Exhibit 99.1
Susquehanna Bancshares, Inc. Announces First Quarter Results
LITITZ, Pa.--(BUSINESS WIRE)--April 26, 2005--Susquehanna
Bancshares, Inc., (Susquehanna) (Nasdaq:SUSQ) today announced net
income for the first quarter of 2005 was $15.4 million, or $0.33 per
diluted share, compared to the $15.9 million, or $0.40 per diluted
share, for the first quarter of 2004.
First Quarter Financial Highlights:
-- Total deposits grew 17%, rising to $5.1 billion from $4.3
billion in the first quarter of 2004 - excluding Patriot Bank
Corp., which was acquired on June 10, 2004, this increase was
3%.
-- Demand deposits increased 21% to $870 million from $719
million in the first quarter of 2004 - excluding Patriot
this increase was 11%.
-- Net loans and leases grew 18%, rising to $5.0 billion from
$4.2 billion in the first quarter of 2004 - excluding Patriot
and a first quarter auto lease securitization, this increase
was 11%.
-- Commercial loans increased 29% to $803 million in the
first quarter of 2005 - excluding Patriot this increase
was 19%.
-- Real estate construction loans increased 41% to $784
million in the first quarter of 2005 - excluding Patriot
this increase was 11%.
-- Total assets grew 20%, rising to $7.3 billion from $6.0
billion in the first quarter of 2004 - excluding Patriot and a
first quarter auto lease securitization, this increase was 7%.
-- Credit quality remains strong, highlighted by improvement in
the nonperforming assets to total loans, leases and OREO ratio
to 0.42% at March 31, 2005, from 0.46% at March 31, 2004.
-- Net interest margin increased 14 basis points to 3.71%
compared to 3.57% in the first quarter of 2004.
-- Total assets under management and under administration were
$5.2 billion at March 31, 2005, up from $4.5 billion at March
31, 2004, representing 15% growth.
-- Wealth management fee income increased 26% to $7.1 million
from $5.6 million in the first quarter of 2004. Commission
income from property and casualty insurance sales increased
36% to $3.3 million from $2.4 million for the same period.
-- Due to a significant reduction in origination volumes at
Susquehanna's auto lease subsidiary, vehicle fee income
declined $2.0 million. This reduction in volume was due to
special financing offers provided by the major car
manufacturers.
Linked Quarter Highlights (First Quarter 2005 vs. Fourth Quarter
2004)
-- Commercial loans increased 6% to $803 million compared to $760
million in the fourth quarter of 2004.
-- Real estate construction loans increased 6% to $784 million
compared to $742 million in the fourth quarter of 2004.
-- Net interest margin improved 4 basis points to 3.71% from
3.67% in the fourth quarter of 2004.
-- Demand deposits grew 2% to $870 million from $853 million in
the fourth quarter of 2004.
Return on average assets and average equity for the first quarter
of 2005 finished at 0.83% and 8.35%, respectively. This compared to
the first quarter of 2004 with 1.08% and 11.64%, for the same
measurements, respectively.
Equity capital was $746 million at March 31, 2005, or $16.00 per
share, compared to $560 million at March 31, 2004, or $14.04 per
share.
We are maintaining our 2005 fully diluted EPS guidance range of
$1.70 to $1.80. Further discussion of guidance will take place on the
conference call scheduled for April 27, 2005, at 11 a.m. Eastern time.
Additional Activity:
-- On March 30, 2005, individual bank subsidiaries of Susquehanna
completed a private placement of $329,420,000 aggregate
principal amount of asset backed notes to an institutional
purchaser. The notes were issued by a special purpose trust
formed for purposes of the transaction, bear a weighted
average coupon rate of 4.32% per annum and are secured by
beneficial interests in portfolios of motor vehicle leases and
the related vehicles held by the individual bank subsidiaries.
-- On January 21, Susquehanna consolidated and branded its
subsidiary banks First Susquehanna Bank and Trust and WNB Bank
into its Susquehanna Bank PA subsidiary. The Pennsylvania
state-chartered bank has $2.3 billion in combined assets and
operates 58 banking offices in central Pennsylvania.
