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 18, 2007

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.)

200 Munsonhurst Road
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 18, 2007, the Registrant issued a press release announcing its financial results for the year ended December 31, 2006. A copy of the January 18, 2007 press release is included as Exhibit 99.1 hereto.

Item 8.01. Other Events.

On January 18, 2007, the Registrant issued a press release announcing that its Board of Directors declared a cash dividend of $0.07 per share, payable on February 22, 2007 to shareholders of record as of February 2, 2007. A copy of the January 18, 2007 press release is included as Exhibit 99.1 hereto.

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 8.01 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.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Press Release dated January 18, 2007 regarding financial results for the year ended December 31, 2006 and announcing the declaration of a $0.07 per share cash dividend to be paid to shareholders of  record as of February 2, 2007.

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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 19, 2007	By:     /s/ Candace A. Leatham
		CANDACE A. LEATHAM
		Executive Vice President and
		Chief Financial Officer

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EXHIBIT INDEX

CURRENT REPORT ON FORM 8-K

Exhibit No.	Description	Page No.
99.1	Press release announcing the Registrant's results for the year ending December 31, 2006 and the Registrant’s declaration of a $0.07 per share cash dividend to shareholders of record as of February 2, 2007.	5 - 8

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EX-99.1

EXHIBIT 99.1

Sussex Bancorp	Contact:	Candace Leatham
399 Route 23		Executive Vice President
Franklin, NJ 07416		/Treasurer
		(973) 827-2914

SUSSEX BANCORP ANNOUNCES 2006 RESULTS OF OPERATIONS

DECLARES $0.07 CASH DIVIDEND

FRANKLIN, NEW JERSEY - January 18, 2007- Sussex Bancorp (NASDAQ “SBBX”) today announced its results of operations for the year ended December 31, 2006. For the year, the Company had net income $2,464,000, or $0.78 per basic share compared to net income of $2,399,000, or $0.77 per basic share, for the prior year. During the year ended December 31, 2006, the Company achieved the following highlights:

· The Company acquired the Port Jervis, New York branch of NBT Bank, establishing its first branch outside of Sussex County, New Jersey. The Company opened on December 18, 2006 its second New York branch in Warwick, New York;

· The Company has applied for regulatory approval to establish a branch in Pike County, Pennsylvania. The branch is expected to open in the third quarter of 2007;

· The Company increased its loan to deposit ratio to 88.7% at December 31, 2006, compared to 82.2% at year end 2005 and 68.3% at year end 2004. The Company’s loan portfolio increased by 24.1% during 2006.

For the year ended December 31, 2006, the Company earned net income of $2,464,000 an increase of approximately 2.7% over net income of $2,399,000 for the same period last year. Basic and diluted earnings per share for the year ended December 31, 2006 were $0.78 and $0.77 respectively, compared to $0.76 and $0.75 respectively, in the year ago period. During 2006, the Company had 3,152,374 shares outstanding, compared to 3,153,004 shares outstanding in the prior year period.

The Company’s total interest income increased to $20.0 million for the year ended December 31, 2006 from $15.5 million for the same period last year, reflecting the increase in the loan portfolio yields and average balances. During 2006, the Company’s average yield on its loan portfolio increased to 7.09% from 6.66% during 2005, while the average balance of the loan portfolio increased to $239.8 million from $185.3 million in 2005. For the year ended December 31, 2006, the Company’s non-interest income increased by $371,000 or 7.6%, to $5.2 million from $4.9 million for the same period last year.

The Company’s interest expense increased to $8.2 million for the year ended December 31, 2006 from $4.3 million for the same period last year. The increase reflects both an increase in the average volume of interest bearing liabilities to $254.2 million for 2006 from $219.1 for 2005 and an increase in the cost of interest bearing liabilities to 3.24% from 1.97% in 2005. The Company’s total non-interest expense increased by $1.0 million reflecting increases associated with the Company’s growth. The loan loss provision for the year ended December 31, 2006 decreased to $733,000 from $1,138,000, reflecting reduced charge-offs in 2006 over 2005. At December 31, 2006 the Company had total loans of $262.3 million, compared to total loans of $211.3 million at December 31, 2005.

At December 31, 2006 the Company had total assets of $356.3 million, compared to total assets of $313.2 million at December 31, 2005. In addition, the Company had total deposits of $295.8 million, compared to total deposits of $256.8 million at December 31, 2005.

Sussex Bancorp also announced that its Board of Director’s declared a cash dividend of $0.07 per share, payable February 22, 2007 to shareholders of record as of February 2, 2007.

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, Wantage, New Jersey, Port Jervis and Warwick, New York and for Tri-State Insurance Agency, Inc, Augusta, New Jersey.

