Thursday, January 27, 2011

Susquehanna Bancshares' (NASDAQ:SUSQ) Progress Continues

Susquehanna Bancshares (NASDAQ:SUSQ) is emerging strongly from the recession, and with the acquisition of Abington Bancorp, seems positioned to grow again, as they continue to trade at a discount to peers.

FBR says, "In addition to strong quarterly performance, SUSQ announced the acquisition of Abington Bancorp, which adds 20 branches in metro Philadelphia and approximately $1.2 billion in assets. We consider the 1.3x tangible book value multiple reasonable for the acquisition. We were encouraged by the fourth quarter's continued improvement in credit metrics, as NPAs decreased for the third quarter in a row, charge-offs remained flat, and credit costs declined. Susquehanna has now repaid TARP, its credit metrics are improving, and it has begun to make reasonably priced acquisitions, yet shares trade at a discount to peers. We raise our 2011 operating EPS estimate to $0.50 (from $0.40) and our 2012 operating EPS estimate to $0.80 (from $0.75), largely to reflect stronger net interest income."

FBR Capital maintains an "Outperform" rating on Susquehanna Bancshares (SUSQ), which was trading at $9.41, down $0.29, or 2.99 percent, as of 2:03 PM EST. FBR raised their price target on Susquehanna from $10 to $11.

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