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Sussex Bancorp Reports a 49% Increase in Net Income for the Third Quarter 2017 and Declared a Cash Dividend

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ROCKAWAY, N.J., Oct. 30, 2017 (GLOBE NEWSWIRE) -- Sussex Bancorp (the "Company") (NASDAQ:SBBX), the holding company for Sussex Bank (the "Bank"), today announced a 49.1% increase in net income to $2.0 million, or $0.33 per basic and diluted common share, for the quarter ended September 30, 2017, as compared to $1.3 million, or $0.28 per basic and diluted share, for the same period last year. Also, the Company announced a 29.5% increase in net income or $1.00 per diluted common share for the nine months ended September 30, 2017 as compared to $0.86 for the same period last year.  During the nine months ended September 30, 2017, net income and earnings per share were impacted by costs related to the pending acquisition of Community Bank of Bergen County, NJ ("Community") and expenses incurred in connection with a S-3 registration statement ("S-3 registration") filed in the second quarter of 2017 with the Securities and Exchange Commission.  Diluted earnings per share, excluding expenses net of tax related to the pending acquisition of Community, expenses related to the S-3 registration net of tax and the weighted average number of shares issued in the capital raise completed in the second quarter of 2017, increased 36.1%, or $0.31, to $1.18 for the nine months ended September 30, 2017. 

"I am very excited about the momentum in our business units.  As a result, I am pleased to report a 49% increase in net income, which was driven by 20% and 19% growth in loans and deposits, respectively," said Anthony Labozzetta, President and Chief Executive Officer of Sussex Bancorp and Bank.  Mr. Labozzetta also stated, "We continue to execute our plan to build a better bank and as such we have a couple of strategic initiatives that we expect to complete within the next few months: first, our partnership with Community, which we expect to close in early January; second, we are also very excited about the future opening of our newest regional banking and lending center in Weehawken, NJ (Hudson County NJ).  Much like our successful banking centers in Oradell, NJ and Astoria, NY, it is a market that we are familiar with and in which we are already doing business.  Once we have a physical presence, we expect more rapid growth in that market."

Previously Announced Merger with Community Bank of Bergen County, NJ (OTCMKTS: CMTB)
The Company has received regulatory approvals from The New Jersey Department of Banking and Insurance and the FDIC to complete the previously announced merger of Community with and into Sussex Bank. 

The merger is still subject to a number of conditions, including shareholder and final regulatory approval and other customary closing conditions.  Sussex Bancorp has filed a S-4 registration and joint proxy statement with the Securities Exchange Commission ("SEC"). The merger is expected to be completed in the first quarter of 2018.

The Company, Sussex Bank and Community entered into the merger agreement on April 10, 2017.  Under the terms of the merger agreement Community will merge with and into Sussex Bank and each outstanding share of Community common stock will be exchanged for 0.97 shares of the Company's common stock.

The merger will enhance and expand Sussex Bank's presence in Bergen County, New Jersey with the addition of 3 full service branch locations in that county, which will complement Sussex Bank's existing location in Oradell, New Jersey.  As of December 31, 2016, Community headquartered in Maywood, New Jersey, had approximately $341 million of total assets, $229 million of loans and $304 million of deposits.  Based on financials as of December 31, 2016, the combined company will have approximately $1.2 billion in assets, $925 million in gross loans, and $965 million in deposits upon completion of the transaction. 

Declaration of Quarterly Dividend
On October 27, 2017,  the Company's Board of Directors declared a quarterly cash dividend of $0.06 per share, which is payable on November 24, 2017 to common shareholders of record as of the close of business on November 10, 2017.

