-----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, QzLy60R75Ok1ZnpOX6fQIMQvKGpcWVH7ltvCQY3zzAHZyNEJvkxUoZ41qpCg34sw 1BVAepNip5BuqMqZYlF8zA== 0000950123-98-007584.txt : 19980817 0000950123-98-007584.hdr.sgml : 19980817 ACCESSION NUMBER: 0000950123-98-007584 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 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: SEC FILE NUMBER: 000-13580 FILM NUMBER: 98687883 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 the Quarter Ended June 30, 1998 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 incorporation or organization) (I.R.S. Employer Identification No.) 6 West Second Street, Riverhead, New York 11901 (Address of Principal Executive Offices) (Zip Code)
(Registrant's telephone number, including area code) (516) 727-5667 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. 6,095,356 SHARES OF COMMON STOCK OUTSTANDING AS OF JUNE 30, 1998 1 2 This page left blank intentionally. 2 3 SUFFOLK BANCORP AND SUBSIDIARIES
Part I Financial Information page Consolidated Statements of Condition 4 Consolidated Statements of Income, For the Three Months Ended June 30, 1998 and 1997 5 Consolidated Statements of Income, For the Six Months Ended June 30, 1998 and 1997 6 Statements of Cash Flows, For the Six Months Ended June 30, 1998 and 1997 7 Notes to the Unaudited Consolidated Financial Statements 8 Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Part II Other Information 9 Signatures 10
3 4 SUFFOLK BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CONDITION (unaudited, in thousands of dollars, except share and per share data)
June 30, December 31, 1998 1997 -------- ------------ ASSETS Cash & Due From Banks ............................... $ 63,263 $ 53,439 Federal Funds Sold .................................. 7,700 18,500 Investment Securities: Available for Sale, at Fair Value .................. 111,128 120,878 U.S. Government Agency Obligations ................ 2,884 7,039 Obligations of States & Political Subdivisions .... 9,494 18,371 Corporate Bonds & Other Securities ................ 638 638 -------- -------- Total Investment Securities ......................... 124,144 146,926 Total Loans ......................................... 637,115 611,388 Allowance for Possible Loan Losses ................ 6,771 6,524 -------- --------- Net Loans ........................................... 630,344 604,864 Premises & Equipment, Net ........................... 15,874 16,182 Other Real Estate Owned, Net ........................ 341 597 Accrued Interest Receivable, Net .................... 5,851 5,548 Excess of Cost Over Fair Value of Net Assets Acquired .......................................... 2,081 2,262 Other Assets ........................................ 18,520 16,595 -------- -------- TOTAL ASSETS 868,118 864,913 ======== ======== LIABILITIES & STOCKHOLDERS' EQUITY Demand Deposits ..................................... 222,162 184,085 Savings, N.O.W.'s & Money Market Deposits ........... 319,216 335,047 Time Certificates of $100,000 or more ............... 22,263 23,406 Other Time Deposits ................................. 225,496 235,057 -------- -------- Total Deposits .................................... 789,137 777,595 Dividend Payable on Common Stock .................... 1,097 1,097 Accrued Interest Payable ............................ 2,169 3,075 Other Liabilities ................................... 7,097 18,006 -------- -------- TOTAL LIABILITIES 799,500 799,773 -------- -------- STOCKHOLDERS' EQUITY Common Stock (par value $2.50; 15,000,000 shares authorized; 6,095,356 and 6,485,798 shares issued at June 30, 1998 & 1997, respectively) ............. 19,026 19,026 Surplus ............................................. 18,456 18,456 Treasury Stock at Par (1,515,064 shares and 1,124,622 shares, respectively) .................... (3,788) (3,788) Undivided Profits ................................... 34,609 30,992 -------- -------- 68,303 64,686 Accumulated Other Comprehensive Income, Net Of Tax .. 315 454 -------- -------- TOTAL STOCKHOLDERS' EQUITY......................... 68,618 65,140 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY........... $868,118 $864,913 ======== ========
See accompanying notes to consolidated financial statements. 4 5 SUFFOLK BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (unaudited, in thousands of dollars, except share and per share data)
