Susquehanna Bancshares, Inc. Announces Second Quarter Results

Business Wire,  July 26, 2005  

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LITITZ, Pa. -- Susquehanna Bancshares, Inc., (Susquehanna) (Nasdaq:SUSQ) today announced net income for the second quarter of 2005 was $18.7 million, or $0.40 per diluted share, compared to the $16.5 million, or $0.40 per diluted share, for the second quarter of 2004.

Second Quarter Financial Highlights:

    --  Net loans and leases grew 11% from June 30, 2004 adjusted for
        the March 2005 auto lease securitization.

        --  Commercial loans increased 16% to $818 million at June 30,
            2005.

        --  Real estate construction loans increased 36% to $839
            million at June 30, 2005.

    --  Total deposits at $5.1 billion were unchanged from June 30,
        2004.

        --  Demand deposits increased 7% to $893 million from $832
            million at June 30, 2004.

    --  Credit quality remains strong, highlighted by improvement in
        the nonperforming assets to total loans, leases and OREO ratio
        to 0.36% at June 30, 2005, from 0.40% at June 30, 2004.

    --  Net interest margin increased 29 basis points to 3.81%
        compared to 3.52% in the second quarter of 2004.

    --  Wealth management fee income increased 17% to $6.9 million
        from $5.9 million in the second quarter of 2004. Commission
        income from property and casualty insurance sales increased
        23% to $2.7 million from $2.2 million for the same period.

    Linked Quarter Highlights (Second Quarter 2005 vs. First Quarter
2005)

    --  Net loans and leases grew 3% from March 31, 2005.

        --  Commercial loans increased 2% to $818 million at June 30,
            2005.

        --  Real estate construction loans increased 7% to $839
            million at June 30, 2005.

    --  Demand deposits grew 3% to $893 million from $870 million at
        March 31, 2005.

    --  Net interest margin improved 10 basis points to 3.81% from
        3.71% in the first quarter of 2005.

Return on average assets and average equity for the second quarter of 2005 finished at 1.03% and 10.01%, respectively. This compared to the second quarter of 2004 with 1.04% and 11.28%, for the same measurements, respectively. Return on average assets and average equity for the first six months of 2005 were .93% and 9.19%, respectively. This compared to 1.06% and 11.45% for the first six months of 2004.

Equity capital was $759 million at June 30, 2005, or $16.25 per share, compared to $720 million at June 30, 2004, or $15.51 per share.

We are maintaining our 2005 fully diluted EPS guidance range of $1.70 to $1.80. Further discussion of guidance will take place on the conference call scheduled for July 27, 2005, at 11:00 a.m. Eastern time.

Additional Activity:

--Susquehanna has been recognized as a Mergent Dividend Achiever for the sixth consecutive year. The list of Dividend Achievers, compiled annually by Mergent Inc., a New York City-based provider of business and financial information, highlights public companies that have increased their regular cash dividends for at least 10 consecutive calendar years. Just 2.5 percent of all U.S. companies that pay dividends made the list. Susquehanna has increased its cash dividend to shareholders every year since its inception in 1982.

--Susquehanna recently expanded its brand presence in the greater Philadelphia market by opening a branch in downtown Conshohocken, Pennsylvania and Lumberton, New Jersey. These branches, both part of our Susquehanna Patriot Bank franchise, are positioned in highly visible locations in fast-growing communities which boast a healthy business, residential and retail mix.

--Branding efforts continued in the second quarter with the integration of Susquehanna Wealth Management into the Susquehanna master brand. As a result, our brokerage company adopted the name Susquehanna Wealth Strategies on June 1.

"Our second quarter increases demonstrate Susquehanna's strength as a diverse financial services company, with positive results in both our bank and non-bank subsidiaries," said Susquehanna Chairman, President and Chief Executive Officer William J. Reuter. "Additionally, our year-to-date accomplishments and our 2005 forecast have us on track to achieve anticipated performance improvements as a result of our recent bank consolidations."

Susquehanna will broadcast its second quarter results conference call over the Internet on July 27, 2005 at 11:00 a.m. Eastern time. The conference call will include management's discussion of second quarter results and may include forward-looking information such as matters affecting earnings and other financial metrics guidance. Investors will have the opportunity to listen to the conference call through a live broadcast on Susquehanna's Web site, located at www.susquehanna.net. To listen to the live call, please go to the Investor Relations section of Susquehanna's Web site at least fifteen minutes prior to the broadcast to download and install any necessary audio software. For those who are unable listen to the live broadcast, an archive will be available shortly after the call concludes.