Sussex Bancorp Announces Increased First Quarter 2006 Earnings

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FRANKLIN, N.J., April 20  /PRNewswire-FirstCall/ -- Sussex Bancorp (AMEX:SBB) today announced its financial results for the first quarter ending March 31, 2006.

  * Cash dividend of $0.07 per share
  * Quarterly earnings increased by 15%
  * Earnings per share increased over 18%
  * Increased share repurchase plan by 50,000 shares



For the quarter ended March 31, 2006, the Company earned net income of $596,000, an increase of approximately 15 percent over net income of $520,000 for the first quarter of 2005.   Basic earnings per share for the two periods were $0.19 and $0.16 respectively.  Diluted earnings per share were $0.19 and $0.16 for the two periods.

The Company's net interest income increased to $2,915,000 for the quarter ended March 31, 2006 from $2,636,000 for the first quarter of 2005. The Company's interest income increased to $4,581,000 for the three months ended March 31, 2006 from $3,423,000 for the first quarter of 2005.  The Company's interest expense increased to $1,666,000 for the first quarter of 2006 from $767,000 for the first quarter of 2005.

The Company's total deposits increased to $272.4 million at March 31, 2006 from $228.0 million at March 31, 2005.  The Company's total loans increased $63.0 million to $229.6 million at March 31, 2006 from $166.6 million at March 31, 2005.  At March 31, 2006 the Company had total assets of $326.4 million, compared to total assets of $280.2 million at March 31, 2005.  The increase in deposits and loans is partially attributable to the bank's acquisition of $6.3 million in deposits and $3.4 million in loans in connection with its purchase of the Port Jervis, New York branch of NBT Bancorp.  The loan loss provision for the first quarter was $216,000 compared to $135,000 for the same period last year.

Sussex Bancorp also announced that its Board of Directors declared a cash dividend of $0.07 per share, payable on May 26, 2006 to shareholders of record as of May 5, 2006.

In addition, the Board of Sussex Bancorp also increased the Company's share repurchase program by 50,000 shares, to a total of 150,000 shares. The Company has already repurchased 78,483 shares under the program. Purchases may be made in open market or privately negotiated transactions.

Mr. Donald L. Kovach, Chairman and Chief Executive Officer of the Company, stated, "First quarter results were in line with our expectations and reflect the continued execution of our strategic plan.  We will continue to drive growth through expansion into contiguous markets and will focus on building assets through superior service and product offerings."

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, New York 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)

                                 March 31,       March 31,  December 31,
  ASSETS                             2006            2005          2005

  Cash and due from banks         $10,742          $9,922       $11,395
  Federal funds sold               11,780          12,800        13,385
   Cash and cash equivalents       22,522          22,722        24,780

  Interest bearing time deposits
   with other banks                   500             500           500
  Securities available for sale    58,354          75,509        61,180
  Federal Home Loan Bank Stock,
   at cost                            890             700         1,025

  Loans receivable, net of
   unearned income                229,614         166,639       211,335
     Less: allowance for loan
      losses                        2,824           1,828         2,615
       Net loans receivable       226,790         164,811       208,720

  Premises and equipment, net       6,688           5,952         6,619
  Accrued interest receivable       1,439           1,409         1,778
  Goodwill                          2,837           2,334         2,334
  Other assets                      6,367           6,282         6,246

  Total Assets                   $326,387        $280,219      $313,182

  LIABILITIES AND STOCKHOLDERS'
   EQUITY

  Liabilities:
   Deposits:
    Non-interest bearing          $51,978         $31,934       $39,148
    Interest bearing              220,456         196,020       217,699
   Total Deposits                 272,434         227,954       256,847

  Borrowings                       13,288          14,000        16,300
  Accrued interest payable
   and other liabilities            2,156           1,569         1,956
  Junior subordinated debentures    5,155           5,155         5,155

  Total Liabilities               293,033         248,678       280,258

  Total Stockholders' Equity       33,354          31,541        32,924

  Total Liabilities and
   Stockholders' Equity          $326,387        $280,219      $313,182



