This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Susquehanna Bancshares, Inc. Announces Second Quarter 2012 Results

Stocks in this article: SUSQ

Susquehanna Bancshares, Inc. (Susquehanna) (NASDAQ: SUSQ) today announced that it earned net income applicable to common shareholders for the second quarter ended June 30, 2012 of $37.8 million, or $0.20 per diluted share, compared to net income applicable to common shareholders of $11.1 million for the second quarter of 2011, or $0.09 per diluted share. Net income for the first six months of 2012 was $61.3 million, or $0.34 per diluted share, compared with $20.8 million, or $0.16 per diluted share for the first six months of 2011.

“We continue to recognize the benefits of our recent acquisitions and improving credit and core operating performance,” stated William J. Reuter, Chairman and Chief Executive Officer. “We are pleased with the energy and momentum that we are taking into the second half of the year and remain very focused on executing our Main Street relationship banking strategy to achieve our objectives for 2012 and beyond.”

Linked Quarter Results (Second Quarter 2012 vs. First Quarter 2012)

  • Loans and leases increased 0.5% from March 31, 2012 to $12.6 billion at June 30, 2012.
    • Susquehanna originated a gross amount of $862 million in new loans and leases during the second quarter, an increase of 9.2% over the $790 million originated in the first quarter of 2012.
    • Excluding real estate construction loans, loans and leases increased by $121.1 million, or 1.1%.
    • Commercial loans increased 0.6%.
    • Real estate – construction loans decreased 5.7%.
    • Real estate secured – residential loans increased 0.6%.
    • Real estate secured – commercial loans increased 0.3%.
    • Consumer loans increased 3.8%.
    • Leases increased 6.2%.
  • Total deposits increased 1.0% from March 31, 2012 to $12.7 billion at June 30, 2012, as deposit growth was impacted by the anticipated runoff of deposits assumed in recent acquisitions, including higher cost money market accounts.
    • Non-interest bearing demand deposits decreased 0.3%.
    • Interest-bearing demand deposits decreased 1.3%.
    • Savings deposits were generally flat.
    • Time deposits increased 5.1%.
  • Non-core items for the second quarter of 2012, after tax, were merger related expenses of $2.4 million, partially offset by net securities gains of $900 thousand.
  • Net interest margin increased 16 basis points to 4.10% compared to 3.94% for the first quarter of 2011, resulting principally from the impact of purchase accounting in connection with the acquisition of Tower Bancorp, Inc. (“Tower”), together with a full quarter of the Tower loan and deposit portfolios and offset by compression at core Susquehanna.
  • Non-interest income was $39.8 million for the second quarter of 2012, impacted by a full quarter of fees from the expanded customer base resulting from the Tower acquisition, as well as a 24% increase in mortgage banking income. Non-interest income for the quarter also includes pre-tax net securities gains of $1.4 million.
  • Non-interest expense for the second quarter of 2012 increased to $121.5 million, as Susquehanna recognized a full quarter of expenses resulting from the Tower acquisition without yet realizing a full quarter of anticipated cost savings from the Tower acquisition or core Susquehanna expense initiatives. Non-interest expense also includes pre-tax merger related expenses of $3.3 million.

Linked Quarter Results (Second Quarter 2012 vs. First Quarter 2012) (Continued)

  • The efficiency ratio for the second quarter of 2012 improved to 60.21% from 61.39% for the first quarter of 2012, in each case calculated after excluding pre-tax merger related expenses.
  • Net charge-offs as a percentage of average loans and leases for the quarter ended June 30, 2012 was 0.65% compared to 0.44% for the first quarter of 2012. Non-performing assets as a percentage of loans, leases and foreclosed real estate owned decreased 9 basis points from March 31, 2012 to 1.26% at June 30, 2012. The provision for loan and lease losses for the quarter ended June 30, 2012 was $16.0 million, compared to $19.0 million for the quarter ended March 31, 2012. The allowance for loan and lease losses was $190.6 million at June 30, 2012, representing 1.51% of total loans and lease and 150% of nonaccrual loans and leases, compared to $194.7 million at March 31, 2012, representing 1.56% of total loans and leases and 146% of nonaccrual loans and leases.

