The Savannah Bancorp Reports Fourth Quarter and 2007 Earnings and Declares Dividend Increase

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| Source: The Savannah Bancorp, Inc.

SAVANNAH, Ga., Jan. 31, 2008 (PRIME NEWSWIRE) -- The Savannah Bancorp, Inc. (Nasdaq:SAVB) reported net income of $7,636,000 in 2007 compared with net income of $10,002,000 in 2006, a decrease of 24 percent. Net income per diluted share was $1.29 for 2007 and $1.70 in 2006, a decrease of 24 percent. Net income for the fourth quarter 2007 was $353,000 compared to $2,523,000 for the same period in 2006. Fourth quarter net income per diluted share was $0.06 in 2007 and $0.43 in 2006, a decrease of 86 percent. Other growth and performance ratios are included in the attached financial highlights and information.

Fourth quarter pretax earnings included an additional provision for loan losses of $2.6 million and a reversal of approximately $330,000 of accrued interest for loans placed on nonaccrual status. These two charges to earnings reduced fourth quarter after-tax earnings by $1.8 million, or $0.30 per share. Details regarding these charges were provided in a press release and Form 8-K filing on January 10, 2008 and are available at our corporate website at www.savb.com.

Nonperforming loans at December 31, 2007 were $17.4 million, up from $6.8 million at September 30, 2007 and $2.2 million at December 31, 2006. The increase in nonperforming loans in the fourth quarter was primarily related to loans made in the Bluffton / Hilton Head Island, South Carolina ("Bluffton/HHI") market. Net charge-offs were $765,000 in 2007 compared to $444,000 in 2006.

President and CEO John C. Helmken II said, "Although I am less than pleased by our fourth quarter results and the loan quality issues, I am pleased with the progress we have made in addressing the situation. We continue to provide the resources and attention that are needed to manage these issues. Prompt and decisive action is allowing us to readily address the situation and minimize our potential losses. Equally important, we remain focused on our opportunities as well as our challenges. 2007 included several significant highlights for our Company, including several key hires, the successful integration of Minis & Co, Inc., one new branch in Bluffton, South Carolina and continued loan, deposit and fee income growth. While real estate activity slowed in our markets, our strong capital position, our enhanced products and services, and, most importantly, our people, position us well for 2008. As we approach a billion dollars in assets, we remain excited about the future of our Company."

Total assets increased 11 percent to $932 million at December 31, 2007, up from $844 million a year earlier. Loans totaled $809 million compared with $721 million one year earlier, an increase of 12 percent. Deposits totaled $764 million at December 31, 2007 and $707 million at December 31, 2006, an increase of 8.1 percent. Average total assets increased 13 percent to $869 million in 2007 from $770 million in 2006. Average portfolio loans were $754 million in 2007 compared with $659 million in 2006, an increase of 14 percent. Average deposits were $720 million in 2007 and $638 million in 2006, an increase of 13 percent.

Net interest income increased $524,000, or 1.6 percent, in 2007 over 2006, including the impact of approximately $400,000 of accrued interest reversed on loans placed on nonaccrual status during 2007. The net interest margin declined to 3.99 percent from 4.44 percent in 2006, primarily due to higher deposit and borrowing costs. Noninterest income increased $406,000 or 9.4 percent including $855,000 in higher trust and asset management fees, offset by lower service charges on deposit accounts and lower mortgage related income. The fourth quarter was the first full quarter of operations for Minis & Co. as a subsidiary of the Company. Noninterest expense increased $1,186,000, or 5.9 percent during 2007 as compared to 2006. Of the increase, $994,000 was in salaries and benefits and $465,000 in occupancy, equipment and technology expenses. Other operating expense declined by $273,000 or 5.9 percent due primarily to lower non-recurring de novo startup expenses and lower professional fees offset by higher FDIC assessment costs.

The Board of Directors approved a 4.2 percent increase in the regular quarterly cash dividend to 12.5 cents per share from 12 cents per share. The first quarter dividend is payable on February 25, 2008 to shareholders of record on February 8, 2008.

The Savannah Bancorp, Inc. ("SAVB"), a bank holding company for The Savannah Bank, N.A., Bryan Bank & Trust (Richmond Hill, GA), Harbourside Community Bank (Hilton Head Island, SC) and Minis & Co., Inc. (a registered investment advisory firm), 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 - 10 pages of financial information

A printable PDF format of this entire Annual Earnings Release may be obtained from the Corporate Website at www.savb.com under the "SEC Filings and More" link and the "Latest Earnings Release" selection and at the following web link: http://www.snl.com/irweblinkx/news.aspx?iid=100844.



              The Savannah Bancorp, Inc. and Subsidiaries
                  Fourth Quarter Financial Highlights
                      December 31, 2007 and 2006
                ($ in thousands, except per share data)
                              (Unaudited)

 ---------------------------------------------------------------------
 Balance Sheet                                                     %
 Data at December 31                       2007         2006    Change
 ---------------------------------------------------------------------
 Total assets                          $932,459     $843,514       11
 Interest-earning assets                878,992      803,927      9.3
 Loans                                  808,651      720,918       12
 Allowance for loan losses               12,864        8,954       44
 Non-accruing loans                      14,663          825       NM
 Loans past due 90 days - accruing        2,761        1,406       96
 Net charge-offs                            765          444       72
 Deposits                               764,218      706,824      8.1
 Interest-bearing liabilities           759,597      669,974       13
 Shareholders' equity                    76,272       66,574       15
 Allowance for loan losses to total
  loans                                    1.59%        1.24%      28
 Nonperforming assets to total loans
  and OREO                                 2.41%        0.38%     534
 Loan to deposit ratio                      106%         102%     3.9
 Equity to assets                          8.18%        7.89%     3.7
 Tier 1 capital to risk-weighted
  assets                                  10.49%       11.09%    (5.4)
 Total capital to risk-weighted
  assets                                  11.74%       12.34%    (4.9)
 Outstanding shares (000s)(a)             5,924        5,781      2.5
 Book value per share(a)               $  12.88     $  11.52       12
 Tangible book value per share(a)      $  12.50     $  11.52      8.5
 Market value per share(a)             $  17.14     $  27.25      (37)


