Suffolk Bancorp (SUBK) in Riverhead, N.Y., posted higher second-quarter profit as it recorded a credit for its loan-loss provision and a decline in operating expenses.

The $1.6 billion-asset company said Monday that its earnings rose 27% from a year earlier, to $4.2 million. For the first six months of 2012, Suffolk's net income totaled $5.4 million, compared with a loss of $4.3 million a year earlier.

During the second quarter, the company recorded a credit of $2.4 million for its provision, compared with a $3.2 million charge a year earlier. This reflected a reduction in criticized and classified assets in 2012 and ongoing loan workouts and nonperforming asset disposition.

Nonperforming assets fell 25% from the first quarter, to $64 million, because of loan sales. During the second quarter, Suffolk sold or transferred loans to held-for-sale at 77% of book value, resulting in a $7 million charge to the loan-loss allowance.

Suffolk will continue to "implement aggressive credit remediation strategies throughout 2012, and expect to see additional improvements in our key credit metrics as the year moves on," Howard C. Bluver, the company's president and chief executive, said in a press release.

Operating expenses fell almost 6% from a year earlier, to $14.1 million, as costs for consulting services declined. A year earlier, the company incurred a $1 million prepayment fee for terminating a Federal Home Loan bank borrowing.

These improvements were partly offset by a drop in net interest and noninterest income. Net interest income fell almost 17% from a year earlier, to $14.9 million. Noninterest income fell 41% from a year earlier, to $2.4 million.

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