| Pennsylvania                                                  |   | 23-2210237                       |
|---------------------------------------------------------------|--------|----------------------------------|
| (State or other jurisdictionof incorporation or organization) |   | (IRS EmployerIdentification No.) |

----

| HARLEYSVILLE NATIONAL CORPORATION                                                                                                |     |
|----------------------------------------------------------------------------------------------------------------------------------|----------|
|                                                                                                                             |     |
|                                                                                                                             |     |
| INDEX TO FORM 10-Q REPORT                                                                                                        |     |
|                                                                                                                             |     |
|                                                                                                                             | PAGE     |
|                                                                                                                             |     |
| Part I.              Financial Information                 |     |
|                                                                                                                             |     |
| Item 1.     Financial Statements:                                                                       |     |
|                                                                                                                             |     |
| Consolidated Balance Sheets at June 30, 2009 (unaudited) and December 31, 2008                                                   |  3  |
|                                                                                                                             |     |
| Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2009 and 2008 (unaudited)                      |  4  |
|                                                                                                                             |     |
| Consolidated Statements of Shareholders’ Equity for the Six Months Ended June 30, 2009 and 2008 (unaudited)                |  5  |
|                                                                                                                             |     |
| Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2009 and 2008 (unaudited)                                |  6  |
|                                                                                                                             |     |
| Notes to Consolidated Financial Statements                                                                                       |  7  |
|                                                                                                                             |     |
| Item 2.      Management's Discussion and Analysis of Financial Condition and Results of Operations |  31 |
|                                                                                                                             |     |
| Item 3.      Quantitative and Qualitative Disclosures about Market Risk                            |  47 |
|                                                                                                                             |     |
| Item 4.      Controls and Procedures                                                               |  47 |
|                                                                                                                             |     |
| Part II.            Other Information                                |  48 |
|                                                                                                                             |     |
| Item 1.      Legal Proceedings                                                                     |  48 |
|                                                                                                                             |     |
| Item 1A.   Risk Factors                                                                                           |  48 |
|                                                                                                                             |     |
| Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds                           |  49 |
|                                                                                                                             |     |
| Item 3.       Defaults Upon Senior Securities                                                 |  49 |
|                                                                                                                             |     |
| Item 4.       Submission of Matters to a Vote of Security Holders                             |  49 |
|                                                                                                                             |     |
| Item 5.       Other Information                                                               |  49 |
|                                                                                                                             |     |
| Item 6.       Exhibits                                                                             |  49 |
|                                                                                                                             |     |
| Signatures                                                                                                                       |  50 |

----

| PART I. FINANCIAL INFORMATION                                                                                                                                                                                |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| ITEM 1. FINANCIAL STATEMENTS                                                                                                                                                                                 |   |
| HARLEYSVILLE NATIONAL CORPORATION AND SUBSIDIARIES                                                                                                                                                           |   |
| CONSOLIDATED BALANCE SHEETS                                                                                                                                                                                  |   |
|                                                                                                                                                                                                         |   |
| (Dollars in thousands)                                                                                                                                                                                       |   | June 30, 2009 |   |   | December 31, 2008 |   |
|                                                                                                                                                                                                         |   | (Unaudited) |   |   |   |   |
| Assets                                                                                                                                                                                                       |   |   |   |   |   |   |
| Cash and due from banks                                                                                                                                                                                      |   | $ | 54,007 |   |   | $ | 75,305 |   |
| Interest-bearing deposits in banks                                                                                                                                                                           |   |   | 360,053 |   |   |   | 27,221 |   |
| Total cash and cash equivalents                                                                                                                                                                              |   |   | 414,060 |   |   |   | 102,526 |   |
| Residential mortgage loans held for sale (at fair value)                                                                                                                                                     |   |   | 84,778 |   |   |   | 17,165 |   |
| Investment securities available for sale (amortized cost, $1,084,411 and $1,186,586, respectively)                                                                                                           |   |   |  1,032,304 |   |   |   |  1,141,948 |   |
| Investment securities held to maturity (fair value $32,908 and $50,059, respectively)                                                                                                                        |   |   | 33,363 |   |   |   | 50,434 |   |
| Federal Home Loan Bank stock, Federal Reserve Bank stock and other investments                                                                                                                               |   |   | 44,456 |   |   |   | 39,279 |   |
| Loans and leases                                                                                                                                                                                             |   |   | 3,354,489 |   |   |   | 3,668,079 |   |
| Less: Allowance for loan losses                                                                                                                                                                              |   |   | (70,341 | ) |   |   | (49,955 | ) |
| Net loans                                                                                                                                                                                                    |   |   | 3,284,148 |   |   |   | 3,618,124 |   |
| Premises and equipment, net                                                                                                                                                                                  |   |   | 50,027 |   |   |   | 50,605 |   |
| Accrued interest receivable                                                                                                                                                                                  |   |   | 17,875 |   |   |   | 21,120 |   |
| Goodwill                                                                                                                                                                                                     |   |   | 27,031 |   |   |   | 240,701 |   |
| Intangible assets, net                                                                                                                                                                                       |   |   | 24,424 |   |   |   | 27,807 |   |
| Bank-owned life insurance                                                                                                                                                                                    |   |   | 88,631 |   |   |   | 87,081 |   |
| Other assets                                                                                                                                                                                                 |   |   | 109,230 |   |   |   | 93,719 |   |
| Total assets                                                                                                                                                                                                 |   | $ | 5,210,327 |   |   | $ | 5,490,509 |   |
| Liabilities and Shareholders' Equity                                                                                                                                                                         |   |   |   |   |   |   |   |   |
| Deposits:                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
| Noninterest-bearing                                                                                                                                                                                          |   | $ | 517,108 |   |   | $ | 479,469 |   |
| Interest-bearing:                                                                                                                                                                                            |   |   |   |   |   |   |   |   |
| Checking                                                                                                                                                                                                     |   |   | 597,831 |   |   |   | 556,855 |   |
| Money market                                                                                                                                                                                                 |   |   | 991,476 |   |   |   | 1,042,302 |   |
| Savings                                                                                                                                                                                                      |   |   | 317,196 |   |   |   | 270,885 |   |
| Time deposits                                                                                                                                                                                                |   |   | 1,574,544 |   |   |   | 1,588,921 |   |
| Total deposits                                                                                                                                                                                               |   |   | 3,998,155 |   |   |   | 3,938,432 |   |
| Federal funds purchased and short-term securities sold under agreements to repurchase                                                                                                                        |   |   |  82,169 |   |   |   |  136,113 |   |
| Other short-term borrowings                                                                                                                                                                                  |   |   | 2,014 |   |   |   | 984 |   |
| Long-term borrowings                                                                                                                                                                                         |   |   | 694,586 |   |   |   | 759,658 |   |
| Accrued interest payable                                                                                                                                                                                     |   |   | 37,653 |   |   |   | 34,495 |   |
| Subordinated debt                                                                                                                                                                                            |   |   | 93,784 |   |   |   | 93,743 |   |
| Other liabilities                                                                                                                                                                                            |   |   | 53,281 |   |   |   | 52,377 |   |
| Total liabilities                                                                                                                                                                                            |   |   | 4,961,642 |   |   |   | 5,015,802 |   |
| Shareholders' Equity:                                                                                                                                                                                        |   |   |   |   |   |   |   |   |
| Series preferred stock,  par value $1 per share;                                                                                                                                                   |   |   |   |   |   |   |   |   |
| Authorized 8,000,000 shares, none issued                                                                                                                                                                     |   |   | — |   |   |   | — |   |
|         Common stock, par value $1 per share; authorized 200,000,000 shares; issued 43,113,629 and 43,022,387 shares at June 30, 2009 and December 31, 2008, respectively |   |   |  43,114 |   |   |   |  43,022 |   |
| Additional paid in capital                                                                                                                                                                                   |   |   | 379,951 |   |   |   | 379,551 |   |
| (Accumulated deficit) retained earnings                                                                                                                                                                      |   |   | (140,305 | ) |   |   | 82,295 |   |
| Accumulated other comprehensive loss                                                                                                                                                                         |   |   | (33,869 | ) |   |   | (29,017 | ) |
|         Treasury stock, at cost: 22,718 and 76,635 shares at June 30, 2009 and December 31, 2008, respectively                                                            |   |   | (206 | ) |   |   | (1,144 | ) |
| Total shareholders' equity                                                                                                                                                                                   |   |   | 248,685 |   |   |   | 474,707 |   |
| Total liabilities and shareholders' equity                                                                                                                                                                   |   | $ | 5,210,327 |   |   | $ | 5,490,509 |   |

----

| HARLEYSVILLE NATIONAL CORPORATION AND SUBSIDIARIES                                           |   |
|----------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)                                             |   |
|                                                                                         |   |   |   |   |   |   |
|                                                                                         |   | Three Months Ended |   |   | Six Months Ended |   |
|                                                                                         |   | June 30, |   |   | June 30, |   |
| (Dollars in thousands, except per share information)                                         |   | 2009 |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
|  Interest Income:                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans and leases, including fees                                                             |   | $ | 46,033 |   |   | $ | 36,644 |   |   | $ | 94,189 |   |   | $ | 75,641 |   |
| Investment securities:                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                      |   |   | 10,453 |   |   |   | 9,622 |   |   |   | 22,239 |   |   |   | 19,376 |   |
| Exempt from federal taxes                                                                    |   |   | 3,320 |   |   |   | 2,968 |   |   |   | 6,889 |   |   |   | 5,939 |   |
| Federal funds sold and securities purchased under agreements to resell                       |   |   | - |   |   |   | 93 |   |   |   | - |   |   |   | 751 |   |
| Deposits in banks                                                                            |   |   | 239 |   |   |   | 26 |   |   |   | 366 |   |   |   | 62 |   |
| Total interest income                                                                        |   |   | 60,045 |   |   |   | 49,353 |   |   |   | 123,683 |   |   |   | 101,769 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Expense:                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings and money market deposits                                                            |   |   | 5,335 |   |   |   | 5,661 |   |   |   | 11,506 |   |   |   | 13,756 |   |
| Time deposits                                                                                |   |   | 13,936 |   |   |   | 12,937 |   |   |   | 28,629 |   |   |   | 27,438 |   |
| Short-term borrowings                                                                        |   |   | 125 |   |   |   | 638 |   |   |   | 253 |   |   |   | 1,296 |   |
| Long-term borrowings                                                                         |   |   | 7,196 |   |   |   | 4,928 |   |   |   | 14,538 |   |   |   | 9,883 |   |
| Total interest expense                                                                       |   |   | 26,592 |   |   |   | 24,164 |   |   |   | 54,926 |   |   |   | 52,373 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                                                          |   |   | 33,453 |   |   |   | 25,189 |   |   |   | 68,757 |   |   |   | 49,396 |   |
| Provision for loan losses                                                                    |   |   | 32,000 |   |   |   | 3,107 |   |   |   | 39,121 |   |   |   | 5,067 |   |
| Net interest income after provision for loan losses                                          |   |   | 1,453 |   |   |   | 22,082 |   |   |   | 29,636 |   |   |   | 44,329 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest Income:                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service charges                                                                              |   |   | 4,304 |   |   |   | 3,312 |   |   |   | 8,498 |   |   |   | 6,425 |   |
| Gain on sales of investment securities, net                                                  |   |   | 4,945 |   |   |   | 97 |   |   |   | 6,897 |   |   |   | 225 |   |
| Other-than-temporary impairment losses (“OTTI”) on available for sale securities |   |   | (2,709 | ) |   |   | - |   |   |   | (9,305 | ) |   |   | - |   |
| Portion of OTTI losses recognized in other comprehensive loss (before taxes)                 |   |   | 2,179 |   |   |   | - |   |   |   | 7,431 |   |   |   | - |   |
| Net OTTI losses recognized in operations on available for sale securities                    |   |   | (530 | ) |   |   | - |   |   |   | (1,874 | ) |   |   | - |   |
| Gain on mortgage banking sales, net                                                          |   |   | 2,703 |   |   |   | 219 |   |   |   | 4,401 |   |   |   | 426 |   |
| Wealth management                                                                            |   |   | 4,975 |   |   |   | 4,615 |   |   |   | 9,297 |   |   |   | 8,894 |   |
| Bank-owned life insurance                                                                    |   |   | 770 |   |   |   | 657 |   |   |   | 1,548 |   |   |   | 1,341 |   |
| Other income                                                                                 |   |   | 4,544 |   |   |   | 2,696 |   |   |   | 9,103 |   |   |   | 5,117 |   |
| Total noninterest income                                                                     |   |   | 21,711 |   |   |   | 11,596 |   |   |   | 37,870 |   |   |   | 22,428 |   |
| Net interest income after provision for loan losses and noninterest income                   |   |   | 23,164 |   |   |   | 33,678 |   |   |   | 67,506 |   |   |   | 66,757 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest Expense:                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries, wages and employee benefits                                                        |   |   | 17,991 |   |   |   | 14,201 |   |   |   | 38,270 |   |   |   | 28,060 |   |
| Occupancy                                                                                    |   |   | 3,709 |   |   |   | 2,441 |   |   |   | 7,915 |   |   |   | 5,026 |   |
| Furniture and equipment                                                                      |   |   | 1,483 |   |   |   | 1,083 |   |   |   | 3,091 |   |   |   | 2,177 |   |
| Intangibles expense                                                                          |   |   | 696 |   |   |   | 631 |   |   |   | 1,644 |   |   |   | 1,319 |   |
| FDIC deposit insurance                                                                       |   |   | 5,056 |   |   |   | 204 |   |   |   | 7,843 |   |   |   | 367 |   |
| Goodwill impairment                                                                          |   |   | 214,536 |   |   |   | - |   |   |   | 214,536 |   |   |   | - |   |
| Other expense                                                                                |   |   | 9,279 |   |   |   | 5,898 |   |   |   | 18,072 |   |   |   | 11,227 |   |
| Total noninterest expense                                                                    |   |   | 252,750 |   |   |   | 24,458 |   |   |   | 291,371 |   |   |   | 48,176 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss) income before income taxes                                                            |   |   | (229,586 | ) |   |   | 9,220 |   |   |   | (223,865 | ) |   |   | 18,581 |   |
| Income tax (benefit) expense                                                                 |   |   | (7,083 | ) |   |   | 1,893 |   |   |   | (5,957 | ) |   |   | 3,950 |   |
| Net (loss) income                                                                            |   | $ | (222,503 | ) |   | $ | 7,327 |   |   | $ | (217,908 | ) |   | $ | 14,631 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net (loss) income per share information:                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                        |   | $ | ( 5.17 | ) |   | $ | 0.24 |   |   | $ | (5.06 | ) |   | $ | 0.47 |   |
| Diluted                                                                                      |   | $ | ( 5.17 | ) |   | $ | 0.23 |   |   | $ | (5.06 | ) |   | $ | 0.46 |   |
| Cash dividends per share                                                                     |   | $ | 0.01 |   |   | $ | 0.20 |   |   | $ | 0.11 |   |   | $ | 0.40 |   |
| Weighted average number of common shares:                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                        |   |   | 43,080,849 |   |   |   | 31,359,011 |   |   |   | 43,035,945 |   |   |   | 31,352,922 |   |
| Diluted                                                                                      |   |   | 43,080,849 |   |   |   | 31,521,608 |   |   |   | 43,035,945 |   |   |   | 31,522,029 |   |

