SUSQUEHANNA BANCSHARES INC The board of directors of Susquehanna Bancshares, Inc. (“Susquehanna”) (NASDAQ: SUSQ) has declared a first quarter dividend of $0.09 per common share, payable on February 20, 2015 to shareholders of record on February 2, 2015.
In addition, Susquehanna announced that it earned net income for the fourth quarter ended December 31, 2014 of $30.3 million, or $0.17 per diluted share, compared to $33.5 million, or $0.18 per diluted share, and $41.3 million, or $0.22 per diluted share, for the third quarter of 2014 and fourth quarter of 2013, respectively. Net income for the year ended 2014 was $144.4 million, or $0.78 per diluted share, compared with $173.7 million, or $0.92 per diluted share for the same period in 2013.
Linked Quarter Results (Fourth Quarter 2014 vs. Third Quarter 2014)
-
Loans and leases increased $92.2 million or 0.7% from September 30,
2014 to $13.5 billion at December 31, 2014. Changes for the quarter in
each major loan category were as follows:
- Commercial loans increased 2.9%.
- Real estate – construction loans decreased 3.6%.
- Real estate secured – residential loans increased 0.5%.
- Real estate secured – commercial loans decreased 0.6%.
- Consumer loans increased 3.1%.
- Leases increased 2.6%.
-
Total deposits increased $133.3 million or 1.0% from September 30,
2014 to $13.7 billion at December 31, 2014. Changes for the quarter in
each major deposit category were as follows:
- Non-interest bearing checking increased 0.3%.
- Interest-bearing checking increased 2.7%.
- Money market deposits increased 6.4%.
- Savings deposits increased 1.9%.
- Time deposits decreased 4.5%.
- Net interest margin decreased 4 basis points to 3.46% for the fourth quarter of 2014 compared to 3.50% for the third quarter of 2014. Net interest margin (excluding purchase accounting) (1) decreased 6 basis points to 3.31% for the fourth quarter of 2014 compared to 3.37% for the third quarter of 2014. The decrease in the net interest margin was driven by the reinvestment of cash from the prior quarter’s retail auto loan securitization and, to a lesser extent, an increase in funding costs.
- Net interest income decreased to $135.4 million for the fourth quarter of 2014 compared to $136.5 million for the third quarter of 2014. The increase in average earning assets was more than offset by a decline in net interest margin resulting in a linked quarter decline in net interest income.
- Non-interest income increased to $46.6 million for the fourth quarter of 2014 compared to $44.6 million for the third quarter of 2014. Solid performance in capital markets and seasonally-strong SBA loan sales contributed to the linked quarter increase.
- Non-interest expense increased to $130.5 million for the fourth quarter of 2014 compared to $124.4 million for the third quarter of 2014. The primary driver of the increase was a stronger than anticipated fourth quarter results that resulted in additional incentive compensation expense.
- The efficiency ratio (1) increased to 70.21% for the fourth quarter of 2014 compared to 67.32% for the third quarter of 2014.
- Non-performing assets as a percentage of loans, leases and foreclosed real estate owned decreased to 0.79% at December 31, 2014 compared to 0.88% at September 30, 2014.
- The provision for loan and lease losses for the fourth quarter of 2014 decreased to $7.2 million compared to $9.0 million for the third quarter of 2014. Net charge-offs for the fourth quarter of 2014 decreased to $7.5 million, or 0.22% of average loans and leases, compared to $16.6 million, or 0.49% of average loans and leases, for the third quarter of 2014. As a result, the allowance for loan and lease losses was $136.5 million at December 31, 2014, representing 1.01% of total loans and leases and 140% of nonaccrual loans and leases compared to $136.9 million at September 30, 2014, representing 1.02% of total loans and leases and 125% of nonaccrual loans and leases.
Full Year Results (2014 vs. 2013)
-
Loans and leases decreased $58.2 million or 0.4% from December 31,
2013 to $13.5 billion at December 31, 2014. In August 2014,
Susquehanna and its wholly-owned subsidiary Susquehanna Bank sold
approximately $255.8 million of retail auto loans in an off-balance
sheet securitization that previously were included in the Consumer
loans category. Changes for the twelve month period in each major loan
category were as follows:
- Commercial loans increased 1.5%.
- Real estate - construction loans increased 7.1%.
- Real estate secured - residential loans decreased 0.2%.
- Real estate secured - commercial loans decreased 1.9%.
- Consumer loans decreased 21.0%.
- Leases increased 11.6%.
-
Total deposits increased $852.5 million or 6.6% from December 31, 2013
to $13.7 billion as of December 31, 2014. Changes for the twelve month
period in each major deposit category were as follows:
- Non-interest-bearing checking increased 2.7%.
- Interest-bearing checking increased 8.9%.
- Money market deposits increased 11.6%.
- Savings deposits increased 6.1%.
- Time deposits increased 2.9%.
-
Net interest margin decreased 24 basis points to 3.55% for 2014
compared to 3.79% for 2013.
Net interest income decreased to $553.6 million for 2014 compared to $585.9 million for 2013. The sustained low rate environment pressured the net interest margin as existing loans repriced lower and new originations came on at lower rates than the existing loan portfolio. - Non-interest income decreased to $178.6 million for 2014 compared to $183.7 million for 2013. The decrease was attributed to the sustained low rate environment negatively impacting our rate sensitive businesses, such as mortgage banking.
- Non-interest expense increased to $503.1 million for 2014 compared to $490.8 million for 2013. The increase was driven by an increase in salaries and employee benefits, partly due to the increase in FTEs as a result of increased regulatory and compliance requirements.
- The efficiency ratio (1) increased to 67.21% for 2014 compared to 62.55% for 2013.
- Non-performing assets as a percentage of loans, leases and foreclosed real estate decreased to 0.79% at December 31, 2014 compared to 0.86% at December 31, 2013.
- The provision for loan and lease losses decreased to $25.2 million for 2014 compared to $31.0 million for 2013. Net charge-offs as a percentage of average loans and leases decreased to 0.33% for 2014 compared to 0.44% for 2013. The allowance for loan and lease losses was $136.5 million at December 31, 2014, representing 1.01% of total loans and leases and 140% of nonaccrual loans and leases, compared to $157.6 million at December 31, 2013, representing 1.16% of total loans and leases and 156% of nonaccrual loans and leases.
- Return on average assets and average tangible equity (1) decreased to 0.78% and 10.34%, respectively for 2014 compared to 0.95% and 13.57%, respectively for 2013.
- Susquehanna’s capital ratios continue to exceed internal capital targets and those required to be considered “well-capitalized” under the current regulatory requirements, with a Tier 1 common ratio of 10.95%, Tier 1 capital ratio of 12.00%, Total risk-based capital ratio of 13.16% and a Leverage ratio of 9.60%, each as of December 31, 2014.
| (1) | Non-GAAP based financial measure. Please refer to the calculations and management’s reasons for using this measure in the accompanying financial schedules |
Additional Events
- On November 12, 2014, BB&T Corporation (“BB&T”) and Susquehanna announced the signing of a definitive agreement and plan of merger under which BB&T will acquire Susquehanna through the merger of Susquehanna with and into BB&T, with BB&T surviving the merger, in a cash and stock transaction for total consideration valued at approximately $2.5 billion.
- Subject to the satisfaction or waiver of the closing conditions contained in the merger agreement, including the approval of the merger agreement by Susquehanna shareholders and the receipt of required regulatory approvals, BB&T and Susquehanna expect that the merger will be completed during the second half of 2015. However, it is possible that factors outside the control of both companies, including whether or when the required regulatory approvals will be received, could result in the merger being completed at a different time or not at all.
