MOUNT LAUREL, N.J.,
April 27, 2015 /PRNewswire/ --
First Quarter Highlights
- Net income of $2.8 million for
the quarter ended March 31,
2015.
- Significant progress on branch efficiency improvement with the
eventual 39% reduction in locations by the end of 2015 since
June 2014, an expected 20% increase
in the average branch deposit size and an estimated $10 million annualized reduction in operating
expenses.
- Completed previously announced sale of seven Cape May area branch locations for a net gain
of $9.2 million.
- Recorded $3.3 million in
restructuring charges associated with the recently announced
consolidation of nine branches and sale of Hammonton branch to Cape Bank.
- Non-performing loans held for investment fell by $5.7 million, from $11.0
million, or 0.73% of gross loans held for investment at
December 31, 2014, to $5.4 million, or 0.36% of gross loans held for
investment at March 31,
2015.
- Excess liquidity remained elevated with average interest
bearing cash of $475.0 million,
however the period end balance was $355.0
million as liquidity deployment began late in the
quarter.
- Operating expenses, excluding restructuring charges, continue
to decline. The Company is nearing achievement of normalized
quarterly operating expenses below $20
million.
Sun Bancorp, Inc. (NASDAQ: SNBC) (the "Company"), the holding
company for Sun National Bank (the
"Bank"), reported today net income of $2.8
million, or $0.15 per diluted
share, for the quarter ended March 31,
2015, compared to a net loss of $2.8
million, or a loss of $0.15
per diluted share, for the quarter ended December 31, 2014 and a net loss of $1.9 million, or a loss of $0.11 per diluted share, for the quarter ended
March 31, 2014.
"We are generally pleased with the results of the first
quarter," said Thomas M. O'Brien,
President & CEO. "In addition to returning to
profitability, we continued the momentum in executing the
restructuring plan announced in July
2014, including substantial improvements in asset quality,
capital, expense management, branch rationalization and commercial
loan origination. We believe 2015 will continue to be a
transitional year as we begin to deliver on positive earnings. We
remain focused on building shareholder value, achieving full
compliance with our regulatory agreement, improving our operating
efficiency and creating a best-in-class commercial bank."
Discussion of Results:
Balance Sheet
During the quarter, total assets fell $280.4 million from December 31, 2014 due primarily to the completion
of the sale of seven branch locations in the Cape May, New Jersey market in March 2015 and deposit reductions. Total assets
were $2.43 billion at March 31, 2015, as compared to $2.72 billion at December
31, 2014 and $3.04 billion at
March 31, 2014. The Bank's
liquidity levels remain elevated, although cash and cash
equivalents decreased to $388.2
million at March 31, 2015, as
compared to $548.4 million at
December 31, 2014. The decrease of
$160.3 million in cash and cash
equivalents was primarily due to the completion of the
aforementioned branch sale as well as a planned run-off of certain
deposit accounts.
Gross loans held-for-investment totaled $1.48 billion at March 31,
2015, as compared to $1.51
billion at December 31, 2014
and $2.08 billion at March 31, 2014. The decline in gross loans
held-for-investment is due primarily to the Bank's new credit
discipline and its aggressive work out strategies. Additionally,
during the first quarter of 2015, the Bank began to see increased
loan originations primarily in commercial real estate by the Bank's
new commercial lending teams. The Bank also completed the purchase
of approximately $50 million of
in-market multi-family loan participations and loan originations
totaled $56 million in the first
quarter of 2015.
Deposits were $1.96 billion at
March 31, 2015, as compared to
$2.09 billion at December 31, 2014 and $2.57 billion at March 31,
2014. The total quarterly cost of deposits fell by seven
basis points to 0.28% in the first quarter of 2015 as compared to
0.35% in the first quarter of 2014 due to managed run-off of higher
yielding municipal accounts and the re-pricing of certain retail
deposits.
The Bank placed $4.8 million in
loans, $33.4 million in deposits and
$375 thousand of fixed assets into
held-for-sale at March 31, 2015
related to the pending sale of its Hammonton branch location to Cape Bank, which
is scheduled to close in the third quarter of 2015. The Bank
expects to record a gain on the sale of this location at closing.
As a result of this pending sale, expenses of $231 thousand were recognized in the first
quarter of 2015 to record the associated fixed assets to the lower
of cost of market.
"Now that our commercial lending platform is in place, as loan
demand continues to increase, we anticipate reducing the
opportunity cost of the excess liquidity, which is a critical piece
of our 2015 business plan," said O'Brien. "We continue to evaluate
quality commercial lending opportunities throughout the region. In
the first quarter, we originated $56
million in new loans and had $98
million in commitments scheduled to close in the second
quarter of 2015. Additionally, we committed to purchase
approximately $100 million in
metro-NYC area multi-family loan
participations, of which approximately $50
million closed at the end of the first quarter. The
remainder of the commitment will close in the second quarter."
Net Interest Income and Margin
The net interest margin declined 10 basis points to 2.57% for
the three months ended March 31, 2015
from 2.67% in the linked fourth quarter as average commercial loan
balances declined by $93.7 million,
or 8% over the quarter. While elevated liquidity levels continued
to pressure the net interest margin in the first quarter, loan
demand increased late in the quarter.
"Our overall net interest margin continues to be compressed,"
said O'Brien. "However, as our excess liquidity is deployed, we
project our margin to increase to be between 3.10% and 3.20%.
Because of our elevated liquidity position, we are able to take
advantage of opportunities that we believe will improve our net
interest margin."
Non-Interest Income
Non-interest income was $13.1
million for the quarter ended March
31, 2015, as compared to $4.1
million and $4.9 million for
the quarters ended December 31, 2014
and March 31, 2014, respectively. The
increase was primarily attributable to a $9.2 million gain on the sale of seven
Cape May area bank branches to
Sturdy Savings Bank. Offsetting this increase were declines in
deposit service charges and fees of $379
thousand and $391 thousand
from the quarters ended December 31,
2014 and March 31, 2014,
respectively, due to seasonal volume and the overall reduction in
accounts as a result of the aforementioned branch sale. The quarter
ended March 31, 2014 also included
net mortgage banking revenue of $635
thousand, compared to $0 in
the current quarter due to the prior year closure of the Company's
mortgage banking operations.
"With our branch network rationalized, we will begin to build a
relationship-based deposit-gathering strategy and as a result
anticipate generating deposit-related income from service charges,
cash management and related commercial banking products and
services," said O'Brien.
Non-Interest Expense
Non-interest expense for the first quarter of 2015 was
$25.2 million, an increase of
$1.5 million from the fourth quarter
of 2014 and a decrease of $2.7
million from the first quarter of 2014. During the first
quarter of 2015, the Company recorded several restructuring charges
related to the conclusion of the Bank's branch rationalization
efforts, including $3.3 million of
expenses associated with the pending branch consolidations and the
sale of our Hammonton branch
location. Contained in this charge was $2.1
million of fixed asset impairments, $1.1 million of lease vacancy costs and
$156 thousand of severance costs. For
the remainder of 2015, the Company expects to recognize
$1.3 million in accelerated
depreciation expenses representing the write-off of fixed assets at
branches scheduled for consolidation. The fourth quarter of 2014
included $2.3 million of lease
termination charges. In addition, snow removal costs due to the
harsh winter totaled $1.3 million for
the first quarter of 2015 as compared to $54
thousand in the fourth quarter of 2014 and $1.0 million in the first quarter of 2014. In the
first quarter of 2015, problem loan expense included $667 thousand of one-time costs associated with
loan sales. Excluding these items, the Company continues to
experience substantial declines in operating expenses.
