Severn Bancorp, Inc. Announces Second Quarter Earnings

ANNAPOLIS, Md., July 24, 2020 /PRNewswire/ — Severn Bancorp, Inc. (the Company) (NASDAQ: SVBI), the parent company of Severn Bank (the Bank), reported net income of $1.7 million for the second quarter ended June 30, 2020 and $2.3 million for the six months ended June 30, 2020 compared to $2.2 million and $4.8 million for the same periods in 2019. Earnings per share on a fully diluted basis were $0.14 for the second quarter and $0.18 per share for the first six months of 2020, down from $0.17 and $0.37 per share, respectively, from the second quarter and first six months of 2019.

Response to COVID-19
The Company continues to monitor the impact of the COVID-19 pandemic. Its goal is to keep employees and customers safe. To that end, some employees are working remotely and those who are on-site are practicing appropriate social distancing and other protocols that are designed to avoid COVID-19.

The Company is closely monitoring the effects of the pandemic on our loan and deposit customers. Our management team is focused on assessing the risks in our loan portfolio and working with customers to minimize losses. We have implemented loan programs to allow customers who were required to close or reduce their business operations to temporarily defer loan principal and interest payments. The Company is also participating in the SBA Paycheck Protection Program (PPP) to help disburse loans to our business customers to provide them with additional working capital. To date, the Company has funded 428 PPP loans totaling in excess of $47 million, and is working diligently with the SBA to qualify customers to receive PPP loans while they are still available. Through the first six months of 2020 the Company performed 123 short-term COVID-19 related modifications of loans totaling $96.6 million.

The Company enjoyed a good second quarter, as its cost of funds continues to decline and the Company continues to originate a record volume of residential mortgages. “While it remains difficult to know what the future will bring in light of the severe economic impacts occasioned by this pandemic, business continues to be strong,” said Alan J. Hyatt, President and Chief Executive Officer. “The Company remains well capitalized and it continues to offer a full range of services to our customers and our community.” Mr. Hyatt said that “while the portfolio is holding up well, as a measure of conservation, loan loss reserves have been increased to 1.33% of gross loans [net of PPP loans], and will continue to be carefully monitored.”

The Company has also taken measures to protect the health and safety of its customers and employees by encouraging remote work arrangements to the extent possible, adjusting banking center hours, wearing masks, and implementing operational measures to promote social distancing. Management is closely monitoring credit metrics and performing stress testing on the Bank’s loan portfolio. Additional resources have been shifted to credit administration to closely analyze higher risk segments within the loan portfolio, monitor and track loan payment deferrals and customer liquidity, and provide timely reporting to management and the board of directors. Based on the Company’s capital and liquidity levels, conservative underwriting policies, loan concentration diversification, and geographical marketplace, management expects to be able to manage the economic risks and uncertainties associated with the COVID-19 pandemic and remain well capitalized.

Income Statement
Net interest income was $6.6 million for the second quarter ended June 30, 2020 and $13.4 million for the six months ended June 30, 2020 compared to $7.8 million and $15.9 million for the same periods in 2019. The decreases in interest income was driven by lower volumes of earning assets, particularly from significantly lower interest rates earned on medical-use cannabis related deposits that were invested in fed funds or interest bearing deposits with other banks and earned higher interest income during 2019. Also, loan interest income decreased from lower average loan volumes as well as lower yielding PPP loans, which was slightly offset by a reduction in interest expense from lower deposit rates and less reliance on borrowings.

Provision expense was zero for the second quarter ended June 30, 2020 and $750 thousand for the six months ended June 30, 2020 compared to zero for the same periods in 2019. The ratio of the allowance for loan losses to gross loans was 1.24% at June 30, 2020. Excluding PPP loans, the ratio of the allowance for loan losses to gross loans was 1.33% at June 30, 2020, higher than both the 1.25% at March 31, 2020 and the 1.11% at December 31, 2019. The primary drivers of the increased percentage of the allowance to total loans, excluding PPP loans, were increases in qualitative factors from the impact of the COVID-19 pandemic as well as a decrease in loan volume.

