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Sussex Bancorp Reports Third Quarter Results and Improved Asset Quality for 2012

FRANKLIN, N.J., Nov. 7, 2012 (GLOBE NEWSWIRE) -- Sussex Bancorp (the "Company") (Nasdaq:SBBX), the holding company for Sussex Bank (the "Bank") today announced net income of $546 thousand, or $0.17 per basic and diluted share, for the quarter-ended September 30, 2012, a 6.3% earnings per share growth, as compared to $534 thousand, or $0.16 per basic and diluted share, for the same period last year. The increase in net income was largely due to improved non-interest income resulting from an increase in gains on sale of securities and insurance commissions and fees, which was largely offset by higher provision for loan losses and expenses and write-downs related to foreclosed real estate.

For the nine months ended September 30, 2012, the Company reported net income of $832 thousand, or $0.26 per basic share and $0.25 per diluted share, as compared to $2.0 million, or $0.60 per basic and diluted share, for the same period last year. The Company attributed the decrease in net income for the nine months ended September 30, 2012, largely to expenses and write-downs related to the prospective sales of several foreclosed real estate properties. In addition, expenses related to additional commercial lending staff, technology upgrades, increased advertising and promotion and FDIC assessment costs (due to deposit growth) also added to the decrease in net income. The aforementioned declines were partly offset by improved non-interest income resulting from increases in gains on sale of securities and insurance commissions and fees.

The Company's overall credit quality continues to improve as total problem assets (total classified/criticized/foreclosed real estate) have declined $20.3 million, or 33.3%, to $42.5 million at September 30, 2012, from a historical high of $62.8 million at March 31, 2010, and have decreased 14.4% since December 31, 2011. Included in our overall total problem assets are non-performing assets ("NPAs"), which declined 12.3% to $29.8 million at September 30, 2012, from $34.0 million at December 31, 2011.

We continue to make progress towards reducing our legacy problem assets, which was a primary goal for 2012. This quarter, we have reduced our non-performing assets by 13.2% and our total problem assets by 16.9% as compared to the same period last year. With the pending sales of several foreclosed real estate properties we are hopeful that this momentum will continue into 2013," said Anthony Labozzetta, President and Chief Executive Officer of Sussex Bank. "Our operating results continue to be negatively affected by high levels of credit quality costs related to legacy problem assets. As we continue to reduce our problem assets, we will further improve our financial performance," added Mr. Labozzetta.

Operating Performance

The Company reported net income of $546 thousand, up 2.3% for the third quarter of 2012, as compared to $534 thousand for the same period in 2011. The improvement in net income was largely due to increased gains on sale of securities (+$570 thousand), which was primarily offset by higher provision for loan losses (+$367 thousand) and expenses and write-downs related to foreclosed real estate (+$160 thousand). Contributing to the Company's quarterly earnings improvement was the performance of its insurance subsidiary, Tri-state Insurance Agency, Inc. ("Tri-state"), which reported a 25.5% increase in revenues and $106 thousand in net income before taxes for the third quarter of 2012 as compared to a net loss before taxes of $4 thousand for the same period last year.

The Company reported net income of $832 thousand for the nine months ended September 30, 2012, as compared to $2.0 million for the same period in 2011. The decline in net income was largely due to an increase in expenses and write-downs related to foreclosed real estate (+$722 thousand), higher operating costs resulting from growth initiatives of the Company and a decline in the net interest margin. The aforementioned declines were partly offset by increases in gains on sale of securities (+$495 thousand) and higher Tri-state net income before taxes of $62 thousand, or 40.6%, for the nine months ended September 30, 2012 as compared to the same period last year.

Operating performance continues to be adversely impacted by the costs to resolve legacy problem assets. Income before provision for income taxes was $652 thousand and $738 thousand for the three and nine months ended September 30, 2012, respectively, which included total costs (provision for loan losses, loan collection costs and expenses and write-downs related to foreclosed real estate) and lost interest income from problem assets that totaled approximately $2 million and $6 million for the three and nine months ended September 30, 2012, respectively. Despite the high costs of resolving legacy problem assets, the Company continues to place an equal focus on strengthening its core operations and performance as return on average assets was 0.43% and 0.44% for the quarters ended September 30, 2012 and 2011, respectively, and 0.22% and 0.55% for the nine months ended September 30, 2012 and 2011, respectively.

