##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number 0-13585
  INTEGRA BANK
    CORPORATION
 (Exact name of registrant as
    specified in its charter)
  Indiana

35-1632155(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification number)21 S.E. Third Street, P.O. Box 868, 
    Evansville, IN

47705-0868(Zip Code)(Address of principal executive
    offices)   Registrants telephone number, including area code:
 812-464-9677
  Securities registered pursuant to Section 12(b) of the
    Act:
 COMMON STOCK, $1.00 STATED VALUE
 (Title of Class)
  Securities registered pursuant to Section 12(g) of the
    Act:
 NONE
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated filer
    o

Accelerated filer
    þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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##### 





INTEGRA
    BANK CORPORATION
  2007
    FORM 10-K
    ANNUAL REPORT
  Table of
    Contents
   
 PageNumberPART IItem 1.


Business


3Item 1A.


Risk Factors


9Item 1B.


Unresolved Staff Comments


13Item 2.


Properties


13Item 3.


Legal Proceedings


13Item 4.


Submission of Matters to a Vote of Security
    Holders


13PART IIItem 5.


Market for Registrants Common Equity and
    Related Stockholder Matters


14Item 6.


Selected Financial Data


17Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operation


18Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


43Item 8.


Financial Statements and Supplementary Data


45Item 9.


Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


91Item 9A.


Controls and Procedures


91Item 9B.


Other Information


91PART IIIItem 10.


Directors and Executive Officers and
    Corporate Governance


91Item 11.


Executive Compensation


91Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


91Item 13.


Certain Relationships and Related Transactions
    and Director Independence


91Item 14.


Principal Accountant Fees and Services


91PART IVItem 15.


Exhibits and Financial Statement Schedules


92Signatures


93Summary Sheet of 2008 CompensationSubsidiaries of the RegistrantConsent of PricewaterhouseCoopers LLPConsent of Crowe Chizek and Company LLCCertification Pursuant to Section 302 of Chief Executive OfficerCertification Pursuant to Section 302 of Chief Financial OfficerCertification Pursuant to Section 906   2




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##### Table of Contents



FORM 10-K
  INTEGRA
    BANK CORPORATION
 December 31,
    2007
 PART I  ITEM 1.
    BUSINESS  General
  and/or
    http://www.integrabank.com.
    COMPETITION
      FOREIGN
    OPERATIONS
    REGULATION AND
    SUPERVISION
  General
   3




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Acquisitions
    and Changes in Control
      Dividends
    and Other Relationships with Affiliates
       4




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##### Table of Contents



Regulatory
    Capital Requirements
      Deposit
    Insurance
      Community
    Reinvestment Act
    Gramm-Leach-Bliley
    Act
     5




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##### Table of Contents



USA
    Patriot Act of 2001
    non-U.S. persons;
  Additional
    Regulation, Government Policies, and Legislation
  Truth-in-Lending Truth-in-Savings
     6




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##### Table of Contents



STATISTICAL
    DISCLOSURE
    AVAILABLE
    INFORMATION
  http://www.integrabank.com. Form 10-K, Form 10-Q, Form 8-K Form 10-K.
 7




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##### Table of Contents



47705-0868:
  EXECUTIVE
    OFFICERS OF THE COMPANY
    Name

Age

Office and Business ExperienceMichael T. Vea


49


Chairman of the Board, President, and Chief Executive Officer of
    the Company (January 2000 to present); Chairman of the Board and
    Chief Executive Officer of the Company (September 1999 to
    January 2000).Martin M. Zorn


51


Executive Vice President Finance and Risk, Chief Financial
    Officer (April 2006 to present); Executive Vice President, Chief
    Risk Officer (March 2002 to April 2006); Executive Vice
    President, Commercial and Metro Markets Manager (March 2001 to
    March 2002).Archie M. Brown


47


Executive Vice President, Commercial and Consumer Banking of the
    Company (October 2003 to present); Executive Vice President,
    Retail Manager and Community Markets Manager of the Company
    (March 2001 to October 2003).Raymond D. Beck


52


Executive Vice President and Chief Credit Officer, Integra Bank
    (September 2006 to present); Senior Vice President, Commercial
    Loan Workout Group, National City Corporation (August 2004 to
    September 2006); Senior Vice President and Senior Credit
    Officer, Provident Bank (May 2002 to August 2004).Roger M. Duncan


54


Executive Vice President, Integra Bank, President of Evansville
    Region and Community Banking Division, (October 2006 to
    present); Market Executive, Community Banking Division (January
    2000 to October 2006).Bradley M. Stevens


66


President and Chief Executive Officer -- Chicago Region, Integra
    Bank (April 2007 to present); President and Chief Executive
    Officer, Prairie Financial Corporation (1994 to April 2007);
    President and Chief Executive Officer, Prairie Bank and Trust
    Company (1992 to April 2007).Roger D. Watson


54


Executive Vice President of Commercial and Corporate Real
    Estate, Integra Bank (April 2003 to present).Michael B. Carroll


46


Senior Vice President and Controller of the Company (December
    2005 to present); Senior Vice President and Risk Manager of the
    Company (May 2002 to December 2005).    8




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##### Table of Contents



ITEM 1A.
    RISK
    FACTORS    RISKS
    RELATED TO OUR BUSINESS
  We Are
    Subject to Interest Rate Risk.
      We Are
    Subject to Lending Risk.
  and/or
    Our
    Allowance for Loan Losses May be Insufficient.
   9




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Our
    Profitability Depends Significantly on Local and National
    Economic Conditions and Trends.
    The
    Current Credit Cycle Could Adversely Affect our Credit Quality
    Results and Reported Earnings
  ALT-A,
    We
    Operate in a Highly Competitive Industry and Market
    Area.
   10




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
    The ability to develop, maintain and build upon long-term
    customer relationships;
    The ability to expand our market position;
    The scope, relevance and pricing of products and services;
    Our reputation with consumers who reside in the markets we serve;
    The rate at which we introduce new products and services;
    Customer satisfaction; and
    Industry and general economic trends.    We Are
    Subject to Extensive Government Regulation and Supervision and
    Face Legal Risks.
  and/or and/or
    Our
    Controls and Procedures May Fail or be
    Circumvented.
   11




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The
    Parent Company Relies On Dividends From Integra Bank For Most Of
    Its Revenue.
  and/or
  Potential
    Acquisitions may Disrupt Our Business and Dilute Shareholder
    Value.
    
    Potential exposure to unknown or contingent liabilities of the
    target company;
    Exposure to potential asset quality issues of the target company;
    Difficulty and expense of integrating the operations and
    personnel of the target company;
    Potential disruption to our business;
    Potential diversion of our managements time and attention;
    Changes in the national economy or in the markets in which we do
    business could reduce the anticipated benefits resulting from an
    acquisition;
    The possible loss of key employees and customers of the target
    company; and
    Difficulty in estimating the value of the target company.  and/or
  We May
    Not Be Able to Attract and Retain Skilled People.
   12




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Our
    Information Systems May Experience an Interruption or Breach in
    Security.
    We
    Continually Encounter Technological Change.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES    ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   13




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##### Table of Contents



PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES      Range of Stock Price


DividendsQuarter

High


Low


Declared20071st

$
27.88


$
21.65


$
0.1702nd


23.92



21.26



0.1803rd


22.29



16.28



0.1804th


19.97



14.03



0.18020061st

$
22.86


$
19.81


$
0.1602nd


23.10



20.80



0.1703rd


26.50



21.10



0.1704th


28.30



24.75



0.170        14




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##### Table of Contents



Total Number of


ApproximateShares Purchased


Dollar Value ofas Part of


Shares that MayTotal Number





Publicly


Yet be Purchasedof Shares


Average Price


Announced Plans


Under PlansPurchased


Paid per Share


or Programs


or Programs2007January





$







$
10,000February


117,350



24.51



117,350



7,119March


5,100



23.87



5,100



6,997April


95,000



22.93



95,000



4,815May


187,000



23.34



187,000



444June














12,500July














12,500August














12,500September














12,500October














12,500November














12,500December














12,500Total


404,450


$
23.59



404,450    15




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##### Table of Contents



TOTAL
    RETURN PERFORMANCE
  
  Period EndingIndex

12/31/02

12/31/03

12/31/04

12/31/05

12/31/06

12/31/07Integra Bank Corporation


100.00



129.83



140.79



133.86



177.42



94.42NASDAQ Composite


100.00



150.01



162.89



165.13



180.85



198.60SNL Midwest Bank Index


100.00



128.00



144.44



139.18



160.87



125.39  16




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##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA  Integra
    Bank Corporation and Subsidiaries
  Year Ended December 31,

2007


2006


2005


2004


2003(In thousands, except per share data and ratios)Net interest income

$
93,249


$
82,306


$
82,621


$
84,467


$
72,242Provision for loan losses


4,193



20,294



5,764



1,305



4,945Non-interest income


37,071



35,827



35,878



33,607



32,793Non-interest expense


87,650



75,877



77,557



138,180



82,267Income (Loss) before income taxes


38,477



21,962



35,178



(21,411
)


17,823Income taxes (benefit)


7,767



2,415



7,879



(14,791
)


58Net income (loss)

$
30,710


$
19,547


$
27,299


$
(6,620
)

$
17,765PER COMMON SHARENet income (loss):Basic

$
1.55


$
1.11


$
1.57


$
(0.38
)

$
1.03Diluted


1.55



1.11



1.56



(0.38
)


1.03Cash dividends declared


0.71



0.67



0.64



0.72



0.94Book value


15.87



13.23



12.60



12.05



13.46Weighted average shares:Basic


19,778



17,546



17,382



17,318



17,285Diluted


19,812



17,658



17,468



17,318



17,300AT YEAR-ENDTotal assets

$
3,350,126


$
2,684,479


$
2,708,142


$
2,757,165


$
2,958,294Securities


636,736



614,718



681,030



801,059



974,111Loans, net of unearned income


2,311,378



1,790,976



1,750,192



1,665,324



1,699,688Deposits


2,340,137



1,953,852



1,808,503



1,896,541



1,812,630Shareholders equity


327,804



235,474



220,098



209,291



232,992Shares outstanding


20,650



17,794



17,465



17,375



17,311AVERAGE BALANCESTotal assets

$
3,104,951


$
2,719,056


$
2,746,425


$
2,758,924


$
2,949,016Securities, at amortized cost


621,199



659,142



757,694



810,716



967,327Loans, net of unearned income


2,128,551



1,782,918



1,688,547



1,644,471



1,670,938Interest-bearing deposits


2,021,531



1,725,655



1,618,027



1,613,000



1,606,116Shareholders equity


300,457



230,017



216,278



210,280



234,948FINANCIAL RATIOSReturn on average assets


0.99
%


0.72
%


0.99
%


(0.24
)%


0.60
%Return on average equity


10.22



8.50



12.62



(3.15
)


7.56Net interest margin


3.46



3.43



3.44



3.52



2.87Cash dividends payout


43.83



59.26



40.82



N/M*



91.26Average shareholders equity to average assets


9.68



8.46



7.87



7.62



7.97     *
    
    Number is not meaningful. 17




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##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATION  INTRODUCTION
      OVERVIEW
      