 Performance Data for the Year
 -----------------------------
 Net income                            $  7,636     $ 10,002      (24)
 Return on average assets                  0.88%        1.30%     (32)
 Return on average equity                 10.68%       16.19%     (34)
 Net interest margin                       3.99%        4.44%     (10)
  Efficiency ratio                        56.09%       54.29%     3.3
 Per share data:(a)
 Net income - basic                    $   1.31     $   1.73      (24)
 Net income - diluted                  $   1.29     $   1.70      (24)
  Dividends                            $   .480     $   .448      7.1
 Average shares (000s):(a)
 Basic                                    5,850        5,765      1.5
 Diluted                                  5,922        5,876      0.8


 Performance Data for the Fourth Quarter
 ---------------------------------------
 Net income                            $    353     $  2,523      (86)
 Return on average assets                  0.15%        1.24%     (88)
 Return on average equity                  1.83%       15.33%     (88)
 Net interest margin                       3.72%        4.26%     (13)
  Efficiency ratio                        60.48%       54.94%      10
 Per share data:(a)
 Net income - basic                    $   0.06     $   0.44      (86)
 Net income - diluted                  $   0.06     $   0.43      (86)
 Dividends                             $  0.120     $  0.112      7.1

 Average shares (000s):(a)
 Basic                                    5,923        5,779      2.5
 Diluted                                  5,968        5,884      1.4


 (a) Share and per share amounts have been restated to reflect the
     effect of a 5-for-4 stock split in December 2006.


              The Savannah Bancorp, Inc. and Subsidiaries
                      Consolidated Balance Sheets
                      December 31, 2007 and 2006
                  ($ in thousands, except share data)

 ---------------------------------------------------------------------
                                                        December 31,
                                                     2007         2006
 ---------------------------------------------------------------------
 Assets
 Cash and due from banks                        $  12,721    $  18,540
 Federal funds sold                                 4,435       18,363
 Interest-bearing deposits in banks                20,148       10,394
 ---------------------------------------------------------------------
   Cash and cash equivalents                       37,304       47,297
 Securities available for sale, at fair
  value (amortized cost of $60,241 in
  2007 and $54,163 in 2006)                        61,057       53,917
 Loans held for sale                                  180          914
 Loans, net of allowance for loan losses
  of $12,864 in 2007 and $8,954 in 2006           795,787      711,964
 Premises and equipment, net                        6,830        6,365
 Other real estate owned                            2,112          545
 Bank-owned life insurance                          5,985        5,760
 Goodwill and other intangibles, net                3,662           --
 Other assets                                      19,542       16,752
 ---------------------------------------------------------------------
     Total assets                               $ 932,459    $ 843,514
 =====================================================================

 Liabilities
 Deposits:
   Noninterest-bearing                          $  88,503    $ 101,156
   Interest-bearing demand                        127,902      116,493
   Savings                                         16,168       18,615
   Money market                                   176,615      147,279
   Time deposits                                  355,030      323,281
 ---------------------------------------------------------------------
     Total deposits                               764,218      706,824
 Short-term borrowings                             70,599       40,687
 Federal Home Loan Bank advances -long-term         2,973       13,309
 Subordinated debt to nonconsolidated
  subsidiaries                                     10,310       10,310
 Other liabilities                                  8,087        5,810
 ---------------------------------------------------------------------
     Total liabilities                            856,187      776,940
 ---------------------------------------------------------------------

 Shareholders' equity
 Common stock, par value $1 per share:
  authorized 20,000,000 shares; issued 
  5,923,797 and 5,781,381 shares in 2007
  and 2006, respectively                            5,924        5,781
 Preferred stock, par value $1 per share:
  authorized 10,000,000 shares, none issued            --           --
 Additional paid-in capital                        38,278       35,747
 Retained earnings                                 30,513       25,681
 Treasury stock, 318 shares in 2007 and
  2006                                                 (4)          (4)
 Accumulated other comprehensive income 
  (loss), net                                       1,561         (631)
 ---------------------------------------------------------------------
     Total shareholders' equity                    76,272       66,574
 ---------------------------------------------------------------------
     Total liabilities and shareholders' 
      equity                                    $ 932,459    $ 843,514
 =====================================================================


              The Savannah Bancorp, Inc. and Subsidiaries
        Consolidated Statements of Income for the Two Years and
                Five Quarters Ending December 31, 2007
                ($ in thousands, except per share data)

