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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date if earliest event reported): December 15, 1998
Commission file number 0-18560
The Savannah Bancorp, Inc.
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(Exact name of registrant as specified in its charter)
Georgia 58-1861820
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(State or other jurisdiction of (IRS Employer
incorporation or organization) identification No.)
25 Bull Street, Savannah, GA 31401
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(Address of principal executive offices) (Zip Code)
912-651-8200
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(Registrant's telephone number, including area code)
Not Applicable
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(Former Name or Former Address, If Changed Since Last Report)
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Item 2. Acquisition or Disposition of Assets
On December 15, 1998, (the "Effective Date"), The Savannah Bancorp, Inc.
("Savannah") completed the combination with Bryan Bancorp of Georgia, Inc.
("Bryan"). The combination was accomplished by means of the merger ("the
Merger") of Bryan with and into Savannah, pursuant to the Amended and Restated
Agreement and Plan of Merger between Savannah and Bryan dated as of February 11,
1998 (the "Agreement"). In conjunction with and as a part of the Merger, each of
the shares of Bryan common stock was converted into 1.85 shares of Savannah
common stock. Immediately prior to the Effective Date, Savannah had 1,782,598
shares of common stock issued, of which 41,675 shares were held as treasury
shares; approximately 937,000 shares of Savannah common stock resulted from the
conversion of Bryan common stock; and approximately 2,678,000 shares of Savannah
common stock were issued and outstanding immediately following the Merger.
The consideration given by Savannah to Bryan stockholders in the Merger was
determined in arms-length negotiations between Savannah and Bryan. There were no
material relationships between Savannah and Bryan, or between the affiliates,
directors and officers of Savannah and their associates, on the one side, and
the affiliates, directors and officers of Bryan and their associates, on the
other side. Savannah attempted to agree upon an exchange ratio that would be
sufficiently attractive to Bryan to induce Bryan's agreement, and not be
detrimental to Savannah' existing stockholders. Savannah also took into account
the trading price of its common stock at the time it entered into the Agreement,
and other factors.
Bryan was a bank holding company based in Richmond Hill, Georgia with
assets of approximately $80 million as of September 30, 1998, with one banking
office in Richmond Hill, Georgia.
The plant, equipment, and other physical property acquired by Savannah in
the Merger is not material to Savannah consolidated financial position.
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Item 7. Financial Statements and Exhibits.
(a) Pro forma financial information. Unaudited pro forma financial
information of The Savannah Bancorp, Inc. is included as Exhibit 99.3
(b) Exhibits. The exhibits listed in the exhibit index are filed as a part
of or incorporated by reference in this current report on Form 8-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
The Savannah Bancorp, Inc. (Registrant)
By: /s/ Robert B. Briscoe Date: December 23, 1998
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Robert B. Briscoe
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
2.1 Agreement and Plan of Merger dated as of February 11, 1998 by
and between The Savannah Bancorp, Inc. and Bryan Bancorp of
Georgia, Inc., incorporated by reference from Savannah's
Registration Statement on Form S-4, No.333-60479, filed under
the Securities Act of 1933.
21.1 Bryan Bancorp of Georgia, Inc.'s Annual Report on Form 10-KSB
(as amended on Form 10-KSB/A) for the year ended December 31,
1997 incorporated by reference.
21.2 Bryan Bancorp of Georgia, Inc.'s Quarterly Report on
Form 10-QSB for the quarter ended September 30, 1998
incorporated by reference.
99.1 Press Release dated December 15, 1998.
99.2 Pro forma financial information of The Savannah Bancorp, Inc.
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EXHIBIT 99.1
[THE SAVANNAH BANCORP LETTERHEAD]
The Savannah Bancorp and Bryan Bancorp of Georgia
Complete Merger and Announce Promotions
December 15, 1998
SAVANNAH, GA --The Savannah Bancorp, Inc. ("Savannah") (NASDAQ/NMS:SAVB)
announced today that the pending merger with Bryan Bancorp of Georgia,
Inc.("Bryan") in Richmond Hill, Georgia has been completed. Five Bryan directors
were also elected to the Savannah Board. They are E. James Burnsed, L. Carlton
Gill, James Toby Roberts, Sr., James W. Royal and Robert T. Thompson, Jr.
Two promotions were made at Board meetings after the shareholders' meeting.