Second Quarter Financial Results:

  • Loans and leases increased 30.6% from June 30, 2011 to $12.6 billion at June 30, 2012.
    • Susquehanna originated a gross amount of $862 in new loans and leases during the second quarter, an increase of 30.2% over the $662 originated during the same period in 2011.
    • Growth in loans and leases consisted of:
      • $630.3 million acquired through the acquisition of Abington Bancorp, Inc. (“Abington”);
      • $2.0 billion acquired through the acquisition of Tower; and
      • $343.9 million of internally-generated loan growth, resulting in internal growth in loans and leases of 3.6% for the trailing four quarters.
    • Commercial loans increased 17.2%.
    • Real estate - construction loans increased 20.9%.
    • Real estate secured - residential loans increased 46.8%.
    • Real estate secured - commercial loans increased 34.5%.
    • Consumer loans increased 21.0%.
    • Leases increased 5.8%.
  • Total deposits increased 35.0% from June 30, 2011 to $12.7 billion at June 30, 2012.
    • Growth in total deposits consisted of:
      • $857.3 million of deposits assumed in the Abington acquisition;
      • $2.0 billion of deposits assumed in the Tower acquisition; and
      • $356.3 million in organic deposit growth, resulting in organic deposit growth of 3.8% for the trailing four quarters.
    • Non-interest-bearing demand deposits increased 36.5%.
    • Interest-bearing demand deposits increased 50.7%.
    • Savings deposits increased 24.8%.
    • Time deposits increased 20.8%.

Second Quarter Financial Results (Continued)

  • Net interest margin increased 48 basis points to 4.10% compared to 3.62% for the second quarter of 2011, driven primarily by the balance sheet restructuring in the fourth quarter of 2011, purchase accounting in connection with the Tower acquisition, the addition of the Tower deposit and loan portfolios and continued core reduction in funding costs at Susquehanna.
  • The efficiency ratio for the second quarter of 2012 improved to 60.21% from 68.26% in the second quarter of 2011, in each case calculated after excluding pre-tax merger related expenses.
  • Net charge-offs as a percentage of average loans and leases for the quarter ended June 30, 2012 was 0.65% compared to 1.33% for the second quarter of 2011. Non-performing assets as a percentage of loans, leases and foreclosed real estate was 1.26% at June 30, 2012 compared to 2.26% at June 30, 2011. The provision for loan and lease losses for the quarter ended June 30, 2012 was $16.0 million, compared to $28.0 million for the quarter ended June 30, 2011. The allowance for loan and lease losses was $190.6 million at June 30, 2012, representing 1.51% of total loans and leases and 150% of nonaccrual loans and leases, compared to $189.3 million at June 30, 2011, representing 1.96% of total loans and leases and 99% of nonaccrual loans and leases.
  • Return on average assets and average tangible equity (1) for the second quarter ended June 30, 2012 finished at 0.85% and 13.23%, respectively. This compared to results of 0.32% and 5.24% for the same measurements, respectively, for the second quarter of 2011.
  • Return on average assets and average tangible equity (1) for the first six months of 2012 finished at 0.72% and 10.77%, respectively. This compared to results of 0.30% and 5.05% for the same measurements, respectively, for the first six months of 2011.

Second Quarter Financial Results (Continued)

  • Susquehanna’s regulatory capital ratios are as follows:
   

Management

 

Preliminary Minimum

At June 30, 2012

Minimum Targets

Basel III Requirements*

Tangible Common Ratio (2) 7.64% 7.5% N/A
Tier 1 Common Ratio 9.97% 8.0% 7.0%
Leverage Ratio 9.95% 6.0% 4.0%
Tier 1 Capital Ratio 12.63% 9.5% 8.5%
Total Risk-Based Capital Ratio 14.38% 11.5% 10.5%

* Includes proposed conservation buffers

 

(1) A non-GAAP-based financial measure. The most comparable GAAP-based measurement for return on average tangible equity is return on average equity. A reconciliation of the differences between non-GAAP-based and GAAP-based measurements can be found at the end of this release under the heading "Supplemental Reporting of Non-GAAP-Based Financial Measures."

(2) Includes deferred tax liability associated with intangibles of $49.4 million

Additional Events

  • On July 18, 2012, Susquehanna’s Board of Directors declared a third quarter dividend of $0.06 per common share, payable August 20, 2012 to shareholders of record as of July 31, 2012. This represents a $0.01 increase from the second quarter dividend of $0.05 per share.
  • In response to the release by federal banking agencies of a joint notice of proposed rulemaking that addresses, among other things, Basel III capital guidelines and the capital treatment of certain securities, Susquehanna is conducting a thorough review and analysis of its options for redeeming certain trust preferred and other capital securities.

Susquehanna will broadcast its second quarter 2012 results conference call over the Internet on July 26, 2012 at 11:00 a.m. Eastern time. The conference call will include management’s discussion of second quarter 2012 results. The discussion may also include forward-looking information and financial goals, including updates of previously disclosed financial goals. Investors will have the opportunity to listen to the conference call through a live broadcast on Susquehanna’s Web site. The event may be accessed by selecting "Investor Relations" near the top right of the home page then “Overview” and clicking on the second quarter webcast link. To listen to the live call, please go to the Web site at least fifteen minutes prior to the scheduled start time to download and install any necessary audio software. For those who are unable to listen to the live broadcast, an archived replay and podcast will be available on the Web site shortly after the call concludes.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,072.31 +98.00 0.58%
S&P 500 0.00 -2.75 -0.14%
NASDAQ 4,535.9230 -13.3030 -0.29%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs