SAVANNAH, Ga., Jan. 31, 2008 (PRIME NEWSWIRE) -- The Savannah Bancorp, Inc. (Nasdaq:SAVB) reported net income of $7,636,000 in 2007 compared with net income of $10,002,000 in 2006, a decrease of 24 percent. Net income per diluted share was $1.29 for 2007 and $1.70 in 2006, a decrease of 24 percent. Net income for the fourth quarter 2007 was $353,000 compared to $2,523,000 for the same period in 2006. Fourth quarter net income per diluted share was $0.06 in 2007 and $0.43 in 2006, a decrease of 86 percent. Other growth and performance ratios are included in the attached financial highlights and information.
Fourth quarter pretax earnings included an additional provision for loan losses of $2.6 million and a reversal of approximately $330,000 of accrued interest for loans placed on nonaccrual status. These two charges to earnings reduced fourth quarter after-tax earnings by $1.8 million, or $0.30 per share. Details regarding these charges were provided in a press release and Form 8-K filing on January 10, 2008 and are available at our corporate website at www.savb.com.
Nonperforming loans at December 31, 2007 were $17.4 million, up from $6.8 million at September 30, 2007 and $2.2 million at December 31, 2006. The increase in nonperforming loans in the fourth quarter was primarily related to loans made in the Bluffton / Hilton Head Island, South Carolina ("Bluffton/HHI") market. Net charge-offs were $765,000 in 2007 compared to $444,000 in 2006.
President and CEO John C. Helmken II said, "Although I am less than pleased by our fourth quarter results and the loan quality issues, I am pleased with the progress we have made in addressing the situation. We continue to provide the resources and attention that are needed to manage these issues. Prompt and decisive action is allowing us to readily address the situation and minimize our potential losses. Equally important, we remain focused on our opportunities as well as our challenges. 2007 included several significant highlights for our Company, including several key hires, the successful integration of Minis & Co, Inc., one new branch in Bluffton, South Carolina and continued loan, deposit and fee income growth. While real estate activity slowed in our markets, our strong capital position, our enhanced products and services, and, most importantly, our people, position us well for 2008. As we approach a billion dollars in assets, we remain excited about the future of our Company."
Total assets increased 11 percent to $932 million at December 31, 2007, up from $844 million a year earlier. Loans totaled $809 million compared with $721 million one year earlier, an increase of 12 percent. Deposits totaled $764 million at December 31, 2007 and $707 million at December 31, 2006, an increase of 8.1 percent. Average total assets increased 13 percent to $869 million in 2007 from $770 million in 2006. Average portfolio loans were $754 million in 2007 compared with $659 million in 2006, an increase of 14 percent. Average deposits were $720 million in 2007 and $638 million in 2006, an increase of 13 percent.
Net interest income increased $524,000, or 1.6 percent, in 2007 over 2006, including the impact of approximately $400,000 of accrued interest reversed on loans placed on nonaccrual status during 2007. The net interest margin declined to 3.99 percent from 4.44 percent in 2006, primarily due to higher deposit and borrowing costs. Noninterest income increased $406,000 or 9.4 percent including $855,000 in higher trust and asset management fees, offset by lower service charges on deposit accounts and lower mortgage related income. The fourth quarter was the first full quarter of operations for Minis & Co. as a subsidiary of the Company. Noninterest expense increased $1,186,000, or 5.9 percent during 2007 as compared to 2006. Of the increase, $994,000 was in salaries and benefits and $465,000 in occupancy, equipment and technology expenses. Other operating expense declined by $273,000 or 5.9 percent due primarily to lower non-recurring de novo startup expenses and lower professional fees offset by higher FDIC assessment costs.
The Board of Directors approved a 4.2 percent increase in the regular quarterly cash dividend to 12.5 cents per share from 12 cents per share. The first quarter dividend is payable on February 25, 2008 to shareholders of record on February 8, 2008.
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.
Attachments - 10 pages of financial information
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 and at the following web link: http://www.snl.com/irweblinkx/news.aspx?iid=100844.
