Attached files
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| 8-K - FORM 8-K PRESS RELEASE - SUN BANCORP INC /NJ/ | form8k_pr.htm |
For Immediate Release
Contact: Thomas X. Geisel, President and Chief Executive Officer (856) 690-4329
Sun Bancorp, Inc. Reports Second Quarter 2012 Results
VINELAND, NJ – July 25, 2012 – Sun Bancorp, Inc. (NASDAQ: SNBC) reported today net income available to common shareholders of $1.3 million, or $0.02 per diluted share, for the quarter ended June 30, 2012, compared to a net loss available to common shareholders of $1.6 million, or a loss of $0.02 per diluted share, for the second quarter of 2011.
The following are key items and events that occurred during the second quarter of 2012:
|
·
|
Provision expense totaled $510 thousand as compared to $30.7 million in the first quarter of 2012. The allowance for loan losses equaled $51.4 million at quarter end, a decrease of $733 thousand from March 31, 2012, and an increase of $9.7 million from December 31, 2011. The allowance for loan losses equaled 2.29% of gross loans held for investment and 49.4% of non-performing loans as compared to 2.34% and 45.5% and 1.82% and 38.7%, respectively, at March 31, 2012 and December 31, 2011.
|
|
·
|
The net interest margin equaled 3.53% versus 3.48% in the linked quarter. The current quarter margin was influenced by higher fees received as a result of the Company's troubled asset disposition successes during the quarter. Commercial loan production remained strong at $86 million during the second quarter versus $65 million in the linked quarter. The Company continues to aggressively seek opportunities to reduce its classified and non-performing loans and originate strong credits for the portfolio.
|
|
·
|
Non-interest income increased $2.0 million to $7.5 million as compared to the linked quarter primarily due to an increase of $1.1 million in gains on the sale of mortgage loans and gains of $430 thousand on the sale of investment securities. The Company’s enhancement of the residential mortgage platform has resulted in significant volume and fee increases as $139 million in residential mortgage loans were originated and $86 million sold during the second quarter as compared to $49 million and $30 million, respectively, in the linked quarter.
|
|
·
|
Non-interest expense increased $3.0 million from the linked quarter to $30.6 million. The current quarter included approximately $1.7 million in additional salary and benefit costs associated with the buildup of the mortgage platform as well as a $565 thousand mortgage recourse reserve. The Company also recorded $611 thousand in advertising expenses related to its Boomerang free checking campaign. This product has enabled us to differentiate ourselves from our competitors by offering a free checking product with choice, flexibility and cash back opportunities.
|
|
·
|
As previously announced, the Company closed three retail branches during the second quarter in order to create cost efficiencies and enhance the Company’s ability to streamline operations in the branch network. These closures resulted in approximately $235 thousand in associated write-downs upon transfer of the properties to real estate owned.
|
|
·
|
Total risk-based capital was 14.48% at June 30, 2012, well above the regulatory required level.
|
“The combination of our steadfast focus to strengthen the balance sheet and capitalize on niche growth opportunities has enabled us to return to profitability in the second quarter,” said Thomas X. Geisel, Sun’s President and Chief Executive Officer. “We continue to see meaningful progress in the restoration of our loan portfolio, and new loan originations. We are encouraged by this progress and remain committed to the actions and decisions that reinforce Sun’s strength and success going forward.”
3
Discussion of Results:
Balance Sheet
● Total assets were $3.13 billion at June 30, 2012, as compared to $3.18 billion at December 31, 2011 and $3.21 billion at June 30, 2011.
● Gross loans held-for-investment were $2.24 billion at June 30, 2012, as compared to $2.29 billion at December 31, 2011 and $2.32 billion at June 30, 2011. This decrease is the result of paydowns generated from the implementation of the Company’s workout strategies as well as first quarter charge-off activity.
● Deposits decreased by $23.6 million from the linked quarter to $2.61 billion at June 30, 2012. The Company experienced some run-off in its interest-bearing checking accounts due to planned rate reductions.
Net Interest Income and Margin
● On a tax equivalent basis, net interest income increased $215 thousand over the linked quarter to $25.1 million. The average yield on interest-earning assets increased one basis point over the linked quarter from 4.15% to 4.16%. The average cost of interest-bearing liabilities decreased four basis points to 0.80%. The net interest margin increased five basis points to 3.53% from 3.48% for the linked quarter, but decreased six basis points as compared to the same prior year quarter. The increase from the prior quarter is due to significant pre-payment fees received through the resolution of one credit relationship. The margin variance from the prior year is due to the continuing pressures in the current interest rate environment.
Non-Interest Income
● Non-interest income was $7.5 million for the quarter ended June 30, 2012, an increase of $2.0 million from the linked quarter of $5.5 million and $2.5 million above the comparable prior year quarter of $5.0 million. The increase from the linked quarter was primarily attributable to an increase of $1.1 million in gains on the sale of mortgage loans and gains of $430 thousand on the sale of investment securities. In addition, the linked quarter included a negative derivative credit value adjustment of $314 thousand. The increase from the prior year period is due to an increase of $1.2 million in mortgage gains and a prior year derivative credit valuation adjustment of $3.6 million; offset by a decrease in investment gains of $2.0 million.
Non-Interest Expense
● The Company incurred $30.6 million of non-interest expense in the second quarter of 2012, an increase of $3.0 million over the linked quarter and an increase of $2.3 million from the comparable prior year quarter. Higher salary costs from the addition of new mortgage personnel and significantly increased volume was the primary driver of this increase. In addition, advertising expenses include $611 thousand in costs for the Company’s new Boomerang free consumer checking product. The Company also recorded $565 thousand in mortgage repurchase recourse reserves. The increase in non-interest expense from the prior year period is due primarily to additional salaries and benefits expense associated with the mortgage expansion in 2012.
Asset Quality
● The provision for loan losses for the first quarter was $510 thousand, as compared to $30.7 million in the linked quarter and $4.8 million in the comparable prior year quarter. The allowance for loan losses was $51.4 million at June 30, 2012, or 2.29% of gross loans held-for-investment, as compared to the allowance for loan losses to gross loans held-for-investment of 1.82% at December 31, 2011 and 2.52% at June 30, 2011. Net charge-offs recorded in the current quarter were $1.2 million, or 0.06% of average loans, as compared to $20.2 million, or 0.89% of average loans for the linked quarter and $5.0 million, or 0.21% of average loans outstanding for the comparable prior year quarter.
● Total non-performing assets were $110.1 million, or 4.84% of total gross loans held-for-investment, loans held-for-sale and real estate owned at June 30, 2012, as compared to $118.8 million, or 5.27% and $143.5 million, or 6.13%, respectively, at March 31, 2012 and June 30, 2011. Non-performing loans decreased to $104.0 million at June 30, 2012 as compared to $114.6 million at March 31, 2012. This decrease is due primarily to paydowns which occurred during the second quarter as a result of the successful implementation of the Company’s workout strategies.
Capital
● Stockholders’ equity totaled $284.8 million at June 30, 2012 compared to $309.1 million at December 31, 2011. The Company’s tangible equity to tangible assets ratio was 7.81% at June 30, 2012, as compared to 8.41% at December 31, 2011. At June 30, 2012, the Company’s total risk-based capital ratio, Tier 1 capital ratio and leverage capital ratio were approximately 14.48%, 12.88%, and 10.45%, respectively. At June 30, 2012, Sun National Bank’s total risk-based capital ratio, Tier 1 capital ratio and leverage capital ratio were approximately 13.76%, 12.50%, and 10.11%, respectively.
The Company will hold its regularly scheduled conference call on Thursday, July 26, 2012, at 11:00 a.m. (ET). Participants may listen to the live web cast via the “Investor Relations” section of 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 $3.13 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 more than 60 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, 2012 and 2011 were $217 thousand and $368 thousand, respectively. The fully taxable equivalent adjustments for the six months ended June 30, 2012 and 2011 were $449 thousand and $777 thousand, respectively. The fully taxable equivalent adjustment for the three months ended March 31, 2012 was $233,000. Non-operating income (loss) is also a non-GAAP financial measure. Non-operating income (loss) includes impairment losses recognized on available for sale securities included in earnings. There were no non-operating income (loss) items for the three months ended June 30, 2012, March 31, 2012, December 31, 2011, September 30, 2011 and June 30, 2011. Non-operating loss during the six months ended June 30, 2011 was $250 thousand.
4
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SUN BANCORP, INC. AND SUBSIDIARIES
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FINANCIAL HIGHLIGHTS (Unaudited)
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||||||||||||||||||||||||||||
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(Dollars in thousands, except per share amounts)
|
||||||||||||||||||||||||||||
|
For the Three Months Ended
|
For the Six Months Ended
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|||||||||||||||||||||||||||
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June 30,
|
June 30,
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|||||||||||||||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
|||||||||||||||||||||||||
|
Profitability for the period:
|
||||||||||||||||||||||||||||
|
Net interest income
|
$
|
24,883
|
$
|
26,492
|
$
|
49,533
|
$
|
51,618
|
||||||||||||||||||||
|
Provision for loan losses
|
510
|
4,836
|
31,193
|
65,119
|
||||||||||||||||||||||||
|
Non-interest income
|
7,527
|
4,993
|
13,046
|
894
|
||||||||||||||||||||||||
|
Non-interest expense
|
30,587
|
28,244
|
58,151
|
56,026
|
||||||||||||||||||||||||
|
Income (loss) before income taxes
|
1,313
|
(1,595
|
)
|
(26,765
|
)
|
(68,633
|
)
|
|||||||||||||||||||||
|
Net income (loss)
|
1,313
|
(1,599
|
)
|
(26,765
|
)
|
(68,666
|
)
|
|||||||||||||||||||||
|
Net income (loss) available to common shareholders
|
$
|
1,313
|
$
|
(1,599
|
)
|
$
|
(26,765
|
)
|
$
|
(68,666
|
)
|
|||||||||||||||||
|
Financial ratios:
|
||||||||||||||||||||||||||||
|
Return on average assets(1)
|
0.17
|
%
|
(0.19)
|
%
|
(1.71)
|
%
|
(4.11)
|
%
|
||||||||||||||||||||
|
Return on average equity(1)
|
1.84
|
%
|
(2.14)
|
%
|
(17.90)
|
%
|
(47.57)
|
%
|
||||||||||||||||||||
|
Return on average tangible equity(1),(2)
|
2.17
|
%
|
(2.54)
|
%
|
(21.01)
|
%
|
(57.03)
|
%
|
||||||||||||||||||||
|
Net interest margin(1)
|
3.53
|
%
|
3.59
|
%
|
3.51
|
%
|
3.43
|
%
|
||||||||||||||||||||
|
Efficiency ratio
|
94.38
|
%
|
89.71
|
%
|
92.92
|
%
|
106.69
|
%
|
||||||||||||||||||||
|
Efficiency ratio, excluding non-operating income and non-operating expense(3)
|
94.38
|
%
|
89.71
|
%
|
92.92
|
%
|
106.19
|
%
|
||||||||||||||||||||
|
Earnings (loss) per common share:
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||||||||||||||||||||||||||||
|
Basic
|
$
|
0.02
|
$
|
(0.02
|
)
|
$
|
(0.31
|
)
|
$
|
(1.01
|
)
|
|||||||||||||||||
|
Diluted
|
$
|
0.02
|
$
|
(0.02
|
)
|
$
|
(0.31
|
)
|
$
|
(1.01
|
)
|
|||||||||||||||||
|
Average equity to average assets
|
9.17
|
%
|
9.11
|
%
|
9.53
|
%
|
8.64
|
%
|
||||||||||||||||||||
|
June 30,
|
December 31,
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|||||||||||||||||||||||||||
|
2012
|
2011
|
2011
|
||||||||||||||||||||||||||
|
At period-end:
|
||||||||||||||||||||||||||||
|
Total assets
|
$
|
3,133,484
|
$
|
3,213,790
|
$
|
3,183,916
|
||||||||||||||||||||||
|
Total deposits
|
2,608,034
|
2,723,676
|
2,667,977
|
|||||||||||||||||||||||||
|
Loans receivable, net of allowance for loan losses
|
2,193,492
|
2,258,279
|
2,249,455
|
|||||||||||||||||||||||||
|
Loans held-for-sale(4)
|
24,672
|
20,514
|
23,192
|
|||||||||||||||||||||||||
|
Investments
|
549,601
|
478,814
|
532,715
|
|||||||||||||||||||||||||
|
Borrowings
|
50,274
|
33,106
|
31,269
|
|||||||||||||||||||||||||
|
Junior subordinated debentures
|
92,786
|
92,786
|
92,786
|
|||||||||||||||||||||||||
|
Shareholders’ equity
|
284,768
|
298,819
|
309,083
|
|||||||||||||||||||||||||
|
Credit quality and capital ratios:
|
||||||||||||||||||||||||||||
|
Allowance for loan losses to gross loans held-for-investment
|
2.29
|
%
|
2.52
|
%
|
1.82
|
%
|
||||||||||||||||||||||
|
Non-performing assets to gross loans held-for-investment, loans held-for-sale and real estate owned
|
4.84
|
%
|
6.13
|
%
|
4.86
|
%
|
||||||||||||||||||||||
|
Allowance for loan losses to non-performing loans held-for-investment
|
49.44
|
%
|
45.25
|
%
|
38.69
|
%
|
||||||||||||||||||||||
|
Total capital (to risk-weighted assets):
|
||||||||||||||||||||||||||||
|
Sun Bancorp, Inc.
|
14.48
|
%
|
14.51
|
%
|
15.22
|
%
|
||||||||||||||||||||||
|
Sun National Bank
|
13.76
|
%
|
12.97
|
%
|
13.39
|
%
|
||||||||||||||||||||||
|
Tier 1 capital (to risk-weighted assets):
|
||||||||||||||||||||||||||||
|
Sun Bancorp, Inc.
|
12.88
|
%
|
13.14
|
%
|
13.96
|
%
|
||||||||||||||||||||||
|
Sun National Bank
|
12.50
|
%
|
11.71
|
%
|
12.13
|
%
|
||||||||||||||||||||||
|
Leverage ratio:
|
||||||||||||||||||||||||||||
|
Sun Bancorp, Inc.
|
10.45
|
%
|
10.47
|
%
|
11.09
|
%
|
||||||||||||||||||||||
|
Sun National Bank
|
10.11
|
%
|
9.35
|
%
|
9.64
|
%
|
||||||||||||||||||||||
|
Book value per common share
|
$
|
3.31
|
$
|
3.60
|
$
|
3.61
|
||||||||||||||||||||||
|
Tangible book value per common share
|
$
|
2.81
|
$
|
3.03
|
$
|
3.08
|
||||||||||||||||||||||
|
(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 thousand.
|
||||||||||||||||||||||||||||
|
(4) Amount at June 30, 2011 includes $11.3 million of commercial real estate loans marked at fair value.
|
||||||||||||||||||||||||||||
5
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
||||||
|
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
|
||||||
|
(Dollars in thousands, except par value amounts)
|
||||||
|
June 30, 2012
|
December 31, 2011
|
|||||
|
ASSETS
|
||||||
|
Cash and due from banks
|
$
|
75,235
|
$
|
68,773
|
||
|
Interest-earning bank balances
|
40,656
|
51,049
|
||||
|
Cash and cash equivalents
|
115,891
|
119,822
|
||||
|
Investment securities available for sale (amortized cost of $529,237 and $514,488 at June 30, 2012 and December 31, 2011, respectively)
|
532,275
|
515,545
|
||||
|
Investment securities held to maturity (estimated fair value of $984 and $1,413 at June 30, 2012 and December 31, 2011, respectively)
|
920
|
1,344
|
||||
|
Loans receivable (net of allowance for loan losses of $51,394 and $41,667 at June 30, 2012 and December 31, 2011, respectively)
|
2,193,492
|
2,249,455
|
||||
|
Loans held-for-sale
|
24,672
|
23,192
|
||||
|
Restricted equity investments
|
16,654
|
15,826
|
||||
|
Bank properties and equipment, net
|
52,121
|
54,756
|
||||
|
Real estate owned
|
6,116
|
5,020
|
||||
|
Accrued interest receivable
|
8,130
|
8,912
|
||||
|
Goodwill
|
38,188
|
38,188
|
||||
|
Intangible assets
|
5,104
|
6,947
|
||||
|
Bank owned life insurance (BOLI)
|
75,881
|
74,871
|
||||
|
Other assets
|
64,043
|
70,038
|
||||
|
Total assets
|
$
|
3,133,487
|
$
|
3,183,916
|
||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||
|
Liabilities:
|
||||||
|
Deposits
|
$
|
2,608,034
|
$
|
2,667,977
|
||
|
Securities sold under agreements to repurchase – customers
|
5,454
|
5,668
|
||||
|
Advances from the Federal Home Loan Bank of New York (FHLBNY)
|
2,080
|
2,733
|
||||
|
Securities sold under agreements to repurchase – FHLBNY
|
35,000
|
15,000
|
||||
|
Obligations under capital lease
|
7,740
|
7,868
|
||||
|
Junior subordinated debentures
|
92,786
|
92,786
|
||||
|
Deferred taxes, net
|
1.241
|
432
|
||||
|
Other liabilities
|
96.384
|
82,369
|
||||
|
Total liabilities
|
2,848,719
|
2,874,833
|
||||
|
Shareholders’ equity:
|
||||||
|
Preferred stock, $1 par value, 1,000,000 shares authorized; none issued
|
-
|
-
|
||||
|
Common stock, $1 par value, 100,000,000 shares authorized; 88,066,015 shares issued and 85,859,292 shares outstanding at June 30, 2012; 87,825,038 shares issued and 85,718,315 shares outstanding at December 31, 2011
|
88.073
|
87,825
|
||||
|
Additional paid-in capital
|
505.577
|
504,508
|
||||
|
Retained deficit
|
(284.285
|
)
|
(257,520
|
)
|
||
|
Accumulated other comprehensive income
|
1,797
|
625
|
||||
|
Deferred compensation plan trust
|
(232
|
)
|
(193
|
)
|
||
|
Treasury stock at cost, 2,106,723 shares at June 30, 2012 and December 31, 2011
|
(26,162
|
)
|
(26,162
|
)
|
||
|
Total shareholders’ equity
|
284,768
|
309,083
|
||||
|
Total liabilities and shareholders’ equity
|
$
|
3,133,487
|
$
|
3,183,916
|
||
6
|
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,
|
|||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
|||||||||||||
|
INTEREST INCOME
|
||||||||||||||||
|
Interest and fees on loans
|
$
|
26,202
|
$
|
28,538
|
$
|
52,406
|
$
|
56,966
|
||||||||
|
Interest on taxable investment securities
|
2,515
|
2,864
|
5,057
|
5,483
|
||||||||||||
|
Interest on non-taxable investment securities
|
401
|
683
|
835
|
1,442
|
||||||||||||
|
Dividends on restricted equity investments
|
284
|
220
|
511
|
463
|
||||||||||||
|
Total interest income
|
29,402
|
32,305
|
58,809
|
64,354
|
||||||||||||
|
INTEREST EXPENSE
|
||||||||||||||||
|
Interest on deposits
|
3,447
|
4,808
|
7,131
|
10,398
|
||||||||||||
|
Interest on funds borrowed
|
368
|
356
|
719
|
711
|
||||||||||||
|
Interest on junior subordinated debentures
|
704
|
649
|
1,426
|
1,627
|
||||||||||||
|
Total interest expense
|
4,519
|
5,813
|
9,276
|
12,736
|
||||||||||||
|
Net interest income
|
24,883
|
26,492
|
49,533
|
51,618
|
||||||||||||
|
PROVISION FOR LOAN LOSSES
|
510
|
4,836
|
31,193
|
65,119
|
||||||||||||
|
Net Interest income (loss) after provision for loan losses
|
24,373
|
21,656
|
18,340
|
(13,501
|
)
|
|||||||||||
|
NON-INTEREST INCOME
|
||||||||||||||||
|
Service charges on deposit accounts
|
2,730
|
2,702
|
5,398
|
5,252
|
||||||||||||
|
Other service charges
|
80
|
88
|
153
|
174
|
||||||||||||
|
Gain on sale of loans
|
1,865
|
708
|
2,581
|
1,633
|
||||||||||||
|
Impairment losses on available for sale securities
|
-
|
-
|
-
|
(250)
|
||||||||||||
|
Gain on sale of investment securities
|
430
|
2,421
|
430
|
1,408
|
||||||||||||
|
Investment products income
|
748
|
1,010
|
1,180
|
1,898
|
||||||||||||
|
BOLI income
|
492
|
560
|
1,009
|
1,106
|
||||||||||||
|
Derivative credit valuation adjustment
|
(13
|
)
|
(3,624
|
)
|
(327
|
)
|
(12,015)
|
|||||||||
|
Other
|
1,195
|
1,128
|
2,622
|
1,688
|
||||||||||||
|
Total non-interest income
