200 Munsonhurst Road
Franklin, NJ 07416
SUSSEX BANCORP ANNOUNCES A 48.3% INCREASE IN EPS FOR THE FIRST HALF OF 2011
FRANKLIN, NEW JERSEY – July 26, 2011– Sussex Bancorp (the “Company”) (NasdaqGM: SBBX), the holding company for Sussex Bank (the “Bank”) today announced net income of $727 thousand, or $0.22 per basic and diluted share, for the quarter ended June 30, 2011 as compared to $305 thousand, or $0.09 per basic and diluted share, for the same period last year. For the six months ended June 30, 2011, the Company reported net income of $1.4 million, or $0.43 per diluted share, as compared to $948 thousand, or $0.29 per diluted share, for the same period last year. The Company attributed the increase in net income to a stronger net interest margin and higher non-interest income as compared to the second quarter last year as management continues to focus on strengthening its core operations as well as resolving and mitigating the Company’s credit exposures.
“We continue to build positive momentum as evidenced by our reported earnings performance for the first half of 2011, despite the high credit costs associated with addressing our nonperforming assets,” said Anthony Labozzetta, President and Chief Executive Officer. “Even in this soft economy, our earnings are benefitting from accelerated sales performance and synergies among our business lines, which is demonstrated by the enhanced performance of our insurance subsidiary and an improved margin. While we see signs of stabilization in our credit portfolio, we remain focused on resolving our problem assets.” Mr. Labozzetta also stated that, “we have added a number of talented officers to our management team, which will enhance our capabilities and build shareholder value.”
Second Quarter and Year to Date 2011 Highlights
| · | Diluted earnings per share growth of 144.4% and 48.3% for the quarter and six months ended June 30, 2011, respectively, over the same periods last year. |
| · | Return on average assets increased to 0.60% for the six months ended June 30, 2011 from 0.40% for the same period in 2010. |
| · | Net interest income on a tax equivalent basis increased for the second quarter and six months ended June 30, 2011 by 7.8% and 9.0%, respectively, as compared to the same periods last year. |
| · | Net interest margin on a tax equivalent basis increased for the second quarter and six months ended June 30, 2011 were 3.98% and 4.06%, respectively, as compared to 3.69% and 3.76% for the same periods last year. The improvements for 2011 were mostly due to a decline in funding costs. |
| · | Provision for loan losses increased $147 thousand, or 15.2%, in the second quarter of 2011, as compared to the second quarter of 2010 and increased $249 thousand, or 14.6%, for the six month period ended June 30, 2011 as compared to the same period one year earlier. |
| · | Non-interest income increased $363 thousand, or 31.9%, to $1.5 million in the second quarter of 2011 over the prior year. The increase was driven by an increase in the gain on sale of securities of $215 thousand between the two second quarter periods. |
| · | Non-interest expense decreased $134 thousand to $3.7 million in the second quarter of 2011, compared to the same period in 2010. The decline was largely attributed to a $153 thousand, or 7.2%, decrease in salaries and employee benefits as a result of severance payments made in the second quarter of 2010. |
| o | Our insurance subsidiary, Tri-state Insurance Agency, Inc. reported a 276% increase in net income before taxes of $158 thousand for the first half of 2011 as compared to $42 thousand for the same period last year. For the second quarter of 2011, net income before taxes was $43 thousand, which was an increase of $19 thousand, or 78.7%, over the same period last year. |
| o | Total assets increased on a linked quarter basis by 0.9% and decreased 2.4% as compared to last year. |
| o | Loans are up 2.8% over last year and declined 1.1% on a linked quarter basis. |
| o | Total deposits increased $6.9 million, or 1.8%, as core deposits and time deposits increased $4.9 million, or 1.7%, and $2.0 million, or 2.3%, respectively, since year-end. The growth in core deposits was driven by a 17.6% increase in non-interest bearing deposits. |
| o | Nonperforming assets increased 0.9% for June 30, 2011 as compared to June 30, 2010. Nonperforming assets as a percent of total assets were 6.5% and 6.3% at June 30, 2011 and June 30, 2010, respectively. |
| o | The allowance for loan losses totaled $7.5 million at June 30, 2011, or 2.22% of total loans, as compared to $5.4 million, or 1.65% of total loans, at June 30, 2010. |
| o | Total classified/criticized/foreclosed assets declined 10.3% to $53.4 million at June 30, 2011 from $59.6 million at June 30, 2010. |
| o | At June 30 2011, the leverage, Tier I risk-based capital and total risk based capital ratios for the Bank were 9.56%, 12.84% and 14.10%, respectively, all in excess of the ratios required to be deemed “well-capitalized.” |
Second Quarter 2011 Financial Results
Net Interest Income
Net interest income, on a fully tax equivalent basis, increased $321 thousand, or 7.8%, to $4.4 million for the quarter ended June 30, 2011, as compared to $4.1 million for same period in 2010. The increase in net interest income was largely due to the Company’s net interest margin improving 29 basis points to 3.98% for the second quarter of 2011 primarily due to a 40 basis point decrease in the average rate paid on interest bearing liabilities. This improvement in net interest income was partially offset by a decline in the average rate earned on total earning assets, which decreased 9 basis points to 4.96% for the second quarter of 2011 from 5.05% for the same period in 2010. Total earning assets declined $982 thousand while total interest bearing liabilities fell $10.2 million between the two second quarter periods ended June 30, 2011 and 2010.
