EX-99.1 2 ex99_1.htm EXHIBIT 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 a 38% Increase in First Quarter Earnings

Annapolis, MD (May 13, 2019) – Severn Bancorp, Inc., (Nasdaq: SVBI) parent company of Severn Bank, today announced net income of $2.6 million for the three months ending March 31, 2019 versus $1.9 million for the same quarter in 2018, which is a 38% increase in earnings. On a diluted per share basis, earnings were $0.20 versus $0.15 for the quarters ended March 31, 2019 and 2018, respectively.

“Earnings look great for this quarter again,” stated Alan J. Hyatt, President and Chief Executive Officer.  Mr. Hyatt continued, “We are pleased with the upward trend in earnings. We have launched an exciting new retail deposit product offering, Kasasa rewards checking and are having success building on relationships with local businesses and business owners. Our community continues to see us as a partner in their success and calls on us for all of their banking needs.”

Net interest income increased 16% during the first quarter of 2019. Net interest income was $8.1 million during the first quarter of 2019 versus $7.0 million during the first quarter of 2018.

Noninterest income increased 26% during the quarter ended March 31, 2019. Noninterest income was $2.3 million for the three months ended March 31, 2019, up from $1.8 million as of March 31, 2018. Growth in mortgage banking revenue, real estate commissions, and deposit fees contributed to the increase.

Noninterest expenses were $6.8 million for the three months ended March 31, 2019 versus $6.1 million for the same period in 2018. The increase is due to several factors, including: higher occupancy costs as a result of the addition of a Wayson’s Corner Branch in the second quarter of 2018; additional staffing due to the added Wayson’s Corner Branch and the addition of a Frederick mortgage production office in the second quarter of 2018; along with higher commissions paid to mortgage loan officers and real estate brokers as a result of increased production in 2019.

Asset quality remains strong with total non-accrual loans to total loans at 0.6% compared to 0.7% as of December 31, 2018. Total non-performing assets to total assets held steady at 0.6% as of March 31, 2019 compared to 0.6% as of December 31, 2018.

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 $885 million and six branches located in Annapolis, Edgewater, Severna Park, Lothian/Wayson’s Corner 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, 2018.

Severn Bancorp, Inc.
Consolidated Income Statement
(dollars in thousands, except per share data)
(Unaudited)

Quarter-to-Date income statement results:
  
Three Months Ended March 31, 2019
              
   
2019
    
2018
    
$ Change
    
% Change
  
                         
Interest Income
                        
                         
Interest on loans
  
$
9,167
    
$
8,371
    
$
796
      
10
%
Interest on securities
    
259
      
320
      
(61
)
    
-19
%
Other interest income
    
1,117
      
186
      
931
      
501
%
                                 
Total interest income
    
10,543
      
8,877
      
1,666
      
19
%
                                 
Interest Expense
                                
                                 
Interest on deposits
    
1,869
      
1,133
      
736
      
65
%
Interest on long term borrowings
    
589
      
760
      
(171
)
    
-23
%
                                 
Total interest expense
    
2,458
      
1,893
      
565
      
30
%
                                 
Net interest income
    
8,085
      
6,984
      
1,101
      
16
%
                                 
Provision for (reversal of) loan losses
    
0
      
0
      
-
      
0
%
                                 
Net interest income after provision for (reversal of) loan losses
    
8,085
      
6,984
      
1,101
      
16
%
                                 
Noninterest Income
                                
                                 
Mortgage-banking revenue
    
720
      
595
      
125
      
21
%
Real Estate Commissions
    
482
      
385
      
97
      
25
%
Real Estate Management Income
    
164
      
183
      
(19
)
    
-11
%
Other noninterest income
    
894
      
630
      
264
      
42
%
                                 
Total noninterest income
    
2,260
      
1,793
      
467
      
26
%
                                 
Net interest income plus noninterest income after provision for (reversal of) loan losses
    
10,345
      
8,777
      
1,568
      
18
%
                                 
Noninterest Expense
                                
                                 
Compensation and related expenses
    
4,525
      
4,278
      
247
      
6
%
Net Occupancy & Depreciation
    
415
      
344
      
71
      
21
%
Net Costs of Foreclosed Real Estate
    
125
      
32
      
93
      
291
%
Other
    
1,685
      
1,493
      
192
      
13
%
                                 
Total noninterest expense
    
6,750
      
6,147
      
603
      
10
%
                                 
Income before income tax provision
    
3,595
      
2,630
      
965
      
37
%
                                 
Income tax provision
    
986
      
745
      
241
      
32
%
                                 
Net income
  
$
2,609
    
$
1,885
    
$
724
      
38
%
Net income available to common shareholders
  
$
2,609
    
$
1,815
    
$
794
      
44
%

Severn Bancorp, Inc.
Consolidated Balance Sheet
(dollars in thousands, except per share data)
(Unaudited)