Mr. Labozzetta stated, "Our core operations are performing well, which is demonstrated by the 0.43% return on average assets, despite the extraordinary levels of credit quality related costs, adjusting for those costs our return on average assets would be over 1.00%."

Net Interest Income. Net interest income on a fully tax equivalent basis declined $100 thousand, or 2.3%, to $4.2 million for the third quarter of 2012 as compared to $4.3 million for same period in 2011. The decrease in net interest income was largely due to the Company's net interest margin declining 23 basis points to 3.57% for the third quarter of 2012 compared to the same period last year. The decline in the net interest margin was mostly due to a 30 basis point decline in the average rate earned on loans. This decline in net interest income was partially offset by a decrease in the average rate paid on total interest bearing liabilities, which decreased 24 basis points to 0.87% for the third quarter of 2012 from 1.11% for the same period in 2011. The decline was in part offset by a $19.0 million, or 4.2%, increase in average interest earning assets, principally securities.

Net interest income, on a fully taxable equivalent basis, decreased $612 thousand, or 4.6%, to $12.7 million for the nine months ended September 30, 2012, as compared to $13.3 million for same period in 2011. The Company's net interest margin declined 41 basis points to 3.56% for the nine months ended September 30, 2012, compared to 3.97% for the same period last year. The decline was mostly attributed to a 35 basis point decline in the average rate earned on loans to 5.22%, which was partly offset by a 18 basis point decrease in the average rate paid on interest bearing liabilities to 0.93% for the nine month period ended September 30, 2012, as compared to the same period last year. The decline was in part offset by a $28.3 million, or 6.3%, increase in average interest earning assets, principally securities.

Provision for Loan Losses. Provision for loan losses increased $367 thousand to $1.1 million for the third quarter of 2012, as compared to $737 thousand for the same period in 2011.

Provision for loan losses increased $234 thousand to $2.9 million for the nine month period ended September 30, 2012, as compared to $2.7 million for the same period last year.

Non-interest Income. The Company reported an increase in non-interest income of $756 thousand, or 62.7%, to $2.0 million for the third quarter of 2012 as compared to the same period last year. The increase in non-interest income was largely due to a $570 thousand increase in gain on the sale of securities and a $139 thousand, or 25.5%, growth in insurance commissions and fees.

The Company reported an increase in non-interest income of $753 thousand, or 19.1%, to $4.7 million for the nine months ended September 30, 2012, as compared to the same period last year. The increase in non-interest income was largely due increases in gain on sale of securities, insurance commissions and fees and other income, which increased $495 thousand, $168 thousand and $114 thousand, respectively.

Non-interest Expense. The Company's non-interest expenses increased $270 thousand, or 6.7%, to $4.3 million for the third quarter of 2012 as compared to the same period last year. The increase for the third quarter of 2012 versus the same period in 2011 was largely due to an increase in expenses related to foreclosed real estate and other expenses, which increased $160 thousand and $67 thousand, respectively.

The Company's non-interest expenses increased $1.7 million, or 14.6%, to $13.3 million for the nine months ended September 30, 2012, as compared to the same period last year. The increase during the first nine months of 2012 compared to the same period in 2011 was largely due to increases in expenses and write-downs related to foreclosed real estate and salaries and benefits of $722 thousand and $532 thousand, respectively. The increase in expenses and write-downs related to foreclosed real estate was principally due to the prospective sales of foreclosed real estate properties. The increase in salaries and employee benefits was mostly attributed to costs of related to the hiring of additional commercial lenders and support staff, higher medical benefit costs and severance costs of $110 thousand for a former executive during the first quarter of 2012.

Financial Condition Comparison

At September 30, 2012, the Company's total assets were $504.3 million, a decrease of $2.7 million, or 0.5%, as compared to total assets of $507.0 million at December 31, 2011. The decrease in total assets was largely driven by a decline in cash and cash equivalents of $27.1 million, or 72.2%, which was mostly offset by securities growth of $24.0 million, or 23.9%.

