FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-10674
SUSQUEHANNA BANCSHARES, INC.
----------------------------
(Exact name of Registrant as specified in its Charter)
Pennsylvania 23-2201716
------------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
26 North Cedar Street
Lititz, Pennsylvania 17543
---------------------------
(Address of principal executive offices) (Zip Code)
(717) 626-4721
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports,) and (2) has been subject to such filing
requirements for the past 90 days.
Yes (X) No _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
As of September 30, 1995 the Registrant had 11,640,549 shares of common stock
outstanding.
SUSQUEHANNA BANCSHARES, INC.
INDEX
SEQUENTIAL
PAGE
REFERENCE
PART I. FINANCIAL INFORMATION.......................... 3
Item 1. FINANCIAL STATEMENTS........................... 3
Consolidated Balance Sheets -
As of September 30, 1995 and 1994,
And December 31, 1994............................... 3
Consolidated Statements of Income
For the three and nine months ended
September 30, 1995 & 1994........................... 4
Consolidated Statements of Cash Flow
For the Nine Month Periods
Ended September 30, 1995 and 1994................... 5
Notes to Consolidated Financial Statements.......... 6-8
Item 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND THE RESULTS OF OPERATIONS.................. 9-18
PART II OTHER INFORMATION.............................. 19
Item 6. EXHIBITS AND REPORTS ON FORM 8-K............... 19
SIGNATURES..................................... 20
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Susquehanna Bancshares, Inc. and Subsidiaries
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CONSOLIDATED BALANCE SHEETS
(Dollars in thousands) September 30 December 31 September 30
ASSETS 1995 1994 1994
- ------------------------------------------------------------------------------------------------------------------------
Cash and due from banks $80,665 $79,473 $78,389
Short-term investments 70,068 15,603 12,798
Investment securities available for sale 417,725 374,045 388,820
Investment securities held to maturity 174,756 223,951 228,033
(Fair values of $176,771; $217,035; and $222,384)
Loans and leases, net of unearned income 1,692,790 1,466,186 1,435,731
Less: Allowance for loan and lease losses 27,948 23,845 23,114
- ------------------------------------------------------------------------------------------------------------------------
Net loans and leases 1,664,842 1,442,341 1,412,617
Premises and equipment (net) 34,689 31,886 32,114
Accrued income receivable 19,995 17,847 16,902
Other assets 59,385 46,263 45,975
- ------------------------------------------------------------------------------------------------------------------------
Total assets $2,522,125 $2,231,409 $2,215,648
========================================================================================================================
LIABILITIES & STOCKHOLDERS' EQUITY
Deposits:
Demand $255,191 $261,045 $248,984
Interest-bearing demand 471,909 464,052 475,060
Savings 388,331 398,423 414,257
Time 882,796 697,406 681,377
Time of $100 or more 89,814 45,404 39,961
- ------------------------------------------------------------------------------------------------------------------------
Total deposits 2,088,041 1,866,330 1,859,639
Short-term borrowings 76,266 73,352 66,300
Long-term debt 91,979 49,314 49,373
Accrued interest, taxes, and expenses payable 21,560 18,478 14,182
Other liabilities 10,073 6,831 9,233
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Total liabilities 2,287,919 2,014,305 1,998,727
- ------------------------------------------------------------------------------------------------------------------------
Stockholders' equity:
Common stock
Authorized: 32,000,000 shares ($2.00 par value)
Issued: 11,682,880 shares 23,366 23,366 23,366
Surplus 43,014 42,919 42,296
Retained earnings 168,436 159,051 156,174
Unrealized gains and losses for available-for-sale
securities, net of taxes (287) (7,859) (4,542)
Less: Treasury stock, (42,331; 48,962; and 48,962 common
shares at cost) 323 373 373
- ------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 234,206 217,104 216,921
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Total liabilities and stockholders' equity $2,522,125 $2,231,409 $2,215,648
========================================================================================================================
The accompanying notes are an integral part of these financial statements.
Susquehanna Bancshares, Inc. and Subsidiaries
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CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
(Dollars in thousands, except per share) 1995 1994 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
INTEREST INCOME
Interest and fees on loans and leases $39,732 $30,403 $111,365 $85,403
Interest on investment securities: Taxable 8,043 7,023 21,638 19,260
Tax-exempt 1,227 1,411 3,933 3,781
Interest on short-term investments 672 623 2,061 1,345
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Total interest income 49,674 39,460 138,997 109,789
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INTEREST EXPENSE
Interest on deposits:
Interest-bearing demand 3,272 2,806 9,703 8,011
Savings 2,595 2,785 7,610 7,525
Time 13,615 7,741 35,109 21,653
Interest on short-term borrowings 937 773 2,620 1,594
Interest on long-term debt 1,885 765 5,385 2,002
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Total interest expense 22,304 14,870 60,427 40,785
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Net interest income 27,370 24,590 78,570 69,004
Provision for loan and lease losses 1,140 1,013 3,711 2,989
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Net interest income after provision for loan and lease losses 26,230 23,577 74,859 66,015
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OTHER INCOME
Service charges on deposit accounts 1,289 1,236 3,735 3,576
Other service charges, commissions, fees 254 232 785 729
Income from fiduciary-related activities 704 636 2,116 1,873
Other operating income 2,430 1,613 5,152 4,717
Investment security gains/(losses) 27 (3) (46) 999
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Total other income 4,704 3,714 11,742 11,894
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OTHER EXPENSES
Salaries and employee benefits 10,835 9,569 31,264 27,010
Net occupancy expense 1,430 1,293 4,158 3,866
Furniture and equipment expense 1,003 994 3,033 2,930
FDIC insurance premiums 117 960 2,356 2,886
Other operating expenses 6,833 6,048 18,738 16,710
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Total other expenses 20,218 18,864 59,549 53,402
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Income before income taxes and extraordinary item 10,716 8,427 27,052 24,507
Provision for income taxes 3,467 2,427 8,184 7,374
- ---------------------------------------------------------------------------------------------------------------------------------
