Sun Bancorp (SNBC) in Mount Laurel, N.J., has provided more details on its sweeping restructuring initiative.
The $3 billion-asset company said last week that it would close or sell several branches, exit multiple business and cut 242 jobs, or nearly 40% of its work force, in an effort to reduce annual costs by nearly $17 million. Sun said it expected to record a $20 million change in the second quarter to reflect the changes.
Sun disclosed in a regulatory filing Tuesday that $3.4 million of the charges are tied to branch sales and the shutdown of its consumer mortgage origination business. Specifically, $2.1 million of those costs are tied to severance payments, while $600,000 is related to employee termination benefits, subject to regulatory approval. Sun also said it expects to record roughly $900,000 in writeoffs tied to software and equipment associated with its exit from retail mortgages.
The company said last week that unit Sun Home Loans had already stopped accepting new applications. Its Tuesday filing added that the company expects to completely exit the business by the end of this year.
Sun also provided more details on its June sale of $71.4 million of individual commercial loans, noting that about $21 million of the loans were classified as nonaccrual. The company brought in $61.1 million from the sale, explaining its net loss of $12 million from the disposition.