|      [X]  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934 |
|-----------------------------------------|----------------------------------------------------------------------------------------|

|      [   ]  | TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THESECURITIES EXCHANGE ACT OF 1934 |
|------------------------------------------------|-----------------------------------------------------------------------------------------|

| Delaware                        |   | 23-3016517          |
|---------------------------------|--------|---------------------|
| (State or other jurisdiction of |   | (IRS Employer       |
| incorporation or organization)  |   | Identification No.) |
|                            |   |                |
| 409 Silverside Road             |   |                |
| Wilmington, DE                  |   | 19809               |
| (Address of principal           |   | (Zip code)          |
| executive offices)              |   |                |

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|  (Check one): | Large accelerated filer [ ]                                                                    | Accelerated filer [X]         |   |
|--------------------|------------------------------------------------------------------------------------------------|-------------------------------|--------|
|               |                                                                                           |                          |   |
|               | Non-accelerated filer [ ]    (Do not check if a smaller reporting company) | Smaller reporting company [ ] |   |

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|                         |                                                                                                              | Page   |
|------------------------------|-------------------------------------------------------------------------------------------------------------------|--------|
|                         |                                                                                                              |   |   |
| Part I Financial Information |                                                                                                              |
| Item 1.                      | Financial Statements:                                                                                             | 4      |   |
|                         |                                                                                                              |   |   |
|                         | Consolidated Balance Sheets – June 30, 2011 (unaudited) and December 31, 2010                               | 4      |   |
|                         |                                                                                                              |   |   |
|                         | Unaudited Consolidated Income Statements – Three and six months ended June 30, 2011 and 2010                | 5      |   |
|                         |                                                                                                              |   |   |
|                         | Unaudited Consolidated Statements of Changes in Shareholders’ Equity – Six months ended June 30, 2011 | 6      |   |
|                         |                                                                                                              |   |   |
|                         | Unaudited Consolidated Statements of Cash Flows – Six months ended June 30, 2011 and 2010                   | 7      |   |
|                         |                                                                                                              |   |   |
|                         | Unaudited Notes to Consolidated Financial Statements                                                              | 8      |   |
|                         |                                                                                                              |   |   |
| Item 2.                      | Management’s Discussion and Analysis of Financial Condition and Results of Operations                       | 24     |   |
|                         |                                                                                                              |   |   |
| Item 3.                      | Quantitative and Qualitative Disclosures About Market Risk                                                        | 41     |   |
|                         |                                                                                                              |   |   |
| Item 4.                      | Controls and Procedures                                                                                           | 41     |   |
|                         |                                                                                                              |   |   |
| Part II Other Information    |                                                                                                              |
|                         |                                                                                                              |   |   |
| Item 6.                      | Exhibits                                                                                                          | 42     |   |
|                         |                                                                                                              |   |   |
| Signatures                   |                                                                                                              | 42     |   |

----

Item 

| THE BANCORP, INC. AND SUBSIDIARY                                                           |   |
|--------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED BALANCE SHEET                                                                 |   |
|                                                                                       |   |   |   |   |   |   |
|                                                                                       |   | June 30, |   |   | December 31, |   |
|                                                                                       |   | 2011 |   |   | 2010 |   |
|                                                                                       |   | (unaudited) |   |   |   |   |
|                                                                                       |   | (in thousands) |   |
| ASSETS                                                                                     |   |   |   |   |   |   |
| Cash and cash equivalents                                                                  |   |   |   |   |   |   |
| Cash and due from banks                                                                    |   | $ | 168,957 |   |   | $ | 157,411 |   |
| Interest bearing deposits                                                                  |   |   | 199,866 |   |   |   | 314,908 |   |
| Total cash and cash equivalents                                                            |   |   | 368,823 |   |   |   | 472,319 |   |
|                                                                                       |   |   |   |   |   |   |   |   |
| Investment securities, available-for-sale, at fair value                                   |   |   | 353,099 |   |   |   | 231,165 |   |
| Investment securities, held-to-maturity (fair value $13,498 and $16,550, respectively)     |   |   | 18,102 |   |   |   | 21,364 |   |
| Loans, net of deferred loan costs                                                          |   |   | 1,678,660 |   |   |   | 1,619,195 |   |
| Allowance for loan and lease losses                                                        |   |   | (27,685 | ) |   |   | (24,063 | ) |
| Loans, net                                                                                 |   |   | 1,650,975 |   |   |   | 1,595,132 |   |
| Premises and equipment, net                                                                |   |   | 8,296 |   |   |   | 8,767 |   |
| Accrued interest receivable                                                                |   |   | 7,839 |   |   |   | 8,878 |   |
| Intangible assets, net                                                                     |   |   | 8,504 |   |   |   | 9,005 |   |
| Other real estate owned                                                                    |   |   | 3,764 |   |   |   | 2,115 |   |
| Deferred tax asset, net                                                                    |   |   | 21,960 |   |   |   | 24,365 |   |
| Other assets                                                                               |   |   | 24,477 |   |   |   | 22,613 |   |
| Total assets                                                                               |   | $ | 2,465,839 |   |   | $ | 2,395,723 |   |
|                                                                                       |   |   |   |   |   |   |   |   |
| LIABILITIES                                                                                |   |   |   |   |   |   |   |   |
| Deposits                                                                                   |   |   |   |   |   |   |   |   |
| Demand (non-interest bearing)                                                              |   | $ | 1,073,228 |   |   | $ | 945,605 |   |
| Savings, money market and interest checking                                                |   |   | 1,076,654 |   |   |   | 975,973 |   |
| Time deposits                                                                              |   |   | 1,394 |   |   |   | 90,862 |   |
| Time deposits, $100,000 and over                                                           |   |   | 11,427 |   |   |   | 11,657 |   |
| Total deposits                                                                             |   |   | 2,162,703 |   |   |   | 2,024,097 |   |
|                                                                                       |   |   |   |   |   |   |   |   |
| Securities sold under agreements to repurchase                                             |   |   | 20,258 |   |   |   | 14,383 |   |
| Short-term borrowings                                                                      |   |   | - |   |   |   | 87,000 |   |
| Federal funds purchased                                                                    |   |   | - |   |   |   | 49,000 |   |
| Accrued interest payable                                                                   |   |   | 131 |   |   |   | 124 |   |
| Subordinated debenture                                                                     |   |   | 13,401 |   |   |   | 13,401 |   |
| Other liabilities                                                                          |   |   | 7,109 |   |   |   | 8,812 |   |
| Total liabilities                                                                          |   |   | 2,203,602 |   |   |   | 2,196,817 |   |
|                                                                                       |   |   |   |   |   |   |   |   |
| SHAREHOLDERS' EQUITY                                                                       |   |   |   |   |   |   |   |   |
| Common stock - authorized, 50,000,000 shares of $1.00 par value; 33,196,281 and 26,181,281 |   |   |   |   |   |   |   |   |
| shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively         |   |   | 33,196 |   |   |   | 26,181 |   |
| Additional paid-in capital                                                                 |   |   | 241,011 |   |   |   | 192,711 |   |
| Accumulated deficit                                                                        |   |   | (14,847 | ) |   |   | (18,195 | ) |
| Accumulated other comprehensive income (loss)                                              |   |   | 2,877 |   |   |   | (1,791 | ) |
| Total shareholders' equity                                                                 |   |   | 262,237 |   |   |   | 198,906 |   |
|                                                                                       |   |   |   |   |   |   |   |   |
| Total liabilities and shareholders' equity                                                 |   | $ | 2,465,839 |   |   | $ | 2,395,723 |   |
|                                                                                       |   |   |   |   |   |   |   |   |
|  The accompanying notes are an integral part of these statements.                     |   |   |   |   |   |   |   |   |

----

| THE BANCORP, INC. AND SUBSIDIARYUNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS                                       |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                       |   | For the three months ended June 30, |   |   | For the six months ended June 30, |   |
|                                                                                                                       |   | 2011 |   |   | 2010 |   |   | 2011 |   |   | 2010 |   |
|                                                                                                                       |   | (in thousands, except per share data) |   |
| Interest income                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans, including fees                                                                                                      |   | $ | 18,144 |   |   | $ | 18,373 |   |   | $ | 36,437 |   |   | $ | 36,289 |   |
| Interest on investment securities:                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable interest                                                                                                           |   |   | 2,340 |   |   |   | 1,702 |   |   |   | 3,897 |   |   |   | 3,010 |   |
| Tax-exempt interest                                                                                                        |   |   | 670 |   |   |   | 347 |   |   |   | 1,342 |   |   |   | 737 |   |
| Interest bearing deposits                                                                                                  |   |   | 230 |   |   |   | 83 |   |   |   | 745 |   |   |   | 434 |   |
|                                                                                                                       |   |   | 21,384 |   |   |   | 20,505 |   |   |   | 42,421 |   |   |   | 40,470 |   |
| Interest expense                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                                                                   |   |   | 2,885 |   |   |   | 3,534 |   |   |   | 5,490 |   |   |   | 6,992 |   |
| Securities sold under agreements to repurchase                                                                             |   |   | 26 |   |   |   | 7 |   |   |   | 42 |   |   |   | 14 |   |
| Short-term borrowings                                                                                                      |   |   | - |   |   |   | 59 |   |   |   | 3 |   |   |   | 64 |   |
| Subordinated debt                                                                                                          |   |   | 216 |   |   |   | 216 |   |   |   | 431 |   |   |   | 431 |   |
|                                                                                                                       |   |   | 3,127 |   |   |   | 3,816 |   |   |   | 5,966 |   |   |   | 7,501 |   |
| Net interest income                                                                                                        |   |   | 18,257 |   |   |   | 16,689 |   |   |   | 36,455 |   |   |   | 32,969 |   |
| Provision for loan and lease losses                                                                                        |   |   | 6,963 |   |   |   | 5,806 |   |   |   | 11,635 |   |   |   | 9,954 |   |
| Net interest income after provision for loan and lease losses                                                              |   |   | 11,294 |   |   |   | 10,883 |   |   |   | 24,820 |   |   |   | 23,015 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest income                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service fees on deposit accounts                                                                                           |   |   | 675 |   |   |   | 527 |   |   |   | 1,310 |   |   |   | 908 |   |
| Merchant credit card deposit and ACH fees                                                                                  |   |   | 590 |   |   |   | 577 |   |   |   | 1,159 |   |   |   | 1,063 |   |
| Stored value income                                                                                                        |   |   | 4,390 |   |   |   | 2,512 |   |   |   | 9,145 |   |   |   | 5,327 |   |
| Gain on sales of investment securities                                                                                     |   |   | 603 |   |   |   | 469 |   |   |   | 603 |   |   |   | 1,219 |   |
| Other than temporary impairment on securities held-to-maturity  (1)                                              |   |   | - |   |   |   | - |   |   |   | (75 | ) |   |   | - |   |
| Leasing income                                                                                                             |   |   | 645 |   |   |   | 511 |   |   |   | 1,349 |   |   |   | 1,175 |   |
| Debit card income                                                                                                          |   |   | 191 |   |   |   | 172 |   |   |   | 563 |   |   |   | 342 |   |
| Other                                                                                                                      |   |   | 693 |   |   |   | 191 |   |   |   | 1,416 |   |   |   | 419 |   |
| Total non-interest income                                                                                                  |   |   | 7,787 |   |   |   | 4,959 |   |   |   | 15,470 |   |   |   | 10,453 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest expense                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and employee benefits                                                                                             |   |   | 7,550 |   |   |   | 6,468 |   |   |   | 14,530 |   |   |   | 12,840 |   |
| Depreciation and amortization                                                                                              |   |   | 723 |   |   |   | 741 |   |   |   | 1,452 |   |   |   | 1,463 |   |
| Rent and related occupancy cost                                                                                            |   |   | 734 |   |   |   | 654 |   |   |   | 1,433 |   |   |   | 1,277 |   |
| Data processing expense                                                                                                    |   |   | 2,173 |   |   |   | 1,695 |   |   |   | 4,566 |   |   |   | 3,308 |   |
| Printing and supplies                                                                                                      |   |   | 398 |   |   |   | 337 |   |   |   | 680 |   |   |   | 751 |   |
| Audit expense                                                                                                              |   |   | 250 |   |   |   | 311 |   |   |   | 510 |   |   |   | 602 |   |
| Legal expense                                                                                                              |   |   | 696 |   |   |   | 701 |   |   |   | 1,196 |   |   |   | 1,055 |   |
| Amortization of intangible assets                                                                                          |   |   | 250 |   |   |   | 250 |   |   |   | 500 |   |   |   | 500 |   |
| Loss on sale of other real estate owned                                                                                    |   |   | 439 |   |   |   | - |   |   |   | 491 |   |   |   | 20 |   |
| FDIC Insurance                                                                                                             |   |   | 711 |   |   |   | 1,098 |   |   |   | 1,923 |   |   |   | 1,854 |   |
| Software, maintenance and equipment                                                                                        |   |   | 381 |   |   |   | 328 |   |   |   | 747 |   |   |   | 586 |   |
| Other                                                                                                                      |   |   | 3,827 |   |   |   | 2,655 |   |   |   | 7,194 |   |   |   | 5,189 |   |
| Total non-interest expense                                                                                                 |   |   | 18,132 |   |   |   | 15,238 |   |   |   | 35,222 |   |   |   | 29,445 |   |
| Net income before income tax                                                                                               |   |   | 949 |   |   |   | 604 |   |   |   | 5,068 |   |   |   | 4,023 |   |
| Income tax provision                                                                                                       |   |   | 289 |   |   |   | 197 |   |   |   | 1,720 |   |   |   | 1,430 |   |
| Net income                                                                                                                 |   |   | 660 |   |   |   | 407 |   |   |   | 3,348 |   |   |   | 2,593 |   |
| Less preferred stock dividends and accretion                                                                               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (6,242 | ) |
| Net income (loss) available to common shareholders                                                                         |   | $ | 660 |   |   | $ | 407 |   |   | $ | 3,348 |   |   | $ | (3,649 | ) |
| Net income (loss) per share - basic                                                                                        |   | $ | 0.02 |   |   | $ | 0.02 |   |   | $ | 0.11 |   |   | $ | (0.14 | ) |
| Net income (loss) per share - diluted                                                                                      |   | $ | 0.02 |   |   | $ | 0.02 |   |   | $ | 0.11 |   |   | $ | (0.14 | ) |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) Other than temporary impairment was due to credit loss and therefore did not include amounts due to market conditions. |   |   |   |   |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  The accompanying notes are an integral part of these statements.                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| THE BANCORP INC. AND SUBSIDIARY                                     |
|---------------------------------------------------------------------|
| UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY |
| For the six months ended June 30, 2011                              |
| (in thousands, except share data)                                   |

|                                 |   |   |       |   |   |   |   |       |   |   |        |   |   | Accumulated   |    |   |          |   |   |   |   |
|--------------------------------------|--------|--------|------------|--------|--------|--------|--------|------------|--------|--------|-------------|--------|--------|---------------|---------|--------|---------------|--------|--------|--------|--------|
|                                 |   | Common |       |   |   |   |   | Additional |   |   |        |   |   | other         |    |   |          |   |   |   |   |
|                                 |   | stock  |       |   | Common |   |   | paid-in    |   |   | Accumulated |   |   | comprehensive |    |   | Comprehensive |   |   |   |   |
|                                 |   | shares |       |   | stock  |   |   | capital    |   |   | deficit     |   |   | gain/(loss)   |    |   | income        |   |   | Total  |   |
|                                 |   |   |       |   |   |   |
| Balance at January 1, 2011           |   |   | 26,181,281 |   |   | $      | 26,181 |       |   | $      | 192,711     |   |   | $             | (18,195 | )      |          | $      | (1,791 | )      |   |   |   |   | $ | 198,906 |   |
| Net income                           |   |   |       |   |   |   |   |       |   |   |        |   |   |          | 3,348   |   |          |   |   |   |   | $ | 3,348 |   |   |   | 3,348 |   |
| Issuance of common stock             |   |   | 7,015,000  |   |   |   | 7,015  |       |   |   | 47,486      |   |   |          | -       |   |          |   | -      |   |   |   | - |   |   |   | 54,501 |   |
| Stock-based compensation             |   |   | -          |   |   |   | -      |       |   |   | 814         |   |   |          | -       |   |          |   | -      |   |   |   | - |   |   |   | 814 |   |
| Other comprehensive income, net of   |   |   |       |   |   |   |   |       |   |   |        |   |   |          |    |   |          |   |   |   |   |   |   |   |   |   |   |   |
| reclassification adjustments and tax |   |   | -          |   |   |   | -      |       |   |   | -           |   |   |          | -       |   |          |   | 4,668  |   |   |   | 4,668 |   |   |   | 4,668 |   |
|                                 |   |   |       |   |   |   |   |       |   |   |        |   |   |          |    |   |          |   |   |   |   | $ | 8,016 |   |   |   |   |   |
| Balance at June 30, 2011             |   |   | 33,196,281 |   |   | $      | 33,196 |       |   | $      | 241,011     |   |   | $             | (14,847 | )      |          | $      | 2,877  |   |   |   |   |   |   | $ | 262,237 |   |
|                                 |   |   |       |   |   |   |   |       |   |   |        |   |   |          |    |   |          |   |   |   |   |   |   |   |   |   |   |   |
|                                 |   |   |       |   |   |   |   |       |   |   |        |   |   |          |    |   |          |   |   |   |   |   |   |   |   |   |   |   |

