For the quarterly period ended March 31, 2013 | Commission File Number 0-13823 |
North Carolina | 56-1456589 | |
(State of Incorporation) | (I.R.S. Employer Identification No.) | |
150 South Fayetteville Street | ||
Asheboro, North Carolina | 27203 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer o | Accelerated filer x | Non-accelerated filer o | Smaller reporting Company o |
(Do not check if a smaller reporting company) |
PART I. FINANCIAL INFORMATION | ||
Item 1 | ||
Item 2 | ||
Item 3 | ||
Item 4 | ||
PART II. OTHER INFORMATION | ||
Item 1 | ||
Item 1A | ||
Item 2 | ||
Item 3 | ||
Item 4 | ||
Item 5 | ||
Item 6 | ||
(in thousands, except share and per share data) | March 31, 2013 | December 31, 2012* | ||||||
Assets | ||||||||
Cash and due from banks | $ | 26,991 | $ | 38,552 | ||||
Interest-bearing bank balances | 235,302 | 201,058 | ||||||
Investment securities: | ||||||||
Available-for-sale, at estimated fair value (amortized cost of $493,631 in 2013 and $558,818 in 2012) | 492,355 | 564,850 | ||||||
Held-to-maturity (estimated fair value of $73,245 in 2013) | 73,515 | — | ||||||
Loans held for sale | 5,012 | 6,974 | ||||||
Loans held for investment | 1,113,765 | 1,177,035 | ||||||
Less: Allowance for loan losses | (29,641 | ) | (29,314 | ) | ||||
Net loans held for investment | 1,084,124 | 1,147,721 | ||||||
Premises and equipment, net | 52,449 | 52,725 | ||||||
Other real estate owned and property acquired in settlement of loans | 46,537 | 63,131 | ||||||
Core deposit premiums and other intangibles | 7,445 | 7,495 | ||||||
Goodwill | 4,205 | 4,205 | ||||||
Bank-owned life insurance | 39,068 | 38,792 | ||||||
Other assets | 26,308 | 26,062 | ||||||
Total Assets | $ | 2,093,311 | $ | 2,151,565 | ||||
Liabilities | ||||||||
Deposits: | ||||||||
Noninterest-bearing demand deposits | $ | 265,455 | $ | 251,235 | ||||
Interest-bearing deposits: | ||||||||
Demand, savings and money market deposits | 899,115 | 892,576 | ||||||
Time deposits of $100,000 or more | 258,165 | 290,166 | ||||||
Other time deposits | 433,426 | 473,011 | ||||||
Total deposits | 1,856,161 | 1,906,988 | ||||||
Retail repurchase agreements | 7,301 | 8,675 | ||||||
Federal Home Loan Bank advances | 58,317 | 58,328 | ||||||
Junior subordinated debentures | 56,702 | 56,702 | ||||||
Other liabilities | 25,456 | 22,427 | ||||||
Total Liabilities | 2,003,937 | 2,053,120 | ||||||
Shareholders' Equity | ||||||||
Preferred stock Series A, $10.00 par value; authorized 200,000 shares, no shares issued and outstanding in 2013 and 2012 | — | — | ||||||
Preferred stock, $1.00 par value, authorized 15,000,000 shares, no shares issued and outstanding in 2013 and 2012 | — | — | ||||||
Common stock, no par value; authorized 2,500,000,000 shares, issued 21,698,115 shares in 2013 and 2012 | 461,057 | 460,955 | ||||||
Accumulated deficit | (366,783 | ) | (362,187 | ) | ||||
Accumulated other comprehensive loss | (4,900 | ) | (323 | ) | ||||
Total Shareholders' Equity | 89,374 | 98,445 | ||||||
Total Liabilities and Shareholders' Equity | $ | 2,093,311 | $ | 2,151,565 |
(in thousands, except share and per share data) | Three Months Ended March 31, | ||||||
2013 | 2012 | ||||||
Interest Income | |||||||
Interest and fees on loans | $ | 14,785 | $ | 16,959 | |||
Interest and dividends on investment securities: | |||||||
Taxable income | 3,059 | 2,669 | |||||
Non-taxable income | 14 | 15 | |||||
Other interest income | 212 | 350 | |||||
Total interest income | 18,070 | 19,993 | |||||
Interest Expense | |||||||
Deposits | 2,247 | 4,223 | |||||
Retail repurchase agreements | 4 | 8 | |||||
Federal Home Loan Bank advances | 382 | 279 | |||||
Other borrowed funds | 264 | 303 | |||||
Total interest expense | 2,897 | 4,813 | |||||
Net Interest Income before Provision for Loan Losses | 15,173 | 15,180 | |||||
Provision for loan losses | 110 | 3,067 | |||||
Net Interest Income after Provision for Loan Losses | 15,063 | 12,113 | |||||
Noninterest Income | |||||||
Service charges on deposit accounts | 1,376 | 1,816 | |||||
Mortgage loan income | 744 | 36 | |||||
Cardholder and merchant services income | 1,069 | 1,141 | |||||
Trust and investment services | 241 | 202 | |||||
Bank owned life insurance | 263 | 306 | |||||
Other service charges, commissions and fees | 258 | 254 | |||||
Securities gains (losses), net | 2,377 | (46 | ) | ||||
Other income | 205 | 117 | |||||
Total noninterest income | 6,533 | 3,826 | |||||
Noninterest Expense | |||||||
Personnel expense | 10,679 | 10,026 | |||||
Net occupancy expense | 1,831 | 1,561 | |||||
Furniture, equipment and data processing expense | 2,368 | 2,072 | |||||
Professional fees | 1,493 | 1,542 | |||||
Stationery, printing and supplies | 186 | 141 | |||||
Advertising and marketing | 665 | 129 | |||||
Other real estate owned expense | 883 | 5,519 | |||||
Credit/debit card expense | 425 | 410 | |||||
FDIC insurance | 670 | 598 | |||||
Loan collection expense | 1,572 | 746 | |||||
Merger-related expense | 1,509 | 2,258 | |||||
Core deposit intangible amortization | 352 | 352 | |||||
Other expense | 1,706 | 1,494 | |||||
Total noninterest expense | 24,339 | 26,848 | |||||
Loss from continuing operations, before income taxes | (2,743 | ) | (10,909 | ) | |||
Income tax expense (benefit) - continuing operations | 1,853 | (77 | ) | ||||
Loss from continuing operations, net of tax | (4,596 | ) | (10,832 | ) | |||
Loss from discontinued operations, net of tax | — | (27 | ) | ||||
Net loss | (4,596 | ) | (10,859 | ) | |||
Weighted average number of common shares outstanding - basic and diluted | 21,698,115 | 21,102,465 | |||||
Net loss per common share from continuing operations - basic and diluted | $ | (0.21 | ) | $ | (0.51 | ) | |
Net loss per common share from discontinued operations - basic and diluted | — | — | |||||
Net loss per common share - basic and diluted | (0.21 | ) | (0.51 | ) |
(dollars in thousands) | Three Months Ended March 31, | ||||||
2013 | 2012 | ||||||
Net loss | $ | (4,596 | ) | $ | (10,859 | ) | |
Other comprehensive income: | |||||||
Unrealized holdings gains (losses) arising during the period on available-for-sale securities | (4,934 | ) | 1,158 | ||||
Tax effect | 1,949 | (456 | ) | ||||
