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

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)  
           
ASSETS September 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%                                    
                                     
CONTACT: Contacts: 
Anthony Labozzetta, President/CEO
Steven Fusco, SEVP/CFO
844-256-7328 

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