 ---------------------------------------------------------------------
                                           For the Years Ended
 ---------------------------------------------------------------------
                                                December 31,        %
                                            2007         2006     Chg
 ---------------------------------------------------------------------
 Interest and dividend income
 Loans, including fees                  $ 59,435     $ 51,541      15
 Loans held for sale                          98          558     (82)
 Investment securities                     2,907        2,240      30
 Deposits in banks                           346          293      18
 Federal funds sold                          472          557     (15)
 ------------------------------------------------------------
   Total interest and dividend income     63,258       55,189      15
 ------------------------------------------------------------
 Interest expense
 Deposits                                 26,415       19,342      37
 Short-term borrowings                     3,454        2,617      32
 FHLB advances                               413          778     (47)
 ------------------------------------------------------------
   Total interest expense                 30,282       22,737      33
 ------------------------------------------------------------
 Net interest income                      32,976       32,452     1.6
 Provision for loan losses                 4,675        1,585     195
 ------------------------------------------------------------
 Net interest income after the
  provision for loan losses               28,301       30,867    (8.3)
 ------------------------------------------------------------
 Noninterest income
 Service charges on deposits               1,383        1,526    (9.4)
 Mortgage related income, net                615          886     (31)
 Trust and asset management fees           1,513          658     130
 Other operating income                    1,242        1,233     0.7
 Gain (loss) on sale of OREO                 (44)          --    (100)
 ------------------------------------------------------------
   Total noninterest income                4,709        4,303     9.4
 ------------------------------------------------------------
 Noninterest expense
 Salaries and employee benefits           11,846       10,852     9.2
 Occupancy and equipment                   3,294        2,920      13
 Information technology                    1,616        1,525     6.0
 Other operating expense                   4,383        4,656    (5.9)
 ------------------------------------------------------------
   Total noninterest expense              21,139       19,953     5.9
 ------------------------------------------------------------
 Income before income taxes               11,871       15,217     (22)
 Income tax expense                        4,235        5,215     (19)
 ------------------------------------------------------------
 Net income                             $  7,636     $ 10,002     (24)
 ============================================================
 Net income per share:
 Basic                                  $   1.31     $   1.73     (24)
 ============================================================
 Diluted                                $   1.29     $   1.70     (24)
 ============================================================
 Average basic shares (000s)               5,850        5,765     1.5
 Average diluted shares (000s)             5,922        5,876     0.8

 Performance Ratios
 Return on average equity                  10.68%       16.19%    (34)
 Return on average assets                   0.88%        1.30%    (32)
 Net interest margin                        3.99%        4.44%    (10)
 Efficiency ratio                           56.1%        54.3%    3.3
 Average equity                           71,516       61,766      16
 Average assets                          869,026      769,917      13
 Average interest-earning assets         830,900      734,470      13


 ---------------------------------------------------------------------
                               (Unaudited)
 ---------------------------------------------------------------------
                                   2007                 2006
 --------------------------------------------------------------  Q4-07/
                 Fourth     Third    Second     First    Fourth  Q4-06
                Quarter   Quarter   Quarter   Quarter   Quarter  % Chg
 ---------------------------------------------------------------------
 Interest and
  dividend
  income
 Loans,
  including
  fees          $15,016   $15,196  $14,872   $14,351   $14,063    6.8
 Loans held
  for sale           14        15       35        34        52    (73)
 Investment
  securities        767       794      726       620       599     28
 Deposits in
  banks             100        44      119        83       127    (21)
 Federal
  funds sold         45       130      125       172       116    (61)
 -------------------------------------------------------------
   Total
    interest and
    dividend
    income       15,942    16,179   15,877    15,260    14,957    6.6
 -------------------------------------------------------------
 Interest
  expense
 Deposits         6,881     6,963    6,479     6,092     5,754     20
 Short-term
  borrowings        935       860      831       828       775     21
 FHLB
  advances           46        48      155       164       168    (73)
 -------------------------------------------------------------
   Total
    interest
    expense       7,862     7,871    7,465     7,084     6,697     17
 -------------------------------------------------------------
 Net
  interest
  income          8,080     8,308    8,412     8,176     8,260   (2.2)
 Provision
  for loan
  losses          3,145       635      395       500       450    599
 -------------------------------------------------------------
 Net interest
  income after
  the provision
  for loan
  losses          4,935     7,673    8,017     7,676     7,810    (37)
 -------------------------------------------------------------
 Noninterest
  income
 Service
  charges
  on deposits       349       339      348       347       389    (10)
 Mortgage
  related
  income, net        98       141      166       210       200    (51)
 Trust and
  asset
  management
  fees              769       379      189       176       170    352
 Other
  operating
  income            315       305      297       325       331   (4.8)
 Gain (loss)
  on sale of
  OREO              (38)       --       --        (6)       --     --
 -------------------------------------------------------------
   Total
    noninterest
    income        1,493     1,164    1,000     1,052     1,090     37
 -------------------------------------------------------------
 Noninterest
  expense
 Salaries and
  employee
  benefits        3,125     2,919    2,838     2,964     2,659     18
 Occupancy and
  equipment         958       796      782       758       768     25
 Information
  technology        422       388      381       425       417    1.2
 Other
  operating
  expense         1,285     1,073    1,025     1,000     1,293   (0.6)
 -------------------------------------------------------------
   Total
    noninterest
    expense       5,790     5,176    5,026     5,147     5,137     13
 -------------------------------------------------------------
 Income before
  income taxes      638     3,661    3,991     3,581     3,763    (83)
 Income tax
  expense           285     1,280    1,400     1,270     1,240    (77)
 -------------------------------------------------------------
 Net income     $   353   $ 2,381  $ 2,591   $ 2,311   $ 2,523    (86)
 =============================================================
 Net income
  per share:
 Basic          $   .06   $   .41  $   .44   $   .40   $   .44    (86)
 =============================================================
 Diluted        $   .06   $   .40  $   .44   $   .39   $   .43    (86)
 =============================================================
 Average basic
  shares (000s)   5,923     5,862    5,824     5,782     5,779    2.5
 Average
  diluted
  shares (000s)   5,968     5,928    5,899     5,890     5,884    1.4
 Performance
  Ratios
 Return on
  average
  equity           1.83%    13.04%   14.94%    13.90%    15.33%   (88)
 Return on
  average
  assets           0.15%     1.08%    1.23%     1.12%     1.24%   (88)
 Net interest
  margin           3.72%     3.95%    4.13%     4.17%     4.26%   (13)
 Efficiency
  ratio            60.5%     54.7%    53.4%     55.8%     54.9%    10
 Average
  equity         74,447    72,436   69,583    67,434    65,297     14
 Average
  assets        910,785   875,532  855,989   834,033   809,491     13
 Average
  interest
  -earning
  assets        865,430   837,586  821,253   799,678   772,192     12

 (a) Share and per share amounts have been restated to reflect the
     effect of a 5-for-4 stock split in December 2006.


