Severn Bancorp, the Annapolis-based parent of its namesake bank, posted Friday a net loss for the second quarter due to an increase in loan loss reserves.

The company reported a loss of $846,000, or 13 cents per share, for the three months ending June 30, compared with a net profit of $593,000, or 2 cents per share, in the corresponding period last year.

The company said it put aside $3 million to cover potential losses on acquisition and development loans.

"While we are not pleased with its impact, management is comfortable with the decision to act in a prudent and cautious manner with respect to the allowance for loan losses," Severn President and CEO Alan J. Hyatt said in a statement. "Were it not for this added reserve, the bank would have had another profitable quarter."

The company reported $937 million in assets.

Hanah.cho@baltsun.com

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