Surrey Bancorp (Pink Sheets: SRYB), the holding company for Surrey Bank & Trust, recently reported net income for the final quarter of 2020 was up more than 30% over the same period a year earlier.
For the quarter ending Dec. 31, net income totaled $1,498,414, of 36 cents per share, compared with $1,129,170 or 27 cents per share during the final quarter of 2019.
Despite the strong fourth quarter, net income for the year was down.
Net income for the year was $4,578,161 or $1.10 per share, compared to a $4,913,391 or $1.18 per share, a decrease of 6.8%.
“The decrease in earnings results from a decrease in net interest income and an increase in the provision for loan losses,” the bank holding company said in announcing the results. “Net interest income decreased 4.9% from $13,462,474 for the year ended 2019 to $12,793,558 at year-end 2020. The decrease in net interest income is the result of the sudden decrease in interest rates due to the COVID-19 pandemic. Loan yields decreased from 5.51% in 2019 to 5.12% in 2020. The yield on interest earning assets decreased from 4.89% to 3.79% from 2019 to 2020.”
Bank officials said the bank’s participation in the federally backed Payroll Protection Program also had a negative effect on yield. While the loans to local businesses are 100% backed by the federal government, the interest rate Surrey earns is just 1%.
While the overall net income was down because of a drop in net interest income, the company said the opposite factor — a growth in net interest income, fueled the strong fourth quarter.
“The increase is due to the recognition of loan origination fees from the Small Business Administration’s Paycheck Protection Program” the bank said in its release. “PPP origination fees totaling $773,100 were recognized in the fourth quarter of 2020. The large increase in fee recognition was due to the forgiveness and payoff of the PPP loans in the fourth quarter. PPP loans totaling $24,775,780 were paid off in the fourth quarter of 2020.”
Total assets were $431,064,407 as of Dec. 31 an increase of 30.8% from $329,520,292 reported as of Dec. 31, 2019. Total deposits were $374,442,946 at year-end 2020, an increase of 35.5% from the $276,359,576 reported at the end of year of 2019. Net loans increased 8.8% to $253,906,500 on Dec. 31, compared to $233,271,790 at the end of 2019.
Source: https://www.mtairynews.com
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