Attached files
| file | filename |
|---|---|
| 8-K - FOURTH QUARTER PRESS RELEASE - SUN BANCORP INC /NJ/ | press_release.htm |
News Release
Contact: Robert B. Crowl, EVP, Chief Financial Officer, (856) 691-7700
Sun Bancorp, Inc. Reports Fourth Quarter 2010 Results
VINELAND, NJ – January 25, 2011 – Sun Bancorp, Inc. (NASDAQ: SNBC) reported today a net loss available to common shareholders of $28.1 million, or a loss of $0.67 per diluted share, for the fourth quarter ended December 31, 2010, compared to a net loss available to common shareholders of $6.3 million, or a loss of $0.27 per diluted share, for the fourth quarter ended December 31, 2009. As previously reported during the quarter, the Company completed multiple loan sales totaling $76.6 million of criticized and classified commercial real estate loans to strengthen the balance sheet.
The following are key items which affected the results for the fourth quarter of 2010 as compared to the fourth quarter of 2009:
● Net loss of $25.1 million on the sale of commercial real estate loans.
● Loan loss provision of $35.5 million as compared to $19.5 million for the comparable prior year period, inclusive of $21.3 million of the loss recorded on the aforementioned loan sales.
● Loss of $2.7 million on fair value credit adjustments on customer derivatives.
● The Company completed the conversion of 88,009 shares of the Company’s $1,000 par value Series B mandatorily convertible cumulative non-voting perpetual preferred stock into common stock at a conversion price of $4.00 per share.
Thomas X. Geisel, President and CEO of Sun Bancorp, remarked, “In the fourth quarter we continued to execute successfully on strategies to strengthen the balance sheet, our capital position and grow the specialty businesses.”
Geisel stated, “Despite the continued economic challenges in 2010, we focused on what we could control. We increased average core deposits 12%, while reducing the cost of total deposits by 55 basis points; grew Sun Home Loans mortgage origination income 71% to a franchise best; achieved a 6.2% year-over-year revenue improvement in our investment business, Sun Financial Services, marking the second strongest year in its history; Cash Management posted a record year; and we met or exceeded fee income and loan production goals in our Asset Based Lending and Healthcare Finance specialty groups.”
In looking to 2011, Geisel remarked, “We have a strong business model which demonstrates our ability to be competitive, grow and capitalize on opportunities to expand customer relationships throughout the State, building on the work we have done in 2010.”
-3-
For the year ended December 31, 2010, the Company reported a net loss available to common shareholders of $185.1 million, or a loss of $6.55 per diluted share, as compared to a net loss available to common shareholders of $22.5 million, or a loss of $0.97 per diluted share, for the comparable prior year period. The year ended December 31, 2010 included loan loss provision charges of $101.5 million, a goodwill impairment charge of $89.7 million, and the establishment of a $28.8 million deferred tax asset valuation allowance. The 2009 comparable period included charges of $60.8 million as a result of loan loss provisions, preferred shares issued and subsequently repurchased under the TARP, the FDIC special assessment, as well as other-than-temporary impairment (“OTTI”) charges.
Discussion of Results:
Balance Sheet
● Total assets were $3.42 billion at December 31, 2010, as compared to $3.60 billion at September 30, 2010 and $3.58 billion at December 31, 2009.
● Gross loans were $2.54 billion at December 31, 2010 as compared to $2.68 billion at September 30, 2010 and $2.72 billion at December 31, 2009. Compared to the linked quarter, commercial loans decreased by $132.2 million, of which $76.6 million related to the aforementioned loan sale. The balance of the commercial loan decline was due to continued charge-off activity and large pay downs on commercial real estate loans. The remaining decrease in gross loans was due to reduced loan demand and decreases in the home equity loan and residential real estate portfolios of $8.9 million and $6.5 million, respectively.
● Total deposits at December 31, 2010 equaled $2.94 billion as compared to $3.05 billion at September 30, 2010 and $2.91 billion at December 31, 2009. The decline of $111.4 million or 3.7% over the linked quarter is primarily in Public Funds, which fell $59.0 million or 13.8%, and certificates of deposit greater than $100,000 which declined $57.1 million or 61.8%. These reductions are attributable to the seasonality related to municipal tax proceeds and the expected maturities in both the Public Funds and certificates of deposit greater than $100,000 portfolios.
Net Interest Income and Margin
● On a tax equivalent basis, net interest income, decreased $630,000 over the linked quarter to $27.7 million primarily due to a decrease in average loans receivable of $116.4 million, or 4.2%. The yield on loans increased two basis points over the linked quarter. The net interest margin was 3.37% for the fourth quarter, as compared to the linked quarter of 3.47% and 3.64% for the comparable prior year quarter.
● The yield on earning assets decreased 18 basis points over the linked quarter from 4.53% to 4.35% for the three months ended December 31, 2010. This decrease was due to a decrease of 42 basis points on investment yields resulting from the sale of $158.8 million in available for sale securities and a decrease in average loans receivable of $116.4 million for the quarter ended December 31, 2010.
● The cost of interest-bearing liabilities decreased 7 basis points over the linked quarter from 1.29% to 1.22%. The cost of interest-bearing deposits of 1.06% for the fourth quarter continued to trend downward in comparison to prior periods as it decreased 8 basis points from 1.14% for the linked quarter and 31 basis points from 1.37% for the comparable prior year quarter. The interest rate spread was 3.13% for the fourth quarter 2010, as compared to 3.24% for the linked quarter and 3.41% for the comparable prior year quarter.
● Non-accrual interest reversals of $736,000 were recorded in the December 31, 2010 quarter as compared to $1.2 million in the linked quarter. Adjusted for non-accrual interest reversals during the period, the Company’s net interest margin was 3.46% for the fourth quarter 2010, as compared to an adjusted 3.61% for the linked quarter.
-4-
Non-Interest Income
● Non-interest income was $7.8 million for the quarter ended December 31, 2010, an increase of $10.1 million over the linked quarter and $2.3 million over the comparable prior year quarter. The increase over the linked quarter was primarily attributable to a decrease of $4.8 million in the fair value credit adjustments taken on the Company’s derivative portfolio. In addition, the Company recognized a $4.6 million gain on the sale of $158.8 million in available for sale securities in the current quarter.
● The Company recognized a pre-tax OTTI charge during the fourth quarter of $379,000 related to a non-investment grade security. The Company had recognized a pre-tax OTTI charge of $351,000 on the same security during the comparable prior year quarter.
● Gain on sale of residential mortgage loans increased by $403,000 over the linked quarter to $1.3 million in the current quarter due to higher mortgage loan production and sales. This gain was partially offset by a decrease in service charges on deposits of $154,000 from the linked quarter.
Non-Interest Expense
● The Company incurred $27.6 million of non-interest expense in the fourth quarter of 2010, a decrease of $1.8 million, or 6.0%, over the linked quarter and an increase of $1.9 million, or 7.2%, over the comparable prior year quarter. Fourth quarter results included professional fees of $1.2 million, of which $668,000 related to the commercial real estate loan sales. Problem loan costs increased $967,000 over the linked quarter primarily due to $650,000 in real estate tax payments in the current quarter.
Asset Quality
● Provision expense for the fourth quarter was $35.5 million, a decrease of $6.9 million, or 16.3%, over the linked quarter, and an increase of $16.0 million, or 82.3%, over the comparable prior year quarter. The allowance for loan losses was $81.7 million at December 31, 2010, or 3.22% of gross loans, as compared to the allowance for loan losses to gross loans of 2.78% at September 30, 2010 and 2.21% at December 31, 2009. Net charge-offs during the fourth quarter were $28.4 million, or 1.08% of average loans, as compared to $41.6 million, or 1.52% of average loans for the linked quarter and $5.6 million, or 0.21% of average loans outstanding for the comparable prior year quarter. Fourth quarter provision expense remained elevated as a result of $21.7 million in charge-offs from the commercial real estate loan sales, as well as the continued migration of loans to higher risk categories.
