200 Munsonhurst Road
Franklin, NJ 07416
SUSSEX BANCORP REPORTS THIRD QUARTER RESULTS AND IMPROVED ASSET QUALITY FOR 2012
FRANKLIN, NEW JERSEY – November 7, 2012 – Sussex Bancorp (the “Company”) (NasdaqGM: SBBX), the holding company for Sussex Bank (the “Bank”) today announced net income of $546 thousand, or $0.17 per basic and diluted share, for the quarter-ended September 30, 2012, a 6.3% earnings per share growth, as compared to $534 thousand, or $0.16 per basic and diluted share, for the same period last year. The increase in net income was largely due to improved non-interest income resulting from an increase in gains on sale of securities and insurance commissions and fees, which was largely offset by higher provision for loan losses and expenses and write-downs related to foreclosed real estate.
For the nine months ended September 30, 2012, the Company reported net income of $832 thousand, or $0.26 per basic share and $0.25 per diluted share, as compared to $2.0 million, or $0.60 per basic and diluted share, for the same period last year. The Company attributed the decrease in net income for the nine months ended September 30, 2012, largely to expenses and write-downs related to the prospective sales of several foreclosed real estate properties. In addition, expenses related to additional commercial lending staff, technology upgrades, increased advertising and promotion and FDIC assessment costs (due to deposit growth) also added to the decrease in net income. The aforementioned declines were partly offset by improved non-interest income resulting from increases in gains on sale of securities and insurance commissions and fees.
The Company’s overall credit quality continues to improve as total problem assets (total classified/criticized/foreclosed real estate) have declined $20.3 million, or 33.3%, to $42.5 million at September 30, 2012, from a historical high of $62.8 million at March 31, 2010, and have decreased 14.4% since December 31, 2011. Included in our overall total problem assets are non-performing assets (“NPAs”), which declined 12.3% to $29.8 million at September 30, 2012, from $34.0 million at December 31, 2011.
We continue to make progress towards reducing our legacy problem assets, which was a primary goal for 2012. This quarter, we have reduced our non-performing assets by 13.2% and our total problem assets by 16.9% as compared to the same period last year. With the pending sales of several foreclosed real estate properties we are hopeful that this momentum will continue into 2013”, said Anthony Labozzetta, President and Chief Executive Officer of Sussex Bank. “Our operating results continue to be negatively affected by high levels of credit quality costs related to legacy problem assets. As we continue to reduce our problem assets, we will further improve our financial performance”, added Mr. Labozzetta.
Operating Performance
The Company reported net income of $546 thousand, up 2.3% for the third quarter of 2012, as compared to $534 thousand for the same period in 2011. The improvement in net income was largely due to increased gains on sale of securities (+$570 thousand), which was primarily offset by higher provision for loan losses (+$367 thousand) and expenses and write-downs related to foreclosed real estate (+$160 thousand). Contributing to the Company’s quarterly earnings improvement was the performance of its insurance subsidiary, Tri-state Insurance Agency, Inc. (“Tri-state”), which reported a 25.5% increase in revenues and $106 thousand in net income before taxes for the third quarter of 2012 as compared to a net loss before taxes of $4 thousand for the same period last year.
The Company reported net income of $832 thousand for the nine months ended September 30, 2012, as compared to $2.0 million for the same period in 2011. The decline in net income was largely due to an increase in expenses and write-downs related to foreclosed real estate (+$722 thousand), higher operating costs resulting from growth initiatives of the Company and a decline in the net interest margin. The aforementioned declines were partly offset by increases in gains on sale of securities (+$495 thousand) and higher Tri-state net income before taxes of $62 thousand, or 40.6%, for the nine months ended September 30, 2012 as compared to the same period last year.
Operating performance continues to be adversely impacted by the costs to resolve legacy problem assets. Income before provision for income taxes was $652 thousand and $738 thousand for the three and nine months ended September 30, 2012, respectively, which included total costs (provision for loan losses, loan collection costs and expenses and write-downs related to foreclosed real estate) and lost interest income from problem assets that totaled approximately $2 million and $6 million for the three and nine months ended September 30, 2012, respectively. Despite the high costs of resolving legacy problem assets, the Company continues to place an equal focus on strengthening its core operations and performance as return on average assets was 0.43% and 0.44% for the quarters ended September 30, 2012 and 2011, respectively, and 0.22% and 0.55% for the nine months ended September 30, 2012 and 2011, respectively.
