VINELAND, N.J., Jan. 22, 2014 /PRNewswire/ --
Fourth Quarter Highlights
- Significant reduction in problem loans:
- Classified Loans declined 41% from the prior quarter to $102.4 million
- Non-Performing Loans declined 31% to $38.0 million during the quarter and declined 60% or $57.6 million for the year
- The ratio of non-performing loans/Loans held-for-investment decreased to 1.78%; down from 2.55% in the prior quarter and 3.64% in the fourth quarter of 2012
- Sale of $34.8 million of classified commercial loans to third-party investors resulting in a net loss of $6.9 million inclusive of swap termination costs and broker fees
- Tier 1 Leverage Ratio ends year at 9.0% with the total risk based ratio at 14.4%
Sun Bancorp, Inc. (NASDAQ: SNBC) (the "Company") reported today a net loss available to common shareholders of $8.4 million, or a loss of $0.10 per diluted share, for the quarter ended December 31, 2013, compared to a loss of $4.9 million, or a loss of $0.06 per diluted share, and a loss of $25.0 million, or a loss of $0.29 per diluted share, for the third quarter of 2013 and the fourth quarter of 2012, respectively.
The following are key items and events that occurred during the fourth quarter of 2013:
- Significant asset quality improvement achieved resulting from the sale of $34.8 million of classified loans, $20.6 million of payoffs in the classified loan category and upgrades of $20.0 million from classified to pass rated.
- Quarterly provision expense of $2.6 million as compared to $724 thousand in the third quarter of 2013. The allowance for loan losses equaled $35.5 million at December 31, 2013, a decrease of $13.3 million from September 30, 2013. The allowance for loan losses equaled 1.66% of gross loans held-for-investment and 93.5% of non-performing loans at December 31, 2013 as compared to 2.25% and 88.2%, respectively, at September 30, 2013 and 2.02% and 55.3%, respectively, at December 31, 2012.
- Professional fees totaled $4.9 million in the fourth quarter and $18.2 million for 2013
- Net interest margin was 2.99% and average interest-bearing cash was $342 million
"While we are disappointed with our profitability, we are pleased with what we believe has been significant progress in reducing our problem loans and improving our foundation for future growth," said Sidney Brown. "We enter 2014 with a renewed focus on improving profitability through prudent growth in revenue, significant reduction in professional fees and an improvement in operational efficiency," added Thomas Brugger.
Discussion of Results:
Balance Sheet
- Total assets were $3.09 billion at December 31, 2013, as compared to $3.24 billion at September 30, 2013 and $3.22 billion at December 31, 2012.
- Cash and cash equivalents were $293.8 million at December 31, 2013, as compared to $453.6 million at September 30, 2013 and $169.6 million at December 31, 2012. The decrease of $159.8 million in the fourth quarter of 2013 as compared to the prior quarter was primarily due to declines in deposits of $131.1 million and a net increase of $32.8 million in investment securities. The decline in deposits was driven by planned deposit run off in government deposits and a seasonal decline in commercial deposits. Total deposits at December 31, 2013 were $2.62 billion.
- Investment securities available for sale were $440.1 million as of December 31, 2013 compared to $407.2 million at September 30, 2013 and $443.2 million at December 31, 2012. The increase of $32.9 million in the fourth quarter of 2013 from the prior quarter was due to the purchase of $54.5 million of asset backed and mortgage backed securities, offset by paydowns.
- Gross loans held-for-investment were $2.14 billion at December 31, 2013, as compared to $2.17 billion at September 30, 2013 and $2.28 billion at December 31, 2012. Since December 31, 2012, gross loans held-for-investment decreased $138.9 million, primarily due to paydowns and sales of commercial loans and the sale of jumbo residential mortgages.
Net Interest Income and Margin
- Net interest income decreased $1.0 million from the linked quarter to $21.9 million for the three months ended December 31, 2013. The net interest margin decreased 11 basis points to 2.99% for the three months ended December 31, 2013 from 3.10% for the linked quarter, and decreased 31 basis points as compared to the fourth quarter of 2012. The average yield on interest-earning assets decreased 14 basis points to 3.47% at December 31, 2013 from 3.61% at September 30, 2013. This decrease was due to a decrease in commercial loan yields of 31 basis points as compared to the linked quarter resulting from a prior quarter interest recovery of $1.2 million. Excluding this item, the margin in the third quarter of 2013 would have been 2.90%. The margin variance between the quarter ended December 31, 2013 and the comparable prior year period is primarily due to a decrease of $167.1 million in average commercial loans and an increase of $303.8 million in average interest-earning bank balances.
Non-Interest Income
- Non-interest income was $4.7 million for the quarter ended December 31, 2013, as compared to $5.8 million for the quarter ended September 30, 2013 and $6.7 million for the comparable prior year quarter. The decrease from the linked quarter was primarily attributable to a decrease in net mortgage banking revenue of $593 thousand and an increase of $330 thousand in negative derivative credit valuation adjustments from the prior quarter. The decline in mortgage banking revenue continues to be due to lower production volume in a higher interest rate environment. The negative credit valuation adjustment of $710 thousand in the fourth quarter of 2013 was primarily due to swap termination fees of $869 thousand recorded on three commercial relationships that were sold during the quarter.
Non-Interest Expense
- Non-interest expense was $32.5 million in the fourth quarter of 2013, a decrease of $460 thousand compared to the linked quarter and an increase of $960 thousand over the comparable prior year quarter. In comparison to the linked quarter, decreases in professional fees and commission expense of $1.1 million and $903 thousand, respectively, were partially offset by increases of $414 thousand in salaries and employee benefits, other expense of $405 thousand, real estate owned expense of $277 thousand and advertising expense of $227 thousand. Professional fees declined as a result of a decreasing need for regulatory compliance consulting services. Commission expense has decreased due to reduced mortgage production volumes. Salaries and benefits expense has increased from the prior quarter due to $585 thousand of severance costs recorded in the fourth quarter. Other expense for the current quarter includes $551 thousand of broker fees associated with commercial loan sales. Professional fees increased by $3.5 million from the same prior year quarter due to regulatory compliance and mortgage risk related consulting services and platform enhancements performed in 2013. This increase was partially offset by decreases in commission expense, real estate owned expense, net and amortization of intangible assets of $1.4 million, $479 thousand and $466 thousand, respectively, compared to the fourth quarter in 2012.
