----

----

| x      | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE             |
|--------|---------------------------------------------------------------------|
|   | SECURITIES EXCHANGE ACT OF 1934                                     |
|   |                                                                |
|   | For the quarterly period ended March 31, 2010                       |
|   | OR                                                                  |
| o      | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE            |
|   | SECURITIES EXCHANGE ACT OF 1934                                     |
|   |                                                                |
|   | For the transition period from ________________ to ________________ |

| 000-22537-01(Commission File Number)               |
|----------------------------------------------------|
|                                               |
| NATIONAL PENN BANCSHARES, INC.                     |
| (Exact Name of Registrant as Specified in Charter) |

| Pennsylvania                                                                                            | 23-2215075                      |
|---------------------------------------------------------------------------------------------------------|---------------------------------|
| (State or Other Jurisdiction of Incorporation)                                                          | IRS Employer Identification No. |
|                                                                                                    |                            |
| Philadelphia and Reading Avenues,Boyertown, PA  19512(Address of Principal Executive Offices) |

| (800) 822-3321                                                                |
|-------------------------------------------------------------------------------|
| Registrant’s telephone number, including area code                      |
|                                                                          |
| (Former Name or Former Address, if Changed Since Last Report):  N/A |

| Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes x  No  o                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes o    No o                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.Large accelerated filer  ̈                                                                                                                           Accelerated filer  x          Non-accelerated filer   o  (Do not check if a smaller reporting company)                  Smaller reporting company o  |
|  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes o No  x                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

| Class                             |   | Outstanding at May 5, 2010 |
|-----------------------------------|--------|----------------------------|
| Common Stock, no stated par value |   | 126,018,546 shares    |

----

| Part I - Financial Information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Page                |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 1.             | Financial Statements                                                                      | 3 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 2.             | Management’s Discussion and Analysis of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                | Financial Condition and Results of Operation | 22 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 3.             | Quantitative and Qualitative Disclosures About |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                | Market Risk                                                                      | 39 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 4.             | Controls and Procedures                                                                      | 39 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
| Part II - Other Information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 1.             | Legal Proceedings                                                                      | 40 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item  1A. | Risk Factors | 40 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 2.             | Unregistered Sales of Equity Securities |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                | and Use of  Proceeds                                                                      | 48 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 3.             | Defaults Upon Senior Securities                                                                      | 48 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 4.             | [Removed and Reserved by the SEC] | N/A |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 5.             | Other Information                                                                      | 48 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 6.             | Exhibits                                                                      | 48 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
| Signatures                                                                                                       | 50                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
| Exhibits                                                                                                         | 51                  |

----

Item 1. 

|                                                                                        |   | Unaudited |      |   |         |   |
|---------------------------------------------------------------------------------------------|--------|-----------|-----------|--------|--------------|--------|
| (dollars in thousands)                                                                      |   | March 31, |      |   | December 31, |   |
|                                                                                        |   | 2010      |      |   | 2009         |   |
| ASSETS                                                                                      |   |      |      |   |         |   |
| Cash and due from banks                                                                     |   | $         | 103,666   |   |         | $      | 106,722 |   |
| Interest-earning deposits with banks                                                        |   |      | 239,757   |   |         |   | 496,535 |   |
| Total cash and cash equivalents                                                             |   |      | 343,423   |   |         |   | 603,257 |   |
|                                                                                        |   |      |      |   |         |   |   |   |
| Investment securities available for sale, at fair value                                     |   |      | 1,569,062 |   |         |   | 1,499,667 |   |
| Investment securities held to maturity                                                      |   |      |      |   |         |   |   |   |
| (Fair value $592,880 and $603,915 for 2010 and 2009, respectively)                          |   |      | 591,315   |   |         |   | 601,923 |   |
| Other securities                                                                            |   |      | 83,676    |   |         |   | 78,951 |   |
| Loans and leases held for sale                                                              |   |      | 6,561     |   |         |   | 18,028 |   |
| Loans and leases, net of allowance for loan and lease losses of $153,850 and $146,271       |   |      |      |   |         |
| for 2010 and 2009, respectively                                                             |   |      | 5,754,808 |   |         |   | 5,860,201 |   |
| Premises and equipment, net                                                                 |   |      | 111,564   |   |         |   | 112,744 |   |
| Premises held for sale                                                                      |   |      | 812       |   |         |   | 812 |   |
| Accrued interest receivable                                                                 |   |      | 37,175    |   |         |   | 36,565 |   |
| Bank owned life insurance                                                                   |   |      | 198,392   |   |         |   | 198,131 |   |
| Other real estate owned and other repossessed assets                                        |   |      | 2,386     |   |         |   | 4,208 |   |
| Goodwill                                                                                    |   |      | 281,718   |   |         |   | 281,623 |   |
| Other intangible assets, net                                                                |   |      | 29,130    |   |         |   | 30,943 |   |
| Unconsolidated investments under the equity method                                          |   |      | 12,842    |   |         |   | 12,821 |   |
| Other assets                                                                                |   |      | 148,897   |   |         |   | 144,036 |   |
| TOTAL ASSETS                                                                                |   | $         | 9,171,761 |   |         | $      | 9,483,910 |   |
|                                                                                        |   |      |      |   |         |   |   |   |
| LIABILITIES                                                                                 |   |      |      |   |         |   |   |   |
| Non-interest bearing deposits                                                               |   | $         | 800,467   |   |         | $      | 753,650 |   |
| Interest bearing deposits                                                                   |   |      | 5,610,897 |   |         |   | 5,985,202 |   |
| Total deposits                                                                              |   |      | 6,411,364 |   |         |   | 6,738,852 |   |
|                                                                                        |   |      |      |   |         |   |   |   |
| Securities sold under repurchase agreements and federal funds purchased                     |   |      | 758,828   |   |         |   | 737,323 |   |
| Short-term borrowings                                                                       |   |      | 7,165     |   |         |   | 6,900 |   |
| Federal Home Loan Bank Advances                                                             |   |      | 743,781   |   |         |   | 756,803 |   |
| Subordinated debentures                                                                     |   |      | 139,668   |   |         |   | 132,407 |   |
| Accrued interest payable and other liabilities                                              |   |      | 40,167    |   |         |   | 42,157 |   |
| TOTAL LIABILITIES                                                                           |   |      | 8,100,973 |   |         |   | 8,414,442 |   |
|                                                                                        |   |      |      |   |         |   |   |   |
| SHAREHOLDERS' EQUITY                                                                        |   |      |      |   |         |   |   |   |
| Preferred stock, no stated par value; authorized 1,000,000 shares                           |   |      |      |   |         |   |   |   |
| Series B, $1,000 liquidation preference, 5% cumulative; 150,000 shares issued and      |   |
| outstanding as of March 31, 2010 and December 31, 2009                                      |   |      | 148,050   |   |         |   | 147,920 |   |
| Common stock, no stated par value; authorized 250,000,000 shares, issued and                |   |      |      |   |         |
| outstanding  March 31, 2010 - 126,004,409; 2009 - December 31, 2009 -125,713,668. |   |      | 1,226,481 |   |         |   | 1,225,635 |   |
| Accumulated deficit                                                                         |   |      | (301,459  | )      |         |   | (302,120 | ) |
| Accumulated other comprehensive loss                                                        |   |      | (2,284    | )      |         |   | (1,967 | ) |
| TOTAL SHAREHOLDERS' EQUITY                                                                  |   |      | 1,070,788 |   |         |   | 1,069,468 |   |
|                                                                                        |   |      |      |   |         |   |   |   |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                  |   | $         | 9,171,761 |   |         | $      | 9,483,910 |   |
|                                                                                        |   |      |      |   |         |   |   |   |
| The accompanying notes are an integral part of these financial statements.                  |   |      |      |   |         |   |   |   |
|                                                                                        |   |      |      |   |         |   |   |   |

----

|                                                                       |   |                         |   |   |   |   |
|----------------------------------------------------------------------------|--------|------------------------------|--------|--------|--------|--------|
| (dollars in thousands, except per share data)                              |   | Three Months Ended March 31, |   |
|                                                                       |   | 2010                         |   |   | 2009   |   |
| INTEREST INCOME                                                            |   |                         |   |   |   |   |
| Loans and leases, including fees                                           |   | $                            | 78,654 |   |   | $      | 84,968 |   |
| Investment securities                                                      |   |                         |   |   |   |   |   |   |
| Taxable                                                                    |   |                         | 11,098 |   |   |   | 11,614 |   |
| Tax-exempt                                                                 |   |                         | 8,838  |   |   |   | 9,347 |   |
| Federal funds sold and deposits in banks                                   |   |                         | 247    |   |   |   | 33 |   |
| Total interest income                                                      |   |                         | 98,837 |   |   |   | 105,962 |   |
| INTEREST EXPENSE                                                           |   |                         |   |   |   |   |   |   |
| Deposits                                                                   |   |                         | 18,281 |   |   |   | 31,664 |   |
| Securities sold under repurchase agreements and federal funds purchased    |   |                         | 2,874  |   |   |   | 3,615 |   |
| Short-term borrowings                                                      |   |                         | -      |   |   |   | - |   |
| Long-term borrowings                                                       |   |                         | 10,423 |   |   |   | 12,042 |   |
| Total interest expense                                                     |   |                         | 31,578 |   |   |   | 47,321 |   |
| Net interest income                                                        |   |                         | 67,259 |   |   |   | 58,641 |   |
| Provision for loan and lease losses                                        |   |                         | 32,500 |   |   |   | 17,525 |   |
| Net interest income after provision for loan and lease losses              |   |                         | 34,759 |   |   |   | 41,116 |   |
| NON-INTEREST INCOME                                                        |   |                         |   |   |   |   |   |   |
| Wealth management                                                          |   |                         | 7,101  |   |   |   | 6,615 |   |
| Service charges on deposit accounts                                        |   |                         | 5,341  |   |   |   | 5,800 |   |
| Insurance commissions and fees                                             |   |                         | 3,771  |   |   |   | 3,957 |   |
| Cash management and electronic banking fees                                |   |                         | 4,158  |   |   |   | 3,648 |   |
| Mortgage banking                                                           |   |                         | 1,153  |   |   |   | 2,420 |   |
| Bank owned life insurance                                                  |   |                         | 1,983  |   |   |   | 1,072 |   |
| Equity in undistributed net earnings of unconsolidated investments         |   |                         | 163    |   |   |   | 1,091 |   |
| Other operating income                                                     |   |                         | 2,733  |   |   |   | 2,567 |   |
| Gain on pension plan curtailment                                           |   |                         | 4,066  |   |   |   | - |   |
| Net (losses) from fair value changes                                       |   |                         | (7,261 | )      |   |   | (1,898 | ) |
| Net (losses) on sales of investment securities                             |   |                         | -      |   |   |   | (2,284 | ) |
|                                                                       |   |                         |   |   |   |   |   |   |
| IMPAIRMENT LOSSES ON INVESTMENT SECURITIES:                                |   |                         |   |   |   |   |   |   |
| Impairment losses on investment securities                                 |   |                         | (634   | )      |   |   | (26,595 | ) |
| Non credit-related losses on securities not expected to be sold            |   |                         |   |   |   |   |   |   |
| recognized in other comprehensive loss before tax                          |   |                         | -      |   |   |   | 18,810 |   |
| Net impairment losses on investment securities                             |   |                         | (634   | )      |   |   | (7,785 | ) |
| Total non-interest income                                                  |   |                         | 22,574 |   |   |   | 15,203 |   |
|                                                                       |   |                         |   |   |   |   |   |   |
| NON-INTEREST EXPENSE                                                       |   |                         |   |   |   |   |   |   |
| Salaries, wages and employee benefits                                      |   |                         | 29,429 |   |   |   | 32,017 |   |
| Net premises and equipment                                                 |   |                         | 7,998  |   |   |   | 8,598 |   |
| Advertising and marketing                                                  |   |                         | 1,609  |   |   |   | 1,855 |   |
| FDIC insurance                                                             |   |                         | 4,097  |   |   |   | 1,867 |   |
| Other operating expenses                                                   |   |                         | 14,524 |   |   |   | 12,356 |   |
| Total non-interest expense                                                 |   |                         | 57,657 |   |   |   | 56,693 |   |
| (Loss) before income taxes                                                 |   |                         | (324   | )      |   |   | (374 | ) |
| Income tax (benefit)                                                       |   |                         | (4,250 | )      |   |   | (4,173 | ) |
| NET  INCOME                                                      |   |                         | 3,926  |   |   |   | 3,799 |   |
| Preferred dividends and accretion of preferred discount                    |   |                         | (2,005 | )      |   |   | (2,054 | ) |
| NET  INCOME AVAILABLE TO COMMON SHAREHOLDERS                     |   | $                            | 1,921  |   |   | $      | 1,745 |   |
| PER SHARE OF COMMON STOCK                                                  |   |                         |   |   |   |   |   |   |
| Basic earnings available to common shareholders                            |   | $                            | 0.02   |   |   | $      | 0.02 |   |
| Diluted earnings available to common shareholders                          |   | $                            | 0.02   |   |   | $      | 0.02 |   |
| Dividends paid in cash                                                     |   | $                            | 0.01   |   |   | $      | 0.17 |   |
|                                                                       |   |                         |   |   |   |   |   |   |
| The accompanying notes are an integral part of these financial statements. |   |                         |   |   |   |

