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Sun Bancorp, Inc. Reports Third Quarter 2013 Results

Oct 23, 2013

 

Third Quarter Highlights

* Non-Performing Loans declined $16.3 million during the quarter to $55.4 million

* NPL / Loans decreased to 2.55%; down from 3.32% in prior quarter and 5.23% in the third quarter of 2012

* Excess liquidity grew as interest bearing cash averaged $349.4 million or 10.7% of average assets

 

VINELAND, N.J. /PRNewswire/ -- Sun Bancorp, Inc. (NASDAQ: SNBC) (the "Company") reported today a net loss available to common shareholders of $4.9 million, or a loss of $0.06 per diluted share, for the quarter ended September 30, 2013, compared to net income available to common shareholders of $678 thousand, or $0.01 per diluted share, and $1.2 million, or $0.01 per diluted share, for the second quarter of 2013 and the third quarter of 2012, respectively.

The following are key items and events that occurred during the third quarter of 2013:

  • Acceleration of regulatory remediation efforts and mortgage platform enhancements increased professional fees to $5.9 million which is up from $4.8 million in the prior quarter and $713 thousand in the third quarter of 2012
  • Provision expense of $724 thousand recorded in the third quarter of 2013 as compared to negative provision of $1.9 million in the second quarter of 2013. The allowance for loan losses equaled $48.9 million at September 30, 2013, an increase of $847 thousand from June 30, 2013. The allowance for loan losses equaled 2.25% of gross loans held-for-investment and 88.19% of non-performing loans held-for-investment at September 30, 2013 as compared to 2.22% and 66.93%, respectively, at June 30, 2013 and 2.02% and 55.33%, respectively, at December 31, 2012.
  • Total risk-based capital equaled 14.72% at September 30, 2013, a decrease of 8 basis points from 14.80% at June 30, 2013.
  • Increases in interest rates caused a reduction in mortgage banking income. Net mortgage banking income fell $3.5 million compared to the prior quarter. Sun National Bank (the "Bank") reduced expenses early in the fourth quarter to adjust its fixed cost infrastructure to the new lower volume environment by reducing headcount by 19 positions. It is anticipated that these reductions will save approximately $1.3 million annually going forward.
  • The Bank deployed approximately $151 million of cash into mortgage backed securities during the quarter but interest bearing cash still ended the quarter at $376.5 million.

"We believe the third quarter reflects the later stages of the Company's transition, as we continue to improve our asset quality profile and invest in risk management infrastructure enhancements," said Thomas X. Geisel, the Company's President and Chief Executive Officer.  "We have focused on balancing the impacts of a rising rate environment and reducing risk on the balance sheet with deposit generation, product and service innovations and managed loan growth.  As we finish out the year, we expect to maintain this focus and continue executing on our strategy."

Discussion of Results:

Balance Sheet

  • Total assets were $3.24 billion at September 30, 2013, as compared to $3.21 billion at June 30, 2013 and $3.22 billion at December 31, 2012.
  • Cash and cash equivalents increased $11.3 million and $284.0 million, respectively, to $453.6 million at September 30, 2013 as compared to June 30, 2013 and December 31, 2012, primarily due to an increase in interest earning bank balances as a result of commercial loan pay downs generated from workout strategies and the sales of jumbo residential mortgage loans out of the portfolio.
  • Investment securities available for sale were $407.2 million as of September 30, 2013 compared to $343.1 million at June 30, 2013 and $443.2 million at December 31, 2012. The increase of $64.1 million from the prior quarter was due to the purchase of $151.1 million of mortgage backed securities offset by the sale of $71 million of U.S. Treasury securities.
  • Gross loans held-for-investment were $2.17 billion at September 30, 2013, as compared to $2.16 billion at June 30, 2013 and $2.28 billion at December 31, 2012. Compared to December 31, 2012, loans held-for-investment decreased $106.6 million, primarily due to pay downs of commercial real estate loans and the sale of jumbo residential mortgages.

Net Interest Income and Margin

  • Net interest income increased $1.2 million from the linked quarter to $23.0 million for the three months ended September 30, 2013. The net interest margin increased 14 basis points to 3.10% for the three months ended September 30, 2013 from 2.96% for the linked quarter, and decreased 31 basis points as compared to the third quarter of 2012. The average yield on interest-earning assets increased 11 basis points to 3.61% at September 30, 2013 from 3.50% at June 30, 2013. This increase was due primarily to an increase in commercial loan yields of 27 basis points as compared to the linked quarter resulting from an interest recovery of $1.2 million on the payoff of a nonperforming loan. The margin variance between the quarter ended September 30, 2013 and the comparable prior year period is primarily due to an increase of $328.4 million in average interest-earning bank balances. In addition, there was a 19 basis point decline in the yield on investment securities primarily due to a decrease in average balances resulting from sales of investment securities in 2013. Total average investment securities for the three months ended September 30, 2013 were $414.2 million compared to $534.8 million for the three months ended September 30, 2012.
  • Excluding bulk sales, residential mortgage loans sold during the quarter totaled $127.4 million as compared to $161.6 million in the previous quarter and $119.7 million in the comparable prior year quarter.  The locked sale pipeline has decreased to $27 million from $84 million at June 30, 2013.  The increasing interest rate environment has caused a decrease in residential mortgage production.  Despite this production decline, closed loans for the nine months ended September 30, 2013 totaled $595 million, a 39% increase from the same prior year period.

Non-Interest Income

  • Non-interest income was $5.8 million for the quarter ended September 30, 2013, as compared to $10.2 million for the quarter ended June 30, 2013 and $9.5 million for the comparable prior year quarter. The decrease from the linked quarter was primarily attributable to the decrease in net mortgage banking revenue of $4.0 million resulting primarily from a decline in production volume due to rising rates as well as a $1.5 million gain recognized on the sales of jumbo residential mortgage loans in the second quarter. The results of operations for the three months ended September 30, 2013 also includes a negative derivative credit valuation adjustment recorded of $380 thousand compared to a positive derivative credit valuation adjustment of $6 thousand recorded during the three months ended June 30, 2013.

Non-Interest Expense

  • Non-interest expense was $33.0 million in the third quarter of 2013, a decrease of $229 thousand compared to the linked quarter and an increase of $2.2 million over the comparable prior year quarter. In comparison to the linked quarter, decreases in real estate owned expense, net, commission expense and salaries and employee benefits of $1.0 million, $555 thousand and $363 thousand, respectively, were partially offset by an increase of $1.2 million in professional fees.  Professional fees increased by $5.2 million from the same prior year quarter due to regulatory compliance and mortgage risk related consulting services and platform enhancements performed in the first nine months of 2013. This increase was partially offset by decreases in problem loan expense and salaries and employee benefits of $1.3 million and $1.0 million, respectively, compared to the third quarter in 2012.

