----

----

|   | x      | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE             |
|--------|--------|---------------------------------------------------------------------|
|   |   | SECURITIES EXCHANGE ACT OF 1934                                     |
|   |   |                                                                |
|   |   | For the quarterly period ended June 30, 2010                        |
|   |   | OR                                                                  |
|   | o      | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE            |
|   |   | SECURITIES EXCHANGE ACT OF 1934                                     |
|   |   |                                                                |
|   |   | For the transition period from ________________ to ________________ |

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

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

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

| Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes x No  o                  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).       Yes o    No o  |
| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.                                                                                       |
| Large accelerated filer  ̈                                                                                                                                                                                                                                                                                                                                                                                                          | Accelerated filer  x |
| Non-accelerated filer   o  (Do not check if a smaller reporting company)                                                                                                                                                                                                                                                                                                                                       | Smaller reporting company o |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes o No  x                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 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 August 5, 2010 |
|-----------------------------------|--------|-------------------------------|
| Common Stock, no stated par value |   | 126,095,125 shares       |

----

| Part I - Financial Information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Page                |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 1.             | Financial Statements                                                                      | 3 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 2.             | Management’s Discussion and Analysis of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                | Financial Condition and Results of Operation | 24 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 3.             | Quantitative and Qualitative Disclosures About |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                | Market Risk                                                                      | 45 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 4.             | Controls and Procedures                                                                      | 45 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
| Part II - Other Information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 1.             | Legal Proceedings                                                                      | 46 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item  1A. | Risk Factors | 46 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 2.             | Unregistered Sales of Equity Securities |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                | and Use of  Proceeds                                                                      | 55 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 3.             | Defaults Upon Senior Securities                                                                      | 55 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 4.             | [Removed and Reserved by the SEC] | N/A |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 5.             | Other Information                                                                      | 55 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 6.             | Exhibits                                                                      | 55 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
| Signatures                                                                                                       | 56                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |
| Exhibits                                                                                                         | 57                  |

----

PART 

|                                                                                                   |   | Unaudited |      |   |         |   |
|--------------------------------------------------------------------------------------------------------|--------|-----------|-----------|--------|--------------|--------|
| (dollars in thousands)                                                                                 |   | June 30,  |      |   | December 31, |   |
|                                                                                                   |   | 2010      |      |   | 2009         |   |
| ASSETS                                                                                                 |   |      |      |   |         |   |
| Cash and due from banks                                                                                |   | $         | 106,059   |   |         | $      | 106,722 |   |
| Interest-earning deposits with banks                                                                   |   |      | 496,282   |   |         |   | 496,535 |   |
| Total cash and cash equivalents                                                                        |   |      | 602,341   |   |         |   | 603,257 |   |
|                                                                                                   |   |      |      |   |         |   |   |   |
| Investment securities available for sale, at fair value                                                |   |      | 1,554,349 |   |         |   | 1,499,667 |   |
| Investment securities held to maturity                                                                 |   |      |      |   |         |   |   |   |
| (Fair value $588,548 and $603,915 for 2010 and 2009, respectively)                                     |   |      | 579,572   |   |         |   | 601,923 |   |
| Other securities                                                                                       |   |      | 83,676    |   |         |   | 78,951 |   |
| Loans and leases held for sale                                                                         |   |      | 15,944    |   |         |   | 18,028 |   |
| Loans and leases, net of allowance for loan and lease losses of $154,039 and $146,271                  |   |      |      |   |         |   |   |   |
| for 2010 and 2009, respectively                                                                        |   |      | 5,586,252 |   |         |   | 5,860,201 |   |
| Premises and equipment, net                                                                            |   |      | 109,792   |   |         |   | 113,556 |   |
| Accrued interest receivable                                                                            |   |      | 35,745    |   |         |   | 36,565 |   |
| Bank owned life insurance, redeemed but not settled                                                    |   |      | 64,387    |   |         |   | - |   |
| Bank owned life insurance                                                                              |   |      | 134,925   |   |         |   | 198,131 |   |
| Other real estate owned and other repossessed assets                                                   |   |      | 8,974     |   |         |   | 4,208 |   |
| Goodwill                                                                                               |   |      | 273,468   |   |         |   | 281,623 |   |
| Other intangible assets, net                                                                           |   |      | 27,360    |   |         |   | 30,943 |   |
| Unconsolidated investments under the equity method                                                     |   |      | 12,736    |   |         |   | 12,821 |   |
| Other assets                                                                                           |   |      | 132,606   |   |         |   | 144,036 |   |
| TOTAL ASSETS                                                                                           |   | $         | 9,222,127 |   |         | $      | 9,483,910 |   |
|                                                                                                   |   |      |      |   |         |   |   |   |
| LIABILITIES                                                                                            |   |      |      |   |         |   |   |   |
| Non-interest bearing deposits                                                                          |   | $         | 834,297   |   |         | $      | 753,650 |   |
| Interest bearing deposits                                                                              |   |      | 5,661,908 |   |         |   | 5,985,202 |   |
| Total deposits                                                                                         |   |      | 6,496,205 |   |         |   | 6,738,852 |   |
|                                                                                                   |   |      |      |   |         |   |   |   |
| Securities sold under repurchase agreements and federal funds purchased                                |   |      | 752,314   |   |         |   | 737,323 |   |
| Short-term borrowings                                                                                  |   |      | 7,000     |   |         |   | 6,900 |   |
| Federal Home Loan Bank advances                                                                        |   |      | 706,784   |   |         |   | 756,803 |   |
| Subordinated debentures                                                                                |   |      | 138,125   |   |         |   | 132,407 |   |
| Accrued interest payable and other liabilities                                                         |   |      | 44,811    |   |         |   | 42,157 |   |
| TOTAL LIABILITIES                                                                                      |   |      | 8,145,239 |   |         |   | 8,414,442 |   |
|                                                                                                   |   |      |      |   |         |   |   |   |
| SHAREHOLDERS' EQUITY                                                                                   |   |      |      |   |         |   |   |   |
| Preferred stock, no stated par value; authorized 1,000,000 shares                                      |   |      |      |   |         |   |   |   |
| Series B, $1,000 liquidation preference, 5% cumulative; 150,000 shares issued and                 |   |      |      |   |         |
|         outstanding as of June 30, 2010 and December 31, 2009  |   |      | 148,180   |   |         |   | 147,920 |   |
| Common stock, no stated par value; authorized 250,000,000 shares, issued and                           |   |      |      |   |         |   |   |   |
|    outstanding  June 30, 2010 - 126,064,075 - December 31, 2009 -125,713,668. |   |      | 1,227,354 |   |         |   | 1,225,635 |   |
| Accumulated deficit                                                                                    |   |      | (308,252  | )      |         |   | (302,120 | ) |
| Accumulated other comprehensive income (loss)                                                          |   |      | 9,606     |   |         |   | (1,967 | ) |
| TOTAL SHAREHOLDERS' EQUITY                                                                             |   |      | 1,076,888 |   |         |   | 1,069,468 |   |
|                                                                                                   |   |      |      |   |         |   |   |   |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                             |   | $         | 9,222,127 |   |         | $      | 9,483,910 |   |
|                                                                                                   |   |      |      |   |         |   |   |   |
| The accompanying notes are an integral part of these financial statements.                             |   |      |      |   |         |   |   |   |

----

| (dollars in thousands, except per share data)                              |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|----------------------------------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|
|                                                                       |   | 2010                        |   |   | 2009                      |   |   | 2010 |   |   | 2009 |   |
| INTEREST INCOME                                                            |   |                        |   |   |                      |   |   |   |   |   |   |   |
| Loans and leases, including fees                                           |   | $                           | 77,830 |   |                      | $      | 84,674 |   |   | $ | 156,484 |   |   | $ | 169,642 |   |
| Investment securities                                                      |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                    |   |                        | 11,457 |   |                      |   | 11,696 |   |   |   | 22,555 |   |   |   | 23,310 |   |
| Tax-exempt                                                                 |   |                        | 8,803  |   |                      |   | 9,251 |   |   |   | 17,641 |   |   |   | 18,598 |   |
| Federal funds sold and deposits in banks                                   |   |                        | 218    |   |                      |   | 227 |   |   |   | 465 |   |   |   | 260 |   |
| Total interest income                                                      |   |                        | 98,308 |   |                      |   | 105,848 |   |   |   | 197,145 |   |   |   | 211,810 |   |
| INTEREST EXPENSE                                                           |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                   |   |                        | 16,464 |   |                      |   | 30,358 |   |   |   | 34,745 |   |   |   | 62,022 |   |
| Securities sold under repurchase agreements and federal funds purchased    |   |                        | 2,808  |   |                      |   | 3,037 |   |   |   | 5,682 |   |   |   | 6,652 |   |
| Long-term borrowings                                                       |   |                        | 10,393 |   |                      |   | 11,373 |   |   |   | 20,816 |   |   |   | 23,415 |   |
| Total interest expense                                                     |   |                        | 29,665 |   |                      |   | 44,768 |   |   |   | 61,243 |   |   |   | 92,089 |   |
| Net interest income                                                        |   |                        | 68,643 |   |                      |   | 61,080 |   |   |   | 135,902 |   |   |   | 119,721 |   |
| Provision for loan and lease losses                                        |   |                        | 25,000 |   |                      |   | 37,500 |   |   |   | 57,500 |   |   |   | 55,025 |   |
| Net interest income after provision for loan and lease losses              |   |                        | 43,643 |   |                      |   | 23,580 |   |   |   | 78,402 |   |   |   | 64,696 |   |
| NON-INTEREST INCOME                                                        |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Wealth management                                                          |   |                        | 7,238  |   |                      |   | 7,232 |   |   |   | 14,339 |   |   |   | 13,847 |   |
| Service charges on deposit accounts                                        |   |                        | 5,446  |   |                      |   | 6,071 |   |   |   | 10,787 |   |   |   | 11,871 |   |
| Insurance commissions and fees                                             |   |                        | 3,639  |   |                      |   | 4,016 |   |   |   | 7,410 |   |   |   | 7,972 |   |
| Cash management and electronic banking fees                                |   |                        | 4,614  |   |                      |   | 3,995 |   |   |   | 8,772 |   |   |   | 7,643 |   |
| Mortgage banking                                                           |   |                        | 1,231  |   |                      |   | 2,834 |   |   |   | 2,384 |   |   |   | 5,254 |   |
| Bank owned life insurance                                                  |   |                        | 1,280  |   |                      |   | 1,275 |   |   |   | 3,263 |   |   |   | 2,347 |   |
| Equity in undistributed net earnings of unconsolidated investments         |   |                        | 537    |   |                      |   | 314 |   |   |   | 700 |   |   |   | 1,405 |   |
| Other operating income                                                     |   |                        | 2,771  |   |                      |   | 2,659 |   |   |   | 5,504 |   |   |   | 5,227 |   |
| Gain on pension plan curtailment                                           |   |                        | -      |   |                      |   | - |   |   |   | 4,066 |   |   |   | - |   |
| Net gains (losses) from fair value changes                                 |   |                        | 1,543  |   |                      |   | 51 |   |   |   | (5,718 | ) |   |   | (1,847 | ) |
| Net gains (losses) on sales of investment securities                       |   |                        | 214    |   |                      |   | - |   |   |   | 214 |   |   |   | (2,284 | ) |
|                                                                       |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| IMPAIRMENT LOSSES ON INVESTMENT SECURITIES:                                |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Impairment losses on investment securities                                 |   |                        | -      |   |                      |   | (14,347 | ) |   |   | (634 | ) |   |   | (40,942 | ) |
| Non credit-related losses on securities not expected to be sold            |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| recognized in other comprehensive loss before tax                          |   |                        | -      |   |                      |   | 7,211 |   |   |   | - |   |   |   | 26,021 |   |
| Net impairment losses on investment securities                             |   |                        | -      |   |                      |   | (7,136 | ) |   |   | (634 | ) |   |   | (14,921 | ) |
| Total non-interest income                                                  |   |                        | 28,513 |   |                      |   | 21,311 |   |   |   | 51,087 |   |   |   | 36,514 |   |
|                                                                       |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| NON-INTEREST EXPENSE                                                       |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Salaries, wages and employee benefits                                      |   |                        | 30,999 |   |                      |   | 32,249 |   |   |   | 60,428 |   |   |   | 64,266 |   |
| Net premises and equipment                                                 |   |                        | 7,209  |   |                      |   | 7,335 |   |   |   | 15,207 |   |   |   | 15,933 |   |
| Advertising and marketing                                                  |   |                        | 1,762  |   |                      |   | 1,893 |   |   |   | 3,371 |   |   |   | 3,748 |   |
| Goodwill impairment                                                        |   |                        | 8,250  |   |                      |   | - |   |   |   | 8,250 |   |   |   | - |   |
| FDIC insurance                                                             |   |                        | 4,056  |   |                      |   | 6,536 |   |   |   | 8,153 |   |   |   | 8,403 |   |
| Other operating expenses                                                   |   |                        | 14,287 |   |                      |   | 14,639 |   |   |   | 28,811 |   |   |   | 26,995 |   |
| Total non-interest expense                                                 |   |                        | 66,563 |   |                      |   | 62,652 |   |   |   | 124,220 |   |   |   | 119,345 |   |
| Income (loss) before income taxes                                          |   |                        | 5,593  |   |                      |   | (17,761 | ) |   |   | 5,269 |   |   |   | (18,135 | ) |
| Income tax expense (benefit)                                               |   |                        | 9,132  |   |                      |   | (10,213 | ) |   |   | 4,882 |   |   |   | (14,386 | ) |
| NET  (LOSS) INCOME                                               |   |                        | (3,539 | )      |                      |   | (7,548 | ) |   |   | 387 |   |   |   | (3,749 | ) |
| Preferred dividends and accretion of preferred discount                    |   |                        | (2,005 | )      |                      |   | (2,095 | ) |   |   | (4,010 | ) |   |   | (4,149 | ) |
| NET  (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS              |   | $                           | (5,544 | )      |                      | $      | (9,643 | ) |   | $ | (3,623 | ) |   | $ | (7,898 | ) |
| PER SHARE OF COMMON STOCK                                                  |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Basic (loss) earnings available to common shareholders                     |   | $                           | (0.04  | )      |                      | $      | (0.11 | ) |   | $ | (0.03 | ) |   | $ | (0.09 | ) |
| Diluted (loss) earnings available to common shareholders                   |   | $                           | (0.04  | )      |                      | $      | (0.11 | ) |   | $ | (0.03 | ) |   | $ | (0.09 | ) |
| Dividends paid in cash                                                     |   | $                           | 0.01   |   |                      | $      | 0.05 |   |   | $ | 0.02 |   |   | $ | 0.22 |   |
|                                                                       |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of these financial statements. |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |

----

| (dollars in thousands, except share data)                                  |   |   |        |   |      |   |      |      |   |   |          |   |   | Accumulated   |     |   |   |   |
|----------------------------------------------------------------------------|--------|--------|-------------|--------|-----------|--------|-----------|-----------|--------|--------|---------------|--------|--------|---------------|----------|--------|--------|--------|
|                                                                       |   |   |        |   |      |   |      | Series B  |   |   | Accumulated   |   |   | Other         |     |   |   |   |
|                                                                       |   | Common |        |   | Preferred |   |      | (Deficit) |   |   | Comprehensive |   |   |          |     |
|                                                                       |   | Shares |        |   | Value     |   |      | Stock     |   |   | Earnings      |   |   | Income (Loss) |     |   | Total  |   |
|                                                                       |   |   |        |   |      |   |      |      |   |   |          |   |   |          |     |   |   |   |
| Balance at December 31, 2009                                               |   |   | 125,713,668 |   |      | $      | 1,225,635 |      |   | $      | 147,920       |   |   | $             | (302,120 | )      |   | $      | (1,967 | ) |   | $ | 1,069,468 |   |
| Comprehensive Income:                                                      |   |   |        |   |      |   |      |      |   |   |          |   |   |          |     |   |   |   |   |   |   |   |   |   |
| Net income                                                                 |   |   |        |   |      |   |      |      |   |   |          |   |   |          | 387      |   |   |   | - |   |   |   | 387 |   |
| Other comprehensive (loss), net of taxes                                   |   |   |        |   |      |   |      |      |   |   |          |   |   |          | -        |   |   |   | 11,573 |   |   |   | 11,573 |   |
| Total comprehensive income                                                 |   |   |        |   |      |   |      |      |   |   |          |   |   |          | 387      |   |   |   | 11,573 |   |   |   | 11,960 |   |
|                                                                       |   |   |        |   |      |   |      |      |   |   |          |   |   |          |     |   |   |   |   |   |   |   |   |   |
| Cash dividends declared common                                             |   |   |        |   |      |   |      |      |   |   | -             |   |   |          | (2,509   | )      |   |   | - |   |   |   | (2,509 | ) |
| Cash dividends declared preferred                                          |   |   |        |   |      |   |      |      |   |   | -             |   |   |          | (3,750   | )      |   |   | - |   |   |   | (3,750 | ) |
| Shares issued under share-based plans,                                     |   |   |        |   |      |   |      |      |   |   |          |   |   |          |     |   |   |   |   |   |   |   |   |   |
| net of excess tax benefits                                                 |   |   | 52,652      |   |      |   | 202       |      |   |   | -             |   |   |          | -        |   |   |   | - |   |   |   | 202 |   |
| Share-based compensation                                                   |   |   | 195,319     |   |      |   | 895       |      |   |   | -             |   |   |          | -        |   |   |   | - |   |   |   | 895 |   |
| Shares issued from  ESPP and dividend                            |   |   |        |   |      |   |      |      |   |   |          |   |   |          |     |   |   |   |   |   |   |   |   |   |
|       reinvestment plan                      |   |   | 102,436     |   |      |   | 622       |      |   |   | -             |   |   |          | -        |   |   |   | - |   |   |   | 622 |   |
| Amortization of preferred discount                                         |   |   |        |   |      |   |      |      |   |   | 260           |   |   |          | (260     | )      |   |   | - |   |   |   | - |   |
|                                                                       |   |   |        |   |      |   |      |      |   |   |          |   |   |          |     |   |   |   |   |   |   |   |   |   |
| Balance at June 30, 2010                                                   |   |   | 126,064,075 |   |      | $      | 1,227,354 |      |   | $      | 148,180       |   |   | $             | (308,252 | )      |   | $      | 9,606 |   |   | $ | 1,076,888 |   |
|                                                                       |   |   |        |   |      |   |      |      |   |   |          |   |   |          |     |   |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of these financial statements. |   |

----

| (Dollars in thousands)                                                                                |   | Six Months Ended June 30 |     |
|-------------------------------------------------------------------------------------------------------|--------|-------------------------------|----------|
|                                                                                                  |   | 2010                          |     |   | 2009 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                                  |   |                          |     |   |   |   |
| Net income (loss)                                                                                     |   | $                             | 387      |   |   | $ | (3,749 | ) |
| Adjustments to reconcile net income to net                                                            |   |                          |     |   |   |   |   |   |
|     cash provided by operating activities:                                        |   |                          |     |   |   |   |   |   |
| Provision for loan and lease losses                                                                   |   |                          | 57,500   |   |   |   | 55,025 |   |
| Share-based compensation expense                                                                      |   |                          | 895      |   |   |   | 879 |   |
| Depreciation and amortization                                                                         |   |                          | 8,111    |   |   |   | 8,747 |   |
| Deferred income tax expense (benefit)                                                                 |   |                          | (107     | ) |   |   | (187 | ) |
| Amortization (accretion) of premiums and discounts on investment                                      |   |                          |     |   |   |   |   |   |
|       securities, net                                                   |   |                          | (4       | ) |   |   | (910 | ) |
| Investment securities (gains) losses, net                                                             |   |                          | (214     | ) |   |   | 2,284 |   |
| (Earnings) losses of equity-method investments, net of distributions                                  |   |                          | 85       |   |   |   | (1,405 | ) |
| Loans originated for resale                                                                           |   |                          | (84,511  | ) |   |   | (219,818 | ) |
| Proceeds from sale of loans                                                                           |   |                          | 87,483   |   |   |   | 203,322 |   |
| (Gain) on sale of loans, net                                                                          |   |                          | (888     | ) |   |   | (3,225 | ) |
| Loss on sale of other real estate owned, net                                                          |   |                          | 433      |   |   |   | - |   |
| Gain on sale of bank buildings                                                                        |   |                          | (223     | ) |   |   | - |   |
| Increase in fair value of subordinated debt                                                      |   |                          | 5,718    |   |   |   | 1,847 |   |
| Loss on recognition of impairment on securities                                                       |   |                          | 634      |   |   |   | 14,921 |   |
| Bank-owned life insurance policy income                                                               |   |                          | (3,263   | ) |   |   | (2,347 | ) |
| Gain on pension plan curtailment                                                                      |   |                          | (4,066   | ) |   |   | - |   |
| Goodwill impairment                                                                                   |   |                          | 8,250    |   |   |   | - |   |
| Changes in assets and liabilities:                                                                    |   |                          |     |   |   |   |   |   |
|       Decrease (increase)  in accrued interest receivable     |   |                          | 820      |   |   |   | 1,132 |   |
|       (Decrease) Increase  in accrued interest payable        |   |                          | (1,717   | ) |   |   | 5,644 |   |
|       (Increase)  decrease in other assets                    |   |                          | 5,436    |   |   |   | 5,230 |   |
|       Increase (decrease) in other liabilities                          |   |                          | 6,113    |   |   |   | (27,377 | ) |
|           Net cash provided by operating activities |   |                          | 86,872   |   |   |   | 40,013 |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                                                  |   |                          |     |   |   |   |   |   |
| Proceeds from maturities and repayments of investment securities held to maturity                     |   |                          | 22,141   |   |   |   | 14,698 |   |
| Purchase of investment securities held to maturity                                                    |   |                          | (50      | ) |   |   | (124,539 | ) |
| Proceeds from sales of investment securities available for sale                                       |   |                          | 6,668    |   |   |   | 16,761 |   |
| Proceeds from maturities and repayments of investment securities available for sale                   |   |                          | 213,232  |   |   |   | 196,916 |   |
| Purchase of investment securities available for sale                                                  |   |                          | (259,560 | ) |   |   | (371,102 | ) |
| Proceeds from sale of loans previously held for investment                                            |   |                          | 10,973   |   |   |   | - |   |
| Net decrease (increase) in loans and leases                                                           |   |                          | 195,923  |   |   |   | (12,340 | ) |
| Purchases of premises and equipment                                                                   |   |                          | (2,212   | ) |   |   | (708 | ) |
| Claims from bank owned life insurance                                                                 |   |                          | 2,082    |   |   |   | - |   |
| Proceeds from the sale of other real estate owned                                                     |   |                          | 4,354    |   |   |   | 957 |   |
| Proceeds from sale of bank buildings                                                                  |   |                          | 911      |   |   |   | 2,550 |   |
|         Net cash provided by (used in) investing activities   |   |                          | 194,462  |   |   |   | (276,807 | ) |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                                  |   |                          |     |   |   |   |   |   |
| Net increase (decrease) in core deposits                                                              |   |                          | 54,967   |   |   |   | 171,281 |   |
| Net  increase (decrease) in certificates of deposit                                         |   |                          | (297,614 | ) |   |   | 250,487 |   |
| Net increase (decrease) in securities sold under                                                      |   |                          |     |   |   |   |   |   |
|     agreements to repurchase and federal funds purchased                          |   |                          | 14,991   |   |   |   | 32,504 |   |
| Net increase (decrease) in short-term borrowings                                                      |   |                          | 100      |   |   |   | (402 | ) |
| Repayments of long-term borrowings                                                                    |   |                          | (49,259  | ) |   |   | (112,722 | ) |
| Proceeds from shares issued under share-based plans                                                   |   |                          | 230      |   |   |   | 533 |   |
| Excess tax benefits (expense)  on share-based plans                                         |   |                          | (28      | ) |   |   | (35 | ) |
| Issuance of shares under dividend reinvestment and optional cash                                      |   |                          | 622      |   |   |   | 68,875 |   |
| Cash dividends, common                                                                                |   |                          | (2,509   | ) |   |   | (17,999 | ) |
| Cash dividends, preferred                                                                             |   |                          | (3,750   | ) |   |   | (3,187 | ) |
|         Net cash (used in) provided by financing activities   |   |                          | (282,250 | ) |   |   | 389,335 |   |
|         Net increase (decrease) in cash and cash equivalents  |   |                          | (916     | ) |   |   | 152,541 |   |
| Cash and cash equivalents at beginning of year                                                        |   |                          | 603,257  |   |   |   | 195,830 |   |
| Cash and cash equivalents at end of period                                                            |   | $                             | 602,341  |   |   | $ | 348,371 |   |

----

|                   |   | Six Months Ended |   |
|------------------------|--------|------------------|--------|
|                   |   | June 30,         |   |
| (dollars in thousands) |   | 2010             |   |   | 2009 |   |
| Interest               |   | $                | 62,961 |   |   | $ | 86,446 |   |
| Taxes                  |   |             | -      |   |   |   | - |   |

|                                                      |   | Six Months Ended |   |
|-----------------------------------------------------------|--------|------------------|--------|
|                                                      |   | June 30,         |   |
| (dollars in thousands)                                    |   | 2010             |   |   | 2009 |   |
| Transfers of loans to other real estate                   |   | $                | 9,539  |   |   | $ | 368 |   |
| Transfers from other real estate                          |   |             | 4,787  |   |   |   | 957 |   |
| Other than temporary impairment on investment securities  |   |             | 634    |   |   |   | 40,942 |   |
| Dividends accrued not paid on preferred stock             |   |             | 938    |   |   |   | 938 |   |
| Transfer of investment securities from available-for-sale |   |             | -      |   |   |   | 251,711 |   |
| to held to maturity                                       |   |             |   |   |   |   |   |   |

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

----

|                                           |   | Six months ended June 30, 2010   |   |
|------------------------------------------------|--------|----------------------------------|--------|
|                                           |   | Before                           |   |   | Tax |   |   | Net of |   |
| (dollars in thousands)                         |   | Tax                              |   |   | Expense |   |   | Tax |   |
|                                           |   | Amount                           |   |   | (Benefit) |   |   | Amount |   |
|                                           |   |                             |   |   |   |   |   |   |   |
| Net income                                     |   | $                                | 5,269  |   |   | $ | 4,882 |   |   | $ | 387 |   |
|                                           |   |                             |   |   |   |   |   |   |   |   |   |   |
| Unrealized holding gains arising during period |   |                             | 19,485 |   |   |   | 6,821 |   |   |   | 12,664 |   |
| Less reclassification adjustment for losses    |   |                             |   |   |   |   |   |   |   |   |   |   |
|  realized in net income                   |   |                             | (420   | ) |   |   | (147 | ) |   |   | (273 | ) |
| Unrealized gains on investment securities      |   |                             | 19,905 |   |   |   | 6,968 |   |   |   | 12,937 |   |
| Unrealized gain on cash flow derivatives       |   |                             | 237    |   |   |   | - |   |   |   | 237 |   |
| Net effect of pension curtailment              |   |                             | (2,465 | ) |   |   | (864 | ) |   |   | (1,601 | ) |
| Other comprehensive income                     |   |                             | 17,677 |   |   |   | 6,104 |   |   |   | 11,573 |   |
| Total comprehensive income                     |   | $                                | 22,946 |   |   | $ | 10,986 |   |   | $ | 11,960 |   |
|                                           |   |                             |   |   |   |   |   |   |   |   |   |   |
|                                           |   |                             |   |   |   |   |   |   |   |   |   |   |
|                                           |   | Three months ended June 30, 2010 |   |
|                                           |   | Before                           |   |   | Tax |   |   | Net of |   |
| (dollars in thousands)                         |   | Tax                              |   |   | Expense |   |   | Tax |   |
|                                           |   | Amount                           |   |   | (Benefit) |   |   | Amount |   |
|                                           |   |                             |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                              |   | $                                | 5,593  |   |   | $ | 9,132 |   |   | $ | (3,539 | ) |
|                                           |   |                             |   |   |   |   |   |   |   |   |   |   |
| Unrealized holding gains arising during period |   |                             | 17,986 |   |   |   | 6,411 |   |   |   | 11,905 |   |
| Less reclassification adjustment for gains     |   |                             |   |   |   |   |   |   |   |   |   |   |
|  realized in net income                   |   |                             | 214    |   |   |   | 75 |   |   |   | 139 |   |
| Unrealized gains on investment securities      |   |                             | 17,772 |   |   |   | 6,220 |   |   |   | 11,552 |   |
| Unrealized gain on cash flow derivatives       |   |                             | 339    |   |   |   | - |   |   |   | 339 |   |
| Other comprehensive income                     |   |                             | 18,111 |   |   |   | 6,220 |   |   |   | 11,891 |   |
| Total comprehensive income                     |   | $                                | 23,704 |   |   | $ | 15,352 |   |   | $ | 8,352 |   |

|                                                |   | June 30, |   |   | December 31, |   |
|-----------------------------------------------------|--------|----------|--------|--------|--------------|--------|
| (dollars in thousands)                              |   | 2010     |   |   | 2009         |   |
| Unrealized gains on investment securities           |   | $        | 20,750 |   |         | $      | 7,813 |   |
| Unrealized (losses) on cash flow derivatives        |   |     | (2,508 | )      |         |   | (2,745 | ) |
| Unrecognized pension costs                          |   |     | (8,636 | )      |         |   | (7,035 | ) |
| Total accumulated other comprehensive income (loss) |   | $        | 9,606  |   |         | $      | (1,967 | ) |

