Authorized Shares — On May 27, 2010, the Company's shareholders approved an amendment to the Company's Articles of Incorporation to increase the number of authorized shares of common stock from 30,000,000 to 60,000,000. The additional authorized shares provide the Company greater flexibility for stock splits and stock dividends, issuances under employee benefit plans, financings, corporate mergers and acquisitions, and other general corporate purposes. As of December 31, 2011, the Company also had 10,000,000 authorized shares of preferred stock.

Series A Preferred Stock — On November 21, 2008, the Company issued 40,000 shares of Series A Fixed Rate Cumulative Perpetual Preferred Stock ("Series A Preferred Stock") to the U.S. Treasury under the terms of the U.S. Treasury Capital Purchase Program for $40,000,000 with a liquidation preference of $1,000 per share. The Series A Preferred Stock carries a coupon of 5% for five years and 9% thereafter. The Series A Preferred Stock is non-voting, cumulative, and perpetual and may be redeemed at 100% of its liquidation preference plus accrued and unpaid dividends. In addition, the Company issued a warrant to the U.S. Treasury to purchase 462,963 shares of the Company's common stock. The warrant is exercisable immediately at a price of $12.96 per share, will expire after a period of 10 years from issuance and is transferable by the U.S. Treasury. The U.S. Treasury may transfer a portion or portions of the warrant, and/or exercise the warrant at any time. The U.S. Treasury has agreed not to exercise voting power with respect to any common shares issued to it upon exercise of the warrant. At December 31, 2011, there were no changes to the number of common shares covered by the warrant nor had the U.S. Treasury exercised any portion of the warrant.

Under the terms of the Capital Purchase Program, the Company is prohibited from increasing dividends above $0.08 per share on its common stock, and from making certain repurchases of equity securities, including its common stock, without the U.S. Treasury's consent. Furthermore, as long as the preferred stock issued to the U.S. Treasury is outstanding, dividend payments and repurchases or redemptions relating to certain equity securities, including the Company's common stock, are prohibited until all accrued and unpaid dividends are paid on the Series A Preferred Stock.

As permitted under the terms of the Series A Preferred Stock, in November 2009, the Company announced that it was exercising its right to suspend payment of dividends on its Series A Preferred Stock. As a result, the Company had accrued but had not paid approximately $2,810,000 in dividends on its Series A Preferred Stock as of December 31, 2010. In 2011, the Board of Directors declared dividends on its Series A Preferred Stock in an aggregate amount of $4,672,000. A $4,172,000 dividend was paid on August 1, 2011. Of the August 2011 aggregate dividend declared and paid, $3,500,000 was attributable to the dividend periods ending November 15, 2009 through May 15, 2011, $172,000 was for interest on the deferred dividend payments, and $500,000 was the dividend payable for the period ended August 15, 2011. On November 15, 2011, the Company paid the regularly scheduled dividend of $500,000, per the terms of the Series A Preferred Stock, and is current with respect to dividends accrued and owed to the U.S. Treasury.

Warrants — During 2008, in conjunction with the issuance of the Series A preferred stock, the Company issued a warrant with an initial exercise price of $12.96 per share of common stock, with an allocated fair value of $1,979,000. The estimated fair value of the warrant was recorded as a discount on the Series A Preferred Stock, with an offsetting credit to paid-in-capital. The discount on the preferred stock is being accreted on the effective yield method over five years as a charge to retained earnings, thus reducing net income available to common shareholders. The warrant may be exercised at any time on or before November 21, 2018. The warrant, and all rights under the warrant, are otherwise transferable. As of December 31, 2011, there were 462,963 shares issuable upon exercise of the warrant.

Private Placement — On June 21, 2010, the Company issued to various institutional investors 53,996 shares of Series B Mandatorily Convertible Cumulative Perpetual Preferred Stock ("Series B Preferred Stock") and 21,004 shares of Series C Convertible Perpetual Preferred Stock ("Series C Preferred Stock") for an aggregate purchase price of $75,000,000. The Series B Preferred Stock was mandatorily convertible into common stock, upon approval by the shareholders, at a conversion price of $3.75 per share. The Series C Preferred Stock is mandatorily convertible into common stock at a conversion price of $3.75 per share upon both approval by the shareholders and thereafter, a subsequent transfer of the Series C Preferred Stock to third parties not affiliated with the holder in a widely dispersed offering. The Series B Preferred Stock and the Series C Preferred Stock did not include a beneficial conversion feature, as the conversion price of $3.75 per share was not below the fair market value of the Company's common stock on the commitment date.

At the Company's Special Meeting of shareholders held on September 15, 2010, the Company's shareholders approved the issuance of common stock upon the conversion of the Series B Preferred Stock and upon the conversion of the Series C Preferred Stock. As a result, on September 16, 2010, the Series B Preferred Stock was converted into 14,398,992 shares of common stock of the Company and the shares of Series B Preferred Stock ceased to be outstanding.

