Severn Bancorp (SVBI) 8-K Severn Bancorp Announces $1.0 Million Increase in First Quarter Earnings

Exhibit 99.1

SEVERN BANCORP, INC.

FOR IMMEDIATE RELEASE

Contact:

Thomas G. Bevivino

Chief Financial Officer &

Executive Vice President

tbevivino@severnbank.com

410.260.2000

Severn Bancorp Announces $1.0 Million Increase in First Quarter Earnings

ANNAPOLIS, MD (April 15, 2011) — Severn Bancorp, Inc., (Nasdaq: SVBI) parent company of Severn Savings Bank, FSB (“Severn”), today announced an increase of $975,000 in net income for the quarter ended March 31, 2011 compared to the quarter ended March 31, 2010.  Net income was $447,000 or $.00 per share for the fist quarter of 2011, compared to a net loss of $528,000 or ($.10) for the first quarter of 2010.  Earnings per share is calculated using net income available for common shareholders, which is net income less preferred stock dividends.

“We are pleased to report year-over-year improvement in earnings as we continue to steer through the sluggish economic recovery,” said Alan J. Hyatt, president and chief executive officer.  Mr. Hyatt continued, “We persist in our efforts to balance ensuring sustained shareholder value, increasing regulatory demands being placed on financial institutions and providing excellent full service banking to Anne Arundel County residents and businesses.”

About Severn

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 $970 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 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.  The Company’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 Company’s general market area, federal and state regulation, competition and other factors detailed from time to time in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including “Item 1A. Risk Factors” contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

Severn Bancorp, Inc.
Selected Financial Data
(dollars in thousands, except per share data)
(Unaudited)
				For the Three Months Ended
				March 31,			December 31,			September 30,			June 30,			March 31,
				2011			2010			2010			2010			2010
Summary Operating Results:
	Interest income			$	11,698		$	11,809		$	12,083		$	13,045		$	12,596
	Interest expense				4,126			4,448			4,906			4,995			4,980
			Net interest income		7,572			7,361			7,177			8,050			7,616
	Provision for loan losses				634			1,200			1,000			1,000			2,544
			Net interest income (loss) after
			provision for loan losses		6,938			6,161			6,177			7,050			5,072
	Non-interest income				562			921			724			537			563
	Non-interest expense				6,709			5,980			6,031			6,533			6,464
	Income (loss) before income taxes				791			1,102			870			1,054			(829	)
	Income tax expense (benefit)				344			495			385			461			(301	)
	Net income (loss)			$	447		$	607		$	485		$	593		$	(528	)
Per Share Data:
	Basic earnings (loss) per share			$	0.00		$	0.02		$	0.01		$	0.02		$	(0.10	)
	Diluted earnings (loss) per share			$	0.00		$	0.02		$	0.01		$	0.02		$	(0.10	)
	Common stock dividends per share			$	-		$	-		$	-		$	-		$	-
	Average basic shares outstanding				10,066,679			10,066,679			10,066,679			10,066,679			10,066,679
	Average diluted shares outstanding				10,066,679			10,066,679			10,066,679			10,076,763			10,066,679
Performance Ratios:
	Return on average assets				0.05	%		0.06	%		0.05	%		0.06	%		-0.05	%
	Return on average equity				0.44	%		0.61	%		0.47	%		0.60	%		-0.50	%
	Net interest margin				3.48	%		3.37	%		3.17	%		3.63	%		3.49	%
	Efficiency ratio*				58.57	%		57.84	%		62.85	%		56.97	%		59.20	%
		*	The efficiency ratio is general and administrative expenses as a percentage of net interest income plus non-interest income
				As of
				March 31,			December 31,			September 30,			June 30,			March 31,
					2011			2010			2010			2010			2010
Balance Sheet Data:
	Total assets			$	967,736		$	962,543		$	975,894		$	1,002,284		$	970,791
	Total loans receivable				780,412			808,808			816,726			840,049			842,529
	Allowance for loan losses				(29,252	)		(29,871	)		(30,335	)		(34,040	)		(34,560	)
			Net loans		751,160			778,937			786,391			806,009			807,969
	Deposits				718,298			714,776			717,319			742,042			712,376
	Stockholders' equity				106,213			106,100			105,813			105,647			105,374
	Bank's Tier 1 core capital to total assets				12.1	%		12.3	%		12.1	%		11.6	%		11.9	%
	Book value per share			$	7.90		$	7.89		$	7.86		$	7.85		$	7.82
Asset Quality Data:
	Non-accrual loans			$	44,984		$	46,164		$	53,563		$	47,857		$	50,556
	Foreclosed real estate				18,898			20,955			18,783			16,272			23,586
			Total non-performing assets		63,882			67,119			72,346			64,129			74,142
	Total non-accrual loans to net loans				6.0	%		5.9	%		6.8	%		5.9	%		6.3	%
	Allowance for loan losses				29,252			29,871			30,335			34,040			34,560
	Allowance for loan losses to total loans				3.7	%		3.7	%		3.7	%		4.1	%		4.1	%
	Allowance for loan losses to total
			non-performing loans		65.0	%		64.7	%		56.6	%		71.1	%		68.4	%
	Total non-accrual loans to total assets				4.6	%		4.8	%		5.5	%		4.8	%		5.2	%
	Total non-performing assets to total assets				6.6	%		7.0	%		7.4	%		6.4	%		7.6	%