----

| THE BANCORP, INC. AND SUBSIDIARY                                         |   |
|--------------------------------------------------------------------------|--------|
| UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS                          |   |
| (dollars in thousands)                                                   |   |
|                                                                     |   |   |   |
|                                                                     |   | For the six months ended |   |
|                                                                     |   | June 30, |   |
|                                                                     |   | 2011 |   |   | 2010 |   |
| Operating activities                                                     |   |   |   |   |   |   |
| Net income                                                               |   | $ | 3,348 |   |   | $ | 2,593 |   |
| Adjustments to reconcile net income to net cash                          |   |   |   |   |   |   |   |   |
|   provided by (used in) operating activities                   |   |   |   |   |   |   |   |   |
| Depreciation and amortization                                            |   |   | 1,952 |   |   |   | 1,963 |   |
| Provision for loan and lease losses                                      |   |   | 11,635 |   |   |   | 9,954 |   |
| Net amortization of investment securities discounts/premiums             |   |   | 223 |   |   |   | 46 |   |
| Stock-based compensation expense                                         |   |   | 814 |   |   |   | 152 |   |
| Mortgage loans originated for sale                                       |   |   | (458 | ) |   |   | (704 | ) |
| Sale of mortgage loans originated for resale                             |   |   | 462 |   |   |   | 709 |   |
| Gain on sale of mortgage loans originated for resale                     |   |   | (4 | ) |   |   | (5 | ) |
| Deferred income tax benefit                                              |   |   | - |   |   |   | (3 | ) |
| (Gain) loss on sales of fixed assets                                     |   |   | (8 | ) |   |   | 27 |   |
| Other than temporary impairment on securities held-to-maturity           |   |   | 75 |   |   |   | - |   |
| Loss on sales of other real estate owned                                 |   |   | 491 |   |   |   | 20 |   |
| Gain on sales of investment securities                                   |   |   | (603 | ) |   |   | (1,219 | ) |
| Decrease (increase) in accrued interest receivable                       |   |   | 1,039 |   |   |   | (761 | ) |
| Increase (decrease) in interest payable                                  |   |   | 7 |   |   |   | (197 | ) |
| Increase in other assets                                                 |   |   | (2,110 | ) |   |   | (7,268 | ) |
| Decrease in other liabilities                                            |   |   | (1,703 | ) |   |   | (10,104 | ) |
|   Net cash provided by (used in) operating activities          |   |   | 15,160 |   |   |   | (4,797 | ) |
|                                                                     |   |   |   |   |   |   |   |   |
| Investing activities                                                     |   |   |   |   |   |   |   |   |
| Purchase of  investment securities available-for-sale          |   |   | (194,522 | ) |   |   | (170,278 | ) |
| Proceeds from call of securities held-to-maturity                        |   |   | 4,000 |   |   |   | - |   |
| Proceeds from sale of investment securities available-for-sale           |   |   | 23,581 |   |   |   | 30,144 |   |
| Proceeds from redemptions and repayment of securities available-for-sale |   |   | 55,647 |   |   |   | 28,925 |   |
| Proceeds from sale of other real estate owned                            |   |   | 769 |   |   |   | 189 |   |
| Net increase in loans                                                    |   |   | (70,387 | ) |   |   | (59,753 | ) |
| Proceeds from sale of fixed assets                                       |   |   | 45 |   |   |   | - |   |
| Purchases of premises and equipment                                      |   |   | (771 | ) |   |   | (1,624 | ) |
|   Net cash used in investing activities                        |   |   | (181,638 | ) |   |   | (172,397 | ) |
|                                                                     |   |   |   |   |   |   |   |   |
| Financing activities                                                     |   |   |   |   |   |   |   |   |
| Net increase in deposits                                                 |   |   | 138,606 |   |   |   | 227,098 |   |
| Net increase in securities sold under agreements to repurchase           |   |   | 5,875 |   |   |   | 4,964 |   |
| Repayment of short-term borrowings and federal funds purchased           |   |   | (136,000 | ) |   |   | (100,000 | ) |
| Proceeds from issuance of common stock                                   |   |   | 54,501 |   |   |   | - |   |
| Redemption of preferred stock                                            |   |   | - |   |   |   | (45,220 | ) |
| Dividends paid on Series B preferred stock                               |   |   | - |   |   |   | (433 | ) |
|   Net cash provided by financing activities                    |   |   | 62,982 |   |   |   | 86,409 |   |
|                                                                     |   |   |   |   |   |   |   |   |
|   Net decrease in cash and cash equivalents                    |   |   | (103,496 | ) |   |   | (90,785 | ) |
|                                                                     |   |   |   |   |   |   |   |   |
| Cash and cash equivalents, beginning of period                           |   |   | 472,319 |   |   |   | 354,459 |   |
|                                                                     |   |   |   |   |   |   |   |   |
| Cash and cash equivalents, end of period                                 |   | $ | 368,823 |   |   | $ | 263,674 |   |
|                                                                     |   |   |   |   |   |   |   |   |
| Supplemental disclosure:                                                 |   |   |   |   |   |   |   |   |
| Interest paid                                                            |   | $ | 5,959 |   |   | $ | 7,698 |   |
| Taxes paid                                                               |   | $ | 4,571 |   |   | $ | 31 |   |
| Transfers of loans to other real estate owned                            |   | $ | 2,909 |   |   | $ | 189 |   |

----

THE 

----

|                    |   | June 30, |   |
|-------------------------|--------|----------|--------|
|                    |   | 2011     |   |   | 2010 |   |
| Risk-free interest rate |   |     | 2.96   | % |   |   | 3.45 | % |
| Expected dividend yield |   |     | -      |   |   |   | - |   |
| Expected volatility     |   |     | 55.07  | % |   |   | 55.40 | % |
| Expected lives (years)  |   |     | 5.40   |   |   |   | 5.94 |   |

|                           |   | For the six months ended June 30, 2011 |      |
|--------------------------------|--------|----------------------------------------|-----------|
|                           |   |                                   |      |
| Stock options:                 |   | Shares                                 |      |   | Weightedaverageexerciseprice |   |   | Weighted-averageremainingcontractualterm(years) |   |   | Aggregateintrinsicvalue |   |
|                           |   | (in thousands, except per share data)  |      |
|                           |   |                                   |      |   |   |   |   |   |   |   |   |   |
| Outstanding at January 1, 2011 |   |                                   | 2,244,864 |   |   | $ | 10.71 |   |   |   |   |   |   |   |
| Granted                        |   |                                   | 10,000    |   |   |   | 9.58 |   |   |   | - |   |   |   | - |   |
| Exercised                      |   |                                   | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Forfeited                      |   |                                   | (8,749    | ) |   |   | 9.12 |   |   |   | - |   |   |   | - |   |
| Outstanding at June 30, 2011   |   |                                   | 2,246,115 |   |   | $ | 10.71 |   |   |   | 6.19 |   |   | $ | - |   |
| Exercisable at June 30, 2011   |   |                                   | 1,295,365 |   |   |   |   |   |   |   | 3.98 |   |   | $ | - |   |

|   Stock appreciation rights:                        |   | Shares |   |   | Weighted-averageprice |   |   | Averageremainingcontractualterm(years) |   |
|---------------------------------------------------------------|--------|--------|--------|--------|-----------------------|--------|--------|----------------------------------------|--------|
|                                                          |   |   |   |   |                  |   |   |                                   |   |
| Outstanding at beginning of the year |   |   | 60,000 |   |                  | $      | 11.41  |                                   |   |   |   |
| Granted                                                       |   |   | -      |   |                  |   | -      |                                   |   |   | - |   |
| Exercised                                                     |   |   | -      |   |                  |   | -      |                                   |   |   | - |   |
| Expired/forfeited                                             |   |   | -      |   |                  |   | -      |                                   |   |   | - |   |
| Outstanding at end of period              |   |   | 60,000 |   |                  | $      | 11.41  |                                   |   |   | 6.71 |   |
|                                                          |   |   |   |   |                  |   |   |                                   |   |   |   |   |

----

|                                        |   | For the three months ended                   |   |
|---------------------------------------------|--------|----------------------------------------------|--------|
|                                        |   | June 30, 2011                                |   |
|                                        |   | Income                                       |   |   | Shares |   |   | Per share |   |
|                                        |   | (numerator)                                  |   |   | (denominator) |   |   | amount |   |
|                                        |   | (dollars in thousands except per share data) |   |
| Basic earnings per share                    |   |                                         |   |   |   |   |   |   |   |
| Net income available to common shareholders |   | $                                            | 660    |   |   |   | 33,196,281 |   |   | $ | 0.02 |   |
| Effect of dilutive securities               |   |                                         |   |   |   |   |   |   |   |   |   |   |
| Stock options                               |   |                                         | -      |   |   |   | 9,460 |   |   |   | - |   |
| Diluted earnings per share                  |   |                                         |   |   |   |   |   |   |   |   |   |   |
| Net income available to common shareholders |   | $                                            | 660    |   |   |   | 33,205,741 |   |   | $ | 0.02 |   |

|                                        |   | For the six months ended                     |   |
|---------------------------------------------|--------|----------------------------------------------|--------|
|                                        |   | June 30, 2011                                |   |
|                                        |   | Income                                       |   |   | Shares |   |   | Per share |   |
|                                        |   | (numerator)                                  |   |   | (denominator) |   |   | amount |   |
|                                        |   | (dollars in thousands except per share data) |   |
| Basic earnings per share                    |   |                                         |   |   |   |   |   |   |   |
| Net income available to common shareholders |   | $                                            | 3,348  |   |   |   | 30,638,325 |   |   | $ | 0.11 |   |
| Effect of dilutive securities               |   |                                         |   |   |   |   |   |   |   |   |   |   |
| Stock options                               |   |                                         | -      |   |   |   | 7,353 |   |   |   | - |   |
| Diluted earnings per share                  |   |                                         |   |   |   |   |   |   |   |   |   |   |
| Net income available to common shareholders |   | $                                            | 3,348  |   |   |   | 30,645,678 |   |   | $ | 0.11 |   |

----

|                                        |   | For the three months ended                   |   |
|---------------------------------------------|--------|----------------------------------------------|--------|
|                                        |   | June 30, 2010                                |   |
|                                        |   | Income                                       |   |   | Shares |   |   | Per share |   |
|                                        |   | (numerator)                                  |   |   | (denominator) |   |   | amount |   |
|                                        |   | (dollars in thousands except per share data) |   |
| Basic earnings per share                    |   |                                         |   |   |   |   |   |   |   |
| Net income available to common shareholders |   | $                                            | 407    |   |   |   | 26,181,281 |   |   | $ | 0.02 |   |
| Effect of dilutive securities               |   |                                         |   |   |   |   |   |   |   |   |   |   |
| Common stock warrants                       |   |                                         | -      |   |   |   | 578,170 |   |   |   | - |   |
| Diluted earnings per share                  |   |                                         |   |   |   |   |   |   |   |   |   |   |
| Net income available to common shareholders |   | $                                            | 407    |   |   |   | 26,759,451 |   |   | $ | 0.02 |   |

|                                      |   | For the six months ended                     |   |
|-------------------------------------------|--------|----------------------------------------------|--------|
|                                      |   | June 30, 2010                                |   |
|                                      |   | Income                                       |   |   | Shares |   |   | Per share |   |
|                                      |   | (numerator)                                  |   |   | (denominator) |   |   | amount |   |
|                                      |   | (dollars in thousands except per share data) |   |
| Basic loss per share                      |   |                                         |   |   |   |   |   |   |   |
| Net loss available to common shareholders |   | $                                            | (3,649 | ) |   |   | 26,181,281 |   |   | $ | (0.14 | ) |
| Effect of dilutive securities             |   |                                         |   |   |   |   |   |   |   |   |   |   |
| Stock options and warrants                |   |                                         | -      |   |   |   | - |   |   |   | - |   |
| Diluted loss per share                    |   |                                         |   |   |   |   |   |   |   |   |   |   |
| Net loss available to common shareholders |   | $                                            | (3,649 | ) |   |   | 26,181,281 |   |   | $ | (0.14 | ) |

| Available-for-sale                                          |   | June 30, 2011 |    |
|-------------------------------------------------------------|--------|---------------|---------|
|                                                        |   |          |    |   | Gross |   |   | Gross |   |   |   |   |
|                                                        |   | Amortized     |    |   | unrealized |   |   | unrealized |   |   | Fair |   |
|                                                        |   | cost          |    |   | gains |   |   | losses |   |   | value |   |
| U.S. Government agency securities                           |   | $             | 9,396   |   |   | $ | 70 |   |   | $ | - |   |   | $ | 9,466 |   |
| Tax-exempt obligations of states and political subdivisions |   |          | 72,484  |   |   |   | 1,092 |   |   |   | (746 | ) |   |   | 72,830 |   |
| Taxable obligations of states and political subdivisions    |   |          | 28,858  |   |   |   | 720 |   |   |   | (76 | ) |   |   | 29,502 |   |
| Mortgage-backed securities                                  |   |          | 200,599 |   |   |   | 3,064 |   |   |   | (114 | ) |   |   | 203,549 |   |
| Other debt securities                                       |   |          | 27,872  |   |   |   | 1,484 |   |   |   | (238 | ) |   |   | 29,118 |   |
| Other equity securities                                     |   |          | 3,000   |   |   |   | - |   |   |   | - |   |   |   | 3,000 |   |
| Federal Home Loan and Atlantic Central                      |   |          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Bankers Bank stock                              |   |          | 5,634   |   |   |   | - |   |   |   | - |   |   |   | 5,634 |   |
|                                                        |   | $             | 347,843 |   |   | $ | 6,430 |   |   | $ | (1,174 | ) |   | $ | 353,099 |   |
|                                                        |   |          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                        |   |          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                        |   |          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held-to-maturity                                            |   | June 30, 2011 |    |
|                                                        |   |          |    |   |   | Gross |   |   | Gross |   |   |   |   |   |
|                                                        |   | Amortized     |    |   | unrealized |   |   | unrealized |   |   | Fair |   |
|                                                        |   | cost          |    |   | gains |   |   | losses |   |   | value |   |
| Other debt securities - single issuers                      |   | $             | 16,340  |   |   | $ | 134 |   |   | $ | (4,419 | ) |   | $ | 12,055 |   |
| Other debt securities - pooled                              |   |          | 1,762   |   |   |   | - |   |   |   | (319 | ) |   |   | 1,443 |   |
|                                                        |   | $             | 18,102  |   |   | $ | 134 |   |   | $ | (4,738 | ) |   | $ | 13,498 |   |

