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| Washington                                                              |   | 91-1223535                                   |
|-------------------------------------------------------------------------|--------|----------------------------------------------|
| (State      or Other Jurisdictionof      Incorporation or Organization) |   | (I.R.S.      Employer Identification Number) |

| Title      of each class                  |   | Name      of each exchange on which registered |
|-------------------------------------------|--------|------------------------------------------------|
| Common      Stock, no par value per share |   | The      NASDAQ Stock Market LLC               |

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TABLEOF CONTENTS 

|      |                                                                          |   | Page   |   |
|-----------|-------------------------------------------------------------------------------|--------|--------|--------|
|      |                                                                          |   |   |   |
| Part I.   |                                                                          |   |   | 1      |   |
| Item 1.   | Business                                                                      |   |   | 2      |   |
| Item 1A.  | Risk Factors                                                                  |   |   | 13     |   |
| Item 1B.  | Unresolved Staff Comments                                                     |   |   | 19     |   |
| Item 2.   | Properties                                                                    |   |   | 19     |   |
| Item 3.   | Legal Proceedings                                                             |   |   | 19     |   |
| Item 4.   | Submission of Matters to a Vote of      Shareholders                          |   |   | 19     |   |
|      |                                                                          |   |   |   |   |
| Part II.  |                                                                          |   |   | 20     |   |
| Item 5.   | Market for Registrant's Common Equity, Related Shareholder      Matters       |   |   |   |   |
|      | and Issuer Purchases of EquitySecurities                                      |   |   | 20     |   |
| Item 6.   | Selected Financial Data                                                       |   |   | 22     |   |
| Item 7.   | Management's Discussion and Analysis of Financial Condition      and          |   |   |   |   |
|      | Results of Operations                                                         |   |   | 23     |   |
| Item 7A.  | Quantitative and Qualitative Disclosures about Market      Risk               |   |   | 42     |   |
| Item 8.   | Financial Statements and Supplementary    Data                                |   |   | 45     |   |
| Item 9.   | Changes in and Disagreements With Accountants on      Accounting              |   |   |   |   |
|      | and Financial Disclosure                                                      |   |   | 45     |   |
| Item 9A.  | Controls and Procedures                                                       |   |   | 45     |   |
| Item 9B.  | Other Information                                                             |   |   | 46     |   |
|      |                                                                          |   |   |   |   |
| Part III. |                                                                          |   |   | 46     |   |
| Item 10.  | Directors and Executive Officers and Corporate      Governance                |   |   | 46     |   |
| Item 11.  | Executive Compensation                                                        |   |   | 46     |   |
| Item 12.  | Security Ownership of Certain Beneficial Owners and      Management           |   |   |   |   |
|      | and Related Shareholder Matters                                               |   |   | 47     |   |
| Item 13.  | Certain Relationships and Related Transactions and Director      Independence |   |   | 47     |   |
| Item 14.  | Principal Accountant Fees and Services                                        |   |   | 47     |   |
|      |                                                                          |   |   |   |   |
| Part IV.  |                                                                          |   |   | 48     |   |
| Item 15.  | Exhibits and Financial Statement    Schedules                                 |   |   | 48     |   |
|      | Signatures                                                                    |   |   | 49     |   |

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PART I

| ·   | changes      in general economic conditions, either nationally or locally in western      Washington and Oregon; |
|--------------------|------------------------------------------------------------------------------------------------------------------|

| ·   | the      extent and duration of continued economic, credit and financial market      disruptions and governmental actions to address these      disruptions; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | inflation,      interest rate, market and monetaryfluctuations; |
|--------------------|-----------------------------------------------------------------|

| ·   | legislative      or regulatory changes or changes in accounting principles, policies or      guidelines; |
|--------------------|----------------------------------------------------------------------------------------------------------|

| ·   | the      adequacy of our credit risk management and the allowance for loan losses,      asset quality and our ability to collect on delinquent loans, including      residential construction and land development  loans; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      availability of and costs associated with sources of      liquidity; |
|--------------------|-------------------------------------------------------------------------------|

| ·   | changes      in real estate values generally, within the markets in which we generate      loans, which could adversely affect the demand for loans and may adversely      affect collateral held on outstandingloans; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our      ability to successfully defend against claims asserted against us in      lawsuits arising out of, or related to, our lending operations or any      regulatory action taken against us, as well as any unanticipated      litigation or other regulatoryproceedings; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our      success at managing the risks involved in the foregoing;    and |
|--------------------|--------------------------------------------------------------------------|

| ·   | other      risks which may be described in our future filings with the SEC under the      Securities Exchange Act of 1934. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

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| ITEM 1. | BUSINESS |
|---------|----------|

| 1.   | Loans      for construction of residential and commercial income-producing properties      that generally have terms of less than two years and typically bear an      interest rate that floats with our baserate. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | Loans      for construction of single-family speculation and owner-occupied      properties that generally have terms of one year or less and typically      bear an interest rate that floats with our base  rate. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                    |   | 2008   |      |   | 2007   |   |      | 2006   |   |   | 2005      |   |   | 2004   |      |
|-----------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|
|                                    |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |
| Real      estate commercial loans       |   | $      | 1,044,833 |   |   | $      | 1,003,916 |   |   | $      | 897,714   |   |   | $      | 859,251   |   |   | $ | 848,737 |   |
|                                    |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Real      estate construction loans     |   | $      | 949,909   |   |   | $      | 1,062,662 |   |   | $      | 735,926   |   |   | $      | 554,021   |   |   | $ | 342,287 |   |
|                                    |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Real      estate land development loans |   | $      | 580,453   |   |   | $      | 537,410   |   |   | $      | 399,950   |   |   | $      | 269,662   |   |   | $ | 182,032 |   |
|                                    |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Total      loans at end of period       |   | $      | 3,778,733 |   |   | $      | 3,612,122 |   |   | $      | 2,908,000 |   |   | $      | 2,389,224 |   |   | $ | 1,977,521 |   |
|                                    |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Real      estate commercial loans       |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| as      a percent of total loans        |   |   | 27.7      | %      |   |   | 27.8      | %      |   |   | 30.9      | %      |   |   | 36.0      | % |   |   | 42.9 | % |
| Real      estate construction loans     |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| as      a percent of total loans        |   |   | 25.1      | %      |   |   | 29.4      | %      |   |   | 25.3      | %      |   |   | 23.2      | % |   |   | 17.3 | % |
| Real      estate land development loans |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| as      a percent of total loans        |   |   | 15.4      | %      |   |   | 14.9      | %      |   |   | 13.8      | %      |   |   | 11.3      | % |   |   | 9.2 | % |

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| ·   | Proactively      managing credit quality and loan collections and improving asset      quality. |
|--------------------|-------------------------------------------------------------------------------------------------|

| ·   | Diversifying      our loan portfolio by emphasizing commercial and industrial lending      through our existing branches. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------|

| ·   | Managing      liquidity and improving our capital position in compliance with regulatory      guidelines. |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| ·   | Continuing      to seek out reasonable expense reduction  measures. |
|--------------------|---------------------------------------------------------------------|

| ·   | Increasing      core deposits to fund loan growth and maintaining net interest margins      through an enhanced branch network and online  banking. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | acquiring      direct or indirect ownership or control of any voting shares of any bank      if, after the acquisition, the bank holding company will directly or      indirectly own or control more than 5% of the bank’s voting      shares; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | acquiring      all or substantially all of the assets of any bank;  or |
|--------------------|------------------------------------------------------------------------|

| ·   | merging      or consolidating with any other bank holding  company. |
|--------------------|---------------------------------------------------------------------|

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| ·   | Truth-In-Lending      Act, governing disclosures of credit terms to consumer      borrowers; |
|--------------------|----------------------------------------------------------------------------------------------|

| ·   | Home      Mortgage Disclosure Act of 1975, requiring financial institutions to      provide information to enable the public and public officials to determine      whether a financial institution is fulfilling its obligation to help meet      the housing needs of the community itserves; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Equal      Credit Opportunity Act, prohibiting discrimination on the basis of race,      creed or other prohibited factors in extending  credit; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Fair      Credit Reporting Act of 1978, governing the use and provision of      information to credit reportingagencies; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

| ·   | Fair      Debt Collection Practices Act, governing the manner in which consumer      debts may be collected by collectionagencies; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Service      Members Civil Relief Act, which amended the Soldiers’ and Sailors’ Civil      Relief Act of 1940, governing the repayment terms of, and property rights      underlying, secured obligations of persons in military service;      and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Rules      and regulations of the various federal agencies charged with the      responsibility of implementing these federal  laws. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      Right to Financial Privacy Act, which imposes a duty to maintain      confidentiality of consumer financial records and prescribes procedures      for complying with administrative subpoenas of financial records;      and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      Electronic Funds Transfer Act and Regulation E issued by the Federal      Reserve Board to implement that act, which govern automatic deposits to      and withdrawals from deposit accounts and customers’ rights and      liabilities arising from the use of automated teller machines and other      electronic banking services. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | initial      notices to customers about their privacy policies, describing the      conditions under which they may disclose nonpublic personal information to      nonaffiliated third-parties andaffiliates; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | annual      notices of their privacy policies to current customers;  and |
|--------------------|--------------------------------------------------------------------------|

| ·   | a      reasonable method for customers to “opt out” of disclosures to      nonaffiliated third-parties. |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

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| ·   | raised      the deposit insurance limit on certain retirement accounts to $250,000 and      indexes that limit for inflation; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| ·   | required      the FDIC and National Credit Union Administration boards, starting in 2010      and every succeeding five years, to consider raising the standard maximum      deposit insurance; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | eliminated      the current fixed 1.25 percent Designated Reserve Ratio (“DRR”) and      provided the FDIC with the discretion to set the DRR within a range of      1.15 to 1.50 percent for any givenyear. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ITEM 1A. | RISK      FACTORS |
|----------|-------------------|

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| ITEM 1B. | UNRESOLVED      STAFF COMMENTS |
|----------|--------------------------------|

| ITEM 2. | PROPERTIES |
|---------|------------|

| ITEM 3. | LEGAL      PROCEEDINGS |
|---------|------------------------|

| ITEM 4. | SUBMISSION      OF MATTERS TO A VOTE OFSHAREHOLDERS |
|---------|-----------------------------------------------------|

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PART II

| ITEM 5. | MARKET      FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER      PURCHASES OF EQUITY SECURITIES |
|---------|------------------------------------------------------------------------------------------------------------------------|

|                |   | Year      Ended December 31, |   |
|---------------------|--------|------------------------------|--------|
|                |   | 2008                         |   |   | 2007 |   |
|                |   | High                         |   |   | Low |   |   | High |   |   | Low |   |
| First      Quarter  |   | $                            | 20.21  |   |   | $ | 15.06 |   |   | $ | 29.97 |   |   | $ | 24.71 |   |
| Second      Quarter |   |                         | 19.90  |   |   |   | 8.28 |   |   |   | 26.92 |   |   |   | 22.21 |   |
| Third      Quarter  |   |                         | 17.89  |   |   |   | 8.72 |   |   |   | 26.17 |   |   |   | 20.17 |   |
| Fourth      Quarter |   |                         | 13.10  |   |   |   | 2.18 |   |   |   | 25.14 |   |   |   | 17.50 |   |

| Dividend      Declared |   | Record      Date | Payment      Date    |
|------------------------|--------|------------------|----------------------|
| $                      | 0.175  |             | January      7, 2008 | January      21, 2008 |
|                   | 0.180  |             | April      7, 2008   | April      21, 2008 |
|                   | 0.060  |             | July      8, 2008    | July      22, 2008 |
|                   | 0.060  |             | October      7, 2008 | October      21, 2008 |
|                   |   |             |                 |   |
| $                      | 0.155  |             | January      9, 2007 | January      22, 2007 |
|                   | 0.160  |             | April      10, 2007  | April      24, 2007 |
|                   | 0.165  |             | July      10, 2007   | July      24, 2007 |
|                   | 0.170  |             | October      9, 2007 | October      23, 2007 |

