-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PNTWLmO7MFQpvBgxeq38Q0Cs/PH0r1ynjsjF+BJWCiH3jRnOxG+juhOUdXQL4X+h y3t7B+BJ68tOVpjm1bmEaw== 0001021408-02-012904.txt : 20021028 0001021408-02-012904.hdr.sgml : 20021028 20021025215625 ACCESSION NUMBER: 0001021408-02-012904 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20021025 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: FILED AS OF DATE: 20021028 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUSQUEHANNA BANCSHARES INC CENTRAL INDEX KEY: 0000700863 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 232201716 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-10674 FILM NUMBER: 02799204 BUSINESS ADDRESS: STREET 1: 26 N CEDAR ST CITY: LITITZ STATE: PA ZIP: 17543 BUSINESS PHONE: 7176264721 MAIL ADDRESS: STREET 2: 26 NORTH CEDAR ST CITY: LITITZ STATE: PA ZIP: 17543 8-K 1 d8k.txt FORM 8-K DATED OCTOBER 25, 2002 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): October 25, 2002 -------------------- SUSQUEHANNA BANCSHARES, INC. ------------------------------------- (Exact Name of Registrant Specified in Charter) Pennsylvania 0-10674 23-2201716 -------------------- --------------------- -------------- (State or Other (Commission File (I.R.S. Employer Jurisdiction of Number) Identification No.) Incorporation) 26 North Cedar Street, Lititz, Pennsylvania 17543 - ---------------------------------------------------- -------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (717) 626-4721 -------------- Not Applicable ------------------------------------------------------ (Former Name or Former Address, if Changed Since Last Report) Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (a) Financial Statements of Business Acquired: None (b) Pro Forma Financial Information: None (c) Exhibits: 99.1 Certain information that will be disclosed by Susquehanna in a proposed private placement of subordinated debt securities. 99.2 Press release, dated October 22, 2002 (incorporated herein by reference to the Registrant's Current Report on Form 8-K as filed with the SEC on October 23, 2002). Item 9. Regulation FD Disclosure. Susquehanna Bancshares, Inc. ("Susquehanna") is pursuing a $75 million private placement of subordinated notes. It is expected that most of the proceeds from the offering would be used to repay $50.0 million of maturing long-term senior indebtedness when due in 2003, while the remaining proceeds would be used for general corporate purposes. The notes will be sold in a private placement and resold by the initial purchasers under Rule 144A of the Securities Act of 1933, as amended (the "Securities Act"), and offers will be made only to qualified institutional buyers and to investors in transactions exempt from registration under Regulation S under the Securities Act. In connection with the offer of the subordinated notes, Susquehanna anticipates disclosing to prospective purchasers of the subordinated notes certain information. Susquehanna has elected to provide certain of this information in this Current Report on Form 8-K as Exhibit 99.1 for informational purposes. None of the information contained in this Form 8-K or the exhibits hereto should be deemed to be filed under the Securities Exchange Act of 1934, as amended, or incorporated by reference into any other filings Susquehanna has made or may make pursuant to the Securities Act or into any other documents unless such portion of this Current Report on Form 8-K is expressly and specifically identified in such filing as being incorporated by reference therein. No assurance can be made that the private placement of subordinated notes will be completed. Susquehanna presently expects to complete the private placement of subordinated notes at the beginning of November 2002. The subordinated notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This Current Report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale of any securities in any jurisdiction in which such offer or sale would be unlawful. This Current Report on Form 8-K and the documents incorporated by reference herein contain express and implied statements relating to the future financial condition, results of operations, plans, objectives, performance and business of Susquehanna, which are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements that relate to, among other things, profitability, liquidity, loan loss reserve adequacy, plans for growth, interest rate sensitivity, market risk, regulatory compliance and financial and other goals. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among other things: . adverse changes in our loan and lease portfolios and the resulting credit risk-related losses and expenses; -2- . interest rate fluctuations and other economic conditions; . continued levels of our loan quality and origination volume; . the adequacy of loss reserves; . our ability to attract core deposits; . continued relationships with major customers; . adverse changes in the economy that could increase credit-related losses and expenses; . compliance with laws and regulatory requirements of federal and state agencies; . changes in competition and pricing environments; . the inability to hedge certain risks economically; . acquisitions or restructuring; . technological changes; . changes in consumer spending and saving habits; . our success in managing the risks involved in the foregoing; and . other risks and uncertainties detailed from time to time in our filings with the SEC. Although the expectations in the forward-looking statements are based on our current beliefs and expectations, Susquehanna does not assume responsibility for the accuracy and completeness of such statements. Further, Susquehanna is under no duty to update any of the forward-looking statements after the date of this Current Report to conform such statements to actual results. -3- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SUSQUEHANNA BANCSHARES, INC. (Registrant) By: /s/ Drew K. Hostetter --------------------------------- Drew K. Hostetter Executive Vice President & CFO Dated: October 25, 2002 Exhibit Index Exhibit 99.1 Certain information that will be disclosed by Susquehanna in a proposed private placement of subordinated debt securities. 99.2 Press release, dated October 22, 2002 (incorporated herein by reference to the Registrant's Current Report on Form 8-K as filed with the SEC on October 23, 2002). EX-99.1 3 dex991.txt REGULATION FD DISCLOSURE Exhibit 99.1 The following information will be disclosed by Susquehanna in a proposed private placement of subordinated notes. As a financial holding company with operations in multiple states, our strategy has been to manage our subsidiaries on a local community basis and to allow each subsidiary operating in different markets to retain its name and board of directors. We believe that this strategy differentiates us from other large competitors because it enables our subsidiaries greater flexibility to better serve their markets and increase responsiveness to the needs of local customers. We continue, however, to implement consolidations in selected lines of business, operations and support functions in order to achieve greater economies of scale and cost savings. We also provide our banking subsidiaries guidance in the areas of credit policy and administration, risk assessment, investment advisory administration, strategic planning, investment portfolio management, asset liability management, liquidity management and other financial and administrative services. Our bank subsidiaries operate as an extensive branch network and maintain a strong market presence in our primary markets. As of June 30, 2002, core deposits funded 76% of our lending and investing activities. The chart below reflects the total assets, loans and deposits of our banking operations in each of our primary markets:
Percent Percent Percent Assets of Total Loans of Total Deposits of Total ------ -------- ----- -------- -------- -------- (dollars in millions) Central Pennsylvania ....................... $2,009 40.3% $1,445 40.5% $1,456 40.0% Suburban Philadelphia and Southern New Jersey ..................................... 626 12.6 407 11.4 530 14.5 Suburban Baltimore and Central Maryland .... 1,144 23.0 928 26.0 742 20.4 Western Maryland and Southwestern Pennsylvania ............................... 1,200 24.1 789 22.1 915 25.1 ------ ----- ------ ----- ------ ----- Total .................................... $4,979 100.0% $3,569 100.0% $3,643 100.0% ====== ===== ====== ===== ====== =====
We are managed from a long-term perspective with financial objectives that emphasize loan quality, balance sheet liquidity and earnings stability. Consistent with this approach, we emphasize a low-risk loan portfolio derived from our local markets. In addition, we focus on not having any portion of our business dependent upon a single customer or limited group of customers or a substantial portion of our loans or investments concentrated within a single industry or a group of related industries. Our net charge-offs over the past five years have averaged 0.20% of total loans and leases. As of June 30, 2002, our total loans and leases (net) in dollars and by percentage were as follows: (dollars in millions) Commercial, financial and agricultural ... $ 452 12.1% Real estate - construction ............... 408 10.9 Real estate secured - residential ........ 1,178 31.5 Real estate secured - commercial ......... 941 25.2 Consumer ................................. 339 9.1 Leases ................................... 419 11.2 -------- ----- Total loans and leases .............. $ 3,737 100.0% ======== ===== Also as of June 30, 2002, we held $1.0 billion in investment securities with an average life of less than two years, including U.S. Treasuries, U.S. government agency securities and mortgage-backed securities. The following table sets forth information, for the six months ended June 30, 2002, regarding our bank subsidiaries and our non-bank subsidiaries that as of June 30, 2002 had annualized revenues in excess of $5.0 million:
Percent Percent Percent Subsidiary Assets of Total Revenues/(1)/ of Total Net Income of Total - ---------- ------ -------- -------- -------- ---------- -------- (dollars in thousands) Central Pennsylvania: Farmers First Bank ............ $1,387,130 26.3% $ 32,355 23.4% $ 10,703 35.2% First Susquehanna Bank & Trust ...................... 333,734 6.3 7,594 5.5 1,885 6.2 WNB Bank ...................... 287,723 5.4 7,526 5.4 2,606 8.6 Suburban Philadelphia and Southern New Jersey: Equity Bank/(2)/ .............. 626,003 11.9 20,415 14.7 3,928 12.9 Suburban Baltimore and Central Maryland: Susquehanna Bank .......... 1,143,821 21.7 19,402 14.1 4,203 13.8 Western Maryland and Southwestern Pennsylvania: Farmers and Merchants Bank & Trust ...................... 774,833 14.7 17,798 12.9 3,849 12.6 Citizens Bank of Southern Pennsylvania ............... 230,091 4.4 5,135 3.7 1,097 3.6 First American Bank of Pennsylvania ............... 194,706 3.7 4,206 3.0 1,076 3.6 Non-Bank Subsidiaries: Susquehanna Trust & Investment Company ......... 2,638 -- 2,651 1.9 102 0.3 Valley Forge Asset Management Corp ............ 20,583 0.4 4,301 3.1 705 2.3 Boston Service Company, Inc. (t/a Hann Financial Service Corp.) ............. 476,705 9.0 17,044 12.3 2,713 8.9 The Addis Group, Inc./(3)/ .... 22,001 0.4 -- -- -- -- Consolidation adjustments and other non-bank subsidiaries ............... (222,711) 4.2 -- -- (2,428) 8.0 ---------- ----- ---------- ----- ----------- ----- TOTAL .................... $5,277,257 100.0% $ 138,427 100.0% $ 30,439 100.0% ========== ===== ========== ===== =========== =====
- -------------------- /(1)/ Revenue equals net interest income and other income. /(2)/ Includes the results of our subsidiary Founders' Bank, which was merged into Equity Bank on August 2, 2002. /(3)/ The Addis Group, Inc. was acquired on June 28, 2002. Accordingly no revenues or income are recorded on this schedule. Adverse economic and business conditions in our market area may have an adverse effect on our earnings. Substantially all of our business is with customers located within Pennsylvania, Maryland and New Jersey. Generally, we make loans to small to mid-sized businesses whose success depends on the regional economy. These businesses generally have fewer financial resources in terms of capital or borrowing capacity than larger entities. Adverse economic and business conditions in our market area could reduce our growth rate, affect our borrowers' ability to repay their loans and, consequently, adversely affect our financial condition and performance. For example, a loss of market confidence in vehicle leasing paper could have a negative effect on our vehicle leasing subsidiary's ability to fund future vehicle lease originations. If this should occur, our vehicle leasing subsidiary's revenues and earnings would be adversely affected. Further, we place substantial reliance on real estate as collateral for our loan portfolio. A sharp downturn in real estate values in our market area could leave many of our loans inadequately collateralized. If we are required to liquidate the collateral securing a loan to satisfy the debt during a period of reduced real estate values, our earnings could be adversely affected. CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
As of / For the As of / For the Six Months Ended June 30, Year Ended December 31, ------------------------- --------------------------------------------- 2002 2001 2001 2000 1999 1998 1997 ---- ---- ---- ---- ---- ---- ---- Earnings to Fixed Charges: Excluding Interest on Deposits... 2.7x 2.3x 2.3x 2.1x 1.9x 2.1x 2.6x Including Interest on Deposits... 1.7 1.4 1.5 1.4 1.4 1.4 1.4
For purposes of computing the above ratios, earnings represent net income from continuing operations plus total taxes based on income and fixed charges. Fixed charges, excluding interest on deposits, include interest expense (other than on deposits), one third (the proportion deemed representative of the interest factor) of rents, net of income from subleases and capitalized interest. Fixed charges, including interest on deposits, include all interest expense, one third (the proportion deemed representative of the interest factor) of rents, net of income from subleases and capitalized interest. -----END PRIVACY-ENHANCED MESSAGE-----