SAVANNAH, Ga., July 22, 2010 (GLOBE NEWSWIRE) -- The Savannah Bancorp, Inc. (Nasdaq:SAVB) reported a net loss for the second quarter 2010 of $62,000 compared to net income of $106,000 in the second quarter 2009. Net loss per diluted share was 1 cent in the second quarter of 2010 compared to net income per diluted share of 2 cents in 2009. The quarter over quarter decline in earnings results primarily from a higher provision for loan losses. Pretax earnings before the provision for loan losses and gain/loss on sale of securities and foreclosed assets were $3,653,000 in the second quarter 2010 compared to $3,946,000 in 2009.  Other growth and performance ratios are included in the attached financial highlights.

On June 25, 2010, The Savannah Bank, N.A. ("Savannah"), the Company's largest subsidiary bank, entered into an agreement with the FDIC to purchase substantially all deposits and certain liabilities and assets of First National Bank, Savannah ("First National"). Savannah acquired approximately $42 million in assets and assumed $216 million in liabilities, including $201 million in customer deposits. The assets primarily include cash and due from accounts and investment securities. Savannah acquired the local, non-brokered deposits of approximately $105 million at a premium of 0.11 percent.  In connection with closing, Savannah received a cash payment from the FDIC totaling $174 million, based on the differential between liabilities assumed and assets acquired, taking into account the deposit premium.

Total assets increased 21 percent to $1.23 billion at June 30, 2010, up $210 million from $1.02 billion a year earlier. Loans totaled $849 million compared to $862 million one year earlier, a decrease of 1.6 percent. Deposits totaled $1.07 billion and $847 million at June 30, 2010 and 2009, respectively, an increase of 26 percent. Deposits include $195 million in deposits from the acquisition of First National. Shareholders' equity was $89.6 million at June 30, 2010 compared to $79.0 million at June 30, 2009. Shareholder's equity includes $11.2 million in net proceeds from the issuance of common stock in the second quarter 2010. The Company's total capital to risk-weighted assets ratio was 13.38 percent at June 30, 2010, which exceeds the 10 percent required by the regulatory agencies to maintain well-capitalized status.

John C. Helmken II, President and CEO, said, "Though we did report a small loss this quarter, we should not lose sight of the Company's significant second quarter events:  a successful capital raise, the acquisition of a bank through an FDIC-assisted transaction, a key executive hire and continued progress in our loan portfolio.  In addition, our net interest margin remained above 3.50 percent for a second consecutive quarter and our deposit mix continues to improve.  We enter the second half of the year well positioned for growth."

Helmken continued, "With the addition of Mike Viers to lead our Commercial Banking Group in Savannah, we expect to see growth on each side of the balance sheet.  Regardless of economic conditions, there is tremendous opportunity in our existing markets and we remain focused on soliciting core relationships for our Company.  We have the best team in the market to make that happen."

The allowance for loan losses was $18,775,000, or 2.21 percent of loans at June 30, 2010 compared to $15,597,000 or 1.81 percent of total loans a year earlier. Nonperforming assets were $48,978,000 or 3.97 percent of total assets at June 30, 2010 compared to $33,745,000 or 3.31 percent at June 30, 2009. Second quarter net charge-offs were $4,581,000 compared to net charge-offs of $2,937,000 for the same period in 2009. The provision for loan losses for the second quarter of 2010 was $3,745,000 compared to $3,225,000 for the second quarter of 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.

Net interest income was up $192,000, or 2.4 percent, in the second quarter 2010 versus the second quarter 2009. Second quarter net interest margin increased to 3.54 percent in 2010 as compared to 3.52 percent in 2009, primarily due to significantly lower deposit rates partially offset by higher levels of noninterest-earning assets.  The net interest margin decreased 10 basis points on a linked quarter basis from the 3.64 percent margin for the first quarter 2010.

Noninterest income decreased $180,000, or 9.4 percent, in the second quarter of 2010 versus the same period in 2009 due to lower mortgage related income, $256,000 lower gain on hedges, and a lower gain on the sale of securities, partially offset by $107,000, or 19 percent, higher trust and asset management fees.

