SUSQUEHANNA BANCSHARES INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - April 24, 2013

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Exhibit 99.1

Susquehanna Bancshares, Inc. Announces First Quarter 2013 Results

First Quarter Highlights

  • GAAP EPS of $0.23
  • Return on Average Tangible Equity (ROATE) of 13.87%
  • Net Interest Margin Remains Strong at 3.97%
  • Commercial Loan Activity and Core Deposit Growth Demonstrate Continued Momentum
  • Second Quarter Dividend Declared of $0.08 Per Share

LITITZ, Pa.--(BUSINESS WIRE)--April 24, 2013--Susquehanna Bancshares, Inc. (Susquehanna) (NASDAQ: SUSQ) today announced that it earned net income for the first quarter ended March 31, 2013 of $42.4 million, or $0.23 per diluted share, compared to net income of $23.5 million for the first quarter of 2012, or $0.14 per diluted share.

"We are encouraged by a solid start to 2013, particularly the growth and strong pipelines in commercial loans and the success of our efforts to grow core deposits,” said William J. Reuter, Chairman and Chief Executive Officer. "Amid the challenges that continue to confront our industry and the economy, our employees are building on the momentum of the past year and executing our strategic plan to drive profitability as we seek to enhance shareholder value and support our customers and the communities we serve.”

Linked Quarter Results (First Quarter 2013 vs. Fourth Quarter 2012)

  • Loans and leases increased $105.0 million, or 0.8%, from December 31, 2012 to $13.0 billion at March 31, 2013, as solid growth in commercial and consumer loans and leases was offset by a decrease in real estate construction loans. Excluding real estate construction loans, loans and leases increased by $173.4 million, or 1.4%. Growth in lease balances was driven largely by market expansion in auto leasing. Growth for the quarter in each major loan category is as follows:
    • Commercial loans increased 1.7%.
    • Real estate – construction loans decreased 8.1%.
    • Real estate secured – residential loans increased 0.3%.
    • Real estate secured – commercial loans increased 0.2%.
    • Consumer loans increased 2.0%.
    • Leases increased 10.9%.
  • Total deposits increased $111.4 million, or 0.9%, from December 31, 2012 to $12.7 billion as of March 31, 2013, due primarily to a 1.1% increase in core deposits. Growth for the quarter in each major deposit category is as follows:
    • Non-interest bearing demand deposits decreased 2.8%.
    • Interest-bearing demand deposits increased 1.8%.
    • Savings deposits increased 4.4%.
    • Time deposits increased 0.4%.
  • Net interest margin declined 9 basis points to 3.97% for the first quarter of 2013 compared to 4.06% for the fourth quarter of 2012.
  • Non-interest income declined to $42.6 million for the first quarter of 2013, compared to $43.8 million for the fourth quarter of 2012, principally due to seasonality of service charges and mortgage banking revenue and timing of certain commissions and fees.
  • Non-interest expense for the first quarter of 2013 declined to $117.7 million, compared to $125.3 million in the prior quarter.
  • The efficiency ratio for the first quarter of 2013 improved to 60.17%, compared to 60.96% for the fourth quarter of 2012, calculated after excluding pre-tax merger related expenses and loss on extinguishment of debt for the fourth quarter of 2012.
  • Net charge-offs as a percentage of average loans and leases for the quarter ended March 31, 2013 was 0.62% compared to 0.50% for the fourth quarter of 2012. Non-performing assets as a percentage of loans, leases and foreclosed real estate owned was stable at 0.97% at March 31, 2013 compared to 0.96% at December 31, 2012. The provision for loan and lease losses for the quarter ended March 31, 2013 was $12.0 million, compared to $13.0 million for the quarter ended December 31, 2012. The allowance for loan and lease losses was $176.4 million at March 31, 2013, representing 1.36% of total loans and leases and 171% of nonaccrual loans and leases, compared to $184.0 million at December 31, 2012, representing 1.43% of total loans and leases and 188% of nonaccrual loans and leases.

