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.

 

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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, 2017.

 

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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.