FRANKLIN, N.J., April 19, 2007 (PRIME NEWSWIRE) -- Sussex Bancorp (Nasdaq:SBBX) today announced its financial results for the first quarter ended March 31, 2007. Highlights included:
* A 21.5% increase in net income;
* A 21.1% increase in earnings per share;
* A 17.8% increase in net loans year over year;
* The early adoption of SFAS 159 and a restructuring of
the Company's investment securities portfolio to enhance
the yield on the portfolio.
For the quarter ended March 31, 2007, the Company earned net income of $724,000, an increase of approximately 21.5 percent over net income of $596,000 for the first quarter of 2006. Basic and diluted earnings per share for the first quarter of 2007 were $0.23, a $0.04 increase over the $0.19 basic and diluted earnings per share that were reported for the first quarter of 2006.
The Company's net interest income decreased $66 thousand, or 2.3%, to $2.8 million for the quarter ended March 31, 2007 from $2.9 million for the first quarter of 2006. The Company's interest income increased $811 thousand to $5.4 million for the three months ended March 31, 2007 from $4.6 million for the first quarter of 2006. However, the Company's interest expense increased $877 thousand to $2.5 million for the first quarter of 2007 from $1.7 million for the first quarter of 2006. The increase in interest expense reflects both an increase in the average balance of interest bearing deposits and an increase in the average rate paid on interest bearing deposits, reflecting the continued competitive market for deposits in the Company's trade area.
The Company's non-interest income increased to $1.6 million for the quarter ended March 31, 2007 from $1.3 million for the first quarter of 2006, offsetting the decline in net interest income. The increase in non-interest income is attributable to increased insurance commissions and brokerage fees on the sale of non-deposit products.
The Company's total deposits increased to $294.0 million at March 31, 2007 from $272.4 million at March 31, 2006. The Company's total loans increased $41.1 million to $270.7 million at March 31, 2007 from $229.6 million at March 31, 2006. At March 31, 2007 the Company had total assets of $357.3 million, compared to total assets of $326.4 million at March 31, 2006. The loan loss provision for the first quarter of 2007 was $108 thousand compared to $216 thousand for the same period last year.
The Company also announced that effective January 1, 2007 it elected to early adopt Statement of Financial Accounting Standards ("SFAS") No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities", including an amendment of FASB Statement No. 115 and No. 157 Fair Value Measurements. SFAS No. 159, which was issued in February 2007, generally permits the measurement of selected eligible financial instruments at fair value at specified election dates. Upon adoption, the Company identified approximately $14.3 million in securities with lower yields from the available for sale portfolio. Prior to the adoption of SFAS No. 159, the Company intended to hold these securities until a market price recovery or possibly to maturity. The initial fair value measurement of these items resulted in an approximately $262,000 cumulative-effect adjustment, net of tax, recorded as a reduction in retained earnings as of January 1, 2007. Under SFAS No. 159, this adjustment will not be recognized in current earnings. This charge to retained earnings has no overall impact on total shareholders' equity because the fair value adjustment had previously been included as an element of shareholders' equity in the accumulated other comprehensive loss account. The Company recorded an unrealized fair market value trading gain of $46 thousand in the first quarter of 2007 upon adoption of SFAS 159. The Company anticipates selling these securities during the second quarter of 2007. The Company also anticipates using the proceeds to purchase securities with an average yield of 5.20%, which should increase the Company's interest income from its investment portfolio by $182 thousand per year starting in the second quarter of 2007.
Sussex Bancorp also announced that its Board of Directors declared a cash dividend of $0.07 per share, payable on May 25, 2007 to shareholders of record as of May 6, 2007.
Sussex Bancorp is the holding company for Sussex Bank, which operates through its main office in Franklin, New Jersey and branch offices in Andover, Augusta, Newton, Montague, Sparta, Vernon and Wantage, New Jersey, Port Jervis and Warwick, New York and for the Tri-State Insurance Agency, Inc., a full service insurance agency located in Sussex County, New Jersey.
