Forward-Looking Statements

Certain statements in this Form 10-Q constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21B of the Securities Exchange Act of 1934, as amended (“Exchange Act”). For this purpose, any statements contained herein or incorporated herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “intends,” “expects” and similar expressions are intended to identify forward-looking statements. Because these forward-looking statements involve risk and uncertainties, there are important factors, including the factors discussed in “Risk Factors” included as Exhibit 99.1 to the Annual Report on Form 10-K for the year ended December 31, 2004 filed on March 25, 2005, that could cause actual results to differ materially from those expressed or implied by these forward-looking statements.

2

PART I – FINANCIAL INFORMATION

Item 1.   Financial Statements

BREMER FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share data)

			March 31, 2005			December 31, 2004
			(unaudited)
Assets
Cash and due from banks			$	140,759		$	203,930
Investment securities available-for-sale
(cost: 03/31/05 - $1,024,640; 12/31/04 - $1,003,307)				1,013,955			997,900
Investment securities held-to-maturity
(fair value: 03/31/05 - $198,385; 12/31/04 - $202,767)				193,423			195,546
Loans and leases				4,678,854			4,541,993
Reserve for loan losses				(60,905	)		(57,965	)
Net loans and leases				4,617,949			4,484,028
Interest receivable				38,332			36,901
Premises and equipment, net				84,843			83,914
Other intangibles				14,614			15,391
Other assets				42,135			39,683
Goodwill				84,226			84,226
Total assets			$	6,230,236		$	6,141,519
Liabilities and Shareholders’ Equity
Noninterest bearing deposits			$	758,091		$	825,755
Interest bearing deposits				3,508,850			3,384,341
Total deposits				4,266,941			4,210,096
Federal funds purchased and repurchase agreements				564,982			524,432
Other short-term borrowings				461,418			464,025
Long-term debt				369,692			380,700
Accrued expenses and other liabilities				55,847			57,925
Total liabilities				5,718,880			5,637,178
Minority interests				150			150
Redeemable class A common stock, 960,000 shares
issued and outstanding				40,896			40,335
Shareholders' equity
Common stock
Class A, no par, 12,000,000 shares authorized;
240,000 shares issued and outstanding				57			57
Class B, no par, 10,800,000 shares authorized,
issued and outstanding				2,562			2,562
Retained earnings				473,764			464,398
Accumulated other comprehensive (loss) income				(6,073	)		(3,161	)
Total shareholders’ equity				470,310			463,856
Total liabilities and shareholders’ equity			$	6,230,236		$	6,141,519
See notes to consolidated financial statements.

3

BREMER FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands, except per share amounts)

			For the Three Months Ended March 31,
			2005			2004
Interest income
Loans and leases, including fees			$	69,588		$	55,834
Securities				10,725			11,270
Federal funds sold				57			20
Other				16			24
Total interest income				80,386			67,148
Interest expense
Deposits				16,155			12,424
Federal funds purchased and repurchase agreements				2,445			1,358
Other short term borrowings				2,869			528
Long term debt				5,550			7,079
Total interest expense				27,019			21,389
Net interest income				53,367			45,759
Provision for credit losses				3,312			2,943
Net interest income after provision for credit losses				50,055			42,816
Noninterest income
Service charges				7,303			7,272
Insurance				3,271			2,783
Investment management and trust fees				2,847			2,619
Brokerage				1,584			1,535
Gain on sale of loans				2,025			2,261
Gain on sale of securities				—			2,050
Other				1,763			1,820
Total noninterest income				18,793			20,340
Noninterest expense
Salaries and wages				20,516			19,506
Employee benefits				6,659			5,602
Occupancy				3,246			3,059
Furniture and equipment				2,882			2,630
Data processing fees				2,727			2,639
FDIC premiums and examination fees				506			463
Amortization of intangibles				650			685
Other				6,855			6,774
Total noninterest expense				44,041			41,358
Income before income tax expense				24,807			21,798
Income tax expense				8,625			7,400
Net income			$	16,182		$	14,398
Per common share amounts:
Net income-basic and diluted			$	1.35		$	1.20
Dividends paid				0.50			0.45
See notes to consolidated financial statements.

