Savannah Bancorp Reports First Quarter Loss of $285,000 and Reduces Quarterly Dividend


SAVANNAH, Ga., April 21, 2009 (GLOBE NEWSWIRE) -- The Savannah Bancorp, Inc. (Nasdaq:SAVB) reported a net loss for the first quarter 2009 of $285,000 compared to net income of $1,704,000 in the first quarter 2008. Net loss per diluted share was 5 cents in 2009 compared to net income of 29 cents per diluted share in the first quarter of 2008. The decline in first quarter earnings results primarily from a higher provision for loan losses and a lower net interest margin in 2009 as compared to 2008. Pretax earnings before the provision for loan losses and gain/loss on sale of securities and OREO were $3,180,000 in the first quarter 2009 compared to $3,685,000 in 2008. Other growth and performance ratios are included in the attached financial highlights and information.

During the first quarter 2009 the Company's two largest subsidiaries, The Savannah Bank, N.A. ("Savannah") and Bryan Bank & Trust ("Bryan"), continued to be profitable. Savannah and Bryan account for approximately 91 percent of the Company's total assets and loans.

Total assets increased 5.7 percent to $1 billion at March 31, 2009, up $54 million from $946 million a year earlier. Loans totaled $865 million compared to $835 million one year earlier, an increase of 3.6 percent. Deposits totaled $843 million and $771 million at March 31, 2009 and 2008, respectively, an increase of 9.2 percent. Shareholders' equity increased 1.3 percent to $80 million at March 31, 2009 from $79 million at March 31, 2008. The Company's total capital to risk-weighted assets ratio was 11.52 percent, well in excess of the 10 percent required by the regulatory agencies to maintain well-capitalized status.

John Helmken, President and CEO, said, "Many of the highlights of the first quarter of 2009 -- higher net interest margin compared to the prior quarter, significant deposit growth, reduced exposure to construction and development loans and the streamlining of support functions -- will likely be overshadowed by our first quarterly loss in many years. While we are disappointed by the effect on earnings, our aggressive recognition of charge-offs and impairments and provisioning for potential future losses is more than appropriate in such uncertain economic times. We have not yet seen a stabilization in real estate values, therefore we have pushed our allowance for loan losses up to 1.77 percent of loans at quarter-end, even though our nonperforming loans declined slightly during the quarter."

The allowance for loan losses was $15,309,000, or 1.77 percent of loans at March 31, 2009 compared to $12,128,000 or 1.45 percent of total loans a year earlier. Nonperforming assets were $32,537,000 or 3.73 percent of total loans and other real estate owned at March 31, 2009 compared to $19,536,000 or 2.33 percent at March 31, 2008. At December 31, 2008, nonperforming assets were $35,707,000 or 4.09 percent of loans and other real estate owned. First quarter net charge-offs were $1,711,000 compared to net charge-offs of $1,806,000 in the same period in 2008. The provision for loan losses for the first quarter of 2009 was $3,720,000 compared to $1,070,000 for the first quarter of 2008. The higher provision for loan losses was primarily due to continued weakness in the Company's local real estate markets. In particular, the Hilton Head Island/Bluffton residential market has continued to experience price declines.

Net interest income was down $405,000, or 5.0 percent, in the first quarter 2009 versus the first quarter 2008. First quarter net interest margin declined to 3.36 percent in 2009 as compared to 3.70 percent in 2008 primarily due to lower loan market rates, competitive local deposit pricing and higher levels of noninterest-earning assets. The prime rate declined 200 basis points from 5.25 percent to 3.25 percent over the one year period ended March 31, 2009. On a linked quarter basis, the first quarter 2009 net interest margin increased 12 basis points from the 3.24 percent margin for the fourth quarter 2008.

Noninterest income increased $245,000, or 14 percent in the first quarter of 2009 versus the same period in 2008 due to higher service charges on deposits and mortgage related income, a higher gain on hedges of $112,000 and a gain on the sale of securities of $184,000 partially offset by lower trust and asset management fees.

