Shares of Sun Bancorp, Inc. (Nasdaq: SNBC) surged 47 percent in morning trading on Thursday after the company announced that billionaire investor, Wilbur Ross will be acquiring a 25 percent stake in the New Jersey-based bank chain.
Ross, who has acquired stakes in banks in Florida and Michigan, said he expects thousands of U.S. banks to fail as a result of the financial crisis. Ross and the bank’s founding Brown family will buy $100 million of common and preferred stock at $4.00 a share, equal to a 24.9% stake, in Sun Bancorp, Inc., the parent of Sun National Bank. The transaction still has to be approved by shareholders.
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The Vineland-based Sun Bancorp, Inc. has $3.5 billion in assets and 70 branches in the state of New Jersey. Ross will join the boards of Sun Bancorp and Sun National, the bank said. Sun National Bank — Sun Bancorp’s main subsidiary — could be the first of many banks Ross acquires in New Jersey, he told the New York Times on Wednesday.
The cash injection would also raise Sun Bancorp’s Tier 1 risk-weighted capital — a common measure of capital strength — to 13 percent or above. The bank said that level was above the 9.5 percent required by the Office of the Comptroller of the Currency under an April agreement.
Check out this interview with Wilbur Ross, conducted in August of last year. Great insight into his views on the banking industry: