Susquehanna Bancshares, Inc. Announces Second Quarter Results

LITITZ, Pa.--(Business Wire)--
Susquehanna Bancshares, Inc., (Susquehanna) (Nasdaq:SUSQ) today
announced net income for the second quarter of 2008 was $29.2 million,
or $0.34 per diluted share, compared to $9.8 million, or $0.19 per
diluted share, for the second quarter 2007. Net income for the first
six months of 2008 was $57.2 million, or $0.67 per share, compared to
$30.5 million, or $0.59 per share for the first half of 2007.
Susquehanna's second quarter 2007 earnings included a pre-tax charge
of $11.8 million related to a restructuring of its bank investment
portfolio.

-0-
*T

Second Quarter Financial Highlights:

-- Net loans and leases, excluding the November 2007 acquisition
of Community Banks, Inc., grew 19% from June 30, 2007.
-- Commercial loans, excluding Community Banks, increased 42%
from June 30, 2007.
-- Real Estate Secured-Residential loans, excluding Community
Banks, increased 8% from June 30, 2007.
-- Real Estate Secured-Commercial loans, excluding Community
Banks, increased 17% from June 30, 2007.

-- Total deposits, excluding Community Banks, increased 1% to $6.1
billion from June 30, 2007
-- Non-interest bearing demand deposits, excluding Community
Banks, decreased 1% to $901 million from June 30, 2007.

-- Net interest margin for the second quarter decreased 1 basis
point to 3.66% compared to 3.67% for the second quarter of 2007.

-- Net charge-offs as a percentage of average loans and leases for
the quarter ended June 30, 2008 were 0.48% compared to 0.14% for
the second quarter of 2007.

-- Wealth management assets under management and administration
increased 30% to $6.8 billion at June 30, 2008 from $5.3 billion
at June 30, 2007 reflecting the May 1, 2008 acquisition of
Stratton Holding Company.

-- Wealth management fee income increased 37% to $11.1 million
from $8.1 million in the second quarter of 2007. Commission
income from property and casualty insurance sales increased 4% to
$3.1 million from $2.9 million for the same period in 2007.

*T

Equity capital was $1.7 billion at June 30, 2008 or $19.95 per
share, compared to $945 million, or $18.11 per share at June 30, 2007.

Return on average assets and average tangible equity(1) for the
second quarter of 2008 finished at 0.89% and 18.48%, respectively.
This compared to results of 0.48% and 6.96%, for the same
measurements, respectively for the second quarter of 2007.

(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."

-0-
*T

Linked Quarter Highlights (Second Quarter 2008 vs. First Quarter 2008)

-- Net loans and leases grew 4% from March 31, 2008.
-- Commercial loans increased 4% to $2.0 billion from March
31, 2008.
-- Commercial Real Estate-Secured loans increased 6% to $2.8
billion from March 31, 2008.

-- Total deposits grew 1% to $9.0 billion from March 31, 2008.
-- Non-interest bearing deposits increased 4% to $1.3 billion
from March 31, 2008.

-- Net interest margin decreased 5 basis points to 3.66% compared
to the first quarter of 2008.

-- Efficiency ratio for the second quarter improved to 61.55% from
63.95% in the first quarter of 2008. Historically, Susquehanna's
efficiency ratio has been greater than 65%.

-- Net charge-offs as a percentage of average loans and leases
increased 23 basis points to 0.48% compared to the first quarter
of 2008. Consequently, Susquehanna's provision for loans and
lease losses increased from $9.8 million in the first quarter of
2008 to $13.8 million in the second quarter.

Additional Activity:

-- In May, Susquehanna announced that it had completed the
acquisition of Stratton Holding Company, which is now part of the
Susquehanna Wealth Management family of companies. Stratton
Holding is the parent company of Stratton Management Company, an
investment management firm founded in 1972 and based in Plymouth
Meeting, PA. The company provides management of assets for
institutions, pensions, endowments and high net worth
individuals. It also manages and advises the Stratton Mutual
Funds, including the Stratton Small-Cap Value Fund and the
Stratton Multi-Cap Fund. This acquisition brings additional
investment expertise and diversity of product offerings to
Susquehanna's Wealth Management business.

-- Since the beginning of the second quarter, Susquehanna has
continued working to enhance customer service and visibility of
its banks by opening a new branch in Collegeville, PA, and moving
branches into new, upgraded facilities in Harrisburg, Halifax and
Lancaster, PA.

