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) October 27, 2016

Severn Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Maryland	0-49731	52-1726127
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer 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 October 27, 2016 Severn Bancorp, Inc. issued a press release announcing financial results for the quarter ended September 30, 2016.  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 October 27, 2016 announcing financial results for the quarter ended September 30, 2016.

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: October 27, 2016	By:	/Alan J. Hyatt/
		Alan J. Hyatt, President

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE	Contact:
	Paul B. Susie
	Chief Financial Officer &
	Executive Vice President
	Email: psusie@severnbank.com
	Phone: 410.260.2000

Severn Bancorp, Inc. Announces Third Quarter Earnings

Annapolis, MD (October 27, 2016) –Severn Bancorp, Inc., (“the Company”),(Nasdaq: SVBI) parent company of Severn Bank (“Severn”), today announced net income of $1,055,000 or $.04 per diluted share for the third quarter of 2016 down just slightly compared to net income of $1,227,000 or $.06 per diluted share for the third quarter of 2015.   Year to date earnings increased to $14,437,000 or $1.13 per diluted share for 2016 versus $3,457,000 or $.17 per diluted share for the same period of 2015. Year to date earnings for 2016 included the reversal of a valuation allowance recorded against the net deferred tax assets of the Company. This resulted in a net income tax benefit of $10,816,000 in 2016. On a pre-tax basis, year to date earnings increased 2.1% to $3,621,000 or $.18 per share for 2016 compared to $3,545,000 or $.17 per share for 2015.Diluted earnings per share is calculated using net income available for common shareholders, which is net income less preferred stock dividends and discount amortization.

 “The third quarter 2016 results remain stable,” stated Alan J. Hyatt, President and Chief Executive Officer. Mr. Hyatt continued, “The Bank had solid earnings and decent numbers all around. We are dedicated to the goal of consistently keeping the trend in earnings going in the upward direction. We were pleased to announce the full repayment of our remaining TARP shares in September resulting in lower costs capital to the Company and greater financial strength. Our commercial banking team is doing well and establishing strong relationships in the community. We also opened our fifth branch in Severna Park in September and see excellent potential in that area.”

About Severn 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 $779 million and five branches located in Annapolis, Edgewater and Glen Burnie, and Severna Park, Maryland. The bank specializes in exceptional customer service and holds itself and its employees to a high standard of community contribution. Severn Bank is a trade name used by Severn Savings Bank, FSB. 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, 2015.

Severn Bancorp, Inc.

Selected Financial Data

(dollars in thousands, except per share data)

(Unaudited)

	For the Three Months Ended
	September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015
Summary Operating Results:
Interest income	$	7,842		$	7,642		$	7,504		$	7,582		$	7,932
Interest expense		2,125			2,101			2,269			2,264			2,284
Net interest income		5,717			5,541			5,235			5,318			5,648
Provision for loan losses		50			100			-			(480	)		-
Net interest income after provision for loan losses		5,667			5,441			5,235			5,798			5,648
Non-interest income		1,715			1,843			1,221			1,409			1,469
Non-interest expense		5,949			6,003			5,549			6,127			5,838
Income before income tax provision		1,433			1,281			907			1,080			1,279
Income tax (benefit) provision		378			(11,194	)		-			2			52
Net income	$	1,055		$	12,475		$	907		$	1,078		$	1,227
Net income available to common shareholders	$	539		$	12,012		$	313		$	484		$	633
Per Share Data:
Basic earnings per share	$	0.04		$	1.02		$	0.03		$	0.05		$	0.06
Diluted earnings per share	$	0.04		$	1.02		$	0.03		$	0.05		$	0.06
Average basic shares outstanding		12,104,379			11,759,209			10,088,879			10,088,879			10,088,879
Average diluted shares outstanding		12,183,739			11,814,656			10,128,251			10,133,663			10,116,060
Performance Ratios:
Return on average assets		0.13	%		1.61	%		0.12	%		0.14	%		0.16	%
Return on average equity		1.12	%		14.01	%		1.07	%		1.28	%		1.47	%
Net interest margin		3.21	%		3.18	%		3.07	%		3.10	%		3.20	%
Efficiency ratio		79.49	%		79.97	%		85.25	%		89.43	%		80.17	%

	September 30, 2016			June 30, 2016			As of March 31, 2016			December 31, 2015			September 30, 2015
Balance Sheet Data:
Total assets	$	777,756		$	794,142		$	765,434		$	762,079		$	773,977
Total loans receivable		612,458			617,900			601,288			598,414			597,061
Allowance for loan losses		(8,985	)		(8,804	)		(8,633	)		(8,758	)		(8,689	)
Net loans		603,473			609,096			592,655			589,656			588,372
Deposits		556,609			539,677			524,733			523,771			536,646
Borrowings		110,500			125,000			115,000			115,000			115,000
Stockholders' equity		86,782			99,521			86,885			86,456			85,876
Bank's Tier 1 core capital to total assets		12.7	%		14.3	%		15.0	%		14.9	%		14.5	%
Book value per common share	$	6.90		$	6.86		$	5.97		$	5.93		$	5.87
Asset Quality Data:
Non-accrual loans	$	8,206		$	9,206		$	8,274		$	8,974		$	8,778
Foreclosed real estate		1,343			1,112			1,737			1,744			1,919
Total non-performing assets		9,549			10,318			10,011			10,718			10,697
Total non-accrual loans to net loans		1.4	%		1.5	%		1.4	%		1.5	%		1.5	%
Total non-accrual loans to total assets		1.1	%		1.2	%		1.1	%		1.2	%		1.1	%
Allowance for loan losses		8,985			8,804			8,633			8,758			8,689
Allowance for loan losses to total loans		1.5	%		1.4	%		1.4	%		1.5	%		1.5	%
Allowance for loan losses to total  non-accrual loans		109.5	%		95.6	%		104.3	%		97.6	%		99.0	%
Total non-performing assets to total assets		1.2	%		1.3	%		1.3	%		1.4	%		1.4	%
Non-accrual troubled debt restructurings (included above)		364			1,143			1,327			1,329			1,835
Performing troubled debt restructurings		22,431			23,315			23,934			24,386			24,449
Loan to deposit ratio		110.0	%		114.5	%		114.6	%		114.3	%		111.3	%