updated 1/28/2011 9:46:26 AM ET 2011-01-28T14:46:26

SAVANNAH, Ga., Jan. 28, 2011 (GLOBE NEWSWIRE) -- The Savannah Bancorp, Inc. (Nasdaq:SAVB) reported a net loss for the fourth quarter 2010 of $1,876,000 compared to net income of $762,000 in the fourth quarter 2009. Net loss per diluted share was 26 cents in the fourth quarter of 2010 compared to net income per diluted share of 13 cents in 2009. Net loss for 2010 was $3,989,000 compared to net income of $929,000 in 2009. Net loss per diluted share was 60 cents in 2010 compared to net income per diluted share of 16 cents in 2009. The decline in 2010 earnings results primarily from a higher provision for loan losses, lower gain on sale of securities and gain on hedges, partially offset by higher net interest income. Pretax earnings before the provision for loan losses and gain/loss on sale of securities and foreclosed assets were $15,765,000 in 2010 versus $14,596,000 in 2009. Core earnings were $4,448,000 in the fourth quarter 2010 compared to $3,835,000 in 2009.

Total assets increased 1.6 percent to $1.07 billion at December 31, 2010, up $16 million from $1.05 billion a year earlier. Loans totaled $827 million compared to $884 million one year earlier, a decrease of 6.5 percent. Deposits totaled $924 million and $885 million at December 31, 2010 and 2009, respectively, an increase of 4.4 percent. Shareholders' equity was $85.8 million at December 31, 2010 compared to $79.0 million at December 31, 2009. The Company's total capital to risk-weighted assets ratio was 12.29 percent at December 31, 2010, which exceeds the 10 percent required by the regulatory agencies to maintain well-capitalized status.

John C. Helmken II, President and CEO, said, "In the fourth quarter, we had an opportunity to exit several nonperforming relationships and though the short term impact of those actions resulted in our quarterly loss, the actions allowed us to resolve several significant problem assets. While there seems to be a growing sentiment, both regionally and locally, that the economy has turned the corner, it is only appropriate that we move some of these nonperforming assets in the event the bottom that we are sensing is false. Additionally, as we have done throughout the year, our discipline of reappraising collateral and OREO again contributed to some of our changes to earnings."

The allowance for loan losses was $20,350,000, or 2.46 percent of total loans at December 31, 2010 compared to $17,678,000 or 2.00 percent of total loans a year earlier. Nonperforming assets were $49,099,000 or 4.60 percent of total assets at December 31, 2010 compared to $42,444,000 or 4.04 percent at December 31, 2009. For 2010, net charge-offs were $18,348,000 compared to $8,687,000 for 2009. The provision for loan losses was $21,020,000 in 2010 compared to $13,065,000 in 2009. The higher provision for loan losses was primarily due to real estate-related charge-offs and continued weakness in the Company's local real estate markets. Fourth quarter 2010 net charge-offs were $5,894,000 compared to net charge-offs of $1,762,000 for the same period in 2009. The provision for loan losses for the fourth quarter of 2010 was $6,725,000 compared to $2,560,000 for 2009.

Helmken continued, "Our strategic and operational direction remains sound. As stated above, our pre-tax, pre-provision earnings allow us to continue to aggressively deal with asset quality and real estate values with only a nominal impact on capital. Our capital ratios remain very strong with a leverage ratio of 8.44 percent and total capital to risk-weighted assets of 12.29 percent. Net interest income for 2010 was the highest in our Company's 20 year history. Our fourth quarter net interest income of $8.8 million is the highest recorded in the last eight quarters. Noninterest expense, which was elevated in the third quarter in part due to our acquisition of the deposits of First National Bank, is down to a more acceptable level of $6.7 million. However, there is more work to be done there and we are well into that process.

We continue to do many things well but they are overshadowed by our portfolio losses. Our branches continue to do an outstanding job of gathering low cost deposits as is evidenced by an improved deposit mix and a net interest margin that was up to 3.57 percent in the fourth quarter. Our commercial group is bringing in new loan relationships even as we reduce our concentrations of construction and development loans. Wealth management continues to shine with the strong performance of Minis & Co. and growth in the customers served by The Savannah Bank's Trust division. We continue to be in a 'do business' mode at The Savannah Bancorp."

Net interest income increased $1,262,000, or 3.9 percent, in 2010 versus 2009. The net interest margin decreased 3 basis points to 3.43 percent in 2010, while average interest-earning assets increased $44 million. Net interest income increased $518,000, or 6.2 percent, to $8,833,000 in the fourth quarter 2010 versus the fourth quarter 2009. Fourth quarter net interest margin increased to 3.57 percent in 2010 as compared to 3.47 percent in 2009, primarily because the Company continued to reduce its cost of funds in 2010. The net interest margin increased 55 basis points on a linked quarter basis from the 3.02 percent margin for the third quarter 2010. The Company received $174 million in cash when it acquired the deposits and certain assets of First National Bank, Savannah ("First National") in an FDIC-assisted transaction in June, 2010. This excess liquidity decreased the net interest margin significantly in the third quarter 2010.

