Suffolk Bancorp trying to avert delisting

The parent of Suffolk County National Bank has taken steps to forestall its shares being delisted by the Nasdaq stock market, according to a regulatory filing.

Suffolk Bancorp, based in Riverhead, told the U.S. Securities and Exchange Commission last week that it had submitted a plan to Nasdaq for filing a first-quarter earnings report with the SEC. Bank officials, in documents, said they hoped to submit the report by Aug. 1 "or earlier if possible."

Timely filings with the SEC of quarterly earnings are one of several requirements for having shares traded on Wall Street.

When Suffolk Bancorp failed to comply, Nasdaq on May 18 raised the specter of delisting. It also set a 60-day deadline for submission of the earnings report for the three-month period ended March 31 or a plan to do so.

The bank met the deadline for a compliance plan last week. The move sent its stock up 72 cents to $13.15 a share on July 19. Shares ended last week at $13.22 but were down 42 cents to $12.80 in trading Monday.

Suffolk Bancorp officials did not returned multiple telephone calls seeking comment.

Nasdaq spokesman Wayne Lee said Monday the stock market does not comment on members' cases. However, he noted Suffolk Bancorp could have up to 180 days "to regain compliance," if Nasdaq staff approve the compliance plan.

In early May the bank announced a delay in filing first-quarter earnings "because of possible deficiencies and/or weaknesses in . . . internal controls with respect to credit administration and credit-risk management."

The bank also said it had hired consultants to review loan files and warned that past earnings reports might have to revised.

Though federal regulators have yet to receive the earnings report, Suffolk Bancorp issued a news release about its first-quarter performance on April 12. The 30-branch bank reported a $12.9-million loss for the January-to-March period, compared with a profit of $1.5 million a year earlier.

Chief executive J. Gordon Huszagh blamed the red ink on having to set aside $29.7 million for possible loan defaults, compared with $8.8 million in early 2010. In the wake of the 2008 financial meltdown, federal regulators now require banks to maintain larger reserves to cover potential loan defaults.

Suffolk Bancorp reached agreement last fall with the federal Office of the Comptroller of the Currency to review executives' qualifications, to establish a three-year strategic plan and capital program, and to create programs for internal auditing, loan-loss allowances, real estate appraisal, managing credit risk and information technology, among others. One compliance move involved the hiring of Karen A. Hamilton to be chief lending officer from Astoria Federal Savings Bank.

Last month Huszagh assumed the duties temporarily of chief financial officer after the resignation of Stacey L. Moran.

Suffolk Bancorp had assets of about $1.6 billion on March 31, down 5.3 percent from a year ago.