Exhibit 99.1
100 Enterprise Dr.
Rockaway, NJ 07866
SUSSEX BANCORP ANNOUNCES A 62% INCREASE IN EPS FOR THE THIRD QUARTER OF 2015
AND DECLARES QUARTERLY CASH DIVIDEND
ROCKAWAY, NEW JERSEY – October 29, 2015 – Sussex Bancorp (the “Company”) (Nasdaq: SBBX), the holding company for Sussex Bank (the “Bank”), today announced reported net income of $951 thousand, or $0.21 per basic and diluted share, for the quarter ended September 30, 2015, as compared to net income of $592 thousand, or $0.13 per basic and diluted share, for the same period last year. This increase equates to a 61.5% increase in net income per diluted common share for the quarter ended September 30, 2015, as compared to the same period last year. The improvement for the third quarter of 2015 was driven by loan and deposit growth, an increase in pre-tax income generated from our insurance subsidiary and a decline in credit quality costs (provision for loan losses, loan collection costs and expenses and write-downs related to foreclosed real estate). For the first nine months ended September 30, 2015, the Company reported net income of $2.8 million, or $0.61 per basic and diluted share, an increase of over 48% as compared to the same period last year.
“I am pleased to report that our strong organic growth continued in the third quarter. Our loan portfolio grew 4.6% or 18.5% annualized on $54.2 million of gross loan production, our deposits grew at an annualized rate of 12.0%, predominately in non-interest bearing deposits and our insurance subsidiary had a strong quarter, increasing their pre-tax income 477%,” said Anthony Labozzetta, President and Chief Executive Officer of Sussex Bank. Mr. Labozzetta also stated, “While spreads in our industry are tightening due in part to the present hyper-competitive environment, the contributions from all of our business lines not only helped keep our net interest margin relatively stable, but also produced the positive operating leverage necessary to drive our improved financial performance.”
In addition, Mr. Labozzetta stated, “We are excited about opening our next branch in Oradell, NJ which is scheduled for the first quarter of 2016. Comparable to our successful Astoria location, the Oradell branch will utilize our new model that includes more technology, a smaller footprint and a new approach to staffing.”
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 25, 2015 to common shareholders of record as of the close of business on November 11, 2015.
Financial Performance
Net Income. For the quarter ended September 30, 2015, the Company reported net income of $951 thousand, or $0.21 per basic and diluted share, as compared to net income of $592 thousand, or $0.13 per basic and diluted share, for the same period last year. The increase in net income for the quarter ended September 30, 2015 was primarily due to an increase in net interest income of $508 thousand, a decline in the provision for loan losses of $377 thousand and an increase in pre-tax income from our insurance subsidiary, Tri-State Insurance Agency, Inc., which increased $143 thousand to $173 thousand for the third quarter of 2015 as compared to the same period in 2014. The aforementioned were partially offset by an increase in non-interest expenses of $504 thousand, largely due to a $265 thousand increase in expenses and write-downs related to foreclosed real estate associated with the sale and pending sales of $1.3 million of foreclosed real estate in the third quarter of 2015.
For the nine months ended September 30, 2015, the Company reported net income of $2.8 million, or $0.61 per basic and diluted share, as compared to net income of $1.9 million, or $0.41 per basic and diluted share, for the same period last year. The increase in net income for the nine months ended September 30, 2015 was largely due to increases in net interest income of $1.5 million, non-interest income of $507 thousand, and a decline in the provision for loan losses of $725 thousand, which were partially offset by an increase in non-interest expenses of $1.3 million and income tax expense of $519 thousand. Tri-State Insurance Agency, Inc. pre-tax income increased $175 thousand, or 41.5% to $601 thousand for the nine months ended September 30, 2015 as compared to the same period in 2014.
Net Interest Income. Net interest income on a fully tax equivalent basis increased $508 thousand, or 10.9%, to $5.2 million for the third quarter of 2015, as compared to $4.7 million for the same period in 2014. The increase in net interest income was largely due to a $64.7 million, or 12.1%, increase in average interest earning assets, principally loans receivable, which increased $51.2 million, or 11.7%. The improvement in net interest income was partly offset by a decline in the net interest margin of 4 basis points to 3.43% for the third quarter of 2015 as compared to the same period in 2014. The decline in the net interest margin was mostly attributed to a 10 basis point decrease in the average rate earned on loans.
Net interest income on a fully tax equivalent basis increased $1.4 million, or 10.6%, to $15.1 million for the first nine months of 2015 as compared to $13.7 million for the same period in 2014. The increase in net interest income was largely due to a $60.0 million, or 11.5%, increase in average interest earning assets, principally loans receivable, which increased $58.1 million, or 13.8%. The improvement in net interest income was partly offset by a decline in the net interest margin of 3 basis points to 3.47% for the nine months ended September 30, 2015 as compared to the same period in 2014. The decline in the net interest margin was mostly attributed to a 14 basis point decrease in the average rate earned on loans.