|
7,527
|
4,993
|
13,046
|
894
|
||||||||||||
|
NON-INTEREST EXPENSE
|
||||||||||||||||
|
Salaries and employee benefits
|
15,756
|
12,885
|
30,527
|
25,871
|
||||||||||||
|
Occupancy expense
|
3,271
|
3,305
|
6,320
|
6,709
|
||||||||||||
|
Equipment expense
|
1,763
|
1.903
|
3,528
|
3,585
|
||||||||||||
|
Amortization of intangible assets
|
921
|
921
|
1,842
|
1,842
|
||||||||||||
|
Data processing expense
|
1,106
|
1,111
|
2,162
|
2,176
|
||||||||||||
|
Professional fees
|
757
|
1,215
|
1,236
|
1,980
|
||||||||||||
|
Insurance expenses
|
1,464
|
1,261
|
2,943
|
3,274
|
||||||||||||
|
Advertising expense
|
1,008
|
1,322
|
1,305
|
1,887
|
||||||||||||
|
Problem loan expense
|
1,274
|
1,863
|
2,751
|
4,970
|
||||||||||||
|
Real estate owned expense, net
|
490
|
635
|
571
|
630
|
||||||||||||
|
Office supplies expense
|
328
|
324
|
647
|
669
|
||||||||||||
|
Other
|
2,449
|
1,499
|
4,319
|
2,433
|
||||||||||||
|
Total non-interest expense
|
30,587
|
28,244
|
58,151
|
56,026
|
||||||||||||
|
INCOME (LOSS) BEFORE INCOME TAXES
|
1,313
|
(1,595
|
)
|
(26,765
|
)
|
(68,633
|
)
|
|||||||||
|
INCOME TAX EXPENSE
|
-
|
4
|
-
|
33
|
||||||||||||
|
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
|
$
|
1,313
|
$
|
(1,599
|
)
|
$
|
(26,765
|
)
|
$
|
(68,666
|
)
|
|||||
|
Basic earnings (loss) per share
|
$
|
0.02
|
$
|
(0.02
|
)
|
$
|
(0.31
|
)
|
$
|
(1.01
|
)
|
|||||
|
Diluted earnings (loss) per share
|
$
|
0.02
|
$
|
(0.02
|
)
|
$
|
(0.31
|
)
|
$
|
(1.01
|
)
|
|||||
|
Weighted average shares – basic
|
85,884,671
|
82,585,859
|
85,830,764
|
68,160,742
|
||||||||||||
|
Weighted average shares - diluted
|
85,916,426
|
82,585,859
|
85,830,764
|
68,160,742
|
||||||||||||
7
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
||||||||||||||
|
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
|
||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||
|
2012
|
2012
|
2011
|
2011
|
2011
|
||||||||||
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
||||||||||
|
Balance sheet at quarter end:
|
||||||||||||||
|
Cash and cash equivalents
|
$
|
115,891
|
$
|
87,553
|
$
|
119,822
|
$
|
134,209
|
$
|
192,645
|
||||
|
Investment securities
|
549,849
|
576,457
|
532,715
|
557,380
|
478,814
|
|||||||||
|
Loans held-for-investment:
|
||||||||||||||
|
Commercial and industrial
|
1,794,830
|
1,820,054
|
1,878,026
|
1,899,231
|
1,905,628
|
|||||||||
|
Home equity
|
217,768
|
219,926
|
224,517
|
230,098
|
234,688
|
|||||||||
|
Second mortgage
|
36,429
|
38,815
|
41,470
|
45,030
|
47,920
|
|||||||||
|
Residential real estate
|
153,373
|
109,807
|
100,438
|
82,967
|
75,546
|
|||||||||
|
Other
|
42,486
|
36,952
|
46,671
|
49,077
|
52,825
|
|||||||||
|
Total gross loans held-for-investment
|
2,244,886
|
2,225,554
|
2,291,122
|
2,306,403
|
2,316,607
|
|||||||||
|
Allowance for loan losses
|
(51,394)
|
(52,127)
|
(41,667)
|
(55,227
|
)
|
(58,328)
|
||||||||
|
Net loans held-for-investment
|
2,193,492
|
2,173,427
|
2,249,455
|
2,251,176
|
2,258,279
|
|||||||||
|
Loans held-for-sale
|
24,672
|
25,034
|
23,192
|
20,868
|
20,514
|
|||||||||
|
Goodwill
|
38,188
|
38,188
|
38,188
|
38,188
|
38,188
|
|||||||||
|
Intangible assets
|
5,104
|
6,025
|
6,947
|
7,868
|
8,789
|
|||||||||
|
Total assets
|
3,133,487
|
3,113,269
|
3,183,916
|
3,236,219
|
3,213,790
|
|||||||||
|
Total deposits
|
2,608,034
|
2,631,652
|
2,667,977
|
2,727,650
|
2,723,676
|
|||||||||
|
Securities sold under agreements to repurchase - customers
|
5,454
|
5,870
|
5,668
|
6,026
|
6,743
|
|||||||||
|
Advances from FHLBNY
|
2,080
|
2,408
|
2,733
|
3,054
|
3,372
|
|||||||||
|
Securities sold under agreements to repurchase - FHLBNY
|
35,000
|
15,000
|
15,000
|
15,000
|
15,000
|
|||||||||
|
Obligations under capital lease
|
7,740
|
7,805
|
7,868
|
7,930
|
7,991
|
|||||||||
|
Junior subordinated debentures
|
92,786
|
92,786
|
92,786
|
92,786
|
92,786
|
|||||||||
|
Total shareholders' equity
|
284,768
|
283,163
|
309,083
|
308,055
|
298,819
|
|||||||||
|
Quarterly average balance sheet:
|
||||||||||||||
|
Loans(1):
|
||||||||||||||
|
Commercial and industrial
|
$
|
1,815,704
|
$
|
1,849,216
|
$
|
1,910,635
|
$
|
1,901,394
|
$
|
1,936,621
|
||||
|
Home equity
|
218,910
|
220,411
|
226,345
|
232,458
|
234,451
|
|||||||||
|
Second mortgage
|
38,545
|
41,346
|
44,600
|
47,844
|
50,257
|
|||||||||
|
Residential real estate
|
155,479
|
123,567
|
111,514
|
89,010
|
76,816
|
|||||||||
|
Other
|
34,765
|
41,733
|
46,248
|
49,361
|
52,831
|
|||||||||
|
Total gross loans
|
2,263,403
|
2,276,273
|
2,339,342
|
2,320,067
|
2,350,976
|
|||||||||
|
Securities and other interest-earning assets
|
583,788
|
580,349
|
602,485
|
616,679
|
643,808
|
|||||||||
|
Total interest-earning assets
|
2,847,191
|
2,856,622
|
2,941,827
|
2,936,746
|
2,994,784
|
|||||||||
|
Total assets
|
3,116,627
|
3,154,984
|
3,229,699
|
3,234,551
|
3,287,485
|
|||||||||
|
Non-interest-bearing demand deposits
|
493,707
|
487,088
|
536,558
|
528,505
|
491,235
|
|||||||||
|
Total deposits
|
2,604,083
|
2,621,736
|
2,706,772
|
2,716,542
|
2,774,767
|
|||||||||
|
Total interest-bearing liabilities
|
2,259,370
|
2,265,830
|
2,294,786
|
2,313,896
|
2,409,629
|
|||||||||
|
Total shareholders' equity
|
285,667
|
312,281
|
310,786
|
308,025
|
299,427
|
|||||||||
|
Capital and credit quality measures:
|
||||||||||||||
|
Total capital (to risk-weighted assets) (2):
|
||||||||||||||
|
Sun Bancorp, Inc.
