ý
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
New
Jersey
|
22-3475473
|
(State
of other jurisdiction of
|
(I.
R. S. Employer
|
incorporation
or organization)
|
Identification
No.)
|
200
Munsonhurst Road, Franklin, New Jersey
|
07416
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Large
accelerated filer: ¨
|
Accelerated
filer: ¨
|
Non-accelerated
filer: ý
|
Page(s)
|
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3
|
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11
|
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23
|
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23
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24
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24
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24
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24
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24
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24
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24
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24
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25
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PART
I - FINANCIAL INFORMATION
|
|||||||
Item
1. Financial
Statements
|
|||||||
SUSSEX
BANCORP
|
|||||||
CONSOLIDATED
BALANCE SHEETS
|
|||||||
(Dollars
In Thousands)
|
|||||||
ASSETS
|
September
30, 2006
|
December
31, 2005
|
|||||
(Unaudited)
|
|||||||
Cash
and due from banks
|
$
|
12,958
|
$
|
11,395
|
|||
Federal
funds sold
|
3,110
|
13,385
|
|||||
Cash
and cash equivalents
|
16,068
|
24,780
|
|||||
Interest
bearing time deposits with other banks
|
100
|
500
|
|||||
Securities
available for sale
|
59,632
|
61,180
|
|||||
Federal
Home Loan Bank Stock, at cost
|
964
|
1,025
|
|||||
Loans
receivable, net of unearned income
|
254,211
|
211,335
|
|||||
Less:
allowance for loan losses
|
3,166
|
2,615
|
|||||
Net
loans receivable
|
251,045
|
208,720
|
|||||
Premises
and equipment, net
|
7,484
|
6,619
|
|||||
Accrued
interest receivable
|
1,638
|
1,778
|
|||||
Other
assets
|
9,580
|
8,580
|
|||||
Total
Assets
|
$
|
346,511
|
$
|
313,182
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Liabilities:
|
|||||||
Deposits:
|
|||||||
Non-interest
bearing
|
$
|
42,147
|
$
|
42,142
|
|||
Interest
bearing
|
249,408
|
214,705
|
|||||
Total
Deposits
|
291,555
|
256,847
|
|||||
Borrowings
|
13,264
|
16,300
|
|||||
Accrued
interest payable and other liabilities
|
2,422
|
1,956
|
|||||
Junior
subordinated debentures
|
5,155
|
5,155
|
|||||
Total
Liabilities
|
312,396
|
280,258
|
|||||
Stockholders'
Equity:
|
|||||||
Common
stock, no par value, authorized 5,000,000 shares;
|
|||||||
issued
shares 3,149,631 in 2006 and 3,153,004 in 2005;
|
|||||||
outstanding
shares 3,143,181 in 2006 and 3,153,004 in 2005
|
27,176
|
27,300
|
|||||
Retained
earnings
|
7,003
|
5,842
|
|||||
Accumulated
other comprehensive loss
|
(64
|
)
|
(218
|
)
|
|||
Total
Stockholders' Equity
|
34,115
|
32,924
|
|||||
Total
Liabilities and Stockholders' Equity
|
$
|
346,511
|
$
|
313,182
|
|||
See
Notes to Consolidated Financial
Statements
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|||||||||||||
(Dollars
In Thousands Except Per Share Data)
|
|||||||||||||
(Unaudited)
|
|||||||||||||
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
INTEREST
INCOME
|
|||||||||||||
Loans
receivable, including fees
|
$
|
4,374
|
$
|
3,259
|
$
|
12,404
|
$
|
8,748
