VINELAND, N.J., April 24, 2012 /PRNewswire/ -- Sun Bancorp, Inc. (NASDAQ: SNBC) reported today a net loss available to common shareholders of $28.1 million, or a loss of $0.34 per diluted share, for the first quarter ended March 31, 2012, compared to a net loss available to common shareholders of $67.1 million, or a loss of $1.25 per diluted share, for the first quarter of 2011. The 2011 period included a $53.1 million net loss on loans transferred to held-for-sale.
The following are key items and events that occurred during the first quarter:
- Provision expense totaled $30.7 million as compared to $6.8 million in the fourth quarter of 2011. The allowance for loan losses equaled $52.1 million at quarter end, an increase of $10.5 million from December 31, 2011. The allowance for loan losses equaled 2.34% of gross loans held for investment and 45.5% of non-performing loans.
- The net interest margin equaled 3.48% versus 3.54% in the linked quarter. Non-accrual interest reversals totaled $310 thousand in the first quarter which reduced the net interest margin by five basis points. Commercial loan production remained relatively strong at $65 million during the first quarter versus $40 million in the comparable prior year quarter.
- Non-interest income decreased $1.3 million to $5.5 million as compared to the linked quarter primarily due to a prior quarter bank-owned life insurance distribution of $765 thousand and prior quarter gains of $280 thousand on the sale of investment securities.
- Non-interest expense increased $338 thousand from the linked quarter to $27.6 million; however, the current quarter included approximately $1.0 million in costs associated with the build out of our mortgage operations. During the first quarter, 47 new mortgage employees were hired as the Company plans to enhance its residential mortgage platform and provide a significant boost to non-interest income.
- Total risk-based capital equaled 14.45% at March 31, 2012, well above the regulatory required level.
- The Company announced the consolidation of three retail branches to occur in the second quarter. This strategic decision provides cost efficiencies and enhances the Company's ability to streamline operations in the branch network while continuing to provide excellent customer service.
"We continued in this quarter to take proactive and appropriate actions to strengthen and grow the company. We were decisive in charging down the balance of previously identified, collateral dependent legacy real estate loans in our portfolio that we believe have lost value due to the devalued commercial real-estate market and increasing our reserve coverage ratios," said Thomas X. Geisel, Sun's President and Chief Executive Officer. "We were equally decisive in capitalizing on market opportunities to build our mortgage business and drive loan production in both our small business and commercial lending lines. We remain focused on making decisions that reinforce the strength of our portfolio, build our revenue stream and effectively serve customers while advancing the Sun brand."
Discussion of Results:
Balance Sheet
- Total assets were $3.11 billion at March 31, 2012, as compared to $3.18 billion at December 31, 2011 and $3.33 billion at March 31, 2011.
- Gross loans held-for-investment were $2.23 billion at March 31, 2012, as compared to $2.29 billion at December 31, 2011 and $2.27 billion at March 31, 2011. Compared to the linked quarter, loans held-for-investment decreased by $65.6 million due to paydowns and net charge-offs of $20.2 million in the first quarter.
- Loans held-for-sale increased $1.8 million from the linked quarter-end to $25.0 million at March 31, 2012.
- Shareholders' equity decreased $25.9 million to $283.2 million at March 31, 2012 as compared to the linked quarter-end.
Net Interest Income and Margin
- On a tax equivalent basis, net interest income decreased $1.1 million over the linked quarter to $24.9 million. The average yield on interest-earning assets decreased eight basis points over the linked quarter from 4.23% to 4.15%. The average cost of interest-bearing liabilities decreased five basis points to 0.84%. The net interest margin declined six basis points to 3.48% from 3.54% for the linked quarter and increased 22 basis points as compared to the same prior year quarter.
Non-Interest Income
- Non-interest income was $5.5 million for the quarter ended March 31, 2012, a decrease of $1.3 million from the linked quarter of $6.8 million and $9.6 million above the comparable prior year quarter loss of $4.1 million. The decrease from 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, both of which were recorded in the linked quarter.
Non-Interest Expense
- The Company incurred $27.6 million of non-interest expense in the first quarter of 2012, an increase of $338 thousand over the linked quarter and a decrease of $219 thousand from the comparable prior year quarter. Higher salary costs from the addition of new mortgage personnel were partially offset by lower occupancy, problem loan and advertising expenses. It is anticipated that the upfront costs associated with the build out of the mortgage operations will begin to be offset in the second quarter when the revenues are realized upon the sale of the first quarter mortgage production.