Noninterest expense increased to $6,475,000, up $324,000 or 5.3 percent, in the first quarter 2009 compared to the first quarter 2008. First quarter 2009 noninterest expense included $139,000 of higher FDIC insurance premiums and a loss on sale of OREO of $164,000. The remainder of the increase was due to higher occupancy and equipment and information technology expense partially offset by lower salaries and employee benefits.

Today, the Board of Directors approved a quarterly cash dividend of 2 cents per share payable on May 18, 2009 to shareholders of record on May 1, 2009.

Helmken added, "We have a strong capital and liquidity position and, more importantly, a strong and growing customer base, all of which aids us now and as we look toward the future. Given the importance of the preservation of capital in the current environment and the challenges of the current credit cycle, we lowered the cash dividend to 2 cents per share from 12.5 cents per share for the same period last year. The lower dividend will preserve over $600,000 of capital per quarter for our Company and give us additional 'dry powder' beyond our already well-capitalized status. This additional capital will also allow us to take advantage of any opportunities that may arise as we move through this cycle. This reduction was a difficult decision as we are fully aware of how important the dividend is to our shareholders, but we believe this will protect the long-term interests of our shareholders. The Board also reduced director's fees for the Company and all subsidiaries."

In April 2009 the Company filed an application with the appropriate regulatory agencies to consolidate Harbourside with Savannah under a national commercial bank charter. The Company expects to realize operational efficiencies and cost savings by consolidating these charters.

The Savannah Bancorp, Inc. ("SAVB"), a bank holding company for The Savannah Bank, N.A., Bryan Bank & Trust (Richmond Hill, Georgia), Harbourside Community Bank (Hilton Head Island, SC) and Minis & Co., Inc., is headquartered in Savannah, Georgia and began operations in 1990. 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.

Attachments



              The Savannah Bancorp, Inc. and Subsidiaries
                  First Quarter Financial Highlights
                        March 31, 2009 and 2008
                  ($ in thousands, except share data)
                              (Unaudited)
                                                                 %
 Balance Sheet Data at March 31              2009      2008   Change
 --------------------------------------------------------------------
 Total assets                            $999,900  $945,637       5.7
 Interest-earning assets                  920,205   866,483       6.2
 Loans                                    864,926   834,734       3.6
 Other real estate owned                    8,342     2,025       312
 Deposits                                 842,519   771,263       9.2
 Interest-bearing liabilities             830,087   771,824       7.5
 Shareholders' equity                      79,644    78,885       1.0
 Loan to deposit ratio                     102.66%   108.23%     (5.1)
 Equity to assets                            7.97%     8.34%     (4.4)
 Tier 1 capital to risk-weighted assets     10.26%    10.29%     (0.3)
 Total capital to risk-weighted assets      11.52%    11.54%     (0.2)
 Outstanding shares                         5,932     5,931       0.0
 Book value per share                    $  13.42  $  13.30       0.9
 Tangible book value per share           $  12.98  $  12.84       1.1
 Market value per share                  $   7.01  $  17.50       (60)

 Loan Quality Data
 --------------------------------------------------------------------
 Nonaccruing loans                       $ 23,927  $ 16,915        41
 Loans past due 90 days - accruing            268       596       (55)
 Net charge-offs                            1,711     1,806      (5.3)
 Allowance for loan losses                 15,309    12,128        26
 Allowance for loan losses to total
  loans                                      1.77%     1.45%       22
 Nonperforming assets to total loans and
  other real estate owned                    3.73%     2.33%       60

 Performance Data for the First Quarter
 --------------------------------------------------------------------
 Net (loss) income                       $  (285)  $  1,704        NM
 Return on average assets                  (0.12)%      .73%       NM
 Return on average equity                  (1.43)%     8.76%       NM
 Net interest margin                         3.36%     3.70%     (9.2)
 Efficiency ratio                           66.93%    62.54%      7.0

 Per share data:
 Net (loss) income - basic               $  (0.05) $   0.29        NM
 Net (loss) income - diluted             $  (0.05) $   0.29        NM
 Dividends                               $  0.125  $  0.125       0.0