             The Savannah Bancorp, Inc. and Subsidiaries
    Selected Financial Condition Highlights - Five-Year Comparison
               ($ in thousands, except per share data)
                             (Unaudited)

 ---------------------------------------------------------------------
                      2007       2006       2005       2004       2003
 ---------------------------------------------------------------------

 Selected Average
  Balances
 ----------------

 Assets           $869,026   $769,917   $685,163   $557,474   $443,502
 Loans held for
  sale               1,299      7,842     23,033     27,209        939
 Loans, net of
  unearned
  income           754,490    658,750    565,131    441,421    356,006
 Securities         58,910     50,600     41,300     40,703     44,015
 Other interest
  -earning
  assets            16,201     17,278     26,168     22,383     21,198

 Total interest
  -earning
  assets           830,900    734,470    655,632    531,716    422,158
 Interest-bearing
  deposits         628,310    542,375    487,493    371,877    300,045
 Borrowed funds     70,939     62,255     55,255     67,353     40,158
 Total interest
  -bearing
  liabilities      699,249    604,630    542,748    439,230    340,203
 Noninterest
  -bearing
  deposits          91,367     96,113     89,386     76,593     65,403
 Total deposits    719,677    638,488    576,879    448,470    365,448
 Shareholders'
  equity            71,516     61,766     47,428     38,126     35,740
 Loan to deposit
  ratio - average      105%       103%        98%        98%       97%


 Selected Financial
  Data at Year-End
 ------------------

 Assets           $932,459   $843,514   $717,901   $617,341   $476,865
 Interest-
  earning
  assets           878,992    803,927    685,531    593,035    449,025
 Loans held for
  sale                 180        914     10,473     26,471     10,393
 Loans, net of
  unearned
  income           808,651    720,918    613,667    499,868    386,731
 Deposits          764,218    706,824    600,510    506,120    389,146
 Loan to
  deposit ratio        106%       102%       102%        99%        99%
 Interest-bearing
  liabilities      759,597    669,974    558,116    488,546    360,817
 Shareholders'
  equity            76,272     66,574     58,543     40,071     36,771
 Shareholders'
  equity to total
  assets              8.18%      7.89%      8.15%      6.49%      7.71%
 Dividend payout
  ratio              36.73%     25.92%     25.53%     37.69%     45.00%
 Risk-based
  capital ratios:
   Tier 1 capital
    to risk-based
    assets           10.49%     11.09%     11.52%      9.95%     10.60%
   Total capital
    to risk-based
    assets           11.74%     12.34%     12.77%     11.20%     11.85%


 Loan Quality Data
 -----------------
 Nonperforming
  assets          $ 19,535   $  2,776   $  1,357   $    998   $  1,525
 Nonperforming
  loans             17,424      2,231      1,357        538        598
 Net loan losses       765        444         76        128        306
 Allowance for
  loan losses       12,864      8,954      7,813      6,389      5,067
 Nonperforming
  loans to loans      2.15%      0.31%      0.22%      0.11%      0.15%
 Nonperforming
  assets to loans
  and other real
  estate owned        2.41%      0.39%      0.22%      0.20%      0.39%
 Net loan losses
  to average loans    0.01%      0.07%      0.01%      0.03%      0.09%
 Allowance for
  loan losses
  to total loans      1.59%      1.24%      1.27%      1.28%      1.31%


 Per Share Data
  at Year-End(a)
 ---------------
 Book value       $  12.88   $  11.52   $  10.20   $   7.80   $   7.17
 Common stock
  closing price
  (Nasdaq)        $  17.14   $  27.25   $  28.38   $  21.64   $  18.56
 Common shares
  outstanding
  (000s)             5,924      5,781      5,739      5,140      5,129


 (a) Share and per share amounts have been restated to reflect the
     effect of a 5-for-4 stock split in December 2006 and December
     2004.


              The Savannah Bancorp, Inc. and Subsidiaries
         Selected Operating Highlights - Five-Year Comparison
                ($ in thousands, except per share data)
                              (Unaudited)

 ---------------------------------------------------------------------
                      2007       2006       2005       2004       2003
 ---------------------------------------------------------------------
 Summary of
  operations
 Interest income
  - taxable
  equivalent      $ 63,414   $ 55,347   $ 42,544   $ 28,947   $ 23,221
 Interest
  expense           30,282     22,737     14,679      8,427      6,695
 ---------------------------------------------------------------------
 Net interest
  income
  - taxable
  equivalent        33,132     32,610     27,865     20,520     16,526
 Taxable
  equivalent
  adjustment          (156)      (158)      (186)      (240)      (284)
 ---------------------------------------------------------------------
 Net interest
  income            32,976     32,452     27,679     20,280     16,242
 Provision for
  loan losses        4,675      1,585      1,500      1,450      1,000
 ---------------------------------------------------------------------
 Net interest
  income after
  provision for
  loan losses       28,301     30,867     26,179     18,830     15,242
 ---------------------------------------------------------------------
 Noninterest
  income
  Service
   charges on
   deposit
   accounts          1,383      1,526      1,622      1,598      1,572
  Mortgage
   related
   income, net         615        886      1,292      1,079        776
  Trust and
   asset
   management
   fees              1,513        658        501        442        398
  Other
   operating
   income            1,242      1,233        972        981        635
  Gain (loss)
   on sale of
   OREO                (44)        --         --         --         --
 ---------------------------------------------------------------------
 Total
  noninterest
  income             4,709      4,303      4,387      4,100      3,381
 ---------------------------------------------------------------------
 Noninterest
  expense
  Salaries and
   employee
   benefits         11,846     10,852      9,530      8,362      6,693
  Occupancy and
   equipment         3,294      2,920      2,199      1,963      1,767
  Information
   technology        1,616      1,525      1,244      1,049        908
  Other
   operating
   expense           4,383      4,656      3,673      2,880      2,287
 ---------------------------------------------------------------------
 Total
  noninterest
  expense           21,139     19,953     16,646     14,254     11,655
 ---------------------------------------------------------------------
 Income before
  income taxes      11,871     15,217     13,920      8,676      6,968
 Income tax
  expense            4,235      5,215      4,880      2,940      2,324
 ---------------------------------------------------------------------
 Net income       $  7,636   $ 10,002   $  9,040   $  5,736   $  4,644
 =====================================================================

