FORM 10-Q-QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 1999
-------------------------------------------------
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from ___________________ to __________________________
Commission File Number: 0-14745
--------------------------------------------------------
SUN BANCORP, INC. (SUN)
- --------------------------------------------------------------------------------
(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.)
PO Box 57, Selinsgrove, Pennsylvania 17870
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(570) 374-1131
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
N/A
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. [ ] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Common Stock, No Par Value 6,486,795
- ---------------------------------- -------------------------------------
Class Outstanding Shares At March 31, 1999
<PAGE>
SUN BANCORP, INC.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1999
CONTENTS Page
PART I - FINANCIAL INFORMATION
- ------------------------------
Item 1 - Financial Statements:
Consolidated Balance Sheet as of March 31, 1999 (Unaudited)
and December 31, 1998 3
Consolidated Statement of Income for the Three Months Ended
March 31, 1999 and March 31, 1998 (Unaudited) 5
Consolidated Statement of Cash Flows for the Three Months Ended
March 31, 1999 and March 31, 1998 (Unaudited) 7
Notes to the Consolidated Financial Statements (Unaudited) 9
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
PART II - OTHER INFORMATION
- ---------------------------
Item 4 - Submissions of Matters to a Vote of Security Holders 15
Item 5 - Other Information 15
Item 6 - Exhibits and Reports on Form 8-K 15
SIGNATURES 16
2
<PAGE>
SUN BANCORP, INC.
FORM 10-Q
PART I
Item 1. Financial Statements
SUN BANCORP, INC.
CONSOLIDATED BALANCE SHEET
(In Thousands, Except Share Data) March 31, 1999 December 31, 1998
(Unaudited) (Note)
-------------- -----------------
ASSETS
Cash and due from banks $ 8,521 $ 13,350
Interest-bearing deposits in banks 857 880
-------- --------
Total cash and cash equivalents 9,378 14,230
Securities available for sale 261,720 254,780
Loans, net 335,594 329,123
Bank premises and equipment, net 9,091 9,139
Intangible asset, goodwill-net 10,003 10,191
Accrued interest and other assets 8,899 6,114
-------- --------
Total assets $634,685 $623,577
======== ========
Note: The balance sheet at December 31, 1998 has been derived from the audited
financial statements at that date but does not include all the information
and footnotes required by generally accepted accounting principles for
complete financial statements.
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
SUN BANCORP, INC.
FORM 10-Q
PART I
Item 1. Financial Statements
SUN BANCORP, INC.
CONSOLIDATED BALANCE SHEET
(Continued)
(In Thousands, Except Share Data) March 31, 1999 December 31, 1998
(Unaudited) (Note)
-------------- -----------------
LIABILITIES & SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing $ 34,403 $ 36,429
Interest-bearing 328,451 327,457
Total deposits 362,854 363,886
--------- ---------
Short-term borrowings 18,040 25,750
Other borrowed funds 184,000 161,500
Accrued interest and other liabilities 4,769 4,640
--------- ---------
Total liabilities 569,663 555,776
--------- ---------
Shareholders' Equity:
Common Stock, No par value per share;
Authorized 20,000,000 shares;
Issued 6,629,790 shares in 1999 and
6,627,139 shares in 1998 72,949 72,913
Retained earnings (deficit) (4,139) (4,949)
Accumulated other comprehensive income (loss) (429) 2,016
Less: Treasury stock, at cost
142,995 shares in 1999 and
97,263 shares in 1998 (3,359) (2,179)
--------- ---------
Total shareholders' equity 65,022 67,801
--------- ---------
Total liabilities and
shareholders' equity $634,685 $623,577
========= ========
Note: The balance sheet at December 31, 1998 has been derived from the audited
financial statements at that date but does not include all the information
and footnotes required by generally accepted accounting principles for
complete financial statements.
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
SUN BANCORP, INC.
