EXHIBIT 99.1
Sussex Bancorp Announces First Quarter Results for 2013
FRANKLIN, N.J., May 1, 2013 (GLOBE NEWSWIRE) -- Sussex Bancorp (the "Company") (Nasdaq:SBBX), the holding company for Sussex Bank (the "Bank") today announced reported net income of $98 thousand, or $0.03 per basic and diluted share, for the quarter ended March 31, 2013, as compared to a net loss of $195 thousand, or $(0.06) per basic and diluted share, for the same period last year. The Company continued to improve its asset credit quality as total problem assets and non-performing assets ("NPAs") continued to decline. Overall problem assets are down 50.6% from their historical high at March 31, 2010, and the ratio of NPAs to total assets improved to 4.4% at March 31, 2013, from 4.6% at December 31, 2012. Non-accrual loans to total assets fell to 2.99% at March 31, 2013, which is the lowest level since 2007.
"We continue to make progress towards reducing our legacy problem assets. As of the end of this quarter, non-performing loans decreased $11.6 million, or 42.9%, and foreclosed real estate increased $1.6 million, or 32.4%, as compared to the same quarter end last year. Of note is that a considerable number of the legacy problem loans are nearing the end of the resolution cycle, which will culminate with the ultimate disposal of the foreclosed property," said Anthony Labozzetta, President and Chief Executive Officer of Sussex Bank. "Despite the challenging economic environment, we continue to build our business, this quarter we closed and funded $18 million in new commercial loans, up 320% over the same period last year," added Mr. Labozzetta.
Financial Performance
For the quarter ended March 31, 2013, the Company reported net income of $98 thousand, or $0.03 per basic and diluted share, as compared to a net loss of $195 thousand, or ($0.06) per basic and diluted share, for the same period last year. The improvement for the quarter ended March 31, 2013 in net income was largely due to an increase in gains on securities transactions and higher pre-tax earnings produced by our insurance subsidiary, Tri-State Insurance Agency, Inc., which increased $161 thousand to $200 thousand for the first quarter of 2013 as compared to the same period last year. Total credit quality costs (provision for loan losses, loan collection costs and expenses and write-downs related to foreclosed real estate) was approximately the same at $1.7 million for the first quarter of 2013 as compared to the same period in 2012.
Net Interest Income. Net interest income on a fully tax equivalent basis declined $138 thousand, or 3.4%, to $4.0 million for the first quarter of 2013 as compared to $4.1 million for same period in 2012. The decrease in net interest income was largely due to the Company's net interest margin declining 21 basis points to 3.30% for the first quarter of 2013 compared to the same period last year. The decline in the net interest margin was mostly due to a 39 basis point decline in the average rate earned on interest earning assets. This decline in net interest income was partially offset by a decrease in the average rate paid on total interest bearing liabilities, which decreased 19 basis points to 0.81% for the first quarter of 2013 from 1.00% for the same period in 2012, and a $17.5 million, or 3.7%, increase in average interest earning assets, principally securities.
Provision for Loan Losses. Provision for loan losses increased $282 thousand to $1.1 million for the first quarter of 2013, as compared to $860 thousand for the same period in 2012.
Non-interest Income. The Company reported an increase in non-interest income of $590 thousand, or 44.6%, to $1.9 million for the first quarter of 2013 as compared to the same period last year. The increase in non-interest income was largely due to increases in gains on securities transactions and an increase in insurance commissions and fees of $311 thousand and $243 thousand, respectively. Proceeds from the sale of securities were primarily used to fund loan growth.
Non-interest Expense. The Company's non-interest expenses decreased $303 thousand, or 6.2%, to $4.6 million for the first quarter of 2013 as compared to the same period last year. The decrease for the first quarter of 2013 versus the same period in 2012 was largely due to declines in expenses related to foreclosed real estate and salaries and employee benefits expense, which decreased $268 thousand and $189 thousand, respectively. The aforementioned declines were partly offset by increases in directors' fees and other expenses of $100 thousand and $62 thousand, respectively. The increase in directors' fees is principally due to the impact on the directors' deferred stock plan resulting from fluctuations in the Company's stock price, which increased $2.11 per share, or 39.2%, at March 31, 2013, as compared to December 31, 2012.
