Surrey Bancorp (the "Company") (PINKSHEETS: SRYB), the holding
company for Surrey Bank & Trust, today reported earnings for
the second quarter of 2012.
For the quarter ended June 30, 2012, net income totaled $367,581
or $0.09 per fully diluted share, compared with $711,177 or $0.19
per fully diluted common share earned during the second quarter of
2011.
Earnings for the three months ended June 30, 2012, are
approximately 48.3 percent lower than for the same period in 2011.
The decrease results from an increase in the provision for loan
losses. The provision increased from a recapture of $279,825 in the
second quarter of 2011 to a provision of $671,770 in 2012. This
increase is due to an increase in net loan charge offs during the
second quarter of 2012 compared to the second quarter of 2011. Net
loan charge offs in the second quarter of 2012 amounted to $771,324
compared to net recoveries of $99,278 in 2011, a difference of
$870,602. Net interest income increased from $2,118,802 in the
second quarter of 2011 to $2,294,168 in 2012. A reduction in the
cost of deposits from the second quarter of 2011 to 2012
contributed to the margin improvement. Asset yields increased from
4.97 percent to 5.27 percent from 2011 to 2012 due to the change in
earning asset mix from lower yielding deposits in other banks to
higher yielding loans. The cost of funds continued to decrease from
1.14 percent in the second quarter of 2011 to 0.89 percent in the
second quarter of 2012. Noninterest income remained relatively flat
decreasing 0.7 percent in 2012. Noninterest expenses decreased 9.9
percent from $1,802,453 in the second quarter of 2011, to
$1,623,208 in 2012. This decrease is primarily attributable to
decreased costs associated with foreclosed assets. Foreclosed asset
expense decreased from $120,908 in the second quarter of 2011 to a
net income of $936 in 2012.
Loan loss reserves were $3,802,204 or 2.12 percent of total
loans as of June 30, 2012. Non-performing assets were 1.9 percent
of total assets at June 30, 2012, compared to 2.2 percent on that
date in 2011. At June 30, 2012, the allowance for loan loss
reserves equals 90 percent of impaired and non-performing assets,
net of government guarantees.
Total assets were $220,164,691 as of June 30, 2012, a decrease
of 3.6 percent from $228,344,483 reported as of June 30, 2011.
Total deposits were $178,640,380 at quarter-end 2012, a 4.8 percent
decrease from the $187,550,998 reported at the end of the second
quarter of 2011. Net loans increased 1.8 percent to $175,177,109,
compared to $172,005,516, at June 30, 2011.
Net income for the six months ended June 30, 2012, was
$1,031,638 or $0.25 per diluted share, compared to $1,263,368 or
$0.33 per diluted share, for the same period in 2011.
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,
2012 2011 2011
(unaudited) (unaudited)
Total assets $ 220,165 $ 224,728 $ 228,344
Total loans 178,979 179,345 176,474
Investments 22,984 34,784 41,370
Deposits 178,640 183,938 187,551
Borrowed funds 7,750 8,100 9,100
Stockholders' equity 31,204 30,227 29,845
Non-performing assets to total
assets 1.94% 2.20% 2.22%
Loans past due more than 90 days
to total loans 0.41% 0.03% 0.04%
Allowance for loan losses to total
loans 2.12% 2.16% 2.53%
Book value per common share (1) $ 7.72 $ 7.45 $ 7.35
SURREY BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share amounts)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
-------------------- ------------------
2012 2011 2012 2011
--------- --------- -------- --------
Interest income $ 2,716 $ 2,670 $ 5,486 $ 5,411
Interest expense 422 551 872 1,116
Net interest income 2,294 2,119 4,614 4,295
Provision for loan losses 672 (280) 739 (121)
Net interest income after
provision for loan losses 1,622 2,399 3,875 4,416
Noninterest income 572 576 1,232 1,170
Noninterest expense 1,623 1,803 3,477 3,533
Net income before taxes 571 1,172 1,630 2,053
Provision for income taxes 203 461 599 790
Net income 368 711 1,031 1,263
Preferred stock dividend declared 46 46 91 91
Net income available to common
shareholders $ 322 $ 665 $ 940 $ 1,172
Basic net income per share (1) $ 0.09 $ 0.19 $ 0.27 $ 0.33
Diluted net income per share (1) $ 0.09 $ 0.17 $ 0.25 $ 0.30
Return on average total assets (2) 0.66% 1.26% 0.92% 1.14%
Return on average total equity (2) 4.74% 9.60% 6.70% 8.62%
Yield on average interest earning
assets 5.27% 4.97% 5.29% 5.16%
Cost of funds 0.89% 1.14% 0.92% 1.19%
Net yield on average interest
earning assets 4.45% 3.95% 4.45% 4.10%
Overhead efficiency ratio 56.63% 66.89% 59.47% 64.65%
Net charge-offs
(recoveries)/average loans 0.43% (0.06)% 0.46% 1.16%
(1) The 2011 figures are adjusted for a common stock split distributed in
the form of a 10% common stock dividend declared in November 2011.
(2) 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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