The Suffolk County National Bank in Riverhead. (May 12, 2011)

The Suffolk County National Bank in Riverhead. (May 12, 2011) Credit: Joseph D. Sullivan

The 30-branch Suffolk County National Bank, based in Riverhead, on Wednesday night disclosed that it has made a profit in its second quarter -- and added $2.7 million to its loan-loss allowance, bringing that reserve to nearly $50 million.

The bank said that its actual losses had not yet been disclosed, but said that, in general, banks set their loan-loss allowance in excess of the actual total of loan write-offs. The actual write-offs won't be disclosed until later this month, the bank said.

The bank had previously set the loan-loss allowance at about $46.9 million in a March financial report, and added $2.7 million in its Wednesday filing. The $49.6-million loan loss allowance is equivalent to 4.68 percent of its commercial loan portfolio.

The bank's holding company, Suffolk Bancorp, also said it may have to restate its loan-loss reserves for previous quarters.

Suffolk Bancorp said it "believes that its banking subsidiary remained 'well-capitalized' " as of June 30, the end of its most recent reporting period. And the bank said it believes it "met the individual minimum capital ratios as determined previously in agreement with regulators."

In a statement of its expected profit for the quarter, the bank said, "Suffolk expects pretax earnings for the quarter ended June 30, 2011, of about $4.6 million on $1.554 billion of average earning assets."

The bank also said it learned that its credit risk and loan-loss practices may have been marred by "deficiencies and/or weaknesses in the company's internal controls."

The bank, which was first organized in 1890, said it will delay filing its quarterly report for the three-month period ended June 30. Separately, the bank is working to avoid being delisted from the Nasdaq stock exchange.

The bank determined the level of its loan-loss allowance at $49.6 million "on the basis of a detailed review of about 65 percent of the commercial and industrial, and commercial real estate loan portfolios," Suffolk Bancorp said.

"This review was conducted during a six-week period prior to quarter-end, and considered current appraisals made during the previous 12 months for all commercial real estate loans in excess of $1 million."

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