----

| Six Months Ended June 30, 2009                                                   |   |
|----------------------------------------------------------------------------------|--------|
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   | Common Stock |   |   | Treasury Stock |   |   |   |   |   |  Additional |   |   | (Accumulated Deficit) |   |   | AccumulatedOther |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   | Number of |   |   | Number of |   |   | Par |   |   | Paid |   |   | Retained |   |   | Comprehensive |   |   | Treasury |   |   |   |   |   | Comprehensive |   |
|                                                                             |   | Shares |   |   | Shares |   |   | Value |   |   | In Capital |   |   | Earnings |   |   | Loss |   |   | Stock |   |   | Total |   |   | Loss |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, January 1, 2009                                                         |   |   | 43,022 |   |   |   | (76 | ) |   | $ | 43,022 |   |   | $ | 379,551 |   |   | $ | 82,295 |   |   | $ | (29,017 | ) |   | $ | (1,144 | ) |   | $ | 474,707 |   |   |   |   |
| Issuance of stock for stock options, net of excess tax benefits                  |   |   |  27 |   |   |   |  36 |   |   |   |  27 |   |   |   |  35 |   |   |   |  - |   |   |   |  - |   |   |   |  545 |   |   |   |  607 |   |   |   |   |
| Issuance of stock under dividend reinvestment and stock purchase plan            |   |   |  65 |   |   |   |  40 |   |   |   |  65 |   |   |   |  4 |   |   |   |  - |   |   |   |  - |   |   |   |  599 |   |   |   |  668 |   |   |   |   |
| Conversion of Willow Financial Recognition and Retention Plan shares to treasury |   |   |  - |   |   |   | (23 | ) |   |   |  - |   |   |   |  206 |   |   |   |  - |   |   |   |  - |   |   |   | (206 | ) |   |   |  - |   |   |   |   |
| Stock based compensation expense                                                 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 155 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 155 |   |   |   |   |
| Net (loss) income                                                                |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (217,908 | ) |   |   | - |   |   |   | - |   |   |   | (217,908 | ) |   | $ | (217,908 | ) |
| Other comprehensive loss, net of reclassifications and tax                       |   |   |  - |   |   |   |  - |   |   |   |  - |   |   |   |  - |   |   |   |  - |   |   |   | (4,852 | ) |   |   |  - |   |   |   | (4,852 | ) |   |   | (4,852 | ) |
| Cash dividends                                                                   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (4,692 | ) |   |   | - |   |   |   | - |   |   |   | (4,692 | ) |   |   |   |   |
| Comprehensive loss                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | (222,760 | ) |
| Balance, June 30, 2009                                                           |   |   | 43,114 |   |   |   | (23 | ) |   | $ | 43,114 |   |   | $ | 379,951 |   |   | $ | (140,305 | ) |   | $ | (33,869 | ) |   | $ | (206 | ) |   | $ | 248,685 |   |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| Six Months Ended June 30, 2008                                  |   |
|-----------------------------------------------------------------|--------|
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                            |   | Common Stock |   |   | Treasury Stock |   |   |   |   |   | Additional |   |   |   |   |   | AccumulatedOther |   |   |   |   |   |   |   |   |   |   |
|                                                            |   | Number of |   |   | Number of |   |   | Par |   |   | Paid |   |   | Retained |   |   | Comprehensive |   |   | Treasury |   |   |   |   |   | Comprehensive |   |
|                                                            |   | Shares |   |   | Shares |   |   | Value |   |   | In Capital |   |   | Earnings |   |   | Loss |   |   | Stock |   |   | Total |   |   | Income (Loss) |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, January 1, 2008                                        |   |   | 31,507 |   |   |   | (174 | ) |   | $ | 31,507 |   |   | $ | 231,130 |   |   | $ | 82,311 |   |   | $ | (2,566 | ) |   | $ | (3,072 | ) |   | $ | 339,310 |   |   |   |   |
| Issuance of stock for stock options, net of excess tax benefits |   |   |  - |   |   |   |  40 |   |   |   |  - |   |   |   | (257 | ) |   |   |  - |   |   |   |  - |   |   |   |  716 |   |   |   |  459 |   |   |   |   |
| Issuance of stock awards                                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2 |   |   |   | 2 |   |   |   |   |
| Stock based compensation expense                                |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 85 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 85 |   |   |   |   |
| Net income                                                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 14,631 |   |   |   | - |   |   |   | - |   |   |   | 14,631 |   |   | $ | 14,631 |   |
| Other comprehensive loss, net of reclassifications and tax      |   |   |  - |   |   |   |  - |   |   |   |  - |   |   |   |  - |   |   |   |  - |   |   |   | (14,035 | ) |   |   |  - |   |   |   | (14,035 | ) |   |   | (14,035 | ) |
| Cash dividends                                                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (12,542 | ) |   |   | - |   |   |   | - |   |   |   | (12,542 | ) |   |   |   |   |
| Comprehensive income                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 596 |   |
| Balance, June 30, 2008                                          |   |   | 31,507 |   |   |   | (134 | ) |   | $ | 31,507 |   |   | $ | 230,958 |   |   | $ | 84,400 |   |   | $ | (16,601 | ) |   | $ | (2,354 | ) |   | $ | 327,910 |   |   |   |   |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See accompanying notes to consolidated financial statements.    |   |

----

| HARLEYSVILLE NATIONAL CORPORATION AND SUBSIDIARIES                                                           |   |
|--------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                        |   |
| (Unaudited)                                                                                                  |   |
|                                                                                                         |   | Six Months Ended |   |
| (Dollars in thousands)                                                                                       |   | June 30, |   |
|                                                                                                         |   | 2009 |   |   | 2008 |   |
| Operating Activities:                                                                                        |   |   |   |   |   |   |
| Net (loss) income                                                                                            |   | $ | (217,908 | ) |   | $ | 14,631 |   |
| Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:           |   |   |   |   |   |   |   |   |
| Provision for loan losses                                                                                    |   |   | 39,121 |   |   |   | 5,067 |   |
| Depreciation                                                                                                 |   |   | 3,278 |   |   |   | 2,051 |   |
| Goodwill impairment                                                                                          |   |   | 214,536 |   |   |   | ― |   |
| Intangibles expense                                                                                          |   |   | 1,644 |   |   |   | 1,319 |   |
| Net amortization of discounts/premiums on investments and borrowings                                         |   |   | (2,442 | ) |   |   | 569 |   |
| Deferred income tax benefit                                                                                  |   |   | (1,952 | ) |   |   | (1,828 | ) |
| Gain on sales of investment securities, net                                                                  |   |   | (6,897 | ) |   |   | (225 | ) |
| Other-than-temporary impairment on investments                                                               |   |   | 1,874 |   |   |   | ― |   |
| Gain on mortgage banking sales, net                                                                          |   |   | (4,401 | ) |   |   | (426 | ) |
| Originations of loans held for sale                                                                          |   |   | (362,195 | ) |   |   | (38,077 | ) |
| Proceeds from sale of loans originated for sale                                                              |   |   | 298,814 |   |   |   | 38,248 |   |
| Bank-owned life insurance income                                                                             |   |   | (1,548 | ) |   |   | (1,341 | ) |
| Stock based compensation expense                                                                             |   |   | 155 |   |   |   | 85 |   |
| Net decrease in accrued interest receivable                                                                  |   |   | 3,245 |   |   |   | 836 |   |
| Net increase in accrued interest payable                                                                     |   |   | 3,158 |   |   |   | 4,040 |   |
| Net increase in other assets                                                                                 |   |   | (10,227 | ) |   |   | (4,410 | ) |
| Net increase in other liabilities                                                                            |   |   | 2,451 |   |   |   | 3,145 |   |
| Other, net                                                                                                   |   |   | (208 | ) |   |   | 49 |   |
| Net cash (used in) provided by operating activities                                                          |   |   | (39,502 | ) |   |   | 23,733 |   |
| Investing Activities:                                                                                        |   |   |   |   |   |   |   |   |
| Proceeds from sales of investment securities available for sale                                              |   |   | 319,655 |   |   |   | 115,331 |   |
| Proceeds from maturity or calls of investment securities held to maturity                                    |   |   | 17,231 |   |   |   | 3,095 |   |
| Proceeds from maturity or calls of investment securities available for sale                                  |   |   | 129,821 |   |   |   | 106,302 |   |
| Proceeds, redemption Federal Home Bank stock and reduction in other investments                              |   |   | 37 |   |   |   | 673 |   |
| Purchases of investment securities available for sale                                                        |   |   | (342,467 | ) |   |   | (274,461 | ) |
| Purchases of Federal Home Bank stock, Federal Reserve Bank stock and other investments                       |   |   | (5,214 | ) |   |   | (4,228 | ) |
| Proceeds from sale of indirect and residential loans                                                         |   |   | 117,158 |   |   |   | ― |   |
| Other net decrease (increase) in loans                                                                       |   |   | 176,981 |   |   |   | (43,638 | ) |
| Net cash paid due to acquisitions, net of cash acquired                                                      |   |   | (877 | ) |   |   | (1,200 | ) |
| Purchases of premises and equipment                                                                          |   |   | (3,350 | ) |   |   | (4,389 | ) |
| Proceeds from sales of premises and equipment                                                                |   |   | 15 |   |   |   | 668 |   |
| Proceeds from sales of other real estate                                                                     |   |   | 1,216 |   |   |   | 347 |   |
| Net cash provided by (used in) investing activities                                                          |   |   | 410,206 |   |   |   | (101,500 | ) |
| Financing Activities:                                                                                        |   |   |   |   |   |   |   |   |
| Net increase (decrease) in deposits                                                                          |   |   | 59,723 |   |   |   | (119,910 | ) |
| (Decrease) increase in federal funds purchased and short-term securities sold under agreements to repurchase |   |   | (53,944 | ) |   |   | 78,199 |   |
| Increase (decrease) in other short-term borrowings                                                           |   |   | 1,030 |   |   |   | (868 | ) |
| Advances of long-term borrowings                                                                             |   |   | ― |   |   |   | 50,000 |   |
| Repayments of long-term borrowings                                                                           |   |   | (62,562 | ) |   |   | (23,000 | ) |
| Cash dividends                                                                                               |   |   | (4,692 | ) |   |   | (12,542 | ) |
|   Proceeds from the exercise of stock options                                                      |   |   | 607 |   |   |   | 404 |   |
|   Proceeds from issuance of stock under dividend reinvestment and stock purchase plan              |   |   | 668 |   |   |   | ― |   |
|   Excess tax benefits from stock based compensation                                                |   |   | ― |   |   |   | 50 |   |
|     Net cash (used in) provided by financing activities                                  |   |   | (59,170 | ) |   |   | (27,667 | ) |
| Net (decrease) increase in cash and cash equivalents                                                         |   |   | 311,534 |   |   |   | (105,434 | ) |
| Cash and cash equivalents at beginning of period                                                             |   |   | 102,526 |   |   |   | 209,403 |   |
| Cash and cash equivalents at end of the period                                                               |   | $ | 414,060 |   |   | $ | 103,969 |   |
| Cash paid during the period for:                                                                             |   |   |   |   |   |   |   |   |
| Interest                                                                                                     |   | $ | 54,807 |   |   | $ | 48,706 |   |
| Income taxes                                                                                                 |   | $ | 2,058 |   |   | $ | 12,840 |   |
| Supplemental disclosure of noncash investing and financing activities:                                       |   |   |   |   |   |   |   |   |
| Transfer of assets from loans to net assets in foreclosure                                                   |   | $ | 1,516 |   |   | $ | 1,508 |   |
| See accompanying notes to consolidated financial statements.                                                 |   |

----

----

----

|                                                    |   | Three months ended |   |   | Six months ended |   |
|---------------------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|  (Dollars in thousands, except for per share data) |   | June 30, 2008      |   |
|                                                    |   |               |   |   |             |   |
| Total interest income                                   |   | $                  | 70,481 |   |             | $      | 146,035 |   |
| Total interest expense                                  |   |               | 31,636 |   |             |   | 69,179 |   |
| Net interest income                                     |   |               | 38,845 |   |             |   | 76,856 |   |
|                                                    |   |               |   |   |             |   |   |   |
| Provision for loan losses                               |   |               | 4,795  |   |             |   | 7,579 |   |
| Net interest income after provision for loan losses     |   |               | 34,050 |   |             |   | 69,277 |   |
|                                                    |   |               |   |   |             |   |   |   |
| Total non-interest income                               |   |               | 13,403 |   |             |   | 28,736 |   |
| Total non-interest expense                              |   |               | 40,005 |   |             |   | 80,122 |   |
|                                                    |   |               |   |   |             |   |   |   |
| Income before income taxes                              |   |               | 7,448  |   |             |   | 17,891 |   |
|                                                    |   |               |   |   |             |   |   |   |
| Income tax expense (1)                                  |   |               | 1,628  |   |             |   | 4,591 |   |
|                                                    |   |               |   |   |             |   |   |   |
| Net income                                              |   | $                  | 5,820  |   |             | $      | 13,300 |   |
|                                                    |   |               |   |   |             |   |   |   |
| Basic earnings per share                                |   | $                  | 0.14   |   |             | $      | 0.31 |   |
| Diluted earnings per share                              |   | $                  | 0.14   |   |             | $      | 0.31 |   |

| (1)   | Tax effects are reflected at an assumed rate of 35% |
|-----------------|-----------------------------------------------------|

|                                                 |   | (Dollars in thousands) |   |
|------------------------------------------------------|--------|------------------------|--------|
| Contractually required payments at June 30, 2009:    |   |                   |   |
| Real estate                                          |   | $                      | 6,958  |   |
| Commercial and industrial                            |   |                   | 6,151  |   |
| Total                                                |   | $                      | 13,109 |   |
| Cash flows expected to be collected at June 30, 2009 |   | $                      | 7,003  |   |

|                      |   | (Dollars in thousands) |   |
|---------------------------|--------|------------------------|--------|
| Real estate               |   | $                      | 4,016  |   |
| Commercial and industrial |   |                   | 2,987  |   |
| Total carrying value      |   | $                      | 7,003  |   |

