|   |  x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE             |
|--------|---------|---------------------------------------------------------------------|
|   |    | SECURITIES EXCHANGE ACT OF 1934                                     |
|   |    |                                                                |
|   |    | For the quarterly period ended June 30, 2009                        |
|   |    | 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 xNo  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 x                                                                                                            Accelerated filer  o         Non-accelerated filer    o  (Do not check if a smaller reporting company)             Smallerreporting 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, 2009 |
|-----------------------------------|--------|-------------------------------|
| Common Stock, no stated par value |   |  95,592,477 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                                                                      | 37 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 4.             | Controls and Procedures                                                                      | 37 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
| Part II - Other Information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 1.             | Legal Proceedings                                                                      | 38 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item  1A. | Risk Factors | 39 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 2.             | Unregistered Sales of Equity Securities |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                | and Use of  Proceeds                                                                      | 44 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 3.             | Defaults Upon Senior Securities                                                                      | 44 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 4.             | Submission of Matters to a Vote of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                | Security Holders                                                                      | 44 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 5.             | Other Information                                                                      | 45 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Item 6.             | Exhibits                                                                      | 45 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
| Signatures                                                                                                       | 46                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |
| Exhibits                                                                                                         | 47                  |

----

|                                                                       |                                                                                               |                                                                                                                  |                                                                         |         Unaudited                                      |
|----------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------|
| (dollars in thousands)                                                     | June 30                                                                                            |                                                                                                                  | December 31,                                                                 |
|                                                                       |                                                                                               |                                                                                                                  |                                                                         | 2009                                                                                      |   | 2008 |
|                                                                       |                                                                                               |                                                                                                                  | ASSETS                                                                       |                                                                                      |   |   |
|                                                                       | Cash and due from banks                                                                            |  $        322,741                                                        |                                                                         |  $      156,884                                        |
|                                                                       | Interest-bearing deposits with banks                                                               |              25,630                                  |                                                                         |             38,946            |
|                                                                       |                                                                                               |                                                                                                                  | Total cash and cash equivalents                                              |            348,371                 |   |           195,830 |
|                                                                       |                                                                                               |                                                                                                                  |                                                                         |                                                                                      |   |   |
|                                                                       | Investment securities held to maturity                                                             |                                                                                                                  |                                                                         |                                                                                      |
|                                                                       |                                                                                               | (Fair value approximates, $618,282 and $284,608 for 2009 and 2008, respectively)                                      |            653,184    |                                                                                      |           326,090 |
|                                                                       | Investment securities available for sale, at fair value                                            |         1,504,155                                                             |                                                                         |       1,593,799                                             |
|                                                                       | Loans and leases held for sale                                                                     |              23,326                                  |                                                                         |               3,605 |
|                                                                       | Loans and leases, less allowance for loan and lease losses of                                      |                                                                                                                  |                                                                         |                                                                                      |
|                                                                       |                                                                                               |   of $98,313 and $84,006 in 2009 and 2008 respectively                                                      |         6,185,210                    |                                                                                      |       6,228,263 |
|                                                                       | Premises and equipment, net                                                                        |            114,635                                             |                                                                         |           119,924                       |
|                                                                       | Premises held for sale                                                                             |                    812 |                                                                         |               3,768 |
|                                                                       | Accrued interest receivable                                                                        |              35,995                                  |                                                                         |             37,127            |
|                                                                       | Bank owned life insurance                                                                          |            196,001                                             |                                                                         |           193,811                       |
|                                                                       | Goodwill                                                                                           |            555,964                                             |                                                                         |           558,252                       |
|                                                                       | Other intangible assets, net                                                                       |              33,654                                  |                                                                         |             37,496            |
|                                                                       | Unconsolidated investments under the equity method                                                 |              13,279                                  |                                                                         |             11,874            |
|                                                                       | Other assets                                                                                       |              93,327                                  |                                                                         |             93,592            |
|                                                                       |                                                                                               |                                                                                                                  | TOTAL ASSETS                                                                 |  $    9,757,913                                                  |   |  $   9,403,431 |
|                                                                       |                                                                                               |                                                                                                                  |                                                                         |                                                                                      |   |   |
|                                                                       |                                                                                               |                                                                                                                  | LIABILITIES                                                                  |                                                                                      |   |   |
|                                                                       | Non-interest bearing deposits                                                                      |  $        741,598                                                        |                                                                         |  $      793,269                                        |
|                                                                       | Interest bearing deposits                                                                          |         6,070,056                                                             |                                                                         |       5,596,617                                             |
|                                                                       |                                                                                               |                                                                                                                  | Total deposits                                                               |         6,811,654                                 |   |       6,389,886 |
|                                                                       |                                                                                               |                                                                                                                  |                                                                         |                                                                                      |   |   |
|                                                                       | Securities sold under repurchase agreements and federal funds purchased                            |            673,409                                             |                                                                         |           640,905                       |
|                                                                       | Short-term borrowings                                                                              |              10,000                                  |                                                                         |             10,402            |
|                                                                       | Long-term borrowings                                                                               |            842,169                                             |                                                                         |           955,983                       |
|                                                                       | Subordinated debentures                                                                            |                                                                                                                  |                                                                         |                                                                                      |
|                                                                       |                                                                                               |                                                                                                                  | (Includes $52,506 and $50,659 at fair value for 2009 and 2008, respectively) |            129,827                 |   |           127,980 |
|                                                                       | Accrued interest payable and other liabilities                                                     |              74,231                                  |                                                                         |             98,280            |
|                                                                       |                                                                                               |                                                                                                                  | TOTAL LIABILITIES                                                            |         8,541,290                                 |   |       8,223,436 |
|                                                                       |                                                                                               |                                                                                                                  |                                                                         |                                                                                      |   |   |
|                                                                       |                                                                                               |                                                                                                                  | SHAREHOLDERS' EQUITY                                                         |                                                                                      |   |   |
|                                                                       | Preferred stock, no stated par value; authorized 1,000,000 shares,  Series A-none issued |                                                                                                                  |                                                                         |                                                                                      |
|                                                                       |                                                                                               | Series B, $1,000 liquidation preference, 5% cumulative; 150,000 shares issued                                         |                                                                         |                                                                                      |   |
|                                                                       |                                                                                               | and outstanding as of 6/30/09 and 12/31/08                                                                            |            144,517    |                                                                                      |           144,076 |
|                                                                       | Common stock, no stated par value; authorized 250,000,000 shares, issued and                       |                                                                                                                  |                                                                         |                                                                                      |
|                                                                       |                                                                                               | outstanding 2009 -  95,507,091; 2008 - 80,731,751                                                           |         1,072,921                    |                                                                                      |       1,003,110 |
|                                                                       | Retained earnings                                                                                  |              52,143                                  |                                                                         |             65,194            |
|                                                                       | Accumulated other comprehensive loss                                                               |            (52,958)                                            |                                                                         |           (32,385)                      |
|                                                                       |                                                                                               |                                                                                                                  | TOTAL SHAREHOLDERS' EQUITY                                                   |         1,216,623                                 |   |       1,179,995 |
|                                                                       |                                                                                               |                                                                                                                  |                                                                         |                                                                                      |   |   |
|                                                                       |                                                                                               |                                                                                                                  | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                   |  $    9,757,913                                                  |   |  $   9,403,431 |
|                                                                       |                                                                                               |                                                                                                                  |                                                                         |                                                                                      |   |   |
| 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,                                     |
|-----------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------|
|                                          | 2009                                                                                                                                                                    |                                                                                                                                                                      | 2008                                                          |   | 2009 |   | 2008 |   |
| INTEREST INCOME                               |                                                                                                                                                                    |                                                                                                                                                                      |                                                          |   |   |   |   |
|                                          | Loans and leases, including fees                                                                                                                                        |  $              84,674                                                                         |                                                          |  $          96,734 |   |  $        169,642 |   |  $  185,501 |   |
|                                          | Investment securities                                                                                                                                                   |                                                                                                                                                                      |                                                          |   |   |   |   |   |   |
|                                          |                                                                                                                                                                    | Taxable                                                                                                                                                                   | 11,696                                                        |   |              14,961 |   |               23,310 |   |        29,455 |   |
|                                          |                                                                                                                                                                    | Tax-exempt                                                                                                                                                                | 9,251                                                         |   |                7,442 |   |               18,598 |   |        14,451 |   |
|                                          | Federal funds sold and deposits in banks                                                                                                                                | 23                                                                                                                                                                        |                                                          |                    366 |   |                       45 |   |              499 |   |
|                                          |                                                                                                                                                                    |                                                                                                                                                                      | Total interest income                                         |                105,644 |   |            119,503 |   |             211,595 |   |      229,906 |   |
| INTEREST EXPENSE                              |                                                                                                                                                                    |                                                                                                                                                                      |                                                          |   |   |   |   |   |
|                                          | Deposits                                                                                                                                                                | 30,358                                                                                                                                                                    |                                                          |              35,696 |   |               62,022 |   |        72,365 |   |
|                                          | Securities sold under repurchase agreements and                                                                                                                         |                                                                                                                                                                      |                                                          |   |   |   |   |   |   |
|                                          |                                                                                                                                                                    | federal funds purchased                                                                                                                                                   | 3,037                                                         |   |                5,318 |   |                 6,652 |   |        10,563 |   |
|                                          | Short-term borrowings                                                                                                                                                   |                             - |                                                          |                      12 |   |                          - |   |                41 |   |
|                                          | Long-term borrowings                                                                                                                                                    | 11,373                                                                                                                                                                    |                                                          |              12,199 |   |               23,415 |   |        24,245 |   |
|                                          |                                                                                                                                                                    |                                                                                                                                                                      | Total interest expense                                        |                  44,768 |   |              53,225 |   |               92,089 |   |      107,214 |   |
|                                          |                                                                                                                                                                    |                                                                                                                                                                      | Net interest income                                           | 60,876 |   |              66,278 |   |             119,506 |   |      122,692 |   |
|                                          | Provision for loan and lease losses                                                                                                                                     |                  37,500                                                              |                                                          |                3,711 |   |               55,025 |   |          7,121 |   |
|                                          |                                                                                                                                                                    |                                                                                                                                                                      | Net interest income after provision for loan and lease losses |                  23,376 |   |              62,567 |   |               64,481 |   |      115,571 |   |
| NON-INTEREST INCOME                           |                                                                                                                                                                    |                                                                                                                                                                      |                                                          |   |   |   |   |   |
|                                          | Wealth management income                                                                                                                                                |                    7,232                                                   |                                                          |                8,515 |   |               13,847 |   |        16,123 |   |
|                                          | Service charges on deposit accounts                                                                                                                                     |                    6,071                                                   |                                                          |                6,324 |   |               11,871 |   |        11,585 |   |
|                                          | Bank owned life insurance income                                                                                                                                        |                    1,275                                                   |                                                          |                1,842 |   |                 2,347 |   |          3,422 |   |
|                                          | Other operating income                                                                                                                                                  |                    2,863                                                   |                                                          |                2,504 |   |                 5,441 |   |          5,341 |   |
|                                          | Net gains (losses) from fair value changes                                                                                                                              |                          51                  |                                                          |              (1,139) |   |               (1,847) |   |        (2,151) |   |
|                                          | Net gains (losses) on sale of  investment securities                                                                                                          |                             - |                                                          |                    384 |   |               (2,284) |   |              384 |   |
|                                          | IMPAIRMENT LOSSES ON INVESTMENT SECURITIES:                                                                                                                             |                                                                                                                                                                      |                                                          |   |   |   |   |   |   |
|                                          |    Impairment losses on investment securities                                                                                                            |                (14,347)                                                                        |                                                          |                         - |   |             (40,942) |   |                   - |   |
|                                          |    Non credit-related losses on securities not expected                                                                                                       |                                                                                                                                                                      |                                                          |   |   |   |   |   |   |
|                                          |    to besold recognized in other comprehensive loss   before tax                                                                               |                    7,211                                                   |                                                          |                         - |   |               26,021 |   |                   - |   |
|                                          | Net impairment losses on investment securities                                                                                                                          |                  (7,136)                                                             |                                                          |                         - |   |             (14,921) |   |                   - |   |
|                                          |                                                                                                                                                                    |                                                                                                                                                                      |                                                          |   |   |   |   |   |   |   |   |
|                                          | Mortgage banking income                                                                                                                                                 | 2,834                                                                                                                                                                     |                                                          |                    978 |   |                 5,254 |   |          1,569 |   |
|                                          | Insurance commissions and fees                                                                                                                                          | 4,016                                                                                                                                                                     |                                                          |                3,968 |   |                 7,973 |   |          7,774 |   |
|                                          | Cash management and electronic banking fees                                                                                                                             | 3,995                                                                                                                                                                     |                                                          |                3,715 |   |                 7,643 |   |          6,643 |   |
|                                          | Equity in undistributed net earnings of                                                                                                                                 |                                                                                                                                                                      |                                                          |   |   |   |   |   |   |
|                                          |                                                                                                                                                                    | unconsolidated investments                                                                                                                                                | 314                                                           |   |                    810 |   |                 1,405 |   |          1,422 |   |
|                                          |                                                                                                                                                                    |                                                                                                                                                                      | Total non-interest income                                     |                  21,515 |   |              27,901 |   |               36,729 |   |        52,112 |   |
| NON-INTEREST EXPENSE                          |                                                                                                                                                                    |                                                                                                                                                                      |                                                          |   |   |   |   |   |
|                                          | Salaries, wages and employee benefits                                                                                                                                   | 32,249                                                                                                                                                                    |                                                          |              31,300 |   |               64,266 |   |        60,527 |   |
|                                          | Net premises and equipment                                                                                                                                              | 7,335                                                                                                                                                                     |                                                          |                9,019 |   |               15,933 |   |        17,026 |   |
|                                          | Advertising and marketing expenses                                                                                                                                      | 1,893                                                                                                                                                                     |                                                          |                1,641 |   |                 3,748 |   |          3,074 |   |
|                                          | FDIC special assessment                                                                                                                                                 | 4,625                                                                                                                                                                     |                                                          |                         - |   |                 4,625 |   |   |   |
|                                          | Other operating expenses                                                                                                                                                |                  16,550                                                              |                                                          |              11,866 |   |               30,773 |   |        22,113 |   |
|                                          |                                                                                                                                                                    |                                                                                                                                                                      | Total non-interest expense                                    |                  62,652 |   |              53,826 |   |             119,345 |   |      102,740 |   |
|                                          | Income (loss) before income taxes                                                                                                                                       |                (17,761)                                                                        |                                                          |              36,642 |   |             (18,135) |   |        64,943 |   |
|                                          | Income tax (benefit) expense                                                                                                                                            |                (10,213)                                                                        |                                                          |                9,428 |   |             (14,386) |   |        16,136 |   |
|                                          |                                                                                                                                                                    |                                                                                                                                                                      | NET INCOME (LOSS)                                             |                  (7,548) |   |              27,214 |   |  $           (3,749) |   |        48,807 |   |
|                                          | Preferred dividends/accretion of preferred discount                                                                                                                     |                  (2,095)                                                             |                                                          |                         - |   |               (4,149) |   |                   - |   |
|                                          |                                                                                                                                                                    |                                                                                                                                                                      | NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS            |  $              (9,643) |   |  $          27,214 |   |  $           (7,898) |   |  $    48,807 |   |
| PER SHARE OF COMMON STOCK                     |                                                                                                                                                                    |                                                                                                                                                                      |                                                          |   |   |   |   |   |
|                                          | Basic earnings (loss)                                                                                                                                                   |  $                (0.09)                                                             |                                                          |  $              0.34 |   |  $             (0.04) |   |  $        0.67 |   |
|                                          | Basic earnings (loss) available to common shareholders                                                                                                                  |  $                (0.11)                                                             |                                                          |  $              0.34 |   |  $             (0.09) |   |  $        0.67 |   |
|                                          | Diluted earnings (loss)                                                                                                                                                 |  $                (0.09)                                                             |                                                          |  $              0.34 |   |  $             (0.04) |   |  $        0.67 |   |
|                                          | Diluted earnings (loss) available to common shareholders                                                                                                                |  $                (0.11)                                                             |                                                          |  $              0.34 |   |  $             (0.09) |   |  $        0.67 |   |
|                                          | Dividends paid in cash                          |  $                  0.05                                                   |                                                          |  $              0.17 |   |  $               0.22 |   |  $        0.34 |   |

