Sun Bancorp, Inc. Reports First Quarter 2013 Results

             Sun Bancorp, Inc. Reports First Quarter 2013 Results

First Quarter Highlights

- Profitable quarter with net income of $2.5 million

- Non-performing loans drop another 11% in Q1 and 39% over the past two
quarters

- Successful workout resolutions generate $1.0 million in net recoveries for
the quarter

- Prepared for rising interest rates by selling $125 million of investments
and $52 million of jumbo fixed rate mortgages

- Solid capital ratios after risk reduction efforts with total risk based
capital ratio of 14.2% and Tier 1 leverage ratio of 9.4%

- Tangible book value increases to $2.59 per share

PR Newswire

VINELAND, N.J., April 24, 2013

VINELAND, N.J., April 24, 2013 /PRNewswire/ --Sun Bancorp, Inc. (NASDAQ:
SNBC) reported today net income available to common shareholders of $2.5
million, or $0.03 per diluted share, for the first quarter ended March 31,
2013, compared to a net loss available to common shareholders of $28.1
million, or a loss of $0.33 per diluted share, for the first quarter of 2012.

The following are key items and events that occurred during the first quarter
of 2013:

  oThe Company successfully closed a previously reported sale of $43.1
    million of primarily distressed legacy commercial real estate loans with a
    book balance of $33.6 million to a third party investor in February 2013
    for proceeds of $20.9 million.
  oProvision expense totaled $171 thousand as compared to $24.2 million in
    the fourth quarter of 2012. The allowance for loan losses equaled $47.1
    million at quarter end, an increase of $1.3 million from December 31,
    2012. The allowance for loan losses equaled 2.09% of gross loans
    held-for-investment and 63.9% of non-performing loans held for investment
    as compared to 2.02% and 55.3%, respectively, at December 31, 2012 and
    2.34% and 45.5%, respectively, at March 31, 2012.
  oNon-interest income increased $4.1 million to $10.9 million as compared to
    the linked quarter primarily due to gains on the sale of available for
    sale securities of $3.5 million.
  oIn March 2013, the Company sold a pool of $51.5 million of jumbo
    residential mortgage loans at a gain of $856 thousand.
  oThe net interest margin equaled 3.16% versus 3.30% in the linked quarter.
    This decrease was driven by a decline in commercial loan yields as well as
    an increase of approximately $141 million in average interest-bearing bank
    balances resulting from the jumbo mortgage sale and the sale of
    available-for-sale investment securities in the first quarter.
  oTotal risk-based capital equaled 14.2% at March 31, 2013, an increase of
    50 basis points from 13.7% at December 31, 2012.

"We continue to make methodical progress in executing on our strategy to
reduce the risk in the balance sheet and grow our commercial and consumer
businesses," stated Thomas X. Geisel, Sun's President and Chief Executive
Officer."We were pleased to regain profitability during the quarter and to
further reduce risk in our loan portfolio, thereby strengthening our
foundation for the future. We will continue to prioritize these efforts and
enhance the profitability of the Bank as the year progresses."

Discussion of Results:

Balance Sheet

  oTotal assets were $3.23 billion at March 31, 2013, as compared to $3.22
    billion at December 31, 2012 and $3.11 billion at March 31, 2012.
  oCash and cash equivalents increased $142.0 million to $311.7 million as
    compared to the linked quarter, primarily due to the increase in interest
    earning bank balances due primarily to the aforementioned jumbo mortgage
    sale and sales of available-for-sale investment securities. Investments
    available-for-sale decreased $117.1 million from $443.2 million at
    December 31, 2012 to $326.1 million at March 31, 2013 due primarily to the
    sale of $124.8 million of securities, of which $94.6 million are pending
    settlement at March 31, 2013.
  oGross loans held-for-investment were $2.25 billion at March 31, 2013, as
    compared to $2.27 billion at December 31, 2012 and $2.23 billion at March
    31, 2012. Compared to the linked quarter, loans held-for-investment
    decreased by $24.6 million due primarily to large pay downs of problem
    loans of $17.2 million and charge-offs of $3.5 million in the first
    quarter.
  oLoans held-for-sale decreased $79.5 million from the linked quarter to
    $41.5 million at March 31, 2013. This was due to the closing of the
    commercial loan sale as well as a net decrease of $57.5 million in the
    residential mortgage loan held-for-sale portfolio.