*T

"While current economic challenges have had an impact on our loan
portfolio through increasing credit costs, we've been able to maintain
stable operating earnings, supported by the strong geographical
markets where we operate," said William J. Reuter, Chairman and CEO of
Susquehanna Bancshares.

"During the quarter, we continued to realize strong growth in our
loan portfolio, including record performance in terms of mortgage loan
production. This is due to customers returning to community banks who
can reliably fund and close home loans," Reuter continued. "Another
highlight of the quarter is the ongoing improvement in our efficiency
ratio, which demonstrates a continued reduction in the proportion of
non-interest expenses incurred to generate revenue."

Susquehanna will broadcast its second quarter 2008 results
conference call over the Internet on July 24, 2007 at 11:00 a.m.
Eastern time. The conference call will include management's discussion
of second quarter 2008 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 second quarter 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 $13.5 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 $6.8 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 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.

-0-
*T

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

SUMMARY FINANCIAL INFORMATION
(Dollars in thousands, except per share data)

Six Months
---------------------
2Q08 2Q07 2008 2007
---------- ---------- ---------- ----------
Balance Sheet (EOP)
Investments $2,033,509 $1,411,229 $2,033,509 $1,411,229
Loans and leases 9,227,969 5,574,858 9,227,969 5,574,858
Allowance for loan & lease
losses (ALLL) 96,033 61,871 96,033 61,871
Total assets 13,504,721 8,313,609 13,504,721 8,313,609
Deposits 8,988,461 5,979,281 8,988,461 5,979,281
Short-term borrowings 750,864 440,672 750,864 440,672
FHLB borrowings 1,382,769 460,034 1,382,769 460,034
Long-term debt 422,805 222,035 422,805 222,035
Shareholders' equity 1,716,456 945,140 1,716,456 945,140

Stated Book Value per
Share 19.95 18.11 19.95 18.11
Tangible Book Value per
Share 7.46 11.28 7.46 11.28

Average Balance Sheet
Investments $2,081,232 $1,456,918 $2,060,201 $1,461,708
Loans and leases 9,038,623 5,470,859 8,911,345 5,484,373
Total earning assets 11,202,180 7,028,522 11,074,787 7,037,801
Total assets 13,216,574 8,202,823 13,083,104 8,198,518
Deposits 8,754,646 5,998,428 8,753,932 5,957,425
Short-term borrowings 664,190 363,651 603,311 352,302
FHLB borrowings 1,394,087 432,975 1,319,134 487,468
Long-term debt 422,404 222,090 420,501 222,159
Shareholders' equity 1,723,626 945,974 1,727,546 942,473

Income Statement
Net interest income $99,058 $63,437 $197,239 $126,485
Provision for loan and
lease losses 13,765 1,933 23,602 3,933
Noninterest income 44,685 19,151 87,587 53,431
Noninterest expense 90,304 67,342 182,264 132,190
Income before taxes 39,674 13,313 78,960 43,793
Income taxes 10,473 3,495 21,738 13,249
Net income 29,201 9,818 57,222 30,544
Basic earnings per share 0.34 0.19 0.67 0.59
Diluted earnings per share 0.34 0.19 0.67 0.59
Cash dividends paid per
share 0.26 0.25 0.52 0.50

Asset Quality
Net charge-offs (NCO) $10,727 $1,851 $16,138 $4,705
Nonaccrual loans & leases 78,424 30,309 78,424 30,309
Restructured loans 2,582 1,997 2,582 1,997
OREO 10,510 4,587 10,510 4,587
Total nonperforming assets
(NPA) 91,516 36,893 91,516 36,893
Loans & leases 90 days
past due 22,033 8,053 22,033 8,053

*T

-0-
*T

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

Six Months
---------------------
RATIO ANALYSIS 2Q08 2Q07 2008 2007
--------- ---------- ---------- ----------

Credit Quality
NCO / Average loans &
leases 0.48% 0.14% 0.36% 0.17%
NPA / Loans & leases & OREO 0.99% 0.66% 0.99% 0.66%
ALLL / Nonperforming loans
& leases 118.55% 191.52% 118.55% 191.52%
ALLL / Total loans & leases 1.04% 1.11% 1.04% 1.11%

Capital Adequacy
Equity / Assets 12.71% 11.37% 12.71% 11.37%
Long-term debt / Equity 24.63% 23.49% 24.63% 23.49%

Profitability
Return on average assets 0.89% 0.48% 0.88% 0.75%
Return on average equity 6.81% 4.16% 6.66% 6.54%
Return on average tangible
equity (1) 18.48% 6.96% 17.37% 10.79%
Net interest margin 3.66% 3.67% 3.69% 3.67%
Efficiency ratio 61.55% 80.75% 62.73% 72.83%

*T

-0-
*T

(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.

