200 Munsonhurst Road
Franklin, NJ 07416
SUSSEX BANCORP ANNOUNCES A 13.5% INCREASE IN EARNINGS FOR 2011
FRANKLIN, NEW JERSEY – January 27, 2012– Sussex Bancorp (the “Company”) (NasdaqGM: SBBX), the holding company for Sussex Bank (the “Bank”) today announced a 13.5% increase in net income to $2.5 million, or $0.74 per diluted share, for the year ended December 31, 2011, over the same period in 2010. The Company attributed the increase in net income to growth in non-interest income and net interest income, which was partly offset by higher non-interest expenses. During the fourth quarter of 2011, the Company opened a commercial loan production office and a satellite office for Tri-State Insurance, our insurance subsidiary, in Rochelle Park, New Jersey. The Company’s overall asset credit quality continues to exhibit signs of improvement as total classified/criticized/foreclosed assets have declined 21.0% from a historical high at March 31, 2010. Non-performing assets were slightly down on a linked quarter basis, however increased in 2011 as compared to 2010. Management continues to focus on strengthening the Company’s core operations as well as resolving and mitigating the Company’s credit exposures.
“We continued to enhance our Companies capabilities in 2011, with the addition of talented and successful bankers to our team; which has helped build our business, produce double digit earnings growth, manage risk and reduce our overall problem credits 15% in 2011 and 21%, from a historic high in 2010,” said Anthony Labozzetta, President and Chief Executive Officer of Sussex Bank.
“While the economic environment remains uncertain and we continue to have high credit costs related to our nonperforming assets; I am encouraged by the productivity of our diverse business lines. Particularly our commercial lending division, which has experienced a substantial lift in new loans that had begun to close during the final months of the year,” noted Mr. Labozzetta.
Mr. Labozzetta added, “While we made significant progress in a number of areas this year, reducing our problem assets will remain our primary focus in 2012.”
2011 Highlights
· | Net interest income (tax equivalent basis) increased $548 thousand, or 3.2%, to $17.5 million in 2011. |
· | Net interest margin (tax equivalent basis) was 3.87% for 2011, up from 3.81% in 2010. The improvement was driven by a 30 basis points reduction in funding costs for 2011. |
· | Provision for loan losses increased $26 thousand, or 0.8%, to $3.3 million for 2011 as compared to 2010. |
· | Non-interest income increased $672 thousand, or 14.6%, to $5.3 million for 2011. The increase was driven by higher gains on the sales of securities and insurance commissions and fees, which grew by $593 thousand and $199 thousand, respectively, for 2011 as compared to 2010. Lower service charges on deposits of $116 thousand for 2011 partly offset the aforementioned increases. |
· | Non-interest expense increased $755 thousand, or 5.0% to $15.8 million for 2011. The increase was largely attributed to higher employee related costs of $745 thousand, resulting from a 6.3% increase in salary expense and a 26.7% increase in benefit costs, and higher loan collection costs of $322 thousand. The aforementioned increases were in part offset by a decline in FDIC assessments of $211 thousand. |
· | Segment reporting |
o | Our insurance subsidiary, Tri-state Insurance Agency, Inc. (“Tri-State”), reported net income before taxes of $152 thousand for 2011 as compared to a $68 thousand net loss before taxes for the same period last year. |
· | Balance sheet |
o | Total assets increased 6.9% as compared to last year. | ||
o | Gross loans are up 1.1% over last year. | ||
o | Total deposits increased $39.4 million, or 10.2%, as core deposits increased $20.9 million, or 7.1%, and time deposits grew by $18.5 million, or 20.0%, over last year. |
· | Credit quality |
o | Total classified/criticized/foreclosed assets declined $8.8 million, or 15.1%, to $49.6 million at December 31, 2011 from $58.4 million at December 31, 2010 and have declined 21.0% from a historical high of $62.8 million at March 31, 2010. | ||
o | Non-performing assets were slightly down on a linked quarter basis, however increased $6.8 million, or 25.8%, for December 31, 2011 as compared to December 31, 2010. Non-performing assets as a percent of total assets were 6.5% and 5.6% at December 31, 2011 and December 31, 2010, respectively. | ||
o | The allowance for loan losses totaled $7.2 million at December 31, 2011, or 2.11% of total loans, as compared to $6.4 million, or 1.89% of total loans, at December 31, 2010. |
· | Capital adequacy |
o | At December 31, 2011, the leverage, Tier I risk-based capital and total risk based capital ratios for the Bank were 9.29%, 12.98% and 14.24%, respectively, all in excess of the ratios required to be deemed “well-capitalized.” |
Fourth Quarter 2011 Financial Results
The Company reported net income of $515 thousand for the fourth quarter of 2011, a decrease of $82 thousand, or 13.7%, from net income of $597 thousand for the same period in 2010. Basic and diluted earnings per share for the three months ended December 31, 2011 were $0.16 and $0.15, respectively, compared to the basic and diluted earnings per share of $0.18 for the comparable period of 2010. The decrease in net income was largely due to an increase in non-interest expenses of $389 thousand and a decline in net interest income of $263 thousand, which was in part offset by lower provision for loan losses of $298 thousand and higher non-interest income of $220 thousand for the fourth quarter of 2011 as compared to the same period last year. Fourth quarter results reflected an increase in non-interest expenses largely attributed to higher salaries and employee benefits expenses due in part to the expansion of our commercial lending group and an accrual for an early termination of an employment agreement of $88 thousand. The decline in the net interest income was adversely impacted by a 36 basis point decline in the net interest margin due in part to lower loan yields.