----

| (dollars in thousands, except share data)                                  |   |   |        |   |      |   |      |        |   |   |          |   |   | Accumulated   |     |   |   |   |
|----------------------------------------------------------------------------|--------|--------|-------------|--------|-----------|--------|-----------|-------------|--------|--------|---------------|--------|--------|---------------|----------|--------|--------|--------|
|                                                                       |   |   |        |   |      |   |      | Series B    |   |   |          |   |   | Other         |     |   |   |   |
|                                                                       |   | Common |        |   | Preferred |   |      | Accumulated |   |   | Comprehensive |   |   |          |     |
|                                                                       |   | Shares |        |   | Value     |   |      | Stock       |   |   | Deficit       |   |   | Income (Loss) |     |   | Total  |   |
|                                                                       |   |   |        |   |      |   |      |        |   |   |          |   |   |          |     |   |   |   |
| Balance at December 31, 2009                                               |   |   | 125,713,668 |   |      | $      | 1,225,635 |        |   | $      | 147,920       |   |   | $             | (302,120 | )      |   | $      | (1,967 | ) |   | $ | 1,069,468 |   |
| Comprehensive Income:                                                      |   |   |        |   |      |   |      |        |   |   |          |   |   |          |     |   |   |   |   |   |   |   |   |   |
| Net income                                                                 |   |   |        |   |      |   |      |        |   |   |          |   |   |          | 3,926    |   |   |   |   |   |   |   | 3,926 |   |
| Other comprehensive (loss), net of taxes                                   |   |   |        |   |      |   |      |        |   |   |          |   |   |          |     |   |   |   | (317 | ) |   |   | (317 | ) |
| Total comprehensive income                                                 |   |   |        |   |      |   |      |        |   |   |          |   |   |          |     |   |   |   |   |   |   |   | 3,609 |   |
|                                                                       |   |   |        |   |      |   |      |        |   |   |          |   |   |          |     |   |   |   |   |   |   |   |   |   |
| Cash dividends declared common                                             |   |   |        |   |      |   |      |        |   |   |          |   |   |          | (1,260   | )      |   |   |   |   |   |   | (1,260 | ) |
| Cash dividends declared preferred                                          |   |   |        |   |      |   |      |        |   |   |          |   |   |          | (1,875   | )      |   |   |   |   |   |   | (1,875 | ) |
| Shares issued under share-based plans,                                     |   |   |        |   |      |   |      |        |   |   |          |   |   |          |     |   |   |   |   |   |   |   |   |   |
| net of excess tax benefits                                                 |   |   | 24,047      |   |      |   | 81        |        |   |   |          |   |   |          |     |   |   |   |   |   |   |   | 81 |   |
| Share-based compensation                                                   |   |   | 204,207     |   |      |   | 403       |        |   |   |          |   |   |          |     |   |   |   |   |   |   |   | 403 |   |
| Shares issued from  ESPP and dividend                            |   |   |        |   |      |   |      |        |   |   |          |   |   |          |     |   |   |   |   |   |   |   |   |   |
| reinvestment plan                                                          |   |   | 62,487      |   |      |   | 362       |        |   |   |          |   |   |          |     |   |   |   |   |   |   |   | 362 |   |
| Amortization of preferred discount                                         |   |   |        |   |      |   |      |        |   |   | 130           |   |   |          | (130     | )      |   |   |   |   |   |   | - |   |
|                                                                       |   |   |        |   |      |   |      |        |   |   |          |   |   |          |     |   |   |   |   |   |   |   |   |   |
| Balance at March 31, 2010                                                  |   |   | 126,004,409 |   |      | $      | 1,226,481 |        |   | $      | 148,050       |   |   | $             | (301,459 | )      |   | $      | (2,284 | ) |   | $ | 1,070,788 |   |
|                                                                       |   |   |        |   |      |   |      |        |   |   |          |   |   |          |     |   |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of these financial statements. |   |
|                                                                       |   |   |        |   |      |   |      |        |   |   |          |   |   |          |     |   |   |   |   |   |   |   |   |   |

----

|                                                                              |   |                         |     |   |   |   |
|-----------------------------------------------------------------------------------|--------|------------------------------|----------|--------|--------|--------|
| (dollars in thousands)                                                            |   | Three Months Ended March 31, |     |
|                                                                              |   | 2010                         |     |   | 2009   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                              |   |                         |     |   |   |   |
| Net income                                                                        |   | $                            | 3,926    |   |   | $      | 3,799 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |                         |     |   |   |   |   |   |
| Provision for loan and lease losses                                               |   |                         | 32,500   |   |   |   | 17,525 |   |
| Gain on pension plan curtailment                                                  |   |                         | (4,066   | )      |   |   | - |   |
| Share-based compensation expense                                                  |   |                         | 403      |   |   |   | 438 |   |
| Deferred income tax (benefit) expense                                             |   |                         | (107     | )      |   |   | (93 | ) |
| Depreciation and amortization                                                     |   |                         | 4,041    |   |   |   | 4,597 |   |
| (Accretion) amortization of premiums and discounts on investment securities, net  |   |                         | (44      | )      |   |   | (584 | ) |
| Net losses (gains) on sale of investment securities                               |   |                         | -        |   |   |   | 2,284 |   |
| (Earnings) of equity-method investments net of distributions                      |   |                         | (21      | )      |   |   | (1,091 | ) |
| Loans originated for resale                                                       |   |                         | (43,161  | )      |   |   | (93,289 | ) |
| Proceeds from sale of loans                                                       |   |                         | 55,456   |   |   |   | 80,644 |   |
| (Gain) loss on sale of loans, net                                                 |   |                         | (828     | )      |   |   | (1,556 | ) |
| Loss on sale of other real estate owned, net                                      |   |                         | 401      |   |   |   | - |   |
| Increase in fair value of subordinated debentures                                 |   |                         | 7,261    |   |   |   | 1,898 |   |
| Other-than-temporary impairment on investments                                    |   |                         | 634      |   |   |   | 7,785 |   |
| Bank-owned life insurance policy income                                           |   |                         | (1,983   | )      |   |   | (1,072 | ) |
| Changes in assets and liabilities:                                                |   |                         |     |   |   |   |   |   |
| Decrease (increase)  in accrued interest receivable                     |   |                         | (610     | )      |   |   | 540 |   |
| (Decrease) increase in accrued interest payable                                   |   |                         | (3,488   | )      |   |   | 1,116 |   |
| (Increase) decrease in other assets                                               |   |                         | (4,633   | )      |   |   | 1,555 |   |
| (Decrease) increase in other liabilities                                          |   |                         | 2,901    |   |   |   | (16,878 | ) |
| Net cash provided by operating activities                                         |   |                         | 48,582   |   |   |   | 7,618 |   |
|                                                                              |   |                         |     |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                              |   |                         |     |   |   |   |   |   |
| Proceeds from maturities of investment securities held to maturity                |   |                         | 10,458   |   |   |   | 6,225 |   |
| Proceeds from sales of investment securities available for sale                   |   |                         | 460      |   |   |   | 16,761 |   |
| Proceeds from maturities of investment securities available for sale              |   |                         | 63,291   |   |   |   | 82,052 |   |
| Purchase of investment securities available for sale                              |   |                         | (136,180 | )      |   |   | (121,990 | ) |
| Proceeds from sale of loans previously held for investment                        |   |                         | 2,814    |   |   |   | - |   |
| Net decrease (increase) in loans and leases                                       |   |                         | 68,577   |   |   |   | (50,428 | ) |
| Purchases of premises and equipment                                               |   |                         | (1,429   | )      |   |   | (254 | ) |
| Claims from bank owned life insurance                                             |   |                         | 1,722    |   |   |   | - |   |
| Proceeds from the sale of other real estate owned                                 |   |                         | 2,923    |   |   |   | 40 |   |
| Proceeds from sale of buildings                                                   |   |                         | -        |   |   |   | 2,550 |   |
| Net cash provided by (used in) investing activities                               |   |                         | 12,636   |   |   |   | (65,044 | ) |
| CASH FLOWS FROM FINANCING ACTIVITIES                                              |   |                         |     |   |   |   |   |   |
| Net (decrease) increase on core deposits                                          |   |                         | (54,521  | )      |   |   | 42,592 |   |
| Net  (decrease) increase in certificates of deposit                     |   |                         | (272,967 | )      |   |   | 227,756 |   |
| Net increase in securities sold under repurchase agreements and fed funds sold    |   |                         | 21,505   |   |   |   | 5,037 |   |
| Net increase (decrease) in short-term borrowings                                  |   |                         | 265      |   |   |   | (2,539 | ) |
| Repayments of FHLB advances                                                       |   |                         | (12,642  | )      |   |   | (24,647 | ) |
| Proceeds from shares issued under share-based plans                               |   |                         | 101      |   |   |   | 124 |   |
| Excess tax benefits on share-based plans                                          |   |                         | (20      | )      |   |   | (18 | ) |
| Issuance of shares under dividend reinvestment and optional cash                  |   |                         | 362      |   |   |   | 16,115 |   |
| Cash dividends, common                                                            |   |                         | (1,260   | )      |   |   | (13,800 | ) |
| Cash dividends, preferred                                                         |   |                         | (1,875   | )      |   |   | - |   |
| Net cash (used in) provided by financing activities                               |   |                         | (321,052 | )      |   |   | 250,620 |   |
| Net (decrease) increase in cash and cash equivalents                              |   |                         | (259,834 | )      |   |   | 193,194 |   |
| Cash and cash equivalents at beginning of year                                    |   |                         | 603,257  |   |   |   | 195,830 |   |
| Cash and cash equivalents at end of period                                        |   | $                            | 343,423  |   |   | $      | 389,024 |   |
|                                                                              |   |                         |     |   |   |   |   |   |
| The accompanying notes are an integral part of these statements.                  |   |                         |     |   |   |   |   |   |
|                                                                              |   |                         |     |   |   |   |   |   |

----

|                   |   | Three Months Ended |   |
|------------------------|--------|--------------------|--------|
|                   |   | March 31,          |   |
| (dollars in thousands) |   | 2010               |   |   | 2009 |   |
| Interest               |   | $                  | 35,066 |   |   | $ | 46,205 |   |
| Taxes                  |   |               | -      |   |   |   | - |   |
|                   |   |               |   |   |   |   |   |   |

|                                          |   | Three Months Ended |   |
|-----------------------------------------------|--------|--------------------|--------|
|                                          |   | March 31,          |   |
| (dollars in thousands)                        |   | 2010               |   |   | 2009 |   |
| Transfers of loans to other real estate       |   | $                  | 1,479  |   |   | $ | 281 |   |
| Other than temporary impairment investments   |   |               | 634    |   |   |   | 26,595 |   |
| Dividends accrued not paid on preferred stock |   |               | -      |   |   |   | 1,834 |   |
|                                          |   |               |   |   |   |   |   |   |

| ●   | Deposits at the Federal Reserve Bank were previously included in “cash and due from banks” and were reclassified to “interest earning deposits in banks” on the consolidated balance sheet.  Interest income on deposits at the Federal Reserve Bank was reclassified from non-interest income to interest income in the statement of operations. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                           |   | March 31, 2010 |   |
|------------------------------------------------|--------|----------------|--------|
|                                           |   | Before         |   |   | Tax |   |   | Net of |   |
| (dollars in thousands)                         |   | Tax            |   |   | Expense |   |   | Tax |   |
|                                           |   | Amount         |   |   | (Benefit) |   |   | Amount |   |
|                                           |   |           |   |   |   |   |   |   |   |
| Net income (loss)                              |   | $              | (324   | ) |   | $ | (4,250 | ) |   | $ | 3,926 |   |
|                                           |   |           |   |   |   |   |   |   |   |   |   |   |
| Unrealized holding gains arising during period |   |           | 1,445  |   |   |   | 470 |   |   |   | 975 |   |
| Less reclassification adjustment for losses    |   |           |   |   |   |   |   |   |   |   |   |   |
|  realized in net income                   |   |           | (634   | ) |   |   | (222 | ) |   |   | (412 | ) |
| Unrealized gains on investment securities      |   |           | 2,079  |   |   |   | 692 |   |   |   | 1,386 |   |
| Unrealized (losses) on cash flow derivatives   |   |           | (102   | ) |   |   | - |   |   |   | (102 | ) |
| Net effect of pension curtailment              |   |           | (2,465 | ) |   |   | (863 | ) |   |   | (1,601 | ) |
| Other comprehensive loss                       |   |           | (488   | ) |   |   | (171 | ) |   |   | (317 | ) |
|                                           |   |           |   |   |   |   |   |   |   |   |   |   |
| Total comprehensive income (loss)              |   | $              | (812   | ) |   | $ | (4,421 | ) |   | $ | 3,609 |   |
|                                           |   |           |   |   |   |   |   |   |   |   |   |   |

|                                         |   | March 31, |   |   | December 31, |   |
|----------------------------------------------|--------|-----------|--------|--------|--------------|--------|
| (dollars in thousands)                       |   | 2010      |   |   | 2009         |   |
| Unrealized gains on investment securities    |   | $         | 9,199  |   |         | $      | 7,813 |   |
| Unrealized (losses) on cash flow derivatives |   |      | (2,847 | )      |         |   | (2,745 | ) |
| Unrecognized pension costs                   |   |      | (8,636 | )      |         |   | (7,035 | ) |
|                                         |   |      |   |   |         |   |   |   |
| Total accumulated other comprehensive loss   |   | $         | (2,284 | )      |         | $      | (1,967 | ) |
|                                         |   |      |   |   |         |   |   |   |

