[LOGO] SUN BANCORP, INC.
News Release
For Immediate Release
Contact: Dan Chila, EVP, Chief Financial Officer (856) 691-7700
Christine Irving (856) 690-4372
Sun Bancorp Reports Net Income Up 15.5% Over Nine Months;
Third Quarter Net Income Advances 11.1%
Our mission is uncompromising...
...to be the Premier Community Bank in every community we serve
VINELAND, NJ, October 18, 2005 - Sun Bancorp, Inc. (NASDAQ: SNBC) today reported
net income of $5.0 million ($0.26 per share) for the quarter ended September 30,
2005, up 11.1% over net income of $4.5 million ($0.24 per share) for the third
quarter of 2004. Earnings per share data is adjusted for the 5% common stock
dividend declared in March 2005 and paid on April 20, 2005.
For the nine months ended September 30, 2005, the Company reported net
income of $14.9 million ($0.77 per share), an increase of 15.5% over $12.9
million ($0.76 per share) in the prior period. Net income for the prior period
includes one-time, after-tax net income of $950,000 ($0.06 per share) from the
facilities sold under the Company's branch rationalization program. Excluding
these items, net income for the nine months ended September 30, 2005, increased
24.5% over the prior year period.
"Net income growth during the third quarter and over the first nine
months of 2005 was solid as we executed well on the fundamentals of sound
banking in this highly competitive and fragmented New Jersey marketplace," said
Thomas A. Bracken, president and chief executive officer of Sun Bancorp, Inc.
and its wholly owned subsidiary, Sun National Bank.
--more--
Sun Bancorp, Inc. o 226 Landis Avenue o Vineland, NJ o 08360
(856) 691-7700 o www.sunnb.com o Member FDIC
Sun Bancorp 3Q 2005 Results - page two
"On the loan side, our transaction pipeline continues to be strong, as we
believe our cadre of seasoned lenders is giving us a competitive edge. We expect
reported loan growth to be in the range of 6% to 7% for the full year. Our nine
month loan growth of 4.9% reflects a high level of loan prepayments
approximating $80 million. After adjusting for these prepayments, our underlying
growth rate for new loans is actually 9.2%."
"Loan quality trends continue to be positive, and we will not
compromise our underwriting standards in order to generate higher loan volume,"
said Bracken. "Pricing competition for both loans and especially deposits
remains very aggressive in our market and should continue to impact our net
interest margin into the fourth quarter and 2006."
"We are working closely with the management of Advantage Bank on our
merger integration planning. Final closing of the previously announced
transaction is targeted for early first quarter 2006," said Bracken. "We remain
confident that the strategic acquisitions and restructuring initiatives we have
put in place to date are creating permanent value throughout the organization.
Our complex efforts over the past several years have been time consuming and
will require ongoing patience. We see the institution as continually becoming
better poised to produce consistent, sustainable profitability as the dominant
banking force in central and southern New Jersey."
The following is an overview of the key financial highlights for the
quarter:
o Total assets of $3.105 billion at September 30, 2005, remained level
compared to June 30, 2005 and September 30, 2004.
o Total loans at September 30, 2005, were $1.962 billion, representing an
increase of $200.1 million, or 11.4%, compared to September 30, 2004.
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Sun Bancorp 3Q 2005 Results - page three
o Credit quality trends remain relatively stable. Allowance for loan losses
was $22.3 million, or 1.14% of gross loans, at September 30, 2005, compared
to $22.5 million, or 1.17%, at June 30, 2005, and $21.8 million, or 1.24%,
at September 30, 2004. Total non-performing assets of $13.9 million at
September 30, 2005, or 0.71% of total loans and real estate owned, compared
to $13.9 million, or 0.79% at September 30, 2004. On a linked quarter
basis, total non-performing assets decreased $342,000, or 2.4%.
o Total deposits were $2.508 billion at September 30, 2005 and increased
$78.2 million, or 3.2%, over September 30, 2004. On a linked quarter basis,
total deposits were essentially flat.
o The investment portfolio at September 30, 2005, of $803.4 million remains
well structured with a relatively short average life of 1.5 years. This
portfolio provides ample liquidity to meet future loan funding
requirements.