Provision for Loan Losses
Provision for loan losses increased $147 thousand to $1.1 million for the quarter ended June 30, 2011, as compared to $965 thousand for the same period in 2010. The increase in the provision for loan losses reflects the changes to non-performing asset levels as compared to the same period last year, which are discussed below under the caption “Asset and Credit Quality”.
Non-interest Income
The Company reported an increase in non-interest income of $363 thousand, or 31.9%, to $1.5 million for the quarter ended June 30, 2011. The increase in non-interest income was largely due to a $215 thousand increase in gain on the sale of securities and a $171 thousand decrease in an impairment write-down on equity securities in the second quarter of 2011, compared to the same period in 2010.
Non-interest Expense
The Company’s non-interest expenses decreased $134 thousand, or 3.5%, to $3.7 million for the quarter ended June 30, 2011. The decline for the second quarter of 2011 versus the same period in 2010 was largely due to a decrease of $153 thousand in salaries and employee benefits. The decrease was mostly attributed to severance payments in the second quarter of 2010. In addition, FDIC assessments declined $99 thousand, which was partly offset by an increase in loan collection costs of $91 thousand between the two second quarter periods.
Year to Date 2011 Financial Results
Net Interest Income
Net interest income, on a fully taxable equivalent basis, increased $740 thousand, or 9.0%, to $8.9 million for the six months ended June 30, 2011, as compared to $8.2 million for same period in 2010. The Company’s net interest margin improved 30 basis points to 4.06% for the first half of 2011, compared to 3.76% for the first half of 2010. The improvement was mostly attributed to a 43 basis point decline in the average rate paid on interest bearing liabilities to 1.11%, which was partly offset by an 11 basis point decrease in the average rate on earning assets to 5.04% for the six month periods ended June 30, 2011 as compared to the same period last year. The average balance of earning assets grew $4.7 million and as the balance sheet mix shifted to higher yielding loans and securities from lower yielding other interest-earning assets.
Provision for Loan Losses
Provision for loan losses increased $249 thousand to $2.0 million for the first half of 2011, as compared to $1.7 million for the same period in 2010.
Non-interest Income
The Company reported an increase in non-interest income of $432 thousand, or 18.7%, to $2.7 million for the six months ended June 30, 2011. The increase in non-interest income was largely due to a $100 thousand increase in bank-owned life insurance and a $215 thousand gain on sale of securities and a decrease in an impairment write-down on equity securities originally recorded in the first half of 2010
Non-interest Expense
The Company’s non-interest expenses increased $195 thousand, or 2.6%, to $7.6 million for the six months ended June 30, 2011. The increase in the first half of 2011 compared to the same period in 2010 was largely due to an increase in loan collection costs of $129 thousand, or 79.1%, and an increase of $116 thousand on write-downs on foreclosed real estate between the two first six months of 2011 and 2010.
Financial Condition Comparison
At June 30, 2011, the Company’s total assets were $473.2 million, a decrease of $860 thousand, or 0.2%, as compared to total assets of $474.0 million at December 31, 2010. The decrease in assets was largely driven by a decline in the securities portfolio. The Company’s total deposits increased 1.8% to $392.9 million at June 30, 2011 from $386.0 million at December 31, 2010. The increase in deposits was driven by growth in core deposits (non-interest bearing deposits, NOW, savings and money market accounts) of $4.9 million and higher time deposits of $2.0 million, at June 30, 2011 as compared to December 31, 2010. The growth in core deposits occurred in non-interest bearing deposits, which increased $6.2 million, or 17.6%, at June 30, 2011 to $41.6 million from $35.4 million at December 31, 2010.