|
|||||
Securities:
|
|||||||||||||
Taxable
|
365
|
400
|
1,067
|
1,280
|
|||||||||
Tax-exempt
|
263
|
285
|
783
|
877
|
|||||||||
Federal
funds sold
|
120
|
65
|
315
|
184
|
|||||||||
Interest
bearing deposits
|
1
|
14
|
11
|
41
|
|||||||||
Total
Interest Income
|
5,123
|
4,023
|
14,580
|
11,130
|
|||||||||
INTEREST
EXPENSE
|
|||||||||||||
Deposits
|
1,987
|
877
|
4,907
|
2,150
|
|||||||||
Borrowings
|
167
|
169
|
526
|
461
|
|||||||||
Junior
subordinated debentures
|
117
|
92
|
329
|
256
|
|||||||||
Total
Interest Expense
|
2,271
|
1,138
|
5,762
|
2,867
|
|||||||||
Net
Interest Income
|
2,852
|
2,885
|
8,818
|
8,263
|
|||||||||
PROVISION
FOR LOAN LOSSES
|
117
|
206
|
562
|
547
|
|||||||||
Net
Interest Income after Provision for Loan Losses
|
2,735
|
2,679
|
8,256
|
7,716
|
|||||||||
OTHER
INCOME
|
|||||||||||||
Service
fees on deposit accounts
|
349
|
334
|
1,017
|
885
|
|||||||||
ATM
and debit card fees
|
97
|
90
|
276
|
259
|
|||||||||
Insurance
commissions and fees
|
600
|
536
|
2,021
|
1,753
|
|||||||||
Investment
brokerage fees
|
74
|
104
|
214
|
234
|
|||||||||
Net
gain on sale of securities, available for sale
|
-
|
42
|
-
|
42
|
|||||||||
Other
|
179
|
161
|
431
|
519
|
|||||||||
Total
Other Income
|
1,299
|
1,267
|
3,959
|
3,692
|
|||||||||
OTHER
EXPENSES
|
|||||||||||||
Salaries
and employee benefits
|
1,759
|
1,610
|
5,154
|
4,813
|
|||||||||
Occupancy,
net
|
280
|
246
|
810
|
734
|
|||||||||
Furniture,
equipment and data processing
|
300
|
267
|
875
|
789
|
|||||||||
Stationary
and supplies
|
47
|
43
|
143
|
131
|
|||||||||
Professional
fees
|
153
|
136
|
498
|
385
|
|||||||||
Advertising
and promotion
|
110
|
108
|
440
|
374
|
|||||||||
Insurance
|
47
|
33
|
151
|
121
|
|||||||||
Postage
and freight
|
52
|
41
|
164
|
131
|
|||||||||
Amortization
of intangible assets
|
40
|
61
|
113
|
188
|
|||||||||
Other
|
402
|
311
|
1,200
|
1,015
|
|||||||||
Total
Other Expenses
|
3,190
|
2,856
|
9,548
|
8,681
|
|||||||||
Income
before Income Taxes
|
844
|
1,090
|
2,667
|
2,727
|
|||||||||
PROVISION
FOR INCOME TAXES
|
266
|
338
|
841
|
789
|
|||||||||
Net
Income
|
$
|
578
|
$
|
752
|
$
|
1,826
|
$
|
1,938
|
|||||
EARNINGS
PER SHARE
|
|||||||||||||
Basic
|
$
|
0.18
|
$
|
0.24
|
$
|
0.58
|
$
|
0.61
|
|||||
Diluted
|
$
|
0.18
|
$
|
0.23
|
$
|
0.57
|
$
|
0.61
|
|||||
See
Notes to Consolidated Financial
Statements
|
SUSSEX
BANCORP
|
|||||||||||||||||||
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS'
EQUITY
|
|||||||||||||||||||
Nine
Months Ended September 30, 2006 and 2005
|
|||||||||||||||||||
(Dollars
In Thousands, Except Per Share Amounts)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
Accumulated
|
|||||||||||||||||||
Number
of
|
Other
|
Total
|
|||||||||||||||||
Shares
|
Common
|
Retained
|
Comprehensive
|
Treasury
|
Stockholders'
|
||||||||||||||
Outstanding
|
Stock
|
Earnings
|
Income
(loss)
|
Stock
|
Equity
|
||||||||||||||
Balance
December 31, 2004
|
2,994,874
|
$
|
25,397
|
$
|
6,116
|
$
|
139
|
$
|
-
|
$
|
31,652
|
||||||||
Comprehensive
income:
|
|||||||||||||||||||
Net
income
|
-
|
-
|
1,938
|
-
|
-
|
1,938
|
|||||||||||||
Change
in unrealized gains (losses) on securities available
|
|||||||||||||||||||
for
sale, net of tax
|
-
|
-
|
-
|
(185
|
)
|
-
|
(185
|
)
|
|||||||||||
Total
Comprehensive Income
|
1,753
|
||||||||||||||||||
Treasury
shares purchased
|
(13,150
|
)
|
-
|
-
|
-
|
(187
|
)
|
(187
|
)
|
||||||||||
Treasury
shares retired