Income before extraordinary item 7,249 6,000 18,868 17,133
Extraordinary item -- -- -- (732)
- ---------------------------------------------------------------------------------------------------------------------------------
Net income $7,249 $6,000 $18,868 $16,401
=================================================================================================================================
Earnings per common share:
Before extraordinary item $0.62 $0.52 $1.62 $1.47
Extraordinary item -- -- -- (0.06)
Net income 0.62 0.52 1.62 1.41
Cash dividends per common share 0.27 0.25 0.81 0.75
- ---------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Susquehanna Bancshares, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
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(Dollars in thousands)
Nine month periods ended September 30 1995 1994
- -------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES:
Net income $18,868 $16,401
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization and accretion 7,079 6,635
Provision for loan and lease losses 3,711 2,989
Deferred taxes -- (120)
(Gain/loss on securities transactions 46 (999)
Gain on sale of mortgages (1,369) (627)
Gain on sale of other real estate owned (76) (41)
Loss on the early extinguishment of debt -- 1,126
Mortgage loans originated for resale (47,945) (36,398)
Sale of mortgage loans originated for resale 77,518 43,303
Increase in accrued interest receivable (444) (2,905)
Decrease in accrued interest payable (1,533) (762)
Decrease in accrued expenses and taxes payable (1,838) (396)
Change in fiscal year of pooled entity (381) --
Other, net (4,246) (3,775)
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Net cash provided by operating activities 49,390 24,431
- -------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Proceeds from the sale of available-for-sale securities 26,220 60,523
Proceeds from the maturity of investment securities 108,698 118,755
Purchase of available-for-sale securities (88,774) (150,386)
Purchase of held-to-maturity securities (4,267) (99,776)
Net increase in loans and leases (53,062) (89,145)
Capital expenditures (3,210) (3,289)
Net cash (paid)/received in acquisition (17,517) 139,439
Change in fiscal year of pooled entity 81 --
- -------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (31,831) (23,879)
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FINANCING ACTIVITIES:
Net increase/(decrease) in deposits 11,892 (52,281)
Net increase/(decrease) in short-term borrowings (6,488) 35,583
Proceeds from issuance of long-term debt 55,122 12,350
Repayment of long-term debt (14,271) (22,404)
Proceeds from issuance of common stock 768 202
Dividends paid (9,102) (8,206)
Change in fiscal year of pooled entity 177 --
- -------------------------------------------------------------------------------------------------------------------
Net cash provided by/(used for) financing activities 38,098 (34,756)
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NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 55,657 (34,204)
CASH AND CASH EQUIVALENTS AT JANUARY 1 95,076 125,391
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CASH AND CASH EQUIVALENTS AT SEPTEMBER 30 $150,733 $91,187
===================================================================================================================
Cash and cash equivalents:
Cash and due from banks $80,665 $78,389
Short-term investments 70,068 12,798
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CASH AND CASH EQUIVALENTS AT SEPTEMBER 30 $150,733 $91,187
===================================================================================================================
Interest paid on deposits, short-term borrowings, and long-term debt was
$58,960 in 1995, and $38,940 in 1994. Income taxes paid were $6,943 in 1995, and
$7,295 in 1994. Amounts transferred to other real estate owned were $3,578 in
1995, and $1,142 in 1994.
On April 21, 1995, Susquehanna acquired Reisterstown Holdings, Inc.,
Reisterstown, MD for $28,640. At the time of the acquisition, loans acquired
were $201,182; investment securities were $26,798; and deposits were $209,819.
On July 11, 1994, Susquehanna acquired eight banking offices of The First
National Bank of Maryland. At the time of the acquisition, loans acquired were
$45,538 and deposits acquired were $194,114.
The accompanying notes are an integral part of these financial statements.
Susquehanna Bancshares, Inc. and Subsidiaries
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
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UNREALIZED
Nine Month Periods Ended September 30 PREFERRED COMMON RETAINED GAINS/LOSSES ON TREASURY TOTAL
(In thousands, except per share) STOCK STOCK SURPLUS EARNINGS SECURITIES STOCK EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
Balance - January 1, 1994 $40 $23,355 $42,064 $147,979 $5,363 ($373) $218,428
Common stock issued under
employee benefit plans 203 203
Preferred shares converted to
common (1,884 shares) (40) 11 29 --
Net income 16,401 16,401
Change in unrealized gain/loss on securities (9,905) (9,905)
Cash dividends paid:
Per common share of $0.75 (8,206) (8,206)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance - September 30, 1994 $0 $23,366 $42,296 $156,174 ($4,542) ($373) $216,921
====================================================================================================================================
Balance - January 1, 1995 23,366 42,919 159,051 (7,859) (373) 217,104
Net income 18,868 18,868
Change in fiscal year of pooled entity (623) (381) (44) (1,048)
Common stock issued under
employee benefit plans 718 50 768
Change in unrealized gain/loss on securities 7,616 7,616
Cash dividends paid:
Per common share of $0.81 (9,102) (9,102)
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Balance - September 30, 1995 $23,366 $43,014 $168,436 ($287) ($323) $234,206
====================================================================================================================================
ACCOUNTING POLICIES
The information contained in this report is unaudited and is subject to year-
end adjustments. However, in the opinion of management, the information reflects
all adjustments necessary for a fair statement of results for the periods ended
September 30, 1995 and 1994.
Prior period information has been restated to reflect the acquisition of
Atlanfed Bancorp, Inc. The transaction, which was completed on April 1, 1995,
has been accounted for as a pooling-of-interests.
On April 21, 1995, Susquehanna acquired Reisterstown Holdings, Inc. for
$28,640. The transaction has been accounted for under the purchase method of
accounting.
The accounting policies of Susquehanna Bancshares, Inc. & Subsidiaries
(Susquehanna), as applied in the consolidated interim financial statements
presented herein, are substantially the same as those followed on an annual
basis as presented on pages 28 and 29 of the 1994 Annual Report to Shareholders.