Provision for Loan Losses.Provision for loan losses decreased $377 thousand, or 99.7%, to $1 thousand for the third quarter of 2015, as compared to $378 thousand for the same period in 2014.
Provision for loan losses decreased $725 thousand, or 58.9%, to $506 thousand for the first nine months of 2015, as compared to $1.2 million for the same period in 2014.
Non-interest Income.Non-interest income increased $154 thousand, or 10.3%, to $1.7 million for the third quarter of 2015, as compared to the same period last year. For the third quarter of 2015, insurance commissions and fees and other income increased $214 thousand and $73 thousand, respectively, as compared to the same period in 2014. The increases were partia1ly offset by declines in gain on securities transactions and service fees on deposit accounts of $153 thousand and $25 thousand, respectively, for the third quarter of 2015, as compared to the same period in 2014.
The Company reported an increase in non-interest income of $507 thousand, or 11.1%, to $5.1 million for the first nine months of 2015 as compared to the same period last year. The increase in non-interest income was largely due to increases in insurance commissions and fees and other income of $436 thousand and $127 thousand, respectively, which were partially offset by a decrease in service fees on deposit accounts of $128 thousand for the first nine months of 2015, as compared to the same period in 2014.
Non-interest Expense. The Company’s non-interest expenses increased $504 thousand, or 10.4%, to $5.4 million for the third quarter of 2015, as compared to the same period last year. The increase for the third quarter of 2015, as compared to the same period in 2014, was largely due to increases in salaries and employee benefits of $288 thousand, expenses and write-downs related to foreclosed real estate of $265 thousand, furniture and equipment expenses of $121 thousand and other expenses of $121 thousand, which were partially offset by decreases in data processing costs of $81 thousand, FDIC fees of $63 thousand and occupancy expenses of $49 thousand.
The Company’s non-interest expenses increased $1.3 million, or 9.2%, to $15.4 million for the first nine months of 2015 as compared to the same period last year. The increase for the first nine months of 2015, as compared to the same period in 2014, was largely due to increases in salaries and employee benefits of $998 thousand, furniture and equipment expenses of $269 thousand, other expenses of $230 thousand and expenses and write-downs related to foreclosed real estate of $203 thousand, which were partially offset by decreases in FDIC fees of $166 thousand, loan collection costs of $124 thousand and data processing of $110 thousand.
The increases for the third quarter and nine month periods for 2015 as compared to 2014 in salaries and employee benefits expense were due in part to an increase in personnel to support our growth initiative in new markets, including the opening of our Astoria branch in the first quarter of 2015, additional staffing for business development and a temporary increase in staffing costs related to the development of a digital banking division. The increases for the third quarter and nine month periods for 2015 as compared to 2014 in furniture and equipment expenses were mostly related to costs associated with our new core application system, which was implemented in the third quarter of 2014.
Financial Condition
At September 30, 2015, the Company’s total assets were $644.0 million, an increase of $48.1 million, or 8.1%, as compared to total assets of $595.9 million at December 31, 2014. The increase in total assets was largely driven by growth in loan receivable of $29.2 million, or 6.3% and the securities portfolio of $16.6 million, or 19.7%.
Total loans receivable, net of unearned income, increased $29.2 million, or 6.2%, to $501.2 million at September 30, 2015, as compared to $472.0 million at December 31, 2014. During the first nine months of 2015, the Company had $102.7 million in commercial loan production, which was largely offset by $27.4 million in commercial loan prepayments, an increase in commercial line of credit pay downs and the sale of $18.3 million in commercial loan participations to mitigate concentration risk. During the third quarter of 2015, total loans receivable, net of unearned income, increased $22.1 million, or 18.5% annualized, to $501.2 million at September 30, 2015, as compared to $479.1 million at June 30, 2015.
The Company’s total deposits increased $44.2 million, or 9.7%, to $502.5 million at September 30, 2015, from $458.3 million at December 31, 2014. The increase in deposits was due to increases in both non-interest bearing deposits of $28.8 million, or 40.9%, and interest bearing deposits of $15.4 million, or 4.0%, for September 30, 2015, as compared to December 31, 2014. Included in the aforementioned increase is $21.9 million in new deposits with a cost of under 0.50% attributed to our newest branch in Astoria, New York, which opened in mid-March of 2015. During the third quarter of 2015, total deposits increased $14.8 million, or 12.0% annualized, to $502.5 million at September 30, 2015, as compared to $487.7 million at June 30, 2015 and was largely attributed to growth in non-interest bearing deposits.
