(In thousands, except share and per share data)

June 30, 2004

December 31, 2003

% change

Assets

Cash and due from banks

$ 108,154

$ 111,699

(3)

Federal funds sold and securities purchased

under agreements to resell

27,000

82,000

(67)

Cash and cash equivalents

135,154

193,699

(30)

Investment securities (amortized cost of $1,760,058 in 2004 and $1,692,780 in 2003)

1,746,912

1,707,962

2

Loans

3,532,754

3,306,421

7

     Less: Allowance for loan losses

(66,007)

(65,808)

-

              Unamortized deferred loan fees

(10,141)

(10,862)

(7)

              Loans, net

3,456,606

3,229,751

7

Other real estate owned, net

-

400

(100)

Affordable housing investments, net

37,765

32,977

15

Premises and equipment, net

34,660

35,624

(3)

Customers' liability on acceptances

15,657

11,731

33

Accrued interest receivable

19,658

21,553

(9)

Goodwill

240,459

241,728

(1)

Other intangible assets, net

50,153

52,730

(5)

Other assets

33,105

13,760

141

     Total assets

$ 5,770,129

$ 5,541,915

4

Liabilities and Stockholders' Equity

Deposits

     Non-interest-bearing demand deposits

$ 699,884

$ 633,556

10

     Interest-bearing deposits:

          NOW deposits

267,495

279,679

(4)

          Money market deposits

583,275

657,638

(11)

          Savings deposits

426,759

425,076

-

          Time deposits under $100

537,886

559,305

(4)

          Time deposits of $100 or more

1,992,908

1,872,827

6

          Total deposits

4,508,207

4,428,081

2

Federal funds purchased and securities sold under agreement to repurchase

65,000

82,500

(21)

Advances from the Federal Home Loan Bank

429,197

258,313

66

Other borrowings

10,688

27,622

(61)

Minority interest in consolidated subsidiary

8,620

4,412

95

Acceptances outstanding

15,657

11,731

33

Junior subordinated notes

53,886

53,856

-

Other liabilities

35,918

56,104

(36)

     Total liabilities

5,127,173

4,922,619

4

Stockholders' Equity

     Preferred stock, $0.01 par value; 10,000,000 shares

     Authorized, none issued

-

-

-

     Common stock, $0.01 par value, 100,000,000 shares authorized,

          24,804,091 outstanding in 2003

252

251

-

     Treasury stock, at cost (319,910 shares in 2004 and in 2003)

(8,810)

(8,810)

-

     Additional paid-in-capital

373,205

365,272

2

     Unearned compensation

(13,414)

(10,834)

24

     Accumulated other comprehensive (loss) income, net

(7,342)

9,444

(178)

     Retained earnings

299,065

263,973

13

     Total stockholders' equity

642,956

619,296

4

     Total liabilities and stockholders' equity

$ 5,770,129

$ 5,541,915

4

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Three months ended June 30,

Six months ended June 30,

(In thousands, except share and per share data)

2004

2003

2004

2003

INTEREST INCOME

Interest on loans

$ 47,770

$ 27,034

$ 93,229

$ 53,970

Interest on securities available-for-sale

18,100

8,676

36,679

17,547

Interest on federal funds sold and securities purchased under agreements to resell

27

128

77

301

Interest on deposits with banks

35

12

65

14

Total interest income

65,932

35,850

130,050

71,832

INTEREST EXPENSE

Time deposits of $100 or more

7,391

5,032

14,625

10,232

Other deposits

3,932

2,598

7,665

5,279

Other borrowed funds

2,412

1,417

4,494

2,671

Total interest expense

13,735

9,047

26,784

18,182

Net interest income before provision for loan losses

52,197

26,803

103,266

53,650

Provision for loan losses

-

1,650

-

3,300

Net interest income after provision for loan losses

52,197

25,153

103,266

50,350

NON-INTEREST INCOME

Securities gains, net

1,420

3,858

1,218

5,653

Letters of credit commissions

1,144

496

2,097

994

Depository service fees

1,896

1,472

3,832

2,805

Other operating income

2,095

1,140

3,804

2,200

Total non-interest income

6,555

6,966

10,951

11,652

NON-INTEREST EXPENSE

Salaries and employee benefits

13,121

7,081

25,338

13,724

Occupancy expense

1,804

924

3,933

1,905

Computer and equipment expense

1,817

832

3,850

1,652

Professional services expense

1,728

947

3,275

1,944

FDIC and State assessments

263

127

533

257

Marketing expense

516

460

1,215

849

Other real estate owned expense

39

83

516

129

Operations of affordable housing investments

646

703

1,395

1,228

Amortization of core deposit intangibles

1,333

49

2,667

96

Other operating expense

1,431

808

3,237

1,460

Total non-interest expense

22,698

12,014

45,959

23,244

Income before income tax expense

36,054

20,105

68,258

38,758

Income tax expense

13,910

6,860

26,211

12,980

Net income

22,144

13,245

42,047

25,778

Other comprehensive income (loss), net of tax

Unrealized holding (losses) gains arising during the period

(22,712)

