----

----

| x   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  ̈   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934        |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Virginia                                                       | 54-1829288                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

| 590 Peter Jefferson Parkway Charlottesville, Virginia | 22911      |
|-------------------------------------------------------|------------|
| (Address of principal executive offices)              | (Zip Code) |

----

----

----

LAR

|                        |                                                                                        | Page No. |
|-----------------------------|---------------------------------------------------------------------------------------------|----------|
|                        |                                                                                        |     |
| ITEM 1                      | Financial Statements:                                                                       |     |
|                        |                                                                                        |     |
|                        | Consolidated Balance Sheets                                                                 | 3        |
|                        | Consolidated Statements of Income                                                           | 4-5      |
|                        | Consolidated Statements of Changes in Stockholders’ Equity                            | 6        |
|                        | Consolidated Statements of Cash Flows                                                       | 7        |
|                        | Notes to Consolidated Financial Statements                                                  | 8-21     |
|                        |                                                                                        |     |
| ITEM 2                      | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 22-33    |
|                        |                                                                                        |     |
| ITEM 3                      | Quantitative and Qualitative Disclosures About Market Risk                                  | 33       |
|                        |                                                                                        |     |
| ITEM 4                      | Controls and Procedures                                                                     | 34       |
|                        |                                                                                        |     |
| PART II - OTHER INFORMATION |
|                        |                                                                                        |     |
| ITEM 1                      | Legal Proceedings                                                                           | 35       |
|                        |                                                                                        |     |
| ITEM 1A                     | Risk Factors                                                                                | 35       |
|                        |                                                                                        |     |
| ITEM 2                      | Unregistered Sales of Equity Securities and Use of Proceeds                                 | 35       |
|                        |                                                                                        |     |
| ITEM 3                      | Defaults Upon Senior Securities                                                             | 35       |
|                        |                                                                                        |     |
| ITEM 4                      | Submission of Matters to a Vote of Security Holders                                         | 35       |
|                        |                                                                                        |     |
| ITEM 5                      | Other Information                                                                           | 35       |
|                        |                                                                                        |     |
| ITEM 6                      | Exhibits                                                                                    | 36-40    |

----

Index

| PART I – FINANCIAL INFORMATION                                                                                                                     |   |        |      |   |         |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|-----------|--------|--------------|--------|
| ITEM 1. Financial statements                                                                                                                             |   |        |      |   |         |   |
|                                                                                                                                                     |   |        |      |   |         |   |
| STELLARONE CORPORATION AND SUBSIDIARIES                                                                                                                  |   |
| CONSOLIDATED BALANCE SHEETS                                                                                                                              |   |
| (In thousands)                                                                                                                                           |   |
|                                                                                                                                                     |   |        |      |   |         |   |
|                                                                                                                                                     |   | JUNE 30     |      |   | DECEMBER 31, |   |
|                                                                                                                                                     |   | 2009        |      |   | 2008         |   |
|                                                                                                                                                     |   | (unaudited) |      |   |         |   |
| ASSETS                                                                                                                                                   |   |        |      |   |         |   |
| Cash and due from banks                                                                                                                                  |   | $           | 52,328    |   |         | $      | 66,239 |   |
| Federal funds sold                                                                                                                                       |   |        | 51,339    |   |         |   | 3,837 |   |
| Interest-bearing deposits in banks                                                                                                                       |   |        | 80,723    |   |         |   | 45,453 |   |
| Cash and cash equivalents                                                                                                                                |   |        | 184,390   |   |         |   | 115,529 |   |
| Investment securities (fair value: 2009, $353,971; 2008, $328,096)                                                                                       |   |        | 353,967   |   |         |   | 328,093 |   |
| Mortgage loans held for sale                                                                                                                             |   |        | 51,229    |   |         |   | 15,847 |   |
| Loans receivable, net of allowance for loan losses, 2009, $34,923; 2008, $30,464                                                                         |   |        | 2,206,174 |   |         |   | 2,234,122 |   |
| Premises and equipment, net                                                                                                                              |   |        | 85,837    |   |         |   | 89,022 |   |
| Accrued interest receivable                                                                                                                              |   |        | 9,922     |   |         |   | 10,230 |   |
| Deferred income tax asset                                                                                                                                |   |        | 852       |   |         |   | - |   |
| Core deposit intangibles, net                                                                                                                            |   |        | 9,393     |   |         |   | 10,266 |   |
| Goodwill                                                                                                                                                 |   |        | 74,880    |   |         |   | 74,582 |   |
| Bank owned life insurance                                                                                                                                |   |        | 29,538    |   |         |   | 28,903 |   |
| Foreclosed assets                                                                                                                                        |   |        | 4,121     |   |         |   | 4,627 |   |
| Other assets                                                                                                                                             |   |        | 46,612    |   |         |   | 45,293 |   |
|                                                                                                                                                     |   |        |      |   |         |   |   |   |
| Total assets                                                                                                                                             |   | $           | 3,056,915 |   |         | $      | 2,956,514 |   |
|                                                                                                                                                     |   |        |      |   |         |   |   |   |
| LIABILITIES                                                                                                                                              |   |        |      |   |         |   |   |   |
| Deposits:                                                                                                                                                |   |        |      |   |         |   |   |   |
| Noninterest-bearing                                                                                                                                      |   | $           | 318,879   |   |         | $      | 307,621 |   |
| Interest-bearing                                                                                                                                         |   |        | 2,130,459 |   |         |   | 2,015,487 |   |
| Total deposits                                                                                                                                           |   |        | 2,449,338 |   |         |   | 2,323,108 |   |
| Short-term borrowings                                                                                                                                    |   |        | 503       |   |         |   | 699 |   |
| Federal Home Loan Bank advances                                                                                                                          |   |        | 170,000   |   |         |   | 187,700 |   |
| Subordinated debt                                                                                                                                        |   |        | 32,991    |   |         |   | 32,991 |   |
| Accrued interest payable                                                                                                                                 |   |        | 4,799     |   |         |   | 5,476 |   |
| Deferred income tax liability                                                                                                                            |   |        | -         |   |         |   | 1,224 |   |
| Other liabilities                                                                                                                                        |   |        | 9,578     |   |         |   | 10,531 |   |
| Total liabilities                                                                                                                                        |   |        | 2,667,209 |   |         |   | 2,561,729 |   |
|                                                                                                                                                     |   |        |      |   |         |   |   |   |
| STOCKHOLDERS’ EQUITY                                                                                                                               |   |        |      |   |         |   |   |   |
| Preferred stock; no par value;  5,000,000 shares authorized; no shares issued and outstanding;                                                 |   |        | -         |   |         |   | - |   |
| Preferred stock; $1,000 liquidation preference; 30,000 shares issued and outstanding;                                                                    |   |        | 28,224    |   |         |   | 28,121 |   |
| Common stock, $1 par value; 35,000,000 shares authorized; 2009: 22,652,792 shares issued and outstanding; 2008: 22,605,063 shares issued and outstanding |   |        | 22,653    |   |         |   | 22,605 |   |
| Additional paid-in capital                                                                                                                               |   |        | 229,918   |   |         |   | 229,522 |   |
| Retained earnings                                                                                                                                        |   |        | 108,045   |   |         |   | 113,661 |   |
| Accumulated other comprehensive income, net                                                                                                              |   |        | 866       |   |         |   | 876 |   |
| Total stockholders’ equity                                                                                                                         |   |        | 389,706   |   |         |   | 394,785 |   |
|                                                                                                                                                     |   |        |      |   |         |   |   |   |
| Total liabilities and stockholders’ equity                                                                                                         |   | $           | 3,056,915 |   |         | $      | 2,956,514 |   |