Mr. Labozzetta stated, “Our core operations are performing well, which is demonstrated by the 0.43% return on average assets, despite the extraordinary levels of credit quality related costs, adjusting for those costs our return on average assets would be over 1.00%.”
Net Interest Income. Net interest income on a fully tax equivalent basis declined $100 thousand, or 2.3%, to $4.2 million for the third quarter of 2012 as compared to $4.3 million for same period in 2011. The decrease in net interest income was largely due to the Company’s net interest margin declining 23 basis points to 3.57% for the third quarter of 2012 compared to the same period last year. The decline in the net interest margin was mostly due to a 30 basis point decline in the average rate earned on loans. This decline in net interest income was partially offset by a decrease in the average rate paid on total interest bearing liabilities, which decreased 24 basis points to 0.87% for the third quarter of 2012 from 1.11% for the same period in 2011. The decline was in part offset by a $19.0 million, or 4.2%, increase in average interest earning assets, principally securities.
Net interest income, on a fully taxable equivalent basis, decreased $612 thousand, or 4.6%, to $12.7 million for the nine months ended September 30, 2012, as compared to $13.3 million for same period in 2011. The Company’s net interest margin declined 41 basis points to 3.56% for the nine months ended September 30, 2012, compared to 3.97% for the same period last year. The decline was mostly attributed to a 35 basis point decline in the average rate earned on loans to 5.22%, which was partly offset by a 18 basis point decrease in the average rate paid on interest bearing liabilities to 0.93% for the nine month period ended September 30, 2012, as compared to the same period last year. The decline was in part offset by a $28.3 million, or 6.3%, increase in average interest earning assets, principally securities.
Provision for Loan Losses. Provision for loan losses increased $367 thousand to $1.1 million for the third quarter of 2012, as compared to $737 thousand for the same period in 2011.
Provision for loan losses increased $234 thousand to $2.9 million for the nine month period ended September 30, 2012, as compared to $2.7 million for the same period last year.
Non-interest Income. The Company reported an increase in non-interest income of $756 thousand, or 62.7%, to $2.0 million for the third quarter of 2012 as compared to the same period last year. The increase in non-interest income was largely due to a $570 thousand increase in gain on the sale of securities and a $139 thousand, or 25.5%, growth in insurance commissions and fees.
The Company reported an increase in non-interest income of $753 thousand, or 19.1%, to $4.7 million for the nine months ended September 30, 2012, as compared to the same period last year. The increase in non-interest income was largely due increases in gain on sale of securities, insurance commissions and fees and other income, which increased $495 thousand, $168 thousand and $114 thousand, respectively.
Non-interest Expense. The Company’s non-interest expenses increased $270 thousand, or 6.7%, to $4.3 million for the third quarter of 2012 as compared to the same period last year. The increase for the third quarter of 2012 versus the same period in 2011 was largely due to an increase in expenses related to foreclosed real estate and other expenses, which increased $160 thousand and $67 thousand, respectively.
The Company’s non-interest expenses increased $1.7 million, or 14.6%, to $13.3 million for the nine months ended September 30, 2012, as compared to the same period last year. The increase during the first nine months of 2012 compared to the same period in 2011 was largely due to increases in expenses and write-downs related to foreclosed real estate and salaries and benefits of $722 thousand and $532 thousand, respectively. The increase in expenses and write-downs related to foreclosed real estate was principally due to the prospective sales of foreclosed real estate properties. The increase in salaries and employee benefits was mostly attributed to costs of related to the hiring of additional commercial lenders and support staff, higher medical benefit costs and severance costs of $110 thousand for a former executive during the first quarter of 2012.
Financial Condition Comparison
At September 30, 2012, the Company’s total assets were $504.3 million, a decrease of $2.7 million, or 0.5%, as compared to total assets of $507.0 million at December 31, 2011. The decrease in total assets was largely driven by a decline in cash and cash equivalents of $27.1 million, or 72.2%, which was mostly offset by securities growth of $24.0 million, or 23.9%.
Total loans receivable, net of unearned income, increased $690 thousand, or 0.2%, to $340.4 million at September 30, 2012, from $339.7 million at year-end 2011. During the nine months ended September 30, 2012, the Company originated approximately $40.0 million in new loans. The loan volume for 2012 was largely offset by pay-offs of non-performing loans, potential problem loans, loans repurchased from a participation bank, loan charge-offs and unanticipated loan prepayments. During the third quarter of 2012, there were $5.8 million in loans that the Company sold back to the participating bank that had originated the loans. The $5.8 million in loans repurchased included $1.7 million in non-accrual loans and was part of approximately $12.0 million in loans that the Company had negotiated the full pay-off of all contractual amounts due (principal and interest plus $45,000 in fees). The remaining loans are scheduled to be sold back to the participating bank during the next 4 months. Such loans were originated and sold to the Company between the years of 2003 and 2009.