Noninterest expense decreased $200,000 to $6,539,000 in the second quarter 2010 compared to the same period in 2009. Second quarter 2010 noninterest expense included $405,000, or 50 percent, of lower FDIC insurance premiums and $554,000, or 63 percent, lower loss on sale of foreclosed assets. The second quarter 2009 included the special assessment from the FDIC which accounts for most of the net decline in FDIC insurance premiums. Occupancy and equipment expense was $457,000 higher, or 101 percent, and other operating expense was $179,000 higher, or 16 percent. In the second quarter 2009, the Company purchased its previously leased Hilton Head Island branch from an outside party and reversed approximately $527,000 in accrued rent expense that was recorded in occupancy and equipment expense.

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 fourteen 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.
The Savannah Bancorp, Inc. and Subsidiaries
Second Quarter Financial Highlights
 June 30, 2010 and 2009
($ in thousands, except share data)
(Unaudited)
      %
Balance Sheet Data at June 30 2010 2009 Change
Total assets $ 1,234,8170 $ 1,019,557 21
Interest-earning assets 1,137,863 936,927 21
Loans 848,852 862,242 (1.6)
Other real estate owned 7,793 6,377 22
Deposits 1,070,445 847,037 26
Interest-bearing liabilities 1,049,175 856,041 23
Shareholders' equity 89,594 78,980 13
Loan to deposit ratio 79.30% 101.80% (22)
Equity to assets 7.26% 7.75% (6.3)
Tier 1 capital to risk-weighted assets 12.12% 10.30% 18
Total capital to risk-weighted assets 13.38% 11.55% 16
Outstanding shares 7,201 5,932 21
Book value per share $ 12.44 $13.31 (6.5)
Tangible book value per share $   12.09 $ 12.88 (6.1)
Market value per share $  9.76 $   6.65 47
       
Loan Quality Data      
Nonaccruing loans $  39,001 $  24,994 56
Loans past due 90 days – accruing 2,184 2,374 (8.0)
Net charge-offs 7,968 4,648 71
Allowance for loan losses 18,775 15,597 20
Allowance for loan losses to total loans 2.21% 1.81% 22
Nonperforming assets to total assets 3.97% 3.31% 20
       
Performance Data for the Second Quarter      
Net (loss) income $  (62) $   106 (158)
Return on average assets (0.02)% 0.04% (150)
Return on average equity (0.31)% 0.53% (158)
Net interest margin 3.56% 3.52% 1.1
Efficiency ratio 65.38% 67.46% (3.1)
Per share data:      
Net (loss) income – basic $   (0.01) $   0.02 (150)
Net (loss) income – diluted $   (0.01) $   0.02 (150)
Dividends $ 0.00 $   0.02 NM
Average shares (000s):      
Basic 6,146 5,932 3.6
Diluted 6,146 5,936 3.5
       
Performance Data for the First Six Months      
Net loss $  (550) $   (179) 207
Return on average assets (0.05)% (0.04)% 25
Return on average equity (0.69)% (0.45)% (53)
Net interest margin 3.59% 3.44% 4.4
Efficiency ratio 62.60% 67.20% (6.8)
Per share data:      
Net loss – basic $   (0.09) $   (0.03) 200
Net loss – diluted $   (0.09) $   (0.03) 200
Dividends $ 0.02 $   0.145 (86)
Average shares (000s):      
Basic 6,042 5,933 1.8
Diluted 6,042 5,936 1.8
 
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
($ in thousands, except share data)
(Unaudited)
  June 30,
  2010 2009 
Assets    
Cash and due from banks   $   19,606 $ 22,650
Federal funds sold 8,286 11,550
Interest-bearing deposits 203,611 6,209
 Cash and cash equivalents 231,503 40,409
Securities available for sale, at fair value (amortized    
 cost of $116,115 and $81,862) 117,695 83,883
Loans, net of allowance for loan losses    
 of $18,775 and $15,597 830,077 846,645
Premises and equipment, net 15,480 16,408
Other real estate owned 7,793 6,377
Bank-owned life insurance 6,206 6,326
Goodwill and other intangible assets, net 2,542 2,570
Other assets 23,521 16,939
Total assets  $ 1,234,817  $ 1,019,557
     