First Quarter Results (First Quarter 2013 vs. First Quarter 2012)

  • Loans and leases increased 3.8% from March 31, 2012 to $13.0 billion at March 31, 2013. Growth for the twelve month period in each major loan category was as follows:
    • Commercial loans increased 10.7%.
    • Real estate - construction loans decreased 21.6%.
    • Real estate secured - residential loans increased 3.4%.
    • Real estate secured - commercial loans decreased 1.3%.
    • Consumer loans increased 10.8%.
    • Leases increased 43.8%.
  • Total deposits increased 1.0% from March 31, 2012 to $12.7 billion at March 31, 2013, as core deposit growth of 5.7% was offset by an 8.6% decrease in time deposits. Growth for the twelve month period in each major deposit category was as follows:
    • Non-interest-bearing demand deposits decreased 1.5%.
    • Interest-bearing demand deposits increased 8.0%.
    • Savings deposits increased 6.9%.
    • Time deposits decreased 8.6%.
  • Net interest margin increased 3 basis points to 3.97% compared to 3.94% for the first quarter of 2012.
  • The efficiency ratio for the first quarter of 2013 improved to 60.17% from 61.39% in the first quarter of 2012, calculated after excluding pre-tax merger related expenses for the first quarter of 2012.
  • Net charge-offs as a percentage of average loans and leases for the quarter ended March 31, 2013 was 0.62% compared to 0.44% for the first quarter of 2012. Non-performing assets as a percentage of loans, leases and foreclosed real estate was 0.97% at March 31, 2013 compared to 1.35% at March 31, 2012. The allowance for loan and lease losses was $176.4 million at March 31, 2013, representing 1.36% of total loans and leases and 171% 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.
  • Return on average assets and average tangible equity (1) for the quarter ended March 31, 2013 finished at 0.95% and 13.87%, respectively. This compared to results of 0.58% and 8.36% for the same measurements, respectively, for the first quarter of 2012.
  • Susquehanna’s capital ratios continue to exceed management’s minimum targets, which are generally maintained at 100 basis points over proposed Basel III minimums, including the conservation buffers. The company’s tangible common ratio(2) and Tier 1 common to risk-weighted assets ratio were 8.22% and 10.20%, respectively, at March 31, 2013.

(1) Return on average tangible equity is a non-GAAP based financial measure. Please refer to the calculations and management’s reasons for using this measure in the accompanying financial schedules.

(2) The tangible common ratio is a non-GAAP based financial measure. Please refer to the calculations and management’s reasons for using this measure in the accompanying financial schedules.

Additional Events

  • On April 17, 2013, Susquehanna’s board of directors declared a dividend of $0.08 per common share for the second quarter of 2013, payable May 20, 2013 to shareholders of record as of April 30, 2013. This represents a $0.01 increase from the first quarter dividend of $0.07 per share and marks the 6th increase since the first quarter of 2011.

Susquehanna will broadcast its first quarter 2013 results conference call over the Internet on April 25, 2013 at 11:00 a.m. Eastern time. The conference call will include management’s discussion of first quarter 2013 results. The discussion may also include forward-looking information and financial targets. 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 first 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.

Susquehanna is a financial services holding company with assets of approximately $18 billion. Headquartered in Lititz, Pa., Susquehanna provides banking and financial services at 261 branch locations in the mid-Atlantic region. Through Susquehanna Wealth Management, the company offers investment, fiduciary, brokerage, insurance, retirement planning, and private banking services, with approximately $7.9 billion in assets under management and administration. Susquehanna also operates an insurance brokerage and employee benefits company, a commercial finance company and a vehicle leasing company. Investor information may be requested through Susquehanna’s Web site at www.susquehanna.net.

This press release contains certain financial information determined by methods other than in accordance with GAAP. Susquehanna’s management uses these non-GAAP measures in its analysis of the company’s performance. These non-GAAP financial measures require management to make judgments about the exclusion of certain items, and if different judgments were made, the amounts reported would be different. These measures typically exclude the effects of intangibles and related amortization and include the tax benefit associated with revenue items that are tax-exempt. Disclosures regarding these non-GAAP financial measures are included in the accompanying financial information.

The presentation of these non-GAAP financial measures is intended to supplement investors’ understanding of Susquehanna’s core business activities. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.

This release includes forward-looking statements as that term is defined in the U.S. Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various risks, uncertainties and other factors. Such risks, uncertainties and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: ineffectiveness of Susquehanna’s business strategy due to changes in current or future market conditions; the effects of competition, and of changes in laws and regulations, including industry consolidation and development of competing financial products and services; interest rate movements; changes in credit quality; and deteriorating economic conditions, and other risks and uncertainties, including those detailed in Susquehanna’s filings with the Securities and Exchange Commission. Susquehanna encourages readers of this release to understand forward-looking statements to be strategic objectives rather than absolute targets of future performance. Forward-looking statements speak only as of the date they are made. Susquehanna does not intend to update publicly any forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made or to reflect the occurrence of unanticipated events except as required by law.