The Company’s security portfolio, which includes securities available for sale and securities held to maturity, increased $24.0 million, or 23.9%, to $124.6 million at September 30, 2012, as compared to $100.6 million at December 31, 2011.
The Company’s total deposits decreased $8.0 million, or 1.9%, to $417.3 million at September 30, 2012, from $425.4 million at December 31, 2011. The decrease in deposits was due to a $7.4 million, or 6.7%, decline in time deposits for September 30, 2012 as compared to December 31, 2011. The decline was partly offset by a $2.0 million, or 4.6%, increase in non-interest bearing deposits.
At September 30, 2012, the Company’s total stockholders’ equity was $41.2 million, an increase of $1.3 million when compared to December 31, 2011. At September 30, 2012, the leverage, Tier I risk-based capital and total risk-based capital ratios for the Bank were 9.36%, 13.18% and 14.44%, respectively, all in excess of the ratios required to be deemed “well-capitalized.”
Asset and Credit Quality
The overall credit quality of the Company continues to show positive trends at September 30, 2012, as our classified/criticized/foreclosed real estate declined $7.1 million, or 14.4%, from December 31, 2011. Our classified/criticized/foreclosed real estate totaled $42.5 million at September 30, 2012, as compared to $49.6 million at December 31, 2011, and has declined 33.3% from a historical high of $62.8 million at March 31, 2010. Loans internally rated “Substandard,” “Doubtful” or “Loss” are considered classified assets, while loans rated as “Special Mention” are considered criticized. Such risk ratings are consistent with the classification system used by regulatory agencies and are consistent with industry practices.
NPAs, which include non-accrual loans, 90 days past due and still accruing, performing troubled debt restructured loans and foreclosed real estate, decreased $4.2 million, or 12.3%, to $29.8 million at September 30, 2012, as compared to $34.0 million at December 31, 2011. The ratio of NPAs to total assets for September 30, 2012 and December 31, 2011 were 5.9% and 6.7%, respectively. The Company has been actively marketing its foreclosed real estate properties, which amounted to $5.2 million at September 30, 2012, with an average book value of approximately $350 thousand per property. Approximately $2.2 million, or 42.3%, of the Company’s total foreclosed real estate at September 30, 2012, are under contract for sale and are anticipated to close in the fourth quarter of this year. The increase of $722 thousand, or 224.2%, in expenses and write-downs related to foreclosed real estate for the nine months ended September 30, 2012, as compared to the same period last year was largely attributed to the properties that are under contract for sale.
The allowance for loan losses was $6.7 million, or 2.0% of total loans, at September 30, 2012, compared to $7.2 million, or 2.1% of total loans, at December 31, 2011.
About Sussex Bancorp
Sussex Bancorp is the holding company for Sussex Bank, which operates through its main office in Franklin, New Jersey and through its nine branch offices located in Andover, Augusta, Newton, Montague, Sparta, Vernon and Wantage, New Jersey, Port Jervis and Warwick, New York; a loan production office in Rochelle Park, New Jersey and for the Tri-State Insurance Agency, Inc., a full service insurance agency with locations in Augusta and Rochelle Park, 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 (the “Reform Act”). 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, 2011, 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.