----

|                                                  |   | June 30, 2010     |      |
|-------------------------------------------------------|--------|-------------------|-----------|
|                                                  |   |              |      |   | Gross |   |   | Gross |   |   |   |   |
| (dollars in thousands)                                |   | Amortized         |      |   | unrealized |   |   | unrealized |   |   | Fair |   |
|                                                  |   | cost              |      |   | gains |   |   | losses |   |   | value |   |
| Available for Sale                                    |   |              |      |   |   |   |   |   |   |   |   |   |
| U.S. Treasury securities                              |   | $                 | 105,248   |   |   | $ | 57 |   |   | $ | - |   |   | $ | 105,305 |   |
| U.S. Government agency securities                     |   |              | 46,151    |   |   |   | 184 |   |   |   | (48 | ) |   |   | 46,287 |   |
| State and municipal bonds                             |   |              | 359,810   |   |   |   | 7,810 |   |   |   | (8,053 | ) |   |   | 359,567 |   |
| Mortgage-backed securities/                           |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Collateralized mortgage obligations |   |              | 992,509   |   |   |   | 34,653 |   |   |   | (1,116 | ) |   |   | 1,026,046 |   |
| Corporate securities and other                        |   |              | 14,638    |   |   |   | 90 |   |   |   | (1,684 | ) |   |   | 13,044 |   |
| Marketable equity  securities               |   |              | 4,070     |   |   |   | 353 |   |   |   | (323 | ) |   |   | 4,100 |   |
|    Total                               |   | $                 | 1,522,426 |   |   | $ | 43,147 |   |   | $ | (11,224 | ) |   | $ | 1,554,349 |   |
|                                                  |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held to Maturity                                      |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury securities                              |   | $                 | 352       |   |   | $ | 3 |   |   | $ | - |   |   | $ | 355 |   |
| State and municipal bonds                             |   |              | 431,605   |   |   |   | 8,203 |   |   |   | (2,609 | ) |   |   | 437,199 |   |
| Mortgage-backed securities                            |   |              | 147,615   |   |   |   | 3,398 |   |   |   | (19 | ) |   |   | 150,994 |   |
|    Total                               |   | $                 | 579,572   |   |   | $ | 11,604 |   |   | $ | (2,628 | ) |   | $ | 588,548 |   |
|                                                  |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                  |   | December 31, 2009 |      |
|                                                  |   |              |      |   |   | Gross |   |   | Gross |   |   |   |   |   |
| (dollars in thousands)                                |   | Amortized         |      |   | unrealized |   |   | unrealized |   |   | Fair |   |
|                                                  |   | cost              |      |   | gains |   |   | losses |   |   | value |   |
| Available for Sale                                    |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury securities                              |   | $                 | 145,457   |   |   | $ | 60 |   |   | $ | (85 | ) |   | $ | 145,432 |   |
| U.S. Government agency securities                     |   |              | 88,254    |   |   |   | 306 |   |   |   | (156 | ) |   |   | 88,404 |   |
| State and municipal bonds                             |   |              | 367,837   |   |   |   | 6,107 |   |   |   | (9,742 | ) |   |   | 364,202 |   |
| Mortgage-backed securities/                           |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Collateralized mortgage obligations |   |              | 866,817   |   |   |   | 20,309 |   |   |   | (2,952 | ) |   |   | 884,174 |   |
| Corporate securities and other                        |   |              | 14,745    |   |   |   | 150 |   |   |   | (1,801 | ) |   |   | 13,094 |   |
| Marketable equity  securities               |   |              | 4,540     |   |   |   | 142 |   |   |   | (321 | ) |   |   | 4,361 |   |
|    Total                               |   | $                 | 1,487,650 |   |   | $ | 27,074 |   |   | $ | (15,057 | ) |   | $ | 1,499,667 |   |
|                                                  |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held to Maturity                                      |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury securities                              |   | $                 | 354       |   |   | $ | 7 |   |   | $ | - |   |   | $ | 361 |   |
| State and municipal bonds                             |   |              | 436,108   |   |   |   | 5,917 |   |   |   | (3,897 | ) |   |   | 438,128 |   |
| Mortgage-backed securities                            |   |              | 165,461   |   |   |   | 1,020 |   |   |   | (1,055 | ) |   |   | 165,426 |   |
|   Total                                     |   | $                 | 601,923   |   |   | $ | 6,944 |   |   | $ | (4,952 | ) |   | $ | 603,915 |   |

|                              |   | For the six months |   |
|-----------------------------------|--------|--------------------|--------|
|                              |   | ended June 30,     |   |
|                              |   | 2010               |   |   | 2009 |   |
| Gains                             |   | $                  | 214    |   |   | $ | 77 |   |
| Losses                            |   |               | -      |   |   |   | (2,361 | ) |
| Net gains (losses) from sales of  |   |               |   |   |   |   |   |   |
|   investment securities |   | $                  | 214    |   |   | $ | (2,284 | ) |

----

| The table below indicates the length of time individual securities have been in a continuous unrealized loss position at June 30, 2010.     |   |
|---------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                        |   |   |   |   | Less than 12 months |   |   | 12 months or longer |   |   | Total |   |
|                                                                                                                                        |   | No. of |   |   | Fair |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
| (dollars in thousands)                                                                                                                      |   | Securities |   |   | Value |   |   | Losses |   |   | Value |   |   | Losses |   |   | Value |   |   | Losses |   |
| U. S. Treasury securities                                                                                                                   |   |   | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| U. S. Government agency securities                                                                                                          |   |   | 1 |   |   |   | 10,004 |   |   |   | (48 | ) |   |   | - |   |   |   | - |   |   |   | 10,004 |   |   |   | (48 | ) |
| State and municipal bonds                                                                                                                   |   |   | 310 |   |   |   | 134,241 |   |   |   | (3,815 | ) |   |   | 61,204 |   |   |   | (6,847 | ) |   |   | 195,445 |   |   |   | (10,662 | ) |
| Mortgage-backed securities/                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Collateralized mortgage obligations                                                                                       |   |   | 38 |   |   |   | 24,894 |   |   |   | (147 | ) |   |   | 28,370 |   |   |   | (988 | ) |   |   | 53,264 |   |   |   | (1,135 | ) |
| Corporate securities and other                                                                                                              |   |   | 13 |   |   |   | 2,793 |   |   |   | (223 | ) |   |   | 6,094 |   |   |   | (1,461 | ) |   |   | 8,887 |   |   |   | (1,684 | ) |
| Total debt securities                                                                                                                       |   |   | 362 |   |   |   | 171,932 |   |   |   | (4,233 | ) |   |   | 95,668 |   |   |   | (9,296 | ) |   |   | 267,600 |   |   |   | (13,529 | ) |
| Marketable equity securities                                                                                                                |   |   | 4 |   |   |   | 603 |   |   |   | (304 | ) |   |   | 70 |   |   |   | (19 | ) |   |   | 673 |   |   |   | (323 | ) |
|      Total                                                                                                         |   |   | 366 |   |   | $ | 172,535 |   |   | $ | (4,537 | ) |   | $ | 95,738 |   |   | $ | (9,315 | ) |   | $ | 268,273 |   |   | $ | (13,852 | ) |
|                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The table below indicates the length of time individual securities have been in a continuous unrealized loss position at December 31, 2009. |   |
|                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                        |   |   |   |   |   | Less than 12 months |   |   | 12 months or longer |   |   | Total |   |
|                                                                                                                                        |   | No. of |   |   | Fair |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
| (dollars in thousands)                                                                                                                      |   | Securities |   |   | Value |   |   | Losses |   |   | Value |   |   | Losses |   |   | Value |   |   | Losses |   |
| U. S. Treasury securities                                                                                                                   |   |   | 5 |   |   | $ | 75,370 |   |   | $ | (85 | ) |   | $ | - |   |   | $ | - |   |   | $ | 75,370 |   |   | $ | (85 | ) |
| U. S. Government agency securities                                                                                                          |   |   | 6 |   |   |   | 50,042 |   |   |   | (156 | ) |   |   | - |   |   |   | - |   |   |   | 50,042 |   |   |   | (156 | ) |
| State and municipal bonds                                                                                                                   |   |   | 403 |   |   |   | 195,155 |   |   |   | (4,837 | ) |   |   | 62,303 |   |   |   | (8,802 | ) |   |   | 257,458 |   |   |   | (13,639 | ) |
| Mortgage-backed securities/                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Collateralized mortgage obligations                                                                                       |   |   | 112 |   |   |   | 313,331 |   |   |   | (2,127 | ) |   |   | 23,869 |   |   |   | (1,880 | ) |   |   | 337,200 |   |   |   | (4,007 | ) |
| Corporate securities and other                                                                                                              |   |   | 11 |   |   |   | - |   |   |   | - |   |   |   | 6,754 |   |   |   | (1,801 | ) |   |   | 6,754 |   |   |   | (1,801 | ) |
| Total debt securities                                                                                                                       |   |   | 537 |   |   |   | 633,898 |   |   |   | (7,205 | ) |   |   | 92,926 |   |   |   | (12,483 | ) |   |   | 726,824 |   |   |   | (19,688 | ) |
| Marketable equity securities                                                                                                                |   |   | 4 |   |   |   | 714 |   |   |   | (321 | ) |   |   | - |   |   |   | - |   |   |   | 714 |   |   |   | (321 | ) |
|      Total                                                                                                         |   |   | 541 |   |   | $ | 634,612 |   |   | $ | (7,526 | ) |   | $ | 92,926 |   |   | $ | (12,483 | ) |   | $ | 727,538 |   |   | $ | (20,009 | ) |

| (dollars in thousands)           |   | Available for Sale |      |   | Held to Maturity |   |
|----------------------------------|--------|--------------------|-----------|--------|------------------|--------|
|                             |   | Amortized          |      |   | Fair             |   |   | Amortized |   |   | Fair |   |
|                             |   | Cost               |      |   | Value            |   |   | Cost |   |   | Value |   |
| Due in one year or less          |   | $                  | 145,555   |   |             | $      | 145,996 |   |   | $ | 11,560 |   |   | $ | 11,741 |   |
| Due after one through five years |   |               | 102,011   |   |             |   | 104,074 |   |   |   | 14,302 |   |   |   | 14,601 |   |
| Due after five through ten years |   |               | 231,961   |   |             |   | 243,531 |   |   |   | 24,434 |   |   |   | 24,830 |   |
| Due after ten years              |   |               | 1,038,829 |   |             |   | 1,056,648 |   |   |   | 529,276 |   |   |   | 537,376 |   |
| Marketable equity securities     |   |               | 4,070     |   |             |   | 4,100 |   |   |   | - |   |   |   | - |   |
|                             |   | $                  | 1,522,426 |   |             | $      | 1,554,349 |   |   | $ | 579,572 |   |   | $ | 588,548 |   |

| (dollars in thousands) |   | June 30, |      |   | December 31, |   |
|------------------------|--------|----------|-----------|--------|--------------|--------|
|                   |   | 2010     |      |   | 2009         |   |
| Deposits               |   | $        | 717,274   |   |         | $      | 484,685 |   |
| Repurchase agreements  |   |     | 836,945   |   |         |   | 719,073 |   |
| FHLB advances          |   |     | 86,459    |   |         |   | 94,970 |   |
|                   |   | $        | 1,640,678 |   |         | $      | 1,298,728 |   |

----

| (dollars in thousands)                     |                                                                                                                                                                                                                                                      | June 30, |      |      | December 31, |   |
|--------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|-----------|-----------|--------------|--------|
|                                       |                                                                                                                                                                                                                                                      |     | 2010      |      |         | 2009   |   |
| Commercial and industrial loans and leases |                                                                                                                                                                                                                                                      | $        | 1,088,161 |      |         | $      | 1,168,506 |   |
| Real estate loans:                         |                                                                                                                                                                                                                                                      |     |      |      |         |   |   |   |
|                                       | Construction and land development                                                                                                                                                                                                                         |     |      | 404,292   |         |   |   | 534,315 |   |
|                                       | Residential                                                                                                                                                                                                                                               |     |      | 2,530,182 |         |   |   | 2,542,301 |   |
|                                       | Other (non-farm, non-residential)                                                                                                                                                                                                                         |     |      | 1,486,487 |         |   |   | 1,527,350 |   |
| Loans to individuals                       |                                                                                                                                                                                                                                                      |     | 247,113   |      |         |   | 252,028 |   |
|                                       | Total loans                                                                                                                                                                                                                                               |     |      | 5,756,235 |         |   |   | 6,024,500 |   |
| Allowance for loan and lease losses        |                                                                                                                                                                                                                                                      |     | (154,039  | )         |         |   | (146,271 | ) |
|                                       | Net loans                                                                                                                                                                                                                                                 |     | $         | 5,602,196 |         |   | $ | 5,878,229 |   |
|                                       |                                                                                                                                                                                                                                                      |     |      |      |         |   |   |   |   |
| (1)                                   | The classification of loans in the above table corresponds to defined bank regulatory reporting categories. Total loans included the reclassification of overdrafts as loans of $2.7 million at June 30, 2010 and $1.6 million at December 31, 2009. |     |
| (2)                                   | Loan classifications are shown net of unamortized costs of $1.9 million at June 30, 2010 and $44,000 at December 31, 2009.                                                                                                                                |     |

----

|                                |   | For the three months ended |    |   | For the six months ended |   |
|-------------------------------------|--------|----------------------------|---------|--------|--------------------------|--------|
| (dollars in thousands)              |   | June 30,                   |    |   | June 30,                 |   |
|                                |   | 2010                       |    |   | 2009                     |   |   | 2010 |   |   | 2009 |   |
| Beginning allowance                 |   | $                          | 153,850 |   |                     | $      | 86,273 |   |   | $ | 146,271 |   |   | $ | 84,006 |   |
| Provision for loan and lease losses |   |                       | 25,000  |   |                     |   | 37,500 |   |   |   | 57,500 |   |   |   | 55,025 |   |
| Recoveries                          |   |                       | 2,505   |   |                     |   | 2,299 |   |   |   | 5,066 |   |   |   | 3,085 |   |
| Chargeoffs                          |   |                       | (27,316 | )      |                     |   | (27,759 | ) |   |   | (54,798 | ) |   |   | (43,803 | ) |
| Net Chargeoffs                      |   |                       | (24,811 | )      |                     |   | (25,460 | ) |   |   | (49,732 | ) |   |   | (40,718 | ) |
| Ending allowance                    |   | $                          | 154,039 |   |                     | $      | 98,313 |   |   | $ | 154,039 |   |   | $ | 98,313 |   |

| (dollars in thousands)                                  |   | June 30, 2010        |    |   | December 31, 2009  |   |
|---------------------------------------------------------|--------|----------------------|---------|--------|--------------------|--------|
|                                                    |   | Balance              |    |   | Allowance          |   |   | Balance |   |   | Allowance |   |
| Impaired loans without a specific reserve               |   | $                    | 67,250  |   |               | $      | - |   |   | $ | 73,309 |   |   | $ | - |   |
| Impaired loans with a specific reserve                  |   |                 | 21,625  |   |               |   | 8,023 |   |   |   | 49,207 |   |   |   | 12,810 |   |
| Restructured loans                                      |   |                 | 7,324   |   |               |   | 2,195 |   |   |   | 576 |   |   |   | - |   |
|    Total impaired and restructured loans |   | $                    | 96,199  |   |               | $      | 10,218 |   |   | $ | 123,092 |   |   | $ | 12,810 |   |
|                                                    |   |                 |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Undrawn commitments to lend on restructured loans       |   | $                    | -       |   |               |   |   |   |   | $ | - |   |   |   |   |   |
|                                                    |   |                 |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
|                                                    |   | For the three months |    |   | For the six months |   |
| (dollars in thousands)                                  |   |  ended June 30, |    |   | ended June 30,     |   |
|                                                    |   |                 | 2010    |   |               |   | 2009 |   |   |   | 2010 |   |   |   | 2009 |   |
| Gross interest due on impaired loans                    |   | $                    | 1,860   |   |               | $      | 1,820 |   |   | $ | 3,984 |   |   | $ | 3,086 |   |
| Interest received on impaired loans                     |   |                 | 48      |   |               |   | 78 |   |   |   | 127 |   |   |   | 86 |   |
| Net impact of interest income of impaired loans         |   | $                    | 1,812   |   |               | $      | 1,751 |   |   | $ | 3,857 |   |   | $ | 3,000 |   |
|                                                    |   |                 |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Average recorded investment in impaired loans           |   | $                    | 105,547 |   |               | $      | 77,592 |   |   | $ | 112,134 |   |   | $ | 56,600 |   |

| (dollars in thousands)              |   | June 30, |      |   | Yield  |   |   | December 31, |   |   | Yield     |   |
|-------------------------------------|--------|----------|-----------|--------|--------|--------|--------|--------------|--------|--------|-----------|--------|
|                                |   | 2010     |      |   |   |   |   | 2009         |   |   |      |   |
| Savings                             |   | $        | 455,061   |   |   |   | 0.31   | %            |   | $      | 414,886   |   |   |   | 0.31 | % |
| NOW Accounts                        |   |     | 1,130,026 |   |   |   | 0.39   | %            |   |   | 1,284,143 |   |   |   | 0.69 | % |
| Money Market Accounts               |   |     | 1,763,631 |   |   |   | 0.91   | %            |   |   | 1,675,369 |   |   |   | 1.27 | % |
| CDs $100 or less                    |   |     | 1,543,947 |   |   |   | 2.08   | %            |   |   | 1,607,148 |   |   |   | 3.24 | % |
| CDs greater than $100               |   |     | 769,243   |   |   |   | 1.83   | %            |   |   | 1,003,656 |   |   |   | 2.28 | % |
| Total Interest Bearing Deposits     |   |     | 5,661,908 |   |   |   | 1.22   | %            |   |   | 5,985,202 |   |   |   | 1.85 | % |
| Total Non-Interest Bearing Deposits |   |     | 834,297   |   |   |   |   |         |   |   | 753,650   |   |   |   |   |   |
| Total Deposits                      |   | $        | 6,496,205 |   |   |   | 1.07   | %            |   | $      | 6,738,852 |   |   |   | 1.65 | % |

| (dollars in thousands) | 2010       |   | $      | 860,612   |   |
|------------------------|------------|--------|--------|-----------|--------|
|                   | 2011       |   |   | 988,950   |   |
|                   | 2012       |   |   | 238,178   |   |
|                   | 2013       |   |   | 84,747    |   |
|                   | 2014       |   |   | 104,366   |   |
|                   | Thereafter |   |   | 36,337    |   |
|                   |       |   | $      | 2,313,190 |   |

