As filed with the Securities and Exchange Commission on
September 30, 1997 Registration No. 333-30723
- -----------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO.2
TO
REGISTRATION STATEMENT
ON
FORM S-3
UNDER THE SECURITIES ACT OF 1933
SUN BANCORP, INC.
(Exact name of Registrant as specified in its charter)
Pennsylvania 23-2233584
- ------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Fred W. Kelly, Jr.
President and Chief
Executive Officer
Sun Bancorp, Inc. SUN BANCORP, INC.
2-16 South Market Street 2-16 South Market Street
Post Office Box 57 Post Office Box 57
Selinsgrove, Pennsylvania 17870 Selinsgrove, Pennsylvania 17870
(717) 374-1131 (717) 374-1131
- ----------------------------- -------------------------------
(Address, including ZIP Code, (Name, address, including ZIP
and telephone number, including Code,and telephone number,
area code, of registrant's including area code,
principal executive offices) of agent for service)
With a Copy to:
Nicholas Bybel, Jr., Esquire
B. Tyler Lincoln, Esquire
SHUMAKER WILLIAMS, P.C.
Post Office Box 88, Harrisburg, Pennsylvania 17108
(717) 763-1121
Approximate date of commencement of the proposed sale of the
securities to the public: From time to time after this
Registration Statement becomes effective.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. [ ]
If the only securities being registered on this Form are
being offered in connection with the formation of a holding
company and there is compliance with General Instruction G, check
the following box. [ ]
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, check the following box. [ ]
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
Registration Statement number of the earlier effective
Registration Statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, please check the following
box and list the Securities Act Registration Statement number of
the earlier effective Registration Statement for the same
offering. [ ]
If delivery of the Prospectus is expected to be made
pursuant to Rule 434, please check the following box. [ ]
<TABLE>
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------
<CAPTION>
Title of Each Class Amount Proposed Maximum
of Securities to to be Offering Price
to be Registered Registered Per Share
<S> <C> <C>
Common Stock par value 565,384 $36.50
$1.25 per share
- ---------------------------------------------------------------
<CAPTION>
Title of Each Class Proposed Maximum Amount of
of Securities to Aggregate Registration
to be Registered Offering Price<F1> Fee
<S> <C> <C>
Common Stock par value $20,636,516 $6,253.49
$1.25 per share
- -----------------------------------------------------------------
<FN>
<F1> Estimated solely for the purpose of determining the
registration fee. Calculated in accordance with Rule
457(c) and based upon the average of the bid and asked
price of the Common Stock on July 1, 1997.
<F2> The registration fees in respect of the securities
registered hereby were paid at the time of the original
filing of the Registration Statement.
---------------------------
</FN>
</TABLE>
<PAGE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE
DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SECTION 8(A), MAY DETERMINE.
<PAGE>
PROSPECTUS
SUN BANCORP, INC.
565,384 SHARES OF COMMON STOCK
PAR VALUE $1.25
__________________________________
This Prospectus relates to the public offering, which is not
being underwritten, of 565,384 shares of Common Stock, par value
$1.25 per share (the "Common Stock"), of Sun Bancorp, Inc. ("Sun"
or the "Registrant"), which may be offered from time to time by
F.N.B. Corporation ("FNB" or the "Selling Shareholder"), for its
own benefit. The Common Stock to which this Prospectus relates
was issued to the Selling Shareholder in connection with the
acquisition by Sun of all of the capital stock of Bucktail Bank
and Trust Company ("Bucktail"), pursuant to an Agreement and Plan
of Reorganization, dated November 6, 1996, among Sun, Sun's
wholly-owned subsidiary, Sun Bank, FNB and Bucktail (the
"Agreement"). Such acquisition of shares is referred to herein
as the "Acquisition" and the shares of Common Stock so acquired
are referred to herein as "Acquisition Shares." The Common Stock
issued to the Selling Shareholder in the Acquisition was issued
pursuant to an exemption from the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act"),
provided by Section 4(2) thereof and, Rule 506, promulgated
thereunder. None of the shares offered pursuant to this
Prospectus have been registered prior to the filing of the
Registration Statement of which this Prospectus is a part. Sun
will receive no part of the proceeds of such sale or sales.
The Selling Shareholder intends to sell the shares offered
hereby from time to time in the over-the-counter market at prices
prevailing therein, in individually negotiated transactions at
such prices as may be agreed upon, or in a combination of such
methods of sale. Sun will bear no expenses in connection with
any sale or other distribution of the shares by the Selling
Shareholder other than expenses of preparation of this Prospectus
and the related Registration Statement of which it is a part.
The Selling Shareholder will bear any selling commissions, stock
transfer taxes, and fees and disbursements of its counsel
relating to such sale and distribution and any other selling
expenses. To the extent required, the specific shares of Common
Stock to be sold, the names of any agent, dealer or underwriter
and any applicable commission or discount with respect to any
particular offer is set forth herein or will be set forth in an
accompanying Prospectus Supplement. See "Selling Shareholder"
and "Plan of Distribution." Sun's Common Stock is traded on the
Nasdaq National Market System under the symbol SUBI. Last
reported sales price of the Common Stock on the Nasdaq on
September 4, 1997, was $38.25 per share.
SEE "RISK FACTORS" ON PAGE 6 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
The Selling Shareholder and any broker executing sell orders
on behalf of the Selling Shareholder may be deemed to be an
"underwriter" within the meaning of the Securities Act of 1933,
as amended (the "Securities Act"). Commissions received by any
such broker may be deemed to be underwriting commissions under
the Securities Act. See "Plan of Distribution" for information
or writing to indemnification of the Selling Shareholder.
_______________________
1
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_______________________
This Prospectus may not be used to consummate sales of
offered securities unless accompanied by a Prospectus Supplement.
_______________________
The date of this Prospectus is September 30, 1997
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE
HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT
CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY SUN OR THE SELLING SHAREHOLDER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OF COMMON
STOCK OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY ANY OF THE SHARES OFFERED
HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL
TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN AS CORRECT IS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE
ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY
SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
2
<PAGE>
AVAILABLE INFORMATION
This Prospectus constitutes a part of a Registration
Statement on Form S-3 (herein, together with all amendments and
exhibits, referred to as the "Registration Statement") filed by
Sun with the Securities and Exchange Commission (the
"Commission") under the Securities Act. This Prospectus does not
contain all the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further
information with respect to Sun and the shares of Common Stock
offered hereby, reference is hereby made to the Registration
Statement. Statements contained herein concerning the provisions
of any document are not necessarily complete, and each such
statement is qualified in its entirety by reference to the copy
of such document filed with the Commission.