Noninterest income declined $1,511,000, or 17 percent, in 2010 versus 2009. The decline was primarily due to $871,000 lower gain on hedges and $1,511,000 lower gain on sale of securities partially offset by $248,000 higher trust and asset management fees and $678,000 higher other operating income. Noninterest income decreased $913,000, or 34 percent, in the fourth quarter of 2010 versus the same period in 2009 due to a $1,123,000 lower gain on the sale of securities, partially offset by $249,000, or 77 percent, higher other operating income. In the fourth quarter 2010, the Company sold its 50 percent interest in a parking lot that resulted in a $255,000 gain included in other operating income.

Noninterest expense for 2010 was flat compared to 2009. In 2010, noninterest expense included approximately $600,000 of expenses related to the purchase of First National. Noninterest expense decreased $587,000, or 8.1 percent, to $6,701,000 in the fourth quarter 2010 compared to the same period in 2009. FDIC deposit insurance increased $72,000, or 19 percent, while loss on sale of foreclosed assets decreased $702,000, or 55 percent, to $567,000. In addition, fourth quarter 2010 noninterest expense included approximately $250,000 of expenses related to the purchase of First National. The Company closed three branches of the former First National in the fourth quarter.

The Savannah Bancorp, Inc. ("SAVB" or "Company"), a bank holding company for The Savannah Bank, N.A., Bryan Bank & Trust (Richmond Hill, Georgia), and Minis & Co., Inc., is headquartered in Savannah, Georgia and began operations in 1990. SAVB has eleven branches in Coastal Georgia and South Carolina. Its primary businesses include loan, deposit, trust, asset management, and mortgage origination services provided to local customers.

Forward-Looking Statements

This press release contains statements that constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934 as amended by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among others, statements identified by words or phrases such as "potential," "opportunity," "believe," "expect," "anticipate," "current," "intention," "estimate," "assume," "outlook," "continue," "seek," "plans," "achieve," and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "may" or similar expressions. These statements are based on the current beliefs and expectations of our management and are subject to significant risks and uncertainties. There can be no assurance that these transactions will occur or that the expected benefits associated therewith will be achieved. A number of important factors could cause actual results to differ materially from those contemplated by our forward-looking statements in this press release.  Many of these factors are beyond our ability to control or predict. These factors include, but are not limited to, those found in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise.

A printable PDF format of this entire Annual Earnings Release may be obtained from the Corporate Website at www.savb.com under the "SEC Filings and More" link and then "Latest Earnings Release". 

 
The Savannah Bancorp, Inc. and Subsidiaries
Fourth Quarter Financial Highlights
December 31, 2010 and 2009
($ in thousands, except share data)
(Unaudited)
 
Balance Sheet Data at December 31 2010 2009 Change
Total assets $ 1,066,9300 $ 1,050,508 1.6
Interest-earning assets 971,653 959,219 1.3
Loans 826,562 883,886 (6.5)
Other real estate owned 13,199 8,329 58
Deposits 923,745 884,569 4.4
Interest-bearing liabilities 881,599 883,527 (0.2)
Shareholders' equity 85,803 79,026 8.6
Loan to deposit ratio 89.48% 99.92% (10)
Equity to assets 8.04% 7.52% 6.9
Tier 1 capital to risk-weighted assets 11.02% 10.30% 7.0
Total capital to risk-weighted assets 12.29% 11.56% 6.3
Outstanding shares 7,200 5,932 21
Book value per share $ 11.92 $ 13.32 (11)
Tangible book value per share $ 11.39 $ 12.90 (12)
Market value per share $ 7.00 $ 8.00 (13)
       
Loan Quality Data
Nonaccruing loans $ 32,836 $ 32,545 0.9
Loans past due 90 days – accruing 3,064 1,570 95
Net charge-offs 18,348 8,687 111
Allowance for loan losses 20,350 17,678 15
Allowance for loan losses to total loans 2.46% 2.00% 23
Nonperforming assets to total assets 4.60% 4.04% 14
       
Performance Data for the Fourth Quarter
Net income (loss) $ (1,876) $ 762 (346)
Return on average assets (0.69)% 0.29% (338)
Return on average equity (8.43)% 3.80% (322)
Net interest margin 3.57% 3.47% 2.9
Efficiency ratio 63.22% 66.28% (4.6)
Per share data:      
Net income (loss) – basic $ (0.26) $ 0.13 (300)
Net income (loss) – diluted $ (0.26) $ 0.13 (300)
Dividends $ 0.00 $ 0.02 NM
Average shares (000s):      
Basic 7,200 5,932 21
Diluted 7,200 5,937 21
       
