SEVERN BANCORP 
By 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.
Severn Bancorp, Inc.
Selected Financial Data
(dollars in thousands, except per share data)
(Unaudited)
For the Three Months Ended
June 30, March 31, December 31,
2010 2010 2009
---- ---- ----
Summary
Operating
Results:
Interest
income $13,045 $12,596 $12,822
Interest
expense 4,995 4,980 5,667
----- ----- -----
Net interest
income 8,050 7,616 7,155
Provision for
loan losses 1,000 2,544 5,458
----- ----- -----
Net interest
income (loss)
after
provision for
loan losses 7,050 5,072 1,697
Non-interest
income 537 563 586
Non-interest
expense 6,533 6,464 6,628
----- ----- -----
Loss before
income tax
benefit 1,054 (829) (4,345)
Income tax
benefit 461 (301) (1,694)
--- ---- ------
Net loss $593 $(528) $(2,651)
---- ----- -------
Per Share
Data:
Basic earnings
(loss) per
share $0.02 $( 0.10) $(0.31)
Diluted
earnings
(loss) per
share $0.02 $( 0.10) $(0.31)
Common stock
dividends per
share $- $- $-
Average basic
shares
outstanding 10,066,679 10,066,679 10,066,679
Average
diluted
shares
outstanding 10,076,763 10,066,679 10,066,679
Performance
Ratios:
Return on
average
assets 0.06% -0.05% -0.27%
Return on
average
equity 0.60% -0.50% -2.46%
Net interest
margin 3.63% 3.49% 3.17%
Efficiency
ratio* 56.97% 59.20% 61.36%
For the Three Months Ended
September
30, June 30,
2009 2009
---- ----
Summary
Operating
Results:
Interest
income $13,347 $12,873
Interest
expense 6,296 6,877
----- -----
Net interest
income 7,051 5,996
Provision for
loan losses 8,909 12,501
----- ------
Net interest
income (loss)
after
provision for
loan losses (1,858) (6,505)
Non-interest
income 570 729
Non-interest
expense 5,980 5,708
----- -----
Loss before
income tax
benefit (7,268) (11,484)
Income tax
benefit (2,909) (4,611)
------ ------
Net loss $(4,359) $(6,873)
------- -------
Per Share
Data:
Basic earnings
(loss) per
share $(0.48) $(0.73)
Diluted
earnings
(loss) per
share $(0.48) $(0.73)
Common stock
dividends per
share $0.03 $0.03
Average basic
shares
outstanding 10,066,679 10,066,679
Average
diluted
shares
outstanding 10,066,679 10,066,679
Performance
Ratios:
Return on
average
assets -0.44% -0.69%
Return on
average
equity -3.90% -5.78%
Net interest
margin 3.06% 2.60%
Efficiency
ratio* 60.90% 69.41%
* The efficiency ratio is general and administrative expenses as a
percentage of net interest income plus non-interest income
As of
September
June 30, March 31, December 31, 30, June 30,
2010 2010 2009 2009 2009
---- ---- ---- ---- ----
Balance Sheet
Data:
Total assets $1,002,284 $970,791 $967,936 $995,904 $1,001,993
Total loans
receivable 841,668 844,753 853,772 871,183 896,396
Allowance for
loan losses (34,040) ( 34,560) (34,693) (34,009) (28,931)
------- -------- ------- ------- -------
Net loans 807,628 810,193 819,079 837,174 867,465
Deposits 742,042 712,376 710,330 725,040 712,384
Stockholders'
equity 105,647 105,374 106,231 109,212 114,203
Bank's Tier 1
core capital
to total
assets 11.5% 11.9% 11.8% 12.2% 12.4%
Book value per
share $7.85 $7.82 $7.91 $8.21 $8.70
Asset Quality
Data:
Non-accrual
loans $47,857 $50,556 $62,685 $68,801 $77,507
Foreclosed real
estate 16,272 23,586 21,574 17,877 8,116
------ ------ ------ ------ -----
Total non-
performing
assets 64,129 74,142 84,259 86,678 85,623
Total non-
accrual loans
to net loans 5.9% 6.2% 7.7% 8.2% 8.9%
Allowance for
loan losses 34,040 34,560 34,693 34,009 28,931
Allowance for
loan losses to
total loans 4.0% 4.1% 4.1% 3.9% 3.2%
Allowance for
loan losses to
total non-
performing
loans 71.1% 68.4% 55.3% 49.4% 37.3%
Total non-
accrual loans
to total
assets 4.8% 5.2% 6.5% 6.9% 7.7%
Total non-
performing
assets to
total assets 6.4% 7.6% 8.7% 8.7% 8.5%
SOURCE Severn Bancorp, Inc.