| Contacts: | Anthony Labozzetta, President/CEO | |
| Steven Fusco, SVP/CFO | ||
| 973-827-2914 |
SUSSEX BANCORP
SUMMARY FINANCIAL HIGHLIGHTS
(In Thousands, Except Percentages and Per Share Data)
(Unaudited)
| 9/30/12 VS. | ||||||||||||||||||||
| 9/30/2012 | 12/31/2011 | 9/30/2011 | 9/30/2011 | 12/31/2011 | ||||||||||||||||
| BALANCE SHEET HIGHLIGHTS - Period End Balances | ||||||||||||||||||||
| Total securities | $ | 124,595 | $ | 100,581 | $ | 83,737 | 48.8 | % | 23.9 | % | ||||||||||
| Total loans | 340,395 | 339,705 | 337,794 | 0.8 | % | 0.2 | % | |||||||||||||
| Allowance for loan losses | (6,721 | ) | (7,210 | ) | (7,401 | ) | (9.2 | )% | (6.8 | )% | ||||||||||
| Total assets | 504,294 | 506,953 | 495,884 | 1.7 | % | (0.5 | )% | |||||||||||||
| Total deposits | 417,341 | 425,376 | 415,050 | 0.6 | % | (1.9 | )% | |||||||||||||
| Total borrowings and junior subordinated debt | 38,887 | 38,887 | 38,887 | - | % | - | % | |||||||||||||
| Total shareholders' equity | 41,182 | 39,902 | 39,388 | 4.6 | % | 3.2 | % | |||||||||||||
| FINANCIAL DATA - QUARTER ENDED: | ||||||||||||||||||||
| Net interest income (tax equivalent) (a) | $ | 4,239 | $ | 4,251 | $ | 4,339 | (2.3 | )% | (0.3 | )% | ||||||||||
| Provision for loan losses | 1,104 | 618 | 737 | 49.8 | % | 78.6 | % | |||||||||||||
| Total other income | 1,962 | 1,331 | 1,206 | 62.7 | % | 47.4 | % | |||||||||||||
| Total other expenses | 4,295 | 4,199 | 4,025 | 6.7 | % | 2.3 | % | |||||||||||||
| Income before provision for income taxes (tax equivalent) | 802 | 765 | 783 | 2.4 | % | 4.8 | % | |||||||||||||
| Provision for income taxes | 106 | 102 | 97 | 9.3 | % | 3.9 | % | |||||||||||||
| Taxable equivalent adjustment (a) | 150 | 148 | 152 | (1.6 | )% | 1.3 | % | |||||||||||||
| Net income | $ | 546 | $ | 515 | $ | 534 | 2.3 | % | 6.0 | % | ||||||||||
| Net income per common share - Basic | $ | 0.17 | $ | 0.16 | $ | 0.16 | 6.3 | % | 6.2 | % | ||||||||||
| Net income per common share - Diluted | $ | 0.17 | $ | 0.15 | $ | 0.16 | 6.3 | % | 13.3 | % | ||||||||||
| Return on average assets | 0.43 | % | 0.41 | % | 0.44 | % | (2.1 | )% | 4.5 | % | ||||||||||
| Return on average equity | 5.32 | % | 5.22 | % | 5.49 | % | (3.1 | )% | 2.0 | % | ||||||||||
| Net interest margin (tax equivalent) | 3.57 | % | 3.59 | % | 3.80 | % | (6.0 | )% | (0.6 | )% | ||||||||||
| FINANCIAL DATA - YEAR TO DATE: | ||||||||||||||||||||
| Net interest income (tax equivalent) (a) | $ | 12,651 | $ | 13,263 | (4.6 | )% | ||||||||||||||
| Provision for loan losses | 2,922 | 2,688 | 8.7 | % | ||||||||||||||||
| Total other income | 4,705 | 3,952 | 19.1 | % | ||||||||||||||||
| Total other expenses | 13,270 | 11,584 | 14.6 | % | ||||||||||||||||
| Income before provision for income taxes (tax equivalent) | 1,164 | 2,943 | (60.5 | )% | ||||||||||||||||
| Provision for income taxes | (94 | ) | 535 | (117.6 | )% | |||||||||||||||
| Taxable equivalent adjustment (a) | 426 | 453 | (6.0 | )% | ||||||||||||||||
| Net income | $ | 832 | $ | 1,955 | (57.5 | )% | ||||||||||||||
| Net income per common share - Basic | $ | 0.26 | $ | 0.60 | (56.7 | )% | ||||||||||||||
| Net income per common share - Diluted | $ | 0.25 | $ | 0.60 | (58.3 | )% | ||||||||||||||
| Return on average assets | 0.22 | % | 0.55 | % | (60.1 | )% | ||||||||||||||
| Return on average equity | 2.74 | % | 6.86 | % | (60.1 | )% | ||||||||||||||