Performance Data for the Year
Net income (loss) $ (3,989) $ 929 (529)
Return on average assets (0.37)% 0.09% (511)
Return on average equity (4.73)% 1.16% (508)
Net interest margin 3.43% 3.46% (0.9)
Efficiency ratio 66.00% 65.60% 0.6
Per share data:      
Net income (loss) – basic $ (0.60) $ 0.16 (475)
Net income (loss) – diluted $ (0.60) $ 0.16 (475)
Dividends $ 0.02 $ 0.185 (89)
Average shares (000s):      
Basic 6,625 5,933 12
Diluted 6,625 5,936 12
 
 
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
($ in thousands, except share data)
(Unaudited)
   
  December 31,
  2010 2009
Assets    
Cash and due from banks  $ 17,990 $ 19,253
Federal funds sold 110   8,575
Interest-bearing deposits 40,836 12,707
Cash and cash equivalents 58,936 40,535
Securities available for sale, at fair value (amortized cost of $136,980 and $86,596) 138,099 87,919
Loans, net of allowance for loan losses of $20,350 and $17,678 806,212 866,208
Premises and equipment, net 15,056 15,574
Other real estate owned 13,199 8,329
Bank-owned life insurance 6,309 6,434
Goodwill and other intangible assets, net 3,786 2,498
Other assets 25,333 23,011
Total assets  $ 1,066,930  $ 1,050,508
     
Liabilities    
Deposits:    
Noninterest-bearing $ 95,725 $ 82,557
Interest-bearing demand 140,531 143,559
Savings 20,117 16,893
Money market 265,840 228,124
Time deposits 401,532 413,436
Total deposits 923,745 884,569
Short-term borrowings 17,075 39,553
Other borrowings 10,536 15,988
FHLB advances – long-term 15,658 15,664
Subordinated debt 10,310 10,310
Other liabilities 3,803 5,398
Total liabilities 981,127 971,482
     
Shareholders' equity    
Preferred stock, par value $1 per share: shares authorized 10,000,000, none issued -- --
Common stock, par value $1 per share: shares authorized 20,000,000, issued 7,201,346 and 5,933,789 7,201 5,934
Additional paid-in capital 48,634 38,605
Retained earnings 29,275 33,383
Treasury stock, at cost, 1,702 and 1,443 shares (1) (4)
Accumulated other comprehensive income, net 694 1,108
Total shareholders' equity 85,803 79,026
Total liabilities and shareholders' equity  $ 1,066,930  $ 1,050,508
 
 
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
for the Twelve Months and Five Quarters Ending December 31, 2010
($ in thousands, except per share data)
 
  (Unaudited)
  For the Twelve Months Ended 2010 2009 Q4-10 /
  December 31, % Fourth Third Second First Fourth Q4-09
  2010 2009 Chg Quarter Quarter Quarter Quarter Quarter % Chg
Interest and dividend income                  
Loans, including fees $ 45,001 $ 47,081 (4.4) $ 10,985 $ 11,100 $ 11,298 $ 11,618 $ 11,793 (6.9)
Investment securities 2,761 3,419 (19) 950 698 552 561 688 38
Deposits with banks 147 18 717 37 80 24 6 9 311
Federal funds sold 20 45 (56) -- 9 3 8 6 (100)
Total interest and dividend income 47,929 50,563 (5.2) 11,972 11,887 11,877 12,193 12,496 (4.2)
Interest expense                  
Deposits 12,460 16,454 (24) 2,731 3,336 3,118 3,275 3,652 (25)
Borrowings & sub debt 1,484 1,502 (1.2) 330 358 392 404 446 (26)
FHLB advances 418 302 38 78 164  91 85 83 (6.0)
Total interest expense 14,362 18,258 (21) 3,139 3,858 3,601 3,764 4,181 (25)
Net interest income 33,567 32,305 3.9 8,833 8,029 8,276 8,429 8,315 6.2
Provision for loan losses 21,020 13,065 61 6,725 5,230 3,745 5,320 2,560 163
Net interest income after the provision for loan losses 12,547 19,240 (35) 2,108 2,799 4,531 3,109 5,755 (63)
Noninterest income                  
Trust and asset management fees 2,599 2,351 11 651 637 678 633 613 6.2
Service charges on deposits 1,788 1,809 (1.2) 435 438 460 455 464 (6.3)
Mortgage related income, net 398 432 (7.9) 76 130 103 89 92 (17)
Other operating income 1,916 1,238 55 571 354 355 636 322 77
Gain (loss) on hedges 2 873 (100) 16 (3) (11) -- 48 (67)
Gain (loss) on sale of securities 608 2,119 (71) 18 (18) 141 467 1,141 (98)
Total noninterest income 7,311 8,822 (17) 1,767 1,538 1,726 2,280 2,680 (34)
Noninterest expense                  
Salaries and employee benefits 11,948 12,146 (1.6) 2,907 2,948 3,053 3,040 2,859 1.7
Occupancy and equipment 3,945 3,716 6.2 1,041 1,102 909 893 1,014 2.7
Information technology 2,101 1,810 16 512 575 519 495 469 9.2
FDIC deposit insurance 1,688 1,886 (10) 448 442 410 388 376 19
Loss on sale of foreclosed assets 2,472 2,566 (3.7) 567 1,046 331 528 1,269 (55)
Other operating expense 4,823 4,854 (0.6) 1,226 1,197 1,317 1,083 1,301 (5.8)
Total noninterest expense 26,977 26,978 0.0 6,701 7,310 6,539 6,427 7,288 (8.1)
Income (loss) before income taxes (7,119) 1,084 (757) (2,826) (2,973) (282) (1,038) 1,147 (346)
Income tax expense (benefit) (3,130) 155 NM (950) (1,410) (220) (550) 385 (347)
Net income (loss) $ (3,989) $ 929 (529) $ (1,876) $ (1,563) $ (62) $ (488) $ 762 (346)
Net income (loss) per share:                  
Basic $ (0.60) $ 0.16 (475) $ (0.26) $ (0.22) $ (0.01) $ (0.08) $ 0.13 (300)
Diluted $ (0.60) $ 0.16 (475) $ (0.26) $ (0.22) $ (0.01) $ (0.08) $ 0.13 (300)
Average basic shares (000s) 6,625 5,933 12 7,200   7,200  6,146  5,938 5,932 21
Average diluted shares (000s) 6,625 5,936 12 7,200 7,200 6,146 5,938 5,937 21
Performance Ratios                  
Return on average equity (4.73)%   1.16% (508) (8.43)% (6.91)% (0.31)% (2.50)% 3.80% (322)
Return on average assets (0.37)%   0.09% (511) (0.69)%  (0.54)%  (0.02)%  (0.19)% 0.29% (338)
Net interest margin 3.43% 3.46% (0.9) 3.57% 3.02% 3.54% 3.64% 3.47% 2.9
Efficiency ratio 66.00% 65.60%  0.6 63.22% 76.41% 65.38% 60.01% 66.28% (4.6)
Average equity 84,319 79,804 5.7 88,250 89,737 80,110 79,016 79,459 11
Average assets 1,078,464 1,018,470 5.9 1,086,365 1,158,455 1,038,176 1,032,454 1,038,328 4.6
Average interest-earning assets 979,436 935,617 4.7 983,548 1,057,565 939,361 938,805 951,258 3.4
                   
