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Sussex Bancorp Reports Strong EPS Driven by Loan and Deposit Growth for the Second Quarter

ROCKAWAY, N.J., July 27, 2016 (GLOBE NEWSWIRE) -- Sussex Bancorp (the “Company”) (Nasdaq:SBBX), the holding company for Sussex Bank (the “Bank”), today announced a 26.3% increase in net income per diluted common share to $0.24 for the quarter ended June 30, 2016 as compared to $0.19 for the same period last year. Also, the Company announced a 45.0% increase in net income per diluted common share to $0.58 for the six months ended June 30, 2016 as compared to $0.40 for the same period last year. For the quarter ended June 30, 2016, the Company reported net income of $1.1 million, as compared to net income of $884 thousand for the same period last year. The improvement for the second quarter of 2016 as compared to the same period last year was mostly driven by a 17.3% increase in net interest income on a fully tax equivalent basis as a result of strong growth in average loans and deposits, which increased $132.1 million, or 27.8%, and $73.8 million, or 18.3%, respectively.

“Our principal business lines continue to generate outstanding results. As such, we produced another quarter of strong financial performance for Sussex Bancorp. In the second quarter our commercial loans and total deposits grew at an annualized rate of 46.7% and 13.6%, respectively, which, resulted in a substantial improvement in net interest income over the prior year. Our insurance company also increased its pretax earnings 271.4% as compared to the same quarter last year,” said Anthony Labozzetta, President and Chief Executive Officer of Sussex Bank.

Declaration of Quarterly Dividend
The Company’s Board of Directors declared a quarterly cash dividend of $0.04 per share, which is payable on August 24, 2016 to common shareholders of record as of the close of business on August 10, 2016.

Financial Performance
Net Income. For the quarter ended June 30, 2016, the Company reported net income of $1.1 million, or $0.24 per basic and diluted share, as compared to net income of $884 thousand, or $0.19 per basic and diluted share, for the same period last year. The increase in net income for the quarter ended June 30, 2016 was driven by an $872 thousand, or 17.3%, increase in net interest income on a fully tax equivalent basis resulting from strong loan and deposit growth and an increase in non-interest income of $325 thousand, mostly due to the performance of Tri-State Insurance Agency’s (“Tri-State”) insurance commissions and fees. The aforementioned was partially offset by an increase in non-interest expenses and an increase in provision for loan losses, which was largely due to loan growth. The increase in non-interest expenses was mostly due to higher salary and benefits, data processing costs and an increase in expenses and write-downs related to foreclosed real estate. The increase in salaries and employee benefits expense was mostly attributed to higher Tri-State salary and benefits expense related to Tri-State’s revenue growth. The increase in data processing was largely due to the costs associated with the outsourcing of our core processing systems.

Income before income taxes increased $352 thousand, or 26.9%, to $1.7 million for the three months ended June 30, 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 three months ended June 30, 2016 increased $76 thousand, or 271.4%, to $104 thousand as compared to $28 thousand for the same period last year. The increase in Tri-State’s contribution to the Company’s income before income taxes was mostly due to an increase in insurance commissions and fees for the three months ended June 30, 2016 of $303 thousand, or 41.2%, as compared to the same period last year. The Company’s income before income taxes, excluding Tri-State, increased $276 thousand, or 21.6%, to $1.6 million for the three months ended June 30, 2016 as compared to the same period last year.

For the six months ended June 30, 2016, the Company reported net income of $2.7 million, or $0.58 per diluted share, or a 45.0% increase, as compared to net income of $1.8 million, or $0.40 per diluted share, for the same period last year. The increase in net income for the six months ended June 30, 2016 was largely due to increases in net interest income of $1.7 million and non-interest income of $948 thousand, which were partially offset by an increase in non-interest expenses of $1.2 million. 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 outsourcing of its core processing systems.

Income before income taxes increased $1.4 million, or 52.1%, to $4.0 million for the six months ended June 30, 2016 as compared to $2.6 million for the same period last year. Tri-State’s contribution to the Company’s income before income taxes for the six months ended June 30, 2016 increased $512 thousand, or 119.6%, to $940 thousand as compared to $428 thousand for the same period last year. The increase in Tri-State’s contribution to the Company’s income before income taxes was mostly due to an increase in contingency fee income for the six months ended June 30, 2016 of $411 thousand, or 122.8%, and growth in insurance commissions and fees of $458 thousand as compared to the same period last year. The Company’s income before income taxes, excluding Tri-State, increased $861 thousand, or 39.1%, to $3.1 million for the six months ended June 30, 2016 as compared to the same period last year.

