Sun Bancorp, Inc. Reports Fourth Quarter and Full Year Results for 2007
VINELAND, N.J., Jan. 22, 2008 (PRIME NEWSWIRE) -- Sun Bancorp, Inc. (Nasdaq:SNBC) today reported net income of $3.9 million, or $.17 per share diluted, for the quarter ended December 31, 2007, compared to net income of $4.5 million, or $.20 per share diluted, for the fourth quarter of 2006. Net income for the fourth quarter 2006 includes pre-tax charges of approximately $1.1 million ($.03 per share) related to two branch consolidations and severance expense.
Net income for the year ended December 31, 2007 was $19.4 million, or $.86 per share diluted, compared to net income of $17.3 million, or $.77 per share diluted, for the prior year. The full-year 2007 results included net-charges of approximately $2.1 million (pre-tax), or $.06 per share. The net charges include $2.4 million of severance and other related expenses, a $915,000 write-off of unamortized issuance costs of redeemed trust preferred securities and early extinguishment of debt charges on FHLB borrowings, and $185,000 of branch consolidation charges. Offsetting these charges was a pre-tax gain of $1.4 million realized from the sale of three branches. The prior year included approximately $1.6 million (pre-tax), or $.05 per share, in branch rationalization and severance related charges.
"As we closed out 2007 with expectations that the difficult operating environment will continue indefinitely, credit quality is first and foremost on everyone's mind. Accordingly, during the quarter we charged off $4.8 million of delinquent loans and recorded a $5.4 million loan loss provision to maintain adequate reserve coverage (1.08%). These charge-offs and loan loss provision exceeded our previously announced levels. This positions us well for forward progress, when combined with favorable performance trends throughout 2007 for our net interest margin, non-interest income growth and expense control," said Thomas X. Geisel, president and chief executive officer of Sun Bancorp. "Our credit risk assessment process is being administered by a seasoned team and we are optimistic that we can maintain loan quality while the lenders produce respectable growth throughout the various segments of the portfolio."
"During 2007, market conditions enabled us to repurchase 1,010,523 shares of our outstanding common stock, thus completing in late December a plan that authorized the buyback of about 5%, or approximately 1,000,000 shares. Of the total, 467,545 shares were repurchased during the fourth quarter. The Board subsequently authorized a new stock repurchase plan covering up to approximately 5%, or approximately 1,100,000 additional shares, of common stock to be purchased in the open market or in privately negotiated transactions. We expect to continue to be an active purchaser of our stock as opportunities arise," said Geisel.
The following is an overview of the key financial highlights:
-- Total assets were $3.338 billion at December 31, 2007, compared
to $3.296 billion at September 30, 2007 and $3.326 billion at
December 31, 2006.
-- Total loans before allowance for loan losses were $2.510 billion
at December 31, 2007, an increase of $143.3 million, or 6.1% over
total loans at December 31, 2006. Linked quarter loan growth
normalized for prepayments of about $39.0 million during the
quarter approximated 3.0%. Total loan growth over year end 2006
normalized for prepayments and a branch sale approximates 13.1%.
-- Total non-performing assets were $29.6 million at December 31,
2007, or 1.18% of total loans and real estate owned, compared to
$15.2 million, or .64% of total loans and real estate owned, at
December 31, 2006. On a linked quarter basis, total
non-performing assets increased $7.5 million. Net charge-offs for
the quarter were $4.8 million and the loan loss provision for the
quarter was $5.4 million. The allowance for loan losses to total
loans is 1.08% at December 31, 2007, compared to 1.08% at
December 31, 2006 and 1.06% at September 30, 2007.
-- Total deposits were $2.699 billion at December 31, 2007, an
increase of $31.1 million, or 1.2% over deposits at December 31,
2006. On average, total deposits increased 3.8% year-to-year.
Total deposits increased approximately 1% over the linked
quarter.
-- Net interest income (tax-equivalent basis) of $26.2 million for
the quarter compares to $24.8 million for the comparable prior
year period and $25.8 million for the linked third quarter. The
net interest margin for the quarter of 3.52% compares to 3.37%
for the comparable prior year period and 3.49% for the linked
third quarter. The linked quarter margin improvement reflects a
net spread increase of 12 basis points. This increase is due to a
decrease of 25 basis points in the cost of interest-bearing
liabilities offset by a decrease in yield on earning assets of 13
basis points.