FORM 10-Q
PART I
Item 1. Financial Statements
SUN BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
-----------
(In Thousands, Except Per Share Data) For the Three Months
Ended March 31
--------------------
1999 1998
------- ------
Interest income:
Interest and fees on loans $ 7,246 $7,169
Income from available for sale securities:
Taxable 3,090 1,906
Tax exempt 609 657
Dividends 210 133
Interest on deposits in banks 63 94
------- ------
Total interest income 11,218 9,959
------- ------
Interest expense:
Interest on deposits 3,504 3,283
Interest on short-term borrowings 146 171
Interest on other borrowed funds 2,411 1,507
------ ------
Total interest expense 6,061 4,961
------ ------
Net interest income 5,157 4,998
Provision for possible loan losses 450 300
------ ------
Net interest income, after provision
for possible loan losses 4,707 4,698
------- ------
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
SUN BANCORP, INC.
FORM 10-Q
PART I
Item 1. Financial Statements
SUN BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
-----------
(Continued)
(In Thousands, Except Per Share Data) For the Three Months
Ended March 31
--------------------
1999 1998
------ ------
Other operating income:
Service charges on deposit accoun $ 271 $ 280
Trust income 159 120
Net security gains 592 310
Income from insurance subsidiary 53 40
Other income 221 129
------ ------
Total other operating income 1,296 879
------ ------
Other operating expense:
Salaries and employee benefits 1,539 1,460
Net occupancy expenses 177 181
Furniture and equipment expenses 256 219
Amortization of goodwill 189 189
Expenses of insurance subsidiary 1 76
Other expenses 718 720
------ ------
Total other operating expense 2,880 2,845
------ ------
Income before income tax provision 3,123 2,732
Income tax provision 880 689
------ ------
Net income $2,243 $2,043
====== ======
PER SHARE DATA
- --------------
Net income per share - Basic $0.34 $0.31
====== ======
Weighted average number of shares
outstanding - Basic 6,518,578 6,516,463
========= =========
Net income per share - Diluted $0.34 $0.31
====== ======
Weighted average number of shares
outstanding - Diluted 6,569,528 6,598,431
========= =========
Dividends paid $0.220 $0.190
====== ======
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
SUN BANCORP, INC.
FORM 10-Q
PART I
Item 1. Financial Statements
SUN BANCORP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
-----------
(In Thousands) For the Three Months
Ended March 31
--------------------
1999 1998
-------- --------
Cash flows from operating activities:
Net income $ 2,243 $ 2,043
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for possible loan losses 450 300
Provision for depreciation 187 255
Amortization of goodwill 189 188
Amortization and accretion of securities, net 53 57
Net security gains (592) (310)
Decrease in accrued interest and
other assets 789 1,643
Increase (decrease) in accrued interest and
other liabilities 129 (570)
-------- --------
Net cash provided by operating activities 3,448 3,606
-------- --------
Cash flows from investing activities:
Proceeds from sales of available for sale securities 19,124 758
Proceeds from maturities of available for sale securities 12,485 8,504
Purchases of available for sale securities (41,717) (32,818)
Net increase in loans (9,234) (157)
Capital expenditures (139) (159)
-------- --------
Net cash used in investing activities (19,481) (23,872)
-------- --------
Cash flows from financing activities:
Net (decrease) increase in deposits (1,032) 13,732
Net decrease in short-term borrowings (7,710) (4,099)
Proceeds from other borrowed funds 25,000 45,000
Repayments of other borrowed funds (2,500) (15,000)
Cash dividends paid (1,433) (1,242)
Proceeds from sale of stock for employee benefits program 36 228
Purchase of treasury stock (1,180) -
-------- --------
Net cash provided by financing activities 11,181 38,619
-------- --------
Net (decrease) increase in cash and cash equivalents (4,852) 18,353
Cash and cash equivalents at beginning of period 14,230 8,959
-------- --------
Cash and cash equivalents at end of period $ 9,378 $27,312
======== ========
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
SUN BANCORP, INC.
FORM 10-Q
PART I
Item 1. Financial Statements
SUN BANCORP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
-----------
(Continued)
<TABLE>
(In Thousands) For the Three Months
Ended March 31
--------------------
1999 1998
---- ----
<S> <C> <C>
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $5,883 $4,830
Income taxes 235 -
</TABLE>
Loans with an estimated value of $119,000 and $27,000
were reclassified to other real estate owned, during
the three-month periods ended March 31, 1999 and 1998,
respectively.
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
SUN BANCORP, INC.
