| [X]                       | QUARTERLY                    REPORT PURSUANT TO SECTION 13 OR 15(D) OF                                                                                                                                                                                                                                                                                         |
|----------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                               | THE                    SECURITIES EXCHANGE ACT OF 1934                                                                                                                                                                                                                                                                                                         |
|                                               |                                                                                                                                                                                                                                                                                                                                                           |
|                                               |  For                    the quarterly period ended:   March 31,                    2008                                                                                                                                                                                                                                                    |
|                                               |
|                                               |                                                           OR |
| [   ]      | 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(Address                    of Principal Executive                    Offices) | 19512                                                |
| (Zip                    Code)                                                                                                                                      |

| Registrant’s                    telephone number, including area code: (610)                    367-6001 |
|----------------------------------------------------------------------------------------------------------------|
|                                                                                                           |
| (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  . |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                Indicate                    by check mark whether the Registrant is a large accelerated filer,                    an                    accelerated filer, or a non-accelerated filer.  See definition                    of “accelerated filer and large accelerated filer” in Rule 12b-2 of the                    Exchange Act.)   (Check one):                                                                                                                                     |
| Large                    accelerated filer   X                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Accelerated                    filer ____ | Non-accelerated                    filer ___ |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |
| Indicate                    by check mark whether the registrant is a shell company (as defined                    in                    Rule 12b-2 of the Exchange Act.)  Yes                    ____   No                      X                                                                                                                                                                                                                                                                                                                                                 |
| Indicate                    the number of shares outstanding of each of the issuer’s classes of common                    stock, as of the latest practicable date.                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Class                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                           Outstanding at May 6, 2008 |
| Common                    Stock (no stated par value)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | (No.)                    Shares:  79,481,214 |

----

| Part                I - Financial                Information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Page                    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item                1.  | Financial                Statements                                                                      | 3 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item                2.  | Management’s                Discussion and Analysis of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    | Financial                Condition and Results of Operation | 18 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item                3.  | Quantitative                and Qualitative Disclosures About |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    | Market                Risk                                                                      | 30 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item                4.  | Controls                and                Procedures                                                                      | 30 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    |   |   |
| Part                II - Other                Information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item                1.  | Legal                Proceedings                                                                      | 31 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item                1A. | Risk                Factors | 31 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item                2.  | Unregistered                Sales of Equity Securities |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    | and                Use of                Proceeds                                                                      | 35 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item                3.  | Defaults                Upon Senior                Securities                                                                      | 36 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item                4.  | Submission                of Matters to a Vote of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    | Security                Holders                                                                      | 36 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item                5.  | Other                Information                                                                      | 36 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item                6.  | Exhibits                                                                      | 36 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    |   |   |
| Signatures                                                                                                       | 38                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    |   |   |
| Exhibits                                                                                                         | 39                      |

----

| (dollars                  in                  thousands)                                                                                   |   | March                  31, 2008 |      |   | December                  31,                  2007 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-----------|--------|-----------------------------------------------------|--------|
|                                                                                                                                       |   |                            |      |   |                                                |   |
| ASSETS                                                                                                                                     |   |                            |      |   |                                                |   |
| Cash                  and due from                  banks                                                                                  |   | $                               | 172,135   |   |                                                | $      | 104,292 |   |
| Interest-bearing                  deposits with                  banks                                                                     |   |                            | 29,520    |   |                                                |   | 7,228 |   |
| Federal                  funds                  sold                                                                                       |   |                            | 4,000     |   |                                                |   | -  |   |
|     Total                  cash                  and cash equivalents                                                  |   |                            | 205,655   |   |                                                |   | 111,520 |   |
|                                                                                                                                       |   |                            |      |   |                                                |   |   |   |
| Investment                  securities held to                  maturity                                                                   |   |                            |      |   |                                                |   |   |   |
| (Fair                  value approximates $269,381                  and $247,444 for 2008 and 2007, respectively)                          |   |                            | 271,381   |   |                                                |   | 243,595 |   |
| Investment                  securities available                  for sale, at fair value                                                  |   |                            | 1,669,200 |   |                                                |   | 1,137,426 |   |
| Loans                  and leases held for                  sale                                                                           |   |                            | 5,711     |   |                                                |   | 3,823 |   |
| Loans                  and leases, less allowance                  for loan and lease losses of $81,631 and $54,897                        |   |                            |      |   |                                                |   |   |   |
|     for                  2008                  and 2007, respectively                                                  |   |                            | 5,925,522 |   |                                                |   | 3,816,533 |   |
| Premises                  and equipment,                  net                                                                              |   |                            | 109,746   |   |                                                |   | 61,214 |   |
| Premises                  held for                  sale                                                                                   |   |                            | 3,894     |   |                                                |   | - |   |
| Accrued                  interest                  receivable                                                                              |   |                            | 35,752    |   |                                                |   | 26,430 |   |
| Bank                  owned life                  insurance                                                                                |   |                            | 189,050   |   |                                                |   | 102,407 |   |
| Goodwill                                                                                                                                   |   |                            | 545,484   |   |                                                |   | 261,552 |   |
| Other                  intangible assets,                  net                                                                             |   |                            | 42,139    |   |                                                |   | 16,160 |   |
| Unconsolidated                  investments under                  the equity method                                                       |   |                            | 12,609    |   |                                                |   | 11,490 |   |
| Other                  assets                                                                                                              |   |                            | 91,971    |   |                                                |   | 32,271 |   |
| TOTAL                  ASSETS                                                                                                              |   | $                               | 9,108,114 |   |                                                | $      | 5,824,421 |   |
|                                                                                                                                       |   |                            |      |   |                                                |   |   |   |
| LIABILITIES                                                                                                                                |   |                            |      |   |                                                |   |   |   |
| Deposits                                                                                                                                   |   |                            |      |   |                                                |   |   |   |
| Non-interest                  bearing                  deposits                                                                            |   | $                               | 768,154   |   |                                                | $      | 522,716 |   |
| Interest-bearing                  deposits                                                                                                 |   |                            | 5,335,413 |   |                                                |   | 3,423,447 |   |
| Total                  deposits                                                                                                            |   |                            | 6,103,567 |   |                                                |   | 3,946,163 |   |
|                                                                                                                                       |   |                            |      |   |                                                |   |   |   |
| Securities                  sold under repurchase                  agreements and federal funds purchased                                  |   |                            | 642,733   |   |                                                |   | 484,223 |   |
| Short-term                  borrowings                                                                                                     |   |                            | 35,848    |   |                                                |   | 12,800 |   |
| Long-term                  borrowings                                                                                                      |   |                            | 1,020,393 |   |                                                |   | 617,183 |   |
| Subordinated                  debentures (Fair                  value approximates $63,688 and $62,676 for 2008 and                  2007) |   |                            | 141,009   |   |                                                |   | 139,997 |   |
| Accrued                  interest payable and other                  liabilities                                                           |   |                            | 118,527   |   |                                                |   | 60,108 |   |
| TOTAL                  LIABILITIES                                                                                                         |   |                            | 8,062,077 |   |                                                |   | 5,260,474 |   |
|                                                                                                                                       |   |                            |      |   |                                                |   |   |   |
| SHAREHOLDERS'                  EQUITY                                                                                                      |   |                            |      |   |                                                |   |   |   |
| Preferred                  stock, no stated par                  value; authorized 1,000,000 shares, none issued                           |   |                            | -         |   |                                                |   | - |   |
| Common                  stock, no stated par value;                  authorized 100,000,000 shares, issued and                             |   |                            |      |   |                                                |   |   |   |
| outstanding                  2008 - 79,410,734;                  2007 - 49,068,819;  net of shares in                            |   |                            |      |   |                                                |   |   |   |
| Treasury:                  2008 - 5,064; 2007 -                  544,061                                                                   |   |                            | 975,744   |   |                                                |   | 491,011 |   |
| Retained                  earnings                                                                                                         |   |                            | 95,859    |   |                                                |   | 85,242 |   |
| Accumulated                  other comprehensive                  (loss)                                                                   |   |                            | (25,485   | )      |                                                |   | (4,281 | ) |
| Treasury                  stock                                                                                                            |   |                            | (81       | )      |                                                |   | (8,025 | ) |
| TOTAL                  SHAREHOLDERS'                  EQUITY                                                                               |   |                            | 1,046,037 |   |                                                |   | 563,947 |   |
|                                                                                                                                       |   |                            |      |   |                                                |   |   |   |
| TOTAL                  LIABILITIES AND                  SHAREHOLDERS' EQUITY                                                               |   | $                               | 9,108,114 |   |                                                | $      | 5,824,421 |   |
|                                                                                                                                       |   |                            |      |   |                                                |   |   |   |
| The                  accompanying notes are an                  integral part of these financial statements.                               |   |                            |      |   |                                                |   |   |   |
|                                                                                                                                       |   |                            |      |   |                                                |   |   |   |
|                                                                                                                                       |   |                            |      |   |                                                |   |   |   |