----

| Available-for-sale                                          |   | December 31, 2010 |    |
|-------------------------------------------------------------|--------|-------------------|---------|
|                                                        |   |              |    |   | Gross |   |   | Gross |   |   |   |   |
|                                                        |   | Amortized         |    |   | unrealized |   |   | unrealized |   |   | Fair |   |
|                                                        |   | cost              |    |   | gains |   |   | losses |   |   | value |   |
| Tax-exempt obligations of states and political subdivisions |   | $                 | 78,046  |   |   | $ | 335 |   |   | $ | (3,070 | ) |   | $ | 75,311 |   |
| Taxable obligations of states and political subdivisions    |   |              | 28,870  |   |   |   | 261 |   |   |   | (454 | ) |   |   | 28,677 |   |
| Mortgage-backed securities                                  |   |              | 76,275  |   |   |   | 704 |   |   |   | (64 | ) |   |   | 76,915 |   |
| Other debt securities                                       |   |              | 42,700  |   |   |   | 1,510 |   |   |   | (186 | ) |   |   | 44,024 |   |
| Federal Home Loan and Atlantic Central                      |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Bankers Bank stock                              |   |              | 6,238   |   |   |   | - |   |   |   | - |   |   |   | 6,238 |   |
|                                                        |   | $                 | 232,129 |   |   | $ | 2,810 |   |   | $ | (3,774 | ) |   | $ | 231,165 |   |
|                                                        |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                        |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held-to-maturity                                            |   | December 31, 2010 |    |
|                                                        |   |              |    |   |   | Gross |   |   | Gross |   |   |   |   |   |
|                                                        |   | Amortized         |    |   | unrealized |   |   | unrealized |   |   | Fair |   |
|                                                        |   | cost              |    |   | gains |   |   | losses |   |   | value |   |
| Other debt securities - single issuers                      |   | $                 | 19,526  |   |   | $ | 128 |   |   | $ | (4,632 | ) |   | $ | 15,022 |   |
| Other debt securities - pooled                              |   |              | 1,838   |   |   |   | - |   |   |   | (310 | ) |   |   | 1,528 |   |
|                                                        |   | $                 | 21,364  |   |   | $ | 128 |   |   | $ | (4,942 | ) |   | $ | 16,550 |   |

|                                   |   | Available-for-sale |    |   | Held-to-maturity |   |
|----------------------------------------|--------|--------------------|---------|--------|------------------|--------|
|                                   |   | Amortized          |    |   | Fair             |   |   | Amortized |   |   | Fair |   |
|                                   |   | cost               |    |   | value            |   |   | cost |   |   | value |   |
| Due before one year                    |   | $                  | 19,134  |   |             | $      | 19,135 |   |   | $ | - |   |   | $ | - |   |
| Due after one year through five years  |   |               | 42,251  |   |             |   | 44,062 |   |   |   | - |   |   |   | - |   |
| Due after five years through ten years |   |               | 15,036  |   |             |   | 15,194 |   |   |   | 3,282 |   |   |   | 2,839 |   |
| Due after ten years                    |   |               | 265,788 |   |             |   | 269,074 |   |   |   | 14,820 |   |   |   | 10,659 |   |
| Federal Home Loan and Atlantic         |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
|   Central Bankers Bank stock |   |               | 5,634   |   |             |   | 5,634 |   |   |   | - |   |   |   | - |   |
|                                   |   | $                  | 347,843 |   |             | $      | 353,099 |   |   | $ | 18,102 |   |   | $ | 13,498 |   |

----

| June 30, 2011                                        |   |                 |   |   |                |   |   |                |   |   |       |   |   |              |   |   |       |   |   |              |   |
|------------------------------------------------------|--------|----------------------|--------|--------|---------------------|--------|--------|---------------------|--------|--------|------------|--------|--------|-------------------|--------|--------|------------|--------|--------|-------------------|--------|
| Available-for-sale                                   |   |                 |   |   | Less than 12 months |   |   | 12 months or longer |   |   | Total      |   |
|                                                 |   | Number of securities |   |   | Fair Value          |   |   | Unrealized losses   |   |   | Fair Value |   |   | Unrealized losses |   |   | Fair Value |   |   | Unrealized losses |   |
| Description of Securities                            |   |                 |   |   |                |   |   |                |   |   |       |   |   |              |   |   |       |   |   |              |   |
| Tax-exempt obligations of states and                 |   |                 |   |   |                |   |   |                |   |   |       |   |   |              |   |   |       |   |   |              |   |
|      political subdivisions |   |                 | 26     |   |                | $      | 20,818 |                |   | $      | (732       | )      |   | $                 | 1,207  |   |       | $      | (9     | )                 |   | $ | 22,025 |   |   | $ | (741 | ) |
| Taxable obligations of states and                    |   |                 |   |   |                |   |   |                |   |   |       |   |   |              |   |   |       |   |   |              |   |   |   |   |   |   |   |   |
|      political subdivisions |   |                 | 7      |   |                |   | 5,304  |                |   |   | (74        | )      |   |              | 428    |   |       |   | (1     | )                 |   |   | 5,732 |   |   |   | (75 | ) |
| Mortgage-backed securities                           |   |                 | 8      |   |                |   | 14,923 |                |   |   | (120       | )      |   |              | -      |   |       |   | -      |              |   |   | 14,923 |   |   |   | (120 | ) |
| Other debt securities                                |   |                 | 2      |   |                |   | 1,996  |                |   |   | (4         | )      |   |              | 642    |   |       |   | (234   | )                 |   |   | 2,638 |   |   |   | (238 | ) |
| Total temporarily impaired                           |   |                 |   |   |                |   |   |                |   |   |       |   |   |              |   |   |       |   |   |              |   |   |   |   |   |   |   |   |
|      investment securities  |   |                 | 43     |   |                | $      | 43,041 |                |   | $      | (930       | )      |   | $                 | 2,277  |   |       | $      | (244   | )                 |   | $ | 45,318 |   |   | $ | (1,174 | ) |
|                                                 |   |                 |   |   |                |   |   |                |   |   |       |   |   |              |   |   |       |   |   |              |   |   |   |   |   |   |   |   |
|                                                 |   |                 |   |   |                |   |   |                |   |   |       |   |   |              |   |   |       |   |   |              |   |   |   |   |   |   |   |   |

| June 30, 2011                                       |   |                 |   |   |                |   |   |                |   |   |       |   |
|-----------------------------------------------------|--------|----------------------|--------|--------|---------------------|--------|--------|---------------------|--------|--------|------------|--------|
| Held-to-maturity                                    |   |                 |   |   | Less than 12 months |   |   | 12 months or longer |   |   | Total      |   |
|                                                |   | Number of securities |   |   | Fair Value          |   |   | Unrealized losses   |   |   | Fair Value |   |   | Unrealized losses |   |   | Fair Value |   |   | Unrealized losses |   |
| Description of Securities                           |   |                 |   |   |                |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Other debt securities - single issuers              |   |                 | 2      |   |                | $      | -      |                |   | $      | -          |   |   | $ | 7,645 |   |   | $ | (4,419 | ) |   | $ | 7,645 |   |   | $ | (4,419 | ) |
| Other debt securities - pooled                      |   |                 | 2      |   |                |   | -      |                |   |   | -          |   |   |   | 1,443 |   |   |   | (319 | ) |   |   | 1,443 |   |   |   | (319 | ) |
| Total temporarily impaired                          |   |                 |   |   |                |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      investment securities |   |                 | 4      |   |                | $      | -      |                |   | $      | -          |   |   | $ | 9,088 |   |   | $ | (4,738 | ) |   | $ | 9,088 |   |   | $ | (4,738 | ) |

| December 31, 2010                                    |   |                 |   |   |                |   |    |                |   |   |       |   |
|------------------------------------------------------|--------|----------------------|--------|--------|---------------------|--------|---------|---------------------|--------|--------|------------|--------|
| Available-for-sale                                   |   |                 |   |   | Less than 12 months |   |    | 12 months or longer |   |   | Total      |   |
|                                                 |   | Number of securities |   |   | Fair Value          |   |    | Unrealized losses   |   |   | Fair Value |   |   | Unrealized losses |   |   | Fair Value |   |   | Unrealized losses |   |
| Description of Securities                            |   |                 |   |   |                |   |    |                |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Tax-exempt obligations of states and                 |   |                 |   |   |                |   |    |                |   |   |       |   |   |   |   |   |   |   |   |   |   |
|      political subdivisions |   |                 | 65     |   |                | $      | 54,685  |                |   | $      | (3,070     | )      |   | $ | - |   |   | $ | - |   |   | $ | 54,685 |   |   | $ | (3,070 | ) |
| Taxable obligations of states and                    |   |                 |   |   |                |   |    |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      political subdivisions |   |                 | 15     |   |                |   | 14,060  |                |   |   | (454       | )      |   |   | - |   |   |   | - |   |   |   | 14,060 |   |   |   | (454 | ) |
| Mortgage-backed securities                           |   |                 | 8      |   |                |   | 26,021  |                |   |   | (64        | )      |   |   | - |   |   |   |   |   |   |   | 26,021 |   |   |   | (64 | ) |
| Other securities                                     |   |                 | 11     |   |                |   | 16,771  |                |   |   | (24        | )      |   |   | 748 |   |   |   | (162 | ) |   |   | 17,519 |   |   |   | (186 | ) |
| Total temporarily impaired                           |   |                 |   |   |                |   |    |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      investment securities  |   |                 | 99     |   |                | $      | 111,537 |                |   | $      | (3,612     | )      |   | $ | 748 |   |   | $ | (162 | ) |   | $ | 112,285 |   |   | $ | (3,774 | ) |

| December 31, 2010Held-to-maturity                   |   |                 |   |   | Less than 12 months |   |   | 12 months or longer |   |   | Total      |   |
|-----------------------------------------------------|--------|----------------------|--------|--------|---------------------|--------|--------|---------------------|--------|--------|------------|--------|
|                                                |   | Number of securities |   |   | Fair Value          |   |   | Unrealized losses   |   |   | Fair Value |   |   | Unrealized losses |   |   | Fair Value |   |   | Unrealized losses |   |
| Description of Securities                           |   |                 |   |   |                |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Other debt securities - single issuers              |   |                 | 3      |   |                | $      | -      |                |   | $      | -          |   |   | $ | 10,606 |   |   | $ | (4,632 | ) |   | $ | 10,606 |   |   | $ | (4,632 | ) |
| Other debt securities - pooled                      |   |                 | 2      |   |                |   | -      |                |   |   | -          |   |   |   | 1,528 |   |   |   | (310 | ) |   |   | 1,528 |   |   |   | (310 | ) |
| Total temporarily impaired                          |   |                 |   |   |                |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      investment securities |   |                 | 5      |   |                | $      | -      |                |   | $      | -          |   |   | $ | 12,134 |   |   | $ | (4,942 | ) |   | $ | 12,134 |   |   | $ | (4,942 | ) |

----

|                                                 |   | June 30, |      |   | December 31, |   |
|------------------------------------------------------|--------|----------|-----------|--------|--------------|--------|
|                                                 |   | 2011     |      |   | 2010         |   |
|                                                 |   |     |      |   |         |   |
| Commercial                                           |   | $        | 450,916   |   |         | $      | 441,799 |   |
| Commercial mortgage (1)                              |   |     | 593,842   |   |         |   | 580,780 |   |
| Construction                                         |   |     | 205,730   |   |         |   | 203,120 |   |
| Total commercial loans                               |   |     | 1,250,488 |   |         |   | 1,225,699 |   |
| Direct financing leases, net                         |   |     | 127,016   |   |         |   | 103,289 |   |
| Residential mortgage                                 |   |     | 98,113    |   |         |   | 93,004 |   |
| Consumer loans and others                            |   |     | 200,132   |   |         |   | 194,320 |   |
|                                                 |   |     | 1,675,749 |   |         |   | 1,616,312 |   |
| Deferred loan costs                                  |   |     | 2,911     |   |         |   | 2,883 |   |
| Total loans, net of deferred loan costs              |   | $        | 1,678,660 |   |         | $      | 1,619,195 |   |
|                                                 |   |     |      |   |         |   |   |   |
| Supplemental loan data:                              |   |     |      |   |         |   |   |   |
| Construction 1-4 family                              |   | $        | 93,422    |   |         | $      | 100,689 |   |
| Construction commercial, acquisition and development |   |     | 112,308   |   |         |   | 102,431 |   |
|                                                 |   | $        | 205,730   |   |         | $      | 203,120 |   |
|                                                 |   |     |      |   |         |   |   |   |

| (1) At June 30, 2011, our owner occupied loans amounted to $132 million, or 22.2% of commercial mortgages as compared to $127 million, or 21.8% at December 31, 2010. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                          |   | Recordedinvestment |   |   | Unpaidprincipalbalance |   |   | Relatedallowance |   |
|-------------------------------|--------|--------------------|--------|--------|------------------------|--------|--------|------------------|--------|
| June 30, 2011                 |   |               |   |   |                   |   |   |             |   |
| Without an allowance recorded |   |               |   |   |                   |   |   |             |   |
| Construction                  |   | $                  | 251    |   |                   | $      | 1,560  |             |   | $ | - |   |
| Commercial mortgage           |   |               | 774    |   |                   |   | 774    |             |   |   | - |   |
| Commercial                    |   |               | -      |   |                   |   | -      |             |   |   | - |   |
| Consumer                      |   |               | -      |   |                   |   | -      |             |   |   | - |   |
| Residential                   |   |               | -      |   |                   |   | -      |             |   |   | - |   |
| With an allowance recorded    |   |               |   |   |                   |   |   |             |   |   |   |   |
| Construction                  |   |               | 594    |   |                   |   | 594    |             |   |   | 394 |   |
| Commercial mortgage           |   |               | 2,008  |   |                   |   | 2,008  |             |   |   | 542 |   |
| Commercial                    |   |               | 5,337  |   |                   |   | 5,337  |             |   |   | 1,674 |   |
| Consumer - home equity        |   |               | 633    |   |                   |   | 633    |             |   |   | 428 |   |
| Residential                   |   |               | 9,929  |   |                   |   | 10,025 |             |   |   | 2,163 |   |
| Total                         |   |               |   |   |                   |   |   |             |   |   |   |   |
| Construction                  |   | $                  | 845    |   |                   | $      | 2,154  |             |   | $ | 394 |   |
| Commercial                    |   | $                  | 8,119  |   |                   | $      | 8,119  |             |   | $ | 2,216 |   |
| Consumer                      |   | $                  | 633    |   |                   | $      | 633    |             |   | $ | 428 |   |
| Residential                   |   | $                  | 9,929  |   |                   | $      | 10,025 |             |   | $ | 2,163 |   |
|                          |   |               |   |   |                   |   |   |             |   |   |   |   |
| December 31, 2010             |   |               |   |   |                   |   |   |             |   |   |   |   |
| Without an allowance recorded |   |               |   |   |                   |   |   |             |   |   |   |   |
| Commercial mortgage           |   | $                  | -      |   |                   | $      | -      |             |   | $ | - |   |
| Commercial                    |   |               | -      |   |                   |   | -      |             |   |   | - |   |
| Consumer                      |   |               | -      |   |                   |   | -      |             |   |   | - |   |
| Residential                   |   |               | -      |   |                   |   | -      |             |   |   | - |   |
| With an allowance recorded    |   |               |   |   |                   |   |   |             |   |   |   |   |
| Construction                  |   |               | 4,881  |   |                   |   | 4,881  |             |   |   | 2,644 |   |
| Commercial mortgage           |   |               | 1,650  |   |                   |   | 1,650  |             |   |   | 284 |   |
| Commercial                    |   |               | 2,280  |   |                   |   | 2,280  |             |   |   | 1,316 |   |
| Consumer - home equity        |   |               | 960    |   |                   |   | 960    |             |   |   | 117 |   |
| Residential                   |   |               | 5,526  |   |                   |   | 5,622  |             |   |   | 970 |   |
| Total                         |   |               |   |   |                   |   |   |             |   |   |   |   |
| Construction                  |   | $                  | 4,881  |   |                   | $      | 4,881  |             |   | $ | 2,644 |   |
| Commercial                    |   | $                  | 3,930  |   |                   | $      | 3,930  |             |   | $ | 1,600 |   |
| Consumer                      |   | $                  | 960    |   |                   | $      | 960    |             |   | $ | 117 |   |
| Residential                   |   | $                  | 5,526  |   |                   | $      | 5,622  |             |   | $ | 970 |   |

