8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) January 19, 2006

SUSSEX BANCORP

(Exact name of registrant as specified in its charter)

New Jersey	0-29030	22-3475473
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

399 Route 23
Franklin, New Jersey	07416
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code (973) 827-2914

Item 2.02.Results of Operations and Financial Condition.

The information in this section, including the information contained in the press release included as Exhibit 99.1 hereto, is being furnished pursuant to this Item 2.02 and shall not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. In addition, this information shall not be deemed to be incorporated by reference into any of the Registrant’s filings with the Securities and Exchange Commission, except as shall be expressly set forth by specific reference in any such filing.

On January 19, 2006, the Registrant issued a press release announcing its financial results for the year ended December 31, 2005. A copy of the January 19, 2006 press release is included as Exhibit 99.1 hereto.

Item 9.01.Financial Statements and Exhibits.

(c) Exhibits.

Exhibit Number	Description
99.1	Press Release dated January 19, 2006 regarding financial results for the year ended December 31, 2005.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Sussex Bancorp, has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SUSSEX BANCORP
	(Registrant)
Dated: January 20, 2006	By:    /s/ Candace A. Leatham
	CANDACE A. LEATHAM
	Executive Vice President and Treasurer

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EXHIBIT INDEX

CURRENT REPORT ON FORM 8-K

Exhibit No.	Description	Page No.
99.1	Press release dated January 19, 2006 announcing the Registrant's results for the year ended December 31, 2005.	5

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EX-99.1

EXHIBIT 99.1

Sussex Bancorp	Candace Leatham
200 Munsonhurst Road, Rt. 517	Executive Vice President
Franklin, NJ 07416	& Treasurer
973-827-2914

 FOR IMMEDIATE RELEASE

SUSSEX BANCORP ANNOUNCES INCREASED 2005 EARNINGS

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FRANKLIN, NEW JERSEY - January 19, 2006- Sussex Bancorp (AMEX:“SBB”) today announced net income $2,399,000 for the year ended December 31, 2005, or $0.76 per basic share compared to net income of $1,591,000, or $0.81 per basic share, for the prior year.

2005 highlights include:

· Net income growth of 50.8%

· Interest income increased by $3,756,000

For the year ended December 31, 2005, the Company earned net income of $2,399,000 an increase of approximately 50.8 percent over net income of $1,591,000 for the same period last year. Basic and diluted earnings per share for the year ended December 31, 2005 were $0.76 and $0.75 respectively, compared to $0.81 and $0.78 respectively, in the year ago period. During 2005, the Company had 3,153,004 shares outstanding, compared to 2,994,874 shares outstanding in the prior year period, reflecting the Company’s successful capital offering near year-end 2004. The Company raised $15.1 million in additional capital and issued 1,131,150 shares of its common stock in December 2004.

The Company’s total interest income increased to $15,547,000 for the year ended December 31, 2005 from $11,791,000 for the same period last year, reflecting the increase in the loan portfolio yields and average balances. For the year ended December 31, 2005, the Company’s non-interest income increased by $331,000 or 7.3%, to $4.9 million from $4.5 million for the same period last year.

The Company’s interest expense increased to $4,328,000 for the year ended December 31, 2005 from $2,814,000 for the same period last year. The Company’s total non-interest expense increased by $814,000 reflecting increases associated with the Company’s growth. The loan loss provision for the year ended December 31, 2005 increased to $1,138,000 from $558,000, reflecting the 34.7% growth in the loan portfolio, over the same period last year. At December 31, 2005 the Company had total loans of $211.3 million, compared to total loans of $156.9 million at December 31, 2004.

At December 31, 2005 the Company had total assets of $313.2 million, compared to total assets of $278.3 million at December 31, 2004. In addition, the Company had total deposits of $256.8 million, compared to total deposits of $229.8 million at December 31, 2004.

Sussex Bancorp is the holding company for the Sussex Bank, which operates through its main office in Franklin, New Jersey and branch offices in Andover, Augusta, Newton, Montague, Sparta, Vernon and Wantage, New Jersey and for Tri-State Insurance Agency, Inc, Augusta, New Jersey. In addition, the Company recently announced its expansion into New York state, purchasing a branch location in Port Jervis, N.Y. The transaction is expected to close later in the first quarter.

