----

|                           | Page No.          |
|--------------------------------|-------------------|
| PART I. Financial Information: |              |
|                           | ITEM 1.           | Financial Statements: |   |
|                           |              | Consolidated Condensed Balance Sheets | 3 |
|                           |              | Consolidated Condensed Statements of Operations | 4 |
|                           |              | Consolidated Condensed Statements of Comprehensive Income | 5 |
|                           |              | Consolidated Condensed Statements of Stockholders’ Equity | 6 |
|                           |              | Consolidated Condensed Statements of Cash Flows | 7 |
|                           |              | Notes to Consolidated Condensed Financial Statements | 8 |
|                           | ITEM 2.           | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 23 |
|                           | ITEM 3.           | Quantitative and Qualitative Disclosures About Market Risk | 33 |
|                           | ITEM 4.           | Controls and Procedures | 33 |
| PART II. Other Information:    |              |
|                           | ITEM 1.           | Legal Proceedings | 34 |
|                           | ITEM 1.A.         | Risk Factors | 34 |
|                           | ITEM 2.           | Unregistered Sales of Equity Securities and Use of Proceeds | 34 |
|                           | ITEM 3.           | Defaults Upon Senior Securities | 34 |
|                           | ITEM 4.           | [RESERVED] | 34 |
|                           | ITEM 5.           | Other Information | 34 |
|                      | ITEM 6.           | Exhibits | 35 |
|                           | Signatures        | 36 |
|                           | Index to Exhibits | 37 |

----

| CONSOLIDATED CONDENSED BALANCE SHEETS                                   |   |        |      |   |         |   |
|-------------------------------------------------------------------------|--------|-------------|-----------|--------|--------------|--------|
|                                                                    |   | March 31,   |      |   | December 31, |   |
|                                                                    |   | 2010        |      |   | 2009         |   |
|                                                                    |   | (Unaudited) |      |   |         |   |
| ASSETS                                                                  |   |        |      |   |         |   |
| Cash and due from banks                                                 |   | $           | 52,679    |   |         | $      | 76,801 |   |
| Federal funds sold                                                      |   |        | 7,044     |   |         |   | 102,346 |   |
| Cash and cash equivalents                                               |   |        | 59,723    |   |         |   | 179,147 |   |
| Interest-bearing time deposits                                          |   |        | 157,735   |   |         |   | 74,025 |   |
| Investment securities available for sale                                |   |        | 475,596   |   |         |   | 413,607 |   |
| Investment securities held to maturity                                  |   |        | 163,485   |   |         |   | 149,510 |   |
| Mortgage loans held for sale                                            |   |        | 3,646     |   |         |   | 8,036 |   |
| Loans, net of allowance for loan losses of $88,568 and $92,131          |   |        | 3,045,972 |   |         |   | 3,177,657 |   |
| Premises and equipment                                                  |   |        | 54,431    |   |         |   | 55,804 |   |
| Federal Reserve and Federal Home Loan Bank stock                        |   |        | 36,721    |   |         |   | 38,576 |   |
| Interest receivable                                                     |   |        | 19,532    |   |         |   | 20,818 |   |
| Core deposit intangibles                                                |   |        | 16,175    |   |         |   | 17,383 |   |
| Goodwill                                                                |   |        | 141,357   |   |         |   | 141,357 |   |
| Cash surrender value of life insurance                                  |   |        | 95,146    |   |         |   | 94,636 |   |
| Other real estate owned                                                 |   |        | 18,268    |   |         |   | 14,879 |   |
| Tax asset, deferred and receivable                                      |   |        | 59,190    |   |         |   | 64,394 |   |
| Other assets                                                            |   |        | 28,889    |   |         |   | 31,123 |   |
| TOTAL ASSETS                                                            |   | $           | 4,375,866 |   |         | $      | 4,480,952 |   |
| LIABILITIES                                                             |   |        |      |   |         |   |   |   |
| Deposits:                                                               |   |        |      |   |         |   |   |   |
| Noninterest-bearing                                                     |   | $           | 520,551   |   |         | $      | 516,487 |   |
| Interest-bearing                                                        |   |        | 2,877,235 |   |         |   | 3,020,049 |   |
| Total Deposits                                                          |   |        | 3,397,786 |   |         |   | 3,536,536 |   |
| Borrowings:                                                             |   |        |      |   |         |   |   |   |
| Securities sold under repurchase agreements                             |   |        | 112,826   |   |         |   | 125,687 |   |
| Federal Home Loan Bank advances                                         |   |        | 123,261   |   |         |   | 129,749 |   |
| Subordinated debentures, revolving credit lines and term loans          |   |        | 194,794   |   |         |   | 194,790 |   |
| Total Borrowings                                                        |   |        | 430,881   |   |         |   | 450,226 |   |
| Interest payable                                                        |   |        | 4,812     |   |         |   | 5,711 |   |
| Other liabilities                                                       |   |        | 53,446    |   |         |   | 24,694 |   |
| Total Liabilities                                                       |   |        | 3,886,925 |   |         |   | 4,017,167 |   |
| COMMITMENTS AND CONTINGENT LIABILITIES                                  |   |        |      |   |         |   |   |   |
| STOCKHOLDERS' EQUITY                                                    |   |        |      |   |         |   |   |   |
| Preferred Stock, no-par value:                                          |   |        |      |   |         |   |   |   |
| Authorized -- 500,000 shares                                            |   |        |      |   |         |   |   |   |
| Series A, Issued and outstanding - 116,000 shares                       |   |        | 112,559   |   |         |   | 112,373 |   |
| Cumulative Preferred Stock, $1,000 par value, $1,000 liquidation value: |   |        |      |   |         |   |   |   |
|   Authorized -- 600 shares                                    |   |        |      |   |         |   |   |   |
|   Issued and outstanding -- 125 shares                        |   |        | 125       |   |         |   | 125 |   |
| Common Stock, $.125 stated value:                                       |   |        |      |   |         |   |   |   |
|   Authorized -- 50,000,000 shares                             |   |        |      |   |         |   |   |   |
|   Issued and outstanding - 25,495,550 and 21,227,741 shares   |   |        | 3,187     |   |         |   | 2,653 |   |
| Additional paid-in capital                                              |   |        | 230,764   |   |         |   | 206,600 |   |
| Retained earnings                                                       |   |        | 150,595   |   |         |   | 150,860 |   |
| Accumulated other comprehensive loss                                    |   |        | (8,289    | )      |         |   | (8,826 | ) |
| Total Stockholders' Equity                                              |   |        | 488,941   |   |         |   | 463,785 |   |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                              |   | $           | 4,375,866 |   |         | $      | 4,480,952 |   |

