-----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, FGRkPjgshaeC9YgD8eXTESSdl/Hn11NIaTHJR+K4+/ckiigyAUVDSJ4p6Dogx5Sz ydeEX9KBvp281u7/cAB/AQ== 0000950123-95-003343.txt : 19951119 0000950123-95-003343.hdr.sgml : 19951119 ACCESSION NUMBER: 0000950123-95-003343 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 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: 95591873 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 FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 1995 1 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 September 30, 1995 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) 727-2700 - -------------------------------------------------------------------------------- (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. 3,688,873 SHARES OF COMMON STOCK OUTSTANDING AS OF SEPTEMBER 30, 1995 2 SUFFOLK BANCORP AND SUBSIDIARIES
Part I Financial Information page Consolidated Statements of Condition 1 Consolidated Statements of Income, For the Three Months Ended September 30, 1995 and 1994 2 Consolidated Statements of Income, For the Nine Months Ended September 30, 1995 and 1994 3 Statements of Cash Flows, For the Nine Months Ended September 30, 1995 and 1994 4 Notes to the Unaudited Consolidated Financial Statements 5 Management's Discussion and Analysis of Financial Condition and Results of Operation 5 Part II Other Information 6 Signatures 7
3 SUFFOLK BANCORP AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CONDITION (in thousands except number of shares)
September 30, 1995 December 31, 1994 ASSETS Cash and Due From Banks ................................................ $ 37,487 $ 56,488 Federal Funds Sold ..................................................... 61,700 -- Investment Securities: United States Treasury Obligations; Available for Sale .............. 91,099 68,261 Held to Maturity: United States Treasury Obligations .................................. 24,063 57,091 Obligations of States and Political Subdivisions .................... 18,099 36,780 U.S. Govt. Agency Obligations ....................................... 30,132 31,871 Corporate Bonds and Other Securities ................................ 638 638 --------- --------- Total Investment Securities ....................................... 164,031 194,641 Total Loans, Net of Unearned Income .................................... 516,308 535,646 Less: Allowance for Possible Loan Losses ............................. 6,111 6,213 --------- --------- Net Loans ........................................................ 510,197 529,433 Premises and Equipment, Net ............................................ 12,170 12,428 Other Real Estate Owned, Net ........................................... 1,489 2,265 Accrued Interest Receivable, Net ....................................... 3,641 4,007 Excess Cost Over Fair Value of Net Assets Acquired ..................... 3,077 3,348 Other Assets ........................................................... 9,712 9,044 --------- --------- TOTAL ASSETS ..................................................... $ 803,504 $ 811,654 ========= ========= LIABILITIES Demand Deposits ........................................................ $ 156,775 $ 147,133 Savings, N.O.W. and Money Market Deposits .............................. 343,175 408,838 Time Certificates of $100,000 or More .................................. 26,214 23,767 Other Time Deposits .................................................... 187,456 144,255 --------- --------- Total Deposits ...................................................... 713,620 723,993 Federal Funds Purchased ................................................ -- 4,300 Other Borrowings ....................................................... 5,540 -- Dividends Payable on Common Stock ...................................... 739 722 Accrued Interest Payable ............................................... 1,794 1,100 Other Liabilities ...................................................... 2,939 4,446 --------- --------- TOTAL LIABILITIES ................................................ $ 724,632 $ 734,561 STOCKHOLDERS' EQUITY Common Stock (Par Value $5.00; 7,500,000 authorized; 3,799,674 Issued at September 30, 1995 and December 31, 1994, respectively) .................................... $ 18,998 $ 18,998 Surplus ................................................................ 18,373 18,373 Unrealized Gain (Loss) on Investments Available for Sale, Net of Tax ..................................... 229 (443) Treasury Stock (110,801 Shares) ........................................ (554) -- Undivided Profits ...................................................... 41,826 40,165 --------- --------- TOTAL STOCKHOLDERS' EQUITY .......................................... $ 78,872 $ 77,093 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................................................ $ 803,504 $ 811,654 ========= =========
