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| 8-K - FORM 8-K - SUSQUEHANNA BANCSHARES INC | d581602d8k.htm |
 Susquehanna Bancshares, Inc.
Investor Presentation
3
rd
Quarter 2013
Exhibit 99.1 |
 Forward-Looking Statements
Forward-Looking Statements
During the course of this presentation, we may make projections and other
forward-looking
statements
regarding
priorities
and
strategic
objectives
of
Susquehanna Bancshares, Inc., as well as projected capital ratios, efficiency
ratios, net income and earnings. We encourage investors to understand
forward-looking statements to be strategic objectives rather than absolute
targets
of
future
performance.
We
wish
to
caution
you
that
these
forward-
looking statements may differ materially from actual results due
to a number of
risks
and
uncertainties.
For
a
more
detailed
description
of
the
factors
that
may
affect Susquehanna’s operating results, we refer you to our filings with the
Securities & Exchange Commission, including our annual report on
Form 10-K
for the year ended December 31, 2012 and Form 10-Q for the quarter ended
June 30, 2013. Susquehanna assumes no obligation to update the forward-
looking statements made during this presentation.
For more information, please visit our Web site at:
www.susquehanna.net
2 |
 Who is
Susquehanna? Who is Susquehanna?
Corporate Overview
Super-community bank headquartered in
Lititz, PA
261 banking offices concentrated in Central
PA, Western MD, and Philadelphia and
Baltimore MSAs
38
th
largest U.S. commercial bank by assets
and 2
nd
largest headquartered in PA
Experienced management team with extensive
market knowledge
Franchise is a diversified mix of consumer and
business customers, products and revenue
sources
Non-bank affiliates offering products and
services in:
Wealth management
Insurance brokerage and employee benefits
Commercial finance
Vehicle leasing
Selected Data as of 6/30/2013
Assets:
$18.1 billion
Deposits:
$12.8 billion
Loans & Leases:
$13.2 billion
Assets under management
$7.7 billion
and administration:
Market Cap
1
:
~$2.5 billion
Average daily volume
2
:
>1 million shares
Institutional ownership:
>
70%
Dividend yield
3
:
2.38%
NASDAQ:
SUSQ
1
Based
on
closing
price
on
August
6 ,
2013
2
Three month
3
Based on most recent dividend of $0.08 per share
3
th |
 Uniquely Positioned
Uniquely Positioned
Source: SNL
Note: Regulatory branch and deposit data as of June 30, 2012; banks and thrifts with
deposits in counties SUSQ operates in PA/NJ/MD/WV; traditional and in-store branches only, as defined by SNL
Counties
of
operation
are
listed
in
the
“Additional
Materials”
slides
at
the
conclusion
of
this
presentation
Rank
Institution
Branch Count
Total Deposits
in Market
($000)
Total Market
Share (%)
1
Wells Fargo
382
41,184,192
15.1%
2
PNC
409
27,478,555
10.1%
3
Bank of America
232
25,438,859
9.3%
4
M&T Bank
318
24,230,842
8.9%
5
Toronto-Dominion Bank
169
19,136,622
7.0%
6
Royal Bank of Scotland
222
18,315,013
6.7%
7
Susquehanna
261
12,710,372
4.7%
8
Fulton
192
9,475,981
3.5%
9
Banco Santander
180
8,719,850
3.2%
10
National Penn
121
5,812,837
2.1%
11
BB&T
69
4,051,430
1.5%
12
Beneficial
68
3,888,497
1.4%
13
First Niagara
63
2,684,122
1.0%
14
SunTrust
52
2,128,252
0.8%
15
Metro
34
2,106,159
0.8%
Total
(1-15)
2,772
207,361,583
76.1%
Total
(1-244)
4,291
272,493,052
100.0%
Deposit Market Share: Counties of Operation
4
Top 3 market share in 12
counties
Top 5 market share in half the
MSAs where we do business
Largest locally based
community bank
Increased share in 14 out of
22 MSAs from 2011 to 2012
Significant opportunities exist
to gain market share |
 Building on Momentum
Building on Momentum
Regional structure that empowers local community bankers with
the authority, incentives and products they need to drive loan
growth, particularly in consumer lending and small business and
middle-market banking
Peer leading net interest margin to be defended by further
improving funding costs, including continued core deposit
growth, and ongoing active balance sheet management
Growing fees as a percentage of total revenues by investing in
non-bank businesses, building full client relationships and
maximizing significant untapped cross-sell potential
Committed to continuous delivery model improvement, after
streamlining expense structure and improving efficiency in 2012
Strong capital position and focus on growing returns enhances
ability to execute on organic and strategic growth opportunities
1.