Financial Performance
Net Income. For the quarter ended September 30, 2017, the Company reported net income of $2.0 million, or $0.33 per basic and diluted share, as compared to net income of $1.3 million, or $0.28 per basic and diluted share, for the same period last year.  The increase in net income for the quarter ended September 30, 2017 was driven by a $1.2 million, or 19.3%, increase in net interest income resulting from strong loan and deposit growth of 19.9% and 18.7%, respectively, which is partially offset by a $454 thousand increase in overall interest expense partly related to the $15.0 million  private placement of subordinated notes completed in the fourth quarter of 2016 and an increase in interest expense related to growth and higher costs for interest bearing deposits. The aforementioned growth in net interest income was partly offset by an increase in non-interest expenses of $643 thousand mostly due to costs to support the Company's growth and expenses and write-downs related to foreclosed real estate.  

For the nine months ended September 30, 2017, the Company reported net income of $5.2 million, or $1.00 per diluted share, or a 29.5% increase, as compared to net income of $4.0 million, or $0.86 per diluted share, for the same period last year. The increase in net income for the nine months ended September 30, 2017 was largely due to an increase in net interest income of $3.4 million, which was partially offset by an increase in non-interest expenses of $1.9 million. The increase in non-interest expenses was largely due to an $1.3 million increase in salaries and employee benefits and expenses related to the pending acquisition of Community of $482 thousand. Excluding expenses net of tax related to the pending acquisition of Community and expenses related to the S-3 registration net of tax, net income increased $1.6 million, or 39.2%, for the nine months ended September 30, 2017.

Net Interest Income.  Net interest income on a fully tax equivalent basis increased $1.3 million, or 19.8%, to $7.7 million for the third quarter of 2017, as compared to $6.5 million for the same period in 2016.  The increase in net interest income was largely due to a $131.7 million, or 17.2%, increase in average interest earning assets, principally loans receivable, which increased $126.0 million, or 19.3%. The net interest margin increased by 8 basis points to 3.42% for the third quarter of 2017, as compared to the same period in 2016.  The net interest margin increase was attributed to $205 thousand in prepayment penalties.  

Net interest income on a fully tax equivalent basis increased $3.6 million, or 19.8%, to $21.7 million for the first nine months of 2017 as compared to $18.1 million for the same period in 2016. Included in the increase in net interest income was $457 thousand in prepayment penalties on $31.4 million of commercial loans.  For the nine months of 2017 and 2016, net interest margin was unchanged at 3.37%.

Provision for Loan Losses. Provision for loan losses decreased $118 thousand to $340 thousand for the third quarter of 2017, as compared to $458 thousand for the same period in 2016.

Provision for loan losses increased $73 thousand, or 6.9%, to $1.1 million for the first nine months of 2017, as compared to the same period in 2016.

Non-interest Income. Non-interest income increased $255 thousand, or 14.4%, to $2.0 million for the third quarter of 2017, as compared to the same period last year.  The increase was principally due to growth of $173 thousand in insurance commissions and fees relating to Tri-State Insurance Agency, $71 thousand in other income and $70 thousand in bank owned life insurance.  The aforementioned was partly offset by a reduction in gain on sales of securities of approximately $115 thousand. 

The Company's non-interest income increased $200 thousand, or 3.3%, to $6.3 million for the first nine months of 2017 as compared to the same period last year.  The increase was principally due to growth of $303 thousand in insurance commissions and fees relating to Tri-State Insurance Agency and an increase of $153 thousand in bank owned life insurance, mostly due to an increase in investments in bank owned life insurance.  The aforementioned was partly offset by  a reduction in gain on sales of securities of approximately $310 thousand.

Non-interest Expense. The Company's non-interest expenses increased $643 thousand, or 11.4%, to $6.3 million for the third quarter of 2017, as compared to the same period last year. The increase for the third quarter of 2017, as compared to the same period in 2016, was largely due to increases in salaries and employee benefits of $512 thousand and expenses and write-downs related to foreclosed real estate of $123 thousand.    

The Company's non-interest expenses increased $1.9 million, or 11.5%, to $18.8 million for the first nine months of 2017 as compared to the same period last year.  The increase for the first nine months of 2017, as compared to the same period in 2016, was largely due to increases in salaries and employee benefits of $1.3 million, expenses of $482 thousand related to the pending acquisition of Community, other expenses of $317 thousand which includes $75 thousand related to S-3 registration, and professional fees of $208 thousand and was partly offset by a decrease of $186 thousand in FDIC assessment.

