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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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
-------------------------------- ------------------
(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)
N/A
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(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _ Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of March 31,
2000.
2,709,814 shares of Common Stock, $1.00 par value per share
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<PAGE>
The Savannah Bancorp, Inc. and Subsidiaries
Form 10-Q Index
March 31, 2000
Page
PART I - FINANCIAL INFORMATION ----
Item 1. Financial Statements
Review Report of Independent Certified Public Accountants 2
Consolidated Balance Sheets - March 31, 2000 and 1999
and December 31, 1999 3
Consolidated Statements of Income
For the Quarter Ended March 31, 2000 and 1999 4
Consolidated Statements of Changes in Shareholders' Equity
For the Three Months Ended March 31, 2000 and 1999 5
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2000 and 1999 6
Condensed Notes to Consolidated Financial Statements 7-8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9-14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
EXHIBITS
Financial Data Schedules Exhibit 27
1
<PAGE>
Item 1. Financial Statements
Review Report of Independent Certified Public Accountants
To the Audit Committee of the
Board of Directors of
The Savannah Bancorp, Inc.
We have reviewed the accompanying condensed consolidated financial statements of
The Savannah Bancorp, Inc. and subsidiaries as of March 31, 2000, and for the
three-month period then ended. These financial statements are the responsibility
of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
/s/ BDO Seidman, LLP
Atlanta, Georgia
May 2, 2000
2
<PAGE>
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
($ in thousands, except share data) March 31, December 31, March 31,
2000 1999 1999
----------- ----------- -----------
Assets (Unaudited) (Unaudited)
Cash and due from banks $ 11,695 $ 13,004 $ 17,120
Interest-bearing deposits in bank 103 314 -
Federal funds sold 1,109 2,982 12,154
Securities available for sale, at
fair value (amortized cost of
$60,536 on 3/31/00, $59,845 on
12/31/99 and $59,604 on 3/31/99) 58,739 58,163 59,904
Loans 220,713 205,914 177,600
Less allowance for loan losses (2,924) (2,794) (2,416)
----------- ----------- -----------
Net loans 217,789 203,120 175,184
Premises and equipment, net 4,723 4,678 4,810
Other real estate owned - 45 -
Other assets 3,994 3,882 3,023
----------- ----------- -----------
Total assets $298,152 $286,098 $272,195
=========== =========== ===========
Liabilities
Deposits:
Non interest-bearing demand $ 42,400 $ 40,150 $ 39,120
Interest-bearing demand 42,227 40,186 50,929
Savings 13,311 12,213 12,624
Money market accounts 38,694 40,346 31,793
Time, $100,000 and over 41,597 38,889 36,828
Other time deposits 65,512 62,478 60,963
----------- ----------- -----------
Total deposits 243,741 234,262 232,257
Federal Home Loan Bank Advances 18,207 18,248 4,410
Securities sold under repurchase agreements 6,388 5,562 8,320
Federal funds purchased 2,264 905 578
Other liabilities 1,868 1,890 1,871
----------- ----------- -----------
Total liabilities 272,468 260,867 247,436
----------- ----------- -----------
Shareholders' Equity
Common stock, par value $1 per share:
authorized 20,000,000 shares; issued
2,719,614 shares 2,720 2,720 2,720
Preferred stock, par value $1 per share:
Authorized 10,000,000 shares,
none issued - - -
Capital surplus 13,038 13,038 13,076
Retained earnings 11,356 10,727 8,960
Treasury stock, 9,400 shares at 3/31/00,
10,675 shares at 12/31/99, and 22,175
shares at 3/31/99 (316) (210) (182)
Accumulated other comprehensive (loss)
gain (1,114) (1,044) 185
----------- ----------- -----------
Total shareholders' equity 25,684 25,231 24,759
----------- ----------- -----------
Total liabilities and shareholders'
equity $298,152 $286,098 $272,195
=========== =========== ===========
See the condensed notes to the consolidated financial statements.
