ANNAPOLIS, Md., Jan. 27, 2017 /PRNewswire/ -- Severn Bancorp, Inc., ("the Company"),(Nasdaq: SVBI) parent company of Severn Bank ("Severn"), today announced net income of $1,103,000 or $.08 per diluted share for the fourth quarter of 2016, a slight increase compared to net income of $1,078,000 or $.05 per diluted share for the fourth quarter of 2015. Net income was $15,539,000 or $1.19 per diluted share for the year ended December 31, 2016, compared to net income of $4,535,000 or $.21 per diluted share for the year ended December 31, 2015. The 2016 earnings included a non-recurring income tax benefit of approximately $11,837,000, resulting from a reversal of a net deferred tax asset valuation allowance which was recorded in the second quarter of 2016. Diluted earnings per share is calculated using net income available for common shareholders, which is net income less preferred stock dividends and discount amortization. The Company did see a 4.8% decrease in interest expense during the year ended December 31, 2016 as compared to the year ended December 31, 2015. This reduction stems from a focused effort to replace high cost borrowings with core deposits resulting in a lower cost of funds and ultimately an improvement in net interest margin.
"The fourth quarter results remain steady," stated Alan J. Hyatt, President and Chief Executive Officer. Mr. Hyatt continued, "Our real work has been on reducing our cost of funds and growing our community banking presence. We have been focused on relationships and pulling in deposits along with those relationships. We want to show the residents and businesses of Anne Arundel County what we have to offer and how Severn can work for them. With retail branches in Edgewater, Annapolis, Severna Park, and Glen Burnie we continue to expand our commitment to the businesses and residents of this County."
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 approximately $790 million and five branches located in Annapolis, Edgewater and Glen Burnie, and Severna Park, Maryland. The bank specializes in exceptional customer service and holds itself and its employees to a high standard of community contribution. Severn Bank is a trade name used by Severn Savings Bank, FSB. 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, 2015.
Severn Bancorp, Inc.
Selected Financial Data
(dollars in thousands, except per share data)
(Unaudited)
For The Quarters Ended
December 31, December 31, Variance
--------
2016 2015 Dollars Percent
---- ---- ------- -------
Summary Operating Results:
Interest income $7,762 $7,582 $180 2.37%
Interest expense 2,066 2,264 (198) -8.75%
---------------- ----- -----
Net interest income 5,696 5,318 378 7.11%
Provision for loan losses (500) (480) (20) 4.17%
----------------- ---- ----
Net interest income after
provision
6,196 5,798 398 6.86%
for loan losses
Non-interest income 1,582 1,409 173 12.28%
Non-interest expense 5,873 6,127 (254) -4.15%
----------------- ----- -----
Income before income tax provision 1,905 1,080 825 76.39%
Income tax (benefit) provision 802 2 800 40000.00%
----------------- --- ---
Net income $1,103 $1,078 $25 2.32%
------ ------ ---
Net income available to common
shareholders $965 $484 $481 99.38%
---- ---- ----
Per Share Data:
Basic earnings per share $0.08 $0.05
Diluted earnings per share $0.08 $0.05
Average basic shares outstanding 12,111,055 10,088,879
Average diluted shares outstanding 12,215,629 10,133,663
Performance Ratios:
Return on average assets 0.56% 0.56%
Return on average equity 5.05% 5.13%
Net interest margin 3.19% 3.10%
Efficiency ratio 80.56% 89.43%
Severn Bancorp, Inc.
Selected Financial Data
(dollars in thousands, except per share data)
(Unaudited)
For The Years Ended
December 31, December 31, Variance
--------
2016 2015 Dollars Percent
---- ---- ------- -------
Summary Operating Results:
Interest income $30,749 $31,153 $(404) -1.30%
Interest expense 8,561 8,992 (431) -4.79%
---------------- ----- -----
Net interest income 22,188 22,161 27 0.12%
Provision for loan losses (350) (280) (70) 25.00%
----------------- ---- ----
Net interest income after provision
22,538 22,441 97 0.43%
for loan losses
Non-interest income 6,361 6,110 251 4.11%
Non-interest expense 23,374 23,926 (552) -2.31%
----------------- ------ ------
Income before income tax provision 5,525 4,625 900 19.46%
Income tax (benefit) provision (10,014) 90 (10,104) -11226.67%
----------------- ------- ---
Net income $15,539 $4,535 $11,004 242.65%
------- ------ -------
Net income available to common
shareholders $13,829 $2,159 $11,670 540.53%
------- ------ -------
Per Share Data:
Basic earnings per share $1.20 $0.21
Diluted earnings per share $1.19 $0.21
Average basic shares outstanding 11,522,333 10,083,942
Average diluted shares outstanding 11,574,892 10,112,653
Performance Ratios:
Return on average assets 1.99% 0.59%
Return on average equity 17.08% 5.45%
Net interest margin 3.11% 3.18%
Efficiency ratio 81.19% 83.82%
Severn Bancorp, Inc.
Selected Financial Data
(dollars in thousands, except per share data)
(Unaudited)
As of
December 31, December 31, Variance
--------
2016 2015 Dollars Percent
---- ---- ------- -------
Balance Sheet Data:
Total assets $787,485 $762,079 $25,406 3.33%
Total loans receivable 610,278 598,414 11,864 1.98%
Allowance for loan losses (8,969) (8,758) (211) 2.41%
----------------- ------ ------
601,309 589,656 11,653 1.98%
Net loans
Deposits 571,946 523,771 48,175 9.20%
Borrowings 103,500 115,000 (11,500) -10.00%
Subordinated Debentures 20,619 24,119 (3,500) -14.51%
Stockholders' equity 87,930 86,456 1,474 1.70%
Bank's Tier 1 core capital to total assets 12.7% 14.8%
Book value per common share $6.98 $5.93 $1.05 17.71%
Asset Quality Data:
Non-accrual loans $9,853 $8,974 $879 9.79%
Foreclosed real estate 973 1,744 (771) -44.21%
----------------- --- -----
10,826 10,718 108 1.01%
Total non-performing assets
Total non-accrual loans to net loans 1.6% 1.5%
Total non-accrual loans to total assets 1.3% 1.2%
Allowance for loan losses 8,969 8,758
Allowance for loan losses to total loans 1.5% 1.5%
Allowance for loan losses to total
91.0% 97.6%
non-accrual loans
Total non-performing assets to total assets 1.4% 1.4%
Non-accrual troubled debt restructurings
(included above) 2,392 1,329 1,063 79.98%
Performing troubled debt restructurings 18,066 24,386 (6,320) -25.92%
Loan to deposit ratio 106.7% 114.3%
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/severn-bancorp-inc-announces-fourth-quarter-earnings-and-year-end-results-300398083.html
SOURCE Severn Bancorp, Inc.