The Savannah Bancorp, Inc. and Subsidiaries
Fourth Quarter Financial Highlights
December 31, 2007 and 2006
($ in thousands, except per share data)
(Unaudited)
---------------------------------------------------------------------
Balance Sheet %
Data at December 31 2007 2006 Change
---------------------------------------------------------------------
Total assets $932,459 $843,514 11
Interest-earning assets 878,992 803,927 9.3
Loans 808,651 720,918 12
Allowance for loan losses 12,864 8,954 44
Non-accruing loans 14,663 825 NM
Loans past due 90 days - accruing 2,761 1,406 96
Net charge-offs 765 444 72
Deposits 764,218 706,824 8.1
Interest-bearing liabilities 759,597 669,974 13
Shareholders' equity 76,272 66,574 15
Allowance for loan losses to total
loans 1.59% 1.24% 28
Nonperforming assets to total loans
and OREO 2.41% 0.38% 534
Loan to deposit ratio 106% 102% 3.9
Equity to assets 8.18% 7.89% 3.7
Tier 1 capital to risk-weighted
assets 10.49% 11.09% (5.4)
Total capital to risk-weighted
assets 11.74% 12.34% (4.9)
Outstanding shares (000s)(a) 5,924 5,781 2.5
Book value per share(a) $ 12.88 $ 11.52 12
Tangible book value per share(a) $ 12.50 $ 11.52 8.5
Market value per share(a) $ 17.14 $ 27.25 (37)
Performance Data for the Year
-----------------------------
Net income $ 7,636 $ 10,002 (24)
Return on average assets 0.88% 1.30% (32)
Return on average equity 10.68% 16.19% (34)
Net interest margin 3.99% 4.44% (10)
Efficiency ratio 56.09% 54.29% 3.3
Per share data:(a)
Net income - basic $ 1.31 $ 1.73 (24)
Net income - diluted $ 1.29 $ 1.70 (24)
Dividends $ .480 $ .448 7.1
Average shares (000s):(a)
Basic 5,850 5,765 1.5
Diluted 5,922 5,876 0.8
Performance Data for the Fourth Quarter
---------------------------------------
Net income $ 353 $ 2,523 (86)
Return on average assets 0.15% 1.24% (88)
Return on average equity 1.83% 15.33% (88)
Net interest margin 3.72% 4.26% (13)
Efficiency ratio 60.48% 54.94% 10
Per share data:(a)
Net income - basic $ 0.06 $ 0.44 (86)
Net income - diluted $ 0.06 $ 0.43 (86)
Dividends $ 0.120 $ 0.112 7.1
Average shares (000s):(a)
Basic 5,923 5,779 2.5
Diluted 5,968 5,884 1.4
(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
Consolidated Balance Sheets
December 31, 2007 and 2006
($ in thousands, except share data)
---------------------------------------------------------------------
December 31,
2007 2006
---------------------------------------------------------------------
Assets
Cash and due from banks $ 12,721 $ 18,540
Federal funds sold 4,435 18,363
Interest-bearing deposits in banks 20,148 10,394
---------------------------------------------------------------------
Cash and cash equivalents 37,304 47,297
Securities available for sale, at fair
value (amortized cost of $60,241 in
2007 and $54,163 in 2006) 61,057 53,917
Loans held for sale 180 914
Loans, net of allowance for loan losses
of $12,864 in 2007 and $8,954 in 2006 795,787 711,964
Premises and equipment, net 6,830 6,365
Other real estate owned 2,112 545
Bank-owned life insurance 5,985 5,760
Goodwill and other intangibles, net 3,662 --
Other assets 19,542 16,752
---------------------------------------------------------------------
Total assets $ 932,459 $ 843,514
=====================================================================
Liabilities
Deposits:
Noninterest-bearing $ 88,503 $ 101,156
Interest-bearing demand 127,902 116,493
Savings 16,168 18,615
Money market 176,615 147,279
Time deposits 355,030 323,281
---------------------------------------------------------------------
Total deposits 764,218 706,824
Short-term borrowings 70,599 40,687
Federal Home Loan Bank advances -long-term 2,973 13,309
Subordinated debt to nonconsolidated
subsidiaries 10,310 10,310
Other liabilities 8,087 5,810
---------------------------------------------------------------------
Total liabilities 856,187 776,940
---------------------------------------------------------------------
Shareholders' equity
Common stock, par value $1 per share:
authorized 20,000,000 shares; issued
5,923,797 and 5,781,381 shares in 2007
and 2006, respectively 5,924 5,781
Preferred stock, par value $1 per share:
authorized 10,000,000 shares, none issued -- --
Additional paid-in capital 38,278 35,747
Retained earnings 30,513 25,681
Treasury stock, 318 shares in 2007 and
2006 (4) (4)
Accumulated other comprehensive income
(loss), net 1,561 (631)
---------------------------------------------------------------------
Total shareholders' equity 76,272 66,574
---------------------------------------------------------------------
Total liabilities and shareholders'
equity $ 932,459 $ 843,514
