8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event report)     July 16, 2012                                                      

Severn Bancorp, Inc.  

(Exact name of registrant as specified in its charter)

Maryland	0-49731	52-1726127
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification Number)

200 Westgate Circle, Suite 200, Annapolis, Maryland	21401
(Address of principal executive offices)	(Zip Code)
410-260-2000
(Registrant’s telephone number, including area code)

(Former name or former address, if change since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

      (17 CFR 240.14d-2(b))

[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

     (17 CFR 240.13e-4(c))

ITEM 2.02     RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On July 16, 2012 Severn Bancorp, Inc. issued a press release announcing financial results for the quarter ended June 30, 2012.  A copy of this press release is being furnished as Exhibit 99.1 to this report.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(c) Exhibits:

99.1 Press Release of Severn Bancorp, Inc., dated July 16, 2012 announcing financial results for the quarter ended June 30, 2012.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Severn Bancorp, Inc.
Dated: July 16, 2012	By:  /Alan J. Hyatt/
	Alan J. Hyatt, President

EX-99.1

Exhibit 99.1

SEVERN BANCORP, INC.

FOR IMMEDIATE RELEASE                                           Contact:

Thomas G. Bevivino

Chief Operating Officer &

Executive Vice President

Email: tbevivino@severnbank.com

Phone: 410.260.2000

2ND QUARTER EARNINGS INCREASE BY $1.9 MILLION AT SEVERN BANCORP

Annapolis, MD – Severn Bancorp, Inc., (Nasdaq: SVBI) parent company of Severn Savings Bank, FSB (“Severn”), today announced net income of $1,097,000 or $.07 per share for the second quarter of 2012 compared to a net loss of $846,000 or $(.13) per share for the second quarter of 2011 and compared to net income of $472,000 or $.00 per share, for the quarter ended March 31, 2012.  Earnings per share is calculated using net income available for common shareholders, which is net income less preferred stock dividends.

“We are encouraged by the results from this quarter.  We have continued to be persistent and work hard, and it is beginning to show,” stated Alan J. Hyatt, president and chief executive officer.  Mr. Hyatt continued “We certainly owe this improvement in earnings to our customers who have continued to support a community bank like Severn for years as well as to our committed employees who have made it their mission to strengthen their company during challenging economic conditions.  We know we still face challenges, but I feel confident we have the plan, tools, and staff to continue the upward trend and improve returns to shareholders.  We continue to monitor our problem loans closely and take a conservative accounting approach to them. While impaired loans have decreased from March 31, 2012, we decided to move over $10 million of loans previously classified as impaired to non-accrual status at June 30, 2012 in an effort to reflect the loans’ interest income in a more conservative manner. ”

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 $900 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, 2011.

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,			September 30,			June 30,
			2012			2012			2011			2011			2011
Summary Operating Results:
	Interest income		$	10,276		$	10,265		$	10,558		$	10,991		$	11,254
	Interest expense			3,336			3,552			3,659			3,856			3,946
		Net interest income		6,940			6,713			6,899			7,135			7,308
	Provision for loan losses			-			465			141			850			2,987
		Net interest income after provision
		for loan losses		6,940			6,248			6,758			6,285			4,321
	Non-interest income			835			891			873			628			447
	Non-interest expense			5,906			6,311			5,772			5,959			6,171
	Income (loss) before income taxes			1,869			828			1,859			954			(1,403	)
	Income tax expense (benefit)			772			356			792			403			(557	)
	Net income (loss)		$	1,097		$	472		$	1,067		$	551		$	(846	)
Per Share Data:
	Basic earnings (loss) per share		$	0.07		$	0.00		$	0.06		$	0.01		$	-0.13
	Diluted earnings (loss) per share		$	0.07		$	0.00		$	0.06		$	0.01		$	-0.13
	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			10,066,679			10,066,679			10,066,679			10,066,679			10,066,679
Performance Ratios:
	Return on average assets			0.12	%		0.05	%		0.12	%		0.06	%		-0.09	%
	Return on average equity			1.04	%		0.45	%		1.01	%		0.52	%		-0.80	%
	Net interest margin			3.41	%		3.27	%		3.27	%		3.32	%		3.39	%
	Efficiency ratio*			67.20	%		66.99	%		64.84	%		60.76	%		60.37	%
* 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 31,			September 30,			June 30,
				2012			2012			2011			2011			2011
Balance Sheet Data:
	Total assets		$	896,644		$	900,471		$	900,628		$	926,013		$	937,372
	Total loans receivable			691,647			701,596			719,241			741,528			766,443
	Allowance for loan losses			(24,097	)		(25,795	)		(25,938	)		(30,358	)		(31,103	)
		Net loans		667,550			675,801			693,303			711,170			735,340
	Deposits			643,653			650,473			652,757			678,717			687,482
	Borrowings			115,000			115,000			115,000			115,000			115,000
	Stockholders' equity			106,866			106,051			105,930			105,215			105,005
	Bank's Tier 1 core capital to total assets			13.3	%		13.1	%		13.0	%		12.4	%		12.3	%
	Book value per share		$	7.97		$	7.89		$	7.88		$	7.80		$	7.78
Asset Quality Data:
	Non-accrual loans		$	29,450		$	17,882		$	23,912		$	26,911		$	35,376
	Non-accrual troubled debt restructurings			9,515			11,677			7,520			8,713			6,712
	Foreclosed real estate			16,329			19,853			19,932			19,158			17,291
		Total non-performing assets		55,294			49,412			51,364			54,782			59,379
	Performing troubled debt restructurings			51,034			51,219			52,255			54,175			55,807
	Total non-accrual loans to net loans			5.8	%		4.4	%		4.5	%		5.0	%		5.7	%
	Allowance for loan losses			24,097			25,795			25,938			30,358			31,103
	Allowance for loan losses to total loans			3.5	%		3.7	%		3.6	%		4.1	%		4.1	%
	Allowance for loan losses to total
		non-performing loans		61.8	%		87.3	%		82.5	%		85.2	%		73.9	%
	Total non-accrual loans to total assets			4.3	%		3.3	%		3.5	%		3.8	%		4.5	%
	Total non-performing assets to total assets			6.2	%		5.5	%		5.7	%		5.9	%		6.3	%