Surrey Bancorp (the "Company") (OTCBB: SRYB), the holding company
for Surrey Bank & Trust, today reported earnings for the fourth
quarter of 2010 and the full year.
For the quarter ended December 31, 2010, net income totaled
$151,670 or $0.02 per fully diluted share, compared with $302,924
or $0.07 per fully diluted common share earned during the fourth
quarter of 2009.
The decrease in earnings results from an increase in the
provision for loan losses. The provision for loan losses increased
from $589,950 in the fourth quarter of 2009 to $1,163,170 for the
same period in 2010. The increase in the loan loss provision
results from a continued weakness in the economy which necessitated
an increase in reserves associated with impaired loans and
historical loss experience. Net interest income increased 6.4
percent from $2,083,431 in the fourth quarter of 2009 to $2,215,689
for the same period in 2010. The continued reduction of deposit
costs during the fourth quarter was largely responsible for the
improvement in the margin. Noninterest income decreased 4.7 percent
to $737,470, compared to $773,755 reported for the quarter ended
December 31, 2009, primarily due to reduced revenue from service
charges on deposit accounts. Noninterest expenses decreased from
$1,675,971 in the fourth quarter of 2009, to $1,571,162 in the
fourth quarter of 2010, or 6.3 percent. This decrease is due to the
reduction in the expenses relating to salaries and employee
benefits.
For the year ended December 31, 2010, the Company reported net
income of $1,238,018, or $0.29 per fully diluted common share. This
represents a 44.6 percent decrease in profitability from year-end
2009, when the Company reported earnings of $2,232,294 or $0.58 per
fully diluted common share. The decrease in net income was
attributable to earnings in the Bank's sales finance subsidiary,
which recorded tax-exempt life insurance proceeds of $1,000,000 in
the first quarter of 2009. Net interest income increased 13.9
percent from $7,620,899 in 2009 to $8,678,096 for the 2010
year-end. The reduction of deposit costs during the year was
largely responsible for the improvement in the margin. The
provision for loan losses increased from $1,604,947 in 2009 to
$3,003,748 in 2010. The annual increase in the loan loss provision
results from the same factors that lead to the increased loss
provision during the fourth quarter, increase in reserves
associated with impaired loans and historical loss experience.
Noninterest income, excluding the 2009 life insurance proceeds,
increased 9.1 percent to $2,739,125 compared to $2,511,411 reported
for the year ended December 31, 2009. Gains on the sale of
government guaranteed loans were primarily responsible for the
increase. Noninterest expenses decreased from $6,583,745 in 2009,
to $6,481,542 in 2010, or 1.5 percent. This decrease was primarily
due to reductions in salaries, employee benefits and FDIC insurance
premiums.
Loan loss reserves were $6,683,922 or 3.74 percent of total
loans as of December 31, 2010. Non-performing assets were 3.19
percent of total assets at December 31, 2010, compared to 0.48
percent on that date in 2009. At December 31, 2010, the allowance
for loan loss reserves equals 68 percent of impaired and
non-performing assets, net of government guarantees.
Total assets were $213,652,484 as of December 31, 2010, a
decrease of 1.5 percent from $216,949,782 reported as of December
31, 2009. Total deposits were $173,960,073 at year-end 2010, a
minor change from the $173,974,558 reported at the end of year of
2009. Net loans decreased 4.8 percent to $171,794,247, compared to
$180,442,154 at December 31, 2009.
About Surrey Bancorp
Surrey Bancorp is the bank holding company for Surrey Bank &
Trust (the "Bank") and is located at 145 North Renfro Street, Mount
Airy, North Carolina. The Bank operates full service branch offices
at 145 North Renfro Street, 1280 West Pine Street and 2050 Rockford
Street in Mount Airy. Full-service branch offices are also located
at 653 South Key Street in Pilot Mountain, North Carolina, and 940
Woodland Drive in Stuart, Virginia.