3
<PAGE>
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
For the
Quarter Ended
March 31,
--------------------
($ in thousands, except share data) 2000 1999
-------- --------
Interest Income
Loans $4,844 $3,835
Investment securities:
Taxable 767 790
Non-taxable 118 99
Deposits with banks 5 1
Federal funds sold 70 139
-------- --------
Total interest income 5,804 4,864
-------- --------
Interest Expense
Deposits 2,150 1,915
Federal Home Loan Bank advances 272 66
Other borrowings 134 134
-------- --------
Total interest expense 2,556 2,115
-------- --------
Net Interest Income 3,248 2,749
Provision for loan losses 150 105
-------- --------
Net interest income after
provision for loan losses 3,098 2,644
-------- --------
Other Income
Trust Fees 65 32
Service charges on deposit accounts 290 231
Mortgage origination fees 86 194
Other income 104 95
-------- --------
Total other operating revenue 545 552
Gains on sales of securities - 5
-------- --------
Total other income 545 557
-------- --------
Other Expense
Salaries and employee benefits 1,258 1,139
Occupancy expense 165 155
Equipment expense 154 136
Other operating expenses 673 596
-------- --------
Total other expense 2,250 2,026
-------- --------
Income before provision for income taxes 1,393 1,175
Provision for income taxes 438 384
-------- --------
Net income $ 955 $ 791
======== ========
Net income per share:
Basic $0.35 $0.29
======== ========
Diluted $0.35 $0.29
======== ========
See the condensed notes to the consolidated financial statements.
4
<PAGE>
<TABLE>
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Statements of Changes in Shareholders' Equity
(Unaudited)
Accumulated
Other
Common Stock Capital Retained Treasury Comprehensive
($ in thousands, except share data) Shares Amount Surplus Earnings Stock Income Total
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1998 2,719,614 $2,720 $13,076 $8,438 ($275) $516 $24,475
Comprehensive income:
Net income 791 791
Change in unrealized losses on
securities available for sale,
net of tax (331) (331)
-------
Total comprehensive income 460
Cash dividends - $.10 per share (269) (269)
Exercise of options 93 93
-------------------------------------------------------------------------------
Balance, March 31, 1999 2,719,614 $2,720 $13,076 $8,960 ($182) $185 $24,759
===============================================================================
Balance, December 31, 1999 2,719,614 $2,720 $13,038 $10,727 ($210) ($1,044) $25,231
Comprehensive income:
Net income 955 955
Change in unrealized losses on
securities available for sale,
net of tax (70) (70)
-------
Total comprehensive income 885
Cash dividends - $.12 per share (326) (326)
Exercise of options 68 68
Purchase of treasury stock (174) (174)
-------------------------------------------------------------------------------
Balance, March 31, 2000 2,719,614 $2,720 $13,038 $11,356 ($316) ($1,114) $25,684
===============================================================================
</TABLE>
See the condensed notes to the consolidated financial statements.
