ROCKAWAY, N.J., Oct. 27, 2016 (GLOBE NEWSWIRE) -- Sussex Bancorp (the “Company”) (Nasdaq:SBBX), the holding company for Sussex Bank (the “Bank”), today announced a 38.5% increase in net income to $1.3 million, or $0.28 per basic and diluted common share, for the quarter ended September 30, 2016 as compared to $951 thousand, or $0.21 per basic and diluted share, for the same period last year. Also, the Company announced a 43.5% increase in net income to $4.0 million, or $0.87 per basic and $0.86 per diluted share, for the nine months ended September 30, 2016 as compared to $2.8 million or $0.61 per basic and diluted share for the same period last year.  The improvement for the third quarter of 2016 as compared to the same period last year was mostly driven by a 24.9% increase in net interest income on a fully tax equivalent basis as a result of strong growth in average loans and deposits, which increased $165.2 million, or 33.9%, and $115.9 million, or 23.3%, respectively.  The aforementioned increase in net interest income was partly offset by higher provision for loan losses due to loan growth and an increase in income tax expense.  

“I am pleased to report that we produced another quarter of strong financial performance for Sussex Bancorp.   These results continue to be driven by our dedicated employees that helped our principal business lines achieve outstanding growth.  This growth resulted in an impressive 24.9% increase in net interest income on a fully tax equivalent basis and helped improve our margin 3 basis points on a linked quarter basis,” said Anthony Labozzetta, President and Chief Executive Officer of Sussex Bank.  Mr. Labozzetta also stated, “We had exceptional growth in deposits, but even more noteworthy is the pace of growth in our noninterest bearing demand accounts, which grew 28% over last year and have a three year compounded annual growth rate 29%.”

Mr. Labozzetta also added, “It is wonderful that the efforts of our Team has led to Sussex Bank being recognized as one of the 50 Fastest Growing Companies in New Jersey by NJBIZ during the third quarter.”

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 23, 2016 to common shareholders of record as of the close of business on November 9, 2016.

Financial Performance
Net Income. For the quarter ended September 30, 2016, the Company reported net income of $1.3 million, or $0.28 per basic and diluted share, as compared to net income of $951 thousand, or $0.21 per basic and diluted share, for the same period last year.  The increase in net income for the quarter ended September 30, 2016 was driven by an $1.3 million, or 24.9%, increase in net interest income on a fully tax equivalent basis resulting from strong loan and deposit growth.  The aforementioned was partly offset by an increase in provision for loan losses of $457 thousand due to loan growth and an increase in income taxes due to earnings growth and a higher effective tax rate.  In addition, non-interest expenses increased 5.4% mostly due to costs attributed to support the Company’s growth.

Income before income taxes increased $672 thousand, or 51.1%, to $2.0 million for the quarter ended September 30, 2016 as compared to $1.3 million for the same period last year.  The Company’s income before income taxes, excluding Tri-State Insurance Agency’s (“Tri-State”), increased $682 thousand, or 58.4%, to $1.8 million for the three months ended September 30, 2016 as compared to $1.2 million for the same period last year.  Tri-State’s contribution to the Company’s income before income taxes for the quarter ended September 30, 2016 decreased $10 thousand, or 5.4%, to $164 thousand as compared to the same period last year. 

For the nine months ended September 30, 2016, the Company reported a 43.5% increase in net income to $4.0 million, or $0.87 per basic and $0.86 per diluted share as compared to net income of $2.8 million, or $0.61 per basic and diluted share, for the same period last year.  The increase in net income for the nine months ended September 30, 2016 was largely due to increases in net interest income on a fully tax equivalent basis of $3.0 million, or 19.8%, and non-interest income of $1.1 million, or 21.1%, which were partially offset by an increase in non-interest expenses of $1.5 million, or 9.8%, and a $548 thousand increase in provision for loan losses. The increase in non-interest expense was largely due to increases in salaries and employee benefits, mostly due to an increase in personnel to support our growth and higher incentive and commission costs related to the Bank’s and Tri-State’s performance, and data processing costs largely resulting from outsourcing of core processing systems.

