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|                                                                                 | December      31, |
|--------------------------------------------------------------------------------------|-------------------|
|                                                                                 | 2007              |   | 2006 |
| ASSETS                                                                               |              |   |   |
| Cash      and due from banks                                                         | $                 | 99,102 |   | $ | 104,222 |
| Federal      funds sold                                                              |              | 5 |   |   | 18,673 |
| Securities                                                                           |              |   |   |   |   |
| Available      for sale, at fair value                                               |              | 131,378 |   |   | 111,112 |
| Held      to maturity (fair value $3,766 and $3,623)                                 |              | 3,743 |   |   | 3,599 |
| Total      securities                                                                |              | 135,121 |   |   | 114,711 |
|                                                                                 |              |   |   |   |   |
| Loans      held for resale                                                           |              | 6,227 |   |   | 7,220 |
| Loans                                                                                |              | 3,605,895 |   |   | 2,900,780 |
| Allowance      for loan losses                                                       |              | (53,995 |   |   | (40,649 |
| Net      loans                                                                       |              | 3,558,127 |   |   | 2,867,351 |
|                                                                                 |              |   |   |   |   |
| Premises      and equipment, net                                                     |              | 47,293 |   |   | 30,026 |
| Intangible      assets                                                               |              | 78,150 |   |   | 41,227 |
| Federal      Home Loan Bank (FHLB) stock                                             |              | 18,738 |   |   | 15,030 |
| Bank      owned life insurance                                                       |              | 23,734 |   |   | 22,198 |
| Other      real estate owned                                                         |              | 367 |   |   | - |
| Other      assets                                                                    |              | 35,052 |   |   | 25,026 |
| Total      assets                                                                    | $                 | 3,995,689 |   | $ | 3,238,464 |
|                                                                                 |              |   |   |   |   |
| LIABILITIES                                                                          |              |   |   |   |   |
| Deposits                                                                             |              |   |   |   |   |
| Noninterest      bearing                                                             | $                 | 390,526 |   | $ | 406,621 |
| Interest      bearing                                                                |              | 2,552,710 |   |   | 2,047,011 |
| Total      deposits                                                                  |              | 2,943,236 |   |   | 2,453,632 |
|                                                                                 |              |   |   |   |   |
| Federal      funds purchased and securities sold under agreements to      repurchase |              | 258,145 |   |   | 81,673 |
| Federal      Home Loan Bank advances                                                 |              | 298,636 |   |   | 282,017 |
| Junior      subordinated debentures                                                  |              | 5,156 |   |   | 5,156 |
| Other      liabilities                                                               |              | 30,904 |   |   | 20,703 |
| Total      liabilities                                                               |              | 3,536,077 |   |   | 2,843,181 |
|                                                                                 |              |   |   |   |   |
| Commitments      and Contingencies (Note 17)                                         |              |   |   |   |   |
|                                                                                 |              |   |   |   |   |
| SHAREOWNERS'      EQUITY                                                             |              |   |   |   |   |
| Preferred      stock, no par value; 10,000,000 shares authorized                     |              | - |   |   | - |
| Common      stock, no par value; 100,000,000 shares authorized; 46,950,878      and  |              |   |   |   |   |
| 45,350,316      shares issued and outstanding in 2007 and 2006,    respectively      |              | 252,292 |   |   | 186,163 |
| Retained      earnings                                                               |              | 202,453 |   |   | 202,945 |
| Accumulated      other comprehensive income, net of tax                              |              | 4,867 |   |   | 6,175 |
| Total      shareowners' equity                                                       |              | 459,612 |   |   | 395,283 |
| Total      liabilities and shareowners' equity                                       | $                 | 3,995,689 |   | $ | 3,238,464 |

----

|                                                     |   | For      the Year Ended December 31, |
|----------------------------------------------------------|--------|--------------------------------------|
|                                                     |   | 2007                                 |   |   | 2006 |   |   | 2005 |
| INTEREST      INCOME                                     |   |                                 |   |   |   |   |   |   |
| Interest      and fees on loans                          |   | $                                    | 294,099 |   |   | $ | 244,493 |   |   | $ | 173,753 |
| Interest      on federal funds sold                      |   |                                 | 958 |   |   |   | 1,448 |   |   |   | 361 |
| Interest      on investments                             |   |                                 |   |   |   |   |   |   |   |   |   |
| Taxable                                                  |   |                                 | 4,475 |   |   |   | 3,998 |   |   |   | 4,497 |
| Exempt      from federal income tax                      |   |                                 | 140 |   |   |   | 205 |   |   |   | 275 |
| Total      interest income                               |   |                                 | 299,672 |   |   |   | 250,144 |   |   |   | 178,886 |
| INTEREST      EXPENSE                                    |   |                                 |   |   |   |   |   |   |   |   |   |
| Interest      on deposits                                |   |                                 | 97,080 |   |   |   | 73,526 |   |   |   | 40,714 |
| Interest      on FHLB advances                           |   |                                 | 13,402 |   |   |   | 12,195 |   |   |   | 10,434 |
| Interest      on federal funds purchased and securities  |   |                                 |   |   |   |   |   |   |   |   |   |
| sold      under agreements to repurchase                 |   |                                 | 2,559 |   |   |   | 1,221 |   |   |   | 588 |
| Total      interest expense                              |   |                                 | 113,041 |   |   |   | 86,942 |   |   |   | 51,736 |
| Net      interest income                                 |   |                                 | 186,631 |   |   |   | 163,202 |   |   |   | 127,150 |
|                                                     |   |                                 |   |   |   |   |   |   |   |   |   |
| PROVISION      FOR LOAN LOSSES                           |   |                                 | 11,400 |   |   |   | 7,500 |   |   |   | 4,200 |
|                                                     |   |                                 |   |   |   |   |   |   |   |   |   |
| Net      interest income after provision for loan losses |   |                                 | 175,231 |   |   |   | 155,702 |   |   |   | 122,950 |
|                                                     |   |                                 |   |   |   |   |   |   |   |   |   |
| NONINTEREST      INCOME                                  |   |                                 |   |   |   |   |   |   |   |   |   |
| Loss      on sale of securities                          |   |                                 | (937 | ) |   |   | (25 | ) |   |   | - |
| Provision      for loss on equity investment             |   |                                 | - |   |   |   | - |   |   |   | (211 |
| Gain      on sale of secondary mortgage loans            |   |                                 | 1,586 |   |   |   | 1,491 |   |   |   | 1,249 |
| Gain      on sale of premises and equipment              |   |                                 | 24 |   |   |   | 2,445 |   |   |   | - |
| Service      charges on deposit accounts                 |   |                                 | 4,721 |   |   |   | 4,214 |   |   |   | 4,365 |
| Other      noninterest income                            |   |                                 | 7,915 |   |   |   | 7,498 |   |   |   | 7,672 |
| Total      noninterest income                            |   |                                 | 13,309 |   |   |   | 15,623 |   |   |   | 13,075 |
|                                                     |   |                                 |   |   |   |   |   |   |   |   |   |
| NONINTEREST      EXPENSE                                 |   |                                 |   |   |   |   |   |   |   |   |   |
| Salaries      and employee benefits                      |   |                                 | 48,297 |   |   |   | 42,104 |   |   |   | 36,543 |
| Occupancy      expense                                   |   |                                 | 9,956 |   |   |   | 9,108 |   |   |   | 7,654 |
| State      business taxes                                |   |                                 | 2,066 |   |   |   | 2,213 |   |   |   | 1,798 |
| FHLB      prepayment penalty                             |   |                                 | 1,534 |   |   |   | - |   |   |   | - |
| Other      noninterest expense                           |   |                                 | 15,163 |   |   |   | 13,621 |   |   |   | 12,117 |
| Total      noninterest expense                           |   |                                 | 77,016 |   |   |   | 67,046 |   |   |   | 58,112 |
|                                                     |   |                                 |   |   |   |   |   |   |   |   |   |
| INCOME      BEFORE PROVISION FOR INCOME TAX              |   |                                 | 111,524 |   |   |   | 104,279 |   |   |   | 77,913 |
|                                                     |   |                                 |   |   |   |   |   |   |   |   |   |
| PROVISION      FOR INCOME TAX                            |   |                                 | 37,586 |   |   |   | 35,369 |   |   |   | 26,329 |
|                                                     |   |                                 |   |   |   |   |   |   |   |   |   |
| NET      INCOME                                          |   | $                                    | 73,938 |   |   | $ | 68,910 |   |   | $ | 51,584 |
| Weighted      average number of                          |   |                                 |   |   |   |   |   |   |   |   |   |
| shares      outstanding for the period                   |   |                                 | 45,265,723 |   |   |   | 45,009,526 |   |   |   | 42,481,644 |
| Basic      earnings per share                            |   | $                                    | 1.63 |   |   | $ | 1.53 |   |   | $ | 1.21 |
| Weighted      average number of diluted shares           |   |                                 |   |   |   |   |   |   |   |   |   |
| outstanding      for period                              |   |                                 | 45,601,066 |   |   |   | 45,484,897 |   |   |   | 42,742,551 |
| Diluted      earnings per share                          |   | $                                    | 1.62 |   |   | $ | 1.52 |   |   | $ | 1.21 |