 

Susquehanna Bancshares, Inc.

26 North Cedar Street

Lititz, PA 17543

 

SUMMARY CONSOLIDATED FINANCIAL INFORMATION

     
(in thousands, except per share data)    
 
 

1Q13

4Q12

3Q12

2Q12

1Q12

Balance Sheet (EOP)
Investments $ 2,552,600 $ 2,730,335 $ 2,908,404 $ 2,866,119 $ 2,756,836
Loans and leases 12,999,703 12,894,741 12,675,607 12,585,912 12,521,669
Allowance for loan and lease losses 176,377 184,020 186,897 190,628 194,730
Total assets 17,967,174 18,037,667 18,106,730 18,040,009 17,807,026
Deposits 12,691,432 12,580,046 12,725,379 12,690,524 12,563,541
Other short-term borrowings 786,251 817,577 762,257 648,675 723,758
Federal Home Loan Bank borrowings 1,044,480 1,199,062 1,110,884 1,015,724 970,673
Other long-term debt 501,559 513,401 639,753 678,282 692,059
Shareholders' equity 2,639,489 2,595,909 2,584,682 2,544,730 2,512,584
 
Average Balance Sheet
Investments $ 2,603,595 $ 2,764,886 $ 2,811,730 $ 2,704,232 $ 2,547,408
Loans and leases 12,929,365 12,725,886 12,612,477 12,527,713 11,411,592
Total earning assets 15,642,309 15,604,029 15,537,037 15,332,806 14,065,583
Total assets 18,031,127 18,018,889 18,021,108 17,799,678 16,274,773
Deposits 12,640,550 12,602,430 12,588,697 12,471,296 11,354,537
Other short-term borrowings 817,816 810,517 748,841 726,309 642,128
Federal Home Loan Bank borrowings 1,155,637 1,166,765 1,072,555 1,082,293 985,294
Other long-term debt 508,541 560,906 727,382 686,492 673,722
Shareholders' equity 2,614,319 2,597,254 2,562,092 2,537,250 2,348,326
 
Income Statement
Net interest income $ 149,206 $ 155,304 $ 149,142 $ 152,670 $ 134,123
Provision for loan and lease losses 12,000 13,000 16,000 16,000 19,000
Noninterest income 42,644 43,772 43,661 39,811 39,515
Noninterest expense 117,729 125,277 122,910 121,475 120,355
Income before taxes 62,121 60,799 53,893 55,006 34,283
Provision for income taxes 19,722 17,625 17,161 17,213 10,810
Net income 42,399 43,174 36,732 37,793 23,473
Basic earnings per common share 0.23 0.23 0.20 0.20 0.14
Diluted earnings per common share 0.23 0.23 0.20 0.20 0.14
Cash dividends paid per common share 0.00 0.14 0.06 0.05 0.03
 
Asset Quality
Net charge-offs (NCOs) $ 19,643 $ 15,877 $ 19,731 $ 20,102 $ 12,370
 
Nonaccrual loans and leases $ 103,351 $ 97,767 $ 118,448 $ 127,250 $ 133,489
Foreclosed real estate   22,557     26,245     28,641     31,302     36,456  
Total nonperforming assets (NPAs) $ 125,908   $ 124,012   $ 147,089   $ 158,552   $ 169,945  
 
Restructured loans $ 65,773 $ 67,775 $ 56,823 $ 66,777 $ 72,081
Loans and leases 90 days past due 6,396 8,209 8,451 11,203 9,758
 
 
 

Susquehanna Bancshares, Inc.

26 North Cedar Street

Lititz, PA 17543

 

SUMMARY CONSOLIDATED FINANCIAL INFORMATION

(in thousands, except per share data)

 

1Q13

4Q12

3Q12

2Q12

1Q12

Credit Quality
NCOs / Average loans and leases 0.62 % 0.50 % 0.62 % 0.65 % 0.44 %
NPAs / Loans and leases + foreclosed real estate 0.97 % 0.96 % 1.16 % 1.26 % 1.35 %
ALLL / Nonaccrual loans and leases 170.66 % 188.22 % 157.79 % 149.81 % 145.88 %
ALLL / Total loans and leases 1.36 % 1.43 % 1.47 % 1.51 % 1.56 %
 