|
14.48%
|
14.49%
|
15.22%
|
14.85
|
%
|
14.51%
|
||||||||
|
Sun National Bank
|
13.76%
|
13.77%
|
13.39%
|
13.07
|
%
|
12.97%
|
||||||||
|
Tier 1 capital (to risk-weighted assets) (2):
|
||||||||||||||
|
Sun Bancorp, Inc.
|
12.88%
|
12.86%
|
13.96%
|
13.59
|
%
|
13.14%
|
||||||||
|
Sun National Bank
|
12.50%
|
12.51%
|
12.13%
|
11.81
|
%
|
11.71%
|
||||||||
|
Leverage ratio:
|
||||||||||||||
|
Sun Bancorp, Inc.
|
10.45%
|
10.21%
|
11.09%
|
11.08
|
%
|
10.47%
|
||||||||
|
Sun National Bank
|
10.11%
|
9.93%
|
9.64%
|
9.64
|
%
|
9.35%
|
||||||||
|
Average equity to average assets
|
9.17%
|
9.91%
|
9.62%
|
9.52
|
%
|
9.11%
|
||||||||
|
Allowance for loan losses to total gross loans held-for-investment
|
2.29%
|
2.34%
|
1.82%
|
2.39
|
%
|
2.52%
|
||||||||
|
Non-performing assets to gross loans held-for-investment, loans held-for-sale and real estate owned
|
4.84%
|
5.27%
|
4.86%
|
6.04
|
%
|
6.13%
|
||||||||
|
Allowance for loan losses to non-performing loans held-for-investment
|
49.44%
|
45.52%
|
38.69%
|
42.23
|
%
|
45.25%
|
||||||||
|
Other data:
|
||||||||||||||
|
Net charge-offs
|
(1,243)
|
(20,223)
|
(20,386)
|
(5,809
|
)
|
(5,006)
|
||||||||
|
Non-performing assets:
|
||||||||||||||
|
Non-accrual loans
|
$
|
79,696
|
$
|
87,847
|
$
|
89,656
|
$
|
107,665
|
$
|
113,806
|
||||
|
Non-accrual loans held-for-sale
|
-
|
-
|
-
|
5,186
|
11,296
|
|||||||||
|
Troubled debt restructurings, non-accrual
|
24,256
|
26,674
|
17,875
|
22,353
|
15,090
|
|||||||||
|
Loans past due 90 days and accruing
|
-
|
74
|
154
|
744
|
-
|
|||||||||
|
Real estate owned, net
|
6,116
|
4,165
|
5,020
|
4,893
|
3,306
|
|||||||||
|
Total non-performing assets
|
110,068
|
118,760
|
112,705
|
140,841
|
143,498
|
|||||||||
|
(1) Average balances include non-accrual loans and loans held-for-sale
(2) June 30, 2012 capital ratios are estimated, subject to regulatory filings.
|
||||||||||||||
8
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
(Dollars in thousands, except share and per share amounts)
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
2012
|
2012
|
2011
|
2011
|
2011
|
|||||||||||||||||||||||||||||||||||||||||||
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
|||||||||||||||||||||||||||||||||||||||||||
|
Profitability for the quarter:
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Tax-equivalent interest income
|
$
|
29,619
|
$
|
29,641
|
$
|
31,087
|
$
|
31,802
|
$
|
32,673
|
|||||||||||||||||||||||||||||||||||||
|
Interest expense
|
4,519
|
4,758
|
5,087
|
5,329
|
5,813
|
||||||||||||||||||||||||||||||||||||||||||
|
Tax-equivalent net interest income
|
25,098
|
24,883
|
26,000
|
26,473
|
26,860
|
||||||||||||||||||||||||||||||||||||||||||
|
Tax-equivalent adjustment
|
217
|
233
|
271
|
292
|
368
|
||||||||||||||||||||||||||||||||||||||||||
|
Provision for loan losses
|
510
|
30,683
|
6,826
|
2,321
|
4,836
|
||||||||||||||||||||||||||||||||||||||||||
|
Non-interest income (loss) excluding net impairment losses on available for sale securities
|
7,527
|
5,519
|
6,804
|
5,770
|
4,993
|
||||||||||||||||||||||||||||||||||||||||||
|
Non-interest expense excluding amortization of intangible assets
|
29,666
|
26,643
|
26,305
|
26,051
|
27,323
|
||||||||||||||||||||||||||||||||||||||||||
|
Amortization of intangible assets
|
921
|
921
|
921
|
922
|
921
|
||||||||||||||||||||||||||||||||||||||||||
|
Income (loss) before income taxes
|
1,313
|
(28,078
|
)
|
(1,519
|
)
|
2,657
|
(1,595
|
)
|
|||||||||||||||||||||||||||||||||||||||
|
Income tax (benefit) expense
|
-
|
-
|
-
|
(23
|
)
|
4
|
|||||||||||||||||||||||||||||||||||||||||
|
Net income (loss)
|
1,313
|
(28,078
|
)
|
(1,519
|
)
|
2,680
|
(1,599
|
)
|
|||||||||||||||||||||||||||||||||||||||
|
Net income (loss) available to common shareholders
|
$
|
1,313
|
$
|
(28,078)
|
$
|
(1,519)
|
$
|
2,680
|
$
|
(1,599
|
)
|
||||||||||||||||||||||||||||||||||||
|
Financial ratios:
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Return on average assets (1)
|
0.17%
|
(3.56)%
|
(0.19)%
|
0.33
|
%
|
(0.19)
|
%
|
||||||||||||||||||||||||||||||||||||||||
|
Return on average equity (1)
|
1.84%
|
(35.97)%
|
(1.96)%
|
3.48
|
%
|
(2.14)
|
%
|
||||||||||||||||||||||||||||||||||||||||
|
Return on average tangible equity (1),(2)
|
2.17%
|
(41.97)%
|
(2.29)%
|
4.10
|
%
|
(2.54)
|
%
|
||||||||||||||||||||||||||||||||||||||||
|
Net interest margin (1)
|
3.53%
|
3.48%
|
3.54%
|
3.61
|
%
|
3.59
|
%
|
||||||||||||||||||||||||||||||||||||||||
|
Efficiency ratio
|
94.38%
|
91.37%
|
83.69%
|
84.42
|
%
|
89.71
|
%
|
||||||||||||||||||||||||||||||||||||||||
|
Per share data:
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Income (loss) per common share:
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Basic
|
$
|
0.02
|
$
|
(0.34
|
)
|
$
|
(0.02
|
)
|
$
|
0.03
|
$
|
(0.02
|
)
|
||||||||||||||||||||||||||||||||||
|
Diluted
|
$
|
0.02
|
$
|
(0.34
|
)
|
$
|
(0.02
|
)
|
$
|
0.03
|
$
|
(0.02
|
)
|
||||||||||||||||||||||||||||||||||
|
Book value
|
$
|
3.31
|
$
|
3.30
|
$
|
3.61
|
$
|
3.60
|
$
|
3.60
|
|||||||||||||||||||||||||||||||||||||
|
Tangible book value
|
$
|
2.81
|
$
|
2.78
|
$
|
3.08
|
$
|
3.06
|
$
|
3.03
|
|||||||||||||||||||||||||||||||||||||
|
Average basic shares
|
85,884,671
|
85,776,858
|
85,587,878
|
84,429,644
|
82,585,859
|
||||||||||||||||||||||||||||||||||||||||||
|
Average diluted shares
|
85,916,426
|
85,776,858
|
85,587,878
|
84,538,449
|
82,585,859
|
||||||||||||||||||||||||||||||||||||||||||
|
Operating non-interest income (loss):
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Service charges on deposit accounts
