UPDATE: J.P. Morgan Reiterates Neutral Rating, Lowers PT on Susquehanna Bancshares

In a report published Monday, J.P. Morgan & Co. reiterated its Neutral rating on Susquehanna Bancshares

, but slightly lowered its price target from $11.50 to $11.00. J.P. Morgan noted, “Following a strong upside surprise in 1Q, results were more in line with expectations in 2Q, with two exceptions – NIM and loan growth. The company's NIM was stronger than expected (up 16 bps q/q) tied to purchase accounting accretion. Notably, core NIM compression of 3 bps was better than the 6 bps compression seen at peers in the quarter. Looking to 2013, the company still expects NIM in 3.85% range. On the loan growth front, organic growth was weaker than expected tied to paydowns, particularly on the construction book. Here again, the company sees no real change to its outlook for 2013 with loan growth expected in the 4% range. With NIM compression (excluding the impact of accelerated accretion this quarter) from current levels in line with what we expect for peers over the next six quarters and loan growth less than peers projected at 6% in 2013, we see little room for SUSQ to outperform on the two key metrics that we believe investors will be focused on given the challenged environment to grow spread revenues.” Susquehanna Bancshares closed on Friday at $10.72.