ANNAPOLIS, Md., July 27, 2016 /PRNewswire/ -- Severn
Bancorp, Inc., ("the Company"),(Nasdaq: SVBI) parent company of
Severn Bank ("Severn"), today
announced net income of $12,475,000
or $1.02 per diluted share for the
second quarter of 2016 compared to a net income of $1,365,000 or $.08
per diluted share for the second quarter of 2015. Earnings for the
second quarter also increased compared to net income of
$907,000 or $.03 per diluted share for the first quarter of
2016. Year to date earnings increased to $13,382,000 or $1.12 per diluted share for 2016 versus
$2,230,000 or $.10 per share for the same period of 2015.
Diluted earnings per share is calculated using net income available
for common shareholders, which is net income less preferred stock
dividends and discount amortization.
Included in the net income for the quarter ended June 30, 2016 is the reversal of the valuation
allowance recorded against the net deferred tax assets of the
Company. The reversal results in the recognition of a one-time
income tax benefit in the second quarter of 2016 of approximately
$11,837,000, or $1.00 per diluted share. The Company has now
concluded that, as of June 30, 2016,
it is more likely than not that it will generate sufficient taxable
income within the applicable carry-forward periods to realize its
net deferred tax assets. This conclusion, and the resulting
reversal of the net deferred tax asset valuation allowance, is
based upon consideration of a number of factors, including the
Company's (i) completion of an eighth consecutive quarter of
profitability and (ii) forecast of future profitability, under
several potential scenarios where the Company has assigned more
weight to its continued profitability than potential future growth
which it is planning to achieve. As a result of the reversal, the
Company's net deferred tax asset amounted to approximately
$11,239,000 as of June 30, 2016.
"The second quarter of 2016 has seen a lot of positive activity
for the Company," stated Alan J.
Hyatt, President and Chief Executive Officer. Mr. Hyatt
continued, "During the quarter we raised $11
million in new capital and redeemed $10 million of TARP preferred shares. Our
assets increased over $30 million
from year end 2015 with a $19 million
increase in our loan portfolio. Our Commercial Banking team
is doing a fantastic job of meeting our local business community's
lending needs. We are making good progress on the opening of our
fifth branch in Severna Park,
Maryland scheduled for this Fall. All signs point to
potential for continued growth and strength for Severn. We are excited for the continued
opportunity to offer the best in local banking to Anne Arundel County residents."
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 $790 million
and four branches located in Annapolis, Edgewater and Glen
Burnie, Maryland with a fifth branch scheduled to open in
the Fall of 2016. The bank specializes in exceptional customer
service and holds itself and its employees to a high standard of
community contribution. Severn Bank is a trade name used by Severn
Savings Bank, FSB. 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,
2015.
Severn Bancorp,
Inc.
|
Selected Financial
Data
|
(dollars in
thousands, except per share data)
|
(Unaudited)
|
|
|
For the Three
Months Ended
|
|
June
30,
|
March
31,
|
December
31,
|
September
30,
|
June
30,
|
|
2016
|
2016
|
2015
|
2015
|
2015
|
|
|
|
|
|
|
Summary Operating
Results:
|
|
|
|
|
|
Interest
income
|
$
7,642
|
$
7,504
|
$
7,582
|
$
7,932
|
$
7,779
|
Interest
expense
|
2,101
|
2,269
|
2,264
|
2,284
|
2,243
|