|    The accompanying notes are an integral part of these financial statements. |   |   |   |   |   |   |   |
|-----------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|

----

| (dollars in thousands, except share data)                                                 |   |          |       |   |          |   |      |       |   |   |          |   |   | Accumulated   |    |   |   |   |    |          |   |   |   |   |
|-------------------------------------------------------------------------------------------|--------|---------------|------------|--------|---------------|--------|-----------|------------|--------|--------|---------------|--------|--------|---------------|---------|--------|--------|--------|---------|---------------|--------|--------|--------|--------|
|                                                                                      |   |          |       |   |          |   |      | Series B   |   |   |          |   |   | Other         |    |   |   |   |    |          |   |   |   |   |
|                                                                                      |   | Common        |       |   | Preferred     |   |      | Retained   |   |   | Comprehensive |   |   | Treasury      |    |   |   |   |    | Comprehensive |   |
| SIX MONTHS ENDED JUNE 30, 2009                                                            |   | Shares        |       |   | Value         |   |      | Stock      |   |   | Earnings      |   |   | Income (Loss) |    |   | Stock  |   |    | Total         |   |   | Income |   |
|                                                                                      |   |          |       |   |          |   |      |       |   |   |          |   |   |          |    |
| Balance at December 31, 2008, as previously reported                                      |   |          | 80,731,751 |   |          | $      | 1,003,110 |       |   | $      | 144,076       |   |   | $             | 65,194  |   |   | $      | (32,385 | )             |   | $      | -      |   |   | $ | 1,179,995 |   |   |   |   |
| Cumulative effect of adoption of FSP FAS 115-2                                            |   |          |       |   |          |   |      |       |   |   |          |   |   |          | 12,407  |   |   |   | (12,407 | )             |   |   |   |   |   |   | - |   |   |   |   |
| Balance at December 31, 2008, as revised                                                  |   |          | 80,731,751 |   |          |   | 1,003,110 |       |   |   | 144,076       |   |   |          | 77,601  |   |   |   | (44,792 | )             |   |   | -      |   |   |   | 1,179,995 |   |   |   |   |
| Net income (loss)                                                                         |   |          | -          |   |          |   | -         |       |   |   | -             |   |   |          | (3,749  | )      |   |   | -       |          |   |   | -      |   |   |   | (3,749 | ) |   | $ | (3,749 | ) |
| Dividends declared Common                                                                 |   |          | -          |   |          |   | -         |       |   |   | -             |   |   |          | (17,999 | )      |   |   | -       |          |   |   | -      |   |   |   | (17,999 | ) |   |   |   |   |
| Dividends declared and accrued Preferred                                                  |   |          | -          |   |          |   | -         |       |   |   | -             |   |   |          | (3,710  | )      |   |   | -       |          |   |   | -      |   |   |   | (3,710 | ) |   |   |   |   |
| Shares issued under share-based plans,                                                    |   |          |       |   |          |   |      |       |   |   |          |   |   |          |    |   |   |   |    |          |   |   |   |   |   |   | - |   |   |   |   |   |
| net of excess tax benefits                                                                |   |          | 195,883    |   |          |   | 498       |       |   |   | -             |   |   |          | -       |   |   |   | -       |          |   |   | -      |   |   |   | 498 |   |   |   |   |   |
| Share-based compensation                                                                  |   |          | -          |   |          |   | 879       |       |   |   | -             |   |   |          | -       |   |   |   | -       |          |   |   | -      |   |   |   | 879 |   |   |   |   |   |
| Shares issued from optional cash and dividends reinvested                                 |   |          | 14,579,457 |   |          |   | 68,875    |       |   |   | -             |   |   |          | -       |   |   |   | -       |          |   |   | -      |   |   |   | 68,875 |   |   |   |   |   |
| Amortization of preferred discount                                                        |   |          |       |   |          |   | (441      | )          |   |   | 441           |   |   |          | -       |   |   |   | -       |          |   |   | -      |   |   |   | - |   |   |   |   |   |
| Other comprehensive income (loss), net   of reclassification adjustment         |   |          |       |   |          |   |      |       |   |   |          |   |   |          |    |   |   |   |    |          |   |   |   |   |   |   | - |   |   |   |   |   |
|  and taxes                                                                           |   |          | -          |   |          |   | -         |       |   |   | -             |   |   |          | -       |   |   |   | 8,748   |          |   |   | -      |   |   |   | 8,748 |   |   |   | 8,748 |   |
| Other comprehensive (loss), related to    securities for which other-than- |   |          |       |   |          |   |      |       |   |   |          |   |   |          |    |   |   |   |    |          |   |   |   |   |   |   | - |   |   |   | - |   |
| temporary impairment has been                                                             |   |          |       |   |          |   |      |       |   |   |          |   |   |          |    |   |   |   |    |          |   |   |   |   |   |   | - |   |   |   | - |   |
| recognized in earnings, net of tax                                                        |   |          | -          |   |          |   | -         |       |   |   | -             |   |   |          | -       |   |   |   | (16,914 | )             |   |   | -      |   |   |   | (16,914 | ) |   |   | (16,914 | ) |
| Total comprehensive (loss)                                                                |   |          | -          |   |          |   | -         |       |   |   | -             |   |   |          | -       |   |   |   | -       |          |   |   | -      |   |   |   | - |   |   | $ | (11,915 | ) |
| Balance at June 30, 2009                                                                  |   |          | 95,507,091 |   |          | $      | 1,072,921 |       |   | $      | 144,517       |   |   | $             | 52,143  |   |   | $      | (52,958 | )             |   | $      | -      |   |   | $ | 1,216,623 |   |   |   |   |   |
|                                                                                      |   |          |       |   |          |   |      |       |   |   |          |   |   |          |    |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                      |   | June 30, 2009 |       |   |          |   |      |       |   |   |          |   |   |          |    |   |   |   |    |          |   |   |   |
|                                                                                      |   | Before Tax    |       |   | Tax (expense) |   |      | Net of Tax |   |   |          |   |   |          |    |   |   |   |    |          |   |   |   |   |   |   |   |   |   |
|                                                                                      |   | Amount        |       |   | Benefit       |   |      | Amount     |   |   |          |   |   |          |    |   |   |   |    |          |   |   |   |   |   |   |   |   |   |
| Unrealized losses on securities                                                           |   |          |       |   |          |   |      |       |   |   |          |   |   |          |    |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized holding (losses) arising during period                                         |   | $             | (14,846    | )      |          | $      | 5,196     |       |   | $      | (9,650        | )      |   |          |    |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Less: reclassification adjustment of gains/losses                                         |   |          |       |   |          |   |      |       |   |   |          |   |   |          |    |   |   |   |    |          |   |   |   |   |   |   |   |   |   |
| realized in net income                                                                    |   |          | (2,284     | )      |          |   | 800       |       |   |   | (1,484        | )      |   |          |    |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive loss, net                                                             |   | $             | (12,562    | )      |          | $      | 4,396     |       |   | $      | (8,166        | )      |   |          |    |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |          |       |   |          |   |      |       |   |   |          |   |   |          |    |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                       |   |          |       |   |          |   |    |       |   |     |          |   |   |          |    |   |   |        |    |   |          |   |   |   |   |   |      |   |   |   |    |   |
|----------------------------------------------------------------------------|--------|---------------|------------|--------|---------------|--------|---------|------------|--------|----------|---------------|--------|--------|---------------|---------|--------|--------|-------------|---------|--------|---------------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|---------|--------|
| (dollars in thousands, except share data)                                  |   |          |       |   |          |   |    |       |   |     |          |   |   |          |    |   |   | Accumulated |    |   |          |   |   |   |   |   |      |   |   |   |    |
|                                                                       |   |          |       |   |          |   |    |       |   | Series B |          |   |   |          |    |   | Other  |        |    |   |          |   |   |   |   |   |      |   |   |   |
|                                                                       |   | Common        |       |   | Preferred     |   |    | Retained   |   |     | Comprehensive |   |   | Treasury      |    |   |   |        |    |   | Comprehensive |   |
| SIX MONTHS ENDED JUNE 30, 2008                                             |   | Shares        |       |   | Value         |   |    | Stock      |   |     | Earnings      |   |   | Income (Loss) |    |   | Stock  |        |    | Total  |          |   | Income |   |
|                                                                       |   |          |       |   |          |   |    |       |   |     |          |   |   |          |    |   |   |        |    |   |          |   |   |   |   |   |      |   |   |   |    |   |
| Balance at December 31, 2007                                               |   |          | 49,068,819 |   |          | $      | 491,011 |       |   | $        | 0             |   |   | $             | 83,091  |   |   | $           | (4,281  | )      |          |   | (8,025 | )      |   | $      | 561,796   |   |   |   |    |   |
|                                                                       |   |          |       |   |          |   |    |       |   |     |          |   |   |          |    |   |   |        |    |   |          |   |   |   |   |   |      |   |   |   |    |   |
| Net income                                                                 |   |          | -          |   |          |   | -       |       |   |     | -             |   |   |          | 48,807  |   |   |        | -       |   |          |   | -      |   |   |   | 48,807    |   |   | $      | 48,807  |   |
| Dividends declared Common                                                  |   |          | -          |   |          |   | -       |       |   |     | -             |   |   |          | (22,335 | )      |   |        | -       |   |          |   | -      |   |   |   | (22,335   | )      |   |   |    |   |
| Shares issued under share-based plans,                                     |   |          |       |   |          |   |    |       |   |     |          |   |   |          |    |   |   |        |    |   |          |   |   |   |   |   | -         |   |   |   |    |   |
| net of excess tax benefits                                                 |   |          | 619,133    |   |          |   | 3,774   |       |   |     | -             |   |   |          | -       |   |   |        | -       |   |          |   | 2,766  |   |   |   | 6,540     |   |   |   |    |   |
| Share-based compensation                                                   |   |          | -          |   |          |   | 1,045   |       |   |     | -             |   |   |          | -       |   |   |        | -       |   |          |   | -      |   |   |   | 1,045     |   |   |   |    |   |
| Shares issued for acquisition of:                                          |   |          |       |   |          |   |    |       |   |     |          |   |   |          |    |   |   |        |    |   |          |   |   |   |   |   | -         |   |   |   |    |   |
|  - Christiana Bank& Trust Company                                 |   |          | 2,732,813  |   |          |   | 43,839  |       |   |     | -             |   |   |          | -       |   |   |        | -       |   |          |   | -      |   |   |   | 43,839    |   |   |   |    |   |
|  - KNBT Bancorp, Inc.                                                 |   |          | 27,205,548 |   |          |   | 438,877 |       |   |     | -             |   |   |          | -       |   |   |        | -       |   |          |   | 5,623  |   |   |   | 444,500   |   |   |   |    |   |
| Other comprehensive (loss), net of   reclassification adjustment |   |          |       |   |          |   |    |       |   |     |          |   |   |          |    |   |   |        |    |   |          |   |   |   |   |   | -         |   |   |   |    |   |
|  and taxes                                                            |   |          | -          |   |          |   | -       |       |   |     | -             |   |   |          | -       |   |   |        | (37,472 | )      |          |   | -      |   |   |   | (37,472   | )      |   |   | (37,472 | )      |
| Total comprehensive income                                                 |   |          | -          |   |          |   | -       |       |   |     | -             |   |   |          | -       |   |   |        | -       |   |          |   | -      |   |   |   | -         |   |   | $      | 11,335  |   |
| Treasury shares purchased                                                  |   |          | (22,957    | )      |          |   | -       |       |   |     | -             |   |   |          | -       |   |   |        | -       |   |          |   | (364   | )      |   |   | (364      | )      |   |   |    |   |
| Balance at June 30, 2008                                                   |   |          | 79,603,356 |   |          | $      | 978,546 |       |   | $        | -             |   |   | $             | 109,563 |   |   | $           | (41,753 | )      |          | $      | -      |   |   | $      | 1,046,356 |   |   |   |    |   |
|                                                                       |   |          |       |   |          |   |    |       |   |     |          |   |   |          |    |   |   |        |    |   |          |   |   |   |   |   |      |   |   |   |    |   |
|                                                                       |   | June 30, 2008 |       |   |          |   |    |       |   |     |          |   |   |          |    |   |   |        |    |   |          |   |   |
|                                                                       |   | Before Tax    |       |   | Tax (expense) |   |    | Net of Tax |   |     |          |   |   |          |    |   |   |        |    |   |          |   |   |   |   |   |      |   |   |
|                                                                       |   | Amount        |       |   | Benefit       |   |    | Amount     |   |     |          |   |   |          |    |   |   |        |    |   |          |   |   |   |   |   |      |   |   |
| Unrealized losses on securities                                            |   |          |       |   |          |   |    |       |   |     |          |   |   |          |    |   |   |        |    |   |          |   |   |   |   |   |      |   |   |   |    |   |
| Unrealized holding (losses) arising during period                          |   | $             | (57,265    | )      |          | $      | 20,043  |       |   | $        | (37,222       | )      |   |          |    |   |   |        |    |   |          |   |   |   |   |   |      |   |   |   |    |   |
| Less: reclassification adjustment of                                       |   |          |       |   |          |   |    |       |   |     |          |   |   |          |    |   |   |        |    |   |          |   |   |   |   |   |      |   |   |   |    |   |
| gains realized in net income                                               |   |          | 384        |   |          |   | (134    | )          |   |     | 250           |   |   |          |    |   |   |        |    |   |          |   |   |   |   |   |      |   |   |   |    |   |
| Other comprehensive loss, net                                              |   | $             | (57,649    | )      |          | $      | 20,177  |       |   | $        | 37,472        |   |   |          |    |   |   |        |    |   |          |   |   |   |   |   |      |   |   |   |    |   |