Asset Quality
- The provision for loan losses for the first quarter was $30.7 million, as compared to $6.8 million in the linked quarter and $60.3 million in the comparable prior year quarter. The allowance for loan losses was $52.1 million at March 31, 2012, or 2.34% 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 2.58% at March 31, 2011. Net charge-offs recorded in the current quarter were $20.2 million, or 0.89% of average loans, as compared to $20.4 million, or 0.87% of average loans for the linked quarter and $83.5 million, or 3.35% of average loans outstanding for the comparable prior year quarter. The prior year quarter included charge-offs of $69.4 million related to the fair value adjustment on loans transferred to held-for-sale.
- Total non-performing assets were $118.8 million, or 5.27% of total gross loans held-for-investment, loans held-for-sale and real estate owned at March 31, 2012, as compared to $112.7 million, or 4.86% and $192.3 million, or 8.04%, respectively, at December 31, 2011 and March 31, 2011. Non-performing loans increased $6.9 million over the linked quarter to $114.6 million at March 31, 2012 from $107.7 million at December 31, 2011 and decreased $73.2 million from $187.8 million at March 31, 2011.
Capital
- Stockholders' equity totaled $283.2 million at March 31, 2012 compared to $309.1 million at December 31, 2011. The Company's tangible equity to tangible assets ratio was 7.79% at March 31, 2012, as compared to 8.41% at December 31, 2011 and 7.27% at March 31, 2011. At March 31, 2012, the Company's total risk-based capital ratio, Tier 1 capital ratio and leverage capital ratio were approximately 14.45%, 12.82%, and 10.21%, respectively. At March 31, 2012, Sun National Bank's total risk-based capital ratio, Tier 1 capital ratio and leverage capital ratio were approximately 13.73%, 12.47%, and 9.93%, respectively.
The Company will hold its regularly scheduled conference call on Wednesday, April 25, 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 $3.11 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 68 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 March 31, 2012, December 31, 2011 and March 31, 2011 were $233 thousand, $271 thousand and $409 thousand, respectively. 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 March 31, 2012, December 31, 2011, September 30, 2011 and June 30, 2011. Non-operating loss during the three months ended March 31, 2011 was $250 thousand.
| SUN BANCORP, INC. AND SUBSIDIARIES |
|||||||||||||||||||||||||
| FINANCIAL HIGHLIGHTS (Unaudited) |
|||||||||||||||||||||||||
| (Dollars in thousands, except per share amounts) |
|||||||||||||||||||||||||
| For the Three Months Ended |
|||||||||||||||||||||||||
| March 31, |
December 31, |
||||||||||||||||||||||||
| 2012 |
2011 |
2011 |
|||||||||||||||||||||||
| Profitability for the period: |
|||||||||||||||||||||||||
| Net interest income |
$ |
24,650 |
$ |
25,126 |
$ |
25,729 |
|||||||||||||||||||
| Provision for loan losses |
30,683 |
60,283 |
6,826 |
||||||||||||||||||||||
| Non-interest income (loss) |
5,519 |
(4,099) |
6,804 |
||||||||||||||||||||||
| Non-interest expense |
27,564 |
27,782 |
27,226 |
||||||||||||||||||||||
| Loss before income taxes |
(28,078) |
(67,038) |
(1,519) |
||||||||||||||||||||||
| Net loss |
(28,078) |
(67,067) |
(1,519) |
||||||||||||||||||||||
| Net loss available to common shareholders |
$ |
(28,078) |
$ |
(67,067) |
$ |
(1,519) |
|||||||||||||||||||
| Financial ratios: |
|||||||||||||||||||||||||
| Return on average assets(1) |