----

|                                                  |   | March 31, 2010    |      |
|-------------------------------------------------------|--------|-------------------|-----------|
|                                                  |   |              |      |   | Gross |   |   | Gross |   |   |   |   |
| (dollars in thousands)                                |   | Amortized         |      |   | unrealized |   |   | unrealized |   |   | Fair |   |
|                                                  |   | cost              |      |   | gains |   |   | losses |   |   | value |   |
| Available for Sale                                    |   |              |      |   |   |   |   |   |   |   |   |   |
| U.S. Treasury securities                              |   | $                 | 145,360   |   |   | $ | 69 |   |   | $ | (1 | ) |   | $ | 145,428 |   |
| U.S. Government agency securities                     |   |              | 88,264    |   |   |   | 385 |   |   |   | (35 | ) |   |   | 88,614 |   |
| State and municipal bonds                             |   |              | 363,630   |   |   |   | 5,719 |   |   |   | (10,262 | ) |   |   | 359,087 |   |
| Mortgage-backed securities/                           |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Collateralized mortgage obligations |   |              | 938,847   |   |   |   | 21,877 |   |   |   | (1,927 | ) |   |   | 958,797 |   |
| Corporate securities and other                        |   |              | 14,739    |   |   |   | 185 |   |   |   | (1,877 | ) |   |   | 13,047 |   |
| Marketable equity  securities               |   |              | 4,070     |   |   |   | 361 |   |   |   | (342 | ) |   |   | 4,089 |   |
|    Total                               |   | $                 | 1,554,910 |   |   | $ | 28,596 |   |   | $ | (14,444 | ) |   | $ | 1,569,062 |   |
|                                                  |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held to Maturity                                      |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury securities                              |   | $                 | 353       |   |   | $ | 5 |   |   | $ | - |   |   | $ | 358 |   |
| State and municipal bonds                             |   |              | 434,743   |   |   |   | 4,951 |   |   |   | (4,125 | ) |   |   | 435,569 |   |
| Mortgage-backed securities                            |   |              | 156,219   |   |   |   | 1,062 |   |   |   | (328 | ) |   |   | 156,953 |   |
|    Total                               |   | $                 | 591,315   |   |   | $ | 6,018 |   |   | $ | (4,453 | ) |   | $ | 592,880 |   |
|                                                  |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                  |   | December 31, 2009 |      |
|                                                  |   |              |      |   |   | Gross |   |   | Gross |   |   |   |   |   |
| (dollars in thousands)                                |   | Amortized         |      |   | unrealized |   |   | unrealized |   |   | Fair |   |
|                                                  |   | cost              |      |   | gains |   |   | losses |   |   | value |   |
| Available for Sale                                    |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury securities                              |   | $                 | 145,457   |   |   | $ | 60 |   |   | $ | (85 | ) |   | $ | 145,432 |   |
| U.S. Government agency securities                     |   |              | 88,254    |   |   |   | 306 |   |   |   | (156 | ) |   |   | 88,404 |   |
| State and municipal bonds                             |   |              | 367,837   |   |   |   | 6,107 |   |   |   | (9,742 | ) |   |   | 364,202 |   |
| Mortgage-backed securities/                           |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Collateralized mortgage obligations |   |              | 866,817   |   |   |   | 20,309 |   |   |   | (2,952 | ) |   |   | 884,174 |   |
| Corporate securities and other                        |   |              | 14,745    |   |   |   | 150 |   |   |   | (1,801 | ) |   |   | 13,094 |   |
| Marketable equity  securities               |   |              | 4,540     |   |   |   | 142 |   |   |   | (321 | ) |   |   | 4,361 |   |
|    Total                               |   | $                 | 1,487,650 |   |   | $ | 27,074 |   |   | $ | (15,057 | ) |   | $ | 1,499,667 |   |
|                                                  |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held to Maturity                                      |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury securities                              |   | $                 | 354       |   |   | $ | 7 |   |   | $ | - |   |   | $ | 361 |   |
| State and municipal bonds                             |   |              | 436,108   |   |   |   | 5,917 |   |   |   | (3,897 | ) |   |   | 438,128 |   |
| Mortgage-backed securities                            |   |              | 165,461   |   |   |   | 1,020 |   |   |   | (1,055 | ) |   |   | 165,426 |   |
|   Total                                     |   | $                 | 601,923   |   |   | $ | 6,944 |   |   | $ | (4,952 | ) |   | $ | 603,915 |   |
|                                                  |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                              |   | For the three months |   |
|-----------------------------------|--------|----------------------|--------|
|                              |   | ended March 31,      |   |
|                              |   | 2010                 |   |   | 2009 |   |
| Gains                             |   | $                    | -      |   |   | $ | 77 |   |
| Losses                            |   |                 | -      |   |   |   | (2,361 | ) |
| Net (losses) gains from sales of  |   |                 |   |   |   |   |   |   |
|   investment securities |   | $                    | -      |   |   | $ | (2,284 | ) |
|                              |   |                 |   |   |   |   |   |   |

----

|                                                  |   |       |   |   | Less than 12 months |   |    | 12 months or longer |   |   | Total  |   |
|-------------------------------------------------------|--------|------------|--------|--------|---------------------|--------|---------|---------------------|--------|--------|--------|--------|
|                                                  |   | No. of     |   |   | Fair                |   |    | Unrealized          |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
| (dollars in thousands)                                |   | Securities |   |   | Value               |   |    | Losses              |   |   | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
| U. S. Treasury securities                             |   |       | 2      |   |                | $      | 25,098  |                |   | $      | (1     | )      |   | $ | - |   |   | $ | - |   |   | $ | 25,098 |   |   | $ | (1 | ) |
| U. S. Government agency securities                    |   |       | 2      |   |                |   | 15,048  |                |   |   | (35    | )      |   |   | - |   |   |   | - |   |   |   | 15,048 |   |   |   | (35 | ) |
| State and municipal bonds                             |   |       | 454    |   |                |   | 219,671 |                |   |   | (6,158 | )      |   |   | 61,373 |   |   |   | (8,229 | ) |   |   | 281,044 |   |   |   | (14,387 | ) |
| Mortgage-backed securities/                           |   |       |   |   |                |   |    |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Collateralized mortgage obligations |   |       | 97     |   |                |   | 239,361 |                |   |   | (1,117 | )      |   |   | 16,266 |   |   |   | (1,138 | ) |   |   | 255,627 |   |   |   | (2,255 | ) |
| Corporate securities and other                        |   |       | 11     |   |                |   | 845     |                |   |   | (171   | )      |   |   | 5,849 |   |   |   | (1,706 | ) |   |   | 6,694 |   |   |   | (1,877 | ) |
| Total debt securities                                 |   |       | 566    |   |                |   | 500,023 |                |   |   | (7,482 | )      |   |   | 83,488 |   |   |   | (11,073 | ) |   |   | 583,511 |   |   |   | (18,555 | ) |
| Marketable equity securities                          |   |       | 5      |   |                |   | 1,007   |                |   |   | (342   | )      |   |   | - |   |   |   | - |   |   |   | 1,007 |   |   |   | (342 | ) |
|      Total                   |   |       | 571    |   |                | $      | 501,030 |                |   | $      | (7,824 | )      |   | $ | 83,488 |   |   | $ | (11,073 | ) |   | $ | 584,518 |   |   | $ | (18,897 | ) |
|                                                  |   |       |   |   |                |   |    |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                  |   |       |   |   | Less than 12 months |   |    | 12 months or longer |   |   | Total  |   |
|-------------------------------------------------------|--------|------------|--------|--------|---------------------|--------|---------|---------------------|--------|--------|--------|--------|
|                                                  |   | No. of     |   |   | Fair                |   |    | Unrealized          |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
| (dollars in thousands)                                |   | Securities |   |   | Value               |   |    | Losses              |   |   | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
| U. S. Treasury securities                             |   |       | 5      |   |                | $      | 75,370  |                |   | $      | (85    | )      |   | $ | - |   |   | $ | - |   |   | $ | 75,370 |   |   | $ | (85 | ) |
| U. S. Government agency securities                    |   |       | 6      |   |                |   | 50,042  |                |   |   | (156   | )      |   |   | - |   |   |   | - |   |   |   | 50,042 |   |   |   | (156 | ) |
| State and municipal bonds                             |   |       | 403    |   |                |   | 195,155 |                |   |   | (4,837 | )      |   |   | 62,303 |   |   |   | (8,802 | ) |   |   | 257,458 |   |   |   | (13,639 | ) |
| Mortgage-backed securities/                           |   |       |   |   |                |   |    |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Collateralized mortgage obligations |   |       | 112    |   |                |   | 313,331 |                |   |   | (2,127 | )      |   |   | 23,869 |   |   |   | (1,880 | ) |   |   | 337,200 |   |   |   | (4,007 | ) |
| Corporate securities and other                        |   |       | 11     |   |                |   | -       |                |   |   | -      |   |   |   | 6,754 |   |   |   | (1,801 | ) |   |   | 6,754 |   |   |   | (1,801 | ) |
| Total debt securities                                 |   |       | 537    |   |                |   | 633,898 |                |   |   | (7,205 | )      |   |   | 92,926 |   |   |   | (12,483 | ) |   |   | 726,824 |   |   |   | (19,688 | ) |
| Marketable equity securities                          |   |       | 4      |   |                |   | 714     |                |   |   | (321   | )      |   |   | - |   |   |   | - |   |   |   | 714 |   |   |   | (321 | ) |
|      Total                   |   |       | 541    |   |                | $      | 634,612 |                |   | $      | (7,526 | )      |   | $ | 92,926 |   |   | $ | (12,483 | ) |   | $ | 727,538 |   |   | $ | (20,009 | ) |
|                                                  |   |       |   |   |                |   |    |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (dollars in thousands)           |   | Available for Sale |      |   | Held to Maturity |   |
|----------------------------------|--------|--------------------|-----------|--------|------------------|--------|
|                             |   | Amortized          |      |   | Fair             |   |   | Amortized |   |   | Fair |   |
|                             |   | Cost               |      |   | Value            |   |   | Cost |   |   | Value |   |
| Due in one year or less          |   | $                  | 197,570   |   |             | $      | 197,906 |   |   | $ | 353 |   |   | $ | 358 |   |
| Due after one through five years |   |               | 145,322   |   |             |   | 147,310 |   |   |   | 29,261 |   |   |   | 29,704 |   |
| Due after five through ten years |   |               | 241,852   |   |             |   | 250,735 |   |   |   | 27,872 |   |   |   | 28,011 |   |
| Due after ten years              |   |               | 966,096   |   |             |   | 969,022 |   |   |   | 533,829 |   |   |   | 534,807 |   |
| Marketable equity securities     |   |               | 4,070     |   |             |   | 4,089 |   |   |   | - |   |   |   | - |   |
|                             |   | $                  | 1,554,910 |   |             | $      | 1,569,062 |   |   | $ | 591,315 |   |   | $ | 592,880 |   |
|                             |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |

| (dollars in thousands) |   | March 31, |      |   | December 31, |   |
|------------------------|--------|-----------|-----------|--------|--------------|--------|
|                   |   | 2010      |      |   | 2009         |   |
| Deposits               |   | $         | 670,795   |   |         | $      | 484,685 |   |
| Repurchase agreements  |   |      | 802,884   |   |         |   | 719,073 |   |
| FHLB advances          |   |      | 94,085    |   |         |   | 94,970 |   |
|                   |   | $         | 1,567,764 |   |         | $      | 1,298,728 |   |
|                   |   |      |      |   |         |   |   |   |

----

| (dollars in thousands)                     |   | March 31, |      |   | December 31, |   |
|--------------------------------------------|--------|-----------|-----------|--------|--------------|--------|
|                                       |   | 2010      |      |   | 2009         |   |
| Commercial and Industrial Loans and Leases |   | $         | 1,147,903 |   |         | $      | 1,168,506 |   |
| Real Estate Loans:                         |   |      |      |   |         |   |   |   |
| Construction and Land Development          |   |      | 463,833   |   |         |   | 534,315 |   |
| Residential                                |   |      | 2,516,100 |   |         |   | 2,542,301 |   |
| Other (non-farm, non-residential)          |   |      | 1,535,772 |   |         |   | 1,527,350 |   |
| Loans to Individuals                       |   |      | 251,611   |   |         |   | 252,028 |   |
|                                       |   |      | 5,915,219 |   |         |   | 6,024,500 |   |
| Allowance for loan and lease losses        |   |      | (153,850  | )      |         |   | (146,271 | ) |
| Total loans, net                           |   | $         | 5,761,369 |   |         | $      | 5,878,229 |   |
|                                       |   |      |      |   |         |   |   |   |

|   | (1) The classification of loans in the above table corresponds to defined bank regulatory reporting  categories. Total loans included the        reclassification of overdrafts as loans of $1.6 million at March 31, 2010 and December 31, 2009. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (2) Loan classifications are shown net of unamortized costs of $933,000 at March 31, 2010 and $44,000 at December 31, 2009.                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                      |   |   |   |   |

----

|                    |   | For the period ended |    |
|-------------------------|--------|----------------------|---------|
| (dollars in thousands)  |   | March 31,            |    |
|                    |   | 2010                 |    |   | 2009 |   |
| Beginning Allowance     |   | $                    | 146,271 |   |   | $ | 84,006 |   |
| Provision for loan loss |   |                 | 32,500  |   |   |   | 17,525 |   |
| Recoveries              |   |                 | 2,561   |   |   |   | 786 |   |
| Chargeoffs              |   |                 | (27,482 | ) |   |   | (16,044 | ) |
| Net Chargeoffs          |   |                 | (24,921 | ) |   |   | (15,258 | ) |
| Ending Allowance        |   | $                    | 153,850 |   |   | $ | 86,273 |   |
|                    |   |                 |    |   |   |   |   |   |

| (dollars in thousands)                                  |   |           |    |   |              |   |   |    |   |   |      |   |
|---------------------------------------------------------|--------|----------------|---------|--------|-------------------|--------|--------|---------|--------|--------|-----------|--------|
|                                                    |   | March 31, 2010 |    |   | December 31, 2009 |   |
|                                                    |   | Balance        |    |   | Allowance         |   |   | Balance |   |   | Allowance |   |
| Impaired loans without a specific reserve               |   | $              | 72,425  |   |              | $      | -      |    |   | $      | 73,309    |   |   | $ | - |   |
| Impaired loans with a specific reserve                  |   |           | 38,639  |   |              |   | 12,513 |    |   |   | 49,207    |   |   |   | 12,810 |   |
| Restructured loans                                      |   |           | 6,653   |   |              |   | 1,969  |    |   |   | 576       |   |   |   | - |   |
|    Total impaired and restructured loans |   | $              | 117,717 |   |              | $      | 14,482 |    |   | $      | 123,092   |   |   | $ | 12,810 |   |
|                                                    |   |           |    |   |              |   |   |    |   |   |      |   |   |   |   |   |
| Undrawn commitments to lend on restructured loans       |   | $              | -       |   |              |   |   |    |   | $      | -         |   |   |   |   |   |

|                                            |            | For the three months |    |
|-------------------------------------------------|-----------------|----------------------|---------|
|                                            | ended March 31, |                 |
|                                            |            | 2010                 |    |   | 2009 |   |
| Gross interest due on impaired loans            |            | $                    | 1,585   |   |   | $ | 487 |   |
| Interest received on impaired loans             |            |                 | 79      |   |   |   | 8 |   |
| Net impact of interest income of impaired loans |            | $                    | 1,506   |   |   | $ | 479 |   |
|                                            |            |                 |    |   |   |   |   |   |
| Average recorded investment in impaired loans   |            | $                    | 125,000 |   |   | $ | 35,000 |   |
|                                            |            |                 |    |   |   |   |   |   |
|                                            |            |                 |    |   |   |   |   |   |

|                                |   | Three Months    |      |   |   |   |   |   |   | Year Ended   |   |   |      |   |
|-------------------------------------|--------|-----------------|-----------|--------|--------|--------|--------|--------|--------|--------------|--------|--------|-----------|--------|
| (dollars in thousands)              |   | Ended March 31, |      |   |   |   |   |   |   | December 31, |   |   |      |   |
|                                |   | 2010            |      |   | Yield  |   |   |   |   | 2009         |   |   | Yield     |   |
| Savings                             |   | $               | 433,669   |   |   |   | 0.33   | %      |   |         |   | $      | 414,886   |   |   |   | 0.33 | % |
| NOW Accounts                        |   |            | 1,114,539 |   |   |   | 0.43   | %      |   |         |   |   | 1,284,143 |   |   |   | 0.56 | % |
| Money Market Accounts               |   |            | 1,724,852 |   |   |   | 0.97   | %      |   |         |   |   | 1,675,369 |   |   |   | 1.11 | % |
| CDs $100 or less                    |   |            | 1,565,238 |   |   |   | 2.03   | %      |   |         |   |   | 1,607,148 |   |   |   | 2.38 | % |
| CDs greater than $100               |   |            | 772,599   |   |   |   | 2.02   | %      |   |         |   |   | 1,003,656 |   |   |   | 2.28 | % |
| Total Interest Bearing Deposits     |   |            | 5,610,897 |   |   |   | 1.27   | %      |   |         |   |   | 5,985,202 |   |   |   | 1.50 | % |
| Total Non-Interest Bearing Deposits |   |            | 800,467   |   |   |   | -      |   |   |         |   |   | 753,650   |   |   |   | - |   |
| Total Deposits                      |   | $               | 6,411,364 |   |   |   | 1.12   | %      |   |         |   | $      | 6,738,852 |   |   |   | 1.34 | % |
|                                |   |            |      |   |   |   |   |   |   |         |   |   |      |   |   |   |   |   |

| (dollars in thousands) |   |   |      |   |
|------------------------|--------|--------|-----------|--------|
|                   |   |   |      |   |
| 2010                   |   | $      | 1,592,205 |   |
| 2011                   |   |   | 482,389   |   |
| 2012                   |   |   | 93,319    |   |
| 2013                   |   |   | 31,821    |   |
| 2014                   |   |   | 136,675   |   |
| Thereafter             |   |   | 1,428     |   |
|                   |   | $      | 2,337,837 |   |
|                   |   |   |      |   |

