Date of Report (Date of earliest event report)
|
October 28, 2019
|
Severn Bancorp, Inc. |
(Exact name of registrant as specified in its charter)
|
Maryland
|
0-49731
|
52-1726127
|
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer Identification Number)
|
200 Westgate Circle, Suite 200, Annapolis, Maryland
|
21401
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Not Applicable |
(Former name or former address, if change since last report)
|
☐ |
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))
|
Title of Each Class
|
Trading Symbol
|
Name of Each Exchange on Which Registered
|
Common Stock Par Value $1.00
|
SVBI
|
The NASDAQ Stock Market, LLC
|
ITEM 2.02 |
RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
|
ITEM 9.01. |
FINANCIAL STATEMENTS AND EXHIBITS.
|
Severn Bancorp, Inc.
|
||
Dated: October 29, 2019
|
By:
|
/s/ Alan J. Hyatt |
|
Alan J. Hyatt, President |
FOR IMMEDIATE RELEASE
|
Contact:
|
Vance Adkins
|
|
Chief Financial Officer
|
|
Email: vadkins@severnbank.com
|
|
Phone: 410.260.2000
|
September 30, 2019
|
December 31, 2018
|
$ Change
|
% Change
|
|||||||||||||
Balance Sheet Data:
|
||||||||||||||||
ASSETS
|
||||||||||||||||
Cash
|
$
|
2,478
|
$
|
2,880
|
$
|
(402
|
)
|
-14
|
%
|
|||||||
Federal funds and interest bearing deposits in other banks
|
62,775
|
185,460
|
(122,685
|
)
|
-66
|
%
|
||||||||||
Certificates of deposit held as investment
|
7,540
|
8,780
|
(1,240
|
)
|
-14
|
%
|
||||||||||
Investment securities available for sale, at fair value
|
9,029
|
11,978
|
(2,949
|
)
|
-25
|
%
|
||||||||||
Investment securities held to maturity
|
30,302
|
38,912
|
(8,610
|
)
|
-22
|
%
|
||||||||||
Loans held for sale, at fair value
|
17,587
|
9,686
|
7,901
|
82
|
%
|
|||||||||||
Loans receivable
|
660,879
|
682,349
|
(21,470
|
)
|
-3
|
%
|
||||||||||
Allowance for loan losses
|
(7,431
|
)
|
(8,044
|
)
|
613
|
-8
|
%
|
|||||||||
Accrued interest receivable
|
2,514
|
2,848
|
(334
|
)
|
-12
|
%
|
||||||||||
Foreclosed real estate, net
|
1,873
|
1,537
|
336
|
22
|
%
|
|||||||||||
Premises and equipment, net
|
22,384
|
22,745
|
(361
|
)
|
-2
|
%
|
||||||||||
Restricted stock investments
|
2,431
|
3,766
|
(1,335
|
)
|
-35
|
%
|
||||||||||
Bank owned life insurance
|
5,341
|
5,225
|
116
|
2
|
%
|
|||||||||||
Deferred income taxes, net
|
1,902
|
2,363
|
(461
|
)
|
-20
|
%
|
||||||||||
Prepaid expenses and other assets
|
6,315
|
3,748
|
2,567
|
69
|
%
|
|||||||||||
$
|
825,919
|
$
|
974,233
|
$
|
(148,314
|
)
|
-15
|
%
|
||||||||
LIABILITIES AND STOCKHOLDERS EQUITY
|
||||||||||||||||
Deposits
|
$
|
657,154
|
$
|
779,506
|
$
|
(122,352
|
)
|
-16
|
%
|
|||||||
Borrowings
|
38,498
|
73,500
|
(35,002
|
)
|
-48
|
%
|
||||||||||
Subordinated debentures
|
20,619
|
20,619
|
-
|
0
|
%
|
|||||||||||
Accounts payable and accrued expenses
|
5,029
|
2,155
|
2,874
|
133
|
%
|
|||||||||||
Total Liabilities
|
721,300
|
875,780
|
(154,480
|
)
|
-18
|
%
|
||||||||||
Preferred stock
|
-
|
-
|
-
|
0
|
%
|
|||||||||||
Common stock
|
128
|
128
|
-
|
0
|
%
|
|||||||||||
Additional paid-in capital
|
65,744
|
65,538
|
206
|
0
|
%
|
|||||||||||
Retained earnings
|
38,750
|
32,860
|
5,890
|
18
|
%
|
|||||||||||
Accumulated comprehensive income (loss)
|
(3
|
)
|
(73
|
)
|
70
|
-96
|
%
|
|||||||||
