Sun Bancorp Inc. said billionaire investor Wilbur Ross' private equity firm, Sun's founding Brown Family and others have agreed to invest $100 million in equity as the bank grows its New Jersey base.
The lender has posted losses in recent quarters as provisions for loan losses and nonperforming assets have risen from prior-year levels. Unlike many large banks, which were hit hard by delinquent mortgages, regional banks are facing damage from a housing depression that has spread to the greater economy as unemployment remains high and businesses struggle.
Under the deal, the investors will acquire common and preferred stock for $4 a share, an 11% premium to the common stock's Wednesday close. The preferred shares will be converted into common stock upon shareholder approval.
Ross' namesake investment firm is acquiring an estimated 25% stake in Sun Bancorp, the holding company for the 70-branch Sun National Bank.
Shares closed at $3.61 Wednesday and were inactive premarket.