ITEM 1. Business
Suffolk Bancorp (“Suffolk”)
Suffolk was incorporated on January 2, 1985 as a bank holding company. On that date, Suffolk acquired, and currently owns, all of the outstanding capital stock of Suffolk County National Bank. On July 14, 1988, Suffolk acquired all the outstanding capital stock of Island Computer Corporation of New York, Inc. The business of Suffolk consists primarily of the ownership, supervision, and control of its subsidiaries. On April 11, 1994, Suffolk acquired all the outstanding capital stock of Hamptons Bancshares, Inc. and merged it into a subsidiary. During 1996, the operations of Island Computer Corporation of New York, Inc. were assumed by Suffolk County National Bank.
Suffolk’s chief competition includes local banks with main or branch offices in the service area of Suffolk County National Bank, including North Fork Bank and Bridgehampton National Bank. Additionally, New York City money center banks and regional banks provide competition. These banks include primarily Citibank, Bank of America, J.P. Morgan Chase, Commerce Bank, and Hudson City Savings.
Suffolk and its subsidiaries had 341 full-time and 52 part-time employees on December 31, 2007.
Suffolk County National Bank (the “Bank”)
The Suffolk County National Bank of Riverhead was organized under the national banking laws of the United States of America on January 6, 1890. The Bank is a member of the Federal Reserve System, and its deposits are insured by the Federal Deposit Insurance Corporation to the extent provided by law.
Directed by members of the communities it serves, the Bank’s main service area includes the towns of Babylon, Brookhaven, East Hampton, Islip, Riverhead, Smithtown, Southampton, and Southold. The main office of the Bank is situated at 6 West Second Street, Riverhead, New York. Its branch offices are located at Bohemia, Center Moriches, Cutchogue, Deer Park, East Hampton, Hampton Bays, Hauppauge, Manorville, Mattituck, Medford, Miller Place, Montauk, Port Jefferson, Riverhead, Sag Harbor, Sayville, Shoreham, Smithtown, Southampton, Wading River, Water Mill, West Babylon, and Westhampton Beach, New York. Two additional offices in Middle Island and Port Jefferson Station are scheduled to open in 2008.
The Bank is a full-service bank serving the needs of the local residents of Suffolk County. Most of the Bank’s business is devoted to serving those residing in the immediate area of the Bank’s main and branch offices. Among the services offered by the Bank are checking accounts, savings accounts, time and savings certificates, money market accounts, negotiable-order-of-withdrawal accounts, holiday club accounts, and individual retirement accounts; secured and unsecured loans, including commercial loans to individuals, partnerships, and corporations, agricultural loans to farmers, installment loans to finance small businesses, mobile home loans, and automobile loans; home equity and real estate mortgage loans; safe deposit boxes; trust and estate services; the sale of mutual funds and annuities; and the maintenance of a master pension plan for self-employed individuals’ participation. The business of the Bank is only mildly seasonal.
BUSINESS SEGMENT REPORTING
Suffolk is a regional bank, which offers a wide array of products and services to its customers. Pursuant to its banking strategy, emphasis is placed on building relationships with its customers, as opposed to building specific lines of business. As a result, at December 31, 2007 and 2006, Suffolk is not organized around discernible lines of business and prefers to work as an integrated unit to customize solutions for its customers, with business line emphasis and product offerings changing over time as needs and demands change. See page 28 of this Annual Report to Shareholders for the fiscal year ended December 31, 2007.
AVAILABLE INFORMATION
Suffolk files Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements on Form 14(a), and any amendments to those reports, with the United States Securities and Exchange Commission (the “SEC”). The public may read and copy any of these materials at the SEC’s Public Reference Room at 450 Fifth Street, NW, Washington, D.C. 20549. Information on the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330 (1-800-732-0330). The SEC also maintains an Internet site (http://www.sec.gov) that contains reports, proxy, and information statements, and other information regarding issuers, including Suffolk, that file electronically with the SEC. Suffolk also makes these reports available free of charge through its Internet website (http://www.suffolkbancorp.com) as soon as practicably possible after Suffolk files these reports electronically with the SEC.