----

Index

| STELLARONE CORPORATION AND SUBSIDIARIES                                                 |   |
|-----------------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF INCOME                                                       |   |
| (In thousands, except per share data)                                                   |   |
|                                                                                    |   |   |   |   |   |   |
|                                                                                    |   | THREE MONTHS ENDED |   |
|                                                                                    |   | JUNE 30, |   |
|                                                                                    |   | 2009 |   |   | 2008 |   |
|                                                                                    |   | (unaudited) |   |   | (unaudited) |   |
| Interest Income                                                                         |   |   |   |   |   |   |
| Loans, including fees                                                                   |   | $ | 31,694 |   |   | $ | 39,208 |   |
| Federal funds sold and deposits in other banks                                          |   |   | 52 |   |   |   | 363 |   |
| Investment securities:                                                                  |   |   |   |   |   |   |   |   |
| Taxable                                                                                 |   |   | 2,426 |   |   |   | 3,147 |   |
| Tax exempt                                                                              |   |   | 972 |   |   |   | 995 |   |
| Dividends                                                                               |   |   | 198 |   |   |   | 339 |   |
| Total interest income                                                                   |   |   | 35,342 |   |   |   | 44,052 |   |
| Interest Expense                                                                        |   |   |   |   |   |   |   |   |
| Deposits                                                                                |   |   | 11,360 |   |   |   | 12,458 |   |
| Federal funds purchased and securities sold under agreements to repurchase              |   |   | 3 |   |   |   | 5 |   |
| Federal Home Loan Bank advances                                                         |   |   | 1,558 |   |   |   | 1,631 |   |
| Subordinated debt                                                                       |   |   | 338 |   |   |   | 466 |   |
| Short-term borrowings                                                                   |   |   | - |   |   |   | 159 |   |
| Total interest expense                                                                  |   |   | 13,259 |   |   |   | 14,719 |   |
| Net interest income                                                                     |   |   | 22,083 |   |   |   | 29,333 |   |
| Provision for loan losses                                                               |   |   | 6,500 |   |   |   | 2,835 |   |
| Net interest income after provision for loan losses                                     |   |   | 15,583 |   |   |   | 26,498 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Noninterest Income                                                                      |   |   |   |   |   |   |   |   |
| Retail banking fees                                                                     |   |   | 4,113 |   |   |   | 3,896 |   |
| Commissions and fees from fiduciary activities                                          |   |   | 744 |   |   |   | 1,071 |   |
| Brokerage fee income                                                                    |   |   | 245 |   |   |   | 318 |   |
| Mortgage banking-related fees                                                           |   |   | 2,083 |   |   |   | 1,357 |   |
| Losses on sale of foreclosed assets                                                     |   |   | (355 | ) |   |   | (260 | ) |
| Losses on sale of premises and equipment                                                |   |   | (289 | ) |   |   | (21 | ) |
| Gains on sale of securities available for sale                                          |   |   | 11 |   |   |   | 206 |   |
| Income from bank owned life insurance                                                   |   |   | 331 |   |   |   | 319 |   |
| Other operating income                                                                  |   |   | 780 |   |   |   | 761 |   |
| Total noninterest income                                                                |   |   | 7,663 |   |   |   | 7,647 |   |
| Noninterest Expense                                                                     |   |   |   |   |   |   |   |   |
| Compensation and employee benefits                                                      |   |   | 10,836 |   |   |   | 11,763 |   |
| Net occupancy                                                                           |   |   | 2,163 |   |   |   | 1,834 |   |
| Supplies and equipment                                                                  |   |   | 2,265 |   |   |   | 2,170 |   |
| Amortization-intangible assets                                                          |   |   | 434 |   |   |   | 531 |   |
| Marketing                                                                               |   |   | 388 |   |   |   | 831 |   |
| State franchise taxes                                                                   |   |   | 574 |   |   |   | 585 |   |
| FDIC insurance                                                                          |   |   | 2,088 |   |   |   | 68 |   |
| Data processing                                                                         |   |   | 645 |   |   |   | 992 |   |
| Professional fees                                                                       |   |   | 489 |   |   |   | 640 |   |
| Telecommunications                                                                      |   |   | 477 |   |   |   | 457 |   |
| Other operating expenses                                                                |   |   | 3,698 |   |   |   | 4,738 |   |
| Total noninterest expense                                                               |   |   | 24,057 |   |   |   | 24,609 |   |
| (Loss) income before income taxes                                                       |   |   | (811 | ) |   |   | 9,536 |   |
| Income tax (benefit) expense                                                            |   |   | (485 | ) |   |   | 3,396 |   |
| Net (loss) income                                                                       |   |   | (326 | ) |   |   | 6,140 |   |
| Preferred stock dividends                                                               |   |   | (374 | ) |   |   | - |   |
| Accretion of preferred stock discount                                                   |   |   | (85 | ) |   |   | - |   |
| Net (loss) income available to common shareholders                                      |   | $ | (785 | ) |   | $ | 6,140 |   |
| Basic net (loss) income per common share available to common shareholders               |   | $ | (0.03 | ) |   | $ | 0.27 |   |
| Diluted net (loss) income per common share available to common shareholders             |   | $ | (0.03 | ) |   | $ | 0.27 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of these consolidated financial statements. |   |   |   |   |   |

----

Index

| STELLARONE CORPORATION AND SUBSIDIARIES                                                 |   |
|-----------------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF INCOME                                                       |   |
| (In thousands, except per share data)                                                   |   |
|                                                                                    |   |   |   |   |   |   |
|                                                                                    |   | SIX MONTHS ENDED |   |
|                                                                                    |   | JUNE 30, |   |
|                                                                                    |   | 2009 |   |   | 2008 |   |
|                                                                                    |   | (unaudited) |   |   | (unaudited) |   |
| Interest Income                                                                         |   |   |   |   |   |   |
| Loans, including fees                                                                   |   | $ | 64,186 |   |   | $ | 66,469 |   |
| Federal funds sold and deposits in other banks                                          |   |   | 84 |   |   |   | 563 |   |
| Investment securities:                                                                  |   |   |   |   |   |   |   |   |
| Taxable                                                                                 |   |   | 5,009 |   |   |   | 5,210 |   |
| Tax exempt                                                                              |   |   | 1,820 |   |   |   | 1,832 |   |
| Dividends                                                                               |   |   | 373 |   |   |   | 606 |   |
| Total interest income                                                                   |   |   | 71,472 |   |   |   | 74,680 |   |
| Interest Expense                                                                        |   |   |   |   |   |   |   |   |
| Deposits                                                                                |   |   | 23,011 |   |   |   | 22,663 |   |
| Federal funds purchased and securities sold under agreements to repurchase              |   |   | 7 |   |   |   | 60 |   |
| Federal Home Loan Bank advances                                                         |   |   | 3,121 |   |   |   | 3,539 |   |
| Subordinated debt                                                                       |   |   | 700 |   |   |   | 930 |   |
| Short-term borrowings                                                                   |   |   | - |   |   |   | 641 |   |
| Total interest expense                                                                  |   |   | 26,839 |   |   |   | 27,833 |   |
| Net interest income                                                                     |   |   | 44,633 |   |   |   | 46,847 |   |
| Provision for loan losses                                                               |   |   | 14,250 |   |   |   | 3,787 |   |
| Net interest income after provision for loan losses                                     |   |   | 30,383 |   |   |   | 43,060 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Noninterest Income                                                                      |   |   |   |   |   |   |   |   |
| Retail banking fees                                                                     |   |   | 7,824 |   |   |   | 6,463 |   |
| Commissions and fees from fiduciary activities                                          |   |   | 1,502 |   |   |   | 1,969 |   |
| Brokerage fee income                                                                    |   |   | 498 |   |   |   | 638 |   |
| Mortgage banking-related fees                                                           |   |   | 3,507 |   |   |   | 2,228 |   |
| Losses on sale of foreclosed assets                                                     |   |   | (620 | ) |   |   | (759 | ) |
| Losses on sale of premises and equipment                                                |   |   | (90 | ) |   |   | (64 | ) |
| Gains on sale of securities available for sale                                          |   |   | 13 |   |   |   | 238 |   |
| Income from bank owned life insurance                                                   |   |   | 635 |   |   |   | 511 |   |
| Other operating income                                                                  |   |   | 1,371 |   |   |   | 1,588 |   |
| Total noninterest income                                                                |   |   | 14,640 |   |   |   | 12,812 |   |
| Noninterest Expense                                                                     |   |   |   |   |   |   |   |   |
| Compensation and employee benefits                                                      |   |   | 21,362 |   |   |   | 22,931 |   |
| Net occupancy                                                                           |   |   | 4,254 |   |   |   | 2,995 |   |
| Supplies and equipment                                                                  |   |   | 4,406 |   |   |   | 3,710 |   |
| Amortization-intangible assets                                                          |   |   | 872 |   |   |   | 691 |   |
| Marketing                                                                               |   |   | 628 |   |   |   | 1,248 |   |
| State franchise taxes                                                                   |   |   | 1,170 |   |   |   | 980 |   |
| FDIC insurance                                                                          |   |   | 3,193 |   |   |   | 115 |   |
| Data processing                                                                         |   |   | 1,502 |   |   |   | 2,076 |   |
| Professional fees                                                                       |   |   | 993 |   |   |   | 1,214 |   |
| Telecommunications                                                                      |   |   | 944 |   |   |   | 746 |   |
| Other operating expenses                                                                |   |   | 6,956 |   |   |   | 6,941 |   |
| Total noninterest expense                                                               |   |   | 46,280 |   |   |   | 43,647 |   |
| (Loss) income before income taxes                                                       |   |   | (1,257 | ) |   |   | 12,225 |   |
| Income tax (benefit) expense                                                            |   |   | (1,077 | ) |   |   | 3,998 |   |
| Net (loss) income                                                                       |   |   | (180 | ) |   |   | 8,227 |   |
| Preferred stock dividends                                                               |   |   | (744 | ) |   |   | - |   |
| Accretion of preferred stock discount                                                   |   |   | (159 | ) |   |   | - |   |
| Net (loss) income available to common shareholders                                      |   | $ | (1,083 | ) |   | $ | 8,227 |   |
| Basic net (loss) income per common share available to common shareholders               |   | $ | (0.05 | ) |   | $ | 0.44 |   |
| Diluted net (loss) income per common share available to common shareholders             |   | $ | (0.05 | ) |   | $ | 0.44 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of these consolidated financial statements. |   |   |   |   |   |