                   
The Savannah Bancorp, Inc. and Subsidiaries
Selected Financial Condition Highlights – Five-Year Comparison
($ in thousands, except per share data)
(Unaudited)
 
  2010 2009 2008 2007 2006
Selected Average Balances          
Assets $ 1,078,464 $ 1,018,470 $ 960,260 $ 869,026 $ 769,917
Interest-earning assets 979,436 935,617 898,295 830,900 734,470
Loans, net of unearned income 810,484 841,033 821,673 754,490 658,750
Securities 111,753 81,282 62,019 58,910 50,600
Other interest-earning assets 57,199 13,302 13,838 16,201 17,278
Interest-bearing deposits 840,077 777,763 701,045 628,310 542,375
Borrowed funds 62,140 71,967 88,553 70,939 62,255
Total interest-bearing liabilities 902,217 849,730 789,598 699,249 604,630
Noninterest-bearing deposits 86,458 82,406 83,678 91,367 96,113
Total deposits 926,535 860,169 784,723 719,677 638,488
Shareholders' equity 84,319 79,804 78,998 71,516 61,766
Loan to deposit ratio – average 87% 98% 105% 105% 103%
           
Selected Financial Data at Year-End          
Assets $ 1,066,930 $ 1,050,508 $ 1,007,284 $ 932,459 $ 843,514
Interest-earning assets 971,653 959,219 931,448 878,992 803,927
Loans, net of unearned income 826,562 883,886 864,974 808,651 720,918
Other real estate owned 13,199 8,329 8,100 2,112 545
Deposits 923,745 884,569 832,015 764,218 706,824
Interest-bearing liabilities 881,599 883,527 837,558 759,597 669,974
Shareholders' equity 85,803 79,026 80,932 76,272 66,574
Loan to deposit ratio 89% 100% 104% 106% 102%
Shareholders' equity to total assets 8.04% 7.52% 8.03% 8.18% 7.89%
Dividend payout ratio NM 118.19% 49.38% 36.73% 25.92%
Risk-based capital ratios:          
Tier 1 capital to risk-weighted assets 11.02% 10.30% 10.28% 10.49% 11.09%
Total capital to risk-weighted assets 12.29% 11.56% 11.54% 11.74% 12.34%
           
