on investment securities 572 406 1,641 1,226
Interest on deposits with banks 65 123 166 302
Interest on federal funds sold 166 108 441 222
---------------------------------------------------------------------
Total interest income 14,076 11,050 40,232 30,425
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INTEREST EXPENSE
Interest on deposits 5,251 3,329 13,588 8,757
Interest on short-term borrowings 326 160 1,240 509
Interest on FHLB advances-
long-term 166 253 610 756
Interest on subordinated debt 214 159 602 442
---------------------------------------------------------------------
Total interest expense 5,957 3,901 16,040 10,464
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NET INTEREST INCOME 8,119 7,149 24,192 19,961
Provision for credit losses 360 375 1,135 1,195
---------------------------------------------------------------------
Net interest income after
provision for credit losses 7,759 6,774 23,057 18,766
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NONINTEREST INCOME
Service charges on deposit
accounts 384 402 1,137 1,216
Mortgage related income, net 203 260 686 790
Trust fees 164 125 488 358
Other operating income 305 288 902 777
Gain (loss) on sale of other
real estate owned, net -- 18 -- (6)
---------------------------------------------------------------------
Total noninterest income 1,056 1,093 3,213 3,135
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NONINTEREST EXPENSE
Salaries and employee benefits 2,717 2,422 8,193 7,056
Occupancy and equipment 755 580 2,152 1,643
Information technology 373 317 1,108 916
Other operating expenses 1,100 920 3,363 2,599
---------------------------------------------------------------------
Total noninterest expense 4,945 4,239 14,816 12,214
---------------------------------------------------------------------
Income before income taxes 3,870 3,628 11,454 9,687
Income tax expense 1,280 1,274 3,975 3,368
---------------------------------------------------------------------
NET INCOME $ 2,590 $ 2,354 $ 7,479 $ 6,319
=====================================================================
NET INCOME PER SHARE:
Basic $ 0.56 $ 0.54 $ 1.62 $ 1.50
=====================================================================
Diluted $ 0.55 $ 0.53 $ 1.59 $ 1.46
=====================================================================
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
September 30, 2006 and 2005
(Unaudited)
(thousands, except share data)
--------------------------------------------------------------------
September 30,
2006 2005
--------------------------------------------------------------------
ASSETS
Cash and due from banks $ 17,036 $ 16,918
Federal funds sold 17,098 9,791
Interest-bearing deposits 3,916 13,827
--------------------------------------------------------------------
Cash and cash equivalents 38,050 40,536
Securities available for sale, at fair value
(amortized cost of $51,683 in 2006
and $41,379 in 2005) 51,276 41,206
Loans held for sale 832 13,536
Loans, net of allowance for credit losses
of $8,611 in 2006 and $7,576 in 2005 675,315 593,978
Premises and equipment, net 6,135 4,727
Other real estate owned 1,800 --
Bank-owned life insurance 5,710 5,497
Other assets 14,628 13,602
--------------------------------------------------------------------
TOTAL ASSETS $793,746 $713,082
====================================================================
LIABILITIES
Deposits:
Noninterest-bearing $105,084 $ 94,867
Interest-bearing demand 100,972 90,502
Savings 18,272 19,637
Money market 144,771 111,625
Time deposits 293,282 286,672
--------------------------------------------------------------------
Total deposits 662,381 603,303
Short-term borrowings 37,229 17,227
FHLB advances - long-term 13,392 20,577
Subordinated debt 10,310 10,310
Other liabilities 6,040 4,969
--------------------------------------------------------------------
TOTAL LIABILITIES 729,352 656,386
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SHAREHOLDERS' EQUITY
Common stock, par value $1 per
share: authorized 20,000,000
shares; issued 4,617,022 and
4,591,339 shares in 2006 and 2005 4,617 4,591
Preferred stock, par value $1:
authorized 10,000,000 shares -- --
Additional paid-in capital 36,684 36,269
Retained earnings 23,815 16,171
Treasury stock, at cost, 255 and