Net Interest Income. Net interest income on a fully tax equivalent basis increased $872 thousand, or 17.3%, to $5.9 million for the second quarter of 2016, as compared to $5.0 million for the same period in 2015. The increase in net interest income was largely due to a $133.3 million, or 22.9%, increase in average interest earning assets, principally loans receivable, which increased $132.1 million, or 27.8%. The improvement in net interest income was partly offset by a decline in the net interest margin of 16 basis points to 3.31% for the second quarter of 2016, as compared to the same period in 2015. The decline in the net interest margin was mostly attributed to a 19 basis point decrease in the average rate earned on loans, which is mostly due to loan growth and loan repricing in a low rate environment. Also included in the net interest margin decrease is a 9 basis point increase in the average rate on interest bearing deposits, which was primarily driven by market competition and an increase in wholesale funding.

Net interest income on a fully tax equivalent basis increased $1.7 million, or 17.2%, to $11.7 million for the first six months of 2016 as compared to $9.9 million for the same period in 2015. The increase in net interest income was largely due to a $117.6 million, or 20.5%, increase in average interest earning assets, principally loans receivable and the securities portfolio, which increased $110.6 million, or 23.4% and $6.0 million, or 6.4%, respectively. The Company’s net interest margin was 3.39% and 3.49% for the first six months of 2016 and 2015, respectively. The decline in net interest margin is due to loan growth and loan repricing in a low rate environment along with an increase in the average rate on interest bearing deposits, primarily driven by market competition and an increase in wholesale funding.

Provision for Loan Losses. Provision for loan losses increased $185 thousand, or 92.5%, to $385 thousand for the second quarter of 2016, as compared to $200 thousand for the same period in 2015.

Provision for loan losses increased $91 thousand, or 18.0%, to $596 thousand for the first six months of 2016, as compared to $505 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 $325 thousand, or 21.7%, to $1.8 million for the second quarter of 2016, as compared to the same period last year. The increase was primarily due to higher insurance commissions and fees, which increased $303 thousand, or 41.2%, for the second quarter of 2016 as compared to the same period in 2015.

The Company reported an increase in non-interest income of $948 thousand, or 27.9%, to $4.4 million for the first six months of 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 of $869 thousand. The growth in Tri-State’s commissions and fees was largely due to growth in contingency fee income of $411 thousand, or 122.8%, and growth in insurance commissions and fees of $458 thousand for the six months ended June 30, 2016 as compared to the same period last year.

Non-interest Expense. The Company’s non-interest expenses increased $676 thousand, or 13.7%, to $5.6 million for the second quarter of 2016, as compared to the same period last year. The increase for the second quarter of 2016, as compared to the same period in 2015, was largely due to increases in salaries and employee benefits of $287 thousand, data processing of $119 thousand and expenses and write-downs related to foreclosed real estate of $109 thousand.

The Company’s non-interest expenses increased $1.2 million, or 12.2%, to $11.2 million for the first six months of 2016 as compared to the same period last year. The increase for the first six months of 2016, as compared to the same period in 2015, was largely due to increases in salaries and employee benefits of $860 thousand and data processing of $314 thousand.

The increase in salaries and employee benefits for the second quarter and first six months of 2016 as compared to the same periods in 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 its core processing systems and higher costs related to the Company’s growth and introduction of new products and services during 2016.

Financial Condition
At June 30, 2016, the Company’s total assets were $789.8 million, an increase of $105.3 million, or 15.4%, 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 $96.8 million, or 17.8%.

Total loans receivable, net of unearned income, increased $96.8 million, or 17.8%, to $640.2 million at June 30, 2016, as compared to $543.4 million at December 31, 2015. During the six months ended June 30, 2016, the Company had $112.3 million in commercial loan production, which was partly offset by $6.2 million in commercial loan payoffs.