|
$
|
2,730
|
$
|
2,668
|
$
|
2,799
|
$
|
2,838
|
$
|
2,702
|
|||||||||||||||||||||||||||||||||||||
|
Other service charges
|
80
|
73
|
71
|
85
|
88
|
||||||||||||||||||||||||||||||||||||||||||
|
Gain on sale of loans
|
1,865
|
716
|
906
|
708
|
708
|
||||||||||||||||||||||||||||||||||||||||||
|
Net gain on sale of available for sale securities
|
430
|
-
|
280
|
-
|
2,421
|
||||||||||||||||||||||||||||||||||||||||||
|
Investment products income
|
748
|
432
|
453
|
562
|
1,010
|
||||||||||||||||||||||||||||||||||||||||||
|
BOLI income
|
492
|
516
|
1,309
|
549
|
560
|
||||||||||||||||||||||||||||||||||||||||||
|
Derivative credit valuation adjustment
|
(13)
|
(314
|
)
|
(214
|
)
|
(309
|
)
|
(3,624
|
)
|
||||||||||||||||||||||||||||||||||||||
|
Other income
|
1,195
|
1,428
|
1,200
|
1,337
|
1,128
|
||||||||||||||||||||||||||||||||||||||||||
|
Total non-interest income
|
$
|
7,527
|
$
|
5,519
|
$
|
6,804
|
5,770
|
|
$
|
4,993
|
|||||||||||||||||||||||||||||||||||||
|
Operating non-interest expense:
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Salaries and employee benefits
|
$
|
15,756
|
$
|
14,771
|
$
|
13,011
|
$
|
13,619
|
$
|
12,885
|
|||||||||||||||||||||||||||||||||||||
|
Occupancy expense
|
3,271
|
3,049
|
3,643
|
3,021
|
3,305
|
||||||||||||||||||||||||||||||||||||||||||
|
Equipment expense
|
1,763
|
1,765
|
1,858
|
1,899
|
1,903
|
||||||||||||||||||||||||||||||||||||||||||
|
Data processing expense
|
1,106
|
1,056
|
1,118
|
1,058
|
1,111
|
||||||||||||||||||||||||||||||||||||||||||
|
Amortization of intangible assets
|
921
|
921
|
921
|
922
|
921
|
||||||||||||||||||||||||||||||||||||||||||
|
Insurance expense
|
1,464
|
1,479
|
1,433
|
1,479
|
1,261
|
||||||||||||||||||||||||||||||||||||||||||
|
Professional fees
|
757
|
479
|
412
|
879
|
1,215
|
||||||||||||||||||||||||||||||||||||||||||
|
Advertising expense
|
1,008
|
297
|
664
|
395
|
1,322
|
||||||||||||||||||||||||||||||||||||||||||
|
Problem loan costs
|
1,274
|
1,477
|
1,866
|
1,506
|
1,863
|
||||||||||||||||||||||||||||||||||||||||||
|
Real estate owned expense (income),net
|
490
|
81
|
108
|
448
|
|
635
|
|||||||||||||||||||||||||||||||||||||||||
|
Office supplies expense
|
328
|
319
|
323
|
315
|
324
|
||||||||||||||||||||||||||||||||||||||||||
|
Other expense
|
2,449
|
1,870
|
1,869
|
1,432
|
1,499
|
||||||||||||||||||||||||||||||||||||||||||
|
Total non-interest expense
|
$
|
30,587
|
$
|
27,564
|
$
|
27,226
|
$
|
26,973
|
$
|
28,244
|
|||||||||||||||||||||||||||||||||||||
|
(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
|
|
||||||||||||||||||||||||||||||||||||||||||||||
9
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
|||||||||||||||||||||||
|
AVERAGE BALANCE SHEETS (Unaudited)
|
|||||||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||
|
For the Three Months Ended June 30,
|
|||||||||||||||||||||||
|
2012
|
2011
|
||||||||||||||||||||||
|
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
||||||||||||||||||
|
Balance
|
Expense
|
Cost
|
Balance
|
Expense
|
Cost
|
||||||||||||||||||
|
Interest-earning assets:
|
|||||||||||||||||||||||
|
Loans receivable (1),(2):
|
|||||||||||||||||||||||
|
Commercial and industrial
|
$
|
1,815,704
|
$
|
21,123
|
4.65
|
%
|
$
|
1,936,621
|
$
|
23,385
|
4.83
|
%
|
|||||||||||
|
Home equity
|
218,910
|
2,297
|
4.20
|
234,451
|
2,458
|
4.19
|
|||||||||||||||||
|
Second mortgage
|
38,545
|
550
|
5.71
|
50,257
|
734
|
5.84
|
|||||||||||||||||
|
Residential real estate
|
155,479
|
1,608
|
4.14
|
76,816
|
1,042
|
5.43
|
|||||||||||||||||
|
Other
|
34,765
|
624
|
7.18
|
52,831
|
919
|
6.96
|
|||||||||||||||||
|
Total loans receivable
|
2,263,403
|
26,202
|
4.63
|
2,350,976
|
28,538
|
4.86
|
|||||||||||||||||
|
Investment securities(3)
|
558,708
|
3,402
|
2.44
|
501,959
|
4,049
|
3.23
|
|||||||||||||||||
|
Interest-earning bank balances
|
25,080
|
15
|
0.24
|
141,849
|
86
|
0.24
|
|||||||||||||||||
|
Total interest-earning assets
|
2,847,191
|
29,619
|
4.16
|
2,994,784
|
32,673
|
4.36
|
|||||||||||||||||
|
Non-interest earning assets:
|
|||||||||||||||||||||||
|
Cash and due from banks
|
72,472
|
75,200
|
|||||||||||||||||||||
|
Bank properties and equipment, net
|
53,164
|
54,065
|
|||||||||||||||||||||
|
Goodwill and intangible assets, net
|
43,745
|
47,431
|
|||||||||||||||||||||
|
Other assets
|
100,055
|
116,005
|
|||||||||||||||||||||
|
Total non-interest-earning assets
|
269,436
|
292,701
|
|||||||||||||||||||||
|
Total assets
|
$
|
3,116,627
|
$
|
3,287,485
|
|||||||||||||||||||
|
Interest-bearing liabilities:
|
|||||||||||||||||||||||
|
Interest-bearing deposit accounts:
|
|||||||||||||||||||||||
|
Interest-bearing demand deposits
|
$
|
1,208,250
|
$
|
1,146
|
0.38
|
%
|
$
|
1,321,341
|
$
|
1,822
|
0.55
|
%
|
|||||||||||
|
Savings deposits
|
262,947
|
217
|
0.33
|
275,315
|
379
|
0.55
|
|||||||||||||||||
|
Time deposits
|
639,179
|
2,084
|
1.30
|
686,876
|
2,607
|
1.52
|
|||||||||||||||||
|
Total interest-bearing deposit accounts
|
2,110,376
|
3,447
|
0.65
|
2,283,532
|
4,808
|
0.84
|
|||||||||||||||||
|
Short-term borrowings:
|
|||||||||||||||||||||||
|
Federal funds purchased
|
8,956
|
9
|
0.40
|
-
|
-
|
-
|
|||||||||||||||||
|
Securities sold under agreements to repurchase - customers
|
5,807
|
2
|
0.14
|
6,813
|
2
|
0.12
|
|||||||||||||||||
|
Long-term borrowings:
|
|||||||||||||||||||||||
|
FHLBNY advances (4)
|
33,675
|
229
|
2.72
|
18,479
|
224
|
4.85
|
|||||||||||||||||
|
Obligations under capital lease
|
7,770
|
129
|
6.64
|
8,019
|
130
|
6.48
|
|||||||||||||||||
|