Noninterest income was $3.2 million for the second quarter ended June 30, 2020 and $6.3 million for the six months ended June 30, 2020 compared to $2.6 million and $4.9 million for the same periods in 2019. Growth in mortgage banking production continued to contribute significantly to the increases in noninterest income.

Noninterest expense was $7.5 million for the second quarter ended June 30, 2020 and $15.7 million for the six months ended June 30, 2020 compared to $7.5 million and $14.3 million for the same periods in 2019. There were higher commissions paid to mortgage loan officers from increased production and higher occupancy and staffing costs as a result of opening a new branch in Crofton during the third quarter of 2019. In addition, there were nonrecurring noninterest expenses including: legal and professional fees of $325 thousand, loss on sale of OREO property of $74 thousand, and write-off of leasehold improvements related to a lease termination of $76 thousand.

Balance Sheet
Total assets increased nearly $100 million to $924 million at June 30, 2020 from $827 million at December 31, 2019. The increase in assets was primarily in federal funds and interest bearing deposits in other banks as well as loans receivable from PPP originations. Deposits also increased by $88 million from December 31, 2019. The increase in deposits was primarily the result of short term, medical-use cannabis related funds that account holders maintain at the Bank prior to pursuing other longer term investment opportunities as well as PPP loans to customers who had not yet withdrawn the funds. Management is aware of the short term nature of certain medical-use cannabis related deposits and offset those funds by maintaining short term liquidly to meet any deposit outflows.

About Severn Bank
Founded in 1946, Severn Bank 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 offers seven branches located in Annapolis, Edgewater, Severna Park, Lothian/Wayson’s Corner, Crofton, 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 Bank 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. The Company’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 the Company’s general market area, federal and state regulation, competition, the rapidly changing uncertainties related to the Covid-19 pandemic including, but not limited to, the potential adverse effect of the pandemic on the economy, our employees and customers, and our financial performance, and other factors detailed from time to time in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including “Item 1A. Risk Factors” contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

Severn Bancorp, Inc. Announces Dividend

ANNAPOLIS, Md., May 27, 2020 /PRNewswire/ — Severn Bancorp, Inc. (the Company) (NASDAQ: SVBI), the parent company of Severn Bank (the Bank) today announced that the Board of Directors approved a cash dividend to its shareholders. The cash dividend of four cents ($0.04) per share of common stock, will be payable on June 19, 2020 to shareholders of record at the close of business on June 8, 2020.

Alan J. Hyatt, President and Chief Executive Officer said, “While recent economic times have been challenging, the Company remains optimistic for the future and continues to support our shareholders with this dividend. Severn Bank has grown banking relationships through the Paycheck Protection Program, which has been a big help to small business. The renewed recognition that community banks play a significant role in the success of local businesses they serve has not gone unnoticed during these past few months. Severn Bank remains committed to supporting Anne Arundel County residents and businesses.”

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 seven branches located in Annapolis, Crofton, Edgewater, Glen Burnie, Lothian/Wayson’s Corner, and Severna Park. 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, 2019.

Severn Bancorp, Inc. Announces First Quarter Earnings – Strong Noninterest Income Growth

ANNAPOLIS, Md.April 27, 2020 /PRNewswire/ — Severn Bancorp, Inc. (the Company) (NASDAQ: SVBI), the parent company of Severn Bank (the Bank), reported net income available to common shareholders for the first quarter ended March 31, 2020 of $565 thousand versus $2.6 million for the first quarter of 2019. Earnings per share on a fully diluted basis were $0.04 versus $0.20 for the quarters ended March 31, 2020 and 2019, respectively.

Response to COVID-19
The COVID-19 pandemic has already impacted the local economy in the Annapolis and greater Anne Arundel County area. Federal, state, and local stay-at-home orders were enacted in our markets in March 2020 causing many businesses to close and workers to be furloughed or lose jobs. Essential purpose entities such as medical professionals, food and agricultural businesses, and transportation and logistical businesses were exempted from the closures; however, unemployment rates are increasing in our markets.

