SUN BANCORP, INC. /NJ 
By VINELAND, N.J. Jan. 30, 2012 /PRNewswire/ -- Sun Bancorp, Inc. (Nasdaq: SNBC) reported today a net loss available to common shareholders of $1.5 million, or a loss of $0.02 per diluted share, for the fourth quarter ended December 31, 2011, compared to a net loss available to common shareholders of $28.2 million, or a loss of $0.67 per diluted share, for the fourth quarter ended December 31, 2010 which included a $25.1 million net loss on the sale of commercial real estate loans, and net income available to common shareholders of $2.7 million, or earnings of $0.03 per diluted share, for the third quarter ended September 30, 2011.
The following are key items and events that occurred during the fourth quarter:
-- Non-performing loans decreased $27.5 million to $107.7 million at
December 31, 2011 as compared to $135.9 million at September 30, 2011.
Non-performing assets declined by $28.1 million from the linked quarter
to $112.7 million at December 31, 2011.
-- Net charge-offs equaled $20.4 million, of which $17.0 million were
related to the charge-off of previously established specific reserves.
Provision expense totaled $6.8 million and the allowance for loan losses
equaled $41.7 million, a decrease of $13.6 million from the prior
quarter.
-- Average loans for the fourth quarter totaled $2.34 billion, up $19.3
million or 0.8%, compared to the prior quarter. Average deposits were
down $9.8 million versus the prior quarter. The net interest margin
equaled 3.54% versus 3.61% in the prior quarter.
-- Non-interest income increased $1.0 million to $6.8 million primarily due
to a bank-owned life insurance distribution of $765 thousand and gains
of $280 thousand on the sale of investment securities.
-- Tangible equity to assets equaled 8.41% as compared to 8.21% in the
third quarter. Total Risk-based Capital equaled 15.22%.
"2011 was a year of commitment to our customers and the revitalization of our company. We rolled up our sleeves and achieved the goals we set out to: we added talent, strengthened the balance sheet, improved operating performance and grew commercial loan production year-over-year by 36%," said Thomas X. Geisel, Sun's President and Chief Executive Officer. "We ended the year with strong capital and reserves and are well positioned to continue our positive asset quality and operating trends. We look forward to executing our corporate strategy in 2012 to serve our customers, create earnings and grow from the platform we established."
For the full year ended December 31, 2011, the Company reported a net loss of $67.5 million, or $0.88 per diluted share, as compared to a net loss of $185.4 million, or $6.56 per diluted share, in 2010. Provision for loan losses totaled $74.3 million in 2011 versus $101.5 million in 2010. Non-interest expense equaled $110.2 million in 2011 versus $201.1 million in the prior year. Non-interest expense in 2010 included a goodwill impairment charge of $89.7 million. Total assets at December 31, 2011 equaled $3.18 billion as compared to $3.42 billion at December 31, 2010.
Discussion of Results:
Balance Sheet
-- Total assets were $3.18 billion at December 31, 2011, as compared to
$3.24 billion at September 30, 2011 and $3.42 billion at December 31,
2010.
-- Gross loans held-for-investment were $2.29 billion at December 31, 2011,
as compared to $2.31 billion at September 30, 2011 and $2.52 billion at
December 31, 2010. Compared to the linked quarter, loans
held-for-investment decreased by $15.3 million as the Company recorded
net charge-offs of $20.4 million in the fourth quarter.
-- Loans held-for-sale increased $2.3 million from the linked quarter to
$23.2 million at December 31, 2011.
-- Shareholders' equity increased $1.0 million to $309.1 million at
December 31, 2011 as compared to the linked quarter.
Net Interest Income and Margin
-- On a tax equivalent basis, net interest income decreased $473 thousand
over the linked quarter to $26.0 million. The average cost of
interest-bearing liabilities decreased three basis points to 0.89%. The
average yield on interest-earning assets decreased 10 basis points over
the linked quarter from 4.33% to 4.23%. The net interest margin declined
seven basis points to 3.54% from 3.61% for the linked quarter. The
margin increased 17 basis points from 3.37% for the comparable prior
year quarter.
Non-Interest Income
-- Non-interest income was $6.8 million for the quarter ended December 31,
2011, an increase of $1.0 million over the linked quarter of $5.8
million and $993 thousand million below the comparable prior year
quarter income of $7.8 million. The increase over the linked quarter was
primarily attributable to a bank-owned life insurance distribution of
$765 thousand and gains on the sale of investment securities of $280
thousand.
Non-Interest Expense
-- The Company incurred $27.2 million of non-interest expense in the fourth
quarter of 2011, an increase of $253 thousand over the linked quarter
and a decrease of $723 thousand from the comparable prior year quarter.
Higher problem loan and occupancy expenses were partially offset by
lower personnel and legal expenses.
