ROCKAWAY, N.J., April 25, 2018 (GLOBE NEWSWIRE) -- Sussex Bancorp (the "Company") SBBX, the holding company for Sussex Bank (the "Bank"), today reported net income of $1.3 million, or $0.17 per basic and diluted share, for the quarter ended March 31, 2018, as compared to $2.0 million, or $0.43 per basic and diluted share, for the same period last year. The decrease in net income was mainly attributable to merger-related costs associated with the January 4th merger of Community Bank of Bergen County ("Community Bank"), NJ with and into the Bank, partially offset by an increase in net income due to the addition of Community Bank's operations following the merger. As of January 4, 2018, Community Bank had total assets, loans and deposits of $343.8 million, $236.1 million and $301.2 million, respectively. The first quarter of 2018 included the independent operations and expenses of both the Company and Community Bank, until March 26, 2018 when the Company completed all systems integrations and are now operating under one company platform.
The Company's net income, adjusted for tax effected merger-related expenses of $2.4 million, increased $1.7 million, or 82.8%, to $3.7 million, or $0.47 per basic and diluted share, for the quarter ended March 31, 2018, as compared to the same period last year. The Company's return on average assets, adjusted for tax effected merger-related expenses of $2.4 million, for the quarter ended March 31, 2018, was 1.10%, an increase from 0.94% for the quarter ended March 31, 2017.
The Company announced a new name and brand identity following its recent partnership with Community Bank of Bergen County, NJ. The new name, "SB One Bancorp", is being presented for shareholder vote at its Annual Meeting scheduled for later today. The Company is also rebranding the name and logo of its subsidiary Bank to "SB One Bank" as well as the Bank's wholly owned subsidiary "SB One Insurance Agency".
"Our merger was built upon a shared vision, and in coming together we made a choice to do so under one name," said Anthony Labozzetta, President and Chief Executive Officer of Sussex Bancorp. "This merger created opportunities for us to refresh and elevate our brand, and we wholeheartedly embraced the process. We are excited to share these details with our customers; however, we want to reinforce that despite our new name and shiny new exterior, we are the same bank that our customers have come to trust."
Mr. Labozzetta also stated, "I am very excited to report on our solid first quarter results inclusive of our merger with Community Bank as well as another quarter of strong performance by all of our business lines. Our growth continues to be organically generated and our production pipelines remain robust, which support future targeted growth expectations on a larger balance sheet. Mr. Labozzetta went on to say, "I'm also pleased to report that our 15th banking center, which will be located in a great market in Weehawken NJ (Hudson County), is anticipated to open during the third quarter of this year."
Financial Performance
Net Income. For the quarter ended March 31, 2018, the Company reported net income of $1.3 million, or $0.17 per basic and diluted share, as compared to net income of $2.0 million, or $0.43 per basic and diluted share, for the same period last year. The decrease in net income for the quarter ended March 31, 2018 was driven by a $5.6 million, or 94.0%, increase in non-interest expenses largely due to merger-related expenses of $3.3 million. The aforementioned decrease was partially offset by a $4.0 million, or 59.5%, increase in net interest income resulting from strong loan and deposit growth, a $380 thousand increase in non-interest income, and a $616 thousand decrease in income tax expense. The increases and decreases were largely attributable to the merger with Community Bank.
The Company's net income, adjusted for tax effected merger-related expenses of $2.4 million, increased $1.7 million, or 82.8%, to $3.7 million, or $0.47 per basic and diluted share, for the quarter ended March 31, 2018, as compared to the same period last year.
Net Interest Income. Net interest income on a fully tax equivalent basis increased $4.1 million, or 58.7%, to $11.0 million for the first quarter of 2018, as compared to $6.9 million for the same period in 2017. The increase in net interest income was largely due to a $423.1 million, or 51.3%, increase in average interest earning assets, principally loans receivable, which increased $361.9 million, or 51.6%. The net interest margin increased by 17 basis points to 3.56% for the first quarter of 2018, as compared to the same period in 2017. These increases were largely attributable to the merger with Community Bank.
Provision for Loan Losses. Provision for loan losses increased $101 thousand to $508 thousand for the first quarter of 2018, as compared to $407 thousand for the same period in 2017.
