Filed by Sun Bancorp, Inc.
Pursuant to Rule 425 of the Securities Act of 1933 and deemed filed
Pursuant to the Securities Exchange Act of 1934
Subject Company: Community Bancorp of New Jersey
Registration Statement Number: 333-114436
Sun Bancorp, Inc.
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Vineland, NJ o Nasdaq: SNBC
Thomas A. Bracken
President & CEO
Dan A. Chila
Chief Financial Officer
Northeast 2004
Super Community
Bank Conference
Boston, MA
Monday, May 24 - Tuesday, May 25, 2004
[Sun Bancorp, Inc. Logo]
SEC Legend
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SUN BANCORP, INC. HAS FILED A REGISTRATION STATEMENT ON FORM S-4 WITH THE
SECURITIES AND EXCHANGE COMMISSION ("SEC") RELATING TO THE COMMON STOCK OF SUN
BANCORP, INC. TO BE ISSUED IN CONNECTION WITH THE COMMUNITY BANCORP OF NEW
JERSEY MERGER. THE REGISTRATION STATEMENT CONTAINS IMPORTANT INFORMATION
REGARDING SUN BANCORP, INC. AND THE MERGER AND INVESTORS ARE URGED TO READ THE
REGISTRATION STATEMENT CAREFULLY. INVESTORS CAN OBTAIN THE REGISTRATION
STATEMENT FREE OF CHARGE FROM THE SEC'S WEBSITE AT WWW.SEC.GOV AND IS ALSO
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AVAILABLE WITHOUT CHARGE FROM SUN BANCORP, INC. UPON WRITTEN REQUEST TO THE
CORPORATE SECRETARY. THIS PRESENTATION SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY THE SECURITIES OF SUN BANCORP, INC. NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL.
[Sun Bancorp, Inc. Logo]
Investment Considerations
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"Our Mission Is To Be The Premier Community Bank in Every Community We Serve"
o Seasoned leadership team managing the bank with goal of dominating our
footprint
o Turnaround is ahead of expectations despite difficult external operating
environment
o Growth of investment portfolio from branch acquisition poised for
conversion to loans led by seasoned lending team which continues to be
enhanced through hiring of experienced lenders
o Scope of branch network is extensive and being refined to maximize
profitability
o Vibrant south-central NJ market is strong and growing
o Post CBNJ acquisition we will have the best branch network in
Central/Southern New Jersey
[Sun Bancorp, Inc. Logo]
Our Story
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o THEN - "In Harm's Way"
o NOW - "Building a Community Bank Powerhouse"
o Veteran Management team
o Attractive service area, market demographics and our share
o Branch rationalization
o Initiatives for revenue growth and improved profitability
o Community Bancorp of New Jersey acquisition overview
o Financial highlights
o Investment considerations
[Sun Bancorp, Inc. Logo]
THEN - "In Harm's Way"
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o Founded 1985; rapid growth 1994-2001
o From 3 to 75 branches (51 acquired + 21 de novo)
o From $112 million in assets to a $2.0 billion multi-state BHC
o Significant Consequences
o Regulatory MOU leads Board to install new management team in early 2001
[Sun Bancorp, Inc. Logo]
NOW - "Building a Community Bank Powerhouse"
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o Leadership team comprised of experienced bankers with proven track records,
deep knowledge of NJ market
o Regulatory issues resolved, MOU lifted in record time
o New strategic plan drives redefined company mission
[Sun Bancorp, Inc. Logo]
Veteran Management Team that has Done this Before
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* 7 team members who have worked together for a combined total of over 170 years
YEARS BANKING PRIOR ORGANIZATIONS YEARS EMPLOYED
NAME TITLE EXPERIENCE
Tom Bracken President and CEO 34* New Jersey National Bank 1969 to 1986
CoreStates/First Union 1986 to 2001
Dan Chila Executive VP, CFO 28* Citizen's Bancorp 1975 to 1984
New Jersey National Bank 1984 to 1986
CoreStates 1986 to 1998
People's Bancorp 1998 to 2000
Bruce Dansbury Executive VP 28* New Jersey National Bank 1975 to 1986
Business Banking CoreStates/First Union 1986 to 2001
Tom Holt Senior VP 17* New Jersey National Bank 1986
Financial Services CoreStates/First Union 1986 to 2001
Jack Neary Executive VP 35* First Pennsylvania Bank 1965 to 1980
Community Banking Manufacturers Hanover Financial Services 1980 to 1986
New Jersey National Bank 1986 to 1987
CoreStates 1987 to 1998