=====================================================================
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income for the Two Years and
Five Quarters Ending December 31, 2007
($ in thousands, except per share data)
---------------------------------------------------------------------
For the Years Ended
---------------------------------------------------------------------
December 31, %
2007 2006 Chg
---------------------------------------------------------------------
Interest and dividend income
Loans, including fees $ 59,435 $ 51,541 15
Loans held for sale 98 558 (82)
Investment securities 2,907 2,240 30
Deposits in banks 346 293 18
Federal funds sold 472 557 (15)
------------------------------------------------------------
Total interest and dividend income 63,258 55,189 15
------------------------------------------------------------
Interest expense
Deposits 26,415 19,342 37
Short-term borrowings 3,454 2,617 32
FHLB advances 413 778 (47)
------------------------------------------------------------
Total interest expense 30,282 22,737 33
------------------------------------------------------------
Net interest income 32,976 32,452 1.6
Provision for loan losses 4,675 1,585 195
------------------------------------------------------------
Net interest income after the
provision for loan losses 28,301 30,867 (8.3)
------------------------------------------------------------
Noninterest income
Service charges on deposits 1,383 1,526 (9.4)
Mortgage related income, net 615 886 (31)
Trust and asset management fees 1,513 658 130
Other operating income 1,242 1,233 0.7
Gain (loss) on sale of OREO (44) -- (100)
------------------------------------------------------------
Total noninterest income 4,709 4,303 9.4
------------------------------------------------------------
Noninterest expense
Salaries and employee benefits 11,846 10,852 9.2
Occupancy and equipment 3,294 2,920 13
Information technology 1,616 1,525 6.0
Other operating expense 4,383 4,656 (5.9)
------------------------------------------------------------
Total noninterest expense 21,139 19,953 5.9
------------------------------------------------------------
Income before income taxes 11,871 15,217 (22)
Income tax expense 4,235 5,215 (19)
------------------------------------------------------------
Net income $ 7,636 $ 10,002 (24)
============================================================
Net income per share:
Basic $ 1.31 $ 1.73 (24)
============================================================
Diluted $ 1.29 $ 1.70 (24)
============================================================
Average basic shares (000s) 5,850 5,765 1.5
Average diluted shares (000s) 5,922 5,876 0.8
Performance Ratios
Return on average equity 10.68% 16.19% (34)
Return on average assets 0.88% 1.30% (32)
Net interest margin 3.99% 4.44% (10)
Efficiency ratio 56.1% 54.3% 3.3
Average equity 71,516 61,766 16
Average assets 869,026 769,917 13
Average interest-earning assets 830,900 734,470 13
---------------------------------------------------------------------
(Unaudited)
---------------------------------------------------------------------
2007 2006
-------------------------------------------------------------- Q4-07/
Fourth Third Second First Fourth Q4-06
Quarter Quarter Quarter Quarter Quarter % Chg
---------------------------------------------------------------------
Interest and
dividend
income
Loans,
including
fees $15,016 $15,196 $14,872 $14,351 $14,063 6.8
Loans held
for sale 14 15 35 34 52 (73)
Investment
securities 767 794 726 620 599 28
Deposits in
banks 100 44 119 83 127 (21)
Federal
funds sold 45 130 125 172 116 (61)
-------------------------------------------------------------
Total
interest and
dividend
income 15,942 16,179 15,877 15,260 14,957 6.6
-------------------------------------------------------------
Interest
expense
Deposits 6,881 6,963 6,479 6,092 5,754 20
Short-term
borrowings 935 860 831 828 775 21
FHLB
advances 46 48 155 164 168 (73)
-------------------------------------------------------------
Total
interest
expense 7,862 7,871 7,465 7,084 6,697 17
-------------------------------------------------------------
Net
interest
income 8,080 8,308 8,412 8,176 8,260 (2.2)
Provision
for loan
losses 3,145 635 395 500 450 599
-------------------------------------------------------------
Net interest
income after
the provision
for loan
losses 4,935 7,673 8,017 7,676 7,810 (37)
-------------------------------------------------------------
Noninterest
income
Service
charges
on deposits 349 339 348 347 389 (10)
Mortgage
related
income, net 98 141 166 210 200 (51)
Trust and
asset
management
fees 769 379 189 176 170 352
