Susquehanna Bancshares (SUSQ) in Lititz, Pa., has sold 30 branches to a SunTrust Banks (STI) subsidiary and agreed to lease them back.
Susquehanna's banking unit sold the 30 branch properties to SunTrust Equity Funding for $57.1 million, in a transaction that closed on Dec. 23, it said in a regulatory filing. The $18.4 billion-asset Susquehanna then entered into agreements to lease each of the properties back, at terms of 15 years for 12 of the properties, and 26 years for the remainder.
Susquehanna will record a pretax gain of approximately $37.7 million on the sale, including $4.4 million in the fourth quarter, it said. The remainder of the gain will be spread over the course of the leases. Susquehanna will pay average annual rent of $1.8 million on the 15-year leases, and average rent of $2.5 million on the 26-year leases, it said.
Susquehanna Bank had 279 branches before the sale, according to data from the Federal Deposit Insurance Corp. It did not say where the branches it sold are located.
The branch sale will also allow Susquehanna to release a $4.1 million deferred tax asset, which will reduce its income tax provision in the fourth quarter, it said.
Susquehanna plans to use the money from the sale for general corporate purposes, including the repayment of short-term debt, it said.