Suffolk Bancorp notes third-quarter profit

Struggling Suffolk Bancorp of Riverhead said Monday it was profitable in the third quarter, even as the bank faces potential delisting of its stock and at least seven shareholder lawsuits charging it misrepresented its financial condition last year.

The corporate parent of Suffolk County National Bank, which is traded on the Nasdaq exchange, said it earned $3,072,000, or 32 cents a share, in the quarter ended Sept. 30. But it was unable to say how that result compared to the same period a year earlier. The bank is in the process of restating financial figures for last year's third quarter, as well as last year's fourth quarter and the first and second quarters of this year. The bank has 30 branches, all in Suffolk.

It has a Nasdaq deadline of next Monday to file those reports or face delisting. "We are still hopeful that we'll be able to make the deadline but we're making no promises," Douglas Ian Shaw, the company's corporate secretary said in an interview.

A delisted stock can continue to trade electronically on an alternative quotation service, but shares traded on such services are considered risky because there is very little regulation of them.

The bank said its net interest margin was 4.72 percent in this year's third quarter. The difference between the interest a bank earns on its loans, securities and investments, and the interest it pays out to depositors, is a key measurement of a bank's health.

The seven shareholder suits, whose plaintiffs attorneys announced them in news releases since Oct. 20, were filed in federal court for the Eastern District of New York, which includes Long Island. The suits allege the company violated securities laws because its financial results were "artificially inflated due to material understatement of . . . loan loss reverses," it failed to "recognize its impaired assets"; that internal controls were "materially deficient"; and that, therefore, the bank's officials "lacked a reasonable basis for their positive statements about the company, its prospects and growth." Shaw declined to comment on the suits, citing company policy.

The shares closed Monday at $8.51, up 14 cents, and are down more than 65 percent for the year to date.