Non-interest Income. Non-interest income increased $380 thousand, or 15.3%, to $2.9 million for the first quarter of 2018, as compared to the same period last year. The increase was principally due to growth of $148 thousand in insurance commissions and fees relating to Tri-State Insurance Agency, an increase of $133 thousand in other income and an increase of $79 thousand in bank owned life insurance. The aforementioned was partly offset by a reduction in gain on sales of securities of approximately $107 thousand.
Non-interest Expense. The Company's non-interest expenses increased $5.6 million, or 94.0%, to $11.6 million for the first quarter of 2018, as compared to the same period last year. The increase was largely due to merger-related expenses of $3.3 million related to the acquisition of Community Bank and increases in salaries and employee benefits of $1.5 million as a result of the merger with Community Bank.
Income Tax Expense. The Company's income tax expenses decreased $616 thousand, or 74.1% to $215 thousand for the first quarter of 2018, as compared to the same period last year. The Company's effective tax rate for the first quarter of 2018 was 14.1%, as compared to 29.2% for the first quarter of 2017. The decrease in the Company's tax rate was largely due to the Tax Act and the merger with Community Bank which resulted in the Company's tax free income becoming a larger percentage of its overall income.
Financial Condition
At March 31, 2018, the Company's total assets were $1.4 billion, an increase of $397.2 million, or 40.6%, as compared to total assets of $979.4 million at December 31, 2017. The increase was largely attributable to the merger with Community Bank.
Total loans receivable, net of unearned income, increased $267.7 million, or 32.6%, to $1.1 billion at March 31, 2018, as compared to $820.7 million at December 31, 2017. The merger with Community Bank resulted in an increase in total loans of $236.1 million. During the three months ended March 31, 2018, the Company also had $33.1 million of commercial loan production, which was partly offset by $12.6 million in commercial loan payoffs.
The Company's total deposits increased $280.8 million, or 36.8%, to $1.0 billion at March 31, 2018, from $762.5 million at December 31, 2017, primarily driven by the merger with Community Bank. The growth in deposits was mostly due to an increase in interest bearing deposits of $208.6 million, or 33.8%, and non-interest bearing deposits of $72.3 million, or 49.4%, at March 31, 2018, as compared to December 31, 2017, respectively.
At March 31, 2018, the Company's total stockholders' equity was $146.2 million, an increase of $52.0 million when compared to December 31, 2017, largely due to the merger with Community Bank. The Company completed the merger on January 4, 2018 which was the primary driver in an increase in book value per common share of 18.2% from $15.59 at December 31, 2017 to $18.43 at March 31, 2018. At March 31, 2018, the leverage, Tier I risk-based capital, total risk-based capital and common equity Tier I capital ratios for the Bank were 10.90%, 13.58%, 14.33% and 13.58%, respectively, all in excess of the ratios required to be deemed "well-capitalized."
Asset and Credit Quality
The ratio of non-performing assets ("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 increased to 1.07% at March 31, 2018 from 0.94% December 31, 2017. NPAs exclude $3.7 million of Purchased Credit-Impaired ("PCI") loans acquired through the merger with Community Bank. NPAs increased $5.5 million, or 60.1%, to $14.8 million at March 31, 2018, as compared to $9.2 million at December 31, 2017. Non-accrual loans, excluding $3.7 million of PCI loans, increased $3.1 million, or 51.1%, to $9.1 million at March 31, 2018, as compared to $6.0 million at December 31, 2017. Loans past due 30 to 89 days totaled $13.6 million at March 31, 2018, representing an increase of $7.1 million, or 109.3%, as compared to $6.5 million at December 31, 2017.
The Company continues to actively market its foreclosed real estate properties, the value of which increased $1.3 million to $3.5 million at March 31, 2018 as compared to $2.3 million at December 31, 2017. At March 31, 2018, the Company's foreclosed real estate properties had an average carrying value of approximately $253 thousand per property.
The allowance for loan losses increased $493 thousand, or 6.7%, to $7.8 million, or 0.72% of total loans, at March 31, 2018, compared to $7.3 million, or 0.89% of total loans, at December 31, 2017. The decline in allowance coverage was primarily driven by the addition of Community Bank acquired loans with no allowance for loan losses; such loans were recorded at fair value at the acquisition date. The Company recorded $508 thousand in provision for loan losses for the three months ended March 31, 2018 as compared to $407 thousand for the three months ended March 31, 2017. Additionally, the Company recorded net charge-offs of $15 thousand for the three months ended March 31, 2018, as compared to $306 thousand in net charge-offs for the three months ended March 31, 2017. The allowance for loan losses as a percentage of non-accrual loans decreased to 86.1% at March 31, 2018 from 121.8% at December 31, 2017.
