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Sussex Bancorp Reports a 33.3% Increase in EPS to $0.28 for the Third Quarter

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ROCKAWAY, N.J., Oct. 27, 2016 (GLOBE NEWSWIRE) -- Sussex Bancorp (the "Company") (Nasdaq: SBBX), the holding company for Sussex Bank (the "Bank"), today announced a 38.5% increase in net income to $1.3 million, or $0.28 per basic and diluted common share, for the quarter ended September 30, 2016 as compared to $951 thousand, or $0.21 per basic and diluted share, for the same period last year. Also, the Company announced a 43.5% increase in net income to $4.0 million, or $0.87 per basic and $0.86 per diluted share, for the nine months ended September 30, 2016 as compared to $2.8 million or $0.61 per basic and diluted share for the same period last year.  The improvement for the third quarter of 2016 as compared to the same period last year was mostly driven by a 24.9% increase in net interest income on a fully tax equivalent basis as a result of strong growth in average loans and deposits, which increased $165.2 million, or 33.9%, and $115.9 million, or 23.3%, respectively.  The aforementioned increase in net interest income was partly offset by higher provision for loan losses due to loan growth and an increase in income tax expense.  

"I am pleased to report that we produced another quarter of strong financial performance for Sussex Bancorp.   These results continue to be driven by our dedicated employees that helped our principal business lines achieve outstanding growth.  This growth resulted in an impressive 24.9% increase in net interest income on a fully tax equivalent basis and helped improve our margin 3 basis points on a linked quarter basis," said Anthony Labozzetta, President and Chief Executive Officer of Sussex Bank.  Mr. Labozzetta also stated, "We had exceptional growth in deposits, but even more noteworthy is the pace of growth in our noninterest bearing demand accounts, which grew 28% over last year and have a three year compounded annual growth rate 29%."

Mr. Labozzetta also added, "It is wonderful that the efforts of our Team has led to Sussex Bank being recognized as one of the 50 Fastest Growing Companies in New Jersey by NJBIZ during the third quarter."

Declaration of Quarterly Dividend
The Company's Board of Directors declared a quarterly cash dividend of $0.04 per share, which is payable on November 23, 2016 to common shareholders of record as of the close of business on November 9, 2016.

Financial Performance
Net Income. For the quarter ended September 30, 2016, the Company reported net income of $1.3 million, or $0.28 per basic and diluted share, as compared to net income of $951 thousand, or $0.21 per basic and diluted share, for the same period last year.  The increase in net income for the quarter ended September 30, 2016 was driven by an $1.3 million, or 24.9%, increase in net interest income on a fully tax equivalent basis resulting from strong loan and deposit growth.  The aforementioned was partly offset by an increase in provision for loan losses of $457 thousand due to loan growth and an increase in income taxes due to earnings growth and a higher effective tax rate.  In addition, non-interest expenses increased 5.4% mostly due to costs attributed to support the Company's growth.

Income before income taxes increased $672 thousand, or 51.1%, to $2.0 million for the quarter ended September 30, 2016 as compared to $1.3 million for the same period last year.  The Company's income before income taxes, excluding Tri-State Insurance Agency's ("Tri-State"), increased $682 thousand, or 58.4%, to $1.8 million for the three months ended September 30, 2016 as compared to $1.2 million for the same period last year.  Tri-State's contribution to the Company's income before income taxes for the quarter ended September 30, 2016 decreased $10 thousand, or 5.4%, to $164 thousand as compared to the same period last year. 

For the nine months ended September 30, 2016, the Company reported a 43.5% increase in net income to $4.0 million, or $0.87 per basic and $0.86 per diluted share as compared to net income of $2.8 million, or $0.61 per basic and diluted share, for the same period last year.  The increase in net income for the nine months ended September 30, 2016 was largely due to increases in net interest income on a fully tax equivalent basis of $3.0 million, or 19.8%, and non-interest income of $1.1 million, or 21.1%, which were partially offset by an increase in non-interest expenses of $1.5 million, or 9.8%, and a $548 thousand increase in provision for loan losses. The increase in non-interest expense was largely due to increases in salaries and employee benefits, mostly due to an increase in personnel to support our growth and higher incentive and commission costs related to the Bank's and Tri-State's performance, and data processing costs largely resulting from outsourcing of core processing systems.

