----

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|                           | Page No.          |
|--------------------------------|-------------------|
| PART I. Financial Information: |              |
|                           | ITEM 1.           | Financial Statements: |   |
|                           |              | Consolidated Condensed Balance Sheets | 3 |
|                           |              | Consolidated Condensed Statements of Income | 4 |
|                           |              | Consolidated Condensed Statements of Comprehensive Income | 5 |
|                           |              | Consolidated Condensed Statement of Stockholders’ Equity | 6 |
|                           |              | Consolidated Condensed Statements of Cash Flows | 7 |
|                           |              | Notes to Consolidated Condensed Financial Statements | 8 |
|                           | ITEM 2.           | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 37 |
|                           | ITEM 3.           | Quantitative and Qualitative Disclosures About Market Risk | 50 |
|                           | ITEM 4.           | Controls and Procedures | 50 |
| PART II. Other Information:    |              |
|                           | ITEM 1.           | Legal Proceedings | 51 |
|                           | ITEM 1.A.         | Risk Factors | 51 |
|                           | ITEM 2.           | Unregistered Sales of Equity Securities and Use of Proceeds | 51 |
|                           | ITEM 3.           | Defaults Upon Senior Securities | 51 |
|                           | ITEM 4.           | [RESERVED] | 51 |
|                           | ITEM 5.           | Other Information | 51 |
|                           | ITEM 6.           | Exhibits | 52 |
|                           | Signatures        | 53 |
|                           | Index to Exhibits | 54 |

----

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)

|                                                                    |   | September 30, |      |   | December 31, |   |
|-------------------------------------------------------------------------|--------|---------------|-----------|--------|--------------|--------|
|                                                                    |   | 2011          |      |   | 2010         |   |
|                                                                    |   | (Unaudited)   |      |   |         |   |
| ASSETS                                                                  |   |          |      |   |         |   |
| Cash and due from banks                                                 |   | $             | 60,166    |   |         | $      | 50,844 |   |
| Federal funds sold                                                      |   |          |      |   |         |   | 7,463 |   |
| Cash and cash equivalents                                               |   |          | 60,166    |   |         |   | 58,307 |   |
| Interest-bearing time deposits                                          |   |          | 16,115    |   |         |   | 65,216 |   |
| Investment securities available for sale                                |   |          | 496,608   |   |         |   | 539,370 |   |
| Investment securities held to maturity                                  |   |          | 441,220   |   |         |   | 287,427 |   |
| Mortgage loans held for sale                                            |   |          | 12,257    |   |         |   | 21,469 |   |
| Loans, net of allowance for loan losses of $73,074 and $82,977     |   |          | 2,639,864 |   |         |   | 2,752,706 |   |
| Premises and equipment                                                  |   |          | 51,432    |   |         |   | 52,450 |   |
| Federal Reserve and Federal Home Loan Bank stock                        |   |          | 31,381    |   |         |   | 33,884 |   |
| Interest receivable                                                     |   |          | 17,770    |   |         |   | 18,674 |   |
| Core deposit intangibles                                                |   |          | 9,705     |   |         |   | 12,662 |   |
| Goodwill                                                                |   |          | 141,357   |   |         |   | 141,357 |   |
| Cash surrender value of life insurance                                  |   |          | 123,524   |   |         |   | 96,731 |   |
| Other real estate owned                                                 |   |          | 19,425    |   |         |   | 20,927 |   |
| Tax asset, deferred and receivable                                      |   |          | 35,804    |   |         |   | 45,623 |   |
| Other assets                                                            |   |          | 21,881    |   |         |   | 24,045 |   |
| TOTAL ASSETS                                                            |   | $             | 4,118,509 |   |         | $      | 4,170,848 |   |
| LIABILITIES                                                             |   |          |      |   |         |   |   |   |
| Deposits:                                                               |   |          |      |   |         |   |   |   |
| Noninterest-bearing                                                     |   | $             | 598,139   |   |         | $      | 583,696 |   |
| Interest-bearing                                                        |   |          | 2,466,111 |   |         |   | 2,685,184 |   |
| Total Deposits                                                          |   |          | 3,064,250 |   |         |   | 3,268,880 |   |
| Borrowings:                                                             |   |          |      |   |         |   |   |   |
| Federal funds purchased                                                 |   |          | 27,946    |   |         |   |   |   |
| Securities sold under repurchase agreements                             |   |          | 117,097   |   |         |   | 109,871 |   |
| Federal Home Loan Bank advances                                         |   |          | 168,764   |   |         |   | 82,684 |   |
| Subordinated debentures, revolving credit lines and term loans          |   |          | 194,961   |   |         |   | 226,440 |   |
| Total Borrowings                                                        |   |          | 508,768   |   |         |   | 418,995 |   |
| Interest payable                                                        |   |          | 2,186     |   |         |   | 4,262 |   |
| Other liabilities                                                       |   |          | 30,760    |   |         |   | 24,303 |   |
| Total Liabilities                                                       |   |          | 3,605,964 |   |         |   | 3,716,440 |   |
| COMMITMENTS AND CONTINGENT LIABILITIES                                  |   |          |      |   |         |   |   |   |
| STOCKHOLDERS' EQUITY                                                    |   |          |      |   |         |   |   |   |
| Preferred Stock, no-par value:                                          |   |          |      |   |         |   |   |   |
| Authorized -- 500,000 shares                                            |   |          |      |   |         |   |   |   |
| Series A, Issued and outstanding - 0 and 69,600 shares                  |   |          |      |   |         |   | 67,880 |   |
| Preferred Stock, no-par value, $1,000 liquidation value:                |   |          |      |   |         |   |   |   |
| Authorized -- 500,000 shares                                            |   |          |      |   |         |   |   |   |
| Senior Non-Cumulative Perpetual Preferred Stock, Series B               |   |          |      |   |         |   |   |   |
| Issued and outstanding - 90,782.94 and 0 shares                         |   |          | 90,783    |   |         |   |   |   |
| 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 - 28,538,164 and 25,574,251 shares   |   |          | 3,567     |   |         |   | 3,197 |   |
| Additional paid-in capital                                              |   |          | 254,801   |   |         |   | 232,503 |   |
| Retained earnings                                                       |   |          | 162,669   |   |         |   | 160,860 |   |
| Accumulated other comprehensive income (loss)                           |   |          | 600       |   |         |   | (10,157 | ) |
| Total Stockholders' Equity                                              |   |          | 512,545   |   |         |   | 454,408 |   |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                              |   | $             | 4,118,509 |   |         | $      | 4,170,848 |   |

----

|                                                                  |   | Three Months Ended |    |   | Nine Months Ended |   |
|-----------------------------------------------------------------------|--------|--------------------|---------|--------|-------------------|--------|
|                                                                  |   | September 30,      |    |   | September 30,     |   |
|                                                                  |   | 2011               |    |   | 2010              |   |   | 2011 |   |   | 2010 |   |
| INTEREST INCOME                                                       |   |               |    |   |              |   |   |   |   |   |   |   |
| Loans receivable:                                                     |   |               |    |   |              |   |   |   |   |   |   |   |
| Taxable                                                               |   | $                  | 37,024  |   |              | $      | 43,148 |   |   | $ | 113,219 |   |   | $ | 132,573 |   |
| Tax exempt                                                            |   |               | 86      |   |              |   | 236 |   |   |   | 435 |   |   |   | 765 |   |
| Investment securities:                                                |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                               |   |               | 5,078   |   |              |   | 3,100 |   |   |   | 14,665 |   |   |   | 9,277 |   |
| Tax exempt                                                            |   |               | 2,529   |   |              |   | 2,610 |   |   |   | 7,617 |   |   |   | 7,804 |   |
| Federal funds sold                                                    |   |               |    |   |              |   | 3 |   |   |   | 3 |   |   |   | 23 |   |
| Deposits with financial institutions                                  |   |               | 45      |   |              |   | 84 |   |   |   | 228 |   |   |   | 239 |   |
| Federal Reserve and Federal Home Loan Bank stock                      |   |               | 323     |   |              |   | 250 |   |   |   | 1,005 |   |   |   | 940 |   |
| Total Interest Income                                                 |   |               | 45,085  |   |              |   | 49,431 |   |   |   | 137,172 |   |   |   | 151,621 |   |
| INTEREST EXPENSE                                                      |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                              |   |               | 5,046   |   |              |   | 9,434 |   |   |   | 17,776 |   |   |   | 31,449 |   |
| Federal funds purchased                                               |   |               | 16      |   |              |   | 1 |   |   |   | 22 |   |   |   | 5 |   |
| Securities sold under repurchase agreements                           |   |               | 384     |   |              |   | 401 |   |   |   | 1,148 |   |   |   | 1,329 |   |
| Federal Home Loan Bank advances                                       |   |               | 1,089   |   |              |   | 1,218 |   |   |   | 3,067 |   |   |   | 4,222 |   |
| Subordinated debentures, revolving credit lines and term loans        |   |               | 2,699   |   |              |   | 2,695 |   |   |   | 7,984 |   |   |   | 6,540 |   |
| Total Interest Expense                                                |   |               | 9,234   |   |              |   | 13,749 |   |   |   | 29,997 |   |   |   | 43,545 |   |
| NET INTEREST INCOME                                                   |   |               | 35,851  |   |              |   | 35,682 |   |   |   | 107,175 |   |   |   | 108,076 |   |
| Provision for loan losses                                             |   |               | 5,556   |   |              |   | 10,521 |   |   |   | 16,775 |   |   |   | 39,405 |   |
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                   |   |               | 30,295  |   |              |   | 25,161 |   |   |   | 90,400 |   |   |   | 68,671 |   |
| OTHER INCOME                                                          |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Service charges on deposit accounts                                   |   |               | 3,169   |   |              |   | 3,404 |   |   |   | 8,945 |   |   |   | 10,172 |   |
| Fiduciary activities                                                  |   |               | 1,881   |   |              |   | 1,773 |   |   |   | 5,846 |   |   |   | 5,811 |   |
| Other customer fees                                                   |   |               | 2,583   |   |              |   | 2,080 |   |   |   | 7,452 |   |   |   | 6,773 |   |
| Commission income                                                     |   |               | 1,528   |   |              |   | 1,482 |   |   |   | 4,440 |   |   |   | 4,958 |   |
| Earnings on cash surrender value of life insurance                    |   |               | 644     |   |              |   | 540 |   |   |   | 1,793 |   |   |   | 1,574 |   |
| Net gains and fees on sales of loans                                  |   |               | 1,768   |   |              |   | 2,088 |   |   |   | 4,671 |   |   |   | 4,422 |   |
| Net realized gains on sales of available for sale securities          |   |               | 861     |   |              |   | 2 |   |   |   | 2,149 |   |   |   | 2,101 |   |
| Other-than-temporary impairment on available for sale securities      |   |               |    |   |              |   | (1,085 | ) |   |   | (2,780 | ) |   |   | (2,849 | ) |
| Portion of loss recognized in other comprehensive income before taxes |   |               |    |   |              |   | 429 |   |   |   | 2,380 |   |   |   | 1,305 |   |
| Net impairment losses recognized in earnings                          |   |               |    |   |              |   | (656 | ) |   |   | (400 | ) |   |   | (1,544 | ) |
| Other income                                                          |   |               | 796     |   |              |   | 332 |   |   |   | 1,253 |   |   |   | 684 |   |
| Total Other Income                                                    |   |               | 13,230  |   |              |   | 11,045 |   |   |   | 36,149 |   |   |   | 34,951 |   |
| OTHER EXPENSES                                                        |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and employee benefits                                        |   |               | 19,964  |   |              |   | 18,094 |   |   |   | 55,700 |   |   |   | 53,598 |   |
| Net occupancy                                                         |   |               | 2,530   |   |              |   | 2,574 |   |   |   | 7,690 |   |   |   | 7,483 |   |
| Equipment                                                             |   |               | 1,662   |   |              |   | 1,797 |   |   |   | 5,122 |   |   |   | 5,511 |   |
| Marketing                                                             |   |               | 534     |   |              |   | 519 |   |   |   | 1,352 |   |   |   | 1,443 |   |
| Outside data processing fees                                          |   |               | 1,391   |   |              |   | 1,348 |   |   |   | 4,294 |   |   |   | 3,939 |   |
| Printing and office supplies                                          |   |               | 301     |   |              |   | 303 |   |   |   | 902 |   |   |   | 942 |   |
| Core deposit amortization                                             |   |               | 755     |   |              |   | 1,161 |   |   |   | 2,957 |   |   |   | 3,560 |   |
| FDIC assessments                                                      |   |               | 1,201   |   |              |   | 2,112 |   |   |   | 4,756 |   |   |   | 6,077 |   |
| Other real estate owned and credit-related expenses                   |   |               | 2,007   |   |              |   | 2,991 |   |   |   | 8,045 |   |   |   | 7,179 |   |
| Other expenses                                                        |   |               | 3,877   |   |              |   | 4,236 |   |   |   | 11,684 |   |   |   | 14,386 |   |
| Total Other Expenses                                                  |   |               | 34,222  |   |              |   | 35,135 |   |   |   | 102,502 |   |   |   | 104,118 |   |
| INCOME (LOSS) BEFORE INCOME TAX                                       |   |               | 9,303   |   |              |   | 1,071 |   |   |   | 24,047 |   |   |   | (496 | ) |
| Income tax expense (benefit)                                          |   |               | 2,561   |   |              |   | (564 | ) |   |   | 6,356 |   |   |   | (3,374 | ) |
| NET INCOME                                                            |   |               | 6,742   |   |              |   | 1,635 |   |   |   | 17,691 |   |   |   | 2,878 |   |
| Gain on exchange of preferred stock for trust preferred debt          |   |               |    |   |              |   |   |   |   |   |   |   |   |   | 11,353 |   |
| Loss on retirement of CPP preferred stock                             |   |               | (1,401  | )      |              |   |   |   |   |   | (1,401 | ) |   |   | (1,301 | ) |
| Loss on extinguishment of trust preferred securities                  |   |               | (10,857 | )      |              |   |   |   |   |   | (10,857 | ) |   |   |   |   |
| Preferred stock dividends and discount accretion                      |   |               | (868    | )      |              |   | (870 | ) |   |   | (2,846 | ) |   |   | (3,763 | ) |
| NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS                    |   | $                  | (6,384  | )      |              | $      | 765 |   |   | $ | 2,587 |   |   | $ | 9,167 |   |
| Per Share Data:                                                       |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Basic Net Income (Loss) Available to Common Stockholders              |   | $                  | (0.25   | )      |              | $      | 0.02 |   |   | $ | 0.10 |   |   | $ | 0.38 |   |
| Diluted Net Income (Loss) Available to Common Stockholders            |   | $                  | (0.25   | )      |              | $      | 0.02 |   |   | $ | 0.10 |   |   | $ | 0.38 |   |
| Cash Dividends Paid                                                   |   | $                  | 0.01    |   |              | $      | 0.01 |   |   | $ | 0.03 |   |   | $ | 0.03 |   |
| Average Diluted Shares Outstanding (in thousands)                     |   |               | 26,367  |   |              |   | 25,686 |   |   |   | 26,019 |   |   |   | 24,273 |   |