267 shares in 2006 and 2005 (4) (4)
Accumulated other comprehensive
loss, net (718) (331)
--------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 64,394 56,696
--------------------------------------------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $793,746 $713,082
====================================================================
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)
--------------------------------------------
2006 2005
------------------------- ----------------
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
------- ------- ------- ------- -------
NET INCOME $ 2,590 $ 2,538 $ 2,351 $ 2,721 $ 2,354
AVERAGE SHARES
Basic 4,607 4,607 4,607 4,591 4,346
Diluted 4,707 4,715 4,709 4,709 4,467
NET INCOME PER SHARE ($)
Basic 0.562 0.551 0.510 0.590 0.542
Diluted 0.550 0.538 0.500 0.580 0.527
DIVIDENDS PER SHARE 0.140 0.140 0.140 0.135 0.135
MARKET PRICE PER
COMMON SHARE ($)
High close $ 37.89 $ 38.00 $ 36.97 $ 37.50 $ 34.54
Low close 33.22 34.08 33.90 34.25 30.27
Quarter-end close 33.30 37.82 35.08 35.48 34.50
AT QUARTER-END ($)
Assets 793,746 772,026 764,087 717,901 713,082
Shareholders' equity 64,394 61,018 59,646 58,543 56,696
Book value per share 13.95 13.24 12.95 12.75 12.35
Outstanding shares 4,617 4,607 4,607 4,591 4,591
PERFORMANCE RATIOS (%)
Return on equity 16.50 16.91 16.14 18.75 19.16
Return on assets 1.34 1.33 1.29 1.50 1.34
Net interest margin 4.42 4.51 4.59 4.48 4.28
Efficiency ratio 53.90 53.84 54.50 49.40 51.43
Additional financial highlights are available at www.savb.com
The Savannah Bancorp, Inc. and Subsidiaries
Average Volumes and Rates for the Third Quarter, 2006 and 2005
The following table presents average balances of the Company and the
Subsidiary Banks on a consolidated basis, the average taxable-
equivalent interest earned on assets and the average interest
paid on liabilities during the third quarter of 2006 and 2005.
Average Average Taxable-Equivalent
Balance Rate Interest(a)
------------------------------- -------------
QTD QTD QTD
September 30, September 30, September 30, Vari-
2006 2005 2006 2005 2006 2005 ance
---------------------------------------------------------------------
($ in thousands) (%) ($ in thousands)
ASSETS
Interest-bearing
$ 5,035 $ 14,486 5.12 3.37 deposits $ 65 $ 123 $ (58)
Investments
49,344 37,124 4.45 3.90 - taxable 554 365 189
Investments -
2,110 3,851 7.71 8.24 non-taxable 41 80 (39)
Federal funds
11,584 13,210 5.69 3.24 sold 166 108 58
Loans held for
3,267 20,273 7.77 5.95 sale 64 304 (240)
661,065 579,253 7.94 6.94 Loans(b) 13,225 10,127 3,098
------------------ ---------------------
Total interest-
732,405 668,197 7.65 6.59 earning assets 14,115 11,107 3,008
---------- ---------------------
Noninterest-
35,244 30,113 earning assets
------------------
$767,649 $698,310 Total assets
==================
LIABILITIES AND
EQUITY
Deposits
$ 95,279 $ 86,908 1.42 0.76 NOW accounts 341 167 174
18,309 20,175 1.00 1.00 Savings accounts 46 51 (5)
Money market
140,731 110,708 4.08 2.47 accounts 1,446 690 756
Time deposits,
110,104 79,339 4.86 3.55 $100M or more 1,350 710 640
Time deposits,
76,269 116,212 4.16 3.27 broker 799 957 (158)
Other time
110,752 87,674 4.55 3.41 deposits 1,269 754 515
------------------ ---------------------
Total interest-
bearing
551,444 501,016 3.78 2.64 deposits 5,251 3,329 1,922
FHLB advances -
13,482 20,627 4.88 4.87 long-term 166 253 (87)
Short-term
26,123 20,320 4.95 3.12 borrowings 326 160 166
Subordinated
10,310 10,310 8.23 6.12 debt 214 159 55
------------------ ---------------------
Total interest-
bearing
601,359 552,273 3.93 2.80 liabilities 5,957 3,901 2,056
---------- --------------------
Noninterest-
96,497 91,845 bearing deposits
7,358 5,447 Other liabilities
Shareholders'
62,435 48,745 equity
------------------
Liabilities and
$767,649 $698,310 equity
==================
3.72 3.79 Interest rate spread
4.42 4.28 Net interest margin
Net interest
income $8,158 $7,206 $ 952
=====================
Net earning
$131,046 $115,924 assets
==================
$647,941 $592,861 Average deposits
==================
Average cost
3.22 2.23 of deposits
Average loan to
102% 98% deposit ratio
==================
(a) The taxable equivalent adjustment results from tax exempt
income less non-deductible TEFRA interest expense.