Asset Quality

  • During the third quarter of 2013, provision expense of $724 thousand was recorded, as compared to negative provision of $1.9 million in the linked quarter and expense of $1.9 million in the comparable prior year quarter. The allowance for loan losses was $48.9 million at September 30, 2013, or 2.25% of gross loans held-for-investment, as compared to 2.22% at June 30, 2013 and 2.02% at December 31, 2012. Recoveries were $1.8 million in the third quarter of 2013, as compared to $4.8 million of recoveries recorded in the linked quarter, $3.0 million of which was related to the payoff of one commercial real estate loan. Charge-offs recorded during the three months ended September 30, 2013 were $1.7 million, as compared to $2.0 million for the linked quarter and $5.0 million for the comparable prior year quarter.
  • Total non-performing assets were $60.5 million, or 2.76% of total gross loans held-for-investment, loans held-for-sale and real estate owned at September 30, 2013, as compared to $78.5 million, or 3.51%, and $103.1 million, or 4.18%, respectively, at June 30, 2013 and December 31, 2012. Non-performing loans decreased $16.3 million over the linked quarter to $55.4 million at September 30, 2013 from $71.7 million at June 30, 2013 and decreased $40.2 million from $95.6 million at December 31, 2012. The decrease from the linked quarter was primarily due to the payoff of three nonperforming commercial loans totaling $15.5 million. For the year, ten nonperforming commercial loans totaling $33.9 million have been paid off as a result of the Company's workout strategies.

Capital

  • Shareholders' equity totaled $257.1 million at September 30, 2013 compared to $261.7 million at June 30, 2013 and $262.6 million at December 31, 2012. The Company's tangible equity to tangible assets ratio was 6.81% at September 30, 2013, as compared to 7.00% at June 30, 2013 and 6.95% at December 31, 2012.  At September 30, 2013, the Company's total risk-based capital ratio, Tier 1 capital ratio and leverage capital ratio were approximately 14.72%, 12.76%, and 9.13%, respectively.  At September 30, 2013, the Bank's total risk-based capital ratio, Tier 1 capital ratio and leverage capital ratio were approximately 13.96%, 12.70%, and 9.09%, respectively.

The Company will hold its regularly scheduled conference call on Thursday October 24, 2013, at 11:00 a.m. (ET).  Participants may listen to the live web cast through the Company's website at www.sunnationalbank.com. Participants are advised to log on 10 minutes ahead of the scheduled start of the call.  An Internet-based replay will be available at the Company's website for two weeks following the call.

Sun Bancorp, Inc. (NASDAQ: SNBC) is a $3.24 billion asset bank holding company headquartered in Vineland, New Jersey, with its executive offices located in Mt. Laurel, New Jersey. Its primary subsidiary is Sun National Bank, a full service commercial bank serving customers through 50-plus locations in New Jersey. Sun National Bank has been named one of Forbes Magazine's "Most Trustworthy Companies" for five years running.  Sun National Bank is an Equal Housing Lender and its deposits are insured up to the legal maximum by the Federal Deposit Insurance Corporation (FDIC). For more information about Sun National Bank and Sun Bancorp, Inc., visit www.sunnationalbank.com.

Cautionary Note Regarding Forward-Looking Statements

The foregoing material contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, concerning the financial condition, results of operations and business of the Company.  Forward-looking statements are statements that include projections, predictions, expectations or beliefs about events or results or otherwise are not statements of historical facts, including statements about anticipated savings from reductions in personnel, improving our asset quality profile, reducing our risk, enhancing our regulatory infrastructure and balancing the impacts of a rising rate environment and reducing risk on the balance sheet with deposit generation, product and service innovations and managed loan growth and being in the later stages of the Company's transition.  Actual results and trends could differ materially from those set forth in such statements and there can be no assurances that we will fully realize the anticipated savings from reductions in personnel, improve our asset quality profile, reduce our risk, enhance our regulatory infrastructure or successfully balance the impacts of a rising rate environment and reducing risk on the balance sheet with deposit generation, product and service innovations and managed loan growth or that the Company is in the later stages of its transition.  We caution that such statements are subject to a number of uncertainties, including those detailed under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Form 10-K for the fiscal year ended December 31, 2012, its Form 10-Qs for the quarters ended March 31, 2013 and June 30, 2013, and in other filings made pursuant to the Securities Exchange Act of 1934, as amended.  Therefore, readers should not place undue reliance on any forward-looking statements.  The Company does not undertake, and specifically disclaims, any obligation to publicly release the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

 

Non-GAAP Financial Measures (Unaudited)

This news release references tax-equivalent interest income. Tax-equivalent interest income is a non-GAAP financial measure. Tax-equivalent interest income assumes a 35% marginal federal tax rate for all periods. The fully taxable equivalent adjustments for the three months ended September 30, 2013, June 30, 2013, March 31, 2013, and December 31, 2012 and September 30, 2012 were $167 thousand, $175 thousand, $212 thousand, $210 thousand       and $212 thousand, respectively. The fully taxable equivalent adjustments for the nine months ended September 30, 2013 and September 30, 2012 were $554 thousand and $661 thousand, respectively. This release also references tangible book value per common share.  Tangible book value per common share is a non-GAAP financial measure.  Tangible book value per common share is a ratio of tangible equity, shareholder's equity less intangible assets, to outstanding common shares.  Intangible assets at September 30, 2013, June 30, 2013, March 31, 2013, December 31, 2012, and September 30, 2012 were $39.4 million, $40.0 million, $40.5 million, $41.5 million, and $42.4 million, respectively.

Tax-equivalent interest income

The following reconciles net interest income to net interest income on a fully taxable equivalent basis using a 35% tax rate for the three months ended September 30, 2013, June 30, 2013, March 31, 2013, December 31, 2012, and September 30, 2012 and nine months ended September 30, 2013 and September 30, 2012.

 

For Three Months Ended:

September 30, 2013

 

June 30, 2013

 

March 31, 2013

 

December 31, 2012

 

September 30, 2012

                   

Net interest income

$

22,980

 

$

21,776

 

$

23,078

 

$

23,981

 

$

24,334

Effect of tax exempt income 

 

167

   

175

   

212

   

210

   

212

Net interest income, tax equivalent basis

$

23,147

 

$

21,951

 

$

23,290

 

$

24,191

 

$

24,546

 

For Nine Months Ended:

   

September 30,

     

2013

2012

       

Net interest income

       

$

67,834

 

$   73,867

Effect of tax exempt income

         

554

661

Net interest income, tax equivalent basis

       

$

68,388

 

$   74,528

                   

 

Tangible book value per common share

The following reconciles shareholders' equity to tangible equity by reducing shareholders' equity by the intangible asset balance at September 30, 2013, June 30, 2013, March 31, 2013, December 31, 2012, and September 30, 2012.

