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| 8-K - FORM 8K PRESS RELEASE - SUN BANCORP INC /NJ/ | form8-k_pr.htm |
News Release
For Immediate Release
Contact: Robert B. Crowl, EVP, Chief Financial Officer (856) 691-7700
Sun Bancorp, Inc. Reports Second Quarter 2011 Results
VINELAND, NJ – July 26, 2011 – Sun Bancorp, Inc. (NASDAQ: SNBC) reported today a net loss available to common shareholders of $1.6 million, or a loss of $0.02 per diluted share, for the second quarter ended June 30, 2011, compared to a net loss available to common shareholders of $81.2 million, or a loss of $3.46 per diluted share, for the second quarter ended June 30, 2010.
The following are key items and events that occurred during the second quarter 2011:
● The Company successfully closed the previously reported sale of $174.3 million of loans to a third party investor in May 2011.
● Received an additional $10.8 million in stock proceeds during the second quarter of 2011 pursuant to the exercise of gross-up provisions contained in the security purchases agreements executed during the first quarter of 2010. The Company anticipates additional gross-up proceeds totaling $6.1 million to be closed during the third quarter.
● The net interest margin rose to 3.59% from 3.26% in the prior quarter on strength in asset yields and a reduction in funding costs.
● Net interest income rose 5.4% to $26.5 million as compared to $25.1 million in the linked quarter
● Total loans held-for-investment increased $46.3 million to $2.32 billion at June 30, 2011 as compared to $2.27 billion at March 31, 2011.
● Net charge-offs totaled $5.0 million in the second quarter versus $83.5 million in the linked quarter, $69.4 million of which related to the sale of commercial real estate loans.
“Decisive actions to improve the credit profile, reinforce the capital position and strengthen the balance sheet of Sun Bancorp resulted in another quarter of meaningful trends,” said Thomas X. Geisel, Sun’s President and Chief Executive Officer. “Our diligent efforts to restore the quality of our loan portfolio are paying off, and this past quarter, we saw an increase in both loans outstanding and new loan production. We also significantly improved our net interest margin and remain in a strong liquidity position. Progress takes time, but our cumulative improvements this year further validate our corporate strategy and ability to execute.”
-3-
Discussion of Results:
Balance Sheet
● Total assets were $3.21 billion at June 30, 2011, as compared to $3.33 billion at March 31, 2011 and $3.42 billion at December 31, 2010.
● Gross loans held-for-investment were $2.32 billion at June 30, 2011, as compared to $2.27 billion at March 31, 2011 and $2.52 billion at December 31, 2010. Compared to the linked quarter, loans held-for-investment grew $46.3 million.
● Gross loans held-for-sale decreased $95.0 million from the linked quarter to $20.5 million at June 30, 2011. This decrease was primarily attributable to the aforementioned loan sale, whereby $99.2 million of loans that were transferred to held-for-sale at fair value during the first quarter were sold. Offsetting this decrease was $4.2 million of growth in residential mortgages originated with the intent to sell.
● Total deposits at June 30, 2011 equaled $2.72 billion, as compared to $2.85 billion at March 31, 2011 and $2.94 billion at December 31, 2010. The decrease of $123.8 million, or 4.5%, over the linked quarter was primarily due to decreases in retail certificates of deposits and public funds interest checking balances of $59.4 and $59.5 million, respectively.
Net Interest Income and Margin
● On a tax equivalent basis, net interest income increased $1.3 million over the linked quarter to $26.9 million. The average cost of interest-bearing liabilities decreased 13 basis points to 0.96%. The average yield on interest-earning assets increased 21 basis points over the linked quarter from 4.15% to 4.36%, due primarily to an increase in commercial loan yields. The net interest margin was 3.59% for the second quarter as compared to 3.26% for the linked quarter and 3.62% for the comparable prior year quarter.
Non-Interest Income
● Non-interest income was $5.0 million for the quarter ended June 30, 2011, an increase of $9.1 million over the linked quarter loss of $4.1 million and $577,000 over the comparable prior year quarter. The increase over the linked quarter was primarily attributable to a decrease of $4.8 million of fair value credit adjustments taken on the Company’s derivative portfolio and an increase of $3.4 million of gains on the sale of securities.
Non-Interest Expense
● The Company incurred $28.2 million of operating non-interest expense in the second quarter of 2011, an increase of $462,000 over the linked quarter and $264,000 over the comparable prior year quarter. Included in the second quarter was approximately $845,000 of loan sale related expenses recorded in professional fees and other expenses. Advertising expenses increased $757,000 due to television and radio promotions and real estate owned expenses increased $640,000 due to updated appraisals and losses on the sale of property. Offsetting these increases was a decrease of $1.2 million of problem loan expenses due to the sale of non-performing loans and $752,000 of FDIC insurance expense declines resulting from reduced assessment rates.
Asset Quality
● The provision for loan losses for the second quarter was $4.8 million, as compared to $60.3 million in the linked quarter and $14.0 million in the comparable prior year quarter. The allowance for loan losses was $58.3 million at June 30, 2011, or 2.52% of gross loans held-for-investment, as compared to the allowance for loan losses to gross loans held-for-investment of 2.58% at March 31, 2011 and 3.24% at December 31, 2010. Net charge-offs recorded in the current quarter were $5.0 million, or 0.21% of average loans, as compared to $83.5 million, or 3.35% of average loans for the linked quarter and $3.5 million, or 0.13% of average loans outstanding for the comparable prior year quarter. Net charge-offs for the current quarter included $3.3 million related to one commercial relationship.
-4-
● Total non-performing assets were $143.5 million, or 6.13% of total gross loans held-for-investment, loans held-for-sale and real estate owned at June 30, 2011, as compared to $192.3 million, or 8.04% and $177.7 million, or 7.00%, respectively, at March 31, 2011 and December 31, 2010. Non-performing assets at June 30, 2011 included $11.3 million of loans held-for-sale. Non-performing loans decreased $47.6 million over the linked quarter to $140.2 million at June 30, 2011 from $187.8 million at March 31, 2011. This decrease was primarily due to the settlement of the loan sale, which reduced non-accrual loans held-for-sale by $60.5 million. Offsetting this decrease was the increase in non-accrual troubled debt restructurings of $14.3 million related to one commercial relationship.
Capital
● Stockholders’ equity totaled $298.8 million at June 30, 2011 compared to $286.7 million at March 31, 2011. During the second quarter 2011, the Company received an additional $10.8 million in stock proceeds pursuant to the exercise of gross-up provisions contained in the security purchase agreements executed during the first quarter of 2011. The Company’s tangible equity to tangible assets ratio was 7.95% at June 30, 2011, as compared to 7.27% at March 31, 2011 and 6.43% at June 30, 2010. At June 30, 2011, the Company’s total risk-based capital ratio, Tier 1 capital ratio and leverage capital ratio were approximately 14.51%, 13.14%, and 10.47%, respectively. At June 30, 2011, Sun National Bank’s total risk-based capital ratio, Tier 1 capital ratio and leverage capital ratio were approximately 12.97%, 11.71%, and 9.35%, respectively.
The Company will hold its regularly scheduled conference call on Wednesday, July 27, 2011, at 11:00 a.m. (ET). Participants may listen to the live web cast through the Sun Bancorp, Inc. web site at www.sunnb.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 Web site for two weeks following the call.
