News Release
For Immediate Release
Contact: Dan Chila, EVP, Chief Financial Officer (856) 691-7700
Sun Bancorp, Inc. Reduces Staff;
Announces Related Moves to Cut Costs, Improve Profitability
Our mission is uncompromising...
...to be the Premier Community Bank in every community we serve
VINELAND, NJ, June 26, 2006 - Sun Bancorp, Inc. (NASDAQ: SNBC) President and
Chief Executive Officer Thomas A. Bracken today said that the company has
internally announced a staff reduction across the entire organization of about
8% of the workforce, amounting to an annualized pre-tax cost savings of
approximately $3.5 million. The company expects to record approximately $400,000
in one-time severance related charges ($.01 per share) in the second quarter.
Concurrently, a salary reduction has also been announced for senior executives
and the board of directors.
The company said that it expects to report second quarter earnings per
share in the range of $.18 to $.19 before the above one-time severance related
charges ($.01). Earnings per share data is adjusted for the 5% common stock
dividend declared in April 2006 and paid on May 18, 2006.
"Over the past five years we have invested across all areas of the
company to build a strong foundation in which to operate and grow our banking
franchise," said Bracken. "As our industry and our bank face challenging times
in this economic environment, we are responding decisively. Our focus going
forward must be on increasing market share by retaining and growing our customer
base, and most importantly, enhancing our profitability."
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Sun Bancorp, Inc. o 226 Landis Avenue o Vineland, NJ o 08360
(856) 691-7700 o www.sunnb.com o Member FDIC o Equal Housing Lender
Sun Bancorp - page two
"This staff reduction will affect about 80 positions and is the first
of a series of expense reduction and process improvement initiatives that will
be more fully outlined in the scheduled July 24, 2006 second quarter earnings
release," said Bracken. "We are currently conducting an internal review and
assessment of our operations, which will require additional moves during the
balance of 2006 that are both prudent and necessary to further increase revenue
and reduce the annualized run rate of overhead expenses."
The company also today announced that two major business initiatives
are already underway to create new opportunities to enhance revenue growth in
the retail side of the organization.
o Sun has engaged nationally recognized consultant Anat Bird to develop
a program to build a cohesive, bank-specific sales culture and process
that will create a sustainable competitive advantage for Sun's retail
network. This effort is expected to be completed during the third
quarter.
o In a related move, Sun is in the final stage of a national search for
a senior executive to head its retail business.
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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