"Excluding this quarter's restructuring charges, our quarterly
expense run rate continues to decrease," said O'Brien. "By
year-end, we anticipate achieving our stated objective of reducing
our annual expense base from its previous level of $130 million in 2013 to a less than $80 million run rate by the fourth quarter of
2015. This would represent an impressive reduction in operating
expenses of almost 40%. We are approaching both an expense base and
distribution model that is much more appropriate for an institution
of our size."
Asset Quality
Non-performing loans held-for-investment continued to decline in
the first quarter as the balance of non-performing loans
held-for-investment decreased by 51% to $5.4
million at March 31, 2015 as
compared to $11.0 million at
December 31, 2014 and 86% as compared
to $37.4 million at March 31, 2014. Non-performing loans
held-for-investment to total gross loans held-for-investment
declined to 0.36% at March 31, 2015
as compared to 0.73% at December 31,
2014 and 1.80% at March 31,
2014.
There was no provision expense recorded during the first quarter
of 2015 or in the linked quarter or the first quarter of 2014,
reflecting the Bank's substantially-improved asset quality metrics.
Net charge-offs were $2.6 million in
the first quarter of 2015 as compared to $3.3 million in the fourth quarter of 2014 and
$1.8 million in the first quarter of
2014. The net charge-offs in the first quarter of 2015 included
$3.5 million of consumer net
charge-offs due primarily to loan sale activity, partially offset
by $857 thousand of commercial loan
net recoveries. The allowance for loan losses was $20.6 million, or 1.39% of gross loans
held-for-investment, at March 31,
2015, as compared to $23.2
million, or 1.54% of gross loans held-for-investment, at
December 31, 2014 and $33.8 million, or 1.62% of gross loans
held-for-investment, at March 31,
2014. The allowance for loan losses was 383% of non-performing
loans held-for-investment at March 31,
2015 as compared to 210% at December
31, 2014 and 90% at March 31,
2014.
"Our strong coverage ratios and our low levels of problem loans
are a result of aggressive actions taken in recent quarters," said
O'Brien. "While we exited consumer lending in 2014, we are actively
managing the residential mortgage and home equity portfolios and in
this quarter, we charged off $2.4
million to further address this aggressively through loan
sales. Equally important, the Bank's classified loan portfolio,
which includes non-performing loans, declined to $8.5 million at March 31,
2015 as compared to $24.3
million at December 31, 2014
and $99.1 million at March 31, 2014. This 91% decline in the
classified loan portfolio within the past year validates the
importance of actions taken since the July
2014 restructuring announcement."
Capital
At March 31, 2015, the capital
ratios of the Company and the Bank increased due to planned balance
sheet runoff and net income of $2.8
million in the first quarter of 2015. At March 31, 2015, the Bank's Tier 1 common equity
risk-based capital ratio, total risk-based capital ratio, Tier 1
risk-based capital ratio and leverage capital ratio were
approximately 17.1%, 18.4%, 17.1% and 10.5%, respectively. At
March 31, 2015, the Company's Tier 1
common equity risk-based capital ratio, total risk-based capital
ratio, Tier 1 risk-based capital ratio and leverage capital ratio
were approximately 13.4%, 20.4%, 16.7%, and 10.3%,
respectively. The Company's tangible equity to tangible assets
ratio was 8.8% at March 31, 2015, as
compared to 7.7% at December 31, 2014
and 7.0% at March 31, 2014.
"The results of this quarter allowed us to generate positive
internal capital," said O'Brien. "That, along with declining total
assets and falling risk-weighted assets led to further increases in
already solid regulatory capital ratios. The dedicated management
and staff of Sun continue to work tirelessly to execute on the
strategic plan in total alignment with our commitments to
regulatory excellence and building shareholder value. The combined
efforts of the last several months from the board room to the
branches have demanded extraordinary efforts from all and the asset
quality metrics and net income in this announcement represent a
clear demonstration of the intensity of our collective commitment.
While there remains much remedial work to be done throughout the
balance of 2015, the early stage elements of a successful
turnaround are clearly evident."
Conference Call
The Company will hold a conference call on Monday, April 27, 2015 at 11:00 AM (EDT) to discuss results and answer
questions from analysts and investors. Participants may
listen to or participate in the Company's earnings conference call
via the following:
- Participants toll-free number: 888-713-3589
- Conference ID: 2173008
About Sun Bancorp, Inc.
Sun Bancorp, Inc. (NASDAQ: SNBC) is a $2.43 billion asset bank holding company
headquartered in Mount Laurel, New
Jersey. Its primary subsidiary is Sun National Bank, a community bank serving
customers throughout New Jersey.
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 the successful
implementation of our comprehensive strategic restructuring plan to
improve financial performance and capital, reduce costs, risk and
operating complexity, and the timing of the completion of the
transactions contemplated thereby, addressing the Company's
long-standing obstacles to earnings, regulatory compliance and
overall performance excellence, building a platform that can
support meaningful revenue generation and growth and through which
we can begin to deploy our excess cash balances into quality
commercial loans, our preparations for future loan growth, our
progress in building profitable deposit relationships with our
commercial and consumer clients and anticipated reductions in
non-interest expenses. These statements may be identified by such
words as "should," "expect," "believe," "view," "opportunity,"
"allow," "continues," "reflects," "typically," "usually,"
"anticipate" or similar words or variations of such terms.
Actual results and trends could differ materially from those set
forth in such statements and there can be no assurances that our
strategic restructuring plan will improve our financial
performance, improve our future capital levels, reduce our costs,
or reduce our risks or operating complexity; that our strategic
restructuring plan will be completed as and in the timeframes
anticipated; that we will adequately address long-standing
obstacles to earnings, regulatory compliance and overall
performance excellence; that we will build a platform that can
support meaningful revenue generation and growth and through which
we can deploy our excess cash balances into quality commercial
loans; that our preparations for future loan growth will be
successful; that we will continue to make progress in building
profitable deposit relationships with our commercial and consumer
clients; or that we will experience anticipated reductions in
non-interest expenses. We caution that such statements are subject
to a number of uncertainties. Factors that could cause actual
results to differ from those expressed or implied by such
forward-looking statements include, but are not limited to: (i)
competition among providers of financial services; (ii) changes in
laws and regulations, including without limitation changes in
capital requirements under the federal prompt corrective action
regulations; (iii) changes in business strategy or an inability to
execute strategy due to the occurrence of unanticipated events;
(iv) the failure to complete any or all of the transactions
contemplated in the Company's comprehensive strategic restructuring
plan on the terms currently contemplated; (v) failure to comply
with the Bank's agreement with the Office of the Comptroller of the
Currency (the "OCC"); (vi) the cost of compliance with the
agreement with the OCC; (vii) local, regional and national economic
conditions and events and the impact they may have on the Company,
the Bank and its customers; (viii) the ability to attract deposits
and other sources of liquidity; (ix) changes in the financial
performance and/or condition of the Bank's borrowers; (x) changes
in the level of non-performing and classified assets and
charge-offs; (xi) changes in estimates of future loan loss reserve
requirements based upon the periodic review thereof under relevant
regulatory and accounting requirements; (xii) inflation, interest
rate, securities market and monetary fluctuations; (xiii) changes
in consumer spending, borrowing and saving habits; (xiv) the
ability to increase market share and control expenses; (xv)
volatility in the credit and equity markets and its effect on the
general economy; (xvi) the effect of changes in accounting policies
and practices, as may be adopted by the regulatory agencies, as
well as the Public Company Accounting Oversight Board, the
Financial Accounting Standards Board and other accounting standard
setters; and (xvii) 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,
2014 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 tangible book value per common
share and return on average tangible equity, which are non-GAAP
financial measures. Management believes that tangible book value
per common share and return on average tangible equity are
meaningful financial measures because they are two of the measures
we use to assess capital adequacy.
