----

| Indiana |  35-1544218 |
|---------|------------------|

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

| 200 East Jackson |    47305-2814             |
|------------------|------------------------------------------|
|             | Muncie, Indiana                          | (Zip Code) |
|             | (Address of principal executive offices) |   |

| Title of Each Class | Name of each exchange on which registered   |
|---------------------|---------------------------------------------|
|                | Common Stock, $0.125 stated value per share | The NASDAQ Stock Market |

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| Five-Year Summary of Selected Financial Data   | 3        |
|------------------------------------------------|----------|
|                                           |     |
| Statement Regarding Forward-Looking Statements | 4        |
|                                           |     |   |   |
| PART I                                         |     |   |   |
|                                           | Item 1.  | Business | 5 |
|                                           | Item 1A. | Risk Factors | 20 |
|                                           | Item 1B. | Unresolved Staff Comments | 23 |
|                                           | Item 2.  | Properties | 24 |
|                                           | Item 3.  | Legal Proceedings | 24 |
|                                           | Item 4.  | [Reserved] | 24 |
|                                           |     | Supplemental Information - Executive Officers of the Registrant | 25 |
|                                           |     |   |   |
| PART II                                        |     |   |   |
|                                           | Item 5.  | Market for Registrant's Common Equity, Related Stockholder |   |
|                  |     | Matters and Issuer Purchases of Equity Securities | 26 |
|                                           | Item 6.  | Selected Financial Data | 28 |
|                                           | Item 7.  | Management's Discussion and Analysis of Financial Condition |   |
|                                           |     | and Results of Operations | 29 |
|                                           | Item 7A. | Quantitative and Qualitative Disclosure about Market Risk | 40 |
|                                           | Item 8.  | Financial Statements and Supplementary Data | 41 |
|                                           | Item 9.  | Changes in and Disagreements with Accountants on Accounting |   |
|                                           |     | and Financial Disclosure | 83 |
|                                           | Item 9A. | Controls and Procedures | 83 |
|                                           | Item 9B. | Other Information | 84 |
|                                           |     |   |   |
| PART III                                       |     |   |   |
|                                           | Item 10. | Directors and Executive Officers of the Registrant | 85 |
|                                           | Item 11. | Executive Compensation | 85 |
|                                           | Item 12. | Security Ownership of Certain Beneficial Owners and Management |   |
|                                           |     | and Related Stockholder Matters | 85 |
|                                           | Item 13. | Certain Relationships, Related Transactions and Director Independence | 85 |
|                                           | Item 14. | Principal Accountant Fees and Services | 85 |
|                                           |     |   |   |
| PART IV                                        |     |   |   |
|                                           | Item 15. | Exhibits and Financial Statement Schedules | 86 |

----

| (Dollars in thousands, except share data)                            |   | 2010   |      |    | 2009   |   |      | 2008    |   |   | 2007      |   |   | 2006   |      |
|----------------------------------------------------------------------|--------|--------|-----------|---------|--------|--------|-----------|---------|--------|--------|-----------|--------|--------|--------|-----------|
| Operations1                                                          |   |   |      |    |   |   |      |    |   |   |      |   |   |   |      |
| Net Interest Income Fully Taxable Equivalent (FTE) Basis             |   | $      | 149,434   |    |   | $      | 159,068   |    |   | $      | 133,083   |   |   | $      | 117,247   |   |   | $ | 114,076 |   |
| Less Tax Equivalent Adjustment                                       |   |   | 5,865     |    |   |   | 5,722     |    |   |   | 3,699     |   |   |   | 4,127     |   |   |   | 3,981 |   |
| Net Interest Income                                                  |   |   | 143,569   |    |   |   | 153,346   |    |   |   | 129,384   |   |   |   | 113,120   |   |   |   | 110,095 |   |
| Provision for Loan Losses                                            |   |   | 46,483    |    |   |   | 122,176   |    |   |   | 28,238    |   |   |   | 8,507     |   |   |   | 6,258 |   |
| Net Interest Income After Provision for Loan Losses                  |   |   | 97,086    |    |   |   | 31,170    |    |   |   | 101,146   |   |   |   | 104,613   |   |   |   | 103,837 |   |
| Total Other Income                                                   |   |   | 48,544    |    |   |   | 51,201    |    |   |   | 36,367    |   |   |   | 40,551    |   |   |   | 34,613 |   |
| Total Other Expenses                                                 |   |   | 142,311   |    |   |   | 151,558   |    |   |   | 108,792   |   |   |   | 102,182   |   |   |   | 96,057 |   |
| Income (Loss) Before Income Tax Expense (Benefit)                    |   |   | 3,319     |    |   |   | (69,187   | )       |   |   | 28,721    |   |   |   | 42,982    |   |   |   | 42,393 |   |
| Income Tax Expense (Benefit)                                         |   |   | (3,590    | )       |   |   | (28,424   | )       |   |   | 8,083     |   |   |   | 11,343    |   |   |   | 12,195 |   |
| Net Income (Loss)                                                    |   |   | 6,909     |    |   |   | (40,763   | )       |   |   | 20,638    |   |   |   | 31,639    |   |   |   | 30,198 |   |
| Gain on Exchange of Preferred Stock to Trust Preferred Debt          |   |   | 10,052    |    |   |   |      |    |   |   |      |   |   |   |      |   |   |   |   |   |
| Preferred Stock Dividends and Discount Accretion                     |   |   | (5,239    | )  |   |   | (4,979    | )  |   |   |      |   |   |   |      |   |   |   |   |   |
| Net Income (Loss) Available to Common Stockholders                   |   | $      | 11,722    |    |   | $      | (45,742   | )       |   | $      | 20,638    |   |   | $      | 31,639    |   |   | $ | 30,198 |   |
|                                                                 |   |   |      |    |   |   |      |    |   |   |      |   |   |   |      |   |   |   |   |   |
| Per Share Data                                                       |   |   |      |    |   |   |      |    |   |   |      |   |   |   |      |   |   |   |   |   |
| Basic Net Income (Loss) Available to Common Stockholders             |   | $      | 0.48      |    |   | $      | (2.17     | )       |   | $      | 1.14      |   |   | $      | 1.73      |   |   | $ | 1.64 |   |
| Diluted Net Income (Loss) Available to Common Stockholders           |   |   | 0.48      |    |   |   | (2.17     | )       |   |   | 1.14      |   |   |   | 1.73      |   |   |   | 1.64 |   |
| Cash Dividends Paid - Common                                         |   |   | 0.04      |    |   |   | 0.47      |    |   |   | 0.92      |   |   |   | 0.92      |   |   |   | 0.92 |   |
| December 31 Book Value - Common                                      |   |   | 15.11     |    |   |   | 16.55     |    |   |   | 18.69     |   |   |   | 18.88     |   |   |   | 17.75 |   |
| December 31 Tangible Book Value - Common                             |   |   | 9.21      |    |   |   | 9.25      |    |   |   | 10.93     |   |   |   | 11.60     |   |   |   | 10.52 |   |
| December 31 Market Value (Bid Price) - Common                        |   |   | 8.86      |    |   |   | 5.94      |    |   |   | 22.21     |   |   |   | 27.84     |   |   |   | 27.19 |   |
|                                                                 |   |   |      |    |   |   |      |    |   |   |      |   |   |   |      |   |   |   |   |   |
| Average Balances 1                                                   |   |   |      |    |   |   |      |    |   |   |      |   |   |   |      |   |   |   |   |   |
| Total Assets                                                         |   | $      | 4,271,715 |    |   | $      | 4,674,590 |    |   | $      | 3,811,166 |   |   | $      | 3,639,772 |   |   | $ | 3,371,386 |   |
| Total Loans 2                                                        |   |   | 3,050,850 |    |   |   | 3,546,316 |    |   |   | 3,002,628 |   |   |   | 2,794,824 |   |   |   | 2,569,847 |   |
| Total Deposits                                                       |   |   | 3,337,747 |    |   |   | 3,603,509 |    |   |   | 2,902,902 |   |   |   | 2,752,443 |   |   |   | 2,568,070 |   |
| Securities Sold Under Repurchase Agreements (long-term portion)      |   |   | 24,250    |    |   |   | 24,250    |    |   |   | 34,250    |   |   |   | 23,813    |   |   |   |   |   |
| Total Federal Home Loan Bank Advances                                |   |   | 107,753   |    |   |   | 243,105   |    |   |   | 237,791   |   |   |   | 259,463   |   |   |   | 234,629 |   |
| Total Subordinated Debentures, Revolving Credit Lines and Term Loans |   |   | 126,650   |    |   |   | 110,826   |    |   |   | 107,752   |   |   |   | 104,680   |   |   |   | 99,456 |   |
| Total Stockholders' Equity                                           |   |   | 470,379   |    |   |   | 477,148   |    |   |   | 349,594   |   |   |   | 330,786   |   |   |   | 319,519 |   |
|                                                                 |   |   |      |    |   |   |      |    |   |   |      |   |   |   |      |   |   |   |   |   |
| Year-End Balances 1                                                  |   |   |      |    |   |   |      |    |   |   |      |   |   |   |      |   |   |   |   |   |
| Total Assets                                                         |   | $      | 4,170,848 |    |   | $      | 4,480,952 |    |   | $      | 4,784,155 |   |   | $      | 3,782,087 |   |   | $ | 3,554,870 |   |
| Total Loans 2                                                        |   |   | 2,857,152 |    |   |   | 3,277,824 |    |   |   | 3,726,247 |   |   |   | 2,880,578 |   |   |   | 2,698,014 |   |
| Total Deposits                                                       |   |   | 3,268,880 |    |   |   | 3,536,536 |    |   |   | 3,718,811 |   |   |   | 2,884,121 |   |   |   | 2,750,538 |   |
| Securities Sold Under Repurchase Agreements (long-term portion)      |   |   | 24,250    |    |   |   | 24,250    |    |   |   | 34,250    |   |   |   | 34,250    |   |   |   |   |   |
| Total Federal Home Loan Bank Advances                                |   |   | 82,684    |    |   |   | 129,749   |    |   |   | 360,217   |   |   |   | 294,101   |   |   |   | 242,408 |   |
| Total Subordinated Debentures, Revolving Credit Lines and Term Loans |   |   | 226,440   |    |   |   | 194,790   |    |   |   | 135,826   |   |   |   | 115,826   |   |   |   | 83,956 |   |
| Total Stockholders' Equity                                           |   |   | 454,408   |    |   |   | 463,785   |    |   |   | 395,903   |   |   |   | 339,936   |   |   |   | 327,325 |   |
|                                                                 |   |   |      |    |   |   |      |    |   |   |      |   |   |   |      |   |   |   |   |   |
| Financial Ratios 1                                                   |   |   |      |    |   |   |      |    |   |   |      |   |   |   |      |   |   |   |   |   |
| Return on Average Assets                                             |   |   | 0.27      | %       |   |   | (0.98     | )       |   |   | 0.54      | %      |   |   | 0.87      | % |   |   | 0.90 | % |
| Return on Average Stockholders' Equity                               |   |   | 2.49      |    |   |   | (9.59     | )       |   |   | 5.90      |   |   |   | 9.56      |   |   |   | 9.45 |   |
| Average Earning Assets to Total Assets 1                             |   |   | 90.42     |    |   |   | 94.74     |    |   |   | 72.39     |   |   |   | 90.15     |   |   |   | 91.15 |   |
| Allowance for Loan Losses as % of Total Loans                        |   |   | 2.90      |    |   |   | 2.81      |    |   |   | 1.33      |   |   |   | 0.98      |   |   |   | 0.99 |   |
| Dividend Payout Ratio                                                |   |   | 8.33      |    |   |   | n/m3      |    |   |   | 80.70     |   |   |   | 53.18     |   |   |   | 56.10 |   |
| Average Stockholders' Equity to Average Assets                       |   |   | 11.01     |    |   |   | 10.21     |    |   |   | 9.17      |   |   |   | 9.09      |   |   |   | 9.48 |   |
| Tax Equivalent Yield on Earning Assets                               |   |   | 5.32      |    |   |   | 5.56      |    |   |   | 6.44      |   |   |   | 7.10      |   |   |   | 6.92 |   |
| Cost of Supporting Liabilities                                       |   |   | 1.45      |    |   |   | 1.82      |    |   |   | 2.60      |   |   |   | 3.55      |   |   |   | 3.21 |   |
| Net Interest Margin on Earning Assets                                |   |   | 3.87      |    |   |   | 3.74      |    |   |   | 3.84      |   |   |   | 3.55      |   |   |   | 3.71 |   |

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First Merchants 

| ·   | statements of the Corporation’s goals, intentions and expectations; |
|--------------------|---------------------------------------------------------------------------|

| ·   | statements regarding the Corporation’s business plan and growth strategies; |
|--------------------|-----------------------------------------------------------------------------------|

| ·   | statements regarding the asset quality of the Corporation’s loan and investment portfolios; and |
|--------------------|-------------------------------------------------------------------------------------------------------|

| ·   | estimates of the Corporation’s risks and future costs and benefits. |
|--------------------|---------------------------------------------------------------------------|

----

PART 

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| ·   | acquiring direct or indirect control or ownership of any voting shares of any bank or bank holding company if, after such acquisition, the bank holding company will directly or indirectly own or control more than 5 percent of the voting shares of the bank or bank holding company; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | merging or consolidating with another bank holding company; or |
|--------------------|----------------------------------------------------------------|

| ·   | acquiring substantially all of the assets of any bank. |
|--------------------|--------------------------------------------------------|

|                            | Corporation | Regulatory Minimum Requirement |
|---------------------------------|-------------|--------------------------------|
| Tier 1 risk-based capital ratio | 12.82%      | 4.00%                          |
|                            |        |                           |
| Total risk-based capital ratio  | 15.74%      | 8.00%                          |

----

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| · | increase the cost of operations due to greater regulatory oversight, supervision and examination of banks and bank holding companies, including higher deposit insurance premiums; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | limit the Corporation’s ability to raise additional capital through the use of trust preferred securities as new issuances of these securities may no longer be included as Tier 1 capital; |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | reduce the flexibility to generate or originate certain revenue-producing assets based on increased regulatory capital standards; and |
|--------|---------------------------------------------------------------------------------------------------------------------------------------|

| · | limit the ability to expand consumer product and service offerings due to anticipated stricter consumer protection laws and regulations. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|

----

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| ·   | a prohibition on personal loans made or arranged by the issuer to its directors and executive officers (except for loans made by a bank subject to Regulation O); |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | independence requirements for audit committee members; |
|--------------------|--------------------------------------------------------|

| ·   | independence requirements for company auditors; |
|--------------------|-------------------------------------------------|

| ·   | certification of financial statements on Forms 10-K and 10-Q reports by the chief executive officer and the chief financial officer; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the forfeiture by the chief executive officer and chief financial officer of bonuses or other incentive-based compensation and profits from the sale of an issuer’s securities by such officers in the twelve-month period following initial publication of any financial statements that later require restatement due to corporate misconduct; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | disclosure of off-balance sheet transactions; |
|--------------------|-----------------------------------------------|

| ·   | two-business day filing requirements for insiders filing Form 4s; |
|--------------------|-------------------------------------------------------------------|

| ·   | disclosure of a code of ethics for financial officers and filing a Form 8-K for a change in or waiver of such code; |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

| ·   | the reporting of securities violations “up the ladder” by both in-house and outside attorneys; |
|--------------------|------------------------------------------------------------------------------------------------------------|

| ·   | restrictions on the use of non-GAAP financial measures in press releases and SEC filings; |
|--------------------|-------------------------------------------------------------------------------------------|

| ·   | the formation of a public accounting oversight board; and |
|--------------------|-----------------------------------------------------------|

| ·   | various increased criminal penalties for violations of securities laws. |
|--------------------|-------------------------------------------------------------------------|

----

|                                                        |   | Average Balance |      |   | Interest Income / Expense |   |    | Average Rate |   |   | Average Balance |   |   | Interest Income / Expense |      |   | Average Rate |   |    | Average Balance |   |   | Interest Income / Expense |   |   | Average Rate |      |
|-------------------------------------------------------------|--------|-----------------|-----------|--------|---------------------------|--------|---------|--------------|--------|--------|-----------------|--------|--------|---------------------------|-----------|--------|--------------|--------|---------|-----------------|--------|--------|---------------------------|--------|--------|--------------|-----------|
| (Dollars in thousands)                                      |   | 2010            |      |   | 2009                      |   |    | 2008         |   |
| Assets:                                                     |   |            |      |   |                      |   |    |         |   |   |            |   |   |                      |      |   |         |   |    |            |   |   |                      |   |   |         |      |
| Federal Funds Sold                                          |   | $               | 21,524    |   |                      | $      | 26      |         |   |   | 0.1             | %      |   | $                         | 78,641    |   |         | $      | 118     |            |   |   | 0.2                       | %      |   | $            | 2,604     |   |   | $ | 28 |   |   |   | 1.1 | % |
| Interest-bearing Deposits                                   |   |            | 106,820   |   |                      |   | 381     |         |   |   | 0.4             |   |   |                      | 77,237    |   |         |   | 366     |            |   |   | 0.5                       |   |   |         | 22,576    |   |   |   | 755 |   |   |   | 3.3 |   |
| Federal Reserve and Federal Home Loan Bank Stock            |   |            | 36,338    |   |                      |   | 1,252   |         |   |   | 3.4             |   |   |                      | 35,487    |   |         |   | 1,379   |            |   |   | 3.9                       |   |   |         | 25,425    |   |   |   | 1,391 |   |   |   | 5.5 |   |
| Securities: 1                                               |   |            |      |   |                      |   |    |         |   |   |            |   |   |                      |      |   |         |   |    |            |   |   |                      |   |   |         |      |   |   |   |   |   |   |   |   |   |
| Taxable                                                     |   |            | 399,721   |   |                      |   | 12,957  |         |   |   | 3.2             |   |   |                      | 279,130   |   |         |   | 12,335  |            |   |   | 4.4                       |   |   |         | 259,013   |   |   |   | 12,046 |   |   |   | 4.7 |   |
| Tax-Exempt 2                                                |   |            | 247,240   |   |                      |   | 15,965  |         |   |   | 6.5             |   |   |                      | 228,323   |   |         |   | 14,750  |            |   |   | 6.5                       |   |   |         | 151,231   |   |   |   | 9,010 |   |   |   | 6.0 |   |
| Total Securities                                            |   |            | 646,961   |   |                      |   | 28,922  |         |   |   | 4.5             |   |   |                      | 507,453   |   |         |   | 27,085  |            |   |   | 5.3                       |   |   |         | 410,244   |   |   |   | 21,056 |   |   |   | 5.1 |   |
| Mortgage Loans Held for Sale                                |   |            | 11,878    |   |                      |   | 684     |         |   |   | 5.8             |   |   |                      | 14,220    |   |         |   | 854     |            |   |   | 6.0                       |   |   |         | 3,614     |   |   |   | 268 |   |   |   | 7.4 |   |
| Loans: 3                                                    |   |            |      |   |                      |   |    |         |   |   |            |   |   |                      |      |   |         |   |    |            |   |   |                      |   |   |         |      |   |   |   |   |   |   |   |   |   |
| Commercial                                                  |   |            | 2,288,883 |   |                      |   | 130,276 |         |   |   | 5.7             |   |   |                      | 2,605,060 |   |         |   | 150,096 |            |   |   | 5.8                       |   |   |         | 2,248,255 |   |   |   | 149,988 |   |   |   | 6.7 |   |
| Real Estate Mortgage                                        |   |            | 350,646   |   |                      |   | 19,473  |         |   |   | 5.6             |   |   |                      | 446,965   |   |         |   | 26,176  |            |   |   | 5.9                       |   |   |         | 355,540   |   |   |   | 22,357 |   |   |   | 6.3 |   |
| Installment                                                 |   |            | 380,293   |   |                      |   | 23,637  |         |   |   | 6.2             |   |   |                      | 458,726   |   |         |   | 28,490  |            |   |   | 6.2                       |   |   |         | 371,813   |   |   |   | 25,771 |   |   |   | 6.9 |   |
| Tax-Exempt 2                                                |   |            | 19,150    |   |                      |   | 792     |         |   |   | 4.1             |   |   |                      | 21,345    |   |         |   | 1,597   |            |   |   | 7.5                       |   |   |         | 23,406    |   |   |   | 1,558 |   |   |   | 6.7 |   |
| Total Loans                                                 |   |            | 3,050,850 |   |                      |   | 174,862 |         |   |   | 5.7             |   |   |                      | 3,546,316 |   |         |   | 207,213 |            |   |   | 5.8                       |   |   |         | 3,002,628 |   |   |   | 199,942 |   |   |   | 6.7 |   |
| Total Earning Assets                                        |   |            | 3,862,493 |   |                      |   | 205,443 |         |   |   | 5.3             |   |   |                      | 4,245,134 |   |         |   | 236,161 |            |   |   | 5.6                       |   |   |         | 3,463,477 |   |   |   | 223,172 |   |   |   | 6.4 |   |
| Net Unrealized Gain (Loss) on Securities Available for Sale |   |            | 14,245    |   |                      |   |    |         |   |   |            |   |   |                      | 922       |   |         |   |    |            |   |   |                      |   |   |         | 1,383     |   |   |   |   |   |   |   |   |   |
| Allowance for Loan Losses                                   |   |            | (87,058   | )      |                      |   |    |         |   |   |            |   |   |                      | (71,909   | )      |         |   |    |            |   |   |                      |   |   |         | (32,383   | ) |   |   |   |   |   |   |   |   |
| Cash and Due from Banks                                     |   |            | 56,635    |   |                      |   |    |         |   |   |            |   |   |                      | 72,118    |   |         |   |    |            |   |   |                      |   |   |         | 75,553    |   |   |   |   |   |   |   |   |   |
| Premises and Equipment                                      |   |            | 53,870    |   |                      |   |    |         |   |   |            |   |   |                      | 58,559    |   |         |   |    |            |   |   |                      |   |   |         | 44,601    |   |   |   |   |   |   |   |   |   |
| Other Assets                                                |   |            | 371,530   |   |                      |   |    |         |   |   |            |   |   |                      | 369,766   |   |         |   |    |            |   |   |                      |   |   |         | 258,535   |   |   |   |   |   |   |   |   |   |
| Total Assets                                                |   | $               | 4,271,715 |   |                      |   |    |         |   |   |            |   |   | $                         | 4,674,590 |   |         |   |    |            |   |   |                      |   |   | $            | 3,811,166 |   |   |   |   |   |   |   |   |   |
| Liabilities:                                                |   |            |      |   |                      |   |    |         |   |   |            |   |   |                      |      |   |         |   |    |            |   |   |                      |   |   |         |      |   |   |   |   |   |   |   |   |   |
| Interest-bearing Deposits:                                  |   |            |      |   |                      |   |    |         |   |   |            |   |   |                      |      |   |         |   |    |            |   |   |                      |   |   |         |      |   |   |   |   |   |   |   |   |   |
| NOW Accounts                                                |   | $               | 755,793   |   |                      | $      | 3,300   |         |   |   | 0.4             | %      |   | $                         | 699,738   |   |         | $      | 3,606   |            |   |   | 0.5                       | %      |   | $            | 527,993   |   |   | $ | 5,526 |   |   |   | 1.0 | % |
| Money Market Deposit Accounts                               |   |            | 467,313   |   |                      |   | 2,520   |         |   |   | 0.5             |   |   |                      | 431,534   |   |         |   | 3,550   |            |   |   | 0.8                       |   |   |         | 276,579   |   |   |   | 3,954 |   |   |   | 1.4 |   |
| Savings  Deposits                                 |   |            | 285,760   |   |                      |   | 812     |         |   |   | 0.3             |   |   |                      | 301,261   |   |         |   | 1,219   |            |   |   | 0.4                       |   |   |         | 274,320   |   |   |   | 2,075 |   |   |   | 0.8 |   |
| Certificates and Other Time Deposits                        |   |            | 1,295,367 |   |                      |   | 33,244  |         |   |   | 2.6             |   |   |                      | 1,686,844 |   |         |   | 50,016  |            |   |   | 3.0                       |   |   |         | 1,445,843 |   |   |   | 56,026 |   |   |   | 3.9 |   |
| Total Interest-bearing Deposits                             |   |            | 2,804,233 |   |                      |   | 39,876  |         |   |   | 1.4             |   |   |                      | 3,119,377 |   |         |   | 58,391  |            |   |   | 1.9                       |   |   |         | 2,524,735 |   |   |   | 67,581 |   |   |   | 2.7 |   |
| Borrowings                                                  |   |            | 427,242   |   |                      |   | 16,133  |         |   |   | 3.8             |   |   |                      | 567,607   |   |         |   | 18,702  |            |   |   | 3.3                       |   |   |         | 528,397   |   |   |   | 22,508 |   |   |   | 4.3 |   |
| Total Interest-bearing Liabilities                          |   |            | 3,231,475 |   |                      |   | 56,009  |         |   |   | 1.7             |   |   |                      | 3,686,984 |   |         |   | 77,093  |            |   |   | 2.1                       |   |   |         | 3,053,132 |   |   |   | 90,089 |   |   |   | 3.0 |   |
| Noninterest-bearing Deposits                                |   |            | 533,514   |   |                      |   |    |         |   |   |            |   |   |                      | 484,132   |   |         |   |    |            |   |   |                      |   |   |         | 378,167   |   |   |   |   |   |   |   |   |   |
| Other Liabilities                                           |   |            | 36,347    |   |                      |   |    |         |   |   |            |   |   |                      | 26,326    |   |         |   |    |            |   |   |                      |   |   |         | 30,273    |   |   |   |   |   |   |   |   |   |
| Total Liabilities                                           |   |            | 3,801,336 |   |                      |   |    |         |   |   |            |   |   |                      | 4,197,442 |   |         |   |    |            |   |   |                      |   |   |         | 3,461,572 |   |   |   |   |   |   |   |   |   |
| Stockholders' Equity                                        |   |            | 470,379   |   |                      |   |    |         |   |   |            |   |   |                      | 477,148   |   |         |   |    |            |   |   |                      |   |   |         | 349,594   |   |   |   |   |   |   |   |   |   |
| Total Liabilities and Stockholders' Equity                  |   | $               | 4,271,715 |   |                      |   | 56,009  |         |   |   | 1.5             |   |   | $                         | 4,674,590 |   |         |   | 77,093  |            |   |   | 1.8                       |   |   | $            | 3,811,166 |   |   |   | 90,089 |   |   |   | 2.6 |   |
| Net Interest Income                                         |   |            |      |   |                      | $      | 149,434 |         |   |   |            |   |   |                      |      |   |         | $      | 159,068 |            |   |   |                      |   |   |         |      |   |   | $ | 133,083 |   |   |   |   |   |
| Net Interest Margin                                         |   |            |      |   |                      |   |    |         |   |   | 3.9             | %      |   |                      |      |   |         |   |    |            |   |   | 3.7                       | %      |   |         |      |   |   |   |   |   |   |   | 3.8 | % |