Loan Quality Data          
Nonperforming assets $ 49,099 $ 42,444 $ 35,703 $ 19,535 $ 2,776
Nonperforming loans 35,900 34,115 27,603 17,424 2,231
Net charge-offs 18,348 8,687 5,564 765 444
Allowance for loan losses 20,350 17,678 13,300 12,864 8,954
Allowance for loan losses to total loans 2.46% 2.00% 1.54% 1.59% 1.24%
Nonperforming loans to loans 4.34% 3.86% 3.19% 2.15% 0.31%
Nonperforming assets to total assets 4.60% 4.04% 3.54% 2.09% 0.33%
Net charge-offs to average loans 2.26% 1.03% 0.68% 0.01% 0.07%
           
Per Share Data at Year-End          
Book value $ 11.92 $ 13.32 $ 13.64 $ 12.88 $ 11.52
Tangible book value 11.39 12.90 13.19 12.40 11.52
Common stock closing price (Nasdaq) 7.00 8.00 8.85 17.14 27.25
Outstanding shares (000s) 7,200 5,932 5,933 5,924 5,781
           
           
The Savannah Bancorp, Inc. and Subsidiaries
Selected Operating Highlights – Five-Year Comparison
($ in thousands, except per share data)
(Unaudited)
 
 
  2010 2009 2008 2007 2006
Summary of operations          
Interest income - taxable equivalent $ 47,961 $ 50,595 $ 56,714 $ 63,414 $ 55,347
Interest expense 14,362 18,258 24,439 30,282 22,737
Net interest income - taxable equivalent 33,599 32,337 32,275 33,132 32,610
Taxable equivalent adjustment (32) (32) (32) (156) (158)
Net interest income 33,567 32,305 32,243 32,976 32,452
Provision for loan losses 21,020 13,065 6,000 4,675 1,585
Net interest income after provision for loan losses 12,547 19,240 26,243 28,301 30,867
Noninterest income          
Trust and asset management fees 2,599 2,351 2,832 1,513 658
Service charges on deposit accounts 1,788 1,809 1,881 1,383 1,526
Mortgage related income, net 398 432 295 615 886
Other operating income 1,916 1,238 1,216 1,242 1,233
Gain on hedges 2 873 1,288 -- --
Gain on sale of securities 608 2,119 163 -- --
Total noninterest income 7,311 8,822 7,675 4,753 4,303
Noninterest expense          
Salaries and employee benefits 11,948 12,146 13,584 11,846 10,852
Occupancy and equipment 3,945 3,716 3,884 3,294 2,920
FDIC deposit insurance 1,688 1,886 653 251 78
Information technology 2,101 1,810 1,633 1,616 1,525
Loss on sale of foreclosed assets 2,472 2,566 228 44 --
Other operating expense 4,823 4,854 4,760 4,132 4,578
Total noninterest expense 26,977 26,978 24,742 21,183 19,953
Income (loss) before income taxes (7,119) 1,084 9,176 11,871 15,217
Income tax expense (benefit) (3,130) 155 3,170 4,235 5,215
Net income (loss) $ (3,989) $ 929 $ 6,006 $ 7,636 $ 10,002
Net income (loss) per share:          
Basic $ (0.60) $ 0.16 $ 1.0  $ 1.31 $ 1.73
Diluted $ (0.60) $ 0.16 $ 1.01 $ 1.29 $ 1.70
Cash dividends paid per share $ 0.02 $ 0.185 $ 0.50 $ 0.48 $ 0.45
Average basic shares outstanding (000s) 6,625 5,933 5,930 5,850 5,765
Average diluted shares outstanding (000s) 6,625 5,936 5,947 5,922 5,876
           
Performance ratios          
Net interest margin 3.43% 3.46% 3.58% 3.99% 4.44%
Return on average assets (0.37)% 0.09% 0.63% 0.88% 1.30%
Return on average equity (4.73)% 1.16% 7.60% 10.68% 16.19%
Efficiency ratio 66.00% 65.60% 61.98% 56.15% 54.29%
   
   
The Savannah Bancorp, Inc. and Subsidiaries  
Selected Quarterly Data – 2010 and 2009  
($ in thousands, except per share data)  
(Unaudited)  
   
Condensed Quarterly Income Statements  
   
The following is a summary of unaudited quarterly results for 2010 and 2009:  
   
  2010 2009  
  Fourth Third Second First Fourth Third Second First  
Net interest income $ 8,833  $ 8,029 $ 8,276 $ 8,429 $ 8,315 $ 8,240 $ 8,084 $ 7,666  
Provision for loan losses 6,725 5,230 3,745 5,320 2,560 3,560 3,225 3,720  
Net interest income after provision for loan losses 2,108 2,799 4,531 3,109 5,755 4,680 4,859 3,946  
Noninterest income 1,767 1,538 1,726 2,280 2,680 2,227 1,906 2,009  
Noninterest expense 6,701 7,310 6,539 6,427 7,288 6,476 6,739 6,475  
Income (loss) before income taxes (2,826) (2,973) (282) (1,038) 1,147 431 26 (520)  
Income tax expense (benefit) (950) (1,410) (220) (550) 385 85  (80) (235)  
Net income (loss) $ (1,876) $ (1,563) $ (62) $ (488) $ 762 $ 346 $ 106 $ (285)  
                   
