Sun Bancorp, Inc. Announces 2Q 2014 Earnings; One-time Charges for Comprehensive Restructuring Costs; Further Risk Reduction an

      Sun Bancorp, Inc. Announces 2Q 2014 Earnings; One-time Charges for
    Comprehensive Restructuring Costs; Further Risk Reduction and Capital
                                 Improvement

PR Newswire

MOUNT LAUREL, N.J., July 31, 2014

MOUNT LAUREL, N.J., July 31, 2014 /PRNewswire/ --

Second Quarter Highlights

  oAnnounced comprehensive strategic restructuring to improve financial
    performance, reduce costs, risk and operating complexity.
  oOne-time charges of approximately $20 million related to restructuring
    initiatives.
  o$71.1 million of problem commercial loans sold and $24.4 million of
    problem consumer loans moved to held-for-sale at lower of cost or market.
  oSale of problem loans results in non-performing loans ("NPLs")
    held-for-investment declining by 62% to $14.1 million; NPLs
    held-for-investment to total loans held-for-investment fell from 1.8% to
    0.8%. Classified assets fell from $105.6 million to $38.2 million, a
    reduction of 64%.
  oNegotiated and announced the proposed sale of seven Cape May County area
    branch offices and the consolidation of four more locations; $28.5 million
    of loans and $160.8 million of deposits were transferred to held-for-sale.
    Upon settlement after all accounts are identified for sale, the
    transaction is anticipated to include approximately $65 million of loans
    and $180 million of deposits.

Sun Bancorp, Inc. (NASDAQ: SNBC) (the "Company") reported today a net loss
available to common shareholders of $24.2 million, or a loss of $0.28 per
diluted share, for the quarter ended June 30, 2014, compared to a net loss of
$1.9 million, or a loss of $0.02 per diluted share, and net income of $678
thousand, or $0.01 per diluted share, for the first quarter of 2014 and the
second quarter of 2013, respectively. The following are key items and events
that occurred during the second quarter of 2014:

  oSale of $71.1 million of criticized commercial loans to third-party
    investors resulting in a net loss of $13.0 million inclusive of swap
    termination costs and transaction costs.
  oProvision for loan losses of $14.8 million was recorded in the second
    quarter of 2014, primarily due to the commercial loan sales, compared to
    no provision expense in the first quarter of 2014. The allowance for loan
    losses equaled $28.4 million at June 30, 2014, a decrease of $5.4 million
    and $7.1 million from March 31, 2014 and December 31, 2013, respectively.
    The allowance for loan losses equaled 1.53% of gross loans
    held-for-investment and 202.04% of non-performing loans
    held-for-investment at June 30, 2014 as compared to 1.62% and 90.18%,
    respectively, at March 31, 2014 and 1.66% and 93.6%, respectively, at
    December 31, 2013.
  oNon-performing and higher risk consumer loans totaling $24.4 million were
    transferred to held-for-sale at lower of cost or market, requiring
    charge-offs of $4.6 million. The remaining balance of $19.8 million
    includes $4.0 million of non-performing loans.
  oNet interest margin was 3.03% in the second quarter of 2014 compared to
    3.07% in the first quarter of 2014 and 2.96% in the second quarter of
    2013.

On June 30, 2014, the Board of Directors of the Company and Sun National Bank
(the "Bank") approved a comprehensive restructuring plan, which includes,
among other things, the Bank exiting Sun Home Loans, its retail consumer
mortgage banking origination business, and exiting its healthcare and
asset-based lending businesses; the proposed sale of seven branch offices in
the Cape May County area; significant classified asset and operating expense
reductions and declaration of a 1-for-5 reverse stock split. The Company
also announced the consolidation of four additional branch offices, which are
expected to be completed by the fourth quarter of 2014.

Below is a summary of significant balance sheet activity that either occurred
or was authorized by the Company during the second quarter of 2014:

Description             Amount*   Status*
Problem commercial      $71      Sales completed in June 2014
loans
Manufactured housing    $20      Moved to held for sale; closing expected in
loans                            second half of 2014
Home equity loans       $4       Moved to held for sale; closing expected in
                                 second half of 2014
                                 Moved to held for sale; Loans ($29), Net
Branch assets           $34      fixed
                                 assets ($4), Cash ($1). Closing expected in
                                 Q1'2015
Branch deposits         $161     Moved to held-for-sale; closing expected in
                                 Q1'2015
Jumbo residential loans $47      Sales completed in Q2'2014

* Dollars in millions

Below is a summary of significant one-time charges during the second quarter
of 2014:

Description                 Amount*  Description*
                                     Provision ($11), swap terminations ($1)
Commercial loan sale losses $13      and
                                     transaction fees ($1)
Consumer loan losses upon            Moved to held for sale at lower of cost
transfer                    $3       or market;
to held-for-sale                     Charge-offs net of existing reserves.
                                     Restructuring and closure of non-core
Severance and benefits      $3       business
                                     units**
Fixed asset disposals       $0.4     Mortgage operations and branch
                                     consolidation
Lease exit costs            $0.3     Mortgage operations facilities

* Dollars in millions

** The payment of severance and other related benefits is subject to prior
regulatory approval.

"On July 3rd, 2014, we announced a series of decisive remedial and
restructuring initiatives designed to address the Company's long standing
obstacles to earnings, regulatory compliance and overall performance
excellence," said President and CEO Thomas M. O'Brien. "We are forcefully
confronting the legacy challenges here with a strong sense of urgency. The
recently announced initiatives, while unfortunately difficult for many
stakeholders, have established the foundation needed to bring our efficiency,
credit and risk metrics more closely in line with those of our peers. We are
now embarking on the execution of these plans in an effort to achieve goals
that are so important to our long-term success. Notwithstanding the costs of
the restructuring initiatives, all of our capital ratios and liquidity
positions remain strong. While there is a lot of work to do in the execution
of the plan, members of management and the Board are keenly focused on its
successful implementation."

