Exhibit 99.1
Susquehanna Bancshares, Inc. Announces Second Quarter Results; Growth
Continues Along With Strong Asset Quality; Patriot Bank Corp.
Acquisition Strengthens Company
LITITZ, Pa.--(BUSINESS WIRE)--July 27, 2004--Susquehanna
Bancshares, Inc., (Susquehanna) (Nasdaq:SUSQ) today announced net
income for the second quarter of 2004 was $16.5 million, or $0.40 per
diluted share, compared to the $16.3 million, or $0.41 per diluted
share for the second quarter of 2003. Earnings were in line with the
Company's forecasted range.
Second Quarter Financial Highlights:
-- Total deposits grew 28%, rising to $5.1 billion from $4.0
billion in the second quarter of 2003 - excluding Patriot Bank
Corp., which was acquired on June 10, 2004, this increase was
12%.
-- Demand deposits increased 20% to $832 million from $691
million in the second quarter 2003 - excluding Patriot
this increase was 10%.
-- Net loans and leases grew 28%, rising to $5.0 billion from
$3.9 billion in the second quarter of 2003 - excluding Patriot
this increase was 11%.
-- Total assets grew 26%, rising to $7.3 billion from $5.8
billion in the second quarter of 2003 -- excluding Patriot
this increase was 6%.
-- Credit quality remains strong, highlighted by:
-- The net charge-offs to average loans (NCO/Average loans &
leases) ratio improved to 0.13% for the second quarter of
2004 from 0.22% in the second quarter of 2003.
-- The nonperforming assets to total loans, leases and OREO
(NPA/Loans & leases & OREO) ratio improved to 0.40% for
the second quarter 2004 from 0.72% in the second quarter
of 2003.
-- Non-interest income increased 10% over the second quarter
results reported for June 30, 2003, rising to $27.4 million.
For the quarter ended June 30, 2004, non-interest income grew
to 36% of total revenue. Excluding Patriot, non-interest
income increased by 7%.
-- Total assets under management and under administration were
$4.9 billion at June 30, 2004, up from $3.5 billion at June
30, 2003, representing 41% growth -- excluding Patriot this
increase was 28%.
Linked Quarter Highlights (Second Quarter 2004 vs. First Quarter
2004):
-- Net loans and leases increased 17.9% from $4.2 billion to $5.0
billion -- excluding Patriot this increase was 2.5%.
-- Deposits increased 17.3% to $5.1 billion -- excluding Patriot
this increase was 2.4%.
-- Demand deposits increased 15.8% to $832 million from $719
million in the first quarter 2004 - excluding Patriot this
increase was 6.0%.
-- Asset Quality remained strong in a number of areas:
-- NCO/Average loans & leases ratio continued to be very
strong at 0.13% for both the first and second quarters of
2004.
-- NPA/Loans & leases & OREO ratio improved to 0.40% from
0.46% at March 31, 2004.
Return on average assets and equity for the second quarter of 2004
finished at 1.04% and 11.28%, respectively.
Equity capital was $720 million at June 30, 2004, or $15.51 per
share, compared to $546 million at June 30, 2003, or $13.73 per share.
As a result of our net interest margin for the first half of 2004
being 10 basis points less than originally forecasted, we are
anticipating that 2004 earnings will be at the lower end of our range,
which was $1.64 to $1.72.
"Susquehanna was very active in the second quarter," said
Susquehanna Chairman, President and CEO William J. Reuter. "After many
months of hard work, we finalized the Patriot acquisition on June 10
and immediately increased our presence in the Greater Delaware Valley.
The legal and operational closing elements were performed in a
coordinated fashion so as to position Susquehanna to be able to
realize merger-related efficiencies as quickly as possible. We are
confident that these efficiencies coupled with our strategic
profitability initiatives and asset sensitivity will continue to
strengthen Susquehanna's long-term financial position."
Reuter added, "Patriot's contributions to our financials have been
meaningful and have complemented the organic performance we saw in the
second quarter, which was largely consistent with recent quarters'
reports. We also are pleased that Patriot adds to Susquehanna's long
tradition of strong asset quality."
Additional Highlights:
-- Susquehanna held its annual shareholders meeting on June 10,
during which six directors were re-elected and E. Susan
Piersol was elected for the first time. Additionally, two
directors from Patriot were appointed to Susquehanna's board
of directors: James A. Bentley, Jr. and Russell J. Kunkel.
-- Concurrent with the merger closing, Susquehanna merged Patriot
Bank into Equity Bank, a Susquehanna wholly owned subsidiary,
creating Susquehanna Patriot Bank. The combined $2.1 billion
bank is headquartered in Marlton, N.J. and operates 36 banking
centers in eastern Pa. and southern N.J.