----

|                                                          |              |       |          |   |     |    |    |     |   | Accumulated   |    |    |   |
|---------------------------------------------------------------|-------------------|------------|---------------|--------|----------|---------|---------|----------|--------|---------------|---------|---------|--------|
|                                                          |              |       |          |   |     |    |    |     |   | Other         |    |    |   |
|                                                          |              |       |          |   |     |    |    |     |   | Comprehensive |    |    |   |
|                                                          | Common      Stock |       | Comprehensive |   | Retained |    | Income/ |     |   |          |
|                                                          | Shares            |       |          | Amount |     | Income  |    | Earnings |   | (Loss)        |    | Total   |   |
|                                                          |              |       |          |   |     |    |    |     |   |          |    |    |   |
| Balance,      December 31, 2004                               |              | 18,745,185 |          |   | $        | 125,315 |    |     |   | $             | 125,518 |    | $      | 3,397 |   | $ | 254,230 |   |
|                                                          |              |       |          |   |     |    |    |     |   |          |    |    |   |   |   |   |   |   |
| Comprehensive      Income:                                    |              |       |          |   |     |    |    |     |   |          |    |    |   |   |   |   |   |   |
| Net      income for 2005                                      |              | -          |          |   |     | -       |    | $        | 51,584 |          |    | 51,584  |   |   | - |   |   | 51,584 |   |
| Other      comprehensive income,                              |              |       |          |   |     |    |    |     |   |          |    |    |   |   |   |   |   |   |   |
| Unrealized      gain on available                             |              |       |          |   |     |    |    |     |   |          |    |    |   |   |   |   |   |   |   |
| for      sale securities, net of tax $554                     |              | -          |          |   |     | -       |    |     | 1,027  |          |    | -       |   |   | 1,027 |   |   | 1,027 |   |
|      Total      comprehensive income |              |       |          |   |     |    |    |     | 52,611 |          |    |    |   |   |   |   |   |   |   |
| Stock      options exercised                                  |              | 154,791    |          |   |     | 2,549   |    |     |   |          |    | -       |   |   | - |   |   | 2,549 |   |
| Stock      award plan                                         |              | 22,584     |          |   |     | 601     |    |     |   |          |    | -       |   |   | - |   |   | 601 |   |
| Issuance      of common shares                                |              | 143,438    |          |   |     | 3,928   |    |     |   |          |    | -       |   |   | - |   |   | 3,928 |   |
| Tax      benefit from stock options                           |              | -          |          |   |     | 205     |    |     |   |          |    | -       |   |   | - |   |   | 205 |   |
| Three      for two stock split                                |              | 9,372,152  |          |   |     | -       |    |     |   |          |    | -       |   |   | - |   |   | - |   |
| Cash      dividends declared (40¢ per share)             |              | -          |          |   |     | -       |    |     |   |          |    | (18,027 | )      |   | - |   |   | (18,027 | ) |
| Balance,      December 31, 2005                               |              | 28,438,150 |          |   |     | 132,598 |    |     |   |          |    | 159,075 |   |   | 4,424 |   |   | 296,097 |   |
|                                                          |              |       |          |   |     |    |    |     |   |          |    |    |   |   |   |   |   |   |   |
| Comprehensive      Income:                                    |              |       |          |   |     |    |    |     |   |          |    |    |   |   |   |   |   |   |   |
| Net      income for 2006                                      |              | -          |          |   |     | -       |    |     | 68,910 |          |    | 68,910  |   |   | - |   |   | 68,910 |   |
| Other      comprehensive income,                              |              |       |          |   |     |    |    |     |   |          |    |    |   |   |   |   |   |   |   |
| Unrealized      gain on available                             |              |       |          |   |     |    |    |     |   |          |    |    |   |   |   |   |   |   |   |
| for      sale securities, net of tax $942                     |              | -          |          |   |     | -       |    |     | 1,751  |          |    | -       |   |   | 1,751 |   |   | 1,751 |   |
|      Total      comprehensive income |              |       |          |   |     |    |    |     | 70,661 |          |    |    |   |   |   |   |   |   |   |
| Stock      options exercised                                  |              | 275,283    |          |   |     | 4,218   |    |     |   |          |    | -       |   |   | - |   |   | 4,218 |   |
| Stock      award plan                                         |              | 20,542     |          |   |     | 1,156   |    |     |   |          |    | -       |   |   | - |   |   | 1,156 |   |
| Three      for two stock split                                |              | 15,102,634 |          |   |     | -       |    |     |   |          |    | -       |   |   | - |   |   | - |   |
| Tax      benefit from stock options                           |              |       |          |   |     | 1,205   |    |     |   |          |    | -       |   |   | - |   |   | 1,205 |   |
| Merger                                                        |              | 1,513,707  |          |   |     | 46,913  |    |     |   |          |    | -       |   |   |   |   |   | 46,913 |   |
| Stock      option expense                                     |              |       |          |   |     | 73      |    |     |   |          |    | -       |   |   | - |   |   | 73 |   |
| Cash      dividends declared (50¢ per share)             |              | -          |          |   |     | -       |    |     |   |          |    | (25,040 | )      |   | - |   |   | (25,040 | ) |
| Balance,      December 31, 2006                               |              | 45,350,316 |          |   |     | 186,163 |    |     |   |          |    | 202,945 |   |   | 6,175 |   |   | 395,283 |   |
|                                                          |              |       |          |   |     |    |    |     |   |          |    |    |   |   |   |   |   |   |   |
| Comprehensive      Income:                                    |              |       |          |   |     |    |    |     |   |          |    |    |   |   |   |   |   |   |   |
| Net      income for 2007                                      |              | -          |          |   |     | -       |    |     | 73,938 |          |    | 73,938  |   |   | - |   |   | 73,938 |   |
| Other      comprehensive income,                              |              |       |          |   |     |    |    |     |   |          |    |    |   |   |   |   |   |   |   |
| Unrealized      loss on available                             |              |       |          |   |     |    |    |     |   |          |    |    |   |   |   |   |   |   |   |
| for      sale securities, net of tax ($699)                   |              | -          |          |   |     | -       |    |     | (1,308 | )             |    | -       |   |   | (1,308 | ) |   | (1,308 | ) |
|      Total      comprehensive income |              |       |          |   |     |    |    | $        | 72,630 |          |    |    |   |   |   |   |   |   |   |
| Stock      options exercised                                  |              | 139,105    |          |   |     | 1,861   |    |     |   |          |    | -       |   |   | - |   |   | 1,861 |   |
| Stock      award plan                                         |              | 71,994     |          |   |     | 892     |    |     |   |          |    | -       |   |   | - |   |   | 892 |   |
| Tax      benefit from stock options                           |              | -          |          |   |     | 237     |    |     |   |          |    | -       |   |   | - |   |   | 237 |   |
| Stock      option expense                                     |              | -          |          |   |     | 1,691   |    |     |   |          |    | -       |   |   | - |   |   | 1,691 |   |
| Merger                                                        |              | 3,230,795  |          |   |     | 61,613  |    |     |   |          |    | -       |   |   | - |   |   | 61,613 |   |
| Fractional      shares -  merger                    |              | -          |          |   |     | -       |    |     |   |          |    | (1      | )      |   | - |   |   | (1 | ) |
| Stock      repurchase                                         |              | (1,841,332 | )             |   |     | (165    |    |     |   |          |    | (44,219 | )      |   | - |   |   | (44,384 | ) |
| Cash      dividends declared (65¢ per share)             |              | -          |          |   |     | -       |    |     |   |          |    | (30,210 | )      |   | - |   |   | (30,210 | ) |
| Balance,      December 31, 2007                               |              | 46,950,878 |          |   | $        | 252,292 |    |     |   |          | $       | 202,453 |   | $ | 4,867 |   | $ | 459,612 |   |

