SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
-------------------
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ____________
Commission file number 0-29030
SUSSEX BANCORP
(Exact name of registrant as specified in its charter)
New Jersey 22-3475473
- --------------------------------------------------------------------------------
(State of other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
399 Route 23, Franklin, New Jersey 07416
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(Issuer's telephone number, including area code) (973) 827-2914
-------------------------------------------------------------------
N/A
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ X ] No [ ]
As of April 30, 1998 there were 700,749 shares of common stock, no par value,
outstanding.
<PAGE>
SUSSEX BANCORP
FORM 10-QSB
INDEX
Part I - Financial Information
Item I. Financial Statements and Notes to Consolidated
Financial Statements
Item 2. Management's Discussion and Analysis of
Financial condition and Results of Operations
Part II - Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
SUSSEX BANCORP
CONSOLIDATED BALANCE SHEETS
(in Thousands, Except Share Data)
(Unaudited)
March 31, December 31,
1998 1997
--------- ---------
<S> <C> <C>
ASSETS
Cash and Due from Banks ...................... $ 4,457 $ 5,793
Federal Funds Sold ........................... 20,100 7,875
Securities:
Available for Sale, at Market Value ........ 23,124 26,600
Held to maturity ........................... 2,480 2,706
--------- ---------
Total Securities ....................... 25,604 29,306
Loans (Net of Unearned Income) ............... 68,632 68,035
Less: Allowance for Possible
Loan Losses ........................ 706 685
--------- ---------
Net Loans .................. 67,926 67,350
Premises and Equipment, Net .................. 2,337 2,287
Other Real Estate ............................ -0- -0-
Intangible Assets, Primarily
Core Deposit Premiums ...................... 766 787
Other Assets ...................... 1,030 859
--------- ---------
Total Assets ........................ $ 122,220 $ 114,257
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Demand .................................... 21,010 13,807
Savings ................................... 46,294 47,884
Time ...................................... 45,444 38,971
--------- ---------
Total Deposits ...................... 112,748 104,882
Other Liabilities ............................ 640 789
--------- ---------
Total Liabilities ................... 113,388 105,671
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SUSSEX BANCORP
CONSOLIDATED BALANCE SHEETS
(in Thousands, Except Share Data)
(Unaudited)
(continued)
March 31, December 31,
1998 1997
--------- ---------
<S> <C> <C>
Stockholders' Equity:
Common Stock, No Par Value
Authorized 5,000,000 Shares,
Issued and outstanding
700,749 in 1998 and
698,959 in 1997, respectively ............. 5,476 5,412
Retained Earnings ............................ 3,344 3,162
Treasury Stock ............................... (2) (2)
Net Unrealized Gain on Securities
Available for Sale,
net of income taxes ....................... 14 (14)
--------- ---------
Total Stockholders' Equity ................... 8,832 8,586
Total Liabilities and
Stockholders' Equity ...................... $ 122,220 $ 114,257
========= =========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
<TABLE>
<CAPTION>
SUSSEX BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Share Data)
(Unaudited)
Three Months Ended
March 31,
-----------------------
1998 1997
-------- --------
<S> <C> <C>
INTEREST INCOME
Interest and Fees on Loans .................... $ 1,384 $ 1,344
Interest on Securities:
Taxable ...................................... 404 345
Exempt from Federal Income Tax ............... 19 9
Interest on Federal Funds Sold ................... 144 57
-------- --------
Total Interest Income ................... 1,951 1,755
INTEREST EXPENSE Interest on Deposits:
Interest on Savings Deposits ................. 266 242
Interest on Time Deposits .................... 565 489
-------- --------
Total Interest Expense .................. 831 731
Net Interest Income .......................... 1,120 1,024
Provision for Possible
Loan Losses ................................ 21 75
-------- --------
Net Interest Income After
Provision for Possible Loan Losses ........ 1,099 949
NON-INTEREST INCOME
Service charges
on Deposit Accounts ....................... 124 126
Other Income ................................. 59 39
-------- --------
Total Non-interest Income ............... 183 165
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SUSSEX BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Share Data)
(Unaudited)
(continued)
Three Months Ended
March 31,
-----------------------
1998 1997
-------- --------
<S> <C> <C>
NON-INTEREST EXPENSE
Salaries and Employee Benefits ............... 511 464
Occupancy Expense, Net ....................... 92 94
Furniture and Equipment Expense .............. 95 90
Data Processing Expense ...................... 18 16
Amortization of Intangibles .................. 21 21
Other Expenses ............................... 262 242
-------- --------