Take share, drive
organic loan growth
2.
Defend Margin
3.
Grow fee revenue
4.
Maintain efficiency
5.
Accelerate capital
generation and returns
Opportunity
Susquehanna
5 |
 Core
Deposit Growth Commercial and Consumer
Loan Growth
Expand Fee Income as a % of
Total Revenue
Differentiated Customer
Experience
Elevate Employee Engagement
Focus for 2013
Focus for 2013
Technology and mobile delivery
Retail and commercial products
enhancements
Enhance C&I talent and capacity
Increase cross-sell
Talent and leadership
development
Process review and
improvements
Objectives
Selected Initiatives
6 |
 2
nd
Quarter 2013 Highlights
2
nd
Quarter 2013 Highlights
GAAP EPS of $0.24
Increased 4.3% linked quarter, 20% YOY
Steady organic loan growth
Total loans and leases grew 1.2% linked quarter, 4.5% YOY
Continued focus on core deposit growth
Core deposits decreased by 0.5% linked quarter, but increased 6.2% YOY
Strong net interest margin and fee income revenue growth
Net
interest
margin
of
3.88%;
Fee
income
to
total
revenue
1
of
24.0%
compared
to
20.1%
in
2Q12
Significant improvement in profitability
ROAA of 1.01% compared to 0.95% and 0.85% in 1Q13 and 2Q12, respectively
ROATE
2
of 14.30% compared to 13.87% and 13.23% in 1Q13 and 2Q12, respectively
Solid credit quality metrics and capital ratios
NPAs at 0.94% of loans, leases and foreclosed real estate
Strong coverage ratio with allowance representing 170% of nonaccrual loans and
leases Tangible common ratio
2
of 8.21%; regulatory ratios exceed “well capitalized”
1
Excludes pre-tax gain of $2.3mn in BOLI claim proceeds in 2Q13 and gains/losses
on sale of securities 2
Non-GAAP
based
financial
measures;
please
refer
to
the
“Additional
Materials”
slides
at
the
conclusion
of
this
presentation
for
calculations
7 |
 Momentum:
Loan Growth
Momentum:
Loan Growth
Total Loans
Total Loans
12/31/2007
Total Loans 6/30/2013
$8.8 Billion
Strong Loan Growth Momentum
$13.2 Billion
8
Organic Loan CAGR:
3.5%
Consumer,
5%
Leases, 5%
Commercial,
financial and
agricultural,
20%
Real estate –
construction
15
%
Real estate
secured -
commercial,
30%
Real estate
secured -
residential,
25%
Consumer,
7%
Leases, 8%
Commercial,
financial and
agricultural,
17%
Real estate –
construction
6%
Real estate
secured -
commercial,
31%
Real estate
secured -
residential,
31%
Loans and leases grew 4.5% since 2Q12 Loan and lease originations were up 41.0% from 2Q12 |
 Asset
Quality Continues to Improve Asset Quality Continues to Improve
9
0.96
0.30
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
Net Charge-Offs / Average Loans & Leases (%)
1.95
0.94
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
NPAs / Loans & leases + foreclosed real estate (%)
119
170
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
ALLL / Nonaccrual loans & leases (%) |
 Positioned For Further Growth
Positioned For Further Growth
Pennsylvania Market
Delaware Valley Market
Maryland Market
Foundation for growth with stable
commercial and retail banking base
providing ample deposits
Home to distribution hubs for global
retailers, manufacturers and distributors
serving Northeast and Mid-Atlantic
markets
Includes Philadelphia and the state’s
four most-affluent counties
Growth opportunities fueled by world-
leading education, health care and
research institutions
Includes Baltimore and four of the
nation’s 45 most-affluent counties
including no. 5, Howard County
Growth opportunities fueled by world-
leading education, health care and
research institutions, as well as major
federal agencies and contractors
Note:
The
16
counties
comprising
the
company’s
Pennsylvania
Market,
the
10
counties
comprising
the
company’s
Delaware
Valley
Market
and
the
14
counties
comprising
the
company’s