Asset Quality
-- The provision for loan losses for the fourth quarter was $6.8 million,
as compared to $2.3 million in the linked quarter and $35.5 million in
the comparable prior year quarter. The allowance for loan losses was
$41.7 million at December 31, 2011, or 1.82% of gross loans
held-for-investment, as compared to the allowance for loan losses to
gross loans held-for-investment of 2.39% at September 30, 2011 and 3.24%
at December 31, 2010. Net charge-offs recorded in the current quarter
were $20.4 million, or 0.87% of average loans, as compared to $5.8
million, or 0.25% of average loans for the linked quarter and $28.4
million, or 1.05% of average loans outstanding for the comparable prior
year quarter. The prior year quarter included charge-offs of $21.7
million related to the sale of commercial real estate loans.
-- Total non-performing assets were $112.7 million, or 4.86% of total gross
loans held-for-investment, loans held-for-sale and real estate owned at
December 31, 2011, as compared to $140.8 million, or 6.04% and $177.7
million, or 7.00%, respectively, at September 30, 2011 and December 31,
2010. Non-performing loans decreased $27.5 million over the linked
quarter to $107.7 million at December 31, 2011 from $135.2 million at
September 30, 2011.
Capital
-- Stockholders' equity totaled $309.1 million at December 31, 2011
compared to $308.1 million at September 30, 2011. The Company's tangible
equity to tangible assets ratio was 8.41% at December 31, 2011, as
compared to 8.21% at September 30, 2011 and 6.51% at December 31, 2010.
At December 31, 2011, the Company's total risk-based capital ratio, Tier
1 capital ratio and leverage capital ratio were approximately 15.22%,
13.96%, and 11.09%, respectively. At December 31, 2011, Sun National
Bank's total risk-based capital ratio, Tier 1 capital ratio and leverage
capital ratio were approximately 13.39%, 12.13%, and 9.64%,
respectively.
The Company will hold its regularly scheduled conference call on Tuesday, January 31, 2012, 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 $3.18 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 December 31, 2011 and 2010 were $271 thousand and $382 thousand, respectively. The fully taxable equivalent adjustments for the twelve months ended December 31, 2011 and 2010 were $1.3 million and $1.8 million, respectively. The fully taxable equivalent adjustment for the three months ended September 30, 2011 was $292 thousand. 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. Non-operating loss for the three months ended March 31, 2011 and December 31, 2010 was $250 thousand and $379 thousand, respectively. There were no non-operating income items during the three months ended December 31, 2011, September 30, 2011 or June 30, 2011.
SUN BANCORP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (Unaudited)
(Dollars in thousands, except per share amounts)
For the Three Months For the Twelve
Ended Months Ended
December 31, December 31,
------------ ------------
2011 2010 2011 2010
---- ---- ---- ----
Profitability
for the
period:
Net interest
income $25,729 $27,273 $103,528 $110,962
Provision for
loan losses 6,826 35,511 74,266 101,518
Non-interest
income
(loss) 6,804 7,797 13,468 15,512
Non-interest
expense 27,226 27,949 110,225 201,052
Loss before
income taxes (1,519) (28,390) (67,495) (176,096)
Net loss (1,519) (28,493) (67,505) (185,418)
Net loss
available to
common
shareholders $(1,519) $(28,219) $(67,505) $(185,418)
============= ======= ======== ======== =========
Financial
ratios:
Return on
average
assets(1) (0.19)% (3.14)% (2.05)% (5.19)%
Return on
average
equity(1) (1.96)% (37.88)% (22.57)% (56.82)%
Return on
average
tangible
equity(1),(2) (2.29)% (45.43)% (26.77)% (80.23)%
Net interest
margin(1) 3.54% 3.37% 3.50% 3.50%
Efficiency
ratio 83.69% 78.67% 94.21% 158.68%
Efficiency
ratio,
excluding
non-
operating
income and
non-
operating
expense(3) 83.69% 77.83% 94.01% 86.84%
Loss per
common
share:
Basic $(0.02) $(0.67) $(0.88) $(6.56)
Diluted $(0.02) $(0.67) $(0.88) $(6.56)
Average
equity to
average
assets 9.62% 8.29% 9.10% 9.13%
---------- ---- ---- ---- ----
December 31,
------------
2011 2010
---- ----
At period-
end:
Total assets $3,183,916 $3,417,546
Total
deposits 2,667,977 2,940,460
Loans
receivable,
net of
allowance
for loan
losses 2,249,455 2,439,633
Loans held-
for-sale 23,192 13,824
Investments 532,715 493,493
Borrowings 31,269 33,417
Junior
subordinated
debentures 92,786 92,786
Shareholders'
equity 309,083 268,242
Credit
quality and
capital
ratios:
Allowance for
loan losses
to gross
loans
held-for-
investment 1.82% 3.24%
Non-
performing
assets to
gross loans
held-for-
investment,
loans held-
for-sale
and real
estate owned 4.86% 7.00%
Allowance for
loan losses
to non-
performing
loans held-
for-
investment 38.69% 47.02%
Total capital
(to risk-
weighted
assets):
Sun Bancorp,
Inc. 15.22% 12.68%
Sun National
Bank 13.39% 12.25%
Tier 1
capital (to
risk-
weighted
assets):
Sun Bancorp,
Inc. 13.96% 11.41%
Sun National
Bank 12.13% 10.98%
Leverage
ratio:
Sun Bancorp,
Inc. 11.09% 8.93%
Sun National
Bank 9.64% 8.57%
Book value
per common
share $3.61 $5.33
Tangible book
value per
common share $3.08 $4.36
------------- ----- -----
(1) Amounts for the three and twelve 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 twelve months ended December
31, 2011 excludes net impairment losses on available for sale
securities of $250 thousand. Non-interest income for the three and
twelve months ended December 31, 2010 exclude a net impairment loss
on available for sale securities of $379 thousand and $1.3 million,
respectively. Non-interest expense for the twelve months ended
December 31, 2010 excludes a goodwill impairment charge of $89.7
million.