Susquehanna is a financial services holding company with total assets of approximately $18.7 billion. Headquartered in Lititz, Pa., Susquehanna provides banking and financial services at 245 branch locations in the mid-Atlantic region. Through Susquehanna Wealth Management, Susquehanna offers investment, fiduciary, brokerage, insurance, retirement planning, and private banking services, with approximately $7.9 billion in assets under management and administration. Susquehanna also operates an insurance brokerage and employee benefits company, a commercial finance company, a vehicle leasing company, a mortgage division, and a settlement services company. Investor information may be requested through Susquehanna’s Website at www.susquehanna.net.
This press release contains certain financial information determined by methods other than in accordance with GAAP. Susquehanna’s management uses these non-GAAP measures in its analysis of the company’s performance. These non-GAAP financial measures require management to make judgments about the exclusion of certain items, and if different judgments were made, the amounts reported would be different. These measures typically exclude the effects of intangibles and related amortization and include the tax benefit associated with revenue items that are tax-exempt. Disclosures regarding these non-GAAP financial measures are included in the accompanying financial information.
The presentation of these non-GAAP financial measures is intended to supplement investors’ understanding of Susquehanna’s core business activities. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.
This release includes forward-looking statements as that term is defined in the U.S. Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various risks, uncertainties and other factors. Forward-looking statements can be identified by words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “continue,” “remain,” “will,” “should,” “may,” “plans,” “estimates,” and similar words or expressions. The risks, uncertainties and other factors that could cause actual results and experience to differ materially from forward-looking statements or historical performance include, but are not limited to, the following: ineffectiveness of Susquehanna’s business strategy due to internal or external factors, including changes in current or future market conditions; the effects of competition, ability to obtain regulatory approvals and meet other closing conditions to the merger, including approval by Susquehanna shareholders on the expected terms and schedule; delay in closing the merger; difficulties and delays in integrating the Susquehanna business or fully realizing cost savings and other benefits; business disruption following the merger; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer acceptance of BB&T products and services; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures; economic conditions; and the impact, extent and timing of technological changes, capital management activities, and other actions of the Federal Reserve Board, and legislative and regulatory actions and reforms; and the other factors detailed in Susquehanna’s and BB&T’s filings with the Securities and Exchange Commission (“SEC”). Susquehanna encourages readers of this release to understand forward-looking statements to be strategic objectives rather than absolute targets of future performance. Forward-looking statements speak only as of the date they are made. Susquehanna does not intend to update publicly any forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made or to reflect the occurrence of unanticipated events except as required by law.
Important Additional Information and Where to Find It
In connection with the proposed merger, BB&T has filed with the SEC a Registration Statement on Form S-4 that includes a Proxy Statement of Susquehanna and a Prospectus of BB&T, as well as other relevant documents concerning the proposed transaction. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. SHAREHOLDERS OF SUSQUEHANNA ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
A free copy of the Proxy Statement/Prospectus, as well as other filings containing information about BB&T and Susquehanna, may be obtained at the SEC’s Internet site (http://www.sec.gov). You will also be able to obtain these documents, free of charge, from BB&T at www.bbt.com under the heading “About” and then under the heading “Investor Relations” and then under “BB&T Corporation SEC Filings” or from Susquehanna by accessing Susquehanna’s website at www.susquehanna.net under the heading “Investor Relations” and then under “SEC Filings”. Copies of the Proxy Statement/Prospectus can also be obtained, free of charge, by directing a request to BB&T Corporation, 150 South Stratford Road, Suite 300, Winston-Salem, North Carolina 27104, Attention: Shareholder Services, Telephone: (336) 733-3065 or to Susquehanna Bancshares, Inc., 26 North Cedar Street, Lititz, Pennsylvania 17543, Attention: Jason H. Weber, Senior Vice President and Director of Investor Relations, Telephone (717) 626-9801. In addition, Susquehanna uses its Investor Relations website and social media outlets as channels of distribution of material company information. Such information is accessible on Susquehanna’s Investor Relations website, as well as on Susquehanna’s Facebook page and through its Twitter account and LinkedIn account.
Susquehanna and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Susquehanna in connection with the proposed merger. Information about the directors and executive officers of Susquehanna and their ownership of Susquehanna common stock is set forth in the proxy statement for Susquehanna’s 2014 annual meeting of shareholders, as filed with the SEC on Schedule 14A on March 21, 2014. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Proxy Statement/Prospectus regarding the proposed merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.
Susquehanna Bancshares, Inc. | ||||||||||||||||||||||||||||
26 North Cedar Street | ||||||||||||||||||||||||||||
Lititz, PA 17543 | ||||||||||||||||||||||||||||
| SUMMARY CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||||||||||