Maryland
Market
are
listed
in the
“Additional
Materials”
slides
at
the
conclusion
of
this
presentation
10 |
 Market Opportunity
Market Opportunity
HOME MARKET:
METRO GROWTH MARKETS:
Central PA
5
Philadelphia
6
Baltimore
7
2007
2012
2012
2012
Total Deposits
$55.5 B
$65.3 B
18% Growth
$128.5 B
$63.0 B
in Current Market
SUSQ Deposits
$2.2 B
$5.9 B
170% Growth
$3.0 B
$1.2 B
Rank/Market Share
#9 / 3.9%
#5 / 9.0%
#8 / 2.4%
#7 / 1.9%
Primary Competitors
PNC, M&T, Fulton
TD, RBS, PNC
M&T, PNC, BB&T
Median Household Income
$50,976
$58,051
$62,687
Estimated Household Income
19.7%
23.1%
22.8%
Growth from 2011-2016
Population
3.6 M
3.7 M
3.5% Growth
5.3 M
2.7 M
Estimated Population
3.1%
1.8%
2.3%
Growth from 2011-2016
# of Businesses with
135,105
222,902
102,402
< $10M in Sales
1
Source: FDIC Deposit Market Share Report
2
Source: SNL, ESRI. Household Income data reported for Philadelphia and
Baltimore metro markets represents Philadelphia-Camden-Wilmington and Baltimore-Towson MSAs, respectively
3
Source: SNL, ESRI
4
Source: The Nielsen Company
5
16
counties
comprising
Susquehanna’s
Pennsylvania
Market;
please
refer
to
the
market
definitions
set
forth
in
the
“Additional
Materials”
slides
at
the
conclusion
of
this
presentation
6
Philadelphia Metro = Bucks, Burlington, Camden, Chester, Delaware, Gloucester,
Montgomery and Philadelphia counties 7
Baltimore Metro = Anne Arundel, Baltimore, Baltimore (City), Carroll, Harford and
Howard counties 11
1
2
2
3
4 |
 Momentum:
Defending Net Interest Margin
Momentum:
Defending Net Interest Margin
Active Balance Sheet Management
Focus on core deposit growth
FHLB debt prepayment (4Q11)
Trust preferred and sub debt redemption
(3Q/4Q12)
Countering the Headwinds
Increase low cost core deposits
$400+ million in high rate CD’s maturing in 2013
Successfully retained over 80% in June 2013
12
4.10%
3.92%
4.06%
3.97%
3.88%
3.65%
3.60%
3.51%
3.41%
3.44%
0.84%
0.70%
2Q12
3Q12
4Q12
1Q13
2Q13
SUSQ NIM
Peer NIM
SUSQ Cost of Funds
Note: Peer company information is average of peer data per SNL; identification of peer companies is
included in the “Additional Materials” at the conclusion of this presentation |
 Strong Core Deposit Growth
Strong Core Deposit Growth
Strong Core Deposit Growth Momentum
Positive
results
in
mobile
deposit
services
and
stellar
checking
account
Core
deposits
now
account
for
70%
of
total
deposits
Core
deposit
growth
of
6.2%
since
2Q12
Cost
of
deposits
decreased
from
2.86%
in
4Q07
to
0.51%
in
2Q13
13
Demand
Deposits,
14%
Interest
-
demand,
32%
Savings, 8%
Time of
$100K or
more, 15%
Time <
$100K, 31%
bearing
Demand
Deposits,
15%
Interest
bearing
demand,
46%
Savings, 8%
Time of
$100K or
more, 14%
Time <
$100K, 17%
-
Organic Core Deposit CAGR:
7.3%
Total Deposits 12/31/2007
Total Deposits 6/30/2013
$8.9 Billion
$12.8 Billion |
  Momentum:
Growing Fee Revenue
Momentum:
Growing Fee Revenue
June 30,
December 31,
June 30,
2012
2012
2013
Service charges on deposit accounts
8,583
$
9,158
$
9,347
$
Vehicle origination and servicing fees
2,226
3,746
2,407
Wealth management commissions and fees
12,297
11,882
13,289
Commissions on property and casualty insurance sales
3,930
3,749
4,360
Other commissions and fees
4,800
6,680
6,686
Income from bank-owned life insurance
1,631
1,603
1,520
Mortgage banking revenue
4,343
4,835
3,998
Fee Revenue ($000) - Quarter Ending
14 |
 Momentum:
Efficiency Focus Benefits Core Performance
Momentum:
Efficiency Focus Benefits Core Performance
Successfully lowered efficiency ratio from 66.83% for 2011 to 60.37% for
2012 2Q13 efficiency ratio below management target of 60.0%
Achieved desired cost savings of $58 million from acquisitions and core
Susquehanna operations Opportunity
exists
to
optimize