Total loans receivable, net of unearned income, increased $690 thousand, or 0.2%, to $340.4 million at September 30, 2012, from $339.7 million at year-end 2011. During the nine months ended September 30, 2012, the Company originated approximately $40.0 million in new loans. The loan volume for 2012 was largely offset by pay-offs of non-performing loans, potential problem loans, loans repurchased from a participation bank, loan charge-offs and unanticipated loan prepayments. During the third quarter of 2012, there were $5.8 million in loans that the Company sold back to the participating bank that had originated the loans. The $5.8 million in loans repurchased included $1.7 million in non-accrual loans and was part of approximately $12.0 million in loans that the Company had negotiated the full pay-off of all contractual amounts due (principal and interest plus $45,000 in fees). The remaining loans are scheduled to be sold back to the participating bank during the next 4 months. Such loans were originated and sold to the Company between the years of 2003 and 2009.

The Company's security portfolio, which includes securities available for sale and securities held to maturity, increased $24.0 million, or 23.9%, to $124.6 million at September 30, 2012, as compared to $100.6 million at December 31, 2011.

The Company's total deposits decreased $8.0 million, or 1.9%, to $417.3 million at September 30, 2012, from $425.4 million at December 31, 2011. The decrease in deposits was due to a $7.4 million, or 6.7%, decline in time deposits for September 30, 2012 as compared to December 31, 2011. The decline was partly offset by a $2.0 million, or 4.6%, increase in non-interest bearing deposits.

At September 30, 2012, the Company's total stockholders' equity was $41.2 million, an increase of $1.3 million when compared to December 31, 2011. At September 30, 2012, the leverage, Tier I risk-based capital and total risk-based capital ratios for the Bank were 9.36%, 13.18% and 14.44%, respectively, all in excess of the ratios required to be deemed "well-capitalized."

Asset and Credit Quality

The overall credit quality of the Company continues to show positive trends at September 30, 2012, as our classified/criticized/foreclosed real estate declined $7.1 million, or 14.4%, from December 31, 2011. Our classified/criticized/foreclosed real estate totaled $42.5 million at September 30, 2012, as compared to $49.6 million at December 31, 2011, and has declined 33.3% from a historical high of $62.8 million at March 31, 2010. Loans internally rated "Substandard," "Doubtful" or "Loss" are considered classified assets, while loans rated as "Special Mention" are considered criticized. Such risk ratings are consistent with the classification system used by regulatory agencies and are consistent with industry practices.

NPAs, which include non-accrual loans, 90 days past due and still accruing, performing troubled debt restructured loans and foreclosed real estate, decreased $4.2 million, or 12.3%, to $29.8 million at September 30, 2012, as compared to $34.0 million at December 31, 2011. The ratio of NPAs to total assets for September 30, 2012 and December 31, 2011 were 5.9% and 6.7%, respectively. The Company has been actively marketing its foreclosed real estate properties, which amounted to $5.2 million at September 30, 2012, with an average book value of approximately $350 thousand per property. Approximately $2.2 million, or 42.3%, of the Company's total foreclosed real estate at September 30, 2012, are under contract for sale and are anticipated to close in the fourth quarter of this year. The increase of $722 thousand, or 224.2%, in expenses and write-downs related to foreclosed real estate for the nine months ended September 30, 2012, as compared to the same period last year was largely attributed to the properties that are under contract for sale.

The allowance for loan losses was $6.7 million, or 2.0% of total loans, at September 30, 2012, compared to $7.2 million, or 2.1% of total loans, at December 31, 2011.

About Sussex Bancorp

Sussex Bancorp is the holding company for Sussex Bank, which operates through its main office in Franklin, New Jersey and through its nine branch offices located in Andover, Augusta, Newton, Montague, Sparta, Vernon and Wantage, New Jersey, Port Jervis and Warwick, New York; a loan production office in Rochelle Park, New Jersey and for the Tri-State Insurance Agency, Inc., a full service insurance agency with locations in Augusta and Rochelle Park, New Jersey. For additional information, please visit the Company's website at www.sussexbank.com.