Income before income taxes increased $2.0 million, or 51.4%, to $6.0 million for the nine months ended September 30, 2016 as compared to $4.0 million for the same period last year. Tri-State's contribution to the Company's income before income taxes for the nine months ended September 30, 2016 increased $502 thousand, or 83.4%, to $1.1 million as compared to $602 thousand for the same period last year.  The growth was driven by an increase in Tri-State's commissions and fees that was largely due to an increase in commissions of $496 thousand, or 25.6%, and contingency fee income of $418 thousand, or 124.7%.  The aforementioned was partly offset by an increase in non-interest expense of $516 thousand, or 22.8%.  The Company's income before income taxes, excluding Tri-State, increased $1.5 million, or 45.7%, to $4.9 million for the nine months ended September 30, 2016 as compared to the same period last year.

Net Interest Income.  Net interest income on a fully tax equivalent basis increased $1.3 million, or 24.9%, to $6.5 million for the third quarter of 2016, as compared to $5.2 million for the same period in 2015.  The increase in net interest income was largely due to a $167.9 million, or 28.1%, increase in average interest earning assets, principally loans receivable, which increased $165.2 million, or 33.9%.  The improvement in net interest income was partly offset by a decline in the net interest margin of 9 basis points to 3.34% for the third quarter of 2016, as compared to the same period in 2015.  The decline in the net interest margin was mostly attributed to a 15 basis point decrease in the average rate earned on loans, which is mostly due to loan growth and loan repricing in a low rate environment. Also included in the net interest margin decrease is a 6 basis point increase in the average rate on interest bearing deposits, which was primarily due to an increase in wholesale funding.

Net interest income on a fully tax equivalent basis increased $3.0 million, or 19.8%, to $18.1 million for the first nine months of 2016 as compared to $15.1 million for the same period in 2015.  The increase in net interest income was largely due to a $134.4 million, or 23.1%, increase in average interest earning assets, principally loans receivable and the securities portfolio, which increased $128.9 million, or 27.0% and $3.8 million, or 3.9%, respectively.  The Company's net interest margin was 3.37% and 3.47% for the first nine months of 2016 and 2015, respectively. The decline in net interest margin is due to loan growth and loan repricing in a low rate environment along with an increase in the average rate on interest bearing deposits, primarily due to an increase in wholesale funding.

Provision for Loan Losses. Provision for loan losses increased $457 thousand to $458 thousand for the third quarter of 2016, as compared to the same period in 2015.

Provision for loan losses increased $548 thousand, or 108.3%, to $1.1 million thousand for the first nine months of 2016, as compared to $506 thousand for the same period in 2015.  The increases for both periods were mostly attributable to the Company's loan growth.

Non-interest Income. Non-interest income increased $119 thousand, or 7.2%, to $1.8 million for the third quarter of 2016, as compared to the same period last year.  The increase was primarily due to higher insurance commissions and fees, which increased $135 thousand, or 14.1%, for the third quarter of 2016 as compared to the same period in 2015.   

The Company reported an increase in non-interest income of $1.1 million, or 21.1%, to $6.1 million for the first nine months of 2016 as compared to the same period last year.  The increase in non-interest income was largely due to increases in insurance commissions and fees of $1.0 million.  The growth in Tri-State's commissions and fees was largely due to an increase in commissions of $496 thousand, or 25.6%, and contingency fee income of $418 thousand, or 124.7%.

Non-interest Expense. The Company's non-interest expenses increased $288 thousand, or 5.4%, to $5.7 million for the third quarter of 2016, as compared to the same period last year. The increase for the third quarter of 2016, as compared to the same period in 2015, was largely due to an increase in salaries and employee benefits of $324 thousand.  The aforementioned increases were partly offset by declines in expenses and write-downs related to foreclosed real estate and other expenses of $179 thousand and $127 thousand, respectively. 