Susquehanna Bank PA operates under the market name Susquehanna
Bank.
-- On April 15, Susquehanna merged and branded its subsidiary
banks Citizens Bank of Southern Pennsylvania, Farmers &
Merchants Bank and Trust, First American Bank of Pennsylvania,
and Susquehanna Bank. The consolidated bank is called
Susquehanna Bank. The Maryland state-chartered bank has $2.8
billion in combined assets and operates 58 banking offices in
Maryland, south central and western Pennsylvania, and eastern
West Virginia.
-- On February 1, Susquehanna Bancshares, Inc. announced its
acquisition of Brandywine Benefits Corporation and Rockford
Pensions, LLC (collectively "Brandywine"), Wilmington, Del., a
financial planning, consulting and administration firm
specializing in retirement benefit plans for small- to
medium-sized businesses. Susquehanna merged Brandywine into
Valley Forge Asset Management Enterprises, LLC; a wholly-owned
subsidiary of Susquehanna's wealth management affiliate Valley
Forge Asset Management, King of Prussia, Pa. Brandywine serves
over 250 customers in the mid-Atlantic states and generates
approximately $1.55 million in annual revenues.
-- On March 18, Susquehanna Patriot Bank signed a lease for
approximately 25,000-square feet of space in a
soon-to-be-built, four-story building in Camden, N.J.
Susquehanna Patriot Bank will relocate its headquarters from
Marlton, N.J., to Camden in early 2006, making it the first
financial institution headquartered in Camden in over two
decades.
"While we are challenged by the results of our auto leasing
business, we are very much encouraged by the results attained in our
other business lines," said William J. Reuter, Chairman, President and
Chief Executive Officer. "Our banking business, now operating under a
common brand, is growing deposits and loans without sacrificing credit
quality and our net interest margin continues to improve. Non-interest
income, too, remains strong with both our wealth management and
insurance business lines experiencing double-digit fee income
increases in the first quarter."
Susquehanna will broadcast its first quarter results conference
call over the Internet on April 27, 2005 at 11 a.m. Eastern time. The
conference call will include management's discussion of first quarter
results as well as an update on strategic initiatives and auto leasing
performance, and may include forward-looking information such as
matters affecting earnings and other financial metrics guidance.
Investors will have the opportunity to listen to the conference call
through a live broadcast on Susquehanna's Web site, located at
www.susquehanna.net. To listen to the live call, please go to the
Investor Relations section of Susquehanna's Web site at least fifteen
minutes prior to the broadcast to download and install any necessary
audio software. For those who are unable listen to the live broadcast,
an archive will be available shortly after the call concludes.
Susquehanna is a financial services holding company, operating in
multiple states, with assets of $7.3 billion. It provides financial
services through its subsidiaries at 170 locations in the mid-Atlantic
region. In addition to its current three 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.susquehanna.net.
This press release contains certain financial information
determined by methods other than in accordance with GAAP.
Susquehanna's management uses these non-GAAP measures in its analysis
of the Company's performance. These non-GAAP financial measures
require management to make judgments about the exclusion of certain
items, and if different judgments were made, the amounts reported
would be different. These measures typically exclude the effects of
intangibles and related amortization and include the tax benefit
associated with revenue items that are tax-exempt. Disclosures
regarding these non-GAAP financial measures are included in the
accompanying financial information.
The presentation of these non-GAAP financial measures is intended
to supplement investors' understanding of Susquehanna's core business
activities. These non-GAAP disclosures should not be viewed as a
substitute for operating results determined in accordance with GAAP,
nor are they necessarily comparable to non-GAAP performance measures
which may be presented by other companies.
This 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.
Susquehanna Bancshares, Inc.