----

| (dollars in thousands)                                         |   | March 31, 2010 |      |   | December 31, 2009   |   |
|----------------------------------------------------------------|--------|----------------|-----------|--------|---------------------|--------|
|                                                           |   | Balance        |      |   | Effective rate |   |   | Balance |   |   | Effective rate |   |
| Securities sold under repurchase agreements                    |   |           |      |   |                |   |   |   |   |   |   |   |
|    and federal funds purchased                  |   | $              | 758,828   |   |                |   | 1.53 | % |   | $ | 737,323 |   |   |   | 1.67 | % |
| Short-term borrowings                                          |   |           | 7,165     |   |                |   | 0.00 | % |   |   | 6,900 |   |   |   | 0.00 | % |
| Federal Home Loan Bank advances                                |   |           | 743,781   |   |                |   | 4.51 | % |   |   | 756,803 |   |   |   | 4.51 | % |
| Subordinated debentures accounted for at fair value            |   |           | 62,347    |   |                |   | 7.85 | % |   |   | 55,086 |   |   |   | 7.85 | % |
| Subordinated debentures accounted for at amortized cost (1)    |   |           | 77,321    |   |                |   | 5.64 | % |   |   | 77,321 |   |   |   | 5.77 | % |
|                                                           |   |           |      |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Total borrowings and other debt obligations                    |   | $              | 1,649,442 |   |                |   | 3.30 | % |   | $ | 1,633,433 |   |   |   | 3.38 | % |
|                                                           |   |           |      |   |                |   |   |   |   |   |   |   |   |   |   |   |
| (1)  Includes the effect of the interest rate swaps. |   |           |      |   |                |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |           |      |   |                |   |   |   |   |   |   |   |   |   |   |   |

| (dollars in thousands)                          |   | Three months ended March 31, |        |
|-------------------------------------------------|--------|------------------------------|-------------|
|                                            |   | 2010                         |        |   | 2009 |   |
| Calculation of income for EPS:                  |   |                         |        |   |   |   |
| Net income as reported and for basic EPS        |   | $                            | 3,926       |   |   | $ | 3,799 |   |
| Less preferred dividends and discount accretion |   |                         | 2,005       |   |   |   | 2,054 |   |
| Net income available to common shareholders     |   | $                            | 1,921       |   |   | $ | 1,745 |   |
|                                            |   |                         |        |   |   |   |   |   |
| Calculation of shares:                          |   |                         |        |   |   |   |   |   |
| Weighted average basic shares                   |   |                         | 125,875,061 |   |   |   | 81,497,806 |   |
| Dilutive effect of:                             |   |                         |        |   |   |   |   |   |
|    Share-based compensation      |   |                         | 164,051     |   |   |   | 393,466 |   |
|    Warrants                      |   |                         | -           |   |   |   | - |   |
| Weighted average fully diluted shares           |   |                         | 126,039,112 |   |   |   | 81,891,272 |   |
|                                            |   |                         |        |   |   |   |   |   |
| Earnings per common share:                      |   |                         |        |   |   |   |   |   |
| Basic                                           |   | $                            | 0.02        |   |   | $ | 0.02 |   |
| Diluted                                         |   | $                            | 0.02        |   |   | $ | 0.02 |   |
|                                            |   |                         |        |   |   |   |   |   |

----

|                                               |   | As of and for the Three Months Ended |      |
|----------------------------------------------------|--------|--------------------------------------|-----------|
|                                               |   | March 31, 2010                       |      |
|                                               |   | Community                            |      |   |   |   |   |   |   |
| (dollars in thousands)                             |   | Banking                              |      |   | Other |   |   | Consolidated |   |
| Total assets                                       |   | $                                    | 9,093,397 |   |   | $ | 78,364 |   |   | $ | 9,171,761 |   |
| Total deposits                                     |   |                                 | 6,411,364 |   |   |   | - |   |   |   | 6,411,364 |   |
| Net interest income (loss)                         |   |                                 | 69,118    |   |   |   | (1,859 | ) |   |   | 67,259 |   |
| Total non-interest income (loss)                   |   |                                 | 18,598    |   |   |   | 3,976 |   |   |   | 22,574 |   |
| Total non-interest expense                         |   |                                 | 50,752    |   |   |   | 6,905 |   |   |   | 57,657 |   |
| Net income (loss) available to common shareholders |   |                                 | 8,981     |   |   |   | (7,060 | ) |   |   | 1,921 |   |
|                                               |   |                                 |      |   |   |   |   |   |   |   |   |   |
|                                               |   | As of and for the Three Months Ended |      |
|                                               |   | March 31, 2009                       |      |
|                                               |   | Community                            |      |   |   |   |   |   |   |   |   |
| (dollars in thousands)                             |   | Banking                              |      |   | Other |   |   | Consolidated |   |
| Total assets                                       |   | $                                    | 9,554,619 |   |   | $ | 78,423 |   |   | $ | 9,633,042 |   |
| Total deposits                                     |   |                                 | 6,660,234 |   |   |   | - |   |   |   | 6,660,234 |   |
| Net interest income (loss)                         |   |                                 | 60,605    |   |   |   | (1,975 | ) |   |   | 58,641 |   |
| Total non-interest income                          |   |                                 | 7,041     |   |   |   | 8,173 |   |   |   | 15,203 |   |
| Total non-interest expense                         |   |                                 | 48,377    |   |   |   | 8,316 |   |   |   | 56,693 |   |
| Net income (loss) available to common shareholders |   |                                 | 5,330     |   |   |   | (3,585 | ) |   |   | 1,745 |   |
|                                               |   |                                 |      |   |   |   |   |   |   |   |   |   |

----

| (dollars in thousands)                  |   | Three Months Ended March 31, |   |
|----------------------------------------------|--------|------------------------------|--------|
|                                         |   | 2010                         |   |   | 2009 |   |
| Service cost                                 |   | $                            | 718    |   |   | $ | 720 |   |
| Interest cost                                |   |                         | 518    |   |   |   | 509 |   |
| Expected return on plan assets               |   |                         | (592   | ) |   |   | (566 | ) |
| Amortization of prior service cost           |   |                         | (129   | ) |   |   | (129 | ) |
| Amortization of unrecognized net actual loss |   |                         | 336    |   |   |   | 341 |   |
| Net periodic benefit cost                    |   | $                            | 851    |   |   | $ | 875 |   |
|                                         |   |                         |   |   |   |   |   |   |

|                                                                |   | March 31, |      |   | December 31, |   |
|---------------------------------------------------------------------|--------|-----------|-----------|--------|--------------|--------|
| (dollars in thousands)                                              |   | 2010      |      |   | 2009         |   |
| Financial instruments whose contract amounts represent credit risk: |   |      |      |   |         |   |
| Commitments to extend credit                                        |   | $         | 1,667,110 |   |         | $      | 1,561,877 |   |
| Commitments to fund mortgages held for sale                         |   |      | 22,099    |   |         |   | 19,596 |   |
| Commitments to sell mortgage to investors                           |   |      | 28,675    |   |         |   | 31,908 |   |
| Letters of credit                                                   |   |      | 171,510   |   |         |   | 175,394 |   |
|                                                                |   |      |      |   |         |   |   |   |

----

|                                              |   |      |   |   |     |   |   |   |   |   |      |   |   |    |   |   |   |   |   |    |   |
|---------------------------------------------------|--------|-----------|--------|--------|----------|--------|--------|--------|--------|--------|-----------|--------|--------|---------|--------|--------|--------|--------|--------|---------|--------|
| (dollars in thousands)                            |   |      |   |   | Notional |   |   |   |   |   |      |   |   | Receive |   |   | Pay    |   |   | Life    |   |
|                                              |   | Positions |   |   | Amount   |   |   | Asset  |   |   | Liability |   |   | Rate    |   |   | Rate   |   |   | (Years) |   |
| March 31, 2010                                    |   |      |   |   |     |   |   |   |   |   |      |   |   |    |   |   |   |   |   |    |   |
| Pay fixed - receive floating                      |   |      |   |   |     |   |   |   |   |   |      |   |   |    |   |   |   |   |   |    |   |
|      interest rate swaps |   |      | 3      |   |     | $      | 75,000 |   |   | $      | -         |   |   | $       | 2,847  |   |   |   | 0.25   | %       |   |   | 3.26 | % |   |   | 1.58 |   |
| Total derivatives used in                         |   |      |   |   |     |   |   |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
| hedging relationships                             |   |      |   |   |     | $      | 75,000 |   |   | $      | -         |   |   | $       | 2,847  |   |   |   | 0.25   | %       |   |   | 3.26 | % |   |   | 1.58 |   |
|                                              |   |      |   |   |     |   |   |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
| December 31, 2009                                 |   |      |   |   |     |   |   |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
| Pay fixed - receive floating                      |   |      |   |   |     |   |   |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
|      interest rate swaps |   |      | 3      |   |     | $      | 75,000 |   |   | $      | -         |   |   | $       | 2,745  |   |   |   | 0.28   | %       |   |   | 3.26 | % |   |   | 1.83 |   |
| Total derivatives used in                         |   |      |   |   |     |   |   |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
| hedging relationships                        |   |      |   |   |     | $      | 75,000 |   |   | $      | -         |   |   | $       | 2,745  |   |   |   | 0.28   | %       |   |   | 3.26 | % |   |   | 1.58 |   |
|                                              |   |      |   |   |     |   |   |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |

| (dollars in thousands)                            |   |      |   |   | Notional |    |    |   |   |   |      |   |   | Receive |   |   | Pay    |   |   | Life    |   |
|---------------------------------------------------|--------|-----------|--------|--------|----------|---------|---------|--------|--------|--------|-----------|--------|--------|---------|--------|--------|--------|--------|--------|---------|--------|
|                                              |   | Positions |   |   | Amount   |    |    | Asset  |   |   | Liability |   |   | Rate    |   |   | Rate   |   |   | (Years) |   |
| March 31, 2010                                    |   |      |   |   |     |    |    |   |   |   |      |   |   |    |   |   |   |   |   |    |   |
| Receive fixed - pay                               |   |      |   |   |     |    |    |   |   |   |      |   |   |    |   |   |   |   |   |    |   |
| floating interest rate swaps                      |   | 96        |   |   | $        | 261,430 |    |   | $      | 19,029 |      |   | $      | -       |   |   |   | 6.13   | %      |    |   | 1.92 | % |   |   | 4.86 |   |
| Pay fixed - receive floating                      |   |      |   |   |     |    |    |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
|      interest rate swaps |   |      | 96     |   |     |    | 261,430 |   |   |   | -         |   |   |    | 19,029 |   |   |   | 1.92   | %       |   |   | 6.13 | % |   |   | 4.86 |   |
| Net interest rate swaps                           |   |      |   |   |     | $       | 522,860 |   |   | $      | 19,029    |   |   | $       | 19,029 |   |   |   | 4.03   | %       |   |   | 4.03 | % |   |   | 4.86 |   |
|                                              |   |      |   |   |     |    |    |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
| December 31, 2009                                 |   |      |   |   |     |    |    |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
| Receive fixed - pay                               |   |      |   |   |     |    |    |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
| floatingi nterest rate swaps                      |   | 98        |   |   | $        | 268,156 |    |   | $      | 17,307 |      |   | $      | -       |   |   |   | 6.11   | %      |    |   | 1.90 | % |   |   | 5.04 |   |
| Pay fixed - receive floating                      |   |      |   |   |     |    |    |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
|      interest rate swaps |   |      | 98     |   |     |    | 268,156 |   |   |   | -         |   |   |    | 17,307 |   |   |   | 1.90   | %       |   |   | 6.11 | % |   |   | 5.04 |   |
| Net interest rate swaps                           |   |      |   |   |     | $       | 536,312 |   |   | $      | 17,307    |   |   | $       | 17,307 |   |   |   | 4.00   | %       |   |   | 4.00 | % |   |   | 5.04 |   |
|                                              |   |      |   |   |     |    |    |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |

----

|                         |   |                                          |   |                                               |                                                 |   |   |   |   |
|------------------------------|--------|-----------------------------------------------|--------|----------------------------------------------------|------------------------------------------------------|--------|--------|--------|--------|
|                         |   | Balance Sheet Effect at                       |   | Income Statement Effect For The Three Months Ended |
| Derivative Activity          |   | March 31, 2010                                |   | March 31, 2010                                     |
|                         |   |                                          |   |                                               |                                                 |   |   |   |   |
| Cash flow hedges:            |   |                                          |   |                                               |                                                 |   |   |   |   |
| Pay fixed - receive floating |   | Increase to other liabilities of $2.8 million |   |                                               | The ineffective portion is zero.                     |   |   |
| interest rate swaps          |   | and a corresponding decrease to OCI.          |   |                                               | Increase to interest expense of $0.6 million for net |
|                         |   |                                          |   |                                               | settlements.                                         |   |   |   |   |
|                         |   |                                          |   |                                               |                                                 |   |   |   |   |
| Interest rate swaps:         |   | Increase to other assets/liabilities          |   |                                               | No net effect on Other operating income from         |
|                         |   | of $19.0 million.                             |   |                                               | $1.7 million change.                                 |   |   |   |
|                         |   |                                          |   |                                               |                                                 |   |   |   |   |
| Other derivatives:           |   |                                          |   |                                               |                                                 |   |   |   |   |
| Forward sale commitments     |   | Increase to other assets of $15,000.          |   |                                               | Increase to mortgage banking income of $109,000.     |
| Interest rate locks          |   | Increase to other liabilities of $30,000.     |   |                                               | Decrease to mortgage banking income of $82,000.      |
|                         |   |                                          |   |                                               |                                                 |   |   |   |   |

| ●   | The markets for U.S. Government agency are active, but the exact (cusip) securities owned by the Company are traded thinly or infrequently. Therefore the price for these securities is determined by reference to transactions in securities with similar yields, maturities and other features (matrix priced). |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | State and municipal bonds owned by the Company are traded thinly or infrequently, and as a result the fair value is estimated in reference to securities with similar yields, credit ratings, maturities, and in consideration of any prepayment assumptions obtained from market data. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ●   | Corporate securities owned by the Company are traded thinly or infrequently. Therefore the fair value for these securities is determined by reference to transactions in other issues of these securities with similar yields and features. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Corporate securities owned by the Company are not traded in active markets and prices for securities with similar features are unavailable. The fair value for each security is estimated in reference to benchmark transactions by security type based upon yields, credit spreads and option features. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Marketable equity securities are securities not subject to ownership restrictions but are traded thinly on exchanges or over-the-counter. As a result, prices are not available on a consistent basis from published sources, and therefore additional quotations from brokers may be obtained. Additional indications of pricing including subsequent financing rounds or pending transactions are considered by the Company in its estimate of the security’s fair value. The reported fair value is based upon the information the Company’s judgment with respect to the information it is able to reliably obtain. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                            |   |              |      |   |             |          |    |        |        |   |         |        |
|-------------------------------------------------|--------|-------------------|-----------|--------|------------------|---------------|---------|-------------|-------------|--------|--------------|-------------|
|                                            |   |              |      |   | Quoted Prices    |          |    | Significant |        |   |         |        |
|                                            |   |              |      |   | in Active        |          |    | Other       |        |   | Significant  |        |
|                                            |   | Total             |      |   | Markets for      |          |    | Observable  |        |   | Unobservable |        |
|                                            |   | Fair Value at     |      |   | Identical Assets |          | Inputs  |        |        | Inputs |         |
|                                            |   | March 31, 2010    |      |   | (Level 1)        |          |    | (Level 2)   |        |   | (Level 3)    |        |
| (dollars in thousands)                          |   |              |      |   |             |          |    |        |        |   |         |        |
| Assets                                          |   |              |      |   |             |          |    |        |        |   |         |        |
| U.S. Treasury securities                        |   | $                 | 145,428   |   |             | $             | 145,428 |        |        | $      | -            |        |   | $ | - |   |
| U.S. Government agency securities               |   |              | 88,614    |   |             |          | -       |        |        |   | 88,614       |        |   |   | - |   |
| State and municipal bonds                       |   |              | 359,087   |   |             |          | -       |        |        |   | 359,087      |        |   |   | - |   |
| Mortgage-backed securities/                     |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
|   Collateralized mortgage obligations |   |              | 958,797   |   |             |          | -       |        |        |   | 958,797      |        |   |   | - |   |
| Corporate securities and other                  |   |              | 13,047    |   |             |          | 2,127   |        |        |   | 2,442        |        |   |   | 8,478 |   |
| Marketable equity securities                    |   |              | 4,089     |   |             |          | 2,912   |        |        |   | -            |        |   |   | 1,177 |   |
| Investment securities, available for sale       |   |              | 1,569,062 |   |             |          | 150,467 |        |        |   | 1,408,940    |        |   |   | 9,655 |   |
|                                            |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
| Forward sale commitments                        |   |              | 15        |   |             |          | -       |        |        |   | 15           |        |   |   | - |   |
| Interest rate swap agreements                   |   |              | 19,029    |   |             |          | -       |        |        |   | 19,029       |        |   |   | - |   |
|                                            |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
| Liabilities                                     |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
| Subordinated debentures                         |   | $                 | 62,347    |   |             | $             | 62,347  |        |        | $      | -            |        |   | $ | - |   |
| Interest rate locks                             |   |              | 30        |   |             |          | -       |        |        |   | 30           |        |   |   | - |   |
| Interest rate swap agreements                   |   |              | 21,876    |   |             |          | -       |        |        |   | 21,876       |        |   |   | - |   |
|                                            |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
|                                            |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
|                                            |   |              |      |   |             | Quoted Prices |    |        | Significant |   |         |        |   |   |
|                                            |   |              |      |   |             | in Active     |    |        | Other       |   |         | Significant |   |
|                                            |   | Total             |      |   | Markets for      |          |    | Observable  |        |   | Unobservable |        |
|                                            |   | Fair Value at     |      |   | Identical Assets |          | Inputs  |        |        | Inputs |         |
|                                            |   | December 31, 2009 |      |   | (Level 1)        |          |    | (Level 2)   |        |   | (Level 3)    |        |
| (dollars in thousands)                          |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
| Assets                                          |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
| U.S. Treasury securities                        |   | $                 | 145,432   |   |             | $             | 145,432 |        |        | $      | -            |        |   | $ | - |   |
| U.S. Government agency securities               |   |              | 88,404    |   |             |          | -       |        |        |   | 88,404       |        |   |   | - |   |
| State and municipal bonds                       |   |              | 364,202   |   |             |          | -       |        |        |   | 364,202      |        |   |   | - |   |
| Mortgage-backed securities/                     |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
|   Collateralized mortgage obligations |   |              | 884,174   |   |             |          | -       |        |        |   | 884,174      |        |   |   | - |   |
| Corporate securities and other                  |   |              | 13,094    |   |             |          | 2,059   |        |        |   | 2,631        |        |   |   | 8,404 |   |
| Marketable equity securities                    |   |              | 4,361     |   |             |          | 3,171   |        |        |   |         |        |   |   | 1,190 |   |
| Investment securities, available for sale       |   |              | 1,499,667 |   |             |          | 150,662 |        |        |   | 1,339,411    |        |   |   | 9,594 |   |
|                                            |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
| Interest rate locks                             |   |              | 52        |   |             |          | -       |        |        |   | 52           |        |   |   | - |   |
| Interest rate swap agreements                   |   |              | 17,307    |   |             |          | -       |        |        |   | 17,307       |        |   |   | - |   |
|                                            |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
| Liabilities                                     |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
| Subordinated debentures                         |   | $                 | 55,086    |   |             | $             | 55,086  |        |        | $      | -            |        |   | $ | - |   |
| Forward sale commitments                        |   |              | 94        |   |             |          | -       |        |        |   | 94           |        |   |   |   |   |
| Interest rate swap agreements                   |   |              | 20,052    |   |             |          | -       |        |        |   | 20,052       |        |   |   | - |   |
|                                            |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
|                                            |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |

----

| (dollars in thousands)                        |   | Investment Securities |   |
|-----------------------------------------------|--------|-----------------------|--------|
|                                          |   | Available for Sale    |   |
|                                          |   | March 31, 2010        |   |   | December 31, 2009 |   |
| Assets                                        |   |                  |   |   |   |   |
| Beginning Balance                             |   | $                     | 9,594  |   |   | $ | 11,722 |   |
| Total gains/(losses)                          |   |                  |   |   |   |   |   |   |
| Included in earnings                          |   |                  | -      |   |   |   | (272 | ) |
| Included in other comprehensive income/(loss) |   |                  | 61     |   |   |   | (944 | ) |
| Purchases, issuances, and settlements         |   |                  | -      |   |   |   | - |   |
| Reclassification to Level 1                   |   |                  | -      |   |   |   | (912 | ) |
| Ending balance                                |   | $                     | 9,655  |   |   | $ | 9,594 |   |
|                                          |   |                  |   |   |   |   |   |   |

|                              |   | Quoted Prices    |   |   | Significant |   |   |         |   |   |    |   |
|-----------------------------------|--------|------------------|--------|--------|-------------|--------|--------|--------------|--------|--------|---------|--------|
| (dollars in thousands)            |   | in Active        |   |   | Other       |   |   | Significant  |   |   |    |   |
|                              |   | Markets for      |   |   | Observable  |   |   | Unobservable |   |   |    |   |
|                              |   | Identical Assets |   |   | Inputs      |   |   | Inputs       |   |   |    |   |
| March 31, 2010:                   |   | (Level 1)        |   |   | (Level 2)   |   |   | (Level 3)    |   |   | Balance |   |
| Assets                            |   |             |   |   |        |   |   |         |   |   |    |   |
| Loans and leases held for sale    |   | $                | 6,561  |   |        | $      | -      |         |   | $      | -       |   |   | $ | 6,561 |   |
| Impaired loans, net               |   |             | -      |   |        |   | -      |         |   |   | 103,235 |   |   |   | 103,235 |   |
| OREO and other repossessed assets |   |             | -      |   |        |   | -      |         |   |   | 2,386   |   |   |   | 2,386 |   |
|                              |   |             |   |   |        |   |   |         |   |   |    |   |   |   |   |   |
| December 31, 2009:                |   |             |   |   |        |   |   |         |   |   |    |   |   |   |   |   |
| Assets                            |   |             |   |   |        |   |   |         |   |   |    |   |   |   |   |   |
| Loans and leases held for sale    |   | $                | 18,028 |   |        | $      | -      |         |   | $      | -       |   |   | $ | 18,028 |   |
| Impaired loans, net               |   |             | -      |   |        |   | -      |         |   |   | 110,282 |   |   |   | 110,282 |   |
| OREO and other repossessed assets |   |             | -      |   |        |   | -      |         |   |   | 4,208   |   |   |   | 4,208 |   |
|                              |   |             |   |   |        |   |   |         |   |   |    |   |   |   |   |   |

----

|                                     |   | March 31, 2010 |      |   | December 31, 2009 |   |
|------------------------------------------|--------|----------------|-----------|--------|-------------------|--------|
|                                     |   | Carrying       |      |   | Estimated         |   |   | Carrying |   |   | Estimated |   |
| (dollars in thousands)                   |   | Amount         |      |   | Fair Value        |   |   | Amount |   |   | Fair Value |   |
| Cash and cash equivalents                |   | $              | 343,423   |   |              | $      | 343,423 |   |   | $ | 603,257 |   |   | $ | 603,257 |   |
| Investment securities available for sale |   |           | 1,569,062 |   |              |   | 1,569,062 |   |   |   | 1,499,667 |   |   |   | 1,499,667 |   |
| Investment securities held to maturity   |   |           | 591,315   |   |              |   | 592,880 |   |   |   | 601,923 |   |   |   | 603,915 |   |
|                                     |   |           |      |   |              |   |   |   |   |   |   |   |   |   |   |   |

|                                       |   | March 31, 2010 |      |   | December 31, 2009 |   |
|--------------------------------------------|--------|----------------|-----------|--------|-------------------|--------|
|                                       |   | Carrying       |      |   | Estimated         |   |   | Carrying |   |   | Estimated |   |
| (dollars in thousands)                     |   | Amount         |      |   | Fair Value        |   |   | Amount |   |   | Fair Value |   |
|                                       |   |           |      |   |              |   |   |   |   |   |   |   |
| Commercial and Industrial Loans and Leases |   | $              | 1,147,903 |   |              | $      | 995,188 |   |   | $ | 1,162,911 |   |   | $ | 1,003,558 |   |
| Real Estate Loans:                         |   |           |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Construction and Land Development          |   |           | 463,833   |   |              |   | 399,087 |   |   |   | 534,315 |   |   |   | 455,004 |   |
| Residential                                |   |           | 2,516,100 |   |              |   | 2,345,275 |   |   |   | 2,542,301 |   |   |   | 2,346,243 |   |
| Other (non-farm, non-residential)          |   |           | 1,535,772 |   |              |   | 1,427,770 |   |   |   | 1,527,350 |   |   |   | 1,403,654 |   |
| Loans to Individuals                       |   |           | 245,050   |   |              |   | 220,893 |   |   |   | 239,595 |   |   |   | 212,039 |   |
| Total loans                                |   | $              | 5,908,658 |   |              | $      | 5,388,213 |   |   | $ | 6,006,472 |   |   | $ | 5,420,498 |   |
|                                       |   |           |      |   |              |   |   |   |   |   |   |   |   |   |   |   |

|                                 |   | March 31, 2010 |      |   | December 31, 2009 |   |
|--------------------------------------|--------|----------------|-----------|--------|-------------------|--------|
|                                 |   | Carrying       |      |   | Estimated         |   |   | Carrying |   |   | Estimated |   |
| (dollars in thousands)               |   | Amount         |      |   | Fair Value        |   |   | Amount |   |   | Fair Value |   |
| Non-interest bearing deposits        |   | $              | 800,467   |   |              | $      | 800,467 |   |   | $ | 753,650 |   |   | $ | 753,650 |   |
| Interest-bearing deposits            |   |           | 3,273,060 |   |              |   | 3,273,060 |   |   |   | 3,374,398 |   |   |   | 3,374,398 |   |
| Deposits with stated maturities      |   |           | 2,337,837 |   |              |   | 2,353,723 |   |   |   | 2,610,804 |   |   |   | 2,624,755 |   |
| Repurchase agreements, federal funds |   |           |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| purchased and short-term borrowings  |   |           | 765,993   |   |              |   | 765,993 |   |   |   | 744,223 |   |   |   | 744,223 |   |
| FHLB advances                        |   |           | 743,781   |   |              |   | 816,145 |   |   |   | 756,803 |   |   |   | 828,887 |   |
| Subordinated debentures              |   |           | 139,668   |   |              |   | 139,668 |   |   |   | 132,407 |   |   |   | 132,407 |   |
|                                 |   |           |      |   |              |   |   |   |   |   |   |   |   |   |   |   |

----

----

| ● | allowance for loan and lease losses;  |
|---------|---------------------------------------|
| ● | goodwill and other intangible assets; |
| ● | income taxes; and                     |
| ● | other-than-temporary impairment.      |