Sun Bancorp, Inc. (Nasdaq: SNBC) is a $3.21 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 65 locations in New Jersey. Sun National Bank has been named one of Forbes Magazine's "Most Trustworthy Companies" for five years running. The 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.sunnb.com.
The foregoing material contains forward-looking statements concerning the financial condition, results of operations and business of the Company. We caution that such statements are subject to a number of uncertainties and actual results could differ materially, and, 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
This release references tax-equivalent interest income and non-operating income and expenses. 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 June 30, 2011 and 2010 were $368,000 and $479,000, respectively. The fully taxable equivalent adjustments for the six months ended June 30, 2011 and 2010 were $777,000 and $1.0 million, respectively. The fully taxable equivalent adjustment for the three months ended March 31, 2011 was $409,000. Non-operating income and expenses are also non-GAAP financial measures. Non-operating income includes impairment losses recognized on available for sale securities included in earnings. Non-operating income for the three months ended March 31, 2011, December 31, 2010, and September 30, 2010 was $250,000, $379,000 and $950,000, respectively. There were no non-operating income items during the three months ended June 30, 2011 and 2010. Non-operating expense includes the goodwill impairment charge of $89.7 million recorded during the three months ended June 30, 2010.
-5-
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
|||||||||||||||||||||||||
|
FINANCIAL HIGHLIGHTS (Unaudited)
|
|||||||||||||||||||||||||
|
(Dollars in thousands, except per share amounts)
|
|||||||||||||||||||||||||
|
For the Three Months Ended
|
For the Six Months Ended
|
||||||||||||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
||||||||||||||||||||||
|
Profitability for the period:
|
|||||||||||||||||||||||||
|
Net interest income
|
$
|
26,492
|
$
|
28,180
|
$
|
51,618
|
$
|
55,803
|
|||||||||||||||||
|
Provision for loan losses
|
4,836
|
13,978
|
65,119
|
23,578
|
|||||||||||||||||||||
|
Non-interest income
|
4,993
|
4,416
|
894
|
10,067
|
|||||||||||||||||||||
|
Non-interest expense
|
28,244
|
117,686
|
56,026
|
143,762
|
|||||||||||||||||||||
|
Loss before income taxes
|
(1,595
|
)
|
(99,068
|
)
|
(68,633
|
)
|
(101,470
|
)
|
|||||||||||||||||
|
Net loss
|
(1,599
|
)
|
(81,170
|
)
|
(68,666
|
)
|
(81,932
|
)
|
|||||||||||||||||
|
Net loss available to common shareholders
|
$
|
(1,599
|
)
|
$
|
(81,170
|
)
|
$
|
(68,666
|
)
|
$
|
(81,932
|
)
|
|||||||||||||
|
Financial ratios:
|
|||||||||||||||||||||||||
|
Return on average assets(1)
|
(0.19)
|
%
|
(9.13)
|
%
|
(4.11)
|
%
|
(4.61)
|
%
|
|||||||||||||||||
|
Return on average equity(1)
|
(2.14)
|
%
|
(90.62)
|
%
|
(47.57)
|
%
|
(45.60)
|
%
|
|||||||||||||||||
|
Return on average tangible equity(1),(2)
|
(2.54)
|
%
|
(148.70)
|
%
|
(57.03)
|
%
|
(75.00)
|
%
|
|||||||||||||||||
|
Net interest margin(1)
|
3.59
|
%
|
3.62
|
%
|
3.43
|
%
|
3.59
|
%
|
|||||||||||||||||
|
Efficiency ratio
|
89.71
|
%
|
361.04
|
%
|
106.69
|
%
|
218.25
|
%
|
|||||||||||||||||
|
Efficiency ratio, excluding non-operating income and non-operating expense(3)
|
89.71
|
%
|
85.84
|
%
|
106.19
|
%
|
82.06
|
%
|
|||||||||||||||||
|
Loss per common share:
|
|||||||||||||||||||||||||
|
Basic
|
$
|
(0.02
|
)
|
$
|
(3.46
|
)
|
$
|
(1.01
|
)
|
$
|
(3.50
|
)
|
|||||||||||||
|
Diluted
|
$
|
(0.02
|
)
|
$
|
(3.46
|
)
|
$
|
(1.01
|
)
|
$
|
(3.50
|
)
|
|||||||||||||
|
Average equity to average assets
|
9.11
|
%
|
10.08
|
%
|
8.64
|
%
|
10.11
|
%
|
|||||||||||||||||
|
June 30,
|
December 31,
|
||||||||||||
|
2011
|
2010
|
2010
|
|||||||||||
|
At period-end:
|
|||||||||||||
|
Total assets
|
$
|
3,213,790
|
$
|
3,512,310
|
$
|
3,417,546
|
|||||||
|
Total deposits
|
2,723,676
|
2,961,816
|
2,940,460
|
||||||||||
|
Loans receivable, net of allowance for loan losses
|
2,258,279
|
2,660,772
|
2,439,633
|
||||||||||
|
Loans held-for-sale(4)
|
20,514
|
10,980
|
13,824
|
||||||||||
|
Investments
|
478,814
|
428,362
|
493,493
|
||||||||||
|
Borrowings
|
33,106
|
81,986
|
33,417
|
||||||||||
|
Junior subordinated debentures
|
92,786
|
92,786
|
92,786
|
||||||||||
|
Shareholders’ equity
|
298,819
|
273,161
|
268,242
|
||||||||||
|
Credit quality and capital ratios:
|
|||||||||||||
|
Allowance for loan losses to gross loans held-for-investment
|
2.52
|
%
|
2.70
|
%
|
3.24
|
%
|
|||||||
|
Non-performing assets to gross loans held-for-investment, loans held-for-sale and real estate owned
|
6.13
|
%
|
4.62
|
%
|
7.00
|
%
|
|||||||
|
Allowance for loan losses to non-performing loans held-for-investment
|
45.25
|
%
|
59.87
|
%
|
47.02
|
%
|
|||||||
|
Total capital (to risk-weighted assets):
|
|||||||||||||
|
Sun Bancorp, Inc.
|
14.51
|
%
|
11.09
|
%
|
12.68
|
%
|
|||||||
|
Sun National Bank
|
12.97
|
%
|
10.64
|
%
|
12.25
|
%
|
|||||||
|
Tier 1 capital (to risk-weighted assets):
|
|||||||||||||
|
Sun Bancorp, Inc.
|
13.14
|
%
|
9.82
|
%
|
11.41
|
%
|
|||||||
|
Sun National Bank
|
11.71
|
%
|
9.37
|
%
|
10.98
|
%
|
|||||||
|
Leverage ratio:
|
|||||||||||||
|
Sun Bancorp, Inc.
|
10.47
|
%
|
8.60
|
%
|
8.93
|
%
|
|||||||
|
Sun National Bank
|
9.35
|
%
|
8.22
|
%
|
8.57
|
%
|
|||||||
|
Book value per common share
|
$
|
3.60
|
$
|
11.63
|
$
|
5.33
|
|||||||
|
Tangible book value per common share
|
$
|
3.03
|
$
|
9.48
|
$
|
4.36
|
|||||||
|
(1) Amounts for the three and six 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) Efficiency ratio, excluding non-operating income and non-operating expense, is computed by dividing non-interest expense for the period by the summation of net interest income and non-interest income. Non-interest income for the six months ended June 30, 2011 excludes net impairment losses on available for sale securities of $250,000. Non-interest expense for the three and six months ended June 30, 2010 excludes a goodwill impairment charge of $89.7 million.