Total loans receivable, net of unearned income, increased $1.3 million, or 0.4%, to $339.5 million at June 30, 2011 from $338.2 million at year-end 2010. The growth in deposits was used to fund this loan growth. The Company’s security portfolio, which includes securities available for sale, securities held to maturity and Federal Home Loan Bank stock, decreased $16.9 million, or 18.3%, to $75.7 million at June 30, 2011, as compared to $92.6 million at December 31, 2010.
At June 30, 2011, the Company’s total stockholders’ equity was $38.6 million, an increase of $1.9 million, or 5.3%, as compared to $36.7 million at December 31, 2010.
Asset and Credit Quality
Non-performing assets, which include non-accrual loans, renegotiated loans and foreclosed assets, increased $277 thousand, or 0.9%, to $30.9 million at June 30, 2011, as compared to $30.6 million at June 30, 2010. The ratio of non-performing assets to total assets for June 30, 2011 and June 30, 2010 were 6.5% and 6.3%, respectively. The allowance for loan losses was $7.5 million, or 2.22% of total loans, at June 30, 2011 as compared to $5.4 million, or 1.65% of total loans at June 30, 2010. Our loans are internally risk-rated and such risk ratings are consistent with the system used by regulatory agencies and are consistent with industry practices. Loans rated “Substandard,” “Doubtful” or “Loss” are considered classified assets, while loans rated as “Special Mention” are considered criticized. Our total classified/criticized/foreclosed assets declined 10.3% to $53.4 million at June 30, 2011 from $59.6 million at June 30, 2010.
About Sussex Bancorp
Sussex Bancorp is the holding company for Sussex Bank, which operates through its main office in Franklin, New Jersey and through its nine branch offices located in Andover, Augusta, Newton, Montague, Sparta, Vernon and Wantage, New Jersey, Port Jervis and Warwick, New York, and for the Tri-State Insurance Agency, Inc., a full service insurance agency located in Sussex County, New Jersey. For additional information, please visit the company's Web site 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 (the “Reform Act”). 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, 2010, 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) |
| | | | | | | | | | | | Q/E 6/30/11 VS. | |
| | 6/30/2011 | | | 6/30/2010 | | | 3/31/2011 | | | Q/E 6/30/10 | | | Q/E 3/31/11 | |
| BALANCE SHEET HIGHLIGHTS - Period End Balances | | | | | | | | | | | | | |
| Total securities | | $ | 75,692 | | | $ | 79,421 | | | $ | 83,503 | | | | (4.7 | ) % | | | (9.4 | ) % |
| Total loans | | | 339,564 | | | | 330,179 | | | | 343,474 | | | | 2.8 | % | | | (1.1 | ) % |
| Allowance for loan losses | | | (7,536 | ) | | | (5,449 | ) | | | (7,226 | ) | | | 38.3 | % | | | 4.3 | % |
| Total assets | | | 473,164 | | | | 484,626 | | | | 468,892 | | | | (2.4 | ) % | | | 0.9 | % |
| Total deposits | | | 392,914 | | | | 400,051 | | | | 390,231 | | | | (1.8 | ) % | | | 0.7 | % |
| Total borrowings and junior subordinated debt | | | 38,887 | | | | 45,947 | | | | 38,887 | | | | (15.4 | ) % | | | - | % |
| Total shareholders' equity | | | 38,615 | | | | 35,895 | | | | 37,511 | | | | 7.6 | % | | | 2.9 | % |
| | | | | | | | | | | | | | | | | | | | | |
| FINANCIAL DATA - QUARTER ENDED: | | | | | | | | | | | | | | | | | | | | |
| Net interest income (tax equivalent) (a) | | $ | 4,416 | | | $ | 4,096 | | | $ | 4,507 | | | | 7.8 | % | | | (2.0 | ) % |
| Provision for loan losses | | | 1,112 | | | | 965 | | | | 839 | | | | 15.2 | % | | | 32.5 | % |
| Total other income | | | 1,501 | | | | 1,138 | | | | 1,245 | | | | 31.9 | % | | | 20.5 | % |