|
-
|
(187
|
)
|
-
|
-
|
187
|
-
|
||||||||||||
Exercise
of stock options
|
36,527
|
278
|
-
|
-
|
-
|
278
|
|||||||||||||
Income
tax benefit of stock options exercised
|
-
|
77
|
-
|
-
|
-
|
77
|
|||||||||||||
Shares
issued through dividend reinvestment plan
|
7,773
|
109
|
-
|
-
|
-
|
109
|
|||||||||||||
Additional
expenses for stock offering
|
-
|
(25
|
)
|
-
|
-
|
-
|
(25
|
)
|
|||||||||||
Dividends
on common stock ($.13 per share)
|
-
|
-
|
(633
|
)
|
-
|
-
|
(633
|
)
|
|||||||||||
5%
Stock Dividend
|
151,301
|
2,039
|
(2,039
|
)
|
-
|
-
|
-
|
||||||||||||
Balance
September 30, 2005
|
3,177,325
|
$
|
27,688
|
$
|
5,382
|
($46
|
)
|
$
|
-
|
$
|
33,024
|
||||||||
Balance
December 31, 2005
|
3,153,004
|
$
|
27,300
|
$
|
5,842
|
($218
|
)
|
$
|
-
|
$
|
32,924
|
||||||||
Comprehensive
income:
|
|||||||||||||||||||
Net
income
|
-
|
-
|
1,826
|
-
|
-
|
1,826
|
|||||||||||||
Change
in unrealized gains (losses) on securities available
|
|||||||||||||||||||
for
sale, net of tax
|
-
|
-
|
-
|
154
|
-
|
154
|
|||||||||||||
Total
Comprehensive Income
|
1,980
|
||||||||||||||||||
Treasury
shares purchased
|
(23,458
|
)
|
-
|
-
|
-
|
(336
|
)
|
(336
|
)
|
||||||||||
Treasury
shares retired
|
-
|
(336
|
)
|
-
|
-
|
336
|
-
|
||||||||||||
Exercise
of stock options
|
6,154
|
56
|
-
|
-
|
-
|
56
|
|||||||||||||
Income
tax benefit of stock options exercised
|
-
|
7
|
-
|
-
|
-
|
7
|
|||||||||||||
Issuance
of 6,450 unvested shares of restricted common
|
|||||||||||||||||||
stock,
net of related unearned compensation
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||
Compensation
expense related to stock option and
|
|||||||||||||||||||
restricted
stock grants
|
-
|
41
|
-
|
-
|
-
|
41
|
|||||||||||||
Compensation
expense related to stock awards
|
1,000
|
15
|
-
|
-
|
-
|
15
|
|||||||||||||
Shares
issued through dividend reinvestment plan
|
6,481
|
93
|
-
|
-
|
-
|
93
|
|||||||||||||
Dividends
on common stock ($.21 per share)
|
-
|
-
|
(665
|
)
|
-
|
-
|
(665
|
)
|
|||||||||||
Balance
September 30, 2006
|
3,143,181
|
$
|
27,176
|
$
|
7,003
|
($64
|
)
|
$
|
-
|
$
|
34,115
|
||||||||
See
Notes to Consolidated Financial
Statements
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|||||||
(Dollars
in Thousands)
|
|||||||
(Unaudited)
|
|||||||
Nine
Months Ended September 30,
|
|||||||
2006
|
2005
|
||||||
Cash
Flows from Operating Activities
|
|||||||
Net
income
|
$
|
1,826
|
$
|
1,938
|
|||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
Provision
for loan losses
|
562
|
547
|
|||||
Provision
for depreciation and amortization
|
671
|
687
|
|||||
Net
amortization of securities premiums and discounts
|
90
|
192
|
|||||
Net
realized gain on sale of securities
|
-
|
(42
|
)
|
||||
Net
gain on sale of equipment
|
-
|
(12
|
)
|
||||
Earnings
on investment in life insurance
|
(74
|
)
|
(69
|
)
|
|||
Compensation
expense for stock options and stock grants
|
56
|
-
|
|||||
Decrease
(increase) in assets:
|
|||||||
Accrued
interest receivable
|
140
|
(193
|
)
|
||||
Other
assets
|
(638
|
)
|
(700
|
)
|
|||
Increase
in accrued interest payable and other liabilities
|
473
|
1,088
|
|||||
Net
Cash Provided by Operating Activities
|
3,106
|
3,436
|
|||||
Cash
Flows from Investing Activities
|
|||||||
Securities
available for sale:
|
|||||||
Purchases
|
(7,541
|
)
|
(4,941
|
)
|
|||
Proceeds
from sale of securities
|
-
|
2,995
|
|||||
Maturities,
calls and principal repayments