Liabilities    
Deposits:    
Noninterest-bearing $   89,793 $ 78,961
Interest-bearing demand 121,834 121,919
Savings 18,810 16,421
Money market 257,961 219,990
Time deposits 582,047 409,746
Total deposits 1,070,445 847,037
Short-term borrowings 19,295 49,604
Other borrowings 13,257 12,385
FHLB advances – long-term 25,661 15,666
Subordinated debt 10,310 10,310
Other liabilities 6,255 5,575
Total liabilities 1,145,223 940,577
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 48,644 38,567
Retained earnings 32,715 32,512
Treasury stock, at cost, 536 and 1,443 shares (1) (4)
Accumulated other comprehensive income, net 1,035 1,971
Total shareholders' equity 89,594 78,980
Total liabilities and shareholders' equity  $ 1,234,817  $ 1,019,557
 
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
for the Six Months and Five Quarters Ending June 30, 2010
($ in thousands, except per share data) 
 
        (Unaudited)
  For the Six Months Ended 2010 2009 Q2-10/
  June 30, % Second First Fourth  Third  Second  Q2-09
  2010 2009 Chg Quarter Quarter Quarter Quarter Quarter % Chg
Interest and dividend income                  
Loans, including fees $22,916 $23,502 (2.5) $11,298 $11,618 $11,793 $11,786 $11,856 (4.7)
Investment securities 1,113 1,799 (38) 552 561 688 932 894 (38)
Deposits with banks 30 25 20 24 6 9 11 12 100
Federal funds sold 11 4 175 3 8 6 8 2 50
 Total interest and dividend  income 24,070 25,330 (5.0) 11,877 12,193 12,496 12,737 12,764 (6.9)
Interest expense                  
Deposits 6,393 8,745 (27) 3,118 3,275 3,652 4,057 4,264 (27)
Borrowings & sub debt 796 702 13 392 404 446 354 338 16
FHLB advances 176 133 32 91 85 83 86 78 17
 Total interest expense 7,365 9,580 (23) 3,601 3,764 4,181 4,497 4,680 (23)
Net interest income 16,705 15,750 6.1 8,276 8,429 8,315 8,240 8,084 2.4
Provision for loan losses 9,065 6,945 31 3,745 5,320 2,560 3,560 3,225 16
Net interest income after the                  
 provision for loan losses 7,640 8,805 (13) 4,531 3,109 5,755 4,680 4,859 (6.8)
Noninterest income                  
Trust and asset management fees 1,311 1,158 13 678 633 613 580 571 19
Service charges on deposits 915 899 1.8 460 455 464 446 432 6.5
Mortgage related income, net 192 251 (24) 103 89 92 89 159 (35)
Other operating income 991 592 67 355 636 322 324 309 15
Gain on hedges (11) 641 (102) (11) -- 48 184 245  (104)
Gain on sale of securities 608 374 63 141 467 1,141 604 190 (26)
 Total noninterest income 4,006 3,915 2.3 1,726 2,280 2,680 2,227 1,906 (9.4)
Noninterest expense                  
Salaries and employee benefits 6,093 6,349 (4.0) 3,053 3,040 2,859 2,938 2,998 1.8
Occupancy and equipment 1,802 1,460 23 909 893 1,014 1,242 452 101
Information technology 1,014 889 14 519 495 469 452 451 15
FDIC deposit insurance 798 1,114 (28) 410 388 376 396 815 (50)
Loss on sale of foreclosed assets 859 1,049 (18) 331 528 1,269 220 885 (63)
Other operating expense 2,400 2,353 2.0 1,317 1,083 1,301 1,228 1,138 16
 Total noninterest expense 12,966 13,214 (1.9) 6,539 6,427 7,288 6,476 6,739 (3.0)
Income (loss) before income taxes (1,320) (494) 167 (282) (1,038) 1,147 431 26 NM
Income tax expense (benefit) (770) (315) 144 (220) (550) 385 85 (80) 175
Net income (loss) $ (550) $  (179) 207 $ (62) $ (488) $ 762 $ 346 $ 106 (158)
Net income (loss) per share:                  
Basic $ (0.09) $ (0.03) 200 $ (0.01) $ (0.08) $ 0.13 $ 0.06 $ 0.02 (150)
Diluted $ (0.09) $ (0.03) 200 $ (0.01) $ (0.08) $ 0.13 $ 0.06 $ 0.02 (150)
Average basic shares (000s) 6,042 5,933 1.8 6,146 5,938 5,932 5,932 5,932 3.6
Average diluted shares (000s) 6,042 5,936 1.8 6,146 5,938 5,937 5,936 5,936 3.5
Performance Ratios                  
Return on average equity (0.69)% (0.45)% (53) (0.31)% (2.50)% 3.80% 1.73% 0.53% (158)
Return on average assets (0.05)% (0.04)% (25)  (0.02)% (0.19)% 0.29% 0.13% 0.04% (150)
Net interest margin 3.59% 3.44% 4.4 3.56% 3.64% 3.47% 3.47% 3.52% 1.1
Efficiency ratio 62.60% 67.20% (6.8) 65.38% 60.01% 66.28% 61.87% 67.46% (3.1)
Average equity 79,566 80,236 (0.8) 80,110 79,016 79,459 79,302 79,606 0.6
Average assets 1,035,332 1,004,105 3.1 1,038,176 1,032,454 1,038,328 1,026,871 1,005,112 3.3
Average interest-earning assets 939,654 923,791 1.7 939,361 938,805 951,258 943,236 922,073 1.9

