Surrey Bancorp (the "Company"), (PINKSHEETS: SRYB), the holding
company for Surrey Bank & Trust, today reported earnings for
the second quarter of 2013.
For the quarter ended June 30, 2013, net income totaled $800,843
or $0.19 per fully diluted share, compared with $367,581 or $0.09
per fully diluted common share earned during the second quarter of
2012.
Earnings for the three months ended June 30, 2013, are
approximately 117.9 percent higher than for the same period in
2012. The increase results from a reduction in the provision for
loan losses and an increase in noninterest income. The provision
for loan losses decreased from $671,770 in the second quarter of
2012 to a provision of $93,402 in 2013. This decrease is due to a
reduction in net loan charge offs from $771,374 in the second
quarter of 2012 to $4,064 in the second quarter of 2013. At June
30, 2013, the percentage of loans receiving pass credit risk grades
was 98.3 percent, compared to 98.2 percent at December 31, 2012 and
97.9 percent at June 30, 2012. Credit quality was further enhanced
by an increase in loans carrying government guarantees. At June 30,
2013, the guaranteed portion of loans equaled 25.1 percent of total
loans compared to 24.4 percent at December 31, 2012 and 22.5
percent at June 30, 2012. Noninterest income increased due to a
gain on the sale of a government guaranteed loan. The gain of
$229,130 increased noninterest income from $572,251 in the second
quarter 2012 to $796,643 in 2013.
Net interest income decreased from $2,294,168 in the second
quarter of 2012 to $2,251,138 in 2013. Asset yields decreased from
5.27 percent to 4.83 percent from 2012 to 2013 partially due to the
change in average earning asset mix from higher yielding loans to
lower yielding deposits in other banks. Loan yields also decreased
from 6.01 percent in the second quarter of 2012 to 5.71 percent in
the second quarter of 2013. Loan yields fell due to the prolonged
low rate environment and competition. A reduction in the cost of
deposits from the second quarter of 2012 to 2013 was unable to
offset the lower asset yields. The cost of funds decreased from
0.89 percent in the second quarter of 2012 to 0.80 percent in the
second quarter of 2013. Noninterest expenses increased slightly
from $1,623,208 in the second quarter of 2012, to $1,678,757 in
2013. Salaries and employee benefits accounted for most of the
change increasing from $861,138 in 2012 to $910,375 in 2013. This
increase was primarily due to normal salary adjustments
Loan loss reserves were $3,431,373 or 1.87 percent of total
loans as of June 30, 2013. Non-performing assets were 1.55 percent
of total assets at June 30, 2013, compared to 1.94 percent on that
date in 2012. At June 30, 2013, the allowance for loan loss
reserves equals 91 percent of impaired and non-performing assets,
net of government guarantees.
Total assets were $234,574,115 as of June 30, 2013, an increase
of 6.5 percent from $220,164,691 reported as of June 30, 2012.
Total deposits were $190,147,848 at quarter-end 2013, a 6.4 percent
increase from the $178,640,380 reported at the end of the second
quarter of 2012. Net loans increased 3.0 percent to $180,450,435,
compared to $175,177,109, at June 30, 2012.
Net income for the six months ended June 30, 2013, was
$1,452,619 or $0.35 per diluted share, compared to $1,031,638 or
$0.25 per diluted share, for the same period in 2012.
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,
2013 2012 2012
(unaudited) (unaudited)
Total assets $ 234,574 $ 229,912 $ 220,165
Total loans 183,882 176,981 178,979
Investments 34,980 37,318 22,984
Deposits 190,148 187,823 178,640
Borrowed funds 7,750 7,750 7,750
Stockholders' equity 33,599 32,237 31,204
Non-performing assets to total
assets 1.55% 1.84% 1.94 %
Loans past due more than 90 days
to total loans 0.35% 0.39% 0.41 %
Allowance for loan losses to
total loans 1.87% 1.93% 2.12 %
Book value per common share $ 8.39 $ 8.01 $ 7.72
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,
------------------------ ------------------------
2013 2012 2013 2012
----------- ----------- ----------- -----------
Interest income $ 2,648 $ 2,716 $ 5,293 $ 5,486
Interest expense 397 422 782 872
Net interest income 2,251 2,294 4,511 4,614
Provision for loan
losses 93 672 136 739
Net interest income
after provision for
loan losses 2,158 1,622 4,375 3,875
Noninterest income 797 572 1,455 1,232
Noninterest expense 1,679 1,623 3,520 3,477
Net income before taxes 1,276 571 2,310 1,630
Provision for income
taxes 475 203 857 599
Net income 801 368 1,4533 1,031
Preferred stock dividend
declared 46 46 91 91
Net income available to
common shareholders $ 755 $ 322 $ 1,362 $ 940
Basic net income per
share $ 0.21 $ 0.09 $ 0.38 $ 0.27
Diluted net income per
share $ 0.19 $ 0.09 $ 0.35 $ 0.25
Return on average total
assets(1) 1.36% 0.66% 1.23% 0.92%
Return on average total
equity(1) 9.62% 4.74% 8.82% 6.70%
Yield on average
interest earning assets 4.83% 5.27% 4.88% 5.29%
Cost of funds 0.80% 0.89% 0.79% 0.92%
Net yield on average
interest earning assets 4.11% 4.45% 4.16% 4.45%
Overhead efficiency
ratio 55.08% 56.63% 59.01% 59.47%
Net charge-offs
(recoveries)/average
loans 0.00% 0.43% 0.06% 0.46%
(1) 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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