Critical Accounting Policies

The accounting policies of the Company conform with U.S. generally accepted accounting principles and require management to make estimates and develop assumptions that affect the amounts reported in the financial statements and related footnotes. These estimates and assumptions are based on information available to management as of the date of the financial statements. Actual results could differ significantly from management's estimates. As this information changes, management's estimates and assumptions used to prepare the Company's financial statements and related disclosures may also change. The most significant accounting policies followed by the Company are presented in Note One to the audited financial statements included in the Company's 2007 Annual Report to Shareholders. The information included in this Quarterly Report on Form 10-Q, including the Consolidated Financial Statements, Notes to Consolidated Financial Statements, and Management's Discussion and Analysis of Financial Condition and Results of Operations, should be read in conjunction with the financial statements and notes thereto included in the 2007 Annual Report of the Company. Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, management has identified the determination of the allowance for loan losses, income taxes, and previously securitized loans to be the accounting areas that require the most subjective or complex judgments and, as such, could be most subject to revision as new information becomes available.

Pages 26 - 30 of this Quarterly Report on Form 10-Q provide management's analysis of the Company's allowance for loan losses and related provision. The allowance for loan losses is maintained at a level that represents management's best estimate of probable losses in the loan portfolio. Management's determination of the adequacy of the allowance for loan losses is based upon an evaluation of individual credits in the loan portfolio, historical loan loss experience, current economic conditions, and other relevant factors. This determination is inherently subjective as it requires material estimates including the amounts and timing of future cash flows expected to be received on impaired loans that may be susceptible to significant change. The allowance for loan losses related to loans considered to be impaired is generally evaluated based on the discounted cash flows using the impaired loan's initial effective interest rate or the fair value of the collateral for certain collateral dependent loans.

The Company is subject to federal and state income taxes in the jurisdictions in which it conducts business. In computing the provision for income taxes, management must make judgments regarding interpretation of laws in those jurisdictions. Because the application of tax laws and regulations for many types of transactions is susceptible to varying interpretations, amounts reported in the financial statements could be changed at a later date upon final determinations by taxing authorities. On a quarterly basis, the Company estimates its annual effective tax rate for the year and uses that rate to provide for income taxes on a year-to-date basis.

The Company adopted Financial Accounting Standards Board ("FASB") Interpretation No. 48, "Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement 109" ("FIN 48") effective January 1, 2007. FIN 48 clarifies the accounting and disclosure for uncertain tax positions by requiring that a tax position meet a "probable recognition threshold" for the benefit of the uncertain tax position to be recognized in the financial statements. A tax position that fails to meet the probable recognition threshold will result in either reduction of a current or deferred tax asset or receivable, or recording a current or deferred tax liability. FIN 48 also provides guidance on measurement, derecognition of tax benefits, classification, interim period accounting disclosure, and transition requirements in accounting for uncertain tax positions. The cumulative effect of adopting FIN 48 was an increase in tax reserves and a decrease of $0.1 million to the January 1, 2007 retained earnings balance. The Company includes interest and penalties related to income tax liabilities in income tax expense. The amount of unrecognized tax benefits could change over the next twelve months as a result of various factors. However, management cannot currently estimate the range of possible change.

The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the years ended December 31, 2005 through 2007. The Company and its subsidiaries state income tax returns are open to audit under the statute of limitations for the year ended December 31, 2007. A tax examination by the State of West Virginia for the years 2004 through 2006 was completed during the third quarter of 2008. The final results of this examination did not have a material impact on the Company's financial statements.

The Company's effective income tax rate is based upon the expected tax rate for the year ending December 31, 2008, excluding impairment losses and the realization of previously unrecognized tax positions. Excluding the impact of these items, the Company's effective income tax rate for the nine months ended September 30, 2008 was 33.4% and for the third quarter of 2008 was 33.9% compared to 33.8% for the year ended December 31 2007, and 33.4% for the quarter ended September 30, 2007.