SUSSEX BANCORP
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)
March 31, December 31,
2007 2006 2006
-------- -------- --------
ASSETS (Unaudited) (Unaudited)
------
Cash and due from banks $ 7,783 $ 10,742 $ 10,170
Federal funds sold 2,665 11,780 11,995
-------- -------- --------
Cash and cash equivalents 10,448 22,522 22,165
Interest bearing time deposits
with other banks 100 500 100
Trading assets 13,476 -- --
Securities available for sale 44,945 58,354 54,635
Federal Home Loan Bank Stock,
at cost 1,277 890 1,188
Loans receivable, net of
unearned income 270,740 229,614 262,276
Less: allowance for
loan losses 3,428 2,824 3,340
-------- -------- --------
Net loans receivable 267,312 226,790 258,936
Premises and equipment, net 8,172 6,688 7,794
Accrued interest receivable 1,685 1,439 1,910
Goodwill 2,820 2,820 2,820
Other assets 7,017 6,384 6,749
-------- -------- --------
Total Assets $357,252 $326,387 $356,297
======== ======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
--------------------
Liabilities:
Deposits:
Non-interest bearing $ 37,215 $ 51,978 $ 40,083
Interest bearing 256,696 220,456 255,687
-------- -------- --------
Total Deposits 293,911 272,434 295,770
Borrowings 20,239 13,288 18,251
Accrued interest payable and
other liabilities 2,708 2,156 2,529
Junior subordinated debentures 5,155 5,155 5,155
-------- -------- --------
Total Liabilities 322,013 293,033 321,705
Total Stockholders' Equity 35,239 33,354 34,592
-------- -------- --------
Total Liabilities and
Stockholders' Equity $357,252 $326,387 $356,297
======== ======== ========
SUSSEX BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands Except Per Share Data)
(Unaudited)
Three Months Ended
March 31,
-------------------
2007 2006
------ ------
INTEREST INCOME
Loans receivable, including fees $4,653 $3,813
Securities:
Taxable 396 353
Tax-exempt 250 261
Federal funds sold 92 149
Interest bearing deposits 1 5
------ ------
Total Interest Income 5,392 4,581
------ ------
INTEREST EXPENSE
Deposits 2,208 1,372
Borrowings 222 191
Junior subordinated debentures 113 103
------ ------
Total Interest Expense 2,543 1,666
------ ------
Net Interest Income 2,849 2,915
PROVISION FOR LOAN LOSSES 108 216
------ ------
Net Interest Income after
Provision for Loan Losses 2,741 2,699
------ ------
OTHER INCOME
Service fees on deposit accounts 319 320
ATM fees 87 82
Insurance commissions and fees 854 733
Investment brokerage fees 157 52
Other 169 104
------ ------
Total Other Income 1,586 1,291
------ ------
OTHER EXPENSES
Salaries and employee benefits 1,782 1,639
Occupancy, net 313 271
Furniture, equipment and data processing 338 278
Stationary and supplies 46 51
Professional fees 139 178
Advertising and promotion 104 185
Insurance 46 58
Postage and freight 40 52
Amortization of intangible assets 37 33
Other 395 384
------ ------
Total Other Expenses 3,240 3,129
------ ------
Income before Income Taxes 1,087 861
PROVISION FOR INCOME TAXES 363 265
------ ------
Net Income $ 724 $ 596
====== ======
SUSSEX BANCORP
COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES
(Unaudited)
Three Months Ended March 31,
(Dollars in ---------------------------------------------------
thousands) 2007 2006
---------------------------------------------------------------------
Average Average
Interest earning Average Interest Rate Average Interest Rate
assets: Balance (a) (b) Balance (a) (b)
---------------------------------------------------------------------
Securities:
Tax exempt(c) $ 23,640 $ 328 5.63% $ 24,178 $ 356 5.96%
Taxable 34,149 396 4.70% 36,546 353 3.92%
---------------------------------------------------------------------
Total securities 57,789 724 5.08% 60,724 709 4.73%
Total loans
receivable (d) 266,252 4,653 7.09% 219,172 3,813 7.06%
Other interest-
earning assets 6,819 93 5.53% 14,220 154 4.41%
---------------------------------------------------------------------
Total interest
earning assets 330,860 $5,470 6.70% 294,116 $4,676 6.45%
Non-interest
earning assets 27,298 24,768
Allowance for
loan losses (3,385) (2,707)
-------- --------
Total Assets $354,773 $316,177
======== ========
Interest bearing
liabilities:
Interest bearing
deposits:
NOW $ 57,140 $ 314 2.23% $48,402 $ 201 1.68%
Money market 35,400 343 3.92% 27,663 241 3.54%
Savings 39,884 90 0.91% 50,798 103 0.82%
Time 124,130 1,462 4.78% 92,147 827 3.64%
---------------------------------------------------------------------
Total interest
bearing
deposits 256,554 2,208 3.49% 219,010 1,372 2.54%
Borrowed
funds 18,777 222 4.72% 16,192 191 4.72%
Junior sub-
ordinated
debentures 5,155 113 8.74% 5,155 103 7.97%
---------------------------------------------------------------------
Total interest
bearing
liabilities 280,486 $2,543 3.68% 240,357 $1,666 2.81%
Non-interest bearing
liabilities:
Demand deposits 37,294 40,491
Other
liabilities 2,159 2,084
-------- --------
Total non-
interest
bearing
liabilities 39,453 42,575
Stockholders'
equity 34,834 33,245
-------- --------
Total
Liabilities
and Stock-
holders'
Equity $354,773 $316,177
======== ========
Net Interest
Income and -------------- --------------
Margin (e) $2,927 3.59% $3,010 4.15%
============== ==============
(a) Includes loan fee income
(b) Average rates on securities are calculated on amortized costs
(c) Full taxable equivalent basis, using a 39% effective tax rate
and adjusted for TEFRA (Tax and Equity Fiscal Responsibility Act)
interest expense disallowance
(d) Loans outstanding include non-accrual loans
(e) Represents the difference between interest earned and interest
paid, divided by average total interest-earning assets