The Company’s total deposits increased $76.9 million, or 14.9%, to $594.8 million at June 30, 2016, from $517.9 million at December 31, 2015. The growth in deposits was due to increases in both interest bearing deposits of $43.2 million, or 10.0%, and non-interest bearing deposits of $33.7 million, or 38.7%, at June 30, 2016, as compared to December 31, 2015. Additionally there was an increase in borrowings of $23.2 million, or 24.3%, to $118.9 million at June 30, 2016 from $95.7 million at December 31, 2015 due to substantial loan growth. Included in the aforementioned deposit total is $41.7 million in deposit balances with a cost of 0.61% attributed to our newest branch in Oradell, New Jersey, which opened in the beginning of March, 2016. Also, included is $63.0 million in deposit balances with a cost of 0.44% attributed to our branch in Astoria, New York, which opened in Mid-March of 2015.

At June 30, 2016, the Company’s total stockholders’ equity was $56.9 million, an increase of $2.9 million when compared to December 31, 2015. The increase was largely due to net income for the six months ended June 30, 2016. At June 30, 2016, the leverage, Tier I risk-based capital, total risk-based capital and common equity Tier I capital ratios for the Bank were 8.75%, 10.50%, 11.46% and 10.50%, respectively, all in excess of the ratios required to be deemed “well-capitalized.”

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 1.13% at June 30, 2016 from 1.49% at December 31, 2015. NPAs decreased $1.2 million, or 11.5%, to $8.9 million at June 30, 2016, as compared to $10.2 million at December 31, 2015. Non-accrual loans decreased $662 thousand, or 12.5%, to $4.7 million at June 30, 2016, as compared to $5.3 million at December 31, 2015. The top five non-accrual loan relationships total $3.0 million, which equates to 64.8% of total non-accrual loans and 34.3% of total NPAs at June 30, 2016. The remaining non-accrual loans at June 30, 2016 have an average loan balance of $86 thousand. Loans past due 30 to 89 days increased $2.1 million, or 76.0%, to approximately $5.0 million at June 30, 2016, as compared to $2.8 million at December 31, 2015.

The Company continues to actively market its foreclosed real estate properties, which decreased $352 thousand to $3.0 million at June 30, 2016, as compared to $3.4 million at December 31, 2015. At June 30, 2016, the Company’s foreclosed real estate properties had an average carrying value of approximately $334 thousand per property.

