Welcome!

News Feed Item

Severn Bancorp Announces Restatement of Financial Statements To Reflect Additional Net Income

ANNAPOLIS, Md., Feb. 14, 2013 /PRNewswire/ -- Severn Bancorp, Inc. ("the Company"), (Nasdaq: SVBI) parent company of Severn Savings Bank, FSB ("Severn"), today announced that it will restate its previously issued annual consolidated financial statements for the fiscal years 2010, and 2011 and quarterly consolidated financial statements for fiscal years 2010, 2011 and 2012 (including its selected financial data for the relevant periods) due to errors identified in these financial statements.  These restatements are expected to be reflected in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 that will be filed with the Securities and Exchange Commission in March 2013.  The decision was made by the Company's Board of Directors, upon the recommendation of the Audit Committee and in consultation with management.   As a result of this decision, investors should no longer rely upon the Company's previously released financial statements for these periods and any earnings releases or other communications relating to these periods.

The Company estimates that it understated pre-tax income by an aggregate of approximately $1,627,000, over the restated periods, due to the Company overstating its FDIC insurance expense for those periods.  This resulted from the method the Company used to amortize a prepayment of its risk-based insurance assessment paid to the FDIC in 2009.  At that time, the Company paid an estimated assessment in advance for fiscal years 2010, 2011 and 2012 based on the level of net assets as of June 30, 2009, and began expensing the prepayment evenly over the three year period covered by the prepayment.  Management has now determined that this method of amortization was incorrect and that it should have amortized the prepayment based on the actual level of net assets over that period.  This error was discovered by management during the course of its preparation of the 2012 year-end financial statements and audit.

The amounts disclosed below are the estimated net cumulative effect of this error on income through December 31, 2012.  The effect on income in certain periods is quantitatively significant. The adjustments necessary have no effect on reported cash flow from operations, and do not have a material impact on the consolidated balance sheet.  The impact of this correction for the restatement periods increases cumulative net income by approximately $980,000 and cumulative earnings per share by approximately $0.09.

Impact of the restatement

The estimated adjustments to the Company's consolidated statements of operations are summarized in the tables below (in thousands, except per share amounts).

 

















Fiscal Year Ended






December 31, 2012

December 31, 2011

December 31, 2010






As Reported

Adjustment

As Restated

As Reported

Adjustment

As Restated

As Reported

Adjustment

As Restated


















Increase in:



























Pre-tax income

$        5,654

$           732

$        6,386

$        2,201

$           561

$        2,762

$        2,197

$           334

$        2,531




Net income

3,283

445

3,728

1,219

333

1,552

1,157

202

1,359




Basic and diluted














earnings(loss) per share

0.18

0.04

0.22

(0.05)

0.03

(0.02)

(0.06)

0.02

(0.04)


































Quarter Ended



March 31, 2012

June 30, 2012

September 30, 2012

December 31, 2012



As Reported

Adjustment

As Restated

As Reported

Adjustment

As Restated

As Reported

Adjustment

As Restated

As Reported

Adjustment

As Restated















Increase in:



























Pre-tax income

$           828

$           172

$        1,000

$        1,869

$           174

$        2,043

$           964

$           191

$        1,155

$        1,993

195

$        2,188

Net income

472

105

577

1,097

106

1,203

558

116

674

1,156

118

1,274

Basic and diluted














earnings per share

0.01

0.01

0.02

0.07

0.01

0.08

0.02

0.01

0.03

0.08

0.01

0.09































Quarter Ended



March 31, 2011

June 30, 2011

September 30, 2011

December 31, 2011



As Reported

Adjustment

As Restated

As Reported

Adjustment

As Restated

As Reported

Adjustment

As Restated

As Reported

Adjustment

As Restated















Increase in:



























Pre-tax income(loss)

$           791

83

$           874

$      (1,403)

$           152

$      (1,251)

$           954

$           159

$        1,113

$        1,859

$           167

$        2,026

Net income(loss)

447

49

496

(846)

90

(756)

551

95

646

1,067

99

1,166

Basic and diluted














earnings(loss) per share

0.00

0.01

0.01

(0.13)

0.01

(0.12)

0.01

0.01

0.02

0.06

0.01

0.07































Quarter Ended



March 31, 2010

June 30, 2010

September 30, 2010

December 31, 2010



As Reported

Adjustment

As Restated

As Reported

Adjustment

As Restated

As Reported

Adjustment

As Restated

As Reported

Adjustment

As Restated















Increase in:



























Pre-tax income(loss)

$         (829)

$             96

$         (733)

$        1,054

$             67

$        1,121

$           870

$             84

$           954

$        1,102

87

$        1,189

Net income(loss)

(528)

58

(470)

593

40

633

485

51

536

607

53

660

Basic and diluted














earnings(loss) per share

(0.10)

0.01

(0.09)

0.02

0.00

0.02

0.01

0.00

0.01

0.02

0.00

0.02

 

The Board of Directors, Audit Committee and management have discussed the matters disclosed in this press release with the Company's independent registered public accounting firm, ParenteBeard LLC.  The Company is working diligently to complete the restatement of its financial statements and expects to file its Annual Report on Form 10-K, including the restated financial statements, by no later than March 31, 2013.

