Susquehanna Bancshares (SUSQ) 8-K During the course of this presentation, we may make projections and other

Susquehanna Bancshares, Inc.

Investor Presentation

1

st

Quarter 2013

Exhibit 99.1

Forward-Looking Statements

Forward-Looking Statements

2

During the course of this presentation, we may make projections and other

forward-looking statements regarding priorities and strategic objectives

of

Susquehanna Bancshares, Inc., as well as projected capital ratios, efficiency

ratios, net income and earnings. We encourage investors to understand

forward-looking statements to be strategic objectives rather than absolute

targets of future performance.   We wish to caution you that these forward-

looking statements may differ materially from actual results due

to a number of

risks and uncertainties.  For a more detailed description of the

factors that may

affect Susquehanna’s operating results, we refer you to our filings with the

Securities & Exchange Commission, including our annual report on

Form 10-K

for the year ended December 31, 2011 and Form 10-Q for the quarter ended

September 30, 2012. Susquehanna assumes no obligation to update the

forward-looking statements made during this presentation.

For more information, please visit our Web site at:

www.susquehanna.net

Who is Susquehanna?

Who is Susquehanna?

Corporate Overview

Super-community bank headquartered in 

Lititz, PA

261 banking offices concentrated in Central

PA, Western MD, and Philadelphia and

Baltimore MSAs

35

largest

U.S.

commercial

bank

by

assets

Experienced management team with extensive

market knowledge

Franchise is a diversified mix of consumer and

business customers, products and revenue

sources

Non-bank affiliates offering products and

services in:

Wealth management

Insurance brokerage and employee benefits

Commercial finance

Vehicle leasing

Selected Data as of 12/31/2012 

Assets:

$18.0 billion

Deposits:

$12.6 billion

Loans & Leases:

$12.9 billion

Assets under management

$7.6 billion

and administration:

Market Cap:

>$2.1 billion*

Average daily volume (3 months)

>900 thousand shares

Institutional ownership

> 70%                   

Dividend yield

2.67%**

* Based on closing price on February 1, 2013

**Based on 4Q12 dividend of $.07 per share

3

th

Uniquely Positioned

Uniquely Positioned

Source: SNL Financial

Note: Regulatory branch and deposit data as of June 30, 2012; banks and thrifts with deposits in counties SUSQ operates in PA/NJ/MD/WV

Traditional branches only, as defined by SNL

4

Rank

Institution

Branch Count

Total Deposits

in Market

($000)

Total Market

Share (%)

1

Wells Fargo & Co.

373

41,021,142

15.3%

2

PNC Financial Services Group Inc.

357

27,078,388

10.1%

3

Bank of America Corp.

224

25,599,340

9.5%

4

M&T Bank Corp.

292

23,873,751

8.9%

5

Toronto-Dominion Bank

164

19,136,622

7.1%

6

Royal Bank of Scotland Group Plc

177

17,058,543

6.3%

7

Susquehanna Bancshares Inc.

262

12,569,634

4.7%

8

Fulton Financial Corp.

187

9,428,543

3.5%

9

Banco Santander SA

176

8,654,240

3.2%

10

National Penn Bancshares Inc.

110

5,622,573

2.1%

11

BB&T Corp.

68

4,051,430

1.5%

12

Beneficial Mutual Bancorp Inc. (MHC)

61

3,645,268

1.4%

13

First Niagara Financial Group Inc.

63

2,684,122

1.0%

14

Metro Bancorp Inc.

33

2,106,159

0.8%

15

Citigroup Inc.

26

2,015,670

0.8%

Total

(1-15)

2,573

204,545,425

76.1%

Total

(1-248)

3,970

268,686,154

100.0%

Deposit Market Share: Counties of Operation

Increased share in 14 out of 22

MSAs from 2011 to 2012

Top 3 market share in 12

counties

Top 5 market share in half the

MSAs where we do business

Largest locally based

community bank

Significant opportunities exist

to gain market share

2012 in Review: 

Delivering on our Commitments

2012 in Review: 

Delivering on our Commitments

Continue strong progress

in improving credit quality

Complete and successfully

integrate Tower acquisition

$30M cost-save estimate exceeded

Grow loans, deposits

and revenue

Organic loan growth of 4.5%

Organic core deposit growth of 9.8%

Core revenue growth of 31% to $758M

Increase profitability and

shareholder dividends

1

Regular cash dividends of $0.21 per share declared in 2012 excludes additional $0.07

accelerated first quarter 2013 dividend declared and paid in December 2012.