Per share:                  
 Net income (loss) – basic $ (0.26) $ (0.22) $ (0.01) $ (0.08) $ 0.13 $ 0.06 $ 0.02 $ (0.05)  
 Net income (loss) – diluted $ (0.26) $ (0.22) $ (0.01) $ (0.08) $ 0.13 $ 0.06 $ 0.02 $ (0.05)  
 Dividends $ 0.00 $ 0.00 $ 0.00 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.125  
Average shares (000s)                  
 Basic 7,200 7,200 6,146 5,938 5,932 5,932 5,932 5,933  
 Diluted 7,200 7,200 6,146 5,938 5,937 5,936 5,936 5,933  

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 2010 and 2009 are listed below. There were approximately 630 holders of record of Company Common Stock and, according to information available to the Company, approximately 1,150 additional shareholders in street name through brokerage accounts at December 31, 2010.

 
 
  2010 2009
Closing Market Prices Fourth Third Second First Fourth Third Second First
                   
 High $ 9.11 $ 10.05 $ 12.20 $ 11.09 $ 9.25 $ 8.50 $ 10.93 $ 10.00
 Low 6.85 8.86 9.03 7.50 7.00 6.65 6.65 6.00
 Close 7.00 9.30 9.76 10.61 8.00 8.10 6.65 7.01
 
 
The Savannah Bancorp, Inc. and Subsidiaries
Allowance for Loan Losses and Nonperforming Assets
(Unaudited)
 
  2010 2009
  Fourth Third Second First Fourth
($ in thousands) Quarter Quarter Quarter Quarter Quarter
           
Allowance for loan losses          
Balance at beginning of period  $ 19,519  $ 18,775  $ 19,611  $ 17,678  $ 16,880
Provision for loan losses 6,725 5,230 3,745 5,320 2,560
Net charge-offs (5,894) (4,486) (4,581) (3,387) (1,762)
Balance at end of period $ 20,350 $ 19,519 $ 18,775 $ 19,611 $ 17,678
           
As a % of loans 2.46% 2.34% 2.21% 2.26% 2.00%
As a % of nonperforming loans 56.69% 47.56% 45.59% 53.40% 51.77%
As a % of nonperforming assets 41.45% 38.44% 38.33% 44.47% 41.62%
           
Net charge-offs as a % of average loans (a) 2.26% 2.03% 2.26% 1.63% 0.83%
           
Risk element assets          
Nonaccruing loans $ 32,836 $ 40,837 $ 39,001 $ 35,579 $ 32,545
Loans past due 90 days – accruing 3,064 204 2,184 1,146 1,570
Total nonperforming loans 35,900 41,041 41,185 36,725 34,115
Other real estate owned 13,199 9,739 7,793 7,374 8,329
Total nonperforming assets $ 49,099 $ 50,780 $ 48,978 $ 44,099 $ 42,444
           
Loans past due 30-89 days $ 11,164 $ 10,757 $ 10,259 $ 13,740 $ 5,182
           
Nonperforming loans as a % of loans 4.34% 4.93% 4.85% 4.23% 3.86%
Nonperforming assets as a % of loans and other real estate owned 5.85% 6.03% 5.72% 5.03% 4.76%
Nonperforming assets as a % of assets 4.60% 4.63% 3.97% 4.21% 4.04%
           
(a) Annualized
The Savannah Bancorp, Inc. and Subsidiaries
Regulatory Capital Ratios
 
The banking regulatory agencies 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 table shows the capital ratios for the Company and the Subsidiary Banks at December 31, 2010 and 2009:
 
($ in thousands) Company Savannah Bryan
  2010 2009 2010 2009 2010 2009
Qualifying Capital            
Tier 1 capital $ 87,612 $ 85,420 $ 64,193 $ 60,461 $ 21,294 $ 21,672
Total capital 97,676 95,880 71,524 68,061 23,850 24,255
Leverage Ratios            
Tier 1 capital to average assets 8.12% 8.25% 7.97% 7.93% 8.20% 8.57%
Risk-based Ratios            
Tier 1 capital to risk-weighted assets 11.02% 10.30% 11.06% 10.02% 10.56% 10.57%
Total capital to risk-weighted assets 12.29% 11.56% 12.32% 11.28% 11.83% 11.83%
 
Following are the regulatory capital ratios minimum ratio and the minimum ratios to be classified as a well-capitalized holding company or bank:
     
Required Regulatory Capital Ratios:

Minimum
Well-

Capitalized
Tier 1 capital to average assets 4.00% 5.00%
Tier 1 capital to risk-weighted assets 4.00% 6.00%
Total capital to risk-weighted assets 8.00% 10.00%
 