|
9,255
|
10,021
|
|||||
Net
increase in loans
|
(39,451
|
)
|
(47,434
|
)
|
|||
Purchases
of bank premises and equipment
|
(1,423
|
)
|
(698
|
)
|
|||
Decrease
(increase) in FHLB stock
|
61
|
(210
|
)
|
||||
Net
decrease in interest bearing time deposits with other
banks
|
400
|
3,400
|
|||||
Net
cash received for branch acquisition
|
2,354
|
-
|
|||||
Net
Cash Used in Investing Activities
|
(36,345
|
)
|
(36,867
|
)
|
|||
Cash
Flows from Financing Activities
|
|||||||
Net
increase in deposits
|
28,415
|
15,295
|
|||||
Proceeds
from borrowings
|
-
|
8,000
|
|||||
Repayments
of borrowings
|
(3,036
|
)
|
-
|
||||
Proceeds
from the exercise of stock options
|
56
|
278
|
|||||
Purchase
of treasury stock
|
(336
|
)
|
(187
|
)
|
|||
Expenses
paid related to stock offering
|
-
|
(25
|
)
|
||||
Dividends
paid, net of reinvestments
|
(572
|
)
|
(524
|
)
|
|||
Net
Cash Provided by Financing Activities
|
24,527
|
22,837
|
|||||
Net
Decrease in Cash and Cash Equivalents
|
(8,712
|
)
|
(10,594
|
)
|
|||
Cash
and Cash Equivalents - Beginning
|
24,780
|
29,294
|
|||||
Cash
and Cash Equivalents - Ending
|
$
|
16,068
|
$
|
18,700
|
|||
Supplementary
Cash Flows Information
|
|||||||
Interest
paid
|
$
|
5,655
|
$
|
2,802
|
|||
Income
taxes paid
|
$
|
926
|
$
|
361
|
|||
Supplementary
Schedule of Noncash Investing and Financing
Activities
|
|||||||
Foreclosed
real estate acquired in settlement of loans
|
$
|
-
|
$
|
270
|
|||
See
Notes to Consolidated Financial Statements
|
Three
Months Ended September 30, 2006
|
Three
Months Ended September 30, 2005
|
||||||||||||||||||
Per
|
Per
|
||||||||||||||||||
Income
|
Shares
|
Share
|
Income
|
Shares
|
|
Share
|
|||||||||||||
(In
thousands, except per share data)
|
(Numerator)
|
(Denominator)
|
Amount
|
(Numerator)
|
(Denominator)
|
Amount
|
|||||||||||||
Basic
earnings per share:
|
|||||||||||||||||||
Net
income applicable to common stockholders
|
$
|
578
|
3,151
|
$
|
0.18
|
$
|
752
|
3,170
|
$
|
0.24
|
|||||||||
Effect
of dilutive securities:
|
|||||||||||||||||||
Stock
options
|
-
|
33
|
-
|
31
|
|||||||||||||||
Diluted
earnings per share:
|
|||||||||||||||||||
Net
income applicable to common stockholders
|
|||||||||||||||||||
and
assumed conversions
|
$
|
578
|
3,184
|
$
|
0.18
|
$
|
752
|
3,201
|
$
|
0.23
|
|||||||||
Nine
Months Ended September 30, 2006
|
Nine
Months Ended September 30, 2005
|
||||||||||||||||||
Per
|
Per
|
||||||||||||||||||
Income
|
Shares
|
Share
|
Income
|
Shares
|
Share
|
||||||||||||||
(In
thousands, except per share data)
|
(Numerator)
|
(Denominator)
|
Amount
|
(Numerator)
|
(Denominator)
|
Amount
|
|||||||||||||
Basic
earnings per share:
|
|||||||||||||||||||
Net
income applicable to common stockholders
|
$
|
1,826
|
3,156
|
$
|
0.58
|
$
|
1,938
|
3,163
|
$
|
0.61
|
|||||||||
Effect
of dilutive securities:
|
|||||||||||||||||||
Stock
options
|
-
|
33
|
-
|
38
|
|||||||||||||||
Diluted
earnings per share:
|
|||||||||||||||||||
Net
income applicable to common stockholders
|
|||||||||||||||||||
and
assumed conversions
|
$
|
1,826
|
3,189
|
$
|
0.57
|
$
|
1,938
|
3,201
|
$
|
0.61
|
|||||||||
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||
(Dollars
in thousands)
|
2006
|
2005
|
2006
|
2005
|
|||||||||
Unrealized
holding gains (losses) on available for sale securities
|
$
|
920
|
($256
|
)
|
$
|
256
|
($266
|
)
|
|||||
Less:
reclassification adjustments for gains included in net
income
|
-
|
(42
