Severn Bancorp, Inc. Reports Increased Earnings for Fourth Quarter 2014

Annapolis, MD (January 28, 2015) – Severn Bancorp, Inc., (Nasdaq: SVBI) (“Company”) parent company of Severn Savings Bank, FSB (“Severn”), reported net income of $1,550,000 or $.10 per share for the fourth quarter of 2014, a 45% increase compared to net income of $1,068,000 or $.05 per share for the third quarter of 2014. Earnings for the fourth quarter of 2014 are also significantly higher than the reported fourth quarter 2013 net loss of $5,472,000 or ($0.58) per share. Fourth quarter earnings in 2013 were impacted by the loss on the sale of certain non-performing loans during the year. For the year ended December 31, 2014 the Company reported net income of $2,909,000 or $.06 per share versus a loss of $25,165,000 or ($2.64) per share for the year ended December 31, 2013. Earnings per share is calculated using net income available for common shareholders, which is net income less preferred stock dividends and discount amortization.

Severn Bancorp, Inc. saw results trending in the right direction for the fourth quarter, with a slight increase in net interest margin and a continued decrease in non-performing assets. The Company also saw a sizable decrease in its quarterly efficiency ratio from 80.40% to 72.96%. Severn experienced an increase in its loan portfolio due to vigorous lending activity. Results also included a quarterly improvement in Return on Average Assets (ROAA) and Return on Average Equity (ROAE). Alan J. Hyatt, President and Chief Executive Officer commented, “We continue to make progress in key areas. Initiatives we have been working on for many months are producing results.”

Mr. Hyatt added, “We are gaining traction with the local small to mid-size business community who wants to work with a local bank. We offer a combination of knowledgeable staff, a wide array of products and unrivaled personal service. Banking may not always be at the top of everyone’s list, but we do our part to make the experience pleasurable for our customers. People appreciate someone going that extra mile for them. ”

Click here for the full table of financial results.

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 $780 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.
# # #

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, 2013.