-- Total operating non-interest income for the quarter of $6.5
million increased $1.1 million, or 21.3% over the comparable
prior year period and increased $471,000, or 7.8% over the linked
third quarter. The increase over the prior year period was
attributable to increases in service charges on deposit accounts
of $238,000, an increase in net gain on derivative instruments of
$311,000 and an increase in BOLI income of $585,000. The increase
over the linked quarter was primarily related to an increase in
BOLI income of $506,000, an increase in gain on derivative
instruments of $214,000 offset partially by a decrease in service
charges on deposit accounts of $164,000. During the quarter, the
Company completed a conversion of approximately $40.4 million of
its existing general account BOLI to a new separate account
policy. The net conversion cost for this transaction resulted in
the recognition of $301,000 in BOLI income and $416,000 in
federal income tax expense for the quarter. Total operating
non-interest income for the year 2007 of $24.4 million increased
$4.3 million, or 21.2% over 2006. The primary increases were
related to an increase in service charges on deposit accounts of
$2.6 million, an increase in gain on derivative instruments of
$389,000, an increase in BOLI income of $684,000 and an increase
in gain on sale of loans of $562,000. Total operating
non-interest income for the year 2007 represents approximately
20.0% of total revenue compared to 2006 at approximately 17.0%.
-- Total operating non-interest expenses for the quarter of $21.5
million increased $374,000, or 1.8% over the comparable prior
year period. The primary increase is FDIC insurance expense
which increased over the prior period by $392,000 due to the FDIC
reform legislation effective for 2007. Total operating
non-interest expense decreased approximately 1.0% over the linked
third quarter. Total operating non-interest expenses for the year
of $86.3 million decreased $1.9 million, or 2.2% over the prior
year. The full year impact of increased FDIC insurance expense
over the prior year was $971,000. The efficiency ratio for the
quarter of 66.61% compares to the comparable prior year period
efficiency ratio of 74.06%. The efficiency ratio has continued to
trend favorably each quarter of 2007. The efficiency ratio for
the year, excluding the non-operating income and expenses items
previously noted, is 69.37% and compares to the prior year on the
same basis, at 73.97%. This continues to reflect the Company's
focus on ongoing profitability enhancement initiatives with
particular emphasis on expense efficiency savings.
The Company will hold its regular quarterly conference call on Wednesday, January 23, 2008 at 9:30 a.m. (ET). Participants may call 1-800-391-2548 and give the verbal password: vi36443. The conference call also will be Web cast live through the Sun Bancorp Web site at www.sunnb.com. Participants are advised to call in or 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. is a multi-state bank holding company headquartered in Vineland, New Jersey. Its primary subsidiary is Sun National Bank, serving customers through 70 branch locations in Southern and Central New Jersey and New Castle County, Delaware. 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.
SUN BANCORP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (unaudited)
(Dollars in thousands, except per share data)
For the Three For the
Months Ended Years Ended
December 31, December 31,
----------------- -----------------
2007 2006 2007 2006
------- ------- ------- -------
Profitability for the period:
Net interest income $25,838 $24,545 $99,176 $99,078
Provision for loan losses 5,443 990 8,403 3,807
Non-interest income 6,482 5,012 25,815 19,746
Non-interest expense 21,528 21,889 88,963 89,393
Income before income
taxes 5,349 6,678 27,625 25,624
Net income $ 3,870 $ 4,454 $19,352 $17,274
======= ======= ======= =======
Financial ratios:
Return on average assets (1) 0.47% 0.54% 0.58% 0.53%
Return on average equity (1) 4.26% 5.24% 5.45% 5.28%
Return on average tangible
equity (1),(2) 7.33% 9.78% 9.61% 10.15%
Net interest margin (1) 3.52% 3.37% 3.38% 3.44%
Efficiency ratio 66.61% 74.06% 71.18% 75.23%
Efficiency ratio, excluding
non-operating income and
non-operating expense (3) 66.61% 70.78% 69.37% 73.97%
Earnings per common share (4):
Basic $ 0.18 $ 0.21 $ 0.89 $ 0.81
Diluted $ 0.17 $ 0.20 $ 0.86 $ 0.77
Average equity to
average assets 10.93% 10.34% 10.72% 10.09%
December 31,
---------------------------
2007 2006
---------- ----------
At period-end:
Total assets $3,338,392 $3,325,563
Total deposits 2,699,091 2,667,997
Loans receivable, net of
allowance for loan losses 2,482,917 2,340,965
Investments 461,639 525,122
Borrowings 154,213 160,622
Junior subordinated
debentures 97,941 108,250
Shareholders' equity 362,177 342,227
Credit quality and capital
ratios:
Allowance for loan losses
to gross loans 1.08% 1.08%
Non-performing assets to
gross loans and real estate
owned 1.18% 0.64%
Allowance for loan losses
to non-performing loans 95.77% 175.50%
Total capital (to risk-
weighted assets) (5)
Sun Bancorp, Inc. 11.93% 11.89%
Sun National Bank 11.08% 10.57%
Tier 1 capital (to risk-
weighted assets) (5)
Sun Bancorp, Inc. 10.95% 10.91%
Sun National Bank 10.11% 9.59%
Leverage ratio (5)
Sun Bancorp, Inc. 9.67% 9.40%
Sun National Bank 8.98% 8.28%
Book value $ 16.68 $ 15.89
Tangible book value $ 9.71 $ 8.62
(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 expenses, is computed by dividing non-interest
expense for the period by the summation of net interest income
and non-interest income. Net interest income for the year ended
December 31, 2007 excludes the write-off of $791,000 of
unamortized costs on redeemed trust preferred securities.