Asset Quality
- During the fourth quarter of 2013, provision expense of $2.6 million was recorded, as compared to $724 thousand in the linked quarter and $24.2 million in the comparable prior year quarter. The allowance for loan losses was $35.5 million at December 31, 2013, or 1.66% of gross loans held-for-investment, as compared to 2.25% at September 30, 2013 and 2.02% at December 31, 2012. Net charge-offs were $16.0 million in the fourth quarter of 2013, as compared to net recoveries in the linked quarter of $123 thousand and net charge-offs in the prior year quarter of $26.7 million. Net charge-offs in the fourth quarter of 2013 included $10.2 million related to the sale of $34.8 million of classified commercial real estate loans and $5.0 million related to the charge-off of specific reserves on two legacy non-performing loans.
- Total non-performing assets were $40.5 million, or 1.87% of total gross loans held-for-investment, loans held-for-sale and real estate owned at December 31, 2013, as compared to $60.5 million, or 2.76%, and $103.1 million, or 4.29%, respectively, at September 30, 2013 and December 31, 2012. Non-performing loans decreased $17.4 million over the linked quarter to $38.0 million at December 31, 2013 from $55.4 million at September 30, 2013 and decreased $57.6 million from $95.6 million at December 31, 2012. The decrease from the linked quarter was due to the aforementioned loan sales which included $23.2 million of non-performing commercial real estate loans and charge-offs recorded of $5.0 million on two legacy non-performing commercial loans. Offsetting these declines were downgrades of $13.9 million to non-performing status. For the year, successful workout resolution has resulted in the payoff of ten non-performing commercial loans totaling $40.5 million.
Capital
- Shareholders' equity totaled $245.1 million at December 31, 2013 compared to $257.1 million at September 30, 2013 and $262.6 million at December 31, 2012. The Company's tangible equity to tangible assets ratio was 6.76% at December 31, 2013, as compared to 6.81% at September 30, 2013 and 6.95% at December 31, 2012. At December 31, 2013, the Company's total risk-based capital ratio, Tier 1 capital ratio and leverage capital ratio were approximately 14.40%, 12.34%, and 8.98%, respectively. At December 31, 2013, Sun National Bank's total risk-based capital ratio, Tier 1 capital ratio and leverage capital ratio were approximately 13.64%, 12.39%, and 9.01%, respectively.
The Company will hold its regularly scheduled conference call on Thursday January 23, 2014, at 11:00 a.m. (ET). Participants may listen to the live webcast through the Company's website at www.sunnationalbank.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 Company's website for two weeks following the call.
Sun Bancorp, Inc. (NASDAQ: SNBC) is a $3.09 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 50-plus locations in New Jersey. Sun National Bank has been named one of Forbes Magazine's "Most Trustworthy Companies" for five years running. Sun National 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.sunnationalbank.com.
Cautionary Note Regarding Forward-Looking Statements
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 about reducing problem loans, improving our foundation for future growth, significantly reducing professional fees, improving our profitability through revenue growth and improving operational efficiency.. Actual results and trends could differ materially from those set forth in such statements and there can be no assurances that we will further reduce problem loans, achieve desired future growth, reduce professional fees, improve our profitability, increase revenues or improve our operational efficiency. We caution that such statements are subject to a number of uncertainties, including those detailed under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Form 10-K for the fiscal year ended December 31, 2012, its Form 10-Qs for the quarters ended March 31, 2013, June 30, 2013, and September 30, 2013 and in other filings made 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 (Unaudited) | ||||||||||||||
This news release references tax-equivalent interest income. 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, 2013, September 30, 2013, June 30, 2013, March 31, 2013, and December 31, 2012 were $167 thousand, $167 thousand, $175 thousand, $212 thousand, and $212 thousand, respectively. The fully taxable equivalent adjustments for the year ended December 31, 2013 and December 31, 2012 were $720 thousand and $870 thousand, respectively. This release also references tangible book value per common share. Tangible book value per common share is a non-GAAP financial measure. Tangible book value per common share is a ratio of tangible equity, shareholder's equity less intangible assets, to outstanding common shares. Intangible assets at December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013, and December 31, 2012 were $39.0 million, $39.4 million, $40.0 million, $40.5 million, and $41.5 million, respectively. | ||||||||||||||
Tax-equivalent interest income | ||||||||||||||
The following reconciles net interest income to net interest income on a fully taxable equivalent basis using a 35% tax rate for the three months ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013, and December 31, 2012 and the year ended December 31, 2013 and December 31, 2012. | ||||||||||||||
For Three Months Ended: | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||
Net interest income | $ | 21,935 | $ | 22,980 | $ | 21,776 | $ | 23,078 | $ | 23,981 | ||||