----

|                          |   | Averagerecordedinvestment |   |   | Interestincomerecognized |   |
|-------------------------------|--------|---------------------------|--------|--------|--------------------------|--------|
| June 30, 2011                 |   |                      |   |   |                     |   |
| Without an allowance recorded |   |                      |   |   |                     |   |
| Construction                  |   | $                         | 251    |   |                     | $      | - |   |
| Commercial mortgage           |   |                      | 774    |   |                     |   |   |   |
| Commercial                    |   |                      | -      |   |                     |   | - |   |
| Consumer                      |   |                      | -      |   |                     |   | - |   |
| Residential                   |   |                      | -      |   |                     |   | - |   |
| With an allowance recorded    |   |                      |   |   |                     |   |   |   |
| Construction                  |   |                      | 1,019  |   |                     |   | - |   |
| Commercial mortgage           |   |                      | 2,010  |   |                     |   | - |   |
| Commercial                    |   |                      | 3,941  |   |                     |   | - |   |
| Consumer - home equity        |   |                      | 633    |   |                     |   | - |   |
| Residential                   |   |                      | 8,250  |   |                     |   | - |   |
| Total                         |   |                      |   |   |                     |   |   |   |
| Construction                  |   | $                         | 1,270  |   |                     | $      | - |   |
| Commercial                    |   | $                         | 6,725  |   |                     | $      | - |   |
| Consumer                      |   | $                         | 633    |   |                     | $      | - |   |
| Residential                   |   | $                         | 8,250  |   |                     | $      | - |   |

|                                                                            |   | June 30,       |   |   | December 31, |   |
|---------------------------------------------------------------------------------|--------|----------------|--------|--------|--------------|--------|
|                                                                            |   | 2011           |   |   | 2010         |   |
|                                                                            |   | (in thousands) |   |
|                                                                            |   |           |   |   |         |   |
| Non-accrual loans                                                               |   |           |   |   |         |   |
|           Construction        |   | $              | 845    |   |         | $      | 4,881 |   |
|           Commercial mortgage |   |           | 2,782  |   |         |   | 1,650 |   |
|           Commercial          |   |           | 5,337  |   |         |   | 2,280 |   |
|           Consumer            |   |           | 633    |   |         |   | 960 |   |
|           Residential         |   |           | 9,929  |   |         |   | 5,526 |   |
| Total non-accrual loans                                                         |   |           | 19,526 |   |         |   | 15,297 |   |
|                                                                            |   |           |   |   |         |   |   |   |
| Loans past due 90 days or more                                                  |   |           | 4,397  |   |         |   | 2,220 |   |
| Total non-performing loans                                                      |   |           | 23,923 |   |         |   | 17,517 |   |
| Other real estate owned                                                         |   |           | 3,764  |   |         |   | 2,115 |   |
| Total non-performing assets                                                     |   | $              | 27,687 |   |         | $      | 19,632 |   |

----

|                                                  |   |       |    |   | Commercial |   |    |         |   |   | Residential |   |   |     |   |   | Direct financing |   |    |        |   |   |    |   |
|-------------------------------------------------------|--------|------------|---------|--------|------------|--------|---------|--------------|--------|--------|-------------|--------|--------|----------|--------|--------|------------------|--------|---------|-------------|--------|--------|---------|--------|
| Six months ended                                      |   | Commercial |    |   | mortgage   |   |    | Construction |   |   | mortgage    |   |   | Consumer |   |   | leases, net      |   |    | Unallocated |   |   | Total   |   |
| June 30, 2011                                         |   |       |    |   |       |   |    |         |   |   |        |   |   |     |   |   |             |   |    |        |   |   |    |   |
| Beginning balance                                     |   | $          | 6,051   |   |       | $      | 9,501   |         |   | $      | 5,030       |   |   | $        | 2,115  |   |             | $      | 578     |        |   | $      | 164     |   |   | $ | 624 |   |   | $ | 24,063 |   |
| Charge-offs                                           |   |       | (4,702  | )      |       |   | (102    | )            |   |   | (2,496      | )      |   |     | (49    | )      |             |   | (681    | )           |   |   | -       |   |   |   | - |   |   |   | (8,030 | ) |
| Recoveries                                            |   |       | 2       |   |       |   | 13      |         |   |   | 2           |   |   |     | -      |   |             |   | -       |        |   |   | -       |   |   |   | - |   |   |   | 17 |   |
| Provision                                             |   |       | 8,852   |   |       |   | (526    | )            |   |   | 983         |   |   |     | 939    |   |             |   | 1,488   |        |   |   | 78      |   |   |   | (179 | ) |   |   | 11,635 |   |
| Ending balance                                        |   | $          | 10,203  |   |       | $      | 8,886   |         |   | $      | 3,519       |   |   | $        | 3,005  |   |             | $      | 1,385   |        |   | $      | 242     |   |   | $ | 445 |   |   | $ | 27,685 |   |
|                                                  |   |       |    |   |       |   |    |         |   |   |        |   |   |     |   |   |             |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Ending balance: Individually evaluated for impairment |   | $          | 1,674   |   |       | $      | 542     |         |   | $      | 394         |   |   | $        | 2,163  |   |             | $      | 428     |        |   | $      | -       |   |   | $ | - |   |   | $ | 5,201 |   |
|                                                  |   |       |    |   |       |   |    |         |   |   |        |   |   |     |   |   |             |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Ending balance: Collectively evaluated for impairment |   | $          | 8,529   |   |       | $      | 8,344   |         |   | $      | 3,125       |   |   | $        | 842    |   |             | $      | 957     |        |   | $      | 242     |   |   | $ | 445 |   |   | $ | 22,484 |   |
|                                                  |   |       |    |   |       |   |    |         |   |   |        |   |   |     |   |   |             |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
|                                                  |   |       |    |   |       |   |    |         |   |   |        |   |   |     |   |   |             |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Loans:                                                |   |       |    |   |       |   |    |         |   |   |        |   |   |     |   |   |             |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Ending balance                                        |   | $          | 450,916 |   |       | $      | 593,842 |         |   | $      | 205,730     |   |   | $        | 98,113 |   |             | $      | 200,132 |        |   | $      | 127,016 |   |   | $ | 2,911 |   |   | $ | 1,678,660 |   |
|                                                  |   |       |    |   |       |   |    |         |   |   |        |   |   |     |   |   |             |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Ending balance: Individually evaluated for impairment |   | $          | 5,337   |   |       | $      | 2,782   |         |   | $      | 845         |   |   | $        | 9,929  |   |             | $      | 633     |        |   | $      | -       |   |   | $ | - |   |   | $ | 19,526 |   |
|                                                  |   |       |    |   |       |   |    |         |   |   |        |   |   |     |   |   |             |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Ending balance: Collectively evaluated for impairment |   | $          | 445,579 |   |       | $      | 591,060 |         |   | $      | 204,885     |   |   | $        | 88,184 |   |             | $      | 199,499 |        |   | $      | 127,016 |   |   | $ | 2,911 |   |   | $ | 1,659,134 |   |
|                                                  |   |       |    |   |       |   |    |         |   |   |        |   |   |     |   |   |             |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |

| Twelve months ended                                   |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |
|-------------------------------------------------------|--------|---------|---------|--------|--------|---------|---------|--------|--------|---------|---------|--------|--------|---------|--------|--------|--------|---------|---------|--------|--------|---------|---------|--------|--------|---------|--------|--------|--------|---------|-----------|--------|
| December 31, 2010                                     |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |
| Beginning balance                                     |   | $       | 5,181   |   |   | $       | 7,041   |   |   | $       | 4,356   |   |   | $       | 1,699  |   |   | $       | 460     |   |   | $       | 151     |   |   | $       | 235    |   |   | $       | 19,123    |   |
| Charge-offs                                           |   |    | (4,453  | )      |   |    | (9,060  | )      |   |    | -       |   |   |    | (1,254 | )      |   |    | (618    | )      |   |    | (3      | )      |   |    | -      |   |   |    | (15,388   | )      |
| Recoveries                                            |   |    | 232     |   |   |    | 47      |   |   |    | 4       |   |   |    | 742    |   |   |    | 6       |   |   |    | 10      |   |   |    | -      |   |   |    | 1,041     |   |
| Provision                                             |   |    | 5,091   |   |   |    | 11,473  |   |   |    | 670     |   |   |    | 928    |   |   |    | 730     |   |   |    | 6       |   |   |    | 389    |   |   |    | 19,287    |   |
| Ending balance                                        |   | $       | 6,051   |   |   | $       | 9,501   |   |   | $       | 5,030   |   |   | $       | 2,115  |   |   | $       | 578     |   |   | $       | 164     |   |   | $       | 624    |   |   | $       | 24,063    |   |
|                                                  |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |
| Ending balance: Individually evaluated for impairment |   | $  | 1,316   |   |   | $  | 284     |   |   | $  | 2,644   |   |   | $  | 970    |   |   | $  | 117     |   |   | $  | -       |   |   | $  | -      |   |   | $  | 5,331     |   |
|                                                  |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |
| Ending balance: Collectively evaluated for impairment |   | $  | 4,735   |   |   | $  | 9,217   |   |   | $  | 2,386   |   |   | $  | 1,145  |   |   | $  | 461     |   |   | $  | 164     |   |   | $  | 624    |   |   | $  | 18,732    |   |
|                                                  |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |
|                                                  |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |
| Loans:                                                |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |
| Ending balance                                        |   | $       | 444,259 |   |   | $       | 580,780 |   |   | $       | 203,120 |   |   | $       | 93,147 |   |   | $       | 194,600 |   |   | $       | 103,289 |   |   | $       | -      |   |   | $       | 1,619,195 |   |
|                                                  |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |
| Ending balance: Individually evaluated for impairment |   | $       | 2,280   |   |   | $       | 1,650   |   |   | $       | 4,881   |   |   | $       | 5,526  |   |   | $       | 960     |   |   | $       | -       |   |   | $       | -      |   |   | $       | 15,297    |   |
|                                                  |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |
| Ending balance: Collectively evaluated for impairment |   | $       | 441,979 |   |   | $       | 579,130 |   |   | $       | 198,239 |   |   | $       | 87,621 |   |   | $       | 193,640 |   |   | $       | 103,289 |   |   | $       | -      |   |   | $       | 1,603,898 |   |
|                                                  |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |

----

|                                                  |   | Six months endedJune 30, |   |
|-------------------------------------------------------|--------|--------------------------|--------|
|                                                  |   | 2010                     |   |
|                                                  |   |                     |   |
| Balance in the allowance for loan and lease losses at |   |                     |   |
| beginning of period                                   |   | $                        | 19,123 |   |
|                                                  |   |                     |   |   |
| Loans charged-off:                                    |   |                     |   |   |
| Commercial                                            |   |                     | 6,484  |   |
| Construction                                          |   |                     | -      |   |
| Lease financing                                       |   |                     | -      |   |
| Residential mortgage                                  |   |                     | 223    |   |
| Consumer                                              |   |                     | 138    |   |
| Total                                                 |   |                     | 6,845  |   |
|                                                  |   |                     |   |   |
| Recoveries:                                           |   |                     |   |   |
| Commercial                                            |   |                     | 79     |   |
| Construction                                          |   |                     | 3      |   |
| Lease financing                                       |   |                     | -      |   |
| Residential mortgage                                  |   |                     | 16     |   |
| Consumer                                              |   |                     | 6      |   |
| Total                                                 |   |                     | 104    |   |
| Net charge-offs                                       |   |                     | 6,741  |   |
| Provision charged to operations                       |   |                     | 9,954  |   |
| Balance in allowance for loan and lease losses at end |   |                     |   |   |
| of period                                             |   | $                        | 22,336 |   |
| Net charge-offs/average loans                         |   |                     | 0.44   | % |

| Age Analysis of Past Due Loans |   |
|--------------------------------|--------|
|                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                           |   | 30-59 Days |   |   | 60-89 Days |   |   | Greater Than |   |   |   |   |   | Total |   |   |   |   |   | Total |   |
| June 30, 2011                  |   | past due |   |   | past due |   |   | 90 days |   |   | Nonaccrual |   |   | past due |   |   | Current |   |   | loans |   |
| Commercial                     |   | $ | 3,351 |   |   | $ | - |   |   | $ | 1,133 |   |   | $ | 5,337 |   |   | $ | 9,821 |   |   | $ | 441,095 |   |   | $ | 450,916 |   |
| Commercial mortgage            |   |   | 2,349 |   |   |   | 1,070 |   |   |   | 824 |   |   |   | 2,782 |   |   |   | 7,025 |   |   |   | 586,817 |   |   |   | 593,842 |   |
| Construction                   |   |   | - |   |   |   | - |   |   |   | 2,366 |   |   |   | 845 |   |   |   | 3,211 |   |   |   | 202,519 |   |   |   | 205,730 |   |
| Direct financing leases, net   |   |   | 1,305 |   |   |   | 52 |   |   |   | 69 |   |   |   | - |   |   |   | 1,426 |   |   |   | 125,590 |   |   |   | 127,016 |   |
| Consumer - other               |   |   | - |   |   |   | 50 |   |   |   | 5 |   |   |   | - |   |   |   | 55 |   |   |   | 155,800 |   |   |   | 155,855 |   |
| Consumer - home equity         |   |   | 330 |   |   |   | 1,012 |   |   |   | - |   |   |   | 633 |   |   |   | 1,975 |   |   |   | 42,302 |   |   |   | 44,277 |   |
| Residential mortgage           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 9,929 |   |   |   | 9,929 |   |   |   | 88,184 |   |   |   | 98,113 |   |
| Unamortized costs              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,911 |   |   |   | 2,911 |   |
|                           |   | $ | 7,335 |   |   | $ | 2,184 |   |   | $ | 4,397 |   |   | $ | 19,526 |   |   | $ | 33,442 |   |   | $ | 1,645,218 |   |   | $ | 1,678,660 |   |
|                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                     |   | $ | - |   |   | $ | 100 |   |   | $ | 285 |   |   | $ | 2,280 |   |   | $ | 2,665 |   |   | $ | 439,134 |   |   | $ | 441,799 |   |
| Commercial mortgage            |   |   | 774 |   |   |   | - |   |   |   | 824 |   |   |   | 1,650 |   |   |   | 3,248 |   |   |   | 577,532 |   |   |   | 580,780 |   |
| Construction                   |   |   | - |   |   |   | 391 |   |   |   | - |   |   |   | 4,881 |   |   |   | 5,272 |   |   |   | 197,848 |   |   |   | 203,120 |   |
| Direct financing leases, net   |   |   | 816 |   |   |   | 192 |   |   |   | 49 |   |   |   | - |   |   |   | 1,057 |   |   |   | 102,232 |   |   |   | 103,289 |   |
| Consumer - other               |   |   | - |   |   |   | 2 |   |   |   | 12 |   |   |   | - |   |   |   | 14 |   |   |   | 148,715 |   |   |   | 148,729 |   |
| Consumer - home equity         |   |   | 330 |   |   |   | - |   |   |   | - |   |   |   | 960 |   |   |   | 1,290 |   |   |   | 44,301 |   |   |   | 45,591 |   |
| Residential mortgage           |   |   | - |   |   |   | - |   |   |   | 1,050 |   |   |   | 5,526 |   |   |   | 6,576 |   |   |   | 86,428 |   |   |   | 93,004 |   |
| Unamortized costs              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,883 |   |   |   | 2,883 |   |
|                           |   | $ | 1,920 |   |   | $ | 685 |   |   | $ | 2,220 |   |   | $ | 15,297 |   |   | $ | 20,122 |   |   | $ | 1,599,073 |   |   | $ | 1,619,195 |   |

