Suffolk Bancorp, the Riverhead company that owns Suffolk County National Bank, reported reduced earnings Thursday for the first half of the year, mostly a result of reserving more money to cover potential bad loans.
The company reported earnings of $6.3 million for the first half of the year, down more than 44 percent from the $11.4 million earned in the first half of 2009. Earnings per share are down a similar amount, from $1.18 to 59 cents. The dividend remains unchanged at 44 cents per share for the half year.
In a statement, company president and chief executive J. Gordon Huszagh, above left, said the bank continues to perform well. It strengthened its capital position slightly and outperformed most banks of its class.
But he said the uncertain economy prompted the bank to set aside another $3 million for potential loan losses, bringing the total reserve to $20.9 million, almost double what it was a year ago. In addition, the bank wrote off $3.2 million in bad loans in the second quarter, compared to $167,000 last year.
"The prolonged slump in the economy has strained the resources of some of our borrowers," Huszagh said in the statement. "We are a community bank that relies upon net interest income generated by the relationships it builds with the owners of small and medium-sized businesses, in contrast to certain large banks that profit from the proprietary trading of securities and derivatives. Therefore, our prospects are tied more to Main Street than to Wall Street."
Although the bank's market on the East End was hurt less than most areas by the continuing recession, it's still had an effect, Huszagh said.
Read more of Inside Long Island Business