Effect of tax exempt income | 167 | 167 | 175 | 212 | 212 | |||||||||
Net interest income, tax equivalent basis | $ | 22,102 | $ | 23,147 | $ | 21,951 | $ | 23,290 | $ | 24,193 | ||||
For the Year Ended: | December 31, | |||||||||||||
2013 | 2012 | |||||||||||||
Net interest income | $ | 89,769 | 97,848 | |||||||||||
Effect of tax exempt income | 720 | 870 | ||||||||||||
Net interest income, tax equivalent basis | $ | 90,489 | 98,718 | |||||||||||
Tangible book value per common share | ||||||||||||||
The following reconciles shareholders' equity to tangible equity by reducing shareholders' equity by the intangible asset balance at December, 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013, and December 31, 2012. | ||||||||||||||
December 31, 2013 | September 30, 2013 | June 30, 2013 | March 31, 2013 | December 31, 2012 | ||||||||||
Tangible book value per common share: | ||||||||||||||
Shareholders' equity | $ | 245,134 | $ | 257,139 | $ | 261,664 | $ | 264,339 | $ | 262,596 | ||||
Less: Intangible assets | 38,993 | 39,448 | 39,988 | 40,529 | 41,450 | |||||||||
Tangible equity | $ | 206,141 | $ | 217,692 | $ | 221,676 | $ | 223,811 | $ | 221,147 | ||||
Common stock | 88,711 | 88,618 | 88,572 | 88,403 | 88,301 | |||||||||
Less: Treasury stock | 1,997 | 2,068 | 2,107 | 2,107 | 2,107 | |||||||||
Total outstanding shares | 86,714 | 86,550 | 86,465 | 86,296 | 86,194 | |||||||||
Tangible book value per common share: | $ | 2.38 | $ | 2.52 | $ | 2.56 | $ | 2.59 | $ | 2.57 | ||||
SUN BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS (Unaudited) | ||||||||||||||||||||||||||||
(Dollars in thousands, except share and per share amounts) | ||||||||||||||||||||||||||||
For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||
December 31, | December, | |||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||
Profitability for the period: | ||||||||||||||||||||||||||||
Net interest income | $ | 21,935 | $ | 23,981 | $ | 89,769 | $ | 97,848 | ||||||||||||||||||||
Provision for loan losses | 2,635 | 24,154 | 1,647 | 57,215 | ||||||||||||||||||||||||
Non-interest income | 4,742 | 6,816 | 31,681 | 29,450 | ||||||||||||||||||||||||
Non-interest expense | 32,457 | 31,597 | 129,949 | 120,608 | ||||||||||||||||||||||||
Loss before income taxes | (8,415) | (24,954) | (10,146) | (50,525) | ||||||||||||||||||||||||
Income tax benefit | - | - | - | (34) | ||||||||||||||||||||||||
Net loss available to common shareholders | $ | (8,415) | $ | (24,954) | $ | (10,146) | $ | (50,491) | ||||||||||||||||||||
Financial ratios: | ||||||||||||||||||||||||||||
Return on average assets(1) | (1.05) | % | (3.13) | % | (0.31) | % | (1.60) | % | ||||||||||||||||||||
Return on average equity(1) | (13.11) | % | (34.70) | % | (3.89) | % | (17.19) | % | ||||||||||||||||||||
Return on average tangible equity(1),(2) | (15.47) | % | (40.61) | % | (4.59) | % | (20.17) | % | ||||||||||||||||||||
Net interest margin(1) | 2.99 | % | 3.30 | % | 3.05 | % | 3.43 | % | ||||||||||||||||||||
Efficiency ratio | 121.67 | % | 102.60 | % | 107.00 | % | 94.21 | % | ||||||||||||||||||||
Loss per common share: | ||||||||||||||||||||||||||||
Basic | $ | (0.10) | $ | (0.29) | $ | (0.12) | $ | (0.59) | ||||||||||||||||||||
Diluted | $ | (0.10) | $ | (0.29) | $ | (0.12) | $ | (0.59) | ||||||||||||||||||||
Average equity to average assets | 8.01 | % | 9.01 | % | 8.09 | % | 9.31 | % | ||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||
At period-end: | ||||||||||||||||||||||||||||
Total assets | $ | 3,087,350 | $ | 3,224,031 | ||||||||||||||||||||||||
Total deposits | 2,621,571 | 2,713,224 | ||||||||||||||||||||||||||
Loans receivable, net of allowance for loan losses | 2,101,754 | 2,230,287 | ||||||||||||||||||||||||||
Loans held-for-sale | 21,075 | 120,935 | ||||||||||||||||||||||||||
Investments | 457,797 | 461,980 | ||||||||||||||||||||||||||
Borrowings | 68,765 | 70,992 | ||||||||||||||||||||||||||
Junior subordinated debentures | 92,786 | 92,786 | ||||||||||||||||||||||||||
Shareholders' equity | 245,134 | 262,595 | ||||||||||||||||||||||||||
Credit quality and capital ratios: | ||||||||||||||||||||||||||||
Allowance for loan losses to gross loans held-for- investment | 1.66 | % | 2.02 | % | ||||||||||||||||||||||||
Non-performing loans held-for-investment to gross loans held-for-investment | 1.78 | % | 3.64 | % | ||||||||||||||||||||||||
Non-performing assets to gross loans held-for-investment, loans held-for-sale and real estate owned | 1.87 | % | 4.29 | % | ||||||||||||||||||||||||
Allowance for loan losses to non-performing loans held-for-investment | 93.52 | % | 55.33 | % | ||||||||||||||||||||||||
Total capital (to risk-weighted assets) (3): | ||||||||||||||||||||||||||||
Sun Bancorp, Inc. | 14.40 | % | 13.72 | % | ||||||||||||||||||||||||
Sun National Bank | 13.64 | % | 13.02 | % | ||||||||||||||||||||||||
Tier 1 capital (to risk-weighted assets) (3): | ||||||||||||||||||||||||||||
Sun Bancorp, Inc. | 12.34 | % | 11.82 | % | ||||||||||||||||||||||||
Sun National Bank | 12.39 | % | 11.76 | % | ||||||||||||||||||||||||
Leverage ratio: | ||||||||||||||||||||||||||||
Sun Bancorp, Inc. | 8.98 | % | 9.30 | % | ||||||||||||||||||||||||
Sun National Bank | 9.01 | % | 9.24 | % | ||||||||||||||||||||||||
Book value per common share | $ | 2.83 | $ | 3.05 | ||||||||||||||||||||||||
Tangible book value per common share | $ | 2.38 | $ | 2.57 | ||||||||||||||||||||||||
(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) December 31, 2013 capital ratios are estimated, subject to regulatory filings. | ||||||||||||||||||||||||||||