At September 30, 2015, the Company’s total stockholders’ equity was $53.1 million, an increase of $1.9 million when compared to December 31, 2014. The increase was largely due to net income for the nine months ended September 30, 2015. At September 30, 2015, the leverage, Tier I risk-based capital, total risk-based capital and common equity Tier I capital ratios for the Bank were 9.82%, 12.39%, 13.52% and 12.39%, respectively, all in excess of the ratios required to be deemed “well-capitalized.”
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 1.64% at September 30, 2015 from 2.02% at December 31, 2014. NPAs decreased $1.5 million, or 12.2%, to $10.6 million at September 30, 2015, as compared to $12.0 million at December 31, 2014. Non-accrual loans decreased $242 thousand, or 4.1%, to $5.7 million at September 30, 2015, as compared to $5.9 million at December 31, 2014. The top five non-accrual loan relationships total $3.4 million, which equates to 59.9% of total non-accrual loans and 32.1% of total NPAs at September 30, 2015. The remaining non-accrual loans at September 30, 2015 have an average loan balance of $91 thousand. Loans past due 30 to 89 days decreased $3.2 million, or 56.8%, to $2.4 million at September 30, 2015, as compared to $5.6 million at December 31, 2014.
The Company continues to actively market its foreclosed real estate properties, which decreased $1.1 million to $3.3 million at September 30, 2015, as compared to $4.4 million at December 31, 2014. The decrease was primarily due to the sale of $2.0 million in foreclosed real estate properties and write-downs of $314 thousand during 2015, which were partially offset by $1.2 million in new foreclosed real estate properties. At September 30, 2015, the Company’s foreclosed real estate properties had an average carrying value of approximately $278 thousand per property.
The allowance for loan losses remained flat at $5.6 million, or 1.13% of total loans, at September 30, 2015, compared to $5.6 million, or 1.20% of total loans, at December 31, 2014. The Company recorded $506 thousand in provision for loan losses, which was partially offset by $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 99.3% at September 30, 2015 from 95.2% at December 31, 2014.
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 and Wantage, New Jersey, and Port Jervis and Astoria, New York, and 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 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, 2014 and in subsequent filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release the results of any revisions to those forward looking statements that may be made to reflect events or circumstances after this date or to reflect the occurrence of unanticipated events.
| Contacts: | Anthony Labozzetta, President/CEO |
Steven Fusco, SEVP/CFO
844-256-7328
SUSSEX BANCORP
SUMMARY FINANCIAL HIGHLIGHTS
(In Thousands, Except Percentages and Per Share Data)
(Unaudited)
| | | | | | | | | | | | 9/30/2015 VS. | |
| | | 9/30/2015 | | | 12/31/2014 | | | 9/30/2014 | | | 9/30/2014 | | | 12/31/2014 | |
| BALANCE SHEET HIGHLIGHTS - Period End Balances | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total securities | | $ | 100,559 | | | $ | 83,982 | | | $ | 76,783 | | | | 31.0 | | | | % | | | | 19.7 | | | | % | |
| Total loans | | | 501,203 | | | | 471,973 | | | | 442,731 | | | | 13.2 | | | | % | | | | 6.2 | | | | % | |
| Allowance for loan losses | | | (5,641 | ) | | | (5,641 | ) | | | (5,709 | ) | | | (1.2 | ) | | | % | | | | - | | | | % | |
| Total assets | | | 644,019 | | | | 595,915 | | | | 568,033 | | | | 13.4 | | | | % | | | | 8.1 | | | | % | |
| Total deposits | | | 502,509 | | | | 458,270 | | | | 454,541 | | | | 10.6 | | | | % | | | | 9.7 | | | | % | |
| Total borrowings and junior subordinated debt | | | 84,187 | | | | 82,387 | | | | 58,887 | | | | 43.0 | | | | % | | | | 2.2 | | | | % | |
