Suffolk Bancorp (the “Company”) (NASDAQ: SUBK), parent company of Suffolk County National Bank (the “Bank”), today reported net income for the fourth quarter of 2012 of $2.0 million, or $0.18 per diluted common share, compared to net income of $1.2 million, or $0.12 per diluted common share, a year ago. For the year ended December 31, 2012, the Company recorded a net loss of $1.7 million, or ($0.17) per diluted common share, compared with a net loss of $78 thousand, or ($0.01) per diluted common share, for the year ended December 31, 2011.
The improvement in fourth quarter 2012 earnings versus the comparable 2011 period resulted from a $3.0 million increase in non-interest income and a $1.9 million reduction in the provision for loan losses in 2012. The higher level of non-interest income resulted principally from a $1.8 million increase in net gains on the sale of loans during the fourth quarter of 2012. Included in this total was a $1.5 million net gain on the sale of portfolio loans previously written down and transferred to held-for-sale during the second quarter of 2012. Partially offsetting these positive factors was a $2.7 million (16.9%) reduction in net interest income and a $344 thousand (2.2%) increase in total operating expenses in the fourth quarter of 2012.
The decrease in the 2012 provision for loan losses resulted from a significant reduction in the level of non-accrual and other criticized and classified loans. At December 31, 2012, the Company reported $16 million in non-accrual loans (excluding non-accrual loans held-for-sale) and $99 million in total criticized and classified loans versus $81 million and $258 million, respectively, at the comparable 2011 date. During 2012, the Company sold $85 million in non-performing and other criticized and classified loans as part of management’s strategy to reduce overall balance sheet risk.
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