Sun Bancorp, Inc. Reports Fourth Quarter 2012 Results
- Risk reduction strategies accelerate leading to a 37% reduction in NPL's during the 4th quarter as NPL / Loans falls to 3.53%(1)
- Revenue growth initiatives progressing as annual core commercial loan production increases 39% and annual Sun Home Loans loan closings increase by 246%
- Solid capital ratios after risk reduction efforts with Total Risk Based Capital Ratio of 13.7% and Tier 1 Leverage Ratio of 9.3%
- Management team enhanced with appointments of new CFO and CRO
VINELAND, N.J., Jan. 23, 2013 /PRNewswire/ -- Sun Bancorp, Inc. (NASDAQ: SNBC) reported today a net loss available to common shareholders of $25.0 million, or $0.29 per diluted share, for the quarter ended December 31, 2012, compared to a net loss available to common shareholders of $1.5 million, or $0.02 per diluted share, for the fourth quarter of 2011.
The following are key items and events that occurred during the fourth quarter of 2012:
- As part of a continuing strategy to reduce balance sheet risk, the Company signed a definitive agreement on January 17, 2013 to sell $45.8 million of loans, having a book balance of $35.1 million, to a third-party investor for gross proceeds of $22.0 million. The transaction, which is expected to close in the first quarter of 2013, resulted in a net loss of $7.6 million after accounting for loan loss reserves, customer derivative termination costs and other expenses. As the formal approval to sell these loans occurred during 2012, the related loans were transferred to held-for-sale as of December 31, 2012 at fair value. In addition, the Company reached workout settlements with several troubled borrowers, resulting in a loss of $6.0 million.
- Provision expense totaled $24.2 million during the fourth quarter of 2012 as compared to $1.9 million in the third quarter of 2012 and $6.8 million in the fourth quarter of 2011. The allowance for loan losses equaled $46.5 million at quarter end, a decrease of $2.5 million from September 30, 2012, and an increase of $4.8 million from December 31, 2011. The allowance for loan losses equaled 2.04% of gross loans held-for-investment and 57.8% of non-performing loans held for investment as compared to 2.12% and 40.6% and 1.82% and 38.7%, respectively, at September 30, 2012 and December 31, 2011.
- Commercial loan production was $114 million during the fourth quarter versus $113 million in the linked quarter. The Company continues to maintain a disciplined underwriting and pricing strategy in this uncertain economic environment.
- The net interest margin equaled 3.30% for the fourth quarter of 2012 versus 3.41% in the linked quarter. The current quarter margin was negatively impacted by the maturity of legacy commercial loans as well as the overall low interest rate environment.
- Non-interest income decreased $2.8 million to $6.8 million during the fourth quarter of 2012 as compared to the linked quarter primarily due to an increase of $1.6 million in swap termination fees, of which $979 thousand was a result of liabilities assumed from the loan sale, and the remaining fees related to other problem loan workouts. Gains on the sale of mortgage loans declined by $510 thousand as the linked quarter included a $1.5 million positive mark-to-market adjustment from a fair value election on its loans held-for-sale, effective July 1, 2012. The Company's residential mortgage operations remain strong as $236 million in residential mortgage loans were closed and $149 million sold during the fourth quarter compared to $240 million and $120 million, respectively, in the linked quarter. The Company originated $665 million in 2012 versus $192 million in 2011.
- Total risk-based capital was 13.73% at December 31, 2012, well above 11.50%, the regulatory required level.
"This was an impactful quarter for Sun, culminating an impactful year of successful risk reduction and revenue growth strategies," said Thomas X. Geisel, Sun's President and Chief Executive Officer. "We were able to simultaneously strengthen our balance sheet by significantly reducing classified assets to near peer levels and at the same time demonstrate our competitive advantage with meaningful commercial and mortgage loan production. In 2013, we will continue with a laser like focus on how we deliver the bank to our customers and provide value towards their financial goal achievement."
Discussion of Results:
Balance Sheet
- Total assets were $3.22 billion at December 31, 2012, as compared to $3.18 billion at September 30, 2012 and December 31, 2011.
- Gross loans held-for-investment were $2.27 billion at December 31, 2012, as compared to $2.31 billion at September 30, 2012 and $2.29 billion at December 31, 2011. This decrease is the result of the Company's aggressive problem loan workout strategies implemented in 2012.
- Deposits increased by $66.4 million from the linked quarter to $2.71 billion at December 31, 2012. The increase was due to an increase in short-term time deposits.
- Borrowings increased by $23.0 million from the linked quarter in order to fund the continued residential loan growth.
Net Interest Income and Margin
- On a tax equivalent basis, net interest income decreased $355 thousand over the linked quarter to $24.2 million. The net interest margin decreased 11 basis points to 3.30% from 3.41% for the linked quarter, and 24 basis points as compared to the same quarter in 2011. The average yield on interest-earning assets decreased 12 basis points over the linked quarter from 3.99% to 3.87%. This decrease is due to a corresponding decline in loan yields and excess cash. The Company held $170 million of cash as of December 31, 2012. The commercial loan yields declined seven basis points due to lower rates on new originations combined with pay-offs of higher yielding legacy loans and residential real estate yields decreased 21 basis points due to significantly lower market rates. The margin variance from the prior year is due to the similar pressures in the current interest rate environment.
Non-Interest Income
- Non-interest income was $6.8 million for the quarter ended December 31, 2012, a decrease of $2.8 million from $9.6 million for the linked quarter and $11 thousand above the comparable prior year quarter's level of $6.8 million. The decrease from the linked quarter was primarily attributable to an increase of $1.6 million in swap termination fees as a result of the Company's aggressive workout strategies. Gains on the sale of mortgage loans declined $510 thousand as the linked quarter included a $1.5 million positive mark-to-market adjustment from a fair value election on its loans held-for-sale, effective July 1, 2012. Excluding mark-to-market adjustments, normalized mortgage gains were $3.2 million in the fourth quarter of 2012 versus $2.7 million in the linked quarter. The Company also had a decrease of $424 thousand in deposit service charges from the linked quarter due to declining volumes.
Non-Interest Expense
- The Company incurred $31.6 million of non-interest expense in the fourth quarter of 2012, an increase of $738 thousand over the linked quarter and an increase of $4.4 million from the comparable prior year quarter. Professional fees increased by $677 thousand over the linked quarter due to additional compliance related consulting costs. Advertising costs were $576 thousand higher than the linked quarter due to ongoing deposit promotions as well as the residential mortgage growth. Reserves for unused credit commitments also increased by $280 thousand in the fourth quarter of 2012 over the linked quarter. These increases were partially offset by a $1.4 million decline in problem loan costs as the Company has reached a more normalized run rate for problem assets. The increase in non-interest expense from the prior year period is due primarily to additional salaries and benefits expense associated with the mortgage origination expansion in 2012 as well as increased professional fees and advertising expenses.