| Total shareholders' equity | | | 53,146 | | | | 51,229 | | | | 50,416 | | | | 5.4 | | | | % | | | | 3.7 | | | | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| FINANCIAL DATA - QUARTER ENDED: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income (tax equivalent) (a) | | $ | 5,166 | | | $ | 4,778 | | | $ | 4,658 | | | | 10.9 | | | | % | | | | 8.1 | | | | % | |
| Provision for loan losses | | | 1 | | | | 306 | | | | 378 | | | | (99.7 | ) | | | % | | | | (99.7 | ) | | | % | |
| Total other income | | | 1,655 | | | | 1,411 | | | | 1,501 | | | | 10.3 | | | | % | | | | 17.3 | | | | % | |
| Total other expenses | | | 5,363 | | | | 4,765 | | | | 4,859 | | | | 10.4 | | | | % | | | | 12.5 | | | | % | |
| Income before provision for income taxes (tax equivalent) | | | 1,457 | | | | 1,118 | | | | 922 | | | | 58.0 | | | | % | | | | 30.3 | | | | % | |
| Provision for income taxes | | | 390 | | | | 330 | | | | 214 | | | | 82.2 | | | | % | | | | 18.2 | | | | % | |
| Taxable equivalent adjustment (a) | | | 116 | | | | 65 | | | | 116 | | | | - | | | | % | | | | 78.5 | | | | % | |
| Net income | | $ | 951 | | | $ | 723 | | | $ | 592 | | | | 60.6 | | | | % | | | | 31.5 | | | | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net income per common share - Basic | | $ | 0.21 | | | $ | 0.16 | | | $ | 0.13 | | | | 61.5 | | | | % | | | | 31.3 | | | | % | |
| Net income per common share - Diluted | | $ | 0.21 | | | $ | 0.16 | | | $ | 0.13 | | | | 61.5 | | | | % | | | | 31.3 | | | | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.60 | % | | | 0.50 | % | | | 0.42 | % | | | | | | | 43.9 | % | | | | | | | 20.9 | % |
| Return on average equity | | | 7.22 | % | | | 5.65 | % | | | 4.70 | % | | | | | | | 53.7 | % | | | | | | | 27.9 | % |
| Net interest margin (tax equivalent) | | | 3.43 | % | | | 3.46 | % | | | 3.47 | % | | | | | | | (1.2 | )% | | | | | | | (0.9 | )% |
| Avg. interest earning assets/Avg. interest bearing liabilities | | | 1.24 | | | | 1.22 | | | | 1.21 | | | | 2.7 | | | | % | | | | 1.9 | | | | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| FINANCIAL DATA - YEAR TO DATE: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income (tax equivalent) (a) | | $ | 15,111 | | | | | | | $ | 13,667 | | | | 10.6 | | | | % | | | | | | | | | |
| Provision for loan losses | | | 506 | | | | | | | | 1,231 | | | | (58.9 | ) | | | % | | | | | | | | | |
| Total other income | | | 5,057 | | | | | | | | 4,550 | | | | 11.1 | | | | % | | | | | | | | | |
| Total other expenses | | | 15,355 | | | | | | | | 14,064 | | | | 9.2 | | | | % | | | | | | | | | |
| Income before provision for income taxes (tax equivalent) | | | 4,307 | | | | | | | | 2,922 | | | | 47.4 | | | | % | | | | | | | | | |
| Provision for income taxes | | | 1,190 | | | | | | | | 671 | | | | 77.3 | | | | % | | | | | | | | | |
| Taxable equivalent adjustment (a) | | | 330 | | | | | | | | 374 | | | | (11.8 | ) | | | % | | | | | | | | | |
| Net income | | $ | 2,787 | | | | | | | $ | 1,877 | | | | 48.5 | | | | % | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net income per common share - Basic | | $ | 0.61 | | | | | | | $ | 0.41 | | | | 48.8 | | | | % | | | | | | | | | |
| Net income per common share - Diluted | | $ | 0.61 | | | | | | | $ | 0.41 | | | | 48.8 | | | | % | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.60 | % | | | | | | | 0.45 | % | | | | | | | 33.7 | % | | | | | | | | |
| Return on average equity | | | 7.10 | % | | | | | | | 5.12 | % | | | | | | | 38.7 | % | | | | | | | | |
| Efficiency ratio (b) | | | 77.40 | % | | | | | | | 78.82 | % | | | | | | | (1.8 | )% | | | | | | | | |
| Net interest margin (tax equivalent) | | | 3.47 | % | | | | | | | 3.50 | % | | | | | | | (0.9 | )% | | | | | | | | |
| Avg. interest earning assets/Avg. interest bearing liabilities | | | 1.22 | | | | | | | | 1.19 | | | | 2.7 | | | | % | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| SHARE INFORMATION: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Book value per common share | | $ | 11.44 | | | $ | 10.99 | | | $ | 10.81 | | | | 5.9 | | | | % | | | | 4.1 | | | | % | |
| Outstanding shares- period ending | | | 4,645,387 | | | | 4,662,606 | | | | 4,664,856 | | | | (0.4 | ) | | | % | | | | (0.4 | ) | | | % | |
