EX-99.1 2 ex99_1.htm EXHIBIT 99.1
Exhibit 99.1
 

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

Severn Bancorp, Inc. Announces First Quarter Earnings

Annapolis, MD (April 26, 2017) – Severn Bancorp, Inc., (Nasdaq: SVBI) parent company of Severn Savings Bank, FSB (“Severn”), today announced net income of $925 thousand or $0.06 per share for the first quarter of 2017, a 2.0% increase from net income of $907 thousand or $0.03 per share for the first quarter of 2016. Earnings per share is calculated using net income available for common shareholders, which is net income less preferred stock dividends and discount amortization. Return on Average Assets (ROAA) was 0.47% for the quarter ended March 31, 2017, which was an improvement over the 0.12% reported for the quarter ended March 31, 2016. The Efficiency Ratio dropped to 81.25% for the quarter versus 85.32% for the first quarter of 2016.
 
Total assets increased by $11.3 million to $798.7 million as of March 31, 2017 compared to $787.4 million as of December 31, 2016. Loans remained flat at $609.7 million as of March 31, 2017 versus $610.3 million as of December 31, 2016. Deposits increased by $21.8 million to $593.8 million as of March 31, 2017, an increase of 3.8% over December 31, 2016. Borrowings decreased by $10 million during the quarter ended March 31, 2017 as the bank continues to pay down its FHLB borrowings.
 
“We are committed to increasing shareholder value”, stated Alan J. Hyatt, President and Chief Executive Officer. Mr. Hyatt continued, “We are focused on increasing revenue and driving loan growth. We are committed to Anne Arundel County and providing excellent service to the residents and local businesses. Our team is building relationships and representing Severn well in the community. We see a lot of opportunity for a successful remainder of the year.”
 
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 $798.7 million and five branches located in Annapolis, Edgewater, Severna Park 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, 2016.
 
Severn Bancorp, Inc.
Selected Financial Data
(dollars in thousands, except per share data)
(Unaudited)

Quarterly income statement results:
  
Three Months Ended March 31,
              
   
2017
    
2016
    
$ Change
    
% Change
  
                         
Interest Income
                        
                         
Interest on loans
  
$
7,131
    
$
7,107
    
$
24
      
0.34
%
Interest on securities
    
269
      
311
      
(42
)
    
-13.49
%
Other interest income
    
157
      
86
      
71
      
82.56
%
                                 
Total interest income
    
7,557
      
7,504
      
54
      
0.71
%
                                 
Interest Expense
                                
                                 
Interest on deposits
    
975
      
979
      
(4
)
    
-0.45
%
Interest on long term borrowings
    
996
      
1,290
      
(294
)
    
-22.75
%
                                 
Total interest expense
    
1,971
      
2,269
      
(298
)
    
-13.13
%
                                 
Net interest income
    
5,586
      
5,235
      
351
      
6.70
%
                                 
Provision for loan losses
    
(275
)
    
0
      
(275
)
    
100.00
%
                                 
Net interest income after provision for loan losses
    
5,861
      
5,235
      
626
      
11.96
%
                                 
Other Income
                                
                                 
Mortgage-banking revenue
    
450
      
721
      
(271
)
    
-37.58
%
Real Estate Commissions
    
380
      
118
      
262
      
221.95
%
Real Estate Management Income
    
194
      
165
      
29
      
17.87
%
All other income
    
334
      
246
      
88
      
35.77
%
                                 
Net other income
    
1,358
      
1,250
      
108
      
8.67
%
                                 
Net interest income plus other income
    
7,219
      
6,485
      
734
      
11.32
%
                                 
Non-Interest Expenses
                                
                                 
Compensation and related expenses
    
3,757
      
3,636
      
121
      
3.32
%
Net Occupancy & Depreciation
    
336
      
452
      
(116
)
    
-25.56
%
Net Costs of Foreclosed Real Estate
    
33
      
45
      
(12
)
    
-25.91
%
Other
    
1,549
      
1,445
      
104
      
7.18
%
                                 
Total non-interest expenses
    
5,675
      
5,578
      
97
      
1.75
%
                                 
Income before income tax provision
    
1,544
      
907
      
637
      
70.22
%
                                 
Income tax provision
    
619
      
0
      
619
      
100.00
%
                                 
Net income
  
$
925
    
$
907
    
$
18
      
2.02
%
Net income available to common shareholders
  
$
787
    
$
313
    
$
474
      
151.49
%
 
Severn Bancorp, Inc.
Selected Financial Data
(dollars in thousands, except per share data)
(Unaudited)