2

Non-GAAP based financial measure.  Please refer to the calculations and management’s

reasons

for

using

this

measure

on

the

slide

titled

“Non-GAAP

Reconciliation”

at

the

conclusion of this presentation.

Performance

Highlights

2012

2011

EPS

$

0.77

$

0.40

Cash Dividends

$

0.21

$

0.08

ROAA

0.81

%

0.38

%

ROATE

12.03

%

6.01

%

Net Interest Margin

4.01

%

3.60

%

Efficiency Ratio

60.37

%

66.86

%

NCOs/Average Loans

0.55

%

1.16

%

NPAs/Loans & OREO

0.96

%

1.88

%

5

1

2

2

4

th

Quarter 2012 Highlights

4

th

Quarter 2012 Highlights

GAAP EPS of $0.23

Increase of 92% from $0.12 in 4Q11

Steady organic loan growth

Commercial loans increased 4.8%

Total loans and leases grew 1.7%

Strong core deposit growth

Core deposits grew 2.1%

Increase in net interest margin

Improvement of 14 basis points to 4.06%

Continued improvement in credit quality metrics

NPAs declined to 0.96% of loans, leases and foreclosed real estate

Strong coverage ratio with allowance representing 188% of nonaccrual loans

and leases

6

Building on Momentum

Building on Momentum

Regional structure that empowers local community bankers with

the authority, incentives and products they need to drive loan

growth, particularly in consumer lending and small business and

middle-market banking

Peer leading net interest margin to be defended by further

improving funding costs, including continued core deposit

growth, and ongoing active balance sheet management

Growing fees as a percentage of total revenues by investing in

non-bank businesses, building full client relationships and

maximizing significant untapped cross-sell potential

Committed to continuous delivery model improvement, after

streamlining expense structure and improving efficiency in 2012

Strong capital position and focus on growing returns enhances

ability to execute on organic and strategic growth opportunities

7

1.

Take share, drive

organic loan growth

2.

Defend Margin

3.

Grow fee revenue

4.

Maintain efficiency

5.

Accelerate capital

generation and returns

Opportunity

Susquehanna

Core Deposit Growth

Commercial and Consumer

Loan Growth

Expand Fee Income as a % of

Total Revenue

Differentiated Customer

Experience

Elevate Employee Engagement

Focus for 2013

Focus for 2013

8

Technology and mobile delivery

Retail and commercial products

enhancements

Enhance C&I talent and capacity

Increase cross-sell

Talent and leadership

development

Process review and

improvements

Objectives

Selected Initiatives

Loan Growth

Loan Growth

9

$8.8 Billion

$12.9 Billion

Strong Loan Growth Momentum

Organic loan growth in 2012 of 4.5%

Total loan and lease originations were up 31% year over year in 4Q12

Commercial loans increased 4.8% in 4Q12

Commercial loan originations were up 51% year over year in 4Q12

Total Loans 12/31/2007

Total Loans 12/31/2012

Consumer,

6%

Leases, 7%

Commercial,

financial and

agricultural,

18%

Real estate -

construction

7%

Real estate

secured -

commercial,

31%

Real estate

secured -

residential,

31%

Consumer,

5%

Leases, 5%

Commercial,

financial and

agricultural,

20%

Real estate –

construction

15%

Real estate

secured -

commercial,

30%

Real estate

secured -

residential,

25%

Organic Loan CAGR:  

5.4%

Asset Quality Continues to Improve

Asset Quality Continues to Improve

10

1.42

0.50

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

Net Charge-Offs / Average Loans & Leases (%)

2.49

0.96

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

NPAs / Loans & leases + foreclosed real estate (%)

90.74

188.22

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

ALLL / Nonaccrual loans & leases (%)

Positioned For Further Growth

Positioned For Further Growth

11

Pennsylvania Market

Delaware Valley Market

Maryland Market

Includes Baltimore and four of the

nation’s 45 most-affluent counties

including no. 5, Howard County.

Growth opportunities fueled by world-

leading education, health care and

research institutions, as well as major

federal agencies and contractors.

The

16

counties

comprising

the

company’s

Pennsylvania

Market,

the

10

counties

comprising

the

company’s

Delaware

Valley

Market

and

the

13

counties

comprising

the

company’s

Maryland

Market

are

listed

in

the

“Additional

Materials”

slides

at

the

conclusion

of

this

presentation

Foundation for growth with stable

commercial and retail banking base

providing ample deposits.