Discussion of Results:

Balance Sheet

The Bank has been reducing the size of its balance sheet over the past few
quarters as it focuses internally on risk reduction and capital ratio
improvement. During the quarter, total assets fell $143.8 million due
primarily to the commercial problem loan sales of $71.1 million and continued
runoff in the commercial loan portfolio. Total assets were $2.89 billion at
June 30, 2014, as compared to $3.04 billion at March 31, 2014 and $3.09
billion at December 31, 2013.

The Bank continues to maintain a high level of liquidity, which enabled it to
reduce the size of its balance sheet during the quarter. Even with the
reduction in total assets, cash and cash equivalents rose to $330.4 million at
June 30, 2014, as compared to $282.1 million at March 31, 2014 and $267.8
million at December 31, 2013. The increase of $48.3 million in the second
quarter of 2014 as compared to the prior quarter was primarily due to the
aforementioned commercial loan sales and commercial loan pay-downs, partially
offset by a decrease in deposits as public funds balances declined.

Gross loans held-for-investment totaled $1.86 billion at June 30, 2014, as
compared to $2.08 billion at March 31, 2014 and $2.14 billion at December 31,
2013. The significant decline is due to the aforementioned commercial loan
sales, the sale of $46 million of portfolio jumbo residential mortgage loans,
the transfer of consumer loans to held-for-sale and commercial loan
pay-downs. The Bank is proactively engaging with its commercial borrowers to
build on its existing relationships with top borrowers in industry segments
where we believe we can excel. As the Bank builds deeper relationships with
its best borrowers, acceptable runoff is occurring in segments where we choose
not to compete or lower our credit standards. This runoff is expected to
continue over the next few quarters.

Given the high level of liquidity throughout 2013 and 2014, the Bank has
intensified its efforts to return to profitability and build its deposit
portfolio mix. The Bank re-priced interest rates on certain deposit accounts
in order to more accurately reflect the current sustained low level of
interest rates. The Bank also experienced planned maturity run-off in
brokered CDs and other jumbo CDs. These efforts caused some attrition in
deposit balances in the past few quarters but the overall mix and
profitability has substantially improved. Deposits were $2.27 billion at June
30, 2014, as compared to $2.57 billion at March 31, 2014 and $2.62 billion at
December 31, 2013. In addition to reclassifying $160.8 million of deposits to
held-for-sale for the planned branch sale, the Bank has experienced a decline
in public funds deposit balances. The total quarterly cost of deposits fell by
three basis points to 0.35% in the past two quarters and the non-interest
demand deposit account ("DDA") mix has risen from 21.4% to 23.7%.

Net Interest Income and Margin

Net interest income decreased $780 thousand from the linked quarter to $20.6
million for the three months ended June 30, 2014. The net interest margin
decreased four basis points to 3.03% for the three months ended June 30, 2014,
from 3.07% for the linked quarter. As compared to the linked quarter, the
average yield on loans was flat at 4.11%, while total interest-earning assets
decreased five basis points to 3.49% for the three months ended June 30, 2014.
The decrease from the linked quarter is due primarily to an increase in the
mix of interest earning cash balances as well as a five basis point decline in
yields on investment securities.

Non-Interest Income

Non-interest income was $4.0 million for the quarter ended June 30, 2014, as
compared to $4.9 million for the quarter ended March 31, 2014. The decrease
from the linked quarter of $971 thousand was primarily attributable to a $1.1
million increase in the negative derivative credit valuation adjustments from
the prior quarter. This change was primarily due to swap termination fees of
$1.4 million recorded in the second quarter of 2014, associated with the
commercial loan sales.

Service charges on deposit accounts and investment products income bounced
back in the second quarter after seasonal and weather-related weakness in
these categories in the first quarter. These fees rose to $2.9 million in the
quarter, which is an increase of 5.8% sequentially. Net mortgage banking
revenue fell $106 thousand to $529 thousand for the quarter ended June 30,
2014, as originations and closings remained weak. This revenue will be
eliminated over time as the Company is closing its mortgage banking
operations.

Non-Interest Expense

Non-interest expense was $33.7 million in the second quarter of 2014, an
increase of $5.8 million compared to the linked quarter. Restructuring-related
expenses in the quarter were $3.3 million, including $2.7 million of severance
and benefit costs, $380 thousand of fixed asset disposal costs and $285
thousand of lease exit costs. In comparison to the linked quarter, increases
in salaries and employee benefits, equipment expense, professional fees, other
real estate owned, and other expense of $3.1 million, $607 thousand, $867
thousand, $558 thousand, and $1.6 million, respectively, were partially offset
by a decrease of $714 thousand in occupancy expense. Salaries and employee
benefits increased primarily as a result of the accrual of severance and
benefit costs associated with the Company's restructuring noted above. Other
expense increased $1.6 million due to loan sale-related transaction costs.
Occupancy expense decreased during the quarter ended June 30, 2014 after
elevated spending in the first quarter due to unusual winter weather related
costs, which was partially offset by restructuring-related lease termination
costs.

Asset Quality

Asset quality improved significantly during the quarter due to the sale of
$71.1 million of problem commercial loans, the movement of $24.4million of
problem consumer loans to held-for-sale at lower of cost or market and
continued workout success. Total non-performing assets fell 52% and were
$19.5 million, or 0.67% of total assets, at June 30, 2014, as compared to
$40.2 million, or 1.32% of total assets, at March 31, 2014 and $40.5 million,
or 1.31% of total assets, at December 31, 2013. Non-performing loans
held-for-investment decreased $23.4 million to $14.1 million at June 30, 2014,
from $37.4 million at March 31, 2014, due primarily to the aforementioned
problem loan sales.