The Company's non-interest expenses increased $1.5 million, or 9.8%, to $16.9 million for the first nine months of 2016 as compared to the same period last year.  The increase for the first nine months of 2016, as compared to the same period in 2015, was largely due to increases in salaries and employee benefits of $1.2 million, data processing of $375 thousand and furniture and equipment of $119 thousand.   The aforementioned increases were partly offset by declines in expenses and write-downs related to foreclosed real estate and other expenses of $159 thousand and $127 thousand, respectively.

The increase in salaries and employee benefits for the third quarter and first nine months of 2016 as compared to the same periods in 2015 was largely due to an increase in personnel to support our growth, including the opening of our Oradell, New Jersey branch in the first quarter of 2016, and higher incentive and commission costs related to the Bank's and Tri-State's performance.  The aforementioned increases were partly offset by the elimination of our in-house data operations center during the fourth quarter of 2015 and the closing of our Port Jervis, New York branch during the second quarter of 2016.  The increase in data processing was largely due to the costs associated with the outsourcing of core processing systems and higher costs related to the Company's growth and introduction of new products and services during 2016.

Financial Condition
At September 30, 2016, the Company's total assets were $809.0 million, an increase of $124.5 million, or 18.2%, as compared to total assets of $684.5 million at December 31, 2015.  The increase in total assets was largely driven by growth in loans receivable of $119.8 million, or 22.1%. 

Total loans receivable, net of unearned income, increased $119.8 million, or 22.1%, to $663.3 million at September 30, 2016, as compared to $543.4 million at December 31, 2015.  During the nine months ended September 30, 2016, the Company had $163.5 million in commercial loan production, which was partly offset by $8.6 million in commercial loan payoffs.

The Company's total deposits increased $107.1 million, or 20.7%, to $624.9 million at September 30, 2016, from $517.9 million at December 31, 2015.  The growth in deposits was due to increases in both interest bearing deposits of $67.1 million, or 15.6%, and non-interest bearing deposits of $40.0 million, or 45.9%, at September 30, 2016, as compared to December 31, 2015. Additionally there was an increase in borrowings of $6.8 million, or 7.2%, to $102.5 million at September 30, 2016 from $95.7 million at December 31, 2015 due to substantial loan growth.  Included in the aforementioned deposit total is $46.9 million in deposit balances with a cost of 0.59% attributed to our newest branch in Oradell, New Jersey, which opened in the beginning of March, 2016.  Also, included is $69.0 million in deposit balances with a cost of 0.42% attributed to our branch in Astoria, New York, which opened in Mid-March of 2015. 

At September 30, 2016, the Company's total stockholders' equity was $58.6 million, an increase of $4.7 million when compared to December 31, 2015.  The increase was largely due to net income for the nine months ended September 30, 2016.  At September 30, 2016, the leverage, Tier I risk-based capital, total risk-based capital and common equity Tier I capital ratios for the Bank were 8.98%, 11.02%, 11.99% and 11.02%, respectively, all in excess of the ratios required to be deemed "well-capitalized." During the quarter ended September 30, 2016 the Company entered into an unsecured revolving line of credit ("LOC"), in the amount of $5 million, with a floating rate of prime plus 50 basis points and a fee of 25 basis points. The LOC funds were contributed to the Bank's capital in the third quarter of 2016.

Asset and Credit Quality
The ratio of NPAs, which include non-accrual loans, loans 90 days past due and still accruing, troubled debt restructured loans currently performing in accordance with renegotiated terms and foreclosed real estate, to total assets improved to 1.13% at September 30, 2016 from 1.49% at December 31, 2015.  NPAs decreased $1.1 million, or 10.8%, to $9.1 million at September 30, 2016, as compared to $10.2 million at December 31, 2015.  Non-accrual loans decreased $729 thousand, or 13.7%, to $4.6 million at September 30, 2016, as compared to $5.3 million at December 31, 2015.  The top five non-accrual loan relationships total $3.0 million, which equates to 64.8% of total non-accrual loans and 32.6% of total NPAs at September 30, 2016.  The remaining non-accrual loans at September 30, 2016 have an average loan balance of $85 thousand.  Loans past due 30 to 89 days increased $4.8 million to approximately $7.6 million at September 30, 2016, as compared to $2.8 million at December 31, 2015.  Included in the $4.8 million increase was $3.5 million in matured loans, of which $2.6 million were renewed in the fourth quarter of 2016.

