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Suffolk Bancorp Announces 15.0 Percent Increase in Earnings Per Share.

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Business Editors

RIVERHEAD, N.Y.--(BUSINESS WIRE)--Jan. 17, 2003

Suffolk Bancorp (NASDAQ:SUBK) today released the results of its operations during the fourth quarter of 2002.

Net income for the quarter was $5,337,000, up 13.7 percent from $4,693,000 posted during the same period last year. Net income for the year to date was $21,269,000, up 13.8 percent from $18,685,000 posted during the same period last year. Earnings per share for the quarter were $0.46 compared to $0.40, up 15.0 percent. Earnings per share for the year to date were $1.82 compared to $1.58, up 15.2 percent. A detailed financial summary follows the text of this release.

President and CEO Thomas S. Kohlmann remarked, "By any measure, 2002 was a good year for Suffolk Bancorp. Return on average equity was 20.41 percent for the fourth quarter compared to 19.58 percent last year. Return on average assets was 1.67 percent, versus 1.65 percent a year ago. The net interest margin continued to narrow slightly, to 5.40 percent from 5.45 percent, although net interest income increased by 11.8 percent. Average assets grew by 12.6 percent. Our efficiency ratio was 50.75 percent compared to 51.24 percent for the same quarter last year. Each of these is better than recent industry averages."

He continued, "We believe there will be some pressure, however, on our net interest margin during the year to come. Interest rates are at historic lows, and even given our modest cost of funds, they limit our ability to price loans to maintain our historic margins. The rise of "zero-zero" financing programs among the captive finance divisions of major automobile manufacturers have reduced volume significantly. Moreover, chargeoffs in this portion of the portfolio have increased as the economy has stagnated. Because of these factors, even with growth in the commercial sector, growth in the...