The Company is closely monitoring the effects of the pandemic on our loan and deposit customers. Our management team is focused on assessing the risks in our loan portfolio and working with customers to minimize losses. We have implemented loan programs to allow customers who were required to close or reduce their business operations to temporarily defer loan principal and interest payments. The Company is also participating in the SBA Paycheck Protection Program (PPP) to help disburse loans to our business customers to provide them with additional working capital. To date, the Company has processed 185 applications, almost 100% of the applications submitted, totaling approximately $36 million, and is working diligently with the SBA to qualify customers to receive PPP loans. Many employees worked 20 hours straight up until the very last viable applicant was submitted as the SBA portal closed.

“We have provided Payroll Protection Program loans to our local business community as aggressively as possible,” said Alan J. Hyatt, President and Chief Executive Officer, “knowing these loans provide lifelines to businesses and their employees. This Company remains committed to the local economy during these challenging times. We respect and admire the commitment others are making in the fight against COVID-19, including first responders, health care workers, and those providing other essential services. We are also grateful to Governor Hogan for the outstanding leadership he is providing in the State of Maryland.”

The Company has also taken measures to protect the health and safety of its customers and employees by encouraging remote work arrangements to the extent possible, adjusting banking center hours, and implementing operational measures to promote social distancing. Management is closely monitoring credit metrics and performing stress testing on the Bank’s loan portfolio. Additional resources have been shifted to credit administration to closely analyze higher risk segments within the loan portfolio, monitor and track loan payment deferrals and customer liquidity, and provide timely reporting to management and the board of directors. Based on the Company’s capital and liquidity levels, conservative underwriting policies, loan concentration diversification, and geographical marketplace, management expects to be able to manage the economic risks and uncertainties associated with the COVID-19 pandemic and remain well capitalized.

“These are difficult times, and our Company is holding up well,” said Hyatt.

Income Statement
Net interest income in the first quarter 2020 decreased $1.3 million or 16% to $6.8 million compared to the first quarter of 2019. Less first quarter interest income was generated from lower volumes of earning assets, particularly from significantly lower medical-use cannabis related deposits that earned overnight interest income during the first quarter of 2019. Also, loan interest income decreased from lower loan volumes, which was slightly offset by a reduction in interest expense from less reliance on borrowings.

Provision expense in the first quarter 2020 was $750 thousand compared to zero for the first quarter of 2019. In anticipation of the potential negative effects of the COVID-19 pandemic on our loan portfolio, adjustments were made to the allowance for loan losses increasing factors related to economic conditions, lending policies and procedures, and industry conditions.

Noninterest income in the first quarter 2020 increased $765 thousand or 34% to $3.0 million from the first quarter of 2019. Growth in mortgage banking production contributed significantly to the increases in noninterest income.

Noninterest expense in the first quarter 2020 increased $1.5 million or 22% to $8.3 million from the first quarter of 2019. Nonrecurring noninterest expenses increased due to several factors, including: legal and professional fees of $280 thousand, loss on sale of OREO property of $74 thousand, and write-off of leasehold improvements related to a lease termination during the quarter of $76 thousand. In addition, there were higher commissions paid to mortgage loan officers from increased production and higher occupancy and staffing costs as a result of opening a new branch in Crofton during the third quarter of 2019.

Balance Sheet
Total assets increased more than $30 million to $857 million at March 31, 2020 from $827 million at December 31, 2019. The increase in assets was primarily in federal funds and interest bearing deposits in other banks as well as loans held for sale from high production during the quarter. Deposits also increased by $29 million from December 31, 2019. The increase in deposits was primarily the result of short term, medical-use cannabis related funds that account holders maintain at the Bank prior to pursuing other longer term investment opportunities. Management is aware of the short term nature of certain medical-use cannabis related deposits and offset those funds by maintaining short term liquidly to meet any deposit outflows.

