When Sun Bancorp says it is restructuring, it means it.

The Vineland, N.J., company’s “midyear report” issued this week unveils nine initiatives it says will put it in a better position for asset and deposit growth. These include raising loan-loss reserves, merging subsidiaries, reorganizing business lines, and completing a deal to buy a small building and loan institution.

“We wanted to put out a release of the status of our initiative and where we stood on everything rather than one piece at time,” said Thomas Bracken, a longtime New Jersey banker who became president of $1.95 million-asset Sun four months ago and led the development of the nine-point plan.

The company has not been losing money, but its earnings have fallen off and its chargeoffs have soared. A big reason is expansion that took its branch count from six in 1994 to 73 in 1999; it now has 72 branches, all in New Jersey and Delaware.

“Basically, they grew too fast and took on too much debt,” said Richard Weiss, an analyst with Janney Montgomery Scott LLC in Philadelphia.

Sun had an especially trying first quarter. Though it reported earnings of $1.3 million, it took a $700,000 charge to cover severance costs and some bad loans. It also announced informal agreements with federal regulators to revise various policies and procedures.

Sun said it will report a $3.8 million charge when it issues its second-quarter earnings July 23. The bulk of the charge stems from a $3.7 million increase in loan-loss provisions, to $14.1 million. That equals about 1.31% of its loans, which analysts said is far more conservative than the 1.03% it reported last year at the same time.

Anthony Polini, an analyst with Advest Inc. in New York, said Sun is signaling that it is poised to “go on the offensive.” Because of dwindling earnings — $14.1 million last year, against $15.1 million in 1999 — “they have been in the defensive mode for the last 12 months,” he said. “Now they are ready to move aggressively forward.”

Mr. Bracken said Sun, which opened two New Jersey branches in the second quarter, is committed to improving its branch network by expanding it into some areas and closing or selling less-profitable branches.

To that end it plans by yearend to consolidate two institutions, in Vineland and in Wilmington, Del., that share the name Sun National Bank. This move is being facilitated through the purchase of the Delaware City Building & Loan Association, a $400,000-asset institution that is to be converted to a Sun National Bank branch upon the closing of the sale, which is expected to happen this year.

“We want to make more of the branch network and hope to move into some good geographical locations that will get us on sound footing,” Mr. Bracken said.

Sun also said this week that it had retained the consulting firm Alex Sheshunoff Management Services to review its technology and risk management plans. And it has reorganized into three lines — commercial, business, and community banking — and established six regional banking groups. The heads of those groups have been given more local-level decision-making authority than Sun previously granted.

Analysts say the changes are consistent with Mr. Bracken’s conservative philosophy. The streamlined Sun “has a lot of layers for a $2 billion operation,” Janney Montgomery Scott’s Mr. Weiss said. “I think it is much better this way.”

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