Other
operating
income 315 305 297 325 331 (4.8)
Gain (loss)
on sale of
OREO (38) -- -- (6) -- --
-------------------------------------------------------------
Total
noninterest
income 1,493 1,164 1,000 1,052 1,090 37
-------------------------------------------------------------
Noninterest
expense
Salaries and
employee
benefits 3,125 2,919 2,838 2,964 2,659 18
Occupancy and
equipment 958 796 782 758 768 25
Information
technology 422 388 381 425 417 1.2
Other
operating
expense 1,285 1,073 1,025 1,000 1,293 (0.6)
-------------------------------------------------------------
Total
noninterest
expense 5,790 5,176 5,026 5,147 5,137 13
-------------------------------------------------------------
Income before
income taxes 638 3,661 3,991 3,581 3,763 (83)
Income tax
expense 285 1,280 1,400 1,270 1,240 (77)
-------------------------------------------------------------
Net income $ 353 $ 2,381 $ 2,591 $ 2,311 $ 2,523 (86)
=============================================================
Net income
per share:
Basic $ .06 $ .41 $ .44 $ .40 $ .44 (86)
=============================================================
Diluted $ .06 $ .40 $ .44 $ .39 $ .43 (86)
=============================================================
Average basic
shares (000s) 5,923 5,862 5,824 5,782 5,779 2.5
Average
diluted
shares (000s) 5,968 5,928 5,899 5,890 5,884 1.4
Performance
Ratios
Return on
average
equity 1.83% 13.04% 14.94% 13.90% 15.33% (88)
Return on
average
assets 0.15% 1.08% 1.23% 1.12% 1.24% (88)
Net interest
margin 3.72% 3.95% 4.13% 4.17% 4.26% (13)
Efficiency
ratio 60.5% 54.7% 53.4% 55.8% 54.9% 10
Average
equity 74,447 72,436 69,583 67,434 65,297 14
Average
assets 910,785 875,532 855,989 834,033 809,491 13
Average
interest
-earning
assets 865,430 837,586 821,253 799,678 772,192 12
(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 Financial Condition Highlights - Five-Year Comparison
($ in thousands, except per share data)
(Unaudited)
---------------------------------------------------------------------
2007 2006 2005 2004 2003
---------------------------------------------------------------------
Selected Average
Balances
----------------
Assets $869,026 $769,917 $685,163 $557,474 $443,502
Loans held for
sale 1,299 7,842 23,033 27,209 939
Loans, net of
unearned
income 754,490 658,750 565,131 441,421 356,006
Securities 58,910 50,600 41,300 40,703 44,015
Other interest
-earning
assets 16,201 17,278 26,168 22,383 21,198
Total interest
-earning
assets 830,900 734,470 655,632 531,716 422,158
Interest-bearing
deposits 628,310 542,375 487,493 371,877 300,045
Borrowed funds 70,939 62,255 55,255 67,353 40,158
Total interest
-bearing
liabilities 699,249 604,630 542,748 439,230 340,203
Noninterest
-bearing
deposits 91,367 96,113 89,386 76,593 65,403
Total deposits 719,677 638,488 576,879 448,470 365,448
Shareholders'
equity 71,516 61,766 47,428 38,126 35,740
Loan to deposit
ratio - average 105% 103% 98% 98% 97%
Selected Financial
Data at Year-End
------------------
Assets $932,459 $843,514 $717,901 $617,341 $476,865
Interest-
earning
assets 878,992 803,927 685,531 593,035 449,025
Loans held for
sale 180 914 10,473 26,471 10,393
Loans, net of
unearned
income 808,651 720,918 613,667 499,868 386,731
Deposits 764,218 706,824 600,510 506,120 389,146
Loan to
deposit ratio 106% 102% 102% 99% 99%
Interest-bearing
liabilities 759,597 669,974 558,116 488,546 360,817
Shareholders'
equity 76,272 66,574 58,543 40,071 36,771
Shareholders'
equity to total
assets 8.18% 7.89% 8.15% 6.49% 7.71%
Dividend payout
ratio 36.73% 25.92% 25.53% 37.69% 45.00%
Risk-based
capital ratios:
Tier 1 capital
to risk-based
assets 10.49% 11.09% 11.52% 9.95% 10.60%
Total capital
to risk-based
assets 11.74% 12.34% 12.77% 11.20% 11.85%
Loan Quality Data
-----------------
Nonperforming
assets $ 19,535 $ 2,776 $ 1,357 $ 998 $ 1,525
Nonperforming
loans 17,424 2,231 1,357 538 598
Net loan losses 765 444 76 128 306
Allowance for
loan losses 12,864 8,954 7,813 6,389 5,067
Nonperforming
loans to loans 2.15% 0.31% 0.22% 0.11% 0.15%
Nonperforming
assets to loans
and other real
estate owned 2.41% 0.39% 0.22% 0.20% 0.39%
Net loan losses
to average loans 0.01% 0.07% 0.01% 0.03% 0.09%
Allowance for
loan losses
to total loans 1.59% 1.24% 1.27% 1.28% 1.31%
Per Share Data
at Year-End(a)
---------------
Book value $ 12.88 $ 11.52 $ 10.20 $ 7.80 $ 7.17
Common stock
closing price
(Nasdaq) $ 17.14 $ 27.25 $ 28.38 $ 21.64 $ 18.56
Common shares
outstanding
(000s) 5,924 5,781 5,739 5,140 5,129
(a) Share and per share amounts have been restated to reflect the
effect of a 5-for-4 stock split in December 2006 and December
2004.