 

September 30, 2013

 

June 30, 2013

 

March 31, 2013

 

December 31, 2012

 

September 30, 2012

                   

Tangible book value per common share:

                 

   Shareholders' equity

$

257,139

 

$

261,664

 

$

264,339

 

$

262,596

 

$

287,481

  Less: Intangible assets

 

39,448

   

39,988

   

40,529

   

41,450

   

42,371

Tangible equity

$

217,692

 

$

221,676

 

$

223,811

 

$

221,147

 

$

245,110

                             

  Common stock

 

88,618

   

88,572

   

88,403

   

88,301

   

88,171

  Less: Treasury stock

 

2,068

   

2,107

   

2,107

   

2,107

   

2,107

Total outstanding shares

 

86,550

   

86,465

   

86,296

   

86,194

   

86,064

                             

Tangible book value per common share:

$

2.52

 

$

2.56

 

$

2.59

 

$

2.57

 

$

2.85

     

 

SUN BANCORP, INC. AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS (Unaudited)

(Dollars in thousands, except share and per share amounts)

   

For the Three Months Ended

 

For the Nine Months Ended

 
   

September 30,

 

September 30,

 
   

2013

   

2012

 

2013

 

2012

 

Profitability for the period:

                       

    Net interest income

 

$

22,980

 

 

$

24,334

 

$

67,834

 

$

73,867

 

    Provision for loan losses

   

724

   

1,868

   

(988)

   

33,061

 

    Non-interest income

   

5,799

   

9,478

   

26,939

   

21,959

 

    Non-interest expense

   

32,917

   

30,750

   

97,492

   

88,336

 

    (Loss) income before income taxes

   

(4,862)

   

1,194

   

(1,731)

   

(25,571)

 

    Net (loss) income

   

(4,862)

   

1,228

   

(1,731)

   

(25,537)

 

    Net (loss) income available to common shareholders

 

$

(4,862)

 

 

$

1,228

 

$

(1,731)

 

$

(25,537)

 
                           

Financial ratios:

                         

    Return on average assets(1) 

   

(0.60)

%

 

0.16

%

 

(0.07)

%

 

(1.08)

%

    Return on average equity(1)

   

(7.46)

%

 

1.70

%

 

(0.88)

%

 

(11.52)

%

    Return on average tangible equity(1),(2)

   

(8.80)

%

 

1.99

%

 

(1.04)

%

 

(13.52)

%

    Net interest margin(1)

   

3.10

%

 

3.41

%

 

3.07

%

 

3.47

%

    Efficiency ratio

   

114.38

%

 

90.97

%

 

102.87

%

 

92.18

%

    (Loss) earnings per common share:

                         

        Basic

 

$

(0.06)

 

 

$

0.01

 

$

(0.02)

 

$

(0.30)

 

        Diluted 

 

$

(0.06)

 

$

0.01

 

$

(0.02)

 

$

(0.30)

 
                           

    Average equity to average assets

   

7.99

%

 

9.17

%

 

8.12

%

 

9.41

%

   

September 30,

 

  December 31,

       
   

2013

   

2012

 

2012

         

At period-end:

                         

    Total assets

 

$

3,236,321

 

 

$

3,180,263

 

$

3,224,031

         

    Total deposits

   

2,752,693

   

2,646,807

   

2,713,224

         

    Loans receivable, net of allowance for loan losses

   

2,120,686

   

2,261,980

   

2,230,287

         

    Loans held-for-sale

   

18,707

   

60,676

   

120,935

         

    Investments

   

425,029

   

527,034

   

461,980

         

    Borrowings

   

68,953

   

78,011

   

70,992

         

    Junior subordinated debentures

   

92,786

   

92,786

   

92,786

         

    Shareholders' equity

   

257,140

   

287,480

   

262,595

         
                             

Credit quality and capital ratios:

                           

   Allowance for loan losses to gross loans held-for- investment

   

2.25

%

 

2.12

%

 

2.02

%

       

   Non-performing loans held-for-investment to gross loans

    held-for-investment

   

2.55

%

 

5.23

%

 

3.64

%

       

   Non-performing assets to gross loans held-for-investment, loans held-for-sale and real estate owned

   

2.76

%

 

5.32

%

 

4.29

%

       

   Allowance for loan losses to non-performing loans held-for-investment

   

88.19

%

 

40.56

%

 

55.33

%

       
                             

Total capital (to risk-weighted assets) (3):

                           

        Sun Bancorp, Inc.

   

14.72

%

 

14.58

%

 

13.72

%

       

        Sun National Bank

   

13.96

%

 

13.88

%

 

13.02

%

       

Tier 1 capital (to risk-weighted assets) (3):

                           

        Sun Bancorp, Inc.

   

12.76

%

 

13.00

%

 

11.82

%

       

        Sun National Bank

   

12.70

%

 

12.62

%

 

11.76

%

       

Leverage ratio:

                           

        Sun Bancorp, Inc.

   

9.13

%

 

10.44

%

 

9.30

%

       

        Sun National Bank

   

9.09

%

 

10.11

%

 

9.24

%

       
                             

    Book value per common share

 

$

2.97

 

 

$

3.34

 

$

3.05

         

    Tangible book value per common share

 

$

2.52

 

 

$

2.85

 

$

2.57

         

(1) Amounts for the three and nine months ended are annualized.

(2) Return on average tangible equity is computed by dividing annualized net income for the period by average tangible equity. Average tangible equity equals average equity less average identifiable intangible assets and goodwill.

(3) September 30, 2013 capital ratios are estimated, subject to regulatory filings.

 

 

 

SUN BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)

(Dollars in thousands, except par value amounts)

 

September 30,

2013

 

December 31, 2012

 

ASSETS

       

Cash and due from banks

$

77,130

 

$

77,564

 

Interest-earning bank balances

 

376,453

   

92,052

 

Cash and cash equivalents

 

453,583

   

169,616

 

Investment securities available for sale (amortized cost of $412,088 and $439,488 at September 30, 2013 and December 31, 2012, respectively)

 

407,170

   

443,182

 

Investment securities held to maturity (estimated fair value of $711 and $960 at September 30, 2013 and December 31, 2012, respectively)

 

700

   

912

 

Loans receivable (net of allowance for loan losses of $48,854 and $45,873 at September 30, 2013 and December 31, 2012, respectively)

 

2,120,686

   

2,230,287

 

Loans held-for-sale, at lower of cost or market

 

-

   

21,922

 

Loans held-for-sale, at fair value

 

18,707

   

99,013

 

Restricted equity investments, at cost

 

17,159

   

17,886

 

Bank properties and equipment, net

 

49,387

   

50,805

 

Real estate owned

 

5,059

   

7,473

 

Accrued interest receivable

 

6,566

   

8,054

 

Goodwill

 

38,188

   

38,188

 

