FRANKLIN, N. J., Oct. 28, 2010 (GLOBE NEWSWIRE) -- Sussex Bancorp ("Company") (Nasdaq:SBBX) today announced its financial results for the three and nine months ended September 30, 2010.
For the quarter ended September 30, 2010, the Company reported net income of $631 thousand, a decrease of $266 thousand as compared to the third quarter of 2009. Basic and diluted earnings per share were $0.19 in the third quarter of 2010 compared to $0.28 for the third quarter of 2009. For the nine months ended September 30, 2010, the Company's net income decreased $166 thousand, or 9.5%, to $1.6 million from the $1.7 million earned for the same period last year. Diluted earnings per share were $0.48 for the nine months ended September 30, 2010 compared to $0.54 for the same period in 2009.
Highlights for the quarter and nine months ended September 30, 2010 include:
- For the nine months ended September 30, 2010, net interest income (tax equivalent) increased 8.7% over the same period last year driven by a higher net interest margin.
- Net interest margin was 3.76% for the nine months ended September 30, 2010, a 25 basis point increase from 3.51% for the same period last year. This increase was attributed to lower cost of funds.
- Provision for loan losses increased $781 thousand, or 49.3%, for the nine months ended September 30, 2010 as compared to the same period last year, which resulted in a 20.4% growth in the allowance for loan losses. The allowance for loan losses totaled $6.1 million at September 30, 2010, or 1.83% of total loans as compared to $5.5 million, or 1.65% of total loans at December 31, 2009.
- Non-accrual loans remain unchanged at approximately $22 million for the last three quarters.
- Nonperforming assets have declined by $3.6 million, or 11.8%, since June 30, 2010 to $27.0 million at September 30, 2010.
- Return on Average Assets of 0.52% for the third quarter and 0.44% for the nine months.
- At September 30, 2010, the leverage, Tier I and Total Risk Based Capital ratios for Sussex Bank were 8.94%, 12.29% and 13.55%, respectively, all in excess of the ratios required to be deemed "well-capitalized."
Mr. Anthony Labozzetta, Sussex's President and Chief Executive Officer, commented, "During the quarter, we made progress from our efforts in addressing problem assets as we sold off our largest foreclosed asset with a carrying value of $2.0 million and have seen stabilization in our non-accrual loans during the past six months."
For the three months ended September 30, 2010, the Company's net interest income (tax equivalent) decreased $82 thousand, or 1.9%, to $4.3 million from $4.4 million for the third quarter of 2009. The quarterly decline in net interest income was driven by a 26 basis point decrease in the Company's net interest margin to 3.78% for the quarter ended September 30, 2010, which was largely due to a 61 basis point decrease in the average rate received on earning assets. For the nine months ended September 30, 2010, the Company's net interest income (tax equivalent) increased $1.0 million, or 8.7%, to $12.5 million from the $11.5 million earned for the same period last year. The improvement in net interest income was driven by a 25 basis point increase in the Company's net interest margin to 3.76% for the nine months ended September 30, 2010, which was largely due to a 74 basis point decrease in the average rate paid on interest bearing liabilities. The improvement in the average rate paid on interest bearing liabilities is a product of management's effort to reduce funding costs.
The Company reported non-interest income of $1.2 million and $3.5 million for the three and nine month periods ended September 30, 2010, respectively, compared to non-interest income of $1.3 million and $4.1 million for the three and nine month periods ended September 30, 2009, respectively. The decline for the nine month period was largely due to a non-cash other than temporary impairment charge of $171 thousand related to an equity portfolio fund during the second quarter of 2010, lower insurance commissions of $135 thousand for 2010 and non-recurring gains on the sale of fixed assets of $203 thousand during the second quarter of 2009.
The Company's non-interest expenses increased $131 thousand, or 3.5%, to $3.8 million for the three months ended September 30, 2010 and decreased $45 thousand, or 0.4%, to $11.2 million for the nine months ended September 30, 2010 as compared to the same periods in 2009. The increase for the quarter was largely due to an increase of $182 thousand in write-downs on foreclosed real estate and higher loan collection costs of $52 thousand. The aforementioned increases were partly offset by $205 thousand of severance paid in the third quarter of 2009 that was included in salaries and benefits. There were no comparable payments in 2010. The decrease for the nine month period was largely due to a decrease of $247 thousand in write-downs on foreclosed real estate, which was partly offset by an increase in salary and employee benefits expense of $241 thousand, or 4.3% over the same period last year.
At September 30, 2010, non-performing assets, which include non-accrual loans, renegotiated loans and foreclosed real estate, decreased on a linked quarter basis by $3.6 million, or 11.8%, to $27.0 million. The decrease was largely due to a 52.2% decline in foreclosed real estate resulting principally from the sale of the Company's largest foreclosed asset during the third quarter of 2010 and declines in renegotiated loans. The ratio of non-performing assets to total assets for September 30, 2010, June 30, 2010 and September 30, 2009 were 5.58%, 6.32% and 4.31%, respectively. The allowance for loan losses was $6.1 million, or 1.83% of total loans, at September 30, 2010 as compared to $5.5 million, or 1.65% of total loans, at December 31, 2009.
At September 30, 2010, the Company's total assets were $484.2 million, an increase of $29.4 million, or 6.5%, compared to total assets of $454.8 million at December 31, 2009. The Company's total deposits increased $26.6 million, or 7.2%, to $398.7 million at September 30, 2010 from $372.1 million at December 31, 2009. The growth in deposits was primarily in core deposits, (non-interest demand, NOW, savings and money market accounts), which increased $29.6 million, or 10.9%, at September 30, 2010 as compared to December 31, 2009. The Company's gross loans, net of unearned income, increased $648 thousand to $333.6 million at September 30, 2010 from $333.0 million at December 31, 2009, as cash and cash equivalents increased $12.6 million, or 54.4%, to $35.6 million at September 30, 2010. Bank-owned life insurance increased to $10.1 million at September 30, 2010, as the Company purchased an additional $6.5 million during the second quarter of 2010. At September 30, 2010, the Company's total stockholders' equity was $37.0 million, an increase of $2.4 million, or 7.0%, as compared to December 31, 2009.
"A key focus for our Company is to work through and reduce our problem assets, which continue to put downward pressure on our results. In addition, we are focused on building for the future and strengthening our core operating results within a risk management framework. To this end, during the quarter, we have enhanced our senior management team with the addition of a new chief financial officer, a new chief retail officer and the promotion of a new chief credit officer. Our team is committed to executing our community bank strategy of delivering an extraordinary experience for our customers while assisting with their financial needs," stated Mr. Labozzetta.
Sussex Bancorp is the holding company for Sussex Bank, which operates through its main office in Franklin, New Jersey and branch offices in Andover, Augusta, Newton, Montague, Sparta, Vernon and Wantage, New Jersey, Port Jervis and Warwick, New York and for the Tri-State Insurance Agency, Inc., a full service insurance agency located in Sussex County, New Jersey. For additional information, please visit the company's Web site at www.sussexbank.com.
When used in this discussion, the words "believes", "anticipates", "contemplates", "expects" or similar expressions are intended to identify forward looking statements. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Those risks and uncertainties include those listed under Item 1A - Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2009 and 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. 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.
CONTACT: Sussex Bancorp Anthony Labozzetta, President/CEO Steven Fusco, SVP/CFO 973-827-2914