----

|            |   |       |    |   |         |   |    |      |   |   |       |   |
|-----------------|--------|------------|---------|--------|--------------|--------|---------|-----------|--------|--------|------------|--------|
|            |   |       |    |   |         |   |    |      |   |   |       |   |   | Commercial |   |   | Residential |   |
|            |   | Commercial |    |   | Construction |   |    | mortgage  |   |   | mortgage   |   |
|            |   | 6/30/2011  |    |   | 12/31/2010   |   |    | 6/30/2011 |   |   | 12/31/2010 |   |   | 6/30/2011 |   |   | 12/31/2010 |   |   | 6/30/2011 |   |   | 12/31/2010 |   |
| Risk Rating     |   |       |    |   |         |   |    |      |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pass            |   | $          | 273,480 |   |         | $      | 291,140 |      |   | $      | 166,749    |   |   | $ | 165,089 |   |   | $ | 477,488 |   |   | $ | 461,378 |   |   | $ | 28,183 |   |   | $ | 30,066 |   |
| Special Mention |   |       | 21,450  |   |         |   | -       |      |   |   | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Substandard     |   |       | 9,894   |   |         |   | 6,091   |      |   |   | 5,277      |   |   |   | 5,271 |   |   |   | 4,675 |   |   |   | 3,608 |   |   |   | 9,929 |   |   |   | 6,576 |   |
| Doubtful        |   |       | -       |   |         |   | -       |      |   |   | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Loss            |   |       | -       |   |         |   | -       |      |   |   | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Unrated         |   |       | 146,092 |   |         |   | 144,568 |      |   |   | 33,704     |   |   |   | 32,760 |   |   |   | 111,679 |   |   |   | 115,794 |   |   |   | 60,001 |   |   |   | 56,362 |   |
| Total           |   | $          | 450,916 |   |         | $      | 441,799 |      |   | $      | 205,730    |   |   | $ | 203,120 |   |   | $ | 593,842 |   |   | $ | 580,780 |   |   | $ | 98,113 |   |   | $ | 93,004 |   |
|            |   |       |    |   |         |   |    |      |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|            |   |      |    |   |        |   |    |              |   |             |       |   |
|-----------------|--------|-----------|---------|--------|-------------|--------|---------|-------------------|--------|------------------|------------|--------|
|            |   |      |    |   |        |   |    |              |   | Direct financing |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            |   | Consumer  |    |   | leases, net |   |    | Unamortized costs |   |             | Total      |   |
|            |   | 6/30/2011 |    |   | 12/31/2010  |   |    | 6/30/2011         |   |             | 12/31/2010 |   |   | 6/30/2011 |   |   | 12/31/2010 |   |   | 6/30/2011 |   |   | 12/31/2010 |   |
| Risk Rating     |   |      |    |   |        |   |    |              |   |             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pass            |   | $         | 65,713  |   |        | $      | 59,064  |              |   | $                | 12,000     |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 1,023,613 |   |   | $ | 1,006,737 |   |
| Special Mention |   |      | -       |   |        |   | -       |              |   |             | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 21,450 |   |   |   | - |   |
| Substandard     |   |      | 2,157   |   |        |   | 1,224   |              |   |             | 42         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 31,974 |   |   |   | 22,770 |   |
| Doubtful        |   |      | -       |   |        |   | -       |              |   |             | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Loss            |   |      | -       |   |        |   | -       |              |   |             | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Unrated         |   |      | 132,262 |   |        |   | 134,032 |              |   |             | 114,974    |   |   |   | 103,289 |   |   |   | 2,911 |   |   |   | 2,883 |   |   |   | 601,623 |   |   |   | 589,688 |   |
| Total           |   | $         | 200,132 |   |        | $      | 194,320 |              |   | $                | 127,016    |   |   | $ | 103,289 |   |   | $ | 2,911 |   |   | $ | 2,883 |   |   | $ | 1,678,660 |   |   | $ | 1,619,195 |   |

----

|                                           |   | June 30, 2011  |      |   | December 31, 2010 |   |
|------------------------------------------------|--------|----------------|-----------|--------|-------------------|--------|
|                                           |   | Carrying       |      |   | Estimated         |   |   | Carrying |   |   | Estimated |   |
|                                           |   | amount         |      |   | fair value        |   |   | amount |   |   | fair value |   |
|                                           |   | (in thousands) |      |
| Cash and cash equivalents                      |   | $              | 368,823   |   |              | $      | 368,823 |   |   | $ | 472,319 |   |   | $ | 472,319 |   |
| Investment securities available-for-sale       |   |           | 353,099   |   |              |   | 353,099 |   |   |   | 231,165 |   |   |   | 231,165 |   |
| Investment securities held-to-maturity         |   |           | 18,102    |   |              |   | 13,498 |   |   |   | 21,364 |   |   |   | 16,550 |   |
| Loans receivable, net                          |   |           | 1,678,660 |   |              |   | 1,654,704 |   |   |   | 1,619,195 |   |   |   | 1,597,764 |   |
| Demand deposits (non-interest bearing)         |   |           | 1,073,228 |   |              |   | 1,073,228 |   |   |   | 945,605 |   |   |   | 945,605 |   |
| Savings, money market and interest checking    |   |           | 1,076,654 |   |              |   | 1,076,654 |   |   |   | 975,973 |   |   |   | 975,973 |   |
| Certificates of deposit                        |   |           | 12,821    |   |              |   | 12,881 |   |   |   | 102,519 |   |   |   | 102,587 |   |
| Subordinated debentures and notes              |   |           | 13,401    |   |              |   | 9,185 |   |   |   | 13,401 |   |   |   | 9,185 |   |
| Securities sold under agreements to repurchase |   |           | 20,258    |   |              |   | 20,258 |   |   |   | 14,383 |   |   |   | 14,383 |   |
| Short-term borrowings                          |   |           | -         |   |              |   | - |   |   |   | 136,000 |   |   |   | 136,000 |   |

----

|                                             |   |                        |    |   | Fair Value Measurements at Reporting Date Using               |                                            |
|--------------------------------------------------|--------|-----------------------------|---------|--------|---------------------------------------------------------------|-------------------------------------------------|
| Description                                      |   | Fair valueJune 30, 2011     |    |   | Quoted prices in active markets for identical assets(Level 1) |                                            |   | Significant otherobservable inputs(Level 2) |   |   | Significantunobservable inputs(Level 3) |   |
|                                             |   |                        |    |   |                                                          |                                            |   |   |   |   |   |   |
| Investment                                       |   |                        |    |   |                                                          |                                            |   |   |   |   |   |   |
| U.S. Government agency securities                |   | $                           | 9,466   |   |                                                          | $                                               | - |   |   | $ | 9,466 |   |   | $ | - |   |
| Obligations of states and political subdivisions |   |                        | 102,332 |   |                                                          |                                            | - |   |   |   | 102,332 |   |   |   | - |   |
| Mortgage-backed securities                       |   |                        | 203,549 |   |                                                          |                                            | - |   |   |   | 203,549 |   |   |   | - |   |
| Other debt securities                            |   |                        | 29,118  |   |                                                          |                                            | - |   |   |   | 28,476 |   |   |   | 642 |   |
| Other equity securities                          |   |                        | 3,000   |   |                                                          |                                            | 3,000 |   |   |   | - |   |   |   | - |   |
| Federal Home Loan and Atlantic Central           |   |                        |    |   |                                                          |                                            |   |   |   |   |   |   |   |   |   |   |
|   Bankers Bank stock                   |   |                        | 5,634   |   |                                                          |                                            | - |   |   |   | - |   |   |   | 5,634 |   |
|                                             |   | $                           | 353,099 |   |                                                          | $                                               | 3,000 |   |   | $ | 343,823 |   |   | $ | 6,276 |   |
|                                             |   |                        |    |   |                                                          |                                            |   |   |   |   |   |   |   |   |   |   |
|                                             |   |                        |    |   |                                                          | Fair Value Measurements at Reporting Date Using |   |
| Description                                      |   | Fair valueDecember 31, 2010 |    |   | Quoted prices in active markets for identical assets(Level 1) |                                            |   | Significant other observable inputs(Level 2) |   |   | Significant unobservable inputs(Level 3) |   |
|                                             |   |                        |    |   |                                                          |                                            |   |   |   |   |   |   |   |   |   |   |
| Investment                                       |   |                        |    |   |                                                          |                                            |   |   |   |   |   |   |   |   |   |   |
| Obligations of states and political subdivisions |   | $                           | 103,988 |   |                                                          | $                                               | - |   |   | $ | 103,988 |   |   | $ | - |   |
| Mortgage-backed securities                       |   |                        | 76,915  |   |                                                          |                                            | - |   |   |   | 76,915 |   |   |   | - |   |
| Other debt securities                            |   |                        | 44,024  |   |                                                          |                                            | - |   |   |   | 43,276 |   |   |   | 748 |   |
| Federal Home Loan and Atlantic Central           |   |                        |    |   |                                                          |                                            |   |   |   |   |   |   |   |   |   |   |
|   Bankers Bank stock                   |   |                        | 6,238   |   |                                                          |                                            | - |   |   |   | - |   |   |   | 6,238 |   |
|                                             |   | $                           | 231,165 |   |                                                          | $                                               | - |   |   | $ | 224,179 |   |   | $ | 6,986 |   |

| Fair Value Measurements Using               |   |
|---------------------------------------------|--------|
| Significant Unobservable Inputs             |   |
| (Level 3)                                   |   |
|                                        |   | Available-for-sale |   |
|                                        |   | securities |   |
|                                        |   | June 30, 2011 |   |   | December 31, 2010 |   |
| Beginning balance                           |   | $ | 6,986 |   |   | $ | 7,222 |   |
| Transfers into level 3                      |   |   | - |   |   |   | - |   |
| Transfers out of level 3                    |   |   | - |   |   |   | - |   |
| Total gains or losses (realized/unrealized) |   |   |   |   |   |   |   |   |
| Included in earnings                        |   |   | (2 | ) |   |   | (13 | ) |
| Included in other comprehensive income      |   |   | (72 | ) |   |   | 186 |   |
| Purchases, issuances, and settlements       |   |   |   |   |   |   |   |   |
| Purchases                                   |   |   | - |   |   |   | - |   |
| Issuances                                   |   |   | - |   |   |   | - |   |
| Sales                                       |   |   |   |   |   |   |   |   |
| Settlements                                 |   |   | (636 | ) |   |   | (409 | ) |
| Ending balance                              |   | $ | 6,276 |   |   | $ | 6,986 |   |

----

|                    |   |              |   |   | Fair Value Measurements at Reporting Date Using               |                                            |
|-------------------------|--------|-------------------|--------|--------|---------------------------------------------------------------|-------------------------------------------------|
| Description             |   | June 30, 2011     |   |   | Quoted prices in active markets for identical assets(Level 1) |                                            |   | Significant other observable inputs(Level 2) |   |   | Significant unobservable inputs(Level 3) |   |
|                    |   |              |   |   |                                                          |                                            |   |   |   |   |   |   |
| Impaired loans          |   | $                 | 19,526 |   |                                                          | $                                               | - |   |   | $ | - |   |   | $ | 19,526 |   |
| Other real estate owned |   |              | 3,764  |   |                                                          |                                            | - |   |   |   | - |   |   |   | 3,764 |   |
|                    |   | $                 | 23,290 |   |                                                          | $                                               | - |   |   | $ | - |   |   | $ | 23,290 |   |
|                    |   |              |   |   |                                                          |                                            |   |   |   |   |   |   |   |   |   |   |
|                    |   |              |   |   |                                                          | Fair Value Measurements at Reporting Date Using |   |
| Description             |   | December 31, 2010 |   |   | Quoted prices in active markets for identical assets(Level 1) |                                            |   | Significant other observable inputs(Level 2) |   |   | Significant unobservable inputs(Level 3) |   |
|                    |   |              |   |   |                                                          |                                            |   |   |   |   |   |   |   |   |   |   |
| Impaired loans          |   | $                 | 15,297 |   |                                                          | $                                               | - |   |   | $ | - |   |   | $ | 15,297 |   |
| Other real estate owned |   |              | 2,115  |   |                                                          |                                            | - |   |   |   | - |   |   |   | 2,115 |   |
|                    |   | $                 | 17,412 |   |                                                          | $                                               | - |   |   | $ | - |   |   | $ | 17,412 |   |

