Time & Model
Value, growth at reasonable price, contrarian, idiosyncratic research

What Is Sun Bancorp Worth?

Sun Bancorp (NASDAQ:SNBC) is a commercial bank out of New Jersey. A number of months ago, an article argued that SNBC was a decent investment. The premise was that bank consolidation in the northeast and a 2010 Wilbur Ross investment boded well for the stock.

We have quite a different opinion. SNBC is a low quality bank priced at 1.74x tangible book value. The bank has no earnings and a history of credit surprises.

Following actions geared towards a restructuring, deposits have fallen 7% in the first half of the year. We can expect this to fall another 14% further. After the restructuring, the bank will be around 16% smaller. The bank, if everything goes well, will be...

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