By Kathryn G. Menu
Following aggressive moves in September to sell off non-performing loans coupled with a simultaneous call to raise capital through investors, the Suffolk County National Bank has largely rebounded from troubled financial outlooks in years past, and posted $2 million in earnings in the fourth quarter of 2012.
According to Frank Filipo, executive vice president and operating officer for Suffolk Bancorp, the parent company of Suffolk County National Bank, the success of the fourth quarter of 2012 is only the beginning. Moving forward with a clean portfolio, and more importantly, a devoted customer base, 2013 is already looking up.
“The primary problems the bank faced through 2011 and really until 2012 was related to problems in our loan portfolio – business loans and commercial real estate for the most part,” said Filipo in a recent interview.
According to a press release issued late last month, announcing the successful 2012 fourth quarter, during 2012, Suffolk Bancorp – a $1.6 billion company – sold $85 million in non-performing and other criticized and classified loans as part of management’s strategy to reduce overall balance sheet risk.
The company also embarked in a capital raise through investors, aimed at giving Suffolk Bancorp a stronger financial position to reposition what was a struggling balance sheet before the non-performing loans were sold.
Largely credited with the turnaround is Howard C. Bluver, president of Suffolk Bancorp who was named the company’s chief executive officer in 2012.
“I am very pleased with our results in the fourth quarter and believe we enter 2013 in a position of strength and with real momentum,” said Bluver. “As I indicated when I was appointed CEO one year ago, 2012 would be dedicated to cleaning up the legacy credit issues, transforming our balance sheet and putting in place the people and processes needed to turn around the company for future growth. I believe we have executed on each of these priorities in 2012, and did so ahead of schedule.”
According to the company’s financial statements, the company earned $2 million in the fourth quarter of 2012, compared to $1.2 million in 2011. Total loans were up two percent for the fourth quarter compared to the third quarter and non-performing loans now make up less than two-percent of the company’s total loans, compared to more than eight percent last year.
However, for the year-end, the company did record a net loss of $1.7 million, compared to $780,000 in 2011. Those losses, according to a press release issued by the company in late January, are largely tied to significant non-recurring charges associated with the bulk sale of loans that ultimately the company believes has enabled it to get back on track,
“Looking forward into 2013, we are cautiously optimistic,” said Bluver. “Our management team has worked hard throughout 2012 to put the company in a position to focus on future growth and we have started to see the results of that work.”
According to Filipo, the company was able to retain the support of the community in good times and bad, and credited the work of those throughout the Suffolk County National Bank branches for keeping that connection to the community alive.
“Quite frankly, that was one of the most gratifying parts of all of this,” he said. “We received a lot of bad publicity, and a lot of it was reported on a regular basis, but throughout that we had a wonderful retention rate with our customers, deposit levels remained strong and our customers stuck with us through thick and thin.”
For 2013, Filipo said now that the company has retooled its entire lending operation, brought in a lot of new faces, as well as a new loan office in Melville, that it is focused on rebuilding a strong, healthy and diverse loan portfolio.
“We have the tools to do it,” he said. “We have strong capital levels and good people behind this company. For us, it’s now about getting back to business.”