Susquehanna Bancshares, Inc. Announces 2007 Full Year and Fourth Quarter Results

LITITZ, Pa.--(Business Wire)--Susquehanna Bancshares, Inc. (Susquehanna) (Nasdaq:SUSQ) today
announced net income for the year ended December 31, 2007 was $69.1
million, or $1.23 per diluted share, compared to $83.6 million, or
$1.66 per diluted share, earned in 2006. Net income for the fourth
quarter of 2007 was $18.7 million, or $0.27 per diluted share,
compared to $21.4 million for the fourth quarter of 2006, or $0.41 per
diluted share.

Fourth quarter 2007 net income includes $13.1 million of pre-tax
charges ($0.13 per diluted share) related to the November 2007
acquisition of Community Banks, Inc. This reflects the previously
disclosed $11.1 million provision for allowance for loan and lease
losses representing the impact of applying Susquehanna's loan and
lease reserve assessment process to the Community Banks' loan
portfolio and $2.0 million of severance and branch closure charges.

Full Year/Fourth Quarter Financial Highlights:

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-- Net loans and leases, excluding securitizations and the November
16, 2007 acquisition of Community Banks, grew 15% from December 31,
2006.
-- Commercial loans, excluding Community Banks, increased 38% from
December 31, 2006.
-- Residential real estate secured loans, excluding Community Banks,
increased 11% from December 31, 2006.
-- Commercial real estate secured loans, excluding Community Banks,
increased 9% from December 31, 2006.

-- Total deposits, excluding Community Banks, grew 2% from December
31, 2006.
-- Non-interest bearing demand deposits, excluding Community Banks,
declined 5% from December 31, 2006.

-- Net interest margin for the year decreased 10 basis points to 3.67%
compared to 3.77% for 2006. For the fourth quarter 2007, net interest
margin increased 2 basis points to 3.69% compared to 3.67% for the
fourth quarter of 2006.

-- Net charge-offs as a percentage of average loans and leases for the
year ended December 31, 2007 were 0.25% compared to 0.10% for 2006.
The charge-off ratio for 2007 is within the historic norm of 15 to 25
basis points. Non-performing assets as a percentage of loans, leases
and other real estate owned were 0.81% for the year ended December
31, 2007 compared to 0.67% for 2006.

-- Wealth management fee income for the year ended December 31, 2007
increased 11% to $32.1 million from $28.9 million during 2006. Wealth
management fee income for the fourth quarter 2007 increased 18% to
$8.6 million from $7.3 million during the fourth quarter 2006.

-- Wealth management assets under management and administration
increased 18% to $6.0 billion at December 31, 2007 from $5.1 billion
at December 31, 2006.
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Linked Quarter Highlights (Fourth Quarter 2007 vs. Third Quarter
2007)

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-- Net loans and leases, excluding securitizations and Community
Banks, grew 5% from September 30, 2007.
-- Commercial loans, excluding Community Banks, increased 14% from
September 30, 2007.
-- Commercial real estate secured loans, excluding Community Banks,
increased 6% from September 30, 2007.

-- Total deposits, excluding Community Banks, grew 1% from September
30, 2007.
-- Non-interest bearing deposits, excluding Community Banks, grew 3%
from September 30, 2007.

-- Net interest margin increased 5 basis points to 3.69% from 3.64% in
the third quarter of 2007.

-- Wealth management fee income for the fourth quarter 2007 increased
6% to $8.6 million from $8.1 million during the third quarter 2007.

-- Wealth management assets under management and administration
increased 5% to $6.0 billion at December 31, 2007 from $5.7 billion
at September 30, 2007.
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Equity capital was $1.7 billion at December 31, 2007, or $20.12
per share, compared to $936 million, or $17.98 per share, at December
31, 2006.

Return on average assets and average tangible equity(1) for the
year ended December 31, 2007 were 0.78% and 11.56%, respectively. This
compared to results of 1.05% and 15.42%, for the same measurements
respectively for 2006. Return on average assets and average tangible
equity(1) for the fourth quarter of 2007 were 0.69% and 10.94%,
respectively. This compared to 1.05% and 14.96% for the fourth quarter
of 2006.