----

| CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS                       |   |               |   |   |   |   |
|-----------------------------------------------------------------------|--------|--------------------|--------|--------|--------|--------|
|                                                                  |   | Three Months Ended |   |
|                                                                  |   | March 31,          |   |
|                                                                  |   | 2010               |   |   | 2009   |   |
| INTEREST INCOME                                                       |   |               |   |   |   |   |
| Loans receivable:                                                     |   |               |   |   |   |   |
| Taxable                                                               |   | $                  | 45,448 |   |   | $      | 53,793 |   |
| Tax exempt                                                            |   |               | 277    |   |   |   | 215 |   |
| Investment securities:                                                |   |               |   |   |   |   |   |   |
| Taxable                                                               |   |               | 2,891  |   |   |   | 3,763 |   |
| Tax exempt                                                            |   |               | 2,646  |   |   |   | 1,769 |   |
| Federal funds sold                                                    |   |               | 17     |   |   |   | 12 |   |
| Deposits with financial institutions                                  |   |               | 60     |   |   |   | 102 |   |
| Federal Reserve and Federal Home Loan Bank stock                      |   |               | 360    |   |   |   | 473 |   |
| Total Interest Income                                                 |   |               | 51,699 |   |   |   | 60,127 |   |
| INTEREST EXPENSE                                                      |   |               |   |   |   |   |   |   |
| Deposits                                                              |   |               | 11,495 |   |   |   | 16,711 |   |
| Federal funds purchased                                               |   |               |   |   |   |   | 22 |   |
| Securities sold under repurchase agreements                           |   |               | 499    |   |   |   | 467 |   |
| Federal Home Loan Bank advances                                       |   |               | 1,564  |   |   |   | 2,949 |   |
| Subordinated debentures, revolving credit lines and term loans        |   |               | 1,926  |   |   |   | 1,479 |   |
| Total Interest Expense                                                |   |               | 15,484 |   |   |   | 21,628 |   |
| NET INTEREST INCOME                                                   |   |               | 36,215 |   |   |   | 38,499 |   |
| Provision for loan losses                                             |   |               | 13,869 |   |   |   | 12,921 |   |
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                   |   |               | 22,346 |   |   |   | 25,578 |   |
| OTHER INCOME                                                          |   |               |   |   |   |   |   |   |
| Service charges on deposit accounts                                   |   |               | 3,262  |   |   |   | 3,542 |   |
| Fiduciary activities                                                  |   |               | 2,060  |   |   |   | 2,059 |   |
| Other customer fees                                                   |   |               | 2,498  |   |   |   | 2,003 |   |
| Commission income                                                     |   |               | 1,989  |   |   |   | 2,059 |   |
| Earnings on cash surrender value of life insurance                    |   |               | 508    |   |   |   | 323 |   |
| Net gains and fees on sales of loans                                  |   |               | 1,149  |   |   |   | 1,430 |   |
| Net realized gains on sales of available for sale securities          |   |               | 1,842  |   |   |   | 2,792 |   |
| Other-than-temporary impairment on available for sale securities      |   |               | (1,179 | )      |   |   | (478 | ) |
| Portion of loss recognized in other comprehensive income before taxes |   |               | 691    |   |   |   |   |   |
| Net impairment losses recognized in earnings                          |   |               | (488   | )      |   |   | (478 | ) |
| Other income                                                          |   |               | 144    |   |   |   | 741 |   |
| Total Other Income                                                    |   |               | 12,964 |   |   |   | 14,471 |   |
| OTHER EXPENSES                                                        |   |               |   |   |   |   |   |   |
| Salaries and employee benefits                                        |   |               | 17,562 |   |   |   | 20,015 |   |
| Net occupancy                                                         |   |               | 2,851  |   |   |   | 2,569 |   |
| Equipment                                                             |   |               | 1,853  |   |   |   | 1,876 |   |
| Marketing                                                             |   |               | 429    |   |   |   | 549 |   |
| Outside data processing fees                                          |   |               | 1,280  |   |   |   | 1,933 |   |
| Printing and office supplies                                          |   |               | 318    |   |   |   | 363 |   |
| Core deposit amortization                                             |   |               | 1,207  |   |   |   | 1,277 |   |
| FDIC assessments                                                      |   |               | 1,722  |   |   |   | 576 |   |
| Other expenses                                                        |   |               | 7,418  |   |   |   | 5,556 |   |
| Total Other Expenses                                                  |   |               | 34,640 |   |   |   | 34,714 |   |
| INCOME BEFORE INCOME TAX                                              |   |               | 670    |   |   |   | 5,335 |   |
| Income tax expense (benefit)                                          |   |               | (916   | )      |   |   | 1,218 |   |
| NET INCOME                                                            |   |               | 1,586  |   |   |   | 4,117 |   |
| Preferred stock dividends and discount accretion                      |   |               | 1,450  |   |   |   | 628 |   |
| NET INCOME AVAILABLE TO COMMON STOCKHOLDERS                           |   | $                  | 136    |   |   | $      | 3,489 |   |
| Per Share Data:                                                       |   |               |   |   |   |   |   |   |
| Basic Net Income Available to Common Stockholders                     |   | $                  | 0.01   |   |   | $      | 0.17 |   |
| Diluted Net Income Available to Common Stockholders                   |   | $                  | 0.01   |   |   | $      | 0.17 |   |
| Cash Dividends Paid                                                   |   | $                  | 0.01   |   |   | $      | 0.23 |   |
| Average Diluted Shares Outstanding (in thousands)                     |   |               | 21,462 |   |   |   | 21,093 |   |

----

|                                                                                       |   | Three Months Ended |   |
|--------------------------------------------------------------------------------------------|--------|--------------------|--------|
|                                                                                       |   | March 31,          |   |
|                                                                                       |   | 2010               |   |   | 2009 |   |
| Net income                                                                                 |   | $                  | 1,586  |   |   | $ | 4,117 |   |
| Other comprehensive income (losses) net of tax:                                            |   |               |   |   |   |   |   |   |
| Unrealized holding gain on securities available for sale arising during the period, net of |   |               |   |   |   |   |   |   |
| income tax expense of $(994) and $(874)                                                    |   |               | 1,846  |   |   |   | 1,622 |   |
| Unrealized loss on securities available for sale for which a                               |   |               |   |   |   |   |   |   |
| portion of an other-than-temporary impairment has been                                     |   |               |   |   |   |   |   |   |
| Recognized in income, net of tax benefit of  $243 and $0                         |   |               | (452   | ) |   |   |   |   |
| Unrealized losses on cash flow hedges:                                                     |   |               |   |   |   |   |   |   |
| Unrealized losses arising during the period, net of                                        |   |               |   |   |   |   |   |   |
|  income tax benefit of $0 and $926                                                    |   |               |   |   |   |   | (1,388 | ) |
| Amortization of items previously recorded in accumulated                                   |   |               |   |   |   |   |   |   |
|  other comprehensive income (losses), net of income tax                               |   |               |   |   |   |   |   |   |
|  (expense) benefit of $(15) and $469                                                  |   |               | 23     |   |   |   | (704 | ) |
| Reclassification adjustment for gains (losses) included in net income                      |   |               |   |   |   |   |   |   |
| net of income tax (expense) benefit of $474 and $(98)                                      |   |               | (880   | ) |   |   | 147 |   |
|                                                                                       |   |               | 537    |   |   |   | (323 | ) |
| Comprehensive income                                                                       |   | $                  | 2,123  |   |   | $ | 3,794 |   |

|                                                                                                                                         |   | March 31, 2010 |    |   | March 31, 2009 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|---------|--------|----------------|--------|
|                                                                                                                                         |   |           |    |   |           |   |
| Net unrealized gain (loss) on securities available for sale                                                                                  |   | $              | 5,140   |   |           | $      | (625 | ) |
|                                                                                                                                         |   |           |    |   |           |   |   |   |
| Net unrealized loss on securities available for sale for which a portion of an other-than-temporary impairment has been recognized in income |   |           | (452    | )      |           |   |   |   |
|                                                                                                                                         |   |           |    |   |           |   |   |   |
| Net unrealized gain on cash flow hedges                                                                                                      |   |           |    |   |           |   | 229 |   |
|                                                                                                                                         |   |           |    |   |           |   |   |   |
| Defined Benefit Plans                                                                                                                        |   |           | (12,977 | )      |           |   | (15,592 | ) |
|                                                                                                                                         |   |           |    |   |           |   |   |   |
| Accumulated other comprehensive income                                                                                                       |   | $              | (8,289  | )      |           | $      | (15,988 | ) |

----

| CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY        |   |      |    |   |   |   |
|------------------------------------------------------------------|--------|-----------|---------|--------|--------|--------|
|                                                             |   | March 31, |    |
|                                                             |   | 2010      |    |   | 2009   |   |
| Balances, January 1                                              |   | $         | 463,785 |   |   | $      | 395,903 |   |
| Net income                                                       |   |      | 1,586   |   |   |   | 4,117 |   |
| Cash dividends on common stock                                   |   |      | (215    | )      |   |   | (4,921 | ) |
| Cash dividends on preferred stock                                |   |      | (1,450  | )      |   |   |   |   |
| Other comprehensive income (loss), net of tax                    |   |      | 537     |   |   |   | (323 | ) |
| Stock issued under employee benefit plan                         |   |      | 164     |   |   |   |   |   |
| Stock issued under dividend reinvestment and stock purchase plan |   |      | 16      |   |   |   | 228 |   |
| Tax benefit (expense) from stock compensation                    |   |      | (48     | )      |   |   | 198 |   |
| Stock redeemed                                                   |   |      | (69     | )      |   |   | (190 | ) |
| Common stock issued                                              |   |      | 24,150  |   |   |   |   |   |
| Adjustment to Issuance of stock related to acquisition           |   |      |    |   |   |   | (3,451 | ) |
| Warrants issued under Capital Purchase Program                   |   |      |    |   |   |   | 4,169 |   |
| Cumulative preferred stock issued under Capital Purchase Program |   |      |    |   |   |   | 111,831 |   |
| Share-based compensation                                         |   |      | 485     |   |   |   | 544 |   |
| Balances, March 31                                               |   | $         | 488,941 |   |   | $      | 508,105 |   |