-- Susquehanna was named a 2004 Dividend Achiever by Mergent,
Inc. This recognition highlights public companies that have
increased their regular cash dividends for at least 10
consecutive calendar years. Just 2.5 percent of all U.S.
companies that pay dividends made the list. This is
Susquehanna's fifth consecutive year receiving this
acknowledgement.
Susquehanna will broadcast its second quarter results conference
call over the Internet on July 28, 2004, at 11:00 a.m. Eastern time.
Investors will have the opportunity to listen to the conference call
through a live broadcast on Susquehanna's Web site, located at
www.susqbanc.com. To listen to the live call, please go to the
Investor Relations section of Susquehanna's Web site at least fifteen
minutes early to download and install any necessary audio software.
For those who cannot listen to the live broadcast, a replay will be
available shortly after the call.
Susquehanna is a financial holding company, operating in multiple
states, with assets of $7.3 billion. It provides financial services
through its subsidiaries at over 175 locations in the mid-Atlantic
region. In addition to eight commercial banks, Susquehanna operates a
trust and investment company, an asset management company, a property
and casualty insurance brokerage company, a commercial leasing company
and a vehicle leasing company. Investor information may be requested
on Susquehanna's Web site at www.susqbanc.com.
This press release contains "forward-looking" statements as
defined in the Private Securities Litigation Reform Act of 1995 that
are based on Susquehanna's current expectations, estimates and
projections about future events and financial trends affecting the
financial condition of its business. These statements are not
historical facts or guarantees of future performance, events or
results. Such statements involve potential risks and uncertainties.
Accordingly, actual results may differ materially. Susquehanna
undertakes no obligation to publicly update or revise any forward
looking statements, whether as a result of new information, future
events or otherwise.
SUMMARY FINANCIAL INFORMATION
(Dollars in thousands, except per share data)
Six Months
-----------------------
2Q04 2Q03 2004 2003
----------- ----------- ----------- -----------
Balance Sheet (EOP)
Investments $1,393,409 $1,248,011 $1,393,409 $1,248,011
Loans and leases 4,986,507 3,898,938 4,986,507 3,898,938
Allowance for loan &
lease losses (ALLL) 52,811 40,329 52,811 40,329
Total assets 7,309,820 5,789,330 7,309,820 5,789,330
Deposits 5,098,931 3,978,476 5,098,931 3,978,476
Short-term borrowings 409,576 346,864 409,576 346,864
FHLB borrowings 685,525 598,160 685,525 598,160
Long-term debt 228,515 145,000 228,515 145,000
Shareholders' equity 719,966 545,869 719,966 545,869
Stated Book Value per
Share 15.51 13.73 15.51 13.73
Tangible Book Value
per Share 10.06 12.23 10.06 12.23
Average Balance Sheet
Investments 1,182,321 1,245,332 1,073,384 1,194,891
Loans and leases 4,437,472 3,849,384 4,347,333 3,826,944
Total earning assets 5,699,878 5,166,863 5,506,065 5,087,997
Total assets 6,370,826 5,679,792 6,144,799 5,600,424
Deposits 4,537,791 3,905,651 4,384,887 3,873,066
Short-term borrowings 324,325 336,421 305,798 308,547
FHLB borrowings 555,494 591,902 551,142 570,396
Long-term debt 184,061 145,000 157,031 151,381
Shareholders' equity 588,072 538,952 569,299 536,994
Income Statement
Net interest income 49,354 47,019 96,036 94,298
Loan & lease loss
provision 2,107 2,175 3,807 4,880
Noninterest income 27,354 24,922 54,428 50,415
Noninterest expense 51,361 46,460 100,665 93,236
Income before taxes 23,240 23,306 45,992 46,597
Income taxes 6,742 6,992 13,568 14,212
Net income 16,498 16,314 32,424 32,385
Basic earnings per
share 0.40 0.41 0.80 0.82
Diluted earnings per
share 0.40 0.41 0.79 0.81
Cash dividends paid
per share 0.22 0.21 0.44 0.42
Asset Quality
Net charge-offs (NCO) $1,390 $2,127 $2,816 $4,222
Nonaccrual loans &
leases 18,974 20,078 18,974 20,078
Restructured loans 0 6,260 0 6,260
OREO 1,192 1,925 1,192 1,925
Total nonperforming
assets (NPA) 20,166 28,263 20,166 28,263
Loans & leases 90 days
past due 8,550 7,036 8,550 7,036
2Q04 2Q03 2004 2003
----------- ----------- ----------- -----------
RATIO ANALYSIS
Credit Quality
NCO / Average loans &
leases 0.13% 0.22% 0.13% 0.22%
NPA / Loans & leases &
OREO 0.40% 0.72% 0.40% 0.72%
ALLL / Nonperforming
loans & leases 278.33% 153.12% 278.33% 153.12%
ALLL / Total loans &
leases 1.06% 1.03% 1.06% 1.03%
Capital Adequacy