----

----

| (dollars in thousands)                                                                                |   | March 31, |   |
|-------------------------------------------------------------------------------------------------------|--------|-----------|--------|
|                                                                                                  |   | 2010      |   |   | 2009 |   |
| Core net income reconciliation                                                                        |   |      |   |   |   |   |
| Net Income available to common shareholders                                                           |   | $         | 1,921  |   |   | $ | 1,745 |   |
|      After tax gain on pension plan curtailment                              |   |      | (2,643 | ) |   |   | - |   |
|      After tax unrealized fair market value loss on                          |   |      |   |   |   |   |   |   |
|           NPB Capital Trust II Preferred Securities |   |      | 4,720  |   |   |   | 1,234 |   |
|      Securities losses / OTTI                                                |   |      | -      |   |   |   | 6,545 |   |
| Core net income available to common shareholders                                                      |   | $         | 3,998  |   |   | $ | 9,524 |   |
|                                                                                                  |   |      |   |   |   |   |   |   |
| Earnings per share                                                                                    |   |      |   |   |   |   |   |   |
| Net Income available to common shareholders                                                           |   | $         | 0.02   |   |   | $ | 0.02 |   |
|      After tax gain on pension plan suspension                               |   |      | (0.02  | ) |   |   | - |   |
|      After tax unrealized fair market value loss on                          |   |      |   |   |   |   |   |   |
|           NPB Capital Trust II Preferred Securities |   |      | 0.03   |   |   |   | 0.02 |   |
|      Securities losses / OTTI                                                |   |      | -      |   |   |   | 0.08 |   |
| Core net income available to common shareholders                                                      |   | $         | 0.03   |   |   | $ | 0.12 |   |
|                                                                                                  |   |      |   |   |   |   |   |   |

|                                                                    |   | March 31, |      |
|-------------------------------------------------------------------------|--------|-----------|-----------|
|                                                                    |   | 2010      |      |   | 2009 |   |
| Return on average tangible common equity                                |   |      |      |   |   |   |
|    Return on average shareholders' equity                     |   |      | 1.48      | % |   |   | 1.31 | % |
|      Effect of preferred equity                |   |      | 0.24      | % |   |   | 0.18 | % |
|      Effect of goodwill and intangibles        |   |      | 0.87      | % |   |   | 2.02 | % |
|      Return on average tangible common equity  |   |      | 2.59      | % |   |   | 3.51 | % |
|    Average tangible equity:                                   |   |      |      |   |   |   |   |   |
|      Average shareholders' equity              |   | $         | 1,075,052 |   |   | $ | 1,176,494 |   |
|      Average preferred equity                  |   |      | (147,990  | ) |   |   | (144,611 | ) |
|      Average goodwill and intangibles          |   |      | (311,784  | ) |   |   | (592,816 | ) |
|      Average  tangible common equity |   | $         | 615,278   |   |   | $ | 439,067 |   |
|                                                                    |   |      |      |   |   |   |   |   |

----

| ●   | Loans to individuals to finance the purchase of personal assets or activities are substantially collateralized by residential real estate. This represents $252 million or 4.3% of total loans and leases, which is consistent with December 31, 2009 levels. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Residential real estate loans totaled $2.5 billion or 42.5% of total loans, a decrease of $26.2 million at December 31, 2009. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------|

| ●   | Commercial and industrial loans and leases totaled $1.1 billion and comprised 19.4% of total loans and leases outstanding at March 31, 2010. The balance declined 1.76%, or $20.6 million from $ 1.2 billion at December 31, 2009. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Real estate construction and land development loans decreased $70.5 million, or 13.2%, during the quarter to $464 million from $534 million at December 31, 2009.  Real estate construction and land development loans comprised 7.8% of the loan portfolio at March 31, 2010. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Other real estate loans increased $8.4 million to $1.5 billion at March 31, 2010 and comprised 26.0% of total loans outstanding. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------|

| ●   | Unemployment |
|---------------------|--------------|

| ●   | Delinquency |
|---------------------|-------------|

| ●   | Trends in loan volume |
|---------------------|-----------------------|

| ●   | Portfolio growth |
|---------------------|------------------|

| ●   | Portfolio concentrations |
|---------------------|--------------------------|

| ●   | Board and loan review oversight |
|---------------------|---------------------------------|

| ●   | Exceptions to policy |
|---------------------|----------------------|

|                                                  |   |      |      |   |         |   |
|-------------------------------------------------------|--------|-----------|-----------|--------|--------------|--------|
| (dollars in thousands)                                |   | March 31, |      |   | December 31, |   |
|                                                  |   | 2010      |      |   | 2009         |   |
|                                                  |   |      |      |   |         |   |
| Nonperforming loans                                   |   | $         | 120,368   |   |         | $      | 125,786 |   |
| Nonperforming loans to total loans                    |   |      | 2.03      | %      |         |   | 2.09 | % |
| Delinquent loans                                      |   | $         | 29,240    |   |         | $      | 25,464 |   |
| Delinquent loans to total loans                       |   |      | 0.49      | %      |         |   | 0.42 | % |
| Classified loans                                      |   | $         | 532,048   |   |         | $      | 501,485 |   |
| Classified loans to total loans                       |   |      | 8.99      | %      |         |   | 8.32 | % |
| Tier 1 capital and ALLL                               |   | $         | 965,221   |   |         | $      | 955,489 |   |
| Classified loans to Tier 1 capital and ALLL           |   |      | 55.12     | %      |         |   | 52.45 | % |
| Total loans and leases, including loans held for sale |   | $         | 5,915,219 |   |         | $      | 6,024,500 |   |
|                                                  |   |      |      |   |         |   |   |   |

----

|                                                       |   | March 31, |      |   | December 31, |   |
|------------------------------------------------------------|--------|-----------|-----------|--------|--------------|--------|
| (dollars in thousands)                                     |   | 2010      |      |   | 2009         |   |
| Nonaccrual loans and leases                                |   | $         | 111,064   |   |         | $      | 122,516 |   |
| Restructured loans                                         |   |      | 6,653     |   |         |   | 576 |   |
|     Impaired and restructured loans    |   |      | 117,717   |   |         |   | 123,092 |   |
| Loans past due 90 or more days as to interest or principal |   |      | 2,651     |   |         |   | 2,694 |   |
|    Total non-performing loans               |   |      | 120,368   |   |         |   | 125,786 |   |
| Other real estate owned and other repossessed assets       |   |      | 2,386     |   |         |   | 4,208 |   |
|    Total non-performing assets              |   | $         | 122,754   |   |         | $      | 129,994 |   |
|                                                       |   |      |      |   |         |   |   |   |
| Total loans and leases, including loans held for sale      |   | $         | 5,915,219 |   |         | $      | 6,024,500 |   |
|                                                       |   |      |      |   |         |   |   |   |
| Average total loans and leases                             |   | $         | 5,985,553 |   |         | $      | 6,286,831 |   |
|                                                       |   |      |      |   |         |   |   |   |
| Allowance for loan and lease losses                        |   | $         | 153,850   |   |         | $      | 146,271 |   |
|                                                       |   |      |      |   |         |   |   |   |
| Allowance for loan and lease losses to:                    |   |      |      |   |         |   |   |   |
|    Non-performing assets                    |   |      | 125       | %      |         |   | 113 | % |
|    Non-performing loans                     |   |      | 128       | %      |         |   | 116 | % |
|    Total loans and leases                   |   |      | 2.60      | %      |         |   | 2.43 | % |
|    Average total loans and leases           |   |      | 2.57      | %      |         |   | 2.33 | % |
|                                                       |   |      |      |   |         |   |   |   |

| (dollars in thousands)                                 |   | March 31, |    |   | December 31, |   |
|--------------------------------------------------------|--------|-----------|---------|--------|--------------|--------|
|                                                   |   | 2010      |    |   | 2009         |   |
| Commercial, Financial and Agricultural                 |   | $         | 38,455  |   |         | $      | 40,618 |   |
| Real Estate-Permanent                                  |   |      | 14,823  |   |         |   | 19,277 |   |
| Real Estate-Construction                               |   |      | 40,622  |   |         |   | 46,832 |   |
| Leases                                                 |   |      | 580     |   |         |   | 396 |   |
| Residential Mortgages                                  |   |      | 18,368  |   |         |   | 12,800 |   |
| Consumer                                               |   |      | 6,691   |   |         |   | 6,842 |   |
| Loans Past Due 90+Days                                 |   |      | 2,651   |   |         |   | 2,694 |   |
| Total Other Repossessed Assets                         |   |      | 564     |   |         |   | 535 |   |
| Total Non-performing Assets + Loans 90 Days Past Due   |   | $         | 122,754 |   |         | $      | 129,994 |   |
|                                                   |   |      |    |   |         |   |   |   |
| (1) Based upon the Company's internal classifications. |   |      |    |   |         |   |   |   |

----

| (dollars in thousands)                                                                                       |   | March 31, |   |   | December 31, |   |   | March 31, |   |
|--------------------------------------------------------------------------------------------------------------|--------|-----------|--------|--------|--------------|--------|--------|-----------|--------|
|                                                                                                         |   | 2010      |   |   | 2009         |   |   | 2009      |   |
| Commercial, Financial and Agricultural                                                                       |   | $         | 2,162  |   |         | $      | 11,529 |      |   | $ | 6,597 |   |
| Real Estate-Permanent                                                                                        |   |      | 359    |   |         |   | 8,522  |      |   |   | (6 | ) |
| Real Estate-Construction                                                                                     |   |      | 18,427 |   |         |   | 3,493  |      |   |   | 1,234 |   |
| Leases                                                                                                       |   |      | 98     |   |         |   | 38     |      |   |   | 88 |   |
| Residential Mortgages                                                                                        |   |      | 2,700  |   |         |   | 1,089  |      |   |   | 565 |   |
| Consumer                                                                                                     |   |      | 1,086  |   |         |   | 1,322  |      |   |   | 6,633 |   |
| Overdraft                                                                                                    |   |      | 89     |   |         |   | 226    |      |   |   | 147 |   |
| Net Loans Charged-off                                                                                        |   | $         | 24,921 |   |         | $      | 26,219 |      |   | $ | 15,258 |   |
|                                                                                                         |   |      |   |   |         |   |   |      |   |   |   |   |
| Net charge-offs (annualized) to:                                                                             |   |      |   |   |         |   |   |      |   |   |   |   |
| Total loans and leases                                                                                       |   |      | 1.71   | %      |         |   | 1.73   | %         |   |   | 0.96 | % |
| Average total loans and leases                                                                               |   |      | 1.69   | %      |         |   | 1.69   | %         |   |   | 0.96 | % |
| Allowance for loan and lease losses                                                                          |   |      | 65.69  | %      |         |   | 71.12  | %         |   |   | 70.70 | % |
|                                                                                                         |   |      |   |   |         |   |   |      |   |   |   |   |
|         (1) Based upon the Company’s internal classifications. |   |

| ●   | Non-performing real estate loans decreased 16.1%, or $10.7 million from December 31, 2009. Charge-offs in real-estate loans totaled $18.8 million during the quarter. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Non-performing C&I loans declined 5.33% or $2.1 million. Charge-offs in C&I loans totaled   $2.1 million during quarter. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Non-performing residential mortgages increased $5.6 million, to $18.3 million, primarily due to $6.7 million of residential mortgage modifications. Residential mortgage charge-offs were $2.7 million for the first quarter of 2010. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                    |   | For the period ended |    |
|-------------------------|--------|----------------------|---------|
| (dollars in thousands)  |   | March 31,            |    |
|                    |   | 2010                 |    |   | 2009 |   |
| Beginning Allowance     |   | $                    | 146,271 |   |   | $ | 84,006 |   |
| Provision for loan loss |   |                 | 32,500  |   |   |   | 17,525 |   |
| Recoveries              |   |                 | 2,561   |   |   |   | 786 |   |
| Chargeoffs              |   |                 | (27,482 | ) |   |   | (16,044 | ) |
| Net Chargeoffs          |   |                 | (24,921 | ) |   |   | (15,258 | ) |
| Ending Allowance        |   | $                    | 153,850 |   |   | $ | 86,273 |   |
|                    |   |                 |    |   |   |   |   |   |

----

|                                      |   | March 31, |    |   | December 31, |   |
|-------------------------------------------|--------|-----------|---------|--------|--------------|--------|
| (dollars in thousands)                    |   | 2010      |    |   | 2009         |   |
|                                      |   |      |    |   |         |   |
| Specific reserves                         |   | $         | 14,482  |   |         | $      | 12,810 |   |
| Allocated reserves                        |   |      | 132,797 |   |         |   | 129,700 |   |
| Unallocated reserves                      |   |      | 6,571   |   |         |   | 3,761 |   |
| Total Allowance for Loan and Lease Losses |   | $         | 153,850 |   |         | $      | 146,271 |   |
|                                      |   |      |    |   |         |   |   |   |

| ●   | Non-interest bearing deposits increased $46.8 million, or 6.2%, to $800 million at March 31, 2010 from $754 million at December 31, 2009. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Overall, core deposits decreased $54.5 million during the first quarter of 2010, from $4.1 billion at December 31, 2009. The decline was due to a decrease in NOW accounts of $170 million to $1.1 billion at March 31, 2010, which was offset by increases to money market of $49.5 million, savings of $18.8 million in addition to the previously discussed increase to non-interest bearing deposits. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ●   | Certificates of deposits decreased $273 million, or 10.5% from $2.6 billion at December 31, 2009 to $2.3 billion at March 31, 2010. The decline was primarily in CDs with balances greater than $100 thousand which decreased $231 million, or 23% to $773 million at March 31, 2010. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Securities sold under repurchase agreements and federal funds purchased totaled $759 million at March 31, 2010, and increased $21.5 million, or 2.9%, from $737 million at December 31, 2009 due to additional borrowings under securities repurchase agreements due to an increase in cash management repurchase agreements with new customers. |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Short-term borrowings are comprised of treasury, tax and loan payments and increased $0.3 from $6.9 million at December 31, 2009 to $7.2 million at March 31, 2010. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | FHLB advances decreased $13.0 million, or 1.7%, to $744 million at March 31, 2010 from $757 million at December 31, 2009, due to advances that matured during the quarter. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Subordinated debentures increased $7.3 million from $132 million at December 31, 2009 to $140 million at March 31, 2010, due to an increase in fair value of the $65.2 million (par) of the subordinated debentures accounted for at fair value. This increase was recorded as a reduction to non-interest income in the statement of operations for the three months ended March 31, 2010. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Net income of $3.9 million; |
|---------------------|-----------------------------|

| ●   | Cash dividends on preferred stock of $1.9 million; |
|---------------------|----------------------------------------------------|

| ●   | Cash dividends on common stock of $1.3 million; and |
|---------------------|-----------------------------------------------------|

| ●   | An increase to accumulated other comprehensive loss of $0.3 million. |
|---------------------|----------------------------------------------------------------------|

| ●   | $1.6 million resulting from the pension plan curtailment, which reclassified the unrecognized prior service cost (gain) out of AOCI and into the statement of operations; |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | $0.1 million from an increase in the fair market value of the effective portion of cash flow hedges; and |
|---------------------|----------------------------------------------------------------------------------------------------------|

| ●   | Increase to the fair market value of investment securities available for sale of $1.4 million, which offset the two items above. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------|