 
Loan Concentration Schedule
           
($ in thousands) 12/31/10 % of

Total
12/31/09 % of

Total
% Dollar

Change
Non-residential real estate          
Owner-occupied  $ 122,778 15 $ 108,070 12 14
Non owner-occupied 191,255 23 188,460 22 1.5
Construction 3,157 -- 5,352 1 (41)
Commercial land and lot development 39,882 5 47,080 5 (15)
Total non-residential real estate 357,072 43 348,962 40 2.3
Residential real estate          
Owner-occupied – 1-4 family 81,293 10 95,741 11 (15)
Non owner-occupied – 1-4 family 160,426 19 158,172 18 1.4
Construction 13,502 2 27,061 3 (50)
Residential land and lot development 68,681 8 92,346 10 (26)
Home equity lines 55,917 7 57,527 6 (2.8)
Total residential real estate 379,819 46 430,847 48 (12)
Total real estate loans 736,891 89 779,809 88 (5.5)
Commercial 74,888 9 89,379 10 (16)
Consumer 15,002 2 14,971 2 --
Unearned fees, net (219)  -- (273)  -- (20)
Total loans, net of unearned fees $ 826,562 100 $ 883,886 100 (6.5)
 
 
The Savannah Bancorp, Inc. and Subsidiaries
Average Balance Sheet and Rate/Volume Analysis – Fourth Quarter, 2010 and 2009
 
          Taxable-Equivalent   (a) Variance
Average Balance Average Rate   Interest (b)   Attributable to
QTD QTD QTD QTD   QTD QTD Vari-    
12/31/10 12/31/09 12/31/10 12/31/09   12/31/10 12/31/09 ance Rate Volume
($ in thousands) (%)   ($ in thousands)   ($ in thousands)
        Assets          
$ 49,667 $ 6,732 0.30 0.53 Interest-bearing deposits $ 37 $ 9 $ 28 $ (4) $ 32
140,431 81,189 2.49 3.04 Investments - taxable 880 622 258 (113) 371
6,935 6,677 4.35 4.28 Investments - non-taxable 76 72 4  1 3
608 10,535 0.00 0.23 Federal funds sold -- 6 (6) (6) --
785,907 846,125 5.55 5.53 Loans (c) 10,987 11,795 (808) 43 (851)
983,548 951,258 4.83 5.22 Total interest-earning assets 11,980 12,504 (524) (935) 411
102,817 87,070     Noninterest-earning assets          
$ 1,086,365 $ 1,038,328     Total assets          
                   
        Liabilities and equity          
        Deposits          
$ 136,779 $ 127,193 0.34 0.40 NOW accounts 117 129 (12) (19) 7
19,308 16,563 0.29 0.50 Savings accounts 14 21 (7) (9) 2
221,039 152,898 1.38 1.67  Money market accounts 769 645 124 (112) 236
42,494 74,627 0.71 1.13 Money market accounts - institutional 76 212 (136) (79) (57)
187,098 163,595 1.79 2.89 CDs, $100M or more 845 1,193 (348) (454) 106
60,717 115,520 0.90 1.38 CDs, broker 137 402 (265)  (140) (125)
173,361 151,359 1.77 2.75 Other time deposits 773 1,050 (277) (374) 97
840,796 801,755 1.29 1.81 Total interest-bearing deposits 2,731 3,652 (921) (1,051) 130
28,788 40,162 3.43 3.66 Short-term/other borrowings 249 370 (121) (23) (98)
15,659 15,664 1.98 2.10 FHLB advances - long-term 78 83 (5) (5) --
10,310 10,310 3.12 2.92 Subordinated debt 81 76 5 5 --
895,553 867,891 1.39 1.91 Total interest-bearing liabilities 3,139 4,181 (1,042) (1,138) 96
93,178 84,320     Noninterest-bearing deposits          
9,384 6,658     Other liabilities          
88,250 79,459     Shareholders' equity          
$ 1,086,365 $ 1,038,328     Liabilities and equity          
    3.44 3.31 Interest rate spread          
    3.57 3.47 Net interest margin          
        Net interest income $ 8,841 $ 8,323 $ 518 $ 203 $ 315  
$ 87,995 $ 83,367     Net earning assets          
$ 933,974 $ 886,075     Average deposits          
    1.16 1.64 Average cost of deposits          
84% 95%     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 fourth quarter 2010 and 2009, 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 – 2010 and 2009
 
          Taxable-Equivalent   (a) Variance
Average Balance Average Rate   Interest (b)   Attributable to
YTD YTD YTD YTD   YTD YTD Vari-    
12/31/10 12/31/09 12/31/10 12/31/09   12/31/10 12/31/09 ance Rate Volume
($ in thousands) (%)   ($ in thousands)   ($ in thousands)
        Assets          
$ 50,461 $ 5,963 0.29 0.75 Interest-bearing deposits $ 147 $ 45 $ 102 $ (27) $ 129
104,367 77,844 2.35 4.20 Investments - taxable 2,456 3,273 (817) (1,440) 623
7,386 3,438 4.45 4.94 Investments - non-taxable 329 170 159  (17) 176
6,738 7,339 0.30 0.25 Federal funds sold 20 18 2 4 (2)
810,484 841,033 5.55 5.60 Loans (c) 45,009 47,089 (2,080) (421) (1,659)
979,436 935,617 4.90 5.41 Total interest-earning assets 47,961 50,595 (2,634) (4,772) 2,138
99,028 82,853     Noninterest-earning assets          
$ 1,078,464 $ 1,018,470     Total assets          
                   