Net Interest Income
Net interest income, on a fully tax equivalent basis, decreased $260 thousand, or 5.8%, to $4.3 million for the quarter ended December 31, 2011, as compared to the same period in 2010. The decrease in net interest income was largely due to a decline in the net interest margin of 36 basis points to 3.59% for the fourth quarter of 2011 as compared to the same period in 2010. The decline in the net interest margin was mostly due to lower loan yields and an increase in cash balances (other interest earning assets with average rate of 0.22%) resulting from deposit growth ($17.3 million on average) outpacing loan growth ($1.0 million on average) for the fourth quarter 2011 as compared to the same period last year. Total average interest earning assets increased $16.2 million, or 3.6%, for the fourth quarter of 2011 as compared to the same period last year.
Provision for Loan Losses
Provision for loan losses decreased $298 thousand, or 32.5%, to $618 thousand for the quarter ended December 31, 2011, as compared to $916 thousand for the same period in 2010.
Non-interest Income
The Company reported an increase in non-interest income of $220 thousand, or 19.8%, to $1.3 million for the quarter ended December 31, 2011. The increase in non-interest income was largely due to $377 thousand in security gains and a $97 thousand, or 21.6%, growth in insurance commissions and fees from Tri-State. The security gains recognized in the fourth quarter of 2011 was largely driven by the execution of two security strategies. The Company sold $5.7 million in municipal securities with long maturities, which generated $236 thousand in net gains, and also sold 24 mortgaged backed securities with an average balance of $96 thousand (total $2.3 million) for a net gain of $141 thousand. The aforementioned increases were partly offset by a $231 thousand impairment write-down on an equity fund and an equity security during the fourth quarter of 2011.
Non-interest Expense
The Company’s non-interest expenses increased $389 thousand, or 10.2%, to $4.2 million for the quarter ended December 31, 2011. The increase for the fourth quarter of 2011 versus the same period in 2010 was largely due to a $398 thousand increase in salaries and employee benefits. The increase in salaries and employee benefits was mostly attributed to the hiring of more commercial lenders, an accrual for the early termination of an employment agreement and higher medical premium expenses for the fourth quarter of 2011 as compared to the same quarter in 2010.
Full Year 2011 Financial Results
The Company reported net income of $2.5 million for 2011, an increase of $294 thousand, or 13.5%, from net income of $2.2 million for 2010. The increase in net income was largely due to growth in non-interest income of $672 thousand, or 14.6%, and higher net interest income (tax equivalent) of $548 thousand, or 3.2%, for 2011 as compared to 2010. The aforementioned increases were in part offset by higher non-interest expenses. Full year results for 2011 reflected an increase in non-interest expenses of $755 thousand, or 5.0%, for 2011 as compared to 2010, which was largely attributed to higher employee salaries and benefits expenses resulting in part to the expansion of our commercial lending group.
Net Interest Income
Net interest income, on a fully taxable equivalent basis, increased $548 thousand, or 3.2%, to $17.5 million for the year ended December 31, 2011, as compared to $17.0 million for same period in 2010. The increase in net interest income was attributed to a stronger net interest margin, which improved 6 basis points to 3.87%, and a $6.5 million increase in average interest earning assets for the 2011 as compared to 2010. The improvement in the net interest margin was mostly attributed to a 30 basis point decline in the average rate paid on interest bearing liabilities to 1.10%, which was partly offset by a 21 basis point decrease in the average rate on earning assets to 4.85% for the year ended December 31, 2011 as compared to the same period last year.