----

|                                                                                                         |   | Three                  Months Ended March                  31, |    |
|--------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------|---------|
| (dollars                  in thousands, except per                  share data)                              |   | 2008                                                           |    |   | 2007 |   |
|                                                                                                         |   |                                                           |    |   |   |   |
| INTEREST                  INCOME                                                                             |   |                                                           |    |   |   |   |
| Loans                  and leases, including                  fees                                           |   | $                                                              | 88,767  |   |   | $ | 65,376 |   |
| Investment                  securities                                                                       |   |                                                           |    |   |   |   |   |   |
| Taxable                                                                                                      |   |                                                           | 14,494  |   |   |   | 9,444 |   |
| Tax-exempt                                                                                                   |   |                                                           | 7,009   |   |   |   | 5,522 |   |
| Federal                  funds sold and deposits in                  banks                                   |   |                                                           | 133     |   |   |   | 51 |   |
| Total                  interest                  income                                                      |   |                                                           | 110,403 |   |   |   | 80,393 |   |
| INTEREST                  EXPENSE                                                                            |   |                                                           |    |   |   |   |   |   |
| Deposits                                                                                                     |   |                                                           | 36,669  |   |   |   | 29,687 |   |
| Securities                  sold under repurchase                  agreements and federal                    |   |                                                           |    |   |   |   |   |   |
|    funds                  purchased                                                           |   |                                                           | 5,245   |   |   |   | 5,103 |   |
| Short-term                  borrowings                                                                       |   |                                                           | 29      |   |   |   | 38 |   |
| Long-term                  borrowings                                                                        |   |                                                           | 12,046  |   |   |   | 7,639 |   |
| Total                  interest                  expense                                                     |   |                                                           | 53,989  |   |   |   | 42,467 |   |
|             Net                  interest income |   |                                                           | 56,414  |   |   |   | 37,926 |   |
| Provision                  for loan and lease                  losses                                        |   |                                                           | 3,410   |   |   |   | 1,075 |   |
| Net                  interest income after                  provision for loan  and lease losses   |   |                                                           | 53,004  |   |   |   | 36,851 |   |
| NONINTEREST                  INCOME                                                                          |   |                                                           |    |   |   |   |   |   |
| Wealth                  management                  income                                                   |   |                                                           | 7,608   |   |   |   | 4,063 |   |
| Service                  charges on deposit                  accounts                                        |   |                                                           | 5,261   |   |   |   | 4,098 |   |
| Bank                  owned life insurance                  income                                           |   |                                                           | 1,580   |   |   |   | 1,473 |   |
| Other                  operating                  income                                                     |   |                                                           | 1,825   |   |   |   | 2,062 |   |
| Net                  gains on sale of investment                  securities                                 |   |                                                           | -       |   |   |   | 569 |   |
| Mortgage                  banking                  income                                                    |   |                                                           | 591     |   |   |   | 876 |   |
| Insurance                  commissions and                  fees                                             |   |                                                           | 3,806   |   |   |   | 2,200 |   |
| Cash                  management and electronic                  banking fees                                |   |                                                           | 2,928   |   |   |   | 1,942 |   |
| Equity                  in undistributed net                  earnings  (loss) of unconsolidated   |   |                                                           | 612     |   |   |   | (589 | ) |
|    investments                                                                                |   |                                                           |    |   |   |   |   |   |
| Total                  non-interest                  income                                                  |   |                                                           | 24,211  |   |   |   | 16,694 |   |
| NONINTEREST                  EXPENSE                                                                         |   |                                                           |    |   |   |   |   |   |
| Salaries,                  wages and employee                  benefits                                      |   |                                                           | 29,230  |   |   |   | 20,499 |   |
| Net                  premises and                  equipment                                                 |   |                                                           | 8,007   |   |   |   | 5,068 |   |
| Advertising                  and marketing                  expenses                                         |   |                                                           | 1,433   |   |   |   | 1,115 |   |
| Other                  operating                  expenses                                                   |   |                                                           | 10,244  |   |   |   | 7,084 |   |
| Total                  non-interest                  expense                                                 |   |                                                           | 48,914  |   |   |   | 33,766 |   |
|                                                                                                         |   |                                                           |    |   |   |   |   |   |
| Income                  before income                  taxes                                                 |   |                                                           | 28,301  |   |   |   | 19,779 |   |
| Income                  tax                  expense                                                         |   |                                                           | 6,708   |   |   |   | 4,296 |   |
| NET                  INCOME                                                                                  |   | $                                                              | 21,593  |   |   | $ | 15,483 |   |
|                                                                                                         |   |                                                           |    |   |   |   |   |   |
| PER                  SHARE OF COMMON                  STOCK                                                  |   |                                                           |    |   |   |   |   |   |
| Basic                  earnings                                                                              |   | $                                                              | 0.33    |   |   | $ | 0.31 |   |
| Diluted                  earnings                                                                            |   | $                                                              | 0.33    |   |   | $ | 0.31 |   |
| Dividends                  paid in                  cash                                                     |   | $                                                              | 0.1700  |   |   | $ | 0.1626 |   |
|                                                                                                         |   |                                                           |    |   |   |   |   |   |
|                                                                                                         |   |                                                           |    |   |   |   |   |   |
| The                  accompanying notes are an                  integral part of these financial statements. |   |                                                           |    |   |   |   |   |   |
|                                                                                                         |   |                                                           |    |   |   |   |   |   |
|                                                                                                         |   |                                                           |    |   |   |   |   |   |

----

|                                                                                                                             |   |                                                |       |   |                                                    |    |                    |                                               |     |    | Accumulated   |          |     |        |    |   |   |    |          |   |          |
|----------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|------------|--------|---------------------------------------------------------|---------|-------------------------|----------------------------------------------------|----------|---------|---------------|---------------|----------|-------------|---------|--------|--------|---------|---------------|--------|---------------|
|                                                                                                                             |   |                                                |       |   |                                                    |    |                    |                                               |     |    | Other         |          |     |        |    |   |   |    |          |   |          |
|                                                                                                                             |   | Common                                              |       |   |                                                    |    |                    | Retained                                           |     |    | Comprehensive |          | Treasury |        |    |   |   |    | Comprehensive |   |
| (dollars                  in                  thousands)                                                                         |   | Shares                                              |       |   | Value                                                   |    |                    | Earnings                                           |     |    | Income        |          |     | Stock       |    |   | Total  |    |          | Income |          |
|                                                                                                                             |   |                                                |       |   |                                                    |    |                    |                                               |     |    |          |          |     |        |    |   |   |    |          |   |          |
| Balance                  at December 31, 2007, as                  previously reported                                           |   |                                                | 49,068,819 |   |                                                    | $       | 491,011                 |                                               |     | $       | 85,242        |          |     | $           | (4,281  | )      |   | $       | (8,025        | )      |          | $ | 563,947 |   |   |   |   |
| Cumulative                  effect of adoption of                  EITF 06-4                                                     |   |                                                | -          |   |                                                    |    | -                       |                                               |     |    | (2,151        | )             |     |        | -       |   |   |    | -             |   |          |   | (2,151 | ) |   |   |   |
| Balance                  at December 31, 2007, as                  revised                                                       |   |                                                | 49,068,819 |   |                                                    |    | 491,011                 |                                               |     |    | 83,091        |          |     |        | (4,281  | )      |   |    | (8,025        | )      |          |   | 561,796 |   |   |   |   |
| Net                  income                                                                                                      |   |                                                | -          |   |                                                    |    | -                       |                                               |     |    | 21,593        |          |     |        | -       |   |   |    | -             |   |          |   | 21,593 |   |   | $ | 21,593 |   |
| Cash                  dividends                  declared                                                                        |   |                                                | -          |   |                                                    |    | -                       |                                               |     |    | (8,825        | )             |     |        | -       |   |   |    | -             |   |          |   | (8,825 | ) |   |   |   |   |
| 3%                  stock                  dividend                                                                              |   |                                                | -          |   |                                                    |    | -                       |                                               |     |    | -             |          |     |        | -       |   |   |    | -             |   |          |   | - |   |   |   |   |   |
| Shares                  issued under share-based                  plans, net of excess tax benefits                              |   |                                                | 426,511    |   |                                                    |    | 1,276                   |                                               |     |    | -             |          |     |        | -       |   |   |    | 2,685         |   |          |   | 3,962 |   |   |   |   |   |
| Share-based                  compensation                                                                                        |   |                                                | -          |   |                                                    |    | 505                     |                                               |     |    | -             |          |     |        | -       |   |   |    | -             |   |          |   | 505 |   |   |   |   |   |
| Shares                  issued for the acquisition                  of Christiana                                                |   |                                                | 2,732,813  |   |                                                    |    | 43,839                  |                                               |     |    | -             |          |     |        | -       |   |   |    | -             |   |          |   | 43,839 |   |   |   |   |   |
| Shares                  issued for the acquisition                  of KNBT                                                      |   |                                                | 27,205,548 |   |                                                    |    | 439,112                 |                                               |     |    | -             |          |     |        | -       |   |   |    | 5,623         |   |          |   | 444,735 |   |   |   |   |   |
| Other                  comprehensive (loss), net of                  reclassificaiton adjustment and taxes                       |   |                                                | -          |   |                                                    |    | -                       |                                               |     |    | -             |          |     |        | (21,204 | )      |   |    | -             |   |          |   | (21,204 | ) |   |   | (21,204 | ) |
| Total                  comprehensive                  income                                                                     |   |                                                | -     |   |                                                    |    | -                  |                                               |     |    | -        |          |     |        | -  |   |   |    | -        |   |          |   | - |   |   | $ | 389 |   |
| Treasury                  shares                  purchased                                                                      |   |                                                | (22,957    | )      |                                                    |    | -                       |                                               |     |    | -             |          |     |        | -       |   |   |    | (364          | )      |          |   | (364 | ) |   |   |   |   |
| Balance                  at March 31,                  2008                                                                      |   |                                                | 79,410,734 |   |                                                    |  $ | 975,744                 |                                               |     |  $ | 95,859        |          |     |  $     | (25,485 | )      |   |  $ | (81           | )      |          |  $$ | 1,046,037 |   |   |   |   |   |
|                                                                                                                             |   |                                                |       |   |                                                    |    |                    |                                               |     |    |          |          |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
|                                                                                                                             |   |                                                |       |   |                                                    |    |                    |                                               |     |    |          |          |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
|                                                                                                                             |   | March                  31,                  2008    |       |   |                                                    |    |                    |                                               |     |    |          |          |     |        |    |   |   |    |          |
|                                                                                                                             |   | Before                                              |       |   | Tax                  (expense)                          |    | Net                  of |                                               |     |    |          |          |     |        |    |   |   |    |          |   |          |   |   |   |
|                                                                                                                             |   | Tax                  Amount                         |       |   | Benefit                                                 |    |                    | Tax                  Amount                        |     |    |          |          |     |        |    |   |   |    |          |   |          |   |   |   |   |
|                                                                                                                             |   |                                                |       |   |                                                    |    |                    |                                               |     |    |          |          |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
| Unrealized                  (losses) on                  securities                                                              |   |                                                |       |   |                                                    |    |                    |                                               |     |    |          |          |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
|   Unrealized                  holding                  (loses) arising during period                                   |   | $                                                   | (32,622    | )      |                                                    | $       | 11,418                  |                                               |     | $       | (21,204       | )             |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
|   Less:                  Reclassification                  adjustment for gains realized in net income                 |   |                                                | -          |   |                                                    |    | -                       |                                               |     |    | -             |          |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
| Other                  comprehensive (loss),                  net                                                                |   |  $                                             | (32,622    | )      |                                                    |  $ | 11,418                  |                                               |     |  $ | (21,204       | )             |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
|                                                                                                                             |   |                                                |       |   |                                                    |    |                    |                                               |     |    |          |          |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
|                                                                                                                             |   |                                                |       |   |                                                    |    |                    |                                               |     |    |          |          |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
|                                                                                                                             |   |                                                |       |   |                                                    |    |                    |                                               |     |    |          |          |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
|                                                                                                                             |   |                                                |       |   |                                                    |    |                    |                                               |     |    |          |          |     | Accumulated |    |   |   |    |          |   |          |   |   |   |   |   |   |
|                                                                                                                             |   |                                                |       |   |                                                    |    |                    |                                               |     |    |          |          |     | Other       |    |   |   |    |          |   |          |   |   |   |   |   |   |
|                                                                                                                             |   | Common                                              |       |   |                                                    |    |                    |                                               | Retained |    |          | Comprehensive |     | Treasury    |    |   |   |    |          |   | Comprehensive |   |
| (dollars                  in                  thousands)                                                                         |   | Shares                                              |       |   | Value                                                   |    |                    | Earnings                                           |     |    | Income        |          |     | Stock       |    |   | Total  |    |          | Income |          |
|                                                                                                                             |   |                                                |       |   |                                                    |    |                    |                                               |     |    |          |          |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
| Balance                  at December 31, 2006, as                  previously reported                                           |   |                                                | 49,379,056 |   |                                                    | $       | 467,288                 |                                               |     | $       | 77,665        |          |     | $           | 1,861   |   |   | $       | (3,945        | )      |          | $ | 542,869 |   |   |   |   |   |
| Cumulative                  effect of adoption of                  FAS No. 159                                                   |   |                                                | -          |   |                                                    |    | -                       |                                               |     |    | (1,732        | )             |     |        | -       |   |   |    | -             |   |          |   | (1,732 | ) |   |   |   |   |
| Balance                  at December 31, 2006, as                  revised                                                       |   |                                                | 49,379,056 |   |                                                    |    | 467,288                 |                                               |     |    | 75,933        |          |     |        | 1,861   |   |   |    | (3,945        | )      |          |   | 541,137 |   |   |   |   |   |
| Net                  income                                                                                                      |   |                                                | -          |   |                                                    |    | -                       |                                               |     |    | 15,483        |          |     |        | -       |   |   |    | -             |   |          |   | 15,483 |   |   | $ | 15,483 |   |
|  Cash                  dividends                  declared                                                                  |   |                                                | -          |   |                                                    |    | -                       |                                               |     |    | (8,048        | )             |     |        | -       |   |   |    | -             |   |          |   | (8,048 | ) |   |   |   |   |
| Shares                  issued under share-based                  plans                                                          |   |                                                | 195,879    |   |                                                    |    | (1,365                  | )                                                  |     |    | -             |          |     |        | -       |   |   |    | 3,753         |   |          |   | 2,388 |   |   |   |   |   |
| Share-based                  compensation                                                                                        |   |                                                | -          |   |                                                    |    | 632                     |                                               |     |    | -             |          |     |        | -       |   |   |    | -             |   |          |   | 632 |   |   |   |   |   |
| Other                  comprehensive (loss), net of                  reclassification adjustment and taxes                       |   |                                                | -          |   |                                                    |    | -                       |                                               |     |    | -             |          |     |        | (1,148  | )      |   |    | -             |   |          |   | (1,148 | ) |   |   | (1,148 | ) |
| Total                  comprehensive                  income                                                                     |   |                                                | -          |   |                                                    |    | -                       |                                               |     |    | -             |          |     |        | -       |   |   |    | -             |   |          |   | - |   |   | $ | 14,335 |   |
| Treasury                  shares                  purchased                                                                      |   |                                                | (31,869    | )      |                                                    |    | -                       |                                               |     |    | -             |          |     |        | -       |   |   |    | (596          | )      |          |   | (596 | ) |   |   |   |   |
| Balance                  at March 31,                  2007                                                                      |   |                                                | 49,543,066 |   |                                                    |  $ | 466,555                 |                                               |     |  $ | 83,368        |          |     |  $     | 713     |   |   |  $ | (788          | )      |          |  $ | 549,848 |   |   |   |   |   |
|                                                                                                                             |   |                                                |       |   |                                                    |    |                    |                                               |     |    |          |          |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
|                                                                                                                             |   |                                                |       |   |                                                    |    |                    |                                               |     |    |          |          |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
|                                                                                                                             |   | March                  31,                  2007    |       |   |                                                    |    |                    |                                               |     |    |          |          |     |        |    |   |   |    |          |
|                                                                                                                             |   | Before                  Tax                  Amount |       |   | Tax                  (expense)                  Benefit |    |                    | Net                  ofTax                  Amount |     |    |          |          |     |        |    |   |   |    |          |   |          |   |   |   |   |
| Unrealized                  (losses) on                  securities                                                              |   |                                                |       |   |                                                    |    |                    |                                               |     |    |          |          |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
|   Unrealized                  holding                  (loses) arising during period                                   |   | $                                                   | (1,197     | )      |                                                    | $       | 419                     |                                               |     | $       | (778          | )             |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
|   Less:                  Reclassification                  adjustment for gains realized in net income                 |   |                                                | 569        |   |                                                    |    | (199                    | )                                                  |     |    | 370           |          |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
| Other                  comprehensive (loss),                  net                                                                |   |  $                                             | (1,766     | )      |                                                    |  $ | 618                     |                                               |     |  $ | (1,148        | )             |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
|                                                                                                                             |   |                                                |       |   |                                                    |    |                    |                                               |     |    |          |          |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
| ____________________________________________________                                                                             |   |                                                |       |   |                                                    |    |                    |                                               |     |    |          |          |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
|      The                  accompanying notes are an integral part of these                  statements. |   |                                                |       |   |                                                    |    |                    |                                               |     |    |          |          |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |
|                                                                                                                             |   |                                                |       |   |                                                    |    |                    |                                               |     |    |          |          |     |        |    |   |   |    |          |   |          |   |   |   |   |   |   |   |