The Company continues to actively market its foreclosed real estate properties, which decreased $349 thousand to $3.0 million at September 30, 2016, as compared to $3.4 million at December 31, 2015.  At September 30, 2016, the Company's foreclosed real estate properties had an average carrying value of approximately $300 thousand per property.

The allowance for loan losses increased by $741 thousand, or 13.3%, to $6.3 million, or 0.95% of total loans, at September 30, 2016, compared to $5.6 million, or 1.03% of total loans, at December 31, 2015. The Company recorded $1.1 million in provision for loan losses for the nine months ended September 30, 2016.  Additionally, the Company recorded net charge-offs of $313 thousand for the nine months ended September 30, 2016, as compared to $506 thousand in net charge-offs for the nine months ended September 30, 2015. The allowance for loan losses as a percentage of non-accrual loans increased to 138.1% at September 30, 2016 from 105.2% at December 31, 2015.

About Sussex Bancorp
Sussex Bancorp is the holding company for Sussex Bank, which operates through its regional offices and corporate centers in Wantage and Rockaway, New Jersey, its eleven branch offices located in Andover, Augusta, Franklin, Hackettstown, Newton, Montague, Sparta, Vernon, Oradell and Wantage, New Jersey, and Astoria, New York, and a loan production office in Oradell, New Jersey, and for the Tri-State Insurance Agency, Inc., a full service insurance agency with locations in Augusta and Oradell, New Jersey.  For additional information, please visit the Company's website at www.sussexbank.com.

Forward-Looking Statements
This press release contains statements that are forward looking and are made pursuant to the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995.  Such statements may be identified by the use of words such as "expect," "estimate," "assume," "believe," "anticipate," "will," "forecast," "plan," "project" or similar words.  Such statements are based on the Company's current expectations and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, changes to interest rates, the ability to control costs and expenses, general economic conditions, the success of the Company's efforts to diversify its revenue base by developing additional sources of non-interest income while continuing to manage its existing fee-based business, risks associated with the quality of the Company's assets and the ability of its borrowers to comply with repayment terms.  Further information about these and other relevant risks and uncertainties may be found in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and in subsequent filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release the results of any revisions to those forward looking statements that may be made to reflect events or circumstances after this date or to reflect the occurrence of unanticipated events.


SUSSEX BANCORP
SUMMARY FINANCIAL HIGHLIGHTS
(In Thousands, Except Percentages and Per Share Data)
(Unaudited)
                  
         9/30/2016 VS.
  9/30/2016 12/31/2015 9/30/2015 9/30/2015 12/31/2015
BALANCE SHEET HIGHLIGHTS - Period End Balances               
Total securities $ 98,258  $ 100,610  $ 100,559    (2.3)%   (2.3)%
Total loans   663,258    543,423    501,203    32.3 %   22.1 %
Allowance for loan losses   (6,331)   (5,590)   (5,641)   12.2 %   13.3 %
Total assets   808,987    684,503    644,019    25.6 %   18.2 %
Total deposits   624,921    517,856    502,509    24.4 %   20.7 %
Total borrowings and junior subordinated debt   120,387    108,537    84,187    43.0 %   10.9 %
Total shareholders' equity   58,633    53,941    53,146    10.3 %   8.7 %
                  
FINANCIAL DATA - QUARTER ENDED:                  
Net interest income (tax equivalent) (a) $ 6,453  $ 5,414  $ 5,166    24.9 %   19.2 %
Provision for loan losses   458    130    1    45,700.0 %   252.3 %
Total other income   1,774    1,396    1,655    7.2 %   27.1 %
Total other expenses   5,651    5,198    5,363    5.4 %   8.7 %
Income before provision for income taxes (tax equivalent)   2,118    1,482    1,457    45.4 %   42.9 %
Provision for income taxes   696    450    390    78.5 %   54.7 %
Taxable equivalent adjustment (a)   105    119    116    (9.5)%   (11.8)%
Net income $ 1,317  $ 913  $ 951    38.5 %   44.2 %
                  