During the second quarter of 2014, there was $14.8 million of provision
expense recorded, as compared to no provision expense in the linked quarter.
The allowance for loan losses was $28.4 million, or 1.53% of gross loans
held-for-investment, at June 30, 2014, as compared to $33.8 million, or 1.62%
of gross loans held-for-investment, at March 31, 2014 and $35.5 million, or
1.66% of gross loans held-for-investment, at December 31, 2013. Net
charge-offs were $20.2 million in the second quarter of 2014, as compared to
net charge-offs in the linked quarter of $1.8 million and net recoveries of
$2.8 million in the second quarter of 2013. Second quarter gross charge-offs
related to loan sale activity totaled $19.0 million. "The level of
non-accrual and classified loan relationships remained stubbornly high as we
ended the first quarter. The result of these loan sales is better clarity
surrounding our credit risk profile," stated Mr. O'Brien. "From an asset
quality perspective, we can now begin to function in a more traditional
operating environment."

Capital

Shareholders' equity totaled $227.7 million at June 30, 2014, compared to
$248.9 million at March 31, 2014 and $245.3 million at December 31, 2013.At
June 30, 2014, the Bank's total risk-based capital ratio, Tier 1 capital ratio
and leverage capital ratio were approximately 14.5%, 13.2%, and 9.1%,
respectively. The Company's tangible equity to tangible assets ratio was 6.6%
at June 30, 2014, as compared to 7.0% at March 31, 2014 and 6.8% at December
31, 2013. At June 30, 2014, the Company's total risk-based capital ratio,
Tier 1 capital ratio and leverage capital ratio were approximately 15.0%,
12.4%, and 8.6%, respectively.

The Company will hold its regularly scheduled conference call on Thursday,
July 31, 2014, at 11:00 a.m. (ET).Participants may listen to the live
webcast through the Company's website at www.sunnationalbank.com. Participants
are advised to log on 10 minutes ahead of the scheduled start of the call.An
Internet-based replay will be available on the Company's website for two weeks
following the call.

About Sun Bancorp

Sun Bancorp, Inc. (NASDAQ: SNBC) is a $2.89 billion asset bank holding company
headquartered in Mount Laurel, New Jersey. Its primary subsidiary is Sun
National Bank, a full service commercial bank serving customers throughout New
Jersey. Sun National 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.sunnationalbank.com.

Cautionary Note Regarding Forward-Looking Statements

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 the successful implementation of
our comprehensive strategic restructuring plan to improve financial
performance and capital, reduce costs, risk and operating complexity, and the
timing of the completion of the transactions contemplated thereby, addressing
the Company's long standing obstacles to earnings, regulatory compliance and
overall performance excellence, having established the foundation needed to
bring our efficiency, credit and risk metrics in line with those of our peers,
building on our existing relationships with top borrowers, returning to
profitability, building the Bank's deposit portfolio mix and reducing
classified assets and expenses. Actual results and trends could differ
materially from those set forth in such statements and there can be no
assurances that our strategic restructuring plan will improve our financial
performance, future capital levels, reduce our costs, reduce our risks or
reduce our operating complexity; that our strategic restructuring plan will be
completed as and in the time frames anticipated; that we will adequately
address long standing obstacles to earnings, regulatory compliance and overall
performance excellence; that we will build the foundation necessary to bring
our efficiency, credit and risk metrics in line with those of our peers; that
we will build on existing relationships with top borrowers and buildthe
Bank's deposit portfolio mix; or that we will return to profitability or
further reduce classified assets or expenses. We caution that such statements
are subject to a number of uncertainties. Factors that could cause actual
results to differ from those expressed or implied by such forward-looking
statements include, but are not limited to: (i) competition among providers of
financial services; (ii) changes in laws and regulations, including without
limitation changes in capital requirements under the federal prompt corrective
action regulations; (iii) changes inbusiness strategy or an inability to
executestrategy due to the occurrence of unanticipated events; (iv) the
failureto complete any or all of the transactions contemplated in the
Company's comprehensive strategic restructuring plan on the terms currently
contemplated; (v) local, regional and national economic conditions and events
and the impact they may have on the Company, the Bank and its customers; (vi)
the ability to attract deposits and other sources of liquidity; (vii) changes
in the financial performance and/or condition of Bank's borrowers; (viii)
changes in the level of non-performing and classified assets and charge-offs;
(ix) changes in estimates of future loan loss reserve requirements based upon
the periodic review thereof under relevant regulatory and accounting
requirements; (x) inflation, interest rate, securities market and monetary
fluctuations; (xi) changes in consumer spending, borrowing and saving habits;
(xii) the ability to increase market share and control expenses; (xiii)
volatility in the credit and equity markets and its effect on the general
economy;(xiv) the effect of changes in accounting policies and practices, as
may be adopted by the regulatory agencies, as well as the Public Company
Accounting Oversight Board, the Financial Accounting Standards Board and other
accounting standard setters; and (xv) those detailed under the headings "Risk
Factors" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Company's Form 10-K for the fiscal year ended
December 31, 2013, the Company's Form 10-Q for the three months ended March
31, 2014, 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 (Unaudited)

This news release references tax-equivalent interest income. 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 June 30, 2014, March
31, 2014, December 31, 2013, September 30, 2013, and June 30, 2013, were $166
thousand, $166 thousand, $167 thousand, $167 thousand, and $175 thousand,
respectively. This release also references tangible book value per common
share. Tangible book value per common share is a non-GAAP financial measure.
Tangible book value per common share is a ratio of tangible equity,
shareholders' equity less intangible assets, to outstanding common shares.
Intangible assets at June 30, 2014, March 31, 2014, December 31, 2013,
September 30, 2013, and June 30, 2013, were $38.4 million, $38.7 million,
$39.0 million, $39.4 million, and $40.0 million, respectively.

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 June
30, 2014, March 31, 2014, December 31, 2013, September 30, 2013, and June 30,
2013.

                           June 30,  March 31,  December  September  June 30,
                            2014      2014       31, 2013  30, 2013   2013
For Three Months Ended:
Net interest income         $ 20,612  $  21,392  $ 21,935  $  22,980  $ 21,776
Effect of tax exempt          166        166       167        167       175
income
Net interest income, tax    $ 20,778  $  21,558  $ 22,102  $  23,147  $ 21,951
equivalent basis

Tangible book value per common share

The following reconciles shareholders' equity to tangible equity by reducing
shareholders' equity by the intangible asset balance at June 30, 2014, March
31, 2014, December, 31, 2013, September 30, 2013, and June 30, 2013.