| Net interest margin (tax equivalent) | 3.56 | % | 3.97 | % | (10.4 | )% | ||||||||||||||
| SHARE INFORMATION: | ||||||||||||||||||||
| Book value per common share | $ | 12.12 | $ | 11.83 | $ | 11.68 | 3.8 | % | 2.5 | % | ||||||||||
| Outstanding shares- period ending | 3,397,873 | 3,372,949 | 3,372,688 | 0.7 | % | 0.7 | % | |||||||||||||
| Average diluted shares outstanding (year to date) | 3,282,226 | 3,278,358 | 3,279,496 | 0.1 | % | 0.1 | % | |||||||||||||
| CAPITAL RATIOS: | ||||||||||||||||||||
| Total equity to total assets | 8.17 | % | 7.87 | % | 7.94 | % | 2.8 | % | 3.8 | % | ||||||||||
| Leverage ratio (b) | 9.36 | % | 9.29 | % | 9.42 | % | (0.6 | )% | 0.8 | % | ||||||||||
| Tier 1 risk-based capital ratio (b) | 13.18 | % | 12.98 | % | 13.11 | % | 0.5 | % | 1.5 | % | ||||||||||
| Total risk-based capital ratio (b) | 14.44 | % | 14.24 | % | 14.37 | % | 0.5 | % | 1.4 | % | ||||||||||
| ASSET QUALITY AND RATIOS: | ||||||||||||||||||||
| Non-accrual loans | $ | 23,993 | $ | 24,283 | $ | 27,493 | (12.7 | )% | (1.2 | )% | ||||||||||
| Loans 90 days past due and still accruing | 59 | 803 | 998 | (94.1 | )% | (92.7 | )% | |||||||||||||
| Troubled debt restructured loans (c) | 603 | 3,411 | 1,313 | (54.1 | )% | (82.3 | )% | |||||||||||||
| Foreclosed real estate | 5,158 | 5,509 | 4,545 | 13.5 | % | (6.4 | )% | |||||||||||||
| Non-performing assets | $ | 29,813 | $ | 34,006 | $ | 34,349 | (13.2 | )% | (12.3 | )% | ||||||||||
| Foreclosed real estate, Criticized and Classified Assets | 42,462 | 49,584 | 51,108 | (16.9 | )% | (14.4 | )% | |||||||||||||
| Charge-offs, net (quarterly) | $ | 619 | $ | 803 | $ | 872 | (29.0 | )% | (22.9 | )% | ||||||||||
| Charge-offs, net as a % of average loans (annualized) | 0.72 | % | 0.96 | % | 1.03 | % | (29.9 | )% | (24.4 | )% | ||||||||||
| Non-accrual loans to total loans | 7.05 | % | 7.15 | % | 8.14 | % | (13.4 | )% | (1.4 | )% | ||||||||||
| Non-performing assets to total assets | 5.91 | % | 6.71 | % | 6.73 | % | (12.1 | )% | (11.9 | )% | ||||||||||
| Allowance for loan losses as a % of non-performing loans | 27.33 | % | 26.03 | % | 25.69 | % | 6.4 | % | 5.0 | % | ||||||||||
| Allowance for loan losses to total loans | 1.97 | % | 2.12 | % | 2.19 | % | (9.9 | )% | (7.0 | )% | ||||||||||
(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) Sussex Bank capital ratios
(c) Troubled debt restructured loans currently performing in accordance with renegotiated terms
| SUSSEX BANCORP | |||
| CONSOLIDATED BALANCE SHEETS | |||
| (Dollars In Thousands) | |||
| (Unaudited) | |||
| ASSETS | September 30, 2012 | December 31, 2011 | ||||||
| Cash and due from banks | $ | 6,513 | $ | 3,903 | ||||
| Interest-bearing deposits with other banks | 3,917 | 33,597 | ||||||
| Cash and cash equivalents | 10,430 | 37,500 | ||||||
| Interest bearing time deposits with other banks | 100 | 100 | ||||||
| Securities available for sale, at fair value | 119,002 | 96,361 | ||||||
| Securities held to maturity | 5,593 | 4,220 | ||||||
| Federal Home Loan Bank Stock, at cost | 1,943 | 1,837 | ||||||
| Loans receivable, net of unearned income | 340,395 | 339,705 | ||||||
| Less: allowance for loan losses | 6,721 | 7,210 | ||||||
| Net loans receivable | 333,674 | 332,495 | ||||||
| Foreclosed real estate | 5,158 | 5,509 | ||||||
| Premises and equipment, net | 6,630 | 6,778 | ||||||
| Accrued interest receivable | 1,861 | 1,735 | ||||||
| Goodwill | 2,820 | 2,820 | ||||||