Financial Condition
At March 31, 2013, the Company's total assets were $518.8 million, an increase of $4.1 million, or 0.8%, as compared to total assets of $514.7 million at December 31, 2012. The increase in total assets was largely driven by securities growth of $4.6 million, or 3.7%, and net loans receivable growth of $1.6 million or 0.5%, which was partially offset by a decline in cash and cash equivalents of $4.6 million, or 39.3%.
Total loans receivable, net of unearned income, increased $1.9 million, or 0.6%, to $349.7 million at March 31, 2013, from $347.7 million at year-end 2012. The loan volume for the first quarter of 2013 was partly offset by pay-offs of loans repurchased from a participating bank ($3.0 million), loans transferred to foreclosed real estate ($2.7 million) and loan charge-offs, net ($813 thousand).
The Company's securities portfolio, which includes securities available for sale and securities held to maturity, increased $4.6 million to $128.7 million at March 31, 2013, as compared to $124.1 million at December 31, 2012.
The Company's total deposits increased $1.4 million, or 0.3%, to $433.8 million at March 31, 2013, from $432.4 million at December 31, 2012. The increase in deposits was due to an increase in non-interest bearing deposits of $5.4 million, or 11.3%, which was partially offset by a decrease in interest bearing checking and time deposits of $2.5 million and $2.4 million, respectively, for March 31, 2013 as compared to December 31, 2012. The Company's funding mix continues to improve as low cost deposits grow.
At March 31, 2013, the Company's total stockholders' equity was $39.9 million, a decrease of $457 thousand when compared to December 31, 2012. At March 31, 2013, the leverage, Tier I risk-based capital and total risk-based capital ratios for the Bank were 9.09%, 12.75% and 14.01%, respectively, all in excess of the ratios required to be deemed "well-capitalized."
Asset and Credit Quality
The overall credit quality of the Company continued to show positive trends through March 31, 2013, as our total problem assets, which is comprised of foreclosed real estate, criticized assets and classified assets, declined $3.9 million, or 11.2%, to $31.0 million at March 31, 2013 from $35.0 million at December 31, 2012. Our total problem assets declined 50.6% from a historical high of $62.8 million at March 31, 2010, as compared to March 31, 2013.
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, decreased $904 thousand, or 3.8%, to $22.9 million at March 31, 2013, as compared to $23.8 million at December 31, 2012. The ratios of NPAs to total assets for March 31, 2013 and December 31, 2012 were 4.4% and 4.6%, respectively. Non-accrual loans decreased $2.3 million, or 13.1%, to $15.5 million at March 31, 2013, as compared to $17.9 million at December 31, 2012 and declined 42.9% since March 31, 2012. Non-accrual loans to total assets fell to 2.99% at March 31, 2013, which is the lowest level since 2007.
The Company continues to actively market its foreclosed real estate properties, which increased $1.6 million to $6.6 million at March 31, 2013, as compared to $5.1 million at December 31, 2012. At March 31, 2013, the Company's foreclosed real estate properties had an average book value of approximately $331 thousand per property. During the first quarter of 2013, the Company sold $965 thousand and took title of $2.7 million of new foreclosed real estate. In addition, approximately $830 thousand is under contract and is scheduled to close in the second quarter of 2013.
The allowance for loan losses was $5.3 million, or 1.5% of total loans, at March 31, 2013, compared to $5.0 million, or 1.4% of total loans, at December 31, 2012. The increase in the allowance for loan losses was largely attributed to $1.1 million in provision for loan losses, which was in part offset by $813 thousand in net charge-offs for the first quarter of 2013. Total credit quality costs (provision for loan losses, loan collection costs and expenses and write-downs related to foreclosed real estate) was approximately the same at $1.7 million for the first quarter of 2013 as compared to the same period in 2012.