 Net income per
  share:(a)
  Basic           $   1.31   $   1.73   $   1.68   $   1.12   $   0.91
  Diluted         $   1.29   $   1.70   $   1.63   $   1.09   $   0.89
 Cash dividends
  paid per share  $   0.48   $   0.45   $   0.43   $   0.42   $   0.41
 Average basic
  shares
  outstand-
  ing (000s)         5,850      5,765      5,396      5,136      5,129
 Average
  diluted
  shares
  outstand-
  ing (000s)         5,922      5,876      5,531      5,261      5,226

 Performance ratios
 Net interest
  margin              3.99%      4.44%      4.25%      3.86%      3.91%
 Return on
  average assets      0.88%      1.30%      1.32%      1.03%      1.05%
 Return on
  average equity     10.68%     16.19%     19.06%     15.04%     12.99%
 Efficiency
  ratio              56.09%     54.29%     51.91%     58.47%     59.40%

 (a) Share and per share amounts have been restated to reflect the
     effect of a 5-for-4 stock split in December 2006 and December
     2004.


             The Savannah Bancorp, Inc. and Subsidiaries
               Selected Quarterly Data - 2007 and 2006
               ($ in thousands, except per share data)
                             (Unaudited)

                 Condensed Quarterly Income Statements

 The following is a summary of unaudited quarterly results for 2007
  and 2006:
                                                 2007
 --------------------------------------------------------------------
                                  Fourth    Third    Second     First
 --------------------------------------------------------------------
 Net interest income              $8,080   $8,308    $8,412    $8,176
 Provision for loan losses         3,145      635       395       500
 --------------------------------------------------------------------
 Net interest income after
  provision for loan losses        4,935    7,673     8,017     7,676
 Noninterest income                1,493    1,164     1,000     1,052
 Noninterest expense               5,790    5,176     5,026     5,147
 --------------------------------------------------------------------
 Income before income taxes          638    3,661     3,991     3,581
 Income tax expense                  285    1,280     1,400     1,270
 --------------------------------------------------------------------
 Net income                       $  353   $2,381    $2,591    $2,311
 ====================================================================

 Per share:(a)
     Net income - basic           $ .060   $ .406    $ .445    $ .400
     Net income - diluted         $ .059   $ .402    $ .439    $ .392
     Dividends                    $ .120   $ .120    $ .120    $ .120
 Average shares (000s)
     Basic                         5,923    5,862     5,824     5,782
     Diluted                       5,968    5,928     5,899     5,890

                                               2006
 --------------------------------------------------------------------
                                  Fourth    Third    Second     First
 --------------------------------------------------------------------
 Net interest income              $8,260   $8,119    $8,156    $7,917
 Provision for loan losses           450      360       360       415
 --------------------------------------------------------------------
 Net interest income after         
  provision for loan losses        7,810    7,759     7,796     7,502

 Noninterest income                1,090    1,056     1,086     1,071
 Noninterest expense               5,137    4,945     4,976     4,895
 --------------------------------------------------------------------
 Income before income taxes        3,763    3,870     3,906     3,678
 Income tax expense                1,240    1,280     1,368     1,327
 --------------------------------------------------------------------
 Net income                       $2,523   $2,590    $2,538    $2,351
 ====================================================================

 Per share:(a)
     Net income - basic           $ .437  $  .450   $  .441    $ .408
     Net income - diluted         $ .429  $  .441   $  .432    $ .401
     Dividends                    $ .112  $  .112   $  .112    $ .112
 Average shares (000s)
     Basic                         5,779    5,761     5,759     5,759
     Diluted                       5,884    5,886     5,894     5,886


 (a) Share and per share amounts have been adjusted to reflect the
     effect of a 5-for-4 stock split in December 2006. The summation
     of quarterly earnings per share may not agree with annual
     earnings per share.


              Quarterly Market Values of Common Shares

 The Company's common stock was sold in an initial public  offering on
 April 10, 1990. It is traded on the NASDAQ Global Market under the 
 symbol SAVB. The quarterly high, low and closing stock trading prices
 for 2007 and 2006 are listed below. There were approximately 700 
 holders of record of Company Common Stock and, according to 
 information available to the Company, approximately 720 additional
 shareholders in street name through brokerage  accounts at December 
 31, 2007. The per share amounts have been restated to reflect the 
 effect of a 5-for-4 stock split in December 2006.