----

|                                                     |   | June 30, 2009          |      |
|----------------------------------------------------------|--------|----------------------------------|-----------|
|                                                     |   | AmortizedCost                    |      |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | Estimated Fair Value |   |
|                                                     |   | (Dollars in thousands) |      |
| Available for sale                                       |   |                             |      |   |   |   |   |   |   |   |   |   |
| Obligations of U.S. government agencies and corporations |   | $                                | 500       |   |   | $ | — |   |   | $ | — |   |   | $ | 500 |   |
| Obligations of states and political subdivisions         |   |                             | 283,117   |   |   |   | 5,635 |   |   |   | (4,094 | ) |   |   | 284,658 |   |
| Residential mortgage-backed securities                   |   |                             | 720,077   |   |   |   | 8,469 |   |   |   | (22,081 | ) |   |   | 706,465 |   |
| Trust preferred pools/collateralized debt obligations    |   |                             | 49,055    |   |   |   | 354 |   |   |   | (38,049 | ) |   |   | 11,360 |   |
| Corporate bonds                                          |   |                             | 8,858     |   |   |   | 18 |   |   |   | (617 | ) |   |   | 8,259 |   |
| Equity securities                                        |   |                             | 22,804    |   |   |   | 103 |   |   |   | (1,845 | ) |   |   | 21,062 |   |
| Total investment securities available for sale           |   | $                                | 1,084,411 |   |   | $ | 14,579 |   |   | $ | (66,686 | ) |   | $ | 1,032,304 |   |
| Held to maturity                                         |   |                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of states and political subdivisions         |   | $                                | 33,363    |   |   | $ | 74 |   |   | $ | (529 | ) |   | $ | 32,908 |   |
| Total investment securities held to maturity             |   | $                                | 33,363    |   |   | $ | 74 |   |   | $ | (529 | ) |   | $ | 32,908 |   |

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

----

|                                                  |   | June 30, 2009          |
|-------------------------------------------------------|--------|------------------------|
|                                                  |   | Less than 12 months    |   |   | 12 months of longer |   |   | Total |   |
| Description of                                        |   | # of                   |   |   | Fair |   |   | Unrealized |   |   | # of |   |   | Fair |   |   | Unrealized |   |   | # of |   |   | Fair |   |   | Unrealized |   |
| Securities                                            |   | Securities             |   |   | Value |   |   | Losses |   |   | Securities |   |   | Value |   |   | Losses |   |   | Securities |   |   | Value |   |   | Losses |   |
|                                                  |   | (Dollars in thousands) |
| Obligations of states and political subdivisions      |   |                   | 186 |   |   | $ | 138,150 |   |   | $ | (3,758 | ) |   |   | 25 |   |   | $ | 15,525 |   |   | $ | (865 | ) |   |   | 211 |   |   | $ | 153,675 |   |   | $ | (4,623 | ) |
| Residential mortgage-backed securities                |   |                   | 34 |   |   |   | 234,922 |   |   |   | (4,343 | ) |   |   | 49 |   |   |   | 96,421 |   |   |   | (17,738 | ) |   |   | 83 |   |   |   | 331,343 |   |   |   | (22,081 | ) |
| Trust preferred pools/collateralized debt obligations |   |                   | 5 |   |   |   | 596 |   |   |   | (3,753 | ) |   |   | 12 |   |   |   | 9,189 |   |   |   | (34,296 | ) |   |   | 17 |   |   |   | 9,785 |   |   |   | (38,049 | ) |
| Corporate bonds                                       |   |                   | 1 |   |   |   | 16 |   |   |   | (41 | ) |   |   | 2 |   |   |   | 6,724 |   |   |   | (576 | ) |   |   | 3 |   |   |   | 6,740 |   |   |   | (617 | ) |
| Equity securities                                     |   |                   | 10 |   |   |   | 19,283 |   |   |   | (1,176 | ) |   |   | 4 |   |   |   | 1,248 |   |   |   | (669 | ) |   |   | 14 |   |   |   | 20,531 |   |   |   | (1,845 | ) |
| Totals                                                |   |                   | 236 |   |   | $ | 392,967 |   |   | $ | (13,071 | ) |   |   | 92 |   |   | $ | 129,107 |   |   | $ | (54,144 | ) |   |   | 328 |   |   | $ | 522,074 |   |   | $ | (67,215 | ) |

|                                                     |   | December 31, 2008 |
|----------------------------------------------------------|--------|-----------------------------|
|                                                     |   | Less than 12 months         |   |   | 12 months of longer |   |   | Total |   |
| Description of                                           |   | # of                        |   |   | Fair |   |   | Unrealized |   |   | # of |   |   | Fair |   |   | Unrealized |   |   | # of |   |   | Fair |   |   | Unrealized |   |
| Securities                                               |   | Securities                  |   |   | Value |   |   | Losses |   |   | Securities |   |   | Value |   |   | Losses |   |   | Securities |   |   | Value |   |   | Losses |   |
|                                                     |   | (Dollars in thousands)      |
| Obligations of U.S. government agencies and corporations |   |                        | 3 |   |   | $ | 29,145 |   |   | $ | (26 | ) |   |   | — |   |   | $ | — |   |   | $ | — |   |   |   | 3 |   |   | $ | 29,145 |   |   | $ | (26 | ) |
| Obligations of states and political subdivisions         |   |                        | 290 |   |   |   | 202,231 |   |   |   | (6,715 | ) |   |   | 11 |   |   |   | 5,416 |   |   |   | (239 | ) |   |   | 301 |   |   |   | 207,647 |   |   |   | (6,954 | ) |
| Residential mortgage-backed securities                   |   |                        | 35 |   |   |   | 121,085 |   |   |   | (16,303 | ) |   |   | 36 |   |   |   | 48,851 |   |   |   | (2,988 | ) |   |   | 71 |   |   |   | 164,936 |   |   |   | (19,291 | ) |
| Trust preferred pools/collateralized debt obligations    |   |                        | 4 |   |   |   | 711 |   |   |   | (4,349 | ) |   |   | 11 |   |   |   | 9,999 |   |   |   | (30,732 | ) |   |   | 15 |   |   |   | 10,710 |   |   |   | (35,081 | ) |
| Corporate bonds                                          |   |                        | 4 |   |   |   | 9,417 |   |   |   | (1,127 | ) |   |   | 3 |   |   |   | 4,652 |   |   |   | (1,801 | ) |   |   | 7 |   |   |   | 14,069 |   |   |   | (2,928 | ) |
| Equity securities                                        |   |                        | 9 |   |   |   | 18,134 |   |   |   | (528 | ) |   |   | 6 |   |   |   | 2,956 |   |   |   | (1,129 | ) |   |   | 15 |   |   |   | 21,090 |   |   |   | (1,657 | ) |
| Totals                                                   |   |                        | 345 |   |   | $ | 380,723 |   |   | $ | (29,048 | ) |   |   | 67 |   |   | $ | 66,874 |   |   | $ | (36,889 | ) |   |   | 412 |   |   | $ | 447,597 |   |   | $ | (65,937 | ) |

----

| (Dollars in thousands)                                 |   | Debt Securities |    |
|--------------------------------------------------------|--------|-----------------|---------|
|                                                   |   |            |    |
| Estimated credit losses as of January 1, 2009          |   | $               | — |   |
| Additions for credit losses not previously recognized  |   |            | 1,673   |   |
| Estimated credit losses as of  June 30, 2009 |   | $               | 1,673   |   |
|                                                   |   |            |    |   |

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

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

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

| ·   | The payment structure of the debt security |
|--------------------|--------------------------------------------|

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

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

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

----

| (Dollars in thousands)          |   |       |   |   |       |   |   |                   |   |
|---------------------------------|--------|------------|--------|--------|------------|--------|--------|------------------------|--------|
|   As of June 30, 2009 |   | Book Value |   |   | Fair Value |   |   | Unrealized (Loss) Gain |   |   | Deferral/Default as % of Collateral |   |
|                            |   |       |   |   |       |   |   |                   |   |   |   |   |
| Single Issuer:                  |   |       |   |   |       |   |   |                   |   |   |   |   |
| AAA Rated                       |   | $          | 6,044  |   |       | $      | 3,740  |                   |   | $ | (2,304 | ) |   |   | n/a |   |
| A Rated                         |   |       | 4,331  |   |       |   | 2,857  |                   |   |   | (1,474 | ) |   |   | n/a |   |
| Not Rated                       |   |       | 419    |   |       |   | 522    |                   |   |   | 103 |   |   |   | n/a |   |
| Total Single Issuers            |   | $          | 10,794 |   |       | $      | 7,119  |                   |   | $ | (3,675 | ) |   |   |   |   |
|                            |   |       |   |   |       |   |   |                   |   |   |   |   |   |   |   |   |
| Pooled:                         |   |       |   |   |       |   |   |                   |   |   |   |   |   |   |   |   |
| A Rated                         |   | $          | 418    |   |       | $      | 493    |                   |   | $ | 75 |   |   |   | 2.6 | % |
| B Rated                         |   |       | 10,185 |   |       |   | 1,697  |                   |   |   | (8,488 | ) |   |   | 12.0 | % |
| Noninvestment grade             |   |       | 27,658 |   |       |   | 2,051  |                   |   |   | (25,607 | ) |   |   | 14.5 | % |
| Total Pooled                    |   | $          | 38,261 |   |       | $      | 4,241  |                   |   | $ | (34,020 | ) |   |   |   |   |
|                            |   |       |   |   |       |   |   |                   |   |   |   |   |   |   |   |   |
| Total Preferred Securities      |   | $          | 49,055 |   |       | $      | 11,360 |                   |   | $ | (37,695 | ) |   |   |   |   |

----

|                                                     |   | June 30, 2009          |
|----------------------------------------------------------|--------|----------------------------------|
|                                                     |   | Held to Maturity       |   | Available for Sale |
|                                                     |   | AmortizedCost                    |   | EstimatedFairValue |   | AmortizedCost |   | EstimatedFairValue |
|                                                     |   | (Dollars in thousands) |
| Due in one year or less:                                 |   |                             |   |   |   |   |   |   |   |
| Obligations of states and political subdivisions         |   | $                                | — |   | $      — |   | $      1,250 |   | $      1,251 |
| Corporate bonds                                          |   |                             |       — |   |       — |   | 1,001 |   | 1,009 |
| Total due on one year or less                            |   |                             |       — |   |       — |   | 2,251 |   | 2,260 |
|                                                     |   |                             |   |   |   |   |   |   |   |
| Due after one year through five years:                   |   |                             |   |   |   |   |   |   |   |
| Obligations of U.S. government agencies and corporations |   |                             |       — |   |       — |   | 500 |   | 500 |
| Obligations of states and political subdivisions         |   |                             |       — |   |       — |   | 1,294 |   | 1,363 |
| Corporate bonds                                          |   |                             |       — |   |       — |   | 5,062 |   | 4,918 |
| Total due after one year through five years              |   |                             |       — |   |       — |   | 6,856 |   | 6,781 |
|                                                     |   |                             |   |   |   |   |   |   |   |
| Due after five years through ten years:                  |   |                             |   |   |   |   |   |   |   |
| Obligations of states and political subdivisions         |   |                             | 9,836 |   | 9,771 |   | 86,361 |   | 86,418 |
| Corporate bonds                                          |   |                             |       — |   |       — |   | 2,738 |   | 2,316 |
| Total due after five years through ten years             |   |                             | 9,836 |   | 9,771 |   | 89,099 |   | 88,734 |
|                                                     |   |                             |   |   |   |   |   |   |   |
| Due after ten years:                                     |   |                             |   |   |   |   |   |   |   |
| Obligations of states and political subdivisions         |   |                             | 23,527 |   | 23,137 |   | 194,212 |   | 195,626 |
| Trust preferred pools/collateralized debt obligations    |   |                             |       — |   |       — |   | 49,055 |   | 11,360 |
| Corporate bonds                                          |   |                             |       — |   |       — |   | 57 |   | 16 |
| Total due after ten years                                |   |                             | 23,527 |   | 23,137 |   | 243,324 |   | 207,002 |
|                                                     |   |                             |   |   |   |   |   |   |   |
| Residential mortgage-backed securities                   |   |                             |       — |   |       — |   | 720,077 |   | 706,465 |
| Equity securities                                        |   |                             |       — |   |       — |   | 22,804 |   | 21,062 |
| Totals                                                   |   | $                                | 33,363 |   | $32,908 |   | $1,084,411 |   | $1,032,304 |

|                                                |   | Six Months Ended June 30,   |   |   |
|-----------------------------------------------------|--------|----------------------------------|--------|--------|
|                                                |   | 2009                             |   |   |  2008 |   |
|                                                |   | (Dollars in thousands) |   |   |
|  Gross realized gains                          |   | $                                | 8,120  |   |   | $ | 509 |   |   |
| Gross realized losses                               |   |                             | (1,223 | )      |   |   | (284 |  ) |   |
| Net realized gain on sales of investment securities |   | $                                | 6,897  |   |   | $ | 225 |   |   |