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 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 (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, 2012, 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) | |||||
| 3/31/2013 VS. | |||||
| 3/31/2013 | 12/31/2012 | 3/31/2012 | 3/31/2012 | 12/31/2012 | |
| BALANCE SHEET HIGHLIGHTS - Period End Balances | |||||
| Total securities | $ 128,724 | $ 124,102 | $ 107,482 | 19.8% | 3.7% |
| Total loans | 349,684 | 347,736 | 335,434 | 4.2% | 0.6% |
| Allowance for loan losses | (5,306) | (4,976) | (7,617) | (30.3)% | 6.6% |
| Total assets | 518,812 | 514,734 | 513,184 | 1.1% | 0.8% |
| Total deposits | 433,843 | 432,436 | 432,074 | 0.4% | 0.3% |
| Total borrowings and junior subordinated debt | 41,887 | 38,887 | 38,887 | 7.7% | 7.7% |
| Total shareholders' equity | 39,915 | 40,372 | 39,903 | 0.0% | (1.1)% |
| FINANCIAL DATA - QUARTER ENDED: | |||||
| Net interest income (tax equivalent) (a) | $ 3,978 | $ 4,102 | $ 4,112 | (3.3)% | (3.0)% |
| Provision for loan losses | 1,142 | 1,408 | 860 | 32.8% | (18.9)% |
| Total other income | 1,914 | 2,335 | 1,324 | 44.6% | (18.0)% |
| Total other expenses | 4,607 | 5,201 | 4,910 | (6.2)% | (11.4)% |
| Income before provision for income taxes (tax equivalent) | 143 | (172) | (334) | (142.9)% | (183.1)% |
| Provision for income taxes | (90) | (235) | (265) | (66.0)% | (61.7)% |
| Taxable equivalent adjustment (a) | 135 | 160 | 126 | 6.8% | (15.6)% |
| Net income (loss) | $ 98 | $ (97) | $ (195) | (150.2)% | (201.0)% |
| Net income (loss) per common share - Basic | $ 0.03 | $ (0.03) | $ (0.06) | (150.0)% | (200.0)% |
| Net income (loss) per common share - Diluted | $ 0.03 | $ (0.03) | $ (0.06) | (150.0)% | (200.0)% |
| Return on average assets | 0.07% | (0.08)% | (0.15)% | (148.4)% | (198.8)% |
| Return on average equity | 0.97% | (0.94)% | (1.95)% | (149.8)% | (203.2)% |
| Net interest margin (tax equivalent) | 3.30% | 3.41% | 3.51% | (5.9)% | (3.3)% |
| SHARE INFORMATION: | |||||
| Book value per common share | $ 11.66 | $ 11.88 | $ 11.76 | (0.9)% | (1.9)% |
| Outstanding shares- period ending | 3,424,213 | 3,397,873 | 3,393,106 | 0.9% | 0.8% |
| Average diluted shares outstanding (year to date) | 3,316,082 | 3,287,017 | 3,255,857 | 1.8% | 0.9% |
| CAPITAL RATIOS: | |||||
| Total equity to total assets | 7.69% | 7.84% | 7.78% | (1.1)% | (1.9)% |
| Leverage ratio (b) | 9.09% | 9.27% | 9.19% | (1.1)% | (1.9)% |
| Tier 1 risk-based capital ratio (b) | 12.75% | 12.93% | 13.18% | (3.3)% | (1.4)% |
| Total risk-based capital ratio (b) | 14.01% | 14.18% | 14.45% | (3.0)% | (1.2)% |
| ASSET QUALITY AND RATIOS: | |||||
| Non-accrual loans | $ 15,535 | $ 17,871 | $ 27,184 | (42.9)% | (13.1)% |
| Loans 90 days past due and still accruing | 76 | 209 | 983 | (92.3)% | (63.6)% |
| Troubled debt restructured loans ("TDRs") (c) | 617 | 608 | 2,084 | (70.4)% | 1.5% |
| Foreclosed real estate | 6,622 | 5,066 | 5,001 | 32.4% | 30.7% |
| Non-performing assets ("NPAs") | $ 22,850 | $ 23,754 | $ 34,269 | (33.3)% | (3.8)% |
| Foreclosed real estate, Criticized and Classified Assets | $ 31,029 | $ 34,946 | $ 50,299 | (38.3)% | (11.2)% |
| Loans past due 30 to 89 days | 2,449 | 2,754 | 8,771 | (72.1)% | (11.1)% |
| Charge-offs, net (quarterly) | 813 | 3,146 | 453 | 79.5% | (74.2)% |
| Charge-offs, net as a % of average loans (annualized) | 0.93% | 3.70% | 0.54% | 72.3% | (74.8)% |