----

|                                                                                |   | Three Months Ended |   |   | Nine Months Ended |   |
|-------------------------------------------------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                                                                                |   | September 30,      |   |   | September 30,     |   |
|                                                                                |   | 2011               |   |   | 2010              |   |   | 2011 |   |   | 2010 |   |
| Net income                                                                          |   | $                  | 6,742  |   |              | $      | 1,635 |   |   | $ | 17,691 |   |   | $ | 2,878 |   |
| Other comprehensive income net of tax:                                              |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized holding gain on securities available for sale arising during the period, |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| net of income tax of $(4,553), $(2,204), $(8,212) and $(6,096)                      |   |               | 8,457  |   |              |   | 4,094 |   |   |   | 15,255 |   |   |   | 11,321 |   |
| Unrealized loss on securities available for sale for which a portion of an other    |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| than temporary impairment has been recognized in income,                            |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| net of tax of  $0, $155, $831 and $470                                    |   |               |   |   |              |   | (287 | ) |   |   | (1,546 | ) |   |   | (872 | ) |
| Unrealized loss on cash flow hedges: Unrealized loss arising during the period,     |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| net of income tax of $778 $0, $949 and $0                                      |   |               | (1,446 | )      |              |   |   |   |   |   | (1,762 | ) |   |   |   |   |
| Amortization of items previously recorded in accumulated other comprehensive        |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| income/(losses), net of income tax of $10, $(15), $29 and $(45)                     |   |               | (18    | )      |              |   | 23 |   |   |   | (53 | ) |   |   | 68 |   |
| Reclassification adjustment for gains included in net income                        |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| net of income tax expense of $301, $(229), $612 and $195                            |   |               | (560   | )      |              |   | 425 |   |   |   | (1,137 | ) |   |   | (362 | ) |
|                                                                                |   |               | 6,433  |   |              |   | 4,255 |   |   |   | 10,757 |   |   |   | 10,155 |   |
| Comprehensive income                                                                |   | $                  | 13,175 |   |              | $      | 5,890 |   |   | $ | 28,448 |   |   | $ | 13,033 |   |

|                                                                                                                                         |   | September 30, 2011 |    |   | December 31, 2010 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|---------|--------|-------------------|--------|
|                                                                                                                                         |   |               |    |   |              |   |
| Net unrealized gain on securities available for sale                                                                                         |   | $                  | 15,921  |   |              | $      | 2,767 |   |
|                                                                                                                                         |   |               |    |   |              |   |   |   |
| Net unrealized loss on securities available for sale for which a portion of an other-than-temporary impairment has been recognized in income |   |               | (1,584  | )      |              |   | (1,001 | ) |
|                                                                                                                                         |   |               |    |   |              |   |   |   |
| Net unrealized loss on cash flow hedges                                                                                                      |   |               | (1,474  | )      |              |   | 288 |   |
|                                                                                                                                         |   |               |    |   |              |   |   |   |
| Defined benefit plans                                                                                                                        |   |               | (12,263 | )      |              |   | (12,211 | ) |
|                                                                                                                                         |   |               |    |   |              |   |   |   |
|                                                                                                                                         |   | $                  | 600     |   |              | $      | (10,157 | ) |

----

|                                                                 |   | Preferred |    |   | Common Stock |   |    | Additional |   |   |       |   |   | Accumulated Other |   |   |              |   |
|----------------------------------------------------------------------|--------|-----------|---------|--------|--------------|--------|---------|------------|--------|--------|------------|--------|--------|-------------------|--------|--------|-------------------|--------|
|                                                                 |   | Shares    |    |   | Amount       |   |    | Shares     |   |   | Amount     |   |   | Paid in Capital   |   |   | Retained Earnings |   |   | Comprehensive Income (Loss) |   |   | Total |   |
| Balances, December 31, 2010                                          |   |      | 69,725  |   |         | $      | 68,005  |       |   |   | 25,574,251 |   |   | $                 | 3,197  |   |              | $      | 232,503 |   |   | $ | 160,860 |   |   | $ | (10,157 | ) |   | $ | 454,408 |   |
| Comprehensive Income                                                 |   |      |    |   |         |   |    |       |   |   |       |   |   |              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Net Income                             |   |      |    |   |         |   |    |       |   |   |       |   |   |              |   |   |              |   |   |   |   |   | 17,691 |   |   |   |   |   |   |   | 17,691 |   |
|      Other Comprehensive Income, net of tax |   |      |    |   |         |   |    |       |   |   |       |   |   |              |   |   |              |   |   |   |   |   |   |   |   |   | 10,757 |   |   |   | 10,757 |   |
| Cash Dividends on Common Stock ($.03 per Share)                      |   |      |    |   |         |   |    |       |   |   |       |   |   |              |   |   |              |   |   |   |   |   | (778 | ) |   |   |   |   |   |   | (778 | ) |
| Cash Dividends on Preferred Stock under Capital Purchase Program     |   |      |    |   |         |   |    |       |   |   |       |   |   |              |   |   |              |   |   |   |   |   | (2,527 | ) |   |   |   |   |   |   | (2,527 | ) |
| Accretion of Discount on Preferred Stock                             |   |      |    |   |         |   | 319     |       |   |   |       |   |   |              |   |   |              |   |   |   |   |   | (319 | ) |   |   |   |   |   |   | - |   |
| Loss on Retirement of CPP Preferred Stock                            |   |      |    |   |         |   | 1,401   |       |   |   |       |   |   |              |   |   |              |   |   |   |   |   | (1,401 | ) |   |   |   |   |   |   | - |   |
| Loss on Early Extinguishment of Trust Preferred Securities           |   |      |    |   |         |   |    |       |   |   |       |   |   |              |   |   |              |   |   |   |   |   | (10,857 | ) |   |   |   |   |   |   | (10,857 | ) |
| Preferred Stock Redeemed under Capital Purchase Program              |   |      | (69,600 | )      |         |   | (69,600 | )          |   |   |       |   |   |              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   | (69,600 | ) |
| Preferred Stock issued under Small Business Lending Fund             |   |      | 90,783  |   |         |   | 90,783  |       |   |   |       |   |   |              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   | 90,783 |   |
| Private Stock Issuance                                               |   |      |    |   |         |   |    |       |   |   | 2,822,000  |   |   |              | 353    |   |              |   | 20,812 |   |   |   |   |   |   |   |   |   |   |   | 21,165 |   |
| Share-based Compensation                                             |   |      |    |   |         |   |    |       |   |   | 70,543     |   |   |              | 9      |   |              |   | 1,000 |   |   |   |   |   |   |   |   |   |   |   | 1,009 |   |
| Stock Issued Under Employee Benefit Plans                            |   |      |    |   |         |   |    |       |   |   | 78,102     |   |   |              | 10     |   |              |   | 551 |   |   |   |   |   |   |   |   |   |   |   | 561 |   |
| Stock Issued Under Dividend Reinvestment and Stock Purchase Plan     |   |      |    |   |         |   |    |       |   |   | 7,506      |   |   |              | 1      |   |              |   | 59 |   |   |   |   |   |   |   |   |   |   |   | 60 |   |
| Stock Redeemed                                                       |   |      |    |   |         |   |    |       |   |   | (14,238    | )      |   |              | (3     | )      |              |   | (124 | ) |   |   |   |   |   |   |   |   |   |   | (127 | ) |
| Balances, September 30, 2011                                         |   |      | 90,908  |   |         | $      | 90,908  |       |   |   | 28,538,164 |   |   | $                 | 3,567  |   |              | $      | 254,801 |   |   | $ | 162,669 |   |   | $ | 600 |   |   | $ | 512,545 |   |

----

|                                                                              |   | September 30, |     |
|-----------------------------------------------------------------------------------|--------|---------------|----------|
|                                                                              |   | 2011          |     |   | 2010 |   |
| Cash Flow From Operating Activities:                                              |   |          |     |   |   |   |
| Net income                                                                        |   | $             | 17,691   |   |   | $ | 2,878 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |          |     |   |   |   |   |   |
| Provision for loan losses                                                         |   |          | 16,775   |   |   |   | 39,405 |   |
| Depreciation and amortization                                                     |   |          | 3,998    |   |   |   | 4,289 |   |
| Share-based compensation                                                          |   |          | 1,009    |   |   |   | 1,369 |   |
| Tax expense from stock compensation                                               |   |          |     |   |   |   | 48 |   |
| Mortgage loans originated for sale                                                |   |          | (185,658 | ) |   |   | (163,235 | ) |
| Proceeds from sales of mortgage loans                                             |   |          | 194,870  |   |   |   | 155,881 |   |
| Gains on sales of securities available for sale                                   |   |          | (2,149   | ) |   |   | (2,101 | ) |
| Recognized loss on other-than-temporary-impairment                                |   |          | 400      |   |   |   | 1,544 |   |
| Change in interest receivable                                                     |   |          | 904      |   |   |   | 508 |   |
| Change in interest payable                                                        |   |          | (2,076   | ) |   |   | (1,700 | ) |
| Other adjustments                                                                 |   |          | 21,382   |   |   |   | 21,532 |   |
| Net cash provided by operating activities                                         |   | $             | 67,146   |   |   | $ | 60,418 |   |
| Cash Flows from Investing Activities:                                             |   |          |     |   |   |   |   |   |
| Net change in interest-bearing deposits                                           |   | $             | 49,101   |   |   | $ | (40,376 | ) |
| Purchases of:                                                                     |   |          |     |   |   |   |   |   |
| Securities available for sale                                                     |   |          | (133,526 | ) |   |   | (201,560 | ) |
| Securities held to maturity                                                       |   |          | (77,678  | ) |   |   | (58,076 | ) |
| Proceeds from sales of securities available for sale                              |   |          | 54,606   |   |   |   | 64,314 |   |
| Proceeds from maturities of:                                                      |   |          |     |   |   |   |   |   |
| Securities available for sale                                                     |   |          | 37,894   |   |   |   | 50,929 |   |
| Securities held to maturity                                                       |   |          | 28,120   |   |   |   | 22,191 |   |
| Proceeds from redemptions of Federal Reserve and Federal Home Loan Bank stock     |   |          | 2,503    |   |   |   | 2,305 |   |
| Purchase of bank owned life insurance                                             |   |          | (25,000  | ) |   |   |   |   |
| Net change in loans                                                               |   |          | 73,520   |   |   |   | 285,024 |   |
| Proceeds from the sale of other real estate owned                                 |   |          | 9,916    |   |   |   | 14,080 |   |
| Other adjustments                                                                 |   |          | 6,921    |   |   |   | (1,259 | ) |
| Net cash provided by investing activities                                         |   | $             | 26,377   |   |   | $ | 137,572 |   |
| Cash Flows from Financing Activities:                                             |   |          |     |   |   |   |   |   |
| Net change in :                                                                   |   |          |     |   |   |   |   |   |
| Demand and savings deposits                                                       |   | $             | (54,157  | ) |   | $ | 8,273 |   |
| Certificates of deposit and other time deposits                                   |   |          | (150,473 | ) |   |   | (290,458 | ) |
| Borrowings                                                                        |   |          | 242,323  |   |   |   | 2,154 |   |
| Repayment of borrowings                                                           |   |          | (168,894 | ) |   |   | (55,303 | ) |
| Cash dividends on common stock                                                    |   |          | (778     | ) |   |   | (731 | ) |
| Cash dividends on preferred stock                                                 |   |          | (2,527   | ) |   |   | (4,495 | ) |
| Stock issued in private equity placement                                          |   |          | 21,165   |   |   |   | 24,150 |   |
| Stock issued under dividend reinvestment and stock purchase plans                 |   |          | 621      |   |   |   | 526 |   |
| Stock redeemed                                                                    |   |          | (127     | ) |   |   | (77 | ) |
| Cumulative preferred stock issued (SBLF)                                          |   |          | 90,783   |   |   |   |   |   |
| Cumulative preferred stock redeemed (CPP)                                         |   |          | (69,600  | ) |   |   |   |   |
| Tax (expense) benefit from stock options exercised                                |   |          |     |   |   |   | (48 | ) |
| Net cash used in financing activities                                             |   | $             | (91,664  | ) |   | $ | (316,009 | ) |
| Net Change in Cash and Cash Equivalents                                           |   |          | 1,859    |   |   |   | (118,019 | ) |
| Cash and Cash Equivalents, January 1                                              |   |          | 58,307   |   |   |   | 179,147 |   |
| Cash and Cash Equivalents, September 30                                           |   | $             | 60,166   |   |   | $ | 61,128 |   |
|  Additional cash flow information:                                           |   |          |     |   |   |   |   |   |
| Interest paid                                                                     |   | $             | 32,073   |   |   | $ | 45,245 |   |
| Income tax refunded                                                               |   | $             | (2,977   | ) |   | $ | (6,035 | ) |
| Exchange of preferred stock for trust preferred debt                              |   | $             |     |   |   | $ | 46,400 |   |
| Loans transferred to other real estate owned                                      |   | $             | 12,646   |   |   | $ | 23,524 |   |
| Non-cash investing activities using trade date accounting                         |   | $             | (2,298   | ) |   | $ | 1,305 |   |

