UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): November 23, 2012

The Savannah Bancorp, Inc.

(Exact name of registrant as specified in its charter)

25 Bull Street, Savannah, Georgia 31401

(Address of principal executive offices) (Zip Code)

(912) 629-6486

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

x          Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01. Other Events.

This Current Report on Form 8-K is being filed pursuant to a memorandum of understanding regarding settlement of certain litigation relating to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of August 7, 2012, entered into among The Savannah Bancorp Inc. (“SAVB”) and SCBT Financial Corporation (“SCBT”), pursuant to which SAVB will, subject to the satisfaction of certain terms and conditions, merge with and into SCBT, with SCBT continuing as the surviving entity (the “Merger”). This Current Report on Form 8-K supplements disclosures made in the definitive joint proxy statement/prospectus of SAVB and SCBT, dated October 26, 2012 previously mailed to shareholders of SAVB and SCBT and filed on October 26, 2012 with the Securities and Exchange Commission as part of a registration statement of SCBT on Form S-4 (the “Joint Proxy Statement/Prospectus”).

Settlement of Litigation

As previously disclosed at page 108 of the Joint Proxy Statement/Prospectus, on October 11, 2012, a purported shareholder of SAVB filed a lawsuit in the Supreme Court of the State of New York (the “Court”), captioned Rational Strategies Fund v. Robert H. Demere, Jr. et al., No. 653566/2012 (the “Action”), naming SAVB, members of SAVB’s board of directors and SCBT as defendants. The Action alleges that SAVB, SAVB’s directors and SCBT breached duties and/or aided and abetted such breaches by failing to disclose certain material information about the Merger. Among other relief, the complaint seeks to enjoin the Merger and the payment of attorneys’ fees and expenses.

On November 23, 2012, defendants entered into a memorandum of understanding (the “Memorandum of Understanding”) with plaintiff regarding a settlement of the Action. Pursuant to the Memorandum of Understanding, defendants agreed, among other things, to disclose the additional information set forth below regarding the Merger, which should be read in the context of, and together with, the disclosures in the Joint Proxy Statement/Prospectus. While the defendants believe that the original Joint Proxy Statement/Prospectus disclosed all material facts concerning the proposed transaction, the defendants agreed to make the additional disclosures in order to settle the action and avoid the burden, expense and uncertainty of further litigation. The agreement to make the additional disclosures specified herein does not constitute an acknowledgement that these additional disclosures are required under any applicable, state or federal law, statute, rule or regulation.

The Memorandum of Understanding provides that the parties will enter into a stipulation of settlement. The stipulation of settlement will be subject to customary conditions, including court approval following notice to SAVB’s shareholders. In the event that the parties enter into a stipulation of settlement, a hearing will be scheduled at which the Court will consider the fairness, reasonableness, and adequacy of the settlement. If the settlement is finally approved by the Court, it will resolve and release all claims in the Action that were or could have been brought challenging any aspect of the Merger, the Merger Agreement, and any disclosure made in connection therewith, pursuant to terms that will be disclosed to shareholders prior to final approval of the settlement. There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the Court will approve the settlement even if the parties were to enter into such stipulation. In such event, the proposed settlement as contemplated by the Memorandum of Understanding may be terminated.

Employment Agreements between SCBT and each of John C. Helmken II and Jerry O’Dell Keith

As described in the section of the Joint Proxy Statement/Prospectus entitled “The Merger—Interests of SAVB’s Directors and Executive Officers in the Merger,” each of Messrs. Helmken and Keith entered into an employment agreement with SCBT that becomes effective upon the closing of the Merger.  SCBT indicated in the course of discussions with SAVB regarding the Merger that it wished to have Mr. Helmken’s employment agreement finalized concurrently with entering into the Merger Agreement.  Mr. Keith’s agreement was negotiated following the execution of the Merger Agreement. In addition to the terms of the employment agreements described in the Joint Proxy Statement/Prospectus, the employment agreements provide for an annual base salary of $255,000 for Mr. Helmken and $195,000 for Mr. Keith.  Both Mr. Helmken and Mr. Keith are eligible to participate in SCBT’s annual performance-based incentive plans for fiscal year 2013 in accordance with the terms and conditions for similarly situated employees of SCBT under such plans (with such terms and conditions not yet established) and each of Messrs. Helmken and Keith is eligible for (i) an annual cash incentive target of 30% of his annual base salary and (ii) an annual equity incentive target of 10% of his annual base salary, in all cases subject to the executive’s continued employment through the applicable payment date.  Except as described in the Joint Proxy Statement/Prospectus and above, there are no agreements or understandings between either of Mr. Helmken or Mr. Keith, on the one hand, and SCBT, on the other hand.

