Surrey Bancorp Reports First Quarter Net Income of $676,400
MOUNT AIRY, NC--(Marketwired - Apr 22, 2014) - Surrey Bancorp
(the "Company") (PINKSHEETS: SRYB), the holding company for Surrey
Bank & Trust (the "Bank"), today reported earnings for the
first quarter of 2014.
For the quarter ended March 31, 2014, net income totaled
$676,400 or $0.16 per fully diluted common share, compared with
$651,776 or $0.16 per fully diluted common share earned during the
first quarter of 2013.
The increase in net income results from a reduction in the
provision for loan losses. The provision for loan losses decreased
from $42,394 in the first quarter of 2013 to a recapture of $62,362
in 2014. The recapture of reserve is partially due to a reduction
in gross loans in the first quarter of 2014, while gross loans
increased in the first quarter of 2013. Gross loans decreased
$898,998 from December 31, 2013 to March 31, 2014. During the same
period in 2013 gross loans increased $4,212,276. In addition the
Bank experienced net charge off recoveries in the first quarter of
2014. Net recoveries amounted to $51,067 in 2014 compared to net
charge offs of $103,457 in the first quarter of 2013, a $154,524
difference. Asset yields decreased from 4.93 percent to 4.74
percent from 2013 to 2014 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 5.93
percent in the first quarter of 2013 to 5.75 percent in the first
quarter of 2014. Loan yields fell due to the prolonged low rate
environment and competition. A reduction in the cost of deposits
from the first quarter of 2013 to 2014 was unable to offset the
tightening asset yields. The cost of funds decreased from 0.78
percent in the first quarter of 2013 to 0.68 percent in the first
quarter of 2014.
The allowance for loan loss reserves was $3,364,054 or 1.85
percent of total loans as of March 31, 2014. Non-performing assets
were 1.68 percent of total assets at March 31, 2014, compared to
1.74 percent on that date in 2013. At March 31, 2014, the allowance
equals 86 percent of impaired and non-performing assets, net of
government guarantees.
Noninterest income decreased from $658,376 in the first quarter
2013 to $581,928 in 2014. The decrease results from a reduction in
service charges on deposit accounts and a reduction in contingency
bonus revenue from the Bank's insurance subsidiary. Noninterest
expenses increased slightly from $1,841,826 in the first quarter of
2013, to $1,867,387 in 2014. Salaries and employee benefits
accounted for most of the change increasing from $961,121 in 2013
to $1,009,500 in 2014. This increase was due to normal salary
adjustments. The increase in payroll cost was partially offset by a
reduction in expenses associated with foreclosed assets which
decreased from $42,335 in 2013 to a gain of $894 in 2014.
Total assets as of March 31, 2014, were $250,389,844, an
increase of 3.8 percent from $241,131,017 reported as of March 31,
2013. Total deposits were $205,115,560 at quarter-end 2014, a 5.6
percent increase from the $194,175,405 reported at the end of the
first quarter of 2013. Net loans increased to $179,027,735 at the
end of the first quarter of 2014, compared to $177,964,603, as of
March 31, 2013.
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. The Bank has opened a Loan
Production Office at 1328 North Bridge Street in Elkin, North
Carolina.
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.
|
|
CONSOLIDATED FINANCIAL HIGHLIGHTS |
|
(Dollars in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31 2014 |
|
|
December 31 2013 |
|
|
March 31 2013 |
|
|
|
(unaudited) |
|
|
|
|
|
(unaudited) |
|
Total
assets |
|
$ |
250,390 |
|
|
$ |
240,919 |
|
|
$ |
241,131 |
|
Total
loans |
|
|
182,392 |
|
|
|
183,284 |
|
|
|
181,307 |
|
Investments |
|
|
52,507 |
|
|
|
40,890 |
|
|
|
44,792 |
|
Deposits |
|
|
205,116 |
|
|
|
195,801 |
|
|
|
194,175 |
|
Borrowed funds |
|
|
7,750 |
|
|
|
7,750 |
|
|
|
11,494 |
|
Stockholders' equity |
|
|
34,850 |
|
|
|
34,218 |
|
|
|
32,862 |
|
Non-performing assets to total assets |
|
|
1.66 |
% |
|
|
1.58 |
% |
|
|
1.65 |
% |
Loans
past due more than 90 days to total loans |
|
|
0.03 |
% |
|
|
0.02 |
% |
|
|
0.12 |
% |
Allowance for loan losses to total loans |
|
|
1.85 |
% |
|
|
1.84 |
% |
|
|
1.85 |
% |
Book
value per common share |
|
$ |
8.74 |
|
|
$ |
8.57 |
|
|
$ |
8.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED FINANCIAL HIGHLIGHTS |
|
(Dollars in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, |
|
|
|
2014 |
|
|
2013 |
|
Interest income |
|
$ |
2,633 |
|
|
$ |
2,645 |
|
Interest expense |
|
|
347 |
|
|
|
385 |
|
Net
interest income |
|
|
2,286 |
|
|
|
2,260 |
|
Provision for loan losses |
|
|
(62 |
) |
|
|
42 |
|
Net
interest income after provision for loan losses |
|
|
2,348 |
|
|
|
2,218 |
|
Noninterest income |
|
|
582 |
|
|
|
658 |
|
Noninterest expense |
|
|
1,868 |
|
|
|
1,842 |
|
Net
income before taxes |
|
|
1,062 |
|
|
|
1,034 |
|
Provision for income taxes |
|
|
386 |
|
|
|
382 |
|
Net
income |
|
|
676 |
|
|
|
652 |
|
Preferred stock dividend declared |
|
|
45 |
|
|
|
45 |
|
Net
income available to common shareholders |
|
$ |
631 |
|
|
$ |
607 |
|
Basic
net income per share |
|
$ |
0.18 |
|
|
$ |
0.17 |
|
Diluted net income per share |
|
$ |
0.16 |
|
|
$ |
0.16 |
|
Return on average total assets (1) |
|
|
1.11 |
% |
|
|
1.11 |
% |
Return on average total equity (1) |
|
|
7.84 |
% |
|
|
8.01 |
% |
Yield
on average interest earning assets |
|
|
4.74 |
% |
|
|
4.93 |
% |
Cost
of funds |
|
|
0.68 |
% |
|
|
0.78 |
% |
Net
yield on average interest earning assets |
|
|
4.12 |
% |
|
|
4.21 |
% |
Overhead efficiency ratio |
|
|
65.12 |
% |
|
|
63.12 |
% |
Net
charge-offs/average loans |
|
|
(0.03 |
) |
|
|
0.06 |
% |
|
|
|
|
|
|
|
|
|
(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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