o Net interest income (tax-equivalent basis) for the quarter of $24.6 million
increased $459,000, or 1.9%, over the prior year comparable quarter, and
increased $348,000, or 1.4%, over the linked quarter. Net interest margin
for the quarter of 3.45% compares to 3.61% for the comparable prior year
quarter and 3.48% for the linked quarter.
o Total operating non-interest income of $4.6 million increased $792,000, or
20.7%, over the comparable prior year period. On a linked quarter basis,
the increase is $329,000, or 7.7%. These increases are primarily related to
the new Small Business Administration (SBA) lending and commercial loan
derivative fee income initiatives. Service charge income continues to be
essentially flat as a result of increased earnings credit rates on analysis
accounts.
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Sun Bancorp 3Q 2005 Results - page four
o Total operating non-interest expenses for the quarter of $21.2 million
increased $400,000, or 1.9%, over the comparable prior year period. On a
linked quarter basis, total operating non-interest expenses decreased 1.0%.
The consolidated efficiency ratio for the current quarter of 72.71%
compares to the prior year quarter of 75.33%, and the linked quarter of
73.08%.
"On balance, our performance for the quarter and the first nine months
of 2005 was favorable, considering the unprecedented rates we are dealing with
and that we are operating in the most competitive environment I have encountered
in my 35 year career in this market. Our goal is to build sustainable long-term
value for our shareholders. Our patience and restraint in the current
environment will assist in accomplishing that goal," said Bracken.
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 74 Community Banking Centers in Southern and Central New
Jersey, Philadelphia, PA, and New Castle County, DE. 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.
--more--
Page 5
SUN BANCORP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (unaudited)
(Dollars in thousands, except per share data)
Three months ended Nine months ended
September 30, September 30,
------------- -------------
2005 2004 2005 2004
---- ---- ---- ----
Profitability for the period:
Net interest income $ 24,516 $ 23,944 $ 72,823 $ 64,491
Provision for loan losses 500 300 1,790 1,660
Non-interest income 4,612 4,249 13,892 14,853
Non-interest expense 21,179 21,237 62,935 59,068
Income before income taxes 7,449 6,656 21,990 18,616
Net income $ 4,994 $ 4,492 $ 14,937 $ 12,943
======== ======== ======== ========
Return on average assets (1) 0.63% 0.60% 0.64% 0.64%
Return on average equity (1) 6.83% 7.25% 6.93% 8.27%
Return on average tangible equity (1), (2) 12.83% 13.68% 12.79% 13.14%
Net interest margin (1) 3.45% 3.61% 3.48% 3.55%
Efficiency ratio (consolidated) 72.71% 75.33% 72.58% 74.45%
Efficiency ratio (Bank only) (3) 69.67% 73.02% 69.74% 72.24%
Per share data:
Earnings per common share (4):
Basic $0.28 $0.25 $0.82 $0.83
Diluted $0.26 $0.24 $0.77 $0.76
Average equity to average assets 9.25% 8.33% 9.21% 7.68%
September 30, December 31,
------------- ------------
At period-end: 2005 2004
-------------- ---- ----
Assets $ 3,105,310 $ 3,053,587
Deposits 2,507,565 2,430,363
Loans, net 1,939,465 1,847,721
Investments 803,370 877,877
Borrowings 215,971 254,310
Shareholders' Equity 291,560 279,220
Credit quality and capital ratios:
ALLL to total loans 1.14% 1.18%
Non-performing assets to total loans
and real estate owned 0.71% 0.92%
Total allowance for loan losses to
non-performing loans 179.60% 153.64%
Total Capital (to Risk Weighted Assets) (5):
Sun Bancorp, Inc. 11.14% 10.80%
Sun National Bank 10.55% 10.06%
Tier I Capital (to Risk Weighted Assets) (5):
Sun Bancorp, Inc. 10.16% 9.78%
Sun National Bank 9.57% 9.04%
Leverage Ratio (5):
Sun Bancorp, Inc. 7.84% 7.51%
Sun National Bank 7.41% 6.94%
Book value (4) $16.06 $15.54
Tangible book value (4) $8.57 $8.07
(1) Three and nine months ended 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) The Bank only efficiency ratio excludes interest expense on debentures.
