Severn Bancorp Announces Second Quarter Earnings

               Severn Bancorp Announces Second Quarter Earnings

PR Newswire

ANNAPOLIS, Md., July 16, 2013

ANNAPOLIS, Md., July 16, 2013 /PRNewswire/ --Severn Bancorp, Inc., (Nasdaq:
SVBI) parent company of Severn Savings Bank, FSB ("Severn"), today announced
net income of $232,000 or $(.01) per share for the second quarter of 2013
compared to net income of $1,203,000 or $.08 per share for the second quarter
of 2012 and compared to net income of $621,000 or $.03 per share, for the
quarter ended March 31, 2013. Earnings per share is calculated using net
income available for common shareholders, which is net income less preferred
stock dividends.

"Although we had what amounts to a break even quarter, Severn continues to
make great strides in resolving problem assets. Severn is aggressively
liquidating foreclosed real estate, and is rapidly and decisively taking steps
to rid itself of the remaining 'legacy assets' that were originated some years
ago," stated Alan J. Hyatt, president and chief executive officer. Mr. Hyatt
continued, "We expect to see earnings improve shortly after we rid ourselves
of the last remnants of these assets. Despite absorbing over $2 million in
expenses related to relieving the balance sheet of these problems during the
first half of this year, Severn was able to generate a profit. We have a
strong company emerging, and we should continue to increase our market share
as one of the remaining community banks in the Anne Arundel County
marketplace."

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 $840 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, 2012.

Severn Bancorp, Inc.
Selected Financial Data
(dollars in thousands, except per share data)
(Unaudited)
                    For the Three Months Ended
                    June 30,    March 31,   December    September   June 30,
                                            31,         30,
                    2013        2013        2012        2012        2012
Summary Operating
Results:
 Interest income    $      $      $      $      $    
                     8,574     8,913     9,412     9,104      10,276
 Interest expense   2,364       2,315       2,587       3,027       3,336
    Net interest    6,210       6,598       6,825       6,077       6,940
    income
 Provision for loan 300         320         300         -           -
 losses
    Net interest
    income after
    provision
         for loan   5,910       6,278       6,525       6,077       6,940
         losses
 Non-interest       1,881       1,572       1,478       1,039       835
 income
 Non-interest       7,470       6,785       5,815       5,961       5,732
 expense
 Income before
 income tax         321         1,065       2,188       1,155       2,043
 provision
 Income tax         89          444         914         481         840
 provision
    Net income      $      $      $      $      $    
                       232      621    1,274       674     1,203
Per Share Data:
 Basic earnings per ($      $      $      $      $    
 share                         0.03     0.09     0.03     
                    0.01)                                          0.08
 Diluted earnings   ($      $      $      $      $    
 per share                     0.03     0.09     0.03     
                    0.01)                                          0.08
 Common stock       $      $      $      $      $    
 dividends per                                      
 share              -          -          -          -           -
 Average basic      10,066,679  10,066,679  10,066,679  10,066,679  10,066,679
 shares outstanding
 Average diluted    10,108,470  10,100,454  10,066,679  10,066,679  10,066,679
 shares outstanding
Performance Ratios:
 Return on average  0.03%       0.07%       0.14%       0.08%       0.13%
 assets
 Return on average  0.21%       0.57%       1.19%       0.63%       1.13%
 equity
 Net interest       3.29%       3.47%       3.33%       3.09%       3.41%
 margin
 Efficiency ratio*  76.42%      72.01%      63.70%      71.19%      64.96%
    *    The efficiency ratio is general and administrative expenses as a
         percentage of net interest income plus non-interest income
                    As of
                    June 30,    March 31,   December    September   June 30,
                                            31,         30,
                    2013        2013        2012        2012        2012
Balance Sheet Data:
 Total assets       $      $      $      $      $    
                    839,053     849,598     852,118     862,628      897,390
 Total loans        642,801     653,595     669,187     688,405     687,796
 receivable
 Allowance for loan (12,765)    (15,465)    (17,478)    (23,180)    (24,097)
 losses
    Net loans       630,036     638,130     651,709     665,225     663,699
 Deposits           583,271     593,900     599,394     609,772     643,653
 Borrowings         115,000     115,000     115,000     115,000     115,000
 Stockholders'      109,313     109,349     108,996     108,004     107,612
 equity
 Bank's Tier 1 core
 capital to total   14.9%       14.8%       14.6%       14.1%       13.4%
 assets
 Book value per     $      $      $      $      $    
 share                8.21     8.22     8.18     8.08     
                                                                    8.04
Asset Quality Data:
 Non-accrual loans  $      $      $      $      $    
                     37,537     35,064     37,495     42,596      38,965
 Foreclosed real    13,297      14,895      11,441      13,801      16,329
 estate
    Total
    non-performing  50,834      49,959      48,936      56,397      55,294
    assets
 Total non-accrual  6.0%        5.5%        5.8%        6.4%        5.9%
 loans to net loans
 Total non-accrual
 loans to total     4.5%        4.1%        4.4%        4.9%        4.3%
 assets
 Allowance for loan 12,765      15,465      17,478      23,180      24,097
 losses
 Allowance for loan
 losses to total    2.0%        2.4%        2.6%        3.4%        3.5%
 loans
 Allowance for loan
 losses to total
    non-accrual     34.0%       44.1%       46.6%       54.4%       61.8%
    loans
 Total
 non-performing     6.1%        5.9%        5.7%        6.5%        6.2%
 assets to total
 assets
 Non-accrual
 troubled debt      6,771       6,774       5,635       12,574      9,515
 restructurings
 (included above)
 Performing
 troubled debt      41,544      46,607      56,448      51,230      51,034
 restructurings



SOURCE Severn Bancorp, Inc.

Website: http://www.severnbank.com
Contact: Thomas G. Bevivino, Chief Operating Officer & Executive Vice
President, Email: tbevivino@severnbank.com, Phone: 410.260.2000
 
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