INVESTMENT SECURITIES
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The amortized costs and fair values of securities are as follows:
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September 30, 1995 December 31, 1994
--------------------------- ----------------------------
(In thousands) Amortized cost Fair value Amortized cost Fair value
-------------- ---------- -------------- ----------
Available-for-sale:
U.S. Treasury $161,946 $162,134 $189,461 $184,494
U.S. Government agencies 52,538 52,153 22,042 20,932
Mortgage-backed 113,701 112,451 70,797 68,505
Corporates 73,225 73,451 89,629 84,989
Equities 16,748 17,536 14,443 15,125
- ------------------------------------------------------------------------------------------
418,158 417,725 386,372 374,045
- ------------------------------------------------------------------------------------------
Held-to-maturity:
U.S. Treasury $9,962 $10,180 9,948 9,655
U.S. Government agencies 19,973 20,105 29,506 28,169
State & municipal 106,270 107,543 120,582 118,677
Mortgage-backed 19,526 19,694 44,913 42,310
Corporates 19,025 19,249 19,002 18,224
- ------------------------------------------------------------------------------------------
174,756 176,771 223,951 217,035
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Total investment securities $592,914 $594,496 $610,323 $591,080
==========================================================================================
Susquehanna Bancshares, Inc. and Subsidiaries
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LOANS AND LEASES
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Loans and leases, net of unearned income at September 30, 1995, and December 31, 1994, were as follows:
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September 30, December 31,
(In thousands) 1995 1994
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Commercial, financial, and agricultural $192,502 $186,013
Real estate - construction 175,682 84,886
Real estate - mortgage 1,090,174 955,357
Consumer 216,250 223,963
Leases 18,182 15,967
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Total loans and leases $1,692,790 $1,466,186
====================================================================================================================================
SHORT-TERM BORROWINGS
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Short-term borrowings at September 30, 1995, and December 31, 1994, were as follows:
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September 30, December 31,
(In thousands) 1995 1994
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Subsidiaries:
Securities sold under repurchase agreements $34,273 $36,522
Treasury tax and loan notes 10,193 5,630
Federal Home Loan Bank borrowings 26,000 21,200
Federal Reserve Bank borrowings 5,800 ---
Parent:
Other --- 10,000
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Total short-term borrowings $76,266 $73,352
====================================================================================================================================
LONG-TERM DEBT
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Long-term debt at September 30, 1995, and December 31, 1994 was as follows:
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September 30, December 31,
(In thousands) 1995 1994
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Subsidiaries:
Term note due May, 1995 $ --- $4,000
Promissory note due June, 1995 --- 2,000
Subordinated debt due in varying installments through July, 1995 --- 12
Term note due July, 1996 4,000 4,000
Term note due October, 1997 2,000 2,000
Term note due July, 1998 5,000 ---
Term loan note due in varying
installments through March, 1999 --- 5,850
Installment note due June, 1999 64 74
FHLB advances in varying maturities through December, 2003 30,378 31,378
Term loan note due September, 2014 537 ---
Parent:
Subordinated notes due February, 2005 50,000 ---
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Total long-term debt $91,979 $49,314
====================================================================================================================================
Susquehanna Bancshares, Inc. and Subsidiaries
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IMPAIRED LOANS
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(Dollars in thousands)
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Susquehanna adopted SFAS 114, "Accounting by Creditors for Impairment of a
Loan", as amended by SFAS 118, on January 1, 1995, (collectively "the
Statements"). Under the Statements, a loan is considered impaired, based on
current information and events, if it is probable that Susquehanna will be
unable to collect the scheduled payments of principal or interest when due
according to the contractual terms of the loan agreement. For purposes of
applying the Statements, larger groups of smaller-balance loans, such as
residential mortgage and installment loans are collectively evaluated for
impairment and, therefore are not subject to the Statements. Management has
established a smaller-dollar value threshold of $100 for commercial loans.
Commercial loans exceeding this threshold are evaluated in accordance with the
Statements. An insignificant delay or shortfall in the amounts of payments, when
considered independent of other factors, would not cause a loan to be rendered
impaired. Insignificant delays or shortfalls may include, depending on specific
facts and circumstances, those that are associated with temporary operational
downturns or seasonal delays.
Management performs periodic reviews of its loans to identify impaired loans.
The measurement of impaired loans is based on the present value of expected
future cash flows discounted at the historical effective interest rate, except
that all collateral-dependent loans are measured for impairment based on the
fair value of the collateral. The adoption of the Statements did not result in
an additional provision for loan and lease losses at January 1, 1995.
Loans continue to be classified as impaired unless they are brought fully
current and the collection of scheduled interest and principle is considered
probable. When an impaired loan or portion of an impaired loan is determined to
be uncollectible, the portion deemed uncollectible is charged against the
related valuation allowance and subsequent recoveries, if any, are credited to
the valuation allowance. Susquehanna does not accrue interest on impaired loans.
While a loan is considered impaired, cash payments received are applied to
principle or interest depending upon management's assessment of the ultimate
collectibility of principle and interest.
Susquehanna's impaired loans totalled $21,715 at September 30, 1995, of which
$11,780 had no related SFAS 114 allowance. The remaining impaired loans of
$9,935 had a related SFAS 114 allowance of $1,254. For the third quarter and
first nine months of 1995, the average balance for impaired loans was $21,465
and $18,304, respectively, and the interest income recognized on impaired loans
was $89 and $348, respectively. All interest income recognized on impaired loans
was recorded on the cash basis.
ACQUISITIONS
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(Dollars in thousands, except per share)
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On April 1, 1995, Susquehanna ("SBI") acquired Atlanfed Bancorp, Inc.("ABI"),
a Maryland thrift holding company with $255 million in assets and $179 million
in deposits. SBI issued approximately 1.2 million shares of common stock to
shareholders of ABI based on an exchange ratio of .802 shares or SBI's common
stock for each share of ABI common stock.
The ABI acquisition was accounted for under the pooling-of-interests method
of accounting; accordingly, the consolidated financial statements have been
restated to include the consolidated accounts of ABI for all periods presented.
