Suffolk Bancorp Announces Earnings for the Fourth Quarter and the Full Year of 2007

RIVERHEAD, N.Y.--(Business Wire)--Suffolk Bancorp (NASDAQ - SUBK) today released the results of its
operations during the fourth quarter and full year of 2007.
Earnings-per-share for the quarter were $0.58, an increase of 5.5
percent from $0.55 during the comparable period of 2006. Net income
for the quarter was $5,604,000, up 0.1 percent from the same quarter
last year. Earnings-per-share for the year to date were $2.24, an
increase of 1.8 percent from $2.20 during the comparable period of
2006. Net income for the year was $22,128,000, down 2.2 percent from
the same period last year. A detailed financial summary follows the
text of this release.

Chairman, President, and Chief Executive Officer, Thomas S.
Kohlmann, remarked, "It is gratifying to have encouraging news to
report for a period of time when financial markets were so
unpredictable. We were able to increase earnings per share over 2006
for both the fourth quarter and full year. Return on average equity
remained in excess of 21 percent for the quarter and the year. Our
average loan portfolio grew moderately from the same quarter last
year, by a bit more than six percent. As liquidity contracted both
domestically and globally as a result of recent losses in the
sub-prime mortgage markets, deposits were flat and there was migration
from non-maturity time deposits to higher yielding certificates of
deposit. Average borrowings increased, resulting in a substantial
increase in interest expense and small declines in net interest income
and margin for the quarter and the year. While the provision for
possible loan losses was increased during the fourth quarter to
reflect our historic methodology in computing the allowance, it was
down 61 percent for the year, and we were able to post net recoveries
for both the quarter and the year. Non interest income increased
modestly for the quarter, and was essentially flat for the year. We
kept a tight rein on non-interest expense, which was actually down by
2.3 percent for the quarter, and up 1.0 percent for the year while
average assets increased by 1.8 percent for the quarter and 0.3
percent for the year. Finally, we managed capital to the regulatory
standard of 'well-capitalized,' while also maximizing profitability
for our shareholders. The biggest challenges in the past quarter
remained in funding our operations, as major players in worldwide
markets have bid up the price of funds as they wrote down a
significant portion of their investments in mortgages and
mortgage-backed securities, as well as other exotic financial
instruments."

He continued, "If these remarks sound familiar to those I have
made in the past, they are and should be. Banking is an incremental
business, built on margins. Achievement in this industry is based on a
disciplined and careful approach to maintaining those margins. We
build our balance sheet one, carefully underwritten loan at a time;
one, thoughtfully considered security at a time; and one, correctly
priced deposit at a time. Key is the ability to adhere to consistent
and well-considered standards, in both boom times and in times like
these. The true value in our business lies in the relationships we
build with our customers over months and years. There are no sudden
pops or sizzle at a well-run bank, just a steady accumulation of value
based on the time value of money over the long-run. Success lies in
doing a great number of small things well while avoiding major
mistakes. As an example, once again, I would like to remind investors
that we avoided the temptation of the sub-prime market altogether,
both by maintaining our standards in the loans we make directly, and
by investing in collateralized mortgage obligations the quality and
structure of which we have evaluated as carefully as we underwrite our
loans. We want to preserve our place among the higher performing banks
in the nation."

Mr. Kohlmann finished saying, "2008 will be a difficult year as
financial markets and the economy in general sort themselves out. We
are ready, clearly and sharply focused on our shareholders',
customers', and employees' common interests, today, tomorrow, and in
the years to come."

Suffolk Bancorp is a one-bank holding company engaged in the
commercial banking business through Suffolk County National Bank, a
full service commercial bank headquartered in Riverhead, New York.
Organized in 1890, Suffolk County National Bank has 29 offices in
Suffolk County, New York.

Safe Harbor Statement Pursuant to the Private Securities
Litigation Reform Act of 1995

This press release may include statements which look to the
future. These can include remarks about Suffolk Bancorp, the banking
industry, and the economy in general. These remarks are based on
current plans and expectations. They are subject, however, to a
variety of uncertainties that could cause future results to vary
materially from Suffolk's historical performance, or from current
expectations. Factors affecting Suffolk Bancorp include particularly,
but are not limited to: changes in interest rates; increases or
decreases in retail and commercial economic activity in Suffolk's
market area; variations in the ability and propensity of consumers and
businesses to borrow, repay, or deposit money, or to use other banking
and financial services; and changes in government regulations.