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| Index                               | 12/31/2003                                              | 12/31/2004                                              | 12/31/2005                                              | 12/31/2006                                              | 12/31/2007                                              | 12/31/2008                                                         |
|-------------------------------------|---------------------------------------------------------|---------------------------------------------------------|---------------------------------------------------------|---------------------------------------------------------|---------------------------------------------------------|--------------------------------------------------------------------|
| Frontier      Financial Corporation |  $       100.00 |  $       118.61 |  $       150.28 |  $       208.48 |  $       137.08 |  $         35.69 |
| NASDAQ      Bank Index              |  $       100.00 |  $       114.44 |  $       111.81 |  $       125.46 |  $       151.48 |  $       110.44            |
| S&P      500 Index              |  $       100.00 |  $       110.97 |  $       114.30 |  $       132.35 |  $       139.61 |  $         87.96 |

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| ITEM 6. | SELECTED      FINANCIAL DATA |
|---------|------------------------------|

| In      thousands, except per share amounts |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |
|---------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|
|                                        |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   | %      Change |   |
| AT      YEAR END                            |   | 2008   |      |   | 2007   |   |      | 2006   |   |   | 2005      |   |   | 2004   |      |   |   | 2008-2007 |   |
| Total      assets                           |   | $      | 4,104,445 |   |   | $      | 3,995,689 |   |   | $      | 3,238,464 |   |   | $      | 2,640,275 |   |   | $ | 2,243,396 |   |   |   | 2.7 | % |
| Net      loans                              |   |   | 3,666,177 |   |   |   | 3,558,127 |   |   |   | 2,867,351 |   |   |   | 2,355,419 |   |   |   | 1,945,324 |   |   |   | 3.0 | % |
| Securities                                  |   |   | 93,691    |   |   |   | 135,121   |   |   |   | 114,711   |   |   |   | 110,617   |   |   |   | 153,451 |   |   |   | -30.7 | % |
| Deposits                                    |   |   | 3,275,165 |   |   |   | 2,943,236 |   |   |   | 2,453,632 |   |   |   | 2,061,380 |   |   |   | 1,795,842 |   |   |   | 11.3 | % |
| Shareholders'      equity                   |   |   | 352,043   |   |   |   | 459,612   |   |   |   | 395,283   |   |   |   | 296,097   |   |   |   | 254,230 |   |   |   | -23.4 | % |
|                                        |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |
| FOR      THE YEAR                           |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Interest      income                        |   | $      | 279,055   |   |   | $      | 299,672   |   |   | $      | 250,144   |   |   | $      | 178,886   |   |   | $ | 140,228 |   |   |   | -6.9 | % |
| Interest      expense                       |   |   | 112,185   |   |   |   | 113,041   |   |   |   | 86,942    |   |   |   | 51,736    |   |   |   | 34,939 |   |   |   | -0.8 | % |
| Net      interest income                    |   |   | 166,870   |   |   |   | 186,631   |   |   |   | 163,202   |   |   |   | 127,150   |   |   |   | 105,289 |   |   |   | -10.6 | % |
| Securities      gains (losses)              |   |   | 4,570     |   |   |   | (937      | )      |   |   | (25       | )      |   |   | (211      | )      |   |   | (44 | ) |   |   | -587.7 | % |
| Provision      for loan losses              |   |   | 120,000   |   |   |   | 11,400    |   |   |   | 7,500     |   |   |   | 4,200     |   |   |   | 3,500 |   |   |   | 952.6 | % |
| Net      income (loss)                      |   |   | (89,737   | )      |   |   | 73,938    |   |   |   | 68,910    |   |   |   | 51,584    |   |   |   | 43,045 |   |   |   | -221.4 | % |
| Basic      earnings (loss) per share        |   | $      | (1.91     | )      |   | $      | 1.63      |   |   | $      | 1.53      |   |   | $      | 1.21      |   |   | $ | 1.03 |   |   |   | -217.2 | % |
| Diluted      earnings (loss) per share      |   | $      | (1.91     | )      |   | $      | 1.62      |   |   | $      | 1.52      |   |   | $      | 1.21      |   |   | $ | 1.02 |   |   |   | -217.9 | % |
| Cash      dividends declared                |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |
| per      common share                       |   | $      | 0.48      |   |   | $      | 0.65      |   |   | $      | 0.50      |   |   | $      | 0.40      |   |   | $ | 0.34 |   |   |   | -26.9 | % |
| Dividend      payout ratio                  |   |   | -25.1     | %      |   |   | 40.1      | %      |   |   | 32.9      | %      |   |   | 33.1      | %      |   |   | 33.3 | % |   |   | -162.6 | % |
| Return      on Average                      |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Assets                                      |   |   | -2.18     | %      |   |   | 2.13      | %      |   |   | 2.27      | %      |   |   | 2.09      | %      |   |   | 1.98 | % |   |   | -202.3 | % |
| Equity                                      |   |   | -19.42    | %      |   |   | 18.76     | %      |   |   | 18.91     | %      |   |   | 18.75     | %      |   |   | 18.35 | % |   |   | -203.5 | % |
| Avg.      equity/avg. assets                |   |   | 11.25     | %      |   |   | 11.36     | %      |   |   | 11.98     | %      |   |   | 11.16     | %      |   |   | 10.76 | % |   |   | -1.0 | % |
| Efficiency      Ratio                       |   |   | 45        | %      |   |   | 37        | %      |   |   | 38        | %      |   |   | 41        | %      |   |   | 42 | % |   |   | 21.6 | % |

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| ITEM 7. | MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS |
|---------|-------------------------------------------------------------------------------------------------------|

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|                            |   | 2008                |   |   | 2007            |   |   | 2006                |   |
|---------------------------------|--------|---------------------|--------|--------|-----------------|--------|--------|---------------------|--------|
|                            |   | Amortized      Cost |   |   | Fair      Value |   |   | Amortized      Cost |   |   | Fair      Value |   |   | Amortized      Cost |   |   | Fair      Value |   |
| Equities                        |   | $                   | 6,107  |   |            | $      | 1,930  |                |   | $ | 27,606 |   |   | $ | 34,575 |   |   | $ | 29,052 |   |   | $ | 39,507 |   |
| U.S.      Treasuries            |   |                | 6,304  |   |            |   | 6,457  |                |   |   | 6,223 |   |   |   | 6,311 |   |   |   | 4,204 |   |   |   | 4,248 |   |
| U.S.      Agencies              |   |                | 51,594 |   |            |   | 52,055 |                |   |   | 71,385 |   |   |   | 72,167 |   |   |   | 50,004 |   |   |   | 49,207 |   |
| Corporate      securities       |   |                | 6,052  |   |            |   | 6,192  |                |   |   | 17,062 |   |   |   | 16,704 |   |   |   | 18,198 |   |   |   | 18,002 |   |
| Mortgage-backed      securities |   |                | 22,791 |   |            |   | 22,791 |                |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Municipal      securities       |   |                | 4,416  |   |            |   | 4,521  |                |   |   | 5,352 |   |   |   | 5,387 |   |   |   | 3,753 |   |   |   | 3,771 |   |
|                            |   | $                   | 97,264 |   |            | $      | 93,946 |                |   | $ | 127,628 |   |   | $ | 135,144 |   |   | $ | 105,211 |   |   | $ | 114,735 |   |

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|                            |   |         |   |   | After      1 Yr |   |   | After      5 Yrs |   |   |           |   |   | Total      & |   |
|---------------------------------|--------|--------------|--------|--------|-----------------|--------|--------|------------------|--------|--------|----------------|--------|--------|------------------|--------|
|                            |   | Within       |   |   | But      Within |   |   | But      Within  |   |   | After          |   |   | Weighted         |   |
|                            |   | 1      Year/ |   |   | 5      Years/   |   |   | 10      Years/   |   |   | 10      Years/ |   |   | Average          |   |
|                            |   | Yield        |   |   | Yield           |   |   | Yield            |   |   | Yield          |   |   | Yield            |   |
| Equities                        |   | $            | -      |   |            | $      | -      |             |   | $      | -              |   |   | $                | 6,107  |   |   | $ | 6,107 |   |
|                            |   |         | -      |   |            |   | -      |             |   |   | -              |   |   |             | 5.58   | % |   |   | 5.58 | % |
|                            |   |         |   |   |            |   |   |             |   |   |           |   |   |             |   |   |   |   |   |   |
| U.S.      Treasury              |   |         | 6,053  |   |            |   | -      |             |   |   | 251            |   |   |             | -      |   |   |   | 6,304 |   |
|                            |   |         | 2.06   | %      |            |   | -      |             |   |   | 7.20           | %      |   |             | -      |   |   |   | 2.27 | % |
|                            |   |         |   |   |            |   |   |             |   |   |           |   |   |             |   |   |   |   |   |   |
| U.S.      Agencies              |   |         | 5,000  |   |            |   | 46,594 |             |   |   | -              |   |   |             | -      |   |   |   | 51,594 |   |
|                            |   |         | 1.65   | %      |            |   | 3.43   | %                |   |   | -              |   |   |             | -      |   |   |   | 3.26 | % |
|                            |   |         |   |   |            |   |   |             |   |   |           |   |   |             |   |   |   |   |   |   |
| Corporate      securities       |   |         | -      |   |            |   | 2,011  |             |   |   | -              |   |   |             | 4,041  |   |   |   | 6,052 |   |
|                            |   |         | -      |   |            |   | 3.64   | %                |   |   | -              |   |   |             | 9.69   | % |   |   | 7.68 | % |
|                            |   |         |   |   |            |   |   |             |   |   |           |   |   |             |   |   |   |   |   |   |
| Mortgage-backed      securities |   |         | -      |   |            |   | -      |             |   |   | -              |   |   |             | 22,791 |   |   |   | 22,791 |   |
|                            |   |         | -      |   |            |   | -      |             |   |   | -              |   |   |             | 5.30   | % |   |   | 5.30 | % |
|                            |   |         |   |   |            |   |   |             |   |   |           |   |   |             |   |   |   |   |   |   |
| Municipal      securities       |   |         | 744    |   |            |   | 1,322  |             |   |   | 1,374          |   |   |             | 976    |   |   |   | 4,416 |   |
|                            |   |         | 5.09   | %      |            |   | 6.19   | %                |   |   | 5.02           | %      |   |             | 6.67   | % |   |   | 5.76 | % |
|                            |   | $            | 11,797 |   |            | $      | 49,927 |             |   | $      | 1,625          |   |   | $                | 33,915 |   |   | $ | 97,264 |   |
|                            |   |         | 2.08   | %      |            |   | 3.51   | %                |   |   | 5.36           | %      |   |             | 5.91   | % |   |   | 4.21 | % |