 
  
March 31, 2019
    
December 31, 2018
    
$ Change
    
% Change
  
Balance Sheet Data:
                        
 
                        
ASSETS
                        
Cash
  
$
3,276
    
$
2,880
    
$
396
      
14
%
Federal funds and interest bearing deposits in other banks
    
109,825
      
185,460
      
(75,635
)
    
-41
%
Certificates of deposit held as investment
    
8,780
      
8,780
      
0
      
0
%
Investment securities available for sale, at fair value
    
10,992
      
11,978
      
(986
)
    
-8
%
Investment securities held to maturity
    
35,793
      
38,912
      
(3,119
)
    
-8
%
Loans held for sale, at fair value
    
6,660
      
9,686
      
(3,026
)
    
-31
%
Loans receivable
    
674,220
      
682,349
      
(8,129
)
    
-1
%
Allowance for loan losses
    
(8,085
)
    
(8,044
)
    
(41
)
    
1
%
Accrued interest receivable
    
2,632
      
2,848
      
(216
)
    
-8
%
Foreclosed real estate, net
    
1,601
      
1,537
      
64
      
4
%
Premises and equipment, net
    
22,483
      
22,745
      
(262
)
    
-1
%
Restricted stock investments
    
2,856
      
3,766
      
(910
)
    
-24
%
Bank owned life insurance
    
5,264
      
5,225
      
39
      
1
%
Deferred income taxes, net
    
2,159
      
2,363
      
(204
)
    
-9
%
Prepaid expenses and other assets
    
6,587
      
3,748
      
2,839
      
76
%
 
                                
 
  
$
885,043
    
$
974,233
    
$
(89,190
)
    
-9
%
 
                                
LIABILITIES AND STOCKHOLDERS EQUITY
                                
Deposits
  
$
709,873
    
$
779,506
    
$
(69,633
)
    
-9
%
Borrowings
    
48,500
      
73,500
      
(25,000
)
    
-34
%
Subordinated debentures
    
20,619
      
20,619
      
-
      
0
%
Accounts payable and accrued expenses
    
5,223
      
2,155
      
3,068
      
142
%
 
                                
Total Liabilities
    
784,215
      
875,780
      
(91,565
)
    
-10
%
 
                                
Common stock
    
128
      
128
      
-
      
0
%
Additional paid-in capital
    
65,662
      
65,538
      
124
      
0
%
Retained earnings
    
35,087
      
32,860
      
2,227
      
7
%
Accumulated comprehensive income (loss)
    
(49
)
    
(73
)
    
24
      
-33
%
 
                                
Total Stockholders' Equity
    
100,828
      
98,453
      
2,375
      
2
%
 
                                
 
  
$
885,043
    
$
974,233
    
$
(89,190
)
    
-9
%

Severn Bancorp, Inc.
Selected Financial Data
(dollars in thousands, except per share data)
(Unaudited)

 
  
Three Months Ended March 31, 2019
  
 
  
2019
    
2018
  
Per Share Data:
            
Basic earnings per share
  
$
0.20
    
$
0.15
  
Diluted earnings per share
  
$
0.20
    
$
0.15
  
Average basic shares outstanding
    
12,773,259
      
12,241,554
  
Average diluted shares outstanding
    
12,857,643
      
12,334,637
  
Tangible Book Value Per Share
  
$
7.81
    
$
7.46
  
                 
Performance Ratios:
                
Return on average assets
    
1.14
%
    
0.94
%
Return on average equity
    
10.47
%
    
8.11
%
Net interest margin
    
3.65
%
    
3.66
%
Efficiency ratio*
    
64.04
%
    
69.67
%

   
March 31, 2019
    
December 31, 2018
  
Asset Quality Data:
                
Non-accrual loans
  
$
3,795
    
$
4,656
  
Foreclosed real estate
    
1,601
      
1,537
  
Total non-performing assets
    
5,396
      
6,193
  
Total non-accrual loans to total loans
    
0.6
%
    
0.7
%
Total non-accrual loans to total assets
    
0.4
%
    
0.5
%
Allowance for loan losses
    
8,085
      
8,044
  
Allowance for loan losses to total loans
    
1.2
%
    
1.2
%
Allowance for loan losses to total non-accrual loans
    
213.0
%
    
172.8
%
Total non-performing assets to total assets
    
0.6
%
    
0.6
%
Non-accrual troubled debt restructurings (included above)
    
443
      
446
  
Performing troubled debt restructurings
    
10,618
      
10,698
  
Loan to deposit ratio
    
95.0
%
    
87.5
%

*
This non-GAAP financial measure is calculated as noninterest expenses less OREO expenses divided by net interest income plus noninterest income