Asset Quality
- The provision for loan losses for the fourth quarter of 2012 was $24.2 million, as compared to $1.9 million in the linked quarter and $6.8 million in the comparable prior year quarter. The allowance for loan losses was $46.5 million at December 31, 2012, or 2.04% of gross loans held-for-investment, as compared to an allowance for loan losses to gross loans held-for-investment ratio of 1.82% at December 31, 2011 and 2.12% at September 30, 2012. Net charge-offs recorded in the current quarter were $26.7 million, of which $13.1 million related to the loans sale, or 1.12% of average loans, as compared to $4.2 million, or 0.18% of average loans for the linked quarter and $20.4 million, or 0.87% of average loans outstanding for the same quarter in the prior year.
- Total non-performing assets were $100.6 million, or 4.11% of total gross loans held-for-investment, loans held-for-sale and real estate owned at December 31, 2012, as compared to $126.4 million, or 5.32% and $112.7 million, or 4.86%, respectively, at September 30, 2012 and December 31, 2011. Non-performing loans decreased to $93.2 million at December 31, 2012 as compared to $120.8 million at September 30, 2012. The December 31, 2012 balance is inclusive of $12.7 million of commercial loans held-for-sale. This decrease is due to charge-downs from the aforementioned pending loan sale and problem loan workouts completed in the fourth quarter.
Capital
- Stockholders' equity totaled $262.6 million at December 31, 2012 compared to $309.1 million at December 31, 2011. The Company's tangible equity to tangible assets ratio was 6.95% at December 31, 2012, as compared to 8.41% at December 31, 2011. At December 31, 2012, the Company's total risk-based capital ratio, Tier 1 capital ratio and leverage capital ratio were approximately 13.73%, 11.83%, and 9.30%, respectively. At December 31, 2012, Sun National Bank's total risk-based capital ratio, Tier 1 capital ratio and leverage capital ratio were approximately 13.04%, 11.78%, and 9.26%, respectively.
Impact of Hurricane Sandy
- The Company incurred $4.6 million impact due to Hurricane Sandy. This is composed of $4.4 million of additional loan loss reserves and $222 thousand of repair costs for facilities. So far, we have not seen any material deterioration in our loan portfolio due to Sandy. We completed a thorough assessment and thought it would be prudent to add an additional reserve to capture the potential risk as a result of the storm.
The Company will hold its regularly scheduled conference call on Thursday, January 24, 2013, 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 $3.22 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 as defined in the Private Securities Litigation Reform Act of 1995, concerning the financial condition, results of operations and business of the Company. Forward-looking statements are statements that include projections, predictions, expectations or beliefs about events or results or otherwise are not statements of historical facts, including statements related to the Company's continuing strategy to strengthen its balance sheet. Actual results and trends could differ materially from those set forth in such statements. We caution that such statements are subject to a number of uncertainties, including those detailed in the Company's filings pursuant to the Securities Exchange Act of 1934, as amended. Therefore, readers should not place undue reliance on any forward-looking statements. The Company does not undertake, and specifically disclaims, any obligation to publicly release the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
Non-GAAP Financial Measures
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, 2012 and 2011 were $210 thousand and $271 thousand, respectively. The fully taxable equivalent adjustments for the twelve months ended December 31, 2012 and 2011 were $870 thousand and $1.3 million, respectively. The fully taxable equivalent adjustment for the three months ended September 30, 2012 was $212 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. There were no non-operating income (loss) items for the three months ended December 31, 2012, September 30, 2012, June 30, 2012, and December 31, 2011. Non-operating loss during the twelve months ended December 31, 2011 was $250 thousand.
(1) NPL/Loans excludes loans held-for-sale.
SUN BANCORP, INC. AND SUBSIDIARIES |
||||||||||||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
||||||||||||||||||||||||||||
(Dollars in thousands, except per share amounts) |
||||||||||||||||||||||||||||
For the Three Months Ended |
For the Twelve Months Ended |
|||||||||||||||||||||||||||
December 31, |
December 31, |
|||||||||||||||||||||||||||
2012 |
2011 |
2012 |
2011 |
|||||||||||||||||||||||||
Profitability for the period: |
||||||||||||||||||||||||||||
Net interest income |
$ |
23,981 |
$ |
25,729 |
$ |
97,848 |
$ |
103,528 |
||||||||||||||||||||
Provision for loan losses |
24,154 |
6,826 |
57,215 |
74,266 |
||||||||||||||||||||||||
Non-interest income |
6,815 |
6,804 |
29,450 |
13,468 |
||||||||||||||||||||||||
Non-interest expense |
31,598 |
27,226 |
120,608 |
110,225 |
||||||||||||||||||||||||
Loss before income taxes |
(24,956) |
(1,519) |
(50,525) |
(67,495) |
||||||||||||||||||||||||
Net loss |
(24,956) |
(1,519) |
(50,491) |
(67,505) |
||||||||||||||||||||||||
Net loss available to common shareholders |
$ |
(24,956) |
$ |
(1,519) |
$ |
(50,491) |
$ |
(67,505) |
||||||||||||||||||||
Financial ratios: |
||||||||||||||||||||||||||||
Return on average assets(1) |
(3.13) |
% |
(0.19) |
% |
