|
|
|
|
|
|
|
|
|
|
Previous: TELECONFERENCING SYSTEMS INTERNATIONAL INC, PRES14C, 1997-11-13 |
Next: SCANA CORP, 10-Q, 1997-11-13 |
<PAGE> 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, 1997
Commission file number 0-13580
SUFFOLK BANCORP
(exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
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)
</TABLE>
(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.
6,095,356 SHARES OF COMMON STOCK OUTSTANDING AS OF SEPTEMBER 30, 1997
(1)
<PAGE> 2
THIS PAGE IS INTENTIONALLY BLANK.
(2)
<PAGE> 3
SUFFOLK BANCORP AND SUBSIDIARIES
<TABLE>
<CAPTION>
Part I Financial Information page
<S> <C>
Consolidated Statements of Condition 4
Consolidated Statements of Income, For the Three Months Ended September 30, 1997 and 1996 5
Consolidated Statements of Income, For the Nine Months Ended September 30, 1997 and 1996 6
Statements of Cash Flows, For the Nine Months Ended September 30, 1997 and 1996 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
</TABLE>
(3)
<PAGE> 4
SUFFOLK BANCORP AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CONDITION
(in thousands of dollars except number of shares)
<TABLE>
<CAPTION>
September 30, 1997 December 31, 1996
------------------ -----------------
<S> <C> <C>
ASSETS
Cash and Due From Banks 43,639 49,824
Federal Funds Sold 27,300 1,500
Investment Securities:
Investment Securities Available for Sale 110,728 104,649
Investment Securities Held to Maturity:
United States Treasury Obligations -- 8,019
Obligations of States and Political Subdivisions 15,050 10,170
U.S. Govt. Agency Obligations 9,656 11,877
Other Securities 638 638
-------- --------
Total Investment Securities 136,072 135,353
Loans, Net of Discounts 592,756 584,996
Less: Allowance for loan loss 6,440 6,113
-------- --------
Net Loans 586,316 578,883
Premises and Equipment, net 15,989 13,201
Other Real Estate Owned, net 349 1,899
Accrued Interest Receivable, net 4,551 5,222
Intangible Assets 2,352 2,624
Other Assets 16,185 15,873
-------- --------
TOTAL ASSETS 832,753 804,379
======== ========
LIABILITIES
Demand Deposits 178,430 168,315
Savings, N.O.W.'s and Money Market Deposits 319,477 329,930
Time Certificates of $100,000 or More 21,181 31,074
Other Time Deposit 231,643 181,698
-------- --------
Total Deposits 750,731 711,017
Federal Funds Purchased & Securities Sold Under Agreements to Repurchase -- 7,200
Dividends Payable on Common Stock 1,097 1,088
Accrued Interest Payable 2,533 1,579
Other Liabilities 15,144 10,745
-------- --------
TOTAL LIABILITIES 769,505 731,629
STOCKHOLDER'S EQUITY
Common Stock (Par Value $2.50; 15,000,000 authorized
6,095,356 & 6,604,890 shares outstanding at
September 30, 1997 & 1996, respectively) 19,026 19,026
Surplus 18,456 18,456
Undivided Profits 29,101 37,353
Treasury Stock (1,515,064 shares and 1,005,530 shares) (3,787) (2,543)
Net Unrealized (Loss) Gain on Securities Available for Sale 452 458
-------- --------
TOTAL STOCKHOLDERS EQUITY 63,248 72,750
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY 832,753 804,379
======== =======
</TABLE>
(4)
<PAGE> 5
SUFFOLK BANCORP AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands of dollars except shares and per share data)
<TABLE>
<CAPTION>
Three Months Three Months
Ended 9/30/97 Ended 9/30/96
--------------- -------------
<S> <C> <C>
INTEREST INCOME
Loans (including fee income) 13,861 12,985
Federal Funds Sold 449 226
United States Treasury Obligations 1,492 1,585
Obligations of States and Political Subdivisions 97 128
U.S. Govt. Agency Obligations 419 431
Other Securities 10 10
--------- ---------
Total Interest Income 16,328 15,365
INTEREST EXPENSE
Savings, N.O.W.'s and Money Market Deposits 1,867 1,975
Time Certificates of $100,000 or more 298 230
Other Time Deposits 3,228 2,589
Federal Funds Purchased -- 1
Total Interest Expense 5,393 4,795
--------- ---------
Net Interest Income 10,935 10,570
Provision for Possible Loan Losses 300 300
--------- ---------
Net Interest Income After Provision for Possible Loan Losses 10,635 10,270
OTHER INCOME
Service Charges on Deposit Accounts 1,117 1,047
