SAVANNAH, Ga., Oct. 29, 2010 (GLOBE NEWSWIRE) -- The Savannah Bancorp, Inc. (Nasdaq:SAVB) reported a net loss for the third quarter 2010 of $1,563,000 compared to net income $346,000 in the third quarter of 2009. Net loss per diluted share was 22 cents in the third quarter of 2010 compared to net income per diluted share of 6 cents in 2009. The quarter over quarter decline in earnings results primarily from a higher provision for loan losses and higher loss on sale of foreclosed assets. Pretax earnings before the provision for loan losses and gain/loss on sale of securities and foreclosed assets were $3,321,000 in the third quarter 2010 compared to $3,607,000 in 2009. Other growth and performance ratios are included in the attached financial highlights.

Total assets increased 5.3 percent to $1.10 billion at September 30, 2010, up $55 million from $1.04 billion a year earlier. Loans totaled $833 million compared to $867 million one year earlier, a decrease of 3.9 percent. Deposits totaled $947 million and $881 million at September 30, 2010 and 2009, respectively, an increase of 7.4 percent. Shareholders' equity was $88.7 million at September 30, 2010 compared to $79.0 million at September 30, 2009. The Company's total capital to risk-weighted assets ratio was 12.96 percent at September 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, "In the third quarter, we spent a significant amount of time integrating our FDIC-assisted acquisition of First National Bank, Savannah and continuing to work through our Company's problem assets. While we continue to be affected by declining real estate values and appraisals, we will maintain our discipline of reappraising properties, both collateral and foreclosed assets, and adjusting the values as appropriate. Unfortunately, these actions have the short term impact of reducing earnings and creating losses.  Even so, we will proactively re-value these assets so that we recognize the inherent risk in our portfolio."

The allowance for loan losses was $19,519,000, or 2.34 percent of total loans at September 30, 2010 compared to $16,880,000 or 1.95 percent of total loans a year earlier. Nonperforming assets were $50,780,000 or 4.63 percent of total assets at September 30, 2010 compared to $36,253,000 or 3.48 percent at September 30, 2009. Third quarter net charge-offs were $4,486,000 compared to net charge-offs of $2,277,000 for the same period in 2009. The provision for loan losses for the third quarter of 2010 was $5,230,000 compared to $3,560,000 for the third 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.

Helmken continued, "The continued high level of provisioning is required as we address asset quality deterioration connected with the real estate and housing downturn.  The increased real estate activity that we saw in the second quarter, including our sales of foreclosed assets, failed to continue into the third quarter. The stabilization that we expected did not materialize and, until we see stabilization in this market, charge offs and problem assets will be higher than both historical and desired levels. Fortunately, our pre-tax, pre-provision core earnings continue to be very strong thus allowing us to continue our push to move the foreclosed assets that have been marked."

Net interest income decreased $211,000, or 2.6 percent, in the third quarter 2010 versus the third quarter 2009. Third quarter net interest margin decreased to 3.02 percent in 2010 as compared to 3.47 percent in 2009, primarily due to a higher level of interest-bearing deposits and investment securities. 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 approximately 33 basis points in the third quarter 2010. The net interest margin decreased 52 basis points on a linked quarter basis from the 3.54 percent margin for the second quarter 2010. During the third quarter 2010, the Company used its excess liquidity to reduce total deposits $139 million, primarily brokered and higher priced time deposits. The Company continues to aggressively manage the pricing on deposits and the use of wholesale funds to mitigate the amount of margin compression.

Helmken noted, "Over the last 90 days, we have been able to put some of the funds acquired through the First National transaction to work. While loan demand remains weak in our markets, we are still seeing opportunities to take relationships from our competitors.  That being said, we are not going to stretch our underwriting in order to make loans and we are not going to extend maturities unreasonably on securities in order to pick up yield in our investment portfolio."