The allowance for loan losses increased by $398 thousand, or 7.1%, to $6.0 million, or 0.94% of total loans, at June 30, 2016, compared to $5.6 million, or 1.03% of total loans, at December 31, 2015. The Company recorded $596 thousand in provision for loan losses for the six months ended June 30, 2016. Additionally, the Company recorded net charge-offs of $198 thousand for the six months ended June 30, 2016, as compared to $394 thousand in net charge-offs for the six months ended June 30, 2015. The allowance for loan losses as a percentage of non-accrual loans increased to 128.8% at June 30, 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)
6/30/2016 VS.
6/30/2016 12/31/2015 6/30/2015 6/30/2015 12/31/2015
BALANCE SHEET HIGHLIGHTS - Period End Balances
Total securities $ 100,457 $ 100,610 $ 99,861 0.6 % (0.2)%
Total loans 640,187 543,423 479,069 33.6 % 17.8 %
Allowance for loan losses (5,988) (5,590) (5,752) 4.1 % 7.1 %
Total assets 789,812 684,503 619,997 27.4 % 15.4 %
Total deposits 594,824 517,856 487,718 22.0 % 14.9 %
Total borrowings and junior subordinated debt 131,762 108,537 76,087 73.2 % 21.4 %
Total shareholders' equity 56,886 53,941 51,679 10.1 % 5.5 %
FINANCIAL DATA - QUARTER ENDED:
Net interest income (tax equivalent) (a) $ 5,911 $ 5,414 $ 5,039 17.3 % 9.2 %
Provision for loan losses 385 130 200 92.5 % 196.2 %
Total other income 1,826 1,396 1,501 21.7 % 30.8 %
Total other expenses 5,598 5,198 4,922 13.7 % 7.7 %
Income before provision for income taxes (tax equivalent) 1,754 1,482 1,418 23.7 % 18.4 %
Provision for income taxes 551 450 424 30.0 % 22.4 %
Taxable equivalent adjustment (a) 94 119 110 (14.5)% (21.0)%
Net income $ 1,109 $ 913 $ 884 25.5 % 21.5 %
Net income per common share - Basic $ 0.24 $ 0.20 $ 0.19 26.3 % 20.0 %
Net income per common share - Diluted $ 0.24 $ 0.20 $ 0.19 26.3 % 20.0 %
Return on average assets 0.59 % 0.55 % 0.58 % 2.8 % 7.8 %
Return on average equity 7.85 % 6.79 % 6.76 % 16.1 % 15.7 %
Efficiency ratio (b) 73.24 % 77.69 % 76.55 % (4.3)% (5.7)%
Net interest margin (tax equivalent) 3.31 % 3.39 % 3.47 % (4.6)% (2.4)%
Avg. interest earning assets/Avg. interest bearing liabilities 1.25 1.24 1.23 1.8 % 0.9 %
FINANCIAL DATA - YEAR TO DATE:
Net interest income (tax equivalent) (a) $ 11,656 $ 9,945 17.2 %
Provision for loan losses 596 505 18.0 %
Total other income 4,350 3,402 27.9 %
Total other expenses 11,208 9,992 12.2 %
Income before provision for income taxes (tax equivalent) 4,202 2,850 47.4 %
Provision for income taxes 1,326 800 65.8 %
Taxable equivalent adjustment (a) 193 214 (9.8)%
Net income $ 2,683 $ 1,836 46.1 %
Net income per common share - Basic $ 0.59 $ 0.40 47.5 %
Net income per common share - Diluted $ 0.58 $ 0.40 45.0 %
Return on average assets 0.74 % 0.61 % 22.2 %
Return on average equity 9.60 % 7.04 % 36.4 %
Efficiency ratio (b) 70.88 % 76.08 % (6.8)%
Net interest margin (tax equivalent) 3.39 % 3.49 % (2.9)%
Avg. interest earning assets/Avg. interest bearing liabilities 1.24 1.21 2.1 %
SHARE INFORMATION:
Book value per common share $ 12.15 $ 11.61 $ 11.12 9.3 % 4.7 %
Tangible book value per common share 11.55 11.00 10.52 9.8 % 5.0 %
Outstanding shares- period ending 4,680,697 4,646,238 4,646,388 0.7 % 0.7 %
Average diluted shares outstanding (year to date) 4,610,176 4,591,822 4,597,077 0.3 % 0.4 %
CAPITAL RATIOS:
Total equity to total assets 7.20 % 7.88 % 8.34 % (13.6)% (8.6)%
Leverage ratio (c) 8.75 % 9.45 % 9.85 % (11.2)% (7.4)%
Tier 1 risk-based capital ratio (c) 10.50 % 11.74 % 12.72 % (17.5)% (10.6)%
Total risk-based capital ratio (c) 11.46 % 12.79 % 13.93 % (17.7)% (10.4)%
Common equity Tier 1 capital ratio (c) 10.50 % 11.74 % 12.72 % (17.5)% (10.6)%
ASSET QUALITY:
Non-accrual loans $ 4,650 $ 5,312 $ 5,054 (8.0)% (12.5)%
Loans 90 days past due and still accruing - - 10 - % - %
Troubled debt restructured loans ("TDRs") (d) 1,258 1,553 1,571 (19.9)% (19.0)%
Foreclosed real estate 3,002 3,354 3,943 (23.9)% (10.5)%
Non-performing assets ("NPAs") $ 8,910 $ 10,219 $ 10,578 (15.8)% (12.8)%
Foreclosed real estate, criticized and classified assets $ 19,417 $ 20,778 $ 20,335 (4.5)% (6.6)%
Loans past due 30 to 89 days $ 4,968 $ 2,823 $ 2,258 120.0 % 76.0 %
Charge-offs, net (quarterly) $ 209 $ 181 $ 211 (0.9)% 15.5 %
Charge-offs, net as a % of average loans (annualized) 0.14 % 0.14 % 0.18 % (22.8)% (1.0)%
Non-accrual loans to total loans 0.73 % 0.98 % 1.05 % (31.1)% (25.7)%
NPAs to total assets 1.13 % 1.49 % 1.71 % (33.9)% (24.4)%
NPAs excluding TDR loans (d) to total assets 0.97 % 1.27 % 1.45 % (33.3)% (23.5)%
Non-accrual loans to total assets 0.59 % 0.78 % 0.82 % (27.8)% (24.1)%
Allowance for loan losses as a % of non-accrual loans 128.77 % 105.23 % 113.81 % 13.1 % 22.4 %
Allowance for loan losses to total loans 0.94 % 1.03 % 1.20 % (22.1)% (9.1)%
(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)
ASSETSJune 30, 2016 December 31, 2015
Cash and due from banks$ 4,431 $ 2,914
Interest-bearing deposits with other banks 7,874 3,206
Cash and cash equivalents 12,305 6,120
Interest bearing time deposits with other banks 100 100
Securities available for sale, at fair value 94,797 93,776
Securities held to maturity 5,660 6,834
Federal Home Loan Bank Stock, at cost 6,268 5,165
Loans receivable, net of unearned income 640,187 543,423
Less: allowance for loan losses 5,988 5,590
Net loans receivable 634,199 537,833
Foreclosed real estate 3,002 3,354
Premises and equipment, net 9,092 8,879
Accrued interest receivable 2,366 1,764
Goodwill 2,820 2,820
Bank-owned life insurance 12,675 12,524
Other assets 6,528 5,334
Total Assets$ 789,812 $ 684,503
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing$ 120,992 $ 87,209
Interest bearing 473,832 430,647
Total Deposits 594,824 517,856
Borrowings 118,875 95,650
Accrued interest payable and other liabilities 6,340 4,169
Junior subordinated debentures 12,887 12,887
Total Liabilities 732,926 630,562
Total Stockholders' Equity 56,886 53,941
Total Liabilities and Stockholders' Equity$ 789,812 $ 684,503

