Surrey Bancorp Reports Third Quarter Net Income of $735,883
MOUNT AIRY, NC--(Marketwired - Oct 24, 2013) - Surrey Bancorp
(PINKSHEETS: SRYB), the holding company for Surrey Bank &
Trust, today reported earnings for the third quarter of 2013.
For the quarter ended September 30, 2013, net income totaled
$735,883 or $0.18 per fully diluted share, compared with $774,843
or $0.19 per fully diluted common share earned during the third
quarter of 2012.
Earnings for the three months ended September 30, 2013, are 5.03
percent lower compared to the same period in 2012. The decrease is
the result of a reduction in net interest income. Net interest
income decreased from $2,347,448 in the third quarter of 2012 to
$2,246,952 in 2013. Asset yields decreased from 5.32 percent to
4.73 percent from 2012 to 2013 partially due to the change in the
mix of average earning assets. Average loans, the Company's highest
yielding assets, were 88.2 percent of total average earning assets
during the quarter ended September 30, 2012, compared to only 83.1
percent during the 2013 quarter ended. Conversely, lower yielding
deposits in other banks increased from an average of 9.5 percent of
total average earning assets in 2012 to 14.1 percent in 2013. Loan
yields were 6.00 percent in the third quarter of 2012 compared to
5.61 percent in the third quarter of 2013. Loan yields fell due to
the prolonged low rate environment and competition. While the cost
of deposits decreased from the third quarter of 2012, compared to
2013, the reduction was not enough to completely offset the lower
loan yields. The cost of funds decreased from 0.85 percent in the
third quarter of 2012 to 0.73 percent in the third quarter of 2013.
The provision for loan losses decreased from $41,384 in the third
quarter of 2012 to $12,317 in 2013. This decrease is due to a
reduction in gross loans in the third quarter of 2013 versus the
third quarter of 2012. This reduction offset an increase in charge
offs compared to the third quarter of 2012. Net charge offs were
$143,830 during the three months ended September 2013, compared to
$110,410 in the third quarter of 2012. At September 30, 2013, the
percentage of loans receiving pass credit risk grades was 97.8
percent, compared to 98.2 percent at December 31, 2012 and
September 30, 2012. Although credit quality decreased slightly over
the period, the portion of loans carrying government guarantees
increased. At September 30, 2013, the guaranteed portion of loans
equaled 24.9 percent of total loans, compared to 24.4 percent at
December 31, 2012 and 22.1 percent at September 30, 2012.
Noninterest income increased from $583,180 in the third quarter of
2012 to $613,162 in 2013. The increase results from revenue growth
in the bank's insurance subsidiary. Noninterest expense increased
slightly from $1,654,467 in the third quarter of 2012, to
$1,677,977 in 2013. This increase was primarily due to normal
salary adjustments.
Loan loss reserves were $3,299,860 or 1.81 percent of total
loans as of September 30, 2013. Non-performing assets were 1.66
percent of total assets at September 30, 2013, compared to 1.95
percent on that date in 2012. At September 30, 2013, the allowance
for loan loss reserves equaled 94 percent of impaired and
non-performing assets, net of government guarantees.
Total assets were $239,343,856 as of September 30, 2013, an
increase of 5.8 percent from $226,231,381 reported as of September
30, 2012. Total deposits were $193,695,070 at quarter-end 2013, a
5.6 percent increase from the $183,465,913 reported at the end of
the third quarter of 2012. Net loans decreased 2.6 percent to
$178,519,116, compared to $183,238,489 at September 30, 2012.
Net income for the nine months ended September 30, 2013, was
$2,188,502 or $0.52 per diluted share, compared to $1,806,481or
$0.43 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. The Bank has opened a Loan
Production Office at 1328 North Bridge Street in Elkin, North
Carolina.