| Average diluted shares outstanding (year to date) | | | 4,591,700 | | | | 4,580,350 | | | | 4,574,663 | | | | 0.4 | | | | % | | | | 0.2 | | | | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| CAPITAL RATIOS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total equity to total assets | | | 8.25 | % | | | 8.60 | % | | | 8.88 | % | | | | | | | (7.0 | )% | | | | | | | (4.0 | )% |
| Leverage ratio (c) | | | 9.82 | % | | | 10.19 | % | | | 10.31 | % | | | | | | | (4.8 | )% | | | | | | | (3.6 | )% |
| Tier 1 risk-based capital ratio (c) | | | 12.39 | % | | | 12.79 | % | | | 13.36 | % | | | | | | | (7.3 | )% | | | | | | | (3.1 | )% |
| Total risk-based capital ratio (c) | | | 13.52 | % | | | 14.02 | % | | | 14.61 | % | | | | | | | (7.5 | )% | | | | | | | (3.6 | )% |
| Common equity Tier 1 capital ratio (c) | | | 12.39 | % | | | - | % | | | - | % | | | | | | | - | % | | | | | | | - | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ASSET QUALITY: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-accrual loans | | $ | 5,682 | | | $ | 5,924 | | | $ | 8,056 | | | | (29.5 | ) | | | % | | | | (4.1 | ) | | | % | |
| Loans 90 days past due and still accruing | | | - | | | | 85 | | | | 33 | | | | - | | | | % | | | | (100.0 | ) | | | % | |
| Troubled debt restructured loans ("TDRs") (d) | | | 1,562 | | | | 1,590 | | | | 1,601 | | | | (2.4 | ) | | | % | | | | (1.8 | ) | | | % | |
| Foreclosed real estate | | | 3,335 | | | | 4,449 | | | | 2,854 | | | | 16.9 | | | | % | | | | (25.0 | ) | | | % | |
| Non-performing assets ("NPAs") | | $ | 10,579 | | | $ | 12,048 | | | $ | 12,544 | | | | (15.7 | ) | | | % | | | | (12.2 | ) | | | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Foreclosed real estate, criticized and classified assets | | $ | 20,167 | | | $ | 21,899 | | | $ | 21,229 | | | | (5.0 | ) | | | % | | | | (7.9 | ) | | | % | |
| Loans past due 30 to 89 days | | $ | 2,436 | | | $ | 5,635 | | | $ | 2,855 | | | | (14.7 | ) | | | % | | | | (56.8 | ) | | | % | |
| Charge-offs, net (quarterly) | | $ | 112 | | | $ | 374 | | | $ | 523 | | | | (78.6 | ) | | | % | | | | (70.1 | ) | | | % | |
| Charge-offs, net as a % of average loans (annualized) | | | 0.09 | % | | | 0.33 | % | | | 0.48 | % | | | | | | | (80.8 | )% | | | | | | | (71.9 | )% |
| Non-accrual loans to total loans | | | 1.13 | % | | | 1.26 | % | | | 1.82 | % | | | | | | | (37.7 | )% | | | | | | | (9.7 | )% |
| NPAs to total assets | | | 1.64 | % | | | 2.02 | % | | | 2.21 | % | | | | | | | (25.6 | )% | | | | | | | (18.8 | )% |
| NPAs excluding TDR loans (d) to total assets | | | 1.40 | % | | | 1.75 | % | | | 1.93 | % | | | | | | | (27.3 | )% | | | | | | | (20.2 | )% |
| Non-accrual loans to total assets | | | 0.88 | % | | | 0.99 | % | | | 1.42 | % | | | | | | | (37.8 | )% | | | | | | | (11.2 | )% |
| Allowance for loan losses as a % of non-accrual loans | | | 99.28 | % | | | 95.22 | % | | | 70.87 | % | | | | | | | 40.1 | % | | | | | | | 4.3 | % |
| Allowance for loan losses to total loans | | | 1.13 | % | | | 1.20 | % | | | 1.29 | % | | | | | | | (12.7 | )% | | | | | | | (5.8 | )% |
(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
(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, 2015 | | | December 31, 2014 | |
| | | (Unaudited) | | | | |
| Cash and due from banks | | $ | 3,104 | | | $ | 2,953 | |
| Interest-bearing deposits with other banks | | | 5,067 | | | | 2,906 | |
| Cash and cash equivalents | | | 8,171 | | | | 5,859 | |
| | | | | | | | | |
| Interest bearing time deposits with other banks | | | 100 | | | | 100 | |
| Securities available for sale, at fair value | | | 94,702 | | | | 77,976 | |
| Securities held to maturity | | | 5,857 | | | | 6,006 | |
| Federal Home Loan Bank Stock, at cost | | | 4,015 | | | | 3,908 | |
| | | | | | | | | |
| Loans receivable, net of unearned income | | | 501,203 | | | | 471,973 | |
| Less: allowance for loan losses | | | 5,641 | | | | 5,641 | |
| Net loans receivable | | | 495,562 | | | | 466,332 | |
| | | | | | | | | |
