Magazine article American Banker

Suffolk Sells Bad Loans, Raises $25 Million

Magazine article American Banker

Suffolk Sells Bad Loans, Raises $25 Million

Article excerpt

Byline: Paul Davis

Suffolk Bancorp (SUBK) is looking to growth after raising capital and purging a large block of troubled loans.

The Riverhead, N.Y., company said Thursday morning that it had completed a $25 million private placement with unnamed institutional investors. It also announced that it had sold a portfolio of nonperforming and classified assets at a $12 million loss.

The moves should allow Suffolk to further distance itself from a turbulent 2011, when it took big hits on real estate loans and had to delay reporting some of its financial results. The company ended up revising or restating three quarters of results dating back to 2010. Suffolk hired Howard Bluver to become its chief executive in January, charging him with righting the ship.

"We no longer have to look backward," Bluver said in an interview. "You will now see a growth and diversification story. It will take a little bit of time because we want to do it very carefully."

Suffolk has largely focused its lending efforts on the east side of Suffolk County in New York with a historical focus on real estate lending. Bluver said the company will expand across the county and into Nassau County and will place a greater emphasis on commercial lending, particularly small business and middle-market loans. Multifamily lending and mortgages will also play a role in the company's growth story.

Acquisitions are not a priority for the $1.6 billion-asset company as it rebuilds, said Bluver, a former deputy chief counsel for the Office of Thrift Supervision who served as an outside consultant to Suffolk before succeeding J. …

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