----

Index

| STELLARONE CORPORATION AND SUBSIDIARIES                                                         |   |
|-------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY AND OTHER COMPREHENSIVE INCOME |   |
| FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008                                                 |   |
| (In thousands, except per share data)                                                           |   |
| (unaudited)                                                                                     |   |
|                                                                                            |   |
|                                                                                            |   | Preferred Stock |   |   | Common Stock |   |   | Additional Paid-In Capital |   |   | Retained Earnings |   |   | Accumulated Other Comprehensive Income (Loss) |   |   | Comprehensive Income (Loss) |   |   | Total |   |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, January 1, 2008                                                                        |   | $ | - |   |   | $ | 10,796 |   |   | $ | 34,488 |   |   | $ | 117,009 |   |   | $ | 475 |   |   |   |   |   | $ | 162,768 |   |
| Comprehensive income:                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 8,227 |   |   |   | - |   |   | $ | 8,227 |   |   |   | 8,227 |   |
| Other comprehensive income net of tax:                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized holding gains arising during the period (net of tax of $1,046)                       |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,943 | ) |   |   | - |   |
| Reclassification adjustment (net of tax of $83)                                                 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 155 |   |   |   | - |   |
| Change in funded status of pension plans                                                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 134 |   |   |   |   |   |
| Other comprehensive loss                                                                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,654 | ) |   |   | (1,654 | ) |   |   | (1,654 | ) |
| Total comprehensive income                                                                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   | $ | 6,573 |   |   |   | - |   |
| Cash dividends ($.32 per share)                                                                 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (5,371 | ) |   |   | - |   |   |   |   |   |   |   | (5,371 | ) |
| Common stock issued in Merger (11,748,933 shares)                                               |   |   | - |   |   |   | 11,749 |   |   |   | 189,382 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 201,131 |   |
| Stock-based compensation expense associated with Merger (23,519 shares)                         |   |   | - |   |   |   | 24 |   |   |   | 1,088 |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | 1,112 |   |
| Stock-based compensation expense (7,018 shares)                                                 |   |   | - |   |   |   | 7 |   |   |   | 61 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 68 |   |
| Exercise of stock options (24,944 shares)                                                       |   |   | - |   |   |   | 24 |   |   |   | 239 |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | 263 |   |
| Balance, June 30, 2008                                                                          |   | $ | - |   |   | $ | 22,600 |   |   | $ | 225,258 |   |   | $ | 119,865 |   |   | $ | (1,179 | ) |   |   |   |   |   | $ | 366,544 |   |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, January 1, 2009                                                                        |   | $ | 28,121 |   |   | $ | 22,605 |   |   | $ | 229,522 |   |   | $ | 113,661 |   |   | $ | 876 |   |   |   |   |   |   | $ | 394,785 |   |
| Comprehensive income:                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (180 | ) |   |   | - |   |   | $ | (180 | ) |   |   | (180 | ) |
| Other comprehensive loss, net of tax:                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized holding loss arising during the period (net of tax of $1)                            |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2 | ) |   |   | - |   |
| Reclassification adjustment (net of tax of $5)                                                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (8 | ) |   |   | - |   |
| Other comprehensive loss                                                                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (10 | ) |   |   | (10 | ) |   |   | (10 | ) |
| Total comprehensive loss                                                                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   | $ | (190 | ) |   |   | - |   |
| Cash dividends paid or accrued                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common ($.20 per share)                                                                         |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (4,533 | ) |   |   | - |   |   |   |   |   |   |   | (4,533 | ) |
| Preferred cummulative 5%                                                                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (744 | ) |   |   | - |   |   |   |   |   |   |   | (744 | ) |
| Accretion on preferred stock discount                                                           |   |   | 159 |   |   |   | - |   |   |   | - |   |   |   | (159 | ) |   |   | - |   |   |   |   |   |   |   | - |   |
| Preferred stock issuance costs                                                                  |   |   | (56 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | (56 | ) |
| Stock-based compensation expense (18,894 shares)                                                |   |   | - |   |   |   | 19 |   |   |   | 145 |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | 164 |   |
| Exercise of stock options (28,835 shares)                                                       |   |   | - |   |   |   | 29 |   |   |   | 251 |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | 280 |   |
| Balance, June 30, 2009                                                                          |   | $ | 28,224 |   |   | $ | 22,653 |   |   | $ | 229,918 |   |   | $ | 108,045 |   |   | $ | 866 |   |   |   |   |   |   | $ | 389,706 |   |

----

Index

| STELLARONE CORPORATION AND SUBSIDIARIES                                              |   |
|--------------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                                |   |
| (In thousands)                                                                       |   |
|                                                                                 |   |   |   |   |   |   |
|                                                                                 |   | SIX MONTHS ENDED |   |
|                                                                                 |   | JUNE 30, |   |
|                                                                                 |   | 2009 |   |   | 2008 |   |
|                                                                                 |   | (unaudited) |   |   | (unaudited) |   |
| Cash Flows from Operating Activities                                                 |   |   |   |   |   |   |
| Net (loss) income                                                                    |   | $ | (180 | ) |   | $ | 8,227 |   |
| Adjustments to reconcile net income to net cash used in operating activities:        |   |   |   |   |   |   |   |   |
| Depreciation                                                                         |   |   | 3,246 |   |   |   | 2,788 |   |
| Amortization of intangible assets                                                    |   |   | 872 |   |   |   | 691 |   |
| Amortization of purchase adjustments                                                 |   |   | - |   |   |   | (5,024 | ) |
| Provision for loan losses                                                            |   |   | 14,250 |   |   |   | 3,787 |   |
| Deferred tax (benefit) expense                                                       |   |   | (2,071 | ) |   |   | 2,625 |   |
| Employee benefit plan expense                                                        |   |   | - |   |   |   | 105 |   |
| Stock-based compensation expense                                                     |   |   | 164 |   |   |   | 1,180 |   |
| Losses on foreclosed assets                                                          |   |   | 620 |   |   |   | 759 |   |
| Losses on sale of premises and equipment                                             |   |   | 90 |   |   |   | 64 |   |
| Gains on sale of securities available for sale                                       |   |   | (13 | ) |   |   | (238 | ) |
| Mortgage banking-related fees                                                        |   |   | (3,507 | ) |   |   | (2,228 | ) |
| Proceeds from sale of mortgage loans                                                 |   |   | 290,014 |   |   |   | 117,494 |   |
| Origination of mortgage loans held for sale                                          |   |   | (321,889 | ) |   |   | (109,851 | ) |
| Amortization of securities premiums and   accretion of discounts, net |   |   | (1,072 | ) |   |   | 458 |   |
| Income on bank owned life insurance                                                  |   |   | (635 | ) |   |   | (511 | ) |
| Changes in assets and liabilities                                                    |   |   |   |   |   |   |   |   |
| Decrease in accrued interest receivable                                              |   |   | 308 |   |   |   | 2,568 |   |
| Increase in other assets                                                             |   |   | (136 | ) |   |   | (217 | ) |
| Decrease in accrued interest payable                                                 |   |   | (677 | ) |   |   | (1,814 | ) |
| Decrease in other liabilities                                                        |   |   | (1,073 | ) |   |   | (19,479 | ) |
| Net cash (used) provided by operating activities                                     |   | $ | (21,689 | ) |   | $ | 1,384 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Cash Flows from Investing Activities                                                 |   |   |   |   |   |   |   |   |
| Proceeds from maturities and principal payments of securities available for sale     |   | $ | 46,739 |   |   | $ | 40,059 |   |
| Proceeds from sales and calls of securities available for sale                       |   |   | 19,306 |   |   |   | 88,343 |   |
| Purchase of securities available for sale                                            |   |   | (92,354 | ) |   |   | (49,876 | ) |
| Net increase in loans                                                                |   |   | 14,144 |   |   |   | 16,972 |   |
| Proceeds from sale of premises and equipment                                         |   |   | 637 |   |   |   | 1,522 |   |
| Purchase of premises and equipment                                                   |   |   | (2,589 | ) |   |   | (6,793 | ) |
| Proceeds from sale of foreclosed assets                                              |   |   | 1,120 |   |   |   | 2,857 |   |
| Cash acquired in merger                                                              |   |   | - |   |   |   | 45,146 |   |
| Net cash (used) provided by investing activities                                     |   | $ | (12,997 | ) |   | $ | 138,230 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Cash Flows from Financing Activities                                                 |   |   |   |   |   |   |   |   |
| Net increase in demand, money market and savings deposits                            |   | $ | 122,561 |   |   | $ | 114,083 |   |
| Net increase (decrease) in certificates of deposit                                   |   |   | 3,799 |   |   |   | (54,005 | ) |
| Net decrease in short-term borrowings                                                |   |   | (196 | ) |   |   | (20,850 | ) |
| Proceeds from Federal Home Loan Bank advances                                        |   |   | - |   |   |   | 89,600 |   |
| Principal payments on Federal Home Loan Bank advances                                |   |   | (17,700 | ) |   |   | (100,022 | ) |
| Net decrease in commercial paper                                                     |   |   | - |   |   |   | (68,745 | ) |
| Proceeds from exercise of stock options                                              |   |   | 280 |   |   |   | 263 |   |
| Payment of preferred stock issuance costs                                            |   |   | (56 | ) |   |   | - |   |
| Cash dividends paid                                                                  |   |   | (5,141 | ) |   |   | (5,371 | ) |
| Net cash provided (used by) financing activities                                     |   | $ | 103,547 |   |   | $ | (45,047 | ) |
|                                                                                 |   |   |   |   |   |   |   |   |
| Increase in cash and cash equivalents                                                |   | $ | 68,861 |   |   | $ | 94,567 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Cash and Cash Equivalents                                                            |   |   |   |   |   |   |   |   |
| Beginning                                                                            |   |   | 115,529 |   |   |   | 41,793 |   |
| Ending                                                                               |   | $ | 184,390 |   |   | $ | 136,360 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Supplemental Disclosures of Cash Flow Information                                    |   |   |   |   |   |   |   |   |
| Cash payments for:                                                                   |   |   |   |   |   |   |   |   |
| Interest                                                                             |   | $ | 27,516 |   |   | $ | 26,121 |   |
| Income taxes                                                                         |   |   | - |   |   |   | 3,000 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Supplemental Schedule of Noncash Activities                                          |   |   |   |   |   |   |   |   |
| Foreclosed assets acquired in settlement of loans                                    |   | $ | 1,234 |   |   | $ | 1,504 |   |
| Common stock issued in Merger                                                        |   | $ | - |   |   | $ | 201,131 |   |