Home to distribution hubs for global

retailers, manufacturers and

distributors serving Northeast and

Mid-Atlantic markets.

Includes Philadelphia and the

state’s four most-affluent

counties.

Growth opportunities fueled by

world-leading education, health

care and research institutions.

Market Opportunity

Market Opportunity

12

HOME MARKET:

METRO GROWTH MARKETS:

Central PA

5

Philadelphia

6

Baltimore

7

2007

2012

2012

2012

Total Deposits

$55.5 B

$65.3 B

18% Growth

$128.5 B

$63.0 B

in

Current

Market

SUSQ Deposits

$2.2 B

$5.9 B

170% Growth

$3.0 B

$1.2 B

Rank/Market Share

#9 / 3.9%

#5 / 9.0%

#8 / 2.4%

#7 / 1.9%

Primary Competitors

PNC, M&T, Fulton

TD, RBS, PNC

M&T, PNC, BB&T

Median

Household

Income

$50,976

$58,051

$62,687

Estimated Household Income

19.7%

23.1%

22.8%

Growth

from

2011-2016

Population

3.6 M

3.7 M

3.5% Growth

5.3 M

2.7 M

Estimated Population

3.1%

1.8%

2.3%

Growth

from

2011-2016

# of Businesses with

135,105

222,902

102,402

< $10M

in

Sales

1 

Source: FDIC Deposit Market Share Report

2

Source: SNL, ESRI.  Household Income data reported for Philadelphia and Baltimore metro markets represents Philadelphia-Camden-Wilmington and Baltimore-Towson MSAs, respectively

3

Source: SNL, ESRI

4

Source: The Nielsen Company

5 

16

counties

comprising

Susquehanna’s

Pennsylvania

Market.

Please

refer

to

the

market

definitions

set

forth

in

the

“Additional

Materials”

slides

at

the

conclusion

of

this

presentation.

6

Philadelphia Metro = Bucks, Burlington, Camden, Chester, Delaware, Gloucester, Montgomery and Philadelphia counties

7

Baltimore Metro = Anne Arundel, Baltimore, Baltimore (City), Carroll, Harford and Howard counties

1

2

2

3

4

Defending Net Interest Margin

Defending Net Interest Margin

13

Active Balance Sheet Management

Focus on core deposit growth

FHLB debt prepayment

Trust preferred and sub debt redemption

Countering the Headwinds

Increase low cost core deposits

$400+ million in high rate CD’s maturing in 2013

Additional opportunities to reduce funding costs

may still exist

*  Peer company information is  per SNL Financial.  Identification of peer companies is included in the “Additional Materials” at the conclusion of this presentation. 

Core Deposit Growth

Core Deposit Growth

14

$8.9 Billion

$12.6 Billion

Total Deposits 12/31/2007

Total Deposits 12/31/2012

Strong Core Deposit Growth Momentum

Organic deposit growth in 2012 of 2.1%

Organic core deposit growth in 2012 of 9.8%

Demand

Deposits,

14%

Interest-

bearing

demand,

32%

Savings, 8%

Time of

$100K or

more, 15%

Time <

$100K, 31%

Demand

Deposits,

16%

Interest-

bearing

demand,

46%

Savings, 8%

Time of

$100K or

more, 12%

Time <

$100K, 18%

Organic Core Deposit CAGR:  

7.3%

Growing Fee Revenue

Growing Fee Revenue

15

($ in millions)

2012

2011

$

%

Service charges on deposit accounts

34.4

$    

31.7

$      

2.7

$      

8.5%

Asset management fees

29.1

28.2

0.9

3.5%

Net gain on sale of loans and leases

20.2

12.7

7.5

58.8%

Commissions on property and casualty insurance sales

15.9

14.0

1.9

13.1%

Vehicle origination and servicing fees

10.4

7.9

2.5

31.8%

Income from fiduciary-related activities

10.3

7.3

3.0

40.0%

Commissions on brokerage, life insurance and annuity sales

8.3

8.2

0.1

1.2%

Noninterest Income ($000)

Growth Over 2011

Efficiency Focus Benefits

Core Performance

Efficiency Focus Benefits

Core Performance

16

*Efficiency

ratio

excludes

net

realized

gain

on

acquisition,

merger

related

expenses

and

loss

on

extinguishment

of

debt.

Please

refer

to

the

calculations

on

the

slides

titled

“Non-GAAP

Reconciliation ”

at the conclusion of this presentation.

