Susquehanna Bancshares (SUSQ) 8-K Susquehanna Bancshares, Inc. Announces Third Quarter 2011 Results

Exhibit 99.1

Susquehanna Bancshares, Inc. Announces Third Quarter 2011 Results

LITITZ, Pa.--(BUSINESS WIRE)--October 26, 2011--Susquehanna Bancshares, Inc. (Susquehanna) (NASDAQ: SUSQ) today announced net income applicable to common shareholders for the third quarter ended September 30, 2011 was $15.0 million, or $0.12 per diluted share, compared to net income of $4.6 million for the third quarter of 2010, or $0.04 per diluted share. Net income for the first nine months of 2011 was $35.8 million, or $0.28 per diluted share, compared to net income of $6.5 million or $0.06 per diluted share for the first nine months of 2010.

"The progress we've achieved in earnings was primarily related to improvement in credit quality, with significant improvement in nearly all credit quality metrics including lower net charge-offs, non-performing assets and provision," said William J. Reuter, Chairman and Chief Executive Officer of Susquehanna Bancshares. "For the first time since the economic downturn, our net charge-off ratio dropped below 1% and the non-performing asset ratio dropped below 2%."

"We successfully completed the acquisition of Abington Bancorp on October 1, and we are pleased to welcome new customers, employees and shareholders to our company," Reuter said. "For the remainder of 2011 and into next year, we are focused on several key objectives: continuing our strong progress in improving credit quality, successfully completing the acquisition and integration of Tower Bancorp, growing deposits and loans, and increasing profitability and dividends paid to shareholders."

Linked Quarter Asset Quality Results (Third Quarter 2011 vs. Second Quarter 2011)
(Dollars in Thousands)
	Third Quarter		Second Quarter	Percent
	2011		2011	Change
Provision for Loan Losses	$25,000		$28,000	(10.7	)
Net Charge-Offs (NCO)	23,332		31,941	(27.0	)
Non-Accrual Loans	160,099		190,733	(16.1	)
OREO (Other Real Estate Owned)	29,563		27,953	5.8
Non-Performing Asset (NPA) Generation	(5,692	)	10,947
Restructured Loans	62,331		62,143	0.3
90 Days Past Due Loans	13,034		18,268	(28.7	)
30-89 Days Past Due Loans	39,497		43,719	(9.7	)
Special Mention Loans	277,977		297,300	(6.5	)
Substandard Loans	435,840		481,538	(9.5	)
NCO/Average Loans	.096%		1.33%
NPA/Loans + OREO	1.95%		2.26%
Reserve/Non-Accrual Loans	119%		99%

Linked Quarter Financial Results (Third Quarter 2011 vs. Second Quarter 2011)

• Net loans and leases increased 1% to $9.7 billion compared to June 30, 2011.
  • Consumer loans increased 5%.
  • Commercial increased 1%.
  • Real estate secured–residential loans increased 1%.
  • Real estate secured–commercial were flat.
  • Real estate construction loans were flat.
  • Leases decreased 3%.

• Total deposits increased 2% to $9.6 billion from June 30, 2011.
  • Interest-bearing demand deposits increased 10%.
  • Non-interest bearing demand deposits decreased 1%.
  • Savings deposits decreased 2%.
  • Time deposits decreased 5%.

Net interest margin decreased 4 basis points to 3.58% compared to 3.62% for the second quarter of 2011.

Non-core items include $1.4 million of net security gains offset by $1.3 million of merger costs in the third quarter compared to $500,000 of net security gains offset by $1.0 million of merger costs in the second quarter.

Third Quarter Financial Results:

• Net loans and leases were flat at $9.7 billion compared to September 30, 2010.
  • Consumer loans increased 21%.
  • Real estate secured-residential loans increased 2%.
  • Real estate secured-commercial loans were flat.
  • Commercial loans decreased 1%.
  • Leases decreased 2%.
  • Real estate-construction loans decreased 16%.
• Total deposits increased 4% to $9.6 billion from September 30, 2010.
  • Interest-bearing demand deposits increased 12%.
  • Savings deposits increased 4%.
  • Non-interest bearing demand deposits increased 3%.
  • Time deposits decreased 4%.
• Net interest margin for the quarter was flat at 3.58% compared to the third quarter of 2010.
• Net charge-offs as a percentage of average loans and leases for the third quarter of 2011 were 0.96% compared to 1.42% for the third quarter of 2010. Non-performing assets as a percentage of loans, leases and foreclosed real estate were 1.95% at September 30, 2011 compared to 2.53% at September 30, 2010. The provision for loan and lease losses for the third quarter of 2011 was $25 million, compared to $40 million for the third quarter of 2010.
• Net charge-offs as a percentage of average loans and leases for the first nine months of 2011 were 1.24% compared to 1.48% for the first nine months of 2010. The provision for loan and lease losses for the first nine months of 2011 was $88 million, compared to $128 million for the first nine months of 2010.

• Common equity was $2.0 billion, or $15.65 per common share, at September 30, 2011 compared to $2.1 billion, or $15.42 per common share, at September 30, 2010. Tangible book value per common share was $7.61 at September 30, 2011 compared to $7.30 per common share at September 30, 2010.
• Susquehanna’s regulatory capital ratios are as follows:

	At September 30, 2011	Well-Capitalized Threshold
Tangible Common Ratio(1)	7.74%	N/A
Tier 1 Common Ratio	9.81%	N/A
Leverage Ratio	10.39%	5.0 %
Tier 1 Capital Ratio	12.86%	6.0 %
Total Risk-Based Capital Ratio	14.93%	10.0 %

• Return on average assets and average tangible equity⁽²⁾ for the third quarter ended September 30, 2011 finished at 0.42% and 6.66%, respectively. This compared to results of 0.17% and 2.87% for the same measurements, respectively, for the third quarter of 2010.
• Return on average assets and average tangible equity⁽²⁾ for the first nine months of 2011 finished at 0.34% and 5.61%, respectively. This compared to results of 0.18% and 3.05% for the same measurements, respectively, for the first nine months of 2010.

⁽¹⁾Includes deferred tax liability associated with intangibles of $40.3 million.

⁽²⁾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 – Return on Average Tangible Equity.

Additional Events:

- On October 1, Susquehanna completed the acquisition of Abington Bancorp, Inc., based in Jenkintown, PA. Its 20 branches in Montgomery, Bucks and Delaware counties were rebranded as Susquehanna Bank offices, significantly expanding the bank's branch network in the greater Philadelphia area.

- Susquehanna expects to complete the acquisition of Tower Bancorp, Inc., on February 17, 2012, and has scheduled a special meeting for November 16, 2011, for shareholders to vote on the agreement and plan of merger. The company is on schedule to file the regulatory applications and complete the operational planning for the integration.

Susquehanna will broadcast its third quarter 2011 results conference call over the Internet on October 27, 2011 at 11:00 a.m. Eastern time. The conference call will include management’s discussion of third quarter 2011 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 third 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 is a financial services holding company with assets of greater than $15 billion. Headquartered in Lititz, Pa., Susquehanna provides banking and financial services at 240 branch 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 $6.1 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 release includes forward-looking statements as that term is defined in the U.S. Private Securities Litigation Reform Act of 1995. These statements are subject to certain risks and uncertainties including risks relating to Susquehanna’s plans to complete and integrate its pending acquisition of Tower Bancorp, Inc. and the other risks set forth in Susquehanna's filings with the Securities and Exchange Commission. Susquehanna encourages readers of this release to understand forward-looking statements to be strategic objectives rather than absolute targets of future performance. Forward-looking statements speak only as of the date they are made. Susquehanna does not intend to update publicly any forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made or to reflect the occurrence of unanticipated events except as required by law.

Susquehanna Bancshares, Inc.
P.O. Box 1000
Lititz, PA 17543
SUMMARY FINANCIAL INFORMATION
(Dollars in thousands, except per common share data)
					Nine Months
	3Q11		3Q10		2011		2010
Balance Sheet (EOP)
Investments	$2,699,764		$2,372,066		$2,699,764		$2,372,066
Loans and leases	9,702,669		9,696,800		9,702,669		9,696,800
Allowance for loan & lease losses (ALLL)	190,960		191,115		190,960		191,115
Total assets	14,365,229		14,026,620		14,365,229		14,026,620
Deposits	9,558,631		9,202,178		9,558,631		9,202,178
Short-term borrowings	551,245		584,023		551,245		584,023
Federal Home Loan Bank borrowings	1,115,026		1,117,116		1,115,026		1,117,116
Other long-term debt	672,162		714,741		672,162		714,741
Shareholders' equity	2,035,845		2,099,663		2,035,845		2,099,663
Stated book value per common share	15.65		15.42		15.65		15.42
Tangible book value per common share	7.61		7.30		7.61		7.30
Average Balance Sheet
Investments	$2,520,008		$2,229,299		$2,490,449		$1,995,250
Loans and leases	9,646,189		9,721,291		9,617,097		9,864,094
Total earning assets	12,275,793		12,070,477		12,196,788		11,958,415
Total assets	14,162,662		13,980,383		14,055,428		13,871,263
Deposits	9,485,411		9,203,961		9,357,564		9,162,735
Other short-term borrowings	631,679		589,528		682,007		635,833
FHLB borrowings	1,115,262		1,117,387		1,110,513		1,039,671
Other long-term debt	679,316		718,762		690,061		713,411
Shareholders' equity	2,019,706		2,092,332		2,001,353		2,085,839
Income Statement
Net interest income	$106,839		$105,411		$317,949		$319,933
Provision for loan and lease losses	25,000		40,000		88,000		128,000
Noninterest income	36,800		35,407		111,321		112,360
Noninterest expense	100,745		96,212		297,785		286,679
Income before taxes	17,894		4,606		43,485		17,614
Provision for (benefit from) income taxes	2,934		(1,374	)	7,709		(1,260	)
Net income	14,960		5,980		35,776		18,874
Net income available to common shareholders	14,960		4,584		35,776		6,536
Basic earnings per common share	0.12		0.04		0.28		0.06
Diluted earnings per common share	0.12		0.04		0.28		0.06
Cash dividends paid per common share	0.02		0.01		0.05		0.03
Asset Quality
Net charge-offs (NCOs)	$23,332		$34,680		$88,874		$109,253
Nonaccrual loans & leases	$160,099		$227,418		$160,099		$227,418
Foreclosed real estate	29,563		18,856		29,563		18,856
Total nonperforming assets (NPAs)	$189,662		$246,274		$189,662		$246,274
Restructured loans	$62,331		$119,398		$62,331		$119,398
Loans & leases 90 days past due	13,034		18,005		13,034		18,005
					Nine Months
RATIO ANALYSIS	3Q11		3Q10		2011		2010
Credit Quality
NCOs / Average loans & leases	0.96	%	1.42	%	1.24	%	1.48	%
NPAs / Loans & leases + foreclosed real estate	1.95	%	2.53	%	1.95	%	2.53	%
ALLL / Nonaccrual loans & leases	119.28	%	84.04	%	119.28	%	84.04	%
ALLL / Total loans & leases	1.97	%	1.97	%	1.97	%	1.97	%
Capital Adequacy
Equity / Assets	14.17	%	14.97	%	14.17	%	14.97	%
Long-term debt / Equity	33.02	%	34.04	%	33.02	%	34.04	%
Profitability
Return on average assets	0.42	%	0.17	%	0.34	%	0.18	%
Return on average equity	2.94	%	1.13	%	2.39	%	1.21	%
Return on average tangible equity (1)	6.66	%	2.87	%	5.61	%	3.05	%
Net interest margin	3.58	%	3.58	%	3.61	%	3.69	%
Efficiency ratio	68.32	%	66.68	%	67.63	%	64.80	%
(1) Supplemental Reporting of Non-GAAP-based Financial Measures-Return on average tangible equity

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.

	3Q11		3Q10		2011		2010
Return on average equity (GAAP basis)	2.94	%	1.13	%	2.39	%	1.21	%
Effect of excluding average intangible assets and related amortization	3.72	%	1.74	%	3.22	%	1.84	%
Return on average tangible equity	6.66	%	2.87	%	5.61	%	3.05	%

Susquehanna Bancshares, Inc.
P.O. Box 1000
Lititz, PA 17543
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
	September 30,		December 31,		September 30,
	2011		2010		2010
	(in thousands, except share data)
Assets
Cash and due from banks	$254,074		$200,646		$201,353
Unrestricted short-term investments	31,040		52,252		66,497
Cash and cash equivalents	285,114		252,898		267,850
Interest-bearing deposits held by consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities	4,878		7,260		5,875
Restricted short-term investments	68,290		34,435		60,835
Securities available for sale	2,691,287		2,408,943		2,363,331
Securities held to maturity (fair values approximate $8,477, $8,668, and $8,735)	8,477		8,668		8,735
Loans and leases, net of unearned income	9,503,538		9,417,801		9,472,511
Loans held by consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities	199,131		215,396		224,289
Less: Allowance for loan and lease losses	190,960		191,834		191,115
Net loans and leases	9,511,709		9,441,363		9,505,685
Premises and equipment, net	163,992		165,557		163,205
Other real estate and foreclosed assets	31,036		19,962		18,856
Accrued income receivable	35,358		36,121		37,942
Bank-owned life insurance	359,908		359,579		353,036
Goodwill	1,018,031		1,018,031		1,018,031
Intangible assets with finite lives	27,661		34,076		36,424
Other assets	159,488		167,192		186,815
Total assets	$14,365,229		$13,954,085		$14,026,620
Liabilities and Shareholders' Equity
Deposits:
Demand	$1,404,366		$1,372,235		$1,362,116
Interest-bearing demand	3,964,428		3,646,714		3,527,064
Savings	787,536		767,852		758,672
Time	2,024,999		2,168,503		2,285,754
Time of $100 or more	1,377,302		1,235,903		1,268,572
Total deposits	9,558,631		9,191,207		9,202,178
Federal Home Loan Bank short-term borrowings	400,000		300,000		300,000
Other short-term borrowings	551,245		770,623		584,023
Federal Home Loan Bank long-term borrowings	715,026		801,620		817,116
Other long-term debt	176,032		176,038		176,040
Junior subordinated debentures	323,221		322,880		322,742
Long-term debt of consolidated variable interest entities for which creditors do not have recourse to Susquehanna's general credit	172,909		207,036		215,959
Accrued interest, taxes, and expenses payable	47,841		46,449		57,099
Deferred taxes	48,620		33,729		38,329
Other liabilities	335,859		119,701		213,471
Total liabilities	12,329,384		11,969,283		11,926,957
Shareholders' equity:
Preferred stock, $1,000 liquidation value, 5,000,000 shares authorized.
Outstanding: 0 at September 30, 2011 and December 31, 2010 and 100,000 at September 30, 2010	0		0		97,891
Common stock, $2.00 par value, 400,000,000 shares authorized.
Issued: 130,115,580 at September 30, 2011; 129,965,635 at December 31, 2010; and 129,794,795 at September 30, 2010	260,231		259,931		259,590
Treasury stock, at cost. 5,096 at September 30, 2011 and 0 at December 31, 2010 and September 30, 2010	(39	)	0		0
Additional paid-in capital	1,298,607		1,301,042		1,300,102
Retained earnings	511,239		481,964		474,161
Accumulated other comprehensive loss, net of taxes of $19,221; $32,526; and $17,983, respectively	(34,193	)	(58,135	)	(32,081	)
Total shareholders' equity	2,035,845		1,984,802		2,099,663
Total liabilities and shareholders' equity	$14,365,229		$13,954,085		$14,026,620

Susquehanna Bancshares, Inc.
P.O. Box 1000
Lititz, PA 17543
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2011		2010		2011		2010
	(in thousands, except per share data)
Interest Income:
Loans and leases, including fees	$128,234		$134,047		$382,231		$406,529
Securities:
Taxable	13,993		13,468		44,700		40,955
Tax-exempt	3,958		3,891		11,944		10,951
Dividends	994		1,027		3,012		2,964
Short-term investments	29		56		80		129
Total interest income	147,208		152,489		441,967		461,528
Interest Expense:
Deposits:
Interest-bearing demand and savings	5,274		5,785		16,711		17,475
Time	13,595		19,196		42,884		62,990
Federal Home Loan Bank short-term borrowings	3,083		711		8,421		749
Other short-term borrowings	2,220		982		5,954		2,277
Federal Home Loan Bank long-term borrowings	7,884		11,148		23,767		31,844
Other long-term debt	8,313		9,256		26,281		26,260
Total interest expense	40,369		47,078		124,018		141,595
Net interest income	106,839		105,411		317,949		319,933
Provision for loan and lease losses	25,000		40,000		88,000		128,000
Net interest income, after provision for loan and lease losses	81,839		65,411		229,949		191,933
Noninterest Income:
Service charges on deposit accounts	8,206		8,923		24,039		25,878
Vehicle origination and servicing fees	1,979		1,717		5,878		5,202
Asset management fees	7,046		6,653		21,332		21,279
Income from fiduciary-related activities	1,819		1,784		5,507		5,375
Commissions on brokerage, life insurance and annuity sales	1,894		1,866		6,504		5,527
Commissions on property and casualty insurance sales	2,956		2,589		10,409		8,871
Other commissions and fees	7,075		6,103		19,581		17,715
Income from bank-owned life insurance	1,136		1,218		3,392		3,849
Net gain on sale of loans and leases	2,953		2,580		9,423		7,312
Net realized gain on sales of securities	1,653		393		4,584		11,285
Total other-than-temporary impairment, net of recoveries	(894	)	119		(5,260	)	(4,004	)
Portion of loss (gain) recognized in other comprehensive income (before taxes)	679		(441	)	2,200		945
Net impairment losses recognized in earnings	(215	)	(322	)	(3,060	)	(3,059	)
Other	298		1,903		3,732		3,126
Total noninterest income	36,800		35,407		111,321		112,360
Noninterest Expenses:
Salaries and employee benefits	53,315		48,850		157,719		146,243
Occupancy	8,982		8,610		27,499		26,961
Furniture and equipment	3,143		3,335		9,448		10,422
Advertising and marketing	3,138		2,980		8,624		8,875
FDIC insurance	3,596		4,500		12,383		13,284
Legal fees	3,425		2,823		8,742		6,422
Amortization of intangible assets	2,118		2,346		6,415		7,089
Vehicle lease disposal	2,676		3,923		7,733		11,095
Other	20,352		18,845		59,222		56,288
Total noninterest expenses	100,745		96,212		297,785		286,679
Income before income taxes	17,894		4,606		43,485		17,614
Provision for (benefit from) income taxes	2,934		(1,374	)	7,709		(1,260	)
Net Income	14,960		5,980		35,776		18,874
Preferred stock dividends and accretion	0		1,396		0		12,338
Net Income Available to Common Shareholders	$14,960		$4,584		$35,776		$6,536
Earnings per common share:
Basic	$0.12		$0.04		$0.28		$0.06
Diluted	$0.12		$0.04		$0.28		$0.06
Cash dividends per common share	$0.02		$0.01		$0.05		$0.03
Average common shares outstanding:
Basic	129,837		129,687		129,775		118,103
Diluted	129,895		129,718		129,846		118,135

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				For the Three-month Period Ended
	September 30, 2011				September 30, 2010
	Average				Average
(Dollars in thousands)	Balance		Interest	Rate (%)	Balance		Interest	Rate (%)
Assets
Short-term investments	$109,596		$29	0.10	$119,887		$56	0.19
Investment securities:
Taxable	2,120,258		14,988	2.80	1,847,854		14,495	3.11
Tax-advantaged	399,750		6,089	6.04	381,445		5,985	6.22
Total investment securities	2,520,008		21,077	3.32	2,229,299		20,480	3.64
Loans and leases, (net):
Taxable	9,329,138		125,083	5.32	9,468,492		131,479	5.51
Tax-advantaged	317,051		4,848	6.07	252,799		3,951	6.20
Total loans and leases	9,646,189		129,931	5.34	9,721,291		135,430	5.53
Total interest-earning assets	12,275,793		151,037	4.88	12,070,477		155,966	5.13
Allowance for loan and lease losses	(193,986	)			(190,022	)
Other non-earning assets	2,080,855				2,099,928
Total assets	$14,162,662				$13,980,383
Liabilities
Deposits:
Interest-bearing demand	$3,796,621		4,999	0.52	$3,486,885		5,492	0.62
Savings	796,735		275	0.14	769,946		293	0.15
Time	3,490,946		13,595	1.55	3,606,545		19,196	2.11
Short-term borrowings	631,679		2,220	1.39	589,528		982	0.66
FHLB borrowings	1,115,262		10,967	3.90	1,117,387		11,859	4.21
Long-term debt	679,316		8,313	4.86	718,762		9,256	5.11
Total interest-bearing liabilities	10,510,559		40,369	1.52	10,289,053		47,078	1.82
Demand deposits	1,401,109				1,340,585
Other liabilities	231,288				258,413
Total liabilities	12,142,956				11,888,051
Equity	2,019,706				2,092,332
Total liabilities & shareholders' equity	$14,162,662				$13,980,383
Net interest income / yield on average earning assets			$110,668	3.58			$108,888	3.58

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 Nine-month Period Ended				For the Nine-month Period Ended
	September 30, 2011				September 30, 2010
	Average				Average
(Dollars in thousands)	Balance		Interest	Rate (%)	Balance		Interest	Rate (%)
Assets
Short-term investments	$89,242		$80	0.12	$99,071		$129	0.17
Investment securities:
Taxable	2,088,386		47,712	3.05	1,643,525		43,919	3.57
Tax-advantaged	402,063		18,375	6.11	351,725		16,848	6.40
Total investment securities	2,490,449		66,087	3.55	1,995,250		60,767	4.07
Loans and leases, (net):
Taxable	9,312,112		373,614	5.36	9,606,701		398,707	5.55
Tax-advantaged	304,985		13,257	5.81	257,393		12,034	6.25
Total loans and leases	9,617,097		386,871	5.38	9,864,094		410,741	5.57
Total interest-earning assets	12,196,788		453,038	4.97	11,958,415		471,637	5.27
Allowance for loan and lease losses	(195,404	)			(182,688	)
Other non-earning assets	2,054,044				2,095,536
Total assets	$14,055,428				$13,871,263
Liabilities
Deposits:
Interest-bearing demand	$3,712,438		15,842	0.57	$3,428,980		16,595	0.65
Savings	794,693		869	0.15	766,487		880	0.15
Time	3,476,077		42,884	1.65	3,681,513		62,990	2.29
Short-term borrowings	682,007		5,954	1.17	635,833		2,277	0.48
FHLB borrowings	1,110,513		32,188	3.88	1,039,671		32,593	4.19
Long-term debt	690,061		26,281	5.09	713,411		26,260	4.92
Total interest-bearing liabilities	10,465,789		124,018	1.58	10,265,895		141,595	1.84
Demand deposits	1,374,356				1,285,755
Other liabilities	213,930				233,774
Total liabilities	12,054,075				11,785,424
Equity	2,001,353				2,085,839
Total liabilities & shareholders' equity	$14,055,428				$13,871,263
Net interest income / yield on average earning assets			$329,020	3.61			$330,042	3.69

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.
Loans and Leases
(Dollars in thousands)
	Total Loans and Leases
		09/30/11					12/31/10				09/30/10
Commercial, financial, and agricultural	$	1,810,664				$	1,816,519			$	1,829,217
Real estate - construction		771,734					877,223				914,761
Real estate secured - residential		2,728,934					2,666,692				2,664,042
Real estate secured - commercial		3,013,787					2,998,176				3,021,525
Consumer		698,804					603,084				576,912
Leases		678,746					671,503				690,343
Total loans and leases	$	9,702,669				$	9,633,197			$	9,696,800
	Nonaccrual Loans and Leases
		09/30/11			06/30/11		03/31/11		12/31/10		09/30/10
Commercial, financial, and agricultural	$	14,421		$	18,219	$	19,972	$	20,012	$	22,522
Real estate - construction		37,487			44,305		56,446		57,779		76,418
Real estate secured - residential		41,238			51,047		55,930		50,973		47,564
Real estate secured - commercial		65,377			73,346		77,533		65,313		77,858
Consumer		0			0		0		1		2
Leases		1,576			3,816		3,060		2,817		3,054
Total nonaccrual loans and leases	$	160,099		$	190,733	$	212,941	$	196,895	$	227,418
	Restructured Loans
		09/30/11			06/30/11		03/31/11		12/31/10		09/30/10
Commercial, financial, and agricultural	$	11,820		$	14,387	$	14,999	$	15,877	$	14,796
Real estate - construction		0			0		298		6,125		4,847
Real estate secured - residential		13,389			12,734		9,363		11,300		20,236
Real estate secured - commercial		36,974			34,874		53,799		81,034		78,692
Consumer		148			148		0		230		827
Total restructured loans	$	62,331		$	62,143	$	78,459	$	114,566	$	119,398
	Net Charge-offs (Recoveries)
	3Q 2011			2Q 2011		1Q 2011		4Q 2010		3Q 2010
Commercial, financial, and agricultural	$	5,322		$	9,138	$	3,700	$	2,335	$	4,298
Real estate - construction		6,489			6,352		8,154		20,607		15,017
Real estate secured - residential		5,262			5,042		3,803		5,477		3,117
Real estate secured - commercial		5,612			10,467		14,442		4,132		10,149
Consumer		(99	)		67		2,079		366		451
Leases		746			875		1,423		1,364		1,648
Total net charge-offs	$	23,332		$	31,941	$	33,601	$	34,281	$	34,680

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