2014

3rd Quarter Earnings Hold Steady At Severn Bancorp

ANNAPOLIS, Md., Oct. 16, 2012 /PRNewswire/ -- Severn Bancorp, Inc., (Nasdaq: SVBI) parent company of Severn Savings Bank, FSB ("Severn"), today announced net income of $558,000 or $.02 per share for the third quarter of 2012 compared to a net income of $551,000 or $.01 per share for the third quarter of 2011 and compared to net income of $1,097,000 or $.07 per share, for the quarter ended June 30, 2012.  Earnings per share is calculated using net income available for common shareholders, which is net income less preferred stock dividends.

"Although we had net earnings in the third quarter, we need those earnings to improve.  While Severn continues to aggressively deal with its non-performing and non-accrual loans, and has been successfully liquidating real estate acquired through foreclosure, it is a process that will continue to take time to resolve," stated Alan J. Hyatt, president and chief executive officer.  Mr. Hyatt continued "We have been staying very busy expanding lines of business and launching new products and channels, such as Mobile Banking, to keep us current and competitive in the market.  Severn is committed to providing the resources, products and expertise of a larger financial institution, along with the local decision making, market knowledge and personal service of a community bank.  We want to be able to offer value to our customers and an excellent banking experience. "

About Severn Savings Bank:

Founded in 1946, Severn is a full-service community bank offering a wide array of personal and commercial banking products as well as residential and commercial mortgage lending. It has assets of approximately $860 million and four branches located in Annapolis, Edgewater and Glen Burnie, Maryland. The bank specializes in exceptional customer service and holds itself and its employees to a high standard of community contribution. Severn is on the Web at www.severnbank.com.

Forward Looking Statements

In addition to the historical information contained herein, this press release contains forward-looking statements that involve risks and uncertainties that may be affected by various factors that may cause actual results to differ materially from those in the forward-looking statements.  The forward-looking statements contained herein include, but are not limited to, those with respect to management's determination of the amount of loan loss reserve and statements about the economy.  The words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "will," "would," "could," "should," "guidance," "potential," "continue," "project," "forecast," "confident," and similar expressions are typically used to identify forward-looking statements.  Severn's operations and actual results could differ significantly from those discussed in the forward-looking statements.  Some of the factors that could cause or contribute to such differences include, but are not limited to, changes in the economy and interest rates both in the nation and in Severn's general market area, federal and state regulation, competition and other factors detailed from time to time in Severn's filings with the Securities and Exchange Commission (the "SEC"), including "Item 1A. Risk Factors" contained in Severn's Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

Severn Bancorp, Inc.

Selected Financial Data

(dollars in thousands, except per share data)

(Unaudited)























For the Three Months Ended





September 30,

June 30,

March 31,

December 31,

September 30,





2012

2012

2012

2011

2011










Summary Operating Results:







Interest income

$              9,104

$             10,276

$             10,265

$             10,558

$             10,991


Interest expense

3,027

3,336

3,552

3,659

3,856



Net interest income

6,077

6,940

6,713

6,899

7,135


Provision for loan losses

-

-

465

141

850



Net interest income after provision









for loan losses

6,077

6,940

6,248

6,758

6,285


Non-interest income

1,039

835

891

873

628


Non-interest expense

6,152

5,906

6,311

5,772

5,959


Income (loss) before income taxes

964

1,869

828

1,859

954


Income tax expense (benefit)

406

772

356

792

403


Net income (loss)

$                 558

$              1,097

$                 472

$              1,067

$                 551










Per Share Data:







Basic earnings (loss) per share

$                0.02

$                0.07

$                0.01

$                0.06

$                0.01


Diluted earnings (loss) per share

$                0.02

$                0.07

$                0.01

$                0.06

$                0.01


Common stock dividends per share

$                   -

$                   -

$                   -

$                   -

$                   -


Average basic shares outstanding

10,066,679

10,066,679

10,066,679

10,066,679

10,066,679


Average diluted shares outstanding

10,066,679

10,066,679

10,066,679

10,066,679

10,066,679










Performance Ratios:







Return on average assets

0.06%

0.12%

0.05%

0.12%

0.06%


Return on average equity

0.52%

1.04%

0.45%

1.01%

0.52%


Net interest margin

3.09%

3.41%

3.27%

3.27%

3.32%


Efficiency ratio*

73.88%

67.20%

66.99%

64.84%

60.76%












*

The efficiency ratio is general and administrative expenses as a percentage of net interest income plus non-interest income














As of





September 30,

June 30,

March 31,

December 31,

September 30,





2012

2012

2012

2011

2011










Balance Sheet Data:







Total assets

$           861,766

$           896,644

$           900,471

$           900,628

$           926,013


Total loans receivable

695,198

691,647

701,596

719,241

741,528


Allowance for loan losses

(23,180)

(24,097)

(25,795)

(25,938)

(30,358)



Net loans

672,018

667,550

675,801

693,303

711,170


Deposits

609,772

643,653

650,473

652,757

678,717


Borrowings

115,000

115,000

115,000

115,000

115,000


Stockholders' equity

107,142

106,866

106,051

105,930

105,215


Bank's Tier 1 core capital to total assets

14.1%

13.3%

13.1%

13.0%

12.4%


Book value per share

$                8.00

$                7.97

$                7.89

$                7.88

$                7.80










Asset Quality Data:







Non-accrual loans

$             29,790

$             29,450

$             17,882

$             23,912

$             26,911


Non-accrual troubled debt restructurings

12,574

9,515

11,677

7,520

8,713


Foreclosed real estate

13,801

16,329

19,853

19,932

19,158



Total non-performing assets

56,165

55,294

49,412

51,364

54,782


Performing troubled debt restructurings

51,230

51,034

51,034

52,255

54,175


Total non-accrual loans to net loans

6.3%

5.8%

4.4%

4.5%

5.0%


Allowance for loan losses

23,180

24,097

25,795

25,938

30,358


Allowance for loan losses to total loans

3.3%

3.5%

3.7%

3.6%

4.1%


Allowance for loan losses to total








non-performing loans

54.7%

61.8%

87.3%

82.5%

85.2%


Total non-accrual loans to total assets

4.9%

4.3%

3.3%

3.5%

3.8%


Total non-performing assets to total assets

6.5%

6.2%

5.5%

5.7%

5.9%










 

 

SOURCE Severn Bancorp, Inc.



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