About Sussex Bancorp
Sussex Bancorp SBBX is the holding company for Sussex Bank which is headquartered in Sussex County, New Jersey and operates regionally with fourteen branch locations throughout Bergen, Sussex and Warren counties in New Jersey and in Astoria, New York. In addition to its branch locations, Sussex Bancorp offers a loan production office in Oradell, New Jersey and a full-service insurance agency, the Tri-State Insurance Agency, Inc., with locations in Augusta and Oradell, New Jersey.
In 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. Sussex Bancorp is one of the 50 Fastest Growing Companies in New Jersey as ranked by NJBIZ Magazine. Sussex Bancorp President and Chief Executive Officer, Anthony Labozzetta, was named one of America's Business Leaders in Banking by Forbes magazine and American Banker's Community Banker of the Year in 2016.
For more details on Sussex Bank, please visit: 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, the inability to realize expected cost savings or to implement integration plans and other adverse consequences associated with the acquisition of Community Bank of Bergen County, NJ ("Community Bank"), the inability to retain Community Bank's customers, the risk that the businesses of Community and the Bank may not be combined successfully or may take longer than expected, and the diversion of management's time on issues relating to integration of Community Bank. 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, 2017 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) | |||||||||||||||||||||||
| 3/31/2018 VS. | |||||||||||||||||||||||
| 3/31/2018 | 12/31/2017 | 3/31/2017 | 3/31/2017 | 12/31/2017 | |||||||||||||||||||
| BALANCE SHEET HIGHLIGHTS - Period End Balances | |||||||||||||||||||||||
| Total securities | $ | 179,635 | $ | 104,034 | $ | 108,427 | 65.7 | % | 72.7 | % | |||||||||||||
| Total loans | 1,088,429 | 820,700 | 718,800 | 51.4 | % | 32.6 | % | ||||||||||||||||
| Allowance for loan losses | (7,828 | ) | (7,335 | ) | (6,797 | ) | 15.2 | % | 6.7 | % | |||||||||||||
| Total assets | 1,376,625 | 979,383 | 872,282 | 57.8 | % | 40.6 | % | ||||||||||||||||
| Total deposits | 1,043,331 | 762,491 | 696,576 | 49.8 | % | 36.8 | % | ||||||||||||||||
| Total borrowings and junior subordinated debt | 182,876 | 118,198 | 108,641 | 68.3 | % | 54.7 | % | ||||||||||||||||
| Total shareholders' equity | 146,159 | 94,193 | 62,422 | 134.1 | % | 55.2 | % | ||||||||||||||||
| FINANCIAL DATA - QUARTER ENDED: | |||||||||||||||||||||||
| Net interest income (tax equivalent) (a) | $ | 10,962 | $ | 8,038 | $ | 6,906 | 58.7 | % | 36.4 | % | |||||||||||||
| Provision for loan losses | 508 | 459 | 407 | 24.8 | % | 10.7 | % | ||||||||||||||||
| Total other income | 2,857 | 1,961 | 2,477 | 15.3 | % | 45.7 | % | ||||||||||||||||
| Total other expenses | 11,594 | 6,820 | 5,977 | 94.0 | % | 70.0 | % | ||||||||||||||||
| Income before provision for income taxes (tax equivalent) | 1,717 | 2,720 | 2,999 | (42.7 | ) | % | (36.9 | ) | % | ||||||||||||||
| Provision for income taxes | 215 | 2,039 | 831 | (74.1 | ) | % | (89.5 | ) | % | ||||||||||||||
| Taxable equivalent adjustment (a) | 194 | 168 | 157 | 23.6 | % | 15.5 | % | ||||||||||||||||
| Net income | $ | 1,308 | $ | 513 | $ | 2,011 | (35.0 | ) | % | 155.0 | % | ||||||||||||
