SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A NO. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
November 20, 1997
SUN BANCORP, INC.
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(Exact name of Registrant as specified in its Charter)
New Jersey 0-20957 52-1382541
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(State or other jurisdiction (SEC File No.) (IRS Employer
of incorporation) Identification
Number)
226 Landis Avenue, Vineland, New Jersey 08360
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 691-7700
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Not Applicable
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(Former name or former address, if changed since last Report)
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SUN BANCORP, INC.
INFORMATION TO BE INCLUDED IN REPORT
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Item 2. Acquisition or Disposition of Assets.
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On November 20, 1997, effective at the close of business, Sun National
Bank (the "Bank"), the wholly-owned banking subsidiary of Sun Bancorp, Inc. (the
"Registrant"), acquired certain assets and assumed certain liabilities of eleven
branch offices located in New Jersey, certain loans and approximately $156
million of deposits from The Bank of New York ("Seller"). This acquisition was
the subject of the Current Report on Form 8-K dated May 20, 1997, previously
filed by the Registrant with the Commission and amended hereby.
In this purchase and assumption transaction, the Bank assumed
approximately $156.2 million in deposits (including accrued interest), and
acquired certain assets consisting principally of real estate (branches),
banking equipment, and loans in the principal amount of approximately $29.8
million. The Bank assumed the real estate leases for the leased branches.
In accordance with the Agreement, Seller paid cash to the Bank equal to
the amount of the deposits (including accrued interest) assumed, net of a $15.1
million deposit premium which forms the consideration for the transaction.
Additionally, the Bank paid approximately $4.5 million to Seller for the real
estate, banking equipment and other assets purchased. The Bank's source of funds
was cash on hand. The purchase price was determined through arms-length
negotiation with Seller. The acquisition was accounted for under the purchase
method of accounting.
The acquired branches are being operated by the Bank as branch banking
offices used in its banking business. As the result of this acquisition, the
Bank currently operates 38 branch offices in Atlantic, Burlington, Cape May,
Cumberland, Mercer, Ocean and Salem counties, in New Jersey. This acquisition is
consistent with the Registrant's strategic goal of growing its market share
within its market area and reaching into adjacent market areas, through
low-cost, fill-in or market-extension acquisitions.
Although the assets acquired consisted principally of cash, the
approximate $15.1 million of goodwill will change the Registrant's risk-based
capital ratios and leverage ratio. Assuming the transaction and the Registrant's
recent common stock offering had been consummated at September 30, 1997, the
Registrant's pro forma Tier 1, Leverage and Total risks-based capital ratios
would have been 8.65% , 5.42% and 11.61%, respectively. All ratios remain above
the levels necessary for the Registrant to be considered "well capitalized"
under applicable regulations.
The acquisition of the Sellers branches improved the liquidity of the
Registrant and the Bank due to the fact that $111.7 million of cash was received
in addition to branch cash. While a portion of this cash was used to pay down
short term borrowings and purchased federal funds, most of the cash was invested
in short term investment securities pending deployment by the Bank into earning
assets in the ordinary course of operating its banking business.
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Management of the Registrant is unable to predict with any certainty the
impact of the branch acquisition on the Registrant's future financial results.
Although management believes there are opportunities to reduce noninterest
expense through operational and administrative synergies and to achieve lower
funding costs, there will also be systems conversion costs, marketing campaign
expenses, and expenses of revamping certain acquired branches. Further,
management will be challenged to effectively and profitably deploy the cash
received in the transaction into earning assets, principally loans. Goodwill
resulting from the branch acquisition will be amortized over a period of time
ranging up to seven years.
Item 7. Financial Statements and Exhibits.
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(a) Financial statements of businesses acquired.
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The audited statement of assets acquired and liabilities assumed, and
related notes thereto, is incorporated herein by reference to Exhibit 99.2
hereto. Statements of income and cash flows are not available to the Registrant
without unreasonable effort and expense and, pursuant to SEC Rule 12b-21, are
not included herein. Further, due to the insufficient continuity of the acquired
branches' operations prior to and after the acquisition, including the lending
and investment activities of the acquired branches, statements of income and
cash flows are not relevant and are not applicable. Management's Discussion and
Analysis of Financial Condition and Results of Operations as of September 30,
1997, is also incorporated herein by reference to Exhibit 99.2 hereto.
(b) Pro forma financial information.
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An unaudited pro forma combined condensed balance sheet as of September
30, 1997, and unaudited pro forma combined condensed statements of income for
the nine months ended September 30, 1997, and for the fiscal year ended December
31, 1996, are incorporated herein by reference to Exhibit 99.3 hereto. The
unaudited pro forma combined condensed balance sheet reflects the historical
balance sheet of the Registrant as of September 30, 1997, and the assets
acquired and liabilities assumed as of November 20, 1997, after giving effect to
the acquisition on a purchase accounting basis as if it had occurred on
September 30, 1997. The unaudited pro forma combined condensed statements of
income reflect the historical statements of income of the Registrant and the
results of operations of the assets acquired and the liabilities assumed (based
on the assumptions set forth in the notes thereto), after giving effect to the
acquisition on a purchase accounting basis as if it had occurred at the
beginning of the reporting periods.