----

| (dollars in thousands)                                                      |   | June 30, 2010 |      |   | December 31, 2009   |   |
|-----------------------------------------------------------------------------|--------|---------------|-----------|--------|---------------------|--------|
|                                                                        |   | Balance       |      |   | Effective rate |   |   | Balance |   |   | Effective rate |   |
| Securities sold under repurchase agreements                                 |   |          |      |   |                |   |   |   |   |   |   |   |
|    and federal funds purchased                               |   | $             | 752,314   |   |                |   | 1.54 | % |   | $ | 737,323 |   |   |   | 1.94 | % |
| Short-term borrowings                                                       |   |          | 7,000     |   |                |   | 0.00 | % |   |   | 6,900 |   |   |   | 0.00 | % |
| Federal Home Loan Bank advances                                             |   |          | 706,784   |   |                |   | 4.34 | % |   |   | 756,803 |   |   |   | 4.17 | % |
| Subordinated debentures accounted for at fair value                         |   |          | 60,804    |   |                |   | 8.78 | % |   |   | 55,086 |   |   |   | 9.55 | % |
| Subordinated debentures accounted for at amortized cost (1)                 |   |          | 77,321    |   |                |   | 5.72 | % |   |   | 77,321 |   |   |   | 5.91 | % |
| Total borrowings and other debt obligations                                 |   | $             | 1,604,223 |   |                |   | 3.27 | % |   | $ | 1,633,433 |   |   |   | 3.52 | % |
|                                                                        |   |          |      |   |                |   |   |   |   |   |   |   |   |   |   |   |
| (1) The effective rate includes the impact of the interest rate swaps. |   |          |      |   |                |   |   |   |   |   |   |   |   |

| (dollars in thousands)                             |   | Three months ended June 30, |        |   | Six months ended June 30, |   |
|----------------------------------------------------|--------|-----------------------------|-------------|--------|---------------------------|--------|
|                                               |   | 2010                        |        |   | 2009                      |   |   | 2010 |   |   | 2009 |   |
| Income for EPS:                                    |   |                        |        |   |                      |   |   |   |   |   |   |   |
| Net (loss) income available to common shareholders |   | $                           | (5,544      | )      |                      | $      | (9,643 | ) |   | $ | (3,623 | ) |   | $ | (7,898 | ) |
|                                               |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Calculation of shares:                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average basic shares                      |   |                        | 126,045,667 |   |                      |   | 87,415,723 |   |   |   | 125,960,351 |   |   |   | 84,523,069 |   |
| Dilutive effect of:                                |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
|    Share-based compensation         |   |                        | -           |   |                      |   | - |   |   |   | - |   |   |   | - |   |
|    Warrants                         |   |                        | -           |   |                      |   | - |   |   |   | - |   |   |   | - |   |
| Weighted average fully diluted shares              |   |                        | 126,045,667 |   |                      |   | 87,415,723 |   |   |   | 125,960,351 |   |   |   | 84,523,069 |   |
|                                               |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per common share:                         |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                              |   | $                           | (0.04       | )      |                      | $      | (0.11 | ) |   | $ | (0.03 | ) |   | $ | (0.09 | ) |
| Diluted                                            |   | $                           | (0.04       | )      |                      | $      | (0.11 | ) |   | $ | (0.03 | ) |   | $ | (0.09 | ) |

----

|                                               |   | As of and for the Three Months Ended |      |
|----------------------------------------------------|--------|--------------------------------------|-----------|
|                                               |   | June 30, 2010                        |      |
|                                               |   | Community                            |      |   |   |   |   |   |   |
| (dollars in thousands)                             |   | Banking                              |      |   | Other |   |   | Consolidated |   |
| Total assets                                       |   | $                                    | 9,136,218 |   |   | $ | 85,909 |   |   | $ | 9,222,127 |   |
| Total deposits                                     |   |                                 | 6,496,205 |   |   |   | - |   |   |   | 6,496,205 |   |
| Net interest income (loss)                         |   |                                 | 70,566    |   |   |   | (1,923 | ) |   |   | 68,643 |   |
| Total non-interest income                          |   |                                 | 15,760    |   |   |   | 12,753 |   |   |   | 28,513 |   |
| Total non-interest expense                         |   |                                 | 59,536    |   |   |   | 7,027 |   |   |   | 66,563 |   |
| Net (loss) income available to common shareholders |   |                                 | (3,799    | ) |   |   | (1,745 | ) |   |   | (5,544 | ) |
|                                               |   |                                 |      |   |   |   |   |   |   |   |   |   |
|                                               |   | For the Six Months Ended             |      |
|                                               |   | June 30, 2010                        |      |
|                                               |   | Community                            |      |   |   |   |   |   |   |   |   |
| (dollars in thousands)                             |   | Banking                              |      |   | Other |   |   | Consolidated |   |
| Net interest income (loss)                         |   | $                                    | 139,684   |   |   | $ | (3,782 | ) |   | $ | 135,902 |   |
| Total non-interest income                          |   |                                 | 34,358    |   |   |   | 16,729 |   |   |   | 51,087 |   |
| Total non-interest expense                         |   |                                 | 110,288   |   |   |   | 13,932 |   |   |   | 124,220 |   |
| Net (loss) income available to common shareholders |   |                                 | 5,182     |   |   |   | (8,805 | ) |   |   | (3,623 | ) |
|                                               |   |                                 |      |   |   |   |   |   |   |   |   |   |
|                                               |   | As of and for the Three Months Ended |      |
|                                               |   | June 30, 2009                        |      |
|                                               |   | Community                            |      |   |   |   |   |   |   |   |   |
| (dollars in thousands)                             |   | Banking                              |      |   | Other |   |   | Consolidated |   |
| Total assets                                       |   | $                                    | 9,654,775 |   |   | $ | 103,138 |   |   | $ | 9,757,913 |   |
| Total deposits                                     |   |                                 | 6,811,654 |   |   |   | - |   |   |   | 6,811,654 |   |
| Net interest income (loss)                         |   |                                 | 62,672    |   |   |   | (1,592 | ) |   |   | 61,080 |   |
| Total non-interest income                          |   |                                 | 8,752     |   |   |   | 12,559 |   |   |   | 21,311 |   |
| Total non-interest expense                         |   |                                 | 51,565    |   |   |   | 11,087 |   |   |   | 62,652 |   |
| Net (loss) income available to common shareholders |   |                                 | (7,239    | ) |   |   | (2,404 | ) |   |   | (9,643 | ) |
|                                               |   |                                 |      |   |   |   |   |   |   |   |   |   |
|                                               |   | For the Six Months Ended             |      |
|                                               |   | June 30, 2009                        |      |
|                                               |   | Community                            |      |   |   |   |   |   |   |   |   |
| (dollars in thousands)                             |   | Banking                              |      |   | Other |   |   | Consolidated |   |
| Net interest income (loss)                         |   | $                                    | 123,288   |   |   | $ | (3,567 | ) |   | $ | 119,721 |   |
| Total non-interest income                          |   |                                 | 15,782    |   |   |   | 20,732 |   |   |   | 36,514 |   |
| Total non-interest expense                         |   |                                 | 99,942    |   |   |   | 19,403 |   |   |   | 119,345 |   |
| Net (loss) income available to common shareholders |   |                                 | (1,909    | ) |   |   | (5,989 | ) |   |   | (7,898 | ) |

----

| (dollars in thousands)                       |   | Six Months Ended June 30, |   |
|----------------------------------------------|--------|---------------------------|--------|
|                                         |   | 2010                      |   |   | 2009 |   |
| Service cost                                 |   | $                         | 546    |   |   | $ | 1,440 |   |
| Interest cost                                |   |                      | 1,112  |   |   |   | 1,018 |   |
| Expected return on plan assets               |   |                      | (1,401 | ) |   |   | (1,132 | ) |
| Amortization of prior service cost           |   |                      | (61    | ) |   |   | (258 | ) |
| Amortization of unrecognized net actual loss |   |                      | 453    |   |   |   | 682 |   |
| Net periodic benefit cost - recurring        |   |                      | 649    |   |   |   | 1,750 |   |
| Non-recurring curtailment gain               |   |                      | (4,066 | ) |   |   | - |   |
| Net periodic benefit (gain) cost             |   | $                         | (3,417 | ) |   | $ | 1,750 |   |

----

|                                                                |   |                                        |   |       | June 30, |      | December 31, |
|---------------------------------------------------------------------|--------|---------------------------------------------|--------|------------|----------|-----------|--------------|
| (dollars in thousands)                                              |   | 2010                                        |   |  2009 |
| Financial instruments whose contract amounts represent credit risk: |   |                                        |   |       |
|                                                                |   | Commitments to extend credit                | $      | 1,568,532  | $        | 1,561,877 |
|                                                                |   | Commitments to fund mortgages held for sale |   | 15,944     |     | 19,596    |
|                                                                |   | Commitments to sell mortgage to investors   |   | 40,737     |     | 31,908    |
|                                                                |   | Letters of credit                           |   | 167,383    |     | 175,394   |

| (dollars in thousands)                            |   |      |   |   | Notional |   |   |   |   |   |      |   |   | Receive |   |   | Pay    |   |   | Life    |   |
|---------------------------------------------------|--------|-----------|--------|--------|----------|--------|--------|--------|--------|--------|-----------|--------|--------|---------|--------|--------|--------|--------|--------|---------|--------|
|                                              |   | Positions |   |   | Amount   |   |   | Asset  |   |   | Liability |   |   | Rate    |   |   | Rate   |   |   | (Years) |   |
| June 30, 2010                                     |   |      |   |   |     |   |   |   |   |   |      |   |   |    |   |   |   |   |   |    |   |
| Pay fixed - receive floating                      |   |      |   |   |     |   |   |   |   |   |      |   |   |    |   |   |   |   |   |    |   |
|      interest rate swaps |   |      | 3      |   |     | $      | 75,000 |   |   | $      | -         |   |   | $       | 2,508  |   |   |   | 0.35   | %       |   |   | 3.26 | % |   |   | 1.33 |   |
| Total derivatives used in hedging                 |   |      |   |   |     |   |   |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
|      relationships       |   |      |   |   |     | $      | 75,000 |   |   | $      | -         |   |   | $       | 2,508  |   |   |   | 0.35   | %       |   |   | 3.26 | % |   |   | 1.33 |   |
|                                              |   |      |   |   |     |   |   |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
| December 31, 2009                                 |   |      |   |   |     |   |   |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
| Pay fixed - receive floating                      |   |      |   |   |     |   |   |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
|      interest rate swaps |   |      | 3      |   |     | $      | 75,000 |   |   | $      | -         |   |   | $       | 2,745  |   |   |   | 0.28   | %       |   |   | 3.26 | % |   |   | 1.83 |   |
| Total derivatives used in hedging                 |   |      |   |   |     |   |   |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
|      relationships       |   |      |   |   |     | $      | 75,000 |   |   | $      | -         |   |   | $       | 2,745  |   |   |   | 0.28   | %       |   |   | 3.26 | % |   |   | 1.83 |   |

| (dollars in thousands)                            |   |      |   |   | Notional |   |    |   |   |   |      |   |   | Receive |   |   | Pay    |   |   | Life    |   |
|---------------------------------------------------|--------|-----------|--------|--------|----------|--------|---------|--------|--------|--------|-----------|--------|--------|---------|--------|--------|--------|--------|--------|---------|--------|
|                                              |   | Positions |   |   | Amount   |   |    | Asset  |   |   | Liability |   |   | Rate    |   |   | Rate   |   |   | (Years) |   |
| June 30, 2010                                     |   |      |   |   |     |   |    |   |   |   |      |   |   |    |   |   |   |   |   |    |   |
| Receive fixed - pay floating                      |   |      |   |   |     |   |    |   |   |   |      |   |   |    |   |   |   |   |   |    |   |
|      interest rate swaps |   |      | 92     |   |     | $      | 228,001 |   |   | $      | 23,994    |   |   | $       | -      |   |   |   | 6.16   | %       |   |   | 2.02 | % |   |   | 5.11 |   |
| Pay fixed - receive floating                      |   |      |   |   |     |   |    |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
|      interest rate swaps |   |      | 92     |   |     |   | 228,001 |   |   |   | -         |   |   |    | 23,994 |   |   |   | 2.02   | %       |   |   | 6.16 | % |   |   | 5.11 |   |
| Net interest rate swaps                           |   |      |   |   |     | $      | 456,002 |   |   | $      | 23,994    |   |   | $       | 23,994 |   |   |   | 4.09   | %       |   |   | 4.09 | % |   |   | 5.11 |   |
|                                              |   |      |   |   |     |   |    |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
| December 31, 2009                                 |   |      |   |   |     |   |    |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
| Receive fixed - pay floating                      |   |      |   |   |     |   |    |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
|      interest rate swaps |   |      | 98     |   |     | $      | 268,156 |   |   | $      | 17,307    |   |   | $       | -      |   |   |   | 6.11   | %       |   |   | 1.90 | % |   |   | 5.04 |   |
| Pay fixed - receive floating                      |   |      |   |   |     |   |    |   |   |   |      |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
|      interest rate swaps |   |      | 98     |   |     |   | 268,156 |   |   |   | -         |   |   |    | 17,307 |   |   |   | 1.90   | %       |   |   | 6.11 | % |   |   | 5.04 |   |
| Net interest rate swaps                           |   |      |   |   |     | $      | 536,312 |   |   | $      | 17,307    |   |   | $       | 17,307 |   |   |   | 4.00   | %       |   |   | 4.00 | % |   |   | 5.04 |   |

----

|                         |   | Balance Sheet Effect at                       |   |  Income Statement Effect For The Six Months Ended |                                                 |
|------------------------------|--------|-----------------------------------------------|--------|--------------------------------------------------------|------------------------------------------------------|
| Derivative Activity          |   | June 30, 2010                                 |   | June 30, 2010                                          |                                                 |
|                         |   |                                          |   |                                                   |                                                 |   |   |   |   |
| Cash flow hedges:            |   |                                          |   |                                                   |                                                 |   |   |   |   |
| Pay fixed - receive floating |   | Increase to other liabilities of $2.5 million |   |                                                   | The ineffective portion is zero.                     |
| interest rate swaps          |   | and a corresponding decrease to OCI.          |   |                                                   | Increase to interest expense of $1.1 million for net |
|                         |   |                                          |   |                                                   | settlements.                                         |
|                         |   |                                          |   |                                                   |                                                 |   |   |   |   |
| Interest rate swaps:         |   | Increase to other assets/liabilities          |   |                                                   | No net effect on other operating income from         |
|                         |   | of $24.0 million.                             |   |                                                   | offsetting $6.7 million changes.                     |
|                         |   |                                          |   |                                                   |                                                 |   |   |   |   |
| Other derivatives:           |   |                                          |   |                                                   |                                                 |   |   |   |   |
| Forward sale commitments     |   | Increase to other assets of $502,000.         |   |                                                   | Increase to mortgage banking income of $596,000.     |
| Interest rate locks          |   | Increase to other liabilities of $608,000.    |   |                                                   | Decrease to mortgage banking income of $660,000.     |