    Maintain sound credit through an uncertain economic environment;
    Add new customers and do more with them;
    Increase our presence in faster growing metro markets by
    recruiting successful and experienced lending and product teams
    and executing selective acquisitions;
    Improve our margin and net interest income by continuing to
    improve our earning asset mix by growing commercial loans, while
    allowing our residential mortgage and indirect marine and
    recreational vehicle loans to amortize, coupled with growing
    lower cost deposits;
    Improve operating leverage (which is the difference between
    percentage growth in total revenue less percentage growth in
    non-interest expense) by reducing expenses in lower growth and
    lower profitability lines of business and by investing in higher
    growth and higher return lines of business; and
    Allocate capital to the most profitable uses to increase total
    shareholder returns, and return excess capital to shareholders
    through dividends and stock repurchases.   18




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##### Table of Contents




    Diluted earnings per share for 2007 increased by $0.44 from
    $1.11 in 2006;
    Return on assets increased to 0.99% from 0.72%;
    Return on equity increased to 10.22% from 8.50%;
    Efficiency ratio was 63.5% compared to 62.3%;
    Net interest margin was 3.46%, an increase of 3 basis
    points;
    The provision for loan losses was $4,193;
    Service charge income grew by $1,438, or 7.6%, with $899 of this
    growth coming from our Chicago market;
    Debit card fee income increased by $1,078 or 32.7%; and
    Non-interest expense increased by $11,773 or 15.5%, including
    $4,887 of direct costs and merger related expenses resulting
    from the Prairie acquisition, as well as $634 of expenses from
    our planned acquisition of Peoples Community Bancorp, Inc., or
    Peoples, which was terminated on January 31, 2008.    CRITICAL
    ACCOUNTING POLICIES
    Allowance for Loan Losses:
 19




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##### Table of Contents



Estimation of Fair Value:
         20




---



##### Table of Contents



Income Taxes:
  NET
    INCOME
   21




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##### Table of Contents



NET
    INTEREST INCOME
    AVERAGE
    BALANCE SHEET AND ANALYSIS OF NET INTEREST INCOME
  2007


2006


2005Average


Interest


Yield/


Average


Interest


Yield/


Average


Interest


Yield/Year Ended December 31,

Balances


& Fees


Cost


Balances


& Fees


Cost


Balances


& Fees


CostEARNING ASSETS:Interest-bearing deposits in banks

$
3,427


$
167



4.87
%

$
1,718


$
81



4.71
%

$
99


$
6



6.06
%Federal funds sold & other short-term investments


1,578



58



3.68
%


5,437



252



4.63
%


3,423



118



3.45
%Loans held for sale


3,346



235



7.02
%


1,950



140



7.18
%


5,698



355



6.23
%Securities:Taxable


510,129



24,588



4.82
%


567,452



26,525



4.67
%


641,755



27,519



4.29
%Tax-exempt


111,070



7,949



7.16
%


91,690



6,853



7.47
%


115,939



9,170



7.91
%Total securities


621,199



32,537



5.24
%


659,142



33,378



5.06
%


757,694



36,689



4.84
%Regulatory Stock


26,389



1,286



4.87
%


29,368



1,479



5.04
%


33,052



1,528



4.62
%Loans


2,128,551



160,630



7.55
%


1,782,918



125,728



7.05
%


1,688,547



104,455



6.19
%Total earning assets


2,784,490


$
194,913



7.00
%


2,480,533


$
161,058



6.49
%


2,488,513


$
143,151



5.75
%Fair value adjustment on securities
    available for sale


(7,996
)










(13,767
)










(2,838
)Allowance for loan loss


(25,088
)










(21,990
)










(24,123
)Other non-earning assets


353,545











274,280











284,873TOTAL ASSETS

$
3,104,951










$
2,719,056










$
2,746,425INTEREST-BEARING LIABILITIES:DepositsSavings and interest-bearing demand

$
506,144


$
4,903



0.97
%

$
497,237


$
4,197



0.84
%

$
547,148


$
3,768



0.69
%Money market accounts


370,953



15,114



4.07
%


281,480



10,589



3.76
%


234,798



5,687



2.42
%Certificates of deposit and other time


1,144,434



53,725



4.69
%


946,938



39,635



4.19
%


836,081



25,569



3.06
%Total interest-bearing deposits


2,021,531



73,742



3.65
%


1,725,655



54,421



3.15
%


1,618,027



35,024



2.16
%Short-term borrowings


194,033



9,431



4.86
%


178,976



8,574



4.79
%


167,443



5,877



3.51
%Long-term borrowings


285,925



15,498



5.42
%


305,881



13,092



4.28
%


470,040



16,657



3.54
%Total interest-bearing liabilities


2,501,489


$
98,671



3.94
%


2,210,512


$
76,087



3.44
%


2,255,510


$
57,558



2.55
%Non-interest bearing deposits


272,175











257,625











252,358Other noninterest-bearing liabilities and shareholders
    equity


331,287











250,919











238,557TOTAL LIABILITIES AND SHAREHOLDERS EQUITY

$
3,104,951










$
2,719,056










$
2,746,425Interest income/earning assets





$
194,913



7.00
%





$
161,058



6.49
%





$
143,151



5.75
%Interest expense/earning assets






98,671



3.54
%






76,087



3.06
%






57,558



2.31
%Net interest income/earning assets





$
96,242



3.46
%





$
84,971



3.43
%





$
85,593



3.44
%   Note:
    Tax exempt income presented on a tax equivalent basis based on a
    35% federal tax rate.  Loans include loan fees of $2,786, $1,881, and $1,192 for 2007,
    2006, and 2005, respectively, and nonaccrual loans. 22




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Securities yields are calculated on an amortized cost basis.Federal tax equivalent adjustments on securities are $2,782,
    $2,441, and $2,743 for 2007, 2006, and 2005, respectively.Federal tax equivalent adjustments on loans are $211, $224, and
    $229 for 2007, 2006, and 2005, respectively.  CHANGES
    IN NET INTEREST INCOME (INTEREST ON A FEDERAL-TAX-EQUIVALENT
    BASIS)
  2007 Compared to 2006


2006 Compared to 2005Change Due to





Change Due toa Change in


Total


a Change in


TotalIncrease (Decrease)

Volume


Rate


Change


Volume


Rate


ChangeInterest incomeLoans

$
25,553


$
9,349


$
34,902


$
6,103


$
15,170


$
21,273Securities


(1,986
)


1,145



(841
)


(4,924
)


1,613



(3,311
)Regulatory Stock


(145
)


(48
)


(193
)


(180
)


131



(49
)Loans held for sale


98



(3
)


95



(262
)


47



(215
)Other short-term investments


(97
)


(11
)


(108
)


159



50



209Total interest income


23,423



10,432



33,855



896



17,011



17,907Interest expenseDeposits


10,033



9,288



19,321



2,459



16,938



19,397Short-term borrowings


730



127



857



429



2,268



2,697Long-term borrowings


(899
)


3,305



2,406



(6,582
)


3,017



(3,565
)Total interest expense


9,864



12,720



22,584



(3,694
)


22,223



18,529Net interest income

$
13,559


$
(2,288
)

$
11,271


$
4,590


$
(5,212
)

$
(622
)         
    Average earning assets increased $303,957 or 12.3%. Loans from
    the new Chicago region contributed $303,975 to the average,
    including average balances of $284,189 of higher yielding
    commercial loans. Increases in the average balances of
    commercial loans of $387,650 more than offset planned declines
    in residential mortgage loans of $40,768, indirect consumer
    loans of $18,170 and securities of $37,943. This change in the
    composition of earning assets was in line with our ongoing
    strategy of improving our mix of earning assets by reducing
    lower yielding securities, residential mortgage loan and
    indirect consumer loan balances and increasing the amount of
    higher yielding commercial loans. The increase in average
    commercial loan balances for 2007 was driven by increases in
    commercial real estate loans of $345,627, and also from loans
    originated by our commercial lending group located in
    Cincinnati, Ohio. Average balances for this group increased
    $50,453.
    The average rate of commercial loans increased 47 basis
    points, as yields continued to reflect consistent increases for
    most of the year in market interest rates, which resulted in
    changes to our pricing for new loans and upward interest rate
    adjustments on existing variable rate products. This trend
    reversed during the fourth quarter for variable rate loans tied
    to prime rate indexes, as well as for new originations. 23




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##### Table of Contents




    Non-interest bearing deposit average balances increased $14,550,
    while the average balances of savings and interest-bearing
    demand deposits, which have an average cost of 97 basis
    points, increased $8,907. The average balance of non-interest
    bearing deposits for the Chicago region was $23,279, while the
    average for savings and interest bearing demand was $23,042.
    The increase in the average balance of earning assets was funded
    primarily by increases in time deposits of $197,496 and money
    market accounts of $89,473. These funding sources carried an
    average rate of 4.69% and 4.07% in 2007, compared to 4.19% and
    3.76% in 2006. The pricing of retail certificates acquired in
    the Prairie transaction were higher than those in our other
    markets. During the second through fourth quarters, the balances
    of those retail certificates declined, as we were able to secure
    deposits at lower costs in other regions.      
    Average earning assets decreased $7,980 or 0.3%, driven by
    decreases in average securities balances of $98,552 and
    residential mortgage loans of $26,786. These decreases were
    largely offset by increases in average commercial loan balances
    of $108,681 and direct consumer loans of $9,315. This change in
    the composition of earning assets was in line with our strategy
    of improving our mix of earning assets by reducing lower
    yielding securities, residential mortgage loan and indirect
    consumer loan balances and increasing the amount of higher
    yielding commercial loans. The increase in average commercial
    loan balances for 2006 was driven by increases in commercial
    real estate loans of $99,278, and also from the commercial
    lending team added during the second and third quarters in the
    Cincinnati, Ohio area. This group ended the year with
    outstanding balances of $42,637.
    The average rate of commercial loans increased 109 basis
    points, as loans repriced throughout 2006 to higher rates
    brought about by 2005 market rate increases and new originations
    were priced at higher rates than during 2005.
    Non-interest bearing deposit average balances increased $5,267,
    while the average balances of savings and interest-bearing
    demand deposits, which have an average cost of 84 basis
    points, declined $49,911. The reduction in core deposits was
    largely offset by increases in the average balances of money
    market accounts, which had an average cost of 3.76%, of $46,682.
    The shift from low and very low cost deposits to higher yielding
    money market accounts occurred throughout the first three
    quarters of 2006 for us and throughout the banking industry, as
    consumers sought higher rate investment alternatives and deposit
    products. During the fourth quarter of 2006, this migration
    abated.
    A shift in funding sources occurred in 2006. The average balance
    of brokered certificates of deposit increased $102,836, while
    long-term borrowing average balances declined $164,159, helping
    result in a lower overall balance of interest-bearing
    liabilities of $44,998. This shift took place during 2006 in
    part due to refinancing of $177,500 of fixed-term debt that
    carried a weighted average rate of 3.06%, that matured in March
    2006. This refinancing extended maturities over a one to three
    year period. It also helped us improve our overall liquidity
    position and demonstrated a lower level of reliance on FHLB
    funding.
    Fourth quarter 2006 net interest income was negatively
    impacted by the reversal of accrued interest of $484 from the
    $17,749 loan that was charged off during the quarter. The impact
    to the net interest margin for the fourth quarter of 2006 was
    approximately 5 basis points.
    Daily overdraft fees increased $274 or 18.9% as a result of a
    higher number of accounts and a higher level of activity within
    those accounts. 24