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, 2013 |
|
|
December 31, 2012 |
|
|
September 30, 2012 |
|
|
|
(unaudited) |
|
|
|
|
|
(unaudited) |
|
Total
assets |
|
$ |
239,344 |
|
|
$ |
229,912 |
|
|
$ |
226,231 |
|
Total
loans |
|
|
181,819 |
|
|
|
176,981 |
|
|
|
186,972 |
|
Investments |
|
|
41,748 |
|
|
|
37,318 |
|
|
|
23,059 |
|
Deposits |
|
|
193,695 |
|
|
|
187,823 |
|
|
|
183,466 |
|
Borrowed funds |
|
|
7,750 |
|
|
|
7,750 |
|
|
|
7,750 |
|
Stockholders' equity |
|
|
34,303 |
|
|
|
32,237 |
|
|
|
31,950 |
|
Non-performing assets to total assets |
|
|
1.66 |
% |
|
|
1.84 |
% |
|
|
1.95 |
% |
Loans
past due more than 90 days to total loans |
|
|
0.00 |
% |
|
|
0.39 |
% |
|
|
0.00 |
% |
Allowance for loan losses to total loans |
|
|
1.81 |
% |
|
|
1.93 |
% |
|
|
2.00 |
% |
Book
value per common share |
|
$ |
8.59 |
|
|
$ |
8.01 |
|
|
$ |
7.93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SURREY BANCORP |
CONSOLIDATED FINANCIAL HIGHLIGHTS |
(Dollars in thousands, except per share amounts) |
|
|
|
For the Three Months Ended September 30, |
|
|
For the Nine Months Ended September 30, |
|
|
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
Interest income |
|
$ |
2,612 |
|
|
$ |
2,750 |
|
|
$ |
7,905 |
|
|
$ |
8,237 |
|
Interest expense |
|
|
365 |
|
|
|
403 |
|
|
|
1,147 |
|
|
|
1,275 |
|
Net
interest income |
|
|
2,247 |
|
|
|
2,347 |
|
|
|
6,758 |
|
|
|
6,962 |
|
Provision for loan losses |
|
|
12 |
|
|
|
41 |
|
|
|
148 |
|
|
|
780 |
|
Net
interest income after provision for loan losses |
|
|
2,235 |
|
|
|
2,306 |
|
|
|
6,610 |
|
|
|
6,182 |
|
Noninterest income |
|
|
613 |
|
|
|
583 |
|
|
|
2,068 |
|
|
|
1,815 |
|
Noninterest expense |
|
|
1,678 |
|
|
|
1,6543 |
|
|
|
5,199 |
|
|
|
5,131 |
|
Net
income before taxes |
|
|
1,170 |
|
|
|
1,235 |
|
|
|
3,479 |
|
|
|
2,866 |
|
Provision for income taxes |
|
|
434 |
|
|
|
460 |
|
|
|
1,291 |
|
|
|
1,060 |
|
Net
income |
|
|
736 |
|
|
|
775 |
|
|
|
2,188 |
|
|
|
1,806 |
|
Preferred stock dividend declared |
|
|
46 |
|
|
|
46 |
|
|
|
137 |
|
|
|
137 |
|
Net
income available to common shareholders |
|
$ |
690 |
|
|
$ |
729 |
|
|
$ |
2,051 |
|
|
$ |
1,669 |
|
Basic
net income per share |
|
$ |
0.19 |
|
|
$ |
0.21 |
|
|
$ |
0.58 |
|
|
$ |
0.47 |
|
Diluted net income per share |
|
$ |
0.18 |
|
|
$ |
0.19 |
|
|
$ |
0.52 |
|
|
$ |
0.43 |
|
Return on average total assets(1) |
|
|
1.25 |
% |
|
|
1.40 |
% |
|
|
1.24 |
% |
|
|
1.08 |
% |
Return on average total equity(1) |
|
|
8.64 |
% |
|
|
9.78 |
% |
|
|
8.76 |
% |
|
|
7.75 |
% |
Yield
on average interest earning assets |
|
|
4.73 |
% |
|
|
5.32 |
% |
|
|
4.83 |
% |
|
|
5.30 |
% |
Cost
of funds |
|
|
0.73 |
% |
|
|
0.85 |
% |
|
|
0.77 |
% |
|
|
0.90 |
% |
Net
yield on average interest earning assets |
|
|
4.07 |
% |
|
|
4.54 |
% |
|
|
4.13 |
% |
|
|
4.48 |
% |
Overhead efficiency ratio |
|
|
58.67 |
% |
|
|
56.45 |
% |
|
|
58.90 |
% |
|
|
58.46 |
% |
Net
charge-offs (recoveries)/average loans |
|
|
0.08 |
% |
|
|
0.06 |
% |
|
|
0.14 |
% |
|
|
0.52 |
% |
(1) Annualized for all periods presented.
For additional information, please contact Ted Ashby CEO or Mark
Towe CFO (336) 783-3900
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