● Total non-performing assets were $178.0 million, or 7.01% of total loans and real estate owned, as compared to $208.9 million at September 30, 2010, or 7.77% of total loans and real estate owned and $105.4 million at December 31, 2009, or 3.86% of total loans and real estate owned. The decrease for the linked quarter was primarily attributable to the loan sale which included $67.9 million of non-performing loans, partially offset by the migration of five commercial relationships totaling $32.4 million into non-performing status. The allowance for loan losses to non-performing loans was 47.02% at December 31, 2010, as compared to 36.46% at September 30, 2010 and 62.56% at December 31, 2009. As of December 31, 2010, $86.1 million of non-performing loans are designated as collateral dependent and have been charged-down to current appraised values less cost of liquidation.
Capital
● Stockholders’ equity totaled $268.6 million at December 31, 2010 compared to $356.6 million at December 31, 2009. During the fourth quarter, the Company completed the conversion of 88,009 shares of the Company’s $1,000 par value Series B mandatorily convertible cumulative non-voting perpetual preferred stock into common stock at a conversion price of $4.00 per share. The Company’s tangible equity to tangible assets was 6.52% at December 31, 2010, as compared to 7.13% at September 30, 2010 and 6.24% at December 31, 2009. At December 31, 2010, the Company’s total risk-based capital ratio, Tier 1 capital ratio and the leverage capital ratio were approximately 13.01%, 11.38%, and 8.94%, respectively. At December 31, 2010, Sun National Bank’s total risk-based capital ratio, Tier 1 capital ratio and the leverage capital ratio were approximately 12.26%, 10.99%, and 8.58%, respectively.
-5-
The Company will hold its regularly scheduled conference call on Wednesday, January 26, 2011, at 11:00 a.m. (ET). Participants may listen to the live Web cast through the Sun Bancorp, Inc. Web site at www.sunnb.com. Participants are advised to log on 10 minutes ahead of the scheduled start of the call. An Internet-based replay will be available at the Web site for two weeks following the call.
Sun Bancorp, Inc. (Nasdaq: SNBC) is a $3.42 billion asset bank holding company headquartered in Vineland and Mt. Laurel, New Jersey. Its primary subsidiary is Sun National Bank, a full service Commercial Bank serving customers through more than 60 locations in New Jersey. Sun National Bank has been named one of Forbes Magazine's "Most Trustworthy Companies" for five years running. The Bank is an Equal Housing Lender and its deposits are insured up to the legal maximum by the Federal Deposit Insurance Corporation (FDIC). For more information about Sun National Bank and Sun Bancorp, Inc., visit www.sunnb.com.
The foregoing material contains forward-looking statements concerning the financial condition, results of operations and business of the Company. We caution that such statements are subject to a number of uncertainties and actual results could differ materially, and, therefore, readers should not place undue reliance on any forward-looking statements. The Company does not undertake, and specifically disclaims, any obligation to publicly release the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
Non-GAAP Financial Measures
This release references adjusted net interest margin. Adjusted net interest margin is derived from GAAP net interest income adjusted by adding back interest income that would have been earned had the loans been on accrual status. We believe the presentation of adjusted net interest margin provides additional transparency of underlying trends. Adjusted net interest margin for the quarters ending December 31, 2010 and September 30, 2010 is calculated by adding $736,000 and $1.2 million, respectively, of non-accrual interest reversals, annualized, to net interest income of $27.7 million and $28.3 million, respectively, and dividing the balance by average interest-earning assets of $3.3 billion for both periods. Tax-equivalent interest income is also a non-GAAP financial measure.
-6-
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
|||||||||||||
|
FINANCIAL HIGHLIGHTS (Unaudited)
|
|||||||||||||
|
(Dollars in thousands, except per share amounts)
|
|||||||||||||
|
For the Three Months Ended
|
For the Year Ended
|
||||||||||||
|
December 31,
|
December 31,
|
||||||||||||
|
2010
|
2009
|
2010
|
2009
|
||||||||||
|
Profitability for the period:
|
|||||||||||||
|
Net interest income
|
$
|
27,273
|
$
|
28,068
|
$
|
110,962
|
$
|
100,157
|
|||||
|
Provision for loan losses
|
35,511
|
19,479
|
101,518
|
46,666
|
|||||||||
|
Non-interest income
|
7,797
|
5,541
|
15,512
|
17,070
|
|||||||||
|
Non-interest expense
|
27,590
|
25,733
|
200,693
|
104,067
|
|||||||||
|
Loss before income taxes
|
(28,031
|
)
|
(11,603
|
)
|
(175,737
|
)
|
(33,506
|
)
|
|||||
|
Net loss
|
(28,134
|
)
|
(6,340
|
)
|
(185,059
|
)
|
(17,131
|
)
|
|||||
|
Net loss available to common shareholders
|
$
|
(28,134
|
)
|
$
|
(6,340
|
)
|
$
|
(185,059
|
)
|
$
|
(22,482
|
)
|
|
|
Financial ratios:
|
|||||||||||||
|
Return on average assets(1)
|
(3.14)
|
%
|
(0.71)
|
%
|
(5.19)
|
%
|
(0.47)
|
%
|
|||||
|
Return on average equity(1)
|
(37.88)
|
%
|
(6.96)
|
%
|
(56.82)
|
%
|
(4.44)
|
%
|
|||||
|
Return on average tangible equity(1),(2)
|
(45.43)
|
%
|
(11.44)
|
%
|
(80.23)
|
%
|
(7.09)
|
%
|
|||||
|
Net interest margin(1)
|
3.37
|
%
|
3.64
|
%
|
3.50
|
%
|
3.18
|
%
|
|||||
|
Efficiency ratio
|
78.67
|
%
|
76.57
|
%
|
158.68
|
%
|
88.77
|
%
|
|||||
|
Efficiency ratio, excluding non-operating income and non-operating expense(3)
|
77.83
|
%
|
75.77
|
%
|
86.84
|
%
|
83.69
|
%
|
|||||
|
Loss per common share:
|
|||||||||||||
|
Basic
|
$
|
(0.67
|
)
|
$
|
(0.27
|
)
|
$
|
(6.55
|
)
|
$
|
(0.97
|
)
|
|
|
Diluted
|
$
|
(0.67
|
)
|
$
|
(0.27
|
)
|
$
|
(6.55
|
)
|
$
|
(0.97
|
)
|
|
|
Average equity to average assets
|
8.29
|
%
|
10.15
|
%
|
9.13
|
%
|
10.69
|
%
|
|||||
|
December 31,
|
|||||||||||
|
2010
|
2009
|
||||||||||
|
At period-end:
|
|||||||||||
|
Total assets
|
$
|
3,417,905
|
$
|
3,578,905
|
|||||||
|
Total deposits
|
2,940,460
|
2,909,268
|
|||||||||
|
Loans receivable, net of allowance for loan losses
|
2,453,457
|
2,657,694
|
|||||||||
|
Investments
|
493,493
|
457,192
|
|||||||||
|
Borrowings
|
33,417
|
146,193
|
|||||||||
|
Junior subordinated debentures
|
92,786
|
92,786
|
|||||||||
|
Shareholders' equity
|
268,601
|
356,593
|
|||||||||
|
Credit quality and capital ratios:
|
|||||||||||
|
Allowance for loan losses to gross loans
|
3.22
|
%
|
2.21
|
%
|
|||||||
|
Non-performing assets to gross loans and real estate owned
|
7.01
|
%
|
3.86
|
%
|
|||||||
|
Allowance for loan losses to non-performing loans
|
47.02
|
%
|
62.56
|
%
|
|||||||
|
|
|||||||||||
|
Total capital (to risk-weighted assets):
|
|||||||||||
|
Sun Bancorp, Inc.