P.O. Box 1000
Lititz, PA 17543
SUMMARY FINANCIAL INFORMATION
(Dollars in thousands, except per share data)
1Q05 1Q04
----------- -----------
Balance Sheet (EOP)
Investments $1,233,718 $1,061,462
Loans and leases 4,990,889 4,229,609
Allowance for loan & lease losses (ALLL) 53,127 42,946
Total assets 7,253,296 6,049,768
Deposits 5,106,065 4,345,898
Short-term borrowings 398,521 275,388
FHLB borrowings 625,393 492,794
Long-term debt 173,196 130,000
Shareholders' equity 746,089 559,596
Stated Book Value per Share 16.00 14.04
Tangible Book Value per Share 10.52 12.45
Average Balance Sheet
Investments 1,245,288 964,447
Loans and leases 5,267,378 4,257,328
Total earning assets 6,569,960 5,312,386
Total assets 7,486,675 5,918,908
Deposits 5,157,399 4,231,984
Short-term borrowings 394,445 287,270
FHLB borrowings 807,935 546,791
Long-term debt 190,457 130,000
Shareholders' equity 748,140 550,526
Income Statement
Net interest income 59,412 46,681
Loan & lease loss provision 2,750 1,700
Noninterest income 27,970 27,074
Noninterest expense 62,080 49,303
Income before taxes 22,552 22,752
Income taxes 7,149 6,826
Net income 15,403 15,926
Basic earnings per share 0.33 0.40
Diluted earnings per share 0.33 0.40
Cash dividends paid per share 0.23 0.22
Asset Quality
Net charge-offs (NCO) $3,716 $1,426
Nonaccrual loans & leases 19,085 17,749
OREO 1,949 1,657
Total nonperforming assets (NPA) 21,034 19,406
Loans & leases 90 days past due 10,018 6,696
RATIO ANALYSIS 1Q05 1Q04
----------- -----------
Credit Quality
NCO / Average loans & leases 0.29% 0.13%
NPA / Loans & leases & OREO 0.42% 0.46%
ALLL / Nonperforming loans & leases 278.37% 241.96%
ALLL / Total loans & leases 1.06% 1.02%
Capital Adequacy
Equity / Assets 10.29% 9.25%
Long-term debt / Equity 23.21% 23.23%
Profitability
Return on average assets 0.83% 1.08%
Return on average equity 8.35% 11.64%
Return on average tangible equity (1) 12.85% 13.24%
Net interest margin 3.71% 3.57%
Efficiency ratio 70.47% 66.39%
Efficiency ratio excluding Hann (1) 61.28% 64.64%
(1) Supplemental Reporting of Non-GAAP Financial Measures
Susquehanna has presented a return on average tangible equity, which
is a non-GAAP financial measure and is most directly comparable to the
GAAP measurement of return on average equity. For purposes of
computing return on average tangible equity, we have excluded the
balance of intangible assets and their related amortization expense
from our calculation of return on average tangible equity to allow us
to review the core operating results of our company. 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. A reconciliation of return on average
tangible equity to return on average equity is set forth below.
Return on average equity (GAAP basis) 8.35% 11.64%
Effect of excluding average intangible assets
and related amortization 4.50% 1.60%
Return on average tangible equity 12.85% 13.24%
Susquehanna has presented an efficiency ratio excluding Hann, which is
a non-GAAP financial measure and is most directly comparable to the
GAAP presentation of efficiency ratio. We measure our efficiency ratio
by dividing noninterest expenses by the sum of net interest income, on
a FTE basis, and noninterest income. The presentation of an efficiency
ratio excluding Hann is computed as the efficiency ratio excluding the
effects of our auto leasing subsidiary, Hann Financial. Management
believes this to be a preferred measurement because it excludes the
volatility of full- term ratios, securitization gains, and residual
values of Hann and provides more focused visibility into our core
business activities. A reconciliation of efficiency ratio excluding
Hann to efficiency ratio is set forth below.