 Average shares (000s):
 Basic                                      5,933     5,928       0.1
 Diluted                                    5,937     5,951      (0.2)

              The Savannah Bancorp, Inc. and Subsidiaries
                      Consolidated Balance Sheets
                        March 31, 2009 and 2008
                  ($ in thousands, except share data)
                              (Unaudited)

                                                          March 31,
 --------------------------------------------------------------------
                                                       2009      2008
 --------------------------------------------------------------------
 Assets
 Cash and due from banks                           $ 23,180  $ 14,816
 Federal funds sold                                     565     4,998
 Interest-bearing deposits                            6,460     2,344
 --------------------------------------------------------------------
    Cash and cash equivalents                        30,205    22,158
 Securities available for sale, at fair value
  (amortized cost of $72,131 and $60,529)            74,589    62,367
 Loans held for sale                                     49       793
 Loans, net of allowance for loan losses
    of $15,309 and $12,128                          849,617   822,606
 Premises and equipment, net                         10,946     8,237
 Other real estate owned                              8,342     2,025
 Bank-owned life insurance                            6,271     6,044
 Goodwill and other intangible assets, net            2,606     2,750
 Other assets                                        17,275    18,657
 --------------------------------------------------------------------
       Total assets                                $999,900  $945,637
 ====================================================================

 Liabilities
 Deposits:
    Noninterest-bearing                            $ 84,739  $ 86,329
    Interest-bearing demand                         116,804   117,854
    Savings                                          16,219    16,060
    Money market                                    204,711   208,531
    Time deposits                                   420,046   342,489
 --------------------------------------------------------------------
       Total deposits                               842,519   771,263
 Short-term borrowings                               51,830    64,685
 FHLB advances - long-term                           10,167    11,895
 Subordinated debt                                   10,310    10,310
 Other liabilities                                    5,430     8,599
 --------------------------------------------------------------------
       Total liabilities                            920,256   866,752
 --------------------------------------------------------------------
 Shareholders' equity
 Preferred stock, par value $1 per share:
  authorized 10,000,000 shares, none issued              --        --
 Common stock, par value $1 per share: authorized
  20,000,000 shares; issued 5,933,789 and
  5,931,008 shares                                    5,934     5,931
 Additional paid-in capital                          38,540    38,327
 Retained earnings                                   32,525    31,474
 Treasury stock, 1,443 and 318 shares                   (4)       (4)
 Accumulated other comprehensive income, net          2,649     3,157
 --------------------------------------------------------------------
       Total shareholders' equity                    79,644    78,885
 --------------------------------------------------------------------
       Total liabilities and shareholders' equity  $999,900  $945,637
 ====================================================================

              The Savannah Bancorp, Inc. and Subsidiaries
                 Consolidated Statements of Operations
 For the Three Months and Five Quarters Ending March 31, 2009 and 2008
                ($ in thousands, except per share data)
 ---------------------------------------------------------------------
                                               (Unaudited)
 ---------------------------------------------------------------------
                                           For the Three Months Ended
 ---------------------------------------------------------------------
                                                  March 31,
                                         ----------------------    %
                                               2009        2008   Chg
 --------------------------------------------------------------------
 Interest and dividend income
 Loans, including fees                      $11,643     $14,211   (18)
 Loans held for sale                              3          12   (75)
 Investment securities                          905         782    16
 Deposits with banks                             13          67   (81)
 Federal funds sold                               2          53   (96)
 --------------------------------------------------------------
   Total interest and dividend income        12,566      15,125   (17)
 --------------------------------------------------------------
 Interest expense
 Deposits                                     4,481       6,124   (27)
 Short-term borrowings & sub debt               364         881   (59)
 FHLB advances                                   55          49    12
 --------------------------------------------------------------
   Total interest expense                     4,900       7,054   (31)
 --------------------------------------------------------------
 Net interest income                          7,666       8,071  (5.0)
 Provision for loan losses                    3,720       1,070   248
 --------------------------------------------------------------
 Net interest income after the
  provision for loan losses                   3,946       7,001   (44)
 --------------------------------------------------------------
 Noninterest income
 Trust and asset management fees                587         724   (19)
 Service charges on deposits                    467         387    21
 Mortgage related income, net                    92          63    46
 Other operating income                         283         306  (7.5)
 Gain on hedges                                 396         284    39
 Gain on sale of securities                     184          --    NM
 --------------------------------------------------------------
   Total noninterest income                   2,009       1,764    14
 --------------------------------------------------------------
 Noninterest expense
 Salaries and employee benefits               3,351       3,473  (3.5)
 Occupancy and equipment                      1,008         889    13
 Information technology                         438         393    11
 Loss (gain) on sale of OREO                    164           1    NM
 Other operating expense                      1,514       1,395   8.5
 --------------------------------------------------------------
   Total noninterest expense                  6,475       6,151   5.3
 --------------------------------------------------------------
 Income (loss) before income taxes             (520)      2,614    NM
 Income tax (benefit) expense                  (235)        910    NM
 --------------------------------------------------------------
 Net (loss) income                            $(285)     $1,704    NM
 ==============================================================
 Net (loss) income per share:
   Basic                                     $(0.05)      $0.29    NM
 ==============================================================
   Diluted                                   $(0.05)      $0.29    NM
 ==============================================================
 Average basic shares (000s)                  5,933       5,928   0.1
 Average diluted shares (000s)                5,937       5,951  (0.2)