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STATISTICAL SUMMARY
(unaudited, in thousands of dollars except for share and per share
data)

4th Qtr 2007 4th Q 2006 Change
------------- ------------- ----------
EARNINGS
Earnings-Per-Share - Basic $ 0.58 $ 0.55 5.5%
Cash Dividends-Per-Share 0.22 0.22 0.0%
Net Income 5,604 5,597 0.1%
Net Interest Income 15,850 16,466 (3.7%)
AVERAGE BALANCES
Average Assets $ 1,417,965 $ 1,393,475 1.8%
Average Net Loans 923,724 870,805 6.1%
Average Investment Securities 406,514 420,596 (3.3%)
Average Interest-Earning Assets 1,330,620 1,304,947 2.0%
Average Deposits 1,152,482 1,155,893 (0.3%)
Average Borrowings 143,734 113,574 26.6%
Average Interest-Bearing
Liabilities 864,518 828,416 4.4%
Average Equity 103,800 107,585 (3.5%)
RATIOS
Return on Average Equity 21.60% 20.81% 3.8%
Return on Average Assets 1.58% 1.61% (1.9%)
Average Equity/Assets 7.32% 7.72% (5.2%)
Net Interest Margin (FTE) 4.99% 5.23% (4.6%)
Efficiency Ratio 52.47% 52.24% 0.4%
Tier 1 Leverage Ratio Dec. 31 7.57% 8.02% (5.6%)
Tier 1 Risk-based Capital Ratio
Dec. 31 9.52% 10.56% (9.8%)
Total Risk-based Capital Ratio
Dec. 31 10.20% 11.28% (9.6%)
ASSET QUALITY during period:
Net Charge-offs (Recoveries) $ (11) $ (3) 266.7%
Net Charge-offs/Average Net
Loans (annual) (0.00%) (0.00%) 0.0%
at end of period:
Non-accrual & Restructured
Loans $ 1,648 $ 824 100.0%
Foreclosed Real Estate ("OREO") - - 0.0%
Total Non-performing Assets 1,648 824 100.0%
Allowance/Non-performing Assets 465.53% 916.38% (49.2%)
Allowance/Loans, Net of
Discount 0.80% 0.85% (5.9%)
Net Loans/Deposits 83.19% 77.60% 7.2%
EQUITY
Shares Outstanding 9,610,730 10,242,292 (6.2%)
Common Equity $ 108,981 $ 108,566 0.4%
Book Value Per Common Share 11.34 10.60 7.0%
Tangible Common Equity 108,167 107,752 0.4%
Tangible Book Value Per Common
Share 11.25 10.52 7.0%
LOAN DISTRIBUTION at end of
period:
Commercial, Financial &
Agricultural Loans $ 204,242 182,840 11.7%
Commercial Real Estate
Mortgages 318,601 292,458 8.9%
Real Estate - Construction
Loans 83,715 80,687 3.8%
Residential Mortgages (1st and
2nd Liens) 184,743 155,107 19.1%
Home Equity Loans 67,081 76,361 (12.2%)
Consumer Loans 99,314 103,102 (3.7%)
Other Loans 1,104 892 23.8%
------------- -------------
Total Loans (Net of Unearned
Discounts) $ 958,800 $ 891,447 7.6%

YTD 2007 YTD 2006 Change
------------- ------------ -----------
EARNINGS
Earnings-Per-Share - Basic $ 2.24 $ 2.20 1.8%
Cash Dividends-Per-Share 0.88 0.88 0.0%
Net Income 22,128 22,628 (2.2%)
Net Interest Income 63,964 65,710 (2.7%)
AVERAGE BALANCES
Average Assets $ 1,412,581 $ 1,408,651 0.3%
Average Net Loans 904,887 892,588 1.4%
Average Investment Securities 412,701 415,880 (0.8%)
Average Interest-Earning Assets 1,320,226 1,313,894 0.5%
Average Deposits 1,154,123 1,152,697 0.1%
Average Borrowings 133,859 137,511 (2.7%)
Average Interest-Bearing
Liabilities 862,429 859,141 0.4%
Average Equity 103,052 102,101 0.9%
RATIOS
Return on Average Equity 21.47% 22.16% (3.1%)
Return on Average Assets 1.57% 1.61% (2.5%)
Average Equity/Assets 7.30% 7.25% 0.7%
Net Interest Margin (FTE) 5.06% 5.16% (1.9%)
Efficiency Ratio 54.17% 52.34% 3.5%
Tier 1 Leverage Ratio Dec. 31
Tier 1 Risk-based Capital Ratio
Dec. 31
Total Risk-based Capital Ratio
Dec. 31
ASSET QUALITY during period:
Net Charge-offs (Recoveries) $ (134) $ 3,243 (104.1%)
Net Charge-offs/Average Net
Loans (annual) (0.01%) 0.36% (102.8%)
at end of period:
Non-accrual & Restructured
Loans
Foreclosed Real Estate ("OREO")
Total Non-performing Assets
Allowance/Non-performing Assets
Allowance/Loans, Net of
Discount
Net Loans/Deposits
EQUITY
Shares Outstanding
Common Equity
Book Value Per Common Share
Tangible Common Equity
Tangible Book Value Per Common
Share
LOAN DISTRIBUTION at end of
period:
Commercial, Financial &
Agricultural Loans
Commercial Real Estate
Mortgages
Real Estate - Construction
Loans
Residential Mortgages (1st and
2nd Liens)
Home Equity Loans
Consumer Loans
Other Loans
Total Loans (Net of Unearned
Discounts)
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CONSOLIDATED STATEMENTS OF CONDITION
(unaudited, in thousands of dollars except for share and per share
data)