----

| (dollars                in thousands)                                                                                                                                                         |   | Three                Months Ended March 31, |     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|----------|
|                                                                                                                                                                                          |   | 2008                                        |     |   | 2007 |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES                                                                                                                                           |   |                                        |     |   |   |   |
|   Net                income                                                                                                                                                         |   | $                                           | 21,593   |   |   | $ | 15,483 |   |
|   Adjustments                to reconcile net income to net cash provided by operating                activities:                                                                   |   |                                        |     |   |   |   |   |   |
|      Provision                for loan and lease losses                                                                                                              |   |                                        | 3,410    |   |   |   | 1,075 |   |
|      Share-based                compensation expense                                                                                                                 |   |                                        | 505      |   |   |   | 632 |   |
|      Depreciation                and amortization                                                                                                                    |   |                                        | 4,621    |   |   |   | 2,541 |   |
|      Deferred                income tax expense                                                                                                                      |   |                                        | (498     | ) |   |   | (22 | ) |
|      Amortization                of premiums and discounts on investment securities, net                                                                             |   |                                        | 667      |   |   |   | 964 |   |
|      Undistributed                (earnings) losses of equity-method investments, net                                                                                |   |                                        | (612     | ) |   |   | 589 |   |
|      Gains                on sales of investment securities, net                                                                                                     |   |                                        | -        |   |   |   | (569 | ) |
|      Loans                originated for resale                                                                                                                      |   |                                        | (37,337  | ) |   |   | (52,698 | ) |
|      Proceeds                from sales of loans                                                                                                                     |   |                                        | 37,817   |   |   |   | 53,782 |   |
|      Gains                on sales of loans, net                                                                                                                     |   |                                        | (480     | ) |   |   | (1,084 | ) |
|      Gains                on sales of other real estate owned, net                                                                                                   |   |                                        | -        |   |   |   | (99 | ) |
|      Decrease                (increase) in fair value of subordinated debt                                                                                           |   |                                        | 1,012    |   |   |   | (151 | ) |
|      Changes                in assets and liabilities:                                                                                                               |   |                                        |     |   |   |   |   |   |
|         Decrease                in accrued interest receivable                                                                                        |   |                                        | 1,491    |   |   |   | 545 |   |
|                        Decrease in accrued interest payable                                                                                                |   |                                        | (158     | ) |   |   | (248 | ) |
|         Increase                in other assets                                                                                                       |   |                                        | (33,406  | ) |   |   | (1,516 | ) |
|         Increase                (decrease) in other liabilities                                                                                       |   |                                        | 17,058   |   |   |   | (2,371 | ) |
|              Net                cash provided by operating activities                                                        |   |                                        | 15,683   |   |   |   | 16,853 |   |
|                                                                                                                                                                                          |   |                                        |     |   |   |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES                                                                                                                                           |   |                                        |     |   |   |   |   |   |
|   Cash                equivalents received in excess of cash paid for business                acquired                                                                              |   |                                        | 36,426   |   |   |   | - |   |
|   Proceeds                from maturities of investment securities held to maturity                                                                                                 |   |                                        | 3,169    |   |   |   | 2,418 |   |
|   Proceeds                from sales of investment securities available for sale                                                                                                    |   |                                        | 10,050   |   |   |   | 1,467 |   |
|   Proceeds                from maturities of investment securities available for                sale                                                                                |   |                                        | 110,717  |   |   |   | 27,422 |   |
|   Purchase                of investment securities available for sale                                                                                                               |   |                                        | (43,176  | ) |   |   | (69,258 | ) |
|   Net                increase in loans and leases                                                                                                                                   |   |                                        | (159,980 | ) |   |   | (47,218 | ) |
|   Purchases                of premises and equipment                                                                                                                                |   |                                        | (5,510   | ) |   |   | (1,041 | ) |
|   Proceeds                from the sale of other real estate owned                                                                                                                  |   |                                        | -        |   |   |   | 1,327 |   |
|              Net                cash used in investing activities                                                            |   |                                        | (48,304  | ) |   |   | (84,883 | ) |
|                                                                                                                                                                                          |   |                                        |     |   |   |   |   |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES                                                                                                                                           |   |                                        |     |   |   |   |   |   |
|   Net                increase (decrease) in interest and non-interest-bearing demand                deposits      and                savings accounts |   |                                        | 92,842   |   |   |   | (40,598 | ) |
|   Net                increase (decrease) in certificates of deposits                                                                                                                |   |                                        | 6,486    |   |   |   | (54,353 | ) |
|   Net                increase in securities sold under agreements to repurchase                                                                                                     |   |                                        |     |   |   |   |   |   |
|       and                federal funds purchased                                                                                                                |   |                                        | 48,165   |   |   |   | 179,342 |   |
|   Net                increase (decrease) in short-term borrowings                                                                                                                   |   |                                        | 20,398   |   |   |   | (6,862 | ) |
|   Proceeds                from new long-term borrowings                                                                                                                             |   |                                        | 100,000  |   |   |   | 100,000 |   |
|   Repayments                of long-term borrowings                                                                                                                                 |   |                                        | (134,754 | ) |   |   | (112,770 | ) |
|   Shares                issued under share-based plans                                                                                                                              |   |                                        | 2,663    |   |   |   | 2,161 |   |
|   Excess                tax benefits on share-based plans                                                                                                                           |   |                                        | 146      |   |   |   | 227 |   |
|   Purchase                of treasury stock                                                                                                                                         |   |                                        | (364     | ) |   |   | (596 | ) |
|   Cash                dividends                                                                                                                                                     |   |                                        | (8,825   | ) |   |   | (8,048 | ) |
|                 Net                cash provided by financing activities                                      |   |                                        | 126,757  |   |   |   | 58,503 |   |
|                 Net                increase (decrease) in cash and cash equivalents                           |   |                                        | 94,135   |   |   |   | (9,527 | ) |
|   Cash                and cash equivalents at beginning of year                                                                                                                     |   |                                        | 111,520  |   |   |   | 111,203 |   |
|   Cash                and cash equivalents at March 31,                                                                                                                             |   | $                                           | 205,655  |   |   | $ | 101,676 |   |
|                                                                                                                                                                                          |   |                                        |     |   |   |   |   |   |
| The                accompanying notes are an integral part of these                statements.                                                                                                |   |                                        |     |   |   |   |   |   |

