Severn Bancorp, Inc. Announces Year End Earnings

Annapolis, MD (January 29, 2019) – Severn Bancorp, Inc., (Nasdaq: SVBI) parent company of Severn Bank, today announced net income of $2.6 million for the three months ending December 31, 2018 versus a net loss of $349 thousand for the same quarter in 2017. On a diluted per share basis, earnings were $0.20 versus $(0.03) for the quarters ended December 31, 2018 and 2017, respectively. Net income for the year ended December 31, 2018 was $8.6 million, a 204% increase over net income of $2.8 million for the year ended December 31, 2017. For the years ended December 31, 2018 and 2017, diluted earnings per share were $0.67 and $0.21, respectively.

“Earnings for the quarter showed significant year over year improvement,” stated Alan J. Hyatt, President and Chief Executive Officer. Mr. Hyatt continued, “We are seeing results from planning and activities we have put in place to grow the company and build new relationships. We are working on many exciting projects for 2019 in order to continue the positive trend. Every action we are taking is dedicated to making Severn Bank the best it can be and increasing shareholder value. ”

Net interest income increased 17% during the fourth quarter of 2018. Net interest income was $7.8 million during the fourth quarter of 2018 versus $6.7 million during the fourth quarter of 2017. For the years ended December 31, 2018 and 2017, net interest income was $29.1 million and $24.6 million, respectively.

Noninterest income increased 61% during the quarter ended December 31, 2018. Noninterest income was $2.4 million for the three months ended December 31, 2018, up from $1.5 million as of December 31, 2017. For the year ended December 31, 2018, noninterest income was $8.8 million. This represents a 68% increase over the $5.2 million reported for the fourth quarter of 2017. Growth in mortgage banking revenue, title services, and deposit fees contributed to the increase.

Noninterest expenses were $6.9 million for the three months ended December 31, 2018 versus $5.6 million for the same period in 2017. For the year ended December 31, 2018, noninterest expenses were $26.6 million, which is an increase of 17% over the same period in 2017. The increase is primarily due to higher commissions paid to mortgage loan officers as a result of increased production.

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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 $974 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.

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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, 2017.