Noninterest income decreased $689,000, or 31 percent, in the third quarter of 2010 versus the same period in 2009 due to $187,000 lower gain on hedges, and a $622,000 lower gain on the sale of securities, partially offset by $57,000, or 10 percent, higher trust and asset management fees and $41,000, or 46 percent, higher mortgage related income.

Noninterest expense increased $834,000, or 13 percent, to $7,310,000 in the third quarter 2010 compared to the same period in 2009. Loss on sale of foreclosed assets increased $826,000 to $1,046,000 and included a $447,000 loss on a single property consisting of finished commercial lots. In addition, third quarter 2010 noninterest expense included approximately $353,000 of expenses related to the purchase of First National.

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 twelve 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
Third Quarter Financial Highlights
 September 30, 2010 and 2009
($ in thousands, except share data)
(Unaudited)
       
Balance Sheet Data at September 30 2010 2009 % Change
Total assets $1,096,074 $1,041,358 5.3
Interest-earning assets 993,685 955,120 4.0
Loans 832,987 867,236 (3.9)
Other real estate owned 9,739 10,252 (5.0)
Deposits 946,628 881,111 7.4
Interest-bearing liabilities 914,860 876,293 4.4
Shareholders' equity 88,729 79,049 12
Loan to deposit ratio 88.00% 98.43% (11)
Equity to assets 8.10% 7.59% 6.7
Tier 1 capital to risk-weighted assets 11.70% 10.27% 14
Total capital to risk-weighted assets 12.96% 11.53% 12
Outstanding shares 7,200 5,932 21
Book value per share $12.32 $13.33 (7.6)
Tangible book value per share $11.70 $12.90 (9.3)
Market value per share $9.30 $8.10 15
       
Loan Quality Data      
Nonaccruing loans $40,837 $25,694 59
Loans past due 90 days – accruing 204 307 (34)
Net charge-offs 12,454 6,925 80
Allowance for loan losses 19,519 16,880 16
Allowance for loan losses to total loans 2.34% 1.95% 20
Nonperforming assets to total assets 4.63% 3.48% 33
       
Performance Data for the Third Quarter      
Net (loss) income $(1,563) $346 (552)
Return on average assets (0.54)% 0.13% (515)
Return on average equity (6.91)% 1.73% (500)
Net interest margin 3.02% 3.47% (13)
Efficiency ratio 76.41% 61.87% 24
Per share data:      
Net (loss) income – basic $(0.22) $0.06 (467)
Net (loss) income – diluted $(0.22) $0.06 (467)
Dividends $0.00 $0.02 NM
Average shares (000s):      
Basic 7,200 5,932 21
Diluted 7,200 5,936 21
       
Performance Data for the First Nine Months      
Net (loss) income $(2,113) $167 NM
Return on average assets (0.26)% 0.02% NM
Return on average equity (3.40)% 0.28% NM
Net interest margin 3.38% 3.45% (2.0)
Efficiency ratio 66.97% 65.35% 2.5
Per share data:      
Net (loss) income – basic $(0.33) $0.03 NM
Net (loss) income – diluted $(0.33) $0.03 NM
Dividends $0.02 $0.165 (88)
Average shares (000s):      
Basic 6,432 5,933 8.4
Diluted 6,432 5,936 8.4

 
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
($ in thousands, except share data)
(Unaudited)
  September 30,
  2010  2009 
Assets    
Cash and due from banks  $   18,063 $ 22,519
Federal funds sold 315  16,627
Interest-bearing deposits 50,794 3,847
 Cash and cash equivalents 69,172 42,993
Securities available for sale, at fair value (amortized cost of $150,425 and $92,834) 153,221 94,990
Loans, net of allowance for loan losses of $19,519 and $16,880 813,468 850,625
Premises and equipment, net 15,351 15,862
Other real estate owned 9,739 10,252
Bank-owned life insurance 6,253 6,375
Goodwill and other intangible assets, net 4,498 2,534
Other assets 24,372 17,727
Total assets  $ 1,096,074  $ 1,041,358
     