Unrealized holdings gains (losses) arising during the period on available-for-sale securities, net of tax | (2,985 | ) | 702 | ||||
Reclassification adjustment for (gain) losses on available-for-sale securities included in net income | (2,377 | ) | 46 | ||||
Tax effect | 939 | (18 | ) | ||||
Reclassification adjustment for (gain) losses on available-for-sale securities included in net income, net of tax | (1,438 | ) | 28 | ||||
Change in defined benefit plans liability | (254 | ) | — | ||||
Tax effect | 100 | — | |||||
Change in defined benefit plans liability, net of tax | (154 | ) | — | ||||
Other comprehensive income (loss), net of tax: | (4,577 | ) | 730 | ||||
Comprehensive loss | $ | (9,173 | ) | $ | (10,129 | ) |
Accumulated | ||||||||||||||||||||||||||
(dollars in thousands, except share and per share data) | Other | |||||||||||||||||||||||||
Preferred Stock | Common Stock | Accumulated | Comprehensive | |||||||||||||||||||||||
Shares | Amount | Shares | Amount | Deficit | Loss | Total | ||||||||||||||||||||
Balance, December 31, 2011 | — | $ | — | 21,102,668 | $ | 455,166 | $ | (322,182 | ) | $ | (3,969 | ) | $ | 129,015 | ||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||
Net loss | — | — | — | — | (10,859 | ) | — | (10,859 | ) | |||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | 730 | 730 | |||||||||||||||||||
Total comprehensive loss | (10,129 | ) | ||||||||||||||||||||||||
Expense related to 2011 issuance of common stock | — | — | — | (913 | ) | — | — | (913 | ) | |||||||||||||||||
Return of common stock not received for fractional shares rounding purposes in the 1:100 reverse stock split | — | — | (586 | ) | — | — | — | — | ||||||||||||||||||
Stock options: | ||||||||||||||||||||||||||
Compensation expense recognized | — | — | — | 1 | — | — | 1 | |||||||||||||||||||
Balance, March 31, 2012 | — | $ | — | 21,102,082 | $ | 454,254 | $ | (333,041 | ) | $ | (3,239 | ) | $ | 117,974 | ||||||||||||
Balance, December 31, 2012 | — | $ | — | 21,698,115 | $ | 460,955 | $ | (362,187 | ) | $ | (323 | ) | $ | 98,445 | ||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||
Net loss | — | — | — | — | (4,596 | ) | — | (4,596 | ) | |||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | (4,577 | ) | (4,577 | ) | |||||||||||||||||
Total comprehensive loss | (9,173 | ) | ||||||||||||||||||||||||
Stock options: | ||||||||||||||||||||||||||
Compensation expense recognized | — | — | — | 102 | — | — | 102 | |||||||||||||||||||
Balance, March 31, 2013 | — | $ | — | 21,698,115 | $ | 461,057 | $ | (366,783 | ) | $ | (4,900 | ) | $ | 89,374 |
(dollars in thousands) | Three Months Ended March 31, | |||||||
2013 | 2012 | |||||||
Operating Activities | ||||||||
Net loss | $ | (4,596 | ) | $ | (10,859 | ) | ||
Net loss from discontinued operations | — | (27 | ) | |||||
Net loss from continuing operations | (4,596 | ) | (10,832 | ) | ||||
Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
Depreciation and amortization of premises and equipment | 728 | 981 | ||||||
Provision for loan losses | 110 | 3,067 | ||||||
Deferred income taxes (benefit) | 1,853 | (77 | ) | |||||
Deferred loan fees and costs, net | 367 | (2,270 | ) | |||||
Premium amortization and discount accretion of investment securities, net | 1,386 | 666 | ||||||
Net (gain) loss on sale of investment securities | (2,377 | ) | 46 | |||||
Amortization of core deposit premiums | 352 | 352 | ||||||
Net accretion of purchase accounting adjustments | (4,419 | ) | (2,592 | ) | ||||
Adjustment to goodwill | — | (300 | ) | |||||
Stock compensation expense | 102 | 1 | ||||||
Increase in cash surrender value of bank-owned life insurance, net | (276 | ) | (327 | ) | ||||
Loans held for sale: | ||||||||
Origination of loans held for sale | (30,954 | ) | — | |||||
Net proceeds from sale of loans held for sale | 33,507 | — | ||||||
Net loss (gain) on sale of loans held for sale | (591 | ) | — | |||||
Mortgage servicing rights capitalized | (348 | ) | — | |||||
Mortgage servicing rights amortization and impairment | 46 | — | ||||||
Net loss on sales and write-downs of other real estate owned | 219 | 3,877 | ||||||
Changes in assets and liabilities: | ||||||||
Decrease (increase) in accrued interest receivable and other assets | 994 | (532 | ) | |||||
Increase in accrued interest payable and other liabilities | 2,775 | 511 | ||||||
Net cash used in operating activities of continuing operations | (1,122 | ) | (7,429 | ) | ||||
Net effect of discontinued operations | — | (873 | ) | |||||
Net cash used in operating activities | (1,122 | ) | (8,302 | ) | ||||
Investing Activities | ||||||||
Available-for-sale securities: | ||||||||
Proceeds from sales | 148,306 | 10,760 | ||||||
Proceeds from maturities, calls and principal repayments | 20,971 | 21,021 | ||||||
Purchases | (103,093 | ) | (73,010 | ) | ||||
Held-to-maturity securities: | ||||||||
Purchases | (73,524 | ) | — | |||||
Net (increase) decrease in loans held for investment | 65,979 | (35,603 | ) | |||||
Proceeds from sales of other real estate owned | 17,614 | 10,874 | ||||||
Purchases of premises and equipment | (505 | ) | (558 | ) | ||||
Proceeds from sales of premises and equipment | 37 | — | ||||||
Expenses paid in 2012 related to 2011 capital raise | — | (913 | ) | |||||
Net cash (used in) provided by investing activities | 75,785 | (67,429 | ) | |||||
Financing Activities | ||||||||
Net decrease in deposits | (50,595 | ) | (8,626 | ) | ||||
Decrease in retail repurchase agreements | (1,374 | ) | (500 | ) | ||||
Decrease in Federal Home Loan Bank advances | (11 | ) | (10 | ) | ||||
Net cash used in financing activities of continuing operations | (51,980 | ) | (9,136 | ) | ||||
Net effect of discontinued operations | — | — | ||||||
Net cash used in financing activities | (51,980 | ) | (9,136 | ) | ||||
Net (Decrease) Increase in Cash and Cash Equivalents | 22,683 | (84,867 | ) | |||||
Cash and Cash Equivalents at Beginning of Period | 239,610 | 553,416 | ||||||
Cash and Cash Equivalents at End of Period | $ | 262,293 | $ | 468,549 | ||||
Supplemental disclosure of cash flow information | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 2,754 | $ | 5,099 | ||||
Noncash transactions: | ||||||||
Foreclosed loans transferred to other real estate owned | 3,969 | 8,935 | ||||||