(4) Data is adjusted for a 5% stock dividend declared in March 2005.
(5) September 30, 2005 Capital ratios are estimated, subject to regulatory
filings.
Page 6
SUN BANCORP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except par value)
September 30, December 31,
------------- ------------
2005 2004
---- ----
ASSETS
Cash and due from banks $ 73,578 $ 69,022
Interest bearing bank balances 3,735 1,878
Federal funds sold 24,450 4,002
----------- -----------
Cash and cash equivalents 101,763 74,902
Investment securities available for sale (amortized cost -
$763,183; 9/05, $823,896; 12/04) 753,351 819,424
Investment securities held to maturity 35,306 43,048
Loans receivable (net of allowance for loan losses -
$22,310; 09/05, $22,037; 12/04) 1,939,465 1,847,721
Restricted equity investments 14,713 15,405
Bank properties and equipment, net 37,092 36,830
Real estate owned, net 1,437 2,911
Accrued interest receivable 15,314 12,519
Goodwill 104,891 104,969
Intangible assets, net 31,057 34,753
Deferred taxes, net 6,267 4,626
Bank Owned Life Insurance 48,378 47,179
Other assets 16,276 9,300
----------- -----------
TOTAL ASSETS $ 3,105,310 $ 3,053,587
=========== ===========
LIABILITIES
Deposits $ 2,507,565 $ 2,430,363
Advances from the Federal Home Loan Bank 129,656 144,669
Securities sold under agreements to repurchase - FHLB - 50,000
Securities sold under agreements to repurchase - customers 86,315 59,641
Debentures 77,322 77,322
Other liabilities 12,892 12,372
----------- -----------
Total liabilities 2,813,750 2,774,367
SHAREHOLDERS' EQUITY
Preferred stock, $1 par value, 1,000,000 shares authorized, none issued - -
Common stock, $1 par value, shares authorized, 25,000,000
issued, 18,149,063; 09/05, 17,205,245; 12/04 18,149 17,205
Additional paid in capital 263,614 244,108
Retained earnings 16,173 21,718
Accumulated other comprehensive loss (6,376) (2,765)
Treasury stock at cost, 90,562 shares at 12/04 - (1,046)
----------- -----------
Total shareholders' equity 291,560 279,220
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,105,310 $ 3,053,587
=========== ===========
Page 7
SUN BANCORP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-------------------- --------------------
2005 2004 2005 2004
---- ---- ---- ----
INTEREST INCOME:
Interest and fees on loans $ 31,981 $ 25,911 $ 91,736 $ 68,856
Interest on taxable investment securities 6,381 6,289 18,545 18,439
Interest on non-taxable investment securities 249 468 1,139 1,479
Dividends on restricted equity investments 223 134 622 359
Interest on federal funds sold 522 183 852 266
-------- -------- -------- --------
Total interest income 39,356 32,985 112,894 89,399
-------- -------- -------- --------
INTEREST EXPENSE:
Interest on deposits 11,391 6,264 29,398 16,922
Interest on borrowed funds 2,118 1,838 6,968 5,426
Interest on debentures 1,331 939 3,705 2,560
-------- -------- -------- --------
Total interest expense 14,840 9,041 40,071 24,908
-------- -------- -------- --------
Net interest income 24,516 23,944 72,823 64,491
Provision for loan losses 500 300 1,790 1,660
-------- -------- -------- --------
Net interest income after provision for loan losses 24,016 23,644 71,033 62,831
-------- -------- -------- --------
NON-INTEREST INCOME:
Service charges on deposit accounts 2,245 2,387 6,783 6,758
Other service charges 88 27 203 333
Gain on sale of fixed assets - 152 103 2,473
Gain on sale of loans 318 70 748 181
Gain on sale of investment securities -- 277 809 1,180
Other 1,961 1,336 5,246 3,928
-------- -------- -------- --------
Total non-interest income 4,612 4,249 13,892 14,853
NON-INTEREST EXPENSE:
Salaries and employee benefits 10,701 10,598 31,804 29,213
Occupancy expense 2,758 2,876 8,485 8,041
Equipment expense 1,959 1,871 5,820 5,147
Data processing expense 1,064 976 3,056 2,959
Amortization of intangible assets 1,117 1,522 3,381 3,842
Other 3,580 3,394 10,389 9,866
-------- -------- -------- --------
Total non-interest expenses 21,179 21,237 62,935 59,068
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 7,449 6,656 21,990 18,616
INCOME TAXES 2,455 2,164 7,053 5,673
-------- -------- -------- --------
NET INCOME $ 4,994 $ 4,492 $ 14,937 $ 12,943
======== ======== ======== ========
Basic earnings per share (1) $ 0.28 $ 0.25 $ 0.82 $ 0.83
Diluted earnings per share (1) $ 0.26 $ 0.24 $ 0.77 $ 0.76
(1) Data is adjusted for a 5% stock dividend declared in March 2005.