FORM 10-Q
PART I
Item 1. Financial Statements
SUN BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
-----------
Note 1 - Basis of Presentation
---------------------
The consolidated financial statements include the accounts of SUN BANCORP,
INC. (SUN), the parent company, and its wholly-owned subsidiaries Sun Bank
(Bank) and Pennsylvania Sun Life Insurance Company. The Bank does business as
Snyder County Trust Company, Central Pennsylvania Bank, Bucktail Bank and Trust
Company, and Watsontown Bank. All significant intercompany balances and
transactions have been eliminated in consolidation.
The accompanying unaudited consolidated financial statements for the interim
periods do not include all of the information and footnotes required by
generally accepted accounting principles. However, in the opinion of
management, all adjustments necessary for a fair presentation of the results of
the interim period have been included. Operating results for the three months
ended March 31, 1999 are not necessarily indicative of the results that may be
expected for the year ended December 31, 1999.
The accounting policies followed in the presentation of interim financial
results are the same as those followed on an annual basis. These policies are
presented on pages 8 and 9 of the 1998 Annual Report to Shareholders.
9
<PAGE>
SUN BANCORP, INC.
FORM 10-Q
PART I
Item 1. Financial Statements
Note 2 - Consolidated Statement of Comprehensive Income
----------------------------------------------
The purpose of reporting comprehensive income is to report a measure of all
changes in SUN's equity that result from economic events other than transactions
with shareholders in their capacity as shareholders. For SUN, "comprehensive
income" includes traditional income statement amounts as well as unrealized
gains and losses on certain investments in debt and equity securities (i.e.
available for sale securities). Because unrealized gains and losses are part of
comprehensive income, comprehensive income may vary substantially between
reporting periods due to fluctuations in the market prices of securities held.
This is evidenced by the fact that SUN's net income increased for the three
months ended March 31, 1999, compared to the same corresponding period in 1998,
but comprehensive income over the same period has declined.
(In Thousands) For the Three Months
Ended March 31
--------------------
1999 1998
------- -------
Net Income $2,243 $2,043
------- -------
Other comprehensive income (loss):
Unrealized holding gains (losses) on
available for sale securities:
Gains (losses) arising during the period (3,113) (916)
Reclassification adjustment - realized
gains included in net income (592) (310)
------- -------
Other comprehensive income (loss)
before income tax provision (3,705) (1,226)
Income tax expense/benefit related to
other comprehensive income (loss) 1,260 417
------- -------
Other comprehensive income (loss) (2,445) (809)
------- -------
Comprehensive income (loss) $ (202) $1,234
======= =======
10
<PAGE>
SUN BANCORP, INC.
FORM 10-Q
PART I
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following is management's discussion and analysis of the significant
changes in the results of operations, capital resources, and liquidity presented
in its accompanying consolidated financial statements for SUN BANCORP, INC., a
bank holding company, and its wholly-owned subsidiary, Sun Bank. SUN also owns
a captive insurance company, the Pennsylvania SUN Life Insurance Company, that
provides credit life and disability insurance to Sun Bank's credit customers.
SUN's consolidated financial condition and results of operations consist almost
entirely of the Bank's financial condition and results of operations. This
discussion should be read in conjunction with the 1998 Annual Report. Current
performance does not guarantee or assure similar performance in the future, and
may not be indicative of future results.
SUN's net income for the three months ended March 31, 1999 amounted to
$2,243,000, an increase of 9.79% over the same period of 1998. Basic and
diluted earnings per share were $.34 and $.31, respectively, for the three
months ended March 31, 1999 and 1998. SUN achieved a 1.43% Return on Average
Assets and a 13.18% Return on Average Equity for the three months ended
March 31, 1999, compared to ratios of 1.55% and 12.34% for the previous
comparable period. Without the effect of goodwill, SUN's ROA would be 1.57% and
ROE would be 16.77% for the three months ended March 31, 1999 compared to ratios
of 1.73% and 16.09% for the previous comparable period.
Results of Operations - Three Months Ended March 31, 1999 and 1998
- ------------------------------------------------------------------
Net interest income increased to $5,157,000 from $4,998,000 for the three
months ended March 31, 1999 and 1998 respectively. Total interest and dividend
income increased $1,259,000 to $11,218,000 for the three months ended March 31,
1999. A majority of this increase, $1,184,000, is the result of our increased
investment in mortgage-backed securities. Total interest expense increased
$1,100,000 for the three months ended March 31, 1999 as compared to 1998. Of
the increase, $879,000 is the result of increased borrowings which were
reinvested in higher yielding mortgage-backed securities as noted above. In
addition, the provision for possible loan losses increased 50.0% to $450,000 for
the three months ended March 31, 1999. The change is due to increased net loan
charge offs and growth in our net loan portfolio of $27,348,000 from March 31,
1998 to March 31, 1999.
