Susquehanna Bancshares (SUSQ) 8-K Pro Forma Condensed Combined Statement of Income

Exhibit 99.1

Susquehanna Bancshares, Inc.

Pro Forma Condensed Combined Statement of Income

	For the Twelve Months Ended December 31, 2007
	As Reported						Pro Forma
	Susquehanna			CMTY 1/1-11/16			Adjustments			Combined
	(Dollars in thousands, except per share data)
INTEREST INCOME:
Loans and leases, including fees	$	444,690		$	161,187		$	1,752	(A)	$	607,629
Securities		76,685			31,076			86	(B)		107,847
Short-term investments		4,782			1,947						6,729
Total interest income		526,157			194,210			1,838			722,205
INTEREST EXPENSE:
Deposits		190,523			72,514			(8,529	) (C)		254,508
Short-term borrowings		17,464			3,627						21,091
FHLB and other borrowings		27,600			17,623			(1,738	) (D)		43,485
Long-term debt		14,667			4,408			581	(E)		19,656
Total interest expense		250,254			98,172			(9,686	)		338,740
Net interest income		275,903			96,038			11,524			383,465
Provision for loan and lease losses		21,844			5,300						27,144
Net interest income, after provision for loan and lease losses		254,059			90,738			11,524			356,321
NONINTEREST INCOME:
Service charges on deposit accounts		31,413			14,287						45,700
Vehicle origination and servicing fees		14,323			0						14,323
Asset management fees		19,843			1,933						21,776
Income from fiduciary-related activities		7,479			2,915						10,394
Net gain on sale of loans and leases		8,427			1,824						10,251
Commissions on insurance sales		12,751			3,831						16,582
Net gain on securities		(11,857	)		(4,080	)					(15,937	)
Other		38,280			11,505						49,785
Total noninterest income		120,659			32,215			0			152,874
NONINTEREST EXPENSES:
Salaries and employee benefits		144,508			45,118						189,626
Occupancy and equipment		36,552			13,894			733	(F)		51,179
Amortization of intangible assets		3,525			2,579			3,692	(G)		9,796
Vehicle lease disposal		12,651			0						12,651
Other		79,719			43,411						123,130
Total noninterest expenses		276,955			105,002			4,425			386,382
Income before income taxes		97,763			17,951			7,099			122,813
Provision for income taxes		28,670			2,495			1,727	(H)		32,892
NET INCOME	$	69,093		$	15,456		$	5,372		$	89,921
Earnings per share:
Basic	$	1.23								$	1.05
Diluted	$	1.23								$	1.05
Average shares outstanding:
Basic		56,297			24,776			(24,776	)		85,830
								29,533
Diluted		56,366			25,001			(25,001	)		85,899
								29,533

The accompanying notes are integral part of this financial statement.

The pro forma adjustments included in the unaudited pro forma combined condensed financial information are as follows:

(A) Amortization of the fair value adjustments for fixed-rate loans over estimated life of the loans.

(B) Amortization of the fair value adjustments for held to maturity investments, including the reclass of available for sale gain position to an amortizing premium, over estimated life of the investments.

(C) Amortization of the fair value adjustments for non-core deposits over estimated life of the deposits.

(D) Amortization of the fair value adjustments for FHLB borrowings over estimated life of the instruments.

(E) Amortization of the fair value adjustments for long-term borrowings and trust preferred securities over estimated life of the instruments.

(F) Amortization of fair value adjustment for owned premises over the remaining useful life.

(G) Amortization of the fair value of intangible assets including core deposit intangible, customer intangibles related to Community’s insurance and asset management businesses and originated mortgage servicing rights, over a ten year period.

(H) To record the tax effect of pro forma adjustments, using Susquehanna’s incremental tax rate of 35%.