----

|                                             |   | Community Banking      |     |  Wealth Management |   |    | Total         |   |   |
|--------------------------------------------------|--------|------------------------|----------|-------------------------|--------|---------|---------------|--------|--------|
|                                             |   | (Dollars in thousands) |     |
| Balance, January 1, 2009                         |   | $                      | 222,381  |                    |   | $       | 18,320        |   |   | $ | 240,701 |   |   |
| Purchase accounting adjustments for acquisitions |   |                   | 866      |                    |   |    |  — |   |   |   | 866 |   |   |
| Goodwill impairment                              |   |                   | (214,536 |  )                 |   |    | —       |   |   |   | (214,536 |  ) |   |
| Balance, June 30, 2009                           |   | $                      | 8,711    |                    |   |  $ | 18,320   |   |   | $ | 27,031 |   |   |

|                           |   | June 30,               |   | December 31, |
|--------------------------------|--------|------------------------|--------|--------------|
|                           |   | 2009                   |   | 2008         |
|                           |   | Gross Carrying Amount  |   |         |  Accumulated Amortization |   | Gross Carrying Amount |   | Accumulated Amortization |
|                           |   | (Dollars in thousands) |
| Core deposit intangibles       |   | $                      | 21,083 |         |   | $ | 4,458 |   | $ | 23,256 |   | $ | 2,692 |   |
| Other identifiable intangibles |   |                   | 7,209  |         |   |   | 2,049 |   |   | 7,209 |   |   | 1,524 |   |
| Total                          |   | $                      | 28,292 |         |   | $ | 6,507 |   | $ | 30,465 |   | $ | 4,216 |   |

----

|   | Note 5 – Trust Preferred Subordinated Debentures |
|--------|--------------------------------------------------------|

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

----

----

| Options                        |   |   Shares |      |   | Weighted-Average Exercise Price |   |    | Weighted-Average Remaining Contractual Term (in years) |   |   | Aggregate Intrinsic Value(in thousands) |   |
|--------------------------------|--------|--------------------|-----------|--------|---------------------------------|--------|---------|-------------------------------------------------------------|--------|--------|----------------------------------------------|--------|
| Outstanding at January 1, 2009 |   |               | 1,648,723 |   |                            | $      | 15.28   |                                                        |   |   |                                         |   |   |   |
| Granted                        |   |               | —   |   |                            |   | — |                                                        |   |   |                                         |   |   |   |
| Exercised                      |   |               | (63,495   | )      |                            |   | 9.10    |                                                        |   |   |                                         |   |   |   |
| Forfeited (unvested)           |   |               | (2,354    | )      |                            |   | 19.61   |                                                        |   |   |                                         |   |   |   |
| Cancelled (vested)             |   |               | (103,956  | )      |                            |   | 16.42   |                                                        |   |   |                                         |   |   |   |
|                           |   |               |      |   |                            |   |    |                                                        |   |   |                                         |   |   |   |
| Outstanding at June 30, 2009   |   |               | 1,478,918 |   |                            | $      | 15.46   |                                                        |   |   | 3.77                                         |   |   | $ | — |   |
|                           |   |               |      |   |                            |   |    |                                                        |   |   |                                         |   |   |   |   |   |
| Exercisable at June 30, 2009   |   |               | 1,218,490 |   |                            | $      | 15.60   |                                                        |   |   | 3.17                                         |   |   | $ | — |   |
|                           |   |               |      |   |                            |   |    |                                                        |   |   |                                         |   |   |   |   |   |

----

|  Nonvested Shares       |   | Shares |    |   | Weighted-AverageGrant-Date Fair Value |   |
|------------------------------|--------|--------|---------|--------|---------------------------------------|--------|
|                         |   |   |    |   |                                  |   |
| Nonvested at January 1, 2009 |   |   | 263,664 |   |                                  | $      | 3.74 |   |
|                         |   |   |    |   |                                  |   |   |   |
| Granted                      |   |   | — |   |                                  |   | — |   |
|                         |   |   |    |   |                                  |   |   |   |
| Vested                       |   |   | (882    | )      |                                  |   | 5.42 |   |
|                         |   |   |    |   |                                  |   |   |   |
| Forfeited                    |   |   | (2,354  | )      |                                  |   | 5.25 |   |
|                         |   |   |    |   |                                  |   |   |   |
| Nonvested at June 30, 2009   |   |   | 260,428 |   |                                  | $      | 3.72 |   |

|                                                                       |   | Three Months Ended |       |   | Six Months Ended |   |
|----------------------------------------------------------------------------|--------|--------------------|------------|--------|------------------|--------|
|                                                                       |   | June 30,           |       |   | June 30,         |   |
| (Dollars in thousands, except per share data)                              |   | 2009               |       |   | 2008             |   |   | 2009 |   |   | 2008 |   |
|                                                                       |   |               |       |   |             |   |   |   |   |   |   |   |
| Basic (loss) earnings per share                                            |   |               |       |   |             |   |   |   |   |   |   |   |
| Net (loss) income available to common shareholders                         |   | $                  | (222,503   | )      |             | $      | 7,327 |   |   | $ | (217,908 | ) |   | $ | 14,631 |   |
| Weighted average common shares outstanding                                 |   |               | 43,080,849 |   |             |   | 31,359,011 |   |   |   | 43,035,945 |   |   |   | 31,352,922 |   |
| Basic (loss) earnings per share                                            |   | $                  | (5.17      | )      |             | $      | 0.24 |   |   | $ | (5.06 | ) |   | $ | 0.47 |   |
|                                                                       |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Diluted (loss) earnings per share                                          |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net (loss) income available to common shareholders and assumed conversions |   | $                  | (222,503   | )      |             | $      | 7,327 |   |   | $ | (217,908 | ) |   | $ | 14,631 |   |
| Weighted average common shares outstanding                                 |   |               | 43,080,849 |   |             |   | 31,359,011 |   |   |   | 43,035,945 |   |   |   | 31,352,922 |   |
| Dilutive potential common shares (1), (2)                                  |   |               | —    |   |             |   | 162,597 |   |   |   | — |   |   |   | 169,107 |   |
| Total diluted weighted average common shares outstanding                   |   |               | 43,080,849 |   |             |   | 31,521,608 |   |   |   | 43,035,945 |   |   |   | 31,522,029 |   |
| Diluted (loss) earnings per share                                          |   | $                  | (5.17      | )      |             | $      | 0.23 |   |   | $ | (5.06 | ) |   | $ | 0.46 |   |
|                                                                       |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |

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

| (2)   | Antidilutive options have been excluded in the computation of diluted (loss) earnings per share because the options’ exercise prices were greater than the average market price of the common stock. For the three and six months ended June 30, 2009, there were 1,423,227 antidilutive options at an average price of $15.86. For the three and six monthsended June 30, 2008, there were 529,916 antidilutive options at an average price of $21.15, respectively. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Comprehensive (Loss) Income                                                                                                    |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                           |   |   |   |   |   |   |   |   |   |
| (Dollars in thousands)                                                                                                         |   | Before tax |   |   | Tax Benefit |   |   | Net of tax |   |
| Six months ended June 30, 2009                                                                                                 |   | Amount |   |   | (Expense) |   |   | amount |   |
| Net unrealized losses on available for sale securities:                                                                        |   |   |   |   |   |   |   |   |   |
| Net unrealized holding losses arising during period                                                                            |   | $ | (2,446 | ) |   | $ | 856 |   |   | $ | (1,590 | ) |
| Less reclassification adjustment for net gains realized in net income                                                          |   |   | 6,897 |   |   |   | (2,414 | ) |   |   | 4,483 |   |
| Less reclassification adjustment for other-than-temporary impairment of available for sale securities recognized in net income |   |   | (1,874 | ) |   |   |  656 |   |   |   | (1,218 | ) |
| Net unrealized losses                                                                                                          |   |   | (7,469 | ) |   |   | 2,614 |   |   |   | (4,855 | ) |
| Change in fair value of derivatives used for cash flow hedges                                                                  |   |   | 3 |   |   |   | — |   |   |   | 3 |   |
| Other comprehensive loss, net                                                                                                  |   | $ | (7,466 | ) |   | $ | 2,614 |   |   | $ | (4,852 | ) |
|                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| (Dollars in thousands)                                                                                                         |   | Before tax |   |   | Tax Benefit |   |   | Net of tax |   |
| Six months ended June 30, 2008                                                                                                 |   | Amount |   |   | (Expense) |   |   | amount |   |
| Net unrealized losses on available for sale securities:                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Net unrealized holding losses arising during period                                                                            |   | $ | (21,479 | ) |   | $ | 7,518 |   |   | $ | (13,961 | ) |
| Less reclassification adjustment for net gains realized in net income                                                          |   |   | 225 |   |   |   | (79 | ) |   |   | 146 |   |
| Net unrealized losses                                                                                                          |   |   | (21,704 | ) |   |   | 7,597 |   |   |   | (14,107 | ) |
| Change in fair value of derivatives used for cash flow hedges                                                                  |   |   | 111 |   |   |   | (39 | ) |   |   | 72 |   |
| Other comprehensive loss, net                                                                                                  |   | $ | (21,593 | ) |   | $ | 7,558 |   |   | $ | (14,035 | ) |

| (Dollars in thousands)   |   | Net Unrealized Losses on Available For Sale Securities |    |   | Net Change in Fair Value of Derivatives Used for Cash Flow Hedges |   |    | Accumulated Other Comprehensive Loss |   |
|--------------------------|--------|-------------------------------------------------------------|---------|--------|-------------------------------------------------------------------|--------|---------|--------------------------------------|--------|
| Balance, January 1, 2008 |   | $                                                           | (2,452  | )      |                                                              | $      | (114    | )                                    |   | $ | (2,566 | ) |
| Net Change               |   |                                                        | (14,107 | )      |                                                              |   | 72      |                                 |   |   | (14,035 | ) |
| Balance, June 30, 2008   |   | $                                                           | (16,559 | )      |                                                              | $      | (42     | )                                    |   | $ | (16,601 | ) |
|                     |   |                                                        |    |   |                                                              |   |    |                                 |   |   |   |   |
| Balance, January 1, 2009 |   | $                                                           | (29,014 | )      |                                                              | $      | (3      | )                                    |   | $ | (29,017 | ) |
| Net Change               |   |                                                        | (4,855  | )      |                                                              |   | 3       |                                 |   |   | (4,852 | ) |
| Balance, June 30, 2009   |   | $                                                           | (33,869 | )      |                                                              | $      | — |                                 |   | $ | (33,869 | ) |

----

| (Dollars in thousands)            |   | Community Banking |     |   | Wealth Management |   |   | All Other |   |   | Consolidated Totals |   |
|-----------------------------------|--------|-------------------|----------|--------|------------------------|--------|--------|-----------|--------|--------|---------------------|--------|
| Three Months Ended June 30, 2009  |   |              |     |   |                   |   |   |      |   |   |                |   |
|                              |   |              |     |   |                   |   |   |      |   |   |                |   |
| Net interest income (expense)     |   | $                 | 34,617   |   |                   | $      | 149    |      |   | $      | (1,313              | )      |   | $ | 33,453 |   |
| Provision for loan losses         |   |              | 32,000   |   |                   |   | -      |      |   |   | -                   |   |   |   | 32,000 |   |
| Noninterest income                |   |              | 16,690   |   |                   |   | 4,979  |      |   |   | 42                  |   |   |   | 21,711 |   |
| Noninterest expense (1)           |   |              | 247,628  |   |                   |   | 4,830  |      |   |   | 292                 |   |   |   | 252,750 |   |
| (Loss) income before income taxes |   |              | (228,321 | )      |                   |   | 298    |      |   |   | (1,563              | )      |   |   | (229,586 | ) |
| Income tax (benefit) expense      |   |              | (6,706   | )      |                   |   | 132    |      |   |   | (509                | )      |   |   | (7,083 | ) |
| Net (loss) income                 |   | $                 | (221,615 | )      |                   | $      | 166    |      |   | $      | (1,054              | )      |   | $ | (222,503 | ) |
|                              |   |              |     |   |                   |   |   |      |   |   |                |   |   |   |   |   |
| Three Months Ended June 30, 2008  |   |              |     |   |                   |   |   |      |   |   |                |   |   |   |   |   |
|                              |   |              |     |   |                   |   |   |      |   |   |                |   |   |   |   |   |
| Net interest income (expense)     |   | $                 | 26,284   |   |                   | $      | 144    |      |   | $      | (1,239              | )      |   | $ | 25,189 |   |
| Provision for loan losses         |   |              | 3,107    |   |                   |   | -      |      |   |   | -                   |   |   |   | 3,107 |   |
| Noninterest income                |   |              | 6,849    |   |                   |   | 4,618  |      |   |   | 129                 |   |   |   | 11,596 |   |
| Noninterest expense               |   |              | 20,122   |   |                   |   | 4,134  |      |   |   | 202                 |   |   |   | 24,458 |   |
| Income (loss) before income taxes |   |              | 9,904    |   |                   |   | 628    |      |   |   | (1,312              | )      |   |   | 9,220 |   |
| Income taxes (benefit)            |   |              | 2,090    |   |                   |   | 235    |      |   |   | (432                | )      |   |   | 1,893 |   |
| Net income (loss)                 |   | $                 | 7,814    |   |                   | $      | 393    |      |   | $      | (880                | )      |   | $ | 7,327 |   |