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##### Table of Contents



NON-INTEREST
    INCOME
      
    The increase in deposit service charges continues to be a result
    of the success of our High Performance Checking initiative,
    coupled with the impact from the Prairie acquisition. This
    program has resulted in a net increase of approximately 21,000
    checking accounts since we initiated it in early 2005. The
    greater number of accounts, coupled with increased customer
    activity and increases in non-sufficient funds fees, resulted in
    the increased fee income. The new Chicago region contributed
    $899 of deposit service charges.
    The increase in number of checking accounts, coupled with
    greater usage of debit cards as a method of payment by our
    customers, resulted in higher interchange fees. The increase in
    debit card interchange fees was 32.7%. The new Chicago region
    contributed only slightly to this increase, due to that
    regions relatively low number of checking accounts.
    The increase in annuity commissions resulted from a change in
    customer preferences, coupled with increased training
    initiatives and more consistent sales efforts.
    Securities losses of $2,277 included a gain on the sale of
    Mastercard stock of $1,038, other-than-temporary impairment
    charges of $2,726, and net losses on sales of other securities
    of $589. Losses on sales of securities of $819 occurred during
    the third quarter of 2007, in response to changes to economic
    conditions resulting from events surrounding the mortgage
    industry, statements and actions by the Federal Open Market
    Committee (in particular, the decision to lower the Fed funds
    target rate in mid September 2007), and our desire to position
    the securities portfolio (liquidity, interest rate risk, and
    earnings) over the long term. During the third quarter of 2007,
    we sold 7,831 shares of Mastercard Class B common
    stock for $1,038 by converting those shares to Class A
    shares and then selling them through a voluntary program offered
    by MasterCard Incorporated. We received the Mastercard stock in
    2006 as a result of Mastercards public offering. Prior to
    the third quarter of 2007, these shares did not have a readily
    determinable fair value and were carried at cost. During the
    fourth quarter of 2007, we recognized an other-than-temporary
    impairment charge of $2,726 for four investment grade Federal
    Home Loan Mortgage Corporation Freddie Mac
    securities classified as available for sale securities.
    Note 4 of the Notes to the Consolidated Financial
    Statements provides additional information on the
    other-than-temporary impairment.
    Life insurance income increased $92, or 4.2% from 2006. This
    increase was the net of higher levels of bank owned life
    insurance in 2007, offset by receipt of a bank owned life
    insurance death benefit in 2006 of $448.      
    The increase in deposit service charges is a result of the
    success of our High Performance Checking initiative. This
    program resulted in a net increase of approximately 15,000
    checking accounts since we initiated it early in 2005, and,
    coupled with increased levels of customer activity, resulted in
    the higher level of fee income. The increase in number of
    accounts, coupled with greater usage of debit cards as a method
    of payment by our customers, resulted in higher interchange fees.
    The increase in trust revenue was a result of an increase in
    assets managed by our trust department at December 31, 2006
    of 18.0% from December 31, 2005. This occurred as a result
    of both a greater number of 25




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##### Table of Contents



customers and assets managed, as well as an increase in the
    market value of equity securities within customer accounts,
    which increased as the market improved throughout 2006.  
    Securities gains of $589 occurred during the fourth quarter of
    2006, as issuers of bonds exercised call options to redeem them
    at premiums ranging from 103% to 104% of their current
    outstanding balance.
    Life insurance income declined $182 or 7.8% from 2005. We
    received $448 of bank owned life insurance death benefits in
    2006, as compared to $754 in 2005.  NON-INTEREST
    EXPENSE
        
    The increase in personnel expense of $5,891, or 14.7%, was a
    result of the addition of the Chicago region, higher health
    insurance, incentive and stock based compensation expenses and
    investments in personnel in our commercial banking line of
    business. Incentives and commissions increased $604, in part due
    to commissions and incentives paid as a result of increases in
    revenues. Stock based compensation expense increased $716, or
    115.5%, due to the adoption of Statement of Financial Accounting
    Standards No. 123(R), or SFAS 123(R), in 2006. The
    expense associated with both the 2006 and 2007 grants is now
    being amortized, while 2006 included only one years grant
    amortization. At December 31, 2007, we had
    848 full-time equivalent employees or FTEs compared to 802
    in 2006, and 843 in 2005.
    Occupancy expenses increased $1,248 or 15.3% due to the $1,007
    impact of the addition of the five Chicago banking centers and
    the addition of a new banking center in Union, Kentucky, which
    added $80 in expense.
    Professional fees increased $1,657 or 56.1% due primarily to
    $650 of nonroutine collection expenses and legal fees related to
    a fourth quarter 2006 charge-off and $585 of investment banking,
    legal, accounting and other professional fees incurred in
    connection with the execution of the proposed acquisition of
    Peoples that was terminated by agreement of both parties in
    January, 2008. The remainder of the increase was related to the
    acquisition of Prairie, including systems conversion and merger
    integration related expenses and higher legal, external audit
    and examination fees.
    The increase of intangibles expense of $627 or 67.2% was
    entirely due to core deposit and customer relationship
    intangible amortization expense recorded with the Prairie
    acquisition. Core deposit and customer relationship intangibles
    totaling $6,380 are being amortized on an accelerated basis over
    ten and five years, respectively.
    Travel and meals increased $333 or 43.6%, largely because of
    expenses associated with travel to Chicago, both before and
    after the effective date of the Prairie acquisition, as well as
    because of travel expenses incurred in connection with due
    diligence and merger integration planning for the since
    terminated Peoples acquisition.
    Postage and courier expense increased $309, or 9.1% because of
    the use of courier services to and from the new Chicago region,
    coupled with higher postage expense related to mailings for our
    High Performance Checking program.
    Sales and franchise taxes increased as a higher level of income
    was apportioned to states in which we pay franchise tax,
    particularly Ohio, coupled with receipt in 2006 of a franchise
    tax refund claim for a prior year. 26




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##### Table of Contents




    Professional fees declined largely as a result of our changing
    audit firms for 2006. Total audit fees were reduced by $612 or
    58.6% from 2005. Legal fees declined $466 or 51.6% largely due
    to expenses we incurred in 2005 from an IRS audit of our tax
    returns, by having our in-house counsel we hired in 2004 deal
    with issues we previously outsourced to outside firms, and a
    reduced level of litigation. Other professional fees declined
    due to lower expenses in the area of branch mystery shopping and
    facilities design.
    The reduction in salaries expense was a result of a further
    reduction to our workforce, from 840 average FTEs during 2005 to
    804 average FTEs in 2006. Continued ongoing initiatives to find
    and execute efficiencies were successful, allowing us to
    reallocate resources to higher yielding businesses, such as the
    commercial lending team added during the second and third
    quarters of 2006. At December 31, 2006, we had 802 FTEs
    compared to 843 in 2005 and 839 in 2004.
    Incentives declined from 2005 largely due to a reduction in
    executive incentive compensation expense that resulted because
    of the fourth quarter 2006 loan charge-off.
    Processing expense declined from 2005 largely due to successful
    execution of expense reduction initiatives that resulted in new
    contracts and lower costs, particularly in the area of ATM and
    debit card transaction processing.
    Franchise, sales, state and local tax expense declined because
    of the filing of a franchise tax refund claim for a prior year,
    a sales tax liability paid in 2005 that did not reoccur in 2006
    and resulted from a 2005 audit, and lower franchise tax
    liabilities, as well as lower state and local deposit taxes.
    The increase in medical expense was primarily the result of two
    items. First, we began to offer and pay for health insurance
    benefits to part-time employees in 2006. Second, in 2006, we had
    a higher level of individually significant claims that
    approached or exceeded the stop loss amounts included in our
    self-insured health plan. We continue to focus on several
    initiatives in the area of preventive care in an effort to have
    a healthier workforce and lower overall health insurance costs.
    During 2006, we adopted SFAS 123(R), which resulted in the
    recognition of $245 of stock option expense for options issued
    during 2006. Prior to 2006, this expense was not recognized in
    the statement of income, but rather recognized on a pro-forma
    basis in the footnotes to the financial statements. Total
    expense recognized for all stock-based compensation for
    employees and directors, including restricted stock, was $810 in
    2006 compared to $385 in 2005.
    The increase in occupancy expense was caused by the lease of
    additional space in an existing facility during the fourth
    quarter of the year, a switch in facilities management companies
    and related transition expenses, higher real property taxes and
    higher utilities expense.
    The increase in low income housing partnership investment
    expenses was due to higher than expected operating losses from
    the partnerships we have investments in. The returns we receive
    on these investments consist of the tax benefits we receive from
    the tax deductible losses the partnerships generate, plus low
    income housing tax credits we receive, less the actual losses.  INCOME
    TAXES
   27




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##### Table of Contents



INTERIM
    FINANCIAL DATA
    2007Three Months Ended

December 31


September 30


June 30


March 31Interest income

$
51,384


$
51,327


$
49,367


$
39,842Interest expense


26,729



26,629



25,800



19,513Net interest income


24,655



24,698



23,567



20,329Provision for loan losses


2,280



723



455



735Non-interest income


7,538



10,387



9,931



9,215Non-interest expense


23,371



22,242



21,870



20,167Income before income taxes


6,542



12,120



11,173



8,642Income taxes


727



2,914



2,840



1,286NET INCOME

$
5,815


$
9,206


$
8,333


$
7,356Earnings per share:Basic

$
0.28


$
0.45


$
0.41


$
0.42Diluted


0.28



0.45



0.41



0.41Average shares:Basic


20,535



20,527



20,331



17,678Diluted


20,542



20,545



20,407



17,786   28




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##### Table of Contents



2006Three Months Ended

December 31


September 30


June 30


March 31Interest income

$
40,802


$
41,035


$
39,442


$
37,114Interest expense


20,174



20,218



18,699



16,996Net interest income


20,628



20,817



20,743



20,118Provision for loan losses


18,091



950



859



394Non-interest income


9,443



9,206



9,117



8,061Non-interest expense


18,860



18,599



19,260



19,158Income (loss) before income taxes


(6,880
)


10,474



9,741



8,627Income taxes (benefits)


(4,280
)


2,274



2,351



2,070NET INCOME (LOSS)

$
(2,600
)

$
8,200


$
7,390


$
6,557Earnings per share:Basic

$
(0.15
)

$
0.47


$
0.42


$
0.38Diluted


(0.15
)


0.46



0.42



0.37Average shares:Basic


17,697



17,589



17,466



17,434Diluted


17,864



17,752



17,562



17,521   FOURTH
    QUARTER 2007 AND 2006
              FINANCIAL
    CONDITION
   29




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##### Table of Contents



CASH AND
    CASH EQUIVALENTS
    SECURITIES
    AVAILABLE FOR SALE AND TRADING SECURITIES
    SECURITIES
    AVAILABLE FOR SALE
  December 31,(At Fair Value)

2007


2006


2005U.S. Government agencies

$
16,142


$
16,165


$
1,119Mortgage-backed securities


122,811



133,630



166,504Collateralized Mortgage Obligations


275,983



313,417



362,313State & political subdivisions


106,819



76,143



85,254Other securities


61,199



75,363



65,840Total

$
582,954


$
614,718


$
681,030     Available for Sale Securities

Fair ValueDue in one year or less

$
31,299Due from one to five years


218,251Due from five to ten years


226,244Due after ten years


107,160Total

$
582,954   SECURITIES
    HELD FOR TRADING
  December 31,(At Fair Value)