(1.60) |
% |
(2.05) |
% |
||||||||||||||||||||
Return on average equity(1) |
(34.70) |
% |
(1.96) |
% |
(17.19) |
% |
(22.57) |
% |
||||||||||||||||||||
Return on average tangible equity(1),(2) |
(40.61) |
% |
(2.29) |
% |
(20.17) |
% |
(26.77) |
% |
||||||||||||||||||||
Net interest margin(1) |
3.30 |
% |
3.54 |
% |
3.43 |
% |
3.50 |
% |
||||||||||||||||||||
Efficiency ratio |
102.60 |
% |
83.69 |
% |
94.21 |
% |
94.21 |
% |
||||||||||||||||||||
Efficiency ratio, excluding non-operating income and non-operating expense(3) |
91.55 |
% |
81.02 |
% |
89.87 |
% |
81.05 |
% |
||||||||||||||||||||
Loss per common share: |
||||||||||||||||||||||||||||
Basic |
$ |
(0.29) |
$ |
(0.02) |
$ |
(0.59) |
$ |
(0.88) |
||||||||||||||||||||
Diluted |
$ |
(0.29) |
$ |
(0.02) |
$ |
(0.59) |
$ |
(0.88) |
||||||||||||||||||||
Average equity to average assets |
9.01 |
% |
9.62 |
% |
9.31 |
% |
9.10 |
% |
||||||||||||||||||||
December 31, |
||||||||||||||||||||||||||||
2012 |
2011 |
|||||||||||||||||||||||||||
At period-end: |
||||||||||||||||||||||||||||
Total assets |
$ |
3,224,031 |
$ |
3,183,926 |
||||||||||||||||||||||||
Total deposits |
2,713,224 |
2,667,977 |
||||||||||||||||||||||||||
Loans receivable, net of allowance for loan losses |
2,228,217 |
2,249,455 |
||||||||||||||||||||||||||
Loans held-for-sale(4) |
123,005 |
23,192 |
||||||||||||||||||||||||||
Investments |
461,980 |
532,715 |
||||||||||||||||||||||||||
Borrowings |
70,992 |
31,269 |
||||||||||||||||||||||||||
Junior subordinated debentures |
92,786 |
92,786 |
||||||||||||||||||||||||||
Shareholders' equity |
262,596 |
309,083 |
||||||||||||||||||||||||||
Credit quality and capital ratios: |
||||||||||||||||||||||||||||
Allowance for loan losses to gross loans held-for-investment |
2.04 |
% |
1.82 |
% |
||||||||||||||||||||||||
Non-performing loans held-for-investment to gross loans held-for-investment |
3.53 |
% |
4.69 |
% |
||||||||||||||||||||||||
Non-performing assets to gross loans held-for-investment, loans held-for-sale and real estate owned |
4.18 |
% |
4.86 |
% |
||||||||||||||||||||||||
Allowance for loan losses to non-performing loans held-for-investment |
57.81 |
% |
38.69 |
% |
||||||||||||||||||||||||
Total capital (to risk-weighted assets): |
||||||||||||||||||||||||||||
Sun Bancorp, Inc. |
13.73 |
% |
15.22 |
% |
||||||||||||||||||||||||
Sun National Bank |
13.04 |
% |
13.39 |
% |
||||||||||||||||||||||||
Tier 1 capital (to risk-weighted assets): |
||||||||||||||||||||||||||||
Sun Bancorp, Inc. |
11.83 |
% |
13.96 |
% |
||||||||||||||||||||||||
Sun National Bank |
11.78 |
% |
12.13 |
% |
||||||||||||||||||||||||
Leverage ratio: |
||||||||||||||||||||||||||||
Sun Bancorp, Inc. |
9.30 |
% |
11.09 |
% |
||||||||||||||||||||||||
Sun National Bank |
9.26 |
% |
9.64 |
% |
||||||||||||||||||||||||
Book value per common share |
$ |
3.05 |
$ |
3.61 |
||||||||||||||||||||||||
Tangible book value per common share |
$ |
2.57 |
$ |
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 December 31, 2012 and December 31, 2011 excludes gain on sale of investment securities of $196 thousand and $(280) thousand, respectively and derivative credit adjustment of $1.8 million and $214 thousand, respectively. Non-interest expense for the three months ended December 31, 2012 excludes $701 thousand of loan sale related costs. Noninterest income for the twelve months ended December 31, 2012 and December 31, 2011 excludes gain on sale of investment securities of $234 thousand and $(1.6) million, respectively and derivative credit adjustment of $2.3 million and $8.7 million, respectively 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 expense for the twelve months ended December 31, 2012 and December 31, 2011 excludes $701 thousand and $2.3 million of loan sale related costs. |
||||||||||||||||||||||||||||
(4) Loans held-for-sale includes $101.0 million of residential real estate loans and $22.0 million of commercial real estate loans measured at fair value at December 31, 2012. The December 31, 2011 balance includes $23.2 million of residential real estate loans measured at cost. |
||||||||||||||||||||||||||||
SUN BANCORP, INC. AND SUBSIDIARIES |
||||||
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) |
||||||
(Dollars in thousands, except par value amounts) |
||||||
December 31, 2012 |
December 31, 2011 |
|||||
ASSETS |
||||||
Cash and due from banks |
$ |
77,564 |
$ |
68,773 |
||
Interest-earning bank balances |
92,052 |
51,049 |
||||
Cash and cash equivalents |
169,616 |
119,822 |
||||
Investment securities available for sale (amortized cost of $439,488 and $514,488 at December 31, 2012 and December 31, 2011, respectively) |
443,182 |
515,545 |
||||
Investment securities held to maturity (estimated fair value of $960 and $1,413 at December 31, 2012 and December 31, 2011, respectively) |
912 |
1,344 |
||||
Loans receivable (net of allowance for loan losses of $46,482 and $41,667 at December 31, 2012 and December 31, 2011, respectively) |
2,228,217 |
2,249,455 |
||||
Loans held-for-sale, at cost |
- |
23,192 |
||||
Loans held-for-sale, at fair value |
123,005 |
- |
||||
Restricted equity investments, at cost |
17,886 |
15,826 |
||||
Bank properties and equipment, net |
50,805 |
54,756 |
||||
Real estate owned |
7,473 |
5,020 |
||||
Accrued interest receivable |
8,054 |
8,912 |
||||
Goodwill |
38,188 |
38,188 |
||||
Intangible assets |
3,262 |
6,947 |
||||
Bank owned life insurance (BOLI) |
76,858 |
74,871 |
||||
Other assets |
56,573 |
70,048 |
||||
Total assets |
$ |
3,224,031 |
$ |
3,183,926 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||