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SUSSEX BANCORP

CONSOLIDATED BALANCE SHEETS

(Dollars In Thousands)

ASSETS	December 31, 2005			December 31, 2004
Cash and due from banks	$	11,395		$	10,434
Federal funds sold		13,385			18,860
Cash and cash equivalents		24,780			29,294
Interest bearing time deposits with other banks		500			3,900
Securities available for sale		61,180			74,736
Federal Home Loan Bank Stock, at cost		1,025			690
Loans receivable, net of unearned income		211,335			156,916
Less: allowance for loan losses		2,615			2,274
Net loans receivable		208,720			154,642
Premises and equipment, net		6,619			5,618
Accrued interest receivable		1,778			1,330
Goodwill		2,334			2,334
Other assets		6,246			5,731
Total Assets	$	313,182		$	278,275
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing	$	39,148		$	34,451
Interest bearing		217,699			195,376
Total Deposits		256,847			229,827
Federal funds purchased		-			-
Borrowings		16,300			10,000
Accrued interest payable and other liabilities		1,956			1,641
Junior subordinated debentures		5,155			5,155
Total Liabilities		280,258			246,623
Stockholders' Equity:
Common stock, no par value, authorized 5,000,000 shares;
issued and outstanding 3,153,004 in 2005 and 2,994,874 in 2004		27,300			25,397
Retained earnings		5,842			6,116
Accumulated other comprehensive income		(218	)		139
Total Stockholders' Equity		32,924			31,652
Total Liabilities and Stockholders' Equity	$	313,182		$	278,275

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SUSSEX BANCORP

CONSOLIDATED STATEMENTS OF INCOME

(Dollars In Thousands Except Per Share Data)

	Year Ended December 31,
		2005		2004
INTEREST INCOME
Loans receivable, including fees	$	12,331	$	8,954
Securities:
Taxable		1,650		1,812
Tax-exempt		1,145		869
Federal funds sold		359		97
Interest bearing deposits		62		59
Total Interest Income		15,547		11,791
INTEREST EXPENSE
Deposits		3,286		2,032
Borrowings		686		522
Junior subordinated debentures		356		260
Total Interest Expense		4,328		2,814
Net Interest Income		11,219		8,977
PROVISION FOR LOAN LOSSES		1,138		558
Net Interest Income after Provision for Loan Losses		10,081		8,419
OTHER INCOME
Service fees on deposit accounts		1,225		748
ATM fees		347		324
Insurance commissions and fees		2,327		2,195
Mortgage broker fees		212		620
Investment brokerage fees		291		292
Net realized gain on sale of fixed assets		8		-
Net realized gain on sale of securities		35		16
Net gain (loss) on sale of foreclosed real estate		6		(5	)
Other		422		352
Total Other Income		4,873		4,542
OTHER EXPENSES
Salaries and employee benefits		6,340		6,208
Occupancy, net		989		854
Furniture and equipment		1,078		902
Stationary and supplies		179		181
Professional fees		545		356
Advertising and promotion		507		411
Insurance		170		167
Postage and freight		171		175
Amortization of intangible assets		249		200
Other		1,375		1,335
Total Other Expenses		11,603		10,789
Income before Income Taxes		3,351		2,172
PROVISION FOR INCOME TAXES		952		581
Net Income	$	2,399	$	1,591

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SUSSEX BANCORP

COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES

(Dollars In Thousands)

	Years Ended December 31,
	2005							2004
		Average				Average			Average				Average
Earning Assets:		Balance			Interest (1)	Rate (2)			Balance			Interest (1)	Rate (2)
Securities:
Tax exempt (3)	$	26,716		$	1,614	6.04	%	$	22,176		$	1,241	5.60	%
Taxable		44,849			1,650	3.68	%		51,684			1,812	3.51	%
Total securities		71,565			3,264	4.56	%		73,860			3,053	4.13	%
Total loans receivable (4)		185,287			12,331	6.66	%		143,916			8,954	6.22	%
Other interest-earning assets		12,600			421	3.34	%		10,409			156	1.50	%
Total earning assets		269,452		$	16,016	5.94	%		228,185		$	12,163	5.33	%
Non-interest earning assets		24,146							25,311
Allowance for loan losses		(2,230	)						(1,958	)
Total Assets	$	291,368						$	251,538
Sources of Funds:
Interest bearing deposits:
NOW	$	43,939		$	299	0.68	%	$	42,412		$	196	0.46	%
Money market		22,083			534	2.42	%		16,878			184	1.09	%
Savings		62,025			456	0.74	%		66,322			439	0.66	%
Time		71,174			1,997	2.81	%		58,443			1,213	2.08	%
Total interest bearing deposits		199,221			3,286	1.65	%		184,055			2,032	1.10	%
Borrowed funds		14,771			686	4.64	%		10,630			522	4.91	%
Junior subordinated debentures		5,155			356	6.91	%		5,155			260	5.05	%
Total interest bearing liabilities		219,147		$	4,328	1.97	%		199,840		$	2,814	1.41	%
Non-interest bearing liabilities:
Demand deposits		38,067							33,627
Other liabilities		1,785							2,004
Total non-interest bearing liabilities		39,852							35,631
Stockholders' equity		32,368							16,067
Total Liabilities and Stockholders' Equity	$	291,368						$	251,538
Net Interest Income and Margin (5)				$	11,688	4.34	%				$	9,349	4.10	%
(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

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