Severn Bancorp, Inc. Retained Earnings 2011-2026 | SVBI

Retained earnings — this is the portion of a company’s net profit that has not been distributed to shareholders as dividends but remains at the company’s disposal for future use. It is also referred to as retained income or accumulated earnings.

• reinvestment in development (R&D, equipment, marketing)
• debt repayment
• acquisition of other companies
• creation of reserves for the future

A high level of retained earnings indicates that the company is in a growth phase, accumulating capital and prioritizing reinvestment over dividend payouts. Conversely, low or negative retained earnings may suggest either a generous dividend policy, in which all profits are distributed to shareholders, or ongoing losses that reduce the overall financial result.

The presence of retained earnings does not indicate that the company has available cash — it is solely an accounting figure reflecting the accumulated portion of net profit remaining after dividends have been paid. Therefore, it is important for investors to analyze not only the amount of retained earnings, but also how effectively it is used to develop the business, reduce debt, or build financial stability.