| Foreclosed real estate | | | 3,335 | | | | 4,449 | |
| Premises and equipment, net | | | 8,773 | | | | 8,650 | |
| Accrued interest receivable | | | 1,996 | | | | 1,796 | |
| Goodwill | | | 2,820 | | | | 2,820 | |
| Bank-owned life insurance | | | 12,446 | | | | 12,211 | |
| Other assets | | | 6,242 | | | | 5,808 | |
| | | | | | | | | |
| Total Assets | | $ | 644,019 | | | $ | 595,915 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
| | | | | | | | | |
| Liabilities: | | | | | | | | |
| Deposits: | | | | | | | | |
| Non-interest bearing | | $ | 99,316 | | | $ | 70,490 | |
| Interest bearing | | | 403,193 | | | | 387,780 | |
| Total Deposits | | | 502,509 | | | | 458,270 | |
| | | | | | | | | |
| Borrowings | | | 71,300 | | | | 69,500 | |
| Accrued interest payable and other liabilities | | | 4,177 | | | | 4,029 | |
| Junior subordinated debentures | | | 12,887 | | | | 12,887 | |
| | | | | | | | | |
| Total Liabilities | | | 590,873 | | | | 544,686 | |
| | | | | | | | | |
| Total Stockholders' Equity | | | 53,146 | | | | 51,229 | |
| | | | | | | | | |
| Total Liabilities and Stockholders' Equity | | $ | 644,019 | | | $ | 595,915 | |
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, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
| INTEREST INCOME | | | | | | | | | | | | | | | | |
| Loans receivable, including fees | | $ | 5,390 | | | $ | 4,940 | | | $ | 15,837 | | | $ | 14,363 | |
| Securities: | | | | | | | | | | | | | | | | |
| Taxable | | | 321 | | | | 208 | | | | 890 | | | | 639 | |
| Tax-exempt | | | 231 | | | | 231 | | | | 660 | | | | 740 | |
| Interest bearing deposits | | | 1 | | | | 4 | | | | 8 | | | | 11 | |
| Total Interest Income | | | 5,943 | | | | 5,383 | | | | 17,395 | | | | 15,753 | |
| | | | | | | | | | | | | | | | �� | |
| INTEREST EXPENSE | | | | | | | | | | | | | | | | |
| Deposits | | | 448 | | | | 424 | | | | 1,302 | | | | 1,229 | |
| Borrowings | | | 390 | | | | 363 | | | | 1,150 | | | | 1,072 | |
| Junior subordinated debentures | | | 55 | | | | 54 | | | | 162 | | | | 159 | |
| Total Interest Expense | | | 893 | | | | 841 | | | | 2,614 | | | | 2,460 | |
| | | | | | | | | | | | | | | | | |
| Net Interest Income | | | 5,050 | | | | 4,542 | | | | 14,781 | | | | 13,293 | |
| PROVISION FOR LOAN LOSSES | | | 1 | | | | 378 | | | | 506 | | | | 1,231 | |
| Net Interest Income after Provision for Loan Losses | | | 5,049 | | | | 4,164 | | | | 14,275 | | | | 12,062 | |
| | | | | | | | | | | | | | | | | |
| OTHER INCOME | | | | | | | | | | | | | | | | |
| Service fees on deposit accounts | | | 230 | | | | 255 | | | | 656 | | | | 784 | |
| ATM and debit card fees | | | 198 | | | | 182 | | | | 573 | | | | 534 | |
| Bank owned life insurance | | | 78 | | | | 78 | | | | 235 | | | | 243 | |
| Insurance commissions and fees | | | 955 | | | | 741 | | | | 2,846 | | | | 2,410 | |
| Investment brokerage fees | | | 40 | | | | 11 | | | | 103 | | | | 79 | |
| Gain on securities transactions | | | 11 | | | | 164 | | | | 267 | | | | 258 | |
| Gain on sale of fixed assets | | | - | | | | - | | | | 8 | | | | - | |
| Other | | | 143 | | | | 70 | | | | 369 | | | | 242 | |
| Total Other Income | | | 1,655 | | | | 1,501 | | | | 5,057 | | | | 4,550 | |
| | | | | | | | | | | | | | | | | |
| OTHER EXPENSES | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 2,919 | | | | 2,631 | | | | 8,488 | | | | 7,490 | |
| Occupancy, net | | | 410 | | | | 459 | | | | 1,330 | | | | 1,309 | |
| Furniture and equipment | | | 221 | | | | 100 | | | | 645 | | | | 376 | |
| Advertising and promotion | | | 65 | | | | 89 | | | | 225 | | | | 211 | |
| Professional fees | | | 161 | | | | 153 | | | | 480 | | | | 517 | |
| Director fees | | | 105 | | | | 137 | | | | 418 | | | | 379 | |
| FDIC assessment | | | 120 | | | | 183 | | | | 368 | | | | 534 | |
| Insurance | | | 69 | | | | 70 | | | | 189 | | | | 218 | |
| Stationary and supplies | | | 49 | | | | 64 | | | | 154 | | | | 171 | |
| Loan collection costs | | | 19 | | | | 53 | | | | 175 | | | | 299 | |
| Data processing | | | 468 | | | | 549 | | | | 1,251 | | | | 1,361 | |