5
<PAGE>
The Savannah Bancorp, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
For the For the
Three Months Ended Year Ended
($ in thousands) March 31, December 31,
------------------ ------------
Operating Activities 2000 1999 1999
-------- -------- ------------
Net income $ 955 $ 791 $ 3,533
Adjustments to reconcile net income to cash
Provided by operating activities:
Provision for loan losses 150 105 545
Depreciation of premises and equipment 146 136 584
Gains on sale or calls of investment securities - (5) (13)
Amortization of investment securities discount-
net 13 32 91
Increase in other assets (53) (62) (245)
Increase in other liabilities 7 29 81
-------- -------- ------------
Net cash provided by operating activities 1,218 1,026 4,576
-------- -------- ------------
Investing Activities
Purchases of investment securities (2,210) (5,032) (15,834)
Proceeds from sales or calls of investment
securities - - 1,008
Proceeds from maturities of investment
securities 1,508 7,265 16,765
Net increase in loans made to customers (14,819) (6,754) (35,130)
Capital expenditures (191) (119) (435)
-------- -------- -----------
Net cash used in investing activities (15,712) (4,640) (33,626)
-------- -------- -----------
Financing Activities
Net increase in demand, savings and money
market accounts 3,737 4,549 2,978
Net increase (decrease) in certificates
of deposit 5,742 (4,664) (1,088)
Net increase in securities sold under
agreements to repurchase 826 5,646 2,888
Net (decrease) increase in FHLB advances (41) (40) 13,798
Net increase in federal funds purchased 1,359 40 368
Purchase of treasury stock (174) - (207)
Dividend payments (326) (269) (1,244)
Exercise of options 68 93 234
-------- -------- -----------
Net cash provided by financing activities 11,191 5,355 17,727
-------- -------- -----------
Decrease) Increase in Cash and Cash Equivalents (3,303) 1,741 (11,323)
Cash and cash equivalents at beginning of period 16,210 27,533 27,533
-------- -------- -----------
Cash and cash equivalents at end of period $12,907 $29,274 $ 16,210
======== ======== ===========
See the condensed notes to the consolidated financial statements.
6
<PAGE>
The Savannah Bancorp, Inc. and Subsidiaries
Condensed Notes to Consolidated Financial Statements
(Unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three-month period ended March 31, 2000, are not
necessarily indicative of the results that may be expected for the year ended
December 31, 2000. For further information, refer to the consolidated financial
statements and footnotes thereto, included in the Company's annual report on
Form 10-K for the year ended December 31, 1999.
Note 2 - Shares Used in Computing Net Income Per Share
Net income per diluted share is computed using the weighted-average number of
common and dilutive common equivalent shares outstanding during the periods. The
diluted weighted-average shares outstanding were approximately 2,755,000 and
2,772,000 for the first quarters of 2000 and 1999, respectively. They included
approximately 46,000 and 83,000 common equivalent shares in 2000 and 1999,
respectively.
The Company had no amortization of merger related intangible assets and
therefore no separate earnings per share, excluding the amortization of
intangibles has been presented.
Note 3 - Forward Looking Statements
The Savannah Bancorp, Inc. (the Company) may from time to time make written or
oral "forward-looking statements," including statements contained in the
Company's filings with the Securities and Exchange Commission (including this
quarterly report on Form 10-Q and, in its reports to shareholders and in other
communications by the Company, which are made in good faith by the Company
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995.
These forward-looking statements involve risks and uncertainties, such as
statements of the Company's plans, objectives, expectations, estimates and
intentions, that are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's financial performance to differ materially from the
plans, objectives, expectations, estimates and intentions expressed in such
forward-looking statements: the strength of the United States economy in general
and the strength of the local economies in which the Company conducts
operations; the effects of, and changes in, trade, monetary and fiscal policies
7
<PAGE>
Note 3 - Forward Looking Statements (continued)
and laws, including interest rate policies of the Board of Governors of the
Federal Reserve System; inflation, interest rate, market and monetary
fluctuations; the timely development of and acceptance of new products and
services of the Company and the perceived overall value of these products and
services by customers, including the features, pricing and quality compared to
competitors' products and services; the willingness of customers to substitute
competitors' products and services for the Company's products and services; the
success of the Company in gaining regulatory approval of its products and
services, when required; the impact of changes in financial services' laws and
regulations (including laws concerning taxes, banking, securities and
insurance); technological changes; acquisitions; changes in consumer spending
and saving habits; and the success of the Company at managing the risks involved
in the foregoing.
The Company cautions that the foregoing list of important factors is not
exclusive. The Company does not undertake to update any forward-looking
statement, whether written or oral, that may be made from time to time by or on
behalf of the Company.