Note B, beginning on page 8 of this Quarterly Report on Form 10-Q, and page 30 provide management's analysis of the Company's previously securitized loans. The carrying value of previously securitized loans is determined using assumptions with regard to loan prepayment and default rates. Using cash flow modeling techniques that incorporate these assumptions, the Company estimated total future cash collections expected to be received from these loans and determined the yield at which the resulting discount would be accreted into income. If, upon periodic evaluation, the estimate of the total probable collections is increased or decreased but is still greater than the sum of the original carrying amount less subsequent collections plus the discount accreted to date, and it is probable that collection will occur, the amount of the discount to be accreted is adjusted accordingly and the amount of periodic accretion is adjusted over the remaining lives of the loans. If, upon periodic evaluation, the discounted present value of estimated future cash flows declines below the recorded value of previously securitized loans, an impairment charge would be provided through the Company's provision for loan losses. Please refer to Note B of Notes to Consolidated Financial Statements, on pages 8 - 9 for further discussion.

On a quarterly basis, the Company performs a review of investment securities to determine if any unrealized losses are other than temporarily impaired. Management considers the following, amongst other things, in its determination of the nature of the unrealized losses, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, and (iii) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. As a result of this review and recent events regarding Freddie Mac and Fannie Mae, the Company recognized $27.5 million of other than temporary impairment charges during the quarter ended September 30, 2008. These impairment charges were related to agency preferreds ($21.1 million compared to a book value of $22.7 million), pooled bank trust preferreds ($4.3 million compared to a book value of $22.3 million), income notes ($1.1 million compared to a book value of $2.0 million), and corporate debt securities ($1.0 million compared to a book value of $24.6 million). At September 30, 2008, the Company's portfolio of perpetual callable preferred securities, preferred securities, and trust preferred securities primarily invested in regional banks have a total book value of $134.2 million and unrealized losses of $43.0 million. The Company continues to actively monitor the market values of these investments along with the financial strength of the issuers behind these securities, as well as our entire investment portfolio. Based on the market information available the Company believes that the recent declines in market value are temporary and that the Company has the ability and intent to hold these securities until the temporary losses recover or the securities are called or mature. The Company cannot guarantee that such securities will recover and if additional information becomes available in the future to suggest that the losses are other than temporary, the Company may need to record impairment charges in future periods.

Financial Summary

Nine Months Ended September 30, 2008 vs. 2007

The Company reported consolidated net income of $23.9 million, or $1.47 per diluted common share, for the nine months ended September 30, 2008, compared to $38.3 million, or $2.24 per diluted common share for the first nine months of 2007. Return on average assets ("ROA") was 1.27% and return on average equity ("ROE") was 10.3% for the first nine months of 2008, compared to 2.03% and 16.8%, respectively, for the first nine months of 2007.

The Company's net interest income for the first nine months of 2008 increased $2.7 million compared to the first nine months of 2007 (see Net Interest Income). The Company recorded a provision for loan losses of $5.1 million for the first nine months of 2008 while $3.7 million was recorded for the first nine months of 2007 (see Allowance and Provision for Loan Losses). The Company recorded $27.5 million of investment impairment losses in the first nine months of 2008 that were primarily related to actions taken by the federal government in relation to the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC) (see Non-Interest Income and Expense). As further discussed under the caption Non-Interest Income and Expense, excluding investment impairment losses, non-interest income increased $4.4 million from the nine months ended September 30, 2007, to the nine months ended September 30, 2008. During the first nine months of 2008, the Company recognized a gain of $3.3 million in connection with Visa's successful initial public offering ("IPO"). During the first nine months of 2007, the Company recognized a gain of $1.5 million from the sale of its existing merchant processing agreements (see Non-Interest Income). Non-interest expense for the nine months ended September 30, 2008 increased $4.8 million from the nine months ended September 30, 2007. 2008 included a loss of $1.2 million as a result of the Company fully redeeming $16.0 million of 9.15% Trust Preferred Securities during 2008 that had been issued in 1998 (see Non-Interest Expense).