Provision for Loan Losses
Provision for loan losses increased $26 thousand, or 0.8%, to $3.3 million for 2011, as compared to 2010. Additional information is discussed below under the caption “Asset and Credit Quality.”
Non-interest Income
The Company reported an increase in non-interest income of $672 thousand, or 14.6%, to $5.3 million for the year ended December 31, 2011. The increase in non-interest income was largely due to higher gains on sale of securities, growth in insurance commissions and fees and bank-owned life insurance income of $593 thousand, $199 thousand (9.6%), and $106 thousand (33.8%), respectively, as compared to the same period last year. The security gains during the fourth quarter of 2011 resulted from the execution of strategies aimed at improving the Company’s interest rate risk profile and the sales of mortgaged-backed securities that have significantly paid down since their original purchase date. The aforementioned increases were partly offset by a decline in service fees on deposits, which decreased $116 thousand for 2011 as compared to 2010.
Non-interest Expense
The Company’s non-interest expenses increased $755 thousand, or 5.0%, to $15.8 million for 2011 as compared to 2010. The increase for 2011 was largely due to an increase in salaries and benefits and loan collection costs of $745 thousand, or 9.6%, and $322 thousand, or 64.2%, respectively. The increase was partly offset by a $211 thousand decline in FDIC assessment costs. The increase in salary and benefits expenses was due in part to the hiring of more commercial lenders, higher medical premiums, 401k costs and recruiting costs. Total salary expense, excluding benefits, increased $414 thousand, or 6.3%, while benefits increased $331 thousand, or 26.7%, for 2011 compared to the same period in 2010. The remaining other expenses declined by 1.7% for 2011 compared to 2010.
Financial Condition Comparison
At December 31, 2011, the Company’s total assets were $507.0 million, an increase of $32.9 million, or 6.9%, as compared to total assets of $474.0 million at December 31, 2010. The increase in total assets was largely driven by deposit growth resulting in higher interest-bearing deposits with other banks. The Company’s total deposits increased 10.2% to $425.4 million at December 31, 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 $20.9 million, or 7.1%, and higher time deposits of $18.5 million, or 20.0%, for December 31, 2011 as compared to December 31, 2010.
Total loans receivable, net of unearned income, increased $3.4 million, or 1.0%, to $341.6 million at December 31, 2011 from $338.2 million at year-end 2010. The Company’s security portfolio, which includes securities available for sale and securities held to maturity, increased $10.2 million, or 11.3%, to $100.6 million at December 31, 2011, as compared to $90.4 million at December 31, 2010.
At December 31, 2011, the Company’s total stockholders’ equity was $39.9 million, an increase of $3.2 million, or 8.8%, as compared to $36.7 million at December 31, 2010.
Asset and Credit Quality
The overall credit quality of the Company is showing signs of improvement as our classified/criticized/foreclosed assets declined $8.8 million, or 15.1%, to $49.6 million at December 31, 2011 from $58.4 million at December 31, 2010 and have declined 21.0% from a historical high of $62.8 million at March 31, 2010. Loans internally rated “Substandard,” “Doubtful” or “Loss” are considered classified assets, while loans rated as “Special Mention” are considered criticized. Such risk ratings are consistent with the classification system used by regulatory agencies and are consistent with industry practices.
Non-performing assets were slightly down on a linked quarter basis, however increased from the prior year largely due to increases in foreclosed assets and performing troubled debt restructured loans. Non-performing assets, which include non-accrual loans, performing troubled debt restructured loans and foreclosed assets, increased $6.8 million, or 25.8%, to $33.2 million at December 31, 2011, as compared to $26.4 million at December 31, 2010. The ratio of non-performing assets to total assets for December 31, 2011 and December 31, 2010 were 6.5% and 5.6%, respectively.