See accompanying notes to consolidated financial statements. (1) 4 SUFFOLK BANCORP AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (in thousands except per share amounts) (For the Three Months Ended September 30,)
1995 1994 INTEREST INCOME Loans (including fee income) ............ $ 11,970 $ 11,372 Federal Funds Sold ...................... 775 308 United States Treasury Securities ....... 1,481 1,412 Obligations of States and Political Subdivisions ............... 203 376 U.S. Govt. Agency Obligations ........... 508 523 Corporate Bonds and Other Securities .... 10 8 ---------- ---------- Total Interest Income ............... 14,947 13,999 INTEREST EXPENSE Savings, N.O.W. and Money Market Deposits 2,088 2,444 Time Certificates of $100,000 or more ... 223 106 Other Time Deposits ..................... 2,780 1,496 Federal Funds Purchased ................. -- 2 Interest on Other Borrowings ............ 27 -- Interest on Mortgages ................... -- 39 ---------- ---------- Total Interest Expense .............. 5,118 4,087 ---------- ---------- Net Interest Income ................. 9,829 9,912 Provision For Possible Loan Losses ...... 75 130 ---------- ---------- Net Interest Income After Provision For Possible Loan Losses .......... 9,754 9,782 OTHER INCOME Service Charges on Deposit Accounts ..... 1,091 780 Other Service Charges, Commissions & Fees 445 451 Fiduciary Activities .................... 131 105 Other Operating Income .................. 197 182 ---------- ---------- Total Other Income .................. 1,864 1,518 OTHER EXPENSE Salaries and Employee Benefits .......... 4,002 3,810 Net Occupancy Expense ................... 715 657 Equipment Expense ....................... 767 758 Other Operating Expense ................. 1,745 2,296 ---------- ---------- Total Other Expense ................. 7,229 7,521 ---------- ---------- Income Before Income Taxes .............. 4,389 3,779 Provision For Income Taxes .............. 1,713 1,155 ---------- ---------- NET INCOME .............................. $ 2,676 $ 2,624 ========== ========== Earnings Per Share ...................... $ 0.71 $ 0.69 ========== ========== Average Shares .......................... 3,716,770 3,799,088
See accompanying notes to consolidated financial statements. (2) 5 SUFFOLK BANCORP AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (in thousands except per share amounts) (For the Nine Months Ended September 30,)
1995 1994 INTEREST INCOME Loans (including fee income) ............ $ 35,926 $ 30,801 Federal Funds Sold & Securities Purchased Under Agreements to Resell ........... 1,172 567 United States Treasury Securities ....... 4,762 3,901 Obligations of States and Political Subdivisions ............... 1,031 1,241 U.S. Govt. Agency Obligations ........... 1,552 1,048 Corporate Bonds and Other Securities .... 29 32 ---------- ---------- Total Interest Income ............... 44,472 37,590 INTEREST EXPENSE Savings, N.O.W. and Money Market Deposits 6,390 6,663 Time Certificates of $100,000 or more ... 778 272 Other Time Deposits ..................... 7,279 4,330 Federal Funds Purchased ................. 86 77 Interest on Other Borrowings ............ 539 54 Interest on Mortgages ................... 95 76 ---------- ---------- Total Interest Expense .............. 15,167 11,472 ---------- ---------- Net Interest Income ................. 29,305 26,118 Provision For Possible Loan Losses ...... 380 610 ---------- ---------- Net Interest Income After Provision For Possible Loan Losses .......... 28,925 25,508 OTHER INCOME Service Charges on Deposit Accounts ..... 2,891 2,150 Other Service Charges, Commissions & Fees 1,197 1,016 Fiduciary Activities .................... 367 330 Other Operating Income .................. 605 461 ---------- ---------- Total Other Income .................. 5,060 3,957 OTHER EXPENSE Salaries and Employee Benefits .......... 12,400 10,547 Net Occupancy Expense ................... 1,966 1,661 Equipment Expense ....................... 2,384 1,956 Other Operating Expense ................. 6,293 6,005 ---------- ---------- Total Other Expense ................. 23,043 20,169 ---------- ---------- Income Before Income Taxes .............. 10,942 9,296 Provision For Income Taxes .............. 4,034 3,155 ---------- ---------- NET INCOME .............................. $ 6,908 $ 6,141 ========== ========== Earnings Per Share ...................... $ 1.83 $ 1.68 ========== ========== Average Shares .......................... 3,765,620 3,656,095
See accompanying notes to consolidated financial statements. (3) 6 SUFFOLK BANCORP AND SUBSIDIARIES UNAUDITED STATEMENTS OF CASH FLOWS (in thousands) (For the Nine Months Ended September 30,)