----

| (Dollars in thousands)                                 |                                                                                      | Six Months Ended June 30,                                                        |                                                                                                                                              |
|--------------------------------------------------------|-------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                   |                                                                                      |                                                                             |                                                                                                                                              |   |   | 2009 |   | 2008 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                   |                                                                                      |                                                                             |                                                                                                                                              |   |   |
|   Net income (loss)                          |                                                                                      |  $           (3,749) |                                                                                                                                              |  $           48,807 |   |
|   Adjustments to reconcile net income to net |                                                                                      |                                                                             |                                                                                                                                              |   |   |
|                                                   | cash provided by operating activities:                                                    |                                                                             |                                                                                                                                              |   |   |   |
|                                                   | Provision for loan and lease losses                                                       |                                                                             |               55,025                                                        |   |                 7,121 |   |
|                                                   | Share-based compensation expense                                                          |                                                                             |                    879                             |   |                 1,045 |   |
|                                                   | Depreciation and amortization                                                             |                                                                             |                 8,747                                             |   |               10,285 |   |
|                                                   | Deferred income tax expense (benefit)                                                     |                                                                             |                  (187)                                       |   |                  (582) |   |
|                                                   | Amortization (Accretion) of premiums and discounts on                                     |                                                                             |                                                                                                                                              |   |   |   |
|                                                   |        investment securities, net                      |                                                                             |                  (910)                                       |   |               (1,522) |   |
|                                                   | Investment securities loss (gain), net                                                    |                                                                             |                 2,284                                             |   |                  (384) |   |
|                                                   | Undistributed net earnings of equity-method investments                                   |                                                                             |               (1,405)                                                       |   |               (1,422) |   |
|                                                   | Loans originated for resale                                                               |                                                                             |          (219,818)                                                                                   |   |             (63,049) |   |
|                                                   | Proceeds from sale of loans                                                               |                                                                             |            203,322                                                                         |   |               64,088 |   |
|                                                   | Gain on sale of loans, net                                                                |                                                                             |               (3,225)                                                       |   |               (1,039) |   |
|                                                   | Decrease in fair value of subordinated debt                                               |                                                                             |                 1,847                                             |   |                 2,151 |   |
|                                                   | Loss on recognition of impairment on security                                             |                                                                             |               14,921                                                        |   |                          - |   |
|                                                   | Bank-owned life insurance income                                                          |                                                                             |               (2,347)                                                       |   |               (3,422) |   |
|                                                   | Changes in assets and liabilities:                                                        |                                                                             |                                                                                                                                              |   |   |   |
|                                                   | (Increase) decrease in accrued interest receivable                                        |                                                                             |                 1,132                                             |   |                    974 |   |
|                                                   | Increase (decrease) in accrued interest payable                                           |                                                                             |                 5,644                                             |   |               (3,069) |   |
|                                                   | Decrease (increase) in other assets                                                       |                                                                             |                 5,230                                             |   |             (26,648) |   |
|                                                   | Increase (decrease) in other liabilities                                                  |                                                                             |             (27,377)                                                                  |   |                 9,154 |   |
|                                                   | Net cash provided by operating activities                                                 |                                                                             |               40,013                                                        |   |               42,488 |   |
|                                                   |                                                                                      |                                                                             |                                                                                                                                              |   |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                   |                                                                                      |                                                                             |                                                                                                                                              |   |   |
|                                                   | Cash equivalents received in excess of cash paid for business acquired                    |                                                                             |                         - |   |               36,426 |   |
|                                                   | Proceeds from maturities of investment securities held to maturity                        |                                                                             |               14,698                                                        |   |                 7,353 |   |
|                                                   | Purchase of investment securities held to maturity                                        |                                                                             |          (124,539)                                                                                   |   |                          - |   |
|                                                   | Proceeds from sales of investment securities available for sale                           |                                                                             |               16,761                                                        |   |               21,406 |   |
|                                                   | Proceeds from maturities of investment securities available for sale                      |                                                                             |            196,916                                                                         |   |             198,719 |   |
|                                                   | Purchase of investment securities available for sale                                      |                                                                             |          (371,102)                                                                                   |   |           (172,345) |   |
|                                                   | Net increase in loans and leases                                                          |                                                                             |             (12,340)                                                                  |   |           (285,711) |   |
|                                                   | Purchases of premises and equipment                                                       |                                                                             |                  (708)                                       |   |               (5,095) |   |
|                                                   | Proceeds from the sale of other real estate owned                                         |                                                                             |                    957                             |   |                    290 |   |
|                                                   | Proceeds from sale of bank building                                                       |                                                                             |                 2,550                                             |   |                    635 |   |
|                                                   |         Net cash used in investing activities     |                                                                             |          (276,807)                                                                                   |   |           (198,322) |   |
|                                                   |                                                                                      |                                                                             |                                                                                                                                              |   |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                   |                                                                                      |                                                                             |                                                                                                                                              |   |   |
|                                                   | Net increase in interest and non-interest                                                 |                                                                             |                                                                                                                                              |   |   |   |
|                                                   |     bearing demand deposits and savings accounts                      |                                                                             |            171,281                                                                         |   |             106,732 |   |
|                                                   | Net  increase (decrease) in certificates of deposit                             |                                                                             |            250,487                                                                         |   |             (27,302) |   |
|                                                   | Net increase in securities sold under                                                     |                                                                             |                                                                                                                                              |   |   |   |
|                                                   |     agreements to repurchase and federal funds purchased              |                                                                             |               32,504                                                        |   |             190,996 |   |
|                                                   | Net increase (decrease) in short-term borrowings                                          |                                                                             |                  (402)                                       |   |               22,231 |   |
|                                                   | Proceeds from  long-term borrowings                                             |                                                                             |                         - |   |             150,000 |   |
|                                                   | Repayments of long-term borrowings                                                        |                                                                             |          (112,722)                                                                                   |   |           (174,113) |   |
|                                                   | Shares issued under share-based plans                                                     |                                                                             |                    533                             |   |                 2,162 |   |
|                                                   | Excess tax (expense) benefits on share-based plans                                        |                                                                             |                    (35)                            |   |                    229 |   |
|                                                   | Issuance of shares under dividend reinvestment and stock purchase plan                    |                                                                             |               68,875                                                        |   |                 1,535 |   |
|                                                   | Purchase of Treasury stock                                                                |                                                                             |                         - |   |                  (364) |   |
|                                                   | Cash dividends Common                                                                     |                                                                             |             (17,999)                                                                  |   |             (22,335) |   |
|                                                   | Cash dividends Preferred                                                                  |                                                                             |               (3,187)                                                       |   |                          - |   |
|                                                   |         Net cash provided by financing activities |                                                                             |            389,335                                                                         |   |             249,771 |   |
|                                                   |         Net increase in cash and cash equivalents |                                                                             |            152,541                                                                         |   |               93,937 |   |
|                                                   | Cash and cash equivalents at beginning of year                                            |                                                                             |            195,830                                                                         |   |             111,520 |   |
|                                                   | Cash and cash equivalents at end of period                                                |                                                                             |  $        348,371                                                                                    |   |  $        205,457 |   |
|                                                   |                                                                                      |                                                                             |                                                                                                                                              |   |   |   |   |   |   |

----

----

|                                                  | June 30, 2009                                                                      |
|-------------------------------------------------------|------------------------------------------------------------------------------------|
| (dollars in thousands)                                | Amortized                                                                          |   | Gross unrealized |   | Gross unrealized |   | Fair |
|                                                  | cost                                                                               |   | gains |   | losses |   | value |
| Available for Sale                                    |                                                                               |   |   |   |   |   |   |
| U.S. Treasury securities                              |  $        94,744                      |   |  $                    - |   |  $                   (16) |   |  $        94,728 |
| U.S. Government agency securities                     |           64,005                 |   |                      287 |   |                        (2) |   |           64,290 |
| State and municipal bonds                             |          389,268                      |   |                    5,156 |   |                (16,475) |   |          377,949 |
| Mortgage-backed securities                            |          857,826                      |   |                  14,732 |   |                  (4,556) |   |          868,002 |
| Marketable equity and other securities                |          104,061                      |   |                      955 |   |                  (5,830) |   |           99,186 |
|    Total                               |  $   1,509,904                                                 |   |  $              21,130 |   |  $             (26,879) |   |  $   1,504,155 |
|                                                  |                                                                               |   |   |   |   |   |   |
|                                                  |                                                                               |   |   |   |   |   |   |
| Held to Maturity                                      |                                                                               |   |   |   |   |   |   |
| U.S. Treasury securities                              |  $            356 |   |  $                    11 |   |  $                    - |   |  $            367 |
| State and municipal bonds                             |          437,567                      |   |                      783 |   |                (10,483) |   |          427,867 |
| Mortgage-backed securities                            |          183,967                      |   |                    1,191 |   |                  (1,820) |   |          183,338 |
| Trust Preferred Pools/Collateralized Debt Obligations |           31,294                 |   |                      582 |   |                (25,166) |   |             6,710 |
|    Total                               |  $      653,184                                 |   |  $                2,567 |   |  $             (37,469) |   |  $      618,282 |
|                                                  |                                                                               |   |   |   |   |   |   |
|                                                  |                                                                               |   |   |   |   |   |   |
|                                                  | December 31, 2008                                                                  |
| (dollars in thousands)                                | Amortized                                                                          |   | Gross unrealized |   | Gross unrealized |   | Fair |
|                                                  | cost                                                                               |   | gains |   | losses |   | value |
| Available for Sale                                    |                                                                               |   |   |   |   |   |   |
| U.S. Treasury securities                              |  $        19,999                      |   |  $                    - |   |  $                    (2) |   |  $        19,997 |
| U.S. Government agency securities                     |           20,785                 |   |                      294 |   |                        - |   |           21,079 |
| State and municipal bonds                             |          656,417                      |   |                    7,412 |   |                (21,168) |   |          642,661 |
| Mortgage-backed securities                            |          821,462                      |   |                  14,150 |   |                (10,059) |   |          825,553 |
| Marketable equity and other securities                |           87,090                 |   |                    1,933 |   |                  (4,514) |   |           84,509 |
|    Total                               |  $   1,605,753                                                 |   |  $              23,789 |   |  $             (35,743) |   |  $   1,593,799 |
|                                                  |                                                                               |   |   |   |   |   |   |
|                                                  |                                                                               |   |   |   |   |   |   |
| Held to Maturity                                      |                                                                               |   |   |   |   |   |   |
| U.S. Treasury securities                              |  $            359 |   |  $                    15 |   |  $                    - |   |  $            374 |
| State and municipal bonds                             |          185,774                      |   |                    1,558 |   |                  (5,652) |   |          181,680 |
| Mortgage-backed securities                            |           74,066                 |   |                    1,565 |   |                     (128) |   |           75,503 |
| Trust Preferred Pools/Collateralized Debt Obligations |           65,891                 |   |                    3,559 |   |                (42,399) |   |           27,051 |
|   Total                                     |  $      326,090                                 |   |  $                6,697 |   |  $             (48,179) |   |  $      284,608 |
|                                                  |                                                                               |   |   |   |   |   |   |