----

| CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS                                   |   |      |     |   |   |   |
|-----------------------------------------------------------------------------------|--------|-----------|----------|--------|--------|--------|
|                                                                              |   | March 31, |     |
|                                                                              |   | 2010      |     |   | 2009   |   |
| Cash Flow From Operating Activities:                                              |   |      |     |   |   |   |
| Net income                                                                        |   | $         | 1,586    |   |   | $      | 4,117 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |      |     |   |   |   |   |   |
| Provision for loan losses                                                         |   |      | 13,869   |   |   |   | 12,921 |   |
| Depreciation and amortization                                                     |   |      | 1,447    |   |   |   | 1,464 |   |
| Share-based compensation                                                          |   |      | 485      |   |   |   | 544 |   |
| Tax expense (benefit) from stock compensation                                     |   |      | 48       |   |   |   | (198 | ) |
| Mortgage loans originated for sale                                                |   |      | (37,492  | )      |   |   | (59,335 | ) |
| Proceeds from sales of mortgage loans                                             |   |      | 41,882   |   |   |   | 54,971 |   |
| Gains on sales of securities available for sale                                   |   |      | 1,842    |   |   |   | 2,791 |   |
| Recognized loss on other-than-temporary-impairment                                |   |      | (488     | )      |   |   | (477 | ) |
| Change in interest receivable                                                     |   |      | 1,286    |   |   |   | 3,193 |   |
| Change in interest payable                                                        |   |      | (899     | )      |   |   | (566 | ) |
| Other adjustments                                                                 |   |      | 7,294    |   |   |   | (24,211 | ) |
| Net cash provided by (used in) operating activities                               |   | $         | 30,860   |   |   | $      | (4,786 | ) |
| Cash Flows from Investing Activities:                                             |   |      |     |   |   |   |   |   |
| Net change in interest-bearing deposits                                           |   | $         | (83,710  | )      |   | $      | (119,472 | ) |
| Purchases of:                                                                     |   |      |     |   |   |   |   |   |
| Securities available for sale                                                     |   |      | (95,265  | )      |   |   | (32,190 | ) |
| Securities held to maturity                                                       |   |      | (17,120  | )      |   |   | (5,397 | ) |
| Proceeds from sales of securities available for sale                              |   |      | 42,743   |   |   |   | 47,480 |   |
| Proceeds from maturities of:                                                      |   |      |     |   |   |   |   |   |
| Securities available for sale                                                     |   |      | 20,757   |   |   |   | 26,894 |   |
| Securities held to maturity                                                       |   |      | 2,825    |   |   |   | 8,019 |   |
| Change in Federal Reserve and Federal Home Loan Bank stock                        |   |      | 1,855    |   |   |   | (101 | ) |
| Net change in loans                                                               |   |      | 107,709  |   |   |   | 59,347 |   |
| Proceeds from the sale of other real estate owned                                 |   |      | 5,543    |   |   |   | 796 |   |
| Other adjustments                                                                 |   |      | (74      | )      |   |   | (771 | ) |
| Net cash used in investing activities                                             |   | $         | (14,737  | )      |   | $      | (15,395 | ) |
| Cash Flows from Financing Activities:                                             |   |      |     |   |   |   |   |   |
| Net change in :                                                                   |   |      |     |   |   |   |   |   |
| Demand and savings deposits                                                       |   | $         | (41,836  | )      |   | $      | 52,362 |   |
| Certificates of deposit and other time deposits                                   |   |      | (96,914  | )      |   |   | (86,208 | ) |
| Borrowings                                                                        |   |      | 4        |   |   |   | 78,953 |   |
| Repayment of borrowings                                                           |   |      | (19,349  | )      |   |   | (100,839 | ) |
| Cash dividends on common stock                                                    |   |      | (215     | )      |   |   | (4,921 | ) |
| Cash dividends on preferred stock                                                 |   |      | (1,450   | )      |   |   |   |   |
| Stock issued in private equity placement                                          |   |      | 24,150   |   |   |   |   |   |
| Stock issued under dividend reinvestment and stock purchase plans                 |   |      | 180      |   |   |   | 228 |   |
| Cumulative preferred stock issued                                                 |   |      |     |   |   |   | 116,000 |   |
| Tax (expense) benefit from stock options exercised                                |   |      | (48      | )      |   |   | 198 |   |
| Stock redeemed                                                                    |   |      | (69      | )      |   |   | (190 | ) |
| Net cash provided by (used in) financing activities                               |   | $         | (135,547 | )      |   | $      | 55,583 |   |
| Net Change in Cash and Cash Equivalents                                           |   |      | (119,424 | )      |   |   | 35,402 |   |
| Cash and Cash Equivalents, January 1                                              |   |      | 179,147  |   |   |   | 150,486 |   |
| Cash and Cash Equivalents, March 31                                               |   | $         | 59,723   |   |   | $      | 185,888 |   |
| Additional cash flow information:                                                 |   |      |     |   |   |   |   |   |
| Interest paid                                                                     |   | $         | 16,383   |   |   | $      | 22,194 |   |
| Income tax refunded                                                               |   | $         | (6,054   | )      |   |   |   |   |
| Loans transferred to other real estate owned                                      |   | $         | 10,107   |   |   | $      | 4,569 |   |
| Non-cash investing activities using trade date accounting                         |   | $         | 28,308   |   |   | $      | 6,208 |   |

----

----

| Risk-free interest rate                        | 2.38%  |        |
|------------------------------------------------|--------|-------------|
| Expected price volatility                      | 43.54% |        |
| Dividend yield                                 | 4.02%  |        |
| Forfeiture rate                                | 5.00%  |        |
| Weighted-average expected life, until exercise | 6.68   |  years |

|                                                        |   | Three Months Ended |   |
|-------------------------------------------------------------|--------|--------------------|--------|
|                                                        |   | March 31,          |   |
|                                                        |   | 2010               |   |   | 2009 |   |
| Stock and ESPP Options                                      |   |               |   |   |   |   |
| Pre-tax compensation expense                                |   | $                  | 182    |   |   | $ | 209 |   |
| Income tax benefit                                          |   |               | (17    | ) |   |   | (19 | ) |
| Stock and ESPP option expense, net of income taxes          |   | $                  | 165    |   |   | $ | 190 |   |
| Restricted Stock Awards                                     |   |               |   |   |   |   |   |   |
| Pre-tax compensation expense                                |   | $                  | 302    |   |   | $ | 335 |   |
| Income tax benefit                                          |   |               | (106   | ) |   |   | (121 | ) |
| Restricted stock awards expense, net of income taxes        |   | $                  | 196    |   |   | $ | 214 |   |
| Total Share-Based Compensation:                             |   |               |   |   |   |   |   |   |
| Pre-tax compensation expense                                |   | $                  | 485    |   |   | $ | 544 |   |
| Income tax benefit                                          |   |               | (123   | ) |   |   | (140 | ) |
| Total share-based compensation expense, net of income taxes |   | $                  | 362    |   |   | $ | 404 |   |

----

|                                          |   | Number of Shares |      |   | Weighted-Average Exercise Price |   |   | Weighted Average Remaining Contractual Term (in Years) |   |   | Aggregate Intrinsic Value |   |
|-----------------------------------------------|--------|------------------|-----------|--------|---------------------------------|--------|--------|--------------------------------------------------------|--------|--------|---------------------------|--------|
| Outstanding at January 1, 2010                |   |             | 1,087,930 |   |                            | $      | 23.51  |                                                   |   |   |                      |   |   |   |
| Granted                                       |   |             | 35,000    |   |                            | $      | 5.89   |                                                   |   |   |                      |   |   |   |
| Exercised                                     |   |             |      |   |                            |   |   |                                                   |   |   |                      |   |   |   |
| Cancelled                                     |   |             | (12,063   | )      |                            |   | 26.02  |                                                   |   |   |                      |   |   |   |
| Outstanding March 31, 2010                    |   |             | 1,110,867 |   |                            | $      | 22.93  |                                                   |   |   | 5.31                      |   |   |   | 1,750 |   |
| Vested and Expected to Vest at March 31, 2010 |   |             | 1,110,867 |   |                            | $      | 22.93  |                                                   |   |   | 5.31                      |   |   |   | 1,750 |   |
| Exercisable at March 31, 2010                 |   |             | 892,296   |   |                            | $      | 24.70  |                                                   |   |   | 4.41                      |   |   |   | 0 |   |

|                             |   | Number of Shares |    |   | Weighted-Average Grant Date Fair Value |   |
|----------------------------------|--------|------------------|---------|--------|----------------------------------------|--------|
| Unvested RSAs at January 1, 2010 |   |             | 204,091 |   |                                   | $      | 19.95 |   |
| Granted                          |   |             | 107,866 |   |                                   | $      | 5.53 |   |
| Forfeited                        |   |             | (45,102 | )      |                                   | $      | 26.24 |   |
| Vested                           |   |             | (1,668  | )      |                                   | $      | 18.55 |   |
| Unvested RSAs at March 31, 2010  |   |             | 265,187 |   |                                   | $      | 12.76 |   |

----

|                                                               | Asset Derivatives      |   | Liability Derivatives |   |
|--------------------------------------------------------------------|------------------------|--------|-----------------------|--------|
|                                                               | March 31, 2010         |   | December 31, 2009     |   | March 31, 2010 |   | December 31, 2009 |   |
|                                                               | Balance sheet location |   | Fair Value            |   | Balance sheet location |   | Fair Value |   | Balance sheet location |   | Fair Value |   | Balance sheet location |   | Fair Value |   |
|                                                               |                   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives not designated as hedging instruments under ASC 815-10 |                   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate contracts                                            | Other assets           |   | $                     | 2,843  |   | Other assets |   | $ | 2,624 |   |  Other Liabilities |   | $ | (2,873 | ) | Other assets |   | $ | (2,648 | ) |
|                                                               |                   |   | $                     | 2,843  |   |   |   | $ | 2,624 |   |   |   | $ | (2,873 | ) |   |   | $ | (2,648 | ) |

| Derivatives Not Designated as Hedging Instruments under ASC 815-10 | Location of Gain (Loss) Recognized Income on Derivative |   | Amount of Loss Recognized Income on Derivative |   |   | Amount of Gain) Recognized Income on Derivative |   |
|--------------------------------------------------------------------|---------------------------------------------------------|--------|------------------------------------------------|--------|--------|-------------------------------------------------|--------|
|                                                               |                                                    |   | Three Months Ended March 31, 2010              |   |   | Three Months Ended March 31, 2009               |   |
| Interest rate contracts                                            | Other income                                            |   | $                                              | (6     | )      |                                            | $      | 29 |   |