The increase in non-performing assets occurred in:
· | non-accrual loans, which increased $1.6 million, or 7.1%, to $24.3 million at December 31, 2011- the average loan balance was approximately $357 thousand at December 31, 2011 as compared to $384 thousand at December 31, 2010. |
· | performing troubled debt restructured loans increased $2.1 million largely due to one loan of $1.5 million, which has been performing since the loan was restructured during the second quarter of 2011. |
· | foreclosed assets increased $3.1 million and the average recorded investment for each property is approximately $424 thousand. |
The allowance for loan losses was $7.2 million, or 2.11% of total loans, at December 31, 2011 compared to $6.4 million, or 1.89% of total loans at December 31, 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; a loan production office in Rochelle Park, New Jersey and for the Tri-State Insurance Agency, Inc., a full service insurance agency with locations in Augusta and Rochelle Park, 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.
Contacts: Anthony Labozzetta, President/CEO
Steven Fusco, SVP/CFO
973-827-2914
SUSSEX BANCORP
SUMMARY FINANCIAL HIGHLIGHTS
(In Thousands, Except Percentages and Per Share Data)
(Unaudited)
12/31/11 VS. | ||||||||||||||||||||
12/31/2011 | 9/30/2011 | 12/31/2010 | 12/31/2010 | 9/30/2011 | ||||||||||||||||
BALANCE SHEET HIGHLIGHTS - Period End Balances | ||||||||||||||||||||
Total securities | $ | 102,418 | $ | 83,737 | $ | 92,615 | 10.6 | % | 22.3 | % | ||||||||||
Total loans | 341,632 | 337,794 | 338,234 | 1.0 | % | 1.1 | % | |||||||||||||
Allowance for loan losses | (7,210 | ) | (7,401 | ) | (6,397 | ) | 12.7 | % | (2.6 | )% | ||||||||||
Total assets | 506,953 | 495,884 | 474,024 | 6.9 | % | 2.2 | % | |||||||||||||
Total deposits | 425,376 | 415,050 | 385,967 | 10.2 | % | 2.5 | % | |||||||||||||
Total borrowings and junior subordinated debt | 38,887 | 38,887 | 48,887 | (20.5 | )% | - | % | |||||||||||||
Total shareholders' equity | 39,902 | 39,388 | 36,666 | 8.8 | % | 1.3 | % | |||||||||||||
FINANCIAL DATA - QUARTER ENDED: | ||||||||||||||||||||
Net interest income (tax equivalent) (a) | $ | 4,251 | $ | 4,339 | $ | 4,511 | (5.8 | )% | (2.0 | )% | ||||||||||
Provision for loan losses | 618 | 737 | 916 | (32.5 | )% | (16.1 | )% | |||||||||||||
Total other income | 1,331 | 1,206 | 1,111 | 19.8 | % | 10.4 | % | |||||||||||||
Total other expenses | 4,199 | 4,025 | 3,810 | 10.2 | % | 4.3 | % | |||||||||||||
Provision for income taxes | 102 | 97 | 154 | (33.9 | )% | 5.2 | % | |||||||||||||
Taxable equivalent adjustment (a) | 148 | 152 | 145 | 2.4 | % | (2.9 | )% | |||||||||||||
Net income | $ | 515 | $ | 534 | $ | 597 | (13.7 | )% | (3.5 | )% | ||||||||||
Net income per common share - Basic | $ | 0.16 | $ | 0.16 | $ | 0.18 | (11.1 | )% | 0.0 | % | ||||||||||
Net income per common share - Diluted | $ | 0.15 | $ | 0.16 | $ | 0.18 | (16.7 | )% | (6.2 | )% | ||||||||||
Return on average assets | 0.41 | % | 0.44 | % | 0.49 | % | (16.7 | )% | (6.3 | )% | ||||||||||
Return on average equity | 5.22 | % | 5.49 | % | 6.44 | % | (19.1 | )% | (5.0 | )% | ||||||||||
Efficiency ratio (b) | 77.27 | % | 74.64 | % | 69.56 | % | 11.1 | % | 3.5 | % | ||||||||||
Net interest margin (tax equivalent) | 3.59 | % | 3.80 | % | 3.95 | % | (9.0 | )% | (5.4 | )% | ||||||||||