SUPERVISION AND REGULATION
References in this section to applicable statutes and regulations are brief summaries only, and do not purport to be complete. The reader should consult such statutes and regulations themselves for a full understanding of the details of their operation.
As a consequence of the extensive regulation of commercial banking activities in the United States, the business of Suffolk and its subsidiaries is particularly susceptible to federal and state legislation that may have the effect of increasing or decreasing the cost of doing business, modifying permissible activities, or enhancing the competitive position of other financial institutions.
Suffolk is a bank holding company registered under the Bank Holding Company Act (“BHC” Act) and is subject to supervision and regulation by the Federal Reserve Board. Federal laws subject bank holding companies to particular restrictions on the
types of activities in which they may engage, and to a range of supervisory requirements and activities, including regulatory enforcement actions for violation of laws and policies.
Activities “Closely Related” to Banking
The BHC Act prohibits a bank holding company, with certain limited exceptions, from acquiring direct or indirect ownership or control of any voting shares of any company that is not a bank or from engaging in any activities other than those of banking, managing or controlling banks and certain other subsidiaries, or furnishing services to or performing services for its subsidiaries. One principal exception to these prohibitions allows the acquisition of interests in companies whose activities are found by the Federal Reserve Board, by order or regulation, to be closely related to banking, or managing or controlling banks. If a bank holding company has become a “financial holding company” (an “FHC”), it may engage in activities that are jointly determined by the Federal Reserve Board and the Treasury Department to be “financial in nature or incidental to such financial activity.” FHCs may also engage in activities that are determined by the Federal Reserve to be “complementary to financial activities.” See “Gramm-Leach-Bliley Act” for a brief summary of the statutory provisions relating to FHCs.
Safe and Sound Banking Practices
Bank holding companies are not permitted to engage in unsafe and unsound banking practices. The Federal Reserve Board may order a bank holding company to terminate an activity or control of a nonbank subsidiary if such activity or control constitutes a significant risk to the financial safety, soundness, or stability of a subsidiary bank and is inconsistent with sound banking principles. Regulation Y also requires a holding company to give the Federal Reserve Board prior notice of any redemption or repurchase of its own equity securities, if the consideration to be paid, together with the consideration paid for any repurchases or redemptions in the preceding year, is equal to 10 percent or more of the company’s consolidated net worth.
The Federal Reserve Board has broad authority to prohibit activities of bank holding companies and their non-banking subsidiaries which represent unsafe and unsound banking practices or which constitute violations of laws or regulations. Notably, the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) provides that the Federal Reserve Board can assess civil money penalties for such practices or violations, which can be as high as $1 million per day. FIRREA contains expansive provisions regarding the scope of individuals and entities against which such penalties may be assessed.
Annual Reporting and Examinations
Suffolk is required to file an annual report with the Federal Reserve Board, and such additional information as the Federal Reserve Board may require pursuant to the BHC Act. The Federal Reserve Board may examine a bank holding company or any of its subsidiaries, and charge the company for the cost of such an examination. Suffolk is also subject to reporting and disclosure requirements under state and federal securities laws.
Imposition of Liability for Undercapitalized Subsidiaries
The Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) required each federal banking agency to revise its risk-based capital standards to ensure that those standards take adequate account of interest rate risk, concentration of credit risk, and the risks of nontraditional activities, as well as reflect the actual performance and expected risk of loss on multifamily mortgages. In accordance with the law, each federal banking agency has specified, by regulation, the levels at which an insured institution would be considered “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized.” Under these regulations, as of December 31, 2007, the Bank would be deemed to be “well capitalized.”