Tangible book value per common share (dollars in
thousands)
The following reconciles shareholders' equity to tangible equity
by reducing shareholders' equity by the intangible asset balance at
March, 31, 2015, December 31, 2014,
September 30, 2014, June 30, 2014 and March
31, 2014.
|
March
31,
2015
|
|
December
31, 2014
|
|
September
30, 2014
|
|
June
30,
2014
|
|
March
31,
2014
|
|
|
|
|
|
|
|
|
|
|
Tangible book value
per common share:
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
$
|
249,235
|
|
$
|
245,323
|
|
$
|
247,047
|
|
$
|
227,656
|
|
$
|
248,898
|
Less:
Intangible assets
|
|
38,188
|
|
|
38,188
|
|
|
38,188
|
|
|
38,426
|
|
|
38,709
|
Tangible
equity
|
$
|
211,047
|
|
$
|
207,135
|
|
$
|
208,859
|
|
$
|
189,230
|
|
$
|
210,189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock
|
|
18,901
|
|
|
18,901
|
|
|
18,885
|
|
|
17,752
|
|
|
17,742
|
Less:
Treasury stock
|
|
282
|
|
|
285
|
|
|
300
|
|
|
319
|
|
|
389
|
Total outstanding
shares
|
|
18,619
|
|
|
18,616
|
|
|
18,585
|
|
|
17,433
|
|
|
17,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value
per common share:
|
$
|
11.34
|
|
$
|
11.13
|
|
$
|
11.24
|
|
$
|
10.85
|
|
$
|
12.11
|
Return on Average Tangible Equity (dollars in
thousands)
The following provides the calculation of return on tangible
equity for the three months ended March, 31, 2015, December 31, 2014, September 30, 2014, June
30, 2014 and March 31,
2014.
|
Three Months
Ended
|
|
March
31,
2015
|
|
December
31, 2014
|
|
September
30, 2014
|
|
June
30,
2014
|
|
March
31,
2014
|
|
|
|
|
|
|
|
|
|
|
Net
income(loss)
|
$
|
2,776
|
|
$
|
(2,829)
|
|
$
|
(825)
|
|
$
|
(24,248)
|
|
$
|
(1,906)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average tangible
equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
shareholders' equity
|
$
|
249,970
|
|
$
|
249,313
|
|
$
|
243,020
|
|
$
|
254,116
|
|
$
|
250,946
|
Less:
Average intangible assets
|
|
38,188
|
|
|
38,188
|
|
|
38,281
|
|
|
38,568
|
|
|
38,852
|
Average tangible
equity
|
$
|
211,782
|
|
$
|
211,125
|
|
$
|
204,739
|
|
$
|
215,548
|
|
$
|
212,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
tangible equity(1):
|
|
5.2
|
%
|
|
(5.4)
|
%
|
|
(1.6)
|
%
|
|
(45.0)
|
%
|
|
(3.6)%
|
SUN BANCORP, INC.
AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (Unaudited)
(Dollars in thousands, except share and per share
amounts)
|
|
|
|
|
For the Three Months
Ended
|
|
|
March
31,
|
|
December
31,
|
|
|
|
2015
|
|
2014
|
|
|
|
2014
|
|
Profitability for the
period:
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
$
|
15,191
|
|
$
|
21,392
|
|
|
|
|
$
|
17,026
|
|
Provision for loan losses
|
|
|
-
|
|
|
-
|
|
|
|
|
|
-
|
|
Non-interest income
|
|
|
13,087
|
|
|
4,949
|
|
|
|
|
|
4,142
|
|
Non-interest expense
|
|
|
25,218
|
|
|
27,888
|
|
|
|
|
|
23,705
|
|
Income(loss) before income taxes
|
|
|
3,060
|
|
|
(1,547)
|
|
|
|
|
|
(2,537)
|
|
Income tax expense
|
|
|
284
|
|
|
359
|
|
|
|
|
|
292
|
|
Net income(loss) available to common shareholders
|
|
$
|
2,776
|
|
$
|
(1,906)
|
|
|
|
|
$
|
(2,829)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets(1)
|
|
|
0.4
|
%
|
|
(0.3)
|
%
|
|
|
|
|
(0.4)
|
%
|
Return on average equity(1)
|
|
|
4.4
|
%
|
|
(3.0)
|
%
|
|
|
|
|
(4.5)
|
%
|
Return on average tangible equity(1),(2)
|
|
|
5.2
|
%
|
|
(3.6)
|
%
|
|
|
|
|
(5.4)
|
%
|
Net interest margin(1)
|
|
|
2.57
|
%
|
|
3.07
|
%
|
|
|
|
|
2.67
|
%
|
Efficiency ratio
|
|
|
89
|
%
|
|
106
|
%
|
|
|
|
|
112
|
%
|
Income(loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic(3)
|
|
$
|
0.15
|
|
$
|
(0.11)
|
|
|
|
|
$
|
(0.15)
|
|
Diluted(3)
|
|
$
|
0.15
|
|
$
|
(0.11)
|
|
|
|
|
$
|
(0.15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average equity to average assets
|
|
|
9.6
|
%
|
|
8.2
|
%
|
|
|
|
|
9.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
2015
|
2014
|
|
|
|
2014
|
|
At
period-end:
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
2,434,978
|
|
$
|
3,038,467
|
|
|
|
|
$
|
2,715,348
|
|
Total deposits
|
|
|
1,959,556
|
|
|
2,573,445
|
|
|
|
|
|
2.091,904
|
|
Loans receivable, net of allowance for loan losses
|
|
|
1,463,256
|
|
|
2,050,312
|
|
|
|
|
1,486,898
|
|
Loans held-for-sale
|
|
|
4,766
|
|
|
16,048
|
|
|
|
|
4,083
|
|
Branch assets
held-for-sale
|
|
|
5,267
|
|
|
-
|
|
|
|
|
69,064
|
|
Branch deposits
held-for-sale
|
|
|
33,381
|
|
|
-
|
|
|
|
|
183,395
|
|
Investments
|
|
|
382,083
|
|
|
456,724
|
|
|
|
|
409,950
|
|
Borrowings
|
|
|
67,857
|
|
|
68,645
|
|
|
|
|
68,978
|
|
Junior subordinated debentures
|
|
|
92,786
|
|
|
92,786
|
|
|
|
|
92,786
|
|
Shareholders' equity
|
|
|
249,235
|
|
|
248,898
|
|
|
|
|
245,323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit quality and
capital ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses to gross loans
held-for- investment
|
|
|
1.39
|
%
|
|
1.62
|
%
|
|
|
|
1.54
|
%
|
Non-performing loans held-for-investment to gross loans
held-for-investment
|
|
|
0.36
|
%
|
|
1.80
|
%
|
|
|
|
0.73
|
%
|
Non-performing assets to gross loans
held-for-investment, loans
held-for-sale and real estate
owned
|
|
|
0.71
|
%
|
|
1.91
|
%
|
|
|
|
1.03
|
%
|
Allowance for loan losses to non-performing loans
held-for-investment
|
|
|
383
|
%
|
|
90
|
%
|
|
|
|
210
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 common equity
risk-based capital(4)(5):
|
|
|
|
|
|
|
|
|
|
|
|
|
Sun
Bancorp, Inc.
|
|
|
13.4
|
%
|
|
-
|
|
|
|
|
-
|
|
Sun
National Bank
|
|
|
17.1
|
%
|
|
-
|
|
|
|
|
-
|
|
Total
risk-based capital(4):
|
|
|
|
|
|
|
|
|
|
|
|
|
Sun
Bancorp, Inc.
|
|
|
20.3
|
%
|
|
14.8
|
%
|
|
|
|
19.3
|
%
|
Sun
National Bank
|
|
|
18.4
|
%
|
|
14.1
|
%
|
|
|
|
17.4
|
%
|
Tier 1 risk-based
capital(4):
|
|
|
|
|
|
|
|
|
|
|
|
|
Sun
Bancorp, Inc.
