-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LtpdCNrmSJZoVpxy0nNNwNjCD5poNF9qdUcNhcl3xDS3rsS2yh/DQa0qDasb6Zot kmHwE9ZDIpwHVuRRSqmOoQ== 0000950123-97-006694.txt : 19970813 0000950123-97-006694.hdr.sgml : 19970813 ACCESSION NUMBER: 0000950123-97-006694 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970812 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUFFOLK BANCORP CENTRAL INDEX KEY: 0000754673 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 112708279 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13580 FILM NUMBER: 97656432 BUSINESS ADDRESS: STREET 1: 6 W SECOND ST CITY: RIVERHEAD STATE: NY ZIP: 11901 BUSINESS PHONE: 516725667 MAIL ADDRESS: STREET 1: 6 WEST SECOND STREET CITY: RIVERHEAD STATE: NY ZIP: 11901 10-Q 1 SUFFOLK BANCORP 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended June 30, 1997 Commission file number 0-13580 SUFFOLK BANCORP (exact name of registrant as specified in its charter) New York State 11-2708279 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6 West Second Street, Riverhead, New York 11901 (Address of Principal Executive Offices) (Zip Code) (516) 727-5667 (Registrant's telephone number, including area code) NOT APPLICABLE (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 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__. Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 6,468,776 SHARES OF COMMON STOCK OUTSTANDING AS OF JUNE 30, 1997 (1) 2 SUFFOLK BANCORP AND SUBSIDIARIES
Part I Financial Information page Consolidated Statements of Condition 3 Consolidated Statements of Income, For the Three Months Ended June 30, 1997 and 1996 4 Consolidated Statements of Income, For the Six Months Ended June 30, 1997 and 1996 5 Statements of Cash Flows, For the Three Months Ended June 30, 1997 and 1996 6 Notes to the Unaudited Consolidated Financial Statements 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II Other Information 8 Signatures 9
(2) 3 SUFFOLK BANCORP AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CONDITION (in thousands of dollars except number of shares)
ASSETS June 30, 1997 December 31, 1996 ----------------- ----------------- Cash and Due From Banks 49,778 49,824 Federal Funds Sold 26,000 1,500 Investment Securities: Investment Securities Available for Sale 109,727 104,649 Investment Securities Held to Maturity: United States Treasury Obligations 0 8,019 Obligations of States and Political Subdivisions 7,197 10,170 U.S. Govt. Agency Obligations 10,515 11,877 Other Securities 638 638 ----------------- ----------------- Total Investment Securities 128,077 135,353 Loans, Net of Discounts 606,996 584,996 Less: Allowance for loan losses 6,423 6,113 ----------------- ----------------- Net Loans 600,573 578,883 Premises and Equipment, net 15,926 13,201 Other Real Estate Owned, net 349 1,899 Accrued Interest Receivable, net 5,680 5,222 Intangible Assets 2,443 2,624 Other Assets 15,431 15,873 ----------------- ----------------- TOTAL ASSETS 844,257 804,379 ================= ================= LIABILITIES Demand Deposits 176,000 168,315 Savings, N.O.W.'s and Money Market Deposits 333,783 329,930 Time Certificates of $100,000 or More 19,428 31,074 Other Time Deposits 226,145 181,698 ----------------- ----------------- Total Deposits 755,356 711,017 Federal Funds Purchased & Securities Sold Under Agreements to Repurchase 0 7,200 Dividends Payable on Common Stock 1,069 1,088 Accrued Interest Payable 2,028 1,579 Other Liabilities 12,526 10,745 ----------------- ----------------- TOTAL LIABILITIES 770,979 731,629 STOCKHOLDER'S EQUITY Common Stock (Par Value $2.50; 15,000,000 authorized; 6,468776 and 6,661,818 shares outstanding at June 30, 1997 and December 31,1996, respectively) 19,026 19,026 Surplus 18,456 18,456 Undivided Profits 38,333 37,353 Treasury Stock (1,141,642 shares in 1997 and 420,365 in 1996) (2,854) (2,543) Investment Securities Valuation Allowance 317 458 ----------------- ----------------- TOTAL STOCKHOLDERS EQUITY 73,278 72,750 TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY 844,257 804,379 ================= =================
(3) 4 SUFFOLK BANCORP AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (in thousands of dollars except shares and per share data)