For the 3 Months Ended 6/30/98 6/30/97 ---------- ---------- INTEREST INCOME Federal Funds Sold $ 120 $ 156 United States Treasury Securities 1,497 1,498 Obligations of States & Political Subdivisions 209 106 U.S. Government Agency Obligations 186 410 Corporate Bonds & Other Securities 9 9 Loans 14,226 13,716 ---------- ---------- Total Interest Income 16,247 15,895 INTEREST EXPENSE Savings, N.O.W.'s & Money Market Deposits 1,847 1,867 Time Certificates of $100,000 or more 301 257 Other Time Deposits 3,133 2,856 Federal Funds Purchased 10 15 Interest on Other Borrowings - 84 ---------- ---------- Total Interest Expense 5,291 5,079 Net-interest Income 10,956 10,816 Provision for Possible Loan Losses 300 283 ---------- ---------- Net-interest Income After Provision 10,656 10,533 OTHER INCOME Service Charges on Deposit Accounts 1,083 1,156 Other Service Charges, Commissions & Fees 672 434 Fiduciary Fees 143 128 Other Operating Income 123 103 ---------- ---------- Total Other Income 2,021 1,821 OTHER EXPENSE Salaries & Employee Benefits 4,177 4,114 Net Occupancy Expense 640 622 Equipment Expense 583 521 Other Real Estate Expense 5 22 Other Operating Expense 2,087 2,405 ---------- ---------- Total Other Expense 7,492 7,684 Income Before Provision for Income Taxes 5,185 4,670 Provision for Income Taxes 2,280 1,947 ---------- ---------- NET INCOME $ 2,905 $ 2,723 ========== ========== AVERAGE: Common Shares Outstanding 6,095,356 6,480,221 Dilutive Stock Options 27,800 - ---------- ---------- AVERAGE TOTAL 6,123,156 6,480,221 EARNINGS PER COMMON SHARE Basic $ 0.47 $ 0.42 Diluted $ 0.47 $ 0.42
See accompanying notes to consolidated financial statements. 5 6 SUFFOLK BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (unaudited, in thousands of dollars, except share and per share data)
For the Six Months Ended 6/30/98 6/30/97 ------------ ------------ INTEREST INCOME Federal Funds Sold $ 201 $ 215 United States Treasury Securities 3,235 3,248 Obligations of States & Political Subdivisions 401 222 U.S. Government Agency Obligations 593 833 Corporate Bonds & Other Securities 19 19 Loans 28,190 26,904 ---------- ----------- Total Interest Income 32,639 31,441 INTEREST EXPENSE Savings, N.O.W.'s & Money Market Deposits 3,737 3,763 Time Certificates of $100,000 or more 651 502 Other Time Deposits 6,410 5,349 Federal Funds Purchased 82 100 Interest on Other Borrowings 70 337 ---------- ----------- Total Interest Expense 10,950 10,051 Net-interest Income 21,689 21,390 Provision for Possible Loan Losses 600 534 ---------- ----------- Net-interest Income After Provision 21,089 20,856 OTHER INCOME Service Charges on Deposit Accounts 2,081 2,232 Other Service Charges, Commissions & Fees 1,137 778 Fiduciary Fees 258 259 Other Operating Income 463 231 ---------- ----------- Total Other Income 3,939 3,500 OTHER EXPENSE Salaries & Employee Benefits 8,195 8,121 Net Occupancy Expense 1,253 1,218 Equipment Expense 1,084 1,048 Other Real Estate Expense 28 216 Other Operating Expense 4,182 4,396 ---------- ----------- Total Other Expense 14,742 14,999 Income Before Provision for Income Taxes 10,286 9,357 Provision for Income Taxes 4,475 3,923 ---------- ----------- NET INCOME $ 5,811 $ 5,434 ========== =========== AVERAGE: Common Shares Outstanding 6,095,356 6,506,573 Dilutive Stock Options 27,800 -- ---------- ----------- AVERAGE TOTAL 6,123,156 6,506,573 EARNINGS PER COMMON SHARE Basic $ 0.95 $ 0.84 Diluted $ 0.94 $ 0.84
See accompanying notes to consolidated financial statements. 6 7 SUFFOLK BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands of dollars, except share and per share data)
For the Six Months Ended June 30, 1988 1997 CASH FLOWS FROM OPERATING ACTIVITIES NET INCOME $ 5,811 $ 5,434 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH Provision for Possible Loan Losses 600 534 Depreciation & Amortization 872 646 Amortization of Excess Cost Over Fair Value of Net Assets Acquired 181 181 Accretion of Discounts (563) (412) Amortization of Premiums 62 226 Increase in Accrued Interest Receivable (303) (458) Increase (Decrease) in Other Assets (1,925) 442 (Decrease) Increase in Accrued Interest Payable (905) 448 (Decrease) Increase in Other Liabilities (10,910) 1,782 ---------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES (7,080) 8,823 CASH FLOWS FROM INVESTING ACTIVITIES Principal Payments on Investment Securities 4,184 1,398 Maturities of Investment Securities; Available for Sale 30,815 35,239 Purchases of Investment Securities; Available for Sale (20,827) (40,288) Maturities of Investment Securities; Held to Maturity 10,591 11,253 Purchases of Investment Securities; Held to Maturity (1,718) (281) Loan Disbursements & Repayments, Net (26,075) (24,833) Purchases of Premises & Equipment, Net (565) (3,371) Disposition of Other Real Estate Owned 351 1,862 ---------- -------- NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (3,244) (19,021) CASH FLOWS FROM FINANCING ACTIVITIES Net Increase in Deposit Accounts 11,542 44,439 Decrease in Other Borrowings -- (7,200) Common Stock Sold for Cash -- -- Dividends Paid to Shareholders (2,194) (2,158) Treasury Shares Acquired -- (310) Increase in Dividends Payable on Common Stock -- (19) ---------- -------- NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES 9,348 34,652 NET (DECREASE) INCREASE IN CASH & CASH EQUIVALENTS (976,399) 24,454 CASH & CASH EQUIVALENTS BEGINNING OF PERIOD 71,939 51,324 ---------- -------- CASH & CASH EQUIVALENTS END OF PERIOD $ 70,963 $ 75,778 ========= ========