----

| · | The markets for U.S. Government agency are active, but the exact (cusip) securities owned by the Company are traded thinly or infrequently. Therefore the price for these securities is determined by reference to transactions in securities with similar yields, maturities and other features (matrix priced).      |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | State and municipal bonds owned by the Company are traded thinly or infrequently, and as a result the fair value is estimated in reference to securities with similar yields, credit ratings, maturities, and in consideration of any prepayment assumptions obtained from market data.                                |
| · | Collateralized mortgage obligations and mortgage-backed securities are generally unique securities whose fair value is estimated using market information for new issues and adjusting for the features of a particular security by applying assumptions for prepayments, pricing spreads, yields and credit ratings.  |
| · | Corporate securities owned by the Company are traded thinly or infrequently. Therefore, the fair value for these securities is determined by reference to transactions in other issues of these securities with similar yields and features.                                                                           |

| · | Corporate securities owned by the Company are not traded in active markets and prices for securities with similar features are unavailable. The fair value for each security is estimated in reference to benchmark transactions by security type based upon yields, credit spreads and option features.                                                                                                                                                                                                                                                           |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | Marketable equity securities are securities not subject to ownership restrictions but are traded thinly on exchanges or over-the-counter. As a result, prices are not available on a consistent basis from published sources, and therefore additional quotations from brokers may be obtained. Additional indications of pricing, which are considered, include subsequent financing rounds or pending transactions. The reported fair value is based upon the information the Company’s judgment with respect to the information it is able to reliably obtain. |

----

|                                            |   |              |      |   | Quoted Prices    |          |    | Significant |        |   |         |        |
|-------------------------------------------------|--------|-------------------|-----------|--------|------------------|---------------|---------|-------------|-------------|--------|--------------|-------------|
|                                            |   |              |      |   | in Active        |          |    | Other       |        |   | Significant  |        |
|                                            |   | Total             |      |   | Markets for      |          |    | Observable  |        |   | Unobservable |        |
|                                            |   | Fair Value at     |      |   | Identical Assets |          |    | Inputs      |        |   | Inputs       |        |
|                                            |   | June 30, 2010     |      |   | (Level 1)        |          |    | (Level 2)   |        |   | (Level 3)    |        |
| (dollars in thousands)                          |   |              |      |   |             |          |    |        |        |   |         |        |
| Assets                                          |   |              |      |   |             |          |    |        |        |   |         |        |
| U.S. Treasury securities                        |   | $                 | 105,305   |   |             | $             | 105,305 |        |        | $      | -            |        |   | $ | - |   |
| U.S. Government agency securities               |   |              | 46,287    |   |             |          | -       |        |        |   | 46,287       |        |   |   | - |   |
| State and municipal bonds                       |   |              | 359,567   |   |             |          | -       |        |        |   | 359,567      |        |   |   | - |   |
| Mortgage-backed securities/                     |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
|   Collateralized mortgage obligations |   |              | 1,026,046 |   |             |          | -       |        |        |   | 1,026,046    |        |   |   | - |   |
| Corporate securities and other                  |   |              | 13,044    |   |             |          | 2,061   |        |        |   | 2,550        |        |   |   | 8,433 |   |
| Marketable equity securities                    |   |              | 4,100     |   |             |          | 3,001   |        |        |   | -            |        |   |   | 1,099 |   |
| Investment securities, available for sale       |   |              | 1,554,349 |   |             |          | 110,367 |        |        |   | 1,434,450    |        |   |   | 9,532 |   |
|                                            |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
| Forward sale commitments                        |   |              | 502       |   |             |          | -       |        |        |   | 502          |        |   |   | - |   |
| Interest rate swap agreements                   |   |              | 23,994    |   |             |          | -       |        |        |   | 23,994       |        |   |   | - |   |
|                                            |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
| Liabilities                                     |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
| Subordinated debentures                         |   | $                 | 60,804    |   |             | $             | 60,804  |        |        | $      | -            |        |   | $ | - |   |
| Interest rate locks                             |   |              | 608       |   |             |          | -       |        |        |   | 608          |        |   |   | - |   |
| Interest rate swap agreements                   |   |              | 26,502    |   |             |          | -       |        |        |   | 26,502       |        |   |   | - |   |
|                                            |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
|                                            |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
|                                            |   |              |      |   |             | Quoted Prices |    |        | Significant |   |         |        |   |   |
|                                            |   |              |      |   |             | in Active     |    |        | Other       |   |         | Significant |   |
|                                            |   | Total             |      |   | Markets for      |          |    | Observable  |        |   | Unobservable |        |
|                                            |   | Fair Value at     |      |   | Identical Assets |          |    | Inputs      |        |   | Inputs       |        |
|                                            |   | December 31, 2009 |      |   | (Level 1)        |          |    | (Level 2)   |        |   | (Level 3)    |        |
| (dollars in thousands)                          |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
| Assets                                          |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
| U.S. Treasury securities                        |   | $                 | 145,432   |   |             | $             | 145,432 |        |        | $      | -            |        |   | $ | - |   |
| U.S. Government agency securities               |   |              | 88,404    |   |             |          | -       |        |        |   | 88,404       |        |   |   | - |   |
| State and municipal bonds                       |   |              | 364,202   |   |             |          | -       |        |        |   | 364,202      |        |   |   | - |   |
| Mortgage-backed securities/                     |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
|   Collateralized mortgage obligations |   |              | 884,174   |   |             |          | -       |        |        |   | 884,174      |        |   |   | - |   |
| Corporate securities and other                  |   |              | 13,094    |   |             |          | 2,059   |        |        |   | 2,631        |        |   |   | 8,404 |   |
| Marketable equity securities                    |   |              | 4,361     |   |             |          | 3,171   |        |        |   |         |        |   |   | 1,190 |   |
| Investment securities, available for sale       |   |              | 1,499,667 |   |             |          | 150,662 |        |        |   | 1,339,411    |        |   |   | 9,594 |   |
|                                            |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
| Interest rate locks                             |   |              | 52        |   |             |          | -       |        |        |   | 52           |        |   |   | - |   |
| Interest rate swap agreements                   |   |              | 17,307    |   |             |          | -       |        |        |   | 17,307       |        |   |   | - |   |
|                                            |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
| Liabilities                                     |   |              |      |   |             |          |    |        |        |   |         |        |   |   |   |   |
| Subordinated debentures                         |   | $                 | 55,086    |   |             | $             | 55,086  |        |        | $      | -            |        |   | $ | - |   |
| Forward sale commitments                        |   |              | 94        |   |             |          | -       |        |        |   | 94           |        |   |   |   |   |
| Interest rate swap agreements                   |   |              | 20,052    |   |             |          | -       |        |        |   | 20,052       |        |   |   | - |   |

----

| (dollars in thousands)                        |   | Investment Securities |   |
|-----------------------------------------------|--------|-----------------------|--------|
|                                          |   | Available for Sale    |   |
|                                          |   | June 30, 2010         |   |   | December 31, 2009 |   |
| Assets                                        |   |                  |   |   |   |   |
| Beginning Balance                             |   | $                     | 9,594  |   |   | $ | 11,722 |   |
| Total gains/(losses)                          |   |                  |   |   |   |   |   |   |
| Included in earnings                          |   |                  | -      |   |   |   | (272 | ) |
| Included in other comprehensive income/(loss) |   |                  | 40     |   |   |   | (944 | ) |
| Purchases, issuances, and settlements         |   |                  | -      |   |   |   | - |   |
| Maturities                                    |   |                  | (102   | ) |   |   | - |   |
| Reclassification to Level 1                   |   |                  | -      |   |   |   | (912 | ) |
| Ending balance                                |   | $                     | 9,532  |   |   | $ | 9,594 |   |

| (dollars in thousands)            |   |                                              |   |   |                             |   |   |                          |   |   |    |   |
|-----------------------------------|--------|---------------------------------------------------|--------|--------|----------------------------------|--------|--------|-------------------------------|--------|--------|---------|--------|
|                              |   | Quoted Pricesin ActiveMarkets forIdentical Assets |   |   | SignificantOtherObservableInputs |   |   | SignificantUnobservableInputs |   |   |    |   |
| June 30, 2010:                    |   | (Level 1)                                         |   |   | (Level 2)                        |   |   | (Level 3)                     |   |   | Balance |   |
| Assets                            |   |                                              |   |   |                             |   |   |                          |   |   |    |   |
| Loans and leases held for sale    |   | $                                                 | -      |   |                             | $      | 15,944 |                          |   | $      | -       |   |   | $ | 15,944 |   |
| Impaired loans, net               |   |                                              | -      |   |                             |   | -      |                          |   |   | 85,981  |   |   |   | 85,981 |   |
| OREO and other repossessed assets |   |                                              | -      |   |                             |   | -      |                          |   |   | 8,974   |   |   |   | 8,974 |   |
|                              |   |                                              |   |   |                             |   |   |                          |   |   |    |   |   |   |   |   |
| December 31, 2009:                |   |                                              |   |   |                             |   |   |                          |   |   |    |   |   |   |   |   |
| Assets                            |   |                                              |   |   |                             |   |   |                          |   |   |    |   |   |   |   |   |
| Loans and leases held for sale    |   | $                                                 | 5,595  |   |                             | $      | 12,433 |                          |   | $      | -       |   |   | $ | 18,028 |   |
| Impaired loans, net               |   |                                              | -      |   |                             |   | -      |                          |   |   | 110,282 |   |   |   | 110,282 |   |
| OREO and other repossessed assets |   |                                              | -      |   |                             |   | -      |                          |   |   | 4,208   |   |   |   | 4,208 |   |

----

| (dollars in thousands)                                                  |   | June 30, 2010 |      |   | December 31, 2009 |   |
|-------------------------------------------------------------------------|--------|---------------|-----------|--------|-------------------|--------|
|                                                                    |   | Carrying      |      |   |              |   |   | Carrying |   |   |   |   |
|                                                                    |   | Amount        |      |   | Fair Value        |   |   | Amount |   |   | Fair Value |   |
|           ASSETS      |   |          |      |   |              |   |   |   |   |   |   |   |
| Cash and cash equivalents                                               |   | $             | 602,341   |   |              | $      | 602,341 |   |   | $ | 603,257 |   |   | $ | 603,257 |   |
| Investment securities available for sale                                |   |          | 1,554,349 |   |              |   | 1,554,349 |   |   |   | 1,499,667 |   |   |   | 1,499,667 |   |
| Investment securities held to maturity                                  |   |          | 579,572   |   |              |   | 588,548 |   |   |   | 601,923 |   |   |   | 603,915 |   |
| Loans and leases held for sale                                          |   |          | 15,944    |   |              |   | 15,944 |   |   |   | 18,028 |   |   |   | 18,028 |   |
|                                                                    |   |          |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Commercial and industrial loans and leases                              |   |          | 1,088,161 |   |              |   | 1,040,664 |   |   |   | 1,162,911 |   |   |   | 1,003,558 |   |
| Real Estate loans:                                                      |   |          |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
|      Construction and land development         |   |          | 404,292   |   |              |   | 386,645 |   |   |   | 534,315 |   |   |   | 455,004 |   |
|      Residential                               |   |          | 2,530,182 |   |              |   | 2,419,743 |   |   |   | 2,542,301 |   |   |   | 2,346,243 |   |
|      Other (non-farm, non-residential)         |   |          | 1,486,487 |   |              |   | 1,421,604 |   |   |   | 1,527,350 |   |   |   | 1,403,654 |   |
| Loans to individuals                                                    |   |          | 231,169   |   |              |   | 221,079 |   |   |   | 239,595 |   |   |   | 212,039 |   |
| Total loans                                                             |   |          | 5,740,291 |   |              |   | 5,489,735 |   |   |   | 6,006,472 |   |   |   | 5,420,498 |   |
| Allowance for loan and lease losses                                     |   |          | (154,039  | )      |              |   | - |   |   |   | (146,271 | ) |   |   | - |   |
| Net loans                                                               |   |          | 5,586,252 |   |              |   | 5,489,735 |   |   |   | 5,860,201 |   |   |   | 5,420,498 |   |
|                                                                    |   |          |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| OREO and other repossessed assets                                       |   |          | 8,974     |   |              |   | 8,974 |   |   |   | 4,208 |   |   |   | 4,208 |   |
| Forward sale commitments                                                |   |          | 502       |   |              |   | 502 |   |   |   | - |   |   |   | - |   |
| Interest rate locks                                                     |   |          | -         |   |              |   | - |   |   |   | 52 |   |   |   | 52 |   |
|                                                                    |   |          |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
|           LIABILITIES |   |          |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest bearing deposits                                           |   | $             | 834,297   |   |              | $      | 834,297 |   |   | $ | 753,650 |   |   | $ | 753,650 |   |
| Interest-bearing deposits                                               |   |          | 3,348,718 |   |              |   | 3,348,718 |   |   |   | 3,374,398 |   |   |   | 3,374,398 |   |
| Deposits with stated maturities                                         |   |          | 2,313,190 |   |              |   | 2,331,600 |   |   |   | 2,610,804 |   |   |   | 2,624,755 |   |
| Repurchase agreements, federal funds                                    |   |          |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| purchased and short-term borrowings                                     |   |          | 759,314   |   |              |   | 759,314 |   |   |   | 744,223 |   |   |   | 744,223 |   |
| FHLB advances                                                           |   |          | 706,784   |   |              |   | 794,419 |   |   |   | 756,803 |   |   |   | 828,887 |   |
| Subordinated debentures                                                 |   |          | 138,125   |   |              |   | 138,125 |   |   |   | 132,407 |   |   |   | 132,407 |   |
| Forward sale commitments                                                |   |          | -         |   |              |   | - |   |   |   | 94 |   |   |   | 94 |   |
| Interest rate locks                                                     |   |          | 608       |   |              |   | 608 |   |   |   | - |   |   |   | - |   |

----

| · | changes the derecognition guidance for transferors of financial assets;                          |
|--------|--------------------------------------------------------------------------------------------------|
| · | eliminates the exemption from consolidation for qualifying special-purpose entities (QSPEs); and |
| · | requires additional disclosures about all transfers of financial assets.                         |

| · | changes how an entity determines whether it is the primary beneficiary of a VIE; |
|--------|----------------------------------------------------------------------------------|
| · | whether that VIE should be consolidated; and                                     |
| · | requires significantly more disclosures about its involvement with VIEs.         |

----

| (Dollars in thousands) |   | December 31, 2009 |     |   | Activity |   |   | June 30, 2010 |   |
|------------------------|--------|-------------------|----------|--------|----------|--------|--------|---------------|--------|
|                   |   |              |     |   |     |   |   |          |   |
| Goodwill               |   | $                 | 556,623  |   |     | $      | 95     |          |   | $ | 556,718 |   |
| Accumulated Impairment |   |              | (275,000 | )      |     |   | (8,250 | )             |   |   | (283,250 | ) |
| Goodwill, net          |   | $                 | 281,623  |   |     | $      | (8,155 | )             |   | $ | 273,468 |   |

