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)
September 9, 1999
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 September 9, 1999, 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
fourteen branch offices, certain account loans and $231.6 million of deposits of
First Union National Bank, Charlotte, North Carolina ("First Union"), a national
banking association, pursuant to a Purchase and Assumption Agreement (the
"Agreement") between the Registrant and First Union dated May 10, 1999. This
acquisition was the subject of the Current Report on Form 8-K dated May 10,
1999, previously filed by the Registrant with the Commission and amended hereby.
In this purchase and assumption transaction, the Bank assumed
approximately $231.6 million in deposits (including accrued interest), and
acquired certain assets consisting principally of real estate (branches),
banking equipment, and account loans in the principal amount of approximately
$51,000. The Bank assumed the real estate leases for the leased branches.
In accordance with the Agreement, First Union paid cash to the Bank
equal to the amount of the deposits (including accrued interest) assumed, net of
a $23.7 million deposit premium which forms the consideration for the
transaction. Additionally, the Bank paid approximately $4.7 million to First
Union 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 First Union. The acquisition was accounted
for under the purchase method of accounting.
Due to the overlap with the Bank's existing financial service center
locations, six of the acquired branches are being consolidated with the Bank's
existing financial service centers to reduce the associated operating expenses.
As the result of this acquisition, the Bank will provide community banking
services through 71 financial service centers in New Jersey and in the
contiguous New Castle County market in Delaware. 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.
Assuming the transaction had been consummated at June 30, 1999, after
giving effect to the issuance of the Registrant of common stock in July 1999,
the utilization of the proceeds from that issuance and the investment of cash
acquired in the First Union transaction pending deployment into earning assets,
the pro forma effect of the transaction on the Registrant's capital ratios is as
follows: (1) Tier 1 and Leverage capital ratios are increased from 7.16% and
4.75% to10.06% and 5.91%; and (2) Total risk-based capital ratio was increased
from 11.10% to 12.63%. All ratios remain above the levels necessary for the
Registrant to be considered "well capitalized" under applicable regulations.
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The acquisition of the First Union branches improved the liquidity of
the Registrant and the Bank due to the fact that $200.7 million of cash was
received in addition to branch cash. 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.
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 ten
years.
Item 7. Financial Statements and Exhibits.
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(a) Financial statements of businesses acquired.
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Not applicable.
(b) Pro forma financial information.
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An unaudited pro forma combined condensed balance sheet as of June 30,
1999, and unaudited pro forma combined condensed statements of income for the
six months ended June 30, 1999, and for the fiscal year ended December 31, 1998,
are incorporated herein by reference to Exhibit 99.2 hereto. The unaudited pro
forma combined condensed balance sheet reflects the historical balance sheet of
the Registrant as of June 30, 1999, and the assets acquired and liabilities
assumed as of September 9, 1999, after giving effect to the acquisition on a
purchase accounting basis as if it had occurred on June 30, 1999. 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 June 30, 1999, 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, 1998, 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 June 30, 1999,
each of which has been previously filed with the Commission. Management of the
Registrant believes that
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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 May 10, 1999, 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 10, 1999.
99.1 - Press Release dated May 10, 1999, of Sun Bancorp, Inc.
(Incorporated by reference to Exhibit 99.2 to the Registrant's Current Report on
Form 8-K, dated May 10, 1999).
99.2 - Pro Forma Financial Information*
99.3 - Press Release dated September 10, 1999 of Sun Bancorp, Inc.
announcing consummation of the First Union 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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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: September 24, 1999 By: /s/ Robert F. Mack
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Robert F. Mack
Executive Vice President
(Duly Authorized Representative)
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EXHIBIT 99.3
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SUN BANCORP, INC.
FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT:
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September 10, 1999 Robert F. Mack
Executive Vice President
(609) 691-7700
Sun National Bank Completes Purchase of 14 First Union Branches
VINELAND, N.J., Sept. 10 /PRNewswire/ -- Philip W. Koebig III, President of Sun
Bancorp, Inc. (Nasdaq: SNBC), the Vineland, New Jersey, holding company for Sun
National Bank, announced that yesterday Sun National Bank had completed the
purchase of 14 New Jersey branches from First Union National Bank. The branches
are located in the New Jersey counties of Burlington, Cape May, Cumberland,
Hunterdon and Mercer, with total deposits of about $230 million. As a result of
this transaction, Sun National Bank has deposits of about $1.16 billion and
total assets of $1.8 billion.
"We are pleased to have another opportunity to strengthen our presence in
southern and central New Jersey," commented Koebig. "Sun now has 64 financial
service centers serving southern and central New Jersey as well as one office in
Philadelphia, Pennsylvania. In addition, Sun Mortgage Company has two offices
serving southern New Jersey and Sun National Bank, Delaware, has eight financial
service centers serving New Castle County, Delaware," he added.
"Sun has developed a reputation for being a community bank that focuses on the
needs of its customers," remarked Koebig, who also serves as President and Chief
Executive Officer of Sun National Bank. "This is an exciting opportunity to
offer our new customers the 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 14th in a series of purchases during the
past five years that have continued to fulfill Sun's strategic growth goals.
During that period of time, the total assets of Sun Bancorp has grown from $113
million in 1994 to total assets of almost $2 billion following the completion of
this transaction with First Union.
The Company's common stock is traded in the Nasdaq National Market under the
symbol "SNBC." Its deposits are insured to the legal maximum by the Federal
Deposit Insurance Corporation.
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