Exhibit 99.1 

 

100 Enterprise Dr.

Rockaway, NJ 07866

 

 

 

SUSSEX BANCORP REPORTS A 67% INCREASE IN NET INCOME DRIVEN BY LOAN AND DEPOSIT
GROWTH FOR THE FOURTH QUARTER 2016 AND DECLARES A QUARTERLY CASH DIVIDEND

 

ROCKAWAY, NEW JERSEY – January 26, 2017 – Sussex Bancorp (the “Company”) (Nasdaq: SBBX), the holding company for Sussex Bank (the “Bank”), today announced a 66.8% increase in net income to $1.5 million, or $0.33 per basic and $0.32 per diluted common share, for the quarter ended December 31, 2016, as compared to $913 thousand, or $0.20 per basic and diluted share, for the same period last year. The improvement for the fourth quarter of 2016 as compared to the same period last year was mostly driven by a 24.4% increase in net interest income as a result of strong growth in average loans and deposits, which increased $159.0 million, or 30.5%, and $94.0 million, or 22.4%, respectively. The aforementioned increase in net interest income was partly offset by higher non-interest expenses of $528 thousand, provision for loan losses of $107 thousand due to loan growth and an increase in income tax expense.

 

For the year ended December 31, 2016, the Company reported a 49.3% increase in net income to $5.5 million, or $1.20 per basic and $1.19 per diluted share, as compared to $3.7 million or $0.81 per basic and diluted share for the same period last year. The improvement for 2016 was driven by a $4.3 million, or 21.5%, increase in net interest income as a result of strong growth in average loans and interest-bearing deposits, which increased $136.4 million, or 27.9%, and $77.0 million, or 19.0%, respectively, and Tri State Insurance Agency’s (“Tri-State”) increase in contribution to net income before income taxes of $529 thousand, or 79.0%, as compared to the same period in 2015

 

“Viewed from a number of measures, I am excited to report that we had outstanding financial performance for the fourth quarter.  We are reaching key milestones on our journey to build a better bank,” stated Anthony Labozzetta, President and Chief Executive Officer of Sussex Bank.  “In 2016, each of our major business units grew in excess of 25%, which when paired with improved efficiency lead to substantial improvement in net income for the fourth quarter and fiscal 2016,” added Mr. Labozzetta.

Mr. Labozzetta also stated, “How we attain our results is vital to us.  So it is rewarding to see our Teams’ focus on the customer and deepening relationships result in such strong organic growth.”

 

Declaration of Quarterly Dividend

The Company’s Board of Directors declared a quarterly cash dividend of $0.04 per share, which is payable on February 23, 2017 to common shareholders of record as of the close of business on February 9, 2017.

 

Financial Performance

Net Income. For the quarter ended December 31, 2016, the Company reported net income of $1.5 million, or $0.33 per basic and $0.32 per diluted share, as compared to net income of $913 thousand, or $0.20 per basic and diluted share, for the same period last year. The increase in net income for the quarter ended December 31, 2016 was driven by a $1.3 million, or 24.4%, increase in net interest income resulting from strong loan and deposit growth. The aforementioned was partly offset by an increase in non-interest expenses of $528 thousand mostly due to costs attributed to support the Company’s growth, higher provision for loan losses of $107 thousand due to loan growth and an increase in income taxes due to earnings growth and a higher effective tax rate.

 

Income before income taxes increased $966 thousand, or 70.9%, to $2.3 million for the quarter ended December 31, 2016 as compared to $1.4 million for the same period last year. The Company’s income before income taxes, excluding Tri-State, increased $937 thousand, or 72.4%, to $2.2 million for the three months ended December 31, 2016 as compared to $1.3 million for the same period last year. Tri-State’s contribution to the Company’s income before income taxes for the quarter ended December 31, 2016 increased $26 thousand, or 37.7%, to $95 thousand as compared to the same period last year.