|
13.01
|
%
|
11.38
|
%
|
|||||||
|
Sun National Bank
|
12.26
|
%
|
10.87
|
%
|
|||||||
|
Tier 1 capital (to risk-weighted assets):
|
|||||||||||
|
Sun Bancorp, Inc.
|
11.38
|
%
|
10.12
|
%
|
|||||||
|
Sun National Bank
|
10.99
|
%
|
9.61
|
%
|
|||||||
|
Leverage Ratio:
|
|||||||||||
|
Sun Bancorp, Inc.
|
8.94
|
%
|
9.08
|
%
|
|||||||
|
Sun National Bank
|
8.58
|
%
|
8.58
|
%
|
|||||||
|
Book value per common share
|
$
|
5.33
|
$
|
15.29
|
|||||||
|
Tangible book value per common share
|
$
|
4.36
|
$
|
9.19
|
|||||||
|
(1) Amounts for the three 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 expense for the year ended December 31, 2010 excludes a goodwill impairment charge of $89.7 million. Non-interest income for the three months and year ended December 31, 2010 excludes a net impairment loss on available for sale securities of $379,000 and $1.3 million, respectively. Non-interest income for the three months and year ended December 31, 2009 exclude a net impairment loss on available for sale securities of $351,000 and $7.1 million, respectively.
|
|||||||||||
-7-
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
||||||
|
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
|
||||||
|
(Dollars in thousands, except par value amounts)
|
||||||
|
December 31, 2010
|
December 31, 2009
|
|||||
|
ASSETS
|
||||||
|
Cash and due from banks
|
$
|
36,522
|
$
|
53,857
|
||
|
Interest-earning bank balances
|
150,704
|
5,263
|
||||
|
Cash and cash equivalents
|
187,226
|
59,120
|
||||
|
Investment securities available for sale (amortized cost of $483,255 and $435,267 at December 31, 2010 and 2009, respectively)
|
472,864
|
434,738
|
||||
|
Investment securities held to maturity (estimated fair value of $3,155 and $7,121 at December 31, 2010 and 2009, respectively)
|
3,039
|
6,955
|
||||
|
Loans receivable (net of allowance for loan losses of $81,713 and $59,953 at December 31, 2010 and 2009, respectively)
|
2,453,457
|
2,657,694
|
||||
|
Restricted equity investments
|
17,590
|
15,499
|
||||
|
Bank properties and equipment, net
|
53,428
|
53,246
|
||||
|
Real estate owned
|
4,272
|
9,527
|
||||
|
Accrued interest receivable
|
10,004
|
12,235
|
||||
|
Goodwill
|
38,188
|
127,894
|
||||
|
Intangible assets, net
|
10,631
|
14,316
|
||||
|
Deferred tax asset, net
|
4,245
|
20,721
|
||||
|
Bank owned life insurance (BOLI)
|
74,656
|
77,753
|
||||
|
Other assets
|
88,305
|
89,207
|
||||
|
Total assets
|
$
|
3,417,905
|
$
|
3,578,905
|
||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||
|
Liabilities:
|
||||||
|
Deposits
|
$
|
2,940,460
|
$
|
2,909,268
|
||
|
Federal funds purchased
|
-
|
89,000
|
||||
|
Securities sold under agreements to repurchase – customers
|
6,307
|
18,677
|
||||
|
Advances from the Federal Home Loan Bank of New York (FHLBNY)
|
3,999
|
15,215
|
||||
|
Securities sold under agreements to repurchase – FHLBNY
|
15,000
|
15,000
|
||||
|
Obligations under capital lease
|
8,111
|
8,301
|
||||
|
Junior subordinated debentures
|
92,786
|
92,786
|
||||
|
Other liabilities
|
82,641
|
74,065
|
||||
|
Total liabilities
|
3,149,304
|
3,222,312
|
||||
|
Shareholders’ equity:
|
||||||
|
Preferred stock, $1 par value, 1,000,000 shares authorized; none issued
|
-
|
-
|
||||
|
Common stock, $1 par value, 100,000,000 shares authorized; 50,463,594 shares issued and 50,356,871 shares outstanding at December 31, 2010; 25,435,994 shares issued and 23,329,271 shares outstanding at December 31, 2009
|
52,464
|
25,436
|
||||
|
Additional paid-in capital
|
438,335
|
|
362,189
|
|||
|
Retained deficit
|
(189,656
|
)
|
(4,597
|
)
|
||
|
Accumulated other comprehensive loss
|
(6,146
|
)
|
(149
|
)
|
||
|
Deferred compensation plan trust
|
(234
|
)
|
(124
|
)
|
||
|
Treasury stock at cost, 2,106,723 shares at December 31, 2010 and 2009
|
(26,162
|
)
|
(26,162
|
)
|
||
|
Total shareholders’ equity
|
268,601
|
356,593
|
||||
|
Total liabilities and shareholders’ equity
|
$
|
3,417,905
|
$
|
3,578,905
|
||
-8-
|
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 Year Ended
December 31,
|
|||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
||||||||||||||
|
INTEREST INCOME
|
|||||||||||||||||
|
Interest and fees on loans
|
$
|
31,415
|
$
|
33,324
|
$
|
129,391
|
$
|
131,811
|
|||||||||
|
Interest on taxable investment securities
|
2,991
|
3,286
|
11,993
|
14,627
|
|||||||||||||
|
Interest on non-taxable investment securities
|
710
|
1,034
|
3,344
|
3,729
|
|||||||||||||
|
Dividends on restricted equity investments
|
238
|
223
|
875
|
832
|
|||||||||||||
|
Total interest income
|
35,354
|
37,867
|
145,603
|
150,999
|
|||||||||||||
|
INTEREST EXPENSE
|
|||||||||||||||||
|
Interest on deposits
|
6,657
|
8,225
|
28,780
|
44,357
|
|||||||||||||
|
Interest on funds borrowed
|
392
|
550
|
1,744
|
2,061
|
|||||||||||||
|
Interest on junior subordinated debentures
|
1,032
|
1,024
|
4,117
|
4,424
|
|||||||||||||
|
Total interest expense
|
8,081
|
9,799
|
34,641
|
50,842
|
|||||||||||||
|
Net interest income
|
27,273
|
28,068
|
110,962
|
100,157
|
|||||||||||||
|
PROVISION FOR LOAN LOSSES
|
35,511
|
19,479
|
101,518
|
46,666
|
|||||||||||||
|
Net interest (loss) income after provision for loan losses
|
(8,238
|
)
|
8,589
|
9,444
|
53,491
|
||||||||||||
|
NON-INTEREST INCOME
|
|||||||||||||||||
|
Service charges on deposit accounts
|
2,715
|
3,150
|
11,572
|
12,440
|
|||||||||||||
|
Other service charges
|
94
|
85
|
364
|
331
|
|||||||||||||
|
Gain on sale of mortgage loans
|
1,324
|
603
|
3,560
|
2,352
|
|||||||||||||
|
Gain on derivative instruments
|
-
|
50
|
-
|
262
|
|||||||||||||
|
Investment products income
|
728
|
497
|
2,831
|
2,669
|
|||||||||||||
|
BOLI income
|
452
|
600
|
2,074
|
2.249
|
|||||||||||||
|
Net impairment losses recognized in earnings
|
(379
|
)
|
(351
|
)
|
(1,329
|
)
|
(7,115
|
)
|
|||||||||