Page 8
SUN BANCORP, INC. AND SUBSIDIARIES
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (unaudited)
(Dollars in thousands, except per share data)
2005 2005 2005 2004 2004
Q3 Q2 Q1 Q4 Q3
----------- ----------- ----------- ----------- -----------
Balance Sheet at quarter end:
Loans:
Commercial and industrial $ 1,674,263 $ 1,647,980 $ 1,631,717 $ 1,598,331 $ 1,494,528
Home equity 137,693 134,057 128,045 122,735 121,480
Second mortgage 45,238 46,955 48,643 50,541 51,417
Residential real estate 28,785 26,500 27,630 26,117 31,669
Installment 75,796 73,500 71,549 66,497 62,181
----------- ----------- ----------- ----------- -----------
Total loans 1,961,775 1,928,992 1,907,584 1,869,758 1,761,275
Allowance for loan losses (22,310) (22,505) (22,237) (22,037) (21,824)
----------- ----------- ----------- ----------- -----------
Net Loans 1,939,465 1,906,487 1,885,347 1,847,721 1,739,451
Goodwill 104,891 104,891 104,606 104,969 99,810
Intangible assets, net 31,057 32,174 33,291 34,753 36,179
Total Assets 3,105,310 3,140,962 3,050,741 3,053,587 3,013,256
Total Deposits 2,507,565 2,541,214 2,384,948 2,430,363 2,429,364
Advances from the Federal Home Loan Bank 129,656 134,713 169,717 144,669 149,569
Federal funds purchased - - 2,000 - -
Securities repurchase agreements - customers 86,315 77,488 74,057 59,641 69,930
Securities repurchase agreements - FHLB - - 50,000 50,000 -
Total shareholders' equity 291,560 287,632 281,687 279,220 275,828
Quarterly average balance sheet:
Loans:
Commercial and industrial $ 1,672,481 $ 1,649,491 $ 1,617,334 $ 1,526,912 $ 1,457,918
Home equity 134,382 130,754 126,069 121,287 115,961
Second mortgage 46,350 47,846 49,210 51,539 51,302
Residential real estate 27,634 26,728 26,241 29,001 31,893
Installment 74,220 71,477 67,606 63,810 60,039
----------- ----------- ----------- ----------- -----------
Total loans 1,955,067 1,926,296 1,886,460 1,792,549 1,717,113
Securities and other earning assets 899,276 863,176 868,441 930,823 963,473
Total earning assets 2,854,343 2,789,472 2,754,901 2,723,372 2,680,586
Total assets 3,159,051 3,106,121 3,058,645 3,034,530 2,974,942
Non-interest-bearing demand deposits 516,778 487,508 487,915 531,900 512,643
Total deposits 2,556,947 2,461,027 2,387,990 2,448,687 2,393,406
Total interest-bearing liabilities 2,334,909 2,318,221 2,275,907 2,211,670 2,193,156
Total shareholders' equity 292,369 284,654 281,507 277,710 247,740
Capital and credit quality measures:
Total Capital (to Risk Weighted Assets) (1):
Sun Bancorp, Inc. 11.14% 10.89% 10.98% 10.80% 11.18%
Sun National Bank 10.55% 10.33% 10.43% 10.06% 10.44%
Tier I Capital (to Risk Weighted Assets) (1):
Sun Bancorp, Inc. 10.16% 9.90% 9.97% 9.78% 10.13%
Sun National Bank 9.57% 9.34% 9.42% 9.04% 9.39%
Leverage Ratio (1):
Sun Bancorp, Inc. 7.84% 7.77% 7.70% 7.51% 7.61%
Sun National Bank 7.41% 7.34% 7.27% 6.94% 7.07%
Average equity to average assets 9.25% 9.16% 9.20% 9.15% 8.33%
ALLL to total loans 1.14% 1.17% 1.17% 1.18% 1.24%
Non-performing assets to total loans
and real estate owned 0.71% 0.74% 0.80% 0.92% 0.79%
Total allowance for loan losses to
non-performing loans 179.60% 176.32% 161.73% 153.64% 180.90%
Other data:
Net charge-offs (694) (497) (325) (202) (115)
=========== =========== =========== =========== ===========
Non-performing assets:
Non-accrual loans 11,848 12,662 13,461 13,457 11,528
Loans past due 90 days 574 102 287 886 536
Real estate owned, net 1,437 1,437 1,437 2,911 1,860
----------- ----------- ----------- ----------- -----------
Total non-performing assets 13,859 14,201 15,185 17,254 13,924
=========== =========== =========== =========== ===========
(1) September 30, 2005 Capital ratios are estimated, subject to regulatory
filings.