About Severn Bank
Founded in 1946, Severn Bank 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 offers seven branches located in AnnapolisEdgewaterSeverna ParkLothian/Wayson’s Corner, Crofton, 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 Bank 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. The Company’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 the Company’s general market area, federal and state regulation, competition, the rapidly changing uncertainties related to the Covid-19 pandemic including, but not limited to, the potential adverse effect of the pandemic on the economy, our employees and customers, and our financial performance, and other factors detailed from time to time in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including “Item 1A. Risk Factors” contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

Severn Bancorp, Inc. Announces Dividend

ANNAPOLIS, Md., Feb. 26, 2020 /PRNewswire/ — Severn Bancorp, Inc., (NASDAQ: SVBI) (the “Company”), parent company of Severn Bank today announced that the Board of Directors approved a cash dividend to its shareholders. The cash dividend of four cents ($0.04) per share of common stock, will be payable on March 17, 2020 to shareholders of record at the close of business on March 6, 2020.

Alan J. Hyatt, President and Chief Executive Officer said, “We concluded a successful 2019 and the Board has declared a four cent dividend. The Company remains poised for growth and looks forward to continuing its commitment to providing the citizens and businesses of Anne Arundel County with solid community banking.”

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 seven branches located in Annapolis, Crofton, Edgewater, Glen Burnie, Lothian/Wayson’s Corner, and Severna Park. 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, 2018.

Severn Bancorp, Inc. Announces Annual Earnings – Strong Noninterest Income Growth

Annapolis, MD, January 27, 2020 (PRNewswire) – Severn Bancorp, Inc., (NASDAQ: SVBI), the parent company of Severn Bank, reported net income available to common shareholders for the 2019 year of $8.4 million vs. $8.5 million for the 2018 year. Net Income available to common shareholders for fourth quarter was $1.2 million vs. $2.6 million for the fourth quarter of 2018. Total assets were up slightly in the fourth quarter 2019 from the prior quarter to $827 million, but down $147 million from the prior year-end of $974 million at December 31, 2018. Earnings per share on a fully diluted basis were $0.09 for the fourth quarter and $0.65 per share for the year ended December 31, 2019 vs. $0.20 and $0.67 per share, respectively, for the same periods in 2018.

“At first glance some of the year-end financial results may seem concerning,” stated Alan J. Hyatt, President and Chief Executive Officer. Mr. Hyatt continued, “The Bank experienced significant payoffs in outstanding loans. We also saw a large reduction in short term investor deposits that affected earnings. However, the balance sheet reflects significant strength and will allow the Bank to grow assets. Additional top-notch team members have been added to the lending team to help us achieve this loan growth. ”

Net interest income in the fourth quarter 2019 decreased $873 thousand to $6.9 million from the fourth quarter of 2018 with a $1.5 million increase or 5% to $30.5 million for the 2019 year vs. $29.1 million earned for the 2018 fiscal year. Less fourth quarter interest income was generated from lower volumes of earning assets, particularly from significantly lower medical-use cannabis related deposits that earned overnight interest income during the first half of 2019. Also, loan interest income decreased from lower loan volumes, which was slightly offset by a reduction in interest expense from less reliance on borrowings.

Noninterest income in the fourth quarter 2019 increased $202 thousand to $2.6 million from the fourth quarter of 2018 with a $1.8 million increase or 22% to $10.3 million for the 2019 year vs. $8.4 million in 2018. Growth in mortgage banking production and deposit fees from medical-use cannabis related accounts contributed significantly to the increases in noninterest income.

Noninterest expenses in the fourth quarter 2019 increased $877 thousand to $7.7 million from the fourth quarter of 2018 with a $3.4 million increase or 13% to $29.7 million for the 2019 year vs. $26.2 million in 2018. Non-interest expenses increased for both periods due to several factors, including: accounting and professional fees, severance payments to the former CFO, and higher commissions paid to mortgage loan officers and real estate brokers as a result of increased production in 2019. In addition, contributing to the increase was higher occupancy costs and additional staffing as a result of opening a new branch in Crofton in the third quarter of 2019.