|
|
|
16.7
|
%
|
|
12.8
|
%
|
|
|
|
16.7
|
%
|
Sun
National Bank
|
|
|
17.1
|
%
|
|
12.8
|
%
|
|
|
|
16.1
|
%
|
Leverage
capital(4):
|
|
|
|
|
|
|
|
|
|
|
|
|
Sun
Bancorp, Inc.
|
|
|
10.3
|
%
|
|
9.4
|
%
|
|
|
|
10.1
|
%
|
Sun
National Bank
|
|
|
10.5
|
%
|
|
9.4
|
%
|
|
|
|
9.7
|
%
|
Book value per common share (3)
|
|
$
|
13.39
|
|
$
|
14.34
|
|
|
|
$
|
13.18
|
|
Tangible book value per common share (3)
|
|
$
|
11.34
|
|
$
|
12.11
|
|
|
|
$
|
11.13
|
|
(1) Amounts for the
three months ended are annualized.
|
|
(2) Return on average
tangible equity, a non-GAAP measure, 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) Prior periods
were retroactively adjusted for the impact of the 1-for-5 reverse
stock split completed on August 11, 2014.
(4) March 31, 2015
capital ratios are estimated, subject to regulatory
filings.
(5) The Basel III
guidelines and the Dodd-Frank Act established a new minimum Tier 1
common equity risk-based capital ratio, effective January 1,
2015.
|
|
SUN BANCORP, INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION (Unaudited)
|
(Dollars in
thousands, except par value amounts)
|
|
March 31,
2015
|
|
December 31,
2014
|
|
ASSETS
|
|
|
|
|
Cash and due from
banks
|
$
|
33,161
|
|
$
|
42,548
|
|
Interest-earning bank
balances
|
|
355,012
|
|
|
505,885
|
|
Cash and cash
equivalents
|
|
388,173
|
|
|
548,433
|
|
Restricted
cash
|
|
13,000
|
|
|
13,000
|
|
Investment securities
available for sale (amortized cost of $365,599 and
$394,733 at March 31, 2015 and December 31, 2014,
respectively)
|
|
366,703
|
|
|
394,500
|
|
Investment securities
held to maturity (estimated fair value of $485 and $501 at
March 31, 2015 and December 31, 2014,
respectively)
|
|
475
|
|
|
489
|
|
Loans receivable (net
of allowance for loan losses of $20,597 and $23,246 at
March 31, 2015 and December 31, 2014,
respectively)
|
|
1,463,256
|
|
|
1,486,898
|
|
Loans held-for-sale,
at lower of cost or market
|
|
4,766
|
|
|
4,083
|
|
Branch assets
held-for-sale
|
|
5,267
|
|
|
69,064
|
|
Restricted equity
investments, at cost
|
|
14,905
|
|
|
14,961
|
|
Bank properties and
equipment, net
|
|
36,645
|
|
|
40,155
|
|
Real estate
owned
|
|
468
|
|
|
522
|
|
Accrued interest
receivable
|
|
4,859
|
|
|
5,397
|
|
Goodwill
|
|
38,188
|
|
|
38,188
|
|
Bank owned life
insurance (BOLI)
|
|
79,644
|
|
|
79,132
|
|
Other
assets
|
|
18,629
|
|
|
20,526
|
|
Total
assets
|
$
|
2,434,978
|
|
$
|
2,715,348
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Deposits
|
$
|
1,959,556
|
|
$
|
2,091,904
|
|
Branch deposits
held-for-sale
|
|
33,381
|
|
|
183,395
|
|
Securities sold under
agreements to repurchase – customers
|
|
156
|
|
|
1,156
|
|
Advances from the
Federal Home Loan Bank of New York (FHLBNY)
|
|
60,743
|
|
|
60,787
|
|
Obligations under
capital lease
|
|
6,958
|
|
|
7,035
|
|
Junior subordinated
debentures
|
|
92,786
|
|
|
92,786
|
|
Deferred taxes,
net
|
|
2,344
|
|
|
1,514
|
|
Other
liabilities
|
|
29,819
|
|
|
31,448
|
|
Total
liabilities
|
|
2,185,743
|
|
|
2,470,025
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
Preferred stock, $1
par value, 1,000,000 shares authorized; none issued
|
|
-
|
|
|
-
|
|
Common stock, $5 par
value, 40,000,000 shares authorized; 18,901,124 shares
issued and 18,618,630 shares outstanding at March 31, 2015;
18,900,877
shares issued and 18,615,950 shares outstanding at December
31, 2014
|
|
94,506
|
|
|
94,504
|
|
Additional paid-in
capital
|
|
514,337
|
|
|
514,075
|
|
Retained
deficit
|
|
(344,986)
|
|
|
(347,762)
|
|
Accumulated other
comprehensive loss
|
|
653
|
|
|
(138)
|
|
Deferred compensation
plan trust
|
|
(599)
|
|
|
(599)
|
|
Treasury stock at
cost, 282,494 shares at March 31, 2015; and 284,927
shares at
December 31, 2014
|
|
(14,676)
|
|
|
(14,757)
|
|
Total shareholders'
equity
|
|
249,235
|
|
|
245,323
|
|
Total liabilities and
shareholders' equity
|
$
|
2,434,978
|
|
$
|
2,715,348
|
|
SUN BANCORP, INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited)
|
(Dollars in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
Ended March 31,
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
INTEREST
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
|
|
|
|
|
|
$
|
15,098
|
|
$
|
21,849
|
|
Interest on taxable
investment securities
|
|
|
|
|
|
|
|
|
2,046
|
|
|
2,250
|
|
Interest on
non-taxable investment securities
|
|
|
|
|
|
|
|
|
306
|
|
|
309
|
|
Dividends on
restricted equity investments
|
|
|
|
|
|
|
|
|
209
|
|
|
232
|
|
Total interest
income
|
|
|
|
|
|
|
|
|
17,659
|
|
|
24,640
|
|
INTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
|
|
|
|
|
|
|
|
1,506
|
|
|
2,281
|
|
Interest on funds
borrowed
|
|
|
|
|
|
|
|
|
430
|
|
|
436
|
|
Interest on junior
subordinated debentures
|
|
|
|
|
|
|
|
|
532
|
|
|
531
|
|
Total interest
expense
|
|
|
|
|
|
|
|
|
2,468
|
|
|
3,248
|
|
Net interest
income
|
|
|
|
|
|
|
|
|
15,191
|
|
|
21,392
|
|
PROVISION FOR LOAN
LOSSES
|
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
Net interest income
after provision for loan losses
|
|
|
|
|
|
|
|
|
15,191
|
|
|
21,392
|
|
NON-INTEREST
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit service
charges and fees
|
|
|
|
|
|
|
|
|
2,004
|
|
|
2,395
|
|
Interchange
fees
|
|
|
|
|
|
|
|
|
544
|
|
|
563
|
|
Mortgage banking
revenue, net
|
|
|
|
|
|
|
|
|
-
|
|
|
635
|
|
Gain on sale of bank
branches
|
|
|
|
|
|
|
|
|
9,235
|
|
|
-
|
|
Investment products
income
|
|
|
|
|
|
|
|
|
589
|
|
|
617
|
|
BOLI income
|
|
|
|
|
|
|
|
|
512
|
|
|
461
|
|
Other
|
|
|
|
|
|
|
|
|
203
|
|
|
278
|
|
Total non-interest
income
|
|
|
|
|
|
|
|
|
13,087
|
|
|
4,949
|
|
NON-INTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
|
|
|
|
|
|
|
10,590
|
|
|
13,781
|
|
Occupancy
expense
|
|
|
|
|
|
|
|
|
4,967
|
|
|
4,266
|
|
Equipment
expense
|
|
|
|
|
|
|
|
|
3,514
|
|
|
1,749
|
|
Data processing
expense
|
|
|
|
|
|
|
|
|
1,308
|
|
|
1,197
|
|
Professional
fees
|
|
|
|
|
|
|
|
|
836
|
|
|
1,486
|
|
Insurance
expenses
|
|
|
|
|
|
|
|
|
1,247
|
|
|
1,467
|
|
Advertising
expense
|
|
|
|
|
|
|
|
|
235
|
|
|
586
|
|
Problem loan
expense
|
|
|
|
|
|
|
|
|
988
|
|
|
632
|
|
Other
|
|
|
|
|
|
|
|
|
1,533
|
|
|
2,724
|
|
Total non-interest
expense
|
|
|
|
|
|
|
|
|
25,218
|
|
|
27,888
|
|
INCOME(LOSS)
BEFORE INCOME TAXES
|
|
|
|
|
|
|
|
|
3,060
|
|
|
(1,547)
|
|
INCOME TAX
EXPENSE
|
|
|
|
|
|
|
|
|
284
|
|
|
359
|
|
NET INCOME(LOSS)
AVAILABLE TO COMMON SHAREHOLDERS
|
|
|
|
|
|
|
|
$
|
2,776
|
|
$
|
(1,906)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings(loss)
per share(1)
|
|
|
|
|
|
|
|
$
|
0.15
|
|
$
|
(0.11)
|
|
Diluted
earnings(loss) per share(1)
|
|
|
|
|
|
|
|
$
|
0.15
|
|
$
|
(0.11)
|
|
Weighted average
shares – basic(1)
|
|
|
|
|
|
18,616,537
|
|
17,348,169
|
|
Weighted average
shares - diluted(1)
|
|
|
|
|
|
18,639,501
|
|
17,348,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Prior periods
were retroactively adjusted for the impact of the 1-for-5 reverse
stock split completed on August 11, 2014
|
SUN BANCORP, INC.