| Expenses and write-downs related to foreclosed real estate | | | 277 | | | | 12 | | | | 476 | | | | 273 | |
| Other | | | 480 | | | | 359 | | | | 1,156 | | | | 926 | |
| Total Other Expenses | | | 5,363 | | | | 4,859 | | | | 15,355 | | | | 14,064 | |
| | | | | | | | | | | | | | | | | |
| Income before Income Taxes | | | 1,341 | | | | 806 | | | | 3,977 | | | | 2,548 | |
| INCOME TAX EXPENSE | | | 390 | | | | 214 | | | | 1,190 | | | | 671 | |
| Net Income | | $ | 951 | | | $ | 592 | | | $ | 2,787 | | | $ | 1,877 | |
| | | | | | | | | | | | | | | | | |
| OTHER COMPREHENSIVE INCOME (LOSS): | | | | | | | | | | | | | | | | |
| Unrealized (losses) gains on available for sale securities arising during the period | | $ | 1,024 | | | $ | 511 | | | $ | 174 | | | $ | 3,864 | |
| Reclassification adjustment for net gain on securities transactions included in net income | | | (11 | ) | | | (164 | ) | | | (267 | ) | | | (258 | ) |
| Income tax benefit (expense) related to items of other comprehensive income (loss) | | | (405 | ) | | | (138 | ) | | | 37 | | | | (1,442 | ) |
| Other comprehensive (loss) income, net of income taxes | | | 608 | | | | 209 | | | | (56 | ) | | | 2,164 | |
| Comprehensive income | | $ | 1,559 | | | $ | 801 | | | $ | 2,731 | | | $ | 4,041 | |
| | | | | | | | | | | | | | | | | |
| EARNINGS PER SHARE | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.21 | | | $ | 0.13 | | | $ | 0.61 | | | $ | 0.41 | |
| Diluted | | $ | 0.21 | | | $ | 0.13 | | | $ | 0.61 | | | $ | 0.41 | |
SUSSEX BANCORP
COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES
(Dollars In Thousands)
(Unaudited)
| | | Three Months Ended September 30, | |
| | | 2015 | | | 2014 | |
| | | Average | | | | | | Average | | | Average | | | | | | Average | |
| | | Balance | | | Interest | | | Rate (2) | | | Balance | | | Interest | | | Rate (2) | |
| Earning Assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Securities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Tax exempt (3) | | $ | 34,371 | | | $ | 347 | | | | 4.01 | % | | $ | 31,047 | | | $ | 347 | | | | 4.43 | % |
| Taxable | | | 69,546 | | | | 321 | | | | 1.83 | % | | | 55,260 | | | | 208 | | | | 1.49 | % |
| Total securities | | | 103,917 | | | | 668 | | | | 2.55 | % | | | 86,307 | | | | 555 | | | | 2.55 | % |
| Total loans receivable (1) (4) | | | 487,545 | | | | 5,390 | | | | 4.39 | % | | | 436,395 | | | | 4,940 | | | | 4.49 | % |
| Other interest-earning assets | | | 6,236 | | | | 1 | | | | 0.06 | % | | | 10,249 | | | | 4 | | | | 0.15 | % |
| Total earning assets | | | 597,698 | | | | 6,059 | | | | 4.02 | % | | | 532,951 | | | | 5,499 | | | | 4.09 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-interest earning assets | | | 37,918 | | | | | | | | | | | | 36,948 | | | | | | | | | |
| Allowance for loan losses | | | (5,677 | ) | | | | | | | | | | | (5,748 | ) | | | | | | | | |
| Total Assets | | $ | 629,939 | | | | | | | | | | | $ | 564,151 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Sources of Funds: | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest bearing deposits: | | | | | | | | | | | | | | | | | | | | | | | | |
| NOW | | $ | 129,487 | | | $ | 57 | | | | 0.17 | % | | $ | 120,200 | | | $ | 49 | | | | 0.16 | % |
| Money market | | | 18,504 | | | | 10 | | | | 0.21 | % | | | 9,371 | | | | 4 | | | | 0.17 | % |
| Savings | | | 138,020 | | | | 70 | | | | 0.20 | % | | | 144,274 | | | | 75 | | | | 0.21 | % |
| Time | | | 120,397 | | | | 311 | | | | 1.02 | % | | | 108,241 | | | | 296 | | | | 1.08 | % |
| Total interest bearing deposits | | | 406,408 | | | | 448 | | | | 0.44 | % | | | 382,086 | | | | 424 | | | | 0.44 | % |
| Borrowed funds | | | 62,586 | | | | 390 | | | | 2.47 | % | | | 46,378 | | | | 363 | | | | 3.11 | % |
| Junior subordinated debentures | | | 12,887 | | | | 55 | | | | 1.69 | % | | | 12,887 | | | | 54 | | | | 1.66 | % |
| Total interest bearing liabilities | | | 481,881 | | | | 893 | | | | 0.74 | % | | | 441,351 | | | | 841 | | | | 0.76 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand deposits | | | 91,454 | | | | | | | | | | | | 67,910 | | | | | | | | | |