 Performance Ratios
 Return on average equity                    (1.43)%       8.76%   NM
 Return on average assets                    (0.12)%       0.73%   NM
 Net interest margin                           3.36%       3.70% (9.2)
 Efficiency ratio                             66.93%      62.54%  7.0
 Average equity                              80,873      78,210   3.4
 Average assets                           1,003,068     934,756   7.3
 Average interest-earning assets            925,531     876,022   5.7


 --------------------------------------------------------------------
                                      (Unaudited)
 --------------------------------------------------------------------
                  2009                    2008                  Q1-09/
                 First    Fourth     Third    Second     First  Q1-08
               Quarter   Quarter   Quarter   Quarter   Quarter  % Chg
 --------------------------------------------------------------------

 Interest
  and
  dividend
  income
 Loans,
  including
  fees         $11,643   $12,268   $13,333   $13,447   $14,211   (18)
 Loans held
  for sale           3         8        20        20        12   (75)
 Investment
  securities       905       817       722       760       782    16
 Deposits
  with banks        13        18        30        34        67   (81)
 Federal
  funds sold         2        16        31        33        53   (96)
 -------------------------------------------------------------
   Total
    interest
    and
    dividend
    income      12,566    13,127    14,136    14,294    15,125   (17)
 -------------------------------------------------------------
 Interest
  expense
 Deposits        4,481     4,969     5,391     5,358     6,124   (27)
 Short-term
  borrowings
  & sub debt       364       543       412       467       881   (59)
 FHLB
  advances          55        80        82        83        49    12
 -------------------------------------------------------------
   Total
    interest
    expense      4,900     5,592     5,885     5,908     7,054   (31)
 -------------------------------------------------------------
 Net
  interest
  income         7,666     7,535     8,251     8,386     8,071  (5.0)
 Provision
  for loan
  losses         3,720     2,270     1,505     1,155     1,070   248
 -------------------------------------------------------------
 Net
  interest
  income
  after the
  provision
  for loan
  losses         3,946     5,265     6,746     7,231     7,001   (44)
 -------------------------------------------------------------
 Noninterest
  income
 Trust and
  asset
  management
  fees             587       675       713       720       724   (19)
 Service
  charges on
  deposits         467       447       513       534       387    21
 Mortgage
  related
  income, net       92        60        86        86        63    46
 Other
  operating
  income           283       314       296       300       306  (7.5)
 Gain on
  hedges           396       574       430        --       284    39
 Gain on
  sale of
  securities       184        29        --       134        --    NM
 -------------------------------------------------------------
   Total
    non-
    interest
    income       2,009     2,099     2,038     1,774     1,764    14
 -------------------------------------------------------------
 Noninterest
  expense
 Salaries
  and
  employee
  benefits       3,351     3,095     3,479     3,489     3,473  (3.5)
 Occupancy
  and
  equipment      1,008     1,118       967       910       889    13
 Information
  technology       438       421       424       395       393    11
 Loss (gain)
  on sale of
  OREO             164       141        17      (17)         1    NM
 Other
  operating
  expense        1,514     1,431     1,364     1,357     1,395   8.5
 -------------------------------------------------------------
   Total
    non-
    interest
    expense      6,475     6,206     6,251     6,134     6,151   5.3
 -------------------------------------------------------------
 Income
  (loss)
  before
  income
  taxes           (520)    1,158     2,533     2,871     2,614    NM
 Income tax
  (benefit)
  expense         (235)      380       895       985       910    NM
 -------------------------------------------------------------
 Net (loss)
  income         $(285)     $778    $1,638    $1,886    $1,704    NM
 =============================================================
 Net (loss)
  income per
  share:
   Basic        $(0.05)    $0.13     $0.28     $0.32     $0.29    NM
 =============================================================
   Diluted      $(0.05)    $0.13     $0.28     $0.32     $0.29    NM
 =============================================================
 Average
  basic
  shares
  (000s)         5,933     5,933     5,930     5,931     5,928   0.1
 Average
  diluted
  shares
  (000s)         5,937     5,942     5,943     5,952     5,951  (0.2)