----

----

Part 

----

----

----

|                                                                                                                                                                                                                              |   | Three months ended June 30, |      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|-----------|
|                                                                                                                                                                                                                              |   | 2011                        |      |   | 2010 |   |
|                                                                                                                                                                                                                              |   | Average                     |      |   |   |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
|                                                                                                                                                                                                                              |   | Balance                     |      |   | Interest |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
|                                                                                                                                                                                                                              |   |                        |      |   | (dollars in thousands) |   |   |   |   |   |   |   |   | (dollars in thousands) |   |   |   |   |
| Assets:                                                                                                                                                                                                                           |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest earning assets:                                                                                                                                                                                                          |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans net of unearned discount                                                                                                                                                                                                    |   | $                           | 1,642,867 |   |   | $ | 18,084 |   |   |   | 4.40 | % |   | $ | 1,572,787 |   |   | $ | 18,373 |   |   |   | 4.67 | % |
| Loans-nontaxable*                                                                                                                                                                                                                 |   |                        | 4,820     |   |   |   | 100 |   |   |   | 8.30 | % |   |   | - |   |   |   | - |   |   |   | 0.00 | % |
| Investment securities-taxable                                                                                                                                                                                                     |   |                        | 270,535   |   |   |   | 2,340 |   |   |   | 3.46 | % |   |   | 173,447 |   |   |   | 1,702 |   |   |   | 3.93 | % |
| Investment securities-nontaxable*                                                                                                                                                                                                 |   |                        | 76,123    |   |   |   | 1,007 |   |   |   | 5.29 | % |   |   | 31,948 |   |   |   | 520 |   |   |   | 6.51 | % |
| Interest earning deposits                                                                                                                                                                                                         |   |                        | 389,794   |   |   |   | 230 |   |   |   | 0.24 | % |   |   | 179,874 |   |   |   | 83 |   |   |   | 0.18 | % |
| Net interest earning assets                                                                                                                                                                                                       |   |                        | 2,384,139 |   |   |   | 21,761 |   |   |   | 3.65 | % |   |   | 1,958,056 |   |   |   | 20,678 |   |   |   | 4.22 | % |
|                                                                                                                                                                                                                              |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan and lease losses                                                                                                                                                                                               |   |                        | (26,463   | ) |   |   |   |   |   |   |   |   |   |   | (21,094 | ) |   |   |   |   |   |   |   |   |
| Other assets                                                                                                                                                                                                                      |   |                        | 271,564   |   |   |   |   |   |   |   |   |   |   |   | 166,798 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                              |   | $                           | 2,629,240 |   |   |   |   |   |   |   |   |   |   | $ | 2,103,760 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                              |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and shareholders' equity:                                                                                                                                                                                             |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                                                                                                                                                                                         |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand (non-interest bearing) **                                                                                                                                                                                                  |   | $                           | 1,224,208 |   |   | $ | 343 |   |   |   | 0.11 | % |   | $ | 853,413 |   |   | $ | 279 |   |   |   | 0.13 | % |
| Interest bearing deposits                                                                                                                                                                                                         |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest checking                                                                                                                                                                                                                 |   |                        | 753,863   |   |   |   | 1,705 |   |   |   | 0.90 | % |   |   | 601,861 |   |   |   | 2,096 |   |   |   | 1.39 | % |
| Savings and money market                                                                                                                                                                                                          |   |                        | 336,244   |   |   |   | 794 |   |   |   | 0.94 | % |   |   | 290,447 |   |   |   | 1,039 |   |   |   | 1.43 | % |
| Time                                                                                                                                                                                                                              |   |                        | 12,812    |   |   |   | 43 |   |   |   | 1.34 | % |   |   | 91,561 |   |   |   | 120 |   |   |   | 0.52 | % |
| Total interest bearing deposits                                                                                                                                                                                                   |   |                        | 1,102,919 |   |   |   | 2,542 |   |   |   | 0.92 | % |   |   | 983,869 |   |   |   | 3,255 |   |   |   | 1.32 | % |
| Total deposits                                                                                                                                                                                                                    |   |                        | 2,327,127 |   |   |   | 2,885 |   |   |   | 0.50 | % |   |   | 1,837,282 |   |   |   | 3,534 |   |   |   | 0.77 | % |
|                                                                                                                                                                                                                              |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Short term borrowings                                                                                                                                                                                                             |   |                        | -         |   |   |   | - |   |   |   | 0.00 | % |   |   | 34,835 |   |   |   | 59 |   |   |   | 0.68 | % |
| Repurchase agreements                                                                                                                                                                                                             |   |                        | 19,832    |   |   |   | 26 |   |   |   | 0.52 | % |   |   | 8,134 |   |   |   | 7 |   |   |   | 0.34 | % |
| Subordinated debt                                                                                                                                                                                                                 |   |                        | 13,401    |   |   |   | 216 |   |   |   | 6.45 | % |   |   | 13,401 |   |   |   | 216 |   |   |   | 6.45 | % |
| Net interest bearing liabilities                                                                                                                                                                                                  |   |                        | 1,136,152 |   |   |   | 2,784 |   |   |   | 0.98 | % |   |   | 1,040,239 |   |   |   | 3,537 |   |   |   | 1.36 | % |
| Total deposits and interest bearing liabilities                                                                                                                                                                                   |   |                        | 2,360,360 |   |   |   | 3,127 |   |   |   | 0.53 | % |   |   | 1,893,652 |   |   |   | 3,816 |   |   |   | 0.81 | % |
|                                                                                                                                                                                                                              |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other liabilities                                                                                                                                                                                                                 |   |                        | 9,668     |   |   |   |   |   |   |   |   |   |   |   | 7,230 |   |   |   |   |   |   |   |   |   |
| Total Liabilities                                                                                                                                                                                                                 |   |                        | 2,370,028 |   |   |   |   |   |   |   |   |   |   |   | 1,900,882 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                              |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shareholders' equity                                                                                                                                                                                                              |   |                        | 259,212   |   |   |   |   |   |   |   |   |   |   |   | 202,878 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                              |   | $                           | 2,629,240 |   |   |   |   |   |   |   |   |   |   | $ | 2,103,760 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                              |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income on tax equivalent basis *                                                                                                                                                                                     |   |                        | $         | 18,634 |   |   |   |   |   |   |   |   |   |   | $ | 16,862 |   |   |   |   |   |
|                                                                                                                                                                                                                              |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tax equivalent adjustment                                                                                                                                                                                                         |   |                        |      |   |   |   | 377 |   |   |   |   |   |   |   |   |   |   |   | 173 |   |   |   |   |   |
|                                                                                                                                                                                                                              |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                                                                                                                                                                                               |   |                        |      |   |   | $ | 18,257 |   |   |   |   |   |   |   |   |   |   | $ | 16,689 |   |   |   |   |   |
|                                                                                                                                                                                                                              |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest margin *                                                                                                                                                                                                             |   |                        |      |   |   |   |   |   |   |   | 3.13 | % |   |   |   |   |   |   |   |   |   |   | 3.44 | % |
| * Full taxable equivalent basis, using a 34% statutory tax rate.                                                                                                                                                                  |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ** Non-interest bearing demand accounts are not paid interest. The amount shown as interest reflects the fees paid to affinity groups, which are based upon a rate index, and therefore classified as interest expense. |   |
|                                                                                                                                                                                                                              |

----

----

----

|                                                                                                                                                                                                                              |   | Six months ended June 30, |      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|-----------|
|                                                                                                                                                                                                                              |   | 2011                      |      |   | 2010 |   |
|                                                                                                                                                                                                                              |   | Average                   |      |   |   |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
|                                                                                                                                                                                                                              |   | Balance                   |      |   | Interest |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
|                                                                                                                                                                                                                              |   |                      |      |   | (dollars in thousands) |   |   |   |   |   |   |   |   | (dollars in thousands) |   |   |   |   |
| Assets:                                                                                                                                                                                                                           |   |                      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest earning assets:                                                                                                                                                                                                          |   |                      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans net of unearned discount                                                                                                                                                                                                    |   | $                         | 1,635,432 |   |   | $ | 36,344 |   |   |   | 4.44 | % |   | $ | 1,545,859 |   |   | $ | 36,289 |   |   |   | 4.69 | % |
| Loans-nontaxable*                                                                                                                                                                                                                 |   |                      | 3,589     |   |   |   | 150 |   |   |   | 8.36 | % |   |   | - |   |   |   | - |   |   |   | 0.00 | % |
| Investment securities-taxable                                                                                                                                                                                                     |   |                      | 228,302   |   |   |   | 3,897 |   |   |   | 3.41 | % |   |   | 152,060 |   |   |   | 3,010 |   |   |   | 3.96 | % |
| Investment securities-nontaxable*                                                                                                                                                                                                 |   |                      | 76,854    |   |   |   | 2,018 |   |   |   | 5.25 | % |   |   | 31,405 |   |   |   | 1,107 |   |   |   | 7.05 | % |
| Interest earning deposits                                                                                                                                                                                                         |   |                      | 610,215   |   |   |   | 745 |   |   |   | 0.24 | % |   |   | 327,096 |   |   |   | 434 |   |   |   | 0.27 | % |
| Net interest earning assets                                                                                                                                                                                                       |   |                      | 2,554,392 |   |   |   | 43,154 |   |   |   | 3.38 | % |   |   | 2,056,420 |   |   |   | 40,840 |   |   |   | 3.97 | % |
|                                                                                                                                                                                                                              |   |                      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan and lease losses                                                                                                                                                                                               |   |                      | (25,648   | ) |   |   |   |   |   |   |   |   |   |   | (20,472 | ) |   |   |   |   |   |   |   |   |
| Other assets                                                                                                                                                                                                                      |   |                      | 279,032   |   |   |   |   |   |   |   |   |   |   |   | 178,762 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                              |   | $                         | 2,807,776 |   |   |   |   |   |   |   |   |   |   | $ | 2,214,710 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                              |   |                      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and shareholders' equity:                                                                                                                                                                                             |   |                      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                                                                                                                                                                                         |   |                      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand (non-interest bearing) **                                                                                                                                                                                                  |   | $                         | 1,434,775 |   |   | $ | 768 |   |   |   | 0.11 | % |   | $ | 985,453 |   |   | $ | 498 |   |   |   | 0.10 | % |
| Interest bearing deposits                                                                                                                                                                                                         |   |                      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest checking                                                                                                                                                                                                                 |   |                      | 734,463   |   |   |   | 2,983 |   |   |   | 0.81 | % |   |   | 570,980 |   |   |   | 4,020 |   |   |   | 1.41 | % |
| Savings and money market                                                                                                                                                                                                          |   |                      | 328,899   |   |   |   | 1,592 |   |   |   | 0.97 | % |   |   | 323,746 |   |   |   | 2,221 |   |   |   | 1.37 | % |
| Time                                                                                                                                                                                                                              |   |                      | 29,567    |   |   |   | 147 |   |   |   | 0.99 | % |   |   | 71,029 |   |   |   | 253 |   |   |   | 0.71 | % |
| Total interest bearing deposits                                                                                                                                                                                                   |   |                      | 1,092,929 |   |   |   | 4,722 |   |   |   | 0.86 | % |   |   | 965,755 |   |   |   | 6,494 |   |   |   | 1.34 | % |
| Total deposits                                                                                                                                                                                                                    |   |                      | 2,527,704 |   |   |   | 5,490 |   |   |   | 0.43 | % |   |   | 1,951,208 |   |   |   | 6,992 |   |   |   | 0.72 | % |
|                                                                                                                                                                                                                              |   |                      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Short term borrowings                                                                                                                                                                                                             |   |                      | 1,503     |   |   |   | 3 |   |   |   | 0.40 | % |   |   | 19,097 |   |   |   | 64 |   |   |   | 0.67 | % |
| Repurchase agreements                                                                                                                                                                                                             |   |                      | 18,439    |   |   |   | 42 |   |   |   | 0.46 | % |   |   | 6,464 |   |   |   | 14 |   |   |   | 0.43 | % |
| Subordinated debt                                                                                                                                                                                                                 |   |                      | 13,401    |   |   |   | 431 |   |   |   | 6.43 | % |   |   | 13,179 |   |   |   | 431 |   |   |   | 6.54 | % |
| Net interest bearing liabilities                                                                                                                                                                                                  |   |                      | 1,126,272 |   |   |   | 5,198 |   |   |   | 0.92 | % |   |   | 1,004,495 |   |   |   | 7,003 |   |   |   | 1.39 | % |
| Total deposits and interest bearing liabilities                                                                                                                                                                                   |   |                      | 2,561,047 |   |   |   | 5,966 |   |   |   | 0.47 | % |   |   | 1,989,948 |   |   |   | 7,501 |   |   |   | 0.75 | % |
|                                                                                                                                                                                                                              |   |                      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other liabilities                                                                                                                                                                                                                 |   |                      | 9,553     |   |   |   |   |   |   |   |   |   |   |   | 9,978 |   |   |   |   |   |   |   |   |   |
| Total Liabilities                                                                                                                                                                                                                 |   |                      | 2,570,600 |   |   |   |   |   |   |   |   |   |   |   | 1,999,926 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                              |   |                      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shareholders' equity                                                                                                                                                                                                              |   |                      | 237,176   |   |   |   |   |   |   |   |   |   |   |   | 214,784 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                              |   | $                         | 2,807,776 |   |   |   |   |   |   |   |   |   |   | $ | 2,214,710 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                              |   |                      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income on tax equivalent basis *                                                                                                                                                                                     |   |                      | $         | 37,188 |   |   |   |   |   |   |   |   |   |   | $ | 33,339 |   |   |   |   |   |
|                                                                                                                                                                                                                              |   |                      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tax equivalent adjustment                                                                                                                                                                                                         |   |                      |      |   |   |   | 733 |   |   |   |   |   |   |   |   |   |   |   | 370 |   |   |   |   |   |
|                                                                                                                                                                                                                              |   |                      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                                                                                                                                                                                               |   |                      |      |   |   | $ | 36,455 |   |   |   |   |   |   |   |   |   |   | $ | 32,969 |   |   |   |   |   |
|                                                                                                                                                                                                                              |   |                      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest margin *                                                                                                                                                                                                             |   |                      |      |   |   |   |   |   |   |   | 2.91 | % |   |   |   |   |   |   |   |   |   |   | 3.24 | % |
| * Full taxable equivalent basis, using a 34% statutory tax rate.                                                                                                                                                                  |   |                      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ** Non-interest bearing demand accounts are not paid interest. The amount shown as interest reflects the fees paid to affinity groups, which are based upon a rate index, and therefore classified as interest expense. |   |
|                                                                                                                                                                                                                              |

----

----

|                                                    |   | Tier 1 capital |   |   | Tier 1 capital   |   |   | Total capital    |   |
|---------------------------------------------------------|--------|----------------|--------|--------|------------------|--------|--------|------------------|--------|
|                                                    |   | to average     |   |   | to risk-weighted |   |   | to risk-weighted |   |
|                                                    |   | assets ratio   |   |   | assets ratio     |   |   | assets ratio     |   |
|                                                    |   |           |   |   |             |   |   |             |   |
| As of June 30, 2011                                     |   |           |   |   |             |   |   |             |   |
| The Company                                             |   |           | 9.87   | %      |             |   | 14.88  | %                |   |   | 16.14 | % |
| The Bancorp Bank                                        |   |           | 6.89   | %      |             |   | 10.41  | %                |   |   | 11.66 | % |
| "Well capitalized" institution (under FDIC regulations) |   |           | 5.00   | %      |             |   | 6.00   | %                |   |   | 10.00 | % |
|                                                    |   |           |   |   |             |   |   |             |   |   |   |   |
| As of December 31, 2010                                 |   |           |   |   |             |   |   |             |   |   |   |   |
| The Company                                             |   |           | 8.37   | %      |             |   | 11.99  | %                |   |   | 13.24 | % |
| The Bancorp Bank                                        |   |           | 7.39   | %      |             |   | 10.60  | %                |   |   | 11.85 | % |
| "Well capitalized" institution (under FDIC regulations) |   |           | 5.00   | %      |             |   | 6.00   | %                |   |   | 10.00 | % |

