"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.