On December 12, 2007, the company issued Susquehanna Capital I
retail hybrid trust preferred securities in the amount of $125.0
million. The securities bear interest at an annual rate of 9.375% with
a call provision at the end of year five. Net proceeds from the issue
were used to replenish the cash reserves used to pay for the cash
portion of the consideration paid in the acquisition of Community
Banks and for general corporate purposes.

(1)A non-GAAP-based financial measure. The most comparable
GAAP-based measurement for return on average tangible equity is return
on average equity. A reconciliation of the differences between
non-GAAP-based and GAAP-based measurements can be found at the end of
this release under the heading "Supplemental Reporting of
Non-GAAP-Based Financial Measures."

Additional Activity:

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-- On November 16, 2007, Susquehanna completed the largest merger in
its history by acquiring Community Banks, Inc., which had
approximately $3.8 billion in assets and 80 branches in central
Pennsylvania and Maryland. With the acquisition, Susquehanna now
operates more than 230 branches in Pennsylvania, New Jersey, Maryland
and West Virginia.

-- During the fourth quarter of 2007, Susquehanna's affiliate banks
opened new branches in Wayne, Pennsylvania and Hanover, Pennsylvania
and also relocated the Pasadena, Maryland branch to a new facility.

-- On January 2, 2008, Susquehanna announced an agreement to acquire
Stratton Holding Company, an investment management firm with
approximately $3 billion in assets under management. Pending
regulatory and other approvals, the acquisition is expected to be
completed early in the second quarter of 2008. Stratton will become a
wholly-owned subsidiary of Susquehanna as part of the company's
wealth management operations. The acquisition will enhance
Susquehanna's spectrum of investment options by adding expertise in
small-cap and mid-cap stocks, as well as increase total assets under
management and administration to approximately $9 billion.
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"A highlight of our fourth quarter was the successful completion
of the acquisition of Community Banks, Inc., and the addition of its
customers, employees and shareholders to our company," said William J.
Reuter, Susquehanna's Chairman, President and Chief Executive Officer.
"We were able to complete the operational integration during merger
weekend in mid-November, which we expect to yield greater efficiencies
going forward. We already saw an improvement in our efficiency ratio
in fourth-quarter 2007.

"We are also pleased to report an improvement in net interest
margin for the fourth quarter. At 3.69%, net interest margin was up
two basis points from the same quarter in 2006, and up five basis
points from third-quarter 2007," Reuter continued.

Susquehanna will broadcast its fourth quarter and full year 2007
results conference call over the Internet on January 23, 2008 at 11:00
a.m. Eastern time. The conference call will include management's
discussion of fourth quarter and full year 2007 results. The
discussion may also include forward-looking information and financial
goals. Investors will have the opportunity to listen to the conference
call through a live broadcast on Susquehanna's Web site. The event may
be accessed by selecting "Investor Relations" near the top right of
the home page then "Overview" and clicking on the fourth quarter and
full year webcast link. To listen to the live call, please go to the
Web site at least fifteen minutes prior to the scheduled start time to
download and install any necessary audio software. For those who are
unable to listen to the live broadcast, an archived replay and podcast
will be available on the Web site shortly after the call concludes.

Susquehanna Bancshares, Inc. is a financial services holding
company with assets of approximately $13 billion. Headquartered in
Lititz, Pa., the company provides financial services through its three
commercial banks at more than 230 branch locations and 250 ATM
locations in the mid-Atlantic region. Through Susquehanna Wealth
Management, the company offers investment, fiduciary, brokerage,
insurance, retirement planning, and private banking services, with
approximately $6 billion in assets under management and
administration. Susquehanna also operates an insurance brokerage and
employee benefits company, a commercial finance company and a vehicle
leasing company. Investor information may be requested on
Susquehanna's Web site at www.susquehanna.net.