2007Mortgage-backed securities

$
18,385Collateralized Mortgage Obligations


35,397Total

$
53,782  30




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##### Table of Contents



REGULATORY
    STOCK
    LOANS
   31




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##### Table of Contents



32




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##### Table of Contents



LOAN
    PORTFOLIO AT YEAR END
  2007


2006


2005


2004


2003Commercial, industrial and agricultural loans

$
689,504


$
568,841


$
572,936


$
563,382


$
586,159Economic development loans and other obligations of state and
    political subdivisions


7,227



7,179



8,422



13,195



20,951Lease financing


5,291



5,495



5,740



5,731



6,796Commercial mortgages


298,151



180,249



180,907



224,066



238,261Construction and development


609,858



260,314



186,177



72,517



53,108Residential mortgages


380,429



436,309



447,250



456,007



477,895Home equity lines of credit


145,403



132,704



135,685



143,037



132,101Consumer loans


175,516



199,887



213,079



187,395



184,426Total loans


2,311,379



1,790,978



1,750,196



1,665,330



1,699,697Less: unearned income


1



2



4



6



9Loans, net of unearned income

$
2,311,378


$
1,790,976


$
1,750,192


$
1,665,324


$
1,699,688       LOAN
    MATURITIES AND RATE SENSITIVITIES AT DECEMBER 31, 2007
    After 1 YearWithin


But Within


OverRate sensitivities:

1 Year


5 Years


5 Years


TotalFixed rate loans

$
100,648


$
429,755


$
282,191


$
812,594Variable rate loans


1,274,691



178,451



27,093



1,480,235Subtotal

$
1,375,339


$
608,206


$
309,284



2,292,829Percent of total


59.98
%


26.53
%


13.49
%Nonaccrual loans














18,549Total loans













$
2,311,378  33




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##### Table of Contents



LOAN
    MATURITIES AND RATE SENSITIVITIES AT DECEMBER 31, 2007
    After 1 YearWithin


But Within


Over1 Year


5 Years


5 Years


TotalCommercial, industrial and agriculture loans

$
411,443


$
225,471


$
49,754


$
686,668Economic development loans and other obligations of state and
    political subdivisions


5,083



1,712



432



7,227Construction and development


594,006



12,293



334



606,633Total

$
1,010,532


$
239,476


$
50,520


$
1,300,528Fixed rate

$
53,547


$
211,768


$
46,937


$
312,252Variable rate


956,985



27,708



3,583



988,276Subtotal

$
1,010,532


$
239,476


$
50,520



1,300,528Percent of total


77.70
%


18.41
%


3.89
%Nonaccrual loans














6,061Total













$
1,306,589   NON-PERFORMING
    ASSETS
    NON-PERFORMING
    ASSETS AT YEAR END
  2007


2006


2005


2004


2003Non-performing loans:(1)Nonaccrual

$
18,549


$
8,625


$
25,013


$
17,971


$
15,72590 days past due and still accruing interest


4,118



228



40



576



2,566Total non-performing loans


22,667



8,853



25,053



18,547



18,291Defaulted municipal securities


















2,692Other real estate owned


2,923



936



440



243



1,341Total non-performing assets

$
25,590


$
9,789


$
25,493


$
18,790


$
22,324  34




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##### Table of Contents



(1)
    
    Includes non-performing loans classified as loans held for sale.            CREDIT
    MANAGEMENT
     35




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##### Table of Contents



Accounting by
    Creditors for Impairment of a Loan
      Accounting for Contingencies
   36




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##### Table of Contents




    The impact to 2006 from the charge-off of a $17,749 lending
    relationship, which is described further below;
    Lower commercial net charge-offs, excluding the above
    relationship, of $2,230. Our commercial real estate and
    Cincinnati commercial lines of business have experienced no
    charge-offs since the inception of those businesses.    
    The Chicago-area builder loans that accounted for the increase
    to non-performing loans are adequately secured and should not
    result in significant charge-offs;
    The risk in our non-performing loans is granular, with only
    eight non-performing loans exceeding $500 and only one exceeding
    $1,000;
    The performance of our other portfolios remains strong and our
    level of net charge-offs was low to moderate at 19 basis
    points for 2007, including 25 basis points for the fourth
    quarter of 2007; and
    We are not seeing a material impact on our loan losses related
    to our residential mortgage portfolio, since we do not
    underwrite a subprime mortgage portfolio.    
    The impact of the charge-off of the $17,749 lending relationship
    during the fourth quarter of 2006, which is described further
    below;
    Greater charge-offs in our consumer portfolio, particularly in
    the areas of indirect marine and recreational vehicle loans,
    which had net charge-offs of $1,227 compared to $784 in
    2005; and
    Net recoveries in 2006 of $108 for commercial mortgage and
    commercial construction and development real estate credits, as
    opposed to net charge-offs of $588 for 2005.   37




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##### Table of Contents



SUMMARY
    OF LOAN LOSS EXPERIENCE (ANALYSIS OF THE ALLOWANCE FOR LOAN
    LOSSES)
  2007


2006


2005


2004


2003Allowance for loan losses, January 1

$
21,155


$
24,392


$
23,794


$
25,403


$
24,632Allowance associated with purchase acquisitions


5,982















Loans charged off:Commercial, industrial and agriculture


1,244



21,509



3,461



1,550



2,330Lease financing


















59Commercial mortgages


54



66



620



859



840Construction and development


200











13



Residential mortgages


797



704



589



1,321



1,734Home Equity


246



397



130



154



180Consumer


2,900



2,665



1,818



961



1,367Total


5,441



25,341



6,618



4,858



6,510Recoveries on charged off loans:Commercial, industrial and agriculture


315



633



621



1,386



1,105Lease financing


















119Commercial mortgages


18



174



32



242



86Construction and development














24



Residential mortgages


154



171



166



249



405Home Equity


105



41



64



24



1Consumer


780



791



569



394



620Total


1,372



1,810



1,452



2,319



2,336Net charge-offs


4,069



23,531



5,166



2,539



4,174Provision for loan losses


4,193



20,294



5,764



1,305



4,945Allowance related to loans sold














(299
)


Transfer to reserve for unfunded commitments














(76
)


Allowance for loan losses, December 31

$
27,261


$
21,155


$
24,392


$
23,794


$
25,403Total loans at year-end, net of unearned income

$
2,311,378


$
1,790,976


$
1,750,192


$
1,665,324


$
1,699,688Average loans


2,128,551



1,782,918



1,688,547



1,644,471



1,670,938Total non-performing loans


22,667



8,853



25,053



18,547



18,291Net charge-offs to average loans


0.19
%


1.32
%


0.31
%


0.15
%


0.25
%Provision for loan losses to average loans


0.20



1.14



0.34



0.08



0.30Allowance for loan losses to loans


1.18



1.18



1.39



1.43



1.50Allowance for loan losses to non-performing loans


120.27



238.96



97.36



128.29



138.88  38




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##### Table of Contents



ALLOCATION
    OF THE ALLOWANCE FOR LOAN LOSSES AT DECEMBER 31
  Allowance Applicable to


Percent of Loans to Total Gross LoansLoan Type

2007


2006


2005


2004


2003


2007


2006


2005


2004


2003Commercial, industrial and agriculture

$
8,060


$
7,337


$
11,713


$
10,326


$
12,789



30
%


32
%


33
%


34
%


35
%Economic development loans and other obligations of state and
    political subdivisions














86



135















1
%


1
%Lease financing


1



1



56



63



105



















Commercial mortgages


3,076



1,804



2,173



3,127



3,130



13
%


10
%


10
%


14
%


14
%Construction and development


7,150



2,537



1,904



763



344



26
%


15
%


11
%


4
%


3
%Residential mortgages


3,287



3,688



4,105



3,622



1,845



17
%


24
%


26
%


27
%


28
%Home equity


1,082



1,172



885



1,059



778



6
%


8
%


8
%


9
%


8
%Consumer


3,963



3,434



3,246



2,291



3,095



8
%


11
%


12
%


11
%


11
%Allocated


26,619



19,973



24,082



21,337



22,221



100
%


100
%


100
%


100
%


100
%Unallocated


642



1,182



310



2,457



3,182Total

$
27,261


$
21,155


$
24,392


$
23,794


$
25,403     DEPOSITS
         39




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##### Table of Contents



TIME
    DEPOSITS OF $100 OR MORE AT DECEMBER 31, 2007
  Maturing:3 months or less

$
210,004Over 3 to 6 months


140,330Over 6 to 12 months


85,037Over 12 months


70,120Total

$
505,491   SHORT-TERM
    BORROWINGS
      LONG-TERM
    BORROWINGS
                 40




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##### Table of Contents



OFF-BALANCE
    SHEET ARRANGEMENTS AND AGGREGATE CONTRACTUAL
    OBLIGATIONS
        Less Than


1 to 3


3 to 5


After 5As of December 31, 2007

Total


One Year


Years


Years


YearsContractual On Balance Sheet ObligationsLong-term debt

$
376,707


$
66,836


$
25,034


$
100,483


$
184,354Operating leases


15,360



2,556



3,492



2,485



6,827Total contractual cash obligations

$
392,067


$
69,392


$
28,526


$
102,968


$
191,181Off Balance Sheet ObligationsLines of credit

$
742,306


$
314,648


$
203,872


$
66,737


$
157,049Standby letters of credit


21,653



18,260



2,790



10



593Other commitments


140,392



112,068



15,573



2,587



10,164Total other commitments

$
904,351


$
444,976


$
222,235


$
69,334


$
167,806   CAPITAL
    RESOURCES
     41




---



##### Table of Contents



LIQUIDITY
          ACCOUNTING
    CHANGES
   42




---



##### Table of Contents



ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK        Earnings at Risk (EAR). 12-month
    Estimated Change in EAR from the Base Interest Rate
    Scenario−200 basis points


+200 basis pointsDecember 31, 2007


(2.55
)%


(1.44
)%December 31, 2006


0.28
%


(1.78
)%   Economic Value of Equity (EVE).
 43




---



##### Table of Contents



Estimated Change in EVE from the Base Interest Rate
    Scenario−200 basis points


+200 basis pointsDecember 31, 2007


(0.91
)%


(4.32
)%December 31, 2006


0.97
%


(6.58
)%    44




---



##### Table of Contents



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
  Rule 13a-15(f)
  
    Pertain to the maintenance of records that in reasonable detail
    accurately and fairly reflect the transactions and dispositions
    of our assets;
    Provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with U.S. generally accepted accounting
    principles, and that our receipts and expenditures are being
    made only in accordance with authorizations of our management
    and directors; and
    Provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of our
    assets that could have a material effect on the financial
    statements.          /s/  Michael
    T. Vea

/s/  Martin
    M. ZornChairman of the Board, President
    and Chief Executive Officer

Chief Financial Officer;
    Executive Vice President-Finance and Risk  45




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                
    46




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
       
    47




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Consolidated
    Balance Sheets
  December 31,2007


2006(In thousands, except share data)ASSETSCash and due from banks

$
72,360


$
65,400Federal funds sold and other short-term investments


3,630



3,998Total cash and cash equivalents


75,990



69,398Loans held for sale (at lower of cost or fair value)