1995 1994 NET INCOME ........................................... $ 6,908 $ 6,141 ADJUSTMENT TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Provision for Loan Losses ........................ 380 610 Depreciation ..................................... 1,545 1,167 Amortization of Excess of Cost Over Fair Value of Net Assets Acquired ......... 272 277 Accretion of Discounts ........................... (1,455) (1,431) Amortization of Premiums ......................... 161 79 Increase (Decrease) in Accrued Interest Receivable 366 (1,079) Increase in Other Assets ......................... (668) (551) Increase in Dividends Payable on Common Stock .... 17 106 Increase in Accrued Interest Payable ............. 695 104 (Decrease) Increase in Other Liabilities ......... (1,507) 116 Other, Net ....................................... -- 165 --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES ...... $ 6,714 $ 5,704 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Principal Payments on Investment Securities ...... $ 1,864 $ 1,295 Maturities of Investments - Available for Sale ... 92,515 114,000 Purchases of Investments - Available for Sale .... (114,091) (88,902) Maturities of Investments - Held to Maturity ..... 60,878 31,729 Purchases of Investments - Held to Maturity ...... (9,262) (25,398) Loan Disbursements and Repayments, Net ........... 16,222 (21,596) Purchases of Premises and Equipment, Net ......... (1,288) (1,002) Acquisition of Hampton Bancshares, Net ........... -- 14,938 Disposition of OREO Property ..................... 1,070 -- --------- --------- NET CASH PROVIDED BY INVESTING ACTIVITIES ...... $ 47,908 $ 25,064 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Net Increase in Deposit Accounts ................. $ (10,374) $ (1,379) Net Proceeds from (Repayment of) Other Borrowings 1,240 (6,500) Treasury Stock Acquired .......................... (554) -- Common Stock Sold for Cash ....................... -- 26 Dividends Paid to Stockholders ................... (2,235) (1,801) --------- --------- NET CASH USED BY FINANCING ACTIVITIES .......... $ (11,923) $ (9,654) --------- --------- NET INCREASE IN CASH AND CASH EQUIVALENTS ......................... 42,699 21,114 CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD 56,488 27,557 --------- --------- CASH AND CASH EQUIVALENTS END OF PERIOD ...... $ 99,187 $ 48,671 ========= =========
See accompanying notes to consolidated financial statements. (4) 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, 1994. The results of operations for the three months and nine months ended September 30, 1995, are not necessarily indicative of the results of operations to be expected for the remainder of the year. (2) IMPACT OF NEW ACCOUNTING STANDARDS Effective January 1, 1995, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for Impairment of a Loan" ("Statement 114") as amended by SFAS No. 118, "Accounting by Creditors for Impairment of a Loan-Income Recognition and Disclosures", ("Statement 118"). Statement 114 generally requires all creditors to account for impaired loans, except those loans that are accounted for at fair value or at the lower of cost or fair value, at the present value of the expected future cash flows discounted at the loan's effective interest rate. Statement 114 did not have a material effect on the Company's financial condition or results of operations. Statement 114 also provides that in-substance foreclosed loans should not be included in OREO for financial reporting purposes, but rather should be included in the loan portfolio. Statement 118 amends Statement 114 to allow a creditor to use existing methods for recognizing interest income on an impaired loan. This statement also amends the disclosure requirements of Statement 114 to require information about the recorded investment in certain impaired loans and about how a creditor recognizes interest income related to those impaired loans. Statement 118 did not have a material effect on the Company's financial condition or results of operations. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION for the Three and Nine Month Period ended September 30, 1995 and 1994 NET INCOME Net income was $2,676,000 for the quarter, ahead 2.0 percent from $2,624,000 posted during the same period last year when the company completed the acquisition of Hamptons Bancshares, Inc. Earnings-per-share for the quarter were $0.71 versus $0.69. Net Income for the nine months ended September 30, 1995 was $6,908,000 compared to $6,141,000 for the first nine months of 1994, up 12.5 percent for the period. Earnings-per-share for the nine months was $1.83 versus $1.68. Operating results for the nine months ended September 30, 1995 include approximately $245,000 ($427,000 before tax) or $0.07 per share in reduction of other operating expenses associated with the refund of FDIC premiums paid in 1995. INTEREST INCOME Interest income was $14,947,000 for the third quarter 1995, ahead 6.8 percent from the $13,999,000 posted for the same quarter in 1994. Average net loans for the third quarter of 1995 totaled $511,755,000, compared to $514,443,000 for the same period of 1994. During the third quarter of 1995, the yield on average earning assets of $723,789,000 increased to 8.34 percent, up from 7.79 percent on average earning assets of $730,632,000 during third quarter 1994. Interest income was $44,472,000 for the nine months of 1995, up 18.3 percent from $37,590,000 posted for the same period in 1994. Interest income has