| Total other expenses | | | 3,699 | | | | 3,833 | | | | 3,860 | | | | (3.5 | ) % | | | (4.2 | ) % |
| Provision (benefit) for income taxes | | | 229 | | | | -2 | | | | 209 | | | | (11,550.0 | ) % | | | 9.4 | % |
| Taxable equivalent adjustment (a) | | | 150 | | | | 133 | | | | 150 | | | | 13.0 | % | | | (0.1 | ) % |
| Net income | | $ | 727 | | | $ | 305 | | | $ | 694 | | | | 138.4 | % | | | 4.8 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Net income per common share - Basic | | $ | 0.22 | | | $ | 0.09 | | | $ | 0.21 | | | | 144.4 | % | | | 4.8 | % |
| Net income per common share - Diluted | | $ | 0.22 | | | $ | 0.09 | | | $ | 0.21 | | | | 144.4 | % | | | 4.8 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.61 | % | | | 0.25 | % | | | 0.59 | % | | | 141.5 | % | | | 4.5 | % |
| Return on average equity | | | 7.63 | % | | | 3.42 | % | | | 7.52 | % | | | 123.2 | % | | | 1.5 | % |
| Efficiency ratio (b) | | | 64.14 | % | | | 73.23 | % | | | 68.91 | % | | | (12.4 | ) % | | | (6.9 | ) % |
| Net interest margin (tax equivalent) | | | 3.98 | % | | | 3.69 | % | | | 4.13 | % | | | 7.9 | % | | | (3.6 | ) % |
| | | | | | | | | | | | | | | | | | | | | |
| FINANCIAL DATA - YEAR TO DATE: | | | | | | | | | | | | | | | | | | | | |
| Net interest income (tax equivalent) (a) | | $ | 8,923 | | | $ | 8,183 | | | | | | | | 9.0 | % | | | | |
| Provision for loan losses | | | 1,951 | | | | 1,702 | | | | | | | | 14.6 | % | | | | |
| Total other income | | | 2,746 | | | | 2,314 | | | | | | | | 18.7 | % | | | | |
| Total other expenses | | | 7,559 | | | | 7,364 | | | | | | | | 2.6 | % | | | | |
| Income before provision for income taxes (tax equivalent) | | | 2,159 | | | | 1,431 | | | | | | | | 50.9 | % | | | | |
| Provision for income taxes | | | 438 | | | | 220 | | | | | | | | 99.1 | % | | | | |
| Taxable equivalent adjustment (a) | | | 300 | | | | 263 | | | | | | | | 14.1 | % | | | | |
| Net income | | $ | 1,421 | | | $ | 948 | | | | | | | | 49.9 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Net income per common share - Basic | | $ | 0.44 | | | $ | 0.29 | | | | | | | | 51.7 | % | | | | |
| Net income per common share - Diluted | | $ | 0.43 | | | $ | 0.29 | | | | | | | | 48.3 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.60 | % | | | 0.40 | % | | | | | | | 49.6 | % | | | | |
| Return on average equity | | | 7.57 | % | | | 5.37 | % | | | | | | | 41.1 | % | | | | |
| Efficiency ratio (b) | | | 66.49 | % | | | 71.96 | % | | | | | | | (7.6 | ) % | | | | |
| Net interest margin (tax equivalent) | | | 4.06 | % | | | 3.76 | % | | | | | | | 7.9 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| SHARE INFORMATION: | | | | | | | | | | | | | | | | | | | | |
| Book value per common share | | $ | 11.45 | | | $ | 10.71 | | | $ | 11.16 | | | | 6.9 | % | | | 2.6 | % |
| Outstanding shares- period ending | | | 3,373 | | | | 3,352 | | | | 3,362 | | | | 0.7 | % | | | 0.3 | % |
| Average diluted shares outstanding (Year to date) | | | 3,323 | | | | 3,287 | | | | 3,318 | | | | 1.1 | % | | | 0.1 | % |
| | | | | | | | | | | | | | | | | | | | | |
| CAPITAL RATIOS: | | | | | | | | | | | | | | | | | | | | |
| Total equity to total assets | | | 8.16 | % | | | 7.41 | % | | | 8.00 | % | | | 10.2 | % | | | 2.0 | % |
| Leverage ratio (c) | | | 9.56 | % | | | 8.84 | % | | | 9.41 | % | | | 8.1 | % | | | 1.6 | % |
| Tier 1 risk-based capital ratio (c) | | | 12.84 | % | | | 11.94 | % | | | 12.55 | % | | | 7.5 | % | | | 2.3 | % |
| Total risk-based capital ratio (c) | | | 14.10 | % | | | 13.19 | % | | | 13.81 | % | | | 6.9 | % | | | 2.1 | % |
| | | | | | | | | | | | | | | | | | | | | |
