Shares of Sun Bancorp (SNBC) plunged early Wednesday after the Vineland, N.J., company reported a wider-than-expected loss in the first quarter due to ongoing weakness in its loan portfolio.
The $3.1 billion-asset company said that it lost $28.1 million, or 34 cents per share, in the first quarter, compared to a loss of $1.5 million, or two cents per share, in the previous quarter. Analysts polled by Thomson Reuters had expected Sun to roughly break even in the quarter as the company, which had been hard hit by the real estate bust, continued to show progress in selling off problem loans.
Asset quality weakened in the first quarter, however, due to a significant spike in troubled debt restructurings. Nonperforming loans ticked up 6.4%, or $6.9 million, from three months earlier, to $114.6 million and its percentage of nonperforming assets climbed 41 basis points, to 5.27%. As a result, the company more than quadrupled its loan-loss provision from the prior quarter, to $30.7 million.
Sun's stock was down nearly 8% early Wednesday, to $2.95.