SUN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
(Dollars in thousands, except par value amounts)
December 31, December 31,
2011 2010
------------- -------------
ASSETS
Cash and due from banks $68,773 $36,522
Interest-earning bank balances 51,049 150,704
------------------------------ ------ -------
Cash and cash equivalents 119,822 187,226
Investment securities available for
sale (amortized cost of $514,488 and
$483,255 at December 31, 2011 and
December 31, 2010, respectively) 515,545 472,864
Investment securities held to
maturity (estimated fair value of
$1,413 and $3,155 at December 31,
2011 and December 31, 2010,
respectively) 1,344 3,039
Loans receivable (net of allowance
for loan losses of $41,667 and
$81,713 at December 31, 2011 and
December 31, 2010, respectively) 2,249,455 2,439,633
Loans held-for-sale 23,192 13,824
Restricted equity investments 15,826 17,590
Bank properties and equipment, net 54,756 53,428
Real estate owned 5,020 3,913
Accrued interest receivable 8,912 10,004
Goodwill 38,188 38,188
Intangible assets 6,947 10,631
Deferred taxes, net - 4,245
Bank owned life insurance (BOLI) 74,871 74,656
Other assets 70,038 88,305
------------ ------ ------
Total assets $3,183,916 $3,417,546
============ ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits $2,667,977 $2,940,460
Securities sold under agreements to
repurchase - customers 5,668 6,307
Advances from the Federal Home Loan
Bank of New York (FHLBNY) 2,733 3,999
Securities sold under agreements to
repurchase - FHLBNY 15,000 15,000
Obligations under capital lease 7,868 8,111
Junior subordinated debentures 92,786 92,786
Deferred taxes, net 432 -
Other liabilities 82,369 82,641
----------------- ------ ------
Total liabilities 2,874,833 3,149,304
----------------- --------- ---------
Shareholders' equity:
Preferred stock, $1 par value,
1,000,000 shares authorized; none
issued - -
Common stock, $1 par value,
200,000,000 shares authorized;
87,818,503 shares issued and
85,711,780 shares outstanding at
December 31, 2011; 52,463,594 shares
issued and 50,356,871 shares
outstanding at December 31, 2010 87,825 52,464
Additional paid-in capital 504,508 438,335
Retained deficit (257,520) (190,015)
Accumulated other comprehensive
income (loss) 625 (6,146)
Deferred compensation plan trust (193) (234)
Treasury stock at cost, 2,106,723
shares at December 31, 2011 and
December 31, 2010 (26,162) (26,162)
--------------------------------- ------- -------
Total shareholders' equity 309,083 268,242
-------------------------- ------- -------
Total liabilities and shareholders'
equity $3,183,916 $3,417,546
=================================== ========== ==========
SUN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in thousands, except per share amounts)
For the Three For the Twelve
Months Months
Ended December 31, Ended December 31,
------------------ ------------------
2011 2010 2011 2010
---- ---- ---- ----
INTEREST INCOME
Interest and fees on loans $27,678 $31,415 $112,793 $129,391
Interest on taxable
investment securities 2,421 2,991 10,507 11,993
Interest on non-taxable
investment securities 503 710 2,487 3,344
Dividends on restricted
equity investments 214 238 893 875
----------------------- --- --- --- ---
Total interest income 30,816 35,354 126,680 145,603
--------------------- ------ ------ ------- -------
INTEREST EXPENSE
Interest on deposits 4,041 6,657 18,737 28,780
Interest on funds borrowed 351 392 1,418 1,744
Interest on junior
subordinated debentures 695 1,032 2,997 4,117
------------------------ --- ----- ----- -----
Total interest expense 5,087 8,081 23,152 34,641
---------------------- ----- ----- ------ ------
Net interest income 25,729 27,273 103,528 110,962
PROVISION FOR LOAN LOSSES 6,826 35,511 74,266 101,518
------------------------- ----- ------ ------ -------
Net Interest income (loss)
after provision for loan
losses 18,903 (8,238) 29,262 9,444
-------------------------- ------ ------ ------ -----
NON-INTEREST INCOME
Service charges on deposit
accounts 2,799 2,715 10,889 11,572
Other service charges 71 94 330 364
Gain on sale of loans 906 1,324 3,247 3,560
Impairment losses on
available for sale
securities - (379) (250) (1,329)