----

|                                                                                       |   | For      the Year Ended December 31, |     |
|--------------------------------------------------------------------------------------------|--------|--------------------------------------|----------|
|                                                                                       |   | 2007                                 |     |   | 2006 |   |   | 2005 |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES                                                  |   |                                 |     |   |   |   |   |   |   |
| Net      income                                                                            |   | $                                    | 73,938   |   |   | $ | 68,910 |   |   | $ | 51,584 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities |   |                                 |     |   |   |   |   |   |   |   |   |   |
| Depreciation      and amortization                                                         |   |                                 | 3,032    |   |   |   | 4,010 |   |   |   | 2,704 |   |
| Provision      for loan losses                                                             |   |                                 | 11,400   |   |   |   | 7,500 |   |   |   | 4,200 |   |
| Loss      on sale of securities                                                            |   |                                 | 937      |   |   |   | 25 |   |   |   | - |   |
| Provision      for loss on equity investment                                               |   |                                 | -        |   |   |   | - |   |   |   | 211 |   |
| Gain      on sale of premises and equipment                                                |   |                                 | (24      | ) |   |   | (2,445 | ) |   |   | - |   |
| Gain      on sale of other real estate owned                                               |   |                                 | -        |   |   |   | - |   |   |   | (25 | ) |
| Gain      on sale of secondary market loans                                                |   |                                 | (1,586   | ) |   |   | (1,491 | ) |   |   | (1,249 | ) |
| Proceeds      from sales of mortgage loans                                                 |   |                                 | 158,345  |   |   |   | 111,720 |   |   |   | 91,293 |   |
| Origination      of mortgage loans held for sale                                           |   |                                 | (155,766 | ) |   |   | (111,736 | ) |   |   | (93,191 | ) |
| Deferred      taxes                                                                        |   |                                 | (5,480   | ) |   |   | (1,721 | ) |   |   | (1,633 | ) |
| Stock      award plan compensation                                                         |   |                                 | 892      |   |   |   | 1,156 |   |   |   | 601 |   |
| Stock      option expense                                                                  |   |                                 | 1,691    |   |   |   | 73 |   |   |   | - |   |
| Excess      tax benefits associated with equity-based compensation                         |   |                                 | (237     | ) |   |   | (1,205 | ) |   |   | (205 | ) |
| Dividend      income from Federal Home Loan Bank (stock)                                   |   |                                 | -        |   |   |   | - |   |   |   | (58 | ) |
| Increase      in cash surrender value of BOLI                                              |   |                                 | (1,536   | ) |   |   | (888 | ) |   |   | (736 | ) |
| Changes      in operating assets and liabilities                                           |   |                                 |     |   |   |   |   |   |   |   |   |   |
| Income      taxes payable                                                                  |   |                                 | (2,100   | ) |   |   | (1,950 | ) |   |   | 1,964 |   |
| Interest      receivable                                                                   |   |                                 | (2,689   | ) |   |   | (3,780 | ) |   |   | (3,005 | ) |
| Interest      payable                                                                      |   |                                 | 4,292    |   |   |   | 4,513 |   |   |   | 3,033 |   |
| Other      operating activities                                                            |   |                                 | (1,161   | ) |   |   | (2,127 | ) |   |   | 2,015 |   |
| Net      cash provided by operating activities                                             |   |                                 | 83,948   |   |   |   | 70,564 |   |   |   | 57,503 |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES                                                  |   |                                 |     |   |   |   |   |   |   |   |   |   |
| Net      change in federal funds sold                                                      |   |                                 | 18,668   |   |   |   | (17,940 | ) |   |   | 5,213 |   |
| Purchase      of securities available for sale                                             |   |                                 | (84,724  | ) |   |   | (17,324 | ) |   |   | (58,923 | ) |
| Proceeds      from sales of available for sale securities                                  |   |                                 | 48,039   |   |   |   | - |   |   |   | 1,852 |   |
| Proceeds      from maturities of available for sale securities                             |   |                                 | 21,390   |   |   |   | 20,515 |   |   |   | 90,294 |   |
| Purchase      of held to maturity securities                                               |   |                                 | (1,019   | ) |   |   | - |   |   |   | - |   |
| Proceeds      from maturities of held to maturity securities                               |   |                                 | 875      |   |   |   | 2,114 |   |   |   | 1,176 |   |
| Purchase      of Federal Home Loan Bank stock                                              |   |                                 | (3,116   | ) |   |   | - |   |   |   | - |   |
| Net      cash flows from loan activities                                                   |   |                                 | (510,865 | ) |   |   | (517,267 | ) |   |   | (409,274 | ) |
| Purchases      of premises and equipment                                                   |   |                                 | (16,665  | ) |   |   | (3,927 | ) |   |   | (3,193 | ) |
| Proceeds      from the sale of premises and equipment                                      |   |                                 | 24       |   |   |   | 3,443 |   |   |   | 147 |   |
| Proceeds      from the sale of other real estate owned                                     |   |                                 | -        |   |   |   | - |   |   |   | 25 |   |
| Cash      acquired in merger                                                               |   |                                 | 1,234    |   |   |   | 7,121 |   |   |   | - |   |
| Other      investing activities                                                            |   |                                 | 2,615    |   |   |   | (3,069 | ) |   |   | (633 | ) |
| Net      cash used in investing activities                                                 |   |                                 | (523,544 | ) |   |   | (526,334 | ) |   |   | (373,316 | ) |
| CASH      FLOWS FROM FINANCING ACTIVITIES                                                  |   |                                 |     |   |   |   |   |   |   |   |   |   |
| Net      change in core deposit accounts                                                   |   |                                 | (35,344  | ) |   |   | 182,986 |   |   |   | (13,360 | ) |
| Net      change in certificates of deposit                                                 |   |                                 | 354,906  |   |   |   | 209,266 |   |   |   | 278,898 |   |
| Net      change in federal funds purchased and securities soldunder                        |   |                                 |     |   |   |   |   |   |   |   |   |   |
| agreements      to repurchase                                                              |   |                                 | 176,472  |   |   |   | 60,860 |   |   |   | 10,608 |   |
| Advances      from the Federal Home Loan Bank                                              |   |                                 | 324,052  |   |   |   | 111,756 |   |   |   | 110,000 |   |
| Repayments      to the Federal Home Loan Bank                                              |   |                                 | (321,023 | ) |   |   | (69,739 | ) |   |   | (45,088 | ) |
| Stock      options exercised                                                               |   |                                 | 1,861    |   |   |   | 4,218 |   |   |   | 2,549 |   |
| Excess      tax benefits associated with equity-based compensation                         |   |                                 | 237      |   |   |   | 1,205 |   |   |   | 205 |   |
| Purchase      of common stock                                                              |   |                                 | (44,384  | ) |   |   | - |   |   |   | - |   |
| Cash      dividends paid                                                                   |   |                                 | (29,045  | ) |   |   | (22,358 | ) |   |   | (17,021 | ) |
| Other      financing activities                                                            |   |                                 | 6,744    |   |   |   | (3,833 | ) |   |   | 3,802 |   |
| Net      cash provided by financing activities                                             |   |                                 | 434,476  |   |   |   | 474,361 |   |   |   | 330,593 |   |

----

|                                                                              |   | For      the Year Ended December 31, |    |
|-----------------------------------------------------------------------------------|--------|--------------------------------------|---------|
|                                                                              |   | 2007                                 |    |   | 2006 |   |   | 2005 |   |
| INCREASE      (DECREASE) IN CASH AND DUE FROM BANKS                               |   |                                 | (5,120  | ) |   |   | 18,591 |   |   |   | 14,780 |   |
|                                                                              |   |                                 |    |   |   |   |   |   |   |   |   |   |
| CASH      AND DUE FROM BANKS AT BEGINNING OF YEAR                                 |   |                                 | 104,222 |   |   |   | 85,631 |   |   |   | 70,851 |   |
|                                                                              |   |                                 |    |   |   |   |   |   |   |   |   |   |
| CASH      AND DUE FROM BANKS AT END OF YEAR                                       |   | $                                    | 99,102  |   |   | $ | 104,222 |   |   | $ | 85,631 |   |
|                                                                              |   |                                 |    |   |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL      DISCLOSURE OF CASH FLOW INFORMATION                             |   |                                 |    |   |   |   |   |   |   |   |   |   |
| Cash      paid during the year for interest                                       |   | $                                    | 107,879 |   |   | $ | 82,157 |   |   | $ | 48,703 |   |
| Cash      paid during the year for income taxes                                   |   | $                                    | 40,000  |   |   | $ | 36,595 |   |   | $ | 26,000 |   |
|                                                                              |   |                                 |    |   |   |   |   |   |   |   |   |   |
|                                                                              |   |                                 |    |   |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL      INFORMATION ABOUT NONCASH INVESTING AND FINANCING    ACTIVITIES |   |                                 |    |   |   |
| Transfer      of loans to other real estate owned                                 |   | $                                    | 367     |   |   | $ | - |   |   | $ | - |   |
| Purchase      of investment through issuance of common shares                     |   | $                                    | -       |   |   | $ | - |   |   | $ | 3,928 |   |
| Acquisitions:                                                                     |   |                                 |    |   |   |   |   |   |   |   |   |   |
| Assets      aquired                                                               |   | $                                    | 247,078 |   |   | $ | 209,600 |   |   | $ | - |   |
| Liabilities      assumed                                                          |   | $                                    | 185,270 |   |   | $ | 162,687 |   |   | $ | - |   |
| Net                                                                               |   | $                                    | 61,808  |   |   | $ | 46,913 |   |   | $ | - |   |

----

----

| Net      deferred fees and costs are generally amortized into interest income over      the life of the loan as an adjustment to the loan yield using the interest      method. Expenses deferred (principally personnel expense) and recognized      in the yield adjustment result in a reduction in noninterest      expense. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| The      allowance for loan losses is established as losses are estimated to have      occurred through a provision for loan losses charged to      earnings.  Loan losses are charged against the allowance when      management believes the uncollectibility of a loan balance is      confirmed.  Subsequent recoveries, if any, are credited to the      allowance. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| The      allowance for loan losses is evaluated on a regular basis by management      and is based upon management’s periodic review of the collectibility of      loans in light of historical experience, the nature and volume of the loan      portfolio, adverse situations that may affect the borrower’s ability to      repay, estimated value of any underlying collateral and prevailing      economic conditions.  This evaluation is inherently subjective      as it requires estimates that are susceptible to significant revision as      more information becomes available. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                   | 2007   |   | 2006   |
|----------------------------------------|--------|--------|--------|
| Beginning      balance                 | $      | 40,288 |   | $ | 6,476 |
| Goodwill      acquired during the year |   | 36,785 |   |   | 33,812 |
| Impairment      losses                 |   | -      |   |   | - |
| Ending      balance                    | $      | 77,073 |   | $ | 40,288 |

| 2007                                   |                       |   |   |                          |   |   |                     |
|----------------------------------------|----------------------------|--------|--------|-------------------------------|--------|--------|--------------------------|
|                                   | Gross      Carrying Amount |   |   | Accumulated      Amortization |   |   | Net      Carrying Amount |
| Core      deposit intangible           | $                          | 1,054  |   |                          | $      | (256   | )                        |   | $ | 798 |
| Other                                  |                       | 489    |   |                          |   | (210   | )                        |   |   | 279 |
| Total      amortized intangible assets | $                          | 1,543  |   |                          | $      | (466   | )                        |   | $ | 1,077 |

| 2006                                   |                       |   |   |                          |   |   |                     |   |   |   |
|----------------------------------------|----------------------------|--------|--------|-------------------------------|--------|--------|--------------------------|--------|--------|--------|
|                                   | Gross      Carrying Amount |   |   | Accumulated      Amortization |   |   | Net      Carrying Amount |
| Core      deposit intangible           | $                          | 680    |   |                          | $      | (126   | )                        |   | $      | 554    |
| Other                                  |                       | 489    |   |                          |   | (105   | )                        |   |   | 384    |
| Total      amortized intangible assets | $                          | 1,169  |   |                          | $      | (231   | )                        |   | $      | 938    |

----

----

|                                                                          | December      31, |   |
|-------------------------------------------------------------------------------|-------------------|--------|
|                                                                          | 2005              |   |
|  Net      Income, as reported                                            | $                 | 51,584 |   |
|  Add:  Stock-based      employee compensation expense included |              |   |   |
|   in      reported net income, net of related tax effects           |              | -      |   |
|                                                                          |              |   |   |
|  Deduct:  Total      stock-based employee compensation expense |              |   |   |
|  determined      under fair value based method for all                   |              |   |   |
|  awards,      net of related tax effects                                 |              | (1,098 | ) |
|  Pro      Forma Net Income                                               | $                 | 50,486 |   |
|  Earnings      per share                                                 |              |   |   |
|  Basic      - as reported                                                | $                 | 1.21   |   |
|  Basic      - pro forma                                                  | $                 | 1.18   |   |
|                                                                          |              |   |   |
|  Diluted      - as reported                                              | $                 | 1.21   |   |
|  Diluted      - pro forma                                                | $                 | 1.18   |   |