5,928



1,764Securities available for sale


582,954



614,718Securities held for trading


53,782



Regulatory stock


29,179



24,410Loans, net of unearned income


2,311,378



1,790,976Less: Allowance for loan losses


(27,261
)


(21,155
)Net loans


2,284,117



1,769,821Premises and equipment


50,552



46,157Goodwill


123,050



44,491Other intangible assets


11,652



6,832Other assets


132,922



106,888TOTAL ASSETS

$
3,350,126


$
2,684,479LIABILITIESDeposits:Non-interest-bearing demand

$
265,554


$
252,851Interest-bearing:Savings, interest checking and money market accounts


918,023



794,280Time deposits of $100 or more


505,491



372,356Other interest-bearing


651,069



534,365Total deposits


2,340,137



1,953,852Short-term borrowings


272,270



217,518Long-term borrowings


376,707



254,521Other liabilities


33,208



23,114TOTAL LIABILITIES


3,022,322



2,449,005Commitments and contingent liabilities (Note 18)






SHAREHOLDERS EQUITYPreferred stock  1,000,000 shares authorizedNone outstandingCommon stock  $1.00 stated value:Shares authorized: 29,000,000Shares outstanding: 20,650,165 and 17,794,289 respectively


20,650



17,794Additional paid-in capital


206,991



135,054Retained earnings


104,913



88,355Accumulated other comprehensive income (loss)


(4,750
)


(5,729
)TOTAL SHAREHOLDERS EQUITY


327,804



235,474TOTAL LIABILITIES AND SHAREHOLDERS EQUITY

$
3,350,126


$
2,684,479    48




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Consolidated
    Statements of Income
  Year Ended December 31,2007


2006


2005(In thousands, except per share data)INTEREST INCOMEInterest and fees on loans:Taxable

$
160,026


$
125,088


$
103,801Tax-exempt


393



416



425Interest and dividends on securities:Taxable


24,588



26,525



28,591Tax-exempt


5,167



4,412



5,355Dividends on regulatory stock


1,286



1,479



1,528Interest on loans held for sale


235



140



355Interest on federal funds sold and other short-term investments


225



333



124Total interest income


191,920



158,393



140,179INTEREST EXPENSEInterest on deposits


73,742



54,421



35,024Interest on short-term borrowings


9,431



8,574



5,877Interest on long-term borrowings


15,498



13,092



16,657Total interest expense


98,671



76,087



57,558NET INTEREST INCOME


93,249



82,306



82,621Provision for loan losses


4,193



20,294



5,764Net interest income after provision for loan losses


89,056



62,012



76,857NON-INTEREST INCOMEService charges on deposit accounts


20,317



18,879



15,355Other service charges and fees


4,662



4,155



4,704Debit card income-interchange


4,379



3,301



2,438Trust income


2,391



2,361



1,979Net securities gains (losses)


(2,277
)


577



(1,532
)Gain on sale of other assets


642



93



6,786Cash surrender value life insurance


2,258



2,166



2,348Other


4,699



4,295



3,800Total non-interest income


37,071



35,827



35,878NON-INTEREST EXPENSESalaries and employee benefits


45,881



39,990



39,870Occupancy


9,430



8,182



7,830Equipment


3,443



3,412



3,584Professional fees


4,612



2,955



4,362Communication and transportation


5,430



4,933



4,742Processing


2,464



2,083



2,616Software


2,028



1,684



1,609Marketing


2,305



1,941



2,075Low income housing project losses


2,318



2,526



2,210Amortization of intangible assets


1,560



933



933Other


8,179



7,238



7,726Total non-interest expense


87,650



75,877



77,557Income before income taxes


38,477



21,962



35,178Income taxes


7,767



2,415



7,879NET INCOME

$
30,710


$
19,547


$
27,299Earnings per share:Basic

$
1.55


$
1.11


$
1.57Diluted


1.55



1.11



1.56Weighted average shares outstanding:Basic


19,778



17,546



17,382Diluted


19,812



17,658



17,468    49




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Consolidated
    Statements of Comprehensive Income
  Year Ended December 31,2007


2006


2005(In thousands)Net income

$
30,710


$
19,547


$
27,299Other comprehensive income, net of tax:Unrealized gain (loss) on securities:Unrealized gain (loss) arising in period (net of tax of $(51),
    $955, and $(5,482) respectively)


(75
)


1,433



(7,916
)Reclassification of realized amounts (net of tax of $923,
    $(234), and $621 respectively)


1,354



(343
)


911Net unrealized gain (loss) on securities


1,279



1,090



(7,005
)Unrealized gain (loss) on hedged derivatives arising in period
    (net of tax of $144 and $13 for 2007 and 2006 respectively)


210



19



Adjustment to the minimum postretirement liability (net of tax
    of $(302) for 2007)


(510
)






Net unrealized gain (loss), recognized in other comprehensive
    income


979



1,109



(7,005
)Comprehensive income

$
31,689


$
20,656


$
20,294    50




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Consolidated
    Statements of Changes In Shareholders Equity
  AccumulatedShares of





Additional





Other


TotalCommon


Common


Paid-In


Retained


Comprehensive


ShareholdersStock


Stock


Capital


Earnings


Income (Loss)


Equity(In thousands, except share and per share data)BALANCE AT JANUARY 1, 2005


17,375,004


$
17,375


$
126,399


$
64,481


$
1,036


$
209,291Net income














27,299







27,299Cash dividend declared ($0.64 per share)














(11,158
)






(11,158
)Change, net of tax, in unrealized gain/loss on:Securities


















(7,005
)


(7,005
)Exercise of stock options


71,723



72



1,227











1,299Grant of restricted stock, net of forfeitures


18,221



18



(18
)










Acceleration of stock option vesting










20











20Stock-based compensation expense










352











352BALANCE AT DECEMBER 31, 2005

$
17,464,948


$
17,465


$
127,980


$
80,622


$
(5,969
)

$
220,098Net income














19,547







19,547Cash dividend declared ($0.67 per share)














(11,814
)






(11,814
)Change, net of tax, in unrealized gain/loss on:Securities


















1,090



1,090Interest rate swaps


















19



19Adjustment to initially apply SFAS No. 158, net of tax


















(869
)


(869
)Exercise of stock options


289,862



290



6,075











6,365Grant of restricted stock, net of forfeitures


39,479



39



(39
)










Stock-based compensation expense










1,038











1,038BALANCE AT DECEMBER 31, 2006


17,794,289


$
17,794


$
135,054


$
88,355


$
(5,729
)

$
235,474Net income














30,710







30,710Cash dividend declared ($0.71 per share)














(14,152
)






(14,152
)Repurchase of outstanding shares


(404,450
)


(404
)


(9,152
)










(9,556
)Change, net of tax, in unrealized gain/loss on:Securities


















1,279



1,279Interest rate swaps


















210



210Change in unrealized postretirement liability, net of tax


















(510
)


(510
)Exercise of stock options


29,761



30



331











361Issuance of stock for acquisition


3,149,157



3,149



79,296











82,445Grant of restricted stock, net of forfeitures


81,408



81



(81
)










Stock-based compensation expense










1,543











1,543BALANCE AT DECEMBER 31, 2007


20,650,165


$
20,650


$
206,991


$
104,913


$
(4,750
)

$
327,804    51




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Consolidated
    Statements of Cash Flows
  Year Ended December 31,2007


2006


2005(In thousands)CASH FLOWS FROM OPERATING ACTIVITIESNet income

$
30,710


$
19,547


$
27,299Adjustments to reconcile net income to net cash provided by
    operating activities:Amortization and depreciation


6,852



5,950



7,030Provision for loan losses


4,193



20,294



5,764Net securities (gains) losses


(449
)


(577
)


1,532Impairment charge on available for sale securities


2,726







Net held for trading (gains) losses


(123
)






(Gain) loss on sale of premises and equipment






(65
)


202Gain on sale of other real estate owned


(77
)


(28
)


(109
)Loss on sale of other assets


12







Gain on sale of mortgage servicing rights


(577
)






Gain on sale of merchant processing program










(411
)Gain on sale of branches










(6,204
)Loss on low-income housing investments


2,318



2,526



2,210Proceeds from maturities of held for trading securities


471







Purchase of held for trading securities


(54,130
)






Increase (decrease) in deferred taxes


(2,219
)


(3,461
)


5,892Net gain on sale of loans held for sale


(803
)


(640
)


(681
)Proceeds from sale of loans held for sale


84,817



58,683



66,956Origination of loans held for sale


(88,178
)


(59,285
)


(65,624
)Change in other operating


6,267



5,283



8,028Net cash flows provided by (used in) operating activities


(8,190
)


48,227



51,884CASH FLOWS FROM INVESTING ACTIVITIESProceeds from maturities of securities available for sale


117,510



126,535



179,152Proceeds from sales of securities available for sale


51,815



7,904



30,595Purchase of securities available for sale


(51,743
)


(66,132
)


(104,210
)Purchase of bank owned life insurance


(13,628
)






Increase in loans made to customers


(94,846
)


(65,389
)


(103,806
)Decrease in loans from sale of branches










13,772Proceeds from sale of merchant processing program










585Purchase of premises and equipment


(2,870
)


(292
)


(4,869
)Proceeds from sale of premises and equipment from sale of
    branches










608Proceeds from sale of premises and equipment






125



211Proceeds from sale of other real estate owned


2,630



516



724Acquisition of Prairie Financial Corp, net of cash acquired


(34,250
)






Net cash flows provided by (used in) investing activities


(25,382
)


3,267



12,762CASH FLOWS FROM FINANCING ACTIVITIESNet increase (decrease) in deposits


(83,905
)


145,349



(19,590
)Decrease in deposits from sale of branches










(68,448
)Excess income tax benefit from employee stock-based awards


10



416



Net increase in short-term borrowed funds


49,862



15,284



26,641Proceeds from long-term borrowings


211,619



10,000



Repayment of long-term borrowings


(114,757
)


(210,266
)


(2,483
)Repurchase of common stock


(9,556
)






Dividends paid


(13,460
)


(11,583
)


(11,144
)Proceeds from exercise of stock options


351



5,949



1,299Net cash flows provided by (used in) financing activities


40,164



(44,851
)


(73,725
)Net increase (decrease) in cash and cash equivalents


6,592



6,643



(9,079
)Cash and cash equivalents at beginning of year


69,398



62,755



71,834Cash and cash equivalents at end of year

$
75,990


$
69,398


$
62,755    52




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Consolidated
    Statements of Cash Flows  (Continued)
  Year Ended December 31,2007


2006


2005(In thousands)SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATIONCash paid during the year:Interest

$
93,600


$
73,722


$
55,239Income taxes (benefit)


6,666



7,920



(288
)SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONSOther real estate acquired in settlement of loans


4,590



1,074



836Dividends declared and not paid


3,717



3,025



2,794    53




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial Statements
 (In
    Thousands, Except Share and Per Share Data)
  NOTE 1.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  DESCRIPTION
    OF BUSINESS
  and/or
    http://www.integrabank.com.
      BASIS
    OF CONSOLIDATION
       54




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    CASH
    AND CASH EQUIVALENTS
    TRUST ASSETS
    SECURITIES
          REGULATORY
    STOCK
    LOANS
   55




