Severn in Md. Sells Loans for $23M

By Chris Cumming September 27, 2013, 5:39 p.m. EDT 1 Min Read

Community banking

Severn in Maryland to Gain $1M in Profits from Error

Severn Bancorp (SVBI) in Maryland will restate earnings for the past three years to reflect a change in how it accounts for premiums on deposit insurance.

By Brian Browdie

February 15
Consumer banking

Severn in Maryland Names a Chief Lending Officer

Severn Bank & Trust in Annapolis, Md., has turned to a 35-year banking veteran to be its chief lending officer.

By Chris Cumming

January 10

Severn Bancorp (SVBI) in Annapolis, Md., plans to sell soured and other loans for $23 million.

The $840 million-asset company will take a third-quarter charge of about $10 million on the sale of the loans, which have a book value of $33 million, it said. The company did not name the buyer.

The Office of the Comptroller of the Currency issued an enforcement action against Severn's banking unit in April. The agreement requires the bank to clean up its loan book, among other stipulations. The bank had a Tier 1 leverage ratio of 14.94% and total risk-based capital of 21.73% as of June 30, according to the Federal Deposit Insurance Corp.

The portfolio of loans includes performing and nonperforming loans. Severn will consider further loan sales, Chief Executive Alan Hyatt said.

"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," Hyatt said in the news release. "The sale of underperforming loans is an important initiative to clean up the bank's balance sheet."

For reprint and licensing requests for this article, click here.

Community banking

TRENDING

Politics and policy

Buy the People: Why the CFPB is a lightning rod government agency

The Consumer Financial Protection Bureau was created to protect the people from financial predation. But there are very different interpretations of what that means, and whether the people should be protected by — or from — the government.

12m ago
Regulation and compliance

Pathward Bank to pay more than $700,000 for compliance failure

The Office of the Attorney General in New York says the bank violated the state's Exempt Income Protection Act, illegally transferring customers' money to debt collectors.

By Catherine Leffert

April 17
Earnings

Citizens reports fast progress in building its private bank

The Providence, Rhode Island, company is having discussions with private wealth management teams elsewhere as it seeks to expand its fledgling private bank. In just three months, private banking deposits doubled to $2.4 billion.

By Allissa Kline

April 17

MORE FROM AMERICAN BANKER

Regulation and compliance

Pathward Bank to pay more than $700,000 for compliance failure

The Office of the Attorney General in New York says the bank violated the state's Exempt Income Protection Act, illegally transferring customers' money to debt collectors.

By Catherine Leffert

April 17
Earnings

Citizens reports fast progress in building its private bank

The Providence, Rhode Island, company is having discussions with private wealth management teams elsewhere as it seeks to expand its fledgling private bank. In just three months, private banking deposits doubled to $2.4 billion.

By Allissa Kline

April 17
Earnings

'Higher-for-longer' hits U.S. Bancorp as funding costs stay elevated

After the Minneapolis-based company reported stubbornly high commercial deposit costs, it reduced its full-year forecast for net interest income by $200 million-$500 million.

By John Reosti

April 17
Regulation and compliance

CFPB makes structural changes after expanding authority over nonbanks

The CFPB has dissolved the Office of Supervision, Enforcement and Fair Lending and eliminated the job of associate director in a move that impacts how it designates nonbanks for supervision.

By Kate Berry

April 17
Consumer banking

First Horizon bucks trend as deposit costs slow

Rising deposit costs have plagued banks in general, and the Tennessee bank had to pay up to bolster liquidity after its failed merger with TD. But First Horizon retained customers in the first quarter while not paying them the special rates they got last year.

By Polo Rocha

April 17
Payments

Klarna turns a BNPL track record into a creditworthiness benchmark

U.S. customers who have previously used Sweden-based Klarna's buy now/pay later financing — and paid off their loans in full — will be prequalified for interest-bearing loans through a new version of the Klarna Visa card rolling out later this year.

By Kate Fitzgerald

April 17