----

|                                        |   | Amortized Cost |    |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   | Fair Value |   |
|---------------------------------------------|--------|----------------|---------|--------|------------------------|--------|--------|-------------------------|--------|--------|------------|--------|
| Available for sale at September 30, 2011    |   |           |    |   |                   |   |   |                    |   |   |       |   |
| U.S. Government-sponsored agency securities |   | $              | 100     |   |                   | $      | 17     |                    |   |   |       |   | $ | 117 |   |
| State and municipal                         |   |           | 133,273 |   |                   |   | 6,729  |                    |   | $      | 2          |   |   |   | 140,000 |   |
| Mortgage-backed securities                  |   |           | 342,083 |   |                   |   | 12,415 |                    |   |   | 33         |   |   |   | 354,465 |   |
| Corporate obligations                       |   |           | 5,675   |   |                   |   |   |                    |   |   | 5,479      |   |   |   | 196 |   |
| Equity securities                           |   |           | 1,830   |   |                   |   |   |                    |   |   |       |   |   |   | 1,830 |   |
| Total available for sale                    |   |           | 482,961 |   |                   |   | 19,161 |                    |   |   | 5,514      |   |   |   | 496,608 |   |
| Held to maturity at September 30, 2011      |   |           |    |   |                   |   |   |                    |   |   |       |   |   |   |   |   |
| State and municipal                         |   |           | 117,346 |   |                   |   | 113    |                    |   |   | 111        |   |   |   | 117,348 |   |
| Mortgage-backed securities                  |   |           | 323,874 |   |                   |   | 11,726 |                    |   |   |       |   |   |   | 335,600 |   |
| Total held to maturity                      |   |           | 441,220 |   |                   |   | 11,839 |                    |   |   | 111        |   |   |   | 452,948 |   |
| Total Investment Securities                 |   | $              | 924,181 |   |                   | $      | 31,000 |                    |   | $      | 5,625      |   |   | $ | 949,556 |   |

|                                        |   | 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 |    |   | Held to Maturity |   |
|----------------------------------------------|--------|--------------------|---------|--------|------------------|--------|
|                                         |   | Amortized Cost     |    |   | Fair Value       |   |   | Amortized Cost |   |   | Fair Value |   |
| Maturity Distribution at September 30, 2011: |   |               |    |   |             |   |   |   |   |   |   |   |
| Due in one year or less                      |   | $                  | 3,225   |   |             | $      | 3,242 |   |   | $ | 2,010 |   |   | $ | 2,010 |   |
| Due after one through five years             |   |               | 13,929  |   |             |   | 14,327 |   |   |   | 1,435 |   |   |   | 1,444 |   |
| Due after five through ten years             |   |               | 26,874  |   |             |   | 28,345 |   |   |   | 37,177 |   |   |   | 37,041 |   |
| Due after ten years                          |   |               | 95,020  |   |             |   | 94,399 |   |   |   | 76,724 |   |   |   | 76,853 |   |
|                                         |   | $                  | 139,048 |   |             | $      | 140,313 |   |   | $ | 117,346 |   |   | $ | 117,348 |   |
|                                         |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities                   |   |               | 342,083 |   |             |   | 354,465 |   |   |   | 323,874 |   |   |   | 335,600 |   |
| Equity securities                            |   |               | 1,830   |   |             |   | 1,830 |   |   |   |   |   |   |   |   |   |
|                                         |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Total Investment Securities                  |   | $                  | 482,961 |   |             | $      | 496,608 |   |   | $ | 441,220 |   |   | $ | 452,948 |   |

----

|                                             |   | Less than 12 Months |   |   | 12 Months or Longer     |   |   | Total      |   |
|--------------------------------------------------|--------|--------------------------|--------|--------|-------------------------|--------|--------|------------|--------|
|                                             |   | Fair Value               |   |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |   |
| Temporarily Impaired Investment                  |   |                     |   |   |                    |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Securities at September 30, 2011                 |   |                     |   |   |                    |   |   |       |   |   |   |   |   |   |   |   |   |   |
| State and municipal                              |   | $                        | 1,548  |   |                    | $      | (2     | )          |   |   |   |   |   |   |   | $ | 1,548 |   |   | $ | (2 | ) |
| Mortgage-backed securities                       |   |                     | 5,196  |   |                    |   | (33    | )          |   |   |   |   |   |   |   |   | 5,196 |   |   |   | (33 | ) |
| Corporate obligations                            |   |                     |   |   |                    |   |   |       |   | $ | 165 |   |   | $ | (5,479 | ) |   |   | 165 |   |   |   | (5,479 | ) |
| Total Temporarily Impaired Investment Securities |   | $                        | 6,744  |   |                    | $      | (35    | )          |   | $ | 165 |   |   | $ | (5,479 | ) |   | $ | 6,909 |   |   | $ | (5,514 | ) |

|                                             |   | Less than 12 Months |    |   | 12 Months or Longer     |   |   | Total      |   |
|--------------------------------------------------|--------|--------------------------|---------|--------|-------------------------|--------|--------|------------|--------|
|                                             |   | Fair Value               |    |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |   |
| 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 | ) |

----

|                                                                       |   | Accumulated Credit Losses in 2011 |   |   | Accumulated Credit Losses in 2010 |   |
|----------------------------------------------------------------------------|--------|-----------------------------------|--------|--------|-----------------------------------|--------|
| Credit losses on debt securities held:                                     |   |                              |   |   |                              |   |
| Balance, January 1                                                         |   | $                                 | 10,955 |   |                              | $      | 9,411 |   |
| Additions related to other-than-temporary losses not previously recognized |   |                              | 400    |   |                              |   | 1,544 |   |
| Balance, September 30                                                      |   | $                                 | 11,355 |   |                              | $      | 10,955 |   |

----

|                                                             |   | September 30, |      |   | December 31, |   |
|------------------------------------------------------------------|--------|---------------|-----------|--------|--------------|--------|
|                                                             |   | 2011          |      |   | 2010         |   |
| Loans:                                                           |   |          |      |   |         |   |
| Commercial and industrial loans                                  |   | $             | 518,848   |   |         | $      | 530,322 |   |
| Agricultural production financing and other loans to farmers     |   |          | 106,761   |   |         |   | 95,516 |   |
| Real estate loans:                                               |   |          |      |   |         |   |   |   |
| Construction                                                     |   |          | 70,044    |   |         |   | 106,615 |   |
| Commercial and farm land                                         |   |          | 1,196,270 |   |         |   | 1,229,037 |   |
| Residential                                                      |   |          | 495,954   |   |         |   | 522,051 |   |
| Home Equity                                                      |   |          | 196,191   |   |         |   | 201,969 |   |
| Individual's loans for household and other personal expenditures |   |          | 90,810    |   |         |   | 115,295 |   |
| Lease financing receivables, net of unearned income              |   |          | 4,160     |   |         |   | 5,157 |   |
| Other loans                                                      |   |          | 33,900    |   |         |   | 29,721 |   |
|                                                             |   |          | 2,712,938 |   |         |   | 2,835,683 |   |
| Allowance for loan losses                                        |   |          | (73,074   | )      |         |   | (82,977 | ) |
| Total Loans                                                      |   | $             | 2,639,864 |   |         | $      | 2,752,706 |   |

----

----

|                         |   | Three Months Ended September 30, 2011 |   |
|------------------------------|--------|---------------------------------------|--------|
|                         |   | Commercial                            |   |   | Real Estate Commercial |   |   | Consumer |   |   | Residential |   |   | Finance Leases |   |   | Total |   |
| Allowance for loan losses:   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances, July 1             |   | $                                     | 23,715 |   |   | $ | 38,668 |   |   | $ | 2,859 |   |   | $ | 11,877 |   |   | $ | 14 |   |   | $ | 77,133 |   |
| Provision for losses         |   |                                  | (903   | ) |   |   | 3,042 |   |   |   | 281 |   |   |   | 3,142 |   |   |   | (6 | ) |   |   | 5,556 |   |
| Recoveries on loans          |   |                                  | 1,176  |   |   |   | 378 |   |   |   | 163 |   |   |   | 237 |   |   |   | 1 |   |   |   | 1,955 |   |
| Loans charged off            |   |                                  | (4,344 | ) |   |   | (5,003 | ) |   |   | (266 | ) |   |   | (1,957 | ) |   |   |   |   |   |   | (11,570 | ) |
| Balances, September 30, 2011 |   | $                                     | 19,644 |   |   | $ | 37,085 |   |   | $ | 3,037 |   |   | $ | 13,299 |   |   | $ | 9 |   |   | $ | 73,074 |   |

|                         |   | Nine Months Ended September 30, 2011 |    |
|------------------------------|--------|--------------------------------------|---------|
|                         |   | Commercial                           |    |   | Real Estate Commercial |   |   | Consumer |   |   | Residential |   |   | Finance Leases |   |   | Total |   |
| Allowance for loan losses:   |   |                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances, January 1          |   | $                                    | 32,508  |   |   | $ | 36,341 |   |   | $ | 3,622 |   |   | $ | 10,408 |   |   | $ | 98 |   |   | $ | 82,977 |   |
| Provision for losses         |   |                                 | (14,778 | ) |   |   | 24,232 |   |   |   | (187 | ) |   |   | 7,601 |   |   |   | (93 | ) |   |   | 16,775 |   |
| Recoveries on loans          |   |                                 | 8,174   |   |   |   | 1,244 |   |   |   | 781 |   |   |   | 934 |   |   |   | 4 |   |   |   | 11,137 |   |
| Loans charged off            |   |                                 | (6,260  | ) |   |   | (24,732 | ) |   |   | (1,179 | ) |   |   | (5,644 | ) |   |   |   |   |   |   | (37,815 | ) |
| Balances, September 30, 2011 |   | $                                    | 19,644  |   |   | $ | 37,085 |   |   | $ | 3,037 |   |   | $ | 13,299 |   |   | $ | 9 |   |   | $ | 73,074 |   |

|                       |   | 2010   |    |
|----------------------------|--------|--------|---------|
| Allowance for loan losses: |   |   |    |
| Balance, January 1         |   | $      | 92,131  |   |
| Provision for losses       |   |   | 46,483  |   |
| Recoveries on loans        |   |   | 11,935  |   |
| Loans charged off          |   |   | (67,572 | ) |
| Balance, December 31, 2010 |   | $      | 82,977  |   |

----

|                                                                                                                            |   | September 30, 2011 |    |
|---------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|---------|
|                                                                                                                            |   | Commercial         |    |   | Commercial Real Estate |   |   | Consumer |   |   | Residential |   |   | Finance Leases |   |   | Total |   |
| Allowance Balances:                                                                                                             |   |               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Individually evaluated for impairment                                           |   | $                  | 5,379   |   |   | $ | 2,305 |   |   | $ |   |   |   | $ | 493 |   |   | $ |   |   |   | $ | 8,177 |   |
|         Collectively evaluated for impairment                                           |   |               | 14,265  |   |   |   | 34,780 |   |   |   | 3,037 |   |   |   | 12,806 |   |   |   | 9 |   |   |   | 64,897 |   |
|                 Total Allowance for Loan Losses |   | $                  | 19,644  |   |   | $ | 37,085 |   |   | $ | 3,037 |   |   | $ | 13,299 |   |   | $ | 9 |   |   | $ | 73,074 |   |
|                                                                                                                            |   |               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loan Balances:                                                                                                                  |   |               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Individually evaluated for impairment                                           |   | $                  | 21,899  |   |   | $ | 55,803 |   |   | $ |   |   |   | $ | 10,070 |   |   | $ |   |   |   | $ | 87,772 |   |
|         Collectively evaluated for impairment                                           |   |               | 637,611 |   |   |   | 1,210,510 |   |   |   | 90,810 |   |   |   | 682,075 |   |   |   | 4,160 |   |   |   | 2,625,166 |   |
|                 Total Loans                     |   | $                  | 659,510 |   |   | $ | 1,266,313 |   |   | $ | 90,810 |   |   | $ | 692,145 |   |   | $ | 4,160 |   |   | $ | 2,712,938 |   |

|                                                                                                                            |   | December 31, 2010 |    |
|---------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|
|                                                                                                                            |   | Commercial        |    |   | Commercial Real Estate |   |   | Consumer |   |   | Residential |   |   | Finance Leases |   |   | Total |   |
| Allowance Balances:                                                                                                             |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         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 |   |
|                 Total Allowance for Loan Losses |   | $                 | 32,508  |   |   | $ | 36,341 |   |   | $ | 3,622 |   |   | $ | 10,408 |   |   | $ | 98 |   |   | $ | 82,977 |   |
|                                                                                                                            |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loan Balances:                                                                                                                  |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         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 |   |
|                 Total Loans                     |   | $                 | 655,559 |   |   | $ | 1,335,652 |   |   | $ | 115,295 |   |   | $ | 724,020 |   |   | $ | 5,157 |   |   | $ | 2,835,683 |   |

|                                     |   | September 30, |    |   | December 31, |   |
|------------------------------------------|--------|---------------|---------|--------|--------------|--------|
|                                     |   | 2011          |    |   | 2010         |   |
| Non-Performing Assets:                   |   |          |    |   |         |   |
| Non-accrual loans                        |   | $             | 78,933  |   |         | $      | 90,591 |   |
| Renegotiated loans                       |   |          | 6,701   |   |         |   | 7,139 |   |
| Non-performing loans (NPL)               |   |          | 85,634  |   |         |   | 97,730 |   |
| Real estate owned and repossessed assets |   |          | 19,425  |   |         |   | 20,927 |   |
| Non-performing assets (NPA)              |   |          | 105,059 |   |         |   | 118,657 |   |
| 90+ days delinquent and still accruing   |   |          | 1,595   |   |         |   | 1,330 |   |
| NPAs & 90+ days delinquent           |   | $             | 106,654 |   |         | $      | 119,987 |   |