($000)

66.34%

61.93%

60.21%

58.98%

60.96%

$75,000

$95,000

$115,000

$135,000

$155,000

$175,000

$195,000

$215,000

4Q11

1Q12

2Q12

3Q12

4Q12

Total Revenue

Total Noninterest Expense

Efficiency Ratio

Delivered on commitment to lower efficiency ratio

Achieved desired cost savings of $58 million from acquisitions

and core Susquehanna operations

Opportunity exists to optimize delivery model, including planned

investments in technology and web/mobile banking

Capital Generation and Returns

Capital Generation and Returns

Capital ratios remain strong

•

Support continued organic growth

•

Position for changing regulatory landscape

•

Increase quarterly cash dividends to shareholders

•

Consider strategic M&A opportunities

17

Tangible

Common

Equity

1

Tier 1

Common /

RWA

Tier 1

Leverage

Tier 1

Risk-Based

Total

Risk-Based

Dec. 31, 2012

7.94%

9.94%

8.98%

11.08%

12.63%

Management

Minimum

Target

7.50%

8.00%

6.00%

9.50%

11.50%

1

The tangible common equity ratio is a non-GAAP based financial measure.  Please refer to the calculations and management’s reasons for using this measure on the slide titled   

“Non-GAAP

Reconciliation”

at

the

conclusion

of

this

presentation.

Capital generation has benefited from leading ROATE and 30%

dividend payout ratio

Growing capital strength ensures ability to execute on capital

allocation priorities

Earnings Power Drives Returns

Earnings Power Drives Returns

18

Earnings and Dividends

ROATE

1

ROAA

1

Return on average tangible equity is a non-GAAP based financial measure.  Please refer to the calculations and management’s reasons for using this measure on the slide titled “Non-

GAAP Reconciliation”

at the conclusion of this presentation.

Diluted EPS

(GAAP)

Accelerated

1Q13

Dividend

30% Payout

Ratio

Dividends

Declared

Building on Momentum

Building on Momentum

Regional structure that empowers local community bankers with

the authority, incentives and products they need to drive loan

growth, particularly in consumer lending and small business and

middle-market banking

Peer leading net interest margin to be defended by further

improving funding costs, including continued core deposit

growth, and ongoing active balance sheet management

Growing fees as a percentage of total revenues by investing in

non-bank businesses, building full client relationships and

maximizing significant untapped cross-sell potential

Committed to continuous delivery model improvement, after

streamlining expense structure and improving efficiency in 2012

Strong capital position and focus on growing returns enhances

ability to execute on organic and strategic growth opportunities

19

1.

Take share, drive

organic loan growth

2.

Defend Margin

3.

Grow fee revenue

4.

Maintain efficiency

5.

Accelerate capital

generation and returns

Opportunity

Susquehanna

Additional Materials

Executive Leadership Team

Executive Leadership Team

21

Critical Mass in Attractive Markets

Critical Mass in Attractive Markets

1  

The 16 counties comprising the company’s Pennsylvania Market, the 10 counties comprising the company’s Delaware Valley Market and the 13 counties

comprising

the

company’s

Maryland

Market

are

listed

in

the

“Additional

Materials”

slides

at

the

conclusion

of

this

presentation

2

Company data as of 9/30/12.  Percentages based on internal company  commercial and retail market allocations.  Excludes leases and tax free loans and brokered and inter-company deposits.  

3

FDIC June 30 deposit market share data as reported by SNL Financial for the counties comprising each of the company’s three markets.

4

U.S. Census Bureau’s American Community Survey of median household income by county

22

Susquehanna Bank Market

Pennsylvania

Delaware

Valley

Maryland

Branches

124

71

66

Loans

as

%

of

total

45%

27%

28%

Deposits

as

%

of

total

44%

30%

26%

Deposit

market

share

(rank)

9.0%

(5

)

2.7%

(8

)

4.5%

(6

)

7.6%

(6

)

1.3%

(9

)

3.8%

(6

)

3.9%

(9

)

1.2%

(12

)

4.2%

(7

)

Delaware Valley Market

Maryland Market

2012

2011

2007

Foundation for growth with stable

commercial and retail banking base

providing ample deposits.

Home to distribution hubs for global

retailers, manufacturers and distributors

serving Northeast and Mid-Atlantic

markets.

Pennsylvania Market

Includes Philadelphia and the state’s four

most-affluent counties.

4

Growth opportunities fueled by world-leading

education, health care and research

institutions.