----

|                                                                          |   | 2010 Compared to 2009 Increase (Decrease) Due To |    |   | 2009 Compared to 2008 Increase (Decrease) Due To |   |   | 2008 Compared to 2007 Increase (Decrease) Due To |   |
|-------------------------------------------------------------------------------|--------|--------------------------------------------------|---------|--------|--------------------------------------------------|--------|--------|--------------------------------------------------|--------|
| (Dollars in thousands on fully taxable equivalent basis)                      |   | Volume                                           |    |   | Rate                                             |   |   | Total                                            |   |   | Volume |   |   | Rate |   |   | Total |   |   | Volume |   |   | Rate |   |   | Total |   |
| Interest Income:                                                              |   |                                             |    |   |                                             |   |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal Funds Sold                                                            |   | $                                                | (73     | )      |                                             | $      | (19    | )                                                |   | $ | (92 | ) |   | $ | 134 |   |   | $ | (44 | ) |   | $ | 90 |   |   | $ | (30 | ) |   | $ | (114 | ) |   | $ | (144 | ) |
| Interest-bearing Deposits                                                     |   |                                             | 119     |   |                                             |   | (104   | )                                                |   |   | 15 |   |   |   | 670 |   |   |   | (1,059 | ) |   |   | (389 | ) |   |   | 468 |   |   |   | (295 | ) |   |   | 173 |   |
| Federal Reserve and Federal Home Loan Bank Stock                              |   |                                             | 32      |   |                                             |   | (159   | )                                                |   |   | (127 | ) |   |   | 458 |   |   |   | (470 | ) |   |   | (12 | ) |   |   | 65 |   |   |   | 27 |   |   |   | 92 |   |
| Securities                                                                    |   |                                             | 6,686   |   |                                             |   | (4,849 | )                                                |   |   | 1,837 |   |   |   | 5,160 |   |   |   | 869 |   |   |   | 6,029 |   |   |   | (3,362 | ) |   |   | 599 |   |   |   | (2,763 | ) |
| Mortgage Loans Held for Sale                                                  |   |                                             | (136    | )      |                                             |   | (34    | )                                                |   |   | (170 | ) |   |   | 646 |   |   |   | (60 | ) |   |   | 586 |   |   |   | (197 | ) |   |   | (84 | ) |   |   | (281 | ) |
| Loans                                                                         |   |                                             | (28,329 | )      |                                             |   | (3,852 | )                                                |   |   | (32,181 | ) |   |   | 32,919 |   |   |   | (26,234 | ) |   |   | 6,685 |   |   |   | 15,017 |   |   |   | (23,782 | ) |   |   | (8,765 | ) |
| Totals                                                                        |   |                                             | (21,701 | )      |                                             |   | (9,017 | )                                                |   |   | (30,718 | ) |   |   | 39,987 |   |   |   | (26,998 | ) |   |   | 12,989 |   |   |   | 11,961 |   |   |   | (23,649 | ) |   |   | (11,688 | ) |
| Interest Expense:                                                             |   |                                             |    |   |                                             |   |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW Accounts                                                                  |   |                                             | 274     |   |                                             |   | (580   | )                                                |   |   | (306 | ) |   |   | 1,441 |   |   |   | (3,361 | ) |   |   | (1,920 | ) |   |   | 778 |   |   |   | (6,286 | ) |   |   | (5,508 | ) |
| Money Market Deposit Accounts                                                 |   |                                             | 275     |   |                                             |   | (1,305 | )                                                |   |   | (1,030 | ) |   |   | 1,680 |   |   |   | (2,084 | ) |   |   | (404 | ) |   |   | 835 |   |   |   | (4,529 | ) |   |   | (3,694 | ) |
| Savings Deposits                                                              |   |                                             | (60     | )      |                                             |   | (347   | )                                                |   |   | (407 | ) |   |   | 187 |   |   |   | (1,043 | ) |   |   | (856 | ) |   |   | 171 |   |   |   | (2,700 | ) |   |   | (2,529 | ) |
| Certificates and other Time Deposits                                          |   |                                             | (10,619 | )      |                                             |   | (6,153 | )                                                |   |   | (16,772 | ) |   |   | 8,428 |   |   |   | (14,438 | ) |   |   | (6,010 | ) |   |   | 1,788 |   |   |   | (12,397 | ) |   |   | (10,609 | ) |
| Borrowings                                                                    |   |                                             | (5,050  | )      |                                             |   | 2,481  |                                             |   |   | (2,569 | ) |   |   | 1,577 |   |   |   | (5,383 | ) |   |   | (3,806 | ) |   |   | 674 |   |   |   | (5,858 | ) |   |   | (5,184 | ) |
| Totals                                                                        |   |                                             | (15,180 | )      |                                             |   | (5,904 | )                                                |   |   | (21,084 | ) |   |   | 13,313 |   |   |   | (26,309 | ) |   |   | (12,996 | ) |   |   | 4,246 |   |   |   | (31,770 | ) |   |   | (27,524 | ) |
| Change in Net Interest Income (Fully Taxable Equivalent Basis)                |   | $                                                | (6,521  | )      |                                             | $      | (3,113 | )                                                |   | $ | (9,634 | ) |   | $ | 26,674 |   |   | $ | (689 | ) |   | $ | 25,985 |   |   | $ | 7,715 |   |   | $ | 8,121 |   |   | $ | 15,836 |   |
| Tax Equivalent Adjustment Using Marginal Rate of 35% for 2010, 2009, and 2008 |   |                                             |    |   |                                             |   |   |                                             |   |   | (143 | ) |   |   |   |   |   |   |   |   |   |   | (2,023 | ) |   |   |   |   |   |   |   |   |   |   | 428 |   |
| Change in Net Interest Income                                                 |   |                                             |    |   |                                             |   |   |                                             |   | $ | (9,777 | ) |   |   |   |   |   |   |   |   |   | $ | 23,962 |   |   |   |   |   |   |   |   |   |   | $ | 16,264 |   |

----

| (Dollars in thousands)                      |   | Amortized Cost |    |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   | Fair Value |   |
|---------------------------------------------|--------|----------------|---------|--------|------------------------|--------|--------|-------------------------|--------|--------|------------|--------|
| Available for sale at December 31, 2010     |   |           |    |   |                   |   |   |                    |   |   |       |   |
| U.S. Government-sponsored agency securities |   | $              | 600     |   |                   | $      | 16     |                    |   |   |       |   | $ | 616 |   |
| State and Municipal                         |   |           | 233,622 |   |                   |   | 7,108  |                    |   | $      | 740        |   |   |   | 239,990 |   |
| Mortgage-backed securities                  |   |           | 293,311 |   |                   |   | 4,293  |                    |   |   | 2,287      |   |   |   | 295,317 |   |
| Corporate obligations                       |   |           | 5,856   |   |                   |   |   |                    |   |   | 5,674      |   |   |   | 182 |   |
| Equity securities                           |   |           | 3,265   |   |                   |   |   |                    |   |   |       |   |   |   | 3,265 |   |
| Total available for sale                    |   |           | 536,654 |   |                   |   | 11,417 |                    |   |   | 8,701      |   |   |   | 539,370 |   |
| Held to maturity at December 31, 2010       |   |           |    |   |                   |   |   |                    |   |   |       |   |   |   |   |   |
| U.S. Treasury                               |   |           |    |   |                   |   |   |                    |   |   |       |   |   |   |   |   |
| State and Municipal                         |   |           | 10,070  |   |                   |   | 389    |                    |   |   | 5          |   |   |   | 10,454 |   |
| Mortgage-backed securities                  |   |           | 277,357 |   |                   |   | 2,064  |                    |   |   | 3,605      |   |   |   | 275,816 |   |
| Total held to maturity                      |   |           | 287,427 |   |                   |   | 2,453  |                    |   |   | 3,610      |   |   |   | 286,270 |   |
| Total Investment Securities                 |   | $              | 824,081 |   |                   | $      | 13,870 |                    |   | $      | 12,311     |   |   | $ | 825,640 |   |

| (Dollars in thousands)                      |   | 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       |   |           |    |   |                   |   |   |                    |   |   |       |   |   |   |   |   |
| U.S. Treasury                               |   |           |    |   |                   |   |   |                    |   |   |       |   |   |   |   |   |
| 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 |   |

| (Dollars in thousands)                      |   | Amortized Cost |    |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   | Fair Value |   |
|---------------------------------------------|--------|----------------|---------|--------|------------------------|--------|--------|-------------------------|--------|--------|------------|--------|
| Available for sale at December 31, 2008     |   |           |    |   |                   |   |   |                    |   |   |       |   |
| U.S. Government-sponsored Agency Securities |   | $              | 15,451  |   |                   | $      | 218    |                    |   |   |       |   | $ | 15,669 |   |
| State and Municipal                         |   |           | 156,426 |   |                   |   | 3,220  |                    |   | $      | 107        |   |   |   | 159,539 |   |
| Mortgage-backed securities                  |   |           | 265,820 |   |                   |   | 4,472  |                    |   |   | 215        |   |   |   | 270,077 |   |
| Corporate obligations                       |   |           | 19,822  |   |                   |   |   |                    |   |   | 8,978      |   |   |   | 10,844 |   |
| Equity securities                           |   |           | 3,507   |   |                   |   |   |                    |   |   |       |   |   |   | 3,507 |   |
| Total available for sale                    |   |           | 461,026 |   |                   |   | 7,910  |                    |   |   | 9,300      |   |   |   | 459,636 |   |
| Held to maturity at December 31, 2008       |   |           |    |   |                   |   |   |                    |   |   |       |   |   |   |   |   |
| U.S. Treasury                               |   |           | 11,675  |   |                   |   |   |                    |   |   | 1          |   |   |   | 11,674 |   |
| State and Municipal                         |   |           | 10,666  |   |                   |   | 93     |                    |   |   | 264        |   |   |   | 10,495 |   |
| Mortgage-backed securities                  |   |           | 7       |   |                   |   |   |                    |   |   |       |   |   |   | 7 |   |
| Total held to maturity                      |   |           | 22,348  |   |                   |   | 93     |                    |   |   | 265        |   |   |   | 22,176 |   |
| Total Investment Securities                 |   | $              | 483,374 |   |                   | $      | 8,003  |                    |   | $      | 9,565      |   |   | $ | 481,812 |   |

----

|                                                             |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| (Dollars in thousands)                                           |   | Cost   |   |   | Yield  |   |   | Cost   |   |   | Yield |   |   | Cost |   |   | Yield |   |
| Federal Reserve and Federal Home Loan Bank Stock at December 31: |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal Reserve Bank Stock                                       |   | $      | 13,522 |   |   |   | 6.0    | %      |   | $ | 13,432 |   |   |   | 6.0 | % |   | $ | 9,276 |   |   |   | 6.0 | % |
| Federal Home Loan Bank Stock                                     |   |   | 20,362 |   |   |   | 1.6    | %      |   |   | 25,144 |   |   |   | 2.5 | % |   |   | 25,043 |   |   |   | 4.3 |   |
| Total                                                            |   | $      | 33,884 |   |   |   | 3.3    | %      |   | $ | 38,576 |   |   |   | 3.7 | % |   | $ | 34,319 |   |   |   | 4.7 | % |

| Securities available for sale December 31, 2010 |   | Within 1 Year |   |   | 1-5 Years |   |   | 5-10 Years |   |
|-------------------------------------------------|--------|---------------|--------|--------|-----------|--------|--------|------------|--------|
| (Dollars in thousands)                          |   | Amount        |   |   | Yield 1   |   |   | Amount     |   |   | Yield 1 |   |   | Amount |   |   | Yield 1 |   |
| U.S. Government-sponsored Agency Securities     |   | $             | 504    |   |      |   | 0.26   | %          |   |   |   |   |   |   |   | $ | 112 |   |   |   | 0.01 | % |
| State and Municipal                             |   |          | 6,928  |   |      |   | 5.23   | %          |   | $ | 19,186 |   |   |   | 6.18 | % |   |   | 49,408 |   |   |   | 6.20 | % |
| Corporate obligations                           |   |          |   |   |      |   |   |       |   |   | 31 |   |   |   | 0.00 | % |   |   |   |   |   |   |   |   |
| Total                                           |   | $             | 7,432  |   |      |   | 5.49   | %          |   | $ | 19,217 |   |   |   | 6.18 | % |   | $ | 49,520 |   |   |   | 6.21 | % |

|                                        |   | Due After Ten Years |    |   | Equity and Mortgage - Backed Securities |   |   | Total  |   |
|---------------------------------------------|--------|---------------------|---------|--------|-----------------------------------------|--------|--------|--------|--------|
| (Dollars in thousands)                      |   | Amount              |    |   | Yield 1                                 |   |   | Amount |   |   | Yield 1 |   |   | Amount |   |   | Yield 1 |   |
| U.S. Government-sponsored Agency Securities |   |                |    |   |                                    |   |   |   |   |   |   |   |   | $ | 616 |   |   |   | 0.22 | % |
| State and Municipal                         |   | $                   | 164,468 |   |                                    |   | 6.44   | %      |   |   |   |   |   |   |   |   | 239,990 |   |   |   | 6.34 | % |
| Marketable Equity Securities                |   |                |    |   |                                    |   |   |   |   | $ | 3,265 |   |   |   | 5.97 | % |   |   | 3,265 |   |   |   | 5.97 | % |
| Corporate obligations                       |   |                | 151     |   |                                    |   | 0.00   | %      |   |   |   |   |   |   |   |   |   |   | 182 |   |   |   | 0.00 | % |
| Mortgage-backed securities                  |   |                |    |   |                                    |   |   |   |   |   | 295,317 |   |   |   | 5.87 | % |   |   | 295,317 |   |   |   | 5.87 | % |
| Total                                       |   | $                   | 164,619 |   |                                    |   | 6.44   | %      |   | $ | 298,582 |   |   |   | 5.87 | % |   | $ | 539,370 |   |   |   | 6.07 | % |

| Securities held to maturity at December 31, 2010 |   | Within 1 Year |   |   | 1-5 Years |   |   | 5-10 Years |   |
|--------------------------------------------------|--------|---------------|--------|--------|-----------|--------|--------|------------|--------|
| (Dollars in thousands)                           |   | Amount        |   |   | Yield 1   |   |   | Amount     |   |   | Yield 1 |   |   | Amount |   |   | Yield 1 |   |
| State and Municipal                              |   | $             | 1,548  |   |      |   | 5.48   | %          |   | $ | 1,065 |   |   |   | 4.79 | % |   | $ | 3,348 |   |   |   | 6.42 | % |
| Total                                            |   | $             | 1,548  |   |      |   | 5.48   | %          |   | $ | 1,065 |   |   |   | 4.79 | % |   | $ | 3,348 |   |   |   | 6.42 | % |

|                       |   | Due After Ten Years |   |   | Equity and Mortgage - Backed Securities |   |   | Total  |   |
|----------------------------|--------|---------------------|--------|--------|-----------------------------------------|--------|--------|--------|--------|
| (Dollars in thousands)     |   | Amount              |   |   | Yield 1                                 |   |   | Amount |   |   | Yield 1 |   |   | Amount |   |   | Yield 1 |   |
| State and Municipal        |   | $                   | 4,109  |   |                                    |   | 8.10   | %      |   |   |   |   |   |   |   | $ | 10,070 |   |   |   | 6.79 | % |
| Mortgage-backed securities |   |                |   |   |                                    |   |   |   |   | $ | 277,357 |   |   |   | 5.85 | % |   |   | 277,357 |   |   |   | 5.85 | % |
| Total                      |   | $                   | 4,109  |   |                                    |   | 8.10   | %      |   | $ | 277,357 |   |   |   | 5.85 | % |   | $ | 287,427 |   |   |   | 5.88 | % |

----

|                                                            |   | Fair Value               |    |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |    |
|-----------------------------------------------------------------|--------|--------------------------|---------|--------|-------------------------|--------|--------|------------|--------|--------|-------------------------|--------|--------|------------|--------|--------|-------------------------|---------|
| (Dollars in Thousands)                                          |   | Less than 12 Months |    |   | 12 Months or Longer     |   |   | Total      |   |
| Temporarily Impaired Investment Securities at December 31, 2010 |   |                     |    |   |                    |   |   |       |   |   |                    |   |   |       |   |   |                    |    |
| State and Municipal                                             |   | $                        | 31,796  |   |                    | $      | (745   | )          |   |   |                    |   |   |       |   | $      | 31,796                  |    |   | $ | (745 | ) |
| Mortgage-backed securities                                      |   |                     | 229,441 |   |                    |   | (5,892 | )          |   | $      | 154                     |   |   |       |   |   |                    | 229,595 |   |   |   | (5,892 | ) |
| Corporate obligations                                           |   |                     |    |   |                    |   |   |       |   |   | 151                     |   |   | $          | (5,674 | )      |                    |    | 151 |   |   |   | (5,674 | ) |
| Total Temporarily Impaired Investment Securities                |   | $                        | 261,237 |   |                    | $      | (6,637 | )          |   | $      | 305                     |   |   | $          | (5,674 | )      |                    | $       | 261,542 |   |   | $ | (12,311 | ) |

|                                                             |   | Fair Value               |    |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |   |
|------------------------------------------------------------------|--------|--------------------------|---------|--------|-------------------------|--------|--------|------------|--------|--------|-------------------------|--------|--------|------------|--------|--------|-------------------------|--------|
| (Dollars in Thousands)                                           |   | 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 | ) |

|                                                             |   | 2010   |      |   | 2009   |   |   | 2008   |   |   | 2007      |   |   | 2006   |   |
|------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|
| (Dollars in thousands)                                           |   | Amount |      |   | %      |   |   | Amount |   |   | %         |   |   | Amount |   |   | % |   |   | Amount |   |   | % |   |   | Amount |   |   | % |   |
| Loans at December 31:                                            |   |   |      |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial and Industrial Loans                                  |   | $      | 530,322   |   |   |   | 18.7   | %      |   | $      | 675,860   |   |   |   | 20.7   | % |   | $ | 904,646 |   |   |   | 24.3 | % |   | $ | 662,701 |   |   |   | 23.0 | % |   | $ | 537,305 |   |   |   | 20.0 | % |
| Agricultural Production Financing and Other Loans to Farmers     |   |   | 95,516    |   |   |   | 3.4    | %      |   |   | 121,031   |   |   |   | 3.7    | % |   |   | 135,099 |   |   |   | 3.6 | % |   |   | 114,324 |   |   |   | 4.0 | % |   |   | 100,098 |   |   |   | 3.7 | % |
| Real Estate Loans:                                               |   |   |      |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction                                                     |   |   | 106,615   |   |   |   | 3.8    | %      |   |   | 158,725   |   |   |   | 4.9    | % |   |   | 252,487 |   |   |   | 6.8 | % |   |   | 165,425 |   |   |   | 5.8 | % |   |   | 169,491 |   |   |   | 6.3 | % |
| Commercial and Farm Land                                         |   |   | 1,229,037 |   |   |   | 43.3   | %      |   |   | 1,276,164 |   |   |   | 39.0   | % |   |   | 1,230,442 |   |   |   | 33.1 | % |   |   | 963,657 |   |   |   | 33.5 | % |   |   | 875,852 |   |   |   | 32.5 | % |
| Residential                                                      |   |   | 724,020   |   |   |   | 25.5   | %      |   |   | 841,584   |   |   |   | 25.7   | % |   |   | 956,245 |   |   |   | 25.7 | % |   |   | 744,627 |   |   |   | 25.9 | % |   |   | 749,921 |   |   |   | 27.9 | % |
| Individuals' Loans for Household and Other Personal Expenditures |   |   | 115,295   |   |   |   | 4.1    | %      |   |   | 154,132   |   |   |   | 4.7    | % |   |   | 201,632 |   |   |   | 5.4 | % |   |   | 187,880 |   |   |   | 6.5 | % |   |   | 223,504 |   |   |   | 8.3 | % |
| Lease Financing Receivables, Net of Unearned Income              |   |   | 5,157     |   |   |   | 0.2    | %      |   |   | 7,135     |   |   |   | 0.2    | % |   |   | 8,996 |   |   |   | 0.2 | % |   |   | 8,351 |   |   |   | 0.3 | % |   |   | 8,010 |   |   |   | 0.3 | % |
| Other Loans                                                      |   |   | 29,721    |   |   |   | 1.0    | %      |   |   | 35,157    |   |   |   | 1.1    | % |   |   | 32,405 |   |   |   | 0.9 | % |   |   | 29,878 |   |   |   | 1.0 | % |   |   | 28,420 |   |   |   | 1.0 | % |
|                                                             |   |   | 2,835,683 |   |   |   | 100.0  | %      |   |   | 3,269,788 |   |   |   | 100.0  | % |   |   | 3,721,952 |   |   |   | 100.0 | % |   |   | 2,876,843 |   |   |   | 100.0 | % |   |   | 2,692,601 |   |   |   | 100.0 | % |
| Allowance for Loan Losses                                        |   |   | (82,977   | )      |   |   |   |   |   |   | (92,131   | )      |   |   |   |   |   |   | (49,543 | ) |   |   |   |   |   |   | (28,228 | ) |   |   |   |   |   |   | (26,540 | ) |   |   |   |   |
| Total Loans                                                      |   | $      | 2,752,706 |   |   |   |   |   |   | $      | 3,177,657 |   |   |   |   |   |   | $ | 3,672,409 |   |   |   |   |   |   | $ | 2,848,615 |   |   |   |   |   |   | $ | 2,666,061 |   |   |   |   |   |

----

| (Dollars in thousands)                                       |   | Maturing Within 1 Year |    |   | Maturing 1-5 Years |   |    | Maturing Over 5 Years |   |   | Total   |   |
|--------------------------------------------------------------|--------|------------------------|---------|--------|--------------------|--------|---------|-----------------------|--------|--------|---------|--------|
| Commercial and Industrial Loans                              |   | $                      | 282,233 |   |               | $      | 181,251 |                  |   | $      | 66,838  |   |   | $ | 530,322 |   |
| Agricultural Production Financing and Other Loans to Farmers |   |                   | 76,978  |   |               |   | 17,363  |                  |   |   | 1,175   |   |   |   | 95,516 |   |
| Real Estate - Construction                                   |   |                   | 74,390  |   |               |   | 30,283  |                  |   |   | 1,942   |   |   |   | 106,615 |   |
| Real Estate - Commercial and Farm Land                       |   |                   | 442,344 |   |               |   | 597,447 |                  |   |   | 189,246 |   |   |   | 1,229,037 |   |
| Other Loans                                                  |   |                   | 18,034  |   |               |   | 11,583  |                  |   |   | 104     |   |   |   | 29,721 |   |
| Total                                                        |   | $                      | 893,979 |   |               | $      | 837,927 |                  |   | $      | 259,305 |   |   | $ | 1,991,211 |   |

| (Dollars in thousands)              |   | Maturing 1-5 Years |    |   | Maturing Over 5 Years |   |
|-------------------------------------|--------|--------------------|---------|--------|-----------------------|--------|
| Loans Maturing After One Year with: |   |               |    |   |                  |   |
| Fixed Rate                          |   | $                  | 432,264 |   |                  | $      | 246,592 |   |
| Variable Rate                       |   |               | 405,663 |   |                  |   | 12,713 |   |
| Total                               |   | $                  | 837,927 |   |                  | $      | 259,305 |   |

|                                     |   | December 31, |    |
|------------------------------------------|--------|--------------|---------|
| (Dollars in thousands)                   |   | 2010         |    |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
| Non-Performing Assets:                   |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-accrual loans                        |   | $            | 90,591  |   |   | $ | 118,409 |   |   | $ | 87,546 |   |   | $ | 29,031 |   |   | $ | 17,926 |   |
| Renegotiated loans                       |   |         | 7,139   |   |   |   | 8,833 |   |   |   | 130 |   |   |   | 145 |   |   |   | 84 |   |
| Non-performing loans (NPL)               |   |         | 97,730  |   |   |   | 127,242 |   |   |   | 87,676 |   |   |   | 29,176 |   |   |   | 18,010 |   |
| Real estate owned and repossessed assets |   |         | 20,927  |   |   |   | 14,879 |   |   |   | 18,458 |   |   |   | 2,573 |   |   |   | 2,159 |   |
| Non-performing assets (NPA)              |   |         | 118,657 |   |   |   | 142,121 |   |   |   | 106,134 |   |   |   | 31,749 |   |   |   | 20,169 |   |
| 90+ days delinquent and still accruing   |   |         | 1,330   |   |   |   | 3,967 |   |   |   | 5,982 |   |   |   | 3,578 |   |   |   | 2,870 |   |
| NPAs & 90+ days delinquent           |   | $            | 119,987 |   |   | $ | 146,088 |   |   | $ | 112,116 |   |   | $ | 35,327 |   |   | $ | 23,039 |   |
| Impaired Loans                           |   | $            | 116,204 |   |   | $ | 178,754 |   |   | $ | 206,126 |   |   | $ | 86,949 |   |   | $ | 60,320 |   |

----

| (Dollars in thousands)                                                                    |   | 2010   |   |   | 2009   |   |    | 2008   |   |   | 2007   |   |   | 2006   |   |
|-------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|
| Allowance for Loans Losses:                                                               |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |
| Balance at January 1                                                                      |   | $      | 92,131 |   |   | $      | 49,543  |   |   | $      | 28,228 |   |   | $      | 26,540 |   |   | $ | 25,188 |   |
| Charge Offs:                                                                              |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial 1                                                                              |   |   | 22,832 |   |   |   | 42,147  |   |   |   | 7,475  |   |   |   | 2,403  |   |   |   | 1,345 |   |
| Commercial Real Estate 2                                                                  |   |   | 32,823 |   |   |   | 34,775  |   |   |   | 6,580  |   |   |   | 2,186  |   |   |   | 698 |   |
| Consumer                                                                                  |   |   | 2,426  |   |   |   | 3,770   |   |   |   | 3,018  |   |   |   | 1,845  |   |   |   | 1,528 |   |
| Residential                                                                               |   |   | 9,437  |   |   |   | 8,491   |   |   |   | 5,536  |   |   |   | 2,123  |   |   |   | 2,915 |   |
| Finance Leases                                                                            |   |   | 54     |   |   |   | 411     |   |   |   | 17     |   |   |   | -      |   |   |   | 24 |   |
| Total Charge offs                                                                         |   |   | 67,572 |   |   |   | 89,594  |   |   |   | 22,626 |   |   |   | 8,557  |   |   |   | 6,510 |   |
| Recoveries:                                                                               |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial 3                                                                              |   |   | 6,750  |   |   |   | 5,248   |   |   |   | 1,354  |   |   |   | 551    |   |   |   | 291 |   |
| Commercial Real Estate 4                                                                  |   |   | 1,420  |   |   |   | 993     |   |   |   | 3,435  |   |   |   | 410    |   |   |   | 315 |   |
| Consumer                                                                                  |   |   | 938    |   |   |   | 1,015   |   |   |   | 1,002  |   |   |   | 437    |   |   |   | 450 |   |
| Residential                                                                               |   |   | 2,827  |   |   |   | 701     |   |   |   | 1,233  |   |   |   | 340    |   |   |   | 548 |   |
| Finance Leases                                                                            |   |   | -      |   |   |   | 9       |   |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Total Recoveries                                                                          |   |   | 11,935 |   |   |   | 7,966   |   |   |   | 7,024  |   |   |   | 1,738  |   |   |   | 1,604 |   |
| Net Charge offs                                                                           |   |   | 55,637 |   |   |   | 81,628  |   |   |   | 15,602 |   |   |   | 6,819  |   |   |   | 4,906 |   |
| Provisions for Loan Losses                                                                |   |   | 46,483 |   |   |   | 122,176 |   |   |   | 28,238 |   |   |   | 8,507  |   |   |   | 6,258 |   |
| Adjustment Related to Acquisition                                                         |   |   | -      |   |   |   | 2,040   |   |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Allowance Acquired in Acquisition                                                         |   |   | -      |   |   |   | -       |   |   |   | 8,679  |   |   |   | -      |   |   |   | - |   |
| Balance at December 31                                                                    |   | $      | 82,977 |   |   | $      | 92,131  |   |   | $      | 49,543 |   |   | $      | 28,228 |   |   | $ | 26,540 |   |
|                                                                                      |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of Net Charge offs During the Period to Average Loans Outstanding During the Period |   |   | 1.82   | %      |   |   | 2.30    | %      |   |   | 0.52   | %      |   |   | 0.24   | % |   |   | 0.19 | % |

|                    |   | 2010   |   |   | 2009    |   |   | 2008   |   |   | 2007    |   |   | 2006   |   |
|-------------------------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|
| (Dollars in thousands)  |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |
| Balance at December 31: |   |   |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial              |   | $      | 32,508 |   |    |   | 23.1   | %      |   | $      | 48,771  |   |   |   | 25.5   | % |   | $ | 16,368 |   |   |   | 28.8 | % |   | $ | 7,928 |   |   |   | 28.0 | % |   | $ | 5,483 |   |   |   | 24.7 | % |
| Commercial Real Estate  |   |   | 36,341 |   |    |   | 47.1   | %      |   |   | 30,188  |   |   |   | 43.9   | % |   |   | 14,408 |   |   |   | 39.8 | % |   |   | 7,211 |   |   |   | 39.3 | % |   |   | 2,846 |   |   |   | 38.8 | % |
| Consumer                |   |   | 3,622  |   |    |   | 4.1    | %      |   |   | 2,242   |   |   |   | 4.7    | % |   |   | 6,608 |   |   |   | 5.5 | % |   |   | 6,086 |   |   |   | 6.5 | % |   |   | 6,229 |   |   |   | 8.3 | % |
| Residential             |   |   | 10,408 |   |    |   | 25.5   | %      |   |   | 10,751  |   |   |   | 25.7   | % |   |   | 12,122 |   |   |   | 25.7 | % |   |   | 7,003 |   |   |   | 25.9 | % |   |   | 11,884 |   |   |   | 27.9 | % |
| Finance Leases          |   |   | 98     |   |    |   | 0.2    | %      |   |   | 179     |   |   |   | 0.2    | % |   |   | 37 |   |   |   | 0.2 | % |   |   | - |   |   |   | 0.3 | % |   |   | 98 |   |   |   | 0.3 | % |
| Totals                  |   | $      | 82,977 |   |    |   | 100.0  | %      |   | $      | 92,131  |   |   |   | 100.0  | % |   | $ | 49,543 |   |   |   | 100.0 | % |   | $ | 28,228 |   |   |   | 100.0 | % |   | $ | 26,540 |   |   |   | 100.0 | % |