The Series C Preferred Stock remains outstanding until it has been converted into common stock in accordance with its terms. The Series C Preferred Stock is non-voting except in the case of certain transactions that would affect the rights of the holders of the Series C Preferred Stock or applicable law. Holders of Series C Preferred Stock will receive dividends if and only to the extent dividends are paid to holders of common stock. The Series C Preferred Stock is not redeemable by the Company or by the holders and has a liquidation preference of $1,000 per share. The Series C Preferred Stock ranks senior to the Company's common stock and ranks on parity with the Company's Series A Preferred Stock.

Earnings (Loss) Per Share — Basic earnings (loss) per common share is computed by dividing net income (loss), less dividends and discount accretion on preferred stock, by the weighted average common shares outstanding. On June 21, 2010, the Company issued to various institutional investors 53,996 shares of Series B Mandatorily Convertible Cumulative Perpetual Preferred Stock ("Series B Preferred Stock") and 21,004 shares of Series C Convertible Perpetual Preferred Stock ("Series C Preferred Stock"). Subject to the terms of the Series B Preferred Stock, the 53,996 shares of Series B Preferred Stock converted into 14,398,992 shares of common stock on September 16, 2010. The 21,004 shares of Series C Preferred Stock remain outstanding as of December 31, 2011, and are convertible into 5,601,000 shares of common stock. The Series B Preferred Stock and Series C Preferred Stock participate in the earnings of the Company and, therefore, the shares issued on the conversion of the Series B Preferred Stock and the Series C Preferred Stock are considered outstanding under the two-class method of computing basic earnings per common share during periods of earnings. The shares issued on the conversion of the Series C Preferred Stock are not considered outstanding for the year ended December 31, 2010 due to the net loss available to common shareholders for the period. Diluted earnings (loss) per share reflect potential dilution from outstanding stock options and common stock warrants, using the treasury stock method, which amounted to 3,810 shares at December 31, 2011. Due to the Company's net loss allocable to common shareholders for the years ended December 31, 2010 and 2009, all stock options and common stock warrants were excluded from the computation of diluted loss per average common share. A reconciliation of these factors used in computing basic and diluted earnings (loss) per common share is as follows:

	Year ended December 31,

	2011		2010			2009
	(Dollars in thousands)
Net income (loss) available to common shareholders	$	9,038	$	(58,255	)	$	(14,361	)
Less: net income allocated to Series C Preferred Stock		1,589		N/A			N/A

Net income (loss) allocated to common shareholders	$	7,449	$	(58,255	)	$	(14,361	)

Weighted average common shares outstanding for basic earnings (loss) per common share		26,266,584		16,026,058			11,820,509
Dilutive effect of stock options outstanding, using the the treasury stock method		3,810		N/A			N/A

Shares outstanding for diluted earnings (loss) per common share		26,270,394		16,026,058			11,820,509

Comprehensive Income (Loss) — Comprehensive income (loss) consists of other comprehensive income (loss) and net income (loss). Other comprehensive income (loss) refers to gains and losses that are included in comprehensive income (loss) but are excluded from net income (loss) because they have been recorded directly in equity under the provisions of other accounting guidance. The following is a summary of the components of comprehensive income (loss):

	Year ended December 31,

	2011			2010			2009
	(Dollars in thousands)
Net income (loss)	$	11,371		$	(55,857	)	$	(11,985	)
Net unrealized holding gains (losses) on available-for-sale securities and I/O strips during the year,		12,050			(2,078	)		505
Reclassification adjustment for (gains) realized in income		(459	)		(1,955	)		(231	)
Deferred income tax expense/(benefit)		(4,868	)		1,693			(115	)

Change in unrealized gains (losses) on available-for-sale securities and I/O strips, net of deferred income tax		6,723			(2,340	)		159

Net pension and other benefit plan liability adjustment		(1,926	)		418			1,312
Deferred income tax expense/(benefit)		809			(175	)		(552	)

Change in pension and other benefit plan liability, net of deferred income tax		(1,117	)		243			760

Other comprehensive income (loss)		5,606			(2,097	)		919

Total comprehensive income (loss)	$	16,977		$	(57,954	)	$	(11,066	)

Accumulated other comprehensive income (loss) consisted of the following items, net of deferred income tax, at December 31:

	2011			2010

	(Dollars in thousands)
Net unrealized loss on split-dollar life insurance benefit plan	$	(2,230	)	$	(2,112	)
Net unrealized loss on defined benefit plan		(3,025	)		(2,026	)
Net unrealized gain (loss) on securities available-for-sale		4,995			(1,699	)
Net unrealized gain on I/O strips		1,215			1,186

Accumulated other comprehensive income (loss)	$	955		$	(4,651	)