AND SUBSIDIARIES
|
|
HISTORICAL TRENDS IN
QUARTERLY FINANCIAL DATA (Unaudited)
|
|
(Dollars in
thousands)
|
|
|
2015
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
|
Q1
|
|
Q4
|
|
Q3
|
|
Q2
|
|
Q1
|
|
Balance sheet at
quarter end:
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
388,173
|
|
$
|
548,433
|
|
$
|
504,353
|
|
$
|
330,440
|
|
$
|
282,095
|
|
Restricted
cash
|
|
13,000
|
|
|
13,000
|
|
|
13,000
|
|
|
26,000
|
|
|
26,000
|
|
Investment
securities
|
|
382,083
|
|
|
409,950
|
|
|
425,079
|
|
|
454,051
|
|
|
456,724
|
|
Loans
held-for-investment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
and industrial
|
|
1,042,821
|
|
|
1,052,932
|
|
|
1,196,767
|
|
|
1,363,900
|
|
|
1,519,993
|
|
Home
equity
|
|
161,471
|
|
|
174,165
|
|
|
173,227
|
|
|
186,953
|
|
|
208,248
|
|
Residential real estate
|
|
272,798
|
|
|
276,993
|
|
|
299,838
|
|
|
298,063
|
|
|
326,945
|
|
Other
|
|
6,763
|
|
|
6,054
|
|
|
6,577
|
|
|
7,200
|
|
|
28,894
|
|
Total gross loans held-for-investment
|
|
1,483,853
|
|
|
1,510,144
|
|
|
1,676,409
|
|
|
1,856,116
|
|
|
2,084,080
|
|
Allowance for loan
losses
|
|
(20,597)
|
|
|
(23,246)
|
|
|
(26,540)
|
|
|
(28,392)
|
|
|
(33,768)
|
|
Net loans held-for-investment
|
|
1,463,256
|
|
|
1,486,898
|
|
|
1,649,869
|
|
|
1,827,724
|
|
|
2,050,312
|
|
Loans
held-for-sale
|
|
4,766
|
|
|
4,083
|
|
|
7,365
|
|
|
29,171
|
|
|
16,048
|
|
Branch
assets held-for-sale
|
|
5,267
|
|
|
69,064
|
|
|
31,408
|
|
|
34,058
|
|
|
-
|
|
Goodwill
|
|
38,188
|
|
|
38,188
|
|
|
38,188
|
|
|
38,188
|
|
|
38,188
|
|
Intangible assets
|
|
-
|
|
|
-
|
|
|
-
|
|
|
238
|
|
|
521
|
|
Total assets
|
|
2,434,978
|
|
|
2,715,348
|
|
|
2,820,202
|
|
|
2,894,658
|
|
|
3,038,467
|
|
Total
deposits
|
|
1,956,556
|
|
|
2,091,904
|
|
|
2,170,627
|
|
|
2,272,765
|
|
|
2,573,445
|
|
Branch
deposits held-for-sale
|
|
33,381
|
|
|
183,395
|
|
|
192,068
|
|
|
160,769
|
|
|
-
|
|
Securities sold under
agreements to repurchase - customers
|
|
156
|
|
|
1,156
|
|
|
963
|
|
|
670
|
|
|
471
|
|
Advances from FHLBNY
|
|
60,743
|
|
|
60,787
|
|
|
60,830
|
|
|
60,873
|
|
|
60,915
|
|
Obligations under capital lease
|
|
6,958
|
|
|
7,035
|
|
|
7,111
|
|
|
7,191
|
|
|
7,259
|
|
Junior subordinated debentures
|
|
92,786
|
|
|
92,786
|
|
|
92,786
|
|
|
92,786
|
|
|
92,786
|
|
Total shareholders' equity
|
|
249,235
|
|
|
245,323
|
|
|
247,047
|
|
|
227,656
|
|
|
248,898
|
|
Quarterly average
balance sheet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
and industrial
|
$
|
1,051,610
|
|
$
|
1,145,297
|
|
$
|
1,292,705
|
|
$
|
1,480,491
|
|
$
|
1,560,442
|
|
Home
equity
|
|
183,753
|
|
|
196,841
|
|
|
201,754
|
|
|
210,068
|
|
|
211,915
|
|
Residential real estate
|
|
284,197
|
|
|
301,326
|
|
|
322,751
|
|
|
338,028
|
|
|
331,433
|
|
Other
|
|
3,233
|
|
|
3,391
|
|
|
3,755
|
|
|
23,196
|
|
|
25,014
|
|
Total gross loans
|
|
1,522,793
|
|
|
1,646,855
|
|
|
1,820,965
|
|
|
2,051,783
|
|
|
2,128,804
|
|
Securities and other interest-earning assets
|
|
867,633
|
|
|
923,909
|
|
|
840,541
|
|
|
694,529
|
|
|
677,850
|
|
Total interest-earning assets
|
|
2,390,426
|
|
|
2,570,764
|
|
|
2,661,506
|
|
|
2,746,312
|
|
|
2,806,654
|
|
Total assets
|
|
2,600,231
|
|
|
2,785,525
|
|
|
2,888,920
|
|
|
2,982,427
|
|
|
3,049,321
|
|
Non-interest-bearing demand deposits
|
|
559,793
|
|
|
608,396
|
|
|
612,775
|
|
|
573,290
|
|
|
559,606
|
|
Total
deposits
|
|
2,162,142
|
|
|
2,331,934
|
|
|
2,429,606
|
|
|
2,519,901
|
|
|
2,584,588
|
|
Total interest-bearing liabilities
|
|
1,763,062
|
|
|
1,885,250
|
|
|
1,978,480
|
|
|
2,108,103
|
|
|
2,186,394
|
|
Total shareholders' equity
|
|
249,970
|
|
|
249,313
|
|
|
243,020
|
|
|
254,116
|
|
|
250,946
|
|
Capital and credit
quality measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 common equity risk-based
capital (2))(3):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sun Bancorp,
Inc.