The increase in salaries and employee benefits for the third quarter and first nine months of 2017 as compared to the same periods in 2016 was largely due to an increase in personnel to support our growth.   

Financial Condition
At September 30, 2017, the Company's total assets were $956.8 million, an increase of $108.1 million, or 12.7%, as compared to total assets of $848.7 million at December 31, 2016.  The increase in total assets was largely driven by growth in loans receivable of $99.9 million, or 14.4%. 

Total loans receivable, net of unearned income, increased $99.9 million, or 14.4%, to $795.1 million at September 30, 2017, as compared to $695.3 million at December 31, 2016.  During the nine months ended September 30, 2017, the Company had $139.5 million in commercial loan production, which was partly offset by $31.4 million in commercial loan payoffs.

The Company's total deposits increased $81.0 million, or 12.3%, to $741.9 million at September 30, 2017, from $660.9 million at December 31, 2016.  The growth in deposits was primarily due to an increase in interest bearing deposits of $64.6 million, or 12.2%, at September 30, 2017, as compared to December 31, 2016. Included in the aforementioned deposit total is $85.3 million with a cost of 0.59% attributed to our branch in Oradell, New Jersey, which opened in the beginning of March 2016, an increase of $25.3 million or 42.2% from December 31, 2016.  Additionally, the Company's wholesale deposits increased $23.4 million, or 27.7%, to $108.0 million at September 30, 2017 from $84.6 at December 31, 2016. 

At September 30, 2017, the Company's total stockholders' equity was $93.9 million, an increase of $33.9 million when compared to December 31, 2016.  The increase was largely due to the capital raise of $28.0 million and net income for the nine months ended September 30, 2017.  The Company completed the capital raise on June 21, 2017 which was the primary driver in the book value increase of 22.7% from $12.67 to $15.55.  At September 30, 2017, the leverage, Tier I risk-based capital, total risk-based capital and common equity Tier I capital ratios for the Bank were 12.14%, 14.82%, 15.80% and 14.82%, respectively, all in excess of the ratios required to be deemed "well-capitalized."

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 decreased to 1.03% at September 30, 2017 from 1.10% at December 31, 2016.  NPAs increased $471 thousand, or 5.0%, to $9.8 million at September 30, 2017, as compared to $9.3 million at December 31, 2016.  There were no loans 90 days past due and still accruing at September 30, 2017 as compared to $468 thousand at December 31, 2016.  Non-accrual loans increased $771 thousand, or 13.2%, to $6.6 million at September 30, 2017, as compared to $5.8 million at December 31, 2016.  Loans past due 30 to 89 days totaled $1.6 million at September 30, 2017, representing a decrease of $212 thousand, or 11.5%, as compared to $1.8 million at December 31, 2016.

The Company continues to actively market its foreclosed real estate properties, which decreased $92 thousand to $2.3 million at September 30, 2017 as compared to $2.4 million at December 31, 2016.  At September 30, 2017, the Company's foreclosed real estate properties had an average carrying value of approximately $253 thousand per property.

The allowance for loan losses increased by $806 thousand, or 12.0%, to $7.5 million, or 0.94% of total loans, at September 30, 2017, compared to $6.7 million, or 0.96% of total loans, at December 31, 2016. The Company recorded $1.1 million in provision for loan losses for the nine months ended September 30, 2017 and 2016. Additionally, the Company recorded net charge-offs of $321 thousand for the nine months ended September 30, 2017, as compared to $313 thousand in net charge-offs for the nine months ended September 30, 2016. The allowance for loan losses as a percentage of non-accrual loans decreased to 113.6% at September 30, 2017 from 114.8% at December 31, 2016.