Advisory Board

As described in the section of the Joint Proxy Statement/Prospectus entitled “The Merger—Interests of SAVB’s Directors and Executive Officers in the Merger,” each non-employee member of SAVB’s board of directors will serve on an advisory board established by SCBT to monitor the company’s performance and operations in the Savannah, Georgia metropolitan statistical area.  In connection with serving on the advisory board, each advisory board member will receive for a three-year period following the closing date a cash retainer consistent with the board retainer the SAVB directors currently receive with respect to services provided to the SAVB board of directors, and each board member has agreed not to engage in any competitive activity or solicit clients or employees of SAVB or SCBT during that three-year period.  SCBT indicated in the course of discussions with SAVB regarding the Merger that the ongoing services of the SAVB board members and the agreement of the SAVB board members to the restrictive covenants referenced above were important to the success of the Merger.  The terms of the advisory board agreements were negotiated and finalized concurrently with the negotiation of the terms of the Merger Agreement.

Background of the Merger

·                  As described on pages 72-73 of the Joint Proxy Statement/Prospectus, STRH contacted SCBT, after consultation with SAVB, toward the end of June 2012 to ascertain SCBT’s continued interest in exploring a potential combination with SAVB. This contact was made on the basis of STRH’s professional judgment that SCBT’s continued interest in a potential business combination with SAVB was viewed by SAVB and STRH as being the strongest and most credible of all of the parties who had previously communicated an interest in such a transaction.

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·                  As described on page 73 of the Joint Proxy Statement/Prospectus, following the June 29, 2012 meeting between SCBT representatives and SAVB directors and representatives of STRH, J. Curtis Lewis III, Chairman of SAVB’s board of directors, received an initial letter from the CEO of SCBT proposing a combination of SAVB and SCBT through an all-stock transaction. The letter proposed preliminary indicative consideration to SAVB’s shareholders valued in the range of $10.00 per share, based on a fixed exchange ratio of shares of SCBT common stock for each share of common stock of SAVB. The proposal was based solely on a preliminary review of public information and was subject to numerous conditions including SCBT’s due diligence on SAVB and contemplated that the terms of a final proposal, including pricing terms, would be negotiated following due diligence by the respective companies.

·                  As described on pages 73-74 of the Joint Proxy Statement/Prospectus, on July 11, 2012, SAVB’s board of directors held a special meeting during which SCBT’s interest in a potential transaction was thoroughly discussed. SAVB’s board of directors received a presentation from STRH that included a preliminary financial analysis of SCBT’s proposal.  SAVB’s board of directors and representatives of STRH discussed STRH’s analysis of SAVB’s intrinsic value and SAVB’s prospects as a stand-alone company, including estimates of earnings per share and net income available to common shareholders. SAVB’s board of directors also discussed other strategic alternatives, including the potential asset sale and potential capital raise the SAVB board had been considering, including the fact that since SAVB’s board began pursuing the asset sale and capital raise in the Fall of 2011, the terms and conditions of both the potential capital raise and asset sale had become significantly less favorable to SAVB and its existing shareholders.

·                  As described on page 74 of the Joint Proxy Statement/Prospectus, during July 25 and July 26, SAVB and SCBT maintained contact through their representatives and discussed several possible pricing scenarios. The consideration offered in these scenarios varied from $8.00 per share of SAVB common stock to $9.00 per share of SAVB common stock, the latter figure being reflected in the revised proposal received by Mr. Lewis from the CEO of SCBT on July 26, 2012, subject to certain conditions, as described in the Joint Proxy Statement/Prospectus.