| Twelve Months YTD | ||||||||||||||||||||||||||||
| 4Q14 | 3Q14 | 2Q14 | 1Q14 | 4Q13 | 2014 | 2013 | ||||||||||||||||||||||
| Balance Sheet (EOP) | ||||||||||||||||||||||||||||
| Investments | $ | 2,553,655 | $ | 2,325,734 | $ | 2,324,782 | $ | 2,445,322 | $ | 2,533,456 | $ | 2,553,655 | $ | 2,533,456 | ||||||||||||||
| Loans and leases | 13,517,882 | 13,425,721 | 13,667,153 | 13,575,295 | 13,576,086 | 13,517,882 | 13,576,086 | |||||||||||||||||||||
| Allowance for loan and lease losses (ALLL) | 136,522 | 136,870 | 144,483 | 154,150 | 157,608 | 136,522 | 157,608 | |||||||||||||||||||||
| Total assets | 18,661,390 | 18,583,327 | 18,506,626 | 18,439,682 | 18,473,489 | 18,661,390 | 18,473,489 | |||||||||||||||||||||
| Deposits | 13,721,843 | 13,588,524 | 13,314,994 | 13,079,523 | 12,869,372 | 13,721,843 | 12,869,372 | |||||||||||||||||||||
| Other short-term borrowings | 516,089 | 532,675 | 527,079 | 584,664 | 555,740 | 516,089 | 555,740 | |||||||||||||||||||||
| Federal Home Loan Bank borrowings | 913,449 | 915,362 | 1,127,302 | 1,229,296 | 1,531,282 | 913,449 | 1,531,282 | |||||||||||||||||||||
| Other long-term debt | 351,904 | 356,117 | 360,033 | 448,521 | 453,260 | 351,904 | 453,260 | |||||||||||||||||||||
| Shareholders' equity | 2,753,925 | 2,751,260 | 2,796,392 | 2,755,199 | 2,717,587 | 2,753,925 | 2,717,587 | |||||||||||||||||||||
| Average Balance Sheet | ||||||||||||||||||||||||||||
| Investments | $ | 2,431,597 | $ | 2,293,302 | $ | 2,395,690 | $ | 2,505,937 | $ | 2,616,807 | $ | 2,406,117 | $ | 2,577,207 | ||||||||||||||
| Loans and leases | 13,438,494 | 13,499,686 | 13,589,533 | 13,574,526 | 13,421,474 | 13,525,116 | 13,189,499 | |||||||||||||||||||||
| Total earning assets | 15,954,179 | 15,872,628 | 16,066,177 | 16,162,210 | 16,124,369 | 16,013,119 | 15,863,531 | |||||||||||||||||||||
| Total assets | 18,628,209 | 18,411,529 | 18,378,127 | 18,411,873 | 18,437,954 | 18,468,693 | 18,201,159 | |||||||||||||||||||||
| Deposits | 13,653,638 | 13,395,247 | 13,131,617 | 12,874,040 | 12,806,503 | 13,266,132 | 12,777,738 | |||||||||||||||||||||
| Other short-term borrowings | 535,633 | 541,363 | 552,367 | 671,653 | 671,923 | 575,894 | 743,718 | |||||||||||||||||||||
| Federal Home Loan Bank borrowings | 914,287 | 961,483 | 1,174,611 | 1,387,124 | 1,502,120 | 1,107,675 | 1,247,209 | |||||||||||||||||||||
| Other long-term debt | 354,179 | 358,502 | 396,367 | 451,267 | 455,787 | 389,727 | 483,888 | |||||||||||||||||||||
| Shareholders' equity | 2,757,933 | 2,775,786 | 2,768,665 | 2,726,465 | 2,679,242 | 2,760,143 | 2,646,339 | |||||||||||||||||||||
| Income Statement | ||||||||||||||||||||||||||||
| Net interest income | $ | 135,384 | $ | 136,465 | $ | 141,694 | $ | 140,064 | $ | 142,688 | $ | 553,607 | $ | 585,940 | ||||||||||||||
| Provision for loan and lease losses | 7,200 | 9,000 | 3,000 | 6,000 | 2,000 | 25,200 | 31,000 | |||||||||||||||||||||
| Noninterest income | 46,588 | 44,617 | 45,349 | 42,089 | 50,666 | 178,643 | 183,729 | |||||||||||||||||||||
| Noninterest expense | 130,470 | 124,411 | 125,225 | 123,032 | 135,672 | 503,138 | 490,840 | |||||||||||||||||||||
| Income before taxes | 44,302 | 47,671 | 58,818 | 53,121 | 55,682 | 203,912 | 247,829 | |||||||||||||||||||||
| Provision for income taxes | 13,978 | 14,203 | 15,324 | 15,959 | 14,341 | 59,464 | 74,150 | |||||||||||||||||||||
| Net income | 30,324 | 33,468 | 43,494 | 37,162 | 41,341 | 144,448 | 173,679 | |||||||||||||||||||||
| Basic earnings per common share | 0.17 | 0.18 | 0.23 | 0.20 | 0.22 | 0.78 | 0.93 | |||||||||||||||||||||
| Diluted earnings per common share | 0.17 | 0.18 | 0.23 | 0.20 | 0.22 | 0.78 | 0.92 | |||||||||||||||||||||
| Cash dividends paid per common share | 0.09 | 0.09 | 0.08 | 0.08 | 0.08 | 0.34 | 0.24 | |||||||||||||||||||||
| Asset Quality | ||||||||||||||||||||||||||||
| Net charge-offs (NCOs) | $ | 7,548 | $ | 16,613 | $ | 11,431 | $ | 9,458 | $ | 11,132 | $ | 45,050 | $ | 57,412 | ||||||||||||||
| Nonaccrual loans and leases | $ | 97,697 | $ | 109,506 | $ | 105,609 | $ | 108,408 | $ | 100,815 | $ | 97,697 | $ | 100,815 | ||||||||||||||
| Foreclosed real estate | 9,672 | 9,133 | 10,302 | 11,980 | 16,555 | 9,672 | 16,555 | |||||||||||||||||||||
| Total nonperforming assets (NPAs) | $ | 107,369 | $ | 118,639 | $ | 115,911 | $ | 120,388 | $ | 117,370 | $ | 107,369 | $ | 117,370 | ||||||||||||||
| Restructured loans | $ | 46,856 | $ | 42,418 | $ | 40,938 | $ | 39,555 | $ | 72,133 | $ | 46,856 | $ | 72,133 | ||||||||||||||
| Loans and leases 90 days past due | 8,488 | 10,303 | 9,190 | 9,328 | 9,757 | 8,488 | 9,757 | |||||||||||||||||||||
| Credit Quality | ||||||||||||||||||||||||||||
| NCOs / Average loans and leases | 0.22% | 0.49% | 0.34% | 0.28% | 0.33% | 0.33% | 0.44% | |||||||||||||||||||||
| NPAs / Loans and leases + foreclosed real estate | 0.79% | 0.88% | 0.85% | 0.89% | 0.86% | 0.79% | 0.86% | |||||||||||||||||||||
| ALLL / Nonaccrual loans and leases | 139.74% | 124.99% | 136.81% | 142.19% | 156.33% | 139.74% | 156.33% | |||||||||||||||||||||
| ALLL / Total loans and leases | 1.01% | 1.02% | 1.06% | 1.14% | 1.16% | 1.01% | 1.16% | |||||||||||||||||||||
| Profitability | ||||||||||||||||||||||||||||
| Return on average assets | 0.65% | 0.72% | 0.95% | 0.82% | 0.89% | 0.78% | 0.95% | |||||||||||||||||||||
| Return on average equity | 4.36% | 4.78% | 6.30% | 5.53% | 6.12% | 5.23% | 6.56% | |||||||||||||||||||||
| Return on average tangible equity (1) | 8.65% | 9.41% | 12.34% | 11.08% | 12.49% | 10.34% | 13.57% | |||||||||||||||||||||
| Net interest margin | 3.46% | 3.50% | 3.63% | 3.61% | 3.60% | 3.55% | 3.79% | |||||||||||||||||||||
| Efficiency ratio (1) | 70.21% | 67.32% | 65.63% | 66.18% | 68.84% | 67.21% | 62.55% | |||||||||||||||||||||
| Per Share Data (EOP) | ||||||||||||||||||||||||||||
| Closing share price | $ | 13.43 | $ | 10.00 | $ | 10.56 | $ | 11.37 | $ | 12.84 | $ | 13.43 | $ | 12.84 | ||||||||||||||
| Stated book value per common share | 15.13 | 15.17 | 14.90 | 14.69 | 14.50 | 15.13 | 14.50 | |||||||||||||||||||||
| Tangible book value per common share (1) | 7.98 | 7.99 | 7.95 | 7.73 | 7.52 | 7.98 | 7.52 | |||||||||||||||||||||
| Price/Book Value | 88.77% | 65.90% | 70.88% | 77.41% | 88.52% | 88.77% | 88.52% | |||||||||||||||||||||