Net income per common share - Basic $ 0.28  $ 0.20  $ 0.21    33.3 %   40.0 %
Net income per common share - Diluted $ 0.28  $ 0.20  $ 0.21    33.3 %   40.0 %
                  
Return on average assets   0.66 % 0.55 % 0.60 % 8.9 %   19.7 %
Return on average equity   9.06 % 6.79 % 7.22 % 25.4 %   33.5 %
Efficiency ratio (b)   69.58 % 77.69 % 79.99 % (13.0)%   (10.4)%
Net interest margin (tax equivalent)   3.34 % 3.39 % 3.43 % (2.6)%   (1.5)%
Avg. interest earning assets/Avg. interest bearing liabilities   1.25    1.24    1.24    1.0 %   1.0 %
                  
FINANCIAL DATA - YEAR TO DATE:                  
Net interest income (tax equivalent) (a) $ 18,109     $ 15,111    19.8 %    
Provision for loan losses   1,054       506    108.3 %    
Total other income   6,124       5,057    21.1 %    
Total other expenses   16,859       15,355    9.8 %    
Income before provision for income taxes (tax equivalent)   6,320       4,307    46.7 %    
Provision for income taxes   2,022       1,190    69.9 %    
Taxable equivalent adjustment (a)   298       330    (9.7)%    
Net income $ 4,000     $ 2,787    43.5 %    
                  
Net income per common share - Basic $ 0.87     $ 0.61    42.6 %    
Net income per common share - Diluted $ 0.86     $ 0.61    41.0 %    
                  
Return on average assets   0.71 %    0.60 % 17.5 %    
Return on average equity   9.41 %    7.10 % 32.6 %    
Efficiency ratio (b)   70.44 %    77.40 % (9.0)%    
Net interest margin (tax equivalent)   3.37 %    3.47 % (2.9)%    
Avg. interest earning assets/Avg. interest bearing liabilities   1.24       1.22    1.7 %    
                  
SHARE INFORMATION:                  
Book value per common share $ 12.37  $ 11.61  $ 11.44    8.1 %   6.5 %
Tangible book value per common share   11.77    11.00    10.83    8.6 %   7.0 %
Outstanding shares- period ending   4,741,720    4,646,238    4,645,387    2.1 %   2.1 %
Average diluted shares outstanding (year to date)   4,633,473    4,591,822    4,591,700    0.9 %   0.9 %
                  
CAPITAL RATIOS:                  
Total equity to total assets   7.25 % 7.88 % 8.25 % (12.2)%   (8.0)%
Leverage ratio (c)   8.98 % 9.45 % 9.82 % (8.6)%   (5.0)%
Tier 1 risk-based capital ratio (c)   11.02 % 11.74 % 12.39 % (11.1)%   (6.1)%
Total risk-based capital ratio (c)   11.99 % 12.79 % 13.52 % (11.3)%   (6.3)%
Common equity Tier 1 capital ratio (c)   11.02 % 11.74 % 12.39 % (11.1)%   (6.1)%
                  
ASSET QUALITY:                  
Non-accrual loans $ 4,583  $ 5,312  $ 5,682    (19.3)%   (13.7)%
Loans 90 days past due and still accruing   386    -    -    - %   - %
Troubled debt restructured loans ("TDRs") (d)   1,142    1,553    1,562    (26.9)%   (26.5)%
Foreclosed real estate   3,005    3,354    3,335    (9.9)%   (10.4)%
Non-performing assets ("NPAs") $ 9,116  $ 10,219  $ 10,579    (13.8)%   (10.8)%
                  
Foreclosed real estate, criticized and classified assets $ 19,777  $ 20,778  $ 20,167    (1.9)%   (4.8)%
Loans past due 30 to 89 days $ 7,580  $ 2,823  $ 2,436    211.2 %   168.5 %
Charge-offs, net (quarterly) $ 115  $ 181  $ 112    2.7 %   (36.5)%
Charge-offs, net as a % of average loans (annualized)   0.07 % 0.14 % 0.09 % (23.3)%   (49.3)%
Non-accrual loans to total loans   0.69 % 0.98 % 1.13 % (39.0)%   (29.3)%
NPAs to total assets   1.13 % 1.49 % 1.64 % (31.4)%   (24.5)%
NPAs excluding TDR loans (d) to total assets   0.99 % 1.27 % 1.40 % (29.6)%   (22.1)%
Non-accrual loans to total assets   0.57 % 0.78 % 0.88 % (35.8)%   (27.0)%
Allowance for loan losses as a % of non-accrual loans   138.14 % 105.23 % 99.28 % 39.1 %   31.3 %
Allowance for loan losses to total loans   0.95 % 1.03 % 1.13 % (15.2)%   (7.2)%
                  