|
|
13.4
|
%
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Sun National
Bank
|
|
17.1
|
%
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total risk-based
capital (2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sun
Bancorp, Inc.
|
|
20.3
|
%
|
|
19.3
|
%
|
|
17.9
|
%
|
|
15.0
|
%
|
|
14.8
|
%
|
Sun
National Bank
|
|
18.4
|
%
|
|
17.4
|
%
|
|
16.2
|
%
|
|
14.5
|
%
|
|
14.1
|
%
|
Tier 1 risk-based capital (2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sun
Bancorp, Inc.
|
|
16.7
|
%
|
|
16.7
|
%
|
|
15.6
|
%
|
|
12.4
|
%
|
|
12.8
|
%
|
Sun
National Bank
|
|
17.1
|
%
|
|
16.1
|
%
|
|
14.9
|
%
|
|
13.2
|
%
|
|
12.8
|
%
|
Leverage capital (2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sun
Bancorp, Inc.
|
|
10.3
|
%
|
|
10.1
|
%
|
|
9.8
|
%
|
|
8.6
|
%
|
|
9.4
|
%
|
Sun
National Bank
|
|
10.5
|
%
|
|
9.7
|
%
|
|
9.4
|
%
|
|
9.1
|
%
|
|
9.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average equity to average assets
|
|
9.6
|
%
|
|
9.0
|
%
|
|
8.4
|
%
|
|
8.5
|
%
|
|
8.2
|
%
|
Allowance for loan losses to total gross loans
held-for-investment
|
|
1.39
|
%
|
|
1.54
|
%
|
|
1.58
|
%
|
|
1.50
|
%
|
|
1.62
|
%
|
Non-performing loans held-for-investment to gross loans
held-for-investment
|
|
0.36
|
%
|
|
0.73
|
%
|
|
0.84
|
%
|
|
0.76
|
%
|
|
1.80
|
%
|
Non-performing assets to gross loans held-for-investment, loans
held-for-sale and real estate owned
|
|
0.71
|
%
|
|
1.03
|
%
|
|
1.07
|
%
|
|
1.02
|
%
|
|
1.91
|
%
|
Allowance for loan losses to non-performing loans
held-for-investment
|
|
383
|
%
|
|
210
|
%
|
|
188
|
%
|
|
202
|
%
|
|
90
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
charge-offs
|
|
(2,648)
|
|
|
(3,294)
|
|
|
(1,852)
|
|
|
(20,179)
|
|
|
(1,768)
|
|
Classified
loans
|
|
8,461
|
|
|
24,261
|
|
|
21,022
|
|
|
33,077
|
|
|
99,078
|
|
Classified
assets
|
|
11,998
|
|
|
27,986
|
|
|
25,338
|
|
|
38,226
|
|
|
105,629
|
|
Non-performing
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-accrual loans
|
$
|
4,530
|
|
$
|
10,729
|
|
$
|
13,561
|
|
$
|
13,470
|
|
$
|
29,387
|
|
Non-accrual loans held-for-sale
|
|
4,766
|
|
|
4,083
|
|
|
2,770
|
|
|
4,086
|
|
|
-
|
|
Troubled
debt restructurings, non-accrual
|
|
854
|
|
|
318
|
|
|
528
|
|
|
583
|
|
|
8,017
|
|
Loans
past due 90 days and accruing
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
42
|
|
Real
estate owned, net
|
|
468
|
|
|
522
|
|
|
1,084
|
|
|
1,327
|
|
|
2,728
|
|
Total non-performing assets
|
$
|
10,618
|
|
|
15,652
|
|
|
17,943
|
|
$
|
19,466
|
|
$
|
40,174
|
|
(1) Average balances include
non-accrual loans and loans held-for-sale.
(2) March 31, 2015 capital
ratios are estimated, subject to regulatory filings.
(3) The Basel III guidelines
and the Dodd-Frank Act established a new minimum Tier 1 common
equity risk-based capital ratio, effective January 1,
2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUN BANCORP, INC.
AND SUBSIDIARIES
|
|
HISTORICAL TRENDS IN
QUARTERLY FINANCIAL DATA (Unaudited)
|
|
(Dollars in
thousands, except share and per share amounts)
|
|
|
2015
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
|
Q1
|
|
Q4
|
|
Q3
|
|
Q2
|
|
Q1
|
|
Profitability for the
quarter:
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
15,191
|
|
$
|
17,026
|
|
$
|
18,921
|
|
$
|
20,612
|
|
$
|
21,392
|
|
Provision for loan
losses
|
|
-
|
|
|
-
|
|
|
-
|
|
|
14,803
|
|
|
-
|
|
Non-interest
income
|
|
13,087
|
|
|
4,142
|
|
|
4,695
|
|
|
3,977
|
|
|
4,949
|
|
Non-interest expense
excluding
amortization of intangible assets
|
|
25,218
|
|
|
23,705
|
|
|
23,894
|
|
|
33,394
|
|
|
27,604
|
|
Amortization of
intangible assets
|
|
-
|
|
|
-
|
|
|
238
|
|
|
283
|
|
|
284
|
|
Income(loss) before
income taxes
|
|
3,060
|
|
|
(2,537)
|
|
|
(516)
|
|
|
(23,891))
|
|
|
(1,547)
|
|
Income tax
expense
|
|
284
|
|
|
292
|
|
|
309
|
|
|
357
|
|
|
359
|
|
Net income(loss)
available to common shareholders
|
$
|
2,776
|
|
$
|
(2,829)
|
)
|
$
|
(825)
|
|
$
|
(24,248)
|
|
$
|
(1,906)
|
|
Financial
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (1)
|
|
0.4
|
%
|
|
(0.4)
|
%
|
|
(0.1)
|
%
|
|
(3.3)
|
%
|
|
(0.3)
|
%
|
Return on average
equity (1)
|
|
4.4
|
%
|
|
(4.5)
|
%
|
|
(1.4)
|
%
|
|
(38.2)
|
%
|
|
(3.0)
|
%
|
Return on average
tangible equity (1),(2)
|
|
5.2
|
%
|
|
(5.4)
|
%
|
|
(1.6)
|
%
|
|
(45.0)
|
%
|
|
(3.6)
|
%
|
Net interest margin
(1)
|
|
2.57
|
%
|
|
2.67
|
%
|
|
2.87
|
%
|
|
3.03
|
%
|
|
3.07
|
%
|
Efficiency
ratio
|
|
89
|
%
|
|
112
|
%
|
|
95
|
%
|
|
137
|
%
|
|
106
|
%
|
Per share
data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income(loss) per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic(3)
|
$
|
0.15
|
|
$
|
(0.15)
|
|
$
|
(0.05)
|
|
$
|
(1.39)
|
|
$
|
(0.11)
|
|
Diluted(3)
|
$
|
0.15
|
|
$
|
(0.15)
|
|
$
|
(0.05)
|
|
$
|
(1.39)
|
|
$
|
(0.11)
|
|
Book
value(3)
|
$
|
13.39
|
|
$
|
13.18
|
|
$
|
13.29
|
|
$
|
13.06
|
|
$
|
14.34
|
|
Tangible book
value(3)
|
$
|
11.34
|
|
$
|
11.13
|
|
$
|
11.24
|
|
$
|
10.85
|
|
$
|
12.11
|
|
Average basic
shares(3)
|
18,616,537
|
|
18,589,717
|
|
17,949,643
|
|
17,417,829
|
|
17,348,169
|
|
Average diluted
shares(3)
|
18,639,501
|
|
18,589,717
|
|
17,949,643
|
|
17,417,829
|
|
17,348,169
|
|
Non-interest
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit service