(b) Average nonaccruing loans have been excluded from total
average loans and categorized as a noninterest-earning asset.
The Savannah Bancorp, Inc. and Subsidiaries
Average Volumes and Rates for the First Nine Months, 2006 and 2005
The following table presents average balances of the Company and the
Subsidiary Banks on a consolidated basis, the average taxable-
equivalent interest earned on assets and the average interest
paid on liabilities during the first nine months of 2006 and 2005.
Average Average Taxable-Equivalent
Balance Rate Interest(a)
------------------------------- -------------
YTD YTD YTD
September 30, September 30, September 30, Vari-
2006 2005 2006 2005 2006 2005 ance
---------------------------------------------------------------------
($ in thousands) (%) ($ in thousands)
ASSETS
Interest-bearing
$ 4,652 $ 13,924 4.77 2.90 deposits $ 166 $ 302 (136)
Investments
47,540 35,965 4.42 4.02 - taxable 1,571 1,081 490
Investments -
2,513 4,481 7.45 7.88 non-taxable 140 264 (124)
Federal funds
11,710 10,097 5.02 2.94 sold 441 222 219
Loans held for
9,742 26,066 6.94 5.68 sale 506 1,108 (602)
645,598 554,425 7.77 6.66 Loans(b) 37,527 27,619 9,908
------------------ ---------------------
Total interest-
721,755 644,958 7.47 6.34 earning assets 40,351 30,596 9,755
---------- ---------------------
Noninterest-
34,827 28,665 earning assets
------------------
$756,582 $673,623 Total assets
==================
LIABILITIES AND
EQUITY
Deposits
$ 91,856 $ 87,473 1.20 0.67 NOW accounts 824 437 387
19,356 20,199 0.99 0.91 Savings accounts 144 138 6
Money market
132,957 99,347 3.59 2.23 accounts 3,568 1,656 1,912
Time deposits,
102,138 73,350 4.53 3.32 $100M or more 3,464 1,820 1,644
Time deposits,
81,930 116,660 3.77 3.19 broker 2,311 2,785 (474)
Other time
103,322 81,804 4.24 3.14 deposits 3,277 1,921 1,356
------------------ ---------------------
Total interest-
531,559 478,833 3.42 2.45 bearing deposits 13,588 8,757 4,831
FHLB advances -
16,584 20,715 4.92 4.88 long-term 610 756 (146)
Short-term
33,863 26,383 4.89 2.58 borrowings 1,240 509 731
Subordinated
10,310 10,310 7.81 5.73 debt 602 442 160
------------------ ---------------------
Total interest-
bearing
592,316 536,241 3.62 2.61 liabilities 16,040 10,464 5,576
---------- --------------------
Noninterest-
bearing
96,201 88,447 deposits
7,490 4,926 Other liabilities
Shareholders'
60,575 44,009 equity
------------------
Liabilities and
$756,582 $673,623 equity
==================
3.85 3.73 Interest rate spread
==========
4.50 4.17 Net interest margin
==========
Net interest
income $24,311 $20,132 $4,179
=====================
Net earning
$129,439 $108,717 assets
==================
$627,760 $567,280 Average deposits
==================
Average cost
2.89 2.06 of deposits
==========
Average loan to
103% 98% deposit ratio
==================
(a) The taxable equivalent adjustment results from tax exempt income
less non-deductible TEFRA interest expense.
(b) Average nonaccruing loans have been excluded from total average
loans and categorized as a noninterest-earning asset.