----

|                                           |   |  1-90             |      |   |  91-364 |   |     |  1-3 |   |   |  3-5 |   |   | Over 5 |    |
|------------------------------------------------|--------|------------------------|-----------|--------|--------------|--------|----------|-----------|--------|--------|-----------|--------|--------|--------|---------|
|                                           |   | Days                   |      |   | Days         |   |     | Years     |   |   | Years     |   |   | Years  |    |
|                                           |   | (dollars in thousands) |      |
| Interest-earning assets:                       |   |                   |      |   |         |   |     |      |   |   |      |   |   |   |    |   |   |   |   |
| Loans net of deferred loan costs               |   | $                      | 749,703   |   |         | $      | 257,187  |      |   | $      | 348,148   |   |   | $      | 105,592 |   |   | $ | 218,030 |   |
| Investment securities                          |   |                   | 22,872    |   |         |   | 18,590   |      |   |   | 71,184    |   |   |   | 52,014  |   |   |   | 206,541 |   |
| Interest earning deposits                      |   |                   | 199,866   |   |         |   | -        |      |   |   | -         |   |   |   | -       |   |   |   | - |   |
| Total interest-earning assets                  |   |                   | 972,441   |   |         |   | 275,777  |      |   |   | 419,332   |   |   |   | 157,606 |   |   |   | 424,571 |   |
|                                           |   |                   |      |   |         |   |     |      |   |   |      |   |   |   |    |   |   |   |   |   |
| Interest-bearing liabilities:                  |   |                   |      |   |         |   |     |      |   |   |      |   |   |   |    |   |   |   |   |   |
| Demand deposits *                              |   |                   | 651,516   |   |         |   | -        |      |   |   | -         |   |   |   | -       |   |   |   | - |   |
| Interest checking                              |   |                   | 371,849   |   |         |   | 185,924  |      |   |   | 185,924   |   |   |   | -       |   |   |   | - |   |
| Savings and money market                       |   |                   | 83,239    |   |         |   | 166,479  |      |   |   | 83,239    |   |   |   | -       |   |   |   | - |   |
| Time deposits                                  |   |                   | 6,387     |   |         |   | 2,629    |      |   |   | 3,805     |   |   |   | -       |   |   |   | - |   |
| Securities sold under agreements to repurchase |   |                   | 20,258    |   |         |   | -        |      |   |   | -         |   |   |   | -       |   |   |   | - |   |
| Subordinated debt                              |   |                   | 3,401     |   |         |   | -        |      |   |   | -         |   |   |   | 10,000  |   |   |   | - |   |
| Total interest-bearing liabilities             |   |                   | 1,136,650 |   |         |   | 355,032  |      |   |   | 272,968   |   |   |   | 10,000  |   |   |   | - |   |
| Gap                                            |   | $                      | (164,209  | )      |         | $      | (79,255  | )         |   | $      | 146,364   |   |   | $      | 147,606 |   |   | $ | 424,571 |   |
| Cumulative gap                                 |   | $                      | (164,209  | )      |         | $      | (243,464 | )         |   | $      | (97,100   | )      |   | $      | 50,506  |   |   | $ | 475,077 |   |
| Gap to assets ratio                            |   |                   | -7        | %      |         |   | -3       | %         |   |   | 6         | %      |   |   | 6       | % |   |   | 17 | % |
| Cumulative gap to assets ratio                 |   |                   | -7        | %      |         |   | -10      | %         |   |   | -4        | %      |   |   | 2       | % |   |   | 19 | % |

----

|                                                                                                       |   | June 30, |      |   | December 31, |   |
|------------------------------------------------------------------------------------------------------------|--------|----------|-----------|--------|--------------|--------|
|                                                                                                       |   | 2011     |      |   | 2010         |   |
|                                                                                                       |   |     |      |   |         |   |
| Commercial                                                                                                 |   | $        | 450,916   |   |         | $      | 441,799 |   |
| Commercial mortgage (1)                                                                                    |   |     | 593,842   |   |         |   | 580,780 |   |
| Construction                                                                                               |   |     | 205,730   |   |         |   | 203,120 |   |
| Total commercial loans                                                                                     |   |     | 1,250,488 |   |         |   | 1,225,699 |   |
| Direct financing leases, net                                                                               |   |     | 127,016   |   |         |   | 103,289 |   |
| Residential mortgage                                                                                       |   |     | 98,113    |   |         |   | 93,004 |   |
| Consumer loans and others                                                                                  |   |     | 200,132   |   |         |   | 194,320 |   |
|                                                                                                       |   |     | 1,675,749 |   |         |   | 1,616,312 |   |
| Deferred loan costs                                                                                        |   |     | 2,911     |   |         |   | 2,883 |   |
| Total loans, net of deferred loan costs                                                                    |   | $        | 1,678,660 |   |         | $      | 1,619,195 |   |
|                                                                                                       |   |     |      |   |         |   |   |   |
| Supplemental loan data:                                                                                    |   |     |      |   |         |   |   |   |
| Construction 1-4 family                                                                                    |   | $        | 93,422    |   |         | $      | 100,689 |   |
| Construction commercial, acquisition and development                                                       |   |     | 112,308   |   |         |   | 102,431 |   |
|                                                                                                       |   | $        | 205,730   |   |         | $      | 203,120 |   |
|                                                                                                       |   |     |      |   |         |   |   |   |
| (1) At June 30, 2011, our owner occupied loans amounted to $132 million, or 22.2% of commercial mortgages. |   |

----

|                                                  |   |       |    |   | Commercial |   |    |         |   |   | Residential |   |   |     |   |   | Direct financing |   |    |        |   |   |    |   |
|-------------------------------------------------------|--------|------------|---------|--------|------------|--------|---------|--------------|--------|--------|-------------|--------|--------|----------|--------|--------|------------------|--------|---------|-------------|--------|--------|---------|--------|
| Six months ended                                      |   | Commercial |    |   | mortgage   |   |    | Construction |   |   | mortgage    |   |   | Consumer |   |   | leases, net      |   |    | Unallocated |   |   | Total   |   |
| June 30, 2011                                         |   |       |    |   |       |   |    |         |   |   |        |   |   |     |   |   |             |   |    |        |   |   |    |   |
| Beginning balance                                     |   | $          | 6,051   |   |       | $      | 9,501   |         |   | $      | 5,030       |   |   | $        | 2,115  |   |             | $      | 578     |        |   | $      | 164     |   |   | $ | 624 |   |   | $ | 24,063 |   |
| Charge-offs                                           |   |       | (4,702  | )      |       |   | (102    | )            |   |   | (2,496      | )      |   |     | (49    | )      |             |   | (681    | )           |   |   | -       |   |   |   | - |   |   |   | (8,030 | ) |
| Recoveries                                            |   |       | 2       |   |       |   | 13      |         |   |   | 2           |   |   |     | -      |   |             |   | -       |        |   |   | -       |   |   |   | - |   |   |   | 17 |   |
| Provision                                             |   |       | 8,852   |   |       |   | (526    | )            |   |   | 983         |   |   |     | 939    |   |             |   | 1,488   |        |   |   | 78      |   |   |   | (179 | ) |   |   | 11,635 |   |
| Ending balance                                        |   | $          | 10,203  |   |       | $      | 8,886   |         |   | $      | 3,519       |   |   | $        | 3,005  |   |             | $      | 1,385   |        |   | $      | 242     |   |   | $ | 445 |   |   | $ | 27,685 |   |
|                                                  |   |       |    |   |       |   |    |         |   |   |        |   |   |     |   |   |             |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Ending balance: Individually evaluated for impairment |   | $          | 1,674   |   |       | $      | 542     |         |   | $      | 394         |   |   | $        | 2,163  |   |             | $      | 428     |        |   | $      | -       |   |   | $ | - |   |   | $ | 5,201 |   |
|                                                  |   |       |    |   |       |   |    |         |   |   |        |   |   |     |   |   |             |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Ending balance: Collectively evaluated for impairment |   | $          | 8,529   |   |       | $      | 8,344   |         |   | $      | 3,125       |   |   | $        | 842    |   |             | $      | 957     |        |   | $      | 242     |   |   | $ | 445 |   |   | $ | 22,484 |   |
|                                                  |   |       |    |   |       |   |    |         |   |   |        |   |   |     |   |   |             |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
|                                                  |   |       |    |   |       |   |    |         |   |   |        |   |   |     |   |   |             |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Loans:                                                |   |       |    |   |       |   |    |         |   |   |        |   |   |     |   |   |             |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Ending balance                                        |   | $          | 450,916 |   |       | $      | 593,842 |         |   | $      | 205,730     |   |   | $        | 98,113 |   |             | $      | 200,132 |        |   | $      | 127,016 |   |   | $ | 2,911 |   |   | $ | 1,678,660 |   |
|                                                  |   |       |    |   |       |   |    |         |   |   |        |   |   |     |   |   |             |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Ending balance: Individually evaluated for impairment |   | $          | 5,337   |   |       | $      | 2,782   |         |   | $      | 845         |   |   | $        | 9,929  |   |             | $      | 633     |        |   | $      | -       |   |   | $ | - |   |   | $ | 19,526 |   |
|                                                  |   |       |    |   |       |   |    |         |   |   |        |   |   |     |   |   |             |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Ending balance: Collectively evaluated for impairment |   | $          | 445,579 |   |       | $      | 591,060 |         |   | $      | 204,885     |   |   | $        | 88,184 |   |             | $      | 199,499 |        |   | $      | 127,016 |   |   | $ | 2,911 |   |   | $ | 1,659,134 |   |

| Twelve months ended                                   |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |
|-------------------------------------------------------|--------|---------|---------|--------|--------|---------|---------|--------|--------|---------|---------|--------|--------|---------|--------|--------|--------|---------|---------|--------|--------|---------|---------|--------|--------|---------|--------|--------|--------|---------|-----------|--------|
| December 31, 2010                                     |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |
| Beginning balance                                     |   | $       | 5,181   |   |   | $       | 7,041   |   |   | $       | 4,356   |   |   | $       | 1,699  |   |   | $       | 460     |   |   | $       | 151     |   |   | $       | 235    |   |   | $       | 19,123    |   |
| Charge-offs                                           |   |    | (4,453  | )      |   |    | (9,060  | )      |   |    | -       |   |   |    | (1,254 | )      |   |    | (618    | )      |   |    | (3      | )      |   |    | -      |   |   |    | (15,388   | )      |
| Recoveries                                            |   |    | 232     |   |   |    | 47      |   |   |    | 4       |   |   |    | 742    |   |   |    | 6       |   |   |    | 10      |   |   |    | -      |   |   |    | 1,041     |   |
| Provision                                             |   |    | 5,091   |   |   |    | 11,473  |   |   |    | 670     |   |   |    | 928    |   |   |    | 730     |   |   |    | 6       |   |   |    | 389    |   |   |    | 19,287    |   |
| Ending balance                                        |   | $       | 6,051   |   |   | $       | 9,501   |   |   | $       | 5,030   |   |   | $       | 2,115  |   |   | $       | 578     |   |   | $       | 164     |   |   | $       | 624    |   |   | $       | 24,063    |   |
|                                                  |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |
| Ending balance: Individually evaluated for impairment |   | $  | 1,316   |   |   | $  | 284     |   |   | $  | 2,644   |   |   | $  | 970    |   |   | $  | 117     |   |   | $  | -       |   |   | $  | -      |   |   | $  | 5,331     |   |
|                                                  |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |
| Ending balance: Collectively evaluated for impairment |   | $  | 4,735   |   |   | $  | 9,217   |   |   | $  | 2,386   |   |   | $  | 1,145  |   |   | $  | 461     |   |   | $  | 164     |   |   | $  | 624    |   |   | $  | 18,732    |   |
|                                                  |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |
|                                                  |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |
| Loans:                                                |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |
| Ending balance                                        |   | $       | 444,259 |   |   | $       | 580,780 |   |   | $       | 203,120 |   |   | $       | 93,147 |   |   | $       | 194,600 |   |   | $       | 103,289 |   |   | $       | -      |   |   | $       | 1,619,195 |   |
|                                                  |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |
| Ending balance: Individually evaluated for impairment |   | $       | 2,280   |   |   | $       | 1,650   |   |   | $       | 4,881   |   |   | $       | 5,526  |   |   | $       | 960     |   |   | $       | -       |   |   | $       | -      |   |   | $       | 15,297    |   |
|                                                  |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |
| Ending balance: Collectively evaluated for impairment |   | $       | 441,979 |   |   | $       | 579,130 |   |   | $       | 198,239 |   |   | $       | 87,621 |   |   | $       | 193,640 |   |   | $       | 103,289 |   |   | $       | -      |   |   | $       | 1,603,898 |   |
|                                                  |   |    |    |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |    |   |   |    |    |   |   |    |   |   |   |    |      |   |

----

|                                                  |   | Six months endedJune 30, |   |
|-------------------------------------------------------|--------|--------------------------|--------|
|                                                  |   | 2010                     |   |
|                                                  |   |                     |   |
| Balance in the allowance for loan and lease losses at |   |                     |   |
| beginning of period                                   |   | $                        | 19,123 |   |
|                                                  |   |                     |   |   |
| Loans charged-off:                                    |   |                     |   |   |
| Commercial                                            |   |                     | 6,484  |   |
| Construction                                          |   |                     | -      |   |
| Lease financing                                       |   |                     | -      |   |
| Residential mortgage                                  |   |                     | 223    |   |
| Consumer                                              |   |                     | 138    |   |
| Total                                                 |   |                     | 6,845  |   |
|                                                  |   |                     |   |   |
| Recoveries:                                           |   |                     |   |   |
| Commercial                                            |   |                     | 79     |   |
| Construction                                          |   |                     | 3      |   |
| Lease financing                                       |   |                     | -      |   |
| Residential mortgage                                  |   |                     | 16     |   |
| Consumer                                              |   |                     | 6      |   |
| Total                                                 |   |                     | 104    |   |
| Net charge-offs                                       |   |                     | 6,741  |   |
| Provision charged to operations                       |   |                     | 9,954  |   |
| Balance in allowance for loan and lease losses at end |   |                     |   |   |
| of period                                             |   | $                        | 22,336 |   |
| Net charge-offs/average loans                         |   |                     | 0.44   | % |

