----

|   | (Mark      One) |
|--------|-----------------|

|   | x | Annual      report pursuant to Section 13 or 15(d) of the Securities Exchange Act of      1934 for the fiscal year ended December 31,  2009. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Transition      report pursuant to Section 13 or 15(d) of the Securities Exchange Act of      1934 for the transition period      from                   to                . |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Pennsylvania                                                                       |                                           | 23-2210237                                    |
|------------------------------------------------------------------------------------|------------------------------------------------|-----------------------------------------------|
| (State      or other jurisdiction ofincorporation      or organization)            |                                           | (I.R.S.      EmployerIdentification      No.) |
| 483      Main Street,Harleysville,      Pennsylvania                               |                                           | 19438                                         |
| (Address      of principal executive offices)                                      |                                           | (Zip      Code)                               |
| Registrant’s      telephone number, including area code: (215)      256-8851 |
| Securities      registered pursuant to Section 12(b) of the  Act:        |
| Title of Each Class                                                                | Name of Each Exchange on Which      Registered |
| Common      Stock, $1.00 par value                                                 | The      NASDAQ Stock Market LLC               |
| Securities      registered pursuant to Section 12(g) of the Act:              |
| None                                                                               |

| Large      accelerated filer o | Accelerated      filer x | Non-accelerated      filer o                       | Smaller      reporting company o |
|--------------------------------|--------------------------|----------------------------------------------------|----------------------------------|
|                           |                     | (Do      not check if a smaller reporting company) |                             |

|   | None. |
|--------|-------|

----

|          |                                                                                                                         | Page   |   |
|---------------|------------------------------------------------------------------------------------------------------------------------------|--------|--------|
| Part I   |                                                                                                                         | 4      |   |
| Item      1.  | Business                                                                                                                     |   | 4      |   |
| Item      1A. | Risk      Factors                                                                                                            |   | 12     |   |
| Item      1B. | Unresolved      Staff Comments                                                                                               |   | 20     |   |
| Item      2.  | Properties                                                                                                                   |   | 21     |   |
| Item      3.  | Legal      Proceedings                                                                                                       |   | 23     |   |
| Item      4.  | (Removed      and Reserved)                                                                                                  |   | 24     |   |
| Part II  |                                                                                                                         | 24     |   |
| Item      5.  | Market      for Registrant’s Common Equity, Related Stockholder Matters and Issuer      Purchases of Equity Securities |   | 24     |   |
| Item      6.  | Selected      Financial Data                                                                                                 |   | 27     |   |
| Item      7.  | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations                        |   | 28     |   |
| Item 7A. | Quantitative      and Qualitative Disclosures About Market Risk                                                              |   | 58     |   |
| Item      8.  | Financial      Statements and Supplementary Data                                                                             |   | 59     |   |
| Item      9.  | Changes      in and Disagreements With Accountants on Accounting and Financial      Disclosure                               |   | 124    |   |
| Item 9A. | Controls      and Procedures                                                                                                 |   | 124    |   |
| Item 9B. | Other      Information                                                                                                       |   | 126    |   |
| Part III |                                                                                                                         | 127    |   |
| Item      10. | Directors,      Executive Officers and Corporate Governance                                                                  |   | 127    |   |
| Item      11. | Executive      Compensation                                                                                                  |   | 134    |   |
| Item      12. | Security      Ownership of Certain Beneficial Owners and Management and Related      Stockholder Matters                     |   | 163    |   |
| Item      13. | Certain      Relationships and Related Transactions, and Director      Independence                                          |   | 165    |   |
| Item      14. | Principal      Accountant Fees and Services                                                                                  |   | 166    |   |
| Part IV  |                                                                                                                         | 167    |   |
| Item      15. | Exhibits      and Financial Statement Schedules                                                                              |   | 167    |   |

|   |        Signatures |   | 168 |   |
|--------|------------------------|--------|-----|--------|

----

----

| Item 1. | Business |
|---------|----------|

----

----

|   | Concentrations/Seasonality |
|--------|----------------------------|

|   | Supervision      and Regulation—The Registrant |
|--------|------------------------------------------------------|

|   | Effects      of Inflation |
|--------|---------------------------|

----

|   | Effect      of Government Monetary Policies |
|--------|---------------------------------------------|

|   | Environmental      Regulations |
|--------|--------------------------------|

|   | Supervision      and Regulation—Bank |
|--------|--------------------------------------------|

----

|   | Community      Reinvestment Act |
|--------|---------------------------------|

|   | Bank      Secrecy Act |
|--------|-----------------------|

|   | Capital      Requirements / FDICIA |
|--------|------------------------------------|

|                                |   | TotalRiskBasedRatio                                   |   | Tier 1RiskBasedRatio |   | Tier 1LeverageRatio |      | Under aCapitalOrderorDirective |   |
|-------------------------------------|--------|-------------------------------------------------------|--------|---------------------------|--------|--------------------------|-----------|-------------------------------------|--------|
| Capital      category               |   |                                                  |   |                      |   |                     |      |                                |   |   |   |   |   |
| Well      capitalized               |   | ³10.0%                                           |   | ³6.0%                |   |                     | ³5.0 | %                                   |   |   | YES |   |   |
| Adequately      capitalized         |   | ³8.0%                                            |   | ³4.0%                |   |                     | ³4.0 | %(1)                                |   |   |   |   |   |
| Undercapitalized                    |   | <8.0%                                              |   | <4.0%                  |   |                     | <4.0   | %(1)                                |   |   |   |   |   |
| Significantly      undercapitalized |   | <6.0%                                              |   | <3.0%                  |   |                     | <3.0   | %                                   |   |   |   |   |   |
| Critically      undercapitalized    |   | Tangible      equity capital ratio that is ≤ 2% |   |

| (1) | 3.0%      for those banks having the highest available regulatory      rating. |
|-----|--------------------------------------------------------------------------------|

----

----

|   | Capital      Distributions |
|--------|----------------------------|

|   | Deposit      Insurance and Premiums |
|--------|-------------------------------------|

----

|   | Sarbanes-Oxley      Act of 2002 |
|--------|---------------------------------|

|   | USA      Patriot Act |
|--------|----------------------|

|   | Supervision      and Regulation - CornerstoneCompanies |
|--------|--------------------------------------------------------|

----

|   | Changes      in Regulations |
|--------|-----------------------------|

| Item      1A. | Risk      Factors |
|---------------|-------------------|

|   | Interest      rate movements impact the earnings of the  Corporation. |
|--------|-----------------------------------------------------------------------|

----

----

----

|   | Strong      competition within the Corporation’s market area may limit its growth and      profitability. |
|--------|-----------------------------------------------------------------------------------------------------------------|

----

|   | • |   | Harleysville      National Corporation’s businesses may have been adversely impacted by the      failure to pursue other beneficial opportunities due to the focus of      management on the merger, without realizing any of the anticipated      benefits of completing the merger; and |
|--------|---------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • |   | the      market price of Harleysville National Corporation common stock might      decline to the extent that the current market price reflects a market      assumption that the merger will becompleted.                                                                                      |

----

----

----

----

| Item      1B. | Unresolved      Staff Comments |
|---------------|--------------------------------|

----

| Item    2. | Properties |
|------------|------------|

| Office                    |   | Office      Location                                   |   | Owned/Leased |
|---------------------------|--------|--------------------------------------------------------|--------|--------------|
| Airport      Village      |   | 102      Airport Road, Coatesville, PA                 |   | Leased       |
| Allentown                 |   | 1602      Allen Street, Allenton, PA                   |   | Leased       |
| Audubon                   |   | 2624      Egypt Road, Norristown, PA                   |   | Owned(2)     |
| Avondale                  |   | 119      Pennsylvania Avenue, Avondale, PA             |   | Owned        |
| Bethlehem                 |   | 4510      Bath Pike, Bethlehem, PA                     |   | Leased       |
| Blue      Bell            |   | 20      West Skippack Pike, Ambler PA                  |   | Owned(2)     |
| Boyertown                 |   | Rt.      100 and Bause Road, Boyertown, PA             |   | Leased       |
| Brandywine      Square    |   | 82      Quarry Road, Downingtown, PA                   |   | Leased       |
| Bustleton                 |   | 9869      Bustleton Avenue, Philadelphia, PA           |   | Leased       |
| Cedar      Crest          |   | 1251      S Cedar Crest Blvd, Allentown, PA            |   | Leased       |
| Chalfont                  |   | 251      West Butler Avenue, Chalfont, PA              |   | Leased       |
| Coatesville               |   | 112      East Lincoln Highway, Coatesville, PA         |   | Leased       |
| Collegeville              |   | 364      East Main Street, Collegeville, PA            |   | Owned        |
| Conshohocken              |   | 101      Ridge Pike, Conshohocken, PA                  |   | Owned(2)     |
| Devon                     |   | 414      Lancaster Avenue, Devon, PA                   |   | Leased       |
| Dorneyville               |   | 3570      Hamilton Boulevard, Allentown, PA            |   | Leased       |
| Douglassville             |   | 1191      West Ben Franklin Highway, Douglassville, PA |   | Leased       |
| Downingtown               |   | 100      E. Lancaster Avenue, Downingtown, PA          |   | Leased       |
| Doylestown                |   | 500      East Farm Lane, Doylestown, PA                |   | Owned(2)     |
| Dresher                   |   | 701      Twining Road, Dresher, PA                     |   | Leased       |
| Eagle                     |   | 300      Simpson Drive, Chester Springs, PA            |   | Leased       |
| East      Norriton        |   | 450      East Germantown Pike, East Norriton, PA       |   | Owned(2)     |
| Emmaus                    |   | 731      Chestnut St, Emmaus, PA                       |   | Owned        |
| Emmaus                    |   | 502      State Ave, Emmaus, PA                         |   | Owned        |
| Emmaus      High School   |   | 500      Macungie Ave, Emmaus, PA                      |   | Leased       |
| Exton                     |   | 601      N. Pottstown Pike, Exton, PA                  |   | Leased       |
| Feasterville              |   | 220      East Street Road, Feasterville, PA            |   | Leased       |
| Flourtown                 |   | 1851      Bethlehem Pike, Flourtown, PA                |   | Leased       |
| Fogelsville               |   | 861      N. Rt. 100, Fogelsville, PA                   |   | Owned        |
| Foulkeways                |   | 1120      Meetinghouse Road, Gwynedd, PA               |   | Leased       |
| Frazer                    |   | 200      West Lancaster Avenue, Frazer, PA             |   | Leased(3)    |
| Gilbertsville             |   | 1050      East Philadelphia Avenue, Gilbertsville, PA  |   | Leased       |
| Harleysville      Campus  |   | 483      Main Street, Harleysville, PA                 |   | Leased       |
| Harleysville-Meadowbrook  |   | 278      Main Street, Harleysville, PA                 |   | Owned(2)     |
| Hatboro                   |   | 2      North York Road, Hatboro, PA                    |   | Leased       |
| Hatfield                  |   | 1632      Cowpath Road, Hatfield, PA                   |   | Leased       |
| Horsham                   |   | 955      Horsham Road, Horsham, PA                     |   | Leased       |
| Huntington      Valley    |   | 761      Huntingdon Pike, Huntingdon Valley, PA        |   | Leased       |
| Kennett      Square       |   | 838      East Baltimore Pike, Kennett Square, PA       |   | Owned(5)     |
| King      of Prussia      |   | 170      S. Warner Road, Suite 100, Wayne, PA          |   | Leased       |
| Kresgeville               |   | Route      209, Kresgeville, PA                        |   | Leased       |
| Lansdale-Marketplace      |   | 1551      Valley Forge Road, Lansdale, PA              |   | Owned(2)     |
| Lansdale-North      Broad |   | 1804      North Broad Street, Lansdale, PA             |   | Leased       |
| Lansford                  |   | 13-15      West Ridge Street, Lansford, PA             |   | Leased       |
| Lehigh      Township      |   | 4421      Lehigh Drive, Walnutport, PA                 |   | Leased       |

----

| Office                                                                   |   |        Office Location                       |   | Owned/Leased      |
|--------------------------------------------------------------------------|--------|---------------------------------------------------|--------|-------------------|
| Lehighton                                                                |   | 904      Blakeslee Blvd, Lehighton, PA            |   | Leased            |
| Limerick                                                                 |   | 260      West Ridge Pike, Limerick, PA            |   | Leased            |
| Macungie                                                                 |   | 201      W Main St, Macungie, PA                  |   | Owned(2)          |
| Malvern(1)                                                               |   | 30      Valley Stream Parkway, Malvern, PA        |   | Leased            |
| Maple      Glen                                                          |   | 732      Norristown Road, Maple Glen, PA          |   | Leased            |
| Meadowood                                                                |   | 3205      Skippack Pike, Worcester, PA            |   | Leased            |
| Mertztown                                                                |   | 951      State Street, Mertztown, PA              |   | Leased            |
| Normandy      Farms                                                      |   | Morris      Road & Route 202, Blue Bell, PA   |   | Leased            |
| North      Wales (North Penn)                                            |   | 1498      North Wales Road, North Wales, PA       |   | Leased            |
| North      Wales                                                         |   | 122      N. Main Street, North Wales, PA          |   | Leased            |
| Oxford                                                                   |   | 499      North 3rd      Street, Oxford, PA        |   | Leased            |
| Palmerton                                                                |   | 372      Delaware Avenue, Palmerton, PA           |   | Leased            |
| Peter      Becker Community                                              |   | 815      Maplewood Drive, Harleysville, PA        |   | Leased            |
| Pottstown      Center                                                    |   | Rt.      100 and Shoemaker Road, Pottstown, PA    |   | Owned(2)          |
| Pottstown-Coventry                                                       |   | 2      Glocker Way, Pottstown, PA                 |   | Owned(2)          |
| Pottstown-East      End                                                  |   | 1450      East High Street, Pottstown, PA         |   | Owned(2)          |
| Pottstown-North      End                                                 |   | 930      North Charlotte Street, Pottstown, PA    |   | Leased            |
| Pottstown-Train      Station                                             |   | One      Security Plaza, Pottstown, PA            |   | Leased            |
| Quakertown      Main                                                     |   | 224      West Broad Street, Quakertown, PA        |   | Owned             |
| Red      Hill                                                            |   | 400      Main Street, Red Hill, PA                |   | Leased            |
| Roslyn      Valley                                                       |   | 1331      Easton Road, Roslyn, PA                 |   | Leased            |
| Royersford                                                               |   | 440      W. Linfield-Trappe Road, Royersford, PA  |   | Owned(2)          |
| Sellersville                                                             |   | 209      North Main Street, Sellersville, PA      |   | Leased            |
| Skippack                                                                 |   | 3893      Skippack Pike, Skippack, PA             |   | Leased            |
| Slatington                                                               |   | 502      Main Street, Slatington, PA              |   | Leased            |
| Slatington      Handi-Bank                                               |   | 701-705      Main Street, Slatington, PA          |   | Leased            |
| Somerton                                                                 |   | 11730      Bustleton Avenue, Philadelphia, PA     |   | Leased            |
| Souderton                                                                |   | 702      Route 113, Souderton, PA                 |   | Owned(2)          |
| Southampton                                                              |   | 735      Davisville Road, Southampton, PA         |   | Leased            |
| Spring      House(1)                                                     |   | 1017      North Bethlehem Pike, Spring House, PA  |   | Leased            |
| Summit      Hill                                                         |   | 2      East Ludlow Street, Summit Hill, PA        |   | Leased            |
| Thorndale                                                                |   | 3909      Lincoln Highway, Downingtown, PA        |   | Leased            |
| Trainers      Corner                                                     |   | 120      North West End Boulevard, Quakertown, PA |   | Leased            |
| Trexlertown                                                              |   | 6890      Hamilton Blvd, Trexlertown, PA          |   | Owned             |
| Warminster                                                               |   | 190      Veterans Way, Warminster, PA             |   | Owned(2)          |
| Warminster      Square                                                   |   | 1555      West Street Road, Warminster, PA        |   | Leased            |
| West      Chester                                                        |   | 16      E. Market Street, West Chester, PA        |   | Leased            |
| Westtown                                                                 |   | 1197      Wilmington Pike, West Chester, PA       |   | Leased            |
| Whitehall                                                                |   | 2985      MacArthur Rd, Whitehall, PA             |   | Owned             |
| Willow      Grove                                                        |   | 9      Easton Road, Willow Grove, PA              |   | Owned(4)      (5) |
| Wyomissing(1)                                                            |   | 2800      State Hill Road, Wyomissing, PA         |   | Leased            |
|                                                                     |   |                                              |   |              |
| Additional      Office Space                                             |   |                                              |   |              |
| Commercial      Business   Development                    |   | 650      Sentry Parkway, Blue Bell, Pa            |   | Leased            |
| Harleysville      National Bank  Trust      Department(1)      |   | 1690      Sumneytown Pike, Lansdale, PA           |   | Leased            |
| Cornerstone      Financial  Consultants                        |   | 1802      Hamilton, Allentown  PA       |   | Leased            |
| Cornerstone      Financial  Consultants      – McPherson |   | 8320      Bellona Ave, Towson, MD                 |   | Leased            |

----

| Office                                                 |   |  Office Location                    |   | Owned/Leased |
|--------------------------------------------------------|--------|------------------------------------------|--------|--------------|
| Cornerstone      Institutional  Investments  |   | 74      West Broad St, Bethlehem, PA     |   | Leased       |
| Cornerstone      Advisor Asset  Management   |   | 74      West Broad St., Bethlehem, PA    |   | Leased       |
| HNC      Financial Company                             |   | 2751      Centerville Rd, Wilmington, DE |   | Leased       |
| HNC      Reinsurance Company                           |   | 101      North First Avenue, Phoenix, AZ |   | Leased       |
| Harleysville      Management   Services |   | 474      Main St, Harleysville, Pa       |   | Owned        |
| BeneServ,      Inc.                                    |   | 453      Baltimore Pike, Springfield, Pa |   | Leased       |

| (1)   | Locations      include Millennium Wealth Management and Private Banking      offices. |
|-----------------|---------------------------------------------------------------------------------------|

| (2)   | Branch      buildings are owned by the Bank and the land is  leased. |
|-----------------|----------------------------------------------------------------------|

| (3)   | The      branch facility at this location is owned.  There is also a      drive-up facility at this location that is  leased. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Includes      the lease of an easement at thislocation. |
|-----------------|---------------------------------------------------------|

| (5)   | Branch      buildings are rented but land isowned. |
|-----------------|----------------------------------------------------|

----

| Item      4. | (Removed      and Reserved) |
|--------------|-----------------------------|

| Item      5. | Market      for Registrant’s Common Equity, Related Stockholder Matters and Issuer      Purchases of Equity Securities |
|--------------|------------------------------------------------------------------------------------------------------------------------------|

| 2009                |   | High      Price |   | Low      Price |   | Cash      dividendsper share |
|---------------------|--------|-----------------|--------|----------------|--------|-----------------------------------|
| First      Quarter  |   | $               | 14.45  |           |   | $                                 | 4.18 |   |   | $ | 0.10 |   |
| Second      Quarter |   |            | 9.86   |           |   |                              | 4.60 |   |   |   | 0.01 |   |
| Third      Quarter  |   |            | 6.11   |           |   |                              | 3.75 |   |   |   | — |   |
| Fourth      Quarter |   |            | 6.63   |           |   |                              | 5.47 |   |   |   | — |   |

| 2008                |   | High      Price |   | Low      Price |   | Cash      dividendsper share |
|---------------------|--------|-----------------|--------|----------------|--------|-----------------------------------|
| First      Quarter  |   | $               | 15.84  |           |   | $                                 | 12.50 |   |   | $ | 0.20 |   |
| Second      Quarter |   |            | 15.24  |           |   |                              | 11.16 |   |   |   | 0.20 |   |
| Third      Quarter  |   |            | 19.65  |           |   |                              | 10.77 |   |   |   | 0.20 |   |
| Fourth      Quarter |   |            | 16.86  |           |   |                              | 11.27 |   |   |   | 0.20 |   |

----

| Plan Category                                          | Number      Of Securities To Be Issued Upon Exercise Of Outstanding Options, Warrants And Rights(A)      (#) | Weighted-Average      Exercise Price Of Outstanding Options, Warrants And Rights(B)      ($) | Number      Of Securities Remaining Available For Future Issuance Under Equity      Compensation Plans, Excluding SecuritiesReflected In Column (A)(C)(#) |
|-------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
| Equity      Compensation Plans Approved by Stockholders     | 1,401,561(1)                                                                                                 | $15.89      per share                                                                        | 914,752                                                                                                                                                   |
| Equity      Compensation Plans Not Approved by Stockholders | -0-(2)                                                                                                       | -0-                                                                                          |      22,695                                                                                                                      |
| TOTAL                                                       | 1,401,561                                                                                                    | $15.89      per share                                                                        | 937,447                                                                                                                                                   |

| (1)   | Includes      options issued under the Corporation’s 1993 and 1998 Stock Incentive      Plans, 1998 Independent Director’s Stock Option Plan, 2004 Omnibus Stock      Incentive Plan, options assumed pursuant to the merger & acquisition      of Millennium Bank on April 30, 2004, options assumed pursuant to      acquisition of East Penn Financial on November 16, 2007 and options      assumed pursuant to the acquisition of Willow Financial on December 5,      2008. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | On      December 13, 1996, the Board of Directors authorized the registration of      70,354 shares of common stock for issuance under the Corporation’s      Employee Stock Bonus Plan. On December 24, 1996, in celebration of the      Corporation reaching $1 billion in total assets, 41,685 shares were issued      to full and part-time employees of the Corporation’s subsidiaries.      Annually, since 1996, a total of 5,974 shares in the aggregate, have been      awarded under this Plan to employees in recognition of exemplary service      during each calendar year. When awarded, the value of shares is based on      the closing price of the Corporation’s common stock as of the close of      business on the last business day of the most recently completed calendar      quarter. Registered shares and available shares under the Plan reflect      adjustment for stock dividends. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Zack's      Total Return Annual Comparison                                                                      |   |
|-----------------------------------------------------------------------------------------------------------------|--------|
| Five-Year      Cumulative Total Return Summary                                                                  |   |
|                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                            |   | 2004 |   |   | 2005 |   |   | 2006 |   |   | 2007 |   |   | 2008 |   |   | 2009 |   |
|                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Harleysville      National Corporation                                                                          |   |   | 100.00 |   |   |   | 78.06 |   |   |   | 86.06 |   |   |   | 68.14 |   |   |   | 71.57 |   |   |   | 32.36 |   |
| NASDAQ      Stock Market (US Companies)                                                                         |   |   | 100.00 |   |   |   | 102.13 |   |   |   | 112.18 |   |   |   | 121.67 |   |   |   | 58.64 |   |   |   | 84.30 |   |
| NASDAQ      Banks Index                                                                                         |   |   | 100.00 |   |   |   | 97.69 |   |   |   | 109.63 |   |   |   | 86.90 |   |   |   | 63.36 |   |   |   | 53.09 |   |
|                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Notes:                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate      Performance Graph with peer group uses peer group only performance      (excludes only company). |   |
| Peer      group indices use beginning of period market capitalization      weighting.                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *      Source:  Zacks Investment Research, Inc.                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                     |   | Year      Ended December 31,                              |       |
|----------------------------------------------------------|--------|-----------------------------------------------------------|------------|
|                                                     |   | 2009(1)                                                   |       |   | 2008(2) |   |   | 2007(3) |   |   | 2006(4) |   |   | 2005 |   |
|                                                     |   | (Dollars      in thousands, except per share information) |       |
| Income      and expense                                  |   |                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      income                                     |   | $                                                         | 230,811    |   |   | $ | 206,294 |   |   | $ | 194,561 |   |   | $ | 178,941 |   |   | $ | 151,739 |   |
| Interest      expense                                    |   |                                                      | 100,938    |   |   |   | 102,154 |   |   |   | 112,127 |   |   |   | 95,768 |   |   |   | 64,618 |   |
| Net      interest income                                 |   |                                                      | 129,873    |   |   |   | 104,140 |   |   |   | 82,434 |   |   |   | 83,173 |   |   |   | 87,121 |   |
| Provision      for loan losses                           |   |                                                      | 58,321     |   |   |   | 15,567 |   |   |   | 10,550 |   |   |   | 4,200 |   |   |   | 3,401 |   |
| Net      interest income after provision for loan losses |   |                                                      | 71,552     |   |   |   | 88,573 |   |   |   | 71,884 |   |   |   | 78,973 |   |   |   | 83,720 |   |
| Noninterest      income                                  |   |                                                      | 63,658     |   |   |   | 46,217 |   |   |   | 43,338 |   |   |   | 45,348 |   |   |   | 29,990 |   |
| Noninterest      expense                                 |   |                                                      | 367.742    |   |   |   | 104,622 |   |   |   | 81,355 |   |   |   | 70,830 |   |   |   | 62,479 |   |
| (Loss)      income before income taxes                   |   |                                                      | (232,532   | ) |   |   | 30,168 |   |   |   | 33,867 |   |   |   | 53,491 |   |   |   | 51,231 |   |
| Income      tax (benefit) expense                        |   |                                                      | (13,057    | ) |   |   | 5,075 |   |   |   | 7,272 |   |   |   | 14,076 |   |   |   | 12,403 |   |
| Net      (loss) income                                   |   | $                                                         | (219,475   | ) |   | $ | 25,093 |   |   | $ | 26,595 |   |   | $ | 39,415 |   |   | $ | 38,828 |   |
| Per      share information(5)                            |   |                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      (loss) earnings                               |   | $                                                         | (5.09      | ) |   | $ | 0.78 |   |   | $ | 0.91 |   |   | $ | 1.36 |   |   | $ | 1.34 |   |
| Diluted      (loss) earnings                             |   |                                                      | (5.09      | ) |   |   | 0.78 |   |   |   | 0.90 |   |   |   | 1.34 |   |   |   | 1.32 |   |
| Cash      dividends paid                                 |   |                                                      | 0.11       |   |   |   | 0.80 |   |   |   | 0.80 |   |   |   | 0.75 |   |   |   | 0.72 |   |
| Book      value (at year-end)                            |   |                                                      | 6.06       |   |   |   | 11.05 |   |   |   | 10.83 |   |   |   | 10.18 |   |   |   | 9.48 |   |
| Basic      average common shares outstanding             |   |                                                      | 43,078,543 |   |   |   | 32,201,150 |   |   |   | 29,218,671 |   |   |   | 28,946,847 |   |   |   | 28,891,412 |   |
| Diluted      average common shares outstanding           |   |                                                      | 43,078,543 |   |   |   | 32,364,137 |   |   |   | 29,459,898 |   |   |   | 29,353,128 |   |   |   | 29,490,216 |   |
| Average      balance sheet                               |   |                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                    |   | $                                                         | 3,411,383  |   |   | $ | 2,585,101 |   |   | $ | 2,123,170 |   |   | $ | 2,014,420 |   |   | $ | 1,900,023 |   |
| Investments                                              |   |                                                      | 1,139,259  |   |   |   | 1,037,112 |   |   |   | 944,464 |   |   |   | 925,635 |   |   |   | 903,063 |   |
| Other      interest-earning assets                       |   |                                                      | 417,011    |   |   |   | 48,474 |   |   |   | 72,087 |   |   |   | 79,670 |   |   |   | 51,740 |   |
| Total      assets                                        |   |                                                      | 5,381,470  |   |   |   | 3,997,972 |   |   |   | 3,371,304 |   |   |   | 3,229,224 |   |   |   | 3,039,186 |   |
| Deposits                                                 |   |                                                      | 4,021,294  |   |   |   | 3,004,070 |   |   |   | 2,557,546 |   |   |   | 2,469,514 |   |   |   | 2,259,831 |   |
| Borrowed      funds                                      |   |                                                      | 906,172    |   |   |   | 586,088 |   |   |   | 471,296 |   |   |   | 434,938 |   |   |   | 456,599 |   |
| Shareholders’      equity                          |   |                                                      | 368,962    |   |   |   | 336,654 |   |   |   | 298,393 |   |   |   | 281,847 |   |   |   | 272,974 |   |
| Balance      sheet at year-end                           |   |                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                    |   | $                                                         | 2,993,378  |   |   | $ | 3,685,244 |   |   | $ | 2,460,823 |   |   | $ | 2,047,355 |   |   | $ | 1,985,493 |   |
| Investments                                              |   |                                                      | 1,108,124  |   |   |   | 1,231,661 |   |   |   | 982,915 |   |   |   | 911,889 |   |   |   | 901,208 |   |
| Other      interest-earning assets                       |   |                                                      | 787,722    |   |   |   | 27,221 |   |   |   | 135,473 |   |   |   | 62,975 |   |   |   | 37,455 |   |
| Total      assets                                        |   |                                                      | 5,187,796  |   |   |   | 5,490,509 |   |   |   | 3,903,001 |   |   |   | 3,249,828 |   |   |   | 3,117,359 |   |
| Deposits                                                 |   |                                                      | 3,944,847  |   |   |   | 3,938,432 |   |   |   | 2,985,058 |   |   |   | 2,516,855 |   |   |   | 2,365,457 |   |
| Borrowed      funds                                      |   |                                                      | 896,577    |   |   |   | 990,498 |   |   |   | 508,285 |   |   |   | 389,495 |   |   |   | 439,168 |   |
| Shareholders’      equity                          |   |                                                      | 261,571    |   |   |   | 474,707 |   |   |   | 339,310 |   |   |   | 294,751 |   |   |   | 273,232 |   |
| Performance      ratios                                  |   |                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return      on average assets                            |   |                                                      | (4.08      | )      % |   |   | 0.63 | % |   |   | 0.79 | % |   |   | 1.22 | % |   |   | 1.28 | % |
| Return      on average equity                            |   |                                                      | (59.48     | ) |   |   | 7.45 |   |   |   | 8.91 |   |   |   | 13.98 |   |   |   | 14.22 |   |
| Average      equity to average assets                    |   |                                                      | 6.86       |   |   |   | 8.42 |   |   |   | 8.85 |   |   |   | 8.73 |   |   |   | 8.98 |   |
| Dividend      payout ratio                               |   |                                                      | —    |   |   |   | 100.06 |   |   |   | 88.82 |   |   |   | 55.26 |   |   |   | 53.41 |   |
| Net      interest margin                                 |   |                                                      | 2.78       |   |   |   | 3.04 |   |   |   | 2.82 |   |   |   | 2.95 |   |   |   | 3.27 |   |
| Asset      Quality Ratios                                |   |                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nonperforming      loans to total loans                  |   |                                                      | 4.39       | % |   |   | 2.12 | % |   |   | 0.90 | % |   |   | 0.87 | % |   |   | 0.42 | % |
| Net      charge offs to average loans outstanding        |   |                                                      | 1.22       |   |   |   | 0.23 |   |   |   | 0.36 |   |   |   | 0.14 |   |   |   | 0.10 |   |
| Allowance      for loan losses to total loans            |   |                                                      | 2.23       |   |   |   | 1.36 |   |   |   | 1.11 |   |   |   | 1.03 |   |   |   | 1.00 |   |
| Allowance      for loan losses to nonperforming loans    |   |                                                      | 50.73      |   |   |   | 65.00 |   |   |   | 124.5 |   |   |   | 119.9 |   |   |   | 238.2 |   |

| (1) | The      results of operations include a non-cash goodwill impairment charge of      $214.5 million during the second quarter of 2009 resulting from the      decrease in the market value of the Corporation’s  stock. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The      results of operations include the acquisition of the Willow Financial      effective December 5, 2008. |
|-----|-----------------------------------------------------------------------------------------------------------------|

| (3) | The      results of operations include the acquisition of East Penn Financial      Corporation effective November 16, 2007 and the sale lease-back of bank      properties during the fourth quarter of2007. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | The      results of operations include the acquisition of the Cornerstone Companies      effective January 1, 2006 and the sale of the Bank’s Honesdale branch      effective November 10, 2006. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Adjusted      for a five percent stock dividend effective September 15, 2006 and      September 15, 2005. |
|-----|-----------------------------------------------------------------------------------------------------------|

----

| Item      7. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations |
|--------------|-------------------------------------------------------------------------------------------------------|

----

|   | Critical      Accounting Estimates |
|--------|------------------------------------|

----

----

----

----

----

----

|                                                          |   | December      31, |      |
|---------------------------------------------------------------|--------|-------------------|-----------|
| (Dollars      in thousands)                                   |   | 2009              |      |   | 2008 |   |   | 2007 |   |
| Investment      securities available for sale:                |   |              |      |   |   |   |   |   |   |
| Obligations      of U.S. government agencies and corporations |   | $                 | 503       |   |   | $ | 93,894 |   |   | $ | 98,734 |   |
| Obligations      of states and political subdivisions         |   |              | 220,260   |   |   |   | 286,875 |   |   |   | 228,436 |   |
| Residential      mortgage-backed securities                   |   |              | 784,090   |   |   |   | 705,483 |   |   |   | 515,989 |   |
| Trust      preferred pools/collateralized debt obligations    |   |              | 9,869     |   |   |   | 15,864 |   |   |   | 36,926 |   |
| Corporate      bonds                                          |   |              | 2,215     |   |   |   | 18,167 |   |   |   | 16,454 |   |
| Equity      securities                                        |   |              | 21,216    |   |   |   | 21,665 |   |   |   | 13,828 |   |
| Total      investment securities available for sale           |   | $                 | 1,038,153 |   |   | $ | 1,141,948 |   |   | $ | 910,367 |   |
| Investment      securities held to maturity:                  |   |              |      |   |   |   |   |   |   |   |   |   |
| Obligations      of U.S. government agencies and corporations |   | $                 | —   |   |   | $ | 3,880 |   |   | $ | 3,868 |   |
| Obligations      of states and political subdivisions         |   |              | 25,324    |   |   |   | 46,554 |   |   |   | 53,479 |   |
| Total      investment securities held to maturity             |   | $                 | 25,324    |   |   | $ | 50,434 |   |   | $ | 57,347 |   |

----

|                                                           |   | December      31, 2009         |    |
|----------------------------------------------------------------|--------|--------------------------------|---------|
|                                                           |   | Due      in 1 yearor      less |    | Due      after1      year through5      years |   | Due      after5      years through10      years | Due      after10      years |   | Total |   |
|                                                           |   | (Dollars      in thousands)    |    |
| Investment      securities available for sale:                 |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations      of U.S. government agencies and corporations: |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value                                                |   | $                              | — |   |   | $ | 503 |   |   | $ | — |   | $— |   | $  503 |   |
| Weighted      average yield                                    |   |                           | — | % |   |   | 2.05 | % |   |   | — | % | — | % | 2.05 | % |
| Obligations      of states and political subdivisions:         |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value                                                |   |                           | 1,256   |   |   |   | 5,037 |   |   |   | 92,974 |   | 120,993 |   | 220,260 |   |
| Weighted      average yield(1)                                 |   |                           | 3.67    | % |   |   | 5.71 | % |   |   | 6.05 | % | 6.26 | % | 6.15 | % |
| Residential      mortgage-backed securities:                   |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value                                                |   |                           | — |   |   |   | 3,720 |   |   |   | 71,301 |   | 709,069 |   | 784,090 |   |
| Weighted      average yield                                    |   |                           | — | % |   |   | 4.27 | % |   |   | 4.07 | % | 4.15 | % | 4.15 | % |
| Trust      preferred pools/collateralized debt obligations:    |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value                                                |   |                           | — |   |   |   | — |   |   |   | — |   | 9,869 |   | 9,869 |   |
| Weighted      average yield                                    |   |                           | — | % |   |   | — | % |   |   | — | % | 3.11 | % | 3.11 | % |
| Corporate      bonds:                                          |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value                                                |   |                           | 251     |   |   |   | 250 |   |   |   | 1,714 |   | — |   | 2,215 |   |
| Weighted      average yield                                    |   |                           | 4.26    | % |   |   | 1.53 | % |   |   | 3.73 | % | — | % | 3.54 | % |
| Equity      securities:                                        |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value                                                |   |                           | — |   |   |   | — |   |   |   | — |   | 21,216 |   | 21,216 |   |
| Weighted      average yield                                    |   |                           | — | % |   |   | — | % |   |   | — | % | 4.18 | % | 4.18 | % |
| Total      investment securities available for sale:           |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value                                                |   | $                              | 1,507   |   |   | $ | 9,510 |   |   | $ | 165,989 |   | $861,147 |   | $1,038,153 |   |
| Weighted      average yield                                    |   |                           | 3.77    | % |   |   | 4.84 | % |   |   | 5.18 | % | 4.44 | % | 4.57 | % |
| Investment      securities held to maturity:                   |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations      of states and political subdivisions:         |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortized      cost                                            |   | $                              | — |   |   | $ | — |   |   | $ | 9,705 |   | $      15,619 |   | $      25,324 |   |
| Weighted      average yield                                    |   |                           | — | % |   |   | — | % |   |   | 6.17 | % | 7.11 | % | 6.75 | % |
| Total      investment securities held to maturity:             |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortized      Cost                                            |   | $                              | — |   |   | $ | — |   |   | $ | 9,705 |   | $15,619 |   | $25,324 |   |
| Weighted      average yield                                    |   |                           | — | % |   |   | — | % |   |   | 6.17 | % | 7.11 | % | 6.75 | % |

| (1) | Weighted      average yield on nontaxable investment securities is shown on a tax      equivalent basis (tax rate of 35%). |
|-----|----------------------------------------------------------------------------------------------------------------------------|