|
)
|
-
|
(42
|
)
|
|||||||
Net
unrealized gains (losses)
|
920
|
(298
|
)
|
256
|
(308
|
)
|
|||||||
Tax
effect
|
(368
|
)
|
119
|
(102
|
)
|
123
|
|||||||
Other
comprehensive income (loss), net of tax
|
$
|
552
|
($179
|
)
|
$
|
154
|
($185
|
)
|
|||||
Three
Months Ended September 30, 2006
|
Three
Months Ended September 30, 2005
|
||||||||||||||||||
Banking
and
|
Insurance
|
Banking
and
|
Insurance
|
||||||||||||||||
|
Financial
Services
|
Services
|
Total
|
Financial
Services
|
Services
|
Total
|
|||||||||||||
Net
interest income from external sources
|
$
|
2,852
|
$
|
-
|
$
|
2,852
|
$
|
2,885
|
$
|
-
|
$
|
2,885
|
|||||||
Other
income from external sources
|
699
|
600
|
1,299
|
731
|
536
|
1,267
|
|||||||||||||
Depreciation
and amortization
|
221
|
12
|
233
|
178
|
40
|
218
|
|||||||||||||
Income
before income taxes
|
822
|
22
|
844
|
1,072
|
18
|
1,090
|
|||||||||||||
Income
tax expense
|
257
|
9
|
266
|
331
|
7
|
338
|
|||||||||||||
Total
assets
|
343,166
|
3,345
|
346,511
|
300,604
|
3,349
|
303,953
|
(Dollars
in thousands)
|
Nine
Months Ended September 30, 2006
|
Nine
Months Ended September 30, 2005
|
|||||||||||||||||
Banking
and
|
Insurance
|
Banking
and
|
Insurance
|
||||||||||||||||
|
Financial
Services
|
Services
|
Total
|
Financial
Services
|
Services
|
Total
|
|||||||||||||
Net
interest income from external sources
|
$
|
8,818
|
$
|
-
|
$
|
8,818
|
$
|
8,263
|
$
|
-
|
$
|
8,263
|
|||||||
Other
income from external sources
|
1,938
|
2,021
|
3,959
|
1,939
|
1,753
|
3,692
|
|||||||||||||
Depreciation
and amortization
|
636
|
35
|
671
|
562
|
125
|
687
|
|||||||||||||
Income
before income taxes
|
2,433
|
234
|
2,667
|
2,646
|
81
|
2,727
|
|||||||||||||
Income
tax expense
|
747
|
94
|
841
|
757
|
32
|
789
|
|||||||||||||
Total
assets
|
343,166
|
3,345
|
346,511
|
300,604
|
3,349
|
303,953
|
Three
Months Ended
|
Nine
Months Ended
|
||||||
(Dollars
in thousands)
|
September
30, 2005
|
September
30, 2005
|
|||||
Net
income, as reported
|
$
|
752
|
$
|
1,938
|
|||
Total
stock-based compensation expense determined under fair
value
|
|||||||
based
method for all awards, net of related tax effects
|
(26
|
)
|
(231
|
)
|
|||
Pro
forma net income
|
$
|
726
|
$
|
1,707
|
|||
Basic
earnings per share:
|
|||||||
As
reported
|
$
|
0.24
|
$
|
0.61
|
|||
Pro
forma
|
$
|
0.23
|
$
|
0.54
|
|||
Diluted
earnings per share:
|
|||||||
As
reported
|
$
|
0.23
|
$
|
0.61
|
|||
Pro
forma
|
$
|
0.23
|
$
|
0.53
|
Weighted
|
|||||||||||||
Weighted
|
Average
|
Aggregate
|
|||||||||||
Number
of
|
Average
|
Remaining
|
Intrinsic
|
||||||||||
|
Shares
|
Price
|
Life
|
Value
|
|||||||||
Options
outstanding, beginning of year
|
271,424
|
$
|
12.77
|
||||||||||
Options
exercised
|
(6,154
|
)
|
9.03
|
||||||||||
Options
forfeited
|
(4,621
|
)
|
12.30
|
||||||||||
Options
expired
|
(3,567
|
)
|
8.18
|
||||||||||
Options
outstanding, end of quarter
|
257,082
|
$
|
12.93
|
5.74
|
$
|
434,761
|
|||||||
Options
exercisable, end of quarter
|
232,414
|
$
|
12.96
|
8.27
|
$
|
386,870
|
|||||||
Option
price range at end of quarter
|
$
|
7.32
to $17.52
|
|||||||||||
Option
price range for exercised shares
|
$
|
7.49
to $9.52
|
Weighted
|
|||||||
Average
|
|||||||
Number
of
|
Grant
Date
|
||||||
|
Shares
|
Fair
Value
|
|||||
Restricted
stock, beginning of year
|
-
|
$
|
-
|
||||
Granted
|
6,450
|
14.90
|
|||||
Vested
|
-
|
-
|
|||||
Restricted
stock, end of quarter
|
6,450
|
$
|
14.90
|
7.