| ASSET QUALITY AND RATIOS: | | | | | | | | | | | | | | | | | | | | |
| Non-accrual loans | | $ | 25,062 | | | $ | 22,529 | | | $ | 25,086 | | | | 11.2 | % | | | (0.1 | ) % |
| Renegotiated loans (d) | | | 1,314 | | | | 3,551 | | | | 1,316 | | | | (63.0 | ) % | | | (0.2 | ) % |
| Foreclosed real estate | | | 4,545 | | | | 4,564 | | | | 2,080 | | | | (0.4 | ) % | | | 118.5 | % |
| Non-performing assets | | $ | 30,921 | | | $ | 30,644 | | | $ | 28,482 | | | | 0.9 | % | | | 8.6 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Loans 90 days past due and still accruing | | $ | 1,029 | | | $ | 1,262 | | | $ | 136 | | | | (18.5 | ) % | | | 656.6 | % |
| Charge-offs, net (quarterly) | | $ | 802 | | | $ | 1,741 | | | $ | 10 | | | | (53.9 | ) % | | | 7,920.0 | % |
| Charge-offs, net as a % of average loans (annualized) | | | 0.93 | % | | | 1.45 | % | | | 0.01 | % | | | (35.6 | ) % | | | 7,881.4 | % |
| Non-accrual loans to total loans | | | 7.38 | % | | | 6.82 | % | | | 7.30 | % | | | 8.17 | % | | | 1.05 | % |
| Non-performing assets to total assets | | | 6.53 | % | | | 6.32 | % | | | 6.07 | % | | | 3.3 | % | | | 7.6 | % |
| Allowance for loan losses as a % of non-performing loans | | | 28.57 | % | | | 20.89 | % | | | 27.37 | % | | | 36.75 | % | | | 4.40 | % |
| Allowance for loan losses to total loans | | | 2.22 | % | | | 1.65 | % | | | 2.10 | % | | | 34.5 | % | | | 5.5 | % |
(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) Renegotiated loans currently performing in accordance with renegotiated terms
| SUSSEX BANCORP |
| CONSOLIDATED BALANCE SHEETS |
| (Dollars In Thousands) |
| (Unaudited) |
| ASSETS | | June 30, 2011 | | | June 30, 2010 | | | December 31, 2010 | |
| | | | | | | | | | |
| Cash and due from banks | | $ | 5,973 | | | $ | 5,814 | | | $ | 4,672 | |
| Interest-bearing deposits with other banks | | | 19,319 | | | | 9,231 | | | | 10,077 | |
| Federal funds sold | | | 3,000 | | | | 29,980 | | | | 3,000 | |
| Cash and cash equivalents | | | 28,292 | | | | 45,025 | | | | 17,749 | |
| | | | | | | | | | | | | |
| Interest bearing time deposits with other banks | | | 600 | | | | 600 | | | | 600 | |
| Securities available for sale, at fair value | | | 71,889 | | | | 77,318 | | | | 89,380 | |
| Securities held to maturity | | | 1,966 | | | | - | | | | 1,000 | |
| Federal Home Loan Bank Stock, at cost | | | 1,837 | | | | 2,103 | | | | 2,235 | |
| | | | | | | | | | | | | |
| Loans receivable, net of unearned income | | | 339,564 | | | | 330,179 | | | | 338,234 | |
| Less: allowance for loan losses | | | 7,536 | | | | 5,449 | | | | 6,397 | |
| Net loans receivable | | | 332,028 | | | | 324,730 | | | | 331,837 | |
| | | | | | | | | | | | | |
| Foreclosed real estate | | | 4,545 | | | | 4,564 | | | | 2,397 | |
| Premises and equipment, net | | | 6,516 | | | | 6,969 | | | | 6,749 | |
| Accrued interest receivable | | | 1,781 | | | | 1,802 | | | | 1,916 | |
| Goodwill | | | 2,820 | | | | 2,820 | | | | 2,820 | |
| Bank owned life insurance | | | 10,382 | | | | 9,968 | | | | 10,173 | |
| Other assets | | | 10,508 | | | | 8,727 | | | | 7,168 | |
| | | | | | | | | | | | | |
| Total Assets | | $ | 473,164 | | | $ | 484,626 | | | $ | 474,024 | |
| | | | | | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | |
| Non-interest bearing | | $ | 41,601 | | | $ | 39,570 | | | $ | 35,362 | |
| Interest bearing | | | 351,313 | | | | 360,481 | | | | 350,605 | |
| Total Deposits | | | 392,914 | | | | 400,051 | | | | 385,967 | |
| | | | | | | | | | | | | |
| Borrowings | | | 26,000 | | | | 33,060 | | | | 36,000 | |
| Accrued interest payable and other liabilities | | | 2,748 | | | | 2,733 | | | | 2,504 | |