----

Table of Contents 

|                             |   | 2008   |      |   | 2007   |   |      | 2006   |   |   | 2005      |   |   | 2004   |      |
|----------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|
| Commercial      and industrial   |   | $      | 457,215   |   |   | $      | 402,569   |   |   | $      | 380,939   |   |   | $      | 321,303   |   |   | $ | 301,961 |   |
| Real      Estate:                |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Commercial                       |   |   | 1,044,833 |   |   |   | 1,003,916 |   |   |   | 897,714   |   |   |   | 859,251   |   |   |   | 848,737 |   |
| Construction                     |   |   | 949,909   |   |   |   | 1,062,662 |   |   |   | 735,926   |   |   |   | 554,021   |   |   |   | 342,287 |   |
| Land      development            |   |   | 580,453   |   |   |   | 537,410   |   |   |   | 399,950   |   |   |   | 269,662   |   |   |   | 182,032 |   |
| Completed      lots              |   |   | 249,685   |   |   |   | 249,573   |   |   |   | 188,032   |   |   |   | 143,652   |   |   |   | 84,102 |   |
| Residential      1-4 family      |   |   | 424,492   |   |   |   | 282,344   |   |   |   | 235,169   |   |   |   | 188,772   |   |   |   | 165,063 |   |
| Installment      and other loans |   |   | 65,468    |   |   |   | 67,421    |   |   |   | 63,050    |   |   |   | 46,852    |   |   |   | 50,057 |   |
| Total      loans                 |   | $      | 3,772,055 |   |   | $      | 3,605,895 |   |   | $      | 2,900,780 |   |   | $      | 2,383,513 |   |   | $ | 1,974,239 |   |

|                             |   | Within      1 Year |      |   | 1      -5 Years |            |      | After      5 Years |               |   | Total   |   |
|----------------------------------|--------|--------------------|-----------|--------|-----------------|-----------------|-----------|--------------------|--------------------|--------|---------|--------|
| Commercial      and industrial   |   | $                  | 272,955   |   |            | $               | 154,565   |               |               | $      | 29,695  |   |   | $ | 457,215 |   |
| Real      Estate:                |   |               |      |   |            |            |      |               |               |   |    |   |   |   |   |   |
| Commercial                       |   |               | 124,502   |   |            |            | 630,986   |               |               |   | 289,345 |   |   |   | 1,044,833 |   |
| Construction                     |   |               | 861,079   |   |            |            | 84,970    |               |               |   | 3,860   |   |   |   | 949,909 |   |
| Land      development            |   |               | 544,019   |   |            |            | 36,434    |               |               |   | -       |   |   |   | 580,453 |   |
| Completed      lots              |   |               | 207,124   |   |            |            | 40,819    |               |               |   | 1,742   |   |   |   | 249,685 |   |
| Residential      1-4 family      |   |               | 164,406   |   |            |            | 203,399   |               |               |   | 56,687  |   |   |   | 424,492 |   |
| Installment      and other loans |   |               | 15,883    |   |            |            | 15,384    |               |               |   | 34,201  |   |   |   | 65,468 |   |
| Total      loans                 |   | $                  | 2,189,968 |   |            | $               | 1,166,557 |               |               | $      | 415,530 |   |   | $ | 3,772,055 |   |
|                             |   |               |      |   |            |            |      |               |               |   |    |   |   |   |   |   |
|                             |   |               |      |   |            |            |      |               |               |   |    |   |   |   |   |   |
|                             |   |               |      |   |            | 1      -5 Years |      |               | After      5 Years |   |    |   |   |   |
| Fixed      rates                 |   |               |      |   |            | $               | 818,792   |               |               | $      | 79,270  |   |   |   |   |   |
| Variable      rates              |   |               |      |   |            |            | 347,765   |               |               |   | 336,260 |   |   |   |   |   |
|                             |   |               |      |   |            | $               | 1,166,557 |               |               | $      | 415,530 |   |   |   |   |   |

----

Table of Contents 

----

Table of Contents 

|                                               |   | 2008   |      |   | 2007   |   |      | 2006   |   |   | 2005      |   |   | 2004   |      |
|----------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|
| Balance      at beginning of year                  |   | $      | 57,658    |   |   | $      | 44,195    |   |   | $      | 37,075    |   |   | $      | 32,728    |   |   | $ | 29,556 |   |
|                                               |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Provision      for loan losses                     |   |   | 120,000   |   |   |   | 11,400    |   |   |   | 7,500     |   |   |   | 4,200     |   |   |   | 3,500 |   |
|                                               |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Loans      charged-off:                            |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Commercial      and industrial                     |   |   | (3,101    | )      |   |   | (1,183    | )      |   |   | (2,283    | )      |   |   | (342      | ) |   |   | (612 | ) |
| Real      estate:                                  |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Commercial                                         |   |   | (1,264    | )      |   |   | -         |   |   |   | -         |   |   |   | (4        | ) |   |   | - |   |
| Construction                                       |   |   | (31,968   | )      |   |   | (201      | )      |   |   | (855      | )      |   |   | -         |   |   |   | - |   |
| Land      development                              |   |   | (12,165   | )      |   |   | -         |   |   |   | -         |   |   |   | -         |   |   |   | - |   |
| Completed      lots                                |   |   | (13,839   | )      |   |   | -         |   |   |   | -         |   |   |   | -         |   |   |   | - |   |
| Residential      1-4 family                        |   |   | (846      | )      |   |   | (300      | )      |   |   | -         |   |   |   | (116      | ) |   |   | (387 | ) |
| Installment      and other                         |   |   | (343      | )      |   |   | (222      | )      |   |   | (156      | )      |   |   | (244      | ) |   |   | (413 | ) |
| Total      charged-off loans                       |   |   | (63,526   | )      |   |   | (1,906    | )      |   |   | (3,294    | )      |   |   | (706      | ) |   |   | (1,412 | ) |
|                                               |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Recoveries:                                        |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Commercial      and industrial                     |   |   | 308       |   |   |   | 845       |   |   |   | 353       |   |   |   | 623       |   |   |   | 741 |   |
| Real      estate:                                  |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Commercial                                         |   |   | -         |   |   |   | -         |   |   |   | -         |   |   |   | -         |   |   |   | 176 |   |
| Construction                                       |   |   | 161       |   |   |   | -         |   |   |   | -         |   |   |   | 142       |   |   |   | 60 |   |
| Land      development                              |   |   | -         |   |   |   | -         |   |   |   | -         |   |   |   | -         |   |   |   | - |   |
| Completed      lots                                |   |   | 9         |   |   |   | -         |   |   |   | -         |   |   |   | -         |   |   |   | - |   |
| Residential      1-4 family                        |   |   | -         |   |   |   | -         |   |   |   | -         |   |   |   | 27        |   |   |   | 51 |   |
| Installment      and other                         |   |   | 28        |   |   |   | 141       |   |   |   | 60        |   |   |   | 61        |   |   |   | 56 |   |
| Total      recoveries                              |   |   | 506       |   |   |   | 986       |   |   |   | 413       |   |   |   | 853       |   |   |   | 1,084 |   |
|                                               |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Net      (charge-offs) recoveries                  |   |   | (63,020   | )      |   |   | (920      | )      |   |   | (2,881    | )      |   |   | 147       |   |   |   | (328 | ) |
| Balance      before portion identified             |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
|     for      undisbursed loans |   |   | 114,638   |   |   |   | 54,675    |   |   |   | 41,694    |   |   |   | 37,075    |   |   |   | 32,728 |   |
| Reserve      acquired in merger                    |   |   | -         |   |   |   | 2,983     |   |   |   | 2,501     |   |   |   | -         |   |   |   | - |   |
| Portion      of reserve identified for             |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| undisbursed      loans and                         |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| reclassified      as a liability                   |   |   | (2,082    | )      |   |   | (3,663    | )      |   |   | (3,546    | )      |   |   | (3,270    | ) |   |   | (2,307 | ) |
| Balance      at end of year                        |   | $      | 112,556   |   |   | $      | 53,995    |   |   | $      | 40,649    |   |   | $      | 33,805    |   |   | $ | 30,421 |   |
|                                               |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Total      loans at end of period (1)              |   | $      | 3,778,733 |   |   | $      | 3,612,122 |   |   | $      | 2,908,000 |   |   | $      | 2,389,224 |   |   | $ | 1,978,052 |   |
|                                               |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Daily      average loans                           |   | $      | 3,774,501 |   |   | $      | 3,185,751 |   |   | $      | 2,731,257 |   |   | $      | 2,200,344 |   |   | $ | 1,887,528 |   |
|                                               |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Ratio      of net charged-offs                     |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| (recoveries)      during the period                |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| to      average loans outstanding                  |   |   | 1.67      | %      |   |   | 0.03      | %      |   |   | 0.11      | %      |   |   | -0.01     | % |   |   | 0.02 | % |
| Loan      loss reserve as a                        |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| percentage      of total loans                     |   |   | 2.98      | %      |   |   | 1.49      | %      |   |   | 1.40      | %      |   |   | 1.41      | % |   |   | 1.54 | % |
|                                               |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| (1)      Includes loans held for resale            |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |

----

Table of Contents 

|                                               |   |    |    |   | Loan     |   |   |    |   |   | Loan     |   |   |    |   |   | Loan     |   |
|----------------------------------------------------|--------|---------|---------|--------|----------|--------|--------|---------|--------|--------|----------|--------|--------|---------|--------|--------|----------|--------|
|                                               |   | 2008    |    |   | Category |   |   | 2007    |   |   | Category |   |   | 2006    |   |   | Category |   |
|                                               |   | Reserve |    |   | Percent  |   |   | Reserve |   |   | Percent  |   |   | Reserve |   |   | Percent  |   |
| Commercial      and industrial                     |   | $       | 15,127  |   |     |   | 12.1   | %       |   | $      | 9,856    |   |   |    | 11.2   | %      |     | $      | 9,726 |   |   |   | 13.1 | % |
| Real      estate:                                  |   |    |    |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |   |   |   |   |   |   |
| Commercial                                         |   |    | 11,388  |   |     |   | 27.7   | %       |   |   | 12,373   |   |   |    | 27.8   | %      |     |   | 11,040 |   |   |   | 30.9 | % |
| Construction                                       |   |    | 27,636  |   |     |   | 25.2   | %       |   |   | 824      |   |   |    | 29.5   | %      |     |   | 809 |   |   |   | 25.4 | % |
| Land      development                              |   |    | 22,701  |   |     |   | 15.4   | %       |   |   | 5,257    |   |   |    | 14.9   | %      |     |   | 4,123 |   |   |   | 13.8 | % |
| Completed      lots                                |   |    | 9,054   |   |     |   | 6.6    | %       |   |   | 3,443    |   |   |    | 6.9    | %      |     |   | 1,560 |   |   |   | 6.5 | % |
| Residential      1-4 family                        |   |    | 14,056  |   |     |   | 11.3   | %       |   |   | 16,900   |   |   |    | 7.8    | %      |     |   | 7,168 |   |   |   | 8.1 | % |
| Installment      and other                         |   |    | 1,071   |   |     |   | 1.7    | %       |   |   | 1,060    |   |   |    | 1.9    | %      |     |   | 1,012 |   |   |   | 2.2 | % |
| Unallocated                                        |   |    | 11,523  |   |     |   |   |    |   |   | 4,282    |   |   |    |   |   |     |   | 5,211 |   |   |   |   |   |
|                                               |   |    | 112,556 |   |     |   |   |    |   |   | 53,995   |   |   |    |   |   |     |   | 40,649 |   |   |   |   |   |
| Portion      of reserve identified for undisbursed |   |    |    |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |   |   |   |   |   |   |
| loans      and reclassifed as a liability          |   |    | 2,082   |   |     |   |   |    |   |   | 3,663    |   |   |    |   |   |     |   | 3,546 |   |   |   |   |   |
|                                               |   | $       | 114,638 |   |     |   | 100.0  | %       |   | $      | 57,658   |   |   |    | 100.0  | %      |     | $      | 44,195 |   |   |   | 100.0 | % |
|                                               |   |    |    |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |   |   |   |   |   |   |
|                                               |   |    |    |   |     | Loan   |   |    |   |   |     |   | Loan   |    |   |   |     |   |   |   |   |   |
|                                               |   | 2005    |    |   | Category |   |   | 2004    |   |   | Category |   |   |    |   |   |     |   |   |   |
|                                               |   | Reserve |    |   | Percent  |   |   | Reserve |   |   | Percent  |   |   |    |   |   |     |   |   |   |
| Commercial      and industrial                     |   | $       | 11,061  |   |     |   | 13.5   | %       |   | $      | 9,658    |   |   |    | 15.3   | %      |     |   |   |   |   |   |   |   |
| Real      estate:                                  |   |    |    |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |   |   |   |   |   |   |
| Commercial                                         |   |    | 12,622  |   |     |   | 36.0   | %       |   |   | 10,843   |   |   |    | 43.0   | %      |     |   |   |   |   |   |   |   |
| Construction                                       |   |    | 504     |   |     |   | 23.2   | %       |   |   | 473      |   |   |    | 17.3   | %      |     |   |   |   |   |   |   |   |
| Land      development                              |   |    | 1,699   |   |     |   | 11.3   | %       |   |   | 1,194    |   |   |    | 9.2    | %      |     |   |   |   |   |   |   |   |
| Completed      lots                                |   |    | 907     |   |     |   | 6.0    | %       |   |   | 1,142    |   |   |    | 4.3    | %      |     |   |   |   |   |   |   |   |
| Residential      1-4 family                        |   |    | 4,088   |   |     |   | 7.9    | %       |   |   | 3,846    |   |   |    | 8.4    | %      |     |   |   |   |   |   |   |   |
| Installment      and other                         |   |    | 724     |   |     |   | 2.1    | %       |   |   | 461      |   |   |    | 2.5    | %      |     |   |   |   |   |   |   |   |
| Unallocated                                        |   |    | 2,200   |   |     |   |   |    |   |   | 2,804    |   |   |    |   |   |     |   |   |   |   |   |   |   |
|                                               |   |    | 33,805  |   |     |   |   |    |   |   | 30,421   |   |   |    |   |   |     |   |   |   |   |   |   |   |
| Portion      of reserve identified for undisbursed |   |    |    |   |     |   |   |    |   |   |     |   |   |    |   |   |     |   |   |   |   |   |   |   |
| loans      and reclassifed as a liability          |   |    | 3,270   |   |     |   |   |    |   |   | 2,307    |   |   |    |   |   |     |   |   |   |   |   |   |   |
|                                               |   | $       | 37,075  |   |     |   | 100.0  | %       |   | $      | 32,728   |   |   |    | 100.0  | %      |     |   |   |   |   |   |   |   |

----

Table of Contents 

|                                            |   | 2008   |      |   | 2007   |   |      | 2006   |   |   | 2005      |   |   | 2004   |      |
|-------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|
| Commercial      and industrial                  |   | $      | 12,908    |   |   | $      | 159       |   |   | $      | 574       |   |   | $      | 4,939     |   |   | $ | - |   |
| Real      estate:                               |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Commercial                                      |   |   | 10,937    |   |   |   | -         |   |   |   | -         |   |   |   | -         |   |   |   | 6,847 |   |
| Construction                                    |   |   | 181,905   |   |   |   | 19,842    |   |   |   | 47        |   |   |   | -         |   |   |   | - |   |
| Land      development                           |   |   | 177,139   |   |   |   | -         |   |   |   | 7,143     |   |   |   | -         |   |   |   | - |   |
| Completed      lots                             |   |   | 34,005    |   |   |   | 804       |   |   |   | -         |   |   |   | -         |   |   |   | 356 |   |
| Residential      1-4 family                     |   |   | 17,686    |   |   |   | 93        |   |   |   | 889       |   |   |   | -         |   |   |   | 6,904 |   |
| Installment      and other                      |   |   | 645       |   |   |   | 10        |   |   |   | -         |   |   |   | 10        |   |   |   | - |   |
| Total      nonaccruing loans                    |   |   | 435,225   |   |   |   | 20,908    |   |   |   | 8,653     |   |   |   | 4,949     |   |   |   | 14,107 |   |
| Other      real estate owned                    |   |   | 10,803    |   |   |   | 367       |   |   |   | -         |   |   |   | -         |   |   |   | - |   |
| Total      nonperforming assets                 |   | $      | 446,028   |   |   | $      | 21,275    |   |   | $      | 8,653     |   |   | $      | 4,949     |   |   | $ | 14,107 |   |
|                                            |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Restructured      loans                         |   | $      | -         |   |   | $      | -         |   |   | $      | -         |   |   | $      | -         |   |   | $ | - |   |
|                                            |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Total      loans at end of period (1)           |   | $      | 3,778,733 |   |   | $      | 3,612,122 |   |   | $      | 2,908,000 |   |   | $      | 2,389,224 |   |   | $ | 1,978,052 |   |
| Total      assets at end of period              |   | $      | 4,104,445 |   |   | $      | 3,995,689 |   |   | $      | 3,238,464 |   |   | $      | 2,640,275 |   |   | $ | 2,243,396 |   |
|                                            |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Total      nonperforming loans to total loans   |   |   | 11.52     | %      |   |   | 0.58      | %      |   |   | 0.30      | %      |   |   | 0.21      | % |   |   | 0.71 | % |
| Total      nonperforming assets to total assets |   |   | 10.87     | %      |   |   | 0.53      | %      |   |   | 0.27      | %      |   |   | 0.19      | % |   |   | 0.63 | % |
|                                            |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| (1)      Includes loans held for resale         |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |

|                                     |   | 2008   |   |   | 2007   |   |   | 2006   |   |   | 2005   |   |   | 2004   |   |
|------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Additional      interest income which    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| would      have been recorded during the |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| period      under original loan terms    |   | $      | 18,915 |   |   | $      | 757    |   |   | $      | 761    |   |   | $      | 67     |   |   | $ | 925 |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      collected and included in  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| net      income for the period           |   | $      | 21,004 |   |   | $      | 1,131  |   |   | $      | 344    |   |   | $      | 327    |   |   | $ | 350 |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commitments      for additional funds    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| related      to loans above              |   | $      | -      |   |   | $      | -      |   |   | $      | -      |   |   | $      | -      |   |   | $ | - |   |

----

Table of Contents 

|                          |   | December      31, 2008 |   |   | December      31, 2007 |   |
|-------------------------------|--------|------------------------|--------|--------|------------------------|--------|
|                          |   | Amount                 |   |   | Number                 |   |   | Amount |   |   | Number |   |
| Beginning      balance        |   | $                      | 367    |   |                   |   | 1 |   |   | $ | - |   |   |   | - |   |
| Additions      to OREO        |   |                   | 12,992 |   |                   |   | 76 |   |   |   | 367 |   |   |   | 1 |   |
| Capitalized      improvements |   |                   | 623    |   |                   |   |   |   |   |   | - |   |   |   |   |   |
| Valuation      adjustments    |   |                   | (68    | )      |                   |   |   |   |   |   | - |   |   |   |   |   |
| Disposition      of OREO      |   |                   | (3,111 | )      |                   |   | (13 | ) |   |   | - |   |   |   | - |   |
| Ending      balance           |   | $                      | 10,803 |   |                   |   | 64 |   |   | $ | 367 |   |   |   | 1 |   |

----

Table of Contents 

|                                      |   | 2008   |      |   | %      |   |   | 2007 |   |   | %         |   |   | 2006   |   |   | %      |   |
|-------------------------------------------|--------|--------|-----------|--------|--------|--------|--------|------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|
| Money      market, sweep and NOW accounts |   | $      | 325,554   |   |   |   | 11.3   | %    |   | $      | 745,780   |   |   |   | 29.2   | %      |   | $      | 683,948 |   |   |   | 33.4 | % |
| Savings                                   |   |   | 365,114   |   |   |   | 12.7   | %    |   |   | 254,722   |   |   |   | 10.0   | %      |   |   | 305,669 |   |   |   | 14.9 | % |
| Time      deposits, $100,000 and over     |   |   | 1,430,685 |   |   |   | 49.7   | %    |   |   | 832,373   |   |   |   | 32.6   | %      |   |   | 545,173 |   |   |   | 26.6 | % |
| Other      time deposits                  |   |   | 758,361   |   |   |   | 26.3   | %    |   |   | 719,835   |   |   |   | 28.2   | %      |   |   | 512,221 |   |   |   | 25.1 | % |
| Total      interest bearing deposits      |   | $      | 2,879,714 |   |   |   | 100.0  | %    |   | $      | 2,552,710 |   |   |   | 100.0  | %      |   | $      | 2,047,011 |   |   |   | 100.0 | % |

| 3      months or less                |   | $      | 349,747   |   |
|--------------------------------------|--------|--------|-----------|--------|
| Over      3 months through 6 months  |   |   | 270,766   |   |
| Over      6 months through 12 months |   |   | 499,763   |   |
| Over      12 months                  |   |   | 310,409   |   |
| Total                                |   | $      | 1,430,685 |   |

|                           |   |   |    |   | Weighted |   |   |   |   |   | Weighted |   |   |   |   |   | Weighted |   |
|--------------------------------|--------|--------|---------|--------|----------|--------|--------|--------|--------|--------|----------|--------|--------|--------|--------|--------|----------|--------|
|                           |   |   |    |   | Average  |   |   |   |   |   | Average  |   |   |   |   |   | Average  |   |
|                           |   |   |    |   | Interest |   |   |   |   |   | Interest |   |   |   |   |   | Interest |   |
|                           |   | 2008   |    |   | Rate     |   |   | 2007   |   |   | Rate     |   |   | 2006   |   |   | Rate     |   |
| Year      end balance          |   | $      | 21,616  |   |     |   | 0.10   | %      |   | $      | 258,145  |   |   |   | 4.92   | %      |     | $      | 81,673 |   |   |   | 5.24 | % |
|                           |   |   |    |   |     |   |   |   |   |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |
| Highest      month end balance |   |   |    |   |     |   |   |   |   |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |
| during      the period         |   | $      | 198,200 |   |     |   |   |   |   | $      | 260,554  |   |   |   |   |   |     | $      | 81,673 |   |   |   |   |   |