----

----

| (dollars                  in                  thousands) |                                                        | Balance                  Sheet Acquired January 31,                  2008 |      |
|----------------------------------------------------------|-------------------------------------------------------------|---------------------------------------------------------------------------|-----------|
|                                                     |                                                        |                                                                      |      |   |
| Assets:                                                  |                                                        |                                                                      |      |   |
|                                                     | Cash                  and cash                  equivalents |                                                                      | $         | 44,831 |   |
|                                                     | Securities                                                  |                                                                      |      | 666,064 |   |
|                                                     | Loans                                                       |                                                                      |      | 1,831,367 |   |
|                                                     | Premises                  and                  equipment    |                                                                      |      | 45,851 |   |
|                                                     | Goodwill                                                    |                                                                      |      | 247,858  |   |
|                                                     | Indentifiable                  Intangibles                  |                                                                      |      | 25,265 |   |
|                                                     | Deferred                  Taxes                             |                                                                      |      | 18,468 |   |
|                                                     | Other                  assets                               |                                                                      |      | 99,532 |   |
| Total                  Assets:                           |                                                        | $                                                                         | 2,979,236 |   |
|                                                     |                                                        |                                                                      |      |   |   |
| Liabilities                                              |                                                        |                                                                      |      |   |   |
|                                                     | Deposits                                                    |                                                                      | $         | 1,940,800 |   |
|                                                     | Borrowings                                                  |                                                                      |      | 548,805 |   |
|                                                     | Other                  Liabilities                          |                                                                      |      | 37,915 |   |
| Total                  Liabilities                       |                                                        | $                                                                         | 2,527,520 |   |
|                                                     |                                                        |                                                                      |      |   |   |
|                                                     |                                                        |                                                                      |      |   |   |
|                                                     | Net                  assets                  acquired       |                                                                      | $         | 451,716 |   |
|                                                     |                                                        |                                                                      |      |   |   |

| (dollars                in                thousands)                                              | Pro-forma3/31/08 |         |   | Pro-forma3/31/07* |   |
|---------------------------------------------------------------------------------------------------|------------------|--------------|--------|-------------------|--------|
|                                                                                              |             |         |   |              |   |
| Total                revenue                                                                      | $                | 87,101       |   |              | $      | 84,629 |   |
| Non-interest                expense                                           |             | 55,733  |   |              |   | 53,907  |   |
| Pre                tax net                income                                                  |             | 31,368       |   |              |   | 30,722 |   |
| Income                tax             |             | 7,753   |   |              |   | 7,859 |   |
|   Net                income                                                             |             | 23,615       |   |              |   | 22,863 |   |
|                                                                                              |             |         |   |              |   |   |   |
| Basic                EPS                                                                          | $                | 0.32         |   |              | $      | 0.30 |   |
| Diluted                EPS                                                                        | $                | 0.32         |   |              | $      | 0.29 |   |
|                                                                                              |             |         |   |              |   |   |   |

----

|                                                                                          |   | Three-Months                Ended March 31, 2008 |   |
|-----------------------------------------------------------------------------------------------|--------|--------------------------------------------------|--------|
| (dollars                in thousands, except per share data)                                  |   | Income(numerator)                                |   |   | Shares                (denominator) |   |   | Per                Share Amount |   |
| Basic                earnings per share                                                       |   |                                             |   |   |   |   |   |   |   |
|     Net                income available to common stockholders            |   | $                                                | 21,593 |   |   |   | 65,191 |   |   | $ | 0.33 |   |
| Effect                of dilutive securities:                                                 |   |                                             |   |   |   |   |   |   |   |   |   |   |
|     Options                                                               |   |                                             | -      |   |   |   | 709 |   |   |   | - |   |
| Diluted                earnings per share                                                     |   |                                             |   |   |   |   |   |   |   |   |   |   |
|     Net                income available to common stockholders            |   |                                             |   |   |   |   |   |   |   |   |   |   |
|          plus                assumed conversions |   | $                                                | 21,593 |   |   |   | 65,900 |   |   | $ | 0.33 |   |

----

|                                                                                                      | Three-Months                Ended March 31, 2007 |   |
|-----------------------------------------------------------------------------------------------------------|--------------------------------------------------|--------|
| (dollars                in thousands, except per share data)                                              | Income(numerator)                                |   |   | Shares                (denominator) |   |   | Per                Share Amount |   |
| Basic                earnings per share                                                                   |                                             |   |   |   |   |   |   |   |   |
|     Net                income available to common stockholders                        |                                             | $      | 15,483 |   |   |   | 49,488 |   |   | $ | 0.31 |   |
| Effect                of dilutive securities:                                                             |                                             |   |   |   |   |   |   |   |   |   |   |   |
|     Options                                                                           |                                             |   | - |   |   |   | 747 |   |   |   | - |   |
| Diluted                earnings per share                                                                 |                                             |   |   |   |   |   |   |   |   |   |   |   |
|     Net                income available to common stockholders                        |                                             |   |   |   |   |   |   |   |   |   |   |   |
|            plus                assumed conversions |                                             | $      | 15,483 |   |   |   | 50,235 |   |   | $ | 0.31 |   |

----

| (dollars                in thousands)     |   | As                of and for the Three Months Ended March                31, 2008 |      |
|-------------------------------------------|--------|----------------------------------------------------------------------------------------|-----------|
|                                      |   | Community                Banking                                                       |      |   | Other |   |   | Consolidated |   |
| Total                assets               |   | $                                                                                      | 7,835,602 |   |   | $ | 1,272,512 |   |   | $ | 9,108,114 |   |
| Total                deposits             |   |                                                                                   | 6,103,567 |   |   |   | - |   |   |   | 6,103,567 |   |
| Net                interest income (loss) |   |                                                                                   | 57,730    |   |   |   | (1,316 | ) |   |   | 56,414 |   |
| Total                non-interest income  |   |                                                                                   | 13,409    |   |   |   | 10,802 |   |   |   | 24,211 |   |
| Total                non-interest expense |   |                                                                                   | 39,310    |   |   |   | 9,604 |   |   |   | 48,914 |   |
| Net                income (loss)          |   |                                                                                   | 21,750    |   |   |   | (157 | ) |   |   | 21,593 |   |

|                                      |   | As                of and for the Three Months Ended March                31, 2007 |      |
|-------------------------------------------|--------|----------------------------------------------------------------------------------------|-----------|
|                                      |   | Community                                                                              |      |   |   |   |   |   |   |
|                                      |   | Banking                                                                                |      |   | Other |   |   | Consolidated |   |
| Total                assets               |   | $                                                                                      | 4,782,108 |   |   | $ | 737,944 |   |   | $ | 5,520,052 |   |
| Total                deposits             |   |                                                                                   | 3,730,682 |   |   |   | - |   |   |   | 3,730,682 |   |
| Net                interest income (loss) |   |                                                                                   | 39,643    |   |   |   | (1,717 | ) |   |   | 37,926 |   |
| Total                non-interest income  |   |                                                                                   | 10,018    |   |   |   | 6,676 |   |   |   | 16,694 |   |
| Total                non-interest expense |   |                                                                                   | 27,755    |   |   |   | 6,011 |   |   |   | 33,766 |   |
| Net                income (loss)          |   |                                                                                   | 16,195    |   |   |   | (712 | ) |   |   | 15,483 |   |

----

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

| (dollars                in thousands)                       |   | March                31, |     |
|-------------------------------------------------------------|--------|--------------------------|----------|
|                                                        |   | 2008                     |     |   | 2007 |   |
| Service                cost                                 |   | $                        | 418,335  |   |   | $ | 400,920 |   |
| Interest                cost                                |   |                     | 455,758  |   |   |   | 387,204 |   |
| Expected                return on plan assets               |   |                     | (688,413 | ) |   |   | (577,830 | ) |
| Amortization                of prior service cost           |   |                     | (128,959 | ) |   |   | (128,959 | ) |
| Amortization                of unrecognized net actual loss |   |                     | 55,733   |   |   |   | 111,487 |   |
| Net                periodic benefit expense                 |   | $                        | 112,454  |   |   | $ | 192,822 |   |

----

|                                                                                  |   | As                of March 31, 2008 |    |   | As                of December 31, 2007 |    |
|---------------------------------------------------------------------------------------|--------|-------------------------------------|---------|--------|----------------------------------------|---------|
|                                                                                  |   |                                |    |   |                                   |    |   | Weighted-Average |   |   |   |   |
| (dollars                in thousands)                                                 |   | Notional                Amount      |    |   | Estimated                Fair Value    |    |   | Years                to Maturity |   |   | Receive                Rate |   |   | Pay                Rate |   |   | Notional                Amount |   |   | Estimated                Fair Value |   |
| Interest                rate swap agreements:                                         |   |                                |    |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pay                fixed/receive    variable                swaps |   | $                                   | 167,505 |   |                                   |  $ | (10,939 | ) |   |   | 5.4 |   |   |   | 4.07 | % |   |   | 6.00 | % |   | $ | 130,342 |   |   | $ | (6,660 | ) |
| Pay                variable/    receive                fixed      |   |                                | 167,505 |   |                                   |    | 10,939 |   |   |   | 5.4 |   |   |   | 6.00 | % |   |   | 4.07 | % |   |   | 130,342 |   |   |   | 6,660 |   |
| Total                swaps                                                            |   | $                                   | 335,010 |   |                                   |  $ | - |   |   |   | 5.4 |   |   |   | 5.03 | % |   |   | 5.03 | % |   | $ | 260,684 |   |   | $ | - |   |