                                2007                 
 -------------------------------------------------------------------
 Closing Market Prices         Fourth     Third     Second     First  
 -------------------------------------------------------------------

     High                      $24.69    $25.97     $27.20    $28.07  
     Low                        17.10     23.00      24.71     27.00  
     Close                      17.14     24.69      25.10     27.00  


                                2006
 -------------------------------------------------------------------
 Closing Market Prices         Fourth     Third     Second     First
 -------------------------------------------------------------------

     High                      $28.14    $30.31     $30.40    $29.58
     Low                        26.60     26.58      27.26     27.12
     Close                      27.25     26.64      30.26     28.06


              The Savannah Bancorp, Inc. and Subsidiaries
    Average Balance Sheet and Rate/Volume Analysis - 2007 and 2006

    Average Balance      Average Rate
 -------------------    --------------
     2007         2006    2007    2006
 ---------------------------------------------------------------------
     ($ in thousands)         (%)
                                        Assets
 $  6,958    $   5,969    4.97    4.91  Interest-bearing deposits
   56,851       48,190    5.01    4.47  Investments - taxable
    2,059        2,410    7.33    7.47  Investments - non-taxable
    9,243       11,309    5.11    4.93  Federal funds sold
    1,299        7,842    7.54    7.12  Loans held for sale
  754,490      658,750    7.89    7.83  Loans(c)
 ---------------------

  830,900      734,470    7.63    7.54  Total interest-earning assets
                         -------------
   38,126       35,447                  Noninterest-earning assets
 ---------------------
 $869,026    $ 769,917                  Total assets
 =====================

                                        Liabilities and equity
                                        Deposits
 $114,053    $  95,138    2.00    1.32    NOW accounts
   17,831       19,104    0.99    0.99    Savings accounts
  167,887      135,736    4.27    3.75    Money market accounts
  131,553      105,220    5.35    4.68    CDs, $100M or more
   74,234       81,084    4.83    3.98    CDs, broker
  122,752      106,093    5.03    4.39    Other time deposits
 ---------------------

                                        Total interest-bearing
  628,310      542,375    4.20    3.57   deposits
    7,833       15,770    5.27    4.93  FHLB advances - long term
   52,796       36,175    4.95    4.98  Short-term borrowings
   10,310       10,310    8.17    7.90  Subordinated debt
 ---------------------
                                        Total interest-bearing
  699,249      604,630    4.33    3.76   liabilities
                         -------------
   91,367       96,113                  Noninterest-bearing deposits
    6,894        7,408                  Other liabilities
   71,516       61,766                  Shareholders' equity
 ---------------------
 $869,026    $ 769,917                  Liabilities and equity
 =====================
                          3.30    3.78  Interest rate spread
                         =============
                          3.99    4.44  Net interest margin
                         =============
                                        Net interest income

 $131,651    $ 129,840                  Net earning assets
 =====================
 $719,677    $ 638,488                  Average deposits
 =====================
                          3.67    3.03  Average cost of deposits
                         =============
      105%         103%                 Average loan to deposit ratio
 =====================

                          Taxable-Equivalent             (a)Variance
                              Interest(b)              Attributable to
                          ------------------   Vari-   ----------------
                              2007     2006     ance     Rate    Volume
 ----------------------------------------------------------------------
                           ($ in thousands)            ($ in thousands)
 Assets
 Interest-bearing
  deposits                 $   346  $   293   $   53  $     4   $   49
 Investments - taxable       2,848    2,153      695      260      435
 Investments - non-
  taxable                      151      180      (29)      (3)     (26)
 Federal funds sold            472      557      (85)      20     (105)
 Loans held for sale            98      558     (460)      33     (493)
 Loans(c)                   59,499   51,606    7,893      395    7,498
                           -------------------------
 Total interest-earning
  assets                    63,414   55,347    8,067      661    7,406
                           -------------------------------------------
 Noninterest-earning
  assets
 Total assets


 Liabilities and equity
 Deposits
   NOW accounts              2,279    1,254    1,025      647      378
   Savings accounts            176      190      (14)       0      (14)
   Money market accounts     7,164    5,093    2,071      706    1,365
   CDs, $100M or more        7,020    4,927    2,093      694    1,399
   CDs, broker               3,605    3,225      380      714     (334)
   Other time deposits       6,171    4,653    1,518      679      839
                           -------------------------
 Total interest-bearing
  deposits                  26,415   19,342    7,073    3,417    3,656
 FHLB advances - long
  term                         413      778     (365)      54     (419)
 Short-term borrowings       2,612    1,802      810      (11)     821
 Subordinated debt             842      815       27       28       (1)
                           -------------------------
 Total interest-bearing
  liabilities               30,282   22,737    7,545    3,446    4,099
                           -------------------------------------------
 Noninterest-bearing
  deposits
 Other liabilities
 Shareholders' equity
 Liabilities and equity
 Interest rate spread
 Net interest margin
 Net interest income       $33,132  $32,610   $  522  $(2,785)  $3,307
                           ===========================================

 (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 $156 in 2007
     and $158 in 2006.
 (c) Average  nonaccruing  loans have been excluded from total average
     loans and categorized as a noninterest-earning asset.

    
              The Savannah Bancorp, Inc. and Subsidiaries
           Average Balance Sheet and Rate/Volume Analysis - 
                  Fourth Quarter, 2007 and 2006

    Average Balance       Average Rate                       
 -------------------------------------                       
      Q4          Q4      Q4       Q4                        
     2007        2006    2007     2006                       
 ---------------------------------------------------------------------
    ($ in thousands)          (%)                                    
                                         Assets
 $  9,067   $   9,869    4.38     5.11   Interest-bearing deposits   
   58,946      50,116    5.07     4.61   Investments - taxable       
    1,917       2,104    7.45     7.54   Investments - non-taxable   
    5,368      10,119    3.33     4.55   Federal funds sold          
      669       2,204    8.30     9.36   Loans held for sale         
  789,463     697,780    7.55     8.00   Loans (c)                   
 --------------------                                                
  865,430     772,192    7.33     7.70   Total interest-earning assets
                         -------------                               
   45,355      37,299                    Noninterest-earning assets
 --------------------                   
 $910,785    $809,491                    Total assets
 ====================                   
                                        
