-----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, Llb7pdZJVY3FZS/tLVYsJXS2yTiHTarEtGDe6y6YWk6a1V+HIvbU5Lz+amtuL7pW wxbpW38DI/73vVve7SeWWA== 0000950123-96-006591.txt : 19961118 0000950123-96-006591.hdr.sgml : 19961118 ACCESSION NUMBER: 0000950123-96-006591 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 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: 96663809 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 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 September 30, 1996 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 (I.R.S. Employer of incorporation or organization) Identification No.) 6 West Second Street, Riverhead, New York 11901 (Address of Principal (Zip Code) Executive Offices) (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. 3,302,445 SHARES OF COMMON STOCK OUTSTANDING AS OF SEPTEMBER 30, 1996 (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 September 30, 1996 and 1995 4 Consolidated Statements of Income, For the Nine Months Ended September 30, 1996 and 1995 5 Consolidated Statements of Cash Flows, For the Nine Months Ended September 30, 1996 and 1995 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 8
(2) 3 SUFFOLK BANCORP AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CONDITION (in thousands of dollars except number of shares)
ASSETS September 30, 1996 December 31, 1995 ------------------ ----------------- Cash and Due From Banks 40,579 48,955 Federal Funds Sold 28,000 32,500 Investment Securities: Investment Securities Available for Sale 89,016 137,043 Investment Securities Held to Maturity: United States Treasury Obligations 12,028 12,053 Obligations of States and Political Subdivisions 10,573 18,140 U.S. Govt. Agency Obligations 12,325 14,092 Other Securities 638 638 ------------------ ----------------- Total Investment Securities 124,580 181,966 Loans, Net of Discounts 567,581 515,938 Less: Allowance for Loan Loss 5,944 5,923 ------------------ ----------------- Net Loans 561,637 510,015 Premises and Equipment, Net 12,016 11,803 Other Real Estate Owned, Net 1,979 1,241 Accrued Interest Receivable, Net 4,073 5,133 Excess of Cost Over Fair Value of Net Assets Acquired 2,715 2,986 Other Assets 13,737 11,195 ------------------ ----------------- TOTAL ASSETS 789,316 805,794 ================== ================= LIABILITIES Demand Deposits 175,921 152,007 Savings, N.O.W.'s, and Money Market Deposits 323,360 359,331 Time Certificates of $100,000 or More 28,942 27,777 Other Time Deposit 179,460 187,944 ------------------ ----------------- Total Deposits 707,683 727,059 Dividends Payable on Common Stock 991 1,096 Accrued Interest Payable 1,625 1,830 Other Liabilities 8,092 5,763 ------------------ ----------------- TOTAL LIABILITIES 718,391 735,748 STOCKHOLDERS' EQUITY Common Stock (Par Value $5.00; 7,500,000 authorized 3,302,445 & 3,409,309 shares outstanding at September 30, 1996 and December 31, 1995, respectively) 19,026 18,998 Surplus 18,456 18,374 Undivided Profits 35,735 33,928 Treasury Stock (502,765 shares in 1996 and 390,365 in 1995) (2,514) (1,952) Net Unrealized Gain on Securities Available for Sale 222 698 ------------------ ----------------- TOTAL STOCKHOLDERS' EQUITY 70,925 70,046 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 789,316 805,794 ================== ================= SUFFOLK BANCORP AND SUBSIDIARIES
(3) 4 UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (in thousands of dollars except shares and per share data)
Three Months Three Months INTEREST INCOME Ended 9/30/96 Ended 9/30/95 ------------------ ----------------- Loans (including fee income) 12,985 11,970 Federal Funds Sold 226 775 United States Treasury Obligations 1,585 1,481 Obligations of States and Political Subdivisions 128 203 U.S. Govt. Agency Obligations 431 508 Other Securities 10 10 ------------------ ----------------- Total Interest Income 15,365 14,947 INTEREST EXPENSE Savings, N.O.W.'s, and Money Market Deposits 1,975 2,088 Time Certificates of $100,000 or More 230 223 Other Time Deposits 2,589 2,780 Federal Funds Purchased 1 -- Interest on Other Borrowings -- 27 ------------------ ----------------- Total Interest Expense 4,795 5,118 Net Interest Income 10,570 9,829 Provision for Possible Loan Losses 300 75 ------------------ ----------------- Net Interest Income After Provision for Possible Loan Losses 10,270 9,754 OTHER INCOME Service Charges on Deposit Accounts 1,047 1,091 Other Service Charges, Commissions, and Fees 562 445 Fiduciary Activities 117 131 Other Operating Income 222 197 ------------------ ----------------- Total Other Income 1,948 1,864 OTHER EXPENSE Salaries and Employee Benefits 3,992 4,002 Net Occupancy Expense 595 715 Equipment Expense 624 767 Other Operating Expense 2,158 1,745 ------------------ ----------------- Total Other Expense 7,369 7,229 Income Before Taxes 4,849 4,389 Provision for Income Taxes 2,066 1,713 ------------------ ----------------- NET INCOME 2,783 2,676 ================== ================= Earnings Per Share 0.85 0.71 Average Shares 3,310,208 3,716,770
