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Severn Bancorp Announces Fourth Quarter Results and Significant Reduction in Non-Performing Assets

ANNAPOLIS, Md., Jan. 24, 2014 /PRNewswire/ -- Severn Bancorp, Inc., (Nasdaq: SVBI) ("Company") parent company of Severn Savings Bank, FSB ("Severn"), today announced that non-performing assets, comprised of other real estate owned and non-accrual loans, have been reduced to $20,007,000, or 2.5% of total assets, as of December 31, 2013 compared to $48,936,000, or 5.7% of total assets, as of December 31, 2012.

"Our organization has been focused on cleaning up our balance sheet with the goal being to start 2014 with a clean and strong financial position," said Alan J. Hyatt, president and chief executive officer.  Mr. Hyatt continued, "Severn sold over $48 million in underperforming loans and $9 million in real estate acquired through foreclosure in 2013, with several million dollars' worth of real estate pending sale as of 2013 year end."

As a result of these transactions and conservatively calculating reserves and charge offs, the Company incurred a net loss of $5,470,000 or $(.58) per share for the fourth quarter of 2013, compared to net income of $1,274,000 or $.09 per share for the fourth quarter of 2012.  Net loss was $25,165,000, or $(2.64) per share for the year ended December 31, 2013, compared to net income of $3,728,000, or $.22 per share for the year ended December 31, 2012.  Earnings per share is calculated using net income available for common shareholders, which is net income less preferred stock dividends.

"We are fortunate that our organization has been well capitalized making it able to withstand the balance sheet cleanup and the resulting losses," said Mr. Hyatt.  Mr. Hyatt continued, "Severn now looks forward to progress and growth as its balance sheet and the overall economic conditions have continued to improve. Severn remains one of the area's few community banks and continues to offer exceptional service that some businesses and individuals prefer over the larger out-of-town based banks."

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 $800 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, 2012.

 

 

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,

March 31,

December 31,






2013

2013

2013

2013

2012












Summary Operating Results:








Interest income

$              7,984

$              8,321

$              8,574

$              8,913

$              9,412



Interest expense

2,204

2,301

2,364

2,315

2,587




Net interest income

5,780

6,020

6,210

6,598

6,825



Provision for loan losses

3,700

12,200

300

320

300




Net interest income (loss) after provision










for loan losses

2,080

(6,180)

5,910

6,278

6,525



Non-interest income

1,196

1,312

1,881

1,572

1,478



Non-interest expense

8,745

7,504

7,470

6,785

5,815



Income (loss) before income tax provision

(5,469)

(12,372)

321

1,065

2,188



Income tax provision

1

8,176

89

444

914




Net income (loss)

$             (5,470)

$           (20,548)

$                 232

$                 621

$              1,274












Per Share Data:








Basic earnings (loss) per share

$                (0.58)

$                (2.08)

$                (0.01)

$                 0.03

$                 0.09



Diluted earnings (loss) per share

$                (0.58)

$                (2.08)

$                (0.01)

$                 0.03

$                 0.09



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

10,108,470

10,100,454

10,066,679












Performance Ratios:








Return on average assets

-0.66%

-2.45%

0.03%

0.07%

0.14%



Return on average equity

-6.31%

-19.07%

0.21%

0.57%

1.19%



Net interest margin

3.15%

3.21%

3.29%

3.47%

3.33%



Efficiency ratio*

88.43%

83.70%

76.42%

72.01%

63.70%














*

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,

March 31,

December 31,






2013

2013

2013

2013

2012












Balance Sheet Data:








Total assets

$           799,603

$           815,198

$           839,053

$           849,598

$           852,118



Total loans receivable

614,552

608,769

642,801

653,595

669,187



Allowance for loan losses

(11,739)

(12,270)

(12,765)

(15,465)

(17,478)




Net loans

602,813

596,499

630,036

638,130

651,709



Deposits

571,249

580,915

583,271

593,900

599,394



Borrowings

115,000

115,000

115,000

115,000

115,000



Stockholders' equity

82,769

88,496

109,313

109,349

108,996



Bank's Tier 1 core capital to total assets

12.9%

13.3%

14.9%

14.8%

14.6%



Book value per share

$                5.57

$                6.14

$                8.21

$                8.22

$                8.18












Asset Quality Data:








Non-accrual loans

$             11,035

$             22,771

$             37,537

$             35,064

$             37,495



Foreclosed real estate

8,972

13,877

13,297

14,895

11,441




Total non-performing assets

20,007

36,648

50,834

49,959

48,936



Total non-accrual loans to net loans

1.8%

3.8%

6.0%

5.5%

5.8%



Total non-accrual loans to total assets

1.4%

2.8%

4.5%

4.1%

4.4%



Allowance for loan losses

11,739

12,270

12,765

15,465

17,478



Allowance for loan losses to total loans

1.9%

2.0%

2.0%

2.4%

2.6%



Allowance for loan losses to total









non-accrual loans

106.4%

53.9%

34.0%

44.1%

46.6%



Total non-performing assets to total assets

2.5%

4.5%

6.1%

5.9%

5.7%



Non-accrual troubled debt restructurings (included above)

2,091

4,750

5,908

6,774

5,635



Performing troubled debt restructurings

34,564

39,548

45,851

46,607

56,448












 

SOURCE Severn Bancorp, Inc.

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