| 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, 2008 (unaudited) and December 31,      2007                                     |  3  |
|                                                                                                                                                                                                |     |
|            Consolidated      Statements of Income for the Three and Nine Months Ended September 30,      2008 and 2007 (unaudited)           |  4  |
|                                                                                                                                                                                                |     |
|            Consolidated      Statements of Shareholders’ Equity for the Nine Months Ended September 30,      2008 and 2007 (unaudited) |  5  |
|                                                                                                                                                                                                |     |
|            Consolidated      Statements of Cash Flows for the Nine Months Ended September 30, 2008 and      2007 (unaudited)                 |  6  |
|                                                                                                                                                                                                |     |
|            Notes      to Consolidated Financial Statements                                                                                   |  7  |
|                                                                                                                                                                                                |     |
|      Item      2.  Management's Discussion and Analysis of Financial Condition      and Results of Operations                                                    |  19 |
|                                                                                                                                                                                                |     |
|      Item      3. Quantitative and Qualitative Disclosures about Market    Risk                                                                                            |  33 |
|                                                                                                                                                                                                |     |
|      Item      4. Controls and Procedures                                                                                                                                  |  33 |
|                                                                                                                                                                                                |     |
| Part      II.  Other Information                                                                                                                                                          |  34 |
|                                                                                                                                                                                                |     |
|      Item      1.  Legal Proceedings                                                                                                                             |  34 |
|                                                                                                                                                                                                |     |
|      Item      1A.  Risk Factors                                                                                                                                 |  34 |
|                                                                                                                                                                                                |     |
|      Item      2.  Unregistered Sales of Equity Securities and Use of      Proceeds                                                                              |  34 |
|                                                                                                                                                                                                |     |
|      Item      3.  Defaults Upon Senior Securities                                                                                                               |  34 |
|                                                                                                                                                                                                |     |
|      Item      4. Submission of Matters to a Vote of Security Holders                                                                                                      |  34 |
|                                                                                                                                                                                                |     |
|      Item      5. Other Information                                                                                                                                        |  35 |
|                                                                                                                                                                                                |     |
|      Item      6.  Exhibits                                                                                                                                      |  35 |
|                                                                                                                                                                                                |     |
| Signatures                                                                                                                                                                                          |  36 |

----

| PART      1. FINANCIAL INFORMATION                                                                                                |   |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|
| HARLEYSVILLE      NATIONAL CORPORATION AND SUBSIDIARIES                                                                                |   |
| CONSOLIDATED      BALANCE SHEETS                                                                                                       |   |
|                                                                                                                                   |   |
| (Dollars      in thousands)                                                                                                            |   | September      30, 2008 |   |   | December      31, 2007 |   |
|                                                                                                                                   |   | (Unaudited) |   |   |   |   |
| Assets                                                                                                                                 |   |   |   |   |   |   |
| Cash      and due from banks                                                                                                           |   | $ | 50,870 |   |   | $ | 73,930 |   |
| Federal      funds sold and securities purchased under agreements to    resell                                                         |   |   | 100,600 |   |   |   | 131,600 |   |
| Interest-bearing      deposits in banks                                                                                                |   |   | 3,366 |   |   |   | 3,873 |   |
|     Total      cash and cash equivalents                                                                           |   |   | 154,836 |   |   |   | 209,403 |   |
| Residential      mortgage loans held for sale                                                                                          |   |   | 1,222 |   |   |   | 1,140 |   |
| Investment      securities available for sale (at fair      value)                                                                |   |   | 912,099 |   |   |   | 910,367 |   |
| Investment      securities held to maturity (market value $52,652 and $57,518, respectively)                                           |   |   | 53,003 |   |   |   | 57,347 |   |
| Federal      Home Loan Bank stock, Federal Reserve Bank stock and other      investments                                               |   |   | 18,247 |   |   |   | 15,201 |   |
| Loans      and leases                                                                                                                  |   |   | 2,537,815 |   |   |   | 2,459,683 |   |
| Less:      Allowance for loan losses                                                                                                   |   |   | (31,668 | ) |   |   | (27,328 | ) |
|              Net      loans                                           |   |   | 2,506,147 |   |   |   | 2,432,355 |   |
| Premises      and equipment, net                                                                                                       |   |   | 35,316 |   |   |   | 32,518 |   |
| Accrued      interest receivable                                                                                                       |   |   | 16,029 |   |   |   | 16,456 |   |
| Goodwill                                                                                                                               |   |   | 110,278 |   |   |   | 111,155 |   |
| Intangible      assets, net                                                                                                            |   |   | 12,877 |   |   |   | 13,340 |   |
| Bank-owned      life insurance                                                                                                         |   |   | 74,316 |   |   |   | 72,269 |   |
| Other      assets                                                                                                                      |   |   | 55,360 |   |   |   | 31,450 |   |
|          Total      assets                                                                |   | $ | 3,949,730 |   |   | $ | 3,903,001 |   |
| Liabilities      and Shareholders' Equity                                                                                              |   |   |   |   |   |   |   |   |
| Deposits:                                                                                                                              |   |   |   |   |   |   |   |   |
|    Noninterest-bearing                                                                                                  |   | $ | 343,308 |   |   | $ | 358,258 |   |
|    Interest-bearing:                                                                                                    |   |   |   |   |   |   |   |   |
|      Checking                                                                                                 |   |   | 430,607 |   |   |   | 482,104 |   |
|      Money      market                                                                                        |   |   | 727,693 |   |   |   | 796,325 |   |
|      Savings                                                                                                  |   |   | 182,342 |   |   |   | 145,681 |   |
|      Time      deposits                                                                                       |   |   | 1,334,326 |   |   |   | 1,202,690 |   |
|           Total      deposits                                                        |   |   | 3,018,276 |   |   |   | 2,985,058 |   |
| Federal      funds purchased and short-term securities sold under agreements      to      repurchase                                   |   |   | 94,043 |   |   |   | 101,493 |   |
| Other      short-term borrowings                                                                                                       |   |   | 1,163 |   |   |   | 2,015 |   |
| Long-term      borrowings                                                                                                              |   |   | 368,755 |   |   |   | 321,785 |   |
| Accrued      interest payable                                                                                                          |   |   | 35,062 |   |   |   | 28,810 |   |
| Subordinated      debt                                                                                                                 |   |   | 82,992 |   |   |   | 82,992 |   |
| Other      liabilities                                                                                                                 |   |   | 38,445 |   |   |   | 41,538 |   |
|           Total      liabilities                                                     |   |   | 3,638,736 |   |   |   | 3,563,691 |   |
| 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 75,000,000    shares,                                    |   |   |   |   |   |   |   |   |
|         issued      31,507,021 shares at September 30, 2008 and at December      31, 2007 |   |   | 31,507 |   |   |   | 31,507 |   |
|     Additional      paid in capital                                                                                |   |   | 230,705 |   |   |   | 231,130 |   |
|     Retained      earnings                                                                                         |   |   | 84,762 |   |   |   | 82,311 |   |
|     Accumulated      other comprehensive loss                                                                 |   |   | (34,469 | ) |   |   | (2,566 | ) |
|     Treasury      stock, at cost: 85,887 shares at September 30, 2008 and                                          |   |   |   |   |   |   |   |   |
|        174,605      shares at December 31, 2007                                                     |   |   | (1,511 | ) |   |   | (3,072 | ) |
|           Total      shareholders' equity                                            |   |   | 310,994 |   |   |   | 339,310 |   |
|           Total      liabilities and shareholders' equity                            |   | $ | 3,949,730 |   |   | $ | 3,903,001 |   |

----

| HARLEYSVILLE      NATIONAL CORPORATION AND SUBSIDIARIES                                               |   |
|-------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED      STATEMENTS OF INCOME(Unaudited)                                                     |   |
|                                                                                                  |   | Three      Months Ended |   |   | Nine      Months Ended |   |
|                                                                                                  |   | September      30, |   |   | September      30 |   |
|  (Dollars      in thousands, except per share information)                                       |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Income:                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans      and leases, including fees                                                                 |   | $ | 37,106 |   |   | $ | 36,853 |   |   | $ | 112,747 |   |   | $ | 106,941 |   |
| Investment      securities:                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Taxable                                                                                   |   |   | 9,518 |   |   |   | 8,769 |   |   |   | 28,894 |   |   |   | 25,821 |   |
|   Exempt      from federal taxes                                                            |   |   | 3,086 |   |   |   | 2,739 |   |   |   | 9,025 |   |   |   | 8,113 |   |
| Federal      funds sold and securities purchased under agreements to    resell                        |   |   | 212 |   |   |   | 557 |   |   |   | 963 |   |   |   | 2,325 |   |
| Deposits      in banks                                                                                |   |   | 20 |   |   |   | 104 |   |   |   | 82 |   |   |   | 228 |   |
|      Total      interest income                                              |   |   | 49,942 |   |   |   | 49,022 |   |   |   | 151,711 |   |   |   | 143,428 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Expense:                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings      and money market deposits                                                                |   |   | 5,780 |   |   |   | 12,276 |   |   |   | 19,536 |   |   |   | 37,212 |   |
| Time      deposits                                                                                    |   |   | 12,976 |   |   |   | 9,652 |   |   |   | 40,414 |   |   |   | 28,670 |   |
| Short-term      borrowings                                                                            |   |   | 551 |   |   |   | 1,735 |   |   |   | 1,847 |   |   |   | 4,288 |   |
| Long-term      borrowings                                                                             |   |   | 5,338 |   |   |   | 4,495 |   |   |   | 15,221 |   |   |   | 12,402 |   |
|      Total      interest expense                                             |   |   | 24,645 |   |   |   | 28,158 |   |   |   | 77,018 |   |   |   | 82,572 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      interest income                                                                              |   |   | 25,297 |   |   |   | 20,864 |   |   |   | 74,693 |   |   |   | 60,856 |   |
| Provision      for loan losses                                                                        |   |   | 2,580 |   |   |   | 2,525 |   |   |   | 7,647 |   |   |   | 6,075 |   |
| Net      interest income after provision for loan losses                                              |   |   | 22,717 |   |   |   | 18,339 |   |   |   | 67,046 |   |   |   | 54,781 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest      Income:                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service      charges                                                                                  |   |   | 3,424 |   |   |   | 2,460 |   |   |   | 9,849 |   |   |   | 6,820 |   |
| Gain      on sales of investment securities, net                                                      |   |   | - |   |   |   | (58 | ) |   |   | 225 |   |   |   | 475 |   |
| Wealth      management                                                                                |   |   | 3,779 |   |   |   | 4,525 |   |   |   | 12,623 |   |   |   | 13,623 |   |
| Bank-owned      life insurance                                                                        |   |   | 706 |   |   |   | 648 |   |   |   | 2,047 |   |   |   | 1,833 |   |
| Other      income                                                                                     |   |   | 2,536 |   |   |   | 2,190 |   |   |   | 8,129 |   |   |   | 6,416 |   |
|      Total      noninterest income                                           |   |   | 10,445 |   |   |   | 9,765 |   |   |   | 32,873 |   |   |   | 29,167 |   |
|      Net      interest income after provision for loan losses and            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|              noninterest      income |   |   | 33,162 |   |   |   | 28,104 |   |   |   | 99,919 |   |   |   | 83,948 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest      Expense:                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries,      wages and employee benefits                                                            |   |   | 13,539 |   |   |   | 11,735 |   |   |   | 41,599 |   |   |   | 35,782 |   |
| Occupancy                                                                                             |   |   | 2,412 |   |   |   | 1,731 |   |   |   | 7,438 |   |   |   | 4,965 |   |
| Furniture      and equipment                                                                          |   |   | 1,074 |   |   |   | 897 |   |   |   | 3,251 |   |   |   | 2,890 |   |
| Marketing                                                                                             |   |   | 267 |   |   |   | 466 |   |   |   | 995 |   |   |   | 1,282 |   |
| Merger      charges                                                                                   |   |   | 974 |   |   |   | 25 |   |   |   | 974 |   |   |   | 84 |   |
| Other      expense                                                                                    |   |   | 6,887 |   |   |   | 4,002 |   |   |   | 19,072 |   |   |   | 12,773 |   |
|      Total      noninterest expense                                          |   |   | 25,153 |   |   |   | 18,856 |   |   |   | 73,329 |   |   |   | 57,776 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      before income tax expense                                                                 |   |   | 8,009 |   |   |   | 9,248 |   |   |   | 26,590 |   |   |   | 26,172 |   |
| Income      tax expense                                                                               |   |   | 1,370 |   |   |   | 2,047 |   |   |   | 5,320 |   |   |   | 5,758 |   |
| Net      income                                                                                       |   | $ | 6,639 |   |   | $ | 7,201 |   |   | $ | 21,270 |   |   | $ | 20,414 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income per share information:                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Basic                                                                         |   | $ | 0.21 |   |   | $ | 0.25 |   |   | $ | 0.68 |   |   | $ | 0.71 |   |
|     Diluted                                                                       |   | $ | 0.21 |   |   | $ | 0.25 |   |   | $ | 0.67 |   |   | $ | 0.70 |   |
| Cash      dividends per share                                                                         |   | $ | 0.20 |   |   | $ | 0.20 |   |   | $ | 0.60 |   |   | $ | 0.60 |   |
| Weighted      average number of common shares:                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Basic                                                                         |   |   | 31,385,257 |   |   |   | 28,881,006 |   |   |   | 31,363,779 |   |   |   | 28,930,073 |   |
|     Diluted                                                                       |   |   | 31,551,026 |   |   |   | 29,107,274 |   |   |   | 31,531,942 |   |   |   | 29,183,811 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| 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 |   |   |   |   |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| Nine Months      Ended September 30,      2007                                  |   |
|---------------------------------------------------------------------------------|--------|
|                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                            |   | 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, 2007                                                   |   |   | 29,074 |   |   |   | (109 | ) |   | $ | 29,074 |   |   | $ | 194,713 |   |   | $ | 79,339 |   |   | $ | (6,103 | ) |   | $ | (2,272 | ) |   | $ | 294,751 |   |   |   |   |
| Issuance      of stock for stock options, net of tax and excess tax    benefits |   |   | - |   |   |   | 57 |   |   |   | - |   |   |   | (266 | ) |   |   | - |   |   |   | - |   |   |   | 1,060 |   |   |   | 794 |   |   |   |   |
| Issuance      of stock awards                                                   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1 | ) |   |   | - |   |   |   | - |   |   |   | 5 |   |   |   | 4 |   |   |   |   |
| Stock      based compensation expense                                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 201 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 201 |   |   |   |   |
| Net      income                                                                 |   |   | -- |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 20,414 |   |   |   | - |   |   |   | - |   |   |   | 20,414 |   |   | $ | 20,414 |   |
| Other      comprehensive loss, net of reclassifications and tax                 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,214 | ) |   |   | - |   |   |   | (2,214 | ) |   |   | (2,214 | ) |
| Purchase      of treasury stock                                                 |   |   | - |   |   |   | (141 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,196 | ) |   |   | (2,196 | ) |   |   |   |   |
| Cash      dividends                                                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (17,360 | ) |   |   | - |   |   |   | - |   |   |   | (17,360 | ) |   |   |   |   |
| Comprehensive      income                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 18,200 |   |
| Balance,      September 30, 2007                                                |   |   | 29,074 |   |   |   | (193 | ) |   | $ | 29,074 |   |   | $ | 194,647 |   |   | $ | 82,393 |   |   | $ | (8,317 | ) |   | $ | (3,403 | ) |   | $ | 294,394 |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                            |   |
| 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, |   |
|                                                                                                                                                            |   | 2008 |   |   | 2007 |   |
| Operating      Activities:                                                                                                                                      |   |   |   |   |   |   |
|   Net      income                                                                                                                                     |   | $ | 21,270 |   |   | $ | 20,414 |   |
|   Adjustments      to reconcile net income to net cash provided by operating      activities:                                                         |   |   |   |   |   |   |   |   |
|     Provision      for loan losses                                                                                                          |   |   | 7,647 |   |   |   | 6,075 |   |
|     Depreciation      and amortization                                                                                                      |   |   | 5,071 |   |   |   | 3,728 |   |
|     Net      amortization of investment securities discounts/premiums                                                                       |   |   | 811 |   |   |   | 1,394 |   |
|     Deferred      income tax benefit                                                                                                        |   |   | (3,327 | ) |   |   | (1,513 | ) |
|     Gain      on sales of investment securities, net                                                                                        |   |   | (225 | ) |   |   | (475 | ) |
|     Bank-owned      life insurance income                                                                                                   |   |   | (2,047 | ) |   |   | (1,833 | ) |
|     Stock      based compensation expense                                                                                                   |   |   | 125 |   |   |   | 201 |   |
|     Net      decrease (increase) in accrued interest receivable                                                                             |   |   | 427 |   |   |   | (767 | ) |
|     Net      increase (decrease) in accrued interest payable                                                                                |   |   | 6,252 |   |   |   | (9,411 | ) |
|     Net      (increase) decrease in other assets                                                                                            |   |   | (2,121 | ) |   |   | 1,339 |   |
|     Net      (decrease) increase in other liabilities                                                                                       |   |   | (2,401 | ) |   |   | 1,263 |   |
|     Other,      net                                                                                                                         |   |   | 26 |   |   |   | 5 |   |
|        Net      cash provided by operating activities                                                                        |   |   | 31,508 |   |   |   | 20,420 |   |
| Investing      Activities:                                                                                                                                      |   |   |   |   |   |   |   |   |
|     Proceeds      from sales of investment securities available for sale                                                                    |   |   | 115,331 |   |   |   | 90,529 |   |
| Proceeds from maturity or calls      of investment securities held to maturity                                                                                  |   |   | 4,300 |   |   |   | ― |   |
|     Proceeds      from maturity or calls of investment securities available for      sale                                                   |   |   | 129,703 |   |   |   | 110,710 |   |
|     Proceeds,      redemption Federal Home Bank stock and reduction in other      investments                                               |   |   | 5,504 |   |   |   | 6,774 |   |
|     Purchases      of investment securities available for sale                                                                              |   |   | (296,542 | ) |   |   | (225,371 | ) |
| Purchases of Federal Home Bank      stock, Federal Reserve Bank stock and other investments                                                                     |   |   | (8,549 | ) |   |   | (3,570 | ) |
|     Net      increase in loans                                                                                                              |   |   | (83,518 | ) |   |   | (54,776 | ) |
| Net cash paid due to      acquisitions, net of cash acquired                                                                                                    |   |   | (1,200 | ) |   |   | (2,500 | ) |
|     Purchases      of premises and equipment                                                                                                |   |   | (6,563 | ) |   |   | (9,451 | ) |
|          Proceeds from sales of premises and equipment                                                                                           |   |   | 675 |   |   |   | 2 |   |
|     Proceeds      from sales of other real estate                                                                                           |   |   | 685 |   |   |   | 13 |   |
|        Net      cash used in investing activities                                                                            |   |   | (140,174 | ) |   |   | (87,640 | ) |
| Financing      Activities:                                                                                                                                      |   |   |   |   |   |   |   |   |
|   Net      decrease in deposits                                                                                                                       |   |   | 33,218 |   |   |   | 27,485 |   |
|   (Decrease)      increase in federal funds purchased and short-term securities sold under      agreements to     repurchase |   |   | (7,450 | ) |   |   | 18,988 |   |
|   (Decrease)      increase in other short-term borrowings                                                                                             |   |   | (852 | ) |   |   | 549 |   |
|   Advances      of long-term borrowings                                                                                                               |   |   | 80,000 |   |   |   | 125,000 |   |
|   Repayments      of long-term borrowings                                                                                                             |   |   | (33,000 | ) |   |   | (55,000 | ) |
|   Proceeds      from subordinated debt issuance                                                                                                       |   |   | – |   |   |   | 23,196 |   |
|   Cash      dividends                                                                                                                                 |   |   | (18,819 | ) |   |   | (17,360 | ) |
|   Repurchase      of common stock                                                                                                                     |   |   | – |   |   |   | (2,196 | ) |
|   Proceeds      from the exercise of stock options                                                                                                    |   |   | 847 |   |   |   | 753 |   |
|   Excess      tax benefits from stock based compensation                                                                                              |   |   | 155 |   |   |   | 3 |   |
|     Net      cash provided by financing activities                                                                                          |   |   | 54,099 |   |   |   | 121,418 |   |
| Net      (decrease) increase in cash and cash equivalents                                                                                                       |   |   | (54,567 | ) |   |   | 54,198 |   |
| Cash      and cash equivalents at beginning of period                                                                                                           |   |   | 209,403 |   |   |   | 124,870 |   |
| Cash      and cash equivalents at end of the period                                                                                                             |   | $ | 154,836 |   |   | $ | 179,068 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |
|   Cash      paid during the period for:                                                                                                               |   |   |   |   |   |   |   |   |
|      Interest                                                                                                                          |   | $ | 71,248 |   |   | $ | 92,005 |   |
|      Income      taxes                                                                                                                 |   | $ | 16,367 |   |   | $ | 4,061 |   |
|   Supplemental      disclosure of noncash investing and financing activities:                                                                         |   |   |   |   |   |   |   |   |
|      Transfer      of assets from loans to net assets in foreclosure                                                                   |   | $ | 1,882 |   |   | $ | 51 |   |
|                                                                                                                                                            |   |
| See      accompanying notes to consolidated financial statements.                                                                                               |   |

----

,“Accounting for Convertible Debt andDebt Issued with Stock Purchase Warrants,” and specifies thatissuers of such instruments should separately account for the liability andequity components in a manner that will reflect the entity's nonconvertible debtborrowing rate when interest cost is recognized in subsequent periods. APB 14-1is effective for financial statements issued for fiscal years beginning afterDecember 15, 2008, and interim periods within those fiscal years, and is notanticipated to have a material impact on the Corporation’s financialstatements.

----

----

|                                                  |   | Community      Banking           |   |        Wealth      Management |   |    |        Total |   |
|-------------------------------------------------------|--------|----------------------------------|--------|------------------------------------|--------|---------|-------------------|--------|
|                                                  |   | (Dollars in thousands) |   |
| Balance,      January 1, 2008                         |   | $                                | 96,426 |                               |   | $       | 14,729            |   |   | $ | 111,155 |   |   |   |
| Purchase      accounting adjustments for acquisitions |   |                             | (948   | )                                  |   |    | 71           |   |   |   | (877 | ) |   |   |
| Balance,      September 30, 2008                      |   | $                                | 95,478 |                               |   |  $ | 14,800       |   |   |  $ | 110,278  |   |   |   |

|                                | September      30,               |                          | December 31, |                                   |   |
|-------------------------------------|----------------------------------|-------------------------------|-------------------|----------------------------------------|--------|
|                                |  2008                       |  2007                    |              |                                   |
|                                | Gross      Carrying Amount       | Accumulated      Amortization |              |        Gross      Carrying Amount |   |   |   |        Accumulated      Amortization |   |   |   |
|                                | (Dollars in thousands) |                          |              |
| Core      deposit intangibles       |                             |                          | $                 | 9,144                                  |   |   | $ | 2,099 |   |   | $ | 8,351 |   |   |   | $ | 1,061 |   |   |
| Other      identifiable intangibles |                             |                          |              | 4,293                                  |   |   |   | 1,350 |   |   |   | 4,288 |   |   |   |   | 927 |   |   |
| Total                               |                             |                          | $                 | 13,437                                 |   |   | $ | 3,449 |   |   | $ | 12,639 |   |   |   | $ | 1,988 |   |   |

----

its termination. Employees ceased to accrue additional pensionbenefits as of December 31, 2007
, andpension benefits are not being provided under a successor pension plan. Allretirement benefits earned in the pension plan as of December 31, 2007, werepreserved and all participants became fully vested in their benefit upon plantermination. On July 3, 2008, the Corporation purchased $896,000 of terminalfunding annuity contracts for participants presently in pay status. During 2008,it is anticipated that the majority of assets will be distributed to thoseparticipants who elect lump sum payments and annuities will be purchased for allother participants.

The Corporationrecorded a one-time pre-tax charge related to the pension plan curtailment ofapproximately $1.9 million in the fourth quarter of 2007. The curtailment chargewas recorded in other expenses in the statement of income and impacted theCommunity Banking and Wealth Management segments.

| (Dollars      in thousands)             |   | Nine      Months Ended September 30, |    |
|-----------------------------------------|--------|--------------------------------------|---------|
|                                    |   | 2008                                 |    |   | 2007 |   |
| Net periodic benefit cost               |   |                                 |    |   |   |   |
| Service      cost                       |   | $                                    | ― |   |   | $ | 875 |   |
| Interest      cost                      |   |                                 | ― |   |   |   | 512 |   |
| Expected      return on plan assets     |   |                                 | ― |   |   |   | (450 | ) |
| Amortization      of net actuarial loss |   |                                 | ― |   |   |   | 57 |   |
| Net      periodic benefit expense       |   | $                                    | ― |   |   | $ | 994 |   |

----

| Options                                |   |   Shares |          |   | Weighted-Average      Exercise Price |   |    | Weighted-Average      Remaining Contractual Term (in      years) |   |   | Aggregate Intrinsic      Value(in      thousands) |   |
|----------------------------------------|--------|--------------------|---------------|--------|--------------------------------------|--------|---------|-----------------------------------------------------------------------|--------|--------|--------------------------------------------------------|--------|
| Outstanding      at January 1, 2008    |   |               | 1,113,499     |   |                                 | $      | 15.74   |                                                                  |   |   |                                                   |   |   |   |
| Granted                                |   |               | —       |   |                                 |   | — |                                                                  |   |   |                                                   |   |   |   |
| Exercised                              |   |               | (88,592       | )      |                                 |   | 9.46    |                                                                  |   |   |                                                   |   |   |   |
| Forfeited      (unvested)              |   |               | (9,275        | )      |                                 |   | 21.08   |                                                                  |   |   |                                                   |   |   |   |
| Cancelled      (vested)                |   |               |  (10,101 | )      |                                 |   | 23.46   |                                                                  |   |   |                                                   |   |   |   |
|                                   |   |               |          |   |                                 |   |    |                                                                  |   |   |                                                   |   |   |   |
| Outstanding      at September 30, 2008 |   |               | 1,005,531     |   |                                 | $      | 16.17   |                                                                  |   |   | 3.94                                                   |   |   | $ | 3,793 |   |
|                                   |   |               |          |   |                                 |   |    |                                                                  |   |   |                                                   |   |   |   |   |   |
| Exercisable      at September 30, 2008 |   |               |  911,687 |   |                                 | $      | 15.77   |                                                                  |   |   | 3.60                                                   |   |   | $ | 3,731 |   |
|                                   |   |               |          |   |                                 |   |    |                                                                  |   |   |                                                   |   |   |   |   |   |

| Nonvested      Shares                |   | Shares |    |   | Weighted-AverageGrant-Date      Fair Value |   |
|--------------------------------------|--------|--------|---------|--------|--------------------------------------------|--------|
|                                 |   |   |    |   |                                       |   |
| Nonvested      at January 1, 2008    |   |   | 108,736 |   |                                       | $      | 5.37 |   |
|                                 |   |   |    |   |                                       |   |   |   |
| Granted                              |   |   | — |   |                                       |   | — |   |
|                                 |   |   |    |   |                                       |   |   |   |
| Vested                               |   |   | (5,615  | )      |                                       |   | 6.07 |   |
|                                 |   |   |    |   |                                       |   |   |   |
| Forfeited                            |   |   | (9,276  | )      |                                       |   | 5.86 |   |
|                                 |   |   |    |   |                                       |   |   |   |
| Nonvested      at September 30, 2008 |   |   | 93,845  |   |                                       | $      | 5.28 |   |

----

|                                                                                                       |   |  Three      Months EndedSeptember      30, |       | Nine      Months EndedSeptember      30, |
|------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|------------|------------------------------------------|
| (Dollars      in thousands, except per share data)                                                         |   | 2008                                            |       |                                     |   2007 |   | 2008 |   |   | 2007 |
|                                                                                                       |   |                                            |       |                                     |   |   |   |   |
| Basic      earnings per share                                                                              |   |                                            |       |                                     |   |   |   |   |
| Net      income available to common shareholders                                                           |   | $                                               | 6,639      |                                     |   | $ | 7,201 |   |   | $ | 21,270 |   |   | $ | 20,414 |
| Weighted      average common shares outstanding                                                            |   |                                            | 31,385,257 |                                     |   |   | 28,881,006 |   |   |   | 31,363,779 |   |   |   | 28,930,073 |
| Basic      earnings per share                                                                              |   | $                                               | .21        |                                     |   | $ | .25 |   |   | $ | .68 |   |   | $ | .71 |
|                                                                                                       |   |                                            |       |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Diluted      earnings per share                                                                            |   |                                            |       |                                     |   |   |   |   |   |   |   |   |   |   |   |
|  Net      income available to common shareholders    and      assumed conversions |   | $                                               | 6,639      |                                     |   | $ | 7,201 |   |   | $ | 21,270 |   |   | $ | 20,414 |
| Weighted      average common shares outstanding                                                            |   |                                            | 31,385,257 |                                     |   |   | 28,881,006 |   |   |   | 31,363,779 |   |   |   | 28,930,073 |
| Dilutive      potential common shares (1),      (2)                                                        |   |                                            | 165,769    |                                     |   |   | 226,268 |   |   |   | 168,163 |   |   |   | 253,738 |
| Total      diluted weighted average common shares outstanding                                              |   |                                            | 31,551,026 |                                     |   |   | 29,107,274 |   |   |   | 31,531,942 |   |   |   | 29,183,811 |
|  Diluted      earnings per share                                                                      |   | $                                               | .21        |                                     |   | $ | .25 |   |   | $ | .67 |   |   | $ | .70 |
|                                                                                                       |   |                                            |       |                                     |   |   |   |   |   |   |   |   |   |   |   |

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

| (2)   | Antidilutive      options have been excluded in the computation of diluted earnings per      share because the options’ exercise prices were greater than the average      market price of the common stock. For the three months ended September 30,      2008 and 2007, there were 524,120 antidilutive options at an average price      of $21.15 and 479,896 antidilutive options at an average price of $23.46,      respectively. For the nine months ended September 30, 2008 and 2007, there      were 524,120 antidilutive options at an average price of $21.15 and      465,425 antidilutive options at an average price of $23.66,      respectively. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Comprehensive Loss                                                                                |   |
|---------------------------------------------------------------------------------------------------|--------|
|                                                                                              |   |   |   |   |   |   |   |   |   |
| (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)                                                                       |   | Before      tax |   |   | Tax      Benefit |   |   | Net      of tax |   |
| Nine      months      ended September 30,      2007                                               |   | Amount |   |   | (Expense) |   |   | Amount |   |
| Net      unrealized losses on available for sale securities:                                      |   |   |   |   |   |   |   |   |   |   |   |   |
|    Net      unrealized holding losses arising during period                        |   | $ | (2,320 | ) |   | $ | 812 |   |   | $ | (1,508 | ) |
|    Less      reclassification adjustment for net gains realized in net      income |   |   | 475 |   |   |   | (166 | ) |   |   | 309 |   |
|    Net      unrealized losses                                                      |   |   | (2,795 | ) |   |   | 978 |   |   |   | (1,817 | ) |
|    Change      in fair value of derivatives used for cash flow hedges              |   |   | (611 | ) |   |   | 214 |   |   |   | (397 | ) |
|   Other      comprehensive loss, net                                                    |   | $ | (3,406 | ) |   | $ | 1,192 |   |   | $ | (2,214 | ) |

|        (Dollars in Thousands) |   | Net      Unrealized Losses on Available For Sale Securities |    |   | Net      Change in Fair Value of Derivatives Used for Cash Flow    Hedges |   |   | Net      Change Related to Defined Benefit Pension Plan |   | Transition      Asset Related to Defined Benefit Pension Plan | Accumulated      Other Comprehensive Loss |
|------------------------------------|--------|------------------------------------------------------------------|---------|--------|---------------------------------------------------------------------------|--------|--------|---------------------------------------------------------|--------|---------------------------------------------------------------|-------------------------------------------|
| Balance,      January 1, 2007      |   | $                                                                | (4,872  | )      |                                                                      | $      | 304    |                                                    |   | $                                                             | (1,579                                    | ) |   | $ | 44 |   | $ | (6,103 | ) |
| Net      Change                    |   |                                                             | (1,817  | )      |                                                                      |   | (397   | )                                                       |   |                                                          | -                                         |   |   |   |   |   |   | (2,214 | ) |
| Balance,      September 30, 2007   |   | $                                                                | (6,689  | )      |                                                                      | $      | (93    | )                                                       |   | $                                                             | (1,579                                    | )  |   | $ | 44 |   | $ | (8,317 | )  |
|                               |   |                                                             |    |   |                                                                      |   |   |                                                    |   |                                                          |                                      |   |   |   |   |   |   |   |   |
| 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 | ) |

----

| (Dollars      in thousands)                      |   | Community      Banking |   |   | Wealth Management |   |   | All      Other |   |   | Consolidated      Totals |   |
|--------------------------------------------------|--------|------------------------|--------|--------|------------------------|--------|--------|----------------|--------|--------|--------------------------|--------|
| Three      Months Ended September 30, 2008       |   |                   |   |   |                   |   |   |           |   |   |                     |   |
|                                             |   |                   |   |   |                   |   |   |           |   |   |                     |   |
| Net      interest income (expense)               |   | $                      | 26,365 |   |                   | $      | 169    |           |   | $      | (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 (benefit) |   |                   | 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 |   |
|                                             |   |                   |   |   |                   |   |   |           |   |   |                     |   |   |   |   |   |
| Three      Months Ended September 30, 2007       |   |                   |   |   |                   |   |   |           |   |   |                     |   |   |   |   |   |
|                                             |   |                   |   |   |                   |   |   |           |   |   |                     |   |   |   |   |   |
| Net      interest income (expense)               |   | $                      | 21,348 |   |                   | $      | 117    |           |   | $      | (601                     | )      |   | $ | 20,864 |   |
| Provision      for loan losses                   |   |                   | 2,525  |   |                   |   | -      |           |   |   | -                        |   |   |   | 2,525 |   |
| Noninterest      income                          |   |                   | 5,111  |   |                   |   | 4,530  |           |   |   | 124                      |   |   |   | 9,765 |   |
| Noninterest      expense                         |   |                   | 14,960 |   |                   |   | 3,747  |           |   |   | 149                      |   |   |   | 18,856 |   |
| Income      (loss) before income taxes (benefit) |   |                   | 8,974  |   |                   |   | 900    |           |   |   | (626                     | )      |   |   | 9,248 |   |
| Income      taxes (benefit)                      |   |                   | 1,974  |   |                   |   | 332    |           |   |   | (259                     | )      |   |   | 2,047 |   |
| Net      income (loss)                           |   | $                      | 7,000  |   |                   | $      | 568    |           |   | $      | (367                     | )      |   | $ | 7,201 |   |

| (Dollars      in thousands)                      |   | Community      Banking |      |   | Wealth Management |   |   | All      Other |   |   | Consolidated      Totals |   |
|--------------------------------------------------|--------|------------------------|-----------|--------|------------------------|--------|--------|----------------|--------|--------|--------------------------|--------|
| 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 (benefit) |   |                   | 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 |   |
|                                             |   |                   |      |   |                   |   |   |           |   |   |                     |   |   |   |   |   |
| Nine      Months Ended September 30, 2007        |   |                   |      |   |                   |   |   |           |   |   |                     |   |   |   |   |   |
|                                             |   |                   |      |   |                   |   |   |           |   |   |                     |   |   |   |   |   |
| Net      interest income (expense)               |   | $                      | 62,188    |   |                   | $      | 334    |           |   | $      | (1,666                   | )      |   | $ | 60,856 |   |
| Provision      for loan losses                   |   |                   | 6,075     |   |                   |   | -      |           |   |   | -                        |   |   |   | 6,075 |   |
| Noninterest      income                          |   |                   | 15,021    |   |                   |   | 13,631 |           |   |   | 515                      |   |   |   | 29,167 |   |
| Noninterest      expense                         |   |                   | 46,005    |   |                   |   | 11,001 |           |   |   | 770                      |   |   |   | 57,776 |   |
| Income      (loss) before income taxes (benefit) |   |                   | 25,129    |   |                   |   | 2,964  |           |   |   | (1,921                   | )      |   |   | 26,172 |   |
| Income      taxes (benefit)                      |   |                   | 5,409     |   |                   |   | 1,154  |           |   |   | (805                     | )      |   |   | 5,758 |   |
| Net      income (loss)                           |   | $                      | 19,720    |   |                   | $      | 1,810  |           |   | $      | (1,116                   | )      |   | $ | 20,414 |   |
|                                             |   |                   |      |   |                   |   |   |           |   |   |                     |   |   |   |   |   |
| Assets                                           |   | $                      | 3,321,817 |   |                   | $      | 22,341 |           |   | $      | 36,361                   |   |   | $ | 3,380,519 |   |

----

|                                                                                                 |   | Total      Amount Committed at |    |
|------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|
| Commitments                                                                                          |   | September      30, 2008   |    |   | December      31, 2007 |   |
| (Dollars      in thousands)                                                                          |
|                                                                                                 |   |                           |    |   |   |   |
| Financial      instruments whose contract amounts represent credit risk:                             |   |                           |    |   |   |   |
| Commitments to extend      credit                                                                    |   | $                              | 807,163 |   |   | $ | 822,995 |   |
| Standby letters of credit and      financial guarantees written                                      |   |                           | 34,698  |   |   |   | 23,473 |   |
| Financial      instruments whose notional or contract amounts exceed the amount of credit      risk: |   |                           |    |   |   |   |   |   |
| Interest rate swap      agreements                                                                   |   |                           | 116,944 |   |   |   | 58,928 |   |
| Interest rate cap      agreements                                                                    |   |                           | 200,000 |   |   |   | 200,000 |   |

----

----

|                                           |   | 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, 2008 |   |
| Assets                                         |   |                                                                                |    |   |                                                   |   |   |   |   |   |   |   |
| Investment      securities available for sale  |   | $                                                                                   | 13,525  |   |                                                   | $      | 898,574 |   |   | $ | — |   |   | $ | 912,099 |   |
| Derivatives                                    |   |                                                                                | — |   |                                                   |   | 893 |   |   |   | — |   |   |   | 893 |   |
|     Total      assets      |   | $                                                                                   | 13,525  |   |                                                   | $      | 899,467 |   |   | $ | — |   |   | $ | 912,992 |   |
| Liabilities                                    |   |                                                                                |    |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives                                    |   | $                                                                                   | — |   |                                                   | $      | 864 |   |   | $ | — |   |   | $ | 864 |   |
|     Total      liabilities |   | $                                                                                   | — |   |                                                   | $      | 864 |   |   | $ | — |   |   | $ | 864 |   |

----

|                                                |   | Fair      Value Measurement Using          |   |
|-----------------------------------------------------|--------|--------------------------------------------|--------|
|     (Dollars      in thousands) |   |   BalanceSeptember      30, 2008 |   |   | Quoted      Prices in Active Markets for Identical Assets/Liabilities(Level      1) |   |   | Significant      Other Observable Inputs(Level      2) |   |   | Significant      Unobservable Inputs(Level      3) |   |
| Assets                                              |   |                                       |   |   |   |   |   |   |   |   |   |   |
| Impaired      loans                                 |   | $                                          | 15,917 |   |   | $ | — |   |   | $ | 15,917 |   |   | $ | — |   |
| Mortgage      servicing rights                      |   |                                       | 701    |   |   |   | — |   |   |   | 701 |   |   |   | — |   |
|     Total      assets           |   | $                                          | 16,618 |   |   | $ | — |   |   | $ | 16,618 |   |   | $ | — |   |

----

----

----

|                                                          |   | Three Months EndedSeptember 30, 2008 compared toSeptember 30, 2007 |   |   | Nine Months EndedSeptember 30, 2008 compared toSeptember 30, 2007 |   |
|---------------------------------------------------------------|--------|--------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------|--------|
| (Dollars      in thousands)                                   |   |                                                               |   |   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                          |   | Total                                                              |   |   | Due to change in:                                                 |   |   | Total |   |   | Due to change in: |   |
|                                                          |   | Change                                                             |   |   | Volume                                                            |   |   | Rate |   |   | Change |   |   | Volume |   |   | Rate |   |
| Increase      (decrease) in interest income:                  |   |                                                               |   |   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      securities *                                  |   | $                                                                  | 1,299  |   |                                                              | $      | 946 |   |   | $ | 353 |   |   | $ | 4,514 |   |   | $ | 3,568 |   |   | $ | 946 |   |
| Federal      funds sold and deposits in banks                 |   |                                                               | (429   | )      |                                                              |   | (25 | ) |   |   | (404 | ) |   |   | (1,508 | ) |   |   | (357 | ) |   |   | (1,151 | ) |
| Loans      *                                                  |   |                                                               | 447    |   |                                                              |   | 6,933 |   |   |   | (6,486 | ) |   |   | 6,305 |   |   |   | 20,341 |   |   |   | (14,036 | ) |
| Total                                                         |   |                                                               | 1,317  |   |                                                              |   | 7,854 |   |   |   | (6,537 | ) |   |   | 9,311 |   |   |   | 23,552 |   |   |   | (14,241 | ) |
|                                                          |   |                                                               |   |   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase      (decrease) in interest expense:                 |   |                                                               |   |   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Savings      and money market deposits            |   |                                                               | (6,496 | )      |                                                              |   | (119 | ) |   |   | (6,377 | ) |   |   | (17,676 | ) |   |   | 65 |   |   |   | (17,741 | ) |
|   Time      deposits                                |   |                                                               | 3,324  |   |                                                              |   | 4,586 |   |   |   | (1,262 | ) |   |   | 11,744 |   |   |   | 13,537 |   |   |   | (1,793 | ) |
|   Borrowed      funds                               |   |                                                               | (341   | )      |                                                              |   | 913 |   |   |   | (1,254 | ) |   |   | 378 |   |   |   | 2,923 |   |   |   | (2,545 | ) |
|       Total                     |   |                                                               | (3,513 | )      |                                                              |   | 5,380 |   |   |   | (8,893 | ) |   |   | (5,554 | ) |   |   | 16,525 |   |   |   | (22,079 | ) |
|                                                          |   |                                                               |   |   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      increase in net interest income                      |   | $                                                                  | 4,830  |   |                                                              | $      | 2,474 |   |   | $ | 2,356 |   |   | $ | 14,865 |   |   | $ | 7,027 |   |   | $ | 7,838 |   |
|  *Tax      equivalent basis using a tax rate of 35%, net |   |                                                               |   |   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| (Dollars      in thousands)                                                               |   | Three Months Ended September 30, |      |   | Three Months Ended September      30, |   |
|-------------------------------------------------------------------------------------------|--------|----------------------------------|-----------|--------|---------------------------------------|--------|
|                                                                                      |   | 2008                             |      |   | 2007                                  |   |
|                                                                                      |   |                             |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                      |   | Average                          |      |   |                                  |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
| Assets                                                                                    |   | Balance                          |      |   | Interest                              |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| Earning      assets:                                                                      |   |                             |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Investment      securities:                                                   |   |                             |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Taxable      investments                                                |   | $                                | 701,626   |   |                                  | $      | 9,518 |   |   |   | 5.40 | % |   | $ | 669,051 |   |   | $ | 8,769 |   |   |   | 5.20 | % |
|    Nontaxable      investments (1)                                         |   |                             | 301,275   |   |                                  |   | 4,554 |   |   |   | 6.01 |   |   |   | 264,621 |   |   |   | 4,004 |   |   |   | 6.00 |   |
|       Total      investment securities                      |   |                             | 1,002,901 |   |                                  |   | 14,072 |   |   |   | 5.58 |   |   |   | 933,672 |   |   |   | 12,773 |   |   |   | 5.43 |   |
|   Federal      funds sold and deposits in banks                                 |   |                             | 55,519    |   |                                  |   | 232 |   |   |   | 1.66 |   |   |   | 57,841 |   |   |   | 661 |   |   |   | 4.53 |   |
|   Loans      (1)      (2)                                                       |   |                             | 2,522,034 |   |                                  |   | 37,541 |   |   |   | 5.91 |   |   |   | 2,090,440 |   |   |   | 37,094 |   |   |   | 7.04 |   |
|        Total      earning assets                       |   |                             | 3,580,454 |   |                                  |   | 51,845 |   |   |   | 5.76 |   |   |   | 3,081,953 |   |   |   | 50,528 |   |   |   | 6.50 |   |
| Noninterest-earning      assets                                                           |   |                             | 319,139   |   |                                  |   |   |   |   |   |   |   |   |   | 227,563 |   |   |   |   |   |   |   |   |   |
|          Total      assets                   |   | $                                | 3,899,593 |   |                                  |   |   |   |   |   |   |   |   | $ | 3,309,516 |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |                             |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities      and Shareholders' Equity                                                 |   |                             |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      liabilities:                                                        |   |                             |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Interest-bearing      deposits:                                               |   |                             |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Savings      and money market                                           |   | $                                | 1,350,412 |   |                                  |   | 5,780 |   |   |   | 1.70 |   |   | $ | 1,363,803 |   |   |   | 12,276 |   |   |   | 3.57 |   |
|    Time                                                                    |   |                             | 1,225,220 |   |                                  |   | 12,976 |   |   |   | 4.21 |   |   |   | 801,334 |   |   |   | 9,652 |   |   |   | 4.78 |   |
|     Total      interest-bearing deposits                              |   |                             | 2,575,632 |   |                                  |   | 18,756 |   |   |   | 2.90 |   |   |   | 2,165,137 |   |   |   | 21,928 |   |   |   | 4.02 |   |
|   Borrowed      funds                                                           |   |                             | 582,832   |   |                                  |   | 5,889 |   |   |   | 4.02 |   |   |   | 501,752 |   |   |   | 6,230 |   |   |   | 4.93 |   |
|      Total      interest bearing liabilities                     |   |                             | 3,158,464 |   |                                  |   | 24,645 |   |   |   | 3.10 |   |   |   | 2,666,889 |   |   |   | 28,158 |   |   |   | 4.19 |   |
| Noninterest-bearing      liabilities:                                                     |   |                             |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Demand      deposits                                                          |   |                             | 348,183   |   |                                  |   |   |   |   |   |   |   |   |   | 312,123 |   |   |   |   |   |   |   |   |   |
|   Other      liabilities                                                        |   |                             | 70,869    |   |                                  |   |   |   |   |   |   |   |   |   | 40,676 |   |   |   |   |   |   |   |   |   |
|     Total      noninterest-bearing liabilities                        |   |                             | 419,052   |   |                                  |   |   |   |   |   |   |   |   |   | 352,799 |   |   |   |   |   |   |   |   |   |
|        Total      liabilities                          |   |                             | 3,577,516 |   |                                  |   |   |   |   |   |   |   |   |   | 3,019,688 |   |   |   |   |   |   |   |   |   |
| Shareholders'      equity                                                                 |   |                             | 322,077   |   |                                  |   |   |   |   |   |   |   |   |   | 289,828 |   |   |   |   |   |   |   |   |   |
|        Total      liabilities and shareholders' equity |   | $                                | 3,899,593 |   |                                  |   |   |   |   |   |   |   |   | $ | 3,309,516 |   |   |   |   |   |   |   |   |   |
| Net      interest spread                                                                  |   |                             |      |   |                                  |   |   |   |   |   | 2.66 |   |   |   |   |   |   |   |   |   |   |   | 2.31 |   |
| Effect      of noninterest-bearing sources                                                |   |                             |      |   |                                  |   |   |   |   |   | 0.36 |   |   |   |   |   |   |   |   |   |   |   | 0.57 |   |
| Net      interest income/margin on earning assets                                         |   |                             |      |   |                                  | $      | 27,200 |   |   |   | 3.02 | % |   |   |   |   |   | $ | 22,370 |   |   |   | 2.88 | % |
|                                                                                      |   |                             |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less      tax equivalent adjustment                                                       |   |                             |      |   |                                  |   | 1,903 |   |   |   |   |   |   |   |   |   |   |   | 1,506 |   |   |   |   |   |
| Net      interest income                                                                  |   |                             |      |   |                                  | $      | 25,297 |   |   |   |   |   |   |   |   |   |   | $ | 20,864 |   |   |   |   |   |

----

| (Dollars      in thousands)                                                               |   | Nine Months      Ended September 30, |      |   | Nine Months      Ended September 30, |   |
|-------------------------------------------------------------------------------------------|--------|--------------------------------------|-----------|--------|--------------------------------------|--------|
|                                                                                      |   | 2008                                 |      |   | 2007                                 |   |
|                                                                                      |   |                                 |      |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                      |   | Average                              |      |   |                                 |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
| Assets                                                                                    |   | Balance                              |      |   | Interest                             |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| Earning      assets:                                                                      |   |                                 |      |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Investment      securities:                                                   |   |                                 |      |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Taxable      investments                                                |   | $                                    | 731,870   |   |                                 | $      | 28,894 |   |   |   | 5.27 | % |   | $ | 676,787 |   |   | $ | 25,821 |   |   |   | 5.10 | % |
|    Nontaxable      investments (1)                                         |   |                                 | 293,371   |   |                                 |   | 13,290 |   |   |   | 6.05 |   |   |   | 261,458 |   |   |   | 11,849 |   |   |   | 6.06 |   |
|       Total      investment securities                      |   |                                 | 1,025,241 |   |                                 |   | 42,184 |   |   |   | 5.50 |   |   |   | 938,245 |   |   |   | 37,670 |   |   |   | 5.37 |   |
|   Federal      funds sold and deposits in banks                                 |   |                                 | 56,825    |   |                                 |   | 1,045 |   |   |   | 2.46 |   |   |   | 67,548 |   |   |   | 2,553 |   |   |   | 5.05 |   |
|   Loans      (1)      (2)                                                       |   |                                 | 2,492,498 |   |                                 |   | 114,013 |   |   |   | 6.11 |   |   |   | 2,070,931 |   |   |   | 107,708 |   |   |   | 6.95 |   |
|        Total      earning assets                       |   |                                 | 3,574,564 |   |                                 |   | 157,242 |   |   |   | 5.88 |   |   |   | 3,076,724 |   |   |   | 147,931 |   |   |   | 6.43 |   |
| Noninterest-earning      assets                                                           |   |                                 | 307,982   |   |                                 |   |   |   |   |   |   |   |   |   | 221,173 |   |   |   |   |   |   |   |   |   |
|          Total      assets                   |   | $                                    | 3,882,546 |   |                                 |   |   |   |   |   |   |   |   | $ | 3,297,897 |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |                                 |      |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities      and Shareholders' Equity                                                 |   |                                 |      |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      liabilities:                                                        |   |                                 |      |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Interest-bearing      deposits:                                               |   |                                 |      |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Savings      and money market                                           |   | $                                    | 1,387,554 |   |                                 |   | 19,536 |   |   |   | 1.88 |   |   | $ | 1,385,133 |   |   |   | 37,212 |   |   |   | 3.59 |   |
|    Time                                                                    |   |                                 | 1,208,467 |   |                                 |   | 40,414 |   |   |   | 4.47 |   |   |   | 806,638 |   |   |   | 28,670 |   |   |   | 4.75 |   |
|     Total      interest-bearing deposits                              |   |                                 | 2,596,021 |   |                                 |   | 59,950 |   |   |   | 3.08 |   |   |   | 2,191,771 |   |   |   | 65,882 |   |   |   | 4.02 |   |
|   Borrowed      funds                                                           |   |                                 | 545,701   |   |                                 |   | 17,068 |   |   |   | 4.18 |   |   |   | 458,523 |   |   |   | 16,690 |   |   |   | 4.87 |   |
|      Total      interest bearing liabilities                     |   |                                 | 3,141,722 |   |                                 |   | 77,018 |   |   |   | 3.27 |   |   |   | 2,650,294 |   |   |   | 82,572 |   |   |   | 4.17 |   |
| Noninterest-bearing      liabilities:                                                     |   |                                 |      |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Demand      deposits                                                          |   |                                 | 337,739   |   |                                 |   |   |   |   |   |   |   |   |   | 311,491 |   |   |   |   |   |   |   |   |   |
|   Other      liabilities                                                        |   |                                 | 69,531    |   |                                 |   |   |   |   |   |   |   |   |   | 43,915 |   |   |   |   |   |   |   |   |   |
|     Total      noninterest-bearing liabilities                        |   |                                 | 407,270   |   |                                 |   |   |   |   |   |   |   |   |   | 355,406 |   |   |   |   |   |   |   |   |   |
|        Total      liabilities                          |   |                                 | 3,548,992 |   |                                 |   |   |   |   |   |   |   |   |   | 3,005,700 |   |   |   |   |   |   |   |   |   |
| Shareholders'      equity                                                                 |   |                                 | 333,554   |   |                                 |   |   |   |   |   |   |   |   |   | 292,197 |   |   |   |   |   |   |   |   |   |
|        Total      liabilities and shareholders' equity |   | $                                    | 3,882,546 |   |                                 |   |   |   |   |   |   |   |   | $ | 3,297,897 |   |   |   |   |   |   |   |   |   |
| Net      interest spread                                                                  |   |                                 |      |   |                                 |   |   |   |   |   | 2.61 |   |   |   |   |   |   |   |   |   |   |   | 2.26 |   |
| Effect      of noninterest-bearing sources                                                |   |                                 |      |   |                                 |   |   |   |   |   | 0.39 |   |   |   |   |   |   |   |   |   |   |   | 0.58 |   |
| Net      interest income/margin on earning assets                                         |   |                                 |      |   |                                 | $      | 80,224 |   |   |   | 3.00 | % |   |   |   |   |   | $ | 65,359 |   |   |   | 2.84 | % |
|                                                                                      |   |                                 |      |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less      tax equivalent adjustment                                                       |   |                                 |      |   |                                 |   | 5,531 |   |   |   |   |   |   |   |   |   |   |   | 4,503 |   |   |   |   |   |
| Net      interest income                                                                  |   |                                 |      |   |                                 | $      | 74,693 |   |   |   |   |   |   |   |   |   |   | $ | 60,856 |   |   |   |   |   |

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

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

----

----

|                        |   |              |    |   | Change      in    |   |     |       |   |   | Asset/Liability     |   |
|-----------------------------|--------|-------------------|---------|--------|-------------------|--------|----------|------------|--------|--------|---------------------|--------|
|                        |   | Market      Value |    |   | Market      Value |   |     | Percentage |   |   | Approved            |   |
| (Dollars      in thousands) |   | of      Equity    |    |   | Of      Equity    |   |     | Change     |   |   | Percent      Change |   |
|                        |   |              |    |   |              |   |     |       |   |   |                |   |
| +300      Basis Points      |   | $                 | 228,458 |   |              | $      | (107,114 | )          |   |   | -31.92              | %      |   |   | +/-      35 | % |
| +200      Basis Points      |   |              | 268,218 |   |              |   | (67,354  | )          |   |   | -20.07              | %      |   |   | +/-      25 |   |
| +100      Basis Points      |   |              | 305,474 |   |              |   | (30,098  | )          |   |   | -8.97               | %      |   |   | +/-      15 |   |
| Flat      Rate              |   |              | 335,572 |   |              |   | -        |       |   |   | 0.00                | %      |   |   |   |   |
| -100      Basis Points      |   |              | 342,937 |   |              |   | 7,365    |       |   |   | 2.19                | %      |   |   | +/-      15 |   |
| -200      Basis Points      |   |              | 324,152 |   |              |   | (11,420  | )          |   |   | -3.40               | %      |   |   | +/-      25 |   |
| -300      Basis Points      |   |              | 294,353 |   |              |   | (41,219  | )          |   |   | -12.28              | %      |   |   | +/-      35 |   |

----

----

|                                                                                                       |   | Nine      Months Ended |      |
|------------------------------------------------------------------------------------------------------------|--------|------------------------|-----------|
|                                                                                                       |   | September      30,     |      |
| (Dollars      in thousands)                                                                                |   | 2008                   |      |   | 2007 |   |
|                                                                                                       |   |                   |      |   |   |   |
| Average      loans                                                                                         |   | $                      | 2,492,498 |   |   | $ | 2,070,931 |   |
|                                                                                                       |   |                   |      |   |   |   |   |   |
| Allowance,      beginning of period                                                                        |   |                   | 27,328    |   |   |   | 21,154 |   |
| Loans      charged off:                                                                                    |   |                   |      |   |   |   |   |   |
|        Real      estate                                                 |   |                   | 2,013     |   |   |   | 2,987 |   |
|        Commercial      and industrial                                   |   |                   | 751       |   |   |   | 819 |   |
|        Consumer                                                         |   |                   | 1,268     |   |   |   | 1,178 |   |
|        Lease      financing                                             |   |                   | 4         |   |   |   | 51 |   |
|              Total      loans charged off |   |                   | 4,036     |   |   |   | 5,035 |   |
| Recoveries:                                                                                                |   |                   |      |   |   |   |   |   |
|        Real      estate                                                 |   |                   | 377       |   |   |   | 67 |   |
|        Commercial      and industrial                                   |   |                   | 66        |   |   |   | 136 |   |
|        Consumer                                                         |   |                   | 280       |   |   |   | 207 |   |
|        Lease      financing                                             |   |                   | 6         |   |   |   | 18 |   |
|              Total      recoveries        |   |                   | 729       |   |   |   | 428 |   |
| Net      loans charged off                                                                                 |   |                   | 3,307     |   |   |   | 4,607 |   |
| Provision      for loan losses                                                                             |   |                   | 7,647     |   |   |   | 6,075 |   |
| Allowance,      end of period                                                                              |   | $                      | 31,668    |   |   | $ | 22,622 |   |
| Ratio      of net charge offs to average                                                                   |   |                   |      |   |   |   |   |   |
|         loans      outstanding (annualized)                        |   |                   | 0.18      | % |   |   | 0.30 | % |
|                                                                                                       |   |                   |      |   |   |   |   |   |

----

|                                            |   | September 30,      2008 |   |   | December 31, 2007 |   |
|-------------------------------------------------|--------|-------------------------|--------|--------|-------------------|--------|
|                                            |   |                    |   |   | Percent      of   |   |   |   |   |   | Percent      of |   |
| (Dollars      in thousands)                     |   | Amount                  |   |   | Allowance         |   |   | Amount |   |   | Allowance |   |
|                                            |   |                    |   |   |              |   |   |   |   |   |   |   |
| Real      estate                                |   | $                       | 11,938 |   |              |   | 38 | % |   | $ | 10,491 |   |   |   | 38 | % |
| Commercial                                      |   |                    |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|   and      industrial                 |   |                    | 14,869 |   |              |   | 47 | % |   |   | 12,340 |   |   |   | 45 | % |
| Consumer                                        |   |                    | 4,852  |   |              |   | 15 | % |   |   | 4,485 |   |   |   | 17 | % |
| Lease      financing                            |   |                    | 9      |   |              |   | - | % |   |   | 12 |   |   |   | - | % |
|        Total |   | $                       | 31,668 |   |              |   | 100 | % |   | $ | 27,328 |   |   |   | 100 | % |

| (Dollars      in thousands)                             |   | September      30, 2008 |   |   | December      31, 2007 |   |   | September      30, 2007 |   |
|---------------------------------------------------------|--------|-------------------------|--------|--------|------------------------|--------|--------|-------------------------|--------|
|                                                    |   |                    |   |   |                   |   |   |                    |   |
| Nonaccrual      loans                                   |   | $                       | 36,278 |   |                   | $      | 21,091 |                    |   | $ | 14,507 |   |
| Loans      90 days or more past due                     |   |                    | 1,275  |   |                   |   | 857    |                    |   |   | 1,119 |   |
| Total nonperforming      loans                          |   |                    | 37,553 |   |                   |   | 21,948 |                    |   |   | 15,626 |   |
| Net      assets in foreclosure                          |   |                    | 1,221  |   |                   |   | 28     |                    |   |   | 28 |   |
| Total nonperforming      assets                         |   | $                       | 38,774 |   |                   | $      | 21,976 |                    |   | $ | 15,654 |   |
|                                                    |   |                    |   |   |                   |   |   |                    |   |   |   |   |
| Allowance      for loan losses to nonperforming loans   |   |                    | 84.3   | %      |                   |   | 124.5  | %                       |   |   | 144.8 | % |
| Nonperforming      loans to total net loans             |   |                    | 1.50   | %      |                   |   | 0.90   | %                       |   |   | 0.75 | % |
| Allowance      for loan and lease losses to total loans |   |                    | 1.25   | %      |                   |   | 1.11   | %                       |   |   | 1.08 | % |
| Nonperforming      assets to total assets               |   |                    | 0.98   | %      |                   |   | 0.56   | %                       |   |   | 0.46 | % |