----

Table of Contents 

|                                      |   | 2008   |    |   | 2007   |   |    | 2006   |   |
|-------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Maximum      outstanding at any month end |   | $      | 429,417 |   |   | $      | 341,704 |   |   | $ | 282,017 |   |
| Average      outstanding                  |   |   | 340,350 |   |   |   | 294,169 |   |   |   | 258,991 |   |
|                                      |   |   |    |   |   |   |    |   |   |   |   |   |
| Weighted      average interest rates      |   |   |    |   |   |   |    |   |   |   |   |   |
| Annual                                    |   |   | 4.09    | %      |   |   | 4.15    | %      |   |   | 4.72 | % |
| End      of year                          |   |   | 3.91    | %      |   |   | 4.43    | %      |   |   | 4.69 | % |

----

Table of Contents 

|                                                                                                                |   | Year      Ended December 31, |      |
|---------------------------------------------------------------------------------------------------------------------|--------|------------------------------|-----------|
|                                                                                                                |   | 2008                         |      |   | 2007 |   |   | 2006 |   |
|                                                                                                                |   |                         |      |   | TE |   |   | Average |   |   |   |   |   | TE |   |   | Average |   |   |   |   |   | TE |   |   | Average |   |
|                                                                                                                |   |                         |      |   | Interest |   |   | Rates |   |   |   |   |   | Interest |   |   | Rates |   |   |   |   |   | Interest |   |   | Rates |   |
|                                                                                                                |   | Average                      |      |   | Income/ |   |   | Earned/ |   |   | Average |   |   | Income/ |   |   | Earned/ |   |   | Average |   |   | Income/ |   |   | Earned/ |   |
|                                                                                                                |   | Balance                      |      |   | Expense |   |   | Paid |   |   | Balance |   |   | Expense |   |   | Paid |   |   | Balance |   |   | Expense |   |   | Paid |   |
| Interest      Earning Assets                                                                                        |   |                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable      investments                                                                                            |   | $                            | 139,753   |   |   | $ | 5,054 |   |   |   | 3.62 | % |   | $ | 109,798 |   |   | $ | 4,585 |   |   |   | 4.18 | % |   | $ | 102,488 |   |   | $ | 4,097 |   |   |   | 4.00 | % |
| Nontaxable      investments (1)                                                                                     |   |                         | 5,018     |   |   |   | 309 |   |   |   | 6.16 | % |   |   | 2,907 |   |   |   | 209 |   |   |   | 7.19 | % |   |   | 4,872 |   |   |   | 306 |   |   |   | 6.28 | % |
| Total                                                                                                               |   |                         | 144,771   |   |   |   | 5,363 |   |   |   | 3.70 | % |   |   | 112,705 |   |   |   | 4,794 |   |   |   | 4.25 | % |   |   | 107,360 |   |   |   | 4,403 |   |   |   | 4.10 | % |
| Federal      funds sold                                                                                             |   |                         | 29,197    |   |   |   | 457 |   |   |   | 1.57 | % |   |   | 18,405 |   |   |   | 958 |   |   |   | 5.21 | % |   |   | 28,534 |   |   |   | 1,448 |   |   |   | 5.07 | % |
| Loans      (1) (2)                                                                                                  |   |                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Installment                                                                                                         |   |                         | 68,562    |   |   |   | 5,813 |   |   |   | 8.48 | % |   |   | 62,841 |   |   |   | 6,083 |   |   |   | 9.68 | % |   |   | 60,871 |   |   |   | 5,764 |   |   |   | 9.47 | % |
| Commercial(1)                                                                                                       |   |                         | 437,481   |   |   |   | 32,064 |   |   |   | 7.33 | % |   |   | 383,242 |   |   |   | 33,776 |   |   |   | 8.81 | % |   |   | 366,601 |   |   |   | 31,013 |   |   |   | 8.46 | % |
| Real      estate                                                                                                    |   |                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial      (1)                                                                                                 |   |                         | 1,036,171 |   |   |   | 79,573 |   |   |   | 7.68 | % |   |   | 919,028 |   |   |   | 72,313 |   |   |   | 7.87 | % |   |   | 897,258 |   |   |   | 68,350 |   |   |   | 7.62 | % |
| Construction                                                                                                        |   |                         | 1,056,159 |   |   |   | 73,315 |   |   |   | 6.94 | % |   |   | 890,404 |   |   |   | 91,963 |   |   |   | 10.33 | % |   |   | 698,777 |   |   |   | 72,152 |   |   |   | 10.33 | % |
| Land      development                                                                                               |   |                         | 585,508   |   |   |   | 40,313 |   |   |   | 6.89 | % |   |   | 457,116 |   |   |   | 48,310 |   |   |   | 10.57 | % |   |   | 299,604 |   |   |   | 31,429 |   |   |   | 10.49 | % |
| Completed      lots                                                                                                 |   |                         | 244,575   |   |   |   | 17,400 |   |   |   | 7.11 | % |   |   | 209,916 |   |   |   | 20,784 |   |   |   | 9.90 | % |   |   | 182,105 |   |   |   | 17,738 |   |   |   | 9.74 | % |
| Residential      1-4 family                                                                                         |   |                         | 346,045   |   |   |   | 26,238 |   |   |   | 7.58 | % |   |   | 263,204 |   |   |   | 21,965 |   |   |   | 8.35 | % |   |   | 226,041 |   |   |   | 18,826 |   |   |   | 8.33 | % |
| Total      loans                                                                                                    |   |                         | 3,774,501 |   |   |   | 274,716 |   |   |   | 7.28 | % |   |   | 3,185,751 |   |   |   | 295,194 |   |   |   | 9.27 | % |   |   | 2,731,257 |   |   |   | 245,272 |   |   |   | 8.98 | % |
| Total      earning assets/total                                                                                     |   |                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      interest      income                                                                  |   |                         | 3,948,469 |   |   |   | 280,536 |   |   |   | 7.10 | % |   |   | 3,316,861 |   |   |   | 300,946 |   |   |   | 9.07 | % |   |   | 2,867,151 |   |   |   | 251,123 |   |   |   | 8.76 | % |
| Reserve      for loan losses                                                                                        |   |                         | (82,529   | ) |   |   |   |   |   |   |   |   |   |   | (43,972 | ) |   |   |   |   |   |   |   |   |   |   | (38,766 | ) |   |   |   |   |   |   |   |   |
| Cash      and due from banks                                                                                        |   |                         | 50,410    |   |   |   |   |   |   |   |   |   |   |   | 68,285 |   |   |   |   |   |   |   |   |   |   |   | 83,351 |   |   |   |   |   |   |   |   |   |
| Other      assets                                                                                                   |   |                         | 191,221   |   |   |   |   |   |   |   |   |   |   |   | 129,390 |   |   |   |   |   |   |   |   |   |   |   | 129,836 |   |   |   |   |   |   |   |   |   |
| TOTAL      ASSETS                                                                                                   |   | $                            | 4,107,571 |   |   |   |   |   |   |   |   |   |   | $ | 3,470,564 |   |   |   |   |   |   |   |   |   |   | $ | 3,041,572 |   |   |   |   |   |   |   |   |   |
| Interest      Bearing Liabilities                                                                                   |   |                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Money      Market, Sweep &                                                                                      |   |                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      NOW      accounts                                                                     |   | $                            | 586,943   |   |   | $ | 8,950 |   |   |   | 1.52 | % |   | $ | 716,777 |   |   | $ | 23,990 |   |   |   | 3.35 | % |   | $ | 542,335 |   |   | $ | 17,123 |   |   |   | 3.16 | % |
| Savings      accounts                                                                                               |   |                         | 349,318   |   |   |   | 7,405 |   |   |   | 2.12 | % |   |   | 268,017 |   |   |   | 6,207 |   |   |   | 2.32 | % |   |   | 374,167 |   |   |   | 8,718 |   |   |   | 2.33 | % |
| Other      time deposits                                                                                            |   |                         | 1,894,455 |   |   |   | 79,736 |   |   |   | 4.21 | % |   |   | 1,325,777 |   |   |   | 66,883 |   |   |   | 5.04 | % |   |   | 1,063,229 |   |   |   | 47,685 |   |   |   | 4.48 | % |
| Total      interest bearing                                                                                         |   |                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      deposits                                                                              |   |                         | 2,830,716 |   |   |   | 96,091 |   |   |   | 3.39 | % |   |   | 2,310,571 |   |   |   | 97,080 |   |   |   | 4.20 | % |   |   | 1,979,731 |   |   |   | 73,526 |   |   |   | 3.71 | % |
| Short-term      borrowings                                                                                          |   |                         | 73,460    |   |   |   | 1,562 |   |   |   | 2.13 | % |   |   | 42,542 |   |   |   | 2,212 |   |   |   | 5.20 | % |   |   | 20,089 |   |   |   | 910 |   |   |   | 4.53 | % |
| FHLB      borrowings                                                                                                |   |                         | 338,268   |   |   |   | 14,244 |   |   |   | 4.21 | % |   |   | 294,169 |   |   |   | 13,402 |   |   |   | 4.56 | % |   |   | 258,991 |   |   |   | 12,195 |   |   |   | 4.71 | % |
| Subordinated      debt                                                                                              |   |                         | 5,156     |   |   |   | 288 |   |   |   | 5.59 | % |   |   | 5,156 |   |   |   | 347 |   |   |   | 6.73 | % |   |   | 4,726 |   |   |   | 311 |   |   |   | 6.58 | % |
| Total      interest bearing                                                                                         |   |                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      liabilities/total                                                                     |   |                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      interest      expense                                                                 |   |                         | 3,247,600 |   |   |   | 112,185 |   |   |   | 3.45 | % |   |   | 2,652,438 |   |   |   | 113,041 |   |   |   | 4.26 | % |   |   | 2,263,537 |   |   |   | 86,942 |   |   |   | 3.84 | % |
| Noninterest      bearing                                                                                            |   |                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      deposits                                                                              |   |                         | 379,766   |   |   |   |   |   |   |   |   |   |   |   | 396,293 |   |   |   |   |   |   |   |   |   |   |   | 389,945 |   |   |   |   |   |   |   |   |   |
| Other      liabilities                                                                                              |   |                         | 18,224    |   |   |   |   |   |   |   |   |   |   |   | 27,657 |   |   |   |   |   |   |   |   |   |   |   | 23,722 |   |   |   |   |   |   |   |   |   |
| Shareholders'      equity                                                                                           |   |                         | 461,981   |   |   |   |   |   |   |   |   |   |   |   | 394,176 |   |   |   |   |   |   |   |   |   |   |   | 364,368 |   |   |   |   |   |   |   |   |   |
| TOTAL      LIABILITIES                                                                                              |   |                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      AND      CAPITAL                                                                      |   | $                            | 4,107,571 |   |   |   |   |   |   |   |   |   |   | $ | 3,470,564 |   |   |   |   |   |   |   |   |   |   | $ | 3,041,572 |   |   |   |   |   |   |   |   |   |
| NET      INTEREST INCOME                                                                                            |   |                         |      |   |   | $ | 168,351 |   |   |   |   |   |   |   |   |   |   | $ | 187,905 |   |   |   |   |   |   |   |   |   |   | $ | 164,181 |   |   |   |   |   |
| NET      YIELD ON INTEREST                                                                                          |   |                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      EARNING      ASSETS                                                                   |   |                         |      |   |   |   |   |   |   |   | 4.26 | % |   |   |   |   |   |   |   |   |   |   | 5.67 | % |   |   |   |   |   |   |   |   |   |   | 5.73 | % |
| (1)      Includes amounts to convert nontaxable amounts to a fully taxable      equivalent basis at a 35% tax rate. |   |                         |      |   |   |   |   |   |   |   |   |   |   |
| (2)      Includes nonaccruing loans.                                                                                |   |                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