----

----

----

| (dollars                in thousands)                                                                                  |   | Quoted                Prices in Active Markets for Identical Assets(Level                1) |   |   | Significant                OtherObservableInputs(Level                2) |    |      | SignificantUnobservableInputs(Level                3) |   |    | Balanceas                ofMarch 31,                2008 |   |
|------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------|---------|-----------|-------------------------------------------------------|--------|---------|---------------------------------------------------------------|--------|
| Assets                                                                                                                 |   |                                                                                        |   |   |                                                                     |    |      |                                                  |   |    |                                                          |   |
|   Loans                and leases held for sale                                                              |   | $                                                                                           | 5,711  |   |                                                                     | $       | -         |                                                  |   | $       | -                                                             |   |   | $ | 5,711 |   |
|   Impaired                loans                                                                              |   |                                                                                        | -      |   |                                                                     |    | -         |                                                  |   |    | 22,712                                                        |   |   |   | 22,712 |   |
|   Investment                securities,      available                for sale |   |                                                                                        | 10,788 |   |                                                                     |    | 1,437,329 |                                                  |   |    | 221,083                                                       |   |   |   | 1,669,200 |   |
|   Investment                securities,      held                to maturity   |   |                                                                                        | -      |   |                                                                     |    | 269,381   |                                                  |   |    | -                                                             |   |   |   | 269,381 |   |
|   Interest                rate swap agreements                                                               |   |                                                                                        | -      |   |                                                                     |    | (10,939   | )                                                     |   |    | -                                                             |   |   |   | (10,939 | ) |
|                                                                                                                   |   |                                                                                        |   |   |                                                                     |    |      |                                                  |   |    |                                                          |   |   |   |   |   |
| Liabilities                                                                                                            |   |                                                                                        |   |   |                                                                     |    |      |                                                  |   |    |                                                          |   |   |   |   |   |
|   Subordinated                debt                                                                           |   |  $                                                                                     | 63,688 |   |                                                                     |  $ | -         |                                                  |   |  $ | -                                                             |   |   |  $ | 63,688 |   |
|   Interest                rate swap agreements                                                               |   |                                                                                        | -      |   |                                                                     |    | 10,939    |                                                  |   |    | -                                                             |   |   |   | 10,939 |   |

|  (dollars              in thousands)                                                 |   Investment                Securities                Available                for Sale |
|-------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------|
| Assets                                                                                    |                                                                                         |   |   |
| Beginning                Balance December 31, 2007                                        |                                                                                         | $ | 194,047 |   |   |
|   Total                gains/(losses) – (realized/unrealized):            |                                                                                         |   |   |   |   |
|       Included                in earnings                   |                                                                                         |   |  - |   |   |
|       Included                in other comprehensive income |                                                                                         |   |  (20,924 | ) |   |
|   Purchases,                issuances, and settlements                          |                                                                                         |   |  3,147 |   |   |
|   Transfers                into Level 3 from KNBT and Christiana                |                                                                                         |   |  44,813 |   |   |
| Ending                balance March 31, 2008                                              |                                                                                         | $ | 221,083 |   |   |

----

| ·   | Trust                  Preferred                  Pools/Collateralized Debt Obligations– The Company’s unrealized                  loss in this category is related to general market conditions and                  the                  resultant higher cost of credit risk.  The severity of the                  impairments in relation to the carrying amounts of the individual                  investments is consistent with market developments.  The                  contractual terms of these investments do not permit the issuers                  to settle                  the security at a price less than the amortized cost of the investment.                  Credit risk does exist and an individual issuer in a pool could                  default                  which would effect the ultimate collectibility of contractual amounts.                  Because the Company has the ability and intent to hold these investments                  until a recovery of fair value, which may be maturity, it does                  not                  consider these investments to be other-than-temporarily impaired                  at March                  31, 2008. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Equities–The                  Company’s portfolio of common stock investments consists of local                  southeastern Pennsylvania-based banks and banking companies commonly                  referred to as “community banks”, which were purchased as long-term                  investments.  The unrealized loss in this category is due to                  general market conditions for financial stocks, which is a sector                  that is                  currently out of favor in the capital markets.  The severity of                  the impairment in relation to the carrying amounts of the individual                  investments is consistent with market developments.  Because the                  Company has the ability and intent to hold these long-term investments                  until a recovery of fair value, it does not consider these investments                  to                  be other-than-temporarily impaired at March 31,                  2008. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | All                  Other                  Investments– The unrealized losses in all other Company investments                  is primarily caused by the movement of interest rates.  The                  contractual terms of these investments do not permit the issuer                  to settle                  the securities at a price less than the amortized cost of the                  investment.  Because the Company has the ability and intent to                  hold these investments until a recovery of fair value, which may                  be                  maturity, the Company does not consider those investments to be                  other-than-temporarily impaired at March 31,                  2008. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (dollars                in thousands) |   | Three                Months Ended March 31, |   |
|---------------------------------------|--------|---------------------------------------------|--------|
|                                  |   | 2008                                        |   |   | 2007 |   |
| Interest                              |   | $                                           | 68,544 |   |   | $ | 50,474 |   |
| Taxes                                 |   |                                        | 17,622 |   |   |   | 21,764 |   |

| (dollars                in thousands)                               |   | Three                Months EndedMarch                31, |   |
|---------------------------------------------------------------------|--------|-----------------------------------------------------------|--------|
|                                                                |   | 2008                                                      |   |   | 2007 |   |
| Transfers                of loans to other real estate              |   | $                                                         | 191    |   |   | $ | 65 |   |
| Transfers                of loans to investments in securitizations |   |                                                      | -      |   |   |   | - |   |
| Non-cash                share based compensation plan transactions  |   |                                                      | 1,152  |   |   |   | 1,255 |   |
|                                                                |   |                                                      |   |   |   |   |   |   |

----

| (dollars                  in thousands)                                                                                                                               |   | Three                  Months EndedMarch                  31, |       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------|------------|
|                                                                                                                                                                  |   | 2008                                                          |       |   | 2007 |   |
| Details                  of acquisitions:                                                                                                                             |   |                                                          |       |   |   |   |
|      Fair                  value of assets acquired                                                                                          |   |  $                                                       | 3,160,123  |   |   |   | - |   |
|      Fair                  value of liabilities assumed                                                                                      |   |                                                          | (2,664,059 | ) |   |   | - |   |
|      Stock                  issued for acquisition                                                                                           |   |                                                          | (484,574   | ) |   |   | - |   |
|      Cash                  paid for acquisitions                                                                                             |   |                                                          | 11,490     |   |   |   | - |   |
|      Cash                  and cash equivalents acquired with acquisitions                                                                   |   |                                                          | 47,916     |   |   |   | - |   |
|      Cash                  equivalents received in excess of cash paid for     businesses                  acquired |   |  $                                                       | (36,426    | ) |   |   | - |   |

----

| (dollars              in thousands, percentages annualized)                                                                                             |    | March              31  |    |   |       |                                 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|---------|-----------------------------|---------|--------|------------|--------------------------------------|
|                                                                                                                                                    |    | 2008                   |    |   | 2007  |                                 |   |   |   |
| Return                on average shareholders'                equity                                                                                    |    | 10.54                       |  % |   | 11.61%     |                                 |   |   |   |
| Effect                of goodwill and                intangibles                                                                                        |    | 11.30                       |  % |   | 12.78%     |                                 |  |   |   |
| Return                on average tangible                equity                                                                                         |    | 21.84                       |  % |   | 24.39%     |                                 |  |   |   |
|                                                                                                                                                    |    |                        |
| Average                tangible equity excludes                acquisition related average                goodwill and                intangibles: |    |                        |
|      Average                shareholders' equity                                                                               |  $ | 823,757                     |    |   | $          | 540,823                              |   |   |   |
| Average                goodwill and                intangibles                                                                                          |    | (426,039                    | )       |   |       |                   (283,350 |  ) |   |   |   |
|      Average                tangible equity                                                                                    |  $ | 397,718                |    |   | $          | 257,473                              |   |   |   |

| ·   | allowance                for loan and lease losses; |
|--------------------|-----------------------------------------------------|

| ·   | goodwill                impairment; |
|--------------------|-------------------------------------|

| ·   | deferred                tax assets, liabilities, and uncertain tax                positions; |
|--------------------|----------------------------------------------------------------------------------------------|

| ·   | share-based                compensation; and  |
|--------------------|----------------------------------------------------|

| ·   | fair                value measurements, including assessment of other than temporary                impairment. |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                 |   | Three                Months Ended March 31, |      |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|-----------|
|                                                                                                                                                 |   | 2008                                        |      |   | 2007 |   |
| (dollars                in thousands)                                                                                                                |   | AverageBalance                              |      |   | Interest |   |   | Average                Rate |   |   | AverageBalance |   |   | Interest |   |   | Average                Rate |   |
| INTEREST                EARNING ASSETS:                                                                                                              |   |                                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Interest-bearing                deposits in     banks                and federal funds sold                     |   | $                                           | 24,148    |   |   | $ | 133 |   |   |   | 2.22 | % |   | $ | 4,332 |   |   | $ | 51 |   |   |   | 4.77 | % |
|   Investment                securities                                                                                                     |   |                                        | 1,802,951 |   |   |   | 25,245 |   |   |   | 5.63 | % |   |   | 1,271,449 |   |   |   | 17,953 |   |   |   | 5.73 | % |
|   Total                loans and leases                                                                                                    |   |                                        | 5,296,371 |   |   |   | 89,611 |   |   |   | 6.80 | % |   |   | 3,639,246 |   |   |   | 66,027 |   |   |   | 7.36 | % |
|     Total                earning assets                                                                                          |   |  $                                     | 7,123,470 |   |   |  $ | 114,989 |   |   |   | 6.49 | % |   |  $ | 4,915,027 |   |   |  $ | 84,031 |   |   |   | 6.93 | % |
|                                                                                                                                                 |   |                                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST-BEARING                LIABILITIES:                                                                                                         |   |                                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Interest-bearing                deposits                                                                                                 |   |  $                                     | 4,674,323 |   |   |  $ | 36,669 |   |   |  $ | 3.16 | % |   |  $ | 3,257,141 |   |   |  $ | 29,687 |   |   |   | 3.70 | % |
|   Short-term                borrowings                                                                                                     |   |                                        | 643,958   |   |   |   | 5,274 |   |   |   | 3.29 | % |   |   | 503,795 |   |   |   | 5,141 |   |   |   | 4.14 | % |
|   Long-term                borrowings                                                                                                      |   |                                        | 1,049,870 |   |   |   | 12,046 |   |   |   | 4.61 | % |   |   | 598,757 |   |   |   | 7,639 |   |   |   | 5.17 | % |
|     Total                interest-bearing liabilities                                                                            |   | $                                           | 6,368,151 |   |   | $ | 53,989 |   |   |   | 3.41 | % |   | $ | 4,359,693 |   |   | $ | 42,467 |   |   |   | 3.95 | % |
|                                                                                                                                                 |   |                                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST                RATE MARGIN**                                                                                                                |   |                                        |      |   |   | $ | 61,000 |   |   |   | 3.44 | % |   |   |   |   |   | $ | 41,564 |   |   |   | 3.43 | % |
| Tax                equivalent interest                                                                                                               |   |                                        |      |   |   |   | (4,586 | ) |   |   | (0.27 | %) |   |   |   |   |   |   | (3,638 | ) |   |   | (0.30 | )% |
| Net                interest income                                                                                                                   |   |                                        |      |   |   | $ | 56,414 |   |   |   | 3.17 | % |   |   |   |   |   | $ | 37,926 |   |   |   | 3.13 | % |
|                                                                                                                                                 |   |                                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *Full                taxable equivalent basis, using a 35% effective tax rate.                                                                       |   |
| **Represents                the difference between interest earned and interest paid, divided                by total                earning assets. |   |
| Loans                outstanding, net of unearned income, include non-accruing                loans.                                                 |   |
| Fee                income included.                                                                                                                  |   |