| Bank owned life insurance | 11,442 | 11,142 | ||||||
| Other assets | 5,641 | 6,456 | ||||||
| Total Assets | $ | 504,294 | $ | 506,953 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Liabilities: | ||||||||
| Deposits: | ||||||||
| Non-interest bearing | $ | 46,813 | $ | 44,762 | ||||
| Interest bearing | 370,528 | 380,614 | ||||||
| Total Deposits | 417,341 | 425,376 | ||||||
| Borrowings | 26,000 | 26,000 | ||||||
| Accrued interest payable and other liabilities | 6,884 | 2,788 | ||||||
| Junior subordinated debentures | 12,887 | 12,887 | ||||||
| Total Liabilities | 463,112 | 467,051 | ||||||
| Total Stockholders' Equity | 41,182 | 39,902 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 504,294 | $ | 506,953 | ||||
| SUSSEX BANCORP | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| (Dollars In Thousands Except Per Share Data) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| INTEREST INCOME | ||||||||||||||||
| Loans receivable, including fees | $ | 4,467 | $ | 4,687 | $ | 13,292 | $ | 14,210 | ||||||||
| Securities: | ||||||||||||||||
| Taxable | 241 | 313 | 994 | 989 | ||||||||||||
| Tax-exempt | 292 | 296 | 827 | 879 | ||||||||||||
| Federal funds sold | - | - | - | 3 | ||||||||||||
| Interest bearing deposits | 4 | 20 | 30 | 32 | ||||||||||||
| Total Interest Income | 5,004 | 5,316 | 15,143 | 16,113 | ||||||||||||
| INTEREST EXPENSE | ||||||||||||||||
| Deposits | 587 | 806 | 1,938 | 2,342 | ||||||||||||
| Borrowings | 268 | 268 | 797 | 797 | ||||||||||||
| Junior subordinated debentures | 60 | 55 | 183 | 164 | ||||||||||||
| Total Interest Expense | 915 | 1,129 | 2,918 | 3,303 | ||||||||||||
| Net Interest Income | 4,089 | 4,187 | 12,225 | 12,810 | ||||||||||||
| PROVISION FOR LOAN LOSSES | 1,104 | 737 | 2,922 | 2,688 | ||||||||||||
| Net Interest Income after Provision for Loan Losses | 2,985 | 3,450 | 9,303 | 10,122 | ||||||||||||
| OTHER INCOME | ||||||||||||||||
| Service fees on deposit accounts | 292 | 324 | 842 | 968 | ||||||||||||
| ATM and debit card fees | 165 | 140 | 453 | 400 | ||||||||||||
| Bank owned life insurance | 96 | 105 | 300 | 314 | ||||||||||||
| Insurance commissions and fees | 684 | 545 | 1,892 | 1,724 | ||||||||||||
| Investment brokerage fees | 46 | 33 | 118 | 103 | ||||||||||||
| Gain on sale of loans, held for sale | - | - | 47 | - | ||||||||||||
| Gain (loss) on securities transactions | 569 | (1 | ) | 763 | 268 | |||||||||||
| Loss on sale of fixed assets | - | - | (6 | ) | - | |||||||||||
| Gain (loss) on sale of foreclosed real estate | 2 | 2 | 5 | (2 | ) | |||||||||||
| Other | 108 | 58 | 291 | 177 | ||||||||||||
| Total Other Income | 1,962 | 1,206 | 4,705 | 3,952 | ||||||||||||
| OTHER EXPENSES | ||||||||||||||||
| Salaries and employee benefits | 2,196 | 2,219 | 6,744 | 6,212 | ||||||||||||
| Occupancy, net | 355 | 338 | 1,071 | 1,055 | ||||||||||||
| Furniture, equipment and data processing | 326 | 283 | 1,014 | 871 | ||||||||||||
| Advertising and promotion | 63 | 52 | 222 | 141 | ||||||||||||
| Professional fees | 175 | 163 | 478 | 439 | ||||||||||||
| Director fees | 56 | 5 | 236 | 144 | ||||||||||||
| FDIC assessment | 177 | 153 | 516 | 535 | ||||||||||||
| Insurance | 68 | 53 | 179 | 163 | ||||||||||||
| Stationary and supplies | 44 | 39 | 128 | 122 | ||||||||||||
| Loan collection costs | 204 | 314 | 539 | 606 | ||||||||||||
| Expenses and write-downs related to foreclosed real estate | 234 | 74 | 1,044 | 322 | ||||||||||||