(a) Full taxable equivalent basis, using a 39% effective tax rate and adjusted for TEFRA (Tax and Equity Fiscal Responsibility Act) interest expense disallowance 
(b) Efficiency ratio calculated non-interest expense divided by net interest income plus non-interest income           
(c) Sussex Bank capital ratios                 
(d) Troubled debt restructured loans currently performing in accordance with renegotiated terms           
            

 

SUSSEX BANCORP 
CONSOLIDATED BALANCE SHEETS 
(Dollars In Thousands) 
      
ASSETSSeptember 30, 2016  December 31, 2015 
     
Cash and due from banks$4,355   $2,914  
Interest-bearing deposits with other banks 8,055    3,206  
Cash and cash equivalents 12,410    6,120  
      
Interest bearing time deposits with other banks 100    100  
Securities available for sale, at fair value 91,630    93,776  
Securities held to maturity 6,628    6,834  
Federal Home Loan Bank Stock, at cost 5,633    5,165  
      
Loans receivable, net of unearned income 663,258    543,423  
Less:  allowance for loan losses 6,331    5,590  
Net loans receivable 656,927    537,833  
      
Foreclosed real estate 3,005    3,354  
Premises and equipment, net 8,945    8,879  
Accrued interest receivable 1,797    1,764  
Goodwill 2,820    2,820  
Bank-owned life insurance 12,749    12,524  
Other assets 6,343    5,334  
      
Total Assets$808,987   $684,503  
      
LIABILITIES AND STOCKHOLDERS' EQUITY     
      
Liabilities:     
Deposits:     
Non-interest bearing$127,198   $87,209  
Interest bearing 497,723    430,647  
Total Deposits 624,921    517,856  
      
Borrowings 107,500    95,650  
Accrued interest payable and other liabilities 5,046    4,169  
Junior subordinated debentures 12,887    12,887  
      
Total Liabilities 750,354    630,562  
      
Total Stockholders' Equity 58,633    53,941  
      
Total Liabilities and Stockholders' Equity$808,987   $684,503  
      

 

SUSSEX BANCORP
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollars In Thousands Except Per Share Data)
(Unaudited)
 Three Months Ended September 30, Nine Months Ended September 30,
  2016   2015   2016   2015 
INTEREST INCOME        
Loans receivable, including fees$6,971  $5,390  $19,575  $15,837 
Securities:       
Taxable 396   321   1,116   890 
Tax-exempt 201   231   592   660 
Interest bearing deposits 7   1   17   8 
Total Interest Income 7,575   5,943   21,300   17,395 
        
INTEREST EXPENSE       
Deposits 619   448   1,830   1,302 
Borrowings 508   390   1,393   1,150 
Junior subordinated debentures 100   55   266   162 
Total Interest Expense 1,227   893   3,489   2,614 
        
Net Interest Income 6,348   5,050   17,811   14,781 
PROVISION FOR LOAN LOSSES 458   1   1,054   506 
Net Interest Income after Provision for Loan Losses 5,890   5,049   16,757   14,275 
        
OTHER INCOME       
Service fees on deposit accounts 245   230   726   656 
ATM and debit card fees 190   198   577   573 
Bank owned life insurance 74   78   225   235 
Insurance commissions and fees 1,090   955   3,850   2,846 
Investment brokerage fees (10)  40   67   103 
Gain on securities transactions 89   11   361   267 
(Loss) on disposal of fixed assets -   -   (19)  8 
Other 96   143   337   369 
Total Other Income 1,774   1,655   6,124   5,057 
        