This press release contains certain financial information
determined by methods other than in accordance with GAAP.
Susquehanna's management uses these non-GAAP measures in its analysis
of the company's performance. These non-GAAP financial measures
require management to make judgments about the exclusion of certain
items, and if different judgments were made, the amounts reported
would be different. These measures typically exclude the effects of
intangibles and related amortization and include the tax benefit
associated with revenue items that are tax-exempt. Disclosures
regarding these non-GAAP financial measures are included in the
accompanying financial information.

The presentation of these non-GAAP financial measures is intended
to supplement investors' understanding of Susquehanna's core business
activities. These non-GAAP disclosures should not be viewed as a
substitute for operating results determined in accordance with GAAP,
nor are they necessarily comparable to non-GAAP performance measures
which may be presented by other companies.

This press release contains "forward-looking" statements as
defined in the Private Securities Litigation Reform Act of 1995,
including statements regarding the efficiencies of the Community
Banks, Inc. acquisition, that are based on Susquehanna's current
expectations, estimates and projections about future events and
financial trends affecting the financial condition of its business.
These statements are not historical facts or guarantees of future
performance, events or results. Such statements involve potential
risks and uncertainties. Accordingly, actual results may differ
materially. Susquehanna undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.

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Susquehanna Bancshares, Inc.
P.O. Box 1000
Lititz, PA 17543

SUMMARY FINANCIAL INFORMATION
(Dollars in thousands, except per share data)
Twelve Months
---------------------
4Q07 4Q06 2007 2006
---------- ---------- ---------- ----------
Balance Sheet (EOP)
Investments $2,063,952 $1,403,566 $2,063,952 $1,403,566
Loans and leases 8,751,590 5,560,997 8,751,590 5,560,997
Allowance for loan & lease
losses (ALLL) 88,569 62,643 88,569 62,643
Total assets 13,077,994 8,225,134 13,077,994 8,225,134
Deposits 8,945,119 5,877,589 8,945,119 5,877,589
Short-term borrowings 568,412 401,964 568,412 401,964
FHLB borrowings 1,145,759 528,688 1,145,759 528,688
Long-term debt 416,985 222,280 416,985 222,280
Shareholders' equity 1,729,014 936,286 1,729,014 936,286

Stated Book Value per
Share 20.12 17.98 20.12 17.98
Tangible Book Value per
Share 8.44 11.18 8.44 11.18

Average Balance Sheet
Investments 1,807,132 1,350,590 1,554,950 1,282,021
Loans and leases 7,222,442 5,529,081 5,979,878 5,517,812
Total earning assets 9,144,165 6,980,477 7,632,411 6,881,772
Total assets 10,733,204 8,104,511 8,904,728 7,949,820
Deposits 7,337,855 5,880,403 6,309,502 5,697,592
Short-term borrowings 523,764 325,376 423,827 324,326
FHLB borrowings 1,013,255 497,375 653,605 615,841
Long-term debt 284,784 222,369 237,910 207,765
Shareholders' equity 1,324,122 931,733 1,038,187 874,756

Income Statement
Net interest income 83,344 63,792 275,903 256,770
Provision for loan and
lease losses 15,497 2,488 21,844 8,680
Noninterest income 36,938 35,303 120,659 136,313
Noninterest expense 78,703 66,631 276,955 262,836
Income before taxes 26,082 29,976 97,763 121,567
Income taxes 7,427 8,620 28,670 37,929
Net income 18,655 21,356 69,093 83,638
Basic earnings per share 0.27 0.41 1.23 1.66
Diluted earnings per share 0.27 0.41 1.23 1.66
Cash dividends paid per
share 0.26 0.25 1.01 0.97

Asset Quality
Net charge-offs (NCO) $4,734 $988 $15,037 $5,265
Nonaccrual loans & leases 56,742 30,325 56,742 30,325
Restructured loans 2,582 5,376 2,582 5,376
OREO 11,927 1,544 11,927 1,544
Total nonperforming assets
(NPA) 71,251 37,245 71,251 37,245
Loans & leases 90 days
past due 12,199 9,364 12,199 9,364
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Susquehanna Bancshares, Inc.
P.O. Box 1000
Lititz, PA 17543