(3.56)% |
(7.90)% |
(0.19)% |
||||||||||||||||||||||
| Return on average equity(1) |
(35.97)% |
(96.57)% |
(1.96)% |
||||||||||||||||||||||
| Return on average tangible equity(1),(2) |
(41.97)% |
(116.91)% |
(2.29)% |
||||||||||||||||||||||
| Net interest margin(1) |
3.48% |
3.26% |
3.54% |
||||||||||||||||||||||
| Efficiency ratio |
91.37% |
132.13% |
83.69% |
||||||||||||||||||||||
| Efficiency ratio, excluding non-operating income and non-operating expense(3) |
91.37% |
130.57% |
83.69% |
||||||||||||||||||||||
| Loss per common share: |
|||||||||||||||||||||||||
| Basic |
$ |
(0.34) |
$ |
(1.25) |
$ |
(0.02) |
|||||||||||||||||||
| Diluted |
$ |
(0.34) |
$ |
(1.25) |
$ |
(0.02) |
|||||||||||||||||||
| Average equity to average assets |
9.90% |
8.18% |
9.62% |
||||||||||||||||||||||
| March 31, |
December 31, |
||||||||||||||||||||||||
| 2012 |
2011 |
2011 |
|||||||||||||||||||||||
| At period-end: |
|||||||||||||||||||||||||
| Total assets |
$ |
3,113,269 |
$ |
3,333,808 |
3,183,916 |
||||||||||||||||||||
| Total deposits |
2,631,652 |
2,847,467 |
2,667,977 |
||||||||||||||||||||||
| Loans receivable, net of allowance for loan losses |
2,173,427 |
2,211,824 |
2,249,455 |
||||||||||||||||||||||
| Loans held-for-sale |
25,034 |
115,473 |
23,192 |
||||||||||||||||||||||
| Investments |
576,457 |
470,546 |
532,715 |
||||||||||||||||||||||
| Borrowings |
31,083 |
33,329 |
31,269 |
||||||||||||||||||||||
| Junior subordinated debentures |
92,786 |
92,786 |
92,786 |
||||||||||||||||||||||
| Shareholders' equity |
283,163 |
286,739 |
309,083 |
||||||||||||||||||||||
| Credit quality and capital ratios: |
|||||||||||||||||||||||||
| Allowance for loan losses to gross loans held-for-investment |
2.34% |
2.58% |
1.82% |
||||||||||||||||||||||
| Non-performing assets to gross loans held-for-investment, loans held-for-sale and real estate owned |
5.27% |
8.05% |
4.86% |
||||||||||||||||||||||
| Allowance for loan losses to non-performing loans |
45.52% |
50.41% |
38.69% |
||||||||||||||||||||||
| Total capital (to risk-weighted assets)(4) : |
|||||||||||||||||||||||||
| Sun Bancorp, Inc. |
14.45% |
13.73% |
15.22% |
||||||||||||||||||||||
| Sun National Bank |
13.73% |
12.65% |
13.39% |
||||||||||||||||||||||
| Tier 1 capital (to risk-weighted assets) (4): |
|||||||||||||||||||||||||
| Sun Bancorp, Inc. |
12.82% |
12.11% |
13.96% |
||||||||||||||||||||||
| Sun National Bank |
12.47% |
11.38% |
12.13% |
||||||||||||||||||||||
| Leverage ratio: |
|||||||||||||||||||||||||
| Sun Bancorp, Inc. |
10.21% |
9.62% |
11.09% |
||||||||||||||||||||||
| Sun National Bank |
9.93% |
9.05% |
9.64% |
||||||||||||||||||||||
| Book value per common share |
$ |
3.30 |
$ |
3.62 |
$ |
3.61 |
|||||||||||||||||||
| Tangible book value per common share |
$ |
2.78 |
$ |
3.02 |
$ |
3.08 |
|||||||||||||||||||
| (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 three months ended March 31, 2011 excludes net impairment losses on available for sale securities of $250 thousand. |
|||||||||||||||||||||||||
| (4) March 31, 2012 capital ratios are estimated, subject to regulatory filings. |
|||||||||||||||||||||||||
| SUN BANCORP, INC. AND SUBSIDIARIES |
||||||
| CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) |
||||||
| (Dollars in thousands, except par value amounts) |
||||||
| March 31, 2012 |
December 31, 2011 |
|||||
| ASSETS |
||||||
| Cash and due from banks |
$ |
79,106 |
$ |
68,773 |
||
| Interest-earning bank balances |
8,447 |
51,049 |
||||
| Cash and cash equivalents |
87,553 |
119,822 |
||||
