| Sussex Bancorp | Contact: Donald L. Kovach |
| 200 Munsonhurst Road | Chairman |
| Franklin, NJ 07416 | (973) 827-2914 |
SUSSEX BANCORP ANNOUNCES 2009 EARNINGS
FRANKLIN, NEW JERSEY – February 1, 2010– Sussex Bancorp (NASDAQ “SBBX”) today announced its results of operations for the year ended December 31, 2009. For 2009, the Company earned $2.0 million, or $0.62 per basic and diluted share, compared to a net loss of $1.0 million, or ($0.32) per basic and diluted share for the prior year. The Company’s return to profitability in 2009 primarily reflects an increase in net interest income of $3.2 million as well as the absence of impairment charges in 2009, as the Company recorded an impairment charge of $3.5 million in 2008 related to certain FNMA and Freddie Mac securities.
The Company’s total interest income increased to $23.1 million for the year ended December 31, 2009 from $22.7 million for the same period last year, as total interest expense decreased to $8.1 million for the year ended December 31, 2009 from $10.8 million for the year ended December 31, 2008. As a result, for the year ended December 31, 2009 the Company’s net interest income increased to $15.0 million from the $11.8 million earned last year. The improvement in the net interest income is reflective of the improvement in the Company’s net interest margin, which increased by 48 basis points from 3.12% in 2008 to 3.60% in 2009.
The Company’s average earning assets increased by $39.5 million in 2009 over 2008, while the average yield declined by 42 basis points, to 5.46% in 2009 from 5.88% in 2008. The Company’s average interest bearing liabilities increased by $45.1 million for the year ended December 31, 2009 compared to the prior year. The Company’s cost of interest bearing liabilities decreased by 108 basis points to 2.07% in 2009 from 3.15% in 2008.
For the year ended December 31, 2009, the Company’s non-interest income increased by $3.5 million from $2.0 million for year ended December 31, 2008 to $5.5 million for year ended December 31, 2009. The improvement is attributable to an impairment write-down of $3.5 million on equity securities that the Company incurred in 2008, while the Company experienced no such impairment charges in 2009. Non-interest expense was flat year over year, increasing by $90 thousand to $14.7 million for the year ended December 31, 2009 compared to $14.6 million one year earlier. This increase is due to $551 thousand in increased FDIC assessment charges, while salaries and employee benefit expenses declined by approximately $194 thousand.
The Company’s loan loss provision for the year ended December 31, 2009 was $3.4 million compared to $1.4 million for the same period last year. The increase in the provision is primarily attributable to a decline in real estate collateral values and adverse economic conditions in the Company’s trade area. As a result of these conditions, the Company’s non-performing loan balance increased to $20.4 million at December 31, 2009 from $11.0 million at December 31, 2008. The Company believes these loans are adequately provided for in its loan loss provision or are sufficiently secured at December 31, 2009. Non-performing loans as a percentage of total gross loans at December 31, 2009 were 6.13%, compared to 3.44% one year earlier.
At December 31, 2009 the Company had total assets of $454.8 million, compared to total assets of $440.6 million at December 31, 2008. The Company had total deposits of $372.1 million at December 31, 2009, compared to total deposits of $360.1 million at December 31, 2008.
Sussex Bancorp is the holding company for Sussex Bank, which services its customers through ten branch offices, eight located in Sussex County, New Jersey and two in Orange County, New York and for Tri-State Insurance Agency, Inc, a full service insurance agency located in Sussex County, New Jersey.