FINANCIAL DATA - YEAR TO DATE: | ||||||||||||||||||||
Net interest income (tax equivalent) (a) | $ | 17,515 | $ | 13,263 | $ | 16,967 | 3.2 | % | ||||||||||||
Provision for loan losses | 3,306 | 2,688 | 3,280 | 0.8 | % | |||||||||||||||
Total other income | 5,283 | 3,952 | 4,611 | 14.6 | % | |||||||||||||||
Total other expenses | 15,783 | 11,584 | 15,028 | 5.0 | % | |||||||||||||||
Income before provision for income taxes (tax equivalent) | 3,709 | 2,943 | 3,270 | 13.4 | % | |||||||||||||||
Provision for income taxes | 637 | 535 | 542 | 17.5 | % | |||||||||||||||
Taxable equivalent adjustment (a) | 602 | 453 | 552 | 9.0 | % | |||||||||||||||
Net income | $ | 2,470 | $ | 1,955 | $ | 2,176 | 13.5 | % | ||||||||||||
Net income per common share - Basic | $ | 0.76 | $ | 0.60 | $ | 0.67 | 13.4 | % | ||||||||||||
Net income per common share - Diluted | $ | 0.74 | $ | 0.59 | $ | 0.66 | 12.1 | % | ||||||||||||
Return on average assets | 0.51 | % | 0.55 | % | 0.46 | % | 12.1 | % | ||||||||||||
Return on average equity | 6.44 | % | 6.86 | % | 6.04 | % | 6.5 | % | ||||||||||||
Efficiency ratio (b) | 71.11 | % | 69.11 | % | 71.47 | % | (0.5 | )% | ||||||||||||
Net interest margin (tax equivalent) | 3.87 | % | 3.97 | % | 3.81 | % | 1.7 | % | ||||||||||||
SHARE INFORMATION: | ||||||||||||||||||||
Book value per common share | $ | 11.83 | $ | 11.68 | $ | 10.94 | 8.1 | % | 1.3 | % | ||||||||||
Outstanding shares- period ending | 3,373 | 3,373 | 3,352 | 0.6 | % | - | % | |||||||||||||
Average diluted shares outstanding (Year to date) | 3,326 | 3,326 | 3,300 | 0.8 | % | - | % | |||||||||||||
CAPITAL RATIOS: | ||||||||||||||||||||
Total equity to total assets | 7.87 | % | 7.94 | % | 7.74 | % | 1.8 | % | (0.9 | )% | ||||||||||
Leverage ratio (c) | 9.29 | % | 9.42 | % | 9.04 | % | 2.8 | % | (1.4 | )% | ||||||||||
Tier 1 risk-based capital ratio (c) | 12.98 | % | 13.11 | % | 12.37 | % | 4.9 | % | (1.0 | )% | ||||||||||
Total risk-based capital ratio (c) | 14.24 | % | 14.37 | % | 13.63 | % | 4.5 | % | (0.9 | )% | ||||||||||
ASSET QUALITY AND RATIOS: | ||||||||||||||||||||
Non-accrual loans | $ | 24,283 | $ | 27,493 | $ | 22,682 | 7.1 | % | (11.7 | )% | ||||||||||
Troubled debt restructured loans (d) | 3,411 | 1,313 | 1,318 | 158.8 | % | 159.8 | % | |||||||||||||
Foreclosed real estate | 5,509 | 4,545 | 2,397 | 129.8 | % | 21.2 | % | |||||||||||||
Non-performing assets | $ | 33,203 | $ | 33,351 | $ | 26,397 | 25.8 | % | (0.4 | )% | ||||||||||
Loans 90 days past due and still accruing | $ | 803 | $ | 998 | $ | 49 | 1,538.8 | % | (19.5 | )% | ||||||||||
Charge-offs, net (quarterly) | $ | 803 | $ | 872 | $ | 616 | 30.4 | % | (7.9 | )% | ||||||||||
Charge-offs, net as a % of average loans (annualized) | 0.96 | % | 1.03 | % | 0.74 | % | 30.0 | % | (7.2 | )% | ||||||||||
Non-accrual loans to total loans | 7.11 | % | 8.14 | % | 6.71 | % | 5.99 | % | (12.67 | )% | ||||||||||
Non-performing assets to total assets | 6.55 | % | 6.73 | % | 5.57 | % | 17.6 | % | (2.6 | )% | ||||||||||
Allowance for loan losses as a % of non-performing loans | 26.03 | % | 25.69 | % | 26.65 | % | (2.33 | )% | 1.33 | % | ||||||||||
Allowance for loan losses to total loans | 2.11 | % | 2.19 | % | 1.89 | % | 11.6 | % | (3.7 | )% |
(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)
(Unaudited)
December 31, 2011 | December 31, 2010 | |||||||