4

BREMER FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)

			For the Three Months Ended March 31,
			2005			2004
Cash flows from operating activities
Net income			$	16,182		$	14,398
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for credit losses				3,312			2,943
Depreciation and amortization				3,368			4,379
Gain on sale of securities				—			(2,050	)
Other assets and liabilities, net				(4,509	)		(6,574	)
Gain on sale of loans				(2,025	)		(2,261	)
Proceeds from loans originated for sale				79,426			78,282
Loans originated for sale				(75,552	)		(74,938	)
Net cash provided by operating activities				20,202			14,179
Cash flows from investing activities
Purchases of available-for-sale investment securities				(124,569	)		(137,453	)
Purchases of held-to-maturity securities				(6,433	)		(9,699	)
Proceeds from maturities of available-for-sale investment securities				100,963			67,815
Proceeds from maturities of held-to-maturity securities				8,590			7,645
Proceeds from sales of available-for-sale investment securities				1,075			60,527
Proceeds from sales of other real estate owned				785			619
Loans and leases, net				(139,082	)		(68,055	)
Purchase of premises and equipment				(2,482	)		(1,298	)
Net cash used in investing activities				(161,153	)		(79,899	)
Cash flows from financing activities
Noninterest bearing deposits, net				(67,664	)		(71,405	)
Savings, NOW and money market accounts, net				(30,464	)		55,092
Certificates of deposits, net				154,973			(16,844	)
Federal funds purchased and repurchase agreements, net				40,550			(22,289	)
Other short-term borrowings, net				(2,607	)		95,358
Repayments of long-term debt				(11,008	)		(9	)
Common stock dividends paid				(6,000	)		(5,400	)
Net cash provided by financing activities				77,780			34,503
Net decrease in cash and due from banks				(63,171	)		(31,217	)
Cash and due from banks at beginning of period				203,930			195,165
Cash and due from banks at end of period			$	140,759		$	163,948
Supplemental disclosures of cash flow information
Cash paid for interest			$	25,867		$	20,384
Cash paid for income taxes				1,953			1,194
See notes to consolidated financial statements.

6

BREMER FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months ended March 31, 2005 and 2004 (unaudited)

Note A:   Financial Statements

The condensed financial statements included herein have been prepared by Bremer Financial Corporation (the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission and have not been audited by independent auditors. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

Note B:   General

The consolidated financial statements include the accounts of Bremer Financial Corporation and subsidiaries. All material intercompany transactions and balances are eliminated in consolidation. The Company has not changed its accounting policies from those stated for the year ended December 31, 2004 included in its Annual Report on Form 10-K for that year filed on March 25, 2005.

Note C:   Interim Period Adjustments

The consolidated financial statements contained herein reflect all adjustments which are, in the opinion of management, of a normal recurring nature and which are necessary for a fair statement of the financial position, results of operations, and cash flows for the unaudited interim periods. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the entire year.

Note D:   Earnings Per Share Calculations

Basic and diluted earnings per common share have been computed using 12,000,000 common shares outstanding for all periods. The Company does not have any dilutive securities.

Note E:   Securities

Investment securities classified as held-to-maturity are valued at amortized historical cost. Investment securities classified as available-for-sale are valued at fair value. Unrealized holding gains and losses are excluded from earnings and reported, net of tax, as a separate component of shareholders’ equity until realized. A portion of the unrealized holding gains and losses is allocated to redeemable class A common stock. Gains or losses on these securities are computed based on the amortized cost of the specific securities when sold. Management periodically evaluates investment securities for other than temporary declines in fair value. There were no investment securities which management identified to be other-than-temporarily impaired for the period ended March 31, 2005.