| (Dollars in thousands)            |   | Community Banking |      |   | Wealth Management |   |   | All Other |   |   | Consolidated Totals |   |
|-----------------------------------|--------|-------------------|-----------|--------|------------------------|--------|--------|-----------|--------|--------|---------------------|--------|
| Six Months Ended June 30, 2009    |   |              |      |   |                   |   |   |      |   |   |                |   |
|                              |   |              |      |   |                   |   |   |      |   |   |                |   |
| Net interest income (expense)     |   | $                 | 71,216    |   |                   | $      | 192    |      |   | $      | (2,651              | )      |   | $ | 68,757 |   |
| Provision for loan losses         |   |              | 39,121    |   |                   |   | -      |      |   |   | -                   |   |   |   | 39,121 |   |
| Noninterest income                |   |              | 28,521    |   |                   |   | 9,400  |      |   |   | (51                 | )      |   |   | 37,870 |   |
| Noninterest expense (1)           |   |              | 281,262   |   |                   |   | 9,665  |      |   |   | 444                 |   |   |   | 291,371 |   |
| (Loss) income before income taxes |   |              | (220,646  | )      |                   |   | (73    | )         |   |   | (3,146              | )      |   |   | (223,865 | ) |
| Income tax (benefit) expense      |   |              | (4,902    | )      |                   |   | (8     | )         |   |   | (1,047              | )      |   |   | (5,957 | ) |
| Net (loss) income                 |   | $                 | (215,744  | )      |                   | $      | (65    | )         |   | $      | (2,099              | )      |   | $ | (217,908 | ) |
|                              |   |              |      |   |                   |   |   |      |   |   |                |   |   |   |   |   |
| Assets                            |   | $                 | 5,168,889 |   |                   | $      | 34,784 |      |   | $      | 6,654               |   |   | $ | 5,210,327 |   |
|                              |   |              |      |   |                   |   |   |      |   |   |                |   |   |   |   |   |
| Six Months Ended June 30, 2008    |   |              |      |   |                   |   |   |      |   |   |                |   |   |   |   |   |
|                              |   |              |      |   |                   |   |   |      |   |   |                |   |   |   |   |   |
| Net interest income (expense)     |   | $                 | 51,785    |   |                   | $      | 149    |      |   | $      | (2,538              | )      |   | $ | 49,396 |   |
| Provision for loan losses         |   |              | 5,067     |   |                   |   | -      |      |   |   | -                   |   |   |   | 5,067 |   |
| Noninterest income                |   |              | 13,205    |   |                   |   | 8,933  |      |   |   | 290                 |   |   |   | 22,428 |   |
| Noninterest expense               |   |              | 39,690    |   |                   |   | 7,930  |      |   |   | 556                 |   |   |   | 48,176 |   |
| Income (loss) before income taxes |   |              | 20,233    |   |                   |   | 1,152  |      |   |   | (2,804              | )      |   |   | 18,581 |   |
| Income taxes (benefit)            |   |              | 4,397     |   |                   |   | 434    |      |   |   | (881                | )      |   |   | 3,950 |   |
| Net income (loss)                 |   | $                 | 15,836    |   |                   | $      | 718    |      |   | $      | (1,923              | )      |   | $ | 14,631 |   |
|                              |   |              |      |   |                   |   |   |      |   |   |                |   |   |   |   |   |
| Assets                            |   | $                 | 3,842,721 |   |                   | $      | 25,003 |      |   | $      | 14,508              |   |   | $ | 3,882,232 |   |

|   | (1)  Includes a $214.5 million goodwill impairment charge related to the Community Banking segment. See Note 4 – Goodwill and Other Intangibles for additional information. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                       |   | Total Amount Committed at |    |
|--------------------------------------------------------------------------------------------|--------|---------------------------|---------|
| Commitments                                                                                |   | June 30,2009              |    |   | December 31, 2008 |   |
| (Dollars in thousands)                                                                     |
|                                                                                       |   |                      |    |   |   |   |
| Financial instruments whose contract amounts represent credit risk:                        |   |                      |    |   |   |   |
| Commitments to extend credit                                                               |   | $                         | 853,253 |   |   | $ | 995,125 |   |
| Standby letters of credit and financial guarantees written                                 |   |                      | 45,695  |   |   |   | 34,806 |   |
| Financial instruments whose notional or contract amounts exceed the amount of credit risk: |   |                      |    |   |   |   |   |   |
| Interest rate swap agreements                                                              |   |                      | 198,078 |   |   |   | 124,214 |   |
| Interest rate cap agreements                                                               |   |                      | — |   |   |   | 200,000 |   |

----

|                                                                   | Asset Derivatives            |   | Liability Derivatives   |    |
|------------------------------------------------------------------------|------------------------------|--------|-------------------------|---------|
|  (Dollars in thousands)                                           | As of June 30, 2009          |   | As of December 31, 2008 |    | As of June 30, 2009 |   | As of December 31, 2008 |   |
|                                                                   |                         |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                   | Balance Sheet Classification |   | Fair Value              |    | Balance Sheet Classification |   | Fair Value |   | Balance Sheet Classification |   | Fair Value |   | Balance Sheet Classification |   | Fair Value |   |
| Derivatives designated as hedging instruments under SFAS 133           |                         |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Rate Products                                                 | Other Assets                 |   | $                       | — |   | Other Assets |   | $ | — |   | Other Liabilities |   | $ | 195 |   | Other Liabilities |   | $ | 347 |   |
|                                                                   |                         |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total derivatives designated as hedging instruments under SFAS 133     |                         |   | $                       | — |   |   |   | $ | — |   |   |   | $ | 195 |   |   |   | $ | 347 |   |
|                                                                   |                         |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives not designated as hedging instruments under SFAS 133       |                         |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Rate Products                                                 | Other Assets                 |   | $                       | 3,335   |   | Other Assets |   | $ | 4,523 |   | Other Liabilities |   | $ | 3,384 |   | Other Liabilities |   | $ | 5,294 |   |
|                                                                   |                         |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total derivatives not designated as hedging instruments under SFAS 133 |                         |   | $                       | 3,335   |   |   |   | $ | 4,523 |   |   |   | $ | 3,384 |   |   |   | $ | 5,294 |   |

----

| Derivatives in SFAS 133 Fair Value Hedging Relationships | Classification of Gain/(Loss) Recognized on Derivative |   | Gain/(Loss) Recognized on Derivative |   |
|----------------------------------------------------------|--------------------------------------------------------|--------|--------------------------------------|--------|
|                                                     |                                                   |   | Three Months Ended                   |   |   | Six Months Ended |   |
|  (Dollars in thousands)                             |                                                   |   | June 30,                             |   |   | June 30, |   |
|                                                     | 2009                                                   |   |                                 | 2008   |   |   | 2009 |   |   | 2008 |   |
|                                                     |                                                   |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Interest Rate Products                                   | Interest income                                        |   | $                                    | (23    | ) |   | $ | (27 | ) |   | $ | (46 | ) |   | $ | (43 | ) |
|                                                     |                                                   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                    |                                                   |   | $                                    | (23    | ) |   | $ | (27 | ) |   | $ | (46 | ) |   | $ | (43 | ) |
|                                                     |                                                   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| Derivatives Not Designated as Hedging Instruments Under SFAS 133 | Classification of Gain/(Loss) Recognized on Derivative |   | Gain/(Loss) Recognized on Derivative |   |
|------------------------------------------------------------------|--------------------------------------------------------|--------|--------------------------------------|--------|
|                                                             |                                                   |   | Three Months Ended                   |   |   | Six Months Ended |   |
|  (Dollars in thousands)                                     |                                                   |   | June 30,                             |   |   | June 30, |   |
|                                                             | 2009                                                   |   |                                 | 2008   |   |   | 2009 |   |   | 2008 |   |
|                                                             |                                                   |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Interest Rate Products                                           | Interest income                                        |   | $                                    | (69    | ) |   | $ | — |   |   | $ | (150 | ) |   | $ | — |   |
|                                                             | Other income                                           |   |                                 | 455    |   |   |   | 112 |   |   |   | 723 |   |   |   | 145 |   |
|                                                             |                                                   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                            |                                                   |   | $                                    | 386    |   |   | $ | 112 |   |   | $ | 573 |   |   | $ | 145 |   |
|                                                             |                                                   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

|                                                                     |   | Fair Value Measurement Using                                              |          |   |                                         |   |
|--------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|---------------|--------|----------------------------------------------|--------|
|     (Dollars in thousands)                           |   | Quoted Prices in Active Markets for Identical Assets/Liabilities(Level 1) |          |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |   |   BalanceJune 30, 2009 |   |
|                                                                     |   |                                                                      |          |   |                                         |   |   |   |   |   |   |   |
| Assets                                                              |   |                                                                      |          |   |                                         |   |   |   |   |   |   |   |
| Investment securities available for sale:                                |   |                                                                      |          |   |                                         |   |   |   |   |   |   |   |
| Obligations of U.S. government agencies and corporations                 |   | $                                                                         |  — |   |                                         | $      |  500 |   |   | $ |  — |   |   | $ |  500 |   |
| Obligations of states and political subdivisions                         |   |                                                                      | —       |   |                                         |   | 284,658 |   |   |   | — |   |   |   | 284,658 |   |
| Residential mortgage-backed securities                                   |   |                                                                      | —       |   |                                         |   | 697,429 |   |   |   | 9,036 |   |   |   | 706,465 |   |
|     Trust preferred pools/collateralized debt obligations |   |                                                                      |  — |   |                                         |   |  11,139 |   |   |   |  221 |   |   |   |  11,360 |   |
| Corporate bonds                                                          |   |                                                                      | —       |   |                                         |   | 8,259 |   |   |   | — |   |   |   | 8,259 |   |
| Equity securities                                                        |   |                                                                      | 21,062        |   |                                         |   | — |   |   |   | — |   |   |   | 21,062 |   |
| Total investment securities available for sale:                          |   |                                                                      | 21,062        |   |                                         |   | 1,001,985 |   |   |   | 9,257 |   |   |   | 1,032,304 |   |
|                                                                     |   |                                                                      |          |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Residential mortgage loans held for sale                                 |   |                                                                      | —       |   |                                         |   | 84,778 |   |   |   | — |   |   |   | 84,778 |   |
| Derivatives                                                              |   |                                                                      | —       |   |                                         |   | 4,729 |   |   |   | — |   |   |   | 4,729 |   |
| Total assets                                                             |   | $                                                                         | 21,062        |   |                                         | $      | 1,091,492 |   |   | $ | 9,257 |   |   | $ | 1,121,811 |   |
| Liabilities                                                              |   |                                                                      |          |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives                                                              |   | $                                                                         | —       |   |                                         | $      | 3,783 |   |   | $ | — |   |   | $ | 3,783 |   |
| Total liabilities                                                        |   | $                                                                         | —       |   |                                         | $      | 3,783 |   |   | $ | — |   |   | $ | 3,783 |   |

----

|    (Dollars in thousands)                                                                                                                                                 |   | Residential mortgage-backed securities |    |   | Trust preferred pools/collateralized debt obligations |   | Total Investment Securities Available for Sale |   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|---------|--------|-------------------------------------------------------|--------|------------------------------------------------|--------|--------|
|                                                                                                                                                                                     |   |                                   |    |   |                                                  |   |                                           |
| Balance, January 1, 2009                                                                                                                                                                 |   | $                                      | — |   |                                                  | $      | 3,149                                          |   | $      | 3,149 |   |
| Transfers into Level 3                                                                                                                                                                   |   |                                   | 14,904  |   |                                                  |   | —                                        |   |   | 14,904 |   |
| Total losses realized:                                                                                                                                                                   |   |                                   |    |   |                                                  |   |                                           |   |   |   |   |   |
| Included in earnings(1)                                                                                                                                                                  |   |                                   | (683    | )      |                                                  |   | (990                                           | )      |   | (1,673 | ) |
| Included in other comprehensive income                                                                                                                                                   |   |                                   | (4,824  | )      |                                                  |   | (1,938                                         | )      |   | (6,762 | ) |
| Payments                                                                                                                                                                                 |   |                                   | (361    | )      |                                                  |   | —                                        |   |   | (361 | ) |
| Balance, June 30, 2009                                                                                                                                                                   |   | $                                      | 9,036   |   |                                                  | $      | 221                                            |   | $      | 9,257 |   |
|                                                                                                                                                                                     |   |                                   |    |   |                                                  |   |                                           |   |   |   |   |   |
|                                                                                                                                                                                     |   |                                   |    |   |                                                  |   |                                           |   |   |   |   |   |
| Total losses included in earnings from January 1, 2009 to June 30, 2009 relating to assets still held at June 30, 2009                                                                   |   | $                                      | (683    | )      |                                                  | $      | (990                                           | )      | $      | (1,673 | ) |
|                                                                                                                                                                                     |   |                                   |    |   |                                                  |   |                                           |   |   |   |   |   |
| Change in unrealized losses relating to assets still held at June 30, 2009                                                                                                               |   |                                   | (4,824  | )      |                                                  |   | (1,938                                         | )      |   | (6,762 | ) |
|                                                                                                                                                                                     |   |                                   |    |   |                                                  |   |                                           |   |   |   |   |   |
| (1) The loss is reported in net other-than-temporary impairment losses recognized in earnings on investments securities available for sale in the consolidated statements of operations. |   |                                   |    |   |                                                  |   |                                           |   |   |   |   |   |

----

|                                           |   | Fair Value Measurement Using                                              |    |
|------------------------------------------------|--------|---------------------------------------------------------------------------|---------|
|     (Dollars in thousands) |   | Quoted Prices in Active Markets for Identical Assets/Liabilities(Level 1) |    |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |   |   BalanceJune 30, 2009 |   |
|                                           |   |                                                                      |    |   |   |   |   |   |   |   |   |   |
| Assets                                         |   |                                                                      |    |   |   |   |   |   |   |   |   |   |
| Impaired loans                                 |   | $                                                                         | — |   |   | $ | 122,676 |   |   | $ | — |   |   | $ | 122,676 |   |
| Goodwill                                       |   |                                                                      | — |   |   |   | — |   |   |   | 27,031 |   |   |   | 27,031 |   |
| Total assets                                   |   | $                                                                         | — |   |   | $ | 122,676 |   |   | $ | 27,031 |   |   | $ | 149,707 |   |

----

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

|                                     |   |                             |
|------------------------------------------|--------|----------------------------------|
|                                     |   | June 30, 2009                    |   |   |   December 31, 2008 |
|                                     |   | CarryingAmount                   |   |   | FairValue |   |   |  CarryingAmount |   |   |   |  FairValue |   |
|                                     |   | (Dollars in thousands) |
| Cash and cash equivalents                |   | $                                | 414,060 |   |   | $ | 414,060 |   |   | $ | 102,526 |   |   | $ | 102,526 |   |
| Investment securities available for sale |   |                             | 1,032,304 |   |   |   | 1,032,304 |   |   |   | 1,141,948 |   |   |   | 1,141,948 |   |
| Investment securities held to maturity   |   |                             | 33,363 |   |   |   | 32,908 |   |   |   | 50,434 |   |   |   | 50,059 |   |
| Residential mortgage loans held for sale |   |                             | 84,778 |   |   |   | 84,778 |   |   |   | 17,165 |   |   |   | 17,165 |   |
| Loans and leases, net                    |   |                             | 3,284,148 |   |   |   | 3,169,366 |   |   |   | 3,618,124 |   |   |   | 3,591,202 |   |
| Bank-owned life insurance                |   |                             | 88,631 |   |   |   | 88,631 |   |   |   | 87,081 |   |   |   | 87,081 |   |
| Time deposits                            |   |                             | 1,574,544 |   |   |   | 1,592,390 |   |   |   | 1,588,921 |   |   |   | 1,613,684 |   |
| Long-term borrowings                     |   |                             | 694,586 |   |   |   | 729,886 |   |   |   | 759,658 |   |   |   | 809,618 |   |
| Subordinated debt                        |   |                             | 93,784 |   |   |   | 48,103 |   |   |   | 93,743 |   |   |   | 50,474 |   |

