Suffolk Bancorp Announces Results For The Third Quarter Of 2011

Suffolk Bancorp (NASDAQ - SUBK) today released the preliminary, unaudited results of its operations during the third quarter of 2011. Earnings-per-share were $0.32. Net income was $3,072,000. A detailed financial summary follows the text. There are no comparisons to the third quarter of 2010 because, as previously disclosed, on August 10, 2011, the Audit Committee of the Board of Directors of Suffolk made a determination of non-reliance on the financial statements previously filed with respect to the three and nine months ended September 30, 2010 and the three and twelve months ended December 31, 2010. The financial restatements of these periods, as well as the financial statements with regard to the three months ended March 31, 2011 and the three and six months ended June 30, 2011 have not yet been filed as the processes for those periods are not yet complete.

The key points are:
  • Suffolk was profitable during the third quarter of 2011.
  • Suffolk exceeded the capital ratios for a “well-capitalized” institution as of September 30, 2011 under 12 CFR 6.4, and further, exceeded each of the individual minimum capital ratios agreed upon with regulators.
  • Suffolk’s allowance for loan losses at September 30, 2011 was $43,693,000, or 4.3 percent of total loans.
  • Suffolk’s net interest margin (FTE) for the quarter was 4.72 percent.

President and Chief Executive Officer, J. Gordon Huszagh commented, “We are releasing the results of our operations for the third quarter in preliminary form to provide our shareholders, customers, and employees with information as to the condition and prospects of Suffolk Bancorp, and its banking subsidiary, Suffolk County National Bank. The process of restating the third and fourth quarters of 2010 and moving forward to definitive statements for the first and second quarters of 2011 has taken far longer than any of the parties involved anticipated, and we continue to work diligently to make those filings as soon as possible. We felt it was important to inform all interested parties that Suffolk County National Bank is profitable on a quarterly basis, has substantial capital, and has an allowance for possible loan losses based on a comprehensive analysis of the loan portfolio. We are, therefore, and expect to continue to be, able to conduct our business; whether through loans to creditworthy borrowers, or by accepting deposits, or providing any one of the other services we have offered to the customers in each of the communities we have served in the past.”

Mr. Huszagh went on to say, “We want to emphasize that these results are preliminary, and subject to change, although we believe them to be approximately correct. For that reason, we will reserve our usual commentary on these results until they are final. In the meantime, we hope that the information contained in this release will provide a reasonable basis for the public to evaluate Suffolk Bancorp and its future, and to put to rest any speculation about our business.”

Suffolk Bancorp is a one-bank holding company engaged in the commercial banking business through Suffolk County National Bank (“SCNB”), a full-service commercial bank headquartered in Riverhead, New York. Organized in 1890, SCNB has 30 offices in Suffolk County, New York.

Safe Harbor Statement Pursuant to the Private Securities Litigation Reform Act of 1995

This press release includes statements which look to the future. These can include remarks about Suffolk Bancorp, the banking industry, the economy in general, expectations of the business environment in which Suffolk operates, the adequacy of our allowance for loan losses, projections of future performance, and potential future credit experience. These forward-looking statements are based upon current management expectations, and may, therefore, involve risks and uncertainties that cannot be predicted or quantified and are beyond Suffolk’s control and are subject to a variety of uncertainties that could cause future results to vary materially from Suffolk’s historical performance, or from current expectations. Factors affecting Suffolk Bancorp include particularly, but are not limited to: changes in interest rates; increases or decreases in retail and commercial economic activity in Suffolk’s market area; variations in the ability and propensity of consumers and businesses to borrow, repay, or deposit money, or to use other banking and financial services; a failure to file our Quarterly Reports for the quarters ended March 31, 2011 and June 30, 2011 on or before November 7, 2011; a failure to comply with Nasdaq rules; results of regulatory examinations; any failure by us to comply with our written agreement with the OCC (the “Agreement”) or the individual minimum capital ratios for the Bank established by the OCC; the cost of compliance with the Agreement; failure by us to maintain effective internal controls over financial reporting; larger-than-expected losses from the sale of assets; potential litigation or regulatory action relating to the matters resulting in our failure to file on time our Quarterly Report on Form 10-Q for the quarters ended March 31, 2011 and June 30, 2011 or resulting from the revisions to our earnings previously announced on April 12, 2011 or the restatement of our financial statements for the quarterly period ended September 30, 2011 and year ended December 31, 2010; and the potential that net charge-offs are higher than expected or for further increases in our provision for loan losses. Further, it could take Suffolk longer than anticipated to implement its strategic plans to increase revenue and manage non-interest expense, or it may not be possible to implement those plans at all. Finally, new and unanticipated legislation, regulation, or accounting standards may require Suffolk to change its practices in ways that materially change the results of operations.

SUFFOLK BANCORP

STATISTICAL SUMMARY

(unaudited, in thousands of dollars except for share and per share data)
   

3rd Qtr 2011

9 Mos. 2011

EARNINGS
Earnings-Per-Share - Basic

$

0.32
$

(0.13)
Cash Dividends-Per-Share - -
Net Income

3,072

(1232)
Net Interest Income 17,025 53,320

AVERAGE BALANCES

Average Assets
$ 1,572,758 $ 1,609,507

Average Net Loans

984,681

1,036,213
Average Investment Securities 329,713 379,122
Average Interest-Earning Assets 1,511,596 1,542,301
Average Deposits 1,402,353 1,414,657
Average Borrowings 289 27,101
Average Interest-Bearing Liabilities 872,426 928,340
Average Equity 136,024 134,959