7

The following table provides the gross unrealized losses and fair value, aggregated by investment category, and the length of time the individual securities have been in a continuous unrealized loss position at March 31:

			2005
			Less than 12 Months						12 Months or More						Total
			Fair Value			Unrealized Losses			Fair Value			Unrealized Losses			Fair Value			Unrealized Losses
			(in thousands)
U.S. Treasury securities			$	308		$	2		$	—		$	—		$	308		$	2
Obligations of U.S. government agencies				101,131			1,157			—			—			101,131			1,157
Obligations of state
and political subdivisions				27,018			372			11,773			464			38,791			836
Mortgage-backed securities				570,006			7,968			138,152			2,640			708,158			10,608
Total			$	698,463		$	9,499		$	149,925		$	3,104		$	848,388		$	12,603

Note F:   Redeemable Class A Common Stock

At March 31, 2005, 960,000 shares of redeemable class A stock were issued and outstanding. At March 31, 2005, these shares were subject to redemption at a price of $42.60 per share, which approximated book value. These shares are owned by employees and directors of the Company and its subsidiaries and the employee benefit plans of the Company. The employee holders of class A common stock have the right to require the Company to purchase their shares under certain circumstances, including death, permanent disability or retirement, while the Company has the option to purchase the shares from holders upon the occurrence of certain events, which include death, retirement or termination of the employee’s employment. It is the Company’s current intent that these 960,000 shares will continue to be held by employees, directors, and employee benefit plans of the Company and its subsidiaries and not be directly purchased by the Company or the Otto Bremer Foundation. During the period from January 1, 2005 through March 31, 2005, the Company did not directly purchase any shares of class A common stock but assigned to various parties our options that arose during that period to purchase a total of 69,153.5436 shares. These options were assigned to the Bremer Financial Corporation Employee Stock Ownership Plan (“ESOP”) (5,000.2486 shares), the Bremer Banks Profit Sharing Plus Plan (36,280.2950 shares), and executives and directors under the Executive Stock Purchase Plan (27,873.0000 shares). To the Company’s knowledge, shares purchased by these parties upon exercise of these assigned options were the only transfers of shares of class A common stock effected during the period from January 1, 2005 through March 31, 2005.

Note G:   Goodwill and Intangible Assets

Intangible assets consist of goodwill, core deposit intangibles, and other intangibles. The remaining unamortized balances at March 31, 2005 and 2004 were $98.8 million and $101.8 million. The core deposit and other intangibles have remaining amortization lives of five to seven years. Goodwill is not amortized but is tested regularly for impairment. Management performed its annual impairment test on its goodwill assets in December 2004. No impairment

8

loss was recorded as a result of that test and no events or changes in circumstances have occurred since that test that would indicate that assets might be impaired.

The following table presents relevant information about the Company’s amortized intangible assets:

			As of March 31, 2005									As of March 31, 2004
			(in thousands)
			Gross Carrying Amount			Accumulated Amortization			Net Carrying Value			Gross Carrying Amount			Accumulated Amortization			Net Carrying Value
Core deposit premium			$	21,313		$	10,156		$	11,157		$	21,313		$	7,818		$	13,495
Mortgage servicing rights (1)				4,047			2,594			1,453			4,459			2,567			1,892
Other				4,322			2,318			2,004			4,400			2,166			2,234
Total			$	29,682		$	15,068		$	14,614		$	30,172		$	12,551		$	17,621

_________________
(1)		Accumulated amortization of mortgage servicing rights includes the related valuation allowance of $386 thousand in 2005 and $984 thousand in 2004.

The Company recorded aggregate intangible amortization expense of $650.2 thousand for the three-month period ended March 31, 2005 and $684.6 thousand for the period ended March 31, 2004. The estimated amortization expense for each of the next five years is approximately $2.3 million.

Goodwill was $84.2 million at March 31, 2005 and March 31, 2004.

