Suffolk Bancorp (NASDAQ - SUBK), today announced that it will not file its Quarterly Report on Form 10-Q for the period ended June 30, 2011 within the prescribed time. Following the end of the first quarter in the course of preparing its Form 10-Q, management identified possible deficiencies and/or weaknesses in the company’s internal controls with respect to credit administration and credit risk management, primarily with respect to the timing of the recognition of credit risk, as well as with regard to risk rating which affected the computation of the allowance for loan losses. Suffolk has determined that the allowance for loan losses should be adjusted in certain prior periods and this determination has an effect on the ability to file the Form 10-Q. Suffolk intends to file appropriate disclosure related to prior periods on Form 8-K within the timeframe required.
Suffolk expects pretax earnings for the quarter ended June 30, 2011 of approximately $4.6 million on $1.554 billion of average earning assets, compared to pretax earnings of $6.6 million during second quarter 2010. The change from the second quarter of 2010 was attributable to reduced net interest income as well as greater expenses for compliance, legal, and professional services.
Suffolk further expects that its allowance for loan losses at June 30, 2011 will total approximately $49.6 million or 4.68% of net loans at compared to $20.9 million or 1.8% of net loans at June 30, 2010. The preliminary determination as of June 30, 2011 was made on the basis of a detailed review of approximately 65 percent of the commercial and industrial, and commercial real estate loan portfolios. This review was conducted during a six-week period prior to quarter-end, and considered current appraisals made during the previous twelve months for all commercial real estate loans in excess of $1 million.