| Price/Tangible Book Value | 168.30% | 125.16% | 132.83% | 147.09% | 170.74% | 168.30% | 170.74% | |||||||||||||||||||||
| Number of outstanding shares ('000) | 182,039 | 181,310 | 187,706 | 187,590 | 187,363 | 182,039 | 187,363 | |||||||||||||||||||||
| Capital Ratios | ||||||||||||||||||||||||||||
| Tangible common ratio (1) | 8.56% | 8.58% | 8.88% | 8.67% | 8.44% | 8.56% | 8.44% | |||||||||||||||||||||
| Tier 1 common ratio | 10.95% | 10.86% | 11.03% | 10.84% | 10.60% | 10.95% | 10.60% | |||||||||||||||||||||
| Leverage ratio | 9.60% | 9.61% | 9.90% | 9.72% | 9.55% | 9.60% | 9.55% | |||||||||||||||||||||
| Tier 1 capital ratio | 12.00% | 11.92% | 12.07% | 11.95% | 11.71% | 12.00% | 11.71% | |||||||||||||||||||||
| Total risk-based capital ratio | 13.16% | 13.08% | 13.27% | 13.23% | 13.04% | 13.16% | 13.04% | |||||||||||||||||||||
| (1) Non-GAAP based financial measures. Please refer to the calculations and management's reasons for using these measures in Appendix A - GAAP to Non-GAAP Reconciliation | ||||||||||||||||||||||||||||
Susquehanna Bancshares, Inc. | ||||||||||||||||||||
26 North Cedar Street | ||||||||||||||||||||
Lititz, PA 17543 | ||||||||||||||||||||
CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| 2014 | 2014 | 2014 | 2014 | 2013 | |||||||||||||||
Assets | ||||||||||||||||||||
| Cash and due from banks | $ | 506,304 | $ | 772,677 | $ | 456,917 | $ | 389,793 | $ | 305,357 | ||||||||||
| Unrestricted short-term investments | 37,149 | 40,508 | 33,369 | 24,768 | 37,967 | |||||||||||||||
| Cash and cash equivalents | 543,453 | 813,185 | 490,286 | 414,561 | 343,324 | |||||||||||||||
Interest-bearing deposits held by consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities | 1,439 | 2,211 | 1,554 | 1,689 | 2,347 | |||||||||||||||
| Restricted short-term investments | 42,949 | 36,943 | 43,926 | 42,993 | 42,913 | |||||||||||||||
| Securities available for sale | 2,438,085 | 2,192,615 | 2,183,093 | 2,299,235 | 2,375,224 | |||||||||||||||
| Restricted investment in bank stocks | 115,570 | 133,119 | 141,689 | 146,087 | 158,232 | |||||||||||||||
| Loans and leases, net of deferred costs and fees | 13,455,046 | 13,361,516 | 13,600,254 | 13,505,746 | 13,503,392 | |||||||||||||||
Loans held by consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities | 62,836 | 64,205 | 66,899 | 69,549 | 72,694 | |||||||||||||||
| Less: Allowance for loan and lease losses | 136,522 | 136,870 | 144,483 | 154,150 | 157,608 | |||||||||||||||
| Net loans and leases | 13,381,360 | 13,288,851 | 13,522,670 | 13,421,145 | 13,418,478 | |||||||||||||||
| Premises and equipment, net | 167,048 | 168,466 | 169,975 | 170,349 | 173,542 | |||||||||||||||
| Other real estate and foreclosed assets | 10,099 | 9,898 | 11,102 | 12,943 | 17,573 | |||||||||||||||
| Accrued interest receivable | 39,249 | 39,899 | 38,878 | 41,594 | 41,690 | |||||||||||||||
| Bank-owned life insurance | 446,676 | 449,199 | 450,318 | 449,778 | 449,320 | |||||||||||||||
| Goodwill | 1,275,439 | 1,275,439 | 1,275,439 | 1,275,439 | 1,275,439 | |||||||||||||||
| Intangible assets with finite lives | 25,575 | 27,163 | 28,579 | 30,303 | 32,262 | |||||||||||||||
| Deferred income tax assets | 7,648 | 6,903 | 7,357 | 5,216 | 6,472 | |||||||||||||||
| Other assets | 166,800 | 139,436 | 141,760 | 128,350 | 136,673 | |||||||||||||||
| Total assets | $ | 18,661,390 | $ | 18,583,327 | $ | 18,506,626 | $ | 18,439,682 | $ | 18,473,489 | ||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||||
| Deposits | $ | 13,721,843 | $ | 13,588,524 | $ | 13,314,994 | $ | 13,079,523 | $ | 12,869,372 | ||||||||||
| Federal Home Loan Bank short-term borrowings | 850,000 | 850,000 | 1,050,000 | 1,150,000 | 1,450,000 | |||||||||||||||
| Other short-term borrowings | 516,089 | 532,675 | 527,079 | 584,664 | 555,740 | |||||||||||||||
| Federal Home Loan Bank long-term borrowings | 63,449 | 65,362 | 77,302 | 79,296 | 81,282 | |||||||||||||||
| Other long-term debt | 175,217 | 175,219 | 175,222 | 250,224 | 250,227 | |||||||||||||||
| Junior subordinated debentures | 146,117 | 146,059 | 146,002 | 155,022 | 155,002 | |||||||||||||||
Long-term debt of consolidated variable interest entities for which creditors do not have recourse to Susquehanna's general credit | 30,570 | 34,839 | 38,809 | 43,275 | 48,031 | |||||||||||||||
| Accrued interest, taxes, and expenses payable | 85,075 | 72,044 | 72,664 | 69,404 | 82,150 | |||||||||||||||
| Deferred income tax liabilities | 133,932 | 128,389 | 114,119 | 75,911 | 70,308 | |||||||||||||||
| Other liabilities | 185,173 | 238,956 | 194,043 | 197,164 | 193,790 | |||||||||||||||
| Total liabilities | 15,907,465 | 15,832,067 | 15,710,234 | 15,684,483 | 15,755,902 | |||||||||||||||
| Shareholders' equity: | ||||||||||||||||||||
| Common stock | 365,184 | 363,358 | 376,146 | 375,845 | 375,353 | |||||||||||||||
| Treasury stock | (5,571 | ) | (3,100 | ) | (3,075 | ) | (2,735 | ) | (2,531 | ) | ||||||||||
| Additional paid-in capital | 1,609,663 | 1,605,671 | 1,657,699 | 1,654,357 | 1,652,116 | |||||||||||||||
| Retained earnings | 825,471 | 811,462 | 794,864 | 766,381 | 744,215 | |||||||||||||||
| Accumulated other comprehensive loss | (40,822 | ) | (26,131 | ) | (29,242 | ) | (38,649 | ) | (51,566 | ) | ||||||||||
| Total shareholders' equity | 2,753,925 | 2,751,260 | 2,796,392 | 2,755,199 | 2,717,587 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 18,661,390 | $ | 18,583,327 | $ | 18,506,626 | $ | 18,439,682 | $ | 18,473,489 | ||||||||||
Susquehanna Bancshares, Inc. | |||||||||||||||||||
26 North Cedar Street | |||||||||||||||||||
Lititz, PA 17543 | |||||||||||||||||||
| Loans and Leases and Deposits | |||||||||||||||||||
| (in thousands) | |||||||||||||||||||
| Loans and Leases | |||||||||||||||||||
| 12/31/14 | 09/30/14 | 06/30/14 | 03/31/14 | 12/31/13 | |||||||||||||||
| Commercial, financial, and agricultural | $ | 2,430,532 | $ | 2,362,201 | $ | 2,422,931 | $ | 2,411,851 | $ | 2,394,847 | |||||||||
| Real estate - construction | 788,261 | 817,492 | 748,181 | 714,291 | 735,877 | ||||||||||||||
| Real estate secured - residential | 4,194,738 | 4,172,943 | 4,178,842 | 4,178,505 | 4,204,430 | ||||||||||||||