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.  In November 2016, SBBX earned the honor of being named one of the 50 Fastest Growing Companies in New Jersey by NJBIZ Magazine and was the highest ranked bank on the list.  Anthony Labozzetta, President and Chief Executive Officer of Sussex Bancorp, was named American Banker's Community Banker of the Year in 2016 and in February 2017, was recognized by Forbes magazine as one of America's Business Leaders in Banking. In October 2017, Sussex Bancorp was recognized as one of the top 29 banks and thrifts nationwide and one of three from New Jersey that comprise the Sandler O'Neill Sm-All Stars Class of 2017.  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, the ability of its borrowers to comply with repayment terms, failure to complete the proposed acquisition of Community, the imposition of adverse regulatory conditions in connection with regulatory approval of the proposed acquisition of Community, disruption to the parties' businesses as a result of the announcement and pendency of the acquisition of Community, the inability to realize expected cost savings or to implement integration plans and other adverse consequences associated with the acquisition of Community.  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, 2016 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.

Contacts: Anthony Labozzetta, President/CEO
Steven Fusco, SEVP/CFO
844-256-7328

 

SUSSEX BANCORP
SUMMARY FINANCIAL HIGHLIGHTS
(In Thousands, Except Percentages and Per Share Data)
(Unaudited)
                                   
                  9/30/2017 VS.
    9/30/2017   12/31/2016   9/30/2016   9/30/2016   12/31/2016
 BALANCE SHEET HIGHLIGHTS - Period End Balances                             
 Total securities    $ 109,053     $ 100,229     $ 98,258         11.0   %       8.8   %
 Total loans      795,124       695,257       663,258         19.9   %       14.4   %
 Allowance for loan losses        (7,502 )       (6,696 )       (6,331 )       18.5   %       12.0   %
 Total assets      956,802       848,728       808,987         18.3   %       12.7   %
 Total deposits      741,928       660,921       624,921         18.7   %       12.3   %
 Total borrowings and junior subordinated debt        116,556         123,645         120,387         (3.2 ) %       (5.7 ) %
 Total shareholders' equity        93,944         60,072         58,633         60.2   %       56.4   %
                                   
 FINANCIAL DATA - QUARTER ENDED:                                   
 Net interest income (tax equivalent) (a)    $ 7,732     $ 6,704     $ 6,453         19.8   %       15.3   %
 Provision for loan losses      340       237       458         (25.8 ) %       43.5   %
 Total other income      2,029       1,705       1,774         14.4   %       19.0   %
 Total other expenses      6,294       5,726       5,651         11.4   %       9.9   %
 Income before provision for income taxes (tax equivalent)        3,127         2,446         2,118         47.6   %       27.8   %
 Provision for income taxes      1,006       806       696         44.5   %       24.8   %
 Taxable equivalent adjustment (a)      158       117       105         50.5   %       35.0   %
 Net income    $ 1,963     $ 1,523     $ 1,317         49.1   %       28.9   %
                                   
 Net income per common share - Basic    $ 0.33     $ 0.33     $ 0.28         17.9   %       -    %
 Net income per common share - Diluted    $ 0.33     $ 0.32     $ 0.28         17.9   %       3.1   %
                                   
 Return on average assets        0.84   %   0.74   %   0.66   %   27.5   %       14.0   %
 Return on average equity        8.40   %   10.14   %   9.06   %   (7.3 ) %       (17.1 ) %
 Efficiency ratio (b)        65.54   %   69.05   %   69.58   %   (5.8 ) %       (5.1 ) %
 Net interest margin (tax equivalent)        3.42   %   3.35   %   3.34   %   2.4   %       2.1   %
 Avg. interest earning assets/Avg. interest bearing liabilities        1.29         1.25         1.25         3.1   %       2.9   %
                                   
 FINANCIAL DATA - YEAR TO DATE:                                   
 Net interest income (tax equivalent) (a)    $ 21,694           $ 18,109         19.8   %        
 Provision for loan losses      1,127             1,054         6.9   %        
 Total other income        6,324               6,124         3.3   %        
 Total other expenses      18,797             16,859         11.5   %        
 Income before provision for income taxes (tax equivalent)        8,094               6,320         28.1   %        
 Provision for income taxes        2,440               2,022         20.7   %        
 Taxable equivalent adjustment (a)        476               298         59.7   %        
 Net income    $   5,178           $   4,000         29.5   %        
                                   