 Performance
  Ratios
 Return on
  average
  equity        (1.43)%     3.86%     8.24%     9.65%     8.76%   NM
 Return on
  average
  assets        (0.12)%     0.31%     0.68%     0.80%     0.73%   NM
 Net interest
  margin          3.36%     3.24%     3.63%     3.77%     3.70% (9.2)
 Efficiency
  ratio          66.93%    64.42%    60.75%    60.37%    62.54%  7.0
 Average
  equity        80,873    80,138    79,035    78,596    78,210   3.4
 Average
  assets     1,003,068   991,368   964,762   949,937   934,756   7.3
 Average
  interest-
  earning
  assets       925,531   922,642   901,992   892,397   876,022   5.7

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 March 31, 2009, 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 $77.0 million, or 7.70 percent of total assets at March 31, 2009. 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                                                       Well-
 thousands) Company  Savannah  Bryan  Harbourside Minimum Capitalized
 --------------------------------------------------------------------

 Qualifying
  Capital
 ----------
 Tier 1
  capital   $84,389  $54,395  $20,780   $   5,227      --          --
 Total
  capital    94,730   61,309   23,270       5,967      --          --

 Leverage
  Ratios
 --------
 Tier 1
  capital
  to
  average
  assets       8.41%    8.18%    8.63%       7.24%   4.00%       5.00%

 Risk-based
  Ratios
 ----------
 Tier 1
  capital
  to risk-
  weighted
  assets      10.26%    9.88%   10.45%       8.99%   4.00%       6.00%
 Total
  capital
  to risk-
  weighted
  assets      11.52%   11.14%   11.70%      10.28%   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 capital ratios are above the well-capitalized threshold. The Company currently has capacity to add approximately $14 million of trust preferred borrowings and to the capital markets, if needed, to maintain the well-capitalized status of the Subsidiary Banks.



              The Savannah Bancorp, Inc. and Subsidiaries
           Allowance for Loan Losses and Nonperforming Loans
                              (Unaudited)

                         2009                   2008
 --------------------------------------------------------------------
                        First    Fourth     Third    Second     First
 ($ in thousands)     Quarter   Quarter   Quarter   Quarter   Quarter
 --------------------------------------------------------------------

 Allowance for loan
  losses
 Balance at begin-
  ning of period     $ 13,300  $ 12,390  $ 12,445  $ 12,128  $ 12,864
 Provision for loan
  losses                3,720     2,270     1,505     1,155     1,070
 Net charge-offs       (1,711)   (1,360)   (1,560)     (838)   (1,806)
 --------------------------------------------------------------------
 Balance at end of
  period             $ 15,309  $ 13,300  $ 12,390  $ 12,445  $ 12,128
 ====================================================================

