SAVANNAH, Ga., July 21, 2009 (GLOBE NEWSWIRE) -- The Savannah Bancorp, Inc. (Nasdaq:SAVB) reported net income for the second quarter 2009 of $106,000 compared to $1,886,000 in the second quarter 2008. Net income per diluted share was 2 cents in the second quarter of 2009 compared to 32 cents per diluted share in 2008. The decline in second quarter earnings results primarily from a higher provision for loan losses, higher FDIC insurance premiums and a lower net interest margin in 2009 as compared to 2008. Pretax earnings before the provision for loan losses and gain/loss on sale of securities and OREO were $3,946,000 in the second quarter 2009 compared to $3,875,000 in 2008. Other growth and performance ratios are included in the attached financial highlights and information.
During the second quarter 2009, the Company's two largest subsidiaries, The Savannah Bank, N.A. ("Savannah") and Bryan Bank & Trust ("Bryan"), continued to be profitable. Savannah and Bryan account for approximately 91 percent of the Company's total assets and 92 percent of total loans.
Total assets increased 5.8 percent to $1.02 billion at June 30, 2009, up $56 million from $964 million a year earlier. Loans totaled $862 million compared to $838 million one year earlier, an increase of 2.8 percent. Deposits totaled $847 million and $808 million at June 30, 2009 and 2008, respectively, an increase of 4.8 percent. Shareholders' equity increased 0.7 percent to $79 million at June 30, 2009 from $78 million at June 30, 2008. The Company's total capital to risk-weighted assets ratio was 11.55 percent, which exceeds the 10 percent required by the regulatory agencies to maintain well-capitalized status.
John Helmken, President and CEO, said, "We are proud of our profitable quarter, particularly in light of the special FDIC assessment and the aggressive manner in which we have continued to address our problem assets. Our focus on a better mix of deposits and properly pricing loans for credit risk continues to increase our net interest margin. On a linked quarter basis, the second quarter margin increased 16 basis points which followed a 12 basis point increase in the first quarter. Our decision to move rather than hold some of our OREO properties -- primarily driven by the cost to hold several of the properties -- had a very negative impact on earnings and masked some of our core overhead reductions. Our salaries and benefits expense has been reduced almost $500,000 per quarter since the second quarter of 2008."
Helmken continued, "We are excited about the new business opportunities that we are seeing and the new relationships that we are establishing. Likewise, we appreciate the continued loyalty of our existing customers. We feel that with our growing customer base, expanding net interest margin and reduced overhead, coupled with the apparent stabilization of our loan portfolio, we are well positioned for the second half of 2009 and to start 2010. Many of our competitors are afraid to do business -- we are actively looking for ways to expand our existing relationships and create new ones."
The allowance for loan losses was $15,597,000, or 1.81 percent of loans at June 30, 2009 compared to $12,445,000 or 1.48 percent of total loans a year earlier. Nonperforming assets were $33,745,000 or 3.88 percent of total loans and other real estate owned at June 30, 2009 compared to $21,030,000 or 2.50 percent at June 30, 2008. At March 31, 2009 and December 31, 2008, respectively, nonperforming assets were $32,537,000 and $35,707,000 or 3.73 and 4.09 percent of loans and other real estate owned. Second quarter net charge-offs were $2,937,000 compared to net charge-offs of $838,000 in the same period in 2008. Year to date net charge-offs were $4,648,000 in 2009 compared to $2,644,000 in 2008. The provision for loan losses for the second quarter of 2009 was $3,225,000 compared to $1,155,000 for the second quarter of 2008. The higher provision for loan losses was primarily due to charge-offs and continued weakness in the Company's local real estate markets. In particular, the Hilton Head Island/Bluffton residential market has continued to experience price declines.
Helmken added, "Our profitability, well capitalized status, liquidity and strong balance sheet are the foundation that we need to manage our Company in the current environment as well as to take advantage of opportunities that lie ahead. Our focus on expense control and overhead reduction are finally starting to pass through to earnings. We still have work to do in our loan portfolio and continue to make that our top priority. Fortunately, we started aggressively addressing those issues ahead of many of our competitors and we feel this advantage will result in a more prompt resolution at the lowest possible cost."