Lou Pellicori Executive VP 21 CoreStates/First Union 1982 to 1999
Chief Information Officer Commerce Bank 1999 to 2000
Alliance Consulting Group 2000 to 2001
Bart Speziali Executive VP 31 Citizens United Bank 1972 to 1980
Commercial Banking Security Savings and Loan 1981 to 1992
Tom Townsend Senior VP 25 CoreStates 1978 to 1998
Risk Management HRS America 1998 to 1999
Smith Barney Corporate Trust Company 1999 to 2001
Sandy Wandelt Senior VP 6* New Jersey National Bank 1986 to 1988
Human Resources CoreStates 1988 to 1991
Chris Warren Executive VP 24* CoreStates 1979 to 1998
Business Banking First Union 1998 to 2003
[Sun Bancorp, Inc. Logo]
High Growth, Wealthy Market Served
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o New Jersey is the wealthiest state,
based on median household income (MHI)
o 7 out of the top 10 fastest growing
NJ counties are in Sun market area/regions [MAP OMITTED]
o 10 Fortune 50 companies are headquartered in Sun's footprint
o 2002, the average value of a new residential
building permit exceeded $200,000, a 40% increase in 5 years
Source: SNL Securities, NJ Business and Industry Assoc.
and the NJ Council of Economic Advisors
[Sun Bancorp, Inc. Logo]
Relationship Banking Business Strategy Driving Growth
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From transaction banking to relationship banking...
o Provide relationship-based customer service across 3 business lines
o Become the lead bank for all of our customers' banking needs
[Sun Bancorp, Inc. Logo]
Branch Rationalization
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o On December 19, 2003, acquired 8 branches of the South Jersey Bank division
of New York Community Bank with $340 million in deposits and $15 million in
loans
o On February 17, 2004 we announced the acceleration of our planned 2004-2005
branch rationalization program into 2004
o Consolidation of 14 under-performing branches in 2004
o We expect to complete the branch restructurings by December 2004 and to
incur a pre-tax restructuring charge of approximately $2.3 million, or
$0.11 per share after taxes
o Going forward, we anticipate the branch consolidations/sales to be
accretive by $0.10 per share annually
[Sun Bancorp, Inc. Logo]
Branch Rationalization
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Total Avg. Deposits
No. of Deposits /Branch
Branches ($ Millions) ($ Millions)
Dec. 31, 2000 70 $1,428 $20.4
Dec. 31, 2001 (+3/-1) 72 1,573 21.9
Dec. 31, 2002 (+2/-1) 73 1,703 23.3
Dec. 31, 2003 (+8(1)/-5 76 2,111 27.8
- - Consolidation/Sale of Branches(2) -14 -108 7.7
+ Acquisition of CBNJ +8 +326 40.8
Pro Forma 70 2,329 33.3
o Eight branches were acquired from New York Community Bancorp in December 2003
o Total Deposits and average deposits per branch represent anticipated run-off
as a result of consolidations and closings
[Sun Bancorp, Inc. Logo]
Growth in Fee Income
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o Current fee income initiatives
- NSF/OD Privilege Program
- credit card
- electronic banking
- leasing
- SBA
- others under consideration
[Sun Bancorp, Inc. Logo]
Overview of Community Bancorp of New Jersey (CBNJ)
o On February 17, 2004 we announced our acquisition of Community Bancorp of
New Jersey (CBNJ)
o Valuable franchise in one of the most affluent and densely populated
residential and business markets in United States
o Established in 1997 to meet the needs of Monmouth County communities that
were underserved after considerations
o Has grown profitably to over $400 million in assets in 6 years of operation
o 8th largest deposit share in Monmouth County with 8 branches in prime
locations
o Superior asset quality and liquid balance sheet
SNBC CBNJ Combined
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Assets: $2,600 $428 $3,028
Net Loans: 1,364 199 1,563
Deposits: 2,111 326 2,437
Common Equity: 186 24 210
As of December 31, 2003 ($ in millions): combined numbers do not reflect
purchase accounting adjustments
[Sun Bancorp, Inc. Logo]
Attractive Demographics of Monmouth County
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Monmouth Monmouth
Rank out of Rank out of
Monmouth SNBC's 13 NJ's 21
County NJ Counties Counties
Total Deposits $12.7 billion #2 #6
Small Businesses 54,712 #1 #3
2003 SBA Loan Approvals 203 #3 #4
SNBC's New Jersey
Market Avg. State Avg.