The Corporation is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy
statements and other information with the Commission. Such
reports, proxy statements and other information can be inspected
and copied at the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C., and at the following
Regional Offices of the Commission: New York Regional Office,
Seven World Trade Center, New York, New York 10048, and Chicago
Regional Office, Northwest Atrium Center, 500 West Madison
Street, Chicago, IL 60661. Copies of such material can be
obtained from the Public Referenced Section of the Commission,
450 Fifth Street, N.W., Washington, D.C. 20549 upon payment of
the prescribed fees. The Sun Common Stock is quoted on the
Nasdaq National Market. Reports, proxy and information
statements and other information concerning Sun may be inspected
at the Nasdaq Stock Market at 1735 K Street, N.W., Washington,
D.C. 20006. The Commission maintains a World Wide Web Site that
contains reports, proxy and information statements and other
information regarding registrants that file electronically with
the Commission. The address of the site is http://www.sec.com.
3
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Sun with the Commission are
hereby incorporated by reference in this Prospectus:
(a) Annual Report on Form 10-K for the year ended December
31, 1996;
(b) Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997, and June 30, 1997;
(c) Current Report on Form 8-K, dated June 30, 1997, and
filed with the Commission on July 11, 1997 and as
amended on September 11, 1997, and on
September 29, 1997; and
(d) The description of the Corporation's Common Stock which
appears at pages 19 through 21 of the Corporation's
Prospectus, which forms a part of the Corporation's
Registration Statement on Form S-14, Registration No.
2-81484, filed with the Commission on January 25, 1983.
Financial and other information included in the reports
incorporated by reference herein do not reflect stock splits or
dividends declared subsequent to the respective dates of such
reports.
All reports filed by the Corporation pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to the termination of the offering made
hereby shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
Sun hereby undertakes to provide without charge to each
person, including any beneficial owner, to whom a copy of this
Prospectus has been delivered, upon written or oral request of
such person, a copy of any or all of the foregoing documents
incorporated by reference (other than exhibits to such documents,
unless such exhibits are specifically incorporated by reference
into such document). Requests for such documents should be
submitted to:
Jeffrey E. Hoyt, Secretary
Sun Bancorp, Inc.
2-16 South Market Street
Selinsgrove, Pennsylvania 17870
(717) 374-1131
4
<PAGE>
SUN BANCORP, INC.
The following information, relating to Sun, is qualified, in
its entirety, by the more detailed information and the
Consolidated Financial Statements and the Notes thereto,
appearing in the documents incorporated by reference herein.
Sun is a bank holding company, incorporated under the laws
of the Commonwealth of Pennsylvania and registered under the
Bank Holding Company Act of 1956, as amended, on November 26,
1982. Sun acquired the Snyder County Trust Company in June 1983,
and The Watsontown Bank, in November 1987. On December 1, 1993,
the two subsidiary banks merged under the name Sun Bank. Sun
Bank continues to do business under the name Snyder County Trust
Company, incorporated as Sun Bank and under the name The
Watsontown Bank, incorporated as Sun Bank. Sun incorporated
Pennsylvania SUN Life Insurance Company ("SUN Life"), a credit,
life and disability insurance company, in 1993, under the laws of
the State of Arizona. Sun is a limited partner in two
partnerships for the purpose of building, owning and operating
affordable elderly apartment complexes in Sun's market area. As
of June 30, 1997, Sun and its subsidiaries had total consolidated
assets, deposits, and shareholders' equity of $512,383,000,
$324,963,000 and $61,437,000, respectively.
Sun Bank is a Pennsylvania chartered commercial bank,
regulated by the Pennsylvania Department of Banking. Sun Bank
provides full service commercial and retail banking services
primarily in Central Pennsylvania. Sun Bank operates six banking
offices and one trust services office, serving Snyder, Union,
Northumberland and Lycoming Counties.
Sun Bank offers a wide range of services, including demand
deposit accounts, savings accounts, Christmas and all-purpose
clubs, certificates of deposit, and individual retirement
accounts, as well as, commercial loans, consumer loans, mortgage
loans, and safe deposit services. Sun Bank also operates a trust
department that provides full fiduciary services. Sun Bank
operates eight automated teller machines throughout the service
area, providing 24-hour banking service. Sun Bank's deposits are
insured by the Federal Deposit Insurance Corporation (the "FDIC")
to the fullest amount permitted by law.
SUN Life provides credit life and disability insurance to
Sun Bank's credit customers and is subject to supervision and
regulation by the Arizona Department of Insurance, the Insurance
Department of the Commonwealth of Pennsylvania and the Board of
Governors of the Federal Reserve System.
Sun operates in a heavily regulated environment. Changes in
laws and regulations affecting it and its subsidiaries may have
an impact on its operations. Sun is subject to regulation and
supervision by the Board of Governors of the Federal Reserve
System and the Pennsylvania Department of Banking.
The Principal executive offices of Sun are located at 2-16
South Market Street, Selinsgrove, Pennsylvania 17870, telephone
(717) 374-1131.
5
<PAGE>
Sun is a legal entity separate and distinct from its
subsidiaries. Accordingly, the right of Sun and subsequently the
right of creditors of Sun, to participate in any distribution of
the assets or earnings of any subsidiary is necessarily subject
to the prior claims of creditors of the subsidiary, except to the
extent that claims of Sun in its capacity as a creditor may be
recognized. The principle source of Sun's revenue and cash flow
is dividends from its subsidiaries. See "Supervision and
Regulation-Restrictions on Capital Distributions" for a
discussion of regulatory and other restrictions on the ability of
the subsidiaries to pay dividends to Sun.
FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated herein by
reference may contain forward-looking statements based on current
expectations, estimates and projections about Sun's industry,
management's belief, and assumptions made by management. Words
such as "anticipates," "expects," "intends," "plans," "believes,"
"seeks," "estimates," variations of such words and similar
expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and
assumptions that are difficult to forecast; therefore, actual
results may differ materially from those expressed or forecast in
any such forward-looking statements. Such risks and
uncertainties include, in addition to those set forth herein
under "Risk Factors," those noted in the documents incorporated
herein by reference. Sun undertakes no obligation to update
publicly any forward-looking statements, whether as a result of
new information, future events or otherwise.
