SYS-CON MEDIA Authors: Kevin Benedict, Rich Waidmann, Pat Romanski, Michael Jannery, Javier Paniza

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Severn Bancorp, Inc. Announces First Quarter Earnings

ANNAPOLIS, Md., April 16, 2014 /PRNewswire/ -- Severn Bancorp, Inc., (Nasdaq: SVBI) parent company of Severn Savings Bank, FSB ("Severn"), today announced net income of $867,000 or $.03 per share for the first quarter of 2014, an increase of approximately 40% compared to net income of $621,000 or $.03 per share for first quarter of 2013. Results reported also represent a significant increase in earnings compared to a net loss of $5,470,000 or $(.58) per share for the fourth quarter of 2013. Earnings per share is calculated using net income available for common shareholders, which is net income less preferred stock dividends.

"We are encouraged to be able to report a profit for this first quarter after successfully concluding almost $50 million of problem asset sales in late 2013," stated Alan J. Hyatt, president and chief executive officer. Mr. Hyatt continued, "Severn made decisions to position the bank for success as one of the few remaining local community banks, and this is a first step in the right direction. We are now dedicated to expanding technology and service offerings rather than dealing with problems. Severn is proud to continue the tradition of offering the personal service that residents and business owners in Anne Arundel County have come to expect from a community bank."

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 $790 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, 2013.


Severn Bancorp, Inc.

Selected Financial Data

(dollars in thousands, except per share data)

(Unaudited)














For the Three Months Ended





March 31,

December 31,

September 30,

June 30,

March 31,





2014

2013

2013

2013

2013










Summary Operating Results:







Interest income

$              7,922

$              7,984

$              8,321

$              8,574

$              8,913


Interest expense

2,115

2,204

2,301

2,364

2,315



Net interest income

5,807

5,780

6,020

6,210

6,598


Provision for loan losses

200

3,700

12,200

300

320



Net interest income (loss) after provision









for loan losses

5,607

2,080

(6,180)

5,910

6,278


Non-interest income

976

1,032

1,227

1,742

1,528


Non-interest expense

5,706

8,581

7,419

7,331

6,741


Income (loss) before income tax provision

877

(5,469)

(12,372)

321

1,065


Income tax provision

10

1

8,176

89

444



Net income (loss)

$                 867

$             (5,470)

$           (20,548)

$                 232

$                 621










Per Share Data:







Basic earnings (loss) per share

$                 0.03

$                (0.58)

$                (2.08)

$                (0.01)

$                 0.03


Diluted earnings (loss) per share

$                 0.03

$                (0.58)

$                (2.08)

$                (0.01)

$                 0.03


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

10,103,153

10,066,679

10,066,679

10,108,470

10,100,454










Performance Ratios:







Return on average assets

0.11%

-0.66%

-2.45%

0.03%

0.07%


Return on average equity

1.06%

-6.31%

-19.07%

0.21%

0.57%


Net interest margin

3.23%

3.15%

3.21%

3.29%

3.47%


Efficiency ratio*

84.90%

88.15%

83.51%

76.01%

71.86%












*

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














As of





March 31,

December 31,

September 30,

June 30,

March 31,





2014

2013

2013

2013

2013










Balance Sheet Data:







Total assets

$           793,433

$           799,603

$           815,198

$           839,053

$           849,598


Total loans receivable

614,986

614,552

608,769

642,801

653,595


Allowance for loan losses

(11,225)

(11,739)

(12,270)

(12,765)

(15,465)



Net loans

603,761

602,813

596,499

630,036

638,130


Deposits

562,964

571,249

580,915

583,271

593,900


Borrowings

115,000

115,000

115,000

115,000

115,000


Stockholders' equity

83,202

82,769

88,496

109,313

109,349


Bank's Tier 1 core capital to total assets

13.2%

12.9%

13.3%

14.9%

14.8%


Book value per share

$                5.62

$                5.57

$                6.14

$                8.21

$                8.22










Asset Quality Data:







Non-accrual loans

$             12,567

$             11,035

$             22,771

$             37,537

$             35,064


Foreclosed real estate

5,561

8,972

13,877

13,297

14,895



Total non-performing assets

18,128

20,007

36,648

50,834

49,959


Total non-accrual loans to net loans

2.1%

1.8%

3.8%

6.0%

5.5%


Total non-accrual loans to total assets

1.6%

1.4%

2.8%

4.5%

4.1%


Allowance for loan losses

11,225

11,739

12,270

12,765

15,465


Allowance for loan losses to total loans

1.8%

1.9%

2.0%

2.0%

2.4%


Allowance for loan losses to total








non-accrual loans

89.3%

106.4%

53.9%

34.0%

44.1%


Total non-performing assets to total assets

2.3%

2.5%

4.5%

6.1%

5.9%


Non-accrual troubled debt restructurings (included above)

2,390

2,091

4,750

5,908

6,774


Performing troubled debt restructurings

33,149

34,827

39,548

45,851

46,607

 

SOURCE Severn Bancorp, Inc.

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