FDICIA requires bank regulators to take “prompt corrective action” to resolve problems associated with insured depository institutions. In the event an institution becomes “undercapitalized,” it must submit a capital restoration plan. If an institution becomes “significantly undercapitalized” or “critically undercapitalized,” additional and significant limitations are placed on the institution. The capital restoration plan of an undercapitalized institution will not be accepted by the regulators unless each company “having control of” the undercapitalized institution “guarantees” the subsidiary’s compliance with the capital restoration plan until it becomes “adequately capitalized.” Suffolk has control of the Bank for purpose of this statute.
Additionally, Federal Reserve Board policy discourages the payment of dividends by a bank holding company from borrowed funds as well as payments that would adversely affect capital adequacy. Failure to meet the capital guidelines may result in supervisory or enforcement actions by the Federal Reserve Board.
Acquisition by Bank Holding Companies
The BHC Act requires every bank holding company to obtain the prior approval of the Federal Reserve Board before it may acquire all or substantially all of the assets of any bank, or ownership or control of any voting shares of any bank, if after such acquisition it would own or control, directly or indirectly, more than 5 percent of the voting shares of such bank. In approving bank acquisitions by bank holding companies, the Federal Reserve Board is required to consider the financial and managerial resources and future prospects of the bank holding company and banks concerned, the convenience and needs of the communities to be served, and the effect on competition. The Attorney General of the United States may, within 30 days after approval of an acquisition by the Federal Reserve Board, bring an action challenging such acquisition under the federal antitrust laws, in which case the effectiveness of such approval is stayed pending a final ruling by the courts. Under certain circumstances, the 30-day period may be shortened to 15 days.
Interstate Acquisitions
Under the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, beginning September 29, 1995, bank holding companies may acquire banks in any state subject to limited restrictions including bank age and deposit concentration limits,
notwithstanding contrary state law. All banks owned in common by a bank holding company may act as agents for one another. An agent bank may receive deposits, renew time deposits, accept payments, and close and service loans for its principal bank and not be considered to be a branch of the principal banks.
Banks also may merge with banks in another state and operate either office as a branch, preexisting contrary state law notwithstanding. This law became effective automatically in all states on June 1, 1997, unless a state, by legislation enacted before June 1, 1997, opted out of coverage by the interstate branching provision. Upon consummation of an interstate merger, the resulting bank may acquire or establish branches on the same basis that any participant in the merger could have if the merger had not taken place.
Banks may also merge with branches of banks in other states without merging with the banks themselves, or may establish de novo branches in other states if the laws of the other states expressly permit such mergers or such interstate de novo branching.
Banking Regulation
The Bank is a national bank, which is subject to regulation and supervision primarily by the Office of the Comptroller of the Currency (the “OCC”) and secondarily by the Federal Reserve Board and the Federal Deposit Insurance Corporation (the “FDIC”). The Bank is subject to the requirements and restrictions under federal law, including requirements to maintain reserves against deposits, restrictions on the types and amounts of loans that may be granted and the interest that may be charged thereon, and limitations on the types of investments that may be made and the types of services that may be offered. Various consumer laws and regulations also affect the operations of the Bank.
Restrictions on Transactions with Affiliates
Section 23A of the Federal Reserve Act imposes quantitative and qualitative limits on transactions between a bank and any affiliate, and requires certain levels of collateral for such loans. It also limits the amount of advances to third parties which are collateralized by the securities or obligations of Suffolk or its subsidiaries.
Section 23B requires that certain transactions between the Bank and its affiliates must be on terms substantially the same, or at least as favorable, as those prevailing at the time for comparable transactions with or involving other nonaffiliated companies. In the absence of such comparable transactions, any transaction between the Bank and its affiliates must be on terms and under circumstances, including credit standards, that in good faith would be offered to or would apply to nonaffiliated companies.
Examinations
The OCC regularly examines the Bank and records of the Bank. The FDIC may also periodically examine and evaluate insured banks. In addition, the Federal Reserve Board regularly examines the Bank and records of Suffolk.