The Savannah Bancorp, Inc. and Subsidiaries
Selected Operating Highlights - Five-Year Comparison
($ in thousands, except per share data)
(Unaudited)
---------------------------------------------------------------------
2007 2006 2005 2004 2003
---------------------------------------------------------------------
Summary of
operations
Interest income
- taxable
equivalent $ 63,414 $ 55,347 $ 42,544 $ 28,947 $ 23,221
Interest
expense 30,282 22,737 14,679 8,427 6,695
---------------------------------------------------------------------
Net interest
income
- taxable
equivalent 33,132 32,610 27,865 20,520 16,526
Taxable
equivalent
adjustment (156) (158) (186) (240) (284)
---------------------------------------------------------------------
Net interest
income 32,976 32,452 27,679 20,280 16,242
Provision for
loan losses 4,675 1,585 1,500 1,450 1,000
---------------------------------------------------------------------
Net interest
income after
provision for
loan losses 28,301 30,867 26,179 18,830 15,242
---------------------------------------------------------------------
Noninterest
income
Service
charges on
deposit
accounts 1,383 1,526 1,622 1,598 1,572
Mortgage
related
income, net 615 886 1,292 1,079 776
Trust and
asset
management
fees 1,513 658 501 442 398
Other
operating
income 1,242 1,233 972 981 635
Gain (loss)
on sale of
OREO (44) -- -- -- --
---------------------------------------------------------------------
Total
noninterest
income 4,709 4,303 4,387 4,100 3,381
---------------------------------------------------------------------
Noninterest
expense
Salaries and
employee
benefits 11,846 10,852 9,530 8,362 6,693
Occupancy and
equipment 3,294 2,920 2,199 1,963 1,767
Information
technology 1,616 1,525 1,244 1,049 908
Other
operating
expense 4,383 4,656 3,673 2,880 2,287
---------------------------------------------------------------------
Total
noninterest
expense 21,139 19,953 16,646 14,254 11,655
---------------------------------------------------------------------
Income before
income taxes 11,871 15,217 13,920 8,676 6,968
Income tax
expense 4,235 5,215 4,880 2,940 2,324
---------------------------------------------------------------------
Net income $ 7,636 $ 10,002 $ 9,040 $ 5,736 $ 4,644
=====================================================================
Net income per
share:(a)
Basic $ 1.31 $ 1.73 $ 1.68 $ 1.12 $ 0.91
Diluted $ 1.29 $ 1.70 $ 1.63 $ 1.09 $ 0.89
Cash dividends
paid per share $ 0.48 $ 0.45 $ 0.43 $ 0.42 $ 0.41
Average basic
shares
outstand-
ing (000s) 5,850 5,765 5,396 5,136 5,129
Average
diluted
shares
outstand-
ing (000s) 5,922 5,876 5,531 5,261 5,226
Performance ratios
Net interest
margin 3.99% 4.44% 4.25% 3.86% 3.91%
Return on
average assets 0.88% 1.30% 1.32% 1.03% 1.05%
Return on
average equity 10.68% 16.19% 19.06% 15.04% 12.99%
Efficiency
ratio 56.09% 54.29% 51.91% 58.47% 59.40%
(a) Share and per share amounts have been restated to reflect the
effect of a 5-for-4 stock split in December 2006 and December
2004.
The Savannah Bancorp, Inc. and Subsidiaries
Selected Quarterly Data - 2007 and 2006
($ in thousands, except per share data)
(Unaudited)
Condensed Quarterly Income Statements
The following is a summary of unaudited quarterly results for 2007
and 2006:
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
2006
--------------------------------------------------------------------
Fourth Third Second First
--------------------------------------------------------------------
Net interest income $8,260 $8,119 $8,156 $7,917
Provision for loan losses 450 360 360 415
--------------------------------------------------------------------
Net interest income after
provision for loan losses 7,810 7,759 7,796 7,502
Noninterest income 1,090 1,056 1,086 1,071
Noninterest expense 5,137 4,945 4,976 4,895
--------------------------------------------------------------------
Income before income taxes 3,763 3,870 3,906 3,678
Income tax expense 1,240 1,280 1,368 1,327
--------------------------------------------------------------------
Net income $2,523 $2,590 $2,538 $2,351
====================================================================
Per share:(a)
Net income - basic $ .437 $ .450 $ .441 $ .408
Net income - diluted $ .429 $ .441 $ .432 $ .401
Dividends $ .112 $ .112 $ .112 $ .112
Average shares (000s)
Basic 5,779 5,761 5,759 5,759
Diluted 5,884 5,886 5,894 5,886
(a) Share and per share amounts have been adjusted to reflect the
effect of a 5-for-4 stock split in December 2006. The summation
of quarterly earnings per share may not agree with annual
earnings per share.
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 2007 and 2006 are listed below. There were approximately 700
holders of record of Company Common Stock and, according to
information available to the Company, approximately 720 additional
shareholders in street name through brokerage accounts at December
31, 2007. The per share amounts have been restated to reflect the
effect of a 5-for-4 stock split in December 2006.