Net interest income was down $302,000, or 3.6 percent, in the second quarter 2009 versus the second quarter 2008, but the net interest margin improved 16 basis points on a linked quarter basis from the 3.36 percent margin for the first quarter 2009. Second quarter net interest margin was 3.52 percent in 2009 as compared to 3.77 percent in 2008 primarily due to lower loan market rates, competitive local deposit pricing and higher levels of noninterest-earning assets. The prime rate declined 175 basis points from 5.00 percent to 3.25 percent over the one year period ended June 30, 2009.
Noninterest income increased $132,000, or 7.4 percent in the second quarter of 2009 versus the same period in 2008 due to higher mortgage related income, a gain on hedges of $245,000 and a gain on the sale of securities of $190,000 partially offset by lower trust and asset management fees and lower service charges on deposits.
Noninterest expense increased to $6,739,000, up $605,000 or 10 percent, in the second quarter 2009 compared to the second quarter 2008. Second quarter 2009 noninterest expense included $651,000 of higher FDIC insurance premiums, of which approximately $465,000 was a special assessment applicable to all banks, and a loss on sale of OREO of $885,000. The remainder of the increase was due to higher information technology expense offset by a $491,000 decrease in salaries and employee benefits.
Today, the Board of Directors approved a quarterly cash dividend of 2 cents per share payable on August 17, 2009 to shareholders of record on July 31, 2009.
The Savannah Bancorp, Inc. ("SAVB"), a bank holding company for The Savannah Bank, N.A., Bryan Bank & Trust (Richmond Hill, Georgia), Harbourside Community Bank (Hilton Head Island, SC) and Minis & Co., Inc., 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.
The Savannah Bancorp, Inc. and Subsidiaries Second Quarter Financial Highlights June 30, 2009 and 2008 ($ in thousands, except share data) (Unaudited) % Balance Sheet Data at June 30 2009 2008 Change --------------------------------------------------------------------- Total assets $1,019,557 $963,600 5.8 Interest-earning assets 936,927 901,643 3.9 Loans 862,242 838,426 2.8 Other real estate owned 6,377 2,346 172 Deposits 847,037 808,148 4.8 Interest-bearing liabilities 856,041 793,509 7.9 Shareholders' equity 78,980 78,463 0.7 Loan to deposit ratio 101.80% 103.75% (1.9) Equity to assets 7.75% 8.14% (4.8) Tier 1 capital to risk-weighted assets 10.30% 10.50% (1.9) Total capital to risk-weighted assets 11.55% 11.75% (1.7) Outstanding shares 5,932 5,931 0.0 Book value per share $ 13.31 $ 13.23 0.6 Tangible book value per share $ 12.88 $ 12.77 0.9 Market value per share $ 6.65 $ 13.00 (49) Loan Quality Data --------------------------------------------------------------------- Nonaccruing loans $ 24,994 $ 16,991 47 Loans past due 90 days - accruing 2,374 1,693 40 Net charge-offs 4,648 2,644 76 Allowance for loan losses 15,597 12,445 25 Allowance for loan losses to total loans 1.81% 1.48% 22 Nonperforming assets to total loans and other real estate owned 3.88% 2.50% 55 Performance Data for the Second Quarter --------------------------------------------------------------------- Net income $ 106 $ 1,886 (94) Return on average assets .04% .80% (95) Return on average equity .53% 9.65% (95) Net interest margin 3.52% 3.77% (6.6) Efficiency ratio 67.46% 60.44% 12 Per share data: Net income - basic $ 0.02 $ 0.32 (94) Net income - diluted $ 0.02 $ 0.32 (94) Dividends $ 0.02 $ 0.125 (84) Average shares (000s): Basic 5,932 5,931 0.0 Diluted 5,936 5,952 (0.3) Performance Data for the First Six Months --------------------------------------------------------------------- Net (loss) income $ (179) $ 3,590 (105) Return on average assets (.04)% .76% (105) Return on average equity (.45)% 9.18% (105) Net interest margin 3.44% 3.74% (8.0) Efficiency ratio 67.20% 61.47% 9.3 Per share data: Net (loss) income - basic $ (0.03) $ 0.61 (105) Net (loss) income - diluted $ (0.03) $ 0.60 (105) Dividends $ 0.145 $ 0.250 (42) Average shares (000s): Basic 5,933 5,929 0.1 Diluted 5,936 5,952 (0.3) The Savannah Bancorp, Inc. and Subsidiaries Consolidated Balance Sheets June 30, 2009 and 2008 ($ in thousands, except share data) (Unaudited) June 30, --------------------------------------------------------------------- 2009 2008 --------------------------------------------------------------------- Assets Cash and due from banks $ 22,650 $ 18,237 Federal funds sold 11,550 12,707 