Standards for Safety and Soundness
As part of the FDICIA’s efforts to promote the safety and soundness of depository institutions and their holding companies, appropriate federal banking regulators are required to have in place regulations specifying operational and management standards (addressing internal controls, loan documentation, credit underwriting, and interest rate risk), asset quality, and earnings. In addition, the Federal Reserve Board, the OCC, and FDIC have extensive authority to police unsafe or unsound practices and violations of applicable laws and regulations by depository institutions and their holding companies. For example, the FDIC may terminate the deposit insurance of any institution that it determines has engaged in an unsafe or unsound practice. The agencies can also assess civil money penalties of up to $1 million per day, issue cease-and-desist or removal orders, seek injunctions, and publicly disclose such actions.
Gramm-Leach-Bliley Act
The Gramm-Leach-Bliley Act, effective on March 11, 2000, permits bank holding companies to become FHCs and, by doing so, affiliate with securities firms and insurance companies and engage in other activities that are financial in nature or complementary thereto. A bank holding company may become an FHC, if each of its subsidiary banks is “well capitalized” under the FDI-CIA prompt corrective action provisions, is “well managed,” and has at least a “satisfactory” rating under the Community Reinvestment Act as of 1977 as amended (the “CRA”), by filing a declaration that the bank holding company wishes to become an FHC and meets all applicable requirements.
No prior regulatory approval is required for an FHC to acquire a company, other than a bank or savings association, engaged in activities permitted under the Gramm-Leach-Bliley Act. Activities specified in the Gramm-Leach-Bliley Act as being “financial in nature” include securities underwriting and dealing, and insurance underwriting and agency activities. Activities that the Federal Reserve Board has determined to be closely related to banking are also deemed to be financial in nature.
A national bank also may engage, subject to limitations on investment, in activities that are financial in nature, other than insurance underwriting, merchant banking, real estate development, and real estate investment, through a financial subsidiary of the bank, if the bank is “well capitalized,” “well managed,” and has at least a “satisfactory” CRA rating. Subsidiary banks of an FHC or national bank with financial subsidiaries must continue to be well capitalized and well managed in order to continue to engage in such activities without regulatory actions or restrictions, which could include divestiture of the financial subsidiary or subsidiaries. In addition, an FHC or a bank may not acquire a company that is engaged in such activities unless each of the subsidiary banks of the FHC or the bank has at least a “satisfactory” rating. At December 31, 2007, the Bank was rated as “outstanding.”
In July of 2001, provisions of the Gramm-Leach-Bliley Act became effective that impose additional requirements on financial institutions with respect to customer privacy. These provisions generally prohibit disclosure of customer information to
nonaffiliated third parties unless the customer has been given the opportunity to object, and has not objected, to such disclosure. Financial institutions are also required to disclose their privacy policies to customers annually and may be required to comply with provisions of applicable state law if such provisions are more protective of customer privacy than those contained in the Gramm-Leach-Bliley Act.
Governmental Monetary Policies and Economic Conditions
The principal sources of funds essential to the business of banks and bank holding companies are deposits, stockholders’ equity, and borrowed funds. The availability of these various sources of funds and other potential sources, such as preferred stock or commercial paper, and the extent to which they are utilized, depends on many factors, the most important of which are the Federal Reserve Board’s monetary policies and the relative costs of different types of funds. An important function of the Federal Reserve Board is to regulate the national supply of bank credit in order to combat recession and curb inflationary pressure. Among the instruments of monetary policy used by the Federal Reserve Board to implement these objectives are open market operations in United States government securities, changes in the discount rate on bank borrowings, and changes in reserve requirements against bank deposits. The monetary policies of the Federal Reserve Board have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future. In view of the recent changes in regulations affecting commercial banks and other actions and proposed actions by the federal government and its monetary and fiscal authorities, including proposed changes in the structure of banking in the United States, no prediction can be made as to future changes in interest rates, availability of credit, deposit balances, or the overall performance of banks generally or of Suffolk and its subsidiaries in particular.