| Net income per common share - Basic | $ | 0.17 | $ | 0.09 | $ | 0.43 | (60.7 | ) | % | 87.8 | % | ||||||||||||
| Net income per common share - Diluted | $ | 0.17 | $ | 0.09 | $ | 0.43 | (61.0 | ) | % | 86.5 | % | ||||||||||||
| Return on average assets | 0.39 | % | 0.21 | % | 0.94 | % | (58.3 | ) | % | 83.3 | % | ||||||||||||
| Return on average equity | 3.64 | % | 2.16 | % | 13.07 | % | (72.2 | ) | % | 68.6 | % | ||||||||||||
| Efficiency ratio (b) | 85.09 | % | 69.37 | % | 64.78 | % | 31.3 | % | 22.7 | % | |||||||||||||
| Net interest margin (tax equivalent) | 3.56 | % | 3.46 | % | 3.39 | % | 5.0 | % | 2.9 | % | |||||||||||||
| Avg. interest earning assets/Avg. interest bearing liabilities | 1.27 | 1.29 | 1.23 | 3.0 | % | (1.6 | ) | % | |||||||||||||||
| SHARE INFORMATION: | |||||||||||||||||||||||
| Book value per common share | $ | 18.43 | $ | 15.59 | $ | 13.04 | 41.3 | % | 18.2 | % | |||||||||||||
| Tangible book value per common share | 15.12 | 15.13 | 12.46 | 21.4 | % | (0.0 | ) | % | |||||||||||||||
| Outstanding shares- period ending | 7,929,613 | 6,040,564 | 4,785,159 | 65.7 | % | 31.3 | % | ||||||||||||||||
| Average diluted shares outstanding (year to date) | 7,791,736 | 5,404,381 | 4,727,333 | 64.8 | % | 44.2 | % | ||||||||||||||||
| CAPITAL RATIOS: | |||||||||||||||||||||||
| Total equity to total assets | 10.62 | % | 9.62 | % | 7.16 | % | 48.4 | % | 10.4 | % | |||||||||||||
| Leverage ratio (c) | 10.90 | % | 11.87 | % | 10.41 | % | 4.7 | % | (8.2 | ) | % | ||||||||||||
| Tier 1 risk-based capital ratio (c) | 13.58 | % | 14.28 | % | 12.93 | % | 5.0 | % | (4.9 | ) | % | ||||||||||||
| Total risk-based capital ratio (c) | 14.33 | % | 15.19 | % | 13.91 | % | 3.0 | % | (5.7 | ) | % | ||||||||||||
| Common equity Tier 1 capital ratio (c) | 13.58 | % | 14.28 | % | 12.93 | % | 5.0 | % | (4.9 | ) | % | ||||||||||||
| ASSET QUALITY: | |||||||||||||||||||||||
| Non-accrual loans (e) | $ | 9,096 | $ | 6,020 | $ | 5,448 | 67.0 | % | 51.1 | % | |||||||||||||
| Loans 90 days past due and still accruing | - | - | 104 | - | % | - | % | ||||||||||||||||
| Troubled debt restructured loans ("TDRs") (d) | 2,134 | 932 | 587 | 263.5 | % | 129.0 | % | ||||||||||||||||
| Foreclosed real estate | 3,546 | 2,275 | 2,464 | 43.9 | % | 55.9 | % | ||||||||||||||||
| Non-performing assets ("NPAs") | $ | 14,776 | $ | 9,227 | $ | 8,603 | 71.8 | % | 60.1 | % | |||||||||||||
| Foreclosed real estate, criticized and classified assets (e) | $ | 34,361 | $ | 18,992 | $ | 20,494 | 67.7 | % | 80.9 | % | |||||||||||||
| Loans past due 30 to 89 days | $ | 13,593 | $ | 6,495 | $ | 2,166 | 527.6 | % | 109.3 | % | |||||||||||||
| Charge-offs (Recoveries) , net (quarterly) | $ | 15 | $ | 626 | $ | 306 | (95.1 | ) | % | (97.6 | ) | % | |||||||||||
| Charge-offs (Recoveries) , net as a % of average loans (annualized) | 0.01 | % | 0.31 | % | 0.17 | % | (96.8 | ) | % | (98.2 | ) | % | |||||||||||
| Non-accrual loans to total loans | 0.84 | % | 0.73 | % | 0.76 | % | 10.3 | % | 13.9 | % | |||||||||||||
| NPAs to total assets | 1.07 | % | 0.94 | % | 0.99 | % | 8.8 | % | 13.9 | % | |||||||||||||
| NPAs excluding TDR loans (d) to total assets | 0.92 | % | 0.85 | % | 0.92 | % | (0.1 | ) | % | 8.4 | % | ||||||||||||
| Non-accrual loans to total assets | 0.66 | % | 0.61 | % | 0.62 | % | 5.8 | % | 7.5 | % | |||||||||||||
