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, 2002
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 Executive Offices) (Zip Code)
(Registrant's telephone number, including area code) (631) 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.
11,531,981 SHARES OF COMMON STOCK OUTSTANDING AS OF NOVEMBER 1, 2002
1
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2
SUFFOLK BANCORP AND SUBSIDIARIES
page
Part I - Financial Information (unaudited)
Item 1. Financial Statements 4
Consolidated Statements of Condition 4
Consolidated Statements of Income, For the Three Months
Ended September 30, 2002 and 2001 5
Consolidated Statements of Income, For the Nine Months
Ended September 30, 2002 and 2001 6
Statements of Cash Flows, For the Nine Months Ended
September 30, 2002 and 2001 7
Notes to the Unaudited Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk 12
Item 4. Controls and Procedures
Part II - Other Information 12
Item 6. Exhibits and Reports on Form 8-K. 12
Signatures 13
Certifications of Periodic Report 14
3
SUFFOLK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
(in thousand of dollars except for share and per share data, restated to give
effect to 100% stock dividend on 1/2/02)
September 30, December 31,
2002 2001
----------- -----------
unaudited
ASSETS
Cash & Due From Banks $ 56,952 $ 60,926
Federal Funds Sold 46,000 17,600
Investment Securities:
Available for Sale, at Fair Value 331,619 241,061
Held to Maturity (Fair Value of $15,142 and $13,872, respectively)
Obligations of States & Political Subdivisions 12,342 11,709
Federal Reserve Bank Stock 638 638
Federal Home Loan Bank Stock 1,361 1,112
Corporate Bonds & Other Securities 100 100
----------- -----------
Total Investment Securities 346,060 254,620
Total Loans 785,582 796,110
Less: Allowance for Possible Loan Losses 9,076 8,825
----------- -----------
Net Loans 776,506 787,285
Premises & Equipment, Net 19,496 13,801
Accrued Interest Receivable, Net 5,612 5,557
Excess of Cost Over Fair Value of Net Assets Acquired 814 814
Other Assets 22,240 24,344
----------- -----------
TOTAL ASSETS 1,273,680 1,164,947
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
Demand Deposits 311,560 294,190
Savings, N.O.W.'s & Money Market Deposits 555,659 453,922
Time Certificates of $100,000 or more 26,652 30,038
Other Time Deposits 250,920 273,562
----------- -----------
Total Deposits 1,144,791 1,051,712
Dividend Payable on Common Stock 1,973 1,648
Accrued Interest Payable 1,450 2,513
Other Liabilities 17,396 12,237
----------- -----------
TOTAL LIABILITIES 1,165,610 1,068,110
----------- -----------
STOCKHOLDERS' EQUITY
Common Stock (par value $2.50; 15,000,000 shares authorized;
11,569,481 and 11,770,596 shares outstanding at
September 30, 2002 and December 31, 2001, respectively) 33,838 33,826
Surplus 19,230 19,165
Treasury Stock at Par (1,960,737 and 1,759,622 shares, respectively) (4,914) (4,399)
Undivided Profits 51,492 47,149
----------- -----------
99,646 95,741
Accumulated Other Comprehensive Income, Net of Tax 8,424 1,096
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 108,070 96,837
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,273,680 $ 1,164,947
=========== ===========
See accompanying notes to consolidated financial statements.