Includes Baltimore and four of the nation’s

45 most-affluent counties including no. 5,

Howard County.

4

Growth opportunities fueled by world-

leading education, health care and research

institutions, as well as major federal

agencies and contractors.

th

3

2

2

th

th

th

th

th

th

th

1

th

4th Quarter 2012 Financial Highlights

4th Quarter 2012 Financial Highlights

(Dollars in thousands, except earning per share data)

12/31/2012

9/30/2012

12/31/2011

Balance Sheet:

Loans and Leases

12,894,741

$ 

12,675,607

$ 

10,447,930

$ 

Deposits

12,580,046

$ 

12,725,379

$ 

10,290,472

$ 

Income Statement:

Net interest income

155,304

$      

149,142

$      

115,201

$      

Pre-tax pre-provision income

73,799

$        

69,893

$        

24,153

$        

Provision for loan and lease losses

13,000

$        

16,000

$        

22,000

$        

GAAP Net Income

43,174

$        

36,732

$        

19,129

$        

GAAP EPS

0.23

$            

0.20

$            

0.12

$            

Quarterly Performance Highlights

23

Quarterly Loan and Lease

Originations

Quarterly Loan and Lease

Originations

Average Balance*               

($ in Millions)

   Balance

Originations

  Balance

Originations

  Balance

Originations

  Balance

Originations

  Balance

Originations

Commercial

1,587

$      

150

$              

1,708

$      

115

$              

1,847

$      

206

$              

1,870

$      

167

$              

1,898

$      

226

$              

Real Estate - Const & Land

812

92

863

95

936

74

899

101

859

92

Real Estate - 1-4 Family Res

1,818

77

2,033

68

2,262

101

2,279

86

2,274

72

Real Estate - Commercial

3,348

132

3,872

191

4,350

110

4,315

121

4,276

136

Real Estate - HELOC

908

65

1,013

52

1,128

88

1,169

93

1,209

89

Tax-Free

330

7

346

53

379

22

390

55

430

4

Consumer Loans

709

97

736

96

764

116

794

110

810

104

Commercial Leases

282

82

287

76

306

79

299

81

289

85

Consumer Leases

370

43

367

43

376

65

424

86

512

167

VIE

193

-

187

-

180

-

173

-

168

-

Total

10,357

$    

745

$              

11,412

$    

789

$              

12,528

$    

862

$              

12,612

$    

900

$              

12,725

$    

975

$              

4Q12

3Q12

2Q12

1Q12

4Q11

24

*By collateral type

Loan Mix & Yield

Loan Mix & Yield

$ in millions

Avg Bal QTR*

INT % QTR

Commercial

$  1,587

5.31%

$  1,708

5.24%

$  1,847

5.43%

$  1,870

5.31%

$  1,898

5.35%

Real Estate - Const & Land

         812

4.95%

        863

5.60%

         936

5.66%

         899

5.64%

         859

5.90%

Real Estate - 1-4 Family Res

     1,818

5.22%

     2,033

5.27%

     2,262

5.26%

     2,279

5.03%

     2,274

4.97%

Real Estate - Commercial

     3,348

5.45%

     3,872

5.46%

     4,350

5.78%

     4,315

5.60%

     4,276

5.51%

Real Estate - HELOC

         908

3.83%

     1,013

3.98%

     1,128

3.81%

     1,169

3.82%

     1,209

3.74%

Tax-Free

         330

5.11%

        346

5.60%

         379

5.45%

         390

5.40%

         430

5.47%

Consumer Loans

         709

5.48%

        736

5.33%

         764

5.21%

         794

5.02%

         810

4.95%

Commercial Leases

         282

7.90%

        287

7.98%

         306

7.72%

         299

7.48%

         289

7.50%

Consumer Leases

         370

4.75%

        367

4.73%

         376

4.60%

         424

4.30%

         512

4.11%

VIE

         193

4.54%

        187

4.47%

         180

4.46%

         173

4.42%

         168

4.39%

Total Loans

$10,357

5.22%

$11,412

5.29%

$12,528

5.33%

$12,612

5.23%

$12,725

5.18%

4Q12

3Q12

2Q12

1Q12

4Q11

25

*By collateral type

CRE and Construction Composition

CRE and Construction Composition

26

At December 31, 2012

Office, 17%

Retail, 15%

Other, 13%

Residential, 10%

Service, 8%

Land, 7%

Warehouse, 6%

Hotels -

Motels, 6%

Multi-Family, 5%

Mixed Use, 5%

Commercial Construction,

5%

Industrial/Manufacturing, 2%

Recreational, 1%

Asset Quality

($ in Millions)