 Net income per common share - Basic    $ 1.00           $ 0.87         14.9   %        
 Net income per common share - Diluted    $ 1.00           $ 0.86         16.3   %        
                                   
 Return on average assets        0.77   %         0.71   %   8.2   %        
 Return on average equity        9.33   %         9.41   %   (0.9 ) %        
 Efficiency ratio (b)        68.25   %         70.44   %   (3.1 ) %        
 Net interest margin (tax equivalent)        3.37   %         3.37   %   -    %        
 Avg. interest earning assets/Avg. interest bearing liabilities        1.26               1.24         1.2   %        
                                   
 SHARE INFORMATION:                                   
 Book value per common share    $   15.55     $   12.67     $   12.37         25.8   %       22.8   %
 Tangible book value per common share        15.09         12.08         11.77         28.2   %       24.9   %
Outstanding shares- period ending     6,040,180       4,741,068       4,741,720         27.4   %       27.4   %
Average diluted shares outstanding (year to date)     5,200,466       4,651,108       4,633,473         12.2   %       11.8   %
                                   
 CAPITAL RATIOS:                                   
 Total equity to total assets        9.82   %   7.08   %   7.25   %   35.5   %       38.7   %
 Leverage ratio (c)      12.14   % 10.41   % 8.98   %   35.2   %       16.6   %
 Tier 1 risk-based capital ratio (c)      14.82   % 12.87   % 11.02   %   34.5   %       15.2   %
 Total risk-based capital ratio (c)      15.80   % 13.86   % 11.99   %   31.8   %       14.0   %
 Common equity Tier 1 capital ratio (c)      14.82   % 12.87   %   11.02   %   34.5   %       15.2   %
                                   
 ASSET QUALITY:                                   
 Non-accrual loans    $ 6,604     $ 5,833     $ 4,583         44.1   %       13.2   %
 Loans 90 days past due and still accruing        -          468         386         -    %       (100.0 ) %
 Troubled debt restructured loans ("TDRs") (d)        939         679         1,142         (17.8 ) %       38.3   %
 Foreclosed real estate        2,275         2,367         3,005         (24.3 ) %       (3.9 ) %
 Non-performing assets ("NPAs")    $ 9,818     $ 9,347     $ 9,116         7.7   %       5.0   %
                                   
 Foreclosed real estate, criticized and classified assets    $ 20,285     $ 20,450     $ 19,777         2.6   %       (0.8 ) %
 Loans past due 30 to 89 days    $ 1,628     $ 1,840     $ 7,580         (78.5 ) %       (11.5 ) %
 Charge-offs (Recoveries) , net (quarterly)    $   3     $   (128 )   $   115         (97.4 ) %       (102.3 ) %
 Charge-offs (Recoveries) , net as a % of average loans (annualized)        0.00   %   (0.08 ) %   0.07   %   (97.8 ) %       (102.0 ) %
 Non-accrual loans to total loans        0.83   %   0.84   %   0.69   %   20.2   %       (1.0 ) %
 NPAs to total assets        1.03   %   1.10   %   1.13   %   (8.9 ) %       (6.8 ) %
 NPAs excluding TDR loans (d) to total assets        0.93   %   1.02   %   0.99   %   (5.9 ) %       (9.1 ) %
 Non-accrual loans to total assets        0.69   %   0.69   %   0.57   %   21.8   %       0.4   %
 Allowance for loan losses as a % of non-accrual loans        113.60   %   114.80   %   138.14   %   (17.8 ) %       (1.0 ) %
 Allowance for loan losses to total loans        0.94   %   0.96   %   0.95   %   (1.2 ) %       (2.0 ) %
                                   
 (a) Full taxable equivalent basis, using a 34% 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)  
           