RISK FACTORS
The Common Stock offered hereby is speculative in nature and
involves a high degree of risk. The following risk factors
should be considered carefully in addition to the other
information contained in this Prospectus and the documents
incorporated by reference herein before purchasing the Common
Stock offered hereby:
Dependence on Key Personnel
- ---------------------------
Sun's business success depends and will continue to depend,
to a great extent upon the services of Fred W. Kelly, Jr.,
President and Chief Executive Officer, Jeffrey E. Hoyt,
Executive Vice President and Chief Operating Officer, and upon
the Board of Directors of Sun. As of May 31, 1997, Sun employed
approximately 118 full-time equivalent employees. The loss of
key personnel by Sun could have a material adverse affect upon
the future prospects of Sun.
Intense Competition
- -------------------
Sun operates in an extremely competitive environment. Sun
Bank, Sun's wholly-owned subsidiary, a Pennsylvania chartered
bank and trust company, competes against larger banks that
dominate the commercial banking industry in Pennsylvania. By
virtue of their larger capital bases, such institutions have
substantially greater lending limits than Sun Bank and can
perform certain functions for their customers, which Sun is not
authorized to offer. In addition to commercial banks, Sun Bank
also competes with other financial institutions, such as savings
and loan associations, credit unions, money market funds, stock
brokerage firms, insurance companies and others, in obtaining
funds to loan and in making loans. Future competitors, including
new commercial banks,
6
<PAGE>
may enter Sun Bank's market area. Sun Bank's strategy is to
attract customers by providing personalized services and to use
Sun Bank's Directors' business and personal contacts within the
community. There can be no assurance that Sun Bank can
successfully continue to pursue this strategy. Sun Bank and its
holding company Sun, can not predict the effect of competition on
their ability to gain market acceptance and to operate
profitably.
Dividend Restrictions
- ---------------------
Sun's revenues result almost entirely from dividends paid to
Sun by its subsidiaries. Sun's right, and consequently the right
of creditors and shareholders of Sun, to participate in any
distribution of assets or earnings of any subsidiary through the
payment of such dividends or otherwise, is necessarily subject to
prior claims of creditors of the subsidiary (including
depositors, in the case of Sun Bank), except to the extent that
Sun's claims in its capacity as creditor may be recognized.
Dividend payments by Sun Bank to Sun are subject to the
Pennsylvania Banking Code of 1965, as amended, and the FDIA.
(See, Supervision and Regulation - Restrictions on Capital
Distributions, set forth below.)
Economic Conditions and Related Uncertainties
- ---------------------------------------------
Commercial banking is affected, directly and indirectly, by
local, domestic and international economic and political
conditions, and by governmental monetary and fiscal policies.
Conditions such as inflation, recession, unemployment, volatile
interest rates, tight money supply, scarce natural resources,
real estate values, international conflicts and other factors
beyond Sun's control can adversely affect the potential
profitability of Sun. Future rising interest rates, while
increasing the income yield on Sun Bank's earning assets, can
adversely affect loan demand and, consequently, profitability of
Sun Bank. Future decreases in interest rates can adversely
affect Sun's profitability because any decrease can reduce the
return that Sun Bank earns on its assets. Economic downturns
could result in the delinquency of outstanding loans. Management
does not expect any one particular factor to affect Sun Bank's
success or failure.
Government Regulations
- ----------------------
Sun is subject to extensive governmental supervision,
regulation and control, and future legislation and government
policy could adversely affect the commercial banking industry and
the operations of Sun. (See, Supervision and Regulation, below.)
Possible Change of Regulations
- ------------------------------
Sun's and Sun Bank's organization and operations are
strictly regulated and supervised by various state and federal
regulatory bodies, in accordance with applicable statutes and
regulations. Prospective investors should be aware that the
statutes and regulations governing financial institutions, in
general, and the commercial banking industry, in particular, are
in a state of continuous change and have been modified
substantially during recent years. Such governing laws can be
anticipated to continue to be the subject of modification, and
management cannot predict what affect, if any, such modifications
will have on the operations of Sun Bank and of Sun.
7
<PAGE>
Control; Market Liquidity
- -------------------------
As of August 21, 1997, there were 4,125,066 shares of Sun
Common Stock outstanding. Sun's directors and officers and their
associates beneficially owned, in the aggregate, 460,566 shares
of Common Stock, representing 11% of the total outstanding shares
of Common Stock. As of the close of business on August 21, 1997,
the Selling Shareholder beneficially held 595,931 shares of
Common Stock, representing approximately 14.45% of the total
outstanding shares of Common Stock.
The ownership of a substantial percentage of the outstanding
Common Stock by a limited number of shareholders may adversely
affect the liquidity of the market for the Common Stock because
only a limited number of shares are widely dispersed and likely
to change hands. Stock prices in an illiquid market tend to
increase and decrease in a more volatile manner than stock prices
in a liquid market, because prices for a relatively small number
of shares can have a significant impact on the price quoted for
the Sun Common Stock. Sun is unable to estimate the number of
shares of Sun Common Stock that may be sold in the future by any
of its shareholders. Sales will depend on a number of factors,
including the market price for the shares of Sun Common Stock
and the circumstances applicable to each shareholder. The sale
of a substantial block of shares of Sun Common Stock in the
public market is likely to have an adverse impact on the market
price of the shares of Sun Common Stock.
Indemnification Provisions for Directors
- ----------------------------------------
Sun's Bylaws contain provisions limiting the liability of
directors in connection with actions they may take as directors.
Directors and officers are also insured against certain
liabilities for monetary damages to the fullest extent permitted
by Pennsylvania law. Among other things, such provisions may
prevent Sun and Sun's shareholders from having a cause of action
against the directors for monetary damages. Causes of action for
self-dealing, willful misconduct or recklessness and claims for
non-monetary relief, however, may be unaffected by such
provisions. The restriction on monetary liability may discourage
derivative litigation seeking such relief and, in the case of
claims having merit, could reduce the recovery of monetary
damages by Sun. One of the significant effects of the
indemnification provisions in the Bylaws is to authorize
indemnification against judgements and settlements in a
derivative suit. As a result, damages assessed against a
director to be paid to Sun would be, at least, reduced by the
indemnification amounts owed by Sun to such persons. Sun,
accordingly, would not receive any net benefit from such awards
or settlement amounts and could incur a loss after
indemnification payments are made. Management believes, however,
that these provisions are appropriate because any possible
economic loss to Sun should be offset by a reduction in the cost,
to Sun, of defending baseless litigation, which may also be
discouraged by these provisions of the Bylaws.