8
<PAGE>
Item 2. - Management's Discussion and Analysis of Financial Condition
and Results of Operations
For a comprehensive presentation of The Savannah Bancorp, Inc.'s financial
condition at March 31, 2000 and December 31, 1999 and results of operations for
the quarters ended March 31, 2000 and 1999, the following analysis should be
reviewed along with other information including the Company's December 31, 1999
Annual Report on Form 10-K.
The Savannah Bancorp, Inc. and Subsidiaries
First Quarter Financial Highlights
March 31, 2000 and 1999
(Unaudited)
Percent
Balance Sheet Data Increase
at March 31 2000 1999 (Decrease)
- --------------------------------------------------------------------------------
(thousands, except per share data)
Total assets $ 298,152 $ 272,195 10
Interest-earning assets 281,986 249,264 13
Loans 220,713 177,600 24
Allowance for loan losses 2,924 2,416 21
Nonperforming assets 556 232 140
Deposits 243,741 232,257 5
Interest-bearing liabilities 228,200 206,445 11
Shareholders' equity 25,684 24,759 4
Allowance for possible
loan losses to total loans 1.32% 1.36% -
Loan to deposit ratio 90.55% 76.47% -
Equity to assets 8.61% 9.10% -
Tier 1 capital to risk-
weighted assets 11.75% 12.88% -
Book value per share $ 9.48 $ 9.18 3
Outstanding shares 2,710 2,697 0
For the First Quarter
Net income $ 955 $ 791 21
Return on average assets 1.37% 1.22% -
Return on average equity 15.15% 13.06% -
Net interest margin 4.78% 4.61% -
Overhead ratio ** 59.32% 61.38% -
Net income per share:
Basic $ .35 $ .29 21
Diluted $ .35 $ .29 21
Average shares:
Basic 2,709 2,689 1
Diluted 2,755 2,772 (1)
** - Overhead ratio = other expense / (net interest income + other income)
9
<PAGE>
Liquidity and Interest Rate Sensitivity Management
The objectives of funds management include maintaining adequate liquidity and
reasonable harmony between the repricing of sources and uses of funds for
interest sensitive assets and liabilities. The goal of liquidity management is
to ensure the availability of adequate funds to meet the loan demand and the
deposit withdrawal needs of customers. This is achieved through maintaining a
combination of sufficient liquid assets, core deposit growth and unused capacity
to purchase funds in the money markets.
During the first quarter 2000, loans increased $14.8 million to $220.7 million,
while deposits increased $9.5 million to $243.7 million. The loan to deposit
ratio increased from 87.90% at December 31, 1999 to 90.55% at March 31, 2000.
Loan growth continues to be fueled by an excellent local economy. Developing
strategies to grow local deposits through improved marketing plans, incentives
and higher rates is a high management priority for the current year. Such
strategies might include advertising higher rate time deposits in the local
media. This has not previously been done. Identifying sources and making
arrangements with them to acquire brokered deposits and sell participations in
certain loans is a developing portion of our contingency liquidity planning.
Both subsidiary banks have a Blanket Floating Lien Agreement with the Federal
Home Loan Bank of Atlanta ("FHLB"). Under these agreements, the banks have
credit lines up to 75 percent of the book value of their 1-4 family first
mortgage loans, or approximately $23.6 million as of March 31, 2000. In
addition, the banks had approximately $18.5 million par value of investment
securities pledged as collateral at the FHLB. In aggregate, the Company had
secured borrowing capacity of approximately $42.2 million of which $18.2 million
was advanced at March 31, 2000. These credit arrangements serve as a core
funding source as well as liquidity backup for the banks. The Savannah Bank,
N.A. and Bryan Bank & Trust have credit lines approved by the FHLB of 20 percent
and 16 percent of assets, respectively, subject to the FHLB collateral
requirements. The subsidiary banks also have $20 million of federal funds
borrowing lines available from correspondent banks.
A continuing objective of asset liability management is to maintain a high level
of variable rate assets, including variable rate loans and shorter-maturity
investments, to balance increases in interest rate sensitive liabilities.