OTHER EXPENSES       
Salaries and employee benefits 3,243   2,919   9,672   8,488 
Occupancy, net 463   410   1,399   1,330 
Data processing 529   468   1,626   1,251 
Furniture and equipment 248   221   764   645 
Advertising and promotion 63   65   254   225 
Professional fees 219   161   570   480 
Director fees 159   105   378   418 
FDIC assessment 138   120   379   368 
Insurance 67   69   213   189 
Stationary and supplies 47   49   149   154 
Loan collection costs 24   19   109   175 
Expenses and write-downs related to foreclosed real estate 98   277   317   476 
Other 353   480   1,029   1,156 
Total Other Expenses 5,651   5,363   16,859   15,355 
        
Income before Income Taxes 2,013   1,341   6,022   3,977 
 INCOME TAX EXPENSE  696   390   2,022   1,190 
Net Income $1,317  $951  $4,000  $2,787 
        
OTHER COMPREHENSIVE INCOME (LOSS):       
Unrealized gains on available for sale securities arising during the period$(575) $1,024  $1,986  $174 
Fair value adjustments on derivatives 190   -   (1,359)  - 
Reclassification adjustment for net gain on securities transactions included in net income (89)  (11)  (361)  (267)
Income tax related to items of other comprehensive income (loss) 190   (405)  (106)  37 
Other comprehensive income, net of income taxes (284)  608   160   (56)
Comprehensive income$1,033  $1,559  $4,160  $2,731 
        
EARNINGS PER SHARE       
Basic$0.28  $0.21  $0.87  $0.61 
Diluted$0.28  $0.21  $0.86  $0.61 
                

 

SUSSEX BANCORP 
COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES 
(Dollars In Thousands) 
(Unaudited) 
              
  Three Months Ended September 30, 
  2016
 2015
 
    Average   Average    Average   Average  
   Balance  Interest Rate (2)  Balance  Interest Rate (2) 
Earning Assets:             
Securities:             
Tax exempt (3) $31,849  $306   3.81% $34,371  $347   4.01% 
Taxable  71,496   396   2.20%  69,546   321   1.83% 
Total securities  103,345   702   2.69%  103,917   668   2.55% 
Total loans receivable (1) (4)  652,766   6,971   4.24%  487,545   5,390   4.39% 
Other interest-earning assets  9,445   7   0.29%  6,236   1   0.06% 
Total earning assets  765,556   7,680   3.98%  597,698   6,059   4.02% 
              
Non-interest earning assets  41,759       37,918      
Allowance for loan losses  (6,141)      (5,677)     
Total Assets $801,174      $629,939      
              
Sources of Funds:             
Interest bearing deposits:             
NOW $144,840  $78   0.21% $129,487  $57   0.17% 
Money market  37,881   39   0.41%  18,504   10   0.21% 
Savings  137,455   72   0.21%  138,020   70   0.20% 
Time  166,847   430   1.02%  120,397   311   1.02% 
Total interest bearing deposits  487,023   619   0.50%  406,408   448   0.44% 
Borrowed funds  111,493   508   1.81%  62,586   390   2.47% 
Junior subordinated debentures  12,887   100   3.07%  12,887   55   1.69% 
Total interest bearing liabilities  611,403   1,227   0.80%  481,881   893   0.74% 
              
Non-interest bearing liabilities:             
Demand deposits  126,783       91,454      
Other liabilities  4,843       3,934      
Total non-interest bearing liabilities  131,626       95,388      
Stockholders' equity  58,145       52,670      
Total Liabilities and Stockholders' Equity $801,174      $629,939      
              
Net Interest Income and Margin (5)    6,453   3.34%    5,166   3.43% 
Tax-equivalent basis adjustment    (105)      (116)   
Net Interest Income   $6,348      $5,050    
              
(1) Includes loan fee income             
(2) Average rates on securities are calculated on amortized costs           
(3) Full taxable equivalent basis, using a 39% effective tax rate and adjusted for TEFRA (Tax and Equity Fiscal Responsibility Act) interest expense disallowance 
(4) Loans outstanding include non-accrual loans             
(5) Represents the difference between interest earned and interest paid, divided by average total interest-earning assets     
              