Income before income taxes increased $2.0 million, or 51.4%, to $6.0 million for the nine months ended September 30, 2016 as compared to $4.0 million for the same period last year. Tri-State’s contribution to the Company’s income before income taxes for the nine months ended September 30, 2016 increased $502 thousand, or 83.4%, to $1.1 million as compared to $602 thousand for the same period last year.  The growth was driven by an increase in Tri-State’s commissions and fees that was largely due to an increase in commissions of $496 thousand, or 25.6%, and contingency fee income of $418 thousand, or 124.7%.  The aforementioned was partly offset by an increase in non-interest expense of $516 thousand, or 22.8%.  The Company’s income before income taxes, excluding Tri-State, increased $1.5 million, or 45.7%, to $4.9 million for the nine months ended September 30, 2016 as compared to the same period last year.

Net Interest Income.  Net interest income on a fully tax equivalent basis increased $1.3 million, or 24.9%, to $6.5 million for the third quarter of 2016, as compared to $5.2 million for the same period in 2015.  The increase in net interest income was largely due to a $167.9 million, or 28.1%, increase in average interest earning assets, principally loans receivable, which increased $165.2 million, or 33.9%.  The improvement in net interest income was partly offset by a decline in the net interest margin of 9 basis points to 3.34% for the third quarter of 2016, as compared to the same period in 2015.  The decline in the net interest margin was mostly attributed to a 15 basis point decrease in the average rate earned on loans, which is mostly due to loan growth and loan repricing in a low rate environment. Also included in the net interest margin decrease is a 6 basis point increase in the average rate on interest bearing deposits, which was primarily due to an increase in wholesale funding.

Net interest income on a fully tax equivalent basis increased $3.0 million, or 19.8%, to $18.1 million for the first nine months of 2016 as compared to $15.1 million for the same period in 2015.  The increase in net interest income was largely due to a $134.4 million, or 23.1%, increase in average interest earning assets, principally loans receivable and the securities portfolio, which increased $128.9 million, or 27.0% and $3.8 million, or 3.9%, respectively.  The Company’s net interest margin was 3.37% and 3.47% for the first nine months of 2016 and 2015, respectively. The decline in net interest margin is due to loan growth and loan repricing in a low rate environment along with an increase in the average rate on interest bearing deposits, primarily due to an increase in wholesale funding.

Provision for Loan Losses. Provision for loan losses increased $457 thousand to $458 thousand for the third quarter of 2016, as compared to the same period in 2015.

Provision for loan losses increased $548 thousand, or 108.3%, to $1.1 million thousand for the first nine months of 2016, as compared to $506 thousand for the same period in 2015.  The increases for both periods were mostly attributable to the Company’s loan growth.

Non-interest Income. Non-interest income increased $119 thousand, or 7.2%, to $1.8 million for the third quarter of 2016, as compared to the same period last year.  The increase was primarily due to higher insurance commissions and fees, which increased $135 thousand, or 14.1%, for the third quarter of 2016 as compared to the same period in 2015.   

The Company reported an increase in non-interest income of $1.1 million, or 21.1%, to $6.1 million for the first nine months of 2016 as compared to the same period last year.  The increase in non-interest income was largely due to increases in insurance commissions and fees of $1.0 million.  The growth in Tri-State’s commissions and fees was largely due to an increase in commissions of $496 thousand, or 25.6%, and contingency fee income of $418 thousand, or 124.7%.

Non-interest Expense. The Company’s non-interest expenses increased $288 thousand, or 5.4%, to $5.7 million for the third quarter of 2016, as compared to the same period last year. The increase for the third quarter of 2016, as compared to the same period in 2015, was largely due to an increase in salaries and employee benefits of $324 thousand.  The aforementioned increases were partly offset by declines in expenses and write-downs related to foreclosed real estate and other expenses of $179 thousand and $127 thousand, respectively. 

The Company’s non-interest expenses increased $1.5 million, or 9.8%, to $16.9 million for the first nine months of 2016 as compared to the same period last year.  The increase for the first nine months of 2016, as compared to the same period in 2015, was largely due to increases in salaries and employee benefits of $1.2 million, data processing of $375 thousand and furniture and equipment of $119 thousand.   The aforementioned increases were partly offset by declines in expenses and write-downs related to foreclosed real estate and other expenses of $159 thousand and $127 thousand, respectively.

