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) July 16, 2008

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 July 16, 2008, the Registrant issued a press release announcing its financial results for the second quarter and first six months ended June 30, 2008.  A copy of the July 16, 2008 press release is included as Exhibit 99.1 hereto.

Item 9.01.  Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Press Release dated July 16, 2008 regarding financial results for the second quarter and first six months ended June 30, 2008.

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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: July 18, 2008	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 dated July 16, 2008 announcing the Registrant's results for the second quarter and first six months ended June 30, 2008.	5 - 8

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EX-99.1

EXHIBIT 99.1

Sussex Bancorp	Donald L. Kovach
399 Route 23	President/CEO
Franklin, NJ  07416	973-827-2914
FOR IMMEDIATE RELEASE

SUSSEX BANCORP ANNOUNCES SECOND QUARTER AND FIRST SIX MONTHS 2008 EARNINGS

---

FRANKLIN, NEW JERSEY – July 16, 2008– Sussex Bancorp (NASDAQ: “SBBX”) today announced its financial results for the quarter and the six months ending June 30, 2008.

For the quarter ended June 30, 2008, the Company earned net income of $359,000 compared to net income of $294,000 reported for the second quarter of 2007. For the six months ended June 30, 2008, the Company earned net income of $996,000, a decline from the $1,018,000 earned for the same period last year.   Basic earnings per share for the three and six months ended June 30, 2008 were $0.12 and $0.32, respectively, compared to $0.09 and $0.32 for the respective comparable periods of 2007.  Diluted earnings per share were $0.12 and $0.32 respectively for the three and six months ended June 30, 2008, compared to $0.09 and $0.32 in the respective comparable periods of 2007.

The Company’s net interest income increased to $2,922,000 for the quarter ended June 30, 2008 from $2,894,000 for the second quarter of 2007.  The Company’s interest income decreased to $5,494,000 for the quarter ended June 30, 2008 from $5,613,000 for the second quarter of 2007.  The decline primarily reflects a decline in interest income on the Company’s loan portfolio related to the increase in non-accrual loans during the second half of 2007. However, this decrease was offset by a decline in the Company’s interest expense, to $2,572,000 for the three months ended June 30, 2008 from $2,719,000 for the second quarter of 2007.  For the six months ended June 30, 2008, the Company’s net interest income increased to $5,813,000 from the $5,743,000 earned for the same period last year.  For the six months ended June 30, 2008, the Company’s interest income increased to $11,090,000 from $11,005,000 for the period ended June 30, 2007, while the Company’s interest expense increased to $5,277,000 from $5,262,000 for the six months ended June 30, 2007. As a result of these changes, the Company’s net interest margin declined to 3.15% and 3.22% for the three and six months ended June 30, 2008, respectively, from 3.46% and 3.53% for the three and six months ended June 30, 2007, respectively.

The Company reported non-interest income of $1,228,000 and $2,907,000 for the current three and six month periods ended June 30, 2008, respectively, compared to non-interest income of $1,235,000 and $2,821,000 for the three and six month periods ending June 30, 2007.

The Company’s other expenses increased in the three and six month periods of 2008 compared to the prior year periods.  For the three month period ending June 30, 2008 other expenses increased by $231,000 thousand, or 6.9%, while other expenses increased by $464,000 thousand, or 7.1%, for the six months ended June 30, 2008 compared to the prior year periods.

At June 30, 2008 the Company had total assets of $432.5 million, compared to total assets of $387.3 million at June 30, 2007. The Company’s total deposits increased to $346.3 million at June 30, 2008 from $311.3 million at June 30, 2007, and the Company’s total loan portfolio, net of unearned income, increased to $305.4 million at June 30, 2008 from $284.6 million at June 30, 2007.

Sussex Bancorp is the holding company for 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, Port Jervis and Warwick, New York and for the Tri-State Insurance Agency, Inc., a full service insurance agency located in Sussex County, New Jersey.

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CONSOLIDATED BALANCE SHEETS

(Dollars In Thousands)

(Unaudited)

ASSETS	June 30, 2008		June 30, 2007		December 31, 2007
Cash and due from banks	$	11,409	$	9,240	$	7,985
Federal funds sold		30,735		16,795		3,790
Cash and cash equivalents		42,144		26,035		11,775
Interest bearing time deposits with other banks		100		100		100
Trading securities		14,104		12,282		14,259
Securities available for sale		48,539		45,703		48,397
Federal Home Loan Bank Stock, at cost		2,111		1,358		2,032
Loans receivable, net of unearned income		305,366		284,640		300,646
Less:  allowance for loan losses		4,831		3,860		5,140
Net loans receivable		300,535		280,780		295,506
Foreclosed real estate		3,437		-		-
Premises and equipment, net		8,868		8,606		9,112
Accrued interest receivable		1,862		1,804		2,035
Goodwill		2,820		2,820		2,820
Other assets		7,943		7,766		7,496
Total Assets	$	432,463	$	387,254	$	393,532
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing	$	43,750	$	37,818	$	36,625
Interest bearing		302,546		273,517		271,913
Total Deposits		346,296		311,335		308,538
Borrowings		36,173		20,226		35,200
Accrued interest payable and other liabilities		2,547		2,663		2,467
Junior subordinated debentures		12,887		18,042		12,887
Total Liabilities		397,903		352,266		359,092
Total Stockholders' Equity		34,560		34,988		34,440
Total Liabilities and Stockholders' Equity	$	432,463	$	387,254	$	393,532