Gain on sale of AFS
Securities 280 4,607 1,688 4,751
Investment products income 453 726 2,913 2,831
BOLI income 1,309 452 2,964 2,074
Derivative credit valuation
adjustment (214) (2,705) (12,538) (12,214)
Other 1,200 963 4,225 3,903
----- ----- --- ----- -----
Total non-interest income
(loss) 6,804 7,797 13,468 15,512
------------------------- ----- ----- ------ ------
NON-INTEREST EXPENSE
Salaries and employee
benefits 13,011 12,920 52,501 55,219
Occupancy expense 3,643 3,043 13,373 12,508
Equipment expense 1,858 1,634 7,342 6,783
Amortization of intangible
assets 921 921 3,685 3,685
Goodwill impairment - - - 89,706
Data processing expense 1,118 1,133 4,352 4,359
Professional fees 412 1,220 3,271 2,724
Insurance expense 1,433 2,064 6,186 7,696
Advertising expense 664 390 2,946 2,335
Problem loan costs 1,866 1,923 8,342 5,162
Real estate owned expense,
net 108 398 1,186 801
Office supplies expense 323 338 1,307 1,501
Other expense 1,869 1,965 5,734 8,573
------------- ----- ----- ----- -----
Total non-interest expense 27,226 27,949 110,225 201,052
-------------------------- ------ ------ ------- -------
LOSS BEFORE INCOME TAXES (1,519) (28,390) (67,495) (176,096)
INCOME TAX EXPENSE - 103 10 9,322
------------------ --- --- --- -----
NET LOSS (1,519) (28,493) (67,505) (185,418)
Preferred stock dividends
and discount accretion - (274) - -
------------------------- --- ---- --- ---
NET LOSS AVAILABLE TO COMMON
SHAREHOLDERS $(1,519) $(28,219) $(67,505) $(185,418)
============================ ======= ======== ======== =========
Basic loss per share $(0.02) $(0.67) $(0.88) $(6.56)
-------------------- ------ ------ ------ ------
Diluted loss per share $(0.02) $(0.67) $(0.88) $(6.56)
====================== ====== ====== ====== ======
Weighted average shares -
basic 85,587,878 42,119,553 76,653,990 28,258,953
========================= ========== ========== ========== ==========
Weighted average shares -
diluted 85,587,878 42,119,553 76,653,990 28,258,953
========================= ========== ========== ========== ==========
SUN BANCORP, INC. AND SUBSIDIARIES
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(Dollars in thousands)
2011 2011 2011 2011 2010
Q4 Q3 Q2 Q1 Q4
-- -- -- -- --
Balance sheet at
quarter end:
Cash and cash
equivalents $119,822 134,209 $192,645 $266,504 $187,226
Investment
securities 532,715 557,380 478,814 470,546 493,493
Loans held-for-
investment:
Commercial and
industrial 1,878,026 1,899,231 1,905,628 1,862,903 2,103,492
Home equity 224,517 230,098 234,688 232,318 239,729
Second mortgage 41,470 45,030 47,920 50,388 53,912
Residential real
estate 100,438 82,967 75,546 69,311 65,250
Other 46,671 49,077 52,825 55,402 58,963
----- ------ ------ ------ ------ ------
Total gross loans
held-for-
investment 2,291,122 2,306,403 2,316,607 2,270,322 2,521,346
Allowance for loan
losses (41,667) (55,227) (58,328) (58,498) (81,713)
------------------ ------- ------- ------- ------- -------
Net loans held-for-
investment 2,249,455 2,251,176 2,258,279 2,211,824 2,439,633
Loans held-for-
sale 23,192 20,868 20,514 115,473 13,824
Goodwill 38,188 38,188 38,188 38,188 38,188
Intangible assets 6,947 7,868 8,789 9,710 10,631
Total assets 3,183,916 3,236,219 3,213,790 3,333,808 3,417,546
Total deposits 2,667,977 2,727,650 2,723,676 2,847,467 2,940,460
Securities sold
under agreements to
repurchase -
customers 5,668 6,026 6,743 6,591 6,307
Advances from FHLBNY 2,733 3,054 3,372 3,687 3,999
Securities sold
under agreements to
repurchase -FHLBNY 15,000 15,000 15,000 15,000 15,000
Obligations under
capital lease 7,868 7,930 7,991 8,051 8,111
Junior subordinated
debentures 92,786 92,786 92,786 92,786 92,786
Total shareholders'
equity 309,083 308,055 298,819 286,739 268,242
------------------- ------- ------- ------- ------- -------
Quarterly average
balance sheet:
Loans(1):
Commercial and
industrial $1,910,635 $1,901,394 $1,936,621 2,072,519 $2,184,212
Home equity 226,345 232,458 234,451 235,962 241,510
Second mortgage 44,600 47,844 50,257 53,402 57,310
Residential real
estate 111,514 89,010 76,816 73,662 88,144
Other 46,248 49,361 52,831 55,847 57,522
----- ------ ------ ------ ------ ------
Total gross loans 2,339,342 2,320,067 2,350,976 2,491,392 2,628,698