| SUSSEX BANCORP | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (Dollars In Thousands) | ||||||||
| ASSETS | December 31, 2009 | December 31, 2008 | ||||||
| (Unaudited) | ||||||||
| Cash and due from banks | $ | 8,779 | $ | 7,602 | ||||
| Federal funds sold | 14,300 | 13,310 | ||||||
| Cash and cash equivalents | 23,079 | 20,912 | ||||||
| Interest bearing time deposits with other banks | 100 | 100 | ||||||
| Trading securities | 2,955 | 13,290 | ||||||
| Securities available for sale | 71,315 | 62,272 | ||||||
| Federal Home Loan Bank Stock, at cost | 2,045 | 1,975 | ||||||
| Loans receivable, net of unearned income | 332,959 | 320,880 | ||||||
| Less: allowance for loan losses | 5,496 | 5,813 | ||||||
| Net loans receivable | 327,463 | 315,067 | ||||||
| Foreclosed real estate | 3,843 | 3,864 | ||||||
| Premises and equipment, net | 7,065 | 8,526 | ||||||
| Accrued interest receivable | 1,943 | 2,115 | ||||||
| Goodwill | 2,820 | 2,820 | ||||||
| Other assets | 12,213 | 9,654 | ||||||
| Total Assets | $ | 454,841 | $ | 440,595 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Liabilities: | ||||||||
| Deposits: | ||||||||
| Non-interest bearing | $ | 34,155 | $ | 34,784 | ||||
| Interest bearing | 337,920 | 325,297 | ||||||
| Total Deposits | 372,075 | 360,081 | ||||||
| Borrowings | 33,090 | 33,146 | ||||||
| Accrued interest payable and other liabilities | 2,262 | 2,571 | ||||||
| Junior subordinated debentures | 12,887 | 12,887 | ||||||
| Total Liabilities | 420,314 | 408,685 | ||||||
| Total Stockholders' Equity | 34,527 | 31,910 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 454,841 | $ | 440,595 | ||||
| SUSSEX BANCORP | ||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| (Dollars In Thousands) | ||||||||
| Years Ended December 31, | ||||||||
| 2009 | 2008 | |||||||
| (Unaudited) | ||||||||
| INTEREST INCOME | ||||||||
| Loans receivable, including fees | $ | 19,259 | $ | 19,150 | ||||
| Securities: | ||||||||
| Taxable | 2,587 | 2,266 | ||||||
| Tax-exempt | 1,164 | 976 | ||||||
| Federal funds sold | 30 | 259 | ||||||
| Interest bearing deposits | 15 | 2 | ||||||
| Total Interest Income | 23,055 | 22,653 | ||||||
| INTEREST EXPENSE | ||||||||
| Deposits | 6,321 | 8,746 | ||||||
| Borrowings | 1,426 | 1,507 | ||||||
| Junior subordinated debentures | 306 | 590 | ||||||
| Total Interest Expense | 8,053 | 10,843 | ||||||
| Net Interest Income | 15,002 | 11,810 | ||||||
| PROVISION FOR LOAN LOSSES | 3,404 | 1,350 | ||||||
| Net Interest Income after Provision for Loan Losses | 11,598 | 10,460 | ||||||
| OTHER INCOME | ||||||||
| Service fees on deposit accounts | 1,467 | 1,534 | ||||||
| ATM fees | 480 | 464 | ||||||
| Insurance commissions and fees | 2,284 | 2,507 | ||||||
| Investment brokerage fees | 137 | 151 | ||||||
| Holding gains on trading securities | 5 | 199 | ||||||
| Gain on sale of securities, available for sale | 134 | 150 | ||||||
| Gain on sale of fixed assets | 203 | - | ||||||
| Gain (loss) on sale of foreclosed real estate | 190 | (58 | ) | |||||
| Impairment write-downs on equity securities | - | (3,526 | ) | |||||
| Other | 644 | 570 | ||||||
| Total Other Income | 5,544 | 1,991 | ||||||
| OTHER EXPENSES | ||||||||
| Salaries and employee benefits | 7,351 | 7,545 | ||||||
| Occupancy, net | 1,302 | 1,299 | ||||||
| Furniture, equipment and data processing | 1,286 | 1,481 | ||||||
| Stationary and supplies | 178 | 192 | ||||||