Liabilities: |
||||||
Deposits |
$ |
2,713,224 |
$ |
2,667,977 |
||
Securities sold under agreements to repurchase – customers |
1,968 |
5,668 |
||||
Advances from the Federal Home Loan Bank of New York (FHLBNY) |
61,415 |
2,733 |
||||
Securities sold under agreements to repurchase – FHLBNY |
- |
15,000 |
||||
Obligations under capital lease |
7,609 |
7,868 |
||||
Junior subordinated debentures |
92,786 |
92,786 |
||||
Deferred taxes, net |
1,509 |
432 |
||||
Other liabilities |
82,924 |
82,379 |
||||
Total liabilities |
2,961,435 |
2,874,843 |
||||
Shareholders' equity: |
||||||
Preferred stock, $1 par value, 1,000,000 shares authorized; none issued |
- |
- |
||||
Common stock, $1 par value, 100,000,000 shares authorized; 88,290,735 shares issued and 86,184,012 shares outstanding at December 31, 2012; 87,825,038 shares issued and 85,718,315 shares outstanding at December 31, 2011 |
88,301 |
87,825 |
||||
Additional paid-in capital |
506,537 |
504,508 |
||||
Retained deficit |
(308,010) |
(257,520) |
||||
Accumulated other comprehensive income |
2,186 |
625 |
||||
Deferred compensation plan trust |
(256) |
(193) |
||||
Treasury stock at cost, 2,106,723 shares at December 31, 2012 and December 31, 2011 |
(26,162) |
(26,162) |
||||
Total shareholders' equity |
262,596 |
309,083 |
||||
Total liabilities and shareholders' equity |
$ |
3,224,031 |
$ |
3,183,926 |
SUN BANCORP, INC. AND SUBSIDIARIES |
||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
||||||||||||||||
(Dollars in thousands, except share and per share amounts) |
||||||||||||||||
For the Three Months Ended December 31, |
For the Twelve Months |
|||||||||||||||
2012 |
2011 |
2012 |
2011 |
|||||||||||||
INTEREST INCOME |
||||||||||||||||
Interest and fees on loans |
$ |
25,670 |
$ |
27,678 |
$ |
103,707 |
$ |
112,793 |
||||||||
Interest on taxable investment securities |
1,860 |
2,421 |
9,138 |
10,507 |
||||||||||||
Interest on non-taxable investment securities |
390 |
503 |
1,618 |
2,487 |
||||||||||||
Dividends on restricted equity investments |
235 |
214 |
970 |
893 |
||||||||||||
Total interest income |
28,155 |
30,816 |
115,433 |
126,680 |
||||||||||||
INTEREST EXPENSE |
||||||||||||||||
Interest on deposits |
3,143 |
4,041 |
13,553 |
18,737 |
||||||||||||
Interest on funds borrowed |
460 |
351 |
1,438 |
1,418 |
||||||||||||
Interest on junior subordinated debentures |
571 |
695 |
2,594 |
2,997 |
||||||||||||
Total interest expense |
4,174 |
5,087 |
17,585 |
23,152 |
||||||||||||
Net interest income |
23,981 |
25,729 |
97,848 |
103,528 |
||||||||||||
PROVISION FOR LOAN LOSSES |
24,154 |
6,826 |
57,215 |
74,266 |
||||||||||||
Net Interest (loss) income after provision for loan losses |
(173) |
18,903 |
40,633 |
29,262 |
||||||||||||
NON-INTEREST INCOME |
||||||||||||||||
Service charges on deposit accounts |
2,414 |
2,799 |
10,660 |
10,889 |
||||||||||||
Other service charges |
72 |
71 |
294 |
330 |
||||||||||||
Gain on sale of loans |
3,694 |
906 |
10,479 |
3,247 |
||||||||||||
Impairment losses on available for sale securities |
- |
- |
- |
(250) |
||||||||||||
Gain (loss) on sale of investment securities |
(196) |
447 |
234 |
1,855 |
||||||||||||
Investment products income |
606 |
453 |
2,296 |
2,913 |
||||||||||||
BOLI income |
488 |
1,309 |
1,986 |
2,964 |
||||||||||||
Derivative credit valuation adjustment |
(1,750) |
(214) |
(2,275) |
(12,538) |
||||||||||||
Other |
1,487 |
1,033 |
5,776 |
4,058 |
||||||||||||
Total non-interest income |
6,815 |
6,804 |
29,450 |
13,468 |
||||||||||||
NON-INTEREST EXPENSE |
||||||||||||||||
Salaries and employee benefits |
15,845 |
13,011 |
62,500 |
52,501 |
||||||||||||
Occupancy expense |
3,416 |
3,643 |
13,011 |
13,373 |
||||||||||||
Equipment expense |
2,005 |
1,858 |
7,399 |
7,342 |
||||||||||||
Amortization of intangible assets |
921 |
921 |
3,685 |
3,685 |
||||||||||||
Data processing expense |
1,138 |
1,118 |
4,384 |
4,352 |
||||||||||||
Professional fees |
1,389 |
525 |
3,459 |
3,563 |
||||||||||||
Insurance expenses |
1,506 |
1,433 |
5,824 |
6,186 |
||||||||||||
Advertising expense |
1,040 |
664 |
2,809 |
2,946 |
||||||||||||
Problem loan expense |
776 |
1,866 |
5,681 |
8,342 |
||||||||||||
Real estate owned expense, net |
1,008 |
108 |
2,358 |
1,186 |
||||||||||||
Office supplies expense |
298 |
323 |
1,247 |
1,307 |
||||||||||||
Other |
2,256 |
1,756 |
8,251 |
5,442 |
||||||||||||
Total non-interest expense |
31,598 |
27,226 |
120,608 |
110,225 |
||||||||||||
LOSS BEFORE INCOME TAXES |
(24,956) |
(1,519) |
(50,525) |
(67,495) |
||||||||||||
INCOME TAX (BENEFIT) EXPENSE |
- |
- |
(34) |
10 |
||||||||||||
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS |
$ |
(24,956) |
$ |
(1,519) |
$ |
(50,491) |
$ |
(67,505) |
||||||||
Basic loss per share |
$ |
(0.29) |
$ |
(0.02) |
$ |
(0.59) |
$ |
(0.88) |
||||||||
Diluted loss per share |
$ |
(0.29) |
$ |
(0.02) |
$ |
(0.59) |
$ |
(0.88) |
||||||||
Weighted average shares – basic |
86,082,669 |
85,587,878 |
85,937,110 |
76,653,990 |
||||||||||||
Weighted average shares - diluted |
86,082,669 |
85,587,878 |
85,937,110 |
76,653,990 |
SUN BANCORP, INC. AND SUBSIDIARIES |
||||||||||||||
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) |
||||||||||||||
(Dollars in thousands) |
||||||||||||||
2012 |
2012 |
2012 |
2012 |
2011 |
||||||||||
Q4 |
Q3 |
Q2 |
Q1 |
Q4 |
||||||||||
Balance sheet at quarter end: |
||||||||||||||
Cash and cash equivalents |
$ |
169,616 |
$ |
83,854 |
$ |
115,891 |
$ |
87,553 |
$ |
119,822 |
||||
Investment securities |
461,980 |
527,034 |
549,849 |
576,457 |
532,715 |
|||||||||
Loans held-for-investment: |
||||||||||||||