----

|                                                                                           | December      31, |   |
|------------------------------------------------------------------------------------------------|-------------------|--------|
|                                                                                           | 2007              |   |   | 2006 |   |
| Unrealized      gains (losses) arising during the period on securities available for      sale | $                 | (2,944 | ) |   | $ | 2,668 |   |
| Reclassification      adjustment for (gains) losses realized in net income, net of      tax    |              |   |   |   |   |   |   |
| (tax      benefit of $328 and $9, respectively)                                                |              | 609    |   |   |   | 16 |   |
| Tax      effect                                                                                |              | 1,027  |   |   |   | (933 | ) |
| Net      unrealized gains (losses) on securities available for sale                            | $                 | (1,308 | ) |   | $ | 1,751 |   |

|                                                           |   | Years      Ended December 31, |   |
|----------------------------------------------------------------|--------|-------------------------------|--------|
|                                                           |   | 2007                          |   | 2006 |   | 2005 |   |
| Unrealized      holding gains on available for sale securities |   | $                             | 7,493  |   | $ | 9,500 |   | $ | 6,807 |   |
| Tax      effect                                                |   |                          | (2,626 | ) |   | (3,325 | ) |   | (2,383 | ) |
| Accumulated      other comprehensive income, net of tax        |   | $                             | 4,867  |   | $ | 6,175 |   | $ | 4,424 |   |

----

| Total      value of common stock exchanged                                             | $      | 61,613 |   |
|----------------------------------------------------------------------------------------|--------|--------|--------|
| Direct      merger related expenses                                                    |   | 195    |   |
| Total      purchase price                                                              |   | 61,808 |   |
|                                                                                   |   |   |   |
| Allocation      of purchase price:                                                     |   |   |   |
| Bank      of Salem shareowners' equity                                                 |   | 26,981 |   |
| Adjustments      to reflect assets acquired and liabilities assumed at fair      value |   |   |   |
| Loans                                                                                  |   | (4,162 | )      |
| Buildings      and land                                                                |   | 1,347  |   |
| Certificates      of deposit                                                           |   | (570   | )      |
| Core      deposit intangible asset                                                     |   | 373    |   |
| Deferred      tax asset                                                                |   | 1,054  |   |
| Fair      value of net assets acquired                                                 |   | 25,023 |   |
| Goodwill                                                                               | $      | 36,785 |   |

----

|                                                 | November      30, 2007 |
|------------------------------------------------------|------------------------|
| Cash      and due from banks                         | $                      | 1,234 |
| Securities      available for sale                   |                   | 8,581 |
| Loans,      net of allowance for loan loss of $2,983 |                   | 192,671 |
| Premises      and equipment, net                     |                   | 3,341 |
| Goodwill                                             |                   | 36,785 |
| Other      assets                                    |                   | 4,466 |
| Total      assets                                    |                   | 247,078 |
|                                                 |                   |   |
| Deposits                                             |                   | 170,042 |
| FHLB      advances                                   |                   | 13,590 |
| Other      liabilities                               |                   | 1,638 |
| Total      liabilities                               |                   | 185,270 |
| Net      assets acquired                             | $                      | 61,808 |

|                                                               | Years      Ended December 31, |
|--------------------------------------------------------------------|-------------------------------|
|                                                               | 2007                          |   | 2006 |
| Net      interest income                                           | $                             | 196,022 |   | $ | 173,665 |
| Provision      for loan losses                                     |                          | 12,662 |   |   | 8,152 |
| Noninterest      income                                            |                          | 13,659 |   |   | 15,988 |
| Noninterest      expense                                           |                          | 83,616 |   |   | 70,896 |
| Income      before income tax                                      |                          | 113,403 |   |   | 110,605 |
| Net      income                                                    | $                             | 74,846 |   | $ | 72,783 |
|                                                               |                          |   |   |   |   |
| Basic      earnings per share                                      | $                             | 1.65 |   | $ | 1.51 |
| Diluted      earnings per share                                    | $                             | 1.64 |   | $ | 1.49 |
|                                                               |                          |   |   |   |   |
| Weighted      average common shares issued and outstanding         |                          | 45,265,723 |   |   | 48,240,321 |
| Weighted      average diluted common shares issued and outstanding |                          | 45,601,066 |   |   | 48,715,692 |

----

| 2007                      |   |                |    |                        |   |                                               |   |                                             |   |                      |
|---------------------------|--------|---------------------|---------|-----------------------------|--------|----------------------------------------------------|--------|--------------------------------------------------|--------|---------------------------|
|                      |   | Amortized      Cost |    | Gross      Unrealized Gains |   | Gross      Unrealized Losses (less than 12 months) |   | Gross      Unrealized Losses (12 months or more) |   | Aggregate      Fair Value |
| AFS      Securities       |   |                |    |                        |   |                                               |   |                                             |   |                      |
| Equities                  |   | $                   | 27,606  |                        | $      | 9,255                                              |   | $                                                | (922   |  )                   | $ | (1,364 |  ) | $ | 34,575 |
| U.S.      Treasuries      |   |                | 6,223   |                        |   | 88                                                 |   |                                             | -      |                      |   | - |   |   | 6,311 |
| U.S.      Agencies        |   |                | 71,385  |                        |   | 782                                                |   |                                             | -      |                      |   | - |   |   | 72,167 |
| Corporate      securities |   |                | 15,537  |                        |   | 87                                                 |   |                                             | (320   |  )                   |   | (124 |  ) |   | 15,180 |
| Municipal      securities |   |                | 3,134   |                        |   | 14                                                 |   |                                             | -      |                      |   | (3 |  ) |   | 3,145 |
|                      |   |                | 123,885 |                        |   | 10,226                                             |   |                                             | (1,242 |  )                   |   | (1,491 |  ) |   | 131,378 |
|                      |   |                |    |                        |   |                                               |   |                                             |   |                      |   |   |   |   |   |
| HTM      Securities       |   |                |    |                        |   |                                               |   |                                             |   |                      |   |   |   |   |   |
| Corporate      securities |   |                | 1,525   |                        |   | -                                                  |   |                                             | (1     |  )                   |   | - |   |   | 1,524 |
| Municipal      securities |   |                | 2,218   |                        |   | 27                                                 |   |                                             | (3     |  )                   |   | - |   |   | 2,242 |
|                      |   |                | 3,743   |                        |   | 27                                                 |   |                                             | (4     |  )                   |   | - |   |   | 3,766 |
| Total                     |   | $                   | 127,628 |                        | $      | 10,253                                             |   | $                                                | (1,246 |                      | $ | (1,491 |  ) | $ | 135,144 |

| 2006                      |                |    |                        |   |                                               |   |                                             |   |                      |
|---------------------------|---------------------|---------|-----------------------------|--------|----------------------------------------------------|--------|--------------------------------------------------|--------|---------------------------|
|                      | Amortized      Cost |    | Gross      Unrealized Gains |   | Gross      Unrealized Losses (less than 12 months) |   | Gross      Unrealized Losses (12 months or more) |   | Aggregate      Fair Value |
| AFS      Securities       |                |    |                        |   |                                               |   |                                             |   |                      |
| Equities                  | $                   | 29,052  |                        | $      | 10,804                                             |   | $                                                | (91    |  )                   | $ | (258 |  ) | $ | 39,507 |
| U.S.      Treasuries      |                | 4,204   |                        |   | 48                                                 |   |                                             | (4     |  )                   |   | - |   |   | 4,248 |
| U.S.      Agencies        |                | 50,004  |                        |   | 76                                                 |   |                                             | (23    |  )                   |   | (850 |  ) |   | 49,207 |
| Corporate      securities |                | 16,672  |                        |   | 54                                                 |   |                                             | (7     |  )                   |   | (232 |  ) |   | 16,487 |
| Municipal      securities |                | 1,680   |                        |   | -                                                  |   |                                             | (16    |  )                   |   | (1 |  ) |   | 1,663 |
|                      |                | 101,612 |                        |   | 10,982                                             |   |                                             | (141   |  )                   |   | (1,341 |  ) |   | 111,112 |
|                      |                |    |                        |   |                                               |   |                                             |   |                      |   |   |   |   |   |
| HTM      Securities       |                |    |                        |   |                                               |   |                                             |   |                      |   |   |   |   |   |
| Corporate      securities |                | 1,526   |                        |   | -                                                  |   |                                             | (11    |  )                   |   | - |   |   | 1,515 |
| Municipal      securities |                | 2,073   |                        |   | 35                                                 |   |                                             | -      |                      |   | - |   |   | 2,108 |
|                      |                | 3,599   |                        |   | 35                                                 |   |                                             | (11    |  )                   |   | - |   |   | 3,623 |
| Total                     | $                   | 105,211 |                        | $      | 11,017                                             |   | $                                                | (152   |  )                   | $ | (1,341 |  ) | $ | 114,735 |