ASSETS September 30, 2017     December 31, 2016  
         
Cash and due from banks $   3,028     $   2,847  
Interest-bearing deposits with other banks     7,741         11,791  
  Cash and cash equivalents     10,769         14,638  
           
Interest bearing time deposits with other banks     100         100  
Securities available for sale, at fair value     100,978         88,611  
Securities held to maturity     8,075         11,618  
Federal Home Loan Bank Stock, at cost     5,081         5,106  
           
Loans receivable, net of unearned income     795,124         695,257  
  Less:  allowance for loan losses     7,502         6,696  
    Net loans receivable     787,622         688,561  
           
Foreclosed real estate     2,275         2,367  
Premises and equipment, net     7,683         8,728  
Accrued interest receivable     2,562         2,058  
Goodwill     2,820         2,820  
Bank-owned life insurance     21,910         16,532  
Other assets     6,927         7,589  
           
Total Assets $   956,802     $   848,728  
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
           
Liabilities:          
  Deposits:          
    Non-interest bearing  $   148,861     $   132,434  
    Interest bearing      593,067         528,487  
  Total Deposits     741,928         660,921  
           
Borrowings     88,710         95,805  
Accrued interest payable and other liabilities     4,374         4,090  
Subordinated debentures     27,846         27,840  
           
Total Liabilities     862,858         788,656  
           
Total Stockholders' Equity     93,944         60,072  
           
Total Liabilities and Stockholders' Equity $   956,802     $   848,728  
           

 

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,
    2017       2016       2017       2016  
INTEREST INCOME               
               
  Loans receivable, including fees $   8,556     $   6,971     $   24,030     $   19,575  
  Securities:              
    Taxable     379         396         1,064         1,116  
    Tax-exempt     314         201         943         592  
  Interest bearing deposits     6         7         28         17  
       Total Interest Income     9,255         7,575         26,065         21,300  
               
INTEREST EXPENSE              
  Deposits     963         619         2,532         1,830  
  Borrowings     398         508         1,358         1,393  
  Junior subordinated debentures     320         100         957         266  
     Total Interest Expense     1,681         1,227         4,847         3,489  
               
     Net Interest Income     7,574         6,348         21,218         17,811  
PROVISION FOR LOAN LOSSES     340         458         1,127         1,054  
     Net Interest Income after Provision for Loan Losses     7,234         5,890         20,091         16,757  
               
OTHER INCOME              
  Service fees on deposit accounts     274         245         812         726  
  ATM and debit card fees     198         190         578         577  
  Bank owned life insurance     144         74         378         225  
  Insurance commissions and fees     1,263         1,090         4,153         3,850  
  Investment brokerage fees     9         (10 )       12         67  
  (Loss) gain on securities transactions     (26 )       89         51         361  
  (Loss) on disposal of fixed assets     -         -         -         (19 )
  Other     167         96         340         337  
   Total Other Income     2,029         1,774         6,324         6,124  
               
OTHER EXPENSES              
  Salaries and employee benefits     3,755         3,243         10,990         9,672  
  Occupancy, net     462         463         1,418         1,399  
  Data processing     565         529         1,643         1,626  
  Furniture and equipment     231         248         705         764  
  Advertising and promotion     64         63         259         254  
  Professional fees     303         219         778         570  
  Director fees     94         159         290         378  
  FDIC assessment     49         138         193         379  
  Insurance     70         67         202         213  
  Stationary and supplies     42         47         118         149  
  Merger-related expenses     1         -         482         -  
  Loan collection costs     23         24         75         109  
  Expenses and write-downs related to foreclosed real estate     221         98         298         317  
  Other      414         353         1,346         1,029  
   Total Other Expenses     6,294         5,651         18,797         16,859  
               
   Income before Income Taxes     2,969         2,013         7,618         6,022  
 INCOME TAX EXPENSE      1,006         696         2,440         2,022  
   Net Income  $   1,963     $   1,317     $   5,178     $   4,000  
               