Securities and other
interest-earning
assets 602,485 616,679 643,808 639,092 658,013
Total interest-
earning assets 2,941,827 2,936,746 2,994,784 3,130,484 3,286,711
Total assets 3,229,699 3,234,551 3,287,485 3,394,139 3,582,647
Non-interest-
bearing demand
deposits 536,558 528,505 491,235 481,605 509,093
Total deposits 2,706,772 2,716,542 2,774,767 2,904,448 3,032,594
Total interest-
bearing liabilities 2,294,786 2,313,896 2,409,629 2,549,566 2,657,984
Total shareholders'
equity 310,786 308,025 299,427 277,808 297,118
------------------- ------- ------- ------- ------- -------
Capital and credit
quality measures:
Total capital (to
risk-weighted
assets):
Sun Bancorp, Inc. 15.22% 14.85% 14.51% 13.73% 12.68%
Sun National Bank 13.39% 13.07% 12.97% 12.65% 12.25%
Tier 1 capital (to
risk-weighted
assets):
Sun Bancorp, Inc. 13.96% 13.59% 13.14% 12.11% 11.41%
Sun National Bank 12.13% 11.81% 11.71% 11.38% 10.98%
Leverage ratio:
Sun Bancorp, Inc. 11.09% 11.08% 10.47% 9.62% 8.93%
Sun National Bank 9.64% 9.64% 9.35% 9.05% 8.57%
Average equity to
average assets 9.62% 9.52% 9.11% 8.18% 8.29%
Allowance for loan
losses to total
gross loans held-
for-investment 2.39% 2.52% 2.58% 3.24%
1.82%
Non-performing
assets to gross
loans held-for-
investment, loans
held-for-sale and
real estate owned 4.86% 6.04 6.13 7.00%
% % 8.04%
Allowance for loan
losses to non-
performing loans
held-for-
investment 42.23% 45.25% 50.41% 47.02%
38.69%
Other data:
Net charge-offs (20,386) (5,809) (5,006) (83,498) (28,377)
Non-performing
assets:
Non-accrual loans $89,656 $107,665 $113,806 $113,959 $159,426
Non-accrual loans
held-for-sale - 5,186 11,296 71,771 -
Troubled debt
restructurings,
non-accrual 17,875 22,353 15,090 831 11,796
Loans past due 90
days and accruing 154 744 - 1,263 2,554
Real estate owned,
net 5,020 4,893 3,306 4,439 3,913
------------------ ----- ----- ----- ----- -----
Total non-
performing assets 112,705 140,841 143,498 192,263 177,689
Troubled debt
restructuring,
performing - - - 20,276 20,341
=============== === === === ====== ======
(1) Average balances include non-accrual loans and loans held-for-sale
SUN BANCORP, INC. AND SUBSIDIARIES
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(Dollars in thousands, except share and per share amounts)
2011 2011 2011 2011 2010
Q4 Q3 Q2 Q1 Q4
-- -- -- -- --
Profitability
for
the
quarter:
Tax-
equivalent
interest
income $31,087 $31,802 $32,673 $32,458 $35,736
Interest
expense 5,087 5,329 5,813 6,923 8,081
Tax-
equivalent
net
interest
income 26,000 26,473 26,860 25,535 27,655
Tax-
equivalent
adjustment 271 292 368 409 382
Provision
for
loan
losses 6,826 2,321 4,836 60,283 35,511
Non-
interest
income
(loss)
excluding
net
impairment
losses
on
available
for
sale
securities 6,804 5,770 4,993 (3,849) 8,176
Net
impairment
losses
on
available
for
sale
securities - - - (250) (379)
Non-
interest
expense
excluding
amortization
of
intangible
assets 26,305 26,051 27,323 26,861 27,028
Amortization
of
intangible
assets 921 922 921 921 921
(Loss)
income
before
income
taxes (1,519) 2,657 (1,595) (67,038) (28,390)
Income
tax
(benefit)
expense - (23) 4 29 103
Net
(loss)
income (1,519) 2,680 (1,599) (67,067) (28,493)
Net
(loss)
income
available
to
common
shareholders $ $2,680 $(1,599) $(67,067) $(28,219)
============ === ====== ======= ======== ========
(1,519)
======
Financial
ratios:
Return
on
average
assets
(1) (0.19)% 0.33% (0.19)% (7.90)% (3.18)%
Return
on
average
equity
(1) (1.96)% 3.48% (2.14)% (96.57)% (38.36)%
Return
on
average
tangible
equity
(1),(2) (2.29)% 4.10% (2.54)% (116.91)% (46.01)%
Net
interest
margin
(1) 3.54% 3.61% 3.59% 3.26% 3.37%
Efficiency
ratio 83.69% 84.42% 89.71% 132.13% 79.69%
Efficiency
ratio,
excluding
non-
operating
income
and
non-
operating
expense 83.69% 84.42% 89.71% 130.57% 78.84%
Per
share
data:
Income
(loss)
per
common
share:
Basic $(0.02) $0.03 $(0.02) $(1.25) $(0.67)
Diluted $(0.02) $0.03 $(0.02) $(1.25) $(0.67)
Book
value $3.61 $3.60 $3.60 $3.62 $5.33
Tangible
book
value $3.08 $3.06 $3.03 $3.02 $4.36
Average
basic
shares 85,587,878 84,429,644 82,585,859 53,575,346 42,119,553
Average
diluted
shares 85,587,878 84,538,449 82,585,859 53,575,346 42,119,553