----

| Non Accruals by Class                                                               |   |          |   |   |         |   |
|-------------------------------------------------------------------------------------|--------|---------------|--------|--------|--------------|--------|
|                                                                                |   | September 30, |   |   | December 31, |   |
|                                                                                |   | 2011          |   |   | 2010         |   |
| Commercial and Industrial                                                           |   | $             | 13,725 |   |         | $      | 9,812 |   |
| Agriculture production financing and other loans                                    |   |          | 304    |   |         |   | 544 |   |
| Real Estate Loans:                                                                  |   |          |   |   |         |   |   |   |
|        Construction                              |   |          | 8,353  |   |         |   | 17,164 |   |
|        Commercial and farm land                  |   |          | 39,209 |   |         |   | 45,308 |   |
|        Residential                               |   |          | 14,640 |   |         |   | 15,115 |   |
|        Home Equity                               |   |          | 2,066  |   |         |   | 2,648 |   |
| Individuals loans for household and other personal expenditures                     |   |          | 54     |   |         |   |   |   |
| Lease financing receivables, net of unearned income                                 |   |          |   |   |         |   |   |   |
| Other Loans                                                                         |   |          | 582    |   |         |   |   |   |
|              Total |   | $             | 78,933 |   |         | $      | 90,591 |   |

----

|                                                                                                                  |   |                     |    |   |                |   |   |               |   |   | Three Months Ended          |   |   | Nine Months Ended          |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|--------------------------|---------|--------|---------------------|--------|--------|--------------------|--------|--------|-----------------------------|--------|--------|----------------------------|--------|
|                                                                                                                  |   | September 30, 2011       |    |   | September 30, 2011  |   |   | September 30, 2011 |   |
|                                                                                                                  |   | Unpaid Principal Balance |    |   | Recorded Investment |   |   | Related Allowance  |   |   | Average Recorded Investment |   |   | Interest Income Recognized |   |   | Average Recorded Investment |   |   | Interest Income Recognized |   |
| Impaired loans with no related allowance:                                                                             |   |                     |    |   |                |   |   |               |   |   |                        |   |   |                       |   |   |   |   |   |   |   |
|           Commercial and industrial                                 |   | $                        | 27,338  |   |                | $      | 13,328 |               |   | $      | 4,800                       |   |   | $                          | 16,080 |   |   | $ | 80 |   |   | $ | 17,536 |   |   | $ | 255 |   |
|           Agriculture production financing and                      |   |                     |    |   |                |   |   |               |   |   |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                other loans to farmers      |   |                     | 663     |   |                |   | 304    |               |   |   |                        |   |   |                       | 304    |   |   |   |   |   |   |   | 362 |   |   |   |   |   |
|           Real Estate Loans:                                        |   |                     |    |   |                |   |   |               |   |   |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                Construction                |   |                     | 14,045  |   |                |   | 7,819  |               |   |   | 90                          |   |   |                       | 8,290  |   |   |   |   |   |   |   | 8,977 |   |   |   |   |   |
|                Commercial and farm land    |   |                     | 56,795  |   |                |   | 37,079 |               |   |   | 2,215                       |   |   |                       | 38,800 |   |   |   | 102 |   |   |   | 41,646 |   |   |   | 438 |   |
|                Residential                 |   |                     | 9,680   |   |                |   | 6,545  |               |   |   | 493                         |   |   |                       | 6,982  |   |   |   | 6 |   |   |   | 7,239 |   |   |   | 16 |   |
|                Home equity                 |   |                     | 4,670   |   |                |   | 1,317  |               |   |   |                        |   |   |                       | 1,422  |   |   |   | 4 |   |   |   | 1,416 |   |   |   | 12 |   |
|           Individuals loans for household and                       |   |                     |    |   |                |   |   |               |   |   |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                other personal expenditures |   |                     |    |   |                |   |   |               |   |   |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           Lease financing receivables, net of                       |   |                     |    |   |                |   |   |               |   |   |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                unearned income             |   |                     |    |   |                |   |   |               |   |   |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           Other loans                                               |   |                     | 90      |   |                |   | 10     |               |   |   | 579                         |   |   |                       | 11     |   |   |   |   |   |   |   | 12 |   |   |   |   |   |
|                   Total     |   | $                        | 113,281 |   |                | $      | 66,402 |               |   | $      | 8,177                       |   |   | $                          | 71,889 |   |   | $ | 192 |   |   | $ | 77,188 |   |   | $ | 721 |   |
|                                                                                                                  |   |                     |    |   |                |   |   |               |   |   |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Impaired loans with related allowance:                                                                                |   |                     |    |   |                |   |   |               |   |   |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           Commercial and industrial                                 |   | $                        | 7,932   |   |                | $      | 7,686  |               |   | $      |                        |   |   | $                          | 8,745  |   |   | $ | 51 |   |   | $ | 9,047 |   |   | $ | 206 |   |
|           Agriculture production financing and                      |   |                     |    |   |                |   |   |               |   |   |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                other loans to farmers      |   |                     |    |   |                |   |   |               |   |   |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           Real Estate Loans:                                        |   |                     |    |   |                |   |   |               |   |   |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                Construction                |   |                     | 763     |   |                |   | 350    |               |   |   |                        |   |   |                       | 350    |   |   |   |   |   |   |   | 350 |   |   |   |   |   |
|                Commercial and farm land    |   |                     | 10,683  |   |                |   | 10,554 |               |   |   |                        |   |   |                       | 10,619 |   |   |   | 43 |   |   |   | 10,669 |   |   |   | 112 |   |
|                Residential                 |   |                     | 2,299   |   |                |   | 2,208  |               |   |   |                        |   |   |                       | 2,231  |   |   |   | 8 |   |   |   | 2,273 |   |   |   | 23 |   |
|                Home equity                 |   |                     |    |   |                |   |   |               |   |   |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           Individuals loans for household and                       |   |                     |    |   |                |   |   |               |   |   |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                other personal expenditures |   |                     |    |   |                |   |   |               |   |   |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           Lease financing receivables, net of                       |   |                     |    |   |                |   |   |               |   |   |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                unearned income             |   |                     |    |   |                |   |   |               |   |   |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           Other loans                                               |   |                     | 591     |   |                |   | 572    |               |   |   |                        |   |   |                       | 582    |   |   |   |   |   |   |   | 600 |   |   |   |   |   |
|                   Total     |   | $                        | 22,268  |   |                | $      | 21,370 |               |   | $      |                        |   |   | $                          | 22,527 |   |   | $ | 102 |   |   | $ | 22,939 |   |   | $ | 341 |   |
|                                                                                                                  |   |                     |    |   |                |   |   |               |   |   |                        |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Impaired Loans                                                                                                  |   | $                        | 135,549 |   |                | $      | 87,772 |               |   | $      | 8,177                       |   |   | $                          | 94,416 |   |   | $ | 294 |   |   | $ | 100,127 |   |   | $ | 1,062 |   |

----

|                                                                                                                             |   | December 31, 2010        |      |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|-----------|
|                                                                                                                             |   | Unpaid Principal Balance |      |   | Recorded Investment |   |   | Related Allowance |   |
| Impaired loans with no related allowance:                                                                                        |   |                     |      |   |   |   |   |   |   |
|           Commercial and industrial                                            |   | $                        | 30,006    |   |   | $ | 16,572 |   |   |   |   |
|           Agriculture production financing and other loans to farmers     |   |                     | 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 related allowance:                                                                                           |   |                     |      |   |   |   |   |   |   |   |   |
|           Commercial and industrial                                            |   | $                        | 11,477    |   |   | $ | 11,374 |   |   | $ | 5,250 |   |
|           Agriculture production financing and other loans to farmers          |   |                     |      |   |   |   |   |   |   |   |   |   |
|           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 Corporation’s credit position at some future date.  Special mention assets are not adversely classified and do not expose the Corporation 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 theborrower.  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 Corporation will sustain some loss if the deficiencies are not corrected.  Other characteristics may include: |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o    | 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, |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o    | the primary source of repayment is gone, and the Corporation is forced to rely on a secondary source of repayment, such as collateral liquidation or guarantees, |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o    | loans have a distinct possibility that the Corporation will sustain some loss if deficiencies are not corrected, |
|---------------------|------------------------------------------------------------------------------------------------------------------|

| o    | unusual courses of action are needed to maintain a high probability of repayment, |
|---------------------|-----------------------------------------------------------------------------------|

| o    | the borrower is not generating enough cash flow to repay loan principal; however, it continues to make interest payments, |
|---------------------|---------------------------------------------------------------------------------------------------------------------------|

| o    | the Corporation is forced into a subordinated or unsecured position due to flaws in documentation, |
|---------------------|----------------------------------------------------------------------------------------------------|

| o    | loans have been restructured so that payment schedules, terms and collateral represent concessions to the borrower when compared to the normal loan terms, |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | the Corporation is seriously contemplating foreclosure or legal action due to the apparent deterioration of the loan, and |
|---------------|---------------------------------------------------------------------------------------------------------------------------|

| o   | 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. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                  |   | September 30, 2011 |      |
|-------------------------------------------------------------------------------------------------------|--------|--------------------|-----------|
|                                                                                                  |   | Commercial Pass    |      |   | Commercial Special Mention |   |   | Commercial Substandard |   |   | Commercial Doubtful |   | Commercial Loss |   | Consumer Performing |   |   | Consumer Non-Performing |   |   | Total Loans |   |
| Commercial and industrial                                                                             |   | $                  | 457,917   |   |   | $ | 24,741 |   |   | $ | 28,739 |   |   | $ | 7,451 |   | $ |   | $ |   |   |   | $ |   |   |   | $ | 518,848 |   |
| Agriculture production financing and other loans                                                      |   |               | 101,889   |   |   |   | 2,247 |   |   |   | 2,625 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 106,761 |   |
| Real Estate Loans:                                                                                    |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        Construction                                                |   |               | 43,285    |   |   |   | 8,875 |   |   |   | 16,745 |   |   |   | 956 |   |   |   |   |   |   |   |   | 183 |   |   |   | 70,044 |   |
|        Commercial and farm land                                    |   |               | 1,023,996 |   |   |   | 54,925 |   |   |   | 113,761 |   |   |   | 3,550 |   |   |   |   |   |   |   |   | 38 |   |   |   | 1,196,270 |   |
|        Residential                                                 |   |               | 142,211   |   |   |   | 8,952 |   |   |   | 18,144 |   |   |   | 945 |   |   |   |   | 318,941 |   |   |   | 6,760 |   |   |   | 495,953 |   |
|        Home equity                                                 |   |               | 19,437    |   |   |   | 25 |   |   |   | 4,128 |   |   |   |   |   |   |   |   | 171,355 |   |   |   | 1,246 |   |   |   | 196,191 |   |
| Individuals loans for household and other personal expenditures                                       |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 90,752 |   |   |   | 58 |   |   |   | 90,810 |   |
| Lease financing receivables, net of unearned income                                                   |   |               | 111       |   |   |   |   |   |   |   | 9 |   |   |   |   |   |   |   |   | 4,040 |   |   |   |   |   |   |   | 4,160 |   |
| Other loans                                                                                           |   |               | 33,214    |   |   |   | 15 |   |   |   | 100 |   |   |   | 572 |   |   |   |   |   |   |   |   |   |   |   |   | 33,901 |   |
|                 Total |   | $                  | 1,822,060 |   |   | $ | 99,780 |   |   | $ | 184,251 |   |   | $ | 13,474 |   | $ |   | $ | 585,088 |   |   | $ | 8,285 |   |   | $ | 2,712,938 |   |

|                                                                                                  |   | 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 |   |   |   |   | $ | 340,932 |   |   | $ | 7,820 |   |   |   | 522,051 |   |
|        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 |   | $ | 639,500 |   |   | $ | 9,783 |   |   | $ | 2,835,683 |   |