Three Months Three Months INTEREST INCOME Ended 06/30/97 Ended 06/30/96 ----------------- ----------------- Loans (including fee income) 13,716 12,521 Federal Funds Sold 156 198 United States Treasury Obligations 1,498 1,621 Obligations of States and Political Subdivisions 106 197 U.S. Govt. Agency Obligations 410 447 Other Securities 9 9 ----------------- ----------------- Total Interest Income 15,895 14,993 INTEREST EXPENSE Savings, N.O.W.'s and Money Market Deposits 1,867 1,953 Time Certificates of $100,000 or more 257 211 Other Time Deposits 2,856 2,670 Federal Funds Purchased 15 7 Interest on Other Borrowings 84 0 ----------------- ----------------- Total Interest Expense 5,079 4,841 Net Interest Income 10,816 10,152 Provision for Possible Loan Losses 283 295 ----------------- ----------------- Net Income After Provision for Possible Loan Losses 10,533 9,857 OTHER INCOME Service Charges on Deposit Accounts 1,156 1,055 Other Service Charges, Commissions & Fees 434 434 Fiduciary Activities 128 140 Other Operating Income 103 123 ----------------- ----------------- Total Other Income 1,821 1,752 OTHER EXPENSE Salaries and Employee Benefits 4,114 3,931 Net Occupancy Expense 622 580 Equipment Expense 521 643 Other Real Estate Owned 22 118 Other Operating Expense 2,405 1,980 ----------------- ----------------- Total Other Expense 7,684 7,252 Income Before Taxes 4,670 4,357 Provision for Income Taxes 1,947 1,823 ----------------- ----------------- NET INCOME 2,723 2,534 ================= ================= Earnings Per Share 0.42 0.38 Average Shares Outstanding 6,480,721 6,734,248
(4) 5 SUFFOLK BANCORP AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (in thousands of dollars except shares and per share data)
Six Months Six Months INTEREST INCOME Ended 06/30/97 Ended 06/30/96 ---------------------- ---------------------- Loans (including fee income) 26,904 24,321 Federal Funds Sold 215 459 United States Treasury Obligations 3,248 3,520 Obligations of States and Political Subdivisions 222 404 U.S. Govt. Agency Obligations 833 941 Other Securities 19 19 ---------------------- ---------------------- Total Interest Income 31,441 29,664 INTEREST EXPENSE Savings, N.O.W.'s and Money Market Deposits 3,763 3,974 Time Certificates of $100,000 or more 502 429 Other Time Deposits 5,349 5,420 Federal Funds Purchased 100 15 Interest on Other Borrowings 337 0 ---------------------- ---------------------- Total Interest Expense 10,051 9,838 Net Interest Income 21,390 19,826 Provision for Possible Loan Losses 534 520 ---------------------- ---------------------- Net Income After Provision for Possible Loan Losses 20,856 19,306 OTHER INCOME Service Charges on Deposit Accounts 2,232 2,018 Other Service Charges, Commissions & Fees 778 787 Fiduciary Activities 259 275 Other Operating Income 231 308 ---------------------- ---------------------- Total Other Income 3,500 3,388 OTHER EXPENSE Salaries and Employee Benefits 8,121 7,919 Net Occupancy Expense 1,218 1,204 Equipment Expense 1,048 1,291 Other Real Estate Owned 216 118 Other Operating Expense 4,396 3,690 ---------------------- ---------------------- Total Other Expense 14,999 14,222 Income Before Taxes 9,357 8,472 Provision for Income Taxes 3,923 3,485 ---------------------- ---------------------- NET INCOME 5,434 4,987 ====================== ====================== Earnings Per Share 0.84 0.74 Average Shares Outstanding 6,506,573 6,755,440
(5) 6 SUFFOLK BANCORP AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands of dollars)
Six Months Six Months Ended 06/30/97 Ended 06/30/96 ---------------------- ---------------------- NET INCOME 5,434 4,987 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH : Provision for Loan Losses 534 520 Depreciation 646 828 Amortization of Excess of Cost Over Fair Market Value of Net Assets Acquired 181 181 Accretion of Discounts (412) (1,313) Amortization of Premiums 226 293 Incease in Interest Receivable (458) (316) Decrease (Increase) in Other Assets 442 (2,308) Increase (Decrease) in Interest Payable 448 (90) Increase in Other Liabilities 1,782 1,156 ---------------------- ---------------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 8,823 3,938 CASH FLOWS FROM INVESTING ACTIVITIES Principal Payments