ANNAPOLIS, Md., July 26, 2019 /PRNewswire/ -- 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 deceased $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.
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.
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.
|
|
Consolidated
Balance Sheet
|
|
(dollars in
thousands, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2019
|
December 31,
2018
|
$
Change
|
%
Change
|
|
Balance Sheet
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Cash
|
|
$
3,644
|
$
2,880
|
$
764
|
27%
|
|
Federal funds and
interest bearing deposits in other banks
|
73,693
|
185,460
|
(111,767)
|
-60%
|
|
Certificates of
deposit held as investment
|
7,540
|
8,780
|
(1,240)
|
-14%
|
|
Investment securities
available for sale, at fair value
|
11,031
|
11,978
|
(947)
|
-8%
|
|
Investment securities
held to maturity
|
33,562
|
38,912
|
(5,350)
|
-14%
|
|
Loans held for sale,
at fair value
|
17,987
|
9,686
|
8,301
|
86%
|
|
Loans
receivable
|
679,573
|
682,349
|
(2,776)
|
0%
|
|
Allowance for loan
losses
|
(8,093)
|
(8,044)
|
(49)
|
1%
|
|
Accrued interest
receivable
|
2,605
|
2,848
|
(243)
|
-9%
|
|
Foreclosed real
estate, net
|
1,430
|
1,537
|
(107)
|
-7%
|
|
Premises and
equipment, net
|
22,452
|
22,745
|
(293)
|
-1%
|
|
Restricted stock
investments
|
2,857
|
3,766
|
(909)
|
-24%
|
|
Bank owned life
insurance
|
5,303
|
5,225
|
78
|
1%
|
|
Deferred income
taxes, net
|
2,167
|
2,363
|
(196)
|
-8%
|
|
Prepaid expenses and
other assets
|
6,361
|
3,748
|
2,613
|
70%
|
|
|
|
|
|
|
|
|
|
|
|
|
$
862,112
|
$
974,233
|
$
(112,121)
|
-12%
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS EQUITY
|
|
|
|
|
|
Deposits
|
$
685,416
|
$
779,506
|
$
(94,090)
|
-12%
|
|
Borrowings
|
48,500
|
73,500
|
(25,000)
|
-34%
|
|
Subordinated
debentures
|
20,619
|
20,619
|
-
|
0%
|
|
Accounts payable and
accrued expenses
|
4,886
|
2,155
|
2,731
|
127%
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
$759,421
|
$875,780
|
(116,359)
|
-13%
|
|
|
|
|
|
|
|
|
|
Preferred
stock
|
-
|
-
|
-
|
-
|
|
Common
stock
|
128
|
128
|
-
|
0%
|
|
Additional paid-in
capital
|
65,696
|
65,538
|
158
|
0%
|
|
Retained
earnings
|
36,878
|
32,860
|
4,018
|
12%
|
|
Accumulated
comprehensive income (loss)
|
(11)
|
(73)
|
62
|
-85%
|
|
|
|
|
|
|
|
|
|
Total
Stockholders' Equity
|
102,691
|
98,453
|
4,238
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
$
862,112
|
$
974,233
|
$
(112,121)
|
-12%
|
|
|
|
|
|
|
|
|
|
Severn Bancorp,
Inc.