delivery
model,
including
planned
investments
in
technology
and
web/mobile banking
($000)
15
60.21%
58.98%
60.96%
60.17%
59.57%
2Q12
3Q12
4Q12
1Q13
2Q13
Total Revenue
Total Noninterest Expense
Efficiency Ratio
$75,000
$95,000
$115,000
$135,000
$155,000
$175,000
$195,000
$215,000
Note: Efficiency ratio excludes net realized gain on acquisition, merger related expenses and loss on
extinguishment of debt and is a non-GAAP based financial measure; please refer
to the “Additional Materials” slides at the conclusion of this presentation for
calculations |
 Momentum:
Capital Generation and Returns
Momentum:
Capital Generation and Returns
Capital ratios remain strong
We do not expect Basel III to have a material impact to our risk-weighted
assets Assuming phase out of TruPS was effective today, we believe we would
be fully compliant with revised capital requirements, including the capital
conservation buffer Capital generation has benefited from a leading ROATE
and 30-35% dividend payout ratio Growing capital strength ensures
ability to execute on capital allocation priorities Support continued
organic growth Position for changing regulatory landscape
Increase quarterly cash dividends to shareholders
Consider strategic M&A opportunities
Tangible
Common
Equity
Tier 1
Common /
RWA
Tier 1
Leverage
Tier 1
Risk-Based
Total
Risk-Based
6/30/2013
8.21%
10.41%
9.42%
11.54%
12.94%
Management
Minimum
Target
7.50%
8.00%
6.00%
9.50%
11.50%
1
The
tangible
common
equity
ratio
is
a
non-GAAP
based
financial
measure;
please
refer
to
the
“Additional
Materials”
slides
at
the
conclusion
of
this
presentation
for
calculations
16
1 |
 Earnings Power Drives Returns
Earnings Power Drives Returns
Earnings and Dividends
ROATE
ROAA
1
Non-GAAP
based
financial
measure;
please
refer
to
the
“Additional
Materials”
slides
at
the
conclusion
of
this
presentation
for
calculations
GAAP EPS
35% Payout
Ratio
Dividends
17
$0.14
$0.20
$0.20
$0.23
$0.23
$0.24
$0.08
$0.03
$0.05
$0.06
$0.07
$0.07
$0.08
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
8.36%
13.23%
12.41%
14.01%
13.87%
14.30%
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
0.58%
0.85%
0.81%
0.95%
0.95%
1.01%
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
1 |
 Building on Momentum
Building on Momentum
Regional structure that empowers local community bankers with
the authority, incentives and products they need to drive loan
growth, particularly in consumer lending and small business and
middle-market banking
Peer leading net interest margin to be defended by further
improving funding costs, including continued core deposit
growth, and ongoing active balance sheet management
Growing fees as a percentage of total revenues by investing in
non-bank businesses, building full client relationships and
maximizing significant untapped cross-sell potential
Committed to continuous delivery model improvement, after
streamlining expense structure and improving efficiency in 2012
Strong capital position and focus on growing returns enhances
ability to execute on organic and strategic growth opportunities
1.
Take share, drive
organic loan growth
2.
Defend Margin
3.
Grow fee revenue
4.
Maintain efficiency
5.
Accelerate capital
generation and returns
Opportunity
Susquehanna
18 |
 Additional Materials |
 Executive Leadership Team
Executive Leadership Team
20 |
 Critical Mass in Attractive Markets
Critical Mass in Attractive Markets
1
The 16 counties comprising the company’s Pennsylvania Market, the 10 counties
comprising the company’s Delaware Valley Market and the 14 counties
comprising
the
company’s
Maryland
Market
are
listed
in
the
“Additional
Materials”
slides
at
the
conclusion
of
this
presentation
2
Company
data
as
of
6/30/2013.
