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, N.J., Jan. 26, 2017 (GLOBE NEWSWIRE) -- 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 led 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.

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)
     
ASSETSDecember 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%                 

            

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