The increase in salaries and employee benefits for the third quarter and first nine months of 2016 as compared to the same periods in 2015 was largely due to an increase in personnel to support our growth, including the opening of our Oradell, New Jersey branch in the first quarter of 2016, and higher incentive and commission costs related to the Bank’s and Tri-State’s performance.  The aforementioned increases were partly offset by the elimination of our in-house data operations center during the fourth quarter of 2015 and the closing of our Port Jervis, New York branch during the second quarter of 2016.  The increase in data processing was largely due to the costs associated with the outsourcing of core processing systems and higher costs related to the Company’s growth and introduction of new products and services during 2016.

Financial Condition
At September 30, 2016, the Company’s total assets were $809.0 million, an increase of $124.5 million, or 18.2%, as compared to total assets of $684.5 million at December 31, 2015.  The increase in total assets was largely driven by growth in loans receivable of $119.8 million, or 22.1%. 

Total loans receivable, net of unearned income, increased $119.8 million, or 22.1%, to $663.3 million at September 30, 2016, as compared to $543.4 million at December 31, 2015.  During the nine months ended September 30, 2016, the Company had $163.5 million in commercial loan production, which was partly offset by $8.6 million in commercial loan payoffs.

The Company’s total deposits increased $107.1 million, or 20.7%, to $624.9 million at September 30, 2016, from $517.9 million at December 31, 2015.  The growth in deposits was due to increases in both interest bearing deposits of $67.1 million, or 15.6%, and non-interest bearing deposits of $40.0 million, or 45.9%, at September 30, 2016, as compared to December 31, 2015. Additionally there was an increase in borrowings of $6.8 million, or 7.2%, to $102.5 million at September 30, 2016 from $95.7 million at December 31, 2015 due to substantial loan growth.  Included in the aforementioned deposit total is $46.9 million in deposit balances with a cost of 0.59% attributed to our newest branch in Oradell, New Jersey, which opened in the beginning of March, 2016.  Also, included is $69.0 million in deposit balances with a cost of 0.42% attributed to our branch in Astoria, New York, which opened in Mid-March of 2015. 

At September 30, 2016, the Company’s total stockholders’ equity was $58.6 million, an increase of $4.7 million when compared to December 31, 2015.  The increase was largely due to net income for the nine months ended September 30, 2016.  At September 30, 2016, the leverage, Tier I risk-based capital, total risk-based capital and common equity Tier I capital ratios for the Bank were 8.98%, 11.02%, 11.99% and 11.02%, respectively, all in excess of the ratios required to be deemed “well-capitalized.” During the quarter ended September 30, 2016 the Company entered into an unsecured revolving line of credit (“LOC”), in the amount of $5 million, with a floating rate of prime plus 50 basis points and a fee of 25 basis points. The LOC funds were contributed to the Bank’s capital in the third quarter of 2016.

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 1.13% at September 30, 2016 from 1.49% at December 31, 2015.  NPAs decreased $1.1 million, or 10.8%, to $9.1 million at September 30, 2016, as compared to $10.2 million at December 31, 2015.  Non-accrual loans decreased $729 thousand, or 13.7%, to $4.6 million at September 30, 2016, as compared to $5.3 million at December 31, 2015.  The top five non-accrual loan relationships total $3.0 million, which equates to 64.8% of total non-accrual loans and 32.6% of total NPAs at September 30, 2016.  The remaining non-accrual loans at September 30, 2016 have an average loan balance of $85 thousand.  Loans past due 30 to 89 days increased $4.8 million to approximately $7.6 million at September 30, 2016, as compared to $2.8 million at December 31, 2015.  Included in the $4.8 million increase was $3.5 million in matured loans, of which $2.6 million were renewed in the fourth quarter of 2016.

The Company continues to actively market its foreclosed real estate properties, which decreased $349 thousand to $3.0 million at September 30, 2016, as compared to $3.4 million at December 31, 2015.  At September 30, 2016, the Company’s foreclosed real estate properties had an average carrying value of approximately $300 thousand per property.

