[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, Inc. Reports Earnings for Fourth Quarter and 2005
Net Income for 2005 Reaches Record $19.5 Million
Our mission is uncompromising...
...to be the Premier Community Bank in every community we serve
VINELAND, NJ, January 23, 2006 - Sun Bancorp, Inc. (NASDAQ: SNBC) today reported
net income of $4.6 million, or $.24 per share, for the quarter ended December
31, 2005, compared to net income of $4.7 million, or $.24 per share, for the
fourth quarter 2004. Earnings per share data is adjusted for the 5% common stock
dividend declared in March 2005 and paid on April 20, 2005.
Net income for the year ended December 31, 2005, increased 10.8% to a
record $19.5 million, or $1.01 per share, compared to $17.6 million, or $1.01
per share, for the prior year. Prior year net income was favorably impacted by
one-time net income of $844,000 ($.05 per share) from facilities sold under the
Company's branch rationalization program. Excluding this item, net income and
earnings per share increased 16.3% and 5.5%, respectively.
"Sun Bancorp finished 2005 with good momentum and record net income for
the full year, highlighted by an increasing net interest margin and strong loan
growth in the fourth quarter in both our commercial and retail portfolios," said
Thomas A. Bracken, president and chief executive officer of Sun Bancorp, Inc.
and its wholly owned subsidiary, Sun National Bank. "We are especially pleased
with our 9.7% loan growth for the year despite a high level of loan prepayments
approximating $120.0 million and the extremely competitive New Jersey
marketplace. Our loan transaction pipeline going into 2006 continues to be
strong."
--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 4Q 2005 and Year End Results - page two
"Credit quality trends continue to be positive, and again I reinforce
that we will not compromise our underwriting standards in order to generate
higher volume," said Bracken. "Pricing competition for both loans and deposits
continues to be very aggressive in our market, and while our margin increased
for the quarter, improving margin in 2006 is both a goal and challenge."
Bracken added, "We successfully completed our merger with Advantage
Bank on January 19 and look forward to the expanded business prospects in our
two new markets of Hunterdon and Somerset counties."
The following is an overview of the key financial highlights for the
quarter:
o Total assets of $3.102 billion at December 31, 2005, compared to $3.105
billion at September 30, 2005, and $3.054 billion at December 31, 2004.
o Total loans before allowance for loan losses were $2.050 billion at
December 31, 2005, an increase of $88.4 million, or 4.5%, over total loans
at September 30, 2005, and an increase of $180.5 million, or 9.7%, over
December 31, 2004. The linked quarter loan growth represented primarily an
increase in commercial and industrial of $57.9 million, or 3.5%, and an
increase in home equity portfolios of $26.5 million, or 14.5%. The growth
in home equity was the result of a successful loan campaign in the quarter.
o Credit quality trends continued to improve each quarter this year and
remain stable. Total non-performing assets of $11.5 million at December 31,
2005, or .56% of total loans and real estate owned, decreased $5.7 million,
or 33.2%, over December 31, 2004. On a linked quarter basis, total
non-performing assets decreased $2.3 million, or 16.9%.
o Total deposits were $2.472 billion at December 31, 2005, compared to $2.430
billion at December 31, 2004, and $2.508 at September 30, 2005. This is
consistent with our overall balance sheet funding strategy linked to our
relatively short-term investment portfolio.
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Sun Bancorp 4Q 2005 and Year End Results - page three
o The investment portfolio at December 31, 2005, of $729.1 million decreased
$74.3 million, or 9.2%, over the linked quarter and decreased $148.8
million, or 17.0%, over December 31, 2004. This investment portfolio
remains well structured with a relatively short average life of 1.4 years.