4
SUFFOLK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands of dollars except for share and per share data, restated to give
effect to 100% stock dividend on 1/2/02)
For the Three Months Ended
September 30, September 30,
2002 2001
----------- -----------
unaudited unaudited
INTEREST INCOME
Federal Funds Sold $ 240 $ 663
United States Treasury Securities 103 224
Obligations of States & Political Subdivisions (tax exempt) 138 95
Mortgage-Backed Securities 3,234 1,436
U.S. Government Agency Obligations 766 603
Corporate Bonds & Other Securities 22 36
Loans 15,327 16,938
----------- -----------
Total Interest Income 19,830 19,995
INTEREST EXPENSE
Savings, N.O.W.'s & Money Market Deposits 1,765 2,311
Time Certificates of $100,000 or more 191 364
Other Time Deposits 1,987 3,310
Federal Funds Purchased -- --
Interest on Other Borrowings -- --
----------- -----------
Total Interest Expense 3,943 5,985
Net-interest Income 15,887 14,010
Provision for Possible Loan Losses 360 405
----------- -----------
Net-interest Income After Provision for Possible Loan Losses 15,527 13,605
OTHER INCOME
Service Charges on Deposit Accounts 1,494 1,292
Other Service Charges, Commissions & Fees 748 505
Fiduciary Fees 282 250
Other Operating Income 283 310
Net Gain on Sale of Securities -- --
----------- -----------
Total Other Income 2,807 2,357
OTHER EXPENSE
Salaries & Employee Benefits 5,266 4,384
Net Occupancy Expense 730 713
Equipment Expense 679 582
Other Real Estate Expense -- --
Other Operating Expense 2,416 2,389
----------- -----------
Total Other Expense 9,091 8,068
Income Before Provision for Income Taxes 9,243 7,894
Provision for Income Taxes 3,666 3,134
----------- -----------
NET INCOME $ 5,577 $ 4,760
=========== ===========
Average: Common Shares Outstanding 11,631,041 11,799,620
Dilutive Stock Options 43,884 18,634
----------- -----------
Average Total Common Shares and Dilutive Options 11,674,925 11,818,254
EARNINGS PER COMMON SHARE Basic $ 0.48 $ 0.40
Diluted $ 0.48 $ 0.40
See accompanying notes to consolidated financial statements.
5
SUFFOLK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousand of dollars except for share and per share data, restated to give
effect to 100% stock dividend on 1/2/02)
For the Nine Months Ended
September 30, September 30,
2002 2001
----------- -----------
unaudited unaudited
INTEREST INCOME
Federal Funds Sold $ 508 841
United States Treasury Securities 367 950
Obligations of States & Political Subdivisions (tax exempt) 425 416
Mortgage-Backed Securities 8,987 4,317
U.S. Government Agency Obligations 2,073 1,593
Corporate Bonds & Other Securities 68 164
Loans 46,584 51,580
----------- -----------
Total Interest Income 59,012 59,861
INTEREST EXPENSE
Savings, N.O.W.'s & Money Market Deposits 5,202 6,578
Time Certificates of $100,000 or more 648 1,089
Other Time Deposits 6,792 10,611
Federal Funds Purchased 1 98
Interest on Other Borrowings -- 548
----------- -----------
Total Interest Expense 12,643 18,924
Net-interest Income 46,369 40,937
Provision for Possible Loan Losses 1,020 1,215
----------- -----------
Net-interest Income After Provision 45,349 39,722
OTHER INCOME
Service Charges on Deposit Accounts 4,245 3,915
Other Service Charges, Commissions & Fees 1,544 1,197
Fiduciary Fees 860 728
Other Operating Income 693 751
Net Gain on Sale of Securities -- 395
----------- -----------
Total Other Income 7,342 6,986
OTHER EXPENSE
Salaries & Employee Benefits 15,338 13,358
Net Occupancy Expense 2,079 2,143
Equipment Expense 1,900 1,730
Other Real Estate Expense -- 10
Other Operating Expense 6,935 6,434
----------- -----------
Total Other Expense 26,252 23,675
Income Before Provision for Income Taxes 26,439 23,033
Provision for Income Taxes 10,507 9,042
----------- -----------
NET INCOME $ 15,932 $ 13,991
=========== ===========
Average: Common Shares Outstanding 11,703,306 11,839,914
Dilutive Stock Options 42,023 15,748
----------- -----------
Average Total Common Shares and Dilutive Options 11,745,329 11,855,662
EARNINGS PER COMMON SHARE Basic $ 1.36 $ 1.18
Diluted $ 1.36 $ 1.18
See accompanying notes to consolidated financial statements.