| Allowance for loan losses as a % of non-accrual loans | 86.06 | % | 121.84 | % | 124.76 | % | (31.0 | ) | % | (29.4 | ) | % | |||||||||||
| Allowance for loan losses to total loans | 0.72 | % | 0.89 | % | 0.95 | % | (23.9 | ) | % | (19.5 | ) | % | |||||||||||
| (a) Full taxable equivalent basis, using a 21% 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 | |||||||||||||||||||||||
| (e) PCI loans acquired through merger with Community Bank excluded from non-accrual loans and criticized and classified assets totaled $3.7 million | |||||||||||||||||||||||
| SUSSEX BANCORP | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| (Dollars In Thousands) | |||||||
| ASSETS | March 31, 2018 | December 31, 2017 | |||||
| Cash and due from banks | $ | 6,428 | $ | 3,270 | |||
| Interest-bearing deposits with other banks | 8,652 | 8,376 | |||||
| Cash and cash equivalents | 15,080 | 11,646 | |||||
| Interest bearing time deposits with other banks | 200 | 100 | |||||
| Securities available for sale, at fair value | 174,101 | 98,730 | |||||
| Securities held to maturity | 5,534 | 5,304 | |||||
| Federal Home Loan Bank Stock, at cost | 8,358 | 4,925 | |||||
| Loans receivable, net of unearned income | 1,088,429 | 820,700 | |||||
| Less: allowance for loan losses | 7,828 | 7,335 | |||||
| Net loans receivable | 1,080,601 | 813,365 | |||||
| Foreclosed real estate | 3,546 | 2,275 | |||||
| Premises and equipment, net | 18,672 | 8,389 | |||||
| Accrued interest receivable | 5,085 | 2,472 | |||||
| Goodwill and intangibles | 26,249 | 2,820 | |||||
| Bank-owned life insurance | 30,202 | 22,054 | |||||
| Other assets | 8,997 | 7,303 | |||||
| Total Assets | $ | 1,376,625 | $ | 979,383 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Liabilities: | |||||||
| Deposits: | |||||||
| Non-interest bearing | $ | 218,433 | $ | 146,167 | |||
| Interest bearing | 824,898 | 616,324 | |||||
| Total Deposits | 1,043,331 | 762,491 | |||||
| Borrowings | 155,025 | 90,350 | |||||
| Accrued interest payable and other liabilities | 4,259 | 4,501 | |||||
| Subordinated debentures | 27,851 | 27,848 | |||||
| Total Liabilities | 1,230,466 | 885,190 | |||||
| Total Stockholders' Equity | 146,159 | 94,193 | |||||
| Total Liabilities and Stockholders' Equity | $ | 1,376,625 | $ | 979,383 | |||
| SUSSEX BANCORP | ||||||||
| CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | ||||||||
| (Dollars In Thousands Except Per Share Data) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2018 | 2017 | |||||||
| INTEREST INCOME | ||||||||
| Loans receivable, including fees | $ | 11,900 | $ | 7,598 | ||||
| Securities: | ||||||||
| Taxable | 736 | 341 | ||||||
| Tax-exempt | 381 | 313 | ||||||
| Interest bearing deposits | 30 | 16 | ||||||
| Total Interest Income | 13,047 | 8,268 | ||||||
| INTEREST EXPENSE | ||||||||
| Deposits | 1,458 | 717 | ||||||
| Borrowings | 506 | 481 | ||||||
| Junior subordinated debentures | 315 | 321 | ||||||
| Total Interest Expense | 2,279 | 1,519 | ||||||
| Net Interest Income | 10,768 | 6,749 | ||||||
| PROVISION FOR LOAN LOSSES | 508 | 407 | ||||||
| Net Interest Income after Provision for Loan Losses | 10,260 | 6,342 | ||||||
| OTHER INCOME | ||||||||
| Service fees on deposit accounts | 328 | 253 | ||||||
| ATM and debit card fees | 213 | 180 | ||||||