Three Months Ended September 30, 2008 vs. 2007

The Company reported consolidated net loss of $(2.6) million, or $(0.16) per diluted common share, for the three months ended September 30, 2008, compared to net income of $12.7 million, or $0.76 per diluted common share for the third quarter of 2007. Return on average assets ("ROA") was (0.41)% and return on average equity ("ROE") was (3.3)% for third quarter of 2008, compared to 2.03% and 17.2%, respectively, for the third quarter of 2007.

The Company's net interest income for the third quarter of 2008 increased $2.1 million compared to the third quarter of 2007 (see Net Interest Income). The Company recorded a provision for loan losses of $2.35 million for the third quarter of 2008 while $1.2 million was recorded for the third quarter of 2007 (see Allowance and Provision for Loan Losses). As further discussed under the caption Non-Interest Income and Expense, the Company recorded $27.5 million of investment impairment losses in the third quarter of 2008 that were primarily related to actions taken by the federal government in relation to FNMA and FHLMC. Excluding investment impairment losses, non-interest income increased $0.9 million from quarter ended September 30, 2007, to the quarter ended September 30, 2008, primarily due to increases in service fees of $0.8 million. Non-interest expenses increased $1.2 million from the quarter ended September 30, 2007 (see Non-Interest Expense).

Net Interest Income

Nine Months Ended September30, 2008 vs. 2007

The Company's tax equivalent net interest income increased $2.6 million, or 3.5%, from $73.7 million during the first nine months of 2007 to $76.3 million during the first nine months of 2008. This increase is primarily attributable to interest expense on deposits and other interest bearing liabilities decreasing more quickly than interest income from loans and investments as a result of rate declines in the Federal Funds rate during 2008. As a result of the Company's positioning of its balance sheet, interest sensitive liabilities have repriced to lower levels at a faster rate than interest sensitive assets. Additionally, the Company's interest rate floors with a total notional value of $500 million have diminished the impact of falling rates on the Company's interest income from variable rate loans. Partially offsetting the reduction in interest expense from falling market rates was a decrease of $1.2 million in interest income from Previously Securitized Loans from the nine months ended September 30, 2007 as the balances of these loans have decreased 52.3%. The decrease in average balances was partially mitigated by an increase in the yield on these loans from 63.9% for the nine months ended September 30, 2007 to 105.1% for the nine months ended September 30, 2008. The yield on the previously securitized loans has increased due to improved cash flows as net default rates have been less than previously estimated. The default rates have decreased as a result of the Company's assumption of the servicing of all of the pool balances during the second quarter of 2005. Subsequent to our assumption of the servicing of these loans, the Company has averaged net recoveries, but does not believe that continued net recoveries can be sustained indefinitely. During the nine months ended September 30, 2008, the Company sold an interest rate floor with a notional value of $100 million that matured in June 2011 in order to mitigate its risk associated with the counterparty of this interest rate floor. The gain from this sale will be recognized over the remaining life of the hedged loans.