Note H:   Employee Benefit Plans

Pension benefit plans – The Company maintains the Bremer Retirement Plan (“Pension Plan”), which is a qualified defined benefit pension plan designed to provide retirement benefits to substantially all of the employees of the Company and its subsidiaries. In addition, the Company has a Supplemental Executive Retirement Plan (“SERP”). The Pension Plan and the SERP constitute the Company’s “Pension Benefit Plans.”

Other postretirement benefits – The Company provides certain retiree health care benefits relating primarily to medical insurance co-payments to retired employees between the ages of 55 and 65. The Company accrues the cost of these benefits during the employees’ active service.

9

Net benefit plan expense for the above plans as actuarially determined for the three months ended March 31, 2005 and 2004 included the following components:

			For the Three Months Ended
			March 31,
			Pension Benefits						Other Postretirement Benefits
			2005			2004			2005			2004
			(in thousands)
Service cost			$	980		$	938		$	157		$	136
Interest cost				997			914			99			84
Expected return on assets				(1,360	)		(1,180	)		—			—
Prior service cost amortization				4			15			(3	)		(3	)
Net loss/(gain) amortization				271			272			19			20
Net periodic benefit cost			$	892		$	959		$	272		$	237

The Company expects to contribute approximately $4.5 million to the retirement and postretirement plans in 2005. No contributions were made to these plans during the quarter ended March 31, 2005.

Note I:   Recent Accounting Pronouncements

On March 31, 2004, the Financial Accounting Standards Board (“FASB”) ratified Emerging Issues Task Force Issue No. 03-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments” (“EITF No. 03-1”), which provides guidance on recognizing other-than-temporary impairments on certain investments. EITF No. 03-1 is effective for other-than-temporary impairment evaluations for investments accounted for under Statements of Financial Accounting Standards (“SFAS”) No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” as well as non-marketable equity securities accounted for under the cost method for reporting periods beginning after June 15, 2004. EITF No. 03-1 requires that investments which have declined in value must be recorded as other-than-temporarily impaired unless the Company can assert and demonstrate its intention to hold the security for a period of time sufficient to allow for a recovery of fair value up to or beyond the cost of the investment, which might mean maturity. EITF No. 03-1 also requires disclosures assessing the ability and intent to hold investments in instances in which an investor determines that an investment with a fair value less than cost is not other-than-temporarily impaired. EITF No. 03-1 does not suspend the current requirements for other-than-temporary impairments under Staff Accounting Bulletin No. 59. In September 2004, FASB issued Proposed FSP EITF Issue 03-1-a, “Implementation Guidance for the Application of Paragraph 16 of EITF Issue No. 03-1,” which provides further guidance regarding this issue. In September, FASB also issued Proposed Staff Position EITF Issue 03-1-1, “Effective Date of Paragraphs 10-20 of EITF No. 03-1,” which defers the effective date of certain paragraphs of EITF Issue 03-1.

10

Note J:   Off-Balance Sheet Commitments, Contingencies and Contractual Obligations

The Company utilizes various off-balance sheet instruments to satisfy the financing needs of customers. These instruments represent contractual obligations of the Company to provide funding, within a specified time period, to a customer. The following table represents the outstanding obligations:

			March 31, 2005			December 31, 2004
			(in thousands)
Standby letters of credit			$	52,359		$	52,772
Commercial letters of credit				50,154			47,772
Loan commitments				1,359,368			1,386,761

Standby letters of credit represent a conditional commitment to satisfy an obligation to a third party, generally to support public and private borrowing arrangements, on behalf of the customer. Commercial letters of credit facilitate trade or commerce. Under the terms of a commercial letter of credit, as a general rule, drafts will be drawn when the underlying transaction is consumated as intended. Loan commitments represent contractual agreements to provide funding to customers over a specified time period as long as there is no violation of any condition of the contract. These loans generally will take the form of operating lines.

