FRANKLIN, N.J., Oct. 18, 2007 (PRIME NEWSWIRE) -- Sussex Bancorp (Nasdaq:SBBX) today announced its financial results for the third quarter and nine months ending September 30, 2007.
For the quarter ended September 30, 2007, the Company earned net income of $533,000 compared to net income of $578,000 reported for the third quarter of 2006. For the nine months ended September 30, 2007, the Company earned net income of $1,551,000 compared to net income of $1,826,000 reported for the same period last year. Basic earnings per share for the three and nine months ended September 30, 2007 were $0.17 and $0.49 respectively, compared to $0.18 and $0.58 for the respective comparable periods of 2006. Diluted earnings per share were $0.17 and $0.49 respectively for the three and nine months ended September 30, 2007, compared to $0.18 and $0.57 for the respective comparable periods of 2006. The decline in net income and earnings per share reflects continued pressure on the Company's net interest margin, as well as an increase in the Company's provision for loan losses.
The Company's net interest income increased to $2,911,000 for the quarter ended September 30, 2007 from $2,852,000 for the third quarter of 2006. The Company's interest income increased to $5,926,000 for the quarter ended September 30, 2007 from $5,123,000 for the third quarter of 2006. The increase in interest income reflects an increase of $47.4 million in earning assets over the third quarter of 2006. The Company's interest expense increased to $3,015,000 for the three months ended September 30, 2007 from $2,271,000 for the third quarter of 2006. During 2007 the Company offered competitive time deposits as part of management's overall strategy to fund new loan originations from deposits rather than borrowed funds. For the nine months ended September 30, 2007, the Company's net interest income decreased to $8,654,000 from the $8,818,000 earned for the same period last year, as the Company's interest expense increased more rapidly than its interest income. For the nine months ended September 30, 2007, the Company's interest income increased to $16,931,000 from $14,580,000 for the period ended September 30, 2006, as the Company's average earning assets increased by $43.0 million and its yield on earning assets increased by 8 basis points. The Company's interest expense increased from $5,762,000 for the nine months ended September 30, 2006 to $8,277,000 for the current nine month period. The Company's average deposits increased by $40.5 million in the first nine months of 2007 compared to the prior year, and the Company's cost of interest bearing liabilities increased by 63 basis points.
The loan loss provision for the third quarter was $324,000 compared to $117,000 for the same period last year. For the nine month period, the provision increased by $306,000, to $868,000. The increases in the provision in both the three and nine month periods reflect an increase in the Company's non-performing assets and potential problem loans. At September 30, 2007, non-performing assets totaled $7,865,000 compared to $2,871,000 at September 30, 2006. In addition, at September 30, 2007, the Company had $3.4 million in loans that, due to current market conditions, caused management to have concerns regarding the borrowers' continued ability to comply with their loan documents.
At September 30, 2007 the Company had total assets of $391.9 million, compared to total assets of $346.5 million at September 30, 2006. The Company's total loans increased $39.7 million to $293.9 million at September 30, 2007 from $254.2 million at September 30, 2006.
The Company experienced increases in non-interest income in both the current quarter and year to date periods compared to 2006. The Company reported non-interest income of $1,468,000 and $4,289,000 for the current three and nine month periods, respectively, compared to non-interest income of $1,299,000 and $3,959,000 for the three and nine month periods ending September 30, 2006. The increases reflect holding gains on trading securities of $194,000 and $192,000 in the three and nine month periods, respectively, due the adoption of FAS 159 on January 1, 2007.
The Company's other expenses increased in the three and nine month periods of 2007 compared to the prior year periods. For the three month period ending September 30, 2007 other expenses increased by $94,000, or 3.0%, while other expenses increased by $312,000, or 3.3%, for the nine months ended September 30, 2007 compared to the prior year periods.
Sussex Bancorp also announced that its Board of Directors declared a cash dividend of $0.07 per share, payable November 26, 2007 to shareholders of record as of November 5, 2007.
