Sun Bancorp in Mount Laurel, N.J., reported a second-quarter loss due to one-time charges related to its ongoing restructuring efforts.
The $2.9 billion-asset Sun Bancorp reported Thursday a net loss of $24.2 million, or 28 cents per share, compared with net income of $678,000, or one penny per share, a year earlier.
The company recorded roughly $20 million in expenses related to restructuring initiatives that include eliminating roughly 40% of its workforce and closing its retail mortgage business, Sun Home Loans. It is also planning to consolidate four branches and sell seven others. Earlier this year, the company hired Tom O'Brien as chief executive, replacing Thomas Geisel, who ousted in December.
"We are forcefully confronting the legacy challenges here with a strong sense of urgency," O'Brien said in a press release. "The recently announced initiatives, while unfortunately difficult for many stakeholders, have established the foundation needed to bring our efficiency, credit and risk metrics more closely in line with those of our peers."
Net interest income after the provision for loan losses plummeted about 75%, to $5.8 million. Sun recorded a loan-loss provision of $14.8 million, compared with a credit of $1.8 million a year earlier. Noninterest income fell 61%, to roughly $4 million, as mortgage banking revenue plunged more than 90%.
Sun Bancorp said a total of $24.4 million of nonperforming and higher risk consumer loans were moved to held-for-sale, requiring chargeoffs of $4.6 million. The company also sold $71.1 million of problem commercial loans to third-party investors, resulting in a loss of $13 million.
Noninterest expenses increased about 1%, to $33.6 million on higher staff compensation, equipment and occupancy expenses, and data processing fees.
The net interest margin improved seven basis points, to 3.03%, from a year earlier.