ASSETS | ||||||||
Cash and due from banks | $ | 3,903 | $ | 4,672 | ||||
Interest-bearing deposits with other banks | 31,670 | 10,077 | ||||||
Federal funds sold | - | 3,000 | ||||||
Cash and cash equivalents | 35,573 | 17,749 | ||||||
Interest bearing time deposits with other banks | 100 | 600 | ||||||
Securities available for sale, at fair value | 96,361 | 89,380 | ||||||
Securities held to maturity | 4,220 | 1,000 | ||||||
Federal Home Loan Bank Stock, at cost | 1,837 | 2,235 | ||||||
Loans receivable, net of unearned income | 341,632 | 338,234 | ||||||
Less: allowance for loan losses | 7,210 | 6,397 | ||||||
Net loans receivable | 334,422 | 331,837 | ||||||
Foreclosed real estate | 5,509 | 2,397 | ||||||
Premises and equipment, net | 6,778 | 6,749 | ||||||
Accrued interest receivable | 1,735 | 1,916 | ||||||
Goodwill | 2,820 | 2,820 | ||||||
Bank owned life insurance | 11,142 | 10,173 | ||||||
Other assets | 6,456 | 7,168 | ||||||
Total Assets | $ | 506,953 | $ | 474,024 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Liabilities: | ||||||||
Deposits: | ||||||||
Non-interest bearing | $ | 44,762 | $ | 35,362 | ||||
Interest bearing | 380,614 | 350,605 | ||||||
Total Deposits | 425,376 | 385,967 | ||||||
Borrowings | 26,000 | 36,000 | ||||||
Accrued interest payable and other liabilities | 2,788 | 2,504 | ||||||
Junior subordinated debentures | 12,887 | 12,887 | ||||||
Total Liabilities | 467,051 | 437,358 | ||||||
Total Stockholders' Equity | 39,902 | 36,666 | ||||||
Total Liabilities and Stockholders' Equity | $ | 506,953 | $ | 474,024 |
SUSSEX BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands Except Per Share Data)
(Unaudited)
Three Months Ended December 31, | Fiscal Year Ended December 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
INTEREST INCOME | ||||||||||||||||
Loans receivable, including fees | $ | 4,588 | $ | 4,863 | $ | 18,798 | $ | 19,057 | ||||||||
Securities: | ||||||||||||||||
Taxable | 325 | 418 | 1,314 | 1,796 | ||||||||||||
Tax-exempt | 289 | 290 | 1,168 | 1,110 | ||||||||||||
Federal funds sold | 1 | 2 | 4 | 22 | ||||||||||||
Interest bearing deposits | 24 | 13 | 56 | 43 | ||||||||||||
Total Interest Income | 5,227 | 5,586 | 21,340 | 22,028 | ||||||||||||
INTEREST EXPENSE | ||||||||||||||||
Deposits | 799 | 837 | 3,141 | 3,995 | ||||||||||||
Borrowings | 267 | 328 | 1,064 | 1,393 | ||||||||||||
Junior subordinated debentures | 58 | 55 | 222 | 225 | ||||||||||||
Total Interest Expense | 1,124 | 1,220 | 4,427 | 5,613 | ||||||||||||
Net Interest Income | 4,103 | 4,366 | 16,913 | 16,415 | ||||||||||||
PROVISION FOR LOAN LOSSES | 618 | 916 | 3,306 | 3,280 | ||||||||||||
Net Interest Income after Provision for Loan Losses | 3,485 | 3,450 | 13,607 | 13,135 | ||||||||||||
OTHER INCOME | ||||||||||||||||
Service fees on deposit accounts | 322 | 357 | 1,290 | 1,406 | ||||||||||||
ATM and debit card fees | 145 | 131 | 545 | 501 | ||||||||||||
Bank owned life insurance | 105 | 94 | 419 | 313 | ||||||||||||
Insurance commissions and fees | 546 | 449 | 2,270 | 2,071 | ||||||||||||
Investment brokerage fees | 42 | 33 | 145 | 166 | ||||||||||||
Realized holding gains on trading securities | - | - | - | 7 | ||||||||||||
Gain on sale of securities, available for sale | 377 | - | 645 | 52 | ||||||||||||
Gain on sale of fixed assets | - | - | - | 2 | ||||||||||||