| Non-accrual loans to total loans | 4.44% | 5.14% | 8.10% | (45.2)% | (13.6)% |
| NPAs to total assets | 4.40% | 4.61% | 6.68% | (34.0)% | (4.6)% |
| NPAs excluding TDR loans (c) to total assets | 4.29% | 4.50% | 6.27% | (31.7)% | (4.7)% |
| Non-accrual loans to total assets | 2.99% | 3.47% | 5.30% | (43.5)% | (13.8)% |
| Allowance for loan losses as a % of non-performing loans | 32.85% | 26.93% | 26.03% | 26.2% | 22.0% |
| Allowance for loan losses to total loans | 1.52% | 1.43% | 2.27% | (33.2)% | 6.0% |
| (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) Sussex Bank capital ratios | |||||
| (c) Troubled debt restructured loans currently performing in accordance with renegotiated terms | |||||
| SUSSEX BANCORP | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (Dollars In Thousands) | ||
| ASSETS | March 31, 2013 | December 31, 2012 |
| (Unaudited) | ||
| Cash and due from banks | $ 4,878 | $ 6,268 |
| Interest-bearing deposits with other banks | 2,202 | 5,400 |
| Cash and cash equivalents | 7,080 | 11,668 |
| Interest bearing time deposits with other banks | 100 | 100 |
| Securities available for sale, at fair value | 123,251 | 118,881 |
| Securities held to maturity | 5,473 | 5,221 |
| Federal Home Loan Bank Stock, at cost | 2,115 | 1,980 |
| Loans receivable, net of unearned income | 349,684 | 347,736 |
| Less: allowance for loan losses | 5,306 | 4,976 |
| Net loans receivable | 344,378 | 342,760 |
| Foreclosed real estate | 6,622 | 5,066 |
| Premises and equipment, net | 6,336 | 6,476 |
| Accrued interest receivable | 1,781 | 1,741 |
| Goodwill | 2,820 | 2,820 |
| Bank owned life insurance | 11,628 | 11,536 |
| Other assets | 7,228 | 6,485 |
| Total Assets | $ 518,812 | $ 514,734 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Liabilities: | ||
| Deposits: | ||
| Non-interest bearing | $ 53,825 | $ 48,375 |
| Interest bearing | 380,018 | 384,061 |
| Total Deposits | 433,843 | 432,436 |
| Borrowings | 29,000 | 26,000 |
| Accrued interest payable and other liabilities | 3,167 | 3,039 |
| Junior subordinated debentures | 12,887 | 12,887 |
| Total Liabilities | 478,897 | 474,362 |
| Total Stockholders' Equity | 39,915 | 40,372 |
| Total Liabilities and Stockholders' Equity | $ 518,812 | $ 514,734 |
| SUSSEX BANCORP | ||
| CONSOLIDATED STATEMENTS OF INCOME | ||
| (Dollars In Thousands Except Per Share Data) | ||
| (Unaudited) | ||
| Three Months Ended March 31, | ||
| 2013 | 2012 | |
| INTEREST INCOME | ||
| Loans receivable, including fees | $ 4,276 | $ 4,450 |
| Securities: | ||
| Taxable | 154 | 320 |
| Tax-exempt | 262 | 245 |
| Interest bearing deposits | 5 | 17 |
| Total Interest Income | 4,697 | 5,032 |
| INTEREST EXPENSE | ||
| Deposits | 538 | 719 |
| Borrowings | 262 | 265 |
| Junior subordinated debentures | 54 | 62 |
| Total Interest Expense | 854 | 1,046 |
| Net Interest Income | 3,843 | 3,986 |
| PROVISION FOR LOAN LOSSES | 1,142 | 860 |
| Net Interest Income after Provision for Loan Losses | 2,701 | 3,126 |
| OTHER INCOME | ||
| Service fees on deposit accounts | 286 | 275 |
| ATM and debit card fees | 160 | 137 |
| Bank owned life insurance | 92 | 103 |
| Insurance commissions and fees | 842 | 599 |
| Investment brokerage fees | 45 | 36 |
| Gain on sale of loans, held for sale | -- | 47 |
| Gain on securities transactions | 370 | 59 |
| Gain on sale of fixed assets | -- | 1 |
| Gain on sale of foreclosed real estate | 29 | 2 |
| Other | 90 | 65 |
| Total Other Income | 1,914 | 1,324 |