| Investment securities available for sale (amortized cost of $555,988 and $514,488 at March 31, 2012 and December 31, 2011, respectively) |
559,599 |
515,545 |
||||
| Investment securities held to maturity (estimated fair value of $1,081 and $1,413 at March 31, 2012 and December 31, 2011, respectively) |
1,012 |
1,344 |
||||
| Loans receivable (net of allowance for loan losses of $52,127 and $41,667 at March 31, 2012 and December 31, 2011, respectively) |
2,173,427 |
2,249,455 |
||||
| Loans held-for-sale |
25,034 |
23,192 |
||||
| Restricted equity investments |
15,846 |
15,826 |
||||
| Bank properties and equipment, net |
53,656 |
54,756 |
||||
| Real estate owned |
4,165 |
5,020 |
||||
| Accrued interest receivable |
8,561 |
8,912 |
||||
| Goodwill |
38,188 |
38,188 |
||||
| Intangible assets |
6,025 |
6,947 |
||||
| Deferred taxes, net |
- |
- |
||||
| Bank owned life insurance (BOLI) |
75,388 |
74,871 |
||||
| Other assets |
64,815 |
70,038 |
||||
| Total assets |
$ |
3,113,269 |
$ |
3,183,916 |
||
| LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||
| Liabilities: |
||||||
| Deposits |
$ |
2,631,652 |
$ |
2,667,977 |
||
| Securities sold under agreements to repurchase – customers |
5,870 |
5,668 |
||||
| Advances from the Federal Home Loan Bank of New York (FHLBNY) |
2,408 |
2,733 |
||||
| Securities sold under agreements to repurchase – FHLBNY |
15,000 |
15,000 |
||||
| Obligations under capital lease |
7,805 |
7,868 |
||||
| Junior subordinated debentures |
92,786 |
92,786 |
||||
| Deferred taxes, net |
1,475 |
432 |
||||
| Other liabilities |
73,110 |
82,369 |
||||
| Total liabilities |
2,830,106 |
2,874,833 |
||||
| Shareholders' equity: |
||||||
| Preferred stock, $1 par value, 1,000,000 shares authorized; none issued |
- |
- |
||||
| Common stock, $1 par value, 200,000,000 shares authorized; 87,932,779 shares issued and 85,826,056 shares outstanding at March 31, 2012; 87,818,503 shares issued and 85,711,780 shares outstanding at December 31, 2011 |
87,924 |
87,825 |
||||
| Additional paid-in capital |
505,057 |
504,508 |
||||
| Retained deficit |
(285,598) |
(257,520) |
||||
| Accumulated other comprehensive income (loss) |
2,135 |
625 |
||||
| Deferred compensation plan trust |
(193) |
(193) |
||||
| Treasury stock at cost, 2,106,723 shares at December 31, 2011 and December 31, 2010 |
(26,162) |
(26,162) |
||||
| Total shareholders' equity |
283,163 |
309,083 |
||||
| Total liabilities and shareholders' equity |
$ |
3,113,269 |
$ |
3,183,916 |
||
| SUN BANCORP, INC. AND SUBSIDIARIES |
||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
||||||||||||||||
| (Dollars in thousands, except per share amounts) |
||||||||||||||||
| For the Three Months Ended March 31, |
||||||||||||||||
| 2012 |
2011 |
|||||||||||||||
| INTEREST INCOME |
||||||||||||||||
| Interest and fees on loans |
$ |
26,204 |
$ |
28,428 |
||||||||||||
| Interest on taxable investment securities |
2,542 |
2,619 |
||||||||||||||
| Interest on non-taxable investment securities |
434 |
759 |
||||||||||||||
| Dividends on restricted equity investments |
227 |
243 |
||||||||||||||
| Total interest income |
29,407 |
32,049 |
||||||||||||||
| INTEREST EXPENSE |
||||||||||||||||
| Interest on deposits |
3,684 |
5,590 |
||||||||||||||
| Interest on funds borrowed |
351 |
355 |
||||||||||||||
| Interest on junior subordinated debentures |
722 |
978 |
||||||||||||||
| Total interest expense |
4,757 |
6,923 |
||||||||||||||
| Net interest income |
24,650 |
25,126 |
||||||||||||||
| PROVISION FOR LOAN LOSSES |
30,683 |
60,283 |