Non-interest income for the year ended December 31, 2007 excludes
a net gain of $1.4 million from the sale of branches as compared
to a net loss of $330,000 from the sale of bank property for the
same period in 2006. Non-interest expense for the year ended
December 31, 2007 excludes $2.4 million of severance related
expenses and $185,000 in branch rationalization charges as
compared to $740,000 of severance related expenses and $495,000
in branch rationalization charges for the same period in 2006. In
addition, non-interest expense for the year ended December 31,
2007 excludes $124,000 resulting from the early extinguishment of
FHLB borrowing. Non-interest income for the three months ended
December 31, 2006 excludes a net loss of $330,000 from the sale
of bank property. In addition, non-interest expense for the three
months ended December 31, 2006 excludes $240,000 in severance
related expenses and $495,000 in branch rationalization charges.
(4) Data is adjusted for a 5% stock dividend declared in April 2007.
(5) December 31, 2007 capital ratios are estimated, subject to
regulatory filings.
SUN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)
(Dollars in thousands, except par value)
December 31,
---------------------------
2007 2006
---------- ----------
ASSETS
Cash and due from banks $ 81,479 $ 74,991
Interest-earning bank
balances 2,380 48,066
Federal funds sold 2,654 47,043
---------- ----------
Cash and cash equivalents 86,513 170,100
Investment securities
available for sale
(amortized cost - $427,378
and $488,007 December 31,
2007 and December 31, 2006,
respectively) 425,805 481,952
Investment securities held
to maturity (estimated
fair value - $18,755 and
$24,846 at December 31,
2007 and December 31, 2006,
respectively) 18,965 25,441
Loans receivable (net of
allowance for loan losses -
$27,002 and $25,658 at
December 31, 2007 and
December 31, 2006,
respectively) 2,482,917 2,340,965
Restricted equity investments 16,869 17,729
Bank properties and
equipment, net 48,118 42,292
Real estate owned, net 1,449 600
Accrued interest receivable 15,018 14,657
Goodwill 127,894 128,117
Intangible assets, net 23,479 28,570
Deferred taxes, net 3,169 3,939
Bank owned life insurance 72,487 57,370
Other assets 15,709 13,831
---------- ----------
Total assets $3,338,392 $3,325,563
========== ==========
LIABILITIES & SHAREHOLDERS' EQUITY
LIABILITIES
Deposits $2,699,091 $2,667,997
Advances from the Federal
Home Loan Bank (FHLB) 63,483 103,560
Federal funds purchased 30,000 --
Securities sold under
agreements to repurchase
- FHLB 15,000 --
Securities sold under
agreements to repurchase
- customers 40,472 51,740
Obligation under capital
lease 5,258 5,322
Junior subordinated
debentures 97,941 108,250
Other liabilities 24,970 46,467
---------- ----------
Total liabilities 2,976,215 2,983,336
========== ==========
SHAREHOLDERS' EQUITY
Preferred stock, $1 par
value, 1,000,000 shares
authorized, none issued -- --
Common stock, $1 par value,
50,000,000 shares
authorized, 22,722,655 and
20,507,549 issued at
December 31, 2007 and
December 31, 2006,
respectively 22,723 20,508
Additional paid-in capital 336,668 304,857
Retained earnings 20,338 20,794
Accumulated other
comprehensive loss (1,027) (3,932)
Treasury stock at cost,
1,010,523 shares at
December 31, 2007 (16,525) --
---------- ----------
Total shareholders' equity 362,177 342,227