Intangible assets

 

1,260

   

3,262

 

Deferred taxes, net

 

2,009

   

-

 

Bank owned life insurance (BOLI)

 

76,770

   

76,858

 

Other assets

 

39,077

   

56,573

 

Total assets

$

3,236,321

 

$

3,224,031

 
             

LIABILITIES AND SHAREHOLDERS' EQUITY

           

Liabilities:

           

Deposits

$

2,752,693

 

$

2,713,224

 

Securities sold under agreements to repurchase – customers

 

554

   

1,968

 

Advances from the Federal Home Loan Bank of New York (FHLBNY)

 

60,997

   

61,415

 

Obligations under capital lease

 

7,402

   

7,609

 

Junior subordinated debentures

 

92,786

   

92,786

 

Deferred taxes, net

 

-

   

1,509

 

Other liabilities

 

64,749

   

82,925

 

Total liabilities

 

2,979,181

   

2,961,436

 
             

Shareholders' equity:

           

Preferred stock, $1 par value, 1,000,000 shares authorized; none issued

 

-

   

-

 

Common stock, $1 par value, 200,000,000 shares authorized; 88,617,863 shares issued and 86,549,666 shares outstanding at September 30, 2013; 88,300,637 shares issued and 86,193,914 shares outstanding at December 31, 2012

 

88,618

   

88,301

 

Additional paid-in capital

 

507,011

   

506,537

 

Retained deficit

 

(309,742)

   

(308,011)

 

Accumulated other comprehensive (loss) income

 

(2,909)

   

2,186

 

Deferred compensation plan trust

 

(406)

   

(256)

 

Treasury stock at cost, 2,068,197 shares at September 30, 2013; and 2,106,723 shares at December 31, 2012

 

(25,432)

   

(26,162)

 

Total shareholders' equity

 

257,140

   

262,595

 

Total liabilities and shareholders' equity

$

3,236,321

 

$

3,224,031

 

 

 

SUN BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(Dollars in thousands, except per share amounts)

                         
   

For the Three Months

Ended September 30,

     

For the Nine Months

Ended September 30,

 
   

2013

   

2012

     

2013

   

2012

 

INTEREST INCOME

                         

Interest and fees on loans

$

24,576

 

$

25,631

   

$

73,420

 

$

78,037

 

Interest on taxable investment securities

 

1,680

   

2,221

     

4,449

   

7,278

 

Interest on non-taxable investment securities

 

310

   

393

     

1,028

   

1,228

 

Dividends on restricted equity investments

 

222

   

224

     

685

   

735

 

Total interest income

 

26,788

   

28,469

     

79,582

   

87,278

 

INTEREST EXPENSE

                         

Interest on deposits

 

2,813

   

3,279

     

8,773

   

10,410

 

Interest on funds borrowed

 

445

   

259

     

1,332

   

978

 

Interest on junior subordinated debentures

 

550

   

597

     

1,643

   

2,023

 

Total interest expense

 

3,808

   

4,135

     

11,748

   

13,411

 

Net interest income

 

22,980

   

24,334

     

67,834

   

73,867

 

PROVISION FOR LOAN LOSSES

 

724

   

1,868

     

(988)

   

33,061

 

Net interest income after provision for loan losses

 

22,256

   

22,466

     

68,822

   

40,806

 

NON-INTEREST INCOME

                         

Service charges on deposit accounts

 

2,314

   

2,917

     

6,793

   

8,468

 

Mortgage banking revenue, net

 

1,593

   

3,822

     

10,598

   

5,838

 

Gain on sale of investment securities

 

2

   

-

     

3,489

   

430

 

Investment products income

 

678

   

510

     

2,085

   

1,690

 

BOLI income

 

482

   

489

     

1,416

   

1,498

 

Derivative credit valuation adjustment

 

(380)

   

(198)

     

(878)

   

(525)

 

Other

 

1,110

   

1,938

     

3,436

   

4,560

 

Total non-interest income

 

5,799

   

9,478

     

26,939

   

21,959

 

NON-INTEREST EXPENSE

                         

Salaries and employee benefits

 

12,656

   

13,666

     

39,967

   

40,910

 

Commission expense

 

2,001

   

2,462

     

6,598

   

5,745

 

Occupancy expense

 

3,456

   

3,275

     

10,113

   

9,595

 

Equipment expense

 

1,796

   

1,866

     

5,485

   

5,394

 

Amortization of intangible assets

 

540

   

922

     

2,002

   

2,764

 

Data processing expense

 

995

   

1,084

     

3,021

   

3,246

 

Professional fees

 

5,947

   

713

     

13,355

   

2,070

 

Insurance expenses

 

1,496

   

1,375

     

4,468

   

4,318

 

Advertising expense

 

676

   

464

     

1,926

   

1,769

 

Problem loan expense

 

816

   

2,154

     

2,638

   

4,905

 

Real estate owned expense, net

 

252

   

779

     

1,741

   

1,350

 

Office supplies expense

 

192

   

302

     

612

   

949

 

Other

 

2,094

   

1,688

     

5,612

   

5,321

 

Total non-interest expense

 

32,917

   

30,750

     

97,492

   

88,336

 

(LOSS) INCOME BEFORE INCOME TAXES

 

(4,862)

   

1,194

     

(1,731)

   

(25,571)

 

INCOME TAX BENEFIT

 

-

   

(34)

     

-

   

(34)

 

NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS

$

(4,862)

 

$

1,228

   

$

(1,731)

 

$

(25,537)

 
                           

Basic (loss) earnings per share

$

(0.06)

 

$

0.01

   

$

(0.02)

 

$

(0.30)

 

Diluted (loss) earnings per share

$

(0.06)

 

$

0.01

   

$

(0.02)

 

$

(0.30)

 

Weighted average shares – basic

86,499,587

 

86,001,929

   

86,356,867

 

85,888,236

 

Weighted average shares - diluted

86,499,587

 

86,047,655

   

86,356,867

 

85,888,236

 
                                 

 

 

 

SUN BANCORP, INC. AND SUBSIDIARIES

 

HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)

 

(Dollars in thousands)

 
 

2013

 

2013

 

2013

 

2012

 

2012

 
 

Q3

 

Q2

 

Q1

 

Q4

 

Q3

 

Balance sheet at quarter end: 

                   

Cash and cash equivalents

$

453,583

 

$

442,239

 

$

311,660

 

$

169,616

 

$

83,854

 

Investment securities

 

425,029

   

361,149

   

335,844

   

461,980

   

527,034

 

Loans held-for-investment: 

                             

        Commercial and industrial

 

1,636,856

   

1,676,133

   

1,737,079

   

1,725,567

   

1,802,060

 

        Home equity 

 

192,135

   

195,938

   

200,084

   

207,720

   

212,911

 

        Second mortgage 

 

26,028

   

27,276

   