The Sussex Bancorp logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=9580

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 (the "Reform Act"). 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, 2011, 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)
9/30/12 VS.
9/30/12 12/31/2011 9/30/2011 9/30/2011 12/31/2011
BALANCE SHEET HIGHLIGHTS - Period End Balances
Total securities $ 124,595 $ 100,581 $ 83,737 48.8 % 23.9 %
Total loans 340,395 339,705 337,794 0.8 % 0.2 %
Allowance for loan losses (6,721) (7,210) (7,401) (9.2) % (6.8) %
Total assets 504,294 506,953 495,884 1.7 % (0.5) %
Total deposits 417,341 425,376 415,050 0.6 % (1.9) %
Total borrowings and junior subordinated debt 38,887 38,887 38,887 -- % -- %
Total shareholders' equity 41,182 39,902 39,388 4.6 % 3.2 %
FINANCIAL DATA - QUARTER ENDED:
Net interest income (tax equivalent) (a) $ 4,239 $ 4,251 $ 4,339 (2.3) % (0.3) %
Provision for loan losses 1,104 618 737 49.8 % 78.6 %
Total other income 1,962 1,331 1,206 62.7 % 47.4 %
Total other expenses 4,295 4,199 4,025 6.7 % 2.3 %
Income before provision for income taxes (tax equivalent) 802 765 783 2.4 % 4.8 %
Provision for income taxes 106 102 97 9.3 % 3.9 %
Taxable equivalent adjustment (a) 150 148 152 (1.6) % 1.3 %
Net income $ 546 $ 515 $ 534 2.3 % 6.0 %
Net income per common share - Basic $ 0.17 $ 0.16 $ 0.16 6.3 % 6.2 %
Net income per common share - Diluted $ 0.17 $ 0.15 $ 0.16 6.3 % 13.3 %
Return on average assets 0.43 0.41 0.44 (2.1) % 4.5 %
Return on average equity 5.32 5.22 5.49 (3.1) % 2.0 %
Net interest margin (tax equivalent) 3.57 3.59 3.80 (6.0) % (0.6) %
FINANCIAL DATA - YEAR TO DATE:
Net interest income (tax equivalent) (a) $ 12,651 $ 13,263 (4.6) %
Provision for loan losses 2,922 2,688 8.7 %
Total other income 4,705 3,952 19.1 %
Total other expenses 13,270 11,584 14.6 %
Income before provision for income taxes (tax equivalent) 1,164 2,943 (60.5) %
Provision for income taxes (94) 535 (117.6) %
Taxable equivalent adjustment (a) 426 453 (6.0) %
Net income $ 832 $ 1,955 (57.5) %
Net income per common share - Basic $ 0.26 $ 0.60 (56.7) %
Net income per common share - Diluted $ 0.25 $ 0.60 (58.3) %
Return on average assets 0.22 0.55 (60.1) %
Return on average equity 2.74 6.86 (60.1) %
Net interest margin (tax equivalent) 3.56 3.97 (10.4) %
SHARE INFORMATION:
Book value per common share $ 12.12 $ 11.83 $ 11.68 3.8 % 2.5 %
Outstanding shares- period ending 3,397,873 3,372,949 3,372,688 0.7 % 0.7 %
Average diluted shares outstanding (year to date) 3,282,226 3,278,358 3,279,496 0.1 % 0.1 %
CAPITAL RATIOS:
Total equity to total assets 8.17 7.87 7.94 2.8 % 3.8 %
Leverage ratio (b) 9.36 9.29 9.42 (0.6) % 0.8 %
Tier 1 risk-based capital ratio (b) 13.18 12.98 13.11 0.5 % 1.5 %
Total risk-based capital ratio (b) 14.44 14.24 14.37 0.5 % 1.4 %
ASSET QUALITY AND RATIOS:
Non-accrual loans $ 23,993 $ 24,283 $ 27,493 (12.7) % (1.2) %
Loans 90 days past due and still accruing 59 803 998 (94.1) % (92.7) %
Troubled debt restructured loans (c) 603 3,411 1,313 (54.1) % (82.3) %
Foreclosed real estate 5,158 5,509 4,545 13.5 % (6.4) %
Non-performing assets $ 29,813 $ 34,006 $ 34,349 (13.2) % (12.3) %
Foreclosed real estate, Criticized and Classified Assets 42,462 49,584 51,108 (16.9) % (14.4) %
Charge-offs, net (quarterly) $ 619 $ 803 $ 872 (29.0) % (22.9) %
Charge-offs, net as a % of average loans (annualized) 0.72 0.96 1.03 (29.9) % (24.4) %
Non-accrual loans to total loans 7.05 7.15 8.14 (13.4) % (1.4) %
Non-performing assets to total assets 5.91 6.71 6.73 (12.1) % (11.9) %
Allowance for loan losses as a % of non-performing loans 27.33 26.03 25.69 6.4 % 5.0 %