Equity / Assets 9.85% 9.43% 9.85% 9.43%
Long-term debt /
Equity 31.74% 26.56% 31.74% 26.56%
Profitability
Return on average
assets 1.04% 1.15% 1.06% 1.17%
Return on average
equity 11.28% 12.14% 11.45% 12.16%
Net interest margin 3.52% 3.69% 3.55% 3.78%
CONSOLIDATED BALANCE SHEETS
June 30, December 31, June 30,
2004 2003 2003
- ----------------------------------------------------------------------
(in thousands, except share data)
Assets
Cash and due from banks $167,048 $176,240 $194,550
Short-term investments:
Restricted 27,986 44,817 51,926
Unrestricted 36,280 34,145 30,359
- ----------------------------------------------------------------------
Total short-term investments 64,266 78,962 82,285
- ----------------------------------------------------------------------
Securities available for sale 1,388,653 983,882 1,244,577
Securities held to maturity, at
amortized cost (fair values
approximate $4,756, $4,340, and
$3,434) 4,756 4,340 3,434
Loans and leases, net of unearned
income 4,986,507 4,263,272 3,898,938
Less: Allowance for loan and
lease losses 52,811 42,672 40,329
- ----------------------------------------------------------------------
Net loans and leases 4,933,696 4,220,600 3,858,609
- ----------------------------------------------------------------------
Premises and equipment, net 77,448 62,961 60,067
Foreclosed assets 1,192 2,893 1,925
Accrued income receivable 20,751 17,494 18,510
Bank-owned life insurance 221,844 200,555 127,815
Goodwill 239,882 59,123 54,897
Intangible assets with finite lives 13,053 4,372 4,685
Other assets 177,231 141,685 137,976
- ----------------------------------------------------------------------
$7,309,820 $5,953,107 $5,789,330
- ----------------------------------------------------------------------
Liabilities and Shareholders' Equity
Deposits:
Demand $832,227 $724,474 $691,200
Interest-bearing demand 1,835,254 1,295,593 1,187,906
Savings 598,866 508,889 500,273
Time 1,385,048 1,251,058 1,262,671
Time of $100 or more 447,536 354,453 336,426
- ----------------------------------------------------------------------
Total deposits 5,098,931 4,134,467 3,978,476
Short-term borrowings 409,576 355,553 346,864
FHLB borrowings 685,525 613,850 598,160
Long-term debt 205,000 130,000 145,000
Junior subordinated debentures 23,515 0 0
Accrued interest, taxes, and expenses
payable 50,712 35,791 32,217
Deferred taxes 88,643 104,281 99,012
Other liabilities 27,952 31,783 43,732
- ----------------------------------------------------------------------
Total liabilities 6,589,854 5,405,725 5,243,461
- ----------------------------------------------------------------------
Shareholders' equity:
Common stock, $2.00 par value,
100,000,000 shares authorized;
Issued: 46,426,114 at June 30,
2004, 39,861,317 at December
31, 2003, and 39,757,469 at
June 30, 2003 92,852 79,723 79,515
Additional paid-in capital 223,719 66,264 64,578
Retained earnings 418,329 403,450 390,972
Accumulated other comprehensive
income (loss), net of taxes of
($8,041), ($1,107), and $5,860 (14,934) (2,055) 10,804
- ----------------------------------------------------------------------
Total shareholders' equity 719,966 547,382 545,869
- ----------------------------------------------------------------------
$7,309,820 $5,953,107 $5,789,330
- ----------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Six Months Ended
June 30, June 30,
- --------------------------------------------------- ------------------
(Dollars in thousands, except per
share data) 2004 2003 2004 2003
- --------------------------------------------------- ------------------
Interest Income:
Loans and leases, including
fees $63,401 $60,942 $124,536 $122,835
Securities:
Taxable 9,699 10,524 17,412 21,853
Tax-exempt 300 372 560 835
Dividends 608 309 890 649
Short-term investments 186 198 383 362
- --------------------------------------------------- ------------------
Total interest income 74,194 72,345 143,781 146,534
- --------------------------------------------------- ------------------
Interest Expense:
Deposits:
Interest-bearing demand 3,705 2,466 6,360 5,143
Savings 446 599 832 1,209
Time 11,608 13,133 23,423 27,098
Short-term borrowings 829 930 1,418 1,768
FHLB borrowings 5,188 5,598 10,308 11,636
Long-term debt 3,064 2,600 5,404 5,382
- --------------------------------------------------- ------------------
Total interest expense 24,840 25,326 47,745 52,236
- --------------------------------------------------- ------------------
Net interest income 49,354 47,019 96,036 94,298
Provision for loan and lease