----

----

----

----

----

|                                                     |   | Three Months EndedJune 30, 2009 compared toJune 30, 2008 |   |   | Six Months EndedJune 30, 2009 compared toJune 30, 2008 |   |
|----------------------------------------------------------|--------|----------------------------------------------------------|--------|--------|--------------------------------------------------------|--------|
|                                                     |   |                                                     |   |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                     |   | Total                                                    |   |   | Due to change in:                                      |   |   | Total |   |   | Due to change in: |   |
| (Dollars in thousands)                                   |   | Change                                                   |   |   | Volume                                                 |   |   | Rate |   |   | Change |   |   | Volume |   |   | Rate |   |
|                                                     |   |                                                     |   |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in interest income:                  |   |                                                     |   |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment securities *                                  |   | $                                                        | 1,408  |   |                                                   | $      | 2,213 |   |   | $ | (805 | ) |   | $ | 4,409 |   |   | $ | 4,512 |   |   | $ | (103 | ) |
| Federal funds sold and deposits in banks                 |   |                                                     | 120    |   |                                                   |   | 296 |   |   |   | (176 | ) |   |   | (447 | ) |   |   | 819 |   |   |   | (1,266 | ) |
| Loans *                                                  |   |                                                     | 9,455  |   |                                                   |   | 13,852 |   |   |   | (4,397 | ) |   |   | 18,708 |   |   |   | 30,648 |   |   |   | (11,940 | ) |
| Total                                                    |   |                                                     | 10,983 |   |                                                   |   | 16,361 |   |   |   | (5,378 | ) |   |   | 22,670 |   |   |   | 35,979 |   |   |   | (13,309 | ) |
|                                                     |   |                                                     |   |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in interest expense:                 |   |                                                     |   |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings and money market deposits                        |   |                                                     | (326   | )      |                                                   |   | 1,940 |   |   |   | (2,266 | ) |   |   | (2,250 | ) |   |   | 4,241 |   |   |   | (6,491 | ) |
| Time deposits                                            |   |                                                     | 999    |   |                                                   |   | 4,599 |   |   |   | (3,600 | ) |   |   | 1,191 |   |   |   | 9,001 |   |   |   | (7,810 | ) |
| Borrowed funds                                           |   |                                                     | 1,755  |   |                                                   |   | 3,098 |   |   |   | (1,343 | ) |   |   | 3,612 |   |   |   | 7,005 |   |   |   | (3,393 | ) |
| Total                                                    |   |                                                     | 2,428  |   |                                                   |   | 9,637 |   |   |   | (7,209 | ) |   |   | 2,553 |   |   |   | 20,247 |   |   |   | (17,694 | ) |
|                                                     |   |                                                     |   |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net increase in net interest income                      |   | $                                                        | 8,555  |   |                                                   | $      | 6,724 |   |   | $ | 1,831 |   |   | $ | 20,117 |   |   | $ | 15,732 |   |   | $ | 4,385 |   |
|  *Tax equivalent basis using a tax rate of 35%, net |   |                                                     |   |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|   | (1) The interest earned on nontaxable investment securities and loans is shown on a tax equivalent basis, |
|--------|-----------------------------------------------------------------------------------------------------------|

----

| (Dollars in thousands)                                                                    |   | Three Months Ended June 30, |          |   | Three Months Ended June 30, |   |
|-------------------------------------------------------------------------------------------|--------|-----------------------------|---------------|--------|-----------------------------|--------|
|                                                                                      |   | 2009                        |          |   | 2008                        |   |
|                                                                                      |   |                        |          |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                      |   | Average                     |          |   |                        |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
| Assets                                                                                    |   | Balance                     |          |   | Interest                    |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| Earning assets:                                                                           |   |                        |          |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment securities:                                                                    |   |                        |          |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable investments                                                                       |   | $                           | 890,582       |   |                        | $      | 10,453 |   |   |   | 4.72 | % |   | $ | 740,847 |   |   | $ | 9,622 |   |   |   | 5.22 | % |
| Nontaxable investments (1)                                                                |   |                        | 309,015       |   |                        |   | 4,957 |   |   |   | 6.45 |   |   |   | 288,655 |   |   |   | 4,380 |   |   |   | 6.10 |   |
| Total investment securities                                                               |   |                        | 1,199,597     |   |                        |   | 15,410 |   |   |   | 5.17 |   |   |   | 1,029,502 |   |   |   | 14,002 |   |   |   | 5.47 |   |
| Federal funds sold, securities purchased under agreements to resell and deposits in banks |   |                        |  369,173 |   |                        |   |  239 |   |   |   |  0.26 |   |   |   |  30,812 |   |   |   |  119 |   |   |   |  1.55 |   |
| Loans (1) (2)                                                                             |   |                        | 3,511,623     |   |                        |   | 46,522 |   |   |   | 5.33 |   |   |   | 2,491,894 |   |   |   | 37,067 |   |   |   | 5.98 |   |
| Total earning assets                                                                      |   |                        | 5,080,393     |   |                        |   | 62,171 |   |   |   | 4.92 |   |   |   | 3,552,208 |   |   |   | 51,188 |   |   |   | 5.80 |   |
| Noninterest-earning assets                                                                |   |                        | 525,082       |   |                        |   |   |   |   |   |   |   |   |   | 304,692 |   |   |   |   |   |   |   |   |   |
| Total assets                                                                              |   | $                           | 5,605,475     |   |                        |   |   |   |   |   |   |   |   | $ | 3,856,900 |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |                        |          |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and Shareholders' Equity                                                      |   |                        |          |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                             |   |                        |          |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing deposits:                                                                |   |                        |          |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings and money market                                                                  |   | $                           | 1,981,432     |   |                        |   | 5,335 |   |   |   | 1.08 |   |   | $ | 1,397,205 |   |   |   | 5,661 |   |   |   | 1.63 |   |
| Time                                                                                      |   |                        | 1,646,969     |   |                        |   | 13,936 |   |   |   | 3.40 |   |   |   | 1,162,516 |   |   |   | 12,937 |   |   |   | 4.48 |   |
| Total interest-bearing deposits                                                           |   |                        | 3,628,401     |   |                        |   | 19,271 |   |   |   | 2.14 |   |   |   | 2,559,721 |   |   |   | 18,598 |   |   |   | 2.92 |   |
| Borrowed funds                                                                            |   |                        | 919,121       |   |                        |   | 7,321 |   |   |   | 3.20 |   |   |   | 554,799 |   |   |   | 5,566 |   |   |   | 4.04 |   |
| Total interest bearing liabilities                                                        |   |                        | 4,547,522     |   |                        |   | 26,592 |   |   |   | 2.35 |   |   |   | 3,114,520 |   |   |   | 24,164 |   |   |   | 3.12 |   |
| Noninterest-bearing liabilities:                                                          |   |                        |          |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                                                                           |   |                        | 493,142       |   |                        |   |   |   |   |   |   |   |   |   | 340,802 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                                                         |   |                        | 86,473        |   |                        |   |   |   |   |   |   |   |   |   | 66,267 |   |   |   |   |   |   |   |   |   |
| Total noninterest-bearing liabilities                                                     |   |                        | 579,615       |   |                        |   |   |   |   |   |   |   |   |   | 407,069 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                                         |   |                        | 5,127,137     |   |                        |   |   |   |   |   |   |   |   |   | 3,521,589 |   |   |   |   |   |   |   |   |   |
| Shareholders' equity                                                                      |   |                        | 478,338       |   |                        |   |   |   |   |   |   |   |   |   | 335,311 |   |   |   |   |   |   |   |   |   |
| Total liabilities and shareholders' equity                                                |   | $                           | 5,605,475     |   |                        |   |   |   |   |   |   |   |   | $ | 3,856,900 |   |   |   |   |   |   |   |   |   |
| Net interest spread                                                                       |   |                        |          |   |                        |   |   |   |   |   | 2.57 |   |   |   |   |   |   |   |   |   |   |   | 2.68 |   |
| Effect of noninterest-bearing sources                                                     |   |                        |          |   |                        |   |   |   |   |   | 0.25 |   |   |   |   |   |   |   |   |   |   |   | 0.38 |   |
| Net interest income/margin on earning assets                                              |   |                        |          |   |                        | $      | 35,579 |   |   |   | 2.82 | % |   |   |   |   |   | $ | 27,024 |   |   |   | 3.06 | % |
|                                                                                      |   |                        |          |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less tax equivalent adjustment                                                            |   |                        |          |   |                        |   | 2,126 |   |   |   |   |   |   |   |   |   |   |   | 1,835 |   |   |   |   |   |
| Net interest income                                                                       |   |                        |          |   |                        | $      | 33,453 |   |   |   |   |   |   |   |   |   |   | $ | 25,189 |   |   |   |   |   |

----

| (Dollars in thousands)                                                                                                             |   | Six Months Ended June 30, |          |   | Six Months Ended June 30, |   |
|------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|---------------|--------|---------------------------|--------|
|                                                                                                                               |   | 2009                      |          |   | 2008                      |   |
|                                                                                                                               |   |                      |          |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                               |   | Average                   |          |   |                      |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
| Assets                                                                                                                             |   | Balance                   |          |   | Interest                  |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| Earning assets:                                                                                                                    |   |                      |          |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Investment securities:                                                                                                 |   |                      |          |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Taxable investments                                                                                              |   | $                         | 888,214       |   |                      | $      | 22,239 |   |   |   | 5.04 | % |   | $ | 747,157 |   |   | $ | 19,376 |   |   |   | 5.22 | % |
|    Nontaxable investments (1)                                                                                       |   |                      | 316,064       |   |                      |   | 10,282 |   |   |   | 6.54 |   |   |   | 289,377 |   |   |   | 8,736 |   |   |   | 6.07 |   |
|       Total investment securities                                                                    |   |                      | 1,204,278     |   |                      |   | 32,521 |   |   |   | 5.43 |   |   |   | 1,036,534 |   |   |   | 28,112 |   |   |   | 5.45 |   |
|   Federal funds sold, securities purchased under     agreements to resell and deposits in banks |   |                      |  271,136 |   |                      |   |  366 |   |   |   |  0.27 |   |   |   |  57,485 |   |   |   |  813 |   |   |   |  2.84 |   |
|   Loans (1) (2)                                                                                                          |   |                      | 3,588,754     |   |                      |   | 95,180 |   |   |   | 5.33 |   |   |   | 2,477,569 |   |   |   | 76,472 |   |   |   | 6.21 |   |
|        Total earning assets                                                                     |   |                      | 5,064,168     |   |                      |   | 128,067 |   |   |   | 5.09 |   |   |   | 3,571,588 |   |   |   | 105,397 |   |   |   | 5.93 |   |
| Noninterest-earning assets                                                                                                         |   |                      | 528,687       |   |                      |   |   |   |   |   |   |   |   |   | 302,341 |   |   |   |   |   |   |   |   |   |
|          Total assets                                                                 |   | $                         | 5,592,855     |   |                      |   |   |   |   |   |   |   |   | $ | 3,873,929 |   |   |   |   |   |   |   |   |   |
|                                                                                                                               |   |                      |          |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and Shareholders' Equity                                                                                               |   |                      |          |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                                                                      |   |                      |          |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing deposits:                                                                                                         |   |                      |          |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings and money market                                                                                                           |   | $                         | 1,944,350     |   |                      |   | 11,506 |   |   |   | 1.19 |   |   | $ | 1,406,329 |   |   |   | 13,756 |   |   |   | 1.97 |   |
| Time                                                                                                                               |   |                      | 1,664,903     |   |                      |   | 28,629 |   |   |   | 3.46 |   |   |   | 1,199,999 |   |   |   | 27,438 |   |   |   | 4.60 |   |
| Total interest-bearing deposits                                                                                                    |   |                      | 3,609,253     |   |                      |   | 40,135 |   |   |   | 2.24 |   |   |   | 2,606,328 |   |   |   | 41,194 |   |   |   | 3.18 |   |
| Borrowed funds                                                                                                                     |   |                      | 936,038       |   |                      |   | 14,791 |   |   |   | 3.18 |   |   |   | 526,932 |   |   |   | 11,179 |   |   |   | 4.27 |   |
| Total interest bearing liabilities                                                                                                 |   |                      | 4,545,291     |   |                      |   | 54,926 |   |   |   | 2.43 |   |   |   | 3,133,260 |   |   |   | 52,373 |   |   |   | 3.36 |   |
| Noninterest-bearing liabilities:                                                                                                   |   |                      |          |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                                                                                                                    |   |                      | 482,970       |   |                      |   |   |   |   |   |   |   |   |   | 332,460 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                                                                                                  |   |                      | 85,188        |   |                      |   |   |   |   |   |   |   |   |   | 68,854 |   |   |   |   |   |   |   |   |   |
| Total noninterest-bearing liabilities                                                                                              |   |                      | 568,158       |   |                      |   |   |   |   |   |   |   |   |   | 401,314 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                                                                                  |   |                      | 5,113,449     |   |                      |   |   |   |   |   |   |   |   |   | 3,534,574 |   |   |   |   |   |   |   |   |   |
| Shareholders' equity                                                                                                               |   |                      | 479,406       |   |                      |   |   |   |   |   |   |   |   |   | 339,355 |   |   |   |   |   |   |   |   |   |
| Total liabilities and shareholders' equity                                                                                         |   | $                         | 5,592,855     |   |                      |   |   |   |   |   |   |   |   | $ | 3,873,929 |   |   |   |   |   |   |   |   |   |
| Net interest spread                                                                                                                |   |                      |          |   |                      |   |   |   |   |   | 2.66 |   |   |   |   |   |   |   |   |   |   |   | 2.57 |   |
| Effect of noninterest-bearing sources                                                                                              |   |                      |          |   |                      |   |   |   |   |   | 0.24 |   |   |   |   |   |   |   |   |   |   |   | 0.42 |   |
| Net interest income/margin on earning assets                                                                                       |   |                      |          |   |                      | $      | 73,141 |   |   |   | 2.90 | % |   |   |   |   |   | $ | 53,024 |   |   |   | 2.99 | % |
|                                                                                                                               |   |                      |          |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less tax equivalent adjustment                                                                                                     |   |                      |          |   |                      |   | 4,384 |   |   |   |   |   |   |   |   |   |   |   | 3,628 |   |   |   |   |   |
| Net interest income                                                                                                                |   |                      |          |   |                      | $      | 68,757 |   |   |   |   |   |   |   |   |   |   | $ | 49,396 |   |   |   |   |   |