||||||||||||||
| Net interest loss after provision for loan losses |
(6,033) |
(35,157) |
||||||||||||||
| NON-INTEREST INCOME |
||||||||||||||||
| Service charges on deposit accounts |
2,668 |
2,550 |
||||||||||||||
| Other service charges |
73 |
86 |
||||||||||||||
| Gain on sale of loans |
716 |
925 |
||||||||||||||
| Impairment losses on available for sale securities |
- |
(250) |
||||||||||||||
| Loss on sale of AFS Securities |
- |
(1,013) |
||||||||||||||
| Investment products income |
432 |
888 |
||||||||||||||
| BOLI income |
516 |
546 |
||||||||||||||
| Derivative credit valuation adjustment |
(314) |
(8,391) |
||||||||||||||
| Other |
1,428 |
560 |
||||||||||||||
| Total non-interest income (loss) |
5,519 |
(4,099) |
||||||||||||||
| NON-INTEREST EXPENSE |
||||||||||||||||
| Salaries and employee benefits |
14,771 |
12,986 |
||||||||||||||
| Occupancy expense |
3,049 |
3,404 |
||||||||||||||
| Equipment expense |
1,765 |
1,682 |
||||||||||||||
| Amortization of intangible assets |
921 |
921 |
||||||||||||||
| Data processing expense |
1,056 |
1,065 |
||||||||||||||
| Professional fees |
479 |
765 |
||||||||||||||
| Insurance expense |
1,479 |
2,013 |
||||||||||||||
| Advertising expense |
297 |
565 |
||||||||||||||
| Problem loan costs |
1,477 |
3,107 |
||||||||||||||
| Real estate owned expense (income), net |
81 |
(5) |
||||||||||||||
| Office supplies expense |
319 |
345 |
||||||||||||||
| Other expense |
1,870 |
934 |
||||||||||||||
| Total non-interest expense |
27,564 |
27,782 |
||||||||||||||
| LOSS BEFORE INCOME TAXES |
(28,078) |
(67,038) |
||||||||||||||
| INCOME TAX EXPENSE |
- |
29 |
||||||||||||||
| NET LOSS AVAILABLE TO COMMON SHAREHOLDERS |
$ |
(28,078) |
$ |
(67,067) |
||||||||||||
| Basic loss per share |
$ |
(0.34) |
$ |
(1.25) |
||||||||||||
| Diluted loss per share |
$ |
(0.34) |
$ |
(1.25) |
||||||||||||
| Weighted average shares – basic |
85,776,858 |
53,575,346 |
||||||||||||||
| Weighted average shares - diluted |
85,776,858 |
53,575,346 |
||||||||||||||
| SUN BANCORP, INC. AND SUBSIDIARIES |
|||||||||||||||
| HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) |
|||||||||||||||
| (Dollars in thousands) |
|||||||||||||||
| 2012 |
2011 |
2011 |
2011 |
2011 |
|||||||||||
| Q1 |
Q4 |
Q3 |
Q2 |
Q1 |
|||||||||||
| Balance sheet at quarter end: |
|||||||||||||||
| Cash and cash equivalents |
$ |
87,553 |
$ |
119,822 |
134,209 |
$ |
192,645 |
$ |
266,504 |
||||||
| Investment securities |
576,457 |
532,715 |
557,380 |
478,814 |
470,546 |
||||||||||
| Loans held-for-investment: |
|||||||||||||||
| Commercial and industrial |
1,820,054 |
1,878,026 |
1,899,231 |
1,905,628 |
1,862,903 |
||||||||||
| Home equity |
219,926 |
224,517 |
230,098 |
234,688 |
232,318 |
||||||||||
| Second mortgage |
38,815 |
41,470 |
45,030 |
47,920 |
50,388 |
||||||||||
| Residential real estate |
109,807 |
100,438 |
82,967 |
75,546 |
69,311 |
||||||||||
| Other |
36,952 |
46,671 |
49,077 |
52,825 |
55,402 |
||||||||||
| Total gross loans held-for-investment |
2,225,554 |
2,291,122 |
2,306,403 |
2,316,607 |
2,270,322 |
||||||||||
| Allowance for loan losses |
(52,127) |
(41,667) |
(55,227) |
(58,328) |
(58,498) |
||||||||||
| Net loans held-for-investment |
2,173,427 |
2,249,455 |
2,251,176 |
2,258,279 |
2,211,824 |
||||||||||
| Loans held-for-sale |
25,034 |
23,192 |
20,868 |
20,514 |
115,473 |
||||||||||
| Goodwill |
38,188 |
38,188 |
38,188 |
38,188 |
38,188 |
||||||||||
| Intangible assets |
6,025 |
6,947 |
7,868 |
8,789 |
9,710 |
||||||||||
| Total assets |
3,113,269 |
3,183,916 |