| Real estate secured - commercial | 3,991,379 | 4,016,635 | 4,053,990 | 4,041,989 | 4,068,816 | ||||||||||||||
| Consumer | 752,975 | 730,687 | 962,618 | 955,577 | 953,000 | ||||||||||||||
| Leases | 1,359,997 | 1,325,763 | 1,300,591 | 1,273,082 | 1,219,116 | ||||||||||||||
| Total loans and leases | $ | 13,517,882 | $ | 13,425,721 | $ | 13,667,153 | $ | 13,575,295 | $ | 13,576,086 | |||||||||
| Deposits | |||||||||||||||||||
| 12/31/14 | 09/30/14 | 06/30/14 | 03/31/14 | 12/31/13 | |||||||||||||||
| Noninterest-bearing checking | $ | 1,964,510 | $ | 1,958,308 | $ | 1,935,635 | $ | 1,880,284 | $ | 1,913,526 | |||||||||
| Interest-bearing checking | 3,169,017 | 3,087,166 | 2,883,679 | 2,908,507 | 2,909,376 | ||||||||||||||
| Money market | 3,509,192 | 3,297,699 | 3,025,430 | 3,184,719 | 3,144,106 | ||||||||||||||
| Savings | 1,143,596 | 1,122,232 | 1,136,044 | 1,132,850 | 1,077,923 | ||||||||||||||
| Core deposits | 9,786,315 | 9,465,405 | 8,980,788 | 9,106,360 | 9,044,931 | ||||||||||||||
| Time less than $100 | 2,179,647 | 2,265,787 | 2,266,815 | 2,166,207 | 2,113,209 | ||||||||||||||
| Time of $100 or more | 1,755,881 | 1,857,332 | 2,067,391 | 1,806,956 | 1,711,232 | ||||||||||||||
| Total deposits | $ | 13,721,843 | $ | 13,588,524 | $ | 13,314,994 | $ | 13,079,523 | $ | 12,869,372 | |||||||||
| Supplemental Loan and Lease Data | |||||||||||||||||||
| (in thousands) | |||||||||||||||||||
| Nonaccrual Loans and Leases | |||||||||||||||||||
| 12/31/14 | 09/30/14 | 06/30/14 | 03/31/14 | 12/31/13 | |||||||||||||||
| Commercial, financial, and agricultural | $ | 23,393 | $ | 23,121 | $ | 18,792 | $ | 24,529 | $ | 16,827 | |||||||||
| Real estate - construction | 6,832 | 7,225 | 7,428 | 11,695 | 13,230 | ||||||||||||||
| Real estate secured - residential | 21,858 | 23,653 | 24,740 | 23,189 | 23,365 | ||||||||||||||
| Real estate secured - commercial | 44,980 | 54,484 | 53,687 | 47,950 | 46,147 | ||||||||||||||
| Consumer | 37 | 40 | 43 | 46 | 47 | ||||||||||||||
| Leases | 597 | 983 | 919 | 999 | 1,199 | ||||||||||||||
| Total nonaccrual loans and leases | $ | 97,697 | $ | 109,506 | $ | 105,609 | $ | 108,408 | $ | 100,815 | |||||||||
| Restructured Loans | |||||||||||||||||||
| 12/31/14 | 09/30/14 | 06/30/14 | 03/31/14 | 12/31/13 | |||||||||||||||
| Commercial, financial, and agricultural | $ | 4,816 | $ | 4,044 | $ | 4,228 | $ | 5,264 | $ | 6,885 | |||||||||
| Real estate - construction | 315 | 319 | 322 | 325 | 615 | ||||||||||||||
| Real estate secured - residential | 20,534 | 20,231 | 18,414 | 16,168 | 31,623 | ||||||||||||||
| Real estate secured - commercial | 20,227 | 16,780 | 16,903 | 16,681 | 31,295 | ||||||||||||||
| Consumer | 964 | 1,044 | 1,071 | 1,117 | 1,715 | ||||||||||||||
| Total restructured loans | $ | 46,856 | $ | 42,418 | $ | 40,938 | $ | 39,555 | $ | 72,133 | |||||||||
| Net Charge-offs (Recoveries) | |||||||||||||||||||
| 4Q 2014 | 3Q 2014 | 2Q 2014 | 1Q 2014 | 4Q 2013 | |||||||||||||||
| Commercial, financial, and agricultural | $ | 684 | $ | 8,069 | $ | 7,274 | $ | 3,182 | $ | (480 | ) | ||||||||
| Real estate - construction | (468 | ) | 776 | (457 | ) | (91 | ) | (3,312 | ) | ||||||||||
| Real estate secured - residential | 2,949 | 2,549 | 2,453 | 2,796 | 2,724 | ||||||||||||||
| Real estate secured - commercial | 3,245 | 3,827 | 730 | 2,134 | 11,060 | ||||||||||||||
| Consumer | 572 | 614 | 1,013 | 855 | 330 | ||||||||||||||
| Leases | 566 | 778 | 418 | 582 | 810 | ||||||||||||||
| Total net charge-offs | $ | 7,548 | $ | 16,613 | $ | 11,431 | $ | 9,458 | $ | 11,132 | |||||||||
Susquehanna Bancshares, Inc. | |||||||||||||||||||||||||
26 North Cedar Street | |||||||||||||||||||||||||
Lititz, PA 17543 | |||||||||||||||||||||||||
| CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED) | |||||||||||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | ||||||||||||||||||||
| 2014 | 2014 | 2014 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
| Interest Income: | |||||||||||||||||||||||||
| Loans and leases, including deferred costs and fees | $ | 147,157 | $ | 147,761 | $ | 148,002 | $ | 149,538 | $ | 151,907 | $ | 592,458 | $ | 627,833 | |||||||||||
| Securities: | |||||||||||||||||||||||||
| Taxable | 9,302 | 8,459 | 9,104 | 9,648 | 10,406 | 36,513 | 40,990 | ||||||||||||||||||
| Tax-exempt | 3,339 | 3,383 | 3,439 | 3,501 | 3,511 | 13,662 | 14,193 | ||||||||||||||||||
| Dividends | 1,628 | 2,108 | 2,134 | 1,765 | 1,649 | 7,635 | 5,258 | ||||||||||||||||||
| Short-term investments | 23 | 24 | 23 | 19 | 21 | 89 | 108 | ||||||||||||||||||
| Total interest income | 161,449 | 161,735 | 162,702 | 164,471 | 167,494 | 650,357 | 688,382 | ||||||||||||||||||
| Interest Expense: | |||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||
| Interest-bearing demand and savings | 5,313 | 4,256 | 4,031 | 3,962 | 4,202 | 17,562 | 17,806 | ||||||||||||||||||
| Time | 10,699 | 10,803 | 10,246 | 9,628 | 9,597 | 41,376 | 42,712 | ||||||||||||||||||
| Federal Home Loan Bank short-term borrowings | 4,455 | 4,554 | 4,597 | 4,621 | 4,449 | 18,227 | 15,187 | ||||||||||||||||||
| Other short-term borrowings | 2,066 | 2,091 | 2,031 | 2,100 | 2,146 | 8,288 | 8,694 | ||||||||||||||||||
| Federal Home Loan Bank long-term borrowings | 210 | 247 | 243 | 245 | 254 | 945 | 1,142 | ||||||||||||||||||
| Other long-term debt | 3,322 | 3,319 | (140 | ) | 3,851 | 4,158 | 10,352 | 16,901 | |||||||||||||||||
| Total interest expense | 26,065 | 25,270 | 21,008 | 24,407 | 24,806 | 96,750 | 102,442 | ||||||||||||||||||
| Net interest income | 135,384 | 136,465 | 141,694 | 140,064 | 142,688 | 553,607 | 585,940 | ||||||||||||||||||
| Provision for loan and lease losses | 7,200 | 9,000 | 3,000 | 6,000 | 2,000 | 25,200 | 31,000 | ||||||||||||||||||
| Net interest income, after provision for loan and lease losses | 128,184 | 127,465 | 138,694 | 134,064 | 140,688 | 528,407 | 554,940 | ||||||||||||||||||
| Noninterest Income: | |||||||||||||||||||||||||
| Service charges on deposit accounts | 9,260 | 9,561 | 9,294 | 9,000 | 9,456 | 37,115 | 36,989 | ||||||||||||||||||
| Vehicle origination and servicing fees | 1,886 | 1,691 | 2,915 | 2,968 | 3,057 | 9,460 | 11,725 | ||||||||||||||||||