RATIO ANALYSIS 4Q07 4Q06 2007 2006
------- ------- ------- -------

Credit Quality
NCO / Average loans & leases 0.26% 0.07% 0.25% 0.10%
NPA / Loans & leases & OREO 0.81% 0.67% 0.81% 0.67%
ALLL / Nonperforming loans & leases 149.30% 175.47% 149.30% 175.47%
ALLL / Total loans & leases 1.01% 1.13% 1.01% 1.13%

Capital Adequacy
Equity / Assets 13.22% 11.38% 13.22% 11.38%
Long-term debt / Equity 24.12% 23.74% 24.12% 23.74%

Profitability
Return on average assets 0.69% 1.05% 0.78% 1.05%
Return on average equity 5.59% 9.09% 6.66% 9.56%
Return on average tangible equity (1) 10.94% 14.96% 11.56% 15.42%
Net interest margin 3.69% 3.67% 3.67% 3.77%
Efficiency ratio 64.46% 66.77% 69.10% 66.43%
Efficiency ratio excluding Hann (1) 62.02% 61.16% 66.72% 61.04%

(1)Supplemental Reporting of Non-GAAP-based Financial Measures

Return on average tangible equity is a non-GAAP-based financial
measure calculated using non-GAAP-based amounts. The most directly
comparable measure is return on average equity which is calculated
using GAAP-based amounts. We calculate return on average tangible
equity by excluding the balance of intangible assets and their
related amortization expense from our calculation of return on
average equity. Management uses the return on average tangible equity
in order to review our core operating results. Management believes
that this is a better measure of our performance. In addition, this
is consistent with the treatment by bank regulatory agencies, which
excludes goodwill and other intangible assets from the calculation of
risk-based capital ratios. A reconciliation of return on average
equity to return on average tangible equity is set forth below.

Return on average equity (GAAP basis) 5.59% 9.09% 6.66% 9.56%
Effect of excluding average intangible
assets and related amortization 5.35% 5.87% 4.90% 5.86%
Return on average tangible equity 10.94% 14.96% 11.56% 15.42%

Efficiency ratio excluding Hann is a non-GAAP-based financial measure
calculated using non-GAAP-based amounts. The most directly comparable
measure is efficiency ratio which is calculated using GAAP-based
amounts. We measure our efficiency ratio by dividing noninterest
expenses by the sum of net interest income, on a FTE basis, and
noninterest income. The presentation of an efficiency ratio excluding
Hann is computed as the efficiency ratio excluding the effect of our
auto leasing subsidiary, Hann. Management believes this to be a
preferred measure because it excludes the volatility of vehicle
residual values and vehicle delivery and preparation expense of Hann
and provides better visibility into our core business activities. A
reconciliation of efficiency ratio to efficiency ratio excluding Hann
is set forth below.

Efficiency ratio (GAAP basis) 64.46% 66.77% 69.10% 66.43%
Effect of excluding Hann 2.44% 5.61% 2.38% 5.39%
Efficiency ratio excluding Hann 62.02% 61.16% 66.72% 61.04%
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Susquehanna Bancshares, Inc.
P.O. Box 1000
Lititz, PA 17543

CONSOLIDATED BALANCE SHEETS

December 31 December 31,
2007 2006
(unaudited)
------------ ------------
(in thousands, except
share data)
Assets
Cash and due from banks $326,965 $194,785
Unrestricted short-term investments 143,042 70,996
------------ ------------
Cash and cash equivalents 470,007 265,781
Restricted short-term investments 242 33,533
Securities available for sale 2,059,160 1,397,420
Securities held to maturity (fair values
approximate $4,792 and $6,146) 4,792 6,146
Loans and leases, net of unearned income 8,751,590 5,560,997
Less: Allowance for loan and lease
losses 88,569 62,643
------------ ------------
Net loans and leases 8,663,021 5,498,354
------------ ------------
Premises and equipment, net 179,740 106,305
Foreclosed assets 11,927 1,544
Accrued income receivable 46,765 31,044
Bank-owned life insurance 344,578 264,398
Goodwill 945,081 335,005
Intangible assets with finite lives 58,274 19,092
Investment in and receivables from
unconsolidated entities 123,586 121,663
Other assets 170,821 144,849
------------ ------------
Total assets $13,077,994 $8,225,134
============ ============

Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing $1,292,791 $959,654
Interest-bearing 7,652,328 4,917,935
------------ ------------
Total deposits 8,945,119 5,877,589
Short-term borrowings 568,412 401,964
Federal Home Loan Bank borrowings 1,145,759 528,688
Long-term debt 150,303 150,036
Junior subordinated debentures 266,682 72,244
Accrued interest, taxes, and expenses
payable 60,869 54,800
Deferred taxes 136,076 145,825
Other liabilities 75,760 57,702
------------ ------------
Total liabilities 11,348,980 7,288,848
------------ ------------

Shareholders' equity:
Common stock, $2.00 par value, 200,000,000
shares authorized; Issued: 85,935,315 at
December 31, 2007 and 52,080,419 at
December 31, 2006 171,810 104,161
Additional paid-in capital 1,038,894 345,840
Retained earnings 522,268 505,861
Accumulated other comprehensive loss, net
of taxes of $(2,131) and ($10,541) (3,958) (19,576)
------------ ------------
Total shareholders' equity 1,729,014 936,286
------------ ------------
Total liabilities and shareholders'
equity $13,077,994 $8,225,134
============ ============
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Susquehanna Bancshares, Inc.
P.O. Box 1000
Lititz, PA 17543

CONSOLIDATED STATEMENTS OF
INCOME (UNAUDITED)

Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
(In thousands, except per
share data) 2007 2006 2007 2006
--------- --------- --------- ---------
Interest Income:
Loans and leases, including
fees $131,864 $103,730 $444,690 $404,814
Securities:
Taxable 20,632 13,655 69,265 49,810
Tax-exempt 1,609 291 2,848 845
Dividends 1,406 952 4,572 3,653
Short-term investments 1,372 1,118 4,782 3,669
--------- --------- --------- ---------
Total interest income 156,883 119,746 526,157 462,791
--------- --------- --------- ---------

Interest Expense:
Deposits:
Interest-bearing demand 13,590 14,784 61,572 51,424
Savings 1,356 1,466 4,278 4,960
Time 37,859 27,900 124,673 99,195
Short-term borrowings 4,658 3,540 17,464 13,495
FHLB borrowings 11,364 4,965 27,600 24,788
Long-term debt 4,712 3,299 14,667 12,159
--------- --------- --------- ---------
Total interest expense 73,539 55,954 250,254 206,021
--------- --------- --------- ---------
Net interest income 83,344 63,792 275,903 256,770
Provision for loan and lease
losses 15,497 2,488 21,844 8,680
--------- --------- --------- ---------
Net interest income, after
provision for loan and lease
losses 67,847 61,304 254,059 248,090
--------- --------- --------- ---------

Noninterest Income:
Service charges on deposit
accounts 10,378 7,188 31,413 26,446
Vehicle origination,
servicing, and
securitization fees 2,759 4,159 14,323 18,524
Asset management fees 5,205 4,668 19,843 18,439
Income from fiduciary-
related activities 2,542 1,592 7,479 6,160
Commissions on brokerage,
life insurance and annuity
sales 850 1,079 4,767 4,350
Commissions on property and
casualty insurance sales 3,163 3,119 12,751 12,660
Income from bank-owned life
insurance 3,341 2,665 11,405 10,000
Net gain on sale of loans
and leases 1,605 2,414 8,427 16,816
Net gain on sale of bank
branches 0 4,189 0 4,189
Net realized loss on
securities (116) (955) (11,857) (949)
Other 7,211 5,185 22,108 19,678
--------- --------- --------- ---------
Total noninterest income 36,938 35,303 120,659 136,313
--------- --------- --------- ---------

