Wilbur Ross-Backed Sun Bancorp Ousts CEO as Losses Mount
Sun Bancorp Inc. (SNBC), the New Jersey lender backed by billionaire investor Wilbur Ross, ousted Thomas X. Geisel as president and chief executive officer as the company tries to return to profitability.
Chairman Sidney R. Brown will serve as interim CEO following Geisel’s departure, which is effective Dec. 2, the Vineland-based company said in a statement yesterday. Sun Bancorp, which has lost three-quarters of its value since the end of 2007, said it has hired search firm Spencer Stuart to find a replacement.
“Having new leadership will allow us to focus and execute on the core objectives of regulatory excellence, growth and sustained shareholder returns,” Ross, a member of the board, said in the statement.
Sun Bancorp hasn’t posted an annual profit since 2008, according to data compiled by Bloomberg. Ross, who specializes in distressed financial companies, oversees a stake of about 25 percent, data show.
Sun Bancorp rose 1.5 percent to $3.40 at 10:18 a.m. in New York. The shares have fallen 5.4 percent this year through the close of trading yesterday.
The change in management may suggest the bank is focused on spurring short-term profit, according to Travis Lan, an analyst at Keefe Bruyette & Woods Inc.
“The board grew impatient with management’s willingness to delay profitability gains,” Lan wrote in a research note yesterday after the termination was announced. “A strategic shift here could generate more short-term profitability gains.”
The lender runs Sun National Bank, holding $3.24 billion in assets and $2.75 billion in deposits with more than 50 outlets in New Jersey, according to the bank’s statements. The company reported a loss of $4.9 million, or 6 cents a share, for the quarter ended Sept. 30, citing a decline in mortgage banking income and a slow economy.
Sun Bancorp has “struggled to materially improve overall profitability and from that regard, it’s not surprising to see a change in management,” according to Matt Breese, an analyst at Sterne Agee & Leach Inc. “In addition to credit costs, expenses have remained elevated.” His firm rates Sun Bancorp’s shares underperform.
Mike Dinneen, a company spokesman, declined to comment beyond the statement.
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