|
Branch
Acquisition
|
8.
|
Reclassifications
|
Three
Months Ended September 30,
|
|||||||||||||||||||
(dollars
in thousands)
|
2006
|
2005
|
|||||||||||||||||
Average
|
Average
|
Average
|
Average
|
||||||||||||||||
Earning
Assets:
|
Balance
|
Interest
(1)
|
Rate
(2)
|
Balance
|
Interest
(1)
|
Rate
(2)
|
|||||||||||||
Securities:
|
|||||||||||||||||||
Tax
exempt (3)
|
$
|
24,429
|
$
|
348
|
5.65
|
%
|
$
|
26,495
|
$
|
399
|
5.98
|
%
|
|||||||
Taxable
|
35,441
|
365
|
4.09
|
%
|
43,719
|
400
|
3.63
|
%
|
|||||||||||
Total
securities
|
59,870
|
713
|
4.72
|
%
|
70,214
|
799
|
4.52
|
%
|
|||||||||||
Total
loans receivable (4)
|
247,473
|
4,374
|
7.01
|
%
|
194,053
|
3,259
|
6.66
|
%
|
|||||||||||
Other
interest-earning assets
|
9,185
|
121
|
5.24
|
%
|
9,107
|
80
|
3.47
|
%
|
|||||||||||
Total
earning assets
|
316,528
|
$
|
5,208
|
6.53
|
%
|
273,374
|
$
|
4,138
|
6.01
|
%
|
|||||||||
Non-interest
earning assets
|
26,698
|
24,314
|
|||||||||||||||||
Allowance
for loan losses
|
(3,118
|
)
|
(2,250
|
)
|
|||||||||||||||
Total
Assets
|
$
|
340,108
|
$
|
295,438
|
|||||||||||||||
Sources
of Funds:
|
|||||||||||||||||||
Interest
bearing deposits:
|
|||||||||||||||||||
NOW
|
$
|
60,964
|
$
|
385
|
2.50
|
%
|
$
|
43,922
|
$
|
76
|
0.69
|
%
|
|||||||
Money
market
|
31,580
|
334
|
4.19
|
%
|
19,965
|
127
|
2.52
|
%
|
|||||||||||
Savings
|
44,425
|
101
|
0.91
|
%
|
61,937
|
118
|
0.76
|
%
|
|||||||||||
Time
|
104,616
|
1,167
|
4.43
|
%
|
75,036
|
556
|
2.94
|
%
|
|||||||||||
Total
interest bearing deposits
|
241,585
|
1,987
|
3.26
|
%
|
200,860
|
877
|
1.73
|
%
|
|||||||||||
Borrowed
funds
|
13,265
|
167
|
4.94
|
%
|
14,576
|
169
|
4.54
|
%
|
|||||||||||
Junior
subordinated debentures
|
5,155
|
117
|
8.85
|
%
|
5,155
|
92
|
7.00
|
%
|
|||||||||||
Total
interest bearing liabilities
|
260,005
|
$
|
2,271
|
3.47
|
%
|
220,591
|
$
|
1,138
|
2.05
|
%
|
|||||||||
Non-interest
bearing liabilities:
|
|||||||||||||||||||
Demand
deposits
|
44,581
|
40,005
|
|||||||||||||||||
Other
liabilities
|
1,781
|
2,135
|
|||||||||||||||||
Total
non-interest bearing liabilities
|
46,362
|
42,140
|
|||||||||||||||||
Stockholders'
equity
|
33,741
|
32,707
|
|||||||||||||||||
Total
Liabilities and Stockholders' Equity
|
$
|
340,108
|
$
|
295,438
|
|||||||||||||||
Net
Interest Income and Margin (5)
|
$
|
2,937
|
3.68
|
%
|
$
|
3,000
|
4.35
|
%
|
|||||||||||
(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)
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
|
Nine
Months Ended September 30,
|
|||||||||||||||||||
(Dollars
in thousands)
|
2006
|
2005
|
|||||||||||||||||
Average
|
Average
|
Average
|
Average
|
||||||||||||||||
Earning
Assets:
|
Balance
|
Interest
(1)
|
Rate
(2)
|
Balance
|
Interest
(1)
|
Rate
(2)
|
|||||||||||||
Securities:
|
|||||||||||||||||||
Tax
exempt (3)
|
$
|
24,258
|
$
|
1,056
|
5.82
|
%
|
$
|
27,326
|
$
|
1,245
|
6.09
|
%
|
|||||||
Taxable
|
35,647
|
1,067
|
4.00
|
%
|
46,527
|
1,280
|
3.68
|
%
|
|||||||||||
Total
securities
|
59,905
|
2,123
|
4.74
|
%
|
73,853
|
2,525
|
4.57
|
%
|
|||||||||||
Total
loans receivable (4)
|
234,212
|
12,404
|
7.08
|
%
|
177,891
|
8,748
|
6.57
|
%
|
|||||||||||
Other
interest-earning assets
|
9,118
|
326
|
4.78
|
%
|
10,427
|
225
|
2.89
|
%
|
|||||||||||
Total
earning assets
|
303,235
|
$
|
14,853
|
6.55
|
%
|
262,171
|
$
|
11,498
|
5.86
|
%
|
|||||||||
Non-interest
earning assets
|
25,713
|
23,982
|
|||||||||||||||||
Allowance
for loan losses
|
(2,910
|
)
|
(2,118
|
)
|
|||||||||||||||
Total
Assets
|
$
|
326,038
|
$
|
284,035
|
|||||||||||||||
Sources
of Funds:
|
|||||||||||||||||||
Interest
bearing deposits:
|
|||||||||||||||||||
NOW
|
$
|
55,333
|
$
|
885
|
2.14
|
%
|
$
|
43,028
|
$
|
200
|
0.62
|
%
|
|||||||
Money
market
|
29,122
|
845
|
3.88
|
%
|
20,746
|
326
|
2.10
|
%
|
|||||||||||
Savings
|
47,571
|
307
|
0.86
|
%
|
64,110
|
345
|
0.72
|
%
|
|||||||||||
Time
|
95,957
|
2,870
|
4.00
|
%
|
66,419
|
1,279
|
2.57
|
%
|
|||||||||||
Total
interest bearing deposits
|
227,983
|
4,907
|
2.88
|
%
|
194,303
|
2,150
|
1.48
|
%
|
|||||||||||
Borrowed
funds
|
14,274
|
526
|
4.86
|
%
|
13,189
|
461
|
4.61
|
%
|
|||||||||||
Junior
subordinated debentures
|
5,155
|
329
|
8.42
|
%
|
5,155
|
256
|
6.55
|
%
|
|||||||||||
Total
interest bearing liabilities
|
247,412
|
$
|
5,762
|
3.11
|
%
|
212,647
|
$
|
2,867
|
1.80
|
%
|
|||||||||
Non-interest
bearing liabilities:
|
|||||||||||||||||||
Demand
deposits
|
43,242
|
37,545
|
|||||||||||||||||
Other
liabilities
|
1,902
|
1,682
|
|||||||||||||||||
Total
non-interest bearing liabilities
|
45,144
|
39,227
|
|||||||||||||||||
Stockholders'
equity
|
33,482
|
32,161
|
|||||||||||||||||
Total
Liabilities and Stockholders' Equity
|
$
|
326,038
|
$
|
284,035
|
|||||||||||||||
Net
Interest Income and Margin (5)
|
$
|
9,091
|
4.01
|
%
|
$
|
8,631
|
4.40
|
%
|
|||||||||||
(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
|
(Dollars
in thousands)
|
September
30, 2006
|
December
31, 2005
|
|||||
Non-accrual
loans
|
$
|
2,832
|
$
|
816
|
|||
Non-accrual
loans to total loans
|
1.11
|
%
|
0.39
|
%
|
|||
Non-performing
assets to total assets
|
0.83
|
%
|
0.44
|
%
|
|||
Allowance
for loan losses as a % of non-performing loans
|
110.28
|
%
|
190.04
|
%
|
|||
Allowance
for loan losses to total loans
|
1.25
|
%
|
1.24
|
%
|
|
|
Payments
due by period
|
||||||||||||||
Less
than
|
More
than
|
|||||||||||||||
(In
thousands)
|
Total
|
1
year
|
1-3
years
|
3-5
years
|
5
years
|
|||||||||||
Borrowings
|
$
|
13,264
|
$
|
51
|
$
|
109
|
$
|
13,104
|
$
|
0
|
||||||
Operating
lease obligations
|
2,466
|