The allowance for loan losses increased by $741 thousand, or 13.3%, to $6.3 million, or 0.95% of total loans, at September 30, 2016, compared to $5.6 million, or 1.03% of total loans, at December 31, 2015. The Company recorded $1.1 million in provision for loan losses for the nine months ended September 30, 2016.  Additionally, the Company recorded net charge-offs of $313 thousand for the nine months ended September 30, 2016, as compared to $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 138.1% at September 30, 2016 from 105.2% at December 31, 2015.

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, Oradell and Wantage, New Jersey, and Astoria, New York, and a loan production office in Oradell, New Jersey, and for the Tri-State Insurance Agency, Inc., a full service insurance agency with locations in Augusta and Oradell, 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, 2015 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)
																	9/30/2016 VS.
		9/30/2016					12/31/2015					9/30/2015					9/30/2015						12/31/2015
BALANCE SHEET HIGHLIGHTS - Period End Balances
Total securities		$		98,258			$		100,610			$		100,559					(2.3	)	%				(2.3	)	%
Total loans				663,258					543,423					501,203					32.3		%				22.1		%
Allowance for loan losses				(6,331	)				(5,590	)				(5,641	)				12.2		%				13.3		%
Total assets				808,987					684,503					644,019					25.6		%				18.2		%
Total deposits				624,921					517,856					502,509					24.4		%				20.7		%
Total borrowings and junior subordinated debt				120,387					108,537					84,187					43.0		%				10.9		%
Total shareholders' equity				58,633					53,941					53,146					10.3		%				8.7		%
FINANCIAL DATA - QUARTER ENDED:
Net interest income (tax equivalent) (a)		$		6,453			$		5,414			$		5,166					24.9		%				19.2		%
Provision for loan losses				458					130					1					45,700.0		%				252.3		%
Total other income				1,774					1,396					1,655					7.2		%				27.1		%
Total other expenses				5,651					5,198					5,363					5.4		%				8.7		%
Income before provision for income taxes (tax equivalent)				2,118					1,482					1,457					45.4		%				42.9		%
Provision for income taxes				696					450					390					78.5		%				54.7		%
Taxable equivalent adjustment (a)				105					119					116					(9.5	)	%				(11.8	)	%
Net income		$		1,317			$		913			$		951					38.5		%				44.2		%
Net income per common share - Basic		$		0.28			$		0.20			$		0.21					33.3		%				40.0		%
Net income per common share - Diluted		$		0.28			$		0.20			$		0.21					33.3		%				40.0		%
Return on average assets				0.66		%			0.55		%			0.60		%			8.9		%				19.7		%
Return on average equity				9.06		%			6.79		%			7.22		%			25.4		%				33.5		%
Efficiency ratio (b)				69.58		%			77.69		%			79.99		%			(13.0	)	%				(10.4	)	%
Net interest margin (tax equivalent)				3.34		%			3.39		%			3.43		%			(2.6	)	%				(1.5	)	%
Avg. interest earning assets/Avg. interest bearing liabilities				1.25					1.24					1.24					1.0		%				1.0		%
FINANCIAL DATA - YEAR TO DATE:
Net interest income (tax equivalent) (a)		$		18,109								$		15,111					19.8		%
Provision for loan losses				1,054										506					108.3		%
Total other income				6,124										5,057					21.1		%
Total other expenses				16,859										15,355					9.8		%
Income before provision for income taxes (tax equivalent)				6,320										4,307					46.7		%
Provision for income taxes				2,022										1,190					69.9		%
Taxable equivalent adjustment (a)				298										330					(9.7	)	%
Net income		$		4,000								$		2,787					43.5		%
Net income per common share - Basic		$		0.87								$		0.61					42.6		%
Net income per common share - Diluted		$		0.86								$		0.61					41.0		%
Return on average assets				0.71		%								0.60		%			17.5		%
Return on average equity				9.41		%								7.10		%			32.6		%
