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Severn Bancorp, Inc. Announces Year End Earnings

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ANNAPOLIS, Md., Jan. 29, 2019 /PRNewswire/ -- 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.

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.

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 December 31, 2018







2018

2017

$ Change

% Change









Interest Income














Interest on loans

$                        9,146

$                    8,026

$             1,120

13.95%


Interest on securities 

276

305

(29)

-9.51%


Other interest income

800

199

601

302.01%










Total interest income

10,222

8,530

1,692

19.84%









Interest Expense














Interest on deposits

1,750

1,113

637

57.23%


Interest on long term borrowings

671

749

(78)

-10.41%










Total interest expense

2,421

1,862

559

30.02%





.

.

.



Net interest income

7,801

6,668

1,133

16.99%










Provision for (reversal of) loan losses

0

0

-

0.00%










Net interest income after provision for (reversal of) loan losses

7,801

6,668

1,133

16.99%









Noninterest Income














Mortgage-banking revenue

591

357

234

65.55%


Real Estate Commissions

554

400

154

38.50%


Real Estate Management Income

147

162

(15)

-9.26%


Other noninterest income

1,083

558

525

94.09%










Net noninterest income

2,375

1,477

898

60.80%










Net interest income plus noninterest income after provision for (reversal of) loan losses

10,176

8,145

2,031

24.94%









Noninterest expenses














Compensation and related expenses

4,460

4,016

444

11.06%


Net Occupancy & Depreciation

404

344

60

17.44%


Net Costs of Foreclosed Real Estate

62

(33)

95

287.88%


Other


1,925

1,295

630

48.65%










Total noninterest expenses

6,851

5,622

1,229

21.86%










Income before income tax provision 

3,325

2,523

802

31.79%










Income tax provision 

724

2,872

(2,148)

-74.79%










Net income

$                        2,601

$                     (349)

$             2,950

845.27%


Net income available to common shareholders

$                        2,601

$                     (419)

$             3,020

720.76%









 

 

Severn Bancorp, Inc.

Consolidated Income Statement

(dollars in thousands, except per share data)

(Unaudited)









Year-to-Date income statement results:

Year Ended December 31, 2018







2018

2017

$ Change

% Change









Interest Income














Interest on loans

$                      34,877

$                  30,294

$            4,583

15.13%


Interest on securities 

1,196

1,233

(37)

-3.00%


Other interest income

1,587

697

890

127.69%










Total interest income

37,660

32,224

5,436

16.87%









Interest Expense














Interest on deposits

5,688

4,037

1,651

40.90%


Interest on long term borrowings

2,915

3,593

(678)

-18.87%










Total interest expense

8,603

7,630

973

12.75%





.

.

.



Net interest income

29,057

24,594

4,463

18.15%










Provision for (reversal of) loan losses

(300)

(650)

350

-53.85%










Net interest income after provision for (reversal of) loan losses

29,357

25,244

4,113

16.29%









Noninterest Income














Mortgage-banking revenue

2,561

1,507

1,054

69.94%


Real Estate Commissions

1,707

1,358

349

25.70%


Real Estate Management Income

674

675

(1)

-0.15%


Other noninterest income

3,838

1,698

2,140

126.03%










Net noninterest income

8,780

5,238

3,542

67.62%










Net interest income plus noninterest income after provision for (reversal of) loan losses

38,137

30,482

7,655

25.11%









Noninterest expenses














Compensation and related expenses

17,819

14,734

3,085

20.94%


Net Occupancy & Depreciation

1,555

1,358

197

14.51%


Net Costs of Foreclosed Real Estate

83

132

(49)

-37.12%


Other


7,134

6,418

716

11.16%










Total noninterest expenses

26,591

22,642

3,949

17.44%










Income before income tax provision 

11,546

7,840

3,706

47.27%










Income tax provision 

2,977

5,022

(2,045)

-40.72%










Net income

$                        8,569

$                    2,818

$            5,751

204.08%


Net income available to common shareholders

$                        8,499

$                    2,538

$            5,961

234.87%









 

 

Severn Bancorp, Inc.