Commercial and industrial |
1,726,073 |
1,802,060 |
1,794,830 |
1,820,054 |
1,878,026 |
|||||||||
Home equity |
207,814 |
212,911 |
217,768 |
219,926 |
224,517 |
|||||||||
Second mortgage |
30,842 |
32,610 |
36,429 |
38,815 |
41,470 |
|||||||||
Residential real estate |
271,385 |
224,346 |
153,373 |
109,807 |
100,438 |
|||||||||
Other |
38,585 |
39,069 |
42,486 |
36,952 |
46,671 |
|||||||||
Total gross loans held-for-investment |
2,274,699 |
2,310,996 |
2,244,886 |
2,225,554 |
2,291,122 |
|||||||||
Allowance for loan losses |
(46,482) |
(49,016) |
(51,394) |
(52,127) |
(41,667) |
|||||||||
Net loans held-for-investment |
2,228,217 |
2,261,980 |
2,193,492 |
2,173,427 |
2,249,455 |
|||||||||
Loans held-for-sale |
123,005 |
60,676 |
24,672 |
25,034 |
23,192 |
|||||||||
Goodwill |
38,188 |
38,188 |
38,188 |
38,188 |
38,188 |
|||||||||
Intangible assets |
3,262 |
4,183 |
5,104 |
6,025 |
6,947 |
|||||||||
Total assets |
3,224,031 |
3,180,263 |
3,133,487 |
3,113,269 |
3,183,926 |
|||||||||
Total deposits |
2,713,224 |
2,646,807 |
2,608,034 |
2,631,652 |
2,667,977 |
|||||||||
Federal funds purchased |
- |
30,000 |
- |
- |
- |
|||||||||
Securities sold under agreements to repurchase – customers |
1,968 |
3,587 |
5,454 |
5,870 |
5,668 |
|||||||||
Advances from FHLBNY |
61,415 |
16,749 |
22,080 |
2,408 |
2,733 |
|||||||||
Securities sold under agreements to repurchase – FHLBNY |
- |
20,000 |
15,000 |
15,000 |
15,000 |
|||||||||
Obligations under capital lease |
7,609 |
7,675 |
7,740 |
7,805 |
7,868 |
|||||||||
Junior subordinated debentures |
92,786 |
92,786 |
92,786 |
92,786 |
92,786 |
|||||||||
Total shareholders' equity |
262,596 |
287,480 |
284,768 |
283,163 |
309,083 |
|||||||||
Quarterly average balance sheet: |
||||||||||||||
Loans(1): |
||||||||||||||
Commercial and industrial |
$ |
1,788,347 |
$ |
1,805,623 |
$ |
1,815,704 |
$ |
1,849,216 |
$ |
1,910,635 |
||||
Home equity |
210,085 |
215,542 |
218,910 |
220,411 |
226,345 |
|||||||||
Second mortgage |
32,442 |
35,816 |
38,545 |
41,346 |
44,600 |
|||||||||
Residential real estate |
319,427 |
230,259 |
155,479 |
123,567 |
111,514 |
|||||||||
Other |
32,444 |
33,658 |
34,765 |
41,733 |
46,248 |
|||||||||
Total gross loans |
2,382,745 |
2,320,898 |
2,263,403 |
2,276,273 |
2,339,342 |
|||||||||
Securities and other interest-earning assets |
545,781 |
555,846 |
583,788 |
580,349 |
602,485 |
|||||||||
Total interest-earning assets |
2,928,526 |
2,876,744 |
2,847,191 |
2,856,622 |
2,941,827 |
|||||||||
Total assets |
3,193,607 |
3,153,668 |
3,116,627 |
3,154,762 |
3,229,699 |
|||||||||
Non-interest-bearing demand deposits |
511,813 |
504,936 |
493,707 |
487,088 |
536,558 |
|||||||||
Total deposits |
2,660,405 |
2,642,048 |
2,604,083 |
2,621,736 |
2,706,772 |
|||||||||
Total interest-bearing liabilities |
2,318,794 |
2,279,177 |
2,259,370 |
2,265,830 |
2,294,786 |
|||||||||
Total shareholders' equity |
287,698 |
289,129 |
285,667 |
312,281 |
310,786 |
|||||||||
Capital and credit quality measures: |
||||||||||||||
Total capital (to risk-weighted assets) (2): |
||||||||||||||
Sun Bancorp, Inc. |
13.73% |
14.58% |
14.61% |
14.49% |
15.22% |
|||||||||
Sun National Bank |
13.04% |
13.88% |
13.90% |
13.77% |
13.39% |
|||||||||
Tier 1 capital (to risk-weighted assets) (2): |
||||||||||||||
Sun Bancorp, Inc. |
11.83% |
13.00% |
13.00% |
12.86% |
13.96% |
|||||||||
Sun National Bank |
11.78% |
12.62% |
12.64% |
12.51% |
12.13% |
|||||||||
Leverage ratio: |
||||||||||||||
Sun Bancorp, Inc. |
9.30% |
10.44% |
10.45% |
10.21% |
11.09% |
|||||||||
Sun National Bank |
9.26% |
10.11% |
10.15% |
9.93% |
9.64% |
|||||||||
Average equity to average assets |
9.01% |
9.17% |
9.17% |
9.91% |
9.62% |
|||||||||
Allowance for loan losses to total gross loans held-for-investment |
2.04% |
2.12% |
2.29% |
2.34% |
1.82% |
|||||||||
Non-performing loans held-for-investment to gross loans held-for-investment |
3.53% |
5.23% |
4.63% |
5.15% |
4.69% |
|||||||||
Non-performing assets to gross loans held-for-investment, loans held-for-sale and real estate owned |
4.18% |
5.32% |
4.84% |
5.27% |
4.86% |
|||||||||
Allowance for loan losses to non-performing loans held-for-investment |
57.81% |
40.56% |
49.44% |
45.52% |
38.69% |
|||||||||
Other data: |
||||||||||||||
Net charge-offs |
(26,690) |
(4,246) |
(1,243) |
(20,223) |
(20,386) |
|||||||||
Non-performing assets: |
||||||||||||||
Non-accrual loans |
$ |
60,528 |
$ |
95,383 |
$ |
79,696 |
$ |
87,847 |
$ |
89,656 |
||||
Non-accrual loans held-for-sale |
10,240 |
- |
- |
- |
- |
|||||||||
Troubled debt restructurings, non-accrual |
18,244 |
25,454 |
24,256 |
26,674 |
17,875 |
|||||||||
Troubled debt restructurings, held-for-sale |
2,499 |
- |
- |
- |
- |
|||||||||
Loans past due 90 days and accruing |
1,638 |
- |
- |
74 |
154 |
|||||||||
Real estate owned, net |
7,473 |
5,513 |
6,116 |
4,165 |
5,020 |
|||||||||
Total non-performing assets |
100,622 |
126,350 |
110,068 |
118,760 |
112,705 |
|||||||||
(1) Average balances include non-performing loans and loans held-for-sale (2) December 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 |
2012 |
2012 |
2012 |
2011 |
|||||||||||||||||||||||||||||||
Q4 |
Q3 |
Q2 |
Q1 |
Q4 |
|||||||||||||||||||||||||||||||
Profitability for the quarter: |
|||||||||||||||||||||||||||||||||||
Tax-equivalent interest income |
$ |
28,367 |
$ |
28,681 |
$ |
29,619 |
$ |
29,641 |
$ |
31,087 |
|||||||||||||||||||||||||
Interest expense |
4,174 |
4,135 |
4,519 |
4,758 |
5,087 |
||||||||||||||||||||||||||||||
Tax-equivalent net interest income |
24,191 |
24,546 |
25,098 |
24,883 |
26,000 |
||||||||||||||||||||||||||||||