Efficiency ratio (b)				70.44		%								77.40		%			(9.0	)	%
Net interest margin (tax equivalent)				3.37		%								3.47		%			(2.9	)	%
Avg. interest earning assets/Avg. interest bearing liabilities				1.24										1.22					1.7		%
SHARE INFORMATION:
Book value per common share		$		12.37			$		11.61			$		11.44					8.1		%				6.5		%
Tangible book value per common share				11.77					11.00					10.83					8.6		%				7.0		%
Outstanding shares- period ending				4,741,720					4,646,238					4,645,387					2.1		%				2.1		%
Average diluted shares outstanding (year to date)				4,633,473					4,591,822					4,591,700					0.9		%				0.9		%
CAPITAL RATIOS:
Total equity to total assets				7.25		%			7.88		%			8.25		%			(12.2	)	%				(8.0	)	%
Leverage ratio (c)				8.98		%			9.45		%			9.82		%			(8.6	)	%				(5.0	)	%
Tier 1 risk-based capital ratio (c)				11.02		%			11.74		%			12.39		%			(11.1	)	%				(6.1	)	%
Total risk-based capital ratio (c)				11.99		%			12.79		%			13.52		%			(11.3	)	%				(6.3	)	%
Common equity Tier 1 capital ratio (c)				11.02		%			11.74		%			12.39		%			(11.1	)	%				(6.1	)	%
ASSET QUALITY:
Non-accrual loans		$		4,583			$		5,312			$		5,682					(19.3	)	%				(13.7	)	%
Loans 90 days past due and still accruing				386					-					-					-		%				-		%
Troubled debt restructured loans ("TDRs") (d)				1,142					1,553					1,562					(26.9	)	%				(26.5	)	%
Foreclosed real estate				3,005					3,354					3,335					(9.9	)	%				(10.4	)	%
Non-performing assets ("NPAs")		$		9,116			$		10,219			$		10,579					(13.8	)	%				(10.8	)	%
Foreclosed real estate, criticized and classified assets		$		19,777			$		20,778			$		20,167					(1.9	)	%				(4.8	)	%
Loans past due 30 to 89 days		$		7,580			$		2,823			$		2,436					211.2		%				168.5		%
Charge-offs, net (quarterly)		$		115			$		181			$		112					2.7		%				(36.5	)	%
Charge-offs, net as a % of average loans (annualized)				0.07		%			0.14		%			0.09		%			(23.3	)	%				(49.3	)	%
Non-accrual loans to total loans				0.69		%			0.98		%			1.13		%			(39.0	)	%				(29.3	)	%
NPAs to total assets				1.13		%			1.49		%			1.64		%			(31.4	)	%				(24.5	)	%
NPAs excluding TDR loans (d) to total assets				0.99		%			1.27		%			1.40		%			(29.6	)	%				(22.1	)	%
Non-accrual loans to total assets				0.57		%			0.78		%			0.88		%			(35.8	)	%				(27.0	)	%
Allowance for loan losses as a % of non-accrual loans				138.14		%			105.23		%			99.28		%			39.1		%				31.3		%
Allowance for loan losses to total loans				0.95		%			1.03		%			1.13		%			(15.2	)	%				(7.2	)	%
(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)
ASSETS	September 30, 2016					December 31, 2015
Cash and due from banks	$	4,355				$	2,914
Interest-bearing deposits with other banks		8,055					3,206
Cash and cash equivalents		12,410					6,120
Interest bearing time deposits with other banks		100					100
Securities available for sale, at fair value		91,630					93,776
Securities held to maturity		6,628					6,834
Federal Home Loan Bank Stock, at cost		5,633					5,165
Loans receivable, net of unearned income		663,258					543,423
Less:  allowance for loan losses		6,331					5,590
Net loans receivable		656,927					537,833
Foreclosed real estate		3,005					3,354
Premises and equipment, net		8,945					8,879
Accrued interest receivable		1,797					1,764
Goodwill		2,820					2,820
Bank-owned life insurance		12,749					12,524
Other assets		6,343					5,334
Total Assets	$	808,987				$	684,503
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing	$	127,198				$	87,209
Interest bearing		497,723					430,647
Total Deposits		624,921					517,856
Borrowings		107,500					95,650
Accrued interest payable and other liabilities		5,046					4,169
Junior subordinated debentures		12,887					12,887
Total Liabilities		750,354					630,562
Total Stockholders' Equity		58,633					53,941
Total Liabilities and Stockholders' Equity	$	808,987				$	684,503