on Investment Securities 1,398 1,210 Maturities of Investments Held to Maturity 11,253 7,941 Purchases of Investments Held to Maturity (281) (530) Maturities of Investments Available for Sale 35,239 84,167 Purchases of Investments Available for Sale (40,148) (60,512) Net Loan Disbursements & Repayments (24,833) (47,383) Purchases of Premises and Equipment, Net (3,371) (1,246) Disposition of OREO Property 1,862 1,034 ---------------------- ---------------------- Net Cash Provided (Used) from Investing Activities (18,881) (15,319) CASH FLOWS FROM FINANCING ACTIVITIES Net Decrease in Deposit Accounts 44,339 (5,081) Increase in Federal Funds Purchased 0 0 Proceeds from Other Borrowings (7,200) 0 Treasury Shares Acquired (2,627) (2,438) Dividends Paid to Shareholders 0 (2,264) Increase in Dividends Payable on Common Stock 195 ---------------------- ---------------------- NET CASH USED FROM FINANCING ACTIVITIES 34,512 (9,588) NET DECREASE IN CASH AND CASH EQUIVALENTS 24,454 (20,969) CASH AND CASH EQUIVALENTS: BEGINNING OF PERIOD 51,324 81,455 CASH AND CASH EQUIVALENTS: END OF PERIOD 75,778 60,486
(6) 7 SUFFOLK BANCORP AND SUBSIDIARIES NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (1) GENERAL In the opinion of management, the accompanying unaudited consolidated financial statements of Suffolk Bancorp and its consolidated subsidiaries have been prepared to reflect all adjustments (consisting solely of normally recurring accruals) necessary for a fair presentation of the financial condition and results of operations for the periods presented. Certain information and footnotes normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Notwithstanding, management believes that the disclosures are adequate to prevent the information from misleading the reader, particularly when the accompanying consolidated financial statements are read in conjunction with the audited consolidated financial statements and notes thereto included in the Registrant's annual report and on Form 10-K, for the year ended December 31, 1996. The results of operations for the three months ended June 30, 1997, are not necessarily indicative of the results of operations to be expected for the remainder of the year. (2) IMPACT OF NEW ACCOUNTING STANDARDS In December 1996, the Financial Accounting Standards Board, ("FASB") issued SFAS No. 127, "Deferral of the Effective Date of Certain Provisions of FASB Statement No. 125," which is an amendment to SFAS No. 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities." which supersedes SFAS No. 122. SFAS No. 125 is effective for transfers and servicing of financial assets and extinguishment of liabilities occurring after December 31, 1996. SFAS No. 127 delayed the effective date of certain provisions of SFAS No. 125 until January 1, 1998. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION for the Three Month Periods ended June 30, 1997 and 1996 NET INCOME Net income was $2,723,000 for the quarter, ahead 7.5 percent from $2,534,000 posted during the same period last year. Earnings per share for the quarter were $0.42 versus $0.38, a gain of 10.5 percent. INTEREST INCOME Interest income was $15,895,000 for the second quarter 1997, up 6.0 percent from $14,993,000 posted for the same quarter in 1996. Average net loans for the second quarter of 1997 totaled $594,097,000, compared to $537,187,000 for the same period of 1996. During the second quarter of 1997, the yield was 8.69 percent on average earning assets of $735,278,000 up from 8.53 percent on average earning assets of $709,439,000 during the second quarter of 1996. The increase in interest income, is attributable to the increase in average balances of earning assets. INTEREST EXPENSE Interest expense for the second quarter of 1997 was $5,079,000, up 4.9 percent from $4,841,000 for the same period of 1996. Average deposits for the second quarter 1997 were $731,415,000 up from $705,307 for the comparable period in 1996. Other borrowings, in the form of federal funds purchased and securities sold under agreements to repurchase, averaged $7,027,000 during the second quarter 1997, compared to $491,000 during second quarter 1996. Savings, NOWa and Money Market deposits have decreased while other time deposits and demand deposits have increased. NET INTEREST INCOME Net interest income remains the largest component of the Bank's earnings. Net interest income for the second quarter of 1997 was $10,816,000, up from $10,152,000 during the same period of 1996. The net interest margin for the quarter, on a fully taxable-equivalent basis, was 5.93 percent compared to 5.80 percent for the same period of 1996. (7) 8 The following table presents the coverage of troubled assets:
LAST 12 JUN. 30 MAR. 31 DEC. 31 SEP. 30 COVERAGE RATIOS MONTHS 1997 1997 1996 1996 Net Charge-offs/Average Net Loans (annualized) 0.09% 0.06% 0.10% 0.09% 0.13% Allowance for Loan Losses/Non-Accrual, Restructured, & OREO 132.05% 161.87% 158.13% 102.93% 105.26% Allowance for Loan Losses/Net Loans 1.06% 1.08% 1.05% 1.05% 1.06%
OTHER INCOME Other income increased to $1,821,000 for the three months ended June 30, 1997 compared to $1,752,000 for the same period during 1996. Service charges on deposit accounts is up $101,000 or 9.6 percent as a result of higher volume within transactional accounts. Trust revenue is down 8.6 percent. Other operating income is down $20,000 or 16.3 percent. OTHER EXPENSE Other expense for the second quarter 1997 was $7,684,000, up 6.0 percent from $7,252,000 for the comparable period in 1996. Other operating expenses are up 21.5 percent, owing to increased loans and deposits. CAPITAL RESOURCES Stockholders' equity totaled $73,278,000 on June 30, 1997, a decrease of $528,000 from $72,750,000 on December 31, 1996. The ratio of equity to assets was 8.68 percent at June 30, 1997 and 9.04 percent at December 31, 1996. At their annual meeting on April 8, 1997, the Company's shareholders voted to increase the number of shares authorized from 7,500,000 to 15,000,000 and to split the stock 2 for 1, changing the par value from $5.00 to $2.50. The split was payable on May 15, 1997. All numbers in the following discussion are adjusted to reflect the split. The Company believes that the repurchase of stock is an important tool to manage capital in times when its business generates capital faster than assets. In January of 1997, the Company announced its intention to repurchase five percent of the common shares then outstanding, or 329,644 shares. In 1996, the Company authorized the repurchase of 340,130 shares, of which it was able to repurchase only 236,800 shares. The remaining 103,330 shares not repurchased during 1996 were added to the 1997 plan, calling in total to repurchase 432,974 shares more. During the quarter most recently ended, the Company repurchased 17,000 shares. In the week following the end of the quarter, the Company reached an agreement with its largest shareholder to repurchase 373,422 shares, or 5.77 percent of the shares outstanding on June 30, 1997. This purchase raised the total of shares repurchased since December 31, 1996 to 497,536, or 64,562 shares more than had previously been announced for repurchase. The additional shares were authorized by the board for repurchase in order to complete the transaction. This transaction reduced the Company's leverage ratio from 8.68 percent to 7.26 percent, pro-forma, based on June 30, 1997 balances and should be accretive to earnings per share. This transaction concludes the Company's formal repurchase program, although the Company may repurchase shares in the future for various corporate purposes. PART II ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. None. (8) 9 SIGNATURES 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. SUFFOLK BANCORP Date: August 12, 1997 /s/ Edward J. Merz ------------------------------ Edward J. Merz Chairman, President & Chief Executive Officer Date: August 15, 1997 /s/ Victor F. Bozuhoski, Jr. ------------------------------ Victor F. Bozuhoski, Jr. Executive Vice President, Treasurer & Chief Financial Officer (9) EX-27 2 FINANCIAL DATA SCHEDULE
9 1,000 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 49,778 0 26,000 0 109,727 18,350 15,522 606,996 6,423 844,257 755,356 0 15,623 0 0 19,026 0 54,252 844,257 13,716 2,023 156 15,895 4,980 5,079 10,816 283 0 7,684 4,670 2,723 0 0 2,723 .042 .042 5.93 3,034 2,616 585 0 6,113 307 83 6,423 6,423 0 0
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