charges and fees
|
$
|
2,004
|
|
$
|
2,383
|
|
$
|
2,541
|
|
$
|
2,463
|
|
$
|
2,395
|
|
Interchange
fees
|
|
544
|
|
|
540
|
|
|
624
|
|
|
629
|
|
|
563
|
|
Mortgage banking
revenue, net
|
|
-
|
|
|
29
|
|
|
423
|
|
|
529
|
|
|
635
|
|
Net gain on sale of
investment securities
|
|
-
|
|
|
-
|
|
|
-
|
|
|
50
|
|
|
-
|
|
Net gain on sale of
bank branches
|
|
9,235
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Investment products
income
|
|
589
|
|
|
480
|
|
|
635
|
|
|
715
|
|
|
617
|
|
BOLI income
|
|
512
|
|
|
482
|
|
|
484
|
|
|
469
|
|
|
461
|
|
Other
income
|
|
203
|
|
|
228
|
|
|
(42)
|
|
|
(878)
|
|
|
278
|
|
Total
non-interest income
|
$
|
13,087
|
|
$
|
4,142
|
|
$
|
4,695
|
|
$
|
3,977
|
|
$
|
4,949
|
|
Non-interest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and
employee benefits
|
$
|
10,590
|
|
$
|
9,412
|
|
$
|
11,818
|
|
$
|
16,803
|
|
$
|
13,781
|
|
Occupancy expense
|
|
4,967
|
|
|
5,432
|
|
|
2,980
|
|
|
3,552
|
|
|
4,266
|
|
Equipment expense
|
|
3,514
|
|
|
1,487
|
|
|
1,695
|
|
|
2,356
|
|
|
1,749
|
|
Data processing expense
|
|
1,308
|
|
|
1,202
|
|
|
1,299
|
|
|
1,281
|
|
|
1,197
|
|
Professional fees
|
|
836
|
|
|
1,225
|
|
|
1,423
|
|
|
2,353
|
|
|
1,486
|
|
Insurance expense
|
|
1,247
|
|
|
1,299
|
|
|
1,443
|
|
|
1,358
|
|
|
1,467
|
|
Advertising expense
|
|
235
|
|
|
386
|
|
|
567
|
|
|
523
|
|
|
586
|
|
Problem loan costs
|
|
988
|
|
|
547
|
|
|
294
|
|
|
566
|
|
|
632
|
|
Other expense
|
|
1,533
|
|
|
2,715
|
|
|
2,613
|
|
|
4,885
|
|
|
2,724
|
|
Total
non-interest expense
|
$
|
25,218
|
|
$
|
23,705
|
|
$
|
24,132
|
|
$
|
33,677
|
|
$
|
27,888
|
|
(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.
|
(3) Prior periods
were retroactively adjusted for the impact of the 1-for-5 reverse
stock split completed on August 11, 2014.
|
SUN BANCORP, INC.
AND SUBSIDIARIES
|
|
|
AVERAGE BALANCE
SHEETS (Unaudited)
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
For the
Three Months Ended March 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
Average
|
|
Income/
|
|
Yield/
|
|
|
Average
|
|
Income/
|
|
Yield/
|
|
|
|
Balance
|
|
Expense
|
|
Cost
|
|
|
Balance
|
|
Expense
|
|
Cost
|
|
|
Interest-earning
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable
(1),(2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
$
|
1,051,610
|
|
$
|
10,803
|
|
|
4.11
|
%
|
|
$
|
1,560,442
|
|
$
|
16,349
|
|
|
4.19
|
%
|
|
Home equity
|
|
183,753
|
|
|
1,848
|
|
|
4.46
|
|
|
|
211,915
|
|
|
2,119
|
|
|
4.53
|
|
|
Residential real
estate
|
|
284,197
|
|
|
2,399
|
|
|
3.38
|
|
|
|
331,433
|
|
|
2,958
|
|
|
3.57
|
|
|
Other
|
|
3,233
|
|
|
47
|
|
|
5.82
|
|
|
|
25,014
|
|
|
423
|
|
|
6.75
|
|
|
Total loans
receivable
|
|
1,522,793
|
|
|
15,097
|
|
|
3.97
|
|
|
|
2,128,804
|
|
|
21,849
|
|
|
4.11
|
|
|
Investment
securities(3)
|
|
392,642
|
|
|
2,430
|
|
|
2.48
|
|
|
|
457,737
|
|
|
2,818
|
|
|
2.50
|
|
|
Interest-earning bank
balances
|
|
474,991
|
|
|
297
|
|
|
0.25
|
|
|
|
220,113
|
|
|
139
|
|
|
0.25
|
|
|
Total interest-earning
assets
|
|
2,390,426
|
|
|
17,824
|
|
|
2.98
|
|
|
|
2,806,654
|
|
|
24,806
|
|
|
3.54
|
|
|
Non-interest earning
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due
from banks
|
|
46,718
|
|
|
|
|
|
|
|
|
|
43,942
|
|
|
|
|
|
|
|
|
Bank
properties and equipment, net
|
|
42,638
|
|
|
|
|
|
|
|
|
|
48,605
|
|
|
|
|
|
|
|
|
Goodwill and
intangible assets, net
|
|
38,188
|
|
|
|
|
|
|
|
|
|
38,852
|
|
|
|
|
|
|
|
|
Other
assets
|
|
82,261
|
|
|
|
|
|
|
|
|
|
87,868
|
|
|
|
|
|
|
|
|
Total
non-interest-earning assets
|
|
209,805
|
|
|
|
|
|
|
|
|
|
242,667
|
|
|
|
|
|
|
|
|
Total
assets
|
$
|
2,600,231
|
|
|
|
|
|
|
|
|
$
|
3,049,321
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposit accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
demand deposits
|
$
|
894,851
|
|
$
|
406
|
|
|
0.18
|
%
|
|
$
|
1,149,460
|
|
$
|
808
|
|
|
0.28
|
%
|
|
Savings
deposits
|
|
239,452
|
|
|
127
|
|
|
0.21
|
|
|
|
267,305
|
|
|
180
|
|
|
0.27
|
|
|
Time
deposits
|
|
468,046
|
|
|
973
|
|
|
0.83
|
|
|
|
608,217
|
|
|
1,293
|
|
|
0.85
|
|
|
Total interest-bearing
deposit accounts
|
|
1,602,349
|
|
|
1,506
|
|
|
0.38
|
|
|
|
2,024,982
|
|
|
2,281
|
|
|
0.45
|
|
|
Short-term
borrowings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fed Funds
Purchased
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
Securities sold under
agreements to repurchase - customers
|
|
175
|
|
|
-
|
|
|
-
|
|
|
|
404
|
|
|
-
|
|
|
-
|
|
|
Long-term
borrowings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FHLBNY advances
(4)
|
|
60,758
|
|
|
310
|
|
|
2.04
|
|
|
|
60,929
|
|
|
313
|
|
|
2.05
|
|
|
Obligations under
capital lease
|
|
6,994
|
|
|
120
|
|
|
6.86
|
|
|
|
7,293
|
|
|
123
|
|
|
6.75
|
|
|
Junior subordinated
debentures
|
|
92,786
|
|
|
533
|
|
|
2.30
|
|
|
|
92,786
|
|
|
531
|
|
|
2.29
|
|
|
Total
borrowings
|
|
160,713
|
|
|
963
|
|
|
2.40
|
|
|
|
161,412
|
|
|
967
|
|
|
2.40
|
|
|
Total interest-bearing
liabilities
|
|
1,763,062
|
|
|
2,469
|
|
|
0.56
|
|
|
|
2,186,394
|
|
|
3,248
|
|
|
0.59
|
|
|
Non-interest bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing demand deposits
|
|
559,793
|
|
|
|
|
|
|
|
|
|
559,606
|
|
|
|
|
|
|
|
Other
liabilities
|
|
27,406
|
|
|
|
|
|
|
|
|
|
52,375
|
|
|
|
|
|
|
|
|