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SUSSEX BANCORP

CONSOLIDATED BALANCE SHEETS

(Dollars In Thousands)

ASSETS	December 31, 2006		December 31, 2005
Cash and due from banks	$	10,170	$	11,395
Federal funds sold		11,995		13,385
Cash and cash equivalents		22,165		24,780
Interest bearing time deposits with other banks		100		500
Securities available for sale		54,635		61,180
Federal Home Loan Bank Stock, at cost		1,188		1,025
Loans receivable, net of unearned income		262,276		211,335
Less: allowance for loan losses		3,340		2,615
Net loans receivable		258,936		208,720
Premises and equipment, net		7,794		6,619
Accrued interest receivable		1,910		1,778
Other assets		9,569		8,580
Total Assets	$	356,297	$	313,182
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing	$	40,083	$	42,142
Interest bearing		255,687		214,705
Total Deposits		295,770		256,847
Borrowings		18,251		16,300
Accrued interest payable and other liabilities		2,529		1,956
Junior subordinated debentures		5,155		5,155
Total Liabilities		321,705		280,258
Total Stockholders' Equity		34,592		32,924
Total Liabilities and Stockholders' Equity	$	356,297	$	313,182

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SUSSEX BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands Except Per Share Data)
	Year Ended December 31,
	2006		2005		2004
INTEREST INCOME
Loans receivable, including fees	$	17,009	$	12,331	$	8,954
Securities:
Taxable		1,455		1,650		1,812
Tax-exempt		1,032		1,145		869
Federal funds sold		490		359		97
Interest bearing deposits		12		62		59
Total Interest Income		19,998		15,547		11,791
INTEREST EXPENSE
Deposits		7,097		3,286		2,032
Borrowings		707		686		522
Junior subordinated debentures		445		356		260
Total Interest Expense		8,249		4,328		2,814
Net Interest Income		11,749		11,219		8,977
PROVISION FOR LOAN LOSSES		733		1,138		558
Net Interest Income after Provision for Loan Losses		11,016		10,081		8,419
OTHER INCOME
Service fees on deposit accounts		1,370		1,225		748
ATM fees		374		347		324
Insurance commissions and fees		2,576		2,327		2,195
Mortgage broker fees		4		212		620
Investment brokerage fees		265		291		292
Net realized gain on sale of securities		90		35		16
Net gain on sale of fixed assets		5		-		-
Net (loss) gain on sale of foreclosed real estate		-		6		(5	)
Other		560		430		352
Total Other Income		5,244		4,873		4,542
OTHER EXPENSES
Salaries and employee benefits		6,872		6,340		6,208
Occupancy, net		1,077		989		854
Furniture, equipment and data processing		1,210		1,078		902
Stationary and supplies		199		179		181
Professional fees		668		545		356
Advertising and promotion		518		507		411
Insurance		197		170		167
Postage and freight		208		171		175
Amortization of intangible assets		150		250		200
Other		1,549		1,374		1,335
Total Other Expenses		12,648		11,603		10,789
Income before Income Taxes		3,612		3,351		2,172
PROVISION FOR INCOME TAXES		1148		952		581
Net Income	$	2,464	$	2,399	$	1,591
EARNINGS PER SHARE
Basic	$	0.78	$	0.76	$	0.81
Diluted	$	0.77	$	0.75	$	0.78

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SUSSEX BANCORP
COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES
(Dollars In Thousands)
(Unaudited)
	Years Ended December 31.
(dollars in thousands)	2006								2005								2004
	Average			Interest		Average			Average			Interest		Average			Average			Interest		Average
Earning Assets:	Balance			(1)		Rate (2)			Balance			(1)		Rate (2)			Balance			(1)		Rate (2)
Securities:
Tax exempt (3)	$	24,018		$	1,383		5.76	%	$	26,716		$	1,614		6.04	%	$	22,176		$	1,241		5.60	%
Taxable		35,687			1,455		4.08	%		44,849			1,650		3.68	%		51,684			1,812		3.51	%
Total securities		59,705			2,838		4.75	%		71,565			3,264		4.56	%		73,860			3,053		4.13	%
Total loans receivable (4)		239,831			17,009		7.09	%		185,287			12,331		6.66	%		143,916			8,954		6.22	%
Other interest-earning assets		10,244			502		4.90	%		12,600			421		3.34	%		10,409			156		1.50	%
Total earning assets		309,780		$	20,349		6.57	%		269,452		$	16,016		5.94	%		228,185		$	12,163		5.33	%
Non-interest earning assets		26,126								24,146								25,311
Allowance for loan losses		(2,994	)							(2,230	)							(1,958	)
Total Assets	$	332,912							$	291,368							$	251,538
Sources of Funds:
Interest bearing deposits:
NOW	$	57,974		$	1,306		2.25	%	$	43,939		$	299		0.68	%	$	42,412		$	196		0.46	%
Money market		30,773			1,200		3.90	%		22,083			534		2.42	%		16,878			184		1.09	%
Savings		45,916			401		0.87	%		62,025			456		0.74	%		66,322			439		0.66	%
Time		100,061			4,190		4.19	%		71,174			1,997		2.81	%		58,443			1,213		2.08	%
Total interest bearing deposits		234,724			7,097		3.02	%		199,221			3,286		1.65	%		184,055			2,032		1.10	%
Borrowed funds		14,359			707		4.92	%		14,771			686		4.64	%		10,630			522		4.91	%
Junior subordinated debentures		5,155			445		8.63	%		5,155			356		6.91	%		5,155			260		5.05	%
Total interest bearing liabilities		254,238		$	8,249		3.24	%		219,147		$	4,328		1.97	%		199,840		$	2,814		1.41	%
Non-interest bearing liabilities:
Demand deposits		43,036								38,068								33,627
Other liabilities		1,928								1,785								2,004
Total non-interest bearing liabilities		44,964								39,853								35,631
Stockholders' equity		33,710								32,368								16,067
Total Liabilities and Stockholders' Equity	$	332,912							$	291,368							$	251,538
Net Interest Income and Margin (5)				$	12,100		3.91	%				$	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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