|
|
Consolidated
Income Statement
|
|
(dollars in
thousands, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Quarterly income
statement results:
|
Three Months Ended
June 30,
|
|
|
|
|
|
|
2019
|
2018
|
$
Change
|
%
Change
|
|
|
|
|
|
|
|
|
|
Interest
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
loans
|
$
9,226
|
$
8,516
|
$
710
|
8%
|
|
Interest on
securities
|
241
|
307
|
(66)
|
-21%
|
|
Other interest
income
|
757
|
178
|
579
|
325%
|
|
|
|
|
|
|
|
|
|
Total interest
income
|
10,224
|
9,001
|
1,223
|
14%
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
1,898
|
1,274
|
624
|
49%
|
|
Interest on long term
borrowings
|
481
|
800
|
(319)
|
-40%
|
|
|
|
|
|
|
|
|
|
Total interest
expense
|
2,379
|
2,074
|
305
|
15%
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
7,845
|
6,927
|
918
|
13%
|
|
|
|
|
|
|
|
|
|
Provision for
(reversal of) loan losses
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
Net interest income
after provision for (reversal of) loan losses
|
7,845
|
6,927
|
918
|
13%
|
|
|
|
|
|
|
|
|
|
Noninterest
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-banking
revenue
|
1,087
|
635
|
452
|
71%
|
|
Real Estate
Commissions
|
378
|
360
|
18
|
5%
|
|
Real Estate
Management Fees
|
162
|
187
|
(25)
|
-13%
|
|
Other noninterest
income
|
988
|
886
|
102
|
12%
|
|
|
|
|
|
|
|
|
|
Total noninterest
income
|
2,615
|
2,068
|
547
|
26%
|
|
|
|
|
|
|
|
|
|
Net interest income
plus noninterest income after provision for (reversal of) loan
losses
|
10,460
|
8,995
|
1,465
|
16%
|
|
|
|
|
|
|
|
|
|
Noninterest
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
related expenses
|
4,909
|
4,420
|
489
|
11%
|
|
Net Occupancy &
Depreciation
|
389
|
391
|
(2)
|
-1%
|
|
Net Costs of
Foreclosed Real Estate
|
24
|
(18)
|
42
|
-233%
|
|
Other
|
|
2,191
|
1,560
|
631
|
40%
|
|
|
|
|
|
|
|
|
|
Total noninterest
expense
|
7,513
|
6,353
|
1,160
|
18%
|
|
|
|
|
|
|
|
|
|
Income before income
tax provision
|
2,947
|
2,642
|
305
|
12%
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
771
|
724
|
47
|
6%
|
|
|
|
|
|
|
|
|
|
Net income
|
$
2,176
|
$
1,918
|
$
258
|
13%
|
|
Net income available
to common shareholders
|
$
2,176
|
$
1,918
|
$
258
|
13%
|
|
Severn Bancorp,
Inc.
|
|
Consolidated
Income Statement
|
|
(dollars in
thousands, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Year-to-Date
income statement results:
|
Six Months Ended
June 30,
|
|
|
|
|
|
|
2019
|
2018
|
$
Change
|
%
Change
|
|
|
|
|
|
|
|
|
|
Interest
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
loans
|
$
18,393
|
$
16,887
|
$
1,506
|
9%
|
|
Interest on
securities
|
500
|
627
|
(127)
|
-20%
|
|
Other interest
income
|
1,874
|
364
|
1,510
|
415%
|
|
|
|
|
|
|
|
|
|
Total interest
income
|
20,767
|
17,878
|
2,889
|
16%
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
3,767
|
2,407
|
1,360
|
57%
|
|
Interest on long term
borrowings
|
1,070
|
1,560
|
(490)
|
-31%
|
|
|
|
|
|
|
|
|
|
Total interest
expense
|
4,837
|
3,967
|
870
|
22%
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
15,930
|
13,911
|
2,019
|
15%
|
|
|
|
|
|
|
|
|
|
Provision for
(reversal of) loan losses
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
Net interest income
after provision for (reversal of) loan losses