----

----

|                                        |   | Fair Value Measurements Using |    |
|---------------------------------------------|--------|-------------------------------|---------|
|                                        |   | Fair Value                    |    | Quoted Prices in Active Markets for Identical Assets (Level 1) |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
| Available for sale securities:              |   |                          |    |   |   |   |   |   |   |   |
| U.S. Government-sponsored agency securities |   | $                             | 4,407   |   |   |   | $ | 4,407 |   |   |   |   |
| State and municipal                         |   |                          | 239,719 |   |   |   |   | 239,719 |   |   |   |   |
| Mortgage-backed securities                  |   |                          | 228,250 |   |   |   |   | 228,250 |   |   |   |   |
| Corporate obligations                       |   |                          | 1,390   |   |   |   |   |   |   |   | $ | 1,390 |   |
| Equity securities                           |   |                          | 1,830   |   |   |   |   | 1,826 |   |   |   | 4 |   |
| Interest rate swap asset                    |   |                          | 2,843   |   |   |   |   |   |   |   |   | 2,843 |   |
| Interest rate swap liability                |   |                          | (2,873  | ) |   |   |   |   |   |   |   | (2,873 | ) |

|                                        |   | Fair Value Measurements Using |    |
|---------------------------------------------|--------|-------------------------------|---------|
|                                        |   | Fair Value                    |    | Quoted Prices in Active Markets for Identical Assets (Level 1) |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
| Available for sale securities:              |   |                          |    |   |   |   |   |   |   |   |
| U.S. Government-sponsored agency securities |   | $                             | 4,406   |   |   |   | $ | 4,406 |   |   |   |   |
| State and municipal                         |   |                          | 246,231 |   |   |   |   | 246,231 |   |   |   |   |
| Mortgage-backed securities                  |   |                          | 155,978 |   |   |   |   | 155,978 |   |   |   |   |
| Corporate obligations                       |   |                          | 5,162   |   |   |   |   | 2,683 |   |   | $ | 2,479 |   |
| Equity securities                           |   |                          | 1,830   |   |   |   |   | 1,826 |   |   |   | 4 |   |
| Interest rate swap asset                    |   |                          | 2,624   |   |   |   |   |   |   |   |   | 2,624 |   |
| Interest rate swap liability                |   |                          | (2,648  | ) |   |   |   |   |   |   |   | (2,648 | ) |

----

|                                            |   | Three Months Ended March 31, 2010 |   |
|-------------------------------------------------|--------|-----------------------------------|--------|
|                                            |   | Available for Sale Securities     |   |   | Interest Rate Swap Asset |   |   | Interest Rate Swap Liability |   |
| Balance at beginning of the period              |   | $                                 | 2,483  |   |   | $ | 2,624 |   |   | $ | (2,648 | ) |
| Total realized and unrealized gains and losses: |   |                              |   |   |   |   |   |   |   |   |   |   |
| Included in net income (loss)                   |   |                              | (488   | ) |   |   | 219 |   |   |   | (225 | ) |
| Included in other comprehensive income          |   |                              | (669   | ) |   |   |   |   |   |   |   |   |
| Purchases, issuances and settlements            |   |                              |   |   |   |   |   |   |   |   |   |   |
| Transfers in/(out) of Level 3                   |   |                              |   |   |   |   |   |   |   |   |   |   |
| Principal payments                              |   |                              | 68     |   |   |   |   |   |   |   |   |   |
| Ending balance at March 31, 2010                |   | $                                 | 1,394  |   |   | $ | 2,843 |   |   | $ | (2,873 | ) |

|                                            |   | Three Months Ended March 31, 2009 |   |
|-------------------------------------------------|--------|-----------------------------------|--------|
|                                            |   | Available for Sale Securities     |   |   | Interest Rate Swap Asset |   |   | Interest Rate Swap Liability |   |
| Balance at beginning of the period              |   | $                                 | 7,929  |   |   | $ | 4,094 |   |   | $ | (4,224 | ) |
| Total realized and unrealized gains and losses: |   |                              |   |   |   |   |   |   |   |   |   |   |
| Included in net income (loss)                   |   |                              | (477   | ) |   |   | (222 | ) |   |   | 251 |   |
| Included in other comprehensive income          |   |                              | (2,528 | ) |   |   |   |   |   |   |   |   |
| Purchases, issuances and settlements            |   |                              |   |   |   |   |   |   |   |   |   |   |
| Transfers in/(out) of Level 3                   |   |                              | (3,460 | ) |   |   |   |   |   |   |   |   |
| Principal payments                              |   |                              | 86     |   |   |   |   |   |   |   |   |   |
| Ending balance at March 31, 2009                |   | $                                 | 1,550  |   |   | $ | 3,872 |   |   | $ | (3,973 | ) |

|                                  |   | Fair Value Measurements Using |   |
|---------------------------------------|--------|-------------------------------|--------|
| March 31, 2010                        |   | Fair Value                    |   | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) |   | Significant Unobservable Inputs (Level 3) |   |
| Impaired loans (collateral dependent) |   | $                             | 40,178 |   |   |   |   | $ | 40,178 |   |
| Other real estate owned               |   | $                             | 489    |   |   |   |   | $ | 489 |   |

|                                  |   | Fair Value Measurements Using |   |
|---------------------------------------|--------|-------------------------------|--------|
| December 31, 2009                     |   | Fair Value                    |   | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) |   | Significant Unobservable Inputs (Level 3) |   |
| Impaired loans (collateral dependent) |   | $                             | 75,802 |   |   |   |   | $ | 75,802 |   |
| Other real estate owned               |   | $                             | 5,193  |   |   |   |   | $ | 5,193 |   |

----

|                                                           |   | March 31, 2010  |      |
|----------------------------------------------------------------|--------|-----------------|-----------|
|                                                           |   | Carrying Amount |      |   | Fair Value |   |
| Assets at March 31, 2010:                                      |   |            |      |   |   |   |
| Cash and due from banks                                        |   | $               | 59,723    |   |   | $ | 59,723 |   |
| Interest-bearing time deposits                                 |   |            | 157,735   |   |   |   | 157,735 |   |
| Investment securities available for sale                       |   |            | 475,596   |   |   |   | 475,596 |   |
| Investment securities held to maturity                         |   |            | 163,485   |   |   |   | 163,350 |   |
| Mortgage loans held for sale                                   |   |            | 3,646     |   |   |   | 3,646 |   |
| Loans                                                          |   |            | 3,045,972 |   |   |   | 3,004,778 |   |
| FRB and FHLB stock                                             |   |            | 36,721    |   |   |   | 36,721 |   |
| Interest receivable                                            |   |            | 19,532    |   |   |   | 19,532 |   |
|                                                           |   |            |      |   |   |   |   |   |
| Liabilities at March 31, 2010:                                 |   |            |      |   |   |   |   |   |
| Deposits                                                       |   | $               | 3,397,786 |   |   | $ | 3,415,297 |   |
| Borrowings:                                                    |   |            |      |   |   |   |   |   |
| Securities sold under repurchase agreements                    |   |            | 112,826   |   |   |   | 113,276 |   |
| Federal Home Loan Bank advances                                |   |            | 123,261   |   |   |   | 129,806 |   |
| Subordinated debentures, revolving credit lines and term loans |   |            | 194,794   |   |   |   | 151,438 |   |
| Interest Payable                                               |   |            | 4,812     |   |   |   | 4,812 |   |