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Bulletin 2000-20).
  ALLOWANCE
    FOR LOAN LOSSES
         56




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
        OTHER
    REAL ESTATE OWNED
    PREMISES
    AND EQUIPMENT
    INTANGIBLE
    ASSETS
      BANK
    OWNED LIFE INSURANCE
   57




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  SECURITIES
    SOLD UNDER AGREEMENTS TO REPURCHASE
    MORTGAGE
    SERVICING RIGHTS
        MORTGAGE
    BANKING DERIVATIVES
    DERIVATIVE
    FINANCIAL INSTRUMENTS
   58




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
            INCOME
    TAXES
    COMPREHENSIVE
    INCOME
   59




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    LOSS
    CONTINGENCIES
    STOCK-BASED
    COMPENSATION
    For the Year EndedDecember 31,2005Net income:

$
27,299Add: Stock-based compensation expense included in reported net
    income, net of tax


221Deduct: Total stock-based employee compensation expense
    determined under fair value based method for all awards, net of
    tax


2,505Proforma

$
25,015Earnings per share:BasicAs reported

$
1.57Proforma


1.44DilutedAs reported

$
1.56Proforma


1.43      60




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    2007


2006


2005Number of options/SARs granted


178,464



259,106



300,154Stock price

$
20.68


$
23.17


$
21.67Risk-free interest rate


4.75
%


4.99
%


4.04
%Expected life, in years


6



6



7Expected volatility


21.10
%


24.49
%


33.20
%Expected dividend yield


2.95
%


2.80
%


3.00
%Estimated fair value per option/SARs

$
6.49


$
5.65


$
6.43   RECENT
    ACCOUNTING PRONOUNCEMENTS
         61




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Before





AfterApplication of





Application ofSFAS No. 158


Adjustments


SFAS No. 158Deferred income taxes

$
18,568


$
512


$
19,080Total assets


2,683,967



512



2,684,479Liability for postretirement plan


866



1,381



2,247Total liabilities


2,447,624



1,381



2,449,005Accumulated other comprehensive income


(4,860
)


(869
)


(5,729
)Total stockholders equity


236,343



(869
)


235,474   06-5, Bulletin No. 85-4, 06-5). Bulletin No. 85-4 06-5
     62




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  06-4, 06-04 06-04
  06-10, EITF 06-10 06-04 06-10
      NOTE 2 
    BUSINESS
    COMBINATIONS   63




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
            Securities available for sale

$
86,409Loans, net


428,213Goodwill


78,886Core deposit and other intangibles


6,380Other assets


27,240Total assets acquired

$
627,128Deposits

$
469,769Other liabilities


38,872Total liabilities assumed

$
508,641Net assets acquired

$
118,487  64




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Year Ended


Year EndedDecember 31, 2007


December 31, 2006Net interest income

$
99,341


$
102,901Non-interest income


37,933



38,050Total Revenue

$
137,274


$
140,951Net income

$
30,091


$
25,146Basic earnings per share

$
1.52


$
1.22Diluted earnings per share


1.52



1.21       NOTE 3.
    EARNINGS
    PER SHARE      For the Year Ended December 31,2007


2006


2005Net income

$
30,710


$
19,547


$
27,299Weighted average shares outstanding  Basic


19,777,780



17,546,260



17,381,682Stock option adjustment


33,784



99,820



54,759Restricted stock adjustment


516



12,381



31,102Average shares outstanding  Diluted


19,812,080



17,658,461



17,467,543Earnings per share-Basic

$
1.55


$
1.11


$
1.57Effect of stock options and restricted shares










(0.01
)Earnings per share  Diluted

$
1.55


$
1.11


$
1.56  65




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    NOTE 4.
    SECURITIES    Gross Unrealized


Gross UnrealizedAmortized Cost


Gains


Losses


Fair ValueDecember 31, 2007:U.S. Government agencies

$
16,074


$
69


$
1


$
16,142Mortgage-backed securities


122,976



661



826



122,811Collateralized Mortgage Obligations


280,544



576



5,137



275,983States & political subdivisions


104,528



2,385



94



106,819Other securities


64,846



110



3,757



61,199Total

$
588,968


$
3,801


$
9,815


$
582,954December 31, 2006:U.S. Government agencies

$
16,175


$
24


$
34


$
16,165Mortgage-backed securities


135,885



265



2,520



133,630Collateralized Mortgage Obligations


322,666



68



9,317



313,417States & political subdivisions


73,580



2,566



3



76,143Other securities


74,924



560



121



75,363Total

$
623,230


$
3,483


$
11,995


$
614,718     Available for Sale Securities

Fair ValueDue in one year or less

$
31,299Due from one to five years


218,251Due from five to ten years


226,244Due after ten years


107,160Total

$
582,954  66




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    2007


2006


2005Gross realized gains

$
1,272


$
597


$
89Gross realized losses


(823
)


(20
)


(1,166
)Other-than-temporary impairment


(2,726
)






(455
)Total

$
(2,277
)

$
577


$
(1,532
)     Less Than 12 Months


12 Months or More


TotalUnrealized





Unrealized





UnrealizedDecember 31, 2007

Fair Value


Losses


Fair Value


Losses


Fair Value


LossesU.S. government agencies

$
50


$



$
400


$
1


$
450


$
1Mortgage-backed securities


26,969



85



43,909



741



70,878



826Collateralized mortgage obligations


13,542



313



204,067



4,824



217,609



5,137State & political subdivisions


7,349



93



30



1



7,379



94Other securities


36,169



3,730



2,398



27



38,567



3,757Total

$
84,079


$
4,221


$
250,804


$
5,594


$
334,883


$
9,815   Less Than 12 Months


12 Months or More


TotalUnrealized





Unrealized





UnrealizedDecember 31, 2006

Fair Value


Losses


Fair Value


Losses


Fair Value


LossesU.S. government agencies

$
10,106


$
19


$
835


$
15


$
10,941


$
34Mortgage-backed securities


1,365



4



116,439



2,516



117,804



2,520Collateralized mortgage obligations


13,793



105



293,903



9,212



307,696



9,317State & political subdivisions


99



1



143



2



242



3Other securities


5,038



6



21,212



115



26,250



121Total

$
30,401


$
135


$
432,532


$
11,860


$
462,933


$
11,995     SECURITIES HELD FOR TRADING

December 31,(At Fair Value)

2007Mortgage-backed securities

$
18,385Collateralized Mortgage Obligations


35,397Total

$
53,782      67




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
                 68




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  NOTE 5.
    LOANS    2007


2006CommercialCommercial, industrial and agricultural loans

$
689,504


$
568,841Economic development loans and other obligations of state and
    political subdivisions


7,227



7,179Lease financing


5,291



5,495Total commercial


702,022



581,515Commercial real estateCommercial mortgages


298,151



180,249Construction and development


609,858



260,314Total commercial real estate


908,009



440,563Residential mortgages


380,429



436,309Home equity


145,403



132,704Consumer loans


175,516



199,887Total loans


2,311,379



1,790,978Less: unearned income


1



2Loans, net of unearned income

$
2,311,378


$
1,790,976     2007


2006


2005Nonaccrual

$
18,549


$
8,625


$
25,01390 days past due


4,118



228



40Total non-performing loans

$
22,667


$
8,853


$
25,053     2007


2006


2005Impaired loans for which there is a related allowance for loan
    losses

$
11,527


$
338


$
17,010Impaired loans for which there is no related allowance for loan
    losses


568



2,316



8,109Total impaired loans

$
12,095


$
2,654


$
25,119Allowance for loan losses for impaired loans included in the
    allowance for loan losses

$
752


$
233


$
4,380Average recorded investment in impaired loans


7,685



6,083



24,378Interest income recognized from impaired loans


407



87



338Cash basis interest income recognized from impaired loans


14



13



134    69




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    03-3,
  NOTE 6.
    RELATED
    PARTY TRANSACTIONS    2007


2006Balance as of January 1

$
3,382


$
1,233New loans


2,885



1,852Repayments


(2,795
)


(1,108
)Director and officer changes


1,023



1,405Balance as of December 31

$
4,495


$
3,382The balance of related party deposits as of December 31

$
13,668


$
9,822   NOTE 7.
    ALLOWANCE
    FOR LOAN LOSSES    2007


2006


2005Balance at beginning of year

$
21,155


$
24,392


$
23,794Allowance associated with acquisition


5,982







Loans charged to allowance


(5,441
)


(25,341
)


(6,618
)Recoveries credited to allowance


1,372



1,810



1,452Net charge-offs


(4,069
)


(23,531
)


(5,166
)Provision for loan losses


4,193



20,294



5,764Balance at end of year

$
27,261


$
21,155


$
24,392    70




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  NOTE 8.
    PREMISES
    AND EQUIPMENT    2007


2006Land

$
9,076


$
7,232Buildings and lease improvements


68,912



62,876Equipment


22,918



21,928Construction in progress


462



998Total cost


101,368



93,034Less accumulated depreciation


50,816



46,877Net premises and equipment

$
50,552


$
46,157     NOTE 9.
    INTANGIBLE
    ASSETS  December 31, 2007


December 31, 2006Gross





Net


Gross





NetCarrying


Accumulated


Carrying


Carrying


Accumulated


CarryingAmount


Amortization


Amount


Amount


Amortization


AmountGoodwill
    (Non-amortizing)

$
123,050


$



$
123,050


$
44,491


$



$
44,491Core deposits (Amortizing)


23,320



(11,766
)


11,554



17,080



(10,248
)


6,832Customer Relationship (Amortizing)


140



(42
)


98











Total intangible assets

$
146,510


$
(11,808
)

$
134,702


$
61,571


$
(10,248
)

$
51,323       Year Ending December 31,2008

$
1,7252009


1,6862010


1,6482011


1,6102012


1,565Thereafter


3,418  71




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  NOTE 10.
    MORTGAGE
    SERVICING RIGHTS    2007


2006


2005Balance at beginning of year

$
2,005


$
2,588


$
2,806Amount capitalized


56



230



573Amount amortized


(174
)


(813
)


(791
)Sale of MSRs


(1,887
)






Balance at end of year

$



$
2,005


$
2,588Fair Market Value

$



$
3,213


$
3,590       NOTE 11.
    DEPOSITS    2008

$
989,9722009


113,4942010


26,5852011


7,7122012 and thereafter


18,797Total

$
1,156,560     NOTE 12.
    INCOME
    TAXES    2007


2006


2005Federal:Current

$
5,247


$
5,874


$
1,205Deferred


2,583



(3,227
)


6,261Total


7,830



2,647



7,466State:Current

$
301


$



$
781Deferred


(364
)


(232
)


(368
)Total


(63
)


(232
)


413Total income taxes (benefit)

$
7,767


$
2,415


$
7,879    72




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    2007


2006


2005Federal income tax computed at the statutory rates

$
13,467


$
7,687


$
12,313Adjusted for effects of:Tax refunds


(886
)






Tax exempt interest


(1,757
)


(1,475
)


(1,761
)Nondeductible expenses


335



241



221Low income housing credit


(2,240
)


(2,389
)


(2,510
)Cash surrender value of life insurance policies


(768
)


(758
)


(822
)Dividend received deduction


(189
)


(215
)