Page 9
SUN BANCORP, INC. AND SUBSIDIARIES
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (unaudited)
(Dollars in thousands, except per share data)
2005 2005 2005 2004 2004
Q3 Q2 Q1 Q4 Q3
------------ ------------ ------------ ------------ ------------
Profitability for the quarter:
Tax-equivalent interest income $ 39,483 $ 37,854 $ 36,140 $ 35,112 $ 33,225
Interest expense 14,840 13,559 11,672 10,043 9,041
Tax-equivalent net interest income 24,643 24,295 24,468 25,069 24,184
Tax-equivalent adjustment 127 216 240 242 240
Provision for loan losses 500 765 525 415 300
Non-interest income excluding security
gains, branch sales and fixed asset sales 4,612 4,283 4,085 4,046 3,820
Security gains - 809 - 227 277
Gain (loss) on sale of fixed assets - 3 100 (7) 152
Non-interest expense excluding
amortization of intangible assets 20,062 20,205 19,287 20,658 19,715
Amortization of intangible assets 1,117 1,117 1,147 1,426 1,522
Income before income taxes 7,449 7,087 7,454 6,594 6,656
Income tax expense 2,455 2,257 2,341 1,908 2,164
Net Income $ 4,994 $ 4,830 $ 5,113 $ 4,686 $ 4,492
============ ============ ============ ============ ============
Financial ratios:
Return on average assets (1) 0.63% 0.62% 0.67% 0.62% 0.60%
Return on average equity (1) 6.83% 6.79% 7.27% 6.75% 7.25%
Return on average tangible equity (1), (2) 12.83% 13.15% 13.94% 13.17% 13.68%
Net interest margin (1) 3.45% 3.48% 3.55% 3.68% 3.61%
Efficiency ratio (consolidated) 72.71% 73.08% 71.92% 75.91% 75.33%
Efficiency ratio (Bank only) (3) 69.67% 70.23% 69.31% 73.40% 73.02%
Per share data:
Earnings per common share (4), (5):
Basic $ 0.28 $ 0.27 $ 0.28 $ 0.26 $ 0.25
Diluted $ 0.26 $ 0.25 $ 0.26 $ 0.24 $ 0.24
Book value (4) $ 16.06 $ 15.86 $ 15.54 $ 15.54 $ 15.37
Tangible book value (4) $ 8.57 $ 8.30 $ 7.93 $ 8.07 $ 7.79
Average basic shares 18,141,052 18,131,121 18,010,434 17,961,694 17,657,777
Average fully diluted shares 19,341,580 19,306,440 19,371,080 19,347,621 18,953,197
Operating non-interest income breakdown:
Service charges on deposit accounts 2,245 2,300 2,238 2,286 2,387
Other service charges 88 70 45 21 27
Gain on sale of loans 318 89 341 108 70
Other income 1,961 1,824 1,461 1,631 1,336
------------ ------------ ------------ ------------ ------------
Total operating non-interest income 4,612 4,283 4,085 4,046 3,820
============ ============ ============ ============ ============
Non-operating income items:
Gain on sale of investment securities - 809 - 227 277
Gain (loss) on sale of fixed assets
relating to branch disposals - - 100 (7) 175
Gain (loss) on sale of fixed assets - 3 - - (23)
------------ ------------ ------------ ------------ ------------
Non-operating income before tax effect - 812 100 220 429
------------ ------------ ------------ ------------ ------------
Total non-interest income 4,612 5,095 4,185 4,266 4,249
Operating non-interest expense breakdown:
Salaries and employee benefits 10,701 10,859 10,244 10,964 10,541
Occupancy expense 2,758 2,648 3,079 2,567 2,570
Equipment expense 1,959 1,883 1,978 1,944 1,871
Data processing expense 1,064 1,061 931 1,014 976
Amortization of intangible assets 1,117 1,117 1,147 1,426 1,522
Other expenses 3,580 3,754 3,055 3,539 3,299
------------ ------------ ------------ ------------ ------------
Total operating non-interest expense 21,179 21,322 20,434 21,454 20,779
Non-operating expense items:
Lease buy-out charges related to
branch disposals - - - - 306
Write-off of fixed assets related to
branch disposals - - - - 120
Severance expense relating to branch disposals - - - - 57
Gain on sale of branch real estate - - - - (35)