Net Interest Income and Margin

  oOna tax equivalent basis, net interest income decreased $901 thousand
    over the linked quarter to $23.3 million at March 31, 2013. The net
    interest margin decreased 14 basis points to 3.16% from 3.30% for the
    linked quarter, and decreased 32 basis points as compared to the same
    quarter in 2012. The average yield on interest-earning assets decreased 17
    basis points over the linked quarter from 3.87% to 3.70%. This decrease is
    due to a corresponding decline in loan yields and excess cash. The
    Company held $312 million of cash as of March 31, 2013. The commercial
    loan yields declined four basis points from the linked quarter due to
    lower rates on new originations combined with pay-offs of higher yielding
    legacy loans and a decrease of 18 basis points in home equity line of
    credit yields over the same period due to significantly lower market
    rates. The margin variance from the prior year is due to similar
    pressures in the current interest rate environment.

Non-Interest Income

  oNon-interest income was $10.9 million for the quarter ended March 31,
    2013, compared to $6.8 million for the quarter ended December 31, 2012 and
    $5.5 million for the comparable prior year quarter. The increase from the
    linked quarter was primarily attributable to a gain on sale of available
    for sale securities of $3.5 million recognized in the current quarter as
    compared to a loss of $196 thousand as well as a reduction of $1.2 million
    in derivative credit valuation adjustments for the current quarter as
    compared to the linked quarter.

Non-Interest Expense

  oThe Company incurred $31.3 million of non-interest expense in the first
    quarter of 2013, a decrease of $262 thousand over the linked quarter and
    an increase of $3.8 million from the comparable prior year quarter.
    Professional fees and salaries and benefits increased by $1.3 million and
    $488 thousand, respectively, from the linked quarter. Professional fees
    have increased due to additional compliance related consulting expenses
    incurred during the first quarter. These increases were partially offset
    by decreases in real estate owned costs, other expenses and advertising
    costs of $774 thousand, $500 thousand and $487 thousand, respectively.

Asset Quality

  oThe provision for loan losses for the first quarter of 2013 was $171
    thousand, as compared to $24.2 million in the linked quarter and $30.7
    million in the comparable prior year quarter. The allowance for loan
    losses was $47.1 million at March 31, 2013, or 2.09% of gross loans
    held-for-investment, as compared to theallowance for loan losses to gross
    loans held-for-investment of 2.02% at December 31, 2012 and 2.34% at March
    31, 2012.Recoveries were $4.6 million for the first quarter of 2013
    primarily driven by the payoff of two commercial loans which resulted in
    $3.0 million of recoveries. Charge-offs recorded in the current quarter
    were $3.5 million, as compared to $26.7 million of charge-offs for the
    linked quarter and $20.2 million of charge-offs for the comparable prior
    year quarter.
  oTotal non-performing assets were $82.3 million, or 3.57% of total gross
    loans held-for-investment, loans held-for-sale and real estate owned at
    March 31, 2013, as compared to $100.1 million, or 4.18% and $118.8
    million, or 5.27%, respectively, at December 31, 2012 and March 31, 2012.
    Non-performing loans decreased $21.8 million over the linked quarter to
    $73.8 million at March 31, 2013 from $95.6 million at December 31, 2012
    and decreased $40.8 million from $114.6 million at March 31, 2012. The
    decreases in non-performing loans were due primarily to paydowns and the
    settlement of nonperforming loans moved to held for sale in the fourth
    quarter of 2012, both for $12.7 million.

Capital

  oShareholders' equity totaled $264.3 million at March 31, 2013 compared to
    $262.6 million at December 31, 2012.The Company's tangible equity to
    tangible assets ratio was 7.02% at March 31, 2013, as compared to 6.95% at
    December 31, 2012. At March 31, 2013, the Company's total risk-based
    capital ratio, Tier 1 capital ratio and leverage capital ratio were
    approximately 14.21%, 12.33%, and 9.40%, respectively. At March 31, 2013,
    Sun National Bank's total risk-based capital ratio, Tier 1 capital ratio
    and leverage capital ratio were approximately 13.52%, 12.26%, and 9.34%,
    respectively.

The Company will hold its regularly scheduled conference call on Thursday,
April 25, 2013, at 11:00 a.m. (ET).Participants may listen to the live web
cast through the Sun Bancorp, Inc. web site at www.sunnb.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 website for two weeks following
the call.

