Sun Bancorp announces comprehensive restructuring

"We have decided to exit business lines in which the company is not profitable," says new CEO Thomas O'Brien, announcing his intention for Sun Bancorp (SNBC) to become a highly-focused commercial banking platform with high-value commercial products and services.

After identifying those branches which do not fit, the bank has sold off 7 Jersey shore branches with over $180M in combined deposits and over $60M in loans for a deposit premium of 8.765%. The deal is expected to close early next year, and save about $3.1M in expenses annually.

A number of other branches will be consolidated.

The bank will also exit the residential mortgage business as well as commercial specialty lending (healthcare and asset-based).

In total, the bank expects to reduce its workforce by 38%, or 242 full-time employees and realize annual cost savings of about $16.8M. A one-time charge of about $20M will be booked in Q2.

The board also sets a 1:5 reverse stock split, effective August 11.

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