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
2006
-------------------------------------------------------------------
Closing Market Prices Fourth Third Second First
-------------------------------------------------------------------
High $28.14 $30.31 $30.40 $29.58
Low 26.60 26.58 27.26 27.12
Close 27.25 26.64 30.26 28.06
The Savannah Bancorp, Inc. and Subsidiaries
Average Balance Sheet and Rate/Volume Analysis - 2007 and 2006
Average Balance Average Rate
------------------- --------------
2007 2006 2007 2006
---------------------------------------------------------------------
($ in thousands) (%)
Assets
$ 6,958 $ 5,969 4.97 4.91 Interest-bearing deposits
56,851 48,190 5.01 4.47 Investments - taxable
2,059 2,410 7.33 7.47 Investments - non-taxable
9,243 11,309 5.11 4.93 Federal funds sold
1,299 7,842 7.54 7.12 Loans held for sale
754,490 658,750 7.89 7.83 Loans(c)
---------------------
830,900 734,470 7.63 7.54 Total interest-earning assets
-------------
38,126 35,447 Noninterest-earning assets
---------------------
$869,026 $ 769,917 Total assets
=====================
Liabilities and equity
Deposits
$114,053 $ 95,138 2.00 1.32 NOW accounts
17,831 19,104 0.99 0.99 Savings accounts
167,887 135,736 4.27 3.75 Money market accounts
131,553 105,220 5.35 4.68 CDs, $100M or more
74,234 81,084 4.83 3.98 CDs, broker
122,752 106,093 5.03 4.39 Other time deposits
---------------------
Total interest-bearing
628,310 542,375 4.20 3.57 deposits
7,833 15,770 5.27 4.93 FHLB advances - long term
52,796 36,175 4.95 4.98 Short-term borrowings
10,310 10,310 8.17 7.90 Subordinated debt
---------------------
Total interest-bearing
699,249 604,630 4.33 3.76 liabilities
-------------
91,367 96,113 Noninterest-bearing deposits
6,894 7,408 Other liabilities
71,516 61,766 Shareholders' equity
---------------------
$869,026 $ 769,917 Liabilities and equity
=====================
3.30 3.78 Interest rate spread
=============
3.99 4.44 Net interest margin
=============
Net interest income
$131,651 $ 129,840 Net earning assets
=====================
$719,677 $ 638,488 Average deposits
=====================
3.67 3.03 Average cost of deposits
=============
105% 103% Average loan to deposit ratio
=====================
Taxable-Equivalent (a)Variance
Interest(b) Attributable to
------------------ Vari- ----------------
2007 2006 ance Rate Volume
----------------------------------------------------------------------
($ in thousands) ($ in thousands)
Assets
Interest-bearing
deposits $ 346 $ 293 $ 53 $ 4 $ 49
Investments - taxable 2,848 2,153 695 260 435
Investments - non-
taxable 151 180 (29) (3) (26)
Federal funds sold 472 557 (85) 20 (105)
Loans held for sale 98 558 (460) 33 (493)
Loans(c) 59,499 51,606 7,893 395 7,498
-------------------------
Total interest-earning
assets 63,414 55,347 8,067 661 7,406
-------------------------------------------
Noninterest-earning
assets
Total assets
Liabilities and equity
Deposits
NOW accounts 2,279 1,254 1,025 647 378
Savings accounts 176 190 (14) 0 (14)
Money market accounts 7,164 5,093 2,071 706 1,365
CDs, $100M or more 7,020 4,927 2,093 694 1,399
CDs, broker 3,605 3,225 380 714 (334)
Other time deposits 6,171 4,653 1,518 679 839
-------------------------
Total interest-bearing
deposits 26,415 19,342 7,073 3,417 3,656
FHLB advances - long
term 413 778 (365) 54 (419)
Short-term borrowings 2,612 1,802 810 (11) 821
Subordinated debt 842 815 27 28 (1)
-------------------------
Total interest-bearing
liabilities 30,282 22,737 7,545 3,446 4,099
-------------------------------------------
Noninterest-bearing
deposits
Other liabilities
Shareholders' equity
Liabilities and equity
Interest rate spread
Net interest margin
Net interest income $33,132 $32,610 $ 522 $(2,785) $3,307
===========================================
(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 $156 in 2007
and $158 in 2006.
(c) Average nonaccruing loans have been excluded from total average
loans and categorized as a noninterest-earning asset.