29,235

   

30,842

   

32,610

 

        Residential real estate 

 

281,537

   

225,147

   

248,875

   

273,413

   

224,346

 

        Other 

 

32,984

   

34,298

   

36,287

   

38,618

   

39,069

 

            Total gross loans held-for-investment

 

2,169,540

   

2,158,792

   

2,251,560

   

2,276,160

   

2,310,996

 

Allowance for loan losses 

 

(48,854)

   

(48,007)

   

(47,124)

   

(45,873)

   

(49,016)

 

            Net loans held-for-investment

 

2,120,686

   

2,110,785

   

2,204,436

   

2,230,287

   

2,261,980

 

   Loans held-for-sale

 

18,707

   

69,417

   

41,469

   

120,935

   

60,676

 

    Goodwill 

 

38,188

   

38,188

   

38,188

   

38,188

   

38,188

 

    Intangible assets

 

1,260

   

1,800

   

2,341

   

3,262

   

4,183

 

    Total assets 

 

3,236,321

   

3,205,921

   

3,227,146

   

3,224,031

   

3,180,263

 

    Total deposits

 

2,752,693

   

2,722,038

   

2,723,337

   

2,713,224

   

2,646,807

 

   Federal funds purchased

 

-

   

-

   

-

   

-

   

30,000

 

    Securities sold under agreements to repurchase - customers

 

554

   

562

   

2,726

   

1,968

   

3,587

 

    Advances from FHLBNY

 

60,997

   

61,037

   

61,077

   

61,415

   

16,749

 

    Securities sold under agreements to repurchase - FHLBNY

 

-

   

-

   

-

   

-

   

20,000

 

    Obligations under capital lease

 

7,402

   

7,472

   

7,541

   

7,609

   

7,675

 

    Junior subordinated debentures

 

92,786

   

92,786

   

92,786

   

92,786

   

92,786

 

    Total shareholders' equity

 

257,140

   

261,664

   

264,341

   

262,596

   

287,480

 

Quarterly average balance sheet: 

                             

    Loans(1)

                             

        Commercial and industrial 

$

1,671,302

 

$

1,719,278

 

$

1,744,553

 

$

1,788,347

 

$

1,805,623

 

        Home equity

 

194,622

   

197,237

   

204,311

   

210,085

   

215,542

 

        Second mortgage 

 

27,041

   

28,679

   

30,347

   

32,442

   

35,816

 

        Residential real estate

 

299,667

   

307,248

   

330,916

   

319,427

   

230,259

 

        Other

 

27,723

   

28,929

   

30,410

   

32,444

   

33,658

 

            Total gross loans 

 

2,220,355

   

2,281,371

   

2,340,537

   

2,382,745

   

2,320,898

 

    Securities and other interest-earning assets 

 

763,575

   

680,659

   

607,284

   

545,781

   

555,846

 

    Total interest-earning assets 

 

2,983,930

   

2,962,030

   

2,947,821

   

2,928,526

   

2,876,744

 

    Total assets 

 

3,264,884

   

3,222,106

   

3,206,536

   

3,193,607

   

3,153,668

 

    Non-interest-bearing demand deposits 

 

549,684

   

531,210

   

506,600

   

511,813

   

504,936

 

    Total deposits 

 

2,746,820

   

2,722,651

   

2,703,039

   

2,660,405

   

2,642,048

 

    Total interest-bearing liabilities 

 

2,358,923

   

2,355,086

   

2,360,883

   

2,318,794

   

2,279,177

 

    Total shareholders' equity 

 

260,701

   

263,108

   

263,070

   

287,698

   

289,129

 

Capital and credit quality measures:

                             

Total capital (to risk-weighted assets) (2):

                             

        Sun Bancorp, Inc.

 

14.72

%

 

14.80

%

 

14.21

%

 

13.72

%

 

14.58

%

        Sun National Bank

 

13.96

%

 

14.05

%

 

13.50

%

 

13.02

%

 

13.88

%

    Tier 1 capital (to risk-weighted assets) (2):

                             

        Sun Bancorp, Inc.

 

12.76

%

 

12.91

%

 

12.32

%

 

11.82

%

 

13.00

%

        Sun National Bank

 

12.70

%

 

12.79

%

 

12.25

%

 

11.76

%

 

12.62

%

    Leverage ratio:

                             

        Sun Bancorp, Inc.

 

9.13

%

 

9.43

%

 

9.40

%

 

9.30

%

 

10.44

%

        Sun National Bank

 

9.09

%

 

9.33

%

 

9.33

%

 

9.24

%

 

10.11

%

                               

    Average equity to average assets

 

7.99

%

 

8.17

%

 

8.20

%

 

9.01

%

 

9.17

%

    Allowance for loan losses to total gross loans held-for-investment 

 

 

2.25

%

 

 

2.22

%

 

 

2.09

%

 

 

2.02

%

 

 

2.12

%

   Non-performing loans held-for-investment to gross loans held-for-investment

 

2.55

%

 

3.32

%

 

3.28

%

 

3.64

 

%

 

5.23

%

   

 

Non-performing assets to gross loans held-for-investment, loans held-for-sale and real estate owned

 

 

 

 

2.76

 

 

 

%

 

 

 

 

3.51

 

 

 

%

 

 

 

 

3.57

 

 

 

%

 

 

 

 

4.18

 

 

 

%

 

 

 

 

5.32

 

 

 

%

    Allowance for loan losses to non-performing loans held-for-investment

 

 

88.19

%

 

 

66.93

%

 

 

63.87

%

 

 

55.33

%

 

 

40.56

%

                               

Other data:

                             

Net recoveries (charge-offs)

 

123

   

2,766

   

1,080

   

(26,690)

   

(4,246)

 

Non-performing assets:

                             

           Non-accrual loans

$

44,979

 

$

54,031

 

$

57,143

 

$

64,660

 

$

95,383

 

           Non-accrual loans held-for-sale

 

-

   

-

   

-

   

10,224

   

-

 

           Troubled debt restructurings, non-accrual

 

10,416

   

17,693

   

16,640

   

18,244

   

25,454

 

           Troubled debt restructurings, held-for-sale

 

-

   

-

   

-

   

2,499

   

-

 

           Loans past due 90 days and accruing

 

-

   

-

   

-

   

-

   

-

 

           Real estate owned, net 

 

5,059

   

6,743

   

8,472

   

7,473

   

5,513

 

                Total non-performing assets

$

60,454

 

$

78,467

 

$

82,255

 

$

103,100

 

$

126,350

 

(1)      Average balances include non-accrual loans and loans held-for-sale.

(2)      September 30, 2013 capital ratios are estimated, subject to regulatory filings.