Other branch rationalization costs - - - 171 10
Litigation Reserve - - - 459 -
------------ ------------ ------------ ------------ ------------
Total non-interest expense 21,179 21,322 20,434 22,084 21,237
============ ============ ============ ============ ============
(1) 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) The Bank only efficiency ratio excludes interest expense on debentures.
(4) Data is adjusted for a 5% stock dividend declared in March 2005.
(5) Earnings per share is computed by dividing net income by the weighted
average number of shares of common stock outstanding.
Page 10
SUN BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET
(Dollars in thousands)
Three months ended September 30, Three months ended September 30,
---------------------------------- ---------------------------------
2005 2004
---------------------------------- ---------------------------------
Average Average Average Average
Balance Interest Yield/Cost Balance Interest Yield/Cost
------- -------- ---------- ------- -------- ----------
Interest-earning assets:
Loans receivable (1), (2)
Commercial and industrial $1,672,481 $ 27,231 6.51 % $1,457,918 $ 22,261 6.11 %
Home equity 134,382 2,049 6.10 115,961 1,114 3.84
Second mortgage 46,350 731 6.31 51,302 846 6.60
Residential real estate 27,634 565 8.18 31,893 604 7.58
Installment 74,220 1,406 7.58 60,039 1,086 7.24
---------- -------- ---------- --------
Total loans receivable 1,955,067 31,982 6.54 1,717,113 25,911 6.04
Investment securities (3) 831,006 6,920 3.33 886,733 7,087 3.20
Interest-bearing deposit with banks 7,414 59 3.18 19,665 44 0.89
Federal funds sold 60,856 522 3.43 57,075 183 1.28
---------- -------- ---------- --------
Total interest-earning assets 2,854,343 39,483 5.53 2,680,586 33,225 4.96
Cash and due from banks 79,296 83,126
Bank properties and equipment 37,220 38,875
Goodwill and intangibles 136,664 116,409
Other assets 51,528 55,946
---------- ----------
Non-interest-earning assets 304,708 294,356
---------- ----------
Total assets $3,159,051 $2,974,942
========== ==========
Interest-bearing liabilities:
Interest-bearing deposit accounts:
Interest-bearing demand deposit $ 906,514 4,571 2.02 % $ 798,397 1,830 0.92 %
Savings deposits 421,059 1,293 1.23 485,133 1,011 0.83
Time deposits 712,596 5,527 3.10 597,233 3,423 2.29
---------- -------- ---------- --------
Total interest-bearing deposit
accounts 2,040,169 11,391 2.23 1,880,763 6,264 1.33
---------- -------- ---------- --------
Borrowed money
Repurchase agreements with customers 86,007 613 2.85 68,534 138 0.81
FHLB Advances 131,364 1,504 4.58 166,985 1,700 4.07
Federal funds purchased 47 1 4.30 - - -
Debentures 77,322 1,331 6.89 76,874 939 4.89
---------- -------- ---------- --------
Total borrowings 294,740 3,449 4.68 312,393 2,777 3.56
Total interest-bearing liabilities 2,334,909 14,840 2.54 2,193,156 9,041 1.65
---------- -------- ---------- --------
Non-interest-bearing demand deposits 516,778 512,643
Other liabilities 14,995 21,403
---------- ----------
Total liabilities 2,866,682 2,727,202
Shareholders' equity 292,369 247,740
---------- ----------
Total liabilities and stockholders'
equity $3,159,051 $2,974,942
========== ==========
Net interest income $ 24,643 $ 24,184
======== ========
Interest rate spread (4) 2.99 % 3.31 %
====== ======
Net interest margin (5) 3.45 % 3.61 %
====== ======
Ratio of average interest-earning assets
to average interest-bearing liabilities 122.25 % 122.23 %
====== ======
(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 34% 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.