(4) 5 SUFFOLK BANCORP AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (in thousands of dollars except shares and per share data)
Nine Months Nine Months INTEREST INCOME Ended 9/30/96 Ended 9/30/95 ------------------ ----------------- Loans (including fee income) 37,306 35,926 Federal Funds Sold & Securities Sold Under Agreements to Resell 685 1,172 United States Treasury Obligations 5,105 4,762 Obligations of States and Political Subdivisions 532 1,031 U.S. Govt. Agency Obligations 1,372 1,552 Other Securities 29 29 ------------------ ----------------- Total Interest Income 45,029 44,472 INTEREST EXPENSE Savings, N.O.W.'s, and Money Market Deposits 5,949 6,390 Time Certificates of $100,000 or More 659 778 Other Time Deposits 8,009 7,279 Federal Funds Purchased 16 86 Interest on Other Borrowings -- 634 ------------------ ----------------- Total Interest Expense 14,633 15,167 Net Interest Income 30,396 29,305 Provision for Possible Loan Losses 820 380 ------------------ ----------------- Net Interest Income After Provision for Possible Loan Losses 29,576 28,925 OTHER INCOME Service Charges on Deposit Accounts 3,065 2,891 Other Service Charges, Commissions, and Fees 1,349 1,197 Fiduciary Activities 392 367 Other Operating Income 530 605 ------------------ ----------------- Total Other Income 5,336 5,060 OTHER EXPENSE Salaries and Employee Benefits 11,911 12,400 Net Occupancy Expense 1,799 1,966 Equipment Expense 1,915 2,384 Other Operating Expense 5,966 6,293 ------------------ ----------------- Total Other Expense 21,591 23,043 Income Before Taxes 13,321 10,942 Provision for Income Taxes 5,551 4,034 ------------------ ----------------- NET INCOME 7,770 6,908 ================== ================= Earnings Per Share 2.32 1.83 Average Shares 3,355,052 3,765,620
(5) 6 SUFFOLK BANCORP AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands of dollars)
Nine Months Nine Months Ended 9/30/96 Ended 9/30/95 ------------------ ----------------- NET INCOME 7,770 6,908 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH : Provision for Loan Losses 820 380 Depreciation 1,213 1,545 Amortization of Excess of Cost Over Fair Market Value of Net Assets Acquired 272 272 Accretion of Discounts (1,749) (1,455) Amortization of Premiums 366 161 Decrease in Accrued Interest Receivable 1,060 366 Increase in Other Assets (2,542) (668) (Decrease) Increase in Accrued Interest Payable (205) 695 Increase (Decrease) in Other Liabilities 2,329 (1,507) ------------------ ----------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 9,334 6,697 CASH FLOWS FROM INVESTING ACTIVITIES Principal Payments on Investment Securities 1,822 1,864 Maturities of Investments Available for Sale 163,934 92,515 Purchases of Investments Available for Sale (114,540) (114,091) Maturities of Investments Held to Maturity 9,790 60,878 Purchases of Investments Held to Maturity (2,237) (9,262) Net Loan Disbursements & Repayments (54,740) 16,222 Purchases of Premises and Equipment, Net (1,427) (1,288) Disposition of OREO Property 1,299 1,070 ------------------ ----------------- NET CASH PROVIDED BY INVESTING ACTIVITIES 3,901 47,908 CASH FLOWS FROM FINANCING ACTIVITIES Net Decrease in Deposit Accounts (19,376) (10,374) Proceeds from Other Borrowings -- 1,240 Treasury Shares Acquired (3,514) (554) Dividends Paid to Shareholders (3,116) (2,235) (Decrease) Increase in Dividends Payable on Common Stock (105) 17 ------------------ ----------------- NET CASH USED FROM FINANCING ACTIVITIES (26,111) (11,906) NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (12,876) 42,699 CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD 81,455 56,488 CASH AND CASH EQUIVALENTS END OF PERIOD 68,579 99,187