As has been our strategy, portfolio liquidity has continued to supplement
deposit funding for loan growth.
o Net interest income (tax-equivalent basis) for the fourth quarter of $24.8
million increased $172,000 over the linked quarter. Net interest margin for
the quarter of 3.54% increased over the linked third quarter margin of
3.45%. Net interest margin for the year ended 2005 of 3.50% compares to
3.59% for 2004.
o Total operating non-interest income for the quarter of $4.5 million
increased 11.0% over the comparable prior year period and is 2.6% under the
linked quarter. The increase over the prior year period continues to be
attributable to Small Business Administration (SBA) lending and commercial
loan derivative income initiatives instituted in 2005. Service charge
income continues to be essentially flat as a result of increased earnings
credit rates earned on analysis accounts.
o Total operating non-interest expenses for the quarter of $21.7 million
increased $274,000, or 1.3%, over the comparable prior year period. On a
linked quarter basis, total operating non-interest expenses increased 2.6%.
The increase over the linked quarter represents primarily the costs
associated to the retail loan campaign of the fourth quarter.
"Overall we are very pleased with our performance in 2005 given the
difficult environment we faced. All of our fundamentals remain very sound and
our focus on loan growth, liquidity, margin, expense control, non-interest
income growth and net income improvement will remain strong in 2006. Our goal is
to build sustainable long-term shareholder value. We are confident that 2006
will move us further along in accomplishing that goal," said Bracken.
--more--
Sun Bancorp 4Q 2005 and Year End Results - page four
Sun Bancorp, Inc. will host a conference call with analysts and
investment professionals on Tuesday, January 24, 2006 at 11:30 a.m. ET.
Interested parties may listen to the live call by dialing 1-800-391-2548 and
giving the verbal passcode: vi149763. Listeners may also access the live Web
cast through the Sun Bancorp Web site at www.sunnb.com. An Internet-based replay
will be available at the Web site for 48 hours following the call.
Sun Bancorp, Inc. is a multi-state bank holding company headquartered
in Vineland, New Jersey. Its primary subsidiary is Sun National Bank, serving
customers through 80 branch locations 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.
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Page 5
SUN BANCORP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (unaudited)
(Dollars in thousands, except per share data)
Three months ended Year ended
December 31, December 31,
------------ ------------
2005 2004 2005 2004
---- ---- ---- ----
Profitability for the period:
Net interest income $ 24,692 $ 24,826 $ 97,515 $ 89,318
Provision for loan losses 520 415 2,310 2,075
Non-interest income 4,399 4,265 18,291 19,119
Non-interest expense 21,728 22,084 84,663 81,152
Income before income taxes 6,843 6,592 28,833 25,210
Net income $ 4,584 $ 4,684 $ 19,521 $ 17,629
======== ======== ========= =========
Return on average assets (1) 0.59% 0.62% 0.63% 0.63%
Return on average equity (1) 6.25% 6.75% 6.76% 7.80%
Return on average tangible equity (1), (2) 11.60% 13.17% 12.82% 14.11%
Net interest margin (1) 3.54% 3.68% 3.50% 3.59%
Efficiency ratio (consolidated) 74.69% 75.91% 73.11% 74.84%
Per share data:
Earnings per common share (3):
Basic $0.25 $0.26 $1.08 $1.08
Diluted $0.24 $0.24 $1.01 $1.01
Average equity to average assets 9.46% 9.15% 9.27% 8.08%
December 31, December 31,
At period-end: 2005 2004
---- ----
Assets $ 3,102,489 $ 3,053,587
Deposits 2,471,648 2,430,363
Loans, net 2,027,753 1,847,721
Investments 729,066 877,877
Borrowings 243,567 254,310
Shareholders' Equity 295,653 279,220
Credit quality and capital ratios:
ALLL to total loans 1.10% 1.18%
Non-performing assets to total loans
and real estate owned 0.56% 0.92%
Total allowance for loan losses to
non-performing loans 223.02% 153.64%
Total Capital (to Risk Weighted Assets) (4):
Sun Bancorp, Inc. 11.13% 10.80%
Sun National Bank 10.52% 10.06%
Tier I Capital (to Risk Weighted Assets) (4):
Sun Bancorp, Inc. 10.16% 9.78%
Sun National Bank 9.55% 9.04%
Leverage Ratio (4):
Sun Bancorp, Inc. 8.20% 7.51%
Sun National Bank 7.70% 6.94%
Book value (3) $16.27 $15.54
Tangible book value (3) $8.85 $8.07
(1) Three 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) Data is adjusted for a 5% stock dividend declared in March 2005.