 

 

 

SUN BANCORP, INC. AND SUBSIDIARIES

 

HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)

 

(Dollars in thousands, except share and per share amounts)

 
 

2013

 

2013

 

2013

 

2012

 

2012

 
 

Q3

 

Q2

 

Q1

 

Q4

 

Q3

 

Profitability for the quarter:

                   

Tax-equivalent interest income

$

26,955

 

$

25,888

 

$

27,295

 

$

28,367

 

$

28,681

 

Interest expense

 

3,808

   

3,937

   

4,005

   

4,174

   

4,135

 

Tax-equivalent net interest income

 

23,147

   

21,951

   

23,290

   

24,191

   

24,546

 

Tax-equivalent adjustment

 

167

   

175

   

212

   

212

   

212

 

Provision for loan losses

 

724

   

(1,883)

   

171

   

24,154

   

1,868

 

Non-interest income

 

5,799

   

10,211

   

10,882

   

6,815

   

9,588

 

Non-interest expense excluding amortization of intangible assets

 

32,377

   

32,651

   

30,415

   

30,677

   

29,938

 

Amortization of intangible assets

 

540

   

541

   

921

   

921

   

922

 

(Loss) Income before income taxes

 

(4,862)

   

678

   

2,453

   

(24,956)

   

1,194

 

Income tax benefit

 

-

   

-

   

-

   

-

   

(34)

 

Net (loss) income

 

(4,862)

   

678

   

2,453

   

(24,956)

   

1,228

 

Net (loss) income available to common shareholders

$

 

 

(4,862)

 

$

 

 

678

 

$

 

 

2,453

 

$

 

(24,956)

 

$

1,228

 

Financial ratios:

                             

Return on average assets (1)

 

(0.60)

%

 

0.08

%

 

0.31

%

 

(3.13)

%

 

0.16

%

Return on average equity (1)

 

(7.46)

%

 

1.03

%

 

3.73

%

 

(34.70)

%

 

1.70

%

Return on average tangible equity (1),(2)

 

(8.80)

%

 

1.22

%

 

4.42

%

 

(40.61)

%

 

1.99

%

Net interest margin (1)

 

3.10

%

 

2.96

%

 

3.16

%

 

3.30

%

 

3.41

%

Efficiency ratio

 

114.38

%

 

103.77

%

 

92.27

%

 

102.60

%

 

90.97

%

Per share data:

                             

(Loss) income per common share:

                             

Basic

$

(0.06)

 

$

0.01

 

$

0.03

 

$

(0.29)

 

$

0.01

 

Diluted

$

(0.06)

 

$

0.01

 

$

0.03

 

$

(0.29)

 

$

0.01

 

Book value

$

2.97

 

$

3.03

 

$

3.06

 

$

3.05

 

$

3.34

 

Tangible book value

$

2.52

 

$

2.56

 

$

2.59

 

$

2.57

 

$

2.85

 

Average basic shares

86,499,587

 

86,323,099

 

86,245,121

 

86,082,669

 

86,001,929

 

Average diluted shares

86,499,587

 

86,356,796

 

86,370,435

 

86,082,669

 

86,047,655

 

Non-interest income:

                             

Service charges on deposit accounts

$

2,314

 

$

2,250

 

$

2,229

 

$

2,486

 

$

2,917

 

Mortgage banking revenue, net

 

1,593

   

5,601

   

3,404

   

3,694

   

3,822

 

Net gain (loss) on sale of investment securities

 

2

   

(47)

   

3,487

   

(196)

   

-

 

Investment products income

 

678

   

728

   

679

   

606

   

510

 

BOLI income

 

482

   

486

   

448

   

488

   

489

 

Derivative credit valuation adjustment

 

(380)

   

6

   

(504)

   

(1,750)

   

(198)

 

Other income

 

1,110

   

1,187

   

1,139

   

1,487

   

1,938

 

        Total non-interest income

$

5,799

 

$

10,211

 

$

10,882

 

$

6,815

 

$

9,478

 

Non-interest expense:

                             

  Salaries and employee benefits

$

12,656

 

$

13,019

 

$

14,292

 

$

13,331

 

$

13,666

 

   Commission expense

 

2,001

   

2,556

   

2,041

   

2,514

   

2,462

 

    Occupancy expense

 

3,456

   

3,081

   

3,576

   

3,416

   

3,275

 

    Equipment expense

 

1,796

   

1,830

   

1,859

   

2,005

   

1,866

 

    Amortization of intangible assets

 

540

   

541

   

921

   

921

   

922

 

    Data processing expense

 

995

   

1,027

   

999

   

1,138

   

1,084

 

    Professional fees

 

5,947

   

4,761

   

2,647

   

1,389

   

713

 

    Insurance expense

 

1,496

   

1,542

   

1,430

   

1,506

   

1,375

 

    Advertising expense

 

676

   

698

   

553

   

1,040

   

464

 

    Problem loan costs

 

816

   

1,023

   

799

   

776

   

2,154

 

    Real estate owned expense, net

 

252

   

1,255

   

234

   

1,008

   

779

 

    Office supplies expense

 

192

   

191

   

229

   

298

   

302

 

    Other expense

 

2,094

   

1,668

   

1,756

   

2,256

   

1,688

 

       Total non-interest expense

$

32,917

 

$

33,192

 

$

31,336

 

$

31,598

 

$

30,750

 

(1) Amounts are annualized.

(2) Return on average tangible equity is computed by dividing annualized net income for the period by average tangible equity. Average tangible equity

equals average equity less average identifiable intangible assets and goodwill.

 

 

SUN BANCORP, INC. AND SUBSIDIARIES

   

AVERAGE BALANCE SHEETS (Unaudited)

 

(Dollars in thousands)

           
 

 For the Three Months Ended September 30,

   
 

2013

   

2012

   
 

Average

 

Income/

 

Yield/

   

Average

 

Income/

 

Yield/

   
 

Balance

 

Expense

 

Cost

   

Balance

 

Expense

 

Cost

   

Interest-earning assets:

                           

Loans receivable (1),(2):

                           

Commercial and industrial

$

1,671,302

 

$

19,205

   

4.60

%

 

$

1,805,623

 

$

20,139

   

4.46

%

 

Home equity

 

194,622

   

1,892

   

3.89

     

215,542

   

2,141

   

3.97

   

Second mortgage

 

27,041

   

384

   

5.68

     

35,816

   

518

   

5.79

   

Residential real estate

 

299,667

   

2,620

   

3.50

     

230,259

   

2,257

   

3.92

   

Other

 

27,723

   

475

   

6.85

     

33,658

   

576

   

6.85

   

Total loans receivable

 

2,220,355

   

24,576

   

4.43

     

2,320,898

   

25,631

   

4.42

   

Investment securities(3)

 

414,189

   

2,157

   

2.08

     

534,842

   

3,038

   

2.27

   

Interest-earning bank balances

 

349,386

   

222

   

0.25

     

21,004

   

12

   

