Surrey Bancorp (the "Company") (PINKSHEETS: SRYB), the holding
company for Surrey Bank & Trust, today reported earnings for
the third quarter of 2011.
For the quarter ended September 30, 2011, net income totaled
$561,713 or $0.15 per fully diluted share, compared with $305,799
or $0.08 per fully diluted common share earned during the third
quarter of 2010.
Earnings for the three months ended September 30, 2011, are 83.7
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 $636,736 in the third quarter of 2010 to
$188,118 in 2011. Over the past two years, reserves were increased
due to weaknesses in the economy that necessitated an increase in
reserves associated with impaired loans. During 2011, the level of
impaired loans has stabilized. Several loans with reserves were
eliminated through write-offs from the loan portfolio during the
third quarter of 2011. The reserve was further impacted by an
increase in loans carrying government guarantees. At September 30,
2011, the guaranteed portion of loans equaled 20.8 percent of total
loans compared to 18.1 percent at December 31, 2010. Net interest
income increased slightly from $2,148,654 in the third quarter of
2010 to $2,263,325 in 2011. A reduction in cost of deposits from
the third quarter of 2010 to 2011 contributed to the margin
improvement. Asset yields decreased from 5.28 percent to 5.09
percent from 2010 to 2011 due to the change in earning asset mix
from higher yielding loans to lower yielding deposits in other
banks. The cost of funds continued to decrease from 1.31 percent in
the third quarter of 2010 to 1.05 percent in the third quarter of
2011. Noninterest income increased 2.8 percent in 2011, primarily
due to an increase in revenues from the Company's insurance and
investment subsidiary. Noninterest expenses increased 9.7 percent
from $1,616,525 in the third quarter of 2010, to $1,773,472 in
2011. This increase primarily results from damages paid in the
settlement of a lawsuit arising from the ordinary operations of the
Company. The Company has no other liability under the settlement
agreement.
Loan loss reserves were $4,628,232 or 2.56 percent of total
loans as of September 30, 2011. Non-performing assets were 3.17
percent of total assets at September 30, 2011, compared to 2.26
percent on that date in 2010. At September 30, 2011, the allowance
for loan loss reserves equals 63 percent of impaired and
non-performing assets, net of government guarantees.
Total assets were $229,007,209 as of September 30, 2011, an
increase of 3.6 percent from $220,943,989 reported as of September
30, 2010. Total deposits were $188,299,291 at quarter-end 2011, a
4.7 percent increase from the $179,773,303 reported at the end of
the third quarter of 2010. Net loans increased 1.7 percent to
$176,116,287, compared to $173,197,531 at September 30, 2010.
Net income for the nine months ended September 30, 2011, was
$1,825,081 or $0.48 per diluted share, compared to $1,086,348, or
$0.27 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 advice 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)
September 30, December 31, September 30,
2011 2010 2010
------------- ------------- -------------
(unaudited) (unaudited)
Total assets $ 229,007 $ 213,652 $ 220,944
Total loans 180,745 178,478 178,980
Investments 37,866 26,448 32,022
Deposits 188,299 173,960 179,773
Borrowed funds 8,100 9,450 9,450
Stockholders' equity 30,382 28,644 28,395
Non-performing assets to total
assets 3.17% 3.19% 2.26%
Loans past due more than 90 days
to total loans 1.42% 0.00% 0.14%
Allowance for loan losses to
total loans 2.56% 3.74% 3.23%
Book value per common share $ 8.24 $ 7.73 $ 7.72
SURREY BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share amounts)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-------------------- --------------------
2011 2010 2011 2010
--------- --------- --------- ---------
Interest income $ 2,780 $ 2,759 $ 8,192 $ 8,336
Interest expense 517 610 1,633 1,874
Net interest income 2,263 2,149 6,559 6,462
Provision for loan losses (188) 637 67 1,841
Net interest income after
provision for loan losses 2,075 1,512 6,492 4,621
Noninterest income 598 582 1,768 2,002
Noninterest expense 1,773 1,617 5,306 4,910
Net income before taxes 900 477 2,954 1,713
Provision for income taxes 338 172 1,129 627
Net income 562 305 1,825 1,086
Preferred stock dividend declared 46 65 137 194
Net income available to common
shareholders $ 516 $ 240 $ 1,688 $ 892
Basic net income per share $ 0.16 $ 0.08 $ 0.53 $ 0.28
Diluted net income per share $ 0.15 $ 0.08 $ 0.48 $ 0.27
Return on average total assets * 0.99% 0.56% 1.09% 0.67%
Return on average total equity * 7.43% 4.16% 8.22% 5.00%
Yield on average interest earning
assets 5.09% 5.28% 5.14% 5.34%
Cost of funds 1.05% 1.31% 1.14% 1.34%
Net yield on average interest
earning assets 4.15% 4.11% 4.12% 4.14%
Overhead efficiency ratio 61.97% 59.20% 63.72% 58.01%
Net charge-offs
(recoveries)/average loans 0.02% 0.28% 1.18% 0.40%
* 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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