(4) December 31, 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)
December 31, December 31,
2005 2004
----------- -----------
ASSETS
Cash and due from banks $ 74,387 $ 69,022
Interest bearing bank balances 2,707 1,878
Federal funds sold 8,368 4,002
----------- -----------
Cash and cash equivalents 85,462 74,902
Investment securities available for sale (amortized cost -
$688,073; 12/05, $823,896; 12/04) 676,630 819,424
Investment securities held to maturity 32,445 43,048
Loans receivable (net of allowance for loan losses -
$22,463; 12/05, $22,037; 12/04) 2,027,753 1,847,721
Restricted equity investments 19,991 15,405
Bank properties and equipment, net 36,710 36,830
Real estate owned, net 1,449 2,911
Accrued interest receivable 15,148 12,519
Goodwill 104,891 104,969
Intangible assets, net 29,939 34,753
Deferred taxes, net 6,761 4,626
Bank Owned Life Insurance 55,627 47,179
Other assets 9,683 9,300
----------- -----------
TOTAL ASSETS $ 3,102,489 $ 3,053,587
=========== ===========
LIABILITIES
Deposits $ 2,471,648 $ 2,430,363
Advances from the Federal Home Loan Bank 124,546 144,669
Securities sold under agreements to repurchase - FHLB 60,000 50,000
Securities sold under agreements to repurchase - customers 59,021 59,641
Debentures 77,322 77,322
Other liabilities 14,299 12,372
----------- -----------
Total liabilities 2,806,836 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, 18,168,530; 12/05, 17,205,245; 12/04 18,169 17,205
Additional paid in capital 264,152 244,108
Retained earnings 20,757 21,718
Accumulated other comprehensive loss (7,425) (2,765)
Treasury stock at cost, 90,562 shares at 12/04 - (1,046)
----------- -----------
Total shareholders' equity 295,653 279,220
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,102,489 $ 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 Year
Ended December 31, Ended December 31,
-------------------- -------------------
2005 2004 2005 2004
-------- -------- -------- --------
INTEREST INCOME:
Interest and fees on loans $ 33,420 $ 27,761 $125,156 $ 96,617
Interest on taxable investment securities 6,144 6,373 24,689 24,813
Interest on non-taxable investment securities 239 472 1,378 1,951
Dividends on restricted equity investments 212 144 834 503
Interest on federal funds sold 320 119 1,172 385
-------- -------- -------- --------
Total interest income 40,335 34,869 153,229 124,269
-------- -------- -------- --------
INTEREST EXPENSE:
Interest on deposits 12,029 7,139 41,427 24,061
Interest on borrowed funds 2,154 1,849 9,122 7,275
Interest on debentures 1,460 1,055 5,165 3,615
-------- -------- -------- --------
Total interest expense 15,643 10,043 55,714 34,951
-------- -------- -------- --------
Net interest income 24,692 24,826 97,515 89,318
Provision for loan losses 520 415 2,310 2,075
-------- -------- -------- --------
Net interest income after provision for loan losses 24,172 24,411 95,205 87,243
-------- -------- -------- --------
NON-INTEREST INCOME:
Service charges on deposit accounts 2,174 2,285 8,957 9,043
Other service charges 76 21 279 354
(Loss) gain on sale of fixed assets (58) (7) 45 2,467
Gain on sale of loans 241 108 989 289
(Loss) gain on sale of investment securities (36) 227 773 1,407
Other 2,002 1,631 7,248 5,559
-------- -------- -------- --------
Total non-interest income 4,399 4,265 18,291 19,119
NON-INTEREST EXPENSE:
Salaries and employee benefits 10,823 10,964 42,627 40,177
Occupancy expense 2,895 2,567 11,380 10,608
Equipment expense 1,942 1,944 7,762 7,091
Data processing expense 1,063 1,014 4,119 3,973