----

|   | Loans |
|--------|-------|

|                           | December      31,           |
|--------------------------------|-----------------------------|
|                           | 2009                        | 2008 | 2007 | 2006 | 2005 |
|                           | Amount                      |   | Percentof      Loans | Amount |   | Percentof      Loans | Amount |   | Percentof      Loans | Amount |   | Percentof      Loans | Amount |   | Percentof      Loans |
|                           | (Dollars      in thousands) |
| Real      estate               | $1,324,060                  |   |   | 44 | % | $1,603,406 |   |   | 43 | % | $  959,064 |   |   | 39 | % | $   845,880 |   |   | 41 | % | $   791,358 |   |   | 40 | % |
| Commercial      and industrial | 793,786                     |   |   | 27 | % | 980,656 |   |   | 27 | % | 730,144 |   |   | 30 | % | 507,899 |   |   | 25 | % | 479,238 |   |   | 24 | % |
| Consumer                       | 875,424                     |   |   | 29 | % | 1,100,424 |   |   | 30 | % | 769,051 |   |   | 31 | % | 685,988 |   |   | 34 | % | 697,373 |   |   | 35 | % |
| Leasefinancing                 | 108                         |   |   | — | % | 758 |   |   | — | % | 2,564 |   |   | — | % | 7,588 |   |   | — | % | 17,524 |   |   | 1 | % |
| Total                          | $2,993,378                  |   |   | 100 | % | $3,685,244 |   |   | 100 | % | $2,460,823 |   |   | 100 | % | $2,047,355 |   |   | 100 | % | $1,985,493 |   |   | 100 | % |

|   | Table      4—Selected Loan Maturity Data |
|--------|------------------------------------------------|

|                                               |   | December      31, 2009           |
|----------------------------------------------------|--------|----------------------------------|
|                                               |   | Due      in1      year or less   |   | Due      after1      yearthrough      5 years | Due      after5      years | Total |
|                                               |   | (Dollars in thousands) |
| Real      estate                                   |   | $                                | 290,911 |   | $   527,974 | $   505,175 | $1,324,060 |
| Commercial      and industrial                     |   |                             | 314,611 |   | 322,030 | 157,145 | 793,786 |
| Consumer                                           |   |                             | 150,895 |   | 366,804 | 357,725 | 875,424 |
| Lease      financing                               |   |                             | 53 |   | 55 | — |             108 |
| Total                                              |   | $                                | 756,470 |   | $1,216,863 | $1,020,045 | $2,993,378 |
| Loans      with variable or floating interestrates |   | $                                | 515,975 |   | $   605,411 | $   510,069 | $1,631,455 |
| Loans      with fixed predetermined interest rates |   |                             | 240,495 |   | 611,452 | 509,976 | 1,361,923 |
| Total                                              |   | $                                | 756,470 |   | $1,216,863 | $1,020,045 | $2,993,378 |

----

----

|   | Table      5—Nonperforming Assets |
|--------|-----------------------------------------|

|                                                 |   | December      31,           |    |
|------------------------------------------------------|--------|-----------------------------|---------|
|                                                 |   | 2009                        |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                 |   | (Dollars      in thousands) |    |
| Nonaccrual      loans                                |   | $                           | 129,932 |   |   | $ | 75,060 |   |   | $ | 21,091 |   |   | $ | 15,201 |   |   | $ | 7,493 |   |
| Loans      90 days or more past due             |   |                        | 1,396   |   |   |   | 1,849 |   |   |   | 857 |   |   |   | 2,444 |   |   |   | 846 |   |
| Total      nonperforming loans                       |   |                        | 131,328 |   |   |   | 76,909 |   |   |   | 21,948 |   |   |   | 17,645 |   |   |   | 8,339 |   |
| Net      assets in foreclosure                       |   |                        | 2,286   |   |   |   | 1,626 |   |   |   | 28 |   |   |   | - |   |   |   | 29 |   |
| Total      nonperforming assets                      |   | $                           | 133,614 |   |   | $ | 78,535 |   |   | $ | 21,976 |   |   | $ | 17,645 |   |   | $ | 8,368 |   |
| Allowance      for loan losses to nonperformingloans |   |                        | 50.70   | % |   |   | 65.00 | % |   |   | 124.5 | % |   |   | 119.9 | % |   |   | 238.2 | % |
| Nonperforming      loans to total loans              |   |                        | 4.49    | % |   |   | 2.12 | % |   |   | 0.90 | % |   |   | 0.87 | % |   |   | 0.42 | % |
| Allowance      for loan losses to total loans        |   |                        | 2.23    | % |   |   | 1.36 | % |   |   | 1.11 | % |   |   | 1.03 | % |   |   | 1.00 | % |
| Nonperforming      assets to total assets            |   |                        | 2.58    | % |   |   | 1.43 | % |   |   | 0.56 | % |   |   | 0.54 | % |   |   | 0.27 | % |

|   | Allowance      for Loan Losses |
|--------|--------------------------------|

----

----

|   | Table      6—Allowance for Loan Losses |
|--------|----------------------------------------------|

|                                                       |   | December      31,           |      |
|------------------------------------------------------------|--------|-----------------------------|-----------|
|                                                       |   | 2009                        |      |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                       |   | (Dollars      in thousands) |      |
| Average      loans                                         |   | $                           | 3,411,383 |   |   | $ | 2,585,101 |   |   | $ | 2,123,170 |   |   | $ | 2,014,420 |   |   | $ | 1,900,023 |   |
| Allowance,      beginning ofyear                           |   | $                           | 49,955    |   |   | $ | 27,328 |   |   | $ | 21,154 |   |   | $ | 19,865 |   |   | $ | 18,455 |   |
| Loans      charged off:                                    |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real      estate                                           |   |                        | 30,259    |   |   |   | 3,770 |   |   |   | 4,847 |   |   |   | 1,047 |   |   |   | 383 |   |
| Commercial      and industrial                             |   |                        | 9,178     |   |   |   | 1,079 |   |   |   | 1,551 |   |   |   | 1,141 |   |   |   | 353 |   |
| Consumer                                                   |   |                        | 3,493     |   |   |   | 1,964 |   |   |   | 1,693 |   |   |   | 1,481 |   |   |   | 2,123 |   |
| Lease      financing                                       |   |                        | 168       |   |   |   | 16 |   |   |   | 51 |   |   |   | 42 |   |   |   | 188 |   |
| Total      loans charged off                               |   |                        | 43,098    |   |   |   | 6,829 |   |   |   | 8,142 |   |   |   | 3,711 |   |   |   | 3,047 |   |
| Recoveries:                                                |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real      estate                                           |   |                        | 552       |   |   |   | 389 |   |   |   | 72 |   |   |   | 138 |   |   |   | 326 |   |
| Commercial      and industrial                             |   |                        | 374       |   |   |   | 240 |   |   |   | 142 |   |   |   | 55 |   |   |   | 66 |   |
| Consumer                                                   |   |                        | 515       |   |   |   | 329 |   |   |   | 283 |   |   |   | 519 |   |   |   | 586 |   |
| Lease      financing                                       |   |                        | 1         |   |   |   | 6 |   |   |   | 19 |   |   |   | 88 |   |   |   | 78 |   |
| Total      recoveries                                      |   |                        | 1,442     |   |   |   | 964 |   |   |   | 516 |   |   |   | 800 |   |   |   | 1,056 |   |
| Net      loans charged off                                 |   |                        | 41,656    |   |   |   | 5,865 |   |   |   | 7,626 |   |   |   | 2,911 |   |   |   | 1,991 |   |
| Reserve      from acquisitions                             |   |                        | —   |   |   |   | 12,925 |   |   |   | 3,250 |   |   |   | — |   |   |   | — |   |
| Provision      for loan losses                             |   |                        | 58,321    |   |   |   | 15,567 |   |   |   | 10,550 |   |   |   | 4,200 |   |   |   | 3,401 |   |
| Allowance,      end of year                                |   | $                           | 66,620    |   |   | $ | 49,955 |   |   | $ | 27,328 |   |   | $ | 21,154 |   |   | $ | 19,865 |   |
| Ratio      of net charge offs to average loans outstanding |   |                        | 1.22      | % |   |   | 0.23 | % |   |   | 0.36 | % |   |   | 0.14 | % |   |   | 0.10 | % |

----

|   | Table      7—Allocation of the Allowance for Loan Losses by Loan  Type |
|--------|------------------------------------------------------------------------------|

|                          |   | December      31,                |
|-------------------------------|--------|----------------------------------|
|                          |   | 2009                             |   | 2008 |   | 2007 |   | 2006 |   | 2005 |
|                          |   | Amount                           |   | PercentofAllowance |   | Amount | PercentofAllowance |   | Amount |   | PercentofAllowance |   | Amount | PercentofAllowance |   | Amount | PercentofAllowance |
|                          |   | (Dollars in thousands) |
| Real      estate              |   | $                                | 29,283 |   |   |   | 44 | % |   | $ | 22,051 |   | 44 | % |   | $ | 10,491 |   |   |   | 38 | % |   | $ | 7,918 |   | 38 | % |   | $ | 6,422 |   |   | 32 | % |
| Commercial      andindustrial |   |                             | 29,659 |   |   |   | 44 | % |   |   | 20,898 |   | 42 | % |   |   | 12,340 |   |   |   | 45 | % |   |   | 9,119 |   | 43 | % |   |   | 8,534 |   |   | 43 | % |
| Consumer                      |   |                             | 7,677 |   |   |   | 12 | % |   |   | 6,996 |   | 14 | % |   |   | 4,485 |   |   |   | 17 | % |   |   | 4,041 |   | 19 | % |   |   | 4,596 |   |   | 23 | % |
| Lease      financing          |   |                             | 1 |   |   |   | − | % |   |   | 10 |   | − | % |   |   | 12 |   |   |   | − | % |   |   | 76 |   | − | % |   |   | 313 |   |   | 2 | % |
| Total                         |   | $                                | 66,620 |   |   |   | 100 | % |   | $ | 49,955 |   | 100 | % |   | $ | 27,328 |   |   |   | 100 | % |   | $ | 21,154 |   | 100 | % |   | $ | 19,865 |   |   | 100 | % |

|   | Investment      in Bank |
|--------|-------------------------|

|   | Deposits      and Borrowings |
|--------|------------------------------|

----

|   | Deposit      Structure |
|--------|------------------------|

|   | Table      8—Average Deposits |
|--------|-------------------------------------|

|                                 |   | December      31,           |      |
|--------------------------------------|--------|-----------------------------|-----------|
|                                 |   | 2009                        |      |   | 2008 |   |   | 2007 |   |
|                                 |   | Amount                      |      |   | Rate |   |   | Amount |   |   | Rate |   |   | Amount |   |   | Rate |   |
|                                 |   | (Dollars      in thousands) |      |
| Demand—noninterest-bearing     |   | $                           | 497,159   |   |   |   | — | % |   | $ | 345,717 |   |   |   | — | % |   | $ | 312,011 |   |   |   | — | % |
| Demand—interest-bearing        |   |                        | 604,535   |   |   |   | 0.92 | % |   |   | 431,138 |   |   |   | 1.55 | % |   |   | 517,520 |   |   |   | 3.52 | % |
| Money      market and savings        |   |                        | 1,301,586 |   |   |   | 1.11 | % |   |   | 978,803 |   |   |   | 1.89 | % |   |   | 864,062 |   |   |   | 3.45 | % |
| Time      deposits                   |   |                        | 1,618,014 |   |   |   | 3.21 | % |   |   | 1,248,412 |   |   |   | 4.31 | % |   |   | 863,953 |   |   |   | 4.78 | % |
| Total      interest-bearing deposits |   | $                           | 3,524,135 |   |   |   | 2.04 | % |   | $ | 2,658,353 |   |   |   | 2.97 | % |   | $ | 2,245,535 |   |   |   | 3.98 | % |
| Total      deposits                  |   | $                           | 4,021,294 |   |   |   |   |   |   | $ | 3,004,070 |   |   |   |   |   |   | $ | 2,557,546 |   |   |   |   |   |

|   | Table      9—Maturity Distribution of Certificates of Deposit $100,000 and      Over |
|--------|--------------------------------------------------------------------------------------------|

|                                  |   | (Dollarsin thousands) |
|---------------------------------------|--------|----------------------------|
| Three      months or less             |   | $                          | 154,399 |   |
| Over      three months to six months  |   |                       | 88,183 |   |
| Over      six months to twelve months |   |                       | 148,423 |   |
| Over      twelve months               |   |                       | 87,280 |   |
| Total                                 |   | $                          | 478,285 |   |

|   | Borrowings |
|--------|------------|

----

|   | Table      10—Securities Sold under Agreements to  Repurchase |
|--------|---------------------------------------------------------------------|

|                                                    |   | At      or for the year ended December31, |    |
|---------------------------------------------------------|--------|-------------------------------------------|---------|
| Securities      sold under agreements to repurchase(1): |   | 2009                                      |    |   | 2008 |   |   | 2007 |   |
|                                                    |   | (Dollars      in thousands)               |    |
| Balance      at year-end                                |   | $                                         | 71,471  |   |   | $ | 103,813 |   |   | $ | 101,493 |   |
| Weighted      average rate at year-end                  |   |                                      | 0.50    | % |   |   | 0.42 | % |   |   | 3.60 | % |
| Maximum      month-end balance                          |   | $                                         | 93,186  |   |   | $ | 97,526 |   |   | $ | 105,205 |   |
| Average      balance during the year                    |   | $                                         | 111,356 |   |   | $ | 109,092 |   |   | $ | 121,392 |   |
| Weighted      average rate during the year              |   |                                      | 0.50    | % |   |   | 1.55 | % |   |   | 4.46 | % |

| (1) | Excludes      long-term securities sold under agreements to repurchase with private      entities of $218.9 million and $237.0 million at  December 31,      2009 and 2008, respectively. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Results      of Operations |
|--------|----------------------------|

|   | Net      Interest Income |
|--------|--------------------------|

----

|   | Table      11—Analysis of Changes in Net Interest Income—Fully Taxable-Equivalent      Basis |
|--------|----------------------------------------------------------------------------------------------------------|

|                                                                                                |   | 2009      compared to 2008 |   |   | 2008      compared to 2007 |   |
|-----------------------------------------------------------------------------------------------------|--------|----------------------------|--------|--------|----------------------------|--------|
|                                                                                                |   | Net                        |   |   | Due      to Change in      |   |   | Net |   |   | Due      to change in |   |
|                                                                                                |   | Change                     |   |   | Volume                     |   |   | Rate |   |   | Change |   |   | Volume |   |   | Rate |   |
| Increase      (decrease) in interest income:                                                        |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      securities(1)                                                                       |   | $                          | 1,188  |   |                       | $      | 5,469 |   |   | $ | (4,281 | ) |   | $ | 6,653 |   |   | $ | 5,027 |   |   | $ | 1,626 |   |
| Federal      funds sold, securities purchased under agreements to resell and deposits      in banks |   |                       | (70    | )      |                       |   | 1,681 |   |   |   | (1,751 | ) |   |   | (2,479 | ) |   |   | (931 | ) |   |   | (1,548 | ) |
| Loans(1)(2)                                                                                         |   |                       | 24,193 |   |                       |   | 45,085 |   |   |   | (20,892 | ) |   |   | 9,047 |   |   |   | 29,406 |   |   |   | (20,359 | ) |
| Total                                                                                               |   |                       | 25,311 |   |                       |   | 52,235 |   |   |   | (26,924 | ) |   |   | 13,221 |   |   |   | 33,502 |   |   |   | (20,281 | ) |
| Increase      (decrease) in interest expense:                                                       |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings      and money market deposits                                                              |   |                       | (5,104 | )      |                       |   | 7,150 |   |   |   | (12,254 | ) |   |   | (22,840 | ) |   |   | 965 |   |   |   | (23,805 | ) |
| Time      deposits                                                                                  |   |                       | (1,785 | )      |                       |   | 13,792 |   |   |   | (15,577 | ) |   |   | 12,462 |   |   |   | 16,859 |   |   |   | (4,397 | ) |
| Borrowed      funds                                                                                 |   |                       | 5,673  |   |                       |   | 10,896 |   |   |   | (5,223 | ) |   |   | 405 |   |   |   | 4,985 |   |   |   | (4,580 | ) |
| Total                                                                                               |   |                       | (1,216 | )      |                       |   | 31,838 |   |   |   | (33,054 | ) |   |   | (9,973 | ) |   |   | 22,809 |   |   |   | (32,782 | ) |
| Net      increase (decrease) in net interest income                                                 |   | $                          | 26,527 |   |                       | $      | 20,397 |   |   | $ | 6,130 |   |   | $ | 23,194 |   |   | $ | 10,693 |   |   | $ | 12,501 |   |

| (1) | The      interest earned on nontaxable investment securities and loans is shown on      a tax-equivalent basis using a tax rate of 35%,  net. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Nonaccrual      loans have been included in the appropriate average loan balance category,      but interest on nonaccrual loans has not been included for purposes of      determining interest income. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Table      12—Average Balance Sheets and Interest Rates—Fully Taxable-Equivalent      Basis |
|--------|---------------------------------------------------------------------------------------------------------|

|                                                                                                | Year      Ended December 31,     |
|-----------------------------------------------------------------------------------------------------|----------------------------------|
|                                                                                                | 2009                             | 2008 | 2007 |
|                                                                                                | AverageBalance                   | Interest |   | Rate | AverageBalance | Interest |   | Rate | AverageBalance | Interest |   | Rate |
|                                                                                                | (Dollars in thousands) |
| Assets                                                                                              |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earning      Assets:                                                                                |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      securities:                                                                         |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable      investments                                                                            | $   842,534       |    $39,254 |   |   | 4.66 | % | $   738,640 |  $      39,195 |   |   | 5.31 | % | $   681,788 |  $      34,803 |   |   | 5.10 | % |
| Nontaxable      investments(1)                                                                      | 296,725                          | 19,239 |   |   | 6.48 |   | 298,472 | 18,110 |   |   | 6.07 |   | 262,676 | 15,849 |   |   | 6.03 |   |
| Total      investment securities                                                                    | 1,139,259                        | 58,493 |   |   | 5.13 |   | 1,037,112 | 57,305 |   |   | 5.53 |   | 944,464 | 50,652 |   |   | 5.36 |   |
| Federal      funds sold, securities purchased under agreements to resell and deposits      in banks | 417,011                          | 1,027 |   |   | 0.25 |   | 48,474 | 1,097 |   |   | 2.26 |   | 72,087 | 3,576 |   |   | 4.96 |   |
| Loans(1)(2)                                                                                         | 3,411,383                        | 179,640 |   |   | 5.27 |   | 2,585,101 | 155,447 |   |   | 6.01 |   | 2,123,170 | 146,400 |   |   | 6.90 |   |
| Total      earning assets                                                                           | 4,967,653                        | 239,160 |   |   | 4.81 |   | 3,670,687 | 213,849 |   |   | 5.83 |   | 3,139,721 | 200,628 |   |   | 6.39 |   |
| Noninterest-earning      assets                                                                     | 413,817                          |   |   |   |   |   | 327,285 |   |   |   |   |   | 231,583 |   |   |   |   |   |
| Total      assets                                                                                   | $5,381,470                       |   |   |   |   |   | $3,997,972 |   |   |   |   |   | $3,371,304 |   |   |   |   |   |
| Liabilities      and Shareholders’ Equity                                                     |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      liabilities:                                                                  |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      deposits:                                                                     |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings      and money market                                                                       | $1,906,121                       | 20,036 |   |   | 1.05 | % | $1,409,941 | 25,140 |   |   | 1.78 | % | $1,381,582 | 47,980 |   |   | 3.47 | % |
| Time                                                                                                | 1,618,014                        | 51,986 |   |   | 3.21 |   | 1,248,412 | 53,771 |   |   | 4.31 |   | 863,953 | 41,309 |   |   | 4.78 |   |
| Total      interest-bearing deposits                                                                | 3,524,135                        | 72,022 |   |   | 2.04 |   | 2,658,353 | 78,911 |   |   | 2.97 |   | 2,245,535 | 89,289 |   |   | 3.98 |   |
| Borrowed      funds                                                                                 | 906,172                          | 28,916 |   |   | 3.19 |   | 586,088 | 23,243 |   |   | 3.97 |   | 471,296 | 22,838 |   |   | 4.85 |   |
| Total      interest-bearing liabilities                                                             | 4,430,307                        | 100,938 |   |   | 2.28 |   | 3,244,441 | 102,154 |   |   | 3.15 |   | 2,716,831 | 112,127 |   |   | 4.13 |   |
| Noninterest-bearing      liabilities:                                                               |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand      deposits                                                                                | 497,159                          |   |   |   |   |   | 345,717 |   |   |   |   |   | 312,011 |   |   |   |   |   |
| Other      liabilities                                                                              | 85,042                           |   |   |   |   |   | 71,160 |   |   |   |   |   | 44,069 |   |   |   |   |   |
| Total      noninterest-bearing liabilities                                                          | 582,201                          |   |   |   |   |   | 416,877 |   |   |   |   |   | 356,080 |   |   |   |   |   |
| Total      liabilities                                                                              | 5,012,508                        |   |   |   |   |   | 3,661,318 |   |   |   |   |   | 3,072,911 |   |   |   |   |   |
| Shareholders’      equity                                                                     | 368,962                          |   |   |   |   |   | 336,654 |   |   |   |   |   | 298,393 |   |   |   |   |   |
| Total      liabilities and shareholders’ equity                                               | $5,381,470                       |   |   |   |   |   | $3,997,972 |   |   |   |   |   | $3,371,304 |   |   |   |   |   |
| Net      interest spread                                                                            |                             |   |   |   | 2.53 |   |   |   |   |   | 2.68 |   |   |   |   |   | 2.26 |   |
| Effect      of noninterest-bearing sources                                                          |                             |   |   |   | 0.25 |   |   |   |   |   | 0.36 |   |   |   |   |   | 0.56 |   |
| Net      interest income/margin on earning        assets                                  |                             | $138,222 |   |   | 2.78 | % |   | $111,695 |   |   | 3.04 | % |   | $      88,501 |   |   | 2.82 | % |
| Less      tax equivalent adjustment                                                                 |                             | 8,349 |   |   |   |   |   | 7,555 |   |   |   |   |   | 6,067 |   |   |   |   |
| Net      interest income                                                                            |                             | $129,873 |   |   |   |   |   | $104,140 |   |   |   |   |   | $      82,434 |   |   |   |   |

| (1) | The      interest earned on nontaxable investment securities and loans is shown on      a tax-equivalent basis, net of deductions (tax rate of    35%). |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Nonaccrual      loans have been included in the appropriate average loan balance category,      but interest on nonaccrual loans has not been included for purposes of      determining interest income. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Net      Interest Margin |
|--------|--------------------------|

|   | Interest      Rate Sensitivity Analysis |
|--------|-----------------------------------------|

----

----

----

|   | Table      13—Contractual Repricing Data of Interest Sensitive Assets and      Liabilities |
|--------|--------------------------------------------------------------------------------------------------|

|                                                  |   | December      31, 2009      |      |
|-------------------------------------------------------|--------|-----------------------------|-----------|
|                                                  |   | 0      to90      days       |      | 91      to365      days |   |   | After      1 yearthrough5      years |   |   | Over5      years |   |   | Total |   |
|                                                  |   | (Dollars      in thousands) |      |
| Earning      assets                                   |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      securities                            |   | $                           | 94,942    |   |   |   | $ | 60,245 |   |   | $ | 261,606 |   |   | $ | 691,151 |   |   | $ | 1,108,124 |   |
| Deposits      in banks                                |   |                        | 787,722   |   |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 787,722 |   |
| Loans                                                 |   |                        | 1,042,377 |   |   |   |   | 319,976 |   |   |   | 1,023,982 |   |   |   | 607,043 |   |   |   | 2,993,378 |   |
| Total      earning assets                             |   | $                           | 1,925,041 |   |   |   | $ | 380,401 |   |   | $ | 1,285,588 |   |   | $ | 1,298,194 |   |   | $ | 4,889,224 |   |
| Interest-bearing      liabilities                     |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      checking accounts               |   | $                           | 20,918    |   |   |   | $ | 58,887 |   |   | $ | 463,946 |   |   | $ | 121,288 |   |   | $ | 665,039 |   |
| Money      market funds                               |   |                        | 27,912    |   |   |   |   | 78,579 |   |   |   | 374,179 |   |   |   | 406,753 |   |   |   | 887,423 |   |
| Savings      accounts                                 |   |                        | 10,043    |   |   |   |   | 28,272 |   |   |   | 153,809 |   |   |   | 127,169 |   |   |   | 319,293 |   |
| Time      deposits                                    |   |                        | 403,566   |   |   |   |   | 786,173 |   |   |   | 357,024 |   |   |   | 2,854 |   |   |   | 1,549,617 |   |
| Borrowed      funds                                   |   |                        | 115,549   |   |   |   |   | 109,694 |   |   |   | 525,360 |   |   |   | 145,974 |   |   |   | 896,577 |   |
| Total      interest-bearing liabilities               |   | $                           | 577,988   |   |   |   | $ | 1,061,605 |   |   | $ | 1,874,318 |   |   | $ | 804,038 |   |   | $ | 4,317,949 |   |
| Interest      rate swaps                              |   | $                           | 207,820   |   |   |   | $ | (45,200 | ) |   | $ | (127,617 | ) |   | $ | (35,003 | ) |   | $ | — |   |
| Incremental      gap                                  |   | $                           | 1,554,873 |   |   |   | $ | (726,404 | ) |   | $ | (716,347 | ) |   | $ | 459,153 |   |   |   |   |   |
| Cumulative      gap(1)                                |   | $                           | 1,554,873 |   |   |   | $ | 828,469 |   |   | $ | 112,122 |   |   | $ | 571,275 |   |   |   |   |   |
| Cumulative      gap as a percentage of earning assets |   |                        | 31.80     |  % |   |   |   | 16.94 | % |   |   | 2.29 | % |   |   | 11.68 | % |   |   |   |   |

| (1) | The      information is based upon significant assumptions, including the      following: loans and leases are repaid by contractual maturity and      repricing; securities are repaid according to contractual maturity      adjusted for call features; interest-bearing demand, regular savings, and      money market savings deposits are estimated to exhibit some rate      sensitivity; and time deposits are shown in the table based on contractual      maturity. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Table      14—Market Value of Equity |
|--------|--------------------------------------------|

|                         |   | December      31, 2009           |
|------------------------------|--------|----------------------------------|
|                         |   | Market      Valueof      Equity  |   | Change      inMarket      Valueof      Equity |   | PercentageChange |   | Asset/LiabilityApprovedPercentChange |
|                         |   | (Dollars in thousands) |
| +300      Basis Points       |   | $                                | 113,575 |   |   | $(96,547 | ) |   | −45.95 | % |   | +/−35 | % |
| +200      Basis Points       |   |                             | 149,838 |   |   | (60,284 | ) |   | −28.69 |   |   | +/−25 |   |
| +100      Basis Points       |   |                             | 182,934 |   |   | (27,187 | ) |   | −12.94 |   |   | +/−15 |   |
| Flat      Rate               |   |                             | 210,122 |   |   | — |   |   | 0.00 |   |   | — |   |
| −100      Basis Points |   |                             | 240,889 |   |   | 30,768 |   |   | 14.64 |   |   | +/−15 |   |
| −200      Basis Points |   |                             | 231,586 |   |   | 21,465 |   |   | 10.22 |   |   | +/−25 |   |
| −300      Basis Points |   |                             | 210,594 |   |   | 473 |   |   | 0.23 |   |   | +/−35 |   |

|   | Provision      for Loan Losses |
|--------|--------------------------------|

|   | Noninterest      Income |
|--------|-------------------------|

----

|   | Noninterest      Expense |
|--------|--------------------------|

----

|   | Income      Taxes |
|--------|-------------------|

|   | Capital |
|--------|---------|

----

----

|   | Liquidity |
|--------|-----------|

----

|   | Table      15—Contractual Obligations and OtherCommitments |
|--------|------------------------------------------------------------------|

|                                                   | December      31, 2009                 |
|--------------------------------------------------------|----------------------------------------|
|                                                   | Total                                  |   | One      year orless | After      oneyear      throughthree      years |   | After      threeyears      throughfive      years |   | After      fiveyears |
|                                                   | (Dollars in thousands)       |
| Minimum      annual operating leases                   | $     101,273 |   | $ | 9,919 |   | $  18,247 |   | $  16,447 |   | $  56,660 |
| Remaining      contractual maturities of time deposits | 1,549,617                              |   |   | 1,192,166 |   | 345,232 |   | 11,115 |   | 1,104 |
| Long-term      borrowings                              | 679,889                                |   |   | 72,513 |   | 274,213 |   | 185,525 |   | 147,638 |
| Subordinated      debt                                 | 93,828                                 |   |   | — |   | — |   | — |   | 93,828 |
| Unfunded      home equity linesof      credit(1)       | 337,391                                |   |   | 10,335 |   | 41,294 |   | 29,546 |   | 256,216 |
| Unfunded      other loan lines of credit               | 339,997                                |   |   | 257,349 |   | 72,083 |   | 10,565 |   | — |
| Standby      letters of credit                         | 40,040                                 |   |   | 34,669 |   | 2,399 |   | 69 |   | 2,903 |
| Total                                                  | $3,142,035                             |   | $ | 1,576,951 |   | $753,468 |   | $253,267 |   | $558,349 |

| (1) | Home      equity lines of credit in the after five years category have no stated      expiration. |
|-----|---------------------------------------------------------------------------------------------------|

----

|   | Fourth      Quarter 2009 Results (Unaudited) |
|--------|----------------------------------------------|

----

|   | Table      16—Selected Quarterly Financial Data(Unaudited) |
|--------|------------------------------------------------------------------|

|                                                     |   | Three      Months Ended 2009 (1) (2) |   | Three      Months Ended 2008 (2) |
|----------------------------------------------------------|--------|--------------------------------------|--------|----------------------------------|
|                                                     |   | Dec.      31                         |   | Sept.      30                    |   | June      30 |   | March      31 |   | Dec.      31 |   |        Sept.      30 |   | June      30 |   |   | March      31 |
| Interest income                                          |   | $                                    | 52,123 |                             | $ | 55,005 |   | $ | 60,045 |   |   | $ | 63,638 |   |   |   | $ | 54,583 |   |  49,942 |   | $ | 49,353 |   |   | $ | 52,416 |   |
| Interest expense                                         |   |                                 | 22,445 |                             |   | 23,567 |   |   | 26,592 |   |   |   | 28,334 |   |   |   |   | 25,136 |   |  24,645 |   |   | 24,164 |   |   |   | 28,209 |   |
| Net      interest income                                 |   |                                 | 29,678 |                             |   | 31,438 |   |   | 33,453 |   |   |   | 35,304 |   |   |   |   | 29,447 |   |  25,297 |   |   | 25,189 |   |   |   | 24,207 |   |
| Provision      for loanlosses                            |   |                                 | 4,450  |                             |   | 14,750 |   |   | 32,000 |   |   |   | 7,121 |   |   |   |   | 7,920 |   |  2,580 |   |   | 3,107 |   |   |   | 1,960 |   |
| Net      interest income after provision for loan losses |   |                                 | 25,228 |                             |   | 16,688 |   |   | 1,453 |   |   |   | 28,183 |   |   |   |   | 21,527 |   |  22,717 |   |   | 22,082 |   |   |   | 22,247 |   |
| Noninterest      income                                  |   |                                 | 13,513 |                             |   | 12,275 |   |   | 21,711 |   |   |   | 16,159 |   |   |   |   | 13,344 |   |  10,445 |   |   | 11,596 |   |   |   | 10,832 |   |
| Noninterest      expense                                 |   |                                 | 36,150 |                             |   | 40,221 |   |   | 252,750 |   |   |   | 38,621 |   |   |   |   | 31,293 |   |  25,153 |   |   | 24,458 |   |   |   | 23,718 |   |
| Income      (loss) before income taxes                   |   |                                 | 2,591  |                             |   | (11,258 |  ) |   |  (229,586 | )  |   |   | 5,721 |   |   |   |   |  3,578 |   |   | 8,009 |   |   |  9,220 |   |   |   | 9,361 |   |
| Income      tax expense (benefit)                        |   |                                 | (211   | )                                |   | (6,889 |  ) |   |  (7,083 | )  |   |   | 1,126 |   |   |   |   | (245 | )  |   |  1,370 |   |   | 1,893 |   |   |   | 2,057 |   |
| Net income      (loss)                                   |   | $                                    | 2,802  |                             | $ | (4,369 |   |  $ |  (222,503 | )  |   | $ | 4,595 |   |   |   |  $ |  3,823 |   | $ | 6,639 |   |   |  7,327 |   |   |  $ | 7,304 |   |
| Net      income (loss) per share                         |   |                                 |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                    |   | $                                    | 0.07   |                             | $ | (0.10 |   |  $ | ( 5.17 | ) |   | $ | 0.11 |   |   |   |  $ |  0.11 |   | $ | 0.21 |   |  $ |  0.24 |   |   |  $ | 0.23 |   |
| Diluted                                                  |   | $                                    | 0.07   |                             | $ | (0.10 |   |  $ |  (5.17 |  ) |   | $ | 0.11 |   |   |   |  $ |  0.11 |   | $ | 0.21 |   |  $ |  0.23 |   |   |  $ | 0.23 |   |

| (1)   | The      results of operations include a non-cash goodwill impairment charge of      $214.5 million during the second quarter of 2009 resulting from the      decrease in the market value of the Corporation’s  stock. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | The      results of operations include the acquisition of Willow Financial      effective December 5, 2008. |
|-----------------|-------------------------------------------------------------------------------------------------------------|

| Item      7A. | Quantitative      and Qualitative Disclosures about MarketRisk |
|---------------|----------------------------------------------------------------|