Noninterest Expenses:
Salaries and employee
benefits 39,873 32,795 144,508 128,465
Occupancy 6,928 5,243 24,371 20,905
Furniture and equipment 3,463 2,820 12,181 10,948
Advertising and marketing 3,351 3,350 10,216 9,627
Amortization of intangible
assets 1,628 630 3,525 2,231
Vehicle lease disposal 3,390 3,376 12,651 14,220
Other 20,070 18,417 69,503 76,440
--------- --------- --------- ---------
Total noninterest expenses 78,703 66,631 276,955 262,836
--------- --------- --------- ---------
Income before income taxes 26,082 29,976 97,763 121,567
Provision for income taxes 7,427 8,620 28,670 37,929
--------- --------- --------- ---------
Net Income $18,655 $21,356 $69,093 $83,638
========= ========= ========= =========

Earnings per share:
Basic $0.27 $0.41 $1.23 $1.66
Diluted $0.27 $0.41 $1.23 $1.66
Cash dividends paid $0.26 $0.25 $1.01 $0.97
Average shares outstanding:
Basic 68,656 51,914 56,297 50,340
Diluted 68,695 52,053 56,366 50,507
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Susquehanna Bancshares, Inc.
P.O. Box 1000
Lititz, PA 17543

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY

Interest rates and interest differential-taxable equivalent basis

For the Three-month Period
Ended
December 31, 2007
-------------------------------
Average
(Dollars in thousands) Balance Interest Rate (%)
-------------------------------------- -------------------------------
Assets
Short-term investments $114,591 $1,372 4.75
Investment securities:
Taxable 1,651,494 22,038 5.29
Tax-advantaged 155,638 2,475 6.31
------------ --------

Total investment securities 1,807,132 24,513 5.38
------------ --------
Loans and leases, (net):
Taxable 7,079,534 130,104 7.29
Tax-advantaged 142,908 2,709 7.52
------------ --------

Total loans and leases 7,222,442 132,813 7.30
------------ --------

Total interest-earning assets 9,144,165 $158,698 6.89
--------
Allowance for loan and lease losses (72,619)
Other non-earning assets 1,661,658
------------

Total assets $10,733,204
============

Liabilities
Deposits:
Interest-bearing demand $2,385,351 $13,590 2.26
Savings 559,682 1,356 0.96
Time 3,346,362 37,859 4.49
Short-term borrowings 523,764 4,658 3.53
FHLB borrowings 1,013,255 11,364 4.45
Long-term debt 284,784 4,712 6.56
------------ --------

Total interest-bearing liabilities 8,113,198 $73,539 3.60
--------
Demand deposits 1,046,460
Other liabilities 249,424
------------

Total liabilities 9,409,082

Equity 1,324,122
------------

Total liabilities & shareholders'
equity $10,733,204
============

Net interest income / yield on average
earning assets $85,159 3.69
========

For the Three-month Period
Ended
December 31, 2006
-------------------------------
Average
(Dollars in thousands) Balance Interest Rate (%)
-------------------------------------- -------------------------------
Assets
Short-term investments $100,806 $1,118 4.40
Investment securities:
Taxable 1,323,150 14,606 4.38
Tax-advantaged 27,440 448 6.48
------------ --------

Total investment securities 1,350,590 15,054 4.42
------------ --------
Loans and leases, (net):
Taxable 5,442,374 102,715 7.49
Tax-advantaged 86,707 1,563 7.15
------------ --------

Total loans and leases 5,529,081 104,278 7.48
------------ --------

Total interest-earning assets 6,980,477 $120,450 6.85
--------
Allowance for loan and lease losses (62,190)
Other non-earning assets 1,186,224
------------

Total assets $8,104,511
============

Liabilities
Deposits:
Interest-bearing demand $1,946,816 $14,784 3.01
Savings 489,035 1,466 1.19
Time 2,488,896 27,900 4.45
Short-term borrowings 325,376 3,540 4.32
FHLB borrowings 497,375 4,965 3.96
Long-term debt 222,369 3,299 5.89
------------ --------

Total interest-bearing liabilities 5,969,867 $55,954 3.72
--------
Demand deposits 955,656
Other liabilities 247,255
------------