Sussex Bancorp is the holding company for Sussex Bank, which operates through its eight New Jersey offices and two Orange County offices 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)
(Unaudited)
Sept. 30, Sept. 30, Dec. 31,
ASSETS 2007 2006 2006
------ --------------------------------
Cash and due from banks $ 10,056 $ 12,958 $ 10,170
Federal funds sold 11,255 3,110 11,995
--------- --------- ---------
Cash and cash equivalents 21,311 16,068 22,165
Interest bearing time
deposits with other banks 100 100 100
Trading securities 11,865 -- --
Securities available for sale 46,248 59,632 54,635
Federal Home Loan
Bank Stock, at cost 1,358 964 1,188
Loans receivable, net
of unearned income 293,906 254,211 262,276
Less: allowance
for loan losses 4,098 3,166 3,340
--------- --------- ---------
Net loans receivable 289,808 251,045 258,936
Premises and equipment, net 8,897 7,484 7,794
Accrued interest receivable 2,046 1,638 1,910
Goodwill 2,820 2,820 2,820
Other assets 7,481 6,760 6,749
--------- --------- ---------
Total Assets $391,934 $346,511 $356,297
========= ========== =========
LIABILITIES AND
STOCKHOLDERS' EQUITY
---------------------
Liabilities:
Deposits:
Non-interest bearing $ 38,315 $ 42,147 $ 40,083
Interest bearing 282,116 249,408 255,687
--------- --------- ---------
Total Deposits 320,431 291,555 295,770
Borrowings 20,213 13,264 18,251
Accrued interest payable
and other liabilities 3,158 2,422 2,529
Junior subordinated
debentures 12,887 5,155 5,155
--------- --------- ---------
Total Liabilities 356,689 312,396 321,705
Total Stockholders' Equity 35,245 34,115 34,592
--------- --------- ---------
Total Liabilities
and Stockholders' Equity $391,934 $346,511 $356,297
========= ========= =========
SUSSEX BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands Except Per Share Data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------------
2007 2006 2007 2006
------- ------- ------- -------
INTEREST INCOME
Loans receivable,
including fees $ 5,038 $ 4,374 $14,572 $12,404
Securities:
Taxable 439 365 1,239 1,067
Tax-exempt 255 263 762 783
Federal funds sold 193 120 354 315
Interest bearing deposits 1 1 4 11
------- ------- ------- -------
Total Interest Income 5,926 5,123 16,931 14,580
------- ------- ------- -------
INTEREST EXPENSE
Deposits 2,548 1,987 7,111 4,907
Borrowings 241 167 706 526
Junior subordinated
debentures 226 117 460 329
------- ------- ------- -------
Total Interest Expense 3,015 2,271 8,277 5,762
------- ------- ------- -------
Net Interest Income 2,911 2,852 8,654 8,818
PROVISION FOR LOAN LOSSES 324 117 868 562
------- ------- ------- -------
Net Interest Income
after Provision for
Loan Losses 2,587 2,735 7,786 8,256
------- ------- ------- -------
OTHER INCOME
Service fees on
deposit accounts 362 349 1,016 1,017
ATM and debit card fees 109 97 300 276
Insurance commissions
and fees 618 600 2,136 2,021
Investment brokerage fees 26 74 239 214
Holding gains on
trading securities 194 -- 192 --
Gain (loss) on sale
of securities,
available for sale 10 -- 10 --
Gain (loss) on sale
of fixed assets (1) -- (1) --
Other 150 179 397 431
------- ------- ------- -------
Total Other Income 1,468 1,299 4,289 3,959
------- ------- ------- -------
OTHER EXPENSES
Salaries and
employee benefits 1,792 1,759 5,403 5,154
Occupancy, net 319 280 932 810
Furniture, equipment
and data processing 372 300 1,066 875
Stationary and supplies 46 47 138 143
Professional fees 120 153 424 498
Advertising and promotion 174 110 415 440
Insurance 41 47 135 151
Postage and freight 36 52 124 164
Amortization of
intangible assets 15 40 78 113
Other 369 402 1,145 1,200
------- ------- ------- -------
Total Other Expenses 3,284 3,190 9,860 9,548
------- ------- ------- -------
Income before Income Taxes 771 844 2,215 2,667
PROVISION FOR INCOME TAXES 238 266 664 841
------- ------- ------- -------
Net Income $ 533 $ 578 $ 1,551 $ 1,826
======= ======= ======= =======
SUSSEX BANCORP
COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES
(Dollars In Thousands)
(Unaudited)
Nine Months Ended September 30,
2007 2006
------------------------- -------------------------
Average Average
Average Interest Rate Average Interest Rate
Earning Assets: Balance (1) (2) Balance (1) (2)
---------------------------------------------------
Securities:
Tax exempt (3) $ 24,083 $ 992 5.51% $ 24,258 $ 1,056 5.82%
Taxable 34,773 1,239 4.76% 35,647 1,067 4.00%
---------------------------------------------------
Total
securities 58,856 2,231 5.07% 59,905 2,123 4.74%
Total
loans
receivable (4) 278,102 14,572 7.01% 234,212 12,404 7.08%
Other
interest-earning
assets 9,283 358 5.16% 9,118 326 4.78%
---------------------------------------------------
Total earning
assets 346,241 $ 17,161 6.63% 303,235 $ 14,853 6.55%
Non-interest
earning
assets 28,420 25,713
Allowance for
loan losses (3,626) (2,910)
--------- ---------
Total Assets $371,035 $326,038
========= =========
Sources of Funds:
Interest
bearing
deposits:
NOW $ 59,130 $ 971 2.20% $ 55,333 $ 885 2.14%
Money market 38,379 1,097 3.82% 29,122 845 3.88%
Savings 38,860 264 0.91% 47,571 307 0.86%
Time 132,081 4,779 4.84% 95,957 2,870 4.00%
---------------------------------------------------
Total interest
bearing deposits 268,450 7,111 3.54% 227,983 4,907 2.88%
Borrowed funds 19,785 706 4.70% 14,274 526 4.86%
Junior
subordinated
debentures 8,052 460 7.54% 5,155 329 8.42%
---------------------------------------------------
Total interest
bearing
liabilities 296,287 $ 8,277 3.74% 247,412 $ 5,762 3.11%
Non-interest
bearing
liabilities:
Demand
deposits 37,454 43,242
Other
liabilities 2,252 1,902
--------- ---------
Total
non-interest
bearing
liabilities 39,706 45,144
Stockholders'
equity 35,042 33,482
--------- ---------
Total
Liabilities
and
Stockholders'
Equity $371,035 $326,038
========= =========
--------------- ----------------
Net Interest
Income
and Margin (5) $ 8,884 3.43% $ 9,091 4.01%
=============== ===============
(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