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

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

----

----

|                   |   |         |    |   | Change in    |   |     |       |   |   | Asset/Liability |   |
|------------------------|--------|--------------|---------|--------|--------------|--------|----------|------------|--------|--------|-----------------|--------|
|                   |   | Market Value |    |   | Market Value |   |     | Percentage |   |   | Approved        |   |
| (Dollars in thousands) |   | of Equity    |    |   | of Equity    |   |     | Change     |   |   | Percent Change  |   |
|                   |   |         |    |   |         |   |     |       |   |   |            |   |
| +300 Basis Points      |   | $            | 95,076  |   |         | $      | (165,044 | )          |   |   | -63.45          | %      |   |   | +/- 35 | % |
| +200 Basis Points      |   |         | 152,040 |   |         |   | (108,080 | )          |   |   | -41.55          | %      |   |   | +/- 25 |   |
| +100 Basis Points      |   |         | 210,881 |   |         |   | (49,239  | )          |   |   | -18.93          | %      |   |   | +/- 15 |   |
| Flat Rate              |   |         | 260,120 |   |         |   | -        |       |   |   | 0.00            | %      |   |   |   |   |
| -100 Basis Points      |   |         | 286,043 |   |         |   | 25,923   |       |   |   | 9.97            | %      |   |   | +/- 15 |   |
| -200 Basis Points      |   |         | 289,545 |   |         |   | 29,425   |       |   |   | 11.31           | %      |   |   | +/- 25 |   |
| -300 Basis Points      |   |         | 281,521 |   |         |   | 21,401   |       |   |   | 8.23            | %      |   |   | +/- 35 |   |

----

----

|                                                               |   | Six Months Ended |      |
|--------------------------------------------------------------------|--------|------------------|-----------|
|                                                               |   | June 30,         |      |
| (Dollars in thousands)                                             |   | 2009             |      |   | 2008 |   |
|                                                               |   |             |      |   |   |   |
| Average loans                                                      |   | $                | 3,588,754 |   |   | $ | 2,477,569 |   |
|                                                               |   |             |      |   |   |   |   |   |
| Allowance, beginning of period                                     |   | $                | 49,955    |   |   |   | 27,328 |   |
| Loans charged off:                                                 |   |             |      |   |   |   |   |   |
| Real estate                                                        |   |             | 14,744    |   |   |   | 626 |   |
| Commercial and industrial                                          |   |             | 2,740     |   |   |   | 322 |   |
| Consumer                                                           |   |             | 1,748     |   |   |   | 883 |   |
| Lease financing                                                    |   |             | 13        |   |   |   | — |   |
| Total loans charged off                                            |   |             | 19,245    |   |   |   | 1,831 |   |
| Recoveries:                                                        |   |             |      |   |   |   |   |   |
| Real estate                                                        |   |             | 138       |   |   |   | 324 |   |
| Commercial and industrial                                          |   |             | 129       |   |   |   | 43 |   |
| Consumer                                                           |   |             | 243       |   |   |   | 239 |   |
| Lease financing                                                    |   |             | —   |   |   |   | 4 |   |
| Total recoveries                                                   |   |             | 510       |   |   |   | 610 |   |
| Net loans charged off                                              |   |             | 18,735    |   |   |   | 1,221 |   |
| Provision for loan losses                                          |   |             | 39,121    |   |   |   | 5,067 |   |
| Allowance, end of period                                           |   | $                | 70,341    |   |   | $ | 31,174 |   |
| Ratio of net charge offs to average loans outstanding (annualized) |   |             | 1.05      | % |   |   | 0.10 | % |
|                                                               |   |             |      |   |   |   |   |   |

----

|                      |   | June 30, 2009 |   |   | December 31, 2008 |   |
|---------------------------|--------|---------------|--------|--------|-------------------|--------|
|                      |   |          |   |   | Percent of        |   |   |   |   |   | Percent of |   |
| (Dollars in thousands)    |   | Amount        |   |   | Allowance         |   |   | Amount |   |   | Allowance |   |
|                      |   |          |   |   |              |   |   |   |   |   |   |   |
| Real estate               |   | $             | 33,519 |   |              |   | 48 | % |   | $ | 22,051 |   |   |   | 44 | % |
| Commercial and industrial |   |          | 29,518 |   |              |   | 42 | % |   |   | 20,898 |   |   |   | 42 | % |
| Consumer                  |   |          | 7,300  |   |              |   | 10 | % |   |   | 6,996 |   |   |   | 14 | % |
| Lease financing           |   |          | 4      |   |              |   | - | % |   |   | 10 |   |   |   | - | % |
| Total                     |   | $             | 70,341 |   |              |   | 100 | % |   | $ | 49,955 |   |   |   | 100 | % |

----

| (Dollars in thousands)                             |   | June 30, 2009 |    |   | December 31, 2008 |   |   | June 30, 2008 |   |
|----------------------------------------------------|--------|---------------|---------|--------|-------------------|--------|--------|---------------|--------|
|                                               |   |          |    |   |              |   |   |          |   |
| Nonaccrual loans                                   |   | $             | 132,598 |   |              | $      | 75,060 |          |   | $ | 36,284 |   |
| Loans 90 days or more past due                     |   |          | 4,090   |   |              |   | 1,849  |          |   |   | 1,676 |   |
| Total nonperforming loans                          |   |          | 136,688 |   |              |   | 76,909 |          |   |   | 37,960 |   |
| Net assets in foreclosure                          |   |          | 2,168   |   |              |   | 1,626  |          |   |   | 1,189 |   |
| Total nonperforming assets                         |   | $             | 138,856 |   |              | $      | 78,535 |          |   | $ | 39,149 |   |
|                                               |   |          |    |   |              |   |   |          |   |   |   |   |
| Allowance for loan losses to nonperforming loans   |   |          | 51.5    | %      |              |   | 65.00  | %             |   |   | 82.1 | % |
| Nonperforming loans to total net loans             |   |          | 4.06    | %      |              |   | 2.12   | %             |   |   | 1.54 | % |
| Allowance for loan and lease losses to total loans |   |          | 2.05    | %      |              |   | 1.36   | %             |   |   | 1.25 | % |
| Nonperforming assets to total assets               |   |          | 2.67    | %      |              |   | 1.43   | %             |   |   | 1.01 | % |

| (Dollars in thousands)                                 |   | June 30, 2009 |    |   | December 31, 2008 |   |   | June 30, 2008 |   |
|--------------------------------------------------------|--------|---------------|---------|--------|-------------------|--------|--------|---------------|--------|
|                                                   |   |          |    |   |              |   |   |          |   |
|  Impaired Loans                                   |   | $             | 151,068 |   |              | $      | 70,173 |          |   | $ | 20,960 |   |
|                                                   |   |          |    |   |              |   |   |          |   |   |   |   |
|  Average year-to-date impaired loans              |   | $             | 80,404  |   |              | $      | 23,469 |          |   | $ | 13,865 |   |
|                                                   |   |          |    |   |              |   |   |          |   |   |   |   |
|  Impaired loans with specific loss allowances     |   | $             | 100,110 |   |              | $      | 38,354 |          |   | $ | 20,960 |   |
|                                                   |   |          |    |   |              |   |   |          |   |   |   |   |
|  Loss allowances reserved on impaired loans       |   | $             | 25,513  |   |              | $      | 8,420  |          |   | $ | 4,606 |   |
|                                                   |   |          |    |   |              |   |   |          |   |   |   |   |
|  Year-to-date income recognized on impaired loans |   | $             | 582     |   |              | $      | 151    |          |   | $ | 42 |   |

----

----

|    (Dollars in thousands)  |   |         |    |   |   |   |   |  For CapitalAdequacy Purposes |   |   | To Be Well CapitalizedUnder Prompt CorrectiveAction Program |   |
|-------------------------------------------|--------|--------------|---------|--------|--------|--------|--------|------------------------------------|--------|--------|-------------------------------------------------------------|--------|
|  As of June 30, 2009                 |   | ActualAmount |    |   | Ratio  |   |   | Amount                             |   |   | Ratio                                                       |   |   | Amount |   |   | Ratio |   |
|                                      |   |         |    |   |   |   |   |                               |   |   |                                                        |   |   |   |   |   |   |   |
| Total Capital (to risk weighted assets):  |   |         |    |   |   |   |   |                               |   |   |                                                        |   |   |   |   |   |   |   |
| Corporation                               |   | $            | 379,697 |   |   |   | 9.39   | %                                  |   | $      | 323,345                                                     |   |   |   | 8.00 | % |   | $ | 404,181 |   |   |   | 10 | % |
| Harleysville National Bank                |   |         | 361,487 |   |   |   | 8.95   | %                                  |   |   | 322,951                                                     |   |   |   | 8.00 | % |   |   | 403,688 |   |   |   | 10 | % |
| Tier 1 Capital (to risk weighted assets): |   |         |    |   |   |   |   |                               |   |   |                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporation                               |   |         | 328,928 |   |   |   | 8.14   | %                                  |   |   | 161,673                                                     |   |   |   | 4.00 | % |   |   | 242,509 |   |   |   | 6 | % |
| Harleysville National Bank                |   |         | 310,779 |   |   |   | 7.70   | %                                  |   |   | 161,475                                                     |   |   |   | 4.00 | % |   |   | 242,213 |   |   |   | 6 | % |
| Tier 1 Capital (to average assets):       |   |         |    |   |   |   |   |                               |   |   |                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporation                               |   |         | 328,928 |   |   |   | 5.91   | %                                  |   |   | 222,593                                                     |   |   |   | 4.00 | % |   |   | 278,241 |   |   |   | 5 | % |
| Harleysville National Bank                |   |         | 310,779 |   |   |   | 5.60   | %                                  |   |   | 221,995                                                     |   |   |   | 4.00 | % |   |   | 277,494 |   |   |   | 5 | % |

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

----

----

----

----

----

| (1)   | On May 12, 2005, the Board of Directors authorized a plan to purchase up to 1,416,712 shares (restated for five percent stock dividend paid on September 15, 2006 and September 15, 2005) or 4.9%, of its outstanding common stock. The Corporation is precluded from purchasing its outstanding common stock under the terms of the merger agreement withFirst Niagara. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | None to report. |
|-----------------|-----------------|

| (b)   | On June 16, 2009, the Corporation amended and restated its Bylaws with regard to the manner shareholders may recommend nominees to the Board of Directors as follows: Article 10, Section 10.1 to increase the number days prior to the anniversary of the record date of the preceding year’s shareholder meeting at which directors were elected that a shareholdermust provide notice to the Corporation in order for a shareholder to nominate a candidate for election to the board of directors from 45 to 60 days and Article 12, Section 12.2 to increase the maximum number of directors in addition to the Chairman of the Board and President of the Corporation on the Executive Committee to up to six directors and to eliminate the restriction that such other directors not be employees of the Corporation. The Corporation’s Amended and Restated Bylaws are incorporated by referenceto Exhibit 3(ii) of the Registrant’s Current Report on Form 8-K, filed with the Commission on June 18, 2009. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