Interest-bearing deposits 6,209 9,763 --------------------------------------------------------------------- Cash and cash equivalents 40,409 40,707 Securities available for sale, at fair value (amortized cost of $81,862 and $56,475) 83,825 56,678 Loans held for sale 58 1,263 Loans, net of allowance for loan losses of $15,597 and $12,445 846,645 825,981 Premises and equipment, net 16,408 9,519 Other real estate owned 6,377 2,346 Bank-owned life insurance 6,326 6,100 Goodwill and other intangible assets, net 2,570 2,714 Other assets 16,939 18,292 --------------------------------------------------------------------- Total assets $1,019,557 $963,600 ===================================================================== Liabilities Deposits: Noninterest-bearing $ 78,961 $ 83,736 Interest-bearing demand 121,919 127,699 Savings 16,421 16,005 Money market 219,990 221,958 Time deposits 409,746 358,750 --------------------------------------------------------------------- Total deposits 847,037 808,148 Short-term borrowings 61,989 46,961 FHLB advances - long-term 15,666 11,826 Subordinated debt 10,310 10,310 Other liabilities 5,575 7,892 --------------------------------------------------------------------- Total liabilities 940,577 885,137 --------------------------------------------------------------------- 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 5,931,008 shares 5,934 5,931 Additional paid-in capital 38,567 38,419 Retained earnings 32,512 32,618 Treasury stock, 1,443 and 318 shares (4) (4) Accumulated other comprehensive income, net 1,971 1,499 --------------------------------------------------------------------- Total shareholders' equity 78,980 78,463 --------------------------------------------------------------------- Total liabilities and shareholders' equity $1,019,557 $963,600 ===================================================================== The Savannah Bancorp, Inc. and Subsidiaries Consolidated Statements of Operations For the Six Months and Five Quarters Ending June 30, 2009 and 2008 ($ in thousands, except per share data) --------------------------------------------------------------------- (Unaudited) --------------------------------------------------------------------- For the Six Months Ended --------------------------------------------------------------------- June 30, ------------------- % 2009 2008 Chg --------------------------------------------------------------------- Interest and dividend income Loans, including fees $23,495 $27,658 (15) Loans held for sale 7 32 (78) Investment securities 1,799 1,542 17 Deposits with banks 25 101 (75) Federal funds sold 4 86 (95) ----------------------------------------------------------- Total interest and dividend income 25,330 29,419 (14) ----------------------------------------------------------- Interest expense Deposits 8,745 11,482 (24) Short-term borrowings & sub debt 702 1,348 (48) FHLB advances 133 132 0.8 ----------------------------------------------------------- Total interest expense 9,580 12,962 (26) ----------------------------------------------------------- Net interest income 15,750 16,457 (4.3) Provision for loan losses 6,945 2,225 212 ----------------------------------------------------------- Net interest income after the provision for loan losses 8,805 14,232 (38) ----------------------------------------------------------- Noninterest income Trust and asset management fees 1,158 1,444 (20) Service charges on deposits 899 921 (2.4) Mortgage related income, net 251 149 68 Other operating income 592 606 (2.3) Gain on hedges 641 284 126 Gain on sale of securities 374 134 179 ----------------------------------------------------------- Total noninterest income 3,915 3,538 11 ----------------------------------------------------------- Noninterest expense Salaries and employee benefits 6,349 6,962 (8.8) Occupancy and equipment 1,460 1,799 (19) Information technology 889 788 13 Loss (gain) on sale of OREO 1,049 (16) NM Other operating expense 3,467 2,752 26 ----------------------------------------------------------- Total noninterest expense 13,214 12,285 7.6 ----------------------------------------------------------- Income (loss) before income taxes (494) 5,485 (109) Income tax (benefit) expense (315) 1,895 (116) ----------------------------------------------------------- Net (loss) income $ (179) $ 3,590 (105) =========================================================== Net (loss) income per share: Basic $(0.03) $ 0.61 (105) =========================================================== Diluted $(0.03) $ 0.60 (105) =========================================================== Average basic shares (000s) 5,933 5,929 0.1 Average diluted shares (000s) 5,936 5,952 (0.3) Performance Ratios Return on average equity (0.45)% 9.18% (105) Return on average assets (0.04)% 0.76% (105) Net interest margin 3.44% 3.74% (8.0) Efficiency ratio 67.20% 61.47% 9.3 Average equity 80,236 78,404 2.3 Average assets 1,004,105 942,258 6.6 Average interest-earning assets 923,791 884,125 4.5 ---------------------------------------------------------------------- (Unaudited) ---------------------------------------------------------------------- 2009 2008 Q2-09/ Second First Fourth Third Second Q2-08 Quarter Quarter Quarter Quarter Quarter % -------------------------- ------------------------------------------- Interest and dividend income Loans, including fees $11,852 $11,643 $12,268 $13,333 $13,447 (12) Loans held for sale 4 3 8 20 20 (80) Investment securities 894 905 817 722 760 18 Deposits with banks 12 13 18 30 34 (65) Federal funds sold 2 2 16 31 33 (94) --------------------------------------------------------------- Total interest and dividend income 12,764 12,566 13,127 14,136 14,294 (11) --------------------------------------------------------------- Interest expense Deposits 4,264 4,481 4,969 5,391 5,358 (20) Short-term borrowings & sub debt 338 364 543 412 467 (28) FHLB advances 78 55 80 82 83 (6.0) --------------------------------------------------------------- Total interest expense 4,680 4,900 5,592 5,885 5,908 (21) --------------------------------------------------------------- Net interest income 8,084 7,666 7,535 8,251 8,386 (3.6) Provision for loan losses 3,225 3,720 2,270 1,505 1,155 179 --------------------------------------------------------------- Net interest income after the provision for loan losses 4,859 3,946 5,265 6,746 7,231 (33) --------------------------------------------------------------- Noninterest income Trust and asset management fees 571 587 675 713 720 (21) Service charges on deposits 432 467 447 513 534 (19) Mortgage related income, net 159 92 60 86 86 85 Other operating income 309 283 314 296 300 3.0 Gain on hedges 245 396 574 430 -- NM Gain on sale of securities 190 184 29 -- 134 42 --------------------------------------------------------------- Total non- interest income 1,906 2,009 2,099 2,038 1,774 7.4 --------------------------------------------------------------- Noninterest expense Salaries and employee benefits 2,998 3,351 3,095 3,479 3,489 (14) Occupancy and equipment 452 1,008 1,118 967 910 (50) Information technology 451 438 421 424 395 14 Loss (gain) on sale of OREO 885 164 141 17 (17) NM Other operating expense 1,953 1,514 1,431 1,364 1,357 44 --------------------------------------------------------------- Total non- interest expense 6,739 6,475 6,206 6,251 6,134 10 --------------------------------------------------------------- Income (loss) before income taxes 26 (520) 1,158 2,533 2,871 (99) Income tax (benefit) expense (80) (235) 380 895 985 (108) --------------------------------------------------------------- Net (loss) income $ 106 $ (285) $ 778 $ 1,638 $ 1,886 (94) =============================================================== Net (loss) income per share: Basic $ 0.02 $(0.05) $ 0.13 $ 0.28 $ 0.32 (94) =============================================================== Diluted $ 0.02 $(0.05) $ 0.13 $ 0.28 $ 0.32 (94) =============================================================== Average basic shares (000s) 5,932 5,933 5,933 5,930 5,931 0.0 Average diluted shares (000s) 5,936 5,937 5,942 5,943 5,952 (0.3) Performance Ratios Return on average equity 0.53% (1.43)% 3.86% 8.24% 9.65% (95) Return on average assets 0.04% (0.12)% 0.31% 0.68% 0.80% (95) Net interest margin 3.52% 3.36% 3.24% 3.63% 3.77% (6.6) Efficiency ratio 67.46% 66.93% 64.42% 60.75% 60.37% 12 Average equity 79,606 80,873 80,138 79,035 78,596 1.3 Average assets 1,005,112 1,003,068 991,368 964,762 949,937 5.8 Average interest- earning assets 922,073 925,531 922,642 901,992 892,397 3.3
Capital Resources
The banking regulatory agencies have adopted capital requirements that specify the minimum level for which no prompt corrective action is required. In addition, the FDIC assesses FDIC insurance premiums based on certain "well-capitalized" risk-based and equity capital ratios. As of June 30, 2009, the Company and the Subsidiary Banks exceeded the minimum requirements necessary to be classified as "well-capitalized."
