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Susquehanna Bancshares reports weaker net income

April 28, 2005|by DANIEL J. SERNOVITZ

daniels@herald-mail.com

Susquehanna Bancshares Inc. of Lititz, Pa., reported weaker net income and share prices for the first quarter of 2005, despite gains in several areas of its business, due to more competitive auto financing rates offered by U.S. auto manufacturers, company officials said.

The financial holding company, which operates Susquehanna Bank locally, released its first quarter earnings Tuesday.

William J. Reuter, chairman, president and chief executive officer of Susquehanna, said the company's automobile leasing subsidiary was hurt by more attractive financing offers made by major auto manufacturers with whom Susquehanna could not compete. He said he expects the business will be more profitable as auto manufacturers begin offering higher-interest financing this season.

Susquehanna reported a $2 million decrease in vehicle fee income for the quarter. The company's net income fell 3.3 percent, from $15.9 million or 40 cents a share, in the first quarter of 2004, to $15.4 million, or 33 cents a share, this year.

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Reuter said he is encouraged by the company's other operations, including the consolidation of subsidiary banks into three brands including Susquehanna Bank in Hagerstown.

"That bank continues to do very well. It has the No. 1 market share in terms of deposits in the county," Reuter said.

Susquehanna rebranded its local banks, including Farmers & Merchants Bank and Trust and Citizens Bank of Southern Pennsylvania, as Susquehanna Bank on April 15 as part of a larger consolidation from seven different bank names.

Susquehanna Bank, now based in Hagerstown, operates 58 branches in the state with $2.8 billion in combined assets. Susquehanna Bank PA and Susquehanna Patriot Bank are the other two brands created by the consolidation.

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