ITEM 1A.
ITEM 1A. Risk Factors
Net income at Suffolk is primarily reliant on its ability to generate net interest income, and to a lesser extent, fee income. Accordingly, factors affecting Suffolk Bancorp include particularly, but are not limited to: credit risk, the ability of borrowers to repay debt; interest rate risk, changes in interest rates that may cause the net interest margin between earning assets and interest-bearing liabilities to contract; market risk, changes in the market value of securities owing 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 operations. Each of these factors may change in ways that management does not now foresee. 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.
Additional information about the nature of these risks and how they are managed can be found in the following locations in this report:
Credit Risk: under the captions “Non-Performing Loans” and “Summary of Loan Losses and Allowance for Loan Losses” on page 12 of this report.
Interest Rate Risk: under the captions “Interest Rate Sensitivity” and “Asset/Liability Management and Liquidity” on pages 15 and 17 of this report, respectively.
Market Risk: under the caption “Market Risk” on page 15 of this report.
Management believes that it is imprudent to make or rely on assertions made before the fact concerning the probability that any specific risk will be realized, and that any such assertions would be speculative. Instead, credit, asset/liability management, investment, compliance, and other operating policies are written to account for a range of possible outcomes, and prevent or ameliorate those outcomes falling at the margins of possible occurrence.
STATISTICAL DISCLOSURE
ITEM 2.
ITEM 2. Properties
Registrant
Suffolk as such has no physical properties. Office facilities of Suffolk are located at 4 West Second Street, Riverhead, New York.
Bank
The Bank’s main office campus, with three buildings, is located at 6 West Second Street, Riverhead, New York, title to which is held by the Town of Riverhead, New York Industrial Development Agency for reasons of tax abatement, but to which the Bank has all other rights of ownership. The Bank also owns a total of 12 properties with 12 buildings in fee, and holds 16 buildings under lease agreements. The bank also holds two buildings under lease agreements that will commence upon occupancy of the buildings in 2008. Management believes that the physical facilities are suitable and adequate and at present are being fully utilized. Suffolk, however, evaluates future needs continuously and anticipates other changes in its facilities during the next several years.
ITEM 3.
ITEM 3. Legal Proceedings
There are no material legal proceedings, individually or in the aggregate, to which Suffolk or its subsidiaries are a party or of which any of the property is subject.
ITEM 4.
ITEM 4. Submission of Matters to a Vote of Security Holders
None.
PART II
ITEM 5.
ITEM 5. Market for Registrant’s Common Equity and Related Stockholder Matters
Pages 6 and 22 of this Annual Report to Shareholders for the fiscal year ended December 31, 2007.
Comparison of Cumulative Total Return of Suffolk Bancorp, Industry Index, and Broad Market (in $)
ASSUMES $100 INVESTED ON JANUARY 1, 2003 - ASSUMES DIVIDEND REINVESTED - FISCAL YEAR ENDING DECEMBER 31, 2007
At January 31, 2008, there were approximately 1,510 equity holders of record and approximately 2,613 beneficial shareholders of the Company’s common stock. Information concerning dividends and the price range of the common stock can be found on page 6 of this Annual Report to Shareholders
ITEM 6.
ITEM 6. Selected Quarterly Financial Data
Page 38 of this Annual Report to Shareholders for the fiscal year ended December 31, 2007.
ITEM 7.
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Pages 7-20 of this Annual Report to Shareholders for the fiscal year ended December 31, 2007.
ITEM 7a.
ITEM 7a. Quantitative and Qualitative Disclosure about Market Risk of this Annual Report to Shareholders for the fiscal year ended December 31, 2007.
ITEM 8.
ITEM 8. Financial Statements and Supplementary Data
Pages 21-38 of this Annual Report to Shareholders for the fiscal year ended December 31, 2007.
ITEM 9.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
ITEM 9a.