Amortization of intangible assets 1,116 1,426 4,497 5,268
Other 3,889 4,169 14,278 14,035
-------- -------- -------- --------
Total non-interest expenses 21,728 22,084 84,663 81,152
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 6,843 6,592 28,833 25,210
INCOME TAXES 2,259 1,908 9,312 7,581
-------- -------- -------- --------
NET INCOME $ 4,584 $ 4,684 $ 19,521 $ 17,629
======== ======== ======== ========
Basic earnings per share (1) $ 0.25 $ 0.26 $ 1.08 $ 1.08
Diluted earnings per share (1) $ 0.24 $ 0.24 $ 1.01 $ 1.01
(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 2005 2004
Q4 Q3 Q2 Q1 Q4
-- -- -- -- --
Balance Sheet at quarter end:
Loans:
Commercial and industrial $ 1,732,202 $ 1,674,263 $ 1,647,980 $ 1,631,717 $ 1,603,868
Home equity 155,561 137,693 134,057 128,045 122,735
Second mortgage 53,881 45,238 46,955 48,643 50,541
Residential real estate 30,162 28,785 26,500 27,630 26,117
Installment 78,410 75,796 73,500 71,549 66,497
----------- ----------- ----------- ----------- -----------
Total loans 2,050,216 1,961,775 1,928,992 1,907,584 1,869,758
Allowance for loan losses (22,463) (22,310) (22,505) (22,237) (22,037)
----------- ----------- ----------- ----------- -----------
Net Loans 2,027,753 1,939,465 1,906,487 1,885,347 1,847,721
Goodwill 104,891 104,891 104,891 104,606 104,969
Intangible assets, net 29,939 31,057 32,174 33,291 34,753
Total Assets 3,102,489 3,105,310 3,140,962 3,050,741 3,053,587
Total Deposits 2,471,648 2,507,565 2,541,214 2,384,948 2,430,363
Advances from the Federal Home Loan Bank 124,546 129,656 134,713 169,717 144,669
Federal funds purchased - - - 2,000 -
Securities repurchase agreements - customers 59,021 86,315 77,488 74,057 59,641
Securities repurchase agreements - FHLB 60,000 - - 50,000 50,000
Total shareholders' equity 295,653 291,560 287,632 281,687 279,220
Quarterly average balance sheet:
Loans:
Commercial and industrial $ 1,680,757 $ 1,672,481 $ 1,649,491 $ 1,617,334 $ 1,526,912
Home equity 144,681 134,382 130,754 126,069 121,287
Second mortgage 46,780 46,350 47,846 49,210 51,539
Residential real estate 29,359 27,634 26,728 26,241 29,001
Installment 77,562 74,220 71,477 67,606 63,810
----------- ----------- ----------- ----------- -----------
Total loans 1,979,139 1,955,067 1,926,296 1,886,460 1,792,549
Securities and other earning assets 825,608 899,276 863,176 868,441 930,823
Total earning assets 2,804,747 2,854,343 2,789,472 2,754,901 2,723,372
Total assets 3,102,434 3,159,051 3,106,121 3,058,645 3,034,531
Non-interest-bearing demand deposits 514,783 516,778 487,508 487,915 531,900
Total deposits 2,510,918 2,556,947 2,461,027 2,387,990 2,448,688
Total interest-bearing liabilities 2,281,743 2,334,909 2,318,221 2,275,907 2,211,670
Total shareholders' equity 293,575 292,369 284,654 281,507 277,710
Capital and credit quality measures:
Total Capital (to Risk Weighted Assets) (1):
Sun Bancorp, Inc. 11.13% 11.14% 10.89% 10.98% 10.80%
Sun National Bank 10.52% 10.55% 10.33% 10.43% 10.06%
Tier I Capital (to Risk Weighted Assets) (1):
Sun Bancorp, Inc. 10.16% 10.16% 9.90% 9.97% 9.78%
Sun National Bank 9.55% 9.57% 9.34% 9.42% 9.04%
Leverage Ratio (1):
Sun Bancorp, Inc. 8.20% 7.84% 7.77% 7.70% 7.51%
Sun National Bank 7.70% 7.41% 7.34% 7.27% 6.94%
Average equity to average assets 9.46% 9.25% 9.16% 9.20% 9.15%
ALLL to total loans 1.10% 1.14% 1.17% 1.17% 1.18%
Non-performing assets to total loans
and real estate owned 0.56% 0.71% 0.74% 0.80% 0.92%
Total allowance for loan losses to
