* Sees Q1 bad loan provision of $35 mln vs. $22.5 mln in Q4

* Says Q1 non-accrual loans and net charge-offs will rise

* Shares down 8 percent after the bell

April 9 (Reuters) - Susquehanna Bancshares Inc (SUSQ.O: Quote, Profile, Research) said first-quarter earnings will be below expectations, as it anticipates provision for bad loans to jump more than 55 percent from the fourth quarter, sending its shares down as much as 8 percent.

The bank also expects FDIC insurance to increase to $6.0 million from $0.7 million in the fourth quarter and net interest margin to fall to 3.40 percent from 3.52 percent.

The bank said it increased its provision for loan losses as it expects nonaccrual loans to jump 46 percent to $153.5 million and net charge-offs to climb 15 percent to $16.6 million.

Analysts on average were expecting the company to earn 16 cents a share, before special items, according to Reuters Estimates.

Shares of the company were trading at $9.70 after the bell. They closed at $10.58 Thursday on Nasdaq. (Reporting by Adheesha Sarkar in Bangalore; Editing by Ratul Ray Chaudhuri)