|
|||||||||||||
|
(4) Amount at June 30, 2011 includes $11.3 million of commercial real estate loans marked at fair value.
|
|||||||||||||
-6-
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
||||||
|
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
|
||||||
|
(Dollars in thousands, except par value amounts)
|
||||||
|
June 30, 2011
|
December 31, 2010
|
|||||
|
ASSETS
|
||||||
|
Cash and due from banks
|
$
|
77,107
|
$
|
36,522
|
||
|
Interest-earning bank balances
|
115,538
|
150,704
|
||||
|
Cash and cash equivalents
|
192,645
|
187,226
|
||||
|
Investment securities available for sale (amortized cost of $461,848 and $483,255 at June 30, 2011 and December 31, 2010, respectively)
|
460,965
|
472,864
|
||||
|
Investment securities held to maturity (estimated fair value of $2,199 and $3,155 at June 30, 2011 and December 31, 2010, respectively)
|
2,115
|
3,039
|
||||
|
Loans receivable (net of allowance for loan losses of $58,328 and $81,713 at June 30, 2011 and December 31, 2010, respectively)
|
2,258,279
|
2,439,633
|
||||
|
Loans held-for-sale
|
20,514
|
13,824
|
||||
|
Restricted equity investments
|
15,734
|
17,590
|
||||
|
Bank properties and equipment, net
|
55,114
|
53,428
|
||||
|
Real estate owned
|
3,306
|
3,913
|
||||
|
Accrued interest receivable
|
8,488
|
10,004
|
||||
|
Goodwill
|
38,188
|
38,188
|
||||
|
Intangible assets
|
8,789
|
10,631
|
||||
|
Deferred taxes, net
|
361
|
4,245
|
||||
|
Bank owned life insurance (BOLI)
|
75,762
|
74,656
|
||||
|
Other assets
|
73,530
|
88,305
|
||||
|
Total assets
|
$
|
3,213,790
|
$
|
3,417,546
|
||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||
|
Liabilities:
|
||||||
|
Deposits
|
$
|
2,723,676
|
$
|
2,940,460
|
||
|
Securities sold under agreements to repurchase – customers
|
6,743
|
6,307
|
||||
|
Advances from the Federal Home Loan Bank of New York (FHLBNY)
|
3,372
|
3,999
|
||||
|
Securities sold under agreements to repurchase – FHLBNY
|
15,000
|
15,000
|
||||
|
Obligations under capital lease
|
7,991
|
8,111
|
||||
|
Junior subordinated debentures
|
92,786
|
92,786
|
||||
|
Other liabilities
|
65,403
|
82,641
|
||||
|
Total liabilities
|
2,914,971
|
3,149,304
|
||||
|
Shareholders’ equity:
|
||||||
|
Preferred stock, $1 par value, 1,000,000 shares authorized; none issued
|
-
|
-
|
||||
|
Common stock, $1 par value, 100,000,000 shares authorized; 85,159,810 shares issued and 83,053,087 shares outstanding at June 30, 2011; 52,463,594 shares issued and 50,356,871 shares outstanding at December 31, 2010
|
85,160
|
52,464
|
||||
|
Additional paid-in capital
|
499,176
|
438,335
|
||||
|
Retained deficit
|
(258,681
|
)
|
(190,015
|
)
|
||
|
Accumulated other comprehensive loss
|
(523
|
)
|
(6,146
|
)
|
||
|
Deferred compensation plan trust
|
(151
|
)
|
(234
|
)
|
||
|
Treasury stock at cost, 2,106,723 shares at June 30, 2011 and December 31, 2010
|
(26,162
|
)
|
(26,162
|
)
|
||
|
Total shareholders’ equity
|
298,819
|
268,242
|
||||
|
Total liabilities and shareholders’ equity
|
$
|
3,213,790
|
$
|
3,417,546
|
||
-7-
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
||||||||||||||||
|
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
|
||||||||||||||||
|
(Dollars in thousands, except per share amounts)
|
||||||||||||||||
|
For the Three Months Ended June 30,
|
For the Six Months Ended June 30,
|
|||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||
|
INTEREST INCOME
|
||||||||||||||||
|
Interest and fees on loans
|
$
|
28,538
|
$
|
32,926
|
$
|
56,966
|
$
|
65,312
|
||||||||
|
Interest on taxable investment securities
|
2,864
|
2,850
|
5,483
|
6,039
|
||||||||||||
|
Interest on non-taxable investment securities
|
683
|
888
|
1,442
|
1,893
|
||||||||||||
|
Dividends on restricted equity investments
|
220
|
206
|
463
|
433
|
||||||||||||
|
Total interest income
|
32,305
|
36,870
|
64,354
|
73,677
|
||||||||||||
|
INTEREST EXPENSE
|
||||||||||||||||
|
Interest on deposits
|
4,808
|
7,236
|
10,398
|
14,863
|
||||||||||||
|
Interest on funds borrowed
|
356
|
431
|
711
|
980
|
||||||||||||
|
Interest on junior subordinated debentures
|
649
|
1,023
|
1,627
|
2,031
|
||||||||||||
|
Total interest expense
|
5,813
|
8,690
|
12,736
|
17,874
|
||||||||||||
|
Net interest income
|
26,492
|
28,180
|
51,618
|
55,803
|
||||||||||||
|
PROVISION FOR LOAN LOSSES
|
4,836
|
13,978
|
65,119
|
23,578
|
||||||||||||
|
Net Interest income (loss) after provision for loan losses
|
21,656
|
14,202
|
(13,501
|
)
|
32,225
|
|||||||||||
|
NON-INTEREST INCOME
|
||||||||||||||||
|
Service charges on deposit accounts
|
2,702
|
3,044
|
5,252
|
5,988
|
||||||||||||
|
Other service charges
|
88
|
99
|
174
|
178
|
||||||||||||
|
Gain on sale of loans
|
708
|
712
|
1,633
|
1,315
|
||||||||||||
|
Impairment losses on available for sale securities
|
-
|
-
|
(250
|
)
|
-
|
|||||||||||
|
Gain on sale of investment securities
|
2,421
|
145
|
1,408
|
145
|
||||||||||||
|
Investment products income
|
1,010
|
792
|
1,898
|
1,395
|
||||||||||||
|
BOLI income
|
560
|
539
|
1,106
|
1,077
|
||||||||||||
|
Derivative credit valuation adjustment
|
(3,624
|
)
|
(1,980
|
)
|
(12,015
|
)
|
(2,011
|
)
|
||||||||
|
Other
|
1,128
|
1,065
|
1,688
|
1,980
|
||||||||||||
|
Total non-interest income
|
4,993
|
4,416
|
894
|
10,067
|
||||||||||||
|
NON-INTEREST EXPENSE
|
||||||||||||||||
|
Salaries and employee benefits
|
12,885
|
14,361
|
25,871
|
27,220
|
||||||||||||
|