                         June 30,   March 31,  December   September  June 30,
                         2014       2014       31, 2013   30, 2013   2013
Tangible book value per
common share:
 Shareholders' equity  $ 227,656  $ 248,898  $ 245,337  $ 257,140  $ 261,664
Less: Intangible         38,426     38,709     38,993     39,448     39,988
assets
Tangible equity          $ 189,230  $ 210,189  $ 206,344  $ 217,692  $ 221,676
Common stock             88,762     88,709     88,711     88,618     88,572
Less: Treasury stock     1,596      1,943      1,997      2,068      2,107
Total outstanding shares   87,166     86,766     86,714     86,550     86,465
Tangible book value per  $ 2.17     $ 2.42     $ 2.38     $ 2.52     $ 2.56
common share:



SUN BANCORP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (Unaudited)
(Dollars in thousands, except per share amounts)
                      For the Three Months          For the Six Months Ended
                      Ended
                      June 30,                      June 30,
                        2014          2013          2014           2013
Profitability for the
period:
 Net interest        $  20,612     $   21,776    $  42,004      $ 44,854
income
 Provision for          14,803         (1,883)      14,803        (1,712)
loan losses
 Non-interest           3,977          10,258       8,926         21,140
income
 Non-interest           33,677         33,239       61,565        64,575
expense
(Loss) income           (23,891)       678          (25,438)      3,131
before income taxes
 Net (loss) income
available to common     $  (24,248)   $   678       $  (26,154)    $ 3,131
shareholders
Financial ratios:
 Return on average      (3.25)   %     0.08    %    (1.73)    %   0.19    %
assets^(1)
 Return on average      (38.17)  %     1.03    %    (20.71)   %   2.38    %
equity^(1)
 Return on average
tangible                   (45.00)  %     1.22    %    (24.46)   %   2.81    %
equity^(1),(2)
 Net interest           3.03     %     2.96    %    3.05      %   3.05    %
margin^(1)
 Efficiency ratio       136.96   %     103.76  %    120.88    %   97.85   %
 (Loss) earnings
per common share:
 Basic           $  (0.28)     $   0.01      $  (0.30)      $ 0.04
 Diluted        $  (0.28)     $   0.01      $  (0.30)      $ 0.04
 Average equity to      8.52     %     8.17    %    8.37      %   8.18    %
average assets
                         June 30,                    December 31,
                         2014        2013           2013
At period-end:
 Total assets         $ 2,894,658   $ 3,205,921  $       3,087,553
 Total deposits         2,272,765     2,722,038          2,621,571
 Loans receivable,
net of allowance for       1,827,724     2,110,785          2,102,167
loan losses
 Loans
held-for-sale, at fair     9,410         69,417             20,662
value
 Loans
held-for-sale, at          19,761        -                  -
lower of cost or
market
 Investments            454,051       361,149            457,797
 Deposits               160,769       -                  -
held-for-sale
 Borrowings             68,734        69,071             68,765
 Junior
subordinated               92,786        92,786             92,786
debentures
 Shareholders'          227,656       261,664            245,337
equity
Credit quality and
capital ratios:
 Allowance for loan
losses to gross loans      1.53      %   2.22      %        1.66        %
held-for-
investment
 Non-performing
loans
held-for-investment to
gross loans                0.76      %   3.32      %        1.78        %


held-for-investment
 Non-performing
assets to gross loans
held-for-                  1.02      %   3.51      %        1.87        %
investment,
loans held-for-sale
and real estate owned
 Allowance for loan
losses to
non-performing loans       202.04    %   66.93     %        93.57       %
held-
for-investment
Total capital (to
risk-weighted assets)
^ (3):
 Sun Bancorp,       15.00     %   14.80     %        14.41       %
Inc.
 Sun National       14.45     %   14.05     %        13.65       %
Bank
Tier 1 capital (to
risk-weighted assets)
^ (3):
 Sun Bancorp,       12.43     %   12.91     %        12.34       %
Inc.
 Sun National       13.20     %   12.79     %        12.40       %
Bank
Leverage ratio:
 Sun Bancorp,       8.59      %   9.43      %        8.99        %
Inc.
 Sun National       9.12      %   9.33      %        9.02        %
Bank
 Book value per       $ 2.61        $ 3.03         $     2.83
common share
 Tangible book        $ 2.17        $ 2.56         $     2.38
value per common share
(1) Amounts for the three and six 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 equity
equals average equity less average identifiable intangible assets and goodwill.

