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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):
January 27, 1999
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 5. Other Events.
On January 27, 1999, The Savannah Bancorp, Inc., a Georgia Corporation,
issued the following press release. The press release included the 1998
earnings announcement and five years of historical financial information
which combined and consolidated The Bryan Bancorp of Georgia, Inc. into The
Savannah Bancorp, Inc. The merger of the two was completed on December 15, 1998
and was accounted for under the pooling-of-interests accounting method.
THE SAVANNAH BANCORP
EARNINGS ANNOUNCEMENT
JANUARY 27, 1999
FOR RELEASE: IMMEDIATELY
THE SAVANNAH BANCORP REPORTS 9% INCREASE IN OPERATING NET INCOME
AND FIVE YEARS OF HISTORICAL FINANCIAL INFORMATION
The Savannah Bancorp (Nasdaq: SAVB, Savannah, Georgia), a bank holding
company for The Savannah Bank, N.A. and Bryan Bank & Trust (Richmond Hill,
Georgia), reported operating net income of $3,181,000, up 9 percent from
$2,911,000 in 1997. This represented annualized returns of 13.57 percent on
average equity and 1.30 percent on average assets for 1998. Operating earnings
were $1.15 per diluted share in 1998 compared to $1.06 in 1997, an increase of 8
percent. For the fourth quarter, operating earnings were 27 cents per diluted
share in 1998 and 1997. Fourth quarter operating net income totaled $760,000, an
increase of 4 percent from $731,000.
Operating earnings exclude $555,000 in special after-tax, nonrecurring
merger items taken during 1998 as Bryan Bancorp of Georgia was merged into The
Savannah Bancorp on December 15, 1998. Special charges include legal,
accounting, advisory and data processing contract buyout costs totaling $619,000
associated with the merger. A first quarter gain on sale of land of $57,000 has
also been excluded as a non-recurring item. Including the nonrecurring items,
net income per diluted share was 95 cents for the year and 6 cents for the
fourth quarter with net income totaling $2,626,000 million and $170,000,
respectively. The merger with Bryan Bancorp of Georgia has been accounted for
under the pooling-of-interests accounting method. The financial results for all
periods presented have been restated to show the results of the two companies as
if they had been one.
Operating net interest income growth was moderated by a lower net yield
on interest-earning assets (net interest margin) caused by falling rates and
very competitive loan pricing. Overhead expenses were higher due to two
full-service offices opening in October 1997 and September 1998 and the addition
of five new officers. Year 2000 expenses consisting of consulting, education and
implementation costs were also incurred. The Company's facilities and people are
now well-positioned to add significant asset growth with a much lower overhead
growth.
As of December 31, 1998, loans totaled $170.9 million compared with
$154.2 million at year-end 1997, an increase of 11 percent. Deposits totaled
$232.4 million and $200.4 million respectively, an increase of 16 percent. Total
assets increased 16 percent from $229.2 million to $266.4 million on December
31, 1998.
Credit quality remained strong during 1998 with net loan losses of
$175,000, or 0.11 percent of average loans. Non-performing assets totaled
$233,000 as of year-end compared to $497,000 a year earlier.
The board of directors declared a regular quarterly dividend of 10
cents per share to shareholders of record on January 29. The dividend will be
paid on February 22.
In addition to the regular quarterly financial highlights, this press
release includes five years of restated historical financial information as if
the merged companies had been one for all periods presented.
Contacts: Archie H. Davis, President & CEO 912-651-8200
Robert B. Briscoe, Chief Financial Officer, 912-651-8225
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THE SAVANNAH BANCORP, INC.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL HIGHLIGHTS
DECEMBER 31, 1998 AND 1997
Percent
BALANCE SHEET DATA Increase
AT DECEMBER 31 1998 1997 (Decrease)
- -------------------------------------------------------------------------------
(Amounts in thousands, except per share data)
Total assets $ 266,380 $ 229,172 16
Interest-earning assets 242,669 209,920 16
Loans 170,858 154,218 11
Allowance for loan losses 2,323 2,063 13
Nonperforming assets 233 497 (53)
Deposits 232,372 200,444 16
Interest-bearing liabilities 200,681 171,833 17
Shareholders' equity 24,475 22,397 9
Allowance for possible
loan losses to total loans 1.36% 1.34% 1
Equity to assets 9.19% 9.77% (6)
Tier 1 capital to risk-
weighted assets 13.06% 14.16% (8)
Book value per share $ 9.12 $ 8.48 8
Outstanding shares 2,683 2,640 2
FOR THE YEAR
NET INCOME $ 2,626 $ 2,911 (10)
Return on average assets 1.07% 1.42% (25)
Return on average equity 11.20% 13.84% (19)
NET INCOME PER SHARE:
Basic $ .99 $ 1.10 (10)
Diluted .95 1.06 (10)
DIVIDENDS PER SHARE .34 .14 143
AVERAGE SHARES:
Basic 2,661 2,640 1
Diluted 2,760 2,757 0
FOR THE FOURTH QUARTER
NET INCOME $ 170 $ 731 (77)
Return on average assets .27% 1.31% (79)
Return on average equity 2.75% 13.18% (79)
NET INCOME PER SHARE:
Basic $ .06 $ .28 (79)
Diluted $ .06 $ .27 (78)
DIVIDENDS PER SHARE $ .10 $ .04 150
AVERAGE SHARES:
Basic 2,677 2,644 1
Diluted 2,764 2,744 1
OPERATING PERFORMANCE RATIOS
EXCLUDING NON-RECURRING ITEMS (c)
FOR THE YEAR
Net income $ 3,181 $ 2,911 9
Net income per share-diluted $ 1.15 $ 1.06 8
Return on average assets 1.30% 1.42% (8)
Return on average equity 13.57% 13.84% (2)
FOR THE FOURTH QUARTER
Net income $ 760 $ 731 4
Net income per share-diluted $ .27 $ .27 0
Return on average assets 1.20% 1.31% (8)
Return on average equity 12.23% 13.18% (7)
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THE SAVANNAH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET HIGHLIGHTS
FOR THE YEARS 1994 - 1998
(dollars in thousands, except per share data)
1998 1997 1996 1995 1994
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SELECTED AVERAGE BALANCES
Total assets $245,014 $205,032 $179,806 $151,577 $126,804
Loans-net of unearned income 160,344 139,772 120,232 104,180 85,383
Securities 52,448 40,556 37,801 29,328 24,283
Other interest-earning assets 18,372 12,795 10,048 8,272 9,474
Total interest-earning assets 231,164 193,123 168,081 141,780 119,140
Interest-bearing deposits 181,976 151,478 132,870 111,547 89,565
Short-term borrowed funds 7,683 4,241 1,748 2,417 912
Total interest-bearing
liabilities 189,659 155,719 134,618 113,964 90,477
Noninterest-bearing deposits 30,137 26,550 24,416 19,761 19,562
Total deposits 212,113 178,028 157,286 131,308 109,127
Loan to deposit ratio-average 76% 79% 76% 79% 78%
Shareholders' equity 23,445 21,040 19,020 17,448 15,688
CREDIT QUALITY DATA
Nonperforming assets $ 233 $ 497 $ 82 $ 39 $ 2
Nonperforming loans 233 497 82 39 2
Net loan losses (recoveries) 175 111 79 20 (26)
Allowance for loan losses 2,323 2,063 1,695 1,489 1,252
Nonperforming assets
to total loans 0.14% 0.32% 0.06% 0.03% 0.00%
Net loan losses (recoveries)
to average loans 0.11% 0.08% 0.07% 0.02% -0.03%
Allowance for loan losses
to total loans 1.36% 1.34% 1.29% 1.32% 1.33%
Allowance for loan losses / net
loan losses 13 19 21 74 NM
SELECTED FINANCIAL DATA
AT PERIOD-END
Total assets $266,380 $229,172 $197,665 $166,885 $137,052
Interest-earning assets 242,669 209,920 177,618 156,089 128,476
Loans-net of unearned income 170,858 154,218 130,909 112,706 94,137
Deposits 232,372 200,444 174,005 143,044 118,877
Loan to deposit ratio 74% 77% 75% 79% 79%
Interest-bearing liabilities 200,681 171,833 144,851 123,149 96,381
Shareholders' equity 24,475 22,397 20,056 18,537 16,342
Shareholders' equity to
total assets 9.19% 9.77% 10.15% 11.11% 11.92%
Risk-based capital ratios:
Tier 1 capital 13.06% 14.16% 15.72% 16.04% 18.16%
Total capital 14.29% 15.40% 16.90% 17.24% 19.50%
Per share:
Book value $ 9.12 $ 8.48 $ 7.61 $ 6.98 $ 6.04
Common stock closing
price (Nasdaq) 26.00 23.38 16.33 13.33 6.67
Shares outstanding(000s) 2,683 2,640 2,635 2,657 2,706
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THE SAVANNAH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED OPERATING HIGHLIGHTS
FOR THE YEARS ENDED 1994 - 1998
SUMMARY OF OPERATIONS 1998 1997 1996 1995 1994
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(thousands, except per share data)
Interest income -
taxable equivalent $19,342 $16,803 $14,559 $12,802 $9,396
Interest expense 8,736 7,343 6,388 5,551 3,392
------- ------- ------- ------- ------
Net interest income -
taxable equivalent 10,606 9,460 8,171 7,251 6,004
Taxable equivalent adjustment (147) (136) (115) (86) (55)
------- ------- ------- ------- ------
Net interest income 10,459 9,324 8,056 7,165 5,949
Provision for loan losses 435 480 285 257 145
------- ------- ------- ------- ------
Net interest income after
provision for loan losses 10,024 8,844 7,771 6,908 5,804
------- ------- ------- ------- ------
Other operating revenue
Service charges on
deposit accounts 774 749 741 615 535
Mortgage origination fees 933 479 211 176 110
Other income (a) 594 441 250 189 107
Gains on sale of securities 3 4 - (90) (160)
------- ------- ------- ------- ------
Total other income 2,304 1,673 1,202 890 592
------- ------- ------- ------- ------
Personnel expense 4,214 3,405 2,721 2,285 1,899
Occupancy and equipment expense 1,150 966 859 659 597
Nonrecurring merger expenses (b) 619 - - - -
Other expense 2,083 1,723 1,551 1,578 1,418
------- ------- ------- ------- ------
Total other expense 8,066 6,094 5,131 4,522 3,914
------- ------- ------- ------- ------
Income before income taxes 4,262 4,423 3,842 3,276 2,482
Applicable income taxes 1,636 1,512 1,314 1,155 849
------- ------- ------- ------- ------
Net income $ 2,626 $ 2,911 $ 2,528 $ 2,121 $ 1,633
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NET INCOME PER SHARE:
Basic $0.99 $1.10 $0.96 $0.80 $0.64
Diluted $0.95 $1.06 $0.93 $0.78 $0.64
Cash dividends paid
per share(d) $0.34 $0.14 $0.08 $0.07 $0.03
Average basic shares
outstanding 2,661 2,640 2,641 2,667 2,552
Average diluted shares
outstanding 2,760 2,757 2,716 2,718 2,565
PERFORMANCE RATIOS (AVERAGES)
Net yield on interest-
earning assets 4.59% 4.90% 4.86% 5.11% 5.04%
Return on assets 1.07% 1.42% 1.41% 1.40% 1.29%
Return on equity 11.20% 13.84% 13.29% 12.16% 10.41%
Overhead ratio 63.21% 55.44% 55.42% 55.52% 58.41%
OPERATING PERFORMANCE RATIOS
EXCLUDING NONRECURRING ITEMS (C)
Net income $ 3,181 $ 2,911 $ 2,528 $ 2,121 $ 1,633
Net income per diluted share $ 1.15 $ 1.06 $ 0.93 $ 0.78 $ 0.64
Return on average assets 1.30% 1.42% 1.41% 1.40% 1.29%
Return on average equity 13.57% 13.84% 13.29% 12.16% 10.41%
Overhead ratio 58.62% 55.44% 55.42% 55.52% 58.41%
(a) 1998 includes $57M first quarter Bryan gain on the sale of land purchased
for a new Bryan office in Savannah.
(b) 1998 includes $75M non-recurring data processing buyout expense incurred
in the fourth quarter.
(c) Excludes the effects of after-tax merger expenses of $544M and after-tax
non-recurring items described in (1)and (2) of $11M in net charges.
(d) Cash dividends per common share are those of The Savannah Bancorp, Inc.
(historical)
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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: January 28, 1999
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Robert B. Briscoe
Chief Financial Officer
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