Profitability
Return on average assets 0.95 % 0.95 % 0.81 % 0.85 % 0.58 %
Return on average equity 6.58 % 6.61 % 5.70 % 5.99 % 4.02 %
Return on average tangible equity (1) 13.87 % 14.01 % 12.41 % 13.23 % 8.36 %
Net interest margin 3.97 % 4.06 % 3.92 % 4.10 % 3.94 %
Efficiency ratio (1) 60.17 % 60.96 % 58.98 % 60.21 % 61.39 %
 
Per Share Data (EOP)
Closing share price $ 12.43 $ 10.48 $ 10.45 $ 10.28 $ 9.88
Stated book value per common share 14.13 13.92 13.86 13.67 13.48
Tangible book value per common share (1) 7.10 6.88 6.82 6.59 6.36
Price/Book Value 87.97 % 75.31 % 75.39 % 75.20 % 73.29 %
Price/Tangible Book Value 175.07 % 152.33 % 153.23 % 155.99 % 155.35 %
Number of outstanding shares ('000) 186,800 186,554 186,465 186,221 187,856
 
Capital Ratios
Tangible common ratio (1) 8.22 % 7.94 % 7.84 % 7.61 % 7.52 %
Tier 1 common ratio 10.20 % 9.94 % 10.07 % 9.97 % 9.83 %
Leverage ratio 9.23 % 8.98 % 8.97 % 9.95 % 10.79 %
Tier 1 capital ratio 11.34 % 11.08 % 11.37 % 12.63 % 12.54 %
Total risk-based capital ratio 12.88 % 12.63 % 13.14 % 14.38 % 14.30 %
 

(1)

 

Non-GAAP based financial measures. Please refer to the calculations and management's reasons for using these measures in Appendix A - GAAP to Non-GAAP Reconciliation

 
 
Susquehanna Bancshares, Inc.
26 North Cedar Street
Lititz, PA 17543
     
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)
March 31, December 31, September 30, June 30, March 31,
  2013     2012     2012     2012     2012  
 
Assets
Cash and due from banks $ 291,434 $ 277,042 $ 380,100 $ 412,282 $ 350,793
Unrestricted short-term investments   38,662     39,550     24,826     31,239     27,067  
Cash and cash equivalents 330,096 316,592 404,926 443,521 377,860
Interest-bearing deposits held by consolidated variable interest entities that can be

used only to settle obligations of the consolidated variable interest entities

4,304 4,423 3,679 5,485 4,932
Restricted short-term investments 68,020 75,203 76,103 67,650 60,600
Securities available for sale 2,400,626 2,577,901 2,763,477 2,719,186 2,620,245
Restricted investment in bank stocks 151,974 152,434 144,927 146,933 136,591
Loans and leases, net of deferred costs and fees 12,840,305 12,728,082 12,503,737 12,409,181 12,337,688
Loans held by consolidated variable interest entities that can be used only to settle
obligations of the consolidated variable interest entities 159,398 166,659 171,870 176,731 183,981
Less: Allowance for loan and lease losses   176,377     184,020     186,897     190,628     194,730  
Net loans and leases   12,823,326     12,710,721     12,488,710     12,395,284     12,326,939  
Premises and equipment, net 186,102 188,983 190,793 193,404 196,011
Other real estate and foreclosed assets 26,302 31,017 33,735 37,220 40,748
Accrued interest receivable 44,202 40,304 44,681 41,274 43,928
Bank-owned life insurance 450,351 450,270 448,866 449,023 447,686
Goodwill 1,275,439 1,270,359 1,268,761 1,269,205 1,264,892
Intangible assets with finite lives 38,209 41,332 44,549 47,831 53,662
Deferred income tax assets 7,594 4,685 30,682 47,914 35,776
Other assets   160,629     173,443     162,841     176,079     197,156  
Total assets $ 17,967,174   $ 18,037,667   $ 18,106,730   $ 18,040,009   $ 17,807,026  
Liabilities and Shareholders' Equity
Deposits $ 12,691,432 $ 12,580,046 $ 12,725,379 $ 12,690,524 $ 12,563,541
Federal Home Loan Bank short-term borrowings 948,000 1,098,000 1,000,000 900,000 850,000
Other short-term borrowings 786,251 817,577 762,257 648,675 723,758
Federal Home Loan Bank long-term borrowings 96,480 101,062 110,884 115,724 120,673
Other long-term debt 251,019 251,021 349,984 200,298 200,611
Junior subordinated debentures 154,946 154,927 171,370 346,393 346,395
Long-term debt of consolidated variable interest entities for which creditors do not
have recourse to Susquehanna's general credit 95,594 107,453 118,399 131,591 145,053
Accrued interest, taxes, and expenses payable 61,265 81,808 72,060 83,102 69,787
Deferred income tax liabilities 29,694 14,475 0 0 0
Other liabilities   213,004     235,389     211,715     378,972     274,624  
Total liabilities   15,327,685     15,441,758     15,522,048     15,495,279     15,294,442  
Shareholders' equity:
Common stock 374,118 373,623 373,352 372,848 376,117
Treasury stock (1,871 ) (1,850 ) (1,368 ) (1,282 ) (1,278 )
Additional paid-in capital 1,648,062 1,645,958 1,645,692 1,643,474 1,638,562
Retained earnings 657,835 615,436 598,371 572,818 544,476
Accumulated other comprehensive loss   (38,655 )   (37,258 )   (31,365 )   (43,128 )   (45,293 )
Total shareholders' equity   2,639,489     2,595,909     2,584,682     2,544,730     2,512,584  
Total liabilities and shareholders' equity $ 17,967,174   $ 18,037,667   $ 18,106,730   $ 18,040,009   $ 17,807,026  
 
