Sun Bancorp, Inc., CEO Interview: Thomas X. Geisel

• On 12:07 pm EDT, Tuesday October 6, 2009

67 WALL STREET, New York - October 6, 2009 - The Wall Street Transcript has just published its Northeast and Mid-Atlantic Regional Banks Report offering a timely review of the sector to serious investors and industry executives. This 130 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Residential Mortgage Situation -- Regional Banks Mergers and Acquisitions Timing Strategy -- Commercial Mortgage Portfolio Decay -- Timing Of Commercial Mortgage Portfolio Bad Debt Write Offs-- FDIC Hit List For Bank Closings -- Mutual Holding Company Structure -- Interest Rate Scenarios -- Banking Pricing Power -- Expensive Bank Valuations -- Tangible Book As Guide For Bank Stock Pricing -- Distressed Sales Of Community and Regional Banks -- TARP Program -- Attitude Of Institutional Investors Towards Resurgence in Community Banking -- Unique Business Models -- Regional Bank Boards Looking For Exit

Companies include: BB and T (BBT); Colonial (CNB); First Niagara (FNFG); PNC (PNC); National City (NCC-PA); Harleysville National (HNBC); Citizens First Bancorp (CTZN); Regions Financial (RF); Bank of America (BAC); SunTrust Banks (STI); Pinnacle Financial (PNFP); Northwest Bancorp Inc. (NWSB); Beneficial (BNCL); Investor Savings Bancorp (ISBC); Territorial Bancorp (TBNK); FNB Bancorp (FNBG.OB); National Penn (NPBC); Trustco Bank (TRST); KeyBank (KEY); M and T Bank (MTB); New York Community Bancorp (NYB); Bank of New York Mellon (BK); Wells Fargo and Company (WFC); JPMorgan Chase and Co. (JPM); Wachovia (WB); Harleysville Savings Bank (HARL); SVB Financial (SIVB); Signature Bank (SBNY); Provident Bank (PBKS); Valley National Bank (VLY); Community Bank System (CBU); NBT Bankcorp (NBTB); Fulton (FULT); Citibank ©; Allied Irish (AIB); Bank of Hawaii (BOH); First Horizon Bank (FHN); Comerica (CMA); Synovus (SNV); Zions (ZION); South Financial Group (TSFG); Bancorp (TBBK); Legg Mason (LM); IBERIABANK Corp. (IBKC); Wilmington Trust (WL); S and T Bancorp (STBA); PHH (PHH); Goldman Sachs (GS); Citigroup ©; U.S. Bancorp (USB); Fifth Third Bancorp (FITB); KeyCorp (KEY); Lehman Brothers; Colonial; Washington Mutual; TD Banknorth (TD), Lakeland (LBAI), Westfield Financial, Inc. (WFD), United Financial Bancorp, Inc. (UBNK), Chicopee Bancorp, Inc. (CBNK)

In the following brief excerpt from the 130 page report, Thomas X. Geisel, CEO of Sun Bancorp, Inc., discusses the outlook for the sector and for investors.

TWST: Let's start out with a brief overview and a summary of Sun Bancorp.

Mr. Geisel: Sun National Bank was started in 1985, so 2010 will be our 25th anniversary. We are a full-service financial institution, serving New Jersey businesses and families. We have 70 locations throughout New Jersey, $3.6 billion in assets, $2.7 billion in loans, $2.8 billion in deposits and over 80,000 customers. Our two core businesses are our consumer business and our commercial business. Through our consumer business, we provide core consumer and small-business products, including mortgages and home equity loans through Sun Home Loans. We also have Sun Financial Services, providing branch-based brokerage services, annuities, mutual funds and insurance to our customers who work with and have a relationship in our retail offices. Moving to the commercial side, we also provide the core commercial products and services to business owners in order to help them efficiently run their business. In addition to traditional and core commercial products, we have specialty lending businesses, which include our health care, construction, real estate and asset-based lending lines of business, a government banking business and Sun Wealth Management, which is a wealth-management and estate-planning platform that caters to our commercial client owners and managers.

TWST: What are some of the key factors that differentiate your bank from its competition? Is it the business focus, your geography, the quality of your assets?

Mr. Geisel: At $3.6 billion in size, we're the second largest commercial bank based in New Jersey, so we have one commercial bank larger than us and then we have the super-regionals and the national banks way above that. Then below us are the community banks. With that, we have a unique place in the market. We believe that we execute in a manner apart from other banks - whether large or community - and I think that's the major differentiator for us. We have local people in local markets making local decisions. And to that effect, we bring the best of both worlds to our customers. We offer the core comprehensive products and services, as well as sophisticated products and services that the larger banks offer. Yet we still have touch with our communities and our delivery model is local. That's our competitive advantage.

TWST: What is the company's financial snapshot, balance sheet, P&L and asset levels? Which areas are your strengths and which may need a bit of work?

Mr. Geisel: You have to understand the landscape of this marketplace and where we fit in. Again, as the second largest commercial bank based in New Jersey, we have a lot of opportunities on both the consumer and commercial side of the house. When you add to that the economic factors that are currently in play - where many of the larger banks have scaled back operations or changed focuses, and where many of the smaller banks are meeting some difficulties because of being singularly product focused - we have opportunities to separate ourselves. Many banks have just been focused on real estate. And with real estate - both commercial and residential - feeling some stress right now, those banks are not as active in the market as they were before. This has left a major void in the marketplace for a bank that is secure and lending, which Sun is, and for a bank who can run the gamut from the consumer to the business owner - again that's Sun. So based on that landscape, there are major opportunities for us and a few areas of focus. They are: diversifying our revenue streams, increasing our margins, optimizing our franchise and creating additional awareness through marketing and branding.

TWST: Last September we saw the collapse of Lehman Brothers. We saw major panic in the financial services sector, the debut of TARP. Would you take us back to this time of turmoil in the economy and tell us how Sun Bancorp has fared?

Mr. Geisel: If you rewind a little bit over a year now the industry saw dozens of catastrophic events. Even if one of those events had happened in any one year, they would have been disastrous to the economy. And we literally had dozens of them. We had a 400-bp decline in fed funds and LIBOR that year. Each consecutive Monday was worse than the prior Friday. So we had a lot of uncertainty in the marketplace as to what the economy was doing, what banks were doing and what the stability of the financial system was. Then came TARP and the stimulus plan. Both were put in place for the right reasons - to stabilize the economy and to give strong banks an opportunity to put forward stimulus, help weather the storm and come out of the recession. They also were put in place to give weaker banks higher capital levels so that they could basically stay in business. Unfortunately during this time, all banks were painted with the same "bad-bank" brush. When that happened, that's when we at Sun felt we had to be very proactive in what we did in the marketplace. As far back as last fall we went on the radio and used different media to describe to our market and our customers who we are and why we are different than the troubled banks. We continued that proactive approach into this year and as a result, came out of the TARP phase very quickly. We did take TARP funds - $89.3 million - but were one of the first in the country to return it and, in fact, held the money for about 90 days. We communicated that to all of our constituents, and I think have come out of it with our reputation intact.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 130 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

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