----

|                                            |                 |                                                                                        |                                                                                        |                                                                     |                                                                                              | 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                        |                 | 9                                                                                           |                                                                                        |      $    94,728            |                                                                                              |      $       (16)                                  |                                                                            | $             - |                                            | $             - |   |       $       94,728 |   |          $      (16) |
| U.S. Government agencies                        |                 | 2                                                                                           |                                                                                        |             9,967 |                                                                                              |                  (2) |                                                                            |              -  |                                            |              -  |   |                   9,967 |   |                     (2) |
| State and municipal bonds                       |                 |           960                             |                                                                                        |      303,691                                    |                                                                                              |      (8,556)                                                                     |                                                                            |   266,007                                                              |                                            |    (17,791)                                                       |   |              569,698 |   |           (26,347) |
| State and municipal bonds (taxable)             |                 |                8 |                                                                                        |          9,381              |                                                                                              |         (472)                                                     |                                                                            |           361                  |                                            |         (139)                            |   |                   9,742 |   |                (611) |
| Mortgage-backed securities/Collateralized  |                 |                                                                                        |                                                                                        |                                                                     |                                                                                              |                                                                                                      |                                                                            |                                                                             |                                            |                                                                             |   |   |   |   |
|                             | Mortgage Obligations |                                                                                        |           119                             |                                                                     |      244,298                                                             |                                                                                                      |      (2,992)                                           |                                                                             |      79,179            |                                                                             |      (3,384) |   |               323,477 |   |             (6,376) |
| Trust Preferred Pools/Collateralized            |                 |                                                                                        |                                                                                        |                                                                     |                                                                                              |                                                                                                      |                                                                            |                                                                             |                                            |                                                                             |   |   |   |   |
|                                            | Debt Obligations     |                                                                                        |                8 |                                                                     |                 - |                                                                                                      |              - |                                                                             |        2,853 |                                                                             |    (25,166) |   |                   2,853 |   |           (25,166) |
| Total debt securities                           |                 |                                                                                        |        1,106                                             |                                                                     |      662,065                                                             |                                                                                                      |    (12,038)                                                      |                                                                             |   348,400                             |                                                                             |    (46,480) |   |   1,010,465 |   |    (58,518) |
|  Marketable equity securities              |                 |       29                                                           |                                                                                        | 5,181                                                                    |                                                                                              | (1,639)                                                                                                   |                                                                            | 5,585                                                                            |                                            | (4,191)                                                                          |   | 10,766 |   | (5,830) |
|                                            |                 | Total                                                                                       |                                                                                        |        1,135                          |                                                                                              |   $   667,246                                                                    |                                                                            | $   (13,677)                                                      |                                            | $  353,985                                                             |   | $   (50,671) |   | $  1,021,231 |   |   $  (64,348) |
|                                            |                 |                                                                                        |                                                                                        |                                                                     |                                                                                              |                                                                                                      |                                                                            |                                                                             |                                            |                                                                             |   |   |   |   |   |   |

|                                      |                 |                                                                                        |                                                                       |                                                            |                                             | 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                 |                 |                3 |                                                                       | $       19,997               |                                             | $             (2) |                       | $              - |                                            | $               - |   |   $     19,997 |   | $             (2) |
| State and municipal bonds                 |                 |           687                             |                                                                       |      385,739                           |                                             |    (20,229)                                                         |                       |      40,251                                              |                                            |      (5,617)                                                   |   |      425,990 |   |    (25,846) |
| State and municipal bonds (taxable)       |                 |             12                  |                                                                       |        13,888                |                                             |         (974)                              |                       |              -   |                                            |              -         |   |        13,888 |   |         (974) |
| Mortgage-backed securities/Collateralized |                 |                                                                                        |                                                                       |                                                            |                                             |                                                                               |                       |                                                                              |                                            |                                                                                    |   |   |   |   |
|                                      | Mortgage Obligations |                                                                                        |           140            |                                                            |      206,437            |                                                                               |    (10,141) |                                                                              |        2,628 |                                                                                    |           (46) |   |      209,065 |   |    (10,187) |
| Trust Preferred Pools/Collateralized      |                 |                                                                                        |                                                                       |                                                            |                                             |                                                                               |                       |                                                                              |                                            |                                                                                    |   |   |   |   |
|                                      | Debt Obligations     |                                                                                        |             22 |                                                            |        10,627 |                                                                               |    (14,028) |                                                                              |      11,211            |                                                                                    |    (28,371) |   |        21,838 |   |    (42,399) |
| Total debt securities                     |                 |                                                                                        |           864            |                                                            |      636,688            |                                                                               |    (45,374) |                                                                              |      54,090            |                                                                                    |    (34,034) |   |      690,778 |   |    (79,408) |
| Marketable equity securities              |                 |             26                  |                                                                       |          6,005     |                                             |      (1,035)                                              |                       |        4,899                                   |                                            |      (3,479)                                                   |   |        10,904 |   |      (4,514) |
|                                      |                 | Total                                                                                       |                                                                       |           890 |                                             | $     642,693                                             |                       |  $  (46,409)                                                       |                                            |   $   58,989                                                   |   |  $  (37,513) |   |   $   701,682 |   | $   (83,922) |
|                                      |                 |                                                                                        |                                                                       |                                                            |                                             |                                                                               |                       |                                                                              |                                            |                                                                                    |   |   |   |   |   |   |

----

| (dollars in thousands)              | Non credit-related |
|-------------------------------------|--------------------|
|                                |               | OTTI |
| Beginning Balance December 31, 2008 | $                  |                     19,087 |
| Additions                           |               |   |                     27,043 |
| Reductions                          |               |                     (1,022) |
| Ending Balance June 30, 2009        | $                  |                     45,108 |
|                                |               |   |   |

| ·  | Detailed credit and structural evaluation for each piece of collateral in the Collateralized Debt Obligations (“CDO”)                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·  | Collateral performance projections for each piece of collateral in the CDO (default, recovery and prepayment/amortization probabilities). For collateral that has already defaulted, recovery rates from 10-15% were assumed. Additional defaults ranged from 0.7% to 5.2% for year one, from .07% to 2.7% for year two and 0.5% to 0.7% for year three.Based on the view that it was unlikely that financing would become available in the foreseeable future, no collateral prepays were assumed over the lives of the investments.  |
| ·  | Terms of the CDO structure as established in the indenture:1. the cash flow waterfall (for both principal and interest)2. overcollateralization and interest coverage tests3. events of default/liquidation4. mandatory auction call5. optional redemption6. hedge agreement                                                                                                                                                                                                                             |
| ·  | Discounted cash flow modeling using discount rates ranging from 5.3% to 21.4%.                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

| ·  | The length of time and the extent to which the fair value has been less than the amortized cost basis |
|--------------|-------------------------------------------------------------------------------------------------------|
| ·  | Adverse conditions specifically related to the security, industry, or geographic area                 |
| ·  | Historical and implied volatility of the fair value of the security                                   |
| ·  | Credit risk concentrations                                                                            |
| ·  | Failure of the issuer to make scheduled interest or principal payments                                |
| ·  | Amount of principal expected to be recovered by stated maturity                                       |
| ·  | Ratings changes of the security                                                                       |
| ·  | Performance of bond collateral                                                                        |
| ·  | Recoveries or additional declines in fair value subsequent to the balance sheet date.                 |

|   |   |
|--------|--------|

----

| (dollars in thousands)                                                       |   |  Three months endedJune 30, 2009 |
|------------------------------------------------------------------------------|--------|---------------------------------------|
| Beginning balance, April 1, 2009                                             |   | $  (7,785)                  |
| Additions to OTTI securities where no credit losses were                     |   |                                  |
|         recognized prior to April 1, 2009 |   |      -       |
|   Additions to OTTI securities where credit losses have been       |   |                                  |
|        recognized prior to April 1, 2009       |   |      (7,136) |
| Ending balance, June 30, 2009                                                |   | $   (14,921)           |

----

----

|   | 5.  EARNINGS PER SHARE |
|--------|----------------------------------|

|                       |                            |                                                    | Three Months Ended June 30,                                                                                                           |                                                                                        |        |
|----------------------------|---------------------------------|---------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------|-------------|
|                       |                            | 2009                                                    |                                                                                                                                  | 2008                                                                                        |
|                       |                            | Net                                                     | Average                                                                                                                               |                                                                                        |        | Net | Average |   |
| (dollars in thousands,     | Loss                            | Shares                                                  | Per Share                                                                                                                             |                                                                                        | Income      | Shares | Per Share |
| except per share data)     | (numerator)                     | (denominator)                                           | Amount                                                                                                                                |                                                                                        | (numerator) | (denominator) | Amount |
|                       |                            |                                                    |                                                                                                                                  |                                                                                        |        |   |   |   |
| Basic earnings per share   |                            |                                                    |                                                                                                                                  |                                                                                        |        |   |   |
|                       | Net income (loss)               |  $     (7,548)            |            87,416                                                              |  $   (0.09)                                                             |        |  $     27,214 |           79,514 |  $   0.34 |
|                       |  Preferred stock dividends |                                                    |                                                                                                                                  |                                                                                        |        |   |   |   |
|                       | and accretion of discount       |         (2,095) |                       - |       (0.02)                                                  |        |                  - |                      - |           - |
|                       | Net income (loss) available     |                 |                                                                                |                                                               |        |          |            |        |
|                       | to common shareholders          |   (9,643)                                          |   87,416                                                                                                                         |   (0.11)                                                                               |        |   27,214 |   79,514 |   0.34 |
|                       |                            |                                                    |                                                                                                                                  |                                                                                        |        |   |   |   |
| Diluted earnings per share |                            |                                                    |                                                                                                                                  |                                                                                        |        |   |   |
|                       | Effect of dilutive securities:  |                                                    |                                                                                                                                  |                                                                                        |        |   |   |   |
|                       |    Options       |                                                    |                       - |                - |        |   |             1,112 |           - |
|                       | Net income (loss) available to  |                                                    |                                                                                                                                  |                                                                                        |        |   |   |   |
|                       | common shareholders             |                                                    |                                                                                                                                  |                                                                                        |        |   |   |   |
|                       | plus assumed conversions        |  $     (9,643)            |            87,416                                                              |  $   (0.11)                                                             |        |  $     27,214 |           80,626 |  $   0.34 |
|                       |                            |                                                    |                                                                                                                                  |                                                                                        |        |   |   |   |
|                       |                            |                                                    | Year-to-Date June 30,                                                                                                                 |                                                                                        |
|                       |                            | 2009                                                    |                                                                                                                                  | 2008                                                                                        |
|                       |                            | Net                                                     | Average                                                                                                                               |                                                                                        |        | Net | Average |   |
| (dollars in thousands,     | Loss                            | Shares                                                  | Per Share                                                                                                                             |                                                                                        | Income      | Shares | Per Share |
| except per share data)     | (numerator)                     | (denominator)                                           | Amount                                                                                                                                |                                                                                        | (numerator) | (denominator) | Amount |
|                       |                            |                                                    |                                                                                                                                  |                                                                                        |        |   |   |   |
| Basic earnings per share   |                            |                                                    |                                                                                                                                  |                                                                                        |        |   |   |
|                       | Net income (loss)               |  $     (3,749)            |            84,523                                                              |  $   (0.04)                                                             |        |  $     48,807 |           72,353 |  $   0.67 |
|                       |  Preferred stock dividends |                                                    |                                                                                                                                  |                                                                                        |        |   |   |   |
|                       | and accretion of discount       |         (4,149) |                       - |       (0.05)                                                  |        |                  - |                      - |           - |
|                       | Net income (loss) available     |                 |                                                                                     |                                                               |        |         |            |        |
|                       | to common shareholders          |   (7,898)                                          |   84,523                                                                                                                         |   (0.09)                                                                               |        |   48,807 |   72,353 |   0.67 |
|                       |                            |                                                    |                                                                                                                                  |                                                                                        |        |   |   |   |
| Diluted earnings per share |                            |                                                    |                                                                                                                                  |                                                                                        |        |   |   |
|                       | Effect of dilutive securities:  |                                                    |                                                                                                                                  |                                                                                        |        |   |   |   |
|                       |    Options       |                                                    |                     -             |              -             |        |   |                 734 |           - |
|                       | Net income (loss) available to  |                                                    |                                                                                                                                  |                                                                                        |        |   |   |   |
|                       | common shareholders plus        |                                                    |                                                                                                                                  |                                                                                        |        |   |   |   |
|                       | assumed conversions             |  $     (7,898)            |            84,523                                                              |  $   (0.09)                                                             |        |  $     48,807 |           73,087 |  $   0.67 |
|                       |                            |                                                    |                                                                                                                                  |                                                                                        |        |   |   |   |