----

| 2007                      |   | Less      Than 12 Months     |   |   | 12      Months or More |   |   | Total                        |
|---------------------------|--------|------------------------------|--------|--------|------------------------|--------|--------|------------------------------|
|                      |   | Gross      Unrealized Losses |   |   | Fair      Value        |   |   | Gross      Unrealized Losses |   |   | Fair      Value |   |   | Gross      Unrealized Losses |   |   | Fair      Value |
| AFS      Securities       |   |                         |   |   |                   |   |   |                         |   |   |   |   |   |   |   |   |   |
| Equities                  |   | $                            | (922   | )      |                   | $      | 7,190  |                         |   | $ | (1,364 | ) |   | $ | 3,561 |   |   | $ | (2,286 | ) |   | $ | 10,751 |
| U.S.      Treasuries      |   |                         | -      |   |                   |   | -      |                         |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |
| U.S.      Agencies        |   |                         | -      |   |                   |   | -      |                         |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |
| Corporate      securities |   |                         | (320   | )      |                   |   | 5,722  |                         |   |   | (124 | ) |   |   | 5,867 |   |   |   | (444 | ) |   |   | 11,589 |
| Municipal      securities |   |                         | -      |   |                   |   | -      |                         |   |   | (3 | ) |   |   | 22 |   |   |   | (3 | ) |   |   | 22 |
|                      |   |                         | (1,242 | )      |                   |   | 12,912 |                         |   |   | (1,491 | ) |   |   | 9,450 |   |   |   | (2,733 | ) |   |   | 22,362 |
| HTM      Securities       |   |                         |   |   |                   |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate      securities |   |                         | (1     | )      |                   |   | 1,524  |                         |   |   | - |   |   |   | - |   |   |   | (1 | ) |   |   | 1,524 |
| Municipal      securities |   |                         | (3     | )      |                   |   | 1,016  |                         |   |   | - |   |   |   | - |   |   |   | (3 | ) |   |   | 1,016 |
|                      |   |                         | (4     | )      |                   |   | 2,540  |                         |   |   | - |   |   |   | - |   |   |   | (4 | ) |   |   | 2,540 |
| Total                     |   | $                            | (1,246 | )      |                   | $      | 15,452 |                         |   | $ | (1,491 | ) |   | $ | 9,450 |   |   | $ | (2,737 | ) |   | $ | 24,902 |

| 2006                      |   | Less      Than 12 Months     |   |   | 12      Months or More |   |   | Total                        |
|---------------------------|--------|------------------------------|--------|--------|------------------------|--------|--------|------------------------------|
|                      |   | Gross      Unrealized Losses |   |   | Fair      Value        |   |   | Gross      Unrealized Losses |   |   | Fair      Value |   |   | Gross      Unrealized Losses |   |   | Fair      Value |
| AFS      Securities       |   |                         |   |   |                   |   |   |                         |   |   |   |   |   |   |   |   |   |
| Equities                  |   | $                            | (91    | )      |                   | $      | 427    |                         |   | $ | (258 | ) |   | $ | 4,414 |   |   | $ | (349 | ) |   | $ | 4,841 |
| U.S.      Treasuries      |   |                         | (4     | )      |                   |   | 3,950  |                         |   |   | - |   |   |   | - |   |   |   | (4 | ) |   |   | 3,950 |
| U.S.      Agencies        |   |                         | (23    | )      |                   |   | 2,976  |                         |   |   | (850 | ) |   |   | 44,155 |   |   |   | (873 | ) |   |   | 47,131 |
| Corporate      securities |   |                         | (7     | )      |                   |   | 1,010  |                         |   |   | (232 | ) |   |   | 13,923 |   |   |   | (239 | ) |   |   | 14,933 |
| Municipal      securities |   |                         | (16    | )      |                   |   | 1,299  |                         |   |   | (1 | ) |   |   | 29 |   |   |   | (17 | ) |   |   | 1,328 |
|                      |   |                         | (141   | )      |                   |   | 9,662  |                         |   |   | (1,341 | ) |   |   | 62,521 |   |   |   | (1,482 | ) |   |   | 72,183 |
| HTM      Securities       |   |                         |   |   |                   |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate      securities |   |                         | (11    | )      |                   |   | 1,515  |                         |   |   | - |   |   |   | - |   |   |   | (11 | ) |   |   | 1,515 |
| Municipal      securities |   |                         | -      |   |                   |   | -      |                         |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |
|                      |   |                         | (11    | )      |                   |   | 1,515  |                         |   |   | - |   |   |   | - |   |   |   | (11 | ) |   |   | 1,515 |
| Total                     |   | $                            | (152   | )      |                   | $      | 11,177 |                         |   | $ | (1,341 | ) |   | $ | 62,521 |   |   | $ | (1,493 | ) |   | $ | 73,698 |

----

|               |   | Available      for Sale |    | Held      to Maturity |
|--------------------|--------|-------------------------|---------|-----------------------|
| Maturity           |   | Amortized      Cost     |    | Fair      Value       |   | Amortized      Cost |   | Fair      Value |
| 0 -      1 years   |   | $                       | 42,790  |                  | $ | 51,286 |   | $ | 650 |   | $ | 655 |
| 1 -      5 years   |   |                    | 41,388  |                  |   | 41,252 |   |   | 1,568 |   |   | 1,587 |
| 5 -      10 years  |   |                    | 31,239  |                  |   | 31,907 |   |   | - |   |   | - |
| Over      10 years |   |                    | 8,468   |                  |   | 6,933 |   |   | 1,525 |   |   | 1,524 |
|               |   | $                       | 123,885 |                  | $ | 131,378 |   | $ | 3,743 |   | $ | 3,766 |

|                                                    |   | Amortized      Cost |   | Fair      Value |
|---------------------------------------------------------|--------|---------------------|--------|-----------------|
| To      the Federal Home Loan Bank to secure borrowings |   | $                   | 3,505  |            | $ | 3,508 |
| To      state government to secure public deposits      |   |                | 21,701 |            |   | 22,089 |
| To      Federal Reserve to secure repurchase agreements |   |                | 42,853 |            |   | 43,140 |
| To      Federal Reserve to secure customer tax payments |   |                | 3,001  |            |   | 3,002 |
| Other      securities pledged                           |   |                | 10,673 |            |   | 10,890 |
| Total      pledged securities                           |   | $                   | 81,733 |            | $ | 82,629 |

----

|                             | 2007   |      |   | 2006   |   |
|----------------------------------|--------|-----------|--------|--------|--------|
| Commercial      and industrial   | $      | 403,511   |   |   | $      | 381,800 |   |
| Real      Estate:                |   |      |   |   |   |   |   |
| Commercial                       |   | 1,007,152 |   |   |   | 901,098 |   |
| Construction                     |   | 1,068,196 |   |   |   | 741,707 |   |
| Land      development            |   | 540,419   |   |   |   | 403,095 |   |
| Completed      lots              |   | 250,738   |   |   |   | 189,249 |   |
| Residential      1-4 family      |   | 283,470   |   |   |   | 236,344 |   |
| Installment      and other loans |   | 67,460    |   |   |   | 63,116 |   |
|                             |   | 3,620,946 |   |   |   | 2,916,409 |   |
| Unearned      fee income         |   | (15,051   | )      |   |   | (15,629 | ) |
| Total      loans                 | $      | 3,605,895 |   |   | $      | 2,900,780 |   |

|                             |   | Within      1 Year |      |   | 1      -5 Years |   |    | After      5 Years |   |   | Total   |   |
|----------------------------------|--------|--------------------|-----------|--------|-----------------|--------|---------|--------------------|--------|--------|---------|--------|
| Commercial      and industrial   |   | $                  | 247,355   |   |            | $      | 125,725 |               |   | $      | 29,489  |   |   | $ | 402,569 |   |
| Real      Estate:                |   |               |      |   |            |   |    |               |   |   |    |   |   |   |   |   |
| Commercial                       |   |               | 208,168   |   |            |   | 418,368 |               |   |   | 377,380 |   |   |   | 1,003,916 |   |
| Construction                     |   |               | 1,007,781 |   |            |   | 48,174  |               |   |   | 6,707   |   |   |   | 1,062,662 |   |
| Land      development            |   |               | 486,633   |   |            |   | 50,777  |               |   |   | -       |   |   |   | 537,410 |   |
| Completed      lots              |   |               | 198,682   |   |            |   | 45,841  |               |   |   | 5,050   |   |   |   | 249,573 |   |
| Residential      1-4 family      |   |               | 109,719   |   |            |   | 111,784 |               |   |   | 60,841  |   |   |   | 282,344 |   |
| Installment      and other loans |   |               | 15,085    |   |            |   | 15,118  |               |   |   | 37,218  |   |   |   | 67,421 |   |
| Total      loans                 |   | $                  | 2,273,423 |   |            | $      | 815,787 |               |   | $      | 516,685 |   |   | $ | 3,605,895 |   |

|                |   |   |   |   |   | 1      -5 Years |    |   | After      5 Years |   |    |   |   |   |
|---------------------|--------|--------|--------|--------|--------|-----------------|---------|--------|--------------------|--------|---------|--------|--------|--------|
| Fixed      rates    |   |   |   |   |   | $               | 617,733 |   |               | $      | 80,798  |   |   |   |   |   |
| Variable      rates |   |   |   |   |   |            | 198,054 |   |               |   | 435,887 |   |   |   |   |   |
|                |   |   |   |   |   | $               | 815,787 |   |               | $      | 516,685 |   |   |   |   |   |