Total non-interest
bearing liabilities
|
|
587,199
|
|
|
|
|
|
|
|
|
|
611,981
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
2,350,261
|
|
|
|
|
|
|
|
|
|
2,798,375
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
249,970
|
|
|
|
|
|
|
|
|
|
250,946
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
2,600,231
|
|
|
|
|
|
|
|
|
$
|
3,049,321
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
|
|
$
|
15,355
|
|
|
|
|
|
|
|
|
$
|
21,558
|
|
|
|
|
|
Interest rate spread
(5)
|
|
|
|
|
|
|
|
2.42
|
%
|
|
|
|
|
|
|
|
|
2.95
|
%
|
|
Net interest margin
(6)
|
|
|
|
|
|
|
|
2.57
|
%
|
|
|
|
|
|
|
|
|
3.07
|
%
|
|
Ratio of average
interest-earning assets to average interest-bearing
liabilities
|
|
|
|
|
|
|
|
136
|
%
|
|
|
|
|
|
|
|
|
128
|
%
|
|
|
|
|
(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 March 31, 2015 and 2014 were $164 thousand and $166
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
|
|
|
March 31,
2015
|
|
|
December 31,
2014
|
|
|
Average
|
|
Income/
|
|
Yield/
|
|
|
Average
|
|
Income/
|
|
Yield/
|
|
|
Balance
|
|
Expense
|
|
Cost
|
|
|
Balance
|
|
Expense
|
|
Cost
|
|
Interest-earning
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable
(1),(2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
$
|
1,051,610
|
|
$
|
10,803
|
|
|
4.11
|
%
|
|
$
|
1,145,297
|
|
$
|
12,600
|
|
|
4.40
|
%
|
Home equity
|
|
183,753
|
|
|
1,848
|
|
|
4.46
|
|
|
|
196,841
|
|
|
2,082
|
|
|
4.73
|
|
Residential real
estate
|
|
284,197
|
|
|
2,399
|
|
|
3.38
|
|
|
|
301,326
|
|
|
2,471
|
|
|
3.28
|
|
Other
|
|
3,233
|
|
|
47
|
|
|
5.82
|
|
|
|
3,391
|
|
|
51
|
|
|
6.02
|
|
Total loans
receivable
|
|
1,522,793
|
|
|
15,097
|
|
|
3.97
|
|
|
|
1,646,855
|
|
|
17,204
|
|
|
4.18
|
|
Investment
securities(3)
|
|
392,642
|
|
|
2,430
|
|
|
2.48
|
|
|
|
419,391
|
|
|
2,479
|
|
|
2.36
|
|
Interest-earning bank
balances
|
|
474,991
|
|
|
297
|
|
|
0.25
|
|
|
|
504,518
|
|
|
322
|
|
|
0.26
|
|
Total interest-earning
assets
|
|
2,390,426
|
|
|
17,824
|
|
|
2.98
|
|
|
|
2,570,764
|
|
|
20,005
|
|
|
3.11
|
|
Non-interest earning
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due
from banks
|
|
46,718
|
|
|
|
|
|
|
|
|
|
50,655
|
|
|
|
|
|
|
|
Bank
properties and equipment, net
|
|
42,638
|
|
|
|
|
|
|
|
|
|
44,802
|
|
|
|
|
|
|
|
Goodwill and
intangible assets, net
|
|
38,188
|
|
|
|
|
|
|
|
|
|
38,188
|
|
|
|
|
|
|
|
Other
assets
|
|
82,261
|
|
|
|
|
|
|
|
|
|
81,116
|
|
|
|
|
|
|
|
Total
non-interest-earning assets
|
|
209,805
|
|
|
|
|
|
|
|
|
|
214,761
|
|
|
|
|
|
|
|
Total
assets
|
$
|
2,600,231
|
|
|
|
|
|
|
|
|
$
|
2,785,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposit accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
demand deposits
|
$
|
894,851
|
|
$
|
406
|
|
|
0.18
|
%
|
|
$
|
953,805
|
|
$
|
565
|
|
|
0.24
|
%
|
Savings
deposits
|
|
239,452
|
|
|
127
|
|
|
0.21
|
|
|
|
246,876
|
|
|
151
|
|
|
0.24
|
|
Time
deposits
|
|
468,046
|
|
|
973
|
|
|
0.83
|
|
|
|
522,857
|
|
|
1,116
|
|
|
0.85
|
|
Total interest-bearing
deposit accounts
|
|
1,602,349
|
|
|
1,506
|
|
|
0.38
|
|
|
|
1,723,538
|
|
|
1,832
|
|
|
0.43
|
|
Short-term
borrowings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal funds
purchased
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Securities sold under
agreements to repurchase - customers
|
|
175
|
|
|
-
|
|
|
-
|
|
|
|
1,054
|
|
|
-
|
|
|
-
|
|
Long-term
borrowings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FHLBNY advances
(4)
|
|
60,758
|
|
|
310
|
|
|
2.04
|
|
|
|
60,802
|
|
|
317
|
|
|
2.09
|
|
Obligations under
capital lease
|
|
6,994
|
|
|
120
|
|
|
6.86
|
|
|
|
7,070
|
|
|
122
|
|
|
6.90
|
|
Junior subordinated
debentures
|
|
92,786
|
|
|
533
|
|
|
2.30
|
|
|
|
92,786
|
|
|
543
|
|
|
2.34
|
|
Total
borrowings
|
|
160,713
|
|
|
963
|
|
|
2.40
|
|
|
|
161,712
|
|
|
982
|
|
|
2.43
|
|
Total interest-bearing
liabilities
|
|
1,763,062
|
|
|
2,469
|
|
|
0.56
|
|
|
|
1,885,250
|
|
|
2,814
|
|
|
0.60
|
|
Non-interest bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing demand deposits
|
|
559,793
|
|
|
|
|
|
|
|
|
|
608,396
|
|
|
|
|
|
|
|
Other
liabilities
|
|
27,406
|
|
|
|
|
|
|
|
|
|
42,563
|
|
|
|
|
|
|
|
Total non-interest
bearing liabilities
|
|
587,199
|
|
|
|
|
|
|
|
|
|
650,959
|
|
|
|
|
|
|
|
Total
liabilities
|
|
2,350,261
|
|
|
|
|
|
|
|
|
|
2,536,209
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
249,970
|
|
|
|
|
|
|
|
|
|
249,313
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
2,600,231
|
|
|
|
|
|
|
|
|
$
|
2,785,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
|
|
$
|
15,355
|
|
|
|
|
|
|
|
|
$
|
17,191
|
|
|
|
|
Interest rate spread
(5)
|
|
|
|
|
|
|
|
2.42
|
%
|
|
|
|
|
|
|
|
|
2.51
|
%
|
Net interest margin
(6)
|
|
|
|
|
|
|
|
2.57
|
%
|
|
|
|
|
|
|
|
|
2.67
|
%
|
Ratio of average
interest-earning assets to average interest-bearing
liabilities
|
|
|
|
|
|
|
|
136
|
%
|
|
|
|
|
|
|
|
|
136
|
%
|
|
|
(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 March 31, 2015 and December 31, 2014 were $164
thousand and $165 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/sun-bancorp-inc-announces-1q-2015-earnings-reports-net-income-of-28-million-continued-strong-improvement-in-asset-quality-and-expense-management-300072225.html
SOURCE Sun Bancorp, Inc.