----

|                                                                                                  |   | September 30, 2011 |      |
|-------------------------------------------------------------------------------------------------------|--------|--------------------|-----------|
|                                                                                                  |   | 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                                                                             |   | $                  | 500,951   |   |   | $ | 2,626 |   |   | $ | 437 |   |   | $ | 1,109 |   |   | $ | 13,725 |   |   | $ | 17,897 |   |   | $ | 518,848 |   |
| Agriculture production financing and other loans                                                      |   |               | 106,457   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 304 |   |   |   | 304 |   |   |   | 106,761 |   |
| Real Estate Loans:                                                                                    |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        Construction                                                |   |               | 60,368    |   |   |   | 1,251 |   |   |   | 72 |   |   |   |   |   |   |   | 8,353 |   |   |   | 9,676 |   |   |   | 70,044 |   |
|        Commercial and farm land                                    |   |               | 1,140,235 |   |   |   | 1,455 |   |   |   | 15,240 |   |   |   | 131 |   |   |   | 39,209 |   |   |   | 56,035 |   |   |   | 1,196,270 |   |
|        Residential                                                 |   |               | 474,519   |   |   |   | 5,695 |   |   |   | 1,032 |   |   |   | 68 |   |   |   | 14,640 |   |   |   | 21,435 |   |   |   | 495,954 |   |
|        Home equity                                                 |   |               | 192,002   |   |   |   | 1,544 |   |   |   | 296 |   |   |   | 283 |   |   |   | 2,066 |   |   |   | 4,189 |   |   |   | 196,191 |   |
| Individuals loans for household and other personal expenditures                                       |   |               | 89,616    |   |   |   | 996 |   |   |   | 140 |   |   |   | 4 |   |   |   | 54 |   |   |   | 1,194 |   |   |   | 90,810 |   |
| Lease financing receivables, net of unearned income                                                   |   |               | 4,160     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 4,160 |   |
| Other loans                                                                                           |   |               | 33,318    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 582 |   |   |   | 582 |   |   |   | 33,900 |   |
|                 Total |   | $                  | 2,601,626 |   |   | $ | 13,567 |   |   | $ | 17,217 |   |   | $ | 1,595 |   |   | $ | 78,933 |   |   | $ | 111,312 |   |   | $ | 2,712,938 |   |

|                                                                                                  |   | 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                                                 |   |              | 498,066   |   |   |   | 5,261 |   |   |   | 3,363 |   |   |   | 246 |   |   |   | 15,115 |   |   |   | 23,985 |   |   |   | 522,051 |   |
|        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 |   | $                 | 2,713,925 |   |   | $ | 18,864 |   |   | $ | 10,973 |   |   | $ | 1,330 |   |   | $ | 90,591 |   |   | $ | 121,758 |   |   | $ | 2,835,683 |   |

----

|                                                                                |   | Three Months Ended |   |   | Nine Months Ended  |   |
|-------------------------------------------------------------------------------------|--------|--------------------|--------|--------|--------------------|--------|
|                                                                                |   | September 30, 2011 |   |   | September 30, 2011 |   |
|                                                                                |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |               |   |   | Pre-Modification   |   |   | Post-Modification |   |   |   |   |   | Pre-Modification |   |   | Post-Modification |   |
|                                                                                |   | Numberof Loans     |   |   | Recorded Balance   |   |   | Recorded Balance |   |   | Numberof Loans |   |   | Recorded Balance |   |   | Recorded Balance |   |
| Commercial and Industrial                                                           |   |               | 5      |   |               | $      | 535 |   |   | $ | 552 |   |   |   | 10 |   |   | $ | 1,636 |   |   | $ | 1,651 |   |
| Agriculture production financing and other loans                                    |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real Estate Loans:                                                                  |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        Construction                              |   |               | 1      |   |               |   | 40 |   |   |   | 41 |   |   |   | 3 |   |   |   | 175 |   |   |   | 184 |   |
|        Commercial and farm land                  |   |               | 1      |   |               |   | 379 |   |   |   | 379 |   |   |   | 6 |   |   |   | 4,357 |   |   |   | 4,346 |   |
|        Residential                               |   |               | 10     |   |               |   | 1,034 |   |   |   | 1,407 |   |   |   | 30 |   |   |   | 2,690 |   |   |   | 3,115 |   |
|        Home Equity                               |   |               |   |   |               |   |   |   |   |   |   |   |   |   | 8 |   |   |   | 82 |   |   |   | 87 |   |
| Individuals loans for household and other personal expenditures                     |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Lease financing receivables, net of unearned income                                 |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Loans                                                                         |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|              Total |   |               | 17     |   |               | $      | 1,988 |   |   | $ | 2,379 |   |   |   | 57 |   |   | $ | 8,940 |   |   | $ | 9,383 |   |

|                                                                                |   | Three Months Ended |   |   | Nine Months Ended  |   |
|-------------------------------------------------------------------------------------|--------|--------------------|--------|--------|--------------------|--------|
|                                                                                |   | September 30, 2011 |   |   | September 30, 2011 |   |
|                                                                                |   |               |   |   |               |   |   |   |   |   |   |   |
|                                                                                |   | Numberof Loans     |   |   | Recorded Balance   |   |   | Numberof Loans |   |   | Recorded Balance |   |
| Commercial and Industrial                                                           |   |               | 1      |   |               | $      | 66 |   |   |   | 2 |   |   | $ | 553 |   |
| Agriculture production financing and other loans                                    |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Real Estate Loans:                                                                  |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
|        Construction                              |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
|        Commercial and farm land                  |   |               |   |   |               |   |   |   |   |   | 1 |   |   |   |   |   |
|        Residential                               |   |               | 3      |   |               |   | 271 |   |   |   | 3 |   |   |   | 657 |   |
|        Home Equity                               |   |               | 1      |   |               |   | 11 |   |   |   | 1 |   |   |   | 11 |   |
| Individuals loans for household and other personal expenditures                     |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Lease financing receivables, net of unearned income                                 |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Other Loans                                                                         |   |               | 5      |   |               | $      | 348 |   |   |   | 7 |   |   | $ | 1,221 |   |
|              Total |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |

----

----

|                                               | Asset Derivatives      |   | Liability Derivatives |   |
|----------------------------------------------------|------------------------|--------|-----------------------|--------|
|                                               | September 30, 2011     |   | December 31, 2010     |   | September 30, 2011 |   | December 31, 2010 |   |
|                                               | 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           |   | $                     | 456    |   | Other Assets |   | $ | 1,393 |   | Other Liabilities |   | $ | 1,772 |   | Other Liabilities |   | $ |   |   |
|                                               |                   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives not designated as hedging instruments: |                   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate contracts                            | Other Assets           |   | $                     | 5,308  |   | Other Assets |   | $ | 3,718 |   | Other Liabilities |   | $ | 5,559 |   | Other Liabilities |   | $ | 3,876 |   |

| Derivatives Not Designated as Hedging Instruments under ASC 815-10 | Location of Gain (Loss) Recognized Income on Derivative |   | Amount of Gain (Loss) Recognized Income on Derivative |   |   | Amount of Gain (Loss) Recognized Income on Derivative |   |
|--------------------------------------------------------------------|---------------------------------------------------------|--------|-------------------------------------------------------|--------|--------|-------------------------------------------------------|--------|
|                                                               |                                                    |   | Three Months Ended September 30, 2011                 |   |   | Nine Months Ended September 30, 2011                  |   |
| Interest rate contracts                                            | Other income                                            |   | $                                                     | (95    | )      |                                                  | $      | (93 | ) |
|                                                               |                                                    |   |                                                  |   |   |                                                  |   |   |   |
| Derivatives Not Designated as Hedging Instruments under ASC 815-10 | Location of Gain (Loss) Recognized Income on Derivative |   | Amount of Gain (Loss) Recognized Income on Derivative |   |   | Amount of Gain (Loss) Recognized Income on Derivative |   |
|                                                               |                                                    |   | Three Months Ended September 30, 2010                 |   |   | Nine Months Ended September 30, 2010                  |   |
| Interest rate contracts                                            | Other income                                            |   | $                                                     | (24    | )      |                                                  | $      | (237 | ) |

----

----

----

|                                        |   |       |    | Fair Value Measurements Using                                  |   |
|---------------------------------------------|--------|------------|---------|----------------------------------------------------------------|--------|
| September 30, 2011                          |   | Fair Value |    | Quoted Prices in Active Markets for Identical Assets (Level 1) |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
| Available for sale securities:              |   |       |    |                                                           |   |   |   |   |   |   |
| U.S. Government-sponsored agency securities |   | $          | 117     |                                                           |   |   | $ | 117 |   |   |   |   |
| State and municipal                         |   |       | 140,000 |                                                           |   |   |   | 121,289 |   |   | $ | 18,711 |   |
| Mortgage-backed securities                  |   |       | 354,465 |                                                           |   |   |   | 354,465 |   |   |   |   |   |
| Corporate obligations                       |   |       | 196     |                                                           |   |   |   |   |   |   |   | 196 |   |
| Equity securities                           |   |       | 1,830   |                                                           |   |   |   | 1,826 |   |   |   | 4 |   |
| Interest rate swap asset                    |   |       | 5,308   |                                                           |   |   |   |   |   |   |   | 5,308 |   |
| Interest rate cap                           |   |       | 456     |                                                           |   |   |   |   |   |   |   | 456 |   |
| Interest rate swap liability                |   |       | (7,331  | )                                                              |   |   |   |   |   |   |   | (7,331 | ) |

|                                   |   |       |    | Fair Value Measurements Using                                  |   |
|---------------------------------------------|--------|------------|---------|----------------------------------------------------------------|--------|
| December 31, 2010                           |   | Fair Value |    | Quoted Prices in Active Markets for Identical Assets (Level 1) |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
| Available for sale securities:              |   |       |    |                                                           |   |   |   |   |   |   |
| 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 | ) |

|                                            |   | Three Months Ended September 30, 2011 |   |   | Nine Months Ended September 30, 2011 |   |
|-------------------------------------------------|--------|---------------------------------------|--------|--------|--------------------------------------|--------|
|                                            |   | Available for Sale Securities         |   |   | Interest Rate Swap Asset             |   |   | Interest Rate Cap |   |   | Interest Rate Swap Liability |   |   | Available for Sale Securities |   |   | Interest Rate Swap Asset |   |   | Interest Rate Cap |   |   | Interest Rate Swap Liability |   |
| Balance at beginning of the period              |   | $                                     | 180    |   |                                 | $      | 3,783 |   |   | $ | 954 |   |   | $ | (3,986 | ) |   | $ | 186 |   |   | $ | 4,002 |   |   | $ | 1,109 |   |   | $ | (3,876 | ) |
| Total realized and unrealized gains and losses: |   |                                  |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Included in net income (loss)                   |   |                                  |   |   |                                 |   | 3,251 |   |   |   |   |   |   |   | (3,345 | ) |   |   | (400 | ) |   |   | 3,363 |   |   |   |   |   |   |   | (3,455 | ) |
| Included in other comprehensive income          |   |                                  | (45    | )      |                                 |   | (1,726 | ) |   |   | (498 | ) |   |   |   |   |   |   | 195 |   |   |   | (2,057 | ) |   |   | (653 | ) |   |   |   |   |
| Purchases, issuances and settlements            |   |                                  |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Transfers in/(out) of Level 3                   |   |                                  | 18,711 |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   | 18,711  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Principal payments                              |   |                                  | 65     |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   | 219 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance at September 30, 2011            |   | $                                     | 18,911 |   |                                 | $      | 5,308 |   |   | $ | 456 |   |   | $ | (7,331 | ) |   | $ | 18,911 |   |   | $ | 5,308 |   |   | $ | 456 |   |   | $ | (7,331 | ) |

|                                            |   | Three Months Ended September 30, 2010 |   |   | Nine Months Ended September 30, 2010 |   |
|-------------------------------------------------|--------|---------------------------------------|--------|--------|--------------------------------------|--------|
|                                            |   | Available for Sale Securities         |   |   | Interest Rate Swap Asset             |   |   | Interest Rate Swap Liability |   |   | Available for Sale Securities |   |   | Interest Rate Swap Asset |   |   | Interest Rate Swap Liability |   |
| Balance at beginning of the period              |   | $                                     | 1,431  |   |                                 | $      | 3,924 |   |   | $ | (4,161 | ) |   | $ | 2,483 |   |   | $ | 2,624 |   |   | $ | (2,648 | ) |
| Total realized and unrealized gains and losses: |   |                                  |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Included in net income (loss)                   |   |                                  | (656   | )      |                                 |   | 767 |   |   |   | (791 | ) |   |   | (1,544 | ) |   |   | 2,067 |   |   |   | (2,304 | ) |
| Included in other comprehensive income          |   |                                  | 213    |   |                                 |   |   |   |   |   |   |   |   |   | (111 | ) |   |   |   |   |   |   |   |   |
| Purchases, issuances and settlements            |   |                                  |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Transfers in/(out) of Level 3                   |   |                                  |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Principal payments                              |   |                                  | 78     |   |                                 |   |   |   |   |   |   |   |   |   | 238 |   |   |   |   |   |   |   |   |   |
| Ending balance at September 30, 2010            |   | $                                     | 1,066  |   |                                 | $      | 4,691 |   |   | $ | (4,952 | ) |   | $ | 1,066 |   |   | $ | 4,691 |   |   | $ | (4,952 | ) |

----

|                                           |   |       |   | Fair Value Measurements Using                                  |                                          |
|------------------------------------------------|--------|------------|--------|----------------------------------------------------------------|-----------------------------------------------|
| September 30, 2011                             |   | Fair Value |   | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) |   | Significant Unobservable Inputs (Level 3) |   |
| Impaired loans                                 |   | $          | 29,298 |                                                           |                                          |   |   | $ | 29,298 |   |
| Other real estate owned (collateral dependent) |   | $          | 8,320  |                                                           |                                          |   |   | $ | 8,320 |   |