SUSSEX BANCORP
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollars In Thousands Except Per Share Data)
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2016 2015 2016 2015
INTEREST INCOME
Loans receivable, including fees$ 6,459 $ 5,275 $ 12,604 $ 10,447
Securities:
Taxable 344 302 720 569
Tax-exempt 190 221 391 429
Interest bearing deposits 6 3 10 7
Total Interest Income 6,999 5,801 13,725 11,452
INTEREST EXPENSE
Deposits 636 438 1,211 854
Borrowings 448 380 885 760
Junior subordinated debentures 98 54 166 107
Total Interest Expense 1,182 872 2,262 1,721
Net Interest Income 5,817 4,929 11,463 9,731
PROVISION FOR LOAN LOSSES 385 200 596 505
Net Interest Income after Provision for Loan Losses 5,432 4,729 10,867 9,226
OTHER INCOME
Service fees on deposit accounts 256 213 481 426
ATM and debit card fees 200 201 387 375
Bank owned life insurance 75 79 151 157
Insurance commissions and fees 1,039 736 2,760 1,891
Investment brokerage fees 50 41 77 63
Gain on securities transactions 105 88 272 256
(Loss) on disposal of fixed assets (6) 8 (19) 8
Other 107 135 241 226
Total Other Income 1,826 1,501 4,350 3,402
OTHER EXPENSES
Salaries and employee benefits 3,076 2,789 6,429 5,569
Occupancy, net 512 443 936 920
Data processing 548 429 1,097 783
Furniture and equipment 283 214 516 424
Advertising and promotion 86 90 191 160
Professional fees 177 173 351 319
Director fees 160 147 219 313
FDIC assessment 121 124 241 248
Insurance 73 68 146 120
Stationary and supplies 50 49 102 105
Loan collection costs 53 59 85 156
Expenses and write-downs related to foreclosed real estate 144 35 219 199
Other 315 302 676 676
Total Other Expenses 5,598 4,922 11,208 9,992
Income before Income Taxes 1,660 1,308 4,009 2,636
INCOME TAX EXPENSE 551 424 1,326 800
Net Income $ 1,109 $ 884 $ 2,683 $ 1,836
OTHER COMPREHENSIVE INCOME (LOSS):
Unrealized gains on available for sale securities arising during the period$ 1,576 $ (1,166) $ 2,561 $ (850)
Fair value adjustments on derivatives (1,149) - (1,549) -
Reclassification adjustment for net gain on securities transactions included in net income (105) (88) (272) (256)
Income tax related to items of other comprehensive income (loss) (129) 502 (296) 442
Other comprehensive income, net of income taxes 193 (752) 444 (664)
Comprehensive income$ 1,302 $ 132 $ 3,127 $ 1,172
EARNINGS PER SHARE
Basic$ 0.24 $ 0.19 $ 0.59 $ 0.40
Diluted$ 0.24 $ 0.19 $ 0.58 $ 0.40