Allowance for loan losses to total loans 1.97 2.12 2.19 (9.9) % (7.0) %
(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) Sussex Bank capital ratios
(c) Troubled debt restructured loans currently performing in accordance with renegotiated terms
SUSSEX BANCORP
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)
(Unaudited)
ASSETS September 30, 2012 December 31, 2011
Cash and due from banks $ 6,513 $ 3,903
Interest-bearing deposits with other banks 3,917 33,597
Cash and cash equivalents 10,430 37,500
Interest bearing time deposits with other banks 100 100
Securities available for sale, at fair value 119,002 96,361
Securities held to maturity 5,593 4,220
Federal Home Loan Bank Stock, at cost 1,943 1,837
Loans receivable, net of unearned income 340,395 339,705
Less: allowance for loan losses 6,721 7,210
Net loans receivable 333,674 332,495
Foreclosed real estate 5,158 5,509
Premises and equipment, net 6,630 6,778
Accrued interest receivable 1,861 1,735
Goodwill 2,820 2,820
Bank owned life insurance 11,442 11,142
Other assets 5,641 6,456
Total Assets $ 504,294 $ 506,953
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing $ 46,813 $ 44,762
Interest bearing 370,528 380,614
Total Deposits 417,341 425,376
Borrowings 26,000 26,000
Accrued interest payable and other liabilities 6,884 2,788
Junior subordinated debentures 12,887 12,887
Total Liabilities 463,112 467,051
Total Stockholders' Equity 41,182 39,902
Total Liabilities and Stockholders' Equity $ 504,294 $ 506,953
SUSSEX BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands Except Per Share Data)
(Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
2012 2011 2012 2011
INTEREST INCOME
Loans receivable, including fees $ 4,467 $ 4,687 $ 13,292 $ 14,210
Securities:
Taxable 241 313 994 989
Tax-exempt 292 296 827 879
Federal funds sold -- -- -- 3
Interest bearing deposits 4 20 30 32
Total Interest Income 5,004 5,316 15,143 16,113
INTEREST EXPENSE
Deposits 587 806 1,938 2,342
Borrowings 268 268 797 797
Junior subordinated debentures 60 55 183 164
Total Interest Expense 915 1,129 2,918 3,303
Net Interest Income 4,089 4,187 12,225 12,810
PROVISION FOR LOAN LOSSES 1,104 737 2,922 2,688
Net Interest Income after Provision for Loan Losses 2,985 3,450 9,303 10,122
OTHER INCOME
Service fees on deposit accounts 292 324 842 968
ATM and debit card fees 165 140 453 400
Bank owned life insurance 96 105 300 314
Insurance commissions and fees 684 545 1,892 1,724
Investment brokerage fees 46 33 118 103
Gain on sale of loans, held for sale -- -- 47 --
Gain (loss) on securities transactions 569 (1) 763 268
Loss on sale of fixed assets -- -- (6) --
Gain (loss) on sale of foreclosed real estate 2 2 5 (2)
Other 108 58 291 177
Total Other Income 1,962 1,206 4,705 3,952
OTHER EXPENSES
Salaries and employee benefits 2,196 2,219 6,744 6,212
Occupancy, net 355 338 1,071 1,055
Furniture, equipment and data processing 326 283 1,014 871
Advertising and promotion 63 52 222 141
Professional fees 175 163 478 439
Director fees 56 5 236 144
FDIC assessment 177 153 516 535
Insurance 68 53 179 163
Stationary and supplies 44 39 128 122
Loan collection costs 204 314 539 606
Expenses and write-downs related to foreclosed real estate 234 74 1,044 322
Amortization of intangible assets 1 3 4 8
Other 396 329 1,095 966
Total Other Expenses 4,295 4,025 13,270 11,584
Income before Income Taxes 652 631 738 2,490
PROVISION (BENEFIT) FOR INCOME TAXES 106 97 (94) 535
Net Income $ 546 $ 534 $ 832 $ 1,955
OTHER COMPREHENSIVE INCOME:
Unrealized gains on available for sale securities arising during the period $ 693 $ 353 $ 1,413 $ 1,425
Reclassification adjustment for gain on sales included in net income (569) 1 (763) (268)
Income tax expense related to other comprehensive income (49) (142) (259) (463)
Other comprehensive income, net of income taxes 75 212 391 694
Comprehensive income $ 621 $ 746 $ 1,223 $ 2,649
EARNINGS PER SHARE
Basic $ 0.17 $ 0.16 $ 0.26 $ 0.60
Diluted $ 0.17 $ 0.16 $ 0.25 $ 0.60
SUSSEX BANCORP
COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES
(Dollars In Thousands)
(Unaudited)
Three Months Ended September 30,
2012 2011
Average Average Average Average
Balance Interest (1) Rate (2) Balance Interest (1) Rate (2)
Earning Assets:
Securities:
Tax exempt (3) $ 32,199 $ 442 5.46% $30,059 $448 5.90%
Taxable 86,766 241 1.10% 48,890 313 2.54%
Total securities 118,965 683 2.28% 78,949 761 3.82%
Total loans receivable (4) 342,502 4,467 5.19% 338,393 4,687 5.49%
Other interest-earning assets 10,405 4 0.15% 35,530 20 0.22%
Total earning assets 471,872 $ 5,154 4.35% 452,872 $5,468 4.79%
Non-interest earning assets 43,319 41,159
Allowance for loan losses (6,671) (7,261)
Total Assets $ 508,520 $486,770
Sources of Funds:
Interest bearing deposits:
NOW $ 95,611 $ 36 0.15% $77,676 $85 0.44%
Money market 14,506 11 0.30% 16,564 23 0.55%
Savings 162,762 133 0.33% 168,419 287 0.68%
Time 104,128 407 1.55% 102,725 411 1.59%
Total interest bearing deposits 377,007 587 0.62% 365,384 806 0.88%
Borrowed funds 26,196 268 4.07% 26,000 268 4.09%
Junior subordinated debentures 12,887 60 1.85% 12,887 55 1.69%
Total interest bearing liabilities 416,090 $ 915 0.87% 404,271 $1,129 1.11%
Non-interest bearing liabilities:
Demand deposits 48,702 41,012
Other liabilities 2,676 2,613
Total non-interest bearing liabilities 51,378 43,625
Stockholders' equity 41,052 38,874
Total Liabilities and Stockholders' Equity $ 508,520 $486,770
Net Interest Income and Margin (5) 4,239 3.57% 4,339 3.80%
Tax-equivalent basis adjustment (150) (152)
Net Interest Income $ 4,089 $ 4,187
(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)
Nine Months Ended September 30,
2012 2011
Average Average Average Average
Balance Interest (1) Rate (2) Balance Interest (1) Rate (2)
Earning Assets:
Securities:
Tax exempt (3) $ 29,444 $ 1,253 5.68% $29,962 $1,332 5.94%
Taxable 84,774 994 1.57% 52,398 989 2.52%
Total securities 114,218 2,247 2.63% 82,360 2,321 3.77%
Total loans receivable (4) 339,839 13,292 5.22% 341,123 14,210 5.57%
Other interest-earning assets 21,095 30 0.19% 23,319 35 0.20%
Total earning assets 475,152 $ 15,569 4.38% 446,802 $16,566 4.96%
Non-interest earning assets 42,076 38,020
Allowance for loan losses (7,335) (7,227)
Total Assets $ 509,893 $477,595
Sources of Funds:
Interest bearing deposits:
NOW $ 94,578 $ 129 0.18% $78,923 $305 0.52%
Money market 16,962 47 0.37% 14,838 61 0.55%
Savings 163,331 492 0.40% 169,360 881 0.70%
Time 107,389 1,270 1.58% 94,898 1,095 1.54%
Total interest bearing deposits 382,260 1,938 0.68% 358,019 2,342 0.87%
Borrowed funds 26,066 797 4.08% 26,859 797 3.97%
Junior subordinated debentures 12,887 183 1.90% 12,887 164 1.70%
Total interest bearing liabilities 421,213 $ 2,918 0.93% 397,765 $3,303 1.11%
Non-interest bearing liabilities:
Demand deposits 45,949 39,423
Other liabilities 2,209 2,427
Total non-interest bearing liabilities 48,158 41,850
Stockholders' equity 40,522 37,980
Total Liabilities and Stockholders' Equity $ 509,893 $477,595
Net Interest Income and Margin (5) $ 12,651 3.56% $ 13,263 3.97%
Tax-equivalent basis adjustment (426) (453)
Net Interest Income $ 12,225 $ 12,810
(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
CONTACT: Anthony Labozzetta, President/CEO Steven Fusco, SVP/CFO 973-827-2914

Source:Sussex Bancorp

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