Total tangible equity capital for the Company was $76.4 million, or 7.50 percent of total assets at June 30, 2009. The table below includes the regulatory capital ratios for the Company and each Subsidiary Bank along with the minimum capital ratio and the ratio required to maintain a well-capitalized regulatory status.
($ in thousands) Company Savannah Bryan ------------------------------------------------------------------- Qualifying Capital Tier 1 capital $ 84,439 $ 54,671 $ 21,339 Total capital 94,756 61,557 23,869 Leverage Ratios Tier 1 capital to average assets 8.40% 8.18% 8.82% Risk-based Ratios Tier 1 capital to risk- weighted assets 10.30% 9.96% 10.56% Total capital to risk- weighted assets 11.55% 11.22% 11.81% Well- ($ in thousands) Harbourside Minimum Capitalized ------------------------------------------------------------------- Qualifying Capital Tier 1 capital $ 4,910 -- -- Total capital 5,604 -- -- Leverage Ratios Tier 1 capital to average assets 6.20% 4.00% 5.00% Risk-based Ratios Tier 1 capital to risk- weighted assets 9.13% 4.00% 6.00% Total capital to risk- weighted assets 10.42% 8.00% 10.00%
Tier 1 and total capital at the Company level includes $10 million of subordinated debt issued to the Company's nonconsolidated subsidiaries. Total capital also includes the allowance for loan losses up to 1.25 percent of risk-weighted assets.
The Savannah Bancorp, Inc. and Subsidiaries Allowance for Loan Losses and Nonperforming Loans (Unaudited) 2009 2008 --------------------------------------------------------------------- Second First Fourth Third Second ($ in thousands) Quarter Quarter Quarter Quarter Quarter --------------------------------------------------------------------- Allowance for loan losses Balance at beginning of period $15,309 $13,300 $12,390 $12,445 $12,128 Provision for loan losses 3,225 3,720 2,270 1,505 1,155 Net charge-offs (2,937) (1,711) (1,360) (1,560) (838) --------------------------------------------------------------------- Balance at end of period $15,597 $15,309 $13,300 $12,390 $12,445 ===================================================================== As a % of loans 1.81% 1.77% 1.54% 1.45% 1.48% As a % of nonperforming loans 56.99% 63.27% 48.18% 56.25% 66.61% As a % of nonperforming assets 46.22% 47.05% 37.25% 43.94% 59.18% Net charge-offs as a % of average loans(a) 1.41% 0.82% 0.65% 0.75% 0.40% Risk element assets Nonaccruing loans $24,994 $23,927 $26,277 $17,753 $16,991 Loans past due 90 days - accruing 2,374 268 1,330 4,274 1,693 --------------------------------------------------------------------- Total nonperforming loans 27,368 24,195 27,607 22,027 18,684 Other real estate owned 6,377 8,342 8,100 6,168 2,346 --------------------------------------------------------------------- Total nonperforming assets $33,745 $32,537 $35,707 $28,195 $21,030 ===================================================================== Loans past due 30-89 days $ 6,670 $16,906 $ 8,269 $ 8,841 $ 6,528 Nonperforming loans as a % of loans 3.17% 2.80% 3.19% 2.58% 2.22% Nonperforming assets as a % of loans and other real estate owned 3.88% 3.73% 4.09% 3.28% 2.50% (a) Annualized The Savannah Bancorp, Inc. & Subsidiaries Loan Concentration Schedule June 30, 2009 and December 31, 2008 % % of % of Dollar ($ in thousands) 6/30/09 Total 12/31/08 Total Change ---------------------------------------------------------------------- Non-residential real estate Owner-occupied $137,211 16 $137,742 16 (0.4) Non owner-occupied 139,569 16 124,502 14 12 Construction 11,055 1 26,965 3 (59) Commercial land and lot development 43,565 5 42,590 5 2.3 ------------------------------------------------------------- Total non-residential real estate 331,400 38 331,799 38 (0.1) ------------------------------------------------------------- Residential real estate Owner-occupied - 1-4 family 92,198 11 89,774 10 2.7 Non owner-occupied - 1-4 family 158,133 18 147,396 17 7.3 Construction 25,074 3 43,431 5 (42) Residential land and lot development 97,766 11 98,715 12 (1.0) Home equity lines 57,117 7 55,092 6 3.7 ------------------------------------------------------------- Total