Other Service Charges, Commissions & Fees 739 562
Fiduciary Activities 125 117
Other Operating Income 184 222
--------- ---------
Total Other Income 2,165 1,948
OTHER EXPENSE
Salaries and Employee Benefits 4,151 3,992
Net Occupancy Expense 662 595
Equipment Expense 527 624
Other Operating Expense 2,546 2,158
--------- ---------
Total Other Expense 7,886 7,369
Income Before Taxes 4,914 4,849
Provision for Income Taxes 2,034 2,066
--------- ---------
NET INCOME 2,880 2,783
========= =========
Earnings Per Share 0.47 0.43
Average Shares 6,131,886 6,620,416
</TABLE>
(5)
<PAGE> 6
SUFFOLK BANCORP AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands of dollars except shares and per share data)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended 9/30/97 Ended 9/30/96
------------- -------------
<S> <C> <C>
INTEREST INCOME
Loans (including fee income) 40,765 37,306
Federal Funds Sold 664 685
United States Treasury Obligations 4,740 5,105
Obligations of States and Political Subdivisions 319 532
U.S. Govt. Agency Obligations 1,252 1,372
Other Securities 29 29
--------- ---------
Total Interest Income 47,769 45,029
INTEREST EXPENSE
Savings, N.O.W.'s and Money Market Deposits 5,630 5,949
Time Certificates of $100,000 or more 800 659
Other Time Deposits 8,577 8,009
Federal Funds Purchased 100 16
Interest on Other Borrowings 337 --
--------- ---------
Total Interest Expense 15,444 14,633
Net Interest Income 32,325 30,396
Provision for Possible Loan Losses 834 820
--------- ---------
Net Interest Income After Provision for Possible Loan Losses 31,491 29,576
OTHER INCOME
Service Charges on Deposit Accounts 3,349 3,065
Other Service Charges, Commissions & Fees 1,517 1,349
Fiduciary Activities 384 392
Other Operating Income 415 530
--------- ---------
Total Other Income 5,665 5,336
OTHER EXPENSE
Salaries and Employee Benefits 12,272 11,911
Net Occupancy Expense 1,880 1,799
Equipment Expense 1,575 1,915
Other Operating Expense 7,158 5,966
--------- ---------
Total Other Expense 22,885 21,591
Income Before Taxes 14,271 13,321
Provision for Income Taxes 5,957 5,551
--------- ---------
NET INCOME 8,314 7,770
========= =========
Earnings Per Share 1.30 1.16
Average Shares 6,380,305 6,710,104
</TABLE>
(6)
<PAGE> 7
SUFFOLK BANCORP AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended 9/30/97 Ended 9/30/96
------------- -------------
<S> <C> <C>
NET INCOME 8,314 7,770
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH :
Provision for Loan Losses 834 820
Depreciation 978 1,213
Amortization of Excess of Cost Over Fair Market Value of Net Assets Acquired 271 272
Accretion of Discounts (618) (1,749)
Amortization of Premiums 253 366
Decrease in Interest Receivable 672 1,060
Increase in Other Assets (313) (2,542)
Increase (Decrease) in Interest Payable 954 (205)
Increase in Other Liabilities 4,400 2,329
------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 15,745 9,334
CASH FLOWS FROM INVESTING ACTIVITIES
Principal Payments on Investment Securities 2,278 1,822
Maturities of Investments Held to Maturity 12,406 163,934
Purchases of Investments Held to Maturity (9,288) (2,237)
Maturities of Investments Available for Sale 45,509 9,790
Purchases of Investments Available for Sale (51,259) (114,540)
Net Loan Disbursements & Repayments (8,582) (54,740)
Purchases of Premises and Equipment, Net (3,765) (1,427)
Disposition of OREO Property 1,862 1,299
------- --------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (10,839) 3,901
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase (Decrease) in Deposit Accounts 39,713 (19,376)
Reduction of Other Borrowings (7,200) 0
Treasury Shares Acquired (14,578) (3,514)
Dividends Paid to Shareholders (3,226) (3,116)
Increase in Dividends Payable on Common Stock 0 (105)
------- --------
NET CASH USED FROM FINANCING ACTIVITIES 14,709 (26,111)
NET DECREASE IN CASH AND CASH EQUIVALENTS 19,615 (12,876)
CASH AND CASH EQUIVALENTS: BEGINNING OF PERIOD 51,324 81,455
------- --------
CASH AND CASH EQUIVALENTS: END OF PERIOD 70,939 68,579
======= ========
</TABLE>
(7)
<PAGE> 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,
1996.
