MOUNT AIRY — Surrey Bancorp (the “Company”) (Pink Sheets: SRYB), the holding company for Surrey Bank & Trust (the “Bank”), recently reported earnings for the first quarter of 2017.
For the quarter ended March 31, net income totaled $947,725 or $0.23 per fully diluted common share, compared with $776,954 or $0.19 per fully diluted common share earned during the first quarter of 2016.
The increase in earnings results from a reduction in the provision for loan losses and an increase in noninterest income. The provision for loan losses decreased from $75,814 in the first quarter of 2016 to a recapture of loan losses of $186,663 in 2017. This decrease is due to recoveries net of charge offs of $125,360, combined with a reduction in outstanding loans at the end of the first quarter. Loans outstanding decreased from $210,674,340 at March 31, 2106, to $209,381,047 at March 31, 2017. Noninterest income increased from $538,557 in the first quarter of 2016 to $621,987 during the same period in 2017. The improvement was due to increases of $27,939 in insurance commissions from the Bank’s insurance subsidiary; $30,429 in increased fees on mortgage loans delivered to correspondence; and a reduction in losses on the sale of investments of $33,127 related to the sale of equity securities and mutual funds in 2016.
Net interest income decreased slightly from $2,695,401 in the first quarter of 2016 to $2,691,248 in 2017. The net interest margin decreased from 4.50 percent to 4.22 percent from 2016 to 2017, due to a combination of lower loan yields and a change in asset mix. Loan yields decreased from 5.49 percent in 2016 to 5.40 percent in 2017, partially due to the sale of the Bank’s sales finance company in the second quarter of 2016. Loan yields made up 87.6 percent of average interest earning assets in the first quarter of 2016 as opposed to 81.5 percent in the first quarter of 2017. The cost of funds decreased from 0.44 percent in the first quarter of 2016 to 0.39 percent in the first quarter of 2017 as non-interest bearing deposits made up a higher percentage of average deposits.
The allowance for loan loss reserves was $3,626,197 or 1.73 percent of total loans as of March 31, 2017. Non-performing assets were 0.47 percent of total assets at March 31, 2017, compared to 0.57 percent on that date in 2016. At March 31, 2017, the allowance equals 119 percent of impaired and non-performing assets, net of government guarantees.
Noninterest expenses increased 4.5 percent from $1,955,589 in the first quarter of 2016, to $2,043,173 in 2017. This increase was primarily due to professional fees paid in 2017 as compared to 2016. Professional fees increased from $17,703 in the first quarter of 2016 to $111,764 in 2017. The total for 2016 was reduced significantly by the recapture of legal expenses related to collection of government guaranteed loans.
Total assets as of March 31, 2017, were $282,215,303, an increase of 8.3 percent from $260,545,029 reported as of March 31, 2016. Total deposits were $236,425,858 at quarter-end 2017, a 9.3 percent increase from the
$216,280,991 reported at the end of the first quarter of 2016. Net loans decreased by 0.5 percent from $207,097,033, as of March 31, 2016, to $206,044,608 at the end of the first quarter of 2017.
Surrey Bancorp is the bank holding company for Surrey Bank & Trust (the “Bank”) and is located at 145 N. Renfro St., Mount Airy. The bank operates full service branch offices at 145 N. Renfro St., 1280 W. Pine St. and 2050 Rockford St. in Mount Airy. Full-service branch offices are also located at 653 S. Key St. in Pilot Mountain; 393 CC Camp Road, Elkin, and 940 Woodland Drive in Stuart, Virginia. The bank has opened a Loan Production Office at 717 Main St. in North Wilkesboro.
Surrey Bank & Trust is engaged in the sale of insurance and provides full-service brokerage and investment services through its wholly owned subsidiary Surrey Investment Services, Inc. The insurance division, dba SB&T Insurance, is located at 199 North Renfro Street in Mount Airy. The brokerage division which operates through an association with LPL Financial, is located at 145 North Renfro Street in Mount Airy.
Surrey Bank & Trust can be found online at www.surreybank.com.