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, 2010, 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 $87.1 million, or 7.05 percent of total assets at June 30, 2010. 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. 

          Well-
($ in thousands) Company Savannah Bryan Minimum Capitalized
           
Qualifying Capital          
Tier 1 capital $ 96,133 $ 65,070 $ 22,866 -- --
Total capital 106,160 72,240 25,479 -- --
           
Leverage Ratios          
Tier 1 capital to average assets 9.28% 8.54% 8.97% 4.00% 5.00%
           
Risk-based Ratios          
Tier 1 capital to risk- weighted assets 12.12% 11.45% 11.05% 4.00% 6.00%
Total capital to risk- weighted assets 13.38% 12.71% 12.32% 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)
 
  2010 2009
  Second First Fourth Third Second
($ in thousands) Quarter Quarter Quarter Quarter Quarter
           
Allowance for loan losses          
Balance at beginning of period  $ 19,611  $ 17,678  $ 16,880  $ 15,597  $ 15,309
Provision for loan losses 3,745 5,320 2,560 3,560 3,225
Net charge-offs (4,581) (3,387) (1,762) (2,277) (2,937)
Balance at end of period $ 18,775 $ 19,611 $ 17,678 $ 16,880 $ 15,597
           
As a % of loans 2.21% 2.26% 2.00% 1.95% 1.81%
As a % of nonperforming loans 45.59% 53.40% 51.77% 64.92% 56.99%
As a % of nonperforming assets 38.33% 44.47% 41.62% 46.56% 46.22%
           
Net charge-offs as a % of average loans (a) 2.26% 1.63% 0.83% 1.07% 1.41%
           
Risk element assets          
Nonaccruing loans $ 39,001 $ 35,579 $ 32,545 $ 25,694 $ 24,994
Loans past due 90 days – accruing 2,184 1,146 1,570 307 2,374
Total nonperforming loans 41,185 36,725 34,115 26,001 27,368
Other real estate owned 7,793 7,374 8,329 10,252 6,377
 Total nonperforming assets $ 48,978 $ 44,099 $ 42,444 $ 36,253 $ 33,745
           