| Wealth management commissions and fees | 13,163 | 13,199 | 12,669 | 12,719 | 13,048 | 51,750 | 51,333 | ||||||||||||||||||
| Commissions on property and casualty insurance sales | 3,676 | 3,992 | 4,214 | 5,666 | 4,023 | 17,548 | 16,797 | ||||||||||||||||||
| Other commissions and fees | 5,877 | 5,689 | 5,401 | 5,035 | 5,077 | 22,002 | 18,991 | ||||||||||||||||||
| Income from bank-owned life insurance | 1,537 | 1,634 | 1,672 | 1,637 | 1,492 | 6,480 | 6,013 | ||||||||||||||||||
| Mortgage banking revenue | 2,489 | 2,432 | 3,004 | 2,410 | 2,483 | 10,335 | 12,828 | ||||||||||||||||||
| Capital markets revenue | 2,437 | 1,593 | 877 | 1,240 | 3,216 | 6,147 | 7,485 | ||||||||||||||||||
| Net realized gain (loss) on sales of securities | 125 | 0 | 3,293 | (8 | ) | (1,343 | ) | 3,410 | (1,394 | ) | |||||||||||||||
| Realized gain on sale of branch properties | 0 | 0 | 0 | 0 | 4,945 | 0 | 4,945 | ||||||||||||||||||
| Other | 6,138 | 4,826 | 2,010 | 1,422 | 5,212 | 14,396 | 18,017 | ||||||||||||||||||
| Total noninterest income | 46,588 | 44,617 | 45,349 | 42,089 | 50,666 | 178,643 | 183,729 | ||||||||||||||||||
| Noninterest Expenses: | |||||||||||||||||||||||||
| Salaries and employee benefits | 74,806 | 68,042 | 68,325 | 65,581 | 70,837 | 276,754 | 262,638 | ||||||||||||||||||
| Occupancy | 12,262 | 12,089 | 11,914 | 13,847 | 11,727 | 50,112 | 45,448 | ||||||||||||||||||
| Furniture and equipment | 4,076 | 4,043 | 4,058 | 3,944 | 3,865 | 16,121 | 14,851 | ||||||||||||||||||
| Professional and technology services | 7,122 | 6,168 | 7,189 | 6,070 | 6,404 | 26,549 | 25,137 | ||||||||||||||||||
| Advertising and marketing | 3,459 | 3,784 | 3,567 | 3,576 | 3,618 | 14,386 | 12,054 | ||||||||||||||||||
| FDIC insurance | 4,833 | 5,038 | 4,925 | 5,121 | 6,118 | 19,917 | 19,878 | ||||||||||||||||||
| Legal fees | 1,918 | 1,699 | 1,656 | 1,527 | 1,968 | 6,800 | 7,422 | ||||||||||||||||||
| Amortization of intangible assets | 2,211 | 2,220 | 2,367 | 2,539 | 2,803 | 9,337 | 11,626 | ||||||||||||||||||
| Vehicle lease disposal | 2,282 | 2,222 | 2,215 | 2,251 | 1,216 | 8,970 | 5,012 | ||||||||||||||||||
| Merger related | 885 | 0 | 0 | 0 | 0 | 885 | 0 | ||||||||||||||||||
| Branch consolidation costs | 0 | 0 | 0 | 0 | 6,603 | 0 | 6,603 | ||||||||||||||||||
| Other | 16,616 | 19,106 | 19,009 | 18,576 | 20,513 | 73,307 | 80,171 | ||||||||||||||||||
| Total noninterest expenses | 130,470 | 124,411 | 125,225 | 123,032 | 135,672 | 503,138 | 490,840 | ||||||||||||||||||
| Income before income taxes | 44,302 | 47,671 | 58,818 | 53,121 | 55,682 | 203,912 | 247,829 | ||||||||||||||||||
| Provision for income taxes | 13,978 | 14,203 | 15,324 | 15,959 | 14,341 | 59,464 | 74,150 | ||||||||||||||||||
| Net Income | $ | 30,324 | $ | 33,468 | $ | 43,494 | $ | 37,162 | $ | 41,341 | $ | 144,448 | $ | 173,679 | |||||||||||
| Earnings per common share: | |||||||||||||||||||||||||
| Basic | $ | 0.17 | $ | 0.18 | $ | 0.23 | $ | 0.20 | $ | 0.22 | $ | 0.78 | $ | 0.93 | |||||||||||
| Diluted | $ | 0.17 | $ | 0.18 | $ | 0.23 | $ | 0.20 | $ | 0.22 | $ | 0.78 | $ | 0.92 | |||||||||||
| Cash dividends per common share | $ | 0.09 | $ | 0.09 | $ | 0.08 | $ | 0.08 | $ | 0.08 | $ | 0.34 | $ | 0.24 | |||||||||||
| Average common shares outstanding: | |||||||||||||||||||||||||
| Basic | 181,514 | 184,985 | 187,637 | 187,455 | 187,186 | 185,380 | 186,927 | ||||||||||||||||||
| Diluted | 182,387 | 185,724 | 188,295 | 188,378 | 188,078 | 186,258 | 187,835 | ||||||||||||||||||
Susquehanna Bancshares, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||
26 North Cedar Street | ||||||||||||||||||||||||||||||||||||||||||||||||||
Lititz, PA 17543 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest rates and interest differential-taxable equivalent basis | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | Twelve Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2014 | September 30, 2014 | December 31, 2013 | December 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||
| Average | Average | Average | Average | Average | ||||||||||||||||||||||||||||||||||||||||||||||
| Balance | Interest | Rate (%) | Balance | Interest | Rate (%) | Balance | Interest | Rate (%) | Balance | Interest | Rate (%) | Balance | Interest | Rate (%) | ||||||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Short-term investments | $ | 84,088 | $ | 23 | 0.11 | $ | 79,640 | $ | 24 | 0.12 | $ | 86,088 | $ | 20 | 0.09 | $ | 81,886 | $ | 89 | 0.11 | $ | 96,825 | $ | 108 | 0.11 | |||||||||||||||||||||||||
| Investment securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Taxable(1) | 2,060,163 | 10,930 | 2.10 | 1,915,888 | 10,567 | 2.19 | 2,227,191 | 12,055 | 2.15 | 2,026,334 | 44,147 | 2.18 | 2,182,121 | 46,248 | 2.12 | |||||||||||||||||||||||||||||||||||
| Tax-exempt(1)(2) | 371,434 | 5,135 | 5.48 | 377,414 | 5,205 | 5.47 | 389,616 | 5,403 | 5.50 | 379,783 | 21,018 | 5.53 | 395,086 | 21,835 | 5.53 | |||||||||||||||||||||||||||||||||||
| Total investment securities | 2,431,597 | 16,065 | 2.62 | 2,293,302 | 15,772 | 2.73 | 2,616,807 | 17,458 | 2.65 | 2,406,117 | 65,165 | 2.71 | 2,577,207 | 68,083 | 2.64 | |||||||||||||||||||||||||||||||||||
| Loans and leases, (net): | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Taxable(3) | 13,011,088 | 143,336 | 4.37 | 13,067,543 | 144,248 | 4.38 | 13,003,680 | 148,469 | 4.53 | 13,092,042 | 578,135 | 4.42 | 12,772,845 | 614,158 | 4.81 | |||||||||||||||||||||||||||||||||||
| Tax-exempt(2)(3) | 427,406 | 5,880 | 5.46 | 432,143 | 5,405 | 4.96 | 417,794 | 5,289 | 5.02 | 433,074 | 22,037 | 5.09 | 416,654 | 21,038 | 5.05 | |||||||||||||||||||||||||||||||||||
| Total loans and leases | 13,438,494 | 149,216 | 4.41 | 13,499,686 | 149,653 | 4.40 | 13,421,474 | 153,758 | 4.55 | 13,525,116 | 600,172 | 4.44 | 13,189,499 | 635,196 | 4.82 | |||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 15,954,179 | 165,304 | 4.11 | 15,872,628 | 165,449 | 4.14 | 16,124,369 | 171,236 | 4.21 | 16,013,119 | 665,426 | 4.16 | 15,863,531 | 703,387 | 4.43 | |||||||||||||||||||||||||||||||||||
| Allowance for loan and lease losses | (137,293 | ) | (144,674 | ) | (165,298 | ) | (148,465 | ) | (176,782 | ) | ||||||||||||||||||||||||||||||||||||||||