Efficiency ratio (GAAP basis) 70.47% 66.39%
Effect of excluding Hann 9.19% 1.75%
Efficiency ratio excluding Hann 61.28% 64.64%
CONSOLIDATED BALANCE SHEETS
March 31, Dec. 31, March 31,
2005 2004 2004
----------- ----------- -----------
(in thousands, except share data)
Assets
Cash and due from banks $173,427 $160,574 $137,500
Short-term investments:
Restricted 27,045 27,190 26,777
Unrestricted 32,166 31,544 122,721
----------- ----------- -----------
Total short-term investments 59,211 58,734 149,498
----------- ----------- -----------
Securities available for sale 1,227,119 1,240,945 1,056,929
Securities held to maturity (fair
values approximate $6,599,
$4,469, and $4,533) 6,599 4,469 4,533
Loans and leases, net of unearned
income 4,990,889 5,253,008 4,229,609
Less: Allowance for loan and
lease losses 53,127 54,093 42,946
----------- ----------- -----------
Net loans and leases 4,937,762 5,198,915 4,186,663
----------- ----------- -----------
Premises and equipment, net 87,729 83,606 63,605
Foreclosed assets 1,949 1,340 1,657
Accrued income receivable 22,799 21,661 17,235
Bank-owned life insurance 251,907 249,691 208,092
Goodwill 242,533 240,632 59,123
Intangible assets with finite
lives 12,922 11,960 4,215
Investment in and receivables
from unconsolidated entities 112,205 68,384 57,585
Other assets 117,134 134,162 103,133
----------- ----------- -----------
$7,253,296 $7,475,073 $6,049,768
=========== =========== ===========
Liabilities and Shareholders'
Equity
Deposits:
Demand $870,302 $853,411 $718,621
Interest-bearing demand 1,680,066 1,765,077 1,453,987
Savings 565,449 559,530 518,813
Time 1,350,168 1,367,282 1,255,054
Time of $100 or more 640,080 585,382 399,423
----------- ----------- -----------
Total deposits 5,106,065 5,130,682 4,345,898
Short-term borrowings 398,521 420,868 275,388
FHLB borrowings 625,393 751,220 492,794
Long-term debt 150,000 200,000 130,000
Junior subordinated debentures 23,196 23,277 0
Accrued interest, taxes, and
expenses payable 52,483 41,255 41,226
Deferred taxes 105,925 114,050 109,737
Other liabilities 45,624 42,027 95,129
----------- ----------- -----------
Total liabilities 6,507,207 6,723,379 5,490,172
----------- ----------- -----------
Shareholders' equity:
Common stock, $2.00 par value,
100,000,000 shares
authorized; Issued:
46,623,122 at March 31, 2005;
46,592,930 at December 31,
2004; and 39,868,108 at March
31, 2004 93,246 93,186 79,736
Additional paid-in capital 226,863 226,384 66,365
Retained earnings 439,844 435,159 410,606
Accumulated other
comprehensive income (loss),
net of taxes of ($7,465),
($1,634), and $1,614 (13,864) (3,035) 2,889
----------- ----------- -----------
Total shareholders' equity 746,089 751,694 559,596
----------- ----------- -----------
$7,253,296 $7,475,073 $6,049,768
=========== =========== ===========
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
March 31,
- ---------------------------------------------- -----------------------
(Dollars in thousands, except per share data) 2005 2004
- ---------------------------------------------- ----------- -----------
Interest Income:
Loans and leases, including fees $79,855 $61,134
Securities:
Taxable 10,630 7,713
Tax-exempt 481 260
Dividends 632 283
Short-term investments 304 197
----------- -----------
Total interest income 91,902 69,587
----------- -----------
Interest Expense:
Deposits:
Interest-bearing demand 5,442 2,655
Savings 603 386
Time 14,153 11,815
Short-term borrowings 1,917 590
FHLB borrowings 7,496 5,120
Long-term debt 2,879 2,340
----------- -----------
Total interest expense 32,490 22,906
----------- -----------
Net interest income 59,412 46,681
Provision for loan and lease losses 2,750 1,700
----------- -----------
Net interest income, after provision for loan
and lease losses 56,662 44,981
----------- -----------
Noninterest Income:
Service charges on deposit accounts 4,963 4,882
Vehicle origination, servicing, and
securitization fees 3,202 5,193
Asset management fees 4,384 3,258
Income from fiduciary-related activities 1,481 1,468