----

|                                        |   | Amortized Cost |    |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   | Fair Value |   |
|---------------------------------------------|--------|----------------|---------|--------|------------------------|--------|--------|-------------------------|--------|--------|------------|--------|
| Available for sale at March 31, 2010        |   |           |    |   |                   |   |   |                    |   |   |       |   |
| U.S. Government-sponsored agency securities |   | $              | 4,344   |   |                   | $      | 63     |                    |   |   |       |   | $ | 4,407 |   |
| State and municipal                         |   |           | 229,968 |   |                   |   | 9,795  |                    |   | $      | (44        | )      |   |   | 239,719 |   |
| Mortgage-backed securities                  |   |           | 225,589 |   |                   |   | 2,847  |                    |   |   | (186       | )      |   |   | 228,250 |   |
| Corporate Obligations                       |   |           | 6,651   |   |                   |   |   |                    |   |   | (5,261     | )      |   |   | 1,390 |   |
| Equity securities                           |   |           | 1,830   |   |                   |   |   |                    |   |   |       |   |   |   | 1,830 |   |
| Total available for sale                    |   |           | 468,382 |   |                   |   | 12,705 |                    |   |   | (5,491     | )      |   |   | 475,596 |   |
| Held to maturity at March 31, 2010          |   |           |    |   |                   |   |   |                    |   |   |       |   |   |   |   |   |
| State and municipal                         |   |           | 17,495  |   |                   |   | 382    |                    |   |   |       |   |   |   | 17,877 |   |
| Mortgage-backed securities                  |   |           | 145,990 |   |                   |   | 184    |                    |   |   | (701       | )      |   |   | 145,473 |   |
| Total held to maturity                      |   |           | 163,485 |   |                   |   | 566    |                    |   |   | (701       | )      |   |   | 163,350 |   |
| Total Investment Securities                 |   | $              | 631,867 |   |                   | $      | 13,271 |                    |   | $      | (6,192     | )      |   |   | 638,946 |   |

----

|                                        |   | Amortized Cost |    |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   | Fair Value |   |
|---------------------------------------------|--------|----------------|---------|--------|------------------------|--------|--------|-------------------------|--------|--------|------------|--------|
| Available for sale at December 31, 2009     |   |           |    |   |                   |   |   |                    |   |   |       |   |
| U.S. Government-sponsored agency securities |   | $              | 4,350   |   |                   | $      | 56     |                    |   |   |       |   | $ | 4,406 |   |
| State and municipal                         |   |           | 236,933 |   |                   |   | 9,307  |                    |   | $      | (9         | )      |   |   | 246,231 |   |
| Mortgage-backed securities                  |   |           | 154,488 |   |                   |   | 2,321  |                    |   |   | (831       | )      |   |   | 155,978 |   |
| Corporate Obligations                       |   |           | 9,585   |   |                   |   | 310    |                    |   |   | (4,733     | )      |   |   | 5,162 |   |
| Equity securities                           |   |           | 1,830   |   |                   |   |   |                    |   |   |       |   |   |   | 1,830 |   |
| Total available for sale                    |   |           | 407,186 |   |                   |   | 11,994 |                    |   |   | (5,573     | )      |   |   | 413,607 |   |
| Held to maturity at December 31, 2009       |   |           |    |   |                   |   |   |                    |   |   |       |   |   |   |   |   |
| State and municipal                         |   |           | 15,990  |   |                   |   | 327    |                    |   |   | (13        | )      |   |   | 16,304 |   |
| Mortgage-backed securities                  |   |           | 133,520 |   |                   |   |   |                    |   |   | (2,488     | )      |   |   | 131,032 |   |
| Total held to maturity                      |   |           | 149,510 |   |                   |   | 327    |                    |   |   | (2,501     | )      |   |   | 147,336 |   |
| Total Investment Securities                 |   | $              | 556,696 |   |                   | $      | 12,321 |                    |   | $      | (8,074     | )      |   |   | 560,943 |   |

|                                     |   | Available for Sale |    |   | Held to Maturity |   |
|------------------------------------------|--------|--------------------|---------|--------|------------------|--------|
|                                     |   | Amortized Cost     |    |   | Fair Value       |   |   | Amortized Cost |   |   | Fair Value |   |
| Maturity Distribution at March 31, 2010: |   |               |    |   |             |   |   |   |   |   |   |   |
| Due in one year or less                  |   | $                  | 13,084  |   |             | $      | 13,205 |   |   | $ | 9,147 |   |   | $ | 9,193 |   |
| Due after one through five years         |   |               | 36,100  |   |             |   | 37,677 |   |   |   | 535 |   |   |   | 568 |   |
| Due after five through ten years         |   |               | 35,454  |   |             |   | 37,356 |   |   |   | 3,643 |   |   |   | 3,716 |   |
| Due after ten years                      |   |               | 156,325 |   |             |   | 157,278 |   |   |   | 4,170 |   |   |   | 4,400 |   |
|                                     |   | $                  | 240,963 |   |             | $      | 245,516 |   |   | $ | 17,495 |   |   | $ | 17,877 |   |
|                                     |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities               |   |               | 225,589 |   |             |   | 228,250 |   |   |   | 145,990 |   |   |   | 145,473 |   |
| Equity securities                        |   |               | 1,830   |   |             |   | 1,830 |   |   |   |   |   |   |   |   |   |
|                                     |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Total Investment Securities              |   | $                  | 468,382 |   |             | $      | 475,596 |   |   | $ | 163,485 |   |   | $ | 163,350 |   |

----

|                                             |   | Fair Value               |    |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |   |
|--------------------------------------------------|--------|--------------------------|---------|--------|-------------------------|--------|--------|------------|--------|--------|-------------------------|--------|--------|------------|--------|--------|-------------------------|--------|
|                                             |   | Less than 12 Months |    |   | 12 Months or Longer     |   |   | Total      |   |
| Temporarily Impaired Investment                  |   |                     |    |   |                    |   |   |       |   |   |                    |   |   |       |   |   |                    |   |
| Securities at March 31, 2010                     |   |                     |    |   |                    |   |   |       |   |   |                    |   |   |       |   |   |                    |   |
| State and municipal                              |   | $                        | 8,649   |   |                    | $      | (44    | )          |   |   |                    |   |   |       |   | $      | 8,649                   |   |   | $ | (44 | ) |
| Mortgage-backed securities                       |   |                     | 152,246 |   |                    |   | (883   | )          |   | $      | 957                     |   |   | $          | (4     | )      |                    |   | 153,203 |   |   |   | (887 | ) |
| Corporate obligations                            |   |                     | 42      |   |                    |   | (773   | )          |   |   | 1,318                   |   |   |       | (4,488 | )      |                    |   | 1,360 |   |   |   | (5,261 | ) |
| Total Temporarily Impaired Investment Securities |   | $                        | 60,937  |   |                    | $      | (1,700 | )          |   | $      | 2,275                   |   |   | $          | (4,492 | )      |                    | $      | 163,212 |   |   | $ | (6,192 | ) |

|                                             |   | Fair Value               |    |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |   |
|--------------------------------------------------|--------|--------------------------|---------|--------|-------------------------|--------|--------|------------|--------|--------|-------------------------|--------|--------|------------|--------|--------|-------------------------|--------|
|                                             |   | Less than 12 Months |    |   | 12 Months or Longer     |   |   | Total      |   |
| Temporarily Impaired Investment                  |   |                     |    |   |                    |   |   |       |   |   |                    |   |   |       |   |   |                    |   |
| Securities at December 31, 2009                  |   |                     |    |   |                    |   |   |       |   |   |                    |   |   |       |   |   |                    |   |
| State and municipal                              |   | $                        | 7,813   |   |                    | $      | (20    | )          |   | $      | 138                     |   |   | $          | (2     | )      |                    | $      | 7,951 |   |   | $ | (22 | ) |
| Mortgage-backed securities                       |   |                     | 171,779 |   |                    |   | (3,319 | )          |   |   |                    |   |   |       |   |   |                    |   | 171,779 |   |   |   | (3,319 | ) |
| Corporate obligations                            |   |                     | 1,125   |   |                    |   | (656   | )          |   |   | 1,183                   |   |   |       | (4,077 | )      |                    |   | 2,308 |   |   |   | (4,733 | ) |
| Total Temporarily Impaired Investment Securities |   | $                        | 180,717 |   |                    | $      | (3,995 | )          |   | $      | 1,321                   |   |   | $          | (4,079 | )      |                    | $      | 182,038 |   |   | $ | (8,074 | ) |

----

|                                                                       |   | Accumulated Credit Losses in 2010 |   |   | Accumulated Credit Losses in 2009 |   |
|----------------------------------------------------------------------------|--------|-----------------------------------|--------|--------|-----------------------------------|--------|
| Credit losses on debt securities held:                                     |   |                              |   |   |                              |   |
| Balance, January 1                                                         |   | $                                 | 9,411  |   |                              | $      | 2,682 |   |
| Additions related to other-than-temporary losses not previously recognized |   |                              | 488    |   |                              |   | 477 |   |
| Balance, March 31                                                          |   | $                                 | 9,899  |   |                              | $      | 3,159 |   |