Proj. Population Growth (2010) 10.52% 7.51% 5.55%
Median Household Income $71,562 $56,668 $61,179
[Sun Bancorp, Inc. Logo]
Pro Forma Deposit Market Share - Monmouth County
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o SNBC becomes the largest community focused commercial bank in Monmouth County
behind 4 super-regional banks and 3 savings institutions
Deposits Market
Rank Institution Branches ($000) Share (%)
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1 Bank of America Corp. 64 2,192,926 17.26
2 Wachovia Corp. 50 1,966,604 15.48
3 Sovereign Bancorp Inc. 30 1,758,184 13.84
4 PNC Financial Services Group 29 935,735 7.37
5 Investors Bancorp MHC 9 917,954 7.23
6 Commerce Bancorp Inc. 19 885,657 6.97
7 Hudson City Bancorp Inc. (MHC) 4 580,912 4.57
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8 Sun Bancorp Pro Forma 10 412,985 3.25
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8 Community Bancorp of NJ 8 344,385 2.71
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9 Provident Financial Services 12 335,396 2.64
10 Shrewsbury Bancorp 11 325,308 2.56
11 Independence Comm. Bank Corp. 2 303,196 2.39
12 MSB Mutual Holding Company 4 295,252 2.32
13 Bank of New York Co. 7 276,268 2.17
14 Monmouth Community Bancorp 6 188,380 1.48
15 Freehold S&LA 2 165,815 1.31
16 Allaire Community Bank 5 138,412 1.09
17 Columbia Savings Bank M.H.C. 3 132,054 1.04
18 Two River Community Bank 6 127,604 1.00
19 North Fork Bancorp 8 125,833 0.99
20 Amboy Bancorporation 6 115,891 0.91
21 Washington Mutual Inc. 3 105,394 0.83
22 First Washington FinancialCorp 4 91,559 0.72
23 OceanFirst Financial Corp. 2 88,976 0.70
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24 Sun Bancorp Inc. 5 88,193 0.69
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Source: SNL Financial (as of June 2003)
[Sun Bancorp, Inc. Logo]
Market Share Potential in High Growth Markets
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Sun Bancorp Market Share By County
Prior to NYCB acquisitions [MAP OMITTED]
Including NYCB acquisitions [MAP OMITTED]
Including CBNJ acquisitions [MAP OMITTED]
[Sun Bancorp, Inc. Logo]
Pro Forma Franchise Locations
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[MAP OMITTED]
[Sun Bancorp, Inc. Logo]
Building Our Infrastructure
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o Attract & retain people who understand & can execute our strategy; banking
is still a "people" business
o Install upgraded technology across institution
o Realize savings from basic improvements in operational processes and
efficiency
[Sun Bancorp, Inc. Logo]
Financial Highlights
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De-leveraging and managing balance sheet growth are having a favorable impact
[Graphic Omitted]
[Sun Bancorp, Inc. Logo]
Financial Highlights
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Loan Type Collateral Mix
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Consumer 15% Other 21%
Commercial 85% Secured by Real Estate 79%
[PIE CHARTS OMITTED]
[Sun Bancorp, Inc. Logo]
Financial Highlights
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NPAs / Assets Reserves / Loans
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1999 0.25% 1999 0.93%
2000 0.30% 2000 1.01%
2001 0.58% 2001 1.21%
2002 1.27% 2002 1.33%
2003 1.01% 2003 1.27%
Mar-04 0.96% Mar-04 1.25%
NPAs includes non-accrual loans, other real estate owned, loans 90+ days past
due and troubled debt restructurings.