----

Index

LLAR

| 1. | Organization |
|----|--------------|

----

Index

| 3. | Investment Securities |
|----|-----------------------|

|                                |   | June 30, 2009  |    |   | December 31, 2008      |   |
|-------------------------------------|--------|----------------|---------|--------|------------------------|--------|
|                                |   | Amortized Cost |    |   | Gross Unrealized Gains |   |   | Gross Unrealized (Losses) |   |   | Estimated Fair Value |   |   | Amortized Cost |   |   | Gross Unrealized Gains |   |   | Gross Unrealized (Losses) |   |   | Estimated Fair Value |   |
| Securities Held to Maturity:        |   |           |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| State and municipal                 |   | $              | 427     |   |                   | $      | 4 |   |   | $ | - |   |   | $ | 431 |   |   | $ | 894 |   |   | $ | 3 |   |   | $ | - |   |   | $ | 897 |   |
| Mortgage backed securities          |   |           | 23      |   |                   |   | - |   |   |   | - |   |   |   | 23 |   |   |   | 26 |   |   |   | - |   |   |   | - |   |   |   | 26 |   |
| Total                               |   | $              | 450     |   |                   | $      | 4 |   |   | $ | - |   |   | $ | 454 |   |   | $ | 920 |   |   | $ | 3 |   |   | $ | - |   |   | $ | 923 |   |
|                                |   |           |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities Available for Sale:      |   |           |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U. S. Government agencies           |   | $              | 84,858  |   |                   | $      | 908 |   |   | $ | (170 | ) |   | $ | 85,596 |   |   | $ | 68,477 |   |   | $ | 1,107 |   |   | $ | (36 | ) |   | $ | 69,548 |   |
| State and municipals                |   |           | 114,643 |   |                   |   | 1,817 |   |   |   | (1,161 | ) |   |   | 115,299 |   |   |   | 86,021 |   |   |   | 1,031 |   |   |   | (287 | ) |   |   | 86,765 |   |
| Corporate bonds                     |   |           | 6,576   |   |                   |   | 201 |   |   |   | (7 | ) |   |   | 6,770 |   |   |   | 7,603 |   |   |   | 48 |   |   |   | (189 | ) |   |   | 7,462 |   |
| Collateralized mortgage obligations |   |           | 10,288  |   |                   |   | 91 |   |   |   | (359 | ) |   |   | 10,020 |   |   |   | 12,375 |   |   |   | 7 |   |   |   | (604 | ) |   |   | 11,778 |   |
| Mortgage backed securities          |   |           | 129,721 |   |                   |   | 3,356 |   |   |   | (3 | ) |   |   | 133,074 |   |   |   | 145,321 |   |   |   | 3,587 |   |   |   | (59 | ) |   |   | 148,849 |   |
| Certificates of deposit             |   |           | 765     |   |                   |   | - |   |   |   | - |   |   |   | 765 |   |   |   | 747 |   |   |   | - |   |   |   | - |   |   |   | 747 |   |
| Equity securities                   |   |           | 3,984   |   |                   |   | 2 |   |   |   | (2,004 | ) |   |   | 1,982 |   |   |   | 3,933 |   |   |   | 2 |   |   |   | (1,920 | ) |   |   | 2,015 |   |
| Other                               |   |           | 11      |   |                   |   | - |   |   |   | - |   |   |   | 11 |   |   |   | 9 |   |   |   | - |   |   |   | - |   |   |   | 9 |   |
| Total                               |   | $              | 350,846 |   |                   | $      | 6,375 |   |   | $ | (3,704 | ) |   | $ | 353,517 |   |   | $ | 324,486 |   |   | $ | 5,782 |   |   | $ | (3,095 | ) |   | $ | 327,173 |   |

|                  |   | Three Months Ended |   |   | Six Months Ended |   |
|-----------------------|--------|--------------------|--------|--------|------------------|--------|
|                  |   | June 30, 2009      |   |   | June 30, 2009    |   |
|                  |   | 2009               |   |   | 2008             |   |   | 2009 |   |   | 2008 |   |
|                  |   |               |   |   |             |   |   |   |   |   |   |   |
| Proceeds from sales   |   | $                  | 13,516 |   |             | $      | 23,527 |   |   | $ | 19,306 |   |   | $ | 88,343 |   |
| Gross realized gains  |   |               | 11     |   |             |   | 548 |   |   |   | 13 |   |   |   | 648 |   |
| Gross realized losses |   |               | -      |   |             |   | (342 | ) |   |   | - |   |   |   | (410 | ) |

|                                |   | Less than 12 months  |   |   | 12 months or more |   |   | Total                |   |
|-------------------------------------|--------|----------------------|--------|--------|-------------------|--------|--------|----------------------|--------|
| Description of Securities           |   | Estimated Fair Value |   |   | Unrealized Losses |   |   | Estimated Fair Value |   |   | Unrealized Losses |   |   | Estimated Fair Value |   |   | Unrealized Losses |   |
| Available for Sale                  |   |                 |   |   |              |   |   |                 |   |   |   |   |   |   |   |   |   |   |
| U. S. Government Agencies           |   | $                    | 21,171 |   |              | $      | 155    |                 |   | $ | 2,070 |   |   | $ | 15 |   |   | $ | 23,241 |   |   | $ | 170 |   |
| Mortgage backed securities          |   |                 | 675    |   |              |   | 1      |                 |   |   | 377 |   |   |   | 2 |   |   |   | 1,052 |   |   |   | 3 |   |
| State and municipals                |   |                 | 27,236 |   |              |   | 1,079  |                 |   |   | 931 |   |   |   | 82 |   |   |   | 28,167 |   |   |   | 1,161 |   |
| Corporate bonds                     |   |                 | -      |   |              |   | -      |                 |   |   | 4,034 |   |   |   | 359 |   |   |   | 4,034 |   |   |   | 359 |   |
| Collateralized mortgage obligations |   |                 | -      |   |              |   | -      |                 |   |   | 1,009 |   |   |   | 7 |   |   |   | 1,009 |   |   |   | 7 |   |
| Subtotal debt securities            |   |                 | 49,082 |   |              |   | 1,235  |                 |   |   | 8,421 |   |   |   | 465 |   |   |   | 57,503 |   |   |   | 1,700 |   |
| Equity securities                   |   |                 | -      |   |              |   | -      |                 |   |   | 1,742 |   |   |   | 2,004 |   |   |   | 1,742 |   |   |   | 2,004 |   |
| Total                               |   | $                    | 49,082 |   |              | $      | 1,235  |                 |   | $ | 10,163 |   |   | $ | 2,469 |   |   | $ | 59,245 |   |   | $ | 3,704 |   |

