Susquehanna Bancshares Inc. makes wealth management a high priority and is looking for acquisitions like last week’s purchase of a Delaware retirement benefit plan specialist to broaden its capabilities and boost revenue, its CEO said in an interview Friday.
The Lititz, Pa., banking company announced Wednesday that it had bought Brandywine Benefits Corp. and Rockford Pensions LLC, two business lines of a Wilmington, Del., financial planning, consulting, and administration entity called Brandywine that specializes in retirement benefit plans.
“We have brokerage and insurance services, trust and private-client services, retirement, and asset management,” said Susquehanna chairman, president, and CEO William J. Reuter. “It’s attractive to have the ability to offer 401(k) services, and we’ll be competing with everyone — other banks and fund companies.”
“The market competition for this type of business is significant,” Mr. Reuter said. “The pension and 401(k) rollover business is a huge business, and we see a lot of opportunities for IRA rollovers.” “We made a commitment to fully develop our wealth management business, and this is another acquisition that allows us to accomplish that goal,” he added.
Wealth management is an especially attractive business because of the opportunity for growth, he said. Susquehanna had $1.1 billion of assets under management and administration in 1999 but had $5 billion at Dec. 31.
“Last June we acquired Retirement Plan Services, a full-service 401(k) plan administrator,” Mr. Reuter said. “The acquiring of Brandywine allows us to get to the next level of sales efforts and diversify noninterest income.”
Brandywine, which targets small to midsize companies with annual revenues of less than $10 million and up to 150 employees, “fills a service niche in our retirement plan services business,” Mr. Reuter said. The Delaware company has more than 250 customers in the Middle Atlantic states and generates about $1.3 million of annual revenue.
Mr. Reuter declined to specify sales goals for the acquired business but said, “We are looking for the revenues of our wealth management companies to continue into double digits of revenue growth.”
Asked about cross-selling, he said the Brandywine deal would offer opportunities for it. “They have 250 customers in the Mid-Atlantic states. Cross-selling is a never-ending process and never-ending journey for banks.”
Regarding future deals, Mr. Reuter said Susquehanna, a $7.5 billion-asset, multistate financial services holding company, would continue to examine purchases that could enhance the wealth management side of the business, including retirement plan and asset management acquisitions. (The Brandywine deal included the asset-only purchase of a third business line, JFP Strategies.) Susquehanna does not have a timetable for dealmaking and has nothing imminent, he said.
Susquehanna will merge Brandywine Benefits and Rockford Pensions into Valley Forge Asset Management Enterprises LLC, a wholly owned subsidiary of Valley Forge Asset Management in King of Prussia, Pa., its wealth management affiliate.
Brandywine’s employees, including its founders, Margo Johnson and Gary Johnson, are to remain employed by the company.