----

| (Dollars in thousands)                                                                                        |   | 2010   |    |   | 2009   |   |    | 2008   |   |
|---------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| As of, and for the Year ending December 31:                                                                   |   |   |    |   |   |   |    |   |   |
| Impaired Loans with an Allowance                                                                              |   | $      | 39,887  |   |   | $      | 67,051  |   |   | $ | 25,397 |   |
| Impaired Loans for which the Discounted Cash Flows or Collateral Value Exceeds the Carrying Value of the Loan |   |   | 76,317  |   |   |   | 111,703 |   |   |   | 180,729 |   |
| Total Impaired Loans                                                                                          |   | $      | 116,204 |   |   | $      | 178,754 |   |   | $ | 206,126 |   |
|                                                                                                          |   |   |    |   |   |   |    |   |   |   |   |   |
| Total Impaired Loans as a Percent of Total Loans                                                              |   |   | 4.10    | %      |   |   | 5.47    | %      |   |   | 5.53 | % |
| Allowance for Impaired Loans (Included in the Corporation's Allowance for Loan Losses)                        |   | $      | 13,914  |   |   | $      | 26,279  |   |   | $ | 9,790 |   |
| Average Balance of Impaired Loans                                                                             |   |   | 175,013 |   |   |   | 236,669 |   |   |   | 229,608 |   |
| Interest Income Recognized on Impaired Loans                                                                  |   |   | 4,651   |   |   |   | 7,238   |   |   |   | 8,078 |   |
| Cash Basis Interest Included Above                                                                            |   |   | 2,852   |   |   |   | 2,567   |   |   |   | 997 |   |

----

| (Dollars in thousands)                          |   | Maturing 3 Months or Less |   |   | Maturing 3-6 Months |   |   | Maturing 6-12 Months |   |   | Maturing Over 12 Months |   |   | Total  |   |
|-------------------------------------------------|--------|---------------------------|--------|--------|---------------------|--------|--------|----------------------|--------|--------|-------------------------|--------|--------|--------|--------|
| Certificates of Deposit and Other Time Deposits |   | $                         | 91,340 |   |                | $      | 89,958 |                 |   | $      | 63,884                  |   |   | $      | 89,566 |   |   | $ | 334,748 |   |
| Percent                                         |   |                      | 27     | %      |                |   | 27     | %                    |   |   | 19                      | %      |   |   | 27     | % |   |   | 100 | % |

| (Dollars in thousands)                                           |   | 2010   |    |   | 2009   |   |    | 2008   |   |
|------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Balance at December 31:                                          |   |   |    |   |   |   |    |   |   |
| Securities Sold Under Repurchase Agreements (Short-term Portion) |   | $      | 85,621  |   |   | $      | 101,437 |   |   | $ | 88,061 |   |
| Federal Home Loan Bank Advances  (Short-term Portion)  |   |   | 18,930  |   |   |   | 45,850  |   |   |   | 137,015 |   |
| Total Short-term Borrowings                                      |   | $      | 104,551 |   |   | $      | 147,287 |   |   | $ | 225,076 |   |

| (Dollars in thousands)                                                |   | 2010   |    |   | 2009   |   |    | 2008   |   |
|-----------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Weighted Average Interest Rate on Outstanding Balance at December 31: |   |   |    |   |   |   |    |   |   |
| Securities Sold Under Repurchase Agreements (Short-term Portion)      |   |   | 0.5     | %      |   |   | 0.5     | %      |   |   | 0.3 | % |
| Federal Home Loan Bank Advances (Short-term Portion)                  |   |   | 4.9     |   |   |   | 4.9     |   |   |   | 4.7 |   |
| Total Short-term Borrowings                                           |   |   | 1.3     | %      |   |   | 1.9     | %      |   |   | 3.0 | % |
| Weighted Average Interest Rate During the Year:                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Securities Sold Under Repurchase Agreements (Short-term Portion)      |   |   | 0.7     | %      |   |   | 1.0     | %      |   |   | 1.7 | % |
| Federal Home Loan Bank Advances (Short-term Portion)                  |   |   | 5.4     |   |   |   | 4.7     |   |   |   | 3.2 |   |
| Federal Funds Purchased                                               |   |   | 0.5     |   |   |   | 0.1     |   |   |   | 2.5 |   |
| Total Short-term Borrowings                                           |   |   | 2.0     | %      |   |   | 2.2     | %      |   |   | 2.6 | % |
| Highest Amount Outstanding at Any Month End During the Year:          |   |   |    |   |   |   |    |   |   |   |   |   |
| Securities Sold Under Repurchase Agreements (Short-term Portion)      |   | $      | 93,321  |   |   | $      | 103,352 |   |   | $ | 88,061 |   |
| Federal Home Loan Bank Advances (Short-term Portion)                  |   |   | 47,854  |   |   |   | 104,946 |   |   |   | 234,224 |   |
| Federal Funds Purchased                                               |   |   | 7,746   |   |   |   | 58,110  |   |   |   | 151,356 |   |
| Total Short-term Borrowings                                           |   | $      | 148,921 |   |   | $      | 266,408 |   |   | $ | 473,641 |   |
| Average Amount Outstanding During the Year:                           |   |   |    |   |   |   |    |   |   |   |   |   |
| Securities Sold Under Repurchase Agreements (Short-term Portion)      |   | $      | 83,323  |   |   | $      | 92,931  |   |   | $ | 65,556 |   |
| Federal Home Loan Bank Advances (Short-term Portion)                  |   |   | 33,154  |   |   |   | 65,716  |   |   |   | 116,560 |   |
| Federal Funds Purchased                                               |   |   | 1,125   |   |   |   | 26,995  |   |   |   | 73,956 |   |
| Total Short-term Borrowings                                           |   | $      | 117,602 |   |   | $      | 185,642 |   |   | $ | 256,072 |   |

----

ITEM 

| ·   | The current banking crisis, including the Enactment of EESA and ARRA (American Recovery and Reinvestment Act of 2009) may significantly affect the financial condition, results of operations, liquidity or stock price of the Corporation. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | The Corporation’s business and financial results are significantly affected by general business and economic conditions. |
|---------|--------------------------------------------------------------------------------------------------------------------------------|

| ● | Changes in the domestic interest rate environment could reduce the Corporation’s net interest income. |
|---------|-------------------------------------------------------------------------------------------------------------|

| ● | Changes in the laws, regulations and policies governing banks and financial services companies could alter the Corporation’s business environment and adversely affect operations. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ● | The banking and financial services industry is highly competitive, and competitive pressures could intensify and adversely affect the Corporation’s financial results. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | Acts or threats of terrorism and political or military actions taken by the United States or other governments could adversely affect general economic or industry conditions. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | The Corporation’s allowance for loan losses may not be adequate to cover actual losses. |
|---------|-----------------------------------------------------------------------------------------------|

| ● | The Corporation may suffer losses in its loan portfolio despite its underwriting practices. |
|---------|---------------------------------------------------------------------------------------------|

| ● | The Corporation faces operational risks because the nature of the financial services business involves a high volume of transactions. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------|

| ● | A natural disaster could harm the Corporation’s business. |
|---------|-----------------------------------------------------------------|

----

| ● | The Corporation faces systems failure risks as well as security risks, including “hacking” and “identity theft”. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------|

| ● | The Corporation relies on dividends from its subsidiaries for its liquidity needs. |
|---------|------------------------------------------------------------------------------------|

| ● | The Corporation’s reported financial results depend on management’s selection of accounting methods and certain assumptions and estimates. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | A write-down of all or part of the Corporation’s goodwill could materially reduce its net income and net worth. |
|---------|-----------------------------------------------------------------------------------------------------------------------|

| ● | Changes in accounting standards could materially impact the Corporation’s financial statements. |
|---------|-------------------------------------------------------------------------------------------------------|

| ● | Significant legal actions could subject the Corporation to substantial uninsured liabilities. |
|---------|-----------------------------------------------------------------------------------------------|

----

| ● | Negative publicity could damage the Corporation’s reputation and adversely impact its business and financial results. |
|---------|-----------------------------------------------------------------------------------------------------------------------------|

| ● | Acquisitions may not produce revenue enhancements or cost savings at levels or within timeframes originally anticipated and may result in unforeseen integration difficulties. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | The Corporation may not be able to pay dividends in the future in accordance with past practice. |
|---------|--------------------------------------------------------------------------------------------------|

| ● | The Corporation’s stock price can be volatile. |
|---------|------------------------------------------------------|

ITEM 

----

ITEM 

ITEM 

ITEM 

----

SUPPLEMENTAL 

----

KET

|                        |   | Period Ending |   |
|-----------------------------|--------|---------------|--------|
| Index                       |   | 12/31/05      |   |   | 12/31/06 |   |   | 12/31/07 |   |   | 12/31/08 |   |   | 12/31/09 |   |   | 12/31/10 |   |
| First Merchants Corporation |   |          | 100.00 |   |   |   | 108.47 |   |   |   | 90.75 |   |   |   | 96.23 |   |   |   | 27.29 |   |   |   | 40.91 |   |
| Russell 2000                |   |          | 100.00 |   |   |   | 118.37 |   |   |   | 116.51 |   |   |   | 77.15 |   |   |   | 98.11 |   |   |   | 124.46 |   |
| SNL Bank $1B-$5B            |   |          | 100.00 |   |   |   | 115.72 |   |   |   | 84.29 |   |   |   | 69.91 |   |   |   | 50.11 |   |   |   | 56.81 |   |

----

|           |   | Price Per Share |   |   |   |   |   |                 |   |
|----------------|--------|-----------------|--------|--------|--------|--------|--------|----------------------|--------|
|           |   | HIGH            |   |   | LOW    |   |   | Dividends Declared 1 |   |
| Quarter        |   | 2010            |   |   | 2009   |   |   | 2010                 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
| First Quarter  |   | $               | 6.96   |   |   | $      | 23.43  |                 |   | $ | 5.26 |   |   | $ | 7.36 |   |   | $ | 0.01 |   |   | $ | 0.23 |   |
| Second Quarter |   |            | 9.42   |   |   |   | 13.25  |                 |   |   | 7.09 |   |   |   | 7.75 |   |   |   | 0.01 |   |   |   | 0.08 |   |
| Third Quarter  |   |            | 9.07   |   |   |   | 8.86   |                 |   |   | 7.37 |   |   |   | 6.45 |   |   |   | 0.01 |   |   |   | 0.08 |   |
| Fourth Quarter |   |            | 9.11   |   |   |   | 7.09   |                 |   |   | 7.34 |   |   |   | 5.00 |   |   |   | 0.01 |   |   |   | 0.08 |   |

| Period         |   | Total Number of Shares Purchased |   |   | Average Price Paid per Share |   |   | Total Number of Shares Purchased as part of Publicly announced Plans or Programs1 |   |   | Maximum Number of Shares that may yet be Purchased Under the Plans or Programs2 |   |
|----------------|--------|----------------------------------|--------|--------|------------------------------|--------|--------|-----------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------|--------|
| October, 2010  |   |                             | 0      |   |                         | $      | 0      |                                                                              |   |   | 0                                                                               |   |   |   | 0 |   |
| November, 2010 |   |                             | 0      |   |                         |   | 0      |                                                                              |   |   | 0                                                                               |   |   |   | 0 |   |
| December, 2010 |   |                             | 82     |   |                         |   | 8.86   |                                                                              |   |   | 0                                                                               |   |   |   | 0 |   |

----

| Plan Category                                                 |   | Number of securities to be issued upon exercise of outstanding options, warrants and rights |      |   | Weighted-average exercised price of outstanding options warrants and rights |   |   | Number of securities remaining available for future issuance under equity compensations plans (excluding securities reflected in first column) |   |
|---------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|-----------|--------|-----------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Equity Compensation Plans Approved by Stockholders            |   |                                                                                        | 1,045,217 |   |                                                                        | $      | 23.00  |                                                                                                                                           |   |   | 1,036,675 1 |   |
| Equity Compensation Plans Not Approved by Stockholders 2 |   |                                                                                        | 16,212    |   |                                                                        |   | 23.33  |                                                                                                                                           |   |   | 439,259   |   |
| Total                                                         |   |                                                                                        | 1,061,429 |   |                                                                        | $      | 23.01  |                                                                                                                                           |   |   | 1,475,934 1 |   |

 6. SELECTED 

----

MENT’S 

----

----

|                                                                         |   | December 31, |      |   | December 31, |   |
|------------------------------------------------------------------------------|--------|--------------|-----------|--------|--------------|--------|
| (Dollars in thousands, except per share amounts)                             |   | 2010         |      |   | 2009         |   |
| Average Goodwill                                                             |   | $            | 141,357   |   |         | $      | 141,238 |   |
| Average Core Deposit Intangible (CDI)                                        |   |         | 15,026    |   |         |   | 19,878 |   |
| Average Deferred Tax on CDI                                                  |   |         | (3,385    | )      |         |   | (2,494 | ) |
| Intangible Adjustment                                                        |   | $            | 152,998   |   |         | $      | 158,622 |   |
| Average Stockholders' Equity (GAAP capital)                                  |   | $            | 470,379   |   |         | $      | 477,148 |   |
| Average Cumulative Preferred Stock issued under the Capital Purchase Program |   |         | (89,847   | )      |         |   | (96,518 | ) |
| Intangible Adjustment                                                        |   |         | (152,998  | )      |         |   | (158,622 | ) |
| Average Tangible Capital                                                     |   | $            | 227,534   |   |         | $      | 222,008 |   |
| Average Assets                                                               |   | $            | 4,271,715 |   |         | $      | 4,674,590 |   |
| Intangible Adjustment                                                        |   |         | (152,998  | )      |         |   | (158,622 | ) |
| Average Tangible Assets                                                      |   | $            | 4,118,717 |   |         | $      | 4,515,968 |   |
| Net Income (Loss) available to Common Stockholders                           |   | $            | 11,722    |   |         | $      | (45,742 | ) |
| CDI amortization, net of tax                                                 |   |         | 2,852     |   |         |   | 3,097 |   |
| Tangible Net Income (Loss) available to Common Stockholders                  |   | $            | 14,574    |   |         | $      | (42,645 | ) |
| Diluted Earnings Per Share                                                   |   | $            | 0.48      |   |         | $      | (2.17 | ) |
| Diluted Tangible Earnings Per Share                                          |   | $            | 0.60      |   |         | $      | (2.02 | ) |
| Return on Average GAAP Capital                                               |   |         | 2.49      | %      |         |   | -9.59 | % |
| Return on Average Tangible Capital                                           |   |         | 6.40      | %      |         |   | -19.21 | % |
| Return on Average Assets                                                     |   |         | 0.27      | %      |         |   | -0.98 | % |
| Return on Average Tangible Assets                                            |   |         | 0.35      | %      |         |   | -0.94 | % |

----

| (Dollars in thousands)                                                                    |   | 2010   |   |   | 2009   |   |    | 2008   |   |
|-------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|
| Allowance for Loan Losses:                                                                |   |   |   |   |   |   |    |   |   |
| Balance at January 1                                                                      |   | $      | 92,131 |   |   | $      | 49,543  |   |   | $ | 28,228 |   |
| Charge Offs                                                                               |   |   | 67,572 |   |   |   | 89,594  |   |   |   | 22,626 |   |
| Recoveries                                                                                |   |   | 11,935 |   |   |   | 7,966   |   |   |   | 7,024 |   |
| Net Charge offs                                                                           |   |   | 55,637 |   |   |   | 81,628  |   |   |   | 15,602 |   |
| Provision for Loan Losses                                                                 |   |   | 46,483 |   |   |   | 122,176 |   |   |   | 28,238 |   |
| Adjustment related to acquisition                                                         |   |   |   |   |   |   | 2,040   |   |   |   |   |   |
| Allowance Acquired in Acquisition                                                         |   |   |   |   |   |   |    |   |   |   | 8,679 |   |
| Balance at December 31                                                                    |   | $      | 82,977 |   |   | $      | 92,131  |   |   | $ | 49,543 |   |
| Ratio of Net Charge offs During the Period to Average Loans Outstanding During the Period |   |   | 1.82   | %      |   |   | 2.30    | %      |   |   | 0.52 | % |
| Ratio of Allowance to Non-Accrual Loans                                                   |   |   | 91.60  | %      |   |   | 77.81   | %      |   |   | 56.59 | % |

| (Dollars in thousands)                                          |   | December 31, 2010 |   |   | December 31, 2009 |   |   | December 31, 2008 |   |
|-----------------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|--------|-------------------|--------|
| Net Charge Offs:                                                |   |              |   |   |              |   |   |              |   |
| Commercial and industrial loans                                 |   | $                 | 15,091 |   |              | $      | 36,029 |              |   | $ | 5,824 |   |
| Agricultural production financing and other loans to farmers    |   |              | 991    |   |              |   | 870    |              |   |   | 78 |   |
| Real estate loans                                               |   |              |   |   |              |   |   |              |   |   |   |   |
| Construction                                                    |   |              | 4,550  |   |              |   | 14,329 |              |   |   | 1,422 |   |
| Commercial and farm land                                        |   |              | 26,853 |   |              |   | 19,453 |              |   |   | 1,723 |   |
| Residential                                                     |   |              | 6,610  |   |              |   | 7,790  |              |   |   | 4,303 |   |
| Individuals loans for household and other personal expenditures |   |              | 1,488  |   |              |   | 2,755  |              |   |   | 2,016 |   |
| Lease financing receivables, net of unearned income             |   |              | 54     |   |              |   | 402    |              |   |   | 17 |   |
| Other Loans                                                     |   |              |   |   |              |   |   |              |   |   | 219 |   |
| Total Net Charge Offs                                           |   | $                 | 55,637 |   |              | $      | 81,628 |              |   | $ | 15,602 |   |

----

|                                                     |   | December 31, |    |   | December 31, |   |
|----------------------------------------------------------|--------|--------------|---------|--------|--------------|--------|
| (Dollars in thousands)                                   |   | 2010         |    |   | 2009         |   |
| Non-Performing Assets:                                   |   |         |    |   |         |   |
| Non-accrual loans                                        |   | $            | 90,591  |   |         | $      | 118,409 |   |
| Renegotiated loans                                       |   |         | 7,139   |   |         |   | 8,833 |   |
| Non-performing loans (NPL)                               |   |         | 97,730  |   |         |   | 127,242 |   |
| Real estate owned and repossessed assets                 |   |         | 20,927  |   |         |   | 14,879 |   |
| Non-performing assets (NPA)                              |   |         | 118,657 |   |         |   | 142,121 |   |
| 90+ days delinquent and still accruing                   |   |         | 1,330   |   |         |   | 3,967 |   |
| NPAs & 90+ days delinquent                           |   | $            | 119,987 |   |         | $      | 146,088 |   |
| Impaired Loans (includes substandard, doubtful and loss) |   | $            | 116,204 |   |         | $      | 178,754 |   |

|                                                            |   | December 31, |    |   | December 31, |   |
|-----------------------------------------------------------------|--------|--------------|---------|--------|--------------|--------|
| (Dollars in thousands)                                          |   | 2010         |    |   | 2009         |   |
| Non Performing Assets and 90+ Days Delinquent:                  |   |         |    |   |         |   |
| Commercial and industrial loans                                 |   | $            | 10,499  |   |         | $      | 41,338 |   |
| Agricultural production financing and other loans to farmers    |   |         | 544     |   |         |   | - |   |
| Real estate loans                                               |   |         |    |   |         |   |   |   |
| Construction                                                    |   |         | 28,907  |   |         |   | 28,023 |   |
| Commercial and farm land                                        |   |         | 54,297  |   |         |   | 52,795 |   |
| Residential                                                     |   |         | 25,339  |   |         |   | 23,404 |   |
| Individuals loans for household and other personal expenditures |   |         | 401     |   |         |   | 184 |   |
| Other loans                                                     |   |         | -       |   |         |   | 344 |   |
| Non performing assets plus 90+ days delinquent                  |   | $            | 119,987 |   |         | $      | 146,088 |   |

----

| (Dollars in thousands)                                                                                                          |   | December 31, 2010 |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|
| Allowance Balances:                                                                                                             |   | Commercial        |   |   | Commercial Real Estate |   |   | Consumer |   |   | Residential |   |   | Finance Leases |   |   | Total |   |
|         Individually evaluated for impairment                                           |   | $                 | 5,726  |   |   | $ | 7,545 |   |   | $ | - |   |   | $ | 643 |   |   | $ | - |   |   | $ | 13,914 |   |
|         Collectively evaluated for impairment                                           |   |              | 26,782 |   |   |   | 28,796 |   |   |   | 3,622 |   |   |   | 9,765 |   |   |   | 98 |   |   |   | 69,063 |   |
|         Acquired with deteriorated credit quality                                       |   |              | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                 Total Allowance for Loan Losses |   | $                 | 32,508 |   |   | $ | 36,341 |   |   | $ | 3,622 |   |   | $ | 10,408 |   |   | $ | 98 |   |   | $ | 82,977 |   |

| (Dollars in thousands)                                                                                                          |   | December 31, 2009 |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|
| Allowance Balances:                                                                                                             |   | Commercial        |   |   | Commercial Real Estate |   |   | Consumer |   |   | Residential |   |   | Finance Leases |   |   | Total |   |
|         Individually evaluated for impairment                                           |   | $                 | 14,046 |   |   | $ | 9,676 |   |   | $ | - |   |   | $ | 2,557 |   |   | $ | - |   |   | $ | 26,279 |   |
|         Collectively evaluated for impairment                                           |   |              | 34,725 |   |   |   | 20,512 |   |   |   | 2,242 |   |   |   | 8,194 |   |   |   | 179 |   |   |   | 65,852 |   |
|         Acquired with deteriorated credit quality                                       |   |              | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                 Total Allowance for Loan Losses |   | $                 | 48,771 |   |   | $ | 30,188 |   |   | $ | 2,242 |   |   | $ | 10,751 |   |   | $ | 179 |   |   | $ | 92,131 |   |

----

| ·   | The Corporation’s minimal free float driven by large index fund positions, coupled with meaningful long-term retail holdings, has created unusual volatility in the stock price given modest fundamental changes in demand and appears to be impacting the price as well. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Lower trading volumes have also put downward pressure on the Corporation’s stock price.  The average daily volume of the Corporation’s stock for the 2010, as a percent of average outstanding shares, was more than 40 percent less than the average daily volume during 2009. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                              |   | December 31, |    |
|-----------------------------------|--------|--------------|---------|
| (Dollars in thousands)            |   | 2010         |    |
| Amounts of Commitments:           |   |         |    |
| Loan Commitments to Extend Credit |   | $            | 531,752 |   |
| Standby Letters of Credit         |   |         | 37,713  |   |
|                              |   | $            | 569,465 |   |

----

| (Dollars in thousands)                                         |   | 2011   |    |   | 2012   |   |    | 2013   |   |   | 2014   |   |   | 2015   |   |   | 2016 and after |   |   | Total  |   |
|----------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|----------------|--------|--------|--------|--------|
| Operating Leases                                               |   | $      | 2,153   |   |   | $      | 1,761   |   |   | $      | 1,004  |   |   | $      | 866    |   |           | $      | 692    |   |   | $ | 395 |   |   | $ | 6,871 |   |
| Securities Sold Under Repurchase Agreements                    |   |   | 85,621  |   |   |   | 14,250  |   |   |   |   |   |   |   | 10,000 |   |           |   |   |   |   |   |   |   |   |   | 109,871 |   |
| Federal Home Loan Bank Advances                                |   |   | 18,930  |   |   |   | 50,092  |   |   |   | 226    |   |   |   | 1,270  |   |           |   | 2,000  |   |   |   | 10,166 |   |   |   | 82,684 |   |
| Subordinated Debentures, Revolving Credit Lines and Term Loans |   |   | 272     |   |   |   | 78,980  |   |   |   |   |   |   |   |   |   |           |   | 55,000 |   |   |   | 92,188 |   |   |   | 226,440 |   |
| Total                                                          |   | $      | 106,976 |   |   | $      | 145,083 |   |   | $      | 1,230  |   |   | $      | 12,136 |   |           | $      | 57,692 |   |   | $ | 102,749 |   |   | $ | 425,866 |   |

|                                                           |   |  At December 31, 2010 |      |
|----------------------------------------------------------------|--------|----------------------------|-----------|
| (Dollars in thousands)                                         |   | 1-180 Days                 |      |   | 181-365 Days |   |   | 1-5 Years |   |   | Beyond 5 Years |   |   | Total |   |
| Rate-Sensitive Assets:                                         |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal Funds Sold                                             |   | $                          | 7,463     |   |   |   |   |   |   |   |   |   |   |   | $ | 7,463 |   |
| Interest-bearing Deposits                                      |   |                       | 65,216    |   |   |   |   |   |   |   |   |   |   |   |   | 65,216 |   |
| Investment Securities                                          |   |                       | 75,776    |   |   | $ | 66,450 |   |   | $ | 235,040 |   |   | $ | 449,531 |   |   |   | 826,797 |   |
| Loans                                                          |   |                       | 1,350,546 |   |   |   | 328,810 |   |   |   | 968,166 |   |   |   | 126,653 |   |   |   | 2,774,175 |   |
| Federal Reserve and Federal Home Loan Bank Stock               |   |                       |      |   |   |   |   |   |   |   | 33,884 |   |   |   |   |   |   |   | 33,884 |   |
| Total Rate-sensitive Assets                                    |   | $                          | 1,499,001 |   |   | $ | 395,260 |   |   | $ | 1,237,090 |   |   | $ | 576,184 |   |   | $ | 3,707,535 |   |
| Rate-Sensitive Liabilities:                                    |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing Deposits                                      |   |                       | 2,014,708 |   |   |   | 309,479 |   |   |   | 346,568 |   |   |   | 14,429 |   |   |   | 2,685,184 |   |
| Securities Sold Under Repurchase Agreements                    |   |                       | 85,621    |   |   |   |   |   |   |   | 24,250 |   |   |   |   |   |   |   | 109,871 |   |
| Federal Home Loan Bank Advances                                |   |                       | 9,313     |   |   |   | 11,409 |   |   |   | 54,458 |   |   |   | 7,504 |   |   |   | 82,684 |   |
| Subordinated Debentures, Revolving Credit Lines and Term Loans |   |                       | 55,000    |   |   |   |   |   |   |   | 167,045 |   |   |   | 4,395 |   |   |   | 226,440 |   |
| Total Rate-sensitive Liabilities                               |   | $                          | 2,164,642 |   |   | $ | 320,888 |   |   | $ | 592,321 |   |   | $ | 26,328 |   |   | $ | 3,104,179 |   |
| Interest Rate Sensitivity Gap by Period                        |   | $                          | (665,641  | ) |   | $ | 74,372 |   |   | $ | 644,769 |   |   | $ | 549,856 |   |   |   |   |   |
| Cumulative Rate Sensitivity Gap                                |   | $                          | (665,641  | ) |   | $ | (591,269 | ) |   | $ | 53,500 |   |   | $ | 603,356 |   |   |   |   |   |
| Cumulative Rate Sensitivity Gap Ratio                          |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| at December 31, 2010                                           |   |                       | 69.2      | % |   |   | 76.2 | % |   |   | 101.7 | % |   |   | 119.4 | % |   |   |   |   |
| at December 31, 2009                                           |   |                       | 77.4      | % |   |   | 80.8 | % |   |   | 103.7 | % |   |   | 116.9 | % |   |   |   |   |

----

|           | At December 31, 2010 |
|----------------|----------------------|
|           | RISING               |   | FALLING |
| Driver Rates   | (200 Basis Points)   |   | (100 Basis Points) |
| Prime          | 200                  |   | 0 |
| Federal Funds  | 200                  |   | 0 |
| One-Year CMT   | 200                  |   | (3) |
| Three-Year CMT | 200                  |   | (37) |
| Five-Year CMT  | 200                  |   | (77) |
| CD's           | 200                  |   | (59) |
| FHLB           | 200                  |   | (47) |

|                        |   | At December 31, 2010 |    |
|-----------------------------|--------|----------------------|---------|
|                        |   |                 |    |   | RISING |   |   | FALLING |   |
| (Dollars in thousands)      |   | Base                 |    |   | (200 Basis Points) |   |   | (100 Basis Points) |   |
| Net Interest Income         |   | $                    | 144,603 |   |   | $ | 147,478 |   |   | $ | 140,811 |   |
| Variance from Base          |   |                 |    |   |   | $ | 2,875 |   |   | $ | (3,792 | ) |
| Percent of Change from Base |   |                 | 0.00    | % |   |   | 1.99 | % |   |   | -2.62 | % |

|           | 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           | 200                  |   | (37) |

|                        |   | At December 31, 2009 |    |
|-----------------------------|--------|----------------------|---------|
|                        |   |                 |    |   | RISING |   |   | FALLING |   |
| (Dollars in thousands)      |   | 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 | % |