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

----

|                                                           |   | September 30, 2011 |      |   | December 31, 2010 |   |
|----------------------------------------------------------------|--------|--------------------|-----------|--------|-------------------|--------|
|                                                           |   | Carrying Amount    |      |   | Fair Value        |   |   | Carrying Amount |   |   | Fair Value |   |
| Assets:                                                        |   |               |      |   |              |   |   |   |   |   |   |   |
| Cash and due from banks                                        |   | $                  | 60,166    |   |              | $      | 60,166 |   |   | $ | 50,844 |   |   | $ | 50,844 |   |
| Federal funds sold                                             |   |               |      |   |              |   |   |   |   |   | 7,463 |   |   |   | 7,463 |   |
| Interest-bearing time deposits                                 |   |               | 16,115    |   |              |   | 16,115 |   |   |   | 65,216 |   |   |   | 65,216 |   |
| Investment securities available for sale                       |   |               | 496,608   |   |              |   | 496,608 |   |   |   | 539,370 |   |   |   | 539,370 |   |
| Investment securities held to maturity                         |   |               | 441,220   |   |              |   | 452,948 |   |   |   | 287,427 |   |   |   | 286,270 |   |
| Mortgage loans held for sale                                   |   |               | 12,257    |   |              |   | 12,257 |   |   |   | 21,469 |   |   |   | 21,469 |   |
| Loans                                                          |   |               | 2,639,864 |   |              |   | 2,659,242 |   |   |   | 2,752,706 |   |   |   | 2,715,924 |   |
| Federal Reserve Bank and Federal Home Loan Bank stock          |   |               | 31,381    |   |              |   | 31,381 |   |   |   | 33,884 |   |   |   | 33,884 |   |
| Interest Rate Swap Asset                                       |   |               | 5,764     |   |              |   | 5,764 |   |   |   | 5,111 |   |   |   | 5,111 |   |
| Interest receivable                                            |   |               | 17,770    |   |              |   | 17,770 |   |   |   | 18,674 |   |   |   | 18,674 |   |
| Liabilities:                                                   |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                       |   | $                  | 3,064,250 |   |              | $      | 3,070,271 |   |   | $ | 3,268,880 |   |   | $ | 3,280,489 |   |
| Borrowings:                                                    |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Federal funds purchased                                        |   |               | 27,946    |   |              |   | 27,946 |   |   |   |   |   |   |   |   |   |
| Securities sold under repurchase agreements                    |   |               | 117,097   |   |              |   | 117,597 |   |   |   | 109,871 |   |   |   | 110,494 |   |
| Federal Home Loan Bank advances                                |   |               | 168,764   |   |              |   | 172,688 |   |   |   | 82,684 |   |   |   | 87,463 |   |
| Subordinated debentures, revolving credit lines and term loans |   |               | 194,961   |   |              |   | 141,883 |   |   |   | 226,440 |   |   |   | 176,259 |   |
| Interest Rate Swap Liability                                   |   |               | 7,331     |   |              |   | 7,331 |   |   |   | 3,876 |   |   |   | 3,876 |   |
| Interest Payable                                               |   |               | 2,186     |   |              |   | 2,186 |   |   |   | 4,262 |   |   |   | 4,262 |   |

----

| Risk-free interest rate                        | 2.74%                                                                        |   |
|------------------------------------------------|------------------------------------------------------------------------------|--------|
| Expected price volatility                      | 45.53%                                                                       |   |
| Dividend yield                                 | 3.65%                                                                        |   |
| Forfeiture rate                                | 5.00%                                                                        |   |
| Weighted-average expected life, until exercise |            6.91 years |

----

|                                                        |   | Three Months Ended |   |   | Nine Months Ended |   |
|-------------------------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                                                        |   | September 30,      |   |   | September 30,     |   |
|                                                        |   | 2011               |   |   | 2010              |   |   | 2011 |   |   | 2010 |   |
| Stock and ESPP Options                                      |   |               |   |   |              |   |   |   |   |   |   |   |
| Pre-tax compensation expense                                |   | $                  | 56     |   |              | $      | 143 |   |   | $ | 165 |   |   | $ | 487 |   |
| Income tax benefit                                          |   |               | (7     | )      |              |   | (20 | ) |   |   | (8 | ) |   |   | (51 | ) |
| Stock and ESPP option expense, net of income taxes          |   | $                  | 49     |   |              | $      | 123 |   |   | $ | 157 |   |   | $ | 436 |   |
| Restricted Stock Awards                                     |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Pre-tax compensation expense                                |   | $                  | 234    |   |              | $      | 294 |   |   | $ | 844 |   |   | $ | 882 |   |
| Income tax benefit                                          |   |               | (76    | )      |              |   | (103 | ) |   |   | (289 | ) |   |   | (309 | ) |
| Restricted stock awards expense, net of income taxes        |   | $                  | 158    |   |              | $      | 191 |   |   | $ | 555 |   |   | $ | 573 |   |
| Total Share-Based Compensation:                             |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Pre-tax compensation expense                                |   | $                  | 290    |   |              | $      | 437 |   |   | $ | 1,009 |   |   | $ | 1,369 |   |
| Income tax benefit                                          |   |               | (83    | )      |              |   | (123 | ) |   |   | (297 | ) |   |   | (360 | ) |
| Total share-based compensation expense, net of income taxes |   | $                  | 207    |   |              | $      | 314 |   |   | $ | 712 |   |   | $ | 1,009 |   |

|                                              |   | Number of Shares |      |   | Weighted-Average Exercise Price |   |   | Weighted Average Remaining Contractual Term (in Years) |   |   | Aggregate Intrinsic Value |   |
|---------------------------------------------------|--------|------------------|-----------|--------|---------------------------------|--------|--------|--------------------------------------------------------|--------|--------|---------------------------|--------|
| Outstanding at January 1, 2011                    |   |             | 1,061,429 |   |                            | $      | 23.01  |                                                   |   |   |                      |   |   |   |
| Granted/ Converted                                |   |             | 52,298    |   |                            | $      | 9.14   |                                                   |   |   |                      |   |   |   |
| Cancelled                                         |   |             | (75,291   | )      |                            | $      | 20.46  |                                                   |   |   |                      |   |   |   |
| Outstanding September 30, 2011                    |   |             | 1,038,436 |   |                            | $      | 22.51  |                                                   |   |   | 4.63                      |   |   |   | 39,730 |   |
| Vested and Expected to Vest at September 30, 2011 |   |             | 1,038,436 |   |                            | $      | 22.55  |                                                   |   |   | 4.63                      |   |   |   | 39,730 |   |
| Exercisable at September 30, 2011                 |   |             | 956,686   |   |                            | $      | 23.81  |                                                   |   |   | 4.25                      |   |   |   | 0 |   |

----

|                                |   | Number of Shares |    |   | Weighted-Average Grant Date Fair Value |   |
|-------------------------------------|--------|------------------|---------|--------|----------------------------------------|--------|
| Unvested RSAs at January 1, 2011    |   |             | 272,737 |   |                                   | $      | 12.46 |   |
| Granted                             |   |             | 136,933 |   |                                   | $      | 8.93 |   |
| Forfeited                           |   |             | (5,135  | )      |                                   | $      | 8.83 |   |
| Vested                              |   |             | (70,543 | )      |                                   | $      | 23.37 |   |
| Unvested RSAs at September 30, 2011 |   |             | 333,992 |   |                                   | $      | 8.74 |   |

|                                                       |   | 2011   |   |   | 2010   |   |
|------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Income Tax Expense for the Nine Months Ended September 30: |   |   |   |   |   |   |
| Currently Payable:                                         |   |   |   |   |   |   |
| Federal                                                    |   | $      | (855   | )      |   | $      | (19,905 | ) |
| State                                                      |   |   |   |   |   |   | (378 | ) |
| Deferred:                                                  |   |   |   |   |   |   |   |   |
| Federal                                                    |   |   | 7,211  |   |   |   | 16,531 |   |
| State                                                      |   |   |   |   |   |   | 378 |   |
| Total Income Tax Expense                                   |   | $      | 6,356  |   |   | $      | (3,374 | ) |
|                                                       |   |   |   |   |   |   |   |   |
| Reconciliation of Federal Statutory to Actual Tax Expense: |   |   |   |   |   |   |   |   |
| Federal Statutory income Tax at 35%                        |   | $      | 8,416  |   |   | $      | (173 | ) |
| Tax-exempt Interest Income                                 |   |   | (2,793 | )      |   |   | (2,935 | ) |
| Non-deductible Interest Expense                            |   |   | 649    |   |   |   | 212 |   |
| Stock Compensation                                         |   |   | 56     |   |   |   | 119 |   |
| Earnings on Life Insurance                                 |   |   | (610   | )      |   |   | (551 | ) |
| Tax Credits                                                |   |   | (55    | )      |   |   | (85 | ) |
| Other                                                      |   |   | 693    |   |   |   | 39 |   |
| Actual Tax Expense                                         |   | $      | 6,356  |   |   | $      | (3,374 | ) |

----

|                                                 |   | Three Months Ended September 30, |    |
|------------------------------------------------------|--------|----------------------------------|---------|
|                                                 |   | 2011                             |    |   | 2010 |   |
|                                                 |   | Net Income (Loss)                |    |   | Weighted-Average Shares |   |   | Per Share Amount |   |   | Net Income |   |   | Weighted-Average Shares |   |   | Per Share Amount |   |
| Basic net income per share:                          |   | $                                | 6,742   |   |   |   |   |   |   |   |   | $ | 1,635 |   |   |   |   |   |   |   |
| Loss on extinguishment of trust preferred securities |   |                             | (10,857 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss on CPP unamortized discount                     |   |                             | (1,401  | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred Stock dividends and discount accretion     |   |                             | (868    | ) |   |   |   |   |   |   |   |   | (870 | ) |   |   |   |   |   |   |
| Net income (loss) available to common stockholders   |   |                             | (6,384  | ) |   |   | 26,367,067 |   |   | $ | (0.25 | ) |   |   | 765 |   |   |   | 25,550,222 |   |   | $ | 0.02 |   |
| Effect of dilutive stock options and warrants        |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 135,316 |   |   |   |   |   |
| Diluted net income (loss) per share:                 |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) available to common stockholders   |   | $                                | (6,384  | ) |   |   | 26,367,067 |   |   | $ | (0.25 | ) |   | $ | 765 |   |   |   | 25,685,538 |   |   | $ | 0.02 |   |

|                                                         |   | Nine Months Ended September 30, |    |
|--------------------------------------------------------------|--------|---------------------------------|---------|
|                                                         |   | 2011                            |    |   | 2010 |   |
|                                                         |   | Net Income                      |    |   | Weighted-Average Shares |   |   | Per Share Amount |   |   | Net Income |   |   | Weighted-Average Shares |   |   | Per Share Amount |   |
| Basic net income per share:                                  |   | $                               | 17,691  |   |   |   |   |   |   |   |   | $ | 2,878 |   |   |   |   |   |   |   |
| Gain on exchange of preferred stock for trust preferred debt |   |                            |    |   |   |   |   |   |   |   |   |   | 10,052 |   |   |   |   |   |   |   |
| Loss on extinguishment of trust preferred securities         |   |                            | (10,857 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss on CPP unamortized discount                             |   |                            | (1,401  | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less: Preferred Stock dividends and discount accretion       |   |                            | (2,846  | ) |   |   |   |   |   |   |   |   | (3,763 | ) |   |   |   |   |   |   |
| Net income available to common stockholders                  |   |                            | 2,587   |   |   |   | 25,879,277 |   |   | $ | 0.10 |   |   |   | 9,167 |   |   |   | 24,164,224 |   |   | $ | 0.38 |   |
| Effect of dilutive stock options and warrants                |   |                            |    |   |   |   | 139,659 |   |   |   |   |   |   |   |   |   |   |   | 108,666 |   |   |   |   |   |
| Diluted net income per share:                                |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income available to common stockholders                  |   | $                               | 2,587   |   |   |   | 26,018,936 |   |   | $ | 0.10 |   |   | $ | 9,167 |   |   |   | 24,272,890 |   |   | $ | 0.38 |   |

----

----

----

----

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

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

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

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

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

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

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

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

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

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

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

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

----

----

| ·   | 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. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                               |   | Three Months Ended |      |   | Nine Months Ended |   |
|--------------------------------------------------------------------|--------|--------------------|-----------|--------|-------------------|--------|
|                                                               |   | September 30,      |      |   | September 30,     |   |
| (Dollars in thousands)                                             |   | 2011               |      |   | 2010              |   |   | 2011 |   |   | 2010 |   |
| Annualized net interest income                                     |   | $                  | 143,402   |   |              | $      | 142,731 |   |   | $ | 142,900 |   |   | $ | 144,102 |   |
| Annualized FTE adjustment                                          |   | $                  | 5,633     |   |              | $      | 6,130 |   |   | $ | 5,781 |   |   | $ | 6,152 |   |
| Annualized net interest income on a fully taxable equivalent basis |   | $                  | 149,035   |   |              | $      | 148,861 |   |   | $ | 148,681 |   |   | $ | 150,254 |   |
| Average earning assets                                             |   | $                  | 3,714,401 |   |              | $      | 3,790,904 |   |   | $ | 3,736,503 |   |   | $ | 3,871,484 |   |
| Interest income (FTE) as a percent of average earning assets       |   |               | 5.01      | %      |              |   | 5.38 | % |   |   | 5.05 | % |   |   | 5.38 | % |
| Interest expense as a percent of average earning assets            |   |               | 0.99      | %      |              |   | 1.45 | % |   |   | 1.07 | % |   |   | 1.50 | % |
| Net interest income (FTE) as a percent of average earning assets   |   |               | 4.02      | %      |              |   | 3.93 | % |   |   | 3.98 | % |   |   | 3.88 | % |

