Surrey Bancorp (the "Company") (PINKSHEETS: SRYB), the holding
company for Surrey Bank & Trust, today reported earnings for
the second quarter of 2011.
For the quarter ended June 30, 2011, net income totaled $711,177
or $0.19 per fully diluted share, compared with $550,773 or $0.14
per fully diluted common share earned during the second quarter of
2010.
Earnings for the three months ended June 30, 2011, are
approximately 29.1 percent higher than for the same period in 2010.
The increase results from a reduction in the provision for loan
losses. The provision decreased from $254,485 in the second quarter
of 2010 to a recapture of $279,825 in 2011. Over the past two years
reserves were increased due to weakness in the economy that
necessitated an increase in reserves associated with impaired
loans. During the first half of 2011, the level of impaired loans
has stabilized. Certain loans that were reserved in previous
quarters were charged off resulting in an improvement of the credit
quality of the loan portfolio. The reserve was further impacted by
an increase in loans carrying government guarantees. At June 30,
2011, the guaranteed portion of loans equaled 20.2 percent of total
loans compared to 18.1 percent at December 31, 2010. Net interest
income decreased slightly from $2,159,740 in the second quarter of
2010 to $2,118,802 in 2011. A reduction in average loan balances
from the second quarter of 2010 to 2011 contributed to this
decrease. Asset yields decreased from 5.32 percent to 4.97 percent
from 2010 to 2011 due to the change in earning asset mix. The cost
of funds continued to decrease from 1.35 percent in the second
quarter of 2010 to 1.14 percent in the second quarter of 2011.
Noninterest income decreased 6.3 percent in 2011 primarily due to a
reduction in gains on the sale of a government guaranteed loan. No
such sales were made in 2011 after recording income of $32,865 in
the second quarter of 2010. Noninterest expenses increased 10.1
percent from $1,637,115 in the second quarter of 2010, to
$1,802,453 in 2011. Most of the increase is associated with write
downs in the value of foreclosed assets and expenses incurred to
maintain those assets. Foreclosed asset expense increased from
$11,490 in the second quarter of 2010 to $120,908 in 2011.
Loan loss reserves were $4,468,475 or 2.76 percent of total
loans as of June 30, 2011. Non-performing assets were 2.2 percent
of total assets at June 30, 2011, compared to 1.72 percent on that
date in 2010. At June 30, 2011, the allowance for loan loss
reserves equals 56 percent of impaired and non-performing assets,
net of government guarantees.
Total assets were $228,344,483 as of June 30, 2011, an increase
of 4.4 percent from $218,769,032 reported as of June 30, 2010.
Total deposits were $187,550,998 at quarter-end 2011, a 5.6 percent
increase from the $177,572,680 reported at the end of the second
quarter of 2010. Net loans decreased 1.5 percent to $172,005,516,
compared to $174,712,965 at June 30, 2010.
Net income for the six months ended June 30, 2011, was
$1,263,368 or $0.33 per diluted share, compared to $780,549, or
$0.20 per diluted share, for the same period in 2010.
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 services through an association with LPL Financial,
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)
June 30 December 31 June 30
2011 2010 2010
----------- ----------- -----------
(unaudited) (unaudited)
Total assets $ 228,344 $ 213,652 $ 218,769
Total loans 176,474 178,478 180,356
Investments 41,370 26,448 28,752
Deposits 187,551 173,960 177,573
Borrowed funds 9,100 9,450 9,950
Stockholders' equity 29,845 28,644 29,157
Non-performing assets to total assets 2.22% 3.19% 1.72%
Loans past due more than 90 days to
total loans 0.04% 0.00% 0.43%
Allowance for loan losses to total
loans 2.53% 3.74% 3.13%
Book value per common share $ 8.08 $ 7.73 $ 7.65
SURREY BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share amounts)
For the Three For the Six
Months Months
Ended June 30, Ended June 30,
------------------ ----------------
2011 2010 2011 2010
-------- ------- ------- -------
Interest income $ 2,670 $ 2,794 $ 5,411 $ 5,577
Interest expense 551 634 1,116 1,263
Net interest income 2,119 2,160 4,295 4,314
Provision for loan losses (280) 255 (121) 1,204
Net interest income after provision
for loan losses 2,399 1,905 4,416 3,110
Noninterest income 576 615 1,170 1,420
Noninterest expense 1,803 1,637 3,533 3,294
Net income before taxes 1,172 883 2,053 1,236
Provision for income taxes 461 332 790 455
Net income 711 551 1,263 781
Preferred stock dividend declared 46 66 91 129
Net income available to common
shareholders $ 665 $ 485 $ 1,172 $ 652
Basic net income per share $ 0.21 $ 0.15 $ 0.37 $ 0.20
Diluted net income per share $ 0.19 $ 0.14 $ 0.33 $ 0.20
Return on average total assets * 1.26% 1.01% 1.14% 0.72%
Return on average total equity * 9.60% 7.59% 8.62% 5.42%
Yield on average interest earning
assets 4.97% 5.32% 5.16% 5.37%
Cost of funds 1.14% 1.35% 1.19% 1.36%
Net yield on average interest earning
assets 3.95% 4.11% 4.10% 4.15%
Overhead efficiency ratio 66.89% 59.00% 64.65% 57.45%
Net charge-offs (recoveries)/average
loans (0.06)% 0.03% 1.16% 0.13%
* annualized for all periods presented
For additional information, please contact Ted Ashby CEO or Mark
Towe CFO (336) 783-3900
Surrey Bancorp (PK) (USOTC:SRYB)
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