Asset Quality

($ in Millions)

($ in million)

4Q11

1Q12

2Q12

3Q12

4Q12

NPL's Beginning of Period

160.1

$  

156.5

$  

133.5

$

127.3

$

118.4

$

New NonAccruals

43.8

22.3

34.5

17.3

19.0

Cure/Exits/Other

(10.1)

(28.8)

(16.8)

(6.2)

(21.5)

Gross Charge-Offs

(25.6)

(11.0)

(17.3)

(15.8)

(15.4)

Transfer to OREO

(11.7)

(5.5)

(6.6)

(4.2)

(2.7)

NPL's End of Period

156.5

$  

133.5

$  

127.3

$

118.4

$

97.8

$  

27

$156

$133

$127

$118

$98

$75

$85

$95

$105

$115

$125

$135

$145

$155

$165

4Q11

1Q12

2Q12

3Q12

4Q12

Non Accruals

$73

$72

$67

$57

$68

$30

$35

$40

$45

$50

$55

$60

$65

$70

$75

$80

4Q11

1Q12

2Q12

3Q12

4Q12

TDRs

Asset Quality

($ in Millions)

Asset Quality

($ in Millions)

28

*Legacy Susquehanna

$300

$313

$275

$285

$259

$200

$220

$240

$260

$280

$300

$320

4Q11

1Q12

2Q12

3Q12

4Q12

OAEM*

$383

$346

$365

$334

$339

$250

$275

$300

$325

$350

$375

$400

4Q11

1Q12

2Q12

3Q12

4Q12

Substandard*

$59

$65

$36

$63

$80

$30

$40

$50

$60

$70

$80

$90

4Q11

1Q12

2Q12

3Q12

4Q12

Past Due 30-89 days

$10

$10

$11

$8

$8

$4

$5

$6

$7

$8

$9

$10

$11

$12

4Q11

1Q12

2Q12

3Q12

4Q12

Past due 90 days or more

Investment Securities

Investment Securities

$ in millions

EOP Balance

QTR Yield

Total Investment Securities

$2,423

$2,757

$2,866

$2,908

$2,730

Duration (years)

3.5

3.6

3.6

3.6

3.6

Yield

3.02%

3.09%

2.92%

2.69%

2.59%

Unrealized Gain/(Loss)

$32.3

$30.8

$40.8

$61.9

$57.1

4Q12

3Q12

2Q12

4Q11

1Q12

29

Deposit Mix & Cost by Product

Deposit Mix & Cost by Product

$ in millions

Avg Bal QTR

INT % QTR

Demand

$1,528

0.00%

$1,688

0.00%

1,922

$  

0.00%

1,938

$  

0.00%

1,945

$  

0.00%

Interest Bearing Demand

   4,394

0.49%

   4,990

0.46%

5,480

0.39%

5,537

0.35%

5,803

0.33%

Savings

      876

0.13%

      930

0.14%

1,005

0.13%

1,003

0.11%

1,019

0.11%

Certificates of Deposits

   3,503

1.29%

   3,747

1.29%

4,065

1.13%

4,111

1.17%

3,835

1.21%

Total Interest-Bearing Deposits

$8,773

0.77%

$9,667

0.75%

10,550

$

0.65%

10,651

$

0.64%

10,657

$

0.62%

Core Deposits/Total

Loans(excluding VIE)/Deposits

2Q12

67.4%

99.0%

1Q12

98.7%

67.0%

98.9%

4Q12

69.6%

99.6%

3Q12

67.3%

98.8%

4Q11

66.0%

30

Borrowing Mix & Cost

Borrowing Mix & Cost

31

$ in millions

Avg Bal QTR

INT % QTR (excludes SWAP expense)