| OTHER EXPENSES | ||
| Salaries and employee benefits | 2,235 | 2,424 |
| Occupancy, net | 394 | 362 |
| Furniture, equipment and data processing | 326 | 354 |
| Advertising and promotion | 40 | 71 |
| Professional fees | 185 | 158 |
| Director fees | 206 | 106 |
| FDIC assessment | 169 | 167 |
| Insurance | 76 | 53 |
| Stationary and supplies | 49 | 45 |
| Loan collection costs | 98 | 134 |
| Expenses and write-downs related to foreclosed real estate | 440 | 708 |
| Amortization of intangible assets | 1 | 2 |
| Other | 388 | 326 |
| Total Other Expenses | 4,607 | 4,910 |
| Income before Income Taxes | 8 | (460) |
| INCOME TAX BENEFIT | (90) | (265) |
| Net Income | $ 98 | $ (195) |
| OTHER COMPREHENSIVE INCOME: | ||
| Unrealized gains on available for sale securities arising during the period | $ (644) | $ 417 |
| Reclassification adjustment for gain on sales included in net income | (370) | (59) |
| Income tax expense related to other comprehensive income | 405 | (143) |
| Other comprehensive (loss) income, net of income taxes | (609) | 215 |
| Comprehensive (loss) income | $ (511) | $ 20 |
| EARNINGS PER SHARE | ||
| Basic | $ 0.03 | $ (0.06) |
| Diluted | $ 0.03 | $ (0.06) |
| SUSSEX BANCORP | ||||||
| COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES | ||||||
| (Dollars In Thousands) | ||||||
| (Unaudited) | ||||||
| Three Months Ended March 31, | ||||||
| 2013 | 2012 | |||||
| Average | Average | Average | Average | |||
| Balance | Interest (1) | Rate (2) | Balance | Interest (1) | Rate (2) | |
| Earning Assets: | ||||||
| Securities: | ||||||
| Tax exempt (3) | $ 32,197 | $ 397 | 5.00% | $ 24,686 | $ 371 | 6.04% |
| Taxable | 99,391 | 154 | 0.63% | 77,506 | 320 | 1.66% |
| Total securities | 131,588 | 551 | 1.70% | 102,192 | 691 | 2.72% |
| Total loans receivable (4) | 349,479 | 4,276 | 4.96% | 335,558 | 4,450 | 5.33% |
| Other interest-earning assets | 7,976 | 5 | 0.25% | 33,837 | 17 | 0.20% |
| Total earning assets | 489,043 | $ 4,832 | 4.01% | 471,587 | $ 5,158 | 4.40% |
| Non-interest earning assets | 40,461 | 41,203 | ||||
| Allowance for loan losses | (5,302) | (7,543) | ||||
| Total Assets | $ 524,202 | $ 505,247 | ||||
| Sources of Funds: | ||||||
| Interest bearing deposits: | ||||||
| NOW | $ 112,318 | $ 36 | 0.13% | $ 92,293 | $ 51 | 0.22% |
| Money market | 14,904 | 9 | 0.24% | 17,560 | 20 | 0.46% |
| Savings | 157,907 | 110 | 0.28% | 163,130 | 206 | 0.51% |
| Time | 103,479 | 383 | 1.50% | 109,950 | 442 | 1.62% |
| Total interest bearing deposits | 388,608 | 538 | 0.56% | 382,933 | 719 | 0.76% |
| Borrowed funds | 26,600 | 262 | 3.99% | 26,000 | 265 | 4.10% |
| Junior subordinated debentures | 12,887 | 54 | 1.70% | 12,887 | 62 | 1.93% |
| Total interest bearing liabilities | 428,095 | $ 854 | 0.81% | 421,820 | $ 1,046 | 1.00% |
| Non-interest bearing liabilities: | ||||||
| Demand deposits | 49,859 | 41,314 | ||||
| Other liabilities | 5,808 | 2,013 | ||||
| Total non-interest bearing liabilities | 55,667 | 43,327 | ||||
| Stockholders' equity | 40,440 | 40,100 | ||||
| Total Liabilities and Stockholders' Equity | $ 524,202 | $ 505,247 | ||||
| Net Interest Income and Margin (5) | 3,978 | 3.30% | 4,112 | 3.51% | ||
| Tax-equivalent basis adjustment | (135) | (126) | ||||
| Net Interest Income | $ 3,843 | $ 3,986 | ||||
| (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 | ||||||
CONTACT: Anthony Labozzetta, President/CEO
Steven Fusco, SVP/CFO
973-827-2914