SUN BANCORP, INC. AND SUBSIDIARIES | ||||||
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) | ||||||
(Dollars in thousands, except par value amounts) | ||||||
December 31, 2013 | December 31, 2012 | |||||
ASSETS | ||||||
Cash and due from banks | $ | 64,075 | $ | 77,564 | ||
Interest-earning bank balances | 229,687 | 92,052 | ||||
Cash and cash equivalents | 293,762 | 169,616 | ||||
Investment securities available for sale (amortized cost of $452,023 and $439,488 at December 31, 2013 and December 31, 2012, respectively) | 440,097 | 443,182 | ||||
Investment securities held to maturity (estimated fair value of $692 and $960 at December 31, 2013 and December 31, 2012, respectively) | 681 | 912 | ||||
Loans receivable (net of allowance for loan losses of $35,537 and $45,873 at December 31, 2013 and December 31, 2012, respectively) | 2,101,754 | 2,230,287 | ||||
Loans held-for-sale, at lower of cost or market | - | 21,922 | ||||
Loans held-for-sale, at fair value | 21,075 | 99,013 | ||||
Restricted equity investments, at cost | 17,019 | 17,886 | ||||
Bank properties and equipment, net | 49,095 | 50,805 | ||||
Real estate owned | 2,503 | 7,473 | ||||
Accrued interest receivable | 6,612 | 8,054 | ||||
Goodwill | 38,188 | 38,188 | ||||
Intangible assets | 805 | 3,262 | ||||
Deferred taxes, net | 4,872 | - | ||||
Bank owned life insurance (BOLI) | 77,236 | 76,858 | ||||
Other assets | 33,651 | 56,573 | ||||
Total assets | $ | 3,087,350 | $ | 3,224,031 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Liabilities: | ||||||
Deposits | $ | 2,621,571 | $ | 2,713,224 | ||
Securities sold under agreements to repurchase – customers | 478 | 1,968 | ||||
Advances from the Federal Home Loan Bank of New York (FHLBNY) | 60,956 | 61,415 | ||||
Obligations under capital lease | 7,331 | 7,609 | ||||
Junior subordinated debentures | 92,786 | 92,786 | ||||
Deferred taxes, net | - | 1,509 | ||||
Other liabilities | 59,094 | 82,925 | ||||
Total liabilities | 2,842,216 | 2,961,436 | ||||
Shareholders' equity: | ||||||
Preferred stock, $1 par value, 1,000,000 shares authorized; none issued | - | - | ||||
Common stock, $1 par value, 200,000,000 shares authorized; 88,711,035 shares issued and 86,714,414 shares outstanding at December 31, 2013; 88,300,637 shares issued and 86,193,914 shares outstanding at December 31, 2012 | 88,711 | 88,301 | ||||
Additional paid-in capital | 506,719 | 506,537 | ||||
Retained deficit | (318,157) | (308,011) | ||||
Accumulated other comprehensive (loss) income | (7,055) | 2,186 | ||||
Deferred compensation plan trust | (522) | (256) | ||||
Treasury stock at cost, 1,996,621 shares at December 31, 2013; and 2,106,723 shares at December 31, 2012 | (24,562) | (26,162) | ||||
Total shareholders' equity | 245,134 | 262,595 | ||||
Total liabilities and shareholders' equity | $ | 3,087,350 | $ | 3,224,031 | ||
SUN BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||
For the Three Months Ended December 31, | For the Year Ended December 31, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
INTEREST INCOME | ||||||||||||||||
Interest and fees on loans | $ | 22,752 | $ | 25,670 | $ | 96,172 | $ | 103,707 | ||||||||
Interest on taxable investment securities | 2,219 | 1,860 | 6,668 | 9,138 | ||||||||||||
Interest on non-taxable investment securities | 310 | 390 | 1,338 | 1,618 | ||||||||||||
Dividends on restricted equity investments | 219 | 235 | 904 | 970 | ||||||||||||
Total interest income | 25,500 | 28,155 | 105,082 | 115,433 | ||||||||||||
INTEREST EXPENSE | ||||||||||||||||
Interest on deposits | 2,576 | 3,143 | 11,349 | 13,553 | ||||||||||||
Interest on funds borrowed | 444 | 460 | 1,776 | 1,438 | ||||||||||||
Interest on junior subordinated debentures | 545 | 571 | 2,188 | 2,594 | ||||||||||||
Total interest expense | 3,565 | 4,174 | 15,313 | 17,585 | ||||||||||||
Net interest income | 21,935 | 23,981 | 89,769 | 97,848 | ||||||||||||
PROVISION FOR LOAN LOSSES | 2,635 | 24,154 | 1,647 | 57,215 | ||||||||||||
Net interest income (loss) after provision for loan losses | 19,300 | (173) | 88,122 | 40,633 | ||||||||||||
NON-INTEREST INCOME | ||||||||||||||||
Service charges on deposit accounts | 2,263 | 2,486 | 9,056 | 10,954 | ||||||||||||
Mortgage banking revenue, net | 1,000 | 3,812 | 11,598 | 10,551 | ||||||||||||
(Loss) gain on sale of investment securities | - | (196) | 3,489 | 234 | ||||||||||||
Investment products income | 599 | 606 | 2,684 | 2,296 | ||||||||||||
BOLI income | 466 | 488 | 1,882 | 1,986 | ||||||||||||
Derivative credit valuation adjustment | (710) | (1,750) | (1,588) | (2,275) | ||||||||||||
Other | 1,124 | 1,270 | 4,560 | 4,929 | ||||||||||||
Total non-interest income | 4,742 | 6,716 | 31,681 | 28,675 | ||||||||||||
NON-INTEREST EXPENSE | ||||||||||||||||
Salaries and employee benefits | 13,070 | 13,331 | 53,037 | 54,241 | ||||||||||||
Commission expense | 1,098 | 2,514 | 7,696 | 8,259 | ||||||||||||
Occupancy expense | 3,406 | 3,416 | 13,519 | 13,011 | ||||||||||||
Equipment expense | 1,871 | 2,005 | 7,356 | 7,399 | ||||||||||||
Amortization of intangible assets | 455 | 921 | 2,457 | 3,685 | ||||||||||||
Data processing expense | 1,223 | 1,138 | 4,244 | 4,384 | ||||||||||||
Professional fees | 4,891 | 1,389 | 18,246 | 3,459 | ||||||||||||
Insurance expenses | 1,498 | 1,506 | 5,966 | 5,824 | ||||||||||||
Advertising expense | 903 | 1,040 | 2,830 | 2,809 | ||||||||||||
Problem loan expense | 769 | 776 | 3,407 | 5,681 | ||||||||||||
Real estate owned expense, net | 529 | 1,008 | 2,270 | 2,358 | ||||||||||||
Office supplies expense | 245 | 298 | 857 | 1,247 | ||||||||||||