OTHER COMPREHENSIVE INCOME (LOSS):              
Unrealized (loss) gains on available for sale securities arising during the period $   (10 )   $   (575 )   $   1,810     $   1,986  
Fair value adjustments on derivatives     (63 )       190         (478 )       (1,359 )
Reclassification adjustment for net loss (gain) on securities transactions included in net income     26         (89 )       (51 )       (361 )
Income tax related to items of other comprehensive income (loss)      18         190         (513 )       (106 )
Other comprehensive income, net of income taxes     (29 )       (284 )       768         160  
Comprehensive income $   1,934     $   1,033     $   5,946     $   4,160  
               
EARNINGS PER SHARE              
               
    Basic $   0.33     $   0.28     $   1.00     $   0.87  
    Diluted $   0.33     $   0.28     $   1.00     $   0.86  

 

SUSSEX BANCORP  
COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES  
(Dollars In Thousands)  
(Unaudited)  
                           
    Three Months Ended September 30,  
      2017               2016            
      Average       Average      Average       Average   
     Balance    Interest   Rate (2)    Balance    Interest   Rate (2)  
Earning Assets:                          
Securities:                          
  Tax exempt (3)   $   45,252     $   472     4.14 %   $   31,849     $   306     3.81 %  
  Taxable        66,235         379     2.27 %       71,496         396     2.20 %  
Total securities       111,487         851     3.03 %       103,345         702     2.69 %  
Total loans receivable (1) (4)       778,809         8,556     4.36 %       652,766         6,971     4.24 %  
Other interest-earning assets       6,945         6     0.34 %       9,445         7     0.29 %  
Total earning assets       897,241         9,413     4.16 %     765,556         7,680     3.98 %  
                           
Non-interest earning assets       46,944                 41,759            
Allowance for loan losses       (7,237 )               (6,141 )          
Total Assets   $   936,948             $   801,174            
                           
Sources of Funds:                          
Interest bearing deposits:                          
  NOW    $   181,631     $   150     0.33 %   $   144,840     $   78     0.21 %  
  Money market        99,547         243     0.97 %       37,881         39     0.41 %  
  Savings        137,559         72     0.21 %       137,455         72     0.21 %  
  Time        173,553         498     1.14 %       166,847         430     1.02 %  
Total interest bearing deposits       592,290         963     0.65 %     487,023         619     0.50 %  
  Borrowed funds     74,939       398     2.11 %     111,493         508     1.81 %  
  Subordinated debentures     27,845       320     4.56 %     12,887         100     3.08 %  
Total interest bearing liabilities       695,074         1,681     0.96 %     611,403         1,227     0.80 %  
                           
Non-interest bearing liabilities:                          
  Demand deposits       144,231                 126,783            
  Other liabilities       4,193                 4,843            
Total non-interest bearing liabilities       148,424                 131,626            
Stockholders' equity       93,450                 58,145            
Total Liabilities and Stockholders' Equity   $   936,948             $   801,174            
                           
Net Interest Income and Margin (5)           7,732     3.42 %           6,453     3.34 %  
Tax-equivalent basis adjustment            (158 )               (105 )      
Net Interest Income        $   7,574             $   6,348        
                           
(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,  
      2017               2016            
      Average       Average      Average       Average   
     Balance    Interest   Rate (2)    Balance    Interest   Rate (2)  
Earning Assets:                          
Securities:                          
  Tax exempt (3)   $   46,188     $   1,419     4.11 %   $   30,402     $   890     3.91 %  
  Taxable        65,169         1,064     2.18 %       70,195         1,116     2.12 %  
Total securities       111,357         2,483     2.98 %       100,597         2,006     2.66 %  
Total loans receivable (1) (4)       740,451         24,030     4.34 %       607,044         19,575     4.31 %  
Other interest-earning assets       8,976         28     0.42 %       9,154         17     0.25 %  
Total earning assets     860,784         26,541     4.12 %     716,795         21,598     4.02 %  
                           