residential real estate 430,288 50 434,408 50 (0.9) ------------------------------------------------------------- Total real estate loans 761,688 88 766,207 88 (0.6) Commercial 85,221 10 81,348 10 4.8 Consumer 15,640 2 17,628 2 (11) Unearned fees, net (307) -- (209) -- 47 ------------------------------------------------------------- Total loans, net of unearned fees $862,242 100 $864,974 100 (0.3) ====================================================================== The Savannah Bancorp, Inc. and Subsidiaries Average Balance Sheet and Rate/Volume Analysis - Second Quarter, 2009 and 2008 Average Balance Average Rate ---------------------------------------- QTD QTD QTD QTD 6/30/09 6/30/08 6/30/09 6/30/08 ---------------------------------------- ($ in thousands) (%) Assets $ 8,819 $ 5,675 0.55 2.40 Interest-bearing deposits 71,551 57,466 4.89 5.17 Investments - taxable 1,467 1,915 7.38 5.24 Investments - non-taxable 4,414 7,080 0.18 1.87 Federal funds sold 72 980 22.28 8.19 Loans held for sale 835,750 819,281 5.69 6.58 Loans(c) ----------------------- 922,073 892,397 5.56 6.43 Total interest-earning assets --------------- 83,039 57,540 Noninterest-earning assets ----------------------- $1,005,112 $ 949,937 Total assets ======================= Liabilities and equity Deposits $ 124,691 $ 121,168 0.49 1.16 NOW accounts 16,425 15,882 0.71 0.88 Savings accounts 118,787 138,915 1.76 2.25 Money market accounts Money market accounts - 91,463 68,601 1.61 2.50 institutional 160,127 149,010 3.48 4.64 CDs, $100M or more 113,551 69,404 2.17 3.44 CDs, broker 142,272 131,358 3.35 4.42 Other time deposits ----------------------- Total interest-bearing 767,316 694,338 2.23 3.10 deposits 13,974 11,876 2.24 2.80 FHLB advances - long-term 45,704 62,738 2.12 2.10 Short-term borrowings 10,310 10,310 3.73 5.37 Subordinated debt ----------------------- Total interest-bearing 837,304 779,262 2.24 3.04 liabilities --------------- 82,172 84,130 Noninterest-bearing deposits 6,030 7,949 Other liabilities 79,606 78,596 Shareholders' equity ----------------------- $1,005,112 $ 949,937 Liabilities and equity ======================= 3.32 3.39 Interest rate spread =============== 3.52 3.77 Net interest margin =============== Net interest income $ 84,769 $ 113,135 Net earning assets ======================= $ 849,488 $ 778,468 Average deposits ======================= 2.01 2.76 Average cost of deposits =============== 98% 105% Average loan to deposit ratio ======================= Taxable-Equivalent (a) Variance Interest(b) Attributable to ------------------ ---------------- QTD QTD Vari- 6/30/09 6/30/08 ance Rate Volume --------------------------------------------------------------------- ($ in thousands) ($ in thousands) Assets Interest-bearing deposits $ 12 $ 34 $ (22) $ (26) $ 4 Investments - taxable 873 741 132 (40) 172 Investments - non-taxable 27 25 2 10 (8) Federal funds sold 2 33 (31) (30) (1) Loans held for sale 4 20 (16) 34 (50) Loans (c) 11,854 13,449 (1,595) (1,818) 223 ------------------------------------------- Total interest-earning assets 12,772 14,302 (1,530) (1,936) 406 ------------------------------------------- Noninterest-earning assets Total assets Liabilities and equity Deposits NOW accounts 153 351 (198) (202) 4 Savings accounts 29 35 (6) (7) 1 Money market accounts 522 778 (256) (170) (86) Money market accounts - institutional 367 427 (60) (152) 92 CDs, $100M or more 1,391 1,724 (333) (431) 98 CDs, broker 613 595 18 (220) 238 Other time deposits 1,189 1,448 (259) (350) 91 ------------------------------------------- Total interest-bearing deposits 4,264 5,358 (1,094) (1,506) 412 FHLB advances - long-term 78 83 (5) (17) 12 Short-term borrowings 242 329 (87) 3 (90) Subordinated debt 96 138 (42) (42) -- ------------------------------------------- Total interest-bearing liabilities 4,680 5,908 (1,228) (1,554) 326 ------------------------------------------- Noninterest-bearing deposits Other liabilities Shareholders' equity Liabilities and equity Interest rate spread Net interest margin Net interest income $ 8,092 $ 8,394 $ (302) $ (382) $ 80 =========================================== 