Liabilities    
Deposits:    
Noninterest-bearing $   86,921 $ 80,781
Interest-bearing demand 122,962 116,376
Savings 18,950 16,314
Money market 258,914 227,744
Time deposits 458,881 439,896
Total deposits 946,628 881,111
Short-term borrowings 17,177 31,988
Other borrowings 12,006 18,000
FHLB advances – long-term 15,660 15,665
Subordinated debt 10,310 10,310
Other liabilities 5,564 5,235
Total liabilities 1,007,345 962,309
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 48,630 38,584
Retained earnings 31,151 32,740
Treasury stock, at cost, 1,702 and 1,443 shares (1) (4)
Accumulated other comprehensive income, net 1,748 1,795
Total shareholders' equity 88,729 79,049
Total liabilities and shareholders' equity  $ 1,096,074  $ 1,041,358

 
The Savannah Bancorp, Inc. and Subsidiaries Consolidated Statements of Income for the Nine Months and Five Quarters Ending September 30, 2010 ($ in thousands, except per share data)  
         
   (Unaudited)      
  For the Nine Months Ended 2010 2009 Q3-10/Q3-09  
  September  30, % Third Second First  Fourth Third    
  2010 2009 Chg Quarter Quarter Quarter Quarter Quarter % Chg
Interest and dividend income                  
Loans, including fees $34,016 $35,288 (3.6) $11,100 $11,298 $11,618 $11,793 $11,786 (5.8)
Investment securities 1,811 2,731 (34) 698 552 561 688 932 (25)
Deposits with banks 110 36 206 80 24 6 9 11 627
Federal funds sold 20 12 67 9 3 8 6 8 13
 Total interest and dividend  income 35,957 38,067 (5.5) 11,887 11,877 12,193 12,496 12,737 (6.7)
Interest expense                  
Deposits 9,729 12,802 (24) 3,336 3,118 3,275 3,652 4,057 (18)
Borrowings & sub debt 1,159 1,056 9.8 363 392 404 446 354 2.5
FHLB advances 335 219 53 159 91 85 83 86 85
 Total interest expense 11,223 14,077 (20) 3,858 3,601 3,764 4,181 4,497 (14)
Net interest income 24,734 23,990 3.1 8,029 8,276 8,429 8,315 8,240 (2.6)
Provision for loan losses 14,295 10,505 36 5,230 3,745 5,320 2,560 3,560 47
Net interest income after the provision for loan losses 10,439 13,485 (23) 2,799 4,531 3,109 5,755 4,680 (40)
Noninterest income                  
Trust and asset management fees 1,948 1,738 12 637 678 633 613 580 10
Service charges on deposits 1,353 1,345 0.6 438 460 455 464 446 (1.8)
Mortgage related income, net 322 340 (5.3) 130 103 89 92 89 46
Other operating income 1,345 916 47 354 355 636 322 324 9.3
Gain (loss) on hedges (14) 825 (102) (3) (11) -- 48 184 (102)
Gain (loss) on sale of securities 590 978 (40) (18) 141 467 1,141 604 (103)
 Total noninterest income 5,544 6,142 (9.7) 1,538 1,726 2,280 2,680 2,227 (31)
Noninterest expense                  
Salaries and employee benefits 9,041 9,287 (2.6) 2,948 3,053 3,040 2,859 2,938 0.3
Occupancy and equipment 2,904 2,702 7.5 1,102 909 893 1,014 1,242 (11)
Information technology 1,589 1,341 18 575 519 495 469 452 27
FDIC deposit insurance 1,240 1,510 (18) 442 410 388 376 396 12
Loss on sale of foreclosed assets 1,905 1,269 50 1,046 331 528 1,269 220 375
Other operating expense 3,597 3,581 0.4 1,197 1,317 1,083 1,301 1,228 (2.5)
 Total noninterest expense 20,276 19,690 3.0 7,310 6,539 6,427 7,288 6,476 13
Income (loss) before income taxes (4,293) (63) NM (2,973) (282) (1,038) 1,147 431 (790)
Income tax expense (benefit) (2,180) (230) 848 (1,410) (220) (550) 385 85 NM
Net income (loss) $ (2,113) $   167 NM $ (1,563) $ (62) $ (488) $ 762 $ 346 (552)
Net income (loss) per share:                  
Basic $  (0.33) $  0.03 NM $ (0.22) $ (0.01) $ (0.08) $ 0.13 $ 0.06 (467)
Diluted $ (0.33) $  0.03 NM $ (0.22) $ (0.01) $ (0.08) $ 0.13 $ 0.06 (467)
Average basic shares (000s) 6,432 5,933 8.4 7,200 6,146 5,938 5,932 5,932 21
Average diluted shares (000s) 6,432 5,936 8.4 7,200 6,146 5,938 5,937 5,936 21
Performance Ratios                  
Return on average equity (3.40)% 0.28% NM (6.91)% (0.31)% (2.50)% 3.80% 1.73% (499)
Return on average assets (0.26)% 0.02% NM (0.54)% (0.02)% (0.19)% 0.29% 0.13% (515)
Net interest margin 3.38% 3.45% (2.0) 3.02% 3.54% 3.64% 3.47% 3.47% (13)
Efficiency ratio 66.97% 65.35% 2.5 76.41% 65.38% 60.01% 66.28% 61.87% 24
Average equity 82,994 79,921 3.8 89,737 80,110 79,016 79,459 79,302 13
Average assets 1,076,823 1,011,778 6.4 1,158,455 1,038,176 1,032,454 1,038,328 1,026,871 13
Average interest-earning assets 979,389 930,345 5.3 1,057,565 939,361 938,805 951,258 943,236 12

