ANNAPOLIS, Md., April 23, 2018 /PRNewswire/ — Severn Bancorp, Inc., (Nasdaq: SVBI) parent company of Severn Savings Bank, FSB, today announced an increase in net income of over 100% for the first quarter of 2018 versus the first quarter of 2017. Net income was $1.9 million versus $925 thousand for the quarters ended March 31, 2018 and 2017, respectively. On a diluted per share basis, earnings were $0.15 versus $0.06 for the quarters ended March 31, 2018 and 2017, respectively.
Severn Bank
Net interest income increased 19% during the first quarter of 2018. Net interest income was $7.0 million during the first quarter of 2018 versus $5.9 million during the first quarter of 2017. The increase is due to higher interest income resulting from loan growth and lower interest expense on borrowings. Interest expense on borrowing has decreased due to maturing FHLB advances being refinanced at lower rates.
Non-interest income increased to $1.9 million in the first quarter of 2018 versus $1.4 million in the first quarter of 2017. The increase was due to higher volume of fees on a growing deposit portfolio and higher sales of mortgages into the secondary market. Non-interest expenses increased modestly to $6.2 million in the first quarter of 2018 versus $5.7 million in the first quarter of 2017. The increase is due to added staffing which was needed to support the growth in our lending and deposit programs.
“We are pleased to report earnings for the quarter that show substantial progress year over year,” stated Alan J. Hyatt, President and Chief Executive Officer. Mr. Hyatt continued, “The Company has seen notable improvement in asset quality, and recently also announced payment of a dividend to shareholders. We continue to execute our strategy of generating core deposits and growing our commercial and mortgage lending units. While our results for the quarter are trending in the right direction, we remain focused on continued improvement in our operations and enhancing long term shareholder value.”
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 $801 million and five branches located in Annapolis, Edgewater, Severna Park 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.
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Severn Bancorp, Inc. |
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Consolidated Income Statement |
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(dollars in thousands, except per share data) |
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(Unaudited) |
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Year-to-Date income statement results: |
Year Ended March 31, |
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2018 |
2017 |
$ Change |
% Change |
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Interest Income |
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Interest on loans |
$ 8,371 |
$ 7,131 |
$ 1,240 |
17.38% |
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Interest on securities |
320 |
269 |
51 |
18.99% |
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Other interest income |
186 |
157 |
29 |
18.45% |
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Total interest income |
8,877 |
7,557 |
1,320 |
17.46% |
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Interest Expense |
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Interest on deposits |
1,133 |
975 |
158 |
16.18% |
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Interest on long term borrowings |
760 |
996 |
(236) |
-23.67% |
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Total interest expense |
1,893 |
1,971 |
(78) |
-3.96% |
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Net interest income |
6,984 |
5,586 |
1,398 |
25.02% |
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Provision for (reversal of) loan losses |
0 |
(275) |
275 |
-100.00% |
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Net interest income after provision for (reversal of) loan losses |
6,984 |
5,861 |
1,123 |
19.15% |
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Non-interest income |
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Mortgage-banking revenue |
595 |
535 |
60 |
11.20% |
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Real Estate Commissions |
385 |
380 |
5 |
1.40% |
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Real Estate Management Income |
183 |
194 |
(11) |
-5.53% |
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All other income |
706 |
249 |
457 |
183.58% |
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Net non-interest income |
1,870 |
1,358 |
512 |
37.68% |
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Net interest income after provision for (reversal of) loan losses plus non-interest income |
8,853 |
7,219 |
1,634 |
22.64% |
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Non-Interest Expenses |
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Compensation and related expenses |
4,278 |
3,757 |
521 |
13.86% |
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Net Occupancy & Depreciation |
344 |
336 |
8 |
2.44% |
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Net Costs of Foreclosed Real Estate |
32 |
33 |
(1) |
-2.81% |
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Other |
1,569 |
1,549 |
20 |
1.27% |
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Total non-interest expenses |
6,223 |
5,675 |
548 |
9.65% |
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Income before income tax provision |
2,631 |
1,544 |
1,087 |
70.37% |
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Income tax provision |
745 |
619 |
126 |
20.43% |
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Net income |
$ 1,885 |
$ 925 |
$ 960 |
103.80% |
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Net income available to common shareholders |
$ 1,815 |
$ 855 |
$ 960 |
112.28% |
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Severn Bancorp, Inc. |
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Consolidated Balance Sheet |
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(dollars in thousands, except per share data) |
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(Unaudited) |
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March 31, 2018 |
December 31, 2017 |
$ Change |
% Change |
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Balance Sheet Data: |