Total assets decreased $147 million to $827 million at December 31, 2019 from $974 million at December 31, 2018. The decrease in assets was primarily in federal funds and interest bearing deposits in other banks as well as loans due to unexpected payoffs. Deposits and borrowed funds decreased $118 million and $39 million, respectively from December 31, 2018 to December 31, 2019. The decrease in deposits was primarily the result of short term, medical-use cannabis related funds that account holders maintained at Severn Bank prior to pursuing other longer term investment opportunities. Management was aware of the short term nature of certain medical-use cannabis related deposits and offset those funds by maintaining short term liquidly to meet any deposit outflows.

Click here to see the full tables:

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 offers seven branches located in Annapolis, Edgewater, Severna Park, Lothian/Wayson’s Corner, Crofton, 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, 2018.

Severn Bank Opens New Full-Service Branch in Crofton

Annapolis, MD (October 31, 2019) – Severn Bank (“Severn”) has announced the opening of a new branch at 2151 Defense Highway in the Priest Bridge Shopping Center in Crofton, Maryland. This is the seventh branch in Anne Arundel County for the bank.

The 1,263 square foot branch includes tellers and drive-through teller windows, an ATM, and on-site commercial and mortgage bankers. The building was renovated to improve the appearance and provide a friendly and welcoming environment for customers in the area. The new Crofton branch offers free on-site parking.

Alan J. Hyatt, President of Severn Bank said “We are excited to open another new branch. Severn has a long history in Anne Arundel County, and we look forward to providing a local community banking option to the residents of the greater Crofton area. This is our first branch west of I97 and we are looking forward to expanding and introducing new customers to our exceptional products, employees and service.”

Kimlloy Broughton is the Crofton Severn Bank Branch Manager. Other team members from the previous location have also joined Severn Bank to work in the Crofton branch. Lobby and drive-through hours are Monday – Thursday 9:00 a.m. – 5:00 p.m., Friday 9:00 a.m. – 6:00 p.m. and Saturday 9:00 a.m. – 12:00 p.m.

About Severn Bank: Founded in 1946, Severn Bank 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 offers seven branches located in Annapolis, Crofton, Edgewater, Glen Burnie, Wayson’s Corner/Lothian, and Severna Park, 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.

Severn Bancorp, Inc. Reports Strong Third Quarter and Year-To-Date Earnings

Annapolis, MD, October 28, 2019 (PRNewswire) – Severn Bancorp, Inc., (NASDAQ: SVBI), the parent company of Severn Bank, reported net income available to common shareholders of $2.4 million for the third quarter ended September 30, 2019 and $7.2 million for the nine months ended September 30, 2019 versus $2.2 million and $5.9 million for the same periods in 2018. Total assets were down slightly in the third quarter 2019 from the prior quarter to $826 million and also down $148 million from the prior year-end of $974 million at December 31, 2018. Earnings per share on a fully diluted basis were $0.19 for the third quarter and $0.56 per share for the first nine months of 2019, up nicely from $0.17 and $0.46 per share, respectively, from the third quarter and first nine months of 2018.

“Earnings look good again for this quarter,” stated Alan J. Hyatt, President and Chief Executive Officer. Mr. Hyatt continued, “We are seeing progress in certain areas such as mortgage lending and commercial banking that are resulting in improved net income figures. We did see an uptick in some non-recurring expenses this quarter, but we always keep efficiency and cost control at the forefront. Those efforts along with the continued focus on developing banking relationships should keep us on the path to continued sustainable profits.”

Net interest income increased $304,000, an increase of 4% during the third quarter of 2019. Net interest income was $7.6 million for the three months ending September 30, 2019 versus $7.3 million during the third quarter of 2018. For the nine months ending September 30, 2019, net interest income was $23.6 million versus $21.3 million for September 30, 2018, an increase of $2.3 million or 11%.