 

 

For the year ended December 31, 2016, the Company reported a 49.3% increase in net income to $5.5 million, or $1.20 per basic and $1.19 per diluted share as compared to net income of $3.7 million, or $0.81 per basic and diluted share, for the same period last year. The increase in net income for the year ended December 31, 2016 was largely due to increases in net interest income of $4.3 million, or 21.5%, and non-interest income of $1.4 million, or 21.3%, which were partially offset by an increase in non-interest expenses of $2.0 million, or 9.9%, and a $655 thousand increase in provision for loan losses. The increase in non-interest expense was largely due to increases in salaries and employee benefits, mostly due to an increase in personnel to support our growth and higher incentive and commission costs related to the Bank’s and Tri-State’s performance, and data processing costs largely resulting from the outsourcing of core processing systems.

 

Income before income taxes increased $3.0 million, or 56.4%, to $8.4 million for the year ended December 31, 2016 as compared to $5.3 million for the same period last year. Tri-State’s contribution to the Company’s income before income taxes for the year ended December 31, 2016 increased $529 thousand, or 79.0%, to $1.2 million as compared to $670 thousand for the same period last year. The growth was driven by Tri-State’s commissions and fees due in particular to an increase in direct bill commissions of $498 thousand, or 18.8%, and contingency fee income of $418 thousand, or 124.1%. The aforementioned was partly offset by an increase in non-interest expense of $591 thousand, or 19.4%. The Company’s income before income taxes, excluding Tri-State, increased $2.5 million, or 53.1%, to $7.1 million for the year ended December 31, 2016 as compared to the same period last year.

 

Net Interest Income. Net interest income on a fully tax equivalent basis increased $1.3 million, or 23.8%, to $6.7 million for the fourth quarter of 2016, as compared to $5.4 million for the same period in 2015. The increase in net interest income was largely due to a $161.7 million, or 25.5%, increase in average interest earning assets, principally loans receivable, which increased $159.0 million, or 30.5%. The improvement in net interest income was partly offset by a decline in the net interest margin of 4 basis points to 3.35% for the fourth quarter of 2016, as compared to the same period in 2015. The decline in the net interest margin was mostly attributed to a 6 basis point decrease in the average rate earned on loans, mostly due to loan growth and loan repricing in a low rate environment. Also included in the net interest margin decrease was a 4 basis point increase in the average rate on interest bearing deposits, which was primarily due to increased competition in the Bank’s existing markets and entering of new markets.

 

Net interest income on a fully tax equivalent basis increased $4.3 million, or 20.9%, to $24.8 million for the year ended December 31, 2016 as compared to $20.5 million for the same period in 2015. The increase in net interest income was largely due to a $141.3 million, or 23.7%, increase in average interest earning assets, principally loans, which increased $136.4 million, or 27.9%. The Company’s net interest margin was 3.37% and 3.45% for the year ended December 31, 2016 and 2015, respectively. The decline in net interest margin was due to loan growth and loan repricing in a low rate environment along with an increase in the average rate on interest bearing deposits, which was primarily due to increased competition in the Bank’s existing markets and entering of new markets.

 

Provision for Loan Losses. Provision for loan losses increased $107 thousand to $237 thousand for the fourth quarter of 2016, as compared to the same period in 2015.

 

Provision for loan losses increased $655 thousand, or 103.0%, to $1.3 million for the year ended December 31, 2016, as compared to $636 thousand for the same period in 2015. The increases for both periods were mostly attributable to the Company’s loan growth.

 

Non-interest Income. Non-interest income increased $309 thousand, or 22.1%, to $1.7 million for the fourth quarter of 2016, as compared to the same period last year. The increase was primarily due to higher insurance commissions and fees, which increased $106 thousand, and a reduction in the loss on disposal of fixed assets of $138 thousand, or 100.0%.

 

The Company reported an increase in non-interest income of $1.4 million, or 21.3%, to $7.8 million for the year ended December 31, 2016 as compared to the same period last year. The increase in non-interest income was largely due to increases in insurance commissions and fees and gains on sale of securities of $1.1 million and $173 thousand, respectively. The growth in Tri-State’s commissions and fees was largely due to an increase in direct bill commissions of $498 thousand, or 18.8%, and contingency fee income of $418 thousand, or 124.1%.