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ASSETS |
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Cash |
$ 2,291 |
$ 2,382 |
$ (90) |
-3.79% |
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Federal funds and Interest bearing deposits in other banks |
16,016 |
19,471 |
(3,455) |
-17.74% |
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Certificates of deposit held for investment |
8,780 |
8,780 |
0 |
0.00% |
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Investment securities available for sale |
12,011 |
10,119 |
1,892 |
18.70% |
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Investment securities held to maturity |
49,911 |
54,303 |
(4,392) |
-8.09% |
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Loans held for sale |
5,803 |
4,530 |
1,272 |
28.08% |
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Loans receivable |
669,912 |
668,151 |
1,760 |
0.26% |
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Loan valuation allowance |
(8,169) |
(8,055) |
(114) |
1.41% |
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Accrued interest receivable |
2,454 |
2,640 |
(186) |
-7.03% |
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Foreclosed real estate, net |
237 |
403 |
(166) |
-41.19% |
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Premises and equipment, net |
23,121 |
23,139 |
(18) |
-0.08% |
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Restricted stock investments |
4,844 |
4,489 |
355 |
7.91% |
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Bank owned life insurance |
5,104 |
5,064 |
41 |
0.81% |
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Deferred income taxes |
4,565 |
5,302 |
(737) |
-13.90% |
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Prepaid expenses and other assets |
4,205 |
4,070 |
135 |
3.31% |
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$ 801,085 |
$ 804,788 |
$ (3,703) |
-0.46% |
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Deposits |
$ 589,916 |
$ 602,228 |
$ (12,312) |
-2.04% |
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Borrowings |
96,500 |
88,500 |
8,000 |
9.04% |
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Subordinated debentures |
20,619 |
20,619 |
– |
0.00% |
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Accounts payable and accrued expenses |
1,632 |
2,340 |
(709) |
-30.27% |
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Total Liabilities |
708,667 |
713,688 |
(5,021) |
-3.79% |
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Preferred stock |
4 |
4 |
– |
-3.79% |
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Common stock |
122 |
122 |
(0) |
-3.79% |
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Additional paid-in capital |
65,060 |
65,137 |
(77) |
-3.79% |
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Retained earnings |
27,320 |
25,873 |
1,448 |
-3.79% |
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Accumulated comprehensive income (loss) |
(89) |
(36) |
(52) |
-3.79% |
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Total Stockholders’ Equity |
92,419 |
91,100 |
1,319 |
1.45% |
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$ 801,085 |
$ 804,788 |
$ (3,702) |
-0.46% |
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Severn Bancorp, Inc. |
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Selected Financial Data |
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(dollars in thousands, except per share data) |
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(Unaudited) |
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Three Months Ended March 31, |
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2018 |
2017 |
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Per Share Data: |
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Basic earnings per share |
$ 0.15 |
$ 0.07 |
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Diluted earnings per share |
$ 0.15 |
$ 0.07 |
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Average basic shares outstanding |
12,241,554 |
12,125,553 |
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Average diluted shares outstanding |
12,334,637 |
12,210,580 |
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Performance Ratios: |
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Return on average assets |
0.94% |
0.48% |
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Return on average equity |
8.22% |
4.24% |
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Net interest margin |
3.66% |
3.09% |
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Efficiency ratio* |
69.92% |
81.25% |
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March 31, 2018 |
December 31, 2017 |
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Asset Quality Data: |
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Non-accrual loans |
$ 5,702 |
$ 5,710 |
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Foreclosed real estate |
237 |
403 |
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Total non-performing assets |
5,939 |
6,113 |
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Total non-accrual loans to total loans |
0.9% |
0.9% |
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Total non-accrual loans to total assets |
0.7% |
0.7% |
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Allowance for loan losses |
8,169 |
8,055 |
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Allowance for loan losses to total loans |
1.2% |
1.2% |
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Allowance for loan losses to total non-accrual loans |
143.3% |
141.1% |
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Total non-performing assets to total assets |
0.7% |
0.8% |
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Non-accrual troubled debt restructurings (included above) |
811 |
819 |
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Performing troubled debt restructurings |
12,758 |
13,713 |
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Loan to deposit ratio |
113.6% |
110.9% |
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* This non-GAAP financial measure is calculated as non-interest expenses less OREO expenses divided by net interest income plus non-interest income. |
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SOURCE Severn Bancorp, Inc.