Previously reported information was as follows:
Nine Months Ended
Quarter Ended March 31, 1995 Quarter Ended September 30, 1994 September 30, 1994
---------------------------- -------------------------------- ----------------------
SBI ABI SBI ABI SBI ABI
------------ ------------- ------------- --------------- ----------- ---------
Net interest income $22,351 $2,211 $22,400 $2,190 $62,652 $6,352
Loan loss provision 1,461 39 974 39 2,864 125
Other income 2,853 401 3,273 441 10,255 1,639
Other expense 17,289 1,890 16,857 2,007 46,697 6,705
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Income before taxes 6,454 683 7,842 585 23,346 1,161
Taxes 1,616 302 2,168 259 6,671 703
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Income before extraordinary item 4,838 381 5,674 326 16,675 458
Extraordinary item -- -- -- -- (732) --
- ----------------------------------------------------------------------------------------------------------------------------------
Net income $4,838 $381 $5,674 $326 $15,943 $458
==================================================================================================================================
Earnings per share:
Before extraordinary item $0.46 $0.26 $0.54 $0.22 $1.60 $0.32
Net income 0.46 0.26 0.54 0.22 1.53 0.32
In conjunction with the merger, ABI changed its fiscal year end from March 31
to December 31 and as a result, ABI's earnings for their quarter ended March 31,
1995, are included in the pooled consolidated income statements for both the
fourth quarter of 1994 and the first quarter of 1995.
On April 21, 1995, SBI purchased Reisterstown Holdings, Inc. ("RHI"), a
Maryland thrift holding company with $248 million in assets and $212 million in
deposits at the acquisition date, for $28.6 million. The transaction was
accounted for under the purchase method of accounting and, accordingly, the
results of operations of RHI have been included in SBI since the date of
acquisition. Under this method of accounting, the purchase price is allocated to
the respective assets acquired and liabilities assumed based on their estimated
fair market value, net of income tax effects. Goodwill of $12.6 million was
created in this transaction and will be amortized to other operating expense on
a straight-line basis over 15 years.
A summary of unaudited pro forma combined financial information for SBI and
RHI combined follows:
Quarter Ended September 30 Nine Months Ended September 30
-------------------------- ------------------------------
1995 1994 1995 1994
---------- -------------- -------------- --------------
Net interest income $27,370 $26,771 $81,704 $75,139
Loan loss provision 1,140 1,043 3,711 3,094
Other income 4,704 4,211 12,308 14,894
Other expense 20,218 20,696 61,935 59,012
- -------------------------------------------------------------------------------------------------------------------------
Income before taxes 10,716 9,243 28,366 27,927
Taxes 3,467 2,986 8,825 9,250
- -------------------------------------------------------------------------------------------------------------------------
Income before extraordinary item 7,249 6,257 19,541 18,677
Extraordinary item 0 0 0 (732)
- -------------------------------------------------------------------------------------------------------------------------
Net income $7,249 $6,257 $19,541 $17,945
=========================================================================================================================
Earnings per share:
Before extraordinary item $0.62 $0.54 $1.68 $1.61
Net income 0.62 0.54 1.68 1.54
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND FINANCIAL
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CONDITION
- ---------
The following is management's discussion and analysis of the significant changes
in the consolidated financial condition, results of operations, and cash flows
of Susquehanna Bancshares, Inc. ("Susquehanna").
(1) Material Changes in Financial Condition
---------------------------------------
Liquidity and Interest Rate Sensitivity
--------------------------------------
Liquidity and interest rate sensitivity are related but distinctly
different from one another. The maintenance of adequate liquidity -- the
ability to meet the cash requirements of its customers and other financial
commitments -- is a fundamental aspect of Susquehanna's asset/liability
management strategy. Susquehanna's policy of diversifying its funding sources
- -- purchased funds, repurchase agreements, and deposit accounts -- allows it to
avoid undue concentration in any single financial market and also to avoid heavy
funding requirements within short periods of time.
However, liquidity is not entirely dependent on increasing
Susquehanna's liability balances. Liquidity can also be generated from maturing
or readily marketable assets. The carrying value of investment securities
maturing within one year amounted to $149.4 million or 25.2% of the investment
portfolio at September 30, 1995. Short-term investments totaling $70 million at
September 30, 1995 represent additional sources of liquidity.
Closely related to the management of liquidity is the management of
rate sensitivity which focuses on maintaining stability in the net interest
margin, an important factor in earnings growth. Interest rate sensitivity is
the matching or mismatching of the maturity and rate structure of the interest-
bearing assets and liabilities. It is the objective of management to control
the difference in the timing of the rate changes for these assets and
liabilities to preserve a satisfactory net interest margin. In doing so,
Susquehanna endeavors to maximize earnings in an environment of changing
interest rates. However, there can be a lag in maintaining the desired
matching because the repricing of products occurs at varying time intervals.
Susquehanna employs a variety of methods to monitor interest rate
sensitivity and limit net interest income exposure. By dividing the assets and
liabilities into three groups -- fixed rate, floating rate, and those which
reprice only at management's discretion -- strategies are developed which are
designed to minimize exposure to interest rate fluctuations. Management also
utilizes gap analysis to evaluate rate sensitivity at a given point in time.
Table 1 illustrates Susquehanna's estimated interest rate sensitivity
and periodic and cumulative gap positions as calculated at September 30, 1995.
An institution with more assets repricing than liabilities over a given time
frame is considered asset sensitive, and one with more liabilities repricing
than assets is considered liability sensitive. An asset sensitive institution
will generally benefit from rising rates, and a liability sensitive
institution will generally benefit from declining rates. While Susquehanna has
had and will into the foreseeable future experience a negative gap position
(liability sensitive), the impact of a rapid rise in interest rates, as occurred
in 1994, did not have a significant effect on the net interest margin of
Susquehanna, which has consistently remained at or near the 5.0% level.
Capital Resources
-----------------
Capital elements are segmented into two tiers. Tier I capital
represents shareholders' equity reduced by most intangible assets, while total
capital includes certain allowable long-term debt and the general portion of the
allowance for loan and lease losses limited to 1.25% of risk-adjusted assets.
The minimum Tier I capital ratio was set at 4%; Susquehanna's ratio at September
30, 1995 was 11.86%. The total capital ratio (Tier II) minimum ratio is 8%;
Susquehanna's ratio at September 30, 1995 was 15.89%. The minimum leverage
ratio was set at 4%; Susquehanna's leverage ratio at September 30, 1995 was
8.57%.