---------- ----------
Total liabilities and
shareholders' equity $3,338,392 $3,325,563
========== ==========
SUN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars in thousands, except per share data)
For the For the
Three Months Ended Years Ended
December 31, December 31,
------------------ ------------------
2007 2006 2007 2006
-------- -------- -------- --------
INTEREST INCOME
Interest and fees on loans $ 43,991 $ 42,991 $174,767 $160,876
Interest on taxable
investment securities 4,306 4,252 17,741 19,195
Interest on non-taxable
investment securities 728 517 2,818 1,564
Dividends on restricted
equity investments 281 282 1,112 1,143
Interest on federal funds
sold 86 494 1,725 1,172
-------- -------- -------- --------
Total interest income 49,392 48,536 198,163 183,950
-------- -------- -------- --------
INTEREST EXPENSE
Interest on deposits 20,211 19,802 84,252 66,892
Interest on borrowed funds 1,556 1,997 6,267 9,571
Interest on junior
subordinated debentures 1,787 2,192 8,468 8,409
-------- -------- -------- --------
Total interest expense 23,554 23,991 98,987 84,872
-------- -------- -------- --------
Net interest income 25,838 24,545 99,176 99,078
PROVISION FOR LOAN LOSSES 5,443 990 8,403 3,807
-------- -------- -------- --------
Net interest income after
provision for loan losses 20,395 23,555 90,773 95,271
-------- -------- -------- --------
NON-INTEREST INCOME
Service charges on deposit
accounts 3,421 3,183 13,687 11,117
Other service charges 85 73 307 311
Net gain on sale of
branches -- -- 1,443 --
(Loss) gain on sale of
bank property & equipment -- (330) 12 (330)
Loss on sale of investment
securities -- (1) -- (21)
Gain on sale of loans 342 463 1,689 1,127
Net gain on derivative
instruments 511 200 1,567 1,178
Other 2,123 1,424 7,110 6,364
-------- -------- -------- --------
Total non-interest income 6,482 5,012 25,815 19,746
-------- -------- -------- --------
NON-INTEREST EXPENSE
Salaries and employee
benefits 11,004 10,842 45,432 45,079
Occupancy expense 2,830 3,361 11,491 12,136
Equipment expense 1,660 1,970 7,172 7,926
Amortization of intangible
expenses 1,177 1,193 4,714 4,767
Data processing expense 1,078 895 4,249 4,283
Advertising expense 459 407 1,856 1,683
Other 3,320 3,221 14,049 13,519
-------- -------- -------- --------
Total non-interest expense 21,528 21,889 88,963 89,393
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 5,349 6,678 27,625 25,624
INCOME TAXES 1,479 2,224 8,273 8,350
-------- -------- -------- --------
NET INCOME $ 3,870 $ 4,454 $ 19,352 $ 17,274
======== ======== ======== ========
Basic earnings per share (1) $ 0.18 $ 0.21 $ 0.89 $ 0.81
======== ======== ======== ========
Diluted earnings per share (1) $ 0.17 $ 0.20 $ 0.86 $ 0.77
======== ======== ======== ========
(1) Data is adjusted for a 5% stock dividend declared in April 2007.
SUN BANCORP, INC. AND SUBSIDIARIES
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (unaudited)
(Dollars in thousands)
2007 2007 2007 2007 2006
Q4 Q3 Q2 Q1 Q4
---------- ---------- ---------- ---------- ----------
Balance sheet
at quarter
end:
Loans:
Commercial
and
industrial $2,024,728 $1,990,027 $1,985,584 $1,972,491 $1,925,103
Home equity 264,965 258,991 245,283 234,982 232,321
Second
mortgage 81,063 79,464 79,120 76,449 77,337
Residential
real
estate 49,750 54,601 47,101 38,798 38,418
Other 89,413 91,094 91,618 93,149 93,444