----

| Item      8. | Financial      Statements and Supplementary Data |   |
|--------------|--------------------------------------------------|--------|

|                                                                                                                                                                    |   | December      31,           |      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|-----------|
|                                                                                                                                                                    |   | 2009                        |      |   | 2008 |   |
|                                                                                                                                                                    |   | (Dollars      in thousands) |      |
| Assets                                                                                                                                                                  |   |                        |      |   |   |   |
| Cash      and due from banks                                                                                                                                            |   | $                           | 56,235    |   |   | $ | 75,305 |   |
| Interest-bearing      deposits in banks                                                                                                                                 |   |                        | 787,722   |   |   |   | 27,221 |   |
| Total      cash and cash equivalents                                                                                                                                    |   |                        | 843,957   |   |   |   | 102,526 |   |
| Residential      mortgage loans held for sale (at fair value)                                                                                                           |   |                        | 37,885    |   |   |   | 17,165 |   |
| Investment      securities available for sale (amortized cost $1,068,649 and $1,186,586,      respectively)                                                             |   |                        | 1,038,153 |   |   |   | 1,141,948 |   |
| Investment      securities held to maturity (fair value $25,192 and $50,059,      respectively)                                                                         |   |                        | 25,324    |   |   |   | 50,434 |   |
| Federal      Home Loan Bank stock, Federal Reserve Bank stock and other      investments                                                                                |   |                        | 44,647    |   |   |   | 39,279 |   |
| Loans      and leases                                                                                                                                                   |   |                        | 2,955,493 |   |   |   | 3,668,079 |   |
| Less:      Allowance for loan losses                                                                                                                                    |   |                        | (66,620   | ) |   |   | (49,955 | ) |
| Net      loans and leases                                                                                                                                               |   |                        | 2,888,873 |   |   |   | 3,618,124 |   |
| Premises      and equipment, net                                                                                                                                        |   |                        | 47,160    |   |   |   | 50,605 |   |
| Accrued      interest receivable                                                                                                                                        |   |                        | 15,150    |   |   |   | 21,120 |   |
| Goodwill                                                                                                                                                                |   |                        | 21,622    |   |   |   | 240,701 |   |
| Intangible      assets, net                                                                                                                                             |   |                        | 21,753    |   |   |   | 27,807 |   |
| Bank-owned      life insurance                                                                                                                                          |   |                        | 90,216    |   |   |   | 87,081 |   |
| Other      assets                                                                                                                                                       |   |                        | 113,056   |   |   |   | 93,719 |   |
| Total      assets                                                                                                                                                       |   | $                           | 5,187,796 |   |   | $ | 5,490,509 |   |
| Liabilities      and Shareholders’ Equity                                                                                                                         |   |                        |      |   |   |   |   |   |
| Deposits                                                                                                                                                                |   |                        |      |   |   |   |   |   |
| Noninterest-bearing                                                                                                                                                     |   | $                           | 523,475   |   |   | $ | 479,469 |   |
| Interest-bearing:                                                                                                                                                       |   |                        |      |   |   |   |   |   |
| Checking                                                                                                                                                                |   |                        | 665,039   |   |   |   | 556,855 |   |
| Money      market                                                                                                                                                       |   |                        | 887,423   |   |   |   | 1,042,302 |   |
| Savings                                                                                                                                                                 |   |                        | 319,293   |   |   |   | 270,885 |   |
| Time      deposits                                                                                                                                                      |   |                        | 1,549,617 |   |   |   | 1,588,921 |   |
| Total      deposits                                                                                                                                                     |   |                        | 3,944,847 |   |   |   | 3,938,432 |   |
| Federal      funds purchased and short-term securities sold under agreements to      repurchase                                                                         |   |                        | 71,470    |   |   |   | 136,113 |   |
| Other      short-term borrowings                                                                                                                                        |   |                        | 51,390    |   |   |   | 984 |   |
| Long-term      borrowings                                                                                                                                               |   |                        | 679,889   |   |   |   | 759,658 |   |
| Accrued      interest payable                                                                                                                                           |   |                        | 38,327    |   |   |   | 34,495 |   |
| Subordinated      debt                                                                                                                                                  |   |                        | 93,828    |   |   |   | 93,743 |   |
| Other      liabilities                                                                                                                                                  |   |                        | 46,474    |   |   |   | 52,377 |   |
| Total      liabilities                                                                                                                                                  |   |                        | 4,926,225 |   |   |   | 5,015,802 |   |
| Shareholders’      equity:                                                                                                                                        |   |                        |      |   |   |   |   |   |
| Series preferred      stock, par value $1 per share; authorized 8,000,000 shares, none      issued                                                                 |   |                        | —   |   |   |   | — |   |
| Common      stock, par value $1 per share; authorized 200,000,000 shares; issued      43,139,515 and 43,022,387 shares at December 31, 2009 and 2008,      respectively |   |                        | 43,140    |   |   |   | 43,022 |   |
| Additional      paid-in capital                                                                                                                                         |   |                        | 380,134   |   |   |   | 379,551 |   |
| (Accumulated      deficit) retained earnings                                                                                                                            |   |                        | (141,872  | ) |   |   | 82,295 |   |
| Accumulated      other comprehensive loss                                                                                                                               |   |                        | (19,822   | ) |   |   | (29,017 | ) |
| Treasury      stock, at cost: 527 and 76,635 shares at December 31, 2009 and 2008,      respectively                                                                    |   |                        | (9        | ) |   |   | (1,144 | ) |
| Total      shareholders’ equity                                                                                                                                   |   |                        | 261,571   |   |   |   | 474,707 |   |
| Total      liabilities and shareholders’ equity                                                                                                                   |   | $                           | 5,187,796 |   |   | $ | 5,490,509 |   |

----

|                                                                                   |   | Year      Ended December 31,                       |       |
|----------------------------------------------------------------------------------------|--------|----------------------------------------------------|------------|
|                                                                                   |   | 2009                                               |       |   | 2008 |   |   | 2007 |   |
|                                                                                   |   | (Dollars      in thousands, except per share data) |       |
| Interest      income                                                                   |   |                                               |       |   |   |   |   |   |   |
| Loans      and leases, including fees                                                  |   | $                                                  | 177,657    |   |   | $ | 153,725 |   |   | $ | 145,319 |   |
| Investment      securities:                                                            |   |                                               |       |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                |   |                                               | 39,254     |   |   |   | 39,195 |   |   |   | 34,803 |   |
| Exempt      from federal taxes                                                         |   |                                               | 12,873     |   |   |   | 12,277 |   |   |   | 10,863 |   |
| Federal      funds sold and securities purchased under agreements to    resell         |   |                                               | ―    |   |   |   | 996 |   |   |   | 3,084 |   |
| Deposits      in banks                                                                 |   |                                               | 1,027      |   |   |   | 101 |   |   |   | 492 |   |
| Total      interest income                                                             |   |                                               | 230,811    |   |   |   | 206,294 |   |   |   | 194,561 |   |
| Interest      expense                                                                  |   |                                               |       |   |   |   |   |   |   |   |   |   |
| Savings      and money market deposits                                                 |   |                                               | 20,036     |   |   |   | 25,140 |   |   |   | 47,980 |   |
| Time      deposits                                                                     |   |                                               | 51,986     |   |   |   | 53,771 |   |   |   | 41,309 |   |
| Short-term      borrowings                                                             |   |                                               | 632        |   |   |   | 2,099 |   |   |   | 5,431 |   |
| Long-term      borrowings                                                              |   |                                               | 28,284     |   |   |   | 21,144 |   |   |   | 17,407 |   |
| Total      interest expense                                                            |   |                                               | 100,938    |   |   |   | 102,154 |   |   |   | 112,127 |   |
| Net      interest income                                                               |   |                                               | 129,873    |   |   |   | 104,140 |   |   |   | 82,434 |   |
| Provision      for loan losses                                                         |   |                                               | 58,321     |   |   |   | 15,567 |   |   |   | 10,550 |   |
| Net      interest income after provision for loan losses                               |   |                                               | 71,552     |   |   |   | 88,573 |   |   |   | 71,884 |   |
| Noninterest      income                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |
| Service      charges                                                                   |   |                                               | 17,284     |   |   |   | 13,515 |   |   |   | 9,690 |   |
| Gain      (loss) on sales of investment securities, net                                |   |                                               | 11,418     |   |   |   | 2,642 |   |   |   | 1,187 |   |
| Other-than-temporary      impairment (OTTI) losses on available for sale securities    |   |                                               | (16,638    | ) |   |   | (1,923 | ) |   |   | (55 | ) |
| Portion      of OTTI losses recognized in other comprehensive loss (before      taxes) |   |                                               | 7,239      |   |   |   | ― |   |   |   | ― |   |
| Net      OTTI losses recognized in operations on available for sale      securities    |   |                                               | (9,399     | ) |   |   | (1,923 | ) |   |   | (55 | ) |
| Gain      on mortgage banking sales, net                                               |   |                                               | 9,018      |   |   |   | 557 |   |   |   | 472 |   |
| Gain      on sale-leaseback of bank properties                                         |   |                                               | ―    |   |   |   | ― |   |   |   | 2,788 |   |
| Wealth      management                                                                 |   |                                               | 18,096     |   |   |   | 18,644 |   |   |   | 18,642 |   |
| Bank-owned      life insurance                                                         |   |                                               | 3,133      |   |   |   | 2,777 |   |   |   | 2,489 |   |
| Other      income                                                                      |   |                                               | 14,108     |   |   |   | 10,005 |   |   |   | 8,125 |   |
| Total      noninterest income                                                          |   |                                               | 63,658     |   |   |   | 46,217 |   |   |   | 43,338 |   |
| Noninterest      expense                                                               |   |                                               |       |   |   |   |   |   |   |   |   |   |
| Salaries,      wages and employee benefits                                             |   |                                               | 71,093     |   |   |   | 56,108 |   |   |   | 48,832 |   |
| Occupancy                                                                              |   |                                               | 15,495     |   |   |   | 10,101 |   |   |   | 7,008 |   |
| Furniture      and equipment                                                           |   |                                               | 5,732      |   |   |   | 4,432 |   |   |   | 3,941 |   |
| Professional      fees                                                                 |   |                                               | 12,595     |   |   |   | 4,939 |   |   |   | 2,912 |   |
| Intangibles      expense                                                               |   |                                               | 4,315      |   |   |   | 4,208 |   |   |   | 1,225 |   |
| FDIC      deposit insurance                                                            |   |                                               | 13,473     |   |   |   | 2,082 |   |   |   | 303 |   |
| Goodwill      impairment                                                               |   |                                               | 214,536    |   |   |   | ― |   |   |   | ― |   |
| Merger      charges                                                                    |   |                                               | ―    |   |   |   | 3,430 |   |   |   | 423 |   |
| Other      expense                                                                     |   |                                               | 30,503     |   |   |   | 19,322 |   |   |   | 16,711 |   |
| Total      noninterest expense                                                         |   |                                               | 367,742    |   |   |   | 104,622 |   |   |   | 81,355 |   |
| (Loss)      income before income taxes                                                 |   |                                               | (232,532   | ) |   |   | 30,168 |   |   |   | 33,867 |   |
| Income      tax (benefit) expense                                                      |   |                                               | (13,057    | ) |   |   | 5,075 |   |   |   | 7,272 |   |
| Net      (loss) income                                                                 |   | $                                                  | (219,475   | ) |   | $ | 25,093 |   |   | $ | 26,595 |   |
| Net      (loss) income per share information:                                          |   |                                               |       |   |   |   |   |   |   |   |   |   |
| Basic                                                                                  |   | $                                                  | (5.09      | ) |   | $ | 0.78 |   |   | $ | 0.91 |   |
| Diluted                                                                                |   | $                                                  | (5.09      | ) |   | $ | 0.78 |   |   | $ | 0.90 |   |
| Cash      dividends per share                                                          |   | $                                                  | 0.11       |   |   | $ | 0.80 |   |   | $ | 0.80 |   |
| Weighted      average number of common shares:                                         |   |                                               |       |   |   |   |   |   |   |   |   |   |
| Basic                                                                                  |   |                                               | 43,078,543 |   |   |   | 32,201,150 |   |   |   | 29,218,671 |   |
| Diluted                                                                                |   |                                               | 43,078,543 |   |   |   | 32,364,137 |   |   |   | 29,459,898 |   |

----

|                                                                                       |   | CommonStock                                                           |    | TreasuryStock |   | Common   |    |                | Retained                   |   | Accumulated                     |   |          |   |    |                            |
|--------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|---------|---------------|--------|----------|---------|---------------------|----------------------------|--------|---------------------------------|--------|---------------|--------|---------|---------------------------------|
|                                                                                       |   | Number                                                                |    | Number        |   | Stock    |    | Additional          | Earnings                   |   | Other                           |   |          |   |    |                            |
|                                                                                       |   | ofShares                                                              |    | ofShares      |   | ParValue |    | Paid      inCapital | (Accumulated      Deficit) |   | Comprehensive(Loss)      Income |   | TreasuryStock | Total  |    | ComprehensiveIncome (Loss) |
|                                                                                       |   | (Dollars and share information in thousands) |    |
| Balance      January 1, 2007                                                               |   |                                                                  | 29,074  |          |   |     | (109    | )                   |                       |   | 29,074                          |   |          |   | 194,713 |                            |  79,339 |   |   |   | (6,103 | ) |   |   |  (2,272 | ) | 294,751 |   |   |   |
| Issuance      of stock for stock options, net of tax and excess tax    benefits            |   |                                                                  | — |          |   |     | 76      |                |                       |   | —                         |   |          |   | (386)   |                            | — |   |   |   | — |   |   |   | 1,391 |   | 1,005 |   |   |   |
| Issuance      of stock awards                                                              |   |                                                                  | — |          |   |     | — |                |                       |   | —                         |   |          |   | (1)     |                            | — |   |   |   | — |   |   |   | 5 |   | 4 |   |   |   |
| Stock-based      compensation expense                                                      |   |                                                                  | — |          |   |     | — |                |                       |   | —                         |   |          |   | 118     |                            | — |   |   |   | — |   |   |   | — |   | 118 |   |   |   |
| Net      income                                                                            |   |                                                                  | — |          |   |     | — |                |                       |   | —                         |   |          |   | — |                            | 26,595 |   |   |   | — |   |   |   | — |   | 26,595 |   | $26,595 |   |
| Other      comprehensive income, net of reclassifications andtax                      |   |                                                                  | — |          |   |     | — |                |                       |   | —                         |   |          |   | — |                            | — |   |   |   | 3,537 |   |   |   | — |   | 3,537 |   | 3,537 |   |
| Issuance      of common stock for acquisition of East Penn Financial                       |   |                                                                  | 2,433   |          |   |     | — |                |                       |   | 2,433                           |   |          |   | 36,686  |                            | — |   |   |   | — |   |   |   | — |   | 39,119 |   |   |   |
| Purchases      of treasury stock                                                           |   |                                                                  | — |          |   |     | (141    | )                   |                       |   | —                         |   |          |   | — |                            | — |   |   |   | — |   |   |   | (2,196 | ) | (2,196 | ) |   |   |
| Cash      dividends                                                                        |   |                                                                  | — |          |   |     | — |                |                       |   | —                         |   |          |   | — |                            | (23,623 | ) |   |   | — |   |   |   | — |   | (23,623 | ) |   |   |
| Comprehensive      income                                                                  |   |                                                                  |    |          |   |     |    |                |                       |   |                            |   |          |   |    |                            |   |   |   |   |   |   |   |   |   |   |   |   | $30,132 |   |
| Balance      December 31, 2007                                                             |   |                                                                  | 31,507  |          |   |     | (174    | )                   |                       |   | 31,507                          |   |          |   | 231,130 |                            |  82,311 |   |   |   | (2,566 | ) |   |   |  (3,072 | ) | 339,310 |   |   |   |
| Issuance      of stock for stock options, net of excess tax benefits                       |   |                                                                  | — |          |   |     | 165     |                |                       |   | —                         |   |          |   | (992    | )                               | — |   |   |   | — |   |   |   | 2,850 |   | 1,858 |   |   |   |
| Issuance      of stock awards                                                              |   |                                                                  | — |          |   |     | — |                |                       |   | —                         |   |          |   | — |                            | — |   |   |   | — |   |   |   | 2 |   | 2 |   |   |   |
| Stock-based      compensation expense                                                      |   |                                                                  | — |          |   |     | — |                |                       |   | —                         |   |          |   | 136     |                            | — |   |   |   | — |   |   |   | — |   | 136 |   |   |   |
| Net      income                                                                            |   |                                                                  | — |          |   |     | — |                |                       |   | —                         |   |          |   | — |                            | 25,093 |   |   |   | — |   |   |   | — |   | 25,093 |   | $25,093 |   |
| Other      comprehensive loss, net of reclassificationsand      tax                        |   |                                                                  | — |          |   |     | — |                |                       |   | —                         |   |          |   | — |                            | — |   |   |   | (26,451 | ) |   |   | — |   | (26,451 | ) | (26,451 | ) |
| Issuance      of common stock for acquisition of Willow Financial                          |   |                                                                  | 11,515  |          |   |     | — |                |                       |   | 11,515                          |   |          |   | 149,277 |                            | — |   |   |   | — |   |   |   | — |   | 160,792 |   |   |   |
| Cash      dividends                                                                        |   |                                                                  |    |          |   |     |    |                |                       |   |                            |   |          |   |    |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Treasury      stock received in sale of subsidiary                                         |   |                                                                  | — |          |   |     | (66     | )                   |                       |   | —                         |   |          |   | — |                            | — |   |   |   | — |   |   |   | (906 | ) | (906 | ) |   |   |
| Cash      dividends                                                                        |   |                                                                  | — |          |   |     | — |                |                       |   | —                         |   |          |   | — |                            | (25,109 | ) |   |   | — |   |   |   | — |   | (25,109 | ) |   |   |
| Other                                                                                      |   |                                                                  | — |          |   |     | (1      | )                   |                       |   | —                         |   |          |   | — |                            | — |   |   |   | — |   |   |   | (18 | ) | (18 | ) |   |   |
| Comprehensive      loss                                                                    |   |                                                                  |    |          |   |     |    |                |                       |   |                            |   |          |   |    |                            |   |   |   |   |   |   |   |   |   |   |   |   | $(1,358 | ) |
| Balance      December 31, 2008                                                             |   |                                                                  | 43,022  |          |   |     | (76     | )                   |                       | $      | 43,022                          |   |          | $      | 379,551 |                            | $82,295 |   |   | $ | (29,017 | ) |   | $ | (1,144 | ) | $474,707 |   |   |   |
| Issuance      of stock for stock options, net of excess tax benefits                       |   |                                                                  | 53      |          |   |     | 59      |                |                       |   | 53                              |   |          |   | 65      |                            | — |   |   |   | — |   |   |   | 751 |   | 869 |   |   |   |
| Issuance      of stock under dividend reinvestment and stock purchase    plan              |   |                                                                  | 65      |          |   |     | 39      |                |                       |   | 65                              |   |          |   | 4       |                            | — |   |   |   | — |   |   |   | 599 |   | 668 |   |   |   |
| Conversion      of Willow Financial Recognition and Retention Plan shares to      treasury |   |                                                                  | — |          |   |     | (23     | )                   |                       |   | —                         |   |          |   | 206     |                            | — |   |   |   | — |   |   |   | (215 | ) | (9 | ) |   |   |
| Stock-based      compensation expense                                                      |   |                                                                  | — |          |   |     | — |                |                       |   | —                         |   |          |   | 308     |                            | — |   |   |   | — |   |   |   | — |   | 308 |   |   |   |
| Net      loss                                                                              |   |                                                                  | — |          |   |     | — |                |                       |   | —                         |   |          |   | — |                            | (219,475 | ) |   |   | — |   |   |   | — |   | (219,475 | ) | $(219,475 | ) |
| Other      comprehensive income, net of reclassifications and tax                          |   |                                                                  | — |          |   |     | — |                |                       |   | —                         |   |          |   | — |                            | — |   |   |   | 9,195 |   |   |   | — |   | 9,195 |   | 9,195 |   |
| Cash      dividends                                                                        |   |                                                                  | — |          |   |     | — |                |                       |   | —                         |   |          |   | — |                            | (4,692 | ) |   |   | — |   |   |   | — |   | (4,692 | ) |   |   |
| Comprehensive      loss                                                                    |   |                                                                  |    |          |   |     |    |                |                       |   |                            |   |          |   |    |                            |   |   |   |   |   |   |   |   |   |   |   |   | $(210,280 | ) |
| Balance      December 31, 2009                                                             |   |                                                                  | 43,140  |          |   |     | (1      | )                   |                       | $      | 43,140                          |   |          | $      | 380,134 |                            | (141,872) |   |   | $ | (19,822 | ) |   | $ | (9 | ) | $261,571 |   |   |   |

----

|                                                                                                        |   | Year      Ended December 31,     |     |
|-------------------------------------------------------------------------------------------------------------|--------|----------------------------------|----------|
|                                                                                                        |   | 2009                             |     |   | 2008 |   |   | 2007 |   |
|                                                                                                        |   | (Dollars in thousands) |     |
| Operating      activities                                                                                   |   |                             |     |   |   |   |   |   |   |
| Net      (loss) income                                                                                      |   | $                                | (219,475 | ) |   | $ | 25,093 |   |   | $ | 26,595 |   |
| Adjustments      to reconcile net (loss) income to net cash provided by operating      activities:          |   |                             |     |   |   |   |   |   |   |   |   |   |
| Provision      for loan losses                                                                              |   |                             | 58,321   |   |   |   | 15,567 |   |   |   | 10,550 |   |
| Depreciation                                                                                                |   |                             | 6,274    |   |   |   | 4,308 |   |   |   | 4,007 |   |
| Goodwill      impairment                                                                                    |   |                             | 214,536  |   |   |   | — |   |   |   | — |   |
| Intangibles      expense                                                                                    |   |                             | 4,315    |   |   |   | 4,208 |   |   |   | 1,225 |   |
| Net      (accretion) amortization of discounts/premiums on investments and      borrowings                  |   |                             | (3,281   | ) |   |   | 320 |   |   |   | 1,761 |   |
| Deferred      income benefit                                                                                |   |                             | (5,652   | ) |   |   | (3,553 | ) |   |   | (8,916 | ) |
| Gain      on sales of investment securities, net                                                            |   |                             | (11,418  | ) |   |   | (2,642 | ) |   |   | (1,132 | ) |
| Other-than-temporary      impairment on investments available for sale                                      |   |                             | 9,399    |   |   |   | 1,923 |   |   |   | — |   |
| Gain      on mortgage banking sales, net                                                                    |   |                             | (9,018   | ) |   |   | (557 | ) |   |   | (472 | ) |
| Gain      on sale-leaseback of bank properties                                                              |   |                             | —  |   |   |   | — |   |   |   | (2,788 | ) |
| Originations      of loans held for sale                                                                    |   |                             | (608,114 | ) |   |   | (87,623 | ) |   |   | (40,558 | ) |
| Proceeds      from sale of loans originated for sale                                                        |   |                             | 596,412  |   |   |   | 72,370 |   |   |   | 41,667 |   |
| Bank-owned      life insurance income                                                                       |   |                             | (3,133   | ) |   |   | (2,777 | ) |   |   | (2,489 | ) |
| Death      benefit on bank-owned life insurance                                                             |   |                             | —  |   |   |   | (405 | ) |   |   | — |   |
| Stock-based      compensation expense                                                                       |   |                             | 308      |   |   |   | 136 |   |   |   | 118 |   |
| Pension      termination expense                                                                            |   |                             | —  |   |   |   | — |   |   |   | 1,917 |   |
| Net      decrease in accrued interest receivable                                                            |   |                             | 5,970    |   |   |   | 798 |   |   |   | 307 |   |
| Net      increase (decrease) in accrued interest payable                                                    |   |                             | 3,832    |   |   |   | 1,615 |   |   |   | (4,410 | ) |
| Net      (increase) decrease in other assets                                                                |   |                             | (9,612   | ) |   |   | (1,723 | ) |   |   | 5 |   |
| Net      (decrease) increase in other liabilities                                                           |   |                             | (4,590   | ) |   |   | (1,303 | ) |   |   | 5,773 |   |
| Other,      net                                                                                             |   |                             | 1,660    |   |   |   | (68 | ) |   |   | 1,085 |   |
| Net      cash provided by operating activities                                                              |   |                             | 26,734   |   |   |   | 25,687 |   |   |   | 34,245 |   |
| Investing      activities                                                                                   |   |                             |     |   |   |   |   |   |   |   |   |   |
| Proceeds      from sales of investment securities available for sale                                        |   |                             | 470,840  |   |   |   | 208,456 |   |   |   | 186,218 |   |
| Proceeds      from maturity or calls of investment securities held to      maturity                         |   |                             | 25,485   |   |   |   | 6,864 |   |   |   | 1,500 |   |
| Proceeds      from maturity or calls of investment securities available for      sale                       |   |                             | 228,290  |   |   |   | 167,067 |   |   |   | 150,110 |   |
| Proceeds,      redemption of Federal Home Loan Bank stock and reduction in other      investments           |   |                             | 1,234    |   |   |   | 5,513 |   |   |   | 7,811 |   |
| Purchases      of investment securities available for sale                                                  |   |                             | (581,110 | ) |   |   | (409,861 | ) |   |   | (343,679 | ) |
| Purchases      of Federal Home Loan Bank stock, Federal Reserve Bank stock and other      investments       |   |                             | (6,602   | ) |   |   | (11,091 | ) |   |   | (3,737 | ) |
| Proceeds      from sale of indirect and residential loans                                                   |   |                             | 234,826  |   |   |   | — |   |   |   | — |   |
| Other      net decrease (increase) in loans                                                                 |   |                             | 432,171  |   |   |   | (118,091 | ) |   |   | (83,799 | ) |
| Net      cash (paid) acquired due to acquisitions                                                           |   |                             | (877     | ) |   |   | 42,107 |   |   |   | (34,010 | ) |
| Payments      to fund pension plan                                                                          |   |                             | —  |   |   |   | (1,250 | ) |   |   | — |   |
| Purchases      of premises and equipment                                                                    |   |                             | (6,027   | ) |   |   | (10,072 | ) |   |   | (10,912 | ) |
| Proceeds      from sales of premises and equipment                                                          |   |                             | 40       |   |   |   | 866 |   |   |   | 39,712 |   |
| Proceeds      from sales of other real estate                                                               |   |                             | 2,249    |   |   |   | 1,244 |   |   |   | 13 |   |
| Net      cash provided by (used in) investing activities                                                    |   |                             | 800,519  |   |   |   | (118,248 | ) |   |   | (90,773 | ) |
| Financing      activities                                                                                   |   |                             |     |   |   |   |   |   |   |   |   |   |
| Net      increase in deposits                                                                               |   |                             | 6,415    |   |   |   | 6,722 |   |   |   | 85,491 |   |
| (Decrease)      increase in federal funds purchased and securities sold under agreements      to repurchase |   |                             | (64,643  | ) |   |   | 9,605 |   |   |   | (6,429 | ) |
| Increase      (decrease) in short-term borrowings                                                           |   |                             | 50,406   |   |   |   | (1,031 | ) |   |   | 658 |   |
| Advances      of long-term borrowings                                                                       |   |                             | —  |   |   |   | 125,000 |   |   |   | 125,000 |   |
| Repayments      of long-term borrowings                                                                     |   |                             | (74,845  | ) |   |   | (131,347 | ) |   |   | (62,003 | ) |
| Proceeds      from subordinated debt issuance                                                               |   |                             | —  |   |   |   | — |   |   |   | 23,196 |   |
| Cash      dividends                                                                                         |   |                             | (4,692   | ) |   |   | (25,109 | ) |   |   | (23,623 | ) |
| Repurchase      of common stock                                                                             |   |                             | —  |   |   |   | — |   |   |   | (2,196 | ) |
| Proceeds      from the exercise of stock options                                                            |   |                             | 869      |   |   |   | 1,567 |   |   |   | 925 |   |
| Proceeds      from issuance of stock under dividend reinvestment and stock purchase      plan               |   |                             | 668      |   |   |   | — |   |   |   | — |   |
| Excess      tax benefits from stock-based compensation                                                      |   |                             | —  |   |   |   | 277 |   |   |   | 42 |   |
| Net      cash (used in) provided by financing activities                                                    |   |                             | (85,822  | ) |   |   | (14,316 | ) |   |   | 141,061 |   |
| Net      (decrease) increase in cash and cash equivalents                                                   |   |                             | 741,431  |   |   |   | (106,877 | ) |   |   | 84,533 |   |
| Cash      and cash equivalents at beginning of year                                                         |   |                             | 102,526  |   |   |   | 209,403 |   |   |   | 124,870 |   |
| Cash      and cash equivalents at end of year                                                               |   | $                                | 843,957  |   |   | $ | 102,526 |   |   | $ | 209,403 |   |
| Cash      paid during the year for:                                                                         |   |                             |     |   |   |   |   |   |   |   |   |   |
| Interest                                                                                                    |   | $                                | 102,659  |   |   | $ | 101,550 |   |   | $ | 116,649 |   |
| Income      taxes                                                                                           |   | $                                | 2,058    |   |   | $ | 17,668 |   |   | $ | 6,145 |   |
| Supplemental      disclosure of noncash investing and financing activities:                                 |   |                             |     |   |   |   |   |   |   |   |   |   |
| Transfer      of assets from loans to other real estate owned                                               |   | $                                | 2,625    |   |   | $ | 2,416 |   |   | $ | 51 |   |
| Acquisitions,      common stock issued                                                                      |   | $                                | —  |   |   | $ | 160,792 |   |   | $ | 39,119 |   |

----

----

|   | Principles      of Consolidation and Basis ofPresentation |
|--------|-----------------------------------------------------------|

|   | Cash      and Cash Equivalents |
|--------|--------------------------------|

----

|   | Investment      Securities |
|--------|----------------------------|

|   | Loans |
|--------|-------|

----

|   | Allowance      for Loan Losses |
|--------|--------------------------------|

----

----

|   | Mortgage      Servicing |
|--------|-------------------------|

|   | Premises      and Equipment |
|--------|-----------------------------|

----

|   | Note      2—Summary of Significant Accounting Policies  (Continued) |
|--------|---------------------------------------------------------------------------|

|   | Net      Assets in Foreclosure |
|--------|--------------------------------|

|   | Goodwill      and Other Intangible Assets |
|--------|-------------------------------------------|

|   | Derivatives |
|--------|-------------|

----

|   | Note      2—Summary of Significant Accounting Policies  (Continued) |
|--------|---------------------------------------------------------------------------|

|   | Stock-Based      Compensation |
|--------|-------------------------------|

|   | Income      Taxes |
|--------|-------------------|

----

|   | Note      2—Summary of Significant Accounting Policies  (Continued) |
|--------|---------------------------------------------------------------------------|

|   | Pension      Plans |
|--------|--------------------|

|   | Bank-Owned      Life Insurance |
|--------|--------------------------------|

|   | Earnings      (Loss) Per Share |
|--------|--------------------------------|

|   | Marketing      Costs |
|--------|----------------------|

----

|   | Securities      Sold Under Agreements to Repurchase |
|--------|-----------------------------------------------------|

|   | Variable      Interest Entities |
|--------|---------------------------------|

|   | Recent      Accounting Pronouncements |
|--------|---------------------------------------|

----

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | (Dollars      in thousands) |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------|
| Contractually      required payments at December 31, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                        |   |
| Real      estate                                                                                                                                                         |   | $                           | 584    |   |
| Commercial      and      industrial                                                                                                                                      |   |                        | 6,564  |   |
| Total                                                                                                                                                                                        |   | $                           | 7,148  |   |
| Cash      flows expected to be collected at December 31,      2009                                                                                                       |   | $                           | 3,774  |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | (Dollars      in thousands) |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------|
| Real      estate                                                                                                                          |   | $                           | 446    |   |
| Commercial      and      industrial                                                                                                       |   |                        | 3,328  |   |
| Total carrying      value                                                                                                                                     |   | $                           | 3,774  |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 2008                                                   |    |   | 2007   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|---------|--------|--------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | (Dollars      in thousands, except for per share data) |    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                   |    |   |   |   |
| Total      interest      income                                                                                         |   | $                                                      | 287,402 |   |   | $      | 287,102 |   |
| Total      interest      expense                                                                                        |   |                                                   | 132,274 |   |   |   | 150,632 |   |
| Net      interest      income                                                                                           |   |                                                   | 155,128 |   |   |   | 136,470 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                   |    |   |   |   |   |   |
| Provision      for loan      losses                                                                                     |   |                                                   | 23,079  |   |   |   | 11,964 |   |
| Net      interest income after provision for loan losses                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                   | 132,049 |   |   |   | 124,506 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                   |    |   |   |   |   |   |
| Total      non-interest      income                                                                                     |   |                                                   | 57,030  |   |   |   | 57,428 |   |
| Total      non-interest      expense                                                                                    |   |                                                   | 173,973 |   |   |   | 133,798 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                   |    |   |   |   |   |   |
| Income      before income      taxes                                                                                    |   |                                                   | 15,106  |   |   |   | 48,136 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                   |    |   |   |   |   |   |
| Income      tax expense      (1)                                                                                        |   |                                                   | 1,736   |   |   |   | 10,852 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                   |    |   |   |   |   |   |
| Net      income                                                                                                         |   | $                                                      | 13,370  |   |   | $      | 37,284 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                   |    |   |   |   |   |   |
| Basic      earnings per      share                                                                                 |   | $                                                      | 0.31    |   |   | $      | 0.92 |   |
| Diluted      earnings per      share                                                                               |   | $                                                      | 0.31    |   |   | $      | 0.91 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                   |    |   |   |   |   |   |

----

----

|   | Note4—Restrictions      on Cash and Due from Banks |
|--------|----------------------------------------------------------|

|   | Note      5—Investment Securities |
|--------|-----------------------------------------|

|                                                               | December      31, 2009           |
|--------------------------------------------------------------------|----------------------------------|
|                                                               | AmortizedCost                    |   | GrossUnrealizedGains |   | GrossUnrealizedLosses | Estimated      Fair Value |
|                                                               | (Dollars      in thousands)      |
| Available      for sale                                            |                             |   |   |   |   |   |   |   |   |   |
| Obligations      of U.S. government agencies and corporations | $   500           |   | $ | 3 |   |   | $ | — |   | $     503 |
| Obligations      of states and political subdivisions              | 214,452                          |   |   | 7,168 |   |   |   | (1,360 | ) | 220,260 |
| Residential      mortgage-backed securities                        | 786,502                          |   |   | 12,465 |   |   |   | (14,877 | ) | 784,090 |
| Trust      preferred pools/collateralized obligations              | 42,502                           |   |   | 100 |   |   |   | (32,733 | ) | 9,869 |
| Corporate      bonds                                               | 3,240                            |   |   | 28 |   |   |   | (1,053 | ) | 2,215 |
| Equity      securities                                             | 21,453                           |   |   | 136 |   |   |   | (373 | ) | 21,216 |
| Total      investment securities available for sale                | $1,068,649                       |   | $ | 19,900 |   |   | $ | (50,396 | ) | $1,038,153 |
| Held      to maturity                                              |                             |   |   |   |   |   |   |   |   |   |
| Obligations      of U.S. government agencies and corporations | $    — |   | $ | — |   |   | $ | — |   | $    — |
| Obligations      of states and political subdivisions              | 25,323                           |   |   | 89 |   |   |   | (220 | ) | 25,192 |
| Total      investment securities held to maturity                  | $  25,323              |   | $ | 89 |   |   | $ | (220 | ) | $  25,192 |

|                                                               | December      31, 2008          |
|--------------------------------------------------------------------|---------------------------------|
|                                                               | AmortizedCost                   |   | GrossUnrealizedGains |   | GrossUnrealizedLosses | Estimated      Fair Value |
|                                                               | (Dollars      in thousands)     |
| Available      for sale                                            |                            |   |   |   |   |   |   |   |   |   |
| Obligations      of U.S. government agencies and corporations | $    93,501 |   | $ | 419 |   |   | $ | (26 | ) | $     93,894 |
| Obligations      of states and political subdivisions              | 288,415                         |   |   | 4,798 |   |   |   | (6,338 | ) | 286,875 |
| Residential      mortgage-backed securities                        | 710,385                         |   |   | 14,389 |   |   |   | (19,291 | ) | 705,483 |
| Trust      preferred pools/collateralized obligations              | 50,214                          |   |   | 734 |   |   |   | (35,084 | ) | 15,864 |
| Corporate      bonds                                               | 21,073                          |   |   | 286 |   |   |   | (3,192 | ) | 18,167 |
| Equity      securities                                             | 22,998                          |   |   | 57 |   |   |   | (1,390 | ) | 21,665 |
| Total      investment securities available for sale                | $1,186,586                      |   | $ | 20,683 |   |   | $ | (65,321 | ) | $1,141,948 |
| Held      to maturity                                              |                            |   |   |   |   |   |   |   |   |   |
| Obligations      of U.S. government agencies and corporations | $    3,880  |   | $ | 122 |   |   | $ | — |   | $    4,002 |
| Obligations      of states and political subdivisions              | 46,554                          |   |   | 119 |   |   |   | (616 | ) | 46,057 |
| Total      investment securities held to maturity                  | $  50,434             |   | $ | 241 |   |   | $ | (616 | ) | $  50,059 |

----

|                                                          |   | December      31, 2009           |                     |
|---------------------------------------------------------------|--------|----------------------------------|--------------------------|
|                                                          |   | Less      than 12 months         | 12      months or longer | Total |   |
| Description      ofSecurities                                 |   | # ofSecurities              | FairValue                |   | UnrealizedLosses | #      ofSecurities | FairValue | UnrealizedLosses | #      ofSecurities | FairValue | UnrealizedLosses |   |
|                                                          |   | (Dollars in thousands) |                     |
| Obligations      of U.S. government agencies and corporations |   |                             | —                  |   | $   — |   | $ | — |   | — | $      — | $       — |   | 3 | $ — | $      — |   |
| Obligations      of states and political subdivisions         |   |                             | 46                       |   | 24,471 |   |   | (803 | ) | 15 | 13,007 | (777 | ) | 61 | 37,478 | (1,580 | ) |
| Residential      mortgage-backed securities                   |   |                             | 16                       |   | 123,033 |   |   | (951 | ) | 32 | 69,491 | (13,925 | ) | 48 | 192,524 | (14,876 | ) |
| Trust      preferred pools/collateralized debt obligations    |   |                             |                     |   |   |   |   |   |   | 14 | 8,858 | (32,733 | ) | 14 | 8,858 | (32,733 | ) |
| Corporate      bonds                                          |   |                             |                     |   |   |   |   |   |   | 1 | 1,437 | (1,053 | ) | 1 | 1,437 | (1,053 | ) |
| Equity      securities                                        |   |                             | 1                        |   | 11,826 |   |   | (174 | ) | 9 | 6,784 | (200 | ) | 10 | 18,610 | (374 | ) |
| Totals                                                        |   |                             | 63                       |   | $159,330 |   | $ | (1,928 | ) | 71 | $99,577 | $(48,688 | ) | 134 | $258,907 | $(50,616 | ) |

|                                                          |   | December      31, 2008           |                     |
|---------------------------------------------------------------|--------|----------------------------------|--------------------------|
|                                                          |   | Less      than 12 months         | 12      months or longer |   | Total |   |
| Description      ofSecurities                                 |   | #      ofSecurities              | FairValue                | UnrealizedLosses | #      ofSecurities | FairValue | UnrealizedLosses |   | #      ofSecurities | FairValue | UnrealizedLosses |   |
|                                                          |   | (Dollars in thousands) |                     |
| Obligations      of U.S. government agencies and corporations |   |                             | 3                        |   | $   29,145 | $      (26 | ) | — | $      — |   | $ | — |   | 3 | $      29,145 | $      (26) |   |
| Obligations      of states and political subdivisions         |   |                             | 290                      |   | 202,231 | (6,715 | ) | 11 | 5,416 |   |   | (239 | ) | 301 | 207,647 | (6,954 | ) |
| Residential      mortgage-backed securities                   |   |                             | 35                       |   | 121,085 | (16,303 | ) | 36 | 43,851 |   |   | (2,988 | ) | 71 | 164,936 | (19,291 | ) |
| Trust      preferred pools/collateralized debt obligations    |   |                             | 4                        |   | 711 | (4,349 | ) | 11 | 9,999 |   |   | (30,732 | ) | 15 | 10,710 | (35,081 |   |
| Corporate      bonds                                          |   |                             | 4                        |   | 9,417 | (1,127 | ) | 3 | 4,652 |   |   | (1,801 | ) | 7 | 14,069 | (2,928 |   |
| Equity      securities                                        |   |                             | 9                        |   | 18,134 | (528 | ) | 6 | 2,956 |   |   | (1,129 | ) | 15 | 21,090 | (1,657 | ) |
| Totals                                                        |   |                             | 345                      |   | $380,723 | $(29,048 | ) | 67 | $66,874 |   | $ | (36,889 | ) | 412 | $447,597 | $(65,937 | ) |