----

Item 

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

----

| · | Non-interest expense included an $8.3 million non-tax deductible goodwill impairment charge resulting from the pending sale of Christiana, announced on June 23, 2010.                                           |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                             |
| · | Income tax expense for the three months ended June 30, 2010 included an additional $8.1 million of income taxes related to the planned redemption of separate account bank-owned life insurance (BOLI) policies. |
|   |                                                                                                                                                                                                             |
| · | Non-interest income for the three months ended June 30, 2009 included $7.1 million, or $4.6 million after-tax, for net impairment on investment securities.                                                      |
|   |                                                                                                                                                                                                             |
| · | Non-interest expense for the second quarter of 2009 included a special assessment from the FDIC of $4.7 million, or $3.0 million after-tax.                                                                      |
|   |                                                                                                                                                                                                             |
| · | Non-interest income included a $1.5 million gain, or $1.0 million after-tax, on subordinated debentures accounted for at fair value compared to $0.1 million in the prior year quarter.                          |

| · | Interest expense declined $15.1 million to $29.7 million for the three months ended June 30, 2010.                                     |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------|
| · | Interest income declined $7.5 million for the three months ended to $98.3 million.                                                     |
| · | The resulting net interest margin improved to 3.50% for the three months ended June 30, 2010 compared to 3.06% for the same period in 2009. |

| · | The provision for the three months ended June 30, 2010 was consistent with net charge-offs of $24.8 million for the period.  |
|--------|-----------------------------------------------------------------------------------------------------------------------------------|
| · | The allowance for loan and lease losses (the “allowance”) increased to $154.0 million at June 30, 2010.               |

| · | Goodwill impairment from the planned sale of Christiana totaling $8.3 million was recorded during the second quarter of 2010.  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------|
| · | Salaries, wages, and employee benefits decreased $1.3 million.                                                                 |

----

| · | FDIC insurance expense decreased $2.5 million to $4.1 million due to the special assessment by the FDIC in the second quarter of 2009.  |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------|
| · | Other operating expenses decreased $0.4 million.                                                                                             |

|   | · | Non-interest expense included an $8.3 million non-tax deductible goodwill impairment charge resulting from the pending sale of Christiana. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Non-interest income for the six months ended June 30, 2009 included $14.9 million, or $9.7 million after-tax, for net impairment on investment securities compared to $0.6 million for the six months ended June 30, 2010. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Income tax expense for the six months ended June 30, 2010 included $8.1 million of income taxes related to the planned redemption of separate account BOLI policies. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Non-interest income included a $5.7 million loss, or $3.7 million after-tax, on subordinated debentures accounted for at fair value compared to a loss of $1.8 million, or $1.2 million after-tax, in the prior year-to-date period. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Non-interest expense for 2009 included a second quarter special assessment from the FDIC of $4.7 million, or $3.0 million after-tax. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Non-interest income included a $4.1 million, or $2.6 million after-tax, gain on the first quarter 2010 curtailment of the Company’s defined benefit pension plan. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Interest expense declined $30.8 million to $61.2 million for the six months ended June 30, 2010. |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | Interest income declined $14.7 million for the six months ended to $197 million. |
|--------|--------|----------------------------------------------------------------------------------|

|   | · | Year-to-date net interest margin improved to 3.47% for the six months ended June 30, 2010 compared to 3.09% in 2009. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|

|   | · | Provision exceeded net charge-offs of $49.7 million by $7.8 million compared to charge-offs of $40.7 million in the first half of 2009. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The allowance increased from $146.3 million at December 31, 2009 to $154.0 million at June 30, 2010. |
|--------|--------|------------------------------------------------------------------------------------------------------|

----

|   | · | Non-performing loans declined $26.6 million from $126 million at December 31, 2009 to $99.2 million at June 30, 2010. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------|

|   | · | Coverage of the allowance as a percentage of non-performing loans increased to 155% at June 30, 2010 compared to 116% at December 31, 2009. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The allowance to total loans and leases increased from 2.43% at December 31, 2009 to 2.68% at June 30, 2010. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | Net impairment on investment securities and realized gains on investments improved non-interest income for the six months ended June 30, 2010 by $16.8 million as June 30, 2009 included $14.9 million for net impairment on investment securities and $2.3 million of realized losses from investment sales compared to impairments of $0.6 million and gains on security sales of $0.2 million for current year-to-date period. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company recognized a gain from the first quarter curtailment of its defined benefit pension plan of $4.1 million for the six months ended June 30, 2010. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Mortgage banking income decreased $2.9 million to $2.4 million year-to-date. |
|--------|--------|------------------------------------------------------------------------------|

|   | · | The loss on subordinated debentures accounted for at fair value resulted in a decrease of $3.9 million as year-to-date 2010 results included a $5.7 million loss compared to a loss of $1.8 million in the prior year-to-date period. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Goodwill impairment from the planned sale of Christiana totaling $8.3 million was recorded during the second quarter of 2010. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------|

|   | · | Salaries, wages, and employee benefits decreased $3.8 million. |
|--------|--------|----------------------------------------------------------------|

|   | · | Annualized return on average tangible common equity excludes the average balance of acquisition-related goodwill and intangible assets and the average balance of preferred equity in determining average tangible shareholders’ equity.  Annualized return on average tangible equity provides a method to assess management’s success in utilizing the company’s tangible common capital. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Tangible book value excludes from total equity goodwill, intangible assets and preferred stock.  Banking and financial institution regulators also exclude goodwill and intangible assets from shareholders’ equity when assessing the capital adequacy of a financial institution.  Tangible book value provides a method to assess the level of tangible net assets on a per share basis. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Adjusted net income excludes the effects of certain after-tax gains and losses.  Adjusted net income provides a method to assess earnings performance by excluding items that management believes are not comparative among the periods presented. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (dollars in thousands)                                      |   | Three-months ended June 30, |   |   | Six-months ended June 30, |   |
|-------------------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|
|                                                        |   | 2010                        |   |   | 2009                      |   |   | 2010 |   |   | 2009 |   |
| Adjusted net income reconciliation                          |   |                        |   |   |                      |   |   |   |   |   |   |   |
| Net loss available to common shareholders                   |   | $                           | (5,544 | )      |                      | $      | (9,643 | ) |   | $ | (3,623 | ) |   | $ | (7,898 | ) |
| After tax gain on pension plan curtailment                  |   |                        | -      |   |                      |   | - |   |   |   | (2,643 | ) |   |   | - |   |
| After tax unrealized fair market value loss on              |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| NPB Capital Trust II Preferred Securities                   |   |                        | (1,003 | )      |                      |   | (33 | ) |   |   | 3,717 |   |   |   | 1,201 |   |
| OTTI                                                        |   |                        | -      |   |                      |   | 4,639 |   |   |   | - |   |   |   | 9,699 |   |
| After tax special FDIC assessment                           |   |                        | -      |   |                      |   | 3,006 |   |   |   | - |   |   |   | 3,006 |   |
| BOLI tax expense                                            |   |                        | 8,081  |   |                      |   | - |   |   |   | 8,081 |   |   |   | - |   |
| Goodwill impairment                                         |   |                        | 8,250  |   |                      |   | - |   |   |   | 8,250 |   |   |   | - |   |
| Adjusted net income (loss) available to common shareholders |   | $                           | 9,784  |   |                      | $      | (2,031 | ) |   | $ | 13,782 |   |   | $ | 6,008 |   |
|                                                        |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share                                          |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Net loss available to common shareholders                   |   | $                           | (0.04  | )      |                      | $      | (0.11 | ) |   | $ | (0.03 | ) |   | $ | (0.09 | ) |
| After tax gain on pension plan curtailment                  |   |                        | -      |   |                      |   | - |   |   |   | (0.02 | ) |   |   | - |   |
| After tax unrealized fair market value loss on              |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| NPB Capital Trust II Preferred Securities                   |   |                        | (0.01  | )      |                      |   | - |   |   |   | 0.03 |   |   |   | 0.01 |   |
| OTTI                                                        |   |                        | -      |   |                      |   | 0.05 |   |   |   | - |   |   |   | 0.11 |   |
| After tax special FDIC assessment                           |   |                        | -      |   |                      |   | 0.03 |   |   |   | - |   |   |   | 0.04 |   |
| BOLI tax expense                                            |   |                        | 0.06   |   |                      |   | - |   |   |   | 0.06 |   |   |   | - |   |
| Goodwill impairment                                         |   |                        | 0.07   |   |                      |   | - |   |   |   | 0.07 |   |   |   | - |   |
| Adjusted net income (loss) available to common shareholders |   | $                           | 0.08   |   |                      | $      | (0.03 | ) |   | $ | 0.11 |   |   | $ | 0.07 |   |

|                                                                    |   | Three-months ended June 30, |      |   | Six-months ended June 30, |   |
|-------------------------------------------------------------------------|--------|-----------------------------|-----------|--------|---------------------------|--------|
|                                                                    |   | 2010                        |      |   | 2009                      |   |   | 2010 |   |   | 2009 |   |
| Return on average tangible common equity                                |   |                        |      |   |                      |   |   |   |   |   |   |   |
| Return on average shareholders' equity                                  |   |                        | -1.32     | %      |                      |   | -2.52 | % |   |   | 0.07 | % |   |   | -0.64 | % |
|      Effect of preferred equity                |   |                        | -1.08     | %      |                      |   | -1.14 | % |   |   | -0.86 | % |   |   | -0.89 | % |
|      Effect of goodwill and intangibles        |   |                        | -1.20     | %      |                      |   | -4.67 | % |   |   | -0.39 | % |   |   | -2.00 | % |
|      Return on average tangible common equity  |   |                        | -3.60     | %      |                      |   | -8.33 | % |   |   | -1.18 | % |   |   | -3.53 | % |
| Average tangible equity:                                                |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
|      Average shareholders' equity              |   | $                           | 1,076,188 |   |                      | $      | 1,199,198 |   |   | $ | 1,075,623 |   |   | $ | 1,187,909 |   |
|      Average preferred equity                  |   |                        | (148,117  | )      |                      |   | (144,408 | ) |   |   | (148,054 | ) |   |   | (144,509 | ) |
|      Average goodwill and intangibles          |   |                        | (309,851  | )      |                      |   | (590,593 | ) |   |   | (310,812 | ) |   |   | (591,698 | ) |
|      Average  tangible common equity |   | $                           | 618,220   |   |                      | $      | 464,197 |   |   | $ | 616,757 |   |   | $ | 451,702 |   |

----

|   | · | Loans to individuals to finance the purchase of personal assets or activities are substantially collateralized by residential real estate. This represents $247 million or 4.3% of total loans and leases, which is consistent with December 31, 2009 levels. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Residential real estate loans totaled $2.5 billion or 44.0% of total loans, a decrease of $12.1 million since December 31, 2009. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------|

|   | · | Commercial and industrial loans and leases totaled $1.1 billion and comprised 18.9% of total loans and leases outstanding at June 30, 2010. The balance declined $80.3 million from $1.2 billion at December 31, 2009. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Real estate construction and land development loans decreased $130 million, or 24.3%, during the year to $404 million from $534 million at December 31, 2009.  Real estate construction and land development loans comprised 7.0% of the loan portfolio at June 30, 2010. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Other real estate loans decreased $40.9 million to $1.5 billion at June 30, 2010 and comprised 25.8% of total loans outstanding. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Unemployment |
|--------|--------|--------------|

|   | · | Delinquency |
|--------|--------|-------------|

|   | · | Trends in loan volume |
|--------|--------|-----------------------|

|   | · | Portfolio growth |
|--------|--------|------------------|

|   | · | Portfolio concentrations |
|--------|--------|--------------------------|

|   | · | Board and loan review oversight |
|--------|--------|---------------------------------|

|   | · | Exceptions to policy |
|--------|--------|----------------------|

| (dollars in thousands)                                |   | June 30 |      |   | December 31, |   |
|-------------------------------------------------------|--------|---------|-----------|--------|--------------|--------|
|                                                  |   | 2010    |      |   | 2009         |   |
|                                                  |   |    |      |   |         |   |
| Nonperforming loans                                   |   | $       | 99,196    |   |         | $      | 125,786 |   |
| Nonperforming loans to total loans                    |   |    | 1.72      | %      |         |   | 2.09 | % |
| Delinquent loans                                      |   | $       | 30,174    |   |         | $      | 25,464 |   |
| Delinquent loans to total loans                       |   |    | 0.52      | %      |         |   | 0.42 | % |
| Classified loans                                      |   | $       | 512,628   |   |         | $      | 501,485 |   |
| Classified loans to total loans                       |   |    | 8.91      | %      |         |   | 8.32 | % |
| Tier 1 capital and ALLL                               |   | $       | 987,565   |   |         | $      | 955,489 |   |
| Classified loans to Tier 1 capital and ALLL           |   |    | 51.91     | %      |         |   | 52.45 | % |
| Total loans and leases, including loans held for sale |   | $       | 5,756,235 |   |         | $      | 6,024,500 |   |

----

|                                                       |   | June 30, |      |   | December 31, |   |
|------------------------------------------------------------|--------|----------|-----------|--------|--------------|--------|
| (dollars in thousands)                                     |   | 2010     |      |   | 2009         |   |
| Nonaccrual loans and leases                                |   | $        | 88,875    |   |         | $      | 122,516 |   |
| Restructured loans                                         |   |     | 7,324     |   |         |   | 576 |   |
|     Impaired and restructured loans    |   |     | 96,199    |   |         |   | 123,092 |   |
| Loans past due 90 or more days as to interest or principal |   |     | 2,997     |   |         |   | 2,694 |   |
|    Total non-performing loans               |   |     | 99,196    |   |         |   | 125,786 |   |
| Other real estate owned and other repossessed assets       |   |     | 8,974     |   |         |   | 4,208 |   |
|    Total non-performing assets              |   | $        | 108,170   |   |         | $      | 129,994 |   |
|                                                       |   |     |      |   |         |   |   |   |
| Total loans and leases, including loans held for sale      |   | $        | 5,756,235 |   |         | $      | 6,024,500 |   |
| Average total loans and leases                             |   | $        | 5,920,790 |   |         | $      | 6,286,831 |   |
| Allowance for loan and lease losses                        |   | $        | 154,039   |   |         | $      | 146,271 |   |
|                                                       |   |     |      |   |         |   |   |   |
| Allowance for loan and lease losses to:                    |   |     |      |   |         |   |   |   |
|    Non-performing assets                    |   |     | 142       | %      |         |   | 113 | % |
|    Non-performing loans                     |   |     | 155       | %      |         |   | 116 | % |
|    Total loans and leases                   |   |     | 2.68      | %      |         |   | 2.43 | % |
|    Average total loans and leases           |   |     | 2.60      | %      |         |   | 2.33 | % |

|                                                            |   | June 30, |   |   | December 31, |   |
|-----------------------------------------------------------------|--------|----------|--------|--------|--------------|--------|
|                                                            |   | 2010     |   |   | 2009         |   |
| Non-accrual loans and leases with partial charge-offs           |   | $        | 40,026 |   |         | $      | 38,933 |   |
| Life-to-date partial charge-offs on nonaccrual loans and leases |   |     | 44,745 |   |         |   | 45,645 |   |
| Charge-off rate of nonaccrual loans and leases                  |   |     | 52.8   | %      |         |   | 54.0 | % |