Occupancy expense
|
3,305
|
2,895
|
6,709
|
6,435
|
||||||||||||
|
Equipment expense
|
1,903
|
1,750
|
3,585
|
3,486
|
||||||||||||
|
Data processing expense
|
1,111
|
1,101
|
2,176
|
2,187
|
||||||||||||
|
Amortization of intangible assets
|
921
|
921
|
1,842
|
1,842
|
||||||||||||
|
Goodwill impairment
|
-
|
89,706
|
-
|
89,706
|
||||||||||||
|
Insurance expense
|
1,261
|
2,020
|
3,274
|
3,527
|
||||||||||||
|
Professional fees
|
1,215
|
459
|
1,980
|
1,043
|
||||||||||||
|
Advertising expense
|
1,322
|
532
|
1,887
|
1,112
|
||||||||||||
|
Problem loan expense
|
1,863
|
1,461
|
4,970
|
2,284
|
||||||||||||
|
Real estate owned expense, net
|
635
|
94
|
630
|
310
|
||||||||||||
|
Office supplies expense
|
324
|
421
|
669
|
786
|
||||||||||||
|
Other
|
1,499
|
1,965
|
2,433
|
3,824
|
||||||||||||
|
Total non-interest expense
|
28,244
|
117,686
|
56,026
|
143,762
|
||||||||||||
|
LOSS BEFORE INCOME TAXES
|
(1,595
|
)
|
(99,068
|
)
|
(68,633
|
)
|
(101,470
|
)
|
||||||||
|
INCOME TAX EXPENSE (BENEFIT)
|
4
|
(17,898
|
)
|
33
|
(19,538
|
)
|
||||||||||
|
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS
|
$
|
(1,599
|
)
|
$
|
(81,170
|
)
|
$
|
(68,666
|
)
|
$
|
(81,932
|
)
|
||||
|
Basic loss per share
|
$
|
(0.02
|
)
|
$
|
(3.46
|
)
|
$
|
(1.01
|
)
|
$
|
(3.50
|
)
|
||||
|
Diluted loss per share
|
$
|
(0.02
|
)
|
$
|
(3.46
|
)
|
$
|
(1.01
|
)
|
$
|
(3.50
|
)
|
||||
|
Weighted average shares – basic
|
82,585,859
|
23,431,305
|
68,160,742
|
23,398,538
|
||||||||||||
|
Weighted average shares - diluted
|
82,585,859
|
23,431,305
|
68,160,742
|
23,398,538
|
||||||||||||
-8-
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
|||||||||||||||
|
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
|
|||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||
|
2011
|
2011
|
2010
|
2010
|
2010
|
|||||||||||
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
|||||||||||
|
Balance sheet at quarter end:
|
|||||||||||||||
|
Cash and cash equivalents
|
$
|
192,645
|
$
|
266,504
|
$
|
187,226
|
$
|
205,265
|
$
|
52,810
|
|||||
|
Investment securities
|
478,814
|
470,546
|
493,493
|
479,055
|
428,362
|
||||||||||
|
Loans held-for-investment:
|
|||||||||||||||
|
Commercial and industrial
|
1,905,628
|
1,862,903
|
2,103,492
|
2,235,715
|
2,289,148
|
||||||||||
|
Home equity
|
234,688
|
232,318
|
239,729
|
244,274
|
252,425
|
||||||||||
|
Second mortgage
|
47,920
|
50,388
|
53,912
|
58,305
|
61,941
|
||||||||||
|
Residential real estate
|
75,546
|
69,311
|
65,250
|
68,938
|
68,054
|
||||||||||
|
Other
|
52,825
|
55,402
|
58,963
|
58,930
|
62,956
|
||||||||||
|
Total gross loans held-for-investment
|
2,316,607
|
2,270,322
|
2,521,346
|
2,666,162
|
2,734,524
|
||||||||||
|
Allowance for loan losses
|
(58,328
|
)
|
(58,498
|
)
|
(81,713
|
)
|
(74,579
|
)
|
(73,752
|
)
|
|||||
|
Net loans held-for-investment
|
2,258,279
|
2,211,824
|
2,439,633
|
2,591,583
|
2,660,772
|
||||||||||
|
Loans held-for-sale
|
20,514
|
115,473
|
13,824
|
16,616
|
10,980
|
||||||||||
|
Goodwill
|
38,188
|
38,188
|
38,188
|
38,188
|
38,188
|
||||||||||
|
Intangible assets
|
8,789
|
9,710
|
10,631
|
11,552
|
12,474
|
||||||||||
|
Total assets
|
3,213,790
|
3,333,808
|
3,417,546
|
3,603,637
|
3,512,310
|
||||||||||
|
Total deposits
|
2,723,676
|
2,847,467
|
2,940,460
|
3,051,894
|
2,961,816
|
||||||||||
|
Federal funds purchased
|
-
|
-
|
-
|
-
|
37,000
|
||||||||||
|
Securities sold under agreements to repurchase - customers
|
6,743
|
6,591
|
6,307
|
15,702
|
17,156
|
||||||||||
|
Advances from FHLBNY
|
3,372
|
3,687
|
3,999
|
4,308
|
4,613
|
||||||||||
|
Securities sold under agreements to repurchase - FHLBNY
|
15,000
|
15,000
|
15,000
|
15,000
|
15,000
|
||||||||||
|
Obligations under capital lease
|
7,991
|
8,051
|
8,111
|
8,169
|
8,217
|
||||||||||
|
Junior subordinated debentures
|
92,786
|
92,786
|
92,786
|
92,786
|
92,786
|
||||||||||
|
Total shareholders' equity
|
298,819
|
286,739
|
268,242
|
303,038
|
273,161
|
||||||||||
|
Quarterly average balance sheet:
|
|||||||||||||||
|
Loans(1):
|
|||||||||||||||
|
Commercial and industrial
|
$
|
1,936,621
|
$
|
2,072,519
|
$
|
2,184,212
|
$
|
2,292,274
|
$
|
2,262,656
|
|||||
|
Home equity
|
234,451
|
235,962
|
241,510
|
250,033
|
256,697
|
||||||||||
|
Second mortgage
|
50,257
|
53,402
|
57,310
|
60,729
|
64,051
|
||||||||||
|
Residential real estate
|
76,816
|
73,662
|
88,144
|
82,094
|
74,427
|
||||||||||
|
Other
|
52,831
|
55,847
|
57,522
|
59,998
|
62,249
|
||||||||||
|
Total gross loans
|
2,350,976
|
2,491,392
|
2,628,698
|
2,745,128
|
2,720,080
|
||||||||||
|
Securities and other interest-earning assets
|
643,808
|
639,092
|
658,013
|
518,262
|
450,947
|
||||||||||
|
Total interest-earning assets
|
2,994,784
|
3,130,484
|
3,286,711
|
3,263,390
|
3,171,027
|
||||||||||
|
Total assets
|
3,287,485
|
3,394,139
|
3,582,647
|
3,578,296
|
3,554,630
|
||||||||||
|
Non-interest-bearing demand deposits
|
491,235
|
481,605
|
509,093
|
505,036
|
471,033
|
||||||||||
|
Total deposits
|
2,774,767
|
2,904,448
|
3,032,594
|
3,043,268
|
2,957,970
|
||||||||||
|
Total interest-bearing liabilities
|
2,409,629
|
2,549,566
|
2,657,984
|
2,683,915
|
2,640,155
|
||||||||||
|
Total shareholders' equity
|
299,427
|
277,808
|
297,118
|
287,897
|
358,300
|
||||||||||
|
Capital and credit quality measures:
|
|||||||||||||||
|
Total capital (to risk-weighted assets):
|
|||||||||||||||
|
Sun Bancorp, Inc.