| Bank owned life insurance | 185 | 106 | ||||||
| Insurance commissions and fees | 1,895 | 1,747 | ||||||
| Investment brokerage fees | 22 | 3 | ||||||
| (Loss) gain on securities transactions | - | 107 | ||||||
| Other | 214 | 81 | ||||||
| Total Other Income | 2,857 | 2,477 | ||||||
| OTHER EXPENSES | ||||||||
| Salaries and employee benefits | 5,058 | 3,558 | ||||||
| Occupancy, net | 602 | 500 | ||||||
| Data processing | 791 | 557 | ||||||
| Furniture and equipment | 281 | 240 | ||||||
| Advertising and promotion | 56 | 106 | ||||||
| Professional fees | 329 | 277 | ||||||
| Director fees | 147 | 107 | ||||||
| FDIC assessment | 110 | 51 | ||||||
| Insurance | 95 | 66 | ||||||
| Stationary and supplies | 57 | 32 | ||||||
| Merger-related expenses | 3,293 | - | ||||||
| Loan collection costs | 61 | 24 | ||||||
| Expenses and write-downs related to foreclosed real estate | 207 | 45 | ||||||
| Amortization of intangible assets | 61 | - | ||||||
| Other | 446 | 414 | ||||||
| Total Other Expenses | 11,594 | 5,977 | ||||||
| Income before Income Taxes | 1,523 | 2,842 | ||||||
| INCOME TAX EXPENSE | 215 | 831 | ||||||
| Net Income | $ | 1,308 | $ | 2,011 | ||||
| OTHER COMPREHENSIVE INCOME (LOSS): | ||||||||
| Unrealized (loss) gains on available for sale securities arising during the period | (2,167 | ) | $ | 676 | ||||
| Fair value adjustments on derivatives | (1,451 | ) | 40 | |||||
| Reclassification adjustment for net loss (gain) on securities transactions included in net income | - | (107 | ) | |||||
| Income tax related to items of other comprehensive income (loss) | 1,448 | (244 | ) | |||||
| Other comprehensive income, net of income taxes | (2,170 | ) | 365 | |||||
| Comprehensive (loss) income | (862 | ) | $ | 2,376 | ||||
| EARNINGS PER SHARE | ||||||||
| Basic | 0.17 | $ | 0.43 | |||||
| Diluted | 0.17 | $ | 0.43 | |||||
| SUSSEX BANCORP | |||||||||||||||||||||||
| COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES | |||||||||||||||||||||||
| (Dollars In Thousands) | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2018 | 2017 | ||||||||||||||||||||||
| Average | Average | Average | Average | ||||||||||||||||||||
| Balance | Interest | Rate (2) | Balance | Interest | Rate (2) | ||||||||||||||||||
| Earning Assets: | |||||||||||||||||||||||
| Securities: | |||||||||||||||||||||||
| Tax exempt (3) | $ | 54,987 | $ | 575 | 4.24 | % | $ | 47,443 | $ | 470 | 4.02 | % | |||||||||||
| Taxable | 120,776 | 736 | 2.47 | % | 62,767 | 341 | 2.20 | % | |||||||||||||||
| Total securities | 175,763 | 1,311 | 3.03 | % | 110,210 | 811 | 2.98 | % | |||||||||||||||
| Total loans receivable (1) (4) | 1,063,727 | 11,900 | 4.54 | % | 701,862 | 7,598 | 4.39 | % | |||||||||||||||
| Other interest-earning assets | 8,662 | 30 | 1.40 | % | 12,940 | 16 | 0.50 | % | |||||||||||||||
| Total earning assets | 1,248,152 | 13,241 | 4.30 | % | 825,012 | 8,425 | 4.14 | % | |||||||||||||||
| Non-interest earning assets | 99,984 | 41,062 | |||||||||||||||||||||
| Allowance for loan losses | (7,505 | ) | (6,723 | ) | |||||||||||||||||||
| Total Assets | $ | 1,340,631 | $ | 859,351 | |||||||||||||||||||
| Sources of Funds: | |||||||||||||||||||||||
| Interest bearing deposits: | |||||||||||||||||||||||
| NOW | $ | 259,677 | $ | 398 | 0.62 | % | $ | 177,107 | $ | 119 | 0.27 | % | |||||||||||
