ANNAPOLIS, Md., Oct. 29, 2018 /PRNewswire/ -- Severn
Bancorp, Inc., (Nasdaq: SVBI) parent company of Severn Bank, today
announced net income of $2.2 million
for the three months ending September 30,
2018 versus $1.3 million for
the same quarter in 2017. This is an increase of 72% year over year
for the period. On a diluted per share basis, earnings were
$0.17 versus $0.10 for the quarters ended September 30, 2018 and 2017, respectively. Net
income for the nine months ended September
30, 2018 was $6.0 million, an
89% increase over net income of $3.2
million for the same nine month period in 2017.
"We are pleased to report continued growth in earnings," stated
Alan J. Hyatt, President and Chief
Executive Officer. Mr. Hyatt continued, "We have seen growth
in our net interest income as well as our fee based income streams.
We paid dividends the past three quarters and hope to continue that
trend. We remain focused on continuous improvement in our
operations, exploring new products and markets, and enhancing long
term shareholder value."
Net interest income increased 16% during the third quarter of
2018. Net interest income was $7.3
million during the third quarter of 2018 versus $6.3 million during the third quarter of 2017.
Net interest margin improved to 3.65% for the three months ending
September 30, 2018 from 3.38% for the
same period in 2017. Net interest income increased to $21.3 million for the first nine months of 2018
from $17.9 million for the same time
frame in 2017.
Non-interest income increased 68% during the quarter ended
September 30, 2018. Non-interest
income was $2.3 million for the three
months ended September 30, 2018, up
from $1.4 million as of September 30, 2017. For the nine months ended
September 30, 2018, non-interest
income was $6.4 million. This
represents a 70% increase over the $3.8
million reported for the third quarter of 2017. Severn Bank
experienced a significant increase in mortgage banking revenue of
122% in the third quarter of 2018 versus the third quarter of 2017.
Year to date mortgage banking revenue saw an increase of 71% for
the first nine months of 2018 versus 2017. The company also saw
significant increases in fees on deposit accounts, which is
included in other non-interest income.
Non-interest expenses were $7.0
million for the three months ended September 30, 2018 versus $5.5 million for the same period in 2017. For the
nine months ended September 30, 2018,
non-interest expenses were $19.7
million, which is an increase of 16% 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.
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 $889 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,
2017.
Severn Bancorp,
Inc.
|
Consolidated
Income Statement
|
(dollars in
thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Quarterly income
statement results:
|
Three Months Ended
September 30,
|
|
|
|
|
|
|
|
2018
|
2017
|
$
Change
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
Interest
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
loans
|
$
8,844
|
$
7,742
|
$
1,102
|
14.23%
|
|
|
Interest on
securities
|
293
|
330
|
(37)
|
-11.21%
|
|
|
Other interest
income
|
423
|
167
|
256
|
153.29%
|
|
|
|
|
|
|
|
|
|
|
|
Total interest
income
|
9,560
|
8,239
|
1,321
|
16.03%
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
1,531
|
1,011
|
520
|
51.43%
|
|
|
Interest on long term
borrowings
|
684
|
897
|
(213)
|
-23.75%
|
|
|
|
|
|
|
|
|
|
|
|
Total interest
expense
|
2,215
|
1,908
|
307
|
16.09%
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
7,345
|
6,331
|
1,014
|
16.02%
|
|
|
|
|
|
|
|
|
|
|
|
Provision for
(reversal of) loan losses
|
(300)
|
0
|
(300)
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
after provision for (reversal of) loan losses
|
7,645
|
6,331
|
1,314
|
20.76%
|
|
|
|
|
|
|
|
|
|
|
Non-interest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-banking
revenue
|
740
|
334
|
406
|
121.56%
|
|
|
Real Estate
Commissions
|
408
|
311
|
97
|
31.19%
|
|
|
Real Estate
Management Income
|
157
|
197
|
(40)
|
-20.30%
|
|
|
Other non-interest
income
|
1,039
|
557
|
482
|
86.54%
|
|
|
|
|
|
|
|
|
|
|
|
Net non-interest
income
|
2,344
|
1,399
|
945
|
67.55%
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
plus non-interest income after
|
9,989
|
7,730
|
2,259
|
29.22%
|
|
|
|
provision for
(reversal of) loan losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
related expenses
|
4,661
|
3,288
|
1,373
|
41.76%
|
|
|
Net Occupancy &
Depreciation
|
416
|
354
|
62
|
17.51%
|
|
|
Net Costs of
Foreclosed Real Estate
|
7
|
126
|
(119)
|
-94.44%
|
|
|
Other non-interest
expense
|
1,956
|
1,753
|
203
|
11.58%
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
expenses
|
7,040
|
5,521
|
1,519
|
27.51%
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
tax provision
|
2,949
|
2,209
|
740
|
33.50%
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
784
|
950
|
(166)
|
-17.47%
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
2,165
|
$
1,259
|
$
906
|
71.96%
|
|
|
Net income available
to common shareholders
|
$
2,165
|
$
1,189
|
$
976
|
82.09%
|
|
|
|
|
|
|
|
|
|
|
Severn Bancorp,
Inc.