|                                                                                    |   | Three                  Months                  Ended       |   |
|-----------------------------------------------------------------------------------------|--------|------------------------------------------------------------|--------|
| (dollars                  in                  thousands)                                |   | March                  31, 2008 over                  2007 |   |
| Increase                  (decrease) due                  to:                           |   | Volume                                                     |   |   | Rate |   |   | Total |   |
| Interest                  Income:                                                       |   |                                                       |   |   |   |   |   |   |   |
| Interest-bearing                  deposits in banks                  and fed funds sold |   | $                                                          | 122    |   |   | $ | (40 | ) |   | $ | 82 |   |
| Investment                  securities                                                  |   |                                                       | 7,443  |   |   |   | (151 | ) |   |   | 7,292 |   |
| Total                  loans and                  leases                                |   |                                                       | 28,299 |   |   |   | (4,715 | ) |   |   | 23,584 |   |
| Total                  interest                  income                                 |   | $                                                          | 35,864 |   |   | $ | (4,906 | ) |   | $ | 30,958 |   |
| Interest                  Expense:                                                      |   |                                                       |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                  deposits                                              |   | $                                                          | 11,554 |   |   | $ | (4,571 | ) |   | $ | 6,983 |   |
| Short-term                  borrowings                                                  |   |                                                       | 1,265  |   |   |   | (1,132 | ) |   |   | 133 |   |
| Long-term                  borrowings                                                   |   |                                                       | 5,244  |   |   |   | (837 | ) |   |   | 4,407 |   |
| Total                  interest                  expense                                |   | $                                                          | 18,063 |   |   | $ | (6,540 | ) |   | $ | 11,523 |   |
|                                                                                    |   |                                                       |   |   |   |   |   |   |   |   |   |   |
| Increase                  (decrease) in net                  interest income            |   | $                                                          | 17,801 |   |   | $ | 1,634 |   |   | $ | 19,435 |   |
|                                                                                    |   |                                                       |   |   |   |   |   |   |   |   |   |   |

----

| ·   | General                economic conditions; |
|--------------------|---------------------------------------------|

| ·   | Trends                in charge-offs for each loan type; |
|--------------------|----------------------------------------------------------|

| ·   | The                level of non-performing assets, including loans over 90 days delinquent                and impaired loans; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| ·   | Levels                of allowance for specific classified                assets; |
|--------------------|-----------------------------------------------------------------------------------|

| ·   | A                review of portfolio concentration of any type, either customer, industry                loan type, collateral or risk grade;                and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Levels                of criticized loans. |
|--------------------|--------------------------------------------|

----

| (dollars              in              thousands) |   | 3/31/2008              * |      |   | 12/31/2007 |   |      | 12/31/2006 |   |   | 12/31/2005 |   |   | 12/31/2004 |        |
|--------------------------------------------------|--------|--------------------------|-----------|--------|------------|--------|-----------|------------|--------|--------|------------|--------|--------|------------|-------------|
|                                             |   |                     |      |   |       |   |      |       |   |   |       |   |   |       |        |
| Specific              reserves                   |   | $                        | 2,310     |   |       | $      | 613       |       |   | $      | 1,307      |   |   | $          | 1,716       |   |   | $ | 86 |   |
| Allocated              reserves                  |   |                     | 78,708    |   |       |   | 54,162    |       |   |   | 56,787     |   |   |       | 52,189      |   |   |   | 54,964 |   |
| Unallocated              reserves                |   |                     | 613  |   |       |   | 122  |       |   |   | 212   |   |   |       | 2,159  |   |   |   | 2,540 |   |
|                                             |   | $                        | 81,631    |   |       | $      | 54,897    |       |   | $      | 58,306     |   |   | $          | 56,064      |   |   | $ | 57,590 |   |
|                                             |   |                     |      |   |       |   |      |       |   |   |       |   |   |       |        |   |   |   |   |   |

| (dollars              in              thousands)                                                                                                    |   | 3/31/2008              * |      |   | 12/31/2007 |    |      | 12/31/2006 |   |    | 12/31/2005 |   |   | 12/31/2004 |      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|-----------|--------|------------|---------|-----------|------------|--------|---------|------------|--------|--------|------------|-----------|
|                                                                                                                                                |   |                     |      |   |       |    |      |       |   |    |       |   |   |       |      |
| Non-performing              loans                                                                                                                   |   |  $                  | 23,818    |   |       |  $ | 15,285    |       |   |  $ | 8,648      |   |   |  $    | 12,144    |   |   |  $ | 11,973 |   |
| Non-performing              loans to              total loans                                                                                       |   |                     | 0.40      | %      |       |    | 0.39      | %          |   |    | 0.24       | %      |   |       | 0.40      | % |   |   | 0.42 | % |
| Delinquent              loans              (excluding non-performing loans)                                                                         |   |  $                  | 19,665    |   |       |  $ | 7,041     |       |   |  $ | 8,196      |   |   |  $    | 3,399     |   |   |  $ | 7,795 |   |
| Delinquent              loans to total              loans                                                                                           |   |                     | 0.33      | %      |       |    | 0.18      | %          |   |    | 0.23       | %      |   |       | 0.11      | % |   |   | 0.27 | % |
| Classified              loans                                                                                                                       |   |  $                  | 104,730   |   |       |  $ | 68,970    |       |   |  $ | 66,390     |   |   |  $    | 74,756    |   |   |  $ | 64,828 |   |
| Classified              loans tot              total loans                                                                                          |   |                     | 1.74      | %      |       |    | 1.78      | %          |   |    | 1.83       | %      |   |       | 2.45      | % |   |   | 2.26 | % |
| Tier              1 capital and              ALLL                                                                                                   |   |  $                  | 650,779   |   |       |  $ | 454,063   |       |   |  $ | 423,390    |   |   |  $    | 374,478   |   |   |  $ | 347,878 |   |
| Classified              loans to tier              1 capital and ALLL                                                                               |   |                     | 16.09     | %      |       |    | 15.19     | %          |   |    | 15.68      | %      |   |       | 19.96     | % |   |   | 18.64 | % |
| Total              loans                                                                                                                            |   | $                        | 6,012,864 |   |       | $       | 3,875,253 |       |   | $       | 3,631,937  |   |   | $          | 3,049,808 |   |   | $ | 2,874,439 |   |
|                                                                                                                                                |   |                     |      |   |       |    |      |       |   |    |       |   |   |       |      |   |   |   |   |   |
|                                                                                                                                                |   |                     |      |   |       |    |      |       |   |    |       |   |   |       |      |   |   |   |   |   |
| *              Includes              Christiana Bank and Trust Company and KNBT Bancorp, Inc., each acquired              during the first quarter. |   |
|                                                                                                                                                |   |                     |      |   |       |    |      |       |   |    |       |   |   |       |      |   |   |   |   |   |

----

| ·   | The                  SBA guaranteed loan resulting in the $2.0 million charge-off during                  2007                  involved a foreign exposure, secured by receivables from a foreign                  governmental agency which do not appear to be collectible.  This                  exposure was unique to this one loan and no further significant                  exposure                  of this type or a similar nature currently exists within the loan                  portfolio. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                  other loan was collateralized by several, ocean-front, vacation                  properties                  on which the level of financing was higher than typical in the                  portfolio,                  and on which collateral values eroded during 2007.  The                  resulting $2.0 million charge-off during 2007 was taken to value                  the loan                  at the net realizable value of the collateral.  The properties                  have been sold and the remaining balance of $3.3 million has been                  repaid                  during the first quarter of 2008 without further charge-off. The                  Company                  has limited additional exposure in these types of loan                  structures. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (dollars              in thousands)                                       |  March                31, 2008 |      |  December                31, 2007 |   |   |
|---------------------------------------------------------------------------|-------------------------------------|-----------|----------------------------------------|--------|--------|
|                                                                      |                                |      |                                   |   |   |
| Nonaccrual                loans and leases                                | $                                   | 22,679    |                                   |   | $      | 15,198 |   |   |
| Loans                past due 90 or more days as to interest or principal |                                | 1,140     |                                   |   |   | 87 |   |   |
|    Total                non-performing loans               |                                | 23,819    |                                   |   |   | 15,285 |   |   |
| Other                real estate owned                                    |                                | 326       |                                   |   |   | - |   |   |
|    Total                non-performing assets              | $                                   | 24,145    |                                   |   | $      | 15,285 |   |   |
|                                                                      |                                |      |                                   |   |   |   |   |   |
| Total                loans and leases, including loans held for sale      | $                                   | 6,012,864 |                                   |   | $      | 3,875,253 |   |   |
|                                                                      |                                |      |                                   |   |   |   |   |   |
| Average                total loans and leases                             | $                                   | 5,296,371 |                                   |   | $      | 3,825,406 |   |   |
|                                                                      |                                |      |                                   |   |   |   |   |   |
| Allowance                for loan and lease losses                        | $                                   | 81,631    |                                   |   | $      | 54,897 |   |   |
|                                                                      |                                |      |                                   |   |   |   |   |   |
| Allowance                for loan and lease losses to:                    |                                |      |                                   |   |   |   |   |   |
|    Non-performing                assets                    |                                | 338.1     |  %                                |   |   | 359.2 |  % |   |
|    Total                loans and leases                   |                                | 1.36      |  %                                |   |   | 1.42 |  % |   |
|    Average                total loans and leases           |                                | 1.54      |  %                                |   |   | 1.44 |  % |   |

| (dollars                in thousands)                                |   | For                Three MonthsEnded                March 31, |   |
|----------------------------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                                                 |   | 2008                                                          |   |   | 2007 |   |
| Net                charge-offs                                       |   | $                                                             | 2,561  |   |   | $ | 1,611 |   |
|                                                                 |   |                                                          |   |   |   |   |   |   |
| Net                charge-offs (annualized) to:                      |   |                                                          |   |   |   |   |   |   |
|    Total                loans and leases              |   |                                                          | 0.17   | % |   |   | 0.18 | % |
|    Average                total loans and leases      |   |                                                          | 0.19   | % |   |   | 0.18 | % |
|    Allowance                for loan and lease losses |   |                                                          | 12.55  | % |   |   | 11.31 | % |

