Suffolk Bancorp said a larger loan portfolio, higher net interest margin and stronger noninterest income drove net income up 36.2 percent in the second quarter over a year earlier.
The Riverhead-based parent of the 26-branch Suffolk County National Bank said in an announcement Tuesday the improvement came despite an increase in operating expenses due to an expense credit taken in the year-earlier quarter, combined with an increase in the provision for loan losses.
Net income for the three months ended June 30 was $3.8 million or 32 cents a share, up from $2.8 million or 24 cents a year earlier.
The company said total loans outstanding rose by 33.5 percent year over year, to $1.2 billion as of June 30. It said net interest margin, a measure of the difference between the interest a bank earns on its assets such as loans and the interest it pays out to depositors, rose from 3.83 percent in the second quarter of last year to 4.13 percent in the period this year.
Noninterest income was $2.7 million, up 9 percent year over year.
In a statement, president and chief executive Howard C. Bluver said, "The expansion strategies we have consistently articulated for both our lending and deposit businesses are working as envisioned."
The expense credit resulted from the termination of a post-retirement life insurance plan in the period last year. Excluding that, total operating expenses would have declined by 8.4 percent in the quarter from a year earlier.
The $250,000 provision for loan losses in this year's quarter compared to zero provision a year earlier and was due to the growth in the loan portfolio. Suffolk's stock closed up 22 cents at $21.