After a year in which Smithtown Bancorp's stock lost more than 70 percent of its value and the past two quarters in which the bank lost millions of dollars, shareholders used to strong performance looked for hope where they could find it at Thursday's annual meeting.
Until 2009, when bad commercial real estate loans caught up with the company - which owns the Bank of Smithtown - Smithtown Bancorp had grown steadily in recent years. Now the bank, which has more than two dozen branches on Long Island, is under orders by state and federal regulators to limit lending and other growth until it raises more capital and regains profitability.
"I understand the bank is in a situation," said shareholder James McDonald of Smithtown after the meeting at the Hauppauge Sheraton, next to the bank's headquarters on Motor Parkway. "Right now the commercial real estate is suffering. That's the business of a bank."
He said he was confident the company could recover, given its history, and he said he planned to buy more stock.
Shareholder June Carlson, also of Smithtown, was less sure. "Well, I think the bank is in a lot of trouble," she said. "It will take a while before it turns around."
She said she had been buying stock as the price dropped, convinced she'd profit when things improved. Now she said she's not sure that will happen soon and isn't going to buy any more.
Smithtown's stock dropped 39 cents Thursday, to $3.59 a share.
Bank officials barred reporters from the shareholders' meeting, but afterward company chairman and chief executive Brad Rock Sr. said it was impossible to answer a question shareholders logically had, which is when they might see a dividend again. The last one was issued in the third quarter of 2009.
Rock noted the dividend is also covered by the consent degree with regulators. The company can't issue one without their permission, he said.
"I don't know for sure" when that will be, Rock said. "I don't have a crystal ball."
It could be six to nine months before the bank is in the black again, he said, but the turbulent economy made it hard to be sure.
The Bank of Smithtown wasn't affected by the subprime residential mortgage crisis when it hit in 2008, he noted, but when office buildings became vacant and stores closed, its fortunes changed. "That's where things are hurting now," he said.