Three Months Ended September 30, 2008 vs. 2007

The Company's tax equivalent net interest income increased $2.0 million, or 8.3%, from $24.5 million during the third quarter of 2007 to $26.5 million during the third quarter of 2008. This increase is primarily attributable to interest expense on deposits and other interest bearing liabilities decreasing more quickly than interest income from loans and investments as a result of rate declines in the Federal Funds rate during 2008. As a result of the Company's positioning of its balance sheet, interest sensitive liabilities have repriced to lower levels at a faster rate than interest sensitive assets. Additionally, the Company's interest rate floors with a total notional value of $500 million during the quarter diminished the impact of falling rates on the Company's interest income from variable rate loans. Partially offsetting these increases from falling market rates was a decrease of $0.6 million in interest income from Previously Securitized Loans from the third quarter of 2007, as the balances of these loans have decreased 48.2%. The decrease in average balances was partially mitigated by an increase in the yield on these loans to 110.3% for the third quarter of 2008 from 82.9% for the third quarter of 2007 and 93.2% for the three months ended December 31, 2007. The yield on the previously securitized loans has increased due to improved cash flows, as net default rates have been less than previously estimated. The default rates have decreased as a result of the Company's assumption of the servicing of all of the pool balances during the third quarter of 2005. Subsequent to our assumption of the servicing of these loans, the Company has averaged net recoveries, but does not believe that continued net recoveries can be sustained indefinitely. During the quarter, the Company sold an interest rate floor with a notional value of $100 million that matured in June 2011 in order to mitigate its risk associated with the counterparty of this interest rate floor. The gain from this sale will be recognized over the remaining life of the hedged loans.

Table One

Average Balance Sheets and Net Interest Income
(in thousands)

                                                            Nine months ended September 30,
                                              2008                                                  2007
                         Average Balance      Interest       Yield/ Rate       Average Balance      Interest       Yield/ Rate
Assets
Loan portfolio (1):
Residential real
estate                  $         604,798     $  28,187              6.23 %   $         596,585     $  27,144              6.08 %
Home equity                       359,101        19,520              7.26               328,036        19,091              7.78
Commercial,
financial, and
agriculture                       705,819        35,563              6.73               672,331        38,119              7.58
Loans to depository
institutions                        1,551            35              3.01                56,410         2,271              5.38
Installment loans to
individuals                        52,277         4,014             10.26                45,596         3,967             11.63
Previously
securitized loans                   5,521         4,343            105.08                11,583         5,539             63.94
Total loans                     1,729,067        91,662              7.08             1,710,541        96,131              7.51
Securities:
Taxable                           436,440        18,034              5.52               482,484        19,709              5.46
Tax-exempt (2)                     36,253         1,771              6.53                39,789         1,954              6.57
Total securities                  472,693        19,805              5.60               522,273        21,663              5.55
Deposits in
depository
institutions                        8,981           163              2.42                12,823           401              4.18
Federal funds sold                      -             -                 -                20,832           814              5.22
Total
interest-earning
assets                          2,210,741       111,630              6.74             2,266,469       119,009              7.02
Cash and due from
banks                              58,293                                                50,668
Bank premises and
equipment                          56,217                                                47,555
Other assets                      191,625                                               170,137
Less: allowance for
loan losses                       (18,240 )                                             (16,114 )
Total assets            $       2,498,636                                     $       2,518,715

Liabilities
Interest-bearing
demand deposits         $         412,417     $   1,979              0.64 %   $         423,222     $   3,777              1.19 %
Savings deposits                  361,465         2,796              1.03               340,490         4,259              1.67
Time deposits                     910,187        27,204              3.99               922,958        30,942              4.48
Short-term borrowings             136,644         2,286              2.23               158,250         4,965              4.19
Long-term debt                     21,663         1,070              6.60                25,368         1,383              7.29
Total
interest-bearing
liabilities                     1,842,376        35,335              2.56             1,870,288        45,326              3.24
Noninterest-bearing
demand deposits                   322,344                                               314,744
Other liabilities                  26,213                                                29,803
Stockholders' equity              307,703                                               303,880
Total liabilities and
stockholders' equity    $       2,498,636                                     $       2,518,715
Net interest income                           $  76,295                                             $  73,683
Net yield on earning
assets                                                               4.61 %                                                4.35 %

(1) For purposes of this table, non-accruing loans have been included in average balances and loan fees, which are immaterial, have been included in interest income.

(2) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 35%.