ITEM 9a. 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 significant deficiencies and material weaknesses. Management’s Report on Internal Control over Financial Reporting is incorporated herein and can be found on page 20. The effectiveness of Suffolk’s internal control over financial reporting as of December 31, 2007, has been audited by Grant Thornton LLP whose report can be found on page 39.
PART III
ITEM 10.
ITEM 10. Directors and Executive Officers of the Registrant
Pages 2 - 8 of Registrant’s Proxy Statement for its Annual Meeting of Shareholders to be held on April 8, 2008 is incorporated herein by reference.
ITEM 11.
ITEM 11. Executive Compensation
Pages 8-18 of Registrant’s Proxy Statement for its Annual Meeting of Shareholders to be held on April 8, 2008 is incorporated herein by reference.
ITEM 12.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
Pages 2, 12, 13, and 14 of Registrant’s Proxy Statement for its Annual Meeting of Shareholders to be held on April 8, 2008 is incorporated herein by reference.
ITEM 13.
ITEM 13. Certain Relationships and Related Transactions
Page 4 of Registrant’s Proxy Statement for its Annual Meeting of Shareholders to be held on April 8, 2008 is incorporated herein by reference.
ITEM 14.
ITEM 14. Principal Accountant Fees and Services
The following table presents the fees billed for each of the last two fiscal years by Suffolk’s principal accountant by category:
The Audit Committee pre-approves all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for Suffolk by its independent auditor, subject to the de minimus exceptions for non-audit services described in Section 10A (i) (1) (B) of the Exchange Act which are approved by the Committee prior to the completion of the audit. The Audit Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Audit Committee at its next scheduled meeting. Fees for consultation concerning the computation and filing of income taxes amounting to $43,000 for 2007 were paid to the firm of Marcum & Kliegman, LLP.
PART IV
ITEM 15.
ITEM 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
The following consolidated financial statements of the Registrant and Subsidiaries, and the accountant’s report thereon, are included on pages 21 through 38 inclusive.
Financial Statements (Consolidated)
Statements of Condition - December 31, 2007 and 2006.
Statements of Income - For the years ended December 31, 2007, 2006, and 2005.
Statements of Changes in Stockholders’ Equity - For the years ended December 31, 2007, 2006, and 2005.
Statements of Cash Flows - For the years ended December 31, 2007, 2006, and 2005.
Notes to Consolidated Financial Statements
EXHIBITS
The following exhibits, which supplement this report, have been filed with the Securities and Exchange Commission. Suffolk Bancorp will furnish a copy of any or all of the following exhibits to any persons sending a request in writing to the Corporate Secretary, Suffolk Bancorp, 4 West Second Street, P.O. Box 9000, Riverhead, New York 11901.
A. Certificate of Incorporation of Suffolk Bancorp (filed by incorporation by reference to Suffolk Bancorp’s Form 10-K for the fiscal year ended December 31, 1999, filed March 10, 2000)
B. Bylaws of Suffolk Bancorp (filed by incorporation by reference to Suffolk Bancorp’s Form 10-K for the fiscal year ended December 31, 1999, filed March 10, 2000)
C. Suffolk Bancorp 1999 Stock Option Plan (filed by incorporation by reference to Suffolk Bancorp’s Form 10-K for the fiscal year ended December 31, 1999, filed March 10, 2000)
D. Suffolk Bancorp Form of Change-of-Control Employment Contract (filed by incorporation by reference to Suffolk Bancorp’s Form 10-K for the fiscal year ended December 31, 1999, filed March 10, 2000)
Reports on Form 8-K
The following reports were filed on Form 8-K during the three-month period ended December 31, 2007:
October 15, 2007, Item 2.02 Results of Operations and Financial Condition. Attached as an exhibit is the Company’s press release titled “Suffolk Bancorp Announces Earnings For The Third Quarter Of 2007” dated October 15, 2007.