----

|                                                         |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|--------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Beginning      balance                                       |   | $      | 44,195 |   |   | $      | 37,075 |   |   | $ | 32,728 |   |
| Provision      for loan losses                               |   |   | 11,400 |   |   |   | 7,500  |   |   |   | 4,200 |   |
| Charge-offs                                                  |   |   | (1,906 | )      |   |   | (3,294 | )      |   |   | (706 | ) |
| Recoveries                                                   |   |   | 986    |   |   |   | 413    |   |   |   | 853 |   |
| Merger                                                       |   |   | 2,983  |   |   |   | 2,501  |   |   |   | - |   |
| Balance      before portion identified for undisbursed loans |   |   | 57,658 |   |   |   | 44,195 |   |   |   | 37,075 |   |
| Portion      of reserve identified for undisbursed           |   |   |   |   |   |   |   |   |   |   |   |   |
| loans      and reclassified as a liability                   |   |   | (3,663 | )      |   |   | (3,546 | )      |   |   | (3,270 | ) |
| Balance      at end of period                                |   | $      | 53,995 |   |   | $      | 40,649 |   |   | $ | 33,805 |   |

|                                     |   | 2007   |   |   | 2006   |   |   | 2005   |
|------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| Additional      interest income which    |   |   |   |   |   |   |   |   |
| would      have been recorded during the |   |   |   |   |   |   |   |   |
| period      under original loan terms    |   | $      | 757    |   |   | $      | 761    |   |   | $ | 67 |
|                                     |   |   |   |   |   |   |   |   |   |   |   |
| Interest      collected and included in  |   |   |   |   |   |   |   |   |   |   |   |
| net      income for the period           |   | $      | 1,131  |   |   | $      | 344    |   |   | $ | 327 |
|                                     |   |   |   |   |   |   |   |   |   |   |   |
| Commitments      for additional funds    |   |   |   |   |   |   |   |   |   |   |   |
| related      to loans above              |   | $      | -      |   |   | $      | -      |   |   | $ | - |

----

|                                   |   | 2007   |    |   | 2006   |   |
|----------------------------------------|--------|--------|---------|--------|--------|--------|
| Premises                               |   | $      | 31,032  |   |   | $      | 28,153 |   |
| Furniture,      fixtures and equipment |   |   | 21,180  |   |   |   | 19,896 |   |
| Land                                   |   |   | 15,597  |   |   |   | 9,830 |   |
| Construction      in process           |   |   | 11,403  |   |   |   | 1,702 |   |
|                                   |   |   | 79,212  |   |   |   | 59,581 |   |
| Accumulated      depreciation          |   |   | (31,919 | )      |   |   | (29,555 | ) |
| Premises      and equipment, net       |   | $      | 47,293  |   |   | $      | 30,026 |   |

|                                      |   | 2007   |      |   | 2006   |   |
|-------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Money      market, sweep and NOW accounts |   | $      | 745,780   |   |   | $      | 683,948 |   |
| Savings                                   |   |   | 254,722   |   |   |   | 305,669 |   |
| Time      deposits, $100,000 and over     |   |   | 832,373   |   |   |   | 545,173 |   |
| Other      time deposits                  |   |   | 719,835   |   |   |   | 512,221 |   |
| Total      interest bearing deposits      |   | $      | 2,552,710 |   |   | $      | 2,047,011 |   |

| For      the Year Ended December 31, | 2008       |   | $      | 1,340,726 |
|--------------------------------------|------------|--------|--------|-----------|
|                                 | 2009       |   |   | 110,045   |
|                                 | 2010       |   |   | 40,373    |
|                                 | 2011       |   |   | 20,921    |
|                                 | 2012       |   |   | 36,876    |
|                                 | Thereafter |   |   | 3,267     |
|                                 |       |   | $      | 1,552,208 |

----

|                |   | 2007   |    |                | 2006   |              |
|---------------------|--------|--------|---------|---------------------|--------|-------------------|
|                |   | Amount |    | Interest      Rates |   |              | Amount |   | Interest      Rates |   |
| Within      1 year  |   | $      | 32,556  |                |   | 2.51%      - 4.31 | % |   | $ | 41,368 |   |   | 2.76%      - 6.04 | % |
| 2      to 3 years   |   |   | 70,452  |                |   | 2.55%      - 4.85 | % |   |   | 82,791 |   |   | 3.46%      - 5.58 | % |
| 4      to 9 years   |   |   | 130,628 |                |   | 3.87%      - 4.91 | % |   |   | 97,858 |   |   | 3.53%      - 6.77 | % |
| 10      to 15 years |   |   | 65,000  |                |   | 3.71%      - 4.61 | % |   |   | 60,000 |   |   | 4.03%      - 4.66 | % |
|                |   | $      | 298,636 |                |   |              |   |   | $ | 282,017 |   |   |   |   |

|                                      | 2007   |    | 2006   |   |
|-------------------------------------------|--------|---------|--------|--------|
| Maximum      outstanding at any month end | $      | 341,704 |   | $      | 282,017 |   |
| Average      outstanding                  |   | 294,169 |   |   | 258,991 |   |
|                                      |   |    |   |   |   |   |
| Weighted      average interest rates      |   |    |   |   |   |   |
| Annual                                    |   | 4.15    | %      |   | 4.72 | % |
| End      of year                          |   | 4.43    | %      |   | 4.69 | % |

----

|                          | 2007   |   | 2006   |   | 2005   |   |
|-------------------------------|--------|--------|--------|--------|--------|--------|
| Current                       | $      | 43,066 |   | $      | 37,090 |   | $ | 27,962 |   |
| Deferred                      |   | (5,480 | )      |   | (1,721 | )      |   | (1,633 | ) |
| Provision      for income tax | $      | 37,586 |   | $      | 35,369 |   | $ | 26,329 |   |

|                                                               | 2007   |   | 2006   |   |
|--------------------------------------------------------------------|--------|--------|--------|--------|
| Deferred      tax assets                                           |   |   |   |   |
| Allowance      for possible loan losses, in excess of tax reserves | $      | 20,159 |   | $      | 15,341 |   |
| Intangible      assets                                             |   | 1,468  |   |   | - |   |
| Other      deferred tax assets                                     |   | 892    |   |   | 1,684 |   |
| Total      deferred tax assets                                     |   | 22,519 |   |   | 17,025 |   |
|                                                               |   |   |   |   |   |   |
| Deferred      tax liabilities                                      |   |   |   |   |   |   |
| FHLB      stock dividends                                          |   | (2,574 | )      |   | (2,522 | ) |
| Deferred      loan fees                                            |   | (1,964 | )      |   | (2,276 | ) |
| Unrealized      gain on available for sale securities              |   | (2,626 | )      |   | (3,325 | ) |
| Other      deferred tax liabilities                                |   | (1,875 | )      |   | (1,601 | ) |
| Total      deferred tax liabilities                                |   | (9,039 | )      |   | (9,724 | ) |
| Net      deferred tax assets                                       | $      | 13,480 |   | $      | 7,301 |   |

----

|                                        | 2007   |   |   | 2006   |   |   | 2005   |   |
|---------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                        | Amount |   | Rate   |   |   | Amount |   | Rate   |   |   | Amount |   | Rate |   |
| Income      tax provision at statutory rate | $      | 39,034 |   |   | 35     | %      |   | $      | 36,498 |   |   | 35 | % |   | $ | 27,270 |   |   | 35 | % |
| Effect      of nontaxable interest income   |   | (1,085 | )      |   | (1     | %)     |   |   | (1,129 | ) |   | (1 | %) |   |   | (740 | ) |   | (1 | %) |
| Other                                       |   | (363   | )      |   | -      |   |   |   | - |   |   | - |   |   |   | (201 | ) |   | - |   |
| Income      tax provision at effective rate | $      | 37,586 |   |   | 34     | %      |   | $      | 35,369 |   |   | 34 | % |   | $ | 26,329 |   |   | 34 | % |

----

| (In      thousands)          |   |   |    |   |                   |   |   | To      Be Well        |   |   |             |   |   |   |   |
|------------------------------|--------|--------|---------|--------|------------------------|--------|--------|------------------------|--------|--------|------------------|--------|--------|--------|--------|
|                         |   |   |    |   |                   |   |   | Capitalized      Under |   |   |             |   |   |   |   |
|                         |   |   |    |   |                   |   |   | Prompt      Corrective |   |   | For      Capital |   |
|                         |   | Actual |    |   | Action      Provisions |   |   | Adequacy      Purposes |   |
| 2007                         |   | Amount |    |   | Ratio                  |   |   | Amount                 |   |   | Ratio            |   |   | Amount |   |   | Ratio |   |
| Total      Capital (to risk  |   |   |    |   |                   |   |   |                   |   |   |             |   |   |   |   |   |   |   |
| weighted      assets)        |   |   |    |   |                   |   |   |                   |   |   |             |   |   |   |   |   |   |   |
| Consolidated                 |   | $      | 429,227 |   |                   |   | 11.38  | %                      |   |   | N/A              |   |   |   | N/A    |   |   | $ | 301,664 |   |   |   | 8.00 | % |
| Frontier      Bank           |   |   | 397,844 |   |                   |   | 10.62  | %                      |   |   | 374,529          |   |   |   | 10.00  | % |   |   | 299,623 |   |   |   | 8.00 | % |
|                         |   |   |    |   |                   |   |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier      I Capital (to risk |   |   |    |   |                   |   |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| weighted      assets)        |   |   |    |   |                   |   |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                 |   |   | 381,962 |   |                   |   | 10.13  | %                      |   |   | N/A              |   |   |   | N/A    |   |   |   | 150,833 |   |   |   | 4.00 | % |
| Frontier      Bank           |   |   | 350,935 |   |                   |   | 9.37   | %                      |   |   | 224,718          |   |   |   | 6.00   | % |   |   | 149,812 |   |   |   | 4.00 | % |
|                         |   |   |    |   |                   |   |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier      I Capital (to      |   |   |    |   |                   |   |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| average      assets)         |   |   |    |   |                   |   |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                 |   |   | 381,962 |   |                   |   | 10.55  | %                      |   |   | N/A              |   |   |   | N/A    |   |   |   | 144,841 |   |   |   | 4.00 | % |
| Frontier      Bank           |   |   | 350,935 |   |                   |   | 9.74   | %                      |   |   | 180,136          |   |   |   | 5.00   | % |   |   | 144,109 |   |   |   | 4.00 | % |

| 2006                         |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |
|------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|
| Total      Capital (to risk  |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |
| weighted      assets)        |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |
| Consolidated                 |   | $      | 390,752 |   |   |   | 12.85  | %      |   |   | N/A     |   |   |   | N/A    |   |   | $      | 243,324 |   |   |   | 8.00   | %      |
| Frontier      Bank           |   |   | 360,051 |   |   |   | 11.92  | %      |   |   | 302,158 |   |   |   | 10.00  | %      |   |   | 241,726 |   |   |   | 8.00   | %      |
|                         |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |
| Tier      I Capital (to risk |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |
| weighted      assets)        |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |
| Consolidated                 |   |   | 352,656 |   |   |   | 11.59  | %      |   |   | N/A     |   |   |   | N/A    |   |   |   | 121,662 |   |   |   | 4.00   | %      |
| Frontier      Bank           |   |   | 322,202 |   |   |   | 10.66  | %      |   |   | 181,295 |   |   |   | 6.00   | %      |   |   | 120,863 |   |   |   | 4.00   | %      |
|                         |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |
| Tier      I Capital (to      |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |
| average      assets)         |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |
| Consolidated                 |   |   | 352,656 |   |   |   | 11.32  | %      |   |   | N/A     |   |   |   | N/A    |   |   |   | 124,638 |   |   |   | 4.00   | %      |
| Frontier      Bank           |   |   | 322,202 |   |   |   | 10.47  | %      |   |   | 153,894 |   |   |   | 5.00   | %      |   |   | 123,115 |   |   |   | 4.00   | %      |

