Surrey Bancorp Reports Second Quarter Net Income of $416,151

MOUNT AIRY, N.C., July 30 /PRNewswire-FirstCall/ -- Surrey Bancorp (the
"Company") (OTC Bulletin Board: SRYB), the holding company for Surrey Bank &
Trust, today reported earnings for the second quarter of 2009.

For the quarter ended June 30, 2009, net income totaled $416,151 or $0.11 per
fully diluted share, compared with $435,258, or $0.12 per fully diluted common
share earned during the second quarter of 2008.

The decrease results from an increase in noninterest expenses that more than
offset an increase in net interest income and a decrease in the provision for
loan losses. Net interest income increased 8.8 percent from $1,676,055 in the
second quarter of 2008 to $1,823,276 for the same period in 2009. The
continued downward repricing of deposits during the second quarter was largely
responsible for the improvement in the margin. The provision for loan losses
decreased from $93,930 in the second quarter of 2008 to a recapture of $720
for the same period in 2009. Significant reserves recognized in the first
quarter of 2009, coupled with a reduction in net loans during the second
quarter, lead to this decrease. Noninterest income decreased 1.8 percent to
$571,806, compared to $582,494 reported for the quarter ended June 30, 2008.
This change is due primarily to a reduction in service charges on deposit
accounts. Noninterest expenses increased 16.0 percent from $1,509,320 in the
second quarter of 2008, to $1,750,488 in the second quarter of 2009. Most of
this increase is associated with salaries, employee benefits, and other
noninterest expense. Salaries and benefits increased due to normal merit
increases and incentive accrual differences between the 2009 and 2008 quarters
end. Other noninterest expense increased 20.5 percent from $486,923 in the
second quarter of 2008 to $586,544 in 2009. This is the result of increased
FDIC insurance premiums and the FDIC's special assessment which was accrued at
June 30, 2009. FDIC insurance premiums increased 471 percent from $25,470 in
2008 to $145,415 in the quarter ended June 30, 2009. The special assessment
amounted to approximately $90,000.

Loan loss reserves were $3,939,916 or 2.27 percent of total loans as of June
30, 2009. Non-performing assets were 0.38 percent of total assets at June 30,
2009, compared to 0.18 percent on that date in 2008. At June 30, 2009, the
allowance for loan loss reserves equals 143 percent of impaired and
non-performing assets, net of government guarantees.

Total assets were $204,477,965 as of June 30, 2009, a decrease of 0.7 percent
from $205,970,993 reported as of June 30, 2008. Total deposits were
$164,369,235 at quarter-end 2009, a 1.1 percent increase from the $162,500,682
reported at the end of the second quarter of 2008. Net loans decreased 1.1
percent to $169,908,448, compared to $171,881,600 at June 30, 2008.

Net income for the six months ended June 30, 2009, was $1,401,819, or $0.37
per diluted share, compared to $839,143, or $0.23 per diluted share, for the
same period in 2008.

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, 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, North
Carolina, and 940 Woodland Drive in Stuart, Virginia.

Surrey Bank & Trust is engaged in the sale of insurance through its wholly
owned subsidiary, SB&T Insurance, located at 199 North Renfro Street in Mount
Airy. The Bank also owns Surrey Investment Services, Inc., which provides
full-service brokerage and investment advice through an association with UVest
Financial Services, and Freedom Finance, LLC, a sales finance company located
at 165 North Renfro Street in Mount Airy.

Surrey Bank & Trust can be found online at www.surreybank.com.

Non-GAAP Financial Measures
This report refers to the overhead efficiency ratio, which is computed by
dividing non-interest expense by the sum of net interest income and
non-interest income. This is a non-GAAP financial measure that we believe
provides investors with important information regarding our operational
efficiency. Comparison of our efficiency ratio with those of other companies
may not be possible, because other companies may calculate the efficiency
ratio differently. Such information is not in accordance with generally
accepted accounting principles in the United States (GAAP) and should not be
construed as such. Management believes such financial information is
meaningful to the reader in understanding operating performance, but cautions
that such information not be viewed as a substitute for GAAP. Surrey Bancorp,
in referring to its net income, is referring to income under GAAP.

Forward Looking Statements
Information in this press release contains "forward-looking statements." These
statements involve risks and uncertainties that could cause actual results to
differ materially, including without limitation, the effects of future
economic conditions, governmental fiscal and monetary policies, legislative
and regulatory changes, the risks of changes in interest rates and the effects
of competition. Additional factors that could cause actual results to differ
materially are discussed in Surrey Bancorp's recent filings with the
Securities and Exchange Commission, included but not limited to its Annual
Report on Form 10-K and its other periodic reports.

SURREY BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share amounts)

June 30 December 31 June 30
2009 2008 2008
---- ---- ----
(unaudited) (unaudited)

Total assets $204,478 $204,178 $205,971
Total loans 173,848 175,446 174,824
Investments 17,366 19,912 21,535
Deposits 164,369 163,747 162,501
Borrowed funds 10,450 12,440 13,702
Stockholders' equity 27,756 24,383 23,740
Non-performing assets to
total assets 0.38 % 0.29 % 0.18 %
Loans past due more than
90 days to total loans 0.02 % 0.02 % 0.01 %
Allowance for loan losses
to total loans 2.27 % 1.92 % 1.68 %
Book value per common
share $7.24 $6.87 $6.67

SURREY BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share amounts)

For the Three For the Six
Months Months
Ended June 30, Ended June 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Interest income $2,657 $3,058 $5,305 $6,437
Interest expense 834 1,382 1,758 2,973
Net interest income 1,823 1,676 3,547 3,464
Provision for loan losses (1) 94 754 236
Net interest income after
provision for loan losses 1,824 1,582 2,793 3,228
Noninterest income 572 582 2,147 1,150
Noninterest expense 1,751 1,509 3,380 3,122
Net income before taxes 645 655 1,560 1,256
Provision for income taxes 229 220 158 417
Net income 416 435 1,402 839
Preferred stock dividend
declared 65 30 127 59
Net income available to
common shareholders $351 $405 $1,275 $780
Basic net income per share $0.11 $0.13 $0.40 $0.25
Diluted net income per
share $0.11 $0.12 $0.37 $0.23
Return on average total
assets * 0.80 % 0.86 % 1.36 % 0.83 %
Return on average total
equity * 6.02 % 7.37 % 10.38 % 7.18 %
Yield on average interest
earning assets 5.46 % 6.35 % 5.50 % 6.65 %
Cost of funds 1.87 % 3.13 % 1.98 % 3.35 %
Net yield on average
interest earning assets 3.74 % 3.48 % 3.67 % 3.58 %
Overhead efficiency ratio 73.09 % 66.83 % 59.36 % 67.66 %
Net charge-offs/average
loans 0.04 % 0.02 % 0.10 % 0.04 %

* annualized for all periods presented

SOURCE Surrey Bancorp

Ted Ashby, CEO, or Mark Towe, CFO, both of Surrey Bancorp, +1-336-783-3900