| Other non-earning assets | 2,811,323 | 2,683,575 | 2,478,883 | 2,604,039 | 2,514,410 | |||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 18,628,209 | $ | 18,411,529 | $ | 18,437,954 | $ | 18,468,693 | $ | 18,201,159 | ||||||||||||||||||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing demand | $ | 6,558,482 | 5,025 | 0.30 | $ | 6,165,175 | 3,970 | 0.26 | $ | 6,058,107 | 3,915 | 0.26 | $ | 6,189,947 | 16,397 | 0.26 | $ | 5,968,726 | 16,661 | 0.28 | ||||||||||||||||||||||||||||||
| Savings | 1,134,827 | 288 | 0.10 | 1,131,551 | 286 | 0.10 | 1,075,598 | 286 | 0.11 | 1,125,299 | 1,166 | 0.10 | 1,070,248 | 1,144 | 0.11 | |||||||||||||||||||||||||||||||||||
| Time | 3,984,083 | 10,699 | 1.07 | 4,133,949 | 10,803 | 1.04 | 3,791,625 | 9,597 | 1.00 | 4,040,076 | 41,375 | 1.02 | 3,833,262 | 42,713 | 1.11 | |||||||||||||||||||||||||||||||||||
| Other short-term borrowings | 535,633 | 2,066 | 1.53 | 541,363 | 2,091 | 1.53 | 671,923 | 2,146 | 1.27 | 575,894 | 8,288 | 1.44 | 743,718 | 8,695 | 1.17 | |||||||||||||||||||||||||||||||||||
| FHLB borrowings | 914,287 | 4,666 | 2.02 | 961,483 | 4,801 | 1.98 | 1,502,120 | 4,704 | 1.24 | 1,107,675 | 19,173 | 1.73 | 1,247,209 | 16,329 | 1.31 | |||||||||||||||||||||||||||||||||||
| Long-term debt(4) | 354,179 | 3,321 | 3.72 | 358,502 | 3,319 | 3.67 | 455,787 | 4,158 | 3.62 | 389,727 | 10,351 | 2.66 | 483,888 | 16,900 | 3.49 | |||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 13,481,491 | 26,065 | 0.77 | 13,292,023 | 25,270 | 0.75 | 13,555,160 | 24,806 | 0.73 | 13,428,618 | 96,750 | 0.72 | 13,347,051 | 102,442 | 0.77 | |||||||||||||||||||||||||||||||||||
| Demand deposits | 1,976,246 | 1,964,572 | 1,881,173 | 1,910,810 | 1,905,502 | |||||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 412,539 | 379,148 | 322,379 | 369,122 | 302,267 | |||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | 15,870,276 | 15,635,743 | 15,758,712 | 15,708,550 | 15,554,820 | |||||||||||||||||||||||||||||||||||||||||||||
| Equity | 2,757,933 | 2,775,786 | 2,679,242 | 2,760,143 | 2,646,339 | |||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities & shareholders' equity | $ | 18,628,209 | $ | 18,411,529 | $ | 18,437,954 | $ | 18,468,693 | $ | 18,201,159 | ||||||||||||||||||||||||||||||||||||||||
Net interest income / yield on average earning assets | $ | 139,239 | 3.46 | $ | 140,179 | 3.50 | $ | 146,430 | 3.60 | $ | 568,676 | 3.55 | $ | 600,945 | 3.79 | |||||||||||||||||||||||||||||||||||
| Taxable equivalent adjustment | (3,855 | ) | (3,714 | ) | (3,742 | ) | (15,069 | ) | (15,005 | ) | ||||||||||||||||||||||||||||||||||||||||
| Net interest income - as reported | $ | 135,384 | $ | 136,465 | $ | 142,688 | $ | 553,607 | $ | 585,940 | ||||||||||||||||||||||||||||||||||||||||
(1) | For presentation in this table, average balances and the corresponding average rates for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts. | |
(2) | Tax-exempt income has been adjusted to a tax-equivalent basis using a marginal tax rate of 35%. | |
(3) | Average loan balances include non-accrual loans. | |
(4) | Includes $3.7 million purchase accounting adjustment on redemption of junior subordinated debt in second quarter of 2014. | |
Susquehanna Bancshares, Inc. | ||||||||||||||||||||||||||||
26 North Cedar Street | ||||||||||||||||||||||||||||
Lititz, PA 17543 | ||||||||||||||||||||||||||||
| Appendix A - GAAP to Non-GAAP Reconciliation | Twelve Months Ended | |||||||||||||||||||||||||||
| (Dollars and share data in thousands) | December | |||||||||||||||||||||||||||
| 4Q14 | 3Q14 | 2Q14 | 1Q14 | 4Q13 | 2014 | 2013 | ||||||||||||||||||||||
Efficiency Ratio | ||||||||||||||||||||||||||||
| Other expense | $ | 130,470 | $ | 124,411 | $ | 125,225 | $ | 123,032 | $ | 135,672 | $ | 503,138 | $ | 490,840 | ||||||||||||||
| Less: Merger related expenses | 0 | 0 | 0 | 0 | 0 | (885 | ) | 0 | ||||||||||||||||||||
| Noninterest operating expense (numerator) | $ | 130,470 | $ | 124,411 | $ | 125,225 | $ | 123,032 | $ | 135,672 | $ | 502,253 | $ | 490,840 | ||||||||||||||
| Taxable-equivalent net interest income | $ | 139,239 | $ | 140,179 | $ | 145,447 | $ | 143,813 | $ | 146,430 | 568,676 | $ | 600,945 | |||||||||||||||
| Other income | 46,588 | 44,617 | 45,349 | 42,089 | 50,666 | 178,643 | 183,729 | |||||||||||||||||||||
| Noninterest operating income (denominator) | $ | 185,827 | $ | 184,796 | $ | 190,796 | $ | 185,902 | $ | 197,096 | $ | 747,319 | $ | 784,674 | ||||||||||||||
| Efficiency ratio | 70.21 | % | 67.32 | % | 65.63 | % | 66.18 | % | 68.84 | % | 67.21 | % | 62.55 | % | ||||||||||||||
| The efficiency ratio is a non-GAAP based financial measure. Management excludes merger-related expenses and certain other selected items when calculating this ratio, which is used to measure the relationship of operating expenses to revenues. | ||||||||||||||||||||||||||||
Tangible Common Ratio | ||||||||||||||||||||||||||||
| End of period balance sheet data | ||||||||||||||||||||||||||||
| Shareholders' equity | $ | 2,753,925 | $ | 2,751,260 | $ | 2,796,392 | $ | 2,755,199 | $ | 2,717,587 | $ | 2,753,925 | $ | 2,717,587 | ||||||||||||||
| Goodwill and other intangible assets (1) | (1,265,178 | ) | (1,265,598 | ) | (1,265,846 | ) | (1,266,403 | ) | (1,264,839 | ) | (1,265,178 | ) | (1,264,839 | ) | ||||||||||||||
| Tangible common equity (numerator) | $ | 1,488,747 | $ | 1,485,662 | $ | 1,530,546 | $ | 1,488,796 | $ | 1,452,748 | $ | 1,488,747 | $ | 1,452,748 | ||||||||||||||
| Assets | $ | 18,661,390 | $ | 18,583,327 | $ | 18,506,626 | $ | 18,439,682 | $ | 18,473,489 | $ | 18,661,390 | $ | 18,473,489 | ||||||||||||||
| Goodwill and other intangible assets (1) | (1,265,178 | ) | (1,265,598 | ) | (1,265,846 | ) | (1,266,403 | ) | (1,264,839 | ) | (1,265,178 | ) | (1,264,839 | ) | ||||||||||||||
| Tangible assets (denominator) | $ | 17,396,212 | $ | 17,317,729 | $ | 17,240,780 | $ | 17,173,279 | $ | 17,208,650 | $ | 17,396,212 | $ | 17,208,650 | ||||||||||||||
| Tangible common ratio | 8.56 | % | 8.58 | % | 8.88 | % | 8.67 | % | 8.44 | % | 8.56 | % | 8.44 | % | ||||||||||||||