Percentages
based
on
internal
company
commercial
and
retail
market
allocations.
Excludes
leases
and
tax
free
loans
and
brokered
and
inter-company
deposits
3
FDIC June 30, 2012 deposit market share data as reported by SNL for the counties
comprising each of the company’s three markets 4
U.S. Census Bureau’s American Community Survey of median household income by
county Pennsylvania Market
Foundation for growth with stable commercial and
retail banking base providing ample deposits
Home to distribution hubs for global retailers,
manufacturers and distributors serving Northeast
and Mid-Atlantic markets
Susquehanna Bank Market
1
Pennsylvania
Delaware
Valley
Maryland
Branches
119
76
66
Loans
as
%
of
total
47%
23%
30%
Deposits
as
%
of
total
44%
30%
26%
Deposit
market
share
(rank)
2012
9.0%
(5
)
2.7%
(8
)
4.5%
(6
)
2011
7.6%
(6
)
1.3%
(9
)
3.8%
(6
)
2007
3.9%
(9
)
1.2%
(12
)
4.2%
(7
)
Delaware Valley Market
Includes Philadelphia and the state’s four most-
affluent counties
Growth opportunities fueled by world-leading
education, health care and research institutions
Maryland Market
Includes Baltimore and four of the nation’s 45
most-affluent counties including no. 5, Howard
County
4
Growth opportunities fueled by world-leading
education, health care and research institutions,
as well as major federal agencies and contractors
21
2
2
3
th
th
th
th
th
4
th
th
th
th |
 2
nd
Quarter 2013 Financial Highlights
2
nd
Quarter 2013 Financial Highlights
(Dollars in thousands, except earning per share data)
6/30/2013
12/31/2012
6/30/2012
Balance Sheet:
Loans and Leases
13,157,762
$
12,894,741
$
12,585,912
$
Deposits
12,764,232
$
12,580,046
$
12,690,524
$
Income Statement:
Net interest income
148,097
$
155,304
$
152,670
$
Pre-tax pre-provision income *
77,435
$
75,262
$
74,324
$
Provision for loan and lease losses
12,000
$
13,000
$
16,000
$
GAAP net income
45,648
$
43,174
$
37,793
$
GAAP EPS
0.24
$
0.23
$
0.20
$
Quarterly Performance Highlights
* Excludes merger-related and extinguishment of debt expenses
22 |
   Loan and
Lease Originations Loan and Lease Originations
Average Balance*
($ in Millions)
Balance
Originations
Balance
Originations
Balance
Originations
Balance
Originations
Balance
Originations
Commercial
1,847
$
206
$
1,870
$
167
$
1,898
$
226
$
1,996
$
224
$
2,005
$
221
$
Real Estate - Const & Land
936
74
899
101
859
92
797
137
777
148
Real Estate - 1-4 Family Res
2,262
101
2,279
86
2,274
72
2,266
57
2,262
67
Real Estate - Commercial
4,350
110
4,315
121
4,276
136
4,295
206
4,356
263
Real Estate - HELOC
1,128
88
1,169
93
1,209
89
1,235
113
1,285
154
Tax-Free
379
22
390
55
430
4
427
3
420
2
Consumer Loans
764
116
794
110
810
104
820
114
853
149
Commercial Leases
306
79
299
81
289
85
287
78
300
124
Consumer Leases
376
65
424
86
512
167
644
138
698
87
VIE
180
-
173
-
168
-
162
-
156
-
Total Loans
12,528
$
862
$
12,612
$
900
$
12,725
$
975
$
12,929
$
1,070
$
13,112
$
1,215
$
2Q13
1Q13
4Q12
3Q12
2Q12
*By collateral type
23 |
  Loan Mix
& Yield Loan Mix & Yield
Average Balance*
($ in Millions)
INT % QTR
Commercial
1,847
$
5.43%
$ 1,870
5.31%
1,898
$
5.35%
$ 1,996