| Junior subordinated debentures | | | 12,887 | | | | 12,887 | | | | 12,887 | |
| | | | | | | | | | | | | |
| Total Liabilities | | | 434,549 | | | | 448,731 | | | | 437,358 | |
| | | | | | | | | | | | | |
| Total Stockholders' Equity | | | 38,615 | | | | 35,895 | | | | 36,666 | |
| | | | | | | | | | | | | |
| Total Liabilities and Stockholders' Equity | | $ | 473,164 | | | $ | 484,626 | | | $ | 474,024 | |
| SUSSEX BANCORP |
| CONSOLIDATED STATEMENTS OF INCOME |
| (Dollars In Thousands Except Per Share Data) |
| (Unaudited) |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
| INTEREST INCOME | | | | | | | | | | | | |
| Loans receivable, including fees | | $ | 4,739 | | | $ | 4,749 | | | $ | 9,523 | | | $ | 9,429 | |
| Securities: | | | | | | | | | | | | | | | | |
| Taxable | | | 310 | | | | 452 | | | | 675 | | | | 966 | |
| Tax-exempt | | | 291 | | | | 265 | | | | 583 | | | | 528 | |
| Federal funds sold | | | 2 | | | | 10 | | | | 3 | | | | 17 | |
| Interest bearing deposits | | | 10 | | | | 8 | | | | 13 | | | | 10 | |
| Total Interest Income | | | 5,352 | | | | 5,484 | | | | 10,797 | | | | 10,950 | |
| | | | | | | | | | | | | | | | | |
| INTEREST EXPENSE | | | | | | | | | | | | | | | | |
| Deposits | | | 767 | | | | 1,111 | | | | 1,536 | | | | 2,215 | |
| Borrowings | | | 264 | | | | 355 | | | | 529 | | | | 707 | |
| Junior subordinated debentures | | | 55 | | | | 55 | | | | 109 | | | | 108 | |
| Total Interest Expense | | | 1,086 | | | | 1,521 | | | | 2,174 | | | | 3,030 | |
| | | | | | | | | | | | | | | | | |
| Net Interest Income | | | 4,266 | | | | 3,963 | | | | 8,623 | | | | 7,920 | |
| PROVISION FOR LOAN LOSSES | | | 1,112 | | | | 965 | | | | 1,951 | | | | 1,702 | |
| Net Interest Income after Provision for Loan Losses | | | 3,154 | | | | 2,998 | | | | 6,672 | | | | 6,218 | |
| | | | | | | | | | | | | | | | | |
| OTHER INCOME | | | | | | | | | | | | | | | | |
| Service fees on deposit accounts | | | 328 | | | | 340 | | | | 644 | | | | 674 | |
| ATM and debit card fees | | | 138 | | | | 127 | | | | 260 | | | | 242 | |
| Bank owned life insurance | | | 105 | | | | 73 | | | | 209 | | | | 109 | |
| Insurance commissions and fees | | | 564 | | | | 590 | | | | 1,179 | | | | 1,137 | |
| Investment brokerage fees | | | 39 | | | | 49 | | | | 70 | | | | 109 | |
| Realized holding gains (losses) on trading securities | | | - | | | | (4 | ) | | | - | | | | 7 | |
| Gain on sale of securities, available for sale | | | 269 | | | | 54 | | | | 269 | | | | 54 | |
| Gain (loss) on sale of foreclosed real estate | | | 7 | | | | 1 | | | | (4 | ) | | | 5 | |
| Impairment write-downs on equity securities | | | - | | | | (171 | ) | | | - | | | | (171 | ) |
| Other | | | 51 | | | | 79 | | | | 119 | | | | 148 | |
| Total Other Income | | | 1,501 | | | | 1,138 | | | | 2,746 | | | | 2,314 | |
| | | | | | | | | | | | | | | | | |
| OTHER EXPENSES | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 1,986 | | | | 2,139 | | | | 3,993 | | | | 3,980 | |
| Occupancy, net | | | 336 | | | | 331 | | | | 717 | | | | 675 | |
| Furniture, equipment and data processing | | | 288 | | | | 295 | | | | 588 | | | | 594 | |
| Advertising and promotion | | | 46 | | | | 51 | | | | 89 | | | | 102 | |
| Professional fees | | | 149 | | | | 135 | | | | 276 | | | | 268 | |
| Director Fees | | | 72 | | | | 60 | | | | 139 | | | | 118 | |
| FDIC assessment | | | 126 | | | | 225 | | | | 382 | | | | 449 | |
| Insurance | | | 54 | | | | 55 | | | | 110 | | | | 111 | |
| Stationary and supplies | | | 40 | | | | 50 | | | | 83 | | | | 94 | |