Loans to facilitate the sale of other real estate owned | 2,625 | — | ||||||
Transfer of loans from held for investment to held for sale | — | 600 | ||||||
Unrealized securities gains/(losses), net of income taxes | (4,423 | ) | 730 | |||||
Employee benefit plan costs, net of income taxes | (154 | ) | — |
(dollars in thousands) | Three Months Ended March 31, | |||||||
2013 | 2012 | |||||||
Interest Income | ||||||||
Total interest income | $ | — | $ | — | ||||
Interest Expense | ||||||||
Total interest expense | — | — | ||||||
Net Interest Income before Provision for Loan Losses | — | — | ||||||
Provision for loan losses | — | — | ||||||
Net Interest Income after Provision for Loan Losses | — | — | ||||||
Noninterest Income | ||||||||
Total noninterest income | — | — | ||||||
Noninterest Expense | ||||||||
Personnel expense | — | 1 | ||||||
Net occupancy expense | — | 1 | ||||||
Professional fees | — | 25 | ||||||
Total noninterest expense | — | 27 | ||||||
Loss before income taxes | — | (27 | ) | |||||
Income tax (benefit)/expense | — | — | ||||||
Net loss from discontinued operations, net of tax | $ | — | $ | (27 | ) |
March 31, 2013 | ||||||||||||||||
(dollars in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
Available for Sale: | ||||||||||||||||
Obligations of: | ||||||||||||||||
U.S. government sponsored enterprises | $ | 2,069 | $ | 38 | $ | — | $ | 2,107 | ||||||||
Residential mortgage-backed securities-GSE | 409,949 | 1,794 | 3,279 | 408,464 | ||||||||||||
Residential mortgage-backed securities-Private | 21,992 | 879 | 250 | 22,621 | ||||||||||||
Commercial mortgage backed securities-GSE | 23,054 | — | 658 | 22,396 | ||||||||||||
Corporate notes | 36,567 | 240 | 40 | 36,767 | ||||||||||||
Total | $ | 493,631 | $ | 2,951 | $ | 4,227 | $ | 492,355 | ||||||||
Held to Maturity: | ||||||||||||||||
Residential mortgage-backed securities-GSE | 73,515 | 1 | 271 | 73,245 | ||||||||||||
Total | $ | 567,146 | $ | 2,952 | $ | 4,498 | $ | 565,600 | ||||||||
December 31, 2012 | ||||||||||||||||
(dollars in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
Available for Sale: | ||||||||||||||||
Obligations of: | ||||||||||||||||
U.S. Treasury and government agencies | $ | 6,646 | $ | 335 | $ | — | $ | 6,981 | ||||||||
U.S. government sponsored enterprises | 22,118 | 55 | — | 22,173 | ||||||||||||
States and political subdivisions | 5,918 | 120 | — | 6,038 | ||||||||||||
Residential mortgage-backed securities-GSE | 436,344 | 5,678 | 948 | 441,074 | ||||||||||||
Residential mortgage-backed securities-Private | 22,649 | 750 | 454 | 22,945 | ||||||||||||
Commercial mortgage backed securities-GSE | 23,150 | 209 | — | 23,359 | ||||||||||||
Commercial mortgage backed securities-Private | 5,283 | 34 | — | 5,317 | ||||||||||||
Corporate notes | 36,710 | 270 | 17 | 36,963 | ||||||||||||
Total | $ | 558,818 | $ | 7,451 | $ | 1,419 | $ | 564,850 |
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||
(dollars in thousands) | Estimated Fair Value | Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | ||||||||||||||
March 31, 2013 | ||||||||||||||||||||
Available for Sale: | ||||||||||||||||||||
Residential mortgage-backed securities-GSE | $ | 284,396 | $ | 3,279 | $ | — | $ | — | $ | 284,396 | $ | 3,279 | ||||||||
Residential mortgage-backed securities-Private | 3,365 | 217 | 4,025 | 33 | 7,390 | 250 | ||||||||||||||
Commercial mortgage-backed securities-GSE | 22,396 | 658 | — | — | 22,396 | 658 | ||||||||||||||
Corporate notes | — | — | 3,234 | 40 | 3,234 | 40 | ||||||||||||||
Total | $ | 310,157 | $ | 4,154 | $ | 7,259 | $ | 73 | $ | 317,416 | $ | 4,227 | ||||||||
Held to Maturity: | ||||||||||||||||||||
Residential mortgage-backed securities-GSE | $ | 48,036 | $ | 272 | $ | — | $ | — | $ | 48,036 | $ | 272 | ||||||||
December 31, 2012 | ||||||||||||||||||||
Obligations of: | ||||||||||||||||||||
Residential mortgage-backed securities-GSE | $ | 123,489 | $ | 904 | $ | 7,027 | $ | 44 | $ | 130,516 | $ | 948 | ||||||||
Residential mortgage-backed securities-Private | 6,482 | 438 | 1,017 | 16 | 7,499 | 454 | ||||||||||||||
Corporate notes | — | — | 3,249 | 17 | 3,249 | 17 | ||||||||||||||
Total | $ | 129,971 | $ | 1,342 | $ | 11,293 | $ | 77 | $ | 141,264 | $ | 1,419 |
Available-for-Sale | Held-to-Maturity | |||||||||||||||
(dollars in thousands) | Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | ||||||||||||
Due in one year or less | $ | 16,458 | $ | 16,551 | $ | — | $ | — | ||||||||
Due after one year through five years | 18,904 | 19,089 | — | — | ||||||||||||
Due after five years through 10 years | 3,274 | 3,234 | — | — | ||||||||||||
Due after 10 years | — | — | — | — | ||||||||||||
Total | 38,636 | 38,874 | — | — | ||||||||||||
Mortgage-backed securities | 454,995 | 453,481 | 73,515 | 73,245 | ||||||||||||
Total | $ | 493,631 | $ | 492,355 | $ | 73,515 | $ | 73,245 |
(dollars in thousands) | Pass | Special Mention | Substandard | Doubtful | ||||||||||||||||
(Ratings 1-5) | (Rating 6) | (Rating 7) | (Rating 8) | Total | ||||||||||||||||
Commercial and agricultural | $ | 67,700 | $ | 3,416 | $ | 6,076 | $ | 298 | $ | 77,490 | ||||||||||
Real estate - construction | 41,979 | 1,817 | 13,857 | — | 57,653 | |||||||||||||||
Real estate - mortgage: | ||||||||||||||||||||
1-4 family residential | 471,592 | 14,785 | 34,431 | — | 520,808 | |||||||||||||||
Commercial | 290,610 | 42,767 | 81,450 | 168 | 414,995 | |||||||||||||||
Consumer | 42,081 | 171 | 359 | 208 | 42,819 | |||||||||||||||
Total | $ | 913,962 | $ | 62,956 | $ | 136,173 | $ | 674 | $ | 1,113,765 |
(dollars in thousands) | Pass | Special Mention | Substandard | Doubtful | ||||||||||||||||
(Ratings 1-5) | (Rating 6) | (Rating 7) | (Rating 8) | Total | ||||||||||||||||
Commercial and agricultural | $ | 69,003 | $ | 3,447 | $ | 6,953 | $ | 301 | $ | 79,704 | ||||||||||
Real estate - construction | 40,117 | 2,031 | 16,266 | — | 58,414 | |||||||||||||||
Real estate - mortgage: | ||||||||||||||||||||
1-4 family residential | 504,819 | 15,855 | 32,625 | 239 | 553,538 | |||||||||||||||
Commercial | 296,271 | 50,275 | 95,126 | 164 | 441,836 | |||||||||||||||
Consumer | 42,495 | 178 | 426 | 444 | 43,543 | |||||||||||||||
Total | $ | 952,705 | $ | 71,786 | $ | 151,396 | $ | 1,148 | $ | 1,177,035 |
