SEVERN BANCORP 
By ANNAPOLIS, Md., Jan. 22 /PRNewswire-FirstCall/ -- Severn Bancorp, Inc., (Nasdaq: SVBI) parent company of Severn Savings Bank, FSB ("Severn"), today announced results for the quarter and year ended December 31, 2009. Net loss for the fourth quarter of 2009 was $2.7 million (unaudited), or ($.31) per share, compared to a net loss of $4.4 million (unaudited) or ($.48) per share for the third quarter of 2009 and net loss of $6.9 million (unaudited), or $(.73) per share for the second quarter of 2009. Net loss for the year ended December 31, 2009 was $15.2 million, or ($1.68) per share, compared to net income of $4.1 million, or $.39 per share for the year ended December 31, 2008. The net loss of $2.7 million for the quarter was due to an increase in the loan loss reserve of approximately $5.5 million during the quarter ended December 31, 2009. This increase is a non-cash charge against earnings. At December 31, 2009, 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 12% compared to the regulatory requirement of 5% for "well capitalized" status.
"We are cautiously optimistic that the worst of the economic recession is behind us," said Alan J. Hyatt, president and chief executive officer. "Asset quality appears to be showing improvement, and our core business continues to be profitable. While we still set aside approximately $5.5 million in the loan loss reserve for potential credit problems in our loan portfolio, that amount is significantly less than the $8.9 million and $12.5 million set aside for the third and second quarters, respectively. We remain focused on our asset quality as we move forward through the next several months. Our commitment remains to return to profitability and to continue to be the leading community bank in our market."
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, 2008.
Severn Bancorp, Inc.
Selected Financial Data
(dollars in thousands, except per share data)
(Unaudited)
For the Three Months Ended
December 31, September 30, June 30,
2009 2009 2009
---- ---- ----
Summary Operating Results:
Interest income $12,822 $13,347 $12,873
Interest expense 5,667 6,296 6,877
----- ----- -----
Net interest income 7,155 7,051 5,996
Provision for loan losses 5,458 8,909 12,501
----- ----- ------
Net interest income (loss)
after
provision for loan losses 1,697 (1,858) (6,505)
Non-interest income 586 570 729
Non-interest expense 6,628 5,980 5,708
----- ----- -----
Loss before income tax benefit (4,345) (7,268) (11,484)
Income tax benefit (1,694) (2,909) (4,611)
------ ------ ------
Net loss $(2,651) $(4,359) $(6,873)
------- ------- -------
Per Share Data:
Basic earnings (loss) per
share $(0.31) $(0.48) $(0.73)
Diluted earnings (loss) per
share $(0.31) $(0.48) $(0.73)
Common stock dividends per
share $- $0.03 $0.03
Average basic shares
outstanding 10,066,679 10,066,679 10,066,679
Average diluted shares
outstanding 10,066,679 10,066,679 10,066,679
Performance Ratios:
Return on average assets -0.27% -0.44% -0.69%
Return on average equity -2.46% -3.90% -5.78%
Net interest margin 3.17% 3.06% 2.60%
Efficiency ratio* 61.36% 60.90% 69.41%
For the Three Months Ended
March 31, December 31,
2009 2008
---- ----
Summary Operating Results:
Interest income $13,616 $14,532
Interest expense 7,211 7,982
----- -----
Net interest income 6,405 6,550
Provision for loan losses 4,534 3,116
----- -----
Net interest income (loss)
after
provision for loan losses 1,871 3,434
Non-interest income 616 682
Non-interest expense 4,546 4,485
----- -----
Loss before income tax
benefit (2,059) (369)
Income tax benefit (714) (139)
---- ----
Net loss $(1,345) $(230)
------- -----
Per Share Data:
Basic earnings (loss) per
share $(0.18) $(0.04)
Diluted earnings (loss) per
share $(0.18) $(0.04)
Common stock dividends per
share $0.03 $0.06
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 -0.14% -0.02%
Return on average equity -1.09% -0.20%
Net interest margin 2.79% 2.41%
Efficiency ratio* 55.83% 55.50%
* The efficiency ratio is general and administrative expenses as a
percentage of net interest income plus non-interest income
As of
December 31, September 30, June 30,
2009 2009 2009
---- ---- ----
Balance Sheet Data:
Total assets $967,936 $995,904 $1,001,993
Total loans receivable 853,772 871,183 896,396
Allowance for loan losses (34,693) (34,009) (28,931)
------- ------- -------
Net loans 819,079 837,174 867,465
Deposits 710,330 725,040 712,384
Stockholders' equity 106,231 109,212 114,203
Bank's Tier 1 core capital
to total assets 12.3% 12.2% 12.4%
Book value per share $7.91 $8.21 $8.70
Asset Quality Data:
Non-accrual loans $62,685 $68,801 $77,507
Foreclosed real estate 21,574 17,877 8,116
------ ------ -----
Total non-performing assets 84,259 86,678 85,623
Total non-accrual loans to
net loans 7.7% 8.2% 8.9%
Allowance for loan losses 34,693 34,009 28,931
Allowance for loan losses to
total loans 4.1% 3.9% 3.2%
Allowance for loan losses to
total
non-performing loans 55.3% 49.4% 37.3%
Total non-accrual loans to
total assets 6.5% 6.9% 7.7%
Total non-performing assets
to total assets 8.7% 8.7% 8.5%
As of
March 31, December 31,
2009 2008
---- ----
Balance Sheet Data:
Total assets $972,817 $987,651
Total loans receivable 911,236 911,272
Allowance for loan losses (18,885) (14,813)
------- -------
Net loans 892,351 896,459
Deposits 677,048 683,866
Stockholders' equity 121,709 123,667
Bank's Tier 1 core capital to total
assets 13.6% 13.5%
Book value per share $9.45 $9.64
Asset Quality Data:
Non-accrual loans $62,623 $54,795
Foreclosed real estate 6,895 6,317
----- -----
Total non-performing assets 69,518 61,112
Total non-accrual loans to net loans 7.0% 6.1%
Allowance for loan losses 18,885 14,813
Allowance for loan losses to total
loans 2.1% 1.6%
Allowance for loan losses to total
non-performing loans 30.2% 27.0%
Total non-accrual loans to total
assets 6.4% 5.5%
Total non-performing assets to total
assets 7.1% 6.2%
SOURCE Severn Bancorp, Inc.