   
March 31, 2017
    
December 31, 2016
    
$ Change
    
% Change
  
Balance Sheet Data:
                        
                         
ASSETS
                        
Cash
  
$
19,782
    
$
39,396
    
$
(19,614
)
    
-49.79
%
Federal funds and Interest bearing deposits in other banks
    
63,775
      
27,718
      
36,057
      
130.09
%
Investment securities available for sale
    
7,151
      
-
      
7,151
      
100.00
%
Investment securities held to maturity
    
59,283
      
62,757
      
(3,474
)
    
-5.54
%
Loans held for sale
    
2,755
      
10,307
      
(7,552
)
    
-73.27
%
Loans receivable
    
609,741
      
610,278
      
(537
)
    
-0.09
%
Loan valuation allowance
    
(8,332
)
    
(8,969
)
    
637
      
-7.11
%
Accrued interest receivable
    
2,262
      
2,249
      
13
      
0.58
%
Foreclosed real estate, net
    
1,243
      
973
      
270
      
27.76
%
Premises and equipment, net
    
23,792
      
24,030
      
(238
)
    
-0.99
%
Restricted stock investments
    
4,701
      
5,103
      
(402
)
    
-7.88
%
Deferred income taxes
    
9,473
      
10,081
      
(608
)
    
-6.03
%
Prepaid expenses and other assets
    
3,115
      
3,562
      
(447
)
    
-12.55
%
                                 
   
$
798,741
    
$
787,485
    
$
11,256
      
1.43
%
                                 
LIABILITIES AND STOCKHOLDERS EQUITY
                                
Deposits
  
$
593,762
    
$
571,946
    
$
21,816
      
3.81
%
Borrowings
    
93,500
      
103,500
      
(10,000
)
    
-9.66
%
Suboridinated debentures
    
20,619
      
20,619
      
-
      
0.00
%
Accounts payable and accrued expenses
    
2,020
      
3,490
      
(1,470
)
    
-42.13
%
                                 
Total Liabilities
    
709,901
      
699,555
      
10,346
      
1.48
%
                                 
Preferred stock
    
4
      
4
      
0
      
0.00
%
Common stock
    
121
      
121
      
0
      
0.00
%
Additional paid-in capital
    
64,098
      
63,960
      
138
      
0.22
%
Retained earnings
    
24,632
      
23,845
      
787
      
3.30
%
Accumulated comprehensive loss
    
(15
)
    
-
      
(15
)
    
-100.00
%
                                 
Total Stockholders' Equity
    
88,840
      
87,930
      
910
      
1.03
%
                                 
   
$
798,741
    
$
787,485
    
$
11,256
      
1.43
%
 
Severn Bancorp, Inc.
Selected Financial Data
(dollars in thousands, except per share data)
(Unaudited)

   
Three Months Ended March 31,
  
   
2017
    
2016
  
Per Share Data:
            
Basic earnings per share
  
$
0.06
    
$
0.03
  
Diluted earnings per share
  
$
0.06
    
$
0.03
  
Average basic shares outstanding
    
12,125,553
      
10,088,879
  
Average diluted shares outstanding
    
12,210,580
      
10,128,251
  
                 
Performance Ratios:
                
Return on average assets
    
0.47
%
    
0.12
%
Return on average equity
    
4.24
%
    
1.07
%
Net interest margin
    
3.05
%
    
3.07
%
Efficiency ratio*
    
81.25
%
    
85.32
%
 
   
March 31, 2017
    
December 31, 2016
  
Asset Quality Data:
            
Non-accrual loans
  
$
7,577
    
$
9,852
  
Foreclosed real estate
    
1,243
      
973
  
Total non-performing assets
    
8,820
      
10,825
  
Total non-accrual loans to total loans
    
1.2
%
    
1.6
%
Total non-accrual loans to total assets
    
0.9
%
    
1.3
%
Allowance for loan losses
    
8,332
      
8,969
  
Allowance for loan losses to total loans
    
1.4
%
    
1.5
%
Allowance for loan losses to total non-accrual loans
    
110.0
%
    
91.0
%
Total non-performing assets to total assets
    
1.1
%
    
1.4
%
Non-accrual troubled debt restructurings (included above)
    
2,782
      
2,392
  
Performing troubled debt restructurings
    
16,305
      
18,066
  
Loan to deposit ratio
    
102.7
%
    
106.7
%
 
*
The efficiency ratio is general and administrative expenses as a percentage of net interest income plus non-interest income