Trading Market
- --------------
The shares of Sun Common Stock are listed for trading on the
National Association of Securities Dealers Automated Quotation
System ( the"NASDAQ"). Sun cannot guarantee that it will
continue to maintain its listing with the National Association of
Securities Dealers and can give no assurance that the market for
the Sun Common Stock will be maintained.
8
<PAGE>
Loss on Dissolution and Termination
- -----------------------------------
In the event of dissolution and termination of Sun, the
proceeds, if any, realized from liquidation of Sun's assets will
be distributed only after satisfaction of all claims of
creditors. Accordingly, the ability of a shareholder to recover
all or any portion of his/her investment under such circumstances
will depend on the amount of funds realized and the claims of
creditors, depositors and others to be satisfied therefrom.
SUPERVISION AND REGULATION
Various requirements and restrictions under the laws of the
United States and the states in which Sun and its subsidiaries do
business affect Sun and its subsidiaries.
General
- -------
Sun is a bank holding company subject to supervision and
regulations by the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board") under the Bank Holding
Company Act of 1956, as amended (the "BHCA"). As a bank holding
company, Sun's activities and those of its banking and nonbanking
subsidiary are limited to the business of banking and activities
closely related or incidental to banking, Sun may not directly or
indirectly acquire the ownership or control of more than 5% of
any class of voting shares or substantially all assets of any
company, including a bank, without the prior approval of the
Federal Reserve Board.
Sun's subsidiary bank, Sun Bank, is subject to supervision
and examination by applicable federal and state banking agencies,
the FDIC and Pennsylvania Department of Banking. Sun Bank is
insured by, and therefore subject to regulations of the FDIC. In
addition, Sun Bank is a Pennsylvania bank and trust company and a
member of the Federal Reserve Board, subject to supervision and
regulation by the Pennsylvania Department of Banking and the
Federal Reserve Board. Sun Bank is also subject to requirements
and restrictions under federal and state law, including
requirements to maintain reserves against deposits, restriction
on types and amounts of loans that may be granted and the
interest that may be charged thereon, and limitations on the
types of investments that may be made and the types of services
that may be offered. Various consumer laws and regulations also
affect the operations of Sun Bank. In addition to the impact of
regulation, commercial banks are affected significantly by the
actions of the Federal Reserve Board as it attempts to control
the money supply and credit available in order to influence the
economy.
Holding Company Structure
- -------------------------
Sun Bank is subject to restrictions under federal law which
limits the transfer of funds by Sun Bank to Sun and its
nonbanking subsidiary, SUN Life, whether in the form of loans,
other extensions of credit, investments or asset purchases.
Transfers by a subsidiary bank to Sun or any nonbanking
subsidiary are limited in an amount to 10% of the subsidiary
bank's capital and surplus and, with respect to Sun, to an
aggregate of 20% of Sun Bank's capital and surplus. Furthermore,
such loans and extensions of credits are required to be secured
in specified amounts, and all such transactions are required to
be on an arms-length basis.
9
<PAGE>
The Federal Reserve Board has issued regulations under the
BHCA that require a bank holding company to serve as a source of
financial and managerial strength to subsidiary banks. As a
result, the Federal Reserve Board, pursuant to regulations, may
require Sun to stand ready to use its resources to provide
adequate capital funds to Sun Bank, during periods of financial
stress or adversity. This support may be required at times when,
absent such regulations, the bank holding company might not
otherwise provide such support. The Federal Reserve Board also
has the authority to require a bank holding company to terminate
any activity or relinquish control of a nonbank subsidiary (other
than a nonbank subsidiary of a bank) upon the Federal Reserve
Board's determination that such activity or control constitutes a
serious risk to the financial soundness and stability of any bank
subsidiary of a bank holding company.
Under the Federal Deposit Insurance Act (the "FDIA"), a
depository institution insured by the FDIC can be held liable for
any loss incurred by, or reasonably expected to be incurred by,
the FDIC in connection with (i) the default of a commonly
controlled FDIC-insured depository institution or (ii) any
assistance provided by the FDIC to a commonly controlled
depository institution in danger of default. Under the Federal
Deposit Insurance Corporation Improvement Act of 1991, a bank
holding company is required to guarantee the compliance of any
insured depository institution subsidiary that may become "under
capitalized" (as defined by regulations) with the terms of any
capital restoration plan filed by such subsidiary with its
appropriate federal banking agency, up to specified limits.
Under the BHCA, the Federal Reserve Board has the authority
to require a bank holding company to terminate any activity or
relinquish control of a nonbank subsidiary (other than a nonbank
subsidiary of a bank) upon the Federal Reserve Board's
determination that such activity or control constitutes a serious
risk to the financial soundness and stability of any bank
subsidiary of the bank holding company.
The BHCA prohibits Sun from acquiring direct or indirect
control of more than 5% of the outstanding shares of any class of
voting stock or substantially all of the assets of any bank or
merging or consolidating with another bank holding company
without prior approval of the Federal Reserve Board. Such a
transaction would also require approval of the Pennsylvania
Department of Banking. Pennsylvania law permits Pennsylvania
bank holding companies to control an unlimited number of banks.
Additionally, the BHCA prohibits Sun from engaging in or
from acquiring ownership or control of more than 5% of the
outstanding shares of any class of voting stock of any company
engaged in a nonbanking business unless such business is
determined by the Federal Reserve Board to be so closely related
to banking as to be a proper incident thereto. The Federal
Reserve Board can differentiate between nonbanking activities
that are initiated by a bank holding company or subsidiary and
activities that are acquired as a going concern. The BHCA does
not place territorial restrictions on the activities of such
nonbanking-related activities. Sun and its subsidiaries are
prohibited from engaging in certain tie-in arrangements in
connection with any extension of credit, lease or sale of
property, or furnishing of services.