Non-interest earning assets       44,474                 40,063            
Allowance for loan losses       (6,974 )               (5,894 )          
Total Assets   $   898,284             $   750,964            
                           
Sources of Funds:                          
Interest bearing deposits:                          
  NOW    $   180,378     $   399     0.30 %   $   142,911     $   229     0.21 %  
  Money market        91,614         593     0.87 %       34,902         105     0.40 %  
  Savings        137,901         215     0.21 %       138,174         214     0.21 %  
  Time        165,861         1,325     1.07 %       157,235         1,282     1.09 %  
Total interest bearing deposits     575,754         2,532     0.59 %     473,222         1,830     0.52 %  
  Borrowed funds     79,999         1,358     2.27 %     89,803         1,393     2.07 %  
  Subordinated debentures     27,842         957     4.60 %     12,887         266     2.76 %  
Total interest bearing liabilities     683,595         4,847     0.95 %     575,912         3,489     0.81 %  
                           
Non-interest bearing liabilities:                          
  Demand deposits       136,642                 113,504            
  Other liabilities       4,050                 4,890            
Total non-interest bearing liabilities       140,692                 118,394            
Stockholders' equity       73,997                 56,658            
Total Liabilities and Stockholders' Equity   $   898,284             $   750,964            
                           
Net Interest Income and Margin (5)           21,694     3.37 %           18,109     3.37 %  
Tax-equivalent basis adjustment            (476 )               (298 )      
Net Interest Income        $   21,218             $   17,811        
                           
(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, 2017   Three Months Ended September 30, 2016
  Banking and               Banking and            
  Financial   Insurance         Financial   Insurance      
  Services   Services   Total   Services   Services   Total
Net interest income from external sources $   7,574   $   -   $   7,574   $   6,348   $   -   $   6,348
Other income from external sources     756       1,273       2,029       707       1,067       1,774
Depreciation and amortization     255       6       261       283       8       291
Income before income taxes     2,775       194       2,969       1,848       165       2,013
Income tax expense (1)     928       78       1,006       630       66       696
Total assets     950,661       6,141       956,802       803,032       5,955       808,987
                                   
                                   
                                   
  Nine Months Ended September 30, 2017   Nine Months Ended September 30, 2016
  Banking and               Banking and            
  Financial   Insurance         Financial   Insurance      
  Services   Services   Total   Services   Services   Total
Net interest income from external sources $   21,218   $   -   $   21,218   $   17,811   $   -   $   17,811
Other income from external sources     2,141       4,183       6,324       2,274       3,850       6,124
Depreciation and amortization     780       19       799       816       21       837
Income before income taxes     6,424       1,194       7,618       4,918       1,104       6,022
Income tax expense (1)     1,962       478       2,440       1,580       442       2,022
Total assets     950,661       6,141       956,802       803,032       5,955       808,987
                                   
(1) Calculated at statutory tax rate of 40% for the insurance services segment                        

 

SUSSEX BANCORP
Non-GAAP Reporting
(Dollars In Thousands)
(Unaudited)
           
           
  Nine Months Ended September 30, 
  2017     2016  
Net income (GAAP) $   5,178     $   4,000  
Merger related expenses net of tax (1)     345         -  
S-3 Registration filing expenses net of tax (1)     45         -  
Net income, as adjusted $   5,568     $   4,000  
           
Average diluted shares outstanding (GAAP)     5,200,466         4,633,473  
Average diluted shares from capital raise (2)     462,454         -  
Average diluted shares outstanding, as adjusted     4,738,012         4,633,473  
           
Diluted EPS, as adjusted $   1.18     $   0.86  
Return on average assets, as adjusted   0.83 %     0.71 %
Return on average equity, as adjusted   10.03 %     9.41 %
           
(1) Merger related expenses net of tax expenses of $136 thousand; S-3 registration filing net of tax expenses of $30 thousand.
(2) Calculation is based on 1,249,999 common stock shares issued and outstanding as part of the capital raise completed on June 21, 2017 divided by the number of days in the period.

 

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