A month after announcing plans to cut 8% of its work force, Sun Bancorp Inc. in Vineland, N.J., said Monday that it will close or sell five of its 80 branches by yearend.
The move is expected to save $1 million a year, Sun said in a news release. The $3.2 billion-asset company also said that it expects to save $1 million in 2007 by negotiating new contracts with vendors, and that it is implementing initiatives that will increase fee income by $1.4 million a year.
Sun announced in the same release that its second-quarter net income fell 21% year over year, to $3.8 million. That includes a $400,000 pretax charge to cover severance costs. Earnings per share fell 25%, to 18 cents.
Though loan growth was strong - 18%, to nearly $2.3 billion - deposits rose just 1.8% and noninterest expenses, excluding the $400,00 charge, rose nearly 9%. As a result, Sun's profitability ratios suffered.