Total Non-Interest Expense .............. 999 927
Income Before Provision for Income Taxes ......... 283 187
Provision for Income Taxes ....................... 101 63
-------- --------
Net Income .............................. $ 182 $ 124
======== ========
Basic Net Income Per Common Share ................ $ 0.26 $ 0.18
Diluted Net Income Per Common Share .............. $ 0.25 $ 0.17
======== ========
Weighted Average Shares Outstanding .............. 699,433 675,051
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
<TABLE>
<CAPTION>
SUSSEX BANCORP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands)
(Unaudited)
Three Months Ended
March 31,
-----------------------
1998 1997
-------- --------
<S> <C> <C>
Net Income .......................................... $ 182 $ 124
Other comprehensive income,
net of tax
unrealized loss on available-for-sale
securities .................................... 19 46
-------- --------
Comprehensive Income ................................ $ 201 $ 78
======== =======
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
<TABLE>
<CAPTION>
SUSSEX BANCORP
CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY
(In Thousands, Except Share Data)
(Unaudited)
Unrealized
Gain (Loss) on Total
Common Retained Treasury on Securities Stockholders
Stock Earnings Stock Available for Sale Equity
----- -------- ----- ------------------ ------
<S> <C> <C> <C> <C> <C>
Balance December 31, 1997 ..... $5,412 $3,162 $ (2) $ 14 $8,586
Net Income for the Period ..... 182 182
Shares issued through
dividend reinvestment plan .. 35 35
Stock Option Exercised ........ 29 29
Change in unrealized gain on
securities available for sale 1 1
------ ------ ------ ------ ------
Balance March 31, 1998 ........ $5,476 $3,344 $ (2) $ 15 $8,833
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS
OF CASH FLOWS
(Unaudited)
Three Months Ended
March
----------------------
1998 1997
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income ..................................... $ 182 $ 124
Adjustments to reconcile net income
to net cash provided by Operating
Activities:
Depreciation and Amortization of Premises
and Equipment .................................. 80 66
Amortization of Intangible Assets .................. 21 20
Premium amortization (discount accretion)
of securities, net ............................. 14 12
Provision for Possible Loan Loses .................. 21 75
Accretion of Loan origination and
commitment fees, net ........................... 12 6
Deferred Federal income tax benefit
(increase) ..................................... 49 101
Decrease (Increase) in Accrued Interest
Receivable ..................................... (100) (208)
Decrease (Increase) in Other Assets ................ (70) (123)
Decrease (Increase) in Accrued Interest
and Other Liabilities .......................... (149) (124)
-------- --------
Net Cash Provided by Operating Activities ... $ 60 $ (51)
Cash Flow from Investing Activities:
Securities Available for Sale:
Proceeds from Maturities and Paydowns ....... 857 96
Proceeds from Sales/Calls Prior to Maturity . 5,000 --
Purchases ................................... (2,390) --
Securities Held to maturity:
Proceeds from Maturities .................... 295 --
Purchases ................................... (70) (295)
Net Increase in Loans Outstanding .............. (597) (1,412)
Capital Expenditures ........................... (130) (101)
Net Increase in Other Real Estate .............. -- 17
-------- --------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS
OF CASH FLOWS
(Unaudited)
(continued)
Three Months Ended
March
----------------------
1998 1997
-------- --------
<S> <C> <C>
Net Cash Provided by (used in)
Investing Activities ...................... $ 2,965 $ (1,695)
Cash Flows from Financing Activities:
Net (Decrease) Increase Total Deposits ...... 7,881 1,230
Payment of dividends ........................... -- (40)
Net Cash (used in) Provided by
Financing Activities ................... $ 7,881 $ 1,190
Net increase (Decrease) in Cash and
Cash Equivalents ........................ 10,906 (556)
Cash and Cash Equivalents,
Beginning of Period ..................... 13,568 8,964
Cash and Cash Equivalents,
End of Period .......................... $ 24,474 $ 8,408
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
SUSSEX BANCORP AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Basis of Presentation
Sussex Bancorp ("the Company"), a one-bank holding company, was incorporated
in January, 1996 to serve as a holding company for the Sussex County State Bank
("the Bank"). The Bank is the only active subsidiary of the Company at March 31,
1998. The Bank operates seven banking offices all located in Sussex County. The
Company is subject to the supervision and regulation of the Board of Governors
of the Federal Reserve System (the "FRB"). The Bank's deposits are insured by
the Bank Insurance Fund ("BIF") of the Federal Deposit Insurance Corporation
("FDIC") up to applicable limits. The operations of the Company and the Bank are
subject to the supervision and regulation of the FRB, FDIC and the New Jersey
Department of Banking and Insurance (the "Department").