Impacting reported total equity has been the effect of the adoption of
SFAS 115. The increase in interest rates during 1994 has caused the "unrealized
gains and losses for available-for-sale securities" account in the equity
section to move from a net loss at September 30, 1994 of $4,542,000 to a net
loss at December 31, 1994 of $7,859,000. However, by September 30, 1995, the
net loss declined to $287,000 as interest rates fell during the first nine
months of 1995.
(2) Material Changes in Results of Operations
- --------------------------------------------
Earnings Summary
----------------
Effective January 1, 1995, Susquehanna adopted Statement of Financial
Accounting Standards (SFAS) No. 114, "Accounting by Creditors for Impairment of
a Loan", as amended by SFAS 118. These statements had no effect on
Susquehanna's allowance for loan and lease losses.
On July 11, 1994, Susquehanna completed its acquisition of eight
Allegany County, Maryland, branch locations of First National Bank of Maryland.
At the time of the acquisition, the Allegany County locations had loans of $45.5
million; fixed assets of $2.1 million; deposits of $194.1 million; and total
assets of $194.2 million. The transaction has been accounted for under the
purchase method of accounting. The eight branches were subsequently merged into
Farmers and Merchants Bank and Trust, Hagerstown, Maryland, a wholly-owned
subsidiary of Susquehanna.
On February 9, 1995, Susquehanna issued $50 million 9.00%
subordinated notes due 2005. The proceeds of the issuance were used to acquire
Reisterstown Holdings, Inc. ("RHI") on April 21, 1995, and retire $10 million in
short-term borrowings. The balance of the proceeds will be used for general
corporate purposes.
On April 1, 1995 Susquehanna completed the acquisition of Atlanfed
Bancorp, Inc. ("ABI") issuing 1,199,334 common shares for all of ABI's
outstanding shares. Total assets of ABI at the acquisition date were $255.1
million. Deposits totaled $179.4 million; loans outstanding were $189.1
million; and stockholders' equity was $22.6 million. The
transaction was treated as a pooling-of-interests and Susquehanna's financial
results for all reported periods are restated to include ABI's financial
results.
On April 21, 1995, Susquehanna completed the acquisition of RHI
acquiring all of the assets and assuming all the liabilities of RHI for $28.6
million. Accordingly, the transaction was treated under the purchase method of
accounting whereby all the financial results are included with Susquehanna from
April 21, 1995 forward. The loans acquired totaled $197.9 million, investment
securities were $27.1 million and deposits were $212.1 million. The excess
purchase price of $12.6 million will be amortized over 15 years.
Susquehanna's net income for the quarter ending September 30, 1995
rose to $7,249,000, which is $1,249,000 or 21% more than the third quarter of
1994. Earnings per share increased from $.52 per share in the third quarter of
1994 to $.62 per share in 1995, a 19% increase. The primary reason for the
increase in net income was a $2,780,000 increase in net interest income and a
$990,000 increase in other income offset by a $1,354,000 increase in operating
expenses and a $1,040,000 increase in income taxes.
Net income for the nine months ending September 30, 1995 was
$18,868,000 compared to $16,401,000 for the nine months ending September 30,
1994 or a 15% increase. Net income before extraordinary item for the nine
months ending September 30, 1994 was $17,133,000 compared with $18,868,000 in
1995 or an increase of $1,735,000 or 10%. Earnings per share for the first nine
months before and after extraordinary item increased from $1.47 and $1.41 per
share, respectively, in 1994 to $1.62 per share for both before and after
extraordinary item in 1995. The increase in net income before extraordinary
item for the nine months is due primarily to an increase in net interest income
of $9,566,000 offset by increases in operating expenses, loan loss provision and
income taxes of $6,147,000, $722,000 and $810,000, respectively.
For the nine months ended September 30, 1995, return on average
assets was 1.05% which did not change from the comparable period in 1994 while
return on average equity was 11.22% for the first nine months of 1995 compared
to 10.10% for 1994. Book value per share increased to $20.12 per share at
September 30, 1995 from $18.66 per share at December 31, 1994 and from $18.65
per share at September 30, 1994.
Net Interest Income
-------------------
The major source of operating revenue is net interest income which
increased $9,566,000, 14% over the comparable nine month period in 1994,
$732,000, 3% over the second quarter of 1995, and $2,780,000, 11% over the
third quarter of 1994. The net interest margin was 4.9% for both nine month
periods, was 4.9% for the third quarter of 1994 and declined to 4.8% in the
third quarter of 1995. The acquisition of the Maryland thrifts was the primary
cause for the decline in the margin. Thus, the increase in net interest income
was through the acquisition of additional assets derived from the purchase of
eight Allegany County Maryland offices in July 1994 and the purchase of RHI in
April 1995.
Net interest income is the income which remains after deducting from
total income generated by earning assets the interest expense attributable to
the acquisition of the funds
required to support earning assets. Income from earning assets includes income
from loans, income from investment securities and income from short-term
investments. The amount of interest income is dependent upon many factors
including the volume of earning assets, the general level of interest rates, the
dynamics of the change in interest rates, and levels of non-performing loans.
The cost of funds varies with the amount of funds necessary to support earning
assets, the rates paid to attract and hold deposits, rates paid on borrowed
funds, and the levels of non-interest bearing demand deposits and equity
capital.
Table 2 presents average balances, taxable equivalent interest income
and expenses and yields earned or paid on these assets and liabilities of
Susquehanna. For purposes of calculating taxable equivalent interest income,
tax-exempt interest has been adjusted using a marginal tax rate of 35% in order
to equate the yield to that of taxable interest rates. Table 3 presents changes
in volumes and revenues and expenses between the periods. Net interest income
as a percentage of net interest income and other income was 87% and 85% for
the nine months ended September 30, 1995 and 1994, respectively.
The acquisition of the Allegany offices in July 1994, RHI in April
1995 and the $50 million subordinated debt placement in February 1995 account
for the major portion of the growth in interest-bearing assets and liabilities
when comparing the quarter and year-to-date growth between 1994 and 1995.
Growth in the volumes recorded between the second and third quarters of 1995 was
primarily the result of the RHI acquisition on April 21, 1995.