November 27, 2007, Item 8.01 Other Events and Required FD Disclosure. Attached as an exhibit is the Company’s press release titled “Suffolk Bancorp Announces Regular Quarterly Dividend” dated November 27, 2007.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
March 7, 2008
(Registrant)
Exhibit 31.1
CERTIFICATION OF PERIODIC REPORT
I, Thomas S. Kohlmann, certify that:
1. I have reviewed this annual report on Form 10-K of Suffolk Bancorp;
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: March 7, 2008
/s/ THOMAS S. KOHLMANN
Thomas S. Kohlmann
President & Chief Executive Officer
Exhibit 31.2
CERTIFICATION OF PERIODIC REPORT
I, J. Gordon Huszagh, certify that:
1. I have reviewed this annual report on Form 10-K of Suffolk Bancorp;
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: March 7, 2008
/s/ J. GORDON HUSZAGH
J. Gordon Huszagh
Executive Vice President & Chief Financial Officer
CERTIFICATION OF PERIODIC REPORT
I, Thomas S. Kohlmann, President & Chief Executive Officer of Suffolk Bancorp (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that: (1) the Annual Report on Form 10-K of the Company for the year ended December 31, 2007 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and (2) the information contained in the Report fairly represents, in all material respects, the financial condition and results of operations of the Company.
Dated: March 7, 2008
/s/ Thomas S. Kohlmann
Thomas S. Kohlmann
President & Chief Executive Officer
CERTIFICATION OF PERIODIC REPORT
I, J. Gordon Huszagh, Executive Vice President & Chief Financial Officer of Suffolk Bancorp (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that: (1) the Annual Report on Form 10-K of the Company for the year ended December 31, 2007 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and (2) the information contained in the Report fairly represents, in all material respects, the financial condition and results of operations of the Company.
Dated: March 7, 2008
/s/ J. Gordon Huszagh
J. Gordon Huszagh
Executive Vice President & Chief Financial Officer
DIRECTORS
James E. Danowski
Partner; Coughlin, Foundotos, Cullen & Danowski
(accounting firm)
Joseph A. Deerkoski
Consultant
(general insurance)
Joseph A. Gaviola
Principal; Gaviola’s Montauk Market
Chris-Nic Properties
(retail, commercial and residential real estate)
Edgar F. Goodale
President; Riverhead Building Supply Corp.
(building supply distributor)
David A. Kandell
Managing Partner; Kandell, Farnworth, & Pubins, C.P.A.’s
(accounting firm)
Thomas S. Kohlmann
Chairman, President & Chief Executive Officer
Terence X. Meyer
Managing Partner; Meyer, Meyer & Keneally, Esqs. L.L.P.
(attorneys)
Susan V. B. O’Shea
Managing Partner; O’Shea Properties
(commercial real estate)
John D. Stark, Jr.
Vice President; Foxwood Corporation
(manufactured housing)
OFFICERS
Thomas S. Kohlmann
Chairman, President & Chief Executive Officer
J. Gordon Huszagh
Executive Vice President & Chief Financial Officer
Robert C. Dick
Executive Vice President
Frank D. Filipo
Executive Vice President
Augustus C. Weaver
Executive Vice President
Douglas Ian Shaw
Senior Vice President & Corporate Secretary
DIRECTORS
Thomas S. Kohlmann
Chairman of the Board
James E. Danowski
Joseph A. Deerkoski
Joseph A. Gaviola
Edgar F. Goodale
David A. Kandell
Terence X. Meyer
Susan V. B. O’Shea
John. D. Stark, Jr.
EXECUTIVE OFFICERS
Thomas S. Kohlmann
Chairman, President &
Chief Executive Officer
J. Gordon Huszagh
Executive Vice President &
Chief Financial Officer
Robert C. Dick
Executive Vice President &
Chief Lending Officer
Frank D. Filipo
Executive Vice President
Retail Banking
Augustus C. Weaver
Executive Vice President &
Chief Information Officer
LOANS
Bruce W. Bradley
Senior Vice President
David T. DeVito
Senior Vice President
Joan Brigante
Vice President
Robert T. Ellerkamp
Vice President
Robert P. Grady
Vice President
Wendy Harris
Vice President
Paul D. Hawkins, Jr.