|
14.51
|
%
|
13.73
|
%
|
12.68
|
%
|
12.92
|
%
|
11.09
|
%
|
|||||
|
Sun National Bank
|
12.97
|
%
|
12.65
|
%
|
12.25
|
%
|
12.04
|
%
|
10.64
|
%
|
|||||
|
Tier 1 capital (to risk-weighted assets):
|
|||||||||||||||
|
Sun Bancorp, Inc.
|
13.14
|
%
|
12.11
|
%
|
11.41
|
%
|
8.02
|
%
|
9.82
|
%
|
|||||
|
Sun National Bank
|
11.71
|
%
|
11.38
|
%
|
10.98
|
%
|
10.77
|
%
|
9.37
|
%
|
|||||
|
Leverage ratio:
|
|||||||||||||||
|
Sun Bancorp, Inc.
|
10.47
|
%
|
9.62
|
%
|
8.93
|
%
|
6.67
|
%
|
8.60
|
%
|
|||||
|
Sun National Bank
|
9.35
|
%
|
9.05
|
%
|
8.57
|
%
|
8.91
|
%
|
8.22
|
%
|
|||||
|
Average equity to average assets
|
9.11
|
%
|
8.18
|
%
|
8.29
|
%
|
8.05
|
%
|
10.08
|
%
|
|||||
|
Allowance for loan losses to total gross loans held-for-investment
|
2.52
|
%
|
2.58
|
%
|
3.24
|
%
|
2.80
|
%
|
2.70
|
%
|
|||||
|
Non-performing assets to gross loans held-for-investment, loans held-for-sale and real estate owned
|
6.13
|
%
|
8.04
|
%
|
7.00
|
%
|
7.77
|
%
|
4.62
|
%
|
|||||
|
Allowance for loan losses to non-performing loans held-for-investment
|
45.25
|
%
|
50.41
|
%
|
47.02
|
%
|
36.46
|
%
|
59.87
|
%
|
|||||
|
Other data:
|
|||||||||||||||
|
Net charge-offs
|
(5,006
|
)
|
(83,498
|
)
|
(28,377
|
)
|
(41,602
|
)
|
(3,518
|
)
|
|||||
|
Non-performing assets:
|
|||||||||||||||
|
Non-accrual loans
|
$
|
113,806
|
$
|
113,959
|
$
|
159,426
|
$
|
192,769
|
$
|
120,685
|
|||||
|
Non-accrual loans held-for-sale
|
11,296
|
71,771
|
-
|
-
|
-
|
||||||||||
|
Troubled debt restructurings, non-accrual
|
15,090
|
831
|
11,796
|
-
|
-
|
||||||||||
|
Loans past due 90 days and accruing
|
-
|
1,263
|
2,554
|
11,802
|
2,500
|
||||||||||
|
Real estate owned, net
|
3,306
|
4,439
|
3,913
|
4,272
|
3,828
|
||||||||||
|
Total non-performing assets
|
143,498
|
192,263
|
177,689
|
208,843
|
127,013
|
||||||||||
|
Troubled debt restructuring, performing
|
-
|
20,276
|
20,341
|
20,396
|
19,161
|
||||||||||
|
(1) Average balances include non-accrual loans and loans held-for-sale
|
|||||||||||||||
-9-
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
||||||||||||||||
|
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
|
||||||||||||||||
|
(Dollars in thousands, except share and per share amounts)
|
||||||||||||||||
|
2011
|
2011
|
2010
|
2010
|
2010
|
||||||||||||
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
||||||||||||
|
Profitability for the quarter:
|
||||||||||||||||
|
Tax-equivalent interest income
|
$
|
32,673
|
$
|
32,458
|
$
|
35,736
|
$
|
36,971
|
$
|
37,349
|
||||||
|
Interest expense
|
5,813
|
6,923
|
8,081
|
8,686
|
8,690
|
|||||||||||
|
Tax-equivalent net interest income
|
26,860
|
25,535
|
27,655
|
28,285
|
28,659
|
|||||||||||
|
Tax-equivalent adjustment
|
368
|
409
|
382
|
399
|
479
|
|||||||||||
|
Provision for loan losses
|
4,836
|
60,283
|
35,511
|
42,429
|
13,978
|
|||||||||||
|
Non-interest income (loss) excluding net impairment losses on available for sale securities
|
4,993
|
(3,849
|
)
|
8,176
|
(1,402
|
)
|
4,416
|
|||||||||
|
Net impairment losses on available for sale securities
|
-
|
(250
|
)
|
(379
|
)
|
(950
|
)
|
-
|
||||||||
|
Non-interest expense excluding amortization of intangible assets
|
27,323
|
26,861
|
27,028
|
28,419
|
27,060
|
|||||||||||
|
Amortization of intangible assets
|
921
|
921
|
921
|
922
|
90,627
|
|||||||||||
|
Loss before income taxes
|
(1,595
|
)
|
(67,038
|
)
|
(28,390
|
)
|
(46,236
|
)
|
(99,068
|
)
|
||||||
|
Income tax expense (benefit)
|
4
|
29
|
103
|
28,757
|
(17,898
|
)
|
||||||||||
|
Net loss
|
(1,599
|
)
|
(67,067
|
)
|
(28,493
|
)
|
(74,993
|
)
|
(81,170
|
)
|
||||||
|
Net loss available to common shareholders
|
$
|
(1,599
|
)
|
$
|
(67,067
|
)
|
$
|
(28,219
|
)
|
$
|
(75,267
|
)
|
$
|
(81,170
|
)
|
|
|
Financial ratios:
|
||||||||||||||||
|
Return on average assets (1)
|
(0.19)
|
%
|
(7.90)
|
%
|
(3.18)
|
%
|
(8.38)
|
%
|
(9.13)
|
%
|
||||||
|
Return on average equity (1)
|
(2.14)
|
%
|
(96.57)
|
%
|
(38.36)
|
%
|
(104.19)
|
%
|
(90.62)
|
%
|
||||||
|
Return on average tangible equity (1),(2)
|
(2.54)
|
%
|
(116.91)
|
%
|
(46.01)
|
%
|
(126.27)
|
%
|
(148.70)
|
%
|
||||||
|
Net interest margin (1)
|
3.59
|
%
|
3.26
|
%
|
3.37
|
%
|
3.47
|
%
|
3.62
|
%
|
||||||
|
Efficiency ratio
|
89.71
|
%
|
132.13
|
%
|
79.69
|
%
|
114.91
|
%
|
361.04
|
%
|
||||||
|
Efficiency ratio, excluding non-operating income and non-operating expense
|
89.71
|
%
|
130.57
|
%
|
78.84
|
%
|
110.79
|
%
|
85.84
|
%
|
||||||
|
Per share data:
|
||||||||||||||||
|
Loss per common share:
|
||||||||||||||||
|
Basic
|
$
|
(0.02
|
)
|
$
|
(1.25
|
)
|
$
|
(0.67
|
)
|
$
|
(3.14
|
)
|
$
|
(3.46
|
)
|
|
|
Diluted
|
$
|
(0.02
|
)
|
$
|
(1.25
|
)
|
$
|
(0.67
|
)
|
$
|
(3.14
|
)
|
$
|
(3.46
|
)
|
|
|
Book value
|
$
|
3.60
|
$
|
3.62
|
$
|
5.33
|
$
|
7.62
|
$
|
11.63
|
||||||
|
Tangible book value
|
$
|
3.03
|
$
|
3.02
|
$
|
4.36
|
$
|
5.86
|
$
|
9.48
|
||||||
|
Average basic shares
|
82,585,859
|
53,575,346
|
42,119,553
|
23,960,691
|
23,431,305
|
|||||||||||
|
Average diluted shares
|
82,585,859
|
53,575,346
|
42,119,553
|
23,960,691
|
23,431,305
|
|||||||||||
|
Operating non-interest income (loss):
|
||||||||||||||||
|
Service charges on deposit accounts
|
$
|
2,702
|
$
|
2,550
|
$
|
2,715
|
$
|
2,869
|
$
|
3,044
|
||||||
|
Other service charges
|
88
|
86
|
94
|
92
|
99
|
|||||||||||
|
Gain on sale of loans
|
708
|
925
|
1,324
|
921
|
712
|
|||||||||||
|
Net gain (loss) on sale of available for sale securities
|
2,421
|
(1,013
|