The Company’s potential exposure to credit loss in the event of nonperformance by the other party is represented by the contractual amount of those instruments. The credit risk associated with letters of credit and loan commitments is substantially the same as extending credit in the form of a loan; therefore, the same credit policies apply in evaluating potential letters of credit or loan commitments. The amount of collateral obtained, if deemed necessary upon the extension of credit, is based on management’s credit evaluation. The type of collateral held varies, but includes real estate, accounts receivable, inventory, and productive assets.

The Company is routinely involved in legal actions which are incidental to the business of the Company. Although it is difficult to predict the ultimate outcome of these cases, management believes, based on discussions with counsel, that any ultimate liability will not materially affect the Company’s consolidated financial position or operations.

We enter into contractual obligations in the ordinary course of business, including long-term debt issuance for the funding of operations and leases for premises and equipment. There have been no significant changes to the contractual obligations reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.

11

Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

Application of Critical Accounting Policies

In preparing the financial statements, we follow accounting principles generally accepted in the United States of America, which in many cases require us to make assumptions, estimates and judgments that affect the amounts reported. Many of these policies are relatively straightforward; however, management has identified the accounting policies described below as those that are critical to an understanding of our consolidated financial statements and management’s discussion and analysis due to the judgments, estimates and assumptions inherent in those policies.

The difficulty in applying these policies arises from the assumptions, estimates and judgments that have to be made currently about matters that are inherently uncertain, such as future economic conditions, operating results and valuations as well as management intentions. As the difficulty increases, the level of precision decreases, meaning that actual results can and probably will be different from those currently estimated. We base our assumptions, estimates and judgments on a combination of historical experiences and other relevant factors.

Reserves for Credit Losses.   In general, determining the amount of the reserve for credit losses requires the use of significant judgment and estimates by management. We maintain an allowance for credit losses to absorb probable losses in the loan and lease portfolio based on a quarterly analysis of the portfolio and expected future losses. Reserves for credit losses include charges to reduce the recorded balances of loans receivable and real estate to their estimated net realizable value or fair value, as applicable.

Investment Securities.   Investments in marketable equity and debt securities are classified into three categories – held-to-maturity, available-for-sale, or trading – pursuant to SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities.” As of March 31, 2005, no investments were classified as trading securities. Held-to-maturity securities, which are valued at amortized historical cost, represent investments for which we have the ability and intent to hold to maturity. We currently classify our investments in certain municipal bond obligations and certain U.S. government agency obligations as held-to-maturity securities. Available-for-sale securities consist of debt and equity securities that will be held for indefinite periods of time, including securities that may be sold in response to changes in market interest or prepayment rates, needs for liquidity, or changes in the availability or yield of alternative investments. These securities are valued at current market value, with the resulting unrealized holding gains and losses excluded from earnings and reported, net of tax, as a separate component of shareholders’ equity until realized. A portion of the unrealized holding gains and losses is allocated to redeemable class A common stock. Gains or losses on these securities are computed based on the amortized cost of the specific securities when sold.

Management periodically evaluates investment securities for other than temporary declines in fair value. Declines in fair value of individual investment securities below their amortized cost that are deemed to be other than temporary are written down to current market value and

12

included in earnings as realized losses in the period the securities are deemed to be impaired. The initial indicator of impairment is a sustained decline in market price below the amount recorded for the investment. We consider the length of time and the extent to which market value has been less than cost, the cause of the price decline, the extent to which the price decline is due to the general level of interest rates or other issuer specific factors, the issuer’s financial condition and ability to make future payments in a timely manner, and our investment horizon. Our analysis as of March 31, 2005 indicates that our unrealized losses were caused by market interest rate increases. We intend to hold these investments until a recovery of fair value, which may be at maturity, and, as a result, there were no investment securities which management identified to be other-than-temporarily impaired for the quarter ended March 31, 2005. If the financial markets experience deterioration and investments decline in fair value, charges to income could occur in future periods.