• | If unsecured, the loan must be charged off in full. |
• | If secured, the outstanding principal balance of the loan should be charged down to the net liquidation value of the collateral. |
• | No regularly scheduled payment has been made within four months and the determination is made that any further payment is unlikely, or |
• | The loan is unsecured, the borrower has filed for bankruptcy protection and there is no other (guarantor, etc.) support from an entity outside of the bankruptcy proceedings. |
(dollars in thousands) | Accruing | |||||||||||||||||||||||||||
30-59 days past due | 60-89 days past due | More than 90 days past due | Nonaccrual | Total past due and nonaccrual | Current and accruing | Total Loans | ||||||||||||||||||||||
PC and Originated Loans | ||||||||||||||||||||||||||||
Commercial and agricultural | $ | 30 | $ | 1 | $ | — | $ | 2,350 | $ | 2,381 | $ | 62,200 | $ | 64,581 | ||||||||||||||
Real estate - construction | 367 | — | — | 11,762 | 12,129 | 43,191 | 55,320 | |||||||||||||||||||||
Real estate - mortgage: | ||||||||||||||||||||||||||||
1-4 family residential | 2,722 | 82 | 55 | 19,111 | 21,970 | 462,224 | 484,194 | |||||||||||||||||||||
Commercial | 931 | 147 | — | 37,217 | 38,295 | 224,247 | 262,542 | |||||||||||||||||||||
Consumer | 208 | 12 | — | 63 | 283 | 40,961 | 41,244 | |||||||||||||||||||||
Total | $ | 4,258 | $ | 242 | $ | 55 | $ | 70,503 | $ | 75,058 | $ | 832,823 | $ | 907,881 | ||||||||||||||
PI Loans | ||||||||||||||||||||||||||||
Commercial and agricultural | $ | 1,056 | $ | 60 | $ | 811 | $ | — | $ | 1,927 | $ | 10,982 | $ | 12,909 | ||||||||||||||
Real estate - construction | — | 48 | 523 | — | 571 | 1,761 | 2,332 | |||||||||||||||||||||
Real estate - mortgage: | ||||||||||||||||||||||||||||
1-4 family residential | 896 | — | 3,530 | — | 4,426 | 32,481 | 36,907 | |||||||||||||||||||||
Commercial | 3,836 | 2,896 | 15,533 | — | 22,265 | 130,168 | 152,433 | |||||||||||||||||||||
Consumer | 3 | — | 1 | — | 4 | 1,299 | 1,303 | |||||||||||||||||||||
Total | $ | 5,791 | $ | 3,004 | $ | 20,398 | $ | — | $ | 29,193 | $ | 176,691 | $ | 205,884 | ||||||||||||||
Total Loans | $ | 10,049 | $ | 3,246 | $ | 20,453 | $ | 70,503 | $ | 104,251 | $ | 1,009,514 | $ | 1,113,765 |
(dollars in thousands) | Accruing | |||||||||||||||||||||||||||
30-59 days past due | 60-89 days past due | More than 90 days past due | Nonaccrual | Total past due and nonaccrual | Current and accruing | Total Loans | ||||||||||||||||||||||
PC and Originated Loans | ||||||||||||||||||||||||||||
Commercial and agricultural | $ | 515 | $ | — | $ | 50 | $ | 2,746 | $ | 3,311 | $ | 61,727 | $ | 65,038 | ||||||||||||||
Real estate - construction | 26 | 119 | — | 14,297 | 14,442 | 41,290 | 55,732 | |||||||||||||||||||||
Real estate - mortgage: | ||||||||||||||||||||||||||||
1-4 family residential | 6,173 | 880 | — | 18,372 | 25,425 | 488,898 | 514,323 | |||||||||||||||||||||
Commercial | 617 | — | 177 | 43,621 | 44,415 | 226,948 | 271,363 | |||||||||||||||||||||
Consumer | 24 | — | — | 206 | 230 | 41,957 | 42,187 | |||||||||||||||||||||
Total | $ | 7,355 | $ | 999 | $ | 227 | $ | 79,242 | $ | 87,823 | $ | 860,820 | $ | 948,643 | ||||||||||||||
PI Loans | ||||||||||||||||||||||||||||
Commercial and agricultural | $ | 100 | $ | 1 | $ | 1,103 | $ | — | $ | 1,204 | $ | 13,462 | $ | 14,666 | ||||||||||||||
Real estate - construction | 117 | — | 655 | — | 772 | 1,910 | 2,682 | |||||||||||||||||||||
Real estate - mortgage: | ||||||||||||||||||||||||||||
1-4 family residential | 1,308 | 495 | 4,678 | — | 6,481 | 32,734 | 39,215 | |||||||||||||||||||||
Commercial | 2,559 | 4,300 | 17,384 | — | 24,243 | 146,230 | 170,473 | |||||||||||||||||||||
Consumer | 4 | — | 13 | — | 17 | 1,339 | 1,356 | |||||||||||||||||||||
Total | $ | 4,088 | $ | 4,796 | $ | 23,833 | $ | — | $ | 32,717 | $ | 195,675 | $ | 228,392 | ||||||||||||||
Total Loans | $ | 11,443 | $ | 5,795 | $ | 24,060 | $ | 79,242 | $ | 120,540 | $ | 1,056,495 | $ | 1,177,035 |
March 31, 2013 | December 31, 2012 | |||||||||||||
(dollars in thousands) | Balance | Associated Reserves | Balance | Associated Reserves | ||||||||||
Impaired loans, held for sale | $ | — | $ | — | $ | — | $ | — | ||||||
Impaired loans, not individually reviewed for impairment | 5,946 | — | 6,017 | — | ||||||||||
Impaired loans, individually reviewed, with no impairment | 56,985 | — | 62,282 | — | ||||||||||
Impaired loans, individually reviewed, with impairment | 16,097 | 3,129 | 15,312 | 1,737 | ||||||||||
Total impaired loans, excluding purchased impaired * | $ | 79,028 | $ | 3,129 | $ | 83,611 | $ | 1,737 | ||||||
Purchased impaired loans with subsequent deterioration | $ | 176,048 | 5,373 | $ | 192,115 | 5,373 | ||||||||
Purchased impaired loans with no subsequent deterioration | $ | 29,836 | — | $ | 36,277 | — | ||||||||
Total Reserves | $ | 8,502 | $ | 7,110 | ||||||||||
Average impaired loans calculated using a simple average | $ | 76,319 | $ | 94,754 |
* Included at March 31, 2013 and December 31, 2012 were $3.6 million and $4.5 million, respectively, in restructured and performing loans. |
(dollars in thousands) | ||||||||
March 31, 2013 | December 31, 2012 | |||||||
Loans held for investment: | ||||||||
Commercial and agricultural | $ | 2,350 | $ | 2,746 | ||||
Real estate - construction | 11,762 | 14,297 | ||||||
Real estate - mortgage: | ||||||||
1-4 family residential | 19,111 | 18,372 | ||||||
Commercial | 37,217 | 43,621 | ||||||
Consumer | 63 | 206 | ||||||
Total nonaccrual loans | $ | 70,503 | $ | 79,242 | ||||
Loans more than 90 days delinquent, still on accrual | $ | — | $ | 227 | ||||
Total nonperforming loans | $ | 70,503 | $ | 79,469 |
Unpaid | ||||||||||||
(dollars in thousands) | Recorded | Principal | Related | |||||||||
Investment | Balance | Allowance | ||||||||||
With no related allowance recorded: | ||||||||||||
Commercial and agricultural | $ | 875 | $ | 1,413 | $ | — | ||||||
Real estate - construction | 8,953 | 14,910 | — | |||||||||
Real estate - mortgage: | ||||||||||||
1-4 family residential | 14,310 | 17,861 | — | |||||||||
Commercial | 32,847 | 40,093 | — | |||||||||
Consumer | — | — | — | |||||||||
Total | $ | 56,985 | $ | 74,277 | $ | — | ||||||
