Suffolk Bancorp said Thursday it was able to make a profit in the third quarter mostly because it didn't have to add money to its fund for loan losses.
The Riverhead-based parent of the 28-branch Suffolk County National Bank also cited higher noninterest income and lower operating expenses in reporting net income of $3.9 million, or 34 cents a share, in the three months ended Sept. 30.
A year earlier it reported a net loss of $9.2 million, or 94 cents a share, which it blamed on the addition of $12 million to its fund for loan losses, known in banking as an "allowance" for loan losses.
The allowance stood at $17.6 million as of Sept. 30, the bank reported.
In this year's quarter, Suffolk said it added no money to the fund, while noninterest income rose by 250 percent to $6.6 million and operating expenses fell 12 percent to $15 million.
Partially offsetting these factors was a 13 percent reduction, to $13.9 million, in net interest income in this year's third quarter.
The company's 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, narrowed 27 basis points to 3.82 percent.
President and chief executive Howard C. Bluver said in a statement, "We remain well ahead of our internal projections for the overall business as we approach the end of 2013."
Total assets at the end of the quarter were $1.7 billion, up 10 percent from a year earlier.
The bank closed two branches Oct. 4, in Middle Island and in Water Mill.
Loans outstanding at Sept. 30 increased by 30.4 percent to $999 million from a year ago.
Shares of Suffolk Bancorp rose 3 cents to close at $19.59.