----

|                       | As of and for the Six 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) | 123,073                            | (3,567) | 119,506 |
| Total non-interest income  | 15,997                             | 20,732 | 36,729 |
| Total non-interest expense | 99,942                             | 19,403 | 119,345 |
| Net income (loss)          | (1,909)                            | (1,840) | (3,749) |
|                       |                               |   |   |
|                       | As of and for the Six Months Ended |
|                       | June 30, 2008                      |
|                       | Community                          |   |   |
| (dollars in thousands)     | Banking                            | Other | Consolidated |
| Total assets               |  $   9,172,101 |  $       69,254 |  $    9,241,355 |
| Total deposits             | 6,083,717                          |                    - | 6,083,717 |
| Net interest income (loss) | 124,958                            | (2,266) | 122,692 |
| Total non-interest income  | 30,147                             | 21,965 | 52,112 |
| Total non-interest expense | 82,917                             | 19,823 | 102,740 |
| Net income (loss)          | 49,103                             | (296) | 48,807 |

----

|                                         |                                                                | Six Months Ended June 30,          |
|----------------------------------------------|---------------------------------------------------------------------|------------------------------------|
|                                         | 2009                                                                |                               | 2008 |
|                                         |                                                                |                               |   |   |
| Service cost                                 |  $   1,440,000                                  |                               |  $       836,670 |
| Interest cost                                |       1,018,000                       |                               |           911,516 |
| Expected return on plan assets               |     (1,132,000)                                 |                               |      (1,376,826) |
| Amortization of prior service cost           |         (258,000)           |                               |         (257,918) |
| Amortization of unrecognized net actual loss |           682,000 |                               |           111,466 |
|                                         | Net periodic benefit cost                                           |  $   1,750,000 |   |  $       224,908 |
|                                         |                                                                |                               |   |   |

----

----

----

|                           |                             | As of June 30, 2009             |                             |                                       |                                                 | As of December 31, 2008                              |
|--------------------------------|----------------------------------|---------------------------------|----------------------------------|--------------------------------------------|------------------------------------------------------|------------------------------------------------------|
|                           |                             |                            |                             | Estimated                                  |                                                 | Weighted-Average                                     |   |   |   |   |   | Estimated |
|                           |                             | Notional                        |                             | Fair                                       |                                                 | Years to                                             |   | Receive |   | Pay |   | Notional |   | Fair |
| (dollars in thousands)         | Amount                           |                            | Value                            |                                       | Maturity                                             |                                                 | Rate |   | Rate |   | Amount |   | Value |
|                           |                             |                            |                             |                                       |                                                 |                                                 |   |   |   |   |   |   |   |   |
| Interest rate swap agreements: |                             |                            |                             |                                       |                                                 |                                                 |   |   |   |   |   |   |   |
|                           | Pay fixed/receive variable swaps |  $ 352,580                 |                             |  $(21,562)                            |                                                 |         4.83 |   | 1.78% |   | 5.50% |   |  $    332,600 |   |  $(33,362) |
|                           | Pay variable/receive fixed       |     277,580 |                             |       18,873 |                                                 |         5.50 |   | 6.11% |   | 1.98% |   |        257,601 |   |       30,124 |
| Total swaps                    |  $ 630,160                  |                            |  $   (2,689) |                                       |         5.13 |                                                 | 3.69% |   | 3.95% |   |  $    590,201 |   |  $   (3,238) |
|                           |                             |                            |                             |                                       |                                                 |                                                 |   |   |   |   |   |   |   |   |

----

----

----

|                   |                                     |                                                                                                                                                                            | Quoted Prices    |                                                                                                                               | Significant |                                                                                                                 |         |                                                                                                 |         |
|------------------------|------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|------------------------------------------------------------------------------------------------------------------------------------|-------------|----------------------------------------------------------------------------------------------------------------------|--------------|------------------------------------------------------------------------------------------------------|--------------|
|                   |                                     |                                                                                                                                                                            | in Active        |                                                                                                                               | Other       |                                                                                                                 | Significant  |                                                                                                 | Balance      |
|                   |                                     |                                                                                                                                                                            | Markets for      |                                                                                                                               | Observable  |                                                                                                                 | Unobservable |                                                                                                 | as of        |
|                   |                                     |                                                                                                                                                                            | Identical Assets |                                                                                                                               | Inputs      |                                                                                                                 | Inputs       |                                                                                                 | June 30,     |
| (dollars in thousands) | (Level 1)                                |                                                                                                                                                                            | (Level 2)        |                                                                                                                               | (Level 3)   |                                                                                                                 | 2009         |
| June 30, 2009          |                                     |                                                                                                                                                                            |             |                                                                                                                               |        |                                                                                                                 |         |
| Assets                 |                                     |                                                                                                                                                                            |             |                                                                                                                               |        |                                                                                                                 |         |
|                   | Investment securities available for sale |  $                  6,064                                                        |             |  $      1,408,125                                                                               |        |  $     89,966                                                                          |         |  $  1,504,155                                                                         |
|                   | Interest rate locks                      |                              - |             |                      (79) |        |                    -  |         |                 (79) |
|                   | Interest rate swap agreements            |                              - |             |                18,873                                   |        |                    -  |         |            18,873                             |
|                   |                                     |                                                                                                                                                                            |             |                                                                                                                               |        |                                                                                                                 |         |                                                                                                 |         |
| Liabilities            |                                     |                                                                                                                                                                            |             |                                                                                                                               |        |                                                                                                                 |         |
|                   | Subordinated debt                        |  $               52,506                                                                         |             |  $                    -   |        | $                   - |         |      $       52,506                      |
|                   | Interest rate swap agreements            |                              - |             |                21,562                                   |        |                    -  |         |            21,562                             |
|                   |                                     |                                                                                                                                                                            |             |                                                                                                                               |        |                                                                                                                 |         |                                                                                                 |         |
|                   |                                     |                                                                                                                                                                            | Quoted Prices    |                                                                                                                               | Significant |                                                                                                                 |         |                                                                                                 |         |
|                   |                                     |                                                                                                                                                                            | in Active        |                                                                                                                               | Other       |                                                                                                                 | Significant  |                                                                                                 | Balance      |
|                   |                                     |                                                                                                                                                                            | Markets for      |                                                                                                                               | Observable  |                                                                                                                 | Unobservable |                                                                                                 | as of        |
|                   |                                     |                                                                                                                                                                            | Identical Assets |                                                                                                                               | Inputs      |                                                                                                                 | Inputs       |                                                                                                 | December 31, |
| (dollars in thousands) | (Level 1)                                |                                                                                                                                                                            | (Level 2)        |                                                                                                                               | (Level 3)   |                                                                                                                 | 2008         |
| December 31, 2008      |                                     |                                                                                                                                                                            |             |                                                                                                                               |        |                                                                                                                 |         |
| Assets                 |                                     |                                                                                                                                                                            |             |                                                                                                                               |        |                                                                                                                 |         |
|                   | Investment securities available for sale |  $               27,397                                                                         |             |  $      1,492,702                                                                               |        |  $     73,700                                                                          |         |  $  1,593,799                                                                         |
|                   | Interest rate locks                      |                              - |             |                     369        |        |                    -  |         |                 369  |
|                   | Interest rate swap agreements            |                              - |             |                30,124                                   |        |                    -  |         |            30,124                             |
|                   |                                     |                                                                                                                                                                            |             |                                                                                                                               |        |                                                                                                                 |         |                                                                                                 |         |
| Liabilities            |                                     |                                                                                                                                                                            |             |                                                                                                                               |        |                                                                                                                 |         |
|                   | Subordinated debt                        |  $               50,659                                                                         |             |  $                    -   |        |    $                - |         |  $       50,659                                              |
|                   | Interest rate swap agreements            |                              - |             |                33,362                                   |        |                    -  |         |            33,362                             |

|                   |                                          |                                                                                                                                                                            | June 30, 2009                                                                                                                                                                   |                                                                                                        | December 31, 2008                                                                                |
|------------------------|-----------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|
|                   |                                          |                                                                                                                                                                            |  Investment                                                                                                                                                                |                                                                                                        |  Investment                                                                                 |   |
|                   |                                          |                                                                                                                                                                            |  Securities                                                                                                                                                                |                                                                                                        |  Securities                                                                                 |   |
| (dollars in thousands) |  Available for Sale                      |                                                                                                                                                                            |  Available for Sale                                                                                                                                                        |
| Assets                 |                                          |                                                                                                                                                                            |                                                                                                                                                                            |                                                                                                        |
|                   | Beginning Balance                             |  $               73,700                                                                         |                                                                                                                                                                            |  $         194,047                                        |                                                                                             |
|                   | Total gains/(losses) - (realized/unrealized): |                                                                                                                                                                            |                                                                                                                                                                            |                                                                                                        |                                                                                             |
|                   |                                          | Included in other comprehensive income/(loss)                                                                                                                                   |                       (694)                                       |                                                                                                        |              (29,027)           |   |
|                   | Purchases, issuances, and settlements         |                    16,960                                                        |                                                                                                                                                                            |                  3,147 |                                                                                             |
|                   | Transfer into Level 3 from KNBT and           |                                                                                                                                                                            |                                                                                                                                                                            |                                                                                                        |                                                                                             |
|                   |                                          | Christiana                                                                                                                                                                      |                              - |                                                                                                        |                44,813 |   |
|                   | Transfer out to held to maturity              |                              - |                                                                                                                                                                            |            (139,280)                                 |                                                                                             |
|                   | Ending balance                                |  $               89,966                                                                         |                                                                                                                                                                            |  $            73,700                       |                                                                                             |
|                   |                                          |                                                                                                                                                                            |                                                                                                                                                                            |                                                                                                        |                                                                                             |   |

----

|                           |                                                                                                                                                                            |   | Quoted Prices                                                                                                                                                 |   | Significant                                                                                                         |   |                                                                     |   |    |
|--------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|--------|---------|
|                           |                                                                                                                                                                            |   | in Active                                                                                                                                                     |   | Other                                                                                                               |   | Significant                                                              |   | Balance |
| (dollars in thousands)         | Markets for                                                                                                                                                                     |   | Observable                                                                                                                                                    |   | Unobservable                                                                                                        |   | as of                                                                    |
| June 30, 2009                  | Identical Assets                                                                                                                                                                |   | Inputs                                                                                                                                                        |   | Inputs                                                                                                              |   | June 30,                                                                 |
|                           |                                                                                                                                                                            |   | (Level 1)                                                                                                                                                     |   | (Level 2)                                                                                                           |   | (Level 3)                                                                |   | 2009    |
| Loans and leases held for sale |  $               23,326                                                                         |   |                           - |   |                    - |   |  $       23,326                  |
| Impaired loans, net            |                              - |   |                           - |   |          98,438                                                        |   |            98,438 |
|                           |                                                                                                                                                                            |   |                                                                                                                                                          |   |                                                                                                                |   |                                                                     |   |    |
|                           |                                                                                                                                                                            |   |                                                                                                                                                          |   |                                                                                                                |   |                                                                     |   |    |
|                           |                                                                                                                                                                            |   |                                                                                                                                                          |   |                                                                                                                |   |                                                                     |   |    |
|                           |                                                                                                                                                                            |   | Quoted Prices                                                                                                                                                 |   | Significant                                                                                                         |   |                                                                     |   |    |
|                           |                                                                                                                                                                            |   | in Active                                                                                                                                                     |   | Other                                                                                                               |   | Significant                                                              |   | Balance |
| (dollars in thousands)         | Markets for                                                                                                                                                                     |   | Observable                                                                                                                                                    |   | Unobservable                                                                                                        |   | as of                                                                    |
| December 31, 2008              | Identical Assets                                                                                                                                                                |   | Inputs                                                                                                                                                        |   | Inputs                                                                                                              |   | December 31,                                                             |
|                           |                                                                                                                                                                            |   | (Level 1)                                                                                                                                                     |   | (Level 2)                                                                                                           |   | (Level 3)                                                                |   | 2008    |
| Loans and leases held for sale |  $                  3,605                                                        |   |  $                 -                                                |   |  $                 -      |   |  $          3,605 |
| Impaired loans, net            |                              - |   |                           - |   |          27,510                                                        |   |            27,510 |
|                           |                                                                                                                                                                            |   |                                                                                                                                                          |   |                                                                                                                |   |                                                                     |   |    |

|   |                                     | June 30, 2009                                                       |   |                                                    |   | December 31, 2008                                       |   |                                                          |
|--------|------------------------------------------|---------------------------------------------------------------------|--------|---------------------------------------------------------|--------|---------------------------------------------------------|--------|---------------------------------------------------------------|
|   | (dollars in thousands)                   | Carrying                                                            |   | Estimated                                               |   | Carrying                                                |   | Estimated                                                     |
|   |                                     | Amount                                                              |   | Fair Value                                              |   | Amount                                                  |   | Fair Value                                                    |
|   | Cash and cash equivalents                |  $      348,371                  |   |  $     348,371            |   |  $     195,830            |   |  $      195,830            |
|   | Investment securities available for sale |       1,504,155                       |   |      1,504,155                 |   |      1,593,799                 |   |       1,593,799                 |
|   | Investment securities held to maturity   |           653,184 |   |         618,282 |   |         326,090 |   |          284,608 |
|   |                                     |                                                                |   |                                                    |   |                                                    |   |                                                          |