Junior subordinated debentures
|
92,786
|
703
|
3.04
|
92,786
|
649
|
2.80
|
|||||||||||||||||
|
Total borrowings
|
148,994
|
1,072
|
2.88
|
126,097
|
1,005
|
3.19
|
|||||||||||||||||
|
Total interest-bearing liabilities
|
2,259,370
|
4,521
|
0.80
|
2,409,629
|
5,813
|
0.96
|
|||||||||||||||||
|
Non-interest bearing liabilities:
|
|||||||||||||||||||||||
|
Non-interest-bearing demand deposits
|
493,707
|
491,235
|
|||||||||||||||||||||
|
Other liabilities
|
77,883
|
87,194
|
|||||||||||||||||||||
|
Total non-interest bearing liabilities
|
571,590
|
578,429
|
|||||||||||||||||||||
|
Total liabilities
|
2,830,960
|
2,988,058
|
|||||||||||||||||||||
|
Shareholders' equity
|
285,667
|
299,427
|
|||||||||||||||||||||
|
Total liabilities and shareholders' equity
|
$
|
3,116,627
|
$
|
3,287,485
|
|||||||||||||||||||
|
Net interest income
|
$
|
25,098
|
$
|
26,860
|
|||||||||||||||||||
|
Interest rate spread (5)
|
3.36
|
%
|
3.40
|
%
|
|||||||||||||||||||
|
Net interest margin (6)
|
3.53
|
%
|
3.59
|
%
|
|||||||||||||||||||
|
Ratio of average interest-earning assets to average interest-bearing liabilities
|
126.02
|
%
|
124.28
|
%
|
|||||||||||||||||||
|
(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, 2012 and 2011 were $217 thousand and $368 thousand, respectively.
|
|||||||||||||||||||||||
10
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
|||||||||||||||||||||||
|
AVERAGE BALANCE SHEETS (Unaudited)
|
|||||||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||
|
For the Six Months Ended June 30,
|
|||||||||||||||||||||||
|
2012
|
2011
|
||||||||||||||||||||||
|
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
||||||||||||||||||
|
Balance
|
Expense
|
Cost
|
Balance
|
Expense
|
Cost
|
||||||||||||||||||
|
Interest-earning assets:
|
|||||||||||||||||||||||
|
Loans receivable (1),(2):
|
|||||||||||||||||||||||
|
Commercial and industrial
|
$
|
1,832,460
|
$
|
42,398
|
4.63
|
%
|
$
|
2,004,195
|
$
|
46,537
|
4.64
|
%
|
|||||||||||
|
Home equity
|
219,661
|
4,542
|
4.41
|
235,203
|
5,008
|
4.26
|
|||||||||||||||||
|
Second mortgage
|
39,946
|
1,140
|
5.71
|
51,821
|
1,509
|
5.82
|
|||||||||||||||||
|
Residential real estate
|
139,523
|
2,984
|
4.28
|
75,247
|
2,048
|
5.44
|
|||||||||||||||||
|
Other
|
38,249
|
1,342
|
7.02
|
54,331
|
1,864
|
6.86
|
|||||||||||||||||
|
Total loans receivable
|
2,269,839
|
52,406
|
4.62
|
2,420,797
|
56,966
|
4.71
|
|||||||||||||||||
|
Investment securities (3)
|
554,603
|
6,821
|
2.46
|
486,366
|
7,983
|
3.28
|
|||||||||||||||||
|
Interest-earning bank balances
|
27,465
|
31
|
0.23
|
149,944
|
182
|
0.24
|
|||||||||||||||||
|
Total interest-earning assets
|
2,851,907
|
59,258
|
4.16
|
3,057,107
|
65,131
|
4.26
|
|||||||||||||||||
|
Non-interest earning assets:
|
|||||||||||||||||||||||
|
Cash and due from banks
|
72,111
|
71,592
|
|||||||||||||||||||||
|
Bank properties and equipment, net
|
53,751
|
53,803
|
|||||||||||||||||||||
|
Goodwill and intangible assets, net
|
44,206
|
47,889
|
|||||||||||||||||||||
|
Other assets
|
113,720
|
110,127
|
|||||||||||||||||||||
|
Total non-interest-earning assets
|
283,788
|
283,411
|
|||||||||||||||||||||
|
Total assets
|
$
|
3,135,695
|
$
|
3,340,518
|
|||||||||||||||||||
|
Interest-bearing liabilities:
|
|||||||||||||||||||||||
|
Interest-bearing deposit accounts:
|
|||||||||||||||||||||||
|
Interest-bearing demand deposits
|
$
|
1,229,970
|
$
|
2,406
|
0.39
|
%
|
$
|
1,357,063
|
$
|
4,000
|
0.59
|
%
|
|||||||||||
|
Savings deposits
|
262,575
|
446
|
0.34
|
276,356
|
806
|
0.58
|
|||||||||||||||||
|
Time deposits
|
629,967
|
4,280
|
1.36
|
719,383
|
5,592
|
1.55
|
|||||||||||||||||
|
Total interest-bearing deposit accounts
|
2,122,512
|
7,132
|
0.67
|
2,352,802
|
10,398
|
0.88
|
|||||||||||||||||
|
Short-term borrowings:
|
|||||||||||||||||||||||
|
Federal funds purchased
|
7,665
|
14
|
0.37
|
-
|
-
|
-
|
|||||||||||||||||
|
Securities sold under agreements to repurchase - customers
|
6,238
|
4
|
0.13
|
6,938
|
5
|
0.14
|
|||||||||||||||||
|
Long-term borrowings:
|
|||||||||||||||||||||||
|
FHLBNY advances (4)
|
25,597
|
443
|
3.46
|
18,635
|
442
|
4.74
|
|||||||||||||||||
|
Obligations under capital lease
|
7,802
|
259
|
6.64
|
8,049
|
264
|
6.56
|
|||||||||||||||||
|
Junior subordinated debentures
|
92,786
|
1,426
|
3.07
|
92,786
|
1,627
|
3.51
|
|||||||||||||||||
|
Total borrowings
|
140,088
|
2,146
|
3.06
|
126,408
|
2,338
|
3.70
|
|||||||||||||||||
|
Total interest-bearing liabilities
|
2,262,600
|
9,278
|
0.82
|
2,479,210
|
12,736
|
1.03
|
|||||||||||||||||
|
Non-interest bearing liabilities:
|
|||||||||||||||||||||||
|
Non-interest-bearing demand deposits
|
490,398
|
486,446
|
|||||||||||||||||||||
|
Other liabilities
|
83,722
|
86,184
|
|||||||||||||||||||||
|
Total non-interest bearing liabilities
|
574,120
|
572,630
|
|||||||||||||||||||||
|
Total liabilities
|
2,836,720
|
3,051,840
|
|||||||||||||||||||||
|
Shareholders' equity
|
298,974
|
288,678
|
|||||||||||||||||||||
|
Total liabilities and shareholders' equity
|
$
|
3,135,694
|
$
|
3,340,518
|
|||||||||||||||||||
|
Net interest income
|
$
|
49,980
|
$
|
52,395
|
|||||||||||||||||||
|
Interest rate spread (5)
|
3.34
|
%
|
3.23
|
%
|
|||||||||||||||||||
|
Net interest margin (6)
|
3.51
|
%
|
3.43
|
%
|
|||||||||||||||||||
|
Ratio of average interest-earning assets to average interest-bearing liabilities
|
126.05
|
%
|
123.31
|
%
|
|||||||||||||||||||
|
(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, 2012 and 2011 were $449 thousand and $777 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.