The Savannah Bancorp, Inc. and Subsidiaries
Average Balance Sheet and Rate/Volume Analysis -
Fourth Quarter, 2007 and 2006
Average Balance Average Rate
-------------------------------------
Q4 Q4 Q4 Q4
2007 2006 2007 2006
---------------------------------------------------------------------
($ in thousands) (%)
Assets
$ 9,067 $ 9,869 4.38 5.11 Interest-bearing deposits
58,946 50,116 5.07 4.61 Investments - taxable
1,917 2,104 7.45 7.54 Investments - non-taxable
5,368 10,119 3.33 4.55 Federal funds sold
669 2,204 8.30 9.36 Loans held for sale
789,463 697,780 7.55 8.00 Loans (c)
--------------------
865,430 772,192 7.33 7.70 Total interest-earning assets
-------------
45,355 37,299 Noninterest-earning assets
--------------------
$910,785 $809,491 Total assets
====================
Liabilities and equity
Deposits
$112,785 $ 104,879 1.85 1.63 NOW accounts
16,437 18,350 0.94 0.99 Savings accounts
183,122 143,984 3.99 4.20 Money market accounts
148,231 114,364 5.36 5.09 CDs, $100M or more
72,360 78,574 4.82 4.60 CDs, broker
126,018 114,312 5.02 4.77 Other time deposits
--------------------
658,953 574,463 4.14 3.97 Total interest-bearing
deposits
3,021 13,356 6.04 4.99 FHLB advances - long term
63,952 43,036 4.48 5.17 Other borrowings
10,310 10,310 8.20 8.23 Subordinated debt
--------------------
Total interest-bearing
736,236 641,165 4.24 4.14 liabilities
-------------
90,895 95,849 Noninterest-bearing deposits
7,207 7,180 Other liabilities
76,447 65,297 Shareholders' equity
--------------------
$910,785 $809,491 Liabilities and equity
====================
3.09 3.56 Interest rate spread
=============
3.72 4.26 Net interest margin
=============
Net interest income
$129,194 $131,027 Net earning assets
====================
$749,848 $670,312 Average deposits
====================
3.64 3.41 Average cost of deposits
=============
105% 104% Average loan to deposit ratio
====================
Taxable-Equivalent (a) Variance
Interest (b) Attributable to
-------------------- --------------
Q4 Q4 Vari-
2007 2006 ance Rate Volume
---------------------------------------------------------------------
($ in thousands) ($ in thousands)
Assets
Interest-bearing deposits $ 100 $ 127 ($27) $ (18) $ (9)
Investments - taxable 754 582 172 58 114
Investments - non-taxable 36 40 (4) 0 (4)
Federal funds sold 45 116 (71) (31) (40)
Loans held for sale 14 52 (38) (6) (32)
Loans (c) 15,032 14,079 953 (791) 1,744
------------------------
Total interest-earning
assets 15,981 14,996 985 (720) 1,705
-----------------------------------------
Noninterest-earning assets
Total assets
Liabilities and equity
Deposits
NOW accounts 527 431 96 58 38
Savings accounts 39 46 (7) (2) (5)
Money market accounts 1,841 1,523 318 (76) 394
CDs, $100M or more 2,001 1,467 534 78 456
CDs, broker 880 912 (32) 44 (76)
Other time deposits 1,593 1,375 218 72 146
------------------------
Total interest-bearing 6,881 5,754 1,127 246 881
deposits
FHLB advances - long term 46 168 (122) 35 (157)
Other borrowings 722 561 161 (75) 236
Subordinated debt 213 214 (1) (1) 0
------------------------
Total interest-bearing
liabilities 7,862 6,697 1,165 162 1,003
----------------------------------------
Noninterest-bearing
deposits
Other liabilities
Shareholders' equity
Liabilities and equity
Interest rate spread
Net interest margin
Net interest income $8,119 $8,299 $(180) $(882) $ 702
========================================
Net earning assets
(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 $39 in the
fourth quarter 2007 and 2006, respectively.
(c) Average nonaccruing loans have been excluded from total average
loans and categorized as a noninterest-earning asset.