----

|                                                             |   | March 31, |      |   | December 31, |   |
|------------------------------------------------------------------|--------|-----------|-----------|--------|--------------|--------|
|                                                             |   | 2010      |      |   | 2009         |   |
| Loans:                                                           |   |      |      |   |         |   |
| Commercial and industrial loans                                  |   | $         | 621,591   |   |         | $      | 675,860 |   |
| Agricultural production financing and other loans to farmers     |   |      | 109,457   |   |         |   | 121,031 |   |
| Real estate loans                                                |   |      |      |   |         |   |   |   |
| Construction                                                     |   |      | 131,548   |   |         |   | 158,725 |   |
| Commercial and farm land                                         |   |      | 1,259,588 |   |         |   | 1,254,115 |   |
| Residential                                                      |   |      | 821,014   |   |         |   | 841,584 |   |
| Individual's loans for household and other personal expenditures |   |      | 142,108   |   |         |   | 154,132 |   |
| Tax-exempt loans                                                 |   |      | 23,047    |   |         |   | 22,049 |   |
| Lease financing receivables, net of unearned income              |   |      | 6,396     |   |         |   | 7,135 |   |
| Other loans                                                      |   |      | 19,791    |   |         |   | 35,157 |   |
|                                                             |   |      | 3,134,540 |   |         |   | 3,269,788 |   |
| Allowance for loan losses                                        |   |      | (88,568   | )      |         |   | (92,131 | ) |
| Total Loans                                                      |   | $         | 3,045,972 |   |         | $      | 3,177,657 |   |

|                              |   | Three Months Ended |    |
|-----------------------------------|--------|--------------------|---------|
|                              |   | March 31,          |    |
|                              |   | 2010               |    |   | 2009 |   |
| Allowance for loan losses:        |   |               |    |   |   |   |
| Balances, January 1               |   | $                  | 92,131  |   |   | $ | 49,543 |   |
| Provision for losses              |   |               | 13,869  |   |   |   | 12,921 |   |
| Adjustment related to acquisition |   |               |    |   |   |   | 2,040 |   |
| Recoveries on loans               |   |               | 832     |   |   |   | 688 |   |
| Loans charged off                 |   |               | (18,264 | ) |   |   | (6,690 | ) |
| Balances, March 31                |   | $                  | 88,568  |   |   | $ | 58,502 |   |

|                                     |   | March 31, |    |   | December 31, |   |
|------------------------------------------|--------|-----------|---------|--------|--------------|--------|
|                                     |   | 2010      |    |   | 2009         |   |
| Non-Performing Assets:                   |   |      |    |   |         |   |
| Non-accrual loans                        |   | $         | 122,891 |   |         | $      | 118,409 |   |
| Renegotiated loans                       |   |      | 859     |   |         |   | 8,833 |   |
| Non-performing loans (NPL)               |   |      | 123,750 |   |         |   | 127,242 |   |
| Real estate owned and repossessed assets |   |      | 18,268  |   |         |   | 14,879 |   |
| Non-performing assets (NPA)              |   |      | 142,018 |   |         |   | 142,121 |   |
| 90+ days delinquent and still accruing   |   |      | 2,600   |   |         |   | 3,967 |   |
| NPAS & 90+ days delinquent           |   | $         | 144,618 |   |         | $      | 146,088 |   |
| Impaired Loans                           |   | $         | 157,391 |   |         | $      | 178,754 |   |

----

|                                                                |   | Three Months Ended March 31, |   |
|---------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                |   | 2010                         |   |   | 2009 |   |
|                                                                |   | Net Income                   |   |   | Weighted-Average Shares |   |   | Per Share Amount |   |   | Net Income |   |   | Weighted-Average Shares |   |   | Per Share Amount |   |
| Basic net income per share:                                         |   | $                            | 1,586  |   |   |   |   |   |   |   |   | $ | 4,117 |   |   |   |   |   |   |   |
| Less: Preferred stock dividends                                     |   |                         | 1,450  |   |   |   |   |   |   |   |   |   | 628 |   |   |   |   |   |   |   |
| Net income available to common stockholders                         |   |                         | 136    |   |   |   | 21,373,405 |   |   | $ | 0.01 |   |   |   | 3,489 |   |   |   | 21,022,505 |   |   | $ | 0.17 |   |
| Effect of dilutive stock options and warrants                       |   |                         |   |   |   |   | 88,770 |   |   |   |   |   |   |   |   |   |   |   | 70,862 |   |   |   |   |   |
| Diluted net income per share:                                       |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income available to common stockholders and assumed conversions |   | $                            | 136    |   |   |   | 21,462,175 |   |   | $ | 0.01 |   |   | $ | 3,489 |   |   |   | 21,093,367 |   |   | $ | 0.17 |   |

----

----

GEMENT’

|   | • | statements of our goals, intentions and expectations; |
|--------|---------|-------------------------------------------------------|

|   | • | statements regarding our business plan and growth strategies; |
|--------|---------|---------------------------------------------------------------|

|   | • | statements regarding the asset quality of our loan and investment portfolios; and |
|--------|---------|-----------------------------------------------------------------------------------|

|   | • | estimates of our risks and future costs and benefits. |
|--------|---------|-------------------------------------------------------|

|   | • | fluctuations in market rates of interest and loan and deposit pricing, which could negatively affect our net interest margin, asset valuations and expense expectations; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | adverse changes in the economy, which might affect our business prospects and could cause credit-related losses and expenses; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------|

|   | • | adverse developments in our loan and investment portfolios; |
|--------|---------|-------------------------------------------------------------|

|   | • | competitive factors in the banking industry, such as the trend towards consolidation in our market; |
|--------|---------|-----------------------------------------------------------------------------------------------------|

|   | • | changes in the banking legislation or the regulatory requirements of federal and state agencies applicable to bank holding companies and banks like our affiliate banks; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | acquisitions of other businesses by us and integration of such acquired businesses; |
|--------|---------|-------------------------------------------------------------------------------------|

|   | • | changes in market, economic, operational, liquidity, credit and interest rate risks  associated  with our business; and |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | the continued availability of earnings and excess capital sufficient for the lawful and prudent declaration and payment of cash dividends. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                               |   | Three Months Ended |      |
|--------------------------------------------------------------------|--------|--------------------|-----------|
|                                                               |   | March 31,          |      |
| (Dollars in Thousands)                                             |   | 2010               |      |   | 2009 |   |
| Annualized net interest income                                     |   | $                  | 144,859   |   |   | $ | 153,999 |   |
| Annualized FTE adjustment                                          |   | $                  | 6,295     |   |   | $ | 4,274 |   |
| Annualized net interest income on a fully taxable equivalent basis |   | $                  | 151,154   |   |   | $ | 158,273 |   |
| Average earning assets                                             |   | $                  | 3,955,515 |   |   | $ | 4,298,621 |   |
| Interest income (FTE) as a percent of average earning assets       |   |               | 5.39      | % |   |   | 5.69 | % |
| Interest expense as a percent of average earning assets            |   |               | 1.57      | % |   |   | 2.01 | % |
| Net interest income (FTE) as a percent of average earning assets   |   |               | 3.82      | % |   |   | 3.68 | % |

----

----

|                                                                         |   | March 31, |      |   | December 31, |   |
|------------------------------------------------------------------------------|--------|-----------|-----------|--------|--------------|--------|
| (Dollars in thousands, except per share amounts)                             |   | 2010      |      |   | 2009         |   |
| Average goodwill                                                             |   | $         | 141,357   |   |         | $      | 141,238 |   |
| Average core deposit intangible (CDI)                                        |   |      | 16,818    |   |         |   | 19,878 |   |
| Average deferred tax on CDI                                                  |   |      | (3,730    | )      |         |   | (2,494 | ) |
| Intangible adjustment                                                        |   | $         | 154,445   |   |         | $      | 158,622 |   |
| Average stockholders' equity (GAAP capital)                                  |   | $         | 466,994   |   |         | $      | 477,148 |   |
| Average cumulative preferred stock issued under the Capital Purchase Program |   |      | (112,455  | )      |         |   | (96,518 | ) |
| Intangible adjustment                                                        |   |      | (154,445  | )      |         |   | (158,622 | ) |
| Average tangible capital                                                     |   | $         | 200,094   |   |         | $      | 222,008 |   |
| Average assets                                                               |   | $         | 4,363,768 |   |         | $      | 4,674,590 |   |
| Intangible adjustment                                                        |   |      | (154,445  | )      |         |   | (158,622 | ) |
| Average tangible assets                                                      |   | $         | 4,209,323 |   |         | $      | 4,515,968 |   |
| Net income (loss) available to common stockholders                           |   | $         | 136       |   |         | $      | (45,742 | ) |
| CDI amortization, net of tax                                                 |   |      | 730       |   |         |   | 3,097 |   |
| Tangible net income (loss) available to common stockholders                  |   | $         | 866       |   |         | $      | (42,645 | ) |
| Diluted earnings per share                                                   |   | $         | 0.01      |   |         | $      | (2.17 | ) |
| Diluted tangible earnings per share                                          |   | $         | 0.04      |   |         | $      | (2.02 | ) |
| Return on average GAAP capital                                               |   |      | 0.12      | %      |         |   | -9.59 | % |
| Return on average tangible capital                                           |   |      | 1.73      | %      |         |   | -19.21 | % |
| Return on average assets                                                     |   |      | 0.01      | %      |         |   | -0.98 | % |
| Return on average tangible assets                                            |   |      | 0.08      | %      |         |   | -0.94 | % |

----

|                                     |   | March 31, |    |   | December 31, |   |
|------------------------------------------|--------|-----------|---------|--------|--------------|--------|
| (Dollars in Thousands)                   |   | 2010      |    |   | 2009         |   |
| Non-Performing Assets:                   |   |      |    |   |         |   |
| Non-accrual loans                        |   | $         | 122,891 |   |         | $      | 118,409 |   |
| Renegotiated loans                       |   |      | 859     |   |         |   | 8,833 |   |
| Non-performing loans (NPL)               |   |      | 123,750 |   |         |   | 127,242 |   |
| Real estate owned and repossessed assets |   |      | 18,268  |   |         |   | 14,879 |   |
| Non-performing assets (NPA)              |   |      | 142,018 |   |         |   | 142,121 |   |
| 90+ days delinquent and still accruing   |   |      | 2,600   |   |         |   | 3,967 |   |
| NPAS & 90+ days delinquent           |   | $         | 144,618 |   |         | $      | 146,088 |   |
| Impaired Loans                           |   | $         | 157,391 |   |         | $      | 178,754 |   |

| (Dollars in Thousands)                      |   | Commercial & Industrial |   |   | Commercial Mortgage |   |    | Land and Lot |   |   | Agriculture |   |   | Total Commercial |   |   | Residential Mortgage |   |    | Home Equity |   |   | Other Consumer |   |   | Total Consumer |   |   | Total Consumer & Commercial |   |
|---------------------------------------------|--------|-----------------------------|--------|--------|---------------------|--------|---------|--------------|--------|--------|-------------|--------|--------|------------------|--------|--------|----------------------|--------|---------|-------------|--------|--------|----------------|--------|--------|----------------|--------|--------|---------------------------------|--------|
| Loan Balances including Loans Held for Sale |   | $                           | 642.3  |   |                | $      | 1,132.1 |         |   | $      | 131.5       |   |   | $                | 260.0  |   |                 | $      | 2,165.9 |        |   | $      | 604.6          |   |   | $              | 220.0  |   |                            | $      | 147.6 |   |   | $ | 972.3 |   |   | $ | 3,138.2 |   |
| % of Total                                  |   |                        | 20.5   | %      |                |   | 36.1    | %            |   |   | 4.1         | %      |   |             | 8.3    | %      |                 |   | 69.0    | %           |   |   | 19.3           | %      |   |           | 7.0    | %      |                            |   | 4.7 | % |   |   | 31.0 | % |   |   |   |   |
| Non-Accrual Loans                           |   | $                           | 23.7   |   |                | $      | 54.4    |         |   | $      | 13.5        |   |   | $                | 6.2    |   |                 | $      | 97.7    |        |   | $      | 23.4           |   |   | $              | 1.7    |   |                            | $      | 0.1 |   |   | $ | 25.2 |   |   | $ | 122.9 |   |
| Non-accrual ratio                           |   |                        | 3.68   | %      |                |   | 4.80    | %            |   |   | 10.25       | %      |   |             | 2.38   | %      |                 |   | 4.51    | %           |   |   | 3.86           | %      |   |           | 0.79   | %      |                            |   | 0.06 | % |   |   | 2.59 | % |   |   | 3.92 | % |

----

| (Dollars in Thousands)                      |   | Commercial & Industrial |   |   | Commercial Mortgage |   |    | Land and Lot |   |   | Agriculture |   |   | Total Commercial |   |   | Residential Mortgage |   |    | Home Equity |   |   | Other Consumer |   |   | Total Consumer |   |   | Total Consumer & Commercial |   |
|---------------------------------------------|--------|-----------------------------|--------|--------|---------------------|--------|---------|--------------|--------|--------|-------------|--------|--------|------------------|--------|--------|----------------------|--------|---------|-------------|--------|--------|----------------|--------|--------|----------------|--------|--------|---------------------------------|--------|
| Loan Balances including Loans Held for Sale |   | $                           | 642.3  |   |                | $      | 1,132.1 |         |   | $      | 131.5       |   |   | $                | 260.0  |   |                 | $      | 2,165.9 |        |   | $      | 604.6          |   |   | $              | 220.0  |   |                            | $      | 147.6 |   |   | $ | 972.3 |   |   | $ | 3,138.2 |   |
| % of Total                                  |   |                        | 20.5   | %      |                |   | 36.1    | %            |   |   | 4.1         | %      |   |             | 8.3    | %      |                 |   | 69.0    | %           |   |   | 19.3           | %      |   |           | 7.0    | %      |                            |   | 4.7 | % |   |   | 31.0 | % |   |   |   |   |
| YTD Net Charge-offs                         |   | $                           | 12.2   |   |                | $      | 2.8     |         |   | $      | 0.1         |   |   | $                | 0.9    |   |                 | $      | 16.0    |        |   | $      | 0.8            |   |   | $              | 0.2    |   |                            | $      | 0.4 |   |   | $ | 1.4 |   |   | $ | 17.4 |   |
| Net Charge-off ratio*                       |   |                        | 7.60   | %      |                |   | 1.00    | %            |   |   | 0.19        | %      |   |             | 1.38   | %      |                 |   | 2.95    | %           |   |   | 0.55           | %      |   |           | 0.43   | %      |                            |   | 1.03 | % |   |   | 0.59 | % |   |   | 2.22 | % |
| *Annualized based on ending balances        |   |                        |   |   |                |   |    |         |   |   |        |   |   |             |   |   |                 |   |    |        |   |   |           |   |   |           |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |

----

|                              |   | March 31, |    |
|-----------------------------------|--------|-----------|---------|
| (Dollars in Thousands)            |   | 2010      |    |
| Amounts of commitments:           |   |      |    |
| Loan commitments to extend credit |   | $         | 498,544 |   |
| Standby letters of credit         |   |      | 42,465  |   |
|                              |   | $         | 541,009 |   |

| (Dollars in Thousands)                                         |   | 2010 Remaining |    |   | 2011   |   |   | 2012   |   |   | 2013    |   |   | 2014   |   |   | 2015 and after |   |   | Total  |   |
|----------------------------------------------------------------|--------|----------------|---------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|----------------|--------|--------|--------|--------|
| Operating leases                                               |   | $              | 1,659   |   |   | $      | 2,038  |   |   | $      | 1,647   |   |   | $      | 895    |   |           | $      | 820    |   |   | $ | 1,061 |   |   | $ | 8,120 |   |
| Securities sold under repurchase agreements                    |   |           | 88,576  |   |   |   |   |   |   |   | 14,250  |   |   |   |   |   |           |   | 10,000 |   |   |   |   |   |   |   | 112,826 |   |
| Federal Home Loan Bank advances                                |   |           | 39,492  |   |   |   | 18,934 |   |   |   | 50,587  |   |   |   | 414    |   |           |   | 1,331  |   |   |   | 12,503 |   |   |   | 123,261 |   |
| Subordinated debentures, revolving credit lines and term loans |   |           |    |   |   |   |   |   |   |   | 78,968  |   |   |   |   |   |           |   |   |   |   |   | 115,826 |   |   |   | 194,794 |   |
| Total                                                          |   | $              | 129,727 |   |   | $      | 20,972 |   |   | $      | 145,452 |   |   | $      | 1,309  |   |           | $      | 12,151 |   |   | $ | 129,390 |   |   | $ | 439,001 |   |

----

|           | At March 31, 2010  |
|----------------|--------------------|
|           | RISING             | FALLING |
| Driver Rates   | (200 Basis Points) | (100 Basis Points) |
| Prime          | 200                | 0 |
| Federal Funds  | 200                | 0 |
| One-Year CMT   | 200                | (7) |
| Three-Year CMT | 200                | (72) |
| Five-Year CMT  | 200                | (100) |
| CD's           | 200                | (74) |
| FHLB Advances  | 200                | (31) |

----

|                        |   | At March 31, 2010 |    |
|-----------------------------|--------|-------------------|---------|
|                        |   |              |    |   | RISING |   |   | FALLING |   |
| Driver Rates                |   | Base              |    |   | (200 Basis Points) |   |   | (100 Basis Points) |   |
| Net Interest Income         |   | $                 | 150,549 |   |   | $ | 154,358 |   |   | $ | 148,517 |   |
| Variance from Base          |   |              |    |   |   | $ | 3,809 |   |   | $ | (2,032 | ) |
| Percent of change from base |   |              | 0.00    | % |   |   | 2.53 | % |   |   | -1.35 | % |
| Policy Limit                |   |              |    |   |   |   | -5.00 | % |   |   | -2.00 | % |

|           | At December 31, 2009 |
|----------------|----------------------|
|           | RISING               | FALLING |
| Driver Rates   | (200 Basis Points)   | (100 Basis Points) |
| Prime          | 200                  | 0 |
| Federal Funds  | 200                  | 0 |
| One-Year CMT   | 200                  | (7) |
| Three-Year CMT | 200                  | (61) |
| Five-Year CMT  | 200                  | (100) |
| CD's           | 200                  | (79) |
| FHLB Advances  | 200                  | (37) |

|                        |   | At December 31, 2009 |    |
|-----------------------------|--------|----------------------|---------|
|                        |   |                 |    |   | RISING |   |   | FALLING |   |
| Driver Rates                |   | Base                 |    |   | (200 Basis Points) |   |   | (100 Basis Points) |   |
| Net Interest Income         |   | $                    | 148,713 |   |   | $ | 158,850 |   |   | $ | 146,071 |   |
| Variance from Base          |   |                 |    |   |   | $ | 10,137 |   |   | $ | (2,642 | ) |
| Percent of change from base |   |                 | 0.00    | % |   |   | 6.82 | % |   |   | -1.78 | % |
| Policy Limit                |   |                 |    |   |   |   | -5.00 | % |   |   | -2.00 | % |

