Severn Bancorp Announces Fourth Quarter Results and Significant Reduction in Non-Performing Assets

 Severn Bancorp Announces Fourth Quarter Results and Significant Reduction in
                            Non-Performing Assets

PR Newswire

ANNAPOLIS, Md., Jan. 24, 2014

ANNAPOLIS, Md., Jan. 24, 2014 /PRNewswire/ --Severn Bancorp, Inc., (Nasdaq:
SVBI) ("Company") parent company of Severn Savings Bank, FSB ("Severn"), today
announced that non-performing assets, comprised of other real estate owned and
non-accrual loans, have been reduced to $20,007,000, or 2.5% of total assets,
as of December 31, 2013 compared to $48,936,000, or 5.7% of total assets, as
of December 31, 2012.

"Our organization has been focused on cleaning up our balance sheet with the
goal being to start 2014 with a clean and strong financial position," said
Alan J. Hyatt, president and chief executive officer. Mr. Hyatt continued,
"Severn sold over $48 million in underperforming loans and $9 million in real
estate acquired through foreclosure in 2013, with several million dollars'
worth of real estate pending sale as of 2013 year end."

As a result of these transactions and conservatively calculating reserves and
charge offs, the Company incurred a net loss of $5,470,000 or $(.58) per share
for the fourth quarter of 2013, compared to net income of $1,274,000 or $.09
per share for the fourth quarter of 2012. Net loss was $25,165,000, or
$(2.64) per share for the year ended December 31, 2013, compared to net income
of $3,728,000, or $.22 per share for the year ended December 31, 2012.
Earnings per share is calculated using net income available for common
shareholders, which is net income less preferred stock dividends.

"We are fortunate that our organization has been well capitalized making it
able to withstand the balance sheet cleanup and the resulting losses," said
Mr. Hyatt. Mr. Hyatt continued, "Severn now looks forward to progress and
growth as its balance sheet and the overall economic conditions have continued
to improve. Severn remains one of the area's few community banks and continues
to offer exceptional service that some businesses and individuals prefer over
the larger out-of-town based banks."

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 $800 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
                    December    September   June 30,    March 31,  December
                    31,         30,                                31,
                    2013        2013        2013        2013       2012
Summary Operating
Results:
 Interest income    $      $      $      $      $    
                     7,984     8,321     8,574      8,913   9,412
 Interest expense   2,204       2,301       2,364       2,315      2,587
   Net interest     5,780       6,020       6,210       6,598      6,825
   income
 Provision for loan 3,700       12,200      300         320        300
 losses
   Net interest
   income (loss)
   after provision
         for loan   2,080       (6,180)     5,910       6,278      6,525
         losses
 Non-interest       1,196       1,312       1,881       1,572      1,478
 income
 Non-interest       8,745       7,504       7,470       6,785      5,815
 expense
 Income (loss)
 before income tax  (5,469)     (12,372)    321         1,065      2,188
 provision
 Income tax         1           8,176       89          444        914
 provision
   Net income       $      $      $      $      $    
   (loss)            (5,470)   (20,548)       232            1,274
                                                        621
Per Share Data:
 Basic earnings     $      $      $      $      $    
 (loss) per share     (0.58)   (2.08)   (0.01)           
                                                        0.03       0.09
 Diluted earnings   $      $      $      $      $    
 (loss) per share     (0.58)   (2.08)   (0.01)           
                                                        0.03       0.09
 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    10,066,679  10,066,679  10,108,470  10,100,454 10,066,679
 shares outstanding
Performance Ratios:
 Return on average  -0.66%      -2.45%      0.03%       0.07%      0.14%
 assets
 Return on average  -6.31%      -19.07%     0.21%       0.57%      1.19%
 equity
 Net interest       3.15%       3.21%       3.29%       3.47%      3.33%
 margin
 Efficiency ratio*  88.43%      83.70%      76.42%      72.01%     63.70%
   *     The efficiency ratio is general and administrative expenses as a
         percentage of net interest income plus non-interest income
                    As of
                    December    September   June 30,    March 31,  December
                    31,         30,                                31,
                    2013        2013        2013        2013       2012
Balance Sheet Data:
 Total assets       $      $      $      $      $    
                    799,603     815,198     839,053      849,598   852,118
 Total loans        614,552     608,769     642,801     653,595    669,187
 receivable
 Allowance for loan (11,739)    (12,270)    (12,765)    (15,465)   (17,478)
 losses
   Net loans        602,813     596,499     630,036     638,130    651,709
 Deposits           571,249     580,915     583,271     593,900    599,394
 Borrowings         115,000     115,000     115,000     115,000    115,000
 Stockholders'      82,769      88,496      109,313     109,349    108,996
 equity
 Bank's Tier 1 core
 capital to total   12.9%       13.3%       14.9%       14.8%      14.6%
 assets
 Book value per     $      $      $      $      $    
 share                5.57     6.14     8.21             
                                                        8.22      8.18
Asset Quality Data:
 Non-accrual loans  $      $      $      $      $    
                     11,035     22,771     37,537      35,064   37,495
 Foreclosed real    8,972       13,877      13,297      14,895     11,441
 estate
   Total
   non-performing   20,007      36,648      50,834      49,959     48,936
   assets
 Total non-accrual  1.8%        3.8%        6.0%        5.5%       5.8%
 loans to net loans
 Total non-accrual
 loans to total     1.4%        2.8%        4.5%        4.1%       4.4%
 assets
 Allowance for loan 11,739      12,270      12,765      15,465     17,478
 losses
 Allowance for loan
 losses to total    1.9%        2.0%        2.0%        2.4%       2.6%
 loans
 Allowance for loan
 losses to total
   non-accrual      106.4%      53.9%       34.0%       44.1%      46.6%
   loans
 Total
 non-performing     2.5%        4.5%        6.1%        5.9%       5.7%
 assets to total
 assets
 Non-accrual
 troubled debt      2,091       4,750       5,908       6,774      5,635
 restructurings
 (included above)
 Performing
 troubled debt      34,564      39,548      45,851      46,607     56,448
 restructurings



SOURCE Severn Bancorp, Inc.

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