----

|                                                                            |   | June 30,   |   |   | December 31, |   |
|---------------------------------------------------------------------------------|--------|------------|--------|--------|--------------|--------|
|                                                                            |   | 2011       |   |   | 2010         |   |
|                                                                            |   |       |   |   |         |   |
| Non-accrual loans                                                               |   |       |   |   |         |   |
|           Construction        |   | $          | 845    |   |         | $      | 4,881 |   |
|           Commercial mortgage |   |       | 2,782  |   |         |   | 1,650 |   |
|           Commercial          |   |       | 5,337  |   |         |   | 2,280 |   |
|           Consumer            |   |       | 633    |   |         |   | 960 |   |
|           Residential         |   |       | 9,929  |   |         |   | 5,526 |   |
| Total non-accrual loans                                                         |   |       | 19,526 |   |         |   | 15,297 |   |
|                                                                            |   |       |   |   |         |   |   |   |
| Loans past due 90 days or more                                                  |   |       | 4,397  |   |         |   | 2,220 |   |
| Total non-performing loans                                                      |   |       | 23,923 |   |         |   | 17,517 |   |
| Other real estate owned                                                         |   |       | 3,764  |   |         |   | 2,115 |   |
| Total non-performing assets                                                     |   | $          | 27,687 |   |         | $      | 19,632 |   |
|                                                                            |   |       |   |   |         |   |   |   |
|                                                                            |   |       |   |   |         |   |   |   |
|                                                                            |   | June 30,   |   |   |         |   |   |
|                                                                            |   |  2010 |   |   |         |   |   |
|                                                                            |   |       |   |   |         |   |   |   |
| Non-accrual loans                                                               |   | $          | 18,193 |   |         |   |   |   |
| Loans past due 90 days or more                                                  |   |       | 10,529 |   |         |   |   |   |
| Total non-performing loans                                                      |   |       | 28,722 |   |         |   |   |   |
| Other real estate owned                                                         |   |       | 459    |   |         |   |   |   |
| Total non-performing assets                                                     |   | $          | 29,181 |   |         |   |   |   |
|                                                                            |   |       |   |   |         |   |   |   |

|                          |   | Recordedinvestment |   |   | Unpaidprincipalbalance |   |   | Relatedallowance |   |
|-------------------------------|--------|--------------------|--------|--------|------------------------|--------|--------|------------------|--------|
| June 30, 2011                 |   |               |   |   |                   |   |   |             |   |
| Without an allowance recorded |   |               |   |   |                   |   |   |             |   |
| Construction                  |   | $                  | 251    |   |                   | $      | 1,560  |             |   | $ | - |   |
| Commercial mortgage           |   |               | 774    |   |                   |   | 774    |             |   |   | - |   |
| Commercial                    |   |               | -      |   |                   |   | -      |             |   |   | - |   |
| Consumer                      |   |               | -      |   |                   |   | -      |             |   |   | - |   |
| Residential                   |   |               | -      |   |                   |   | -      |             |   |   | - |   |
| With an allowance recorded    |   |               |   |   |                   |   |   |             |   |   |   |   |
| Construction                  |   |               | 594    |   |                   |   | 594    |             |   |   | 394 |   |
| Commercial mortgage           |   |               | 2,008  |   |                   |   | 2,008  |             |   |   | 542 |   |
| Commercial                    |   |               | 5,337  |   |                   |   | 5,337  |             |   |   | 1,674 |   |
| Consumer - home equity        |   |               | 633    |   |                   |   | 633    |             |   |   | 428 |   |
| Residential                   |   |               | 9,929  |   |                   |   | 10,025 |             |   |   | 2,163 |   |
| Total                         |   |               |   |   |                   |   |   |             |   |   |   |   |
| Construction                  |   | $                  | 845    |   |                   | $      | 2,154  |             |   | $ | 394 |   |
| Commercial                    |   | $                  | 8,119  |   |                   | $      | 8,119  |             |   | $ | 2,216 |   |
| Consumer                      |   | $                  | 633    |   |                   | $      | 633    |             |   | $ | 428 |   |
| Residential                   |   | $                  | 9,929  |   |                   | $      | 10,025 |             |   | $ | 2,163 |   |
|                          |   |               |   |   |                   |   |   |             |   |   |   |   |
| December 31, 2010             |   |               |   |   |                   |   |   |             |   |   |   |   |
| Without an allowance recorded |   |               |   |   |                   |   |   |             |   |   |   |   |
| Commercial mortgage           |   | $                  | -      |   |                   | $      | -      |             |   | $ | - |   |
| Commercial                    |   |               | -      |   |                   |   | -      |             |   |   | - |   |
| Consumer                      |   |               | -      |   |                   |   | -      |             |   |   | - |   |
| Residential                   |   |               | -      |   |                   |   | -      |             |   |   | - |   |
| With an allowance recorded    |   |               |   |   |                   |   |   |             |   |   |   |   |
| Construction                  |   |               | 4,881  |   |                   |   | 4,881  |             |   |   | 2,644 |   |
| Commercial mortgage           |   |               | 1,650  |   |                   |   | 1,650  |             |   |   | 284 |   |
| Commercial                    |   |               | 2,280  |   |                   |   | 2,280  |             |   |   | 1,316 |   |
| Consumer - home equity        |   |               | 960    |   |                   |   | 960    |             |   |   | 117 |   |
| Residential                   |   |               | 5,526  |   |                   |   | 5,622  |             |   |   | 970 |   |
| Total                         |   |               |   |   |                   |   |   |             |   |   |   |   |
| Construction                  |   | $                  | 4,881  |   |                   | $      | 4,881  |             |   | $ | 2,644 |   |
| Commercial                    |   | $                  | 3,930  |   |                   | $      | 3,930  |             |   | $ | 1,600 |   |
| Consumer                      |   | $                  | 960    |   |                   | $      | 960    |             |   | $ | 117 |   |
| Residential                   |   | $                  | 5,526  |   |                   | $      | 5,622  |             |   | $ | 970 |   |

----

|                          |   | Averagerecordedinvestment |   |   | Interestincomerecognized |   |
|-------------------------------|--------|---------------------------|--------|--------|--------------------------|--------|
| June 30, 2011                 |   |                      |   |   |                     |   |
| Without an allowance recorded |   |                      |   |   |                     |   |
| Construction                  |   | $                         | 251    |   |                     | $      | - |   |
| Commercial mortgage           |   |                      | 774    |   |                     |   |   |   |
| Commercial                    |   |                      | -      |   |                     |   | - |   |
| Consumer                      |   |                      | -      |   |                     |   | - |   |
| Residential                   |   |                      | -      |   |                     |   | - |   |
| With an allowance recorded    |   |                      |   |   |                     |   |   |   |
| Construction                  |   |                      | 1,019  |   |                     |   | - |   |
| Commercial mortgage           |   |                      | 2,010  |   |                     |   | - |   |
| Commercial                    |   |                      | 3,941  |   |                     |   | - |   |
| Consumer - home equity        |   |                      | 633    |   |                     |   | - |   |
| Residential                   |   |                      | 8,250  |   |                     |   | - |   |
| Total                         |   |                      |   |   |                     |   |   |   |
| Construction                  |   | $                         | 1,270  |   |                     | $      | - |   |
| Commercial                    |   | $                         | 6,725  |   |                     | $      | - |   |
| Consumer                      |   | $                         | 633    |   |                     | $      | - |   |
| Residential                   |   | $                         | 8,250  |   |                     | $      | - |   |

----

| Age Analysis of Past Due Loans |   |
|--------------------------------|--------|
|                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                           |   | 30-59 Days |   |   | 60-89 Days |   |   | Greater Than |   |   |   |   |   | Total |   |   |   |   |   | Total |   |
| June 30, 2011                  |   | past due |   |   | past due |   |   | 90 days |   |   | Nonaccrual |   |   | past due |   |   | Current |   |   | loans |   |
| Commercial                     |   | $ | 3,351 |   |   | $ | - |   |   | $ | 1,133 |   |   | $ | 5,337 |   |   | $ | 9,821 |   |   | $ | 441,095 |   |   | $ | 450,916 |   |
| Commercial mortgage            |   |   | 2,349 |   |   |   | 1,070 |   |   |   | 824 |   |   |   | 2,782 |   |   |   | 7,025 |   |   |   | 586,817 |   |   |   | 593,842 |   |
| Construction                   |   |   | - |   |   |   | - |   |   |   | 2,366 |   |   |   | 845 |   |   |   | 3,211 |   |   |   | 202,519 |   |   |   | 205,730 |   |
| Direct financing leases, net   |   |   | 1,305 |   |   |   | 52 |   |   |   | 69 |   |   |   | - |   |   |   | 1,426 |   |   |   | 125,590 |   |   |   | 127,016 |   |
| Consumer - other               |   |   | - |   |   |   | 50 |   |   |   | 5 |   |   |   | - |   |   |   | 55 |   |   |   | 155,800 |   |   |   | 155,855 |   |
| Consumer - home equity         |   |   | 330 |   |   |   | 1,012 |   |   |   | - |   |   |   | 633 |   |   |   | 1,975 |   |   |   | 42,302 |   |   |   | 44,277 |   |
| Residential mortgage           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 9,929 |   |   |   | 9,929 |   |   |   | 88,184 |   |   |   | 98,113 |   |
| Unamortized costs              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,911 |   |   |   | 2,911 |   |
|                           |   | $ | 7,335 |   |   | $ | 2,184 |   |   | $ | 4,397 |   |   | $ | 19,526 |   |   | $ | 33,442 |   |   | $ | 1,645,218 |   |   | $ | 1,678,660 |   |
|                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                     |   | $ | - |   |   | $ | 100 |   |   | $ | 285 |   |   | $ | 2,280 |   |   | $ | 2,665 |   |   | $ | 439,134 |   |   | $ | 441,799 |   |
| Commercial mortgage            |   |   | 774 |   |   |   | - |   |   |   | 824 |   |   |   | 1,650 |   |   |   | 3,248 |   |   |   | 577,532 |   |   |   | 580,780 |   |
| Construction                   |   |   | - |   |   |   | 391 |   |   |   | - |   |   |   | 4,881 |   |   |   | 5,272 |   |   |   | 197,848 |   |   |   | 203,120 |   |
| Direct financing leases, net   |   |   | 816 |   |   |   | 192 |   |   |   | 49 |   |   |   | - |   |   |   | 1,057 |   |   |   | 102,232 |   |   |   | 103,289 |   |
| Consumer - other               |   |   | - |   |   |   | 2 |   |   |   | 12 |   |   |   | - |   |   |   | 14 |   |   |   | 148,715 |   |   |   | 148,729 |   |
| Consumer - home equity         |   |   | 330 |   |   |   | - |   |   |   | - |   |   |   | 960 |   |   |   | 1,290 |   |   |   | 44,301 |   |   |   | 45,591 |   |
| Residential mortgage           |   |   | - |   |   |   | - |   |   |   | 1,050 |   |   |   | 5,526 |   |   |   | 6,576 |   |   |   | 86,428 |   |   |   | 93,004 |   |
| Unamortized costs              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,883 |   |   |   | 2,883 |   |
|                           |   | $ | 1,920 |   |   | $ | 685 |   |   | $ | 2,220 |   |   | $ | 15,297 |   |   | $ | 20,122 |   |   | $ | 1,599,073 |   |   | $ | 1,619,195 |   |

|            |   |       |    |   |         |   |    |              |   |             |        |   |
|-----------------|--------|------------|---------|--------|--------------|--------|---------|-------------------|--------|------------------|-------------|--------|
|            |   |       |    |   |         |   |    | Commercial        |   |             | Residential |   |
|            |   | Commercial |    |   | Construction |   |    | mortgage          |   |             | mortgage    |   |
|            |   | 6/30/2011  |    |   | 12/31/2010   |   |    | 6/30/2011         |   |             | 12/31/2010  |   |   | 6/30/2011 |   |   | 12/31/2010 |   |   | 6/30/2011 |   |   | 12/31/2010 |   |
| Risk Rating     |   |       |    |   |         |   |    |              |   |             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pass            |   | $          | 273,480 |   |         | $      | 291,140 |              |   | $                | 166,749     |   |   | $ | 165,089 |   |   | $ | 477,488 |   |   | $ | 461,378 |   |   | $ | 28,183 |   |   | $ | 30,066 |   |
| Special Mention |   |       | 21,450  |   |         |   | -       |              |   |             | -           |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Substandard     |   |       | 9,894   |   |         |   | 6,091   |              |   |             | 5,277       |   |   |   | 5,271 |   |   |   | 4,675 |   |   |   | 3,608 |   |   |   | 9,929 |   |   |   | 6,576 |   |
| Doubtful        |   |       | -       |   |         |   | -       |              |   |             | -           |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Loss            |   |       | -       |   |         |   | -       |              |   |             | -           |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Unrated         |   |       | 146,092 |   |         |   | 144,568 |              |   |             | 33,704      |   |   |   | 32,760 |   |   |   | 111,679 |   |   |   | 115,794 |   |   |   | 60,001 |   |   |   | 56,362 |   |
| Total           |   | $          | 450,916 |   |         | $      | 441,799 |              |   | $                | 205,730     |   |   | $ | 203,120 |   |   | $ | 593,842 |   |   | $ | 580,780 |   |   | $ | 98,113 |   |   | $ | 93,004 |   |
|            |   |       |    |   |         |   |    |              |   |             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            |   |       |    |   |         |   |    |              |   |             |        |   |
|            |   |       |    |   |         |   |    |              |   | Direct financing |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            |   | Consumer   |    |   | leases, net  |   |    | Unamortized costs |   |             | Total       |   |
|            |   | 6/30/2011  |    |   | 12/31/2010   |   |    | 6/30/2011         |   |             | 12/31/2010  |   |   | 6/30/2011 |   |   | 12/31/2010 |   |   | 6/30/2011 |   |   | 12/31/2010 |   |
| Risk Rating     |   |       |    |   |         |   |    |              |   |             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pass            |   | $          | 65,713  |   |         | $      | 59,064  |              |   | $                | 12,000      |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 1,023,613 |   |   | $ | 1,006,737 |   |
| Special Mention |   |       | -       |   |         |   | -       |              |   |             | -           |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 21,450 |   |   |   | - |   |
| Substandard     |   |       | 2,157   |   |         |   | 1,224   |              |   |             | 42          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 31,974 |   |   |   | 22,770 |   |
| Doubtful        |   |       | -       |   |         |   | -       |              |   |             | -           |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Loss            |   |       | -       |   |         |   | -       |              |   |             | -           |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Unrated         |   |       | 132,262 |   |         |   | 134,032 |              |   |             | 114,974     |   |   |   | 103,289 |   |   |   | 2,911 |   |   |   | 2,883 |   |   |   | 601,623 |   |   |   | 589,688 |   |
| Total           |   | $          | 200,132 |   |         | $      | 194,320 |              |   | $                | 127,016     |   |   | $ | 103,289 |   |   | $ | 2,911 |   |   | $ | 2,883 |   |   | $ | 1,678,660 |   |   | $ | 1,619,195 |   |

----

|                            |   | For the six months ended |      |   | For the year ended |   |
|---------------------------------|--------|--------------------------|-----------|--------|--------------------|--------|
|                            |   | June 30, 2011            |      |   | December 31, 2010  |   |
|                            |   | Average                  |      |   | Average            |   |   | Average |   |   | Average |   |
|                            |   | balance                  |      |   | rate               |   |   | balance |   |   | rate |   |
|                            |   | (unaudited)              |      |   |               |   |
| Demand (non-interest bearing) * |   | $                        | 1,434,775 |   |               |   | 0.11 | % |   | $ | 1,011,667 |   |   |   | 0.13 | % |
| Interest checking               |   |                     | 734,463   |   |               |   | 0.81 | % |   |   | 622,116 |   |   |   | 1.27 | % |
| Savings and money market        |   |                     | 328,899   |   |               |   | 0.97 | % |   |   | 311,251 |   |   |   | 1.26 | % |
| Time                            |   |                     | 29,567    |   |               |   | 0.99 | % |   |   | 69,169 |   |   |   | 0.66 | % |
| Total deposits                  |   | $                        | 2,527,704 |   |               |   | 0.43 | % |   | $ | 2,014,203 |   |   |   | 0.67 | % |

| * Non-interest bearing demand accounts are not paid interest.  The amount shown as interest reflects the fees paid to affinity groups, which are based upon a rate index, and therefore classified as interest expense. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                              |

----

Item 

Item 

----

Item 

SIGNATURES

|           | THE BANCORP INC.                      |
|----------------|---------------------------------------|
|           | (Registrant)                          |
|           |                                  |
| August 9, 2011 | /s/ Betsy Z. Cohen                    |
| Date           | Betsy Z. Cohen                        |
|           | Chief Executive Officer               |
|           |                                  |
|           |                                  |
| August 9, 2011 | /s/ Paul Frenkiel                     |
| Date           | Executive Vice President of Strategy, |
|           | Chief Financial Officer and Secretary |
|           |                                  |

----

|             |                                    |   |
|------------------|-----------------------------------------|--------|
| Exhibit No. |  Description                       |
|             |                                    |
| 3.1              | Certificate of Incorporation (1)        |
|             |                                    |
| 3.2              | Bylaws (1)                              |
|             |                                    |
| 31.1             | Rule 13a-14(a)/15d-14(a) Certifications |
|             |                                    |
| 31.2             | Rule 13a-14(a)/15d-14(a) Certifications |
|             |                                    |
| 32.1             | Section 1350 Certifications             |
|             |                                    |
| 32.2             | Section 1350 Certifications             |

| (1) | Filed previously as an exhibit to our Registration Statement on Form S-4, as amended, registration number 333-117385, and by this reference incorporated herein. |
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