ANNAPOLIS, MD (April 15, 2010) — Severn Bancorp, Inc., (Nasdaq SVBI) parent company of Severn Savings Bank, FSB (“Severn”), today announced results for the quarter ended March 31, 2010. Net loss for the first quarter of 2010 was approximately $500,000 (unaudited), or ($.10) per share, compared to a net loss of $1.3 million (unaudited) or ($.18) per share for the first quarter of 2009 and net loss of $2.7 million (unaudited), or $(.31) per share for the fourth quarter of 2009. The net loss of approximately $500,000 for the quarter was primarily due to an increase in the loan loss reserve of approximately $2.5 million during the quarter ended March 31, 2010. This increase is a non-cash charge against earnings. At March 31, 2010, 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.
“An increase in our net interest margin and a reduction in our provision for loan losses during the quarter helped improve our earnings on a year over year and sequential basis,” said Alan J. Hyatt, president and chief executive officer. “While we are not satisfied with the loss for the quarter, we are encouraged by the improvement in asset quality and the prospects for improved performance for the remainder of 2010. We feel we’re on the right track with positive trends in performance and problem assets. Our core earnings remain positive driven largely by our lower cost of funds and overhead cost controls. We continue to position ourselves for a return to stronger performance as the economy improves.”