----

| ·   | Loans                to individuals to finance the purchase of personal assets or activities                were $977.9 million or 16.3% of total                loans. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Residential                mortgage loans for the purchase or financing of an individual’s private                residence were $1.07 billion or 17.8% of total loans.   The                Company’s residential mortgage loan portfolio consists substantially of                “prime/agency” loans, which are based on 80% of appraised value and are                made to borrowers with average or better credit                ratings.  Approximately 2.2% of the Company’s total mortgage                loan originations during the three months ended March 31, 2008, were                considered “Alt-A”   loans and none were                considered  “Sub-prime” loans.  “Alt-A” loans are                those to borrowers who generally have average credit scores, but                higher                loan-to-value ratios, up to 100% of the cost of the                property.  The Company sells these “Alt-A” loans and “sub-prime”                loans, if any,  to investors in the secondary market, subject to                recourse claims for a period of time for defaults related to borrower                payments and/or Company representations.  Recourse claims                year-to-date March 31, 2008 were not material to the Company’s financial                position or results of operations.  The Company did not                experience a notable increase in recourse claims during this period.                 KNBT had purchased a portfolio of residential mortgages prior to                the                merger, which contained some Alt-A loans.  Approximately 5.4% of the                Company's residential mortgage portfolio consists of these purchased                Alt-A                loans. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Commercial                loans were $3.97 billion or 65.9% of the total loan                portfolio.  This category includes commercial real estate,                commercial construction and commercial and industrial                loans. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                                                                            |   | Repricing                Periods |       |
|-----------------------------------------------------------------------------------------------------------------|--------|----------------------------------|------------|
| (dollars              in              thousands)                                                                |   | Within ThreeMonths               |       |   | Three Months Through                One Year |   |   | One Year Through Five                Years |   |   | Over Five                Years |   |
| Assets                                                                                                          |   |                             |       |   |   |   |   |   |   |   |   |   |
|    Fed              Funds              Sold                                                      |   |  $                          | 4,000      |   |   |  $ | - |   |  $ |   | - |   |   |  $ | - |   |
| Investment              securities*                                                                             |   |                             | 224,322    |   |   |   | 341,711 |   |   |   | 591,270 |   |   |   | 879,712 |   |
| Loans              and leases              (1)                                                                  |   |                             | 2,309,514  |   |   |   | 1,021,623 |   |   |   | 1,972,229 |   |   |   | 694,089 |   |
|                                                                                                            |   |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                            |   |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities              and              equity                                                                |   |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest              bearing              deposits                                                         |   |                             | 24,159     |   |   |   | 68,018 |   |   |   | 270,597 |   |   |   | 405,380 |   |
| Interest              bearing              deposits                                                        |   |                             | 3,523,327  |   |   |   | 1,479,367 |   |   |   | 321,322 |   |   |   | 1,855 |   |
| Borrowed              funds                                                                                     |   |                             | 585,205    |   |   |   | 155,714 |   |   |   | 378,003 |   |   |   | 567,523 |   |
| Subordinated              debt                                                                                  |   |                             | 104,926    |   |   |   | 36,083 |   |   |   | - |   |   |   | - |   |
|                                                                                                            |   |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Periodic              Interest              sensitivity gap                                                     |   |                             | (1,699,781 | ) |   |   | (375,848 | ) |   |   | 1,593,577 |   |   |   | 599,043 |   |
| Cumulative              interest rate              sensitivity gap                                              |   |                             | (1,699,781 | ) |   |   | (2,075,620 | ) |   |   | (482,052 | ) |   |   | 116,991 |   |
|                                                                                                            |   |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *Excludes              unrealized holding gain on available -for-sale securities of $37.3              million. |
|                                                                                                            |   |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| (dollars              in              thousands)       |   |   |      |
|--------------------------------------------------------|--------|--------|-----------|
|                                                   |   |   |      |   | %              Change |   |
| MVPE                                                   |   |   |      |   | from |   |
| Change              in Interest              Rate      |   | Amount |      |   | Base Case |   |
|   Rate              Scenario                 |   |   |      |   |   |
| +              300 basis              point            |   | $      | 958,635   |   |   |   | -13.33 | % |
| +              200 basis point              rate  |   |   | 1,023,287 |   |   |   | -7.49 | % |
| +              100 basis point rate              shock |   |   | 1,075,414 |   |   |   | -2.78 | % |
| Static              - base              case           |   |   | 1,106,122 |   |   |   | 0.00 | % |
| -              100 basis point rate              shock |   |   | 1,105,035 |   |   |   | -0.10 | % |
| -              200 basis point rate              shock |   |   | 1,087,502 |   |   |   | -1.68 | % |
| -              300 basis point rate              shock |   |   | 1,040,040 |   |   |   | -5.97 | % |
|                                                   |   |   |      |   |   |   |   |   |

| (dollars              in              thousands) |               |   |                          |                  |   |                          |                        |   |   |                                |   |    |     |
|--------------------------------------------------|--------------------|--------|-------------------------------|-----------------------|--------|-------------------------------|-----------------------------|--------|--------|-------------------------------------|--------|---------|----------|
|                                             |               |   | March 31,                2008 |                  |   | March 31,                2007 |                        |
|  Change inInterest Rates                    |               |   | $ Change in Net Income        | % Change in Net ncome |   |                          | $ Change in Net Income |   |   | %              Change in Net Income |   |
| (in              basis points)                   |               |   |                          |                  |   |                          |                        |   |   |                                |   |    |     |
|                                             | +              300 |   |                          |  $               |   | (917)                         |                        |   | -0.86  | %                                   |   |  $ | (16,165) |   |   |   | -24.07 | % |
|                                             | +              200 |   |                          |                  |   |  138                     |                        |   | 0.13   | %                                   |   |    | (10,393) |   |   |   | -15.48 | % |
|                                             | +              100 |   |                          |                  |   |  682                     |                        |   | 0.64   | %                                   |   |    | (5,018)  |   |   |   | -7.47 | % |
|                                             | -              100 |   |                          |                  |   | (6,683)                       |                        |   | -6.23  | %                                   |   |    | 1,669    |   |   |   | 2.49 | % |
|                                             | -              200 |   |                          |                  |   | (14,310)                      |                        |   | -13.34 | %                                   |   |    | 2,609    |   |   |   | 3.89 | % |
|                                             | -              300 |   |                          |                  |   | (20,963)                      |                        |   | -19.55 | %                                   |   |    | 2,927    |   |   |   | 4.36 | % |
|                                             |               |   |                          |                  |   |                          |                        |   |   |                                |   |    |     |   |   |   |   |   |
|                                             |               |   |                          |                  |   |                          |                        |   |   |                                |   |    |     |   |   |   |   |   |

----

|                                                                                                                    |   |   |          |   | 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                                              |   | $      | 40,483        |   |                                     | $      | 5,999 |   |   | $ | 9,975 |   |   | $ | 6,474 |   |   | $ | 18,035 |   |
| Remaining                contractual                maturities of time deposits                                         |   |   | 2,346,804     |   |                                     |   | 2,021,457 |   |   |   | 251,973 |   |   |   | 71,520 |   |   |   | 1,854 |   |
| Loan                commitments                                                                                         |   |   | 1,924,204     |   |                                     |   | 1,102,025 |   |   |   | 186,741 |   |   |   | 65,090 |   |   |   | 570,348 |   |
| Long-term                borrowed                funds                                                                  |   |   | 1,020,393     |   |                                     |   | 131,832 |   |   |   | 278,247 |   |   |   | 81,541 |   |   |   | 528,773 |   |
| Guaranteed                prefered beneficial                interests in   Company's subordinated debentures |   |   | 141,009  |   |                                     |   | -  |   |   |   | -  |   |   |   | -  |   |   |   | 141,009  |   |
| Letters                of                credit                                                                         |   |   | 173,472       |   |                                     |   | 140,533 |   |   |   | 22,580 |   |   |   | 10,359 |   |   |   | - |   |
|  Total                                                                                                             |   | $      | 5,646,365     |   |                                     | $      | 3,401,846 |   |   | $ | 749,516 |   |   | $ | 234,984 |   |   | $ | 1,260,019 |   |
|                                                                                                                    |   |   |          |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                                                                        |   |  Tier                1 Capital to Average |   |   |  Tier                1 Capital to Risk-Weighted |   |   |  Total                Capital to Risk-Weighted |   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|--------|--------|------------------------------------------------------|--------|--------|-----------------------------------------------------|--------|
|                                                                                                                        |   |  Assets                Ratio              |   |   |  Assets                Ratio                    |   |   |  Assets                Ratio                   |   |
|                                                                                                    |   | Mar. 31,                                  |   |   | Dec.                31,                              |   |   | Mar. 31,                                       |   |   | Dec.                31, |   |   | Mar.                31, |   |   | Dec.                31, |   |
|                                                                                                                        |   | 2008                                           |   |   | 2007                                                 |   |   | 2008                                                |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |
|                                                                                                                        |   |                                           |   |   |                                                 |   |   |                                                |   |   |   |   |   |   |   |   |   |   |
| The                Company                                                                                                  |   |                                           | 8.50   | %      |                                                 |   | 7.76   | %                                                   |   |   | 9.11 | % |   |   | 9.54 | % |   |   | 10.31 | % |   |   | 10.81 | % |
| National                Penn Bank                                                                                           |   |                                           | 8.46   | %      |                                                 |   | 7.29   | %                                                   |   |   | 9.08 | % |   |   | 8.99 | % |   |   | 10.27 | % |   |   | 10.22 | % |
| Christiana                Bank & Trust Company                                                                          |   |                                           | 11.37  | %      |                                                 |   | 13.77  | %                                                   |   |   | 12.06 | % |   |   | 14.72 | % |   |   | 13.31 | % |   |   | 15.97 | % |
| “Well                Capitalized” institution    (under                banking regulations) |   |                                           | 5.00   | %      |                                                 |   | 5.00   | %                                                   |   |   | 6.00 | % |   |   | 6.00 | % |   |   | 10.00 | % |   |   | 10.00 | % |

----

| ·   | The                general economy and local market conditions will likely result in                modest                deposit and loan growth in the low to mid single-digit percentages                during                the remainder of 2008. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                principal challenge faced by the Company today is to grow its                earnings in light of the compression of its net interest margin due                to current and anticipated interest rate levels.  In this                environment, management seeks to increase net interest income                principally through increased volume, including volume from mergers                and                acquisitions, to increase non-interest income, especially revenues                from                insurance and wealth management activities, and to contain our                costs. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