 

Susquehanna Bancshares, Inc.

26 North Cedar Street

Lititz, PA 17543

         
Loans and Leases and Deposits
(in thousands)
Loans and Leases
  03/31/13   12/31/12   09/30/12   06/30/12   03/31/12
Commercial, financial, and agricultural $ 2,312,660 $ 2,273,611 $ 2,168,708 $ 2,101,561 $ 2,088,948
Real estate - construction 779,344 847,781 904,285 936,996 993,819
Real estate secured - residential 4,077,810 4,065,818 4,047,761 3,970,115 3,945,565
Real estate secured - commercial 3,971,438 3,964,608 3,947,447 4,034,109 4,022,788
Consumer 859,664 842,552 829,760 805,490 775,913
Leases   998,787   900,371   777,646   737,641   694,636
Total loans and leases $ 12,999,703 $ 12,894,741 $ 12,675,607 $ 12,585,912 $ 12,521,669
 
 
Deposits
  03/31/13   12/31/12   09/30/12   06/30/12   03/31/12
Demand $ 1,917,719 $ 1,973,664 $ 1,929,529 $ 1,940,990 $ 1,947,525
Interest-bearing demand 5,936,099 5,829,147 5,717,663 5,423,198 5,496,237
Savings   1,077,446   1,032,293   1,009,110   1,007,157   1,008,042
Core deposits   8,931,264   8,835,104   8,656,302   8,371,345   8,451,804
Time less than $100 2,205,304 2,262,262 2,341,623 2,441,902 2,527,383
Time of $100 or more   1,554,864   1,482,680   1,727,454   1,877,277   1,584,354
Total deposits $ 12,691,432 $ 12,580,046 $ 12,725,379 $ 12,690,524 $ 12,563,541
 
 
 

Susquehanna Bancshares, Inc.

26 North Cedar Street

Lititz, PA 17543

 
Supplemental Loan and Lease Data
(in thousands)
Nonaccrual Loans and Leases
  03/31/13   12/31/12   09/30/12   06/30/12   03/31/12
Commercial, financial, and agricultural $ 9,542 $ 10,464 $ 10,572 $ 16,076 $ 20,616
Real estate - construction 18,945 14,817 22,534 25,985 30,644
Real estate secured - residential 30,372 28,440 30,740 31,723 33,137
Real estate secured - commercial 43,341 42,621 52,390 52,296 47,423
Consumer 37 43 211 263 505
Leases   1,114   1,382   2,001   907   1,164
Total nonaccrual loans and leases $ 103,351 $ 97,767 $ 118,448 $ 127,250 $ 133,489
 
 
Restructured Loans
  03/31/13   12/31/12   09/30/12   06/30/12   03/31/12
Commercial, financial, and agricultural $ 14,863 $ 8,744 $ 7,254 $ 9,130 $ 9,547
Real estate - construction 937 940 943 3,979 3,980
Real estate secured - residential 20,172 23,224 20,828 16,494 15,167
Real estate secured - commercial 28,689 33,589 27,192 36,671 42,883
Consumer   1,112   1,278   606   503   504
Total restructured loans $ 65,773 $ 67,775 $ 56,823 $ 66,777 $ 72,081
 