| Money market | 96,463 | 248 | 1.04 | % | 73,935 | 124 | 0.68 | % | |||||||||||||||
| Savings | 221,946 | 77 | 0.14 | % | 137,742 | 71 | 0.21 | % | |||||||||||||||
| Time | 265,139 | 735 | 1.12 | % | 166,670 | 403 | 0.98 | % | |||||||||||||||
| Total interest bearing deposits | 843,225 | 1,458 | 0.70 | % | 555,454 | 717 | 0.52 | % | |||||||||||||||
| Borrowed funds | 111,886 | 506 | 1.83 | % | 85,919 | 481 | 2.27 | % | |||||||||||||||
| Subordinated debentures | 27,849 | 315 | 4.59 | % | 27,840 | 321 | 4.68 | % | |||||||||||||||
| Total interest bearing liabilities | 982,960 | 2,279 | 0.94 | % | 669,213 | 1,519 | 0.92 | % | |||||||||||||||
| Non-interest bearing liabilities: | |||||||||||||||||||||||
| Demand deposits | 208,694 | 124,991 | |||||||||||||||||||||
| Other liabilities | 5,112 | 3,591 | |||||||||||||||||||||
| Total non-interest bearing liabilities | 213,806 | 128,582 | |||||||||||||||||||||
| Stockholders' equity | 143,865 | 61,556 | |||||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 1,340,631 | $ | 859,351 | |||||||||||||||||||
| Net Interest Income and Margin (5) | 10,962 | 3.56 | % | 6,906 | 3.39 | % | |||||||||||||||||
| Tax-equivalent basis adjustment | (194 | ) | (157 | ) | |||||||||||||||||||
| Net Interest Income | $ | 10,768 | $ | 6,749 | |||||||||||||||||||
| (1) Includes loan fee income | |||||||||||||||||||||||
| (2) Average rates on securities are calculated on amortized costs | |||||||||||||||||||||||
| (3) Full taxable equivalent basis, using a 21% 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 and as of March 31, 2018 | Three Months Ended and as of March 31, 2017 | |||||||||||||||||
| Banking and | Banking and | |||||||||||||||||
| Financial | Insurance | Financial | Insurance | |||||||||||||||
| Services | Services | Total | Services | Services | Total | |||||||||||||
| Net interest income from external sources | $ | 10,768 | $ | - | $ | 10,768 | $ | 6,749 | $ | - | $ | 6,749 | ||||||
| Other income from external sources | 925 | 1,932 | 2,857 | 730 | 1,747 | 2,477 | ||||||||||||
| Depreciation and amortization | 427 | 6 | 433 | 267 | 6 | 273 | ||||||||||||
| Income before income taxes | 614 | 909 | 1,523 | 2,022 | 820 | 2,842 | ||||||||||||
| Income tax expense (1) | (41 | ) | 256 | 215 | 503 | 328 | 831 | |||||||||||
| Total assets | 1,371,936 | 4,689 | 1,376,625 | 865,832 | 6,450 | 872,282 | ||||||||||||
| (1) Calculated at statutory tax rate of 28.1% for the insurance services segment | ||||||||||||||||||
| SUSSEX BANCORP | ||||||||
| Non-GAAP Reporting | ||||||||
| (Dollars In Thousands) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2018 | 2017 | |||||||
| Net income (GAAP) | $ | 1,308 | $ | 2,011 | ||||
| Merger related expenses net of tax (1) | 2,367 | - | ||||||
| Net income, as adjusted | $ | 3,675 | $ | 2,011 | ||||
| Average diluted shares outstanding (GAAP) (2) | 7,791,736 | 4,727,333 | ||||||
| Diluted EPS, as adjusted | $ | 0.47 | $ | 0.43 | ||||
| Return on average assets, as adjusted | 1.10 | % | 0.94 | % | ||||
| Return on average equity, as adjusted | 10.22 | % | 13.07 | % | ||||
| (1) Merger related expense net of tax expense of $926 thousand. | ||||||||
| (2) Average diluted shares outstanding includes acquisition of CBBC shares of 1,873,028 | ||||||||
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