[Sun Bancorp, Inc. Logo]
Financial Highlights
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Shift in sources of funding complements strong growth rate of core deposits
17.9% Core Deposit CAGR
9.9% Deposit CAGR
Deposits Core Deposits FHLB Advances/ Repos
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(Millions)
1999 1,291 681 529
2000 1,411 782 407
2001 1,572 1,079 160
2002 1,690 1,278 205
2003 2,111 1,577 220
Mar-04 2,073 1,552 219
o Core deposits have grown from 53% to 75% of total deposits since 1999
[Sun Bancorp, Inc. Logo]
Financial Highlights
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Net Income (1) Returns (%)
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Dollars in thousands ROAA ROAE
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2002 Q1 2,137 1999 0.58% 11.08%
Q2 2,573 2000 0.43% 8.85%
Q3 2,776 2001 0.07% 1.0%%
Q4 2,892 2002 0.50% 7.63%
2003 0.59% 8.71%
2003 Q1 2,892 Mar-04 0.53% 7.26%
Q2 3,127
Q3 3,374
Q4 3,534
2004 Q1 3,421
(1) Excludes $866,000 net gain on branch sale in 2003 Q1. In 2003 Q3, excludes
$867,000 net gain on branch sale and $924,000 net of tax special loan loss
provision. In 2003 Q4, excludes $400,000 net of tax charges related to the
Community Bank of New York branch acquisition.
[Sun Bancorp, Inc. Logo]
Financial Highlights
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Non-interest income growth and an improving efficiency ratio continue to be
strategic goals
Non-Interest Income(1) 15.2% CAGR
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Dollars in millions
1999 $ 6.8
2000 $ 8.3
2001 $10.1
2002 $10.7
2003 $12.3
Mar-04 $13.8
Efficiency Ratio (%)
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Efficiency Ratio Efficiency Ratio (Excl Intangible Amortization)
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1999 74.6% 64.4%
2000 78.4% 67.1%
2001 85.8% 74.1%
2002 75.4% 70.0%
2003 73.7% 69.5%
Mar-04 77.8% 72.9%
(1) Excludes non-recurring items.
[Sun Bancorp, Inc. Logo]
Financial Highlights
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Margin strengthening with balance sheet repositioning
Net Interest Margin
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1999 3.57%
2000 3.30%
2001 3.20%
2002 3.44%
2003 3.57%
Mar-04 3.46%
Yield / Cost
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Yield on Earning Assets Cost of Interest Bearing Liabilities
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1999 7.58% 4.52%
2000 8.01% 5.30%
2001 7.08% 4.48%
2002 5.94% 2.94%
2003 5.30% 2.07%
Mar-04 4.84% 1.62%
[Sun Bancorp, Inc. Logo]
Financial Highlights
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Book / Tangible Book Value(1)
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[Graphic Omitted]
Leverage Ratio
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1999 5.18%
2000 5.88%
2001 6.90%
2002 6.84%
2003 7.34%
Mar-04 6.93%
(1) On December 22, 2003, the Company completed a public offering of 1,495,000
shares of common stock which increased capital by approximately $30
million.
[Sun Bancorp, Inc. Logo]
Investment Considerations
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"Our Mission Is To Be The premier Community Bank in Every Community We Serve"
o Seasoned leadership team managing the bank with goal of dominating our
footprint
o Turnaround is ahead of expectations despite difficult external operating
environment
o Growth of investment portfolio from branch acquisition poised for
conversion to loans led by seasoned lending team which continues to be
enhanced through hiring of experienced lenders
o Scope of branch network is extensive and being refined to maximize
profitablity
o Vibrant south-central NJ market is strong and growing
o Post CBNJ acquisition we will have the best branch network in
Central/Southern New Jersey
[Sun Bancorp, Inc. Logo]
Forward-Looking Information
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During the course of this presentation, management may make projections and
forward-looking statements regarding events or the future financial performance
of Sun Bancorp. We wish to caution you that these forward-looking statements
involve certain risks and uncertainties, including a variety of factors that may
cause Sun Bancorp's actual results to differ materially from the anticipated
results expressed in these forward-looking statements. Investors are cautioned
not to place undue reliance on these forward-looking statements and are advised
to review the risk factors that may affect Sun Bancorp's operating results in
documents filed by Sun Bancorp with the Securities and Exchange Commission,
including the Form S-3 Registration Statement, Quarterly Report on Form 10-Q,
the Annual report on Form 10-K and other required filings. Sun Bancorp assumes
no duty to update the forward-looking statements made in this presentation.
[Sun Bancorp, Inc. Logo]