As illustrated in Table 2, the tax equivalent yield in earning assets
rose to 8.5% in the third quarter of 1995, up from 7.7% in both the three and
nine month periods of 1994. For the nine month period of 1995 the yield was
8.4%. The primary cause for these earning asset yield increases was the
increase in the loan and investment yields to 9.3% and 6.7%, respectively, in
the third quarter of 1995 from 8.6% and 6.1%, respectively, in the third quarter
of 1994.
However, funding costs also rose in 1995. For the third quarter of
1995 the average rate was 4.4% and for the nine month period was 4.3% compared
to 3.4% and 3.3%, respectively, for the comparable periods of 1994. The rise in
the cost of time deposits, primarily certificates of deposit, as well as the
rise in cost of long-term debt were the principal reasons for these increases in
funding costs. Both interest-bearing demand and saving deposit rates remained
relatively constant during these periods.
An additional positive influence on the ability of Susquehanna to
maintain a net interest margin at or near 5.0% has been the increase in non-
interest-bearing demand deposits and earnings retention. While Susquehanna's
interest margin has generally remained at or near the 5.0% level, variances do
occur as an exact repricing match of assets and liabilities is not possible. A
further explanation of the impact of asset and liability repricing is found in
the Liquidity and Interest Rate Sensitivity Section of this discussion.
Other Income
------------
Non-interest income, recorded as other income, consists of service
charges on deposit accounts, commissions, fees received for travelers' check
sales and money orders,
fees for trust services, premium income generated from reinsurance activities,
gains and losses on security transactions, net gains on sales of mortgages, net
gains on sales of other real estate owned and other miscellaneous income, such
as safe deposit box rents. Other income as a percentage of net interest income
and other income was 13% and 15% for the nine months ended September 30, 1995
and 1994, respectively.
Other income increased from $3,714,000 in the third quarter of 1994 to
$4,704,000 in the third quarter of 1995 primarily due to the acquisition of RHI
in April 1995 and the $559,000 gain on sale of student loans in September 1995.
Other income for the first nine months decreased from $11,894,000 in 1994 to
$11,742,000 in 1995 primarily due to net investment security gains of $999,000
in 1994 as compared to net losses of $46,000 in 1995 offset by the factors noted
above.
Other Expenses
--------------
Non-interest expenses are categorized into five main groupings:
employee-related expenses, which include salaries, fringe benefits, and
employment taxes; occupancy expenses, which include depreciation, rents,
maintenance, utilities, and insurance; equipment expenses, which include
depreciation, rents and maintenance; Federal Deposit Insurance Corporation's
insurance premiums on deposits; and other expenses incurred in operating
Susquehanna's business.
Other expenses increased $1,354,000 from $18,864,000 in the third
quarter of 1994 to $20,218,000 in the third quarter of 1995. This increase was
primarily due to salaries and employee benefits, an increase of $1,266,000, and
other operating expenses, an increase of $785,000 offset by a decline in FDIC
insurance premiums of $843,000. Significantly affecting these increases and the
decline were the purchase of RHI in April 1995 and the Bank Insurance Fund (BIF)
refund of $980,000 received by Susquehanna affiliate banks in September 1995.
Other expenses for the first nine months increased $6,147,000 from $53,402,000
in 1994 to $59,549,000 in 1995. This increase was primarily due to salaries and
employee benefits, an increase of $4,254,000 and other operating expenses, an
increase of $2,028,000 offset by a decline in FDIC insurance premiums of
$530,000. Once again, these increases and the decline were significantly
affected by the purchases of RHI in April 1995 and the Allegany branch offices
in July 1994 and by the BIF refund in September 1995.
Income Taxes
------------
Susquehanna's effective tax rate for the first nine months of 1995
remained unchanged from that of the comparable period in 1994.
Risk Assets
-----------
Table 4 shows an increase in non-performing assets at September 30,
1995 compared to December 31 and September 30, 1994. However, non-performing
assets have decreased by $2,160,000 or 5% from June 30, 1995. Most of this
decrease ($1,660,000) was from a reduction in non-accrual loans. The increase
in non-performing assets from December 31, 1994 was primarily the result of one
hotel loan that previously was reported
in the past due 90-day category, and the inclusion of non-performing assets
acquired through the RHI acquisition in April 1995.
Provision and Allowance for Loan and Lease Losses
-------------------------------------------------
As illustrated in Table 5, the provision was increased by $722,000
(when compared to the nine months ended September 30, 1994) to $3,711,000 in
1995 which primarily resulted from the rapid deterioration of one borrower.
Net charge-offs, also impacted by this credit, rose to $2,923,000, up from
$1,592,000. The allowance at September 30, 1995 was $27,948,000, up from
$23,114,000 at September 30, 1994, and included the allowance of $3,323,000
acquired in the acquisition of RHI. The allowance was 1.65% of period end loans
and leases at September 30, 1995 as compared to 1.61% at September 30, 1994.
Susquehanna Bancshares, Inc. and Subsidiaries
TABLE - 1 INTEREST RATE SENSITIVITY
- --------------------------------------------------------------------------------
At September 30, 1995 1-90 90-180 180-365 1 year
(Dollars in thousands) days days days or more TOTAL
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS:
Short-term investments $70,068 $70,068
Investment securities 50,979 25,632 73,920 441,950 592,481
Loans and leases, net of unearned income* 607,968 103,849 212,510 742,247 1,666,574
- ------------------------------------------------------------------------------------------------------------------------------------
Total $729,015 $129,481 $286,430 $1,184,197 $2,329,123
====================================================================================================================================
LIABILITIES:
Deposits:
Interest-bearing demand $471,909 $471,909
Savings 388,331 388,331
Time 157,085 147,712 210,909 367,090 882,796
Time in denominations of $100 or more 40,208 13,378 17,503 18,725 89,814
Short-term borrowings 47,979 2,287 26,000 76,266
Long-term debt 5,500 4,000 82,479 91,979
- ------------------------------------------------------------------------------------------------------------------------------------
Total $1,111,012 $163,377 $258,412 $468,294 $2,001,095
====================================================================================================================================
* Does not include nonaccruing loans and leases.