3,236,219 |
3,213,790 |
3,333,808 |
||||||||||
| Total deposits |
2,631,652 |
2,667,977 |
2,727,650 |
2,723,676 |
2,847,467 |
||||||||||
| Securities sold under agreements to repurchase - customers |
5,870 |
5,668 |
6,026 |
6,743 |
6,591 |
||||||||||
| Advances from FHLBNY |
2,408 |
2,733 |
3,054 |
3,372 |
3,687 |
||||||||||
| Securities sold under agreements to repurchase - FHLBNY |
15,000 |
15,000 |
15,000 |
15,000 |
15,000 |
||||||||||
| Obligations under capital lease |
7,805 |
7,868 |
7,930 |
7,991 |
8,051 |
||||||||||
| Junior subordinated debentures |
92,786 |
92,786 |
92,786 |
92,786 |
92,786 |
||||||||||
| Total shareholders' equity |
283,163 |
309,083 |
308,055 |
298,819 |
286,739 |
||||||||||
| Quarterly average balance sheet: |
|||||||||||||||
| Loans(1): |
|||||||||||||||
| Commercial and industrial |
$ |
1,849,216 |
$ |
1,910,635 |
$ |
1,901,394 |
$ |
1,936,621 |
2,072,519 |
||||||
| Home equity |
220,411 |
226,345 |
232,458 |
234,451 |
235,962 |
||||||||||
| Second mortgage |
41,346 |
44,600 |
47,844 |
50,257 |
53,402 |
||||||||||
| Residential real estate |
123,567 |
111,514 |
89,010 |
76,816 |
73,662 |
||||||||||
| Other |
41,733 |
46,248 |
49,361 |
52,831 |
55,847 |
||||||||||
| Total gross loans |
2,276,273 |
2,339,342 |
2,320,067 |
2,350,976 |
2,491,392 |
||||||||||
| Securities and other interest-earning assets |
580,349 |
602,485 |
616,679 |
643,808 |
639,092 |
||||||||||
| Total interest-earning assets |
2,856,622 |
2,941,827 |
2,936,746 |
2,994,784 |
3,130,484 |
||||||||||
| Total assets |
3,154,984 |
3,229,699 |
3,234,551 |
3,287,485 |
3,394,139 |
||||||||||
| Non-interest-bearing demand deposits |
487,088 |
536,558 |
528,505 |
491,235 |
481,605 |
||||||||||
| Total deposits |
2,621,736 |
2,706,772 |
2,716,542 |
2,774,767 |
2,904,448 |
||||||||||
| Total interest-bearing liabilities |
2,265,830 |
2,294,786 |
2,313,896 |
2,409,629 |
2,549,566 |
||||||||||
| Total shareholders' equity |
312,281 |
310,786 |
308,025 |
299,427 |
277,808 |
||||||||||
| Capital and credit quality measures: |
|||||||||||||||
| Total capital (to risk-weighted assets) (2): |
|||||||||||||||
| Sun Bancorp, Inc. |
14.45% |
15.22% |
14.85% |
14.51% |
13.73% |
||||||||||
| Sun National Bank |
13.73% |
13.39% |
13.07% |
12.97% |
12.65% |
||||||||||
| Tier 1 capital (to risk-weighted assets) (2): |
|||||||||||||||
| Sun Bancorp, Inc. |
12.82% |
13.96% |
13.59% |
13.14% |
12.11% |
||||||||||
| Sun National Bank |
12.47% |
12.13% |
11.81% |
11.71% |
11.38% |
||||||||||
| Leverage ratio: |
|||||||||||||||
| Sun Bancorp, Inc. |
10.21% |
11.09% |
11.08% |
10.47% |
9.62% |
||||||||||
| Sun National Bank |
9.93% |
9.64% |
9.64% |
9.35% |
9.05% |
||||||||||
| Average equity to average assets |
9.91% |
9.62% |
9.52% |
9.11% |
8.18% |
||||||||||
| Allowance for loan losses to total gross loans held-for-investment |
2.34% |
1.82% |
2.39% |
2.52% |
2.58% |
||||||||||
| Non-performing assets to gross loans held-for-investment, loans held-for-sale and real estate owned |
5.27% |
4.86% |
6.04% |
6.13% |
8.04% |
||||||||||
| Allowance for loan losses to non-performing loans held-for-investment |
45.52% |
38.69% |
42.23% |
45.25% |
50.41% |
||||||||||
| Other data: |
|||||||||||||||
| Net charge-offs |
(20,223) |
(20,386) |
(5,809) |
(5,006) |
(83,498) |
||||||||||
| Non-performing assets: |
|||||||||||||||
| Non-accrual loans |
$ |
87,847 |
$ |
89,656 |
$ |
107,665 |
$ |
113,806 |
$ |
113,959 |
|||||
| Non-accrual loans held-for-sale |
- |
- |
5,186 |
11,296 |
71,771 |
||||||||||
| Troubled debt restructurings, non-accrual |
