SUSQ

Susquehanna Bancshares, Inc. (SUSQ)

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Susquehanna Bancshares, Inc. (SUSQ)

Company Conference Presentation

February 13, 2013 01:45 p.m. ET

Executives

William Reuter – Chairman & CEO

Drew Hostetter – EVP & CFO

Analysts

Presentation

Matt

Next step we have Susquehanna Bancshares with us today. This is a $18 billion in asset, Mid-Atlantic franchise based in Pennsylvania, we got number one deposit market share in Pennsylvania, New Jersey and Maryland footprint, they’ve been very active coming out of the financial crisis, they have done two bank acquisitions in the affluent Philadelphia suburbs, which is help them to strengthen the balance sheet, improve profitability and their growth, their organic growth outlook. We’ve done a number of things in recent again kind of coming out of the crisis, they repaid tarp, they did the Abington acquisition, the tower acquisition and have also been able to remix the funding as well. So, with that let me, very happy to have Bill Reuter here with us, CEO and CFO to host that. Let me turn it over to Bill. Thanks.

William Reuter

Okay, thanks. Thank you, Matt. And good afternoon everybody again my name is Bill Reuter, I’m Chairman and Chief Executive Officer of Susquehanna. Joining me is over to my right is to host that are our Chief Financial Officer. Thank you for joining us this afternoon. And thank you for your interest in our company. We’re grateful for the opportunity to share the Susquehanna story with you.

As a reminder of the presentation they include forward looking statements reflect our current expectations and projections of variety of factors can effect the results causing and to differ materially from our expectations. Script for these factors is included in our filings with the SEC.

So, let’s start talking a little bit about Susquehanna, it’s the high level overview of our company and for those who might not be familiar with us. We are regional super community bank of about $18 billion in assets, headquarter in Lancaster, Pennsylvania, Lancaster Pennsylvania, 260 offices in Pennsylvania, New Jersey, Maryland and West Virginia. We are now the 31st largest bank in the United States.

Our management team brings well experience to our organization. We lived and worked in all these markets for many years, have a deep knowledge and understanding of the areas where we do business as well as customers and their needs. In addition to commercial and retail banking, we have a high quality wealth management business worth about $7.6 billion in assets under management and administration. This business is located in Valley Forge, Pennsylvania and operates as Valley Forge Asset Management and Stratton Management Company.

Additionally, we operate a risk management and insurance agency, our commercial finance in vehicle leasing business. One of our strengths of our franchise is a scale we’ve achieved in Mid-Atlantic region, in markets where we do business, we are the largest locally owned community banks, we are able to provide the personalized service of acuity bank backed by the scale and diverse resources of a large financial service company. We believe that this distinction makes us a key player for future growth in the region where customers want new business for people they know and we have the ability to make decisions locally.

Our branch network, diverged product offerings and strong presence, this all position us stake market share from competitors. And we’ve been successful in doing just that as we have increased our market share in 14 out of 22 MSAs from 2011 to 2012.

Before discussing our future prospects, I’d like to briefly highlight some recent performance. And for 2012, Susquehanna was a year of future growth and transition that yield strong performance at the same time. Early in 2012, we just disclosed 4 strategic goals as our main focus for that year namely continuing improvement in credit quality, completing the acquisition and integration of tower, bank or growing loans, deposits and revenues and increasing profitability and shareholder dividends.

And as you can see from some of the highlights on this slide, this focus yielded just terrific results. Our credit team has worked diligently through this recent cycle, non performing assets are now less than 1% of total loans, leases and foreclosed not real estate down from a 188 basis points a year earlier.

Net charge-offs were just 55 basis points for 2012 compared to 116 basis points in 2011. The second of our major objectives for 2012 was the integration of Tower Bancorp. The Tower merger occurred in February of 2012 just about a year ago now followed quickly on the heals of our acquisition of Abington Bancorp in October 2011. These two acquisitions added about $2.6 billion in loans and $2.9 billion in deposits as well as about $440 million in assets under management.

Our system in branch conversion occurred immediately upon the effective date of each merger. The acquisitions strengthened our core markets in Central Pennsylvania and also add a critical mass in the Philadelphia metro market where we are now operating more than 60 branches with over a $3 billion in deposits nearly doubling our company’s presence in the Philadelphia region.

In addition, we exceeded our targeted $30 million in cost and cost savings from Tower acquisition which combined with cost save from Abington and efficiency project, what I call core Susquehanna help us achieve about $15 million in cost saves in less than a year.

In conjunction with entire acquisition, we adopted a regional leadership structure to keep much of the decision making as local as possible and maintain strong connections to the community, this structure was key to success, we achieved in growing loans, deposits and revenues, excluding the loans acquired in the merger we grew with the loan portfolio about $471 million, in 2012 we are about 4.5% organically.

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