----

| (Dollars      in thousands)                                           |   | Debt      Securities |    |
|-----------------------------------------------------------------------|--------|----------------------|---------|
|                                                                  |   |                 |    |
| Estimated      credit losses as of January 1, 2009                    |   | $                    | — |   |
| Additions      for credit losses not previously recognized            |   |                 | 7,846   |   |
| Estimated      credit losses as of  December 31, 2009  |   | $                    | 7,846   |   |

----

| ·   | The      length of time and the extent to which the fair value has been less than      the amortized cost basis |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| ·   | Adverse      conditions specifically related to the security, industry, or geographic      area |
|--------------------|-------------------------------------------------------------------------------------------------|

| ·   | The      historical and implied volatility of the fair value of the      security |
|--------------------|-----------------------------------------------------------------------------------|

| ·   | The      payment structure of the debtsecurity |
|--------------------|------------------------------------------------|

| ·   | Failure      of the underlying issuers to make scheduled interest or principal      payments |
|--------------------|----------------------------------------------------------------------------------------------|

| ·   | Any      changes to the rating of thesecurity |
|--------------------|-----------------------------------------------|

| ·   | Recoveries      or additional declines in fair value subsequent to the balance sheet      date. |
|--------------------|-------------------------------------------------------------------------------------------------|

| ·   | Discount      rate equal to original coupon spread for the respective security using      forward LIBOR rates; |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | No      calls are assumed; |
|--------------------|----------------------------|

| ·   | Each      piece of underlying collateral with existing deferrals/defaults is      evaluated individually for future recovery and the recovery rate is      adjusted accordingly; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Additional      deferrals/defaults are assumed based upon evaluation of underlying      performing collateral. The Corporation obtains and evaluates financial      data pertinent to each piece of collateral including analysis of      profitability, credit quality, operating efficiency, leverage, and      liquidity using the most |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | recently      available financial and regulatory information. The Corporation also      evaluates historical industry default data obtained from its third-party      investment advisors and assesses the impact of current market      conditions. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (Dollars      in thousands)         |   |            |   |   |            |   |   |                        |   |
|-------------------------------------|--------|-----------------|--------|--------|-----------------|--------|--------|-----------------------------|--------|
|   As of December 31, 2009 |   | Book      Value |   |   | Fair      Value |   |   | Unrealized      (Loss) Gain |   |   | Deferral      / Default as % of Collateral |   |
|                                |   |            |   |   |            |   |   |                        |   |   |   |   |
| Single      Issuer:                 |   |            |   |   |            |   |   |                        |   |   |   |   |
| A      Rated                        |   | $               | 4,350  |   |            | $      | 3,499  |                        |   | $ | (851 | ) |   |   | n/a |   |
| B      Rated                        |   |            | 6,060  |   |            |   | 4,218  |                        |   |   | (1,842 | ) |   |   | n/a |   |
| Not      Rated                      |   |            | 421    |   |            |   | 520    |                        |   |   | 99 |   |   |   | n/a |   |
| Total Single      Issuers           |   | $               | 10,831 |   |            | $      | 8,237  |                        |   | $ | (2,594 | ) |   |   |   |   |
|                                |   |            |   |   |            |   |   |                        |   |   |   |   |   |   |   |   |
| Pooled:                             |   |            |   |   |            |   |   |                        |   |   |   |   |   |   |   |   |
| B      Rated                        |   | $               | 9,634  |   |            | $      | 1,036  |                        |   | $ | (8,598 | ) |   |   | 27.0 | % |
| Noninvestment      grade            |   |            | 22,038 |   |            |   | 596    |                        |   |   | (21,442 | ) |   |   | 23.1 | % |
| Total Pooled                        |   | $               | 31,672 |   |            | $      | 1,632  |                        |   | $ | (30,040 | ) |   |   |   |   |
|                                |   |            |   |   |            |   |   |                        |   |   |   |   |   |   |   |   |
| Total      Preferred Securities     |   | $               | 42,503 |   |            | $      | 9,869  |                        |   | $ | (32,634 | ) |   |   |   |   |

----

| (Dollars      in thousands)                                      |   |                                |   |   |                                    |   |   |                                    |   |   |                                         |   |                                              |   |                                                    |   |     |                                                              |   |
|------------------------------------------------------------------|--------|-------------------------------------|--------|--------|-----------------------------------------|--------|--------|-----------------------------------------|--------|--------|----------------------------------------------|--------|---------------------------------------------------|--------|---------------------------------------------------------|--------|----------|-------------------------------------------------------------------|--------|
|       As      of December 31, 2009 |   |      Class |   |   |     Book      Value |   |   |     Fair      Value |   |   |     Unrealized      Loss |   |     Lowest      Credit Rating |   |   Number      of performing banks in issuance |   |     |   Deferral/Default      as %of      original collateral |   |   | Excess      (Negative) Subordination as % of remaining performing      collateral |   |
|                                                             |   |                                |   |   |                                    |   |   |                                    |   |   |                                         |   |                                              |   |                                                    |   |     |                                                              |   |   |   |   |
| Pooled Securities:                                               |   |                                |   |   |                                    |   |   |                                    |   |   |                                         |   |                                              |   |                                                    |   |     |                                                              |   |   |   |   |
| MMC      Funding XVIII  (1)                            |   |                                | C-1    |   |                                    | $      | 2,674  |                                    |   | $      | 69                                           |   |                                              | $      | (2,605                                                  | )      |  Ca |                                                              |   | 28 |   |   |   | 27.9 | % |   |   | (25.7 | %) |
| TPREF      Funding III, Ltd. (2)                                 |   |                                | B-2    |   |                                    |   | 9,483  |                                    |   |   | 250                                          |   |                                              |   | (9,233                                                  | )      | Ca       |                                                              |   | 25 |   |   |   | 26.3 | % |   |   | (21.5 | %) |
| Regional      Diversified  Funding      Ltd. (5)       |   |                                | n/a    |   |                                    |   | 3,771  |                                    |   |   | 84                                           |   |                                              |   | (3,687                                                  | )      |  Ca |                                                              |   | 26 |   |   |   | 13.3 | % |   |   | (6.7 | %) |
| TPREF      Funding II, Ltd. (3)                                  |   |                                | B      |   |                                    |   | 410    |                                    |   |   | 11                                           |   |                                              |   | (399                                                    | )      | Caa3     |                                                              |   | 24 |   |   |   | 30.1 | % |   |   | (26.8 | %) |
| US      Capital Funding II (5)                                   |   |                                | B-1    |   |                                    |   | 937    |                                    |   |   | 30                                           |   |                                              |   | (907                                                    | )      | Ca       |                                                              |   | 50 |   |   |   | 10.9 | % |   |   | (4.1 | %) |
| Preferred      Term Securities XI, Ltd. (4)                      |   |                                | B-3    |   |                                    |   | 4,763  |                                    |   |   | 152                                          |   |                                              |   | (4,611                                                  | )      | Ca       |                                                              |   | 23 |   |   |   | 19.0 | % |   |   | (9.0 | %) |
|      Total                              |   |                                |   |   |                                    | $      | 22,038 |                                    |   | $      | 596                                          |   |                                              | $      | (21,442                                                 | )      |     |                                                              |   |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |                                |   |   |                                    |   |   |                                    |   |   |                                         |   |                                              |   |                                                    |   |     |                                                              |   |   |   |   |   |   |   |   |   |   |   |

| (1)   | Credit      related impairment charge of $2.5 million recorded during      2009. |
|-----------------|----------------------------------------------------------------------------------|

| (2)   | Credit      related impairment charge of $627,000 recorded during  2009. |
|-----------------|--------------------------------------------------------------------------|

| (3)   | Credit      related impairment charge of $87,000 recorded during  2009. |
|-----------------|-------------------------------------------------------------------------|

| (4)   | Credit      related impairment charge of $173,000 recorded during  2009. |
|-----------------|--------------------------------------------------------------------------|

| (5)   | Discounted      cash flow analysis was performed and no other-than-temporary impairment      was identified. |
|-----------------|--------------------------------------------------------------------------------------------------------------|

----

|                                                          |   | December      31, 2009           |
|---------------------------------------------------------------|--------|----------------------------------|
|                                                          |   | Held      toMaturity             | Available      for Sale |
|                                                          |   | AmortizedCost                    | Estimated      FairValue | AmortizedCost | EstimatedFairValue |
|                                                          |   | (Dollars in thousands) |
| Due      in one year or less:                                 |   |                             |   |   |   |   |   |
| Obligations      of states and political subdivisions         |   | $                                | — |   | $      — | $      1,250 | $      1,257 |
| Corporate      bonds                                          |   |                             | — |   | — | 250 | 251 |
| Total      due in one year or less                            |   |                             | — |   | — | 1,500 | 1,508 |
|                                                          |   |                             |   |   |   |   |   |
| Due      after one year through five years:                   |   |                             |   |   |   |   |   |
| Obligations      of U.S. government agencies and corporations |   |                             | — |   | — | 500 | 503 |
| Obligations      of states and political subdivisions         |   |                             | — |   | — | 4,714 | 5,037 |
| Corporate      bonds                                          |   |                             | — |   | — | 250 | 250 |
| Total      due after one year through five years:             |   |                             | — |   | — | 5,464 | 5,790 |
|                                                          |   |                             |   |   |   |   |   |
| Due      after five years through ten years:                  |   |                             |   |   |   |   |   |
| Obligations      of states and political subdivisions         |   |                             | 9,705 |   | 9,684 | 91,811 | 92,974 |
| Corporate      bonds                                          |   |                             | — |   | — | 2,740 | 1,714 |
| Total      due after five years through ten years:            |   |                             | 9,705 |   | 9,684 | 94,551 | 94,688 |
|                                                          |   |                             |   |   |   |   |   |
| Due      after ten years:                                     |   |                             |   |   |   |   |   |
| Obligations      of states and political subdivisions         |   |                             | 15,619 |   | 15,508 | 116,677 | 120,992 |
| Trust      preferred pools/collateralized debt obligations    |   |                             | — |   | — | 42,503 | 9,869 |
| Corporate      bonds                                          |   |                             | — |   | — | — | — |
| Total      due after ten years:                               |   |                             | 15,619 |   | 15,508 | 159,180 | 130,861 |
|                                                          |   |                             |   |   |   |   |   |
| Residential      mortgage-backed securities                   |   |                             | — |   | — | 786,501 | 784,090 |
| Equity      securities                                        |   |                             | — |   | — | 21,453 | 21,216 |
| Totals                                                        |   | $                                | 25,324 |   | $25,192 | $1,068,649 | $1,038,153 |

----

|                                                            |   | Year      Ended December 31, |
|-----------------------------------------------------------------|--------|------------------------------|
|                                                            |   | 2009                         |   |   | 2008 |   |        2007 |
|                                                            |   | (Dollars      in thousands)  |
| Gross      realized gains                                       |   | $                            | 13,212 |   |   | $ | 3,238 |   |   | $ | 1,329 |   |   |
| Gross      realized losses                                      |   |                         | (1,794 | ) |   |   | (596 | ) |   |   | (142 |  ) |   |
| Net      realized gain (loss) on sales of investment securities |   | $                            | 11,418 |   |   | $ | 2,642 |   |   | $ | 1,187 |   |   |

|   | Note      6—Loans |
|--------|-------------------------|

|                                                                       |   | December      31,           |      |
|----------------------------------------------------------------------------|--------|-----------------------------|-----------|
|                                                                       |   | 2009                        |      |   | 2008 |   |
|                                                                       |   | (Dollars      in thousands) |      |
| Real      estate (including loans held for sale of $37,885 and    $17,165) |   | $                           | 1,324,416 |   |   | $ | 1,602,654 |   |
| Commercial      and industrial                                             |   |                        | 792,749   |   |   |   | 980,190 |   |
| Consumer      loans                                                        |   |                        | 873,430   |   |   |   | 1,099,903 |   |
| Lease      financing                                                       |   |                        | 108       |   |   |   | 758 |   |
| Total      loans                                                           |   |                        | 2,990,703 |   |   |   | 3,683,505 |   |
| Deferred      costs, net                                                   |   |                        | 2,675     |   |   |   | 1,739 |   |
| Allowance      for loan losses                                             |   |                        | (66,620   | ) |   |   | (49,955 | ) |
| Net      loans (including loans held for sale)                             |   | $                           | 2,926,758 |   |   | $ | 3,635,289 |   |

----

|                                    |   | Year      Ended December 31, |    |
|-----------------------------------------|--------|------------------------------|---------|
|                                    |   | 2009                         |    |   | 2008 |   |   | 2007 |   |
|                                    |   | (Dollars      in thousands)  |    |
| Balance,      January 1                 |   | $                            | 13,438  |   |   | $ | 12,043 |   |   | $ | 17,393 |   |
| New      loans                          |   |                         | 3,134   |   |   |   | 2,730 |   |   |   | 4,451 |   |
| Loans      acquired through acquisition |   |                         | — |   |   |   | 1,903 |   |   |   | — |   |
| Repayments      and other reductions    |   |                         | (523    | ) |   |   | (3,238 | ) |   |   | (9,801 | ) |
| Balance,      December 31               |   | $                            | 16,049  |   |   | $ | 13,438 |   |   | $ | 12,043 |   |

----

|   | Note      7—Allowance for Loan Losses |
|--------|---------------------------------------------|

|                                              |   | Year      Ended December 31, |    |
|---------------------------------------------------|--------|------------------------------|---------|
|                                              |   | 2009                         |    |   | 2008 |   |   | 2007 |   |
|                                              |   | (Dollars      in thousands)  |    |
| Balance,      beginning of year                   |   | $                            | 49,955  |   |   | $ | 27,328 |   |   | $ | 21,154 |   |
| Provision      for loan losses                    |   |                         | 58,321  |   |   |   | 15,567 |   |   |   | 10,550 |   |
| Reserve      from Willow Financial acquisition    |   |                         | — |   |   |   | 12,925 |   |   |   | — |   |
| Reserve      from East Penn Financial acquisition |   |                         | — |   |   |   | — |   |   |   | 3,250 |   |
| Loans      charged off                            |   |                         | (43,098 | ) |   |   | (6,829 | ) |   |   | (8,142 | ) |
| Recoveries                                        |   |                         | 1,442   |   |   |   | 964 |   |   |   | 516 |   |
| Balance,      end of year                         |   | $                            | 66,620  |   |   | $ | 49,955 |   |   | $ | 27,328 |   |

|   | Note      8—Premises and Equipment |
|--------|------------------------------------------|

|                                                | Estimated         |   | December      31,           |    |
|-----------------------------------------------------|-------------------|--------|-----------------------------|---------|
|                                                | Useful Lives |   | 2009                        |    |   | 2008 |   |
|                                                |              |   | (Dollars      in thousands) |    |
| Land                                                | Indefinite        |   | $                           | 5,443   |   |   | $ | 5,467 |   |
| Buildings                                           | 15-39      years  |   |                        | 43,300  |   |   |   | 41,111 |   |
| Furniture,      fixtures and equipment              | 3-7      years    |   |                        | 37,861  |   |   |   | 37,336 |   |
| Total      cost                                     |              |   |                        | 86,604  |   |   |   | 83,914 |   |
| Less      accumulated depreciation and amortization |              |   |                        | (39,444 | ) |   |   | (33,309 | ) |
| Premises      and equipment, net                    |              |   | $                           | 47,160  |   |   | $ | 50,605 |   |

|   | Note 9—Goodwill      and Other Intangibles |
|--------|-------------------------------------------------------|

----

|   | Note      9—Goodwill and Other Intangibles(Continued) |
|--------|-------------------------------------------------------------|

|                                                  |   | Community      Banking           |     |   | Wealth      Management |   |    |        Total |
|-------------------------------------------------------|--------|----------------------------------|----------|--------|------------------------|--------|---------|-------------------|
|                                                  |   | (Dollars in thousands) |
| Balance,      January 1, 2008                         |   | $                                | 96,426   |   |                   | $      | 14,729  |              |   | $ | 111,155 |   |   |
| Net      addition to goodwill from acquisitions       |   |                             | 125,955  |   |                   |   | 4,526   |              |   |   | 130,481 |   |   |
| Goodwill      written off due to sale of subsidiaryns |   |                             | —  |   |                   |   | (935    | )                 |   |   | (935 |  ) |   |
| Balance,      December 31, 2008                       |   |                             | 222,381  |   |                   |   | 18,320  |              |   |   | 240,701 |   |   |
| Purchase      accounting adjustments for acquisitions |   |                             | (3,010   | )      |                   |   | (1,533  | )                 |   |   | (4,543 |  ) |   |
| Goodwill      impairment                              |   |                             | (214,536 | )      |                   |   | — |              |   |   | (214,536 |  ) |   |
| Balance,      December 31, 2009                       |   | $                                | 4,835    |   |                   | $      | 16,787  |              |   | $ | 21,622 |   |   |

|                                |   | December      31,           |
|-------------------------------------|--------|-----------------------------|
|                                |   | 2009                        | 2008 |
|                                |   | Gross      Carrying Amount  | Accumulated      Amortization | Gross      Carrying Amount | Accumulated      Amortization |
|                                |   | (Dollars      in thousands) |
| Core      deposit intangibles       |   | $                           | 21,083 |   | $6,228 | $23,256 | $2,692 |
| Other      identifiable intangibles |   |                        | 7,209 |   | 2,570 | 7,209 | 1,524 |
| Total                               |   | $                           | 28,292 |   | $8,798 | $30,465 | $4,216 |

----

|   | Note      9—Goodwill and Other Intangibles(Continued) |
|--------|-------------------------------------------------------------|

|   | Note      10—Deposits |
|--------|-----------------------------|

|       |   | Amount                      |
|------------|--------|-----------------------------|
|       |   | (Dollars      in thousands) |
| 2010       |   | $                           | 1,192,167 |   |
| 2011       |   |                        | 256,572 |   |
| 2012       |   |                        | 88,659 |   |
| 2013       |   |                        | 8,651 |   |
| 2014       |   |                        | 2,464 |   |
| Thereafter |   |                        | 1,104 |   |
| Total      |   | $                           | 1,549,617 |   |

|   | Note      11—Borrowings |
|--------|-------------------------------|

|   | Federal      Funds Lines of Credit with CorrespondentBanks |
|--------|------------------------------------------------------------|

----

|   | Note      11—Borrowings (Continued) |
|--------|-------------------------------------------|

|   | Federal      Home Loan Bank Advances |
|--------|--------------------------------------|

|       | Balance      (1)               |   | WeightedAverage      Rate (1) |
|------------|--------------------------------|--------|-------------------------------|
|       | (Dollars      in thousands)    |
| 2010       | $  72,513            |   |                          | 2.93 | % |
| 2011       | 86,476                         |   |                          | 3.36 | % |
| 2012       | 61,434                         |   |                          | 3.28 | % |
| 2013       |     90,985 |   |                          | 2.73 | % |
| 2014       | 51,978                         |   |                          | 2.97 | % |
| Thereafter | 97,638                         |   |                          | 2.41 | % |
| Total      | $461,024                       |   |                          | 2.90 | % |

| (1) | The      FHLB borrowings balance and weighted average interest rate include      purchase accounting fair value adjustments, net of related amortization      from the Willow Financialacquisition. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Trust      Preferred Subordinated Debentures |
|--------|----------------------------------------------|

----

|   | Note      11—Borrowings (Continued) |
|--------|-------------------------------------------|

----

|   | Note      11—Borrowings (Continued) |
|--------|-------------------------------------------|

| Trust      Preferred Subordinated Debentures                                                                                                                                                                   |   | Principal      Amount of Subordinated Debentures |    |   | Principal      Amount of Trust Preferred Securities |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|---------|--------|-----------------------------------------------------|--------|
|                                                                                                                                                                                                           |   | (Dollars in thousands)                 |    |
| Issued      to Harleysville Statutory Trust I in February 2001, matures in February      2031, interest rate of 10.20% per annum                                                                               |   | $                                                | 5,155   |   |                                                | $      | 5,000 |   |
| Issued      to HNC Statutory Trust II in March 2004, matures in April 2034, interest      rate of three-month London Interbank Offered Rate (LIBOR) plus 2.70% per      annum                                  |   |                                             | 20,619  |   |                                                |   | 20,000 |   |
| Issued      to HNC Statutory Trust III in September 2005, matures in November 2035,      bearing interest at 5.67% per annum through November 2010 and thereafter      three-month LIBOR plus 1.40% per annum  |   |                                             | 25,774  |   |                                                |   | 25,000 |   |
| Issued      to HNC Statutory Trust IV in August 2007, matures in October 2037, bearing      interest at 6.35% per annum through October 2012 and thereafter      three-month LIBOR plus 1.28% per annum        |   |                                             | 23,196  |   |                                                |   | 22,500 |   |
| Issued      to East Penn Statutory Trust I in July 2003, matures in September 2033,      interest rate of 6.80% per annum through September 2008 and thereafter at      three-month LIBOR plus 3.10% per annum |   |                                             | 8,248   |   |                                                |   | 8,000 |   |
| Issued      to Willow Grove Statutory Trust I in March 2006, matures in June 2036,      interest rate of three-month LIBOR plus 1.31% per annum                                                                |   |                                             | 25,774  |   |                                                |   | 25,000 |   |
| Total                                                                                                                                                                                                          |   | $                                                | 108,766 |   |                                                | $      | 105,500 |   |

----

| (Dollars      in thousands)                                       |   |   |   |
|-------------------------------------------------------------------|--------|--------|--------|
| Balance,      January 1, 2008                                     |   | $      | 249    |   |
| Statue      of limitations expiration related to prior years      |   |   | (75    | ) |
| Additions      based on tax positions related to the current year |   |   | 50     |   |
| Balance,      December 31, 2008                                   |   |   | 224    |   |
| Statue      of limitations expiration related to prior years      |   |   | (50    | ) |
| Additions      based on tax positions related to the current year |   |   | 39     |   |
| Balance,      December 31, 2009                                   |   | $      | 213    |   |

|                                            |   | Year      Ended December 31, |    |
|-------------------------------------------------|--------|------------------------------|---------|
|                                            |   | 2009                         |    |   | 2008 |   |   | 2007 |   |
|                                            |   | (Dollars      in thousands)  |    |
| Current      income tax (benefit) expense:      |   |                         |    |   |   |   |   |   |   |
| Federal                                         |   | $                            | (7,514  | ) |   | $ | 8,473 |   |   | $ | 15,943 |   |
| State                                           |   |                         | 109     |   |   |   | 155 |   |   |   | 245 |   |
| Total      current income tax (benefit) expense |   |                         | (7,405  | ) |   |   | 8,628 |   |   |   | 16,188 |   |
| Deferred      income tax                        |   |                         | (5,652  | ) |   |   | (3,553 | ) |   |   | (8,916 | ) |
| Total      income tax (benefit) expense         |   | $                            | (13,057 | ) |   | $ | 5,075 |   |   | $ | 7,272 |   |

|                                                |   | Year      Ended December 31, |    |
|-----------------------------------------------------|--------|------------------------------|---------|
|                                                |   | 2009                         |    |   | 2008 |   |   | 2007 |   |
|                                                |   | (Dollars      in thousands)  |    |
| Expected      income tax (benefit) expense          |   | $                            | (81,292 | ) |   | $ | 10,707 |   |   | $ | 12,102 |   |
| Tax-exempt      income net of interest disallowance |   |                         | (6,515  | ) |   |   | (5,925 | ) |   |   | (4,707 | ) |
| Goodwill      impairment                            |   |                         | 75,087  |   |   |   | — |   |   |   | — |   |
| Other.                                              |   |                         | (337    | ) |   |   | 293 |   |   |   | (123 | ) |
| Actual      income tax (benefit) expense            |   | $                            | (13,057 | ) |   | $ | 5,075 |   |   | $ | 7,272 |   |

----

|                                                            | 2009                        | 2008   |
|-----------------------------------------------------------------|-----------------------------|--------|
|                                                            | Asset                       |   | Liability | Asset |   | Liability |
|                                                            | (Dollars      in thousands) |
| Allowance      for loan losses                                  | $23,317                     |   | $ | — |   | $15,272 |   | $     — |
| Bad      debt recapture                                         | —                     |   |   | 41 |   | — |   | 54 |
| Specific      reserves                                          | 1,181                       |   |   | — |   | 2,212 |   | — |
| Lease      assets                                               | —                     |   |   | — |   | — |   | — |
| Deferred      loan fees                                         | —                     |   |   | 1,903 |   | — |   | 2,970 |
| Deferred      compensation                                      | 2,378                       |   |   | — |   | 3,365 |   | — |
| Pension                                                         | —                     |   |   | — |   | 162 |   | — |
| Stock-based      compensation expense                           | 193                         |   |   | — |   | 54 |   | — |
| Mortgage      servicing rights                                  | —                     |   |   | 790 |   | — |   | 545 |
| Depreciation                                                    | —                     |   |   | 429 |   | — |   | 445 |
| Unrealized      loss on investment securities                   | 10,673                      |   |   | — |   | 15,623 |   | — |
| Net      unrealized gain on derivative used for cash flow hedge | —                     |   |   | — |   | 2 |   | — |
| Purchase      accounting adjustments                            | 3,965                       |   |   | — |   | 19,800 |   | — |
| Deferred      gain on sale-leaseback of bank properties         | 5,169                       |   |   | — |   | 5,760 |   | — |
| Other-than-temporary      impairment on securities              | 4,710                       |   |   | — |   | 1,963 |   |   |
| Net      operating loss carryover                               | 4,796                       |   |   | — |   | 575 |   | — |
| Non-accrual      interest                                       | 2,998                       |   |   | — |   | 410 |   | — |
| Other                                                           | 4,989                       |   |   | — |   | — |   | 692 |
| Total      deferred taxes                                       | $64,369                     |   | $ | 3,163 |   | $65,198 |   | $4,706 |

|   | Note 13—Pension      Plans |
|--------|----------------------------------|

|   | Defined      Benefit Pension Plan |
|--------|-----------------------------------|

----

|                                                       |   | Year      EndedDecember      31, 2008 |   |
|------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                       |   |                                  |   |
| Assets      and obligations:                               |   | Before      Settlement                |   |   | Effect      of Settlement |   |   | After      Settlement |   |
|                                                       |   | (Dollars      in thousands)           |   |
| Vested      benefit obligation                             |   | $                                     | 12,226 |   |   | $ | (11,831 | ) |   | $ | 395 |   |
| Non-vested      benefits                                   |   |                                  | -      |   |   |   | - |   |   |   | - |   |
| Accumulated      benefit obligation                        |   |                                  | 12,226 |   |   |   | (11,831 | ) |   |   | 395 |   |
| Effect      of future compensation levels                  |   |                                  | -      |   |   |   | - |   |   |   | - |   |
| Projected      benefit obligation                          |   | $                                     | 12,226 |   |   | $ | (11,831 | ) |   | $ | 395 |   |
|                                                       |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Plan      assets at fair value                             |   | $                                     | 11,695 |   |   | $ | (11,624 | ) |   | $ | 71 |   |
| Unrecognized      net asset at transition                  |   |                                  | (33    | ) |   |   | 32 |   |   |   | (1 | ) |
| Unrecognized      net loss (gain) subsequent to transition |   |                                  | 1,707  |   |   |   | (1,657 | ) |   |   | 50 |   |
| Adjustment      required to recognize minimum liability    |   |                                  | (1,674 | ) |   |   | 1,625 |   |   |   | (49 | ) |
| (Prepaid)/accrued      pension cost                        |   |                                  | 531    |   |   |   | (207 | ) |   |   | 324 |   |

----

|                                                       |   | Year      EndedDecember      31, 2007 |   |
|------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                       |   |                                  |   |
| Assets      and obligations:                               |   | Before      Curtailment               |   |   | Effect      of Curtailment |   |   | After      Curtailment |   |
|                                                       |   | (Dollars      in thousands)           |   |
| Vested      benefit obligation                             |   | $                                     | 8,786  |   |   | $ | 2,557 |   |   | $ | 11,343 |   |
| Non-vested      benefits                                   |   |                                  | 383    |   |   |   | 148 |   |   |   | 531 |   |
| Accumulated      benefit obligation                        |   |                                  | 9,169  |   |   |   | 2,705 |   |   |   | 11,874 |   |
| Effect      of future compensation levels                  |   |                                  | 3,015  |   |   |   | (3,015 | ) |   |   | - |   |
| Projected      benefit obligation                          |   | $                                     | 12,184 |   |   | $ | (310 | ) |   | $ | 11,874 |   |
|                                                       |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Plan      assets at fair value                             |   | $                                     | 10,200 |   |   | $ | - |   |   | $ | 10,200 |   |
| Unrecognized      net asset at transition                  |   |                                  | (51    | ) |   |   | - |   |   |   | (51 | ) |
| Unrecognized      net loss (gain) subsequent to transition |   |                                  | 2,252  |   |   |   | (310 | ) |   |   | 1,942 |   |
| Adjustment      required to recognize minimum liability    |   |                                  | -      |   |   |   | 1,891 |   |   |   | 1,891 |   |
| (Prepaid)/accrued      pension cost                        |   |                                  | (217   | ) |   |   | 1,891 |   |   |   | 1,674 |   |

|                                                |   | 2009                        |    |   | 2008   |   |
|-----------------------------------------------------|--------|-----------------------------|---------|--------|--------|--------|
|                                                |   | (Dollars      in thousands) |    |
| Change      in benefit obligation:                  |   |                        |    |   |   |   |
| Benefit      obligation at beginning of year        |   | $                           | 395     |   |   | $      | 11,874 |   |
| Service      cost                                   |   |                        | — |   |   |   | — |   |
| Interest      cost                                  |   |                        | — |   |   |   | 426 |   |
| Actual      (gain) loss                             |   |                        | — |   |   |   | (281 | ) |
| Benefits      paid                                  |   |                        | (395    | )      |   |   | (11,624 | ) |
| Change      in assumptions (plan curtailment)       |   |                        | — |   |   |   | — |   |
| Benefits      obligation at end of year             |   | $                           | — |   |   | $      | 395 |   |
| Change      in plan assets:                         |   |                        |    |   |   |   |   |   |
| Fair      value of plan assets at beginning of year |   | $                           | 71      |   |   | $      | 10,200 |   |
| Actual      return on plan assets                   |   |                        | — |   |   |   | 245 |   |
| Employer      contribution                          |   |                        | — |   |   |   | 1,250 |   |
| Benefits      paid                                  |   |                        | (71     | )      |   |   | (11,624 | ) |
| Fair      value of plan assets at end of year       |   | $                           | — |   |   | $      | 71 |   |
| Funded      status at end of year                   |   | $                           | — |   |   | $      | (324 | ) |

----

|                                |   | Year      EndedDecember      31, |    |
|-------------------------------------|--------|----------------------------------|---------|
|                                |   | 2009                             |    |   | 2008 |   |
|                                |   | (Dollars      in thousands)      |    |
| Projected      benefit obligation   |   | $                                | — |   |   | $ | 395 |   |
| Accumulated      benefit obligation |   |                             | — |   |   |   | 395 |   |
| Fair      value of plan assets      |   |                             | — |   |   |   | 71 |   |

| Weighted-average      assumptions used to determine   |   | Year      EndedDecember      31, |   |
|-------------------------------------------------------|--------|----------------------------------|--------|
| pension plan      obligations as of December 31, |   | 2009                             |   |   | 2008 |   |   | 2007 |   |
| Discount      rate                                    |   |                             | n/a    |   |   |   | 4.75 | % |   |   | 4.75 | % |
| Rate      of compensation increase                    |   |                             | n/a    |   |   |   | 0.00 | % |   |   | 0.00 | % |

| Weighted-average      assumptions used to determine            |   | Year      EndedDecember      31, |   |
|----------------------------------------------------------------|--------|----------------------------------|--------|
| pension      plan net periodic benefit cost as of December 31, |   | 2009                             |   |   | 2008 |   |   | 2007 |   |
| Discount      rate                                             |   |                             | n/a    |   |   |   | 4.75 | % |   |   | 6.00 | % |
| Expected      return on plan assets                            |   |                             | n/a    |   |   |   | 4.75 | % |   |   | 6.00 | % |
| Rate      of compensation increase                             |   |                             | n/a    |   |   |   | 0.00 | % |   |   | 4.00 | % |

|                                                   |   | Year      EndedDecember      31, |    |
|--------------------------------------------------------|--------|----------------------------------|---------|
| Components      of net periodic benefit expense        |   | 2009                             |    |   | 2008 |   |   | 2007 |   |
|                                                   |   | (Dollars      in thousands)      |    |
| Service      cost                                      |   | $                                | — |   |   | $ | — |   |   | $ | 1,166 |   |
| Interest      cost                                     |   |                             | — |   |   |   | 426 |   |   |   | 683 |   |
| Expected      return on plan assets                    |   |                             | — |   |   |   | (349 | ) |   |   | (600 | ) |
| Amortization      of unrecognized net actuarial losses |   |                             | — |   |   |   | 41 |   |   |   | 76 |   |
| Net      periodic benefit expense                      |   | $                                | — |   |   | $ | 118 |   |   | $ | 1,325 |   |

|                           |   | Percentageof                         |   |
|--------------------------------|--------|--------------------------------------|--------|
|                           |   | Plan      Assets atDecember      31, |   |
|                           |   | 2009                                 |   |   | 2008 |   |
| Asset      Category            |   |                                 |   |   |   |   |
| Cash      and cash equivalents |   |                                 | n/a    |   |   |   | 100.0 | % |
| Total                          |   |                                 | n/a    |   |   |   | 100.0 | % |

----

|   | Supplemental      Benefit Plans |
|--------|---------------------------------|

|   | Defined      Contribution Plan |
|--------|--------------------------------|

----

|   | Note      14—Authorized Shares of Common Stock , Dividend Reinvestment and Stock      Purchase Plan and Stock RepurchaseProgram |
|--------|---------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| Options                               |   | Shares |      |   |   Weighted-      Average Exercise Price |   |    | Weighted-Average      Remaining Contractual Term(in      years) |   |   |    Aggregate      Intrinsic Value(in      thousands) |   |
|---------------------------------------|--------|--------|-----------|--------|---------------------------------------------------|--------|---------|-----------------------------------------------------------------|--------|--------|---------------------------------------------------------------------|--------|
| Outstanding      at January 1, 2009   |   |   | 1,648,723 |   |                                              | $      | 15.28   |                                                            |   |   |                                                                |   |   |   |
| Granted                               |   |   | —   |   |                                              |   | — |                                                            |   |   |                                                                |   |   |   |
| Exercised                             |   |   | (112,010  | )      |                                              |   | 7.41    |                                                            |   |   |                                                                |   |   |   |
| Forfeited      (unvested)             |   |   | (5,065    | )      |                                              |   | 16.94   |                                                            |   |   |                                                                |   |   |   |
| Cancelled      (vested)               |   |   | (130,089  | )      |                                              |   | 15.45   |                                                            |   |   |                                                                |   |   |   |
| Outstanding      at December 31, 2009 |   |   | 1,401,559 |   |                                              | $      | 15.89   |                                                            |   |   | 3.44                                                                |   |   | $ | 1 |   |
|                                  |   |   |      |   |                                              |   |    |                                                            |   |   |                                                                |   |   |   |   |   |
| Exercisable      at December 31, 2009 |   |   | 1,227,214 |   |                                              | $      | 16.08   |                                                            |   |   | 3.05                                                                |   |   | $ | 1 |   |

|  Nonvested      Shares         |   | Shares |    |   | Weighted-AverageGrant-Date      Fair Value |   |
|-------------------------------------|--------|--------|---------|--------|--------------------------------------------|--------|
|                                |   |   |    |   |                                       |   |
| Nonvested      at January 1, 2009   |   |   | 263,664 |   |                                       | $      | 3.74 |   |
|                                |   |   |    |   |                                       |   |   |   |
| Granted                             |   |   | — |   |                                       |   | — |   |
|                                |   |   |    |   |                                       |   |   |   |
| Vested                              |   |   | (84,254 | )      |                                       |   | 3.97 |   |
|                                |   |   |    |   |                                       |   |   |   |
| Forfeited                           |   |   | (5,065  | )      |                                       |   | 4.44 |   |
|                                |   |   |    |   |                                       |   |   |   |
| Nonvested      at December 31, 2009 |   |   | 174,345 |   |                                       | $      | 3.61 |   |