Interest sensitivity management and its effects on the net interest margin
require analyses and actions that take into consideration volumes repriced and
the timing and magnitude of their change.
The Company's liability-sensitive cash flow maturity and repricing gap at March
31, 2000, was $8.2 million within one year, or 2.9 percent of total
interest-earning assets. Fixed rate earning assets with maturities over five
years totaled 26.7 million, or 9.5 percent of total interest-earning assets. See
Table 1 for cash flow maturity and repricing gap. The maturity and repricing gap
between one and five years will adjust significantly each year through normal
loan and deposit activity. Based on the presently expected principal cash flows
and interest rates and the policies and procedures in place to monitor interest
10
<PAGE>
rate risk, management believes interest rate risk is being adequately managed
within reasonable earnings fluctuation tolerances.
The short-term liability-sensitivity position of the Company indicates that net
interest income over a one-year period will be impacted negatively when the
prime rate and deposit rates rise. Soon after the rate increases cease, net
interest income will be impacted negatively due to the continued time deposit
repricing at higher rates. The opposite is true in the event of falling rates.
The gap position after one year is of less concern because management has time
to respond to changing financial conditions with actions that reduce the impact
of the longer-term gap positions. However, fixed rate assets with maturities
over five years may include significant rate risk in the event of significant
market rate increases where the subsidiary banks have no opportunity to reprice
the earning assets.
The Company is a party to financial instruments with off-balance sheet risks in
the normal course of business to meet the financing needs of its customers. At
March 31, 2000, the Company had unfunded commitments to extend credit of $51.2
million and outstanding stand-by letters of credit of $2.8 million. Since many
of the commitments are expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash requirements. The
Company uses the same credit policies in establishing commitments and issuing
letters of credit as it does for on-balance sheet instruments. Management does
not anticipate that funding obligations arising from these financial instruments
will adversely impact its ability to fund future loan growth or deposit
withdrawals.
Financial Condition and Capital Resources
The financial condition of the Company can be assessed by examining the changes
and relationships in the sources and uses of funds as shown in the consolidated
statements of cash flows. At March 31, 2000, the investment in bank premises and
equipment totaled $4.723 million, or approximately 18 percent of equity capital.
The Company has classified all investment securities as available for sale.
During the first quarter, an increase in U.S. Treasury market rates of 25-50
basis points caused net unrealized losses on available for sale securities to
increase to $1,114 from $1,044 during the first quarter, 2000. These amounts are
included in shareholders' equity at March 31, 2000 and December 31, 1999,
respectively, in other accumulated comprehensive income.
The Company announced a stock repurchase program on October 19, 1999 for up to
50,000 shares of common stock. Through March 31, 2000, 19,700 shares had been
repurchased at an average price of $19.33 per share. Repurchased shares will be
held in the Company's treasury and will be available for resale and for general
corporate purposes.
The Company's lending and investment policies continue to emphasize high quality
growth. Management is not aware of any known trends, events or uncertainties
11
<PAGE>
that will have or that are reasonably likely to have a material effect on the
liquidity, capital resources or operations of the Company.
The Office of the Comptroller of the Currency (OCC) has adopted capital
requirements that specify the minimum level for which no prompt corrective
action is required. In addition, the FDIC adopted FDIC insurance assessment
rates based on certain "well-capitalized" risk-based and equity capital ratios.
As of March 31, 2000, the Company and the subsidiary banks exceed the minimum
requirements necessary to be classified as "well-capitalized."
Total equity capital for the Company is $25.684 million, or 8.6% of total assets
at March 31, 2000. Tier 1 Capital is 11.75% of Risk-Weighted Assets at the same
date. The strong capital and earnings ratios allow the bank to continue its
aggressive growth objectives without having to raise additional capital.