| Amortization of intangible assets | 1 | 3 | 4 | 8 | ||||||||||||
| Other | 396 | 329 | 1,095 | 966 | ||||||||||||
| Total Other Expenses | 4,295 | 4,025 | 13,270 | 11,584 | ||||||||||||
| Income before Income Taxes | 652 | 631 | 738 | 2,490 | ||||||||||||
| PROVISION (BENEFIT) FOR INCOME TAXES | 106 | 97 | (94 | ) | 535 | |||||||||||
| Net Income | $ | 546 | $ | 534 | $ | 832 | $ | 1,955 | ||||||||
| OTHER COMPREHENSIVE INCOME: | ||||||||||||||||
| Unrealized gains on available for sale securities arising during the period | $ | 693 | $ | 353 | $ | 1,413 | $ | 1,425 | ||||||||
| Reclassification adjustment for gain on sales included in net income | (569 | ) | 1 | (763 | ) | (268 | ) | |||||||||
| Income tax expense related to other comprehensive income | (49 | ) | (142 | ) | (259 | ) | (463 | ) | ||||||||
| Other comprehensive income, net of income taxes | 75 | 212 | 391 | 694 | ||||||||||||
| Comprehensive income | $ | 621 | $ | 746 | $ | 1,223 | $ | 2,649 | ||||||||
| EARNINGS PER SHARE | ||||||||||||||||
| Basic | $ | 0.17 | $ | 0.16 | $ | 0.26 | $ | 0.60 | ||||||||
| Diluted | $ | 0.17 | $ | 0.16 | $ | 0.25 | $ | 0.60 | ||||||||
| SUSSEX BANCORP | ||||||||||||||||||||||||
| COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES | ||||||||||||||||||||||||
| (Dollars In Thousands) | ||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| Three Months Ended September 30, | ||||||||||||||||||||||||
| 2012 | 2011 | |||||||||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||||||||
| Balance | Interest (1) | Rate (2) | Balance | Interest (1) | Rate (2) | |||||||||||||||||||
| Earning Assets: | ||||||||||||||||||||||||
| Securities: | ||||||||||||||||||||||||
| Tax exempt (3) | $ | 32,199 | $ | 442 | 5.46 | % | $ | 30,059 | $ | 448 | 5.90 | % | ||||||||||||
| Taxable | 86,766 | 241 | 1.10 | % | 48,890 | 313 | 2.54 | % | ||||||||||||||||
| Total securities | 118,965 | 683 | 2.28 | % | 78,949 | 761 | 3.82 | % | ||||||||||||||||
| Total loans receivable (4) | 342,502 | 4,467 | 5.19 | % | 338,393 | 4,687 | 5.49 | % | ||||||||||||||||
| Other interest-earning assets | 10,405 | 4 | 0.15 | % | 35,530 | 20 | 0.22 | % | ||||||||||||||||
| Total earning assets | 471,872 | $ | 5,154 | 4.35 | % | 452,872 | $ | 5,468 | 4.79 | % | ||||||||||||||
| Non-interest earning assets | 43,319 | 41,159 | ||||||||||||||||||||||
| Allowance for loan losses | (6,671 | ) | (7,261 | ) | ||||||||||||||||||||
| Total Assets | $ | 508,520 | $ | 486,770 | ||||||||||||||||||||
| Sources of Funds: | ||||||||||||||||||||||||
| Interest bearing deposits: | ||||||||||||||||||||||||
| NOW | $ | 95,611 | $ | 36 | 0.15 | % | $ | 77,676 | $ | 85 | 0.44 | % | ||||||||||||
| Money market | 14,506 | 11 | 0.30 | % | 16,564 | 23 | 0.55 | % | ||||||||||||||||
| Savings | 162,762 | 133 | 0.33 | % | 168,419 | 287 | 0.68 | % | ||||||||||||||||
| Time | 104,128 | 407 | 1.55 | % | 102,725 | 411 | 1.59 | % | ||||||||||||||||
| Total interest bearing deposits | 377,007 | 587 | 0.62 | % | 365,384 | 806 | 0.88 | % | ||||||||||||||||
| Borrowed funds | 26,196 | 268 | 4.07 | % | 26,000 | 268 | 4.09 | % | ||||||||||||||||
| Junior subordinated debentures | 12,887 | 60 | 1.85 | % | 12,887 | 55 | 1.69 | % | ||||||||||||||||
| Total interest bearing liabilities | 416,090 | $ | 915 | 0.87 | % | 404,271 | $ | 1,129 | 1.11 | % | ||||||||||||||