With an allowance recorded: | ||||||||||||
Commercial and agricultural | $ | 917 | $ | 917 | $ | 227 | ||||||
Real estate - construction | 2,080 | 2,159 | 501 | |||||||||
Real estate - mortgage: | ||||||||||||
1-4 family residential | 4,599 | 5,360 | 1,317 | |||||||||
Commercial | 8,501 | 10,921 | 1,084 | |||||||||
Consumer | — | — | — | |||||||||
Total | $ | 16,097 | $ | 19,357 | $ | 3,129 | ||||||
Total individually evaluated impaired loans | ||||||||||||
Commercial and agricultural | $ | 1,792 | $ | 2,330 | $ | 227 | ||||||
Real estate - construction | 11,033 | 17,069 | 501 | |||||||||
Real estate - mortgage: | ||||||||||||
1-4 family residential | 18,909 | 23,221 | 1,317 | |||||||||
Commercial | 41,348 | 51,014 | 1,084 | |||||||||
Consumer | — | — | — | |||||||||
Total | $ | 73,082 | $ | 93,634 | $ | 3,129 | ||||||
PI loans with subsequent credit deterioration: | ||||||||||||
Commercial and agricultural | $ | 9,930 | $ | 9,800 | $ | 545 | ||||||
Real estate - construction | 1,986 | 1,924 | 197 | |||||||||
Real estate - mortgage: | ||||||||||||
1-4 family residential | 33,174 | 33,776 | 730 | |||||||||
Commercial | 129,655 | 131,753 | 3,351 | |||||||||
Consumer | 1,303 | 1,012 | 550 | |||||||||
Total | $ | 176,048 | $ | 178,265 | $ | 5,373 |
Unpaid | ||||||||||||
(dollars in thousands) | Recorded | Principal | Related | |||||||||
Investment | Balance | Allowance | ||||||||||
With no related allowance recorded: | ||||||||||||
Commercial and agricultural | $ | 1,755 | $ | 2,608 | $ | — | ||||||
Real estate - construction | 11,875 | 18,553 | — | |||||||||
Real estate - mortgage: | ||||||||||||
1-4 family residential | 16,437 | 20,764 | — | |||||||||
Commercial | 32,215 | 38,585 | — | |||||||||
Consumer | — | — | — | |||||||||
Total | $ | 62,282 | $ | 80,510 | $ | — | ||||||
With an allowance recorded: | ||||||||||||
Commercial and agricultural | $ | 579 | $ | 602 | $ | 282 | ||||||
Real estate - construction | 1,658 | 1,843 | 82 | |||||||||
Real estate - mortgage: | ||||||||||||
1-4 family residential | 1,681 | 1,745 | 607 | |||||||||
Commercial | 11,394 | 14,714 | 766 | |||||||||
Consumer | — | — | — | |||||||||
Total | $ | 15,312 | $ | 18,904 | $ | 1,737 | ||||||
Total individually evaluated impaired loans | ||||||||||||
Commercial and agricultural | $ | 2,334 | $ | 3,210 | $ | 282 | ||||||
Real estate - construction | 13,533 | 20,396 | 82 | |||||||||
Real estate - mortgage: | ||||||||||||
1-4 family residential | 18,118 | 22,509 | 607 | |||||||||
Commercial | 43,609 | 53,299 | 766 | |||||||||
Consumer | — | — | — | |||||||||
Total | $ | 77,594 | $ | 99,414 | $ | 1,737 | ||||||
PI loans with subsequent credit deterioration: | ||||||||||||
Commercial and agricultural | $ | 11,533 | $ | 11,728 | $ | 524 | ||||||
Real estate - construction | 2,285 | 2,236 | 200 | |||||||||
Real estate - mortgage: | ||||||||||||
1-4 family residential | 34,961 | 35,802 | 711 | |||||||||
Commercial | 141,974 | 145,704 | 3,388 | |||||||||
Consumer | 1,362 | 1,147 | 550 | |||||||||
Total | $ | 192,115 | $ | 196,617 | $ | 5,373 |
For Three Months Ended | For Three Months Ended | |||||||||||||||
March 31, 2013 | March 31, 2012 | |||||||||||||||
Average | Interest | Average | Interest | |||||||||||||
(dollars in thousands) | Recorded | Income | Recorded | Income | ||||||||||||
Investment | Recognized | Investment | Recognized | |||||||||||||
With no related allowance recorded: | ||||||||||||||||
Commercial and agricultural | $ | 886 | $ | — | $ | 3,132 | $ | 7 | ||||||||
Real estate - construction | 9,233 | — | 13,414 | 4 | ||||||||||||
Real estate - mortgage: | ||||||||||||||||
1-4 family residential | 13,472 | 26 | 18,199 | 6 | ||||||||||||
Commercial | 34,010 | 87 | 29,810 | 30 | ||||||||||||
Consumer | — | — | 399 | — | ||||||||||||
Total | $ | 57,601 | $ | 113 | $ | 64,954 | $ | 47 | ||||||||
With an allowance recorded: | ||||||||||||||||
Commercial and agricultural | $ | 917 | $ | 5 | $ | 1,668 | $ | — | ||||||||
Real estate - construction | 2,111 | — | 12,050 | 2 | ||||||||||||
Real estate - mortgage: | ||||||||||||||||
1-4 family residential | 4,666 | 8 | 12,965 | 18 | ||||||||||||
Commercial | 8,663 | 4 | 14,522 | 8 | ||||||||||||
Consumer | — | — | 211 | — | ||||||||||||
Total | $ | 16,357 | $ | 17 | $ | 41,416 | $ | 28 | ||||||||
Total: | ||||||||||||||||
Commercial and agricultural | $ | 1,803 | $ | 5 | $ | 4,800 | $ | 7 | ||||||||
Real estate - construction | 11,344 | — | 25,464 | 6 | ||||||||||||
Real estate - mortgage: | ||||||||||||||||
1-4 family residential | 18,138 | 34 | 31,164 | 24 | ||||||||||||
Commercial | 42,673 | 91 | 44,332 | 38 | ||||||||||||
Consumer | — | — | 610 | — | ||||||||||||
Total | $ | 73,958 | $ | 130 | $ | 106,370 | $ | 75 |
For Three Months Ended | For Three Months Ended | ||||||||||||||||||||
March 31, 2013 | March 31, 2012 | ||||||||||||||||||||
(dollars in thousands) | Number | Recorded | Contract | Number | Recorded | Contract | |||||||||||||||
of Loans | Investment | Pricing | of Loans | Investment | Pricing | ||||||||||||||||
Commercial and agricultural | — | $ | — | $ | — | — | $ | — | $ | — | |||||||||||
Real estate - construction | — | — | — | 1 | 3,800 | 4,050 | |||||||||||||||
Real estate - mortgage: | |||||||||||||||||||||
1-4 family residential | 1 | 150 | 150 | ||||||||||||||||||
Commercial | — | — | — | — | — | — | |||||||||||||||
Consumer | — | — | — | — | — | — | |||||||||||||||
Total | — | $ | — | $ | — | 2 | $ | 3,950 | $ | 4,200 |
At March 31, 2013 | ||||||||||||||||
(dollars in thousands) | Purchased Impaired | Purchased Contractual | Total Purchased Loans | Unpaid Principal Balance | ||||||||||||
Commercial and agricultural | $ | 12,909 | $ | 5,701 | $ | 18,610 | $ | 18,107 | ||||||||
Real estate - construction | 2,328 | — | 2,328 | 2,281 | ||||||||||||
Real estate - mortgage: | ||||||||||||||||
1-4 family residential | 36,907 | 25,879 | 62,786 | 64,906 | ||||||||||||
Commercial | 152,437 | — | 152,437 | 157,312 | ||||||||||||
Consumer | 1,303 | — | 1,303 | 1,008 | ||||||||||||
Total | $ | 205,884 | $ | 31,580 | $ | 237,464 | $ | 243,614 |
At December 31, 2012 | ||||||||||||||||
(dollars in thousands) | Purchased Impaired | Purchased Contractual | Total Purchased Loans | Unpaid Principal Balance | ||||||||||||