Provision for loan losses was negative $500,000 for the three and nine month periods ending September 30, 2019, compared to negative $300,000 for the same periods in 2018. The negative provision is a reversal of previous expense associated with the allowance for loan losses. As a result of a decrease in loan balances from unexpected payoffs, minimal charge-off activity, and stable asset quality, a portion of the unallocated allowance for loan losses was reversed into income.

Non-interest income increased to $2.8 million from $2.3 million during the three months ending September 30, 2019. For the nine months ending September 30, 2019 non-interest income increased by $1.6 million to $7.7 million from $6.1 million at September 30, 2018, or an increase of 26%. Growth in mortgage banking production and deposit fees from medical-use cannabis related accounts contributed significantly to the increase in non-interest income.

Non-interest expenses were $7.7 million for the three months ending September 30, 2019 versus $7.0 million for the same period in 2018. For the nine months ending September 30, 2019, non-interest expenses were $21.9 million versus $19.5 million for the same period in 2018. Non-interest expenses increased for both the three and nine month periods due to several factors, including: accounting and professional fees, severance payments to the former CFO, and higher commissions paid to mortgage loan officers and real estate brokers as a result of increased production in 2019. In addition, contributing to the increase was higher occupancy costs and additional staffing as a result of the opening of a new branch in Crofton in the third quarter of 2019.

Total assets decreased $148 million to $826 million at September 30, 2019 from $974 million at December 31, 2018. The decrease in assets was primarily in federal funds and interest bearing deposits in other banks as well as loans due to unexpected payoffs. Deposits and borrowed funds decreased $122.4 million and $35.0 million, respectively from December 31, 2018 to September 30, 2019. The decrease in deposits was primarily the result of short term, medical-use cannabis related funds that account holders maintained at Severn Bank prior to pursuing other longer term investment opportunities. Management was aware of the short term nature of certain medical-use cannabis related deposits and offset those funds by maintaining short term liquidly to meet any deposit outflows.

Click here to see full tables.

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 offers seven branches located in Annapolis, Edgewater, Severna Park, Lothian/Wayson’s Corner, Crofton, 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, 2018.

 

Severn Bank Appoints Vance W. Adkins Chief Financial Officer

ANNAPOLIS, MD (August 29, 2019) — The Board of Directors of Severn Bancorp, Inc. (the “Company”), and its subsidiary, Severn Bank (the “Bank”) appointed Vance W. Adkins, Executive Vice President and Chief Financial Officer of the Company and the Bank effective September 16, 2019.

Mr. Adkins brings years of experience in financial management, and in particular banking, to Severn Bank. From 2016 until the completion of its merger in April 2019, Mr. Adkins served as Chief Financial Officer of HomeTown Bankshares Corporation and its banking subsidiary, HomeTown Bank, located in Roanoke, Virginia. Before serving as Chief Financial Officer he held the position of Senior Risk Officer of HomeTown Bank from 2010 until 2016. Mr. Adkins is a Certified Public Accountant and received his Bachelor of Science in Business and Masters of Science in Accounting and Information Systems from Virginia Tech in Blacksburg, VA.

Alan J. Hyatt, President and Chief Executive Officer, remarked, “We are looking forward to having Vance join the Severn Bank team. He brings knowledge and experience to our organization as we undertake growth. He comes from a community bank background similar to ours so he will have a good understanding of our commitment to the community we serve. His background as a CPA and Bank Risk Officer will also prove invaluable in this period of changing regulations.”

 About Severn Bank

Founded in 1946, Severn Bank 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 $882 million and six branches located in Annapolis, Edgewater, Glen Burnie, Lothian/Wayson’s Corner, and Severna Park, and a seventh scheduled to open in Crofton in 2019.  The bank specializes in exceptional customer service and holds itself and its employees to a high standard of community contribution.

 

Severn Bancorp, Inc. Announces Increased Dividend for Second Quarter

Annapolis, MD (August 28, 2019) – Severn Bancorp, Inc., (NASDAQ: SVBI) (the “Company”), parent company of Severn Bank today announced that the Board of Directors approved a cash dividend to its shareholders. The cash dividend of four cents ($0.04) per share of common stock, a 33% increase from the previous quarter payment of three cents ($0.03) per share of common stock, will be payable on September 17, 2019 to shareholders of record at the close of business on September 6, 2019.