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SUSSEX BANCORP

CONSOLIDATED STATEMENTS OF INCOME

(Dollars In Thousands)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008		2007
INTEREST INCOME
Loans receivable, including fees	$	4,637		$	4,881		$	9,448	$	9,534
Securities:
Taxable		543			404			1,067		800
Tax-exempt		226			257			462		507
Federal funds sold		88			69			112		161
Interest bearing deposits		-			2			1		3
Total Interest Income		5,494			5,613			11,090		11,005
INTEREST EXPENSE
Deposits		2,068			2,355			4,198		4,563
Borrowings		373			243			755		465
Junior subordinated debentures		131			121			324		234
Total Interest Expense		2,572			2,719			5,277		5,262
Net Interest Income		2,922			2,894			5,813		5,743
PROVISION FOR LOAN LOSSES		117			436			290		544
Net Interest Income after Provision for Loan Losses		2,805			2,458			5,523		5,199
OTHER INCOME
Service fees on deposit accounts		351			335			702		654
ATM and debit card fees		120			104			225		191
Insurance commissions and fees		653			664			1,396		1,518
Investment brokerage fees		48			56			95		213
Holding gains (losses) on trading securities		(196	)		(48	)		21		(2	)
Gain on sale of securities, available for sale		68			-			152		-
Other		184			124			316		247
Total Other Income		1,228			1,235			2,907		2,821
OTHER EXPENSES
Salaries and employee benefits		1,976			1,829			3,855		3,611
Occupancy, net		304			300			662		613
Furniture, equipment and data processing		374			356			747		694
Stationary and supplies		48			46			91		92
Professional fees		88			165			197		304
Advertising and promotion		161			137			287		241
Insurance		47			48			85		94
FDIC assessment		90			9			185		18
Postage and freight		46			48			84		88
Amortization of intangible assets		14			26			29		63
Other		419			372			818		758
Total Other Expenses		3,567			3,336			7,040		6,576
Income before Income Taxes		466			357			1,390		1,444
PROVISION FOR INCOME TAXES		107			63			394		426
Net Income	$	359		$	294		$	996	$	1,018

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SUSSEX BANCORP

COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES

(Dollars In Thousands)

(Unaudited)

	Six Months Ended June 30,
	2008								2007
	Average					Average			Average					Average
Earning Assets:	Balance			Interest (1)		Rate (2)			Balance			Interest (1)		Rate (2)
Securities:
Tax exempt  (3)	$	22,287		$	690		6.23	%	$	24,030		$	663		5.57	%
Taxable		41,339			1,067		5.19	%		34,135			800		4.73	%
Total securities		63,626			1,757		5.55	%		58,166			1,463		5.07	%
Total loans receivable (4)		303,192			9,448		6.27	%		272,678			9,534		7.05	%
Other interest-earning assets		10,153			113		2.24	%		6,397			164		5.16	%
Total earning assets		376,971		$	11,318		6.04	%		337,242		$	11,161		6.67	%
Non-interest earning assets		30,054								28,098
Allowance for loan losses		(5,305	)							(3,496	)
Total Assets	$	401,720							$	361,844
Sources of Funds:
Interest bearing deposits:
NOW	$	58,426		$	429		1.48	%	$	58,221		$	642		2.22	%
Money market		29,588			354		2.41	%		36,731			704		3.87	%
Savings		53,995			551		2.05	%		39,655			178		0.91	%
Time		134,773			2,864		4.27	%		127,386			3,039		4.81	%
Total interest bearing deposits		276,782			4,198		3.05	%		261,993			4,563		3.51	%
Borrowed funds		35,914			755		4.16	%		19,565			465		4.73	%
Junior subordinated debentures		12,887			324		4.97	%		5,366			234		8.66	%
Total interest bearing liabilities		325,583		$	5,277		3.26	%		286,924		$	5,262		3.70	%
Non-interest bearing liabilities:
Demand deposits		39,286								37,647
Other liabilities		2,069								2,218
Total non-interest bearing liabilities		41,355								39,865
Stockholders' equity		34,782								35,055
Total Liabilities and Stockholders' Equity	$	401,720							$	361,844
Net Interest Income and Margin (5)				$	6,041		3.22	%				$	5,899		3.53	%

(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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