----

|   |                                      | June 30, 2009                      |   | December 31, 2008            |
|--------|-------------------------------------------|------------------------------------|--------|------------------------------|
|   | (dollars in thousands)                    | Carrying                           |   | Estimated                    |   | Carrying |   | Estimated |
|   |                                      | Amount                             |   | Fair Value                   |   | Amount |   | Fair Value |
|   |                                      |                               |   |                         |   |   |   |   |
|   | Net loans (excluding loans held for sale) |  $   6,185,210 |   |  $  5,979,722 |   |  $  6,228,263 |   |  $   6,212,367 |

|                                 |                                                                | June 30, 2009                                                       |                                                    |                                                    |                                                    | December 31, 2008                                       |                                                          |                                                          |
|--------------------------------------|---------------------------------------------------------------------|---------------------------------------------------------------------|---------------------------------------------------------|---------------------------------------------------------|---------------------------------------------------------|---------------------------------------------------------|---------------------------------------------------------------|---------------------------------------------------------------|
| (dollars in thousands)               | Carrying                                                            |                                                                | Estimated                                               |                                                    | Carrying                                                |                                                    | Estimated                                                     |
|                                 |                                                                | Amount                                                              |                                                    | Fair Value                                              |                                                    | Amount                                                  |                                                          | Fair Value                                                    |
| Deposits with stated maturities      |  $   2,882,734                                  |                                                                |  $  2,901,986                            |                                                    |  $  2,636,713                            |                                                    |  $   2,675,644                            |
| Repurchase agreements, federal funds |                                                                |                                                                |                                                    |                                                    |                                                    |                                                    |                                                          |
|                                 | purchased and short-term borrowings                                 |           683,409 |                                                    |         683,409 |                                                    |         651,307 |                                                          |          651,307 |
| Long-term borrowings                 |           842,169 |                                                                |         915,634 |                                                    |         955,983 |                                                    |       1,022,885                 |
| Subordinated debt                    |           129,827 |                                                                |         129,827 |                                                    |         127,980 |                                                    |          127,980 |
|                                 |                                                                |                                                                |                                                    |                                                    |                                                    |                                                    |                                                          |                                                          |

|                   |                                                                                                                      | Six Months Ended |
|------------------------|---------------------------------------------------------------------------------------------------------------------------|------------------|
|                   |                                                                                                                      | June 30,         |
| (dollars in thousands) | 2009                                                                                                                      |             | 2008 |
| Interest               |  $      86,446                                                                         |             |  $   110,274 |
| Taxes                  |                     - |             |          27,616 |
|                   |                                                                                                                      |             |   |   |

|                                                      |                                                                                                                      | Six Months Ended                                  |
|-----------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|
| (dollars in thousands)                                    | June 30,                                                                                                                  |
|                                                      |                                                                                                                      | 2009                                              |   | 2008 |
| Transfers of loans to other real estate                   |  $            368                                        |                                              |  $           996 |
| Other than temporary impairment investments               |           40,942                                                        |                                              |                    - |
| Dividends accrued not paid on preferred stock             |                521                             |                                              |                    - |
| Non-cash share based compensation plan transactions       |                     - |                                              |            2,865 |
| Transfer of investment securities from available-for-sale |                                                                                                                      |                                              |   |
|                                                      | to held to maturity                                                                                                       |        251,711 |   |       139,280 |

----

|                                                 |                                                                                                          | Six Months Ended                                                                                   |
|------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|
|                                                 |                                                                                                          | June 30,                                                                                           |
| (dollars in thousands)                               | 2009                                                                                                          |                                                                                               | 2008 |
| Details of acquisition:                              |                                                                                                          |                                                                                               |   |
| Fair value of assets acquired                        |  $               -            |                                                                                               | $     3,160,123 |
| Fair value of liabilities assumed                    |                   - |                                                                                               |  (2,664,059) |
| Stock issued for acquisitions                        |                   - |                                                                                               |     (484,574) |
| Cash paid for acquisitions                           |                   - |                                                                                               |          11,490 |
| Cash and cash equivalents acquired with acquisitions |                   - |                                                                                               |          47,916 |
| Cash equivalents received in excess of cash          |                                                                                                          |                                                                                               |   |
|                                                 | paid for businesses acquired                                                                                  |  $               - |   | $          36,426 |
|                                                 |                                                                                                          |                                                                                               |   |   |

| ·  | allowance for loan and lease losses;                                                  |
|--------------|---------------------------------------------------------------------------------------|
| ·  | goodwill impairment;                                                                  |
| ·  | deferred tax assets, liabilities, and uncertain tax positions;                        |
| ·  | fair value measurements, including assessment of other-than-temporary impairment; and |
| ·  | business combinations.                                                                |

----

----

|                                                   |                                                                                                                                                 | Six Months Ended                                                                                                                                     |                                                                                |
|--------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------|
| (dollars in thousands)                                 | June 30, 2009                                                                                                                                        |                                                                                                                                                 | June 30, 2008                                                                       |   |
| Net Income (loss) available to common shareholders     |  $                 (7,898)                                 |                                                                                                                                                 |  $       48,807                             |   |
| After tax unrealized fair market value gain on NPB     |                                                                                                                                                 |                                                                                                                                                 |                                                                                |   |
|                                                   | Capital Trust II Preferred Securities                                                                                                                |                       1,201            |                                                                                |              1,398 |   |
| After tax other than temporary impairment charge       |                                                                                                                                                 |                                                                                                                                                 |                                                                                |   |
|                                                   | on  investments                                                                                                                            |                       9,699            |                                                                                |                      - |   |
| After tax special FDIC assessment                      |                       3,006            |                                                                                                                                                 |                                                                                |   |
| Core net income                                        |  $                   6,008                       |                                                                                                                                                 |  $       50,205                             |   |
|                                                   |                                                                                                                                                 |                                                                                                                                                 |                                                                                |   |   |
| Basic earnings (loss) available to common shareholders |  $                   (0.09)                      |                                                                                                                                                 |  $            0.67 |   |
| After tax unrealized fair market value gain on NPB     |                                                                                                                                                 |                                                                                                                                                 |                                                                                |   |
|                                                   | Capital Trust II Preferred Securities                                                                                                                |                         0.01 |                                                                                |                0.02 |   |
| After tax other than temporary impairment charge       |                                                                                                                                                 |                                                                                                                                                 |                                                                                |   |
|                                                   | on investments                                                                                                                                       |                         0.11 |                                                                                |                      - |   |
| After tax special FDIC assessment                      |                         0.04 |                                                                                                                                                 |                                                                                |   |
| Core diluted earnings per share                        |  $                     0.07            |                                                                                                                                                 |  $            0.69 |   |
|                                                   |                                                                                                                                                 |                                                                                                                                                 |                                                                                |   |   |

|                                           |                                            | Six Months Ended June 30,                                                                          |   |
|------------------------------------------------|-------------------------------------------------|----------------------------------------------------------------------------------------------------|--------|
| (dollars in thousands, percentages annualized) | 2009                                            |                                                                                               | 2008   |   |
| Return on average shareholders' equity         | (0.64)%                                         |                                                                                               | 10.48% |   |
| Effect of goodwill and intagibles              | (0.63)%                                         |                                                                                               | 12.29% |   |
| Return on average tangible equity              | (1.27)%                                         |                                                                                               | 22.77% |   |
| Effect of Preferred Stock                      | (0.40)%                                         |                                                                                               | 0.00%  |   |
| Return on average tangible common equity       | (1.67)%                                         |                                                                                               | 22.77% |   |
|                                           |                                            |                                                                                               |   |   |   |
| Average tangible equity excludes acquisition   |                                            |                                                                                               |   |   |
| related average goodwill and intangibles:      |                                            |                                                                                               |   |   |
|                                           | Average shareholders' equity                    |  $           1,187,909                 |   |  $     936,549 |   |
|                                           | Average goodwill and intangibles                | (591,698)                                                                                          |   | (505,498) |   |
|                                           | Average tangible equity                         |  $              596,211 |   |  $     431,051 |   |
|                                           | Average common equity                           | 1,043,400                                                                                          |   | 936,549 | * |
|                                           | Average tangible common equity                  | 451,702                                                                                            |   | 431,051 |   |
|                                           | * No preferred stock was issued as of June 2008 |                                                                                               |   |   |   |

----

| ·  | Loans to individuals to finance the purchase of personal assets or activities are substantially collateralized by residential real estate. This represents $966.0 million or 15.3% of total loans.                                                                                                                                                                             |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·  | Residential mortgage loans for the purchase or financing of an individual’s private residence were $1.04 billion or 16.4% of total loans. The Company’s residential mortgage loan portfolio consists substantially of “prime/agency” loans, which are based on 80% of appraised value and are made to borrowers with averageor better credit ratings.  |
| ·  | Commercial loans were $4.31 billion or 68.3% of the total loan portfolio. This category includes commercial real estate, commercial construction and commercial and industrial loans.                                                                                                                                                                                               |

| · | General economic conditions;                                                                                       |
|--------|--------------------------------------------------------------------------------------------------------------------|
| · | Trends in charge-offs for each loan type;                                                                          |
| · | The level of delinquent and nonperforming assets, including loans over 90 days delinquent and impaired loans;      |
| · | A review of portfolio concentration of any type, either customer, industry loan type, collateral or riskgrade; and |
| · | Levels of criticized loans.                                                                                        |

| (dollars in thousands) | 06/30/09                                                                            |   | 12/31/08                                                           |   | 12/31/07                                                                                            |   | 12/31/06                                                                                      |   | 12/31/05                                                                            |
|------------------------|-------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------|
|                   |                                                                                |   |                                                               |   |                                                                                                |   |                                                                                          |   |                                                                                |
| Specific reserves      |  $        21,780                       |   |  $         5,086 |   |  $            613                  |   |  $        1,307                                  |   |  $          1,716            |
| Allocated reserves     |            66,974            |   | 72,368                                                             |   |           54,162                                  |   |          56,787                                  |   |            52,189            |
| Unallocated reserves   |              9,559 |   | 6,552                                                              |   |                 122 |   |                212 |   |              2,159 |
|                   |  $        98,313                       |   |  $       84,006            |   |  $       54,897                                             |   |  $      58,306                                             |   |  $        56,064                       |
|                   |                                                                                |   |                                                               |   |                                                                                                |   |                                                                                          |   |                                                                                |

----

| (dollars in thousands)                      | 06/30/09                                                      |   | 12/31/08                                                |   | 12/31/07                                                           |   | 12/31/06                                                     |   | 12/31/05                                                                 |
|---------------------------------------------|---------------------------------------------------------------|--------|---------------------------------------------------------|--------|--------------------------------------------------------------------|--------|--------------------------------------------------------------|--------|--------------------------------------------------------------------------|
|                                        |                                                          |   |                                                    |   |                                                               |   |                                                         |   |                                                                     |
| Nonperforming loans                         |  $     122,981                  |   |  $       35,586 |   |  $       15,285            |   |  $        8,648 |   |  $        12,144            |
| Nonperforming loans to total loans          | 1.95%                                                         |   | 0.56%                                                   |   | 0.39%                                                              |   | 0.24%                                                        |   | 0.40%                                                                    |
| Delinquent loans                            |  $        26,960 |   |  $       20,782 |   |  $         7,041 |   |  $        8,196 |   |  $          3,399 |
| Delinquent loans to total loans             | 0.43%                                                         |   | 0.33%                                                   |   | 0.18%                                                              |   | 0.23%                                                        |   | 0.11%                                                                    |
| Classified loans                            |  $     375,842                  |   |  $     196,349            |   |  $       68,970            |   |  $      66,390            |   |  $        74,756            |
| Classified loans to total loans             | 5.96%                                                         |   | 3.11%                                                   |   | 1.78%                                                              |   | 1.83%                                                        |   | 2.45%                                                                    |
| Tier 1 capital and ALLL                     |  $     907,913                  |   |  $     825,628            |   |  $     454,063                       |   |  $    423,390                       |   |  $     374,478                             |
| Classified loans to tier 1 capital and ALLL | 41.40%                                                        |   | 23.78%                                                  |   | 15.19%                                                             |   | 15.68%                                                       |   | 19.96%                                                                   |
| Total gross loans                           |  $  6,306,849                                  |   |  $ 6,315,874                                       |   |  $ 3,875,253                                                  |   |  $ 3,631,937                                            |   |  $  3,049,808                                             |

| ·   | Economic outlook |
|--------------------|------------------|

| ·   | Trends in delinquency and problem loans |
|--------------------|-----------------------------------------|