The consolidated financial statements included herein have been prepared
without audit in accordance with the rules and regulations of the Securities and
Exchange Commission and reflect all adjustments which, in the opinion of
management, are necessary for a fair statement of the results for interim
periods. All adjustments made were of a normal recurring nature. These
consolidated financial statements should be read in conjunction with the
consolidated financial statements and the notes thereto that are included in the
Company's Annual Report on Form 10-KSB for the fiscal period ended December 31,
1997.
2. Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include cash
and due from banks and federal funds sold. Generally, federal funds are sold for
a one day period.
<PAGE>
SUSSEX BANCORP AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
3. Securities
The amortized cost and approximate market value of securities are summarized
as follows (in thousands):
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
----------------------- ----------------------
Amortized Market Amortized Market
Cash Value Cash Value
------- ------- ------- -------
<S> <C> <C> <C> <C>
Securities Available
For Sale -
U. S. Treasury Securities ...... $ 7,544 $ 7,559 $ 8,049 $ 8,049
U. S. Government
Backed Securities ......... 15,555 15,565 18,529 18,551
------- ------- ------- -------
Total ...................... $23,099 $23,124 $26,578 $26,600
Securities Held to Maturity -
Obligations of State and
Political Subdivisions .. 1,787 1,791 2,082 2,089
Other Debt Securities ... 693 693 624 624
------- ------- ------- -------
Total 2,480 2,484 2,706 2,713
Total Securities .. $25,579 $25,608 $29,284 $29,313
======= ======= ======= =======
</TABLE>
4. Recently Issued Accounting Pronouncements
The Company adopted Statement of Financial Accounting Standards No. 130
"Reporting Comprehensive Income" ("Statement 130") effective March 31, 1998.
Statement 130 establishes standards for reporting and display of comprehensive
income and its components in a full set of general purpose financial statements.
Under Statement 130, comprehensive income is divided into net income and other
comprehensive income. Other comprehensive income includes items previously
recorded directly in equity, such as unrealized gains or losses on securities
available-for-sale. Statement 130 became effective for interim and annual
periods beginning after December 15, 1997. Comparative financial statements
provided for earlier periods are reclassified to reflect application of the
provisions of the statement.
<PAGE>
SUSSEX BANCORP AND SUBSIDIARY
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three Months Ended March 31, 1998 and March 31, 1997.
OVERVIEW
The Company realized net income of $182 thousand for the first quarter of 1998,
a increase of $58 thousand, or 46.8% from the $124 thousand reported for the
same period in 1997. Basic earnings per share were $.26 for the quarter ended
March 31, 1998 as compared to $.18 for the prior period, and diluted earnings
per share were $0.25 and $0.17 for the periods ended March 31, 1998 and 1997
respectively.
