After real estate troubles muddied Suffolk Bancorp's reputation, its new president and chief executive plans to restore its name on Long Island.

Howard Bluver has been a consultant to Suffolk, of Riverhead, N.Y., the past six months. During that period the 121-year-old company resolved compliance issues with the Securities and Exchange Commission, restated 2010 earnings and escaped Nasdaq delisting. Suddenly in a more visible role, Bluver is responsible for getting a company on the mend growing again.

"Now that the restatements are behind us and our filings are up to date, we can focus on making new loans and working out the bad loans," Bluver said in an interview Tuesday after his appointment was announced. "That will be the focus going forward where in the past year or so, it has been backward-looking."

Bluver succeeded J. Gordon Huszagh, who became president and CEO of the Riverside, N.Y., company in 2009. Huszagh could not be reached for comment but said in a press release that "a change in leadership would be in the best interest of our loyal stockholders."

Recent years were tumultuous for the $1.5 billion-asset company, which was reached a formal agreement with the Office of the Comptroller of the Currency in October 2010 and said last summer that it would restate 2010 earnings due to weaknesses in its accounting for loan losses.

"Clearly, Suffolk was looking for somebody to fix the place up," said Jeff Marsico, an executive vice president at The Kafafian Group Inc. in New Jersey. "Unfortunately, Suffolk was one of those banks where everything was fine until the tide went out and …they found out they were swimming naked."

In mid-2011, as souring real estate loans and regulatory pressure mounted, the board turned to Bluver. "The board and executive management team recognized we were getting into areas that we had little experience in and we needed some advice," said Edgar Goodale, Suffolk's chairman. Bluver "fit the bill."

In December, Suffolk refiled results to reveal lower income but it reached profitability in the second quarter and avoided delisting. Goodale and Bluver said in separate interviews that the longer it took to fix the problems, the more they liked each other.

"I learned to like them a lot and to respect them a lot." said Bluver, a native Long Islander. "The longer I worked with the board and the company, the more that [joining] made a lot of sense to me."

Bluver had received other offers from banks to leave his consultant firm, JDS Financial Group LLC, but Suffolk was the only one to successfully tempt him to return to banking. Though the company is still working through bad loans — more than 6% of its total assets are nonperforming — Bluver was captivated by its deposit base. "Suffolk has one of the most attractive core deposit franchises I have ever seen," he said.

"A bank that has a high-quality core deposit franchise with low funding costs and an attractive branch system is one of the most important components of having a value franchise," Bluver said.

Bluver would know. Before becoming a consultant in 2005, he was general counsel and chief enterprise risk officer at GreenPoint Financial Corp. in New York, which North Fork Bancorp bought in 2004. He is a director at Bank of Georgetown in Washington and he resigned as a director and Blue Ridge Holdings Inc., a shelf charter group, due to his new post.

Bluver started out in regulation, first with the Securities and Exchange Commission, overseeing financial institutions, and then the Office of Thrift Supervision as deputy chief counsel. Suffolk's board hopes his regulatory will send the company in a healthy direction.

"Having the banking and regulatory background, including with the SEC seems to fit very well with us," Goodale said. "We didn't have expertise on the board in recognizing these things …We were fortunate to find him."

Several banks have hired former regulators as CEOs. The $1.1 billion-asset First National Community Bancorp Inc. in Dunmore, Pa., named Steven Tokach, a former OCC examiner, as its president and CEO in November. In February, Brad Williamson, a former director of banks for the Washington State Department of Financial Institutions, became CEO of Islanders Bank, a unit of Banner Corp.

Bluver is the latest executive change at Suffolk. In May, it hired Karen Hamilton as chief lending officer. Bluver said Hamilton has hired credit officers to focus on reducing nonperforming loans.

Hamilton has "made tremendous progress in …many compliance-related issues, so the bank is making a lot of progress in addressing the requirements of the regulators," Bluver said. "We still have a lot work to do …[and] we will continue that."

As Suffolk works at getting out of the formal agreement, it has also launched a campaign in Suffolk County to revive its reputation in the community.

"We're just getting the word out …that you can count on us, we've been here 120 years, we've put the uncertainty behind us and we're open for business," said Frank Filipo, Suffolk's operating officer.

Goodale said former CEO Huszagh will assist Suffolk through its early 2012 financial reporting as the board searches for a permanent chief financial officer. Goodale hopes to fill the position this quarter.

Goodale said the board has asked Bluver to "continue stabilizing the company, streamline Suffolk's credit process to react to our customers' needs and grow the bank through a controlled [and] well thought out strategic plan."

"I've learned more in the last 12 months than in the previous 20 years," Goodale said. "It certainly has been a learning process and the lessons were very well learned."

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