10
<PAGE>
The Federal Reserve Board has determined, by regulation,
that the following activities are permissible:
(1) making, acquiring, or servicing loans or other
extensions of credit for its own account or for the
account of others;
(2) operating an industrial bank, Morris Plan bank, or
industrial loan company, in the manner authorized by
state law, so long as the institution is not a bank;
(3) operating as a trust company in the manner authorized
by federal or state law so long as the institution is
not a bank and does not make loans or investments or
accept deposits, except as may be permitted by the
Federal Reserve;
(4) subject to limitations, acting as an investment or
financial adviser (i) to a mortgage or real estate
investment trust, (ii) to certain registered investment
companies, (iii) by providing portfolio investment
advice to other persons, (iv) by furnishing general
economic information and advice, general economic
statistical forecasting services, and industry studies,
(v) by providing financial advice to state and local
governments, or (vi) by providing financial and
transaction advice to corporations, institutions, and
certain persons in connection with mergers,
acquisitions, and other financial transactions;
(5) subject to limitations, leasing real or personal
property or acting as agent, broker, or adviser in
leasing such property in accordance with prescribed
conditions;
(6) investing in corporations or projects designed
primarily to promote community welfare;
(7) providing to others data processing services and data
transmission services, data bases, and facilities,
within certain limitations;
(8) subject to limitations, engaging in certain agency and
underwriting activities with respect to credit
insurance, and certain other insurance activities as
permitted by the Federal Reserve.
(9) owning, controlling, or operating a savings
association, if the savings association engages only in
deposit-taking activities and lending and other
activities that are permissible for bank holding
companies under Federal Reserve regulations;
(10) providing courier services for certain financial
documents;
(11) subject to limitations, providing management consulting
advice to nonaffiliated bank and nonbank depository
institutions;
(12) retail selling of money orders and similar consumer-
type payment instruments having a face value of $1,000
or less, selling U.S. Savings Bonds, and issuing and
selling traveler's checks;
11
<PAGE>
(13) performing appraisals of real estate and personal
property;
(14) subject to limitations, acting as intermediary for the
financing of commercial or industrial income-producing
real estate by arranging for the transfer of the title,
control, and risk of such a real estate project to one
or more investors;
(15) providing certain securities brokerage services;
(16) subject to limitations, underwriting and dealing in
government obligations and certain other instruments;
(17) subject to limitations, providing foreign exchange and
transactional services;
(18) subject to limitations, acting as a futures commission
merchant for nonaffiliated persons;
(19) subject to limitations, providing investment advice on
financial futures and options to futures;
(20) subject to limitations, providing consumer financial
counseling;
(21) subject to limitations, tax planning and preparation;
(22) providing check guaranty services;
(23) subject to limitations, operating a collection agency;
and
(24) operating a credit bureau.
Federal Reserve Board approval may be required before Sun or
any nonbank subsidiary of Sun may begin to engage in any such
activity and before any such business may be acquired.
Restrictions on Capital Distributions
- -------------------------------------
Sun is a legal entity separate and distinct from its
subsidiaries. Sun's revenues (on a parent only basis) result
almost entirely from dividends paid to Sun by its subsidiaries.
Sun's right, and consequently the right of creditors and
shareholders of Sun, to participate in any distribution of the
assets or earnings of any subsidiary through the payment of such
dividends or otherwise is necessarily subject to the prior claims
of creditors of the subsidiary (including depositors, in the case
of Sun Bank), except to the extent that Sun's claims in its
capacity as creditor may be recognized.
Dividend payments by Sun Bank to Sun are subject to the
Pennsylvania Banking Code of 1965, as amended (the "Banking
Code") and the FDIA. Under the Banking Code, no dividends may be
paid except from "accumulated net earnings" (generally undivided
profits). Under the FDIA, no dividends may be paid by an insured
bank if the bank is in arrears in the payments of any insurance
assessment due to the FDIC.
12
<PAGE>
State and federal regulatory authorities have adopted
standards for the maintenance of adequate levels of capital by
banks. Adherence to such standards further limits the ability of
banks to pay dividends.
The payment of dividends by any subsidiary bank may also be
affected by other regulatory requirements and policies, such as
the maintenance of adequate capital. If, in the opinion of the
applicable regulatory authority, a bank under its jurisdiction is
engaged in, or is about to engage in, an unsafe or unsound
practice (which, depending on the financial condition of the
bank, could include the payment of dividends), such authority may
require, after notice and hearing, that such bank cease and
desist from such practice. The Federal Reserve Board and the
FDIC have formal and informal policies that provide that insured
banks and bank holding companies should generally pay dividends
only out of current operating earnings, with some exceptions.
Sun anticipates that cash dividends will be paid on the same
basis in the future as Sun has paid such dividends in the past.
However, Sun can give no assurance that Sun's results of
operations will permit the payment of dividends.
Capital Adequacy
- ----------------
Bank holding companies are required to comply with the
Federal Reserve Board's risk-based capital guidelines. The
required minimum ratio of total capital to risk-weighted assets
(including certain off-balance sheet activities, such as standby
letters of credit) is 8%. At least half (4%) of the total
capital is required to be "Tier 1 capital," consisting
principally of common shareholders' equity, noncumulative
perpetual preferred stock, a limited amount of cumulative
perpetual preferred stock, and minority interests in the equity
accounts of consolidated subsidiaries, less certain intangible
assets. The remainder ("Tier 2 capital") may consist of a
limited amount of subordinated debt and intermediate-term
preferred stock, certain hybrid capital instruments and other
debt securities, perpetual preferred stock, and a limited amount
of the general loan loss allowance. In addition to the
risk-based capital guidelines, the Federal Reserve Board requires
a bank holding company to maintain a minimum "leverage ratio."
This requires a minimum level of Tier 1 capital (as determined
under the risk-based capital rules) to average total consolidated
assets of 3% for those bank holding companies that have the
highest regulatory examination ratings and are not contemplating
or experiencing significant growth or expansion. All other bank
holding companies are expected to maintain a ratio of at least 1%
to 2% above the stated minimum. Further, the Federal Reserve
Board has indicated that it will consider a "tangible Tier 1
capital leverage ratio" (deducting all intangibles) and other
indicia of capital strength in evaluating proposals for expansion
or new activities. The Federal Reserve Board has not advised Sun
of any specific minimum leverage ratio applicable to Sun.
Pursuant to FDICIA, the federal banking agencies have
specified, by regulation, the levels at which an insured
institution is considered "well capitalized," "adequately
capitalized," "undercapitalized," "significantly
undercapitalized," or "critically undercapitalized." Under these
regulations, an institution is considered "well capitalized" if
it has a total risk-based capital ratio of 10% or greater, a Tier
1 risk-based capital ratio of 6% or greater, a leverage ratio of
5% or greater, and is not subject to any order or written
directive to meet and maintain a specific capital level. Sun and
Sun Bank, at March 31, 1996, qualified as "well capitalized"
under these regulatory standards.
13
<PAGE>
USE OF PROCEEDS
Sun will not receive any of the proceeds from the sale of
the Common Stock by the Selling Shareholder. All proceeds from
the sale of the Common Stock will be for the account of the
Selling Shareholder, as described below. See "Selling
Shareholder" and "Plan of Distribution," described below.
SELLING SHAREHOLDER
The shares of Common Stock to be sold by the Selling
Shareholder pursuant to this Prospectus represent shares issued
to the Selling Shareholder by Sun in connection with the
Acquisition (the "Acquisition Shares"). As of June 30, 1997,
and immediately preceding the Acquisition, the Selling
Shareholder beneficially held 30,547 additional shares of Common
Stock. The Registrant and the Selling Shareholder entered into a
Stock Investment Agreement, dated as of November 6, 1996, (the
"Investment Agreement"), which sets forth certain restrictions
and limitations with respect to, and governs the rights of FNB to
acquire, hold or transfer Sun Common Stock. The Investment
Agreement does not grant the Selling Shareholder a preemptive or
other right to purchase or receive authorized but unissued shares
of Sun Common Stock. In the event that Sun issues any shares of
Sun Common Stock, for any reason, Sun has no obligation to issue
shares of Sun Common Stock to the Selling Shareholder in order
for the Selling Shareholder to maintain its percentage ownership
interest in the Registrant. In the event that Sun issues shares
of Sun Common Stock, such that the issuance will increase the
number of outstanding shares of Sun Common Stock by more than 1%,
then Sun must give concurrent written notice to the Selling
Shareholder of such issuance.
The Investment Agreement prohibits the Selling Shareholder,
for a period of five years following the Effective Date, from
acquiring or gaining beneficial ownership of shares of Sun Common
Stock or other capital stock of Sun, if the result of such
acquisition would be to cause the Selling Shareholder to be the
beneficial owner of more than 20% of the shares of Sun Common
Stock or other capital stock of Sun then outstanding. Further,
the Selling Shareholder is prohibited from transferring, selling
or exchanging any shares of Sun Common Stock for a period of two
years, commencing June 30, 1997. Subject to the notice
provisions of the Investment Agreement, from a period commencing
June 30, 1999, and ending June 30, 2001, the Selling Shareholder
may only transfer, sell or exchange during each calendar quarter
Sun Common Stock, beneficially owned in an aggregate amount no
greater than 1/2 of 1% of the shares of Sun Common Stock then
outstanding. Subject to the notice provisions of the Investment
Agreement, from a period commencing June 30, 2001, and ending
June 30, 2003, the Selling Shareholder may only transfer, sell or
exchange during each calendar quarter Sun Common Stock in an
aggregate amount no greater than 1% of the shares of Sun Common
Stock then outstanding.
The Selling Shareholder has agreed, pursuant to the
Investment Agreement, to promptly give Sun written notice if at
any time:
(i) the Selling Shareholder desires or intends to
transfer, sell, or exchange, Sun Common Stock or
enters into any contract or arrangement to do so;
(ii) the Selling Shareholder enters into an agreement to
merge, consolidate, or sell or transfer all or
substantially all of the assets of the Selling
Shareholder, where the Selling Shareholder is not the
surviving entity or institution;
14
<PAGE>
(iii) the Selling Shareholder becomes or is about to become
insolvent, bankrupt under the Federal Bankruptcy laws,
in receivership under the laws of any jurisdiction, or
the subject or cause of any assignment for the
benefit of creditors; or
(iv) any Sun Common Stock owned or held by Selling
Shareholder is or is about to be exchanged or
transferred, by operation of law or by reason of or
pursuant to any judgment, decree, order of any court,
(other than any one enforcing the provisions of the
Investment Agreement). Such written notice must
contain the identification of the proposed transferee,
the amount of Sun Common Stock, transferred, sold or
exchange or to be transferred, sold or exchanged, if
applicable, and that the shares of Sun Common Stock
are intended to be offered or distributed in an open
market transaction. The Investment Agreement also
grants to Sun the right of first refusal, but not the
obligation to purchase, any or all of the Selling
Shareholder's Sun Common Stock in the event that the
Selling Shareholder elects to dispose of such stock as
provided under the terms of the Investment Agreement.
The Investment Agreement also sets forth a restrictive
legend and requires that such legend be endorsed on each
certificate representing Acquisition Shares.
After the effective date of the Acquisition, and subject to
receipt of any required regulatory approvals and qualifications
of such person under Sun's Bylaws, Sun agreed to appoint Thomas
B. Hebble and Stephen Gurgovits to its Board of Directors (the
"Nominees"), for a term expiring at the next Annual Meeting of
Shareholders of Sun with a recommendation that the Nominees be
elected to the next two successive classes of directors to be
elected at Sun's Annual Meeting of Shareholders. Upon the
expiration of the initial terms of the Nominees to positions on
Sun's Board of Directors, the Board of Directors of Sun is under
an obligation, as set forth in the Investment Agreement, to
recommend, to the shareholders of Sun, the election of the
Nominees to the Board of Directors of Sun so long as the Selling
Shareholder beneficially owns not less than 15% of the
outstanding shares of Sun Common Stock, as of the record date for
Sun's Annual Meeting of Shareholders.
The discussion of the Investment Agreement set forth herein
is qualified, in its entirety, by reference to the Investment
Agreement, attached at Exhibit 10 to Sun's Current Report on
Current Form 8-K, dated June 30, 1997, as filed with the
Securities and Exchange Commission on July 11, 1997, and as
amended on September 11, 1997, and on September 29, 1997.
DESCRIPTION OF CAPITAL STOCK
The authorized capital of Sun consists of 20,000,000 shares
of common stock, par value $1.25 (the "Sun Common Stock") of
which, at August 21, 1997, 4,125,066 shares were issued and
outstanding. Each share of Sun Common Stock has the same
relative rights as, and is identical in all respects with, each
other share of Sun Common Stock. The holders of the Sun Common
Stock possess exclusive voting rights in Sun. Each holder of
shares of Sun Common Stock is entitled to one vote for each share
held on matters upon which shareholders have the right to vote.