Total liabilities 7,172,778

Equity 931,733
------------

Total liabilities & shareholders'
equity $8,104,511
============

Net interest income / yield on average
earning assets $64,496 3.67
========

1. Average loan balances include non accrual loans.
2. Tax-exempt income has been adjusted to a tax-equivalent basis using
a marginal tax rate of 35%.
3. For presentation in this table, average balances and the
corresponding average rates for investment securities are based upon
historical cost, adjusted for amortization of premiums and accretion
of discounts.
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Susquehanna Bancshares, Inc.
P.O. Box 1000
Lititz, PA 17543

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY
(continued)

Interest rates and interest differential-taxable equivalent basis

For the Twelve-month For the Twelve-month
Period Ended Period Ended
December 31, 2007 December 31, 2006
------------------------- -------------------------
(Dollars in Average Rate Average Rate
thousands) Balance Interest (%) Balance Interest (%)
------------------ ------------------------- -------------------------
Assets
Short-term
investments $97,583 $4,782 4.90 $81,939 $3,669 4.48
Investment
securities:
Taxable 1,485,561 73,837 4.97 1,261,515 53,463 4.24
Tax-
advantaged 69,389 4,380 6.31 20,506 1,300 6.34
----------- -------- ----------- --------

Total
investment
securities 1,554,950 78,217 5.03 1,282,021 54,763 4.27
----------- -------- ----------- --------
Loans and leases,
(net):
Taxable 5,876,948 439,680 7.48 5,434,490 400,923 7.38
Tax-
advantaged 102,930 7,708 7.49 83,322 5,987 7.19
----------- -------- ----------- --------

Total loans and
leases 5,979,878 447,388 7.48 5,517,812 406,910 7.37
----------- -------- ----------- --------

Total interest-
earning assets 7,632,411 $530,387 6.95 6,881,772 $465,342 6.76
-------- --------
Allowance for loan
and lease losses (64,993) (59,465)
Other non-earning
assets 1,337,310 1,127,513
----------- -----------

Total assets $8,904,728 $7,949,820
=========== ===========

Liabilities
Deposits:
Interest-
bearing
demand $2,173,731 $61,572 2.83 $1,846,483 $51,424 2.78
Savings 480,065 4,278 0.89 496,056 4,960 1.00
Time 2,720,688 124,673 4.58 2,408,684 99,195 4.12
Short-term
borrowings 423,827 17,464 4.12 324,326 13,495 4.16
FHLB borrowings 653,605 27,600 4.22 615,841 24,788 4.03
Long-term debt 237,910 14,667 6.16 207,765 12,159 5.85
----------- -------- ----------- --------

Total interest-
bearing
liabilities 6,689,826 $250,254 3.74 5,899,155 $206,021 3.49
-------- --------
Demand deposits 935,018 946,369
Other liabilities 241,697 229,540
----------- -----------

Total liabilities 7,866,541 7,075,064

Equity 1,038,187 874,756
----------- -----------

Total liabilities
& shareholders'
equity $8,904,728 $7,949,820
=========== ===========

Net interest
income / yield on
average earning
assets $280,133 3.67 $259,321 3.77
======== ========

1. Average loan balances include non accrual loans.
2. Tax-exempt income has been adjusted to a tax-equivalent basis using
a marginal tax rate of 35%.
3. For presentation in this table, average balances and the
corresponding average rates for investment securities are based upon
historical cost, adjusted for amortization of premiums and accretion
of discounts.
*T

-0-
*T
Susquehanna Bancshares, Inc.
P.O. Box 1000
Lititz, PA 17543

LOANS AND LEASES

Loans and leases, net of unearned income, were as follows:

December 31, December 31,
2007 2006
------------ ------------
(in thousands)

Commercial, financial, and agricultural $1,781,981 $978,522
Real estate - construction 1,292,953 1,064,452
Real estate secured - residential 2,151,923 1,147,741
Real estate secured - commercial 2,661,841 1,577,534
Consumer 411,159 313,848
Leases 451,733 478,900
------------ ------------
Total loans and leases $8,751,590 $5,560,997
============ ============
*T

Susquehanna Bancshares, Inc.
Abram G. Koser, Vice President, Investor Relations
717-625-6305
ir@susquehanna.net

Copyright Business Wire 2008