|    | • | 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.  In particular, the continued use of non-National Penn                brands may be counterproductive to National Penn’s overall branding and                marketing strategy.                                                                                                                                                                                                                     |
|--------------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|              | • | 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.                                                                                                                                                                                                                                                                                                                                                                                      |
|              | • | New                product development by new and existing competitors may be more effective,                and take place more quickly, than expected.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|              | • | Geographic                expansion may be more difficult, take longer, and present more operational                and management risks and challenges, than expected.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|    | • | Business                development in newly entered geographic areas, including those entered                by                mergers and acquisitions such as the Christiana and KNBT acquisitions,                may                be more difficult, and take longer, than expected.                                                                                                                                                                                                                                                                                                                                                         |
|              | • | National                Penn may be less effective in cross-selling its various products                and                services, and in utilizing web-based and other alternative delivery                systems, than expected.                                                                                                                                                                                                                                                                                                                                                                                                               |
|              | • | Projected                business increases following completed transactions, new product                development, geographic expansion, and productivity and investment                initiatives, may be lower than expected, and recovery of associated                costs                may take longer than expected.                                                                                                                                                                                                                                                                                                                   |
|              | • | National                Penn may be unable to attract and/or retain key executives and other                key                personnel due to intense competition for such persons or                otherwise.                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|              | • | Growth                and profitability of National Penn’s non-interest income or fee income may                be less than expected.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|              | • | General                economic or business conditions, either nationally or in the regions                in                which National Penn does business, may be less favorable 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.                                                                                                                                                                         |
|              | • | Expected                synergies and cost savings from mergers and acquisitions, including                the                Christiana and KNBT acquisitions, may not be fully realized or realized                as                quickly as expected.                                                                                                                                                                                                                                                                                                                                                                                         |
|              | • | Revenues                and loan growth following mergers and acquisitions, including the                Christiana and KNBT acquisitions, may be less than expected.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|              | • | Loan                losses, deposit attrition, operating costs, customer and key employee                losses, and business disruption following mergers and acquisitions,                including the Christiana and KNBT acquisitions, may be greater than                expected.                                                                                                                                                                                                                                                                                                                                                            |
|              | • | Business                opportunities and strategies potentially available to National Penn                after                mergers and acquisitions, including the Christiana and KNBT acquisitions,                may not be successfully or fully acted upon.                                                                                                                                                                                                                                                                                                                                                                               |
|              | • | Costs,                difficulties or delays related to the integration of businesses or                systems                of acquired companies, including Christiana, KNBT, and their respective                subsidiaries, with National Penn’s business or systems may be greater than                expected.                                                                                                                                                                                                                                                                                                                     |
|              | • | Technological                changes, including systems conversions and integration, may be more                difficult to make or more expensive than expected or present unanticipated                operational issues.                                                                                                                                                                                                                                                                                                                                                                                                                       |
|         | • | Changes                made by third party software vendors in products utilized by National                Penn, including product upgrades, replacements, and withdrawal of                support                for prior products,  may necessitate unscheduled product                revisions by National Penn and related unbudgeted                expenditures.                                                                                                                                                                                                                                                                |
|              | • | Maintaining                information security, and dealing with any breach of information                security,                may be more difficult and expensive than expected and may present                operational or reputation risks.                                                                                                                                                                                                                                                                                                                                                                                               |
|    | • | Legislation                or regulatory changes, including without limitation, changes in laws                or                regulations on competition, industry consolidation, development of                competing financial products and services, changes in accounting                rules and                practices, changes in or additional customer privacy and data protection                requirements, and intensified regulatory scrutiny of National Penn                and the                financial services industry in general, may adversely affect National                Penn’s costs and business.  |
|              | • | Market                volatility may continue in the securities markets, with an adverse                effect                on National Penn’s securities and asset management                activities.                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|         | • | In                the current environment of increased investor activism, including                hedge                fund investment policies and practices, shareholder concerns or actions                due to stock price changes of financial service companies, may require                increased management/board attention, efforts and commitments, deferring                or decreasing the focus on business development and                operations.                                                                                                                                                                         |
|              | • | A                downward movement in real estate values could adversely affect National                Penn’s asset quality and earnings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|         | • | 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.                                                                                                                                                                                                                                                                                                                                            |
|              | • | Various                domestic or international military or terrorist activities or conflicts                may have a negative impact on National Penn’s business as well as the                foregoing and other risks.                                                                                                                                                                                                                                                                                                                                                                                                                 |
|              | • | 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.                                                                                                                                                                                                                                                                                                                                                                                                           |

----

| Period                                                                           |                                          | Total                  Number                  of                  Shares Purchased                                                                                                                                                                                   |   |   | Average                  Price                  Paid                  per Share |   |   | Total                  Number of Shares Purchased as Part of Publicly Announced Plans                  or                  Programs |   |   | Maximum                  Number of                   Shares that may yet be Purchased Under the Plans                  or Programs |   |
|----------------------------------------------------------------------------------|-----------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|--------|
| January                  1, 2008 throughJanuary                  31, 2008        |                                          |                                                                                                                                                                                                                                                                  | 9,200  |   |                                                                                 | $      | 14.85  |                                                                                                                                |   |   | 9,200                                                                                                                                   |   |   |   | 641,184 |   |
|                                                                             |                                          |                                                                                                                                                                                                                                                                  |   |   |                                                                                 |   |   |                                                                                                                                |   |   |                                                                                                                                    |   |   |   |   |   |
| February                  1, 2008 throughFebruary                  29, 2008 |                                          |                                                                                                                                                                                                                                                                  | 7,000  |   |                                                                                 | $      | 16.22  |                                                                                                                                |   |   | 7,000                                                                                                                                   |   |   |   | 634,184 |   |
|                                                                             |                                          |                                                                                                                                                                                                                                                                  |   |   |                                                                                 |   |   |                                                                                                                                |   |   |                                                                                                                                    |   |   |   |   |   |
| March                  1, 2008 throughMarch                  31, 2008            |                                          |                                                                                                                                                                                                                                                                  | 6,757  |   |                                                                                 | $      | 16.88  |                                                                                                                                |   |   | 6,757                                                                                                                                   |   |   |   | 627,427 |   |
|                                                                             |                                          |
|                                                                             |                    1.     | Transactions                  are reported as of settlement dates.                                                                                                                                                                                               |
|                                                                             | 2.                                       | National                  Penn's current stock repurchase program was approved by its Board                  of                  Directors and announced on December 22, 2005.                                                                                        |   |
|                                                                             |                                          |                                                                                                                                                                                                                                                                  |   |
|                                                                             | 3.                                       | The                  number of shares approved for repurchase under National Penn's                  current                  stock repurchase programs is 2,121,800 (as adjusted for the 3%                  stock                  dividend on September 28, 2007). |   |
|                                                                             |                                          |                                                                                                                                                                                                                                                                  |   |
|                                                                             | 4.                                            | National                  Penn's current stock repurchase program has no expiration                  date.                                                                                                                                                            |   |
|                                                                             |                                          |                                                                                                                                                                                                                                                                  |   |
|                                                                             | 5.                                            | No                  National Penn stock repurchase plan or program expired during the                  period                  covered by the table.                                                                                                                  |   |
|                                                                             |                                          |                                                                                                                                                                                                                                                                  |   |
|                                                                             | 6.                                       | National                  Penn has no stock repurchase plan or program that it has determined                  to                  terminate prior to expiration or under which it does not intend                  to make                  further purchases.       |   |

----

| 3.1    | Articles                  of Incorporation, as amended, of National Penn Bancshares, Inc.                  (Incorporated by reference to Exhibit 3.1 to National Penn’s Quarterly                  Report on Form 10-Q for the quarter ended June 30, 2004, as filed                  on                  August 5, 2004.)                                                                                |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.2    | Articles                  of Amendment of National Penn Bancshares, Inc. dated April 25,                  2007                  (Incorporated by reference to Exhibit 3.1 to National Penn’s Report on                  Form 8-K dated April 25, 2007, as filed on April 25,                  2007.)                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.3    | 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  February 28, 2007, as filed on March 1,                  2007.)                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.1    | Form                  of Loan Agreement between National Penn Investment Company, as                  Lender, and                  National Penn Bancshares, Inc., as Borrower.  (Incorporated by                  reference to Exhibit 4.1 to National Penn’s Report on Form 8-K dated                  December 19, 2007, as filed on January 2, 2008.)                                  |
| 4.2    | Form                  of Revolving Credit Note, executed by National Penn Bancshares,                  Inc.                  (Incorporated by reference to Exhibit 4.2 to National Penn’s Report on                  Form 8-K dated December 19, 2007, as filed on January 2,                  2008.)                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.3    | Credit                  Agreement dated as of March 28, 2008, between National Penn Bancshares,                  Inc. and KeyBank National Association.  (Incorporated by                  reference to Exhibit 4.1 to National Penn’s Report on Form 8-K dated March                  28, 2008, and filed on March 31, 2008.)                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.4    | Form                  of Revolving Credit Note, executed by National Penn Bancshares,                  Inc.                  (Incorporated by reference to Exhibit 4.2 to National Penn’s Report on                  Form 8-K dated March 28, 2008, and filed on March 31,                  2008.)                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.1   | National                  Penn Bancshares, Inc. Executive Incentive Plan – Performance Goals – Plan                  Year 2008* (Incorporated by reference to Exhibit 10.1 to National                  Penn’s                  Report on Form 8-K dated January 23, 2008, as filed on January                  29,                  2008.)                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.2   | Amended                  and Restated Executive Incentive Plan* (Incorporated by reference                  to                  Exhibit 10.2 to National Penn’s Report on Form 8-K dated January 23, 2008,                  as filed on January 29, 2008.)                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.3   | Summary                  Sheet – Non-Employee Directors – Performance-Restricted Restricted Stock                  or Restricted Stock Units – Performance Goals –                  2008.*  (Incorporated by reference to Exhibit 10.1 to National                  Penn’s Report on Form 8-K dated February 25, 2008, as filed on February                  29, 2008.) |
|   |                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.4   | Director                  Fee Schedule.* (Incorporated by reference to Exhibit 10.2 to National                  Penn’s Report on Form 8-K dated February 25, 2008, as filed on February                  29, 2008.)                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.5   | Form                  of Amendatory Agreement dated March 26, 2008, between National                  Penn Bank                  and Donald P. Worthington.* (Incorporated by reference to Exhibit                  10.1 to                  National Penn’s Report on Form 8-K dated March 28, 2008, as filed on March                  31, 2008.)                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.6   | Form                  of Restricted Stock Agreement for restricted stock grants for 2008                  to                  National Penn Bancshares, Inc. non-employee directors.*                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.7   | Form                  of Restricted Stock Unit Agreement for restricted stock unit grants                  for                  2008 to National Penn Bancshares, Inc. non-employee                  directors.*                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.8   | Form                  of Restricted Stock Agreement for restricted stock grants for 2008                  to                  National Penn Bank non-employee directors.*                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.9   | Form                  of Restricted Stock Unit Agreement for restricted stock unit grants                  for                  2008 to National Penn Bank non-employee directors.*                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                            |
| 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 Treasurer and 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 pursuant to Section 906 of the Sarbanes-Oxley Act of                  2002.  (Furnished, not filed.)                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                            |
| 32.2   | Certification                  of  Treasurer and 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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|                                               |                               | NATIONAL                    PENN BANCSHARES, INC. |
|----------------------------------------------------|------------------------------------|---------------------------------------------------|
|                                               |                               |  (Registrant)                                |
|                                               |                               |                                              |
| Dated:                              | May                    9, 2008     |                                              | By: | /s/                    Glenn E. Moyer |
|                                               |                               |                                              |   | Name: | Glenn                    E. Moyer |
|                                               |                               |                                              |   | Title: | President                    and Chief Executive Officer  |
|                                               |                               |                                              |   |   |   |
|  Dated:                        |  May                  9, 2008 |                                              |  By: |  /s/                  Michael R. Reinhard |
|                                               |                               |                                              |   |  Name: |  Michael                  R. Reinhard |
|                                               |                               |                                              |   |  Title: |  Principal                  Financial Officer |

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