Shareholders are not entitled to cumulate for the election of
directors.
15
<PAGE>
The holders of Sun Common Stock are entitled to share
ratably in dividends, when and if declared by the Board of
Directors of Sun, from funds legally available therefore.
Payment of dividends by Sun is dependant upon dividends payments
to Sun by its subsidiaries, which payments are subject to
regulatory restrictions. See "Supervision and Regulation -
Restrictions on Capital Distributions." In the event of any
liquidation, dissolution or winding up of Sun, after payment of
all debts and liabilities of Sun, the holders of the Sun Common
Stock will be entitled to receive all assets of Sun available for
distribution in cash or in kind. Holders of the Sun Common Stock
are not entitled to preemptive rights with respect to any shares
of Sun which may be issued. The Sun Common Stock offered
hereunder is not subject to redemption.
PLAN OF DISTRIBUTION
The shares covered by this Prospectus may be offered and
sold, from time to time, by the Selling Shareholder, subject to
the terms of the Investment Agreement set forth above. Selling
Shareholder will act independently of Sun in making decisions
with respect to the timing, manner and size of each sale. The
Selling Shareholder may sell the shares being offered hereby on
the open market, or otherwise, at prices under terms then
prevailing or at prices related to the then current market price
or at negotiated prices. The shares may be sold by one or more
of the following means of distribution:
(a) A block trade in which the broker-dealer so engaged
will attempt to sell shares as agent, but may position
and resell a portion of the block as principal to
facilitate the transaction;
(b) Purchases by a broker-dealer as principal and resale by
such broker-dealer for its own account pursuant to this
Prospectus;
(c) An over-the-counter distribution in accordance with the
rules of the NASDAQ National Market System;
(d) Ordinary brokerage transactions and transactions in
which the broker solicits purchases; and
(e) In privately negotiated transactions.
To the extent required, this Prospectus may be amended and
supplemented from time to time to describe a specific plan of
distribution. In connection with distributions of the shares or
otherwise, the Selling Shareholder may enter into hedging
transactions with broker-dealers or other financial institutions.
In connection with such transactions, broker-dealers or other
financial institutions may engage in short sales of Sun Common
Stock in the course of hedging the position they assume with the
Selling Shareholder. The Selling Shareholder may also sell Sun's
Common Stock short and redeliver the shares to close out such
short positions. The Selling Shareholder may also enter into
auction or other transactions with broker-dealers or other
financial institutions which require the delivery to such
broker-dealer or
other financial institution of shares offered hereby,
which shares such broker-dealer or other financial institution
may resell pursuant to this Prospectus (as supplemented or
amended to reflect such transaction). The Selling Shareholder
may also pledge shares to a broker-dealer or other financial
institution, and, upon a default, such broker-dealer or
16
<PAGE>
other financial institution, may effect sales of the pledged
shares pursuant to this Prospectus (as supplemented or amended to
reflect such transaction). In addition, any shares that qualify
for sale pursuant to Rule 144 may be sold under Rule 144 rather
than pursuant to this Prospectus.
Any broker-dealer participating in such transactions as
agent may receive commissions from the Selling Shareholder (and,
if acting as agent for the purchaser of such shares, from such
purchaser). Usual and customary brokerage fees may be paid by
the Selling Shareholder. Broker-dealers may agree with the
Selling Shareholder to sell a specified number of shares at a
stipulated price per share, and, to the extent such a
broker-dealer is
unable to do so acting as agent for the Selling
Shareholder, to purchase as principal any unsold shares at the
price required to fulfill a broker-dealer commitment to the
Selling Shareholder. Broker-dealers who acquire shares as
principal may thereafter resell such shares from time to time in
transactions, (which may involve crosses and block transactions
and which may involve sales to and through other broker-dealers,
including transactions of the nature described above) in the
over-the-counter market, in negotiated transactions or by a
combination of such methods of sale or otherwise market prices
for the only at the time of sale written negotiated price, and in
connection with such resale may pay to or receive from the
purchasers of such shares commissions as described above.
Sun has advised the Selling Shareholder that the
anti-manipulation
Regulation M under the Exchange Act may apply to
sales of shares in the market and to the activities of the
Selling Shareholder and its affiliates. In addition, Sun will
make copies of this Prospectus available to the Selling
Shareholder and has informed it of the need for delivery of
copies of this Prospectus to purchasers at or prior to the time
of any sale of the shares offered hereby. The Selling
Shareholder may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain
liabilities, including liabilities arising under the Securities
Act. Any commissions paid or any discounts or concessions
allowed to any such broker-dealers, and any profits received from
the resale of such shares, may be deemed to be underwriting
discounts and commissions under the Securities Act if any such
broker-dealers purchase shares as principal.
In order to comply with the securities laws of certain
states, if applicable, the shares offered hereby will be sold in
such jurisdictions only through registered or licensed brokers or
dealers. In addition, in certain states, the shares may not be
sold unless such shares have been registered or qualified for
sale in the applicable state or an exemption from registration or
qualification requirement is available and is complied with.
At the time a particular offer of the shares of Common Stock
registered hereunder is made, if required, a Prospectus
Supplement will be distributed that will set forth the number of
shares being offered and the terms of the offering, including the
name of any underwriter, dealer or agent, a purchase price paid
by any underwriter, any discount, commission or other items
constituting compensation any discount, commission or concession
allowed or paid to any dealer, in the proposed selling price to
the public. The sale of shares by the Selling Shareholder is
subject to compliance by the Selling Shareholder with certain
contractual restrictions with Sun. There can be no assurance
that the Selling Shareholder will sell all or any of the shares.
See "Selling Shareholder" and "Plan of Distribution," described
above.
Sun has agreed to indemnify the Selling Shareholder and any
person controlling Selling Shareholder against certain
liabilities, including liabilities of the Securities Act. The
Selling Shareholder has agreed to indemnify Sun and certain
related persons against certain liabilities, including
liabilities under the Securities Act.
Sun has agreed with the Selling Shareholder to keep the
Registration Statement of which this Prospectus constitutes a
part effective for up to seven years following June 30, 1997, the
closing date of the Acquisition. This period may be shortened
under certain circumstances. Sun intends to deregister any of
the shares not sold by the Selling Shareholder of the end of such
2 year period, however, it is anticipated that at such time any
unsold shares may be freely tradable, subject to compliance with
Rule 144 of the Securities Act.
