MOUNT AIRY, N.C., July 25, 2019 (GLOBE NEWSWIRE) -- Surrey Bancorp (the “Company”), (Pink Sheets: SRYB), the holding company for Surrey Bank & Trust, today reported earnings for the second quarter of 2019.
For the quarter ended June 30, 2019, net income totaled $1,165,651 or $0.28 per fully diluted share, compared to $1,182,572 or $0.28 per fully diluted common share earned during the second quarter of 2018.
The decrease in earnings results from an increase in the provision for loan losses and noninterest expense which offset an increase in net interest income.
Net interest income increased from $3,086,898 in the second quarter of 2018 to $3,338,262 in the second quarter of 2019. The increase in net interest income is primarily due to loan growth. Average loans outstanding in the second quarter of 2019 amounted to $242,438,661 compared to $230,566,577 in the second quarter of 2018. Loan yields increased from 5.49 percent in the second quarter of 2018 to 5.61 percent in the same quarter of 2019. Overall interest earning asset yields increased from 4.90 percent to 5.05 percent from the second quarter of 2018 to the second quarter of 2019. These improved yields are due to a general increase in interest rates. The cost of funds increased from 0.39 percent in the second quarter of 2018 to 0.49 percent in 2019. Increases in certificate of deposit rates account for the increase. Certificate of deposits average rate increased from 0.87 percent in the second quarter of 2018 to 1.39 percent in the second quarter of 2019.
The provision for loan losses increased from $36,221 in the second quarter of 2018 to a provision of $146,685 in 2019, a $110,464 increase. This increase is due to loan growth.
Noninterest income increased slightly from $608,002 in the second quarter of 2018 to $623,511 in 2019. Increases in other service charges and fees and insurance commissions offset the loss of revenue from the Company’s brokerage business which was sold in late 2018. Noninterest expenses increased 7.6 percent from $2,128,307 in the second quarter of 2018, to $2,290,837 in 2019. This increase was primarily due to increases data processing fees, professional fees and cost associated with information security administration.
Loan loss reserves were $4,487,523 or 1.83 percent of total loans as of June 30, 2019. Non-performing assets were 1.41 percent of total assets at June 30, 2019, compared to 0.27 percent on that date in 2018. At June 30, 2019, the allowance for loan loss reserves equals 194 percent of impaired and non-performing assets, net of government guarantees.
Total assets were $315,430,610 as of June 30, 2019, an increase of 3.4 percent from $305,198,303 reported as of June 30, 2018. Total deposits were $263,758,257 at quarter-end 2019, a 2.7 percent increase from the $256,889,092 reported at the end of the second quarter of 2018. Net loans increased to $241,731,085, or 5.3 percent, compared to $229,561,379, at June 30, 2018.
Net income for the six months ended June 30, 2019, was $2,107,415 or $0.51 per diluted share, compared to $2,245,847 or $0.54 per diluted share, for the same period in 2018.
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, 393 CC Camp Road in Elkin and 1096 Main Street in North Wilkesboro, North Carolina and 940 Woodland Drive in Stuart, Virginia.
Surrey Bank & Trust is engaged in the sale of insurance through its wholly owned subsidiary Surrey Investment Services, Inc. The insurance agency, dba SB&T Insurance, is located at 199 North Renfro Street in Mount Airy.
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 reflect management's current beliefs as to the expected outcomes of future events and are not guarantees of future performance. These statements involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. As such, actual results and outcomes may materially differ from what may be expressed or forecast in such forward-looking statements. Factors that could cause a difference include, among others: changes in the national and local economies or market conditions; changes in interest rates, deposit levels, loan demand and asset quality, including real estate and other collateral values; changes in banking regulations and accounting principles, policies or guidelines; and the impact of competition from traditional or new sources. These and other factors that may emerge could cause decisions and actual results to differ materially from current expectations. Surrey Bancorp takes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this press release.
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share amounts) |
| June 30, 2019 | December 31, 2018 | June 30, 2018 | ||||||||||
| (unaudited) | (audited) | (unaudited) | ||||||||||
| Total assets | $ | 315,431 | $ | 309,150 | $ | 305,198 | ||||||
| Total loans | 246,219 | 232,617 | 233,446 | |||||||||
| Investments | 47,288 | 55,428 | 51,118 | |||||||||
| Deposits | 263,758 | 259,378 | 256,889 | |||||||||
| Stockholders’ equity | 46,467 | 45,150 | 43,485 | |||||||||
| Non-performing assets to total assets | 1.41 | % | 1.43 | % | 0.27 | % | ||||||
| Loans past due more than 90 days to total loans | 0.00 | % | 0.01 | % | 0.07 | % | ||||||
| Allowance for loan losses to total loans | 1.83 | % | 1.81 | % | 1.67 | % | ||||||
| Tangible book value per common share | $ | 10.83 | $ | 10.49 | $ | 10.11 | ||||||
| Common shares outstanding | 4,167,933 | 4,167,633 | 4,167,633 | |||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share amounts) |
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Interest income | $ | 3,661 | $ | 3,325 | $ | 7,204 | $ | 6,708 | ||||||||
| Interest expense | 323 | 238 | 620 | 464 | ||||||||||||
| Net interest income | 3,338 | 3,087 | 6,584 | 6,244 | ||||||||||||
| Provision for loan losses | 146 | 36 | 209 | 86 | ||||||||||||
| Net interest income after provision for loan losses | 3,192 | 3,051 | 6,375 | 6,158 | ||||||||||||
| Noninterest income | 624 | 608 | 1,253 | 1,121 | ||||||||||||
| Noninterest expense | 2,291 | 2,128 | 4,679 | 4,373 | ||||||||||||
| Net income before taxes | 1,525 | 1,531 | 2,949 | 2,906 | ||||||||||||
| Provision for income taxes | 359 | 348 | 842 | 660 | ||||||||||||
| Net income | 1,166 | 1,183 | 2,107 | 2,246 | ||||||||||||
| Preferred stock dividend declared | - | - | - | 6 | ||||||||||||
| Net income available to common shareholders | $ | 1,166 | $ | 1,183 | $ | 2,107 | $ | 2,240 | ||||||||
| Basic net income per share | $ | 0.28 | $ | 0.29 | $ | 0.51 | $ | 0.58 | ||||||||
| Diluted net income per share | $ | 0.28 | $ | 0.28 | $ | 0.51 | $ | 0.54 | ||||||||
| Return on average total assets (1) | 1.49 | % | 1.60 | % | 1.36 | % | 1.53 | % | ||||||||
| Return on average total equity (1) | 10.10 | % | 10.94 | % | 9.16 | % | 10.48 | % | ||||||||
| Yield on average interest earning assets | 5.05 | % | 4.90 | % | 5.05 | % | 4.97 | % | ||||||||
| Cost of funds | 0.49 | % | 0.39 | % | 0.48 | % | 0.38 | % | ||||||||
| Net yield on average interest earning assets | 4.61 | % | 4.55 | % | 4.61 | % | 4.63 | % | ||||||||
| Overhead efficiency ratio | 57.82 | % | 57.60 | % | 59.38 | % | 59.38 | % | ||||||||
| Net charge-offs (recoveries)/average loans | (0.01 | )% | 0.00 | % % | (0.04 | )% | 0.02 | % | ||||||||
(1) Annualized for all periods presented.
For additional information, please contact
Ted Ashby, CEO, or Mark Towe, CFO
(336) 783-3900