E. James Burnsed was elected Vice Chairman of the Savannah Board and G. Michael
Odom, Jr. was elected President of Bryan Bank & Trust. The Savannah Bank, N.A.
and Bryan Bank & Trust, subsidiaries of The Savannah Bancorp, will continue to
operate independently with their same names, management and employees, but
common ownership. No job losses or layoffs are expected.
Under the terms of the merger, Savannah will issue approximately 937,000
shares of its common stock in exchange for all of Bryan's outstanding common
stock. The exchange ratio is 1.85 shares of Savannah common stock for each share
of Bryan common stock. Approximately 2,678,000 shares will be outstanding after
the exchange of shares has been completed.
Archie H. Davis, President and Chief Executive Officer of Savannah, said,
"We are extremely pleased to welcome the Bryan shareholders into the Savannah
family. The combination of Savannah and Bryan will create an excellent banking
franchise.
E. James Burnsed, Chairman and Chief Executive Officer of Bryan added, "We
are pleased to now be a part of the Savannah family and enthusiastically look
forward to becoming a major contributor to the company's success. Savannah's
philosophy that local banking decisions need to be made at the local community
level provides the environment in which our existing line officers and staff can
continue to deliver competitive financial services at a level that exceeds our
customers' expectations."
The Savannah Bancorp, Inc. is a bank holding company providing banking
services from five offices in Savannah and one office in Richmond Hill, Georgia.
As of September 30, 1998, the pro forma combined companies had total assets of
$258 million, shareholder's equity of $23.9 million and net income of $2.456
million for the nine months then ended. On September 30, 1998, Savannah had
total assets of $179 million and Bryan had total assets of $79 million.
CONTACTS: The Savannah Bancorp, Inc., Savannah, GA
Robert B. Briscoe, CFO 912-651-8225
Bryan Bank & Trust, Richmond Hill, GA
E. James Burnsed, Chairman & CEO 912-756-4444
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EXHIBIT 99.2
PRO FORMA CONDENSED FINANCIAL DATA
(Unaudited)
The following unaudited Pro Forma Condensed Combined Balance Sheet as
of September 30, 1998, combines the historical consolidated balance sheets of
Savannah and Bryan as if the Merger had been effective on September 30, 1998,
after giving effect to certain adjustments described in the attached Notes to
Unaudited Pro Forma Condensed Financial Information.
The unaudited Pro Forma Condensed Combined Statements of Income for the
six months ended September 30, 1998, and for the years ended December 31, 1997
and 1996, present the combined results of operations of Savannah and Bryan as if
the Merger had been effective at the beginning of each period, after giving
effect to certain adjustments described in the attached Notes to Unaudited Pro
Forma Condensed Financial Data.
The unaudited Pro Forma Combined Financial Data and accompanying notes
reflect the application of the pooling-of-interests method of accounting for the
Merger. Under this method of accounting, the recorded assets, liabilities,
shareholders' equity, income and expenses of Savannah and Bryan are combined and
reflected at their historical amounts.
The pro forma earnings, which do not reflect any direct costs or
potential savings which may result from the Merger or the transaction and other
costs associated with effecting the Merger, are not necessarily indicative of
the results of future operations.
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THE SAVANNAH BANCORP, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED BALANCE SHEET
SEPTEMBER 30, 1998
(In thousands)
(Unaudited)
PRO
PRO FORMA FORMA
SAVANNAH BRYAN ADJUSTMENTS COMBINED
-------- -------- ------------ ---------
ASSETS
Cash and due from banks........... $ 6,958 $ 2,871 $ 9,829
Federal funds sold................ 8,642 10,100 18,742
Securities available for sale,
at fair value..................... 46,811 8,721 55,532
Securities held to maturity....... - 3,864 3,864
Loans............................. 113,293 52,564 165,857
Less allowance for loan losses.... (1,559) (630) (2,189)
-------- -------- ------------- --------
Net loans.................... 111,734 51,934 - 163,668
Premises and equipment, net....... 3,150 1,271 4,421
Other assets...................... 1,675 779 (2) (300) 2,154
-------- -------- ------------- --------
TOTAL ASSETS................. $178,970 $ 79,540 (300) $258,210
======== ======== ============= ========
LIABILITIES
Deposits:
Non interest-bearing.............. $ 23,234 $ 8,857 $ 32,091
Interest-bearing.................. 134,011 58,821 192,832
-------- -------- ------------- --------
Total deposits............... 157,245 67,678 - 224,923
Federal funds purchased and securities
sold under repurchase agreements.. 3,600 - 3,600
Federal Home Loan Bank advances... - 3,501 3,501
Interest Payable.................. 161 161
Other borrowings.................. - 45 45
Other liabilities................. 1,339 251 (2) 300 1,890
-------- -------- ------------- --------
TOTAL LIABILITIES............ 162,184 71,636 300 234,120
-------- -------- ------------- --------
SHAREHOLDERS' EQUITY
Common Stock...................... $ 1,783 $ 532 $ 407 $ 2,722
Contributed capital............... 8,924 5,052 (928) 13,048
Retained earnings................. 5,715 2,820 (2) (600) 7,935
Treasury stock ................... (335) (521) (3) 521 (335)
Unrealized gains (losses) on
securities available for sale,
net of tax...................... 699 21 720
-------- -------- ------------- --------
Total shareholders' equity.. 16,786 7,904 (600) 24,090
-------- -------- ------------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY......... $178,970 $ 79,540 (300) $258,210
======== ======== ============= ========
The accompanying notes are an integral part of these pro forma condensed
consolidated financial statements.
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THE SAVANNAH BANCORP, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(In thousands, except per share data)
(Unaudited)
PRO FORMA PRO FORMA
SAVANNAH BRYAN ADJUSTMENTS COMBINED
-------- --------- ----------- ---------
Interest income.................. $ 9,616 $ 4,594 $14,210
Interest expense................. 4,586 1,903 6,489
-------- --------- ---------- ---------
Net interest income.............. 5,030 2,691 7,721
Provision for loan losses........ 140 135 275
-------- --------- ---------- ---------
Net interest income after
provision for loan losses...... 4,890 2,556 7,446
-------- --------- ---------- ---------
Other income:
Service charges on deposit
accounts.................... 323 235 558
Mortgage origination fees..... 426 225 651
Other income.................. 212 200 412
-------- --------- ---------- ---------
Total other operating revenue. 961 660 1,621
Gains on sales of assets...... 1 58 59
-------- --------- ---------- ---------
Total other income......... 962 718 1,680
-------- --------- ---------- ---------
Other expense:
Salaries and employee benefits 1,986 1,048 3,034
Occupancy and equipment expense 565 244 809
Other operating expenses...... 1,024 519 1,543
-------- --------- ---------- ---------
Total other expense........ 3,575 1,811 5,386
-------- --------- ---------- ---------
Income before provision for
income taxes..................... 2,277 1,463 3,740
Provision for income taxes....... 797 487 1,284
-------- --------- ---------- ---------
Net income....................... $1,480 $ 976 $ 2,456
======== ========= ========== =========
Earnings per share
Basic........................ $ 0.86 $ 1.94 $ 0.93
======== ========= ========== =========
Diluted...................... $ 0.82 $ 1.89 $ 0.89
======== ========= ========== =========
Weighted average shares outstanding
Basic........................ 1,718 503 428 2,649
======== ========= ========== =========
Diluted...................... 1,811 516 439 2,766
======== ========= ========== =========
The accompanying notes are an integral part of these pro forma condensed
consolidated financial statements.
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THE SAVANNAH BANCORP, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1997
(In thousands, except per share data)
(Unaudited)
PRO FORMA PRO FORMA
SAVANNAH BRYAN ADJUSTMENTS COMBINED
-------- --------- ----------- ---------
Interest income.................. $11,132 $ 5,535 $ 16,667
Interest expense................. 5,084 2,259 7,343
-------- --------- ---------- ---------
Net interest income.............. 6,048 3,276 9,324
Provision for loan losses........ 300 180 480
-------- --------- ---------- ---------
Net interest income after
provision for loan losses...... 5,748 3,096 8,844
-------- --------- ---------- ---------
Other income:
Service charges on deposit
accounts.................... 404 345 749
Mortgage origination fees..... 356 123 479
Other income.................. 191 250 441
-------- --------- ---------- ---------
Total other operating revenue. 951 718 1,669
Gains on sales of securities.. 2 2 4
-------- --------- ---------- ---------
Total other income......... 953 720 1,673
-------- --------- ---------- ---------
Other expense:
Salaries and employee benefits... 2,192 1,213 3,405
Occupancy and equipment expense.. 652 314 966
Other operating expenses...... 1,172 551 1,723
-------- --------- ---------- ---------
Total other expense........ 4,016 2,078 6,094
-------- --------- ---------- ---------
Income before provision for income 2,685 1,738 4,423
taxes............................