|
Derivative credit valuation adjustment
|
(2,705
|
)
|
(78
|
)
|
(12,214
|
)
|
(53)
|
||||||||||
|
Other
|
5,568
|
985
|
8,654
|
3,935
|
|||||||||||||
|
Total non-interest income
|
7,797
|
5,541
|
15,512
|
17,070
|
|||||||||||||
|
NON-INTEREST EXPENSE
|
|||||||||||||||||
|
Salaries and employee benefits
|
12,920
|
12,440
|
55,219
|
51,773
|
|||||||||||||
|
Occupancy expense
|
3,043
|
2,911
|
12,508
|
11,517
|
|||||||||||||
|
Equipment expense
|
1,634
|
1,732
|
6,783
|
6,574
|
|||||||||||||
|
Data processing expense
|
1,133
|
1,021
|
4,359
|
4,063
|
|||||||||||||
|
Amortization of intangible assets
|
921
|
921
|
3,685
|
4,453
|
|||||||||||||
|
Goodwill impairment
|
-
|
-
|
89,706
|
-
|
|||||||||||||
|
Insurance expense
|
2,064
|
1,512
|
7,696
|
7,804
|
|||||||||||||
|
Professional fees
|
1,220
|
713
|
2,724
|
2,193
|
|||||||||||||
|
Advertising expense
|
390
|
786
|
2,335
|
2,453
|
|||||||||||||
|
Problem loan expense
|
1,923
|
628
|
5,162
|
1,958
|
|||||||||||||
|
Real estate owned expense, net
|
39
|
28
|
442
|
1,155
|
|||||||||||||
|
Other
|
2,303
|
3,041
|
10,074
|
10,124
|
|||||||||||||
|
Total non-interest expense
|
27,590
|
25,733
|
200,693
|
104,067
|
|||||||||||||
|
LOSS BEFORE INCOME TAXES
|
(28,031
|
)
|
(11,603
|
)
|
(175,737
|
)
|
(33,506
|
)
|
|||||||||
|
INCOME TAX EXPENSE (BENEFIT)
|
103
|
(5,263
|
)
|
9,322
|
(16,375
|
)
|
|||||||||||
|
NET LOSS
|
(28,134
|
)
|
(6,340
|
)
|
(185,059
|
)
|
(17,131
|
)
|
|||||||||
|
Preferred stock dividends and discount accretion
|
-
|
-
|
-
|
5,351
|
|||||||||||||
|
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS
|
$
|
(28,134
|
)
|
$
|
(6,340
|
)
|
$
|
(185,059
|
)
|
$
|
(22,482
|
)
|
|||||
|
Basic loss per share
|
$
|
(0.67
|
)
|
$
|
(0.27
|
)
|
$
|
(6.55
|
)
|
$
|
(0.97
|
)
|
|||||
|
Diluted loss per share
|
$
|
(0.67
|
)
|
$
|
(0.27
|
)
|
$
|
(6.55
|
)
|
$
|
(0.97
|
)
|
|||||
|
Weighted average shares – basic
|
42,119,553
|
23,223,463
|
|
28,258,953
|
23,134,424
|
||||||||||||
|
Weighted average shares – diluted
|
42,119,553
|
22,223,463
|
28,258,953
|
23,134,424
|
|
||||||||||||
-9-
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
|||||||||||||||
|
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
|
|||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||
|
2010
|
2010
|
2010
|
2010
|
2009
|
|||||||||||
|
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
|||||||||||
|
Balance sheet at quarter end:
|
|||||||||||||||
|
Cash and cash equivalents
|
$
|
187,226
|
$
|
205,265
|
$
|
52,810
|
$
|
52,570
|
$
|
59,120
|
|||||
|
Investment securities
|
493,493
|
479,055
|
428,362
|
430,104
|
457,192
|
||||||||||
|
Loans:
|
|||||||||||||||
|
Commercial and industrial
|
2,103,492
|
2,235,715
|
2,289,148
|
2,238,967
|
2,249,365
|
||||||||||
|
Home equity lines of credit
|
239,729
|
244,274
|
252,425
|
257,368
|
258,592
|
||||||||||
|
Home equity term loans
|
53,912
|
58,305
|
61,941
|
65,857
|
68,592
|
||||||||||
|
Residential real estate
|
79,074
|
85,554
|
79,034
|
71,452
|
75,322
|
||||||||||
|
Other
|
58,963
|
58,930
|
62,956
|
63,924
|
65,776
|
||||||||||
|
Total gross loans
|
2,535,170
|
2,682,778
|
2,745,504
|
2,697,568
|
2,717,647
|
||||||||||
|
Allowance for loan losses
|
(81,713
|
)
|
(74,579
|
)
|
(73,752
|
)
|
(63,292
|
)
|
(59,953
|
)
|
|||||
|
Net loans
|
2,453,457
|
2,608,199
|
2,671,752
|
2,634,276
|
2,657,694
|
||||||||||
|
Goodwill
|
38,188
|
38,188
|
38,188
|
127,894
|
127,894
|
||||||||||
|
Intangible assets, net
|
10,631
|
11,552
|
12,474
|
13,395
|
14,316
|
||||||||||
|
Total assets
|
3,417,905
|
3,603,637
|
3,512,310
|
3,531,998
|
3,578,905
|
||||||||||
|
Total deposits
|
2,940,460
|
3,051,894
|
2,961,816
|
2,924,815
|
2,909,268
|
||||||||||
|
Federal funds purchased
|
-
|
-
|
37,000
|
25,000
|
89,000
|
||||||||||
|
Securities sold under agreements to repurchase - customers
|
6,307
|
15,702
|
17,156
|
15,767
|
18,677
|
||||||||||
|
Advances from FHLBNY
|
3,999
|
4,308
|
4,613
|
14,916
|
15,215
|
||||||||||
|
Securities sold under agreements to repurchase - FHLBNY
|
15,000
|
15,000
|
15,000
|
15,000
|
15,000
|
||||||||||
|
Obligations under capital lease
|
8,111
|
8,169
|
8,217
|
8,260
|
8,301
|
||||||||||
|
Junior subordinated debentures
|
92,786
|
92,786
|
92,786
|
92,786
|
92,786
|
||||||||||
|
Total shareholders' equity
|
268,601
|
303,038
|
273,161
|
356,129
|
356,593
|
||||||||||
|
Quarterly average balance sheet:
|
|||||||||||||||
|
Loans:
|
|||||||||||||||
|
Commercial and industrial
|
$
|
2,184,212
|
$
|
2,292,274
|
$
|
2,262,656
|
$
|
2,241,443
|
$
|
2,238,579
|
|||||
|
Home equity lines of credit
|
241,510
|
250,033
|
256,697
|
258,359
|
260,382
|
||||||||||
|
Home equity term loans
|
57,310
|
60,729
|
64,051
|
67,435
|
69,844
|
||||||||||
|
Residential real estate
|
88,144
|
82,094
|
74,427
|
73,333
|
75,890
|
||||||||||
|
Other
|
57,522
|
59,998
|
62,249
|
63,804
|
66,698
|
||||||||||
|
Total gross loans
|
2,628,698
|
2,745,128
|
2,720,080
|
2,704,374
|
2,711,393
|
||||||||||
|
Securities and other interest-earning assets
|
658,013
|
518,262
|
450,947
|
459,309
|
433,706
|
||||||||||
|
Total interest-earning assets
|
3,286,711
|
3,263,390
|
3,171,027
|
3,163,683
|
3,145,099
|
||||||||||
|
Total assets
|
3,582,647
|
3,578,296
|
3,554,630
|
3,554,244
|
3,590,339
|
||||||||||
|
Non-interest-bearing demand deposits
|
509,093
|
505,036
|
471,033
|
440,860
|
480,080
|
||||||||||
|
Total deposits
|
3,032,594
|
3,043,268
|
2,957,970
|
2,919,477
|
2,886,322
|
||||||||||
|
Total interest-bearing liabilities
|
2,657,984
|
2,683,915
|
2,640,155
|
2,672,746
|
2,652,540
|
||||||||||
|
Total shareholders' equity
|
297,118
|
287,897
|
358,300
|
360,475
|
364,530
|
||||||||||
|
Capital and credit quality measures:
|
|||||||||||||||
|
Total capital (to risk-weighted assets):
|
|||||||||||||||
|
Sun Bancorp, Inc.
