EX-99.1 3 ex99-1.htm EXHIBIT 99.1 ex99-1.htm
EXHIBIT 99.1

Sussex Bancorp
200 Munsonhurst Road, Rt. 517
Franklin, NJ 07416
973-827-2914
 
FOR IMMEDIATE RELEASE 
 
SUSSEX BANCORP ANNOUNCES THIRD QUARTER AND NINE MONTHS EARNINGS
---
DECLARES $0.07 CASH DIVIDEND

FRANKLIN, NEW JERSEY– October 18, 2007– 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.

 
 
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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 Director’s 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) 
                   
ASSETS
  
September 30, 2007
    
September 30, 2006
    
December 31, 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
  


 
-20-
 


SUSSEX BANCORP
  
CONSOLIDATED STATEMENTS OF INCOME
  
(Dollars In Thousands Except Per Share Data)
  
(Unaudited)
  
                         
   
Three Months Ended September 30,
    
Nine Months Ended 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
  

 

 
-21-
 
 
SUSSEX BANCORP
COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES
(Dollars In Thousands)
(Unaudited)
                                     
   
Nine Months Ended September 30,
  
   
2007
    
2006
  
   
Average
          
Average
    
Average
          
Average
  
Earning Assets:
  
Balance
    
Interest (1)
    
Rate (2)
    
Balance
    
Interest (1)
    
Rate (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
  

 
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