December 31,
2007 2006 Change
----------- ----------- ---------
ASSETS
Cash & Due From Banks $ 56,633 $ 43,576 30.0%
Federal Funds Sold 2,700 - 100.0%
Investment Securities:
Available for Sale, at Fair Value 392,796 403,246 (2.6%)
Obligations of States & Political
Subdivisions 9,055 9,913 (8.7%)
Federal Reserve Bank Stock 638 638 0.0%
Federal Home Loan Bank Stock 7,818 4,446 75.8%
Corporate Bonds & Other Securities 100 100 0.0%
----------- -----------
Total Investment Securities 410,407 418,343 (1.9%)

Total Loans 958,800 891,447 7.6%
Allowance for Loan Losses 7,672 7,551 1.6%
----------- -----------
Net Loans 951,128 883,896 7.6%

Premises & Equipment, Net 22,143 22,471 (1.5%)
Accrued Interest Receivable, Net 7,359 7,609 (3.3%)
Excess of Cost Over Fair Value of Net
Assets Acquired 814 814 0.0%
Other Assets 19,397 15,940 21.7%
----------- -----------
TOTAL ASSETS $1,470,581 $1,392,649 5.6%
=========== ===========

LIABILITIES & STOCKHOLDERS' EQUITY
Demand Deposits $ 423,225 $ 426,924 (0.9%)
Saving, N.O.W. & Money Market
Deposits 404,457 438,190 (7.7%)
Time Certificates of $100,000 or More 116,795 81,842 42.7%
Other Time Deposits 198,898 192,119 3.5%
----------- -----------
Total Deposits 1,143,375 1,139,075 0.4%

Federal Home Loan Bank Borrowings 143,500 67,000 114.2%
Repurchase Agreements 54,820 53,135 3.2%
Dividend Payable on Common Stock 2,121 2,253 (5.9%)
Accrued Interest Payable 2,247 3,373 (33.4%)
Other Liabilities 15,537 19,247 (19.3%)
----------- -----------
TOTAL LIABILITIES 1,361,600 1,284,083 6.0%
----------- -----------

STOCKHOLDERS' EQUITY
Common Stock (par value $2.50;
15,000,000 shares authorized;
9,610,730 and 10,242,292 shares
outstanding at December 31, 2007 and
2006, respectively) 33,911 33,911 0.0%
Surplus 20,172 19,931 1.2%
Treasury Stock at Par (3,953,661 and
3,322,099 shares, respectively) (9,884) (8,305) 19.0%
Retained Earnings 63,939 67,099 (4.7%)
----------- -----------
108,138 112,636 (4.0%)
Accumulated Other Comprehensive
Income (Loss), Net of Tax 843 (4,070) (120.7%)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 108,981 108,566 0.4%
TOTAL LIABILITIES & STOCKHOLDERS'
EQUITY $1,470,581 $1,392,649 5.6%
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CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands of dollars except for share and per share
data)

For the 3 Months Ended
12/31/07 12/31/06 Change
------------ ------------ -----------

INTEREST INCOME
Federal Funds Sold $ 4 $ 177 (97.7%)
United States Treasury
Securities 101 110 (8.2%)
Obligations of States &
Political Subdivisions 1,469 1,163 26.3%
Mortgage-Backed Securities 1,794 2,056 (12.7%)
U.S. Government Agency
Obligations 1,058 1,217 (13.1%)
Corporate Bonds & Other
Securities 119 85 40.0%
Loans 17,666 17,187 2.8%
------------ ------------
Total Interest Income 22,211 21,995 1.0%