              
SUSSEX BANCORP 
COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES 
(Dollars In Thousands) 
(Unaudited) 
              
  Nine Months Ended September 30, 
  2016
 2015
 
    Average   Average    Average   Average  
   Balance  Interest Rate (2)  Balance  Interest Rate (2) 
Earning Assets:             
Securities:             
Tax exempt (3) $30,402  $890   3.91% $33,050  $990   4.00% 
Taxable  70,195   1,116   2.12%  63,765   890   1.87% 
Total securities  100,597   2,006   2.66%  96,815   1,880   2.60% 
Total loans receivable (1) (4)  607,044   19,575   4.31%  478,151   15,837   4.43% 
Other interest-earning assets  9,154   17   0.25%  7,396   8   0.14% 
Total earning assets  716,795   21,598   4.02%  582,362   17,725   4.07% 
              
Non-interest earning assets  40,063       37,958      
Allowance for loan losses  (5,894)      (5,719)     
Total Assets $750,964      $614,601      
              
Sources of Funds:             
Interest bearing deposits:             
NOW $142,911  $229   0.21% $128,686  $162   0.17% 
Money market  34,902   105   0.40%  16,332   23   0.19% 
Savings  138,174   214   0.21%  139,828   212   0.20% 
Time  157,235   1,282   1.09%  117,025   905   1.03% 
Total interest bearing deposits  473,222   1,830   0.52%  401,871   1,302   0.43% 
Borrowed funds  89,803   1,393   2.07%  61,179   1,150   2.51% 
Junior subordinated debentures  12,887   266   2.75%  12,887   162   1.68% 
Total interest bearing liabilities  575,912   3,489   0.81%  475,937   2,614   0.73% 
              
Non-interest bearing liabilities:             
Demand deposits  113,504       82,391      
Other liabilities  4,890       3,926      
Total non-interest bearing liabilities  118,394       86,317      
Stockholders' equity  56,658       52,347      
Total Liabilities and Stockholders' Equity $750,964      $614,601      
              
Net Interest Income and Margin (5)    18,109   3.37%    15,111   3.47% 
Tax-equivalent basis adjustment    (298)      (330)   
Net Interest Income   $17,811      $14,781    
              
(1) Includes loan fee income             
(2) Average rates on securities are calculated on amortized costs           
(3) Full taxable equivalent basis, using a 39% effective tax rate and adjusted for TEFRA (Tax and Equity Fiscal Responsibility Act) interest expense disallowance 
(4) Loans outstanding include non-accrual loans             
(5) Represents the difference between interest earned and interest paid, divided by average total interest-earning assets     
      

 

SUSSEX BANCORP
Segment Reporting
(Dollars In Thousands)
(Unaudited)
                   
                   
 Three Months Ended September 30, 2016  Three Months Ended September 30, 2015
 Banking and        Banking and      
 Financial Insurance     Financial Insurance   
 Services Services Total  Services Services Total
Net interest income from external sources$6,348 $- $6,348  $5,050 $- $5,050
Other income from external sources 707  1,067  1,774   694  961  1,655
Depreciation and amortization 282  8  290   245  4  249
Income before income taxes 1,848  165  2,013   1,168  173  1,341
Income tax expense (1) 630  66  696   321  69  390
Total assets 803,032  5,955  808,987   639,563  4,456  644,019
                   
                   
                   
 Nine Months Ended September 30, 2016  Nine Months Ended September 30, 2015
 Banking and        Banking and      
 Financial Insurance     Financial Insurance   
 Services Services Total  Services Services Total
Net interest income from external sources$17,811 $- $17,811  $14,781 $- $14,781
Other income from external sources 2,274  3,850  6,124   2,195  2,862  5,057
Depreciation and amortization 815  21  836   731  15  746
Income before income taxes 4,918  1,104  6,022   3,376  601  3,977
Income tax expense (1) 1,580  442  2,022   950  240  1,190
Total assets 803,032  5,955  808,987   639,563  4,456  644,019
                   
(1) Calculated at statutory tax rate of 40%                  
                   
Contacts: Anthony Labozzetta, President/CEO Steven Fusco, SEVP/CFO 844-256-7328

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