MOUNT AIRY, N.C., Nov. 02, 2021 (GLOBE NEWSWIRE) — Surrey Bancorp, (Pink Sheets: SRYB), the holding company for Surrey Bank & Trust, today reported earnings for the third quarter of 2021.
For the quarter ended September 30, 2021, net income totaled $842,609 or $0.20 per fully diluted share, compared to $1,052,172 or $0.25 per fully diluted common share earned during the third quarter of 2020.
Net interest income decreased from $3,084,814 in the third quarter of 2020 to $2,872,567 in the third quarter of 2021. Interest income decreased from $3,360,362 in the third quarter of 2020 to $2,978,081 in the third quarter of 2021. The decrease is primarily due to a reduction in loan fees recognized by the Bank related to the Bank’s participation in the Small Business Administration’s Paycheck Protection Program (PPP). As a result, the overall yield on interest earning assets decreased from 3.51 percent to 2.72 percent from the third quarter of 2020 to the third quarter of 2021. In addition, a change in the earning asset mix reduced interest income. Higher yielding loans made up 72.3 percent of average interest earning assets in the third quarter of 2020 as opposed to 55.7 percent in the third quarter of 2021. Conversely, lower yielding interest-bearing deposits in other banks made up 37.6 percent of average interest earning assets in the third quarter of 2021 compared to 24.8 percent in the third quarter of 2020. The cost of funds decreased from 0.32 percent in the third quarter of 2020 to 0.10 percent in 2021. Interest expense decreased from $275,548 in the third quarter of 2020 to $105,514 in the third quarter of 2021 due to general rate decreases.
The provision for loan losses increased slightly from $196,073 in the third quarter of 2020 to $208,145 in 2021, a $12,072 increase. This is due to an increase in loan balances, net of government guarantees, from the end of the third quarter of 2020 compared to the end of third quarter of 2021. Loan loss reserves were $5,222,616 or 2.06 percent of total loans as of September 30, 2021. Non-performing assets were 0.60 percent of total assets at September 30, 2021, compared to 0.11 percent on that date in 2020. At September 30, 2021, the allowance for loan loss reserves equals 332 percent of impaired and non-performing assets, net of government guarantees.
Noninterest income decreased from $619,965 in the third quarter of 2020 to $541,222 in 2021, a 12.7 percent decrease. The decrease is due to the reduction of insurance commissions due to the sale of the Bank’s insurance subsidiary, SB&T Insurance, in the first quarter of 2021. Insurance commissions amounted to $216,490 in the third quarter of 2020 with no commission income in the third quarter of 2021. An increase in debit and credit card interchange fees helped offset the reduction in insurance commission income. Noninterest expenses decreased 1.9 percent from $2,163,334 in the third quarter of 2020, to $2,122,151 in 2021. This decrease was primarily due to decreases in salaries and benefits related to SB&T insurance.
Total assets were $473,754,080 as of September 30, 2021, an increase of 11.4 percent from $425,396,540 reported as of September 30, 2020. Total deposits were $415,241,266 at quarter-end 2021, a 12.8 percent increase from the $368,066,800 reported at the end of the third quarter of 2020. Net loans decreased to $248,542,066, or 10.5 percent, compared to $277,613,456, at September 30, 2020.
Net income for the nine months ended September 30, 2021, was $3,923,768 or $0.94 per diluted share, compared to $3,079,747 or $0.74 per diluted share, for the same period in 2020. The increase is primarily due to the gain on the sale of SB&T Insurance in the first quarter of 2021.
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, 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.
