MOUNT AIRY, N.C., July 28, 2022 (GLOBE NEWSWIRE) -- Surrey Bancorp (the “Company”), (Pink Sheets: SRYB), the holding company for Surrey Bank & Trust (the “Bank”), today reported earnings for the second quarter of 2022.
For the quarter ended June 30, 2022, net income totaled $1,557,682 or $0.37 per fully diluted share, compared to $1,093,784 or $0.26 per fully diluted common share earned during the second quarter of 2021.
The increase in earnings results from a slight increase in the net interest income and the recapture of the provision for loan losses.
Net interest income increased from $3,270,663 in the second quarter of 2021 to $3,385,534 in the second quarter of 2022. The increase in net interest income is a combination of an increase in interest income and a reduction in interest expense. Interest income increased from $3,393,790 in the second quarter of 2021 to $3,470,518 in the second quarter of 2022. The increase is primarily due to an increase in the fed funds rate. Interest income from deposits with banks increased from $35,336 in the second quarter of 2021 to $434,171 in 2022. Interest income and fees on loans decreased from $3,322,262 in the second quarter of 2021 to $3,008,292 in 2022. The decrease results from a reduction of loan fees recognized by the Bank related to the Bank’s participation in the Small Business Administration’s Paycheck Protection Program (PPP). In the second quarter of 2021 the Bank recognized $164,444 of PPP loan fees compared to only $7,462 in the second quarter of 2022. Interest expense decreased from $123,127 in the second quarter of 2021 to $84,984 in the second quarter of 2022. The overall yield on interest earning assets decreased from 3.11 percent to 2.97 percent from the second quarter of 2021 to the second quarter of 2022 due to a change in the earning asset mix. Higher yielding loans made up 57.1 percent of average interest earning assets in the second quarter of 2021 as opposed to 50.9 percent in the second quarter of 2022. Conversely, lower yielding interest bearing deposits in other banks made up 42.6 percent of average interest earning assets in the second quarter of 2022 compared to 35.5 percent in the second quarter of 2021. The cost of funds decreased from 0.12 percent in the second quarter of 2021 to 0.08 percent in 2022.
The provision for loan losses decreased from $188,616 in the second quarter of 2021 to a recapture of $414,965 in 2022, a $603,581 decrease. The 2022 recapture results from a trend in loan charge-off recoveries and a reduction in environmental factors related to the COVID 19 pandemic. Net recoveries in the second quarter of 2022 were $28,771, compared net charge offs of $19,888 during the second quarter of 2021. The pandemic factors decreased due to reduced cases of the virus and the reduced impact of the pandemic on the economy.
Noninterest income increased from $501,064 in the second quarter of 2021 to $593,876 in 2022, an 18.5 percent increase. The increase is due to increases in deposit account service charges and other service charges and fees. Noninterest expenses increased 9.7 percent from $2,169,527 in the second quarter of 2021, to $2,381,293 in 2022. This increase was primarily due to increases in salaries and benefits, professional fees and other expenses.
Loan loss reserves were $4,564,687 or 1.89 percent of total loans as of June 30, 2022. Non-performing assets were 0.45 percent of total assets at June 30, 2022, compared to 0.64 percent on that date in 2021. At June 30, 2022, the allowance for loan loss reserves equals 345 percent of impaired and non-performing assets, net of government guarantees.
Total assets were $492,808,490 as of June 30, 2022, an increase of 4.9 percent from $469,698,272 reported as of June 30, 2021. Total deposits were $431,232,422 at quarter-end 2022, a 24.2 percent increase from the $347,135,297 reported at the end of the second quarter of 2021. Net loans decreased to $236,914,460, or 13.9 percent, compared to $275,186,324, at June 30, 2021.
Net income for the six months ended June 30, 2022, was $3,045,185 or $0.73 per diluted share, compared to $3,081,159 or $0.74 per diluted share, for the same period in 2021.
About Surrey Bancorp
Surrey Bancorp is the bank holding company for Surrey Bank & Trust and is located at 145 North Renfro Street, Mount Airy, North Carolina. The Bank operates full-service branch offices at 145 North Renfro Street, and 2050 Rockford Street in Mount Airy and a limited-service branch at 1280 West Pine 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.
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, 2022 | December 31, 2021 | June 30, 2021 | ||||||||||
(unaudited) | (audited) | (unaudited) | ||||||||||
Total assets | $ | 492,808 | $ | 480,535 | $ | 461,830 | ||||||
Total loans | 240,970 | 251,191 | 247,002 | |||||||||
Investments | 230,349 | 209,296 | 194,259 | |||||||||
Deposits | 431,232 | 422,053 | 403,220 | |||||||||
Stockholders’ equity | 55,288 | 52,959 | 52,478 | |||||||||
Non-performing assets to total assets | 0.45 | % | 0.58 | % | 0.64 | % | ||||||
Loans past due more than 90 days to total loans | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
Allowance for loan losses to total loans | 1.89 | % | 2.11 | % | 2.03 | % | ||||||
Tangible book value per common share | $ | 12.91 | $ | 12.28 | $ | 12.20 |
CONSOLIDATED FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share amounts) |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Interest income | $ | 3,470 | $ | 3,394 | $ | 6,830 | $ | 6,935 | ||||||||
Interest expense | 85 | 123 | 173 | 272 | ||||||||||||
Net interest income | 3,385 | 3,271 | 6,657 | 6,663 | ||||||||||||
Provision for loan losses | (415 | ) | 189 | (1,077 | ) | 118 | ||||||||||
Net interest income after provision for loan losses | 3,800 | 3,082 | 7,734 | 6,545 | ||||||||||||
Noninterest income | 594 | 501 | 969 | 1,921 | ||||||||||||
Noninterest expense | 2,381 | 2,169 | 4,767 | 4,498 | ||||||||||||
Net income before taxes | 2,013 | 1,414 | 3,936 | 3,968 | ||||||||||||
Provision for income taxes | 455 | 320 | 891 | 887 | ||||||||||||
Net income | 1,558 | 1,094 | 3,045 | 3,081 | ||||||||||||
Basic net income per share | $ | 0.37 | $ | 0.26 | $ | 0.73 | $ | 0.74 | ||||||||
Diluted net income per share | $ | 0.37 | $ | 0.26 | $ | 0.73 | $ | 0.74 | ||||||||
Return on average total assets | 1.26 | % | 0.95 | % | 1.25 | % | 1.36 | % | ||||||||
Return on average total equity | 11.37 | % | 8.36 | % | 11.25 | % | 11.89 | % | ||||||||
Yield on average interest earning assets | 2.97 | % | 3.11 | % | 2.94 | % | 3.23 | % | ||||||||
Cost of funds | 0.08 | % | 0.12 | % | 0.08 | % | 0.14 | % | ||||||||
Net yield on average interest earning assets | 2.90 | % | 2.97 | % | 2.86 | % | 3.10 | % | ||||||||
Overhead efficiency ratio | 59.84 | % | 57.52 | % | 62.51 | % | 52.40 | % | ||||||||
Net charge-offs (recoveries)/average loans | -0.01 | % | 0.01 | % | -0.14 | % | 0.00 | % |
¹ Annualized for all periods presented.
For additional information, please contact
Ted Ashby, CEO, or Mark Towe, CFO
(336) 783-3900
![](https://ml.globenewswire.com/media/MDlkOGRmMTgtOGQyNS00NDY5LWIwNzAtMTg1MTM2NzVhMTlmLTEwOTc5MDI=/tiny/Surrey-Bancorp.png)