EXHIBIT 99.1
PRESS RELEASE
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FOR IMMEDIATE RELEASE SUFFOLK [LOGO] BANCORP
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 FIRST QUARTER EARNINGS
Riverhead, New York, April 13, 2004 -- Suffolk Bancorp (NASDAQ - SUBK)
today released the results of its operations during the first quarter of 2004.
Net income for the first quarter was $4,864,000, down 8.9 percent from
$5,339,000 posted during the same period last year. Earnings-per-share for the
quarter were $0.45 compared to $0.47, down 4.3 percent. A detailed financial
summary follows the text of this release.
President and Chief Executive Officer, Thomas S. Kohlmann, commented, "The
first quarter of 2004 presented several challenges. As has been the case this
past year or so, the most significant of these challenges is the compression of
our net interest margin. Interest rates have been lower, longer than at any time
during the past forty years. Yields on loans and other investments have dropped
by more than the rates paid for deposits which have less room to decline. The
result has been a decrease in net interest income."
He went on to say, "Continued amortization and prepayment of consumer
loans have resulted in much greater liquidity, which, in turn, has been
reinvested at lower, current rates. This is a structural change in the
composition of our loan portfolio, brought about primarily by the financing
incentives of the major automobile manufacturers, including the so-called
"zero-zero" loans made to the most credit-worthy customers which require no down
payment and carry no interest. We believe that this trend will continue for the
foreseeable future."
He continued, "To compensate for this, we have concentrated on commercial
lending, as well as commercial real estate and residential mortgages. Total loan
balances are actually ahead by 4.4 percent from the same time a year ago. We
have also kept a tight rein on expenses, which actually declined by 0.2 percent
while assets grew by 3.2 percent, versus March 31st of last year."
He concluded, "By the most important measure of internal profitability,
Suffolk remains among the high performers in the industry, even in the face of
current challenges. Return on average equity was 19.57 percent in comparison to
the industry average of 12.29 percent for fourth quarter of 2003, the most
recent quarter for which data is available, or even to 13.79 percent for banking
companies with $1 to 5 billion in assets. While we manage Suffolk's core
business to weather all possible interest rate environments, we believe that in
the long term, the most likely direction for rates is up, and expect that there
will then be opportunities to widen the net interest margin."
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
January 15, 2004 SUFFOLK [LOGO] BANCORP
Page 2 of 4
STATISTICAL SUMMARY
(unaudited, in thousands of dollars except for share and per share data)
1st Q 2004 1st Q 2003 Change
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EARNINGS
Net Income $ 4,864 $ 5,339 (8.9%)
Net Interest Income 14,962 15,738 (4.9%)
Earnings-Per-Share - Basic 0.45 0.47 (4.3%)
Cash Dividends-Per-Share 0.19 0.19 --
AVERAGE BALANCES
Average Assets 1,329,745 1,276,165 4.2%
Average Net Loans 823,340 781,474 5.4%
Average Investment Securities 387,086 375,819 3.0%
Average Deposits 1,188,599 1,141,495 4.1%
Average Equity 99,419 102,363 (2.9%)
RATIOS
Return on Average Equity 19.57% 20.86% (6.2%)
Return on Average Assets 1.46% 1.67% (12.6%)
Average Equity/Assets 7.48% 8.02% (6.7%)
Net Interest Margin (FTE) 4.96% 5.42% (8.5%)
Efficiency Ratio 52.37% 50.04% 4.7%
Tier 1 Leverage Ratio Mar. 31 7.21% 7.04% 2.4%
Tier 1 Risk-based Capital Ratio Mar. 31 10.29% 10.04% 2.5%
Total Risk-based Capital Ratio Mar. 31 11.20% 10.99% 1.9%
ASSET QUALITY during period:
Net Charge-offs $ 289 $ 413 (30.0%)
Net Charge-offs/Average Net Loans (annual) 0.14% 0.21% (33.3%)
at end of period:
Non-accrual & Restructured Loans $ 1,430 $ 1,272 12.4%
Foreclosed Real Estate ("OREO") 0 0 --
Total Non-performing Assets 1,430 1,272 12.4%
Allowance/Non-performing Assets 593.50% 672.33% (11.7%)
Allowance/Loans, Net of Discount 1.01% 1.07% (5.6%)
Net Loans/Deposits 70.88% 70.80% 0.1%
EQUITY
Shares Outstanding 10,900,469 11,084,181 (1.7%)
Common Equity $ 103,055 $ 98,498 4.6%
Book Value Per Common Share 9.45 8.89 6.3%
Tangible Common Equity 102,241 97,684 4.7%
Tangible Book Value Per Common Share 9.38 8.81 6.5%
LOAN DISTRIBUTION at end of period:
Commercial, Financial & Agricultural Loans 184,953 162,853 13.6%
Commercial Real Estate Mortgages 232,694 189,536 22.8%
Real Estate - Construction Loans 31,963 38,176 (16.3%)
Residential Mortgages (1st and 2nd Liens) 112,757 96,994 16.3%
Home Equity Loans 65,394 49,933 31.0%
Consumer Loans 208,800 264,734 (21.1%)
Other Loans 1,836 551 233.2%