17
<PAGE>
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby
will be passed upon by Shumaker Williams, P.C., Special Corporate
Counsel to Sun.
EXPERTS
The consolidated financial statements of Sun, incorporated
by reference in the Annual Report on Form 10-K of Sun for the
year ended December 31, 1996, have been audited by Parente,
Randolph, Orlando, Carey & Associates, independent auditors, as
set forth in their report thereon incorporated by reference
therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference and
reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
The financial statements of Bucktail, as of and for the year
ended December 31, 1996, included in Sun's Form 8-K, dated June
30, 1997, have been audited by Ernst & Young LLP, independent
auditors, and such financial statements are incorporated herein
by reference in reliance on their report given on their authority
as experts in accounting and auditing.
Sun may amend or supplement this Prospectus from time to
time to update disclosures set forth herein.
18
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
-------------------------------------------
Sun will bear no expenses in connection with any sale or
other distribution by the Selling Shareholder of the shares being
registered other than the expenses of preparation of this
Registration Statement and the Prospectus included in this
Registration Statement. Such expenses are set forth in the
following table. All of the amounts shown are estimates except
the Securities and Exchange Commission registration fee.
Registration Fee $ 6,253.49
--------------
Legal Fees and Expenses 10,000.00
--------------
Accounting Fees and Expenses 6,000.00
--------------
Printing Fees and Postage 100.00
--------------
Miscellaneous Expenses 1,000.00
--------------
Total $ 23,353.49
==============
Item 15. Indemnification of Directors and Officers
-----------------------------------------
Pennsylvania law provides that a Pennsylvania corporation
may indemnify directors, officers, employees, and agents of the
corporation against liabilities they may incur in such capacities
for any action taken or any failure to act, whether or not the
corporation would have the power to indemnify the person under
any provision of law, unless such action or failure to act is
determined by a court to have constituted recklessness or willful
misconduct. Pennsylvania law also permits the adoption of a
Bylaw amendment, approved by shareholders, providing for the
elimination of a director's liability for monetary damages for
any action taken or any failure to take an action unless (1) the
director has breached or failed to perform the duties of his
office and (2) the breach of failure to perform constitutes
self-dealings,
willful misconduct or recklessness.
The Bylaws of Sun provide for (1) indemnification of
directors, officers, employees, and agents, of Sun and its
subsidiaries and (2) the elimination of a director's liability
for monetary damages to the fullest extent permitted by
Pennsylvania law.
Directors and officers are also insured against certain
liabilities for their actions, as such, by an insurance policy
obtained by Sun.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions or otherwise, the Registrant has been advised that in
the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by a director,
officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of
its counsel the manner has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
19
<PAGE>
Item 16. Exhibits and Financial Statement Schedules
------------------------------------------
5 Opinion of Shumaker Williams, P. C. of Camp Hill,
Pennsylvania, Special Counsel to Registrant.
23.1 Consent of Shumaker Williams, P.C., Special Counsel
(Included in Exhibit 5).
23.2 Consent of Parente, Randolph, Orlando, Carey &
Associates, Independent Accountants.
23.3 Consent of Ernst & Young LLP, Independent Auditors.
24 Power of Attorney (Included on Signature Page).
Item 17. Undertakings
------------
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement to include any material information with
respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bonafide offering
thereof.
(3) To remove from registration by means of a
post-effective
amendment any of the securities being registered which remain
unsold at the
termination of this offering.
(4) That, for purposes of determining any liability
under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange
Act that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bonafide offering thereof.
20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant has duly caused this Pre-Effective Amendment No.
2
to the Registrant's Registration Statement No. 333-30723 to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Selinsgrove, Commonwealth of
Pennsylvania on September 30, 1997.
SUN BANCORP, INC.
By:/s/ Fred W. Kelly, Jr.
----------------------
Fred W. Kelly, Jr.
President and Chief Executive
Officer
<PAGE>
INDEX TO EXHIBITS
Page No.
In Sequentially
Numbered
Exhibit No. Original
- ----------- --------
5 Opinion of Shumaker Williams, P. C.
of Camp Hill,Pennsylvania, Special
Counsel to Registrant.*
23.1 Consent of Shumaker Williams, P.C.,
Special Counsel(Included at Exhibit 5).*
23.2 Consent of Parente, Randolph, Orlando,
Carey & Associates, Independent Accountants.
23.3 Consent of Ernst & Young LLP,
Independent Auditors.
24 Power of Attorney.*
________________________
* Previously Filed.
EXHIBIT 23.2
CONSENT OF PARENTE, RANDOLPH, ORLANDO,
CAREY & ASSOCIATES, INDEPENDENT ACCOUNTANTS
<PAGE>
400 Market Street
Williamsport, Pennsylvania 17701-6382
(717) 323-6023
FAX (717) 323-9733
PARENTE, RANDOLPH, ORLANDO, CAREY & ASSOCIATES
- ---------------------------------------------
Certified Public Accountants & Consultants
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"experts" in the Registration Statement No. 333-30723 on Form
S-3, and related Prospectus of Sun Bancorp, Inc. (the
"Registrant")for the registration of 565,384 shares of the
Registrant's Common Stock, par value $1.25 per share, and to
incorporation by reference therein of our report dated January
17, 1997, with respect to the Registrant's consolidated financial
statements incorporated by reference in its Annual Report on Form
10-K for the year ended December 31, 1996, and the related
financial statements schedule included therein, and as filed with
the Securities and Exchange Commission.
/s/Parente, Randolph, Orlando, Carey & Associates
--------------------------------------------------
PARENTE, RANDOLPH, ORLANDO, CAREY & ASSOCIATES
Williamsport, Pennsylvania
September 29, 1997
- -----------------------------------------------------------------
Affiliate Offices in Principal Cities Worldwide
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
<PAGE>
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" in Pre-Effective Amendment No. 2 to the Registration
Statement (Form S-3 no. 333-30723) and related Prospectus of Sun
Bancorp, Inc. for the registration of 565,384 shares of its
common stock and to the incorporation by reference therein of our
report dated April 2, 1997, with respect to the financial
statements of Bucktail Bank and Trust Company included in Sun
Bancorp, Inc.'s Current Report on Form 8-K dated June 30, 1997,
filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
---------------------
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
September 29, 1997