Goodwill and Other Intangible Assets.   SFAS No. 142, “Accounting for Goodwill and Other Intangible Assets,” establishes standards for the amortization of acquired intangible assets and the non-amortization and impairment assessment of goodwill. In addition, SFAS No. 147, “Acquisitions of Certain Financial Institutions,” establishes standards for unidentifiable intangible assets acquired specifically in branch purchases that qualify as business combinations. At March 31, 2005, we had $84.2 million of goodwill, which is not subject to periodic amortization, and $14.6 million in other intangible assets, which is subject to periodic amortization. The largest components of our other intangible assets at March 31, 2005 were core deposit premiums at $11.2 million and mortgage servicing rights at $1.5 million. The core deposit premiums are being amortized over an estimated deposit life of 10 years from the date of acquisition. Other intangibles are being amortized on the basis of estimated remaining life.

We performed the annual impairment tests on our goodwill assets in December 2004. No events or changes in circumstances have occurred since that test that would indicate that such assets might be impaired, and we have concluded that the recorded value of goodwill was not impaired as of March 31, 2005. There are many assumptions and estimates underlying the determination of impairment. Impairment testing is based on a determination of the value of each reporting unit, using readily available market and earnings data for comparable publicly-traded organizations within the same time period, and comparing that calculation of value to the current book value of the unit. Another estimate using different, but still reasonable, assumptions could produce a significantly different result. Additionally, future events could cause management to conclude impairment indicators exist and our goodwill is impaired, which would result in us recording an impairment loss. Any resulting impairment loss could have a material adverse impact on our financial condition and results of operations.

Retirement Plan Accounting.   We provide pension benefits to substantially all employees. We account for these plans in accordance with SFAS No. 87, “Employers’ Accounting for Pensions,” which requires us to make a number of economic and other assumptions that can have a significant impact on amounts recorded in our income statement and statement of financial position. Assumptions regarding long-term discount rates and the expected return on pension plan assets can have the most material impact on our financial results and funding requirements.

13

Income Taxes.   The determination of our current and deferred income taxes is a critical accounting estimate requiring significant management judgment. We make these estimates based on a complex analysis of many factors, including our interpretation of existing federal and state income tax laws as they relate to our activities, the differences between the tax and financial reporting bases of assets and liabilities (temporary differences), the expected timing of the reversal of these temporary differences, and current financial accounting standards. Such interpretations could differ from those of the various federal and state tax authorities that examine us periodically. If management’s estimates and assumptions vary from the views of the taxing authorities, adjustments to the periodic tax accruals may be necessary.

Our accounting policies for the reserve for credit losses, investment securities, goodwill and other intangible assets, retirement plans, and income taxes are outlined in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004. We believe that there have been no significant changes to the methods described in that Annual Report for making the estimates and judgments necessary to apply these policies.

Overview

Earnings.   We reported net income of $16.2 million or $1.35 in basic and diluted earnings per share for the first quarter of 2005. This compares to $14.4 million or $1.20 in basic and diluted earnings per share in the first quarter of 2004. Return on average equity was 12.93% for the first quarter of 2005 compared to 12.23% for the same quarter of 2004. Return on average assets increased to 1.07% in the first quarter of 2005 from 1.03% in the first quarter of 2004.

Results of Operations

Net Interest Income.   Net interest income for the first quarter of 2005 was $53.4 million, an increase of $7.6 million from the $45.8 million reported for the same period a year ago. Meanwhile, our net interest margin increased to 3.89% in the first quarter of 2005 from 3.66% in the first quarter of 2004 while our average loans and leases increased $622.2 million or 15.8% when comparing the same two quarters. The increase in our net interest margin from the first quarter of 2004 to the first quarter of 2005 is primarily the result of increases in short-term interest rates which began in June 2004. The average yield on our earning assets increased 49 basis points when comparing the first quarter of 2005 with the first quarter of 2004, while the cost of our interest bearing liabilities increased by 32 basis points. However, our net interest margin declined by nine basis points when comparing the first quarter of 2005 to the fourth quarter of 2004, as the cost of interest bearing liabilities increased by 26 basis points when comparing those two periods while the average yield on earning assets increased by only 14 basis points.

