Surrey Bancorp (Pink Sheets: SRYB), the holding company for Surrey Bank & Trust, on Thursday reported net income for the quarter which ended June 30 stood at $971,563, or 23 cents per share.
That represents a drop of nearly 17%, from $1,165,651, or 28 cents per share, during the same quarter in 2019.
The decrease in earnings stems from COVID-19 fallout, according to the company.
“Net interest income decreased from $3,338,262 in the second quarter of 2019 to $2,877,332 in the second quarter of 2020,” the bank holding company said in releasing its results. “The decrease in net interest income is the result of a sudden decrease in interest rates due to the COVID 19 pandemic.”
Other factors affecting the company, according to the firm, include:
• Average loans outstanding in the second quarter of 2020 were $268,196,488 compared to $242,438,661 in the second quarter of 2019;
• Loan yields decreased from 5.61% in the second quarter of 2019 to 4.72% in the same quarter of 2020.
• The yield on interest earning assets decreased from 5.05% to 3.57% from the second quarter of 2019 to the second quarter of 2020. In addition to the overall decrease in interest rates, lower yields were affected by the bank’s participation in the Small Business Administration’s Paycheck Protection Plan (PPP). The bank funded approximately $47,369,000 of PPP loans in the second quarter of 2020. These loans carry an interest rate of 1% and carry a 100% government guarantee.
• The cost of funds decreased from 0.49% in the second quarter of 2019 to 0.37% in 2020 due to general rate decreases.
• The provision for loan losses increased from $146,685 in the second quarter of 2019 to a provision of $260,051 in 2020, a $113,366 increase. This increase is due to the estimated economic impact of the pandemic.
Net income for the six months ending June 30 was $2,027,575 or 49 cents per share, compared to $2,107,415 or 51 cents share, for the same period in 2019.
Surrey Bancorp is the bank holding company for Surrey Bank & Trust and is located at 145 North Renfro Street, Mount Airy. 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.
Source: https://www.mtairynews.com