Severn Bancorp (SVBI) 8-K 3RD Quarter Earnings Hold Steady at Severn Bancorp

 Exhibit 99.1

SEVERN BANCORP, INC.

FOR IMMEDIATE RELEASE            

 Contact:

 Thomas G. Bevivino

 Chief Operating Officer &

 Executive Vice President

 Email: tbevivino@severnbank.com

 Phone: 410.260.2000

3RD QUARTER EARNINGS HOLD STEADY AT SEVERN BANCORP

Annapolis, MD – Severn Bancorp, Inc., (Nasdaq: SVBI) parent company of Severn Savings Bank, FSB (“Severn”), today announced net income of $558,000 or $.02 per share for the third quarter of 2012 compared to a net income of $551,000 or $.01 per share for the third quarter of 2011 and compared to net income of $1,097,000 or $.07 per share, for the quarter ended June 30, 2012.  Earnings per share is calculated using net income available for common shareholders, which is net income less preferred stock dividends.

“Although we had net earnings in the third quarter, we need those earnings to improve.  While Severn continues to aggressively deal with its non-performing and non-accrual loans, and has been successfully liquidating real estate acquired through foreclosure, it is a process that will continue to take time to resolve,” stated Alan J. Hyatt, president and chief executive officer.  Mr. Hyatt continued “We have been staying very busy expanding lines of business and launching new products and channels, such as Mobile Banking, to keep us current and competitive in the market.  Severn is committed to providing the resources, products and expertise of a larger financial institution, along with the local decision making, market knowledge and personal service of a community bank.  We want to be able to offer value to our customers and an excellent banking experience. ”

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 $860 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.

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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, 2011.

Severn Bancorp, Inc.
Selected Financial Data
(dollars in thousands, except per share data)
(Unaudited)
				For the Three Months Ended
				September 30,			June 30,			March 31,			December 31,			September 30,
				2012			2012			2012			2011			2011
Summary Operating Results:
	Interest income			$	9,104		$	10,276		$	10,265		$	10,558		$	10,991
	Interest expense				3,027			3,336			3,552			3,659			3,856
			Net interest income		6,077			6,940			6,713			6,899			7,135
	Provision for loan losses				-			-			465			141			850
			Net interest income after provision
			for loan losses		6,077			6,940			6,248			6,758			6,285
	Non-interest income				1,039			835			891			873			628
	Non-interest expense				6,152			5,906			6,311			5,772			5,959
	Income (loss) before income taxes				964			1,869			828			1,859			954
	Income tax expense (benefit)				406			772			356			792			403
	Net income (loss)			$	558		$	1,097		$	472		$	1,067		$	551
Per Share Data:
	Basic earnings (loss) per share			$	0.02		$	0.07		$	0.01		$	0.06		$	0.01
	Diluted earnings (loss) per share			$	0.02		$	0.07		$	0.01		$	0.06		$	0.01
	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			10,066,679			10,066,679
Performance Ratios:
	Return on average assets				0.06	%		0.12	%		0.05	%		0.12	%		0.06	%
	Return on average equity				0.52	%		1.04	%		0.45	%		1.01	%		0.52	%
	Net interest margin				3.09	%		3.41	%		3.27	%		3.27	%		3.32	%
	Efficiency ratio*				73.88	%		67.20	%		66.99	%		64.84	%		60.76	%
		*	The efficiency ratio is general and administrative expenses as a percentage of net interest income plus non-interest income
				As of
				September 30,			June 30,			March 31,			December 31,			September 30,
					2012			2012			2012			2011			2011
Balance Sheet Data:
	Total assets			$	861,766		$	896,644		$	900,471		$	900,628		$	926,013
	Total loans receivable				695,198			691,647			701,596			719,241			741,528
	Allowance for loan losses				(23,180	)		(24,097	)		(25,795	)		(25,938	)		(30,358	)
			Net loans		672,018			667,550			675,801			693,303			711,170
	Deposits				609,772			643,653			650,473			652,757			678,717
	Borrowings				115,000			115,000			115,000			115,000			115,000
	Stockholders' equity				107,142			106,866			106,051			105,930			105,215
	Bank's Tier 1 core capital to total assets				14.1	%		13.3	%		13.1	%		13.0	%		12.4	%
	Book value per share			$	8.00		$	7.97		$	7.89		$	7.88		$	7.80
Asset Quality Data:
	Non-accrual loans			$	29,790		$	29,450		$	17,882		$	23,912		$	26,911
	Non-accrual troubled debt restructurings				12,574			9,515			11,677			7,520			8,713
	Foreclosed real estate				13,801			16,329			19,853			19,932			19,158
			Total non-performing assets		56,165			55,294			49,412			51,364			54,782
	Performing troubled debt restructurings				51,230			51,034			51,034			52,255			54,175
	Total non-accrual loans to net loans				6.3	%		5.8	%		4.4	%		4.5	%		5.0	%
	Allowance for loan losses				23,180			24,097			25,795			25,938			30,358
	Allowance for loan losses to total loans				3.3	%		3.5	%		3.7	%		3.6	%		4.1	%
	Allowance for loan losses to total
			non-performing loans		54.7	%		61.8	%		87.3	%		82.5	%		85.2	%
	Total non-accrual loans to total assets				4.9	%		4.3	%		3.3	%		3.5	%		3.8	%
	Total non-performing assets to total assets				6.5	%		6.2	%		5.5	%		5.7	%		5.9	%