Sussex Bancorp Announces Improved Third Quarter and Nine Month Earnings

• Press Release
• Source: Sussex Bancorp
• On 5:00 pm EDT, Thursday October 22, 2009

FRANKLIN, N.J., Oct. 22, 2009 (GLOBE NEWSWIRE) -- Sussex Bancorp (Nasdaq:SBBX - News) today announced improved financial results for the third quarter and nine months ended September 30, 2009.

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{"s" : "sbbx","k" : "c10,l10,p20,t10","o" : "","j" : ""}

For the quarter ended September 30, 2009, the Company earned $897 thousand compared to a net loss of $3.0 million for the quarter ended September 30, 2008. For the nine months ended September 30, 2009, the Company earned $1.7 million compared to a net loss of $2.0 million reported for the same period last year. Basic and diluted earnings per share for the three and nine months ended September 30, 2009, were $0.28 and $0.54, respectively, compared to basic and diluted loss per share of ($0.92) and ($0.62) for the comparable periods of 2008. The improvement in the Company's performance in 2009 reflects higher net interest income, partially offset by higher provisions for loan losses, and the impact of other than temporary impairment ("OTTI") charges in 2008 attributable to Fannie Mae and Freddie Mac preferred stock. The Company had no comparable OTTI charge in 2009.

The Company's net interest income increased to $4.2 million for the quarter ended September 30, 2009 from $3.1 million for the third quarter of 2008. The Company's interest income was unchanged at $5.9 million during each period, while the Company's interest expense decreased to $1.7 million for the three months ended September 30, 2009 from $2.7 million for the third quarter of 2008.

For the nine months ended September 30, 2009, the Company's net interest income increased to $11.0 million from the $9.0 million earned for the same period last year. For the nine months ended September 30, 2009, the Company's interest income increased to $17.5 million from $17.0 million in the nine months ended September 30, 2008. As the Company's average earning assets increased by $48.8 million, its yield on earning assets decreased by 47 basis points. The Company's interest expense decreased to $6.5 million for the nine months ended September 30, 2009 from $8.0 million for the nine month period ended September 30, 2008. The Company's average interest bearing liabilities increased by $56.1 million in the first nine months of 2009 compared to the prior year, and the Company's cost of interest bearing liabilities decreased by 97 basis points.

For the nine months ended September 30, 2009, the Company's net interest margin increased by 30 basis points, to 3.51% from 3.21 % in the prior year period. For the third quarter of 2009, the Company's net interest margin increased to 4.04% from 3.18% in the third quarter of 2008.

The loan loss provision for the third quarter was $520 thousand compared to $279 thousand for the same period last year. For the nine month period the provision was $1.6 million, compared to $569 thousand for the same period last year. At September 30, 2009, non-performing assets totaled $23.8 million compared to $15.1 million at September 30, 2008 and $15.0 million at December 31, 2008.

At September 30, 2009 the Company had total assets of $452.5 million, compared to total assets of $439.1 million at September 30, 2008. The Company's total loans increased $18.1 million to $330.4 million at September 30, 2009 from $312.3 million at September 30, 2008.

The Company reported non-interest income for the three and nine month periods ending September 30, 2009 of $1.3 million and $4.1 million, respectively, compared to a loss of $2.3 million and non-interest income of $632 thousand for the three and nine month periods ending September 30, 2008, respectively. The reduced non-interest income for the three and nine month periods in 2008 reflects the OTTI charge discussed above, which is recognized in non-interest income.

Salaries and employee benefits increased by $228 thousand to $2.1 million for the quarter ended September 30, 2009 from the $1.8 million in the same period last year and declined by $73 thousand in the nine months ended September 30, 2009 compared to the prior year period. The increase in the quarterly period is related to expenses accrued in relation to severance owed to a former executive officer of the Company and the Bank.

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, September 30,  December 31,
 ------                          2009          2008           2008
                             -----------------------------------------

 Cash and due from banks          $13,240       $10,537        $7,602
 Federal funds sold                 2,038        15,470        13,310
                             ------------- ------------- -------------
   Cash and cash equivalents       15,278        26,007        20,912

 Interest bearing time
  deposits with other banks           100           100           100
 Trading securities                 3,974        13,519        13,290
 Securities available for
  sale                             80,040        64,487        62,272
 Federal Home Loan Bank
  Stock, at cost                    2,046         2,111         1,975

 Loans receivable, net of
  unearned income                 330,404       312,330       320,880
   Less: allowance for loan
    losses                          5,064         5,080         5,813
                             ------------- ------------- -------------
     Net loans receivable         325,340       307,250       315,067

 Foreclosed real estate             4,380         3,931         3,864
 Premises and equipment, net        7,165         8,697         8,526
 Accrued interest receivable        2,120         2,058         2,115
 Goodwill                           2,820         2,820         2,820
 Other assets                       9,271         8,099         9,654
                             ------------- ------------- -------------

 Total Assets                    $452,534      $439,079      $440,595
                             ============= ============= =============

 LIABILITIES AND
  STOCKHOLDERS' EQUITY
 ---------------------

 Liabilities:
   Deposits:
     Non-interest bearing         $39,037       $40,430       $34,784
     Interest bearing             330,100       316,231       325,297
                             ------------- ------------- -------------
   Total Deposits                 369,137       356,661       360,081

 Borrowings                        33,104        36,160        33,146
 Accrued interest payable and
  other liabilities                 2,717         2,572         2,571
 Junior subordinated
  debentures                       12,887        12,887        12,887
                             ------------- ------------- -------------

 Total Liabilities                417,845       408,280       408,685

 Total Stockholders' Equity        34,689        30,799        31,910
                             ------------- ------------- -------------

 Total Liabilities and
  Stockholders' Equity           $452,534      $439,079      $440,595
                             ============= ============= =============


                            SUSSEX BANCORP
                   CONSOLIDATED STATEMENTS OF INCOME
                        (Dollars In Thousands)
                              (Unaudited)



                                     Three Months       Nine Months
                                         Ended             Ended
                                     September 30,     September 30,
                                   ----------------- -----------------
                                      2009     2008     2009     2008
                                   -------- -------- -------- --------
 INTEREST INCOME
  Loans receivable, including fees  $4,923   $4,887  $14,520  $14,335
  Securities:
    Taxable                            651      631    2,032    1,698
    Tax-exempt                         308      248      897      710
  Federal funds sold                     5      111       26      223
  Interest bearing deposits              1        1       15        2
                                   -------- -------- -------- --------
      Total Interest Income          5,888    5,878   17,490   16,968
                                   -------- -------- -------- --------

 INTEREST EXPENSE
  Deposits                           1,264    2,219    5,166    6,417
  Borrowings                           359      377    1,067    1,132
  Junior subordinated debentures        64      135      251      459
                                   -------- -------- -------- --------
      Total Interest Expense         1,687    2,731    6,484    8,008
                                   -------- -------- -------- --------

      Net Interest Income            4,201    3,147   11,006    8,960
 PROVISION FOR LOAN LOSSES             520      279    1,583      569
                                   -------- -------- -------- --------
      Net Interest Income after
       Provision for Loan Losses     3,681    2,868    9,423    8,391
                                   -------- -------- -------- --------
 OTHER INCOME
  Service fees on deposit accounts     380      409    1,095    1,111
  ATM and debit card fees              126      123      354      348
  Insurance commissions and fees       548      576    1,757    1,972
  Investment brokerage fees             30       22      111      117
  Holding gains on trading
   securities                            2       (8)      21       13

  Gain on sale of securities,
   available for sale                   55       --       55      152
  Gain on sale of fixed assets          --       --      203       --
  Loss on sale of foreclosed real
   estate                              (34)      --      (35)      --

  Impairment write-down on equity
   securities                           --   (3,526)      --   (3,526)
  Other                                173      129      509      445
                                   -------- -------- -------- --------
    Total Other Income               1,280   (2,275)   4,070      632
                                   -------- -------- -------- --------

 OTHER EXPENSES
  Salaries and employee benefits     2,070    1,842    5,624    5,697
  Occupancy, net                       320      315      981      977
  Furniture, equipment and data
   processing                          314      372      991    1,119
  Stationary and supplies               37       50      127      141
  Professional fees                    216      140      585      337
  Advertising and promotion             49       92      145      379
  Insurance                             54       42      140      127
  FDIC assessment                      172       95      687      280
  Postage and freight                   33       34      110      118
  Amortization of intangible assets      4       14       14       43
  Write-down on foreclosed real
   estate                               --       --      456       --
  Expenses related to foreclosed
   real estate                          77       75      353      132
  Other                                367      368    1,050    1,129
                                   -------- -------- -------- --------
    Total Other Expenses             3,713    3,439   11,263   10,479
                                   -------- -------- -------- --------

      Income (loss) before Income
       Taxes                         1,248   (2,846)   2,230   (1,456)
 PROVISION FOR INCOME TAXES            351      181      485      575
                                   -------- -------- -------- --------
      Net Income (Loss)               $897  ($3,027)  $1,745  ($2,031)
                                   ======== ======== ======== ========


                            SUSSEX BANCORP
        COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES
                        (Dollars In Thousands)
                              (Unaudited)

                             Nine Months Ended September 30,
                             2009                       2008
                 -------------------------- --------------------------
                  Average Interest  Average  Average Interest  Average
 Earning Assets:  Balance   (1)     Rate(2)  Balance   (1)     Rate(2)
                 -----------------------------------------------------
 Securities:
   Tax exempt (3) $28,812   $1,347    6.25%  $22,906   $1,061    6.19%
   Taxable         61,628    2,032    4.41%   45,576    1,698    4.98%
                 -----------------------------------------------------
 Total securities  90,440    3,379    4.99%   68,482    2,759    5.38%
 Total loans
  receivable (4)  324,797   14,519    5.98%  304,859   14,335    6.28%
 Other interest-
  earning assets   21,226       41    0.25%   14,350      225    2.10%
                 -----------------------------------------------------
 Total earning
  assets          436,463  $17,939    5.50%  387,691  $17,319    5.97%

 Non-interest
  earning assets   36,269                     30,837
 Allowance for
  loan losses      (6,059)                    (5,188)
                 ---------                  ---------
 Total Assets    $466,673                   $413,340
                 =========                  =========

 Sources of
  Funds:
 Interest bearing
  deposits:
   NOW            $57,108     $432    1.01%  $58,277     $604    1.38%
   Money market    15,129      144    1.27%   26,346      451    2.29%
   Savings        171,163    2,264    1.77%   73,098    1,376    2.51%
   Time           103,722    2,325    3.00%  130,380    3,986    4.08%
                 -----------------------------------------------------
 Total interest
  bearing
  deposits        347,122    5,166    1.99%  288,101    6,417    2.98%
   Borrowed
    funds          33,123    1,067    4.25%   35,998    1,132    4.13%
   Junior
    subordinated
    debentures     12,887      251    2.57%   12,887      459    4.68%
                 -----------------------------------------------------
 Total interest
  bearing
  liabilities     393,132   $6,484    2.21%  336,986   $8,008    3.17%

 Non-interest
  bearing
  liabilities:
   Demand
    deposits       38,512                     39,721
   Other
    liabilities     2,159                      2,207
                 ---------                  ---------
 Total non-
  interest
  bearing
  liabilities      40,671                     41,928
 Stockholders'
  equity           32,870                     34,426
                 ---------                  ---------
 Total
  Liabilities and
  Stockholders'
  Equity         $466,673                   $413,340
                 =========                  =========

 Net Interest
  Income and               ----------------           ----------------
  Margin (5)               $11,455    3.51%            $9,311    3.21%
                           ================           ================

 (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
Donald L. Kovach, President/CEO
973-827-2914