----

|                                             |   | 2010    |      |   | 2009     |   |
|--------------------------------------------------|--------|---------|-----------|--------|----------|--------|
| (dollars in thousands)                           |   | Average |      |   |     |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
|                                             |   | Balance |      |   | Interest |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| INTEREST EARNING ASSETS:                         |   |    |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest earning deposits at banks & FF sold |   | $       | 411,100   |   |     | $      | 247 |   |   |   | 0.24 | % |   | $ | 92,227 |   |   | $ | 33 |   |   |   | 0.14 | % |
|                                             |   |    |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury                                    |   |    | 145,864   |   |     |   | 156 |   |   |   | 0.43 | % |   |   | 20,133 |   |   |   | 3 |   |   |   | 0.06 | % |
| U.S. Government agencies                         |   |    | 1,143,672 |   |     |   | 10,319 |   |   |   | 3.66 | % |   |   | 955,655 |   |   |   | 10,587 |   |   |   | 4.49 | % |
| State and municipal                              |   |    | 799,040   |   |     |   | 13,457 |   |   |   | 6.83 | % |   |   | 822,801 |   |   |   | 14,240 |   |   |   | 7.02 | % |
| Other bonds and securities                       |   |    | 96,310    |   |     |   | 623 |   |   |   | 2.62 | % |   |   | 148,179 |   |   |   | 1,024 |   |   |   | 2.80 | % |
| Total investments                                |   |    | 2,184,886 |   |     |   | 24,555 |   |   |   | 4.56 | % |   |   | 1,946,768 |   |   |   | 25,854 |   |   |   | 5.39 | % |
|                                             |   |    |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial loans and lease financing             |   |    | 4,033,790 |   |     |   | 52,551 |   |   |   | 5.28 | % |   |   | 4,336,368 |   |   |   | 56,018 |   |   |   | 5.24 | % |
| Installment loans                                |   |    | 962,303   |   |     |   | 12,518 |   |   |   | 5.28 | % |   |   | 975,259 |   |   |   | 13,735 |   |   |   | 5.71 | % |
| Mortgage loans                                   |   |    | 989,460   |   |     |   | 14,434 |   |   |   | 5.92 | % |   |   | 1,055,232 |   |   |   | 16,117 |   |   |   | 6.19 | % |
| Total loans and leases                           |   |    | 5,985,553 |   |     |   | 79,503 |   |   |   | 5.39 | % |   |   | 6,366,859 |   |   |   | 85,870 |   |   |   | 5.47 | % |
| Total earning assets                             |   |    | 8,581,539 |   |     |   | 104,305 |   |   |   | 4.93 | % |   |   | 8,405,854 |   |   |   | 111,757 |   |   |   | 5.39 | % |
| Allowance for loan and lease losses              |   |    | (160,879  | )      |     |   |   |   |   |   |   |   |   |   | (89,148 | ) |   |   |   |   |   |   |   |   |
| Non-interest earning assets                      |   |    | 916,673   |   |     |   |   |   |   |   |   |   |   |   | 1,144,523 |   |   |   |   |   |   |   |   |   |
|                                             |   |    |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                     |   |    | 9,337,333 |   |     |   |   |   |   |   |   |   |   |   | 9,461,229 |   |   |   |   |   |   |   |   |   |
|                                             |   |    |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST BEARING LIABILITIES:                    |   |    |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing deposits                        |   |    | 5,824,492 |   |     |   | 18,281 |   |   |   | 1.27 | % |   | $ | 5,738,813 |   |   | $ | 31,664 |   |   |   | 2.24 | % |
|                                             |   |    |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities sold under repurchase agreements      |   |    |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and federal funds purchased                      |   |    | 742,089   |   |     |   | 2,874 |   |   |   | 1.57 | % |   |   | 662,694 |   |   |   | 3,615 |   |   |   | 2.21 | % |
| Short-term borrowings                            |   |    | 7,024     |   |     |   | - |   |   |   | 0.00 | % |   |   | 7,717 |   |   |   | - |   |   |   | 0.00 | % |
| Long-term borrowings                             |   |    | 885,293   |   |     |   | 10,423 |   |   |   | 4.78 | % |   |   | 1,072,044 |   |   |   | 12,042 |   |   |   | 4.56 | % |
| Total interest bearing liabilities               |   |    | 7,458,898 |   |     |   | 31,578 |   |   |   | 1.72 | % |   |   | 7,481,269 |   |   |   | 47,321 |   |   |   | 2.57 | % |
| Non-interest bearing deposits                    |   |    | 767,398   |   |     |   |   |   |   |   |   |   |   |   | 709,490 |   |   |   |   |   |   |   |   |   |
| Other non-interest bearing liabilities           |   |    | 35,985    |   |     |   |   |   |   |   |   |   |   |   | 93,952 |   |   |   |   |   |   |   |   |   |
|                                             |   |    |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total liabilities                                |   |    | 8,262,281 |   |     |   |   |   |   |   |   |   |   |   | 8,284,711 |   |   |   |   |   |   |   |   |   |
| Equity capital                                   |   |    | 1,075,052 |   |     |   |   |   |   |   |   |   |   |   | 1,176,518 |   |   |   |   |   |   |   |   |   |
| Total liabilities and equity capital             |   | $       | 9,337,333 |   |     |   |   |   |   |   |   |   |   | $ | 9,461,229 |   |   |   |   |   |   |   |   |   |
| INTEREST RATE MARGIN                             |   |    |      |   |     |   | 72,727 |   |   |   | 3.44 | % |   |   |   |   |   |   | 64,436 |   |   |   | 3.11 | % |
| Tax equivalent interest                          |   |    |      |   |     |   | 5,468 |   |   |   | 0.26 | % |   |   |   |   |   |   | 5,795 |   |   |   | 0.28 | % |
| Net interest income                              |   |    |      |   |     | $      | 67,259 |   |   |   | 3.18 | % |   |   |   |   |   | $ | 58,641 |   |   |   | 2.83 | % |
|                                             |   |    |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                             |   |    |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| (dollars in thousands)                      | Three Months Ended March 31, |   |
|---------------------------------------------|------------------------------|--------|
|                                        | 2010 over 2009 (1)           |   |
| Increase (decrease) in:                     | Volume                       |   |   | Rate |   |   | Total |   |
| Interest income:                            |                         |   |   |   |   |   |   |   |   |
| Interest earning deposits at banks          |                         | $      | 179 |   |   | $ | 35 |   |   | $ | 214 |   |
| Securities:                                 |                         |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury                               |                         |   | 77 |   |   |   | 76 |   |   |   | 153 |   |
| U.S. Agencies                               |                         |   | 1,884 |   |   |   | (2,152 | ) |   |   | (268 | ) |
| State and municipal                         |                         |   | (405 | ) |   |   | (378 | ) |   |   | (783 | ) |
| Other bonds and securities                  |                         |   | (339 | ) |   |   | (62 | ) |   |   | (401 | ) |
| Total investment securities                 |                         | $      | 1,217 |   |   | $ | (2,516 | ) |   | $ | (1,299 | ) |
| Loans:                                      |                         |   |   |   |   |   |   |   |   |   |   |   |
| Commercial loans and lease financing        |                         |   | (3,938 | ) |   |   | 471 |   |   |   | (3,467 | ) |
| Installment loans                           |                         |   | (180 | ) |   |   | (1,037 | ) |   |   | (1,217 | ) |
| Mortgage loans                              |                         |   | (978 | ) |   |   | (705 | ) |   |   | (1,683 | ) |
| Total loans                                 |                         |   | (5,096 | ) |   |   | (1,271 | ) |   |   | (6,367 | ) |
| Total interest income                       |                         | $      | (3,700 | ) |   |   | (3,752 | ) |   | $ | (7,452 | ) |
|                                        |                         |   |   |   |   |   |   |   |   |   |   |   |
| Interest Expense:                           |                         |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing deposits                   |                         | $      | 466 |   |   | $ | (13,849 | ) |   | $ | (13,383 | ) |
| Securities sold under repurchase            |                         |   |   |   |   |   |   |   |   |   |   |   |
| agreements and federal funds purchased      |                         |   | 395 |   |   |   | (1,136 | ) |   |   | (741 | ) |
| Short-term borrowings                       |                         |   | - |   |   |   | - |   |   |   | - |   |
| Long-term borrowings                        |                         |   | (2,177 | ) |   |   | 558 |   |   |   | (1,619 | ) |
| Total borrowed funds                        |                         |   | (1,782 | ) |   |   | (578 | ) |   |   | (2,360 | ) |
| Total interest expense                      |                         |   | (1,316 | ) |   |   | (14,427 | ) |   |   | (15,743 | ) |
| Increase (decrease) in interest rate margin |                         | $      | (2,385 | ) |   | $ | 10,676 |   |   | $ | 8,291 |   |
|                                        |                         |   |   |   |   |   |   |   |   |   |   |   |

----

| ●   | Cash management and electronic banking fees increased 14%, or $0.5 million to $4.2 million due to an increase in the number of cash management customers and improvements in the percentage of customers with debit cards. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Wealth management income increased 7.3%, or $0.5 million, to $7.1 million which resulted from appreciation of the broad equity markets since the first quarter of 2009. Exclusive of the sale of Vantage, wealth management income increased 23% compared to the first quarter of 2009. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Insurance commissions and fees decreased $0.2 million, or 4.7% to $3.8 million due to continued “softness” in the insurance industry resulting from economic conditions which affected commercial, property and casualty, and health insurance clients. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ●   | Service charges on deposit accounts decreased $0.5 million, or 7.9% to $5.3 million, due to declines in overdraft volume, resulting from improved customer saving levels from the first quarter of 2009. This trend has resulted in an increase in the average balance per account. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                      |   |   |      |   | Payments Due by Period: |   |
|-----------------------------------------------------------|--------|--------|-----------|--------|-------------------------|--------|
|                                                      |   |   |      |   |                    |   |   | After one |   |   | After three |   |   |   |   |
|                                                      |   |   |      |   | Less Than               |   |   | year to |   |   | years to |   |   | More Than |   |
| (dollars in thousands)                                    |   | Total  |      |   | One Year                |   |   | three years |   |   | five years |   |   | 5 Years |   |
|                                                      |   |   |      |   |                    |   |   |   |   |   |   |   |   |   |   |
| Minimum annual rentals or non-cancelable operating leases |   | $      | 40,696    |   |                    | $      | 6,298 |   |   | $ | 9,570 |   |   | $ | 6,756 |   |   | $ | 18,072 |   |
| Remaining contractual maturities of time deposits         |   |   | 2,337,837 |   |                    |   | 1,592,205 |   |   |   | 575,708 |   |   |   | 168,496 |   |   |   | 1,428 |   |
| FHLB advances                                             |   |   | 743,781   |   |                    |   | 114,106 |   |   |   | 105,983 |   |   |   | 59,500 |   |   |   | 464,192 |   |
| Subordinated debentures                                   |   |   | 138,250   |   |                    |   | - |   |   |   | - |   |   |   | - |   |   |   | 138,250 |   |
| Dividends on Preferred Stock*                             |   |   | 95,625    |   |                    |   | 7,500 |   |   |   | 15,000 |   |   |   | 22,500 |   |   |   | 50,625 |   |
| Total                                                     |   | $      | 3,356,189 |   |                    | $      | 1,720,109 |   |   | $ | 706,261 |   |   | $ | 257,252 |   |   | $ | 672,567 |   |
|                                                      |   |   |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *Term is unlimited; assumed 10 year term from inception.  |   |   |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| ●   | $136 million of investment security purchases |
|---------------------|-----------------------------------------------|

| ●   | $273 million reduction of certificates of deposit |
|---------------------|---------------------------------------------------|

| ●   | $12.6 million of payments for maturing of FHLB advances |
|---------------------|---------------------------------------------------------|

| ●   | $1.9 million of dividends paid on preferred stock and $1.3 million of dividends paid on common stock |
|---------------------|------------------------------------------------------------------------------------------------------|

----

| ●   | $73.7 million of investment securities maturities |
|---------------------|---------------------------------------------------|

| ●   | $68.6 million net maturities and repayments from loans and leases held for investment |
|---------------------|---------------------------------------------------------------------------------------|

| ●   | $21.5 million of cash from borrowings under securities repurchase agreements with customers |
|---------------------|---------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | Tier 1 Capital to    |   |   | Tier 1 Capital to Risk- |   |   | Total Capital to Risk- |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|--------|--------|-------------------------|--------|--------|------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | Average Assets Ratio |   |   | Weighted Assets Ratio   |   |   | Weighted Assets Ratio  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | March 31,            |   |   | Dec. 31,                |   |   | March 31,              |   |   | Dec. 31, |   |   | March 31, |   |   | Dec. 31, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | 2010                 |   |   | 2009                    |   |   | 2010                   |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                 |   |   |                    |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| The Company                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                 | 9.08   | %      |                    |   | 8.50   | %                      |   |   | 12.90 | % |   |   | 10.65 | % |   |   | 14.17 | % |   |   | 11.85 | % |
| National Penn Bank                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                 | 8.17   | %      |                    |   | 7.90   | %                      |   |   | 11.57 | % |   |   | 10.00 | % |   |   | 12.83 | % |   |   | 11.19 | % |
| Christiana                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                 | 8.57   | %      |                    |   | 10.20  | %                      |   |   | 14.80 | % |   |   | 11.82 | % |   |   | 16.06 | % |   |   | 13.07 | % |
| "Well Capitalized" institution                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                 | 5.00   | %      |                    |   | 5.00   | %                      |   |   | 6.00 | % |   |   | 6.00 | % |   |   | 10.00 | % |   |   | 10.00 | % |
|   under banking regulations                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                 |   |   |                    |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                 |   |   |                    |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Note: Beginning at September 30, 2009, National Penn and National Penn Bank eliminated from inclusion in their regulatory capital the net amount of deferred tax assets, since the regulations are more restrictive than GAAP as it related to the usage and recognition of the deferred tax asset. As of March 31, 2010, the net deferred tax asset continues to be excluded from the computation of National Penn and National Penn Bank's capital. |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                 |   |   |                    |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                   |   |   |      |   |      |   |      | After one   |   |   | After three |   |   |      |   |
|------------------------|--------|--------|-----------|--------|-----------|--------|-----------|-------------|--------|--------|-------------|--------|--------|-----------|--------|
|                   |   |   |      |   | Less Than |   |      | year to     |   |   | years to    |   |   | More Than |   |
| (dollars in thousands) |   | Total  |      |   | One Year  |   |      | three years |   |   | five years  |   |   | 5 Years   |   |
|                   |   |   |      |   |      |   |      |        |   |   |        |   |   |      |   |
| Loan commitments       |   | $      | 1,667,110 |   |      | $      | 961,382   |        |   | $      | 164,154     |   |   | $         | 33,207 |   | $  |   | 508,367 |   |
| Letters of credit      |   |   | 171,510   |   |      |   | 112,775   |        |   |   | 54,710      |   |   |      | 1,336  |   |   |   | 2,689 |   |
| Total                  |   | $      | 1,838,620 |   |      | $      | 1,074,157 |        |   | $      | 218,864     |   |   | $         | 34,543 |   |   | $ | 511,056 |   |
|                   |   |   |      |   |      |   |      |        |   |   |        |   |   |      |   |   |   |   |   |   |