14

The following table sets forth, for the periods indicated, information regarding average balances of assets and liabilities and the total dollar amounts of interest income from interest bearing assets and interest expense on interest bearing liabilities. In addition, the table showS resultant yields or costs, net interest income, net interest spread, and net interest margin:

			For the Three Months Ended March 31,
			(unaudited)
			2005									2004
			Average Balance			Interest (1)			Average Rate/ Yield			Average Balance			Interest (1)			Average Rate/ Yield
			(dollars in thousands)
Assets
Loans and Leases (2)
Commercial and other			$	1,015,730		$	14,976			5.98	%	$	891,407		$	11,634			5.25	%
Commercial real estate				1,604,402			24,870			6.29			1,342,965			19,865			5.95
Agricultural				464,977			7,146			6.23			421,914			6,008			5.73
Residential real estate				940,791			14,636			6.31			800,596			11,031			5.54
Consumer				374,745			5,924			6.41			342,997			5,467			6.41
Tax-exempt				168,059			3,094			7.47			146,619			2,780			7.63
Total Loans and Leases				4,568,704			70,646			6.27			3,946,498			56,785			5.79
Reserve for Loan Losses				(59,472	)								(60,171	)
Net Loans and Leases				4,509,232									3,886,327
Securities (3)
Taxable				1,010,987			8,528			3.42			1,112,358			9,114			3.30
Tax-exempt				190,565			3,338			7.10			180,473			3,277			7.30
Total Securities				1,201,552			11,866			4.01			1,292,831			12,391			3.85
Federal funds sold				13,602			57			1.70			8,620			20			0.93
Other earning assets				4,395			17			1.57			4,311			24			2.24
				17,997			74			1.67			12.931			44			1.37
Total Earning Assets (4)			$	5,788,253		$	82,586			5.79	%		5,252,260		$	69,220			5.30	%
Cash and due from banks				152,797									148,375
Other non interest earning assets				260,004									260,760
Total Assets			$	6,141,582								$	5,601,224
Liabilities and Shareholders’ Equity
Noninterest bearing deposits			$	764,328								$	686,289
Interest bearing deposits
Savings and NOW accounts				500,690		$	668			0.54	%		488,168		$	286			0.24	%
Other interest bearing checking				277,926			222			0.32			261,995			74			0.11
Money market savings				1,393,483			6,200			1.80			1,438,397			4,974			1.39
Savings certificates				899,385			6,300			2.84			880,319			5,768			2.64
Certificates over $100,000				373,928			2,765			3.00			211,724			1,322			2.51
Total Interest Bearing Deposits				3,445,412			16,155			1.90			3,280,603			12,424			1.52
Total Deposits				4,209,740									3,966,892
Short-term borrowings				990,054			5,314			2.18			651,588			1,886			1.16
Long-term debt				370,919			5,550			6.07			460,154			7,079			6.19
Total Interest Bearing Liabilities			$	4,806,385		$	27,019			2.28	%	$	4,392,345			21,389			1.96	%
Other noninterest bearing liabilities				63,021									48,879
Total Liabilities				5,633,734									5,127,513
Minority Interest				150									150
Redeemable Class A Common Stock				40,615									37,885
Shareholders’ equity				467,083									435,676
Total Liabilities and Equity			$	6,141,582								$	5,601,224
Net interest income						$	55,567								$	47,831
Net interest spread										3.51	%								3.34	%
Net interest margin										3.89	%								3.66	%

_________________
(1)		Interest income includes $2,200 in 2005 and $2,272 in 2004 to adjust to a fully taxable basis using the federal statutory rate of 35%.
(2)		Net of unearned discount and includes nonaccrual loans and leases.
(3)		Excluding net unrealized gain (loss) on available-for-sale securities.
(4)		Before deducting the reserve for credit losses.

15