losses 2,107 2,175 3,807 4,880
- --------------------------------------------------- ------------------
Net interest income, after
provision for loan and lease
losses 47,247 44,844 92,229 89,418
- --------------------------------------------------- ------------------
Noninterest Income:
Service charges on deposit
accounts 5,434 4,825 10,315 9,290
Vehicle origination and
servicing fees 5,488 7,567 10,681 14,570
Asset management fees 3,436 2,514 6,694 4,800
Income from fiduciary-related
activities 1,357 1,427 2,826 2,949
Commissions on brokerage, life
insurance and annuity sales 1,140 541 2,056 776
Commissions on property and
casualty insurance sales 2,169 1,852 4,589 4,232
Income from bank-owned life
insurance 2,252 1,433 4,264 3,075
Net gain on sale of loans and
leases 2,978 2,402 6,648 4,939
Net gain on securities 5 94 569 184
Other 3,095 2,267 5,786 5,600
- --------------------------------------------------- ------------------
Total noninterest income 27,354 24,922 54,428 50,415
- --------------------------------------------------- ------------------
Noninterest Expenses:
Salaries and employee benefits 25,689 22,349 49,796 44,703
Occupancy 3,599 3,379 7,384 6,900
Furniture and equipment 2,193 2,269 4,287 4,469
Amortization of intangible
assets 223 157 380 313
Vehicle residual value 1,179 1,657 2,390 3,075
Vehicle delivery and
preparation 3,302 2,691 6,695 5,585
Other 15,176 13,958 29,733 28,191
- --------------------------------------------------- ------------------
Total noninterest expenses 51,361 46,460 100,665 93,236
- --------------------------------------------------- ------------------
Income before income taxes 23,240 23,306 45,992 46,597
Provision for income taxes 6,742 6,992 13,568 14,212
- --------------------------------------------------- ------------------
Net Income $16,498 $16,314 $32,424 $32,385
- --------------------------------------------------- ------------------
Earnings per share:
Basic $0.40 $0.41 $0.80 $0.82
Diluted $0.40 $0.41 $0.79 $0.81
Cash dividends $0.22 $0.21 $0.44 $0.42
Average shares outstanding:
Basic 41,401 39,689 40,633 39,673
Diluted 41,675 39,952 40,938 39,927
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY
Interest rates and interest differential-taxable equivalent basis
- ----------------------------------------------------------------------
For the Three Month Period For the Three Month Period
Ended Ended
June 30, 2004 June 30, 2003
- ------------------------------------------- --------------------------
(Dollars in Average Rate Average Rate
thousands) Balance Interest (%) Balance Interest (%)
- ----------------------------------------------------------------------
Assets
Short-term
investments $80,085 $186 0.93 $72,147 $198 1.10
Investment
securities:
Taxable 1,157,973 10,307 3.58 1,213,515 10,833 3.58
Tax-advantaged 24,348 462 7.62 31,817 572 7.21
- ----------------------------------------------------------------------
Total
investment
securities 1,182,321 10,769 3.66 1,245,332 11,405 3.67
- ----------------------------------------------------------------------
Loans and
leases, (net):
Taxable 4,365,376 62,659 5.77 3,794,545 60,311 6.38
Tax-advantaged 72,096 1,143 6.38 54,839 971 7.10
- ----------------------------------------------------------------------
Total loans and
leases 4,437,472 63,802 5.78 3,849,384 61,282 6.39
- ----------------------------------------------------------------------
Total interest-
earning assets 5,699,878 $74,757 5.28 5,166,863 $72,885 5.66
-------- ----- -------- -----
Allowance for
loan and lease
losses (45,668) (40,533)
Other non-
earning assets 716,616 553,462
- ---------------------------- -----------
Total
assets $6,370,826 $5,679,792
- ---------------------------- -----------
Liabilities
Deposits:
Interest-
bearing
demand $1,578,856 $3,704 0.94 $1,168,672 $2,466 0.85
Savings 537,615 446 0.33 497,769 599 0.48
Time 1,668,884 11,608 2.80 1,608,768 13,133 3.27
Short-term
borrowings 324,325 829 1.03 336,421 930 1.11
FHLB borrowings 555,494 5,188 3.76 591,902 5,598 3.79
Long-term debt 184,061 3,064 6.70 145,000 2,600 7.19
- ----------------------------------------------------------------------
Total interest-
bearing
liabilities 4,849,235 $24,839 2.06 4,348,532 $25,326 2.34
-------- ----- -------- -----
Demand deposits 752,436 630,442
Other
liabilities 181,083 161,866
- ---------------------------- -----------
Total
liabilities 5,782,754 5,140,840
- ---------------------------- -----------
Equity 588,072 538,952
- ---------------------------- -----------
Total
liabilities &
shareholders'