|
13.01
|
%
|
12.92
|
%
|
11.09
|
%
|
11.49
|
%
|
11.38
|
%
|
|||||
|
Sun National Bank
|
12.26
|
%
|
12.04
|
%
|
10.64
|
%
|
10.99
|
%
|
10.87
|
%
|
|||||
|
Tier 1 capital (to risk-weighted assets):
|
|||||||||||||||
|
Sun Bancorp, Inc.
|
11.38
|
%
|
8.02
|
%
|
9.82
|
%
|
10.23
|
%
|
10.12
|
%
|
|||||
|
Sun National Bank
|
10.99
|
%
|
10.77
|
%
|
9.37
|
%
|
9.73
|
%
|
9.61
|
%
|
|||||
|
Leverage ratio:
|
|||||||||||||||
|
Sun Bancorp, Inc.
|
8.94
|
%
|
6.67
|
%
|
8.60
|
%
|
9.21
|
%
|
9.08
|
%
|
|||||
|
Sun National Bank
|
8.58
|
%
|
8.91
|
%
|
8.22
|
%
|
8.80
|
%
|
8.58
|
%
|
|||||
|
Average equity to average assets
|
8.29
|
%
|
8.05
|
%
|
10.08
|
%
|
10.14
|
%
|
10.15
|
%
|
|||||
|
Allowance for loan losses to total gross loans
|
3.22
|
%
|
2.78
|
%
|
2.69
|
%
|
2.35
|
%
|
2.21
|
%
|
|||||
|
Non-performing assets to total gross loans and real estate owned
|
7.01
|
%
|
7.77
|
%
|
4.62
|
%
|
3.32
|
%
|
3.86
|
%
|
|||||
|
Allowance for loan losses to non-performing loans
|
47.02
|
%
|
36.46
|
%
|
59.87
|
%
|
73.53
|
%
|
62.56
|
%
|
|||||
|
Other data:
|
|||||||||||||||
|
Net charge-offs
|
$
|
(28,377
|
)
|
$
|
(41,602
|
)
|
$
|
(3,518
|
)
|
$
|
(6,261
|
)
|
$
|
(5,593
|
)
|
|
Non-performing assets:
|
|||||||||||||||
|
Non-accrual loans
|
159,426
|
192,769
|
120,685
|
78,403
|
87,882
|
||||||||||
|
Troubled debt restructurings, non-accrual
|
11,796
|
-
|
-
|
-
|
-
|
||||||||||
|
Loans past due 90 days and accruing
|
2,554
|
11,802
|
2,500
|
7,678
|
7,958
|
||||||||||
|
Real estate owned, net
|
4,272
|
4,272
|
3,828
|
3,688
|
9,527
|
||||||||||
|
Total non-performing assets
|
178,048
|
208,843
|
127,013
|
89,769
|
105,367
|
||||||||||
|
Troubled debt restructuring, performing
|
$
|
20,341
|
$
|
20,396
|
$
|
19,161
|
$
|
19,353
|
$
|
-
|
|||||
-10-
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
|||||||||||||||
|
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
|
|||||||||||||||
|
(Dollars in thousands, except share and per share amounts)
|
|||||||||||||||
|
2010
|
2010
|
2010
|
2010
|
2009
|
|||||||||||
|
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
|||||||||||
|
Profitability for the quarter:
|
|||||||||||||||
|
Tax-equivalent interest income
|
$
|
35,736
|
$
|
36,971
|
$
|
37,349
|
$
|
37,347
|
$
|
38,425
|
|||||
|
Interest expense
|
8,081
|
8,686
|
8,690
|
9,184
|
9,799
|
||||||||||
|
Tax-equivalent net interest income
|
27,655
|
28,285
|
28,659
|
28,163
|
28,626
|
||||||||||
|
Tax-equivalent adjustment
|
382
|
399
|
479
|
540
|
558
|
||||||||||
|
Provision for loan losses
|
35,511
|
42,429
|
13,978
|
9,600
|
19,479
|
||||||||||
|
Non-interest income (loss) excluding net impairment losses on available for sale securities
|
8,176
|
(1,402
|
)
|
4,416
|
5,651
|
5,892
|
|||||||||
|
Net impairment losses on available for sale securities
|
(379
|
)
|
(950
|
)
|
-
|
-
|
(351
|
)
|
|||||||
|
Non-interest expense excluding amortization of intangible assets and goodwill impairment
|
26,669
|
28,419
|
27,060
|
25,155
|
24,812
|
||||||||||
|
Amortization of intangible assets and goodwill impairment
|
921
|
922
|
90,627
|
921
|
921
|
||||||||||
|
Loss before income taxes
|
(28,031
|
)
|
(46,236
|
)
|
(99,068
|
)
|
(2,402
|
)
|
(11,603
|
)
|
|||||
|
Income tax expense (benefit)
|
103
|
28,757
|
(17,898
|
)
|
(1,640
|
)
|
(5,263
|
)
|
|||||||
|
Net loss
|
(28,134
|
)
|
(74,993
|
)
|
(81,170
|
)
|
(762
|
)
|
(6,340
|
)
|
|||||
|
Net loss available to common shareholders
|
$
|
(28,134
|
)
|
$
|
(75,267
|
)
|
$
|
(81,170
|
)
|
$
|
(762
|
)
|
$
|
(6,340
|
)
|
|
Financial ratios:
|
|||||||||||||||
|
Return on average assets(1)
|
(3.14)
|
%
|
(8.38)
|
%
|
(9.13)
|
%
|
(0.09)
|
%
|
(0.71)
|
%
|
|||||
|
Return on average equity(1)
|
(37.88)
|
%
|
(104.19)
|
%
|
(90.62)
|
%
|
(0.85)
|
%
|
(6.96)
|
%
|
|||||
|
Return on average tangible equity(1),(2)
|
(45.43)
|
%
|
(126.27)
|
%
|
(148.70)
|
%
|
(1.39)
|
%
|
(11.44)
|
%
|
|||||
|
Net interest margin(1)
|
3.37
|
%
|
3.47
|
%
|
3.62
|
%
|
3.56
|
%
|
3.64
|
%
|
|||||
|
Efficiency ratio
|
78.67
|
%
|
114.91
|
%
|
361.04
|
%
|
78.37
|
%
|
76.57
|
%
|
|||||
|
Efficiency ratio, excluding non-operating income and non-operating expense
|
77.83
|
%
|
110.79
|
%
|
85.84
|
%
|
78.37
|
%
|
75.77
|
%
|
|||||
|
Per share data:
|
|||||||||||||||
|
Loss per common share:
|
|||||||||||||||
|
Basic
|
$
|
(0.67
|
)
|
$
|
(3.14
|
)
|
$
|
(3.46
|
)
|
$
|
(0.03
|
)
|
$
|
(0.27
|
)
|
|
Diluted
|
$
|
(0.67
|
)
|
$
|
(3.14
|
)
|
$
|
(3.46
|
)
|
$
|
(0.03
|
)
|
$
|
(0.27
|
)
|
|
Book value
|
$
|
5.33
|
$
|
7.62
|
$
|
11.63
|
$
|
15.22
|
$
|
15.29
|
|||||
|
Tangible book value
|
$
|
4.36
|
$
|
5.86
|
$
|
9.48
|
$
|
9.18
|
$
|
9.19
|
|||||
|
Average basic shares
|
42,119,553
|
23,960,691
|
23,431,305
|
23,365,406
|
23,223,463
|
||||||||||
|
Average diluted shares
|
42,119,553
|
23,960,691
|
23,431,305
|
23,365,406
|
23,223,463
|
||||||||||
|
Operating non-interest income:
|
|||||||||||||||
|
Service charges on deposit accounts
|
$
|
2,715
|
$
|
2,869
|
$
|
3,044
|
$
|
2,944
|
$
|
3,150
|
|||||
|
Other service charges
|
94
|
92
|
99
|
79
|
85
|
||||||||||
|
Gain on sale of mortgage loans
|
1,324
|
921
|
712
|
603
|
603
|
||||||||||
|
Gain on derivative instruments
|
-
|
-
|
-
|
-
|
50
|
||||||||||
|
Investment products income
|
728
|
708
|