6
SUFFOLK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands of dollars)
For the Nine Months Ended
September 30, September 30,
2002 2001
--------- ---------
unaudited unaudited
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME $ 15,932 $ 13,991
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
Provision for Possible Loan Losses 1,020 1,215
Depreciation & Amortization 1,673 1,493
Amortization of Excess Cost Over Fair Value of Net Assets Acquired -- 271
Accretion of Discounts (518) (501)
Amortization of Premiums 1,574 321
(Increase) Decrease in Accrued Interest Receivable (56) 787
Decrease (Increase) in Other Assets 2,105 (665)
Decrease in Accrued Interest Payable (1,064) (560)
Increase in Other Liabilities 70 3,577
Net Security Gains -- (395)
--------- ---------
Net Cash Provided by Operating Activities 20,736 19,534
CASH FLOWS FROM INVESTING ACTIVITIES
Principal Payments on Investment Securities 20,591 9,676
Proceeds from Sale of Investment Securities, Available for Sale -- 1,005
Maturities of Investment Securities; Available for Sale 6,000 83,250
Purchases of Investment Securities; Available for Sale (105,786) (106,908)
Maturities of Investment Securities; Held to Maturity 3,510 11,708
Purchases of Investment Securities; Held to Maturity (4,391) (5,125)
Loan Disbursements & Repayments, Net 9,759 (14,125)
Purchases of Premises & Equipment, Net (7,368) (1,249)
Disposition of Other Real Estate Owned -- 175
--------- ---------
Net Cash Used in Investing Activities (77,685) (21,593)
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase in Deposit Accounts 93,080 70,720
Dividends Paid to Shareholders (5,407) (4,688)
Treasury Shares Acquired (6,298) (4,313)
Stock Options Exercised -- 795
--------- ---------
Net Cash Provided by Financing Activities 81,375 62,514
Net Increase in Cash & Cash Equivalents 24,426 60,455
Cash & Cash Equivalents Beginning of Period 78,526 73,284
--------- ---------
Cash & Cash Equivalents End of Period $ 102,952 $ 133,739
========= =========
See accompanying notes to consolidated financial statements.
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 (Suffolk) 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 ("GAAP")
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, 2001.
The results of operations for the three months ended September 30 , 2002
are not necessarily indicative of the results of operations to be expected for
the remainder of the year.
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
for the Three-Month Periods ended September 30, 2002 and 2001
Net Income
Net income was $5,577,000 for the quarter, ahead 17.2 percent from
$4,760,000 posted during the same period last year. Earnings per share for the
quarter were $0.48 versus $0.40, a gain of 20.0 percent.
Interest Income
Interest income was $19,830,000 for the third quarter of 2002, down 0.8
percent from $19,995,000 posted for the same quarter in 2001. Average net loans
during the third quarter of 2002 totaled $780,796,000 compared to $777,266,000
for the same period of 2001. During the third quarter of 2002, the yield was
6.82 percent (taxable-equivalent) on average earning assets of $1,167,019,000
down from 7.99 percent on average earning assets of $1,004,103,000 during the
third quarter of 2001. Decreases in interest income were attributable primarily
to decrease in interest income on loans, offset by increases in investment
income as a result of a change in the composition of the investment portfolio
emphasizing high-quality, higher-yielding collateralized mortgage obligations.
Interest Expense
Interest expense for the third quarter of 2002 was $3,943,000, down 34.1
percent from $5,985,000 for the same period of 2001. During the third quarter of
2002, the cost of funds was 1.94 percent (taxable-equivalent) on average
interest-bearing liabilities of $813,798,000 down from 3.42 percent on average
interest-bearing liabilities of $699,044,000 during the third quarter of 2001.
Interest expense decreased primarily as a result of decreases in market rates of
interest, and as average demand deposits comprised 29.1 percent of total
deposits.