Commissions on brokerage, life insurance
and annuity sales 1,218 916
Commissions on property and casualty
insurance sales 3,296 2,420
Income from bank-owned life insurance 2,272 2,012
Net gain on sale of loans and leases 3,698 3,671
Net gain on securities 121 563
Other 3,335 2,691
----------- -----------
Total noninterest income 27,970 27,074
----------- -----------
Noninterest Expenses:
Salaries and employee benefits 29,282 24,107
Occupancy 5,039 3,786
Furniture and equipment 2,348 2,094
Amortization of intangible assets 364 157
Vehicle residual value 2,804 1,211
Vehicle delivery and preparation 3,436 3,018
Other 18,807 14,930
----------- -----------
Total noninterest expenses 62,080 49,303
----------- -----------
Income before income taxes 22,552 22,752
Provision for income taxes 7,149 6,826
----------- -----------
Net Income $15,403 $15,926
=========== ===========
Earnings per share:
Basic $0.33 $0.40
Diluted $0.33 $0.40
Cash dividends $0.23 $0.22
Average shares outstanding:
Basic 46,609 39,866
Diluted 46,825 40,182
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
March 31, 2005 March 31, 2004
- ------------------------------------------- --------------------------
(Dollars in Average Rate Average Rate
thousands) Balance Interest (%) Balance Interest (%)
- ------------------------------------------- --------------------------
Assets
Short-term
investments $57,294 $304 2.15 $90,611 $197 0.87
Investment
securities:
Taxable 1,203,399 11,262 3.80 943,815 7,996 3.41
Tax-
advantaged 41,889 740 7.16 20,632 400 7.80
- ---------------------------- -------- ----------- --------
Total
investment
securities 1,245,288 12,002 3.91 964,447 8,396 3.50
- ---------------------------- -------- ----------- --------
Loans and
leases, (net):
Taxable 5,182,080 79,008 6.18 4,189,597 60,441 5.80
Tax-
advantaged 85,298 1,303 6.20 67,731 1,066 6.33
- ---------------------------- -------- ----------- --------
Total loans
and leases 5,267,378 80,311 6.18 4,257,328 61,507 5.81
- ---------------------------- -------- ----------- --------
Total interest-
earning assets 6,569,960 $92,617 5.72 5,312,386 $70,100 5.31
-------- --------
Allowance for
loan and lease
losses (53,841) (43,339)
Other non-
earning assets 970,556 649,861
- ---------------------------- -----------
Total assets $7,486,675 $5,918,908
- ---------------------------- -----------
Liabilities
Deposits:
Interest-
bearing
demand $1,738,757 $5,442 1.27 $1,364,918 $2,655 0.78
Savings 562,487 603 0.43 513,237 386 0.30
Time 1,986,594 14,155 2.89 1,651,567 11,815 2.88
Short-term
borrowings 394,445 1,916 1.97 287,270 590 0.83
FHLB borrowings 807,935 7,495 3.76 546,791 5,120 3.77
Long-term debt 190,457 2,879 6.13 130,000 2,340 7.24
- ---------------------------- -------- ----------- --------
Total interest-
bearing
liabilities 5,680,675 $32,490 2.32 4,493,783 $22,906 2.05
-------- --------
Demand deposits 869,561 702,262
Other
liabilities 188,299 172,337
- ---------------------------- -----------
Total
liabilities 6,738,535 5,368,382
- ---------------------------- -----------
Equity 748,140 550,526
- ---------------------------- -----------
Total liabilities
& shareholders'
equity $7,486,675 $5,918,908
- ---------------------------- -----------
Net interest
income / yield
on average
earning assets $60,127 3.71 $47,194 3.57
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:
March 31, December 31, March 31,
2005 2004 2004
----------- ----------- -----------
(in thousands)
Commercial, financial, and
agricultural $802,525 $760,106 $622,587
Real estate - construction 784,320 741,660 557,526
Real estate secured - residential 1,602,225 1,611,999 1,302,497
Real estate secured - commercial 1,249,933 1,252,753 1,008,297
Consumer 338,922 351,846 337,276
Leases 212,964 534,644 401,426
----------- ----------- -----------
Total loans and leases $4,990,889 $5,253,008 $4,229,609
=========== =========== ===========
CONTACT: Susquehanna Bancshares, Inc.
Abram G. Koser, 717-625-6305
ir@susquehanna.net