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, statements with respect to the estimated effects of the revisions to its financial statements.  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, additional information arising from the review of the revisions to the financial statements by Severn and by its independent accountants, the Company's ability to maintain an effective system of internal controls 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.

SOURCE Severn Bancorp, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Five years ago development was seen as a dead-end career, now it’s anything but – with an explosion in mobile and IoT initiatives increasing the demand for skilled engineers. But apart from having a ready supply of great coders, what constitutes true ‘DevOps Royalty’? It’ll be the ability to craft resilient architectures, supportability, security everywhere across the software lifecycle. In his keynote at @DevOpsSummit at 20th Cloud Expo, Jeffrey Scheaffer, GM and SVP, Continuous Delivery Busine...
While some vendors scramble to create and sell you a fancy solution for monitoring your spanking new Amazon Lambdas, hear how you can do it on the cheap using just built-in Java APIs yourself. By exploiting a little-known fact that Lambdas aren’t exactly single threaded, you can effectively identify hot spots in your serverless code. In his session at 20th Cloud Expo, David Martin, Principal Product Owner at CA Technologies, will give a live demonstration and code walkthrough, showing how to ov...
SYS-CON Events announced today that Enzu will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive ad...
Everywhere we turn in our industry we can find strong opinions about the direction, type and nature of cloud’s impact on computing and business. Another word that is used in every context in our industry is “hybrid.” In his session at 20th Cloud Expo, Alvaro Gonzalez, Director of Technical, Partner and Field Marketing at Peak 10, will use a combination of a few conceptual props and some research recently commissioned by Peak 10 to offer a real-world consideration of how the various categories of...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
SYS-CON Events announced today that Interoute has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Interoute is the owner operator of Europe's largest network and a global cloud services platform, which encompasses over 70,000 km of lit fiber, 15 data centers, 17 virtual data centers and 33 colocation centers, with connections to 195 additional partner data centers. Our full-service Unifie...
SYS-CON Events announced today that CollabNet, a global leader in enterprise software development, release automation and DevOps solutions, will be a Bronze Sponsor of SYS-CON's 20th International Cloud Expo®, taking place from June 6-8, 2017, at the Javits Center in New York City, NY. CollabNet offers a broad range of solutions with the mission of helping modern organizations deliver quality software at speed. The company’s latest innovation, the DevOps Lifecycle Manager (DLM), supports Value S...
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus intern...
Multiple data types are pouring into IoT deployments. Data is coming in small packages as well as enormous files and data streams of many sizes. Widespread use of mobile devices adds to the total. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will look at the tools and environments that are being put to use in IoT deployments, as well as the team skills a modern enterprise IT shop needs to keep things running, get a handle on all this data, and deli...
SYS-CON Events announced today that Linux Academy, the foremost online Linux and cloud training platform and community, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Linux Academy was founded on the belief that providing high-quality, in-depth training should be available at an affordable price. Industry leaders in quality training, provided services, and student certification passes, its goal is to c...
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend @CloudExpo | @ThingsExpo, June 6-8, 2017, at the Javits Center in New York City, NY and October 31 - November 2, 2017, Santa Clara Convention Center, CA. Learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
Cloud promises the agility required by today’s digital businesses. As organizations adopt cloud based infrastructures and services, their IT resources become increasingly dynamic and hybrid in nature. Managing these require modern IT operations and tools. In his session at 20th Cloud Expo, Raj Sundaram, Senior Principal Product Manager at CA Technologies, will discuss how to modernize your IT operations in order to proactively manage your hybrid cloud and IT environments. He will be sharing bes...
SYS-CON Events announced today that EARP Integration will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. EARP Integration is a passionate software house. Since its inception in 2009 the company successfully delivers smart solutions for cities and factories that start their digital transformation. EARP provides bespoke solutions like, for example, advanced enterprise portals, business intelligence systems an...
SYS-CON Events announced today that Loom Systems will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 2015, Loom Systems delivers an advanced AI solution to predict and prevent problems in the digital business. Loom stands alone in the industry as an AI analysis platform requiring no prior math knowledge from operators, leveraging the existing staff to succeed in the digital era. With offices in S...