5.28%
2,005
$
5.03%
Real Estate - Const & Land
936
5.66%
899
5.64%
859
5.90%
797
6.05%
777
6.69%
Real Estate - 1-4 Family Res
2,262
5.26%
2,279
5.03%
2,274
4.97%
2,266
4.91%
2,262
4.82%
Real Estate - Commercial
4,350
5.78%
4,315
5.60%
4,276
5.51%
4,295
5.43%
4,356
5.22%
Real Estate - HELOC
1,128
3.81%
1,169
3.82%
1,209
3.74%
1,235
3.68%
1,285
3.64%
Tax-Free
379
5.45%
390
5.40%
430
5.47%
427
5.10%
420
5.09%
Consumer Loans
764
5.21%
794
5.02%
810
4.95%
820
4.77%
853
4.52%
Commercial Leases
306
7.72%
299
7.48%
289
7.50%
287
7.56%
300
7.15%
Consumer Leases
376
4.60%
424
4.30%
512
4.11%
644
3.88%
698
3.68%
VIE
180
4.46%
173
4.42%
168
4.39%
162
4.36%
156
4.34%
Total Loans
12,528
$
5.33%
$ 12,612
5.23%
12,725
$
5.18%
$ 12,929
5.03%
13,112
$
4.95%
2Q13
2Q12
3Q12
4Q12
1Q13
*By collateral type
24 |
 CRE
and Construction Composition CRE and Construction Composition
2Q13
25
Office, 16%
Retail, 15%
Other, 13%
Service, 11%
Residential, 8%
Land, 7%
Hotels -
Motels, 6%
Warehouse, 6%
Multi-Family, 5%
Mixed Use, 5%
Commercial Construction,
4%
Industrial/Manufacturing, 2%
Recreational, 2% |
 Asset
Quality ($ in Millions)
Asset Quality
($ in Millions)
2Q12
3Q12
4Q12
1Q13
2Q13
NPL's Beginning of Period
133.5
$
127.3
$
118.4
$
97.8
$
103.4
$
New Non Accruals
34.5
17.3
19.0
23.1
23.6
Cure/Exits/Other
(16.8)
(6.2)
(21.5)
0.4
(13.4)
Gross Charge-Offs
(17.3)
(15.8)
(15.4)
(15.5)
(5.0)
Transfer to OREO
(6.6)
(4.2)
(2.7)
(2.4)
(3.5)
NPL's End of Period
127.3
$
118.4
$
97.8
$
103.4
$
105.1
$
26
$127
$118
$98
$103
$105
$75
$85
$95
$105
$115
$125
$135
2Q12
3Q12
4Q12
1Q13
2Q13
Non Accruals
$67
$57
$68
$66
$64
$30
$35
$40
$45
$50
$55
$60
$65
$70
2Q12
3Q12
4Q12
1Q13
2Q13
TDRs |
 Asset
Quality ($ in Millions)
Asset Quality
($ in Millions)
27
$388
$415
$388
$403
$446
$200
$250
$300
$350
$400
$450
$500
2Q12
3Q12
4Q12
1Q13
2Q13
OAEM
$591
$539
$530
$532
$495
$350
$400
$450
$500
$550
$600
$650
2Q12
3Q12
4Q12
1Q13
2Q13
Substandard
$36
$63
$80
$59
$39
$30
$40
$50
$60
$70
$80
$90
2Q12
3Q12
4Q12
1Q13
2Q13
Past Due 30
-89 days
$11
$8
$8
$6
$7
$4
$5
$6
$7
$8
$9
$10
$11
$12
2Q12
3Q12
4Q12
1Q13
2Q13
Past due 90 days or more |
  Investment Securities
Investment Securities
EOP Balance
($ in Millions)
QTR Yield
Total Investment Securities
$2,866
$2,908
$2,730
$2,553
$2,494
Duration (years)
3.6
3.6
3.6
3.6
4.3
Yield
2.92%
2.69%
2.59%
2.64%
2.61%
Unrealized Gain/(Loss)
$40.8
$61.9
$57.1
$50.6
($2.7)
2Q13
1Q13
4Q12
3Q12
2Q12
28 |
  Deposit
Mix & Cost Deposit Mix & Cost
Average Balance
($ in Millions)
INT % QTR
Demand
1,922
$
0.00%
1,938
$
0.00%
1,946
$
0.00%
1,918
$
0.00%
1,912
$
0.00%
Interest Bearing Demand
5,480
0.39%
5,537
0.35%
5,803
0.33%
5,895
0.32%
5,984
0.28%
Savings
1,005
0.13%
1,003
0.11%
1,019
0.11%
1,049
0.11%
1,080
0.11%
Certificates of Deposits
4,065
1.13%
4,111
1.17%
3,835
1.21%
3,778
1.21%
3,892
1.20%
Total Interest-Bearing Deposits
10,550
$
0.65%
10,651
$
0.64%
10,657
$
0.62%
10,722
$
0.61%
10,956
$
0.59%
Core Deposits/Total
67.4%
67.3%
69.6%
70.1%
69.8%
Loans(excluding VIE)/Deposits
99.7%
99.8%
99.6%
101.0%
100.7%
3Q12
2Q12
2Q13
1Q13
4Q12
29 |
  Borrowing Mix & Cost