Operating
non-
interest
income
(loss):
Service
charges
on
deposit
accounts $2,799 2,838 $2,702 $2,550 $2,715
Other
service
charges 71 85 88 86 94
Gain
on
sale
of
loans 906 708 708 925 1,324
Net
gain
(loss)
on
sale
of
available
for
sale
securities 280 - 2,421 (1,013) 4,606
Investment
products
income 453 562 1,010 888 728
BOLI
income 1,309 549 560 546 452
Derivative
credit
valuation
adjustment (214) (309) (3,624) (8,391) (2,705)
Other
income 1,200 1,337 1,128 560 962
------ ----- ----- ----- --- ---
Total
operating
non-
interest
income
(loss) 6,804 5,770 4,993 (3,849) 8,176
--------- ----- ----- ----- ------ -----
Non-
operating
loss(3):
Net
impairment
losses
on
available
for
sale
securities
recognized
in
earnings - - - (250) (379)
---------- --- --- --- ---- ----
Total
non-
operating
loss - - (250) (379)
--------- --- --- ---- ----
Total
non-
interest
income
(loss) $6,804 5,770 $4,993 $(4,099) $7,797
======== ====== ===== ====== ======= ======
Operating
non-
interest
expense:
Salaries
and
employee
benefits $13,011 $13,619 $12,885 $12,986 $12,920
Occupancy
expense 3,643 3,021 3,305 3,404 3,043
Equipment
expense 1,858 1,899 1,903 1,682 1,634
Data
processing
expense 1,118 1,058 1,111 1,065 1,133
Amortization
of
intangible
assets 921 922 921 921 921
Insurance
expense 1,433 1,479 1,261 2,013 2,064
Professional
fees 412 879 1,215 765 1,220
Advertising
expense 664 395 1,322 565 390
Problem
loan
costs 1,866 1,506 1,863 3,107 1,923
Real
estate
owned
expense
(income),
net 108 448 635 (5) 398
Office
supplies
expense 323 315 324 345 338
Other
expense 1,869 1,432 1,499 934 1,965
------- ----- ----- ----- --- -----
Total
non-
interest
expense 27,226 26,973 28,244 27,782 27,949
======== ====== ====== ====== ====== ======
(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.
SUN BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEETS (Unaudited)
(Dollars in thousands)
For the Three Months Ended December 31,
---------------------------------------
2011 2010
---- ----
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Cost Balance Expense Cost
------- ------- ---- ------- ------- ----
Interest-earning
assets:
Loans receivable
(1),(2):
Commercial and
industrial $1,910,635 $22,542 4.72% $2,184,212 25,654 4.70%
Home equity 226,345 2,348 4.15 241,510 2,744 4.54
Second mortgage 44,600 656 5.88 57,310 869 6.07
Residential real
estate 111,514 1,338 4.80 88,144 1,179 5.35
Other 46,248 794 6.87 57,522 969 6.74
------ --- ------ ---
Total loans
receivable 2,339,342 27,678 4.73 2,628,698 31,415 4.78
Investment
securities(3) 548,355 3,375 2.46 491,588 4,216 3.43
Interest-earning
bank balances 54,130 34 0.25 166,425 105 0.25
------ --- ------- ---
Total interest-
earning assets 2,941,827 31,087 4.23 3,286,711 35,736 4.35
--------- ------ --------- ------
Non-interest
earning assets:
Cash and due from
banks 73,863 47,492
Bank properties
and equipment,
net 55,264 53,018
Goodwill and
intangible
assets, net 45,586 49,402
Other assets 113,159 146,024
------- -------
Total non-
interest-
earning assets 287,872 295,936
------- -------
Total assets $3,229,699 $3,582,647
========== ==========
Interest-bearing
liabilities:
Interest-bearing
deposit
accounts:
Interest-bearing
demand deposits $1,271,991 1,435 0.45% 1,387,423 2,581 0.74%
Savings deposits 265,115 285 0.43 281,401 510 0.72
Time deposits 633,108 2,321 1.47 854,677 3,566 1.67
------- ----- ------- -----
Total interest-
bearing deposit
accounts 2,170,214 4,041 0.74 2,523,501 6,657 1.06
--------- ----- --------- -----
Short-term
borrowings:
Federal funds
purchased 141 - - - - -
Securities sold
under agreements
to repurchase -
customers 5,906 1 0.07 14,457 8 0.22
Long-term
borrowings:
FHLBNY advances
(4) 17,842 219 4.91 19,102 246 5.15
Obligation under
capital lease 7,897 131 6.64 8,138 138 6.78
Junior
subordinated
debentures 92,786 695 3.00 92,786 1,032 4.45
------ --- ------ -----
Total borrowings 124,572 1,046 3.36 134,483 1,424 4.24
------- ----- ------- -----
Total interest-
bearing
liabilities 2,294,786 5,087 0.89 2,657,984 8,081 1.22
--------- ----- --------- -----
Non-interest
bearing
liabilities:
Non-interest-
bearing demand
deposits 536,558 509,093
Other liabilities 87,569 118,452