Total other operating income increased $417,000 or 47.4%, for the three months
ended March 31, 1999 compared to the same period of 1998. Net security gains,
primarily from the sales of equity securities and prefunded tax free municipal
bonds, were $592,000 for the three months ended March 31, 1999 compared to gains
of $310,000 for the same period in 1998. Trust income increased 32.5% to
$159,000 from $120,000 for the three months ended March 31, 1998. Other income
increased 71.3% to $221,000 from $129,000 for the three months ended March 31,
1998. The increase is primarily the result of non-yield related loan fees
increasing to $86,000 from $32,000 for the three months ended March 31, 1998. A
majority of the remaining change is the result of a change in the recognition of
the expenses related to SUN's limited partnership investment in two affordable
elderly housing projects.
11
<PAGE>
SUN BANCORP, INC.
FORM 10-Q
PART 1
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Other operating expenses increased to $2,880,000 for the three months ended
March 31, 1999, compared to $2,845,000 in the same period of 1998. Expenses of
the insurance subsidiary decreased to $1,000 from $76,000 for the three months
ended March 31, 1998. This reduction was due to a decrease in the required
claim reserves which offset claims incurred during the same period. Net
occupancy and furniture and equipment expenses increased 8.3% to $433,000
primarily due to expenses incurred in the setup and furnishing of a temporary
office at our new Maynard Street, Williamsport location during construction.
Balance Sheet - March 31, 1999 and December 31, 1998
- ----------------------------------------------------
Total assets were $634,685,000 at March 31, 1999, an increase of 1.8% from
$623,577,000 at December 31, 1998. Cash and cash equivalents decreased
$4,852,000 or 34.1% from $14,230,000 at December 31, 1998. The decrease
occurred as SUN's management reinvested the cash in mortgaged-backed securities
and used the cash to aid the funding of the increased net loan volume of
$6,471,000 or a 2.0% increase from December 31, 1998. Securities available for
sale increased by $6,940,000 or 2.7%. The investment portfolio is mainly
comprised of mortgage-backed securities and state and municipal bonds. The
intangible asset, goodwill, was reduced to $10,003,000 at March 31, 1999. Also,
total liabilities increased $13,887,000, or 2.5% to $569,663,000 at March 31,
1999. Deposits decreased by $1,032,000 to $362,854,000 at March 31, 1999.
Total borrowed funds increased $14,790,000, or 7.9% to $202,040,000 at March 31,
1999 with the Federal Home Loan Bank of Pittsburgh (FHLB) term borrowings
increasing $22,500,000 while decreases occurred in other short term borrowings.
These additional borrowings were made to take advantage of special rates offered
by the FHLB. Management reinvested the additional borrowed funds in additional
mortgage-backed securities, which aided in increasing the net interest income.
SUN's total shareholders' equity decreased $2,779,000 or 4.1% from December 31,
1998 to March 31, 1999. The decrease in shareholders' equity is the result of
two factors. First, SUN has purchased 45,732 shares of treasury stock with a
cost of $1,180,000 over the first quarter of 1999. Secondly, SUN currently has
an accumulated other comprehensive loss of $429,000 as compared to accumulated
other comprehensive income of $2,016,000 at December 31, 1998. Accumulated
other comprehensive income is a volatile component of shareholders' equity as it
is derived from changes in the stock and bond markets.
Allowance for Possible Loan Losses
- ----------------------------------
Losses on loans are charged against the allowance in the period in which they
have been determined to be uncollectible. Recoveries of loans previously
charged off are credited to the allowance as they are received. A monthly
review of the allowance for possible loan losses is done to determine the
collectibility of certain loans based on internal analysis and management's
assumptions as to the ability of the borrower to service the loan. As of
March 31, 1999, the allowance for possible loan losses was $3,493,000. This
allowance amount represents 1.03% of total loans. Management deems the
allowance to be adequate; however, future additions may be necessary based on
economic, market, or other unforeseeable conditions. Although management makes
its best estimate as to the additions to the allowance, there can be no
assurance that future material additions may not be needed.
