Sun Bancorp to Cut 30% of Branch Offices and 38% of Its Employees

Sun Bancorp to Cut 30% of Branch Offices and 38% of Its Employees

Sun Bancorp, parent of Sun National Bank, announced it will cut 30 percent of its branch offices and 38 percent of its employees as part of a major restructuring plan to help offset its financial problems. Sun will also move its headquarters from Vineland to Mount Laurel, NJ.

In reducing the number of its branch offices from 50 to 39, Sun will sell all six of its offices in Cape May County and one in Somers Point, Atlantic County, to Sturdy Bank, which is headquartered in Cape May Court House. The Sun offices in Cape May County are in Wildwood Crest, Rio Grande, Tuckahoe, North Wildwood, Cape May Court House and Cape May.

Sturdy Bank said the acquisition is subject to regulatory approval by the FDIC and the New Jersey Department of Banking and Insurance, as well as "the satisfaction of customary closing conditions." The acquisition is expected to be completed in the first quarter of 2015.

Sun said it would also consolidate four overlapping branches in the North and Central Jersey counties of Somerset, Monmouth and Hunterdon and would consider future consolidation in slower growth portions of South Jersey.

As part of its plan, Sun eliminated its home mortgage and commercial specialty business units, accelerated disposition of $96 million of problem loans, took a one-time $20 million charge in the second  quarter and installed veteran New York banker Thomas M. O'Brien as president and CEO.

Although Sun said its retail mortgage division, Sun Home Loans, will immediately stop accepting new loan applications, it will honor all approved loans for their required terms. Among the company's other cost-cutting measures are reducing vacation allotments for bank officers, redesigning benefit plans and no longer providing executives with company-owned automobiles. The bank's board also declared a one-for-five reverse stock split effective August 11, 2014 for shareholders of record as of August 8, 2014.