Susquehanna Slashes 2Q Dividend Save Cash

LITITZ, Pa. (AP) — Susquehanna Bancshares Inc. on Wednesday cut its second-quarter dividend 81 percent in a move aimed at preserving cash.

The financial services company, which operates about 230 bank branches in Pennsylvania, Maryland, West Virginia and New Jersey, cut its dividend to 5 cents, from 26 cents in the first quarter. The dividend is payable May 20 to shareholders of record as of May 1.

Chairman and Chief Executive William J. Reuter said the cut will save $18 million. He called the move a "prudent step" in the current economic downturn.

The bank had increased its dividend each year from 1982 to 2007.

Susquehanna expects to release first-quarter results on April 22.

The dividend cut comes a day after Moody's Investors Service downgraded the debt ratings of Susquehanna to junk status due to expectations for higher credit costs in the coming quarters. Moody's said it is concerned by the bank's large commercial real estate portfolio.

Susquehanna shares closed Wednesday trading up 48 cents, or 5.7 percent, at $8.90, in line with many other bank stocks.