 

Non-interest Expense. The Company’s non-interest expenses increased $528 thousand, or 10.2%, to $5.7 million for the fourth quarter of 2016, as compared to the same period last year. The increase for the fourth quarter of 2016, as compared to the same period in 2015, was largely due to increases in salaries and employee benefits of $388 thousand, expenses and writes-downs related to foreclosed real estate of $82 thousand, data processing of $80 thousand, and FDIC assessment of $51 thousand. The aforementioned increases were partly offset by declines in director fees and other expenses of $54 thousand and $50 thousand, respectively.

 

 

The Company’s non-interest expenses increased $2.0 million, or 9.9%, to $22.6 million for the year ended December 31, 2016 as compared to the same period last year. The increase for the year ended December 31, 2016, as compared to the same period in 2015, was largely due to increases in salaries and employee benefits of $1.6 million, data processing of $455 thousand and professional fees of $134 thousand. The aforementioned increases were partly offset by declines in other expenses and director fees of $177 thousand and $94 thousand, respectively.

 

The increase in salaries and employee benefits for the fourth quarter and twelve months ended December 31, 2016 as compared to the same periods in 2015 was largely due to an increase in personnel to support our growth, including the opening of our Oradell, New Jersey branch in the first quarter of 2016, and higher incentive and commission costs related to the Bank’s and Tri-State’s performance. The aforementioned increases were partly offset by the elimination of our in-house data operations center during the fourth quarter of 2015 and the closing of our Port Jervis, New York branch during the second quarter of 2016. The increase in data processing was largely due to the costs associated with the outsourcing of core processing systems and higher costs related to the Company’s growth and introduction of new products and services during 2016. The decrease in director fees was a result of the Company placing a majority of the directors’ deferred compensation plan into a rabbi trust. The rabbi trust deferred compensation arrangement minimizes the variability of the director fees expense previously associated with mark to market adjustments of the Company’s stock price.

 

Financial Condition

At December 31, 2016, the Company’s total assets were $847.1 million, an increase of $162.6 million, or 23.8%, as compared to total assets of $684.5 million at December 31, 2015. The increase in total assets was largely driven by growth in loans receivable of $151.8 million, or 27.9%.

 

Total loans receivable, net of unearned income, increased $151.8 million, or 27.9%, to $695.3 million at December 31, 2016, as compared to $543.4 million at December 31, 2015. During the twelve months ended December 31, 2016, the Company had $190.1 million in commercial loan production, which was partly offset by $14.1 million in commercial loan payoffs.

 

The Company’s total deposits increased $143.1 million, or 27.6%, to $660.9 million at December 31, 2016, from $517.9 million at December 31, 2015. The growth in deposits was due to increases in both interest bearing deposits of $97.8 million, or 22.7%, and non-interest bearing deposits of $45.2 million, or 51.9%, at December 31, 2016, as compared to December 31, 2015. Included in the aforementioned deposit total is $60.0 million in deposit balances with a cost of 0.59% attributed to our newest branch in Oradell, New Jersey, which opened in the beginning of March, 2016. Also, included is $71.6 million in deposit balances with a cost of 0.39% attributed to our branch in Astoria, New York, which opened in Mid-March of 2015.

 

During the quarter ended December 31, 2016, the Company completed a private placement of $15 million in aggregate principal amount of fixed-to-floating rate subordinated notes (the “Notes”) to an institutional investor. The subordinated notes have a maturity date of December 22, 2026 and bear interest at the rate of 5.75% per annum, payable quarterly, for the first five years of the term, and then at a variable rate that will reset quarterly to a level equal to the then current 3-month LIBOR plus 350 basis points over the remainder of the term.