| Other liabilities | | | 3,934 | | | | | | | | | | | | 4,512 | | | | | | | | | |
| Total non-interest bearing liabilities | | | 95,388 | | | | | | | | | | | | 72,422 | | | | | | | | | |
| Stockholders' equity | | | 52,670 | | | | | | | | | | | | 50,378 | | | | | | | | | |
| Total Liabilities and Stockholders' Equity | | $ | 629,939 | | | | | | | | | | | $ | 564,151 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Income and Margin (5) | | | | | | | 5,166 | | | | 3.43 | % | | | | | | | 4,658 | | | | 3.47 | % |
| Tax-equivalent basis adjustment | | | | | | | (116 | ) | | | | | | | | | | | (116 | ) | | | | |
| Net Interest Income | | | | | | $ | 5,050 | | | | | | | | | | | $ | 4,542 | | | | | |
(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, | |
| | | 2015 | | | 2014 | |
| | | Average | | | | | | Average | | | Average | | | | | | Average | |
| | | Balance | | | Interest | | | Rate (2) | | | Balance | | | Interest | | | Rate (2) | |
| Earning Assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Securities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Tax exempt (3) | | $ | 33,050 | | | $ | 990 | | | | 4.00 | % | | $ | 32,837 | | | $ | 1,114 | | | | 4.54 | % |
| Taxable | | | 63,765 | | | | 890 | | | | 1.87 | % | | | 61,796 | | | | 639 | | | | 1.38 | % |
| Total securities | | | 96,815 | | | | 1,880 | | | | 2.60 | % | | | 94,633 | | | | 1,753 | | | | 2.48 | % |
| Total loans receivable (1) (4) | | | 478,151 | | | | 15,837 | | | | 4.43 | % | | | 420,009 | | | | 14,363 | | | | 4.57 | % |
| Other interest-earning assets | | | 7,396 | | | | 8 | | | | 0.14 | % | | | 7,697 | | | | 11 | | | | 0.19 | % |
| Total earning assets | | | 582,362 | | | | 17,725 | | | | 4.07 | % | | | 522,339 | | | | 16,127 | | | | 4.13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-interest earning assets | | | 37,958 | | | | | | | | | | | | 36,749 | | | | | | | | | |
| Allowance for loan losses | | | (5,719 | ) | | | | | | | | | | | (5,684 | ) | | | | | | | | |
| Total Assets | | $ | 614,601 | | | | | | | | | | | $ | 553,404 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Sources of Funds: | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest bearing deposits: | | | | | | | | | | | | | | | | | | | | | | | | |
| NOW | | $ | 128,686 | | | $ | 162 | | | | 0.17 | % | | $ | 116,992 | | | $ | 131 | | | | 0.15 | % |
| Money market | | | 16,332 | | | | 23 | | | | 0.19 | % | | | 11,018 | | | | 12 | | | | 0.15 | % |
| Savings | | | 139,828 | | | | 212 | | | | 0.20 | % | | | 145,093 | | | | 224 | | | | 0.21 | % |
| Time | | | 117,025 | | | | 905 | | | | 1.03 | % | | | 105,136 | | | | 862 | | | | 1.10 | % |
| Total interest bearing deposits | | | 401,871 | | | | 1,302 | | | | 0.43 | % | | | 378,239 | | | | 1,229 | | | | 0.43 | % |
| Borrowed funds | | | 61,179 | | | | 1,150 | | | | 2.51 | % | | | 47,282 | | | | 1,072 | | | | 3.03 | % |
| Junior subordinated debentures | | | 12,887 | | | | 162 | | | | 1.68 | % | | | 12,887 | | | | 159 | | | | 1.65 | % |
| Total interest bearing liabilities | | | 475,937 | | | | 2,614 | | | | 0.73 | % | | | 438,408 | | | | 2,460 | | | | 0.75 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand deposits | | | 82,391 | | | | | | | | | | | | 62,934 | | | | | | | | | |
| Other liabilities | | | 3,926 | | | | | | | | | | | | 3,149 | | | | | | | | | |
| Total non-interest bearing liabilities | | | 86,317 | | | | | | | | | | | | 66,083 | | | | | | | | | |
| Stockholders' equity | | | 52,347 | | | | | | | | | | | | 48,913 | | | | | | | | | |
| Total Liabilities and Stockholders' Equity | | $ | 614,601 | | | | | | | | | | | $ | 553,404 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Income and Margin (5) | | | | | | | 15,111 | | | | 3.47 | % | | | | | | | 13,667 | | | | 3.50 | % |
| Tax-equivalent basis adjustment | | | | | | | (330 | ) | | | | | | | | | | | (374 | ) | | | | |
| Net Interest Income | | | | | | $ | 14,781 | | | | | | | | | | | $ | 13,293 | | | | | |
(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