----

| Exhibit No  | Description of Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2.1)       | Purchase Agreement, dated as of November 15, 2005, by and among Harleysville National Bank and Trust Company, Cornerstone Financial Consultants, Ltd., Cornerstone Advisors Asset Management, Inc., Cornerstone Institutional Investors, Inc., Cornerstone Management Resources, Inc., John R. Yaissle, Malcolm L. Cowen, II, and Thomas J. Scalici.(Incorporated by reference to Exhibit 2.1 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2005, filed with the Commission on March 15, 2006.  The schedules and exhibits to the Purchase Agreement are listed at the end of the Purchase Agreement but have been omitted from the exhibit to Form 10-K. The Registrant agrees to supplementally furnish a copy of any omitted schedule or exhibit to the Securities and Exchange Commission upon request.)  |
| (2.2)       | Merger Agreement, dated as of May 15, 2007, by and among Harleysville National Corporation, East Penn Financial Corporation, East Penn Bank and HNC-EPF, LLC, as amended. (Incorporated by reference to Annex A of the Corporation’s Registration Statement No. 333-145820 on Form S-4/A, filed with the Commission on September 27, 2007. Theschedules and exhibits to the Merger Agreement are listed at the end of the Merger Agreement but have been omitted from the Annex to Form S-4. The Registrant agrees to supplementally furnish a copy of any omitted schedule or exhibit to the Securities and Exchange Commission upon request.)                                                                                                                                                                                                          |
| (2.3)            | Agreement for Purchase and Sale of Partnership Interests, dated as of December 27, 2007, by and among each of the applicable entities (“Buyer”) and 2007 PA HOLDINGS, LLC (“HNB”) and PA BRANCH HOLDINGS, LLC, (“Bank Branch”) (HNB and Bank Branch are referred to collectively as “Seller”). (Incorporatedby reference to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007, filed with the Commission on March 14, 2008. The schedules and exhibits to the Agreement for Purchase and Sale of Partnership Interests are listed at the end of the agreement but have been omitted from the Exhibit to Form 10-K. The Registrant agrees to supplementally furnish a copy of any omitted schedule or exhibit to the Securities and Exchange Commission upon request.)         |
| (2.4)       | Merger Agreement, dated as of May 20, 2008, by and among Harleysville National Corporation and Willow Financial Bancorp. (Incorporated by reference to Annex A of the Registrant’s Registration Statement No. 333-152007 on Form S-4, as amended, filed with the Commission on July 31, 2008. The schedules and exhibits to the Merger Agreementare listed at the end of the Merger Agreement but have been omitted from the Annex to Form S-4. The Registrant agrees to supplementally furnish a copy of any omitted schedule or exhibit to the Securities and Exchange Commission upon request.)                                                                                                                                                                                                                                                       |
| (3.1)       | Harleysville National Corporation Amended and Restated Articles of Incorporation. (Incorporated by reference to Exhibit 3.1 to the Corporation’s Current Report on Form 8-K, filed with the Commission on May 13, 2009.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (3.2)       | Harleysville National Corporation Amended and Restated By-laws. (Incorporated by reference to Exhibit 3(ii) to the Corporation’s Current Report on Form 8-K, filed with the Commission on June 18, 2009.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (10.1)      | Harleysville National Corporation 1993 Stock Incentive Plan.** (Incorporated by reference to Exhibit 4.3 of Registrant’s Registration Statement No. 33-69784 on Form S-8, filed with the Commission on October 1, 1993.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (10.2)      | Harleysville National Corporation Stock Bonus Plan.*** (Incorporated by reference to Exhibit 99A of Registrant’s Registration Statement No. 333-17813 on Form S-8, filed with the Commission on December 13, 1996.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (10.3)      | Supplemental Executive Retirement Plan.* (Incorporated by reference to Exhibit 10.3 of Registrant’s Annual Report in Form 10-K for the year ended December 31, 1997, filed with the Commission on March 27, 1998.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10.4)      | Walter E. Daller, Jr., Chairman and former President and Chief Executive Officer’s Employment Agreement dated October 26, 1998.* (Incorporated by reference to Registrant’s Current Report on Form 8-K, filed with the Commission on March 25, 1999.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (10.5)      | Consulting Agreement and General Release dated November 12, 2004 between Walter E. Daller, Jr., Harleysville National Corporation and Harleysville National Bank and Trust Company.* (Incorporated by reference to Registrant’s Current Report on Form 8-K, filed with the Commission on November 16, 2004.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (10.6)      | Amendment to Supplemental Executive Retirement Benefit Agreement dated March 14, 2005 by and among Harleysville Management Services, LLC and Walter E. Daller, Jr.*  (Incorporated by reference to Registrant’s Current Report on Form 8-K, filed with the Commission on March 14, 2005.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (10.7)      | Employment Agreement dated October 26, 1998 by and among Harleysville National Corporation, Harleysville National Bank and Trust Company and Demetra M. Takes, President and Chief Executive Officer of Harleysville National Bank and Trust Company.* (Incorporated by reference to Registrant’s Current Report on Form 8-K, filed withthe Commission on March 25, 1999.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (10.8)      | Amendment to Supplemental Executive Retirement Benefit Agreement dated March 14, 2005 by and among Harleysville Management Services, LLC and Demetra M. Takes, President and Chief Executive Officer of Harleysville National Bank and Trust Company.*  (Incorporated by reference to Registrant’s Current Report on Form 8-K, filedwith the Commission on March 14, 2005.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

----

| Exhibit No  | Description of Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (10.9)      | Harleysville National Corporation 1998 Stock Incentive Plan.** (Incorporated by reference to Registrant’s Registration Statement No. 333-79971 on Form S-8, filed with the Commission on June 4, 1999.)                                                                                                                                                                                                                                                            |
| (10.10)     | Harleysville National Corporation 1998 Independent Directors Stock Option Plan, as amended and restated effective February 8, 2001.** (Incorporated by reference to Appendix “A” of Registrant’s Definitive Proxy Statement, filed with the Commission on March 9, 2001.)                                                                                                                                                                                        |
| (10.11)     | Supplemental Executive Retirement Benefit Agreement dated February 23, 2004 between Michael B. High,  former Executive Vice President and Chief Financial Officer, and Harleysville Management Services, LLC.* (Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on May 10,2004.)                                                                                                                 |
| (10.12)     | Employment Agreement effective April 1, 2005 between Michael B. High, former Executive Vice President and Chief Operating Officer of the Corporation, and Harleysville Management Services, LLC.* (Incorporated by reference to Registrant’s Current Report on Form 8-K, filed with the Commission on November 16, 2004.)                                                                                                                                |
| (10.13)     | Amendment to Supplemental Executive Retirement Benefit Agreement dated March 14, 2005 by and among Harleysville Management Services, LLC and Michael B. High, former Executive Vice President and Chief Operating Officer of the Corporation.*  (Incorporated by reference to Registrant’s Current Report on Form 8-K, filed with theCommission on March 14, 2005.)                                                                                                |
| (10.14)     | Complete Settlement Agreement and General Release effective October 17, 2008 by and between Michael B. High, former Executive Vice President and Chief Operating Officer of the Corporation, and Harleysville National Corporation, Harleysville National Bank and Trust Company and Harleysville Management Services, LLC .* (Incorporated by referenceto Registrant’s Current Report on Form 8-K, filed with the Commission on October 23, 2008.)                          |
| (10.15)     | Harleysville National Corporation 2004 Omnibus Stock Incentive Plan, as amended and restated effective November 9, 2006.** (Incorporated by reference to Registrant’s Current Report on Form 8-K, filed with the Commission on November 15, 2006).                                                                                                                                                                                                                           |
| (10.16)     | Employment Agreement dated August 23, 2004 between James F. McGowan, Jr., Executive Vice President & Chief Credit Officer and Harleysville Management Services, LLC.* (Incorporated by reference to Registrant’s Current Report on Form 8-K, filed with the Commission on August 25, 2004.                                                                                                                                                 |
| (10.17)     | Supplemental Executive Retirement Benefit Agreement dated August 23, 2004 between James F. McGowan, Jr., Executive Vice President & Chief Credit Officer, and Harleysville Management Services, LLC.* (Incorporated by reference to Registrant’s Current Report on Form 8-K, filed with the Commission on August 25,2004.)                                                                                                                 |
| (10.18)     | Amendment to Supplemental Executive Retirement Benefit Agreement dated March 14, 2005 by and among Harleysville Management Services, LLC and James F. McGowan, Jr., Executive Vice President & Chief Credit Officer.*  (Incorporated by reference to Registrant’s Current Report on Form 8-K, filed with the Commission on March14, 2005.)                                                                                                                     |
| (10.19)     | Employment Agreement dated September 27, 2004 between John Eisele, former Executive Vice President & President of Millennium Wealth Management and Private Banking, and Harleysville Management Services, LLC.* (Incorporated by reference to Registrant’s Current Report on Form 8-K, filed with the Commission on September 29,2004.)                                                                                                              |
| (10.20)     | Supplemental Executive Retirement Benefit Agreement dated September 27, 2004 between John Eisele, former Executive Vice President & President of Millennium Wealth Management and Private Banking, and Harleysville Management Services, LLC.* (Incorporated by reference to Registrant’s Current Report on Form 8-K, filedwith the Commission on September 29, 2004.)                                                                               |
| (10.21)     | Amendment to Supplemental Executive Retirement Benefit Agreement dated March 14, 2005 by and among Harleysville Management Services, LLC and John Eisele, former Executive Vice President & President of Millennium Wealth Management and Private Banking.*  (Incorporated by reference to Registrant’s Current Report on Form 8-K,filed with the Commission on March 14, 2005.)                                                                               |
| (10.22)     | Separation Agreement and Mutual Release dated June 15, 2007 and effective July 19, 2007 between John Eisele, former Executive Vice President & President of Millennium Wealth Management and Private Banking, Harleysville Management Services, LLC., Harleysville National Bank and Trust Company and Harleysville National Corporation.* (Incorporatedby reference to Registrant’s Current Report on Form 8-K, filed with the Commission on July 19, 2007.)  |
| (10.23)     | Employment Agreement effective January 1, 2005 between Gregg J. Wagner, the former President and Chief Executive Officer of the Corporation, and Harleysville Management Services, LLC.* (Incorporated by reference to Registrant’s Current Report on Form 8-K, filed with the Commission on November 16, 2004.)                                                                                                                                    |
| (10.24)     | Amendment to Supplemental Executive Retirement Benefit Agreement dated March 14, 2005 by and among Harleysville Management Services, LLC and Gregg J. Wagner, the former President and Chief Executive Officer of the Corporation.*  (Incorporated by reference to Registrant’s Current Report on Form 8-K, filed with the Commissionon March 14, 2005.)                                                                                                           |
| (10.25)     | Complete Settlement Agreement and General Release dated November 29, 2006 and effective December 8, 2006 between Gregg J. Wagner and Harleysville National Corporation, Harleysville National Bank and Trust Company and Harleysville Management Services, LLC .* (Incorporated by reference to Registrant’s Current Report on Form 8-K, filedwith the Commission on December 13, 2006.)                                                                                     |

----

| Exhibit No  | Description of Exhibits                                                                                                                                                                                                                                                                                                                                                                                             |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (10.26)     | Employment Agreement dated May 18, 2005, between George S. Rapp, Senior Vice President and Chief Financial Officer, and Harleysville Management Services, LLC.* (Incorporated by reference to Registrant’s Current Report on Form 8-K, filed with the Commission on May 20, 2005.)                                                                                                                            |
| (10.27)     | Amended and Restated Declaration of Trust for HNC Statutory Trust III by and among Wilmington Trust Company, as Institutional Trustee and Delaware Trustee, Harleysville National Corporation, as Sponsor, and the Administrators named therein, dated as of September 28, 2005. (Incorporated by reference to Registrant’s Quarterly Report onForm 10-Q/A, filed with the Commission on November, 9, 2005.)  |
| (10.28)     | Indenture between Harleysville National Corporation, as Issuer, and Wilmington Trust Company, as Trustee, for Fixed/Floating Rate Junior Subordinated Debt Securities, dated as of September 28, 2005. (Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q/A, filed with the Commission on November, 9, 2005.)                                                                           |
| (10.29)     | Guarantee Agreement between Harleysville National Corporation and Wilmington Trust Company, dated as of September 28, 2005. (Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q/A, filed with the Commission on November, 9, 2005.)                                                                                                                                                      |
| (10.30)     | Employment Agreement effective July 12, 2006 between Lewis C. Cyr, Chief Lending Officer of the Corporation, and Harleysville Management Services, LLC.* (Incorporated by reference to Registrant’s Current Report on Form 8-K, filed with the Commission on July 12, 2006.)                                                                                                                        |
| (10.31)     | Employment Agreement dated July 12, 2007 between Paul D. Geraghty, President and Chief Executive Officer of the Corporation and Harleysville Management Services, LLC.* (Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on July 12, 2007.)                                                                                                                    |
| (10.32)     | Amended and Restated Declaration of Trust for HNC Statutory Trust IV by and among Wilmington Trust Company, as Institutional Trustee and Delaware Trustee, Harleysville National Corporation, as Depositor, and the Administrators named therein, dated as of August 22, 2007. (Incorporated by reference to Registrant’s Quarterly Report on Form10-Q, filed with the Commission on November 8, 2007.)       |
| (10.33)     | Indenture between Harleysville National Corporation, as Issuer, and Wilmington Trust Company, as Trustee, for Fixed/Floating Rate Junior Subordinated Debt Securities, dated as of August 22, 2007. (Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on November 8, 2007.)                                                                                 |
| (10.34)     | Guarantee Agreement between Harleysville National Corporation and Wilmington Trust Company, dated as of August 22, 2007. (Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on November 8, 2007.)                                                                                                                                                            |
| (10.35)     | Employment Agreement dated November 16, 2007 between Brent L. Peters, Executive Vice President and President of the East Penn Bank Division of Harleysville National Bank and Trust Company, and Harleysville Management Services, LLC.* (Incorporated by reference to Registrant’s Annual Report on Form 10-K for the year ended December 31,2007, filed with the Commission on March 14, 2008.)             |
| (10.36)     | Employment Agreement dated April 17, 2008 between Joseph D. Blair, Executive Vice President and President of the Millennium Wealth Management Division of Harleysville National Bank and Trust Company, and Harleysville Management Services, LLC.*  (Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q filed withthe Commission on August 8, 2008.)                          |
| (10.37)     | Employment Agreement dated May 20, 2008 and effective December 5, 2008 between Donna M. Coughey, Executive Vice President of the Corporation and the Bank, and Harleysville Management Services, LLC.* (Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on December 5, 2008.)                                                                                  |
| (10.38)     | Willow Financial Bancorp, Inc. Amended and Restated 2002 Stock Option Plan. (Incorporated by reference to Exhibit 10.1 of Registrant’s Registration Statement No. 333-156956 on Form S-8, filed with the Commission on January 27, 2009.)                                                                                                                                                                     |
| (10.39)     | Willow Financial Bancorp, Inc. Amended and Restated 1999 Stock Option Plan. (Incorporated by reference to Exhibit 10.2 of Registrant’s Registration Statement No. 333-156956 on Form S-8, filed with the Commission on January 27, 2009.)                                                                                                                                                                     |
| (10.40)     | Chester Valley Bancorp, Inc. 1997 Stock Option Plan, as amended. (Incorporated by reference to Exhibit 10.3 of Registrant’s Registration Statement No. 333-156956 on Form S-8, filed with the Commission on January 27, 2009.)                                                                                                                                                                                |
| (10.41)     | Harleysville National Corporation Amended and Restated Dividend Reinvestment and Stock Purchase Plan (DRIP) effective April 6, 2009. (Incorporated by reference to Exhibit 99.1 of Registrant’s Registration Statement No. 333-158420 on Form S-3, filed with the Commission on April 6, 2009.) On April 28, 2009, the Board ofDirectors suspended the DRIP until further notice.              |

----

| Exhibit No  | Description of Exhibits                                                                                                                                                                         |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (11)        | Computation of Earnings per Common Share, incorporated by reference to Part II, Item 8, Footnote 9, “Earnings Per Share,” of this Report on Form 10-Q.          |
| (31.1)      | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.                                                               |
| (31.2)      | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.                                                               |
| (32.1)      | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.  |
| (32.2)      | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.  |

| * | Management contract or compensatory plan arrangement. |
|---|-------------------------------------------------------|

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

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

----