                              SUSSEX BANCORP
                    CONSOLIDATED STATEMENTS OF INCOME
               (Dollars In Thousands Except Per Share Data)

                                                Three Months Ended March 31,
                                                      2006           2005
  INTEREST INCOME
  Loans receivable, including fees                  $3,813         $2,620
  Securities:
   Taxable                                             353            447
   Tax-exempt                                          261            293
  Federal funds sold                                   149             40
  Interest bearing deposits                              5             23
   Total Interest Income                             4,581          3,423

  INTEREST EXPENSE
  Deposits                                           1,372            578
  Borrowings                                           191            131
  Junior subordinated debentures                       103             78
   Total Interest Expense                            1,666            787

   Net Interest Income                               2,915          2,636
  PROVISION FOR LOAN LOSSES                            216            135
  Net Interest Income after Provision
   for Loan Losses                                   2,699          2,501

  OTHER INCOME
   Service fees on deposit accounts                    320            236
   ATM fees                                             82             83
   Insurance commissions and fees                      733            595
   Mortgage broker fees                                  4             58
   Investment brokerage fees                            52             64
   Other                                               100             65
    Total Other Income                               1,291          1,101

  OTHER EXPENSES
   Salaries and employee benefits                    1,639          1,594
   Occupancy, net                                      271            255
   Furniture, equipment and data processing            278            251
   Stationary and supplies                              51             48
   Professional fees                                   178            115
   Advertising and promotion                           185            116
   Insurance                                            58             42
   Postage and freight                                  52             45
   Amortization of intangible assets                    33             64
   Other                                               384            373
    Total Other Expenses                             3,129          2,903

    Income before Income Taxes                         861            699
  PROVISION FOR INCOME TAXES                           265            179
    Net Income                                        $596           $520



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

  (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)    $24,178     $356     5.96%  $27,498     $420     6.19%
   Taxable           36,546      353     3.92%   48,887      447     3.71%
  Total securities   60,724      709     4.73%   76,385      867     4.60%
  Total loans
   receivable(4)    219,172    3,813     7.06%  163,732    2,620     6.49%
  Other interest-
   earning assets    14,220      154     4.41%   11,075       63     2.32%
  Total earning
   assets           294,116   $4,676     6.45%  251,192   $3,550     5.73%

  Non-interest
   earning assets    24,768                      23,795
  Allowance for
   loan losses       (2,707)                     (2,200)
  Total Assets     $316,177                    $272,787

  Sources of Funds:
  Interest
   bearing
   deposits:
    NOW             $48,402     $201     1.68%   $7,386       $9     0.49%
    Money market     27,663      242     3.54%   57,329      140     0.99%
    Savings          50,798      103     0.82%   66,464      115     0.70%
    Time             92,147      827     3.64%   59,613      314     2.14%
  Total interest
   bearing
   deposits         219,010    1,372     2.54%  190,792      578     1.23%
    Borrowed funds   16,192      191     4.72%   10,951      131     4.77%
    Junior
     subordinated
     debentures        5,155     103     7.97%    5,155       78     6.08%
  Total interest
   bearing
   liabilities       240,357  $1,666     2.81%  206,898     $787     1.54%

  Non-interest
   bearing
   liabilities:
    Demand deposits   40,491                     32,747
     Other
      liabilities      2,084                      1,372
  Total non-interest
   bearing
   liabilities        42,575                     34,119
  Stockholders'
   equity             33,245                     31,770
  Total Liabilities
   and Stockholders'
   Equity           $316,177                   $272,787

  Net Interest
   Income and
   Margin(5)                  $3,010     4.15%            $2,763     4.46%

  (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


DATASOURCE: Sussex Bancorp



CONTACT:  Candace Leatham, Executive Vice President and Treasurer of

Sussex Bancorp, [phone]



Web site:  http://www.sussexbank.com/ 

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