26,674 |
17,875 |
22,353 |
15,090 |
831 |
||||||||||
| Loans past due 90 days and accruing |
74 |
154 |
744 |
- |
1,263 |
||||||||||
| Real estate owned, net |
4,165 |
5,020 |
4,893 |
3,306 |
4,439 |
||||||||||
| Total non-performing assets |
118,760 |
112,705 |
140,841 |
143,498 |
192,263 |
||||||||||
| Troubled debt restructuring, performing |
- |
- |
- |
- |
20,276 |
||||||||||
| (1) Average balances include non-accrual loans and loans held-for-sale (2) March 31, 2012 capital ratios are estimated, subject to regulatory filings. |
|||||||||||||||
| SUN BANCORP, INC. AND SUBSIDIARIES |
|||||||||||||||||||||
| HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) |
|||||||||||||||||||||
| (Dollars in thousands, except share and per share amounts) |
|||||||||||||||||||||
| 2012 |
2011 |
2011 |
2011 |
2011 |
|||||||||||||||||
| Q1 |
Q4 |
Q3 |
Q2 |
Q1 |
|||||||||||||||||
| Profitability for the quarter: |
|||||||||||||||||||||
| Tax-equivalent interest income |
$ |
29,641 |
$ |
31,087 |
$ |
31,802 |
$ |
32,673 |
$ |
32,458 |
|||||||||||
| Interest expense |
4,758 |
5,087 |
5,329 |
5,813 |
6,923 |
||||||||||||||||
| Tax-equivalent net interest income |
24,883 |
26,000 |
26,473 |
26,860 |
25,535 |
||||||||||||||||
| Tax-equivalent adjustment |
233 |
271 |
292 |
368 |
409 |
||||||||||||||||
| Provision for loan losses |
30,683 |
6,826 |
2,321 |
4,836 |
60,283 |
||||||||||||||||
| Non-interest income (loss) excluding net impairment losses on available for sale securities |
5,519 |
6,804 |
5,770 |
4,993 |
(3,849) |
||||||||||||||||
| Net impairment losses on available for sale securities |
- |
- |
- |
- |
(250) |
||||||||||||||||
| Non-interest expense excluding amortization of intangible assets |
26,643 |
26,305 |
26,051 |
27,323 |
26,861 |
||||||||||||||||
| Amortization of intangible assets |
921 |
921 |
922 |
921 |
921 |
||||||||||||||||
| (Loss) income before income taxes |
(28,078) |
(1,519) |
2,657 |
(1,595) |
(67,038) |
||||||||||||||||
| Income tax (benefit) expense |
- |
- |
(23) |
4 |
29 |
||||||||||||||||
| Net (loss) income |
(28,078) |
(1,519) |
2,680 |
(1,599) |
(67,067) |
||||||||||||||||
| Net (loss) income available to common shareholders |
$ |
(28,078) |
$ |
(1,519) |
$ |
2,680 |
$ |
(1,599) |
$ |
(67,067) |
|||||||||||
| Financial ratios: |
|||||||||||||||||||||
| Return on average assets (1) |
(3.56)% |
(0.19)% |
0.33% |
(0.19)% |
(7.90)% |
||||||||||||||||
| Return on average equity (1) |
(35.97)% |
(1.96)% |
3.48% |
(2.14)% |
(96.57)% |
||||||||||||||||
| Return on average tangible equity (1),(2) |
(41.97)% |
(2.29)% |
4.10% |
(2.54)% |
(116.91)% |
||||||||||||||||
| Net interest margin (1) |
3.48% |
3.54% |
3.61% |
3.59% |
3.26% |
||||||||||||||||
| Efficiency ratio |
91.37% |
83.69% |
84.42% |
89.71% |
132.13% |
||||||||||||||||
| Efficiency ratio, excluding non-operating income and non-operating expense |
91.37% |
83.69% |
84.42% |
89.71% |
130.57% |
||||||||||||||||
| Per share data: |
|||||||||||||||||||||
| Income (loss) per common share: |
|||||||||||||||||||||
| Basic |
$ |
(0.34) |
$ |
(0.02) |
$ |
0.03 |
$ |
(0.02) |
$ |
(1.25) |
|||||||||||
| Diluted |
$ |
(0.34) |
$ |
(0.02) |
$ |
0.03 |
$ |
(0.02) |
$ |
(1.25) |
|||||||||||
| Book value |
$ |
3.30 |
$ |
3.61 |
$ |
3.60 |
$ |
3.60 |
$ |
3.62 |
|||||||||||
| Tangible book value |
$ |
2.78 |
$ |
3.08 |
$ |
3.06 |
$ |
3.03 |
$ |
3.02 |
|||||||||||
| Average basic shares |
85,776,858 |
85,587,878 |
84,429,644 |
82,585,859 |
53,575,346 |
||||||||||||||||
| Average diluted shares |
85,776,858 |
85,587,878 |