Table of Contents 

|                                 |   | Year      ended December 31, |   |
|--------------------------------------|--------|------------------------------|--------|
|                                 |   | 2008      versus 2007        |   |   | 2007      versus 2006 |   |
|                                 |   | Increase      (Decrease) Due |   |   | Increase      (Decrease) Due |   |
|                                 |   | to      Change in            |   |   | to      Change in |   |
|                                 |   |                         |   |   |   |   |   | Total |   |   |   |   |   |   |   |   | Total |   |
|                                 |   | Average                      |   |   | Average |   |   | Increase |   |   | Average |   |   | Average |   |   | Increase |   |
|                                 |   | Volume                       |   |   | Rate |   |   | (Decrease) |   |   | Volume |   |   | Rate |   |   | (Decrease) |   |
| INTEREST      INCOME                 |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable      investments             |   | $                            | 1,263  |   |   | $ | (794 | ) |   | $ | 469 |   |   | $ | 292 |   |   | $ | 196 |   |   | $ | 488 |   |
| Nontaxable      investments          |   |                         | 152    |   |   |   | (52 | ) |   |   | 100 |   |   |   | (123 | ) |   |   | 26 |   |   |   | (97 | ) |
| Total                                |   |                         | 1,415  |   |   |   | (846 | ) |   |   | 569 |   |   |   | 169 |   |   |   | 222 |   |   |   | 391 |   |
|                                 |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal      funds sold              |   |                         | 562    |   |   |   | (1,063 | ) |   |   | (501 | ) |   |   | (514 | ) |   |   | 24 |   |   |   | (490 | ) |
|                                 |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Installment                          |   |                         | 554    |   |   |   | (824 | ) |   |   | (270 | ) |   |   | 187 |   |   |   | 132 |   |   |   | 319 |   |
| Commercial                           |   |                         | 4,780  |   |   |   | (6,492 | ) |   |   | (1,712 | ) |   |   | 1,408 |   |   |   | 1,355 |   |   |   | 2,763 |   |
| Real      estate                     |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                           |   |                         | 9,217  |   |   |   | (1,957 | ) |   |   | 7,260 |   |   |   | 1,658 |   |   |   | 2,305 |   |   |   | 3,963 |   |
| Construction                         |   |                         | 17,120 |   |   |   | (35,768 | ) |   |   | (18,648 | ) |   |   | 19,786 |   |   |   | 25 |   |   |   | 19,811 |   |
| Land      development                |   |                         | 13,569 |   |   |   | (21,566 | ) |   |   | (7,997 | ) |   |   | 16,523 |   |   |   | 358 |   |   |   | 16,881 |   |
| Completed      lots                  |   |                         | 3,432  |   |   |   | (6,816 | ) |   |   | (3,384 | ) |   |   | 2,709 |   |   |   | 337 |   |   |   | 3,046 |   |
| Residential      1-4 family          |   |                         | 6,913  |   |   |   | (2,640 | ) |   |   | 4,273 |   |   |   | 3,095 |   |   |   | 44 |   |   |   | 3,139 |   |
| Total      loans                     |   |                         | 55,585 |   |   |   | (76,063 | ) |   |   | (20,478 | ) |   |   | 45,366 |   |   |   | 4,556 |   |   |   | 49,922 |   |
|                                 |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL      INTEREST INCOME           |   |                         | 57,562 |   |   |   | (77,972 | ) |   |   | (20,410 | ) |   |   | 45,021 |   |   |   | 4,802 |   |   |   | 49,823 |   |
|                                 |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST      EXPENSE                |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Money      Market, Sweep &       |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW      accounts                    |   |                         | (4,345 | ) |   |   | (10,695 | ) |   |   | (15,040 | ) |   |   | 5,508 |   |   |   | 1,359 |   |   |   | 6,867 |   |
| Savings      accounts                |   |                         | 1,883  |   |   |   | (685 | ) |   |   | 1,198 |   |   |   | (2,473 | ) |   |   | (38 | ) |   |   | (2,511 | ) |
| Other      time deposits             |   |                         | 28,689 |   |   |   | (15,836 | ) |   |   | 12,853 |   |   |   | 11,775 |   |   |   | 7,423 |   |   |   | 19,198 |   |
| Total      interest bearing deposits |   |                         | 26,227 |   |   |   | (27,216 | ) |   |   | (989 | ) |   |   | 14,810 |   |   |   | 8,744 |   |   |   | 23,554 |   |
|                                 |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Short-term      borrowings           |   |                         | 1,608  |   |   |   | (2,258 | ) |   |   | (650 | ) |   |   | 1,017 |   |   |   | 285 |   |   |   | 1,302 |   |
| FHLB      borrowing                  |   |                         | 2,009  |   |   |   | (1,167 | ) |   |   | 842 |   |   |   | 1,656 |   |   |   | (449 | ) |   |   | 1,207 |   |
| Subordinated      debt               |   |                         | -      |   |   |   | (59 | ) |   |   | (59 | ) |   |   | 28 |   |   |   | 8 |   |   |   | 36 |   |
|                                 |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL      INTEREST EXPENSE          |   |                         | 29,844 |   |   |   | (30,700 | ) |   |   | (856 | ) |   |   | 17,511 |   |   |   | 8,588 |   |   |   | 26,099 |   |
|                                 |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CHANGE      IN NET INTEREST INCOME   |   | $                            | 27,718 |   |   | $ | (47,272 | ) |   | $ | (19,554 | ) |   | $ | 27,510 |   |   | $ | (3,786 | ) |   | $ | 23,724 |   |

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|                                           |   | Frontier      Financial Corporation |   |   | Frontier      Bank |   |   | Well      Capitalized Minimum |   |   | Adequately      Capitalized Minimum |   |
|------------------------------------------------|--------|-------------------------------------|--------|--------|--------------------|--------|--------|-------------------------------|--------|--------|-------------------------------------|--------|
| Total      capital to risk-weighted assets     |   |                                | 10.91  | %      |               |   | 10.55  | %                             |   |   | 10.00                               | %      |   |   | 8.00 | % |
| Tier      1 capital to risk-weighted assets    |   |                                | 9.64   | %      |               |   | 9.27   | %                             |   |   | 6.00                                | %      |   |   | 4.00 | % |
| Tier      1 leverage capital to average assets |   |                                | 8.62   | %      |               |   | 8.53   | %                             |   |   | 5.00                                | %      |   |   | 4.00 | % |

|                          |   | Payments      due per period |      |   |           |   |
|-------------------------------|--------|------------------------------|-----------|--------|----------------|--------|
|                          |   | Less      Than               |      |   |           |   |   |   |   |   |   |   |   |   |   |
|                          |   | One      Year                |      |   | 1-3      Years |   |   | 3-5      Years |   |   | Thereafter |   |   | Total |   |
| Time      deposits            |   | $                            | 1,882,705 |   |           | $      | 242,973 |   |   | $ | 61,133 |   |   | $ | 2,235 |   |   | $ | 2,189,046 |   |
| FHLB      borrowings          |   |                         | 68,146    |   |           |   | 65,786 |   |   |   | 200,485 |   |   |   | 95,000 |   |   |   | 429,417 |   |
| Junior      subordinated debt |   |                         | -         |   |           |   | - |   |   |   | - |   |   |   | 5,156 |   |   |   | 5,156 |   |
| Operating      leases         |   |                         | 1,900     |   |           |   | 2,979 |   |   |   | 1,731 |   |   |   | 1,064 |   |   |   | 7,674 |   |
| Total                         |   | $                            | 1,952,751 |   |           | $      | 311,738 |   |   | $ | 263,349 |   |   | $ | 103,455 |   |   | $ | 2,631,293 |   |

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|                                          |   | Amount |    |
|-----------------------------------------------|--------|--------|---------|
| Commitments      to extend credit             |   | $      | 484,407 |   |
| Credit      card arrangements                 |   |   | 44,537  |   |
| Standby      and commercial letters of credit |   |   | 18,133  |   |
|                                          |   | $      | 547,077 |   |

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| ITEM 7A. | QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKETRISK |
|----------|----------------------------------------------------------------|

|                     |   | 2009      Estimated Change |   |   | 2008      Estimated Change |   |   | 2007      Estimated Change |   |
|--------------------------|--------|----------------------------|--------|--------|----------------------------|--------|--------|----------------------------|--------|
| Rate      shock          |   |                       | (1.0   | %)     |                       |   | 2.0    | %                          |   |   | (1.0 | %) |   |   | 2.0 | % |   |   | (1.0 | %) |   |   | 2.0 | % |
| Net      interest income |   | NA                         |   |   | $                          | 488    |   |                       | $      | (974 | ) |   | $ | 4,837 |   |   | $ | (6,034 | ) |   | $ | 14,162 |   |
| Net      income          |   | NA                         |   |   |                       | 303    |   |                       |   | (643 | ) |   |   | 3,192 |   |   |   | (3,817 | ) |   |   | 9,004 |   |