 As a % of loans         1.77%     1.54%     1.45%     1.48%     1.45%
 As a % of non-
  performing loans      63.27%    48.18%    56.25%    66.61%    69.26%
 As a % of non-
  performing assets     47.05%    37.25%    43.94%    59.18%    62.08%

 Net charge-offs as
  a % of average
  loans (a)              0.82%     0.65%     0.75%     0.40%     0.90%

 Risk element assets
 Nonaccruing loans   $ 23,927  $ 26,277  $ 17,753  $ 16,991  $ 16,915
 Loans past due 90
  days - accruing         268     1,330     4,274     1,693       596
 --------------------------------------------------------------------
 Total nonperforming
  loans                24,195    27,607    22,027    18,684    17,511
 Other real estate
  owned                 8,342     8,100     6,168     2,346     2,025
 --------------------------------------------------------------------
   Total non-
    performing
    assets           $ 32,537  $ 35,707  $ 28,195  $ 21,030  $ 19,536
 ====================================================================

 Loans past due
  30-89 days         $ 13,179  $  8,269  $  8,841  $  6,528  $ 11,014

 Nonperforming loans
  as a % of loans        2.80%     3.19%     2.58%     2.22%     2.10%
 Nonperforming
  assets as a % of
  loans and other
  real estate owned      3.73%     4.09%     3.28%     2.50%     2.33%

 (a) Annualized


               The Savannah Bancorp, Inc. & Subsidiaries
                      Loan Concentration Schedule
                 March 31, 2009 and December 31, 2008

                                    % of              % of   % Dollar
 ($ in thousands)          3/31/09  Total   12/31/08  Total   Change
 --------------------------------------------------------------------
 Non-residential real
  estate
   Owner-occupied         $140,879     16   $137,742     16      2.3
   Non owner-occupied      139,334     16    124,502     14       12
   Construction             11,893      1     26,965      3      (56)
   Commercial land and
   lot development          42,837      5     42,590      5      0.6
 ----------------------------------------------------------
 Total non-residential
  real estate              334,943     38    331,799     38      0.9
 ----------------------------------------------------------
 Residential real
  estate
   Owner-occupied - 1-4
    family                  89,054     10     89,774     10     (0.8)
   Non owner-occupied -
    1-4 family             153,602     18    147,396     17      4.2
   Construction             24,768      3     43,431      5      (43)
   Residential land
    and lot development    104,296     12     98,715     12      5.7
   Home equity lines        57,243      7     55,092      6      3.9
 ----------------------------------------------------------
 Total residential real
  estate                   428,963     50    434,408     50     (1.3)
 ----------------------------------------------------------
 Total real estate loans   763,906     88    766,207     88     (0.3)
 Commercial                 85,405     10     81,348     10      5.0
 Consumer                   15,804      2     17,628      2      (10)
 Unearned fees, net           (189)    --       (209)    --     (9.6)
 ----------------------------------------------------------
 Total loans, net of
  unearned fees           $864,926    100   $864,974    100      0.0
 ====================================================================

              The Savannah Bancorp, Inc. and Subsidiaries
    Average Balance Sheet and Rate/Volume Analysis - First Quarter,
                            2009 and 2008