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 September 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 $84.2 million, or 7.70 percent of total assets at September 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. 

($ in thousands) Company Savannah Bryan Minimum Well-Capitalized
           
Qualifying Capital          
Tier 1 capital $ 92,483 $ 64,439 $ 22,612 -- --
Total capital 102,484 71,644 25,178 -- --
           
Leverage Ratios          
Tier 1 capital to average assets 8.01% 7.27% 8.83% 4.00% 5.00%
           
Risk-based Ratios          
Tier 1 capital to risk-weighted assets 11.70% 11.23% 11.16% 4.00% 6.00%
Total capital to risk-weighted assets 12.96% 12.50% 12.42% 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)
 
  2010 2009
  Third Second First Fourth Third
($ in thousands) Quarter Quarter Quarter Quarter Quarter
           
Allowance for loan losses          
Balance at beginning of period  $ 18,775  $ 19,611  $ 17,678  $ 16,880  $ 15,597
Provision for loan losses 5,230 3,745 5,320 2,560 3,560
Net charge-offs (4,486) (4,581) (3,387) (1,762) (2,277)
Balance at end of period $ 19,519 $ 18,775 $ 19,611 $ 17,678 $ 16,880
           
As a % of loans 2.34% 2.21% 2.26% 2.00% 1.95%
As a % of nonperforming loans 47.56% 45.59% 53.40% 51.77% 64.92%
As a % of nonperforming assets 38.44% 38.33% 44.47% 41.62% 46.56%
           
Net charge-offs as a % of average loans (a) 2.03% 2.26% 1.63% 0.83% 1.07%
           
Risk element assets          
Nonaccruing loans $ 40,837 $ 39,001 $ 35,579 $ 32,545 $ 25,694
Loans past due 90 days – accruing 204 2,184 1,146 1,570 307
Total nonperforming loans 41,041 41,185 36,725 34,115 26,001
Other real estate owned 9,739 7,793 7,374 8,329 10,252
 Total nonperforming assets $ 50,780 $ 48,978 $ 44,099 $ 42,444 $ 36,253
           