----

|                                                                                      |   | Year      Ended December 31,                                       |   |
|-------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|--------|
|                                                                                      |   | 2009                                                               |   | 2008 |   | 2007 |   |
|                                                                                      |   | (Dollars      in thousands, exceptper      share information)      |   |
| Basic      (loss) earnings per share                                                      |   |                                                               |   |   |   |   |   |
| Net      (loss) income available to common shareholders                                   |   | $    (219,475                                  | )      | $       25,093 |   | $       26,595 |   |
| Weighted      average common shares outstanding                                           |   | 43,078,543                                                         |   | 32,201,150 |   | 29,218,671 |   |
| Basic      (loss) earnings per share                                                      |   | $          (5.09 | )      | $           0.78 |   | $           0.91 |   |
| Diluted      (loss) earnings per share                                                    |   |                                                               |   |   |   |   |   |
| Net      (loss) income available to common shareholders and assumed      conversions |   | $    (219,475                                  | )      | $       25,093 |   | $       26,595 |   |
| Weighted      average common shares outstanding                                           |   | 43,078,543                                                         |   | 32,201,150 |   | 29,218,671 |   |
| Dilutive      potential common shares(1),(2)                                              |   | —                                                            |   | 162,987 |   | 241,227 |   |
| Total      diluted weighted average common shares outstanding                             |   | 43,078,543                                                         |   | 32,364,137 |   | 29,459,898 |   |
| Diluted      (loss) earnings per share                                                    |   | $          (5.09 | )      | $           0.78 |   | $           0.90 |   |

| (1) | Includes      incremental shares from assumed conversions of stock    options. |
|-----|--------------------------------------------------------------------------------|

| (2) | Antidilutive      options have been excluded in the computation of diluted earnings per      share because the options’ exercise prices were greater than the average      market price of the common stock. For 2009, 2008, and 2007, there were      1,396,513, 1,037,645 and 475,952 anti-dilutive options at an average price      of $15.92, $18.79 and $23.44 per share,  respectively. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Note      17—Comprehensive Income (Loss) Income and Accumulated Other Comprehensive      (Loss) Income |
|--------|--------------------------------------------------------------------------------------------------------------|

| For      the year ended December 31, 2009                                                                                                   |   | Beforetax      amount       |   |   | TaxBenefit      (Expense) |   | Net      oftaxamount |
|---------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|----------------------|
|                                                                                                                                        |   | (Dollars      in thousands) |
| Net      unrealized gains on available for sale securities:                                                                                 |   |                        |   |   |                      |   |                 |
| Net      unrealized holding gains arising during period                                                                                     |   | $                           | 16,159 |   |                      | $      | (5,656               | ) |   | $ | 10,503 |   |
| Less      reclassification adjustment for net gains on sales of available for sale      securities realized in net loss                |   |                        | 11,416 |   |                      |   | (3,996               | ) |   |   | 7,420 |   |
| Less      reclassification adjustment for other-than-temporary impairment of      available for sale securities recognized in net loss |   |                        | (9,399 | )      |                      |   | 3,290                |   |   |   | (6,109 |   |
| Net      unrealized gains                                                                                                                   |   |                        | 14,142 |   |                      |   | (4,950               | ) |   |   | 9,192 |   |
| Change      in fair value of derivatives used for cash flow hedges                                                                          |   |                        | 4      |   |                      |   | (1                   | ) |   |   | 3 |   |
| Other      comprehensive income, net                                                                                                        |   | $                           | 14,146 |   |                      | $      | (4,951               | ) |   | $ | 9,195 |   |

| For      the year ended December 31, 2008                                                                                                    |   | Beforetaxamount             |    |   | TaxBenefit      (Expense) |   | Net      oftax amount |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|---------|--------|---------------------------|--------|----------------------------|
|                                                                                                                                         |   | (Dollars      in thousands) |
| Net      unrealized losses on available for sale securities:                                                                                 |   |                        |    |   |                      |   |                       |
| Net      unrealized holding losses arising during period                                                                                     |   | $                           | (40,146 | )      |                      | $      | 14,051                     |   |   | $ | (26,095 |  ) |   |
| Less      reclassification adjustment for net gains on sales of available for sale      securities realized in net income               |   |                        | 2,642   |   |                      |   | (925                       | ) |   |   | 1,717 |   |   |
| Less      reclassification adjustment for other-than-temporary impairment of      available for sale securities recognized in netincome |   |                        | (1,923  | )      |                      |   | 673                        |   |   |   | (1,250 |  ) |   |
| Net      unrealized losses                                                                                                                   |   |                        | (40,865 | )      |                      |   | 14,303                     |   |   |   | (26,562 |  ) |   |
| Change      in fair value of derivatives used for cash flow hedges                                                                           |   |                        | 171     |   |                      |   | (60                        | ) |   |   | 111 |   |   |
| Other      comprehensive loss, net                                                                                                           |   | $                           | (40,694 | )      |                      | $      | 14,243                     |   |   | $ | (26,451 |  ) |   |

| For      the year ended December 31,2007                                                                                                     |   | Beforetax      amount       |   |   | Tax(Expense)      Benefit |   | Net      oftax amount |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|----------------------------|
|                                                                                                                                         |   | (Dollars      in thousands) |
| Net      unrealized gains on available for sale securities:                                                                                  |   |                        |   |   |                      |   |                       |   |
| Net      unrealized holding gains arising during period                                                                                      |   | $                           | 4,856  |   |                      | $      | (1,700                     | ) |   | $ | 3,156 |   |   |
| Less      reclassification adjustment for net gains realized in net      income                                                         |   |                        | 1,187  |   |                      |   | (415                       | ) |   |   | 772 |   |   |
| Less      reclassification adjustment for other-than-temporary impairment of      available for sale securities recognized in netincome |   |                        | (55    | )      |                      |   | 19                         |   |   |   | (36 |  ) |   |
| Net      unrealized gains                                                                                                                    |   |                        | 3,724  |   |                      |   | (1,304                     | ) |   |   | 2,420 |   |   |
| Change      in fair value of derivatives used for cash flow hedges                                                                           |   |                        | (643   | )      |                      |   | 225                        |   |   |   | (418 |  ) |   |
| Reversal      of FAS 158 adjustment due to defined benefit pension plan      curtailment                                                     |   |                        | 2,361  |   |                      |   | (826                       | ) |   |   | 1,535 |   |   |
| Other      comprehensive income, net                                                                                                         |   | $                           | 5,442  |   |                      | $      | (1,905                     | ) |   | $ | 3,537 |   |   |

----

|                            |   | Net      Unrealized (Losses) Gains on Available For Sale Securities |    |   | Net      Change in Fair Value of Derivatives Used for Cash Flow    Hedges |   |   | Net      Change Related to Defined Benefit Pension Plan |   |   | Transition      Asset Related to Defined Benefit Pension Plan |   |   | Accumulated      Other Comprehensive (Loss) Income |   |
|---------------------------------|--------|---------------------------------------------------------------------|---------|--------|---------------------------------------------------------------------------|--------|--------|---------------------------------------------------------|--------|--------|---------------------------------------------------------------|--------|--------|----------------------------------------------------|--------|
| Balance,      December 31, 2006 |   | $                                                                   | (4,872  | )      |                                                                      | $      | 304    |                                                    |   | $      | (1,579                                                        | )      |   | $                                                  | 44     |   |   | $ | (6,103 | ) |
| Net      Change                 |   |                                                                | 2,420   |   |                                                                      |   | (418   | )                                                       |   |   | 1,579                                                         |   |   |                                               | (44    | ) |   |   | 3,537 |   |
| Balance,      December 31, 2007 |   |                                                                | (2,452  | )      |                                                                      |   | (114   | )                                                       |   |   | -                                                             |   |   |                                               | -      |   |   |   | (2,566 | ) |
| Net      Change                 |   |                                                                | (26,562 | )      |                                                                      |   | 111    |                                                    |   |   | -                                                             |   |   |                                               | -      |   |   |   | (26,451 | ) |
| Balance,      December 31, 2008 |   |                                                                | (29,014 | )      |                                                                      |   | (3     | )                                                       |   |   | -                                                             |   |   |                                               | -      |   |   |   | (29,017 | ) |
| Net      Change                 |   |                                                                | 9,192   |   |                                                                      |   | 3      |                                                    |   |   | -                                                             |   |   |                                               | -      |   |   |   | 9,195 |   |
| Balance,      December 31, 2009 |   | $                                                                   | (19,822 | )      |                                                                      | $      | -      |                                                    |   | $      | -                                                             |   |   | $                                                  | -      |   |   | $ | (19,822 | ) |

----

|                                   |   | Community      Banking |      |   | Wealth      Management      |   |   |        All      Other | Consolidated      Totals |   |    |
|----------------------------------------|--------|------------------------|-----------|--------|-----------------------------|--------|--------|----------------------------|--------------------------|--------|--------------|
|                                   |   |                   |      |   | (Dollars      in thousands) |   |   |
| Year      Ended December 31, 2009      |   |                   |      |   |                        |   |   |                       |                     |   |
| Net      interest income (expense)     |   | $                      | 134,867   |   |                        | $      | 304    |                       |                     | $      | (5,298       | ) |   | $ | 129,873 |   |
| Provision      for loan losses         |   |                   | 58,321    |   |                        |   | -      |                       |                     |   | -            |   |   |   | 58,321 |   |
| Noninterest      income                |   |                   | 46,144    |   |                        |   | 18,202 |                       |                     |   | (688         | ) |   |   | 63,658 |   |
| Noninterest      expense               |   |                   | 348,064   |   |                        |   | 18,868 |                       |                     |   | 810          |   |   |   | 367,742 |   |
| (Loss)      income before income taxes |   |                   | (225,374  | )      |                        |   | (362   | )                          |                     |   | (6,796       | ) |   |   | (232,532 | ) |
| Income      tax (benefit) expense      |   |                   | (11,199   | )      |                        |   | (63    | )                          |                     |   | (1,795       | ) |   |   | (13,057 | ) |
| Net      (loss) income                 |   | $                      | (214,175  | )      |                        | $      | (299   | )                          |                     | $      | (5,001       | ) |   | $ | (219,475 | ) |
| Assets                                 |   | $                      | 5,145,346 |   |                        | $      | 35,146 |                       |                     | $      | 7,304        |   |   | $ | 5,187,796 |   |

|                                             |   | Community      Banking |      |   | Wealth      Management      |   |   |        All      Other | Consolidated      Totals |   |    |
|--------------------------------------------------|--------|------------------------|-----------|--------|-----------------------------|--------|--------|----------------------------|--------------------------|--------|--------------|
|                                             |   |                   |      |   | (Dollars      in thousands) |   |   |
| Year      Ended December 31, 2008                |   |                   |      |   |                        |   |   |                       |                     |   |
| Net      interest income (expense)               |   | $                      | 109,030   |   |                        | $      | 280    |                       |                     | $      | (5,170       | ) |   | $ | 104,140 |   |
| Provision      for loan losses                   |   |                   | 15,567    |   |                        |   | -      |                       |                     |   | -            |   |   |   | 15,567 |   |
| Noninterest      income                          |   |                   | 27,175    |   |                        |   | 18,689 |                       |                     |   | 353          |   |   |   | 46,217 |   |
| Noninterest      expense                         |   |                   | 86,852    |   |                        |   | 16,869 |                       |                     |   | 901          |   |   |   | 104,622 |   |
| Income      (loss) before income taxes (benefit) |   |                   | 33,786    |   |                        |   | 2,100  |                       |                     |   | (5,718       | ) |   |   | 30,168 |   |
| Income      taxes (benefit)                      |   |                   | 6,138     |   |                        |   | 833    |                       |                     |   | (1,896       | ) |   |   | 5,075 |   |
| Net      income (loss)                           |   | $                      | 27,648    |   |                        | $      | 1,267  |                       |                     | $      | (3,822       | ) |   | $ | 25,093 |   |
| Assets                                           |   | $                      | 5,447,646 |   |                        | $      | 30,437 |                       |                     | $      | 12,426       |   |   | $ | 5,490,509 |   |

|                                             |   | Community      Banking |      |   | Wealth      Management      |   |   |        All      Other | Consolidated      Totals |   |    |
|--------------------------------------------------|--------|------------------------|-----------|--------|-----------------------------|--------|--------|----------------------------|--------------------------|--------|--------------|
|                                             |   |                   |      |   | (Dollars      in thousands) |   |   |
| Year      Ended December 31, 2007                |   |                   |      |   |                        |   |   |                       |                     |   |
| Net      interest income (expense)               |   | $                      | 84,563    |   |                        | $      | 451    |                       |                     | $      | (2,580       | ) |   | $ | 82,434 |   |
| Provision      for loan losses                   |   |                   | 10,550    |   |                        |   | -      |                       |                     |   | -            |   |   |   | 10,550 |   |
| Noninterest      income                          |   |                   | 23,947    |   |                        |   | 18,658 |                       |                     |   | 733          |   |   |   | 43,338 |   |
| Noninterest      expense                         |   |                   | 64,751    |   |                        |   | 15,744 |                       |                     |   | 860          |   |   |   | 81,355 |   |
| Income      (loss) before income taxes (benefit) |   |                   | 33,209    |   |                        |   | 3,365  |                       |                     |   | (2,707       | ) |   |   | 33,867 |   |
| Income      taxes (benefit)                      |   |                   | 6,917     |   |                        |   | 1,502  |                       |                     |   | (1,147       | ) |   |   | 7,272 |   |
| Net      income (loss)                           |   | $                      | 26,292    |   |                        | $      | 1,863  |                       |                     | $      | (1,560       | ) |   | $ | 26,595 |   |
| Assets                                           |   | $                      | 3,862,378 |   |                        | $      | 25,572 |                       |                     | $      | 15,051       |   |   | $ | 3,903,001 |   |

----

|   | Note      19—Lease Commitments and ContingentLiabilities |
|--------|----------------------------------------------------------------|

|   | Lease      Commitments |
|--------|------------------------|

|                      |   | Minimum      LeasePayments       |
|---------------------------|--------|----------------------------------|
|                      |   | (Dollars      in thousands) |
| For      the year ending: |   |                             |   |   |
| 2010                      |   | $                                | 9,919 |   |
| 2011                      |   |                             | 9,548 |   |
| 2012                      |   |                             | 8,699 |   |
| 2013                      |   |                             | 8,470 |   |
| 2014                      |   |                             | 7,977 |   |
| Thereafter                |   |                             | 56,660 |   |
| Total                     |   | $                                | 101,273 |   |

|   | Other |
|--------|-------|

----

|   | Note      20—Financial Instruments with Off-Balance Sheet  Risk |
|--------|-----------------------------------------------------------------------|

|                                                                                                 |   | Total      AmountCommitted      atDecember      31, |    |
|------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|---------|
| Commitments                                                                                          |   | 2009                                                |    |   | 2008 |   |
|                                                                                                 |   | (Dollars in thousands)                    |    |
| Financial      instruments whose contract amounts represent credit risk:                             |   |                                                |    |   |   |   |
| Commitments      to extend credit                                                                    |   | $                                                   | 677,388 |   |   | $ | 995,125 |   |
| Standby      letters of credit and financial guarantees written                                      |   |                                                | 40,040  |   |   |   | 34,806 |   |
| Financial      instruments whose notional or contract amounts exceed the amount of credit      risk: |   |                                                |    |   |   |   |   |   |
| Interest      rate swap agreements                                                                   |   |                                                | 208,036 |   |   |   | 124,214 |   |
| Interest      rate cap agreements                                                                    |   |                                                | — |   |   |   | 200,000 |   |

----

|                                                              | Asset      Derivatives            |   | Liability      Derivatives   |    |
|-------------------------------------------------------------------|-----------------------------------|--------|------------------------------|---------|
|  (Dollars      in thousands)                                 | As      of December 31, 2009      |   | As      of December 31, 2008 |    | As      of December 31, 2009 |   | As      of December 31, 2008 |   |
|                                                              |                              |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                              | Balance      Sheet Classification |   | Fair      Value              |    | Balance      Sheet Classification |   | Fair      Value |   | Balance      Sheet Classification |   | Fair      Value |   | Balance      Sheet Classification |   | Fair      Value |   |
| Derivatives      designated as hedging instruments                |                              |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Rate Products                                       | Other      Assets                 |   | $                            | — |   | Other      Assets |   | $ | — |   | Other      Liabilities |   | $ | 209 |   | Other      Liabilities |   | $ | 347 |   |
|                                                              |                              |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      derivatives designated as hedging instruments          |                              |   | $                            | — |   |   |   | $ | — |   |   |   | $ | 209 |   |   |   | $ | 347 |   |
|                                                              |                              |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives      not designated as      hedging instruments       |                              |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Rate Products                                       | Other      Assets                 |   | $                            | 3,102   |   | Other      Assets |   | $ | 4,523 |   | Other      Liabilities |   | $ | 3,537 |   | Other      Liabilities |   | $ | 5,294 |   |
|                                                              |                              |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      derivatives not      designated as hedging instruments |                              |   | $                            | 3,102   |   |   |   | $ | 4,523 |   |   |   | $ | 3,537 |   |   |   | $ | 5,294 |   |

----

| Derivatives      in Fair Value Hedging Relationships | Classification      of Gain/(Loss) Recognized on Derivative |   | Gain/(Loss)      Recognized on Derivative |   |
|------------------------------------------------------|-------------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                 |                                                        |   | Year      Ended December 31,              |   |
|  (Dollars      in thousands)                    |                                                        |   | 2009                                      |   |   | 2008 |   |
|                                                 |                                                        |   |                                      |   |   |   |   |
| Interest      Rate Products                          | Interest      income                                        |   | $                                         | (93    | ) |   | $ | (81 | ) |
|                                                 |                                                        |   |                                      |   |   |   |   |   |   |
| Total                                                |                                                        |   | $                                         | (93    | ) |   | $ | (81 | ) |

| Derivatives      Not Designated as Hedging Instruments | Classification      of Gain/(Loss) Recognized on Derivative |   | Gain/(Loss)      Recognized on Derivative |   |
|--------------------------------------------------------|-------------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                   |                                                        |   | Year      Ended December 31,              |   |
|  (Dollars      in thousands)                      |                                                        |   | 2009                                      |   |   | 2008 |   |
|                                                   |                                                        |   |                                      |   |   |   |   |
| Interest      Rate Products                            | Interest      income                                        |   | $                                         | (294   | ) |   | $ | — |   |
|                                                   | Other      income                                           |   |                                      | 337    |   |   |   | 18 |   |
|                                                   |                                                        |   |                                      |   |   |   |   |   |   |
| Total                                                  |                                                        |   | $                                         | 43     |   |   | $ | 18 |   |

----

----

|                                                | Actual                           | For      CapitalAdequacy      Purposes | To      Be WellCapitalizedUnder      PromptCorrectiveAction      Provision |
|-----------------------------------------------------|----------------------------------|----------------------------------------|----------------------------------------------------------------------------|
| As      of December 31, 2009                        | Amount                           | Ratio                                  |                                                                       |        Amount | Ratio | Amount |   | Ratio |
|                                                | (Dollars in thousands) |
| Total      Capital (to risk weighted assets):       |                             |                                   |                                                                       |   |   |   |   |   |   |   |
| Corporation                                         | $369,864                         | 10.64                                  | %                                                                          | $278,120 | 8.00 | % | $347,650 |   | 10 | % |
| Harleysville      National Bank                     | 403,732                          | 11.65                                  | %                                                                          | 277,302 | 8.00 | % | 346,628 |   | 10 | % |
| Tier 1      Capital (to risk weighted assets): |                             |                                   |                                                                       |   |   |   |   |   |   |   |
| Corporation                                         | 326.121                          | 9.38                                   | %                                                                          | 139,060 | 4.00 | % | 208,590 |   | 6 | % |
| Harleysville      National Bank                     | 360,115                          | 10.39                                  | %                                                                          | 138,651 | 4.00 | % | 207,977 |   | 6 | % |
| Tier 1      Capital (to average assets):       |                             |                                   |                                                                       |   |   |   |   |   |   |   |
| Corporation                                         | 326,121                          | 6.33                                   | %                                                                          | 205,934 | 4.00 | % | 257,418 |   | 5 | % |
| Harleysville      National Bank                     | 360,115                          | 7.01                                   | %                                                                          | 205,399 | 4.00 | % | 256,749 |   | 5 | % |

|                                                | Actual                           | For      CapitalAdequacy      Purposes | To      Be WellCapitalizedUnder      PromptCorrectiveAction      Provision |
|-----------------------------------------------------|----------------------------------|----------------------------------------|----------------------------------------------------------------------------|
| As      of December 31, 2008                        | Amount                           | Ratio                                  |                                                                            |        Amount | Ratio | Amount |   | Ratio |
|                                                | (Dollars in thousands) |
| Total      Capital (to risk weighted assets):       |                             |                                   |                                                                       |   |   |   |   |   |   |   |
| Corporation                                         | $384,522                         | 8.88                                   | %                                                                          | $346,333 | 8.00 | % | $432,917 |   | 10 | % |
| Harleysville      National Bank                     | 370,552                          | 8.58                                   | %                                                                          | 345,536 | 8.00 | % | 431,920 |   | 10 | % |
| Tier 1      Capital (to risk weighted assets): |                             |                                   |                                                                       |   |   |   |   |   |   |   |
| Corporation                                         | 334,467                          | 7.73                                   | %                                                                          | 173,167 | 4.00 | % | 259,750 |   | 6 | % |
| Harleysville      National Bank                     | 320,497                          | 7.42                                   | %                                                                          | 172,768 | 4.00 | % | 259,152 |   | 6 | % |
| Tier 1      Capital (to average assets):       |                             |                                   |                                                                       |   |   |   |   |   |   |   |
| Corporation                                         | 334,467                          | 8.19                                   | %                                                                          | 163,315 | 4.00 | % | 204,144 |   | 5 | % |
| Harleysville      National Bank                     | 320,497                          | 7.88                                   | %                                                                          | 162,689 | 4.00 | % | 203,361 |   | 5 | % |

|                                                | Actual                           | For      CapitalAdequacy Purposes | To      Be WellCapitalizedUnder      PromptCorrectiveAction      Provision |
|-----------------------------------------------------|----------------------------------|----------------------------------------|----------------------------------------------------------------------------|
| As      of December 31, 2007                        | Amount                           | Ratio                                  |                                                                       |        Amount | Ratio | Amount |   | Ratio |
|                                                | (Dollars in thousands) |
| Total      Capital (to risk weighted assets):       |                             |                                   |                                                                       |   |   |   |   |   |   |   |
| Corporation                                         | $329,887                         | 10.67                                  | %                                                                          | $247,273 | 8.00 | % | $309,091 |   | 10 | % |
| Harleysville      National Bank                     | 312,880                          | 10.16                                  | %                                                                          | 246,286 | 8.00 | % | 307,858 |   | 10 | % |
| Tier 1      Capital (to risk weighted assets): |                             |                                   |                                                                       |   |   |   |   |   |   |   |
| Corporation                                         | 302,459                          | 9.79                                   | %                                                                          | 123,637 | 4.00 | % | 185,455 |   | 6 | % |
| Harleysville      National Bank                     | 285,452                          | 9.27                                   | %                                                                          | 123,143 | 4.00 | % | 184,715 |   | 6 | % |
| Tier 1      Capital (to average assets):       |                             |                                   |                                                                       |   |   |   |   |   |   |   |
| Corporation                                         | 302,459                          | 8.72                                   | %                                                                          | 138,795 | 4.00 | % | 173,494 |   | 5 | % |
| Harleysville      National Bank                     | 285,452                          | 8.29                                   | %                                                                          | 137,722 | 4.00 | % | 172,153 |   | 5 | % |

----

|   | Note      21—Regulatory Capital (Continued) |
|--------|---------------------------------------------------|

----

----

----

|                                                                                                                                                                                                                                                                                                                                           |   | Fair      Value Measurement Using                                                   |    |   |                                                         |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------|---------|--------|--------------------------------------------------------------|--------|
|  (Dollars      in thousands)  As      of December 31, 2009                                                                                                                                                                                                                                                                      |   | Quoted      Prices in Active Markets for Identical Assets/Liabilities(Level      1) |    |   |  Significant      Other Observable Inputs(Level      2) |   |   |  Significant      Unobservable Inputs(Level      3) |   |   |    Assets/Liabilitiesat      Fair Value |   |
| Assets                                                                                                                                                                                                                                                                                                                                         |   |                                                                                |    |   |                                                         |   |   |   |   |   |   |   |
| Investment      securities available for sale:                                                                                                                                                                                                                                                                                                 |   |                                                                                |    |   |                                                         |   |   |   |   |   |   |   |
| Obligations      of U.S. government agencies and corporations                                                                                                                                                                                                                                                                                  |   | $                                                                                   | — |   |                                                         | $      | 503 |   |   | $ | — |   |   | $ | 503 |   |
| Obligations      of state and political subdivisions                                                                                                                                                                                                                                                                                           |   |                                                                                | — |   |                                                         |   | 220,260 |   |   |   | — |   |   |   | 220,260 |   |
| Residential      mortgage-backed securities                                                                                                                                                                                                                                                                                                    |   |                                                                                | — |   |                                                         |   | 769,095 |   |   |   | 14,995 |   |   |   | 784,090 |   |
| Trust      preferred pools/collateralized debt obligations                                                                                                                                                                                                                                                                                     |   |                                                                                | — |   |                                                         |   | — |   |   |   | 9,869 |   |   |   | 9,869 |   |
| Corporate      bonds                                                                                                                                                                                                                                                                                                                           |   |                                                                                | — |   |                                                         |   | 2,215 |   |   |   | — |   |   |   | 2,215 |   |
| Equity      securities                                                                                                                                                                                                                                                                                                                         |   |                                                                                | 1,216   |   |                                                         |   | — |   |   |   | — |   |   |   | 21,216 |   |
| Total      investment securities available for sale                                                                                                                                                                                                                                                                                            |   |                                                                                | 1,216   |   |                                                         |   | 992,073 |   |   |   | 24,864 |   |   |   | 1,038,153 |   |
|                                                                                                                                                                                                                                                                                                                                           |   |                                                                                |    |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Residential      mortgage loans held for sale:                                                                                                                                                                                                                                                                                                 |   |                                                                                | — |   |                                                         |   | 37,885 |   |   |   | — |   |   |   | 37,885 |   |
| Derivatives                                                                                    |   |                                                                                | — |   |                                                         |   | 3,102 |   |   |   | — |   |   |   | 3,102 |   |
|     Total      assets                                                      |   |                                                                                | 21,214  |   |                                                         | $      | 1,033,061 |   |   | $ | 24,865 |   |   | $ | 1,079,140 |   |
| Liabilities                                                                                                                                                                                                                                                                                                                                    |   |                                                                                |    |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives                                                                                    |   |                                                                                | — |   |                                                         | $      | 3,746 |   |   | $ | — |   |   | $ | 3,746 |   |
|     Total      liabilities                                                 |   |                                                                                | — |   |                                                         | $      | 3,746 |   |   | $ | — |   |   | $ | 3,746 |   |

| As      of December 31, 2008                                                                                                                                                                                                                                                                                                              |   |   |    |   |   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Assets                                                                                                                                                                                                                                                                                                                                         |   |   |    |   |   |   |   |   |   |   |   |   |
| Investment      securities available for sale:                                                                                                                                                                                                                                                                                                 |   |   |    |   |   |   |   |   |   |   |   |   |
| Obligations      of U.S. government agencies and corporations                                                                                                                                                                                                                                                                                  |   | $      | — |   |   | $      | 93,894 |   |   | $ | — |   |   | $ | 93,894 |   |
| Obligations      of state and political subdivisions                                                                                                                                                                                                                                                                                           |   |   | — |   |   |   | 286,875 |   |   |   | — |   |   |   | 286,875 |   |
| Residential      mortgage-backed securities                                                                                                                                                                                                                                                                                                    |   |   | — |   |   |   | 705,483 |   |   |   | — |   |   |   | 705,483 |   |
| Trust      preferred pools/collateralized debt obligations                                                                                                                                                                                                                                                                                     |   |   | — |   |   |   | 12,715 |   |   |   | 3,149 |   |   |   | 15,864 |   |
| Corporate      bonds                                                                                                                                                                                                                                                                                                                           |   |   | — |   |   |   | 18,167 |   |   |   | — |   |   |   | 18,167 |   |
| Equity      securities                                                                                                                                                                                                                                                                                                                         |   |   | 21,665  |   |   |   | — |   |   |   | — |   |   |   | 21,665 |   |
| Total      investment securities available for sale                                                                                                                                                                                                                                                                                            |   |   | 21,665  |   |   |   | 1,117,134 |   |   |   | 3,149 |   |   |   | 1,141,948 |   |
|                                                                                                                                                                                                                                                                                                                                           |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential      mortgage loans held for sale:                                                                                                                                                                                                                                                                                                 |   |   | — |   |   |   | 17,165 |   |   |   | — |   |   |   | 17,165 |   |
| Derivatives                                                                                    |   |   | — |   |   |   | 4,797 |   |   |   | — |   |   |   | 4,797 |   |
|     Total      assets                                                      |   | $      | 21,665  |   |   | $      | 1,139,096 |   |   | $ | 3,149 |   |   | $ | 1,163,910 |   |
| Liabilities                                                                                                                                                                                                                                                                                                                                    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives                                                                                    |   | $      | — |   |   | $      | 5,689 |   |   | $ | — |   |   | $ | 5,689 |   |
|     Total      liabilities                                                 |   | $      | — |   |   | $      | 5,689 |   |   | $ | — |   |   | $ | 5,689 |   |

----

|  (Dollars      in thousands)   For      the Year Ended December 31, 2009                                             |   |   Residential      mortgage-backed securities |    |   | Trust      preferred pools/collateralized      debt obligations |   |   |    Corporate      bonds |   |   |  Total      Investment SecuritiesAvailable      forSale |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|---------|--------|-----------------------------------------------------------------|--------|--------|----------------------------------------|--------|--------|--------------------------------------------------------------|--------|
|                                                                                                                                     |   |                                                    |    |   |                                                            |   |   |                                   |   |   |                                                         |   |
| Balance,      January 1, 2009                                                                                                            |   | $                                                       | — |   |                                                            | $      | 3,149  |                                   |   | $      | —                                                      |   |   | $ | 3,149 |   |
| Transfers      into Level 3                                                                                                              |   |                                                    | 22,264  |   |                                                            |   | 16,263 |                                   |   |   | 58                                                           |   |   |   | 38,585 |   |
| Total      losses realized:                                                                                                              |   |                                                    |    |   |                                                            |   |   |                                   |   |   |                                                         |   |   |   |   |   |
| Included in earnings(1)                                                                                                                  |   |                                                    | (1,315  | )      |                                                            |   | (6,495 | )                                      |   |   | (36                                                          | )      |   |   | (7,846 | ) |
| Included in other comprehensive      income                                                                                              |   |                                                    | (3,497  | )      |                                                            |   | (1,769 | )                                      |   |   | —                                                      |   |   |   | (5,266 | ) |
| Sales                                                                                                                                    |   |                                                    | — |   |                                                            |   | (1,242 | )                                      |   |   | (22                                                          | )      |   |   | (1,264 | ) |
| Payments                                                                                                                                 |   |                                                    | (2,458  | )      |                                                            |   | (37    | )                                      |   |   | —                                                      |   |   |   | (2,495 | ) |
| Balance,      December 31, 2009                                                                                                     |   | $                                                       | 14,994  |   |                                                            | $      | 9,869  |                                   |   | $      | —                                                      |   |   | $ | 24,863 |   |
|                                                                                                                                     |   |                                                    |    |   |                                                            |   |   |                                   |   |   |                                                         |   |   |   |   |   |
| Total      losses included in earnings from January 1, 2009 to December 31, 2009      relating to assets still held at December 31, 2009 |   | $                                                       | (1,315  | )      |                                                            | $      | (6,495 | )                                      |   | $      | (36                                                          | )      |   | $ | (7,846 | ) |
|                                                                                                                                     |   |                                                    |    |   |                                                            |   |   |                                   |   |   |                                                         |   |   |   |   |   |
| Change      in unrealized losses relating to assets still held at December 31,      2009                                                 |   |                                                    | (3,497  | )      |                                                            |   | (1,769 | )                                      |   |   | (22                                                          | )      |   |   | (5,288 | ) |

| For      the Year Ended December 31, 2008                                                                                                |   |   |    |   |   |   |    |   |   |   |    |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
|                                                                                                                                     |   |   |    |   |   |   |    |   |   |   |    |   |
| Balance,      January 1, 2008                                                                                                            |   | $      | — |   |   | $      | — |   |   | $      | — |   |   | $ | — |   |
| Transfers      into Level 3                                                                                                              |   |   | — |   |   |   | 5,072   |   |   |   | — |   |   |   | 5,072 |   |
| Total      losses realized:                                                                                                              |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Included in earnings(1)                                                                                                                  |   |   | — |   |   |   | (1,923  | )      |   |   | — |   |   |   | (1,923 | ) |
| Included in other comprehensive      income                                                                                              |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Balance,      December 31, 2008                                                                                                     |   | $      | — |   |   | $      | 3,149   |   |   | $      | — |   |   | $ | 3,149 |   |
|                                                                                                                                     |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      losses included in earnings from January 1, 2008 to December 31, 2008      relating to assets still held at December 31, 2008 |   | $      | — |   |   | $      | (1,923  | )      |   | $      | — |   |   | $ | (1,923 | ) |
|                                                                                                                                     |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Change      in unrealized losses relating to assets still held at December 31,      2008                                                 |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |

| (1)   | The      loss is reported in net other-than-temporary impairment losses on      recognized in operations on available for sale securities in the      consolidated statements ofoperations. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                                                                                                                                                                                                                                    |   | Fair      Value Measurement Using                                                   |    |   |                                                   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------|---------|--------|--------------------------------------------------------|--------|
|  (Dollars      in thousands)  As      of December 31, 2009                                                                                                                                                                                               |   | Quoted      Prices in Active Markets for Identical Assets/Liabilities(Level      1) |    |   | Significant      Other Observable Inputs(Level      2) |   |   | Significant      Unobservable Inputs(Level      3) |   |   |  BalanceDecember      31, 2009 |   |
|                                                                                                                                                                                                                                                                    |   |                                                                                |    |   |                                                   |   |   |   |   |   |   |   |
| Assets                                                                                                                                                                                                                                                                  |   |                                                                                |    |   |                                                   |   |   |   |   |   |   |   |
| Impaired      loans                                                            |   | $                                                                                   | — |   |                                                   | $      | 114,332 |   |   | $ | — |   |   | $ | 114,332 |   |
| Goodwill                                                                       |   |                                                                                | — |   |                                                   |   | — |   |   |   | 21,622 |   |   |   | 21,622 |   |
|     Total      assets                                      |   | $                                                                                   | — |   |                                                   | $      | 114,332 |   |   | $ | 21,622 |   |   | $ | 135,954 |   |

| As      of December 31, 2008                                                                                                                                                                                                                                            |   |   |    |   |   |   |   |   |   |   |    |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
|                                                                                                                                                                                                                                                                    |   |   |    |   |   |   |   |   |   |   |    |   |
| Assets                                                                                                                                                                                                                                                                  |   |   |    |   |   |   |   |   |   |   |    |   |
| Impaired      loans                                                            |   | $      | — |   |   | $      | 59,987 |   |   | $      | — |   |   | $ | 59,987 |   |
| Mortgage      servicing rights                                                                                                                                                                                                                                          |   |   | — |   |   |   | 1,558  |   |   |   | — |   |   |   | 1,558 |   |
|     Total      assets                                      |   | $      | — |   |   | $      | 61,545 |   |   | $      | — |   |   | $ | 61,545 |   |

|   | Disclosures      about Fair Value of FinancialInstruments |
|--------|-----------------------------------------------------------|

----

|   | Short-term      financial instruments |
|--------|---------------------------------------|

|   | Deposits |
|--------|----------|

|   | Long-term      borrowings and subordinated debt |
|--------|-------------------------------------------------|