----

| ●   | Timing differences between contractual maturities of assets and liabilities (“repricing gap”). |
|---------------------|------------------------------------------------------------------------------------------------------------|

| ●   | Risk that assets will repay or customers withdraw prior to contractual maturity (“prepayments”). |
|---------------------|--------------------------------------------------------------------------------------------------------------|

| ●   | Changes in yields and the shape of the yield curve. |
|---------------------|-----------------------------------------------------|

| ●   | Timing of changes in interest rates - the time period it takes for one interest rate index to change compared to another, given changes in market conditions (“optionality”). |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Changes to interest rates offered on products, |
|---------------------|------------------------------------------------|

| ●   | Changes to maturity terms offered on products, |
|---------------------|------------------------------------------------|

| ●   | Changes types of products offered, and/or |
|---------------------|-------------------------------------------|

| ●   | Use of wholesale products such as advances from the FHLB or interest rate swaps. |
|---------------------|----------------------------------------------------------------------------------|

----

|                                           |   | Repricing Periods |       |
|------------------------------------------------|--------|-------------------|------------|
|                                           |   |              |       |   | Three Months |   |   | One Year |   |   |   |   |
|                                           |   | Within            |       |   | Through |   |   | Through |   |   | Over |   |
| (dollars in thousands)                         |   | Three Months      |       |   | One Year |   |   | Five Years |   |   | 5 Years |   |
| Interest-earning assets:                       |   |              |       |   |   |   |   |   |   |   |   |   |
| Interest bearing deposits at banks             |   | $                 | 239,757    |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Federal funds sold                             |   |              | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Investment securities and other securities     |   |              | 183,124    |   |   |   | 458,771 |   |   |   | 689,461 |   |   |   | 912,697 |   |
| Loans and Leases (1)                           |   |              | 2,561,422  |   |   |   | 881,062 |   |   |   | 2,029,921 |   |   |   | 442,814 |   |
| Total interest-earning assets                  |   | $                 | 2,984,303  |   |   | $ | 1,339,833 |   |   | $ | 2,719,382 |   |   | $ | 1,355,511 |   |
| Cumulative total interest-earning assets       |   | $                 | 2,984,303  |   |   | $ | 4,324,136 |   |   | $ | 7,043,518 |   |   | $ | 8,399,029 |   |
|                                           |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and Equity                         |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing deposits                      |   | $                 | 3,674,096  |   |   | $ | 1,191,170 |   |   | $ | 744,203 |   |   | $ | 1,428 |   |
| Borrowed funds                                 |   |              | 637,611    |   |   |   | 78,078 |   |   |   | 331,497 |   |   |   | 462,588 |   |
| Subordinated debt                              |   |              | 77,321     |   |   |   | - |   |   |   | - |   |   |   | 62,347 |   |
| Total interest-bearing liabilities             |   | $                 | 4,389,028  |   |   | $ | 1,269,248 |   |   | $ | 1,075,700 |   |   | $ | 526,363 |   |
| Cumulative total interest-bearing liabilities  |   | $                 | 4,389,028  |   |   | $ | 5,658,276 |   |   | $ | 6,733,976 |   |   | $ | 7,260,339 |   |
|                                           |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets less interest -bearing |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| liabilities                                    |   | $                 | (1,404,725 | ) |   | $ | 70,584 |   |   | $ | 1,643,682 |   |   | $ | 829,148 |   |
|                                           |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cumulative interest-rate sensitivity gap       |   | $                 | (1,404,725 | ) |   | $ | (1,334,141 | ) |   | $ | 309,542 |   |   | $ | 1,138,690 |   |
|                                           |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |

|   | (1)    | Adjustable rate loans are included in the period in which interest rates are next scheduled to adjust rather than in the      |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------|
|   |   | period in which they are due.  Fixed rate loans are included in the period in which they are scheduled to be repaid |
|   |   | and are adjusted to take into account estimated prepayments based upon assumptions estimating the expected                    |
|   |   | prepayments in the prevailing interest rate environment.  The table assumes prepayments and scheduled principal     |
|   |   | amortization of fixed rate loans and mortgage-backed securities, and assumes that adjustable-rate mortgages will              |   |   |   |
|   |   | reprice at contractual repricing intervals.  There has been no adjustment for the impact of future commitments and  |
|   |   | loans in process.                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (dollars in thousands)       |   |   |    |   |      |   |
|------------------------------|--------|--------|---------|--------|-----------|--------|
|                         |   |   |    |   | % Change  |   |
| EVE                          |   |   |    |   | from      |   |
| Change in Interest Rate      |   | Amount |    |   | Base Case |   |
| Rate Scenario                |   |   |    |   |      |   |
| + 300 basis point rate shock |   | $      | 693,398 |   |      |   | -17.69 | % |
| + 200 basis point rate shock |   |   | 743,453 |   |      |   | -11.75 | % |
| + 100 basis point rate shock |   |   | 792,908 |   |      |   | -5.88 | % |
|    base case  |   |   | 842,416 |   |      |   | 0.00 | % |
| - 100 basis point rate shock |   |   | 871,179 |   |      |   | 3.41 | % |
| - 200 basis point rate shock |   |   | 810,746 |   |      |   | -3.76 | % |
| - 300 basis point rate shock |   |   | 733,785 |   |      |   | -12.90 | % |
|                         |   |   |    |   |      |   |   |   |

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| (dollars in thousands) |   |   |                          |    |   |           |   |   |   |   |   |   |   |
|------------------------|--------|--------|-------------------------------|---------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|
|                   |   |   |                          |    |   |           |   |   |   |   |   |   |   |
| Change in              |   |   | Change in Net Interest Income |    |
| Interest Rates         |   |   | March 31, 2010                |    |   | March 31, 2009 |   |
| (in basis points)      |   |   |                          |    |   |           |   |   |   |   |   |   |   |
|  + 300            |   |   | $                             | 20,157  |   |           |   | 7.12   | %      |   | $      | (2,624 | )      |   |   | -0.99 | % |
|  + 200            |   |   |                          | 12,416  |   |           |   | 4.38   | %      |   |   | (613   | )      |   |   | -0.23 | % |
|  + 100            |   |   |                          | 5,328   |   |           |   | 1.88   | %      |   |   | 279    |   |   |   | 0.11 | % |
|  - 100            |   |   |                          | (6,884  | )      |           |   | -2.43  | %      |   |   | 1,918  |   |   |   | 0.73 | % |
|  - 200            |   |   |                          | (18,600 | )      |           |   | -6.57  | %      |   |   | 2,148  |   |   |   | 0.81 | % |
|  - 300            |   |   |                          | (25,440 | )      |           |   | -8.98  | %      |   |   | 475    |   |   |   | 0.18 | % |
|                   |   |   |                          |    |   |           |   |   |   |   |   |   |   |   |   |   |   |

Item 4

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Item 1.  

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|    | ● | National Penn’s branding and marketing initiatives may not be effective in building name recognition and customer awareness of National Penn’s products and services.                                                                                                                                                                                     |
|--------------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |    |                                                                                                                                                                                                                                                                                                                                                                  |
|         | ● | National Penn may be unable to differentiate itself from its competitors by a higher level of customer service, as intended by its business strategy and other marketing initiatives.                                                                                                                                                                                 |
|         |    |                                                                                                                                                                                                                                                                                                                                                                  |
|         | ● | Expansion of National Penn’s product and service offerings may take longer, and may meet with more effective competitive resistance from others already offering such products and services, than expected.  Additionally, new product development by new and existing competitors may be more effective, and take place more quickly, than expected. |
|         |    |                                                                                                                                                                                                                                                                                                                                                                  |

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|   | ● | National Penn may be unable to attract, motivate, and/or retain key executives and other key personnel due to intense competition for such persons, National Penn’s cost saving strategies, increased governmental oversight or otherwise.                                                                                                                                              |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                          |
|   | ● | Growth and profitability of National Penn’s non-interest income or fee income may be less than expected, particularly as a result of current financial market conditions.                                                                                                                                                                                                               |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                          |
|   | ● | General economic or business conditions, either nationally or in the regions in which National Penn does business, may continue to deteriorate or be more prolonged than expected, resulting in, among other things, a deterioration in credit quality, a reduced demand for credit, or a decision by National Penn to reevaluate staffing levels or to divest one or more lines of business. |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                          |
|   | ● | In the current environment of increased investor activism, including hedge fund investment policies and practices, shareholder concerns or actions may require increased management/board attention, efforts and commitments, which could require a shift in focus from business development and operations.                                                                                  |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                          |
|   | ● | Current stresses in the financial markets may inhibit National Penn's ability to access the capital markets or obtain financing on favorable terms.                                                                                                                                                                                                                                 |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                          |
|   | ● | Repurchase obligations with respect to real estate mortgages sold in the secondary market could adversely affect National Penn’s earnings.                                                                                                                                                                                                                                              |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                          |
|   | ● | Changes in consumer spending and savings habits could adversely affect National Penn’s business.                                                                                                                                                                                                                                                                                        |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                          |
|   | ● | Negative publicity with respect to any National Penn product or service, employee, director or other associated individual or entity whether legally justified or not, could adversely affect National Penn’s reputation and business.                                                                                                                                                  |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                          |
|   | ● | National Penn may be unable to successfully manage the foregoing and other risks and to achieve its current short-term and long-term business plans and objectives.                                                                                                                                                                                                                           |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                          |

Item 2. 

| 3.1    | Articles of Incorporation, as amended, of National Penn Bancshares, Inc. (Incorporated by reference to Exhibit 3.1 to National Penn’s Report on Form 8-K dated April 24, 2009 as filed on April 24, 2009.) |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                             |

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| 3.2    | Bylaws, as amended, of National Penn Bancshares, Inc. (Incorporated by reference to  Exhibit 3.1 to National Penn’s Report on Form 8-K dated March 24, 2010, as filed on  March 29, 2010.                                                                                 |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                |
| 10.1   | Letter Agreement, dated January 27, 2010, among National Penn Bancshares, Inc., National Penn Bank and Glenn E. Moyer (Incorporated by reference to Exhibit 10.1 to National Penn’s Report on Form 8-K dated January 27, 2010, as filed on February 1, 2010).                                 |
|   |                                                                                                                                                                                                                                                                                                |
| 10.2   | Amendment to Employment Agreement, dated January 27, 2010, among National Penn Bancshares, Inc., National Penn Bank and Scott V. Fainor (Incorporated by reference to Exhibit 10.2 to National Penn’s Report on Form 8-K dated January 27, 2010, as filed on February 1, 2010).               |
|   |                                                                                                                                                                                                                                                                                                |
| 10.3   | Executive Agreement, dated January 27, 2010, among National Penn Bancshares, Inc., National Penn Bank and Keene S. Turner (Incorporated by reference to Exhibit 10.3 to National Penn’s Report on Form 8-K dated January 27, 2010, as filed on February 1, 2010).                        |
| 10.4   | Consulting and Noncompetition Agreement, dated January 27, 2010, by and between National Penn Bancshares, Inc. and Michael R. Reinhard. (Incorporated by reference to Exhibit 10.4 to National Penn’s Report on Form 8-K dated January 27, 2010, as filed on February 1, 2010).               |
|   |                                                                                                                                                                                                                                                                                                |
| 10.5   | 2010 Directors’ Fee Schedule (Incorporated by reference to Exhibit 10.5 to National Penn’s Report on Form 8-K dated January 27, 2010, as filed on February 1, 2010).                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                |
| 10.6   | Restricted Stock Agreement between National Penn Bancshares, Inc. and Scott V. Fainor, dated January 28, 2010.  (Incorporated by reference to Exhibit 10.1 to National Penn’s Report on Form  8-K dated January 28, 2010, as filed on February 3, 2010).                  |
|   |                                                                                                                                                                                                                                                                                                |
| 10.7   | Non-Qualified Stock Option Agreement between National Penn Bancshares, Inc. and    Keene S. Turner, dated February 1, 2010. (Incorporated by reference to Exhibit 10.2 to National Penn’s Report on Form 8-K dated January 28, 2010, as filed on February 3, 2010).  |
| 10.8   | Form of Restricted Stock Agreement between National Penn Bancshares, Inc. and Michael J.Hughes.  (Incorporated by reference to Exhibit 10.1 to National Penn’s Report on Form 8-K dated February 1, 2010, as filed on February 4, 2010).                                            |
|   |                                                                                                                                                                                                                                                                                                |
| 10.9   | Form of Restricted Stock Agreement between National Penn Bancshares, Inc. and Sandra L. Bodnyk.  (Incorporated by reference to Exhibit 10.2 to National Penn’s Report on Form 8-K dated February 1, 2010, as filed on February 4, 2010).                                       |
| 10.10  | Form of Non-Employee Directors Restricted Stock Unit Agreement. (Incorporated by reference to Exhibit 10.1 to National Penn’s Report on Form 8-K dated February 1, 2010, as filed on     February 5, 2010).                                                          |
|   |                                                                                                                                                                                                                                                                                                |
| 31.1   | Certification of President and Chief Executive Officer of National Penn Bancshares, Inc., pursuant to Commission Rule 13a-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                |
| 31.2   | Certification of Chief Financial Officer of National Penn Bancshares, Inc., pursuant to Commission Rule 13a-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                           |
| 32.1   | Certification of President and Chief Executive Officer of National Penn Bancshares, Inc., pursuant to Commission Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuantto Section 906 of the Sarbanes-Oxley Act of 2002.  (Furnished, not filed.)                                 |
|   |                                                                                                                                                                                                                                                                                                |
| 32.2   | Certification of  Chief Financial Officer of National Penn Bancshares, Inc., pursuant to Commission Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  (Furnished, not filed.)                              |

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SIGNATURES

|   |               | NATIONAL PENN BANCSHARES, INC. |
|--------|--------------------|--------------------------------|
|   |               | (Registrant)                   |
|   |               |                           |
| Date:  | May 10, 2010       |                           | By: | /s/ Scott V. Fainor                                                                |
|   |               |                           |   | Name: | Scott V. Fainor |
|   |               |                           |   | Title: | President and CEO |
|   |               |                           |   |   |   |
| Date:  |  May 10, 2010 |                           | By: | /s/ Michael J. Hughes                                                          |
|   |               |                           |   | Name: | Michael J. Hughes |
|   |               |                           |   | Title: | Chief Financial Officer |

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