*T

-0-
*T

Six Months
---------------------
2Q08 2Q07 2008 2007
--------- ---------- ---------- ----------
Return on average equity
(GAAP basis) 6.81% 4.16% 6.66% 6.54%
Effect of excluding average
intangible assets and
related amortization 11.67% 2.80% 10.71% 4.25%
Return on average tangible
equity 18.48% 6.96% 17.37% 10.79%

*T

-0-
*T

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

CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

June 30, December 31, June 30,
2008 2007 2007
------------ ------------ -----------
(in thousands, except share data)
Assets
Cash and due from banks $334,566 $326,965 $198,899
Unrestricted short-term
investments 83,408 143,042 99,634
------------ ------------ -----------
Cash and cash equivalents 417,974 470,007 298,533
Restricted short-term
investments 238 242 214
Securities available for sale 2,024,264 2,059,160 1,406,342
Securities held to maturity
(fair values approximate
$9,245; $4,792 and $4,887) 9,245 4,792 4,887
Loans and leases, net of
unearned income 9,227,969 8,751,590 5,574,858
Less: Allowance for loan and
lease losses 96,033 88,569 61,871
------------ ------------ -----------
Net loans and leases 9,131,936 8,663,021 5,512,987
------------ ------------ -----------
Premises and equipment, net 179,342 179,740 107,334
Foreclosed assets 10,510 11,927 4,587
Accrued income receivable 41,357 46,765 32,075
Bank-owned life insurance 350,504 344,578 267,788
Goodwill 1,014,527 945,081 338,284
Intangible assets with finite
lives 59,693 58,274 17,846
Investment in and receivables
from unconsolidated entities 76,949 123,586 161,445
Other assets 188,182 170,821 161,287
------------ ------------------------
Total assets $13,504,721 $13,077,994 $8,313,609
============ ========================

Liabilities and Shareholders'
Equity
Deposits:
Demand $1,283,496 $1,292,791 $911,383
Interest-bearing demand 2,652,144 2,830,025 2,126,459
Savings 752,901 713,984 445,333
Time 2,681,089 2,750,867 1,592,165
Time of $100 or more 1,618,831 1,357,452 903,941
------------ ------------ -----------
Total deposits 8,988,461 8,945,119 5,979,281
Short-term borrowings 750,864 568,412 440,672
Federal Home Loan Bank
borrowings 1,382,769 1,145,759 460,034
Long-term debt 151,293 150,303 150,031
Junior subordinated debentures 271,512 266,682 72,004
Accrued interest, taxes, and
expenses payable 50,917 60,869 36,394
Deferred taxes 117,696 136,076 146,485
Other liabilities 74,753 75,760 83,568
------------ ------------ -----------
Total liabilities 11,788,265 11,348,980 7,368,469
------------ ------------ -----------

Shareholders' equity:
Common stock, $2.00 par value,
200,000,000 shares
authorized; Issued:
86,044,328 at June 30, 2008;
85,935,315 at December 31,
2007; and 52,202,046 at June
30, 2007 172,089 171,810 104,343
Additional paid-in capital 1,043,595 1,038,894 348,897
Retained earnings 532,301 522,268 510,344
Accumulated other
comprehensive loss, net of
taxes of $16,977; $2,131 and
$9,931, respectively (31,529) (3,958) (18,444)
------------ ------------ -----------
Total shareholders'
equity 1,716,456 1,729,014 945,140
------------ ------------ -----------
Total liabilities and
shareholders' equity $13,504,721 $13,077,994 $8,313,609
============ ============ ===========