Interest sensitivity gap:
Periodic ($381,997) ($33,896) $28,018 $715,903
Cumulative (415,893) (387,875) 328,028
Cumulative gap as a percentage of earning assets: -16.4% -17.9% -16.7% 14.1%
Susquehanna Bancshares, Inc. and Subsidiaries
TABLE 2 - DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY
INTEREST RATES AND INTEREST DIFFERENTIAL - TAX EQUIVALENT BASIS
- --------------------------------------------------------------------------------
For the Three Month Period Ended For the Three Month Period Ended
(Dollars in thousands) September 30, 1995 September 30, 1994
- ---------------------- ----------------------------------- ------------------------------------
ASSETS Average Average
Balance Interest Rate (%) Balance Interest Rate (%)
------- -------- -------- ------- -------- --------
Short-term investments $49,635 $672 5.4 $57,648 $623 4.3
Investment securities:
Taxable 480,881 8,043 6.6 480,300 7,023 5.8
Tax-advantaged 110,504 1,884 6.8 120,769 2,166 7.1
----------- -------- ----------- --------
Total investment securities 591,385 9,927 6.7 601,069 9,189 6.1
----------- -------- ----------- --------
Loans and leases, net:
Taxable 1,675,498 39,143 9.3 1,379,224 29,760 8.6
Tax-advantaged 37,798 905 9.5 38,690 989 10.1
----------- -------- ----------- --------
Total loans and leases, net 1,713,296 40,048 9.3 1,417,914 30,749 8.6
----------- -------- ----------- --------
Total Interest Earning Assets 2,354,316 $50,647 8.5 2,076,631 $40,561 7.7
======== ========
Allowance for loan and lease losses (28,114) (23,416)
Other non-earning assets 188,393 158,542
----------- -----------
Total assets $2,514,595 $2,211,757
=========== ===========
LIABILITIES & EQUITY
Deposits:
Interest-bearing demand $481,240 $3,272 2.7 $481,040 $2,806 2.3
Savings 393,865 2,595 2.6 420,975 2,785 2.6
Time 963,793 13,615 5.6 718,351 7,741 4.3
Short-term borrowings 68,572 937 5.4 61,002 773 5.0
Long-term debt 91,897 1,885 8.1 50,384 765 6.0
----------- -------- ----------- --------
Total interest-bearing liabilities 1,999,367 $22,304 4.4 1,731,752 $14,870 3.4
-------- --------
Demand deposits 256,382 242,270
Other liabilities 27,958 19,297
----------- -----------
Total liabilities $2,283,707 $1,993,319
Stockholders' equity 230,888 218,438
----------- -----------
Total liabilities and equity $2,514,595 $2,211,757
=========== ===========
Net interest income / yield on $28,343 4.8 $25,691 4.9
average earning assets ======== ========
For the Nine Month Period Ended For the Nine Month Period Ended
(Dollars in thousands) September 30, 1995 September 30, 1994
- ---------------------- -------------------------------------- ------------------------------------
ASSETS Average Average
Balance Interest Rate (%) Balance Interest Rate (%)
------- -------- -------- ------- -------- --------
Short-term investments $47,064 $2,061 5.9 $45,217 $1,345 4.0
Investment securities:
Taxable 473,792 21,638 6.1 446,002 19,260 5.8
Tax-advantaged 114,484 6,041 7.1 108,380 5,806 7.2
----------- --------- ----------- --------
Total investment securities 588,276 27,679 6.3 554,382 25,066 6.0
----------- --------- ----------- --------
Loans and leases, net:
Taxable 1,575,440 109,583 9.3 1,321,045 83,490 8.4
Tax-advantaged 39,435 2,741 9.3 39,318 2,943 10.0
----------- --------- ----------- --------
Total loans and leases, net 1,614,875 112,324 9.3 1,360,363 86,433 8.5
----------- --------- ----------- --------
Total Interest Earning Assets 2,250,215 $142,064 8.4 1,959,962 $112,844 7.7
========= =========
Allowance for loan and lease losses (26,306) (22,792)
Other non-earning assets 175,661 152,349
----------- -----------
Total assets $2,399,570 $2,089,519
=========== ===========
LIABILITIES & EQUITY
Deposits:
Interest-bearing demand $472,886 $9,703 2.7 $459,873 $8,011 2.3
Savings 394,048 7,610 2.6 399,118 7,525 2.5
Time 876,974 35,109 5.4 681,207 21,653 4.2
Short-term borrowings 62,473 2,620 5.6 47,617 1,594 4.5
Long-term debt 89,605 5,385 8.0 42,398 2,002 6.3
----------- --------- ----------- ---------
Total interest-bearing liabilities 1,895,986 $60,427 4.3 1,630,213 $40,785 3.3
--------- ---------
Demand deposits 248,906 222,162
Other liabilities 29,907 20,117
----------- -----------
Total liabilities $2,174,799 $1,872,492
Stockholders' equity 224,771 217,027
----------- -----------
Total liabilities and equity $2,399,570 $2,089,519
=========== ===========
Net interest income / yield on $81,637 4.9 $72,059 4.9
average earning assets ======== ========
For purposes of calculating loan yields, the average loan volume includes
non-accrual loans. For purposes of calculating yields on tax-advantaged
interest income, the taxable equivalent adjustment is to equate tax-advantaged
interest on the same basis as taxable interest. The marginal tax rate is 35%.