Tax-equivalent adjustment |
212 |
212 |
217 |
233 |
271 |
||||||||||||||||||||||||||||||
Provision for loan losses |
24,154 |
1,868 |
510 |
30,683 |
6,826 |
||||||||||||||||||||||||||||||
Non-interest income excluding net impairment losses on available for sale securities |
6,815 |
9,588 |
7,527 |
5,519 |
6,804 |
||||||||||||||||||||||||||||||
Non-interest expense excluding amortization of intangible assets |
30,677 |
29,938 |
29,666 |
26,643 |
26,305 |
||||||||||||||||||||||||||||||
Amortization of intangible assets |
921 |
922 |
921 |
921 |
921 |
||||||||||||||||||||||||||||||
(Loss) income before income taxes |
(24,956) |
1,194 |
1,313 |
(28,078) |
(1,519) |
||||||||||||||||||||||||||||||
Income tax benefit |
(34) |
- |
- |
- |
|||||||||||||||||||||||||||||||
Net (loss) income |
(24,956) |
1,228 |
1,313 |
(28,078) |
(1,519) |
||||||||||||||||||||||||||||||
Net (loss) income available to common shareholders |
$ |
(24,956) |
$ |
1,228 |
$ |
1,313 |
$ |
(28,078) |
$ |
(1,519) |
|||||||||||||||||||||||||
Financial ratios: |
|||||||||||||||||||||||||||||||||||
Return on average assets (1) |
(3.13) |
% |
0.16% |
0.17% |
(3.56)% |
(0.19)% |
|||||||||||||||||||||||||||||
Return on average equity (1) |
(34.70) |
% |
1.70% |
1.84% |
(35.97)% |
(1.96)% |
|||||||||||||||||||||||||||||
Return on average tangible equity (1),(2) |
(40.61) |
% |
1.99% |
2.17% |
(41.97)% |
(2.29)% |
|||||||||||||||||||||||||||||
Net interest margin (1) |
3.30 |
% |
3.41% |
3.53% |
3.48% |
3.54% |
|||||||||||||||||||||||||||||
Efficiency ratio |
102.60 |
% |
90.97% |
94.38% |
91.37% |
83.69% |
|||||||||||||||||||||||||||||
Per share data: |
|||||||||||||||||||||||||||||||||||
(Loss) income per common share: |
|||||||||||||||||||||||||||||||||||
Basic |
$ |
(0.29) |
$ |
0.01 |
$ |
0.02 |
$ |
(0.34) |
$ |
(0.02) |
|||||||||||||||||||||||||
Diluted |
$ |
(0.29) |
$ |
0.01 |
$ |
0.02 |
$ |
(0.34) |
$ |
(0.02) |
|||||||||||||||||||||||||
Book value |
$ |
3.05 |
$ |
3.34 |
$ |
3.31 |
$ |
3.30 |
$ |
3.61 |
|||||||||||||||||||||||||
Tangible book value |
$ |
2.57 |
$ |
2.85 |
$ |
2.81 |
$ |
2.78 |
$ |
3.08 |
|||||||||||||||||||||||||
Average basic shares |
86,082,669 |
86,001,929 |
85,884,671 |
85,776,858 |
85,587,878 |
||||||||||||||||||||||||||||||
Average diluted shares |
86,082,669 |
86,047,655 |
85,916,421 |
85,776,858 |
85,587,878 |
||||||||||||||||||||||||||||||
Operating non-interest income: |
|||||||||||||||||||||||||||||||||||
Service charges on deposit accounts |
$ |
2,414 |
$ |
2,848 |
$ |
2,730 |
$ |
2,668 |
$ |
2,799 |
|||||||||||||||||||||||||
Other service charges |
72 |
69 |
80 |
73 |
71 |
||||||||||||||||||||||||||||||
Gain on sale of loans |
3,694 |
4,204 |
1,865 |
716 |
906 |
||||||||||||||||||||||||||||||
Net gain on sale of available for sale securities |
(196) |
- |
430 |
- |
280 |
||||||||||||||||||||||||||||||
Investment products income |
606 |
510 |
748 |
432 |
453 |
||||||||||||||||||||||||||||||
BOLI income |
488 |
489 |
492 |
516 |
1,309 |
||||||||||||||||||||||||||||||
Derivative credit valuation adjustment |
(1,750) |
(198) |
(13) |
(314) |
(214) |
||||||||||||||||||||||||||||||
Other income |
1,487 |
1,666 |
1,195 |
1,428 |
1,200 |
||||||||||||||||||||||||||||||
Total non-interest income |
$ |
6,815 |
$ |
9,588 |
$ |
7,527 |
$ |
5,519 |
$ |
6,804 |
|||||||||||||||||||||||||
Operating non-interest expense: |
|||||||||||||||||||||||||||||||||||
Salaries and employee benefits |
$ |
15,845 |
$ |
16,128 |
$ |
15,756 |
$ |
14,771 |
$ |
13,011 |
|||||||||||||||||||||||||
Occupancy expense |
3,416 |
3,275 |
3,271 |
3,049 |
3,643 |
||||||||||||||||||||||||||||||
Equipment expense |
2,005 |
1,866 |
1,763 |
1,765 |
1,858 |
||||||||||||||||||||||||||||||
Amortization of intangible assets |
921 |
922 |
921 |
921 |
921 |
||||||||||||||||||||||||||||||
Data processing expense |
1,138 |
1,084 |
1,106 |
1,056 |
1,118 |
||||||||||||||||||||||||||||||
Professional fees |
1,389 |
713 |
833 |
524 |
525 |
||||||||||||||||||||||||||||||
Insurance expense |
1,506 |
1,375 |
1,464 |
1,479 |
1,433 |
||||||||||||||||||||||||||||||
Advertising expense |
1,040 |
464 |
1,008 |
297 |
664 |
||||||||||||||||||||||||||||||
Problem loan costs |
776 |
2,154 |
1,274 |
1,477 |
1,866 |
||||||||||||||||||||||||||||||
Real estate owned expense, net |
1,008 |
779 |
490 |
81 |
108 |
||||||||||||||||||||||||||||||
Office supplies expense |
298 |
302 |
328 |
319 |
323 |
||||||||||||||||||||||||||||||
Other expense |
2,256 |
1,798 |
2,373 |
1,825 |
1,756 |
||||||||||||||||||||||||||||||
Total non-interest expense |
$ |
31,598 |
$ |
30,860 |
$ |
30,587 |
$ |
27,564 |
$ |
27,226 |
(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 equals average equity less average identifiable intangible assets and goodwill. |
SUN BANCORP, INC. AND SUBSIDIARIES |
||||||||||||||||||||||||||||||||||||||||||
AVERAGE BALANCE SHEETS (Unaudited) |
||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended December 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 |
$ |
1,788,347 |
$ |
19,628 |
4.39 |
% |
$ |
1,910,635 |
$ |
22,542 |
4.72 |
% |
||||||||||||||||||||||||||||||
Home equity |
210,085 |
2,055 |
3.91 |
226,345 |
2,348 |
4.15 |
||||||||||||||||||||||||||||||||||||
Second mortgage |
32,442 |
470 |
5.79 |
44,600 |
656 |
5.88 |
||||||||||||||||||||||||||||||||||||
Residential real estate |
319,427 |
2,959 |
3.71 |
111,514 |
1,338 |
4.80 |
||||||||||||||||||||||||||||||||||||
Other |
32,444 |
559 |
6.89 |
46,248 |
794 |
6.87 |
||||||||||||||||||||||||||||||||||||
Total loans receivable |
2,382,745 |
25,671 |
4.31 |
2,339,342 |
27,678 |
4.73 |