Gain (loss) on sale of foreclosed real estate | (36 | ) | 1 | (38 | ) | 18 | ||||||||||
Impairment write-downs on equity securities | (231 | ) | - | (231 | ) | (171 | ) | |||||||||
Other | 61 | 46 | 238 | 246 | ||||||||||||
Total Other Income | 1,331 | 1,111 | 5,283 | 4,611 | ||||||||||||
OTHER EXPENSES | ||||||||||||||||
Salaries and employee benefits | 2,316 | 1,918 | 8,528 | 7,783 | ||||||||||||
Occupancy, net | 357 | 334 | 1,412 | 1,345 | ||||||||||||
Furniture, equipment and data processing | 306 | 315 | 1,177 | 1,234 | ||||||||||||
Advertising and promotion | 31 | 40 | 172 | 178 | ||||||||||||
Professional fees | 222 | 209 | 661 | 607 | ||||||||||||
Director Fees | 32 | 82 | 176 | 265 | ||||||||||||
FDIC assessment | 165 | 230 | 700 | 911 | ||||||||||||
Insurance | 53 | 55 | 216 | 222 | ||||||||||||
Stationary and supplies | 62 | 47 | 184 | 194 | ||||||||||||
Loan collection costs | 218 | 195 | 824 | 502 | ||||||||||||
Write-down on foreclosed real estate | - | 32 | 145 | 241 | ||||||||||||
Expenses related to foreclosed real estate | 92 | 48 | 269 | 270 | ||||||||||||
Amortization of intangible assets | 2 | 3 | 10 | 14 | ||||||||||||
Other | 343 | 302 | 1,309 | 1,262 | ||||||||||||
Total Other Expenses | 4,199 | 3,810 | 15,783 | 15,028 | ||||||||||||
Income before Income Taxes | 617 | 751 | 3,107 | 2,718 | ||||||||||||
PROVISION FOR INCOME TAXES | 102 | 154 | 637 | 542 | ||||||||||||
Net Income | $ | 515 | $ | 597 | $ | 2,470 | $ | 2,176 | ||||||||
EARNINGS PER SHARE | ||||||||||||||||
Basic | $ | 0.16 | $ | 0.18 | $ | 0.76 | $ | 0.67 | ||||||||
Diluted | $ | 0.15 | $ | 0.18 | $ | 0.74 | $ | 0.66 |
SUSSEX BANCORP
COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES
(Dollars In Thousands)
(Unaudited)
Three Months Ended December 31, | ||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||
Average | Average | Average | Average | |||||||||||||||||||||
Earning Assets: | Balance | Interest (1) | Rate (2) | Balance | Interest (1) | Rate (2) | ||||||||||||||||||
Securities: | ||||||||||||||||||||||||
Tax exempt (3) | $ | 28,890 | $ | 439 | 6.02 | % | $ | 30,173 | $ | 435 | 5.72 | % | ||||||||||||
Taxable | 60,439 | 324 | 2.13 | % | 61,509 | 418 | 2.69 | % | ||||||||||||||||
Total securities | 89,329 | 763 | 3.39 | % | 91,682 | 853 | 3.69 | % | ||||||||||||||||
Total loans receivable (4) | 335,753 | 4,589 | 5.42 | % | 334,770 | 4,863 | 5.76 | % | ||||||||||||||||
Other interest-earning assets | 44,064 | 24 | 0.22 | % | 26,500 | 15 | 0.23 | % | ||||||||||||||||
Total earning assets | 469,146 | $ | 5,376 | 4.55 | % | 452,952 | $ | 5,731 | 5.02 | % | ||||||||||||||
Non-interest earning assets | 39,951 | 37,609 | ||||||||||||||||||||||
Allowance for loan losses | (7,570 | ) | (6,394 | ) | ||||||||||||||||||||
Total Assets | $ | 501,527 | $ | 484,167 | ||||||||||||||||||||
Sources of Funds: | ||||||||||||||||||||||||
Interest bearing deposits: | ||||||||||||||||||||||||
NOW | $ | 88,645 | $ | 81 | 0.36 | % | $ | 77,782 | $ | 126 | 0.64 | % | ||||||||||||
Money market | 17,485 | 22 | 0.50 | % | 14,175 | 19 | 0.54 | % | ||||||||||||||||
Savings | 164,887 | 241 | 0.58 | % | 173,981 | 311 | 0.71 | % | ||||||||||||||||
Time | 109,877 | 454 | 1.64 | % | 97,696 | 381 | 1.55 | % | ||||||||||||||||
Total interest bearing deposits | 380,893 | 799 | 0.83 | % | 363,634 | 837 | 0.91 | % | ||||||||||||||||