----

| (dollars in thousands)                                 |   | June 30, |    |   | December 31, |   |
|--------------------------------------------------------|--------|----------|---------|--------|--------------|--------|
|                                                   |   | 2010     |    |   | 2009         |   |
| Commercial and Industrial                              |   | $        | 33,712  |   |         | $      | 40,618 |   |
| Real Estate-Permanent                                  |   |     | 18,958  |   |         |   | 19,277 |   |
| Real Estate-Construction                               |   |     | 35,728  |   |         |   | 46,832 |   |
| Leases                                                 |   |     | 468     |   |         |   | 396 |   |
| Residential Mortgages                                  |   |     | 11,422  |   |         |   | 12,800 |   |
| Consumer                                               |   |     | 4,227   |   |         |   | 6,842 |   |
| Loans Past Due 90+Days                                 |   |     | 2,997   |   |         |   | 2,694 |   |
| Total Other Repossessed Assets                         |   |     | 658     |   |         |   | 535 |   |
| Total Non-performing Assets + Loans 90 Days Past Due   |   | $        | 108,170 |   |         | $      | 129,994 |   |
|                                                   |   |     |    |   |         |   |   |   |
| (1) Based upon the Company's internal classifications. |   |     |    |   |         |   |   |   |

| (dollars in thousands)                                 |   | For the three months ended |   |   | For the six months ended |   |
|--------------------------------------------------------|--------|----------------------------|--------|--------|--------------------------|--------|
|                                                   |   | June 30                    |   |   | June 30                  |   |
|                                                   |   | 2010                       |   |   | 2009                     |   |   | 2010 |   |   | 2009 |   |
| Commercial and Industrial                              |   | $                          | 8,608  |   |                     | $      | 14,791 |   |   | $ | 10,770 |   |   | $ | 21,388 |   |
| Real Estate-Permanent                                  |   |                       | 1,510  |   |                     |   | 3,029 |   |   |   | 1,869 |   |   |   | 3,023 |   |
| Real Estate-Construction                               |   |                       | 6,327  |   |                     |   | 5,038 |   |   |   | 24,754 |   |   |   | 6,272 |   |
| Leases                                                 |   |                       | 5      |   |                     |   | 274 |   |   |   | 103 |   |   |   | 362 |   |
| Residential Mortgages                                  |   |                       | 5,368  |   |                     |   | 978 |   |   |   | 8,068 |   |   |   | 1,543 |   |
| Consumer                                               |   |                       | 2,902  |   |                     |   | 1,235 |   |   |   | 3,988 |   |   |   | 7,868 |   |
| Overdraft                                              |   |                       | 91     |   |                     |   | 115 |   |   |   | 180 |   |   |   | 262 |   |
| Net Loans Charged-off                                  |   | $                          | 24,811 |   |                     | $      | 25,460 |   |   | $ | 49,732 |   |   | $ | 40,718 |   |
|                                                   |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Net charge-offs (annualized) to:                       |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Total loans and leases                                 |   |                       | 1.72   | %      |                     |   | 1.61 | % |   |   | 1.74 | % |   |   | 1.30 | % |
| Average total loans and leases                         |   |                       | 1.70   | %      |                     |   | 1.60 | % |   |   | 1.69 | % |   |   | 1.29 | % |
| Allowance for loan and lease losses                    |   |                       | 64.43  | %      |                     |   | 103.60 | % |   |   | 65.11 | % |   |   | 83.52 | % |
|                                                   |   |                       |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| (1) Based upon the Company's internal classifications. |   |                       |   |   |                     |   |   |   |   |   |   |   |   |

|   | · | Non-performing real estate loans decreased 17.3%, or $11.4 million from December 31, 2009. Charge-offs in real-estate loans totaled $26.6 million during the six months ended June 30, 2010.                                                                                      |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | Non-performing commercial and industrial loans declined 17.0% or $6.9 million. Charge-offs in C&I loans totaled $10.8 million during the six months ended June 30, 2010.                                                                                                      |
|   | · | Non-performing residential mortgages decreased $1.4 million, to $11.4 million, primarily due to the sale of purchased mortgage loans offset by $7.3 million of residential mortgage modifications. Residential mortgage charge-offs were $8.1 million for the year to date 2010.  |

----

|                                |   | For the three months ended |    |   | For the six months ended |   |
|-------------------------------------|--------|----------------------------|---------|--------|--------------------------|--------|
| (dollars in thousands)              |   | June 30,                   |    |   | June 30,                 |   |
|                                |   | 2010                       |    |   | 2009                     |   |   | 2010 |   |   | 2009 |   |
| Beginning Allowance                 |   | $                          | 153,850 |   |                     | $      | 86,273 |   |   | $ | 146,271 |   |   | $ | 84,006 |   |
| Provision for loan and lease losses |   |                       | 25,000  |   |                     |   | 37,500 |   |   |   | 57,500 |   |   |   | 55,025 |   |
| Recoveries                          |   |                       | 2,505   |   |                     |   | 2,299 |   |   |   | 5,066 |   |   |   | 3,085 |   |
| Chargeoffs                          |   |                       | (27,316 | )      |                     |   | (27,759 | ) |   |   | (54,798 | ) |   |   | (43,803 | ) |
| Net Chargeoffs                      |   |                       | (24,811 | )      |                     |   | (25,460 | ) |   |   | (49,732 | ) |   |   | (40,718 | ) |
| Ending Allowance                    |   | $                          | 154,039 |   |                     | $      | 98,313 |   |   | $ | 154,039 |   |   | $ | 98,313 |   |

|                                      |   | June 30, |    |   | December 31, |   |
|-------------------------------------------|--------|----------|---------|--------|--------------|--------|
| (dollars in thousands)                    |   | 2010     |    |   | 2009         |   |
|                                      |   |     |    |   |         |   |
| Specific reserves                         |   | $        | 10,218  |   |         | $      | 12,810 |   |
| Allocated reserves                        |   |     | 138,200 |   |         |   | 129,700 |   |
| Unallocated reserves                      |   |     | 5,621   |   |         |   | 3,761 |   |
| Total Allowance for Loan and Lease Losses |   | $        | 154,039 |   |         | $      | 146,271 |   |

----

----

|   | · | Core Deposit Intangibles |
|--------|--------|--------------------------|

|   | · | Loans |
|--------|--------|-------|

|   | · | Certificates of deposit |
|--------|--------|-------------------------|

|   | · | Borrowings (FHLB Advances and Repurchase agreements) |
|--------|--------|------------------------------------------------------|

|   | · | Non-interest bearing deposits increased $80.6 million, or 10.7%, to $834 million at June 30, 2010 from $754 million at December 31, 2009. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Overall, core deposits increased $55.0 million during 2010, $4.2 billion at June 30, 2010. The increase was due to an $88.3 million increase in money market, an increase in savings of $40.2 million and the aforementioned increase in non-interest bearing deposits. The increases were offset by a decrease in NOW accounts of $154.1 million. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Certificates of deposits decreased $298 million, or 11.4% from $2.6 billion at December 31, 2009 to $2.3 billion at June 30, 2010. The decline was primarily in CDs with balances greater than $100 thousand which decreased $234 million, or 23.3% to $769 million at June 30, 2010. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Securities sold under repurchase agreements and federal funds purchased totaled $752 million at  June 30, 2010, and increased $15.0 million, or 2.0%, from $737 million at December 31, 2009 due   to additional borrowings under securities repurchase agreements resulting from an increase in cash management repurchase agreements with new customers. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Short-term borrowings are comprised of treasury, tax and loan payments and increased $0.1 million from $6.9 million at December 31, 2009 to $7.0 million at June 30, 2010. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | FHLB advances decreased $50.0 million, or 6.61%, to $707 million at June 30, 2010 from $757 million at December 31, 2009, due to advances that matured during the year. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Subordinated debentures increased $5.7 million from $132 million at December 31, 2009 to $138 million at June 30, 2010, due to an increase in fair value of the $65.2 million (par) of the subordinated debentures accounted for at fair value. This increase was recorded as a reduction to non-interest income in the statement of operations for the six months ended June 30, 2010. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Net income of $0.4 million; |
|--------|--------|-----------------------------|

|   | · | Cash dividends on preferred stock of $3.8 million; |
|--------|--------|----------------------------------------------------|

|   | · | Cash dividends on common stock of $2.5 million; and |
|--------|--------|-----------------------------------------------------|

|   | · | An increase to accumulated other comprehensive income of $11.6 million. |
|--------|--------|------------------------------------------------------------------------------|

|   | · | Increase to the fair market value of investment securities available for sale of $12.9 million; |
|--------|--------|-------------------------------------------------------------------------------------------------|

|   | · | $0.2 million increase from a decrease in the fair market value of the effective portion of cash flow hedges which are in a liability position; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Offsetting the two previous items was a $1.6 million decrease resulting from the pension plan curtailment during the first quarter of 2010, which reclassified the unrecognized prior service cost (gain) out of AOCI and into the consolidated statement of operations. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                               |   | 2010    |      |   | 2009     |   |
|------------------------------------------------------------------------------------|--------|---------|-----------|--------|----------|--------|
| (dollars in thousands)                                                             |   | Average |      |   |     |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
|                                                                               |   | Balance |      |   | Interest |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| INTEREST EARNING ASSETS:                                                           |   |    |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest earning deposits at banks and      federal funds sold |   | $       | 399,704   |   |     | $      | 466 |   |   |   | 0.23 | % |   | $ | 247,380 |   |   | $ | 260 |   |   |   | 0.20 | % |
|                                                                               |   |    |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury                                                                      |   |    | 145,584   |   |     |   | 298 |   |   |   | 0.41 | % |   |   | 20,315 |   |   |   | 17 |   |   |   | 0.17 | % |
| U.S. Government agencies                                                           |   |    | 1,176,592 |   |     |   | 20,948 |   |   |   | 3.59 | % |   |   | 976,580 |   |   |   | 21,073 |   |   |   | 4.35 | % |
| State and municipal                                                                |   |    | 796,114   |   |     |   | 26,859 |   |   |   | 6.80 | % |   |   | 820,518 |   |   |   | 28,333 |   |   |   | 6.96 | % |
| Other bonds and securities                                                         |   |    | 98,609    |   |     |   | 1,309 |   |   |   | 2.68 | % |   |   | 142,359 |   |   |   | 2,220 |   |   |   | 3.14 | % |
| Total investments                                                                  |   |    | 2,216,899 |   |     |   | 49,414 |   |   |   | 4.49 | % |   |   | 1,959,772 |   |   |   | 51,643 |   |   |   | 5.31 | % |
|                                                                               |   |    |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial loans and lease financing                                               |   |    | 3,973,926 |   |     |   | 104,590 |   |   |   | 5.31 | % |   |   | 4,342,860 |   |   |   | 112,429 |   |   |   | 5.22 | % |
| Installment loans                                                                  |   |    | 959,981   |   |     |   | 25,100 |   |   |   | 5.27 | % |   |   | 975,418 |   |   |   | 27,223 |   |   |   | 5.63 | % |
| Mortgage loans                                                                     |   |    | 986,883   |   |     |   | 28,456 |   |   |   | 5.81 | % |   |   | 1,047,819 |   |   |   | 31,749 |   |   |   | 6.11 | % |
| Total loans and leases                                                             |   |    | 5,920,790 |   |     |   | 158,146 |   |   |   | 5.39 | % |   |   | 6,366,097 |   |   |   | 171,401 |   |   |   | 5.43 | % |
| Total earning assets                                                               |   |    | 8,537,393 |   |     |   | 208,026 |   |   |   | 4.91 | % |   |   | 8,573,249 |   |   |   | 223,304 |   |   |   | 5.25 | % |
| Allowance for loan and lease losses                                                |   |    | (163,947  | )      |     |   |   |   |   |   |   |   |   |   | (91,166 | ) |   |   |   |   |   |   |   |   |
| Non-interest earning assets                                                        |   |    | 909,067   |   |     |   |   |   |   |   |   |   |   |   | 1,144,750 |   |   |   |   |   |   |   |   |   |
| Total assets                                                                       |   | $       | 9,282,513 |   |     |   |   |   |   |   |   |   |   | $ | 9,626,833 |   |   |   |   |   |   |   |   |   |
|                                                                               |   |    |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST BEARING LIABILITIES:                                                      |   |    |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing deposits                                                          |   | $       | 5,737,498 |   |     | $      | 34,745 |   |   |   | 1.22 | % |   | $ | 5,942,153 |   |   | $ | 62,022 |   |   |   | 2.10 | % |
|                                                                               |   |    |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities sold under repurchase agreements                                        |   |    |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and federal funds purchased                                                        |   |    | 744,095   |   |     |   | 5,682 |   |   |   | 1.54 | % |   |   | 644,732 |   |   |   | 6,652 |   |   |   | 2.08 | % |
| Short-term borrowings                                                              |   |    | 6,926     |   |     |   | - |   |   |   | 0.00 | % |   |   | 7,424 |   |   |   | - |   |   |   | 0.00 | % |
| Long-term borrowings                                                               |   |    | 882,300   |   |     |   | 20,817 |   |   |   | 4.76 | % |   |   | 1,033,620 |   |   |   | 23,415 |   |   |   | 4.57 | % |
| Total interest bearing liabilities                                                 |   |    | 7,370,819 |   |     |   | 61,244 |   |   |   | 1.68 | % |   |   | 7,627,929 |   |   |   | 92,089 |   |   |   | 2.43 | % |
| Non-interest bearing deposits                                                      |   |    | 799,434   |   |     |   |   |   |   |   |   |   |   |   | 723,040 |   |   |   |   |   |   |   |   |   |
| Other non-interest bearing liabilities                                             |   |    | 36,637    |   |     |   |   |   |   |   |   |   |   |   | 87,955 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                                  |   |    | 8,206,890 |   |     |   |   |   |   |   |   |   |   |   | 8,438,924 |   |   |   |   |   |   |   |   |   |
| Equity capital                                                                     |   |    | 1,075,623 |   |     |   |   |   |   |   |   |   |   |   | 1,187,909 |   |   |   |   |   |   |   |   |   |
| Total liabilities and equity capital                                               |   | $       | 9,282,513 |   |     |   |   |   |   |   |   |   |   | $ | 9,626,833 |   |   |   |   |   |   |   |   |   |
| INTEREST RATE MARGIN                                                               |   |    |      |   |     |   | 146,782 |   |   |   | 3.47 | % |   |   |   |   |   |   | 131,215 |   |   |   | 3.09 | % |
| Tax equivalent interest                                                            |   |    |      |   |     |   | 10,880 |   |   |   |   |   |   |   |   |   |   |   | 11,494 |   |   |   |   |   |
| Net interest income                                                                |   |    |      |   |     | $      | 135,902 |   |   |   |   |   |   |   |   |   |   | $ | 119,721 |   |   |   |   |   |

----

| (dollars in thousands)                 |   | Six Months Ended June 30, |    |
|----------------------------------------|--------|---------------------------|---------|
|                                   |   | 2010 over 2009            |    |
| Increase (decrease) in:                |   | Volume                    |    |   | Rate |   |   | Total |   |
| Interest income:                       |   |                      |    |   |   |   |   |   |   |
| Interest earning deposits at banks     |   | $                         | 175     |   |   | $ | 31 |   |   | $ | 206 |   |
| Securities:                            |   |                      |    |   |   |   |   |   |   |   |   |   |
| U.S. Treasury                          |   |                      | 228     |   |   |   | 53 |   |   |   | 281 |   |
| U.S. Agencies                          |   |                      | 3,909   |   |   |   | (4,034 | ) |   |   | (125 | ) |
| State and municipal                    |   |                      | (832    | ) |   |   | (642 | ) |   |   | (1,474 | ) |
| Other bonds and securities             |   |                      | (614    | ) |   |   | (297 | ) |   |   | (911 | ) |
| Total investment securities            |   |                      | 2,691   |   |   |   | (4,920 | ) |   |   | (2,229 | ) |
| Loans:                                 |   |                      |    |   |   |   |   |   |   |   |   |   |
| Commercial loans and leases            |   |                      | (9,684  | ) |   |   | 1,844 |   |   |   | (7,839 | ) |
| Installment loans                      |   |                      | (425    | ) |   |   | (1,698 | ) |   |   | (2,123 | ) |
| Mortgage loans                         |   |                      | (1,798  | ) |   |   | (1,495 | ) |   |   | (3,293 | ) |
| Total loans                            |   |                      | (11,907 | ) |   |   | (1,348 | ) |   |   | (13,255 | ) |
| Total interest income                  |   | $                         | (9,041  | ) |   | $ | (6,237 | ) |   | $ | (15,278 | ) |
|                                   |   |                      |    |   |   |   |   |   |   |   |   |   |
| Interest Expense:                      |   |                      |    |   |   |   |   |   |   |   |   |   |
| Interest bearing deposits              |   | $                         | (2,068  | ) |   | $ | (25,209 | ) |   | $ | (27,277 | ) |
| Securities sold under repurchase       |   |                      |    |   |   |   |   |   |   |   |   |   |
| agreements and federal funds purchased |   |                      | 926     |   |   |   | (1,896 | ) |   |   | (970 | ) |
| Short-term borrowings                  |   |                      | -       |   |   |   | - |   |   |   | - |   |
| Long-term borrowings                   |   |                      | (3,539  | ) |   |   | 941 |   |   |   | (2,598 | ) |
| Total borrowed funds                   |   |                      | (2,613  | ) |   |   | (955 | ) |   |   | (3,568 | ) |
| Total interest expense                 |   |                      | (4,681  | ) |   |   | (26,164 | ) |   |   | (30,845 | ) |
| Increase (decrease) in interest income |   | $                         | (4,360  | ) |   | $ | 19,927 |   |   | $ | 15,567 |   |