Susquehanna Bancshares, Inc. and Subsidiaries
TABLE 3 - STATEMENTS OF CHANGES IN INCOME AND EXPENSES
- --------------------------------------------------------------------------------
Three months ended Nine months ended
September 30, 1995 compared September 30, 1995 compared
(Dollars in thousands) to September 30, 1994 to September 30, 1994
------------------------------------------------------------------------------------
Average Volumes Income / Expense Average Volumes Income / Expense
------------------- ------------------ ------------------- --------------------
$ % $ % $ % $ %
ASSETS:
Loans and leases, net 295,382 20.8 9,329 30.7 254,512 18.7 25,962 30.4
Investment securities (9,684) (1.6) 836 9.9 33,894 6.1 2,530 11.0
Short-term investments (8,013) (13.9) 49 7.9 1,847 4.1 716 53.2
------------------- ------------------ ------------------- --------------------
Total 277,685 13.4 10,214 25.9 290,253 14.8 29,208 26.6
================== ------------------ =================== --------------------
LIABILITIES:
Interest-bearing demand 200 0.0 466 16.6 13,013 2.8 1,692 22.5
Savings (27,110) (6.4) (190) (6.8) (5,070) (1.3) 85 1.1
Time 245,442 34.2 5,874 75.9 195,767 28.7 13,456 62.1
Short-term borrowings 7,570 12.4 164 21.2 14,856 31.2 1,026 64.4
Long-term debt 41,513 82.4 1,120 146.4 47,207 111.3 3,383 169.0
------------------ ------------------ ------------------- --------------------
Total 267,615 15.5 7,434 50.0 265,773 16.3 19,642 48.2
================== ------------------ =================== --------------------
Net interest income 2,780 11.3 9,566 13.9
Provision for loan and lease losses 127 12.5 722 24.2
------------------ --------------------
Net interest income after
provision for loan and lease losses 2,653 11.3 8,844 13.4
Investment security gains/(losses) 30 n/m (1,045) (104.6)
Other operating income 960 25.8 893 8.2
------------------ --------------------
Income before operating expenses 3,643 13.3 8,692 11.2
Salaries and employee benefits 1,266 13.2 4,254 15.7
Net occupancy and equipment 146 6.4 395 5.8
Other operating expenses (58) (0.8) 1,498 7.6
------------------ --------------------
Total operating expenses 1,354 7.2 6,147 11.5
------------------ --------------------
Income before income taxes, extraordinary
item 2,289 27.2 2,545 10.4
Provision for income taxes 1,040 42.9 810 11.0
------------------ --------------------
Income before extraordinary item 1,249 20.8 1,735 10.1
Extraordinary item -- -- 732 100.0
------------------ --------------------
Net income 1,249 20.8 2,467 15.0
================== ====================
Three months ended
September 30, 1995 compared
(Dollars iIn thousands) to June 30, 1995
----------------------------------------------
Average Volumes Income / Expense
-------------------- --------------------
$ % $ %
ASSETS:
Loans and leases, net 57,039 3.4 729 1.9
Investment securities 4,879 0.8 1,391 17.7
Short-term investments (3,196) (6.0) (100) (13.0)
-------------------- --------------------
Total 58,722 2.6 2,020 4.2
==================== --------------------
LIABILITIES:
Interest-bearing demand 3,250 0.7 (51) (1.5)
Savings (7,443) (1.9) 37 1.4
Time 56,075 6.2 1,297 10.5
Short-term borrowings 13,736 25.0 168 21.8
Long-term debt (6,020) (6.1) (163) (8.0)
-------------------- --------------------
Total 59,598 3.1 1,288 6.1
==================== --------------------
Net interest income 732 2.7
Provision for loan and lease losses 69 6.4
--------------------
Net interest income after
provision for loan and lease losses 663 2.6
Investment security gains/(losses) 12 80.0
Other operating income 908 24.1
--------------------
Income before operating expenses 1,583 5.4
Salaries and employee benefits 406 3.9
Net occupancy and equipment 13 0.5
Other operating expenses (353) (4.8)
--------------------
Total operating expenses 66 0.3
--------------------
Income before income taxes, extraordinary
item 1,517 16.5
Provision for income taxes 668 23.9
--------------------
Income before extraordinary item 849 13.3
Extraordinary item -- --
--------------------
Net income 849 13.3
====================
Susquehanna Bancshares, Inc. and Subsidiaries
TABLE 4- RISK ASSETS
- --------------------------------------------------------------------------------
September30, December 31, September30,
(Dollars in thousands) 1995 1994 1994
- ----------------------------------------------------------------------------------------------------------------
Nonperforming assets:
Nonaccrual loans and leases $26,216 $17,215 $18,462
Restructured accrual loans 6,760 6,941 6,976
Other real estate owned 6,022 5,341 7,838
- ----------------------------------------------------------------------------------------------------------------
Total nonperforming assets $38,998 $29,497 $33,276
================================================================================================================
As a percent of period-end loans and leases and
other real estate owned 2.30% 2.00% 2.31%
Loans and leases contractually
past due 90 days and still accruing $4,402 $14,450 $7,387
TABLE 5 - ALLOWANCE FOR LOAN AND LEASE LOSSES
- --------------------------------------------------------------------------------
Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in thousands) 1995 1994 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
Balance - Beginning of period $27,779 $23,166 $23,845 $21,717
Allowance acquired in business combination - - 3,323 -
Change in fiscal year - - (8) -
Additions charged to operating expenses 1,140 1,013 3,711 2,989
- ------------------------------------------------------------------------------------------------------------------------------------
28,919 24,179 30,871 24,706
- ------------------------------------------------------------------------------------------------------------------------------------
Charge-offs (1,281) (1,244) (3,694) (2,387)
Recoveries 310 179 771 795
- ------------------------------------------------------------------------------------------------------------------------------------
Net charge-offs (971) (1,065) (2,923) (1,592)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance - Period end $27,948 $23,114 $27,948 $23,114
====================================================================================================================================
Net charge-offs as a percent of average loans and leases(annualized) 0.22% 0.30% 0.24% 0.16%
Allowance as a percent of period-end loans and leases 1.65% 1.61% 1.65% 1.61%
Average loans and leases $1,713,296 $1,417,914 $1,614,875 $1,360,363
Period-end loans and leases 1,692,790 1,435,731 1,692,790 1,435,731
PART II. OTHER INFORMATION
-----------------
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
Registrant was not required to file any Reports on Form 8-K for the
period ended September 30, 1995.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SUSQUEHANNA BANCSHARES, INC.
November 8, 1995 /s/ Robert S. Bolinger
-----------------------------------
Robert S. Bolinger
President and Chief Executive Officer
November 8, 1995 /s/ J. Stanley Mull, Jr.
------------------------------------
J. Stanley Mull, Jr., Vice President
Treasurer, and Principal Financial
Officer