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Form 8-K SEVERN BANCORP INC For: Jan 28

January 29, 2015 8:10 AM EST

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.� 20549

FORM 8-K
CURRENT REPORT

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event report)
January 28, 2015

Severn Bancorp, Inc.
(Exact name of registrant as specified in its charter)

Maryland
0-49731
52-1726127
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification Number)

200 Westgate Circle, Suite 200, Annapolis, Maryland
21401
(Address of principal executive offices)
(Zip Code)

410-260-2000
(Registrants telephone number, including area code)

(Former name or former address, if change since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On January 28, 2015 Severn Bancorp, Inc. issued a press release announcing financial results for the quarter ended December 31, 2014.� A copy of this press release is being furnished as Exhibit 99.1 to this report.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits:
99.1 Press Release of Severn Bancorp, Inc., dated January 28, 2015 announcing financial results for the quarter ended December 31, 2014.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Severn Bancorp, Inc.
Dated: January 28, 2015
By:
/Alan J. Hyatt/
Alan J. Hyatt, President




Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact:
Thomas G. Bevivino
Chief Financial Officer &
Executive Vice President
Phone: 410.260.2000

Severn Bancorp, Inc. Reports Increased Earnings for Fourth Quarter 2014

Annapolis, MD (January 28, 2015) Severn Bancorp, Inc., (Nasdaq: SVBI) (Company) parent company of Severn Savings Bank, FSB (Severn), reported net income of $1,550,000 or $.10 per share for the fourth quarter of 2014, a 45% increase compared to net income of $1,068,000 or $.05 per share for the third quarter of 2014. Earnings for the fourth quarter of 2014 are also significantly higher than the reported fourth quarter 2013 net loss of $5,472,000 or ($0.58) per share. Fourth quarter earnings in 2013 were impacted by the loss on the sale of certain non-performing loans during the year. For the year ended December 31, 2014 the Company reported net income of $2,909,000 or $.06 per share versus a loss of $25,165,000 or ($2.64) per share for the year ended December 31, 2013. Earnings per share is calculated using net income available for common shareholders, which is net income less preferred stock dividends and discount amortization.
Severn Bancorp, Inc. saw results trending in the right direction for the fourth quarter, with a slight increase in net interest margin and a continued decrease in non-performing assets. The Company also saw a sizeable decrease in its quarterly efficiency ratio from 80.40% to 72.96%. Severn experienced an increase in its loan portfolio due to vigorous lending activity. Results also included a quarterly improvement in Return on Average Assets (ROAA) and Return on Average Equity (ROAE). Alan J. Hyatt, President and Chief Executive Officer commented, We continue to make progress in key areas. Initiatives we have been working on for many months are producing results.
Mr. Hyatt added, We are gaining traction with the local small to mid-size business community who wants to work with a local bank. We offer a combination of knowledgeable staff, a wide array of products and unrivaled personal service. Banking may not always be at the top of everyones list, but we do our part to make the experience pleasurable for our customers. People appreciate someone going that extra mile for them. 

About Severn Savings 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 $780 million and four branches located in Annapolis, Edgewater 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 managements 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. Severns 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 Severns general market area, federal and state regulation, competition and other factors detailed from time to time in Severns filings with the Securities and Exchange Commission (the SEC), including Item 1A. Risk Factors contained in Severns Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

Severn Bancorp, Inc.
Selected Financial Data
(dollars in thousands, except per share data)
(Unaudited)

For the Three Months Ended
December 31,
2014
September 30,
2014
June 30,
2014
March 31,
2014
December 31,
2013
Summary Operating Results:
Interest income
$
8,086
$
8,000
$
7,808
$
7,922
$
7,983
Interest expense
2,236
2,153
2,130
2,115
2,204
Net interest income
5,850
5,847
5,678
5,807
5,779
Provision for loan losses
400
250
(19
)
200
3,700
Net interest income (loss) after provision for loan losses
5,450
5,597
5,697
5,607
2,079
Non-interest income
1,495
1,245
962
976
1,011
Non-interest expense
5,394
5,754
7,235
5,706
8,562
Income (loss) before income tax provision
1,551
1,088
(576
)
877
(5,472
)
Income tax provision
1
20
-
10
-
Net income (loss)
$
1,550
$
1,068
$
(576
)
$
867
$
(5,472
)
Per Share Data:
Basic earnings (loss) per share
$
0.10
$
0.05
$
(0.12
)
$
0.03
$
(0.58
)
Diluted earnings (loss) per share
$
0.09
$
0.05
$
(0.12
)
$
0.03
$
(0.58
)
Common stock dividends per share
$
-
$
-
$
-
$
-
$
-
Average basic shares outstanding
10,067,379
10,067,379
10,067,379
10,066,679
10,066,679
Average diluted shares outstanding
10,905,866
10,101,445
10,067,379
10,103,153
10,066,679
Performance Ratios:
Return on average assets
0.20
%
0.14
%
-0.07
%
0.11
%
-0.66
%
Return on average equity
1.88
%
1.30
%
-0.71
%
1.06
%
-6.31
%
Net interest margin
3.32
%
3.29
%
3.19
%
3.23
%
3.15
%
Efficiency ratio*
72.96
%
80.40
%
109.32
%
84.90
%
88.16
%

*
The efficiency ratio is general and administrative expenses as a percentage of net interest income plus non-interest income

As of
December 31,
2014
September 30,
2014
June 30,
2014
March 31,
2014
December 31,
2013
Balance Sheet Data:
Total assets
$
776,681
$
769,313
$
788,653
$
793,433
$
799,603
Total loans receivable
643,317
629,342
616,956
614,986
614,552
Allowance for loan losses
(9,435
)
(9,282
)
(10,828
)
(11,225
)
(11,739
)
Net loans
633,882
620,060
606,128
603,761
602,813
Deposits
543,814
537,743
555,780
562,964
571,249
Borrowings
115,000
115,000
115,000
115,000
115,000
Stockholders' equity
83,810
82,739
82,150
83,202
82,769
Bank's Tier 1 core capital to total assets
13.8
%
13.7
%
13.2
%
13.2
%
12.9
%
Book value per share
$
5.68
$
5.57
$
5.51
$
5.62
$
5.57
Asset Quality Data:
Non-accrual loans
$
12,845
$
10,798
$
13,401
$
12,567
$
11,035
Foreclosed real estate
1,947
5,024
5,689
5,561
8,972
Total non-performing assets
14,792
15,822
19,090
18,128
20,007
Total non-accrual loans to net loans
2.0
%
1.7
%
2.2
%
2.1
%
1.8
%
Total non-accrual loans to total assets
1.7
%
1.4
%
1.7
%
1.6
%
1.4
%
Allowance for loan losses
9,435
9,282
10,828
11,225
11,739
Allowance for loan losses to total loans
1.5
%
1.5
%
1.8
%
1.8
%
1.9
%
Allowance for loan losses to total non-accrual loans
73.5
%
86.0
%
80.8
%
89.3
%
106.4
%
Total non-performing assets to total assets
1.9
%
2.1
%
2.4
%
2.3
%
2.5
%
Non-accrual troubled debt restructurings (included above)
2,641
1,853
1,868
2,018
1,679
Performing troubled debt restructurings
27,724
28,828
30,146
34,021
35,239



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