Total Stockholders' Equity
|
104,619
|
98,453
|
6,166
|
6
|
%
|
|||||||||||
$
|
825,919
|
$
|
974,233
|
$
|
(148,314
|
)
|
-15
|
%
|
Quarterly income statement results:
|
Three Months Ended September 30,
|
|||||||||||||||
2019
|
2018
|
$ Change
|
% Change
|
|||||||||||||
Interest Income
|
||||||||||||||||
Interest on loans
|
$
|
9,146
|
$
|
8,844
|
$
|
302
|
3
|
%
|
||||||||
Interest on securities
|
224
|
293
|
(69
|
)
|
-24
|
%
|
||||||||||
Other interest income
|
484
|
423
|
61
|
14
|
%
|
|||||||||||
Total interest income
|
9,854
|
9,560
|
294
|
3
|
%
|
|||||||||||
Interest Expense
|
||||||||||||||||
Interest on deposits
|
1,732
|
1,531
|
201
|
13
|
%
|
|||||||||||
Interest on long term borrowings
|
473
|
684
|
(211
|
)
|
-31
|
%
|
||||||||||
Total interest expense
|
2,205
|
2,215
|
(10
|
)
|
0
|
%
|
||||||||||
Net interest income
|
7,649
|
7,345
|
304
|
4
|
%
|
|||||||||||
Provision for (reversal of) loan losses
|
(500
|
)
|
(300
|
)
|
(200
|
)
|
67
|
%
|
||||||||
Net interest income after provision for (reversal of) loan losses
|
8,149
|
7,645
|
504
|
7
|
%
|
|||||||||||
Noninterest Income
|
||||||||||||||||
Mortgage-banking revenue
|
1,108
|
740
|
368
|
50
|
%
|
|||||||||||
Real Estate Commissions
|
430
|
408
|
22
|
5
|
%
|
|||||||||||
Real Estate Management Income
|
144
|
157
|
(13
|
)
|
-8
|
%
|
||||||||||
Other noninterest income
|
1,131
|
1,039
|
92
|
9
|
%
|
|||||||||||
Total noninterest income
|
2,813
|
2,344
|
469
|
20
|
%
|
|||||||||||
Net interest income plus noninterest income after provision for (reversal of) loan losses
|
10,962
|
9,989
|
973
|
10
|
%
|
|||||||||||
Noninterest Expense
|
||||||||||||||||
Compensation and related expenses
|
5,065
|
4,661
|
404
|
9
|
%
|
|||||||||||
Net Occupancy & Depreciation
|
379
|
416
|
(37
|
)
|
-9
|
%
|
||||||||||
Net Costs of Foreclosed Real Estate
|
105
|
7
|
98
|
1400
|
%
|
|||||||||||
Other
|
2,121
|
1,956
|
165
|
8
|
%
|
|||||||||||
Total noninterest expense
|
7,670
|
7,040
|
630
|
9
|
%
|
|||||||||||
Income before income tax provision
|
3,292
|
2,949
|
343
|
12
|
%
|
|||||||||||
Income tax provision
|
911
|
784
|
127
|
16
|
%
|
|||||||||||
Net income
|
$
|
2,381
|
$
|
2,165
|
$
|
216
|
10
|
%
|
||||||||
Net income available to common shareholders
|
$
|
2,381
|
$
|
2,165
|
$
|
216
|
10
|
%
|
Year-to-Date income statement results:
|
Nine Months Ended September 30,
|
|||||||||||||||
2019
|
2018
|
$ Change
|
% Change
|
|||||||||||||
Interest Income
|
||||||||||||||||
Interest on loans
|
$
|
27,539
|
$
|
25,731
|
$
|
1,808
|
7
|
%
|
||||||||
Interest on securities
|
724
|
920
|
(196
|
)
|
-21
|
%
|
||||||||||
Other interest income
|
2,358
|
787
|
1,571
|
200
|
%
|
|||||||||||
Total interest income
|
30,621
|
27,438
|
3,183
|
12
|
%
|
|||||||||||
Interest Expense
|
||||||||||||||||
Interest on deposits
|
5,499
|
3,938
|
1,561
|
40
|
%
|
|||||||||||
Interest on long term borrowings
|
1,543
|
2,244
|
(701
|
)
|
-31
|
%
|
||||||||||
Total interest expense
|
7,042
|
6,182
|
860
|
14
|
%
|
|||||||||||
Net interest income
|
23,579
|
21,256
|
2,323
|
11
|
%
|
|||||||||||
Provision for (reversal of) loan losses
|
(500
|
)
|
(300
|
)
|
(200
|
)
|
67
|
%
|
||||||||
Net interest income after provision for (reversal of) loan losses
|
24,079
|
21,556
|
2,523
|
12