0.23

   

Total interest-earning assets

 

2,983,930

   

26,955

   

3.61

     

2,876,744

   

28,681

   

3.99

   

Non-interest earning assets:

                                       

  Cash and due from banks

 

72,336

                 

75,627

               

  Bank properties and equipment, net

 

48,590

                 

52,127

               

  Goodwill and intangible assets, net

 

39,717

                 

42,826

               

  Other assets

 

120,311

                 

106,344

               

Total non-interest-earning assets

 

280,954

                 

276,924

               

Total assets

$

3,264,884

               

$

3,153,668

               
                                         

Interest-bearing liabilities:

                                       

Interest-bearing deposit accounts:

                                       

Interest-bearing demand deposits

$

1,263,160

 

$

1,064

   

0.34

%

 

$

1,218,338

 

$

1,195

   

0.39

%

 

Savings deposits

 

270,394

   

213

   

0.32

     

264,112

   

225

   

0.34

   

Time deposits

 

663,582

   

1,536

   

0.93

     

654,662

   

1,859

   

1.14

   

Total interest-bearing deposit accounts

 

2,197,136

   

2,813

   

0.51

     

2,137,112

   

3,279

   

0.61

   

Short-term borrowings:

                                       

Federal funds purchased

 

-

   

-

   

-

     

6,467

   

4

   

0.25

   

FHLBNY advances

 

-

   

-

   

-

     

20,000

   

22

   

0.44

   

Securities sold under agreements to repurchase - customers

 

555

   

-

   

-

     

4,925

   

2

   

0.16

   

Long-term borrowings:

                                       

FHLBNY advances (4)

 

61,011

   

321

   

2.10

     

10,181

   

103

   

4.71

   

Obligations under capital lease

 

7,435

   

124

   

6.67

     

7,706

   

128

   

6.64

   

Junior subordinated debentures

 

92,786

   

550

   

2.37

     

92,786

   

597

   

2.57

   

Total borrowings

 

161,787

   

995

   

2.46

     

142,065

   

856

   

2.46

   

Total interest-bearing liabilities

 

2,358,923

   

3,808

   

0.65

     

2,279,177

   

4,135

   

0.73

   

Non-interest bearing liabilities:

                                       

  Non-interest-bearing demand deposits

 

549,684

                 

504,936

             

  Other liabilities

 

95,576

                 

80,426

               

Total non-interest bearing liabilities

 

645,260

                 

585,362

               

Total liabilities

 

3,004,183

                 

2,864,539

               

Shareholders' equity 

 

260,701

                 

289,129

               

Total liabilities and shareholders' equity

$

3,264,884

               

$

3,153,668

               
                                         

Net interest income

     

$

23,147

               

$

24,546

         

Interest rate spread (5)

             

2.96

%

               

3.26

%

 

Net interest margin (6)

             

3.10

%

               

3.41

%

 

Ratio of average interest-earning assets to average interest-bearing liabilities

             

126.50

%

               

126.22

%

 
     

(1)  Average balances include non-accrual loans and loans held-for-sale.

   

(2)  Loan fees are included in interest income and the amount is not material for this analysis.

   

(3)  Interest earned on non-taxable investment securities is shown on a tax-equivalent basis assuming a 35% marginal federal tax rate for all periods. The fully taxable equivalent adjustments for the three months ended September 30, 2013 and 2012 were $167 thousand and $212 thousand, respectively.

   

(4)  Amounts include Advances from FHLBNY and Securities sold under agreements to repurchase - FHLBNY.

   

(5)  Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.

   

(6)  Net interest margin represents net interest income as a percentage of average interest-earning assets.

   
                                                                               

 

 

SUN BANCORP, INC. AND SUBSIDIARIES

 

AVERAGE BALANCE SHEETS (Unaudited)

(Dollars in thousands)

         
 

 For the Nine Months Ended September 30,

 
 

2013

   

2012

 
 

Average

 

Income/

 

Yield/

   

Average

 

Income/

 

Yield/

 
 

Balance

 

Expense

 

Cost

   

Balance

 

Expense

 

Cost

 

Interest-earning assets:

                         

Loans receivable (1),(2):

                         

Commercial and industrial

$

1,711,443

 

$

56,786

   

4.41

%

 

$

1,823,449

 

$

62,537

   

4.57

%

Home equity

 

198,688

   

5,709

   

3.82

     

218,278

   

6,683

   

4.08

 

Second mortgage

 

28,677

   

1,244

   

5.77

     

38,559

   

1,658

   

5.73

 

Residential real estate

 

312,496

   

8,176

   

3.48

     

169,989

   

5,241

   

4.11

 

Other

 

29,010

   

1,504

   

6.90

     

36,707

   

1,918

   

6.97

 

Total loans receivable

 

2,280,314

   

73,419

   

4.28

     

2,286,982

   

78,037

   

4.55

 

Investment securities (3)

 

405,124

   

6,192

   

2.03

     

547,968

   

9,858

   

2.40

 

Interest-earning bank balances

 

279,288

   

525

   

0.25

     

25,296

   

44

   

0.23

 

Total interest-earning assets

 

2,964,726

   

80,136

   

3.59

     

2,860,246

   

87,939

   

4.10

 

Non-interest earning assets:

                                     

  Cash and due from banks

 

72,025

                 

73,292

             

  Bank properties and equipment, net

 

49,375

                 

53,206

             

  Goodwill and intangible assets, net

 

40,314

                 

43,743

             

  Other assets

 

104,933

                 

111,242

             

Total non-interest-earning assets

 

266,647

                 

281,483

             

Total assets

$

3,231,373

               

$

3,141,729

             
                                       

Interest-bearing liabilities:

                                     

Interest-bearing deposit accounts:

                                     

Interest-bearing demand deposits

$

1,249,777

 

$

3,269

   

0.35

%

 

$

1,226,064

 

$

3,600

   

0.39

%

Savings deposits

 

268,488

   

648

   

0.32

     

263,091

   

671

   

0.34

 

Time deposits

 

676,742

   

4,856

   

0.95

     

638,259

   

6,139

   

1.28

 

Total interest-bearing deposit accounts

 

2,195,007

   

8,773

   

0.53

     

2,127,414

   

10,410

   

0.65

 

Short-term borrowings:

                                     

Federal funds purchased

 

-

   

-

   

-

     

7,263

   

19

   

0.35

 

FHLBNY advances

                     

6,715

   

41

   

0.81

 

Securities sold under agreements to repurchase - customers

 

1,920

   

2

   

0.14

     

5,797

   

6

   

0.14

 

Long-term borrowings:

                                     

FHLBNY advances (4)

 

61,073

   

955

   

2.08

     

20,421

   

526

   

3.43

 

Obligations under capital lease

 

7,503

   

375

   

6.65

     

7,770

   

386

   

6.62

 