Interest Income. Total interest income increased $196 thousand, or 11.2%, to $2
million for the three months ended March 31, 1998 from $1.8 million for the
three months ended March 31, 1997. This growth in interest income is the result
of a $13.3 million increase in earning assets over the comparable period of last
year, partially offset by a decrease in the average yield on total earning
assets to 7.28% during the quarter compared to 7.48% during the quarter ended
March 31, 1997. The decline in average yield reflects reinvestment of mortgage
principal repayments and amortization and cash flows from called and maturing
investment securities being reinvested at lower current market rates of
interest, as well as the Company's decision to offer lower rate products in its
efforts to retain its market share.
Interest Expense. Interest expense on deposits increased $101 thousand, or
13.8%, during the current quarter compared to the comparable quarter a year ago.
The average balance of interest bearing deposits increased $8.3 million, or
10.4%, for the quarter ended March 31, 1998 over the comparable quarter in the
prior year. This growth is primarily the result of the Company marketing a
Certificate of Deposit which was not being offered by its competitors. The
average cost of the interest-bearing deposits increased to 3.78% during the
current quarter, from 3.73% during the comparable quarter in the prior year.
Table 1 following presents a summary of the Company's interest-earning assets
and their average yields, and interest-bearing liabilities and their average
costs and shareholders' equity for the three months ended March 31, 1998 and
1997. The average balance of loans includes non-accrual loans, and associated
yields include loan fees which are considered adjustment to yields.
<PAGE>
<TABLE>
<CAPTION>
Comparative Average
Balance Sheets
Three Months Ended March 31,
---------------------------------------------------------------------
1998 Average 1997 Average
Interest Rates Rates
Average Income/ Earned/ Average Income Earned/
Balance Expense Paid Balance Expense Paid
------- ------- ---- ------- ------- ----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Assets
Interest Earning assets:
Taxable loans (net of unearned
income)............................ $ 68,549 $ 1,384 8.08% $ 66,208 $1,344 8.09%
Tax exempt securities.............. 1,906 19 4.21% 829 9 5.85%
Taxable investment securities.. 26,462 404 6.11% 22,537 345 6.09%
Interest bearing deposits.......... 86 1 4.65% 0 0 0.00%
Federal Funds sold................. 10,305 144 5.59% 4,446 57 5.26%
Total earning assets............... 107,308 1,952 7.28% 94,020 1,755 7.48%
Non-interest earning assets........ 8,133 8,388
Allowance for possible
loan losses...................... (697) (602)
Total Assets................. $114,744 $101,806
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Comparative Average
Balance Sheets
Three Months Ended March 31,
---------------------------------------------------------------------
1998 Average 1997 Average
Interest Rates Rates
Average Income/ Earned/ Average Income Earned/
Balance Expense Paid Balance Expense Paid
------- ------- ---- ------- ------- ----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Liabilities and Shareholders' Equity
Interest bearing liabilities:
NOW deposits....................... $12,951 $ 61 1.88% $ 12,578 $ 59 1.90%
Savings deposits................... 26,680 179 2.50% 26,625 164 2.50%
Money market deposits ............. 4,347 26 2.39% 3,529 19 2.30%
Time deposits ......................... 41,953 566 5.40% 36,947 489 5.46%
Total interest bearing
liabilities ............. 87,931 832 3.78% 79,679 731 3.73%
Non-interest bearing liabilities:
Demand Deposits ................... $ 17,517 $ 13,286
Other liabilities ................. 915 939
Total non-interest bearing
liabilities........................ 18,432 14,225
Shareholders' equity .............. 8,381 7,902
Total liabilities and shareholders'
equity.......................... $114,744 $101,806
New interest differential ......... $ 1,120 $ 1,992
Net yield on interest-earning
assets ......................... 4.22% 4.32%
</TABLE>
Provision for Loan Losses. The provision for loan losses for the three months
ended March 31, 1998 was $21 thousand compared to $75 thousand for the same
period last year. The decrease in the provision for loan losses reflects
management's judgments concerning the risks inherent in the Company's existing
loan portfolio and the size of the allowance necessary to absorb those risks.
Management reviews the adequacy of its allowance on an ongoing basis and will
provide for additional provisions in future periods as may be necessary.