| Professional fees | 768 | 621 | ||||||
| Advertising and promotion | 179 | 469 | ||||||
| Insurance | 194 | 171 | ||||||
| FDIC Assessment | 936 | 385 | ||||||
| Postage and freight | 139 | 155 | ||||||
| Amortization of intangible assets | 18 | 49 | ||||||
| Write-down on foreclosed real estate | 456 | 437 | ||||||
| Foreclosed real estate | 347 | 255 | ||||||
| Other | 1,525 | 1,530 | ||||||
| Total Other Expenses | 14,679 | 14,589 | ||||||
| Income (Loss) before Income Taxes | 2,463 | (2,138 | ) | |||||
| PROVISION (BENEFIT) FOR INCOME TAXES | 452 | (1,096 | ) | |||||
| Net Income (Loss) | $ | 2,011 | $ | (1,042 | ) | |||
| SUSSEX BANCORP | ||||||||||||||||||||||||
| COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES | ||||||||||||||||||||||||
| (Dollars In Thousands) | ||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| Twelve Months Ended December 31, | ||||||||||||||||||||||||
| (Dollars in thousands) | 2009 | 2008 | ||||||||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||||||||
| Earning Assets: | Balance | Interest (1) | Rate (2) | Balance | Interest (1) | Rate (2) | ||||||||||||||||||
| Securities: | ||||||||||||||||||||||||
| Tax exempt (3) | $ | 28,102 | $ | 1,747 | 6.22 | % | $ | 23,720 | $ | 1,458 | 6.15 | % | ||||||||||||
| Taxable | 59,035 | 2,587 | 4.38 | % | 47,234 | 2,266 | 4.80 | % | ||||||||||||||||
| Total securities | 87,137 | 4,334 | 4.97 | % | 70,954 | 3,724 | 5.25 | % | ||||||||||||||||
| Total loans receivable (4) | 326,740 | 19,259 | 5.89 | % | 307,845 | 19,150 | 6.22 | % | ||||||||||||||||
| Other interest-earning assets | 19,208 | 45 | 0.23 | % | 14,749 | 261 | 1.77 | % | ||||||||||||||||
| Total earning assets | 433,085 | $ | 23,638 | 5.46 | % | 393,548 | $ | 23,135 | 5.88 | % | ||||||||||||||
| Non-interest earning assets | 36,355 | 31,359 | ||||||||||||||||||||||
| Allowance for loan losses | (5,824 | ) | (5,182 | ) | ||||||||||||||||||||
| Total Assets | $ | 463,616 | $ | 419,725 | ||||||||||||||||||||
| Sources of Funds: | ||||||||||||||||||||||||
| Interest bearing deposits: | ||||||||||||||||||||||||
| NOW | $ | 57,928 | $ | 582 | 1.00 | % | $ | 58,878 | $ | 798 | 1.36 | % | ||||||||||||
| Money market | 14,709 | 177 | 1.21 | % | 23,769 | 527 | 2.22 | % | ||||||||||||||||
| Savings | 169,541 | 2,759 | 1.63 | % | 85,707 | 2,350 | 2.74 | % | ||||||||||||||||
| Time | 101,565 | 2,803 | 2.76 | % | 127,475 | 5,071 | 3.98 | % | ||||||||||||||||
| Total interest bearing deposits | 343,743 | 6,321 | 1.84 | % | 295,829 | 8,746 | 2.96 | % | ||||||||||||||||
| Borrowed funds | 33,139 | 1,426 | 4.30 | % | 35,971 | 1,507 | 4.19 | % | ||||||||||||||||
| Junior subordinated debentures | 12,887 | 306 | 2.38 | % | 12,887 | 590 | 4.57 | % | ||||||||||||||||
| Total interest bearing liabilities | 389,769 | $ | 8,053 | 2.07 | % | 344,687 | $ | 10,843 | 3.15 | % | ||||||||||||||
| Non-interest bearing liabilities: | ||||||||||||||||||||||||
| Demand deposits | 38,154 | 39,303 | ||||||||||||||||||||||
| Other liabilities | 2,303 | 2,036 | ||||||||||||||||||||||
| Total non-interest bearing liabilities | 40,457 | 41,339 | ||||||||||||||||||||||
| Stockholders' equity | 33,390 | 33,699 | ||||||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 463,616 | $ | 419,725 | ||||||||||||||||||||
| Net Interest Income and Margin (5) | $ | 15,585 | 3.60 | % | $ | 12,292 | 3.12 | % | ||||||||||||||||
| (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 | ||||||||||||||||||||||||