7,418

14,547)

7,126

Unrealized losses on cash flow hedge derivatives

(367)

(216)

(369)

(189)

Less: reclassfication adjustments included in net income

1,584

354

1,870

1,518

Total other comprehensive income (loss), net of tax

(24,663)

6,848

(16,786)

5,419

Total comprehensive income (loss)

$ (2,519)

$ 20,093

$ 25,261

$ 31,197

Net income per common share:

Basic

$ 0.89

$ 0.74

$ 1.69

$ 1.43

Diluted

$ 0.88

$ 0.73

$ 1.67

$ 1.42

Cash dividends paid per common share

$ 0.14

$ 0.14

$ 0.28

$ 0.28

Basic average common shares outstanding

24,881,174

18,016,015

24,858,412

18,009,937

Diluted average common shares outstanding

25,159,594

18,155,180

25,126,123

18,136,125

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

For the six months ended June 30,

(In thousands)

2004

2003

Cash Flows from Operating Activities:

Net income

$42,047

$25,779

Adjustments to reconcile net income to net cash provided (used) by operating activities:

Provision for loan losses

-

3,300

Provision for losses on other real estate owned

400

-

Depreciation

1,438

836

Gain on sale of other real estate owned

-

-

Gain on sales of loans

(465)

(294)

Gain on sales and calls of investment securities

(1,218)

(5,653)

Proceeds from sales of loans

6,518

6,530

Amortization of investment securities

4,615

1,879

Other non-cash interest

(1,406)

-

Amortization of intangibles

2,667

109

Stock-based compensation expense

1,473

194

Tax benefits from stock options

838

6

Increase (decrease) in deferred loan fees, net

(721)

532

Decrease in accrued interest receivable

1,895

465

(Increase) decrease in other assets, net

(19,327)

1,117

Decrease in other liabilities

(133)

(44,321)

Net cash provided (used) by operating activities

38,621

(9,521)

Cash Flows from Investing Activities:

Purchase of investment securities available-for-sale

(462,353)

(357,765)

Proceeds from maturity, prepayments and call of investment securities available-for-sale

362,452

79,871

Proceeds from sale of investment securities available-for-sale

29,117

42,986

Purchase of investment securities held-to-maturity

-

(3,469)

Proceeds from maturity, prepayments and call of investment securities held-to-maturity

-

84,641

Purchase of mortgage-backed securities held-to-maturity

-

(34,645)

Net increase in loans

(232,973)

(83,466)

Purchase of premises and equipment

(474)

(634)

Net increase in investments in affordable housing

(4,788)

2

Additional cash payments related to acquisition of GBC Bancorp

(7,241)

-

Net cash used in investing activities

(316,260)

(272,479)

Cash Flows from Financing Activities:

Net (decrease)/ increase in demand deposits, NOW deposits, money market and savings deposits

(18,535)

59,575

Net (decrease)/ increase in time deposits

99,737

70,661

Net (decrease) increase in Federal funds purchase and securities sold under agreements to repurchase

(17,500)

124,000

Increase in advances from Federal Home Loan Bank

590,000

-

Repayment of FHLB borrowings

(418,000)

-

Increase in other borrowings

3,096

-

Repayment of other borrowings

(20,000)

-

Cash dividends

(6,955)

(5,038)

Issuance of preferred stock of subsidiary

4,208

19,701

Proceeds from shares issued to the Dividend Reinvestment Plan

1,338

1,336

Proceeds from exercise of stock options

1,705

33

Purchase of treasury stock

-

(523)

Net cash provided by financing activities

219,094

269,745

Decrease in cash and cash equivalents

(58,545)

(12,255)

Cash and cash equivalents, beginning of period

193,699

89,777

Cash and cash equivalents, end of period

$ 135,154

$ 77,522

Supplemental disclosure of cash flows information

Cash paid during the period:

Interest

$ 27,519

$ 18,387

Income taxes

$ 39,618

$ 35,499

Non-cash investing activities:

Transfer to investment securities available-for-sale within 90 days of maturity

$ -

$ 412,122

Net change in unrealized holding gain on securities available-for-sale, net of tax

$ (16,417)

$ 5,608

Net change in unrealized gains on cash flow hedge derivatives, net of tax

$ (369)

$ (189)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.