|
Consolidated
Income Statement
|
(dollars in
thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Year-to-Date
income statement results:
|
Nine Months Ended
September 30,
|
|
|
|
|
|
|
|
2018
|
2017
|
$
Change
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
Interest
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
loans
|
$
25,731
|
$
22,267
|
$
3,464
|
15.56%
|
|
|
Interest on
securities
|
920
|
927
|
(7)
|
-0.76%
|
|
|
Other interest
income
|
787
|
498
|
289
|
58.03%
|
|
|
|
|
|
|
|
|
|
|
|
Total interest
income
|
27,438
|
23,692
|
3,746
|
15.81%
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
3,938
|
2,924
|
1,014
|
34.66%
|
|
|
Interest on long term
borrowings
|
2,244
|
2,844
|
(600)
|
-21.10%
|
|
|
|
|
|
|
|
|
|
|
|
Total interest
expense
|
6,182
|
5,768
|
414
|
7.17%
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
21,256
|
17,924
|
3,332
|
18.59%
|
|
|
|
|
|
|
|
|
|
|
|
Provision for
(reversal of) loan losses
|
(300)
|
(650)
|
350
|
-53.85%
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
after provision for (reversal of) loan losses
|
21,556
|
18,574
|
2,982
|
16.06%
|
|
|
|
|
|
|
|
|
|
|
Non-interest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-banking
revenue
|
1,970
|
1,150
|
820
|
71.30%
|
|
|
Real Estate
Commissions
|
1,153
|
959
|
194
|
20.23%
|
|
|
Real Estate
Management Income
|
527
|
513
|
14
|
2.73%
|
|
|
Other non-interest
income
|
2,755
|
1,140
|
1,615
|
141.67%
|
|
|
|
|
|
|
|
|
|
|
|
Net non-interest
income
|
6,405
|
3,762
|
2,643
|
70.26%
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
plus non-interest income after
|
27,961
|
22,336
|
5,625
|
25.19%
|
|
|
|
provision for
(reversal of) loan losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
related expenses
|
13,359
|
10,719
|
2,640
|
24.63%
|
|
|
Net Occupancy &
Depreciation
|
1,151
|
1,015
|
136
|
13.40%
|
|
|
Net Costs of
Foreclosed Real Estate
|
21
|
166
|
(145)
|
-87.35%
|
|
|
Other non-interest
expense
|
5,209
|
5,120
|
89
|
1.74%
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
expenses
|
19,740
|
17,020
|
2,720
|
15.98%
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
tax provision
|
8,221
|
5,316
|
2,905
|
54.66%
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
2,252
|
2,150
|
102
|
4.75%
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
5,969
|
$
3,166
|
$
2,803
|
88.55%
|
|
|
Net income available
to common shareholders
|
$
5,899
|
$
2,956
|
$
2,943
|
99.56%
|
|
|
|
|
|
|
|
|
|
|
Severn Bancorp,
Inc.
|
Consolidated
Balance Sheet
|
(dollars in
thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2018
|
December 31,
2017
|
$
Change
|
%
Change
|
Balance Sheet
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Cash
|
|
$
2,160
|
$
2,382
|
$
(222)
|
-9.30%
|
|
Federal funds and
Interest bearing deposits in other banks
|
89,156
|
19,471
|
69,685
|
357.89%
|
|
Certificates of
deposit held as investment
|
8,780
|
8,780
|
0
|
0.00%
|
|
Investment securities
available for sale, at fair value
|
11,950
|
10,119
|
1,831
|
18.09%
|
|
Investment securities
held to maturity
|
43,108
|
54,303
|
(11,195)
|
-20.62%
|
|
Loans held for sale,
at fair value
|
9,023
|
4,530
|
4,493
|
99.17%
|
|
Loans
receivable
|
689,712
|
668,151
|
21,561
|
3.23%
|
|
Allowance for loan
losses
|
(8,056)
|
(8,055)
|
(1)
|
0.01%
|
|
Accrued interest
receivable
|
2,689
|
2,640
|
49
|
1.87%
|
|
Foreclosed real
estate, net
|
285
|
403
|
(118)
|
-29.20%
|
|
Premises and
equipment, net
|
22,931
|
23,139
|
(208)
|
-0.90%
|
|
Restricted stock
investments
|
3,866
|
4,489
|
(623)
|
-13.87%
|
|
Bank owned life
insurance
|
5,186
|
5,064
|
122
|
2.42%
|
|
Deferred income
taxes, net
|
3,248
|
5,302
|
(2,054)
|
-38.74%
|
|
Prepaid expenses and
other assets
|
5,287
|
4,069
|
1,218
|
29.93%
|
|
|
|
|
|
|
|
|
|
|
|
|
$
889,325
|
$
804,787
|
$
84,538
|
10.50%
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS EQUITY
|
|
|
|
|
|
Deposits
|
$
694,177
|
$
602,228
|
$
91,949
|
15.27%
|
|
Borrowings
|
73,500
|
88,500
|
(15,000)
|
-16.95%
|
|
Subordinated
debentures
|
20,619
|
20,619
|
-
|
0.00%
|
|
Accounts payable and
accrued expenses
|
5,149
|
2,340
|
2,809
|
120.04%
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
793,445
|
713,687
|
79,758
|
11.18%
|
|
|
|
|
|
|
|
|
|
Preferred
stock
|
-
|
4
|
(4)
|
-100.00%
|
|
Common
stock
|
127
|
122
|
5
|
4.10%
|
|
Additional paid-in
capital
|
65,216
|
65,137
|
79
|
0.12%
|
|
Retained
earnings
|
30,643
|
25,872
|
4,770
|
18.44%
|
|
Accumulated
comprehensive income (loss)
|
(106)
|
(35)
|
(71)
|
202.86%
|
|
|
|
|
|
|
|
|
|
Total
Stockholders' Equity
|
95,880
|
91,100
|
4,780
|
5.25%
|
|
|
|
|
|
|
|
|
|
|
|
|
$
889,325
|
$
804,787
|
$
84,538
|
10.50%
|
Severn Bancorp,
Inc.
|
Selected Financial
Data
|
(dollars in
thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
Three Months Ended
September 30,
|
|
|
|
|
2018
|
2017
|
|
2018
|
2017
|
Per Share
Data:
|
|
|
|
|
.
|
|
Basic earnings per
share
|
$
0.47
|
$
0.24
|
|
$
0.17
|
$
0.10
|
|
Diluted earnings per
share
|
$
0.47
|
$
0.24
|
|
$
0.17
|
$
0.10
|
|
Average basic shares
outstanding
|
12,541,032
|
12,140,689
|
|
12,695,136
|
12,172,586
|
|
Average diluted
shares outstanding
|
12,651,260
|
12,248,214
|
|
12,832,633
|
12,323,572
|
|
|
|
|
|
|
|
|
|
Performance
Ratios:
|
|
|
|
|
|
|
Return on average
assets
|
0.98%
|
0.53%
|
|
1.03%
|
0.63%
|
|
Return on average
equity
|
9.03%
|
4.80%
|
|
8.98%
|
5.69%
|
|
Net interest
margin
|
3.63%
|
3.25%
|
|
3.65%
|
3.38%
|
|
Efficiency
ratio*
|
71.29%
|
77.89%
|
|
72.59%
|
69.78%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2018
|
December 31,
2017
|
|
|
|
Asset Quality
Data:
|
|
|
|
|
|
|
Non-accrual
loans
|
$
5,731
|
$
5,710
|
|
|
|
|
Foreclosed real
estate
|
285
|
403
|
|
|
|
|
|
Total non-performing
assets
|
6,016
|
6,113
|
|
|
|
|
Total non-accrual
loans to total loans
|
0.8%
|
0.9%
|
|
|
|
|
Total non-accrual
loans to total assets
|
0.6%
|
0.7%
|
|
|
|
|
Allowance for loan
losses
|
8,056
|
8,055
|
|
|
|
|
Allowance for loan
losses to total loans
|
1.2%
|
1.2%
|
|
|
|
|
Allowance for loan
losses to total
|
|
|
|
|
|
|
|
non-accrual
loans
|
140.6%
|
141.1%
|
|
|
|
|
Total non-performing
assets to total assets
|
0.7%
|
0.8%
|
|
|
|
|
Non-accrual troubled
debt restructurings (included above)
|
997
|
820
|
|
|
|
|
Performing troubled
debt restructurings
|
11,271
|
13,714
|
|
|
|
|
Loan to deposit
ratio
|
99.4%
|
110.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
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.