        Liabilities and equity          
        Deposits          
$ 125,994 $ 123,715 0.36 0.46 NOW accounts 450 572 (122) (124) 2
18,402 16,071 0.39 0.65 Savings accounts 71 104 (33) (42) 9
199,331 131,402 1.49 1.74 Money market accounts 2,974 2,281 693 (329) 1,022
54,927 86,044 0.83 1.48 Money market accounts - institutional 456 1,272 (816) (559) (257)
185,505 157,923 2.20 3.32 CDs, $100M or more 4,081 5,239 (1,158) (1,769) 611
86,523 117,120 1.01 2.01 CDs, broker 877 2,356 (1,479) (1,171) (308)
169,395 145,488 2.10 3.18 Other time deposits 3,551 4,630 (1,079) (1,571) 492
840,077 777,763 1.48 2.12 Total interest-bearing deposits 12,460 16,454 (3,994) (4,978) 984
34,170 47,675 3.45 2.39 Short-term/other borrowings 1,178 1,140 38 505 (467)
17,660 13,982 2.37 2.16 FHLB advances - long-term 418 302 116 29 87
10,310 10,310 2.97 3.51 Subordinated debt 306 362 (56) (56) --
902,217 849,730 1.59 2.15 Total interest-bearing liabilities 14,362 18,258 (3,896) (4,758) 862
86,458 82,406     Noninterest-bearing deposits          
5,470 6,530     Other liabilities          
84,319 79,804     Shareholders' equity          
$ 1,078,464 $ 1,018,470     Liabilities and equity          
    3.31 3.26 Interest rate spread          
    3.43 3.46 Net interest margin          
        Net interest income $ 33,599 $ 32,337 $ 1,262 $ (14) $ 1,276
$ 77,219 $ 85,887     Net earning assets          
$ 926,535 $ 860,169     Average deposits          
    1.34 1.91 Average cost of deposits          
87% 98%     Average loan to deposit ratio          
 
(a) This table shows the changes in interest income and interest expense for the comparative periods based on either changes in average volume or changes in average rates for interest-earning assets and interest-bearing liabilities. Changes which are not solely due to rate changes or solely due to volume changes are attributed to volume.
(b) The taxable equivalent adjustment results from tax exempt income less non-deductible TEFRA interest expense and was $32 in 2010 and 2009, respectively.
(c) Average nonaccruing loans have been excluded from total average loans and categorized in noninterest-earning assets.
 
 
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Statements of Shareholders' Equity
For the Three Years Ended December 31, 2010
($ in thousands, except share data)
 
  December 31,
  2010 2009 2008
Common shares issued      
Shares, beginning of year 5,933,789 5,933,789 5,923,797
Common stock issued 1,267,557 -- 6,211
Exercise of options -- -- 3,781
Shares, end of year 7,201,346 5,933,789 5,933,789
Treasury shares owned      
Shares, beginning of year 1,443 318 318
Treasury stock issued (943) -- --
Unredeemed common stock 36 -- --
Unvested restricted stock 1,166 1,125 --
Shares, end of year 1,702 1,443 318
Common stock      
Balance, beginning of year $ 5,934 $ 5,934 $ 5,924
Common stock issued 1,267 -- 6
Exercise of options -- -- 4
Balance, end of year 7,201 5,934 5,934
Additional paid-in capital      
Balance, beginning of year 38,605 38,516 38,279
Common stock issued, net of issuance costs 9,980 -- 68
Stock-based compensation, net 49 89 137
Exercise of options -- -- 32
Balance, end of year 48,634 38,605 38,516
Retained earnings      
Balance, beginning of year 33,383 33,552 30,512
Net income (loss) (3,989) 929 6,006
Dividends paid (119) (1,098) (2,966)
Balance, end of year 29,275 33,383 33,552
Treasury stock      
Balance, beginning and end of year (4) (4) (4)
Treasury stock issued 3 -- --
 Balance, end of year (1) (4) (4)
Accumulated other comprehensive income (loss), net      
Balance, beginning of year 1,108 2,934 1,561
Change in unrealized gains/losses on securities available for sale, net of tax (127) (531) 842
Change in fair value and gains on termination of derivative instruments, net of tax (287) (1,295) 531
Balance, end of year 694 1,108 2,934
Total shareholders' equity $ 85,803 $ 79,026 $ 80,932
CONTACT: John C. Helmken II, President and CEO
         912-629-6486
         Michael W. Harden, Jr., Chief Financial Officer
         912-629-6496

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