---------- ---------- ---------- ---------- ----------
Total
gross
loans 2,509,919 2,474,177 2,448,706 2,415,869 2,366,623
Allowance
for loan
losses (27,002) (26,340) (26,079) (26,027) (25,658)
---------- ---------- ---------- ---------- ----------
Net
loans 2,482,917 2,447,837 2,422,627 2,389,842 2,340,965
Goodwill 127,894 127,935 127,936 127,936 128,117
Intangible
assets, net 23,479 24,656 25,833 27,011 28,570
Total assets 3,338,392 3,295,576 3,324,633 3,326,681 3,325,563
Total
deposits 2,699,091 2,682,286 2,725,747 2,694,304 2,667,997
Advances from
the Federal
Home Loan
Bank (FHLB) 63,483 64,763 66,029 100,481 103,560
Federal funds
purchased 30,000 -- -- 1,500 --
Securities
sold under
agreements
to re-
purchase -
FHLB 15,000 15,000 -- -- --
Securities
sold under
agreements
to re-
purchase -
customers 40,472 46,499 44,612 42,511 51,740
Obligation
under
capital
lease 5,258 5,275 5,291 5,307 5,322
Junior
subordinated
debentures 97,941 97,941 97,941 108,250 108,250
Total
shareholders'
equity 362,177 361,645 355,758 348,595 342,227
Quarterly
average
balance sheet:
Loans:
Commercial
and
in-
dustrial $2,030,928 $1,981,778 $1,978,175 $1,956,190 $1,937,580
Home equity 263,245 250,474 240,150 233,837 229,002
Second
mortgage 80,400 78,643 77,442 76,167 77,593
Residential
real
estate 50,734 49,635 39,193 37,710 35,323
Other 87,155 89,566 91,578 92,705 90,358
---------- ---------- ---------- ---------- ----------
Total
gross
loans 2,512,462 2,450,096 2,426,538 2,396,609 2,369,856
Securities
and other
interest-
earning
assets 468,418 509,016 577,669 560,574 578,983
Total
interest-
earning
assets 2,980,880 2,959,112 3,004,207 2,957,183 2,948,839
Total assets 3,322,686 3,292,687 3,341,506 3,302,913 3,288,123
Non-interest-
bearing
demand
deposits 434,066 462,173 458,851 458,201 480,339
Total
deposits 2,689,326 2,682,879 2,724,554 2,664,668 2,648,713
Total
interest-
bearing
liabilities 2,499,003 2,445,187 2,501,896 2,466,678 2,445,320
Total
shareholders'
equity 363,302 359,949 353,280 344,717 339,839
Capital and
credit
quality
measures:
Total Capital
(to Risk-
Weighted
Assets)(1):
Sun Bancorp,
Inc. 11.93% 11.97% 11.80% 11.98% 11.89%
Sun National
Bank 11.08% 11.06% 10.74% 10.64% 10.57%
Tier I
Capital (to
Risk-
Weighted
Assets)(1):
Sun Bancorp,
Inc. 10.95% 10.99% 10.83% 11.00% 10.91%
Sun National
Bank 10.11% 10.05% 9.77% 9.66% 9.59%
Leverage Ratio
(1):
Sun Bancorp,
Inc. 9.67% 9.80% 9.46% 9.58% 9.40%
Sun National
Bank 8.98% 8.95% 8.54% 8.42% 8.28%
Average
equity to
average
assets 10.93% 10.93% 10.57% 10.44% 10.34%
Allowance for
loan losses
to total
gross loans 1.08% 1.06% 1.07% 1.08% 1.08%
Non-
performing
assets to
total gross
loans and
real estate
owned 1.18% 0.90% 0.67% 0.63% 0.64%
Allowance for
loan losses
to non-
performing
loans 95.77% 127.11% 169.98% 177.14% 175.50%
Other data:
Net
charge-
offs $ (4,781) $ (999) $ (898) $ (381) $ (1,117)
========= ========= ========= ========= =========
Non-
performing
assets:
Non-
accrual
loans $ 26,853 $ 18,157 $ 14,505 $ 14,147 $ 14,322
Loans past
due 90
days and
accruing 1,343 2,565 837 546 298
Real
estate
owned,
net 1,449 1,449 1,165 600 600
--------- --------- --------- --------- ---------
Total
non-
per-
forming
assets $ 29,645 $ 22,171 $ 16,507 $ 15,293 $ 15,220
========= ========= ========= ========= =========
(1) December 31, 2007 capital ratios are estimated, subject to
regulatory filings.