 

At December 31, 2016, the Company’s total stockholders’ equity was $60.1 million, an increase of $6.1 million when compared to December 31, 2015. The increase was largely due to net income for the twelve months ended December 31, 2016. At December 31, 2016, the leverage, Tier I risk-based capital, total risk-based capital and common equity Tier I capital ratios for the Bank were 10.41%, 12.87%, 13.86% and 12.87%, respectively, all in excess of the ratios required to be deemed “well-capitalized.” During the quarter ended December 31, 2016, the Company contributed proceeds from the Notes to the Bank’s Tier 1 capital.

 

 

Asset and Credit Quality

The ratio of NPAs, which include non-accrual loans, loans 90 days past due and still accruing, troubled debt restructured loans currently performing in accordance with renegotiated terms and foreclosed real estate, to total assets improved to 1.10% at December 31, 2016 from 1.49% at December 31, 2015. NPAs decreased $872 thousand, or 8.5%, to $9.3 million at December 31, 2016, as compared to $10.2 million at December 31, 2015. Non-accrual loans increased $521 thousand, or 9.8%, to $5.8 million at December 31, 2016, as compared to $5.3 million at December 31, 2015. Loans past due 30 to 89 days totaled $1.8 million at December, 31 2016, representing decreases of $5.7 million, or 75.7%, as compared to $7.6 million at September 30, 2016 and $983 thousand, or 34.8 %, as compared to $3.4 million at December 31, 2015. The top five non-accrual loan relationships total $3.4 million, which equates to 59.1% of total non-accrual loans and 36.9% of total NPAs at December 31, 2016. The remaining non-accrual loans at December 31, 2016 have an average loan balance of $108 thousand.

 

The Company continues to actively market its foreclosed real estate properties, which decreased $987 thousand to $2.4 million at December 31, 2016, as compared to $3.4 million at December 31, 2015. At December 31, 2016, the Company’s foreclosed real estate properties had an average carrying value of approximately $338 thousand per property.

 

The allowance for loan losses increased by $1.1 million, or 19.8%, to $6.7 million, or 0.96% of total loans, at December 31, 2016, compared to $5.6 million, or 1.03% of total loans, at December 31, 2015. The Company recorded $1.3 million in provision for loan losses for the year ended December 31, 2016. Additionally, the Company recorded net charge-offs of $185 thousand for the year ended December 31, 2016, as compared to $687 thousand in net charge-offs for the year ended December 31, 2015. For the quarter ended December 31, 2016, the Company recorded $128 thousand in net recoveries, as compared to net charge offs of $115 thousand for the quarter ended September 30, 2016. The allowance for loan losses as a percentage of non-accrual loans increased to 114.8% at December 31, 2016 from 105.2% at December 31, 2015.

 

About Sussex Bancorp

Sussex Bancorp is the holding company for Sussex Bank, which operates through its regional offices and corporate centers in Wantage and Rockaway, New Jersey, its eleven branch offices located in Andover, Augusta, Franklin, Hackettstown, Newton, Montague, Sparta, Vernon, Oradell and Wantage, New Jersey, and Astoria, New York, and a loan production office in Oradell, New Jersey, and for the Tri-State Insurance Agency, Inc., a full service insurance agency with locations in Augusta and Oradell, 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. 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, 2015 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, SEVP/CFO
	844-256-7328

 

 

 

SUSSEX BANCORP

SUMMARY FINANCIAL HIGHLIGHTS

(In Thousands, Except Percentages and Per Share Data)

(Unaudited)

 

														12/31/2016 VS.
		12/31/2016				9/30/2016				12/31/2015				12/31/2015				9/30/2016
BALANCE SHEET HIGHLIGHTS - Period End Balances
Total securities		$	100,229			$	98,258			$	100,610				(0.4	)%			2.0	%
Total loans			695,257				663,258				543,423				27.9	%			4.8	%
Allowance for loan losses			(6,696	)			(6,331	)			(5,590	)			19.8	%			5.8	%
Total assets			847,081				808,987				684,503				23.8	%			4.7	%
Total deposits			660,921				624,921				517,856				27.6	%			5.8	%
Total borrowings and junior subordinated debt			123,645				120,387				108,537				13.9	%			2.7	%
Total shareholders' equity			60,072				58,633				53,941				11.4	%			2.5	%
FINANCIAL DATA - QUARTER ENDED:
Net interest income (tax equivalent) (a)		$	6,704			$	6,453			$	5,414				23.8	%			3.9	%
Provision for loan losses			237				458				130				82.3	%			(48.3	)%
Total other income			1,705				1,774				1,396				22.1	%			(3.9	)%
Total other expenses			5,726				5,651				5,198				10.2	%			1.3	%
Income before provision for income taxes (tax equivalent)			2,446				2,118				1,482				65.0	%			15.5	%
Provision for income taxes			806				696				450				79.1	%			15.8	%
Taxable equivalent adjustment (a)			117				105				119				(1.7	)%			11.4	%
Net income		$	1,523			$	1,317			$	913				66.8	%			15.6	%
Net income per common share - Basic		$	0.33			$	0.28			$	0.20				65.0	%			17.9	%
Net income per common share - Diluted		$	0.32			$	0.28			$	0.20				60.0	%			14.3	%
Return on average assets			0.74	%			0.66	%			0.55	%			33.9	%			11.8	%
Return on average equity			10.14	%			9.06	%			6.79	%			49.4	%			11.9	%
Efficiency ratio (b)			69.05	%			69.58	%			77.69	%			(11.1	)%			(0.8	)%
Net interest margin (tax equivalent)			3.35	%			3.34	%			3.39	%			(1.2	)%			0.3	%
Avg. interest earning assets/Avg. interest bearing liabilities			1.25				1.25				1.24				1.2	%			0.1	%
FINANCIAL DATA - YEAR TO DATE:
Net interest income (tax equivalent) (a)		$	24,813							$	20,525				20.9	%
Provision for loan losses			1,291								636				103.0	%
Total other income			7,829								6,453				21.3	%
Total other expenses			22,585								20,553				9.9	%
Income before provision for income taxes (tax equivalent)			8,766								5,789				51.4	%
Provision for income taxes			2,828								1,640				72.4	%
Taxable equivalent adjustment (a)			415								449				(7.6	)%
Net income		$	5,523							$	3,700				49.3	%
Net income per common share - Basic		$	1.20							$	0.81				48.1	%
Net income per common share - Diluted		$	1.19							$	0.81				46.9	%
Return on average assets			0.72	%							0.59	%			21.5	%
Return on average equity			9.60	%							7.02	%			36.8	%
Efficiency ratio (b)			70.08	%							77.47	%			(9.5	)%
Net interest margin (tax equivalent)			3.37	%							3.45	%			(2.3	)%
Avg. interest earning assets/Avg. interest bearing liabilities			1.25								1.23				1.6	%
SHARE INFORMATION:
Book value per common share		$	12.67			$	12.37			$	11.61				9.1	%			2.5	%
Tangible book value per common share			12.08				11.77				11.00				9.8	%			2.6	%
Outstanding shares- period ending			4,741,068				4,741,720				4,646,238				2.0	%			(0.0	)%
Average diluted shares outstanding (year to date)			4,651,108				4,633,473				4,591,822				1.3	%			0.4	%
CAPITAL RATIOS:
Total equity to total assets			7.09	%			7.25	%			7.88	%			(10.0	)%			(2.2	)%
Leverage ratio (c)			10.41	%			8.98	%			9.45	%			10.2	%			15.9	%
Tier 1 risk-based capital ratio (c)			12.87	%			11.02	%			11.74	%			9.6	%			16.8	%
Total risk-based capital ratio (c)			13.86	%			11.99	%			12.79	%			8.4	%			15.6	%
Common equity Tier 1 capital ratio (c)			12.87	%			11.02	%			11.74	%			9.6	%			16.8	%
ASSET QUALITY:
Non-accrual loans		$	5,833			$	4,583			$	5,312				9.8	%			27.3	%
Loans 90 days past due and still accruing			468				386				-				-	%			21.2	%
Troubled debt restructured loans ("TDRs") (d)			679				1,142				1,553				(56.3	)%			(40.5	)%
Foreclosed real estate			2,367				3,005				3,354				(29.4	)%			(21.2	)%
Non-performing assets ("NPAs")		$	9,347			$	9,116			$	10,219				(8.5	)%			2.5	%
Foreclosed real estate, criticized and classified assets		$	20,450			$	19,777			$	20,778				(1.6	)%			3.4	%
Loans past due 30 to 89 days		$	1,840			$	7,580			$	2,823				(34.8	)%			(75.7	)%
(Recoveries) Charge-offs, net (quarterly)		$	(128	)		$	115			$	181				(170.7	)%			(211.3	)%
(Recoveries) Charge-offs, net as a % of average loans (annualized)			(0.08	)%			0.07	%			0.14	%			(154.2	)%			(206.8	)%
Non-accrual loans to total loans			0.84	%			0.69	%			0.98	%			(14.2	)%			21.4	%
NPAs to total assets			1.10	%			1.13	%			1.49	%			(26.1	)%			(2.1	)%
NPAs excluding TDR loans (d) to total assets			1.02	%			0.99	%			1.27	%			(19.2	)%			3.8	%
Non-accrual loans to total assets			0.69	%			0.57	%			0.78	%			(11.3	)%			21.6	%
Allowance for loan losses as a % of non-accrual loans			114.80	%			138.14	%			105.23	%			9.1	%			(16.9	)%
Allowance for loan losses to total loans			0.96	%			0.95	%			1.03	%			(6.4	)%			0.9	%