See accompanying notes to consolidated financial statements. 7 8 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, 1997. The results of operations for the three months ended June 30, 1998 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 February 1998, the Financial Accountings Standards Board issued Statement of Financial Accounting Standards No. 132 "Employers' Disclosures about Pensions and Other Post-retirement Benefits" ("SFAS No. 132"). SFAS No. 132 supercedes the disclosure requirements for pension and other post-retirement plans as set forth in SFAS No. 87, "Employers' Accounting For Pensions," SFAS No. 88, "Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits," and SFAS No. 106, "Employers' Accounting for Post-retirement Benefits Other Than Pensions." SFAS No. 132 does not address measurement or recognition for pension and other post-retirement benefit plans. SFAS No. 132 is effective for fiscal years beginning after December 15, 1997. Restatement of disclosures for earlier periods provided for comparative purposes is required unless the information is not readily available. In June 1998, The Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, "Accounting For Derivative Instruments and Hedging Activities" ("SFAS No. 133"). This statement established accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. SFAS No. 133 will not affect Suffolk's accounting or disclosures. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS for the Three Month Periods ended June 30, 1998 and 1997 NET INCOME Net income was $2,905,000 for the quarter, ahead 6.7 percent from $2,723,000 posted during the same period last year. Earnings per share for the quarter were $0.47 versus $0.42, a gain of 11.9 percent. INTEREST INCOME Interest income was $16,247,000 for the second quarter of 1998, up 2.2 percent from $15,895,000 posted for the same quarter in 1997. Average net loans during the second quarter of 1998 totaled $615,351,000, compared to $594,097,000 for the same period of 1997. During the second quarter of 1998, the yield was 8.63 percent (taxable-equivalent) on average 8 9 earning assets of $763,988,000 up from $735,278,000 during the second quarter of 1997, which yielded 8.53 percent. The increase in interest income is primarily attributable to the increase in average balances of earning assets. INTEREST EXPENSE Interest expense for the second quarter of 1998 was $5,291,000, up 4.2 percent from $5,079,000 for the same period of 1997. Average deposits for the second quarter 1998 were $775,466,000, up from $731,415,000 for the comparable period in 1997. NET INTEREST INCOME Net interest income is the largest component of the Company's earnings. Net interest income for the second quarter of 1998 was $10,956,000, up from $10,816,000 during the same period of 1997. The net interest margin for the quarter, on a fully taxable-equivalent basis, was 5.84 percent compared to 5.80 percent for the same period of 1997. The following table presents the coverage of troubled assets:
FOR THE FOR THE THREE MONTHS ENDED LAST 12 JUNE 30 MAR. 31 DEC. 31 SEPT. 30 COVERAGE RATIOS MONTHS 1998 1998 1997 1997 Net Charge-offs/Average Net Loans (annualized) 0.13% 0.09% 0.13% 0.10% 0.19% Allowance for Loan Losses/Non-Accrual, Restructured, & OREO 224.02% 322.89% 218.79% 182.29% 172.10% Allowance for Loan Losses/Net Loans 1.08% 1.07% 1.08% 1.07% 1.09%
OTHER INCOME Other income increased to $2,021,000 for the three months compared to $1,821,000 the previous year. Service charges on deposits were down 6.3 percent. Service charges other than for deposits, commissions, and fees increased by 54.8 percent. Trust revenue was down 11.7 percent. Other operating income was up 19.4 percent. OTHER EXPENSE Other expense for the second quarter of 1998 was $7,492,000, down 2.5 percent from $7,684,000 for the comparable period in 1997. CAPITAL RESOURCES Stockholders' equity totaled $68,618,000 on June 30, 1998, an increase of 5.3 percent from $65,140,000 on December 31, 1997. The ratio of equity to assets was 7.9 percent at June 30, 1998 and 7.5 percent at December 31, 1997. PART II ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. None. 9 10 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 14, 1998 /s/ John F. Hanley ------------------------------ John F. Hanley President & Chief Executive Officer Date: August 14, 1998 /s/ Victor F. Bozuhoski, Jr. ------------------------------ Victor F. Bozuhoski, Jr. Executive Vice President, Treasurer & Chief Financial Officer 10 11 This page left blank intentionally. 11 12 12 EX-27 2 FINANCIAL DATA SCHEDULE
9 1,000 3-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 63,263 0 7,700 0 111,128 13,016 13,137 637,114 6,771 868,118 789,137 0 10,363 0 0 0 68,618 0 868,118 28,189 4,248 201 32,638 10,798 10,950 21,688 600 0 14,743 10,285 10,285 0 0 5,811 0.95 0.94 5.84 1,715 1,680 41 0 6,524 445 92 6,771 6,771 0 0
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