Loans past due 30-89 days $ 10,757 $ 10,259 $ 13,740 $  5,182 $  8,122
           
Nonperforming loans as a % of loans 4.93% 4.85% 4.23% 3.86% 3.00%
Nonperforming assets as a % of loans and other real estate owned 6.03% 5.72% 5.03% 4.76% 4.13%
Nonperforming assets as a % of assets 4.63% 3.97% 4.21% 4.04% 3.48%
           
(a) Annualized
 

 
The Savannah Bancorp, Inc. and Subsidiaries
Loan Concentration Schedule
September 30, 2010 and December 31, 2009
           
($ in thousands) 9/30/10 % of Total 12/31/09 % of Total % Dollar  Change
Non-residential real estate          
 Owner-occupied  $ 162,454 20  $ 137,439 16 18
 Non owner-occupied 150,408 18 159,091 18 (5.5)
 Construction 2,219 -- 5,352 1 (59)
 Commercial land and lot development 44,951 5 47,080 5 (4.5)
Total non-residential real estate 360,032 43 348,962 40 3.2
Residential real estate          
 Owner-occupied – 1-4 family 80,935 10 95,741 11 (16)
 Non owner-occupied – 1-4 family 158,269 19 158,172 18 0.1
 Construction 18,271 2 27,061 3 (32)
 Residential land and lot development 71,525 8 92,346 10 (23)
 Home equity lines 55,818 7 57,527 6 (3.0)
Total residential real estate 384,818 46 430,847 48 (11)
Total real estate loans 744,850 89 779,809 88 (4.5)
Commercial 73,391 9 89,379 10 (18)
Consumer 14,968 2 14,971 2 --
Unearned fees, net (222)  -- (273)  -- (19)
Total loans, net of unearned fees $ 832,987 100 $ 883,886 100 (5.8)
               
The Savannah Bancorp, Inc. and Subsidiaries Average Balance Sheet and Rate/Volume Analysis – Third Quarter, 2010 and 2009              
          Taxable-Equivalent   (a) Variance
Average Balance Average Rate   Interest (b)   Attributable to
QTD 9/30/10 QTD 9/30/09 QTD 9/30/10 QTD 9/30/09   QTD 9/30/10 QTD 9/30/09 Variance Rate Volume
($ in thousands) (%)   ($ in thousands)   ($ in thousands)
        Assets          
$ 112,297 $ 4,471 0.27 0.98 Interest-bearing deposits $ 76 $ 11 $  65 $  (8) $   73
124,212 81,799 2.00 4.31 Investments - taxable 627 888 (261) (476) 215
7,198 3,976 4.46 5.09 Investments - non-taxable 81 51 30  (6) 36
12,002 10,692 0.30 0.30 Federal funds sold 9 8 1 -- 1
801,856 842,298 5.49 5.55 Loans (c) 11,102 11,787 (685) (127) (558)
1,057,565 943,236 4.46 5.36 Total interest-earning assets 11,895 12,745 (850) (2,140) 1,290
100,890 83,635     Noninterest-earning assets          
$ 1,158,455 $ 1,026,871     Total assets          
                   
        Liabilities and equity          
        Deposits          
$  117,817 $ 119,632 0.33 0.44  NOW accounts 97 133 (36) (33) (3)
18,803 16,210 0.40 0.64  Savings accounts 19 26 (7) (10) 3
214,413 146,032 1.48 1.72  Money market accounts 799 634 165 (88) 253
46,794 80,315 0.76 1.26  Money market accounts - institutional 90 256 (166) (101) (65)
223,286 163,351 2.02 3.23  CDs, $100M or more 1,137 1,330 (193) (498) 305
82,062 116,761 0.94 1.77  CDs, broker 194 522 (328)  (244) (84)
203,029 147,381 1.95 3.11  Other time deposits 1,000 1,156 (156) (431) 275
906,204 789,682 1.46 2.04 Total interest-bearing deposits 3,336 4,057 (721) (1,154) 433
30,133 42,998 3.65 2.51 Short-term/other borrowings 277 272 5 124 (119)
23,269 15,665 2.80 2.18 FHLB advances - long-term 164 86 78 24 54
10,310 10,310 3.12 3.16 Subordinated debt 81 82 (1) (1) --
        Total interest-bearing          
969,916 858,655 1.58 2.08  liabilities 3,858 4,497 (639) (1,082) 443
90,516 81,960     Noninterest-bearing deposits          
8,286 6,954     Other liabilities          
89,737 79,302     Shareholders' equity          
$ 1,158,455 $ 1,026,871     Liabilities and equity          
    2.88 3.28 Interest rate spread          
    3.02 3.47 Net interest margin          
        Net interest income $ 8,037 $ 8,248 $ (211) $ (1,058) $  847  
$ 87,649 $ 84,581     Net earning assets          
$ 996,720 $ 871,642     Average deposits          
    1.33 1.85 Average cost of deposits          
80% 97%     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 third 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 Nine Months, 2010 and 2009              
               