----

|   | The      carrying and fair values of certain financial instruments were as      follows: |
|--------|------------------------------------------------------------------------------------------|

|                                          |   | December      31,                |
|-----------------------------------------------|--------|----------------------------------|
|                                          |   | 2009                             |   |   |  2008 |
|                                          |   | CarryingAmount                   |   |   | FairValue |   |   |        CarryingAmount |   |   | FairValue |   |   |   |
|                                          |   | (Dollars in thousands) |
| Cash      and cash equivalents                |   | $                                | 843,957 |   |   | $ | 843,957 |   |   | $ | 102,526 |   |   | $ | 102,526 |   |
| Investment      securities available for sale |   |                             | 1,038,153 |   |   |   | 1,038,153 |   |   |   | 1,141,948 |   |   |   | 1,141,948 |   |
| Investment      securities held to maturity   |   |                             | 25,324 |   |   |   | 25,192 |   |   |   | 50,434 |   |   |   | 50,059 |   |
| Residential      mortgage loans held for sale |   |                             | 37,885 |   |   |   | 37,885 |   |   |   | 17,165 |   |   |   | 17,165 |   |
| Loans      and leases, net                    |   |                             | 2,888,873 |   |   |   | 2,798,773 |   |   |   | 3,618,124 |   |   |   | 3,591,202 |   |
| Bank-owned      life insurance                |   |                             | 90,216 |   |   |   | 90,216 |   |   |   | 87,081 |   |   |   | 87,081 |   |
| Time      deposits                            |   |                             | 1,549,617 |   |   |   | 1,563,798 |   |   |   | 1,588,921 |   |   |   | 1,613,684 |   |
| Long-term      borrowings                     |   |                             | 679,889 |   |   |   | 716,120 |   |   |   | 759,658 |   |   |   | 809,618 |   |
| Subordinated      debt                        |   |                             | 93,828 |   |   |   | 36,756 |   |   |   | 93,743 |   |   |   | 50,474 |   |

----

|   | Note      23—Parent-Company Only FinancialInformation |
|--------|-------------------------------------------------------------|

|   | CONDENSED      BALANCE SHEETS |
|--------|-------------------------------|

|                                                  |   | December      31,           |    |
|-------------------------------------------------------|--------|-----------------------------|---------|
|                                                  |   | 2009                        |    |   | 2008 |   |
|                                                  |   | (Dollars      in thousands) |    |
| Assets                                                |   |                        |    |   |   |   |
| Cash                                                  |   | $                           | 6,463   |   |   | $ | 7,181 |   |
| Investments      in subsidiaries                      |   |                        | 394,704 |   |   |   | 558,524 |   |
| Other      investments                                |   |                        | 3,729   |   |   |   | 3,804 |   |
| Other      assets                                     |   |                        | 3,491   |   |   |   | 5,598 |   |
| Total      assets                                     |   | $                           | 408,387 |   |   | $ | 575,107 |   |
| Liabilities      and shareholders’ equity       |   |                        |    |   |   |   |   |   |
| Subordinated      debt                                |   | $                           | 93,828  |   |   | $ | 93,743 |   |
| Short-term      borrowings                            |   |                        | 50,000  |   |   |   | — |   |
| Other      liabilities                                |   |                        | 2,990   |   |   |   | 6,639 |   |
| Total      liabilities                                |   |                        | 146,818 |   |   |   | 100,382 |   |
| Shareholders’      equity                       |   |                        | 261,569 |   |   |   | 474,725 |   |
| Total      liabilities and shareholders’ equity |   | $                           | 408,387 |   |   | $ | 575,107 |   |

|                                                                                              |   | Year      Ended December 31, |     |
|---------------------------------------------------------------------------------------------------|--------|------------------------------|----------|
|                                                                                              |   | 2009                         |     |   | 2008 |   |   | 2007 |   |
|                                                                                              |   | (Dollars      in thousands)  |     |
| Dividends      from subsidiaries                                                                  |   | $                            | 4,692    |   |   | $ | 27,859 |   |   | $ | 48,623 |   |
| Interest      from subsidiaries                                                                   |   |                         | 39       |   |   |   | 70 |   |   |   | 433 |   |
| Investment      income                                                                            |   |                         | 154      |   |   |   | 163 |   |   |   | 152 |   |
| Total      income                                                                                 |   |                         | 4,885    |   |   |   | 28,092 |   |   |   | 49,208 |   |
| Interest      on borrowings                                                                       |   |                         | 5,447    |   |   |   | 5,484 |   |   |   | 4,314 |   |
| Other-than-temporary      impairment of available for sale securities                             |   |                         | 57       |   |   |   | — |   |   |   | — |   |
| Noninterest      expense                                                                          |   |                         | 330      |   |   |   | 148 |   |   |   | 180 |   |
| Total      expense                                                                                |   |                         | 5,834    |   |   |   | 5,632 |   |   |   | 4,494 |   |
| (Loss)      Income before income taxes and equity in undistributed netincome      of subsidiaries |   |                         | (949     | ) |   |   | 22,460 |   |   |   | 44,714 |   |
| Income      tax benefit                                                                           |   |                         | (1,389   | ) |   |   | (1,820 | ) |   |   | (1,302 | ) |
| Income      before equity in undistributed net (losses) income of      subsidiaries               |   |                         | 440      |   |   |   | 24,280 |   |   |   | 46,016 |   |
| Equity      in undistributed net (losses) income of subsidiaries                                  |   |                         | (219,915 | ) |   |   | 813 |   |   |   | (19,421 | ) |
| Net      (loss) income                                                                            |   | $                            | (219,475 | ) |   | $ | 25,093 |   |   | $ | 26,595 |   |

----

|   | Note      23—Parent-Company Only Financial Information  (Continued) |
|--------|---------------------------------------------------------------------------|

|                                                                                                               |   | Year      Ended December 31, |     |
|--------------------------------------------------------------------------------------------------------------------|--------|------------------------------|----------|
|                                                                                                               |   | 2009                         |     |   | 2008 |   |   | 2007 |   |
|                                                                                                               |   | (Dollars      in thousands)  |     |
| Operating      activities:                                                                                         |   |                         |     |   |   |   |   |   |   |
| Net      (loss) income                                                                                             |   | $                            | (219,475 | ) |   | $ | 25,093 |   |   | $ | 26,595 |   |
| Adjustments      to reconcile net (loss) income to net cash  provided by (used in)      operating activities: |   |                         |     |   |   |   |   |   |   |   |   |   |
| Equity      in undistributed net losses (income) of subsidiaries                                                   |   |                         | 219,915  |   |   |   | (813 | ) |   |   | 19,421 |   |
| Stock-based      compensation expense                                                                              |   |                         | 206      |   |   |   | 136 |   |   |   | 118 |   |
| Net      decrease (increase) in other assets                                                                       |   |                         | 1,158    |   |   |   | (65 | ) |   |   | (133 | ) |
| Net      increase (decrease) in other liabilities                                                                  |   |                         | 1,236    |   |   |   | (517 | ) |   |   | 69 |   |
| Other-than-temporary      impairment of available for sale securities                                              |   |                         | 57       |   |   |   | – |   |   |   | – |   |
| Other,      net                                                                                                    |   |                         | 8        |   |   |   | 16 |   |   |   | (709 | ) |
| Net      cash provided by operating activities                                                                     |   |                         | 3,105    |   |   |   | 23,850 |   |   |   | 45,361 |   |
| Investing      activities:                                                                                         |   |                         |     |   |   |   |   |   |   |   |   |   |
| Net      cash paid acquired (paid) due to acquisition                                                              |   |                         | —  |   |   |   | 817 |   |   |   | (49,761 | ) |
| Capital      contributions to subsidiaries                                                                         |   |                         | (50,000  | ) |   |   | — |   |   |   | — |   |
| Net      cash (used in) provided by investing activities                                                           |   |                         | (50,000  | ) |   |   | 817 |   |   |   | (49,761 | ) |
| Financing      activities:                                                                                         |   |                         |     |   |   |   |   |   |   |   |   |   |
| Advances      of long-term subordinated debt                                                                       |   |                         | —  |   |   |   | — |   |   |   | 23,196 |   |
| Advances      of short-term debt                                                                                   |   |                         | 50,000   |   |   |   | — |   |   |   | — |   |
| Cash      dividends                                                                                                |   |                         | (4,692   | ) |   |   | (25,109 | ) |   |   | (23,623 | ) |
| Repurchase      of common stock                                                                                    |   |                         | —  |   |   |   | — |   |   |   | (2,196 | ) |
| Proceeds      from the exercise of stock options                                                                   |   |                         | 869      |   |   |   | 1,567 |   |   |   | 925 |   |
| Excess      tax benefits from stock-based compensation                                                             |   |                         | —  |   |   |   | 277 |   |   |   | 42 |   |
| Net      cash provided by (used in) financing activities                                                           |   |                         | 46,177   |   |   |   | (23,265 | ) |   |   | (1,656 | ) |
| Net      (decrease) increase in cash                                                                               |   |                         | (718     | ) |   |   | 1,402 |   |   |   | (6,056 | ) |
| Cash      and cash equivalents at beginning of year                                                                |   |                         | 7,181    |   |   |   | 5,779 |   |   |   | 11,835 |   |
| Cash      and cash equivalents at end of year                                                                      |   | $                            | 6,463    |   |   | $ | 7,181 |   |   | $ | 5,779 |   |

----

|  /s/ Grant Thornton LLP   |
|------------------------------------------|
| Philadelphia,      Pennsylvania          |
| March 12,    2010                        |

----

| Item      9. | Changes      in and Disagreements with Accountants on Accounting and Financial      Disclosure |
|--------------|------------------------------------------------------------------------------------------------|

| Item      9A. | Controls      and Procedures |
|---------------|------------------------------|

|   | (i) | Conclusion      Regarding the Effectiveness of Disclosure Controls and      Procedures |
|--------|-----|----------------------------------------------------------------------------------------|

|   | (ii) | Management’s      Report on Internal Control Over Financial Reporting and Compliance with      Federal Laws and Regulations |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------|

| ·   | Pertain      to the maintenance of records that in reasonable detail accurately and      fairly reflect the transactions and dispositions of the assets of the      Corporation; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Provide      reasonable assurance that transactions are recorded as necessary to permit      preparation of financial statements in accordance with generally accepted      accounting principles, and that receipts and expenditures of the      Corporation are being made only in accordance with authorizations of      management and directors of the Corporation;and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Provide      reasonable assurance regarding prevention or timely detection of      unauthorized acquisition, use or disposition of the Corporation’s assets      that could have a material effect of the financial    statements. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item      9A. | Controls      and Procedures (Continued) |
|---------------|------------------------------------------|

----

|   /s/ Grant Thornton LLP  |
|------------------------------------------|
| Philadelphia,      Pennsylvania          |
| March 12,    2010                        |

| Item      9B. | Other      Information |
|---------------|------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                           |   | No.      of VotesFor |       |   | No.      of VotesAgainst |   |       | No.      of VotesAbstaining |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|------------|--------|--------------------------|--------|------------|-----------------------------|--------|
| To      adopt the Agreement and Plan of Merger by and between First Niagara      Financial Group, Inc., and Harleysville National Corporation, dated as of      July 26, 2009, and the transactions contemplated by the Merger      Agreement.                                                                                                                                                                 |   |                 | 32,875,069 |   |                     |   | 932,191    |                        |   |   | 71,789 |   |
| To      transact any other business that properly comes before the Special Meeting      of shareholders, or any adjournments or postponements of the Special      Meeting, including, without limitation, a motion to adjourn the Special      Meeting to another time or place for the purpose of soliciting additional      proxies in order to adopt the Merger Agreement and the Merger or      otherwise. |   |                 | 20,467,112 |   |                     |   | 13,152,296 |                        |   |   | 184,392 |   |

----

| Item      10. | Directors,      Executive Officers and CorporateGovernance |
|---------------|------------------------------------------------------------|

|   Name |   Age | Principal      Occupation and Directorshipsfor      Past Five Years andPosition      Held with the Corporation | Director      ofCorporationSince |
|------------------|-----------------|----------------------------------------------------------------------------------------------------------------|----------------------------------|

| John      J. Cunningham, III | 67 | Vice      Chairman of the law firm of Cozen O’Connor, Philadelphia, Pennsylvania,      having previously been either the Managing Partner or Chairman of the      Business Law Department of Cozen O’Connor.  Mr. Cunningham      previously served as a director of Willow Financial Bancorp and Willow      Financial Bank and of Chester Valley Bancorp and First Financial Bank from      1998 to 2008; Director of Harleysville and Harleysville National Bank. Mr.      Cunningham has an extensive background in legal and corporate governance      matters.  His experience as a partner and leader in a      nationally-recognized law firm brings valuable managerial and corporate      governance skills to      the full Board, as well as to the Executive and Nominating and Corporate      Governance Committees. | 2008 |
|------------------------------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------|
| Harold      A. Herr          | 62 | Partner      – Albert S. Herr & Sons;Real      Estate Development; Director of Harleysville and Harleysville National      Bank. Mr. Herr’s long tenure as a director of the Corporation, as well as      his extensive business and real estate development experience, brings to      the Board broad knowledge of the Corporation’s primary customer base which      makes him and, in turn, the Board keenly aware of the Corporation’s role      within the community.                                                                                                                                                                                                                                                                                                                                                            | 1987 |

----

| Stephanie      S. Mitchell | 61 | Secretary,      Director – R. C. Smith Industries, Inc; Secretary/Treasurer, Director –      Cole Candy & Tobacco Co., Inc.; Director of Harleysville and      Harleysville National Bank; Member of HNB’s Western Regional Advisory      Board. Ms. Mitchell’s experience as a director and executive of other      corporations based in Eastern Pennsylvania brings to the Board a valuable      perspective of the Corporation’s core operating locales and assists the      Board in making well-planned, thoughtful business    decisions.                                                                                                                                                                                                                 | 2002 |
|----------------------------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------|
| Brent      L. Peters       | 63 | President,      East Penn Bank Division of Harleysville National Bank; Executive Vice      President, Chief Administrative Officer and Director of Harleysville and      Harleysville National Bank; Former President and Chief Executive Officer      of East Penn Financial Corporation; Chairman, HNB’s Regional Advisory      Boards:  Northern and East Penn Bank Division. Mr. Peters’      former position as Chief Executive Officer with East Penn Bank, together      with his current executive position with the Corporation combines      managerial skills and day-to-day business operational know-how, which      assist the Board in understanding the interplay between its decisions and      its practical impact on the Corporation’s operations. | 2007 |

|   Name       |   Age | Principal      Occupationfor      Past Five Years andPosition      Held with the Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Director      of CorporationSince |
|------------------------|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|
| LeeAnn      B. Bergey  | 56              | Chief      Executive Officer – BTG Holdings, LLC; Director of Harleysville and      Harleysville National Bank. Ms. Bergey’s long tenure as a director of the      Corporation brings valuable, veteran experience in the banking industry,      which is invaluable to the Board’s understanding of the industry in which      it operates.  Her financial expertise also makes her an      important member of the Corporation’s Audit Committee.                                                                                                                                                                                                                        | 1999                              |
| James      E. McErlane | 67              | Attorney      and Principal of the law firm of Lamb McErlane, West Chester,      Pennsylvania, since 1971. Interim President of Chester Valley Bancorp and      First Financial Bank from June to November 2000. Mr. McErlane previously      served as a director of Chester Valley Bancorp and First Financial Bank      from 1991 to 2005 and Chairman from 2000 to 2005; and as a director of      Willow Financial Bancorp from 2005 to 2008; Director of Harleysville and      Harleysville National Bank. Mr. McErlane’s extensive knowledge of business      law, together with his past directorships in other regional banks, brings      a distinct and experienced viewpoint to the Board. | 2008                              |
| Demetra      M. Takes  | 59              | President      and Chief Executive Officer and Director of Harleysville National Bank;      Director of Harleysville.  Served as Interim President &      Chief Executive Officer of Harleysville from 9/2006 to 7/2007. Member of      HNB’s Regional Advisory Boards:  Western, Northern, and East      Penn Bank Division. Ms. Takes’ significant experience as the chief      executive officer of Harleysville National Bank makes her a valued member      of the Board. Additionally, her even temperament and ability to      communicate and encourage discussion, together with her managerial      experience, brings a unique dynamic to the Board.          | 2005                              |

----

| Paul      D. Geraghty | 56 | President,      Chief Executive Officer and Director of Harleysville; Executive Vice      President and Director of Harleysville National Bank. Executive Vice      President, National City Bank. Mr. Geraghty’s many years of experience as      an executive in the banking industry, together with his strong managerial      skills, makes him an effective member of the Board and an invaluable      leader of the Corporation.                                                       | 2007 |
|-----------------------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------|
| James      A. Wimmer  | 68 | Attorney-at-Law      – Philip & Wimmer;Director      of Harleysville and Harleysville National Bank; Member of HNB’s Northern      Regional Advisory Board. Mr. Wimmer’s long tenure as a member of the      Board, together with his background as an attorney, brings valuable      business experience and a unique perspective to the      Corporation.  Additionally, his financial expertise makes him a      valued member of the Board’s Audit Committee. | 2000 |

| Walter      E. Daller, Jr. | 70 | Chairman      of Harleysville and Harleysville National Bank; Member of HNB’s Western      Regional & Northern Regional Advisory Boards; Retired Chief Executive      Officer of Harleysville and Harleysville National Bank; Chairman,      President and Chief Executive Officer of Harleysville and Chairman of      Harleysville National Bank from 1981 to 2004. Mr. Daller’s veteran      experience as a member of our Board and in the banking industry provides      the Board with in-depth and incomparable knowledge of the Corporation and      its business. | 1977 |
|----------------------------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------|
| Thomas      C. Leamer      | 68 | Retired      President – Delaware Valley College; Director of Harleysville and      Harleysville National Bank. Mr. Leamer’s financial expertise and      managerial background brings to the Board a comprehensive and invaluable      understanding of the Corporation and its business, and makes him an      invaluable member of the Board’s Audit Committee.                                                                                                                                                                                                       | 2003 |
| A.      Ross Myers         | 60 | Chief      Executive Officer, American Infrastructure; Director of Harleysville and      Harleysville National Bank. Mr. Myer’s position as head of a locally-based      corporation, combined with his unique business perspective and strong      leadership abilities, brings to the Board in-depth, valuable business      insight.                                                                                                                                                                                                                                              | 2006 |

----

|   Board      Member  |    Corporate      Board |    Audit |    Compensation |    Executive |        Nominating/Corporate      Governance |    ComplianceCommittee |  Enterprise      Risk Management Committee |
|-------------------------------------|----------------------------------------|-------------------------|--------------------------------|-----------------------------|--------------------------------------------------|---------------------------------------|-------------------------------------------------|
|  L.      B. Bergey             | ü                                 | ü                  |                           | ü                      |                                             |  ü                          |        ü                              |
|  J.      J. Cunningham         | ü                                 |                    |                           |                        |        ü                               |  ü                          |                                            |
|  W.      E. Daller, Jr.        | ü                                 |                    |                           | ü                      |        ü                               |                                  |                                            |
|  P.      D. Geraghty           | ü                                 |                    |                           | ü                      |                                             |                                  |                                            |
|  H.      A. Herr               | ü                                 |                    | ü                         | ü                      |                                             |                                  |                                            |
|  T.      C. Leamer             | ü                                 |                         |                           | ü                      |        ü                               |                                  |                                            |
|  J.      E. McErlane           | ü                                 |                    |                           |                        |                                             |  ü                          |        ü                              |
|  S.      S. Mitchell           | ü                                 |                    | ü                         | ü                      |                                             |                                  |                                            |
|  A.      R. Myers              | ü                                 |                    | ü                         |                        |        ü                               |                                  |                                            |
|  B.      L. Peters             | ü                                 |                    |                           | ü                      |                                             |  ü                          |        ü                              |
|  D.      M. Takes              | ü                                 |                    |                           |                        |                                             |                                  |                                            |
|  J.      A. Wimmer             | ü                                 | ü                  |                           | ü                      |                                             |                                  |                                            |
| Meetings      Held in 2009          | 8                                      | 10                      | 6                              | 6                           |  6                                          |  1                               | 1                                               |

| Audit      Committee: |
|-----------------------|

----

| Compensation      Committee: |
|------------------------------|

----

| Executive      Committee: |
|---------------------------|

| Nominating      and Corporate Governance Committee: |
|-----------------------------------------------------|

| Compliance      Committee: |
|----------------------------|

| Enterprise      Risk Management Committee |
|-------------------------------------------|

----

| Name                  | Age    | Years      in Position                | Principal      Occupation for the Past Five Years and Position Held with Harleysville and      Subsidiaries                                   |
|-----------------------|--------|---------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|
|                  |   |                                  |                                                                                                                                          |
| Donna      M. Coughey | 59     | 2008      – present             | Executive      Vice President, Harleysville and Harleysville National  Bank                                                                   |
|                  |   | 2005–      2008                 | President      and Chief Executive Officer, Willow Financial Bancorp and Willow Financial      Bank                                           |
|                  |   | 2000      – 2005                | President      and Chief Executive Officer, Chester Valley Bancorp Inc. and First      Financial Bank                                         |
|                  |   |                                  |                                                                                                                                          |
| Paul      D. Geraghty | 56     | 2007      – present             | President      and Chief Executive Officer and Director, Harleysville, Executive Vice      President and Director, Harleysville National Bank |
|                  |   | 2004      – 2007                | Executive      Vice President, National City Corporation                                                                                      |
|                  |   | 1999      – 2004                | Executive      Vice President, National City Bank                                                                                             |
|                  |   |                                  |                                                                                                                                          |
| Brent      L. Peters  | 63     | 2008      – present             | Executive      Vice President, Chief Administrative Officer and Director, Harleysville      and Harleysville National Bank                    |
|                  |   | 2007      – present             | Executive      Vice President and Director, Harleysville and Harleysville National      Bank                                                  |
|                  |   | 2007      – present             | President,      East Penn Bank Division of Harleysville National Bank                                                                         |
|                  |   | 2003      – 2007                | President      and Chief Executive Officer, East Penn Financial    Corporation                                                                |
|                  |   | 1991      – 2007                | President      and Chief Executive Officer, East Penn Bank                                                                                    |
|                  |   |                                  |                                                                                                                                          |
| George      S. Rapp   | 57     | 2006      – present             | Executive      Vice President and Chief Financial Officer, Harleysville and Harleysville      National Bank                                   |
|                  |   | 2005      – 2006                | Senior      Vice President, Chief Financial Officer and Treasurer, Harleysville and      Harleysville National Bank                           |
|                  |   | 2004      – 2005                | Executive      Vice President, Chief Financial Officer, Astea    International                                                                |
|                  |   |                                  |                                                                                                                                          |
| Demetra      M. Takes | 59     | 2005      – present             | Executive      Vice President and Director, Harleysville and Harleysville National      Bank                                                  |
|                  |   | September      2006 – July 2007 | Interim      President and Chief Executive Officer, Harleysville                                                                              |
|                  |   | 2000      – present             | President      and Chief Executive Officer, Harleysville National  Bank                                                                       |

----

| Item      11. | Executive      Compensation |
|---------------|-----------------------------|

| ·   | $1,575      for each Board meeting attended, |
|--------------------|----------------------------------------------|

| ·   | $1,575      for Annual Meeting attendance, |
|--------------------|--------------------------------------------|

| ·   | $540      for each Board committee meeting attended, except for Audit Committee      which receives $675, |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| ·   | an      annual retainer of $14,850, and |
|--------------------|-----------------------------------------|

| ·   | an      annual retainer of $2,700 to committee chairpersons, except for the      chairperson of the Audit Committee who receives  $4,050. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------|

----

| Director      Compensation Table   |
|------------------------------------|
|      Name |     Fees      Earned($) |    OptionAwards($)(1)(2) | Change      inPension      Value andNonqualified      DeferredCompensation      Earnings ($)(3) |    All      OtherCompensation($) |     Total($) |
| LeeAnn      B. Bergey              | $36,495 | -0- | -- | -- | $  36,495 |
| Michael      L. Browne             | $32,670 | -0- | -- | -- | $  32,670 |
| John      J. Cunningham, III       | $34,830 | -0- | $  61,497      (a) | -- | $  96,327 |
| Walter      E. Daller, Jr.         | $40,730 | -0- | -- | $558,685      (4) | $599,415 |
| Harold      A. Herr                | $34,425 | -0- | -- | -- | $  34,425 |
| Thomas      C. Leamer              | $40,635 | -0- | -- | -- | $  40,635 |
| James      E. McErlane             | $33,750 | -0- | $199,542      (a) | -- | $233,292 |
| Stephanie      S. Mitchell         | $37,450      (5) | -0- | -- | -- | $  37,450 |
| A.      Ross Myers                 | $32,265 | -0- | -- | -- | $  32,265 |
| James      A. Wimmer               | $43,660      (6) | -0- | -- | $75,206      (7) | $118,866 |

| (1)   | No      options were awarded to Harleysville non-employee directors during      2009. |
|-----------------|---------------------------------------------------------------------------------------|

| (2)   | At      December 31, 2009, each non-employee director held the following amount of      outstanding, aggregate stock optionawards: |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------|

| Name                             | Option      Awards (a) | Name                       | Option      Awards (a) |
|----------------------------------|------------------------|----------------------------|------------------------|
| LeeAnn      B. Bergey            | 37,547                 | Thomas      C. Leamer      | 13,651                 |
| John      J. Cunningham, III (b) |  12,469           | Stephanie      S. Mitchell | 13,651                 |
| Walter      E. Daller, Jr. (c)   | 287,753                | A.      Ross Myers         | -0-                    |
| Harold      A. Herr              | 40,047                 | James      A. Wimmer       | 27,481                 |
| James      E. McErlane (b)       | 12,469                 |                       |                   |

| a.   | All      outstanding options awarded to non-employee directors, with the exception      of Messrs. Cunningham, Daller and McErlane, were annual grants between      2000 and 2006.  All grants were made under substantially the      same terms, with 100% vesting after 6 months from date of grant and      expiration 10 years from date of grant.  The grant prices were      based on either of the following criteria:  (i) the average of      the high and low prices of the Corporation’s common stock on the date of      grant; (ii) the closing price of the Corporation’s common stock on the      date of grant; or (iii) the closing price of the Corporation’s common      stock on the last trading day immediately preceding the date of      grant. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| b.   | Mr.      Cunningham’s and Mr. McErlane’s options resulted from the conversion of      their outstanding Willow Financial Bancorp stock options into Harleysville      options on December 5, 2008, the effective date of the merger of      Harleysville and Willow Financial Bancorp.  Willow stock options      and grant prices were converted according to the terms of the merger      agreement. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | With      the exception of the January 3, 2006 grant, as awarded to all non-employee      directors, Mr. Daller’s outstanding option grants were awarded pursuant to      his employment with the Corporation; all are fully vested and will expire      10 years from their respective dates ofgrant. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | The      sum of (i) the aggregate change in the actuarial present value of the      director’s benefit under all defined benefit and actuarial pension plans      from the pension plan measurement date used for financial statement      reporting purposes with respect to Harleysville’s audited financial      statements for 2008 to the pension plan measurement date used for      financial statement reporting purposes with respect to Harleysville’s      audited financial statements for 2009 and (ii) above-market or      preferential earnings on non-tax-qualified deferred      compensation. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a.   | As      of December 31, 2009, Messrs. Cunningham and McErlane had accrued $61,497      and $199,542, respectively, under Willow’s deferred compensation plans, as      assumed by Harleysville at the time  of  merger. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Includes      $107,000 consulting fees paid under terms of Mr. Daller’s consulting      contract which became effective upon his retirement as President and CEO      of Harleysville, $49,842 payout under the Deferred Compensation Plan for      the Directors of Harleysville National Bank & Trust effective July 1,      1985,  and $401,843 annual payout under Supplemental Executive      Retirement Benefit Plan, pursuant to Mr. Daller’s previous      employment. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | Includes      fees paid in connection with service on the Corporation’s Western Regional      Advisory Board. |
|-----------------|---------------------------------------------------------------------------------------------------------------------|

| (6)   | Includes      fees paid in connection with service on the Corporation’s Northern      Regional Advisory Board. |
|-----------------|----------------------------------------------------------------------------------------------------------------------|

| (7)   | Mr.      Wimmer received payouts under 2 separate deferred compensation plans      assumed by Harleysville pursuant to the merger and acquisition of Citizens      Bank and Trust Company of Palmerton.  During 2009, he received      $31,327 payout under the Citizens Bank and Trust Company of Palmerton 1983      Deferred Compensation Plan and $43,879 payout under the Citizens Bank and      Trust Company of Palmerton 1987 Deferred Compensation  Plan. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| Community      Bank System, Inc.  | Investors      Bancorp            | S&T      Bancorp, Inc. |
|-----------------------------------|-----------------------------------|----------------------------|
| Dime      Community Bancshares    | National      Penn Bancshares     | Signature      Bank        |
| First      Commonwealth Financial | NBT      Bancorp, Inc.            | Sun      Bancorp, Inc.     |
| First      Financial Bancorp      | Northwest      Bancorp, Inc.      | Trustco      Bank Corp.    |
| First      Place Financial Corp.  | Park      National Corp.          | WSFS      Financial Corp.  |
| F.N.B.      Corp.                 | Provident      Financial Services |                       |

----

|   | 1.2.    | Executives      did not receive any or received very modest salary increases      over  two year period (2007-2008).Executives      had not received any performance incentive awards for  2007. |
|--------|------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. | Executives      had not received any equity grants, other than time of hire commitments,      over the two year period(2007-2008). |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

| Summary      Compensation Table                                                                                  |
|-----------------------------------------------------------------------------------------------------------------------|
| Name      & Principal Position                                                                                    | Year | Salary$ | Bonus      (1) $ | OptionAwards $ | Change      in Pension Value and Non-qualified Deferred Compensation      Earnings$ | AllOther      Compensation (6)$ | Total      Compensation$ |
|                                                                                                                  |   |   |   |   |   |   |   |
| Paul      D. GeraghtyPresident      & CEO                                                                         | 200920082007 | $375,000$375,000$154,327 | $0$15,750$0 | $66,681      (2a,b,c)$50,348      (2b,c)$21,212    (2c) | $      211,496$      153,549$0 | $     8,922$  15,075$       670 | $662,099$609,722$176,209  |
| George      S. RappExecutive      Vice President & CFO                                                       | 200920082007  | $228,000$187,250$187,250 | $0$  7,865$0 | $22,106      (3a,b,c)$  7,081      (3b,c)$  6,437    (3c) | $0$0$   24,549 | $     6,957$  54,184$  10,703 | $257,063$256,380$228,939  |
| Demetra      M. TakesPresident      & CEOHarleysville      National Bank                                     | 200920082007 | $309,960$309,960$377,460 | $0$13,018$0 | $49,092      (4a,b,c)$34,643      (4b,c)$33,591   (4c) | $   17,389$   70,878$      170,232 | $     4,172$494,988$    5,516 | $380,613$923,487$586,799  |
| Brent      L. PetersExecutive      Vice President & CAO;  President, East Penn Bank      Division  | 200920082007 | $296,000$296,000n/a |            $0$12,432n/a | $24,767      (5a,b)$  1,019      (5b)n/a | $     1,922$     1,049n/a | $    9,990$      20,322n/a | $332,679$330,822n/a |
| Donna      M. CougheyExecutive      Vice President                                                                    | 200920082007  | $350,000n/an/a  | $0n/an/a  | -0-n/an/a  | -0-n/an/a  | $   66,966n/an/a  | $416,966n/an/a  |

----

| (1)   | No  bonuses      were paid for services in either 2009 or 2007.  Cash bonus      earned in 2008 was paid in December2008 |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Mr.      Geraghty’s equity compensationawards: |
|-----------------|------------------------------------------------------|

| a.   | Represents      the value of equity compensation awarded to Mr. Geraghty prior to 2009,      with service periods extending into2009. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Represents      the value of equity compensation recognized in 2008 for options granted      12/17/2008:  50,000 options granted, 7-year term, 3-year      vesting, grant date fair value =$3.5387. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Represents      the value of equity compensation awarded to Mr. Geraghty in      2007.  25,000 options granted 7/23/2007, special vesting as      follows:  within 5 years from date of grant, 12,500 options will      vest when the Corporation’s stock price equals or exceeds $20/share for 30      consecutive trading days; and 12,500 will vest when the Corporation’s      stock price equals or exceeds $22.50/share for 30 consecutive      days.  grant date fair value =$3.08. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Mr.      Rapp’s equity compensation awards: |
|-----------------|---------------------------------------------------|

| a.   | Represents      the value of equity compensation recognized in 2009 for options granted      prior to 2009. |
|----------------|-------------------------------------------------------------------------------------------------------------|

| b.   | Represents      the value of equity compensation recognized in 2008 for options granted      12/17/2008:  13,318 options granted, 7-year term, 3-year      vesting, grant date fair value =$3.5387. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Represents      the value of equity compensation awarded to Mr. Rapp prior to 2008, with      service periods extending into 2008, and recognized for financial      reporting purposes in each respective year:  2,205 options      granted 5/18/2005, 5-year vesting, grant date fair value = $5.2451; and,      3,675 options granted 12/8/2005, 5-year vesting, grant date fair value =      $5.6104. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Ms.      Takes’ equity compensation awards: |
|-----------------|---------------------------------------------------|

| a.   | Represents      the value of equity compensation recognized in 2009 for options granted      prior to 2009. |
|----------------|-------------------------------------------------------------------------------------------------------------|

| b.   | Represents      the value of equity compensation recognized in 2008 for options granted      12/17/2008:  22,046 options granted, 7-year term, 3-year      vesting, grant date fair value =$3.5387. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Represents      the value of equity compensation awarded to Ms. Takes prior to 2008, with      service periods extending into 2008, and recognized for financial      reporting purposes in each respective year:  6,945 options      granted 12/30/2003, 5-year vesting, grant date fair value = $7.4941; 8,269      options granted 12/30/2004, 5-year vesting, grant date fair value =      $6.7192; and, 10,762 options granted 12/8/2005, 5-year vesting, grant date      fair value = $5.6104. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | Mr.      Peters’ equity compensation awards: |
|-----------------|----------------------------------------------------|

| a.   | Represents      the value of equity compensation recognized in 2009 for options granted      prior to 2009. |
|----------------|-------------------------------------------------------------------------------------------------------------|

| b.   | Represents      the value of equity compensation recognized in 2008 for options granted to      Mr. Peters on 12/17/2008:  21,053 options granted, 7-year term,      3-year vesting, grant date fair value =$3.5387. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (6)   | All      Other Compensation |
|-----------------|-----------------------------|

|    Name |    Year |  CarAllowance      (a)($)     | Country      Club Membership($) |  Harleysville’s401(k)      PlanContribution      ($) |  HealthBenefits($) |  ContractPayouts($)  |
|------------------------|------------------------|------------------------------------|---------------------------------|-----------------------------------------------------------------|-------------------------|---------------------------|
| P.      Geraghty       | 200920082007           | $3,874$3,575$   670 | $0(b)$0(b)$0(b)                 | $5,048$11,500--                                                 | ------                  | ------                    |
| G.      Rapp           | 200920082007           | $3,888$1,708$5,086                 | ------                          | $  3,069$  9,756$  5,617          | ------                  | --$42,720 (c)--           |
| D.      Takes          | 200920082007           | ------                             | ------                          | $      4,172$11,500$  5,516                           |  ----              |  $483,488      (d)-- |
| B.      Peters         | 200920082007           | ----n/a                            | $6,006$8,822n/a                 | $3,984$11,500n/a                                                | ----n/a                 | -      --n      --n/a     |
| D.      Coughey        | 200920082007           | n/an/an/a                          | --n/an/a                        | $4,711n/an/a                                                    | --n/an/a                | $62,255      (e)n/an/a    |

| (a)   | Taxable      benefit calculation of personal use of company provided vehicle or car      allowance, if applicable. |
|-----------------|--------------------------------------------------------------------------------------------------------------------|

| (b)   | While      Mr. Geraghty is entitled to country club membership under terms of his      employment agreement, he chooses not to accept the provision at this      time. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Distribution      paid to Mr. Rapp as a result of termination of Harleysville’s pension      plan. |
|-----------------|----------------------------------------------------------------------------------------------------------|

| (d)   | Distribution      paid to Ms. Takes as a result of termination of Harleysville’s pension      plan. |
|-----------------|-----------------------------------------------------------------------------------------------------------|

| (e)   | Distribution      paid to Ms. Coughey in accordance with terms of Willow Financial      SERP. |
|-----------------|-----------------------------------------------------------------------------------------------|