 
Net Charge-offs (Recoveries)
1Q 2013 4Q 2012 3Q 2012 2Q 2012 1Q 2012
Commercial, financial, and agricultural $ 8,041 $ 233 $ 3,757 $ 7,145 $ 2,108
Real estate - construction 4,301 3,311 2,909 4,987 2,830
Real estate secured - residential 2,362 3,738 2,470 2,553 3,652
Real estate secured - commercial 3,881 6,704 9,439 4,485 2,271
Consumer 236 707 448 53 928
Leases   822   1,184   708   879   581
Total net charge-offs $ 19,643 $ 15,877 $ 19,731 $ 20,102 $ 12,370
 
 
Susquehanna Bancshares, Inc.
26 North Cedar Street
Lititz, PA 17543
   
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
(in thousands, except per share data)    
Three Months Ended
March 31, December 31, September 30, June 30, March 31,
  2013     2012     2012     2012     2012  
 
Net interest income $ 149,206 $ 155,304 $ 149,142 $ 152,670 $ 134,123
Provision for loan and lease losses   12,000     13,000     16,000     16,000     19,000  
Net interest income, after provision for loan and lease losses   137,206     142,304     133,142     136,670     115,123  
Noninterest Income:
Service charges on deposit accounts 8,672 9,158 9,013 8,583 7,674
Vehicle origination and servicing fees 3,354 3,746 2,470 2,226 1,924
Wealth management commissions and fees 12,390 11,882 11,923 12,297 11,602
Commissions on property and casualty insurance sales 4,542 3,749 3,158 3,930 5,058
Other commissions and fees 5,237 6,680 5,387 4,800 4,643
Income from bank-owned life insurance 1,850 1,603 1,726 1,631 1,472
Mortgage banking revenue 4,110 4,835 5,113 4,343 3,513
Net realized gain (loss) on sales of securities 406 (103 ) 31 1,361 385
Total other-than-temporary impairment, net of recoveries (680 ) 749 136 4,676 (2,706 )

Portion recognized in other comprehensive income (before taxes)

  292     (846 )   (136 )   (4,676 )   2,562  
Net impairment losses recognized in earnings (388 ) (97 ) 0 0 (144 )
Other   2,471     2,319     4,840     640     3,388  
Total noninterest income   42,644     43,772     43,661     39,811     39,515  
Noninterest Expenses:
Salaries and employee benefits 63,034 66,865 62,236 64,524 57,958
Occupancy 11,215 11,345 11,350 11,725 10,810
Furniture and equipment 3,578 3,976 3,823 4,309 3,617
Professional and technology services 5,729 6,697 4,916 5,127 4,548
Advertising and marketing 3,203 3,029 2,947 3,287 3,054
FDIC insurance 3,798 5,264 5,275 4,769 5,178
Legal fees 1,870 2,178 2,012 1,907 2,053
Amortization of intangible assets 3,268 3,272 3,337 3,402 2,753
Vehicle lease disposal 1,290 1,361 1,401 1,745 1,836
Merger related 0 1,054 1,500 3,318 11,479
Loss on extinguishment of debt 0 409 5,451 0 0
Other   20,744     19,827     18,662     17,362     17,069  
Total noninterest expenses   117,729     125,277     122,910     121,475     120,355  
Income before income taxes 62,121 60,799 53,893 55,006 34,283
Provision for income taxes   19,722     17,625     17,161     17,213     10,810  
Net Income $ 42,399   $ 43,174   $ 36,732   $ 37,793   $ 23,473  
 
Earnings per common share:
Basic $ 0.23 $ 0.23 $ 0.20 $ 0.20 $ 0.14
Diluted $ 0.23 $ 0.23 $ 0.20 $ 0.20 $ 0.14
Cash dividends per common share $ 0.00 $ 0.14 $ 0.06 $ 0.05 $ 0.03
Average common shares outstanding:
Basic 186,607 186,353 186,214 187,616 171,326
Diluted 187,442 186,990 187,004 188,301 171,973
 
   
Susquehanna Bancshares, Inc.
26 North Cedar Street
Lititz, PA 17543
                 
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY
(in thousands)
Interest rates and interest differential-taxable equivalent basis
 
Three Months Ended Three Months Ended Three Months Ended
March 31, 2013 December 31, 2012 March 31, 2012
Average Average Average
Balance   Interest  

Rate (%)

Balance   Interest  

Rate (%)

Balance   Interest  

Rate (%)

