| 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 September 30, 2009 (unaudited) and December 31,      2008                                                                                                                                 |  3  |
|                                                                                                                                                                                                                          |     |
| Consolidated      Statements of Operations for the Three and Nine Months Ended September 30,      2009 and 2008 (unaudited)                                                                                                   |  4  |
|                                                                                                                                                                                                                          |     |
| Consolidated      Statements of Shareholders’ Equity for the Nine Months Ended September 30,      2009 and 2008 (unaudited)                                                                                             |  5  |
|                                                                                                                                                                                                                          |     |
| Consolidated      Statements of Cash Flows for the Nine Months Ended September 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 |  33 |
|                                                                                                                                                                                                                          |     |
| Item      3.                   Quantitative      and Qualitative Disclosures about Market Risk                                 |  49 |
|                                                                                                                                                                                                                          |     |
| Item      4.                   Controls      and Procedures                                                                    |  50 |
|                                                                                                                                                                                                                          |     |
| Part      II.            Other      Information                                                                                                                   |  51 |
|                                                                                                                                                                                                                          |     |
| Item      1.                   Legal      Proceedings                                                                          |  51 |
|                                                                                                                                                                                                                          |     |
| Item      1A.                   Risk      Factors                                                                              |  51 |
|                                                                                                                                                                                                                          |     |
| Item      2.                   Unregistered      Sales of Equity Securities and Use of Proceeds                                |  55 |
|                                                                                                                                                                                                                          |     |
| Item      3.                   Defaults      Upon Senior Securities                                                            |  55 |
|                                                                                                                                                                                                                          |     |
| Item      4.                   Submission      of Matters to a Vote of Security Holders                                        |  55 |
|                                                                                                                                                                                                                          |     |
| Item      5.                   Other      Information                                                                          |  55 |
|                                                                                                                                                                                                                          |     |
| Item      6.                   Exhibits                                                                                        |  56 |
|                                                                                                                                                                                                                          |     |
| Signatures                                                                                                                                                                                                                    |  57 |

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| PART      I. FINANCIAL INFORMATION                      |
|---------------------------------------------------------|
| ITEM      1. FINANCIAL STATEMENTS                       |
| HARLEYSVILLE      NATIONAL CORPORATION AND SUBSIDIARIES |
| CONSOLIDATED      BALANCE SHEETS                        |
|                                                    |

| (Dollars      in thousands)                                                                                                                                                           |   | September      30, 2009 |          | December      31, 2008 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------------|------------------------|
|                                                                                                                                                                                  |   | (Unaudited)             |          |                   |
| Assets                                                                                                                                                                                |   |                    |          |                   |
| Cash      and due from banks                                                                                                                                                          |   | $                       | 55,070        |                   | $ | 75,305 |   |
| Interest-bearing      deposits in banks                                                                                                                                               |   |                    | 538,189       |                   |   | 27,221 |   |
| Total      cash and cash equivalents                                                                                                                                                  |   |                    | 593,259       |                   |   | 102,526 |   |
| Residential      mortgage loans held for sale (at fair value)                                                                                                                         |   |                    | 41,672        |                   |   | 17,165 |   |
| Investment      securities available for sale (amortized cost, $1,034,249 and      $1,186,586, respectively)                                                                          |   |                    | 1,006,898     |                   |   | 1,141,948 |   |
| Investment      securities held to maturity (fair value $32,009 and $50,059,      respectively)                                                                                       |   |                    | 32,059        |                   |   | 50,434 |   |
| Federal      Home Loan Bank stock, Federal Reserve Bank stock and other      investments                                                                                              |   |                    | 43,075        |                   |   | 39,279 |   |
| Loans      and leases                                                                                                                                                                 |   |                    | 3,208,423     |                   |   | 3,668,079 |   |
| Less:      Allowance for loan losses                                                                                                                                                  |   |                    | (77,276       | )                      |   | (49,955 | ) |
| Net      loans                                                                                                                                                                        |   |                    | 3,131,147     |                   |   | 3,618,124 |   |
| Premises      and equipment, net                                                                                                                                                      |   |                    | 48,682        |                   |   | 50,605 |   |
| Accrued      interest receivable                                                                                                                                                      |   |                    | 17,036        |                   |   | 21,120 |   |
| Goodwill                                                                                                                                                                              |   |                    | 22,750        |                   |   | 240,701 |   |
| Intangible      assets, net                                                                                                                                                           |   |                    | 22,755        |                   |   | 27,807 |   |
| Bank-owned      life insurance                                                                                                                                                        |   |                    | 89,420        |                   |   | 87,081 |   |
| Other      assets                                                                                                                                                                     |   |                    | 114,606       |                   |   | 93,719 |   |
| Total      assets                                                                                                                                                                     |   | $                       | 5,163,359     |                   | $ | 5,490,509 |   |
| Liabilities      and Shareholders' Equity                                                                                                                                             |   |                    |          |                   |   |   |   |   |
| Deposits:                                                                                                                                                                             |   |                    |          |                   |   |   |   |   |
| Noninterest-bearing                                                                                                                                                                   |   | $                       | 495,644       |                   | $ | 479,469 |   |
| Interest-bearing:                                                                                                                                                                     |   |                    |          |                   |   |   |   |   |
| Checking                                                                                                                                                                              |   |                    | 629,378       |                   |   | 556,855 |   |
| Money      market                                                                                                                                                                     |   |                    | 895,463       |                   |   | 1,042,302 |   |
| Savings                                                                                                                                                                               |   |                    | 309,586       |                   |   | 270,885 |   |
| Time      deposits                                                                                                                                                                    |   |                    | 1,611,837     |                   |   | 1,588,921 |   |
| Total      deposits                                                                                                                                                                   |   |                    | 3,941,908     |                   |   | 3,938,432 |   |
| Federal      funds purchased and short-term securities sold under agreements to      repurchase                                                                                       |   |                    | 88,277        |                   |   | 136,113 |   |
| Other      short-term borrowings                                                                                                                                                      |   |                    | 1,451         |                   |   | 984 |   |
| Long-term      borrowings                                                                                                                                                             |   |                    | 691,130       |                   |   | 759,658 |   |
| Accrued      interest payable                                                                                                                                                         |   |                    | 36,953        |                   |   | 34,495 |   |
| Subordinated      debt                                                                                                                                                                |   |                    | 93,806        |                   |   | 93,743 |   |
| Other      liabilities                                                                                                                                                                |   |                    | 49,178        |                   |   | 52,377 |   |
| Total      liabilities                                                                                                                                                                |   |                    | 4,902,703     |                   |   | 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      43,123,629 and 43,022,387 shares at September 30, 2009 and December 31,      2008, respectively |   |                    |   43,124 |                   |   |   43,022 |   |
| Additional      paid in capital                                                                                                                                                       |   |                    | 379,990       |                   |   | 379,551 |   |
| (Accumulated      deficit) retained earnings                                                                                                                                          |   |                    | (144,674      | )                      |   | 82,295 |   |
| Accumulated      other comprehensive loss                                                                                                                                             |   |                    | (17,778       | )                      |   | (29,017 | ) |
| Treasury      stock, at cost: 700 and 76,635 shares at September 30, 2009 and December      31, 2008, respectively                                                                    |   |                    | (6            | )                      |   | (1,144 | ) |
| Total      shareholders' equity                                                                                                                                                       |   |                    | 260,656       |                   |   | 474,707 |   |
| Total      liabilities and shareholders' equity                                                                                                                                       |   | $                       | 5,163,359     |                   | $ | 5,490,509 |   |

----

| HARLEYSVILLE      NATIONAL CORPORATION AND SUBSIDIARIES                             |   |
|-------------------------------------------------------------------------------------|--------|
| CONSOLIDATED      STATEMENTS OF OPERATIONS(Unaudited)                               |   |
|                                                                                |   |   |   |   |   |   |
|                                                                                |   | Three      Months Ended |   |   | Nine      Months Ended |   |
|                                                                                |   | September      30, |   |   | September      30, |   |
| (Dollars      in thousands, except per share information)                           |   | 2009 |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
| Interest      Income:                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans      and leases, including fees                                               |   | $ | 42,765 |   |   | $ | 37,106 |   |   | $ | 136,954 |   |   | $ | 112,747 |   |
| Investment      securities:                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                             |   |   | 8,761 |   |   |   | 9,518 |   |   |   | 31,000 |   |   |   | 28,894 |   |
| Exempt from federal      taxes                                                      |   |   | 3,198 |   |   |   | 3,086 |   |   |   | 10,087 |   |   |   | 9,025 |   |
| Federal      funds sold and securities purchased under agreements to    resell      |   |   | - |   |   |   | 212 |   |   |   | - |   |   |   | 963 |   |
| Deposits      in banks                                                              |   |   | 281 |   |   |   | 20 |   |   |   | 647 |   |   |   | 82 |   |
| Total interest    income                                                            |   |   | 55,005 |   |   |   | 49,942 |   |   |   | 178,688 |   |   |   | 151,711 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Expense:                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings      and money market deposits                                              |   |   | 4,372 |   |   |   | 5,780 |   |   |   | 15,878 |   |   |   | 19,536 |   |
| Time      deposits                                                                  |   |   | 12,189 |   |   |   | 12,976 |   |   |   | 40,818 |   |   |   | 40,414 |   |
| Short-term      borrowings                                                          |   |   | 108 |   |   |   | 551 |   |   |   | 361 |   |   |   | 1,847 |   |
| Long-term      borrowings                                                           |   |   | 6,898 |   |   |   | 5,338 |   |   |   | 21,436 |   |   |   | 15,221 |   |
| Total interest      expense                                                         |   |   | 23,567 |   |   |   | 24,645 |   |   |   | 78,493 |   |   |   | 77,018 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      interest income                                                            |   |   | 31,438 |   |   |   | 25,297 |   |   |   | 100,195 |   |   |   | 74,693 |   |
| Provision      for loan losses                                                      |   |   | 14,750 |   |   |   | 2,580 |   |   |   | 53,871 |   |   |   | 7,647 |   |
| Net      interest income after provision for loan losses                            |   |   | 16,688 |   |   |   | 22,717 |   |   |   | 46,324 |   |   |   | 67,046 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest      Income:                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service      charges                                                                |   |   | 4,361 |   |   |   | 3,424 |   |   |   | 12,859 |   |   |   | 9,849 |   |
| Gain      on sales of investment securities, net                                    |   |   | 1,383 |   |   |   | - |   |   |   | 8,280 |   |   |   | 225 |   |
| Other-than-temporary impairment      (OTTI) losses on available for sale securities |   |   | (4,257 | ) |   |   | - |   |   |   | (13,562 | ) |   |   | - |   |
| Portion of OTTI losses recognized      in other comprehensive loss (before taxes)   |   |   | (393 | ) |   |   | - |   |   |   | 7,038 |   |   |   | - |   |
| Net OTTI losses recognized in      operations on available for sale securities      |   |   | (4,650 | ) |   |   | - |   |   |   | (6,524 | ) |   |   | - |   |
| Gain      on mortgage banking sales, net                                            |   |   | 2,352 |   |   |   | (5 | ) |   |   | 6,753 |   |   |   | 420 |   |
| Wealth      management                                                              |   |   | 4,656 |   |   |   | 3,862 |   |   |   | 13,953 |   |   |   | 12,756 |   |
| Bank-owned      life insurance                                                      |   |   | 789 |   |   |   | 706 |   |   |   | 2,337 |   |   |   | 2,047 |   |
| Other      income                                                                   |   |   | 3,384 |   |   |   | 2,458 |   |   |   | 12,487 |   |   |   | 7,576 |   |
| Total noninterest      income                                                       |   |   | 12,275 |   |   |   | 10,445 |   |   |   | 50,145 |   |   |   | 32,873 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest      Expense:                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries,      wages and employee benefits                                          |   |   | 17,561 |   |   |   | 13,539 |   |   |   | 55,831 |   |   |   | 41,599 |   |
| Occupancy                                                                           |   |   | 3,752 |   |   |   | 2,412 |   |   |   | 11,667 |   |   |   | 7,438 |   |
| Furniture      and equipment                                                        |   |   | 1,286 |   |   |   | 1,074 |   |   |   | 4,377 |   |   |   | 3,251 |   |
| Professional      fees                                                              |   |   | 4,491 |   |   |   | 1,303 |   |   |   | 7,887 |   |   |   | 3,418 |   |
| Intangibles      expense                                                            |   |   | 1,669 |   |   |   | 678 |   |   |   | 3,313 |   |   |   | 1,997 |   |
| FDIC      deposit insurance                                                         |   |   | 3,227 |   |   |   | 551 |   |   |   | 11,070 |   |   |   | 918 |   |
| Goodwill      impairment                                                            |   |   | - |   |   |   | - |   |   |   | 214,536 |   |   |   | - |   |
| Other      expense                                                                  |   |   | 8,235 |   |   |   | 5,596 |   |   |   | 22,911 |   |   |   | 14,708 |   |
| Total noninterest      expense                                                      |   |   | 40,221 |   |   |   | 25,153 |   |   |   | 331,592 |   |   |   | 73,329 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss)      income before income taxes                                              |   |   | (11,258 | ) |   |   | 8,009 |   |   |   | (235,123 | ) |   |   | 26,590 |   |
| Income      tax (benefit) expense                                                   |   |   | (6,889 | ) |   |   | 1,370 |   |   |   | (12,846 | ) |   |   | 5,320 |   |
| Net      (loss) income                                                              |   | $ | (4,369 | ) |   | $ | 6,639 |   |   | $ | (222,277 | ) |   | $ | 21,270 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      (loss) income per share information:                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                               |   | $ | (0.10 | ) |   | $ | 0.21 |   |   | $ | (5.16 | ) |   | $ | 0.68 |   |
| Diluted                                                                             |   | $ | (0.10 | ) |   | $ | 0.21 |   |   | $ | (5.16 | ) |   | $ | 0.67 |   |
| Cash      dividends per share                                                       |   | $ | - |   |   | $ | 0.20 |   |   | $ | 0.11 |   |   | $ | 0.60 |   |
| Weighted      average number of common shares:                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                               |   |   | 43,102,844 |   |   |   | 31,385,257 |   |   |   | 43,058,489 |   |   |   | 31,363,779 |   |
| Diluted                                                                             |   |   | 43,102,844 |   |   |   | 31,551,026 |   |   |   | 43,058,489 |   |   |   | 31,531,942 |   |

----

| Nine Months Ended September 30,      2009                                                  |   |
|--------------------------------------------------------------------------------------------|--------|
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                       |   | Common      Stock |   |   | Treasury      Stock |   |   |   |   |   |  Additional |   |   | Retained      Earnings |   |   | AccumulatedOther |   |   |   |   |   |   |   |   |   |   |
|                                                                                       |   | Number      of |   |   | Number      of |   |   | Par |   |   | Paid |   |   | (Accumulated |   |   | Comprehensive |   |   | Treasury |   |   |   |   |   | Comprehensive |   |
|                                                                                       |   | Shares |   |   | Shares |   |   | Value |   |   | In      Capital |   |   | Deficit) |   |   | (Loss)      Income |   |   | Stock |   |   | Total |   |   | (Loss)      Income |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 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                       |   |   | 37 |   |   |   | 58 |   |   |   | 37 |   |   |   | (2 | ) |   |   | - |   |   |   | - |   |   |   | 745 |   |   |   | 780 |   |   |   |   |
| 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                                                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 231 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 231 |   |   |   |   |
| Net      loss                                                                              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (222,277 | ) |   |   | - |   |   |   | - |   |   |   | (222,277 | ) |   | $ | (222,277 | ) |
| Other      comprehensive income, net of reclassifications and tax                          |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 11,239 |   |   |   | - |   |   |   | 11,239 |   |   |   | 11,239 |   |
| Cash      dividends                                                                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (4,692 | ) |   |   | - |   |   |   | - |   |   |   | (4,692 | ) |   |   |   |   |
| Comprehensive      loss                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | (211,038 | ) |
| Balance,      September 30, 2009                                                           |   |   | 43,124 |   |   |   | (1 | ) |   | $ | 43,124 |   |   | $ | 379,990 |   |   | $ | (144,674 | ) |   | $ | (17,778 | ) |   | $ | (6 | ) |   | $ | 260,656 |   |   |   |   |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| Nine Months Ended September 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 |   |   | - |   |   |   | 88 |   |   |   | - |   |   |   | (550 | ) |   |   | - |   |   |   | - |   |   |   | 1,559 |   |   |   | 1,009 |   |   |   |   |
| Issuance      of stock awards                                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2 |   |   |   | 2 |   |   |   |   |
| Stock      based compensation expense                                |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 125 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 125 |   |   |   |   |
| Net      income                                                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 21,270 |   |   |   | - |   |   |   | - |   |   |   | 21,270 |   |   | $ | 21,270 |   |
| Other      comprehensive loss, net of reclassifications and tax      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (31,903 | ) |   |   | - |   |   |   | (31,903 | ) |   |   | (31,903 | ) |
| Cash      dividends                                                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (18,819 | ) |   |   | - |   |   |   | - |   |   |   | (18,819 | ) |   |   |   |   |
| Comprehensive      loss                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | (10,633 | ) |
| Balance,      September 30, 2008                                     |   |   | 31,507 |   |   |   | (86 | ) |   | $ | 31,507 |   |   | $ | 230,705 |   |   | $ | 84,762 |   |   | $ | (34,469 | ) |   | $ | (1,511 | ) |   | $ | 310,994 |   |   |   |   |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See      accompanying notes to consolidated financial statements.    |   |

----

| HARLEYSVILLE      NATIONAL CORPORATION AND SUBSIDIARIES                                                          |   |
|------------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED      STATEMENTS OF CASH FLOWS                                                                       |   |
| (Unaudited)                                                                                                      |   |
|                                                                                                             |   | Nine      Months Ended |   |
| (Dollars      in thousands)                                                                                      |   | September      30, |   |
|                                                                                                             |   | 2009 |   |   | 2008 |   |
| Operating      Activities:                                                                                       |   |   |   |   |   |   |
| Net (loss) income                                                                                                |   | $ | (222,277 | ) |   | $ | 21,270 |   |
| Adjustments to reconcile net      (loss) income to net cash provided by operatingactivities:                     |   |   |   |   |   |   |   |   |
| Provision for loan      losses                                                                                   |   |   | 53,871 |   |   |   | 7,647 |   |
| Depreciation                                                                                                     |   |   | 4,802 |   |   |   | 3,074 |   |
| Goodwillimpairment                                                                                               |   |   | 214,536 |   |   |   | ― |   |
| Intangiblesexpense                                                                                               |   |   | 3,313 |   |   |   | 1,997 |   |
| Net amortization of      discounts/premiums on investments and borrowings                                        |   |   | (2,815 | ) |   |   | 782 |   |
| Deferred income tax      benefit                                                                                 |   |   | (12,049 | ) |   |   | (3,327 | ) |
| Gain on sales of investment      securities, net                                                                 |   |   | (8,280 | ) |   |   | (225 | ) |
| Other-than-temporary impairment on      investments                                                              |   |   | 6,524 |   |   |   | ― |   |
| Gain on mortgage banking sales,      net                                                                         |   |   | (6,753 | ) |   |   | (420 | ) |
| Originations of loans held for      sale                                                                         |   |   | (487,888 | ) |   |   | (53,557 | ) |
| Proceeds from sale of loans      originated for sale                                                             |   |   | 470,134 |   |   |   | 53,896 |   |
| Bank-owned life insurance      income                                                                            |   |   | (2,337 | ) |   |   | (2,047 | ) |
| Stock based compensation      expense                                                                            |   |   | 231 |   |   |   | 125 |   |
| Net decrease in accrued interest      receivable                                                                 |   |   | 4,084 |   |   |   | 427 |   |
| Net increase in accrued interest      payable                                                                    |   |   | 2,458 |   |   |   | 6,252 |   |
| Net increase in other      assets                                                                                |   |   | (10,004 | ) |   |   | (2,121 | ) |
| Net decrease in other      liabilities                                                                           |   |   | (1,882 | ) |   |   | (2,401 | ) |
| Other, net                                                                                                       |   |   | (277 | ) |   |   | 55 |   |
| Net cash provided by operating      activities                                                                   |   |   | 5,391 |   |   |   | 31,427 |   |
| Investing      Activities:                                                                                       |   |   |   |   |   |   |   |   |
| Proceeds from sales of investment      securities available for sale                                             |   |   | 379,625 |   |   |   | 115,331 |   |
| Proceeds from maturity or calls of      investment securities held to maturity                                   |   |   | 18,546 |   |   |   | 4,300 |   |
| Proceeds from maturity or calls of      investment securities available for sale                                 |   |   | 184,246 |   |   |   | 129,703 |   |
| Proceeds, redemption Federal Home      Bank stock and reduction in other investments                             |   |   | 1,458 |   |   |   | 5,504 |   |
| Purchases of investment securities      available for sale                                                       |   |   | (410,830 | ) |   |   | (296,542 | ) |
| Purchases of Federal Home Bank      stock, Federal Reserve Bank stock and other investments                      |   |   | (5,214 | ) |   |   | (8,549 | ) |
| Proceeds from sale of indirect and      residential loans                                                        |   |   | 142,351 |   |   |   | ― |   |
| Other net decrease (increase) in      loans                                                                      |   |   | 289,491 |   |   |   | (83,436 | ) |
| Net cash paid due to acquisitions,      net of cash acquired                                                     |   |   | (877 | ) |   |   | (1,200 | ) |
| Purchases of premises and      equipment                                                                         |   |   | (3,583 | ) |   |   | (6,563 | ) |
| Proceeds from sales of premises      and equipment                                                               |   |   | 15 |   |   |   | 675 |   |
| Proceeds from sales of other real      estate                                                                    |   |   | 2,062 |   |   |   | 685 |   |
| Net cash provided by (used in)      investing activities                                                         |   |   | 597,290 |   |   |   | (140,093 | ) |
| Financing      Activities:                                                                                       |   |   |   |   |   |   |   |   |
| Net increase in      deposits                                                                                    |   |   | 3,476 |   |   |   | 33,218 |   |
| Decrease in federal funds      purchased and short-term securities sold under agreements to      repurchase      |   |   | (47,836 | ) |   |   | (7,450 | ) |
| Increase (decrease) in other      short-term borrowings                                                          |   |   | 467 |   |   |   | (852 | ) |
| Advances of long-term      borrowings                                                                            |   |   | ― |   |   |   | 80,000 |   |
| Repayments of long-term      borrowings                                                                          |   |   | (64,811 | ) |   |   | (33,000 | ) |
| Cash dividends                                                                                                   |   |   | (4,692 | ) |   |   | (18,819 | ) |
|     Proceeds      from the exercise of stock options                                         |   |   | 780 |   |   |   | 847 |   |
|          Proceeds from issuance of stock under dividend reinvestment and stock      purchase plan |   |   | 668 |   |   |   | ― |   |
|          Excess tax benefits from stock based compensation                                        |   |   | ― |   |   |   | 155 |   |
|              Net cash (used in) provided by financing activities              |   |   | (111,948 | ) |   |   | 54,099 |   |
| Net      increase (decrease) in cash and cash equivalents                                                        |   |   | 490,733 |   |   |   | (54,567 | ) |
| Cash      and cash equivalents at beginning of period                                                            |   |   | 102,526 |   |   |   | 209,403 |   |
| Cash      and cash equivalents at end of the period                                                              |   | $ | 593,259 |   |   | $ | 154,836 |   |
| Cash paid during the period      for:                                                                            |   |   |   |   |   |   |   |   |
| Interest                                                                                                         |   | $ | 80,369 |   |   | $ | 71,248 |   |
| Income taxes                                                                                                     |   | $ | 2,058 |   |   | $ | 16,367 |   |
| Supplemental disclosure of noncash      investing and financing activities:                                      |   |   |   |   |   |   |   |   |
| Transfer of assets from loans to      net assets in foreclosure                                                  |   | $ | 1,689 |   |   | $ | 1,882 |   |
| See      accompanying notes to consolidated financial statements.                                                |   |

----

----

----

|                                                         |   | Three      months ended |   |   | Nine      months ended |   |
|--------------------------------------------------------------|--------|-------------------------|--------|--------|------------------------|--------|
|  (Dollars      in thousands, except for per share data) |   | September      30, 2008 |   |
|                                                         |   |                    |   |   |                   |   |
| Total      interest income                                   |   | $                       | 71,815 |   |                   | $      | 217,850 |   |
| Total      interest expense                                  |   |                    | 32,153 |   |                   |   | 101,333 |   |
| Net      interest income                                     |   |                    | 39,662 |   |                   |   | 116,517 |   |
|                                                         |   |                    |   |   |                   |   |   |   |
| Provision      for loan losses                               |   |                    | 4,930  |   |                   |   | 12,509 |   |
| Net      interest income after provision for loan losses     |   |                    | 34,732 |   |                   |   | 104,008 |   |
|                                                         |   |                    |   |   |                   |   |   |   |
| Total      non-interest income                               |   |                    | 13,284 |   |                   |   | 42,020 |   |
| Total      non-interest expense                              |   |                    | 39,767 |   |                   |   | 119,888 |   |
|                                                         |   |                    |   |   |                   |   |   |   |
| Income      before income taxes                              |   |                    | 8,249  |   |                   |   | 26,140 |   |
|                                                         |   |                    |   |   |                   |   |   |   |
| Income      tax expense (1)                                  |   |                    | 1,485  |   |                   |   | 6,077 |   |
|                                                         |   |                    |   |   |                   |   |   |   |
| Net      income                                              |   | $                       | 6,764  |   |                   | $      | 20,063 |   |
|                                                         |   |                    |   |   |                   |   |   |   |
| Basic      earnings per share                                |   | $                       | 0.16   |   |                   | $      | 0.47 |   |
| Diluted      earnings per share                              |   | $                       | 0.16   |   |                   | $      | 0.47 |   |

| (1)   | Tax      effects are reflected at an assumed rate of35% |
|-----------------|---------------------------------------------------------|

----

|                                                           |   | (Dollars      in thousands) |   |
|----------------------------------------------------------------|--------|-----------------------------|--------|
| Contractually      required payments at September 30, 2009:    |   |                        |   |
| Real      estate                                               |   | $                           | 3,928  |   |
| Commercial      and industrial                                 |   |                        | 6,151  |   |
| Total                                                          |   | $                           | 10,079 |   |
| Cash      flows expected to be collected at September 30, 2009 |   | $                           | 6,705  |   |

|                           |   | (Dollars      in thousands) |   |
|--------------------------------|--------|-----------------------------|--------|
| Real      estate               |   | $                           | 3,718  |   |
| Commercial      and industrial |   |                        | 2,987  |   |
| Total carrying    value        |   | $                           | 6,705  |   |

----

|                                                          |   | September 30, 2009     |      |
|---------------------------------------------------------------|--------|----------------------------------|-----------|
|                                                          |   | AmortizedCost                    |      |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | Estimated      Fair Value |   |
|                                                          |   | (Dollars in thousands) |      |
| Available      for sale                                       |   |                             |      |   |   |   |   |   |   |   |   |   |
| Obligations      of U.S. government agencies and corporations |   | $                                | 500       |   |   | $ | — |   |   | $ | (4 | ) |   | $ | 496 |   |
| Obligations      of states and political subdivisions         |   |                             | 259,792   |   |   |   | 13,086 |   |   |   | (947 | ) |   |   | 271,931 |   |
| Residential      mortgage-backed securities                   |   |                             | 704,321   |   |   |   | 12,975 |   |   |   | (16,559 | ) |   |   | 700,737 |   |
| Trust      preferred pools/collateralized debt obligations    |   |                             | 43,572    |   |   |   | 100 |   |   |   | (33,568 | ) |   |   | 10,104 |   |
| Corporate      bonds                                          |   |                             | 3,260     |   |   |   | 19 |   |   |   | (1,134 | ) |   |   | 2,145 |   |
| Equity      securities                                        |   |                             | 22,804    |   |   |   | 152 |   |   |   | (1,471 | ) |   |   | 21,485 |   |
| Total      investment securities available for sale           |   | $                                | 1,034,249 |   |   | $ | 26,332 |   |   | $ | (53,683 | ) |   | $ | 1,006,898 |   |
| Held      to maturity                                         |   |                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations      of states and political subdivisions         |   | $                                | 32,059    |   |   | $ | 133 |   |   | $ | (183 | ) |   | $ | 32,009 |   |
| Total investment securities held      to maturity             |   | $                                | 32,059    |   |   | $ | 133 |   |   | $ | (183 | ) |   | $ | 32,009 |   |

|                                                          |   | 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 |   |

----

|                                                          |   | September      30, 2009     |
|---------------------------------------------------------------|--------|-----------------------------|
|                                                          |   | Less      than 12 months    |   |   | 12      months or 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 |   |                        | 1 |   |   | $ | 496 |   |   | $ | (4 | ) |   |   | — |   |   | $ | — |   |   | $ | — |   |   |   | 1 |   |   | $ | 496 |   |   | $ | (4 | ) |
| Obligations      of states and political subdivisions         |   |                        | 18 |   |   |   | 8,261 |   |   |   | (686 | ) |   |   | 16 |   |   | $ | 13,715 |   |   |   | (444 | ) |   |   | 34 |   |   |   | 21,976 |   |   |   | (1,130 | ) |
| Residential      mortgage-backed securities                   |   |                        | 20 |   |   |   | 117,166 |   |   |   | (1,103 | ) |   |   | 36 |   |   |   | 77,525 |   |   |   | (15,456 | ) |   |   | 56 |   |   |   | 194,691 |   |   |   | (16,559 | ) |
| Trust      preferred pools/collateralized debt obligations    |   |                        | 2 |   |   |   | 91 |   |   |   | (249 | ) |   |   | 13 |   |   |   | 9,494 |   |   |   | (33,319 | ) |   |   | 15 |   |   |   | 9,585 |   |   |   | (33,568 | ) |
| Corporate      bonds                                          |   |                        | 1 |   |   |   | 15 |   |   |   | (6 | ) |   |   | 1 |   |   |   | 1,361 |   |   |   | (1,128 | ) |   |   | 2 |   |   |   | 1,376 |   |   |   | (1,134 | ) |
| Equity      securities                                        |   |                        | 6 |   |   |   | 6,472 |   |   |   | (807 | ) |   |   | 6 |   |   |   | 12,745 |   |   |   | (664 | ) |   |   | 12 |   |   |   | 19,217 |   |   |   | (1,471 | ) |
| Totals                                                        |   |                        | 48 |   |   | $ | 132,501 |   |   | $ | (2,855 | ) |   |   | 72 |   |   | $ | 114,840 |   |   | $ | (51,011 | ) |   |   | 120 |   |   | $ | 247,341 |   |   | $ | (53,866 | ) |

|                                                          |   | December 31, 2008 |
|---------------------------------------------------------------|--------|-----------------------------|
|                                                          |   | Less      than 12 months    |   |   | 12      months or 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       |   |                 | 6,323 |
| Estimated      credit losses as of  September 30, 2009 |   | $                    | 6,323 |
|                                                             |   |                 |   |

| ·   | 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 debtsecurity |
|--------------------|------------------------------------------------|

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

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

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

----

| ·   | Discount      rate equal to original coupon spread for the respective security using      forward LIBOR rates; |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | No      calls are assumed; |
|--------------------|----------------------------|

| ·   | Each      piece of underlying collateral with existing deferrals/defaults is      evaluated individually for future recovery and the recovery rate is      adjusted accordingly; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Additional      deferrals/defaults are assumed based upon evaluation of underlying      performing collateral. The Corporation obtains and evaluates financial      data pertinent to each piece of collateral including analysis of      profitability, credit quality, operating efficiency, leverage, and      liquidity using the most recently available financial and regulatory      information. The Corporation also evaluates historical industry default      data obtained from its third-party investment advisors and assesses the      impact of current marketconditions. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (Dollars      in thousands)          |   |            |   |   |            |   |   |                        |   |
|--------------------------------------|--------|-----------------|--------|--------|-----------------|--------|--------|-----------------------------|--------|
|   As of September 30, 2009 |   | Book      Value |   |   | Fair      Value |   |   | Unrealized      (Loss) Gain |   |   | Deferral/Default      as % of Collateral |   |
|                                 |   |            |   |   |            |   |   |                        |   |   |   |   |
| Single      Issuer:                  |   |            |   |   |            |   |   |                        |   |   |   |   |
| A      Rated                         |   | $               | 10,392 |   |            | $      | 7,553  |                        |   | $ | (2,839 | ) |   |   | n/a |   |
| Not      Rated                       |   |            | 420    |   |            |   | 520    |                        |   |   | 100 |   |   |   | n/a |   |
| Total Single      Issuers            |   | $               | 10,812 |   |            | $      | 8,073  |                        |   | $ | (2,739 | ) |   |   |   |   |
|                                 |   |            |   |   |            |   |   |                        |   |   |   |   |   |   |   |   |
| Pooled:                              |   |            |   |   |            |   |   |                        |   |   |   |   |   |   |   |   |
| B      Rated                         |   | $               | 9,720  |   |            | $      | 1,036  |                        |   | $ | (8,684 | ) |   |   | 27.0 | % |
| Noninvestment      grade             |   |            | 23,040 |   |            |   | 995    |                        |   |   | (22,045 | ) |   |   | 21.5 | % |
| Total Pooled                         |   | $               | 32,760 |   |            | $      | 2,031  |                        |   | $ | (30,729 | ) |   |   |   |   |
|                                 |   |            |   |   |            |   |   |                        |   |   |   |   |   |   |   |   |
| Total      Preferred Securities      |   | $               | 43,572 |   |            | $      | 10,104 |                        |   | $ | (33,468 | ) |   |   |   |   |

----

| (Dollars      in thousands)                                 |   |                                |   |   |                                    |   |   |                                    |   |   |                                         |   |   |                                        |    |   |                                                    |    |   |                                                                |   |
|-------------------------------------------------------------|--------|-------------------------------------|--------|--------|-----------------------------------------|--------|--------|-----------------------------------------|--------|--------|----------------------------------------------|--------|--------|---------------------------------------------|---------|--------|---------------------------------------------------------|---------|--------|---------------------------------------------------------------------|--------|
|      As      of September 30, 2009 |   |      Class |   |   |     Book      Value |   |   |     Fair      Value |   |   |     Unrealized      Loss |   |   |    Lowest      Credit Rating |    |   |   Number      of performing banks in issuance |    |   |    Deferral/Default      as % of original collateral |   |   | Excess      (Negative) Subordination as % of remaining performing      collateral |   |
|                                                        |   |                                |   |   |                                    |   |   |                                    |   |   |                                         |   |   |                                        |    |   |                                                    |    |   |                                                                |   |   |   |   |
| Pooled Securities:                                          |   |                                |   |   |                                    |   |   |                                    |   |   |                                         |   |   |                                        |    |   |                                                    |    |   |                                                                |   |   |   |   |
| MMC      Funding XVIII                                      |   |                                | C-1    |   |                                    |   | 2,665  |                                    |   |   | 74                                           |   |   |                                        | (2,591  | )      |                                                    |  C |   |                                                                |   | 28 |   |   |   | 30.0 | % |   |   | (25.8 | %)  (1) |
| TPREF      Funding III, Ltd.                                |   |                                | B-2    |   |                                    |   | 4,976  |                                    |   |   | 150                                          |   |   |                                        | (4,826  | )      |                                                    | Ca      |   |                                                                |   | 25 |   |   |   | 21.7 | % |   |   | (20.0 | %)  (3) |
| TPREF      Funding III, Ltd.                                |   |                                | B-2    |   |                                    |   | 4,967  |                                    |   |   | 150                                          |   |   |                                        | (4,817  | )      |                                                    | Ca      |   |                                                                |   | 25 |   |   |   | 21.7 | % |   |   | (20.0 | %)  (3) |
| Regional      Diversified Funding Ltd.                      |   |                                | n/a    |   |                                    |   | 3,772  |                                    |   |   | 111                                          |   |   |                                        | (3,661  | )      |                                                    | Ca      |   |                                                                |   | 26 |   |   |   | 13.3 | % |   |   | (5.8 | %)      (3) |
| US      Capital Funding IV                                  |   |                                | B-1    |   |                                    |   | 134    |                                    |   |   | 113                                          |   |   |                                        | (21     | )      |                                                    | Ca      |   |                                                                |   |   |   |   |   | 28.2 | % |   |   | (29.5 | %)      (2) |
| US      Capital Funding II                                  |   |                                | B-1    |   |                                    |   | 937    |                                    |   |   | 30                                           |   |   |                                        | (907    | )      |                                                    | Ca      |   |                                                                |   | 50 |   |   |   | 9.0 | % |   |   | (2.4 | %)      (3) |
| TPREF      Funding II, Ltd.                                 |   |                                | B      |   |                                    |   | 498    |                                    |   |   | 36                                           |   |   |                                        | (462    | )      |                                                    | Cc      |   |                                                                |   | 24 |   |   |   | 4.7 | % |   |   | (21.0 | %)      (4) |
| TPREF      Funding III, Ltd.                                |   |                                | B-2    |   |                                    |   | 156    |                                    |   |   | 30                                           |   |   |                                        | (126    | )      |                                                    | Ca      |   |                                                                |   | 25 |   |   |   | 21.7 | % |   |   | (19.9 | %)      (3) |
| PRETSL      XI                                              |   |                                | B-3    |   |                                    |   | 4,935  |                                    |   |   | 301                                          |   |   |                                        | (4,634  | )      |                                                    | Ca      |   |                                                                |   | 23 |   |   |   | 17.8 | % |   |   | (17.0 | %)      (3) |
|      Total                         |   |                                |   |   |                                    | $      | 23,040 |                                    |   | $      | 995                                          |   |   | $                                           | (22,045 | )      |                                                    |    |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                        |   |                                |   |   |                                    |   |   |                                    |   |   |                                         |   |   |                                        |    |   |                                                    |    |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |   |

| (1)   | Credit      related impairment charge of $2.5 million recorded during the September      30, 2009 quarter. |
|-----------------|------------------------------------------------------------------------------------------------------------|

| (2)   | Credit      related impairment charge of $2.0 million recorded during the September      30, 2009 quarter. |
|-----------------|------------------------------------------------------------------------------------------------------------|

| (3)   | Discounted      cash flow analysis was performed and no other-than-temporary impairment      was identified. |
|-----------------|--------------------------------------------------------------------------------------------------------------|

| (4)   | Projected      future principal and interest payments exceeds balance of outstanding      notes; therefore, no indication of other-than-temporary impairment      exists. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                          |   | September 30, 2009     |
|---------------------------------------------------------------|--------|----------------------------------|
|                                                          |   | Held to Maturity       | Available for Sale |
|                                                          |   | AmortizedCost                    | Estimated      FairValue | AmortizedCost | EstimatedFairValue |
|                                                          |   | (Dollars in thousands) |
| Due      in one year or less:                                 |   |                             |   |   |   |   |   |
| Obligations      of states and political subdivisions         |   | $                                | — |   | $      — | $      1,250 | $      1,257 |
| Corporate      bonds                                          |   |                             |       — |   |       — | 250 | 253 |
| Total due on one year or      less                            |   |                             |       — |   |       — | 1,500 | 1,510 |
|                                                          |   |                             |   |   |   |   |   |
| Due      after one year through five years:                   |   |                             |   |   |   |   |   |
| Obligations      of U.S. government agencies and corporations |   |                             |       — |   |       — | 500 | 496 |
| Obligations      of states and political subdivisions         |   |                             |       — |   |       — | 2,725 | 2,930 |
| Corporate      bonds                                          |   |                             |       — |   |       — | 250 | 250 |
| Total due after one year through      five years              |   |                             |       — |   |       — | 3,475 | 3,676 |
|                                                          |   |                             |   |   |   |   |   |
| Due      after five years through ten years:                  |   |                             |   |   |   |   |   |
| Obligations      of states and political subdivisions         |   |                             | 10,442 |   | 10,478 | 82,749 | 85,059 |
| Corporate      bonds                                          |   |                             |       — |   |       — | 2,738 | 1,627 |
| Total due after five years      through ten years             |   |                             | 10,442 |   | 10,478 | 85,487 | 86,686 |
|                                                          |   |                             |   |   |   |   |   |
| Due      after ten years:                                     |   |                             |   |   |   |   |   |
| Obligations      of states and political subdivisions         |   |                             | 21,617 |   | 21,531 | 173,068 | 182,685 |
| Trust      preferred pools/collateralized debt obligations    |   |                             |       — |   |       — | 43,572 | 10,104 |
| Corporate      bonds                                          |   |                             |       — |   |       — | 22 | 15 |
| Total due after ten      years                                |   |                             | 21,617 |   | 21,531 | 216,662 | 192,804 |
|                                                          |   |                             |   |   |   |   |   |
| Residential      mortgage-backed securities                   |   |                             |       — |   |       — | 704,321 | 700,737 |
| Equity      securities                                        |   |                             |       — |   |       — | 22,804 | 21,485 |
| Totals                                                        |   | $                                | 32,059 |   | $32,009 | $1,034,249 | $1,006,898 |

|                                                     |   | Nine      Months Ended September      30, |
|----------------------------------------------------------|--------|------------------------------------------------|
|                                                     |   | 2009                                           |   |   | 2008 |
|                                                     |   | (Dollars in thousands)               |
| Gross      realized gains                                |   | $                                              | 9,848 |   |   | $ | 509 |   |
| Gross      realized losses                               |   |                                           | (1,568 | ) |   |   | (284 |  ) |
| Net      realized gain on sales of investment securities |   | $                                              | 8,280 |   |   | $ | 225 |   |

----

|                                                  |   | Community      Banking         |   | Wealth      Management                                                                                        |   | Total               |   |
|-------------------------------------------------------|--------|--------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|---------------------|--------|
|                                                  |   | (Dollars      in thousands)    |   |
| Balance,      January 1, 2009                         |   | $222,381                       |   | $18,320                                                                                                       |   | $240,701            |   |
| Purchase      accounting adjustments for acquisitions |   | (1,882                         | )      |            (1,533                                      | )      | (3,415              | )      |
| Goodwill      impairment                              |   | (214,536                       | )      |                  — |   | (214,536            | )      |
| Balance,      September 30, 2009                      |   | $    5,963 |   | $16,787                                                                                                       |   | $  22,750 |   |

|                                |   |        September      30, |  December      31,                   |   |                       |
|-------------------------------------|--------|--------------------------------|-------------------------------------------|--------|----------------------------|
|                                |   |        2009               |  2008                                |   |
|                                |   | Gross      Carrying Amount     |        Accumulated      Amortization |   | Gross      Carrying Amount |   | Accumulated      Amortization |   |   |   |
|                                |   | (Dollars      in thousands)    |                                      |   |
| Core      deposit intangibles       |   | $                              | 21,083                                    |   |                       | $ | 5,358 |   |   | $ | 23,256 |   |   | $ | 2,692 |   |
| Other      identifiable intangibles |   |                           | 7,209                                     |   |                       |   | 2,312 |   |   |   | 7,209 |   |   |   | 1,524 |   |
| Total                               |   | $                              | 28,292                                    |   |                       | $ | 7,670 |   |   | $ | 30,465 |   |   | $ | 4,216 |   |

----

----

| 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 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                              |   |               | (95,513   | )      |                                 |   | 7.79    |                                                                  |   |   |                                                   |   |   |   |
| Forfeited      (unvested)              |   |               | (3,903    | )      |                                 |   | 17.80   |                                                                  |   |   |                                                   |   |   |   |
| Cancelled      (vested)                |   |               | (124,654  | )      |                                 |   | 15.62   |                                                                  |   |   |                                                   |   |   |   |
|                                   |   |               |      |   |                                 |   |    |                                                                  |   |   |                                                   |   |   |   |
| Outstanding      at September 30, 2009 |   |               | 1,424,653 |   |                                 | $      | 15.75   |                                                                  |   |   | 3.64                                                   |   |   | $ | 3 |   |
|                                   |   |               |      |   |                                 |   |    |                                                                  |   |   |                                                   |   |   |   |   |   |
| Exercisable      at September 30, 2009 |   |               | 1,168,192 |   |                                 | $      | 15.97   |                                                                  |   |   | 3.04                                                   |   |   | $ |  3 |   |
|                                   |   |               |      |   |                                 |   |    |                                                                  |   |   |                                                   |   |   |   |   |   |

|  Nonvested      Shares          |   | Shares |    |   | Weighted-AverageGrant-Date      Fair Value |   |
|--------------------------------------|--------|--------|---------|--------|--------------------------------------------|--------|
|                                 |   |   |    |   |                                       |   |
| Nonvested      at January 1, 2009    |   |   | 263,664 |   |                                       | $      | 3.74 |   |
|                                 |   |   |    |   |                                       |   |   |   |
| Granted                              |   |   | — |   |                                       |   | — |   |
|                                 |   |   |    |   |                                       |   |   |   |
| Vested                               |   |   | (3,300  | )      |                                       |   | 5.67 |   |
|                                 |   |   |    |   |                                       |   |   |   |
| Forfeited                            |   |   | (3,903  | )      |                                       |   | 4.70 |   |
|                                 |   |   |    |   |                                       |   |   |   |
| Nonvested      at September 30, 2009 |   |   | 256,461 |   |                                       | $      | 3.70 |   |

----

|                                                                                 |   | Three      Months Ended |       |   | Nine      Months Ended |   |
|--------------------------------------------------------------------------------------|--------|-------------------------|------------|--------|------------------------|--------|
|                                                                                 |   | September      30,      |       |   | September      30,     |   |
| (Dollars      in thousands, except per share data)                                   |   | 2009                    |       |   | 2008                   |   |   | 2009 |   |   | 2008 |   |
|                                                                                 |   |                    |       |   |                   |   |   |   |   |   |   |   |
| Basic      (loss) earnings per share                                                 |   |                    |       |   |                   |   |   |   |   |   |   |   |
| Net      (loss) income available to common shareholders                              |   | $                       | (4,369     | )      |                   | $      | 6,639 |   |   | $ | (222,277 | ) |   | $ | 21,270 |   |
| Weighted      average common shares outstanding                                      |   |                    | 43,102,844 |   |                   |   | 31,385,257 |   |   |   | 43,058,489 |   |   |   | 31,363,779 |   |
| Basic      (loss) earnings per share                                                 |   | $                       | (0.10      | )      |                   | $      | 0.21 |   |   | $ | (5.16 | ) |   | $ | 0.68 |   |
|                                                                                 |   |                    |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted      (loss) earnings per share                                               |   |                    |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Net      (loss) income available to common shareholders and assumed      conversions |   | $                       | (4,369     | )      |                   | $      | 6,639 |   |   | $ | (222,277 | ) |   | $ | 21,270 |   |
| Weighted      average common shares outstanding                                      |   |                    | 43,102,844 |   |                   |   | 31,385,257 |   |   |   | 43,058,489 |   |   |   | 31,363,779 |   |
| Dilutive      potential common shares (1),      (2)                                  |   |                    | —    |   |                   |   | 165,769 |   |   |   | — |   |   |   | 168,163 |   |
| Total      diluted weighted average common shares outstanding                        |   |                    | 43,102,844 |   |                   |   | 31,551,026 |   |   |   | 43,058,489 |   |   |   | 31,531,942 |   |
| Diluted      (loss) earnings per share                                               |   | $                       | (0.10      | )      |                   | $      | 0.21 |   |   | $ | (5.16 | ) |   | $ | 0.67 |   |
|                                                                                 |   |                    |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |

| (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 nine months      ended September 30, 2009, there were 1,406,026 and 1,400,980 antidilutive      options at an average price of $15.89 and $15.92, respectively. For the      three and nine months ended September 30, 2008, there were 524,120      antidilutive options at an average price of $21.15,      respectively. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Other Comprehensive Income      (Loss)                                                                                                 |   |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                   |   |   |   |   |   |   |   |   |   |
| (Dollars      in thousands)                                                                                                            |   | Before      tax |   |   | Tax      Benefit |   |   | Net      of tax |   |
| Nine months ended September 30,      2009                                                                                              |   | Amount |   |   | (Expense) |   |   | amount |   |
| Net      unrealized gains on available for sale securities:                                                                            |   |   |   |   |   |   |   |   |   |
| Net unrealized holding gains      arising during period                                                                                |   | $ | 19,042 |   |   | $ | (6,665 | ) |   | $ | 12,377 |   |
| Less reclassification adjustment      for net gains realized in net income                                                             |   |   | 8,280 |   |   |   | (2,898 | ) |   |   | 5,382 |   |
| Less reclassification      adjustment for other-than-temporary impairment of available for sale      securities recognized in net loss |   |   | (6,524 | ) |   |   | 2,283 |   |   |   | (4,241 | ) |
| Net unrealized    gains                                                                                                                |   |   | 17,286 |   |   |   | (6,050 | ) |   |   | 11,236 |   |
| Change in fair value of      derivatives used for cash flow hedges                                                                     |   |   | 3 |   |   |   | — |   |   |   | 3 |   |
| Other comprehensive income,      net                                                                                                   |   | $ | 17,289 |   |   | $ | (6,050 | ) |   | $ | 11,239 |   |
|                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Dollars in      thousands)                                                                                                            |   | Before      tax |   |   | Tax      Benefit |   |   | Net      of tax |   |
| Nine months ended September 30,      2008                                                                                              |   | Amount |   |   | (Expense) |   |   | amount |   |
| Net      unrealized losses on available for sale securities:                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Net unrealized holding losses      arising during period                                                                               |   | $ | (49,008 | ) |   | $ | 17,153 |   |   | $ | (31,855 | ) |
| Less reclassification adjustment      for net gains realized in net income                                                             |   |   | 225 |   |   |   | (79 | ) |   |   | 146 |   |
| Net unrealized    losses                                                                                                               |   |   | (49,233 | ) |   |   | 17,232 |   |   |   | (32,001 | ) |
| Change in fair value of      derivatives used for cash flow hedges                                                                     |   |   | 151 |   |   |   | (53 | ) |   |   | 98 |   |
| Other comprehensive loss,      net                                                                                                     |   | $ | (49,082 | ) |   | $ | 17,179 |   |   | $ | (31,903 | ) |

----

| `(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                  |   |                                                             | (32,001 | )      |                                                                      |   | 98      |                                      |   |   | (31,903 | ) |
| Balance,      September 30, 2008 |   | $                                                                | (34,453 | )      |                                                                      | $      | (16     | )                                         |   | $ | (34,469 | ) |
|                             |   |                                                             |    |   |                                                                      |   |    |                                      |   |   |   |   |
| Balance,      January 1, 2009    |   | $                                                                | (29,014 | )      |                                                                      | $      | (3      | )                                         |   | $ | (29,017 | ) |
| Net      Change                  |   |                                                             | 11,236  |   |                                                                      |   | 3       |                                      |   |   | 11,239 |   |
| Balance,      September 30, 2009 |   | $                                                                | (17,778 | )      |                                                                      | $      | — |                                      |   | $ | (17,778 | ) |

----

| (Dollars      in thousands)                |   | Community      Banking |   |   | Wealth Management |   |   | All      Other |   |   | Consolidated      Totals |   |
|--------------------------------------------|--------|------------------------|--------|--------|------------------------|--------|--------|----------------|--------|--------|--------------------------|--------|
| Three      Months Ended September 30, 2009 |   |                   |   |   |                   |   |   |           |   |   |                     |   |
|                                       |   |                   |   |   |                   |   |   |           |   |   |                     |   |
| Net      interest income (expense)         |   | $                      | 32,644 |   |                   | $      | 47     |           |   | $      | (1,253                   | )      |   | $ | 31,438 |   |
| Provision      for loan losses             |   |                   | 14,750 |   |                   |   | -      |           |   |   | -                        |   |   |   | 14,750 |   |
| Noninterest      income                    |   |                   | 7,471  |   |                   |   | 4,657  |           |   |   | 147                      |   |   |   | 12,275 |   |
| Noninterest      expense                   |   |                   | 35,124 |   |                   |   | 4,874  |           |   |   | 223                      |   |   |   | 40,221 |   |
| (Loss)      income before income taxes     |   |                   | (9,899 | )      |                   |   | (30    | )              |   |   | (1,329                   | )      |   |   | (11,258 | ) |
| Income      tax (benefit) expense          |   |                   | (5,178 | )      |                   |   | 42     |           |   |   | (1,753                   | )      |   |   | (6,889 | ) |
| Net      (loss) income                     |   | $                      | (4,721 | )      |                   | $      | (72    | )              |   | $      | 424                      |   |   | $ | (4,369 | ) |
|                                       |   |                   |   |   |                   |   |   |           |   |   |                     |   |   |   |   |   |
| Three      Months Ended September 30, 2008 |   |                   |   |   |                   |   |   |           |   |   |                     |   |   |   |   |   |
|                                       |   |                   |   |   |                   |   |   |           |   |   |                     |   |   |   |   |   |
| Net      interest income (expense)         |   | $                      | 26,860 |   |                   | $      | 239    |           |   | $      | (1,237                   | )      |   | $ | 25,297 |   |
| Provision      for loan losses             |   |                   | 2,580  |   |                   |   | -      |           |   |   | -                        |   |   |   | 2,580 |   |
| Noninterest      income                    |   |                   | 6,373  |   |                   |   | 3,863  |           |   |   | 209                      |   |   |   | 10,445 |   |
| Noninterest      expense                   |   |                   | 20,773 |   |                   |   | 4,203  |           |   |   | 177                      |   |   |   | 25,153 |   |
| Income      (loss) before income taxes     |   |                   | 9,385  |   |                   |   | (171   | )              |   |   | (1,205                   | )      |   |   | 8,009 |   |
| Income      taxes (benefit)                |   |                   | 1,840  |   |                   |   | (49    | )              |   |   | (421                     | )      |   |   | 1,370 |   |
| Net      income (loss)                     |   | $                      | 7,545  |   |                   | $      | (122   | )              |   | $      | (784                     | )      |   | $ | 6,639 |   |

| (Dollars      in thousands)               |   | Community      Banking |      |   | Wealth Management |   |   | All      Other |   |   | Consolidated      Totals |   |
|-------------------------------------------|--------|------------------------|-----------|--------|------------------------|--------|--------|----------------|--------|--------|--------------------------|--------|
| Nine      Months Ended September 30, 2009 |   |                   |      |   |                   |   |   |           |   |   |                     |   |
|                                      |   |                   |      |   |                   |   |   |           |   |   |                     |   |
| Net      interest income (expense)        |   | $                      | 103,860   |   |                   | $      | 239    |           |   | $      | (3,904                   | )      |   | $ | 100,195 |   |
| Provision      for loan losses            |   |                   | 53,871    |   |                   |   | -      |           |   |   | -                        |   |   |   | 53,871 |   |
| Noninterest      income                   |   |                   | 35,992    |   |                   |   | 14,057 |           |   |   | 96                       |   |   |   | 50,145 |   |
| Noninterest      expense (1)              |   |                   | 316,386   |   |                   |   | 14,539 |           |   |   | 667                      |   |   |   | 331,592 |   |
| (Loss)      income before income taxes    |   |                   | (230,545  | )      |                   |   | (103   | )              |   |   | (4,475                   | )      |   |   | (235,123 | ) |
| Income      tax (benefit) expense         |   |                   | (10,080   | )      |                   |   | 34     |           |   |   | (2,800                   | )      |   |   | (12,846 | ) |
| Net      (loss) income                    |   | $                      | (220,465  | )      |                   | $      | (137   | )              |   | $      | (1,675                   | )      |   | $ | (222,277 | ) |
|                                      |   |                   |      |   |                   |   |   |           |   |   |                     |   |   |   |   |   |
| Assets                                    |   | $                      | 5,119,861 |   |                   | $      | 35,040 |           |   | $      | 8,458                    |   |   | $ | 5,163,359 |   |
|                                      |   |                   |      |   |                   |   |   |           |   |   |                     |   |   |   |   |   |
| Nine      Months Ended September 30, 2008 |   |                   |      |   |                   |   |   |           |   |   |                     |   |   |   |   |   |
|                                      |   |                   |      |   |                   |   |   |           |   |   |                     |   |   |   |   |   |
| Net      interest income (expense)        |   | $                      | 78,150    |   |                   | $      | 318    |           |   | $      | (3,775                   | )      |   | $ | 74,693 |   |
| Provision      for loan losses            |   |                   | 7,647     |   |                   |   | -      |           |   |   | -                        |   |   |   | 7,647 |   |
| Noninterest      income                   |   |                   | 19,578    |   |                   |   | 12,796 |           |   |   | 499                      |   |   |   | 32,873 |   |
| Noninterest      expense                  |   |                   | 60,463    |   |                   |   | 12,133 |           |   |   | 733                      |   |   |   | 73,329 |   |
| Income      (loss) before income taxes    |   |                   | 29,618    |   |                   |   | 981    |           |   |   | (4,009                   | )      |   |   | 26,590 |   |
| Income      taxes (benefit)               |   |                   | 6,237     |   |                   |   | 385    |           |   |   | (1,302                   | )      |   |   | 5,320 |   |
| Net      income (loss)                    |   | $                      | 23,381    |   |                   | $      | 596    |           |   | $      | (2,707                   | )      |   | $ | 21,270 |   |
|                                      |   |                   |      |   |                   |   |   |           |   |   |                     |   |   |   |   |   |
| Assets                                    |   | $                      | 3,910,320 |   |                   | $      | 24,959 |           |   | $      | 14,451                   |   |   | $ | 3,949,730 |   |

|   | (1)  Includes      a $214.5 million goodwill impairment charge related to the Community      Banking segment recognized during the second quarter of 2009. See Note 5 –      Goodwill and Other Intangibles for additional  information. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                 |   | Total      Amount Committed at |    |
|------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|
| Commitments                                                                                          |   | September      30,2009         |    |   | December      31, 2008 |   |
| (Dollars      in thousands)                                                                          |
|                                                                                                 |   |                           |    |   |   |   |
| Financial      instruments whose contract amounts represent credit risk:                             |   |                           |    |   |   |   |
| Commitments to extend      credit                                                                    |   | $                              | 732,030 |   |   | $ | 995,125 |   |
| Standby letters of credit and      financial guarantees written                                      |   |                           | 45,596  |   |   |   | 34,806 |   |
| Financial      instruments whose notional or contract amounts exceed the amount of credit      risk: |   |                           |    |   |   |   |   |   |
| Interest rate swap      agreements                                                                   |   |                           | 209,576 |   |   |   | 124,214 |   |
| Interest rate cap      agreements                                                                    |   |                           | — |   |   |   | 200,000 |   |

----

|                                                              | Asset      Derivatives            |   | Liability      Derivatives   |    |
|-------------------------------------------------------------------|-----------------------------------|--------|------------------------------|---------|
|  (Dollars      in thousands)                                 | As      of September 30, 2009     |   | As      of December 31, 2008 |    | As      of September 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                |                              |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                              |                              |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Rate Products                                       | Other      Assets                 |   | $                            | — |   | Other      Assets |   | $ | — |   | Other      Liabilities |   | $ | 239 |   | Other      Liabilities |   | $ | 347 |   |
|                                                              |                              |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      derivatives designated as hedging instruments          |                              |   | $                            | — |   |   |   | $ | — |   |   |   | $ | 239 |   |   |   | $ | 347 |   |
|                                                              |                              |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives      not designated as      hedging instruments       |                              |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                              |                              |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Rate Products                                       | Other      Assets                 |   | $                            | 3,983   |   | Other      Assets |   | $ | 4,523 |   | Other      Liabilities |   | $ | 4,238 |   | Other      Liabilities |   | $ | 5,294 |   |
|                                                              |                              |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      derivatives not      designated as hedging instruments |                              |   | $                            | 3,983   |   |   |   | $ | 4,523 |   |   |   | $ | 4,238 |   |   |   | $ | 5,294 |   |

----

| Derivatives      in Fair Value Hedging Relationships | Classification      of Gain/(Loss) Recognized on Derivative |   | Gain/(Loss)      Recognized on Derivative |   |
|------------------------------------------------------|-------------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                 |                                                        |   | Three      Months Ended                   |   |   | Nine      Months Ended |   |
|  (Dollars      in thousands)                    |                                                        |   | September      30,                        |   |   | September      30, |   |
|                                                 | 2009                                                        |   |                                      | 2008   |   |   | 2009 |   |   | 2008 |   |
|                                                 |                                                        |   |                                      |   |   |   |   |   |   |   |   |   |   |
| Interest      Rate Products                          | Interest      income                                        |   | $                                         | (24    | ) |   | $ | (16 | ) |   | $ | (75 | ) |   | $ | (59 | ) |
|                                                 |                                                        |   |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                |                                                        |   | $                                         | (24    | ) |   | $ | (16 | ) |   | $ | (75 | ) |   | $ | (59 | ) |
|                                                 |                                                        |   |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| Derivatives      Not Designated as Hedging Instruments | Classification      of Gain/(Loss) Recognized on Derivative |   | Gain/(Loss)      Recognized on Derivative |   |
|--------------------------------------------------------|-------------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                   |                                                        |   | Three      Months Ended                   |   |   | Nine      Months Ended |   |
|  (Dollars      in thousands)                      |                                                        |   | September      30,                        |   |   | September      30, |   |
|                                                   | 2009                                                        |   |                                      | 2008   |   |   | 2009 |   |   | 2008 |   |
|                                                   |                                                        |   |                                      |   |   |   |   |   |   |   |   |   |   |
| Interest      Rate Products                            | Interest      income                                        |   | $                                         | (47    | ) |   | $ | — |   |   | $ | (197 | ) |   | $ | — |   |
|                                                   | Other      income                                           |   |                                      | (208   | ) |   |   | (6 | ) |   |   | 516 |   |   |   | 139 |   |
|                                                   |                                                        |   |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                  |                                                        |   | $                                         | (255   | ) |   | $ | (6 | ) |   | $ | 319 |   |   | $ | 139 |   |
|                                                   |                                                        |   |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

|                                                          |   | 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) |   |   |  BalanceSeptember      30, 2009 |   |
|                                                          |   |                                                                                |    |   |                                                   |   |   |   |   |   |   |   |
| Assets                                                   |   |                                                                                |    |   |                                                   |   |   |   |   |   |   |   |
| Investment      securities available for sale:                |   |                                                                                |    |   |                                                   |   |   |   |   |   |   |   |
| Obligations      of U.S. government agencies and corporations |   | $                                                                                   | — |   |                                                   | $      | 496 |   |   | $ | — |   |   | $ | 496 |   |
| Obligations of states and      political subdivisions         |   |                                                                                | — |   |                                                   |   | 271,931 |   |   |   | — |   |   |   | 271,931 |   |
| Residential mortgage-backed      securities                   |   |                                                                                | — |   |                                                   |   | 688,023 |   |   |   | 12,714 |   |   |   | 700,737 |   |
| Trust      preferred pools/collateralized debt obligations    |   |                                                                                | — |   |                                                   |   | — |   |   |   | 10,104 |   |   |   | 10,104 |   |
| Corporate      bonds                                          |   |                                                                                | — |   |                                                   |   | 2,130 |   |   |   | 15 |   |   |   | 2,145 |   |
| Equity securities                                             |   |                                                                                | 21,485  |   |                                                   |   | — |   |   |   | — |   |   |   | 21,485 |   |
| Total      investment securities available for sale           |   |                                                                                | 21,485  |   |                                                   |   | 962,580 |   |   |   | 22,833 |   |   |   | 1,006,898 |   |
|                                                          |   |                                                                                |    |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Residential      mortgage loans held for sale                 |   |                                                                                | — |   |                                                   |   | 41,672 |   |   |   | — |   |   |   | 41,672 |   |
| Derivatives                                                   |   |                                                                                | — |   |                                                   |   | 4,211 |   |   |   | — |   |   |   | 4,211 |   |
| Total assets                                                  |   | $                                                                                   | 21,485  |   |                                                   | $      | 1,008,463 |   |   | $ | 22,833 |   |   | $ | 1,052,781 |   |
| Liabilities                                                   |   |                                                                                |    |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives                                                   |   | $                                                                                   | — |   |                                                   | $      | 4,846 |   |   | $ | — |   |   | $ | 4,846 |   |
| Total    liabilities                                          |   | $                                                                                   | — |   |                                                   | $      | 4,846 |   |   | $ | — |   |   | $ | 4,846 |   |

----

|    (Dollars      in thousands)                                                                                                                                                           |   | Residential      mortgage-backed securities |    |   | Trust      preferred pools/collateralized      debt obligations |   |   Corporate      bonds |   |   | Total      Investment Securities Available for Sale |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|---------|--------|-----------------------------------------------------------------|--------|----------------------------------|--------|--------|-----------------------------------------------------|
|                                                                                                                                                                                                    |   |                                        |    |   |                                                            |   |                             |   |
| Balance,      January 1, 2009                                                                                                                                                                           |   | $                                           | — |   |                                                            | $      | 3,149                            |   | $      | —                                             |   |   | $ | 3,149 |   |
| Transfers      into Level 3                                                                                                                                                                             |   |                                        | 18,390  |   |                                                            |   | 16,263                           |   |   | 58                                                  |   |   |   | 34,711 |   |
| Total      losses realized:                                                                                                                                                                             |   |                                        |    |   |                                                            |   |                             |   |   |                                                |   |   |   |   |   |
| Included in      earnings(1)                                                                                                                                                                            |   |                                        | (813    | )      |                                                            |   | (5,474                           | )      |   | (36                                                 | ) |   |   | (6,323 | ) |
| Included in other comprehensive      income                                                                                                                                                             |   |                                        | (3,765  | )      |                                                            |   | (2,592                           | )      |   | (7                                                  | ) |   |   | (6,364 | ) |
| Sales                                                                                                                                                                                                   |   |                                        | — |   |                                                            |   | (1,242                           | )      |   | —                                             |   |   |   | (1,242 | ) |
| Payments                                                                                                                                                                                                |   |                                        | (1,098  | )      |                                                            |   | —                          |   |   | —                                             |   |   |   | (1,098 | ) |
| Balance,      September 30, 2009                                                                                                                                                                        |   | $                                           | 12,714  |   |                                                            | $      | 10,104                           |   |   | 15                                                  |   |   | $ | 22,833 |   |
|                                                                                                                                                                                                    |   |                                        |    |   |                                                            |   |                             |   |   |                                                |   |   |   |   |   |
|                                                                                                                                                                                                    |   |                                        |    |   |                                                            |   |                             |   |   |                                                |   |   |   |   |   |
| Total      losses included in earnings from January 1, 2009 to September 30, 2009      relating to assets still held at September 30, 2009                                                              |   | $                                           | (813    | )      |                                                            | $      | (5,474                           | )      |   | (36                                                 | ) |   | $ | (6,323 | ) |
|                                                                                                                                                                                                    |   |                                        |    |   |                                                            |   |                             |   |   |                                                |   |   |   |   |   |
| Change      in unrealized losses relating to assets still held at September 30,      2009                                                                                                               |   |                                        | (3,765  | )      |                                                            |   | (2,592                           | )      |   | (7                                                  | ) |   |   | (6,364 | ) |
|                                                                                                                                                                                                    |   |                                        |    |   |                                                            |   |                             |   |   |                                                |   |   |   |   |   |
| (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) |   |   |   BalanceSeptember      30, 2009 |   |
|                                                |   |                                                                                |    |   |   |   |   |   |   |   |   |   |
| Assets                                              |   |                                                                                |    |   |   |   |   |   |   |   |   |   |
| Impaired      loans                                 |   | $                                                                                   | — |   |   | $ | 125,732 |   |   | $ | — |   |   | $ | 125,732 |   |
| Goodwill                                            |   |                                                                                | — |   |   |   | — |   |   |   | 22,750 |   |   |   | 22,750 |   |
| Total assets                                        |   | $                                                                                   | — |   |   | $ | 125,732 |   |   | $ | 22,750 |   |   | $ | 148,482 |   |

----

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

|                                          |   |                             |
|-----------------------------------------------|--------|----------------------------------|
|                                          |   | September      30, 2009          |   |   |        December      31, 2008 |
|                                          |   | CarryingAmount                   |   |   | FairValue |   |   |  CarryingAmount |   |   | FairValue |   |   |   |
|                                          |   | (Dollars in thousands) |
| Cash      and cash equivalents                |   | $                                | 593,259 |   |   | $ | 593,259 |   |   | $ | 102,526 |   |   | $ | 102,526 |   |
| Investment      securities available for sale |   |                             | 1,006,898 |   |   |   | 1,006,898 |   |   |   | 1,141,948 |   |   |   | 1,141,948 |   |
| Investment      securities held to maturity   |   |                             | 32,059 |   |   |   | 32,009 |   |   |   | 50,434 |   |   |   | 50,059 |   |
| Residential      mortgage loans held for sale |   |                             | 41,672 |   |   |   | 41,672 |   |   |   | 17,165 |   |   |   | 17,165 |   |
| Loans      and leases, net                    |   |                             | 3,131,147 |   |   |   | 3,057,316 |   |   |   | 3,618,124 |   |   |   | 3,591,202 |   |
| Bank-owned      life insurance                |   |                             | 89,420 |   |   |   | 89,420 |   |   |   | 87,081 |   |   |   | 87,081 |   |
| Time      deposits                            |   |                             | 1,611,837 |   |   |   | 1,624,903 |   |   |   | 1,588,921 |   |   |   | 1,613,684 |   |
| Long-term      borrowings                     |   |                             | 691,130 |   |   |   | 729,522 |   |   |   | 759,658 |   |   |   | 809,618 |   |
| Subordinated      debt                        |   |                             | 93,806 |   |   |   | 40,973 |   |   |   | 93,743 |   |   |   | 50,474 |   |

----

----

----

----

|                                                          |   | Three Months EndedSeptember 30, 2009 compared toSeptember 30, 2008 |   |   | Nine Months EndedSeptember 30, 2009 compared toSeptember 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 *                                  |   | $                                                                  | (529   | )      |                                                              | $      | 1,232 |   |   | $ | (1,761 | ) |   | $ | 3,880 |   |   | $ | 5,694 |   |   | $ | (1,814 | ) |
| Federal      funds sold and deposits in banks                 |   |                                                               | 49     |   |                                                              |   | 389 |   |   |   | (340 | ) |   |   | (398 | ) |   |   | 1,228 |   |   |   | (1,626 | ) |
| Loans      *                                                  |   |                                                               | 5,729  |   |                                                              |   | 10,891 |   |   |   | (5,162 | ) |   |   | 24,437 |   |   |   | 41,322 |   |   |   | (16,885 | ) |
| Total                                                         |   |                                                               | 5,249  |   |                                                              |   | 12,512 |   |   |   | (7,263 | ) |   |   | 27,919 |   |   |   | 48,244 |   |   |   | (20,325 | ) |
|                                                          |   |                                                               |   |   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase      (decrease) in interest expense:                 |   |                                                               |   |   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings and money market      deposits                        |   |                                                               | (1,408 | )      |                                                              |   | 1,762 |   |   |   | (3,170 | ) |   |   | (3,658 | ) |   |   | 5,958 |   |   |   | (9,616 | ) |
| Time deposits                                                 |   |                                                               | (787   | )      |                                                              |   | 3,036 |   |   |   | (3,823 | ) |   |   | 404 |   |   |   | 11,997 |   |   |   | (11,593 | ) |
| Borrowed funds                                                |   |                                                               | 1,117  |   |                                                              |   | 2,498 |   |   |   | (1,381 | ) |   |   | 4,729 |   |   |   | 9,485 |   |   |   | (4,756 | ) |
| Total                                                         |   |                                                               | (1,078 | )      |                                                              |   | 7,296 |   |   |   | (8,374 | ) |   |   | 1,475 |   |   |   | 27,440 |   |   |   | (25,965 | ) |
|                                                          |   |                                                               |   |   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      increase in net interest income                      |   | $                                                                  | 6,327  |   |                                                              | $      | 5,216 |   |   | $ | 1,111 |   |   | $ | 26,444 |   |   | $ | 20,804 |   |   | $ | 5,640 |   |
|  *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, net      of deductions (tax rate of35%). |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| (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. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (Dollars      in thousands)                                                                    |   | Three Months Ended |           |   | Three Months Ended |   |
|------------------------------------------------------------------------------------------------|--------|--------------------|----------------|--------|--------------------|--------|
|                                                                                           |   | September 30, 2009 |           |   | September 30, 2008 |   |
|                                                                                           |   |               |           |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                           |   | Average            |           |   |               |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
| Assets                                                                                         |   | Balance            |           |   | Interest           |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| Earning      assets:                                                                           |   |               |           |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      securities:                                                                    |   |               |           |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable    investments                                                                         |   | $                  | 798,874        |   |               | $      | 8,761 |   |   |   | 4.36 | % |   | $ | 701,626 |   |   | $ | 9,518 |   |   |   | 5.40 | % |
| Nontaxable investments (1)                                                                     |   |               | 296,737        |   |               |   | 4,782 |   |   |   | 6.41 |   |   |   | 301,275 |   |   |   | 4,554 |   |   |   | 6.01 |   |
| Total investment      securities                                                               |   |               | 1,095,611      |   |               |   | 13,543 |   |   |   | 4.92 |   |   |   | 1,002,901 |   |   |   | 14,072 |   |   |   | 5.58 |   |
| Federal funds sold, securities      purchased under agreements to resell and deposits in banks |   |               |   417,429 |   |               |   |   281 |   |   |   |   0.27 |   |   |   |   55,519 |   |   |   |   232 |   |   |   |   1.66 |   |
| Loans (1)      (2)                                                                             |   |               | 3,332,059      |   |               |   | 43,270 |   |   |   | 5.17 |   |   |   | 2,522,034 |   |   |   | 37,541 |   |   |   | 5.91 |   |
| Total earning      assets                                                                      |   |               | 4,845,099      |   |               |   | 57,094 |   |   |   | 4.69 |   |   |   | 3,580,454 |   |   |   | 51,845 |   |   |   | 5.76 |   |
| Noninterest-earning      assets                                                                |   |               | 307,925        |   |               |   |   |   |   |   |   |   |   |   | 319,139 |   |   |   |   |   |   |   |   |   |
| Total assets                                                                                   |   | $                  | 5,153,024      |   |               |   |   |   |   |   |   |   |   | $ | 3,899,593 |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |               |           |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities      and Shareholders' Equity                                                      |   |               |           |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      liabilities:                                                             |   |               |           |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      deposits:                                                                |   |               |           |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings and money      market                                                                  |   | $                  | 1,870,632      |   |               |   | 4,372 |   |   |   | 0.93 |   |   | $ | 1,350,412 |   |   |   | 5,780 |   |   |   | 1.70 |   |
| Time                                                                                           |   |               | 1,556,241      |   |               |   | 12,189 |   |   |   | 3.12 |   |   |   | 1,225,220 |   |   |   | 12,976 |   |   |   | 4.21 |   |
| Total interest-bearing      deposits                                                           |   |               | 3,426,873      |   |               |   | 16,561 |   |   |   | 1.92 |   |   |   | 2,575,632 |   |   |   | 18,756 |   |   |   | 2.90 |   |
| Borrowed funds                                                                                 |   |               | 871,649        |   |               |   | 7,006 |   |   |   | 3.20 |   |   |   | 582,832 |   |   |   | 5,889 |   |   |   | 4.02 |   |
| Total interest bearing      liabilities                                                        |   |               | 4,298,522      |   |               |   | 23,567 |   |   |   | 2.18 |   |   |   | 3,158,464 |   |   |   | 24,645 |   |   |   | 3.10 |   |
| Noninterest-bearing      liabilities:                                                          |   |               |           |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                                                                                |   |               | 511,802        |   |               |   |   |   |   |   |   |   |   |   | 348,183 |   |   |   |   |   |   |   |   |   |
| Otherliabilities                                                                               |   |               | 85,265         |   |               |   |   |   |   |   |   |   |   |   | 70,869 |   |   |   |   |   |   |   |   |   |
| Total noninterest-bearing      liabilities                                                     |   |               | 597,067        |   |               |   |   |   |   |   |   |   |   |   | 419,052 |   |   |   |   |   |   |   |   |   |
| Total    liabilities                                                                           |   |               | 4,895,589      |   |               |   |   |   |   |   |   |   |   |   | 3,577,516 |   |   |   |   |   |   |   |   |   |
| Shareholders'      equity                                                                      |   |               | 257,435        |   |               |   |   |   |   |   |   |   |   |   | 322,077 |   |   |   |   |   |   |   |   |   |
| Total liabilities and      shareholders' equity                                                |   | $                  | 5,153,024      |   |               |   |   |   |   |   |   |   |   | $ | 3,899,593 |   |   |   |   |   |   |   |   |   |
| Net      interest spread                                                                       |   |               |           |   |               |   |   |   |   |   | 2.51 |   |   |   |   |   |   |   |   |   |   |   | 2.66 |   |
| Effect      of noninterest-bearing sources                                                     |   |               |           |   |               |   |   |   |   |   | 0.24 |   |   |   |   |   |   |   |   |   |   |   | 0.36 |   |
| Net      interest income/margin on earning assets                                              |   |               |           |   |               | $      | 33,527 |   |   |   | 2.75 | % |   |   |   |   |   | $ | 27,200 |   |   |   | 3.02 | % |
|                                                                                           |   |               |           |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less      tax equivalent adjustment                                                            |   |               |           |   |               |   | 2,089 |   |   |   |   |   |   |   |   |   |   |   | 1,903 |   |   |   |   |   |
| Net      interest income                                                                       |   |               |           |   |               | $      | 31,438 |   |   |   |   |   |   |   |   |   |   | $ | 25,297 |   |   |   |   |   |

----

| (Dollars      in thousands)                                                                                                                  |   | Nine Months Ended  |      |   | Nine Months Ended  |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-----------|--------|--------------------|--------|
|                                                                                                                                         |   | September 30, 2009 |      |   | September 30, 2008 |   |
|                                                                                                                                         |   |               |      |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                         |   | Average            |      |   |               |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
| Assets                                                                                                                                       |   | Balance            |      |   | Interest           |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| Earning      assets:                                                                                                                         |   |               |      |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Investment      securities:                                                                                                      |   |               |      |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Taxable      investments                                                                                                   |   | $                  | 858,107   |   |               | $      | 31,000 |   |   |   | 4.83 | % |   | $ | 731,870 |   |   | $ | 28,894 |   |   |   | 5.27 | % |
|    Nontaxable      investments (1)                                                                                            |   |               | 309,551   |   |               |   | 15,064 |   |   |   | 6.51 |   |   |   | 293,371 |   |   |   | 13,290 |   |   |   | 6.05 |   |
|       Total      investment securities                                                                         |   |               | 1,167,658 |   |               |   | 46,064 |   |   |   | 5.27 |   |   |   | 1,025,241 |   |   |   | 42,184 |   |   |   | 5.50 |   |
|   Federal      funds sold, securities purchased under     agreements      to resell and deposits in banks |   |               | 320,436   |   |               |   | 647 |   |   |   | 0.27 |   |   |   | 56,825 |   |   |   | 1,045 |   |   |   | 2.46 |   |
|   Loans      (1)      (2)                                                                                                          |   |               | 3,502,250 |   |               |   | 138,450 |   |   |   | 5.29 |   |   |   | 2,492,498 |   |   |   | 114,013 |   |   |   | 6.11 |   |
|        Total      earning assets                                                                          |   |               | 4,990,344 |   |               |   | 185,161 |   |   |   | 4.96 |   |   |   | 3,574,564 |   |   |   | 157,242 |   |   |   | 5.88 |   |
| Noninterest-earning      assets                                                                                                              |   |               | 454,289   |   |               |   |   |   |   |   |   |   |   |   | 307,982 |   |   |   |   |   |   |   |   |   |
|          Total      assets                                                                      |   | $                  | 5,444,633 |   |               |   |   |   |   |   |   |   |   | $ | 3,882,546 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                         |   |               |      |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities      and Shareholders' Equity                                                                                                    |   |               |      |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      liabilities:                                                                                                           |   |               |      |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      deposits:                                                                                                              |   |               |      |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings and money      market                                                                                                                |   | $                  | 1,919,507 |   |               |   | 15,878 |   |   |   | 1.11 |   |   | $ | 1,387,554 |   |   |   | 19,536 |   |   |   | 1.88 |   |
| Time                                                                                                                                         |   |               | 1,628,284 |   |               |   | 40,818 |   |   |   | 3.35 |   |   |   | 1,208,467 |   |   |   | 40,414 |   |   |   | 4.47 |   |
| Total interest-bearing      deposits                                                                                                         |   |               | 3,547,791 |   |               |   | 56,696 |   |   |   | 2.14 |   |   |   | 2,596,021 |   |   |   | 59,950 |   |   |   | 3.08 |   |
| Borrowed funds                                                                                                                               |   |               | 914,339   |   |               |   | 21,797 |   |   |   | 3.19 |   |   |   | 545,701 |   |   |   | 17,068 |   |   |   | 4.18 |   |
| Total interest bearing      liabilities                                                                                                      |   |               | 4,462,130 |   |               |   | 78,493 |   |   |   | 2.35 |   |   |   | 3,141,722 |   |   |   | 77,018 |   |   |   | 3.27 |   |
| Noninterest-bearing      liabilities:                                                                                                        |   |               |      |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                                                                                                                              |   |               | 492,687   |   |               |   |   |   |   |   |   |   |   |   | 337,739 |   |   |   |   |   |   |   |   |   |
| Otherliabilities                                                                                                                             |   |               | 85,213    |   |               |   |   |   |   |   |   |   |   |   | 69,531 |   |   |   |   |   |   |   |   |   |
| Total noninterest-bearing      liabilities                                                                                                   |   |               | 577,900   |   |               |   |   |   |   |   |   |   |   |   | 407,270 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                                                                                            |   |               | 5,040,030 |   |               |   |   |   |   |   |   |   |   |   | 3,548,992 |   |   |   |   |   |   |   |   |   |
| Shareholders'      equity                                                                                                                    |   |               | 404,603   |   |               |   |   |   |   |   |   |   |   |   | 333,554 |   |   |   |   |   |   |   |   |   |
| Total liabilities and      shareholders' equity                                                                                              |   | $                  | 5,444,633 |   |               |   |   |   |   |   |   |   |   | $ | 3,882,546 |   |   |   |   |   |   |   |   |   |
| Net      interest spread                                                                                                                     |   |               |      |   |               |   |   |   |   |   | 2.61 |   |   |   |   |   |   |   |   |   |   |   | 2.61 |   |
| Effect      of noninterest-bearing sources                                                                                                   |   |               |      |   |               |   |   |   |   |   | 0.25 |   |   |   |   |   |   |   |   |   |   |   | 0.39 |   |
| Net      interest income/margin on earning assets                                                                                            |   |               |      |   |               | $      | 106,668 |   |   |   | 2.86 | % |   |   |   |   |   | $ | 80,224 |   |   |   | 3.00 | % |
|                                                                                                                                         |   |               |      |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less      tax equivalent adjustment                                                                                                          |   |               |      |   |               |   | 6,473 |   |   |   |   |   |   |   |   |   |   |   | 5,531 |   |   |   |   |   |
| Net      interest income                                                                                                                     |   |               |      |   |               | $      | 100,195 |   |   |   |   |   |   |   |   |   |   | $ | 74,693 |   |   |   |   |   |

|  (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 intereston      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      |   | $                 | 132,568 |   |              | $      | (105,895 | )          |   |   | -44.41              | %      |   |   | +/-      35 | % |
| +200      Basis Points      |   |              | 171,377 |   |              |   | (67,086  | )          |   |   | -28.13              | %      |   |   | +/-      25 |   |
| +100      Basis Points      |   |              | 208,040 |   |              |   | (30,423  | )          |   |   | -12.76              | %      |   |   | +/-      15 |   |
| Flat      Rate              |   |              | 238,463 |   |              |   | -        |       |   |   | 0.00                | %      |   |   |   |   |
| -100      Basis Points      |   |              | 268,049 |   |              |   | 29,587   |       |   |   | 12.41               | %      |   |   | +/-      15 |   |
| -200      Basis Points      |   |              | 267,436 |   |              |   | 28,974   |       |   |   | 12.15               | %      |   |   | +/-      25 |   |
| -300      Basis Points      |   |              | 249,699 |   |              |   | 11,236   |       |   |   | 4.71                | %      |   |   | +/-      35 |   |

----

----

|                                                                       |   | Nine      Months Ended |      |
|----------------------------------------------------------------------------|--------|------------------------|-----------|
|                                                                       |   | September      30,     |      |
| (Dollars      in thousands)                                                |   | 2009                   |      |   | 2008 |   |
|                                                                       |   |                   |      |   |   |   |
| Average      loans                                                         |   | $                      | 3,502,250 |   |   | $ | 2,492,498 |   |
|                                                                       |   |                   |      |   |   |   |   |   |
| Allowance,      beginning of period                                        |   | $                      | 49,955    |   |   |   | 27,328 |   |
| Loans      charged off:                                                    |   |                   |      |   |   |   |   |   |
| Real estate                                                                |   |                   | 16,369    |   |   |   | 2,013 |   |
| Commercial and      industrial                                             |   |                   | 8,748     |   |   |   | 751 |   |
| Consumer                                                                   |   |                   | 2,555     |   |   |   | 1,268 |   |
| Lease financing                                                            |   |                   | 13        |   |   |   | 4 |   |
| Total loans charged      off                                               |   |                   | 27,685    |   |   |   | 4,036 |   |
| Recoveries:                                                                |   |                   |      |   |   |   |   |   |
| Real estate                                                                |   |                   | 407       |   |   |   | 377 |   |
| Commercial and      industrial                                             |   |                   | 314       |   |   |   | 66 |   |
| Consumer                                                                   |   |                   | 413       |   |   |   | 280 |   |
| Lease financing                                                            |   |                   | 1         |   |   |   | 6 |   |
| Totalrecoveries                                                            |   |                   | 1,135     |   |   |   | 729 |   |
| Net      loans charged off                                                 |   |                   | 26,550    |   |   |   | 3,307 |   |
| Provision      for loan losses                                             |   |                   | 53,871    |   |   |   | 7,647 |   |
| Allowance,      end of period                                              |   | $                      | 77,276    |   |   | $ | 31,668 |   |
| Ratio      of net charge offs to average loans outstanding    (annualized) |   |                   | 1.01      | % |   |   | 0.18 | % |
|                                                                       |   |                   |      |   |   |   |   |   |

----

|                           |   | September 30, 2009 |   |   | December 31, 2008 |   |
|--------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                           |   |               |   |   | Percent      of   |   |   |   |   |   | Percent      of |   |
| (Dollars      in thousands)    |   | Amount             |   |   | Allowance         |   |   | Amount |   |   | Allowance |   |
|                           |   |               |   |   |              |   |   |   |   |   |   |   |
| Real      estate               |   | $                  | 38,121 |   |              |   | 49 | % |   | $ | 22,051 |   |   |   | 44 | % |
| Commercial      and industrial |   |               | 31,676 |   |              |   | 41 | % |   |   | 20,898 |   |   |   | 42 | % |
| Consumer                       |   |               | 7,472  |   |              |   | 10 | % |   |   | 6,996 |   |   |   | 14 | % |
| Lease      financing           |   |               | 7      |   |              |   | - | % |   |   | 10 |   |   |   | - | % |
| Total                          |   | $                  | 77,276 |   |              |   | 100 | % |   | $ | 49,955 |   |   |   | 100 | % |

----

| (Dollars      in thousands)                             |   | September      30, 2009 |    |   | December      31, 2008 |   |   | September      30, 2008 |   |
|---------------------------------------------------------|--------|-------------------------|---------|--------|------------------------|--------|--------|-------------------------|--------|
|                                                    |   |                    |    |   |                   |   |   |                    |   |
| Nonaccrual      loans                                   |   | $                       | 133,737 |   |                   | $      | 75,060 |                    |   | $ | 36,278 |   |
| Loans      90 days or more past due                     |   |                    | 18,117  |   |                   |   | 1,849  |                    |   |   | 1,275 |   |
| Total nonperforming      loans                          |   |                    | 151,854 |   |                   |   | 76,909 |                    |   |   | 37,553 |   |
| Net      assets in foreclosure                          |   |                    | 1,824   |   |                   |   | 1,626  |                    |   |   | 1,221 |   |
| Total nonperforming      assets                         |   | $                       | 153,678 |   |                   | $      | 78,535 |                    |   | $ | 38,774 |   |
|                                                    |   |                    |    |   |                   |   |   |                    |   |   |   |   |
| Allowance      for loan losses to nonperforming loans   |   |                    | 50.9    | %      |                   |   | 65.00  | %                       |   |   | 84.3 | % |
| Nonperforming      loans to total net loans             |   |                    | 4.79    | %      |                   |   | 2.12   | %                       |   |   | 1.50 | % |
| Allowance      for loan and lease losses to total loans |   |                    | 2.38    | %      |                   |   | 1.36   | %                       |   |   | 1.25 | % |
| Nonperforming      assets to total assets               |   |                    | 2.98    | %      |                   |   | 1.43   | %                       |   |   | 0.98 | % |

| (Dollars      in thousands)                                 |   | September      30, 2009 |    |   | December      31, 2008 |   |   | September      30, 2008 |   |
|-------------------------------------------------------------|--------|-------------------------|---------|--------|------------------------|--------|--------|-------------------------|--------|
|                                                        |   |                    |    |   |                   |   |   |                    |   |
|  Impaired      Loans                                   |   | $                       | 157,367 |   |                   | $      | 70,173 |                    |   | $ | 21,509 |   |
|                                                        |   |                    |    |   |                   |   |   |                    |   |   |   |   |
|  Average      year-to-date impaired loans              |   | $                       | 97,532  |   |                   | $      | 23,469 |                    |   | $ | 16,259 |   |
|                                                        |   |                    |    |   |                   |   |   |                    |   |   |   |   |
|  Impaired      loans with specific loss allowances     |   | $                       | 101,035 |   |                   | $      | 38,354 |                    |   | $ | 21,509 |   |
|                                                        |   |                    |    |   |                   |   |   |                    |   |   |   |   |
|  Loss      allowances reserved on impaired loans       |   | $                       | 25,689  |   |                   | $      | 8,420  |                    |   | $ | 4,572 |   |
|                                                        |   |                    |    |   |                   |   |   |                    |   |   |   |   |
|  Year-to-date      income recognized on impaired loans |   | $                       | 593     |   |                   | $      | 151    |                    |   | $ | 137 |   |

----

----

|    (Dollars      in thousands)  |   |         |    |   |   |   |   |  For      CapitalAdequacy      Purposes |   |   | To      Be Well CapitalizedUnder      Prompt CorrectiveAction      Program |   |
|------------------------------------------------|--------|--------------|---------|--------|--------|--------|--------|----------------------------------------------|--------|--------|----------------------------------------------------------------------------|--------|
|  As of September 30, 2009                 |   | ActualAmount |    |   | Ratio  |   |   | Amount                                       |   |   | Ratio                                                                      |   |   | Amount |   |   | Ratio |   |
|                                           |   |         |    |   |   |   |   |                                         |   |   |                                                                       |   |   |   |   |   |   |   |
| Total      Capital (to risk weighted assets):  |   |         |    |   |   |   |   |                                         |   |   |                                                                       |   |   |   |   |   |   |   |
| Corporation                                    |   | $            | 358,533 |   |   |   | 9.51   | %                                            |   | $      | 301,472                                                                    |   |   |   | 8.00 | % |   | $ | 376,840 |   |   |   | 10 | % |
| Harleysville      National Bank                |   |         | 344,277 |   |   |   | 9.15   | %                                            |   |   | 300,917                                                                    |   |   |   | 8.00 | % |   |   | 376,146 |   |   |   | 10 | % |
| Tier      1 Capital (to risk weighted assets): |   |         |    |   |   |   |   |                                         |   |   |                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporation                                    |   |         | 311,054 |   |   |   | 8.25   | %                                            |   |   | 150,736                                                                    |   |   |   | 4.00 | % |   |   | 226,104 |   |   |   | 6 | % |
| Harleysville      National Bank                |   |         | 296,884 |   |   |   | 7.89   | %                                            |   |   | 150,459                                                                    |   |   |   | 4.00 | % |   |   | 225,688 |   |   |   | 6 | % |
| Tier      1 Capital (to average assets):       |   |         |    |   |   |   |   |                                         |   |   |                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporation                                    |   |         | 311,054 |   |   |   | 6.10   | %                                            |   |   | 203,839                                                                    |   |   |   | 4.00 | % |   |   | 254,798 |   |   |   | 5 | % |
| Harleysville      National Bank                |   |         | 296,884 |   |   |   | 5.83   | %                                            |   |   | 203,560                                                                    |   |   |   | 4.00 | % |   |   | 254,450 |   |   |   | 5 | % |

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|    (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 | % |

----

----

----

----

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|   |    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|---------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • |   | the      potential payment of certain benefits to Paul Geraghty, the President and      Chief Executive Officer of Harleysville National Corporation, George Rapp,      the Chief Financial Officer of Harleysville National Corporation and      Harleysville National Bank, Brent Peters, the Executive Vice President of      Harleysville National Corporation and the President of East Penn Bank,      James McGowan, the Chief Credit Officer of Harleysville National      Corporation and Harleysville National Bank, Lewis Cyr, the Chief Lending      Officer of Harleysville National Corporation and Harleysville National      Bank, Joseph Blair, the President of Millennium Wealth Management, under      their existing employment agreements with Harleysville Management      Services, LLC; |
|   | • |   | the      potential payment of certain benefits to Ammon Baus under his existing      employment agreement with Willow Financial Bank that was assumed by      Harleysville National Corporation;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | • |   | the      potential payment of certain benefits to Demetra Takes, the President and      Chief Executive Officer of Harleysville National Bank under her existing      employment agreement with Harleysville National Corporation and      Harleysville National Bank;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | • |   | the      potential payment of certain benefits to Randy McGarry, the Chief      Information Technology Officer of Harleysville National Bank and Stephen      Murray, a Senior Vice President of Harleysville National Bank, under their      existing change in control agreements with Harleysville Management      Services, LLC;                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | • |   | the      potential payment of certain benefits to Paul Geraghty and James McGowan      under their existing supplemental                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

----

|   |    |   | executive      benefit agreements with Harleysville Management Services, LLC, and the      potential payment of certain benefits to Demetra Takes, under her existing      supplemental executive benefit agreements with Harleysville National      Bank;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|---------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • |   | the      payment of the outstanding benefit obligations to the participants in the      Harleysville National Bank Directors Fee Deferral Plan, which obligations      will be unchanged by the merger;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | • |   | the      payment of outstanding benefit obligations to Donna Coughey, an Executive      Vice President of Harleysville National Bank, under her existing      supplemental executive benefit agreement with Willow Financial Bancorp,      Inc that was assumed by Harleysville National Corporation, which      obligations will be unchanged by the merger;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | • |   | the      payment of the outstanding benefit obligations to Brent Peters under his      existing supplemental executive retirement plan agreement with East Penn      Bank, as assumed by Harleysville National Corporation, which obligations      will be unchanged by the merger;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | • |   | the      payment of the outstanding benefit obligations to Walter Daller, Jr., the      Chairman of the Board of Directors of Harleysville National Corporation      under his existing supplemental executive benefit agreement with      Harleysville National Bank, which obligations will be unchanged by the      merger;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | • |   | the      payment of additional amounts to certain other current and former officers      and employees and former directors under change in control agreements and      deferred compensation arrangements;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | • |   | the      accelerated vesting of all outstanding unvested stock options under the      following equity plans: (i) Harleysville National Corporation 1993 Stock      Incentive Plan; (ii) the Harleysville National Corporation 1998      Independent Directors Stock Option Plan, as amended; (iii) the      Harleysville National Corporation 1998 Stock Incentive Plan; (iv) the      Harleysville National Corporation 2004 Omnibus Stock Incentive Plan (as      amended and restated effective November 9, 2006); (v) Harleysville      National Corporation 2008-2010 Restricted Stock Incentive Plan; (vi) East      Penn Financial Corporation 1999 Stock Incentive Plan, as assumed by      Harleysville National Corporation; (vii) Willow Financial Bancorp, Inc.      Amended and Restated 1999 Stock Option Plan, as assumed by Harleysville      National Corporation; (viii) Willow Financial Bancorp, Inc. Amended and      Restated 2002 Stock Option Plan, as assumed by Harleysville National      Corporation; (ix) East Penn Financial Corporation 1999 Independent      Directors Stock Incentive Plan; (x) Chester Valley Bancorp, Inc. 1997      Stock Option Plan; and (xi) Millennium Bank Stock Compensation Program,      and in each case as amended; and, |
|   | • |   | the      agreement by First Niagara to indemnify Harleysville National Corporation      directors and officers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

----

|   | • |   | Harleysville      National Corporation’s businesses may have been adversely impacted by the      failure to pursue other beneficial opportunities due to the focus of      management on the merger, without realizing any of the anticipated      benefits of completing the merger; and |
|--------|---------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • |   | the      market price of Harleysville National Corporation common stock might      decline to the extent that the current market price reflects a market      assumption that the merger will becompleted.                                                                                      |

----

| (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 with      First Niagara. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| (b)   | There      were no material changes in the manner shareholders may recommend nominees      to the Registrant’s Board ofDirectors. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 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. The schedules 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”). (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. 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 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 uponrequest.)                                                                                                                                                                                                                                                                           |
| (2.5)      | Merger      Agreement, dated as of July 26, 2009, by and between First Niagara      Financial Group, Inc. and Harleysville National Corporation. (Incorporated      by reference to Exhibit 2.1 of the Registrant’s Current Report on Form      8-K, filed with the Commission on July 28, 2009.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (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 with the 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, filed with 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 the Commission 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 reference to 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 March 14,      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, filed with 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.* (Incorporated by 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 Commission on 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, filed with 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 on Form 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 Form 10-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 with the 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 of Directors suspended the DRIP      until further notice.             |

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| Exhibit No | Description of Exhibits                                                                                                                                                                                        |
|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (11)       | Computation      of Earnings per Common Share, incorporated by reference to Part II,      Item 8, Footnote 10, “(Loss) 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 planarrangement. |
|---|-----------------------------------------------------------|

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

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