----

Index

|                                   |   | Held to Maturity |   |   | Available for Sale |   |
|----------------------------------------|--------|------------------|--------|--------|--------------------|--------|
|                                   |   | Amortized Cost   |   |   | Fair Value         |   |   | Amortized Cost |   |   | Fair Value |   |
| Due in one year or less                |   | $                | 427    |   |               | $      | 431 |   |   | $ | 24,940 |   |   | $ | 25,064 |   |
| Due after one year through five years  |   |             | -      |   |               |   | - |   |   |   | 113,432 |   |   |   | 115,426 |   |
| Due after five years through ten years |   |             | 23     |   |               |   | 23 |   |   |   | 69,746 |   |   |   | 70,420 |   |
| Due after ten years                    |   |             | -      |   |               |   | - |   |   |   | 138,733 |   |   |   | 140,614 |   |
| Equity securities                      |   |             | -      |   |               |   | - |   |   |   | 3,984 |   |   |   | 1,982 |   |
| Other                                  |   |             | -      |   |               |   | - |   |   |   | 11 |   |   |   | 11 |   |
| Total                                  |   | $                | 450    |   |               | $      | 454 |   |   | $ | 350,846 |   |   | $ | 353,517 |   |

----

Index

| 4. | Loans Receivable |
|----|------------------|

|                                         |   | June 30,    |      |   | December 31, |   |
|----------------------------------------------|--------|-------------|-----------|--------|--------------|--------|
|                                         |   | 2009        |      |   | 2008         |   |
|                                         |   | (unaudited) |      |   |         |   |
| Real estate loans:                           |   |        |      |   |         |   |
| Construction and land development            |   | $           | 344,694   |   |         | $      | 380,833 |   |
| Secured by 1-4 family residential            |   |        | 720,832   |   |         |   | 706,727 |   |
| Commercial and multifamily                   |   |        | 888,804   |   |         |   | 876,649 |   |
| Commercial, financial and agricultural loans |   |        | 220,557   |   |         |   | 225,637 |   |
| Consumer loans                               |   |        | 50,783    |   |         |   | 60,042 |   |
| All other loans                              |   |        | 14,443    |   |         |   | 13,403 |   |
| Total loans                                  |   |        | 2,240,113 |   |         |   | 2,263,291 |   |
| Deferred loan costs                          |   |        | 984       |   |         |   | 1,295 |   |
| Allowance for loan losses                    |   |        | (34,923   | )      |         |   | (30,464 | ) |
| Net loans                                    |   | $           | 2,206,174 |   |         | $      | 2,234,122 |   |

| 5. | Allowance for Loan Losses |
|----|---------------------------|

|                              |   | June 30,    |    |   | December 31, |   |    | June 30,    |   |
|-----------------------------------|--------|-------------|---------|--------|--------------|--------|---------|-------------|--------|
|                              |   | 2009        |    |   | 2008         |   |    | 2008        |   |
|                              |   | (unaudited) |    |   |         |   |    | (unaudited) |   |
|                              |   |        |    |   |         |   |    |        |   |
| Balance, beginning                |   | $           | 30,464  |   |         | $      | 15,082  |        |   | $ | 15,082 |   |
| Provisions for loan losses        |   |        | 14,250  |   |         |   | 20,787  |        |   |   | 3,787 |   |
| Loans charged off                 |   |        | (11,225 | )      |         |   | (18,191 | )           |   |   | (2,526 | ) |
| Recoveries                        |   |        | 1,434   |   |         |   | 1,247   |        |   |   | 733 |   |
| Net charge-offs                   |   |        | (9,791  | )      |         |   | (16,944 | )           |   |   | (1,793 | ) |
| Allowance assumed via acquisition |   |        | -       |   |         |   | 11,539  |        |   |   | 11,539 |   |
| Balance, ending                   |   | $           | 34,923  |   |         | $      | 30,464  |        |   | $ | 28,615 |   |

----

Index

|                                                                             |   | June 30,    |   |   | December 31, |   |
|----------------------------------------------------------------------------------|--------|-------------|--------|--------|--------------|--------|
|                                                                             |   | 2009        |   |   | 2008         |   |
|                                                                             |   | (unaudited) |   |   |         |   |
|                                                                             |   |        |   |   |         |   |
| Impaired loans for which an allowance has been provided                          |   | $           | 43,006 |   |         | $      | 34,055 |   |
| Impaired loans for which an allowance has not been provided                      |   |        | 14,018 |   |         |   | 24,650 |   |
| Total impaired loans                                                             |   | $           | 57,024 |   |         | $      | 58,705 |   |
| Allowance provided for impaired loans, included in the allowance for loan losses |   | $           | 12,270 |   |         | $      | 5,503 |   |

| 6. | (Loss) Earnings Per Share |
|----|---------------------------|

|                                                             |   | June 30,    |       |   | June 30,    |   |
|------------------------------------------------------------------|--------|-------------|------------|--------|-------------|--------|
| (In thousands, except per share amounts)                         |   | 2009        |       |   | 2008        |   |
|                                                             |   | (unaudited) |       |   | (unaudited) |   |
|                                                             |   |        |       |   |        |   |
| Net (loss) income                                                |   | $           | (326       | )      |        | $      | 6,140 |   |
| Less:                                                            |   |        |       |   |        |   |   |   |
| Preferred stock dividends                                        |   |        | (374       | )      |        |   | - |   |
| Accretion of preferred stock discount                            |   |        | (85        | )      |        |   | - |   |
| Net (loss) income available to common shareholders (numerator)   |   | $           | (785       | )      |        | $      | 6,140 |   |
|                                                             |   |        |       |   |        |   |   |   |
| (Loss) earnings per common share                                 |   |        |       |   |        |   |   |   |
| Weighted average common shares outstanding (denominator)         |   |        | 22,641,114 |   |        |   | 22,585,161 |   |
| (Loss) earnings per common share                                 |   | $           | (0.03      | )      |        | $      | 0.27 |   |
|                                                             |   |        |       |   |        |   |   |   |
| Diluted (loss) earnings per common share                         |   |        |       |   |        |   |   |   |
| Weighted average common shares issued and outstanding            |   |        | 22,641,114 |   |        |   | 22,585,161 |   |
| Add:                                                             |   |        |       |   |        |   |   |   |
| Restricted stock                                                 |   |        | -          |   |        |   | 16,232 |   |
| Incentive stock options                                          |   |        | -          |   |        |   | 7,355 |   |
| Stock options                                                    |   |        | -          |   |        |   | 43,243 |   |
| Diluted weighted average common shares outstanding (denominator) |   |        | 22,641,114 |   |        |   | 22,651,991 |   |
| Diluted (loss) earnings per common share                         |   | $           | (0.03      | )      |        | $      | 0.27 |   |

----

Index

|                                                             |   | June 30,    |       |   | June 30,    |   |
|------------------------------------------------------------------|--------|-------------|------------|--------|-------------|--------|
| (In thousands, except per share amounts)                         |   | 2009        |       |   | 2008        |   |
|                                                             |   | (unaudited) |       |   | (unaudited) |   |
|                                                             |   |        |       |   |        |   |
| Net (loss) income                                                |   | $           | (180       | )      |        | $      | 8,227 |   |
| Less:                                                            |   |        |       |   |        |   |   |   |
| Preferred stock dividends                                        |   |        | (744       | )      |        |   | - |   |
| Accretion of preferred stock discount                            |   |        | (159       | )      |        |   | - |   |
| Net (loss) income available to common shareholders (numerator)   |   | $           | (1,083     | )      |        | $      | 8,227 |   |
|                                                             |   |        |       |   |        |   |   |   |
| (Loss) earnings per common share                                 |   |        |       |   |        |   |   |   |
| Weighted average common shares outstanding (denominator)         |   |        | 22,630,323 |   |        |   | 18,831,352 |   |
| (Loss) earnings per common share                                 |   | $           | (0.05      | )      |        | $      | 0.44 |   |
|                                                             |   |        |       |   |        |   |   |   |
| Diluted (loss) earnings per common share                         |   |        |       |   |        |   |   |   |
| Weighted average common shares issued and outstanding            |   |        | 22,630,323 |   |        |   | 18,831,352 |   |
| Add:                                                             |   |        |       |   |        |   |   |   |
| Restricted stock                                                 |   |        | -          |   |        |   | 12,794 |   |
| Incentive stock options                                          |   |        | -          |   |        |   | 8,540 |   |
| Stock options                                                    |   |        | -          |   |        |   | 46,669 |   |
| Diluted weighted average common shares outstanding (denominator) |   |        | 22,630,323 |   |        |   | 18,899,355 |   |
| Diluted (loss) earnings per common share                         |   | $           | (0.05      | )      |        | $      | 0.44 |   |

----

Index

| 7. | Stock-Based Compensation |
|----|--------------------------|

|                   |   | 2009             |    |   | 2008                            |   |
|------------------------|--------|------------------|---------|--------|---------------------------------|--------|
|                   |   | Number of Shares |    |   | Weighted Average Exercise Price |   |   | Number of Shares |   |   | Weighted Average Exercise Price |   |
|                   |   |             |    |   |                            |   |   |   |   |   |   |   |
| Outstanding, January 1 |   |             | 614,198 |   |                            | $      | 18.58 |   |   |   | 239,671 |   |   | $ | 23.37 |   |
| Acquired via merger    |   |             | -       |   |                            |   | - |   |   |   | 311,606 |   |   |   | 14.02 |   |
| Granted                |   |             | 17,392  |   |                            |   | 12.78 |   |   |   | 123,061 |   |   |   | 18.27 |   |
| Forfeited              |   |             | (4,880  | )      |                            |   | - |   |   |   | (3,593 | ) |   |   | 21.17 |   |
| Expired                |   |             | -       |   |                            |   | - |   |   |   | (13,144 | ) |   |   | 11.79 |   |
| Exercised              |   |             | (28,835 | )      |                            |   | 9.73 |   |   |   | (25,784 | ) |   |   | 10.58 |   |
| Outstanding, June 30,  |   |             | 597,875 |   |                            | $      | 18.69 |   |   |   | 631,817 |   |   | $ | 18.53 |   |
|                   |   |             |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Exercisable, June 30,  |   |             | 482,947 |   |                            |   |   |   |   |   | 509,656 |   |   |   |   |   |