Commercial and agricultural | $ | 14,666 | $ | 7,311 | $ | 21,977 | $ | 21,692 | ||||||||
Real estate - construction | 2,682 | — | 2,682 | 2,677 | ||||||||||||
Real estate - mortgage: | ||||||||||||||||
1-4 family residential | 39,215 | 27,484 | 66,699 | 69,200 | ||||||||||||
Commercial | 170,467 | 49 | 170,516 | 176,347 | ||||||||||||
Consumer | 1,362 | — | 1,362 | 1,144 | ||||||||||||
Total | $ | 228,392 | $ | 34,844 | $ | 263,236 | $ | 271,060 |
For Three Months Ended | For Three Months Ended | |||||||||||||||
March 31, 2013 | March 31, 2012 | |||||||||||||||
Purchased Impaired | Purchased Impaired | |||||||||||||||
(dollars in thousands) | Carrying Amount | Future Accretion | Carrying Amount | Future Accretion | ||||||||||||
Balance, beginning of period | $ | 228,392 | $ | 30,299 | $ | 330,836 | $ | 47,804 | ||||||||
Accretion | 4,203 | (4,203 | ) | 5,772 | (5,772 | ) | ||||||||||
Payments received | (25,928 | ) | — | (23,110 | ) | — | ||||||||||
Foreclosed and transferred to OREO | (783 | ) | — | (3,109 | ) | — | ||||||||||
Subtotal before allowance | 205,884 | 26,096 | 310,389 | 42,032 | ||||||||||||
Allowance for credit losses | (5,373 | ) | — | — | — | |||||||||||
Net carrying amount, end of period | $ | 200,511 | $ | 26,096 | $ | 310,389 | $ | 42,032 |
For Three Months Ended | ||||||||
(dollars in thousands) | March 31, 2013 | March 31, 2012 | ||||||
Balance, beginning of period | $ | 29,314 | $ | 39,360 | ||||
Provision for losses charged to continuing operations | 110 | 3,067 | ||||||
Net charge-offs: | ||||||||
Charge-offs | (3,010 | ) | (4,015 | ) | ||||
Recoveries | 3,227 | 1,383 | ||||||
Net recoveries (charge-offs) | 217 | (2,632 | ) | |||||
Balance, end of period | $ | 29,641 | $ | 39,795 | ||||
Annualized net charge-offs (recoveries) during the period to average loans | (0.07 | )% | 0.87 | % | ||||
Annualized net charge-offs (recoveries) during the period to ALL | (2.93 | )% | 26.60 | % | ||||
Allowance for loan losses to loans held for investment (1) | 2.66 | % | 3.19 | % |
Real Estate - Mortgage | ||||||||||||||||||||||||
(dollars in thousands) | Commercial and Agricultural | Real Estate - Construction | 1-4 Family Residential | Commercial | Consumer | Total | ||||||||||||||||||
ALL: | ||||||||||||||||||||||||
Beginning balance at January 1, 2013 | $ | 3,238 | $ | 4,987 | $ | 8,701 | $ | 9,627 | $ | 2,761 | $ | 29,314 | ||||||||||||
Charge-offs | (319 | ) | (344 | ) | (632 | ) | (891 | ) | (824 | ) | (3,010 | ) | ||||||||||||
Recoveries | 278 | 796 | 185 | 932 | 1,036 | 3,227 | ||||||||||||||||||
Provision | 176 | 155 | 549 | (377 | ) | (393 | ) | 110 | ||||||||||||||||
Ending balance at March 31, 2013 | $ | 3,373 | $ | 5,594 | $ | 8,803 | $ | 9,291 | $ | 2,580 | $ | 29,641 |
Real Estate - Mortgage | ||||||||||||||||||||||||
(dollars in thousands) | Commercial and Agricultural | Real Estate - Construction | 1-4 Family Residential | Commercial | Consumer | Total | ||||||||||||||||||
ALL: | ||||||||||||||||||||||||
Beginning balance at January 1, 2012 | $ | 5,776 | $ | 11,995 | $ | 8,885 | $ | 11,063 | $ | 1,641 | $ | 39,360 | ||||||||||||
Charge-offs | (694 | ) | (1,775 | ) | (705 | ) | (38 | ) | (803 | ) | (4,015 | ) | ||||||||||||
Recoveries | 254 | 601 | 133 | 74 | 321 | 1,383 | ||||||||||||||||||
Provision | 669 | 91 | 3,790 | (2,300 | ) | 817 | 3,067 | |||||||||||||||||
Ending balance at March 31, 2012 | $ | 6,005 | $ | 10,912 | $ | 12,103 | $ | 8,799 | $ | 1,976 | $ | 39,795 |
Real Estate - Mortgage | ||||||||||||||||||||||||
(dollars in thousands) | Commercial and Agricultural | Real Estate - Construction | 1-4 Family Residential | Commercial | Consumer | Total | ||||||||||||||||||
ALL: | ||||||||||||||||||||||||
Individually evaluated for impairment | $ | 227 | $ | 501 | $ | 1,317 | $ | 1,084 | $ | — | $ | 3,129 | ||||||||||||
Collectively evaluated for impairment | 2,601 | 4,896 | 6,756 | 4,856 | 2,030 | 21,139 | ||||||||||||||||||
PI loans evaluated for credit impairment | 545 | 197 | 730 | 3,351 | 550 | 5,373 | ||||||||||||||||||
PI loans with no credit deterioration | — | — | — | — | — | — | ||||||||||||||||||
Total ALL | $ | 3,373 | $ | 5,594 | $ | 8,803 | $ | 9,291 | $ | 2,580 | $ | 29,641 | ||||||||||||
Loans held for investment | ||||||||||||||||||||||||
Individually evaluated for impairment | $ | 1,792 | $ | 11,033 | $ | 18,909 | $ | 41,348 | $ | — | $ | 73,082 | ||||||||||||
Collectively evaluated for impairment | 62,790 | 44,292 | 464,992 | 221,209 | 41,516 | 834,799 | ||||||||||||||||||
PI loans with subsequent credit deterioration | 9,930 | 1,986 | 33,174 | 129,655 | 1,303 | 176,048 | ||||||||||||||||||
PI loans with no credit deterioration | 2,978 | 342 | 3,733 | 22,783 | — | 29,836 | ||||||||||||||||||
Total loans | $ | 77,490 | $ | 57,653 | $ | 520,808 | $ | 414,995 | $ | 42,819 | $ | 1,113,765 |
Real Estate - Mortgage | ||||||||||||||||||||||||
(dollars in thousands) | Commercial and Agricultural | Real Estate - Construction | 1-4 Family Residential | Commercial | Consumer | Total | ||||||||||||||||||
ALL: | ||||||||||||||||||||||||
Individually evaluated for impairment | $ | 282 | $ | 82 | $ | 607 | $ | 766 | $ | — | $ | 1,737 | ||||||||||||
Collectively evaluated for impairment | 2,432 | 4,705 | 7,383 | 5,473 | 2,211 | 22,204 | ||||||||||||||||||
PI loans evaluated for credit impairment | 524 | 200 | 711 | 3,388 | 550 | 5,373 | ||||||||||||||||||
PI loans with no credit deterioration | — | — | — | — | — | — | ||||||||||||||||||
Total ALL | $ | 3,238 | $ | 4,987 | $ | 8,701 | $ | 9,627 | $ | 2,761 | $ | 29,314 | ||||||||||||
Loans held for investment | ||||||||||||||||||||||||
Individually evaluated for impairment | $ | 2,334 | $ | 13,533 | $ | 18,118 | $ | 43,609 | $ | — | $ | 77,594 | ||||||||||||
Collectively evaluated for impairment | 62,704 | 42,199 | 496,205 | 227,760 | 42,181 | 871,049 | ||||||||||||||||||
PI loans with subsequent credit deterioration | 11,533 | 2,285 | 34,961 | 141,974 | 1,362 | 192,115 | ||||||||||||||||||
PI loans with no credit deterioration | 3,133 | 397 | 4,254 | 28,493 | — | 36,277 | ||||||||||||||||||
Total loans | $ | 79,704 | $ | 58,414 | $ | 553,538 | $ | 441,836 | $ | 43,543 | $ | 1,177,035 |
