Sun Bancorp announced today it’s seeking Securities and Exchange Commission approval to raise up to $150 million through a stock sale, or through an offering of debt or other securities.
In a separate transaction, the Vineland-based financial institution also registered the shares of common stock that a company affiliated with billionaire investor Wilbur Ross and other investors acquired the shares in a September 2010 private placement. The registration will allow the investors to sell the shares on the open market.
“The registration was very routine,” Sun CEO Thomas X. Geisel said, referring to the $150 million SEC filing that would give the bank the right to sell shares during the next three years. “We have no immediate plans to execute it, but if an opportunity arises, we’ll be able to go after it.”
The bank “may be setting the stage to sell the securities when it returns to profitability,” said Peter J. Ostrowski, a former analyst at the Federal Reserve Bank of Boston who is now a managing director at Ostrowski & Co. Inc., a Cranford-based bank consulting firm. “Or it may indicate that the bank will sell the shares sooner, possibly to accelerate the resolution of its still-high level of non-performing assets.” The bank lost $1.6 million in the most recent quarter, according to its SEC filings.
Geisel said the registration of the private placement stock was done to satisfy the original contract with Ross and the other investors, which called for the registration to be completed by September.
“In the case of Sun, the agreement for the private placements in which we participated specifically required the company to maintain a shelf registration,” said Ross in an e-mail message. “Neither the bank nor my firm has any plans to sell shares any time soon. In the case of my firm, we actually just increased our commitment by subscribing to the maximum amount permitted in the recent stock offering, so it would be weird to turn right around and sell shares. We are not traders; we are long-term investors with generally a multiyear time horizon for our investments.”