      Average Balance      Average Rate
 ----------------------------------------
        QTD         QTD      QTD      QTD
    3/31/09     3/31/08  3/31/09  3/31/08
 --------------------------------------------------------------------
    ($ in thousands)            (%)
                                           Assets
   $  3,817  $    6,910     1.38     3.89  Interest-bearing deposits
     76,748      58,423     4.70     5.23  Investments - taxable
      1,573       1,916     5.41     5.44  Investments - non-taxable
      3,602       6,598     0.23     3.22  Federal funds sold
        108         734    11.27     6.56  Loans held for sale
    839,683     801,441     5.62     7.11  Loans (c)
 ----------------------
                                           Total interest-earning
    925,531     876,022     5.51     6.93   assets
                         ----------------
     77,537      58,734                    Noninterest-earning assets
 ----------------------
 $1,003,068  $  934,756                      Total assets
 ======================
                                           Liabilities and equity
                                           Deposits
 $  123,346  $  115,485     0.53     1.56   NOW accounts
     15,067      15,990     0.73     0.88   Savings accounts
    107,227     135,539     1.79     2.75   Money market accounts
                                            Money market accounts -
     98,091      51,667     1.80     3.89    institutional
    144,346     146,914     3.77     5.10   CDs, $100M or more
    122,728      69,871     2.65     4.41   CDs, broker
    140,807     129,993     3.57     4.85   Other time deposits
 ----------------------
                                           Total interest-bearing
    751,612     665,459     2.42     3.69   deposits
     10,545       5,733     2.12     3.43  FHLB advances - long-term
     62,134      83,349     1.66     3.33  Short-term borrowings
     10,310      10,310     4.29     7.39  Subordinated debt
 ----------------------
                                           Total interest-bearing
    834,601     764,851     2.38     3.70      liabilities
                         ----------------
                                           Noninterest-bearing
     81,126      83,522                     deposits
      6,468       8,173                    Other liabilities
     80,873      78,210                    Shareholders' equity
 ----------------------
 $1,003,068  $  934,756                    Liabilities and equity
 ======================
                            3.13     3.23  Interest rate spread
                         ================
                            3.36     3.70  Net interest margin
                         ================
                                           Net interest income

 $   90,930  $  111,171                    Net earning assets
 ======================
  $ 832,738  $  748,981                    Average deposits
 ======================
                            2.18     3.28  Average cost of deposits
                         ================
                                           Average loan to deposit
        101%        107%                    ratio
 ======================


                         Taxable-Equivalent            (a) Variance
                             Interest (b)             Attributable to
                          ----------------           ----------------
                              QTD      QTD   Vari-
                          3/31/09  3/31/08   ance      Rate    Volume
 --------------------------------------------------------------------
                              ($ in thousands)       ($ in thousands)
 Assets
 Interest-bearing
  deposits                $    13  $    67  $   (54) $   (43) $   (11)
 Investments - taxable        890      762      128      (76)     204
 Investments -
  non-taxable                  21       26       (5)      --       (5)
 Federal funds sold             2       53      (51)     (49)      (2)
 Loans held for sale            3       12       (9)       9      (18)
 Loans (c)                 11,645   14,213   (2,568)  (2,944)     376
                          -------------------------
 Total interest-earning
  assets                   12,574   15,133   (2,559)  (3,067)     508
                          -------------------------------------------
 Noninterest-earning
  assets
 Total assets

 Liabilities and equity
 Deposits
   NOW accounts               160      449     (289)    (293)       4
   Savings accounts            27       35       (8)      (6)      (2)
   Money market accounts      473      930     (457)    (321)    (136)
   Money market accounts -
    institutional             436      501      (65)    (266)     201
   CDs, $100M or more       1,342    1,867     (525)    (482)     (43)
   CDs, broker                803      769       34     (303)     337
   Other time deposits      1,240    1,573     (333)    (410)      77
                          -------------------------
 Total interest-bearing
  deposits                  4,481    6,124   (1,643)  (2,084)     441
 FHLB advances -
  long-term                    55       49        6      (19)      25
 Short-term borrowings        255      691     (436)    (343)     (93)
 Subordinated debt            109      190      (81)     (79)      (2)
                          -------------------------
 Total interest-bearing
     liabilities            4,900    7,054   (2,154)  (2,489)     335
                          -------------------------------------------
 Noninterest-bearing
  deposits
 Other liabilities
 Shareholders' equity
 Liabilities and equity
 Interest rate spread
 Net interest margin
 Net interest income      $ 7,674  $ 8,079  $  (405) $  (578) $   173
                          ===========================================
 Net earning assets

 Average deposits

 Average cost of deposits

 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 first
     quarter 2009 and 2008, respectively.

 (c) Average nonaccruing loans have been excluded from total average
     loans and categorized in noninterest-earning assets.

            

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