Sun Bancorp Net Income Reflects Branch Consolidations, Charges to Improve Operating Efficiency; Dansbury to Become COO, Replace CEO Bracken on an Interim Basis; Widely Regarded Industry Expert Anat Bird Named Director

Market Wire, January, 2007

Sun Bancorp, Inc. (NASDAQ: SNBC) today reported net income of $4.5 million, or $.21 per share, for the quarter ended December 31, 2006, compared to net income of $4.6 million, or $.23 per share, for the fourth quarter of 2005. Net income for the fourth quarter 2006 includes pre-tax charges of approximately $1.1 million ($.03 per share) related to two branch consolidations and severance expense.

Net income for the year ended December 31, 2006 was $17.3 million, or $.81 per share, compared to net income of $19.5 million, or $.96 per share, for the prior year. The full-year results included approximately $1.6 million (pre-tax) in branch rationalization and severance related charges. These charges, net of tax, amounted to $.05 per share.

The Board of Directors of Sun Bancorp has requested the resignation of President and Chief Executive Officer Thomas A. Bracken and is now working to mutually resolve the agreement under which he will separate from the company. In the interim, A. Bruce Dansbury, executive vice president and chief credit officer, has been appointed chief operating officer and will serve until a replacement for Bracken is named. The Company's Board of Directors will conduct a nationwide search for a new chief executive officer beginning immediately. In explaining the reasons why the Board of Directors asked Mr. Bracken to submit his resignation, Sidney R. Brown, vice chairman, treasurer and secretary of the Company, stated, "Tom Bracken will be leaving the Company after six years of leadership in a turnaround situation. We all agree that Sun Bancorp is a far better company and a much stronger competitor in New Jersey today than it was when Tom first became our CEO. The ultimate goal of the Company that is shared by our Board and stockholders is for Sun to become a high-performing community banking company. While much progress has been made toward this goal under Tom's leadership, we would like to have been further along in reaching this goal than we are currently. Clearly, we are moving in the right direction, but we want to accelerate this process and we believe at this time that a leadership change may help accomplish this goal. We plan immediately to begin a nationwide search for a new CEO who can take our Company to this next level. Until such time, Bruce Dansbury will be our interim chief operating officer and will head up the Company on a day-to-day basis as we begin the process of identifying and selecting a new CEO."

"Excluding the $1.1 million severance and branch consolidation charges in the fourth quarter of 2006, our net income increased 12.3% over the fourth quarter of 2005. This reflects good underlying momentum that we have been working to build for three quarters now," said Dansbury. "We have implemented permanent savings and process improvements throughout 2006, a time in which the entire banking industry faced many difficult operating challenges."

"As we execute on our goal to transform Sun National Bank into a high performing dominant bank within our footprint, we do so with a strong commercial banking team that has produced loan growth of 16.4% during 2006, or 10.3% adjusted for loans acquired in the January 2006 Advantage acquisition. Under the leadership of Jeff Hawkins, an evolving new retail banking team is working within an integrated sales-driven system that we expect will eventually achieve a level of success that rivals our commercial banking business," said Dansbury.

Citing key factors driving results during the fourth quarter, Dansbury said that the Company continues to experience good sequential loan growth, and positive deposit growth for the quarter, although at higher costs, which was anticipated in support of the retail initiative. Operating non-interest income and operating non-interest expense are both trending favorably over the linked third quarter. Overall credit quality trends remain stable. The Company has been and remains very prudent in its credit underwriting standards in this highly competitive banking environment, according to Dansbury.

The Board of Sun Bancorp has appointed Anat M. Bird to fill the board seat vacated as a result of the previously announced resignation of Howard Schoor in mid-December. Ms. Bird is a renowned banking expert and CEO of SCB Forums. She facilitates over 45 meetings of bank executives across all bank disciplines and also serves on several other bank boards. Ms. Bird was engaged by Sun Bancorp in June to develop a program to build a cohesive, bank-specific sales culture and process, which is aimed at producing a sustainable competitive advantage for Sun's retail network. Her effort was completed during the third quarter.

The following is an overview of the key financial highlights for the quarter:

--  Total assets of $3.329 billion at December 31, 2006, compared to
    $3.264 billion at September 30, 2006, and $3.108 billion at December 31,
    2005. On January 19, 2006, the Company acquired assets of approximately
    $164 million and recorded purchase adjustments of approximately $23 million
    from the acquisition of Advantage Bank.
--  Total loans before allowance for loan losses grew 16.4% over the prior
    year to $2.386 billion at December 31, 2006.  Excluding approximately $125
    million in loans acquired in the Advantage acquisition, loans were up 10.3%
    over this same period.  On a linked quarter basis, loans increased 3.0%
    normalized for approximately $35 million in prepayments.
--  Total non-performing assets were $15.2 million at December 31, 2006,
    or .64% of total loans and real estate owned, compared to $11.6 million, or
    .56% of total loans and real estate owned, at December 31, 2005. On a
    linked quarter basis, total non-performing assets increased $481,000. The
    allowance for loan losses to total loans is 1.08% at December 31, 2006,
    compared to 1.10% at September 30, 2006 and December 31, 2005.
--  The investment portfolio at December 31, 2006, of $505.1 million,
    decreased $224.0 million, or 30.7%, over December 31, 2005. As has been our
    strategy, portfolio liquidity has continued to supplement deposit funding
    for loan growth. For 2007, the average investment portfolio is expected to
    be maintained at approximate current levels.
--  Total deposits grew 8.0% over the prior year to $2.668 billion at
    December 31, 2006.  Excluding approximately $149 million in deposits
    acquired in the Advantage acquisition, deposits increased 1.9% over this
    same period.  On a linked quarter basis, deposits increased $31.5 million
    or 1.2%.
--  Net interest income (tax-equivalent basis) for the fourth quarter of
    $24.8 million is flat to the comparable prior year end period and decreased
    $424,000 over the linked quarter. Net interest margin for the quarter of
    3.37% decreased, as forecasted, over the linked third quarter margin of
    3.51%. The margin decline for the quarter was attributable primarily to a
    29 basis points increase in costs of interest-bearing deposits attributable
    to the Bank's promotional deposit pricing in support of the retail
    transformation initiative.
--  Total operating non-interest income for the quarter of $5.3 million
    increased $850,000, or 18.9%, over the comparable prior year period and
    increased 1.4% over the linked third quarter. Total operating non-interest
    income for the year 2006 of $20.1 million increased $2.6 million, or 15.0%,
    over 2005. The primary increase year-over-year was attributable to
    increases in service charges on deposit accounts of $2.2 million, or 24.1%.
--  Total operating non-interest expenses for the quarter of $21.2 million
    decreased $574,000, or 2.6%, over the comparable prior year period.
    Current quarter expenses relating to the 2006 Advantage acquisition
    amounted to $673,000.  Total operating non-interest expenses decreased
    $336,000, or 1.6%, over the linked third quarter.  The Company continues to
    focus on its previously announced profitability enhancement initiatives
    with emphasis on expense savings. The efficiency ratio for the quarter
    excluding charges in non-interest income of $330,000 and in non-interest
    expenses of $735,000 related to branch rationalization and severance
    expenses for the quarter was 70.78%, compared to 74.45% for the comparable
    prior year period and 71.00% for the linked third quarter.