MOUNT AIRY, NC--(Marketwire - February 17, 2011) - Surrey Bancorp (the "Company") (
OTCBB:
SRYB), the holding company for Surrey Bank & Trust, today reported earnings
for the fourth quarter of 2010 and the full year.
For the quarter ended December 31, 2010, net income totaled $151,670 or
$0.02 per fully diluted share, compared with $302,924 or $0.07 per fully
diluted common share earned during the fourth quarter of 2009.
The decrease in earnings results from an increase in the provision for loan
losses. The provision for loan losses increased from $589,950 in the fourth
quarter of 2009 to $1,163,170 for the same period in 2010. The increase in
the loan loss provision results from a continued weakness in the economy
which necessitated an increase in reserves associated with impaired loans
and historical loss experience. Net interest income increased 6.4 percent
from $2,083,431 in the fourth quarter of 2009 to $2,215,689 for the same
period in 2010. The continued reduction of deposit costs during the fourth
quarter was largely responsible for the improvement in the margin.
Noninterest income decreased 4.7 percent to $737,470, compared to $773,755
reported for the quarter ended December 31, 2009, primarily due to reduced
revenue from service charges on deposit accounts. Noninterest expenses
decreased from $1,675,971 in the fourth quarter of 2009, to $1,571,162 in
the fourth quarter of 2010, or 6.3 percent. This decrease is due to the
reduction in the expenses relating to salaries and employee benefits.
For the year ended December 31, 2010, the Company reported net income of
$1,238,018, or $0.29 per fully diluted common share. This represents a 44.6
percent decrease in profitability from year-end 2009, when the Company
reported earnings of $2,232,294 or $0.58 per fully diluted common share.
The decrease in net income was attributable to earnings in the Bank's sales
finance subsidiary, which recorded tax-exempt life insurance proceeds of
$1,000,000 in the first quarter of 2009. Net interest income increased 13.9
percent from $7,620,899 in 2009 to $8,678,096 for the 2010 year-end. The
reduction of deposit costs during the year was largely responsible for the
improvement in the margin. The provision for loan losses increased from
$1,604,947 in 2009 to $3,003,748 in 2010. The annual increase in the loan
loss provision results from the same factors that lead to the increased
loss provision during the fourth quarter, increase in reserves associated
with impaired loans and historical loss experience. Noninterest income,
excluding the 2009 life insurance proceeds, increased 9.1 percent to
$2,739,125 compared to $2,511,411 reported for the year ended December 31,
2009. Gains on the sale of government guaranteed loans were primarily
responsible for the increase. Noninterest expenses decreased from
$6,583,745 in 2009, to $6,481,542 in 2010, or 1.5 percent. This decrease
was primarily due to reductions in salaries, employee benefits and FDIC
insurance premiums.
Loan loss reserves were $6,683,922 or 3.74 percent of total loans as of
December 31, 2010. Non-performing assets were 3.19 percent of total assets
at December 31, 2010, compared to 0.48 percent on that date in 2009. At
December 31, 2010, the allowance for loan loss reserves equals 68 percent
of impaired and non-performing assets, net of government guarantees.
Total assets were $213,652,484 as of December 31, 2010, a decrease of 1.5
percent from $216,949,782 reported as of December 31, 2009. Total deposits
were $173,960,073 at year-end 2010, a minor change from the $173,974,558
reported at the end of year of 2009. Net loans decreased 4.8 percent to
$171,794,247, compared to $180,442,154 at December 31, 2009.
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 UVest Financial Services, 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)
December 31, December 31,
2010 2009
------------ ------------
(unaudited)
Total assets $ 213,652 $ 216,950
Total loans 178,478 185,112
Investments 26,448 22,540
Deposits 173,960 173,975
Borrowed funds 9,450 12,950
Stockholders' equity 28,644 28,425
Non-performing assets to total assets 3.19% 0.48%
Loans past due more than 90 days to total loans 0.00% 0.00%
Allowance for loan losses to total loans 3.74% 2.52%
Book value per common share $ 7.73 $ 7.44
SURREY BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share amounts)
For the For the
Three Months Twelve Months
Ended Ended
December 31, December 31,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
Interest income $ 2,814 $ 2,786 $ 11,150 $ 10,847
Interest expense 598 703 2,472 3,226
Net interest income 2,216 2,083 8,678 7,621
Provision for loan losses 1,163 590 3,004 1,605
Net interest income after
provision for loan losses 1,053 1,493 5,674 6,016
Noninterest income 737 774 2,739 3,511
Noninterest expense 1,571 1,676 6,481 6,584
Net income before taxes 219 591 1,932 2,943
Provision for income taxes 67 288 694 711
Net income 152 303 1,238 2,232
Preferred stock dividend declared 107 66 301 258
Net income available to common
shareholders $ 45 $ 237 $ 937 $ 1,974
Basic net income per share $ 0.01 $ 0.07 $ 0.29 $ 0.62
Diluted net income per share $ 0.02 $ 0.07 $ 0.29 $ 0.58
Return on average total assets * 0.27% 0.57% 0.57% 1.07%
Return on average total equity * 2.07% 4.25% 4.26% 8.07%
Yield on average interest
earning assets 5.33% 5.44% 5.34% 5.45%
Cost of funds 1.26% 1.53% 1.32% 1.79%
Net yield on average interest
earning assets 4.19% 4.07% 4.15% 3.83%
Overhead efficiency ratio 53.20% 58.66% 56.77% 59.14%
Net charge-offs/average loans 0.15% 0.01% 0.55% 0.17%
* annualized for all periods presented
Contact Information: For additional information, please contact
Ted Ashby
CEO
Mark Towe
CFO
(336) 783-3900