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|                                                                         |   | Expected      Maturity Date |      |   | Fair   |   |
|------------------------------------------------------------------------------|--------|-----------------------------|-----------|--------|--------|--------|
|                                                                         |   | 2009                        |      |   | 2010   |   |   | 2011 |   |   | 2012 |   |   | 2013 |   |   | Thereafter |   |   | Total |   |   | Value |   |
| Financial      Assets                                                        |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and due from banks                                                 |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest      bearing                                                     |   | $                           | 52,022    |   |   | $      | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 52,022 |   |   | $ | 52,022 |   |
| Fed      Funds Sold                                                          |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Variable      Rate                                                           |   |                        | 117,740   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 117,740 |   |   |   | 117,740 |   |
| Weighted      average interest rate                                          |   |                        | 0.32      | %      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 0.32 | % |   |   |   |   |
| Securities      available for sale                                           |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed      Rate                                                              |   |                        | 11,223    |   |   |   | 1,858 |   |   |   | 37,013 |   |   |   | 5,069 |   |   |   | 5,000 |   |   |   | 34,016 |   |   |   | 94,179 |   |   |   | 90,606 |   |
| Weighted      average interest rate (1)                                      |   |                        | 1.94      | %      |   |   | 4.20 | % |   |   | 3.48 | % |   |   | 3.26 | % |   |   | 4.00 | % |   |   | 4.88 | % |   |   | 3.78 | % |   |   |   |   |
| Securities      held to maturity                                             |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed      Rate                                                              |   |                        | 574       |   |   |   | 752 |   |   |   | 235 |   |   |   | - |   |   |   | - |   |   |   | 1,524 |   |   |   | 3,085 |   |   |   | 3,341 |   |
| Weighted      average interest rate (1)                                      |   |                        | 4.80      | %      |   |   | 5.73 | % |   |   | 8.58 | % |   |   | - |   |   |   | - |   |   |   | 9.69 | % |   |   | 7.73 | % |   |   |   |   |
| Loans      Receivable, net                                                   |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed      Rate                                                              |   |                        | 354,775   |   |   |   | 155,664 |   |   |   | 172,951 |   |   |   | 168,825 |   |   |   | 321,352 |   |   |   | 79,270 |   |   |   | 1,252,837 |   |   |   | 1,195,274 |   |
| Weighted      average interest rate (2)                                      |   |                        | 7.01      | %      |   |   | 6.87 | % |   |   | 6.87 | % |   |   | 7.37 | % |   |   | 6.55 | % |   |   | 5.72 | % |   |   | 6.81 | % |   |   |   |   |
| Variable      Rate                                                           |   |                        | 1,835,193 |   |   |   | 117,182 |   |   |   | 36,096 |   |   |   | 64,908 |   |   |   | 129,579 |   |   |   | 336,260 |   |   |   | 2,519,218 |   |   |   | 2,519,218 |   |
| Weighted      average interest rate (2)                                      |   |                        | 6.72      | %      |   |   | 6.40 | % |   |   | 6.52 | % |   |   | 7.76 | % |   |   | 6.95 | % |   |   | 6.76 | % |   |   | 6.74 | % |   |   |   |   |
|                                                                         |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial      Liabilities                                                   |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest      bearing deposits                                            |   | $                           | 23,728    |   |   | $      | 22,303 |   |   | $ | 20,965 |   |   | $ | 19,707 |   |   | $ | 18,525 |   |   | $ | 290,223 |   |   | $ | 395,451 |   |   | $ | 395,451 |   |
| NOW,      Sweep and Money Market accounts                                    |   |                        | 26,044    |   |   |   | 23,961 |   |   |   | 22,044 |   |   |   | 20,280 |   |   |   | 18,658 |   |   |   | 214,567 |   |   |   | 325,554 |   |   |   | 325,554 |   |
| Weighted      average interest rate                                          |   |                        | 0.75      | %      |   |   | 0.75 | % |   |   | 0.75 | % |   |   | 0.75 | % |   |   | 0.75 | % |   |   | 0.75 | % |   |   | 0.75 | % |   |   |   |   |
| Savings      accounts                                                        |   |                        | 36,512    |   |   |   | 32,860 |   |   |   | 29,574 |   |   |   | 26,617 |   |   |   | 23,955 |   |   |   | 215,596 |   |   |   | 365,114 |   |   |   | 365,114 |   |
| Weighted      average interest rate                                          |   |                        | 1.74      | %      |   |   | 1.74 | % |   |   | 1.74 | % |   |   | 1.74 | % |   |   | 1.74 | % |   |   | 1.74 | % |   |   | 1.74 | % |   |   |   |   |
| Time      Certificates                                                       |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed      Rate                                                              |   |                        | 1,882,705 |   |   |   | 211,022 |   |   |   | 31,951 |   |   |   | 41,469 |   |   |   | 19,664 |   |   |   | 2,235 |   |   |   | 2,189,046 |   |   |   | 2,219,062 |   |
| Weighted      average interest rate                                          |   |                        | 3.54      | %      |   |   | 3.87 | % |   |   | 4.65 | % |   |   | 5.06 | % |   |   | 4.29 | % |   |   | 4.90 | % |   |   | 3.62 | % |   |   |   |   |
| Federal      funds purchased & securities                                |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       sold      under agreements to repurchase |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Variable      rate                                                           |   |                        | 21,616    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 21,616 |   |   |   | 21,616 |   |
| Weighted      average interest rate                                          |   |                        | 0.10      | %      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 0.10 | % |   |   |   |   |
| Subordinated      debt                                                       |   |                        | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5,156 |   |   |   | 5,156 |   |   |   | 1,676 |   |
| Weighted      average interest rate                                          |   |                        | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5.08 | % |   |   | 5.08 | % |   |   |   |   |
| FHLB      advances                                                           |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed      Rate                                                              |   |                        | 68,146    |   |   |   | 65,786 |   |   |   | - |   |   |   | 100,485 |   |   |   | 100,000 |   |   |   | 95,000 |   |   |   | 429,417 |   |   |   | 444,441 |   |
| Weighted      average interest rate                                          |   |                        | 3.53      | %      |   |   | 3.95 | % |   |   | - |   |   |   | 4.55 | % |   |   | 3.04 | % |   |   | 4.42 | % |   |   | 3.91 | % |   |   |   |   |
|                                                                         |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1)      Represents tax equivalent yield                                     |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        (2) Represents weighted note rates exclusive of loan fees        |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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|                                                                           |   | 2009   |      |   | 2010   |   |    | 2011   |   |   | 2012    |   |   | 2013   |    |   | Thereafter |   |    | Total  |   |
|--------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|------------|--------|---------|--------|--------|
| ASSETS                                                                         |   |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |       |   |    |   |   |
| Loans      (1) (2)                                                             |   | $      | 2,465,959 |   |   | $      | 253,990 |   |   | $      | 282,413 |   |   | $      | 240,679 |   |       | $      | 463,284 |   |   | $ | 65,730 |   |   | $ | 3,772,055 |   |
|   Yield                                                              |   |   | 6.72      | %      |   |   | 6.93    | %      |   |   | 6.98    | %      |   |   | 7.34    | %      |       |   | 6.55    | %      |   |   | 6.39 | % |   |   | 6.77 | % |
| Investments      (2) (3)                                                       |   |   | 17,113    |   |   |   | 2,610   |   |   |   | 37,568  |   |   |   | 5,069   |   |       |   | 5,000   |   |   |   | 29,904 |   |   |   | 97,264 |   |
|   Yield                                                              |   |   | 2.08      | %      |   |   | 4.62    | %      |   |   | 3.47    | %      |   |   | 2.72    | %      |       |   | 4.00    | %      |   |   | 5.95 | % |   |   | 4.21 | % |
| Fed      funds sold                                                            |   |   | 117,740   |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |       |   | -       |   |   |   | - |   |   |   | 117,740 |   |
|   Yield                                                              |   |   | 0.32      | %      |   |   | -       |   |   |   | -       |   |   |   | -       |   |       |   | -       |   |   |   | - |   |   |   | 0.32 | % |
| Total      earning assets                                                      |   | $      | 2,600,812 |   |   | $      | 256,600 |   |   | $      | 319,981 |   |   | $      | 245,748 |   |       | $      | 468,284 |   |   | $ | 95,634 |   |   | $ | 3,987,059 |   |
|   Yield                                                              |   |   | 6.40      | %      |   |   | 6.91    | %      |   |   | 6.57    | %      |   |   | 7.25    | %      |       |   | 6.53    | %      |   |   | 6.25 | % |   |   | 6.51 | % |
|                                                                           |   |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |       |   |    |   |   |   |   |   |   |   |   |   |
| LIABILITIES                                                                    |   |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |       |   |    |   |   |   |   |   |   |   |   |   |
| NOW,      money market,                                                        |   |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |       |   |    |   |   |   |   |   |   |   |   |   |
|       and      sweep accounts                    |   | $      | 152,064   |   |   | $      | 8,826   |   |   | $      | 8,826   |   |   | $      | 8,826   |   |       | $      | 8,826   |   |   | $ | 138,186 |   |   | $ | 325,554 |   |
|   Cost                                                               |   |   | 0.75      | %      |   |   | 0.75    | %      |   |   | 0.75    | %      |   |   | 0.75    | %      |       |   | 0.75    | %      |   |   | 0.75 | % |   |   | 0.75 | % |
| Savings                                                                        |   |   | 42,940    |   |   |   | 42,941  |   |   |   | 42,941  |   |   |   | 42,941  |   |       |   | 33,626  |   |   |   | 159,725 |   |   |   | 365,114 |   |
|   Cost                                                               |   |   | 1.74      | %      |   |   | 1.74    | %      |   |   | 1.74    | %      |   |   | 1.74    | %      |       |   | 1.74    | %      |   |   | 1.74 | % |   |   | 1.74 | % |
| Time      deposits                                                             |   |   | 1,882,705 |   |   |   | 211,022 |   |   |   | 31,951  |   |   |   | 41,469  |   |       |   | 19,664  |   |   |   | 2,235 |   |   |   | 2,189,046 |   |
|   Cost                                                               |   |   | 3.54      | %      |   |   | 3.87    | %      |   |   | 4.65    | %      |   |   | 5.06    | %      |       |   | 4.29    | %      |   |   | 4.90 | % |   |   | 3.62 | % |
| Fed      funds purchased                                                       |   |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |       |   |    |   |   |   |   |   |   |   |   |   |
|      and      repurchase agreements                   |   |   | 21,616    |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |       |   | -       |   |   |   | - |   |   |   | 21,616 |   |
|   Cost                                                               |   |   | 0.10      | %      |   |   | -       |   |   |   | -       |   |   |   | -       |   |       |   | -       |   |   |   | - |   |   |   | 0.10 | % |
| Subordinated      debt                                                         |   |   | -         |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |       |   | -       |   |   |   | 5,156 |   |   |   | 5,156 |   |
|   Cost                                                               |   |   | -         |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |       |   | -       |   |   |   | 5.08 | % |   |   | 5.08 | % |
| FHLB      borrowings                                                           |   |   | 68,146    |   |   |   | 65,786  |   |   |   | -       |   |   |   | 100,485 |   |       |   | 100,000 |   |   |   | 95,000 |   |   |   | 429,417 |   |
|   Cost                                                               |   |   | 3.53      | %      |   |   | 3.95    | %      |   |   | -       |   |   |   | 4.55    | %      |       |   | 3.04    | %      |   |   | 4.42 | % |   |   | 3.91 | % |
| Total      interest bearing liabilities                                        |   | $      | 2,167,471 |   |   | $      | 328,575 |   |   | $      | 83,718  |   |   | $      | 193,721 |   |       | $      | 162,116 |   |   | $ | 400,302 |   |   | $ | 3,335,903 |   |
|   Cost                                                               |   |   | 3.27      | %      |   |   | 3.53    | %      |   |   | 2.75    | %      |   |   | 3.86    | %      |       |   | 2.80    | %      |   |   | 2.03 | % |   |   | 3.15 | % |
|                                                                           |   |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |       |   |    |   |   |   |   |   |   |   |   |   |
| GAP                                                                            |   | $      | 433,341   |   |   | $      | (71,975 | )      |   | $      | 236,263 |   |   | $      | 52,027  |   |       | $      | 306,168 |   |   | $ | (304,668 | ) |   | $ | 651,156 |   |
|                                                                           |   |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |       |   |    |   |   |   |   |   |   |   |   |   |
| (1)      Loan fees and costs are included in balance but not in the      yield |   |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |       |   |    |   |   |
| (2)      Taxable equivalent                                                    |   |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |       |   |    |   |   |   |   |   |   |   |   |   |
| (3)      Amortized cost                                                        |   |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |       |   |    |   |   |   |   |   |   |   |   |   |