----

Index

| Nonvested Shares             |   | Number of Shares |    |   | Weighted-Average Grant-Date Fair Value |   |   | (In thousands) Total Intrinsic Value |   |
|------------------------------|--------|------------------|---------|--------|--------------------------------------------------|--------|--------|--------------------------------------|--------|
|                         |   |             |    |   |                                             |   |   |                                 |   |
| Nonvested at January 1, 2009 |   |             | 35,401  |   |                                             | $      | 16.31  |                                 |   | $ | 598 |   |
| Granted                      |   |             | 37,430  |   |                                             |   | 12.68  |                                 |   |   |   |   |
| Vested & Exercised       |   |             | (18,894 | )      |                                             |   | 16.25  |                                 |   | $ | (237 | ) |
| Forfeited                    |   |             | (200    | )      |                                             |   | 15.65  |                                 |   |   |   |   |
| Nonvested at June 30, 2009   |   |             | 53,737  |   |                                             | $      | 13.81  |                                 |   | $ | 696 |   |

|                                        |   | Stock Options |   |   | Nonvested Restricted Stock |   |   | Total  |   |
|---------------------------------------------|--------|---------------|--------|--------|----------------------------|--------|--------|--------|--------|
|                                        |   |          |   |   |                       |   |   |   |   |
| For the remaining six months of 2009        |   | $             | 35     |   |                       | $      | 186    |   |   | $ | 221 |   |
| For year ended December 31,  2010 |   |          | 70     |   |                       |   | 220    |   |   |   | 290 |   |
| For year ended December 31,  2011 |   |          | 70     |   |                       |   | 101    |   |   |   | 171 |   |
| For year ended December 31,  2012 |   |          | 70     |   |                       |   | 55     |   |   |   | 125 |   |
| For year ended December 31,  2013 |   |          | 24     |   |                       |   | 44     |   |   |   | 68 |   |
| For year ended December 31,  2014 |   |          | 1      |   |                       |   | 3      |   |   |   | 4 |   |
| Total                                       |   | $             | 270    |   |                       | $      | 609    |   |   | $ | 879 |   |

----

Index

----

Index

----

Index

| (unaudited)                              |   | Total  |    |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
|------------------------------------------|--------|--------|---------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| Investment securities available-for-sale |   | $      | 353,517 |   |    | $      | 1,981  |    |   | $      | 351,536 |   |   | $ | - |   |
| Total assets at fair value               |   | $      | 353,517 |   |    | $      | 1,981  |    |   | $      | 351,536 |   |   | $ | - |   |
|                                     |   |   |    |   |    |   |   |    |   |   |    |   |   |   |   |   |
| Other liabilities (1)                    |   | $      | 2,440   |   |    | $      | 2,440  |    |   | $      | -       |   |   | $ | - |   |
| Total liabilities at fair value          |   | $      | 2,440   |   |    | $      | 2,440  |    |   | $      | -       |   |   | $ | - |   |

| (unaudited)                     |   | Total  |    |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
|---------------------------------|--------|--------|---------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| Loans - impaired loans          |   | $      | 57,024  |   |    | $      | -      |    |   | $      | 36,231  |   |   | $ | 20,793 |   |
| Loans held for sale - mortgage  |   |   | 51,229  |   |    |   | -      |    |   |   | 51,229  |   |   |   | - |   |
| Foreclosed assets               |   |   | 4,121   |   |    |   | -      |    |   |   | 1,785   |   |   |   | 2,336 |   |
| Total assets at fair value      |   | $      | 112,374 |   |    | $      | -      |    |   | $      | 89,245  |   |   | $ | 23,129 |   |
|                            |   |   |    |   |    |   |   |    |   |   |    |   |   |   |   |   |
| Total liabilities at fair value |   | $      | -       |   |    | $      | -      |    |   | $      | -       |   |   | $ | - |   |

----

Index

|                                                                       |   | June 30, 2009   |      |   | December 31, 2008    |   |
|----------------------------------------------------------------------------|--------|-----------------|-----------|--------|----------------------|--------|
|                                                                       |   | Carrying Amount |      |   | Estimated Fair Value |   |   | Carrying Amount |   |   | Estimated Fair Value |   |
| Financial assets:                                                          |   |            |      |   |                 |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                  |   | $               | 184,390   |   |                 | $      | 184,390 |   |   | $ | 115,529 |   |   | $ | 115,529 |   |
| Investment securities                                                      |   |            | 353,967   |   |                 |   | 353,971 |   |   |   | 328,093 |   |   |   | 328,096 |   |
| Mortgage loans held for sale                                               |   |            | 51,229    |   |                 |   | 51,229 |   |   |   | 15,847 |   |   |   | 15,847 |   |
| Loans, net                                                                 |   |            | 2,206,174 |   |                 |   | 2,218,155 |   |   |   | 2,234,122 |   |   |   | 2,248,579 |   |
| Accrued interest receivable                                                |   |            | 9,922     |   |                 |   | 9,922 |   |   |   | 10,230 |   |   |   | 10,230 |   |
|                                                                       |   |            |      |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:                                                     |   |            |      |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                   |   | $               | 2,449,338 |   |                 | $      | 2,465,381 |   |   | $ | 2,323,108 |   |   | $ | 2,340,791 |   |
| Federal funds purchased and securities sold under agreements to repurchase |   |            | 503       |   |                 |   | 503 |   |   |   | 699 |   |   |   | 699 |   |
| Federal Home Loan Bank advances                                            |   |            | 170,000   |   |                 |   | 175,514 |   |   |   | 187,700 |   |   |   | 195,955 |   |
| Subordinated debt                                                          |   |            | 32,991    |   |                 |   | 33,063 |   |   |   | 32,991 |   |   |   | 33,086 |   |
| Accrued interest payable                                                   |   |            | 4,799     |   |                 |   | 4,799 |   |   |   | 5,476 |   |   |   | 5,476 |   |