          Taxable-Equivalent   (a) Variance
Average Balance Average Rate   Interest (b)   Attributable to
YTD 9/30/10 YTD 9/30/09 YTD 9/30/10 YTD 9/30/09   YTD 9/30/10 YTD 9/30/09 Variance Rate Volume
($ in thousands) (%)   ($ in thousands)   ($ in thousands)
        Assets          
$ 50,740 $ 5,073 0.29 0.84 Interest-bearing deposits $ 110 $ 36 $   74 $ (23) $ 97
93,552 76,717 2.25 4.62 Investments - taxable 1,576 2,651 (1,075) (1,360) 285
7,539 2,348 4.49 5.58 Investments - non-taxable 253 98 155  (19) 174
8,805 6,263 0.30 0.26 Federal funds sold 20 12 8 2 6
818,753 839,314 5.56 5.62 Loans (c) 34,022 35,294 (1,272) (377) (895)
979,389 930,345 4.91 5.47 Total interest-earning assets 35,981 38,091 (2,110) (3,897) 1,787
97,434 81,433     Noninterest-earning assets          
$ 1,076,823 $ 1,011,778     Total assets          
                   
        Liabilities and equity          
        Deposits          
$  122,372 $ 122,543 0.36 0.48  NOW accounts 332 442 (110) (110) --
18,100 15,905 0.43 0.70  Savings accounts 58 83 (25) (32) 7
192,043 124,157 1.54 1.76  Money market accounts 2,214 1,631 583 (204) 787
59,116 89,891 0.86 1.58  Money market accounts - institutional 380 1,060 (680) (484) (196)
184,625 156,011 2.34 3.48  CDs, $100M or more 3,236 4,058 (822) (1,330) 508
95,208 117,660 1.04 2.20  CDs, broker 739 1,939 (1,200) (1,021) (179)
167,879 143,510 2.21 3.34  Other time deposits 2,770 3,589 (819) (1,213) 394
839,343 769,677 1.55 2.22 Total interest-bearing deposits 9,729 12,802 (3,073) (3,857) 784
35,983 50,209 3.43 2.05 Short-term/other borrowings 924 769 155 518 (363)
18,335 13,413 2.48 2.18 FHLB advances - long-term 340 219 121 30 91
10,310 10,310 2.98 3.72 Subordinated debt 230 287 (57) (57) --
        Total interest-bearing          
903,971 843,609 1.66 2.23  liabilities 11,223 14,077 (2,854) (3,597) 743
84,527 81,760     Noninterest-bearing deposits          
5,331 6,488     Other liabilities          
82,994 79,921     Shareholders' equity          
$ 1,076,823 $ 1,011,778     Liabilities and equity          
    3.25 3.24 Interest rate spread          
    3.38 3.45 Net interest margin          
        Net interest income $24,758 $24,014 $ 744 $ (300) $ 1,044
$ 75,418 $ 86,736     Net earning assets          
$ 923,870 $ 851,437     Average deposits          
    1.41 2.01 Average cost of deposits          
89% 99%     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 $24 in the first nine 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