Other Income. The Company's other income is primarily generated through service
charges on deposit accounts. The Company's other income increased from $165
thousand for the quarter ended March 31, 1997 to $183 thousand for the quarter
ended March 31, 1998. This increase was primarily attributable to a $20 thousand
increase in income from the sale of non-deposit products, primarily mutual
funds.
Income Taxes. Income tax expense increased $38 thousand to $101 thousand for the
first quarter of 1998 compared to $63 thousand for the same period in 1997. The
increase in income taxes resulted from higher levels of taxable income in 1998.
<PAGE>
FINANCIAL CONDITION
March 31, 1998 as compared to December 31, 1997
Total assets increased to $122.2 million, an $8.0 million, or 7% increase from
total assets of $114.3 million at December 31, 1997. There were increases of
$12.2 million in Federal Funds sold, $597 thousand in total loans, and $200
thousand in all other assets, which consists of premises and equipment, other
real estate, intangible assets, and other assets. This was offset by decrease
$1.3 million in cash and due from banks.
Total loans at March 31, 1998 increased $597 thousand to $68.6 million at March
31, 1997. Within the portfolio, commercial and industrial loans increased $323
thousand, or 13% from December 31, 1997 to $2.8 million at March 31, 1998.
The following schedule presents the components of loans, net of unearned income,
by type, for each periods presented.
<TABLE>
<CAPTION>
March 31 December 31
1998 1997
----------------------- -----------------------
Amount Percent Amount Percent
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Commercial and industrial............... $2,822 4.11% $ 2,499 3.75%
Real Estate non residential
properties......................... 10,889 15.87% 10,665 15.87%
Residential properties............. 51,042 74.37% 51,257 75.30%
Construction .......................... 1,018 1.48% 877 1.30%
Lease financing ........................ 166 0.24% 0 0
Consumer .............................. 2,695 3.93% 2,765 4.06%
------- ------ ------- ------
Total Loans ........................... $68,632 100.00% $65,464 100.00%
======= ====== ======= ======
</TABLE>
Federal funds sold increased by $12.2 million over December 31, 1997. The
increase is attributable both to the short term investment of a public deposit
received by the Bank and cash from prepayments and repayments in the investment
portfolio exceeding new loan demand. Subsequent to March 31, 1998, the Company
reinvested this excess cash in new investment securities.
Total average deposits increased $10 million, or 10.10%. Time deposits over
$100,000 increased by $5.4 million, savings deposits increased by $270 thousand
and demand deposits increased by $2.9 million. Management continues to monitor
the shift in deposits through its Asset/Liability committee.
<PAGE>
The following schedule presents the components of deposits, for each periods
presented.
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
----------------------- ----------------------
Average Average
Amount % Amount %
-------- ------ -------- ------
<S> <C> <C> <C> <C>
NOW deposits ........................... $ 12,863 11.92% $ 12,593 12.85%
Savings deposits ..................... 28,754 28.64% 28,109 28.67%
Money market deposits ................ 4,324 4.00% 3,580 3.65%
Time deposits ........................ 43,253 40.07% 37,874 38.63%
Demand deposits ...................... 18,749 17.37% 15,886 16.20%
-------- ------ -------- ------
Total interest-bearing liabilities . $107,943 100.00% $ 98,042 100.00%
======== ====== ======== ======
</TABLE>
ASSET QUALITY
At March 31, 1998, non-performing loans decreased $121 thousand, as compared to
December 31, 1997. The decrease was attributable to real estate loans which were
restored to performing status. Management continues to work diligently to reduce
the Company's non-performing loans.