| Loan collection costs | | | 177 | | | | 86 | | | | 292 | | | | 163 | |
| Write-down on foreclosed real estate | | | - | | | | - | | | | 145 | | | | 29 | |
| Expenses related to foreclosed real estate | | | 79 | | | | 110 | | | | 103 | | | | 138 | |
| Amortization of intangible assets | | | 2 | | | | 4 | | | | 5 | | | | 8 | |
| Other | | | 344 | | | | 292 | | | | 637 | | | | 635 | |
| Total Other Expenses | | | 3,699 | | | | 3,833 | | | | 7,559 | | | | 7,364 | |
| | | | | | | | | | | | | | | | | |
| Income before Income Taxes | | | 956 | | | | 303 | | | | 1,859 | | | | 1,168 | |
| PROVISION (BENEFIT) FOR INCOME TAXES | | | 229 | | | | (2 | ) | | | 438 | | | | 220 | |
| Net Income | | $ | 727 | | | $ | 305 | | | $ | 1,421 | | | $ | 948 | |
| | | | | | | | | | | | | | | | | |
| EARNINGS PER SHARE | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.22 | | | $ | 0.09 | | | $ | 0.44 | | | $ | 0.29 | |
| Diluted | | $ | 0.22 | | | $ | 0.09 | | | $ | 0.43 | | | $ | 0.29 | |
| SUSSEX BANCORP |
| COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES |
| (Dollars In Thousands) |
| (Unaudited) |
| | | Three Months Ended June 30, | |
| | | 2011 | | | 2010 | |
| | | Average | | | | | | Average | | | Average | | | | | | Average | |
| Earning Assets: | | Balance | | | Interest (1) | | | Rate (2) | | | Balance | | | Interest (1) | | | Rate (2) | |
| Securities: | | | | | | | | | | | | | | | | | | |
Tax exempt (3) | | $ | 29,805 | | | $ | 441 | | | | 5.94 | % | | $ | 27,768 | | | $ | 398 | | | | 5.74 | % |
| Taxable | | | 48,992 | | | | 310 | | | | 2.54 | % | | | 51,004 | | | | 452 | | | | 3.56 | % |
| Total securities | | | 78,797 | | | | 751 | | | | 3.83 | % | | | 78,772 | | | | 850 | | | | 4.33 | % |
Total loans receivable (4) | | | 343,333 | | | | 4,739 | | | | 5.54 | % | | | 331,033 | | | | 4,749 | | | | 5.75 | % |
| Other interest-earning assets | | | 22,674 | | | | 12 | | | | 0.20 | % | | | 35,981 | | | | 18 | | | | 0.20 | % |
| Total earning assets | | | 444,804 | | | $ | 5,502 | | | | 4.96 | % | | | 445,786 | | | $ | 5,617 | | | | 5.05 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-interest earning assets | | | 36,421 | | | | | | | | | | | | 40,353 | | | | | | | | | |
| Allowance for loan losses | | | (7,602 | ) | | | | | | | | | | | (6,355 | ) | | | | | | | | |
| Total Assets | | $ | 473,623 | | | | | | | | | | | $ | 479,784 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Sources of Funds: | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest bearing deposits: | | | | | | | | | | | | | | | | | | | | | | | | |
| NOW | | $ | 78,439 | | | $ | 106 | | | | 0.54 | % | | $ | 64,034 | | | $ | 134 | | | | 0.84 | % |
| Money market | | | 14,504 | | | | 20 | | | | 0.55 | % | | | 12,385 | | | | 25 | | | | 0.82 | % |
| Savings | | | 169,086 | | | | 296 | | | | 0.70 | % | | | 176,352 | | | | 506 | | | | 1.15 | % |
| Time | | | 91,804 | | | | 345 | | | | 1.51 | % | | | 104,174 | | | | 446 | | | | 1.72 | % |
| Total interest bearing deposits | | | 353,833 | | | | 767 | | | | 0.87 | % | | | 356,945 | | | | 1,111 | | | | 1.25 | % |
| Borrowed funds | | | 26,000 | | | | 264 | | | | 4.03 | % | | | 33,066 | | | | 355 | | | | 4.25 | % |
| Junior subordinated debentures | | | 12,887 | | | | 55 | | | | 1.69 | % | | | 12,887 | | | | 55 | | | | 1.69 | % |
| Total interest bearing liabilities | | | 392,720 | | | $ | 1,086 | | | | 1.11 | % | | | 402,898 | | | $ | 1,521 | | | | 1.51 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand deposits | | | 40,402 | | | | | | | | | | | | 39,841 | | | | | | | | | |
| Other liabilities | | | 2,370 | | | | | | | | | | | | 1,341 | | | | | | | | | |