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Table of Contents 

| ITEM 8. | FINANCIAL      STATEMENTS AND SUPPLEMENTARYDATA |
|---------|-------------------------------------------------|

| ITEM 9. | CHANGES      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL      DISCLOSURE |
|---------|------------------------------------------------------------------------------------------------|

| ITEM 9A. | CONTROLS      AND PROCEDURES |
|----------|------------------------------|

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Table of Contents 

| ITEM 9B. | OTHER      INFORMATION |
|----------|------------------------|

PART III

| ITEM 10. | DIRECTORS,      EXECUTIVE OFFICERS AND CORPORATEGOVERNANCE |
|----------|------------------------------------------------------------|

| ITEM 11. | EXECUTIVE      COMPENSATION |
|----------|-----------------------------|

|                                                    |   | Number      of securities to be issued upon exercise of outstanding options, warrants      and rights |      |   | Weighted      average exercise price of outstanding options, warrants and      rights |   |   | Number      of securities remaining available for future issuance under equity      compensation plans (excluding securities reflected in the first      column) |   |
|---------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------|-----------|--------|---------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Equity      compensation plans approved by              |   |                                                                                                  | 1,374,734 |   |                                                                                  | $      | 16.69  |                                                                                                                                                             |   |   | 4,378,358 |   |
| security      holders (A)                               |   |                                                                                                  |      |   |                                                                                  |   |   |                                                                                                                                                             |   |   |   |   |
| Equity      compensation plans not approved by          |   |                                                                                                  | 9,256     |   |                                                                                  |   | N/A    |                                                                                                                                                             |   |   | 35,744 |   |
| security      holders (B)                               |   |                                                                                                  | 1,383,990 |   |                                                                                  |   |   |                                                                                                                                                             |   |   | 4,414,102 |   |
|                                                    |   |                                                                                                  |      |   |                                                                                  |   |   |                                                                                                                                                             |   |   |   |   |
|                                                    |   |                                                                                                  |      |   |                                                                                  |   |   |                                                                                                                                                             |   |   |   |   |
| (A)      Consists of FFC Incentive Stock Options Plan   |   |                                                                                                  |      |   |                                                                                  |   |   |                                                                                                                                                             |   |   |   |   |
| (B)      Consists of FFC 1999 Employee Stock Award Plan |   |                                                                                                  |      |   |                                                                                  |   |   |                                                                                                                                                             |   |   |   |   |

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Table of Contents 

| ITEM 12. | SECURITY      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED      SHAREHOLDER MATTERS |
|----------|----------------------------------------------------------------------------------------------------------|

| ITEM 13. | CERTAIN      RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR      INDEPENDENCE |
|----------|------------------------------------------------------------------------------------|

| ITEM 14. | PRINCIPAL      ACCOUNTANT FEES ANDSERVICES |
|----------|--------------------------------------------|

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Table of Contents 

PART IV

| ITEM 15. | EXHIBITS      AND FINANCIAL STATEMENTSCHEDULES |
|----------|------------------------------------------------|

See Exhibit Index on page 50.

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Table of Contents 

SIGNATURES

|                |   | FRONTIER      FINANCIAL CORPORATION       |
|---------------------|--------|-------------------------------------------|
| March      10, 2009 |   |        /s/ Patrick M. Fahey          |   |
|                |   | Patrick      M. Fahey                     |
|                |   | Chairman      and Chief Executive Officer |

| March      10, 2009 |   |        /s/ Patrick M. Fahey                  |   |
|---------------------|--------|---------------------------------------------------|--------|
|                |   | Patrick      M. Fahey                             |   |
|                |   | Chairman      and Chief Executive Officer         |   |
|                |   | (Principal      Executive Officer)                |   |
|                |   |                                              |   |
| March      10, 2009 |   |        /s/ Carol E. Wheeler                  |   |
|                |   | Carol      E. Wheeler                             |   |
|                |   | Chief      Financial Officer                      |   |
|                |   | (Principal      Financial and Accounting Officer) |   |
|                |   |                                              |   |
| March      10, 2009 |   |        /s/ Michael J. Clementz               |   |
|                |   | Michael      J. Clementz, Director                |   |
|                |   |                                              |   |
| March      10, 2009 |   |        /s/ David M. Cuthill                  |   |
|                |   | David      M. Cuthill, Director                   |   |
|                |   |                                              |   |
| March      10, 2009 |   |        /s/ Lucy DeYoung                      |   |
|                |   | Lucy      DeYoung, Director                       |   |
|                |   |                                              |   |
| March      10, 2009 |   |        /s/ John J. Dickson                   |   |
|                |   | John      J. Dickson, Director                    |   |
|                |   |                                              |   |
| March      10, 2009 |   |        /s/ Edward D. Hansen                  |   |
|                |   | Edward      D. Hansen, Director                   |   |
|                |   |                                              |   |
| March      10, 2009 |   |        /s/ Edward C. Rubatino                |   |
|                |   | Edward      C. Rubatino, Director                 |   |
|                |   |                                              |   |
| March      10, 2009 |   |        /s/ Darrell J. Storkson               |   |
|                |   | Darrell      J. Storkson, Director                |   |
|                |   |                                              |   |
| March      10, 2009 |   |        /s/ Mark O. Zenger                    |   |
|                |   | Mark      O. Zenger, Director                     |   |

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Table of Contents 

EXHIBIT INDEX

|   | (3     | )(a)   | Articles      of Incorporation of Frontier Financial Corporation are incorporated herein      by reference to Appendix A     |
|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------|
|   |   |   | to      the registrant's definitive Proxy Statement on Schedule 14A filed on March      20, 1998 (File No. 000-15540).       |
|   |   |   |                                                                                                                         |
|   | (3     | )(b)   | By-laws      of Frontier Financial Corporation are incorporated herein by reference to      Exhibit 3(ii) to Form 10-Q filed |
|   |   |   | on      October 29, 2003.                                                                                                    |
|   |   |   |                                                                                                                         |
|   | *      | (10    | )(a)                                                                                                                         | Amended      and Restated Frontier Financial Corporation Incentive Stock Option Plan      incorporated by reference |
|   |   |   |                                                                                                                         | to      Exhibit 99.1 to Registration Statement on Form S-8, filed March 27, 1998      (File No. 333-48805). |
|   |   |   |                                                                                                                         |   |
|   | *      | (10    | )(b)                                                                                                                         | Frontier      Financial Corporation 1999 Employee Stock Award Plan is incorporated      herein by reference to Exhibit 99.1 |
|   |   |   |                                                                                                                         | to      Registration Statement on Form S-8, filed March 2, 1999 (File No.      333-73217). |
|   |   |   |                                                                                                                         |   |
|   | *      | (10    | )(c)                                                                                                                         | Frontier      Financial Corporation 2001 Stock Award Plan is incorporated herein by      reference to Exhibit 99.1 |
|   |   |   |                                                                                                                         | to      Registration Statement on Form S-8, filed January 26, 2001 (File No.      333-54362). |
|   |   |   |                                                                                                                         |   |
|   | *      | (10    | )(d)                                                                                                                         | Frontier      Financial Corporation Employee Stock Option Plan and Interbancorp, Inc.      Director Stock Option Plan is |
|   |   |   |                                                                                                                         | incorporated      herein by reference to Exhibit 10.1 to Registration Statement on Form S-8,      filed January 26, 2001 |
|   |   |   |                                                                                                                         | (File      No. 333-37242). |
|   |   |   |                                                                                                                         |   |
|   | *      | (10    | )(e)                                                                                                                         | Interbancorp,      Inc. Employee Stock Option Plan and Interbancorp, Inc. Director Stock      Option Plan is incorporated |
|   |   |   |                                                                                                                         | herein      by reference to Exhibit 10.1 to Registration Statement on Form S-8, filed      February 13, 2001 |
|   |   |   |                                                                                                                         | (File      No. 333-50882). |
|   |   |   |                                                                                                                         |   |
|   | *      | (10    | )(f)                                                                                                                         | Frontier      Financial Corporation Employee Stock Option Plan and NorthStar Bank      Employee Stock Option Plan, |
|   |   |   |                                                                                                                         | NorthStar      Bank 1994 Employee Stock Option Plan and NorthStar Director Nonqualified      Stock Option Plan are |
|   |   |   |                                                                                                                         | incorporated      herein by reference to Exhibit 10.1 to Registration Statement on Form S-8,      filed March 16, 2006 |
|   |   |   |                                                                                                                         | (File      No. 333-132487). |
|   |   |   |                                                                                                                         |   |
|   | *      | (10    | )(g)                                                                                                                         | Frontier      Financial Corporation 2006 Stock Incentive Plan is incorporated herein by      reference to Exhibit 99.1 to |
|   |   |   |                                                                                                                         | Registration      Statement on Form S-8, filed August 4, 2006 (File No.      333-136298). |
|   |   |   |                                                                                                                         |   |
|   | *      | (10    | )(h)                                                                                                                         | Change      of Control Agreement with John J. Dickson is incorporated herein by      reference to Exhibit 10.1 to |
|   |   |   |                                                                                                                         | Current      Report on Form 8-K, filed January 19, 2006 (File No.      000-15540). |
|   |   |   |                                                                                                                         |   |
|   | *      | (10    | )(i)                                                                                                                         | Change      of Control Agreements with other executive officers. |
|   |   |   |                                                                                                                         |   |
|   |   | (13    | )                                                                                                                            | Portions of the Annual Report to Shareholders for the year      ended December 31, 2008, are incorporated by |
|   |   |   |                                                                                                                         | herein by reference. |
|   |   |   |                                                                                                                         |   |
|   | **     | (14    | )                                                                                                                            | Code      of Ethics for senior financial officers. |
|   |   |   |                                                                                                                         |   |
|   |   | (21    | )                                                                                                                            | Subsidiaries of Registrant. |
|   |   |   |                                                                                                                         |   |
|   |   | (23.1  | )                                                                                                                            | Consent of Moss Adams LLP, Independent Registered Public      Accounting Firm. |
|   |   |   |                                                                                                                         |   |
|   |   | (31.1  | )                                                                                                                            | 302 Certification of Chief Executive      Officer. |
|   |   |   |                                                                                                                         |   |
|   |   | (31.2  | )                                                                                                                            | 302 Certification of Chief Financial      Officer. |
|   |   |   |                                                                                                                         |   |
|   |   | (32    | )                                                                                                                            | Certification pursuant to 28 U.S.C Section 1350, as      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of      2002. |
|   |   |   |                                                                                                                         |   |
|   |   | *      |                                                                                                                         | Compensatory      plan or arrangement. |
|   |   | **     |                                                                                                                         | Previously      filed. |

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