Short-Term Borrowings

$   589

0.30%

$   642

0.27%

$   726

0.29%

$   749

0.28%

$   811

0.26%

FHLB Advances

1,163

2.44%

985

0.21%

1,082

0.33%

1,073

0.35%

1,167

0.36%

Long Term Debt

666

4.93%

674

5.11%

686

4.93%

727

4.85%

561

1.19%

Total Borrowings

$2,418

2.60%

$2,301

1.66%

$2,494

1.58%

$2,549

1.62%

$2,539

0.51%

Off Balance Sheet Swap Impact

675

0.75%

675

0.74%

675

0.70%

675

0.69%

675

0.71%

Total Borrowing Cost

Avg Borrowings / Avg Total

Assets

2.40%

2Q12

2.28%

14.0%

1Q12

15.8%

14.1%

4Q11

3.35%

4Q12

1.22%

14.1%

3Q12

2.31%

14.1%

Quarterly Fee Revenue

Quarterly Fee Revenue

32

*Excludes Net realized gain on acquisitions

December 31,

March 31,

June 30,

September 30,

December 31,

2011

2012

2012

2012

2012

Service charges on deposit accounts

7,689

$                  

7,674

$       

8,583

$    

9,013

$                   

9,158

$                  

Vehicle origination and servicing fees

1,984

1,924

2,226

2,470

3,746

Asset management fees

6,821

7,073

7,359

7,366

7,340

Income from fiduciary-related activities

1,827

2,622

2,539

2,485

2,619

Commissions on brokerage, life insurance and annuity sales

1,697

1,907

2,399

2,072

1,923

Commissions on property and casualty insurance sales

3,638

5,058

3,930

3,158

3,749

Other comissions and fees

4,147

4,643

4,800

5,387

6,680

Income from bank-owned life insurance

1,539

1,472

1,631

1,726

1,603

Net gain on sale of loans and leases

3,324

3,750

4,396

5,938

6,160

Net realized gain (loss) on sales of securities

(706)

385

1,361

31

(103)

Net impairment losses recognized in earnings

(304)

(144)

-

-

(97)

Other 

548

3,151

587

4,015

994

Total*

32,204

$              

39,515

$     

39,811

$  

43,661

$                 

43,772

$              

Noninterest Income ($000)

Earnings Drivers

Earnings Drivers

($000)

4Q11

1Q12

2Q12

3Q12

4Q12

Avg. interest-earning assets

$13,128,969

$14,065,583

$15,332,806

$15,537,037

$15,604,029

Net interest margin (FTE)

3.59%

3.94%

4.10%

3.92%

4.06%

Net interest income

$115,201

$134,123

$152,670

$149,142

$155,304

Noninterest income

32,204*

39,515

39,811

43,661

43,772

Total revenue

147,405

173,638

192,481

192,803

199,076

Noninterest expense

100,164*

108,876*

118,157*

115,959*

123,814*

Pre-tax, pre-provision income

47,241*

64,762*

74,324*

76,844*

75,262*

Provision for loan losses

22,000

19,000

16,000

16,000

13,000

Pre-tax income

$25,241*

$45,762*

$58,324*

$60,844*

$62,262*

* Core: Excludes merger-related expenses, net gain on acquisition and loss on extinguishment of debt

2013

Financial

Targets

FTE margin

3.90%

Loan growth

5.00%

Deposit growth

6.00%

Non-interest income growth

8.00%

Non-interest expense growth

-2.00%

Tax rate

32.00%

33

reported numbers and not core numbers.

The growth percentages included in these financial targets are based upon 2012

Note:

Susquehanna Bank Markets

Susquehanna Bank Markets

34

Pennsylvania

Market:

Adams, PA

Berks, PA

Centre, PA

Cumberland, PA

Dauphin, PA

Lancaster, PA

Lebanon, PA

Lehigh, PA

Luzerne, PA

Lycoming, PA

Northampton, PA

Northumberland, PA

Schuylkill, PA

Snyder, PA

Union, PA

York, PA

Maryland

Market:

Allegany, MD

Anne Arundel, MD

Baltimore, MD

Bedford, PA

Berkley, WV

Carroll, MD

Franklin, PA

Fulton, PA

Garrett, MD

Harford, MD

Howard, MD

Washington, MD

Worcester, MD

Delaware

Valley

Market:

Atlantic, NJ

Bucks, PA

Burlington, NJ

Camden, NJ

Chester, PA

Cumberland, NJ

Delaware, PA

Gloucester, NJ

Montgomery, PA

Philadelphia, PA

Baltimore City, MD

Peer Companies

Peer Companies

35

Associated Banc-Corp

BancorpSouth, Inc.

City National Corporation

Commerce Bancshares, Inc.

Cullen/Frost Bankers, Inc.

F.N.B. Corporation

First Horizon National Corporation

First Niagara Financial Group, Inc.

FirstMerit Corporation

Fulton Financial Corporation

Hancock Holding Company

IBERIABANK Corporation

People's United Financial, Inc.