(215
)State taxes, net of Federal benefit


(41
)


(151
)


807Other differences


(154
)


(525
)


(154
)Total income taxes

$
7,767


$
2,415


$
7,879     December 31,2007


2006Allowance for loan losses

$
12,221


$
14,012Alternative minimum tax credit carryforward


3,018



2,994Low income housing tax credit carryforward


9,121



9,544Net operating loss carryforward


2,506



2,141Other-than-temporary impairment


1,182



169Postretirement liability


1,206



833Unrealized loss on securities available for sale


2,437



3,446Other, net


1,333



606Total deferred tax assets


33,024



33,745Direct financing and leveraged leases


(4,310
)


(4,661
)Fair value adjustments from acquisitions


(452
)


(552
)FHLB dividend


(1,477
)


(1,518
)Goodwill and core deposit intangibles


(5,028
)


(1,025
)Mortgage servicing rights






(743
)Partnership income


(1,589
)


(1,609
)Premises and equipment


(4,156
)


(4,557
)Total deferred tax liabilities


(17,012
)


(14,665
)Net deferred tax asset

$
16,012


$
19,080    73




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
        2005-2007.
  NOTE 13.
    SHORT-TERM
    BORROWINGS    2007


2006Federal funds purchased

$
55,100


$
45,700Securities sold under agreements to repurchase


97,170



131,818Short-term Federal Home Loan Bank advances


120,000



40,000Total short-term borrowed funds

$
272,270


$
217,518A summary of selected data related to short-term borrowed funds
    follows:Average amount outstanding

$
194,033


$
178,976Maximum amount at any month-end


272,270



217,518Weighted average interest rate:During year


4.86
%


4.79
%End of year


4.26
%


5.03
%    74




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  NOTE 14.
    LONG-TERM
    BORROWINGS    2007


2006Federal Home Loan Bank (FHLB) AdvancesFixed maturity advances (weighted average rate of 4.57% and
    2.64% as of December 31, 2007 and 2006, respectively)

$
86,211


$
102,500Amortizing and other advances (weighted average rate of 5.11%
    and 5.55% as of December 31, 2007 and 2006, respectively)


1,607



3,079Total FHLB Advances


87,818



105,579Securities sold under repurchase agreements with maturities at
    various dates through 2013 (weighted average fixed rate of 3.94%
    and 2.78% as of December 31, 2007 and 2006, respectively)


165,000



75,000Note payable, secured by equipment, with a fixed interest rate
    of 7.26%, due at various dates through 2012


4,835



5,817Note payable, unsecured, with a floating interest rate equal to
    one-month LIBOR plus 0.875%, with a maturity date of
    April 1, 2012


20,000



Subordinated debt, unsecured, with a floating interest rate
    equal to three- month LIBOR plus 3.20%, with a maturity date of
    April 24, 2013


10,000



10,000Subordinated debt, unsecured, with a floating interest rate
    equal to three- month LIBOR plus 2.85%, with a maturity date of
    April 7, 2014


4,000



4,000Floating Rate Capital Securities, with an interest rate equal to
    six-month LIBOR plus 3.75%, with a maturity date of
    July 25, 2031, and callable effective July 25, 2011,
    at par


18,557



18,557Floating Rate Capital Securities, with an interest rate equal to
    three-month LIBOR plus 3.10%, with a maturity date of
    June 26, 2033, and callable effective June 26, 2008,
    at par


35,568



35,568Floating Rate Capital Securities, with an interest rate equal to
    three-month LIBOR plus 1.57%, with a maturity date of
    June 30, 2037, and callable effective June 30, 2012,
    at par


20,619



Floating Rate Capital Securities, with an interest rate equal to
    three-month LIBOR plus 1.70%, with a maturity date of
    December 15, 2036, and callable effective December 15,
    2011, at par


10,310



Total long-term borrowings

$
376,707


$
254,521     2008

$
68,8372009


13,7932010


15,2402011


15,3192012


99,164Thereafter


164,354Total principal payments

$
376,707  75




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
                     76




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    NOTE 15.
    REGULATORY
    MATTERS           77




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    MinimumMinimum Ratios For Capital


Capital RatiosActual


Adequacy Purposes


to be Well CapitalizedAmount


Ratio


Amount


Ratio


Amount


RatioAs of December 31, 2007Total Capital (to Risk Weighted Assets)Consolidated

$
305,723



11.52
%

$
212,342



8.00
%


N/A



N/AIntegra Bank


315,030



11.89
%


211,937



8.00
%


264,921



10.00
%Tier 1 Capital (to Risk Weighted Assets)Consolidated

$
247,906



9.34
%

$
106,171



4.00
%


N/A



N/AIntegra Bank


287,632



10.86
%


105,968



4.00
%


158,953



6.00
%Tier 1 Capital (to Average Assets)Consolidated

$
247,906



7.81
%

$
126,998



4.00
%


N/A



N/AIntegra Bank


287,632



9.08
%


126,688



4.00
%


158,361



5.00
%As of December 31, 2006Total Capital (to Risk Weighted Assets)Consolidated

$
258,313



12.51
%

$
165,171



8.00
%


N/A



N/AIntegra Bank


245,337



11.91
%


164,755



8.00
%


205,944



10.00
%Tier 1 Capital (to Risk Weighted Assets)Consolidated

$
223,053



10.80
%

$
82,586



4.00
%


N/A



N/AIntegra Bank


224,077



10.88
%


82,378



4.00
%


123,567



6.00
%Tier 1 Capital (to Average Assets)Consolidated

$
223,053



8.42
%

$
105,901



4.00
%


N/A



N/AIntegra Bank


224,077



8.49
%


105,610



4.00
%


132,012



5.00
%   NOTE 16.
    STOCK
    OPTION PLAN AND AWARDS     78




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    2007Weighted AverageShares


Exercise PriceOptions/SARs outstanding, beginning of year


1,266,511


$
21.91Options/SARs granted


178,464



20.68Options/SARs exercised


(29,761
)


11.80Options/SARs forfeited or expired


(28,231
)


33.00Options/SARs outstanding, end of year


1,386,983


$
21.74Options/SARs exercisable


1,067,849              79




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Weighted-AverageGrant-DateShares


Fair ValueRestricted shares outstanding, beginning of year


62,865


$
23.18Shares granted


91,424Shares vested


(30,311
)Shares forfeited


(10,016
)Restricted shares outstanding, end of year


113,962


$
22.80     NOTE 17.
    DISCLOSURES
    ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS    2007


2006Carrying


Fair


Carrying


FairAmount


Value


Amount


ValueFinancial Assets:Cash and short-term investments

$
75,990


$
75,990


$
69,398


$
69,398Loans held for sale


5,928



5,928



1,764



1,764Securities available for sale


582,954



582,954



614,718



614,718Securities held for trading


53,782



53,782







Regulatory stock


29,179



29,179



24,410



24,410Loans-net of
    allowance


2,284,117



2,312,017



1,769,821



1,853,425Accrued interest receivable


18,549



18,549



15,295



15,295Interest rate swap agreements

$
2,732


$
2,732


$
747


$
747Financial Liabilities:Deposits

$
2,340,137


$
2,355,379


$
1,953,852


$
1,956,879Short-term borrowings


272,270



272,640



217,518



217,702Long-term borrowings


376,707



385,944



254,521



262,280Accrued interest payable


15,248



15,248



10,176



10,176Interest rate swap agreements

$
1,907


$
1,907


$
396


$
396  80




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    CASH
    AND SHORT-TERM INVESTMENTS
    LOANS
    HELD FOR SALE
    SECURITIES
    LOANS
    DEPOSITS
    SHORT-TERM
    BORROWINGS
    LONG-TERM
    BORROWINGS
    DERIVATIVE
    INSTRUMENTS
    COMMITMENTS
    TO EXTEND CREDIT AND STANDBY LETTERS OF CREDIT
   81




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    NOTE 18.
    COMMITMENTS,
    CONTINGENCIES, AND CREDIT RISK    Year Ending December 31,2008


2,5562009


2,0282010


1,4642011


1,2802012


1,205Thereafter


6,827Total

$
15,360             Ranges of RatesVariable Rate

Fixed Rate

Total

on Fixed RateCommitment

Commitment

Commitment

CommitmentsCommitments to extend credit

$
799,646


$
55,784


$
855,430



3.48% - 21.00%Standby letters of credit


8,837



10,597



19,434



7.25% - 9.25%  82




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
        NOTE 19.
    INTEREST
    RATE CONTRACTS             83




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    NOTE 20.
    EMPLOYEE
    RETIREMENT PLANS  and/or
       84




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Postretirement Benefits2007


2006Change in Fair Value of Plan Assets:Balance at beginning of year

$



$
Actual return on plan assets






Employer contributions


177



160Benefits paid, net of retiree contributions


(177
)


(160
)Balance at end of year

$



$
Change in Accumulated Projected Benefit Obligation:Balance at beginning of year

$
2,247


$
1,874Service cost


150



99Interest costs


118



99Actuarial (gains) losses


910



335Benefits paid, net of retiree contributions


(177
)


(160
)Balance at end of year

$
3,248


$
2,247Funded status-(accrued) prepaid benefit cost

$
(3,248
)

$
(2,247
)       Postretirement Benefits2007


2006


2005Service cost  benefits earned during the period

$
150


$
99


$
113Interest cost on projected benefit obligation


118



99



113Amortization of prior service costs


34



34



34Amortization of net (gain) loss


64



47



63Net periodic benefit cost


366



279



323Net loss (gain)


910







Prior service cost (credit)


(34
)






Amortization of gain (loss)


(64
)






Total recognized in other comprehensive income


812







Total recognized in net periodic benefit cost and other
    comprehensive income

$
1,178


$
279


$
323    85




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Year Ending December 31,2008

$
1842009


2162010


2372011


2752012


291Thereafter


1,697   NOTE 21.
    SEGMENT
    INFORMATION      For the Year EndedDecember 31, 2007

Banking


Other


TotalInterest income

$
191,657


$
263


$
191,920Interest expense


90,226



8,445



98,671Net interest income


101,431



(8,182
)


93,249Provision for loan losses


4,193







4,193Other income


36,754



317



37,071Other expense


85,904



1,746



87,650Earnings before income taxes


48,088



(9,611
)


38,477Income taxes (benefit)


11,374



(3,607
)


7,767Net income (loss)

$
36,714


$
(6,004
)

$
30,710Segment assets

$
3,336,034



14,092


$
3,350,126   86




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  For the Year EndedDecember 31, 2006

Banking


Other


TotalInterest income

$
158,194


$
199


$
158,393Interest expense


70,326



5,761



76,087Net interest income


87,868



(5,562
)


82,306Provision for loan losses


20,294







20,294Other income


35,553



274



35,827Other expense


74,662



1,215



75,877Earnings before income taxes


28,465



(6,503
)


21,962Income taxes (benefit)


4,878



(2,463
)


2,415Net income (loss)

$
23,587


$
(4,040
)

$
19,547Segment assets

$
2,672,217


$
12,262


$
2,684,479   For the Year EndedDecember 31, 2005

Banking


Other


TotalInterest income

$
139,997


$
182


$
140,179Interest expense


53,016



4,542



57,558Net interest income


86,981



(4,360
)