Other | 2,499 | 2,155 | 8,064 | 7,476 | ||||||||||||
Total non-interest expense | 32,457 | 31,497 | 129,949 | 119,833 | ||||||||||||
LOSS BEFORE INCOME TAXES | (8,415) | (24,954) | (10,146) | (50,525) | ||||||||||||
INCOME TAX BENEFIT | - | - | - | (34) | ||||||||||||
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS | $ | (8,415) | $ | (24,954) | $ | (10,146) | $ | (50,491) | ||||||||
Basic loss per share | $ | (0.10) | $ | (0.29) | $ | (0.12) | $ | (0.59) | ||||||||
Diluted loss per share | $ | (0.10) | $ | (0.29) | $ | (0.12) | $ | (0.59) | ||||||||
Weighted average shares – basic | 86,583,363 | 86,082,669 | 86,415,812 | 85,938,714 | ||||||||||||
Weighted average shares - diluted | 86,583,363 | 86,082,669 | 86,415,812 | 85,938,714 | ||||||||||||
SUN BANCORP, INC. AND SUBSIDIARIES | |||||||||||||||
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | |||||||||||
Q4 | Q3 | Q2 | Q1 | Q4 | |||||||||||
Balance sheet at quarter end: | |||||||||||||||
Cash and cash equivalents | $ | 293,762 | $ | 453,583 | $ | 442,239 | $ | 311,660 | $ | 169,616 | |||||
Investment securities | 457,797 | 425,029 | 361,149 | 335,844 | 461,980 | ||||||||||
Loans held-for-investment: | |||||||||||||||
Commercial and industrial | 1,587,566 | 1,636,856 | 1,676,133 | 1,737,079 | 1,725,567 | ||||||||||
Home equity | 188,478 | 192,135 | 195,938 | 200,084 | 207,720 | ||||||||||
Second mortgage | 25,279 | 26,028 | 27,276 | 29,235 | 30,842 | ||||||||||
Residential real estate | 305,179 | 281,537 | 225,147 | 248,875 | 273,413 | ||||||||||
Other | 30,789 | 32,984 | 34,298 | 36,287 | 38,618 | ||||||||||
Total gross loans held-for-investment | 2,137,291 | 2,169,540 | 2,158,792 | 2,251,560 | 2,276,160 | ||||||||||
Allowance for loan losses | (35,537) | (48,854) | (48,007) | (47,124) | (45,873) | ||||||||||
Net loans held-for-investment | 2,101,754 | 2,120,686 | 2,110,785 | 2,204,436 | 2,230,287 | ||||||||||
Loans held-for-sale | 21,075 | 18,707 | 69,417 | 41,469 | 120,935 | ||||||||||
Goodwill | 38,188 | 38,188 | 38,188 | 38,188 | 38,188 | ||||||||||
Intangible assets | 805 | 1,260 | 1,800 | 2,341 | 3,262 | ||||||||||
Total assets | 3,087,350 | 3,236,321 | 3,205,921 | 3,227,146 | 3,224,031 | ||||||||||
Total deposits | 2,621,571 | 2,752,693 | 2,722,038 | 2,723,337 | 2,713,224 | ||||||||||
Securities sold under agreements to repurchase - customers | 478 | 554 | 562 | 2,726 | 1,968 | ||||||||||
Advances from FHLBNY | 60,956 | 60,997 | 61,037 | 61,077 | 61,415 | ||||||||||
Obligations under capital lease | 7,331 | 7,402 | 7,472 | 7,541 | 7,609 | ||||||||||
Junior subordinated debentures | 92,786 | 92,786 | 92,786 | 92,786 | 92,786 | ||||||||||
Total shareholders' equity | 245,134 | 257,140 | 261,664 | 264,341 | 262,596 | ||||||||||
Quarterly average balance sheet: | |||||||||||||||
Loans(1): | |||||||||||||||
Commercial and industrial | $ | 1,621,222 | $ | 1,671,302 | $ | 1,719,278 | $ | 1,744,553 | $ | 1,788,347 | |||||
Home equity | 190,394 | 194,622 | 197,237 | 204,311 | 210,085 | ||||||||||
Second mortgage | 26,142 | 27,041 | 28,679 | 30,347 | 32,442 | ||||||||||
Residential real estate | 312,977 | 299,667 | 307,248 | 330,916 | 319,427 | ||||||||||
Other | 26,134 | 27,723 | 28,929 | 30,410 | 32,444 | ||||||||||
Total gross loans | 2,176,869 | 2,220,355 | 2,281,371 | 2,340,537 | 2,382,745 | ||||||||||
Securities and other interest-earning assets | 782,200 | 763,575 | 680,659 | 607,284 | 545,781 | ||||||||||
Total interest-earning assets | 2,959,069 | 2,983,930 | 2,962,030 | 2,947,821 | 2,928,526 | ||||||||||
Total assets | 3,205,900 | 3,264,884 | 3,222,106 | 3,206,536 | 3,193,607 | ||||||||||
Non-interest-bearing demand deposits | 585,530 | 549,684 | 531,210 | 506,600 | 511,813 | ||||||||||
Total deposits | 2,718,905 | 2,746,820 | 2,722,651 | 2,703,039 | 2,660,405 | ||||||||||
Total interest-bearing liabilities | 2,295,072 | 2,358,923 | 2,355,086 | 2,360,883 | 2,318,794 | ||||||||||
Total shareholders' equity | 256,783 | 260,701 | 263,108 | 263,070 | 287,698 | ||||||||||
Capital and credit quality measures: | |||||||||||||||
Total capital (to risk-weighted assets) (2): | |||||||||||||||
Sun Bancorp, Inc. | 14.40 | % | 14.72 | % | 14.80 | % | 14.21 | % | 13.72 | % | |||||
Sun National Bank | 13.64 | % | 13.96 | % | 14.05 | % | 13.50 | % | 13.02 | % | |||||
Tier 1 capital (to risk-weighted assets) (2): | |||||||||||||||
Sun Bancorp, Inc. | 12.34 | % | 12.76 | % | 12.91 | % | 12.32 | % | 11.82 | % | |||||
Sun National Bank | 12.39 | % | 12.70 | % | 12.79 | % | 12.25 | % | 11.76 | % | |||||
Leverage ratio: | |||||||||||||||
Sun Bancorp, Inc. | 8.98 | % | 9.13 | % | 9.43 | % | 9.40 | % | 9.30 | % | |||||
Sun National Bank | 9.01 | % | 9.09 | % | 9.33 | % | 9.33 | % | 9.24 | % | |||||
Average equity to average assets | 8.01 | % | 7.99 | % | 8.17 | % | 8.20 | % | 9.01 | % | |||||
Allowance for loan losses to total gross loans held-for-investment | 1.66 | % | 2.25 | % | 2.22 | % | 2.09 | % | 2.02 | % | |||||
Non-performing loans held-for-investment to gross loans held-for-investment | 1.78 | % | 2.55 | % | 3.32 | % | 3.28 | % | 3.64 | % | |||||
Non-performing assets to gross loans held-for-investment, loans held-for-sale and real estate owned | 1.87 | % | 2.76 | % | 3.51 | % | 3.57 | % | 4.29 | % | |||||
Allowance for loan losses to non-performing loans held-for-investment | 93.52 | % | 88.19 | % | 66.93 | % | 63.87 | % | 55.33 | % | |||||
Other data: | |||||||||||||||
Net (charge-offs) recoveries | (15,952) | 123 | 2,766 | 1,080 | (26,690) | ||||||||||
Non-performing assets: | |||||||||||||||
Non-accrual loans | $ | 29,811 | $ | 44,979 | $ | 54,031 | $ | 57,143 | $ | 64,660 | |||||