Each of the Bank's demand deposit accounts has a related
non-interest-bearing sweep account. The sole purpose of the sweep accounts is to
reduce the non-interest-bearing reserve balances that the Bank is required to
maintain with the Federal Reserve Bank, and thereby increase funds available for
investment. Although the sweep accounts are classified as savings accounts for
regulatory purposes, they are included in demand deposits in the accompanying
8
consolidated statements of condition.
Net Interest Income
Net interest income, net of the provision for possible loan losses, is the
largest component of Suffolk's earnings. Net interest income for the third
quarter of 2002 was $15,527,000, up 14.1 percent from $13,605,000 during the
same period of 2001. The net interest margin for the quarter, on a fully
taxable-equivalent basis, was 5.47 percent compared to 5.60 percent for the same
period of 2001.
The following table details the components of Suffolk's net interest income on a
taxable-equivalent basis:
(dollars in thousands)
- ------------------------------------------------------------------------------------------------------------------------------
September 30, 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
- ------------------------------------------------------------------------------------------------------------------------------
INTEREST-EARNING ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
U.S. treasury securities $ 9,783 $ 106 4.34% $ 13,097 $ 229 7.00%
Collateralized mortgage obligations 231,157 3,141 5.43 83,609 1,436 6.87
Mortgage backed securities 8,251 93 4.53 -- -- --
Obligations of states and political subdivisions 14,113 210 5.95 7,114 143 8.07
U.S. govt. agency obligations 65,199 766 4.70 44,327 602 5.44
Corporate bonds and other securities 2,099 22 4.11 2,267 36 6.31
Federal funds sold and securities purchased
under agreements to resell 55,621 240 1.73 76,423 664 3.47
Loans, including non-accrual loans
Commercial, financial agricultural loans 127,406 2,048 6.43 133,492 2,672 8.01
Commercial real estate mortgages 184,153 3,847 8.36 164,940 3,805 9.23
Real estate construction loans 33,715 788 9.35 25,043 673 10.76
Residential mortgages (1st and 2nd liens) 91,086 1,638 7.19 92,412 1,963 8.49
Home equity loans 35,029 514 5.87 25,378 482 7.59
Consumer loans 305,891 6,492 8.49 335,449 7,344 8.76
Other loans (overdrafts) 3,516 -- -- 552 -- --
- ------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets $1,167,019 $19,905 6.82% $1,004,103 $20,049 7.99%
==============================================================================================================================
Cash and due from banks $ 47,776 $ 45,309
Other non-interest-earning assets 43,369 39,207
- ------------------------------------------------------------------------------------------------------------------------------
Total assets $1,258,164 $1,088,619
- ------------------------------------------------------------------------------------------------------------------------------
INTEREST-BEARING LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------
Savings, N.O.W.'s and money market deposits $ 533,751 $ 1,765 1.32% $ 394,009 $ 2,311 2.35%
Time deposits 280,047 2,179 3.11 305,035 3,674 4.82
- ------------------------------------------------------------------------------------------------------------------------------
Total savings and time deposits 813,798 3,944 1.94 699,044 5,985 3.42
Federal funds purchased and securities
sold under agreement to repurchase -- -- -- -- -- --
Other borrowings -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities $ 813,798 $ 3,944 1.94% $ 699,044 $ 5,985 3.42%
==============================================================================================================================
Rate spread 4.88% 4.56%
Non-interest-bearing deposits $ 334,679 $ 274,848
Other non-interest-bearing liabilities 6,826 23,309
- ------------------------------------------------------------------------------------------------------------------------------
Total liabilities $1,155,303 $ 997,201
Stockholders' equity 102,861 91,418
- ------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $1,258,164 $1,088,619
Net-interest income (taxable-equivalent basis)
and effective interest rate differential $15,961 5.47% $14,064 5.60%
Less: taxable-equivalent basis adjustment (74) (54)
- ------------------------------------------------------------------------------------------------------------------------------
Net-interest income $15,887 $14,010
==============================================================================================================================
9
Other Income
Other income increased to $2,807,000 for the three months compared to
$2,357,000 the previous year. Service charges on deposits were up 15.6 percent.