|
|||||||||||||||||||||||
11
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
|||||||||||||||||||
|
AVERAGE BALANCE SHEETS (Unaudited)
|
|||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
|
For the Three Months Ended
|
|||||||||||||||||||
|
June 30, 2012
|
December 31, 2011
|
||||||||||||||||||
|
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
||||||||||||||
|
Balance
|
Expense
|
Cost
|
Balance
|
Expense
|
Cost
|
||||||||||||||
|
Interest-earning assets:
|
|||||||||||||||||||
|
Loans receivable (1),(2):
|
|||||||||||||||||||
|
Commercial and industrial
|
$
|
1,815,704
|
$
|
21,123
|
4.65
|
%
|
$
|
1,910,635
|
$
|
22,542
|
4.72
|
%
|
|||||||
|
Home equity
|
218,910
|
2,297
|
4.20
|
226,345
|
2,348
|
4.15
|
|||||||||||||
|
Second mortgage
|
38,545
|
550
|
5.71
|
44,600
|
656
|
5.88
|
|||||||||||||
|
Residential real estate
|
155,479
|
1,608
|
4.14
|
111,514
|
1,338
|
4.80
|
|||||||||||||
|
Other
|
34,765
|
624
|
7.18
|
46,248
|
794
|
6.87
|
|||||||||||||
|
Total loans receivable
|
2,263,403
|
26,202
|
4.63
|
2,339,342
|
27,678
|
4.73
|
|||||||||||||
|
Investment securities (3)
|
558,708
|
3,402
|
2.44
|
548,355
|
3,375
|
2.46
|
|||||||||||||
|
Interest-earning bank balances
|
25,080
|
15
|
0.24
|
54,130
|
34
|
0.25
|
|||||||||||||
|
Total interest-earning assets
|
2,847,191
|
29,619
|
4.16
|
2,941,827
|
31,087
|
4.23
|
|||||||||||||
|
Non-interest earning assets:
|
|||||||||||||||||||
|
Cash and due from banks
|
72,472
|
73,863
|
|||||||||||||||||
|
Bank properties and equipment, net
|
53,164
|
55,264
|
|||||||||||||||||
|
Goodwill and intangible assets, net
|
43,745
|
45,586
|
|||||||||||||||||
|
Other assets
|
100,055
|
113,159
|
|||||||||||||||||
|
Total non-interest-earning assets
|
269,436
|
287,872
|
|||||||||||||||||
|
Total assets
|
$
|
3,116,627
|
$
|
3,229,699
|
|||||||||||||||
|
Interest-bearing liabilities:
|
|||||||||||||||||||
|
Interest-bearing deposit accounts:
|
|||||||||||||||||||
|
Interest-bearing demand deposits
|
$
|
1,208,250
|
$
|
1,146
|
0.38
|
%
|
$
|
1,271,991
|
1,435
|
0.45
|
%
|
||||||||
|
Savings deposits
|
262,947
|
217
|
0.33
|
265,115
|
285
|
0.43
|
|||||||||||||
|
Time deposits
|
639,179
|
2,084
|
1.30
|
633,108
|
2,321
|
1.47
|
|||||||||||||
|
Total interest-bearing deposit accounts
|
2,110,376
|
3,447
|
0.65
|
2,170,214
|
4,041
|
0.74
|
|||||||||||||
|
Short-term borrowings:
|
|||||||||||||||||||
|
Federal funds purchased
|
8,956
|
9
|
0.40
|
141
|
-
|
-
|
|||||||||||||
|
Securities sold under agreements to repurchase - customers
|
5,807
|
2
|
0.14
|
|
5,906
|
1
|
0.07
|
||||||||||||
|
Long-term borrowings:
|
|||||||||||||||||||
|
FHLBNY advances (4)
|
33,675
|
229
|
2.72
|
17,842
|
219
|
4.91
|
|||||||||||||
|
Obligations under capital lease
|
7,770
|
129
|
6.64
|
7,897
|
131
|
6.64
|
|||||||||||||
|
Junior subordinated debentures
|
92,786
|
703
|
3.04
|
92,786
|
695
|
3.00
|
|||||||||||||
|
Total borrowings
|
148,994
|
1,072
|
2.88
|
124,572
|
1,046
|
3.36
|
|||||||||||||
|
Total interest-bearing liabilities
|
2,259,370
|
4,521
|
0.80
|
2,294,786
|
5,087
|
0.89
|
|||||||||||||
|
Non-interest bearing liabilities:
|
|||||||||||||||||||
|
Non-interest-bearing demand deposits
|
493,707
|
536,558
|
|||||||||||||||||
|
Other liabilities
|
77,883
|
87,569
|
|||||||||||||||||
|
Total non-interest bearing liabilities
|
571,590
|
624,127
|
|||||||||||||||||
|
Total liabilities
|
2,830,960
|
2,918,913
|
|||||||||||||||||
|
Shareholders' equity
|
285,667
|
310,786
|
|||||||||||||||||
|
Total liabilities and shareholders' equity
|
$
|
3,116,627
|
$
|
3,229,699
|
|||||||||||||||
|
Net interest income
|
$
|
25,098
|
$
|
26,000
|
|||||||||||||||
|
Interest rate spread (5)
|
3.36
|
%
|
3.34
|
%
|
|||||||||||||||
|
Net interest margin (6)
|
3.53
|
%
|
3.54
|
%
|
|||||||||||||||
|
Ratio of average interest-earning assets to average interest-bearing liabilities
|
126.02
|
%
|
128.20
|
%
|
|||||||||||||||
|
(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, 2012 and December 31, 2011 were $217 thousand and $271 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.
|
|||||||||||||||||||
12