----

|                                             |   | December 31, |      |
|--------------------------------------------------|--------|--------------|-----------|
| (Dollars in thousands)                           |   | 2010         |      |   | 2009 |   |
| Federal Funds Sold                               |   | $            | 7,463     |   |   | $ | 102,346 |   |
| Interest-bearing Time Deposits                   |   |         | 65,216    |   |   |   | 74,025 |   |
| Investment Securities Available for Sale         |   |         | 539,370   |   |   |   | 413,607 |   |
| Investment Securities Held to Maturity           |   |         | 287,427   |   |   |   | 149,510 |   |
| Mortgage Loans Held for Sale                     |   |         | 21,469    |   |   |   | 8,036 |   |
| Loans                                            |   |         | 2,835,683 |   |   |   | 3,269,788 |   |
| Federal Reserve and Federal Home Loan Bank Stock |   |         | 33,884    |   |   |   | 38,576 |   |
| Total                                            |   | $            | 3,790,512 |   |   | $ | 4,055,888 |   |

|                                                           |   | December 31, |      |
|----------------------------------------------------------------|--------|--------------|-----------|
| (Dollars in thousands)                                         |   | 2010         |      |   | 2009 |   |
| Deposits                                                       |   | $            | 3,268,880 |   |   | $ | 3,536,536 |   |
| Securities Sold Under Repurchase Agreements                    |   |         | 109,871   |   |   |   | 125,687 |   |
| Federal Home Loan Bank Advances                                |   |         | 82,684    |   |   |   | 129,749 |   |
| Subordinated Debentures, Revolving Credit Lines and Term Loans |   |         | 226,440   |   |   |   | 194,790 |   |
|                                                           |   | $            | 3,687,875 |   |   | $ | 3,986,762 |   |

| (Dollars in thousands)                                           |   | 2010   |      |   | 2009   |   |      | 2008   |   |
|------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Net Interest Income                                              |   | $      | 143,569   |   |   | $      | 153,346   |   |   | $ | 129,384 |   |
| FTE Adjustment                                                   |   | $      | 5,865     |   |   | $      | 5,722     |   |   | $ | 3,699 |   |
| Net Interest Income on a Fully Taxable Equivalent Basis          |   | $      | 149,434   |   |   | $      | 159,068   |   |   | $ | 133,083 |   |
| Average Earning Assets                                           |   | $      | 3,862,493 |   |   | $      | 4,245,134 |   |   | $ | 3,463,477 |   |
| Interest Income (FTE) as a Percent of Average Earning Assets     |   |   | 5.32      | %      |   |   | 5.56      | %      |   |   | 6.44 | % |
| Interest Expense as a Percent of Average Earning Assets          |   |   | 1.45      | %      |   |   | 1.82      | %      |   |   | 2.60 | % |
| Net Interest Income (FTE) as a percent of Average Earning Assets |   |   | 3.87      | %      |   |   | 3.74      | %      |   |   | 3.84 | % |

----

ITEM 7A. QUANTITATIVE 

----

ITEM 8. FINANCIAL 

----

|                                                                             |   | December 31, |      |
|----------------------------------------------------------------------------------|--------|--------------|-----------|
| (Dollars in thousands, except share data)                                        |   | 2010         |      |   | 2009 |   |
| ASSETS                                                                           |   |         |      |   |   |   |
| Cash and due from banks                                                          |   | $            | 50,844    |   |   | $ | 76,801 |   |
| Federal funds sold                                                               |   |         | 7,463     |   |   |   | 102,346 |   |
| Cash and cash equivalents                                                        |   |         | 58,307    |   |   |   | 179,147 |   |
| Interest-bearing time deposits                                                   |   |         | 65,216    |   |   |   | 74,025 |   |
| Investment securities available for sale                                         |   |         | 539,370   |   |   |   | 413,607 |   |
| Investment securities held to maturity (fair value of $286,270 and $147,336)     |   |         | 287,427   |   |   |   | 149,510 |   |
| Mortgage loans held for sale                                                     |   |         | 21,469    |   |   |   | 8,036 |   |
| Loans                                                                            |   |         | 2,835,683 |   |   |   | 3,269,788 |   |
| Less: Allowance for loan losses                                                  |   |         | (82,977   | ) |   |   | (92,131 | ) |
|            Net loans      |   |         | 2,752,706 |   |   |   | 3,177,657 |   |
| Premises and equipment                                                           |   |         | 52,450    |   |   |   | 55,804 |   |
| Federal Reserve and Federal Home Loan Bank stock                                 |   |         | 33,884    |   |   |   | 38,576 |   |
| Interest receivable                                                              |   |         | 18,674    |   |   |   | 20,818 |   |
| Core deposit intangibles                                                         |   |         | 12,662    |   |   |   | 17,383 |   |
| Goodwill                                                                         |   |         | 141,357   |   |   |   | 141,357 |   |
| Cash surrender value of life insurance                                           |   |         | 96,731    |   |   |   | 94,636 |   |
| Other real estate owned                                                          |   |         | 20,927    |   |   |   | 14,879 |   |
| Tax asset, deferred and receivable                                               |   |         | 45,623    |   |   |   | 64,394 |   |
| Other assets                                                                     |   |         | 24,045    |   |   |   | 31,123 |   |
| TOTAL ASSETS                                                                     |   | $            | 4,170,848 |   |   | $ | 4,480,952 |   |
| LIABILITIES                                                                      |   |         |      |   |   |   |   |   |
| Deposits:                                                                        |   |         |      |   |   |   |   |   |
| Noninterest-bearing                                                              |   | $            | 583,696   |   |   | $ | 516,487 |   |
| Interest-bearing                                                                 |   |         | 2,685,184 |   |   |   | 3,020,049 |   |
| Total Deposits                                                                   |   |         | 3,268,880 |   |   |   | 3,536,536 |   |
| Borrowings:                                                                      |   |         |      |   |   |   |   |   |
| Securities sold under repurchase agreements                                      |   |         | 109,871   |   |   |   | 125,687 |   |
| Federal Home Loan Bank advances                                                  |   |         | 82,684    |   |   |   | 129,749 |   |
| Subordinated debentures, revolving credit lines and term loans                   |   |         | 226,440   |   |   |   | 194,790 |   |
| Total Borrowings                                                                 |   |         | 418,995   |   |   |   | 450,226 |   |
| Interest payable                                                                 |   |         | 4,262     |   |   |   | 5,711 |   |
| Other liabilities                                                                |   |         | 24,303    |   |   |   | 24,694 |   |
| Total Liabilities                                                                |   |         | 3,716,440 |   |   |   | 4,017,167 |   |
| COMMITMENTS AND CONTINGENT LIABILITIES                                           |   |         |      |   |   |   |   |   |
| STOCKHOLDERS' EQUITY                                                             |   |         |      |   |   |   |   |   |
| Preferred Stock, no-par value:                                                   |   |         |      |   |   |   |   |   |
| Authorized -- 500,000 shares                                                     |   |         |      |   |   |   |   |   |
| Series A, Issued and outstanding - 69,600 and 116,000 shares                     |   |         | 67,880    |   |   |   | 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 -  25,574,251 and 21,227,741 shares |   |         | 3,197     |   |   |   | 2,653 |   |
| Additional paid-in capital                                                       |   |         | 232,503   |   |   |   | 206,600 |   |
| Retained earnings                                                                |   |         | 160,860   |   |   |   | 150,860 |   |
| Accumulated other comprehensive loss                                             |   |         | (10,157   | ) |   |   | (8,826 | ) |
| Total Stockholders' Equity                                                       |   |         | 454,408   |   |   |   | 463,785 |   |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                       |   | $            | 4,170,848 |   |   | $ | 4,480,952 |   |

----

|                                                                  |   | December 31, |    |
|-----------------------------------------------------------------------|--------|--------------|---------|
| (Dollars in thousands, except share data)                             |   | 2010         |    |   | 2009 |   |   | 2008 |   |
| INTEREST INCOME                                                       |   |         |    |   |   |   |   |   |   |
| Loans receivable:                                                     |   |         |    |   |   |   |   |   |   |
| Taxable                                                               |   | $            | 174,070 |   |   | $ | 205,616 |   |   | $ | 198,385 |   |
| Tax-exempt                                                            |   |         | 515     |   |   |   | 1,038 |   |   |   | 1,013 |   |
| Investment securities:                                                |   |         |    |   |   |   |   |   |   |   |   |   |
| Taxable                                                               |   |         | 12,957  |   |   |   | 12,335 |   |   |   | 12,046 |   |
| Tax-exempt                                                            |   |         | 10,377  |   |   |   | 9,587 |   |   |   | 5,855 |   |
| Federal funds sold                                                    |   |         | 26      |   |   |   | 118 |   |   |   | 28 |   |
| Deposits with financial institutions                                  |   |         | 381     |   |   |   | 366 |   |   |   | 755 |   |
| Federal Reserve and Federal Home Loan Bank stock                      |   |         | 1,252   |   |   |   | 1,379 |   |   |   | 1,391 |   |
| Total Interest Income                                                 |   |         | 199,578 |   |   |   | 230,439 |   |   |   | 219,473 |   |
| INTEREST EXPENSE                                                      |   |         |    |   |   |   |   |   |   |   |   |   |
| Deposits                                                              |   |         | 39,876  |   |   |   | 58,391 |   |   |   | 67,581 |   |
| Federal funds purchased                                               |   |         | 5       |   |   |   | 28 |   |   |   | 1,856 |   |
| Securities sold under repurchase agreements                           |   |         | 1,712   |   |   |   | 1,997 |   |   |   | 2,600 |   |
| Federal Home Loan Bank advances                                       |   |         | 5,368   |   |   |   | 9,232 |   |   |   | 11,168 |   |
| Subordinated debentures, revolving credit lines and term loans        |   |         | 9,048   |   |   |   | 7,445 |   |   |   | 6,884 |   |
| Total Interest Expense                                                |   |         | 56,009  |   |   |   | 77,093 |   |   |   | 90,089 |   |
| NET INTEREST INCOME                                                   |   |         | 143,569 |   |   |   | 153,346 |   |   |   | 129,384 |   |
| Provision for loan losses                                             |   |         | 46,483  |   |   |   | 122,176 |   |   |   | 28,238 |   |
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                   |   |         | 97,086  |   |   |   | 31,170 |   |   |   | 101,146 |   |
| OTHER INCOME                                                          |   |         |    |   |   |   |   |   |   |   |   |   |
| Service charges on deposit accounts                                   |   |         | 13,283  |   |   |   | 15,128 |   |   |   | 13,002 |   |
| Fiduciary activities                                                  |   |         | 7,692   |   |   |   | 7,409 |   |   |   | 8,031 |   |
| Other customer fees                                                   |   |         | 8,990   |   |   |   | 7,922 |   |   |   | 6,776 |   |
| Commission income                                                     |   |         | 6,225   |   |   |   | 6,397 |   |   |   | 5,824 |   |
| Earnings on cash surrender value of life insurance                    |   |         | 2,098   |   |   |   | 1,614 |   |   |   | (267 | ) |
| Net gains and fees on sales of loans                                  |   |         | 6,806   |   |   |   | 6,849 |   |   |   | 2,490 |   |
| Net realized gains on sales of available for sale securities          |   |         | 3,406   |   |   |   | 11,141 |   |   |   | 599 |   |
| Other-than-temporary impairment on available for sale securities      |   |         | (3,049  | ) |   |   | (11,134 | ) |   |   | (2,682 | ) |
| Portion of loss recognized in other comprehensive income before taxes |   |         | 1,505   |   |   |   | 4,405 |   |   |   |   |   |
| Net impairment losses recognized in earnings                          |   |         | (1,544  | ) |   |   | (6,729 | ) |   |   | (2,682 | ) |
| Other income                                                          |   |         | 1,588   |   |   |   | 1,470 |   |   |   | 2,594 |   |
| Total Other Income                                                    |   |         | 48,544  |   |   |   | 51,201 |   |   |   | 36,367 |   |
| OTHER EXPENSES                                                        |   |         |    |   |   |   |   |   |   |   |   |   |
| Salaries and employee benefits                                        |   |         | 73,253  |   |   |   | 76,325 |   |   |   | 63,006 |   |
| Net occupancy                                                         |   |         | 9,935   |   |   |   | 10,250 |   |   |   | 7,711 |   |
| Equipment                                                             |   |         | 7,323   |   |   |   | 7,595 |   |   |   | 6,659 |   |
| Marketing                                                             |   |         | 1,970   |   |   |   | 2,134 |   |   |   | 2,311 |   |
| Outside data processing fees                                          |   |         | 5,093   |   |   |   | 6,186 |   |   |   | 4,087 |   |
| Printing and office supplies                                          |   |         | 1,259   |   |   |   | 1,419 |   |   |   | 1,214 |   |
| Core deposit amortization                                             |   |         | 4,721   |   |   |   | 5,109 |   |   |   | 3,216 |   |
| FDIC assessments                                                      |   |         | 8,121   |   |   |   | 10,394 |   |   |   | 857 |   |
| Other real estate owned and credit-related expenses                   |   |         | 12,436  |   |   |   | 9,823 |   |   |   | 2,785 |   |
| Other expenses                                                        |   |         | 18,200  |   |   |   | 22,323 |   |   |   | 16,946 |   |
| Total Other Expenses                                                  |   |         | 142,311 |   |   |   | 151,558 |   |   |   | 108,792 |   |
| INCOME (LOSS) BEFORE INCOME TAX                                       |   |         | 3,319   |   |   |   | (69,187 | ) |   |   | 28,721 |   |
| Income tax expense (benefit)                                          |   |         | (3,590  | ) |   |   | (28,424 | ) |   |   | 8,083 |   |
| NET INCOME (LOSS)                                                     |   |         | 6,909   |   |   |   | (40,763 | ) |   |   | 20,638 |   |
| Gain on exchange of preferred stock for trust preferred debt          |   |         | 10,052  |   |   |   |   |   |   |   |   |   |
| Preferred stock dividends and discount accretion                      |   |         | (5,239  | ) |   |   | (4,979 | ) |   |   |   |   |
| NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS                    |   | $            | 11,722  |   |   | $ | (45,742 | ) |   | $ | 20,638 |   |
|                                                                  |   |         |    |   |   |   |   |   |   |   |   |   |
| NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS PER SHARE:         |   |         |    |   |   |   |   |   |   |
| Basic                                                                 |   | $            | 0.48    |   |   | $ | (2.17 | ) |   | $ | 1.14 |   |
| Diluted                                                               |   | $            | 0.48    |   |   | $ | (2.17 | ) |   | $ | 1.14 |   |

----

|                                                                                                                                                                                          |   | December 31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
| (Dollars in thousands, except share data)                                                                                                                                                     |   | 2010         |   |   | 2009 |   |   | 2008 |   |
| Net income (loss)                                                                                                                                                                             |   | $            | 6,909  |   |   | $ | (40,763 | ) |   | $ | 20,638 |   |
| Other comprehensive income (loss), net of tax:                                                                                                                                                |   |         |   |   |   |   |   |   |   |   |   |   |
| Unrealized holding gain (loss) on securities available for sale arising during the period, net of tax of $106, ($5,587) and $1,356                                                            |   |         | (197   | ) |   |   | 10,376 |   |   |   | (2,518 | ) |
| Unrealized gain (loss) on securities available for sale for which a portion of an other-than-temporary impairment has been recognized in income, net of tax of  $539, $1,333 and $0 |   |         | (1,001 | ) |   |   | (2,476 | ) |   |   |   |   |
| Unrealized gains (losses) on cash flow hedges:                                                                                                                                                |   |         |   |   |   |   |   |   |   |   |   |   |
| Unrealized gains (losses) arising during the period, net of tax of ($155), $622 and ($1)                                                                                                      |   |         | 288    |   |   |   | (933 | ) |   |   | 2 |   |
| Reclassification adjustment for gains (losses) included in net income net of tax of $652, $1,544 and ($833)                                                                                   |   |         | (1,210 | ) |   |   | (2,868 | ) |   |   | 1,250 |   |
| Defined Benefit Pension Plans, net of tax of  ($526), ($1,826) and $7,689                                                                                                           |   |         |   |   |   |   |   |   |   |   |   |   |
| Net Gain Arising During Period                                                                                                                                                                |   |         | 156    |   |   |   | 3,043 |   |   |   | (11,518 | ) |
| Prior Service Cost Arising During Period                                                                                                                                                      |   |         | 583    |   |   |   | (326 | ) |   |   |   |   |
| Amortization of Prior Service Cost                                                                                                                                                            |   |         | 50     |   |   |   | 22 |   |   |   | (15 | ) |
|                                                                                                                                                                                          |   |         | (1,331 | ) |   |   | 6,838 |   |   |   | (12,799 | ) |
| Comprehensive income (loss)                                                                                                                                                                   |   | $            | 5,578  |   |   | $ | (33,925 | ) |   | $ | 7,839 |   |

|                                                                                                                                         |   | December 31, |    |   | December 31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------|--------|
| (Dollars in thousands)                                                                                                                       |   | 2010         |    |   | 2009         |   |
| Net unrealized gain (loss) on securities available for sale                                                                                  |   | $            | 2,767   |   |         | $      | 6,650 |   |
|                                                                                                                                         |   |         |    |   |         |   |   |   |
| Net unrealized loss on securities available for sale for which a portion of an other-than-temporary impairment has been recognized in income |   |         | (1,001  | )      |         |   | (2,476 | ) |
|                                                                                                                                         |   |         |    |   |         |   |   |   |
| Net realized gain on cash flow hedges                                                                                                        |   |         | 288     |   |         |   |   |   |
|                                                                                                                                         |   |         |    |   |         |   |   |   |
| Defined Benefit Plans                                                                                                                        |   |         | (12,211 | )      |         |   | (13,000 | ) |
|                                                                                                                                         |   |         |    |   |         |   |   |   |
|                                                                                                                                         |   | $            | (10,157 | )      |         | $      | (8,826 | ) |

----

|                                                                                                                 |   | Preferred |    |   | Common Stock |   |    |   |       |   |       |   |   |                       |   |   |              |   |
|----------------------------------------------------------------------------------------------------------------------|--------|-----------|---------|--------|--------------|--------|---------|--------|------------|--------|------------|--------|--------|----------------------------|--------|--------|-------------------|--------|
| (Dollars in thousands, except share data)                                                                            |   | Shares    |    |   | Amount       |   |    | Shares |       |   | Amount     |   |   | Additional Paid in Capital |   |   | Retained Earnings |   |   | Accumulated Other Comprehensive Income (Loss) |   |   | Total |   |
| Balances, December 31, 2007                                                                                          |   |      |    |   |         |   |    |   | 18,002,787 |   |       | $      | 2,250  |                       |   | $      | 137,801           |   |   | $ | 202,750 |   |   | $ | (2,865 | ) |   | $ | 339,936 |   |
| Net Income for 2008                                                                                                  |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   |   | $ | 20,638 |   |   |   |   |   |   | $ | 20,638 |   |
| Cash Dividends ($.92 per Share)                                                                                      |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   |   |   | (16,775 | ) |   |   |   |   |   |   | (16,775 | ) |
| Effects of changing the pension plan measurement date pursuant to FASB No. 158                                       |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service Cost, interest cost and expected rate of return on plan assets for October 1 - December 31, 2009, net of tax |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   |   |   | (64 | ) |   |   |   |   |   |   | (64 | ) |
| Amortization of prior service costs for October 1 - December 31, 2007, net of tax                                    |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   |   |   | (53 | ) |   |   |   |   |   |   | (53 | ) |
| Cumulative preferred stock issued                                                                                    |   |      | 125     |   |         | $      | 125     |   |       |   |       |   |   |                       |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   | 125 |   |
| Other Comprehensive Income (Loss), Net of Tax                                                                        |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   |   |   |   |   |   |   |   | $ | (12,799 | ) |   |   | (12,799 | ) |
| Tax Benefit from Stock Options Exercised                                                                             |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              | $      | 156 |   |   |   |   |   |   |   |   |   |   |   | 156 |   |
| Share-based Compensation                                                                                             |   |      |    |   |         |   |    |   |       |   | 225        |   |   | $                          | 1      |   |              |   | 1,897 |   |   |   |   |   |   |   |   |   |   |   | 1,898 |   |
| Stock Issued Under Employee Benefit Plans                                                                            |   |      |    |   |         |   |    |   |       |   | 50,119     |   |   |                       | 6      |   |              |   | 767 |   |   |   |   |   |   |   |   |   |   |   | 773 |   |
| Stock Issued Under Dividend Reinvestment and Stock Purchase Plan                                                     |   |      |    |   |         |   |    |   |       |   | 44,554     |   |   |                       | 6      |   |              |   | 1,015 |   |   |   |   |   |   |   |   |   |   |   | 1,021 |   |
| Stock Options Exercised                                                                                              |   |      |    |   |         |   |    |   |       |   | 122,890    |   |   |                       | 15     |   |              |   | 1,618 |   |   |   |   |   |   |   |   |   |   |   | 1,633 |   |
| Stock Redeemed                                                                                                       |   |      |    |   |         |   |    |   |       |   | (134,169   | )      |   |                       | (17    | )      |              |   | (2,171 | ) |   |   |   |   |   |   |   |   |   |   | (2,188 | ) |
| Issuance of Stock Related to Acquisitions                                                                            |   |      |    |   |         |   |    |   |       |   | 3,091,717  |   |   |                       | 386    |   |              |   | 61,216 |   |   |   |   |   |   |   |   |   |   |   | 61,602 |   |
| Balances, December 31, 2008                                                                                          |   |      | 125     |   |         | $      | 125     |   |       |   | 21,178,123 |   |   | $                          | 2,647  |   |              | $      | 202,299 |   |   | $ | 206,496 |   |   | $ | (15,664 | ) |   | $ | 395,903 |   |
| Net Loss for 2009                                                                                                    |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   |   |   |   |   | (40,763 | ) |   |   |   |   |   |   | (40,763 | ) |
| Cash Dividends on Common Stock ($.47 per Share)                                                                      |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   |   |   |   |   | (9,985 | ) |   |   |   |   |   |   | (9,985 | ) |
| Cash Dividends on Preferred Stock under Capital Purchase Program                                                     |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   |   |   |   |   | (4,269 | ) |   |   |   |   |   |   | (4,269 | ) |
| Warrants issued under Capital Purchase Program                                                                       |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   | 4,245 |   |   |   |   |   |   |   |   |   |   |   | 4,245 |   |
| Accretion of Discount on Preferred Stock                                                                             |   |      |    |   |         |   | 619     |   |       |   |       |   |   |                       |   |   |              |   |   |   |   |   | (619 | ) |   |   |   |   |   |   | - |   |
| Preferred Stock issued under Capital Purchase Program                                                                |   |      | 116,000 |   |         |   | 111,754 |   |       |   |       |   |   |                       |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   | 111,754 |   |
| Other Comprehensive Income, Net of Tax                                                                               |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   |   |   |   |   |   |   |   |   | 6,838 |   |   |   | 6,838 |   |
| Tax Benefit from Stock Options Exercised                                                                             |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   | 60 |   |   |   |   |   |   |   |   |   |   |   | 60 |   |
| Share-based Compensation                                                                                             |   |      |    |   |         |   |    |   |       |   | 50,564     |   |   |                       | 6      |   |              |   | 2,288 |   |   |   |   |   |   |   |   |   |   |   | 2,294 |   |
| Stock Issued Under Employee Benefit Plans                                                                            |   |      |    |   |         |   |    |   |       |   | 122,572    |   |   |                       | 16     |   |              |   | 809 |   |   |   |   |   |   |   |   |   |   |   | 825 |   |
| Stock Issued Under Dividend Reinvestment and Stock Purchase Plan                                                     |   |      |    |   |         |   |    |   |       |   | 65,015     |   |   |                       | 8      |   |              |   | 519 |   |   |   |   |   |   |   |   |   |   |   | 527 |   |
| Stock Options Exercised                                                                                              |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock Redeemed                                                                                                       |   |      |    |   |         |   |    |   |       |   | (14,059    | )      |   |                       | (2     | )      |              |   | (191 | ) |   |   |   |   |   |   |   |   |   |   | (193 | ) |
| Adjustment to issuance of stock related to acquisition                                                               |   |      |    |   |         |   |    |   |       |   | (174,474   | )      |   |                       | (22    | )      |              |   | (3,429 | ) |   |   |   |   |   |   |   |   |   |   | (3,451 | ) |
| Balances, December 31, 2009                                                                                          |   |      | 116,125 |   |         | $      | 112,498 |   |       |   | 21,227,741 |   |   | $                          | 2,653  |   |              | $      | 206,600 |   |   | $ | 150,860 |   |   | $ | (8,826 | ) |   | $ | 463,785 |   |
| Comprehensive Income                                                                                                 |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Net Income                                                                             |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   |   |   |   |   | 6,909 |   |   |   |   |   |   |   | 6,909 |   |
|      Other Comprehensive Income, net of tax                                                 |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   |   |   |   |   |   |   |   |   | (1,331 | ) |   |   | (1,331 | ) |
| Cash Dividends on Common Stock ($.04 per Share)                                                                      |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   |   |   |   |   | (989 | ) |   |   |   |   |   |   | (989 | ) |
| Cash Dividends on Preferred Stock under Capital Purchase Program                                                     |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   |   |   |   |   | (5,366 | ) |   |   |   |   |   |   | (5,366 | ) |
| Cumulative Preferred Stock Converted to Trust Preferred Securities                                                   |   |      | (46,400 | )      |         |   | (45,099 | )      |       |   |       |   |   |                       |   |   |              |   |   |   |   |   | 10,052 |   |   |   |   |   |   |   | (35,047 | ) |
| Accretion of Discount on Preferred Stock                                                                             |   |      |    |   |         |   | 606     |   |       |   |       |   |   |                       |   |   |              |   |   |   |   |   | (606 | ) |   |   |   |   |   |   | - |   |
| Private Stock Issuance                                                                                               |   |      |    |   |         |   |    |   |       |   | 4,200,000  |   |   |                       | 525    |   |              |   | 23,625 |   |   |   |   |   |   |   |   |   |   |   | 24,150 |   |
| Tax Benefit (Loss) from Stock Options Exercised                                                                      |   |      |    |   |         |   |    |   |       |   |       |   |   |                       |   |   |              |   | (50 | ) |   |   |   |   |   |   |   |   |   |   | (50 | ) |
| Share-based Compensation                                                                                             |   |      |    |   |         |   |    |   |       |   | 49,833     |   |   |                       | 6      |   |              |   | 1,744 |   |   |   |   |   |   |   |   |   |   |   | 1,750 |   |
| Stock Issued Under Employee Benefit Plans                                                                            |   |      |    |   |         |   |    |   |       |   | 97,966     |   |   |                       | 12     |   |              |   | 570 |   |   |   |   |   |   |   |   |   |   |   | 582 |   |
| Stock Issued Under Dividend Reinvestment and Stock Purchase Plan                                                     |   |      |    |   |         |   |    |   |       |   | 11,545     |   |   |                       | 2      |   |              |   | 89 |   |   |   |   |   |   |   |   |   |   |   | 91 |   |
| Stock Redeemed                                                                                                       |   |      |    |   |         |   |    |   |       |   | (12,834    | )      |   |                       | (1     | )      |              |   | (75 | ) |   |   |   |   |   |   |   |   |   |   | (76 | ) |
| Balances, December 31, 2010                                                                                          |   |      | 69,725  |   |         | $      | 68,005  |   |       |   | 25,574,251 |   |   | $                          | 3,197  |   |              | $      | 232,503 |   |   | $ | 160,860 |   |   | $ | (10,157 | ) |   | $ | 454,408 |   |

----

|                                                                                     |   | December 31, |     |
|------------------------------------------------------------------------------------------|--------|--------------|----------|
| (Dollars in thousands)                                                                   |   | 2010         |     |   | 2009 |   |   | 2008 |   |
| Cash Flow From Operating Activities:                                                     |   |         |     |   |   |   |   |   |   |
| Net income (loss)                                                                        |   | $            | 6,909    |   |   | $ | (40,763 | ) |   | $ | 20,638 |   |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |   |         |     |   |   |   |   |   |   |   |   |   |
| Provision for loan losses                                                                |   |         | 46,483   |   |   |   | 122,176 |   |   |   | 28,238 |   |
| Depreciation and amortization                                                            |   |         | 5,702    |   |   |   | 5,962 |   |   |   | 4,613 |   |
| Change in deferred taxes                                                                 |   |         | (1,810   | ) |   |   | (10,858 | ) |   |   | (8,666 | ) |
| Share-based compensation                                                                 |   |         | 1,750    |   |   |   | 2,294 |   |   |   | 1,898 |   |
| Tax expense (benefit) from stock options exercised                                       |   |         | 50       |   |   |   | (60 | ) |   |   | (156 | ) |
| Mortgage loans originated for sale                                                       |   |         | (254,712 | ) |   |   | (305,778 | ) |   |   | (102,591 | ) |
| Proceeds from sales of mortgage loans                                                    |   |         | 241,279  |   |   |   | 302,037 |   |   |   | 104,250 |   |
| Gains on sales of securities available for sale                                          |   |         | (3,406   | )  |   |   | (11,141 | ) |   |   | (599 | )  |
| Recognized loss on other-than-temporary-impairment                                       |   |         | 1,544    |   |   |   | 6,729 |   |   |   | 2,682 |   |
| Change in interest receivable                                                            |   |         | 2,144    |   |   |   | 3,158 |   |   |   | 2,858 |   |
| Change in interest payable                                                               |   |         | (1,449   | ) |   |   | (3,133 | ) |   |   | (1,217 | ) |
| Pension adjustment for measurement date change                                           |   |         |     |   |   |   |   |   |   |   | (117 | ) |
| Other adjustments                                                                        |   |         | 36,567   |   |   |   | (53,013 | ) |   |   | (12,818 | ) |
| Net cash provided by operating activities                                                |   | $            | 81,051   |   |   | $ | 17,610 |   |   | $ | 39,013 |   |
| Cash Flows from Investing Activities:                                                    |   |         |     |   |   |   |   |   |   |   |   |   |
| Net change in interest-bearing deposits                                                  |   | $            | 8,809    |   |   | $ | (35,202 | ) |   | $ | 10,716 |   |
| Purchases of:                                                                            |   |         |     |   |   |   |   |   |   |   |   |   |
| Securities available for sale                                                            |   |         | (311,465 | ) |   |   | (385,697 | ) |   |   | (100,988 | ) |
| Securities held to maturity                                                              |   |         | (180,311 | ) |   |   | (165,844 | ) |   |   | (29,058 | ) |
| Proceeds from sales of securities available for sale                                     |   |         | 117,804  |   |   |   | 309,246 |   |   |   | 60,335 |   |
| Proceeds from maturities of                                                              |   |         |     |   |   |   |   |   |   |   |   |   |
| Securities available for sale                                                            |   |         | 65,688   |   |   |   | 134,337 |   |   |   | 139,825 |   |
| Securities held to maturity                                                              |   |         | 40,825   |   |   |   | 38,568 |   |   |   | 17,042 |   |
| Proceeds from sales of mortgages                                                         |   |         |     |   |   |   | 33,452 |   |   |   |   |   |
| Change in Federal Reserve and Federal Home Loan Bank stock                               |   |         | 4,692    |   |   |   | (4,257 | ) |   |   | (261 | ) |
| Purchase of bank owned life insurance                                                    |   |         |     |   |   |   |   |   |   |   | (706 | ) |
| Net cash paid in acquisitions                                                            |   |         |     |   |   |   |   |   |   |   | 6,934 |   |
| Net change in loans                                                                      |   |         | 345,518  |   |   |   | 296,416 |   |   |   | (250,621 | ) |
| Proceeds from the sale of other real estate owned                                        |   |         | 20,641   |   |   |   | 39,595 |   |   |   | 10,775 |   |
| Other adjustments                                                                        |   |         | (2,348   | ) |   |   | (2,125 | ) |   |   | (4,181 | ) |
| Net cash provided by (used in) investing activities                                      |   | $            | 109,853  |   |   | $ | 258,489 |   |   | $ | (140,188 | ) |
| Cash Flows from Financing Activities:                                                    |   |         |     |   |   |   |   |   |   |   |   |   |
| Net change in :                                                                          |   |         |     |   |   |   |   |   |   |   |   |   |
| Demand and savings deposits                                                              |   | $            | 84,993   |   |   | $ | 184,228 |   |   | $ | 74,992 |   |
| Certificates of deposit and other time deposits                                          |   |         | (352,649 | ) |   |   | (366,503 | ) |   |   | 144,328 |   |
| Borrowings                                                                               |   |         | 2,382    |   |   |   | 126,587 |   |   |   | 961,074 |   |
| Repayment of borrowings                                                                  |   |         | (65,247  | ) |   |   | (294,715 | ) |   |   | (1,048,161 | ) |
| Dividends on common stock                                                                |   |         | (989     | ) |   |   | (9,985 | ) |   |   | (16,775 | ) |
| Dividends on preferred stock                                                             |   |         | (4,931   | ) |   |   | (4,269 | ) |   |   |   |   |
| Stock issued in private equity placement                                                 |   |         | 24,150   |   |   |   |   |   |   |   |   |   |
| Stock issued under employee benefit plans                                                |   |         | 582      |   |   |   | 825 |   |   |   | 773 |   |
| Stock issued under dividend reinvestment and stock purchase plans                        |   |         | 91       |   |   |   | 527 |   |   |   | 1,021 |   |
| Stock options exercised                                                                  |   |         |     |   |   |   |   |   |   |   | 1,633 |   |
| Cumulative preferred stock issued                                                        |   |         |     |   |   |   | 116,000 |   |   |   | 125 |   |
| Tax (expense) benefit from stock options exercised                                       |   |         | (50      | ) |   |   | 60 |   |   |   | 156 |   |
| Stock redeemed                                                                           |   |         | (76      | ) |   |   | (193 | ) |   |   | (2,188 | ) |
| Net cash provided by (used in) financing activities                                      |   | $            | (311,744 | ) |   | $ | (247,438 | ) |   | $ | 116,978 |   |
| Net Change in Cash and Cash Equivalents                                                  |   |         | (120,840 | ) |   |   | 28,661 |   |   |   | 15,803 |   |
| Cash and Cash Equivalents, January 1                                                     |   |         | 179,147  |   |   |   | 150,486 |   |   |   | 134,683 |   |
| Cash and Cash Equivalents, December 31                                                   |   | $            | 58,307   |   |   | $ | 179,147 |   |   | $ | 150,486 |   |
|  Additional cash flows information:                                                 |   |         |     |   |   |   |   |   |   |   |   |   |
| Interest paid                                                                            |   | $            | 57,458   |   |   | $ | 80,226 |   |   | $ | 89,570 |   |
| Income tax paid (refunded)                                                               |   |         | (17,674  | ) |   |   | 3,184 |   |   |   | 18,393 |   |
| Exchange of preferred stock for trust preferred debt                                     |   |         | 46,400   |   |   |   |   |   |   |   |   |   |
| Loans transferred to other real estate owned                                             |   |         | 32,950   |   |   |   | 42,708 |   |   |   | 24,647 |   |

----

----

----

----

----

|                  |   | December 31, |    |
|-----------------------|--------|--------------|---------|
|                  |   | 2008         |    |
| Net Interest Income   |   | $            | 106,495 |   |
| Net Income (Loss)     |   | $            | (13,638 | ) |
| Per Share - Combined: |   |         |    |   |
| Basic Net Income      |   | $            | (5.20   | ) |
| Diluted Net Income    |   | $            | (5.20   | ) |

----

|                                        |   | Amortized Cost |    |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   | Fair Value |   |
|---------------------------------------------|--------|----------------|---------|--------|------------------------|--------|--------|-------------------------|--------|--------|------------|--------|
| Available for sale at December 31, 2010     |   |           |    |   |                   |   |   |                    |   |   |       |   |
| U.S. Government-sponsored agency securities |   | $              | 600     |   |                   | $      | 16     |                    |   |   |       |   | $ | 616 |   |
| State and municipal                         |   |           | 233,622 |   |                   |   | 7,108  |                    |   | $      | 740        |   |   |   | 239,990 |   |
| Mortgage-backed securities                  |   |           | 293,311 |   |                   |   | 4,293  |                    |   |   | 2,287      |   |   |   | 295,317 |   |
| Corporate Obligations                       |   |           | 5,856   |   |                   |   |   |                    |   |   | 5,674      |   |   |   | 182 |   |
| Equity securities                           |   |           | 3,265   |   |                   |   |   |                    |   |   |       |   |   |   | 3,265 |   |
| Total available for sale                    |   |           | 536,654 |   |                   |   | 11,417 |                    |   |   | 8,701      |   |   |   | 539,370 |   |
| Held to maturity at December 31, 2010       |   |           |    |   |                   |   |   |                    |   |   |       |   |   |   |   |   |
| State and municipal                         |   |           | 10,070  |   |                   |   | 389    |                    |   |   | 5          |   |   |   | 10,454 |   |
| Mortgage-backed securities                  |   |           | 277,357 |   |                   |   | 2,064  |                    |   |   | 3,605      |   |   |   | 275,816 |   |
| Total held to maturity                      |   |           | 287,427 |   |                   |   | 2,453  |                    |   |   | 3,610      |   |   |   | 286,270 |   |
| Total Investment Securities                 |   | $              | 824,081 |   |                   | $      | 13,870 |                    |   | $      | 12,311     |   |   | $ | 825,640 |   |
|                                        |   |           |    |   |                   |   |   |                    |   |   |       |   |   |   |   |   |
| 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 |   |

----

|                                                                       |   | 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 |   |                              | 1,544  |   |                              |   | 6,729 |   |
| Balance, December 31                                                       |   | $                                 | 10,955 |   |                              | $      | 9,411 |   |

----

|                                             |   | 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, 2010                  |   |                     |    |   |                    |   |   |       |   |   |                    |   |   |       |   |    |                    |    |
| State and municipal                              |   | $                        | 31,796  |   |                    | $      | (745   | )     |   |   |                    |   |   |       |   | $       | 31,796                  |    |   | $ | (745 | )  |
| Mortgage-backed securities                       |   |                     | 229,441 |   |                    |   | (5,892 | )     |   | $      | 154                     |   |   |       |   |    |                    | 229,595 |   |   |   | (5,892 | )  |
| Corporate obligations                            |   |                     |    |   |                    |   |   |       |   |   | 151                     |   |   | $          | (5,674 | )  |                    |    | 151 |   |   |   | (5,674 | )  |
| Total Temporarily Impaired Investment Securities |   | $                        | 261,237 |   |                    | $      | (6,637 | )     |   | $      | 305                     |   |   | $          | (5,674 | )  |                    | $       | 261,542 |   |   | $ | (12,311 | )  |
|                                             |   |                     |    |   |                    |   |   |       |   |   |                    |   |   |       |   |    |                    |    |   |   |   |   |   |   |
| 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 | )  |

|                                       |   | Available for Sale |    |   | Held to Maturity |   |
|--------------------------------------------|--------|--------------------|---------|--------|------------------|--------|
|                                       |   | Amortized Cost     |    |   | Fair Value       |   |   | Amortized Cost |   |   | Fair Value |   |
| Maturity Distribution at December 31, 2010 |   |               |    |   |             |   |   |   |   |   |   |   |
| Due in one year or less                    |   | $                  | 7,362   |   |             | $      | 7,432 |   |   | $ | 1,548 |   |   | $ | 1,559 |   |
| Due after one through five years           |   |               | 18,485  |   |             |   | 19,217 |   |   |   | 1,065 |   |   |   | 1,090 |   |
| Due after five through ten years           |   |               | 47,289  |   |             |   | 49,520 |   |   |   | 3,348 |   |   |   | 3,458 |   |
| Due after ten years                        |   |               | 166,942 |   |             |   | 164,619 |   |   |   | 4,109 |   |   |   | 4,347 |   |
|                                       |   | $                  | 240,078 |   |             | $      | 240,788 |   |   | $ | 10,070 |   |   | $ | 10,454 |   |
|                                       |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities                 |   |               | 293,311 |   |             |   | 295,317 |   |   |   | 277,357 |   |   |   | 275,816 |   |
| Equity securities                          |   |               | 3,265   |   |             |   | 3,265 |   |   |   |   |   |   |   |   |   |
|                                       |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Total Investment Securities                |   | $                  | 536,654 |   |             | $      | 539,370 |   |   | $ | 287,427 |   |   | $ | 286,270 |   |

----

|                                                            |   | December 31, |      |
|-----------------------------------------------------------------|--------|--------------|-----------|
|                                                            |   | 2010         |      |   | 2009 |   |
| Loans:                                                          |   |         |      |   |   |   |
| Commercial and industrial loans                                 |   | $            | 530,322   |   |   | $ | 675,860 |   |
| Agricultural production financing and other loans to farmers    |   |         | 95,516    |   |   |   | 121,031 |   |
| Real estate loans                                               |   |         |      |   |   |   |   |   |
| Construction                                                    |   |         | 106,615   |   |   |   | 158,725 |   |
| Commercial and farm land                                        |   |         | 1,229,037 |   |   |   | 1,276,164 |   |
| Residential                                                     |   |         | 724,020   |   |   |   | 841,584 |   |
| Individuals loans for household and other personal expenditures |   |         | 115,295   |   |   |   | 154,132 |   |
| Lease financing receivables, net of unearned income             |   |         | 5,157     |   |   |   | 7,135 |   |
| Other loans                                                     |   |         | 29,721    |   |   |   | 35,157 |   |
|                                                            |   |         | 2,835,683 |   |   |   | 3,269,788 |   |
| Allowance for loan losses                                       |   |         | (82,977   | ) |   |   | (92,131 | ) |
| Total Loans                                                     |   | $            | 2,752,706 |   |   | $ | 3,177,657 |   |

|                              |   | 2010   |    |   | 2009   |   |    | 2008   |   |
|-----------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Allowance for loan losses:        |   |   |    |   |   |   |    |   |   |
| Balances, January 1               |   | $      | 92,131  |   |   | $      | 49,543  |   |   | $ | 28,228 |   |
| Provision for losses              |   |   | 46,483  |   |   |   | 122,176 |   |   |   | 28,238 |   |
| Adjustment related to acquisition |   |   |    |   |   |   | 2,040   |   |   |   |   |   |
| Recoveries on loans               |   |   | 11,935  |   |   |   | 7,966   |   |   |   | 7,024 |   |
| Loans charged off                 |   |   | (67,572 | )      |   |   | (89,594 | )      |   |   | (22,626 | ) |
| Allowance acquired in acquisition |   |   |    |   |   |   |    |   |   |   | 8,679 |   |
| Balances, December 31             |   | $      | 82,977  |   |   | $      | 92,131  |   |   | $ | 49,543 |   |

|                                                                                                                            |   | December 31, 2010 |    |
|---------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|
|                                                                                                                            |   |              |    |   | Commercial |   |   |   |   |   |   |   |   | Finance |   |   |   |   |
| Allowance Balances:                                                                                                             |   | Commercial        |    |   | Real Estate |   |   | Consumer |   |   | Residential |   |   | Leases |   |   | Total |   |
|         Individually evaluated for impairment                                           |   | $                 | 5,726   |   |   | $ | 7,545 |   |   | $ | - |   |   | $ | 643 |   |   | $ | - |   |   | $ | 13,914 |   |
|         Collectively evaluated for impairment                                           |   |              | 26,782  |   |   |   | 28,796 |   |   |   | 3,622 |   |   |   | 9,765 |   |   |   | 98 |   |   |   | 69,063 |   |
|         Acquired with deteriorated credit quality                                       |   |              | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                 Total Allowance for Loan Losses |   | $                 | 32,508  |   |   | $ | 36,341 |   |   | $ | 3,622 |   |   | $ | 10,408 |   |   | $ | 98 |   |   | $ | 82,977 |   |
|                                                                                                                            |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loan Balances (includes loans held for sale):                                                                                   |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Individually evaluated for impairment                                           |   | $                 | 28,965  |   |   | $ | 77,705 |   |   | $ | - |   |   | $ | 9,534 |   |   | $ | - |   |   | $ | 116,204 |   |
|         Collectively evaluated for impairment                                           |   |              | 626,594 |   |   |   | 1,257,947 |   |   |   | 115,295 |   |   |   | 714,486 |   |   |   | 5,157 |   |   |   | 2,719,479 |   |
|         Acquired with deteriorated credit quality                                       |   |              | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                 Total Loans                     |   | $                 | 655,559 |   |   | $ | 1,335,652 |   |   | $ | 115,295 |   |   | $ | 724,020 |   |   | $ | 5,157 |   |   | $ | 2,835,683 |   |

|                                                                                                                            |   | December 31, 2009 |    |
|---------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|
|                                                                                                                            |   |              |    |   | Commercial |   |   |   |   |   |   |   |   | Finance |   |   |   |   |
| Allowance Balances:                                                                                                             |   | Commercial        |    |   | Real Estate |   |   | Consumer |   |   | Residential |   |   | Leases |   |   | Total |   |
|         Individually evaluated for impairment                                           |   | $                 | 14,046  |   |   | $ | 9,676 |   |   | $ | - |   |   | $ | 2,557 |   |   | $ | - |   |   | $ | 26,279 |   |
|         Collectively evaluated for impairment                                           |   |              | 34,725  |   |   |   | 20,512 |   |   |   | 2,242 |   |   |   | 8,194 |   |   |   | 179 |   |   |   | 65,852 |   |
|         Acquired with deteriorated credit quality                                       |   |              | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                 Total Allowance for Loan Losses |   | $                 | 48,771  |   |   | $ | 30,188 |   |   | $ | 2,242 |   |   | $ | 10,751 |   |   | $ | 179 |   |   | $ | 92,131 |   |
|                                                                                                                            |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loan Balances (includes loans held for sale):                                                                                   |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Individually evaluated for impairment                                           |   | $                 | 43,872  |   |   | $ | 117,178 |   |   | $ | 5 |   |   | $ | 17,699 |   |   | $ | - |   |   | $ | 178,754 |   |
|         Collectively evaluated for impairment                                           |   |              | 788,177 |   |   |   | 1,317,711 |   |   |   | 154,127 |   |   |   | 823,884 |   |   |   | 7,135 |   |   |   | 3,091,034 |   |
|         Acquired with deteriorated credit quality                                       |   |              | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                 Total Loans                     |   | $                 | 832,049 |   |   | $ | 1,434,889 |   |   | $ | 154,132 |   |   | $ | 841,583 |   |   | $ | 7,135 |   |   | $ | 3,269,788 |   |

----

|                                     |   | December 31, |    |   | December 31, |   |
|------------------------------------------|--------|--------------|---------|--------|--------------|--------|
|                                     |   | 2010         |    |   | 2009         |   |
| Non-Performing Assets:                   |   |         |    |   |         |   |
| Non-accrual loans                        |   | $            | 90,591  |   |         | $      | 118,409 |   |
| Renegotiated loans                       |   |         | 7,139   |   |         |   | 8,833 |   |
| Non-performing loans (NPL)               |   |         | 97,730  |   |         |   | 127,242 |   |
| Real estate owned and repossessed assets |   |         | 20,927  |   |         |   | 14,879 |   |
| Non-performing assets (NPA)              |   |         | 118,657 |   |         |   | 142,121 |   |
| 90+ days delinquent and still accruing   |   |         | 1,330   |   |         |   | 3,967 |   |
| NPAS & 90+ days delinquent           |   | $            | 119,987 |   |         | $      | 146,088 |   |

|                                                                                |   | December 31, |   |
|-------------------------------------------------------------------------------------|--------|--------------|--------|
|                                                                                |   | 2010         |   |   | 2009 |   |
| Commercial and Industrial                                                           |   | $            | 9,812  |   |   | $ | 36,777 |   |
| Agriculture production financing and other loans                                    |   |         | 544    |   |   |   | 344 |   |
| Real Estate Loans:                                                                  |   |         |   |   |   |   |   |   |
|        Construction                              |   |         | 17,164 |   |   |   | 19,995 |   |
|        Commercial and farm land                  |   |         | 45,308 |   |   |   | 40,585 |   |
|        Residential                               |   |         | 15,115 |   |   |   | 18,936 |   |
|        Home Equity                               |   |         | 2,648  |   |   |   | 1,663 |   |
| Individuals loans for household and other personal expenditures                     |   |         | -      |   |   |   | 109 |   |
| Lease financing receivables, net of unearned income                                 |   |         | -      |   |   |   | - |   |
| Other Loans                                                                         |   |         | -      |   |   |   | - |   |
|              Total |   | $            | 90,591 |   |   | $ | 118,409 |   |

----

|                                                                                                          |   | 2010   |    |   | 2009   |   |    | 2008   |   |
|---------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| As of, and for the year ending, December 31:                                                                  |   |   |    |   |   |   |    |   |   |
| Impaired loans with an allowance                                                                              |   | $      | 39,887  |   |   | $      | 67,051  |   |   | $ | 25,397 |   |
| Impaired loans for which the discounted cash flows or collateral value exceeds the carrying value of the loan |   |   | 76,317  |   |   |   | 111,703 |   |   |   | 180,729 |   |
| Total Impaired Loans                                                                                          |   | $      | 116,204 |   |   | $      | 178,754 |   |   | $ | 206,126 |   |
|                                                                                                          |   |   |    |   |   |   |    |   |   |   |   |   |
| Total Impaired Loans as a Percent of Total Loans                                                              |   |   | 4.10    | %      |   |   | 5.47    | %      |   |   | 5.53 | % |
|                                                                                                          |   |   |    |   |   |   |    |   |   |   |   |   |
| Allowance for Impaired Loans (included in the Corporation's Allowance for Loan Losses)                        |   | $      | 13,914  |   |   | $      | 26,279  |   |   | $ | 9,790 |   |
| Average Balance of Impaired Loans                                                                             |   |   | 175,013 |   |   |   | 236,669 |   |   |   | 229,608 |   |
| Interest Income Recognized on Impaired Loans                                                                  |   |   | 4,651   |   |   |   | 7,238   |   |   |   | 8,078 |   |
| Cash Basis Interest Included Above                                                                            |   |   | 2,852   |   |   |   | 2,567   |   |   |   | 997 |   |

|                                                                                                                        |   | December 31, 2010       |         |
|-----------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------------|
|                                                                                                                        |   | Unpaid PrincipalBalance |         |   | RecordedInvestment |   |   | RelatedAllowance |   |
| Impaired loans with no related allowance recorded:                                                                          |   |                    |         |   |   |   |   |   |   |
|           Commercial and Industrial                                       |   | $                       | 30,006       |   |   | $ | 16,572 |   |   |   |   |
|           Agriculture production financing and other loans                |   |                    | 966     |   |   |   | 530 |   |   |   |   |
|           Real Estate Loans:                                              |   |                    |         |   |   |   |   |   |   |   |   |
|                Construction                      |   |                    | 12,598  |   |   |   | 9,150 |   |   |   |   |
|                Commercial and farm land          |   |                    | 64,064  |   |   |   | 43,653 |   |   |   |   |
|                Residential                       |   |                    | 7,909   |   |   |   | 5,153 |   |   |   |   |
|                Home Equity                       |   |                    | 4,460   |   |   |   | 1,245 |   |   |   |   |
|           Individuals loans for household and other personal expenditures |   |                    | -       |   |   |   | - |   |   |   |   |
|           Lease financing receivables, net of unearned income             |   |                    | -       |   |   |   | - |   |   |   |   |
|           Other Loans                                                     |   |                    | 101     |   |   |   | 14 |   |   |   |   |
|                   Total           |   | $                       | 120,104      |   |   | $ | 76,317 |   |   |   |   |
|                                                                                                                        |   |                    |         |   |   |   |   |   |   |   |   |
| Impaired loans with an allowance recorded:                                                                                  |   |                    |         |   |   |   |   |   |   |   |   |
|           Commercial and Industrial                                       |   | $                       | 11,477       |   |   | $ | 11,374 |   |   | $ | 5,250 |   |
|           Agriculture production financing and other loans                |   |                    | -       |   |   |   | - |   |   |   | - |   |
|           Real Estate Loans:                                              |   |                    |         |   |   |   |   |   |   |   |   |   |
|                Construction                      |   |                    | 9,353   |   |   |   | 7,824 |   |   |   | 2,049 |   |
|                Commercial and farm land          |   |                    | 17,984  |   |   |   | 17,076 |   |   |   | 5,496 |   |
|                Residential                       |   |                    | 2,740   |   |   |   | 2,691 |   |   |   | 465 |   |
|                Home Equity                       |   |                    | 458     |   |   |   | 446 |   |   |   | 178 |   |
|           Individuals loans for household and other personal expenditures |   |                    | -       |   |   |   | - |   |   |   | - |   |
|           Lease financing receivables, net of unearned income             |   |                    | -       |   |   |   | - |   |   |   | - |   |
|           Other Loans                                                     |   |                    | 476     |   |   |   | 476 |   |   |   | 476 |   |
|                   Total           |   | $                       | 42,488       |   |   | $ | 39,887 |   |   | $ | 13,914 |   |
|                                                                                                                        |   |                    |         |   |   |   |   |   |   |   |   |   |
| Total Impaired Loans                                                                                                        |   | $                       | 162,592      |   |   | $ | 116,204 |   |   | $ | 13,914 |   |

----

| ●  | Pass – Loans that are considered to be of acceptable credit quality. |
|---------------|----------------------------------------------------------------------------|

| ● | Special Mention – Loans which possess some credit deficiency or potential weakness, which deserves close attention.  A special mention asset has potential weaknesses that deserve management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date.  Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.  Such loans pose an unwarranted financial risk that, if not corrected, could weaken the loan adversely impacting the future repayment ability of the borrower.  The key distinctions of this category’s classification are that it is indicative of an unwarranted level of risk; and weaknesses are considered “potential”, not “defined”, impairments to the primary source of repayment. Examples include businesses that may be suffering from inadequate management, loss of key personnel or significant customer or litigation. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | Substandard – A substandard loan is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any.  Assets so classified have a well-defined weakness that jeopardizes the liquidation of the debt.  They are characterized by the distinct possibility that the bank will sustain some loss if the deficiencies are not corrected.  Other characteristics may include the likelihood that a loan will be paid from the primary source of repayment is uncertain or financial deterioration is underway and very close attention is warranted to ensure that the loan is collected without loss.  The primary source of repayment is gone, and the bank is forced to rely on a secondary source of repayment, such as collateral liquidation or guarantees. Loans have a distinct possibility that the bank will sustain some loss if deficiencies are not corrected.  Unusual courses of action are needed to maintain a high probability of repayment.  The borrower is not generating enough cash flow to repay loan principal; however, it continues to make interest payments. The Bank is forced into a subordinated or unsecured position due to flaws in documentation. Loans have been restructured so that payment schedules, terms and collateral represent concessions to the borrower when compared to the normal loan terms. The bank is seriously contemplating foreclosure or legal action due to the apparent deterioration of the loan.  There is significant deterioration in market conditions to which the borrower is highly vulnerable. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | Doubtful – Loans that have all of the weaknesses of those classified as Substandard. However, based on currently existing facts, conditions and values, these weaknesses make full collection of principal highly questionable and improbable. Other credit characteristics may include the primary source of repayment is gone or there is considerable doubt as to the quality of the secondary sources of repayment. The possibility of loss is high, but because of certain important pending factors that may strengthen the loan, loss classification is deferred until the exact status of repayment is known. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Loss – Loans that are considered uncollectible and of such little value that continuing to carry them as an asset is not warranted. Loans will be classified as Loss when it is neither practical not desirable to defer writing off or reserving all or a portion of a basically worthless asset, even though partial recovery may be possible at some time in the future. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                  |   | December 31, 2010 |      |
|-------------------------------------------------------------------------------------------------------|--------|-------------------|-----------|
|                                                                                                  |   | Commercial Pass   |      |   | Commercial Special Mention |   |   | Commercial Substandard |   |   | Commercial Doubtful |   |   | Commercial Loss |   |   | Consumer Performing |   |   | Consumer Non Performing |   |   | Total Loans |   |
| Commercial and Industrial                                                                             |   | $                 | 454,305   |   |   | $ | 19,928 |   |   | $ | 53,199 |   |   | $ | 2,870 |   |   | $ | 20 |   |   | $ | - |   |   | $ | - |   |   | $ | 530,322 |   |
| Agriculture production financing and other loans                                                      |   |              | 92,293    |   |   |   | 574 |   |   |   | 2,649 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 95,516 |   |
| Real Estate Loans:                                                                                    |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
|        Construction                                                |   |              | 66,918    |   |   |   | 10,100 |   |   |   | 28,167 |   |   |   | 1,430 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 106,615 |   |
|        Commercial and farm land                                    |   |              | 1,038,861 |   |   |   | 38,676 |   |   |   | 146,213 |   |   |   | 5,287 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,229,037 |   |
|        Residential                                                 |   |              | 144,163   |   |   |   | 9,220 |   |   |   | 18,747 |   |   |   | 1,169 |   |   |   | - |   |   |   | 362,401 |   |   |   | 7,820 |   |   |   | 543,520 |   |
|        Home Equity                                                 |   |              | 17,913    |   |   |   | 283 |   |   |   | 2,872 |   |   |   | 524 |   |   |   | - |   |   |   | 178,470 |   |   |   | 1,907 |   |   |   | 201,969 |   |
| Individuals loans for household and other personal expenditures                                       |   |              | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 115,239 |   |   |   | 56 |   |   |   | 115,295 |   |
| Lease financing receivables, net of unearned income                                                   |   |              | 280       |   |   |   | - |   |   |   | 18 |   |   |   | - |   |   |   | - |   |   |   | 4,859 |   |   |   | - |   |   |   | 5,157 |   |
| Other Loans                                                                                           |   |              | 27,642    |   |   |   | 1,295 |   |   |   | 784 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 29,721 |   |
|                 Total |   | $                 | 1,842,375 |   |   | $ | 80,076 |   |   | $ | 252,649 |   |   | $ | 11,280 |   |   | $ | 20 |   |   | $ | 660,969 |   |   | $ | 9,783 |   |   | $ | 2,857,152 |   |

|                                                                                                  |   | December 31, 2009 |      |
|-------------------------------------------------------------------------------------------------------|--------|-------------------|-----------|
|                                                                                                  |   | Commercial Pass   |      |   | Commercial Special Mention |   |   | Commercial Substandard |   |   | Commercial Doubtful |   |   | Commercial Loss |   |   | Consumer Performing |   |   | Consumer Non Performing |   |   | Total Loans |   |
| Commercial and Industrial                                                                             |   | $                 | 570,092   |   |   | $ | 25,610 |   |   | $ | 73,419 |   |   | $ | 6,719 |   |   | $ | 20 |   |   | $ | - |   |   | $ | - |   |   | $ | 675,860 |   |
| Agriculture production financing and other loans                                                      |   |              | 118,097   |   |   |   | 1,259 |   |   |   | 1,675 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 121,031 |   |
| Real Estate Loans:                                                                                    |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
|        Construction                                                |   |              | 116,639   |   |   |   | 5,655 |   |   |   | 31,521 |   |   |   | 4,910 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 158,725 |   |
|        Commercial and farm land                                    |   |              | 1,068,675 |   |   |   | 52,472 |   |   |   | 145,953 |   |   |   | 9,064 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,276,164 |   |
|        Residential                                                 |   |              | 184,216   |   |   |   | 15,401 |   |   |   | 28,511 |   |   |   | 1,047 |   |   |   | - |   |   |   | 390,895 |   |   |   | 9,409 |   |   |   | 629,479 |   |
|        Home Equity                                                 |   |              | 18,673    |   |   |   | 411 |   |   |   | 1,851 |   |   |   | - |   |   |   | - |   |   |   | 198,077 |   |   |   | 1,130 |   |   |   | 220,142 |   |
| Individuals loans for household and other personal expenditures                                       |   |              | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 154,020 |   |   |   | 112 |   |   |   | 154,132 |   |
| Lease financing receivables, net of unearned income                                                   |   |              | 1,010     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 6,125 |   |   |   | - |   |   |   | 7,135 |   |
| Other Loans                                                                                           |   |              | 34,577    |   |   |   | 287 |   |   |   | 293 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 35,157 |   |
|                 Total |   | $                 | 2,111,979 |   |   | $ | 101,095 |   |   | $ | 283,223 |   |   | $ | 21,740 |   |   | $ | 20 |   |   | $ | 749,117 |   |   | $ | 10,651 |   |   | $ | 3,277,825 |   |

|                                                                                                  |   | December 31, 2010 |      |
|-------------------------------------------------------------------------------------------------------|--------|-------------------|-----------|
|                                                                                                  |   | Current           |      |   | 30-59 Days Past Due |   |   | 60-89 Days Past Due |   |   | Loans > 90 Days And Accruing |   |   | Non-Accrual |   |   | Total Past Due & Non-Accrual |   |   | Total Loans |   |
| Commercial and Industrial                                                                             |   | $                 | 518,683   |   |   | $ | 1,477 |   |   | $ | 211 |   |   | $ | 139 |   |   | $ | 9,812 |   |   | $ | 11,639 |   |   | $ | 530,322 |   |
| Agriculture production financing and other loans                                                      |   |              | 94,972    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 544 |   |   |   | 544 |   |   |   | 95,516 |   |
| Real Estate Loans:                                                                                    |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        Construction                                                |   |              | 86,710    |   |   |   | 1,543 |   |   |   | 996 |   |   |   | 202 |   |   |   | 17,164 |   |   |   | 19,905 |   |   |   | 106,615 |   |
|        Commercial and farm land                                    |   |              | 1,171,580 |   |   |   | 6,769 |   |   |   | 5,380 |   |   |   | - |   |   |   | 45,308 |   |   |   | 57,457 |   |   |   | 1,229,037 |   |
|        Residential                                                 |   |              | 519,535   |   |   |   | 5,261 |   |   |   | 3,363 |   |   |   | 246 |   |   |   | 15,115 |   |   |   | 23,985 |   |   |   | 543,520 |   |
|        Home Equity                                                 |   |              | 196,276   |   |   |   | 1,825 |   |   |   | 534 |   |   |   | 686 |   |   |   | 2,648 |   |   |   | 5,693 |   |   |   | 201,969 |   |
| Individuals loans for household and other personal expenditures                                       |   |              | 112,760   |   |   |   | 1,989 |   |   |   | 489 |   |   |   | 57 |   |   |   | - |   |   |   | 2,535 |   |   |   | 115,295 |   |
| Lease financing receivables, net of unearned income                                                   |   |              | 5,157     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5,157 |   |
| Other Loans                                                                                           |   |              | 29,721    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 29,721 |   |
|                 Total |   | $                 | 2,735,394 |   |   | $ | 18,864 |   |   | $ | 10,973 |   |   | $ | 1,330 |   |   | $ | 90,591 |   |   | $ | 121,758 |   |   | $ | 2,857,152 |   |

|                                                                                                  |   | December 31, 2009 |      |
|-------------------------------------------------------------------------------------------------------|--------|-------------------|-----------|
|                                                                                                  |   | Current           |      |   | 30-59 Days Past Due |   |   | 60-89 Days Past Due |   |   | Loans > 90 Days And Accruing |   |   | Non-Accrual |   |   | Total Past Due & Non-Accrual |   |   | Total Loans |   |
| Commercial and Industrial                                                                             |   | $                 | 633,829   |   |   | $ | 3,069 |   |   | $ | 1,631 |   |   | $ | 554 |   |   | $ | 36,777 |   |   | $ | 42,031 |   |   | $ | 675,860 |   |
| Agriculture production financing and other loans                                                      |   |              | 119,810   |   |   |   | 742 |   |   |   | 135 |   |   |   | - |   |   |   | 344 |   |   |   | 1,221 |   |   |   | 121,031 |   |
| Real Estate Loans:                                                                                    |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        Construction                                                |   |              | 136,750   |   |   |   | 651 |   |   |   | 200 |   |   |   | 1,129 |   |   |   | 19,995 |   |   |   | 21,975 |   |   |   | 158,725 |   |
|        Commercial and farm land                                    |   |              | 1,223,022 |   |   |   | 8,073 |   |   |   | 2,881 |   |   |   | 1,603 |   |   |   | 40,585 |   |   |   | 53,142 |   |   |   | 1,276,164 |   |
|        Residential                                                 |   |              | 598,367   |   |   |   | 7,455 |   |   |   | 4,172 |   |   |   | 549 |   |   |   | 18,936 |   |   |   | 31,112 |   |   |   | 629,479 |   |
|        Home Equity                                                 |   |              | 215,304   |   |   |   | 2,545 |   |   |   | 505 |   |   |   | 125 |   |   |   | 1,663 |   |   |   | 4,838 |   |   |   | 220,142 |   |
| Individuals loans for household and other personal expenditures                                       |   |              | 151,285   |   |   |   | 2,356 |   |   |   | 375 |   |   |   | 7 |   |   |   | 109 |   |   |   | 2,847 |   |   |   | 154,132 |   |
| Lease financing receivables, net of unearned income                                                   |   |              | 7,135     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 7,135 |   |
| Other Loans                                                                                           |   |              | 35,157    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 35,157 |   |
|                 Total |   | $                 | 3,120,659 |   |   | $ | 24,891 |   |   | $ | 9,899 |   |   | $ | 3,967 |   |   | $ | 118,409 |   |   | $ | 157,166 |   |   | $ | 3,277,825 |   |

----

|                                      |   | 2010   |    |   | 2009   |   |
|-------------------------------------------|--------|--------|---------|--------|--------|--------|
| Cost at December 31:                      |   |   |    |   |   |   |
| Land                                      |   | $      | 14,296  |   |   | $      | 14,318 |   |
| Buildings and Leasehold Improvements      |   |   | 60,736  |   |   |   | 60,344 |   |
| Equipment                                 |   |   | 44,308  |   |   |   | 50,319 |   |
| Total Cost                                |   |   | 119,340 |   |   |   | 124,981 |   |
| Accumulated Depreciation and Amortization |   |   | (66,890 | )      |   |   | (69,177 | ) |
| Net                                       |   | $      | 52,450  |   |   | $      | 55,804 |   |

| 2011                             |   | $      | 2,153 |   |
|----------------------------------|--------|--------|-------|--------|
| 2012                             |   |   | 1,761 |   |
| 2013                             |   |   | 1,004 |   |
| 2014                             |   |   | 866   |   |
| 2015                             |   |   | 692   |   |
| After 2015                       |   |   | 395   |   |
| Total Future Minimum Obligations |   | $      | 6,871 |   |

|                                 |   | 2010   |    |   | 2009   |   |
|--------------------------------------|--------|--------|---------|--------|--------|--------|
| Balance, January 1                   |   | $      | 141,357 |   |   | $      | 143,482 |   |
| Adjustment to 2008 goodwill acquired |   |   |    |   |   |   | (2,125 | ) |
| Balance, December 31                 |   | $      | 141,357 |   |   | $      | 141,357 |   |

|                               |   | 2010   |    |   | 2009   |   |
|------------------------------------|--------|--------|---------|--------|--------|--------|
| Gross Carrying Amount              |   | $      | 45,422  |   |   | $      | 45,422 |   |
| Accumulated Amortization           |   |   | (32,760 | )      |   |   | (28,039 | ) |
| Core Deposit and Other Intangibles |   | $      | 12,662  |   |   | $      | 17,383 |   |

| 2011       |   | $      | 3,548  |   |
|------------|--------|--------|--------|--------|
| 2012       |   |   | 1,858  |   |
| 2013       |   |   | 1,441  |   |
| 2014       |   |   | 1,437  |   |
| 2015       |   |   | 1,437  |   |
| After 2015 |   |   | 2,941  |   |
|       |   | $      | 12,662 |   |

----

|                                                     |   | 2010   |      |   | 2009   |   |
|----------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Deposits at December 31,                                 |   |   |      |   |   |   |
| Demand Deposits                                          |   | $      | 1,362,927 |   |   | $      | 1,308,741 |   |
| Savings Deposits                                         |   |   | 763,949   |   |   |   | 733,142 |   |
| Certificates and Other Time Deposits of $100,000 or more |   |   | 334,748   |   |   |   | 438,264 |   |
| Other Certificates and Time Deposits                     |   |   | 807,256   |   |   |   | 1,056,389 |   |
| Total Deposits                                           |   | $      | 3,268,880 |   |   | $      | 3,536,536 |   |

| Certificates and Other Time Deposits Maturing in Years Ending December 31: |   |   |      |
|----------------------------------------------------------------------------|--------|--------|-----------|
| 2011                                                                       |   | $      | 780,347   |   |
| 2012                                                                       |   |   | 186,378   |   |
| 2013                                                                       |   |   | 141,793   |   |
| 2014                                                                       |   |   | 18,972    |   |
| 2015                                                                       |   |   | 9,385     |   |
| After 2015                                                                 |   |   | 5,129     |   |
|                                                                       |   | $      | 1,142,004 |   |

----

----

| Assets                                                                   |   |   |    |
|--------------------------------------------------------------------------|--------|--------|---------|
| Other assets - investment in common stock of trust                       |   | $      | 1,435   |   |
| Deferred income taxes                                                    |   |   | (5,413  | ) |
| Total assets                                                             |   | $      | (3,978  | ) |
|                                                                     |   |   |    |   |
| Liabilities                                                              |   |   |    |   |
| Subordinated debentures, net:                                            |   |   |    |   |
| Issuance                                                                 |   | $      | 47,835  |   |
| Discount                                                                 |   |   | (16,766 | ) |
| Total liabilities                                                        |   | $      | 31,069  |   |
|                                                                     |   |   |    |   |
| Stockholders' equity                                                     |   |   |    |   |
| Preferred stock, par value $.001 per share                               |   |   |    |   |
| Additional paid in capital - preferred ($46,400 less discount of $1,301) |   | $      | (45,099 | ) |
| Retained Earnings (net of $5,413 deferred taxes)                         |   |   | 10,052  |   |
| Total stockholders' equity                                               |   | $      | (35,047 | ) |
|                                                                     |   |   |    |   |
| Total liabilities and stockholders' equity                               |   | $      | (3,978  | ) |

|                                                           |   | 2010   |    |   | 2009   |   |
|----------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Borrowings at December 31:                                     |   |   |    |   |   |   |
| Securities Sold Under Repurchase Agreements                    |   | $      | 109,871 |   |   | $      | 125,687 |   |
| Federal Home Loan Bank Advances                                |   |   | 82,684  |   |   |   | 129,749 |   |
| Subordinated Debentures, Revolving Credit Lines and Term Loans |   |   | 226,440 |   |   |   | 194,790 |   |
| Total Borrowings                                               |   | $      | 418,995 |   |   | $      | 450,226 |   |

| Maturities in Years Ending December 31: |   | Securities Sold Under Repurchase Agreements |    |   | Federal Home Loan Bank Advances |   |   | Subordinated Debentures Revolving Credit Lines and Term Loans |   |
|-----------------------------------------|--------|---------------------------------------------|---------|--------|---------------------------------|--------|--------|---------------------------------------------------------------|--------|
| 2011                                    |   | $                                           | 85,621  |   |                            | $      | 18,930 |                                                          |   | $ | 272 |   |
| 2012                                    |   |                                        | 14,250  |   |                            |   | 50,092 |                                                          |   |   | 78,980 |   |
| 2013                                    |   |                                        |    |   |                            |   | 226    |                                                          |   |   |   |   |
| 2014                                    |   |                                        | 10,000  |   |                            |   | 1,270  |                                                          |   |   |   |   |
| 2015                                    |   |                                        |    |   |                            |   | 2,000  |                                                          |   |   | 55,000 |   |
| After 2015                              |   |                                        |    |   |                            |   | 10,166 |                                                          |   |   | 92,188 |   |
|                                    |   | $                                           | 109,871 |   |                            | $      | 82,684 |                                                          |   | $ | 226,440 |   |

----

| ·  | First Merchants Capital Trust III. The Corporation entered into a junior subordinated debenture on June 30, 2010 for $47,835,000. The Corporation may redeem the debenture, in whole or in part, at its option while the Capital Securities or this Security are held by the United States Department of the Treasury in conjunction with Troubled Asset Relief Program assistance provided to the Corporation, or at any time on or after June 30, 2015, subject to the prior approval of the Board of Governors of the Federal Reserve System, as required by law or regulation. Interest is fixed at 5.00 percent for the period from the date of issuance through February 19, 2014, and thereafter, at a fixed rate of 9.00 percent. Interest is payable in February, May, August and November of each year. The Corporation holds all of the outstanding common securities of First Merchants Capital Trust III. |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·  | First Merchants Capital Trust II. The subordinated debenture, entered into on July 2, 2007, for $56,702,000 will mature on September 15, 2037. The Corporation may redeem the debenture no earlier than September 15, 2012, subject to the prior approval of the Board of Governors of the Federal Reserve System, as required by law or regulation. Interest is fixed at 6.495 percent for the period from the date of issuance through September 15, 2012, and thereafter, at an annual floating rate equal to the three-month LIBOR plus 1.56 percent, reset quarterly. Interest is payable in March, June, September and December of each year. The Corporation holds all of the outstanding common securities of First Merchants Capital Trust II. |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·  | CNBC Statutory Trust I. As part of the March 1, 2003, acquisition of CNBC Bancorp, the Corporation assumed $4,124,000 of a junior subordinated debenture entered into on February 22, 2001. The subordinated debenture of $4,124,000 will mature on February 22, 2031. Interest is fixed at 10.20 percent and payable on February 22 and August 22 of each year. The Corporation may redeem the debenture, in whole or in part, at its option commencing February 22, 2011, at a redemption price of 105.10 percent of the outstanding principal amount and, thereafter, at a premium which declines annually. On or after February 22, 2021, the securities may be redeemed at face value with prior approval of the Board of Governors of the Federal Reserve System. The Corporation holds all of the outstanding common securities of CNBC Statutory Trust I. |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Bank of America, N.A. The Corporation currently has a $55 million credit facility with Bank of America, N.A. comprised of (a) a term loan in the principal amount of $5.0 million (the “Term Loan”) and (b) a subordinated debenture in the principal amount of $50.0 million (the “Subordinated Debt”).  Pursuant to the terms of the underlying Loan Agreement (the “Loan Agreement”), the Term Loan and the Subordinated Debt each mature on February 15, 2015.  The Term Loan is secured by a pledge of all of the issued and outstanding shares of the Bank. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·    | Temporary Liquidity Guarantee Program. On March 31, 2009, the Bank, entered into $79,000,000 of 2.625 percent Senior Notes (the “Notes”) due on March 30, 2012 through a pooled offering. Including the FDIC fee, underwriting, legal and accounting expenses, the effective rate is 3.812 percent. The Notes are guaranteed by the Federal Deposit Insurance Corporation under its Temporary Liquidity Guarantee Program and are backed by the full faith and credit of the United States. The Notes are issued by the Bank and are not an obligation of, or guaranteed by, the Corporation. In connection with the FDIC's Temporary Liquidity Guarantee Program, the Bank entered into a Master Agreement with the FDIC on January 16, 2009. The Master Agreement contains, among other things, certain terms and conditions that must be included in the governing documents for any senior debt securities issued by the Bank that is guaranteed pursuant to the FDIC's Temporary Liquidity Guarantee Program. |
|--------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | First Merchants Capital Trust II. The subordinated debenture, entered into on July 2, 2007, for $56,702,000 will mature on September 15, 2037. The Corporation may redeem the debenture no earlier than September 15, 2012, subject to the prior approval of the Board of Governors of the Federal Reserve System, as required by law or regulation. Interest is fixed at 6.495 percent for the period from the date of issuance through September 15, 2012, and thereafter, at an annual floating rate equal to the three-month LIBOR plus 1.56 percent, reset quarterly. Interest is payable in March, June, September and December of each year. First Merchants Capital Trust II is a wholly owned subsidiary of the Corporation. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·    | CNBC Statutory Trust I. As part of the March 1, 2003, acquisition of CNBC Bancorp, the Corporation assumed $4,124,000 of a junior subordinated debenture entered into on February 22, 2001. The subordinated debenture of $4,124,000 will mature on February 22, 2031. Interest is fixed at 10.20 percent and payable on February 22 and August 22 of each year. The Corporation may redeem the debenture, in whole or in part, at its option commencing February 22, 2011, at a redemption price of 105.10 percent of the outstanding principal amount and, thereafter, at a premium which declines annually. On or after February 22, 2021, the securities may be redeemed at face value with prior approval of the Board of Governors of the Federal Reserve System. CNBC Statutory Trust I is a wholly owned subsidiary of the Corporation. |
|--------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·    | Bank of America, N.A., as successor to LaSalle Bank National Association.  The Corporation currently has a $55 million credit facility with Bank of America, N.A. comprised of (a) a term loan in the principal amount of $5.0 million (the “Term Loan”) and (b) a subordinated debenture in the principal amount of $50.0 million (the “Subordinated Debt”).  Pursuant to the terms of the underlying Loan Agreement (the “Loan Agreement”), the Term Loan and the Subordinated Debt each mature on February 15, 2015.  The Term Loan is secured by a pledge of all of the issued and outstanding shares of the Bank. |
|--------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Temporary Liquidity Guarantee Program. On March 31, 2009, the Bank, entered into $79,000,000 of 2.625 percent Senior Notes (the “Notes”) due on March 30, 2012 through a pooled offering. Including the FDIC fee, underwriting, legal and accounting expenses, the effective rate is 3.812 percent. The Notes are guaranteed by the Federal Deposit Insurance Corporation under its Temporary Liquidity Guarantee Program and are backed by the full faith and credit of the United States. The Notes are issued by the Bank and are not an obligation of, or guaranteed by, the Corporation. In connection with the FDIC's Temporary Liquidity Guarantee Program, the Bank entered into a Master Agreement with the FDIC on January 16, 2009. The Master Agreement contains, among other things, certain terms and conditions that must be included in the governing documents for any senior debt securities issued by the Bank that is guaranteed pursuant to the FDIC's Temporary Liquidity Guarantee Program. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                       |   | 2010   |   |   | 2009   |   |    | 2008   |   |
|------------------------------------------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|
| Income Tax Expense for the Year Ended December 31:         |   |   |   |   |   |   |    |   |   |
| Currently Payable:                                         |   |   |   |   |   |   |    |   |   |
| Federal                                                    |   | $      | (1,780 | )      |   | $      | (13,387 | )      |   | $ | 16,533 |   |
| State                                                      |   |   |   |   |   |   | (4,179  | )      |   |   | 216 |   |
| Deferred:                                                  |   |   |   |   |   |   |    |   |   |   |   |   |
| Federal                                                    |   |   | (1,810 | )      |   |   | (15,037 | )      |   |   | (8,450 | ) |
| State                                                      |   |   |   |   |   |   | 4,179   |   |   |   | (216 | ) |
| Total Income Tax Expense                                   |   | $      | (3,590 | )      |   | $      | (28,424 | )      |   | $ | 8,083 |   |
|                                                       |   |   |   |   |   |   |    |   |   |   |   |   |
| Reconciliation of Federal Statutory to Actual Tax Expense: |   |   |   |   |   |   |    |   |   |   |   |   |
| Federal Statutory income Tax at 35%                        |   | $      | 1,162  |   |   | $      | (24,216 | )      |   | $ | 10,052 |   |
| Tax-exempt Interest Income                                 |   |   | (3,733 | )      |   |   | (3,623  | )      |   |   | (2,226 | ) |
| Non-deductible Interest Expense                            |   |   | 421    |   |   |   |    |   |   |   |   |   |
| Stock Compensation                                         |   |   | 150    |   |   |   | 205     |   |   |   | 176 |   |
| Earnings on Life Insurance                                 |   |   | (725   | )      |   |   | (550    | )      |   |   | 124 |   |
| Tax Credits                                                |   |   | (116   | )      |   |   | (758    | )      |   |   | (177 | ) |
| Other                                                      |   |   | (749   | )      |   |   | 518     |   |   |   | 134 |   |
| Actual Tax Expense                                         |   | $      | (3,590 | )      |   | $      | (28,424 | )      |   | $ | 8,083 |   |

|                                                                                                                                                                                                               |   | 2010   |    |   | 2009   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Deferred Tax Asset at December 31:                                                                                                                                                                                 |   |   |    |   |   |   |
| Assets:                                                                                                                                                                                                            |   |   |    |   |   |   |
| Differences in Accounting for Loan Losses                                                                                                                                                                          |   | $      | 35,014  |   |   | $      | 38,083 |   |
| Differences in Accounting for Loan Fees                                                                                                                                                                            |   |   | 641     |   |   |   | 499 |   |
| Differences in Accounting for Loans and Securities                                                                                                                                                                 |   |   | 440     |   |   |   |   |   |
| Deferred Compensation                                                                                                                                                                                              |   |   | 7,423   |   |   |   | 7,488 |   |
| Difference in Accounting for Pensions and Other Employee Benefits                                                                                                                                                  |   |   |    |   |   |   | 8,616 |   |
| Federal & State Income Tax Loss Carryforward and Credits                                                                                                                                                       |   |   | 14,196  |   |   |   | 12,220 |   |
| Other                                                                                                                                                                                                              |   |   | 579     |   |   |   | 3,923 |   |
| Total Assets                                                                                                                                                                                                       |   |   | 58,293  |   |   |   | 70,829 |   |
| Liabilities:                                                                                                                                                                                                       |   |   |    |   |   |   |   |   |
| Differences in Depreciation Methods                                                                                                                                                                                |   |   | 5,387   |   |   |   | 5,247 |   |
| Differences in Accounting for Loans and Securities                                                                                                                                                                 |   |   |    |   |   |   | 3,849 |   |
| Difference in Accounting for Pensions and Other Employee Benefits                                                                                                                                                  |   |   | 581     |   |   |   |   |   |
| State Income Tax                                                                                                                                                                                                   |   |   | 354     |   |   |   | 356 |   |
| Net Unrealized Gain on Securities Available for Sale                                                                                                                                                               |   |   | 951     |   |   |   | 2,247 |   |
| Other                                                                                                                                                                                                              |   |   | 2,827   |   |   |   | 1,594 |   |
| Total Liabilities                                                                                                                                                                                                  |   |   | 10,100  |   |   |   | 13,293 |   |
|                           Net Deferred Tax Asset Before Valuation Allowance |   |   | 48,193  |   |   |   | 57,536 |   |
| Valuation allowance:                                                                                                                                                                                               |   |   |    |   |   |   |   |   |
| Beginning Balance                                                                                                                                                                                                  |   |   | (12,680 | )      |   |   |   |   |
| Increase During the Year                                                                                                                                                                                           |   |   | (578    | )      |   |   | (12,680 | ) |
| Ending Balance                                                                                                                                                                                                     |   |   | (13,258 | )      |   |   | (12,680 | ) |
|                           Net Deferred Tax Asset                            |   | $      | 34,935  |   |   | $      | 44,856 |   |

----

|                              |   | 2010   |    |   | 2009   |   |
|-----------------------------------|--------|--------|---------|--------|--------|--------|
| Amounts of commitments:           |   |   |    |   |   |   |
| Loan commitments to extend credit |   | $      | 531,752 |   |   | $      | 686,809 |   |
| Standby letters of credit         |   | $      | 37,713  |   |   | $      | 44,248 |   |

----

----

|                                     |   | 2010   |    |   | 2009             |   |
|------------------------------------------|--------|--------|---------|--------|------------------|--------|
|                                     |   |   |    |   |             |   |   | Required For |   |   |   |   |   |   |   |   | Required For |   |
|                                     |   | Actual |    |   | Adequate Capital |   |   | Actual |   |   | Adequate Capital |   |
| December 31,                             |   | Amount |    |   | Ratio            |   |   | Amount |   |   | Ratio |   |   | Amount |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
| Total Capital (to Risk-weighted Assets)  |   |   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                             |   | $      | 476,490 |   |             |   | 15.74 | % |   | $ | 242,195 |   |   |   | 8.00 | % |   | $ | 448,774 |   |   |   | 13.04 | % |   | $ | 275,257 |   |   |   | 8.00 | % |
| First Merchants                          |   |   | 450,629 |   |             |   | 14.89 |   |   |   | 242,088 |   |   |   | 8.00 |   |   |   | 424,276 |   |   |   | 12.40 |   |   |   | 273,691 |   |   |   | 8.00 |   |
|                                     |   |   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier I Capital (to Risk-weighted Assets) |   |   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                             |   | $      | 388,090 |   |             |   | 12.82 | % |   | $ | 121,098 |   |   |   | 4.00 | % |   | $ | 355,159 |   |   |   | 10.32 | % |   | $ | 137,628 |   |   |   | 4.00 | % |
| First Merchants                          |   |   | 412,654 |   |             |   | 13.64 |   |   |   | 121,044 |   |   |   | 4.00 |   |   |   | 380,906 |   |   |   | 11.13 |   |   |   | 136,846 |   |   |   | 4.00 |   |
|                                     |   |   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier I Capital (to Average Assets)       |   |   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                             |   | $      | 388,090 |   |             |   | 9.50 | % |   | $ | 163,352 |   |   |   | 4.00 | % |   | $ | 355,159 |   |   |   | 8.20 | % |   | $ | 173,157 |   |   |   | 4.00 | % |
| First Merchants                          |   |   | 412,654 |   |             |   | 10.14 |   |   |   | 162,790 |   |   |   | 4.00 |   |   |   | 380,906 |   |   |   | 8.74 |   |   |   | 174,250 |   |   |   | 4.00 |   |

|                                           | 2010   |        | 2009   |        | 2008   |        |
|------------------------------------------------|--------|-------------|--------|-------------|--------|-------------|
| Risk-free interest rate                        | 2.38%  |        | 2.03%  |        | 2.69%  |        |
| Expected price volatility                      | 43.54% |        | 35.19% |        | 32.13% |        |
| Dividend yield                                 | 4.02%  |        | 3.72%  |        | 3.68%  |        |
| Forfeiture rate                                | 5.00%  |        | 4.00%  |        | 5.00%  |        |
| Weighted-average expected life, until exercise | 6.68   |  years | 6.57   |  years | 6.53   |  years |

----

|                                                        |   | Year Ended        |   |   | Year Ended        |   |   | Year Ended        |   |
|-------------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|--------|-------------------|--------|
|                                                        |   | December 31, 2010 |   |   | December 31, 2009 |   |   | December 31, 2008 |   |
| Stock and ESPP Options                                      |   |              |   |   |              |   |   |              |   |
| Pre-tax compensation expense                                |   | $                 | 632    |   |              | $      | 832    |              |   | $ | 650 |   |
| Income tax benefit                                          |   |              | (71    | )      |              |   | (87    | )                 |   |   | (49 | ) |
| Stock and ESPP option expense, net of income taxes          |   | $                 | 561    |   |              | $      | 745    |              |   | $ | 601 |   |
| Restricted Stock Awards                                     |   |              |   |   |              |   |   |              |   |   |   |   |
| Pre-tax compensation expense                                |   | $                 | 1,118  |   |              | $      | 1,462  |              |   | $ | 1,248 |   |
| Income tax benefit                                          |   |              | (391   | )      |              |   | (501   | )                 |   |   | (437 | ) |
| Restricted stock awards expense, net of income taxes        |   | $                 | 727    |   |              | $      | 961    |              |   | $ | 811 |   |
| Total Share-Based Compensation:                             |   |              |   |   |              |   |   |              |   |   |   |   |
| Pre-tax compensation expense                                |   | $                 | 1,750  |   |              | $      | 2,294  |              |   | $ | 1,898 |   |
| Income tax benefit                                          |   |              | (462   | )      |              |   | (588   | )                 |   |   | (486 | ) |
| Total share-based compensation expense, net of income taxes |   | $                 | 1,288  |   |              | $      | 1,706  |              |   | $ | 1,412 |   |

|                                             |   | 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                                          |   |             | 48,500    |   |                            | $      | 6.58   |                                                   |   |   |                      |   |   |   |
| Cancelled                                        |   |             | (75,001   | )      |                            |   | 19.71  |                                                   |   |   |                      |   |   |   |
| Outstanding December 31, 2010                    |   |             | 1,061,429 |   |                            | $      | 23.01  |                                                   |   |   | 4.85                      |   |   |   | 114,345 |   |
| Vested and Expected to Vest at December 31, 2010 |   |             | 1,061,429 |   |                            | $      | 23.01  |                                                   |   |   | 4.85                      |   |   |   | 114,345 |   |
| Exercisable at December 31, 2010                 |   |             | 834,806   |   |                            | $      | 25.13  |                                                   |   |   | 3.91                      |   |   |   | 3,780 |   |

|                               |   | Number of Shares |    |   | Weighted-Average Grant Date Fair Value |   |
|------------------------------------|--------|------------------|---------|--------|----------------------------------------|--------|
| Unvested RSAs at January 1, 2010   |   |             | 204,091 |   |                                   | $      | 19.95 |   |
| Granted                            |   |             | 125,236 |   |                                   | $      | 6.29 |   |
| Forfeited                          |   |             | (6,718  | )      |                                   | $      | 15.61 |   |
| Vested                             |   |             | (49,872 | )      |                                   | $      | 25.81 |   |
| Unvested RSAs at December 31, 2010 |   |             | 272,737 |   |                                   | $      | 12.46 |   |

----

|                                                                                                                                   |   | December 31, |    |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|
|                                                                                                                                   |   | 2010         |    |   | 2009 |   |
| Change in benefit obligation                                                                                                           |   |         |    |   |   |   |
| Benefit obligation at beginning of year                                                                                                |   | $            | 57,852  |   |   | $ | 58,875 |   |
| Service Cost                                                                                                                           |   |         | 342     |   |   |   | 1,516 |   |
| Interest Cost                                                                                                                          |   |         | 3,291   |   |   |   | 2,076 |   |
| Actuarial Loss (Gain)                                                                                                                  |   |         | 3,226   |   |   |   | (1,468 | ) |
| Adjustment due to measurement date change                                                                                              |   |         |    |   |   |   |   |   |
| Benefits paid                                                                                                                          |   |         | (3,289  | ) |   |   | (3,147 | ) |
| Benefit obligation at end of year                                                                                                      |   |         | 61,422  |   |   |   | 57,852 |   |
| Change in plan assets                                                                                                                  |   |         |    |   |   |   |   |   |
| Fair value of plan assets at beginning of year                                                                                         |   |         | 60,656  |   |   |   | 47,514 |   |
| Actual return on plan assets                                                                                                           |   |         | 5,419   |   |   |   | 5,832 |   |
| Expected return on plan assets                                                                                                         |   |         |    |   |   |   |   |   |
| Employer contributions                                                                                                                 |   |         | 489     |   |   |   | 10,457 |   |
| Adjustment due to measurement date change                                                                                              |   |         |    |   |   |   |   |   |
| Benefits Paid                                                                                                                          |   |         | (3,289  | ) |   |   | (3,147 | ) |
| End of Year                                                                                                                            |   |         | 63,275  |   |   |   | 60,656 |   |
| Funded Status at End of Year                                                                                                           |   | $            | 1,853   |   |   | $ | 2,804 |   |
| Assets and Liabilities Recognized in the Balance Sheets:                                                                               |   |         |    |   |   |   |   |   |
| Deferred Tax Asset                                                                                                                     |   | $            | 7,419   |   |   | $ | 7,043 |   |
| Assets                                                                                                                                 |   | $            | 6,938   |   |   | $ | 7,767 |   |
| Liabilities                                                                                                                            |   | $            | 5,085   |   |   | $ | 4,963 |   |
| Amounts Recognized in Accumulated Other Comprehensive Income Not Yet Recognized as Components of Net Periodic Benefit Cost Consist of: |   |         |    |   |   |   |   |   |
| Accumulated Loss                                                                                                                       |   | $            | (11,027 | ) |   | $ | (17,462 | ) |
| Prior Service Credit                                                                                                                   |   |         | (71     | ) |   |   | (144 | ) |
|                                                                                                                                   |   | $            | (11,098 | ) |   | $ | (17,606 | ) |

|                           |   | December 31, |   |
|--------------------------------|--------|--------------|--------|
|                           |   | 2010         |   |   | 2009 |   |
| Projected Benefit Obligation   |   | $            | 5,085  |   |   | $ | 4,513 |   |
| Accumulated Benefit Obligation |   | $            | 5,085  |   |   | $ | 4,513 |   |
| Fair Value of Plan Assets      |   | $            | -      |   |   | $ | - |   |

|                                |   | December 31, |   |
|-------------------------------------|--------|--------------|--------|
|                                |   | 2010         |   |   | 2009 |   |
| Service Cost                        |   | $            | 342    |   |   | $ | 404 |   |
| Interest Cost                       |   |         | 3,291  |   |   |   | 3,187 |   |
| Expected Return on Plan Assets      |   |         | (4,136 | ) |   |   | (3,571 | ) |
| Amortization of Prior Service Costs |   |         | 25     |   |   |   | 26 |   |
| Amortization of Net Loss            |   |         | 1,026  |   |   |   | 1,407 |   |
| Net Periodic Pension Cost           |   | $            | 548    |   |   | $ | 1,453 |   |

----

|                                           |   | December 31, |   |
|------------------------------------------------|--------|--------------|--------|
|                                           |   | 2010         |   |   | 2009 |   |
| Net Periodic Pension Cost                      |   | $            | 548    |   |   | $ | 1,453 |   |
| Net gain (loss)                                |   |         | 1,942  |   |   |   | (2,268 | ) |
| Actuarial gain (loss)                          |   |         | (1,026 | ) |   |   | (844 | ) |
| Amortization of prior service (cost) credit    |   |         | (25    | ) |   |   | 9 |   |
| Total Recognized in other Comprehensive Income |   |         | 891    |   |   |   | (3,103 | ) |
| Total Recognized in NPPC and OCI               |   | $            | 1,439  |   |   | $ | (1,650 | ) |

|                               |   | December 31, |   |
|------------------------------------|--------|--------------|--------|
|                               |   | 2010         |   |   | 2009 |   |
| Amortization of Net Loss           |   | $            | (1,160 | ) |   | $ | 926 |   |
| Amortization of Prior Service Cost |   |         | (25    | ) |   |   | 25 |   |
| Total                              |   | $            | (1,185 | ) |   | $ | 951 |   |

|                                                               | December 31, |
|--------------------------------------------------------------------|--------------|
|                                                               | 2010         |   | 2009 |
| Weighted-average Assumptions Used to Determine Benefit Obligation: |         |   |   |
| Discount Rate                                                      | 5.40%        |   | 5.90% |
| Rate of Compensation Increase                                      | 4.00%        |   | 3.50% |
| Weighted-average Assumptions Used to Determine Benefit Cost:       |         |   |   |
| Discount Rate                                                      | 5.90%        |   | 5.90% |
| Expected Return on Plan Assets                                     | 7.00%        |   | 7.00% |
| Rate of Compensation Increase                                      | 3.50%        |   | 3.50% |

| 2011           |   | $      | 3,593  |   |
|----------------|--------|--------|--------|--------|
| 2012           |   |   | 3,736  |   |
| 2013           |   |   | 3,846  |   |
| 2014           |   |   | 3,996  |   |
| 2015           |   |   | 4,101  |   |
| 2016 and After |   |   | 20,645 |   |
|           |   | $      | 39,917 |   |

----

|                      |   | December 31, |   |
|---------------------------|--------|--------------|--------|
|                      |   | 2010         |   |   | 2009 |   |
| Cash and Cash Equivalents |   |         | 5.3    | % |   |   | 27.5 | % |
| Equity Securities         |   |         | 51.5   | % |   |   | 40.9 | % |
| Debt Securities           |   |         | 43.2   | % |   |   | 31.6 | % |
|                      |   |         | 100    | % |   |   | 100 | % |

|                        |   |       |   |   | Fair Value Measurements Using                        |
|-----------------------------|--------|------------|--------|--------|------------------------------------------------------|
|                        |   |       |   |   | Quoted Prices in Active Markets for Identical Assets |   |   | Significant Other Observable Inputs |   | Significant Unobservable Inputs |
| December 31, 2010           |   | Fair Value |   |   | (Level 1)                                            |   |   | (Level 2) |   | (Level 3) |
| Cash & cash equivalents |   | $          | 3,340  |   |                                                 | $ | 3,340 |   |   |   |   |   |
| Equity Securities:          |   |       |   |   |                                                 |   |   |   |   |   |   |   |
| U..S. companies             |   |       | 637    |   |                                                 |   | 637 |   |   |   |   |   |
| U.S. mutual funds           |   |       | 26,968 |   |                                                 |   | 26,968 |   |   |   |   |   |
| International mutual funds  |   |       | 4,965  |   |                                                 |   | 4,965 |   |   |   |   |   |
| Debt Securities:            |   |       |   |   |                                                 |   |   |   |   |   |   |   |
| Bond mutual funds           |   |       | 12,090 |   |                                                 |   | 12,090 |   |   |   |   |   |
| U.S. Government agencies    |   |       | 1,227  |   |                                                 |   |   |   |   | $ | 1,227 |   |   |
| Taxable municipals          |   |       | 6,653  |   |                                                 |   |   |   |   |   | 6,653 |   |   |
| Corporate bonds             |   |       | 7,395  |   |                                                 |   |   |   |   |   | 7,395 |   |   |

----

|                                                                       |   | 2010              |   |   | 2009                    |   |       | 2008             |   |
|----------------------------------------------------------------------------|--------|-------------------|--------|--------|-------------------------|--------|------------|------------------|--------|
|                                                                       |   | Net Income (Loss) |   |   | Weighted-Average Shares |   |       | Per Share Amount |   |   | Net Income (Loss) |   |   | Weighted-Average Shares |   |   | Per Share Amount |   |   | Net Income (Loss) |   |   | Weighted-Average Shares |   |   | Per Share Amount |   |
| Basic net income (loss) per share:                                         |   | $                 | 6,909  |   |                    |   |       |             |   |   |   | $ | (40,763 | ) |   |   |   |   |   |   |   | $ | 20,638 |   |   |   |   |   |   |   |
| Gain on exchange of preferred stock for trust preferred debt               |   |              | 10,052 |   |                    |   |       |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less: Preferred stock dividends and discount accretion                     |   |              | 5,239  |   |                    |   |       |             |   |   |   |   | 4,979 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) available to common stockholders                         |   |              | 11,722 |   |                    |   | 24,519,033 |             |   | $ | 0.48 |   |   |   | (45,742 | ) |   |   | 21,116,616 |   |   | $ | (2.17 | ) |   |   | 20,638 |   |   |   | 18,066,404 |   |   | $ | 1.14 |   |
| Effect of dilutive stock options and warrants                              |   |              |   |   |                    |   | 123,392    |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 95,477 |   |   |   |   |   |
| Diluted net income (loss) per share:                                       |   |              |   |   |                    |   |       |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) available to common stockholders and assumed conversions |   | $                 | 11,722 |   |                    |   | 24,642,425 |             |   | $ | 0.48 |   |   | $ | (45,742 | ) |   |   | 21,116,616 |   |   | $ | (2.17 | ) |   | $ | 20,638 |   |   |   | 18,161,881 |   |   | $ | 1.14 |   |

----

|                                        |   |       |    | Fair Value Measurements Using                        |   |
|---------------------------------------------|--------|------------|---------|------------------------------------------------------|--------|
|                                        |   |       |    | Quoted Prices in Active Markets for Identical Assets |   | Significant Other Observable Inputs |   |   | Significant Unobservable Inputs |   |
| December 31, 2010                           |   | Fair Value |    | (Level 1)                                            |   | (Level 2) |   |   | (Level 3) |   |
| U.S. Government-sponsored agency securities |   | $          | 616     |                                                 |   |   | $ | 616 |   |   |   |   |
| State and municipal                         |   |       | 239,990 |                                                 |   |   |   | 239,990 |   |   |   |   |
| Mortgage-backed securities                  |   |       | 295,317 |                                                 |   |   |   | 295,317 |   |   |   |   |
| Corporate obligations                       |   |       | 182     |                                                 |   |   |   |   |   |   | $ | 182 |   |
| Equity securities                           |   |       | 3,265   |                                                 |   |   |   | 3,261 |   |   |   | 4 |   |
| Interest rate swap asset                    |   |       | 4,002   |                                                 |   |   |   |   |   |   |   | 4,002 |   |
| Interest rate cap                           |   |       | 1,109   |                                                 |   |   |   |   |   |   |   | 1,109 |   |
| Interest rate swap liability                |   |       | (3,876  | )                                                    |   |   |   |   |   |   |   | (3,876 | ) |

|                                        |   |       |    | Fair Value Measurements Using                        |   |
|---------------------------------------------|--------|------------|---------|------------------------------------------------------|--------|
|                                        |   |       |    | Quoted Prices in Active Markets for Identical Assets |   | Significant Other Observable Inputs |   |   | Significant Unobservable Inputs |   |
| December 31, 2009                           |   | Fair Value |    | (Level 1)                                            |   | (Level 2) |   |   | (Level 3) |   |
| 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 | ) |

----

|                                           |   | Year Ended                    |   |
|------------------------------------------------|--------|-------------------------------|--------|
|                                           |   | December 31, 2010             |   |
|                                           |   | Available for Sale Securities |   |   | Interest Rate Swap Asset |   |   | Interest Rate Cap |   |   | Interest Rate Swap Liability |   |
| Beginning Balance                              |   | $                             | 2,483  |   |   | $ | 2,624 |   |   |   |   |   | $ | (2,648 | ) |
| Total realized and unrealized gains and losses |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Included in net income                         |   |                          | (1,544 | ) |   |   | 1,094 |   |   |   |   |   |   | (1,228 | ) |
| Included in other comprehensive income         |   |                          | (1,081 | ) |   |   | 284 |   |   | $ | 158 |   |   |   |   |   |
| Purchases, issuances, and settlements          |   |                          |   |   |   |   |   |   |   |   | 951 |   |   |   |   |   |
| Transfers in/(out) of Level 3                  |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Principal payments                             |   |                          | 328    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance                                 |   | $                             | 186    |   |   | $ | 4,002 |   |   | $ | 1,109 |   |   | $ | (3,876 | ) |

|                                           |   | Year Ended                    |   |
|------------------------------------------------|--------|-------------------------------|--------|
|                                           |   | December 31, 2009             |   |
|                                           |   | Available for Sale Securities |   |   | Interest Rate Swap Asset |   |   | Interest Rate Swap Liability |   |
| Beginning Balance                              |   | $                             | 7,929  |   |   | $ | 4,094 |   |   | $ | (4,224 | ) |
| Total realized and unrealized gains and losses |   |                          |   |   |   |   |   |   |   |   |   |   |
| Included in net income                         |   |                          | (6,729 | ) |   |   | 105 |   |   |   | 1 |   |
| Included in other comprehensive income         |   |                          | 4,317  |   |   |   |   |   |   |   |   |   |
| Purchases, issuances, and settlements          |   |                          |   |   |   |   |   |   |   |   |   |   |
| Transfers in/(out) of Level 3                  |   |                          | (3,460 | ) |   |   |   |   |   |   |   |   |
| Principal payments                             |   |                          | 426    |   |   |   | (1,575 | ) |   |   | 1,575 |   |
| Ending balance                                 |   | $                             | 2,483  |   |   | $ | 2,624 |   |   | $ | (2,648 | ) |

|                                           |   |       |   | Fair Value Measurements Using                        |                                |
|------------------------------------------------|--------|------------|--------|------------------------------------------------------|-------------------------------------|
|                                           |   |       |   | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs |   | Significant Unobservable Inputs |   |
| December 31, 2010                              |   | Fair Value |   | (Level 1)                                            | (Level 2)                           |   | (Level 3) |   |
| Impaired Loans                                 |   | $          | 45,432 |                                                 |                                |   |   | $ | 45,432 |   |
| Other real estate owned (collateral dependent) |   | $          | 6,314  |                                                 |                                |   |   | $ | 6,314 |   |

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

----

|                                                           |   | 2010            |      |   | 2009       |   |
|----------------------------------------------------------------|--------|-----------------|-----------|--------|------------|--------|
|                                                           |   | Carrying Amount |      |   | Fair Value |   |   | Carrying Amount |   |   | Fair Value |   |
| Assets at December 31:                                         |   |            |      |   |       |   |   |   |   |   |   |   |
| Cash and Due from Banks                                        |   | $               | 58,307    |   |       | $      | 58,307 |   |   | $ | 179,147 |   |   | $ | 179,147 |   |
| Interest-bearing Time Deposits                                 |   |            | 65,216    |   |       |   | 65,216 |   |   |   | 74,025 |   |   |   | 74,025 |   |
| Investment Securities Available for Sale                       |   |            | 539,370   |   |       |   | 539,370 |   |   |   | 413,607 |   |   |   | 413,607 |   |
| Investment Securities Held to Maturity                         |   |            | 287,427   |   |       |   | 286,270 |   |   |   | 149,510 |   |   |   | 147,336 |   |
| Mortgage Loans Held for Sale                                   |   |            | 21,469    |   |       |   | 21,469 |   |   |   | 8,036 |   |   |   | 8,036 |   |
| Loans                                                          |   |            | 2,752,706 |   |       |   | 2,715,924 |   |   |   | 3,177,657 |   |   |   | 3,138,134 |   |
| FRB and FHLB Stock                                             |   |            | 33,884    |   |       |   | 33,884 |   |   |   | 38,576 |   |   |   | 38,576 |   |
| Interest Rate Swap Asset                                       |   |            | 5,111     |   |       |   | 5,111 |   |   |   | 2,624 |   |   |   | 2,624 |   |
| Interest Receivable                                            |   |            | 18,674    |   |       |   | 18,674 |   |   |   | 20,818 |   |   |   | 20,818 |   |
| Liabilities at December 31:                                    |   |            |      |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                       |   | $               | 3,268,880 |   |       | $      | 3,280,489 |   |   | $ | 3,536,536 |   |   | $ | 3,458,754 |   |
| Borrowings:                                                    |   |            |      |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Securities Sold Under Repurchase Agreements                    |   |            | 109,871   |   |       |   | 110,494 |   |   |   | 125,687 |   |   |   | 125,977 |   |
| FHLB Advances                                                  |   |            | 82,684    |   |       |   | 87,463 |   |   |   | 129,749 |   |   |   | 136,863 |   |
| Subordinated Debentures, Revolving Credit Lines and Term Loans |   |            | 226,440   |   |       |   | 176,259 |   |   |   | 194,790 |   |   |   | 148,618 |   |
| Interest Rate Swap Liability                                   |   |            | 3,876     |   |       |   | 3,876 |   |   |   | 2,648 |   |   |   | 2,648 |   |
| Interest Payable                                               |   |            | 4,262     |   |       |   | 4,262 |   |   |   | 5,711 |   |   |   | 5,711 |   |

----

|                                       |   | December 31, |    |
|--------------------------------------------|--------|--------------|---------|
|                                       |   | 2010         |    |   | 2009 |   |
| Assets                                     |   |         |    |   |   |   |
| Cash                                       |   | $            | 31,382  |   |   | $ | 29,656 |   |
| Investment in Subsidiaries                 |   |         | 570,865 |   |   |   | 542,576 |   |
| Goodwill                                   |   |         | 448     |   |   |   | 448 |   |
| Other Assets                               |   |         | 8,968   |   |   |   | 17,307 |   |
| Total Assets                               |   | $            | 611,663 |   |   | $ | 589,987 |   |
| Liabilities                                |   |         |    |   |   |   |   |   |
| Borrowings                                 |   | $            | 147,188 |   |   | $ | 115,826 |   |
| Other Liabilities                          |   |         | 10,067  |   |   |   | 10,376 |   |
| Total Liabilities                          |   |         | 157,255 |   |   |   | 126,202 |   |
| Stockholders' Equity                       |   |         | 454,408 |   |   |   | 463,785 |   |
| Total Liabilities and Stockholders' Equity |   | $            | 611,663 |   |   | $ | 589,987 |   |

|                                                                                       |   | December 31, |    |
|--------------------------------------------------------------------------------------------|--------|--------------|---------|
|                                                                                       |   | 2010         |    |   | 2009 |   |   | 2008 |   |
| Income                                                                                     |   |         |    |   |   |   |   |   |   |
| Dividends from Subsidiaries                                                                |   | $            | 3,256   |   |   | $ | 14,224 |   |   | $ | 24,528 |   |
| Administrative Services Fees from Subsidiaries                                             |   |         | 28,489  |   |   |   | 22,153 |   |   |   | 18,252 |   |
| Other Income                                                                               |   |         | 190     |   |   |   | 1,656 |   |   |   | 3,316 |   |
| Total Income                                                                               |   |         | 31,935  |   |   |   | 38,033 |   |   |   | 46,096 |   |
| Expenses                                                                                   |   |         |    |   |   |   |   |   |   |   |   |   |
| Amortization of Fair Value Adjustments                                                     |   |         |    |   |   |   |   |   |   |   |   |   |
| Interest Expense                                                                           |   |         | 6,816   |   |   |   | 5,772 |   |   |   | 6,870 |   |
| Salaries and Employee Benefits                                                             |   |         | 25,884  |   |   |   | 22,259 |   |   |   | 18,325 |   |
| Net Occupancy Expenses                                                                     |   |         | 1,907   |   |   |   | 1,742 |   |   |   | 1,286 |   |
| Equipment Expenses                                                                         |   |         | 4,306   |   |   |   | 4,112 |   |   |   | 3,895 |   |
| Telephone Expenses                                                                         |   |         | 918     |   |   |   | 1,078 |   |   |   | 910 |   |
| Postage and Courier Expenses                                                               |   |         | 1,786   |   |   |   | 1,653 |   |   |   | 1,807 |   |
| Other Expenses                                                                             |   |         | 5,382   |   |   |   | 5,901 |   |   |   | 3,656 |   |
| Total Expenses                                                                             |   |         | 46,999  |   |   |   | 42,517 |   |   |   | 36,749 |   |
|                                                                                       |   |         |    |   |   |   |   |   |   |   |   |   |
| Income (Loss) Before Income Tax Benefit and Equity in Undistributed Income of Subsidiaries |   |         | (15,064 | ) |   |   | (4,484 | ) |   |   | 9,347 |   |
| Income Tax Benefit                                                                         |   |         | 5,970   |   |   |   | 4,948 |   |   |   | 5,436 |   |
| Income (Loss) Before Equity in Undistributed Income of Subsidiaries                        |   |         | (9,094  | ) |   |   | 464 |   |   |   | 14,783 |   |
| Equity in Undistributed (Distributions in Excess of) Income of Subsidiaries                |   |         | 16,003  |   |   |   | (41,227 | ) |   |   | 5,855 |   |
| Net Income (Loss)                                                                          |   |         | 6,909   |   |   |   | (40,763 | ) |   |   | 20,638 |   |
| Gain on Exchange of Preferred Stock                                                        |   |         | 10,052  |   |   |   |   |   |   |   |   |   |
| Preferred stock dividends and discount accretion                                           |   |         | (5,239  | ) |   |   | (4,979 | ) |   |   |   |   |
| Net Income (Loss) available to Common Stockholders                                         |   | $            | 11,722  |   |   | $ | (45,742 | ) |   | $ | 20,638 |   |

----

|                                                                        |   | Year Ended December 31, |    |
|-----------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                        |   | 2010                    |    |   | 2009 |   |   | 2008 |   |
| Operating Activities:                                                       |   |                    |    |   |   |   |   |   |   |
| Net Income                                                                  |   | $                       | 6,909   |   |   | $ | (40,763 | ) |   | $ | 20,638 |   |
| Adjustments to Reconcile Net Income to Net Cash                             |   |                    |    |   |   |   |   |   |   |   |   |   |
| Provided by Operating Activities                                            |   |                    |    |   |   |   |   |   |   |   |   |   |
| Amortization                                                                |   |                    |    |   |   |   |   |   |   |   |   |   |
| Share-based Compensation                                                    |   |                    | 1,750   |   |   |   | 2,294 |   |   |   | 1,898 |   |
| Tax Benefit from Share Based Compensation                                   |   |                    | 50      |   |   |   | (60 | ) |   |   | (156 | ) |
| Distributions in Excess of (Equity in Undistributed) Income of Subsidiaries |   |                    | (16,003 | ) |   |   | 41,227 |   |   |   | (5,855 | ) |
| Net Change in:                                                              |   |                    |    |   |   |   |   |   |   |   |   |   |
| Other Assets                                                                |   |                    | 3,309   |   |   |   | (2,315 | ) |   |   | (2,307 | ) |
| Other Liabilities                                                           |   |                    | (744    | ) |   |   | (19,866 | ) |   |   | (539 | ) |
| Investment in Subsidiaries - Operating Activities                           |   |                    | (20     | ) |   |   | 4,809 |   |   |   | (7,510 | ) |
| Net Cash Provided by Operating Activities                                   |   |                    | (4,749  | ) |   |   | (14,674 | ) |   |   | 6,169 |   |
| Investing Activities - Investment in Subsidiaries                           |   |                    | (12,500 | ) |   |   | (58,000 | ) |   |   | 388 |   |
| Net Cash Provided (Used) by Investing Activities                            |   |                    | (12,500 | ) |   |   | (58,000 | ) |   |   | 388 |   |
| Financing Activities:                                                       |   |                    |    |   |   |   |   |   |   |   |   |   |
| Cash Dividends                                                              |   |                    | (5,920  | ) |   |   | (14,254 | ) |   |   | (16,775 | ) |
| Borrowings                                                                  |   |                    |    |   |   |   |   |   |   |   | 45,000 |   |
| Repayment of Borrowings                                                     |   |                    |    |   |   |   | (20,000 | ) |   |   | (25,000 | ) |
| Preferred stock issued under Capital Purchase Program                       |   |                    |    |   |   |   | 116,000 |   |   |   |   |   |
| Common Stock Issued                                                         |   |                    | 24,150  |   |   |   |   |   |   |   |   |   |
| Stock Issued Under Employee Benefit Plans                                   |   |                    | 582     |   |   |   | 825 |   |   |   | 773 |   |
| Stock Issued Under Dividend Reinvestment and Stock Purchase Plan            |   |                    | 91      |   |   |   | 527 |   |   |   | 1,021 |   |
| Stock Options Exercised                                                     |   |                    |    |   |   |   |   |   |   |   | 1,633 |   |
| Tax Benefit from Share Based Compensation                                   |   |                    | (50     | )  |   |   | 60 |   |   |   | 156 |   |
| Stock Redeemed                                                              |   |                    | (76     | ) |   |   | (193 | ) |   |   | (2,188 | ) |
| Other                                                                       |   |                    | 198     |   |   |   |   |   |   |   | (4 | ) |
| Net Cash used by Financing Activities                                       |   |                    | 18,975  |   |   |   | 82,965 |   |   |   | 4,616 |   |
| Net Change in Cash                                                          |   |                    | 1,726   |   |   |   | 10,291 |   |   |   | 11,173 |   |
| Cash, Beginning of the Year                                                 |   |                    | 29,656  |   |   |   | 19,365 |   |   |   | 8,192 |   |
| Cash, End of Year                                                           |   | $                       | 31,382  |   |   | $ | 29,656 |   |   | $ | 19,365 |   |

| Quarter Ended |   | Interest Income |    |   | Interest Expense |    |   | Net Interest Income |   |   | Provision for Loan Losses |   |   | Net Realized and Unrealized Gains(Losses) on Available for Sale Securities |    |   | Gain on Exchange of Preferred Stock for Trust Preferred Debt |   |   | Preferred Stock Dividends and Discount Accretion |   |   | Net Income (Loss) Available to Common Stockholders |   |   | Average Shares Outstanding |   |   | Net Income Per Share |   |
|---------------|--------|-----------------|---------|--------|------------------|---------|--------|---------------------|--------|--------|---------------------------|--------|--------|----------------------------------------------------------------------------|---------|--------|--------------------------------------------------------------|--------|--------|--------------------------------------------------|--------|--------|----------------------------------------------------|--------|--------|----------------------------|--------|--------|----------------------|--------|
| Basic         |   | Diluted         | Basic   |   |             | Diluted |
| 2010:         |   |            |    |   |             |    |   |                |   |   |                      |   |   |                                                                       |    |   |                                                         |   |   |                                             |   |   |                                               |   |   |                       |   |   |                 |   |   |   |   |   |   |
| March         |   | $               | 51,699  |   |             | $       | 15,484 |                |   | $      | 36,215                    |   |   | $                                                                          | 13,869  |   |                                                         | $      | 1,354  |                                             |   |   |                                               |   | $      | 1,450                      |   |   | $                    | 136    |   |   |   | 21,373,405 |   |   | 21,462,175 |   |   | $ | 0.01 |   |   | $ | 0.01 |   |
| June          |   |            | 50,491  |   |             |    | 14,312 |                |   |   | 36,179                    |   |   |                                                                       | 15,015  |   |                                                         |   | (143   | )                                                |   | $      | 10,052                                             |   |   |                       | 1,443  |   |                 |   | 8,266 |   |   |   | 25,523,145 |   |   | 25,633,452 |   |   | $ | 0.35 |   |   | $ | 0.35 |   |
| September     |   |            | 49,431  |   |             |    | 13,749 |                |   |   | 35,682                    |   |   |                                                                       | 10,521  |   |                                                         |   | (654   | )                                                |   |   |                                               |   |   |                       | 870    |   |                 |   | 765 |   |   |   | 25,550,222 |   |   | 25,685,538 |   |   | $ | 0.02 |   |   | $ | 0.02 |   |
| December      |   |            | 47,957  |   |             |    | 12,464 |                |   |   | 35,493                    |   |   |                                                                       | 7,078   |   |                                                         |   | 1,305  |                                             |   |   |                                               |   |   |                       | 1,476  |   |                 |   | 2,555 |   |   |   | 25,571,893 |   |   | 25,737,352 |   |   | $ | 0.10 |   |   | $ | 0.10 |   |
|          |   | $               | 199,578 |   |             | $       | 56,009 |                |   | $      | 143,569                   |   |   | $                                                                          | 46,483  |   |                                                         | $      | 1,862  |                                             |   | $      | 10,052                                             |   |   | $                          | 5,239  |   |                 | $      | 11,722 |   |   |   | 24,519,033 |   |   | 24,642,425 |   |   | $ | 0.48 |   |   | $ | 0.48 |   |
|          |   |            |    |   |             |    |   |                |   |   |                      |   |   |                                                                       |    |   |                                                         |   |   |                                             |   |   |                                               |   |   |                       |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2009:         |   |            |    |   |             |    |   |                |   |   |                      |   |   |                                                                       |    |   |                                                         |   |   |                                             |   |   |                                               |   |   |                       |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| March         |   | $               | 60,127  |   |             | $       | 21,628 |                |   | $      | 38,499                    |   |   | $                                                                          | 12,921  |   |                                                         | $      | 2,314  |                                             |   |   |                                               |   |   | $                          | 628    |   |                 | $      | 3,489 |   |   |   | 21,022,505 |   |   | 21,093,367 |   |   | $ | 0.17 |   |   | $ | 0.17 |   |
| June          |   |            | 59,070  |   |             |    | 20,636 |                |   |   | 38,434                    |   |   |                                                                       | 58,995  |   |                                                         |   | (891   | )                                                |   |   |                                               |   |   |                       | 1,450  |   |                 |   | (31,179 | ) |   |   | 21,060,219 |   |   | 21,060,219 |   |   | $ | (1.49 | ) |   | $ | (1.49 | ) |
| September     |   |            | 57,173  |   |             |    | 18,325 |                |   |   | 38,848                    |   |   |                                                                       | 24,240  |   |                                                         |   | 3,984  |                                             |   |   |                                               |   |   |                       | 1,450  |   |                 |   | (6,380 | ) |   |   | 21,169,618 |   |   | 21,169,618 |   |   | $ | (0.30 | ) |   | $ | (0.30 | ) |
| December      |   |            | 54,069  |   |             |    | 16,504 |                |   |   | 37,565                    |   |   |                                                                       | 26,020  |   |                                                         |   | (995   | )                                                |   |   |                                               |   |   |                       | 1,451  |   |                 |   | (11,672 | ) |   |   | 21,211,463 |   |   | 21,211,463 |   |   | $ | (0.55 | ) |   | $ | (0.55 | ) |
|          |   | $               | 230,439 |   |             | $       | 77,093 |                |   | $      | 153,346                   |   |   | $                                                                          | 122,176 |   |                                                         | $      | 4,412  |                                             |   |   |                                               |   |   | $                          | 4,979  |   |                 | $      | (45,742 | ) |   |   | 21,116,616 |   |   | 21,116,616 |   |   | $ | (2.17 | ) |   | $ | (2.17 | ) |