The Savannah Bancorp, Inc. and Subsidiaries
Regulatory Capital Ratios
The primary banking regulators of The Savannah Bancorp, Inc. and
Subsidiary Banks have adopted capital requirements that specify the
minimum level for which no prompt corrective action is required. In
addition, the Federal Deposit Insurance Corporation ("FDIC") has
adopted FDIC insurance assessment rates based on certain "well-
capitalized" risk-based and equity capital ratios. Failure to meet
minimum capital requirements can result in the initiation of certain
actions by the regulators that, if undertaken, could have a material
effect on the Company's and the Subsidiary Banks' financial
statements. The following tables show the capital ratios for the
Company and the Subsidiary Banks at December 31, 2007 and 2006:
($ in thousands) Company Savannah
--------------------------------------------------------------------
2007 2006 2007 2006
--------------------------------------------------------------------
Qualifying Capital
------------------
Tier 1 capital $81,049 $77,205 $50,433 $48,718
Total capital 90,747 85,910 56,864 54,712
Leverage Ratios
---------------
Tier 1 capital to
average assets 8.90% 9.57% 8.29% 8.58%
Risk-based Ratios
-----------------
Tier 1 capital to
risk-weighted
assets 10.49% 11.09% 9.84% 10.17%
Total capital to
risk-weighted assets 11.74% 12.34% 11.09% 11.42%
($ in thousands) Bryan Harbourside
--------------------------------------------------------------------
2007 2006 2007 2006
--------------------------------------------------------------------
Qualifying Capital
------------------
Tier 1 capital $18,045 $16,833 $ 8,681 $ 8,687
Total capital 20,328 18,874 9,611 9,207
Leverage Ratios
---------------
Tier 1 capital to
average assets 8.62% 9.23% 10.11% 15.55%
Risk-based Ratios
-----------------
Tier 1 capital to
risk-weighted
assets 9.88% 10.31% 11.86% 16.98%
Total capital to
risk-weighted assets 11.13% 11.56% 13.13% 18.00%
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 6.00% 4.00%
assets
Total capital to risk-weighted assets 10.00% 8.00%
The Savannah Bancorp, Inc. and Subsidiaries
Loan Concentration Schedule
% of % of % Dollar
($ in thousands) 12/31/07 Total 12/31/06 Total Change
---------------------------------------------------------------------
Non-residential
real estate
Owner-
occupied $118,714 15 $ 90,848 13 31
Non
owner
-occupied 118,904 15 98,032 14 21
Construction 33,923 4 22,128 3 53
Commercial
land and
lot
development 38,127 5 35,610 5 7.1
---------------------------------------------------------------------
Total non-
residential
real estate 309,668 39 246,618 35 26
---------------------------------------------------------------------
Residential
real estate
Owner-
occupied -
1-4 family 83,828 10 87,965 12 (4.7)
Non owner-
occupied -
1-4 family 114,992 14 68,397 10 68
Construction 57,541 7 110,412 15 (48)
Residential
land and
lot
development 109,718 14 93,060 12 18
Home equity
lines 43,322 5 40,794 6 6.2
---------------------------------------------------------------------
Total
residential
real estate 409,401 50 400,628 55 2.2
---------------------------------------------------------------------
Total real
estate loans 719,069 89 647,246 90 11
Commercial 71,370 9 57,737 8 24
Consumer 18,692 2 16,628 2 12
Unearned fees,
net (480) -- (693) -- (31)
---------------------------------------------------------------------
Total loans,
net of
unearned fees $ 808,651 100 $ 720,918 100 12
=====================================================================
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Statement of Shareholders' Equity
For the Three Years Ended December 31, 2007
($ in thousands, except share data)
December 31,
---------------------------------------------------------------------
2007 2006 2005
---------------------------------------------------------------------
Common shares issued
Shares, beginning of year 5,781,381 4,591,339 4,112,448
Common stock issued 78,000 -- 397,273
Stock split / dividend -- 1,155,564 --
Stock options exercised 64,416 34,478 81,618
---------------------------------------------------------------------
Shares, end of year 5,923,797 5,781,381 4,591,339
=====================================================================
Treasury shares owned
Shares, beginning of year 318 267 282
Stock split / dividend -- 63 (15)
Stock options exercised -- (12) --
---------------------------------------------------------------------
Shares, end of year 318 318 267
=====================================================================
Common stock
Balance, beginning of year $ 5,781 $ 4,591 $ 4,112
Common stock issued 78 -- 397
Stock split / dividend -- 1,156 --
Stock options exercised 65 34 82
---------------------------------------------------------------------
Balance, end of year 5,924 5,781 4,591
---------------------------------------------------------------------
Additional paid-in capital
Balance, beginning of year 35,747 36,257 24,232
Common stock issued, net of
issuance costs 1,702 -- 11,191
Stock split / dividend -- (1,156) --
Stock-based compensation
expense 147 299 --
Stock options exercised 683 272 494
Stock options tax benefit -- 75 340
---------------------------------------------------------------------
Balance, end of year 38,279 35,747 36,257
---------------------------------------------------------------------
Retained earnings
Balance, beginning of year 25,681 18,272 11,539
Net income 7,636 10,002 9,040
Cash dividends paid (2,805) (2,593) (2,307)
---------------------------------------------------------------------
Balance, end of year 30,512 25,681 18,272
---------------------------------------------------------------------
Treasury stock
Balance, beginning of year (4) (4) (4)
Stock options exercised -- -- --
---------------------------------------------------------------------
Balance, end of year (4) (4) (4)
---------------------------------------------------------------------
Accumulated other comprehensive
income (loss), net
Balance, beginning of year (631) (573) 192
Change in unrealized losses
on securities available for
sale, net of tax 662 178 (522)
Net change in fair value of
derivative instruments,
net of tax 1,530 (236) (243)
---------------------------------------------------------------------
Balance, end of year 1,561 (631) (573)
---------------------------------------------------------------------
Total shareholders' equity $ 76,272 $ 66,574 $ 58,543
=====================================================================