                                         Liabilities and equity
                                         Deposits
 $112,785   $ 104,879    1.85     1.63      NOW accounts             
   16,437      18,350    0.94     0.99      Savings accounts         
  183,122     143,984    3.99     4.20      Money market accounts    
  148,231     114,364    5.36     5.09      CDs, $100M or more       
   72,360      78,574    4.82     4.60      CDs, broker              
  126,018     114,312    5.02     4.77      Other time deposits      
 --------------------                                                
  658,953     574,463    4.14     3.97   Total interest-bearing      
                                         deposits
    3,021      13,356    6.04     4.99   FHLB advances - long term   
   63,952      43,036    4.48     5.17   Other borrowings            
   10,310      10,310    8.20     8.23   Subordinated debt           
 --------------------                                                
                                         Total interest-bearing      
  736,236     641,165    4.24     4.14       liabilities             
                         -------------                               
   90,895      95,849                    Noninterest-bearing deposits
    7,207       7,180                    Other liabilities
   76,447      65,297                    Shareholders' equity
 --------------------                   
 $910,785    $809,491                    Liabilities and equity
 ====================                  
                         3.09     3.56   Interest rate spread
                         ============= 
                         3.72     4.26   Net interest margin
                         =============  
                                         Net interest income         
                                                                     
                                                                     
 $129,194    $131,027                    Net earning assets
 ====================                   
 $749,848    $670,312                    Average deposits
 ====================                   
                         3.64     3.41   Average cost of deposits
                         =============  
     105%        104%                    Average loan to deposit ratio
 ====================                                 
                                         
                              Taxable-Equivalent        (a) Variance
                                 Interest (b)          Attributable to
                             --------------------       --------------
                                Q4        Q4     Vari-
                               2007      2006    ance    Rate   Volume
 ---------------------------------------------------------------------
                             ($ in thousands)          ($ in thousands)
 Assets
 Interest-bearing deposits    $ 100     $ 127    ($27)  $ (18)   $ (9)
 Investments - taxable          754       582     172      58     114
 Investments - non-taxable       36        40      (4)      0      (4)
 Federal funds sold              45       116     (71)    (31)    (40)
 Loans held for sale             14        52     (38)     (6)    (32)
 Loans (c)                   15,032    14,079     953    (791)  1,744
                             ------------------------          
 Total interest-earning                                         
  assets                     15,981    14,996     985    (720)  1,705
                             -----------------------------------------
 Noninterest-earning assets                                     
                                                                
 Total assets                                                   
                                                                
                                                                
 Liabilities and equity                                         
 Deposits                                                       
    NOW accounts                527       431      96      58      38
    Savings accounts             39        46      (7)     (2)     (5)
    Money market accounts     1,841     1,523     318     (76)    394
    CDs, $100M or more        2,001     1,467     534      78     456
    CDs, broker                 880       912     (32)     44     (76)
    Other time deposits       1,593     1,375     218      72     146
                             ------------------------          
 Total interest-bearing       6,881     5,754   1,127     246     881
 deposits                                                       
 FHLB advances - long term       46       168    (122)     35    (157)
 Other borrowings               722       561     161     (75)    236
 Subordinated debt              213       214      (1)     (1)      0
                             ------------------------          
 Total interest-bearing                                         
     liabilities              7,862     6,697   1,165     162   1,003
                             ----------------------------------------
 Noninterest-bearing                                            
  deposits                                                      
 Other liabilities                                              
 Shareholders' equity                                           
                                                                
 Liabilities and equity                                         
                                                                
 Interest rate spread                                           
                                                                
 Net interest margin                                            
                                                                
 Net interest income         $8,119    $8,299   $(180)  $(882)  $ 702
                             ========================================
 Net earning assets                                             
                                                                
 (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 $39 in the
     fourth quarter 2007 and 2006, respectively.
 (c) Average nonaccruing loans have been excluded from total average
     loans and categorized as a noninterest-earning asset.

       
            The Savannah Bancorp, Inc. and Subsidiaries
                  Regulatory Capital Ratios

 The primary banking regulators of The Savannah Bancorp, Inc. and
 Subsidiary Banks have adopted capital requirements that specify the
 minimum level for which no prompt corrective  action is required. In
 addition, the Federal  Deposit  Insurance  Corporation  ("FDIC") has
 adopted FDIC insurance assessment rates based on certain "well-
 capitalized" risk-based and equity capital  ratios. Failure to meet 
 minimum capital requirements can result in the initiation of certain
 actions by the regulators that, if undertaken, could have a material 
 effect on the Company's and the Subsidiary Banks' financial 
 statements.  The following tables show the capital ratios for the
 Company and the Subsidiary Banks at December 31, 2007 and 2006:

 ($ in thousands)              Company                   Savannah   
 --------------------------------------------------------------------
                            2007       2006         2007         2006  
 --------------------------------------------------------------------
 Qualifying Capital
 ------------------
 Tier 1 capital          $81,049    $77,205      $50,433      $48,718
 Total capital            90,747     85,910       56,864       54,712

 Leverage Ratios
 ---------------
 Tier 1 capital to
 average assets            8.90%       9.57%        8.29%        8.58%
 
 Risk-based Ratios
 -----------------
 Tier 1 capital to
 risk-weighted
 assets                   10.49%      11.09%        9.84%       10.17%
 Total capital to
 risk-weighted assets     11.74%      12.34%       11.09%       11.42%


 ($ in thousands)               Bryan                 Harbourside
 --------------------------------------------------------------------
                            2007       2006         2007         2006
 --------------------------------------------------------------------
 Qualifying Capital
 ------------------
 Tier 1 capital          $18,045    $16,833      $ 8,681      $ 8,687
 Total capital            20,328     18,874        9,611        9,207
 