Net interest
income
|
5,541
|
5,235
|
5,318
|
5,648
|
5,536
|
Provision for loan
losses
|
100
|
-
|
(480)
|
-
|
100
|
Net interest income
after provision
|
|
|
|
|
|
for loan
losses
|
5,441
|
5,235
|
5,798
|
5,648
|
5,436
|
Non-interest
income
|
1,843
|
1,221
|
1,409
|
1,469
|
2,332
|
Non-interest
expense
|
6,003
|
5,549
|
6,127
|
5,838
|
6,368
|
Income before income
tax provision
|
1,281
|
907
|
1,080
|
1,279
|
1,400
|
Income tax (benefit)
provision
|
(11,194)
|
-
|
2
|
52
|
35
|
Net
income
|
$
12,475
|
$
907
|
$
1,078
|
$
1,227
|
$
1,365
|
Net income available
to common shareholders
|
$
12,012
|
$
313
|
$
484
|
$
633
|
$
772
|
Per Share
Data:
|
|
|
|
|
|
Basic earnings per
share
|
$
1.02
|
$
0.03
|
$
0.05
|
$
0.06
|
$
0.08
|
Diluted earnings per
share
|
$
1.02
|
$
0.03
|
$
0.05
|
$
0.06
|
$
0.08
|
Average basic shares
outstanding
|
11,759,209
|
10,088,879
|
10,088,879
|
10,088,879
|
10,088,549
|
Average diluted shares
outstanding
|
11,814,656
|
10,128,251
|
10,133,663
|
10,116,060
|
10,113,295
|
|
|
|
|
|
|
Performance
Ratios:
|
|
|
|
|
|
Return on average
assets
|
1.61%
|
0.12%
|
0.14%
|
0.16%
|
0.18%
|
Return on average
equity
|
14.01%
|
1.07%
|
1.28%
|
1.47%
|
1.65%
|
Net interest
margin
|
3.18%
|
3.07%
|
3.10%
|
3.20%
|
3.16%
|
Efficiency
ratio*
|
79.97%
|
85.25%
|
89.43%
|
80.17%
|
80.27%
|
|
|
|
|
|
|
*The efficiency ratio is general and administrative
expenses as a percentage of net interest income plus non-interest
income
|
|
|
|
|
|
|
|
As
of
|
|
June
30,
|
March
31,
|
December
31,
|
September
30,
|
June
30,
|
|
2016
|
2016
|
2015
|
2015
|
2015
|
|
|
|
|
|
|
Balance Sheet
Data:
|
|
|
|
|
|
Total
assets
|
$
794,142
|
$
765,434
|
$
762,079
|
$
773,977
|
$
781,923
|
Total loans
receivable
|
617,900
|
601,288
|
598,414
|
597,061
|
611,823
|
Allowance for loan
losses
|
(8,804)
|
(8,633)
|
(8,758)
|
(8,689)
|
(8,944)
|
Net loans
|
609,096
|
592,655
|
589,656
|
588,372
|
602,879
|
Deposits
|
539,677
|
524,733
|
523,771
|
536,646
|
544,112
|
Borrowings
|
125,000
|
115,000
|
115,000
|
115,000
|
115,000
|
Stockholders'
equity
|
99,521
|
86,885
|
86,456
|
85,876
|
85,145
|
Bank's Tier 1 core
capital to total assets
|
14.3%
|
15.0%
|
14.9%
|
14.5%
|
14.1%
|
Book value per
share
|
$
6.86
|
$
5.97
|
$
5.93
|
$
5.87
|
$
5.80
|
|
|
|
|
|
|
Asset Quality
Data:
|
|
|
|
|
|
Non-accrual
loans
|
$
9,206
|
$
8,274
|
$
8,974
|
$
8,778
|
$
10,107
|
Foreclosed real
estate
|
1,112
|
1,737
|
1,744
|
1,919
|
2,092
|
Total non-performing
assets
|
10,318
|
10,011
|
10,718
|
10,697
|
12,199
|
Total non-accrual
loans to net loans
|
1.5%
|
1.4%
|
1.5%
|
1.5%
|
1.7%
|
Total non-accrual
loans to total assets
|
1.2%
|
1.1%
|
1.2%
|
1.1%
|
1.3%
|
Allowance for loan
losses
|
8,804
|
8,633
|
8,758
|
8,689
|
8,944
|
Allowance for loan
losses to total loans
|
1.4%
|
1.4%
|
1.5%
|
1.5%
|
1.5%
|
Allowance for loan
losses to total
|
|
|
|
|
|
non-accrual
loans
|
95.6%
|
104.3%
|
97.6%
|
99.0%
|
88.5%
|
Total non-performing
assets to total assets
|
1.3%
|
1.3%
|
1.4%
|
1.4%
|
1.6%
|
Non-accrual troubled
debt restructurings (included above)
|
1,143
|
1,327
|
1,329
|
1,835
|
2,128
|
Performing troubled
debt restructurings
|
23,315
|
23,934
|
24,386
|
24,449
|
25,591
|
Loan to deposit
ratio
|
114.5%
|
114.6%
|
114.3%
|
111.3%
|
112.4%
|
Video -
http://www.youtube.com/watch?v=OrnyAEdZCsY&feature=youtu.be
Logo - http://photos.prnewswire.com/prnh/20150724/241973LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/severn-bancorp-inc-announces-second-quarter-net-income-and-reversal-of-net-deferred-tax-asset-valuation-allowance-300305145.html
SOURCE Severn Bancorp Inc.