Sept 30 - Severn Bancorp Inc., Annapolis, Md., (Nasdaq: SVBI) parent company of Severn Savings Bank, FSB, has announced that the bank sold certain underperforming loans with a book value of approximately $33 million for a sale price of approximately $23 million. As a result of the sale, the bank will experience a pre-tax charge to income for the 3rd quarter of approximately $10 million.
"The bulk sale of these loans included performing and non-performing loans," stated Alan J. Hyatt, president and CEO. Hyatt continued, "This transaction speeds up improvement in our credit quality, lowers our problem loans to assets ratio to a more acceptable level and allows the bank to focus on new business. The sale of underperforming loans is an important initiative to clean up the bank's balance sheet. Expenses related to managing loans will be reduced with the removal of this group of loans, and management continues to explore the option for additional sales of other assets. We look forward to the opportunity to redirect bank resources to the more productive activities that will result in improving earnings, sustained profitability and opportunities for long-term success."
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 $840 million and four branches located in Annapolis, Edgewater and Glen Burnie, Md. 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.