----

|                                |   | Years      Ended December 31, |   |
|-------------------------------------|--------|-------------------------------|--------|
|                                |   | 2007                          |   |   | 2006 |   |   | 2005 |   |
|  Risk-free      interest rate  |   |                          | 3.41   | % |   |   | 4.60 | % |   |   | 5.25 | % |
|  Expected      dividends       |   |                          | 2.45   | % |   |   | 1.68 | % |   |   | 2.20 | % |
|  Expected      volatility      |   |                          | 36.50  | % |   |   | 35.61 | % |   |   | 23.34 | % |
|  Expected      term (in years) |   |                          | 5.7    |   |   |   | 3.2 |   |   |   | 3.4 |   |

|                                  |        |      |                  |   | Weighted    |   | Aggregate   |
|---------------------------------------|-------------|-----------|-----------------------|--------|-------------|--------|-------------|
|                                  |        |      |                  |   | Average     |   | Intrinsic   |
|                                  | Options     |      | Weighted      Average |   | Contractual |   | Value       |
|                                  | Outstanding |      | Exercise      Price   |   | Term        |   | (Thousands) |
| Outstanding,      December 31, 2006   |        | 1,349,128 |                  | $      | 17.78       |   |        |   |   |
| Granted                               |        | 137,241   |                  |   | 18.76       |   |        |   |   |
| Exercised                             |        | (139,105  | )                     |   | 13.72       |   |        |   |   |
| Forfeited/Expired                     |        | (15,774   | )                     |   | 21.22       |   |        |   |   |
| Outstanding,      December 31, 2007   |        | 1,331,490 |                  | $      | 18.24       |   |        | 7.0 |   | $ | 2,922 |
|                                  |        |      |                  |   |        |   |        |   |   |   |   |
| Exercisable      at December 31, 2007 |        | 1,077,036 |                  | $      | 16.91       |   |        | 6.4 |   | $ | 2,922 |

----

|                                |   |   |    |   | Weighted        |   |
|-------------------------------------|--------|--------|---------|--------|-----------------|--------|
|                                |   |   |    |   | Average         |   |
|                                |   |   |    |   | Grant-Date      |   |
|                                |   | Shares |    |   | Fair      Value |   |
| Nonvested      at January 1, 2007   |   |   | 130,126 |   |            | $      | 29.83 |   |
| Awarded                             |   |   | 179,403 |   |            |   | 15.69 |   |
| Vested                              |   |   | (71,430 | )      |            |   | 17.72 |   |
| Forfeited                           |   |   | (6,300  | )      |            |   | 29.83 |   |
| Nonvested      at December 31, 2007 |   |   | 231,799 |   |            | $      | 22.64 |   |

----

|                                     |   | 2007   |       |   | 2006   |   |       | 2005   |   |
|------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Net      income (numerator)              |   | $      | 73,938     |   |   | $      | 68,910     |   |   | $ | 51,584 |   |
|                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Shares      used in the calculation      |   |   |       |   |   |   |       |   |   |   |   |   |
| (denominator)                            |   |   |       |   |   |   |       |   |   |   |   |   |
| Weighted      average shares outstanding |   |   | 45,265,723 |   |   |   | 45,009,526 |   |   |   | 42,481,644 |   |
| Effect      of dilutive stock options    |   |   | 335,343    |   |   |   | 475,461    |   |   |   | 260,907 |   |
| Diluted      shares                      |   |   | 45,601,066 |   |   |   | 45,484,987 |   |   |   | 42,742,551 |   |
|                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Basic      Earnings per share            |   | $      | 1.63       |   |   | $      | 1.53       |   |   | $ | 1.21 |   |
| Diluted      Earnings per share          |   | $      | 1.62       |   |   | $      | 1.52       |   |   | $ | 1.21 |   |

|                              |   | 2007   |    |   | 2006   |   |    | 2005   |   |
|-----------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Balance      at beginning of year |   | $      | 85,277  |   |   | $      | 72,700  |   |   | $ | 55,762 |   |
| New      loans or advances        |   |   | 10,089  |   |   |   | 23,342  |   |   |   | 35,322 |   |
| Repayments                        |   |   | (42,717 | )      |   |   | (10,765 | )      |   |   | (18,384 | ) |
| Balance      at end of year       |   | $      | 52,649  |   |   | $      | 85,277  |   |   | $ | 72,700 |   |

----

| Year      ending December 31, | 2008       |   | $      | 2,044 |
|-------------------------------|------------|--------|--------|-------|
|                          | 2009       |   |   | 1,859 |
|                          | 2010       |   |   | 1,174 |
|                          | 2011       |   |   | 890   |
|                          | 2012       |   |   | 459   |
|                          | Thereafter |   |   | 1,399 |
|                          |       |   | $      | 7,825 |

|                                          |   | Amount |
|-----------------------------------------------|--------|--------|
| Commitments      to extend credit             |   | $      | 956,753 |
| Credit      card arrangements                 |   |   | 41,771 |
| Standby      and commercial letters of credit |   |   | 21,225 |
|                                          |   | $      | 1,019,749 |

----

|                                        | 2007        |      | 2006        |
|---------------------------------------------|-------------|-----------|-------------|
|                                        | Carrying    |      | Fair        |   | Carrying |   | Fair |
| Assets                                      |  Value |      |  Value |   |  Value |   |  Value |
| Cash      and due from banks                | $           | 99,102    |        | $ | 99,102 |   | $ | 104,222 |   | $ | 104,222 |
| Federal      funds sold                     |        | 5         |        |   | 5 |   |   | 18,673 |   |   | 18,673 |
| Investments                                 |        |      |        |   |   |   |   |   |   |   |   |
| Available      for sale                     |        | 131,378   |        |   | 131,378 |   |   | 111,112 |   |   | 111,112 |
| Held      to maturity                       |        | 3,743     |        |   | 3,766 |   |   | 3,599 |   |   | 3,623 |
| Net      loans                              |        | 3,558,127 |        |   | 3,639,120 |   |   | 2,867,351 |   |   | 2,883,518 |
|                                        |        |      |        |   |   |   |   |   |   |   |   |
| Liabilities                                 |        |      |        |   |   |   |   |   |   |   |   |
| Noninterest      bearing deposits           |        | 390,526   |        |   | 390,526 |   |   | 406,621 |   |   | 406,621 |
| Interest      bearing deposits              |        | 2,552,710 |        |   | 2,574,268 |   |   | 2,047,011 |   |   | 2,047,748 |
| Federal      funds purchased and securities |        |      |        |   |   |   |   |   |   |   |   |
| sold      under agreements to repurchase    |        | 258,145   |        |   | 258,145 |   |   | 81,673 |   |   | 81,673 |
| FHLB      Advances                          |        | 298,636   |        |   | 298,105 |   |   | 282,017 |   |   | 277,450 |
| Subordinated      debt                      |        | 5,156     |        |   | 4,976 |   |   | 5,156 |   |   | 5,123 |

----

|                                                    |   | 2007   |    | 2006   |
|---------------------------------------------------------|--------|--------|---------|--------|
| ASSETS                                                  |   |   |    |   |
| Cash                                                    |   | $      | -       |   | $ | 1,357 |
| Investment      in subsidiaries                         |   |   |    |   |   |   |
| Bank                                                    |   |   | 350,717 |   |   | 321,626 |
| Nonbank                                                 |   |   | 16,539  |   |   | 9,314 |
| Available      for sale securities, at fair value       |   |   | 32,315  |   |   | 35,213 |
| Other      assets                                       |   |   | 73,754  |   |   | 40,247 |
| Total      assets                                       |   | $      | 473,325 |   | $ | 407,757 |
|                                                    |   |   |    |   |   |   |
| LIABILITIES                                             |   |   |    |   |   |   |
| Other      liabilities                                  |   | $      | 13,713  |   | $ | 12,474 |
|                                                    |   |   |    |   |   |   |
| SHAREOWNERS'      EQUITY                                |   |   |    |   |   |   |
| Common      stock                                       |   |   | 252,292 |   |   | 186,163 |
| Retained      earnings                                  |   |   | 202,453 |   |   | 202,945 |
| Accumulated      other comprehensive income, net of tax |   |   | 4,867   |   |   | 6,175 |
| Total      shareowners' equity                          |   |   | 459,612 |   |   | 395,283 |
| Total      liabilities and shareowners' equity          |   | $      | 473,325 |   | $ | 407,757 |