For Three Months Ended March 31, 2013 | For Three Months Ended March 31, 2012 | ||||||||||||||||||||||
Pre-Modification | Post-Modification | Pre-Modification | Post-Modification | ||||||||||||||||||||
Outstanding | Outstanding | Outstanding | Outstanding | ||||||||||||||||||||
(dollars in thousands) | Number | Recorded | Recorded | Number | Recorded | Recorded | |||||||||||||||||
of Loans | Investment | Investment | of Loans | Investment | Investment | ||||||||||||||||||
Commercial and agricultural | — | $ | — | $ | — | — | $ | — | $ | — | |||||||||||||
Real estate - construction | — | — | — | 2 | 192 | 192 | |||||||||||||||||
Real estate - mortgage: | |||||||||||||||||||||||
1-4 family residential | 4 | 1,777 | 1,773 | 8 | 210 | 210 | |||||||||||||||||
Commercial | 1 | 1,151 | 807 | — | — | — | |||||||||||||||||
Consumer | — | — | — | 1 | 24 | 24 | |||||||||||||||||
Total | 5 | $ | 2,928 | $ | 2,580 | $ | 11 | $ | 426 | $ | 426 |
• | Straight Lines of Credit - Unfunded balance of line of credit |
• | Revolving Lines of Credit - Average Utilization (for the last 12 months) less Current Utilization |
• | Letters of Credit - a 10% utilization is applied |
(dollars in thousands) | March 31, 2013 | December 31, 2012 | ||||||
Real estate acquired in settlement of loans | $ | 46,307 | $ | 62,796 | ||||
Personal property acquired in settlement of loans | 230 | 335 | ||||||
Total property acquired in settlement of loans | $ | 46,537 | $ | 63,131 |
For Three Months Ended | ||||||||
(dollars in thousands) | March 31, 2013 | March 31, 2012 | ||||||
Real estate acquired in settlement of loans, beginning of period | $ | 62,796 | $ | 110,009 | ||||
Plus: New real estate acquired in settlement of loans | 3,969 | 8,935 | ||||||
Less: Sales of real estate acquired in settlement of loans | (20,239 | ) | (10,874 | ) | ||||
Less: Write-downs and net loss on sales charged to expense | (219 | ) | (3,877 | ) | ||||
Real estate acquired in settlement of loans, end of period | $ | 46,307 | $ | 104,193 |
(dollars in thousands, except per share data) | For Three Months Ended | |||||||
March 31, 2013 | March 31, 2012 | |||||||
Loss from continuing operations, net of tax | $ | (4,596 | ) | $ | (10,832 | ) | ||
Loss from discontinued operations, net of tax | — | (27 | ) | |||||
Net loss to common shareholders | $ | (4,596 | ) | $ | (10,859 | ) | ||
Weighted average number of common shares outstanding - basic and diluted | 21,698,115 | 21,102,465 | ||||||
Net loss per common share from continuing operations - basic and diluted | $ | (0.21 | ) | $ | (0.51 | ) | ||
Net loss per common share from discontinued operations - basic and diluted | — | — | ||||||
Net loss per common share - basic and diluted | (0.21 | ) | (0.51 | ) |
Gain (Loss) recognized | |||||||||
(dollars in thousands) | For Three Months Ended | ||||||||
March 31, 2013 | March 31, 2012 | ||||||||
Derivatives not designated as hedging instruments: | |||||||||
Mortgage loan rate lock commitments | $ | (8 | ) | $ | — | ||||
Mortgage loan forward sales and MBS | 9 | — | |||||||
Total | $ | 1 | $ | — | |||||
(dollars in thousands) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets: | ||||||||||||||||
Available-for-sale debt securities: | ||||||||||||||||
U.S. government sponsored agencies | $ | 2,107 | $ | — | $ | 2,107 | $ | — | ||||||||
Residential mortgage-backed securities-GSE | 408,464 | — | 408,464 | — | ||||||||||||
Residential mortgage-backed securities-Private | 22,621 | — | 22,621 | — | ||||||||||||
Commercial mortgage-backed securities-GSE | 22,396 | 22,396 | ||||||||||||||
Corporate notes | 36,767 | — | 36,767 | — | ||||||||||||
Total available-for-sale debt securities | 492,355 | — | 492,355 | — | ||||||||||||
Mortgage servicing rights | 1,028 | — | — | 1,028 | ||||||||||||
Total assets at fair value from continuing operations | $ | 493,383 | $ | — | $ | 492,355 | $ | 1,028 |
(dollars in thousands) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets: | ||||||||||||||||
Available-for-sale debt securities: | ||||||||||||||||
U.S. Treasury and government agencies | $ | 6,981 | $ | — | $ | 6,981 | $ | — | ||||||||
U.S. government sponsored agencies | 22,173 | — | 22,173 | — | ||||||||||||
States and political subdivisions | 6,038 | — | 6,038 | — | ||||||||||||
Residential mortgage-backed securities-GSE | 441,074 | — | 441,074 | — | ||||||||||||
Residential mortgage-backed securities-Private | 22,945 | — | 22,945 | — | ||||||||||||
Commercial mortgage-backed securities-GSE | 23,359 | — | 23,359 | — | ||||||||||||
Commercial mortgage-backed securities-Private | 5,317 | — | 5,317 | — | ||||||||||||
Corporate notes | 36,963 | — | 36,963 | — | ||||||||||||
Total available-for-sale debt securities | 564,850 | — | 564,850 | — | ||||||||||||
Mortgage servicing rights | $ | 726 | $ | — | $ | — | $ | 726 | ||||||||
Total assets at fair value from continuing operations | $ | 565,576 | $ | — | $ | 564,850 | $ | 726 |
Fair Value Measurements Using Significant | ||||||||
Unobservable Inputs (Level 3) | ||||||||
Mortgage Servicing Rights | ||||||||
(dollars in thousands) | Three Months Ended March 31, | |||||||
2013 | 2012 | |||||||
Beginning balance at January 1, | $ | 726 | $ | — | ||||
Total gains or losses (realized/unrealized): | ||||||||
Included in earnings, gross | 348 | — | ||||||
Less amortization | (46 | ) | — | |||||
Ending balance at March 31, | $ | 1,028 | $ | — |
(dollars in thousands) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Impaired loans, net | $ | 12,968 | $ | — | $ | — | $ | 12,968 | ||||||||
Other real estate owned | 33,790 | — | — | 33,790 | ||||||||||||
Total assets at fair value from continuing operations | $ | 46,758 | $ | — | $ | — | $ | 46,758 |
(dollars in thousands) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Impaired loans, net | $ | 13,575 | $ | — | $ | — | $ | 13,575 | ||||||||
Other real estate owned | 48,480 | — | — | 48,480 | ||||||||||||
Total assets at fair value from continuing operations | $ | 62,055 | $ | — | $ | — | $ | 62,055 |
(dollars in thousands) | Fair Value at March 31, 2013 | Valuation Techniques | Unobservable Input | Range | ||||||
Nonrecurring measurements: | ||||||||||
Impaired loans, net | $ | 12,968 | Discounted appraisals | Collateral discounts | 6.00% - 40.00% | |||||