Borrowing Mix & Cost
Average Balance
($ in Millions)
INT % QTR
Short-Term Borrowings
726
$
0.29%
749
$
0.28%
811
$
0.26%
817
$
0.25%
728
$
0.26%
FHLB Advances
1,082
0.33%
1,073
0.35%
1,167
0.36%
1,155
0.33%
1,042
0.36%
Long Term Debt
686
4.93%
727
4.85%
561
1.19%
509
3.28%
496
3.32%
Total Borrowings
2,494
$
1.58%
2,549
$
1.62%
2,539
$
0.51%
2,481
$
0.91%
2,266
$
0.98%
Off Balance Sheet Swap Impact
675
0.70%
675
0.69%
675
0.71%
927
0.73%
927
0.82%
Total Borrowing Cost
Total Borrowings / Total Assets
12.5%
14.0%
2.31%
14.1%
1.22%
14.1%
1.64%
13.8%
2.28%
1.80%
2Q12
3Q12
4Q12
1Q13
2Q13
30 |
  Quarterly Fee Revenue
Quarterly Fee Revenue
*Excludes Net realized gain on acquisitions
31
June 30,
September 30,
December 31,
March 31,
June 30,
2012
2012
2012
2013
2013
Service charges on deposit accounts
8,583
$
9,013
$
9,158
$
8,672
$
9,347
$
Vehicle origination and servicing fees
2,226
2,470
3,746
3,354
2,407
Wealth management commissions and fees
12,297
11,923
11,882
12,390
13,289
Commissions on property and casualty insurance sales
3,930
3,158
3,749
4,542
4,360
Other commissions and fees
4,800
5,387
6,680
5,237
6,686
Income from bank-owned life insurance
1,631
1,726
1,603
1,508
1,520
Mortgage banking revenue
4,343
5,113
4,835
4,110
3,998
Net realized gain (loss) on sales of securities
1,361
31
(200)
18
(71)
Other
640
4,840
2,319
2,813
7,540
Total*
39,811
$
43,661
$
43,772
$
42,644
$
49,076
$
Noninterest Income ($000) |
 Earnings Drivers
Earnings Drivers
($000)
2Q12
3Q12
4Q12
1Q13
2Q13
Avg. interest-earning assets
$15,332,806
$15,537,037
$15,604,029
$15,642,309
$15,720,859
Net interest margin (FTE)
4.10%
3.92%
4.06%
3.97%
3.88%
Net interest income
$152,670
$149,142
$155,304
$149,206
$148,097
Noninterest income
39,811
43,661
43,772
42,644
49,076
Total revenue
192,481
192,803
199,076
191,850
197,173
Noninterest expense
118,157
*
115,959
*
123,814
*
117,729
119,738
Pre-tax, pre-provision income
74,324
*
76,844
*
75,262
*
74,121
77,435
Provision for loan losses
16,000
16,000
13,000
12,000
12,000
Pre-tax income
$58,324
*
$60,844
*
$62,262
*
$62,121
$65,435
2013
Financial
Targets
FTE margin
3.88%
Loan growth
5.00%
Deposit growth
5.00%
Non-interest income growth
11.00%
Non-interest expense growth
-1.00%
Tax rate
31.00%
Note: The growth percentages included in these financial targets are based
upon 2012 reported numbers * Excludes merger-related and extinguishment
of debt expenses 32 |
 Susquehanna Bank Markets
Susquehanna Bank Markets
Pennsylvania Market:
Adams, PA
Berks, PA
Centre, PA
Cumberland, PA
Dauphin, PA
Lancaster, PA
Lebanon, PA
Lehigh, PA
Luzerne, PA
Lycoming, PA
Northampton, PA
Northumberland, PA
Schuylkill, PA
Snyder, PA
Union, PA
York, PA
Maryland Market:
Allegany, MD
Anne Arundel, MD
Baltimore, MD
Baltimore City, MD
Bedford, PA
Berkley, WV
Carroll, MD
Franklin, PA
Fulton, PA
Garrett, MD
Harford, MD
Howard, MD
Washington, MD
Worcester, MD
Delaware Valley Market:
Atlantic, NJ
Bucks, PA
Burlington, NJ
Camden, NJ
Chester, PA
Cumberland, NJ
Delaware, PA
Gloucester, NJ
Montgomery, PA
Philadelphia, PA
33 |
 Peer
Companies Peer Companies
34
BancorpSouth, Inc.