Assets
Short-term investments $ 109,349 $ 36 0.13 $ 113,257 $ 43 0.15 $ 106,583 $ 30 0.11
Investment securities:
Taxable(1) 2,202,136 11,426 2.10 2,362,815 12,383 2.08 2,166,578 13,790 2.56
Tax-exempt(1)(2)   401,459     5,529   5.59   402,071     5,591   5.53   380,830     5,787   6.11
Total investment securities   2,603,595     16,955   2.64   2,764,886     17,974   2.59   2,547,408     19,577   3.09
Loans and leases, (net):
Taxable(3) 12,501,991 156,853 5.09 12,295,737 159,862 5.17 11,065,149 145,219 5.28
Tax-exempt(2)(3)   427,374     5,371   5.10   430,149     5,914   5.47   346,443     4,825   5.60
Total loans and leases   12,929,365     162,224   5.09   12,725,886     165,776   5.18   11,411,592     150,044   5.29
 
Total interest-earning assets 15,642,309   179,215   4.65 15,604,029   183,793   4.69 14,065,583   169,651   4.85
Allowance for loan and lease losses (184,909 ) (186,695 ) (191,305 )
Other non-earning assets   2,573,727     2,601,555     2,400,495  
 
Total assets $ 18,031,127   $ 18,018,889   $ 16,274,773  
 
Liabilities
Deposits:
Interest-bearing demand $ 5,895,120 4,622 0.32 $ 5,802,600 4,777 0.33 $ 4,990,291 5,718 0.46
Savings 1,048,881 279 0.11 1,018,704 273 0.11 929,499 329 0.14
Time 3,778,086 11,232 1.21 3,834,971 11,649 1.21 3,746,848 12,026 1.29
Other short-term borrowings 817,816 2,153 1.07 810,517 2,205 1.08 642,128 2,122 1.33
FHLB borrowings 1,155,637 3,672 1.29 1,166,765 3,753 1.28 985,294 2,958 1.21
Long-term debt   508,541     4,236   3.38   560,906     1,804   1.28   673,722     8,661   5.17
 
Total interest-bearing liabilities 13,204,081   26,194   0.80 13,194,463   24,461   0.74 11,967,782   31,814   1.07
Demand deposits 1,918,463 1,946,155 1,687,899
Other liabilities   294,264     281,017     270,766  
 
Total liabilities 15,416,808 15,421,635 13,926,447
 
Equity   2,614,319     2,597,254     2,348,326  
 
Total liabilities & shareholders' equity $ 18,031,127   $ 18,018,889   $ 16,274,773  
 
Net interest income / yield on
average earning assets $ 153,021 3.97 $ 159,332 4.06 $ 137,837 3.94
Taxable equivalent adjustment   (3,815 )   (4,028 )   (3,714 )
Net interest income - as reported $ 149,206   $ 155,304   $ 134,123  
 

(1)

 

For presentation in this table, average balances and the corresponding average rates for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.

(2)

Tax-exempt income has been adjusted to a tax-equivalent basis using a marginal tax rate of 35%.

(3)

Average loan balances include non-accrual loans.

 
 
Susquehanna Bancshares, Inc.
26 North Cedar Street
Lititz, PA 17543
       
Appendix A - GAAP to Non-GAAP Reconciliation
(Dollars and share data in thousands)  
1Q13 4Q12 3Q12 2Q12 1Q12

Efficiency Ratio

Other expense $ 117,729 $ 125,277 $ 122,910 $ 121,475 $ 120,355
Less: Merger related expenses 0 (1,054 ) (1,500 ) (3,318 ) (11,479 )
Loss on extinguishment of debt   0     (409 )   (5,451 )   0     0  
Noninterest operating expense (numerator) $ 117,729   $ 123,814   $ 115,959   $ 118,157   $ 108,876  
 
Taxable-equivalent net interest income $ 153,021 $ 159,332 $ 152,948 156,416 137,837
Other income   42,644     43,772     43,661     39,811     39,515  
Denominator $ 195,665   $ 203,104   $ 196,609   $ 196,227   $ 177,352  
Efficiency ratio   60.17 %   60.96 %   58.98 %   60.21 %   61.39 %
 
The efficiency ratio is a non-GAAP based financial measure. Management excludes merger-related expenses and certain other selected items when calculating this ratio, which is used to measure the relationship of operating expenses to revenues.
 