Consolidated Balance Sheet

(dollars in thousands, except per share data)

(Unaudited)





















December 31, 2018

December 31, 2017

$ Change

% Change

Balance Sheet Data:













ASSETS







Cash


$                         2,880

$                     2,382

$                 498

20.91%


Federal funds and interest bearing deposits in other banks

185,460

19,471

165,989

852.49%


Certificates of deposit held as investment

8,780

8,780

0

0.00%


Investment securities available for sale, at fair value

11,978

10,119

1,859

18.37%


Investment securities held to maturity

38,912

54,303

(15,391)

-28.34%


Loans held for sale, at fair value

10,561

4,530

6,031

133.13%


Loans receivable

681,474

668,151

13,323

1.99%


Allowance for loan losses

(8,044)

(8,055)

11

-0.14%


Accrued interest receivable 

2,848

2,640

208

7.88%


Foreclosed real estate, net

1,537

403

1,134

281.39%


Premises and equipment, net

22,745

23,139

(394)

-1.70%


Restricted stock investments

3,766

4,489

(723)

-16.11%


Bank owned life insurance

5,225

5,064

161

3.18%


Deferred income taxes, net

2,363

5,302

(2,939)

-55.43%


Prepaid expenses and other assets

3,748

4,069

(321)

-7.89%













$                     974,233

$                  804,787

$           169,446

21.05%









LIABILITIES AND STOCKHOLDERS' EQUITY






Deposits

$                     779,506

$                  602,228

$           177,278

29.44%


Borrowings

73,500

88,500

(15,000)

-16.95%


Subordinated debentures

20,619

20,619

-

0.00%


Accounts payable and accrued expenses

2,155

2,340

(185)

-7.91%










 Total Liabilities

875,780

713,687

162,093

22.71%










Preferred stock

-

4

(4)

-100.00%


Common stock

128

122

6

4.92%


Additional paid-in capital

65,538

65,137

401

0.62%


Retained earnings

32,860

25,872

6,988

27.01%


Accumulated comprehensive income (loss)

(73)

(35)

(38)

108.57%










 Total Stockholders' Equity

98,453

91,100

7,353

8.07%













$                     974,233

$                  804,787

$           169,446

21.05%









 

 

Severn Bancorp, Inc.

Selected Financial Data

(dollars in thousands, except per share data)

(Unaudited)














Year Ended December 31, 2018


Three Months Ended December 31, 2018





2018

2017


2018

2017

Per Share Data:





.


Basic earnings per share

$                          0.68

$                       0.21


$                          0.21

$                     (0.03)


Diluted earnings per share

$                          0.67

$                       0.21


$                          0.20

$                     (0.03)


Average basic shares outstanding

12,585,961

12,160,983


12,719,772

12,425,245


Average diluted shares outstanding

12,697,620

12,277,736


12,835,186

12,425,245










Performance Ratios:







Return on average assets

1.03%

0.36%


1.20%

-0.17%


Return on average equity

9.48%

3.21%


10.70%

-1.59%


Net interest margin

3.66%

3.32%


3.75%

3.53%


Efficiency ratio*

70.06%

75.45%


66.72%

69.42%























December 31, 2018

December 31, 2017




Asset Quality Data:







Non-accrual loans

$                         4,657

$                     5,710





Foreclosed real estate

1,537

403





          Total non-performing assets

6,194

6,113





Total non-accrual loans to total loans

0.7%

0.9%





Total non-accrual loans to total assets

0.5%

0.7%





Allowance for loan losses

8,044

8,055





Allowance for loan losses to total loans

1.2%

1.2%





Allowance for loan losses to total







          non-accrual loans

172.7%

141.1%





Total non-performing assets to total assets

0.6%

0.8%





Non-accrual troubled debt restructurings (included above)

446

820





Performing troubled debt restructurings

10,698

13,714





Loan to deposit ratio

87.4%

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.

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