Suffolk Bancorp (SCNB) 8-K Suffolk Bancorp Announces Increases In Second Quarter Earnings

EXHIBIT 99.1

PRESS RELEASE

FOR IMMEDIATE RELEASE
Contact:	Douglas Ian Shaw	4 West Second Street
	Corporate Secretary	Riverhead, NY 11901
	(631) 727-5667	(631) 727-5667 (Voice) - (631) 727-3214 (FAX)
		invest@suffolkbancorp.com

SUFFOLK BANCORP ANNOUNCES INCREASES IN SECOND QUARTER EARNINGS

Riverhead, New York, July 15, 2005 — Suffolk Bancorp (NASDAQ - SUBK) today released the results of its operations during the second quarter of 2005. Net income for the quarter was $5,325,000, up 5.8 percent from $5,033,000 posted during the same period last year. Earnings-per-share for the quarter were $0.50, an increase of 8.7 percent from $0.46 during the comparable period of 2004. Net income for the year to date was $10,457,000, an increase of 5.7 percent from $9,897,000 posted during the same period last year. Earnings-per-share for the year to date were $0.98 compared to $0.91, up 7.7 percent. A detailed financial summary follows the text of this release.

President and Chief Executive Officer, Thomas S. Kohlmann, remarked, “The key to understanding our second quarter results is the long-term discipline that my colleagues and I apply to managing Suffolk’s core business. This past quarter, that discipline became evident in the results of our decision last year to limit the easy boost of securities gains in favor of sustained core earnings. As the yield curve flattened over the past year, we benefited from the longer-term, higher yielding securities that we had retained in our portfolio. In combination with growth in the loan portfolio and substantial additions to the securities portfolio, total interest income increased by 10.5 percent, even as short-term funding costs increased and long-term rates came down. This resulted in return-on-average-equity of 21.44 percent. At almost twice the latest available average for the banking industry of 10.86 percent (source – SNL Securities), this maintains Suffolk’s place among the highest performing companies in the industry.”

He continued, “The composition of our balance sheet continues to evolve, with increases in loans for commercial real estate and construction, residential mortgages and home equity lending more than offsetting the run-off in the consumer loan portfolio, resulting in net loan growth of 5.7 percent from the prior year before the allowance for possible loan and lease losses. The investment portfolio grew by 10.3 percent, with greater emphasis on municipal securities as their tax-effective rates have grown more attractive. Borrowings have increased as we have attempted to moderate the effect of sharply increased short rates on the cost of our deposits. Looking to the income statement, key items include the provision for possible loan losses, down 71.1 percent from the comparable period last year when a substantial provision was made for a single credit, already disclosed, the circumstances of which are particular to that loan. As we have noted previously, we do not believe that it is reflective of systemic weakness in Suffolk’s loan portfolio or of its underwriting standards and procedures. Income other than from interest, before the effect of securities gains which were the result of a limited repositioning of the investment portfolio during the second quarter of 2004, is off by 2.6 percent as a result of stiff competition in the market for “free” banking services. Non-interest expense was up modestly by 3.0 percent.”

Mr. Kohlmann finished his remarks, “I want to re-emphasize the importance of consistent, disciplined management in building value in the banking industry. Customer service and balance sheet management are incremental processes, and are the result of many small decisions we make every day, as well as we can, each of them with reference to our objective of building long-term, stable shareholder value. Our numbers this quarter speak to the value of that approach, and it is one that we believe serves well our shareholders, customers, employees, and the communities in which we do business, now and for years to come.”

Suffolk Bancorp is a one-bank holding company engaged in the commercial banking business through Suffolk County National Bank, a full service commercial bank headquartered in Riverhead, New York. “SCNB” is Suffolk Bancorp’s wholly owned subsidiary. Organized in 1890, Suffolk County National Bank is the second largest independent bank headquartered on Long Island, with 26 offices in Suffolk County, New York.

Safe Harbor Statement Pursuant to the Private Securities Litigation Reform Act of 1995

This press release may include statements which look to the future. These can include remarks about Suffolk Bancorp, the banking industry, and the economy in general. These remarks are based on current plans and expectations. They are subject, however, to a variety of uncertainties that could cause future results to vary materially from Suffolk’s historical performance, or from current expectations. Factors affecting Suffolk Bancorp include particularly, but are not limited to: changes in interest rates; increases or decreases in retail and commercial economic activity in Suffolk’s market area; variations in the ability and propensity of consumers and businesses to borrow, repay, or deposit money, or to use other banking and financial services; and changes in government regulations.