INTEREST EXPENSE
Saving, N.O.W. & Money Market
Deposits 1,206 1,185 1.8%
Time Certificates of $100,000 or
more 1,343 978 37.3%
Other Time Deposits 2,084 1,819 14.6%
Federal Funds Purchased &
Repurchase Agreements 696 721 (3.5%)
Interest on Other Borrowings 1,032 826 24.9%
------------ ------------
Total Interest Expense 6,361 5,529 15.0%

Net-interest Income 15,850 16,466 (3.7%)
Provision for Loan Losses 225 21 971.4%
------------ ------------
Net-interest Income After
Provision 15,625 16,445 (5.0%)

OTHER INCOME
Service Charges on Deposit
Accounts 1,397 1,335 4.6%
Other Service Charges,
Commissions & Fees 782 848 (7.8%)
Fiduciary Fees 387 322 20.2%
Other Operating Income 344 312 10.3%
------------ ------------
Total Other Income 2,910 2,817 3.3%

OTHER EXPENSE
Salaries & Employee Benefits 6,011 5,978 0.6%
Net Occupancy Expense 1,004 988 1.6%
Equipment Expense 548 559 (2.0%)
Other Operating Expense 2,280 2,549 (10.6%)
------------ ------------
Total Other Expense 9,843 10,074 (2.3%)

Income Before Provision for
Income Taxes 8,692 9,188 (5.4%)
Provision for Income Taxes 3,088 3,591 (14.0%)
------------ ------------
NET INCOME $ 5,604 $ 5,597 0.1%
============ ============
Average: Common Shares
Outstanding 9,676,500 10,238,718 (5.5%)
Dilutive Stock Options 20,595 29,448 (30.1%)
------------ ------------
Average Total 9,697,095 10,268,166 (5.6%)

EARNINGS PER COMMON SHARE
Basic $ 0.58 $ 0.55 5.5%
Diluted $ 0.58 $ 0.55 5.5%

For the Year to Date
2007 2006 Change
----------- ----------- ------------

INTEREST INCOME
Federal Funds Sold $ 140 $ 281 (50.2%)
United States Treasury
Securities 398 397 0.3%
Obligations of States &
Political Subdivisions 5,424 4,001 35.6%
Mortgage-Backed Securities 7,672 7,982 (3.9%)
U.S. Government Agency
Obligations 4,576 4,879 (6.2%)
Corporate Bonds & Other
Securities 423 343 23.3%
Loans 70,448 68,326 3.1%
----------- -----------
Total Interest Income 89,081 86,209 3.3%

INTEREST EXPENSE
Saving, N.O.W. & Money Market
Deposits 4,838 4,791 1.0%
Time Certificates of $100,000 or
more 5,094 2,034 150.4%
Other Time Deposits 8,181 6,714 21.8%
Federal Funds Purchased &
Repurchase Agreements 2,876 2,955 (2.7%)
Interest on Other Borrowings 4,128 4,005 3.1%
----------- -----------
Total Interest Expense 25,117 20,499 22.5%

Net-interest Income 63,964 65,710 (2.7%)
Provision for Loan Losses 377 966 (61.0%)
----------- -----------
Net-interest Income After
Provision 63,587 64,744 (1.8%)

OTHER INCOME
Service Charges on Deposit
Accounts 5,412 5,548 (2.5%)
Other Service Charges,
Commissions & Fees 2,981 3,097 (3.7%)
Fiduciary Fees 1,409 1,252 12.5%
Other Operating Income 793 775 2.3%
----------- -----------
Total Other Income 10,595 10,672 (0.7%)

OTHER EXPENSE
Salaries & Employee Benefits 24,407 23,897 2.1%
Net Occupancy Expense 4,069 3,950 3.0%
Equipment Expense 2,208 2,113 4.5%
Other Operating Expense 9,708 10,015 (3.1%)
----------- -----------
Total Other Expense 40,392 39,975 1.0%

Income Before Provision for
Income Taxes 33,790 35,441 (4.7%)
Provision for Income Taxes 11,662 12,813 (9.0%)
----------- -----------
NET INCOME $ 22,128 $ 22,628 (2.2%)
=========== ===========
Average: Common Shares
Outstanding 9,895,301 10,279,870 (3.7%)
Dilutive Stock Options 20,642 23,639 (12.7%)
----------- -----------
Average Total 9,915,943 10,303,509 (3.8%)

EARNINGS PER COMMON SHARE
Basic $ 2.24 $ 2.20 1.8%
Diluted $ 2.23 $ 2.20 1.4%
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Suffolk Bancorp
Douglas Ian Shaw, 631-727-5667
Corporate Secretary

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