(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, 1995. The results of operations for the three and nine months ended September 30, 1996 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, 1996, the Company adopted Statement of Financial Accountings Standards ("SFAS") No. 122, "Accounting for Mortgage Servicing Rights" ("Statement 122") which is an amendment of SFAS No. 65, "Accounting for Certain Mortgage Banking Activities." This statement requires the recognition as separate assets rights to service mortgage loans for others, however those servicing rights are acquired. Statement 122 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 OPERATIONS for the Three Month Periods ended September 30, 1996 and 1995 NET INCOME Net income was $2,783,000 for the quarter, ahead 4.0 percent from $2,676,000 posted during the same period last year. Earnings per share for the quarter were $0.85 versus $0.71, a gain of 19.7 percent. INTEREST INCOME Interest income was $15,365,000 for the third quarter 1996, up 2.8 percent from $14,947,000 posted for the same quarter in 1995. Average net loans for the third quarter of 1996 totaled $555,560,000, compared to $511,755,000 for the same period of 1995. During the third quarter of 1996, the yield on a fully taxable-equivalent basis, was 8.63 percent on average earning assets of $716,427,000, up from 8.34 percent on average earning assets of $723,789,000 during the third quarter of 1995. INTEREST EXPENSE Interest expense for the third quarter of 1996 was $4,795,000, down 6.3 percent from $5,118,000 for the same period of 1995. Average deposits for the third quarter 1996 were $715,112,000, up from $700,915,000 for the comparable period in 1995. Savings and time deposits have decreased along with other time deposits while demand deposits have increased by 12.2 percent, to $175,921,000 from $156,775,000. NET INTEREST INCOME Net interest income remains the largest component of the Bank's earnings. Net interest income for the third quarter of 1996 was $10,570,000, up from $9,829,000 during the same period of 1995, an increase of 7.5 percent. The net interest margin for the quarter, on a fully taxable-equivalent basis, was 5.96 percent compared to 5.51 percent for the same period of 1995. (7) 8 COVERAGE RATIOS The following table presents the coverage of troubled assets:
Last 12 Sept. 30 June 30 Mar. 31 Dec. 31 Months 1996 1996 1996 1995 ------ ---- ---- ---- ---- Net Charge-offs/Average Net Loans (annualized) 0.20% 0.03% 0.13% 0.35% 0.27% Allowance for Loan Losses/Non-Accrual, Restructured, & OREO 93.53% 105.26% 102.43% 79.89% 86.54% Allowance for Loan Losses/Net Loans 1.09% 1.06% 1.05% 1.10% 1.16%
OTHER INCOME Other income increased to $1,948,000 for the three months ended September 30, 1996 compared to $1,864,000 for the same period during 1995. Trust revenue is down for the quarter, 10.7 percent and up for the year-to-date 6.8 percent. OTHER EXPENSE Other expense for the third quarter 1996 was $7,369,000, up 1.9 percent from $7,229,000 for the comparable period in 1995. Compensation for the nine months ended September 30, 1996 is down because the number of employees has been reduced, primarily through attrition. Equipment expense is down for the same period because of lesser depreciation and the ongoing control of the purchase of equipment. Other expense is down for the nine months in part because of a decrease in FDIC insurance premiums. CAPITAL RESOURCES Stockholders' equity totaled $70,925,000 on September 30, 1996, a slight increase from $70,046,000 on December 31, 1995. The ratio of equity to assets was 9.0 percent at September 30, 1996 and 8.7 percent at December 31, 1995. In January of 1996, the Company announced its intention to repurchase five percent of the common shares then outstanding, or approximately 171,000 shares. During the quarter, the Company repurchased 34,000 shares. Since December 31, 1995, the company has repurchased 112,400 shares or approximately 3.3 percent of shares outstanding at December 31, 1995. 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: November 14, 1996 /s/ Edward J. Merz ------------------------------------- Edward J. Merz President and Chief Executive Officer Date: November 14, 1996 /s/ Victor F. Bozuhoski, Jr. ------------------------------------- Victor F. Bozuhoski, Jr. Executive Vice President Chief Financial Officer and Treasurer (9) EX-27 2 FINANCIAL DATA SCHEDULE
9 1,000 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 40,579 0 28,000 0 89,016 35,564 35,704 567,581 5,944 789,316 707,683 0 8,092 0 0 0 19,026 51,899 789,316 37,306 7,723 0 45,029 14,617 14,633 30,396 820 0 21,591 13,321 7,770 0 0 7,770 2.32 2.32 5.96 3,461 1,184 0 0 5,923 1,049 250 5,944 5,944 0 0
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