Non-accrual loans held-for-sale | - | - | - | - | 10,224 | ||||||||||
Troubled debt restructurings, non-accrual | 8,166 | 10,416 | 17,693 | 16,640 | 18,244 | ||||||||||
Troubled debt restructurings, held-for-sale | - | - | - | - | 2,499 | ||||||||||
Loans past due 90 days and accruing | - | - | - | - | - | ||||||||||
Real estate owned, net | 2,503 | 5,059 | 6,743 | 8,472 | 7,473 | ||||||||||
Total non-performing assets | $ | 40,480 | 60,454 | 78,467 | $ | 82,255 | $ | 103,100 | |||||||
(1) Average balances include non-accrual loans and loans held-for-sale. (2) December 31, 2013 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) | |||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | |||||||||||
Q4 | Q3 | Q2 | Q1 | Q4 | |||||||||||
Profitability for the quarter: | |||||||||||||||
Tax-equivalent interest income | $ | 25,667 | $ | 26,955 | $ | 25,888 | $ | 27,295 | $ | 28,367 | |||||
Interest expense | 3,565 | 3,808 | 3,937 | 4,005 | 4,174 | ||||||||||
Tax-equivalent net interest income | 22,102 | 23,147 | 21,951 | 23,290 | 24,193 | ||||||||||
Tax-equivalent adjustment | 167 | 167 | 175 | 212 | 212 | ||||||||||
Provision for loan losses | 2,635 | 724 | (1,883) | 171 | 24,154 | ||||||||||
Non-interest income | 4,742 | 5,799 | 10,211 | 10,882 | 6,716 | ||||||||||
Non-interest expense excluding amortization of intangible assets | 32,002 | 32,377 | 32,651 | 30,415 | 30,576 | ||||||||||
Amortization of intangible assets | 455 | 540 | 541 | 921 | 921 | ||||||||||
(Loss) income before income taxes | (8,415) | (4,862) | 678 | 2,453 | (24,954) | ||||||||||
Net (loss) income | (8,415) | (4,862) | 678 | 2,453 | (24,954) | ||||||||||
Net (loss) income available to common shareholders | $ | (8,415) | $ | (4,862) | $ | 678 | $ | 2,453 | $ | (24,954) | |||||
Financial ratios: | |||||||||||||||
Return on average assets (1) | (1.05) | % | (0.60) | % | 0.08 | % | 0.31 | % | (3.13) | % | |||||
Return on average equity (1) | (13.11) | % | (7.46) | % | 1.03 | % | 3.73 | % | (34.70) | % | |||||
Return on average tangible equity (1),(2) | (15.47) | % | (8.80) | % | 1.22 | % | 4.42 | % | (40.61) | % | |||||
Net interest margin (1) | 2.99 | % | 3.10 | % | 2.96 | % | 3.16 | % | 3.30 | % | |||||
Efficiency ratio | 121.67 | % | 114.38 | % | 103.77 | % | 92.27 | % | 102.60 | % | |||||
Per share data: | |||||||||||||||
(Loss) income per common share: | |||||||||||||||
Basic | $ | (0.10) | $ | (0.06) | $ | 0.01 | $ | 0.03 | $ | (0.29) | |||||
Diluted | $ | (0.10) | $ | (0.06) | $ | 0.01 | $ | 0.03 | $ | (0.29) | |||||
Book value | $ | 2.83 | $ | 2.97 | $ | 3.03 | $ | 3.06 | $ | 3.05 | |||||
Tangible book value | $ | 2.38 | $ | 2.52 | $ | 2.56 | $ | 2.59 | $ | 2.57 | |||||
Average basic shares | 86,583,363 | 86,499,587 | 86,323,099 | 86,245,121 | 86,082,669 | ||||||||||
Average diluted shares | 86,583,363 | 86,499,587 | 86,356,796 | 86,370,435 | 86,082,669 | ||||||||||
Non-interest income: | |||||||||||||||
Service charges on deposit accounts | $ | 2,263 | $ | 2,314 | $ | 2,250 | $ | 2,229 | $ | 2,486 | |||||
Mortgage banking revenue, net | 1,000 | 1,593 | 5,601 | 3,404 | 3,812 | ||||||||||
Net gain (loss) on sale of investment securities | - | 2 | (47) | 3,487 | (196) | ||||||||||
Investment products income | 599 | 678 | 728 | 679 | 606 | ||||||||||
BOLI income | 466 | 482 | 486 | 448 | 488 | ||||||||||
Derivative credit valuation adjustment | (710) | (380) | 6 | (504) | (1,750) | ||||||||||
Other income | 1,124 | 1,110 | 1,187 | 1,139 | 1,270 | ||||||||||
Total non-interest income | $ | 4,742 | $ | 5,799 | $ | 10,211 | $ | 10,882 | $ | 6,716 | |||||
Non-interest expense: | |||||||||||||||
Salaries and employee benefits | $ | 13,070 | $ | 12,656 | $ | 13,019 | $ | 14,292 | $ | 13,331 | |||||
Commission expense | 1,098 | 2,001 | 2,556 | 2,041 | 2,514 | ||||||||||
Occupancy expense | 3,406 | 3,456 | 3,081 | 3,576 | 3,416 | ||||||||||
Equipment expense | 1,871 | 1,796 | 1,830 | 1,859 | 2,005 | ||||||||||
Amortization of intangible assets | 455 | 540 | 541 | 921 | 921 | ||||||||||
Data processing expense | 1,223 | 995 | 1,027 | 999 | 1,138 | ||||||||||
Professional fees | 4,891 | 5,947 | 4,761 | 2,647 | 1,389 | ||||||||||
Insurance expense | 1,498 | 1,496 | 1,542 | 1,430 | 1,506 | ||||||||||
Advertising expense | 903 | 676 | 698 | 553 | 1,040 | ||||||||||
Problem loan costs | 769 | 816 | 1,023 | 799 | 776 | ||||||||||
Real estate owned expense, net | 529 | 252 | 1,255 | 234 | 1,008 | ||||||||||
Office supplies expense | 245 | 192 | 191 | 229 | 298 | ||||||||||
Other expense | 2,499 | 2,094 | 1,668 | 1,756 | 2,155 | ||||||||||
Total non-interest expense | $ | 32,457 | $ | 32,917 | $ | 33,192 | $ | 31,336 | $ | 31,497 | |||||
(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. | |||||||||||||||
SUN BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||||
AVERAGE BALANCE SHEETS (Unaudited) | ||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||
For the Three Months Ended December 31, | ||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | |||||||||||||||||||||||||
Balance | Expense | Cost | Balance | Expense | Cost | |||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||
Loans receivable (1),(2): | ||||||||||||||||||||||||||||||
Commercial and industrial | $ | 1,621,222 | $ | 17,406 | 4.29 | % | $ | 1,788,347 | $ | 19,628 | 4.39 | % | ||||||||||||||||||
Home equity | 190,394 | 1,853 | 3.89 | 210,085 | 2,055 | 3.91 | ||||||||||||||||||||||||
Second mortgage | 26,142 | 367 | 5.62 | 32,442 | 470 | 5.79 | ||||||||||||||||||||||||
Residential real estate | 312,977 | 2,671 | 3.41 | 319,427 | 2,959 | 3.71 | ||||||||||||||||||||||||