----

| Outstanding      Equity Awards at Fiscal Year-End |
|---------------------------------------------------|
| Option      Awards                                |
| Name                                         | Number      of SecuritiesUnderlying      Unexercised Options (#) Exercisable |   | Number      of SecuritiesUnderlying      Unexercised Options (#) Unexercisable | OptionExercisePrice      ($) | OptionExpiration      Date |
|                                              |   |   |   |   |   |
| Paul      D. Geraghty                             | -0-16,667 | (1)(6) | 25,00033,333 | $14.49$14.06 | 07/23/201712/17/2015 |
| George      S. Rapp                               | 1,7642,9404,440 | (5)(4)(6) | 4417358,878 | $19.54$20.10$14.06 | 05/18/201512/08/201512/17/2015 |
| Demetra      M. Takes                             | 6,9458,2698,6097,349 | (2)(3)(4)(6) | -0--0- 2,15314,697 | $27.37$24.54$20.10$14.06 | 12/30/201312/30/201412/08/201512/17/2015 |
| Brent      L. Peters                              | 7,018 | (6) | 14,035 | $14.06 | 12/17/2015 |
| Donna      M. Coughey                             | 1,97213,405 | (7)(8) | -0--0- | $12.07$16.76 | 06/19/2012      06/30/2013 |

| (1)   | Incentive      stock option granted July 23, 2007, subject to ISO limitation under      Section 422(d) of the Internal Revenue Code.  Special      vesting:  within 5 years from date of grant, 12,500 options will      vest when the Corporation’s stock price equals or exceeds $20/share for 30      consecutive trading days; and 12,500 will vest when the Corporation’s      stock price equals or exceeds $22.50/share for 30 consecutive      days. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Incentive      stock option granted December 30, 2003, vesting in 5 equal annual      installments on the anniversary of grant, subject to ISO limitation under      Section 422(d) of the Internal RevenueCode. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Incentive      stock option granted December 30, 2004, vesting in 5 equal annual      installments on the anniversary of grant, subject to ISO limitation under      Section 422(d) of the Internal RevenueCode. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Incentive      stock option granted December 8, 2005, vesting in 5 equal annual      installments on the anniversary of grant, subject to ISO limitation under      Section 422(d) of the Internal RevenueCode. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | Incentive      stock option granted May 18, 2005, vesting in 5 equal annual installments      on the anniversary of grant, subject to ISO limitation under Section      422(d) of the Internal RevenueCode. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6)   | Incentive      stock option granted December 17, 2008, vesting in 3 equal annual      installments on the anniversary of grant, subject to ISO limitation under      Section 422(d) of the Internal RevenueCode. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7)   | Incentive      stock option assumed by Harleysville upon acquisition of Willow Financial      Corporation.  All options are fully vested and will expire on      6/19/2012. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8)   | Incentive      stock assumed by Harleysville upon acquisition of Willow Financial      Corporation.  All options are fully vested and will expire on      6/30/2013. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Pension      Benefits  |
|------------------------|
|    Name |    Plan      Name |  Number      of Years Credited Service(#) | Present      Valueof      Accumulated Benefit($) | Payments      During Last Fiscal Year($) |
|                   |   |   |   |   |
| Paul      D. Geraghty  | Supplemental      Employee Retirement Plan | -- | $365,045 | -0- |
| George      S. Rapp    | Supplemental      Employee Retirement Plan | -- | -0- | -0- |
| Demetra      M. Takes  | Supplemental      Employee Retirement Plan | -- | $968,223 | -0- |
| Brent      L. Peters   | Supplemental      Employee Retirement Plan | -- | $595,488 | -0- |
| Donna      M. Coughey  | Supplemental      Employee Retirement Plan | -- | $249,020 | $62,255 |
| Donna      M. Coughey  | Willow      Financial Deferred Compensation Plan | -- | $      37,764 | -0- |

----

----

| Element                                                        |   | Voluntary      Resignation withGood      Reason |    |   | Voluntary      Resignation, absent Good Reason |    |   | InvoluntaryFor      Cause |   |    | Involuntary      Without Cause |   |   | Death      (1) |    |   | Disability      (2) |    |      | Retirement |   |    | Change      inControl |   |
|----------------------------------------------------------------|--------|-------------------------------------------------|---------|--------|------------------------------------------------|---------|--------|---------------------------|--------|---------|--------------------------------|--------|--------|----------------|---------|--------|---------------------|---------|-----------|------------|--------|---------|-----------------------|--------|
| Paul      D. Geraghty                                          |   |
| Accelerated      Cash, Equity, Enhanced Severance and Benefits |   |                                            |    |   |
| Cash      Severance                                            |   |                                            |    |   |                                           |    |   |                      |   |    |                           |   |   |           |    |   |                |    |      |       |   |    |                  |   |
| Base      Salary + Bonus                                       |   | $                                               | 712,500 |   |                                           | $       | 0      |                      |   | $       | 0                              |   |   | $              | 712,500 |   |                | $       | 0         |       |   | $       | 142,500               |   |   | $ | 0 |   |   | $ | 931,500 |   |
| Pro-rata      Target Bonus (as applicable)                     |   | $                                               | 0       |   |                                           | $  | 0      |                      |   | $  | 0                              |   |   | $         | 0       |   |                | $  | 0         |       |   | $  | 0                     |   |   | $  | 0 |   |   | $  | 0 |   |
|                                                           |   |                                            |    |   |                                           |    |   |                      |   |    |                           |   |   |           |    |   |                |    |      |       |   |    |                  |   |   |   |   |   |   |   |   |   |
| Total      Cash Severance                                      |   | $                                               | 712,500 |   |                                           | $       | 0      |                      |   | $       | 0                              |   |   | $              | 712,500 |   |                | $       | 0         |       |   | $       | 142,500               |   |   | $ | 0 |   |   | $ | 931,500 |   |
| Pension      Benefit Enhancements                              |   |                                            |    |   |                                           |    |   |                      |   |    |                           |   |   |           |    |   |                |    |      |       |   |    |                  |   |   |   |   |   |   |   |   |   |
| Pension      (3)                                               |   | $                                               | 0       |   |                                           | $       | 0      |                      |   | $       | 0                              |   |   | $              | 0       |   |                | $       | 0         |       |   | $       | 0                     |   |   | $ | 0 |   |   | $ | 0 |   |
| SERP      (4)                                                  |   | $                                               | 0       |   |                                           | $       | 0      |                      |   | $       | 0                              |   |   | $              | 0       |   |                | $       | 3,824,100 |       |   | $       | 0                     |   |   | $ | 0 |   |   | $ | 365,045 |   |
| Subtotal      Enhanced Pension Benefits                        |   | $                                               | 0       |   |                                           | $       | 0      |                      |   | $       | 0                              |   |   | $              | 0       |   |                | $       | 3,824,100 |       |   | $       | 0                     |   |   | $ | 0 |   |   | $ | 365,045 |   |
| Other      Benefits & Perquisites                          |   |                                            |    |   |                                           |    |   |                      |   |    |                           |   |   |           |    |   |                |    |      |       |   |    |                  |   |   |   |   |   |   |   |   |   |
| Health      and Welfare Benefit Continuation                   |   | $                                               | 31,946  |   |                                           | $       | 0      |                      |   | $       | 0                              |   |   | $              | 31,946  |   |                | $       | 0         |       |   | $       | 16,001                |   |   | $ | 0 |   |   | $ | 40,353 |   |
| Executive      Benefits & Perquisites Continuation         |   | $                                               | 0       |   |                                           | $       | 0      |                      |   | $       | 0                              |   |   | $              | 0       |   |                | $       | 0         |       |   | $       | 0                     |   |   | $ | 0 |   |   | $ | 0 |   |
| Subtotal      Benefits & Perquisites                       |   | $                                               | 31,946  |   |                                           | $       | 0      |                      |   | $       | 0                              |   |   | $              | 31,946  |   |                | $       | 0         |       |   | $       | 16,001                |   |   | $ | 0 |   |   | $ | 40,353 |   |
| 280G      Tax Gross-up                                         |   | $                                               | 0       |   |                                           | $       | 0      |                      |   | $       | 0                              |   |   | $              | 0       |   |                | $       | 0         |       |   | $       | 0                     |   |   | $ | 0 |   |   | $ | 0 |   |
| Total      Severance, Pension Enhancements, Benefits           |   | $                                               | 625,696 |   |                                           | $       | 0      |                      |   | $       | 0                              |   |   | $              | 625,696 |   |                | $       | 3,824,100 |       |   | $       | 158,501               |   |   | $ | 0 |   |   | $ | 1,186,898 |   |
|                                                           |   |                                            |    |   |                                           |    |   |                      |   |    |                           |   |   |           |    |   |                |    |      |       |   |    |                  |   |   |   |   |   |   |   |   |   |
| Long-Term      Incentives Values                               |   |                                            |    |   |                                           |    |   |                      |   |    |                           |   |   |           |    |   |                |    |      |       |   |    |                  |   |   |   |   |   |   |   |   |   |
| In-the-Money      Value of Stock Options (5)                   |   | $                                               | 0       |   |                                           | $       | 0      |                      |   | $       | 0                              |   |   | $              | 0       |   |                | $       | 0         |       |   | $       | 0                     |   |   | $ | 0 |   |   | $ | 0 |   |
| Value      of Restricted Stock                                 |   | $                                               | 0       |   |                                           | $       | 0      |                      |   | $       | 0                              |   |   | $              | 0       |   |                | $       | 0         |       |   | $       | 0                     |   |   | $ | 0 |   |   | $ | 0 |   |
| Total      Value of Equity Grants                              |   | $                                               | 0       |   |                                           | $       | 0      |                      |   | $       | 0                              |   |   | $              | 0       |   |                | $       | 0         |       |   | $       | 0                     |   |   | $ | 0 |   |   | $ | 0 |   |
| Full      "Walk-Away" Value                                    |   | $                                               | 625,696 |   |                                           | $       | 0      |                      |   | $       | 0                              |   |   | $              | 625,696 |   |                | $       | 3,824,100 |       |   | $       | 158,501               |   |   | $ | 0 |   |   | $ | 1,186,898 |   |

| (1)   | Does      not include the proceeds from any employer-paid life insurance      policies. |
|-----------------|-----------------------------------------------------------------------------------------|

| (2)   | Disability      salary payment is 70% times Annual Base Salary, offset by amounts payable      under any disability plan of HMS. The HMS disability benefit is capped at      $10,000 per month. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (3)   | The      Corporation terminated its non-contributory defined-benefit pension plan      in May 2008. Accumulated benefits under the Corporation’s pension plan      were distributed to participants in 2008 following plan      termination. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Under      executive’s employment agreement, the Corporation shall enter into a      Supplemental Executive Retirement Plan with executive, but the agreement      has not yet been executed.  Subject to the terms of the      anticipated plan, the executive shall not vest in any benefit for the      first five years of service, and then 20% per year for the next five years      of service.  Upon age 65, Mr. Geraghty will receive a retirement      benefit equal to 60% of the sum of (i) his previous year’s annual base      salary and (ii) an average of the last three  years’ |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a.   | Death      before retirement:  The benefit is paid monthly to survivors in      the amount of $29,072 per month for the first 12 months following      executive’s death; then $22,763 monthly from month 13 until the date that      would have been the executive’s 65th      birthday, but not less than 180months. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b. | Change      in control – Mr. Geraghty would be entitled to the accrued benefit, which      was $365,045 as of December 31, 2009. The executive would be paid monthly,      for life, an amount that represents the present value of the accrued      benefit, but not less than 180months. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (5)   | Based      on the closing price of Harleysville National Corporation common stock as      of December 31, 2009, $6.43. |
|-----------------|------------------------------------------------------------------------------------------------------------------------|

| a.   | Vesting      of stock options does not accelerate upon death or      disability.  The optionee or the optionee’s estate, as      applicable, may exercise the vested portion of any outstanding awards for      a period of one-year from the date of disability or death, as applicable,      of the optionee.  As of December 31, 2009, Mr. Geraghty had no      vested options. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Vesting      of stock options does not accelerate for any reason, except change in      control.  In the case of normal retirement, the optionee may      exercise the vested portion of any outstanding awards for a period of 3      months from the date of retirement.  As of December 31, 2009,      Mr. Geraghty had no vested options. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Upon      a change in control, vesting accelerates and all outstanding options      become immediately exercisable.  As of December 31, 2009, the      intrinsic value of all outstanding options held by Mr. Geraghty, presumed      to vest on such event, was $0. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Element                                                        |   | Voluntary      Resignation with Good Reason |    |   | Voluntary      Resignation, absent Good Reason |    |   | Involuntary For      Cause |   |   | Involuntary      Without Cause |   |   | Death      (1) |    |   | Disability      (2) |    |   | Retirement |   |    | Change      in Control |   |
|----------------------------------------------------------------|--------|---------------------------------------------|---------|--------|------------------------------------------------|---------|--------|---------------------------------|--------|--------|--------------------------------|--------|--------|----------------|---------|--------|---------------------|---------|--------|------------|--------|---------|------------------------|--------|
| George      S. Rapp                                            |   |
| Accelerated      Cash, Equity, Enhanced Severance and Benefits |   |
| Cash      Severance                                            |   |                                        |    |   |                                           |    |   |                            |   |   |                           |   |   |           |    |   |                |    |   |       |   |    |                   |   |
| Base      Salary + Bonus                                       |   | $                                           | 228,000 |   |                                           | $       | 0      |                            |   | $      | 0                              |   |   | $              | 228,000 |   |                | $       | 0      |       |   | $       | 39,600                 |   |   | $ | 0 |   |   | $ | 456,000 |   |
| Pro-rata      Target Bonus (as applicable)                     |   | $                                      | 0       |   |                                           | $  | 0      |                            |   | $      | 0                              |   |   | $         | 0       |   |                | $  | 0      |       |   | $  | 0                      |   |   | $  | 0 |   |   | $  | 0 |   |
|                                                           |   |                                        |    |   |                                           |    |   |                            |   |   |                           |   |   |           |    |   |                |    |   |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| Total      Cash Severance                                      |   | $                                           | 228,000 |   |                                           | $       | 0      |                            |   | $      | 0                              |   |   | $              | 228,000 |   |                | $       | 0      |       |   | $       | 39,600                 |   |   | $ | 0 |   |   | $ | 456,000 |   |
| Pension      Benefit Enhancements                              |   |                                        |    |   |                                           |    |   |                            |   |   |                           |   |   |           |    |   |                |    |   |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| Pension      (3)                                               |   | $                                           | 0       |   |                                           | $       | 0      |                            |   | $      | 0                              |   |   | $              | 0       |   |                | $       | 0      |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| SERP      (4)                                                  |   | $                                           | 0       |   |                                           | $       | 0      |                            |   | $      | 0                              |   |   | $              | 0       |   |                | $       | 0      |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Subtotal      Enhanced Pension Benefits                        |   | $                                           | 0       |   |                                           | $       | 0      |                            |   | $      | 0                              |   |   | $              | 0       |   |                | $       | 0      |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Other      Benefits & Perquisites                          |   |                                        |    |   |                                           |    |   |                            |   |   |                           |   |   |           |    |   |                |    |   |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| Health      and Welfare Benefit Continuation                   |   | $                                           | 24,803  |   |                                           | $       | 0      |                            |   | $      | 0                              |   |   | $              | 24,803  |   |                | $       | 0      |       |   | $       | 20,627                 |   |   | $ | 0 |   |   | $ | 49,606 |   |
| Executive      Benefits & Perquisites Continuation         |   | $                                           | 0       |   |                                           | $       | 0      |                            |   | $      | 0                              |   |   | $              | 0       |   |                | $       | 0      |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Subtotal      Benefits & Perquisites                       |   | $                                           | 24,803  |   |                                           | $       | 0      |                            |   | $      | 0                              |   |   | $              | 24,803  |   |                | $       | 0      |       |   | $       | 20,627                 |   |   | $ | 0 |   |   | $ | 49,606 |   |
| 280G      Tax Gross-up                                         |   | $                                           | 0       |   |                                           | $       | 0      |                            |   | $      | 0                              |   |   | $              | 0       |   |                | $       | 0      |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Total      Severance, Pension Enhancements, Benefits           |   | $                                           | 252,803 |   |                                           | $       | 0      |                            |   | $      | 0                              |   |   | $              | 252,803 |   |                | $       | 0      |       |   | $       | 60,227                 |   |   | $ | 0 |   |   | $ | 505,606 |   |
|                                                           |   |                                        |    |   |                                           |    |   |                            |   |   |                           |   |   |           |    |   |                |    |   |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| Long-Term      Incentives Values                               |   |                                        |    |   |                                           |    |   |                            |   |   |                           |   |   |           |    |   |                |    |   |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| In-the-Money      Value of Stock Options (5)                   |   | $                                           | 0       |   |                                           | $       | 0      |                            |   | $      | 0                              |   |   | $              | 0       |   |                | $       | 0      |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Value      of Restricted Stock                                 |   | $                                           | 0       |   |                                           | $       | 0      |                            |   | $      | 0                              |   |   | $              | 0       |   |                | $       | 0      |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Total      Value of Equity Grants                              |   | $                                           | 0       |   |                                           | $       | 0      |                            |   | $      | 0                              |   |   | $              | 0       |   |                | $       | 0      |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Full      "Walk-Away" Value                                    |   | $                                           | 252,803 |   |                                           | $       | 0      |                            |   | $      | 0                              |   |   | $              | 252,803 |   |                | $       | 0      |       |   | $       | 60,227                 |   |   | $ | 0 |   |   | $ | 505,606 |   |

| (1)   | Does      not include the proceeds from any employer-paid life insurance      policies. |
|-----------------|-----------------------------------------------------------------------------------------|

| (2)   | Disability      salary payment is 70% times Annual Base Salary, offset by amounts payable      under any disability plan of HMS. The HMS disability benefit is capped at      $10,000 per month. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | The      Corporation terminated its non-contributory defined-benefit pension plan      in May 2008. Accumulated benefits under the Corporation’s pension plan      were distributed to participants in 2008 following plan      termination. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Currently      not applicable to Mr. Rapp. |
|-----------------|--------------------------------------------|

| (5)   | Based      on the closing price of Harleysville National Corporation common stock as      of December 31, 2009, $6.43. |
|-----------------|------------------------------------------------------------------------------------------------------------------------|

| a.   | Vesting      of stock options does not accelerate upon death or      disability.  The optionee or the optionee’s estate, as      applicable, may exercise the vested portion of any outstanding awards for      a period of one year from the date of disability or death, as applicable,      of the optionee.  As of December 31, 2009, intrinsic value of      all outstanding exercisable options held by Mr. Rapp was zero since the      exercise price was greater than the market price of the Corporation’s      common stock as of December 31,2009. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| b.   | Vesting      of stock options does not accelerate for any reason, except change in      control.  In the case of normal retirement, the optionee may      exercise the vested portion of any outstanding awards for a period of 3      months from the date of retirement.  As of December 31, 2009,      the intrinsic value of all outstanding exercisable options held by Mr.      Rapp was zero since the exercise price was greater than the market price      of the Corporation’s common stock as of December 31,  2008. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Upon      a change in control, vesting accelerates and all outstanding options      become immediately exercisable.  As of December 31, 2009, the      intrinsic value of all outstanding options held by Mr. Rapp, presumed to      vest on such event, was $0. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Element                                                        |   | Voluntary      Resignation with Good Reason |      |   | Voluntary      Resignation, absent Good Reason |    |   | Involuntary For      Cause |   |    | Involuntary      Without Cause |   |   | Death      (1) |      |   | Disability      (2) |    |      | Retirement |   |    | Change      in Control |   |
|----------------------------------------------------------------|--------|---------------------------------------------|-----------|--------|------------------------------------------------|---------|--------|---------------------------------|--------|---------|--------------------------------|--------|--------|----------------|-----------|--------|---------------------|---------|-----------|------------|--------|---------|------------------------|--------|
| Demetra      M. Takes                                          |   |
| Accelerated      Cash, Equity, Enhanced Severance and Benefits |   |
| Cash      Severance                                            |   |                                        |      |   |                                           |    |   |                            |   |    |                           |   |   |           |      |   |                |    |      |       |   |    |                   |   |
| Base      Salary + Bonus                                       |   | $                                           | 309,960   |   |                                           | $       | 0      |                            |   | $       | 0                              |   |   | $              | 309,960   |   |                | $       | 0         |       |   | $       | 96,972                 |   |   | $ | 0 |   |   | $ | 619,920 |   |
| Pro-rata      Target Bonus (as applicable)                     |   | $                                      | 0         |   |                                           | $  | 0      |                            |   | $  | 0                              |   |   | $         | 0         |   |                | $  | 0         |       |   | $  | 0                      |   |   | $  | 0 |   |   | $  | 0 |   |
|                                                           |   |                                        |      |   |                                           |    |   |                            |   |    |                           |   |   |           |      |   |                |    |      |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| Total      Cash Severance                                      |   | $                                           | 309,960   |   |                                           | $       | 0      |                            |   | $       | 0                              |   |   | $              | 309,960   |   |                | $       | 0         |       |   | $       | 96,972                 |   |   | $ | 0 |   |   | $ | 619,920 |   |
| Pension      Benefit Enhancements                              |   |                                        |      |   |                                           |    |   |                            |   |    |                           |   |   |           |      |   |                |    |      |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| Pension      (3)                                               |   | $                                           | 0         |   |                                           |    | 0      |                            |   | $       | 0                              |   |   | $              | 0         |   |                | $       | 0         |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| SERP      (4)                                                  |   | $                                           | 968,223   |   |                                           | $       | 0      |                            |   | $       | 0                              |   |   | $              | 968,223   |   |                | $       | 1,765,967 |       |   | $       | 0                      |   |   | $ | 968,223 |   |   | $ | 968,223 |   |
| Subtotal      Enhanced Pension Benefits                        |   | $                                           | 968,223   |   |                                           | $       | 0      |                            |   | $       | 0                              |   |   | $              | 968,223   |   |                | $       | 1,765,967 |       |   | $       | 0                      |   |   | $ | 968,223 |   |   | $ | 968,223 |   |
| Other      Benefits & Perquisites                          |   |                                        |      |   |                                           |    |   |                            |   |    |                           |   |   |           |      |   |                |    |      |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| Health      and Welfare Benefit Continuation                   |   | $                                           | 11,842    |   |                                           | $       | 0      |                            |   | $       | 0                              |   |   | $              | 11,842    |   |                | $       | 0         |       |   | $       | 7,666                  |   |   | $ | 0 |   |   | $ | 23,684 |   |
| Executive      Benefits & Perquisites Continuation         |   | $                                           | 0         |   |                                           | $       | 0      |                            |   | $       | 0                              |   |   | $              | 0         |   |                | $       | 0         |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Subtotal      Benefits & Perquisites                       |   | $                                           | 11,842    |   |                                           | $       | 0      |                            |   | $       | 0                              |   |   | $              | 11,842    |   |                | $       | 0         |       |   | $       | 7,666                  |   |   | $ | 0 |   |   | $ | 23,684 |   |
| 280G      Tax Gross-up                                         |   | $                                           | 0         |   |                                           | $       | 0      |                            |   | $       | 0                              |   |   | $              | 0         |   |                | $       | 0         |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Total      Severance, Pension Enhancements, Benefits           |   | $                                           | 1,290,025 |   |                                           | $       | 0      |                            |   | $       | 0                              |   |   | $              | 1,290,025 |   |                | $       | 1,765,967 |       |   | $       | 104,638                |   |   | $ | 968,223 |   |   | $ | 1,611,827 |   |
|                                                           |   |                                        |      |   |                                           |    |   |                            |   |    |                           |   |   |           |      |   |                |    |      |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| Long-Term      Incentives Values                               |   |                                        |      |   |                                           |    |   |                            |   |    |                           |   |   |           |      |   |                |    |      |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| In-the-Money      Value of Stock Options (5)                   |   | $                                           | 0         |   |                                           | $       | 0      |                            |   | $       | 0                              |   |   | $              | 0         |   |                | $       | 0         |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Value      of Restricted Stock                                 |   | $                                           | 0         |   |                                           | $       | 0      |                            |   | $       | 0                              |   |   | $              | 0         |   |                | $       | 0         |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Total      Value of Equity Grants                              |   | $                                           | 0         |   |                                           | $       | 0      |                            |   | $       | 0                              |   |   | $              | 0         |   |                | $       | 0         |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Full      "Walk-Away" Value                                    |   | $                                           | 1,290,025 |   |                                           | $       | 0      |                            |   | $       | 0                              |   |   | $              | 1,290,025 |   |                | $       | 1765,967  |       |   | $       | 104,638                |   |   | $ | 968,223 |   |   | $ | 1,611,827 |   |

| (1)   | Does      not include the proceeds from any employer-paid life insurance      policies. |
|-----------------|-----------------------------------------------------------------------------------------|

| (2)   | Disability      salary payment is 70% times Annual Base Salary, offset by amounts payable      under any disability plan of HMS. The HMS disability benefit is capped at      $10,000 per month. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | The      Corporation terminated its non-contributory defined-benefit pension plan      in May 2008. Accumulated benefits under the Corporation’s pension plan      were distributed to participants in 2008 following plan      termination. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (4)   | Under      the Corporation’s Supplemental Executive Retirement Plan, the executive is      entitled to monthly benefits asfollows: |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------|

| a.   | Death      before retirement:  The benefit is paid monthly to survivors in      the amount of  $26,757 per month for the first 12 months      following executive’s death; then $13,379 monthly from month 13 until the      date that would have been the executive’s 65th      birthday, but not less than 120months. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Good      Reason:  The executive is entitled to the accrued benefit, which      was $968,223 as of December 31, 2009.  The executive would be      paid monthly, for life, an amount that represents the present value of the      accrued benefit, but not less than 120months. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Retirement:  Not      eligible at this time.  Monthly retirement benefit is equal to      50% times 1/60th  of      Ms. Takes’ total annual compensation (including salary, overtime and      bonus) from the company for her last 5 consecutive full calendar years of      employment immediately preceding her retirement at or after age 65, less ½      of her monthly social security benefit, less the monthly income from the      company’s defined benefit pension plan, and less the projected monthly      retirement income derived from the company’s matching contributions to her      401(k).  If she dies before receiving a minimum of 120 monthly      retirement payments, the remaining payments will be paid to her      beneficiary. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d.   | Change      in control:  Ms. Takes would be entitled to the accrued benefit,      which was $968,223 as of December 31, 2009.  The executive would      be paid monthly, for life, an amount that represents the present value of      the accrued benefit, but not less than 120  months. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | Based      on the closing price of Harleysville National Corporation common stock as      of December 31, 2009, $6.43. |
|-----------------|------------------------------------------------------------------------------------------------------------------------|

| a.   | Vesting      of stock options does not accelerate upon death or      disability.  The optionee or the optionee’s estate, as      applicable, may exercise the vested portion of any outstanding awards for      a period of one year from the date of disability or death, as applicable,      of the optionee.  As of December 31, 2008, the intrinsic value      of all outstanding exercisable options held by Ms. Takes was zero since      the exercise price was greater than the market price of the Corporation’s      common stock as of December 31,2009. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Vesting      of stock options does not accelerate for any reason, except change in      control.  In the case of normal retirement, the optionee may      exercise the vested portion of any outstanding awards for a period of 3      months from the date of retirement.  As of December 31, 2009,      the intrinsic value of all outstanding exercisable options held by Ms.      Takes was zero since the exercise price was greater than the market price      of the Corporation’s common stock as of December 31,  2008. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Upon      a change in control, vesting accelerates and all outstanding options      become immediately exercisable.  As of December 31, 2009, the      intrinsic value of all outstanding options held by Ms. Takes, presumed to      vest on such event, was $0. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Element                                                        |   | Voluntary      Resignation with Good Reason |      |   | Voluntary      Resignation, absent Good Reason |    |    | Involuntary For      Cause |   |    | Involuntary      Without Cause |   |   | Death      (1) |      |   | Disability      (2) |    |    | Retirement |   |    | Change      in Control |   |
|----------------------------------------------------------------|--------|---------------------------------------------|-----------|--------|------------------------------------------------|---------|---------|---------------------------------|--------|---------|--------------------------------|--------|--------|----------------|-----------|--------|---------------------|---------|---------|------------|--------|---------|------------------------|--------|
| Brent      L. Peters                                           |   |
| Accelerated      Cash, Equity, Enhanced Severance and Benefits |   |
| Cash      Severance                                            |   |                                        |      |   |                                           |    |    |                            |   |    |                           |   |   |           |      |   |                |    |    |       |   |    |                   |   |
| Base      Salary + Bonus                                       |   | $                                           | 296,000   |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 296,000   |   |                | $       | 0       |       |   | $       | 87,200                 |   |   | $ | 0 |   |   | $ | 592,000 |   |
| Pro-rata      Target Bonus (as applicable)                     |   | $                                           | 0         |   |                                           | $  | 0       |                            |   | $  | 0                              |   |   | $         | 0         |   |                | $  | 0       |       |   | $  | 0                      |   |   | $  | 0 |   |   | $  | 0 |   |
|                                                           |   |                                        |      |   |                                           |    |    |                            |   |    |                           |   |   |           |      |   |                |    |    |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| Total      Cash Severance                                      |   | $                                           | 296,000   |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 296,000   |   |                | $       | 0       |       |   | $       | 87,200                 |   |   | $ | 0 |   |   | $ | 592,000 |   |
| Pension      Benefit Enhancements                              |   |                                        |      |   |                                           |    |    |                            |   |    |                           |   |   |           |      |   |                |    |    |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| Pension      (3)                                               |   | $                                           | 0         |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 0         |   |                | $       | 0       |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| SERP      (4)                                                  |   | $                                           | 900,000   |   |                                           | $       | 900,000 |                            |   | $       | 0                              |   |   | $              | 900,000   |   |                | $       | 360,673 |       |   | $       | 900,000                |   |   | $ | 900,000 |   |   | $ | 900,000 |   |
| Subtotal      Enhanced Pension Benefits                        |   | $                                           | 900,000   |   |                                           | $       | 900,000 |                            |   | $       | 0                              |   |   | $              | 900,000   |   |                | $       | 360,673 |       |   | $       | 900,000                |   |   | $ | 900,000 |   |   | $ | 900,0000 |   |
| Other      Benefits & Perquisites                          |   |                                        |      |   |                                           |    |    |                            |   |    |                           |   |   |           |      |   |                |    |    |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| Health      and Welfare Benefit Continuation                   |   | $                                           | 20,271    |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 20,271    |   |                | $       | 0       |       |   | $       | 16,095                 |   |   | $ | 0 |   |   | $ | 20,271 |   |
| Executive      Benefits & Perquisites Continuation         |   | $                                           | 0         |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 0         |   |                | $       | 0       |       |   | $       | 0                      |   |   | $ | 0 |   |   |   |   |   |
| Subtotal      Benefits & Perquisites                       |   | $                                           | 20,271    |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 20,271    |   |                | $       | 0       |       |   | $       | 16,095                 |   |   | $ | 0 |   |   | $ | 20,271 |   |
| 280G      Tax Gross-up                                         |   | $                                           | 0         |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 0         |   |                | $       | 0       |       |   | $       | 0                      |   |   | $ | 0 |   |   |   |   |   |
| Total      Severance, Pension Enhancements, Benefits           |   | $                                           | 1,216,271 |   |                                           | $       | 900,000 |                            |   | $       | 0                              |   |   | $              | 1,216,271 |   |                | $       | 360,673 |       |   | $       | 1,003,295              |   |   | $ | 900,000 |   |   | $ | 1,512,271 |   |
|                                                           |   |                                        |      |   |                                           |    |    |                            |   |    |                           |   |   |           |      |   |                |    |    |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| Long-Term      Incentives Values                               |   |                                        |      |   |                                           |    |    |                            |   |    |                           |   |   |           |      |   |                |    |    |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| In-the-Money      Value of Stock Options (5)                   |   | $                                           | 0         |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 0         |   |                | $       | 0       |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Value      of Restricted Stock                                 |   | $                                           | 0         |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 0         |   |                | $       | 0       |       |   | $       | 0                      |   |   | $ | 0 |   |   |   |   |   |
| Total      Value of Equity Grants                              |   | $                                           | 0         |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 0         |   |                | $       | 0       |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Full      "Walk-Away" Value                                    |   | $                                           | 1,216,271 |   |                                           | $       | 900,000 |                            |   | $       | 0                              |   |   | $              | 1,216,271 |   |                | $       | 360,673 |       |   | $       | 1,003,295              |   |   | $ | 900,000 |   |   | $ | 1,520,271 |   |

| (1)   | Does      not include the proceeds from any employer-paid life insurance      policies. |
|-----------------|-----------------------------------------------------------------------------------------|

| (2)   | Disability      salary payment is 70% times Annual Base Salary, offset by amounts payable      under any disability plan of HMS. The HMS disability benefit is capped at      $10,000 per month.. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Not      applicable to Mr. Peters. |
|-----------------|------------------------------------|

| (4)   | Under      Mr. Peters’ Supplemental Executive Retirement Plan, the executive is      entitled to receive $60,000 per year paid on a monthly basis for 15      years. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (5)   | Based      on the closing price of Harleysville National Corporation common stock as      of December 31, 2009, $6.43. |
|-----------------|------------------------------------------------------------------------------------------------------------------------|

| a.   | Vesting      of stock options does not accelerate upon death or      disability.  The optionee or the optionee’s estate, as      applicable, may exercise the vested portion of any outstanding awards for      a period of one year from the date of disability or death, as applicable,      of the optionee.  As of December 31, 2008, Mr. Peters had no      vested options. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Vesting      of stock options does not accelerate for any reason, except change in      control.  In the case of normal retirement, the optionee may      exercise the vested portion of any outstanding awards for a period of 3      months from the date of retirement.  As of December 31, 2009,      Mr. Peters had no vested options. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Upon      a change in control, vesting accelerates and all outstanding options      become immediately exercisable.  As of December 31, 2009, the      intrinsic value of all outstanding options held by Mr. Peters, presumed to      vest on such event, was $0. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Element                                                        |   | Voluntary      Resignation with Good Reason |    |   | Voluntary      Resignation, absent Good Reason |    |    | Involuntary For      Cause |   |    | Involuntary      Without Cause |   |   | Death      (1) |    |   | Disability      (2) |    |    | Retirement |   |    | Change      in Control |   |
|----------------------------------------------------------------|--------|---------------------------------------------|---------|--------|------------------------------------------------|---------|---------|---------------------------------|--------|---------|--------------------------------|--------|--------|----------------|---------|--------|---------------------|---------|---------|------------|--------|---------|------------------------|--------|
| Donna      M. Coughey                                          |   |
| Accelerated      Cash, Equity, Enhanced Severance and Benefits |   |
| Cash      Severance                                            |   |                                        |    |   |                                           |    |    |                            |   |    |                           |   |   |           |    |   |                |    |    |       |   |    |                   |   |
| Base      Salary + Bonus                                       |   | $                                           | 0       |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 0       |   |                | $       | 0       |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Pro-rata      Target Bonus (as applicable)                     |   | $                                      | 0       |   |                                           | $  | 0       |                            |   | $  | 0                              |   |   | $         | 0       |   |                | $  | 0       |       |   | $  | 0                      |   |   | $  | 0 |   |   | $  | 0 |   |
|                                                           |   |                                        |    |   |                                           |    |    |                            |   |    |                           |   |   |           |    |   |                |    |    |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| Total      Cash Severance                                      |   | $                                           | 0       |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 0       |   |                | $       | 0       |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Pension      Benefit Enhancements                              |   |                                        |    |   |                                           |    |    |                            |   |    |                           |   |   |           |    |   |                |    |    |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| Pension      (3)                                               |   | $                                           | 0       |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 0       |   |                | $       | 0       |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| SERP      (4)                                                  |   | $                                           | 100,019 |   |                                           | $       | 100,019 |                            |   | $       | 100,019                        |   |   | $              | 100,019 |   |                | $       | 100,019 |       |   | $       | 100,019                |   |   | $ | 100,019 |   |   | $ | 100,019 |   |
| Subtotal      Enhanced Pension Benefits                        |   | $                                           | 0       |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 0       |   |                | $       | 0       |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Other      Benefits & Perquisites (5)                      |   |                                        |    |   |                                           |    |    |                            |   |    |                           |   |   |           |    |   |                |    |    |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| Health      and Welfare Benefit Continuation                   |   | $                                           | 40,542  |   |                                           | $       | 40,542  |                            |   | $       | 40,542                         |   |   | $              | 40,542  |   |                | $       | 40,542  |       |   | $       | 40,542                 |   |   | $ | 40,542 |   |   | $ | 40,542 |   |
| Executive      Benefits & Perquisites Continuation         |   | $                                           | 0       |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 0       |   |                | $       | 0       |       |   | $       | 0                      |   |   | $ | 0 |   |   |   |   |   |
| Subtotal      Benefits & Perquisites                       |   | $                                           | 40,542  |   |                                           | $       | 40,542  |                            |   | $       | 40,542                         |   |   | $              | 40,542  |   |                | $       | 40,542  |       |   | $       | 40,542                 |   |   | $ | 40,542 |   |   | $ | 40,542 |   |
| 280G      Tax Gross-up                                         |   | $                                           | 0       |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 0       |   |                | $       | 0       |       |   | $       | 0                      |   |   | $ | 0 |   |   |   |   |   |
| Total      Severance, Pension Enhancements, Benefits           |   | $                                           | 140,561 |   |                                           | $       | 140,561 |                            |   | $       | 140,561                        |   |   | $              | 140,561 |   |                | $       | 140,561 |       |   | $       | 140,561                |   |   | $ | 140,561 |   |   | $ | 140,561 |   |
|                                                           |   |                                        |    |   |                                           |    |    |                            |   |    |                           |   |   |           |    |   |                |    |    |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| Long-Term      Incentives Values                               |   |                                        |    |   |                                           |    |    |                            |   |    |                           |   |   |           |    |   |                |    |    |       |   |    |                   |   |   |   |   |   |   |   |   |   |
| In-the-Money      Value of Stock Options (6)                   |   | $                                           | 0       |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 0       |   |                | $       | 0       |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Value      of Restricted Stock                                 |   | $                                           | 0       |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 0       |   |                | $       | 0       |       |   | $       | 0                      |   |   | $ | 0 |   |   |   |   |   |
| Total      Value of Equity Grants                              |   | $                                           | 0       |   |                                           | $       | 0       |                            |   | $       | 0                              |   |   | $              | 0       |   |                | $       | 0       |       |   | $       | 0                      |   |   | $ | 0 |   |   | $ | 0 |   |
| Full      "Walk-Away" Value                                    |   | $                                           | 140,561 |   |                                           | $       | 140,561 |                            |   | $       | 140,561                        |   |   | $              | 140,561 |   |                | $       | 140,561 |       |   | $       | 140,561                |   |   | $ | 140,561 |   |   | $ | 140,561 |   |

| (1)   | Does      not include the proceeds from any employer-paid life insurance      policies |
|-----------------|----------------------------------------------------------------------------------------|

| (2)   | Not      applicable to Ms. Coughey. |
|-----------------|-------------------------------------|

| (3)   | .Not      applicable to Ms. Coughey. |
|-----------------|--------------------------------------|

| (4)   | Ms.      Coughey was a participant of the Willow Financial SERP plan. The liability      of this plan was assumed by the Corporation following its acquisition of      Willow Financial in December 2008, and benefits became payable to Ms.      Coughey in 2009.  Pursuant to her election, payments will be      made in 5 annual installments of $62,255.  Ms. Coughey was also      a participant in a Willow Financial Deferred Compensation Plan and a      separation from service would trigger a one-time payment of      $37,764. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | Pursuant      to her Termination of Employment Agreement with the Bank, Ms. Coughey is      eligible to receive the value of employee benefits through November 30,      2011. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6)   | Not      applicable to Ms. Coughey. |
|-----------------|-------------------------------------|