Provision for income taxes....... 932 580 1,512
-------- --------- ---------- ---------
Net income....................... $ 1,753 $ 1,158 $ 2,911
======== ========= ========== =========
Earnings per share
Basic........................ $ 1.03 $ 2.30 $ 1.10
======== ========= ========== =========
Diluted...................... $ 0.97 $ 2.25 $ 1.06
======== ========= ========== =========
Weighted average shares outstanding
Basic........................ 1,708 504 428 2,640
======== ========= ========== =========
Diluted...................... 1,802 516 439 2,757
======== ========= ========== =========
The accompanying notes are an integral part of these pro forma condensed
consolidated financial statements.
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THE SAVANNAH BANCORP, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996
(In thousands, except per share data)
(Unaudited)
PRO FORMA PRO FORMA
SAVANNAH BRYAN ADJUSTMENTS COMBINED
-------- --------- ----------- ---------
Interest income.................. $ 9,617 $ 4,827 $14,444
Interest expense................. 4,473 1,915 6,388
-------- --------- ---------- ---------
Net interest income.............. 5,144 2,912 8,056
Provision for loan losses........ 195 90 285
-------- --------- ---------- ---------
Net interest income after
provision for loan losses...... 4,949 2,822 7,771
-------- --------- ---------- ---------
Other income:
Service charges on deposit 373 369 742
accounts....................
Mortgage origination fees..... 200 11 211
Other income.................. 81 168 249
-------- --------- ---------- ---------
Total other operating revenue. 654 548 1,202
Gains (losses) on sales of
securities.................. - - -
-------- --------- ---------- ---------
Total other income......... 654 548 1,202
-------- --------- ---------- ---------
Other expense:
Salaries and employee benefits... 1,719 1,003 2,722
Occupancy and equipment expense.. 534 324 858
Other operating expenses...... 1,037 514 1,551
-------- --------- ---------- ---------
Total other expense........ 3,290 1,841 5,131
-------- --------- ---------- ---------
Income before provision for
income taxes.................. 2,313 1,529 3,842
Provision for income taxes....... 806 508 1,314
-------- --------- ---------- ---------
Net income....................... $ 1,507 $ 1,021 $ 2,528
======== ========= ========== =========
Earnings per share
Basic........................ $ 0.89 $ 2.01 $ 0.96
======== ========= ========== =========
Diluted...................... $ 0.85 $ 1.98 $ 0.93
======== ========= ========== =========
Weighted average shares outstanding
Basic........................ 1,701 508 432 2,621
======== ========= ========== =========
Diluted...................... 1,763 515 438 2,716
======== ========= ========== =========
The accompanying notes are an integral part of these pro forma condensed
consolidated financial statements.
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Notes to the Unaudited Pro Forma
Condensed Financial Data
Note 1 -- Basis of Presentation
Savannah and Bryan entered into the Merger Agreement as of February 11,
1998. The Merger Agreement calls for a tax-free exchange of 1.85 shares of
Savannah Common Stock for each share of Bryan Common Stock.
The unaudited Pro Forma Condensed Financial Data has been prepared
assuming that the Merger will be accounted for under the pooling-of-interests
method and is based on the historical consolidated financial statements of
Savannah and Bryan.
The pro forma adjustments represent management's best estimate based on
available information at this time. Actual adjustments will differ from those
reflected in the unaudited Pro Forma Condensed Financial Data.
The unaudited Pro Forma Condensed Financial Data should be read in
conjunction with the historical consolidated financial statements and the
related notes thereto of each of Savannah and Bryan incorporated by reference
herein.
Note 2 -- Merger and Integration Costs
In connection with the Merger, Savannah and Bryan expect to incur after-tax
merger-related costs of approximately $600,000, of which approximately $550,000
comprises advisory, legal, accounting and printing costs associated with the
Merger, and estimated after-tax integration costs of approximately $50,000
relating to data processing contract termination costs with another data
processing vendor on a contract Bryan entered into in late 1997. These costs
will be expensed upon closing of the transaction. No significant capital costs
are expected. As of September 30, 1998, approximately $300,000 of the merger
costs had been paid.
Note 3 -- Shareholders' Equity
In conjunction with the Merger, Savannah exchanged 1.85 shares of Savannah
Common Stock for each outstanding share of Bryan Common Stock. Bryan had 506,508
shares of Bryan Common Stock outstanding as of September 30, 1998. In addition,
Bryan has 25,750 shares held in treasury that will be retired.
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