)
|
4,606
|
-
|
145
|
||||||||||
|
Investment products income
|
1,010
|
888
|
728
|
708
|
792
|
|||||||||||
|
BOLI income
|
560
|
546
|
452
|
545
|
539
|
|||||||||||
|
Derivative credit valuation adjustment
|
(3,624
|
)
|
(8,391
|
)
|
(2,705
|
)
|
(7,498
|
)
|
(1,980
|
)
|
||||||
|
Other income
|
1,128
|
560
|
962
|
961
|
1,065
|
|||||||||||
|
Total operating non-interest income (loss)
|
4,993
|
|
(3,849
|
)
|
8,176
|
(1,402
|
)
|
4,416
|
||||||||
|
Non-operating loss(3):
|
||||||||||||||||
|
Net impairment losses on available for sale securities recognized in earnings
|
-
|
|
(250
|
)
|
(379
|
)
|
(950
|
)
|
-
|
|||||||
|
Total non-operating loss
|
-
|
|
(250
|
)
|
(379
|
)
|
(950
|
)
|
-
|
|||||||
|
Total non-interest income (loss)
|
$
|
4,993
|
|
$
|
(4,099
|
)
|
$
|
7,797
|
$
|
(2,352
|
)
|
$
|
4,416
|
|||
|
Operating non-interest expense:
|
||||||||||||||||
|
Salaries and employee benefits
|
$
|
12,885
|
$
|
12,986
|
$
|
12,920
|
$
|
15,079
|
$
|
14,361
|
||||||
|
Occupancy expense
|
3,305
|
3,404
|
3,043
|
3,030
|
2,895
|
|||||||||||
|
Equipment expense
|
1,903
|
1,682
|
1,634
|
1,663
|
1,750
|
|||||||||||
|
Data processing expense
|
1,111
|
1,065
|
1,133
|
1,039
|
1,101
|
|||||||||||
|
Amortization of intangible assets
|
921
|
921
|
921
|
922
|
921
|
|||||||||||
|
Insurance expense
|
1,261
|
2,013
|
2,064
|
2,105
|
2,020
|
|||||||||||
|
Professional fees
|
1,215
|
765
|
1,220
|
461
|
459
|
|||||||||||
|
Advertising expense
|
1,322
|
565
|
390
|
833
|
532
|
|||||||||||
|
Problem loan expense
|
1,863
|
3,107
|
1,923
|
956
|
1,461
|
|||||||||||
|
Real estate owned expense (income), net
|
635
|
|
(5
|
)
|
398
|
93
|
94
|
|||||||||
|
Office supplies expense
|
324
|
345
|
338
|
377
|
421
|
|||||||||||
|
Other expenses
|
1,499
|
934
|
1,965
|
2,783
|
1,965
|
|||||||||||
|
Total operating non-interest expense
|
28,244
|
27,782
|
27,949
|
29,341
|
27,980
|
|||||||||||
|
Non-operating expense(3):
|
||||||||||||||||
|
Goodwill impairment
|
-
|
-
|
-
|
-
|
89,706
|
|||||||||||
|
Total non-operating expense
|
$
|
-
|
$
|
-
|
$
|
-
|
-
|
89,706
|
||||||||
|
Total non-interest expense
|
$
|
28,244
|
$
|
27,782
|
$
|
27,949
|
$
|
29,341
|
$
|
117,686
|
||||||
|
(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) Amount consists of items which the Company believes are not a result of normal operations.
|
||||||||||||||||
-10-
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
|||||||||||||||||||||||
|
AVERAGE BALANCE SHEETS (Unaudited)
|
|||||||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||
|
For the Three Months Ended June 30,
|
|||||||||||||||||||||||
|
2011
|
2010
|
||||||||||||||||||||||
|
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
||||||||||||||||||
|
Balance
|
Expense
|
Cost
|
Balance
|
Expense
|
Cost
|
||||||||||||||||||
|
Interest-earning assets:
|
|||||||||||||||||||||||
|
Loans receivable(1),(2):
|
|||||||||||||||||||||||
|
Commercial and industrial
|
$
|
1,936,621
|
$
|
23,385
|
4.83
|
%
|
$
|
2,262,656
|
$
|
26,770
|
4.73
|
%
|
|||||||||||
|
Home equity
|
234,451
|
2,458
|
4.19
|
256,697
|
3,016
|
4.70
|
|||||||||||||||||
|
Second mortgage
|
50,257
|
734
|
5.84
|
64,051
|
1,025
|
6.40
|
|||||||||||||||||
|
Residential real estate
|
76,816
|
1,042
|
5.43
|
74,427
|
1,057
|
5.68
|
|||||||||||||||||
|
Other
|
52,831
|
919
|
6.96
|
62,249
|
1,058
|
6.80
|
|||||||||||||||||
|
Total loans receivable
|
2,350,976
|
28,538
|
4.86
|
2,720,080
|
32,926
|
4.84
|
|||||||||||||||||
|
Investment securities(3)
|
501,959
|
4,049
|
3.23
|
424,617
|
4,410
|
4.15
|
|||||||||||||||||
|
Interest-earning bank balances
|
141,849
|
86
|
0.24
|
26,330
|
13
|
0.20
|
|||||||||||||||||
|
Total interest-earning assets
|
2,994,784
|
32,673
|
4.36
|
3,171,027
|
37,349
|
4.71
|
|||||||||||||||||
|
Non-interest earning assets:
|
|||||||||||||||||||||||
|
Cash and due from banks
|
75,200
|
45,153
|
|||||||||||||||||||||
|
Bank properties and equipment, net
|
54,065
|
52,715
|
|||||||||||||||||||||
|
Goodwill and intangible assets, net
|
47,431
|
139,961
|
|||||||||||||||||||||
|
Other assets
|
116,005
|
145,774
|
|||||||||||||||||||||
|
Total non-interest-earning assets
|
292,701
|
383,603
|
|||||||||||||||||||||
|
Total assets
|
$
|
3,287,485
|
$
|
3,554,630
|
|||||||||||||||||||
|
Interest-bearing liabilities:
|
|||||||||||||||||||||||
|
Interest-bearing deposit accounts:
|
|||||||||||||||||||||||
|
Interest-bearing demand deposits
|
$
|
1,321,341
|
$
|
1,822
|
0.55
|
%
|
$
|
1,276,627
|
$
|
2,625
|
0.82
|
%
|
|||||||||||
|
Savings deposits
|
275,315
|
379
|
0.55
|
304,273
|
572
|
0.75
|
|||||||||||||||||
|
Time deposits
|
686,876
|
2,607
|
1.52
|
906,037
|
4,039
|
1.78
|
|||||||||||||||||
|
Total interest-bearing deposit accounts
|
2,283,532
|
4,808
|
0.84
|
2,486,937
|
7,236
|
1.16
|
|||||||||||||||||
|
Short-term borrowings:
|
|||||||||||||||||||||||
|
Federal funds purchased
|
-
|
-
|
-
|
14,423
|
21
|
0.58
|
|||||||||||||||||
|
Securities sold under agreements to repurchase - customers
|
6,813
|
2
|
0.12
|
15,307
|
8
|
0.21
|
|||||||||||||||||
|
Long-term borrowings:
|
|||||||||||||||||||||||
|
FHLBNY advances(4)
|
18,479
|
224
|
4.85
|
22,464
|
265
|
4.72
|
|||||||||||||||||
|
Obligations under capital lease
|
8,019
|
130
|
6.48
|
8,238
|
137
|
6.65
|
|||||||||||||||||
|
Junior subordinated debentures
|
92,786
|
649
|
2.80
|
92,786
|
1,023
|
4.41
|
|||||||||||||||||
|
Total borrowings
|
126,097
|
1,005
|
3.19
|
153,218
|
1,454
|
3.80
|
|||||||||||||||||