----

Index

----

Index

----

Index

AGE

----

Index

----

Index

----

Index

----

Index

|                                                                       |   | For the Three Months Ended June 30, |      |
|----------------------------------------------------------------------------|--------|-------------------------------------|-----------|
|                                                                       |   | (unaudited)                         |      |
|                                                                       |   | 2009                                |      |   | 2008 |   |
| Dollars in thousands                                                       |   | Average Balance                     |      |   | Interest Inc/Exp |   |   | Average Rates |   |   | Average Balance |   |   | Interest Inc/Exp |   |   | Average Rates |   |
|                                                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Assets                                                                     |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans receivable, net                                                      |   | $                                   | 2,291,735 |   |   | $ | 31,801 |   |   |   | 5.57 | % |   | $ | 2,288,804 |   |   | $ | 39,329 |   |   |   | 6.91 | % |
| Investment securities                                                      |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                    |   |                                | 230,102   |   |   |   | 2,624 |   |   |   | 4.51 | % |   |   | 307,571 |   |   |   | 3,500 |   |   |   | 4.50 | % |
| Tax exempt                                                                 |   |                                | 97,122    |   |   |   | 1,496 |   |   |   | 6.09 | % |   |   | 95,604 |   |   |   | 1,531 |   |   |   | 6.34 | % |
| Total investments                                                          |   |                                | 327,224   |   |   |   | 4,120 |   |   |   | 4.98 | % |   |   | 403,175 |   |   |   | 5,031 |   |   |   | 4.94 | % |
|                                                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing deposits                                                  |   |                                | 51,966    |   |   |   | 31 |   |   |   | 0.24 | % |   |   | 3,943 |   |   |   | 9 |   |   |   | 0.90 | % |
| Federal funds sold                                                         |   |                                | 58,560    |   |   |   | 20 |   |   |   | 0.14 | % |   |   | 63,198 |   |   |   | 340 |   |   |   | 2.13 | % |
|                                                                       |   |                                | 437,750   |   |   |   | 4,171 |   |   |   | 3.77 | % |   |   | 470,316 |   |   |   | 5,380 |   |   |   | 4.53 | % |
|                                                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total earning assets                                                       |   |                                | 2,729,485 |   |   | $ | 35,972 |   |   |   | 5.29 | % |   |   | 2,759,120 |   |   | $ | 44,709 |   |   |   | 6.51 | % |
|                                                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total nonearning assets                                                    |   |                                | 283,599   |   |   |   |   |   |   |   |   |   |   |   | 290,706 |   |   |   |   |   |   |   |   |   |
|                                                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                                               |   | $                                   | 3,013,084 |   |   |   |   |   |   |   |   |   |   | $ | 3,049,826 |   |   |   |   |   |   |   |   |   |
|                                                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and Stockholders' Equity                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing deposits                                                  |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest checking                                                          |   | $                                   | 524,408   |   |   | $ | 1,255 |   |   |   | 0.96 | % |   | $ | 497,074 |   |   | $ | 505 |   |   |   | 0.41 | % |
| Money market                                                               |   |                                | 275,534   |   |   |   | 1,047 |   |   |   | 1.52 | % |   |   | 191,406 |   |   |   | 817 |   |   |   | 1.71 | % |
| Savings                                                                    |   |                                | 191,788   |   |   |   | 420 |   |   |   | 0.88 | % |   |   | 211,158 |   |   |   | 1,755 |   |   |   | 3.33 | % |
| Time deposits:                                                             |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less than $100,000                                                         |   |                                | 794,180   |   |   |   | 5,926 |   |   |   | 2.99 | % |   |   | 769,415 |   |   |   | 5,664 |   |   |   | 2.95 | % |
| $100,000 and more                                                          |   |                                | 305,297   |   |   |   | 2,712 |   |   |   | 3.56 | % |   |   | 364,876 |   |   |   | 3,717 |   |   |   | 4.09 | % |
| Total interest-bearing deposits                                            |   |                                | 2,091,207 |   |   |   | 11,360 |   |   |   | 2.18 | % |   |   | 2,033,929 |   |   |   | 12,458 |   |   |   | 2.46 | % |
|                                                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal funds purchased and securities sold under agreements to repurchase |   |                                | 464       |   |   |   | 3 |   |   |   | 2.56 | % |   |   | 7,919 |   |   |   | 5 |   |   |   | 0.25 | % |
| Federal Home Loan Bank advances and other borrowings                       |   |                                | 170,067   |   |   |   | 1,553 |   |   |   | 3.61 | % |   |   | 236,759 |   |   |   | 1,634 |   |   |   | 2.73 | % |
| Subordinated debt                                                          |   |                                | 32,991    |   |   |   | 343 |   |   |   | 4.11 | % |   |   | 32,991 |   |   |   | 466 |   |   |   | 5.59 | % |
| Commercial paper                                                           |   |                                | -         |   |   |   | - |   |   |   | N/A |   |   |   | 23,821 |   |   |   | 156 |   |   |   | 2.59 | % |
|                                                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   |                                | 203,522   |   |   |   | 1,899 |   |   |   | 3.69 | % |   |   | 301,490 |   |   |   | 2,261 |   |   |   | 2.97 | % |
|                                                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total interest-bearing liabilities                                         |   |                                | 2,294,729 |   |   |   | 13,259 |   |   |   | 2.31 | % |   |   | 2,335,419 |   |   |   | 14,719 |   |   |   | 2.53 | % |
|                                                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total noninterest-bearing liabilities                                      |   |                                | 327,425   |   |   |   |   |   |   |   |   |   |   |   | 347,080 |   |   |   |   |   |   |   |   |   |
|                                                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                          |   |                                | 2,622,154 |   |   |   |   |   |   |   |   |   |   |   | 2,682,499 |   |   |   |   |   |   |   |   |   |
| Stockholders' equity                                                       |   |                                | 390,930   |   |   |   |   |   |   |   |   |   |   |   | 367,327 |   |   |   |   |   |   |   |   |   |
|                                                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders' equity                                 |   | $                                   | 3,013,084 |   |   |   |   |   |   |   |   |   |   | $ | 3,049,826 |   |   |   |   |   |   |   |   |   |
|                                                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income (tax equivalent)                                       |   |                                |      |   |   | $ | 22,713 |   |   |   |   |   |   |   |   |   |   | $ | 29,990 |   |   |   |   |   |
| Average interest rate spread                                               |   |                                |      |   |   |   |   |   |   |   | 2.97 | % |   |   |   |   |   |   |   |   |   |   | 3.98 | % |
| Interest expense as percentage of average earning assets                   |   |                                |      |   |   |   |   |   |   |   | 1.95 | % |   |   |   |   |   |   |   |   |   |   | 2.14 | % |
| Net interest margin                                                        |   |                                |      |   |   |   |   |   |   |   | 3.34 | % |   |   |   |   |   |   |   |   |   |   | 4.37 | % |

----

Index

|                                                                       |   | For the Six Months Ended June 30, |      |
|----------------------------------------------------------------------------|--------|-----------------------------------|-----------|
|                                                                       |   | (unaudited)                       |      |
|                                                                       |   | 2009                              |      |   | 2008 |   |
|                                                                       |   | Average                           |      |   | Interest |   |   | Average |   |   | Average |   |   | Interest |   |   | Average |   |
| Dollars in thousands                                                       |   | Balance                           |      |   | Inc/Exp |   |   | Rates |   |   | Balance |   |   | Inc/Exp |   |   | Rates |   |
|                                                                       |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Assets                                                                     |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans receivable, net                                                      |   | $                                 | 2,288,118 |   |   | $ | 64,400 |   |   |   | 5.69 | % |   | $ | 1,958,566 |   |   | $ | 66,628 |   |   |   | 6.84 | % |
| Investment securities                                                      |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                    |   |                              | 228,873   |   |   |   | 5,382 |   |   |   | 4.68 | % |   |   | 255,090 |   |   |   | 6,468 |   |   |   | 5.02 | % |
| Tax exempt                                                                 |   |                              | 90,414    |   |   |   | 2,801 |   |   |   | 6.16 | % |   |   | 89,971 |   |   |   | 1,838 |   |   |   | 4.04 | % |
| Total investments                                                          |   |                              | 319,287   |   |   |   | 8,183 |   |   |   | 5.10 | % |   |   | 345,061 |   |   |   | 8,306 |   |   |   | 4.76 | % |
|                                                                       |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing deposits                                                  |   |                              | 50,885    |   |   |   | 40 |   |   |   | 0.16 | % |   |   | 2,214 |   |   |   | 12 |   |   |   | 1.07 | % |
| Federal funds sold                                                         |   |                              | 38,046    |   |   |   | 43 |   |   |   | 0.22 | % |   |   | 44,910 |   |   |   | 523 |   |   |   | 2.29 | % |
|                                                                       |   |                              | 408,218   |   |   |   | 8,266 |   |   |   | 4.03 | % |   |   | 392,185 |   |   |   | 8,841 |   |   |   | 4.46 | % |
|                                                                       |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total earning assets                                                       |   |                              | 2,696,336 |   |   | $ | 72,666 |   |   |   | 5.44 | % |   |   | 2,350,751 |   |   | $ | 75,469 |   |   |   | 6.45 | % |
|                                                                       |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total nonearning assets                                                    |   |                              | 286,494   |   |   |   |   |   |   |   |   |   |   |   | 228,856 |   |   |   |   |   |   |   |   |   |
|                                                                       |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                                               |   | $                                 | 2,982,830 |   |   |   |   |   |   |   |   |   |   | $ | 2,579,607 |   |   |   |   |   |   |   |   |   |
|                                                                       |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and Stockholders' Equity                                       |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing deposits                                                  |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest checking                                                          |   | $                                 | 520,463   |   |   | $ | 2,652 |   |   |   | 1.03 | % |   | $ | 401,052 |   |   | $ | 898 |   |   |   | 0.45 | % |
| Money market                                                               |   |                              | 255,453   |   |   |   | 1,877 |   |   |   | 1.48 | % |   |   | 161,291 |   |   |   | 1,482 |   |   |   | 1.84 | % |
| Savings                                                                    |   |                              | 190,103   |   |   |   | 830 |   |   |   | 0.88 | % |   |   | 169,115 |   |   |   | 2,796 |   |   |   | 3.32 | % |
| Time deposits:                                                             |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less than $100,000                                                         |   |                              | 778,506   |   |   |   | 11,986 |   |   |   | 3.10 | % |   |   | 641,569 |   |   |   | 10,962 |   |   |   | 3.43 | % |
| $100,000 and more                                                          |   |                              | 314,643   |   |   |   | 5,666 |   |   |   | 3.63 | % |   |   | 310,141 |   |   |   | 6,525 |   |   |   | 4.22 | % |
| Total interest-bearing deposits                                            |   |                              | 2,059,168 |   |   |   | 23,011 |   |   |   | 2.25 | % |   |   | 1,683,168 |   |   |   | 22,663 |   |   |   | 2.70 | % |
|                                                                       |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal funds purchased and securities sold under agreements to repurchase |   |                              | 405       |   |   |   | 7 |   |   |   | 3.44 | % |   |   | 6,681 |   |   |   | 60 |   |   |   | 1.78 | % |
| Federal Home Loan Bank advances and other borrowings                       |   |                              | 177,155   |   |   |   | 3,120 |   |   |   | 3.50 | % |   |   | 210,851 |   |   |   | 3,545 |   |   |   | 3.34 | % |
| Subordinated debt                                                          |   |                              | 32,991    |   |   |   | 700 |   |   |   | 4.22 | % |   |   | 28,708 |   |   |   | 930 |   |   |   | 6.41 | % |
| Commercial paper                                                           |   |                              | -         |   |   |   | - |   |   |   | N/A |   |   |   | 49,010 |   |   |   | 635 |   |   |   | 2.56 | % |
|                                                                       |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   |                              | 210,551   |   |   |   | 3,827 |   |   |   | 3.62 | % |   |   | 295,928 |   |   |   | 5,170 |   |   |   | 3.46 | % |
|                                                                       |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total interest-bearing liabilities                                         |   |                              | 2,269,719 |   |   |   | 26,838 |   |   |   | 2.38 | % |   |   | 1,979,096 |   |   |   | 27,833 |   |   |   | 2.81 | % |
|                                                                       |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total noninterest-bearing liabilities                                      |   |                              | 320,650   |   |   |   |   |   |   |   |   |   |   |   | 306,688 |   |   |   |   |   |   |   |   |   |
|                                                                       |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                          |   |                              | 2,590,369 |   |   |   |   |   |   |   |   |   |   |   | 2,285,784 |   |   |   |   |   |   |   |   |   |
| Stockholders' equity                                                       |   |                              | 392,461   |   |   |   |   |   |   |   |   |   |   |   | 293,823 |   |   |   |   |   |   |   |   |   |
|                                                                       |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders' equity                                 |   | $                                 | 2,982,830 |   |   |   |   |   |   |   |   |   |   | $ | 2,579,607 |   |   |   |   |   |   |   |   |   |
|                                                                       |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income (tax equivalent)                                       |   |                              |      |   |   | $ | 45,828 |   |   |   |   |   |   |   |   |   |   | $ | 47,636 |   |   |   |   |   |
| Average interest rate spread                                               |   |                              |      |   |   |   |   |   |   |   | 3.06 | % |   |   |   |   |   |   |   |   |   |   | 3.64 | % |
| Interest expense as percentage of average earning assets                   |   |                              |      |   |   |   |   |   |   |   | 2.01 | % |   |   |   |   |   |   |   |   |   |   | 2.37 | % |
| Net interest margin                                                        |   |                              |      |   |   |   |   |   |   |   | 3.43 | % |   |   |   |   |   |   |   |   |   |   | 4.08 | % |