non-performing loans 223.02% 179.60% 176.32% 161.73% 153.64%
Other data:
Net charge-offs (368) (694) (497) (325) (202)
=========== =========== =========== =========== ===========
Non-performing assets:
Non-accrual loans 9,957 11,848 12,662 13,461 13,457
Loans past due 90 days 115 574 102 287 886
Real estate owned, net 1,449 1,437 1,437 1,437 2,911
----------- ----------- ----------- ----------- -----------
Total non-performing assets 11,521 13,859 14,201 15,185 17,254
=========== =========== =========== =========== ===========
(1) December 31, 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 2005 2004
Q4 Q3 Q2 Q1 Q4
-- -- -- -- --
Profitability for the quarter:
Tax-equivalent interest income $ 40,458 $ 39,483 $ 37,854 $ 36,140 $ 35,112
Interest expense 15,643 14,840 13,559 11,672 10,043
Tax-equivalent net interest income 24,815 24,643 24,295 24,468 25,069
Tax-equivalent adjustment 123 127 216 240 243
Provision for loan losses 520 500 765 525 415
Non-interest income excluding security gains,
branch sales and fixed asset sales 4,493 4,612 4,283 4,085 4,045
Security (loss) gain (36) - 809 - 227
(Loss) gain on sale of fixed assets (58) - 3 100 (7)
Non-interest expense excluding amortization of
intangible assets 20,612 20,062 20,205 19,287 20,658
Amortization of intangible assets 1,116 1,117 1,117 1,147 1,426
Income before income taxes 6,843 7,449 7,087 7,454 6,592
Income tax expense 2,259 2,455 2,257 2,341 1,908
Net Income $ 4,584 $ 4,994 $ 4,830 $ 5,113 $ 4,684
============ ============ ============ ============ ============
Financial ratios:
Return on average assets (1) 0.59% 0.63% 0.62% 0.67% 0.62%
Return on average equity (1) 6.25% 6.83% 6.79% 7.27% 6.75%
Return on average tangible equity (1), (2) 11.60% 12.83% 13.15% 13.94% 13.17%
Net interest margin (1) 3.54% 3.45% 3.48% 3.55% 3.68%
Efficiency ratio (consolidated) 74.69% 72.71% 73.08% 71.92% 75.91%
Per share data:
Earnings per common share (3), (4):
Basic $ 0.25 $ 0.28 $ 0.27 $ 0.28 $ 0.26
Diluted $ 0.24 $ 0.26 $ 0.25 $ 0.26 $ 0.24
Book value (3) $ 16.27 $ 16.06 $ 15.86 $ 15.54 $ 15.54
Tangible book value (3) $ 8.85 $ 8.57 $ 8.30 $ 7.93 $ 8.07
Average basic shares 18,109,361 18,141,052 18,131,121 18,010,434 17,961,694
Average fully diluted shares 19,235,997 19,341,580 19,306,440 19,371,080 19,347,621
Operating non-interest income breakdown:
Service charges on deposit accounts 2,174 2,245 2,300 2,238 2,285
Other service charges 76 88 70 45 21
Gain on sale of loans 241 318 89 341 108
Other income 2,002 1,961 1,824 1,461 1,631
------------ ------------ ------------ ------------ ------------
Total operating non-interest income 4,493 4,612 4,283 4,085 4,045
Non-operating income items:
(Loss) gain on sale of investment securities (36) - 809 - 227
Gain (loss) on sale of fixed assets relating
to branch disposals - - - 100 (7)
(Loss) gain on sale of fixed assets (58) - 3 - -
------------ ------------ ------------ ------------ ------------
Non-operating income before tax effect (94) - 812 100 220
------------ ------------ ------------ ------------ ------------
Total non-interest income 4,399 4,612 5,095 4,185 4,265
============ ============ ============ ============ ============
Operating non-interest expense breakdown:
Salaries and employee benefits 10,823 10,701 10,859 10,244 10,964
Occupancy expense 2,895 2,758 2,648 3,079 2,567
Equipment expense 1,942 1,959 1,883 1,978 1,944
Data processing expense 1,063 1,064 1,061 931 1,014
Amortization of intangible assets 1,116 1,117 1,117 1,147 1,426
Other expenses 3,889 3,580 3,754 3,055 3,539