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

| ·   | Effects of changes in lending policy |
|--------------------|--------------------------------------|

| ·   | Experience, ability, and depth of lending management |
|--------------------|------------------------------------------------------|

| ·   | Concentrations of credit |
|--------------------|--------------------------|

| ·   | Board and Loan Review oversight |
|--------------------|---------------------------------|

| ·   | Competition and other external factors |
|--------------------|----------------------------------------|

----

| (dollars in thousands)                                     |   | June 30,  |   | December 31, |   |
|------------------------------------------------------------|--------|-----------|--------|--------------|--------|
|                                                       |   | 2009      |   | 2008         |   |
| Restructured loans                                         | $      | 603       | $      | 623          |   |
| Nonaccrual loans and leases                                |   | 119,615   |   | 31,972       |   |
|    Impaired and resturctured loans          |   | 120,218   |   | 32,595       |   |
|                                                       |   |      |   |         |   |
| Loans past due 90 or more days as to interest or principal | 2,763  |      | 2,991  |         |
|    Total non-performing loans               |   | 122,981   |   | 35,586       |   |
| Other real estate owned                                    |   | 1,359     |   | 1,552        |   |
|    Total non-performing assets              | $      | 124,340   | $      | 37,138       |   |
|                                                       |   |      |   |         |   |
| Total loans and leases, including loans held for sale      | $      | 6,306,849 | $      | 6,315,874    |   |
|                                                       |   |      |   |         |   |
| Average total loans and leases                             | $      | 6,368,928 | $      | 5,936,805    |   |
|                                                       |   |      |   |         |   |
| Allowance for loan and lease losses                        | $      | 98,313    | $      | 84,006       |   |
|                                                       |   |      |   |         |   |
| Allowance for loan and lease losses to:                    |   |      |   |         |   |
|    Non-performing assets                    |   | 79.07     | %      | 226.20       | %      |
|    Total loans and leases                   |   | 1.56      | %      | 1.33         | %      |
|    Average total loans and leases           |   | 1.54      | %      | 1.42         | %      |

----

|                             |                                        | For Six Months Ended |                                             | For Three Months Ended |
|----------------------------------|---------------------------------------------|----------------------|--------------------------------------------------|------------------------|
| (dollars in thousands)           | June 30,                                    |                 | June 30,                                         |
|                             |                                        | 2009                 |                                             | 2008                   |   | 2009 |   | 2008 |
| Net charge-offs                  |  $     40,718 |                 |  $      6,260 |                   |  $ 25,460 |   |  $   3,700 |
|                             |                                        |                 |                                             |                   |   |   |   |   |
| Net charge-offs (annualized) to: |                                        |                 |                                             |                   |   |   |   |
|                             | Total loans and leases                      | 1.29%                |                                             | 0.20%                  |   | 0.81% |   | 0.24% |
|                             | Average total loans and leases              | 1.28%                |                                             | 0.22%                  |   | 0.80% |   | 0.25% |
|                             | Allowance for loan and lease losses         | 82.80%               |                                             | 15.30%                 |   | 60.60% |   | 18.13% |

----

|                         |                                                                                                    |                                              |                                              | Six Months Ended June 30,                             |                                                                        |
|------------------------------|---------------------------------------------------------------------------------------------------------|---------------------------------------------------|---------------------------------------------------|-------------------------------------------------------|-----------------------------------------------------------------------------|
|                         |                                                                                                    |                                              |                                              | 2009                                                  |                                                                        | 2008 |   |
|                         |                                                                                                    |                                              |                                              |                                                  |                                                                        | Interest |   | Average |   |   |   | Interest |   | Average |   |
|                         |                                                                                                    |                                              |                                              | Average                                               |                                                                        | Income/ |   | Yield/ |   | Average |   | Income/ |   | Yield/ |   |
| (dollars in thousands)       | Balance                                                                                                 |                                              | Expense                                           |                                                  | Rate                                                                        |   | Balance |   | Expense |   | Rate |   |
| Interest-earning assets      |                                                                                                    |                                              |                                              |                                                  |                                                                        |   |   |   |   |   |   |   |
|                         | Interest bearing balances with banks                                                                    |                                              |                                              |                                                  |                                                                        |   |   |   |   |   |   |   |   |
|                         |                                                                                                    | and federal funds sold                            |  $      36,137 |                                                  |  $           45 |   | 0.25% |   |  $      23,478 |   |  $         498 |   | 4.27% |   |
|                         | Investment securities*                                                                                  |     1,959,772                 |                                              |       51,643            |                                                                        | 5.31% |   |     1,861,575 |   |       51,593 |   | 5.57% |   |
|                         | Total loans and leases*                                                                                 |     6,366,097                 |                                              |     171,401                       |                                                                        | 5.43% |   |     5,662,108 |   |     187,300 |   | 6.65% |   |
|                         |                                                                                                    |                                              | Total earning assets                              |  $ 8,362,006                                     |                                                                        |  $ 223,089 |   | 5.38% |   |  $ 7,547,161 |   |  $ 239,391 |   | 6.38% |   |
|                         |                                                                                                    |                                              |                                              |                                                  |                                                                        |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities |                                                                                                    |                                              |                                              |                                                  |                                                                        |   |   |   |   |   |   |   |
|                         | Interest bearing deposits                                                                               |  $ 5,942,152                                 |                                              |  $   62,022                       |                                                                        | 2.10% |   |  $ 4,961,399 |   |  $   72,365 |   | 2.93% |   |
|                         | Short-term borowings                                                                                    |        652,156 |                                              |         6,652 |                                                                        | 2.06% |   |        682,462 |   |       10,604 |   | 3.12% |   |
|                         | Long-term borrowings                                                                                    |     1,033,620                 |                                              |       23,415            |                                                                        | 4.57% |   |     1,099,673 |   |       24,245 |   | 4.43% |   |
|                         |                                                                                                    |                                              | Total interest-bearing liabilities                |  $ 7,627,928                                     |                                                                        |  $   92,089 |   | 2.43% |   |  $ 6,743,534 |   |  $ 107,214 |   | 3.20% |   |
|                         |                                                                                                    |                                              |                                              |                                                  |                                                                        |   |   |   |   |   |   |   |   |   |   |
| INTEREST RATE MARGIN**       |                                                                                                    |                                              |  $ 131,000                                   |                                                  | 3.16%                                                                       |   |   |   |  $ 132,177 |   | 3.52% |   |
|                         | Tax equivalent interest                                                                                 |                                              |                                              |     (11,494)                      |                                                                        | -0.28% |   |   |   |        (9,485) |   | -0.25% |   |
|                         | Net interest income                                                                                     |                                              |                                              |  $ 119,506                                       |                                                                        | 2.88% |   |   |   |  $ 122,692 |   | 3.27% |   |
|                         |                                                                                                    |                                              |                                              |                                                  |                                                                        |   |   |   |   |   |   |   |   |   |   |
|                         |   *Full taxable equivalent basis, using a 35% effective tax rate.                             |                                              |                                              |                                                  |                                                                        |   |   |   |   |   |
|                         | **Represents the difference between interest earned and interest paid, divided by total earning assets. |                                              |                                              |                                                  |                                                                        |
|                         | Loans outstanding, net of unearned income, include non-accruing loans.                                  |                                              |                                              |                                                  |                                                                        |   |   |   |
|                         | Fee income included.                                                                                    |                                              |                                              |                                                  |                                                                        |   |   |   |   |   |   |   |   |
|                         |                                                                                                    |                                              |                                              |                                                  |                                                                        |   |   |   |   |   |   |   |   |   |   |

----

|                                       |                                                  |                                                                    | Six Months Ended                      |                                                                        |                                   |                                                                                         |
|--------------------------------------------|-------------------------------------------------------|-------------------------------------------------------------------------|---------------------------------------|-----------------------------------------------------------------------------|----------------------------------------|----------------------------------------------------------------------------------------------|
| (dollars in thousands)                     | June 30, 2009 over 2008                               |                                                                    |                                  |                                                                        |
| Increase (decrease) due to:                | Volume                                                |                                                                    | Rate                                  |                                                                        | Total                                  |                                                                                         |
| Interest Income:                           |                                                  |                                                                    |                                  |                                                                        |                                   |                                                                                         |
|                                       | Interest bearing deposits in banks and fed funds sold |  $         175        |                                  |  $       (628)                      |                                   |  $       (453)                                       |   |
|                                       | Investment securities                                 |          2,571             |                                  |        (2,521)                           |                                   |                50 |   |
|                                       | Total loans and leases                                |        21,291                        |                                  |     (37,190)                                            |                                   |      (15,899)                                                       |   |
|                                       |                                                  | Total interest income                                                   |  $    24,037 |                                                                        |  $ (40,339)                       |                                                                                         |  $  (16,302) |   |
| Interest Expense:                          |                                                  |                                                                    |                                  |                                                                        |                                   |                                                                                         |
|                                       | Interest bearing deposits                             |  $    12,524                                   |                                  |  $ (22,867)                                                            |                                   |  $  (10,343)                                                                  |   |
|                                       | Short-term borrowings                                 |            (455) |                                  |        (3,497)                           |                                   |        (3,952)                                            |   |
|                                       | Long-term borrowings                                  |        (1,526)                       |                                  |             696 |                                   |           (830)                            |   |
|                                       |                                                  | Total interest expense                                                  |  $    10,543 |                                                                        |  $ (25,668)                       |                                                                                         |  $  (15,125) |   |
| Increase (decrease) in net interest income |  $    13,494                 |                                                                    |  $ (14,671)                      |                                                                        |  $    (1,177) |                                                                                         |
|                                       |                                                  |                                                                    |                                  |                                                                        |                                   |                                                                                         |   |   |

----

----

----

|                          |                      |                                                                                                                            |                               |                               |                                                                                                                                  |                         |                         |                                                                                                                                  |                         | Repricing Periods                            |                                                                                                                             |                                     |                                                     |              |
|-------------------------------|---------------------------|---------------------------------------------------------------------------------------------------------------------------------|------------------------------------|------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|------------------------------|------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|------------------------------|----------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|----------------------------------------------------------|-------------------|
|                          |                      |                                                                                                                            |                               |                               |                                                                                                                                  |                         | Three Months                 |                                                                                                                                  |                         | One Year                                     |                                                                                                                             |                                     |                                                     |              |   |   |
|                          |                      |                                                                                                                            |                               | Within                             |                                                                                                                                  |                         | Through                      |                                                                                                                                  |                         | Through                                      |                                                                                                                             |                                     | Over                                                     |              |   |   |
| (dollars in thousands)        | Three Months              |                                                                                                                            |                               | One Year                           |                                                                                                                                  |                         | Five Years                   |                                                                                                                                  |                         | 5 Years                                      |                                                                                                                             | Total                                    |                                                     |
| Interest-earning assets:      |                      |                                                                                                                            |                               |                               |                                                                                                                                  |                         |                         |                                                                                                                                  |                         |                                         |                                                                                                                             |                                     |                                                     |
|                          | Interest bearing deposits |  $        25,630                                                                   |                               |                               |  $                  -                  |                         |                         |  $                  -                  |                         |                                         |  $                    - |                                     |  $       25,630  |              |
|                          | Investment securities     |          239,607                                                                   |                               |                               |          363,164                                                                         |                         |                         |          599,363                                                                         |                         |                                         |           955,205                                                              |                                     |      2,157,339                  |              |
|                          | Loans and Leases (1)      |       2,667,072                                                                                   |                               |                               |          937,191                                                                         |                         |                         |      2,083,122                                                                                               |                         |                                         |           619,465                                                              |                                     |      6,306,849                  |              |
|                          |                      | Total interest-earning assets                                                                                                   |  $   2,932,309 |                               |                                                                                                                                  |  $  1,300,355 |                         |                                                                                                                                  |  $  2,682,485 |                                         |                                                                                                                             |  $    1,574,669 |                                                     |  $ 8,489,818 |   |
|                          |                      | Cumulative total interest-                                                                                                      |                               |                               |                                                                                                                                  |                         |                         |                                                                                                                                  |                         |                                         |                                                                                                                             |                                     |                                                     |              |   |
|                          |                      |                                                                                                                            | earning assets                     |  $   2,932,309 |                                                                                                                                  |                         |  $  4,232,664 |                                                                                                                                  |                         |  $  6,915,148                 |                                                                                                                             |                                     |  $    8,489,818                 |              |  $ 8,489,818 |   |
| Interest bearing liabilities: |                      |                                                                                                                            |                               |                               |                                                                                                                                  |                         |                         |                                                                                                                                  |                         |                                         |                                                                                                                             |                                     |                                                     |
|                          | Interest bearing deposits |  $   4,160,441                                                                                              |                               |                               |  $  1,393,503                                                                                                          |                         |                         |  $     514,281                                                                                          |                         |                                         |  $           1,831                                                   |                                     |      6,070,056                  |              |
|                          | Borrowed funds            |          590,930                                                                   |                               |                               |            66,817                                                              |                         |                         |          339,307                                                                         |                         |                                         |           528,523                                                              |                                     |      1,525,578                  |              |
|                          | Subordinated debt         |            77,321                                                        |                               |                               |                       - |                         |                         |                       - |                         |                                         |             52,506                                                   |                                     |         129,827  |              |
|                          |                      | Total interest-bearing                                                                                                          |                               |                               |                                                                                                                                  |                         |                         |                                                                                                                                  |                         |                                         |                                                                                                                             |                                     |                                                     |              |   |
|                          |                      |                                                                                                                            | liabilities                        |  $   4,828,693 |                                                                                                                                  |                         |  $  1,460,321 |                                                                                                                                  |                         |  $     853,588 |                                                                                                                             |                                     |  $       582,860 |              |  $ 7,725,461 |   |
|                          |                      | Cumulative total interest-                                                                                                      |                               |                               |                                                                                                                                  |                         |                         |                                                                                                                                  |                         |                                         |                                                                                                                             |                                     |                                                     |              |   |
|                          |                      |                                                                                                                            | bearing liabilities                |  $   4,828,693 |                                                                                                                                  |                         |  $  6,289,013 |                                                                                                                                  |                         |  $  7,142,601                 |                                                                                                                             |                                     |  $    7,725,461                 |              |  $ 7,725,461 |   |
| Interest-earning assets       |                      |                                                                                                                            |                               |                               |                                                                                                                                  |                         |                         |                                                                                                                                  |                         |                                         |                                                                                                                             |                                     |                                                     |
|                          | less interest bearing     |                                                                                                                            |                               |                               |                                                                                                                                  |                         |                         |                                                                                                                                  |                         |                                         |                                                                                                                             |                                     |                                                     |              |
|                          | liabilities               |  $ (1,896,383)                                                                                                             |                               |                               |  $(2,056,349)                                                                                                                    |                         |                         |  $   (227,452)                                                                                                    |                         |                                         |  $       764,357                                                                         |                                     |  $     764,357             |              |
| Cumulative interest-rate      |                      |                                                                                                                            |                               |                               |                                                                                                                                  |                         |                         |                                                                                                                                  |                         |                                         |                                                                                                                             |                                     |                                                     |
|                          | sensitivity gap           |  $ (1,896,383)                                                                                                             |                               |                               |  $(3,952,733)                                                                                                                    |                         |                         |  $(4,180,185)                                                                                                                    |                         |                                         |  $  (3,415,828)                                                                                                   |                                     |                                                     |              |
|                          |                      |                                                                                                                            |                               |                               |                                                                                                                                  |                         |                         |                                                                                                                                  |                         |                                         |                                                                                                                             |                                     |                                                     |              |   |   |
|                          | (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 interest rate environment prevailing during the first half of 2009.  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.                                                                      |                               |                               |                                                                                                                                  |                         |                         |                                                                                                                                  |                         |                                         |                                                                                                                             |