| The tangible common ratio is a non-GAAP based financial measure using non-GAAP based amounts. The most directly comparable GAAP-based measure is the ratio of common shareholders’ equity to total assets. In order to calculate tangible common shareholders equity and assets, our management subtracts the intangible assets from both the common shareholders’ equity and total assets. Tangible common equity is then divided by the tangible assets to arrive at the ratio. Management uses the ratio to assess the strength of our capital position. | ||||||||||||||||||||||||||||
| (1) Net of applicable deferred income taxes | ||||||||||||||||||||||||||||
Return on Average Tangible Equity | ||||||||||||||||||||||||||||
| Income statement data | ||||||||||||||||||||||||||||
| Net income | $ | 30,324 | $ | 33,468 | $ | 43,494 | $ | 37,162 | $ | 41,341 | $ | 144,448 | $ | 173,679 | ||||||||||||||
| Amortization of intangibles, net of taxes at 35% | 1,437 | 1,443 | 1,539 | 1,650 | 1,822 | 6,069 | 7,557 | |||||||||||||||||||||
| Net tangible income (numerator) | $ | 31,761 | $ | 34,911 | $ | 45,033 | $ | 38,812 | $ | 43,163 | $ | 150,517 | $ | 181,236 | ||||||||||||||
| Average balance sheet data | ||||||||||||||||||||||||||||
| Shareholders' equity | $ | 2,757,933 | $ | 2,775,786 | $ | 2,768,665 | $ | 2,726,465 | $ | 2,679,242 | $ | 2,760,143 | $ | 2,646,339 | ||||||||||||||
| Goodwill and other intangible assets | (1,301,750 | ) | (1,303,275 | ) | (1,304,736 | ) | (1,306,298 | ) | (1,308,690 | ) | (1,304,001 | ) | (1,310,928 | ) | ||||||||||||||
| Tangible common equity (denominator) | $ | 1,456,183 | $ | 1,472,511 | $ | 1,463,929 | $ | 1,420,167 | $ | 1,370,552 | $ | 1,456,142 | $ | 1,335,411 | ||||||||||||||
| Return on equity (GAAP basis) | 4.36 | % | 4.78 | % | 6.30 | % | 5.53 | % | 6.12 | % | 5.23 | % | 6.56 | % | ||||||||||||||
| Effect of goodwill and other intangibles | 4.29 | % | 4.63 | % | 6.04 | % | 5.55 | % | 6.37 | % | 5.11 | % | 7.01 | % | ||||||||||||||
| Return on average tangible equity | 8.65 | % | 9.41 | % | 12.34 | % | 11.08 | % | 12.49 | % | 10.34 | % | 13.57 | % | ||||||||||||||
| Return on average tangible equity is a non-GAAP based financial measure calculated using non-GAAP based amounts. The most directly comparable GAAP-based measure is return on average equity. We calculate return on average tangible equity by excluding the balance of intangible assets and their related amortization expense from our calculation of return on average equity. Management uses the return on average tangible equity in order to review our core operating results. Management believes that this is a better measure of our performance. In addition, this is consistent with the treatment by bank regulatory agencies, which excludes goodwill and other intangible assets from the calculation of risk-based capital ratios. | ||||||||||||||||||||||||||||
Tangible Book Value per Common Share | ||||||||||||||||||||||||||||
| End of period balance sheet data | ||||||||||||||||||||||||||||
| Shareholders' equity | $ | 2,753,925 | $ | 2,751,260 | $ | 2,796,392 | $ | 2,755,199 | $ | 2,717,587 | $ | 2,753,925 | $ | 2,717,587 | ||||||||||||||
| Goodwill and other intangible assets | (1,301,014 | ) | (1,302,602 | ) | (1,304,018 | ) | (1,305,742 | ) | (1,307,701 | ) | (1,301,014 | ) | (1,307,701 | ) | ||||||||||||||
| Tangible common equity (numerator) | $ | 1,452,911 | $ | 1,448,658 | $ | 1,492,374 | $ | 1,449,457 | $ | 1,409,886 | $ | 1,452,911 | $ | 1,409,886 | ||||||||||||||
| Common shares outstanding (denominator) | 182,039 | 181,310 | 187,706 | 187,590 | 187,363 | 182,039 | 187,363 | |||||||||||||||||||||
| Tangible book value per common share | $ | 7.98 | $ | 7.99 | $ | 7.95 | $ | 7.73 | $ | 7.52 | $ | 7.98 | $ | 7.52 | ||||||||||||||
| Tangible book value per share is a non-GAAP based financial measure calculated using non-GAAP based amounts. The most directly comparable GAAP based measure is book value per share. In order to calculate tangible book value per share, we divide tangible common equity, which is a non-GAAP based measure calculated as common shareholders’ equity less intangible assets, by the number of shares of common stock outstanding. In contrast, book value per share is calculated by dividing total common shareholders’ equity by the number of shares of common stock outstanding. Management uses tangible book value per share to assess our capital position and ratios. | ||||||||||||||||||||||||||||
Susquehanna Bancshares, Inc. | |||||||||||||||
26 North Cedar Street | |||||||||||||||
Lititz, PA 17543 | |||||||||||||||
| Appendix A - GAAP to Non-GAAP Reconciliation | |||||||||||||||
| 4Q14 | 3Q14 | 2Q14 | 1Q14 | 4Q13 | |||||||||||
Net Interest Margin (excluding purchase accounting) | |||||||||||||||
| Reported net interest margin (GAAP basis) | 3.46 | % | 3.50 | % | 3.63 | % | 3.61 | % | 3.60 | % | |||||
| Adjustments for purchase accounting: | |||||||||||||||
| Loans and leases | -0.12 | % | -0.10 | % | -0.12 | % | -0.17 | % | -0.11 | % | |||||
| Deposits | -0.02 | % | -0.02 | % | -0.03 | % | -0.03 | % | -0.03 | % | |||||
| Borrowings | -0.01 | % | -0.01 | % | -0.10 | % | -0.01 | % | -0.01 | % | |||||
Net Interest Margin (excluding purchase accounting) | 3.31 | % | 3.37 | % | 3.38 | % | 3.40 | % | 3.45 | % | |||||
| Net interest margin (excluding purchase accounting) is a non-GAAP based financial measure using non-GAAP based amounts. The most directly comparable GAAP based measure is net interest margin. In order to calculate net interest margin (excluding purchase accounting) we subtract the effects of amortizing/accreting purchase accounting valuation amounts from net interest income, and divide the remainder by average earning assets. Our management uses net interest margin (excluding purchase accounting) to measure and monitor the impact of the current economic environment on our net interest income and believes that this measure is more representative of our ongoing earnings power because it excludes the effect of valuation variables used to arrive at the acquisition fair value recorded on the acquisition date. We believe this non-GAAP measure, when taken together with the corresponding GAAP measure, provides meaningful supplemental information to investors regarding our performance. However, this non-GAAP measure should be considered in addition to, and not as a substitute for or preferable to, net interest margin prepared in accordance with GAAP. |
