Community Bank of Bergen County, NJ Reports Third Quarter 2017 Net Income of $0.16 Per Share

Community Bank of Bergen County, NJ CMTB reported net income for the third quarter of 2017 of $316,000, or $0.16 per diluted share, down from $469,000, or $0.24 per diluted share, recorded during the third quarter of 2016. The decrease was attributed to increased non-interest expense due to the pending merger with Sussex Bank, and lower non-interest income.

Net interest income and total interest income for the third quarter of 2017 increased over the third quarter of 2016 by $18,000 and $91,000, respectively. The increase in interest income is largely the result of higher interest and dividends on securities. Interest expense on deposits increased by $59,000 due to significantly higher average interest bearing deposits ($243,268,000 for the third quarter of 2017 vs. $230,928,000 for the third quarter of 2016). Interest and fee income from loans decreased by $8,000 over the third quarter of 2016, but this was more than offset by an additional $97,000 in interest and dividends for securities related to significant growth in average investments year-on-year ($80,770,000 for the third quarter 2017 vs. $66,280,000 for the third quarter of 2016). Higher average outstanding loan balances ($238,393,000 for the third quarter of 2017 vs. $230,084,000 for the same period in 2016) were offset by lower yields on outstanding loans. Additionally, average non-interest bearing deposits grew to $63,234,000 this quarter from $61,376,000 reported the same period last year.

Non-interest income was $43,000 lower in the third quarter of 2017 over the third quarter of 2016, largely the result of a legal settlement in the Bank's favor in July of 2016 for $76,000. This was partially offset by a gain in the third quarter of 2017 of $40,000 on the sale of an other real estate owned (OREO) property. The Bank did not sell any OREO in the third quarter of 2016. Other non-interest expense for the third quarter of 2017 was up by $180,000 which is the direct result of expenses related to the Bank's pending merger with Sussex Bank.

The Bank's net income for the nine months ended September 30, 2017, was $1,058,000, a $286,000 decrease from net income of $1,344,000 reported for the same period last year. A decrease in net interest income and an increase in non-interest expense were only partially offset by an increase in non-interest income and a decrease in the provision for loan losses.

Net interest income was down $170,000 from the prior nine-month period, as total interest income for the current year-to-date was down by $22,000 and interest expense rose by $148,000. The decrease in total interest income is largely the result of lower yields on outstanding loans, despite slightly higher average outstanding balances during the comparative periods ($236,382,000 for the year-to-date 2017 vs. $232,523,000 for the same time last year). The $148,000 increase in interest expense was due to higher average interest bearing deposits ($250,667,000 for the year through September 30, 2017, vs. $232,741,000 for the same period in 2016). A $405,000 decrease in interest and fee income from loans due to lower yields on outstanding loans was partially offset by an increase of $342,000 in interest and dividends from securities. This increase is attributed to significant growth in average investments year-on-year ($82,003,000 for the first nine months of 2017 vs. $65,893,000 for the same period in 2016). Additionally, average non-interest bearing deposits grew this year to $63,281,000 over $59,413,000 reported for the same period in 2016.

Non-interest income of $642,000 was notably higher (by $123,000) in the nine months ended September 30, 2017, versus the same period in 2016, a result of $140,000 in revenue generated from legal settlements this year over $76,000 in legal settlements in 2016, and a reduction in losses from the sale of OREO. During the first nine months of 2016, the Bank disposed of two OREO properties (generating losses of $49,000), but it acquired three new OREO properties valued at $1,083,000. In 2017, for the same period, the Bank disposed of three OREO properties (generating net losses of $23,000) and it acquired one new OREO property valued at $155,000. While the Bank's outstanding OREO balance currently shows a reduction from year end, management feels the value of these properties are sufficient to minimize future losses upon their sale. In addition, the Bank continues to mitigate its high level of problem loans with a diligent work out process. During the first nine months of 2017, total delinquent loans dropped from $7.4 million at year end 2016 to $7.2 million at September 30, 2017.

Other non-interest expense for the nine months of 2017 of $6.97 million was also up significantly ($361,000) and was the result of $391,000 in costs related to the pending merger with Sussex Bank.

The Bank's total assets at September 30, 2017, rose by $8.6 million from December 31, 2016, due mainly to increases in loans outstanding of $10.0 million which were funded by $6.0 million in additional borrowings.

"Merger related costs drove net income down compared to the same quarter last year; however, core operating earnings remain stable," said Peter A. Michelotti, the Bank's President & CEO.

The Bank's capital closed this quarter at $30,430,000, up from the $28,689,000 reported year end 2016, with book value per share at $15.86 as compared to $14.96 at December 31, 2016. The Bank remains "well capitalized" as defined under all regulatory guidance.

About Community Bank of Bergen County

Established in 1928, Community Bank of Bergen County, NJ (CBBC) serves the northern New Jersey community with three locations in Rochelle Park, Maywood and Fair Lawn. Dedicated to superior service, the bank offers a range of customized personal and business banking products and the convenience of 24-hour ATMs and online banking. With lending decisions made locally, and a responsive management team, Community Bank of Bergen County is committed to providing an exceptional banking experience. On April 10, 2017, the Bank entered into a definitive agreement with Sussex Bancorp and Sussex Bank pursuant to which Sussex Bancorp will acquire the Bank in an all-stock transaction. The transaction is expected to be completed during the first quarter of 2018, subject to approval by each company's shareholders, as well as regulatory approvals and other customary closing conditions.

CBBC is a member of the Federal Deposit Insurance Corporation (FDIC) and an Equal Housing Lender. CBBC makes loans without regard to race, color, religion, national origin, sex, handicap, or familial status.

For more information, visit the Bank's web site at www.cbbcnj.com, and to view CBBC's 2016 Audited Financial Statements, visit: http://www.cbbcnj.com/home/about-us/investor

Forward-Looking Statements

This press release and other statements made from time to time by Community Bank of Bergen County's management contain express and implied statements relating to our future financial condition, results of operations, credit quality, corporate objectives, capital, liquidity and other financial and business matters, which are considered forward-looking statements. These forward-looking statements are necessarily speculative and speak only as of the date made, and are subject to numerous assumptions, risks and uncertainties, all of which may change over time. Actual results could differ materially from those expected or implied by such forward-looking statements. The words "feels", "may", "could", "should", "would", "will", "project", "continue", "believe", "anticipate", "expect", "intend", "plan", and similar expressions are intended to identify forward-looking statements. All such statements are made in good faith by the Bank pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Risks and uncertainties which could cause our actual results to differ materially and adversely from such forward-looking statements include the current economy, both nationally and locally, and how it is affecting the financial industry specifically; volatility in interest rates and the shape of the yield curve; increased credit risks and risks associated with the real estate market; the potential for increased non-performing loans; operating, legal, and regulatory risk; economic, political, and competitive forces affecting the Bank's lines of business; the extent and timing of actions of the Federal Reserve Board; customer acceptance of our products and services; the inability to resolve our problem loans as expected; and other risks and uncertainties. Any statements made that are not historical facts should be considered to be forward-looking statements. You should not place undue reliance on any forward-looking statements. We undertake no obligation to update forward-looking statements or to make any public announcement when we consider forward-looking statements to no longer be accurate, whether as a result of new information or the occurrence of future events, except as may be required by applicable law or regulation.

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* Calculated by dividing the market price of a share of the Bank's common stock for the period of the year in question by the Bank's annualized earning per share for that period.

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