----

| (Dollars      in thousands)                                 |   | September      30, 2008 |   |   | December      31, 2007 |   |   | September      30, 2007 |   |
|-------------------------------------------------------------|--------|-------------------------|--------|--------|------------------------|--------|--------|-------------------------|--------|
|                                                        |   |                    |   |   |                   |   |   |                    |   |
|  Impaired      Loans                                   |   | $                       | 21,509 |   |                   | $      | 9,803  |                    |   | $ | 5,604 |   |
|                                                        |   |                    |   |   |                   |   |   |                    |   |   |   |   |
|  Average      year-to-date impaired loans              |   | $                       | 16,259 |   |                   | $      | 7,539  |                    |   | $ | 7,613 |   |
|                                                        |   |                    |   |   |                   |   |   |                    |   |   |   |   |
|  Impaired      loans with specific loss allowances     |   | $                       | 21,509 |   |                   | $      | 9,803  |                    |   | $ | 5,604 |   |
|                                                        |   |                    |   |   |                   |   |   |                    |   |   |   |   |
|  Loss      allowances reserved on impaired loans       |   | $                       | 4,572  |   |                   | $      | 2,229  |                    |   | $ | 1,320 |   |
|                                                        |   |                    |   |   |                   |   |   |                    |   |   |   |   |
|  Year-to-date      income recognized on impaired loans |   | $                       | 137    |   |                   | $      | 31     |                    |   | $ | 31 |   |

----

|   (Dollars      in thousands)        |   |         |    |   |   |   |   | For      CapitalAdequacy      Purposes |   |   | To      Be Well CapitalizedUnder      Prompt CorrectiveAction      Program |   |
|------------------------------------------------|--------|--------------|---------|--------|--------|--------|--------|----------------------------------------|--------|--------|----------------------------------------------------------------------------|--------|
|  As of September 30, 2008                 |   | ActualAmount |    |   | Ratio  |   |   | Amount                                 |   |   | Ratio                                                                      |   |   | Amount |   |   | Ratio |   |
|                                           |   |         |    |   |   |   |   |                                   |   |   |                                                                       |   |   |   |   |   |   |   |
| Total      Capital (to risk weighted assets):  |   |         |    |   |   |   |   |                                   |   |   |                                                                       |   |   |   |   |   |   |   |
| Corporation                                    |   | $            | 339,068 |   |   |   | 10.92  | %                                      |   | $      | 248,510                                                                    |   |   |   | 8.00 | % |   | $ | 310,638 |   |   |   | 10 | % |
| Harleysville      National Bank                |   |         | 322,352 |   |   |   | 10.42  | %                                      |   |   | 247,535                                                                    |   |   |   | 8.00 | % |   |   | 309,419 |   |   |   | 10 | % |
| Tier      1 Capital (to risk weighted assets): |   |         |    |   |   |   |   |                                   |   |   |                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporation                                    |   |         | 307,301 |   |   |   | 9.89   | %                                      |   |   | 124,255                                                                    |   |   |   | 4.00 | % |   |   | 186,383 |   |   |   | 6 | % |
| Harleysville      National Bank                |   |         | 290,585 |   |   |   | 9.39   | %                                      |   |   | 123,768                                                                    |   |   |   | 4.00 | % |   |   | 185,652 |   |   |   | 6 | % |
| Tier      1 Capital (to average assets):       |   |         |    |   |   |   |   |                                   |   |   |                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporation                                    |   |         | 307,301 |   |   |   | 8.13   | %                                      |   |   | 151,272                                                                    |   |   |   | 4.00 | % |   |   | 189,090 |   |   |   | 5 | % |
| Harleysville      National Bank                |   |         | 290,585 |   |   |   | 7.71   | %                                      |   |   | 150,688                                                                    |   |   |   | 4.00 | % |   |   | 188,360 |   |   |   | 5 | % |

|   (Dollars      in thousands)        |   |         |    |   |   |   |   | For      CapitalAdequacy      Purposes |   |   | To      Be Well CapitalizedUnder      Prompt CorrectiveAction      Program |   |
|------------------------------------------------|--------|--------------|---------|--------|--------|--------|--------|----------------------------------------|--------|--------|----------------------------------------------------------------------------|--------|
|  As of December 31, 2007                  |   | ActualAmount |    |   | Ratio  |   |   | Amount                                 |   |   | Ratio                                                                      |   |   | Amount |   |   | Ratio |   |
|                                           |   |         |    |   |   |   |   |                                   |   |   |                                                                       |   |   |   |   |   |   |   |
| Total      Capital (to risk weighted assets):  |   |         |    |   |   |   |   |                                   |   |   |                                                                       |   |   |   |   |   |   |   |
| Corporation                                    |   | $            | 329,887 |   |   |   | 10.67  | %                                      |   | $      | 247,273                                                                    |   |   |   | 8.00 | % |   | $ | 309,091 |   |   |   | 10 | % |
| Harleysville      National Bank                |   |         | 312,880 |   |   |   | 10.16  | %                                      |   |   | 246,286                                                                    |   |   |   | 8.00 | % |   |   | 307,858 |   |   |   | 10 | % |
| Tier      1 Capital (to risk weighted assets): |   |         |    |   |   |   |   |                                   |   |   |                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporation                                    |   |         | 302,459 |   |   |   | 9.79   | %                                      |   |   | 123,637                                                                    |   |   |   | 4.00 | % |   |   | 185,455 |   |   |   | 6 | % |
| Harleysville      National Bank                |   |         | 285,452 |   |   |   | 9.27   | %                                      |   |   | 123,143                                                                    |   |   |   | 4.00 | % |   |   | 184,715 |   |   |   | 6 | % |
| Tier      1 Capital (to average assets):       |   |         |    |   |   |   |   |                                   |   |   |                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporation                                    |   |         | 302,459 |   |   |   | 8.72   | %                                      |   |   | 138,795                                                                    |   |   |   | 4.00 | % |   |   | 173,494 |   |   |   | 5 | % |
| Harleysville      National Bank                |   |         | 285,452 |   |   |   | 8.29   | %                                      |   |   | 137,722                                                                    |   |   |   | 4.00 | % |   |   | 172,153 |   |   |   | 5 | % |

----

----

----

----

| (1)   | On      May 12, 2005, the Board of Directors authorized a plan to purchase up      to 1,416,712 shares (restated for five percent stock dividend paid on      September 15, 2006 and September 15, 2005) or 4.9%, of its      outstanding common stock. The repurchases under the plan are currently      suspended pursuant to the consummation of the pending merger with Willow      Financial Bancorp, Inc. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

----

| Date:  November      7, 2008 |                    /s/      Paul D. Geraghty                         |
|----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Paul      D. Geraghty, President, Chief Executive Officer      and |
|--------|--------------------------------------------------------------------|

|   | Director                                 |
|--------|------------------------------------------|
|   |  (Principal      executive officer) |

----

| 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.)                                                                                                                                                                                                                                                                           |
| (3.1)      | Harleysville      National Corporation Amended and Restated Articles of Incorporation.      (Incorporated by reference to Exhibit 3.1 to the Corporation’s      Registration Statement No. 333-111709 on Form S-4, as filed on      January 5, 2004.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (3.2)      | Harleysville      National Corporation Amended and Restated By-laws. (Incorporated by      reference to Exhibit 3.1 to the Corporation’s Current Report on Form      8-K/A, filed with the Commission on August 16, 2007.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (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.)                                                                                            |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (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, Executive Vice President and former 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,      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, 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)       | 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).                                                                                                                                                                                                                                          |
| (10.15)       | 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.                                                                                                                                                           |
| (10.16)       | 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.)                                                                                                                     |
| (10.17)       | 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.)                                                                                                                         |
| (10.18)       | 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.)                                                                                                                  |
| (10.19)       | 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.)                                                                                   |
| (10.20)       | 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.)                                                                                   |
| (10.21)       | 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.) |
| (10.22)       | 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.)                                                                                                                                              |
|  (10.23) |  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.)                                                                                                         |

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| (10.24) | 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.)                     |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (10.25) | 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.)                                                                                                                                       |
| (10.26) | 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.) |
| (10.27) | 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.)                                                                                |
| (10.28) | 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.)                                                                                                                                                                |
| (10.29) | 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.)                                                                                                                             |
| (10.30) | 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.)                                                                                                                               |
| (10.31) | 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.)      |
| (10.32) | 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.)                                                                                      |
| (10.33) | 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.)                                                                                                                                                                      |
| (10.34) | 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.)            |
| (10.35) | 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).                                    |
| (11)    | Computation      of Earnings per Common Share, incorporated by reference to Part II,      Item 8, Footnote 6, “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. |
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