been impacted by higher rates of interest earned on loans and investment balances. (5) 8 INTEREST EXPENSE Interest expense for the third quarter of 1995 was $5,118,000, ahead 25.2 percent from the $4,087,000 for the same period of 1994. Average deposits for the third quarter 1995 were $700,915,000, down from $714,268,000 for the comparable period in 1994. Other borrowings, in the form of repurchase agreements and federal funds purchased, averaged $1,866,739 during the third quarter 1995, compared to $120,000 during third quarter 1994. The composition of deposit balances from quarter to quarter has changed. Savings deposits have decreased and other time deposits have increased. Interest expense for the nine months ended September 30, 1995 was $15,167,000, up from $11,472,000 for the same period of 1994, an increase of 32.2 percent. Interest paid on deposit reflects the higher balance of certificates of deposit, as well as the rise in interest rates as maturing certificates of deposit reprice at higher rates. NET INTEREST INCOME Net interest income remains the largest component of the Bank's earnings. The net interest income for year to date 1995 was $29,305,000, up from $26,118,000 during the same period of 1994, an increase of 12.2 percent. Net interest margin, on a fully tax-equivalent basis, for nine months was 5.44 percent compared to 5.25 percent for the same period of 1994. Net interest income for the third quarter of 1995 was $9,829,000, down slightly from $9,912,000 during the same period of 1994. Net interest margin, on a fully tax equivalent basis, for the third quarter of 1995 was 5.51 percent compared to 5.27 percent for the third quarter of 1994. Time deposit balances continue to and consumer loan balances are decreasing due to the rate sensitive nature of these products. Rates have increased more rapidly on assets than liabilities. As asset-quality has improved and stabilized since the most recent recession, and as the troubled assets acquired from Hamptons have been disposed of, the provision for possible loan losses has become a less significant adjustment to net interest income. The following table presents the resulting coverage of troubled assets:
- --------------------------------------------------------------------------------------------------------------------------- LAST 12 SEPT. 30 JUNE 30 MAR. 31 DEC. 31 COVERAGE RATIO'S MONTHS 1995 1995 1995 1994 - --------------------------------------------------------------------------------------------------------------------------- Net Charge-offs/Average Net Loans (annualized) 0.13% 0.02% 0.12% 0.24% 0.15% Allowance for loan losses/non-accrual, restructured, & OREO 82.26% 84.19% 89.78% 77.69% 77.39% Allowance for loan losses/loans, Net of Discount 1.16% 1.20% 1.16% 1.14% 1.18% ===========================================================================================================================
OTHER INCOME Other income increased to $1,864,000 for the three months ended September 30, 1995 compared to $1,518,000 for the same period during 1994. Service charges on deposit accounts for the year to date 1995 totaled $2,891,000, up from $2,150,000 for the nine months of 1994. Included in other income are revenues of the Island Computer Corporation, of which The Suffolk County National Bank represents 92 percent of its business. Other income for the nine months ended September 30, 1995 was $5,060,000, an increase of 28 percent over other income of $3,957,000 for the nine months ended September 30, 1994. The increase is attributable to larger deposits and related service charges. OTHER EXPENSE Other expenses for the third quarter 1995 were $7,229,000, down 4 percent from $7,521,000 for the comparable period in 1994. Other expenses for the nine months ended September 30, 1995 were $23,043,000, up 14 percent from $20,169,000 for the comparable period in 1994. CAPITAL RESOURCES Stockholders' equity totaled $78,872,000 on September 30, 1995, an increase of $1,779,000 from $77,093,000 on December 31, 1994. The ratio of equity to assets was 9.8 percent at September 30, 1995 and 9.2 percent at December 31, 1994. PART II ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. See item 4 of attached Form 8-K. (6) 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: November 14, 1995 /s/ Edward J. Merz ------------------------------ Edward J. Merz President & Chief Executive Officer Date: November 14, 1995 /s/ Victor F. Bozuhoski, Jr. ------------------------------ Victor F. Bozuhoski, Jr. Executive Vice President, Treasurer & Chief Financial Officer (7) 10 EXHIBIT INDEX ------------- Exhibit 27 Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE
9 U.S. DOLLAR 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 1 37,487 556,845 61,700 0 91,099 72,932 73,259 516,308 6,111 803,504 713,620 0 11,012 0 18,998 0 0 59,874 803,504 35,926 8,546 0 44,472 14,447 15,167 29,305 380 0 23,043 10,942 10,942 0 0 6,908 1.83 1.83 8.20 5,243 606 527 9,167 6,213 696 283 6,111 6,111 0 0
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