792
|
603
|
497
|
||||||||||
|
BOLI income
|
452
|
545
|
539
|
538
|
600
|
||||||||||
|
Derivative credit valuation adjustment
|
(2,705
|
)
|
(7,498
|
)
|
(1,980
|
)
|
(31
|
)
|
(78
|
)
|
|||||
|
Other
|
5,568
|
961
|
1,210
|
915
|
985
|
||||||||||
|
Total operating non-interest income (loss)
|
8,176
|
(1,402
|
)
|
4,416
|
5,651
|
5,892
|
|||||||||
|
Non-operating loss(3):
|
|||||||||||||||
|
Net impairment losses on available for sale securities recognized in earnings
|
(379
|
)
|
(950
|
)
|
-
|
-
|
(351
|
)
|
|||||||
|
Total non-operating losses
|
(379
|
)
|
(950
|
)
|
-
|
-
|
(351
|
)
|
|||||||
|
Total non-interest income (loss)
|
$
|
7,797
|
$
|
(2,352
|
)
|
$
|
4,416
|
$
|
5,651
|
$
|
5,541
|
||||
|
Operating non-interest expense:
|
|||||||||||||||
|
Salaries and employee benefits
|
$
|
12,920
|
$
|
15,079
|
$
|
14,361
|
$
|
12,859
|
$
|
12,440
|
|||||
|
Occupancy expense
|
3,043
|
3,030
|
2,895
|
3,540
|
2,911
|
||||||||||
|
Equipment expense
|
1,634
|
1,663
|
1,750
|
1,736
|
1,732
|
||||||||||
|
Data processing expense
|
1,133
|
1,039
|
1,101
|
1,086
|
1,021
|
||||||||||
|
Amortization of intangible assets
|
921
|
922
|
921
|
921
|
921
|
||||||||||
|
Insurance expense
|
2,064
|
2,105
|
2,020
|
1,507
|
1,512
|
||||||||||
|
Professional fees
|
1,220
|
461
|
459
|
584
|
713
|
||||||||||
|
Advertising expense
|
390
|
833
|
532
|
580
|
786
|
||||||||||
|
Problem loan expense
|
1,923
|
956
|
1,461
|
823
|
628
|
||||||||||
|
Real estate owned expense, net
|
39
|
93
|
94
|
216
|
28
|
||||||||||
|
Other
|
2,303
|
3,160
|
2,386
|
2,224
|
3,041
|
||||||||||
|
Total operating non-interest expense
|
27,590
|
29,341
|
27,980
|
26,076
|
25,733
|
||||||||||
|
Non-operating expense:
|
|||||||||||||||
|
Goodwill impairment
|
-
|
-
|
89,706
|
-
|
-
|
||||||||||
|
Total non-operating expense
|
-
|
-
|
89,706
|
-
|
-
|
||||||||||
|
Total non-interest expense
|
$
|
27,590
|
$
|
29,341
|
$
|
117,686
|
$
|
26,076
|
$
|
25,733
|
|||||
|
(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.
|
|||||||||||||||
-11-
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
||||||||||||||||||
|
AVERAGE BALANCE SHEETS (Unaudited)
|
||||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
|
For the Three Months Ended
December 31, 2010
|
For the Three Months Ended
December 31, 2009
|
|||||||||||||||||
|
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
|||||||||||||
|
Balance
|
Expense
|
Cost
|
Balance
|
Expense
|
Cost
|
|||||||||||||
|
Interest-earning assets:
|
||||||||||||||||||
|
Loans receivable (1),(2):
|
||||||||||||||||||
|
Commercial and industrial
|
$
|
2,184,212
|
$
|
25,654
|
4.70
|
%
|
$
|
2,238,579
|
$
|
26,939
|
4.81
|
%
|
||||||
|
Home equity lines of credit
|
241,510
|
2,744
|
4.54
|
260,382
|
3,139
|
4.82
|
||||||||||||
|
Home equity term loans
|
57,310
|
869
|
6.07
|
69,844
|
1,130
|
6.47
|
||||||||||||
|
Residential real estate
|
88,144
|
1,179
|
5.35
|
75,890
|
971
|
5.12
|
||||||||||||
|
Other
|
57,522
|
969
|
6.74
|
66,698
|
1,145
|
6.87
|
||||||||||||
|
Total loans receivable
|
2,628,698
|
31,415
|
4.78
|
2,711,393
|
33,324
|
4.92
|
||||||||||||
|
Investment securities (3)
|
491,588
|
4,216
|
3.43
|
425,637
|
5,099
|
4.79
|
||||||||||||
|
Interest-earning deposits with banks
|
166,425
|
105
|
0.25
|
8,069
|
2
|
0.10
|
||||||||||||
|
Total interest-earning assets
|
3,286,711
|
35,736
|
4.35
|
3,145,099
|
38,425
|
4.89
|
||||||||||||
|
Non-interest-earning assets:
|
||||||||||||||||||
|
Cash and due from banks
|
47,492
|
97,729
|
||||||||||||||||
|
Bank properties and equipment, net
|
53,018
|
53,147
|
||||||||||||||||
|
Goodwill and intangible assets, net
|
49,402
|
142,778
|
||||||||||||||||
|
Other assets
|
146,024
|
151,586
|
||||||||||||||||
|
Total non-interest-earning assets
|
295,936
|
445,240
|
||||||||||||||||
|
Total assets
|
$
|
3,582,647
|
$
|
3,590,339
|
||||||||||||||
|
Interest-bearing liabilities:
|
||||||||||||||||||
|
Interest-bearing deposit accounts:
|
||||||||||||||||||
|
Interest-bearing demand deposits
|
$
|
1,387,423
|
2,581
|
0.74
|
%
|
$
|
1,175,432
|
2,703
|
0.92
|
%
|
||||||||
|
Savings deposits
|
281,401
|
510
|
0.72
|
299,055
|
673
|
0.90
|
|
|||||||||||
|
Time deposits
|
854,677
|
3,566
|
1.67
|
931,755
|
4,849
|
2.08
|
||||||||||||
|
Total interest-bearing deposit accounts
|
2,523,501
|
6,657
|
1.06
|
2,406,242
|
8,225
|
1.37
|
||||||||||||
|
Short-term borrowings:
|
||||||||||||||||||
|
Federal funds purchased
|
-
|
-
|
-
|
94,366
|
53
|
0.22
|
||||||||||||
|
Securities sold under agreements to repurchase - customers
|
14,457
|
8
|
0.22
|
20,508
|
10
|
0.20
|
||||||||||||
|
Long-term borrowings:
|
||||||||||||||||||
|
FHLBNY advances (4)
|
19,102
|
246
|
5.15
|
30,316
|
349
|
4.60
|
||||||||||||
|
Obligations under capital lease
|
8,138
|
138
|
6.78
|
8,322
|
138
|
6.63
|
||||||||||||
|
Junior subordinated debentures
|
92,786
|
1,032
|
4.45
|
92,786
|
1,024
|
4.41
|
||||||||||||
|
Total borrowings
|
134,483
|
1,424
|
4.24
|
246,298
|
1,574
|
2.56
|
||||||||||||
|
Total interest-bearing liabilities
|
2,657,984
|
8,081
|
1.22
|
2,652,540
|
9,799
|
1.48
|
||||||||||||
|
Non-interest-bearing liabilities:
|
||||||||||||||||||
|
Non-interest-bearing demand deposits
|
509,093
|
480,080
|
||||||||||||||||
|
Other liabilities
|
118,452