 

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,
		2016				2015				2016				2015
INTEREST INCOME
Loans receivable, including fees	$	6,971			$	5,390			$	19,575			$	15,837
Securities:
Taxable		396				321				1,116				890
Tax-exempt		201				231				592				660
Interest bearing deposits		7				1				17				8
Total Interest Income		7,575				5,943				21,300				17,395
INTEREST EXPENSE
Deposits		619				448				1,830				1,302
Borrowings		508				390				1,393				1,150
Junior subordinated debentures		100				55				266				162
Total Interest Expense		1,227				893				3,489				2,614
Net Interest Income		6,348				5,050				17,811				14,781
PROVISION FOR LOAN LOSSES		458				1				1,054				506
Net Interest Income after Provision for Loan Losses		5,890				5,049				16,757				14,275
OTHER INCOME
Service fees on deposit accounts		245				230				726				656
ATM and debit card fees		190				198				577				573
Bank owned life insurance		74				78				225				235
Insurance commissions and fees		1,090				955				3,850				2,846
Investment brokerage fees		(10	)			40				67				103
Gain on securities transactions		89				11				361				267
(Loss) on disposal of fixed assets		-				-				(19	)			8
Other		96				143				337				369
Total Other Income		1,774				1,655				6,124				5,057
OTHER EXPENSES
Salaries and employee benefits		3,243				2,919				9,672				8,488
Occupancy, net		463				410				1,399				1,330
Data processing		529				468				1,626				1,251
Furniture and equipment		248				221				764				645
Advertising and promotion		63				65				254				225
Professional fees		219				161				570				480
Director fees		159				105				378				418
FDIC assessment		138				120				379				368
Insurance		67				69				213				189
Stationary and supplies		47				49				149				154
Loan collection costs		24				19				109				175
Expenses and write-downs related to foreclosed real estate		98				277				317				476
Other		353				480				1,029				1,156
Total Other Expenses		5,651				5,363				16,859				15,355
Income before Income Taxes		2,013				1,341				6,022				3,977
INCOME TAX EXPENSE		696				390				2,022				1,190
Net Income	$	1,317			$	951			$	4,000			$	2,787
OTHER COMPREHENSIVE INCOME (LOSS):
Unrealized gains on available for sale securities arising during the period	$	(575	)		$	1,024			$	1,986			$	174
Fair value adjustments on derivatives		190				-				(1,359	)			-
Reclassification adjustment for net gain on securities transactions included in net income		(89	)			(11	)			(361	)			(267	)
Income tax related to items of other comprehensive income (loss)		190				(405	)			(106	)			37
Other comprehensive income, net of income taxes		(284	)			608				160				(56	)
Comprehensive income	$	1,033			$	1,559			$	4,160			$	2,731
EARNINGS PER SHARE
Basic	$	0.28			$	0.21			$	0.87			$	0.61
Diluted	$	0.28			$	0.21			$	0.86			$	0.61

 