(3) June 30, 2014 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)
                                                    June 30,     December 31,
                                                                 2013
                                                    2014
ASSETS
Cash and due from banks                             $ 49,384     $  38,075
Interest-earning bank balances                        281,056       229,687
Cash and cash equivalents                             330,440       267,762
 Restricted cash                                    26,000        26,000
Investment securities available for sale (amortized
cost of $437,559 and                                  437,027       440,097
$452,023 at June 30, 2014 and December 31,
2013, respectively)
Investment securities held to maturity (estimated
fair value of $645 and $692 at                        636           681
 June 30, 2014 and December 31, 2013,
respectively)
Loans receivable (net of allowance for loan losses
of $28,392 and $35,537 at                             1,827,724     2,102,167
June 30, 2014 and December 31, 2013,
respectively)
Loans held-for-sale, at fair value                    9,410         20,662
Loans held-for-sale, at lower of cost or market       19,761        -
Branch assets held-for-sale                           34,058        -
Restricted equity investments, at cost                16,388        17,019
Bank properties and equipment, net                    42,359        49,095
Real estate owned                                     1,327         2,503
Accrued interest receivable                           6,276         7,112
Goodwill                                              38,188        38,188
Intangible assets, net                                238           805
Deferred taxes, net                                   -             4,575
Bank owned life insurance (BOLI)                      78,166        77,236
Other assets                                          26,660        33,651
Total assets                                        $ 2,894,658  $  3,087,553
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits                                            $ 2,272,765  $  2,621,571
Branch deposits held-for-sale                         160,769       -
Securities sold under agreements to repurchase –      670           478
customers
Advances from the Federal Home Loan Bank of New       60,873        60,956
York (FHLBNY)
Obligations under capital lease                       7,191         7,331
Junior subordinated debentures                        92,786        92,786
Deferred taxes, net                                   796           -
Other liabilities                                     71,152        59,094
Total liabilities                                     2,667,002     2,842,216
Shareholders' equity:
Preferred stock, $1 par value, 1,000,000 shares       -             -
authorized; none issued
Common stock, $1 par value, 200,000,000 shares
authorized; 88,757,089
shares issued and 87,161,545 shares
outstanding at June 30, 2014;                         88,757        88,711
88,711,035 shares issued and 86,714,414
shares outstanding at December
31, 2013
Additional paid-in capital                            502,104       506,719
Retained deficit                                      (344,108)     (317,954)
Accumulated other comprehensive loss                  (315)         (7,055)
Deferred compensation plan trust                      (599)         (522)
Treasury stock at cost,1,595,544 shares atJune
30, 2014; and 1,996,621                               (18,183)      (24,562)
shares at December 31, 2013
Total shareholders' equity                            227,656       245,337
Total liabilities and shareholders' equity          $ 2,894,658  $  3,087,553



SUN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in thousands,
except per share amounts)
                               For the Three Months      For the Six Months
                                                         EndedJune 30,
                               EndedJune 30,
                               2014          2013        2014         2013
INTEREST INCOME
Interest and fees on loans   $ 21,067     $  23,945    $ 42,916    $  48,844
Interest on taxable            2,193         1,225       4,443        2,769
investment securities
Interest on non-taxable        308           324         617          718
investment securities
Dividends on restricted        209           217         441          463
equity investments
Total interest income          23,777        25,711      48,417       52,794
INTEREST EXPENSE
Interest on deposits           2,188         2,945       4,469        5,960
Interest on funds borrowed     443           444         879          887
Interest on junior             534           546         1,065        1,093
subordinated debentures
Total interest expense         3,165         3,935       6,413        7,940
Net interest income            20,612        21,776      42,004       44,854
PROVISION FOR LOAN LOSSES      14,803        (1,883)     14,803       (1,712)
Net Interest income after      5,809         23,659      27,201       46,566
provision for loan losses
NON-INTEREST INCOME
Service charges on deposit     2,215         2,250       4,366        4,479
accounts
Mortgage banking revenue,      529           5,601       1,164        9,005
net
Gain on sale of investment     50            -           50           3,487
securities
 Investment products income   715           728         1,332        1,407
BOLI income                    469           486         930          934
Derivative credit valuation    (1,162)       6           (1,200)      (498)
adjustment
Other                          1,161         1,187       2,284        2,326
Total non-interest income      3,977         10,258      8,926        21,140
NON-INTEREST EXPENSE
Salaries and employee          15,992        13,019      28,876       27,311
benefits
Commission expense             811           2,556       1,708        4,597
Occupancy expense              3,552         3,081       7,818        6,657
Equipment expense              2,356         1,830       4,105        3,689
Amortization of intangible     283           541         567          1,462
assets
Data processing expense        1,281         1,027       2,478        2,026
Professional fees              2,353         4,761       3,839        7,408
Insurance expenses             1,358         1,542       2,825        2,972
Advertising expense            523           698         1,109        1,251
Problem loan expense           566           1,023       1,198        1,822
Real estate owned expense,     702           1,255       846          1,489
net
Office supplies expense        285           191         536          420
Other                          3,615         1,715       5,660        3,471
Total non-interest expense     33,677        33,239      61,565       64,575
(LOSS) INCOME BEFORE INCOME    (23,891)      678         (25,438)     3,131
TAXES
INCOME TAX EXPENSE             357           -           716          -
NET (LOSS) INCOME AVAILABLE
TO COMMON                   $ (24,248)   $  678       $ (26,154)  $  3,131
SHAREHOLDERS
Basic (loss) earnings per    $ (0.28)     $  0.01      $ (0.30)    $  0.04
share
Diluted (loss) earnings per  $ (0.28)     $  0.01      $ (0.30)    $  0.04
share
Weighted average shares –    87,089,147   86,323,099   86,915,959  86,284,325
basic
Weighted average shares -    87,089,147   86,356,796   86,915,959  86,357,968
diluted



SUN BANCORP, INC. AND SUBSIDIARIES
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA(Unaudited)
(Dollars in thousands)
                             2014          2014          2013          2013          2013
                             Q2            Q1            Q4            Q3            Q2
Balance sheet at quarter
end:
Cash and cash equivalents    $ 330,440     $ 282,095     $ 267,762     $ 427,583     $ 416,239
Restricted cash                26,000        26,000        26,000        26,000        26,000
Investment securities          454,051       456,724       457,797       425,029       361,149
Loans held-for-investment:
 Commercial             1,363,900     1,519,993     1,587,566     1,636,856     1,676,133
 Home equity           165,671       184,936       188,478       192,135       195,938
 Second mortgage       21,282        23,312        25,279        26,028        27,276
 Residential real       298,063       326,945       305,552       281,537       225,147
estate
 Other                 7,200         28,894        30,829        32,984        34,298
 Total gross        1,856,116     2,084,080     2,137,704     2,169,540     2,158,792
loans held-for-investment
Allowance for loan losses     (28,392)      (33,768)      (35,537)      (48,854)      (48,007)
 Net loans          1,827,724     2,050,312     2,102,167     2,120,686     2,110,785
held-for-investment
                                                                                   