------ -------
Total non-
interest bearing
liabilities 624,127 627,545
------- -------
Total liabilities 2,918,913 3,285,529
Shareholders'
equity 310,786 297,118
------- -------
Total liabilities
and
shareholders'
equity $3,229,699 $3,582,647
========== ==========
Net interest
income $26,000 $27,655
======= =======
Interest rate
spread (5) 3.34% 3.13%
==== ====
Net interest
margin (6) 3.54% 3.37%
==== ====
Ratio of average
interest-
earning assets
to average
interest-
bearing
liabilities 128.20% 123.65%
====== ======
(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 December 31, 2011 and 2010 were $271 thousand and
$382 thousand, respectively.
(4) Amounts include Advances from FHLBNY and Securities sold under
agreements to repurchase -FHLBNY.
(5) Interest rate spread represents the difference between the
average yield on interest-earning assets and the average cost of
interest-bearing liabilities.
(6) Net interest margin represents net interest income as a
percentage of average interest-earning assets.
SUN BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEETS (Unaudited)
(Dollars in thousands)
For the Twelve Months Ended December 31,
----------------------------------------
2011 2010
---- ----
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Cost Balance Expense Cost
------- ------- ---- ------- ------- ----
Interest-earning
assets:
Loans receivable
(1),(2):
Commercial
and
industrial $1,954,701 92,107 4.71% $2,245,118 $105,210 4.69%
Home
equity 232,278 9,774 4.21 251,599 11,714 4.66
Second
mortgage 48,998 2,863 5.84 62,349 3,889 6.24
Residential
real
estate 87,858 4,547 5.18 79,547 4,415 5.55
Other 51,041 3,502 6.86 60,874 4,163 6.84
------ ----- ------ -----
Total
loans
receivable 2,374,876 112,793 4.75 2,699,487 129,391 4.79
Investment
securities
(3) 505,006 14,940 2.96 452,365 17,846 3.95
Interest-
earning
bank
balances 117,830 288 0.24 69,803 166 0.24
------- --- ------ ---
Total
interest-
earning
assets 2,997,712 128,021 4.27 3,221,655 147,403 4.58
--------- ------- --------- -------
Non-
interest
earning
assets:
Cash and
due from
banks 72,455 47,393
Bank
properties
and
equipment,
net 54,589 52,944
Goodwill
and
intangible
assets,
net 46,961 95,010
Other
assets 114,158 150,558
------- -------
Total
non-
interest-
earning
assets 288,163 345,905
------- -------
Total
assets $3,285,875 $3,567,560
========== ==========
Interest-
bearing
liabilities:
Interest-
bearing
deposit
accounts:
Interest-
bearing
demand
deposits $1,317,816 $7,024 0.53% $1,312,871 $10,692 0.81%
Savings
deposits 271,970 1,412 0.52 295,121 2,283 0.77
Time
deposits 675,464 10,301 1.53 899,038 15,805 1.76
------- ------ ------- ------
Total
interest-
bearing
deposit
accounts 2,265,250 18,737 0.83 2,507,030 28,780 1.15
--------- ------ --------- ------
Short-
term
borrowings:
Federal
funds
purchased 36 - - 16,907 89 0.53
Securities
sold
under
agreements
to
repurchase
-
customers 6,681 7 0.10 16,069 30 0.18
Long-
term
borrowings:
FHLBNY
advances
(4) 18,316 884 4.83 22,710 1,076 4.74
Obligations
under
capital
lease 7,988 527 6.60 8.212 550 6.70
Junior
subordinated
debentures 92,786 2,997 3.23 92,786 4,117 4.44
------ ----- ------ -----
Total
borrowings 125,807 4,415 3.51 156,684 5,861 3.74
------- ----- ------- -----
Total
interest-
bearing
liabilities 2,391,057 23,152 0.97 2,663,714 34,641 1.30
--------- ------ --------- ------
Non-
interest
bearing
liabilities:
Non-
interest-
bearing
demand
deposits 509,678 481,757
Other
liabilities 86,013 96,420
------ ------
Total
non-
interest
bearing
liabilities 595,691 578,177
------- -------
Total
liabilities 2,986,748 3,241,891
Shareholders'
equity 299,127 325,669
------- -------
Total
liabilities
and
shareholders'
equity $3,285,875 $3,567,560
========== ==========
Net
interest
income $104,869 112,762
======== =======
Interest
rate
spread
(5) 3.30% 3.28%
==== ====
Net
interest
margin
(6) 3.50% 3.50%
==== ====
Ratio of
average
interest-
earning
assets
to
average
interest-
bearing
liabilities 125.37% 120.95%
====== ======
(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
twelve months ended December 31, 2011 and 2010 were $1.3 million and
$1.8 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.