----

----

|                                               |   | September 30, 2011 |    |   | December 31, 2010 |   |
|----------------------------------------------------|--------|--------------------|---------|--------|-------------------|--------|
| (Dollars in thousands)                             |   | Amount             |    |   | Ratio             |   |   | Amount |   |   | Ratio |   |
| Consolidated                                       |   |               |    |   |              |   |   |   |   |   |   |   |
| Total risk-based capital (to risk-weighted assets) |   | $                  | 479,785 |   |              |   | 16.21 | % |   | $ | 476,490 |   |   |   | 15.74 | % |
| Tier 1 capital (to risk-weighted assets)           |   |               | 402,350 |   |              |   | 13.60 | % |   |   | 388,090 |   |   |   | 12.82 | % |
| Tier 1 capital (to average assets)                 |   |               | 402,350 |   |              |   | 10.20 | % |   |   | 388,090 |   |   |   | 9.50 | % |
|                                               |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| First Merchants Bank                               |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Total risk-based capital (to risk-weighted assets) |   | $                  | 470,344 |   |              |   | 15.96 | % |   | $ | 450,629 |   |   |   | 14.89 | % |
| Tier 1 capital (to risk-weighted assets)           |   |               | 433,275 |   |              |   | 14.79 | % |   |   | 412,654 |   |   |   | 13.64 | % |
| Tier 1 capital (to average assets)                 |   |               | 433,275 |   |              |   | 11.01 | % |   |   | 412,654 |   |   |   | 10.14 | % |

----

|                                                                         |   | September 30, |      |   | December 31, |   |
|------------------------------------------------------------------------------|--------|---------------|-----------|--------|--------------|--------|
| (Dollars in thousands, except per share amounts)                             |   | 2011          |      |   | 2010         |   |
| Average goodwill                                                             |   | $             | 141,357   |   |         | $      | 141,357 |   |
| Average core deposit intangible (CDI)                                        |   |          | 11,074    |   |         |   | 15,026 |   |
| Average deferred tax on CDI                                                  |   |          | (2,534    | )      |         |   | (3,385 | ) |
| Intangible adjustment                                                        |   | $             | 149,897   |   |         | $      | 152,998 |   |
| Average stockholders' equity (GAAP capital)                                  |   | $             | 466,671   |   |         | $      | 470,379 |   |
| Average cumulative preferred stock issued under the Capital Purchase Program |   |          | (68,829   | )      |         |   | (89,847 | ) |
| Intangible adjustment                                                        |   |          | (149,897  | )      |         |   | (152,998 | ) |
| Average tangible capital                                                     |   | $             | 247,945   |   |         | $      | 227,534 |   |
| Average assets                                                               |   | $             | 4,124,696 |   |         | $      | 4,271,715 |   |
| Intangible adjustment                                                        |   |          | (149,897  | )      |         |   | (152,998 | ) |
| Average tangible assets                                                      |   | $             | 3,974,799 |   |         | $      | 4,118,717 |   |
| Net income available to common stockholders                                  |   | $             | 2,587     |   |         | $      | 11,722 |   |
| CDI amortization, net of tax                                                 |   |          | 1,771     |   |         |   | 2,852 |   |
| Tangible net income available to common stockholders                         |   | $             | 4,358     |   |         | $      | 14,574 |   |
|   Diluted earnings per share                                       |   | $             | 0.10      |   |         | $      | 0.48 |   |
| Diluted tangible earnings per share                                          |   | $             | 0.17      |   |         | $      | 0.60 |   |
| Return on average GAAP capital                                               |   |          | 0.74      | %      |         |   | 2.49 | % |
| Return on average tangible capital                                           |   |          | 2.34      | %      |         |   | 6.40 | % |
| Return on average assets                                                     |   |          | 0.08      | %      |         |   | 0.27 | % |
| Return on average tangible assets                                            |   |          | 0.15      | %      |         |   | 0.35 | % |

----

|                                     |   | September 30, |    |   | December 31, |   |
|------------------------------------------|--------|---------------|---------|--------|--------------|--------|
| (Dollars in thousands)                   |   | 2011          |    |   | 2010         |   |
| Non-Performing Assets:                   |   |          |    |   |         |   |
| Non-accrual loans                        |   | $             | 78,933  |   |         | $      | 90,591 |   |
| Renegotiated loans                       |   |          | 6,701   |   |         |   | 7,139 |   |
| Non-performing loans (NPL)               |   |          | 85,634  |   |         |   | 97,730 |   |
| Real estate owned and repossessed assets |   |          | 19,425  |   |         |   | 20,927 |   |
| Non-performing assets (NPA)              |   |          | 105,059 |   |         |   | 118,657 |   |
| 90+ days delinquent and still accruing   |   |          | 1,595   |   |         |   | 1,330 |   |
| NPAs & 90+ days delinquent           |   | $             | 106,654 |   |         | $      | 119,987 |   |
| Impaired Loans                           |   | $             | 87,772  |   |         | $      | 116,204 |   |

|                                                             |   | September 30, |    |   | December 31, |   |
|------------------------------------------------------------------|--------|---------------|---------|--------|--------------|--------|
| (Dollars in thousands)                                           |   | 2011          |    |   | 2010         |   |
| Non Performing Assets and 90+ Days Delinquent:                   |   |          |    |   |         |   |
| Commercial and industrial loans                                  |   | $             | 16,253  |   |         | $      | 10,499 |   |
| Agricultural production financing and other loans to farmers     |   |          | 304     |   |         |   | 544 |   |
| Real estate loans:                                               |   |          |    |   |         |   |   |   |
| Construction                                                     |   |          | 17,487  |   |         |   | 28,907 |   |
| Commercial and farm land                                         |   |          | 50,202  |   |         |   | 54,297 |   |
| Residential                                                      |   |          | 21,664  |   |         |   | 25,339 |   |
| Individual's loans for household and other personal expenditures |   |          | 162     |   |         |   | 401 |   |
| Other loans                                                      |   |          | 582     |   |         |   |   |   |
| Non performing assets plus 90+ days delinquent                   |   | $             | 106,654 |   |         | $      | 119,987 |   |

----

|                                                             |   | Three Months Ended |   |   | Nine Months Ended |   |
|------------------------------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                                                             |   | September 30,      |   |   | September 30,     |   |
| (Dollars in thousands)                                           |   | 2011               |   |   | 2010              |   |   | 2011 |   |   | 2010 |   |
| Net Charge Offs:                                                 |   |               |   |   |              |   |   |   |   |   |   |   |
| Commercial and industrial loans                                  |   | $                  | 3,238  |   |              | $      | (134 | ) |   | $ | (1,682 | ) |   | $ | 13,983 |   |
| Agricultural production financing and other loans to farmers     |   |               | (68    | )      |              |   | 366 |   |   |   | (224 | ) |   |   | 1,008 |   |
| Real estate loans                                                |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Construction                                                     |   |               | 640    |   |              |   | 14 |   |   |   | 5,830 |   |   |   | 2,845 |   |
| Commercial and farm land                                         |   |               | 3,985  |   |              |   | 9,891 |   |   |   | 17,658 |   |   |   | 22,478 |   |
| Residential                                                      |   |               | 1,720  |   |              |   | 3,241 |   |   |   | 4,710 |   |   |   | 6,405 |   |
| Individual's loans for household and other personal expenditures |   |               | 103    |   |              |   | 453 |   |   |   | 398 |   |   |   | 1,103 |   |
| Lease financing receivables, net of unearned income              |   |               | (1     | )      |              |   |   |   |   |   | (4 | ) |   |   | 54 |   |
| Other Loans                                                      |   |               | (2     | )      |              |   |   |   |   |   | (8 | ) |   |   |   |   |
| Total Net Charge Offs                                            |   | $                  | 9,615  |   |              | $      | 13,831 |   |   | $ | 26,678 |   |   | $ | 47,876 |   |

----

|                              |   | September 30, |    |
|-----------------------------------|--------|---------------|---------|
| (Dollars in thousands)            |   | 2011          |    |
| Amounts of commitments:           |   |          |    |
| Loan commitments to extend credit |   | $             | 655,477 |   |
| Standby letters of credit         |   |          | 21,624  |   |
|                              |   | $             | 677,101 |   |

----

| (Dollars in thousands)                                         |   | 2011 Remaining |    |   | 2012   |   |    | 2013   |   |   | 2014   |   |   | 2015   |   |   | 2016   |   |   | 2017 and after |   |   | Total  |   |
|----------------------------------------------------------------|--------|----------------|---------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|----------------|--------|--------|--------|--------|
| Operating leases                                               |   | $              | 542     |   |   | $      | 2,108   |   |   | $      | 1,848  |   |   | $      | 1,708  |   |   | $      | 1,534  |           |   | $      | 1,166  |   |   | $ | 741 |   |   | $ | 9,647 |   |
| Federal funds purchased                                        |   |           | 27,946  |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |           |   |   |   |   |   |   |   |   |   |   | 27,946 |   |
| Securities sold under repurchase agreements                    |   |           | 92,847  |   |   |   | 14,250  |   |   |   |   |   |   |   | 10,000 |   |   |   |   |           |   |   |   |   |   |   |   |   |   |   | 117,097 |   |
| Federal Home Loan Bank advances                                |   |           | 55,500  |   |   |   | 49,862  |   |   |   | 219    |   |   |   | 1,207  |   |   |   | 27,000 |           |   |   | 29,095 |   |   |   | 5,881 |   |   |   | 168,764 |   |
| Subordinated debentures, revolving credit lines and term loans |   |           | 143     |   |   |   | 78,992  |   |   |   |   |   |   |   |   |   |   |   | 55,000 |           |   |   |   |   |   |   | 60,826 |   |   |   | 194,961 |   |
| Total                                                          |   | $              | 176,978 |   |   | $      | 145,212 |   |   | $      | 2,067  |   |   | $      | 12,915 |   |   | $      | 83,534 |           |   | $      | 30,261 |   |   | $ | 67,448 |   |   | $ | 518,415 |   |

----

|           | At September 30, 2011 |
|----------------|-----------------------|
|           | RISING                | FALLING |
| Driver Rates   | (200 Basis Points)    | (100 Basis Points) |
| Prime          | 200                   | 0 |
| Federal Funds  | 200                   | 0 |
| One-Year CMT   | 200                   |                                 (2) |
| Three-Year CMT | 200                   |                       (6) |
| Five-Year CMT  | 200                   | 0 |
| CD's           | 200                   |                        (49) |
| FHLB Advances  | 200                   | 0 |

|                        |   | At September 30, 2011 |    |
|-----------------------------|--------|-----------------------|---------|
|                        |   |                  |    |   | RISING |   |   | FALLING |   |
| Driver Rates                |   | Base                  |    |   | (200 Basis Points) |   |   | (100 Basis Points) |   |
| Net Interest Income         |   | $                     | 142,697 |   |   | $ | 143,908 |   |   | $ | 137,073 |   |
| Variance from Base          |   |                  |    |   |   | $ | 1,211 |   |   | $ | (5,624 | ) |
| Percent of change from base |   |                  |    |   |   |   | 0.85 | % |   |   | -3.94 | % |
| Policy Limit                |   |                  |    |   |   |   | -5.00 | % |   |   | -2.00 | % |

|           | 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 Advances  | 200                  |                               (47) |

|                        |   | At December 31, 2010 |    |
|-----------------------------|--------|----------------------|---------|
|                        |   |                 |    |   | RISING |   |   | FALLING |   |
| Driver Rates                |   | 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 |   |                 |    |   |   |   | 1.99 | % |   |   | -2.62 | % |
| Policy Limit                |   |                 |    |   |   |   | -5.00 | % |   |   | -2.00 | % |

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EARNING ASSETS

|                                             |   | September 30, |      |   | December 31, |   |
|--------------------------------------------------|--------|---------------|-----------|--------|--------------|--------|
| (Dollars in thousands)                           |   | 2011          |      |   | 2010         |   |
| Federal funds sold                               |   | $             |      |   |         | $      | 7,463 |   |
| Interest-bearing time deposits                   |   |          | 16,115    |   |         |   | 65,216 |   |
| Investment securities available for sale         |   |          | 496,608   |   |         |   | 539,370 |   |
| Investment securities held to maturity           |   |          | 441,220   |   |         |   | 287,427 |   |
| Mortgage loans held for sale                     |   |          | 12,257    |   |         |   | 21,469 |   |
| Loans                                            |   |          | 2,712,938 |   |         |   | 2,835,683 |   |
| Federal Reserve and Federal Home Loan Bank stock |   |          | 31,381    |   |         |   | 33,884 |   |
| Total                                            |   | $             | 3,710,519 |   |         | $      | 3,790,512 |   |

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 4. CONTROLS AND PROCEDURES

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ITEM 1. LEGAL PROCEEDINGS

ITEM 1.A. RISK FACTORS

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

| Period          |   | Total Number of Shares Purchased |   |   | Average Price Paid per Share |   |   | Total Number of Shares Purchased as part of Publicly announced Plans or Programs |   |   | Maximum Number of Shares that may yet be Purchased Under the Plans or Programs |   |
|-----------------|--------|----------------------------------|--------|--------|------------------------------|--------|--------|----------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------|--------|
| July, 2011      |   |                             | 51     |   |                         | $      | 9.04   |                                                                             |   |   | 0                                                                              |   |   |   | 0 |   |
| August, 2011    |   |                             |   |   |                         |   |   |                                                                             |   |   | 0                                                                              |   |   |   | 0 |   |
| September, 2011 |   |                             | 204    |   |                         | $      | 9.22   |                                                                             |   |   | 0                                                                              |   |   |   | 0 |   |

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

ITEM 4. [RESERVED]

ITEM 5. OTHER INFORMATION

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ITEM 6.  EXHIBITS.