equity $6,370,826 $5,679,792
- ---------------------------- -----------
Net interest
income / yield
on average
earning assets $49,918 3.52 $47,559 3.69
-------- ----- -------- -----
1. Average loan balances include non accrual loans.
2. Tax-exempt income has been adjusted to a tax-equivalent basis
using a marginal tax rate of 35%.
3. 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.
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY
(continued)
Interest rates and interest differential-taxable equivalent basis
- ----------------------------------------------------------------------
For the Six Month Period For the Six Month Period
Ended Ended
June 30, 2004 June 30, 2003
- ------------------------------------------ --------------------------
(Dollars in Average Rate Average Rate
thousands) Balance Interest (%) Balance Interest (%)
- ----------------------------------------------------------------------
Assets
Short-term
investments $85,348 $383 0.90 $66,162 $362 1.10
Investment
securities:
Taxable 1,050,894 18,302 3.50 1,158,743 22,502 3.92
Tax-advantaged 22,490 862 7.70 36,148 1,284 7.16
- ----------------------------------------------------------------------
Total investment
securities 1,073,384 19,164 3.59 1,194,891 23,786 4.01
- ----------------------------------------------------------------------
Loans and leases,
(net):
Taxable 4,277,420 123,101 5.79 3,772,063 121,448 6.49
Tax-advantaged 69,913 2,208 6.35 54,881 2,134 7.84
- ----------------------------------------------------------------------
Total loans and
leases 4,347,333 125,309 5.80 3,826,944 123,582 6.51
- ----------------------------------------------------------------------
Total interest-
earning assets 5,506,065 $144,855 5.29 5,087,997 $147,730 5.86
--------- ----- --------- -----
Allowance for loan
and lease losses (44,504) (40,286)
Other non-earning
assets 683,238 552,713
- ----------------------------- -----------
Total
assets $6,144,799 $5,600,424
- ----------------------------- -----------
Liabilities
Deposits:
Interest-
bearing demand $1,471,887 $6,360 0.87 $1,162,802 $5,143 0.89
Savings 525,426 832 0.32 489,107 1,208 0.50
Time 1,660,225 23,422 2.84 1,610,680 27,098 3.39
Short-term
borrowings 305,798 1,418 0.93 308,547 1,768 1.16
FHLB borrowings 551,142 10,309 3.76 570,396 11,636 4.11
Long-term debt 157,031 5,404 6.92 151,381 5,382 7.17
- ----------------------------------------------------------------------
Total interest-
bearing
liabilities 4,671,509 $47,745 2.06 4,292,913 $52,235 2.45
--------- ----- --------- -----
Demand deposits 727,349 610,477
Other liabilities 176,642 160,040
- ----------------------------- -----------
Total
liabilities 5,575,500 5,063,430
- ----------------------------- -----------
Equity 569,299 536,994
- ----------------------------- -----------
Total liabilities
& shareholders'
equity $6,144,799 $5,600,424
- ----------------------------- -----------
Net interest
income / yield
on average
earning assets $97,110 3.55 $95,495 3.78
1. Average loan balances include non accrual loans.
2. Tax-exempt income has been adjusted to a tax-equivalent basis using
a marginal tax rate of 35%.
3. 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.
LOANS AND LEASES
- ----------------------------------------------------------------------
Loans and leases, net of unearned income were as follows:
- ----------------------------------------------------------------------
June 30, Dec. 31, June 30,
(in thousands) 2004 2003 2003
- ----------------------------------------------------------------------
Commercial, financial, and
agricultural $702,893 $621,438 $554,965
Real estate - construction 616,341 549,672 472,685
Real estate secured - residential 1,598,373 1,306,371 1,231,315
Real estate secured - commercial 1,207,101 1,016,360 987,194
Consumer 347,939 337,989 335,925
Leases 513,860 431,442 316,854
- ----------------------------------------------------------------------
Total loans and leases $4,986,507 $4,263,272 $3,898,938
- ----------------------------------------------------------------------
CONTACT: Susquehanna Bancshares, Inc.
Gregg M. Lampf, 717-625-6305, ir@susqbanc.com