Sun Bancorp, Inc. (NASDAQ: SNBC) is a $3.23 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 more than 60 locations in
New Jersey. Sun National Bank has been named one of Forbes Magazine's "Most
Trustworthy Companies" for five years running. 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 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 being prepared for rising
interest rates, reducing risk in the loan portfolio, building the foundation
for the future, reducing problem loans and improving profitability. Actual
results and trends could differ materially from those set forth in such
statements and there can be no assurances that we will be prepared for rising
interest rates, further reduce risk in our loan portfolio, build the desired
foundation for the future, further reduce problem loans or improve
profitability. 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" in the Company's Form 10-K for the
fiscal year ended December 31, 2012 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

This release references tax-equivalent interest income and non-operating
income and expenses.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 March 31, 2013, December 31, 2012 and March 31, 2012 were $212
thousand, $210 thousand and $233 thousand, respectively. Non-operating income
(loss) is also a non-GAAP financial measure. Non-operating income (loss)
includes impairment losses recognized on available for sale securities
included in earnings. There were no non-operating income (loss) items for the
three months ended March 31, 2013, December 31, 2012, September 30, 2012 and
June 30, 2012.

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 March
31:



For Three Months Ended:                    2013     2012
Net interest income                        $ 23,078  $ 24,650
Effect of tax exempt income                  212     233
Net interest income, tax equivalent basis  $ 23,290  $ 24,883



SUN BANCORP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (Unaudited)
(Dollars in thousands, except per share amounts)
                      For the Three Months Ended
                      March 31,                    December 31,
                       2013         2012           2012
Profitability for the
period:
 Net interest                                   
income                 $ 23,078     $ 24,650            23,981
                                                   $
 Provision for        171          30,683            24,154
loan losses
 Non-interest         10,882       5,519             6,815
income
 Non-interest         31,336       27,564            31,598
expense
 Income (loss)        2,453        (28,078)          (24,956)
before income taxes
 Net income (loss)    2,453        (28,078)          (24,956)
 Net income (loss)
available to common    $ 2,453      $ (28,078)     $    (24,956)
shareholders
Financial ratios:
 Return on average    0.31    %    (3.56)    %       (3.13)     %
assets^(1)
 Return on average    3.73    %    (35.97)   %       (34.70)    %
equity^(1)
 Return on average
tangible                 4.42    %    (41.97)   %       (40.61)    %
equity^(1),(2)
 Net interest         3.16    %    3.48      %       3.30       %
margin^(1)
 Efficiency ratio     92.27   %    91.37     %       102.60     %
 Earnings (loss)
per common share:
 Basic          $ 0.03       $ (0.33)       $    (0.29)
 Diluted       $ 0.03       $ (0.33)       $    (0.29)
 Average equity to    8.20    %    9.90      %       9.01       %
average assets
                       March 31,                      December 31,
                       2013        2012               2012
At period-end:
 Total assets       $ 3,227,146   $     3,113,269         3,224,031
 Total deposits       2,723,337         2,631,652         2,713,224
 Loans receivable,
net of allowance for     2,204,436         2,173,426         2,230,287
loan losses
 Loans                41,469            25,034            120,935
held-for-sale
 Investments          335,844           576,457           461,980
 Borrowings           71,344            31,083            70,992
 Junior
subordinated             92,786            92,786            92,786
debentures
 Shareholders'        264,341           283,164           262,595
equity
Credit quality and
capital ratios:
 Allowance for
loan losses to gross
loans                   2.09      %       2.34      %       2.02      %

 held-for-investment
 Non-performing
loans
held-for-investment
to gross loans           3.28      %       5.15      %       3.64      %


held-for-investment
 Non-performing
assets to gross loans
held-for-investment,
                         3.57      %       5.27      %       4.18      %
 loans
held-for-sale and
real estate owned
 Allowance for
loan losses to
non-performing loans     63.87     %       45.52     %       55.33     %
held for

