Susquehanna Bancshares (SUSQ) Stock Declining Today Amid Investigation Into BB&T Merger

NEW YORK (TheStreet) -- Shares of Susquehanna Bancshares Inc (SUSQ) are declining 0.3% to $13.08 in midday trading Thursday, after law firm Brodsky & Smith announced that it is investigating potential claims against the Lititz, PA-based bank relating to the proposed acquisition by BB&T Corp.  (BBT) .

The investigation concerns the possible breaches of fiduciary duty and other alleged violations of state law by the Susquehanna board of directors for not acting in the company's best interests through the sale process.

Yesterday, North Carolina-based financial holding company BB&T agreed to purchase Susquehanna Bancshares for $2.5 billion in cash and stock to expand its presence in the mid-Atlantic region.

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Under the terms of the deal, shareholders of Susquehanna would receive only 0.253 of a share of BB&T stock and $4.05 in cash per each share of Susquehanna stock they own.

Separately, TheStreet Ratings team rates SUSQUEHANNA BANCSHARES INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate SUSQUEHANNA BANCSHARES INC (SUSQ) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The gross profit margin for SUSQUEHANNA BANCSHARES INC is currently very high, coming in at 83.39%. Regardless of SUSQ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SUSQ's net profit margin of 16.21% is significantly lower than the industry average.
  • SUSQ, with its decline in revenue, slightly underperformed the industry average of 0.1%. Since the same quarter one year prior, revenues slightly dropped by 2.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • SUSQUEHANNA BANCSHARES INC's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, SUSQUEHANNA BANCSHARES INC increased its bottom line by earning $0.93 versus $0.77 in the prior year. For the next year, the market is expecting a contraction of 16.1% in earnings ($0.78 versus $0.93).
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, SUSQ has underperformed the S&P 500 Index, declining 17.61% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.
  • You can view the full analysis from the report here: SUSQ Ratings Report

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