 

(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) Efficiency ratio calculated non-interest expense divided by net interest income plus non-interest income

(c) Sussex Bank capital ratios

(d) Troubled debt restructured loans currently performing in accordance with renegotiated terms                                  

  

 

SUSSEX BANCORP

CONSOLIDATED BALANCE SHEETS

(Dollars In Thousands)

 

ASSETS		December 31, 2016				December 31, 2015
Cash and due from banks		$	2,847			$	2,914
Interest-bearing deposits with other banks			11,791				3,206
Cash and cash equivalents			14,638				6,120
Interest bearing time deposits with other banks			100				100
Securities available for sale, at fair value			88,611				93,776
Securities held to maturity			11,618				6,834
Federal Home Loan Bank Stock, at cost			5,106				5,165
Loans receivable, net of unearned income			695,257				543,423
Less:  allowance for loan losses			6,696				5,590
Net loans receivable			688,561				537,833
Foreclosed real estate			2,367				3,354
Premises and equipment, net			8,728				8,879
Accrued interest receivable			2,058				1,764
Goodwill			2,820				2,820
Bank-owned life insurance			16,532				12,524
Other assets			5,942				5,334
Total Assets		$	847,081			$	684,503
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing		$	132,434			$	87,209
Interest bearing			528,487				430,647
Total Deposits			660,921				517,856
Borrowings			95,805				95,650
Accrued interest payable and other liabilities			2,443				4,169
Subordinated debentures			27,840				12,887
Total Liabilities			787,009				630,562
Total Stockholders' Equity			60,072				53,941
Total Liabilities and Stockholders' Equity		$	847,081			$	684,503

 

 

SUSSEX BANCORP

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Dollars In Thousands Except Per Share Data)

(Unaudited)

 

		Three Months Ended December 31,								Year Ended December 31,
		2016				2015				2016				2015
INTEREST INCOME
Loans receivable, including fees		$	7,287			$	5,660			$	26,862			$	21,497
Securities:
Taxable			327				349				1,443				1,239
Tax-exempt			240				239				832				899
Interest bearing deposits			6				1				23				9
Total Interest Income			7,860				6,249				29,160				23,644
INTEREST EXPENSE
Deposits			619				470				2,449				1,772
Borrowings			529				426				1,922				1,576
Junior subordinated debentures			125				58				391				220
Total Interest Expense			1,273				954				4,762				3,568
Net Interest Income			6,587				5,295				24,398				20,076
PROVISION FOR LOAN LOSSES			237				130				1,291				636
Net Interest Income after Provision for Loan Losses			6,350				5,165				23,107				19,440
OTHER INCOME
Service fees on deposit accounts			249				250				975				906
ATM and debit card fees			190				203				767				776
Bank owned life insurance			82				78				307				313
Insurance commissions and fees			946				840				4,796				3,686
Investment brokerage fees			8				27				75				130
Gain on securities transactions			83				4				444				271
(Loss) on disposal of fixed assets			-				(138	)			(19	)			(130	)
Other			147				132				484				501
Total Other Income			1,705				1,396				7,829				6,453
OTHER EXPENSES
Salaries and employee benefits			3,406				3,018				13,078				11,506
Occupancy, net			460				421				1,859				1,751
Data processing			482				402				2,108				1,653
Furniture and equipment			229				220				993				865
Advertising and promotion			57				101				311				326
Professional fees			218				174				788				654
Director fees			72				126				450				544
FDIC assessment			129				78				508				446
Insurance			67				82				280				271
Stationary and supplies			42				43				191				197
Loan collection costs			31				32				140				207
Expenses and write-downs related to foreclosed real estate			141				59				458				535
Other			392				442				1,421				1,598
Total Other Expenses			5,726				5,198				22,585				20,553
Income before Income Taxes			2,329				1,363				8,351				5,340
INCOME TAX EXPENSE			806				450				2,828				1,640
Net Income		$	1,523			$	913			$	5,523			$	3,700
OTHER COMPREHENSIVE INCOME (LOSS):
Unrealized (losses) gains on available for sale securities arising during the period		$	(2,928	)		$	(40	)		$	(942	)		$	134
Fair value adjustments on derivatives			3,006				-				1,647				-
Reclassification adjustment for net gain on securities transactions included in net income			(83	)			(4	)			(444	)			(271	)
Income tax related to items of other comprehensive income (loss)			2				17				(104	)			54
Other comprehensive income (loss), net of income taxes			(3	)			(27	)			157				(83	)
Comprehensive income		$	1,520			$	886			$	5,680			$	3,617
EARNINGS PER SHARE
Basic		$	0.33			$	0.20			$	1.20			$	0.81
Diluted		$	0.32			$	0.20			$	1.19			$	0.81

 

 

SUSSEX BANCORP

COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES

(Dollars In Thousands)

(Unaudited)

 

		Three Months Ended December 31,
		2016												2015
		Average								Average				Average								Average
		Balance				Interest				Rate (2)				Balance				Interest				Rate (2)
Earning Assets:
Securities:
Tax exempt (3)		$	38,186			$	357				3.71	%		$	35,581			$	358				3.99	%
Taxable			66,336				327				1.96	%			70,262				349				1.97	%
Total securities			104,522				684				2.60	%			105,843				707				2.65	%
Total loans receivable (1) (4)			680,064				7,287				4.25	%			521,047				5,660				4.31	%
Other interest-earning assets			10,292				6				0.23	%			6,259				1				0.06	%
Total earning assets			794,878				7,977				3.98	%			633,149				6,368				3.99	%
Non-interest earning assets			40,240												37,462
Allowance for loan losses			(6,551	)											(5,636	)
Total Assets		$	828,567											$	664,975
Sources of Funds:
Interest bearing deposits:
NOW		$	153,845			$	84				0.22	%		$	136,156			$	65				0.19	%
Money market			43,430				43				0.39	%			20,121				12				0.24	%
Savings			136,274				72				0.21	%			137,017				70				0.20	%
Time			179,629				420				0.93	%			125,877				323				1.02	%
Total interest bearing deposits			513,178				619				0.48	%			419,171				470				0.44	%
Borrowed funds			106,395				529				1.97	%			78,720				426				2.15	%
Subordinated debentures			14,354				125				3.45	%			12,887				58				1.79	%
Total interest bearing liabilities			633,927				1,273				0.80	%			510,778				954				0.74	%
Non-interest bearing liabilities:
Demand deposits			131,098												96,772
Other liabilities			3,460												3,618
Total non-interest bearing liabilities			134,558												100,390
Stockholders' equity			60,082												53,807
Total Liabilities and Stockholders' Equity		$	828,567											$	664,975
Net Interest Income and Margin (5)							6,704				3.35	%							5,414				3.39	%
Tax-equivalent basis adjustment							(117	)											(119	)
Net Interest Income						$	6,587											$	5,295

 

(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)

 

		Year Ended December 31,
		2016												2015
		Average								Average				Average								Average
		Balance				Interest				Rate (2)				Balance				Interest				Rate (2)
Earning Assets:
Securities:
Tax exempt (3)		$	32,359			$	1,247				3.85	%		$	33,688			$	1,348				4.00	%
Taxable			69,225				1,443				2.08	%			65,402				1,239				1.89	%
Total securities			101,584				2,690				2.65	%			99,090				2,587				2.61	%
Total loans receivable (1) (4)			625,399				26,862				4.30	%			488,963				21,497				4.40	%
Other interest-earning assets			9,440				23				0.24	%			7,109				9				0.13	%
Total earning assets			736,423				29,575				4.02	%			595,162				24,093				4.05	%
Non-interest earning assets			40,106												37,834
Allowance for loan losses			(6,059	)											(5,698	)
Total Assets		$	770,470											$	627,298
Sources of Funds:
Interest bearing deposits:
NOW		$	145,659			$	313				0.21	%		$	130,569			$	227				0.17	%
Money market			37,046				148				0.40	%			17,287				35				0.20	%
Savings			137,696				286				0.21	%			139,120				282				0.20	%
Time			162,864				1,702				1.05	%			119,256				1,228				1.03	%
Total interest bearing deposits			483,265				2,449				0.51	%			406,232				1,772				0.44	%
Borrowed funds			93,974				1,922				2.05	%			65,600				1,576				2.40	%
Subordinated debentures			13,256				391				2.95	%			12,887				220				1.71	%
Total interest bearing liabilities			590,495				4,762				0.81	%			484,719				3,568				0.74	%
Non-interest bearing liabilities:
Demand deposits			117,927												86,016
Other liabilities			4,530												3,848
Total non-interest bearing liabilities			122,457												89,864
Stockholders' equity			57,518												52,715
Total Liabilities and Stockholders' Equity		$	770,470											$	627,298
Net Interest Income and Margin (5)							24,813				3.37	%							20,525				3.45	%
Tax-equivalent basis adjustment							(415	)											(449	)
Net Interest Income						$	24,398											$	20,076

 

(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

          Segment Reporting

          (Dollars In Thousands)

          (Unaudited)

 

		Three Months Ended December 31, 2016												Three Months Ended December 31, 2015
		Banking and												Banking and
		Financial				Insurance								Financial				Insurance
		Services				Services				Total				Services				Services				Total
Net interest income from external sources		$	6,587			$	-			$	6,587			$	5,295			$	-			$	5,295
Other income from external sources			759				946				1,705				546				850				1,396
Depreciation and amortization			274				5				279				247				5				252
Income before income taxes			2,234				95				2,329				1,294				69				1,363
Income tax expense (1)			768				38				806				422				28				450
Total assets			842,056				5,025				847,081				679,598				4,905				684,503

 

		Year Ended December 31, 2016												Year Ended December 31, 2015
		Banking and												Banking and
		Financial				Insurance								Financial				Insurance
		Services				Services				Total				Services				Services				Total
Net interest income from external sources		$	24,398			$	-			$	24,398			$	20,076			$	-			$	20,076
Other income from external sources			3,033				4,796				7,829				2,741				3,712				6,453
Depreciation and amortization			1,090				26				1,116				978				20				998
Income before income taxes			7,152				1,199				8,351				4,670				670				5,340
Income tax expense (1)			2,348				480				2,828				1,372				268				1,640
Total assets			842,056				5,025				847,081				679,598				4,905				684,503

 

⁽¹⁾ Calculated at statutory tax rate of 40%