Loans past due 30-89 days $ 10,259 $ 13,740 $  5,182 $  8,122 $  6,670
           
Nonperforming loans as a % of loans 4.85% 4.23% 3.86% 3.00% 3.17%
Nonperforming assets as a % of loans          
 and other real estate owned 5.72% 5.03% 4.76% 4.13% 3.88%
Nonperforming assets as a % of assets 3.97% 4.21% 4.04% 3.48% 3.31%
           
(a) Annualized
 
The Savannah Bancorp, Inc.  and Subsidiaries
Loan Concentration Schedule
June 30, 2010 and December 31, 2009
           
($ in thousands) 6/30/10 % of Total 12/31/09 % of Total % Dollar Change
Non-residential real estate          
 Owner-occupied  $ 157,906 19  $ 137,439 16 15
 Non owner-occupied 146,937 17 159,091 18 (7.6)
 Construction 5,966 1 5,352 1 11
 Commercial land and lot development 45,289 5 47,080 5 (3.8)
Total non-residential real estate 356,098 42 348,962 40 2.0
Residential real estate          
 Owner-occupied – 1-4 family 85,003 10 95,741 11 (11)
 Non owner-occupied – 1-4 family 162,224 19 158,172 18 2.6
 Construction 25,781 3 27,061 3 (4.7)
 Residential land and lot development 76,958 9 92,346 10 (17)
 Home equity lines 56,492 7 57,527 6 (1.8)
Total residential real estate 406,458 48 430,847 48 (5.7)
Total real estate loans 762,556 90 779,809 88 (2.2)
Commercial 71,453 8 89,379 10 (20)
Consumer 15,101 2 14,971 2 0.8
Unearned fees, net (258)  -- (273)  -- (5.5)
Total loans, net of unearned fees $ 848,852 100 $ 883,886 100 (4.0)
 
The Savannah Bancorp, Inc. and Subsidiaries
Average Balance Sheet and Rate/Volume Analysis – Second Quarter, 2010 and 2009
 
          Taxable-Equivalent   (a) Variance
Average Balance Average Rate   Interest (b)   Attributable to
QTD QTD QTD QTD   QTD QTD Vari-    
6/30/10 6/30/09 6/30/10 6/30/09   6/30/10 6/30/09 ance Rate Volume
($ in thousands) (%)   ($ in thousands)   ($ in thousands)
        Assets          
$  32,915 $ 8,819 0.24 0.55 Interest-bearing deposits $  20 $ 12 $  8 $  (7) $   15
78,271 71,551 2.44 4.89 Investments - taxable 476 873 (397) (437) 40
7,595 1,467 4.33 7.38 Investments - non-taxable 82 27 55  (11) 66
7,365 4,414 0.27 0.18 Federal funds sold 5 2 3 1 2
813,215 835,822 5.57 5.69 Loans (c) 11,300 11,858 (558) (250) (308)
939,361 922,073 5.07 5.56 Total interest-earning assets 11,883 12,772 (889) (1,126) 237
98,815 83,039     Noninterest-earning assets          
$ 1,038,176 $ 1,005,112     Total assets          
                   
        Liabilities and equity          
        Deposits          
$  126,536 $ 124,691 0.37 0.49  NOW accounts 117 153 (36) (37) 1
18,015 16,425 0.40 0.71  Savings accounts 18 29 (11) (13) 2
188,443 118,787 1.57 1.76  Money market accounts 739 522 217 (56) 273
63,147 91,463 1.03 1.61  Money market accounts - institutional 162 367 (205) (132) (73)
168,090 160,127 2.36 3.48  CDs, $100M or more 988 1,391 (403) (447) 44
97,563 113,551 1.18 2.17  CDs, broker 288 613 (325)  (280) (45)
150,201 142,272 2.16 3.35  Other time deposits 807 1,189 (382) (422) 40
811,995 767,316 1.54 2.23 Total interest-bearing deposits 3,119 4,264 (1,145) (1,320) 175
34,695 45,704 3.63 2.12 Short-term/other borrowings 314 242 72 172 (100)
15,992 13,974 2.26 2.24 FHLB advances - long-term 90 78 12 1 11
10,310 10,310 2.92 3.73 Subordinated debt 75 96 (21) (21) --
        Total interest-bearing          
872,992 837,304 1.65 2.24  liabilities 3,598 4,680 (1,082) (1,232) 150
83,620 82,172     Noninterest-bearing deposits          
1,454 6,030     Other liabilities          
80,110 79,606     Shareholders' equity          
$ 1,038,176 $ 1,005,112     Liabilities and equity          
    3.42 3.32 Interest rate spread          
    3.54 3.52 Net interest margin          
        Net interest income $ 8,285 $ 8,092 $ 193 $  106 $  87  
$ 66,369 $ 84,769     Net earning assets          
$ 895,615 $ 849,488     Average deposits          
    1.40 2.01 Average cost of deposits          
91% 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 $8 in the second 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 – First Six Months, 2010 and 2009
 