|
93,188
|
||||||||||||||||
|
Total non-interest-bearing liabilities
|
627,545
|
573,268
|
||||||||||||||||
|
Total liabilities
|
3,285,529
|
3,225,808
|
||||||||||||||||
|
Shareholders' equity
|
297,118
|
364,531
|
||||||||||||||||
|
Total liabilities and shareholders' equity
|
$
|
3,582,647
|
$
|
3,590,339
|
||||||||||||||
|
Net interest income
|
$
|
27,655
|
$
|
28,626
|
||||||||||||||
|
Interest rate spread (5)
|
3.13
|
%
|
3.41
|
%
|
||||||||||||||
|
Net interest margin (6)
|
3.37
|
%
|
3.64
|
%
|
||||||||||||||
|
Ratio of average interest-earning assets to average interest-bearing liabilities
|
123.65
|
%
|
118.57
|
%
|
||||||||||||||
|
(1) Average balances include non-accrual loans.
|
||||||||||||||||||
|
(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 adjustment for three months ended December 31, 2010 and 2009 was $382,000 and $558,000, respectively.
|
||||||||||||||||||
|
(4) Amounts include Advances from FHLBNY and Securities sold under agreements to repurchase - FHLBNY.
|
||||||||||||||||||
|
(5) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
|
||||||||||||||||||
|
(6) Net interest margin represents net interest income as a percentage of average interest-earning assets.
|
||||||||||||||||||
-12-
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
||||||||||||||||||
|
AVERAGE BALANCE SHEETS (Unaudited)
|
||||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
|
For the Year Ended
December 31, 2010
|
For the Year Ended
December 31, 2009
|
|||||||||||||||||
|
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
|||||||||||||
|
Balance
|
Expense
|
Cost
|
Balance
|
Expense
|
Cost
|
|||||||||||||
|
Interest-earning assets:
|
||||||||||||||||||
|
Loans receivable (1),(2):
|
||||||||||||||||||
|
Commercial and industrial
|
$
|
2,245,118
|
$
|
105,210
|
4.69
|
%
|
$
|
2,237,940
|
$
|
104,713
|
4.68
|
%
|
||||||
|
Home equity lines of credit
|
251,599
|
11,714
|
4.66
|
265,240
|
13,219
|
4.98
|
||||||||||||
|
Home equity term loans
|
62,349
|
3,889
|
6.24
|
75,084
|
4,845
|
6.45
|
||||||||||||
|
Residential real estate
|
79,547
|
4,415
|
5.55
|
74,823
|
4,235
|
5.66
|
||||||||||||
|
Other
|
60,874
|
4,163
|
6.84
|
72,946
|
4,799
|
6.58
|
||||||||||||
|
Total loans receivable
|
2,699,487
|
129,391
|
4.79
|
2,726,033
|
131,811
|
4.84
|
||||||||||||
|
Investment securities (3)
|
452,365
|
17,846
|
3.95
|
442,868
|
21,114
|
4.77
|
||||||||||||
|
Interest-earning deposits with banks
|
69,803
|
166
|
0.24
|
40,029
|
83
|
0.21
|
||||||||||||
|
Federal funds sold
|
-
|
-
|
-
|
94
|
-
|
-
|
||||||||||||
|
Total interest-earning assets
|
3,221,655
|
147,403
|
4.58
|
3,209,024
|
153,008
|
4.77
|
||||||||||||
|
Non-interest-earning assets:
|
||||||||||||||||||
|
Cash and due from banks
|
47,393
|
60,687
|
||||||||||||||||
|
Bank properties and equipment, net
|
52,944
|
50,522
|
||||||||||||||||
|
Goodwill and intangible assets, net
|
95,010
|
144,461
|
||||||||||||||||
|
Other assets
|
150,558
|
145,015
|
||||||||||||||||
|
Total non-interest-earning assets
|
345,905
|
400,685
|
||||||||||||||||
|
Total assets
|
$
|
3,567,560
|
$
|
3,609,709
|
||||||||||||||
|
Interest-bearing liabilities:
|
||||||||||||||||||
|
Interest-bearing deposit accounts:
|
||||||||||||||||||
|
Interest-bearing demand deposits
|
$
|
1,312,871
|
10,692
|
0.81
|
$
|
1,073,337
|
10,672
|
0.99
|
%
|
|||||||||
|
Savings deposits
|
295,121
|
2,283
|
0.77
|
297,820
|
2,937
|
0.99
|
||||||||||||
|
Time deposits
|
899,038
|
15,805
|
1.76
|
1,118,120
|
30,748
|
2.75
|
||||||||||||
|
Total interest-bearing deposit accounts
|
2,507,030
|
28,780
|
1.15
|
2,489,277
|
44,357
|
1.78
|
||||||||||||
|
Short-term borrowings:
|
||||||||||||||||||
|
Federal funds purchased
|
16,907
|
89
|
0.53
|
39,607
|
114
|
0.29
|
||||||||||||
|
Securities sold under agreements to repurchase - customers
|
16,069
|
29
|
0.18
|
17,997
|
42
|
0.23
|
||||||||||||
|
Long-term borrowings:
|
||||||||||||||||||
|
FHLBNY advances (4)
|
22,710
|
1,076
|
4.74
|
32,178
|
1,439
|
4.47
|
||||||||||||
|
Obligations under capital lease
|
8,212
|
550
|
6.70
|
6,788
|
466
|
6.87
|
||||||||||||
|
Junior subordinated debentures
|
92,786
|
4,117
|
4.44
|
92,786
|
4,424
|
4.77
|
||||||||||||
|
Total borrowings
|
156,684
|
5,861
|
3.74
|
189,356
|
6,485
|
3.42
|
||||||||||||
|
Total interest-bearing liabilities
|
2,663,714
|
34,641
|
1.30
|
2,678,633
|
50,842
|
1.90
|
||||||||||||
|
Non-interest-bearing liabilities:
|
||||||||||||||||||
|
Non-interest-bearing demand deposits
|
481,757
|
446,713
|
||||||||||||||||
|
Other liabilities
|
96,420
|
98,339
|
||||||||||||||||
|
Total non-interest-bearing liabilities
|
578,177
|
545,052
|
||||||||||||||||
|
Total liabilities
|
3,241,891
|
3,223,685
|
||||||||||||||||
|
Shareholders' equity
|
325,669
|
386,024
|
||||||||||||||||
|
Total liabilities and shareholders' equity
|
$
|
3,567,560
|
$
|
3,609,709
|
||||||||||||||
|
Net interest income
|
$
|
112,762
|
$
|
102,166
|
||||||||||||||
|
Interest rate spread (5)
|
3.28
|
%
|
2.87
|
%
|
||||||||||||||
|
Net interest margin (6)
|
3.50
|
%
|
3.18
|
%
|
||||||||||||||
|
Ratio of average interest-earning assets to average interest-bearing liabilities
|
120.95
|
%
|
119.80
|
%
|
||||||||||||||
|
(1) Average balances include non-accrual loans.