 

Tangible Common Ratio

End of period balance sheet data
Shareholders' equity $ 2,639,489 $ 2,595,909 $ 2,584,682 $ 2,544,730 $ 2,512,584
Goodwill and other intangible assets (1)   (1,266,610 )   (1,263,563 )   (1,263,361 )   (1,267,630 )   (1,268,582 )
Tangible common equity (numerator) $ 1,372,879   $ 1,332,346   $ 1,321,321   $ 1,277,100   $ 1,244,002  
 
Assets $ 17,967,174 $ 18,037,667 $ 18,106,730 $ 18,040,009 $ 17,807,026
Goodwill and other intangible assets (1)   (1,266,610 )   (1,263,563 )   (1,263,361 )   (1,267,630 )   (1,268,582 )
Tangible assets (denominator) $ 16,700,564   $ 16,774,104   $ 16,843,369   $ 16,772,379   $ 16,538,444  
Tangible common ratio   8.22 %   7.94 %   7.84 %   7.61 %   7.52 %

 

The tangible common ratio is a non-GAAP based financial measure using non-GAAP based amounts. The most directly comparable GAAP-based measure is the ratio of common shareholders’ equity to total assets. In order to calculate tangible common shareholders equity and assets, our management subtracts the intangible assets from both the common shareholders’ equity and total assets. Tangible common equity is then divided by the tangible assets to arrive at the ratio. Management uses the ratio to assess the strength of our capital position.

 

(1)

 

Net of applicable deferred income taxes

 
 
Susquehanna Bancshares, Inc.
26 North Cedar Street
Lititz, PA 17543
       

Appendix A - GAAP to Non-GAAP Reconciliation

(Dollars and share data in thousands)

 

1Q13

4Q12

3Q12

2Q12

1Q12

Return on Average Tangible Equity

Income statement data
Net income $ 42,399 $ 43,174 $ 36,732 $ 37,793 $ 23,473
Amortization of intangibles, net of taxes at 35%   2,124     2,127     2,169     2,211     1,789  
Net tangible income (numerator) $ 44,523   $ 45,301   $ 38,901   $ 40,004   $ 25,262  
 
Average balance sheet data
Shareholders' equity $ 2,614,319 $ 2,597,254 $ 2,562,092 $ 2,537,250 $ 2,348,326
Goodwill and other intangible assets   (1,312,662 )   (1,311,192 )   (1,315,071 )   (1,320,658 )   (1,132,344 )
Tangible common equity (denominator) $ 1,301,657   $ 1,286,062   $ 1,247,021   $ 1,216,592   $ 1,215,982  
 
Return on equity (GAAP basis) 6.58 % 6.61 % 5.70 % 5.99 % 4.02 %
Effect of goodwill and other intangibles   7.29 %   7.40 %   6.71 %   7.24 %   4.34 %
Return on average tangible equity   13.87 %   14.01 %   12.41 %   13.23 %   8.36 %
 
Return on average tangible equity is a non-GAAP based financial measure calculated using non-GAAP based amounts. The most directly comparable GAAP-based measure is return on average equity. We calculate return on average tangible equity by excluding the balance of intangible assets and their related amortization expense from our calculation of return on average equity. Management uses the return on average tangible equity in order to review our core operating results. Management believes that this is a better measure of our performance. In addition, this is consistent with the treatment by bank regulatory agencies, which excludes goodwill and other intangible assets from the calculation of risk-based capital ratios.
 
 

Tangible Book Value per Common Share

End of period balance sheet data
Shareholders' equity $ 2,639,489 $ 2,595,909 $ 2,584,682 $ 2,544,730 $ 2,512,584
Goodwill and other intangible assets   (1,313,648 )   (1,311,691 )   (1,313,310 )   (1,317,036 )   (1,318,554 )
Tangible common equity (numerator) $ 1,325,841   $ 1,284,218   $ 1,271,372   $ 1,227,694   $ 1,194,030  
 
Common shares outstanding (denominator)   186,800     186,554     186,465     186,221     187,856  
 
Tangible book value per common share $ 7.10   $ 6.88   $ 6.82   $ 6.59   $ 6.36  
 
Tangible book value per share is a non-GAAP based financial measure calculated using non-GAAP based amounts. The most directly comparable GAAP based measure is book value per share. In order to calculate tangible book value per share, we divide tangible common equity, which is a non-GAAP based measure calculated as common shareholders’ equity less intangible assets, by the number of shares of common stock outstanding. In contrast, book value per share is calculated by dividing total common shareholders’ equity by the number of shares of common stock outstanding. Management uses tangible book value per share to assess our capital position and ratios.
 

CONTACT:
Susquehanna Bancshares, Inc.
INVESTOR RELATIONS:
Carl D. Lundblad, Senior Vice President
717-625-6305
or
MEDIA RELATIONS:
Stephen Trapnell, Director of Corporate Communications
717-625-6548

SUSQUEHANNA BANCSHARES INC Reports