Sun Bancorp, Inc. /NJ (NASDAQ:SNBC)

CAPS Rating: 3 out of 5

A bank holding company headquartered in New Jersey whose principle subsidiary is Sun National Bank. Through the Bank, the Company provides consumer and business banking services.


Player Avatar TSIF (99.96) Submitted: 7/8/2010 4:47:52 PM : Underperform Start Price: $24.95 SNBC Score: +5.60

Sun Bancorp's shares jumped about 40% today on news that an investor known for smart investing in distressed assets purchased shares at $4.00 each. This was at a premium to the previous weeks share price. The surge to above $5.00, however seems to me to be overdone (for now). The $100 million investment will shore up the lending requirements of this New Jersey bank with 70 locations. Meeting the capital ratios required by the Fed should put Sun Bancorp out of any serious issues, but to sell about a 25% stake for $100 Million and double the common shares means that Sun Bancorp would need to double it's revenue to reward the remaining shareholders. The economy may be improving, but New Jersey has had it's share of troubles. Buying other smaller banks may be a catalyst for growth, but I think Sun Bancorp got ahead of itself. I don't see this as a huge CAPS play, but momentum rarely holds after a spike of this magnitude.

Featured Broker Partners