The pro forma financial information is provided for informational purposes
only. The pro forma financial information presented is not necessarily
indicative of actual results that would have been achieved had the acquisition
been consummated on September 30, 1997, or at the beginning of the periods
presented, and is not indicative of future results. The pro forma financial
information should be read in conjunction with the audited financial statements
and the notes thereto of the Registrant included in the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996, and the
unaudited interim financial statements and the notes thereto of the Registrant
included in the Registrant's Quarterly Reports on Form 10-Q for the quarter
ended September 30, 1997, each of which has been previously filed with the
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Commission. Management of the Registrant believes that such unaudited quarterly
financial information includes all adjustments (which consist solely of
recurring accruals) necessary for a fair presentation of such results for such
interim period. Results presented for the interim period are not necessarily
indicative of results that may be expected for any other interim period or for
the full year.
(c) Exhibits.
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2.1 - Agreement dated June 4, 1997, between the Registrant and First
Union, relating to First Union branches. (Incorporated by reference to Exhibit
99.1 to the Registrant's Current Report on Form 8-K dated May 20, 1997).
2.3 - Consent of Deloitte & Touche LLP.*
99.1 - Press Release dated June 5, 1997, of Sun Bancorp, Inc.
(Incorporated by reference to Exhibit 99.2 to the Registrant's Current Report in
Form 8-K, dated May 20, 1997).
99.2 - Statement of Assets Acquired and Liabilities Assumed as of November
20, 1997, related notes thereto, report of independent certified public
accountants thereon, and Management's Discussion and Analysis of Financial
Condition and Results of Operations.*
99.3 - Pro Forma Financial Information.*
99.4 - Press Release dated November 20, 1997, of Sun Bancorp, Inc.
announcing consummation of the Seller branch acquisition.
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* At the time of the filing of this report, it is impracticable to file the
required financial statements. Pursuant to Item 7(a)(4) of Form 8-K, the
required financial statements will be filed within 60 days after the date in
which this report is filed.
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description Page
<S> <C> <C>
2.1 Agreement dated June 4, 1997, between the Registrant and
Seller, relating to Seller's branches. (Incorporated by
reference to Exhibit 99.1 to the Registrant's Current
Report on Form 8-K dated May 20,
1997).
23 Consent of Deloitte & Touche LLP.*
99.1 Press Release dated June 5, 1997, of
Registrant (Incorporated by reference to
Exhibit 99.2 to the Registrant's Current
Report on Form 8-K dated May 20, 1997).
99.2 Statement of Assets Acquired and Liabilities Assumed as
of November 20, 1997, related notes thereto, report of
independent certified public accountants thereon, and
Management's Discussion and Analysis of Financial
Condition and Results of Operations.*
99.3 Pro Forma Financial Information.*
99.4 Press Release dated November 20, 1997, of Sun Bancorp, Inc.
announcing consummation of Seller's branch acquisition.
</TABLE>
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* At the time of the filing of this report, it is impracticable to file
the required financial statements. Pursuant to Item 7(a)(4) of Form 8-K,
the required financial statements will be filed within 60 days after the
date in which this Report is filed.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SUN BANCORP, INC.
Date: December 5, 1997 By: /s/ Robert F. Mack
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Robert F. Mack
Chief Financial Officer
(Duly Authorized Representative)
EXHIBIT 99.4
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SUN BANCORP, INC. LETTERHEAD
NEWS RELEASE NEWS RELEASE NEWS RELEASE NEWS RELEASE
***FOR IMMEDIATE RELEASE***
FOR MORE INFORMATION, CONTACT: Robert F. Mack (609) 691-7700
Vineland, N.J....................November 20, 1997 Page 1 of 2
SUN BANCORP, INC. PURCHASES ELEVEN BANK OF NEW YORK BRANCHES
Sun Bancorp, Inc. (Nasdaq National Market Symbol "SNBC"), the Vineland New
Jersey bank holding company of Sun National Bank announced today that Sun
National Bank had completed the purchase of eleven New Jersey branch offices and
related deposits from The Bank of New York. The purchase includes the assumption
of approximately $164 million in deposits, the acquisition of approximately $18
million in loans and certain real estate and equipment related to the eleven
branches. The branches are located in Atlantic, Mercer, Middlesex and Somerset
Counties, New Jersey.
"We are pleased to have this opportunity to strengthen our presence in Atlantic
and Mercer Counties and to expand into Middlesex and Somerset Counties,"
commented Bernard A. Brown, Chairman of both Sun Bancorp and Sun National Bank.
"The completion of this transaction means that Sun now has thirty-eight
financial service centers serving southern and central New Jersey," he added.
"Sun has developed a reputation for being a community bank that focuses on the
needs of its customers." remarked Philip W. Koebig, III, Executive Vice
President of Sun Bancorp, Inc. and President and Chief Executive Officer of Sun
National Bank. "This is an exciting opportunity for our new customers to receive
a continuation of a wide range of products and services, while also giving them
the personalized attention of a community bank."
Koebig also commented that this is the seventh, and the third this year, in a
series of purchases during the past three and one-half years that have continued
to fulfill Sun's strategic growth goals. During that period of time, the total
assets of Sun have grown from $113 million at December 31, 1994 to total assets
of about one billion dollars following the completion of this transaction. Sun
has previously announced that it had signed a definitive agreement to purchase
the Eatontown, New Jersey branch from First Savings Bank, with deposits of
approximately $28 million. That acquisition is subject to regulatory approval,
and is expected to be completed during the first quarter of 1998.
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Sun National Bank currently has thirty-eight financial service centers in ten
southern and central New Jersey counties, servicing the retail and commercial
markets. Its deposits are insured up to legal limits by the F.D.I.C.
Sun Bancorp, Inc. common stock is listed on the Nasdaq National Market under the
symbol SNBC. Its Trust Preferred Securities are listed on the Nasdaq National
Market under the symbol SNBCP.
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