*T

-0-
*T

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

CONSOLIDATED STATEMENTS OF
INCOME (UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
(In thousands, except per share
data) 2008 2007 2008 2007
-------- --------- -------- ---------
Interest Income:
Loans and leases, including
fees $145,112 $102,795 $295,869 $205,240
Securities:
Taxable 21,743 15,571 44,190 31,036
Tax-exempt 3,199 426 5,961 812
Dividends 1,494 985 2,999 2,092
Short-term investments 427 1,268 1,449 2,392
-------- --------- -------- ---------
Total interest income 171,975 121,045 350,468 241,572
-------- --------- -------- ---------

Interest Expense:
Deposits:
Interest-bearing demand 8,574 16,466 19,813 32,864
Savings 1,296 940 2,838 2,053
Time 39,250 28,947 82,858 56,686
Short-term borrowings 2,864 3,990 6,189 7,772
FHLB borrowings 13,229 3,960 25,985 9,129
Long-term debt 7,704 3,305 15,546 6,583
-------- --------- -------- ---------
Total interest expense 72,917 57,608 153,229 115,087
-------- --------- -------- ---------
Net interest income 99,058 63,437 197,239 126,485
Provision for loan and lease
losses 13,765 1,933 23,602 3,933
-------- --------- -------- ---------
Net interest income, after
provision for loan and lease
losses 85,293 61,504 173,637 122,552
-------- --------- -------- ---------

Noninterest Income:
Service charges on deposit
accounts 11,767 7,181 22,855 13,656
Vehicle origination,
servicing, and securitization
fees 2,070 3,888 5,498 7,906
Asset management fees 6,911 4,792 11,756 9,403
Income from fiduciary-related
activities 2,229 1,755 4,523 3,343
Commissions on brokerage, life
insurance and annuity sales 2,000 1,567 3,689 2,678
Commissions on property and
casualty insurance sales 3,055 2,941 6,968 7,033
Income from bank-owned life
insurance 3,406 2,641 6,932 5,299
Net gain on sale of loans and
leases 1,779 1,474 3,104 5,525
Net realized gain (loss) on
securities 119 (11,801) 207 (11,740)
Other 11,349 4,713 22,055 10,328
-------- --------- -------- ---------
Total noninterest income 44,685 19,151 87,587 53,431
-------- --------- -------- ---------

Noninterest Expenses:
Salaries and employee benefits 47,073 34,840 93,118 69,116
Occupancy 8,855 5,703 18,310 11,774
Furniture and equipment 4,029 2,912 8,109 5,809
Advertising and marketing 3,010 2,808 7,186 4,633
Amortization of intangible
assets 2,688 623 5,195 1,246
Vehicle lease disposal 3,331 2,834 5,525 6,179
Other 21,318 17,622 44,821 33,433
-------- --------- -------- ---------
Total noninterest expenses 90,304 67,342 182,264 132,190
-------- --------- -------- ---------
Income before income taxes 39,674 13,313 78,960 43,793
Provision for income taxes 10,473 3,495 21,738 13,249
-------- --------- -------- ---------
Net Income $29,201 $9,818 $57,222 $30,544
======== ========= ======== =========

Earnings per share:
Basic $0.34 $0.19 $0.67 $0.59
Diluted $0.34 $0.19 $0.67 $0.59
Cash dividends paid $0.26 $0.25 $0.52 $0.50
Average shares outstanding:
Basic 85,936 52,124 85,929 52,111
Diluted 85,970 52,197 85,968 52,198

*T

-0-
*T
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 For the Three-month
Ended Period Ended
June 30, 2008 June 30, 2007
-------------------------- -------------------------
(Dollars in Average Rate Average Rate
thousands) Balance Interest (%) Balance Interest (%)
Assets
Short-term
investments $82,325 $427 2.09 $100,745 $1,268 5.05
Investment
securities:
Taxable 1,777,900 23,238 5.26 1,415,256 16,556 4.69
Tax-
advantaged 303,332 4,921 6.52 41,662 655 6.31
------------ -------- ----------- --------

Total
investment
securities 2,081,232 28,159 5.44 1,456,918 17,211 4.74
------------ -------- ----------- --------
Loans and leases,
(net):
Taxable 8,843,985 142,775 6.49 5,381,069 101,715 7.58
Tax-
advantaged 194,638 3,595 7.43 89,790 1,662 7.42
------------ -------- ----------- --------

Total loans and
leases 9,038,623 146,370 6.51 5,470,859 103,377 7.58
------------ -------- ----------- --------