 investment
Total capital (to
risk-weighted
assets)^(3) :
 Sun Bancorp,     14.21     %       14.49     %       13.72     %
Inc.
 Sun National     13.52     %       13.77     %       13.02     %
Bank
Tier 1 capital (to
risk-weighted assets)
^ (3):
 Sun Bancorp,     12.33     %       12.86     %       11.82     %
Inc.
 Sun National     12.26     %       12.51     %       11.76     %
Bank
Leverage ratio:
 Sun Bancorp,     9.40      %       10.21     %       9.30      %
Inc.
 Sun National     9.34      %       9.93      %       9.24      %
Bank
 Book value per     $ 3.06        $     3.30        $     3.05
common share
 Tangible book
value per common       $ 2.59        $     2.78        $     2.57
share
(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
equityequals average equity less average identifiable intangible assets and
goodwill.
(3) March 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)
                                               March 31,
                                                            December 31, 2012
                                               2013
ASSETS
Cash and due from banks                        $ 63,608     $    77,564
Interest-earning bank balances                   248,052         92,052
Cash and cash equivalents                        311,660         169,616
Investment securities available for sale
(amortized cost of $315,810 and
                                                 317,838         443,182
 $439,488 at March 31, 2013 and December 31,
2012, respectively)
Investment securities held to maturity
(estimated fair value of $920 and $960
                                                 881             912
 at March 31, 2013 and December 31, 2012,
respectively)
Loans receivable (net of allowance for loan
losses of $47,124 and $45,873 at
                                                 2,204,436       2,230,287
 March 31, 2013 and December 31, 2012,
respectively)
Loans held-for-sale, at lower of cost or         -               21,922
market
Loans held-for-sale, at fair value               41,469          99,013
Restricted equity investments, at cost           17,125          17,886
Bank properties and equipment, net               49,477          50,805
Real estate owned                                8,472           7,473
Accrued interest receivable                      7,704           8,054
Goodwill                                         38,188          38,188
Intangible assets                                2,341           3,262
Bank owned life insurance (BOLI)                 75,802          76,858
Receivable from sales and maturities of          101,947         -
investments
Other assets                                     49,806          56,573
Total assets                                   $ 3,227,146  $    3,224,031
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits                                       $ 2,723,337  $    2,713,224
Securities sold under agreements to repurchase   2,726           1,968
– customers
Advances from the Federal Home Loan Bank of      61,077          61,415
New York (FHLBNY)
Obligations under capital lease                  7,541           7,609
Junior subordinated debentures                   92,786          92,786
Deferred taxes, net                              828             1,509
Other liabilities                                74,510          82,925
Total liabilities                                2,962,805       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; 88,403,100 shares

 issued and 86,292,929 shares outstanding at    88,403          88,301
March 31, 2013; 88,300,637

 shares issued and 86,193,914 shares
outstanding at December 31, 2012
Additional paid-in capital                       506,773         506,537
Retained deficit                                 (305,558)       (308,011)
Accumulated other comprehensive income           1,200           2,186
Deferred compensation plan trust                 (315)           (256)
Treasury stock at cost2,106,723 shares
atMarch 31, 2013 and December 31,               (26,162)        (26,162)

 2012
Total shareholders' equity                       264,341         262,595
Total liabilities and shareholders' equity     $ 3,227,146  $    3,224,031



SUN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in thousands, except per share
amounts)
                                                  For the Three Months

                                                  EndedMarch 31,
                                                  2013        2012
INTEREST INCOME
Interest and fees on loans                     $  24,899    $ 26,204
Interest on taxable investment securities         1,544       2,542
Interest on non-taxable investment securities     394         434
Dividends on restricted equity investments        246         227
Total interest income                             27,083      29,407
INTEREST EXPENSE
Interest on deposits                              3,015       3,684
Interest on funds borrowed                        443         351
Interest on junior subordinated debentures        547         722
Total interest expense                            4,005       4,757
Net interest income                               23,078      24,650
PROVISION FOR LOAN LOSSES                         171         30,683
Net interest income (loss) after provision for    22,907      (6,033)
loan losses
NON-INTEREST INCOME
Service charges on deposit accounts               2,155       2,668
Other service charges                             74          73
Mortgage banking revenue, net                     3,618       716
Net gain on sale of available for sale            3,487       -
securities
Investment products income                        679         432
BOLI income                                       448         517
Derivative credit valuation adjustment            (504)       (314)
Other                                             925         1,427
Total non-interest income                         10,882      5,519
NON-INTEREST EXPENSE
Salaries and employee benefits                    16,333      14,771
Occupancy expense                                 3,576       3,049
Equipment expense                                 1,859       1,765
Amortization of intangible assets                 921         921
Data processing expense                           999         1,056
Professional fees                                 2,647       479
Insurance expense                                 1,430       1,479
Advertising expense                               553         297
Problem loan expense                              799         1,477
Real estate owned expense, net                    234         81
Office supplies expense                           229         319
Other                                             1,756       1,870
Total non-interest expense                        31,336      27,564
INCOME (LOSS) BEFORE INCOME TAXES                 2,453       (28,078)
INCOME TAX EXPENSE                                -           -
NET INCOME (LOSS) AVAILABLE TO COMMON          $  2,453     $ (28,078)
SHAREHOLDERS
Basic earnings (loss) per share                $  0.03      $ (0.33)
Diluted earnings (loss) per share              $  0.03      $ (0.33)
Weighted average shares – basic                86,245,121   85,776,858
Weighted average shares - diluted              86,370,435   85,776,858