Alan J. Hyatt, President and Chief Executive Officer said, “We are happy to be able to increase the dividend payment for the second quarter to four cents. We hope this sends a signal to our shareholders of our commitment to them and to increasing shareholder value. The Company remains dedicated to continued increases in earnings and organic growth.”

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 approximately $882 million and six branches located in Annapolis, Edgewater, Glen Burnie, Lothian/Wayson’s Corner, and Severna Park, with a seventh scheduled to open in Crofton in 2019. 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, 2018.

Severn Bancorp, Inc. Announces Second Quarter Earnings

Annapolis, MD (July 26, 2019) – Severn Bancorp, Inc., (Nasdaq: SVBI) parent company of Severn Bank, today announced net income of $2.2 million for the three months ending June 30, 2019 versus $1.9 million for the same quarter in 2018. On a diluted per share basis, earnings were $0.17 versus $0.15 for the quarters ending June 30, 2019 and 2018, respectively.

Net income for the six months ending June 30, 2019 was $4.8 million versus $3.8 million for June 30, 2018, an increase of 26%. On a diluted per share basis, earnings were $0.37 versus $0.30 for the six months ending June 30, 2019 and 2018 respectively, an increase of 23%.

“Earnings are respectable again for the second quarter of this year,” stated Alan J. Hyatt, President and Chief Executive Officer. Mr. Hyatt continued, “We are pleased with the continued upward trajectory of the company’s earnings. Our quarterly results were boosted by increased residential mortgage production and a continued push on the commercial banking front. We have our sights set on building even deeper ties in the community and serving the residents and businesses with unrivaled personal local banking and service.”

Net interest income increased $918,000, an increase of 13% during the second quarter of 2019. Net interest income was $7.8 million for the three months ending June 30, 2019 versus $6.9 million during the second quarter of 2018. For the six months ending June 30, 2019, net interest income was $15.9 million versus $13.9 million for June 30, 2018, an increase of $2.0 million or 15%.

Non-interest income increased to $2.6 million from $2.1 million during the three months ending June 30, 2019. For the six months ending June 30, 2019 non-interest income increased by $1.0 million to $4.9 million from $3.9 million at June 30, 2018, or an increase of 26%. Growth in mortgage banking production and deposit fees for medical-use cannabis related accounts contributed to the increase non-interest income.

Non-interest expenses were $7.5 million for the three months ending June 30, 2019 versus $6.4 million for the same period in 2018. The increase is due to several factors, including: higher expenses for accounting and professional fees related to SOX Section 404 compliance, severance payment to the former CFO and higher commissions paid to mortgage loan officers and real estate brokers as a result of increased production in 2019.

For the six months ending June 30, 2019, non-interest expenses were $14.3 million versus $12.5 million for the same period in 2018. Several factors contributed to higher expenses, including accounting and professional fees related to SOX Section 404 compliance, severance payment to the former CFO and higher commissions paid to mortgage loan officers and real estate brokers as a result of increased production in 2019. In addition, contributing to the increase for the first six months of 2019 was higher occupancy costs and additional staffing as a result of the opening of the Lothian Branch in the second quarter of 2018 and the addition of the Frederick mortgage production office in the second quarter of 2018.

Total assets decreased $112 million to $862.1 million at June 30, 2019 from $974.2 million to December 31, 2018. The decrease in assets was primarily in federal funds and interest bearing deposits in other banks. Deposits and borrowed funds decreased $94.1 million and $25.0 million, respectively from December 31, 2018 to June 30, 2019. The decrease in deposits was the result of short term, medical-use cannabis related funds that account holders maintained at Severn Bank prior to pursuing to investment opportunities. Management was aware of the short term nature of certain medical-use cannabis related deposits and offset those funds by maintaining short term liquidly to meet any deposit outflows.

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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 $862 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, 2018.