·                  As described on pages 74-75 of the Joint Proxy Statement/Prospectus, SAVB’s board of directors reviewed and thoroughly discussed SCBT’s July 26 proposal at a meeting held on July 27, 2012 with representatives of STRH, FIG and Alston & Bird. SAVB’s board of directors and representatives of STRH discussed STRH’s analysis of SAVB’s intrinsic value and SAVB’s prospects as a stand-alone company. STRH reiterated and updated its analysis, discussed above, showing that, subject to certain assumptions, including the successful completion of the capital raise on the terms discussed below, the stand-alone discounted future value of SAVB would be in the range of $4.08 to $6.73 per share.  The board of directors also received a preliminary financial analysis from FIG comparing the asset sale and capital raise with the potential transaction with SCBT. This analysis showed that, subject to certain assumptions, including completion of the asset sale and the capital raise, SAVB’s common stock would have an estimated value of between $6.42 and $7.89 per share if SAVB remained independent.

At the July 27 meeting, STRH’s preliminary analysis of SCBT’s proposal included an analysis of various transaction multiples, as well as an analysis of a pro forma balance sheet and pro forma credit and capital ratios. STRH’s analysis of SAVB’s prospects as a stand-alone company indicated that, assuming SAVB undertook a $55 million convertible preferred capital raise at a $5.00 conversion price and a 6% annual coupon and subject to certain other assumptions, the discounted future value of SAVB’s common stock was approximately $5.58 per share.  The analysis also estimated that, subject to the same assumptions, earnings to common shareholders and fully diluted earnings per share would be as follows in the years following the capital raise (all numbers in thousands):

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(1)         Assumes conversion of convertible preferred stock in Year 4.

(2)         Tax adjustments reflect an estimated tax reversal in Year 1, no tax provision in Year 2, and fully taxable incomes in Year 3, Year 4 and Year 5.

STRH’s analysis also showed that the capital raise, if successfully conducted on the terms described above, would result in an estimated 60% ownership dilution to current common shareholders of SAVB.

Opinion of SunTrust Robinson Humphrey, Inc.

·                  As described in the section of the Joint Proxy Statement/Prospectus entitled “Opinion of SunTrust Robinson Humphrey, Inc.—Selected Precedent Transactions Analysis,” STRH reviewed and analyzed certain financial data related to 19 completed bank mergers and acquisitions announced between January 1, 2010 and August 6, 2012, which involved target banks based in the United States with the following characteristics: (a) total assets, for the most recent quarter reported, of between $500 million and $2.5 billion and (b) ratio of nonperforming assets to total assets, for the most recent quarter reported, between 3.0% and 10.0% (the “Size/Asset Quality Precedent Transactions”). The transaction multiples for each of these transactions is listed below:

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(1) LTM Pre-Pm ROAA defined as LTM Pre-Pre Net Revenue (Net Interest Income + Total Noninterest Income - Total Noninterest Expense) / LTM Average Assets.

(2) Price / LTM PPNR defined as Deal Value / LTM Pre-Pre Net Revenue (Net Interest Income + Total Noninterest Income - Total Noninterest Expense).

(3) Price / Adjusted TBV and Adjusted Core Deposit Premium based on transaction gross credit mark adjusted for current reserves balance and tax effected (35%), Multiples over 55 deemed ‘NM’.

(4) Target issues new stock to acquirer in each transaction.

(5) P/E multiples greater than 50.0x or negative are deemed ‘NM’.

Source:  SNL Financial and public filings.

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The Size/Asset Quality Precedent Transactions implied a per share value for SAVB common stock of between $7.20 and $11.50, based upon the average implied valuations from the 25th and 75th percentile valuation metrics.

STRH reviewed and analyzed certain financial data related to 28 completed bank mergers and acquisitions in the Southeast region of the United States announced between January 1, 2010 and August 6, 2012. These transactions involved banks in the Southeast region of the United States with the following characteristics: (a) transaction value between $10 million and $150 million and (b) target banks are based in AL, AK, FL, GA, LA, MS, NC, SC or TN (the “Geographic Precedent Transactions”). The transaction multiples for each of these transactions is listed below:

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