SUN BANCORP, INC. AND SUBSIDIARIES
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA(Unaudited)
(Dollars in thousands)
                      2013         2012         2012          2012          2012
                      Q1           Q4           Q3            Q2            Q1
Balance sheet at
quarter end:
Cash and cash         $ 311,660    $ 169,616      83,854      $ 115,891     $ 87,553
equivalents
Investment securities   335,844      461,980      527,034       549,849       576,457
Loans
held-for-investment:
 Commercial      1,737,079    1,725,567    1,802,060     1,794,830     1,820,054
and industrial
 Home equity    200,084      207,720      212,911       217,768       219,926
 Second          29,235       30,842       32,610        36,429        38,815
mortgage
 Residential     248,875      273,413      224,346       153,373       109,807
real estate
 Other          36,287       38,618       39,069        42,486        36,952
 Total
gross loans             2,251,560    2,276,160    2,310,996     2,244,886     2,225,554
held-for-investment
Allowance for loan      (47,124)     (45,873)     (49,016)      (51,394)      (52,127)
losses
 Net loans   2,204,436    2,230,287    2,261,980     2,193,492     2,173,427
held-for-investment
 Loans                41,469       120,935      60,676        24,672        25,034
held-for-sale
 Goodwill           38,188       38,188       38,188        38,188        38,188
 Intangible assets   2,341        3,262        4,183         5,104         6,025
 Total assets       3,227,146    3,224,031    3,180,263     3,133,487     3,113,269
 Total deposits      2,723,337    2,713,224    2,646,807     2,608,034     2,631,652
 Federal funds        -            -            30,000        -             -
purchased
Securities sold
under agreements to
                        2,726        1,968        3,587         5,454         5,870
 repurchase-
customers
 Advances from       61,077       61,415       16,749        22,080        2,408
FHLBNY
Securities sold
under agreements to
                        -            -            20,000        15,000        15,000
 repurchase-
FHLBNY
 Obligations under   7,541        7,609        7,675         7,740         7,805
capital lease
 Junior
subordinated            92,786       92,786       92,786        92,786        92,786
debentures
 Total               264,341      262,596      287,480       284,768       283,163
shareholders' equity
Quarterly average
balance sheet:
 Loans^(1):
 Commercial    $ 1,744,553  $ 1,788,347  $ 1,805,623   $ 1,815,704     1,849,216
and industrial
 Home equity     204,311      210,085      215,542       218,910       220,411
 Second          30,347       32,442       35,816        38,545        41,346
mortgage
 Residential     330,916      319,427      230,259       155,479       123,567
real estate
 Other           30,410       32,444       33,658        34,765        41,733
 Total       2,340,537    2,382,745    2,320,898     2,263,403     2,276,273
gross loans
 Securities and
other                   607,284      545,781      555,846       583,788       580,349
interest-earning
assets
 Total
interest-earning        2,947,821    2,928,526    2,876,744     2,847,191     2,856,622
assets
 Total assets       3,206,536    3,193,607    3,153,668     3,116,627     3,154,762

