Severn Bancorp Returns to Profitability in Second Quarter

ANNAPOLIS, Md., July 16 /PRNewswire-FirstCall/ -- Severn Bancorp, Inc., (Nasdaq: SVBI) parent company of Severn Savings Bank, FSB ("Severn"), today announced results for the quarter and six months ended June 30, 2010.  Net income for the second quarter was $593,000 (unaudited), or $.02 per share, compared to net loss of $6.9 million (unaudited), or ($.73) per share for the second quarter of 2009.  Net income was $65,000, or ($.08) per share for the six months ended June 30, 2010, compared to net loss of $8.2 million, or ($.90) per share for the six months ended June 30, 2009.  At June 30, 2010, Severn's regulatory capital ratios continued to exceed the levels required to be considered "well capitalized" under applicable federal banking regulations, including its core (leverage) ratio of approximately 11.5% compared to the regulatory requirement of 5% for "well capitalized" status.

"We are gratified by these results and are pleased that our hard work is resulting in a turn around in the direction of our earnings," said Alan J. Hyatt, president and chief executive officer.  "However, we remain uncertain about the country's economy and how long conditions, including unemployment, will continue to negatively impact our local economy." Mr. Hyatt continued, "While non-performing assets overall have decreased, they remain a challenge, and we continue to work with borrowers to return these assets to performing status.  We also remain focused on providing full service banking to our customers with products and services that will increase shareholder value."

About Severn

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 $1 billion 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.  The Company'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 Company's general market area, federal and state regulation, competition and other factors detailed from time to time in the Company's filings with the Securities and Exchange Commission (the "SEC"), including "Item 1A. Risk Factors" contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009.

SOURCE Severn Bancorp, Inc.