Total interest-
earning assets 11,202,180 $174,956 6.28 7,028,522 121,856 6.95
--------
Allowance for
loan and lease
losses (93,557) (62,688)
Other non-earning
assets 2,107,951 1,236,989
------------ -----------

Total assets $13,216,574 $8,202,823
============ ===========

Liabilities
Deposits:
Interest-
bearing
demand $2,711,535 $8,574 1.27 $2,133,308 $16,466 3.10
Savings 740,925 1,296 0.70 457,442 940 0.82
Time 4,079,074 39,250 3.87 2,502,428 28,947 4.64
Short-term
borrowings 664,190 2,864 1.73 363,651 3,990 4.40
FHLB borrowings 1,394,087 13,229 3.82 432,975 3,960 3.67
Long-term debt 422,404 7,704 7.34 222,090 3,305 5.97
------------ -------- ----------- --------

Total interest-
bearing
liabilities 10,012,215 $72,917 2.93 6,111,894 $57,608 3.78
-------- --------
Demand deposits 1,223,112 905,250
Other liabilities 257,621 239,705
------------ -----------

Total
liabilities 11,492,948 7,256,849

Equity 1,723,626 945,974
------------ -----------

Total liabilities
& shareholders'
equity $13,216,574 $8,202,823
============ ===========

Net interest
income / yield
on average
earning assets $102,039 3.66 $64,248 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.

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 Six-month Period For the Six-month Period
Ended Ended
June 30, 2008 June 30, 2007
-------------------------- -------------------------
(Dollars in Average Rate Average Rate
thousands) Balance Interest (%) Balance Interest (%)
Assets
Short-term
investments $103,241 $1,449 2.82 $91,720 $2,392 5.26
Investment
securities:
Taxable 1,774,857 47,190 5.35 1,421,976 33,128 4.70
Tax-
advantaged 285,344 9,171 6.46 39,732 1,249 6.34
------------ -------- ----------- --------

Total
investment
securities 2,060,201 56,361 5.50 1,461,708 34,377 4.74
------------ -------- ----------- --------
Loans and leases,
(net):
Taxable 8,719,087 291,230 6.72 5,396,899 203,121 7.59
Tax-
advantaged 192,258 7,137 7.47 87,474 3,260 7.52
------------ -------- ----------- --------

Total loans and
leases 8,911,345 298,367 6.73 5,484,373 206,381 7.59
------------ -------- ----------- --------

Total interest-
earning assets 11,074,787 $356,177 6.47 7,037,801 $243,150 6.97
-------- --------
Allowance for
loan and lease
losses (91,637) (62,690)
Other non-earning
assets 2,099,954 1,223,407
------------ -----------

Total assets $13,083,104 $8,198,518
============ ===========

Liabilities
Deposits:
Interest-
bearing
demand $2,715,572 $19,813 1.47 $2,104,997 $32,864 3.15
Savings 727,042 2,838 0.78 464,889 2,053 0.89
Time 4,109,917 82,858 4.05 2,481,568 56,686 4.61
Short-term
borrowings 603,311 6,189 2.06 352,302 7,772 4.45
FHLB borrowings 1,319,134 25,985 3.96 487,468 9,129 3.78
Long-term debt 420,501 15,546 7.43 222,159 6,583 5.98
------------ -------- ----------- --------

Total interest-
bearing
liabilities 9,895,477 $153,229 3.11 6,113,383 $115,087 3.80
-------- --------
Demand deposits 1,201,401 905,971
Other liabilities 258,680 236,691
------------ -----------

Total
liabilities 11,355,558 7,256,045

Equity 1,727,546 942,473
------------ -----------

Total liabilities
& shareholders'
equity $13,083,104 $8,198,518
============ ===========

Net interest
income / yield
on average
earning assets $202,948 3.69 $128,063 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.

*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:

June 30, December 31, June 30,
2008 2007 2007
---------- -------------- ----------
(in thousands)
Commercial, financial, and
agricultural $1,976,953 $1,781,981 $1,090,241
Real estate - construction 1,301,036 1,292,953 1,069,309
Real estate secured - residential 2,180,595 2,151,923 1,206,891
Real estate secured - commercial 2,770,889 2,661,841 1,559,283
Consumer 394,918 411,159 297,429
Leases 603,578 451,733 351,705
---------- -------------- ----------
Total loans and leases $9,227,969 $8,751,590 $5,574,858
========== ============== ==========
*T

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

Copyright Business Wire 2008