Vice President
Benjamin Mancuso
Vice President
Gerard H. McGuirk
Vice President
William Mitarotondo
Vice President
Deborah Simonetti
Vice President
Thomas J. Sullivan
Vice President
Frederick J. Weinfurt
Vice President
RETAIL BANKING
Stanley V. Gelish
Senior Vice President
Anita J. Nigrel
Senior Vice President
David E. Lebens
Vice President
Susan M. Martinelli
Vice President
Bohemia Office
Steve E. Horner
Vice President
Center Moriches Office
Julia Pratt
Assistant Vice President
Cutchogue Office
Kim Sweeney
Assistant Vice President
Deer Park Office
Steven DeLuca
Vice President
East Hampton Pantigo Office
Sarah M. Almeraz
Assistant Vice President
East Hampton Village Office
Jill James
Vice President
Hampton Bays Office
David C. Barczak
Vice President
Hauppauge Office
Mark Harrigan
Assistant Vice President
Manorville Office
Tara Sperduto
Assistant Vice President
Mattituck Office
Janet V. Stewart
Vice President
Middle Island Office
Geralyn Harper
Assistant Vice President
Medford Office
Paul E. Vaas
Vice President
Miller Place Office
Cynthia Berner
Assistant Vice President
Montauk Harbor Office
Montauk Village Office
John J. McDonald
Vice President
Port Jefferson Harbor Office
Port Jefferson Village Office
Jacqueline Brown
Vice President
Port Jefferson Station Office
Michael E. Newins
Assistant Vice President
Riverhead, Ostrander
Avenue Office
Angela R. Reese
Assistant Vice President
Riverhead, Second Street Office
Vincent Cangiano
Vice President
Sag Harbor Office
Susan Tooker
Assistant Vice President
Sayville Office
Pamela S. Werner
Assistant Vice President
Shoreham Office
Wendy A. Stapon
Assistant Vice President
Smithtown Office
Susan L. Hughes
Assistant Vice President
Southampton Office
Patricia Bolomey
Vice President
Wading River Office
John A. Maki
Assistant Vice President
Water Mill Office
Rebecca Collins
Assistant Vice President
West Babylon Office
Joanne Goodman
Assistant Vice President
Westhampton Beach Office
Jayne D. Ebert
Vice President
TRUST & ASSET
MANAGEMENT GROUP
Dan A. Cicale
Senior Vice President
& Trust Officer
Trust & Estate Services
Linda Schwartz
Vice President & Trust Officer
Warren Palzer
Vice President
Lori E. Thompson
Vice President
SCNB Financial Services, Inc.
William C. Araneo
Vice President
AUDIT
Maria R. Michaelson
Senior Vice President
Tricia Thomas-Hector
Vice President
COLLECTIONS
Christopher R. Martinelli
Assistant Vice President
COMPTROLLER
Stacey L. Moran
Vice President
& Comptroller
CORPORATE SERVICES
Douglas Ian Shaw
Senior Vice President &
Corporate Secretary
FACILITIES
Charles E. Anderson
Manager
HUMAN RESOURCES
Nancy Jacob
Vice President
INFORMATION
SECURITY
Joanne Appel
Assistant Vice President
& Information Security Officer
INFORMATION
TECHNOLOGY
Mark J. Drozd
Senior Vice President
Fred A. Bohonan
Vice President
MARKETING
Brenda B. Sujecki
Vice President
OPERATIONS
Dennis F. Orski
Senior Vice President
Deanna L. Miller
Vice President
RISK MANAGEMENT &
COMPLIANCE
Jeanne P. Kelley
Senior Vice President
Linda Follett
Vice President
SECURITY
Alexander B. Doroski
Senior Vice President
Directory of Offices and Departments