----

----

----

| Item      12. | Security      Ownership of Certain Beneficial Owners and Management and Related      Stockholder Matters |
|---------------|----------------------------------------------------------------------------------------------------------|

|  Group      Name                                                                                                                     | Common      StockBeneficially      Owned(1) | Percent      ofClass |
|-------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------|----------------------|
| BlackRock      Inc.     40      East 52nd      Street     New      York, NY 10022  |  2,449,536      (2)                    |  5.68      %    |
| Dimensional      Fund Advisors LP1299 Ocean Avenue, 11th      FloorSanta Monica, CA      90401                                            | 2,158,724      (3)                          | 5.00      %          |

|    Name                                            |  Common      StockBeneficiallyOwned      (4) | Right      to Acquire within60      days of December      31, 2009 (5) |    Total |   Percent      ofClass |
|-------------------------------------------------------------------|---------------------------------------------------|----------------------------------------------------------------------------------|-------------------------|----------------------------------|
|                                                              |                                              |                                                                             |                    |                             |
|  Directors                                                   |                                              |                                                                             |                    |                             |
|                                                              |                                              |                                                                             |                    |                             |
| LeeAnn      B. Bergey (6)                                         | 17,670                                            | 37,547                                                                           | 55,217                  | *                                |
| John      J. Cunningham, III (7)                                  | 10,158                                            | 12,469                                                                           | 22,627                  | *                                |
| Walter      E. Daller, Jr. (8)                                    | 537,608                                           | 287,753                                                                          | 825,361                 | 1.85      %                      |
| Paul      D. Geraghty (9)                                         | 13,418                                            | 16,667                                                                           | 30,085                  | *                                |
| Harold      A. Herr (10)                                          | 39,648                                            | 40,047                                                                           | 79,695                  | *                                |
| Thomas      C. Leamer (11)                                        | 2,483                                             | 13,651                                                                           | 16,134                  | *                                |
| James      E. McErlane (12)                                       | 341,821                                           | 12,469                                                                           | 354,290                 | *                                |
| Stephanie      S. Mitchell (13)                                   | 101,833                                           | 13,651                                                                           | 115,484                 | *                                |
| A.      Ross Myers (14)                                           | 5,743                                             | -0-                                                                              | 5,743                   | *                                |
| Brent      L. Peters (15)                                         | 105,227                                           | 7,018                                                                            | 112,245                 | *                                |
| Demetra      M. Takes (16)                                        | 61,510                                            | 31,172                                                                           | 92,682                  | *                                |
| James      A. Wimmer (17)                                         | 816,412                                           | 27,481                                                                           | 843,893                 | 1.89      %                      |
| Other      Named Executive Officers                               |                                              |                                                                             |                    |                             |
| Donna      M. Coughey (18)                                        | 71,053                                            | 15,377                                                                           | 86,430                  | *                                |
| George      S. Rapp (19)                                          | 1,125                                             | 9,144                                                                            | 10,269                  | *                                |
| All      Directors and Executive Officers as a Group (23 persons) | 2,153,731                                         | 604,776                                                                          | 2,758,507               | 6.19      % (20)                 |

----

| (1)   | Based      upon filings made pursuant to the Securities Exchange Act of 1934 and      information furnished by the respective  entities. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Information      obtained from a Schedule 13G, filed January 29, 2010, with the SEC with      respect to shares of common stock beneficially owned by BlackRock      Inc. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Information      obtained from a Schedule 13G/A, filed February 10, 2010, with the SEC with      respect to shares of common stock beneficially owned by Dimensional Fund      Advisors LP.  The Schedule13G/A |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Includes      shares for which the named person: |
|-----------------|--------------------------------------------------|

| ·   | has      sole voting and investment power, |
|--------------------|--------------------------------------------|

| ·   | has      shared voting and investment power with a  spouse. |
|--------------------|-------------------------------------------------------------|

| ·   | This      information has been provided by the directors and officers or is based      upon Section 16 filings made with the SEC by the directors and      officers. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | Shares      that may be acquired upon the exercise of vested stock options through      December 31, 2009. |
|-----------------|------------------------------------------------------------------------------------------------------------|

| (6)   | Class      B Director whose term expires in 2012.  16,658 shares held      solely by Ms. Bergey and 1,012 shares held jointly with her      spouse. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7)   | Class      A Director whose term expires in 2011.   Shares held solely      by Mr. Cunningham. |
|-----------------|---------------------------------------------------------------------------------------------------------------|

| (8)   | Class      D Director whose term expires in 2010.  Ownership includes the      following: |
|-----------------|-----------------------------------------------------------------------------------------------------|

| ·   | 41,329      shares held solely by Mr. Daller’s spouse,and |
|--------------------|-----------------------------------------------------------------|

| ·   | 73,583      vested stock options held by an Irrevocable Trust for the benefit of Mr.      Daller's 3 children. |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| (9)   | Class      C Director whose term expires in 2009 and nominee for Class C Director      whose term will expire in 2013.  Shares held solely by Mr.      Geraghty. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (10)   | Class      A Director whose term expires in 2011.  Shares held solely by      Mr. Herr. |
|------------------|---------------------------------------------------------------------------------------------------|

| (11)   | Class      D Director whose term expires in 2010.  Shares held solely by      Dr. Leamer. |
|------------------|-----------------------------------------------------------------------------------------------------|

| (12)   | Class      B Director whose term expires in 2012.  Ownership includes the      following: |
|------------------|-----------------------------------------------------------------------------------------------------|

| ·   |  141,696      shares held jointly with his spouse,and |
|--------------------|------------------------------------------------------------|

| ·   |  157,113      held in the McErlane Family Trust. |
|--------------------|-------------------------------------------------------|

| (13)   | Class      A Director whose term expires in 2011.  Ownership includes the      following: |
|------------------|-----------------------------------------------------------------------------------------------------|

| ·   | 17,100      shares held by Ms. Mitchell’sspouse, |
|--------------------|--------------------------------------------------------|

| ·   | 43,410      shares held by her company, and |
|--------------------|---------------------------------------------|

| ·   |   3,180      shares held by a trust for which Ms. Mitchell acts as      Co-Trustee. |
|--------------------|-----------------------------------------------------------------------------------------------|

| (14)   | Class      D Director whose term expires in 2010.  Shares held solely by      Mr. Myers. |
|------------------|----------------------------------------------------------------------------------------------------|

| (15)   | Class      A Director whose term expires in 2011.  Ownership includes the      following: |
|------------------|-----------------------------------------------------------------------------------------------------|

| ·   | 27,374      shares held jointly by Mr. Peters and his spouse;  and |
|--------------------|--------------------------------------------------------------------|

| ·   | 42,811      shares held solely by Mr. Peters’spouse. |
|--------------------|------------------------------------------------------------|

| (16)   | Class      B Director whose term expires in2012. |
|------------------|--------------------------------------------------|

| ·   | Ownership      includes 5,542 shares held solely by parent living in Ms. Takes’      home. |
|--------------------|--------------------------------------------------------------------------------------------------|

| (17)   | Class      C Director whose term expires in 2013.  Ownership includes the      following: |
|------------------|-----------------------------------------------------------------------------------------------------|

| ·   | 619,696      shares held solely by Mr. Wimmer’s spouse,and |
|--------------------|------------------------------------------------------------------|

| ·   |   15,887      shares held by a trust for which Mr. Wimmer acts as      Co-Trustee. |
|--------------------|----------------------------------------------------------------------------------------------|

| (18)   | Executive      Vice President.  Ownership includes the    following: |
|------------------|--------------------------------------------------------------------------------|

| ·   | 41,520      shares held jointly with herspouse; |
|--------------------|-------------------------------------------------|

| ·   |   8,824      shares held solely by Ms. Coughey’sspouse. |
|--------------------|-------------------------------------------------------------------------|

| (19)   | Executive      Vice President and Chief Financial Officer.  Shares held solely      by Mr. Rapp. |
|------------------|------------------------------------------------------------------------------------------------------------|

----

| Item      13. | Certain      Relationships and Related Transactions, and Director      Independence |
|---------------|-------------------------------------------------------------------------------------|

| Name                | Independent | Other      Transactions/Relationships/Arrangements |
|---------------------|-------------|----------------------------------------------------|
| Ms.      Bergey     | Yes         | Contributions      to non-profit organizations     |
| Mr.      Cunningham | Yes         | Legal      services                                |
| Mr.      Daller     | Yes         | Consulting      services                           |
| Mr.      Herr       | Yes         |                                               |
| Dr.      Leamer     | Yes         |                                               |
| Mr.      McErlane   | Yes         | Legal      services                                |
| Ms.      Mitchell   | Yes         |                                               |
| Mr.      Myers      | Yes         |                                               |
| Mr.      Wimmer     | Yes         |                                               |

----

| Item      14. | Principal      Accountant Fees and Services |
|---------------|---------------------------------------------|

| Types      of Fees           |   | 2009   |      |   | 2008   |   |
|------------------------------|--------|--------|-----------|--------|--------|--------|
| Audit      Fees: (1)         |   | $      | 916,066   |   |   | $      | 766,412 |   |
| Audit      Related Fees: (2) |   | $      | 44,653    |   |   | $      | 55,624 |   |
| Tax      Fees: (3)           |   | $      | 172,300   |   |   | $      | 173,805 |   |
| All      Other Fees: (4)     |   |   | -0-       |   |   |   | -0- |   |
| TOTAL                        |   | $      | 1,133,019 |   |   | $      | 995,841 |   |

| (1)   | Audit      fees consisted of audit work performed in the preparation of financial      statements, Sarbanes-Oxley Sec. 404 certification work, as well as work      generally only the independent registered public accounting firm can      reasonably be expected to provide, such as statutory audit and      registration statements. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Audit      related fees consisted principally of audits of employee benefit      plans. |
|-----------------|-----------------------------------------------------------------------------------------|

| (3)   | Tax      fees consisted principally of assistance with matters related to tax      compliance and reporting. |
|-----------------|--------------------------------------------------------------------------------------------------------------|

| (4)   | No      other fees in 2009. |
|-----------------|-----------------------------|

----

| Item      15. | Exhibits      and Financial Statement Schedules |
|---------------|-------------------------------------------------|

| (a) | The      following documents are filed as part of this report (see Part II,      Item 8, “Financial Statements and Supplementary    Data”): |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (1) | Financial      Statements: |
|--------|-----|----------------------------|

|   | (a) | Consolidated      Balance Sheets at December 31, 2009 and2008 |
|--------|-----|---------------------------------------------------------------|

|   | (b) | Consolidated      Statements of Income for the years ended December 31, 2009, 2008 and      2007 |
|--------|-----|--------------------------------------------------------------------------------------------------|

|   | (c) | Consolidated      Statements of Shareholders’ Equity for the years ended December  1,      2009, 2008 and 2007 |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Consolidated      Statements of Cash Flows for the years ended December 31, 2009, 2008 and      2007 |
|--------|-----|------------------------------------------------------------------------------------------------------|

|   | (e) | Notes      to Consolidated FinancialStatements |
|--------|-----|------------------------------------------------|

|   | (f) | Report      of Independent Registered Public Accountingfirm |
|--------|-----|-------------------------------------------------------------|

|   | (2) | Financial      Statement Schedules are notapplicable |
|--------|-----|------------------------------------------------------|

|   | (3) | The      exhibits listed on the Exhibit Index at the end of this Report are filed      with or incorporated as part of this Report (as indicated in connection      with each Exhibit). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Harleysville      National Corporation |
|--------|----------------------------------------|
|   | By:                                    | /s/      PAUL D. GERAGHTY |
|   |                                   | Paul      D. Geraghty |
|   |                                   | President      and Chief Executive Officer |

|                             | Signature |                                                 |   |                | Title |   |   |   | Date |   |
|----------------------------------|-----------|------------------------------------------------------|--------|---------------------|-------|--------|--------|--------|------|--------|
| /s/      LeeAnn B. Bergey        |      | Director                                             |   | March      12, 2010 |
| LeeAnn      B. Bergey            |      |                                                 |   |                |
| /s/      John J. Cunningham, III |      | Director                                             |   | March      12, 2010 |
| John      J. Cunningham, III     |      |                                                 |   |                |
| /s/      Walter E. Daller, Jr.   |      | Chairman      and Director                           |   | March      12, 2010 |
| Walter      E. Daller, Jr.  |      |                                                 |   |                |
| /s/      Paul D. Geraghty        |      | President,      Chief Executive Officer and Director |   | March      12, 2010 |
| Paul      D. Geraghty            |      | (Principal      Executive Officer)                   |   |                |
| /s/      Harold a. Herr          |      | Director                                             |   | March      12, 2010 |
| Harold      A. Herr              |      |                                                 |   |                |
| /s/      Thomas C. Leamer        |      | Director                                             |   | March      12, 2010 |
| Thomas      C. Leamer            |      |                                                 |   |                |
| /s/      James E. McErlane       |      | Director                                             |   | March      12, 2010 |
| James      E. McErlane           |      |                                                 |   |                |
| /s/      Stephanie S. Mitchell   |      | Director                                             |   | March      12, 2010 |
| Stephanie      S. Mitchell       |      |                                                 |   |                |
| /s/      A. Ross Myers           |      | Director                                             |   | March      12, 2010 |
| A.      Ross Myers               |      |                                                 |   |                |

----

|                      | Signature |                                              |   |                | Title |   |   |   | Date |   |
|---------------------------|-----------|---------------------------------------------------|--------|---------------------|-------|--------|--------|--------|------|--------|
|                      |      |                                              |   |                |
| /s/      Brent L. Peters  |      | Director                                          |   | March      12, 2010 |
| Brent      L. Peters      |      |                                              |   |                |
| /s/George S.      Rapp    |      | Chief      Financial Officer                      |   | March      12, 2010 |
| George      S. Rapp       |      | (Principal      Financial and Accounting Officer) |   |                |
| /s/      Demetra M. Takes |      | Director                                          |   | March      12, 2010 |
| Demetra      M. Takes     |      |                                              |   |                |
| /s/      James A. Wimmer  |      | Director                                          |   | March      12, 2010 |
| James      A. Wimmer      |      |                                              |   |                |

----

| ExhibitNo. |   | Description      of Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2.1)      |   | Purchase      Agreement, dated as of November 15, 2005, by and among Harleysville      National Bank and Trust Company, Cornerstone Financial Consultants, Ltd.,      Cornerstone Advisors Asset Management, Inc., Cornerstone Institutional      Investors, Inc., Cornerstone Management Resources, Inc., John R. Yaissle,      Malcolm L. Cowen, II, and Thomas J. Scalici. (Incorporated by reference to      Exhibit 2.1 of the Registrant’s Annual Report on Form 10-K for the year      ended December 31, 2005, filed with the Commission on March 15, 2006. The      schedules and exhibits to the Purchase Agreement are listed at the end of      the Purchase Agreement but have been omitted from the exhibit to Form      10-K. The Registrant agrees to supplementally furnish a copy of any      omitted schedule or exhibit to the Securities and Exchange Commission upon      request.) |
| (2.2)      |   | Merger      Agreement, dated as of May 15, 2007, by and among Harleysville National      Corporation, East Penn Financial Corporation, East Penn Bank and HNC-EPF,      LLC, as amended. (Incorporated by reference to Annex A of the      Corporation’s Registration Statement No. 333-145820 on Form S-4/A, filed      with the Commission on September 27, 2007. The schedules and exhibits to      the Merger Agreement are listed at the end of the Merger Agreement but      have been omitted from the Annex to Form S-4. The Registrant agrees to      supplementally furnish a copy of any omitted schedule or exhibit to the      Securities and Exchange Commission upon request.)                                                                                                                                                                                                             |
| (2.3)      |   | Agreement      for Purchase and Sale of Partnership Interests, dated as of December 27,      2007, by and among each of the applicable entities (“Buyer”) and 2007 PA      HOLDINGS, LLC (“HNB”) and PA BRANCH HOLDINGS, LLC, (“Bank Branch”) (HNB      and Bank Branch are referred to collectively as “Seller”). (Incorporated      by reference to Registrant’s Annual Report on Form 10-K for the year ended      December 31, 2007, filed with the Commission on March 14, 2008. The      schedules and exhibits to the Agreement for Purchase and Sale of      Partnership Interests are listed at the end of the agreement but have been      omitted from the Exhibit to Form 10-K. The Registrant agrees to      supplementally furnish a copy of any omitted schedule or exhibit to the      Securities and Exchange Commission upon request.)  |
| (2.4)      |   | Merger      Agreement, dated as of May 20, 2008, by and among Harleysville National      Corporation and Willow Financial Bancorp. (Incorporated by reference to      Annex A of the Registrant’s Registration Statement No. 333-152007 on Form      S-4, as amended, filed with the Commission on July 31, 2008. The schedules      and exhibits to the Merger Agreement are listed at the end of the Merger      Agreement but have been omitted from the Annex to Form S-4. The Registrant      agrees to supplementally furnish a copy of any omitted schedule or exhibit      to the Securities and Exchange Commission upon request.)                                                                                                                                                                                                                                                               |
| (2.5)      |   | Merger      Agreement, dated as of July 26, 2009, by and between First Niagara      Financial Group, Inc. and Harleysville National Corporation. (Incorporated      by reference to Exhibit 2.1 of the Registrant’s Current Report on Form      8-K, filed with the Commission on July 28, 2009.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (3.1)      |   | Harleysville      National Corporation Amended and Restated Articles of Incorporation.      (Incorporated by reference to Exhibit 3.1 to the Corporation’s Current      Report on Form 8-K, filed with the Commission on May 13,      2009.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (3.2)      |   | Harleysville      National Corporation Amended and Restated By-laws. (Incorporated by      reference to Exhibit 3(ii) to the Corporation’s Current Report on Form      8-K, filed with the Commission on June 18, 2009.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (10.1)     |   | Harleysville      National Corporation 1993 Stock Incentive Plan.** (Incorporated by      reference to Exhibit 4.3 of Registrant’s Registration Statement      No. 33-69784 on Form S-8, filed with the Commission on      October 1, 1993.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (10.2)     |   | Harleysville      National Corporation Stock Bonus Plan.*** (Incorporated by reference to      Exhibit 99A of Registrant’s Registration Statement No. 333-17813      on Form S-8, filed with the Commission on December 13,      1996.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

----

| ExhibitNo. |   | Description      of Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (10.3)     |   | Supplemental      Executive Retirement Plan.* (Incorporated by reference to Exhibit 10.3 of      Registrant’s Annual Report in Form 10-K for the year ended December 31,      1997, filed with the Commission on March 27, 1998.)                                                                                                                                                                                                                                                       |
| (10.4)     |   | Walter      E. Daller, Jr., Chairman and former President and Chief Executive      Officer’s Employment Agreement dated October 26, 1998.* (Incorporated by      reference to Registrant’s Current Report on Form 8-K, filed with the      Commission on March 25, 1999.)                                                                                                                                                                                                         |
| (10.5)     |   | Consulting      Agreement and General Release dated November 12, 2004 between      Walter E. Daller, Jr., Harleysville National Corporation and      Harleysville National Bank and Trust Company.* (Incorporated by reference      to Registrant’s Current Report on Form 8-K, filed with the Commission on      November 16, 2004.)                                                                                                                                              |
| (10.6)     |   | Amendment      to Supplemental Executive Retirement Benefit Agreement dated March 14,      2005 by and among Harleysville Management Services, LLC and Walter E.      Daller, Jr.*  (Incorporated by reference to Registrant’s Current      Report on Form 8-K, filed with the Commission on March 14,      2005.)                                                                                                                                                            |
| (10.7)     |   | Employment      Agreement dated October 26, 1998 by and among Harleysville National      Corporation, Harleysville National Bank and Trust Company and      Demetra M. Takes, President and Chief Executive Officer of      Harleysville National Bank and Trust Company.* (Incorporated by reference      to Registrant’s Current Report on Form 8-K, filed with the Commission      on March 25, 1999.)                                                           |
| (10.8)     |   | Amendment      to Supplemental Executive Retirement Benefit Agreement dated March 14,      2005 by and among Harleysville Management Services, LLC and Demetra M.      Takes, President and Chief Executive Officer of Harleysville National Bank      and Trust Company.*  (Incorporated by reference to Registrant’s      Current Report on Form 8-K, filed with the Commission on March 14,      2005.)                                                                    |
| (10.9)     |   | Harleysville      National Corporation 1998 Stock Incentive Plan.** (Incorporated by      reference to Registrant’s Registration Statement No. 333-79971 on      Form S-8, filed with the Commission on June 4,      1999.)                                                                                                                                                                                                                                              |
| (10.10)    |   | Harleysville      National Corporation 1998 Independent Directors Stock Option Plan, as      amended and restated effective February 8, 2001.** (Incorporated by      reference to Appendix “A” of Registrant’s Definitive Proxy Statement,      filed with the Commission on March 9, 2001.)                                                                                                                                                                               |
| (10.11)    |   | Supplemental      Executive Retirement Benefit Agreement dated February 23, 2004 between      Michael B. High, former Executive Vice President and Chief Operating      Officer of the Corporation, and Harleysville Management      Services, LLC.* (Incorporated by reference to Registrant’s Quarterly      Report on Form 10-Q, filed with the Commission on May 10,      2004.)                                                                                     |
| (10.12)    |   | Employment      Agreement effective April 1, 2005 between Michael B. High, former      Executive Vice President and Chief Operating Officer of the Corporation,      and Harleysville Management Services, LLC.* (Incorporated by reference to      Registrant’s Current Report on Form 8-K, filed with the Commission on      November 16, 2004.)                                                                                                                                      |
| (10.13)    |   | Amendment      to Supplemental Executive Retirement Benefit Agreement dated March 14,      2005 by and among Harleysville Management Services, LLC and Michael B.      High, former Executive Vice President and Chief Operating Officer of the      Corporation.*  (Incorporated by reference to Registrant’s      Current Report on Form 8-K, filed with the Commission on March 14,      2005.)                                                                            |
| (10.14)    |   | Complete      Settlement Agreement and General Release effective October 17, 2008 by and      between Michael B. High, former Executive Vice President and Chief      Operating Officer of the Corporation, and Harleysville National      Corporation, Harleysville National Bank and Trust Company and Harleysville      Management Services, LLC .* (Incorporated by reference to Registrant’s      Current Report on Form 8-K, filed with the Commission on October 23,      2008.) |

----

| ExhibitNo. |   | Description      of Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (10.15)    |   | Harleysville      National Corporation 2004 Omnibus Stock Incentive Plan, as amended and      restated effective November 9, 2006.** (Incorporated by reference to      Registrant’s Current Report on Form 8-K, filed with the Commission on      November 15, 2006).                                                                                                                                                                                                                                |
| (10.16)    |   | Employment      Agreement dated August 23, 2004 between James F. McGowan, Jr.,      Executive Vice President & Chief Credit Officer and Harleysville      Management Services, LLC.* (Incorporated by reference to Registrant’s      Current Report on Form 8-K, filed with the Commission on August 25,      2004.)                                                                                                                                                                    |
| (10.17)    |   | Supplemental      Executive Retirement Benefit Agreement dated August 23, 2004 between James      F. McGowan, Jr., Executive Vice President & Chief Credit Officer, and      Harleysville Management Services, LLC.* (Incorporated by reference to      Registrant’s Current Report on Form 8-K, filed with the Commission on      August 25, 2004.)                                                                                                                                         |
| (10.18)    |   | Amendment      to Supplemental Executive Retirement Benefit Agreement dated March 14,      2005 by and among Harleysville Management Services, LLC and James F.      McGowan, Jr., Executive Vice President & Chief Credit      Officer.*  (Incorporated by reference to Registrant’s Current      Report on Form 8-K, filed with the Commission on March 14,      2005.)                                                                                                               |
| (10.19)    |   | Employment      Agreement dated September 27, 2004 between John Eisele, former Executive      Vice President & President of Millennium Wealth Management and Private      Banking, and Harleysville Management Services, LLC.* (Incorporated by      reference to Registrant’s Current Report on Form 8-K, filed with the      Commission on September 29, 2004.)                                                                                                                                 |
| (10.20)    |   | Supplemental      Executive Retirement Benefit Agreement dated September 27, 2004 between      John Eisele, former Executive Vice President & President of Millennium      Wealth Management and Private Banking, and Harleysville Management      Services, LLC.* (Incorporated by reference to Registrant’s Current      Report on Form 8-K, filed with the Commission on September 29,      2004.)                                                                              |
| (10.21)    |   | Amendment      to Supplemental Executive Retirement Benefit Agreement dated March 14,      2005 by and among Harleysville Management Services, LLC and John Eisele,      former Executive Vice President & President of Millennium Wealth      Management and Private Banking.*  (Incorporated by reference to      Registrant’s Current Report on Form 8-K, filed with the Commission on      March 14, 2005.)                                                                         |
| (10.22)    |   | Separation      Agreement and Mutual Release dated June 15, 2007 and effective July 19,      2007 between John Eisele, former Executive Vice President & President      of Millennium Wealth Management and Private Banking, Harleysville      Management Services, LLC., Harleysville National Bank and Trust Company      and Harleysville National Corporation.* (Incorporated by reference to      Registrant’s Current Report on Form 8-K, filed with the Commission on July      19, 2007.) |
| (10.23)    |   | Employment      Agreement effective January 1, 2005 between Gregg J. Wagner, the former      President and Chief Executive Officer of the Corporation, and Harleysville      Management Services, LLC.* (Incorporated by reference to Registrant’s      Current Report on Form 8-K, filed with the Commission on November 16,      2004.)                                                                                                                                                             |
| (10.24)    |   | Amendment      to Supplemental Executive Retirement Benefit Agreement dated March 14,      2005 by and among Harleysville Management Services, LLC and Gregg J.      Wagner, the former President and Chief Executive Officer of the      Corporation.*  (Incorporated by reference to Registrant’s      Current Report on Form 8-K, filed with the Commission on March 14,      2005.)                                                                                                     |
| (10.25)    |   | Complete      Settlement Agreement and General Release dated November 29, 2006 and      effective December 8, 2006 between Gregg J. Wagner and Harleysville      National Corporation, Harleysville National Bank and Trust Company and      Harleysville Management Services, LLC .* (Incorporated by reference to      Registrant’s Current Report on Form 8-K, filed with the Commission on      December 13, 2006.)                                                                               |
| (10.26)    |   | Employment      Agreement dated May 18, 2005, between George S. Rapp, Senior Vice      President and Chief Financial Officer, and Harleysville Management      Services, LLC.* (Incorporated by reference to Registrant’s Current Report      on Form 8-K, filed with the Commission on May 20,  2005.)                                                                                                                                                                                               |

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| ExhibitNo. |   | Description      of Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                      |
|------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (10.27)    |   | Amended      and Restated Declaration of Trust for HNC Statutory Trust III by and among      Wilmington Trust Company, as Institutional Trustee and Delaware Trustee,      Harleysville National Corporation, as Sponsor, and the Administrators      named therein, dated as of September 28, 2005. (Incorporated by reference      to Registrant’s Quarterly Report on Form 10-Q/A, filed with the Commission      on November, 9, 2005.) |
| (10.28)    |   | Indenture      between Harleysville National Corporation, as Issuer, and Wilmington Trust      Company, as Trustee, for Fixed/Floating Rate Junior Subordinated Debt      Securities, dated as of September 28, 2005. (Incorporated by reference to      Registrant’s Quarterly Report on Form 10-Q/A, filed with the Commission on      November, 9, 2005.)                                                                                |
| (10.29)    |   | Guarantee      Agreement between Harleysville National Corporation and Wilmington Trust      Company, dated as of September 28, 2005. (Incorporated by reference to      Registrant’s Quarterly Report on Form 10-Q/A, filed with the Commission on      November, 9, 2005.)                                                                                                                                                                |
| (10.30)    |   | Pledge      Security Agreement by and between First Niagara Financial Group, Inc. and      HarleysvilleNational      Corporation, dated December 4, 2009 (incorporation by reference to Exhibit      10.1 ofRegistrant’s      current report on Form 8-K filed with the Commission on December 7,      2009.)                                                                                                                               |
| (10.31)    |   | Promissory      Note issued by Harleysville National Corporation in favor of First Niagara      Financial Group, Inc., dated December 4, 2009. (incorporation by reference      to Exhibit      10.2 of Registrant’s current report on Form 8-K filed with the      Commission on December 7, 2009.)                                                                                                                                        |
| (10.32)    |   | Letter      Agreement by and between First Niagara Financial Group, Inc. and      Harleysville NationalCorporation,      dated December 4, 2009 (incorporation by reference to Exhibit 10.3      of Registrant’scurrent      report on Form 8-K filed with the Commission on December 7,      2009.)                                                                                                                                   |
| (10.33)    |   | Promissory      Note issued by Harleysville National Corporation in favor of First Niagara      FinancialGroup,      Inc., dated December 23, 2009 (incorporation by reference to Exhibit 10.1      of Registrant’scurrent      report on Form 8-K filed with the Commission on December 29,      2009.)                                                                                                                               |
| (10.34)    |   | Employment      Agreement effective July 12, 2006 between Lewis C. Cyr, Chief Lending      Officer of the Corporation, and Harleysville Management Services, LLC.*      (Incorporated by reference to Registrant’s Current Report on      Form 8-K, filed with the Commission on July 12,  2006.)                                                                                                                                      |
| (10.35)    |   | Employment      Agreement dated July 12, 2007 between Paul D. Geraghty, President and      Chief Executive Officer of the Corporation and Harleysville Management      Services, LLC* (Incorporated by reference to Registrant’s Current Report      on Form 8-K filed with the Commission on July 12,2007.)                                                                                                                                |
| (10.36)    |   | Amended      and Restated Declaration of Trust for HNC Statutory Trust IV by and among      Wilmington Trust Company, as Institutional Trustee and Delaware Trustee,      Harleysville National Corporation, as Depositor, and the Administrators      named therein, dated as of August 22, 2007. (Incorporated by reference to      Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on      November 8, 2007.)      |
| (10.37)    |   | Indenture      between Harleysville National Corporation, as Issuer, and Wilmington Trust      Company, as Trustee, for Fixed/Floating Rate Junior Subordinated Debt      Securities, dated as of August 22, 2007. (Incorporated by reference to      Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on      November 8, 2007.)                                                                                      |
| (10.38)    |   | Guarantee      Agreement between Harleysville National Corporation and Wilmington Trust      Company, dated as of August 22, 2007. (Incorporated by reference to      Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on      November 8, 2007.)                                                                                                                                                                      |
| (10.39)    |   | Employment      Agreement dated November 16, 2007 between Brent L. Peters, Executive Vice      President and President of the East Penn Bank Division of Harleysville      National Bank and Trust Company, and Harleysville Management Services,      LLC. * (Incorporated by reference to Registrant’s Annual Report on Form      10-K for the year ended December 31, 2007, filed with the Commission on      March 14, 2008.)           |
| (10.40)    |   | Employment      Agreement dated April 17, 2008 between Joseph D. Blair, Executive Vice      President and President of the Millennium Wealth Management Division of      Harleysville National Bank and Trust Company, and Harleysville Management      Services, LLC.*  (Incorporated by reference to Registrant’s      Quarterly Report on Form 10-Q filed with the Commission on August 8,      2008.)                    |

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| ExhibitNo. |   | Description      of Exhibits                                                                                                                                                                                                                                                                                                                                                                                                          |
|------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (10.41)    |   | Employment      Agreement dated May 20, 2008 and effective December 5, 2008 between Donna      M. Coughey, Executive Vice President of the Corporation and the Bank, and      Harleysville Management Services, LLC.* (Incorporated by reference to      Registrant’s Current Report on Form 8-K filed with the Commission on      December 5, 2008.)                                                                           |
| (10.42)    |   | Willow      Financial Bancorp, Inc. Amended and Restated 2002 Stock Option Plan.      (Incorporated by reference to Exhibit 10.1 of Registrant’s Registration      Statement No. 333-156956 on Form S-8, filed with the Commission on January      27, 2009.)                                                                                                                                                                   |
| (10.43)    |   | Willow      Financial Bancorp, Inc. Amended and Restated 1999 Stock Option Plan.      (Incorporated by reference to Exhibit 10.2 of Registrant’s Registration      Statement No. 333-156956 on Form S-8, filed with the Commission on January      27, 2009.)                                                                                                                                                                   |
| (10.44)    |   | Chester      Valley Bancorp, Inc. 1997 Stock Option Plan, as amended. (Incorporated by      reference to Exhibit 10.3 of Registrant’s Registration Statement No.      333-156956 on Form S-8, filed with the Commission on January 27,      2009.)                                                                                                                                                                              |
| (10.45)    |   | Harleysville      National Corporation Amended and Restated Dividend Reinvestment and Stock      Purchase Plan (DRIP) effective April 6, 2009. (Incorporated by reference      to Exhibit 99.1 of Registrant’s Registration Statement      No. 333-158420 on Form S-3, filed with the Commission on April      6, 2009.) On April 28, 2009, the Board of Directors suspended the DRIP      until further notice. |
| (10.46)    |   | Amendment      to Employment Agreement between Harleysville Management Services, LLC      dated December 4, 2009 and effective December 5, 2009.* (Incorporated by      reference to Exhibit 99.1 of Registrant’s Current Report on Form 8-K filed      with the Commission on December 9, 2009.)                                                                                                                               |
| (11)       |   | Computation      of Earnings per Common Share, incorporated by reference to Part II,      Item 8, Footnote 16, “(Loss) Earnings Per Share,” of this Report      on Form 10-K.                                                                                                                                                                                                                         |
| (21)       |   | Subsidiaries      of Registrant                                                                                                                                                                                                                                                                                                                                                                                                       |
| (23)       |   | Consent      of Grant Thornton LLP, Independent Registered Public Accounting      firm                                                                                                                                                                                                                                                                                                                                           |
| (31.1)     |   | Certification      of the Chief Executive Officer pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002, filed herewith.                                                                                                                                                                                                                                                                                           |
| (31.2)     |   | Certification      of the Chief Financial Officer pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002, filed herewith.                                                                                                                                                                                                                                                                                           |
| (32.1)     |   | Certification      of the Chief Executive Officer pursuant to 18 U.S.C.      Section 1350, as adopted pursuant to Section 906 of the      Sarbanes-Oxley Act of 2002, furnished herewith.                                                                                                                                                                                                                         |
| (32.2)     |   | Certification      of the Chief Financial Officer pursuant to 18 U.S.C.      Section 1350, as adopted pursuant to Section 906 of the      Sarbanes-Oxley Act of 2002, furnished  herewith.                                                                                                                                                                                                                        |

|   | * | Management      contract or compensatory planarrangement. |
|--------|---|-----------------------------------------------------------|

|   | ** | Shareholder      approved compensatory plan pursuant to which the Registrant’s Common Stock      may be issued to employees of theCorporation. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | *** | Non-shareholder      approved compensatory plan pursuant to which the Registrant’s Common Stock      may be issued to employees of theCorporation. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------|

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