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Total Loans (Net of Unearned Discounts) $ 838,397 $ 802,777 4.4%
PRESS RELEASE
January 15, 2004 SUFFOLK [LOGO] BANCORP
Page 3 of 4
CONSOLIDATED STATEMENTS OF CONDITION
(unaudited, in thousands of dollars except for share and per share data)
March 31,
2004 2003 Change
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ASSETS
Cash & Due From Banks $ 42,359 $ 44,078 (3.9%)
Federal Funds Sold 900 2,700 (66.7%)
Investment Securities:
Available for Sale, at Fair Value 366,270 362,594 1.0%
Obligations of States & Political Subdivisions 12,769 8,178 56.1%
Federal Reserve Bank Stock 638 638 0.0%
Federal Home Loan Bank Stock 1,535 1,361 12.8%
Corporate Bonds & Other Securities 100 100 --
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Total Investment Securities 381,312 372,871 2.3%
Total Loans 838,397 802,777 4.4%
Allowance for loan losses 8,487 8,552 (0.8%)
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Net Loans 829,910 794,225 4.5%
Premises & Equipment, Net 22,740 21,283 6.8%
Accrued Interest Receivable, Net 5,084 5,443 (6.6%)
Excess of Cost Over Fair Value of Net Assets Acquired 814 814 0.0%
Other Assets 19,762 20,617 (4.1%)
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TOTAL ASSETS $ 1,302,881 $ 1,262,031 3.2%
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LIABILITIES & STOCKHOLDERS' EQUITY
Demand Deposits $ 350,692 $ 301,835 16.2%
Saving, N.O.W. & Money Market Deposits 592,257 559,226 5.9%
Time Certificates of $100,000 or more 20,858 22,697 (8.1%)
Other Time Deposits 207,022 238,071 (13.0%)
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Total Deposits 1,170,829 1,121,829 4.4%
Federal Home Loan Bank Borrowings 5,400 18,500 (70.8%)
Dividend Payable on Common Stock 2,074 2,136 (2.9%)
Accrued Interest Payable 734 1,047 (29.9%)
Other Liabilities 20,789 20,021 3.8%
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TOTAL LIABILITIES 1,199,826 1,163,533 3.1%
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STOCKHOLDERS' EQUITY
Common Stock (par value $2.50; 15,000,000 shares authorized;
10,900,469 and 11,084,181 shares outstanding at
March 31, 2004 and 2003, respectively) 33,879 33,838 0.1%
Surplus 19,375 19,230 0.8%
Treasury Stock at Par (2,651,149 and 2,451,037 shares, respectively) (6,628) (6,128) 8.2%
Retained Earnings 50,120 43,828 14.4%
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96,746 90,768 6.6%
Accumulated Other Comprehensive Income, Net of Tax 6,309 7,730 (18.4%)
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TOTAL STOCKHOLDERS' EQUITY 103,055 98,498 4.6%
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,302,881 $ 1,262,031 3.2%
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PRESS RELEASE
January 15, 2004 SUFFOLK [LOGO] BANCORP
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
3/31/04 3/31/03 Change
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INTEREST INCOME
Federal Funds Sold $ 8 $ 27 (70.4%)
United States Treasury Securities 104 104 --
Obligations of States & Political Subdivisions 176 129 36.4%
Mortgage-Backed Securities 2,438 3,188 (23.5%)
U.S. Government Agency Obligations 1,078 826 30.5%
Corporate Bonds & Other Securities 21 35 (40.0%)
Loans 13,022 14,378 (9.4%)
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Total Interest Income 16,847 18,687 (9.8%)
INTEREST EXPENSE
Saving, N.O.W. & Money Market Deposits 646 1,190 (45.7%)
Time Certificates of $100,000 or more 94 135 (30.4%)
Other Time Deposits 1,110 1,604 (30.8%)
Federal Funds Purchased 35 12 191.7%
Interest on Other Borrowings -- 8 (100.0%)
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Total Interest Expense 1,885 2,949 (36.1%)
Net-interest Income 14,962 15,738 (4.9%)
Provision for loan losses 225 270 (16.7%)
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Net-interest Income After Provision 14,737 15,468 (4.7%)
OTHER INCOME
Service Charges on Deposit Accounts 1,408 1,412 (0.3%)
Other Service Charges, Commissions & Fees 573 510 12.4%
Fiduciary Fees 313 280 11.8%
Other Operating Income 158 315 (49.8%)
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Total Other Income 2,452 2,517 (2.6%)
OTHER EXPENSE
Salaries & Employee Benefits 5,508 5,448 1.1%
Net Occupancy Expense 853 807 5.7%
Equipment Expense 570 708 (19.5%)
Other Operating Expense 2,188 2,171 0.8%
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Total Other Expense 9,119 9,134 (0.2%)
Income Before Provision for Income Taxes 8,070 8,851 (8.8%)
Provision for Income Taxes 3,206 3,512 (8.7%)
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NET INCOME $ 4,864 5,339 (8.9%)
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Average: Common Shares Outstanding 10,928,342 11,311,275 (3.4%)
Dilutive Stock Options 35,911 42,882 (16.3%)
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Average Total 10,964,253 11,354,157 (3.4%)
EARNINGS PER COMMON SHARE Basic $ 0.45 $ 0.47 (4.3%)
Diluted $ 0.44 $ 0.47 (6.4%)