Results of Operations
FIRST QUARTER 2000 compared with FIRST QUARTER 1999
Net income for the first quarter 2000 was $955,000, up 21 percent from $791,000
in the first quarter 1999. This represented annualized returns of 15.15 percent
on average equity and 1.37 percent on average assets for the first quarter,
2000. Diluted earnings per share were $0.35 in the first quarter, 2000 compared
to $0.29 for the same period in 1999, an increase of 21 percent.
Net interest income was $3,248,000 as compared to $2,749,000 in 1999, an
increase of $499,000, or 18 percent. Average loans were $40.9 million, or 24
percent, higher in the first quarter 2000 as compared to the first quarter 1999.
The average loan to deposit ratio increased to 89.1 percent in 2000 as compared
to 78.4 percent in 1999. The prime rate increased 50 basis points to 9.00
percent during the first quarter 2000. The prime rate was 7.75 percent in the
first quarter 1999. Time deposit market rates increased between 100 and 150
basis points in the first quarter 2000 as compared to the same period in 1999.
The net yield on interest earning assets increased to 4.78 percent in 2000 from
4.61 percent in 1999 as a result of improved loan ratios and higher rates.
The provision for loan losses was $150,000 in 2000 compared to $105,000 in 1999.
Net loan charge-offs totaled $20,000 for the first quarter 2000 and $12,000 in
1999. There was $556,000 in non-performing assets at March 31, 1999 and $232,000
at March 31, 1999. The allowance for possible loan losses was 1.32 percent of
loans at March 31, 2000 and 1.36 percent at March 31, 1999.
Other income was $545,000 in 2000 compared to $557,000 in 1999. Other income
included mortgage origination fees of $86,000 and $194,000 in 2000 and 1999,
respectively. Higher loan rates caused decreases in mortgage origination volumes
and fees throughout the industry.
Other expenses were $2,250,000 in 2000 compared to $2,026,000 in 1999, an
increase of $224,000, or 11 percent. Personnel expense increased $158,000, or 16
percent in 2000.
12
<PAGE>
The provision for income taxes was $438,000 in 2000 and $384,000 in 1999. The
effective federal and state tax rates were 31.4 percent and 32.7 percent in 2000
and 1999, respectively. The decrease in the effective rate was due primarily to
higher levels of tax exempt securities. The Company has never recorded a
valuation allowance against deferred tax assets. All deferred tax assets are
considered to be realizable due to expected future taxable income.
13
<PAGE>
Table 1 - Long-Term Maturity Gap and Repricing Data
The following is the Company's long-term maturity and repricing data for the
Company as of March 31, 2000.
<TABLE>
($ in 000's) One Two Three Four Five
Year Years Years Years Years Beyond Total
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest-bearing assets
Investment securities 3,910 2,778 13,199 12,760 12,634 15,254 60,535
6.15% 6.67% 6.25% 6.23% 6.12% 6.16% 6.21%
Interest-bearing deposits 103 - - - - - 103
5.95% - - - - - 5.95%
Federal funds sold 1,109 - - - - - 1,109
5.95% - - - - - 5.95%
Loans - fixed rates 57,829 23,924 31,521 10,597 10,183 6,454 140,508
8.65% 8.80% 8.76% 8.25% 8.22% 8.49% 8.63%
Loans - variable rates 45,606 10,791 9,639 4,704 4,476 4,989 80,205
9.65% 9.76% 9.70% 9.28% 9.38% 9.49% 9.62%
------- ------- ------- ------- ------- ------- -------
Total earning assets 108,557 37,493 54,359 28,061 27,293 26,697 282,460
8.94% 8.92% 8.31% 7.51% 7.44% 7.35% 8.38%
Interest bearing deposits:
NOW and savings 5,554 5,554 5,554 5,554 5,554 27,768 * 55,538
2.34% 2.34% 2.34% 2.34% 2.34% 2.34% 2.34%
Money market accounts 3,868 3,869 3,869 3,869 3,869 19,350 * 38,694
4.21% 4.21% 4.21% 4.21% 4.21% 4.21% 4.21%
Time, $100 and over 34,628 3,031 1,511 1,416 1,011 - 41,597
