3rd Quarter Earnings Hold Steady at Severn Bancorp

Severn Bancorp, Inc., (Nasdaq: SVBI) parent company of Severn Savings Bank, FSB (“Severn”), today announced net income of $558,000 or $.02 per share for the third quarter of 2012 compared to a net income of $551,000 or $.01 per share for the third quarter of 2011 and compared to net income of $1,097,000 or $.07 per share, for the quarter ended June 30, 2012.  Earnings per share is calculated using net income available for common shareholders, which is net income less preferred stock dividends.

“Although we had net earnings in the third quarter, we need those earnings to improve.  While Severn continues to aggressively deal with its non-performing and non-accrual loans, and has been successfully liquidating real estate acquired through foreclosure, it is a process that will continue to take time to resolve,” stated Alan J. Hyatt, president and chief executive officer.  Mr. Hyatt continued “We have been staying very busy expanding lines of business and launching new products and channels, such as Mobile Banking, to keep us current and competitive in the market.  Severn is committed to providing the resources, products and expertise of a larger financial institution, along with the local decision making, market knowledge and personal service of a community bank.  We want to be able to offer value to our customers and an excellent banking experience.”

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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 $860 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.

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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, 2011.