SUN BANCORP, INC. AND SUBSIDIARIES
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (unaudited)
(Dollars in thousands, except per share data)
2007 2007 2007 2007 2006
Q4 Q3 Q2 Q1 Q4
-------- -------- -------- -------- --------
Profitability
for the
quarter:
Tax-
equivalent
interest
income $ 49,783 $ 50,406 $ 50,049 $ 49,441 $ 48,807
Interest
expense 23,554 24,567 26,108 24,758 23,991
Tax-
equivalent
net
interest
income 26,229 25,839 23,941 24,683 24,816
Tax-
equivalent
adjustment 391 384 391 350 271
Provision for
loan losses 5,443 1,260 950 750 990
Non-interest
income,
excluding
loss on sale
of
investment
securities,
net gain on
sale of
branches and
net gain
(loss) on
sale or
disposal of
bank
property and
equipment 6,482 6,011 6,293 5,574 5,343
Loss on sale
of
investment
securities -- -- -- -- (1)
Net gain on
sale of
branches -- -- -- 1,443 --
Net gain
(loss) on
sale or
disposal of
bank
property &
equipment -- -- 12 -- (330)
Non-interest
expense,
excluding
amortization
of
intangible
assets 20,351 20,669 20,840 22,389 20,696
Amortization
of
intangible
assets 1,177 1,177 1,178 1,182 1,193
Income before
income taxes 5,349 8,360 6,887 7,029 6,678
Income tax
expense 1,479 2,475 1,975 2,344 2,224
Net income $ 3,870 $ 5,885 $ 4,912 $ 4,685 $ 4,454
======== ======== ======== ======== ========
Financial
ratios:
Return on
average
assets(1) 0.47% 0.71% 0.59% 0.57% 0.54%
Return on
average
equity(1) 4.26% 6.54% 5.56% 5.44% 5.24%
Return on
average
tangible
equity(1),(2) 7.33% 11.39% 9.88% 9.93% 9.78%
Net interest
margin(1) 3.52% 3.49% 3.19% 3.34% 3.37%
Efficiency
ratio 66.61% 69.43% 73.75% 75.19% 74.06%
Efficiency
ratio,
excluding
non-operating
income and
non-
operating
expense 66.61% 68.30% 71.77% 71.07% 70.78%
Per share
date:
Earnings
per common
share(3):
Basic $ 0.18 $ 0.27 $ 0.23 $ 0.22 $ 0.21
Diluted $ 0.17 $ 0.26 $ 0.22 $ 0.21 $ 0.20
Book value $ 16.68 $ 16.48 $ 16.21 $ 16.16 $ 15.89
Tangible
book value $ 9.71 $ 9.53 $ 9.21 $ 8.98 $ 8.62
Average basic
shares 21,825,667 22,045,407 21,738,367 21,547,912 21,504,499
Average diluted
shares 22,435,324 22,735,620 22,670,769 22,596,591 22,602,237
Operating non-
interest
income:
Service
charges on
deposit
accounts $ 3,421 $ 3,585 $ 3,552 $ 3,129 $ 3,183
Other service
charges 85 75 75 72 73
Gain on sale
of loans 342 392 447 508 463
Net gain on
derivative
instruments 511 297 525 234 200
Other 2,123 1,662 1,694 1,631 1,424
-------- -------- -------- -------- --------
Total
operating
non-
interest
income 6,482 6,011 6,293 5,574 5,343
-------- -------- -------- -------- --------
Non-operating
income(4):
Loss on sale
of
investment
securities -- -- -- -- (1)
Net gain on
sale of
branches -- -- -- 1,443 --
Net gain
(loss) on
sale or
disposal of
bank
property &
equipment -- -- 12 -- (330)
-------- -------- -------- -------- --------
Total non-
operating
income -- -- 12 1,443 (331)
-------- -------- -------- -------- --------
Total non-
interest
income $ 6,482 $ 6,011 $ 6,305 $ 7,017 $ 5,012
======== ======== ======== ======== =========
Operating non-
interest
expense:
Salaries and
employee
benefits $ 11,004 $ 10,816 $ 10,937 $ 10,626 $ 10,602
Occupancy
expense 2,830 2,773 2,717 3,012 2,876
Equipment
expense 1,660 1,732 1,829 1,951 1,960
Amortization
of
intangible
assets 1,177 1,177 1,178 1,182 1,193
Data
processing
expense 1,078 1,063 1,100 1,008 895
Advertising
expense 459 415 509 473 407
Other
expenses 3,320 3,685 3,538 3,002 3,221
-------- -------- -------- -------- --------
Total
operating
non-
interest
expense 21,528 21,661 21,808 21,254 21,154
-------- -------- -------- -------- --------
Non-operating
expense(4):
Lease buy-out
expenses and
other branch
rational-
ization
charges -- 185 -- -- 495
Severance and
other
related
expenses -- -- 86 2,317 240
Early
extinguish-
ment of
borrowings -- -- 124 -- --
-------- -------- -------- -------- --------
Total non-
operating
expense -- 185 210 2,317 735
-------- -------- -------- -------- --------
Total non-
interest
expense $ 21,528 $ 21,846 $ 22,018 $ 23,571 $ 21,889
======== ======== ======== ======== =========
(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) Data is adjusted for a 5% stock dividend declared in April 2007.
(4) Amount consists of items which the Company believes are not a
result of normal operations.