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| (dollars in thousands)       |   |                                         |   |      |
|------------------------------|--------|----------------------------------------------|--------|-----------|
|                         |   |                                         |   | % Change  |
| MVPE                         |   |                                         |   | from      |
| Change in Interest Rate      |   |  Amount                                 |   | Base Case |
| Rate Scenario                |   |                                         |   |      |
| + 300 basis point rate shock |   |  $     930,922 |   | -18.10%   |
| + 200 basis point rate shock |   |      1,008,949      |   | -11.20%   |
| + 100 basis point rate shock |   |      1,084,374      |   | -4.60%    |
|    base case  |   |      1,136,269      |   | 0.00%     |
| - 100 basis point rate shock |   |      1,151,398      |   | 1.30%     |
| - 200 basis point rate shock |   |      1,122,492      |   | -1.20%    |
| - 300 basis point rate shock |   |      1,083,123      |   | -4.70%    |

| (dollars in thousands)  |   |                                                                                                |   |       |   |                              |   |            |
|-------------------------|--------|-----------------------------------------------------------------------------------------------------|--------|------------|--------|-----------------------------------|--------|-----------------|
|                    |   | June 30,2009                                                                                        |   |       |   | June 30, 2008                     |   |            |
| Change in               |   |   Change in                                                                               |   | Change in  |   |  Change in                   |   |  Change in |
| Interest Rates          |   |   Net Income                                                                              |   | Net Income |   |  Net Income                  |   | Net Income      |
|  (in basis points) |   |                                                                                                |   |       |   |                              |   |            |
| + 300                   |   |  $         6,238                                  |   | 14.73%     |   |  $   (11,637) |   | -10.43%         |
| + 200                   |   |             3,381                       |   | 7.98%      |   | (7,029)                           |   | -6.30%          |
| + 100                   |   |                 576 |   | 1.36%      |   | (2,507)                           |   | -2.25%          |
| - 100                   |   |                 457 |   | 1.08%      |   | (992)                             |   | -0.89%          |
| - 200                   |   |           (4,200)                                 |   | -9.92%     |   | (9,455)                           |   | -8.47%          |
| - 300                   |   |           (9,536)                                 |   | -22.52%    |   | (15,226)                          |   | -13.65%         |

----

|                                                      |                                                    |                                                    |                                                                          |                                                                                                                      | 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 |  $       43,722 |                                                    |  $       6,784                        |                                                                                                                      |  $    10,253            |                                                                                                          |  $     6,939 |  $       19,746                                                                         |
| Remaining contractual maturities of time deposits         |      2,882,734                 |                                                    |     2,376,949                                             |                                                                                                                      |      436,231            |                                                                                                          |       64,713 |              4,841                                             |
| Loan commitments                                          |      1,748,668                 |                                                    |     1,049,042                                             |                                                                                                                      |      132,564            |                                                                                                          |       34,683 |         532,379                                                                         |
| Long-term borrowed funds                                  |         842,170 |                                                    |        129,123                             |                                                                                                                      |      172,676            |                                                                                                          |       54,500 |         485,871                                                                         |
| Guaranteed preferred beneficial interests in Company's    |                                                    |                                                    |                                                                          |                                                                                                                      |                                             |                                                                                                          |                                       |                                                                                                                            |
|                                                      |   subordinated debentures                     |         129,827 |                                                                          |                     - |                                             |                   - |                                       |                  -                         |         129,827 |
| Letters of credit                                         |         173,146 |                                                    |        119,561                             |                                                                                                                      |        43,250 |                                                                                                          |       10,335 |                      - |
| Dividends on Preferred Stock*                             |         103,125 |                                                    |             7,500 |                                                                                                                      |        15,000 |                                                                                                          |       16,500 |           64,125                                                              |
|                                                      |                                                    | Total                                                   |  $ 5,923,392                                                             |                                                                                                                      |  $ 3,688,959                                |                                                                                                          |  $  809,974                 |                                                                                                                            |  $ 187,670 |  $  1,236,789 |
|                                                      |                                                    |                                                    |                                                                          |                                                                                                                      |                                             |                                                                                                          |                                       |                                                                                                                            |   |   |
| *                                                         | Term is unlimited; assumed 10 year term for this table. |                                                    |                                                                          |                                                                                                                      |                                             |                                                                                                          |                                       |                                                                                                                            |   |
|                                                      |                                                    |                                                    |                                                                          |                                                                                                                      |                                             |                                                                                                          |                                       |                                                                                                                            |   |   |

|                           | 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, |
|                           | 2009                 |   | 2008                    |   | 2009                   |   | 2008 |   | 2009 |   | 2008 |
|                           |                 |   |                    |   |                   |   |   |   |   |   |   |
| The Company                    | 8.80%                |   | 8.50%                   |   | 11.31%                 |   | 10.65% |   | 12.56% |   | 11.85% |
| National Penn Bank             | 7.59%                |   | 7.90%                   |   | 9.79%                  |   | 10.00% |   | 11.04% |   | 11.19% |
| Christiana                     | 7.93%                |   | 10.20%                  |   | 11.18%                 |   | 11.82% |   | 12.44% |   | 13.07% |
| "Well Capitalized" institution | 5.00%                |   | 5.00%                   |   | 6.00%                  |   | 6.00% |   | 10.00% |   | 10.00% |
|                           |                 |   |                    |   |                   |   |   |   |   |   |   |

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----

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In July 2009, National Penn’s Board of Directors approved a third quarter 2009 cash dividend of $0.05 per share.  The Board reduced its common stock dividend following the first quarter 2009 to preserve capital and strengthen National Penn’s tangible common equity levels.  There is no assurancethat National Penn will pay dividends to its shareholders in the future, or if dividends are paid, that National Penn will increase its dividend to historical levels or otherwise.  National Penn’s ability to pay dividends to its shareholders is not only subject to limitations imposed by the terms of the CPP, but also to guidance issued by the Board of Governors of the Federal Reserve System (the "Federal Reserve").  Under this guidance, bank holding companies like National Penn are advisedto consult in advance with the Federal Reserve before declaring dividends, and to strongly consider reducing, deferring or eliminating dividends, in certain situations -  for example, when declaring or paying a dividend that would exceed earnings for the fiscal quarter for which the dividend is being paid, or when declaring or paying a dividend that could result in a material adverse change to the organization's capital structure.  Importantly, this Federal Reserve guidance is relevant notonly to dividends paid on National Penn's common stock, but also to those  payable in respect of National Penn's preferred stock held by U.S. Treasury.  National Penn’s failure to pay dividends on its preferred stock or common stock could have a material adverse effect on its business, operations, financial condition, access to funding and the market price of its common stock. 

----

----

| ·   | 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 oneor more lines of business. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In the current environment of increased investor activism, including hedge fund investment policies and practices, shareholder concerns or actions due to stock price fluctuations 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 |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Nominees                | For                                            |   | Withheld                                            |   | Abstentions |
|-------------------------|------------------------------------------------|--------|-----------------------------------------------------|--------|-------------|
| J. Ralph Borneman, Jr.  |       63,029,868 |   |        3,933,097 |   | 0           |
| Thomas L. Kennedy, Esq. |       63,236,530 |   |        3,726,435 |   | 0           |
| Albert H. Kramer        |       63,197,734 |   |        3,765,231 |   | 0           |
| Glenn E. Moyer          |       63,241,403 |   |        3,721,562 |   | 0           |
| Robert E. Rigg          |       62,872,566 |   |        4,090,399 |   | 0           |

| For                                            | Against |                                     | Abstentions |                                                                                  | Broker Nonvotes |
|------------------------------------------------|---------|------------------------------------------|-------------|---------------------------------------------------------------------------------------|-----------------|
|       53,317,521 |    |      11,746,715 |        |              280,439 |            | 0 |

| For                                            |   | Against                                                                   |   | Abstentions                                                                           |   | Broker Nonvotes |
|------------------------------------------------|--------|---------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|-----------------|
|       64,271,052 |   |            686,133 |   |              387,440 |   | 0               |

----

| For                                            |   | Against                                             |   | Abstentions                                                                           |   | Broker Nonvotes |
|------------------------------------------------|--------|-----------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|-----------------|
|       58,387,995 |   |        6,286,059 |   |              670,621 |   | 0               |

| 3.1    | Articles of Incorporation, as amended and restated, of National Penn Bancshares, Inc. (Incorporated by reference to Exhibit 3.1 to National Penn’s Report on Form 8-K dated April 21, 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 February 25, 2009, as filed on February 25, 2009.)                                                                            |
|   |                                                                                                                                                                                                                                                                            |
| 10.1   | National Penn Bancshares, Inc. Amended and Restated Dividend Reinvestment and Stock Purchase Plan (Incorporated by reference to Exhibit 10.1 to National Penn’s Report on Form 8-K dated   July 22, 2009, as filed on July 22, 2009.)                      |
|   |                                                                                                                                                                                                                                                                            |
| 10.2   | National Penn Bancshares, Inc. Amended and Restated Employee Stock Purchase Plan* (Incorporated by reference to Exhibit 10.2 to National Penn’s Report on Form 8-K dated  July 22, 2009, as filed on July 22, 2009.)                                            |
|   |                                                                                                                                                                                                                                                                            |
| 31.1   | Certification of President and Chief Executive Officer of National Penn Bancshares, Inc., pursuant to Commission Rule 13a-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                              |
|   |                                                                                                                                                                                                                                                                            |
| 31.2   | Certification of Treasurer and Chief Financial Officer of National Penn Bancshares, Inc.,pursuant to Commission Rule 13a-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                               |
|   |                                                                                                                                                                                                                                                                            |
| 32.1   | Certification of President and Chief Executive Officer of National Penn Bancshares, Inc., pursuant to Commission Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  (Furnished, not filed.)            |
|   |                                                                                                                                                                                                                                                                            |
| 32.2   | Certification of  Treasurer and Chief Financial Officer of National Penn Bancshares, Inc., pursuant to Commission Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  (Furnished, not filed.) |

----

|   |                 | NATIONAL PENN BANCSHARES, INC. |
|--------|----------------------|--------------------------------|
|   |                 | (Registrant)                   |
|   |                 |                           |
| Date:  | August 6, 2009       |                           | By: | /s/ Glenn E. Moyer |
|   |                 |                           |   | Name: | Glenn E. Moyer |
|   |                 |                           |   | Title: | President and CEO |
|   |                 |                           |   |   |   |
| Date:  |  August 6, 2009 |                           | By: | /s/ Michael R. Reinhard |
|   |                 |                           |   | Name: | Michael R. Reinhard |
|   |                 |                           |   | Title: | Treasurer and Chief Financial Officer |

----