----

Index

----

Index

----

Index

|                                                                    |   | June 30, 2009 |   |   | December 31, 2008 |   |   | June 30, 2008 |   |
|-------------------------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|--------|---------------|--------|
|                                                                    |   | (unaudited)   |   |   |              |   |   | (unaudited)   |   |
|                                                                    |   |          |   |   |              |   |   |          |   |
| Non-accrual loans                                                       |   | $             | 71,590 |   |              | $      | 44,491 |          |   | $ | 22,392 |   |
| Troubled debt restructurings                                            |   |          | 1,405  |   |              |   | -      |          |   |   | 814 |   |
| Foreclosed assets                                                       |   |          | 4,121  |   |              |   | 4,627  |          |   |   | 2,260 |   |
| Loans past due 90 days accruing interest                                |   |          | 2,458  |   |              |   | -      |          |   |   | 465 |   |
| Total non-performing assets                                             |   | $             | 79,574 |   |              | $      | 49,118 |          |   | $ | 25,931 |   |
| Nonperforming assets to total assets                                    |   |          | 2.60   | %      |              |   | 1.66   | %             |   |   | 0.86 | % |
| Nonperforming assets to loans and foreclosed property                   |   |          | 3.55   | %      |              |   | 2.17   | %             |   |   | 1.13 | % |
| Allowance for loan losses as a percentage of loans receivable           |   |          | 1.56   | %      |              |   | 1.35   | %             |   |   | 1.25 | % |
| Allowance for loan losses as a percentage of nonperforming assets       |   |          | 43.89  | %      |              |   | 62.02  | %             |   |   | 110.35 | % |
| Annualized net charge-offs as a percentage of average loans receiveable |   |          | 1.20   | %      |              |   | 0.80   | %             |   |   | 0.22 | % |

----

Index

|                                                             |   | Corporation |      |   | Bank   |   |
|------------------------------------------------------------------|--------|-------------|-----------|--------|--------|--------|
| Tier 1 capital                                                   |   | $           | 340,224   |   |   | $      | 289,361 |   |
| Tier 2 capital                                                   |   |        | 31,624    |   |   |   | 31,592 |   |
| Total risk-based capital                                         |   |        | 371,848   |   |   |   | 320,953 |   |
| Total risk-weighted assets                                       |   |        | 2,526,583 |   |   |   | 2,524,052 |   |
| Average adjusted total assets                                    |   |        | 2,937,012 |   |   |   | 2,915,463 |   |
| Capital ratios:                                                  |   |        |      |   |   |   |   |   |
| Tier 1 risk-based capital ratio                                  |   |        | 13.47     | %      |   |   | 11.46 | % |
| Total risk-based capital ratio                                   |   |        | 14.72     | %      |   |   | 12.72 | % |
| Leverage ratio (Tier 1 capital to average adjusted total assets) |   |        | 11.58     | %      |   |   | 9.93 | % |
| Equity to assets ratio                                           |   |        | 13.15     | %      |   |   | 12.70 | % |
| Tangible equity to assets ratio                                  |   |        | 10.27     | %      |   |   | 9.78 | % |

----

Index

----

Index

NTIT

----

Index

NTR

----

Index

| ITEM 1. | LEGAL PROCEEDINGS. |
|---------|--------------------|

| ITEM 1a. | RISK FACTORS. |
|----------|---------------|

| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. |
|---------|--------------------------------------------------------------|

| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES. |
|---------|----------------------------------|

| ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
|---------|------------------------------------------------------|

|               |   | For    |       |   | Withheld |   |
|--------------------|--------|--------|------------|--------|----------|--------|
| Beverley E. Dalton |   |   | 16,661,402 |   |     |   | 1,904,019 |   |
| Steven D. Irvin.   |   |   | 16,835,169 |   |     |   | 1,730,252 |   |
| H. Wayne Parrish   |   |   | 16,528,105 |   |     |   | 2,037,316 |   |
| Charles W. Steger  |   |   | 16,568,088 |   |     |   | 1,997,333 |   |

| For        |   |   | Against   |   |   | Abstain |   |
|------------|--------|--------|-----------|--------|--------|---------|--------|
| 15,285,334 |   |   | 3,042,491 |   |   | 237,596 |   |

| For        |   |   | Against   |   |   | Abstain |   |
|------------|--------|--------|-----------|--------|--------|---------|--------|
| 14,749,497 |   |   | 3,406,728 |   |   | 409,196 |   |

| ITEM 5. | OTHER INFORMATION. |
|---------|--------------------|

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Index

HIB

|   | Exhibit No. 2.1 | Agreement and Plan of Reorganization, dated as of July 26, 2007, between Virginia Financial Group, Inc. and FNB Corporation, incorporated by reference to Exhibit 2.1 to Form 8-K filed July 30, 2007. |
|--------|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Exhibit No. 3.1 | Articles of Incorporation of StellarOne Corporation (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on February 28, 2008) |
|--------|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Exhibit No. 3.1(a) | Articles of Amendment to the Articles of Incorporation, effective December 19, 2008, establishing Series A Preferred Stock (incorporated by reference to Exhibit 3.1 to Form 8-K filed on December 23, 2008) |
|--------|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Exhibit No. 3.1(b) | Articles of Amendment to the Articles of Incorporation, effective June 1, 2009, changing the number of authorized shares of capital stock (filed herewith) |
|--------|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Exhibit No. 3.2 | Bylaws of StellarOne Corporation, as amended and restated February 28, 2008. (incorporated by reference to Exhibit 3.2 to Form 8-K filed on February 28, 2008) |
|--------|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Exhibit No. 4.1 | Warrant to purchase up to 302,623 shares of Common Stock (incorporated by reference to Exhibit 4.1 to Form 8K filed on December 23, 2008) |
|--------|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | Exhibit No. 31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. |
|--------|------------------|-------------------------------------------------------------------------------------------------------------------------|

|   | Exhibit No. 31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. |
|--------|------------------|-------------------------------------------------------------------------------------------------------------------------|

|   | Exhibit No. 32 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|--------|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

|   | /s/ O. R. Barham, Jr.                                |
|--------|------------------------------------------------------|
|   | O.R. Barham, Jr.                                     |
|   | President and Chief Executive Officer                |
|   | August 7, 2009                                       |
|   |                                                 |
|   |                                                 |
|   |                                                 |
|   | /s/ Jeffrey W. Farrar                                |
|   | Jeffrey W. Farrar, CPA                               |
|   | Executive Vice President and Chief Financial Officer |
|   | August 7, 2009                                       |

----