|
Total interest-bearing liabilities
|
2,409,629
|
5,813
|
0.96
|
2,640,155
|
8,690
|
1.32
|
|||||||||||||||||
|
Non-interest bearing liabilities:
|
|||||||||||||||||||||||
|
Non-interest-bearing demand deposits
|
491,235
|
471,033
|
|
||||||||||||||||||||
|
Other liabilities
|
87,194
|
85,142
|
|||||||||||||||||||||
|
Total non-interest bearing liabilities
|
578,429
|
556,175
|
|||||||||||||||||||||
|
Total liabilities
|
2,988,058
|
3,196,330
|
|||||||||||||||||||||
|
Shareholders' equity
|
299,427
|
358,300
|
|||||||||||||||||||||
|
Total liabilities and shareholders' equity
|
$
|
3,287,485
|
$
|
3,554,630
|
|||||||||||||||||||
|
Net interest income
|
$
|
26,860
|
$
|
28,659
|
|||||||||||||||||||
|
Interest rate spread(5)
|
3.40
|
%
|
3.39
|
%
|
|||||||||||||||||||
|
Net interest margin(6)
|
3.59
|
%
|
3.62
|
%
|
|||||||||||||||||||
|
Ratio of average interest-earning assets to average interest-bearing liabilities
|
124.28
|
%
|
120.11
|
%
|
|||||||||||||||||||
|
(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 June 30, 2011 and 2010 were $368,000 and $479,000, 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.
|
|||||||||||||||||||||||
-11-
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
|||||||||||||||||||||||
|
AVERAGE BALANCE SHEETS (Unaudited)
|
|||||||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||
|
For the Six Months Ended June 30,
|
|||||||||||||||||||||||
|
2011
|
2010
|
||||||||||||||||||||||
|
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
||||||||||||||||||
|
Balance
|
Expense
|
Cost
|
Balance
|
Expense
|
Cost
|
||||||||||||||||||
|
Interest-earning assets:
|
|||||||||||||||||||||||
|
Loans receivable(1),(2):
|
|||||||||||||||||||||||
|
Commercial and industrial
|
$
|
2,004,195
|
$
|
46,537
|
4.64
|
%
|
$
|
2,252,108
|
$
|
52,936
|
4.70
|
%
|
|||||||||||
|
Home equity
|
235,203
|
5,008
|
4.26
|
257,523
|
6,048
|
4.70
|
|||||||||||||||||
|
Second mortgage
|
51,821
|
1,509
|
5.82
|
65,734
|
2,088
|
6.35
|
|||||||||||||||||
|
Residential real estate
|
75,247
|
2,048
|
5.44
|
73,883
|
2,076
|
5.62
|
|||||||||||||||||
|
Other
|
54,331
|
1,864
|
6.86
|
63,022
|
2,164
|
6.87
|
|||||||||||||||||
|
Total loans receivable
|
2,420,797
|
56,966
|
4.71
|
2,712,270
|
65,312
|
4.82
|
|||||||||||||||||
|
Investment securities(3)
|
486,366
|
7,983
|
3.28
|
437,085
|
9,367
|
4.29
|
|||||||||||||||||
|
Interest-earning bank balances
|
149,944
|
182
|
0.24
|
18,020
|
17
|
0.19
|
|||||||||||||||||
|
Total interest-earning assets
|
3,057,107
|
65,131
|
4.26
|
3,167,375
|
74,696
|
4.72
|
|||||||||||||||||
|
Non-interest earning assets:
|
|||||||||||||||||||||||
|
Cash and due from banks
|
71,592
|
45,173
|
|||||||||||||||||||||
|
Bank properties and equipment, net
|
53,803
|
52,897
|
|||||||||||||||||||||
|
Goodwill and intangible assets, net
|
47,889
|
140,905
|
|||||||||||||||||||||
|
Other assets
|
110,127
|
148,088
|
|||||||||||||||||||||
|
Total non-interest-earning assets
|
283,411
|
387,063
|
|||||||||||||||||||||
|
Total assets
|
$
|
3,340,518
|
$
|
3,554,438
|
|||||||||||||||||||
|
Interest-bearing liabilities:
|
|||||||||||||||||||||||
|
Interest-bearing deposit accounts:
|
|||||||||||||||||||||||
|
Interest-bearing demand deposits
|
$
|
1,357,063
|
$
|
4,000
|
0.59
|
%
|
$
|
1,268,769
|
$
|
5,406
|
0.85
|
%
|
|||||||||||
|
Savings deposits
|
276,356
|
806
|
0.58
|
302,796
|
1,223
|
0.81
|
|||||||||||||||||
|
Time deposits
|
719,383
|
5,592
|
1.55
|
911,235
|
8,234
|
1.81
|
|||||||||||||||||
|
Total interest-bearing deposit accounts
|
2,352,802
|
10,398
|
0.88
|
2,482,800
|
14,863
|
1.20
|
|||||||||||||||||
|
Short-term borrowings:
|
|||||||||||||||||||||||
|
Federal funds purchased
|
-
|
-
|
-
|
30,898
|
84
|
0.54
|
|||||||||||||||||
|
Securities sold under agreements to repurchase - customers
|
6,938
|
5
|
0.14
|
15,396
|
13
|
0.17
|
|||||||||||||||||
|
Long-term borrowings:
|
|||||||||||||||||||||||
|
FHLBNY advances(4)
|
18,635
|
442
|
4.74
|
26,221
|
608
|
4.64
|
|||||||||||||||||
|
Obligations under capital lease
|
8,049
|
264
|
6.56
|
8,260
|
275
|
6.66
|
|||||||||||||||||
|
Junior subordinated debentures
|
92,786
|
1,627
|
3.51
|
92,786
|
2,031
|
4.38
|
|||||||||||||||||
|
Total borrowings
|
126,408
|
2,338
|
3.70
|
173,561
|
3,011
|
3.47
|
|||||||||||||||||
|
Total interest-bearing liabilities
|
2,479,210
|
12,736
|
1.03
|
2,656,361
|
17,874
|
1.35
|
|||||||||||||||||
|
Non-interest bearing liabilities:
|
|||||||||||||||||||||||
|
Non-interest-bearing demand deposits
|
486,446
|
456,030
|
|||||||||||||||||||||
|
Other liabilities
|
86,184
|
82,666
|
|||||||||||||||||||||
|
Total non-interest bearing liabilities
|
572,630
|
538,696
|
|||||||||||||||||||||
|
Total liabilities
|
3,051,840
|
3,195,057
|
|||||||||||||||||||||
|
Shareholders' equity
|
288,678
|
359,381
|
|||||||||||||||||||||
|
Total liabilities and shareholders' equity
|
$
|
3,340,518
|
$
|
3,554,438
|
|||||||||||||||||||
|
Net interest income
|
$
|
52,395
|
$
|
56,822
|
|||||||||||||||||||
|
Interest rate spread(5)
|
3.23
|
%
|
3.37
|
%
|
|||||||||||||||||||
|
Net interest margin(6)
|
3.43
|
%
|
3.59
|
%
|
|||||||||||||||||||
|
Ratio of average interest-earning assets to average interest-bearing liabilities
|
123.31
|
%
|
119.24
|
%
|
|||||||||||||||||||
|
(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 six months ended June 30, 2011 and 2010 were $777,000 and $1.0 million, 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.