------------ ------------ ------------ ------------ ------------
Total operating non-interest expense 21,728 21,179 21,322 20,434 21,454
Non-operating expense items:
Branch rationalization costs - - - - 171
Litigation Reserve - - - - 459
------------ ------------ ------------ ------------ ------------
Total non-interest expense 21,728 21,179 21,322 20,434 22,084
============ ============ ============ ============ ============
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) Data is adjusted for a 5% stock dividend declared in March 2005.
(4) 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 December 31, Three months ended December 31,
-------------------------------- --------------------------------
2005 2004
-------------------------------- --------------------------------
Average Average Average Average
Balance Interest Yield/Cost Balance Interest Yield/Cost
------- ------------------- ------- -------- ----------
Interest-earning assets:
Loans receivable (1), (2)
Commercial and industrial $1,680,757 $28,271 6.73 % $1,526,912 $23,953 6.28 %
Home equity 144,681 2,317 6.41 121,287 1,323 4.36
Second mortgage 46,780 732 6.26 51,539 799 6.20
Residential real estate 29,359 617 8.41 29,001 552 7.61
Installment 77,562 1,483 7.65 63,810 1,134 7.11
---------- ------- --------- -------
Total loans receivable 1,979,139 33,420 6.75 1,792,549 27,761 6.19
Investment securities (3) 786,702 6,655 3.38 885,380 7,157 3.23
Interest-bearing deposit with banks 6,780 63 3.72 19,878 75 1.51
Federal funds sold 32,126 320 3.98 25,565 119 1.86
---------- ------- --------- -------
Total interest-earning assets 2,804,747 40,458 5.77 2,723,372 35,112 5.16
Cash and due from banks 71,344 81,112
Bank properties and equipment 37,085 36,647
Goodwill and intangibles 135,535 135,431
Other assets 53,723 57,969
---------- ----------
Non-interest-earning assets 297,687 311,159
---------- ----------
Total assets $3,102,434 $3,034,531
========== ==========
Interest-bearing liabilities:
Interest-bearing deposit accounts:
Interest-bearing demand deposit $ 918,700 5,180 2.26 % $ 828,838 2,347 1.13 %
Savings deposits 399,095 1,318 1.32 465,483 1,009 0.87
Time deposits 678,340 5,531 3.26 622,467 3,783 2.43
---------- ------- ---------- -------
Total interest-bearing
deposit accounts 1,996,135 12,029 2.41 1,916,788 7,139 1.49
---------- ------- ---------- -------
Borrowed money
Repurchase agreements with customers 77,680 654 3.37 65,572 221 1.35
FHLB Advances 128,247 1,471 4.59 148,803 1,605 4.31
Federal funds purchased 2,359 29 4.92 3,186 23 2.89
Debentures 77,322 1,460 7.55 77,322 1,055 5.46
---------- ------- ---------- -------
Total borrowings 285,608 3,614 5.06 294,883 2,904 3.94
Total interest-bearing liabilities 2,281,743 15,643 2.74 2,211,671 10,043 1.82
---------- ------- ---------- -------
Non-interest-bearing demand deposits 514,783 531,900
Other liabilities 12,331 13,250
---------- ----------
Total liabilities 2,808,857 2,756,821
Shareholders' equity 293,575 277,710
---------- ----------
Total liabilities and stockholders'
equity $3,102,432 $3,034,531
========== ==========
Net interest income $24,815 $25,069
======= =======
Interest rate spread (4) 3.03 % 3.34 %
==== ====
Net interest margin (5) 3.54 % 3.68 %
==== ====
Ratio of average interest-earning assets
to average interest-bearing liabilities 122.92 % 123.14 %
====== ======
- ------------------------------------------------------------------------------------------------------------------
(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.
