Sun Bancorp, Inc. says loan growth boosted Q2 earnings, but plans closures
During Monday afternoon trading, Sun Bancorp., Inc. (Nasdaq: SNBC) announced net income of $4.9 million, or $0.22 per share, for the second quarter ended June 30. In the same period last year, the company reported net income of $3.8 million, or $0.17 per share. Wall Street analysts were expecting earnings per share of $0.23, according to Thomson Financial.
“We had a second quarter that met our expectations and perhaps even exceeded them a bit, all things considered,” interim CEO Sid Brown said on a conference call. “Momentum continues to be good on the balance sheet.”
The company’s net interest income fell 6% to $23.6 million from $25.1 million in the year-ago period. Income from service charges and fees climbed 24% to $6.3 million, compared with $5.1 million in second quarter 2006. Sun’s total deposits increased 5% to $2.73 billion.
“We have continued to see steady loan growth across all of our markets,” CFO Dan Chila said. “While we have seen some softening in the loans in the residential construction area, we continue to see good demand with strong pipelines in our commercial and small business segment.”
The company is employing a third-party firm to decide branch location strategies. The firm has been working for Sun Bancorp. for about a month and is expected to present preliminary conclusions within a number of weeks, Brown said.
“Let me clarify: this is not an investment banking firm looking to shop or sell off our branches,” Brown said. “This is a market research firm that is assisting us in trying to make the best educated decisions on what our future branch network will look like.”
Sun Bancorp. will be closing two to three braches in the third quarter, he said. Several relocations will also be taking place, Brown said.
Before the start of today’s trading, brokerage firm Sterne Agee downgraded Sun Bancorp. to “hold” from “buy.” Sterne Agee also reduced Sun’s price target to $19 from $21.
In late-afternoon Tuesday trading, shares of Sun Bancorp. were down $0.53, or 3.11%, at $16.53.