|
|||||||||||||||||||||||
-12-
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
|||||||||||||||||||||||
|
AVERAGE BALANCE SHEETS (Unaudited)
|
|||||||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||
|
For the Three Months Ended
|
|||||||||||||||||||||||
|
June 30, 2011
|
March 31, 2011
|
||||||||||||||||||||||
|
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
||||||||||||||||||
|
Balance
|
Expense
|
Cost
|
Balance
|
Expense
|
Cost
|
||||||||||||||||||
|
Interest-earning assets:
|
|||||||||||||||||||||||
|
Loans receivable(1),(2):
|
|||||||||||||||||||||||
|
Commercial and industrial
|
$
|
1,936,621
|
$
|
23,385
|
4.83
|
%
|
$
|
2,072,519
|
$
|
23,152
|
4.47
|
%
|
|||||||||||
|
Home equity
|
234,451
|
2,458
|
4.19
|
235,962
|
2,550
|
4.32
|
|||||||||||||||||
|
Second mortgage
|
50,257
|
734
|
5.84
|
53,402
|
775
|
5.81
|
|||||||||||||||||
|
Residential real estate
|
76,816
|
1,042
|
5.43
|
73,662
|
1,005
|
5.46
|
|||||||||||||||||
|
Other
|
52,831
|
919
|
6.96
|
55,847
|
946
|
6.78
|
|||||||||||||||||
|
Total loans receivable
|
2,350,976
|
28,538
|
4.86
|
2,491,392
|
28,428
|
4.56
|
|||||||||||||||||
|
Investment securities(3)
|
501,959
|
4,049
|
3.23
|
480,964
|
3,934
|
3.27
|
|||||||||||||||||
|
Interest-earning bank balances
|
141,849
|
86
|
0.24
|
158,128
|
96
|
0.24
|
|||||||||||||||||
|
Total interest-earning assets
|
2,994,784
|
32,673
|
4.36
|
3,130,484
|
32,458
|
4.15
|
|||||||||||||||||
|
Non-interest earning assets:
|
|||||||||||||||||||||||
|
Cash and due from banks
|
75,200
|
67,944
|
|||||||||||||||||||||
|
Bank properties and equipment, net
|
54,065
|
53,538
|
|||||||||||||||||||||
|
Goodwill and intangible assets, net
|
47,431
|
48,352
|
|||||||||||||||||||||
|
Other assets
|
116,005
|
93,821
|
|||||||||||||||||||||
|
Total non-interest-earning assets
|
292,701
|
263,655
|
|||||||||||||||||||||
|
Total assets
|
$
|
3,287,485
|
$
|
3,394,139
|
|||||||||||||||||||
|
Interest-bearing liabilities:
|
|||||||||||||||||||||||
|
Interest-bearing deposit accounts:
|
|||||||||||||||||||||||
|
Interest-bearing demand deposits
|
$
|
1,321,341
|
$
|
1,822
|
0.55
|
%
|
$
|
1,393,182
|
$
|
2,178
|
0.63
|
%
|
|||||||||||
|
Savings deposits
|
275,315
|
379
|
0.55
|
277,409
|
427
|
0.62
|
|||||||||||||||||
|
Time deposits
|
686,876
|
2,607
|
1.52
|
752,252
|
2,985
|
1.59
|
|||||||||||||||||
|
Total interest-bearing deposit accounts
|
2,283,532
|
4,808
|
0.84
|
2,422,843
|
5,590
|
0.92
|
|||||||||||||||||
|
Short-term borrowings:
|
|||||||||||||||||||||||
|
Securities sold under agreements to repurchase - customers
|
6,813
|
2
|
0.12
|
7,064
|
3
|
0.17
|
|||||||||||||||||
|
Long-term borrowings:
|
|||||||||||||||||||||||
|
FHLBNY advances(4)
|
18,479
|
224
|
4.85
|
18,794
|
218
|
4.64
|
|||||||||||||||||
|
Obligations under capital lease
|
8,019
|
130
|
6.48
|
8,079
|
134
|
6.63
|
|||||||||||||||||
|
Junior subordinated debentures
|
92,786
|
649
|
2.80
|
92,786
|
978
|
4.22
|
|||||||||||||||||
|
Total borrowings
|
126,097
|
1,005
|
3.19
|
126,723
|
1,333
|
4.21
|
|||||||||||||||||
|
Total interest-bearing liabilities
|
2,409,629
|
5,813
|
0.96
|
2,549,566
|
6,923
|
1.09
|
|||||||||||||||||
|
Non-interest bearing liabilities:
|
|||||||||||||||||||||||
|
Non-interest-bearing demand deposits
|
491,235
|
481,605
|
|||||||||||||||||||||
|
Other liabilities
|
87,194
|
85,161
|
|||||||||||||||||||||
|
Total non-interest bearing liabilities
|
578,429
|
566,766
|
|||||||||||||||||||||
|
Total liabilities
|
2,988,058
|
3,116,332
|
|||||||||||||||||||||
|
Shareholders' equity
|
299,427
|
277,808
|
|||||||||||||||||||||
|
Total liabilities and shareholders' equity
|
$
|
3,287,485
|
$
|
3,394,140
|
|||||||||||||||||||
|
Net interest income
|
$
|
26,860
|
$
|
25,535
|
|||||||||||||||||||
|
Interest rate spread(5)
|
3.40
|
%
|
3.06
|
%
|
|||||||||||||||||||
|
Net interest margin(6)
|
3.59
|
%
|
3.26
|
%
|
|||||||||||||||||||
|
Ratio of average interest-earning assets to average interest-bearing liabilities
|
124.28
|
%
|
122.78
|
%
|
|||||||||||||||||||
|
(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 June 30, 2011 and March 31, 2011 were $368,000 and $409,000, 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.
|
|||||||||||||||||||||||
-13-