84,538,449 |
82,585,859 |
53,575,346 |
||||||||||||||||
| Operating non-interest income (loss): |
|||||||||||||||||||||
| Service charges on deposit accounts |
$ |
2,668 |
2,799 |
2,838 |
$ |
2,702 |
$ |
2,550 |
|||||||||||||
| Other service charges |
73 |
71 |
85 |
88 |
86 |
||||||||||||||||
| Gain on sale of loans |
716 |
906 |
708 |
708 |
925 |
||||||||||||||||
| Net gain (loss) on sale of available for sale securities |
- |
280 |
- |
2,421 |
(1,013) |
||||||||||||||||
| Investment products income |
432 |
453 |
562 |
1,010 |
888 |
||||||||||||||||
| BOLI income |
516 |
1,309 |
549 |
560 |
546 |
||||||||||||||||
| Derivative credit valuation adjustment |
(314) |
(214) |
(309) |
(3,624) |
(8,391) |
||||||||||||||||
| Other income |
1,428 |
1,200 |
1,337 |
1,128 |
560 |
||||||||||||||||
| Total operating non-interest income (loss) |
5,519 |
6,804 |
5,770 |
4,993 |
(3,849) |
||||||||||||||||
| Non-operating loss(3): |
|||||||||||||||||||||
| Net impairment losses on available for sale securities recognized in earnings |
- |
- |
- |
- |
(250) |
||||||||||||||||
| Total non-operating loss |
- |
- |
- |
- |
(250) |
||||||||||||||||
| Total non-interest income (loss) |
$ |
5,519 |
$ |
6,804 |
5,770 |
$ |
4,993 |
$ |
(4,099) |
||||||||||||
| Operating non-interest expense: |
|||||||||||||||||||||
| Salaries and employee benefits |
$ |
14,771 |
$ |
13,011 |
$ |
13,619 |
$ |
12,885 |
$ |
12,986 |
|||||||||||
| Occupancy expense |
3,049 |
3,643 |
3,021 |
3,305 |
3,404 |
||||||||||||||||
| Equipment expense |
1,765 |
1,858 |
1,899 |
1,903 |
1,682 |
||||||||||||||||
| Data processing expense |
1,056 |
1,118 |
1,058 |
1,111 |
1,065 |
||||||||||||||||
| Amortization of intangible assets |
921 |
921 |
922 |
921 |
921 |
||||||||||||||||
| Insurance expense |
1,479 |
1,433 |
1,479 |
1,261 |
2,013 |
||||||||||||||||
| Professional fees |
479 |
412 |
879 |
1,215 |
765 |
||||||||||||||||
| Advertising expense |
297 |
664 |
395 |
1,322 |
565 |
||||||||||||||||
| Problem loan costs |
1,477 |
1,866 |
1,506 |
1,863 |
3,107 |
||||||||||||||||
| Real estate owned expense (income),net |
81 |
108 |
448 |
635 |
(5) |
||||||||||||||||
| Office supplies expense |
319 |
323 |
315 |
324 |
345 |
||||||||||||||||
| Other expense |
1,870 |
1,869 |
1,432 |
1,499 |
934 |
||||||||||||||||
| Total non-interest expense |
27,564 |
27,226 |
26,973 |
28,244 |
27,782 |
||||||||||||||||
| (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 March 31, |
|||||||||||||||||||||||
| 2012 |
2011 |
||||||||||||||||||||||
| Average |
Income/ |
Yield/ |
Average |
Income/ |
Yield/ |
||||||||||||||||||
| Balance |
Expense |
Cost |
Balance |
Expense |
Cost |
||||||||||||||||||
| Interest-earning assets: |
|||||||||||||||||||||||
| Loans receivable (1),(2): |
|||||||||||||||||||||||
| Commercial and industrial |
$ |
1,849,216 |
$ |
21,275 |
4.60% |
$ |
2,072,519 |
$ |
23,152 |
4.47% |
|||||||||||||
| Home equity |
220,411 |
2,244 |
4.07 |
235,962 |
2,550 |
4.32 |
|||||||||||||||||
| Second mortgage |
41,346 |
590 |
5.71 |
53,402 |
775 |
5.81 |
|||||||||||||||||
| Residential real estate |
123,567 |
1,376 |
4.45 |
73,662 |
1,005 |
5.46 |
|||||||||||||||||
| Other |
41,733 |
719 |
6.89 |
55,847 |
946 |
6.78 |
|||||||||||||||||
| Total loans receivable |
2,276,273 |
26,204 |
4.60 |
2,491,392 |
28,428 |
4.56 |
|||||||||||||||||
| Investment securities(3) |
550,498 |
3,420 |
2.49 |
480,964 |
3,934 |
3.27 |
|||||||||||||||||
| Interest-earning bank balances |
29,851 |
17 |
|||||||||||||||||||||
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