Prospectus excerpt:  Susquehanna Capital I, a Delaware statutory trust, will issue the capital securities. Each capital security represents an undivided beneficial interest in the assets of the issuer. The only assets of the issuer will be Capital Efficient Notes issued by Susquehanna Bancshares, Inc., which we refer to as the ÙCENts.ˆ The issuer will pay distributions on the capital securities only from the proceeds, if any, of interest payments on the CENts.

The CENts will bear interest on their principal amount from and including the date they are issued to but excluding December 12, 2037 at the annual rate of 9.375%, payable quarterly in arrears on March 12, June 12, September 12 and December 12 of each year, beginning March 12, 2008. The CENts will bear interest from and including December 12, 2037 to but excluding the final repayment date (as defined below) at an annual rate of interest equal to three-month LIBOR plus 5.455%, payable quarterly in arrears on March 12, June 12, September 12 and December 12 of each year. We have the right, on one or more occasions, to defer payment of interest on the CENts for one or more consecutive interest periods that do not exceed 5 years without being subject to our obligations under the alternative payment mechanism described in this prospectus supplement and for one or more consecutive interest periods that do not exceed 10 years without giving rise to an event of default and acceleration under the terms of the CENts. If we exercise this right, the issuer will also defer paying a corresponding amount of distributions on the capital securities during that period of deferral. In the event of our bankruptcy, holders will have a limited claim for deferred interest.

The principal amount of the CENts will become due on December 12, 2057, the Ùscheduled maturity date,ˆ only to the extent of the applicable percentage of the net cash proceeds that we have received from the sale of certain qualifying capital securities during a 180-day period ending on a notice date not more than 15 or less than 10 business days prior to such date. We will use our commercially reasonable efforts, subject to certain market disruption events, to sell enough qualifying capital securities to permit repayment of the CENts in full on the scheduled maturity date. If any amount is not paid on the scheduled maturity date, it will remain outstanding and we will continue to use our commercially reasonable efforts to sell enough qualifying capital securities to permit repayment of the CENts in full. On December 12, 2067, we must pay any remaining principal and interest on the CENts in full, whether or not we have sold qualifying capital securities, except we may elect to extend this final repayment date up to two times in 10-year increments on either or both of December 12, 2017 and December 12, 2027 and, as a result, the final repayment date of December 12, 2067 may be extended to December 12, 2077 or December 12, 2087, provided that all extension criteria described in this prospectus supplement are satisfied.

At our option, the capital securities may be redeemed at 100% of their liquidation amount, plus accrued and unpaid distributions, on or after December 12, 2012. In addition, the capital securities may be redeemed at our option at any time prior to December 12, 2012 at 100% of their liquidation amount upon the occurrence of a capital treatment event or a tax event, or at the redemption price set forth herein upon the occurrence of a rating agency event, in each case plus accrued and unpaid distributions. The CENts will be subordinated to all of our existing and future senior, subordinated and junior subordinated debt, except for any debt that by its terms is not superior in right of payment, and will be effectively subordinated to all liabilities of our subsidiaries. As a result, the capital securities also will be effectively subordinated to the same debt and liabilities. We will guarantee the capital securities on a subordinated basis to the extent described in this prospectus supplement.