82,621Provision for loan losses


5,764







5,764Other income


35,521



357



35,878Other expense


75,685



1,872



77,557Earnings before income taxes


41,053



(5,875
)


35,178Income taxes (benefit)


10,030



(2,151
)


7,879Net income (loss)

$
31,023


$
(3,724
)

$
27,299Segment assets

$
2,685,870


$
22,272


$
2,708,142  87




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  NOTE 22.
    FINANCIAL
    INFORMATION OF PARENT COMPANY    CONDENSED
    BALANCE SHEETS
  December 31,2007


2006ASSETSCash and cash equivalents

$
5,885


$
8,036Investment in banking subsidiaries


433,075



288,334Investment in other subsidiaries


965



798Securities available for sale


2,554



1,625Other assets


9,999



9,198TOTAL ASSETS

$
452,478


$
307,991LIABILITIESLong-term borrowings

$
119,054


$
68,125Dividends payable


3,717



3,025Other liabilities


1,903



1,367Total liabilities


124,674



72,517SHAREHOLDERS EQUITYCommon stock


20,650



17,794Additional paid-in capital


206,991



135,054Retained earnings


104,913



88,355Accumulated other comprehensive income (loss)


(4,750
)


(5,729
)Total shareholders equity


327,804



235,474TOTAL LIABILITIES AND SHAREHOLDERS EQUITY

$
452,478


$
307,991  88




---



##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  CONDENSED
    STATEMENTS OF INCOME
  Year Ended December 31,2007


2006


2005Dividends from banking subsidiaries

$
20,750


$
12,000


$
12,000Other income


257



161



155Total income


21,007



12,161



12,155Interest expense


8,505



5,783



4,558Other expenses


1,551



1,138



1,736Total expenses


10,056



6,921



6,294Income before income taxes and equity in undistributed earnings
    of subsidiaries


10,951



5,240



5,861Income tax benefit


3,640



2,506



2,195Income before equity in undistributed earnings of subsidiaries


14,591



7,746



8,056Equity in undistributed earnings of subsidiaries


16,119



11,801



19,243Net income

$
30,710


$
19,547


$
27,299  89




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##### Table of Contents



INTEGRA
    BANK CORPORATION and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  CONDENSED
    STATEMENTS OF CASH FLOWS
  Year Ended December 31,2007


2006


2005CASH FLOWS FROM OPERATING ACTIVITIESNet income

$
30,710


$
19,547


$
27,299Adjustments to reconcile net income to net cash provided by
    operating activities:Amortization and depreciation


153



154



160Employee benefit expenses


1,508



817



373Excess distributions (undistributed) earnings of subsidiaries


(16,120
)


(11,801
)


(19,243
)Decrease in deferred taxes


(845
)


(101
)


(84
)(Increase) decrease in other assets


(107
)


(1,303
)


928(Decrease) increase in other liabilities


536



(224
)


424Net cash flows provided by operating activities


15,835



7,089



9,857CASH FLOWS FROM INVESTING ACTIVITIESProceeds from call of securities










1,000Acquisition of Prairie Financial Corp, net of cash acquired


(35,331
)






Payments for investments in and advances to subsidiaries


(619
)






Net cash flows provided by (used in) investing activities


(35,950
)






1,000CASH FLOWS FROM FINANCING ACTIVITIESRepurchase of common stock


(9,556
)






Excess income tax benefit from employee stock-based awards


10







Dividends paid


(13,460
)


(11,583
)


(11,144
)Proceeds from long-term borrowings


40,619







Proceeds from exercise of stock options


351



5,949



1,298Net cash flows provided by (used in) financing activities


17,964



(5,634
)


(9,846
)Net increase (decrease) in cash and cash equivalents


(2,151
)


1,455



1,011Cash and cash equivalents at beginning of year


8,036



6,581



5,570Cash and cash equivalents at end of year

$
5,885


$
8,036


$
6,581  90




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##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Rules 13a-15(e) 15d-15c) Form 10-K
      ITEM 9B.
    OTHER
    INFORMATION   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   91




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##### Table of Contents



PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Form 10-K
                         92




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##### Table of Contents



SIGNATURES      /s/  MICHAEL
    T. VEA        /s/  MARTIN
    M. ZORN        /s/  MICHAEL
    B. CARROLL         Date/s/  SANDRA
    CLARK BERRYSandra
    Clark Berry

Director

3/12/2008/s/  H.
    RAY HOOPSH.
    Ray Hoops

Director

3/12/2008/s/  GEORGE
    D. MARTINGeorge
    D. Martin

Director

3/12/2008/s/  THOMAS
    W. MILLERThomas
    W. Miller

Director

3/12/2008/s/  ARTHUR
    D. PRINGLE, IIIArthur
    D. Pringle, III

Director

3/12/2008 93




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##### Table of Contents



Date/s/  BRADLEY
    M. STEVENSBradley
    M. Stevens

Director

3/12/2008/s/  RICHARD
    M. STIVERSRichard
    M. Stivers

Director

3/12/2008/s/  ROBERT
    W. SWANRobert
    W. Swan

Director

3/12/2008/s/  WILLIAM
    E. VIETHWilliam
    E. Vieth

Director

3/12/2008/s/  DANIEL
    T. WOLFEDaniel
    T. Wolfe

Director

3/12/2008  94




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##### Table of Contents



EXHIBIT INDEX  ExhibitNumber

Description of Exhibit3(a)(i)

Restated Articles of Incorporation (incorporated by reference to
    Exhibit 3.1 to
    Form 8-A/A
    dated June 12, 1998)3(a)(ii)

Articles of Amendment dated May 17, 2000 (incorporated by
    reference to Exhibit 3(a) to Quarterly Report on
    Form 10-Q
    for the period ending September 30, 2000)3(a)(iii)

Articles of Amendment dated July 18, 2001 (incorporated by
    reference to Exhibit 1 to the Current Report on
    Form 8-K
    dated July 18, 2001)3(b)

By-Laws (incorporated by reference to Exhibit 3(b) to the
    Current Report on
    Form 8-K
    dated December 19, 2007, as amended through
    December 19, 2007)10(a)*

Integra Bank Corporation Employees 401(K) Plan (2003
    Restatement) (incorporated by reference to Exhibit 10(a) to
    Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2006)10(b)*

Contract of Employment dated August 23, 1999, between
    National City Bancshares, Inc. and Michael T. Vea (incorporated
    by reference to Exhibit 10.1 to Quarterly Report on
    Form 10-Q
    for the period ending September 30, 1999)10(c)*

Amendment to Contract of Employment dated September 20,
    2000 between Integra Bank Corporation and Michael T. Vea
    (incorporated by reference to Exhibit 10(h) to Annual
    Report on
    Form 10-K
    for the fiscal year ended December 31, 2000)10(d)*

Nonqualified Stock Option Agreement (Non Plan) dated
    September 7, 1999, between National City Bancshares, Inc.
    and Michael T. Vea (incorporated by reference to
    Exhibit 10.3 to Quarterly Report on
    Form 10-Q
    for the period ending September 30, 1999)10(e)*

Employment Agreement dated May 22, 2007, between Integra
    Bank Corporation and Archie M. Brown Jr. (incorporated by
    reference to Exhibit 10.3 to Quarterly Report on
    Form 10-Q
    for the period ending June 30, 2007)10(f)*

Employment Agreement dated May 22, 2007, between Integra
    Bank Corporation and Martin M. Zorn (incorporated by reference
    to Exhibit 10.4 to Quarterly Report on
    Form 10-Q
    for the period ending June 30, 2007)10(g)*

Change in Control Benefits Agreement dated May 22, 2007,
    between Integra Bank Corporation and Roger M. Duncan
    (incorporated by reference to Exhibit 10.5 to Quarterly
    Report on
    Form 10-Q
    for the period ending June 30, 2007)10(h)*

Change in Control Benefits Agreement dated May 22, 2007,
    between Integra Bank Corporation and Roger D. Watson
    (incorporated by reference to Exhibit 10.6 to Quarterly
    Report on
    Form 10-Q
    for the period ending June 30, 2007)10(i)*

Change in Control Benefits Agreement dated May 22, 2007,
    between Integra Bank Corporation and Raymond D. Beck
    (incorporated by reference to Exhibit 10.7 to Quarterly
    Report on
    Form 10-Q
    for the period ending June 30, 2007)10(j)*

Change in Control Benefits Agreement dated May 22, 2007,
    between Integra Bank Corporation and Michael B. Carroll
    (incorporated by reference to Exhibit 10.8 to Quarterly
    Report on
    Form 10-Q
    for the period ending June 30, 2007)10(k)*

Employment Agreement with effective date of April 9, 2007,
    between Integra Bank Corporation and Bradley M. Stevens
    (incorporated by reference to Exhibit 10.1 to Quarterly
    Report on
    Form 10-Q
    for the period ending March 31, 2007)10(l)*

First Amendment to Integra Bank Corporation Employees
    401(K) Plan dated January 1, 2003 (incorporated by
    reference to Exhibit 10(h) to Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2006)10(m)*

Second Amendment to Integra Bank Corporation Employees
    401(K) Plan dated March 28, 2005 (incorporated by
    reference to Exhibit 10(i) to Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2006)10(n)*

Third Amendment to Integra Bank Corporation Employees
    401(K) Plan dated January 1, 2006 (incorporated by
    reference to Exhibit 10(j) to Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2006) 95




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##### Table of Contents



ExhibitNumber

Description of Exhibit10(o)*

Fourth Amendment to Integra Bank Corporation Employees
    401(K) Plan dated July 1, 2007 (incorporated by
    reference to Exhibit 10.1 to Quarterly Report on
    Form 10-Q
    for the period ending September 30, 2007)10(p)*

Integra Bank Corporation 2007 Equity Incentive Plan
    (incorporated by reference to Exhibit A to Proxy Statement
    on Schedule 14A filed March 16, 2007)10(q)*

Integra Bank Corporation Annual Cash Incentive Plan
    (incorporated by reference to Exhibit B to Proxy Statement
    on Schedule 14A filed March 16, 2007)10(r)*

Form of Restricted Stock Agreement (Director) under 2007 Equity
    Incentive Plan (incorporated by reference to Exhibit 10.3
    to the Current Report on
    Form 8-K
    dated April 18, 2007)10(s)*

Form of Restricted Stock Agreement (Employee) under 2007 Equity
    Incentive Plan (incorporated by reference to Exhibit 10.4
    to the Current Report on
    Form 8-K
    dated April 18, 2007)10(t)*

Form of Nonqualified Stock Option Agreement under 2007 Equity
    Incentive Plan (incorporated by reference to Exhibit 10.5
    to the Current Report on
    Form 8-K
    dated April 18, 2007)10(u)*

Form of Stock Appreciation Right Agreement under 2007 Equity
    Incentive Plan (incorporated by reference to Exhibit 10.6
    to the Current Report on
    Form 8-K
    dated April 18, 2007)10(v)*

Summary Sheet of 2008 Compensation21

Subsidiaries of the Registrant23(a)

Consent of PricewaterhouseCoopers LLP23(b)

Consent of Crowe Chizek and Company LLC31(a)

Certification pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002 of Chief Executive Officer31(b)

Certification pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002 of Chief Financial Officer32

Certification pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002     *
    
    The indicated exhibit is a management contract, compensatory
    plan or arrangement required to be filed by Item 601 of
    Regulation S-K. 96