||||||||||||||||||||||||||||||||||||
Investment securities(3) |
507,158 |
2,672 |
2.11 |
548,355 |
3,375 |
2.46 |
||||||||||||||||||||||||||||||||||||
Interest-earning bank balances |
38,623 |
24 |
0.25 |
54,130 |
34 |
0.25 |
||||||||||||||||||||||||||||||||||||
Total interest-earning assets |
2,928,526 |
28,367 |
3.87 |
2,941,827 |
31,087 |
4.23 |
||||||||||||||||||||||||||||||||||||
Non-interest earning assets: |
||||||||||||||||||||||||||||||||||||||||||
Cash and due from banks |
72,129 |
73,863 |
||||||||||||||||||||||||||||||||||||||||
Bank properties and equipment, net |
51,515 |
55,264 |
||||||||||||||||||||||||||||||||||||||||
Goodwill and intangible assets, net |
41,902 |
45,586 |
||||||||||||||||||||||||||||||||||||||||
Other assets |
99,535 |
113,159 |
||||||||||||||||||||||||||||||||||||||||
Total non-interest-earning assets |
265,081 |
287,872 |
||||||||||||||||||||||||||||||||||||||||
Total assets |
$ |
3,193,607 |
$ |
3,229,699 |
||||||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposit accounts: |
||||||||||||||||||||||||||||||||||||||||||
Interest-bearing demand deposits |
$ |
1,224,254 |
$ |
1,178 |
0.38 |
% |
$ |
1,271,991 |
$ |
1,435 |
0.45 |
% |
||||||||||||||||||||||||||||||
Savings deposits |
263,949 |
228 |
0.35 |
265,115 |
285 |
0.43 |
||||||||||||||||||||||||||||||||||||
Time deposits |
660,389 |
1,737 |
1.05 |
633,108 |
2,321 |
1.47 |
||||||||||||||||||||||||||||||||||||
Total interest-bearing deposit accounts |
2,148,592 |
3,143 |
0.59 |
2,170,214 |
4,041 |
0.74 |
||||||||||||||||||||||||||||||||||||
Short-term borrowings: |
||||||||||||||||||||||||||||||||||||||||||
Securities sold under agreements to repurchase - customers |
3,250 |
2 |
0.25 |
6,047 |
1 |
0.07 |
||||||||||||||||||||||||||||||||||||
Long-term borrowings: |
||||||||||||||||||||||||||||||||||||||||||
FHLBNY advances (4) |
66,527 |
332 |
2.00 |
17,842 |
219 |
4.91 |
||||||||||||||||||||||||||||||||||||
Obligations under capital lease |
7,639 |
127 |
6.65 |
7,897 |
131 |
6.64 |
||||||||||||||||||||||||||||||||||||
Junior subordinated debentures |
92,786 |
572 |
2.47 |
92,786 |
695 |
3.00 |
||||||||||||||||||||||||||||||||||||
Total borrowings |
170,202 |
1,033 |
2.43 |
124,572 |
1,046 |
3.36 |
||||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities |
2,318,794 |
4,176 |
0.72 |
2,294,786 |
5,087 |
0.89 |
||||||||||||||||||||||||||||||||||||
Non-interest bearing liabilities: |
||||||||||||||||||||||||||||||||||||||||||
Non-interest-bearing demand deposits |
511,813 |
536,558 |
||||||||||||||||||||||||||||||||||||||||
Other liabilities |
75,302 |
87,569 |
||||||||||||||||||||||||||||||||||||||||
Total non-interest bearing liabilities |
587,115 |
624,127 |
||||||||||||||||||||||||||||||||||||||||
Total liabilities |
2,905,909 |
2,918,913 |
||||||||||||||||||||||||||||||||||||||||
Shareholders' equity |
287,698 |
310,786 |
||||||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity |
$ |
3,193,607 |
$ |
3,229,699 |
||||||||||||||||||||||||||||||||||||||
Net interest income |
$ |
24,191 |
$ |
26,000 |
||||||||||||||||||||||||||||||||||||||
Interest rate spread (5) |
3.15 |
% |
3.34 |
% |
||||||||||||||||||||||||||||||||||||||
Net interest margin (6) |
3.30 |
% |
3.54 |
% |
||||||||||||||||||||||||||||||||||||||
Ratio of average interest-earning assets to average interest-bearing liabilities |
126.30 |
% |
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 December 31, 2012 and 2011 were $210 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. |
SUN BANCORP, INC. AND SUBSIDIARIES |
|||||||||||||||||||||||
AVERAGE BALANCE SHEETS (Unaudited) |
|||||||||||||||||||||||
(Dollars in thousands) |
|||||||||||||||||||||||
For the Twelve Months Ended December 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 |
$ |
1,814,626 |
$ |
82,165 |
4.53 |
% |
$ |
1,954,701 |
$ |
92,107 |
4.71 |
% |
|||||||||||
Home equity |
216,218 |
8,738 |
4.04 |
232,278 |
9,774 |
4.21 |
|||||||||||||||||
Second mortgage |
37,021 |
2,128 |
5.75 |
48,998 |
2,863 |
5.84 |
|||||||||||||||||
Residential real estate |
207,553 |
8,199 |
3.95 |
87,858 |
4,547 |
5.18 |
|||||||||||||||||
Other |
35,636 |
2,477 |
6.95 |
51,041 |
3,502 |
6.86 |
|||||||||||||||||
Total loans receivable |
2,311,054 |
103,707 |
4.49 |
2,374,876 |
112,793 |
4.75 |
|||||||||||||||||
Investment securities (3) |
537,710 |
12,529 |
2.33 |
505,006 |
14,940 |
2.96 |
|||||||||||||||||
Interest-earning bank balances |
28,646 |
68 |
0.24 |
117,830 |
288 |
0.24 |
|||||||||||||||||
Total interest-earning assets |
2,877,410 |
116,304 |
4.04 |
2,997,712 |
128,021 |
4.27 |
|||||||||||||||||
Non-interest earning assets: |
|||||||||||||||||||||||
Cash and due from banks |
73,000 |
72,455 |
|||||||||||||||||||||
Bank properties and equipment, net |
52,781 |
54,589 |
|||||||||||||||||||||
Goodwill and intangible assets, net |
43,280 |
46,961 |
|||||||||||||||||||||
Other assets |
108,299 |
114,158 |
|||||||||||||||||||||
Total non-interest-earning assets |
277,360 |
288,163 |
|||||||||||||||||||||
Total assets |
$ |
3,154,770 |
$ |
3,285,875 |
|||||||||||||||||||
Interest-bearing liabilities: |
|||||||||||||||||||||||
Interest-bearing deposit accounts: |
|||||||||||||||||||||||
Interest-bearing demand deposits |
$ |
1,225,609 |
$ |
4,778 |
0.39 |
% |
$ |
1,317,816 |
$ |
7,024 |
0.53 |
% |
|||||||||||
Savings deposits |
263,307 |
900 |
0.34 |
271,970 |
1,412 |
0.52 |
|||||||||||||||||
Time deposits |
643,822 |
7,876 |
1.22 |
675,464 |
10,301 |
1.53 |
|||||||||||||||||
Total interest-bearing deposit accounts |
2,132,738 |
13,554 |
0.64 |
2,265,250 |
18,737 |
0.83 |
|||||||||||||||||