|
15,930
|
13,911
|
2,019
|
15%
|
|
|
|
|
|
|
|
|
|
Noninterest
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-banking
revenue
|
1,807
|
1,230
|
577
|
47%
|
|
Real Estate
Commissions
|
860
|
745
|
115
|
15%
|
|
Real Estate
Management Fees
|
326
|
370
|
(44)
|
-12%
|
|
Other noninterest
income
|
1,882
|
1,516
|
366
|
24%
|
|
|
|
|
|
|
|
|
|
Total noninterest
income
|
4,875
|
3,861
|
1,014
|
26%
|
|
|
|
|
|
|
|
|
|
Net interest income
plus noninterest income after provision for (reversal of) loan
losses
|
20,805
|
17,772
|
3,033
|
17%
|
|
|
|
|
|
|
|
|
|
Noninterest
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
related expenses
|
9,434
|
8,698
|
736
|
8%
|
|
Net Occupancy &
Depreciation
|
804
|
735
|
69
|
9%
|
|
Net Costs of
Foreclosed Real Estate
|
149
|
14
|
135
|
964%
|
|
Other
|
|
3,876
|
3,053
|
823
|
27%
|
|
|
|
|
|
|
|
|
|
Total noninterest
expense
|
14,263
|
12,500
|
1,763
|
14%
|
|
|
|
|
|
|
|
|
|
Income before income
tax provision
|
6,542
|
5,272
|
1,270
|
24%
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
1,757
|
1,469
|
288
|
20%
|
|
|
|
|
|
|
|
|
|
Net income
|
$
4,785
|
$
3,803
|
$
982
|
26%
|
|
Net income available
to common shareholders
|
$
4,785
|
$
3,733
|
$
1,052
|
28%
|
|
Severn Bancorp,
Inc.
|
|
Selected Financial
Data
|
|
(dollars in
thousands, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2019
|
|
Three Months Ended
June 30, 2019
|
|
|
|
|
2019
|
2018
|
|
2019
|
2018
|
|
Per Share
Data:
|
|
|
|
|
.
|
|
Basic earnings per
share
|
$
0.37
|
$
0.30
|
|
$
0.17
|
$
0.15
|
|
Diluted earnings per
share
|
$
0.37
|
$
0.30
|
|
$
0.17
|
$
0.15
|
|
Average basic shares
outstanding
|
12,774,191
|
12,463,132
|
|
12,775,123
|
12,684,711
|
|
Average diluted
shares outstanding
|
12,859,980
|
12,559,069
|
|
12,862,291
|
12,781,037
|
|
|
|
|
|
|
|
|
|
|
Performance
Ratios:
|
|
|
|
|
|
|
Return on average
assets
|
1.04%
|
0.95%
|
|
0.95%
|
0.95%
|
|
Return on average
equity
|
9.50%
|
9.04%
|
|
8.56%
|
8.12%
|
|
Net interest
margin
|
3.60%
|
3.62%
|
|
3.55%
|
3.57%
|
|
Efficiency
ratio*
|
67.83%
|
70.26%
|
|
71.59%
|
71.23%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2019
|
December 31,
2018
|
|
|
|
|
Asset Quality
Data:
|
|
|
|
|
|
|
Non-accrual
loans
|
$
4,887
|
$
4,656
|
|
|
|
|
Foreclosed real
estate
|
1,430
|
1,537
|
|
|
|
|
|
Total non-performing
assets
|
6,317
|
6,193
|
|
|
|
|
Total non-accrual
loans to total loans
|
0.7%
|
0.7%
|
|
|
|
|
Total non-accrual
loans to total assets
|
0.6%
|
0.5%
|
|
|
|
|
Allowance for loan
losses
|
8,093
|
8,044
|
|
|
|
|
Allowance for loan
losses to total loans
|
1.2%
|
1.2%
|
|
|
|
|
Allowance for loan
losses to total
|
|
|
|
|
|
|
|
non-accrual
loans
|
165.6%
|
172.8%
|
|
|
|
|
Total non-performing
assets to total assets
|
0.7%
|
0.6%
|
|
|
|
|
Non-accrual troubled
debt restructurings (included above)
|
422
|
446
|
|
|
|
|
Performing troubled
debt restructurings
|
10,537
|
10,698
|
|
|
|
|
Loan to deposit
ratio
|
99.1%
|
87.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
This non-GAAP
financial measure is calculated as noninterest expenses less OREO
expenses divided by net interest income plus noninterest
income
|
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SOURCE Severn Bancorp, Inc.