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): February 1, 2010

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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 February 1, 2010, the Registrant issued a press release announcing its operating results for the year ended December 31, 2009.  A copy of the February 1, 2010 press release is included as Exhibit 99.1 hereto.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.  The following is filed as an Exhibit to this Current Report on Form 8-K:

99.1 Press Release dated February 1, 2010

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: February 2, 2010	By:	/s/    Candace A. Leatham
		CANDACE A. LEATHAM
		Executive Vice President and Chief Financial Officer

EX-99.1

Sussex Bancorp	Contact: Donald L. Kovach
200 Munsonhurst  Road	Chairman
Franklin, NJ 07416	(973) 827-2914

SUSSEX BANCORP ANNOUNCES 2009 EARNINGS

FRANKLIN, NEW JERSEY – February 1, 2010– Sussex Bancorp (NASDAQ “SBBX”) today announced its results of operations for the year ended December 31, 2009. For 2009, the Company earned $2.0 million, or $0.62 per basic and diluted share, compared to a net loss of $1.0 million, or ($0.32) per basic and diluted share for the prior year. The Company’s return to profitability in 2009 primarily reflects an increase in net interest income of $3.2 million as well as the absence of impairment charges in 2009, as the Company recorded an impairment charge of $3.5 million in 2008 related to certain FNMA and Freddie Mac securities.

The Company’s total interest income increased to $23.1 million for the year ended December 31, 2009 from $22.7 million for the same period last year, as total interest expense decreased to $8.1 million for the year ended December 31, 2009 from $10.8 million for the year ended December 31, 2008. As a result, for the year ended December 31, 2009 the Company’s net interest income increased to $15.0 million from the $11.8 million earned last year. The improvement in the net interest income is reflective of the improvement in the Company’s net interest margin, which increased by 48 basis points from 3.12% in 2008 to 3.60% in 2009.

The Company’s average earning assets increased by $39.5 millionin 2009 over 2008, while the average yield declined by 42 basis points, to 5.46% in 2009 from 5.88% in 2008.The Company’s average interest bearing liabilities increased by $45.1 million for the year ended December 31, 2009 compared to the prior year.  The Company’s cost of interest bearing liabilities decreased by 108 basis points to 2.07% in 2009 from 3.15% in 2008.

For the year ended December 31, 2009, the Company’s non-interest income increased by $3.5 million from $2.0 million for year ended December 31, 2008 to $5.5 million for year ended December 31, 2009. The improvement is attributable to an impairment write-down of $3.5 million on equity securities that the Company incurred in 2008, while the Company experienced no such impairment charges in 2009.  Non-interest expense was flat year over year, increasing by $90 thousand to $14.7 million for the year ended December 31, 2009 compared to $14.6 million one year earlier.  This increase is due to $551 thousand in increased FDIC assessment charges, while salaries and employee benefit expenses declined by approximately $194 thousand.

The Company’s loan loss provision for the year ended December 31, 2009 was $3.4 million compared to $1.4 million for the same period last year. The increase in the provision is primarily attributable to a decline in real estate collateral values and adverse economic conditions in the Company’s trade area. As a result of these conditions, the Company’s non-performing loan balance increased to $20.4 million at December 31, 2009 from $11.0 million at December 31, 2008.  The Company believes these loans are adequately provided for in its loan loss provision or are sufficiently secured at December 31, 2009.  Non-performing loans as a percentage of total gross loans at December 31, 2009 were 6.13%, compared to 3.44% one year earlier.

At December 31, 2009 the Company had total assets of $454.8 million, compared to total assets of $440.6 million at December 31, 2008.  The Company had total deposits of $372.1 million at December 31, 2009, compared to total deposits of $360.1 million at December 31, 2008.

Sussex Bancorp is the holding company for Sussex Bank, which services its customers through ten branch offices, eight located in Sussex County, New Jersey and two in Orange County, New York and for Tri-State Insurance Agency, Inc, a full service insurance agency located in Sussex County, New Jersey.

SUSSEX BANCORP
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)
ASSETS	December 31, 2009		December 31, 2008
	(Unaudited)
Cash and due from banks	$	8,779	$	7,602
Federal funds sold		14,300		13,310
Cash and cash equivalents		23,079		20,912
Interest bearing time deposits with other banks		100		100
Trading securities		2,955		13,290
Securities available for sale		71,315		62,272
Federal Home Loan Bank Stock, at cost		2,045		1,975
Loans receivable, net of unearned income		332,959		320,880
Less:  allowance for loan losses		5,496		5,813
Net loans receivable		327,463		315,067
Foreclosed real estate		3,843		3,864
Premises and equipment, net		7,065		8,526
Accrued interest receivable		1,943		2,115
Goodwill		2,820		2,820
Other assets		12,213		9,654
Total Assets	$	454,841	$	440,595
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing	$	34,155	$	34,784
Interest bearing		337,920		325,297
Total Deposits		372,075		360,081
Borrowings		33,090		33,146
Accrued interest payable and other liabilities		2,262		2,571
Junior subordinated debentures		12,887		12,887
Total Liabilities		420,314		408,685
Total Stockholders' Equity		34,527		31,910
Total Liabilities and Stockholders' Equity	$	454,841	$	440,595