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 $8 in the second quarter 2009 and 2008, respectively. (c) Average nonaccruing loans have been excluded from total average loans and categorized in noninterest-earning assets. The Savannah Bancorp, Inc. and Subsidiaries Average Balance Sheet and Rate/Volume Analysis - First Six Months, 2009 and 2008 Average Balance Average Rate ---------------------------------------- YTD YTD YTD YTD 6/30/09 6/30/08 6/30/09 6/30/08 ---------------------------------------- ($ in thousands) (%) Assets $ 6,331 $ 6,294 0.80 3.22 Interest-bearing deposits 74,133 57,945 4.79 5.20 Investments - taxable 1,520 1,915 6.63 5.45 Investments - non-taxable 4,011 6,750 0.20 2.56 Federal funds sold 90 857 15.68 7.49 Loans held for sale 837,706 810,364 5.66 6.85 Loans(c) ----------------------- 923,791 884,125 5.53 6.68 Total interest-earning assets --------------- 80,314 58,133 Noninterest-earning assets ----------------------- $1,004,105 $ 942,258 Total assets ======================= Liabilities and equity Deposits $ 124,023 $ 118,326 0.50 1.35 NOW accounts 15,750 15,935 0.72 0.91 Savings accounts 113,038 137,228 1.78 2.49 Money market accounts Money market accounts - 94,759 60,134 1.71 3.09 institutional 152,281 147,962 3.62 4.87 CDs, $100M or more 118,115 69,637 2.42 3.93 CDs, broker 141,542 130,675 3.46 4.63 Other time deposits ----------------------- Total interest-bearing 759,508 679,897 2.32 3.39 deposits 12,269 8,804 2.19 3.01 FHLB advances - long-term 53,875 72,956 1.86 2.80 Short-term borrowings 10,310 10,310 4.01 6.38 Subordinated debt ----------------------- Total interest-bearing 835,962 771,967 2.31 3.37 liabilities --------------- 81,660 83,827 Noninterest-bearing deposits 6,247 8,060 Other liabilities 80,236 78,404 Shareholders' equity ----------------------- $1,004,105 $ 942,258 Liabilities and equity ======================= 3.22 3.31 Interest rate spread =============== 3.44 3.74 Net interest margin =============== Net interest income $ 87,829 $ 112,158 Net earning assets ======================= $ 841,168 $ 763,724 Average deposits ======================= 2.10 3.02 Average cost of deposits =============== Average loan to deposit 100% 106% ratio ======================= Taxable-Equivalent (a) Variance Interest(b) Attributable to ------------------ ---------------- YTD YTD Vari- 6/30/09 6/30/08 ance Rate Volume --------------------------------------------------------------------- ($ in thousands) ($ in thousands) Assets Interest-bearing deposits $ 25 $ 101 $ (76) $ (76) $ -- Investments - taxable 1,761 1,502 259 (118) 377 Investments - non-taxable 50 52 (2) 11 (13) Federal funds sold 4 86 (82) (79) (3) Loans held for sale 7 32 (25) 35 (60) Loans (c) 23,499 27,662 (4,163) (4,782) 619 -------------------------- Total interest-earning assets 25,346 29,435 (4,089) (5,042) 953 ------------------------------------------- Noninterest-earning assets Total assets Liabilities and equity Deposits NOW accounts 310 799 (489) (499) 10 Savings accounts 56 72 (16) (15) (1) Money market accounts 996 1,706 (710) (483) (227) Money market accounts - institutional 805 928 (123) (412) 289 CDs, $100M or more 2,730 3,593 (863) (917) 54 CDs, broker 1,417 1,364 53 (521) 574 Other time deposits 2,431 3,020 (589) (758) 169 -------------------------- Total interest-bearing deposits 8,745 11,482 (2,737) (3,608) 871 FHLB advances - long-term 133 132 1 (36) 37 Short-term borrowings 497 1,020 (523) (340) (183) Subordinated debt 205 328 (123) (121) (2) -------------------------- Total interest-bearing liabilities 9,580 12,962 (3,382) (4,058) 676 ------------------------------------------- Noninterest-bearing deposits Other liabilities Shareholders' equity Liabilities and equity Interest rate spread Net interest margin Net interest income $15,766 $16,473 $ (707) $ (984) $ 277 =========================================== 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 $16 in the first six months, 2009 and 2008, respectively. (c) Average nonaccruing loans have been excluded from total average loans and categorized in noninterest-earning assets.