----

|                                               | Asset Derivatives      |   | Liability Derivatives |   |
|----------------------------------------------------|------------------------|--------|-----------------------|--------|
|                                               | December 31, 2010      |   | December 31, 2009     |   | December 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 designated as hedging instruments:     |                   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate contracts                            | Other Assets           |   | $                     | 1,393  |   | Other Assets |   | $ | - |   | Other Liabilities |   | $ | - |   | Other Liabilities |   | $ | - |   |
|                                               |                   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives not designated as hedging instruments: |                   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate contracts                            | Other Assets           |   | $                     | 3,718  |   | Other Assets |   | $ | 2,624 |   | Other Liabilities |   | $ | 3,876 |   | Other Liabilities |   | $ | (2,648 | ) |

----

| Derivatives in Cash Flow Hedging Relationships | Location of Gain (Loss) Recognized in Income on Derivative |   | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) for the twelve months ended December 31, 2010 |   |   | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) for the twelve months ended December 31, 2009 |   |
|------------------------------------------------|------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|--------|
| Interest Rate Products                         | Interest Income                                            |   | $                                                                                                                                     | -      |   |                                                                                                                                  | $      | 954 |   |
|                                           | Other Income                                               |   |                                                                                                                                  | 442    |   |                                                                                                                                  |   | 481 |   |
|                                           |                                                       |   | $                                                                                                                                     | 442    |   |                                                                                                                                  | $      | 1,435 |   |

| Derivatives Not Designated as Hedging Instruments under FASB ASC 815-10 | Location of Gain (Loss) Recognized in Income on Derivative |   | Amount of Gain (Loss) Recognized in Income on Derivative for the twelve months ended December 31, 2010 |   |   | Amount of Gain (Loss) Recognized in Income on Derivative for the twelve months ended December 31, 2009 |   |
|-------------------------------------------------------------------------|------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------------|--------|
| Interest Rate Contracts                                                 | Other income                                               |   | $                                                                                                      | (134   | )      |                                                                                                   | $      | 106 |   |

----

----

ITEM 9.   CHANGES 

 9A.  CONTROLS 

----

ITEM 9B

----

10. DIRECTORS 

ITEM 11. 

ITEM 12

ITEM 13

ITEM 14

----

ITEM 15

| 3.1  | First Merchants Corporation Articles of Incorporation, as amended (Incorporated by reference to registrant’s Form 10-K/A filed on March 31, 2009)                                                                         |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2  | Bylaws of First Merchants Corporation dated October 28, 2009 (Incorporated by reference to registrant’s Form 10-Q filed on November 9, 2009)                                                                              |
| 4.1  | First Merchants Corporation Amended and Restated Declaration of Trust of First Merchants Capital Trust II dated as of July 2, 2007 (Incorporated by reference to registrant's Form 8-K filed on July 3, 2007)                   |
| 4.2  | Indenture dated as of July 2, 2007 (Incorporated by reference to registrant's Form 8-K filed on July 3, 2007)                                                                                                                   |
| 4.3  | Guarantee Agreement dated as of July 2, 2007 (Incorporated by reference to registrant's Form 8-K filed on July 3, 2007)                                                                                                         |
| 4.4  | Form of Capital Securities Certification of First Merchants Capital Trust II (Incorporated by reference to registrant's Form 8-K filed on July 3, 2007)                                                                         |
| 4.5  | Form of Certificate for the First Merchants Corporation Fixed Rate Cumulative Perpetual Preferred Stock, Series A dated February 20, 2009 (Incorporated by reference to registrant’s Form 8-K filed on February 23, 2009) |
| 4.6  | Warrant to Purchase Common Stock of First Merchants Corporation dated February 20, 2009 (Incorporated by reference to registrant’s Form 8-K filed on February 23, 2009)                                                   |
| 4.7  | First Merchants Corporation Dividend Reinvestment and Stock Purchase Plan (Incorporated by reference to registrant’s Post-Effective Amendment No. 1 to Form S-3 filed on August 21, 2009)                                 |
| 4.8  | Amended and Restated Declaration of Trust, dated as of June 30, 2010 (Incorporated by reference to registrant’s Form 8-K filed on July 2, 2010)                                                                           |
| 4.9  | Indenture, dated as of June 30, 2010 (Incorporated by reference to registrant’s Form 8-K filed on July 2, 2010)                                                                                                           |
| 4.10 | First Supplemental Indenture, dated as of June 30, 2010 (Incorporated by reference to registrant’s Form 8-K filed on July 2, 2010)                                                                                        |
| 4.11 | Guarantee Agreement, dated as of June 30, 2010 (Incorporated by reference to registrant’s Form 8-K filed on July 2, 2010)                                                                                                 |
| 4.12 | Form of Capital Securities Certificate of First Merchants Capital Trust III (Incorporated by reference to registrant’s Form 8-K filed on July 2, 2010)                                                                    |
| 10.1 | First Merchants Corporation Senior Management Incentive Compensation Program, dated February 11, 2011 (1) (2)                                                                                                                   |
| 10.2 | First Merchants Corporation Equity Compensation Plan for Non-Employee Directors, effective April 29, 2008 (Incorporated by reference to the registrant's Form 10-Q filed on August 11, 2008) (1)                                |
| 10.3 | First Merchants Corporation Change of Control Agreement, as amended, with Mark K. Hardwick dated February 14, 2006 (Incorporated by reference to registrant's Form 8-K filed on March 9, 2006) (1)                              |
| 10.4 | First Merchants Corporation Change of Control Agreement with Michael C. Rechin dated December 13, 2005 (Incorporated by reference to registrant's Form 8-K filed on December 19, 2005) (1)                                      |
| 10.5 | First Merchants Corporation Change of Control Agreement with Robert R. Connors dated August 26, 2002 as amended on January 1, 2008 (Incorporated by reference to registrant's Form 8-K filed on January 3, 2008) (1)            |

----

| 10.6   | First Merchants Corporation Change of Control Agreement with Kimberly J. Ellington dated January 1, 2005 as amended on January 1, 2008 (Incorporated by reference to registrant's Form 8-K filed on January 3, 2008) (1)                                                                               |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.7   | First Merchants Corporation Change of Control Agreement with Jami L. Bradshaw dated October 23, 2007 (Incorporated by reference to registrant's Form 8-K filed on October 29, 2007) (1)                                                                                                                |
| 10.8   | First Merchants Corporation Change of Control Agreement with Jeffrey B. Lorentson dated October 23, 2007 (Incorporated by reference to registrant's Form 8-K filed on October 29, 2007) (1)                                                                                                            |
| 10.9   | First Merchants Corporation Change of Control Agreement with Michael J. Stewart dated April 28, 2008 (Incorporated by reference to registrant's Form 8-K filed on May 5, 2008.) (1)                                                                                                                    |
| 10.10  | First Merchants Corporation Change of Control Agreement with John J. Martin dated July 28, 2009 (Incorporated by reference to registrant’s form 8-K filed on August 3, 2009) (1)                                                                                                                 |
| 10.11  | Resolution of the Board of Directors of First Merchants Corporation on director compensation dated December 4, 2007 (Incorporated by reference to the registrant's Form 10-K for year ended December 31, 2007) (1)                                                                                     |
| 10.12  | First Merchants Corporation Supplemental Executive Retirement Plan and amendments thereto (Incorporated by reference to registrant's Form 10-K for year ended December 31, 1997) (1)                                                                                                                   |
| 10.13  | First Merchants Corporation 2009 Long-Term Equity Incentive Plan effective May 6, 2009 (Incorporated by reference to registrant's form 8-K filed on May 11, 2009) (1)                                                                                                                                  |
| 10.14  | First Merchants Corporation Defined Contribution Supplemental Retirement Plan dated January 1, 2006 (Incorporated by reference to registrant's Form 8-K filed on February 6, 2007) (1)                                                                                                                 |
| 10.15  | First Merchants Corporation Participation Agreement of Michael C. Rechin dated January 26, 2007 (Incorporated by reference to registrant's Form 8-K filed on February 6, 2007) (1)                                                                                                                |
| 10.16  | First Merchants Corporation 2009 Employee Stock Purchase Plan effective July 1, 2009 (Incorporated by reference to registrant's Form 8-K filed on May 11, 2009) (1)                                                                                                                                    |
| 10.17  | Letter Agreement dated February 20, 2009, between First Merchants Corporation and the United States Department of the Treasury, which includes the Securities Purchase Agreement-Standard Terms attached thereto (Incorporated by reference to registrant’s Form 8-K filed on February 23, 2009) |
| 10.18  | Form of Senior Executive Officer Letter Agreement dated February 20, 2009 (Incorporated by reference to registrant’s Form 8-K filed on February 23, 2009)                                                                                                                                        |
| 10.19  | Form of Waiver dated February 20, 2009 (Incorporated by reference to registrant’s Form 8-K filed on February 23, 2009)                                                                                                                                                                           |
| 10.20  | ARRA Letter Agreement dated February 20, 2009, between First Merchants Corporation and the United States Department of the Treasury (Incorporated by reference to registrant’s Form 8-K filed on February 23, 2009)                                                                              |
| 10.21  | 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                                                                             |
| 10.22  | Exchange Agreement, dated as of June 30, 2010 (Incorporated by reference to registrant’s Form 8-K filed on July 2, 2010)                                                                                                                                                                         |
| 21     | Subsidiaries of Registrant (2)                                                                                                                                                                                                                                                                         |
| 23     | Consent of Independent Registered Public Accounting Firm (2)                                                                                                                                                                                                                                           |
| 24     | Limited Power of Attorney (2)                                                                                                                                                                                                                                                                          |
| 31.1   | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002 (2)                                                                                                                                                                                               |
| 31.2   | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002 (2)                                                                                                                                                                                               |
| 32     | Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (2)                                                                                                                                                                            |
| 99.1   | Financial statements and independent registered public accounting firm's report for First Merchants Corporation 2009 Employee Stock Purchase Plan (2004) (2)                                                                                                                                           |
| 99.2   | Certification of Principal Executive Officer and Principal Financial Officer required under §111(b)(4) of the EESA                                                                                                                                                                                |
|   | (1) Management contract or compensatory plan.                                                                                                                                                                                                                                                          |
|   | (2) Filed herewith                                                                                                                                                                                                                                                                                     |

----

| /s/ Michael C. Rechin            | /s/ Mark K. Hardwick              |
|----------------------------------|-----------------------------------|
| Michael C. Rechin, President and | Mark K. Hardwick, Executive Vice  |
|                             |                              | Chief Executive | President and Chief |
|                             |                              | Officer (Principal | Financial Officer |
|                             |                              | Executive Officer) | (Principal Financial |
|                             |                              |   | and Accounting Officer) |
|                             |                              |
| __________________               | /s/ Michael C. Rechin             |
|                             | Thomas B. Clark, Director         | Michael C. Rechin, Director |
|                             |                              |
| /s/ Jerry R. Engle*              | /s/ Charles E. Schalliol*         |
|                             | Jerry R. Engle, Director          | Charles E. Schalliol, Director |
|                             |                              |
| /s/ Roderick English*            | /s/ Patrick A. Sherman*           |
|                             | Roderick English, Director        | Patrick A. Sherman, Director |
|                             |                              |
| /s/ Dr. Jo Ann Gora*             | __________________                |
|                             | Dr. Jo Ann M. Gora, Director | Terry L. Walker, Director |
|                             |                              |
| /s/ William L. Hoy*              | /s/ Jean L. Wojtowicz*            |
|                             | William L. Hoy, Director          | Jean L. Wojtowicz, Director |
|                             |                              |
| /s/ Barry J. Hudson*             |                              |
|                             | Barry J. Hudson, Director         |   |

| * | By Mark K. Hardwick as Attorney-in Fact pursuant to a Limited Power of Attorney executed by the directors listed above, which Power of Attorney is being filed with the Securities and Exchange Commission as an exhibit hereto. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 3.1  | First Merchants Corporation Articles of Incorporation, as amended (Incorporated by reference to registrant’s Form 10-K/A filed on March 31, 2009)                                                                         |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2  | Bylaws of First Merchants Corporation dated October 28, 2009 (Incorporated by reference to registrant’s Form 10-Q filed on November 9, 2009)                                                                              |
| 4.1  | First Merchants Corporation Amended and Restated Declaration of Trust of First Merchants Capital Trust II dated as of July 2, 2007 (Incorporated by reference to registrant's Form 8-K filed on July 3, 2007)                   |
| 4.2  | Indenture dated as of July 2, 2007 (Incorporated by reference to registrant's Form 8-K filed on July 3, 2007)                                                                                                                   |
| 4.3  | Guarantee Agreement dated as of July 2, 2007 (Incorporated by reference to registrant's Form 8-K filed on July 3, 2007)                                                                                                         |
| 4.4  | Form of Capital Securities Certification of First Merchants Capital Trust II (Incorporated by reference to registrant's Form 8-K filed on July 3, 2007)                                                                         |
| 4.5  | Form of Certificate for the First Merchants Corporation Fixed Rate Cumulative Perpetual Preferred Stock, Series A dated February 20, 2009 (Incorporated by reference to registrant’s Form 8-K filed on February 23, 2009) |
| 4.6  | Warrant to Purchase Common Stock of First Merchants Corporation dated February 20, 2009 (Incorporated by reference to registrant’s Form 8-K filed on February 23, 2009)                                                   |
| 4.7  | First Merchants Corporation Dividend Reinvestment and Stock Purchase Plan (Incorporated by reference to registrant’s Post-Effective Amendment No. 1 to Form S-3 filed on August 21, 2009)                                 |
| 4.8  | Amended and Restated Declaration of Trust, dated as of June 30, 2010 (Incorporated by reference to registrant’s Form 8-K filed on July 2, 2010)                                                                           |
| 4.9  | Indenture, dated as of June 30, 2010 (Incorporated by reference to registrant’s Form 8-K filed on July 2, 2010)                                                                                                           |
| 4.10 | First Supplemental Indenture, dated as of June 30, 2010 (Incorporated by reference to registrant’s Form 8-K filed on July 2, 2010)                                                                                        |
| 4.11 | Guarantee Agreement, dated as of June 30, 2010 (Incorporated by reference to registrant’s Form 8-K filed on July 2, 2010)                                                                                                 |
| 4.12 | Form of Capital Securities Certificate of First Merchants Capital Trust III (Incorporated by reference to registrant’s Form 8-K filed on July 2, 2010)                                                                    |
| 10.1 | First Merchants Corporation Senior Management Incentive Compensation Program, dated February 11, 2011 (1) (2)                                                                                                                   |
| 10.2 | First Merchants Corporation Equity Compensation Plan for Non-Employee Directors, effective April 29, 2008 (Incorporated by reference to the registrant's Form 10-Q filed on August 11, 2008) (1)                                |
| 10.3 | First Merchants Corporation Change of Control Agreement, as amended, with Mark K. Hardwick dated February 14, 2006 (Incorporated by reference to registrant's Form 8-K filed on March 9, 2006) (1)                              |
| 10.4 | First Merchants Corporation Change of Control Agreement with Michael C. Rechin dated December 13, 2005 (Incorporated by reference to registrant's Form 8-K filed on December 19, 2005) (1)                                      |
| 10.5 | First Merchants Corporation Change of Control Agreement with Robert R. Connors dated August 26, 2002 as amended on January 1, 2008 (Incorporated by reference to registrant's Form 8-K filed on January 3, 2008) (1)            |

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| 10.6   | First Merchants Corporation Change of Control Agreement with Kimberly J. Ellington dated January 1, 2005 as amended on January 1, 2008 (Incorporated by reference to registrant's Form 8-K filed on January 3, 2008) (1)                                                                               |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.7   | First Merchants Corporation Change of Control Agreement with Jami L. Bradshaw dated October 23, 2007 (Incorporated by reference to registrant's Form 8-K filed on October 29, 2007) (1)                                                                                                                |
| 10.8   | First Merchants Corporation Change of Control Agreement with Jeffrey B. Lorentson dated October 23, 2007 (Incorporated by reference to registrant's Form 8-K filed on October 29, 2007) (1)                                                                                                            |
| 10.9   | First Merchants Corporation Change of Control Agreement with Michael J. Stewart dated April 28, 2008 (Incorporated by reference to registrant's Form 8-K filed on May 5, 2008.) (1)                                                                                                                    |
| 10.10  | First Merchants Corporation Change of Control Agreement with John J. Martin dated July 28, 2009 (Incorporated by reference to registrant’s form 8-K filed on August 3, 2009) (1)                                                                                                                 |
| 10.11  | Resolution of the Board of Directors of First Merchants Corporation on director compensation dated December 4, 2007 (Incorporated by reference to the registrant's Form 10-K for year ended December 31, 2007) (1)                                                                                     |
| 10.12  | First Merchants Corporation Supplemental Executive Retirement Plan and amendments thereto (Incorporated by reference to registrant's Form 10-K for year ended December 31, 1997) (1)                                                                                                                   |
| 10.13  | First Merchants Corporation 2009 Long-Term Equity Incentive Plan effective May 6, 2009 (Incorporated by reference to registrant's form 8-K filed on May 11, 2009) (1)                                                                                                                                  |
| 10.14  | First Merchants Corporation Defined Contribution Supplemental Retirement Plan dated January 1, 2006 (Incorporated by reference to registrant's Form 8-K filed on February 6, 2007) (1)                                                                                                                 |
| 10.15  | First Merchants Corporation Participation Agreement of Michael C. Rechin dated January 26, 2007 (Incorporated by reference to registrant's Form 8-K filed on February 6, 2007) (1)                                                                                                                |
| 10.16  | First Merchants Corporation 2009 Employee Stock Purchase Plan effective July 1, 2009 (Incorporated by reference to registrant's Form 8-K filed on May 11, 2009) (1)                                                                                                                                    |
| 10.17  | Letter Agreement dated February 20, 2009, between First Merchants Corporation and the United States Department of the Treasury, which includes the Securities Purchase Agreement-Standard Terms attached thereto (Incorporated by reference to registrant’s Form 8-K filed on February 23, 2009) |
| 10.18  | Form of Senior Executive Officer Letter Agreement dated February 20, 2009 (Incorporated by reference to registrant’s Form 8-K filed on February 23, 2009)                                                                                                                                        |
| 10.19  | Form of Waiver dated February 20, 2009 (Incorporated by reference to registrant’s Form 8-K filed on February 23, 2009)                                                                                                                                                                           |
| 10.20  | ARRA Letter Agreement dated February 20, 2009, between First Merchants Corporation and the United States Department of the Treasury (Incorporated by reference to registrant’s Form 8-K filed on February 23, 2009)                                                                              |
| 10.21  | 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                                                                             |
| 10.22  | Exchange Agreement, dated as of June 30, 2010 (Incorporated by reference to registrant’s Form 8-K filed on July 2, 2010)                                                                                                                                                                         |
| 21     | Subsidiaries of Registrant (2)                                                                                                                                                                                                                                                                         |
| 23     | Consent of Independent Registered Public Accounting Firm (2)                                                                                                                                                                                                                                           |
| 24     | Limited Power of Attorney (2)                                                                                                                                                                                                                                                                          |
| 31.1   | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002 (2)                                                                                                                                                                                               |
| 31.2   | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002 (2)                                                                                                                                                                                               |
| 32     | Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (2)                                                                                                                                                                            |
| 99.1   | Financial statements and independent registered public accounting firm's report for First Merchants Corporation 2009 Employee Stock Purchase Plan (2004) (2)                                                                                                                                           |
| 99.2   | Certification of Principal Executive Officer and Principal Financial Officer required under §111(b)(4) of the EESA                                                                                                                                                                                |
|   | (1) Management contract or compensatory plan.                                                                                                                                                                                                                                                          |
|   | (2) Filed herewith                                                                                                                                                                                                                                                                                     |

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| 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; |
|--------|----|-----------------------------------|

| A.   | The FMC CEO and EVP earnings component payouts will be determined by 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. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                  | A                                                           | B                                                | C                                                                                                                                                                                                                                                                          | D                                                                                                                                                                                                                                                                          | E                                                                                                                                                                                                                                                                          |
|-----------------------|-------------------------------------------------------------|--------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Target %:             | 45%                                                         | 40%                                              | 25% - 30%                                                                                                                                                                                                                                                                  | 15% - 20%                                                                                                                                                                                                                                                                  |  10%- 15%                                                                                                                                                                                                                                                        |
| Participants:         | FMC CEO                                                     | FMC EVP                                          |  · Executive Officers · Non-Bank Presidents  · Regional Presidents                                                                                                                                                       |  · Selected Senior Leadership                                                                                                                                                                                                                          |  · Department Heads  · Division Heads  · Other Management Leadership                                                                                                                                                |
| Incentive Components: | Operating  EPS at 100% (calculated on GAAP basis) | Operating EPS at 100% (calculated on GAAP basis) | Non-Bank participants:EPS at 80%; Consolidated Efficiency Ratio at 20% Bank Participants:Balanced Scorecard Trust & Insurance participants:Change in Agency/Trust Operating Revenue at 30%; EPS at 40% Pre-tax Net Income Growth Ratio at 30% | Non-Bank participants:EPS at 80%; Consolidated Efficiency Ratio at 20% Bank Participants:Balanced Scorecard Trust & Insurance participants:Change in Agency/Trust Operating Revenue at 30%; EPS at 40% Pre-tax Net Income Growth Ratio at 30% | Non-Bank participants:EPS at 80%; Consolidated Efficiency Ratio at 20% Bank Participants:Balanced Scorecard Trust & Insurance participants:Change in Agency/Trust Operating Revenue at 30%; EPS at 40% Pre-tax Net Income Growth Ratio at 30% |

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

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

|   | $ Actual  | Payout % |
|--------|-----------|----------|
|   | <$0.34 | 0%       |
|   | 0.34      | 30%      |
|   | 0.39      | 40%      |
|   | 0.44      | 50%      |
|   | 0.49      | 60%      |
|   | 0.54      | 70%      |
|   | 0.59      | 80%      |
|   | 0.64      | 90%      |
| Target | 0.69      | 100%     |
|   | 0.74      | 110%     |
|   | 0.79      | 120%     |
|   | 0.84      | 130%     |
|   | 0.89      | 140%     |
|   | 0.94      | 150%     |
|   | 0.99      | 160%     |
|   | 1.04      | 170%     |
|   | 1.09      | 180%     |
|   | 1.14      | 190%     |
|   | 1.19      | 200%     |

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| 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%     |

| *  | Operating earnings adds back charges for amortization of goodwill and other non-operating expenses and excludes unplanned extraordinary income or expenses, all as determined by the Committee.  Operating earnings will also be normalized for subsidiary acquisitions. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Name                                       | Jurisdiction of Incorporation           |
|--------------------------------------------|-----------------------------------------|
| First Merchants Bank, National Association | U.S.                                    |
| First Merchants Capital Trust II           | Delaware                                |
| First Merchants Capital Trust III          | Delaware                                |
| First Merchants Capital Trust IV           | Delaware                                |
| First Merchants Capital Trust V            | Delaware                                |
| First Merchants Insurance Services, Inc.   | Indiana                                 |
| First Merchants Reinsurance Co. Ltd.       | Providencials Turkes and Caicos, Island |
| FMB Portfolio Management, Inc.             | Delaware                                |
| CNBC Statutory Trust I                     | Connecticut                             |
| GS Asset Management, LLC                   | Indiana                                 |
| TC Realty Associates, LLC                  | Indiana                                 |

----

----

| /s/ Michael C. Rechin            | /s/ Mark K. Hardwick              |
|----------------------------------|-----------------------------------|
| Michael C. Rechin, President and | Mark K. Hardwick, Executive Vice  |
|                             |                              | Chief Executive | President and Chief |
|                             |                              | Officer (Principal | Financial Officer |
|                             |                              | Executive Officer) | (Principal Financial |
|                             |                              |   | and Accounting Officer) |
|                             |                              |
| _______________                  | /s/ Michael C. Rechin             |
|                             | Thomas B. Clark, Director         | Michael C. Rechin, Director |
|                             |                              |
| /s/ Jerry R. Engle*              | /s/ Charles E. Schalliol*         |
|                             | Jerry R. Engle, Director          | Charles E. Schalliol, Director |
|                             |                              |
| /s/ Roderick English*            | /s/ Patrick A. Sherman*           |
|                             | Roderick English, Director        | Patrick A. Sherman, Director |
|                             |                              |
| /s/ Dr. Jo Ann Gora*             | __________________                |
|                             | Dr. Jo Ann M. Gora, Director | Terry L. Walker, Director |
|                             |                              |
| /s/ William L. Hoy*              | /s/ Jean L. Wojtowicz*            |
|                             | William L. Hoy, Director          | Jean L. Wojtowicz, Director |
|                             |                              |
| /s/ Barry J. Hudson*             |                              |
|                             | Barry J. Hudson, Director         |   |

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