SUN BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEETS (Unaudited)
(Dollars in thousands)
For the Three Months Ended
--------------------------
December 31, 2011 September 30, 2011
----------------- ------------------
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Cost Balance Expense Cost
------- ------- ---- ------- ------- ----
Interest-earning assets:
Loans receivable (1),(2):
Commercial and
industrial $1,910,635 22,542 4.72% 1,901,394 $23,028 4.84%
Home equity 226,345 2,348 4.15 232,458 2,418 4.16
Second mortgage 44,600 656 5.88 47,844 698 5.84
Residential real
estate 111,514 1,338 4.80 89,010 1,161 5.22
Other 46,248 794 6.87 49,361 844 6.84
------ --- ------ ---
Total loans
receivable 2,339,342 27,678 4.73 2,320,067 28,149 4.85
Investment
securities (3) 548,355 3,375 2.46 498,329 3,582 2.88
Interest-earning
bank balances 54,130 34 0.25 118,350 71 0.24
------ --- ------- ---
Total interest-
earning assets 2,941,827 31,087 4.23 2,936,746 31,802 4.33
--------- ------ --------- ------
Non-interest
earning assets:
Cash and due from
banks 73,863 72,744
Bank properties and
equipment, net 55,264 55,461
Goodwill and
intangible assets,
net 45,586 46,511
Other assets 113,159 123,089
------- -------
Total non-
interest-earning
assets 287,872 297,805
------- -------
Total assets $3,229,699 3,234,551
========== =========
Interest-bearing
liabilities:
Interest-bearing
deposit accounts:
Interest-bearing
demand deposits $1,271,991 1,435 0.45% 1,286,426 $1,589 0.49%
Savings deposits 265,115 285 0.43 270,196 321 0.48
Time deposits 633,108 2,321 1.47 631,415 2,388 1.51
------- ----- ------- -----
Total interest-
bearing deposit
accounts 2,170,214 4,041 0.74 2,188,037 4,298 0.79
--------- ----- --------- -----
Short-term
borrowings:
Federal Funds
Purchased 141 - - - - -
Securities sold
under agreements
to repurchase -
customers 5,906 1 0.07 6,952 1 0.06
Long-term
borrowings:
FHLBNY advances (4) 17,842 219 4.91 18,162 223 4.91
Obligations under
capital lease 7,897 131 6.64 7,959 132 6.63
Junior subordinated
debentures 92,786 695 3.00 92,786 675 2.91
------ --- ------ ---
Total borrowings 124,572 1,046 3.36 125,859 1,031 3.28
------- ----- ------- -----
Total interest-
bearing
liabilities 2,294,786 5,087 0.89 2,313,896 5,329 0.92
--------- ----- --------- -----
Non-interest
bearing
liabilities:
Non-interest-
bearing demand
deposits 536,558 528,505
Other liabilities 87,569 84,125
------ ------
Total non-interest
bearing
liabilities 624,127 612,630
------- -------
Total liabilities 2,918,913 2,926,526
Shareholders'
equity 310,786 308,025
------- -------
Total liabilities
and
shareholders'
equity $3,229,699 3,234,551
========== =========
Net interest income 26,000 $26,473
====== =======
Interest rate
spread (5) 3.34% 3.41%
==== ====
Net interest margin
(6) 3.54% 3.61%
==== ====
Ratio of average
interest-earning
assets to average
interest-bearing
liabilities 128.20% 126.92%
====== ======
(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 December 31, 2011 and September 30, 2011 were
$271 thousand and $292 thousand, respectively.
(4) Amounts include Advances from FHLBNY and Securities sold under
agreements to repurchase -FHLBNY.
(5) Interest rate spread represents the difference between the
average yield on interest-earning assets and the average cost of
interest-bearing liabilities.
(6) Net interest margin represents net interest income as a
percentage of average interest-earning assets.
SOURCE Sun Bancorp, Inc.
