Susquehanna Bancshares Profit Drops On Bad Loans

LITITZ, Pa. (AP) — Regional bank holding company Susquehanna Bancshares Inc. said Wednesday its first-quarter profit fell sharply as loan losses mounted.

For the three months ended March 31, Susquehanna reported net income after paying preferred dividends of nearly $1.9 million, or 2 cents per share, down from $28 million, or 33 cents per share, in the year-ago quarter. The results matched the consensus forecast of analysts surveyed by Thomson Reuters.

Susquehanna Bancshares released earnings about two weeks after announcing its first-quarter results would fall short of expectations, primarily because of an increase in its provision for bad debt. Last week, the bank said it would cut its second-quarter dividend to 5 cents per share from 26 cents in the first quarter, in a bid to save $18 million.

On Wednesday, the bank said it nearly quadrupled its loan-loss provision to $35 million from $9.8 million in the year-ago quarter due to worsening loan quality amid the recession. Net charge-offs, or loans written off as unpaid, grew to 0.7 percent of all loans and leases, compared with 0.25 percent in last year's first quarter, and 0.6 percent in last year's fourth quarter.