Prosperity Bancshares, Inc.

Signature Bank

TCF Financial Corporation

UMB Financial Corporation

Valley National Bancorp

Webster Financial Corporation

Wintrust Financial Corporation

Non-GAAP Reconciliation

(Dollars and share data in thousands)

Non-GAAP Reconciliation

(Dollars and share data in thousands)

36

The efficiency ratio is a non-GAAP based financial measure.  Management excludes merger-related expenses and certain other selected items when calculating this ratio,

which is used to measure the relationship of operating expenses to revenues.

The tangible common ratio is a non-GAAP based financial measure using non-GAAP based amounts.   The most directly comparable GAAP-based measure is the ratio of

common shareholders’

equity to total assets.  In order to calculate tangible common shareholders equity and assets, our management subtracts the intangible assets from

both the common shareholders’

equity and total assets.  Tangible common equity is then divided by the tangible assets to arrive at the ratio.  Management uses the ratio to

assess the strength of our capital position.

4Q12

3Q12

2Q12

1Q12

4Q11

Other expense

125,277

$     

122,910

$     

121,475

$     

120,355

$     

162,395

$     

Less: Merger related expenses

(1,054)

(1,500)

(3,318)

(11,479)

(12,211)

   Loss on extinguishment of debt

(409)

(5,451)

0

0

(50,020)

Noninterest operating expense (numerator)

123,814

$     

115,959

$     

118,157

$     

108,876

$     

100,164

$     

Taxable-equivalent net interest income

159,332

$     

152,948

$     

156,416

137,837

118,780

Other income

43,772

43,661

39,811

39,515

71,347

Less: Net realized gain on acquisition

0

0

0

0

(39,143)

Denominator

203,104

$     

196,609

$     

196,227

$     

177,352

$     

150,984

$     

Efficiency ratio

60.96%

58.98%

60.21%

61.39%

66.34%

4Q12

3Q12

2Q12

1Q12

4Q11

End of period balance sheet data

Shareholders' equity

2,595,909

$  

2,584,682

$       

2,544,730

$       

2,512,584

$  

2,189,628

$  

(1,263,563)

(1,263,361)

(1,267,630)

(1,268,582)

(1,006,412)

Tangible common equity (numerator)

1,332,346

$  

1,321,321

$       

1,277,100

$       

1,244,002

$  

1,183,216

$  

Assets

18,037,667

$

18,106,730

$     

18,040,009

$     

17,807,026

$

14,974,789

$

(1,263,563)

(1,263,361)

(1,267,630)

(1,268,582)

(1,047,112)

Tangible assets (denominator)

16,774,104

$

16,843,369

$     

16,772,379

$     

16,538,444

$

13,927,677

$

Tangible common ratio

7.94%

7.84%

7.61%

7.52%

8.50%

Efficiency Ratio

Tangible Common Ratio

Goodwill

and

other

intangible

assets

Goodwill

and

other

intangible

assets

(1)

(1)

Non-GAAP Reconciliation

(Dollars and share data in thousands)

Non-GAAP Reconciliation

(Dollars and share data in thousands)

37

Return on Average Tangible Equity

4Q12

3Q12

2Q12

1Q12

4Q11

Income statement data

Net income

43,174

$       

36,732

$           

37,793

$           

23,473

$       

19,129

$       

Amortization of intangibles, net of taxes at 35%

2,127

2,169

2,211

1,789

1,489

Net tangible income (numerator)

45,301

$       

38,901

$           

40,004

$           

25,262

$       

20,618

$       

Average balance sheet data

Shareholders' equity

2,597,254

$  

2,562,092

$       

2,537,250

$       

2,348,326

$  

2,217,036

$  

Goodwill and other intangible assets

(1,311,192)

(1,315,071)

(1,320,658)

(1,132,344)

(1,045,580)

Tangible common equity (denominator)

1,286,062

$  

1,247,021

$       

1,216,592

$       

1,215,982

$  

1,171,456

$  

Return on equity (GAAP basis)

6.61%

5.70%

5.99%

4.02%

3.42%

Effect of goodwill and other intangibles

7.40%

6.71%

7.24%

4.34%

3.56%

Return on average tangible equity

14.01%

12.41%

13.23%

8.36%

6.98%

Return on average tangible shareholders’ equity is a non-GAAP based financial measure calculated using non-GAAP based amounts.  The most directly

comparable GAAP-based measure is return on average equity.  We calculate return on average tangible shareholders’ 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.