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)                                                                           January 22, 2010                                                      

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 Form8-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 January 22, 2010, Severn Bancorp, Inc. issued a press release announcing financial results for the quarter and year ended December 31, 2009.  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 January 22, 2010 announcing financial results for the quarter and year ended December 31, 2009.

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:  January 22, 2010	By:  /Alan J. Hyatt/
	Alan J. Hyatt, President

EX-99.1

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

Contact:

Thomas G. Bevivino

Chief Financial Officer &

Executive Vice President

tbevivino@severnbank.com

410.260.2000

Severn Bancorp Announces Improved Fourth Quarter Results

ANNAPOLIS, MD (January 22, 2010) — Severn Bancorp, Inc., (Nasdaq SVBI) parent company of Severn Savings Bank, FSB (“Severn”), today announced results for the quarter and year ended December 31, 2009.  Net loss for the fourth quarter of 2009 was $2.7 million (unaudited), or ($.31) per share, compared to a net loss of $4.4 million (unaudited) or ($.48) per share for the third quarter of 2009 and net loss of $6.9 million (unaudited), or $(.73) per share for the second quarter of 2009.  Net loss for the year ended December 31, 2009 was $15.2 million, or ($1.68) per share, compared to net income of $4.1 million, or $.39 per share for the year ended December 31, 2008.  The net loss of $2.7 million for the quarter was due to an increase in the loan loss reserve of approximately $5.5 million during the quarter ended December 31, 2009.  This increase is a non-cash charge against earnings.  At December 31, 2009, Severn’s regulatory capital ratios continued to exceed the levels required to be considered “well capitalized” under applicable federal banking regulations, including its core (leverage) ratio of approximately 12% compared to the regulatory requirement of 5% for “well capitalized” status.

“We are cautiously optimistic that the worst of the economic recession is behind us,” said Alan J. Hyatt, president and chief executive officer.  “Asset quality appears to be showing improvement, and our core business continues to be profitable. While we still set aside approximately $5.5 million in the loan loss reserve for potential credit problems in our loan portfolio, that amount is significantly less than the $8.9 million and $12.5 million set aside for the third and second quarters, respectively. We remain focused on our asset quality as we move forward through the next several months.   Our commitment remains to return to profitability and to continue to be the leading community bank in our market.”

About Severn

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 $1 billion 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.  The Company’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 Company’s general market area, federal and state regulation, competition and other factors detailed from time to time in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including “Item 1A. Risk Factors” contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

###

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,
				2009			2009			2009			2009			2008
Summary Operating Results:
	Interest income			$	12,822		$	13,347		$	12,873		$	13,616		$	14,532
	Interest expense				5,667			6,296			6,877			7,211			7,982
			Net interest income		7,155			7,051			5,996			6,405			6,550
	Provision for loan losses				5,458			8,909			12,501			4,534			3,116
			Net interest income (loss) after
			provision for loan losses		1,697			(1,858	)		(6,505	)		1,871			3,434
	Non-interest income				586			570			729			616			682
	Non-interest expense				6,628			5,980			5,708			4,546			4,485
	Loss before income tax benefit				(4,345	)		(7,268	)		(11,484	)		(2,059	)		(369	)
	Income tax benefit				(1,694	)		(2,909	)		(4,611	)		(714	)		(139	)
	Net loss			$	(2,651	)	$	(4,359	)	$	(6,873	)	$	(1,345	)	$	(230	)
Per Share Data:
	Basic earnings (loss) per share			$	(0.31	)	$	(0.48	)	$	(0.73	)	$	(0.18	)	$	(0.04	)
	Diluted earnings (loss) per share			$	(0.31	)	$	(0.48	)	$	(0.73	)	$	(0.18	)	$	(0.04	)
	Common stock dividends per share			$	-		$	0.03		$	0.03		$	0.03		$	0.06
	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				-0.27	%		-0.44	%		-0.69	%		-0.14	%		-0.02	%
	Return on average equity				-2.46	%		-3.90	%		-5.78	%		-1.09	%		-0.20	%
	Net interest margin				3.17	%		3.06	%		2.60	%		2.79	%		2.41	%
	Efficiency ratio*				61.36	%		60.90	%		69.41	%		55.83	%		55.50	%
		*	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,
					2009			2009			2009			2009			2008
Balance Sheet Data:
	Total assets			$	967,936		$	995,904		$	1,001,993		$	972,817		$	987,651
	Total loans receivable				853,772			871,183			896,396			911,236			911,272
	Allownace for loan losses				(34,693	)		(34,009	)		(28,931	)		(18,885	)		(14,813	)
			Net loans		819,079			837,174			867,465			892,351			896,459
	Deposits				710,330			725,040			712,384			677,048			683,866
	Stockholders' equity				106,231			109,212			114,203			121,709			123,667
	Bank's Tier 1 core capital to total assets				12.3	%		12.2	%		12.4	%		13.6	%		13.5	%
	Book value per share			$	7.91		$	8.21		$	8.70		$	9.45		$	9.64
Asset Quality Data:
	Non-accrual loans			$	62,685		$	68,801		$	77,507		$	62,623		$	54,795
	Foreclosed real estate				21,574			17,877			8,116			6,895			6,317
			Total non-performing assets		84,259			86,678			85,623			69,518			61,112
	Total non-accrual loans to net loans				7.7	%		8.2	%		8.9	%		7.0	%		6.1	%
	Allowance for loan losses				34,693			34,009			28,931			18,885			14,813
	Allowance for loan losses to total loans				4.1	%		3.9	%		3.2	%		2.1	%		1.6	%
	Allowance for loan losses to total
			non-performing loans		55.3	%		49.4	%		37.3	%		30.2	%		27.0	%
	Total non-accrual loans to total assets				6.5	%		6.9	%		7.7	%		6.4	%		5.5	%
	Total non-performing assets to total assets				8.7	%		8.7	%		8.5	%		7.1	%		6.2	%