Service charges, including commissions and fees other than for deposits,
increased by 48.1 percent. Trust revenue was up 12.8 percent. Other operating
income decreased by 8.7 percent.
Other Expense
Other expense for the third quarter of 2002 was $9,091,000, up 12.7
percent from $8,068,000 for the comparable period in 2001. Employee compensation
increased by 20.1 percent, net occupancy increased 2.4 percent, equipment
expense increased by 16.7 percent, while other operating expense increased by
1.1 percent.
Capital Resources
Stockholders' equity totaled $108,070,000 on September 30, 2002, an
increase of 11.6 percent from $96,837,000 on December 31, 2001. The ratio of
equity to assets was 8.5 percent at September 30, 2002 and 8.3 percent at
December 31, 2001. The following table details amounts and ratios of Suffolk's
regulatory capital:
(in thousands of dollars except ratios)
- -------------------------------------------------------------------------------------------------------------------------
To be well capitalized
For capital under prompt corrective
Actual adequacy action provisions
Amount Ratio Amount Ratio Amount Ratio
- -------------------------------------------------------------------------------------------------------------------------
As of September 30, 2002
Total capital (to risk-weighted assets) $107,785 12.16% $70,912 8.00% $88,641 10.00%
Tier 1 capital (to risk-weighted assets) 98,709 11.14% 35,456 4.00% 53,184 6.00%
Tier 1 capital (to average assets) 98,709 7.85% 50,289 4.00% 62,861 5.00%
- -------------------------------------------------------------------------------------------------------------------------
As of December 31, 2001
Total capital (to risk-weighted assets) $105,136 11.91% $70,641 8.00% $88,301 10.00%
Tier 1 capital (to risk-weighted assets) 96,311 10.91% 35,320 4.00% 52,980 6.00%
Tier 1 capital (to average assets) 96,311 8.92% 43,194 4.00% 53,992 5.00%
=========================================================================================================================
Credit Risk
Suffolk makes loans based on the best evaluation possible of the
creditworthiness of the borrower. Even with careful underwriting, some loans may
not be repaid as originally agreed. To provide for this possibility, Suffolk
maintains an allowance for possible loan losses, based on an analysis of the
performance of the loans in its portfolio. The analysis includes subjective
factors based on management's judgment as well as quantitative evaluation.
Prudent, conservative estimates should produce an allowance that will provide
for a range of losses. According to generally accepted accounting principles
("GAAP") a financial institution should record its best estimate. Appropriate
factors contributing to the estimate may include changes in the composition of
the institution's assets, or potential economic slowdowns or downturns. Also
important is the geographical or political environment in which the institution
operates. Suffolk's management considers all of these factors when determining
the provision for possible loan losses.
10
The following table presents information about the allowance for possible loan
losses: (in thousands of dollars except for ratios)
- --------------------------------------------------------------------------------------------------------------------------
For the For the three months ended
last 12 Sept. 30 June 30 Mar. 31 Dec. 31
months 2002 2002 2002 2001
- --------------------------------------------------------------------------------------------------------------------------
Allowance for possible loan losses
Beginning balance $ 8,750 $ 8,957 $ 8,834 $ 8,825 $ 8,750
Total charge-offs 1,319 335 307 386 291
Total recoveries 296 94 70 95 37
Provision for possible loan losses 1,349 360 360 300 329
- --------------------------------------------------------------------------------------------------------------------------
Ending balance $ 9,076 $ 9,076 $ 8,957 $ 8,834 $ 8,825
==========================================================================================================================
Coverage ratios
Loans, net of discounts: average $791,871 $789,784 $802,794 $790,472 $784,435
at end of period 795,244 785,582 806,694 792,588 796,110
Non-performing assets 2,257 1,753 2,987 2,319 1,968
Non-performing assets/total loans (net of discount) 0.28% 0.22% 0.37% 0.29% 0.25%
Net charge-offs/average net loans (annualized) 0.13% 0.12% 0.12% 0.15% 0.13%
Allowance/non-accrual, restructured, & OREO 411.74% 517.74% 299.87% 380.94% 448.42%
Allowance for loan losses/net loans 1.12% 1.16% 1.11% 1.11% 1.11%
- --------------------------------------------------------------------------------------------------------------------------
Recent Accounting Pronouncements
Suffolk implemented SFAS No. 142, "Goodwill and Other Intangible Assets" on
January 1, 2002. As of September 30, 2002, the balance of excess cost over the
fair value of net assets acquired recorded on Suffolk's statement of condition
was $814,000. During the third quarter of 2002, Suffolk determined that there
was no impairment of the goodwill recorded on its books and no expense was
recorded. Suffolk recorded expense of $90,483 to amortize goodwill during the
third quarter of 2001.