| Total non-interest bearing liabilities | | | 42,772 | | | | | | | | | | | | 41,182 | | | | | | | | | |
| Stockholders' equity | | | 38,131 | | | | | | | | | | | | 35,704 | | | | | | | | | |
| Total Liabilities and Stockholders' Equity | | $ | 473,623 | | | | | | | | | | | $ | 479,784 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Net Interest Income and Margin (5) | | | | | | $ | 4,416 | | | | 3.98 | % | | | | | | $ | 4,096 | | | | 3.69 | % |
(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) |
| | | Six Months Ended June 30, | |
| | | 2011 | | | 2010 |
| | | Average | | | | | | Average | | | Average | | | | | | Average | |
| Earning Assets: | | Balance | | | Interest (1) | | | Rate (2) | | | Balance | | | Interest (1) | | | Rate (2) | |
| Securities: | | | | | | | | | | | | | | | | | | |
Tax exempt (3) | | $ | 29,913 | | | $ | 883 | | | | 5.95 | % | | $ | 27,295 | | | $ | 791 | | | | 5.85 | % |
| Taxable | | | 54,181 | | | | 675 | | | | 2.51 | % | | | 49,982 | | | | 966 | | | | 3.90 | % |
| Total securities | | | 84,094 | | | | 1,558 | | | | 3.74 | % | | | 77,277 | | | | 1,757 | | | | 4.59 | % |
Total loans receivable (4) | | | 342,511 | | | | 9,523 | | | | 5.61 | % | | | 330,872 | | | | 9,429 | | | | 5.75 | % |
| Other interest-earning assets | | | 17,111 | | | | 16 | | | | 0.19 | % | | | 30,847 | | | | 27 | | | | 0.18 | % |
| Total earning assets | | | 443,716 | | | $ | 11,097 | | | | 5.04 | % | | | 438,996 | | | $ | 11,213 | | | | 5.15 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-interest earning assets | | | 36,425 | | | | | | | | | | | | 39,102 | | | | | | | | | |
| Allowance for loan losses | | | (7,209 | ) | | | | | | | | | | | (6,083 | ) | | | | | | | | |
| Total Assets | | $ | 472,932 | | | | | | | | | | | $ | 472,015 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Sources of Funds: | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest bearing deposits: | | | | | | | | | | | | | | | | | | | | | | | | |
| NOW | | $ | 79,558 | | | $ | 220 | | | | 0.56 | % | | $ | 62,835 | | | $ | 277 | | | | 0.89 | % |
| Money market | | | 13,960 | | | | 38 | | | | 0.56 | % | | | 12,410 | | | | 49 | | | | 0.80 | % |
| Savings | | | 169,839 | | | | 594 | | | | 0.71 | % | | | 171,973 | | | | 1,000 | | | | 1.17 | % |
| Time | | | 90,919 | | | | 684 | | | | 1.52 | % | | | 103,638 | | | | 889 | | | | 1.73 | % |
| Total interest bearing deposits | | | 354,276 | | | | 1,536 | | | | 0.87 | % | | | 350,856 | | | | 2,215 | | | | 1.27 | % |
| Borrowed funds | | | 27,295 | | | | 529 | | | | 3.86 | % | | | 33,073 | | | | 707 | | | | 4.25 | % |
| Junior subordinated debentures | | | 12,887 | | | | 109 | | | | 1.69 | % | | | 12,887 | | | | 108 | | | | 1.67 | % |
| Total interest bearing liabilities | | | 394,458 | | | $ | 2,174 | | | | 1.11 | % | | | 396,816 | | | $ | 3,030 | | | | 1.54 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand deposits | | | 38,616 | | | | | | | | | | | | 38,349 | | | | | | | | | |
| Other liabilities | | | 2,332 | | | | | | | | | | | | 1,522 | | | | | | | | | |
| Total non-interest bearing liabilities | | | 40,948 | | | | | | | | | | | | 39,871 | | | | | | | | | |
| Stockholders' equity | | | 37,526 | | | | | | | | | | | | 35,328 | | | | | | | | | |
| Total Liabilities and Stockholders' Equity | | $ | 472,932 | | | | | | | | | | | $ | 472,015 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Net Interest Income and Margin (5) | | | | | | $ | 8,923 | | | | 4.06 | % | | | | | | $ | 8,183 | | | | 3.76 | % |
(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
| Contacts: | Anthony Labozzetta, President/CEO |
Steven Fusco, SVP/CFO
973-827-2914