Junior subordinated debentures

 

92,786

   

1,643

   

2.36

     

92,786

   

2,023

   

2.91

 

Total borrowings

 

163,282

   

2,975

   

2.42

     

140,752

   

3,001

   

2.84

 

Total interest-bearing liabilities

 

2,358,289

   

11,748

   

0.66

     

2,268,166

   

13,411

   

0.79

 

Non-interest bearing liabilities:

                                     

  Non-interest-bearing demand deposits

 

529,322

                 

495,279

             

  Other liabilities

 

81,477

                 

82,615

             

Total non-interest bearing liabilities

 

610,799

                 

577,894

             

Total liabilities

 

2,969,088

                 

2,846,060

             

Shareholders' equity 

 

262,285

                 

295,669

             

Total liabilities and shareholders' equity

$

3,231,373

               

$

3,141,729

             
                                       

Net interest income

     

$

68,388

               

$

74,528

       

Interest rate spread (5)

             

2.93

%

               

3.31

%

Net interest margin (6)

             

3.07

%

               

3.47

%

Ratio of average interest-earning assets to average interest-bearing liabilities

             

125.72

%

               

126.10

%

   

(1)  Average balances include non-accrual loans and loans held-for-sale.

 

(2)  Loan fees are included in interest income and the amount is not material for this analysis.

 

(3)  Interest earned on non-taxable investment securities is shown on a tax-equivalent basis assuming a 35% marginal federal tax rate for all periods. The fully taxable equivalent adjustments for the nine months ended September 30, 2013 and 2012 were $554 thousand and $661 thousand, respectively.

 

(4)  Amounts include Advances from FHLBNY and Securities sold under agreements to repurchase - FHLBNY.

 

(5)  Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.

 

(6)  Net interest margin represents net interest income as a percentage of average interest-earning assets.

 
                                               

 

 

SUN BANCORP, INC. AND SUBSIDIARIES

 

AVERAGE BALANCE SHEETS (Unaudited)

(Dollars in thousands)

         
 

 For the Three Months Ended

 
 

September 30, 2013

   

June 30, 2013

 
 

Average

 

Income/

 

Yield/

   

Average

 

Income/

 

Yield/

 
 

Balance

 

Expense

 

Cost

   

Balance

 

Expense

 

Cost

 

Interest-earning assets:

                         

Loans receivable (1),(2):

                         

Commercial and industrial

$

1,671,302

 

$

19,205

   

4.60

%

 

$

1,719,278

 

$

18,622

   

4.33

%

Home equity

 

194,622

   

1,892

   

3.89

     

197,237

   

1,911

   

3.88

 

Second mortgage

 

27,041

   

384

   

5.68

     

28,679

   

432

   

6.03

 

Residential real estate

 

299,667

   

2,620

   

3.50

     

307,248

   

2,485

   

3.24

 

Other

 

27,723

   

475

   

6.85

     

28,929

   

495

   

6.84

 

Total loans receivable

 

2,220,355

   

24,576

   

4.43

     

2,281,371

   

23,945

   

4.20

 

Investment securities(3)

 

414,189

   

2,157

   

2.08

     

373,311

   

1,751

   

1.88

 

Interest-earning bank balances

 

349,386

   

222

   

0.25

     

307,348

   

192

   

0.25

 

Total interest-earning assets

 

2,983,930

   

26,955

   

3.61

     

2,962,030

   

25,888

   

3.50

 

Non-interest earning assets:

                                     

  Cash and due from banks

 

72,336

                 

70,968

             

  Bank properties and equipment, net

 

48,590

                 

49,192

             

  Goodwill and intangible assets, net

 

39,717

                 

40,256

             

  Other assets

 

120,311

                 

99,660

             

Total non-interest-earning assets

 

280,954

                 

260,076

             

Total assets

$

3,264,884

               

$

3,222,106

             
                                       

Interest-bearing liabilities:

                                     

Interest-bearing deposit accounts:

                                     

Interest-bearing demand deposits

$

1,263,160

 

$

1,064

   

0.34

%

 

$

1,244,074

 

$

1,094

   

0.35

%

Savings deposits

 

270,394

   

213

   

0.32

     

269,624

   

220

   

0.33

 

Time deposits

 

663,582

   

1,536

   

0.93

     

677,743

   

1,632

   

0.96

 

Total interest-bearing deposit accounts

 

2,197,136

   

2,813

   

0.51

     

2,191,441

   

2,946

   

0.54

 

Short-term borrowings:

                                     

Federal funds purchased

 

-

   

-

   

-

     

-

   

-

   

-

 

Securities sold under agreements to repurchase - customers

 

555

   

-

   

-

     

2,304

   

1

   

0.17

 

Long-term borrowings:

                                     

FHLBNY advances (4)

 

61,011

   

321

   

2.10

     

61,051

   

318

   

2.08

 

Obligations under capital lease

 

7,435

   

124

   

6.67

     

7,504

   

125

   

6.66

 

Junior subordinated debentures

 

92,786

   

550

   

2.37

     

92,786

   

547

   

2.36

 

Total borrowings

 

161,787

   

995

   

2.46

     

163,645

   

991

   

2.42

 

Total interest-bearing liabilities

 

2,358,923

   

3,808

   

0.65

     

2,355,086

   

3,937

   

0.67

 

Non-interest bearing liabilities:

                                     

  Non-interest-bearing demand deposits

 

549,684

                 

531,210

             

  Other liabilities

 

95,576

                 

72,702

             

Total non-interest bearing liabilities

 

645,260

                 

603,912

             

Total liabilities

 

3,004,183

                 

2,958,998

             

Shareholders' equity 

 

260,701

                 

263,108

             

Total liabilities and shareholders' equity

$

3,264,884

               

$

3,222,106

             
                                       

Net interest income

     

$

23,147

               

$

21,951

       

Interest rate spread (5)

             

2.96

%

               

2.83

%

Net interest margin (6)

             

3.10

%

               

2.96

%

Ratio of average interest-earning assets to average interest-bearing liabilities

             

126.50

%

               

125.77

%

   

(1)  Average balances include non-accrual loans and loans held-for-sale.

 

(2)  Loan fees are included in interest income and the amount is not material for this analysis.

 

(3)  Interest earned on non-taxable investment securities is shown on a tax-equivalent basis assuming a 35% marginal federal tax rate for all periods. The fully taxable equivalent adjustments for the three months ended September 30, 2013 and June 30, 2013 were $167 thousand and $175 thousand, respectively.

 

(4)  Amounts include Advances from FHLBNY and Securities sold under agreements to repurchase - FHLBNY.

 

(5)  Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.

 

(6)  Net interest margin represents net interest income as a percentage of average interest-earning assets.

 
                                               

 

SOURCE Sun Bancorp, Inc.




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856-552-5019
hhardwick@sunnb.com

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