Other | 26,134 | 456 | 6.98 | 32,444 | 559 | 6.89 | ||||||||||||||||||||||||
Total loans receivable | 2,176,869 | 22,753 | 4.18 | 2,382,745 | 25,671 | 4.31 | ||||||||||||||||||||||||
Investment securities(3) | 439,788 | 2,693 | 2.45 | 507,158 | 2,672 | 2.11 | ||||||||||||||||||||||||
Interest-earning bank balances | 342,412 | 221 | 0.26 | 38,623 | 24 | 0.25 | ||||||||||||||||||||||||
Total interest-earning assets | 2,959,069 | 25,667 | 3.47 | 2,928,526 | 28,367 | 3.87 | ||||||||||||||||||||||||
Non-interest earning assets: | ||||||||||||||||||||||||||||||
Cash and due from banks | 66,662 | 72,129 | ||||||||||||||||||||||||||||
Bank properties and equipment, net | 49,300 | 51,515 | ||||||||||||||||||||||||||||
Goodwill and intangible assets, net | 39,190 | 41,902 | ||||||||||||||||||||||||||||
Other assets | 91,679 | 99,535 | ||||||||||||||||||||||||||||
Total non-interest-earning assets | 246,831 | 265,081 | ||||||||||||||||||||||||||||
Total assets | $ | 3,205,900 | $ | 3,193,607 | ||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||
Interest-bearing deposit accounts: | ||||||||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 1,223,184 | $ | 960 | 0.31 | % | $ | 1,224,254 | $ | 1,178 | 0.38 | % | ||||||||||||||||||
Savings deposits | 268,196 | 195 | 0.29 | 263,949 | 228 | 0.35 | ||||||||||||||||||||||||
Time deposits | 641,995 | 1,421 | 0.89 | 660,389 | 1,737 | 1.05 | ||||||||||||||||||||||||
Total interest-bearing deposit accounts | 2,133,375 | 2,575 | 0.48 | 2,148,592 | 3,143 | 0.59 | ||||||||||||||||||||||||
Short-term borrowings: | ||||||||||||||||||||||||||||||
Fed Funds Purchased | 54 | - | - | - | - | - | ||||||||||||||||||||||||
Securities sold under agreements to repurchase - customers | 512 | - | - | 3,250 | 1 | 0.12 | ||||||||||||||||||||||||
Long-term borrowings: | ||||||||||||||||||||||||||||||
FHLBNY advances (4) | 60,981 | 320 | 2.10 | 66,527 | 331 | 1.99 | ||||||||||||||||||||||||
Obligations under capital lease | 7,364 | 124 | 6.74 | 7,639 | 127 | 6.65 | ||||||||||||||||||||||||
Junior subordinated debentures | 92,786 | 545 | 2.35 | 92,786 | 571 | 2.46 | ||||||||||||||||||||||||
Total borrowings | 161,697 | 989 | 2.45 | 170,202 | 1,030 | 2.42 | ||||||||||||||||||||||||
Total interest-bearing liabilities | 2,295,072 | 3,565 | 0.62 | 2,318,794 | 4,173 | 0.72 | ||||||||||||||||||||||||
Non-interest bearing liabilities: | ||||||||||||||||||||||||||||||
Non-interest-bearing demand deposits | 585,530 | 511,813 | ||||||||||||||||||||||||||||
Other liabilities | 68,515 | 75,302 | ||||||||||||||||||||||||||||
Total non-interest bearing liabilities | 654,045 | 587,115 | ||||||||||||||||||||||||||||
Total liabilities | 2,949,117 | 2,905,909 | ||||||||||||||||||||||||||||
Shareholders' equity | 256,783 | 287,698 | ||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 3,205,900 | $ | 3,193,607 | ||||||||||||||||||||||||||
Net interest income | $ | 22,102 | $ | 24,194 | ||||||||||||||||||||||||||
Interest rate spread (5) | 2.85 | % | 3.15 | % | ||||||||||||||||||||||||||
Net interest margin (6) | 2.99 | % | 3.30 | % | ||||||||||||||||||||||||||
Ratio of average interest-earning assets to average interest-bearing liabilities | 128.93 | % | 126.30 | % | ||||||||||||||||||||||||||
(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, 2013 and 2012 were $167 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. | ||||||||||||||||||||||||||||||
SUN BANCORP, INC. AND SUBSIDIARIES | |||||||||||||||||||||||
AVERAGE BALANCE SHEETS (Unaudited) | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||||
Balance | Expense | Cost | Balance | Expense | Cost | ||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||
Loans receivable (1),(2): | |||||||||||||||||||||||
Commercial and industrial | $ | 1,688,702 | $ | 74,191 | 4.39 | % | $ | 1,814,626 | $ | 82,165 | 4.53 | % | |||||||||||
Home equity | 196,597 | 7,563 | 3.85 | 216,218 | 8,738 | 4.04 | |||||||||||||||||
Second mortgage | 28,038 | 1,611 | 5.75 | 37,021 | 2,128 | 5.75 | |||||||||||||||||
Residential real estate | 312,617 | 10,846 | 3.47 | 207,553 | 8,199 | 3.95 | |||||||||||||||||
Other | 28,285 | 1,961 | 6.93 | 35,636 | 2,477 | 6.95 | |||||||||||||||||
Total loans receivable | 2,254,239 | 96,172 | 4.27 | 2,311,054 | 103,707 | 4.49 | |||||||||||||||||
Investment securities (3) | 413,861 | 8,884 | 2.15 | 537,710 | 12,529 | 2.33 | |||||||||||||||||
Interest-earning bank balances | 295,199 | 746 | 0.25 | 28,646 | 68 | 0.24 | |||||||||||||||||
Total interest-earning assets | 2,963,299 | 105,802 | 3.57 | 2,877,410 | 116,304 | 4.04 | |||||||||||||||||
Non-interest earning assets: | |||||||||||||||||||||||
Cash and due from banks | 70,673 | 73,000 | |||||||||||||||||||||
Bank properties and equipment, net | 49,357 | 52,781 | |||||||||||||||||||||
Goodwill and intangible assets, net | 40,031 | 43,280 | |||||||||||||||||||||
Other assets | 101,593 | 108,299 | |||||||||||||||||||||
Total non-interest-earning assets | 261,654 | 277,360 | |||||||||||||||||||||
Total assets | $ | 3,224,953 | $ | 3,154,770 | |||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||
Interest-bearing deposit accounts: | |||||||||||||||||||||||
Interest-bearing demand deposits | $ | 1,243,074 | $ | 4,228 | 0.34 | % | $ | 1,225,609 | $ | 4,778 | 0.39 | % | |||||||||||
Savings deposits | 268,414 | 843 | 0.31 | 263,307 | 900 | 0.34 | |||||||||||||||||
Time deposits | 667,984 | 6,278 | 0.94 | 643,822 | 7,876 | 1.22 | |||||||||||||||||
Total interest-bearing deposit accounts | 2,179,472 | 11,349 | 0.52 | 2,132,738 | 13,554 | 0.64 | |||||||||||||||||