 Leverage Ratios
 ---------------
 Tier 1 capital to
 average assets            8.62%       9.23%       10.11%      15.55%

 Risk-based Ratios
 -----------------
 Tier 1 capital to
 risk-weighted
 assets                    9.88%      10.31%       11.86%      16.98%
 Total capital to
 risk-weighted assets     11.13%      11.56%       13.13%      18.00%

 Following are the regulatory capital ratios minimum ratio and the
 minimum ratios to be classified as a well-capitalized holding company
 or bank:

 --------------------------------------------------------------------
                                                Well-
  Regulatory Capital Guidelines:            Capitalized      Minimum
 --------------------------------------------------------------------
  Tier 1 capital to average assets               5.00%        4.00%
  Tier 1 capital to risk-weighted                6.00%        4.00%
  assets
  Total capital to risk-weighted assets         10.00%        8.00%


             The Savannah Bancorp, Inc. and Subsidiaries
                     Loan Concentration Schedule
       
                                   % of                 % of  % Dollar
 ($ in thousands)    12/31/07      Total     12/31/06   Total   Change
 ---------------------------------------------------------------------
 Non-residential 
  real estate
   Owner-
    occupied         $118,714        15      $ 90,848     13      31
   Non                            
    owner                         
    -occupied         118,904        15        98,032     14      21
   Construction        33,923         4        22,128      3      53
   Commercial                     
    land and                      
    lot                           
    development        38,127         5        35,610      5     7.1
 ---------------------------------------------------------------------
 Total non-                       
  residential                     
  real estate         309,668        39       246,618     35      26
 ---------------------------------------------------------------------
 Residential                      
  real estate                                      
   Owner-                         
    occupied -                    
    1-4 family         83,828        10        87,965     12    (4.7)
   Non owner-                     
    occupied -                    
    1-4 family        114,992        14        68,397     10      68
   Construction        57,541         7       110,412     15     (48)
   Residential                    
    land and                      
    lot                           
    development       109,718        14        93,060     12      18
   Home equity                    
    lines              43,322         5        40,794      6     6.2
 ---------------------------------------------------------------------
 Total                            
  residential                     
  real estate         409,401        50       400,628     55     2.2
 ---------------------------------------------------------------------
 Total real                       
  estate loans        719,069        89       647,246     90      11
 Commercial            71,370         9        57,737      8      24
 Consumer              18,692         2        16,628      2      12
 Unearned fees,                   
  net                    (480)       --          (693)    --     (31)
 ---------------------------------------------------------------------
 Total loans,                     
  net of                          
  unearned fees     $ 808,651       100     $ 720,918    100      12   
 =====================================================================
  

                   The Savannah Bancorp, Inc. and Subsidiaries
                 Consolidated Statement of Shareholders' Equity
                   For the Three Years Ended December 31, 2007
                       ($ in thousands, except share data)

                                            December 31,
 ---------------------------------------------------------------------
                                    2007           2006           2005
 ---------------------------------------------------------------------
 Common shares issued
   Shares, beginning of year   5,781,381      4,591,339      4,112,448
   Common stock issued            78,000             --        397,273
   Stock split / dividend             --      1,155,564             --
   Stock options exercised        64,416         34,478         81,618
 ---------------------------------------------------------------------
     Shares, end of year       5,923,797      5,781,381      4,591,339
 =====================================================================
 Treasury shares owned
   Shares, beginning of year         318            267            282
   Stock split / dividend             --             63            (15)
   Stock options exercised            --            (12)            --
 ---------------------------------------------------------------------
     Shares, end of year             318            318            267
 =====================================================================
 Common stock
   Balance, beginning of year $    5,781     $    4,591     $    4,112
   Common stock issued                78             --            397
   Stock split / dividend             --          1,156             --
   Stock options exercised            65             34             82
 ---------------------------------------------------------------------
     Balance, end of year          5,924          5,781          4,591
 ---------------------------------------------------------------------
 Additional paid-in capital
   Balance, beginning of year     35,747         36,257         24,232
   Common stock issued, net of
    issuance costs                 1,702             --         11,191
   Stock split / dividend             --         (1,156)            --
   Stock-based compensation
    expense                          147            299             --
   Stock options exercised           683            272            494
   Stock options tax benefit          --             75            340
 ---------------------------------------------------------------------
     Balance, end of year         38,279         35,747         36,257
 ---------------------------------------------------------------------
 Retained earnings
   Balance, beginning of year     25,681         18,272         11,539
   Net income                      7,636         10,002          9,040
   Cash dividends paid            (2,805)        (2,593)        (2,307)
 ---------------------------------------------------------------------
     Balance, end of year         30,512         25,681         18,272
 ---------------------------------------------------------------------
 Treasury stock
   Balance, beginning of year         (4)            (4)            (4)
   Stock options exercised            --             --             --
 ---------------------------------------------------------------------
     Balance, end of year             (4)            (4)            (4)
 ---------------------------------------------------------------------
 Accumulated other comprehensive
  income (loss), net
   Balance, beginning of year       (631)          (573)           192
   Change in unrealized losses
    on securities available for
    sale, net of tax   662           178           (522)
   Net change in fair value of
    derivative instruments,
    net of tax                     1,530           (236)          (243)
 ---------------------------------------------------------------------
     Balance, end of year          1,561           (631)          (573)
 ---------------------------------------------------------------------
 Total shareholders' equity   $   76,272     $   66,574     $   58,543
 =====================================================================
The Savannah Bancorp, Inc.
John C. Helmken II, President & CEO
  (912) 629-6486
Robert B. Briscoe, Chief Financial Officer
  (912) 629-6525