----

|                                             |   | March 31, |      |   | December 31, |   |
|--------------------------------------------------|--------|-----------|-----------|--------|--------------|--------|
| (Dollars in Thousands)                           |   | 2010      |      |   | 2009         |   |
| Federal funds sold                               |   | $         | 7,044     |   |         | $      | 102,346 |   |
| Interest-bearing time deposits                   |   |      | 157,735   |   |         |   | 74,025 |   |
| Investment securities available for sale         |   |      | 475,596   |   |         |   | 413,607 |   |
| Investment securities held to maturity           |   |      | 163,485   |   |         |   | 149,510 |   |
| Mortgage loans held for sale                     |   |      | 3,646     |   |         |   | 8,036 |   |
| Loans                                            |   |      | 3,134,540 |   |         |   | 3,269,788 |   |
| Federal Reserve and Federal Home Loan Bank stock |   |      | 36,721    |   |         |   | 38,576 |   |
| Total                                            |   | $         | 3,978,767 |   |         | $      | 4,055,888 |   |

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 4. CONTROLS AND PROCEDURES

----

ITEM 1. LEGAL PROCEEDINGS

ITEM 1.A. RISK FACTORS

UNREGISTERED SALES 

ENIOR SECURITIES

 4. [RESERVED]

 INFORMATION

----

EXHI

| Exhibit No.: |   | Description of Exhibit                                                                                                                                                                                                     |   | Form 10-Q No.: |
|--------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|
| 10.1         |   | First Merchants Corporation Senior Management Incentive Compensation Plan dated February 25, 2010 and amended on March 31, 2010                                                                                            |   | 38             |
| 10.2         |   | Form of Securities Purchase Agreement between First Merchants Corporation and six groups of institutional investors, dated March 30, 2010 (incorporated by reference to registrant’s Form 8K filed on March 30, 2010 |   |           |
| 31.1         |   | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002                                                                                                                       |   | 41             |
| 31.2         |   | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002                                                                                                                       |   | 42             |
| 32           |   | Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes - Oxley Act of 2002                                                                                                  |   | 43             |

----

IGNATU

----

----

INDEX TO 

| Exhibit No.: |   | Description of Exhibit                                                                                                                                                                                                     |   | Form 10-Q No.: |
|--------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|
| 10.1         |   | First Merchants Corporation Senior Management Incentive Compensation Plan dated February 25, 2010 and amended on March 31, 2010                                                                                            |   | 38             |
| 10.2         |   | Form of Securities Purchase Agreement between First Merchants Corporation and six groups of institutional investors, dated March 30, 2010 (incorporated by reference to registrant’s Form 8K filed on March 30, 2010 |   |           |
| 31.1         |   | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002                                                                                                                       |   | 41             |
| 31.2         |   | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002                                                                                                                       |   | 42             |
| 32           |   | Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes - Oxley Act of 2002                                                                                                  |   | 43             |

----

| I. | Purpose |
|----|---------|

| II. | Administration |
|-----|----------------|

| III. | Covered Individuals by Officer Level/Role |
|------|-------------------------------------------|

| A. | President and Chief Executive Officer of FMC;                         |
|----|-----------------------------------------------------------------------|
| B. | Executive Vice Presidents of FMC;                                     |
| C. | Executive Officers, Non-Bank Presidents and Regional Presidents;      |
| D. | Selected Senior Leadership                                            |
| E. | Department Heads, Division Heads and Other Management Leadership; and |
| F. | Mortgage Sales Managers.                                              |

----

| EXHIBIT-10.1 Senior Management Incentive Compensation Program continued |
|-------------------------------------------------------------------------|

| IV. | Implementation Parameters |
|-----|---------------------------|

|   | A. | The FMC CEO and EVP earnings component payouts will be determined by changes in FMC EPS calculated on a diluted GAAP basis. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------|

|   | B. | When utilized, balanced scorecards will be tailored to each unit incorporating a specific weighting on various operating initiatives as set by the CEO, EVP’s and SVP of HR. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  | A                                                | B                                                | C                                                                                                                                                                                                                                                      | D                                                                                                                                                                                                                                                      | E                                                                                                                                                                                                                                                | F                                    |
|-----------------------|--------------------------------------------------|--------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|
| Target %:             | 45%                                              | 40%                                              | 25% - 30%                                                                                                                                                                                                                                              | 15% - 20%                                                                                                                                                                                                                                              | 10%- 15%                                                                                                                                                                                                                                         | 5 bps                                |
| Participants:         | FMC CEO                                          | FMC EVP                                          | ·Executive Officers·Non-Bank Presidents·Regional Presidents                                                                                                                                                                             |  Selected Senior Leadership                                                                                                                                                                                                                  | ·Department Heads·Division Heads·Other Management Leadership                                                                                                                                                                 | Mortgage Sales Managers              |
| Incentive Components: | Operating EPS at 100% (calculated on GAAP basis) | Operating EPS at 100% (calculated on GAAP basis) | FMC participants:Change in EPS at 80%;Consolidated Efficiency Ratio at 20%Bank Participants:Balanced ScorecardFMIS & FMTC:Change in Agency/Trust Operating Revenue at 50%;Change in EPS at 30%Change in Consolidated Efficiency Ratio at 20%  | FMC participants:Change in EPS at 80%;Consolidated Efficiency Ratio at 20%Bank Participants:Balanced ScorecardFMIS & FMTC:Change in Agency/Trust Operating Revenue at 50%;Change in EPS at 30%Change in Consolidated Efficiency Ratio at 20%  | FMC participants:Change in EPS at 80%;Consolidated Efficiency Ratio at 20%Bank Participants:Balanced ScorecardFMIS & FMTC:Change in Agency/Trust Operating Revenue at 50%;Change in EPS at 30%Change in Consolidated Efficiency Ratio at 20% | 5 bps of subordinate mortgage volume |

|   | A. | Where individual components are applicable, they must be measurable with both beginning points and standard targets cited. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------|

----

| EXHIBIT-10.1 Senior Management Incentive Compensation Program continued |
|-------------------------------------------------------------------------|

| B.   | Schedule Determining EPS on a diluted GAAP basis* payouts |
|----------------|-----------------------------------------------------------|

|   | $ Actual   | Payout % |
|--------|------------|----------|
|   | < $0.05 | 0%       |
|   | 0.05       | 30%      |
|   | 0.10       | 40%      |
|   | 0.15       | 50%      |
|   | 0.20       | 60%      |
|   | 0.25       | 70%      |
|   | 0.30       | 80%      |
|   | 0.35       | 90%      |
| Target | 0.40       | 100%     |
|   | 0.45       | 110%     |
|   | 0.50       | 120%     |
|   | 0.55       | 130%     |
|   | 0.60       | 140%     |
|   | 0.65       | 150%     |

| C.  | Schedule Determining Operating Earnings Payouts for FMTC and FMIS |
|----------|-------------------------------------------------------------------|

|   | Operating Earnings % Change* | Payout % |
|--------|------------------------------|----------|
|   | <10%                      | 0%       |
|   | 10%                          | 40%      |
|   | 12.5%                        | 50%      |
|   | 15%                          | 60%      |
|   | 17.5%                        | 70%      |
|   | 20%                          | 80%      |
|   | 22.5%                        | 90%      |
| Target | 25%                          | 100%     |
|   | 27.5%                        | 110%     |
|   | 30%                          | 120%     |
|   | 32.5%                        | 130%     |
|   | 35.0%                        | 140%     |
|   | 37.5%                        | 150%     |
|   | 40%                          | 160%     |
|   | 42.5%                        | 170%     |
|   | 45%                          | 180%     |
|   | 47.5%                        | 190%     |
|   | =>50%                     | 200%     |

----

|   | 1. | I have reviewed this Quarterly Report on Form 10-Q of First Merchants Corporation; |
|--------|----|------------------------------------------------------------------------------------|

|   | 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 1. | I have reviewed this Quarterly Report on Form 10-Q of First Merchants Corporation; |
|--------|----|------------------------------------------------------------------------------------|

|   | 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----