The results of operations for the three and nine months ended September
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 September 30, 1997 and 1996
NET INCOME
Net income was $2,880,000 for the quarter, ahead 3.5 percent from
$2,783,000 posted during the same period last year. Earnings per share for the
quarter were $0.47 versus $0.43, a gain of 9.3 percent.
INTEREST INCOME
Interest income was $16,328,000 for the third quarter of 1997, up 6.3
percent from $15,365,000 posted for the same quarter in 1996. Average net loans
during the third quarter of 1997 totaled $590,466,000, compared to $555,560,000
for the same period of 1996. During the third quarter of 1997, the yield was
8.68 percent on average earning assets of $752,202,000 up from $709,439,000
during the third quarter of 1996, yielding 8.63 percent. The increase in
interest income is primarily attributable to the increase in average balances of
earning assets.
INTEREST EXPENSE
Interest expense for the third quarter of 1997 was $5,393,000, up 12.5
percent from $4,795,000 for the same period of 1996. Average deposits for the
third quarter 1997 were $762,728,000 up from $715,112,000 for the comparable
period in 1996.
NET INTEREST INCOME
Net interest income is the largest component of the Company's earnings.
Net interest income for the third quarter of 1997 was $10,935,000, up from
$10,570,000 during the same period of 1996. The net interest margin for the
quarter, on a fully taxable-equivalent basis, was 5.81 percent compared to 5.96
percent for the same period of 1996.
(8)
<PAGE> 9
The following table presents the coverage of troubled assets:
<TABLE>
<CAPTION>
LAST 12 SEPT. 30 JUNE 30 MAR 31 DEC 31
COVERAGE RATIOS MONTHS 1997 1997 1997 1996
<S> <C> <C> <C> <C> <C>
Net Charge-offs/Average Net Loans 0.11% 0.19% 0.06% 0.10% 0.09%
Allowance for Loan Losses/Non-Accrual,
Restructured, & OREO 148.76% 172.10% 161.87% 158.13% 102.93%
Allowance for Loan Losses/Net Loans 1.07% 1.09% 1.08% 1.05% 1.05%
</TABLE>
OTHER INCOME
Other income increased to $2,165,000 for the three months ended
September 30, 1997 compared to $1,948,000. Trust revenue was up 6.8 percent.
Other operating income was down 17.1 percent.
OTHER EXPENSE
Other expense for the third quarter 1997 was $7,886,000, up 7.0 percent
from $7,369,000 for the comparable period in 1996.
CAPITAL RESOURCES
Stockholders' equity totaled $63,248,000 on September 30, 1997, a
decrease of $9,502,000 from $72,750,000 on December 31, 1996. The ratio of
equity to assets was 7.6 percent at September 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.
In the first week 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 September 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 September 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.
(9)
<PAGE> 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: November 13, 1997 /s/ Edward J. Merz
------------------------------
Edward J. Merz
Chairman, President & Chief Executive Officer
Date: November 13, 1997 /s/ Victor F. Bozuhoski, Jr.
------------------------------
Victor F. Bozuhoski, Jr.
Executive Vice President,
Treasurer & Chief Financial Officer
(10)
<PAGE> 11
THIS PAGE IS INTENTIONALLY BLANK.
(11)
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 43,639
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 27,300
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 110,728
<INVESTMENTS-CARRYING> 18,350
<INVESTMENTS-MARKET> 18,522
<LOANS> 599,196
<ALLOWANCE> 6,440
<TOTAL-ASSETS> 832,753
<DEPOSITS> 750,731
<SHORT-TERM> 0
<LIABILITIES-OTHER> 18,774
<LONG-TERM> 0
0
0
<COMMON> 63,248
<OTHER-SE> 0
<TOTAL-LIABILITIES-AND-EQUITY> 832,753
<INTEREST-LOAN> 40,765
<INTEREST-INVEST> 6,340
<INTEREST-OTHER> 664
<INTEREST-TOTAL> 47,769
<INTEREST-DEPOSIT> 15,007
<INTEREST-EXPENSE> 15,444
<INTEREST-INCOME-NET> 32,325
<LOAN-LOSSES> 834
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 22,885
<INCOME-PRETAX> 14,271
<INCOME-PRE-EXTRAORDINARY> 14,271
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,314
<EPS-PRIMARY> 1.16
<EPS-DILUTED> 1.16
<YIELD-ACTUAL> 5.91
<LOANS-NON> 2,620
<LOANS-PAST> 1,989
<LOANS-TROUBLED> 773
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 6,113
<CHARGE-OFFS> 307
<RECOVERIES> 83
<ALLOWANCE-CLOSE> 6,423
<ALLOWANCE-DOMESTIC> 6,423
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
|
|