----

|   | · | Cash management and electronic banking fees increased, 14.8%, or $1.1 million, to $8.8 million as a result of sustained efforts on deposit products and improvements in the number of cash management customers and customers with debit cards. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Wealth management income increased 3.6%, or $0.5 million, to $14.3 million. Exclusive of the sale of Vantage, wealth management income increased $2.1 million or 17% compared to the six months ended June 30, 2009 which resulted from appreciation of the broad equity markets and improved investment sales within the retail and asset management platforms. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Service charges on deposit accounts decreased 9.1%, or $1.1 million to $10.8 million, due to declines in overdraft volume, resulting from improved customer saving levels. This trend has resulted in an increase in the average balance per account. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Insurance commissions and fees decreased 7.1%, or $0.6 million, to $7.4 million due to continued “softness” in the insurance industry resulting from economic conditions which affected commercial, property and casualty, and health insurance clients. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                      |   |   |      |   | 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 |   | $      | 39,382    |   |                    | $      | 6,328 |   |   | $ | 9,511 |   |   | $ | 6,811 |   |   | $ | 16,732 |   |
| Remaining contractual maturities of time deposits         |   |   | 2,313,190 |   |                    |   | 1,657,174 |   |   |   | 476,356 |   |   |   | 178,268 |   |   |   | 1,392 |   |
| FHLB advances                                             |   |   | 706,784   |   |                    |   | 77,633 |   |   |   | 112,909 |   |   |   | 52,500 |   |   |   | 463,742 |   |
| Subordinated debentures                                   |   |   | 138,125   |   |                    |   | - |   |   |   | - |   |   |   | - |   |   |   | 138,125 |   |
| Dividends on Preferred Stock*                             |   |   | 93,750    |   |                    |   | 7,500 |   |   |   | 15,000 |   |   |   | 24,000 |   |   |   | 47,250 |   |
| Total                                                     |   | $      | 3,291,231 |   |                    | $      | 1,748,635 |   |   | $ | 613,776 |   |   | $ | 261,579 |   |   | $ | 667,241 |   |
|                                                      |   |   |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *Term is unlimited; assumed 10 year term from inception.  |   |   |      |   |                    |

|   | · | Relationships with several correspondent banks to provide short-term borrowings in the form of federal funds purchased. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company is also a member of the Federal Home Loan Bank of Pittsburgh (“FHLB”) and has the ability to borrow within applicable limits in the form of advances secured by pledges of certain qualifying assets. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Overnight funds are available from the Federal Reserve Bank (“FRB”) via the discount window, and serves as an additional source of liquidity. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $260 million of investment security purchases |
|--------|--------|-----------------------------------------------|

----

|   | · | $298 million reduction of certificates of deposit |
|--------|--------|---------------------------------------------------|

|   | · | $49.3 million of payments for maturing of FHLB advances |
|--------|--------|---------------------------------------------------------|

|   | · | $3.8 million of dividends paid on preferred stock and $2.5 million of dividends paid on common stock |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | $235 million of investment securities maturities |
|--------|--------|--------------------------------------------------|

|   | · | $196 million net maturities and repayments from loans and leases held for investment |
|--------|--------|--------------------------------------------------------------------------------------|

|   | · | $15 million of cash from borrowings under securities repurchase agreements with customers |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | $55 million increase in core deposits |
|--------|--------|---------------------------------------|

|                                  |   | Tier 1 Capital to    |   |   | Tier 1 Capital to Risk- |   |   | Total Capital to Risk- |   |
|---------------------------------------|--------|----------------------|--------|--------|-------------------------|--------|--------|------------------------|--------|
|                                  |   | Average Assets Ratio |   |   | Weighted Assets Ratio   |   |   | Weighted Assets Ratio  |   |
|                                  |   | June 30,             |   |   | Dec. 31,                |   |   | June 30,               |   |   | Dec. 31, |   |   | June 30, |   |   | Dec. 31, |   |
|                                  |   | 2010                 |   |   | 2009                    |   |   | 2010                   |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
|                                  |   |                 |   |   |                    |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| The Company                           |   |                 | 9.41   | %      |                    |   | 8.88   | %                      |   |   | 13.64 | % |   |   | 12.66 | % |   |   | 14.91 | % |   |   | 13.92 | % |
| National Penn Bank                    |   |                 | 8.60   | %      |                    |   | 7.86   | %                      |   |   | 12.43 | % |   |   | 11.21 | % |   |   | 13.70 | % |   |   | 12.47 | % |
| Christiana                            |   |                 | 9.26   | %      |                    |   | 7.13   | %                      |   |   | 15.46 | % |   |   | 14.24 | % |   |   | 16.73 | % |   |   | 15.51 | % |
| "Well Capitalized" institution        |   |                 | 5.00   | %      |                    |   | 5.00   | %                      |   |   | 6.00 | % |   |   | 6.00 | % |   |   | 10.00 | % |   |   | 10.00 | % |
|   under banking regulations |   |                 |   |   |                    |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                   |   |   |      |   |      |   |    | After one   |   |   | After three |   |   |       |   |
|------------------------|--------|--------|-----------|--------|-----------|--------|---------|-------------|--------|--------|-------------|--------|--------|------------|--------|
|                   |   |   |      |   | Less than |   |    | year to     |   |   | years to    |   |   | More than  |   |
| (dollars in thousands) |   | Total  |      |   | one year  |   |    | three years |   |   | five years  |   |   | five years |   |
|                   |   |   |      |   |      |   |    |        |   |   |        |   |   |       |   |
| Loan commitments       |   | $      | 1,568,532 |   |      | $      | 776,378 |        |   | $      | 183,287     |   |   | $          | 80,932 |   |   | $ | 527,935 |   |
| Letters of credit      |   |   | 167,383   |   |      |   | 108,275 |        |   |   | 56,419      |   |   |       | -      |   |   |   | 2,689 |   |
| Total                  |   | $      | 1,735,915 |   |      | $      | 884,653 |        |   | $      | 239,706     |   |   | $          | 80,932 |   |   | $ | 530,624 |   |

----

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

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

|   | · | Changes in yields and the shape of the yield curve (“yield curve risk”). |
|--------|--------|--------------------------------------------------------------------------------------|

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

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

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

|   | · | Changes to types of products offered, and/or |
|--------|--------|----------------------------------------------|

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

----

|                                                                               |   | Repricing Periods |       |
|------------------------------------------------------------------------------------|--------|-------------------|------------|
|                                                                               |   |              |       |   | Three Months |   |   | One Year |   |   |   |   |
|                                                                               |   | Within            |       |   | Through |   |   | Through |   |   | Over |   |
| (dollars in thousands)                                                             |   | Three Months      |       |   | One Year |   |   | Five Years |   |   | 5 Years |   |
| Interest-earning assets:                                                           |   |              |       |   |   |   |   |   |   |   |   |   |
| Interest bearing deposits at banks                                                 |   | $                 | 496,282    |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Federal funds sold                                                                 |   |              | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Investment securities and other securities                                         |   |              | 196,178    |   |   |   | 485,002 |   |   |   | 684,178 |   |   |   | 852,239 |   |
| Loans and Leases (1)                                                               |   |              | 2,505,839  |   |   |   | 955,098 |   |   |   | 1,965,236 |   |   |   | 330,061 |   |
| Total interest-earning assets                                                      |   |              | 3,198,299  |   |   |   | 1,440,100 |   |   |   | 2,649,414 |   |   |   | 1,182,300 |   |
| Cumulative total interest-earning assets                                           |   |              | 3,198,299  |   |   |   | 4,638,399 |   |   |   | 7,287,813 |   |   |   | 8,470,113 |   |
|                                                                               |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and Equity                                                             |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing deposits                                                          |   |              | 3,683,175  |   |   |   | 1,322,717 |   |   |   | 654,624 |   |   |   | 1,392 |   |
| Borrowed funds                                                                     |   |              | 595,441    |   |   |   | 77,103 |   |   |   | 331,437 |   |   |   | 462,117 |   |
| Subordinated debt                                                                  |   |              | 77,321     |   |   |   | - |   |   |   | - |   |   |   | 60,804 |   |
| Total interest-bearing liabilities                                                 |   |              | 4,355,937  |   |   |   | 1,399,820 |   |   |   | 986,061 |   |   |   | 524,313 |   |
| Cumulative total interest-bearing liabilities                                      |   |              | 4,355,937  |   |   |   | 5,755,757 |   |   |   | 6,741,818 |   |   |   | 7,266,131 |   |
|                                                                               |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Interest-earning assets less interest -bearing |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       liabilities                                         |   |              | (1,157,638 | ) |   |   | 40,279 |   |   |   | 1,663,353 |   |   |   | 657,987 |   |
|                                                                               |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cumulative interest-rate sensitivity gap                                           |   | $                 | (1,157,638 | ) |   | $ | (1,117,359 | ) |   | $ | 545,995 |   |   | $ | 1,203,982 |   |
|                                                                               |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |

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

----

| (dollars in thousands) |   |   |                          |    |   |                          |   |
|------------------------|--------|--------|-------------------------------|---------|--------|-------------------------------|--------|
|                   |   |   | June 30, 2010                 |    |   | June 30, 2009                 |   |
| Change in              |   |   | Change in Net Interest Income |    |   | Change in Net Interest Income |   |
| Interest Rates         |   |   |  $                       |    |   | %                             |   |   |  $ |   |   | % |   |
| (in basis points)      |   |   |                          |    |   |                          |   |   |   |   |   |   |   |   |   |
| + 300                  |   |   | $                             | 24,397  |   |                          |   | 8.78 | % |   | $ | 10,177 |   |   |   | 3.58 | % |
| + 200                  |   |   |                          | 16,037  |   |                          |   | 5.77 | % |   |   | 5,918 |   |   |   | 2.08 | % |
| + 100                  |   |   |                          | 7,631   |   |                          |   | 2.75 | % |   |   | 1,729 |   |   |   | 0.61 | % |
| - 100                  |   |   |                          | (7,815  | )      |                          |   | -2.81 | % |   |   | 794 |   |   |   | 0.28 | % |
| - 200                  |   |   |                          | (16,590 | )      |                          |   | -5.97 | % |   |   | (6,070 | ) |   |   | -2.13 | % |
| - 300                  |   |   |                          | (17,135 | )      |                          |   | -6.17 | % |   |   | (14,017 | ) |   |   | -4.93 | % |

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|    | · | National Penn’s branding and marketing initiatives may not be effective in building name recognition and customer awareness of National Penn’s products and services.                                                                                                                                                                                                             |
|--------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |   |                                                                                                                                                                                                                                                                                                                                                                                          |
|         | · | National Penn may be unable to differentiate itself from its competitors by a higher level of customer service, as intended by its business strategy and other marketing initiatives.                                                                                                                                                                                                         |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                          |
|         | · | Expansion of National Penn’s product and service offerings may take longer, and may meet with more effective competitive resistance from others already offering such products and services, than expected.  Additionally, new product development by new and existing competitors may be more effective, and take place more quickly, than expected.                         |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                          |
|         | · | National Penn may be unable to attract, motivate, and/or retain key executives and other key personnel due to intense competition for such persons, National Penn’s cost saving strategies, increased governmental oversight or otherwise.                                                                                                                                              |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                          |
|         | · | Growth and profitability of National Penn’s non-interest income or fee income may be less than expected, particularly as a result of current financial market conditions.                                                                                                                                                                                                               |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                          |
|         | · | General economic or business conditions, either nationally or in the regions in which National Penn does business, may continue to deteriorate or be more prolonged than expected, resulting in, among other things, a deterioration in credit quality, a reduced demand for credit, or a decision by National Penn to reevaluate staffing levels or to divest one or more lines of business. |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                          |
|         | · | In the current environment of increased investor activism, including hedge fund investment policies and practices, shareholder concerns or actions may require increased management/board attention, efforts and commitments, which could require a shift in focus from business development and operations.                                                                                  |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                          |
|         | · | Current stresses in the financial markets may inhibit National Penn's ability to access the capital markets or obtain financing on favorable terms.                                                                                                                                                                                                                                 |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                          |
|         | · | Repurchase obligations with respect to real estate mortgages sold in the secondary market could adversely affect National Penn’s earnings.                                                                                                                                                                                                                                              |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                          |
|         | · | Changes in consumer spending and savings habits could adversely affect National Penn’s business.                                                                                                                                                                                                                                                                                        |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                          |
|         | · | Negative publicity with respect to any National Penn product or service, employee, director or other associated individual or entity whether legally justified or not, could adversely affect National Penn’s reputation and business.                                                                                                                                                  |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                          |

----

|   | · | National Penn may be unable to successfully manage the foregoing and other risks and to achieve its current short-term and long-term business plans and objectives. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                |

Item 

Item 

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Item 
Exhibits

| 2.1    | Stock Purchase Agreement dated June 24, 2010 between National Penn Bancshares, Inc. and WSFS Financial Corporation (Schedules are omitted pursuant to Regulation S-K, Item 601(b)(2); National Penn agrees to furnish a copy of such schedules to the Securities and Exchange Commission upon request.) |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                    |
| 3.1    | Articles of Incorporation, as amended, of National Penn Bancshares, Inc. (Incorporated by reference to Exhibit 3.1 to National Penn’s Report on Form 8-K dated April 24, 2009 as filed on April 24, 2009.)                                                                                        |
|   |                                                                                                                                                                                                                                                                                                    |
| 3.2    | Bylaws, as amended, of National Penn Bancshares, Inc. (Incorporated by reference to  Exhibit 3.1 to National Penn’s Report on Form 8-K dated March 24, 2010, as filed on  March 29, 2010.                                                                                     |
|   |                                                                                                                                                                                                                                                                                                    |
| 31.1   | Certification of President and Chief Executive Officer of National Penn Bancshares, Inc., pursuant to Commission Rule 13a-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                    |
| 31.2   | Certification of Chief Financial Officer of National Penn Bancshares, Inc., pursuant to Commission Rule 13a-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                               |
| 32.1   | Certification of President and Chief Executive Officer of National Penn Bancshares, Inc., pursuant to Commission Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  (Furnished, not filed.)                                    |
|   |                                                                                                                                                                                                                                                                                                    |
| 32.2   | Certification of  Chief Financial Officer of National Penn Bancshares, Inc., pursuant to Commission Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  (Furnished, not filed.)                             |

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SIGNATURES

|   |           | NATIONAL PENN BANCSHARES, INC. |
|--------|----------------|--------------------------------|
|   |           | (Registrant)                   |
|   |           |                           |
| Date:  | August 6, 2010 |                           | By: | /s/ Scott V. Fainor |
|   |           |                           |   | Name: | Scott V. Fainor |
|   |           |                           |   | Title: | President and CEO |
|   |           |                           |   |   |   |
| Date:  | August 6, 2010 |                           | By: | /s/ Michael J. Hughes |
|   |           |                           |   | Name: | Michael J. Hughes |
|   |           |                           |   | Title: | Chief Financial Officer |

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