City National Corporation
Commerce Bancshares, Inc.
Cullen/Frost Bankers, Inc.
F.N.B. Corporation
First Horizon National Corporation
First Niagara Financial Group, Inc.
FirstMerit Corporation
Fulton Financial Corporation
Hancock Holding Company
IBERIABANK Corporation
People's United Financial, Inc.
Prosperity Bancshares, Inc.
Signature Bank
TCF Financial Corporation
UMB Financial Corporation
Valley National Bancorp
Webster Financial Corporation
Wintrust Financial Corporation |
 Non-GAAP Reconciliation
($ in thousands)
Non-GAAP Reconciliation
($ in thousands)
35
2Q13
1Q13
4Q12
3Q12
2Q12
Efficiency Ratio
Other expense
119,738
$
117,729
$
125,277
$
122,910
$
121,475
$
Less: Merger related expenses
0
0
(1,054)
(1,500)
(3,318)
Loss on extinguishment of debt
0
0
(409)
(5,451)
0
Noninterest operating expense (numerator)
119,738
$
117,729
$
123,814
$
115,959
$
118,157
$
Taxable-equivalent net interest income
151,916
$
153,021
$
159,332
$
152,948
$
156,416
Other income
49,076
42,644
43,772
43,661
39,811
Denominator
200,992
$
195,665
$
203,104
$
196,609
$
196,227
$
Efficiency ratio
59.57%
60.17%
60.96%
58.98%
60.21%
Tangible Common Ratio
End of period balance sheet data
Shareholders' equity
2,644,940
$
2,639,489
$
2,595,909
$
2,584,682
$
2,544,730
$
Goodwill and other intangible assets
(1)
(1,265,016)
(1,266,610)
(1,263,563)
(1,263,361)
(1,267,630)
Tangible common equity (numerator)
1,379,924
$
1,372,879
$
1,332,346
$
1,321,321
$
1,277,100
$
Assets
18,083,039
$
17,967,174
$
18,037,667
$
18,106,730
$
18,040,009
$
Goodwill and other intangible assets
(1)
(1,265,016)
(1,266,610)
(1,263,563)
(1,263,361)
(1,267,630)
Tangible assets (denominator)
16,818,023
$
16,700,564
$
16,774,104
$
16,843,369
$
16,772,379
$
Tangible common ratio
8.21%
8.22%
7.94%
7.84%
7.61%
(1)
Net of applicable deferred income taxes
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.
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 assts. 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. |
 Non-GAAP Reconciliation
($ in thousands)
Non-GAAP Reconciliation
($ in thousands)
36
2Q13
1Q13
4Q12
3Q12
2Q12
Return on Average Tangible Equity
Income statement data
Net income
45,648
$
42,399
$
43,174
$
36,732
$
37,793
$
Amortization of intangibles, net of taxes at 35%
1,984
2,124
2,127
2,169
2,211
Net tangible income (numerator)
47,632
$
44,523
$
45,301
$
38,901
$
40,004
$
Average balance sheet data
Shareholders' equity
2,648,314
$
2,614,319
$
2,597,254
$
2,562,092
$
2,537,250
$
Goodwill and other intangible assets
(1,312,257)
(1,312,662)
(1,311,192)
(1,315,071)
(1,320,658)
Tangible common equity (denominator)
1,336,057
$
1,301,657
$
1,286,062
$
1,247,021
$
1,216,592
$
Return on equity (GAAP basis)
6.91%
6.58%
6.61%
5.70%
5.99%
Effect of goodwill and other intangibles
7.39%
7.29%
7.40%
6.71%
7.24%
Return on average tangible equity
14.30%
13.87%
14.01%
12.41%
13.23%
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. |