| Non-interest bearing liabilities: | ||||||||||||||||||||||||
| Demand deposits | 48,702 | 41,012 | ||||||||||||||||||||||
| Other liabilities | 2,676 | 2,613 | ||||||||||||||||||||||
| Total non-interest bearing liabilities | 51,378 | 43,625 | ||||||||||||||||||||||
| Stockholders' equity | 41,052 | 38,874 | ||||||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 508,520 | $ | 486,770 | ||||||||||||||||||||
| Net Interest Income and Margin (5) | 4,239 | 3.57 | % | 4,339 | 3.80 | % | ||||||||||||||||||
| Tax-equivalent basis adjustment | (150 | ) | (152 | ) | ||||||||||||||||||||
| Net Interest Income | $ | 4,089 | $ | 4,187 | ||||||||||||||||||||
| (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, | ||||||||||||||||||||||||
| 2012 | 2011 | |||||||||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||||||||
| Balance | Interest (1) | Rate (2) | Balance | Interest (1) | Rate (2) | |||||||||||||||||||
| Earning Assets: | ||||||||||||||||||||||||
| Securities: | ||||||||||||||||||||||||
| Tax exempt (3) | $ | 29,444 | $ | 1,253 | 5.68 | % | $ | 29,962 | $ | 1,332 | 5.94 | % | ||||||||||||
| Taxable | 84,774 | 994 | 1.57 | % | 52,398 | 989 | 2.52 | % | ||||||||||||||||
| Total securities | 114,218 | 2,247 | 2.63 | % | 82,360 | 2,321 | 3.77 | % | ||||||||||||||||
| Total loans receivable (4) | 339,839 | 13,292 | 5.22 | % | 341,123 | 14,210 | 5.57 | % | ||||||||||||||||
| Other interest-earning assets | 21,095 | 30 | 0.19 | % | 23,319 | 35 | 0.20 | % | ||||||||||||||||
| Total earning assets | 475,152 | $ | 15,569 | 4.38 | % | 446,802 | $ | 16,566 | 4.96 | % | ||||||||||||||
| Non-interest earning assets | 42,076 | 38,020 | ||||||||||||||||||||||
| Allowance for loan losses | (7,335 | ) | (7,227 | ) | ||||||||||||||||||||
| Total Assets | $ | 509,893 | $ | 477,595 | ||||||||||||||||||||
| Sources of Funds: | ||||||||||||||||||||||||
| Interest bearing deposits: | ||||||||||||||||||||||||
| NOW | $ | 94,578 | $ | 129 | 0.18 | % | $ | 78,923 | $ | 305 | 0.52 | % | ||||||||||||
| Money market | 16,962 | 47 | 0.37 | % | 14,838 | 61 | 0.55 | % | ||||||||||||||||
| Savings | 163,331 | 492 | 0.40 | % | 169,360 | 881 | 0.70 | % | ||||||||||||||||
| Time | 107,389 | 1,270 | 1.58 | % | 94,898 | 1,095 | 1.54 | % | ||||||||||||||||
| Total interest bearing deposits | 382,260 | 1,938 | 0.68 | % | 358,019 | 2,342 | 0.87 | % | ||||||||||||||||
| Borrowed funds | 26,066 | 797 | 4.08 | % | 26,859 | 797 | 3.97 | % | ||||||||||||||||
| Junior subordinated debentures | 12,887 | 183 | 1.90 | % | 12,887 | 164 | 1.70 | % | ||||||||||||||||
| Total interest bearing liabilities | 421,213 | $ | 2,918 | 0.93 | % | 397,765 | $ | 3,303 | 1.11 | % | ||||||||||||||
| Non-interest bearing liabilities: | ||||||||||||||||||||||||
| Demand deposits | 45,949 | 39,423 | ||||||||||||||||||||||
| Other liabilities | 2,209 | 2,427 | ||||||||||||||||||||||
| Total non-interest bearing liabilities | 48,158 | 41,850 | ||||||||||||||||||||||
| Stockholders' equity | 40,522 | 37,980 | ||||||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 509,893 | $ | 477,595 | ||||||||||||||||||||
| Net Interest Income and Margin (5) | $ | 12,651 | 3.56 | % | $ | 13,263 | 3.97 | % | ||||||||||||||||
| Tax-equivalent basis adjustment | (426 | ) | (453 | ) | ||||||||||||||||||||
| Net Interest Income | $ | 12,225 | $ | 12,810 | ||||||||||||||||||||
| (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 | |||||||