11
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
Market Risk
Suffolk originates and invests in interest-earning assets and solicits
interest-bearing deposit accounts. Suffolk's operations are subject to market
risk resulting from fluctuations in interest rates to the extent that there is a
difference between the amounts of interest-earning assets and interest-bearing
liabilities that are prepaid, withdrawn, mature, or repriced in any given period
of time. Suffolk's earnings or the net value of its portfolio (the present value
of expected cash flows from liabilities) will change when interest rates change.
The principal objective of Suffolk's asset/liability management program is to
maximize net interest income while keeping risks acceptable. These risks include
both the effect of changes in interest rates, and risks to liquidity. The
program also provides guidance to management in funding Suffolk's investment in
loans and securities. Suffolk's exposure to interest-rate risk has not changed
substantially since December 31, 2001.
Business Risks and Uncertainties
This report contains some statements that look to the future. These may include
remarks about Suffolk Bancorp, the banking industry, and the economy in general.
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. Further, it could take Suffolk longer
than anticipated to implement its strategic plans to increase revenue and manage
non-interest expense, or it may not be possible to implement those plans at all.
Finally, new and unanticipated legislation, regulation, or accounting standards
may require Suffolk to change its practices in ways that materially change the
results of operation. Each of the factors may change in ways that management
does not now foresee. 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.
Item 4.
Controls and Procedures
Suffolk's Chief Executive Officer and Chief Financial Officer (collectively, the
"Certifying Officers") are responsible for establishing and maintaining
disclosure controls and procedures for Suffolk. Based upon their evaluation of
these controls and procedures as of a date within 90 days of the filing of this
report, the Certifying Officers have concluded that Suffolk's disclosure
controls and procedures are effective to ensure that information required to be
disclosed by Suffolk in this report is accumulated and communicated to Suffolk's
management, including its principal executive officers as appropriate, to allow
timely decisions regarding required disclosure.
The Certifying Officers also have indicated that there were no significant
changes in Suffolk's internal controls or other factors that could significantly
affect these controls subsequent to the date of their evaluation, and there were
no corrective actions with regard to signficant deficiencies and material
weaknesses.
PART II
Item 6. Exhibits and Reports on Form 8-K.
None
12
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 4, 2002 /s/ Thomas S. Kohlmann
----------------------
Thomas S. Kohlmann
President & Chief Executive Officer
Date: November 4, 2002 /s/ J. Gordon Huszagh
---------------------
J. Gordon Huszagh
Executive Vice President & Chief
Financial Officer
13
CERTIFICATION OF PERIODIC REPORT
I, Thomas S. Kohlmann, Chief Executive Officer of the Company, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Suffolk Bancorp;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in the Report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to date of their evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Dated: November 4, 2002 /s/ Thomas S. Kohlmann
-----------------------------------
Thomas S. Kohlmann
President & Chief Executive Officer
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CERTIFICATION OF PERIODIC REPORT
I, J. Gordon Huszagh, Chief Financial Officer of the Company, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Suffolk Bancorp;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in the Report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to date of their evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Dated: November 4, 2002 /s/ J. Gordon Huszagh
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J. Gordon Huszagh
Executive Vice President & Chief
Financial Officer
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