5.51% 5.90% 6.67% 6.19% 6.59% - 5.63%
Other Time 49,856 7,001 4,782 2,999 874 - 65,512
5.40% 5.66% 6.28% 6.19% 5.93% - 5.53%
------- ------- ------- ------- ------- ------- -------
Total interest bearing
deposits 93,906 19,455 15,716 13,838 11,308 47,118 201,341
5.21% 4.46% 4.41% 4.09% 3.64% 3.11% 4.42%
Funds Purchased 8,652 - - - - - 8,652
6.04% - - - - - 6.04%
Federal Home Loan Bank Advances 14,164 208 211 215 1,219 2,190 18,207
6.05% 6.00% 6.00% 6.00% 6.00% 6.00% 6.03%
------- ------- ------- ------- ------- ------- -------
Total interest bearing liabilities 116,722 19,663 15,927 14,053 12,527 49,308 228,200
5.37% 4.48% 4.44% 4.12% 3.87% 3.24% 4.61%
GAP-Excess Assets (8,165) 17,830 38,432 14,008 14,766 (22,611) 54,260
------- ------- ------- ------- ------- ------- -------
GAP-Cumulative-3/31/00 (8,165) 9,665 48,097 62,105 76,871 54,260 54,260
------- ------- ------- ------- ------- ------- -------
</TABLE>
(a)- estimated cash flow runoff of 10 percent per year has been assumed.
The Company's cash flow gap is $(8,165) within one year, or 2.9 percent of total
interest-earning assets. Fixed rate earning assets with maturities over five
years total $26,697 or 9.5 percent of total interest-earning assets. The cash
flow gaps between one and five years will adjust significantly each year through
normal loan and deposit activity. Based on the principal cash flows and interest
rates presented above, and the policies and procedures in place to monitor
interest rate risk, management believes interest rate risk is being adequately
managed within reasonable earnings fluctuation tolerances of 5 percent of the
net interest income.
14
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal proceedings. None
Item 2. Changes in securities. None
Item 3. Defaults upon senior securities. None
Item 4. Submission of matters to a vote of security holders.
Annual Meeting of Shareholders Held April 18, 2000
- --------------------------------------------------
2,190,633 shares were presented in person or by proxy, or 80.97 percent of the
2,705,465 outstanding shares;
Election of Six Directors of the First Class
- --------------------------------------------
2,178,537 shares representing 99.45 percent of the shares presented, were cast
in favor of the election of directors; 12,096 shares were withheld on selected
directors.
Additional Incentive Stock Option Shares
- ----------------------------------------
2,092,743 shares, representing 95.55 percent of the shares present, were cast in
favor of the 100,000 additional shares for the Incentive Stock Option Plan; and
85,363 shares, representing 3.90 percent of the shares present were cast against
said proposal, and 12,157 shares, representing 0.55 percent of the shares
present abstained;
Ratification of Independent Accountants
- ---------------------------------------
2,128,633 shares, representing 97.19 percent of the shares present were cast in
favor of the ratification of the appointment of BDO Seidman, LLP as independent
accountants and 46,573 shares, representing 2.13 percent of the shares present
were cast against said proposal, and 15,057 shares, representing .68 percent of
the shares present abstained.
Item 5. Other information. None
Item 6. Exhibits or reports on Form 8-K.
On January 24, 2000, the Registrant filed a Form 8-K reporting the 1999 earnings
announcement that also included five years of historical financial information.
15
<PAGE>
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 thereunto duly authorized.
The Savannah Bancorp, Inc.
--------------------------
(Registrant)
Date 5/12/00 /s/Archie H. Davis
Archie H. Davis - President & CEO
Date 5/12/00 /s/Robert B. Briscoe
Robert B. Briscoe - Chief Financial Officer
16
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