 Loans held-for-sale         29,171        16,048        20,662        18,707        69,417
 Branch assets               34,058        -             -             -             -
held-for-sale
 Goodwill                  38,188        38,188        38,188        38,188        38,188
 Intangible assets, net     238           521           805           1,260         1,800
 Total assets              2,894,658     3,038,467     3,087,553     3,236,321     3,205,921
 Total deposits             2,272,765     2,573,445     2,621,571     2,752,693     2,722,038
 Branch deposits             160,769       -             -             -             -
held-for-sale
Securities sold under
agreements to                  670           471           478           554           562
repurchase-
customers
 Advances from FHLBNY       60,873        60,915        60,956        60,997        61,037
 Obligations under          7,191         7,259         7,331         7,402         7,472
capital lease
 Junior subordinated        92,786        92,786        92,786        92,786        92,786
debentures
 Total shareholders'        227,656       248,898       245,337       257,140       261,664
equity
Quarterly average balance
sheet:
 Loans^(1):
 Commercial           $ 1,480,491   $ 1,560,442   $ 1,621,222   $ 1,671,302   $ 1,719,278
 Home equity            185,710       187,052       190,394       194,622       197,237
 Second mortgage       24,358        24,863        26,142        27,041        28,679
 Residential real       338,028       331,433       312,977       299,667       307,248
estate
 Other                  23,196        25,014        26,134        27,723        28,929
 Total gross        2,051,783     2,128,804     2,176,869     2,220,355     2,281,371
loans
 Securities and other       694,529       677,850       782,200       763,575       680,659
interest-earning assets
 Total interest-earning     2,746,312     2,806,654     2,959,069     2,983,930     2,962,030
assets
 Total assets              2,982,427     3,049,321     3,205,900     3,264,884     3,222,053
 Non-interest-bearing       573,290       559,606       585,530       549,684       531,210
demand deposits
 Total deposits            2,519,901     2,584,588     2,718,905     2,746,820     2,722,646
 Total interest-bearing     2,108,103     2,186,394     2,295,072     2,358,923     2,355,081
liabilities
 Total shareholders'        254,116       250,946       256,783       260,701       263,108
equity
Capital and credit quality
measures:
Total capital (to
risk-weighted assets) ^ (2):
 Sun Bancorp, Inc.      15.00     %   14.87     %   14.41     %   14.72     %   14.80     %
 Sun National Bank      14.45     %   14.08     %   13.65     %   13.96     %   14.05     %
 Tier 1 capital (to
risk-weighted assets) ^ (2):
 Sun Bancorp, Inc.      12.43     %   12.75     %   12.34     %   12.76     %   12.91     %
 Sun National Bank      13.20     %   12.83     %   12.40     %   12.70     %   12.79     %
 Leverage ratio:
 Sun Bancorp, Inc.      8.59      %   9.40      %   8.99      %   9.13      %   9.43      %
 Sun National Bank      9.12      %   9.45      %   9.02      %   9.09      %   9.33      %
 Average equity to          8.52      %   8.23      %   8.01      %   7.99      %   8.17      %
average assets
 Allowance for loan                                                                
losses to total gross loans    1.53      %   1.62      %   1.66      %             %             %
held-for-investment                                             2.25          2.22
 Non-performing loans
held-for-investment to         0.76      %   1.80      %   1.78      %   2.55      %   3.32      %
gross loans
held-for-investment
 Non-performing assets to
gross loans held-
for-investment,        1.02      %   1.91      %   1.87      %   2.76      %   3.51      %
loans held-for-sale and real
estate owned
 Allowance for loan                                                                    
losses to non-performing       202.04    %
loans                                90.18     %   93.57     %   88.19     %   66.93     %
held-for-investment
Other data:
Net (charge-offs) recoveries   (20,179)      (1,768)       (15,452)      123           2,766
Non-performing assets:
 Non-accrual loans $ 13,470      $ 29,387      $ 29,811      $ 44,976      $ 54,031
 Non-accrual loans       4,086         -             -             -             -
held-for-sale
Troubled debt       583           8,017         8,166         10,419        17,693
restructurings, non-accrual
Loans past due 90   -             42            -             -             -
days and accruing
Real estate         1,327         2,728         2,503         5,059         6,743
owned, net
 Total        $ 19,466      $ 40,174        40,480        60,454      $ 78,467
non-performing assets
(1) Average balances include non-accrual loans and loans held-for-sale.