PRESS RELEASE July 15, 2005 Page 2 of 4

STATISTICAL SUMMARY

(unaudited, in thousands of dollars except for share and per share data)

	2nd Q 2005			2nd Q 2004			Change		6 Mos. 2005			6 Mos. 2004			Change
EARNINGS
Net Income	$	5,325		$	5,033		5.8	%	$	10,457		$	9,897		5.7	%
Net Interest Income		15,902			15,064		5.6	%		31,396			30,026		4.6	%
Earnings-Per-Share - Basic		0.50			0.46		8.7	%		0.98			0.91		7.7	%
Cash Dividends-Per-Share		0.20			0.19		5.3	%		0.39			0.38		2.6	%
AVERAGE BALANCES
Average Assets		1,390,939			1,376,670		1.0	%		1,383,821			1,353,025		2.3	%
Average Net Loans		859,067			827,163		3.9	%		844,283			825,262		2.3	%
Average Investment Securities		431,714			381,206		13.2	%		436,112			384,130		13.5	%
Average Deposits		1,205,108			1,225,751		(1.7	)%		1,197,477			1,207,278		(0.8	)%
Average Equity		99,365			98,667		0.7	%		100,712			99,043		1.7	%
RATIOS
Return on Average Equity		21.44	%		20.40	%	5.1	%		20.77	%		19.99	%	3.9	%
Return on Average Assets		1.53	%		1.46	%	4.8	%		1.51	%		1.46	%	3.4	%
Average Equity/Assets		7.14	%		7.17	%	(0.4	)%		7.28	%		7.32	%	(0.5	)%
Net Interest Margin (FTE)		4.98	%		4.89	%	1.8	%		4.96	%		4.92	%	0.8	%
Efficiency Ratio		51.46	%		48.79	%	5.5	%		51.78	%		50.51	%	2.5	%
Tier 1 Leverage Ratio June 30		7.22	%		7.14	%	1.1	%
Tier 1 Risk-based Capital Ratio June 30		10.01	%		10.25	%	(2.3	)%
Total Risk-based Capital Ratio June 30		10.90	%		11.28	%	(3.4	)%
ASSET QUALITY
during period:
Net (Recoveries) Charge-offs	$	(70	)	$	(66	)	6.1	%	$	(2	)	$	223		(100.9	)%
Net Charge-offs/Average Net Loans (annual)		(0.03	)%		(0.03	)%	0.0	%		(0.00	)%		0.05	%	(100.0	)%
at end of period:
Non-accrual & Restructured Loans	$	4,831		$	3,682		31.2	%
Foreclosed Real Estate (“OREO”)		0			0		0.0	%
Total Non-performing Assets		4,831			3,682		31.2	%
Allowance/Non-performing Assets		183.96	%		267.54	%	(31.2	)%
Allowance/Loans, Net of Discount		1.01	%		1.18	%	(14.4	)%
Net Loans/Deposits		69.14	%		62.97	%	9.8	%
EQUITY
Shares Outstanding		10,552,571			10,883,719		(3.0	)%
Common Equity	$	102,593		$	99,638		3.0	%
Book Value Per Common Share		9.72			9.15		6.2	%
Tangible Common Equity		101,779			98,824		3.0	%
Tangible Book Value Per Common Share		9.64			9.08		6.2	%
LOAN DISTRIBUTION
at end of period:
Commercial, Financial & Agricultural Loans		180,126			182,952		(1.5	)%
Commercial Real Estate Mortgages		291,326			236,940		23.0	%
Real Estate - Construction Loans		62,976			33,996		85.2	%
Residential Mortgages (1st and 2nd Liens)		123,389			115,803		6.6	%
Home Equity Loans		80,939			69,817		15.9	%
Consumer Loans		141,698			193,168		(26.6	)%
Other Loans		563			509		10.6	%
Total Loans (Net of Unearned Discounts)	$	881,017		$	833,185		5.7	%

PRESS RELEASE July 15, 2005 Page 3 of 4

CONSOLIDATED STATEMENTS OF CONDITION

(unaudited, in thousands of dollars except for share and per share data)

	June 30,
	2005			2004			Change
ASSETS
Cash & Due From Banks	$	48,060		$	83,417		(42.4	)%
Federal Funds Sold		21,100			78,400		(73.1	)%
Investment Securities:
Available for Sale, at Fair Value		416,593			377,652		10.3	%
Obligations of States & Political Subdivisions		10,443			9,300		12.3	%
Federal Reserve Bank Stock		638			638		0.0	%
Federal Home Loan Bank Stock		1,930			1,823		5.9	%
Corporate Bonds & Other Securities		100			100		0.0	%
Total Investment Securities		429,704			389,513		10.3	%
Total Loans		881,017			833,185		5.7	%
Allowance for Loan Losses		8,887			9,851		(9.8	)%
Net Loans		872,130			823,334		5.9	%
Premises & Equipment, Net		22,765			22,562		0.9	%
Accrued Interest Receivable, Net		6,276			5,197		20.8	%
Excess of Cost Over Fair Value of Net Assets Acquired		814			814		0.0	%
Other Assets		19,292			21,128		(8.7	)%
TOTAL ASSETS	$	1,420,141		$	1,424,365		(0.3	)%
LIABILITIES & STOCKHOLDERS’ EQUITY
Demand Deposits	$	445,252		$	446,261		(0.2	)%
Saving, N.O.W. & Money Market Deposits		588,086			642,841		(8.5	)%
Time Certificates of $100,000 or More		24,910			18,350		35.7	%
Other Time Deposits		203,194			200,099		1.5	%
Total Deposits		1,261,442			1,307,551		(3.5	)%
Repurchase Agreements		37,355			—		100.0	%
Dividend Payable on Common Stock		2,117			2,069		2.3	%
Accrued Interest Payable		1,088			726		49.9	%
Other Liabilities		15,546			14,381		8.1	%
TOTAL LIABILITIES		1,317,548			1,324,727		(0.5	)%
STOCKHOLDERS’ EQUITY
Common Stock (par value $2.50; 15,000,000 shares authorized; 10,552,571 and 10,883,719 shares outstanding at June 30, 2005 and 2004, respectively)		33,884			33,879		0.0	%
Surplus		19,439			19,375		0.3	%
Treasury Stock at Par (3,001,165 and 2,667,899 shares, respectively)		(7,502	)		(6,670	)	12.5	%
Retained Earnings		55,520			52,547		5.7	%
		101,341			99,131		2.2	%
Accumulated Other Comprehensive Income, Net of Tax		1,252			507		146.9	%
TOTAL STOCKHOLDERS’ EQUITY		102,593			99,638		3.0	%
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$	1,420,141		$	1,424,365		(0.3	)%