Page 11
SUN BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET
(Dollars in thousands)
Nine months ended September 30, Nine months ended September 30,
---------------------------------- ----------------------------------
2005 2004
---------------------------------- ----------------------------------
Average Average Average Average
Balance Interest Yield/Cost Balance Interest Yield/Cost
------- -------- ---------- ------- -------- ----------
Interest-earning assets:
Loans receivable (1), (2)
Commercial and industrial $1,652,621 $ 78,644 6.34 % $1,294,084 $ 58,918 6.07 %
Home equity 130,903 5,300 5.40 96,456 2,752 3.81
Second mortgage 47,969 2,248 6.25 49,950 2,393 6.39
Residential real estate 26,970 1,598 7.90 31,314 1,673 7.12
Installment 71,380 3,946 7.37 55,323 3,120 7.52
---------- -------- ---------- --------
Total loans receivable 1,929,843 91,736 6.34 1,527,127 68,856 6.01
Investment securities (3) 837,579 20,758 3.30 880,257 20,977 3.18
Interest-bearing deposit with banks 6,850 132 2.57 11,696 59 0.67
Federal funds sold 35,819 852 3.17 30,967 266 1.15
---------- -------- ---------- --------
Total interest-earning assets 2,810,091 113,478 5.38 2,450,047 90,158 4.91
Cash and due from banks 82,534 75,693
Bank properties and equipment 37,200 35,558
Goodwill and intangibles 136,894 89,461
Other assets 52,879 64,178
---------- ----------
Non-interest-earning assets 309,507 264,890
---------- ----------
Total assets $3,119,598 $2,714,937
========== ==========
Interest-bearing liabilities:
Interest-bearing deposit accounts:
Interest-bearing demand deposit $ 859,708 10,918 1.69 % $ 780,207 4,852 0.83 %
Savings deposits 432,055 3,668 1.13 416,971 2,432 0.78
Time deposits 687,100 14,812 2.87 542,109 9,638 2.37
---------- -------- ---------- --------
Total interest-bearing deposit
accounts 1,978,863 29,398 1.98 1,739,287 16,922 1.30
---------- -------- ---------- --------
Borrowed money
Repurchase agreements with customers 76,629 1,354 2.36 63,123 249 0.53
FHLB Advances 181,169 5,525 4.07 163,055 5,130 4.19
Federal funds purchased 4,044 89 2.93 4,276 47 1.46
Debentures 77,605 3,705 6.37 73,753 2,560 4.63
---------- -------- ---------- --------
Total borrowings 339,447 10,673 4.19 304,207 7,986 3.50
Total interest-bearing liabilities 2,318,310 40,071 2.30 2,043,494 24,908 1.63
---------- -------- ---------- --------
Non-interest-bearing demand deposits 499,293 437,382
Other liabilities 14,741 25,443
---------- ----------
Total liabilities 2,832,344 2,506,319
Shareholders' equity 287,254 208,618
---------- ----------
Total liabilities and stockholders'
equity $3,119,598 $2,714,937
========== ==========
Net interest income $ 73,407 $ 65,250
======== ========
Interest rate spread (4) 3.08 % 3.28 %
====== ======
Net interest margin (5) 3.48 % 3.55 %
====== ======
Ratio of average interest-earning assets
to average interest-bearing liabilities 121.21 % 119.89 %
====== ======
(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 34% 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.