|
%
|
|||||||||||
Noninterest Income
|
||||||||||||||||
Mortgage-banking revenue
|
2,915
|
1,970
|
945
|
48
|
%
|
|||||||||||
Real Estate Commissions
|
1,290
|
1,153
|
137
|
12
|
%
|
|||||||||||
Real Estate Management Income
|
470
|
527
|
(57
|
)
|
-11
|
%
|
||||||||||
Other noninterest income
|
3,013
|
2,472
|
541
|
22
|
%
|
|||||||||||
Total noninterest income
|
7,688
|
6,122
|
1,566
|
26
|
%
|
|||||||||||
Net interest income plus noninterest income after provision for (reversal of) loan losses
|
31,767
|
27,678
|
4,089
|
15
|
%
|
|||||||||||
Noninterest Expense
|
||||||||||||||||
Compensation and related expenses
|
14,499
|
13,359
|
1,140
|
9
|
%
|
|||||||||||
Net Occupancy & Depreciation
|
1,183
|
1,151
|
32
|
3
|
%
|
|||||||||||
Net Costs of Foreclosed Real Estate
|
254
|
21
|
233
|
1110
|
%
|
|||||||||||
Other
|
5,997
|
4,926
|
1,071
|
22
|
%
|
|||||||||||
Total noninterest expense
|
21,933
|
19,457
|
2,476
|
13
|
%
|
|||||||||||
Income before income tax provision
|
9,834
|
8,221
|
1,613
|
20
|
%
|
|||||||||||
Income tax provision
|
2,668
|
2,253
|
415
|
18
|
%
|
|||||||||||
Net income
|
$
|
7,166
|
$
|
5,968
|
$
|
1,198
|
20
|
%
|
||||||||
Net income available to common shareholders
|
$
|
7,166
|
$
|
5,898
|
$
|
1,268
|
21
|
%
|
|
Nine Months Ended September 30,
|
Three Months Ended September 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Per Share Data:
|
|
|||||||||||||||
Basic earnings per share
|
$
|
0.56
|
$
|
0.47
|
$
|
0.19
|
$
|
0.17
|
||||||||
Diluted earnings per share
|
$
|
0.56
|
$
|
0.46
|
$
|
0.19
|
$
|
0.17
|
||||||||
Average basic shares outstanding
|
12,775,104
|
12,541,032
|
12,776,911
|
12,695,136
|
||||||||||||
Average diluted shares outstanding
|
12,853,812
|
12,651,260
|
12,841,679
|
12,832,633
|
||||||||||||
|
||||||||||||||||
Performance Ratios:
|
||||||||||||||||
Return on average assets
|
1.04
|
%
|
0.98
|
%
|
1.05
|
%
|
1.03
|
%
|
||||||||
Return on average equity
|
9.38
|
%
|
9.03
|
%
|
9.15
|
%
|
8.98
|
%
|
||||||||
Net interest margin
|
3.58
|
%
|
3.63
|
%
|
3.53
|
%
|
3.65
|
%
|
||||||||
Efficiency ratio*
|
69.33
|
%
|
70.99
|
%
|
72.31
|
%
|
72.59
|
%
|
||||||||
|
||||||||||||||||
|
September 30, 2019
|
December 31, 2018
|
||||||||||||||
Asset Quality Data:
|
||||||||||||||||
Non-accrual loans
|
$
|
4,333
|
$
|
4,656
|
||||||||||||
Foreclosed real estate
|
1,873
|
1,537
|
||||||||||||||
Total non-performing assets
|
6,206
|
6,193
|
||||||||||||||
Total non-accrual loans to total loans
|
0.66
|
%
|
0.68
|
%
|
||||||||||||
Total non-accrual loans to total assets
|
0.52
|
%
|
0.48
|
%
|
||||||||||||
Allowance for loan losses
|
7,431
|
8,044
|
||||||||||||||
Allowance for loan losses to total loans
|
1.12
|
%
|
1.18
|
%
|
||||||||||||
Allowance for loan losses to total non-accrual loans
|
171.5
|
%
|
172.8
|
%
|
||||||||||||
Total non-performing assets to total assets
|
0.75
|
%
|
0.64
|
%
|
||||||||||||
Non-accrual troubled debt restructurings (included above)
|
292
|
446
|
||||||||||||||
Performing troubled debt restructurings
|
9,023
|
10,698
|
||||||||||||||
Loan to deposit ratio
|
100.6
|
%
|
87.5
|
%
|
* |
This non-GAAP financial measure is calculated as noninterest expenses less OREO expenses divided by net interest income plus noninterest income
|