RATIOS
Return on Average Equity 9.03%

(1.22%)
Return on Average Assets 0.78%

(0.10%)
Average Equity/Average Assets 8.65% 8.39%
Net Interest Margin (FTE) 4.72% 4.85%
Efficiency Ratio 76.88% 70.49%
Tier 1 Leverage Ratio end of Period 8.57%
Tier 1 Risk-based Capital Ratio End of Period 12.60%
Total Risk-based Capital Ratio End of Period 13.88%

ASSET QUALITY

during period:
Net Charge-offs $ 7,068 $ 8,764
Net Charge-offs/Average Net Loans (annualized) 2.87% 1.13%

at end of period:
Total Non-performing Loans 92,072
Foreclosed Real Estate ("OREO") 1,800
Total Non-performing Assets 93,872
Allowance/Non-performing Loans 47.46%
Allowance/Loans, Net of Discount 4.31%
Net Loans/Deposits 71.62%

EQUITY
Shares Outstanding 9,726,814
Common Equity $ 140,204
Book Value Per Common Share 14.41
Tangible Common Equity 139,390
Tangible Book Value Per Common Share 14.33
 

LOAN DISTRIBUTION

at end of period:
Commercial, Financial & Agricultural Loans $ 213,569
Commercial Real Estate Mortgages 433,057
Real Estate - Construction Loans 62,023
Residential Mortgages (1st and 2nd Liens) 171,515
Home Equity Loans 80,704
Consumer Loans 51,516
Other Loans   504
Total Loans (Net of Unearned Discounts) $ 1,012,888
 

SUFFOLK BANCORP

CONSOLIDATED STATEMENT OF CONDITION

(unaudited, in thousands of dollars except for share data)
 
September 30,
2011

ASSETS
Cash & Due from Banks $ 166,966
Federal Reserve Bank Stock

712
Federal Home Loan Bank Stock 1,744
Investment Securities:

   Available for Sale, at Fair Value
307,362

   Obligations of States & Political Subdivisions, Held to Maturity
9,422

   Corporate Bonds & Other Securities
80
Total Investment Securities 316,864
 
Total Loans 1,012,888

   Allowance for Loan Losses
43,693
Net Loans 969,195
 
Premises & Equipment, Net 26,904
Other Real Estate Owned, Net 1,800
Accrued Interest and Loan Fees Receivable 7,318
Goodwill 814
Other Assets 30,502

   TOTAL ASSETS
$ 1,522,819
 

LIABILITIES & STOCKHOLDERS' EQUITY
Demand Deposits $ 519,604
Saving, N.O.W. & Money Market Deposits 562,203

Time Certificates of $100,000 or More
181,415

Other Time Deposits
89,957

   Total Deposits
1,353,179
 
Federal Home Loan Bank Borrowings -
Dividend Payable on Common Stock -
Accrued Interest Payable 419

Other Liabilities
29,017

   TOTAL LIABILITIES

1,382,615
 

STOCKHOLDERS' EQUITY
Common Stock (par value $2.50; 15,000,000 shares authorized;
9,726,814 and 9,665,245 shares outstanding at
September 30, 2011 and 2010, respectively) 34,330
Surplus 24,010

Treasury Stock at Par (4,005,270 and 4,002,158 shares, respectively)
(10,013)
Retained Earnings 90,148
138,475
 
Accumulated Other Comprehensive Income (Loss), Net of Tax 1,729

   TOTAL STOCKHOLDERS' EQUITY
140,204
 

   TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
$ 1,522,819
 

SUFFOLK BANCORP

CONSOLIDATED STATEMENTS OF INCOME

(unaudited, in thousands of dollars except for share and per share data)
     
For the 3 Months Ended For the 9 Months Ended

September 30,

September 30,

2011

2011

INTEREST INCOME

Federal Funds Sold & Interest Due from Banks
$ 79

$
140
United States Treasury Securities 1 96

Obligations of States & Political Subdivisions
1,544 5,332
Mortgage-Backed Securities 1,412 4,558
U.S. Government Agency Obligations 44 337
Corporate Bonds & Other Securities 59 203
Loans and Loan Fees 15,100 47,488

   Total Interest Income
18,239 58,154
 

INTEREST EXPENSE
Saving, N.O.W. & Money Market Deposits 435 1,618
Time Certificates of $100,000 or more 471 1,576
Other Time Deposits 307 985
Federal Funds Purchased & Repurchase Agreements 1 1
Borrowings - 654

   Total Interest Expense
1,214 4,834
 

   Net Interest Income
17,025 53,320
Provision for Loan Losses 900 24,088

   Net Interest Income After Provision for Loan Losses
16,125 29,232
 

OTHER INCOME
Service Charges on Deposit Accounts 953 2,964
Other Service Charges, Commissions & Fees 988 2,631
Fiduciary Fees 213 644
Net Gain on Sale of Securities Available for Sale - 1,645
Other Operating Income 236 830

   Total Other Income
2,390 8,714
 

OTHER EXPENSE
Salaries & Employee Benefits 8,141 23,458
Net Occupancy Expense 1,435 4,391
Equipment Expense 506 1,451
Outside Services 1,425 3,423
FDIC Assessments 555 2,541
OREO Expense 182 293
Prepayment Fee on Borrowing - 1,028
Other Operating Expense 2,683 7,145

   Total Other Expense
14,927 43,730
 
Income (Loss) Before Provision for Income Taxes 3,588 (5,784)

Provision for (Benefit from) Income Taxes
516 (4,552)

NET INCOME (LOSS)

$
3,072

$
(1,232)
 

Average:

Common Shares Outstanding
9,726,948

9,718,809
Dilutive Stock Options - -

Average Total
9,726,948 9,718,809
 

EARNINGS PER COMMON SHARE
Basic $

0.32
$ (0.13)
Diluted $ 0.32 $ (0.13)

Copyright Business Wire 2010

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