12
<PAGE>
SUN BANCORP, INC.
FORM 10-Q
PART I
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Capital Adequacy
- ----------------
Management believes capital is being maintained at adequate levels. SUN paid
a cash dividend of $.220 per share to its shareholders on March 12, 1998. SUN's
strong capital position is evidenced by the following capital ratios which are
well above the regulatory minimum levels.
(In Thousands) For Capital
Actual Adequacy Purposes
-------------------- -----------------
Amount Ratio Ratio
------- ----- -----
As of March 31, 1999:
- ---------------------
Total Capital $59,093 17.8% 8.0%
(to Risk Weighted Assets)
Tier I Capital 55,448 16.7% 4.0%
(to Risk Weighted Assets)
Tier I Capital 55,448 9.0% 4.0%
(to Average Assets)
As of December 31, 1998:
- ------------------------
Total Capital $59,336 17.0% 8.0%
(to Risk Weighted Assets)
Tier I Capital 55,594 15.9% 4.0%
(to Risk Weighted Assets)
Tier I Capital 55,594 9.7% 4.0%
(to Average Assets)
Regulatory and Industry Merger Activity
- ---------------------------------------
From time to time, various types of federal and state legislation have been
proposed that could result in additional regulation of, and restrictions on, the
business of SUN and Sun Bank. It cannot be predicted whether such legislation
will be adopted or, if adopted, how such legislation would affect the business
of SUN and Sun Bank. As a consequence of the extensive regulation of commercial
banking activities in the United States, SUN's and Sun Bank's business is
particularly susceptible to being affected by federal legislation and
regulations that may increase the costs of doing business. Except as
specifically described above, management believes the effect of the provisions
of legislation on the liquidity, capital resources, and results of operations of
SUN will be immaterial. Management is not aware of any other current specific
recommendations by regulatory authorities or proposed legislation, which if they
were implemented, would have a material adverse effect upon the liquidity,
capital resources, or results of operations, although the general cost of
compliance with numerous and multiple federal and state laws and regulations
does have, and in the future may have, a negative impact on SUN's results of
operations.
13
<PAGE>
SUN BANCORP, INC.
FORM 10-Q
PART I
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Further, the business of SUN is also affected by the state of the financial
services industry in general. As a result of legal and industry changes,
management predicts the industry will continue to experience an increase in
consolidations and mergers as the financial services industry strives for
greater cost efficiencies and market share. Management also expects increased
diversification of financial products and services offered by Sun Bank and its
competitors. Management believes that such consolidations and mergers, and
diversification of products and services may enhance its competitive position as
a community bank.
Year 2000 Readiness
- -------------------
SUN's Year 2000 Project Team consists of members from every business unit in
the company. Continuous progress is being made to assure the company's
readiness for Year 2000 compliance. Because of the unprecedented nature of the
Year 2000 issue, its effects and the success of SUN's remediation efforts will
not be fully determinable until the Year 2000 and thereafter. The Year 2000
project has top management's fullest support and is considered one of the
corporation's highest priorities.
Although SUN performs its core application processing in-house, it relies
heavily on external vendors for all Mission Critical Systems. None of these
systems are developed or designed in-house. To date, all known systems and
vendors have been evaluated or contacted and are continually being monitored.
The vendors of the Mission Critical Systems have indicated they are in
compliance. In addition to the system certification by the Mission Critical
vendors, SUN has also performed its own in-house testing of these systems and
identified system interfaces.
The Project Team has been developing and fine tuning contingency plans that
can be readily instituted in the case of any Mission Critical Systems being
unavailable. Individual sub-task teams have been formed to create and test
these plans. This process will continue throughout 1999 to insure the soundness
of the plans. In addition, SUN's employees have undergone and will continue to
partake in training sessions related to various Y2K issues.
It is anticipated that the Year 2000 project will be completed ahead of the
dates in the guidelines established by the Federal Financial Institutions
Examination Council (FFIEC). Senior management has reported Year 2000 progress
to SUN's Board of Directors on a quarterly basis. To date, there have been no
significant problems identified and the renovation phase for Year 2000 has not
had a material financial effect on the bank. The total cost through December
31, 1998, excluding our personnel costs, is under $25,000. Additional external
costs in 1999 are expected to be minimal.
14
<PAGE>
SUN BANCORP, INC.
FORM 10-Q
PART II
Items 1, 2, and 3 -- Omitted pursuant to instructions to Part II
Item 4 -- Submission of Matters to a Vote of Security Holders
a. SUN BANCORP, INC. held its 1999 Annual Meeting on Thursday, April 22, 1999
b. This information is incorporated by reference to Exhibit 1, item number
one. Those directors whose term of office continued after the meeting
are:
Thomas B. Hebble Max E. Bingaman
Jeffrey E. Hoyt Stephen J. Gurgovits
Paul R. John Robert A. Hormell
Fred W. Kelly, Jr. Lehman B. Mengel
Jerry A. Soper Howard H. Schnure
Marlin T. Sierer
c. This information is incorporated by reference to Exhibit 1.
d. None
Item 5 -- Other information
The registrant's Board of Directors continued the authorization for the
repurchase of up to 5% of SUN BANCORP, INC.'s outstanding shares. The stock
buy-back program is effective until April 2000. The purchased shares will be
used for general corporate purposes.
The Board of Directors also approved a 5% stock dividend and an increased
quarterly dividend payment from $.220 per share to $.225 per share for
stockholders of record May 28, 1999 payable June 11, 1999.
Item 6 -- Exhibits and Reports on Form 8-K
a. No reports on Form 8-K were filed for the quarter ending March 31, 1999.
15
<PAGE>
SUN BANCORP, INC.
FORM 10-Q
PART II
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 5/14/99 /s/ Fred W. Kelly, Jr.
--------------------- -----------------------------
Fred W. Kelly, Jr.
Chief Executive Officer
(Principal Executive Officer)
/s/ Jeffrey E. Hoyt
-----------------------------
Jeffrey E. Hoyt
Executive Vice President,
Chief Operating Officer and Secretary
(Principal Financial Officer and
Principal Accounting Officer)
SUN BANCORP, INC.
PO Box 57
Selinsgrove, PA 17870
(570) 374-1131
16
<PAGE>
SUN BANCORP, INC.
ANNUAL MEETING OF SHAREHOLDERS
APRIL 22, 1999
CERTIFICATE OF JUDGES OF ELECTION
We, Stephen G. Kaiser, Willard J. Bowen, Charles C. Snyder and Charles W.
Groce (Alternate), Judges of Election at the Annual Meeting of Shareholders of
SUN BANCORP, INC. held on April 22, 1999, hereby certify as follows:
a) That we have reviewed the list of shareholders, proxies and other
relevant papers and records in connection with the aforesaid meeting:
b) That there are, and were, at the close of business on March 4, 1999, the
record date for the aforesaid meeting, 6,516,691 shares of the
Corporation outstanding:
c) That we have examined all of the proxies submitted to us with respect to
the aforesaid meeting:
d) That there were present in person or by valid proxy, the holder of
5,685,297 shares:
e) That we have counted and tabulated all ballots submitted by the aforesaid
holders, in person or by proxy:
f) That the vote for the election of five (5) directors to the Corporation
whose terms end as indicated below is as follows:
David R. Dieck, 3 year term to expire in 2002
FOR 5,680,903 AGAINST 4,394
Louis A. Eaton, 3 year term to expire in 2002
FOR 5,645,900 AGAINST 39,397
Dr. Robert E. Funk, 3 year term to expire in 2002
FOR 5,681,852 AGAINST 3,445
George F. Keller, 3 year term to expire in 2002
FOR 5,683,473 AGAINST 1,824
Dennis J. Van, 3 year term to expire in 2002
FOR 5,681,860 AGAINST 3,437
<PAGE>
g) To ratify the appointment of Parente, Randolph, Orlando, Carey &
Associates, Certified Public Accountants as the independent certified
public accountants for SUN BANCORP, INC. for the year 1999.
FOR 5602,850 AGAINST 19,363 ABSTAIN 63,083
Judges of Election
/s/ Stephen G. Kaiser
----------------------------
Stephen G. Kaiser
/s/ Willard J. Bowen
----------------------------
Willard J. Bowen
/s/ Charles C. Snyder
----------------------------
Charles C. Snyder
/s/ Charles W. Groce
----------------------------
Charles W. Groce (Alternate)
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