Table Two
Rate Volume Analysis of Changes in Interest Income and Interest Expense
(in thousands)

                                           Nine months ended September 30, 2008 vs. 2007 Increase
                                                        (Decrease) Due to Change In:
                                            Volume                  Rate                   Net
Interest-earning assets:
Loan portfolio
Residential real estate                  $        373           $        670           $      1,043
Home equity                                     1,811                 (1,382 )                  429
Commercial, financial, and agriculture          1,900                 (4,456 )               (2,556 )
Loans to depository institutions               (2,211 )                  (25 )               (2,236 )
Installment loans to individuals                  582                   (535 )                   47
Previously securitized loans                   (2,902 )                1,706                 (1,196 )
Total loans                                      (447 )               (4,022 )               (4,469 )
Securities:
Taxable                                        (1,881 )                  206                 (1,675 )
Tax-exempt (1)                                   (174 )                   (9 )                 (183 )
Total securities                               (2,055 )                  197                 (1,858 )
Deposits in depository institutions              (120 )                 (118 )                 (238 )
Federal funds sold                               (815 )                    1                   (814 )
Total interest-earning assets            $     (3,437 )         $     (3,942 )         $     (7,379 )

Interest-bearing liabilities:
Demand deposits                          $        (97 )         $     (1,701 )         $     (1,798 )
Savings deposits                                  263                 (1,726 )               (1,463 )
Time deposits                                    (429 )               (3,309 )               (3,738 )
Short-term borrowings                            (678 )               (2,001 )               (2,679 )
Long-term debt                                   (202 )                 (111 )                 (313 )
Total interest-bearing liabilities       $    ( 1,143 )         $     (8,848 )         $     (9,991 )
Net Interest Income                      $     (2,294 )         $      4,906           $      2,612

(1) Fully federal taxable equivalent using a tax rate of 35%.

Table Three

Average Balance Sheets and Net Interest Income
(in thousands)

                                                            Three months ended September 30,
                                               2008                                                   2007
                         Average Balance       Interest       Yield/ Rate       Average Balance       Interest       Yield/ Rate
Assets
Loan portfolio (3):
Residential real
estate                  $         613,771     $    9,393              6.09 %   $         598,954     $    9,272              6.14 %
Home equity                       373,445          6,644              7.08               334,363          6,547              7.77
Commercial,
financial, and
agriculture                       708,665         11,622              6.52               679,104         12,776              7.46
Loans to depository
institutions                            -              -                 -                60,000            820              5.42
Installment loans to
individuals                        53,521          1,270              9.44                47,626          1,379             11.49
Previously
securitized loans                   4,781          1,325            110.25                 9,220          1,927             82.92
Total loans                     1,754,183         30,254              6.86             1,729,267         32,721              7.51
Securities:
Taxable                           407,754          5,850              5.71               442,696          6,024              5.40
Tax-exempt (4)                     34,653            571              6.56                38,810            639              6.53
Total securities                  442,407          6,421              5.77               481,506          6,663              5.49
Deposits in
depository
institutions                        8,981             47              2.08                15,184            171              4.47
Federal funds sold                      -              -                 -                20,870            266              5.06
Total
interest-earning
assets                          2,205,571         36,722              6.62             2,246,827         39,821              7.03
Cash and due from
banks                              54,572                                                 51,149
Bank premises and
equipment                          57,923                                                 50,333
Other assets                      195,217                                                171,478
Less: allowance for
loan losses                       (18,158 )                                              (16,563 )
Total assets            $       2,495,125                                      $       2,503,224

Liabilities
Interest-bearing
demand deposits         $         414,022     $      654              0.63 %   $         410,907     $    1,136              1.10 %
Savings deposits                  362,550            862              0.95               347,055          1,523              1.74
Time deposits                     887,884          7,929              3.55               923,937         10,530              4.52
Short-term borrowings             142,290            477              1.33               165,965          1,758              4.20
Long-term debt                     21,089            316              5.96                21,871            426              7.73
Total
interest-bearing
. . .