(2) June 30, 2014 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)
                   2014            2014                   2013                   2013              2013
                   Q2              Q1                     Q4                     Q3                Q2
Profitability for
the quarter:
Tax-equivalent     $  23,943       $  24,806              $ 25,667               $ 26,955          $ 25,888
interest income
Interest expense      3,165           3,248                 3,565                  3,808             3,937
Tax-equivalent net    20,778          21,558                22,102                 23,147            21,951
interest income
Tax-equivalent        166             166                   167                    167               175
adjustment
Provision for loan    14,803          -                     2,135                  724               (1,883)
losses
Non-interest          3,977           4,949                 4,742                  5,799             10,211
income
Non-interest
expense excluding
amortization    33,394          27,604                32,002                 32,377            32,651
of intangible
assets
Amortization of       283             284                   455                    540               541
intangible assets
(Loss) income
before income         (23,891)        (1,547)               (7,915)                (4,862)           678
taxes
Income tax expense    357             359                   297                    -                 -
Net (loss) income                                                                 
available to                                                                                         
common            $  (24,248)     $  (1,906)             $                     $                $
shareholders                                                                                         678
                                                            (8,212)                (4,862)
Financial ratios:
Return on average     (3.25)     %    (0.25)           %    (1.02)             %   (0.60)        %   0.08          %
assets ^(1)
Return on average     (38.17)    %    (3.04)           %    (12.79)            %   (7.46)        %   1.03          %
equity ^(1)
Return on average
tangible equity       (45.00)    %    (3.59)           %    (15.10)            %   (8.80)        %   1.22          %
^(1),(2)
Net interest          3.03       %    3.07             %    2.99               %   3.10          %   2.96          %
margin ^(1)
Efficiency ratio      136.96     %    105.87           %    121.67             %   114.38        %   103.77        %
Per share data:
(Loss) income per
common share:
Basic              $  (0.28)       $  (0.02)              $ (0.09)               $ (0.06)          $ 0.01
Diluted            $  (0.28)       $  (0.02)              $ (0.09)               $ (0.06)          $ 0.01
Book value         $  2.61         $  2.87                $ 2.83                 $ 2.97            $ 3.03
Tangible book      $  2.17         $  2.42                $ 2.38                 $ 2.52            $ 2.56
value
Average basic         87,089,147            86,740,847              86,583,363        86,499,587        86,323,099
shares
Average diluted       87,089,147            86,740,847              86,583,363        86,499,587        86,356,796
shares
Non-interest
income:
Service charges on $  2,215        $  2,151               $ 2,263                $ 2,314           $ 2,250
deposit accounts
Mortgage banking      529             635                   1,000                  1,593             5,601
revenue, net
Net gain on sale
of investment         50              -                     -                      2                 (47)
securities
Investment            715             617                   599                    678               728
products income
BOLI income           469             461                   466                    482               486
Derivative credit
valuation             (1,162)         (38)                  (710)                  (380)             6
adjustment
Other income          1,161           1,123                 1,124                  1,110             1,187
 Total
non-interest       $  3,977        $  4,949               $ 4,742                $ 5,799           $ 10,211
income
Non-interest
expense:
Salaries and     $  15,992       $  12,884              $ 13,070               $ 12,656          $ 13,019
employee benefits
 Commission         811             897                   1,098                  2,001             2,556
expense
 Occupancy         3,552           4,266                 3,406                  3,456             3,081
expense
 Equipment         2,356           1,749                 1,871                  1,796             1,830
expense
 Amortization
of intangible         283             284                   455                    540               541
assets
 Data              1,281           1,197                 1,223                  995               1,027
processing expense
 Professional      2,353           1,486                 4,891                  5,947             5,947
fees
 Insurance         1,358           1,467                 1,498                  1,496             1,496
expense
 Advertising       523             586                   903                    676               698
expense
 Problem loan      566             632                   769                    816               1,023
costs
 Real estate       702             144                   529                    252               1,255
owned expense, net
 Office            285             251                   245                    192               191
supplies expense
 Other expense     3,615           2,045                 2,499                  2,094             1,715
Total
non-interest       $  33,677       $  27,888              $ 32,457               $ 32,917          $ 33,239
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 June 30,
                     2014                               2013
                     Average      Income/    Yield/     Average      Income/    Yield/
                     Balance      Expense    Cost       Balance      Expense    Cost
Interest-earning
assets:
Loans receivable
^(1),(2):
Commercial           $ 1,480,491  $ 15,385   4.16   %   $ 1,719,278    18,622   4.33   %
Home equity            185,710      1,777    3.83         197,237      1,911    3.88
Second mortgage        24,358       326      5.35         28,679       432      6.03
Residential real       338,028      3,187    3.77         307,248      2,485    3.24
estate
Other                  23,196       391      6.74         28,929       495      6.84
Total loans            2,051,783    21,066   4.11         2,281,371    23,945   4.20
receivable
Investment             451,477      2,723    2.41         373,311      1,751    1.88
securities^(3)
Interest-earning       243,052      154      0.25         307,348      192      0.25
bank balances
Total
interest-earning       2,746,312    23,943   3.49         2,962,030    25,888   3.50
assets
Non-interest earning
assets:
 Cash and due from    41,196                             44,968
banks
 Restricted cash      26,000                             26,000
 Bank properties      47,586                             49,192
and equipment, net
 Goodwill and
intangible assets,     38,568                             40,256
net
 Other assets         82,765                             99,607
Total
non-interest-earning   236,115                            260,023
assets
Total assets         $ 2,982,427                        $ 3,222,053
Interest-bearing
liabilities:
Interest-bearing
deposit accounts:
Interest-bearing     $ 1,099,385  $ 790      0.29   %   $ 1,244,074    1,094    0.35   %
demand deposits
Savings deposits       264,386      177      0.27         269,624      220      0.33
Time deposits          582,840      1,223    0.84         677,738      1,632    0.96
Total
interest-bearing       1,946,611    2,190    0.45         2,191,436    2,946    0.54
deposit
accounts
Short-term
borrowings:
Securities sold
under agreements to    598          -        -            2,304        1        0.17
repurchase-
customers
Long-term
borrowings:
FHLBNY advances ^(4)   60,887       315      2.07         61,051       318      2.08
Obligations under      7,221        127      7.04         7,504        125      6.66
capital lease
Junior subordinated    92,786       533      2.30         92,786       547      2.36
debentures
Total borrowings       161,492      975      2.41         163,645      991      2.42
Total
interest-bearing       2,108,103    3,165    0.60         2,355,081    3,937    0.67
liabilities
Non-interest bearing
liabilities:

Non-interest-bearing   573,290                            531,210
demand deposits
 Other liabilities    46,918                             72,654
Total non-interest     620,208                            603,864
bearing liabilities
Total liabilities      2,728,311                          2,958,945
Shareholders'          254,116                            263,108
equity
Total liabilities
and shareholders'    $ 2,982,427                        $ 3,222,053
equity
Net interest income               $ 20,778                           $ 21,951
Interest rate spread                         2.89   %                           2.83   %
^(5)
Net interest margin                          3.03   %                           2.96   %
^(6)
Ratio of average
interest-earning
assets to                                   130.27 %                           125.77 %
average
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 June 30, 2014 and 2013 were $166
thousand and $175 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 Six Months Ended June 30,
                     2014                                 2013
                     Average      Income/    Yield/     Average      Income/   Yield/
                     Balance      Expense    Cost       Balance      Expense   Cost
Interest-earning
assets:
Loans receivable
^(1),(2):
Commercial           $ 1,520,246  $ 31,735   4.17   %   $ 1,731,846    37,581   4.34   %
Home equity            186,377      3,539    3.80         200,755      3,817    3.80
Second mortgage        24,609       683      5.55         29,508       860      5.83
Residential real       334,749      6,145    3.67         319,017      5,556    3.48
estate
Other                  24,100       814      6.76         29,665       1,030    6.94
Total loans            2,090,081    42,916   4.11         2,310,791    48,844   4.23
receivable
Investment             454,590      5,541    2.44         400,516      4,035    2.01
securities^(3)
Interest-earning       231,645      292      0.25         243,658      303      0.25
bank balances
Total
interest-earning       2,776,316    48,749   3.51         2,954,965    53,182   3.60
assets
Non-interest earning
assets:
 Cash and due from    41,269                             45,867
banks
 Restricted cash      26,000                             26,000
 Bank properties      48,093                             49,774
and equipment, net
 Goodwill and
intangible assets,     38,709                             40,618
net
 Other assets         85,303                             97,114
Total
non-interest-earning   239,374                            259,373
assets
Total assets         $ 3,015,690                        $ 3,214,338
Interest-bearing
liabilities:
Interest-bearing
deposit accounts:
Interest-bearing     $ 1,124,284  $ 1,597    0.28   %   $ 1,242,974    2,205    0.35   %
demand deposits
Savings deposits       265,837      357      0.27         267,519      435      0.33
Time deposits          595,459      2,515    0.84         683,431      3,321    0.97
Total
interest-bearing       1,985,580    4,469    0.45         2,193,924    5,961    0.54
deposit
accounts
Short-term
borrowings:
Securities sold
under agreements to    502          -        -            2,613        2        0.15
repurchase-
customers
Long-term
borrowings:
FHLBNY advances ^(4)   60,908       628      2.06         61,105       634      2.08
Obligations under      7,257        250      6.89         7,538        251      6.66
capital lease
Junior subordinated    92,786       1,065    2.30         92,786       1,093    2.36
debentures
Total borrowings       161,453      1,943    2.41         164,042      1,980    2.41
Total
interest-bearing       2,147,033    6,412    0.60         2,357,966    7,941    0.67
liabilities
Non-interest bearing
liabilities:

Non-interest-bearing   566,486                            518,973
demand deposits
 Other liabilities    49,631                             74,310
Total non-interest     616,117                            593,283
bearing liabilities
Total liabilities      2,763,150                          2,951,249
Shareholders'          252,540                            263,090
equity
Total liabilities
and shareholders'    $ 3,015,690                        $ 3,214,339
equity
Net interest income               $ 42,337                           $ 45,241
Interest rate spread                         2.91   %                           2.93   %
^(5)
Net interest margin                          3.05   %                           3.06   %
^(6)
Ratio of average
interest-earning
assets to                                    129.31 %                           125.32 %
average
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 six months ended June 30, 2014 and 2013 were $333
thousand and $387 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
                     June 30, 2014                     March 31, 2014
                     Average      Income/   Yield/     Average      Income/   Yield/
                     Balance      Expense   Cost       Balance      Expense   Cost
Interest-earning
assets:
Loans receivable
^(1),(2):
Commercial           $ 1,480,491  $ 15,385   4.16   %  $ 1,560,442  $ 16,349   4.19   %
Home equity            185,710      1,777    3.83        187,052      1,762    3.77
Second mortgage        24,358       326      5.35        24,863       357      5.74
Residential real       338,028      3,187    3.77        331,433      2,958    3.57
estate
Other                  23,196       391      6.74        25,014       423      6.76
Total loans            2,051,783    21,066   4.11        2,128,804    21,849   4.11
receivable
Investment             451,477      2,723    2.41        457,737      2,818    2.46
securities ^(3)
Interest-earning       243,052      154      0.25        220,113      139      0.25
bank balances
Total
interest-earning       2,746,312    23,943   3.49        2,806,654    24,806   3.54
assets
Non-interest earning
assets:
 Cash and due from    41,196                            41,342
banks
 Restricted cash      26,000                            26,000
 Bank properties      47,586                            48,605
and equipment, net
 Goodwill and
intangible assets,     38,568                            38,852
net
 Other assets         82,765                            87,868
Total
non-interest-earning   236,115                           242,667
assets
Total assets         $ 2,982,427                       $ 3,049,321
Interest-bearing
liabilities:
Interest-bearing
deposit accounts:
Interest-bearing     $ 1,099,385  $ 790      0.29   %  $ 1,149,460  $ 808      0.28   %
demand deposits
Savings deposits       264,386      177      0.27        267,305      180      0.27
Time deposits          582,840      1,223    0.84        608,217      1,293    0.85
Total
interest-bearing       1,946,611    2,190    0.45        2,024,982    2,281    0.45
deposit
accounts
Short-term
borrowings:
Securities sold
under agreements to    598          -        -           404          -        -
repurchase-
customers
Long-term
borrowings:
FHLBNY advances ^(4)   60,887       315      2.07        60,929       313      2.05
Obligations under      7,221        127      7.04        7,293        123      6.75
capital lease
Junior subordinated    92,786       533      2.30        92,786       531      2.29
debentures
Total borrowings       161,492      975      2.41        161,412      967      2.40
Total
interest-bearing       2,108,103    3,165    0.60        2,186,394    3,248    0.59
liabilities
Non-interest bearing
liabilities:

Non-interest-bearing   573,290                           559,606
demand deposits
 Other liabilities    46,918                            52,375
Total non-interest     620,208                           611,981
bearing liabilities
Total liabilities      2,728,311                         2,798,375
Shareholders'          254,116                           250,946
equity
Total liabilities
and shareholders'    $ 2,982,427                       $ 3,049,321
equity
Net interest income               $ 20,778                          $ 21,558
Interest rate spread                         2.89   %                          2.95   %
^(5)
Net interest margin                          3.03   %                          3.07   %
^(6)
Ratio of average
interest-earning
assets to                                    130.27 %                          128.37 %
average
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 adjustment for both the three months ended June 30, 2014 and
March 31, 2014 was $166 thousand.
(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.sunnationalbank.com
Contact: Thomas R. Brugger, Executive Vice President and Chief Financial
Officer, (856) 552-6031
 
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