SUSSEX BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands)
	Years Ended December 31,
	2009		2008
	(Unaudited)
INTEREST INCOME
Loans receivable, including fees	$	19,259	$	19,150
Securities:
Taxable		2,587		2,266
Tax-exempt		1,164		976
Federal funds sold		30		259
Interest bearing deposits		15		2
Total Interest Income		23,055		22,653
INTEREST EXPENSE
Deposits		6,321		8,746
Borrowings		1,426		1,507
Junior subordinated debentures		306		590
Total Interest Expense		8,053		10,843
Net Interest Income		15,002		11,810
PROVISION FOR LOAN LOSSES		3,404		1,350
Net Interest Income after Provision for Loan Losses		11,598		10,460
OTHER INCOME
Service fees on deposit accounts		1,467		1,534
ATM fees		480		464
Insurance commissions and fees		2,284		2,507
Investment brokerage fees		137		151
Holding gains on trading securities		5		199
Gain on sale of securities, available for sale		134		150
Gain on sale of fixed assets		203		-
Gain (loss) on sale of foreclosed real estate		190		(58	)
Impairment write-downs on equity securities		-		(3,526	)
Other		644		570
Total Other Income		5,544		1,991
OTHER EXPENSES
Salaries and employee benefits		7,351		7,545
Occupancy, net		1,302		1,299
Furniture, equipment and data processing		1,286		1,481
Stationary and supplies		178		192
Professional fees		768		621
Advertising and promotion		179		469
Insurance		194		171
FDIC Assessment		936		385
Postage and freight		139		155
Amortization of intangible assets		18		49
Write-down on foreclosed real estate		456		437
Foreclosed real estate		347		255
Other		1,525		1,530
Total Other Expenses		14,679		14,589
Income (Loss) before Income Taxes		2,463		(2,138	)
PROVISION (BENEFIT) FOR INCOME TAXES		452		(1,096	)
Net Income (Loss)	$	2,011	$	(1,042	)

SUSSEX BANCORP
COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES
(Dollars In Thousands)
(Unaudited)
	Twelve Months Ended December 31,
(Dollars in thousands)	2009								2008
	Average					Average			Average					Average
Earning Assets:	Balance			Interest (1)		Rate (2)			Balance			Interest (1)		Rate (2)
Securities:
Tax exempt  (3)	$	28,102		$	1,747		6.22	%	$	23,720		$	1,458		6.15	%
Taxable		59,035			2,587		4.38	%		47,234			2,266		4.80	%
Total securities		87,137			4,334		4.97	%		70,954			3,724		5.25	%
Total loans receivable (4)		326,740			19,259		5.89	%		307,845			19,150		6.22	%
Other interest-earning assets		19,208			45		0.23	%		14,749			261		1.77	%
Total earning assets		433,085		$	23,638		5.46	%		393,548		$	23,135		5.88	%
Non-interest earning assets		36,355								31,359
Allowance for loan losses		(5,824	)							(5,182	)
Total Assets	$	463,616							$	419,725
Sources of Funds:
Interest bearing deposits:
NOW	$	57,928		$	582		1.00	%	$	58,878		$	798		1.36	%
Money market		14,709			177		1.21	%		23,769			527		2.22	%
Savings		169,541			2,759		1.63	%		85,707			2,350		2.74	%
Time		101,565			2,803		2.76	%		127,475			5,071		3.98	%
Total interest bearing deposits		343,743			6,321		1.84	%		295,829			8,746		2.96	%
Borrowed funds		33,139			1,426		4.30	%		35,971			1,507		4.19	%
Junior subordinated debentures		12,887			306		2.38	%		12,887			590		4.57	%
Total interest bearing liabilities		389,769		$	8,053		2.07	%		344,687		$	10,843		3.15	%
Non-interest bearing liabilities:
Demand deposits		38,154								39,303
Other liabilities		2,303								2,036
Total non-interest bearing liabilities		40,457								41,339
Stockholders' equity		33,390								33,699
Total Liabilities and Stockholders' Equity	$	463,616							$	419,725
Net Interest Income and Margin (5)				$	15,585		3.60	%				$	12,292		3.12	%
(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