Surrey Bank & Trust is engaged in the sale of insurance
through its wholly owned subsidiary, SB&T Insurance, located at
199 North Renfro Street in Mount Airy. The Bank also owns Surrey
Investment Services, Inc., which provides full-service brokerage
and investment advice through an association with UVest Financial
Services, and Freedom Finance, LLC, a sales finance company located
at 165 North Renfro Street in Mount Airy.
Surrey Bank & Trust can be found online at
www.surreybank.com.
Non-GAAP Financial Measures
This report refers to the overhead efficiency ratio, which is
computed by dividing non-interest expense by the sum of net
interest income and non-interest income. This is a non-GAAP
financial measure that we believe provides investors with important
information regarding our operational efficiency. Comparison of our
efficiency ratio with those of other companies may not be possible,
because other companies may calculate the efficiency ratio
differently. Such information is not in accordance with generally
accepted accounting principles in the United States (GAAP) and
should not be construed as such. Management believes such financial
information is meaningful to the reader in understanding operating
performance, but cautions that such information not be viewed as a
substitute for GAAP. Surrey Bancorp, in referring to its net
income, is referring to income under GAAP.
Forward Looking Statements
Information in this press release contains "forward-looking
statements." These statements involve risks and uncertainties that
could cause actual results to differ materially, including without
limitation, the effects of future economic conditions, governmental
fiscal and monetary policies, legislative and regulatory changes,
the risks of changes in interest rates and the effects of
competition. Additional factors that could cause actual results to
differ materially are discussed in Surrey Bancorp's recent filings
with the Securities and Exchange Commission, included but not
limited to its Annual Report on Form 10-K and its other periodic
reports.
SURREY BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share amounts)
December 31, December 31,
2010 2009
------------ ------------
(unaudited)
Total assets $ 213,652 $ 216,950
Total loans 178,478 185,112
Investments 26,448 22,540
Deposits 173,960 173,975
Borrowed funds 9,450 12,950
Stockholders' equity 28,644 28,425
Non-performing assets to total assets 3.19% 0.48%
Loans past due more than 90 days to total loans 0.00% 0.00%
Allowance for loan losses to total loans 3.74% 2.52%
Book value per common share $ 7.73 $ 7.44
SURREY BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share amounts)
For the For the
Three Months Twelve Months
Ended Ended
December 31, December 31,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
Interest income $ 2,814 $ 2,786 $ 11,150 $ 10,847
Interest expense 598 703 2,472 3,226
Net interest income 2,216 2,083 8,678 7,621
Provision for loan losses 1,163 590 3,004 1,605
Net interest income after
provision for loan losses 1,053 1,493 5,674 6,016
Noninterest income 737 774 2,739 3,511
Noninterest expense 1,571 1,676 6,481 6,584
Net income before taxes 219 591 1,932 2,943
Provision for income taxes 67 288 694 711
Net income 152 303 1,238 2,232
Preferred stock dividend declared 107 66 301 258
Net income available to common
shareholders $ 45 $ 237 $ 937 $ 1,974
Basic net income per share $ 0.01 $ 0.07 $ 0.29 $ 0.62
Diluted net income per share $ 0.02 $ 0.07 $ 0.29 $ 0.58
Return on average total assets * 0.27% 0.57% 0.57% 1.07%
Return on average total equity * 2.07% 4.25% 4.26% 8.07%
Yield on average interest
earning assets 5.33% 5.44% 5.34% 5.45%
Cost of funds 1.26% 1.53% 1.32% 1.79%
Net yield on average interest
earning assets 4.19% 4.07% 4.15% 3.83%
Overhead efficiency ratio 53.20% 58.66% 56.77% 59.14%
Net charge-offs/average loans 0.15% 0.01% 0.55% 0.17%
* annualized for all periods presented
For additional information, please contact Ted Ashby CEO Mark
Towe CFO (336) 783-3900
Surrey Bancorp (PK) (USOTC:SRYB)
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