SUN BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEETS (unaudited)
(Dollars in thousands)
For the Three Months Ended
December 31, 2007
-----------------------------------
Average Income/ Yield/
Balance Expense Cost
---------- -------- ------
Interest-earning assets:
Loans receivable(1),(2):
Commercial and industrial $2,030,928 $ 35,943 7.08%
Home equity 263,245 4,177 6.35
Second mortgage 80,400 1,343 6.68
Residential real estate 50,734 881 6.95
Other 87,155 1,647 7.56
---------- --------
Total loans receivable 2,512,462 43,991 7.00
Investment securities(3) 451,493 5,605 4.97
Interest-earning bank balances 9,911 101 4.08
Federal funds sold 7,014 86 4.90
---------- --------
Total interest-earning
assets 2,980,880 49,783 6.68
---------- --------
Cash and due from banks 64,168
Bank properties and
equipment, net 45,983
Goodwill and intangible
assets, net 152,147
Other assets 79,508
----------
Total non-interest-earning
assets 341,806
==========
Total assets $3,322,686
==========
Interest-bearing liabilities:
Interest-bearing deposit
accounts:
Interest-bearing demand
deposits $ 788,548 4,838 2.45%
Savings deposits 446,530 3,104 2.78
Time deposits 1,020,182 12,269 4.81
---------- --------
Total interest-bearing
deposit accounts 2,255,260 20,211 3.58
---------- --------
Borrowed money:
Federal funds purchased 8,707 112 5.15
Securities sold under
agreements to repurchase -
customers 46,656 466 4.00
FHLB advances 85,175 881 4.14
Junior subordinated debentures 97,941 1,787 7.30
Obligation under capital lease 5,264 97 7.37
---------- --------
Total borrowings 243,743 3,343 5.49
---------- --------
Total interest-bearing
liabilities 2,499,003 23,554 3.77
---------- --------
Non-interest-bearing demand
deposits 434,066
Other liabilities 26,315
----------
Total non-interest-bearing
liabilities 460,381
----------
Total liabilities 2,959,384
Shareholders' equity 363,302
----------
Total liabilities and
shareholders' equity $3,322,686
==========
Net interest income $ 26,229
========
Interest rate spread(4) 2.91%
======
Net interest margin(5) 3.52%
======
Ratio of average interest-
earning assets to average
interest-bearing liabilities 119.28%
======
For the Three Months Ended
December 31, 2006
-------------------------------
Average Income/ Yield/
Balance Expense Cost
---------- -------- ------
Interest-earning assets:
Loans receivable(1),(2):
Commercial and industrial $1,937,580 $ 35,379 7.30%
Home equity 229,002 3,823 6.68
Second mortgage 77,593 1,238 6.38
Residential real estate 35,323 687 7.78
Other 90,358 1,864 8.25
---------- --------
Total loans receivable 2,369,856 42,991 7.26
Investment securities(3) 514,588 4,997 3.88
Interest-earning bank balances 26,924 325 4.83
Federal funds sold 37,471 494 5.27
---------- --------
Total interest-earning
assets 2,948,839 48,807 6.62
---------- --------
Cash and due from banks 79,150
Bank properties and
equipment, net 42,457
Goodwill and intangible
assets, net 157,707
Other assets 59,970
----------
Total non-interest-earning
assets 339,284
----------
Total assets $3,288,123
==========
Interest-bearing liabilities:
Interest-bearing deposit
accounts:
Interest-bearing demand
deposits $ 810,677 $ 6,372 3.14%
Savings deposits 394,878 2,419 2.45
Time deposits 962,819 11,011 4.57
---------- --------
Total interest-bearing
deposit accounts 2,168,374 19,802 3.65
---------- --------
Borrowed money:
Federal funds purchased 152 2 5.26
Securities sold under
agreements to repurchase -
customers 55,757 642 4.61
FHLB advances 107,460 1,255 4.67
Junior subordinated debentures 108,250 2,192 8.10
Obligation under capital lease 5,327 98 7.36
---------- --------
Total borrowings 276,946 4,189 6.05
---------- --------
Total interest-bearing
liabilities 2,445,320 23,991 3.92
---------- --------
Non-interest-bearing demand
deposits 480,339
Other liabilities 22,625
----------
Total non-interest-bearing
liabilities 502,964
----------
Total liabilities 2,948,284
Shareholders' equity 339,839
----------
Total liabilities and
shareholders' equity $3,288,123
==========
Net interest income $ 24,816
========
Interest rate spread(4) 2.70%
======
Net interest margin(5) 3.37%
======
Ratio of average interest-
earning assets to average
interest-bearing liabilities 120.59%
======
(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.
(4) Interest rate spread represents the difference between the
average yield on interest-earning assets and the average cost of
interest-bearing liabilities.