|
||||||||||||||||||
|
(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 adjustment for the year ended December 31, 2010 and 2009 was $1.8 million and $2.0 million, respectively.
|
||||||||||||||||||
|
(4) Amounts include Advances from FHLBNY and Securities sold under agreements to repurchase - FHLBNY.
|
||||||||||||||||||
|
(5) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
|
||||||||||||||||||
|
(6) Net interest margin represents net interest income as a percentage of average interest-earning assets.
|
||||||||||||||||||
-13-
|
SUN BANCORP, INC. AND SUBSIDIARIES
|
||||||||||||||||||
|
AVERAGE BALANCE SHEETS (Unaudited)
|
||||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
|
For the Three Months Ended
December 31, 2010
|
For the Three Months Ended
September 30, 2010
|
|||||||||||||||||
|
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
|||||||||||||
|
Balance
|
Expense
|
Cost
|
Balance
|
Expense
|
Cost
|
|||||||||||||
|
Interest-earning assets:
|
||||||||||||||||||
|
Loans receivable (1),(2):
|
||||||||||||||||||
|
Commercial and industrial
|
$
|
2,184,212
|
$
|
25,654
|
4.70
|
%
|
$
|
2,292,274
|
$
|
26,620
|
4.65
|
%
|
||||||
|
Home equity lines of credit
|
241,510
|
2,744
|
4.54
|
250,033
|
2,921
|
4.67
|
||||||||||||
|
Home equity term loans
|
57,310
|
869
|
6.07
|
60,729
|
932
|
6.14
|
||||||||||||
|
Residential real estate
|
88,144
|
1,179
|
5.35
|
82,094
|
1,160
|
5.65
|
||||||||||||
|
Other
|
57,522
|
969
|
6.74
|
59,998
|
1,031
|
6.87
|
||||||||||||
|
Total loans receivable
|
2,628,698
|
31,415
|
4.78
|
2,745,128
|
32,664
|
4.76
|
||||||||||||
|
Investment securities (3)
|
491,588
|
4,216
|
3.43
|
443,203
|
4,261
|
3.85
|
||||||||||||
|
Interest-earning deposits with banks
|
166,425
|
105
|
0.25
|
75,059
|
46
|
0.25
|
||||||||||||
|
Total interest-earning assets
|
3,286,711
|
35,736
|
4.35
|
3,263,390
|
36,971
|
4.53
|
||||||||||||
|
Non-interest-earning assets:
|
||||||||||||||||||
|
Cash and due from banks
|
47,492
|
51,660
|
||||||||||||||||
|
Bank properties and equipment, net
|
53,018
|
52,962
|
||||||||||||||||
|
Goodwill and intangible assets, net
|
49,402
|
50,324
|
||||||||||||||||
|
Other assets
|
146,024
|
159,960
|
||||||||||||||||
|
Total non-interest-earning assets
|
295,936
|
314,906
|
||||||||||||||||
|
Total assets
|
$
|
3,582,647
|
$
|
3,578,296
|
||||||||||||||
|
Interest-bearing liabilities:
|
||||||||||||||||||
|
Interest-bearing deposit accounts:
|
||||||||||||||||||
|
Interest-bearing demand deposits
|
$
|
1,387,423
|
2,581
|
0.74
|
%
|
$
|
1,325,084
|
2,706
|
0.82
|
%
|
||||||||
|
Savings deposits
|
281,401
|
510
|
0.72
|
293,744
|
550
|
0.75
|
||||||||||||
|
Time deposits
|
854,677
|
3,566
|
1.67
|
919,404
|
4,004
|
1.74
|
||||||||||||
|
Total interest-bearing deposit accounts
|
2,523,501
|
6,657
|
1.06
|
2,538,232
|
7,260
|
1.14
|
||||||||||||
|
Short-term borrowings:
|
||||||||||||||||||
|
Federal funds purchased
|
-
|
-
|
-
|
6,288
|
5
|
0.32
|
||||||||||||
|
Securities sold under agreements to repurchase - customers
|
14,457
|
8
|
0.22
|
19,003
|
9
|
0.19
|
||||||||||||
|
Long-term borrowings:
|
||||||||||||||||||
|
FHLBNY advances (4)
|
19,102
|
246
|
5.15
|
19,412
|
222
|
4.57
|
||||||||||||
|
Obligations under capital lease
|
8,138
|
138
|
6.78
|
8,194
|
136
|
6.64
|
||||||||||||
|
Junior subordinated debentures
|
92,786
|
1,032
|
4.45
|
92,786
|
1,054
|
4.54
|
||||||||||||
|
Total borrowings
|
134,483
|
1,424
|
4.24
|
145,683
|
1,426
|
3.92
|
||||||||||||
|
Total interest-bearing liabilities
|
2,657,984
|
8,081
|
1.22
|
2,683,915
|
8,686
|
1.29
|
||||||||||||
|
Non-interest-bearing liabilities:
|
||||||||||||||||||
|
Non-interest-bearing demand deposits
|
509,093
|
505,036
|
||||||||||||||||
|
Other liabilities
|
118,452
|
101,448
|
||||||||||||||||
|
Total non-interest-bearing liabilities
|
627,545
|
606,484
|
||||||||||||||||
|
Total liabilities
|
3,285,529
|
3,290,399
|
||||||||||||||||
|
Shareholders' equity
|
297,118
|
287,897
|
||||||||||||||||
|
Total liabilities and shareholders' equity
|
$
|
3,582,647
|
$
|
3,578,296
|
||||||||||||||
|
Net interest income
|
$
|
27,655
|
$
|
28,285
|
||||||||||||||
|
Interest rate spread (5)
|
3.13
|
%
|
3.24
|
%
|
||||||||||||||
|
Net interest margin (6)
|
3.37
|
%
|
3.47
|
%
|
||||||||||||||
|
Ratio of average interest-earning assets to average interest-bearing liabilities
|
123.65
|
%
|
121.59
|
%
|
||||||||||||||
|
(1) Average balances include non-accrual loans.
|
||||||||||||||||||
|
(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 adjustment for three months ended December 31, 2010 and September 30, 2010 was $382,000 and $399,000, respectively.
|
||||||||||||||||||
|
(4) Amounts include Advances from FHLBNY and Securities sold under agreements to repurchase - FHLBNY.
|
||||||||||||||||||
|
(5) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
|
||||||||||||||||||
|
(6) Net interest margin represents net interest income as a percentage of average interest-earning assets.
|
||||||||||||||||||
-14-