Non-interest-bearing    506,600      511,813      504,936       493,707       487,088
demand deposits
 Total deposits     2,703,039    2,660,405    2,642,048     2,604,083     2,621,736
 Total
interest-bearing        2,360,883    2,318,794    2,279,177     2,259,370     2,265,830
liabilities
 Total               263,070      287,698      289,129       285,667       312,281
shareholders' equity
Capital and credit
quality measures:
Total capital (to
risk-weighted assets)
^ (2):
 Sun Bancorp,    14.21%       13.72%       14.30     %   14.61     %   14.49     %
Inc.
 Sun National    13.52%       13.02%       13.63     %   13.90     %   13.77     %
Bank
 Tier 1 capital
(to risk-weighted
assets) ^ (2):
 Sun Bancorp,    12.33%       11.82%       12.71     %   13.00     %   12.86     %
Inc.
 Sun National    12.26%       11.76%       12.37     %   12.64     %   12.51     %
Bank
 Leverage ratio:
 Sun Bancorp,    9.40%        9.30%        10.41     %   10.45     %   10.21     %
Inc.
 Sun National    9.34%        9.24%        10.12     %   10.15     %   9.93      %
Bank
 Average equity to   8.20%        9.01%        9.17      %   9.17      %   9.90      %
average assets
 Allowance for
loan losses to total                                                      
gross loans                                                 %             %             %
                        2.09%        2.02%        2.12          2.29          2.34

held-for-investment
 Non-performing
loans
held-for-investment                                                      
to                      3.28%        3.64%        5.23          4.63          5.15      %
                                                            %             %
 gross loans
held-for-investment
 Non-performing
assets to gross loans
                                                                         

held-for-investment,    3.57%        4.18%        5.32         4.84         5.27      %
loans held-for-sale
and                                                         %             %

 real estate
owned
 Allowance for
loan losses to                                                            
non-performing                                              %             %             %
                        63.87%       55.33%       40.56         49.44         45.52
 loans
held-for-investment
Other data:
Net recoveries          1,080        (26,690)     (4,246)       (1,243)       (20,223)
(charge-offs)
Non-performing
assets:
            $ 57,143     $ 64,660     $ 95,383      $ 79,696      $ 87,847
Non-accrual loans

Non-accrual loans       -            10,224       -             -             -
held-for-sale
Troubled
debt restructurings,    16,640       18,244       25,454        24,256        26,674
non-accrual
 Troubled
debt restructurings,    -            2,499        -             -             -
held-for-sale
Loans past
due 90 days and         -            -            -             -             74
accruing
Real         8,472        7,473        5,513         6,116         4,165
estate owned, net
 Total   82,255       103,100      126,350       110,068       118,760
non-performing assets
(1) Average balances include non-accrual loans and loans held-for-sale

(2) March 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        2012         2012         2012         2012
               Q1          Q4           Q3           Q2           Q1
Profitability
for the
quarter:
Tax-equivalent
interest       $  27,295   $ 28,367     $  28,681    $  29,619    $ 29,641
income
Interest          4,005      4,174         4,135        4,519       4,757
expense
Tax-equivalent
net interest      23,290     24,191        24,546       25,100      24,884
income
Tax-equivalent    212        212           212          217         234
adjustment
Provision for     171        24,154        1,868        510         30,683
loan losses
Non-interest      10,882     6,815         9,588        7,527       5,519
income
Non-interest
expense
excluding
                  30,415     30,677        29,938       29,666      26,643
 amortization
of intangible
assets
Amortization
of intangible     921        921           922          921         921
assets
Income (loss)
before income     2,453      (24,956)      1,194        1,313       (28,078)
taxes
Income tax
expense           -          -             (34)         -           -
(benefit)
Net income        2,453      (24,956)      1,228        1,313       (28,078)
(loss)
Net income
(loss)                                                            
available to   $  2,453    $            $  1,228     $            $
common                       (24,956)                   1,313       (28,078)

 shareholders
Financial
ratios:
Return on
average assets    0.31%      (3.13)   %    0.16    %    0.17    %   (3.56)   %
^(1)
Return on
average equity    3.73%      (34.70)  %    1.70    %    1.84    %   (35.97)  %
^(1)
Return on
average
tangible          4.42%      (40.61)  %    1.99    %    2.17    %   (41.97)  %
equity
^(1),(2)
Net interest      3.16%      3.30     %    3.41    %    3.53    %   3.48     %
margin ^(1)
Efficiency        92.27%     102.60   %    90.97   %    94.38   %   91.37    %
ratio
Per share
data:
Income (loss)
per common
share:
Basic          $  0.03     $ (0.29)     $  0.01      $  0.02      $ (0.34)
Diluted        $  0.03     $ (0.29)     $  0.01      $  0.02      $ (0.34)
Book value     $  3.06     $ 3.05       $  3.34      $  3.31      $ 3.30
Tangible book  $  2.59     $ 2.57       $  2.85      $  2.81      $ 2.78
value
Average basic  86,245,121  86,082,669   86,001,929   85,884,671   85,776,858
shares
Average        86,370,435  86,082,669   86,047,655   85,916,426   85,776,858
diluted shares
Non-interest
income:
Service
charges on     $  2,155    $ 2,414      $  2,848     $  2,730     $ 2,668
deposit
accounts
Other service     74         72            69           80          73
charges
Mortgage
banking           3,618      3,694         4,204        1,865       716
revenue, net
Net gain
(loss) on sale
of available
for               3,487      (196)         -            430         -