| 3.1     | First Merchants Corporation Articles of Incorporation, as amended (1)                                                                                                                                                                                        |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 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     | 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)                                                                                |
| 4.6     | 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)                                                              |
| 10.1    | First Merchants Corporation Share Purchase Agreement with Castle Creek Capital Partners IV, L.P. and Endicott Opportunity Partners III, L.P. dated September 9, 2011 (Incorporated by reference to registrant’s Form 8-K filed on September 13, 2011)  |
| 10.2    | First Merchants Corporation Securities Purchase Agreement with the U.S. Department of Treasury, with respect to the Series B Preferred Stock dated September 22, 2011 (Incorporated by reference to registrant’s Form 8-K filed on September 23, 2011) |
| 10.3    | First Merchants Corporation Repurchase Letter with the U.S. Department of Treasury, with respect to the Designated Preferred Stock dated September 23, 2011 (Incorporated by reference to registrant’s Form 8-K filed on September 23, 2011)           |
| 10.4    | First Merchants Corporation Repurchase Letter with the U.S. Department of Treasury, with respect to the Capital Securities dated September 22, 2011 (Incorporated by reference to registrant’s Form 8-K filed on September 23, 2011)                   |
| 31.1    | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002 (1)                                                                                                                                                     |
| 31.2    | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002 (1)                                                                                                                                                     |
| 32      | Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1)                                                                                                                                  |
| 101.INS | XBRL Instance Document (2)                                                                                                                                                                                                                                   |
| 101.SCH | XBRL Taxonomy Extension Schema Document (2)                                                                                                                                                                                                                  |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document (2)                                                                                                                                                                                                    |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document (2)                                                                                                                                                                                                     |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document (2)                                                                                                                                                                                                          |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document (2)                                                                                                                                                                                                   |
|    |  (1) Filed herewith.                                                                                                                                                                                                                                    |
|    |  (2) Furnished herewith.                                                                                                                                                                                                                                |

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SIGNATURES

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INDEX TO EXHIBITS

| 3.1     | First Merchants Corporation Articles of Incorporation, as amended (1)                                                                                                                                                                                        |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 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     | 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)                                                                                |
| 4.6     | 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)                                                              |
| 10.1    | First Merchants Corporation Share Purchase Agreement with Castle Creek Capital Partners IV, L.P. and Endicott Opportunity Partners III, L.P. dated September 9, 2011 (Incorporated by reference to registrant’s Form 8-K filed on September 13, 2011)  |
| 10.2    | First Merchants Corporation Securities Purchase Agreement with the U.S. Department of Treasury, with respect to the Series B Preferred Stock dated September 22, 2011 (Incorporated by reference to registrant’s Form 8-K filed on September 23, 2011) |
| 10.3    | First Merchants Corporation Repurchase Letter with the U.S. Department of Treasury, with respect to the Designated Preferred Stock dated September 23, 2011 (Incorporated by reference to registrant’s Form 8-K filed on September 23, 2011)           |
| 10.4    | First Merchants Corporation Repurchase Letter with the U.S. Department of Treasury, with respect to the Capital Securities dated September 22, 2011 (Incorporated by reference to registrant’s Form 8-K filed on September 23, 2011)                   |
| 31.1    | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002 (1)                                                                                                                                                     |
| 31.2    | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002 (1)                                                                                                                                                     |
| 32      | Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1)                                                                                                                                  |
| 101.INS | XBRL Instance Document (2)                                                                                                                                                                                                                                   |
| 101.SCH | XBRL Taxonomy Extension Schema Document (2)                                                                                                                                                                                                                  |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document (2)                                                                                                                                                                                                    |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document (2)                                                                                                                                                                                                     |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document (2)                                                                                                                                                                                                          |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document (2)                                                                                                                                                                                                   |
|    |  (1) Filed herewith.                                                                                                                                                                                                                                    |
|    |  (2) Furnished herewith.                                                                                                                                                                                                                                |

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| Name               | Number and Street or Building | City       | State  | Zip Code |
|--------------------|-------------------------------|------------|--------|----------|
|               |                          |       |   |     |
| Stefan S. Anderson | 2705 W. Twickingham Drive     | Muncie     | IN     | 47304    |
| Thomas F. Bluemle  | 1900 N. Brentwood Lane        | Muncie     | IN     | 47304    |
| Frank A. Bracken   | 1011 E. Parkway Drive         | Muncie     | IN     | 47304    |
| Clell W. Douglass  | 305 Normandy Drive            | Muncie     | IN     | 47304    |
| David A. Galliher  | 2500 W. Berwyn Road           | Muncie     | IN     | 47304    |
| William P. Givens  | 1209 W. Beechwood Avenue      | Muncie     | IN     | 47303    |
| John W. Hartmeyer  | 818 W. Riverside Avenue       | Muncie     | IN     | 47303    |
| David W. Howell    | Rural Route #2, Box 174       | Middletown | IN     | 47358    |
| Betty J. Kendall   | Rural Route #14, Box 425      | Muncie     | IN     | 47302    |
| Don E. Marsh       | 1250 Warwick Road             | Muncie     | IN     | 47304    |
| Robert H. Mohlman  | 3405 N. Vienna Woods Drive    | Muncie     | IN     | 47304    |
| Robert R. Park     | Rural Route #2, Box 126       | Gaston     | IN     | 47342    |
| Peter L. Roesner   | 2207 W. Wiltshire Road        | Muncie     | IN     | 47304    |
| Hamer D. Shafer    | 3500 W. Gatewood Lane         | Muncie     | IN     | 47304    |
| Robert M. Smitson  | 2601 W. Chelsea Drive         | Muncie     | IN     | 47304    |
| Reed D. Voran      | 2308 W. Wiltshire Road        | Muncie     | IN     | 47304    |

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|   | (ii) | by reason of any past or future action taken or not taken by him in any such capacity, whether or not he continues to be such at the time such liability or expense is incurred. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 1. | Any merger or consolidation of the Corporation or its subsidiary or subsidiaries (as hereinafter defined) with or into either of the following: |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | 10% Shareholders (as hereinafter defined); or |
|--------|-----|-----------------------------------------------|

|   | (b) | Any other corporation (whether or not itself a 10% Shareholder) which, after such merger or consolidation, would be an Affiliate (as hereinafter defined) of a 10% Shareholder. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | Any sale, lease, exchange, transfer or other disposition (including, without limitation, the granting of a mortgage or other security interest) to or with any 10% Shareholder of any material part of the assets of the Corporation or any of its subsidiaries; and |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. | A liquidation or dissolution of the Corporation or any material subsidiary thereof or adoption of any plan with respect thereto. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------|

|   | 4. | Any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its subsidiaries or any other transaction (whether or not with or into or otherwise involving a 10% Shareholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the Corporation or any subsidiary which is directly or indirectly owned by any 10% Shareholder; and |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 5. | Any agreement, contract or other arrangement providing for any one or more of the actions specified in the foregoing clauses (A)1. through (A)4. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1. | "10% Shareholder" shall mean, in respect of any Business Combination, any person (other than the Corporation) who or which, as of the record date for the determination of shareholders entitled to notice of and to vote on such Business Combination or immediately prior to the consummation of any such Business Combination: |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | Is the beneficial owner (as determined in accordance with Rule 13d-3 promulgated by the Securities and Exchange Commission) ("Beneficial Owner"), directly or indirectly, of not less than ten percent (10%) of the Voting Shares; or |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Is an Affiliate (as hereinafter defined) of the Corporation and at any time within two years prior thereto was the Beneficial Owner, directly or indirectly, of not less than ten percent (10%) of the then outstanding Voting Shares; or |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Any individual, corporation, partnership or other person or entity which, together with any of its Affiliates (as hereinafter defined), beneficially owns in the aggregate more than ten percent (10%) of the Voting Shares of the Corporation. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | "Voting Shares" includes: |
|--------|----|---------------------------|

|   | (a) | Any securities of the Corporation which are entitled to vote on any matter referred to in this Section; |
|--------|-----|---------------------------------------------------------------------------------------------------------|

|   | (b) | Any securities, including but not limited to, preferred stock, bonds, debentures, or options, which can be converted into voting securities at the time of the vote referred to in this Section; and |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Security agreements of any nature for which voting securities are pledged as collateral. |
|--------|-----|------------------------------------------------------------------------------------------|

|   | 3. | "Affiliate" shall include all persons who would be defined as affiliates under Rule 12b-2 under the Securities Exchange Act of 1934. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------|

|   | 4. | "Subsidiary" means any corporation of which a majority of any class of equity securities (as defined in Rule 3a 11-1 of the general rules and regulations under the Securities Exchange Act of 1934) are owned, directly or indirectly, by the Corporation; provided, however, that for the purposes of the definition of a 10% Shareholder set forth above, the term "Subsidiary" shall mean only a corporation of which a majority of each class of equity security is owned, directly or indirectly, by the Corporation. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 5. | "Fair Market Value" means: |
|--------|----|----------------------------|

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|   | Text of Amendment |
|--------|-------------------|

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|   | Manner and Date of Adoption |
|--------|-----------------------------|

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| (xxv)   | “Initial Dividend Period” has the meaning set forth in the definition of “Dividend Period”. |
|-------------------|---------------------------------------------------------------------------------------------------------------------|

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| (xliv)   | “Tier 1 Dividend Threshold” means, as of any particular date, the result of the following formula: |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| (c)   | Dividends. |
|-----------------|------------|

| (i)   | Rate. |
|-----------------|-------|

| i.   | The “Applicable Dividend Rate” shall be determined as follows: |
|----------------|----------------------------------------------------------------------------|

| 1.   | With respect to the Initial Dividend Period, the Applicable Dividend Rate shall be five percent (5.0000000%). |
|----------------|---------------------------------------------------------------------------------------------------------------|

| 2.   | With respect to each of the second (2nd) through the tenth (10th) Dividend Periods, inclusive (in each case, the “Current Period”), the Applicable Dividend Rate shall be: |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | With respect to the eleventh (11th) through the eighteenth (18th) Dividend Periods, inclusive, and that portion of the nineteenth (19th) Dividend Period prior to, but not including, the four and one half (4½) year anniversary of the Original Issue Date, the Applicable Dividend Rate shall be: |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a.   | (x) the applicable rate set forth in column “B” of the table in Section 3(a)(iii), based on the Percentage Change in QSBL between the ninth (9th) Dividend Period and the Baseline, multiplied by (y) the Qualifying Portion Percentage, calculated as of the last day of the ninth (9th) Dividend Period; plus |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| b.   | (x) five percent (5%) multiplied by (y) the Non-Qualifying Portion Percentage, calculated as of the last day of the ninth (9th) Dividend Period. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | With respect to (A) that portion of the nineteenth (19th) Dividend Period beginning on the four and one half (4½) year anniversary of the Original Issue Date and (B) all Dividend Periods thereafter, the Applicable Dividend Rate shall be nine percent (9%). |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.   | Notwithstanding anything herein to the contrary, if the Corporation fails to submit a Supplemental Report that is due during any of the second (2nd) through tenth (10th) Dividend Periods on or before the sixtieth (60th) day of such Dividend Period, the Corporation’s QSBL for the Dividend Period that would have been covered by such Supplemental Report shall be zero (0) for purposes hereof. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.   | Notwithstanding anything herein to the contrary, but subject to Section 3(a)(i)(5) above, if the Corporation fails to submit the Supplemental Report that is due during the tenth (10th) Dividend Period, the Corporation’s QSBL shall be zero (0) for purposes of calculating the Applicable Dividend Rate pursuant to Section 3(a)(i)(3) and (4).  The Applicable Dividend Rate shall be re-determined effective as of the first day of the calendar quarter following the date such failure is remedied, provided it is remedied prior to the four and one half (4½) anniversary of the Original Issue Date. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.   | Notwithstanding anything herein to the contrary, if the Corporation fails to submit any of the certificates required by Sections 3.1(d)(ii) or 3.1(d)(iii) of the Definitive Agreement when and as required thereby, the Corporation’s QSBL shall be zero (0) for purposes of calculating the Applicable Dividend Rate pursuant to Section 3(a)(i)(2) or (3) above until such failure is remedied. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (        | ( QSBL for the Dividend Period – Baseline ) | ) |  x  100 |
|----------|---------------------------------------------------|---|------------------------|
| Baseline |

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| iii.   | The following table shall be used for determining the Applicable Dividend Rate: |
|------------------|---------------------------------------------------------------------------------|

|                                              | The Applicable Dividend Rate shall be:    |
|---------------------------------------------------|-------------------------------------------|
|                                              | Column “A”                    | Column “B” |
| If the Percentage Change in Qualified Lending is: | (each of the 2nd - 10th Dividend Periods) | (11th – 18th, and the first part of the 19th, Dividend Periods) |
| 0% or less                                        | 5%                                        | 7% |
| More than 0%, but less than 2.5%                  | 5%                                        | 5% |
| 2.5% or more, but less than 5%                    | 4%                                        | 4% |
| 5% or more, but less than 7.5%                    | 3%                                        | 3% |
| 7.5% or more, but less than 10%                   | 2%                                        | 2% |
| 10% or more                                       | 1%                                        | 1% |

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| (iv)   | Priority of Dividends; Restrictions on Dividends. |
|------------------|---------------------------------------------------|

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| (i)   | Liquidation Rights. |
|-----------------|---------------------|

| (e)   | Redemption. |
|-----------------|-------------|

| (i)   | Optional Redemption. |
|-----------------|----------------------|

| i.   | Subject to the other provisions of this Section 5: |
|----------------|----------------------------------------------------|

| ii.   | The per-share redemption price for shares of Designated Preferred Stock shall be equal to the sum of: |
|-----------------|-------------------------------------------------------------------------------------------------------|

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| (f)   | Conversion.  Holders of Designated Preferred Stock shares shall have no right to exchange or convert such shares into any other securities. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g)   | Voting Rights. |
|-----------------|----------------|

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| (h)   | Restriction on Redemptions and Repurchases. |
|-----------------|---------------------------------------------|

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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