The following table provides an analysis of non-performing loans and assets:
<TABLE>
<CAPTION>
March 31 December 31
1998 1997
---- ----
<S> <C> <C>
Non-accrual loans.................... $ 609 $ 730
Non-accrual loans to
total loans....................... .89% 1.07%
Non-performing assets
to total assets................... .50% .64%
Allowance for possible
loan losses as a percentage of
non-performing loans............... 86.26% 93.80%
</TABLE>
ALLOWANCE FOR POSSIBLE LOAN LOSSES
The allowance for possible loan losses is maintained at a level considered
adequate to provide for potential loan losses. The level of the allowance is
based on management's evaluation of potential losses in the portfolio, after
consideration of risk characteristics of the loans and prevailing and
anticipated economic conditions. The allowance is increased by provisions
charged to expense and reduced by charge-offs, net of recoveries. Although
management strives to maintain an allowance it deems adequate, future economic
changes, deterioration of borrowers' credit worthiness, and the impact of
examinations by regulatory agencies all could cause changes to the Company's
allowance for possible loan losses.
<PAGE>
At March 31, 1998, the allowance for possible loan loses was $706 thousand, up
3.07% from the $685 thousand at year-end 1997. There were no net charge-offs
during the first quarter of 1998.
LIQUIDITY MANAGEMENT
At March 31, 1998, the amount of liquid assets remained at a level management
deemed adequate to ensure that contractual liabilities, depositors' withdrawal
requirements, and other operational and customer credit needs could be
satisfied.
At March 31, 1998, liquid investments totaled $20 million, and all mature within
30 days.
CAPITAL RESOURCES
Total Stockholders' equity increased $246 thousand to $8.8 million at March 31,
1998 from $8.6 million at year end 1997. The increase was due primarily to net
income of $182 thousand for the first three months of 1998.
At March 31, 1998, both the Company and the Bank exceeded each of the regulatory
capital requirements applicable to it. The table below presents the capital
ratios at March 31, 1998 for both the Company and the Bank as well as the
minimum regulatory requirements.
<TABLE>
<CAPTION>
Regulatory
Amount Ratio Amount Minimum Ration
------ ----- ------ --------------
The Company
<S> <C> <C> <C> <C>
Leverage Capital 8,066 7.03% 3,442 3,5%
Tier 1 - Risk Based 8,066 14.26% 2,263 4%
Total Risk-Based 8,772 15.50% 4,526 8%
The Bank
Leverage Capital 7,739 6.79% 3,419 3-5%
Tier 1 Risk-Based 7,739 13.86% 2,234 4%
Total Risk-Based 8,437 15.11% 4,468 8%
</TABLE>
<PAGE>
PART II
Item 1 Legal Proceedings
The Company and the Bank are periodically involved in various legal
proceedings as a normal incident to their businesses. In the opinion of
management, no material loss is expected from any such pending lawsuit.
Item 2 Changes in Securities
Not applicable
Item 3 Defaults Upon Served Securities
Not applicable
Item 4 Submission of Matters to a Vote of Security Holders
Not applicable
Item 5 Other Information
Not applicable
Item 6 Exhibits and Report on form 8-K
(a) Exhibits
Number Description
27 Financial Data Schedule
(b) Reports on Form 8-K
Date of Event Event Reported
------------- --------------
January 23, 1998 Item 4 - The Registrant reported that it had
replaced its prior independent auditors, Arthur
Anderson, L.L.P., with Radics & Co., L.L.P.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SUSSEX BANCORP
Date: May 15, 1998 By: /s/ Candace A. Leatham
-------------------------
CANDACE A. LEATHAM
Senior Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 4,357
<INT-BEARING-DEPOSITS> 100
<FED-FUNDS-SOLD> 20,100
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 23,124
<INVESTMENTS-CARRYING> 2,480
<INVESTMENTS-MARKET> 0
<LOANS> 67,926
<ALLOWANCE> 706
<TOTAL-ASSETS> 122,220
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 0
<LONG-TERM> 0
0
0
<COMMON> 5,476
<OTHER-SE> 3,356
<TOTAL-LIABILITIES-AND-EQUITY> 122,220
<INTEREST-LOAN> 1,384
<INTEREST-INVEST> 567
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 1,951
<INTEREST-DEPOSIT> 831
<INTEREST-EXPENSE> 831
<INTEREST-INCOME-NET> 1,120
<LOAN-LOSSES> 21
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 999
<INCOME-PRETAX> 283
<INCOME-PRE-EXTRAORDINARY> 283
<EXTRAORDINARY> 0
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