 sale
securities
Investment
products          679        606           510          748         432
income
BOLI income       448        488           489          492         516
Derivative
credit            (504)      (1,750)       (198)        (13)        (314)
valuation
adjustment
Other income      925        1,487         1,666        1,195       1,428
 Total
non-interest      10,882     6,815         9,588        7,527       5,519
income
Non-interest
expense:
 Salaries
and employee   $  16,333   $ 15,845     $  16,128    $  15,756    $ 14,771
benefits
 Occupancy     3,576      3,416         3,275        3,271       3,049
expense
 Equipment     1,859      2,005         1,866        1,763       1,765
expense

Amortization      921        921           922          921         921
of intangible
assets
 Data
processing        999        1,138         1,084        1,106       1,056
expense

Professional      2,647      1,389         713          833         524
fees
 Insurance     1,430      1,506         1,375        1,464       1,479
expense

Advertising       553        1,040         464          1,008       297
expense
 Problem       799        776           2.154        1,274       1,477
loan costs
 Real
estate owned      234        1,008         779          490         81
expense, net
 Office
supplies          229        298           302          328         319
expense
 Other         1,756      2,256         1,798        2,373       1,825
expense
Total
non-interest      31,336     31,598        30,860       30,587      27,564
expense
(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 March 31,
                     2013                              2012
                     Average      Income/   Yield/     Average      Income/   Yield/
                     Balance      Expense   Cost       Balance      Expense   Cost
Interest-earning
assets:
Loans receivable
^(1),(2):
Commercial and       $ 1,744,553    18,959   4.35   %  $ 1,849,216  $ 21,275   4.60   %
industrial
Home equity            204,311      1,906    3.73        220,411      2,244    4.07
Second mortgage        30,347       428      5.64        41,346       590      5.71
Residential real       330,916      3,071    3.71        123,567      1,376    4.45
estate
Other                  30,410       535      7.04        41,733       719      6.89
Total loans            2,340,537    24,899   4.26        2,276,273    26,204   4.60
receivable
Investment             428,024      2,285    2.14        550,498      3,420    2.49
securities^(3)
Interest-earning       179,260      111      0.25        29,851       17       0.23
bank balances
Total
interest-earning       2,947,821    27,295   3.70        2,856,622    29,641   4.15
assets
Non-interest earning
assets:
 Cash and due from    72,775                            71,751
banks
 Bank properties      50,363                            54,338
and equipment, net
 Goodwill and
intangible assets,     40,983                            44,666
net
 Other assets         94,594                            127,385
Total
non-interest-earning   258,715                           298,140
assets
Total assets         $ 3,206,536                       $ 3,154,762
Interest-bearing
liabilities:
Interest-bearing
deposit accounts:
Interest-bearing     $ 1,241,861    1,111    0.36   %  $ 1,251,690    1,259    0.40   %
demand deposits
Savings deposits       265,391      215      0.32        262,203      229      0.35
Time deposits          689,187      1,689    0.98        620,755      2,196    1.42
Total
interest-bearing
deposit                2,196,439    3,015    0.55        2,134,648    3,684    0.69

 accounts
Short-term
borrowings:
Federal funds          -            -        -           6,374        6        0.38
purchased
Securities sold
under agreements to
                       2,926        1        0.14        6,669        2        0.12
 repurchase-
customers
Long-term
borrowings:
FHLBNY advances ^(4)   61,160       316      2.07        17,519       214      4.89
Obligation under       7,572        126      6.66        7,834        130      6.64
capital lease
Junior subordinated    92,786       547      2.36        92,786       722      3.11
debentures
Total borrowings       164,444      990      2.41        131,182      1,074    3.27
Total
interest-bearing       2,360,883    4,005    0.68        2,265,830    4,758    0.84
liabilities
Non-interest bearing
liabilities:

Non-interest-bearing   506,600                           487,088
demand deposits
 Other liabilities    75,983                            89,562
Total non-interest     582,583                           576,650
bearing liabilities
Total liabilities      2,943,466                         2,842,480
Shareholders'          263,070                           312,281
equity
Total liabilities
and shareholders'    $ 3,206,536                       $ 3,154,762

 equity
Net interest income               $ 23,290                          $ 24,883
Interest rate spread                         3.02   %                          3.31   %
^(5)
Net interest margin                          3.16   %                          3.48   %
^(6)
Ratio of average
interest-earning
assets to average                            124.86 %                          126.07 %
interest-bearing
liabilities
(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 March 31, 2013 and
2012 were $212 thousand and $233 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
                     March 31, 2013                    December 31, 2012
                     Average      Income/   Yield/     Average      Income/   Yield/
                     Balance      Expense   Cost       Balance      Expense   Cost
Interest-earning
assets:
Loans receivable
^(1),(2):
Commercial and       $ 1,744,553    18,959   4.35   %  $ 1,788,347  $ 19,628   4.39   %
industrial
Home equity            204,311      1,906    3.73        210,085      2,055    3.91
Second mortgage        30,347       428      5.64        32,442       470      5.79
Residential real       330,916      3,071    3.71        319,427      2,959    3.71
estate
Other                  30,410       535      7.04        32,444       559      6.89
Total loans            2,340,537    24,899   4.26        2,382,745    25,671   4.31
receivable
Investment             428,024      2,285    2.14        507,158      2,672    2.11
securities^(3)
Interest-earning       179,260      111      0.25        38,623       24       0.25
bank balances
Total
interest-earning       2,947,821    27,295   3.70        2,928,526    28,367   3.87
assets
Non-interest earning
assets:
 Cash and due from    72,775                            72,129
banks
 Bank properties      50,363                            51,515
and equipment, net
 Goodwill and
intangible assets,     40,983                            41,902
net
 Other assets         94,594                            99,535
Total
non-interest-earning   258,715                           265,081
assets
Total assets         $ 3,206,536                       $ 3,193,607
Interest-bearing
liabilities:
Interest-bearing
deposit accounts:
Interest-bearing     $ 1,241,861    1,111    0.36   %  $ 1,224,254    1,178    0.38   %
demand deposits
Savings deposits       265,391      215      0.32        263,949      228      0.35
Time deposits          689,187      1,689    0.98        660,389      1,737    1.05
Total
interest-bearing
deposit                2,196,439    3,015    0.55        2,148,592    3,143    0.59

 accounts
Short-term
borrowings:
Securities sold
under agreements to
                       2,926        1        0.14        3,250        2        0.25
 repurchase-
customers
Long-term
borrowings:
FHLBNY advances ^(4)   61,160       316      2.07        66,527       332      2.00
Obligation under       7,572        126      6.66        7,639        127      6.65
capital lease
Junior subordinated    92,786       547      2.36        92,786       572      2.47
debentures
Total borrowings       164,444      990      2.41        170,202      1,033    2.43
Total
interest-bearing       2,360,883    4,005    0.68        2,318,794    4,176    0.72
liabilities
Non-interest bearing
liabilities:

Non-interest-bearing   506,600                           511,813
demand deposits
 Other liabilities    75,983                            75,302
Total non-interest     582,583                           587,115
bearing liabilities
Total liabilities      2,943,466                         2,905,909
Shareholders'          263,070                           287,698
equity
Total liabilities
and shareholders'    $ 3,206,536                       $ 3,193,607

 equity
Net interest income               $ 23,290                          $ 24,191
Interest rate spread                         3.02   %                          3.15   %
^(5)
Net interest margin                          3.16   %                          3.30   %
^(6)
Ratio of average
interest-earning
assets to average                            124.86 %                          126.30 %
interest-bearing
liabilities
(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 March 31, 2013 and
December 31, 2012 were $212 thousand and $210 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.

Website: http://www.sunnb.com
Contact: Thomas X. Geisel, President and Chief Executive Officer, (856)
690-4329
 
Press spacebar to pause and continue. Press esc to stop.