SUN BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET
(Dollars in thousands)
Year ended December 31, Year ended December 31,
--------------------------------- --------------------------------
2005 2004
--------------------------------- --------------------------------
Average Average Average Average
Balance Interest Yield/Cost Balance Interest Yield/Cost
------- ------------------- ------- -------- ----------
Interest-earning assets:
Loans receivable (1), (2)
Commercial and industrial $1,659,713 $106,915 6.44 % $1,352,307 $82,871 6.13 %
Home equity 134,375 7,617 5.67 102,661 4,075 3.97
Second mortgage 47,670 2,979 6.25 50,352 3,193 6.34
Residential real estate 27,572 2,215 8.03 30,730 2,225 7.24
Installment 72,938 5,430 7.44 57,447 4,253 7.41
---------- -------- ---------- -------
Total loans receivable 1,942,268 125,156 6.44 1,593,497 96,617 6.06
Investment securities (3) 824,755 27,412 3.32 881,547 28,134 3.19
Interest-bearing deposit with banks 6,833 195 2.85 13,737 134 0.97
Federal funds sold 34,888 1,172 3.36 29,675 385 1.30
---------- -------- ---------- -------
Total interest-earning assets 2,808,744 153,935 5.48 2,518,456 125,270 4.97
Cash and due from banks 79,713 77,050
Bank properties and equipment 37,171 35,828
Goodwill and intangibles 136,552 100,981
Other assets 53,092 62,638
---------- ----------
Non-interest-earning assets 306,528 276,497
---------- ----------
Total assets $3,115,272 $2,794,953
========== ==========
Interest-bearing liabilities:
Interest-bearing deposit accounts:
Interest-bearing demand deposit $ 874,577 16,099 1.84 % $ 792,470 7,200 0.91 %
Savings deposits 423,747 4,986 1.18 429,077 3,440 0.80
Time deposits 684,892 20,342 2.97 562,265 13,421 2.39
---------- -------- ---------- -------
Total interest-bearing deposit
accounts 1,983,216 41,427 2.09 1,783,812 24,061 1.35
---------- -------- ---------- -------
Borrowed money
Repurchase agreements with customers 76,894 2,008 2.61 63,727 471 0.74
FHLB Advances 167,830 6,996 4.17 159,466 6,734 4.22
Federal funds purchased 3,619 118 3.26 3,990 70 1.76
Debentures 77,534 5,165 6.66 74,646 3,615 4.84
---------- -------- ---------- -------
Total borrowings 325,877 14,287 4.38 301,829 10,890 3.61
Total interest-bearing liabilities 2,309,093 55,714 2.41 2,085,641 34,951 1.68
---------- -------- ---------- -------
Non-interest-bearing demand deposits 503,197 460,990
Other liabilities 14,134 22,390
---------- ----------
Total liabilities 2,826,424 2,569,021
Shareholders' equity 288,847 225,932
---------- ----------
Total liabilities and stockholders' equity $3,115,271 $2,794,953
========== ==========
Net interest income $ 98,221 $90,319
======== =======
Interest rate spread (4) 3.07 % 3.29 %
==== ====
Net interest margin (5) 3.50 % 3.59 %
==== ====
Ratio of average interest-earning assets
to average interest-bearing liabilities 121.64 % 120.75 %
====== ======
- -------------------------------------------------------------------------------------------------------------------
(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.