Short-term borrowings: | |||||||||||||||||||||||
Federal funds purchased | 14 | - | - | 5,437 | 20 | 0.37 | |||||||||||||||||
Securities sold under agreements to repurchase - customers | 1,565 | 2 | 0.13 | 5,157 | 7 | 0.14 | |||||||||||||||||
Long-term borrowings: | |||||||||||||||||||||||
FHLBNY advances (4) | 61,050 | 1,275 | 2.09 | 37,038 | 898 | 2.42 | |||||||||||||||||
Obligations under capital lease | 7,468 | 499 | 6.68 | 7,737 | 513 | 6.63 | |||||||||||||||||
Junior subordinated debentures | 92,786 | 2,188 | 2.36 | 92,786 | 2,594 | 2.80 | |||||||||||||||||
Total borrowings | 162,883 | 3,964 | 2.43 | 148,155 | 4,032 | 2.72 | |||||||||||||||||
Total interest-bearing liabilities | 2,342,355 | 15,313 | 0.65 | 2,280,893 | 17,586 | 0.77 | |||||||||||||||||
Non-interest bearing liabilities: | |||||||||||||||||||||||
Non-interest-bearing demand deposits | 543,490 | 499,435 | |||||||||||||||||||||
Other liabilities | 78,209 | 80,777 | |||||||||||||||||||||
Total non-interest bearing liabilities | 621,699 | 580,212 | |||||||||||||||||||||
Total liabilities | 2,964,054 | 2,861,105 | |||||||||||||||||||||
Shareholders' equity | 260,899 | 293,665 | |||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 3,224,953 | $ | 3,154,770 | |||||||||||||||||||
Net interest income | $ | 90,489 | $ | 98,718 | |||||||||||||||||||
Interest rate spread (5) | 2.92 | % | 3.27 | % | |||||||||||||||||||
Net interest margin (6) | 3.05 | % | 3.43 | % | |||||||||||||||||||
Ratio of average interest-earning assets to average interest-bearing liabilities | 126.51 | % | 126.15 | % | |||||||||||||||||||
(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 year ended December 31, 2013 and 2012 were $720 thousand and $870 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 Three Months Ended | |||||||||||||||||||||||
December 31, 2013 | September 30, 2013 | ||||||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||||
Balance | Expense | Cost | Balance | Expense | Cost | ||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||
Loans receivable (1),(2): | |||||||||||||||||||||||
Commercial and industrial | $ | 1,621,222 | $ | 17,406 | 4.29 | % | $ | 1,671,302 | $ | 19,205 | 4.60 | % | |||||||||||
Home equity | 190,394 | 1,853 | 3.89 | 194,622 | 1,892 | 3.89 | |||||||||||||||||
Second mortgage | 26,142 | 367 | 5.62 | 27,041 | 384 | 5.68 | |||||||||||||||||
Residential real estate | 312,977 | 2,671 | 3.41 | 299,667 | 2,620 | 3.50 | |||||||||||||||||
Other | 26,134 | 456 | 6.98 | 27,723 | 475 | 6.85 | |||||||||||||||||
Total loans receivable | 2,176,869 | 22,753 | 4.18 | 2,220,355 | 24,576 | 4.43 | |||||||||||||||||
Investment securities(3) | 439,788 | 2,693 | 2.45 | 414,189 | 2,157 | 2.08 | |||||||||||||||||
Interest-earning bank balances | 342,412 | 221 | 0.26 | 349,386 | 222 | 0.25 | |||||||||||||||||
Total interest-earning assets | 2,959,069 | 25,667 | 3.47 | 2,983,930 | 26,955 | 3.61 | |||||||||||||||||
Non-interest earning assets: | |||||||||||||||||||||||
Cash and due from banks | 66,662 | 72,336 | |||||||||||||||||||||
Bank properties and equipment, net | 49,300 | 48,590 | |||||||||||||||||||||
Goodwill and intangible assets, net | 39,190 | 39,717 | |||||||||||||||||||||
Other assets | 91,679 | 120,311 | |||||||||||||||||||||
Total non-interest-earning assets | 246,831 | 280,954 | |||||||||||||||||||||
Total assets | $ | 3,205,900 | $ | 3,264,884 | |||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||
Interest-bearing deposit accounts: | |||||||||||||||||||||||
Interest-bearing demand deposits | $ | 1,223,184 | $ | 960 | 0.31 | % | $ | 1,263,160 | $ | 1,064 | 0.34 | % | |||||||||||
Savings deposits | 268,196 | 195 | 0.29 | 270,394 | 213 | 0.32 | |||||||||||||||||
Time deposits | 641,995 | 1,421 | 0.89 | 663,582 | 1,536 | 0.93 | |||||||||||||||||
Total interest-bearing deposit accounts | 2,133,375 | 2,575 | 0.48 | 2,197,136 | 2,813 | 0.51 | |||||||||||||||||
Short-term borrowings: | |||||||||||||||||||||||
Federal funds purchased | 54 | - | - | - | - | - | |||||||||||||||||
Securities sold under agreements to repurchase - customers | 512 | - | - | 555 | - | - | |||||||||||||||||
Long-term borrowings: | |||||||||||||||||||||||
FHLBNY advances (4) | 60,981 | 320 | 2.10 | 61,011 | 321 | 2.10 | |||||||||||||||||
Obligations under capital lease | 7,364 | 124 | 6.74 | 7,435 | 124 | 6.67 | |||||||||||||||||
Junior subordinated debentures | 92,786 | 545 | 2.35 | 92,786 | 550 | 2.37 | |||||||||||||||||
Total borrowings | 161,697 | 989 | 2.45 | 161,787 | 995 | 2.46 | |||||||||||||||||
Total interest-bearing liabilities | 2,295,072 | 3,565 | 0.62 | 2,358,923 | 3,808 | 0.65 | |||||||||||||||||
Non-interest bearing liabilities: | |||||||||||||||||||||||
Non-interest-bearing demand deposits | 585,530 | 549,684 | |||||||||||||||||||||
Other liabilities | 68,515 | 95,576 | |||||||||||||||||||||
Total non-interest bearing liabilities | 654,045 | 645,260 | |||||||||||||||||||||
Total liabilities | 2,949,117 | 3,004,183 | |||||||||||||||||||||
Shareholders' equity | 256,783 | 260,701 | |||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 3,205,900 | $ | 3,264,884 | |||||||||||||||||||
Net interest income | $ | 22,102 | $ | 23,147 | |||||||||||||||||||
Interest rate spread (5) | 2.85 | % | 2.96 | % | |||||||||||||||||||
Net interest margin (6) | 2.99 | % | 3.10 | % | |||||||||||||||||||
Ratio of average interest-earning assets to average interest-bearing liabilities | 128.93 | % | 126.50 | % | |||||||||||||||||||
(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, 2013 and September 30, 2013 were $167 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.