SUSSEX BANCORP
COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES
(Dollars In Thousands)
(Unaudited)
Three Months Ended June 30,
2016
2015
Average Average Average Average
Balance Interest Rate (2) Balance Interest Rate (2)
Earning Assets:
Securities:
Tax exempt (3) $ 29,106 $ 284 3.91% $ 33,406 $ 331 3.97%
Taxable 69,204 344 1.99% 64,261 302 1.88%
Total securities 98,310 628 2.56% 97,667 633 2.60%
Total loans receivable (1) (4) 607,983 6,459 4.26% 475,855 5,275 4.45%
Other interest-earning assets 9,375 6 0.26% 8,844 3 0.14%
Total earning assets 715,668 7,093 3.98% 582,366 5,911 4.07%
Non-interest earning assets 39,713 37,693
Allowance for loan losses (5,881) (5,738)
Total Assets $ 749,500 $ 614,321
Sources of Funds:
Interest bearing deposits:
NOW $ 143,840 $ 80 0.22% $ 128,397 $ 55 0.17%
Money market 36,842 38 0.41% 15,935 8 0.20%
Savings 138,546 72 0.21% 140,994 71 0.20%
Time 158,408 446 1.13% 118,520 304 1.03%
Total interest bearing deposits 477,636 636 0.53% 403,846 438 0.44%
Borrowed funds 81,712 448 2.20% 57,249 380 2.66%
Junior subordinated debentures 12,887 98 3.05% 12,887 54 1.68%
Total interest bearing liabilities 572,235 1,182 0.83% 473,982 872 0.74%
Non-interest bearing liabilities:
Demand deposits 115,319 83,808
Other liabilities 5,448 4,245
Total non-interest bearing liabilities 120,767 88,053
Stockholders' equity 56,498 52,286
Total Liabilities and Stockholders' Equity $ 749,500 $ 614,321
Net Interest Income and Margin (5) 5,911 3.31% 5,039 3.47%
Tax-equivalent basis adjustment (94) (110)
Net Interest Income $ 5,817 $ 4,929
(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)
Six Months Ended June 30,
2016
2015
Average Average Average Average
Balance Interest Rate (2) Balance Interest Rate (2)
Earning Assets:
Securities:
Tax exempt (3) $ 29,671 $ 584 3.96% $ 32,378 $ 643 4.00%
Taxable 69,537 720 2.08% 60,827 569 1.89%
Total securities 99,208 1,304 2.64% 93,205 1,212 2.62%
Total loans receivable (1) (4) 583,931 12,604 4.34% 473,376 10,447 4.45%
Other interest-earning assets 9,006 10 0.22% 7,985 7 0.18%
Total earning assets 692,145 13,918 4.04% 574,566 11,666 4.09%
Non-interest earning assets 39,208 37,979
Allowance for loan losses (5,770) (5,740)
Total Assets $ 725,583 $ 606,805
Sources of Funds:
Interest bearing deposits:
NOW $ 141,936 $ 151 0.21% $ 128,279 $ 105 0.17%
Money market 33,396 66 0.40% 15,227 13 0.17%
Savings 138,537 142 0.21% 140,747 142 0.20%
Time 152,376 852 1.12% 115,311 594 1.04%
Total interest bearing deposits 466,245 1,211 0.52% 399,564 854 0.43%
Borrowed funds 78,839 885 2.26% 60,464 760 2.53%
Junior subordinated debentures 12,887 166 2.59% 12,887 107 1.67%
Total interest bearing liabilities 557,971 2,262 0.82% 472,915 1,721 0.73%
Non-interest bearing liabilities:
Demand deposits 106,792 77,785
Other liabilities 4,914 3,923
Total non-interest bearing liabilities 111,706 81,708
Stockholders' equity 55,906 52,182
Total Liabilities and Stockholders' Equity $ 725,583 $ 606,805
Net Interest Income and Margin (5) 11,656 3.39% 9,945 3.49%
Tax-equivalent basis adjustment (193) (214)
Net Interest Income $ 11,463 $ 9,731
(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


Contacts: Anthony Labozzetta, President/CEO Steven Fusco, SEVP/CFO 844-256-7328

Source:Sussex Bancorp