Sun Bancorp Inc., which has its executive offices in Mount Laurel, on Thursday announced a “comprehensive restructuring” that will include the loss of jobs, sale or closure of branches, and elimination of business units.
The parent of Sun National Bank said in a news release that it would reduce its workforce by 38 percent, or 242 full-time jobs, and its branch count by 30 percent, taking a $20 million one-time charge in its second quarter. The company also named a new CEO and president and declared a 1-for-5 reverse stock split effective Aug. 11.
Thomas M. O’Brien, who had served as a consultant since April 1, was officially appointed president and CEO and elected to the board of directors, effective July 2. In addition, the board of directors unanimously approved his plans for the restructuring, according to the release.
"These unfortunate conditions require very unpleasant reductions to our staff but our decisions must be judged in view of the primary objective of returning to profitability," O'Brien said in the release. "Current staffing levels at the Company are not sustainable. As a company, we must effectively address outstanding regulatory matters and build operating profitability."
The changes also include the sale of seven branches and consolidation of four more.
"A strategic evaluation of where to best invest our capital and resources found that the Central and Northern regions of New Jersey provide a better opportunity for growth," O'Brien said. "In addition to the announced branch sales and consolidations, the Company will also explore further initiatives, which may include additional branch sales or consolidations, to further reduce operating costs by exiting certain portions of its retail network in slower growth portions of Southern New Jersey, with the objective of right-sizing its branch network by the end of the first quarter of 2015.”
Further, the company announced it will shutter its Sun Home Loans retail mortgage banking unit and quit the health care and asset-based lending markets, as well as close its syndicated lending desk.
"We have evaluated and decided to exit business lines in which the company is not profitable," O'Brien said. "The company will focus on those businesses where it can offer a strong menu of commercial banking products and services. The objective is for our branch offices to serve as competitive, best-in-class deposit-gathering and relationship-building centers in our communities, with the appropriate technology to support evolving customer trends. We must right-size our platform and remediate our remaining regulatory issues, so that we can efficiently generate positive earnings, support healthy growth and execute on revenue enhancement strategies."
Sun also sold millions of dollars in loans, reduced or redesigned its employee benefit plans and legally changed its headquarters location to Mount Laurel.
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