SUSSEX BANCORP
COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES
(Dollars In Thousands)
(Unaudited)
		Three Months Ended September 30,
		2016												2015
		Average								Average				Average								Average
		Balance				Interest				Rate (2)				Balance				Interest				Rate (2)
Earning Assets:
Securities:
Tax exempt (3)		$	31,849			$	306				3.81	%		$	34,371			$	347				4.01	%
Taxable			71,496				396				2.20	%			69,546				321				1.83	%
Total securities			103,345				702				2.69	%			103,917				668				2.55	%
Total loans receivable (1) (4)			652,766				6,971				4.24	%			487,545				5,390				4.39	%
Other interest-earning assets			9,445				7				0.29	%			6,236				1				0.06	%
Total earning assets			765,556				7,680				3.98	%			597,698				6,059				4.02	%
Non-interest earning assets			41,759												37,918
Allowance for loan losses			(6,141	)											(5,677	)
Total Assets		$	801,174											$	629,939
Sources of Funds:
Interest bearing deposits:
NOW		$	144,840			$	78				0.21	%		$	129,487			$	57				0.17	%
Money market			37,881				39				0.41	%			18,504				10				0.21	%
Savings			137,455				72				0.21	%			138,020				70				0.20	%
Time			166,847				430				1.02	%			120,397				311				1.02	%
Total interest bearing deposits			487,023				619				0.50	%			406,408				448				0.44	%
Borrowed funds			111,493				508				1.81	%			62,586				390				2.47	%
Junior subordinated debentures			12,887				100				3.07	%			12,887				55				1.69	%
Total interest bearing liabilities			611,403				1,227				0.80	%			481,881				893				0.74	%
Non-interest bearing liabilities:
Demand deposits			126,783												91,454
Other liabilities			4,843												3,934
Total non-interest bearing liabilities			131,626												95,388
Stockholders' equity			58,145												52,670
Total Liabilities and Stockholders' Equity		$	801,174											$	629,939
Net Interest Income and Margin (5)							6,453				3.34	%							5,166				3.43	%
Tax-equivalent basis adjustment							(105	)											(116	)
Net Interest Income						$	6,348											$	5,050
(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,
		2016												2015
		Average								Average				Average								Average
		Balance				Interest				Rate (2)				Balance				Interest				Rate (2)
Earning Assets:
Securities:
Tax exempt (3)		$	30,402			$	890				3.91	%		$	33,050			$	990				4.00	%
Taxable			70,195				1,116				2.12	%			63,765				890				1.87	%
Total securities			100,597				2,006				2.66	%			96,815				1,880				2.60	%
Total loans receivable (1) (4)			607,044				19,575				4.31	%			478,151				15,837				4.43	%
Other interest-earning assets			9,154				17				0.25	%			7,396				8				0.14	%
Total earning assets			716,795				21,598				4.02	%			582,362				17,725				4.07	%
Non-interest earning assets			40,063												37,958
Allowance for loan losses			(5,894	)											(5,719	)
Total Assets		$	750,964											$	614,601
Sources of Funds:
Interest bearing deposits:
NOW		$	142,911			$	229				0.21	%		$	128,686			$	162				0.17	%
Money market			34,902				105				0.40	%			16,332				23				0.19	%
Savings			138,174				214				0.21	%			139,828				212				0.20	%
Time			157,235				1,282				1.09	%			117,025				905				1.03	%
Total interest bearing deposits			473,222				1,830				0.52	%			401,871				1,302				0.43	%
Borrowed funds			89,803				1,393				2.07	%			61,179				1,150				2.51	%
Junior subordinated debentures			12,887				266				2.75	%			12,887				162				1.68	%
Total interest bearing liabilities			575,912				3,489				0.81	%			475,937				2,614				0.73	%
Non-interest bearing liabilities:
Demand deposits			113,504												82,391
Other liabilities			4,890												3,926
Total non-interest bearing liabilities			118,394												86,317
Stockholders' equity			56,658												52,347
Total Liabilities and Stockholders' Equity		$	750,964											$	614,601
Net Interest Income and Margin (5)							18,109				3.37	%							15,111				3.47	%
Tax-equivalent basis adjustment							(298	)											(330	)
Net Interest Income						$	17,811											$	14,781
(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
Segment Reporting
(Dollars In Thousands)
(Unaudited)
	Three Months Ended September 30, 2016										Three Months Ended September 30, 2015
	Banking and										Banking and
	Financial			Insurance							Financial			Insurance
	Services			Services			Total				Services			Services			Total
Net interest income from external sources	$	6,348		$	-		$	6,348			$	5,050		$	-		$	5,050
Other income from external sources		707			1,067			1,774				694			961			1,655
Depreciation and amortization		282			8			290				245			4			249
Income before income taxes		1,848			165			2,013				1,168			173			1,341
Income tax expense (1)		630			66			696				321			69			390
Total assets		803,032			5,955			808,987				639,563			4,456			644,019
	Nine Months Ended September 30, 2016										Nine Months Ended September 30, 2015
	Banking and										Banking and
	Financial			Insurance							Financial			Insurance
	Services			Services			Total				Services			Services			Total
Net interest income from external sources	$	17,811		$	-		$	17,811			$	14,781		$	-		$	14,781
Other income from external sources		2,274			3,850			6,124				2,195			2,862			5,057
Depreciation and amortization		815			21			836				731			15			746
Income before income taxes		4,918			1,104			6,022				3,376			601			3,977
Income tax expense (1)		1,580			442			2,022				950			240			1,190
Total assets		803,032			5,955			808,987				639,563			4,456			644,019
(1) Calculated at statutory tax rate of 40%

Contacts: 
Anthony Labozzetta, President/CEO
Steven Fusco, SEVP/CFO
844-256-7328 

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