(5) 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 Year Ended
December 31, 2007
-------------------------------
Average Income/ Yield/
Balance Expense Cost
---------- -------- ------
Interest-earning assets:
Loans receivable(1),(2):
Commercial and industrial $1,986,959 $143,231 7.21%
Home equity 247,017 16,010 6.48
Second mortgage 78,176 5,060 6.47
Residential real estate 44,368 3,362 7.58
Other 90,234 7,104 7.87
---------- --------
Total loans receivable 2,446,754 174,767 7.14
Investment securities(3) 481,775 22,514 4.67
Interest-earning bank
balances 13,871 673 4.85
Federal funds sold 32,966 1,725 5.23
---------- --------
Total interest-earning
assets 2,975,366 199,679 6.71
---------- --------
Cash and due from banks 68,963
Bank properties and equipment,
net 44,014
Goodwill and intangible assets,
net 153,957
Other assets 72,641
----------
Total non-interest-
earning assets 339,575
----------
Total assets $3,314,941
----------
Interest-bearing liabilities:
Interest-bearing deposit
accounts:
Interest-bearing demand
deposits $ 759,855 22,130 2.91%
Savings deposits 455,096 13,214 2.90
Time deposits 1,022,172 48,908 4.78
---------- --------
Total interest-bearing
deposit accounts 2,237,123 84,252 3.77
---------- --------
Borrowed money:
Federal funds purchased 2,929 155 5.29
Securities sold under
agreements to
repurchase - customers 44,213 1,961 4.44
FHLB advances 87,306 3,764 4.31
Junior subordinated
debentures 101,330 8,468 8.36
Obligation under capital
lease 5,288 387 7.32
---------- --------
Total borrowings 241,066 14,735 6.11
---------- --------
Total interest-bearing
liabilities 2,478,189 98,987 3.99
---------- --------
Non-interest-bearing demand
deposits 453,281
Other liabilities 28,095
----------
Total non-interest-
bearing liabilities 481,376
----------
Total liabilities 2,959,565
Shareholders' equity 355,376
----------
Total liabilities and
shareholders' equity $3,314,941
==========
Net interest income $100,692
========
Interest rate spread(4) 2.72%
=======
Net interest margin(5) 3.38%
=======
Ratio of average interest-
earning assets to average
interest-bearing liabilities 120.06%
=======
For the Year Ended
December 31, 2006
-----------------------------------
Average Income/ Yield/
Balance Expense Cost
---------- -------- ------
Interest-earning assets:
Loans receivable(1),(2):
Commercial and industrial $1,880,475 $133,312 7.09%
Home equity 202,072 13,326 6.59
Second mortgage 74,184 4,642 6.26
Residential real estate 30,264 2,460 8.13
Other 86,505 7,136 8.25
---------- --------
Total loans receivable 2,273,500 160,876 7.08
Investment securities(3) 595,474 22,032 3.70
Interest-earning bank
balances 14,676 702 4.78
Federal funds sold 23,938 1,172 4.90
---------- --------
Total interest-earning
assets 2,907,588 184,782 6.36
---------- --------
Cash and due from banks 80,241
Bank properties and equipment,
net 43,099
Goodwill and intangible assets,
net 157,082
Other assets 57,321
----------
Total non-interest-
earning assets 337,743
----------
Total assets 3,245,331
==========
Interest-bearing liabilities:
Interest-bearing deposit
accounts:
Interest-bearing demand
deposits $ 841,288 23,587 2.80%
Savings deposits 365,932 6,687 1.83
Time deposits 889,192 36,618 4.12
---------- --------
Total interest-bearing
deposit accounts 2,096,412 66,892 3.19
---------- --------
Borrowed money:
Federal funds purchased 4,277 231 5.40
Securities sold under
agreements to
repurchase - customers 45,726 1,985 4.34
FHLB advances 147,017 6,833 4.65
Junior subordinated
debentures 106,894 8,409 7.87
Obligation under capital
lease 5,356 522 7.31
---------- --------
Total borrowings 309,270 17,980 5.81
---------- --------
Total interest-bearing
liabilities 2,405,682 84,872 3.53
---------- --------
Non-interest-bearing demand
deposits 494,488
Other liabilities 17,851
----------
Total non-interest-
bearing liabilities 512,339
----------
Total liabilities 2,918,021
Shareholders' equity 327,310
----------
Total liabilities and
shareholders' equity $3,245,331
==========
Net interest income $ 99,910
========
Interest rate spread(4) 2.83%
======
Net interest margin(5) 3.44%
======
Ratio of average interest-
earning assets to average
interest-bearing liabilities 120.86%
======
(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.
(4) Interest rate spread represents the difference between the
average yield on interest-earning assets and the average cost of
interest-bearing liabilities.
(5) Net interest margin represents net interest income as a
percentage of average interest-earning assets.
CONTACT: Sun Bancorp, Inc.
Dan Chila, EVP, Chief Financial Officer
(856) 691-7700