Short-term borrowings: |
|||||||||||||||||||||||
Federal funds purchased |
5,437 |
20 |
0.37 |
- |
- |
- |
|||||||||||||||||
Securities sold under agreements to repurchase - customers |
5,157 |
7 |
0.14 |
6,717 |
7 |
0.10 |
|||||||||||||||||
Long-term borrowings: |
|||||||||||||||||||||||
FHLBNY advances (4) |
37,038 |
898 |
2.42 |
18,316 |
884 |
4.83 |
|||||||||||||||||
Obligations under capital lease |
7,737 |
513 |
6.63 |
7,988 |
527 |
6.60 |
|||||||||||||||||
Junior subordinated debentures |
92,786 |
2,594 |
2.80 |
92,786 |
2,997 |
3.23 |
|||||||||||||||||
Total borrowings |
148,155 |
4,032 |
2.72 |
125,807 |
4,415 |
3.51 |
|||||||||||||||||
Total interest-bearing liabilities |
2,280,893 |
17,586 |
0.77 |
2,391,057 |
23,152 |
0.97 |
|||||||||||||||||
Non-interest bearing liabilities: |
|||||||||||||||||||||||
Non-interest-bearing demand deposits |
499,435 |
509,678 |
|||||||||||||||||||||
Other liabilities |
80,777 |
86,013 |
|||||||||||||||||||||
Total non-interest bearing liabilities |
580,212 |
595,691 |
|||||||||||||||||||||
Total liabilities |
2,861,105 |
2,986,748 |
|||||||||||||||||||||
Shareholders' equity |
293,665 |
299,127 |
|||||||||||||||||||||
Total liabilities and shareholders' equity |
$ |
3,154,770 |
$ |
3,285,875 |
|||||||||||||||||||
Net interest income |
$ |
98,718 |
$ |
104,869 |
|||||||||||||||||||
Interest rate spread (5) |
3.27 |
% |
3.30 |
% |
|||||||||||||||||||
Net interest margin (6) |
3.43 |
% |
3.50 |
% |
|||||||||||||||||||
Ratio of average interest-earning assets to average interest-bearing liabilities |
126.15 |
% |
125.37 |
% |
|||||||||||||||||||
(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, 2012 and 2011 were $870 thousand and $1.3 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, 2012 |
September 30, 2012 |
||||||||||||||||||
Average |
Income/ |
Yield/ |
Average |
Income/ |
Yield/ |
||||||||||||||
Balance |
Expense |
Cost |
Balance |
Expense |
Cost |
||||||||||||||
Interest-earning assets: |
|||||||||||||||||||
Loans receivable (1),(2): |
|||||||||||||||||||
Commercial and industrial |
$ |
1,788,347 |
$ |
19,628 |
4.39 |
% |
$ |
1,805,623 |
$ |
20,139 |
4.46 |
% |
|||||||
Home equity |
210,085 |
2,055 |
3.91 |
215,542 |
2,141 |
3.97 |
|||||||||||||
Second mortgage |
32,442 |
470 |
5.79 |
35,816 |
518 |
5.79 |
|||||||||||||
Residential real estate |
319,427 |
2,959 |
3.71 |
230,259 |
2,257 |
3.92 |
|||||||||||||
Other |
32,444 |
559 |
6.89 |
33,658 |
576 |
6.85 |
|||||||||||||
Total loans receivable |
2,382,745 |
25,671 |
4.31 |
2,320,898 |
25,631 |
4.42 |
|||||||||||||
Investment securities (3) |
507,158 |
2,672 |
2.11 |
534,842 |
3,038 |
2.27 |
|||||||||||||
Interest-earning bank balances |
38,623 |
24 |
0.25 |
21,004 |
12 |
0.23 |
|||||||||||||
Total interest-earning assets |
2,928,526 |
28,367 |
3.87 |
2,876,744 |
28,681 |
3.99 |
|||||||||||||
Non-interest earning assets: |
|||||||||||||||||||
Cash and due from banks |
72,129 |
75,627 |
|||||||||||||||||
Bank properties and equipment, net |
51,515 |
52,127 |
|||||||||||||||||
Goodwill and intangible assets, net |
41,902 |
42,826 |
|||||||||||||||||
Other assets |
99,535 |
106,344 |
|||||||||||||||||
Total non-interest-earning assets |
265,081 |
276,924 |
|||||||||||||||||
Total assets |
$ |
3,193,607 |
$ |
3,153,668 |
|||||||||||||||
Interest-bearing liabilities: |
|||||||||||||||||||
Interest-bearing deposit accounts: |
|||||||||||||||||||
Interest-bearing demand deposits |
$ |
1,224,254 |
$ |
1,178 |
0.38 |
% |
$ |
1,218,338 |
$ |
1,195 |
0.39 |
% |
|||||||
Savings deposits |
263,949 |
228 |
0.35 |
264,112 |
225 |
0.34 |
|||||||||||||
Time deposits |
660,389 |
1,737 |
1.05 |
654,662 |
1,859 |
1.14 |
|||||||||||||
Total interest-bearing deposit accounts |
2,148,592 |
3,143 |
0.59 |
2,137,112 |
3,279 |
0.61 |
|||||||||||||
Short-term borrowings: |
|||||||||||||||||||
Federal funds purchased |
- |
- |
- |
6,467 |
4 |
0.25 |
|||||||||||||
FHLBNY advances |
- |
- |
- |
20,000 |
22 |
0.44 |
|||||||||||||
Securities sold under agreements to repurchase - customers |
3,250 |
2 |
0.25 |
4,925 |
2 |
0.16 |
|||||||||||||
Long-term borrowings: |
|||||||||||||||||||
FHLBNY advances (4) |
66,527 |
332 |
2.00 |
10,181 |
103 |
4.71 |
|||||||||||||
Obligations under capital lease |
7,639 |
127 |
6.65 |
7,706 |
128 |
6.64 |
|||||||||||||
Junior subordinated debentures |
92,786 |
572 |
2.47 |
92,786 |
597 |
2.57 |
|||||||||||||
Total borrowings |
170,202 |
1,033 |
2.43 |
142,065 |
856 |
2.41 |
|||||||||||||
Total interest-bearing liabilities |
2,318,794 |
4,176 |
0.72 |
2,279,177 |
4,135 |
0.73 |
|||||||||||||
Non-interest bearing liabilities: |
|||||||||||||||||||
Non-interest-bearing demand deposits |
511,813 |
504,936 |
|||||||||||||||||
Other liabilities |
75,302 |
80,426 |
|||||||||||||||||
Total non-interest bearing liabilities |
587,115 |
585,362 |
|||||||||||||||||
Total liabilities |
2,905,909 |
2,864,539 |
|||||||||||||||||
Shareholders' equity |
287,698 |
289,129 |
|||||||||||||||||
Total liabilities and shareholders' equity |
$ |
3,193,607 |
$ |
3,153,668 |
|||||||||||||||
Net interest income |
$ |
24,191 |
$ |
24,546 |
|||||||||||||||
Interest rate spread (5) |
3.15 |
% |
3.26 |
% |
|||||||||||||||
Net interest margin (6) |
3.30 |
% |
3.41 |
% |
|||||||||||||||
Ratio of average interest-earning assets to average interest-bearing liabilities |
126.30 |
% |
126.22 |
% |
|||||||||||||||
(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, 2012 and September 30, 2012 were $210 thousand and $212 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.
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