PRESS RELEASE July 15, 2005 Page 4 of 4

CONSOLIDATED STATEMENTS OF INCOME

(unaudited, in thousands of dollars except for share and per share data)

	For the 3 Months Ended						For the Year to Date
	6/30/05		6/30/04		Change		2005		2004		Change
INTEREST INCOME
Federal Funds Sold	$	41	$	79	(48.1	)%	$	51	$	87	(41.4	)%
United States Treasury Securities		96		104	(7.7	)%		192		208	(7.7	)%
Obligations of States & Political Subdivisions		495		215	130.2	%		904		391	131.2	%
Mortgage-Backed Securities		2,579		2,548	1.2	%		5,236		4,986	5.0	%
U.S. Government Agency Obligations		1,222		966	26.5	%		2,445		2,044	19.6	%
Corporate Bonds & Other Securities		44		17	158.8	%		75		38	97.4	%
Loans		14,176		12,950	9.5	%		27,558		25,972	6.1	%
Total Interest Income		18,653		16,879	10.5	%		36,461		33,726	8.1	%
INTEREST EXPENSE
Saving, N.O.W. & Money Market Deposits		867		664	30.6	%		1,689		1,310	28.9	%
Time Certificates of $100,000 or more		131		88	48.9	%		248		182	36.3	%
Other Time Deposits		1,164		1,058	10.0	%		2,177		2,168	0.4	%
Federal Funds Purchased		387		—	100.0	%		489		—	100.0	%
Interest on Other Borrowings		202		5	3,940.0	%		462		40	1,055.0	%
Total Interest Expense		2,751		1,815	51.6	%		5,065		3,700	36.9	%
Net-interest Income		15,902		15,064	5.6	%		31,396		30,026	4.6	%
Provision for Loan Losses		375		1,298	(71.1	)%		675		1,523	(55.7	)%
Net-interest Income After Provision		15,527		13,766	12.8	%		30,721		28,503	7.8	%
OTHER INCOME
Service Charges on Deposit Accounts		1,412		1,419	(0.5	)%		2,770		2,827	(2.0	)%
Other Service Charges, Commissions & Fees		669		645	3.7	%		1,228		1,218	0.8	%
Fiduciary Fees		277		308	(10.1	)%		561		621	(9.7	)%
Net Securities Gains		—		1,219	(100.0	)%		—		1,219	(100.0	)%
Other Operating Income		131		183	(28.4	)%		268		341	(21.4	)%
Total Other Income		2,489		3,774	(34.0	)%		4,827		6,226	(22.5	)%
OTHER EXPENSE
Salaries & Employee Benefits		5,555		5,340	4.0	%		11,079		10,848	2.1	%
Net Occupancy Expense		849		829	2.4	%		1,868		1,682	11.1	%
Equipment Expense		540		510	5.9	%		1,099		1,080	1.8	%
Other Operating Expense		2,520		2,512	0.3	%		4,711		4,700	0.2	%
Total Other Expense		9,464		9,191	3.0	%		18,757		18,310	2.4	%
Income Before Provision for Income Taxes		8,552		8,349	2.4	%		16,791		16,419	2.3	%
Provision for Income Taxes		3,227		3,316	(2.7	)%		6,334		6,522	(2.9	)%
NET INCOME	$	5,325	$	5,033	5.8	%	$	10,457	$	9,897	5.7	%
Average:
Common Shares Outstanding		10,616,833		10,887,087	(2.5	)%		10,690,085		10,907,715	(2.0	)%
Dilutive Stock Options		25,101		33,080	(24.1	)%		28,952		34,760	(16.7	)%
Average Total		10,641,934		10,920,167	(2.5	)%		10,719,037		10,942,475	(2.0	)%
EARNINGS PER COMMON SHARE
Basic	$	0.50	$	0.46	8.7	%	$	0.98	$	0.91	7.7	%
Diluted	$	0.50	$	0.46	8.7	%	$	0.98	$	0.90	8.9	%