|                                                      | 2007   |   | 2006   |   | 2005   |
|-----------------------------------------------------------|--------|--------|--------|--------|--------|
| Income                                                    |   |   |   |   |   |
| Dividends      from Bank                                  | $      | 70,769 |   | $      | 23,846 |   | $ | 16,416 |
| Dividend      from FFP                                    |   | 800    |   |   | 1,100  |   |   | 900 |
| Other      dividends                                      |   | 819    |   |   | 526    |   |   | 367 |
| Interest                                                  |   | 177    |   |   | 186    |   |   | 167 |
| Other      income                                         |   | 21     |   |   | 32     |   |   | 95 |
| Total      income                                         |   | 72,586 |   |   | 25,690 |   |   | 17,945 |
| Expenses                                                  |   |   |   |   |   |   |   |   |
| Personnel                                                 |   | 2,523  |   |   | 677    |   |   | 910 |
| Depreciation      and amortization                        |   | 260    |   |   | 267    |   |   | 35 |
| Other                                                     |   | 2,457  |   |   | 1,934  |   |   | 1,362 |
| Total      expenses                                       |   | 5,240  |   |   | 2,878  |   |   | 2,307 |
| Income      before equity in undistributed income         |   |   |   |   |   |   |   |   |
| of      subsidiaries and benefit equivalent to income tax |   | 67,346 |   |   | 22,812 |   |   | 15,638 |
| Income      tax benefit                                   |   | 1,566  |   |   | 800    |   |   | 622 |
| Income      before equity in undistributed income         |   |   |   |   |   |   |   |   |
| of      subsidiaries                                      |   | 68,912 |   |   | 23,612 |   |   | 16,260 |
| Equity      in undistributed income of subsidiaries       |   | 5,026  |   |   | 45,298 |   |   | 35,324 |
| Net      income                                           | $      | 73,938 |   | $      | 68,910 |   | $ | 51,584 |

----

|                                                         |   | 2007   |    |   | 2006   |   |    | 2005   |   |
|--------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Cash      flows from operating activities                    |   |   |    |   |   |   |    |   |   |
| Net      income                                              |   | $      | 73,938  |   |   | $      | 68,910  |   |   | $ | 51,584 |   |
| Adjustments      to reconcile net income to net cash         |   |   |    |   |   |   |    |   |   |   |   |   |
| provided      by operating activities                        |   |   |    |   |   |   |    |   |   |   |   |   |
| Equity      in undistributed income of subsidiaries          |   |   | (5,026  | )      |   |   | (45,298 | )      |   |   | (35,324 | ) |
| Depreciation      and amortization                           |   |   | 260     |   |   |   | 267     |   |   |   | 35 |   |
| Stock      option expense                                    |   |   | 1,691   |   |   |   | 73      |   |   |   | - |   |
| Stock      award plan compensation                           |   |   | 892     |   |   |   | 1,156   |   |   |   | - |   |
| Excess      tax benefits associated with stock-based         |   |   |    |   |   |   |    |   |   |   |   |   |
|   compensation                                     |   |   | (237    | )      |   |   | (1,205  | )      |   |   | (205 | ) |
| Other      operating activities                              |   |   | (1,940  | )      |   |   | (743    | )      |   |   | 714 |   |
| Net      cash flows provided by operating activities         |   |   | 69,578  |   |   |   | 23,160  |   |   |   | 16,804 |   |
|                                                         |   |   |    |   |   |   |    |   |   |   |   |   |
| Cash      flows from investing activities                    |   |   |    |   |   |   |    |   |   |   |   |   |
| Purchase      of available for sale securities               |   |   | -       |   |   |   | (5,496  | )      |   |   | (3,196 | ) |
| Proceeds      from maturity of available for sale securities |   |   | 460     |   |   |   | -       |   |   |   | - |   |
| Other      investment activities                             |   |   | (139    | )      |   |   | (390    | )      |   |   | 79 |   |
| Net      cash flows provided by (used in)                    |   |   |    |   |   |   |    |   |   |   |   |   |
| investing      activities                                    |   |   | 321     |   |   |   | (5,886  | )      |   |   | (3,117 | ) |
|                                                         |   |   |    |   |   |   |    |   |   |   |   |   |
| Cash      flows from financing activities                    |   |   |    |   |   |   |    |   |   |   |   |   |
| Stock      options exercised                                 |   |   | 1,861   |   |   |   | 4,218   |   |   |   | 2,549 |   |
| Cash      dividends paid to shareowners                      |   |   | (29,045 | )      |   |   | (22,358 | )      |   |   | (17,021 | ) |
| Repurchase      of common stock                              |   |   | (44,384 | )      |   |   | -       |   |   |   | - |   |
| Excess      tax benefits associated with stock-based         |   |   |    |   |   |   |    |   |   |   |   |   |
|   compensation                                     |   |   | 237     |   |   |   | 1,205   |   |   |   | 205 |   |
| Other      financing activities                              |   |   | 75      |   |   |   | 712     |   |   |   | (13 | ) |
| Net      cash flows used in financing activities             |   | $      | (71,256 | )      |   | $      | (16,223 | )      |   | $ | (14,280 | ) |
|                                                         |   |   |    |   |   |   |    |   |   |   |   |   |
| Increase      (decrease) in cash                             |   | $      | (1,357  | )      |   | $      | 1,051   |   |   | $ | (593 | ) |
| Cash      at beginning of year                               |   |   | 1,357   |   |   |   | 306     |   |   |   | 899 |   |
| Cash      at end of year                                     |   | $      | -       |   |   | $      | 1,357   |   |   | $ | 306 |   |

----

| (In      thousands)                              | 2007      Quarter Ended |
|--------------------------------------------------|-------------------------|
|                                             | (Unaudited)             |
|                                             | December      31        |   |   | September      30 |   |   | June      30 |   |   | March      31 |
| Interest      income                             | $                       | 79,404 |   |   | $ | 77,748 |   |   | $ | 73,997 |   |   | $ | 68,523 |
| Interest      expense                            |                    | 29,883 |   |   |   | 29,566 |   |   |   | 27,788 |   |   |   | 25,804 |
|   Net      interest income             |                    | 49,521 |   |   |   | 48,182 |   |   |   | 46,209 |   |   |   | 42,719 |
| Provision      for loan losses                   |                    | 6,000 |   |   |   | 2,100 |   |   |   | 1,850 |   |   |   | 1,450 |
| Net      interest income after provision         |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    for      loan losses           |                    | 43,521 |   |   |   | 46,082 |   |   |   | 44,359 |   |   |   | 41,269 |
| Non      interest income                         |                    | 3,802 |   |   |   | 3,538 |   |   |   | 2,562 |   |   |   | 3,407 |
| Non      interest expense                        |                    | 20,226 |   |   |   | 19,137 |   |   |   | 19,506 |   |   |   | 18,147 |
| Income      before income tax                    |                    | 27,097 |   |   |   | 30,483 |   |   |   | 27,415 |   |   |   | 26,529 |
| Provision      for income tax                    |                    | 9,080 |   |   |   | 10,256 |   |   |   | 9,244 |   |   |   | 9,006 |
| Net      income                                  | $                       | 18,017 |   |   | $ | 20,227 |   |   | $ | 18,171 |   |   | $ | 17,523 |
| Basic      earnings per share                    | $                       | 0.40 |   |   | $ | 0.46 |   |   | $ | 0.41 |   |   | $ | 0.39 |
| Diluted      earnings per share                  | $                       | 0.40 |   |   | $ | 0.46 |   |   | $ | 0.40 |   |   | $ | 0.38 |
| Weighted      average basic shares outstanding   |                    | 44,645,895 |   |   |   | 44,033,951 |   |   |   | 44,635,972 |   |   |   | 45,176,326 |
| Weighted      average diluted shares outstanding |                    | 44,871,141 |   |   |   | 44,332,276 |   |   |   | 44,991,139 |   |   |   | 45,624,490 |
|                                             |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |

|        (In thousands)                       | 2006      Quarter Ended |
|--------------------------------------------------|-------------------------|
|                                             | (Unaudited)             |
|                                             | December      31        |   |   | September      30 |   |   | June      30 |   |   | March      31 |
|                                             |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      income                             | $                       | 67,377 |   |   | $ | 66,201 |   |   | $ | 61,346 |   |   | $ | 55,220 |
| Interest      expense                            |                    | 24,327 |   |   |   | 23,533 |   |   |   | 21,166 |   |   |   | 17,916 |
|   Net      interest income             |                    | 43,050 |   |   |   | 42,668 |   |   |   | 40,180 |   |   |   | 37,304 |
| Provision      for loan losses                   |                    | 2,300 |   |   |   | 1,700 |   |   |   | 1,000 |   |   |   | 2,500 |
| Net      interest income after provision         |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    for      loan losses           |                    | 40,750 |   |   |   | 40,968 |   |   |   | 39,180 |   |   |   | 34,804 |
| Non      interest income                         |                    | 3,403 |   |   |   | 3,466 |   |   |   | 3,438 |   |   |   | 5,316 |
| Non      interest expense                        |                    | 17,601 |   |   |   | 16,408 |   |   |   | 16,269 |   |   |   | 16,768 |
| Income      before income tax                    |                    | 26,552 |   |   |   | 28,026 |   |   |   | 26,349 |   |   |   | 23,352 |
| Provision      for income tax                    |                    | 9,001 |   |   |   | 9,500 |   |   |   | 8,944 |   |   |   | 7,924 |
| Net      income                                  | $                       | 17,551 |   |   | $ | 18,526 |   |   | $ | 17,405 |   |   | $ | 15,428 |
| Basic      earnings per share                    | $                       | 0.39 |   |   | $ | 0.41 |   |   | $ | 0.39 |   |   | $ | 0.35 |
| Diluted      earnings per share                  | $                       | 0.38 |   |   | $ | 0.40 |   |   | $ | 0.38 |   |   | $ | 0.35 |
| Weighted      average basic shares outstanding   |                    | 45,328,840 |   |   |   | 45,276,225 |   |   |   | 45,202,309 |   |   |   | 44,215,528 |
| Weighted      average diluted shares outstanding |                    | 45,866,921 |   |   |   | 45,743,603 |   |   |   | 45,573,583 |   |   |   | 44,685,555 |

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