Borrowed funds | 26,000 | 268 | 4.03 | % | 31,189 | 328 | 4.12 | % | ||||||||||||||||
Junior subordinated debentures | 12,887 | 58 | 1.77 | % | 12,887 | 55 | 1.68 | % | ||||||||||||||||
Total interest bearing liabilities | 419,780 | $ | 1,125 | 1.06 | % | 407,710 | $ | 1,220 | 1.19 | % | ||||||||||||||
Non-interest bearing liabilities: | ||||||||||||||||||||||||
Demand deposits | 40,108 | 37,602 | ||||||||||||||||||||||
Other liabilities | 2,117 | 1,791 | ||||||||||||||||||||||
Total non-interest bearing liabilities | 42,226 | 39,393 | ||||||||||||||||||||||
Stockholders' equity | 39,520 | 37,064 | ||||||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 501,527 | $ | 484,167 | ||||||||||||||||||||
Net Interest Income and Margin (5) | $ | 4,251 | 3.59 | % | $ | 4,511 | 3.95 | % |
(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)
Twelve Months Ended December 31, | ||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||
Average | Average | Average | Average | |||||||||||||||||||||
Earning Assets: | Balance | Interest (1) | Rate (2) | Balance | Interest (1) | Rate (2) | ||||||||||||||||||
Securities: | ||||||||||||||||||||||||
Tax exempt (3) | $ | 29,692 | $ | 1,770 | 5.96 | % | $ | 28,871 | $ | 1,662 | 5.76 | % | ||||||||||||
Taxable | 54,425 | 1,314 | 2.41 | % | 52,766 | 1,796 | 3.40 | % | ||||||||||||||||
Total securities | 84,117 | 3,084 | 3.67 | % | 81,637 | 3,458 | 4.24 | % | ||||||||||||||||
Total loans receivable (4) | 339,770 | 18,798 | 5.53 | % | 331,457 | 19,057 | 5.75 | % | ||||||||||||||||
Other interest-earning assets | 28,547 | 60 | 0.21 | % | 32,793 | 65 | 0.20 | % | ||||||||||||||||
Total earning assets | 452,434 | $ | 21,942 | 4.85 | % | 445,887 | $ | 22,580 | 5.06 | % | ||||||||||||||
Non-interest earning assets | 38,507 | 37,945 | ||||||||||||||||||||||
Allowance for loan losses | (7,314 | ) | (6,093 | ) | ||||||||||||||||||||
Total Assets | $ | 483,627 | $ | 477,739 | ||||||||||||||||||||
Sources of Funds: | ||||||||||||||||||||||||
Interest bearing deposits: | ||||||||||||||||||||||||
NOW | $ | 81,374 | $ | 386 | 0.47 | % | $ | 67,729 | $ | 512 | 0.76 | % | ||||||||||||
Money market | 15,505 | 83 | 0.54 | % | 13,189 | 93 | 0.71 | % | ||||||||||||||||
Savings | 168,233 | 1,122 | 0.67 | % | 174,208 | 1,709 | 0.98 | % | ||||||||||||||||
Time | 98,673 | 1,549 | 1.57 | % | 101,354 | 1,681 | 1.66 | % | ||||||||||||||||
Total interest bearing deposits | 363,785 | 3,141 | 0.86 | % | 356,480 | 3,995 | 1.12 | % | ||||||||||||||||
Borrowed funds | 26,642 | 1,064 | 3.99 | % | 32,593 | 1,393 | 4.27 | % | ||||||||||||||||
Junior subordinated debentures | 12,887 | 222 | 1.72 | % | 12,887 | 225 | 1.75 | % | ||||||||||||||||
Total interest bearing liabilities | 403,314 | $ | 4,427 | 1.10 | % | 401,960 | $ | 5,613 | 1.40 | % | ||||||||||||||
Non-interest bearing liabilities: | ||||||||||||||||||||||||
Demand deposits | 39,596 | 38,255 | ||||||||||||||||||||||
Other liabilities | 2,349 | 1,525 | ||||||||||||||||||||||
Total non-interest bearing liabilities | 41,944 | 39,780 | ||||||||||||||||||||||
Stockholders' equity | 38,369 | 35,999 | ||||||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 483,627 | $ | 477,739 | ||||||||||||||||||||
Net Interest Income and Margin (5) | $ | 17,515 | 3.87 | % | $ | 16,967 | 3.81 | % |
(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