420
|
655
|
424
|
967
|
|||||||||||
Purchase
obligations
|
23
|
23
|
-
|
-
|
-
|
|||||||||||
Time
deposits
|
111,607
|
104,278
|
6,178
|
1,088
|
63
|
|||||||||||
Nonqualified
supplemental salary continuation plan
|
1,987
|
-
|
105
|
158
|
1,724
|
|||||||||||
Junior
subordinated debentures
|
5,155
|
-
|
-
|
-
|
5,155
|
|||||||||||
Total
|
$
|
134,502
|
$
|
104,772
|
$
|
7,047
|
$
|
14,774
|
$
|
7,909
|
(Dollars
in thousands)
|
Amount
|
Ratio
|
Minimum
Amount
|
Minimum
Ratio
|
|||||||||
The
Company:
|
|||||||||||||
Leverage
Capital
|
|
$36,127
|
10.70
|
%
|
>$13,500
|
4
|
%
|
||||||
Tier
1 - Risk Based
|
36,127
|
13.13
|
%
|
> 11,003
|
4
|
%
|
|||||||
Total
Risk-Based
|
39,293
|
14.28
|
%
|
> 22,006
|
8
|
%
|
|||||||
The
Bank:
|
|||||||||||||
Leverage
Capital
|
29,176
|
8.72
|
%
|
> 13,384
|
4
|
%
|
|||||||
Tier
1 Risk-Based
|
29,176
|
10.63
|
%
|
> 10,976
|
4
|
%
|
|||||||
Total
Risk-Based
|
32,342
|
11.79
|
%
|
> 21,951
|
8
|
%
|
September
30, 2006
|
September
30, 2005
|
||||||||||||||||||
Change
in
|
Percent
|
Gap
as a
|
Change
in
|
Percent
|
Gap
as a
|
||||||||||||||
Net
Interest
|
Change
in Net
|
%
of
|
Net
Interest
|
Change
in Net
|
%
of
|
||||||||||||||
(Dollars
in thousands)
|
Income
|
Interest
Income
|
Total
Assets
|
Income
|
Interest
Income
|
Total
Assets
|
|||||||||||||
Down
200 basis points
|
$
|
76
|
0.02%
|
|
-1.11%
|
|
($682
|
)
|
-0.23%
|
|
11.39%
|
|
|||||||
Down
100 basis points
|
299
|
-0.09%
|
|
-8.69%
|
|
(134
|
)
|
-0.04%
|
|
4.47%
|
|
||||||||
Up
100 basis points
|
(558
|
)
|
-0.16%
|
|
-16.24%
|
|
(110
|
)
|
-0.04%
|
|
-3.67%
|
|
|||||||
Up
200 basis points
|
(1,394
|
)
|
-0.41%
|
|
-20.27%
|
|
(279
|
)
|
-0.09%
|
|
-4.66%
|
|
(a)
|
Evaluation
of disclosure controls and
procedures
|
(b)
|
Changes
in internal controls.
|
Maximum
|
||||
Total
Number
|
Number
of
|
|||
of
Shares
|
Shares
that
|
|||
Purchased
as
|
May
Yet Be
|
|||
Total
Number
|
Part
of Publicly
|
Purchased
|
||
of
Shares
|
Average
Price
|
Announced
Plans
|
Under
the Plans
|
|
Period
|
Purchased
|
Paid
per Share
|
or
Programs
|
or
Programs
|
July
1, 2006 through July 31, 2006
|
-
|
-
|
-
|
-
|
August
1, 2006 through August 31, 2006
|
15,000
|
$14.25
|
95,421
|
54,579
|
September
1, 2006 through September 30, 2006
|
6,000
|
$14.36
|
101,421
|
48,579
|
Total
|
21,000
|
$14.28
|
101,421
|
48,579
|
Number
|
Description
|
|
|
31.1
|
Certification
of Donald L. Kovach pursuant to Section 302 of the Sarbanes-Oxley
Act of
2002
|
||
|
31.2
|
Certification
of Candace A. Leatham pursuant to Section 302 of the Sarbanes-Oxley
Act of
2002
|
|
32
|
Certification
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
SUSSEX
BANCORP
|
|
|
By:
/s/ Candace A. Leatham
|
CANDACE
A. LEATHAM
|
|
Executive
Vice President and
|
|
Chief
Financial Officer
|
|
Date:
|