Surrey Bancorp (Pink Sheets: SRYB), the holding company for Surrey Bank & Trust, last week reported second quarter 2021 were up by more than 10%.
For the quarter ending June 30, net income totaled $1,093,784 or 26 cents per fully diluted share, compared to $971,563 or 23 cents per share earned during the second quarter of 2020.
The increase in earnings resulted from an increase in the net interest income, according to the company.
Net interest income increased from $2,877,332 in the second quarter of 2020 to $3,270,663 in the second quarter of 2021. 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 $3,174,922 in the second quarter of 2020 to $3,393,790 in the second quarter of 2021. The increase is primarily due to loan fees recognized by the bank related to the bank’s participation in the Small Business Administration’s Paycheck Protection Program (PPP) and a decrease in deferred loan cost associated with the origination of PPP loans in the second quarter of 2020.
Interest expense decreased from $297,590 in the second quarter of 2020 to $123,127 in the second quarter of 2021 due to general rate decreases. However, the overall yield on interest earning assets decreased from 3.53% to 3.11% from the second quarter of 2020 to the second quarter of 2021 due to a change in the earning asset mix. Higher yielding loans made up 74.3% of average interest earning assets in the second quarter of 2020 as opposed to 57.1% in the second quarter of 2021. Conversely, lower yielding interest bearing deposits in other banks made up 35.5% of average interest earning assets in the second quarter of 2021 compared to 23.4% in the second quarter of 2020. The cost of funds decreased from 0.36% in the second quarter of 2020 to 0.12% in 2021.
The provision for loan losses decreased from $260,051 in the second quarter of 2020 to $188,616 in 2021, a $71,435 decrease. This decrease is due to a decrease in loan balances.
Noninterest income decreased from $667,751 in the second quarter of 2020 to $501,064 in 2021, a 24.9% 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 $180,580 in the second quarter of 2020 with no commission income in the second quarter of 2021. Noninterest expenses increased 6.3% from $2,040,969 in the second quarter of 2020, to $2,169,527 in 2021. This increase was primarily due to increases in salaries and benefits and data processing fees.
Loan loss reserves were $5,015,059 or 2.03% of total loans as of June 30. Non-performing assets were 0.64% of total assets as of June 30, compared to 0.10% on that date in 2020.
Total assets were $469,698,272 as of June 30, an increase of 16.4% from $403,514,398 reported as of June 30, 2020. Total deposits were $403,220,011 at quarter-end, a 16.2% increase from the 347,135,297 reported at the end of the second quarter of 2020. Net loans decreased to $242,092,198, or 12.2%, compared to $275,656,373, at June 30, 2020.
Net income for the six months ending June 30 was $3,081,159 or $0.74 per share, compared to $2,027,575 or $0.49 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.
Source: https://www.mtairynews.com
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