          Taxable-Equivalent   (a) Variance
Average Balance Average Rate   Interest (b)   Attributable to
YTD YTD YTD YTD   YTD YTD Vari-    
6/30/10 6/30/09 6/30/10 6/30/09   6/30/10 6/30/09 ance Rate Volume
($ in thousands) (%)   ($ in thousands)   ($ in thousands)
        Assets          
$ 19,450 $ 6,331 0.31 0.80 Interest-bearing deposits $ 30 $ 25 $  5 $ (15) $ 20
77,969 74,133 2.50 4.79 Investments - taxable 965 1,761 (796) (842) 46
7,712 1,520 4.16 6.63 Investments - non-taxable 159 50 109  (19) 128
7,179 4,011 0.31 0.20 Federal funds sold 11 4 7 2 5
827,344 837,796 5.59 5.66 Loans (c) 22,921 23,506 (585) (291) (294)
939,654 923,791 5.17 5.53 Total interest-earning assets 24,086 25,346 (1,260) (1,649) 389
95,678 80,314     Noninterest-earning assets          
$ 1,035,332 $ 1,004,105     Total assets          
                   
        Liabilities and equity          
        Deposits          
$  124,688 $ 124,023 0.38 0.50  NOW accounts 235 310 (75) (74) (1)
17,742 15,750 0.44 0.72  Savings accounts 39 56 (17) (22) 5
180,672 113,038 1.58 1.78  Money market accounts 1,418 996 422 (112) 534
65,380 94,759 0.98 1.71  Money market accounts - institutional 318 805 (487) (343) (144)
164,974 152,281 2.52 3.62  CDs, $100M or more 2,064 2,730 (666) (831) 165
101,889 118,115 1.13 2.42  CDs, broker 573 1,417 (844)  (756) (88)
150,012 141,542 2.35 3.46  Other time deposits 1,746 2,431 (685) (779) 94
805,357 759,508 1.60 2.32 Total interest-bearing deposits 6,393 8,745 (2,352) (2,712) 360
38,955 53,875 3.36 1.86 Short-term/other borrowings 650 497 153 401 (248)
15,828 12,269 2.20 2.19 FHLB advances - long-term 173 133 40 1 39
10,310 10,310 2.91 4.01 Subordinated debt 149 205 (56) (56) --
        Total interest-bearing          
870,450 835,962 1.71 2.31  liabilities 7,365 9,580 (2,215) (2,487) 272
81,485 81,660     Noninterest-bearing deposits          
3,831 6,247     Other liabilities          
79,566 80,236     Shareholders' equity          
$ 1,035,332 $ 1,004,105     Liabilities and equity          
    3.46 3.22 Interest rate spread          
    3.59 3.44 Net interest margin          
        Net interest income $16,721 $ 15,766 $ 955 $ 838 $ 117
$ 69,204 $ 87,829     Net earning assets          
$ 886,842 $ 841,168     Average deposits          
    1.45 2.10 Average cost of deposits          
93% 100%     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 2010 and 2009, respectively.

(c) Average nonaccruing loans have been excluded from total average loans and categorized in noninterest-earning assets.
CONTACT:  The Savannah Bancorp, Inc.          John C. Helmken II, President and CEO            912-629-6486          Michael W. Harden, Jr., Chief Financial Officer            912-629-6496