Severn Bancorp (SVBI) 8-K Severn Bancorp, Inc. Reports Significant Increase in Year End Earnings

Exhibit 99.1

FOR IMMEDIATE RELEASE	Contact:
	Thomas G. Bevivino
	Chief Financial Officer &
	Executive Vice President
	Email: tbevivino@severnbank.com
	Phone: 410.260.2000

Severn Bancorp, Inc. Reports Significant Increase in Year End Earnings

Annapolis, MD (January 28, 2016) – Severn Bancorp, Inc., (Nasdaq: SVBI) (“Company”) parent company of Severn Savings Bank, FSB (“Severn”), reported net income for the year ended December 31, 2015 of $4,535,000 or $.21 per diluted share, a 56% increase, versus net income of $2,909,000 or $.06 per diluted share for the year ended December 31, 2014. Net income for the fourth quarter of 2015 dipped slightly versus the fourth quarter of 2014, to $1,078,000 or $.05 per diluted share compared to net income of $1,550,000 or $.09 per diluted share. 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 continues to be well capitalized, with continuing decreases in the level of non-performing assets. Alan J. Hyatt, President and Chief Executive Officer commented, “While these are not the robust figures we would like to ultimately see, the Company continues to broaden its community banking focus and add new banking relationships.”

Mr. Hyatt added, “Severn is just coming out of its agreement with the Office of the Comptroller of the Currency and looking for opportunities to grow. We continue to target local small to mid-size community businesses who want to work with a local bank. We have added new sales team members that will be a great asset in helping with this growth. We are steadfast in our mission to provide an exceptional banking experience for residents of Anne Arundel County.”

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 $760 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. 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 in the 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, 2014.

Severn Bancorp, Inc.

Selected Financial Data

(dollars in thousands, except per share data)

(Unaudited)

	For the Three Months Ended
	December 31, 2015			September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014
Summary Operating Results:
Interest income	$	7,582		$	7,932		$	7,779		$	7,860		$	8,086
Interest expense		2,264			2,284			2,243			2,201			2,236
Net interest income		5,318			5,648			5,536			5,659			5,850
Provision for loan losses		(480	)		-			100			100			400
Net interest income after provision for loan losses		5,798			5,648			5,436			5,559			5,450
Non-interest income		1,409			1,469			2,332			900			1,142
Non-interest expense		6,127			5,838			6,368			5,593			5,041
Income before income tax provision		1,080			1,279			1,400			866			1,551
Income tax provision		2			52			35			1			1
Net income	$	1,078		$	1,227		$	1,365		$	865		$	1,550
Per Share Data:
Basic earnings per share	$	0.05		$	0.06		$	0.08		$	0.03		$	0.10
Diluted earnings per share	$	0.05		$	0.06		$	0.08		$	0.03		$	0.09
Common stock dividends per share	$	-		$	-		$	-		$	-		$	-
Average basic shares outstanding		10,088,879			10,088,879			10,088,549			10,070,796			10,067,379
Average diluted shares outstanding		10,133,663			10,116,060			10,113,295			10,093,251			10,095,866
Performance Ratios:
Return on average assets		0.14	%		0.16	%		0.18	%		0.11	%		0.20	%
Return on average equity		1.28	%		1.47	%		1.65	%		1.05	%		1.88	%
Net interest margin		3.10	%		3.20	%		3.16	%		3.22	%		3.32	%
Efficiency ratio*		89.43	%		80.17	%		80.27	%		86.26	%		71.60	%

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

	December 31, 2015			September 30, 2015			As of June 30, 2015			March 31, 2015			December 31, 2014
Balance Sheet Data:
Total assets	$	762,079		$	773,977		$	781,923		$	781,628		$	776,328
Total loans receivable		598,414			597,061			611,823			627,591			643,317
Allowance for loan losses		(8,758	)		(8,689	)		(8,944	)		(8,964	)		(9,435	)
Net loans		589,656			588,372			602,879			618,627			633,882
Deposits		523,771			536,646			544,112			546,535			543,814
Borrowings		115,000			115,000			115,000			115,000			115,000
Stockholders' equity		86,456			85,876			85,145			84,275			83,810
Bank's Tier 1 core capital to total assets		14.9	%		14.5	%		14.1	%		14.0	%		13.8	%
Book value per share	$	5.93		$	5.87		$	5.80		$	5.71		$	5.68
Asset Quality Data:
Non-accrual loans	$	8,974		$	8,778		$	10,107		$	13,317		$	12,845
Foreclosed real estate		1,744			1,919			2,092			2,211			1,947
Total non-performing assets		10,718			10,697			12,199			15,528			14,792
Total non-accrual loans to net loans		1.5	%		1.5	%		1.7	%		2.2	%		2.0	%
Total non-accrual loans to total assets		1.2	%		1.1	%		1.3	%		1.7	%		1.7	%
Allowance for loan losses		8,758			8,689			8,944			8,964			9,435
Allowance for loan losses to total loans		1.5	%		1.5	%		1.5	%		1.4	%		1.5	%
Allowance for loan losses to total non-accrual loans		97.6	%		99.0	%		88.5	%		67.3	%		73.5	%
Total non-performing assets to total assets		1.4	%		1.4	%		1.6	%		2.0	%		1.9	%
Non-accrual troubled debt restructurings (included above)		1,329			1,835			2,128			2,620			2,641
Performing troubled debt restructurings		24,386			24,449			25,591			26,175			27,724
Loan to deposit ratio		114.3	%		111.3	%		112.4	%		114.8	%		118.3	%