Other real estate owned | 33,790 | Discounted appraisals | Collateral discounts | 6.00% - 40.00% | ||||||
Mortgage servicing rights | 1,028 | Discounted cash flows | Prepayment rate | 10.00% - 30.00% | ||||||
Mortgage servicing rights | Discount rate | 6.00% - 12.00% |
(dollars in thousands) | Fair Value at December 31, 2012 | Valuation Techniques | Unobservable Input | Range | ||||||
Nonrecurring measurements: | ||||||||||
Impaired loans, net | $ | 13,575 | Discounted appraisals | Collateral discounts | 6.00% - 40.00% | |||||
Other real estate owned | 48,480 | Discounted appraisals | Collateral discounts | 6.00% - 40.00% | ||||||
Mortgage servicing rights | 726 | Discounted cash flows | Prepayment rate | 10.00% - 30.00% | ||||||
Mortgage servicing rights | Discount rate | 6.00% - 12.00% |
At March 31, 2013 | |||||||||||||||||||
(dollars in thousands) | Carrying Value | Estimated Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||
Financial Assets of Continuing Operations: | |||||||||||||||||||
Cash and cash equivalents | $ | 262,293 | $ | 262,293 | $ | 262,293 | $ | — | — | ||||||||||
Investment securities: Available-for-sale | 492,355 | 492,355 | — | 492,355 | — | ||||||||||||||
Investment securities: Held-to-maturity | 73,515 | 73,245 | — | 73,245 | — | ||||||||||||||
Loans held for sale | 5,012 | 5,012 | — | 5,012 | — | ||||||||||||||
Loans, net | 1,084,124 | 1,070,762 | — | — | 1,070,762 | ||||||||||||||
Accrued interest receivable | 5,546 | 5,546 | — | 5,546 | — | ||||||||||||||
Financial Liabilities of Continuing Operations: | |||||||||||||||||||
Deposits | 1,856,161 | 1,858,736 | — | 1,858,736 | — | ||||||||||||||
Retail repurchase agreements | 7,301 | 7,301 | — | 7,301 | — | ||||||||||||||
Federal Home Loan Bank advances | 58,317 | 62,472 | — | 62,472 | — | ||||||||||||||
Junior subordinated debentures | 56,702 | 19,418 | — | — | 19,418 | ||||||||||||||
Accrued interest payable | 2,230 | 2,230 | — | 2,230 | — |
At December 31, 2012 | ||||||||||||||||||||
(dollars in thousands) | Carrying Value | Estimated Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||
Financial Assets of Continuing Operations: | ||||||||||||||||||||
Cash and cash equivalents | $ | 239,610 | $ | 239,610 | $ | 239,610 | $ | — | $ | — | ||||||||||
Investment securities: Available-for-sale | 564,850 | 564,850 | — | 564,850 | — | |||||||||||||||
Loans held for sale | 6,974 | 6,974 | — | 6,974 | — | |||||||||||||||
Loans, net | 1,147,721 | 1,140,088 | — | — | 1,140,088 | |||||||||||||||
Accrued interest receivable | 6,102 | 6,102 | — | 6,102 | — | |||||||||||||||
Financial Liabilities of Continuing Operations: | ||||||||||||||||||||
Deposits | 1,906,988 | 1,910,927 | — | 1,910,927 | — | |||||||||||||||
Retail repurchase agreements | 8,675 | 8,675 | — | 8,675 | — | |||||||||||||||
Federal Home Loan Bank advances | 58,328 | 62,950 | — | 62,950 | — | |||||||||||||||
Junior subordinated debentures | 56,702 | 18,760 | — | — | 18,760 | |||||||||||||||
Accrued interest payable | 2,111 | 2,111 | — | 2,111 | — |
(Dollars in thousands) | Unrealized gains (losses) on available for sale securities | Defined benefit plan items | Total | |||||||||
Beginning balance January 1, 2013 | $ | 3,650 | $ | (3,973 | ) | $ | (323 | ) | ||||
Other comprehensive income before reclassifications | (2,985 | ) | — | (2,985 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income | (1,438 | ) | (154 | ) | (1,592 | ) | ||||||
Net current period other comprehensive income | (4,423 | ) | (154 | ) | (4,577 | ) | ||||||
Ending balance March 31, 2013 | $ | (773 | ) | $ | (4,127 | ) | $ | (4,900 | ) |
(Dollars in thousands) | Amount reclassified from AOCI | Line item in the Statement where net income is presented | ||||
Available for sale securities: | ||||||
$ | (2,377 | ) | Net realized gains on sale of securities | |||
939 | Income tax benefit (expense) | |||||
(1,438 | ) | Total, net of tax | ||||
Defined benefit plan items: | ||||||
Net actuarial gains | (254 | ) | Personnel expense | |||
100 | Income tax benefit (expense) | |||||
(154 | ) | Total, net of tax | ||||
Total reclassifications for the period | $ | (1,592 | ) | Total, net of tax |
• | financial resources in the amount, at the times and on the terms required to support our future business; |
• | changes in interest rates, spreads on earning assets and interest-bearing liabilities, the shape of the yield curve and interest rate sensitivity; |
• | a prolonged period of low interest rates; |
• | continued and increased credit losses and material changes in the quality of our loan portfolio; |
• | continued decline in the value of our OREO; |
• | increased competitive pressures in the banking industry or in FNB's markets; |
• | less favorable general economic conditions, either nationally or regionally; resulting in, among other things, a reduced demand for credit or other services; |
• | a slowdown in the housing markets, or an increase in interest rates, either of which may reduce demand for mortgages; |
• | changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board; |
• | the outcome of legislation and regulation affecting the financial services industry, including FNB, including the effects resulting from the implementation of the Dodd-Frank Act; |
• | our inability to obtain regulatory approval for the merger of Granite into CommunityOne in a timely manner or at all; |
• | changes in accounting principles and standards; |
• | adverse changes in financial performance or condition of FNB's borrowers, which could affect repayment of such borrowers' outstanding loans; |
• | reducing costs and expenses; |
• | increasing price and product/service competition by competitors; |
• | rapid technological development and changes; |
• | the effect of any mergers, acquisitions or other transactions to which we or our subsidiaries may from time to time be a party; |
• | the inaccuracy of assumptions underlying the establishment of our ALL; |
• | loss of one or more members of executive management; |
• | disruptions in or manipulations of our operating systems due to, among other things, cybersecurity risks or otherwise; and |
• | our success at managing the risks involved in the foregoing. |
(dollars in thousands, except per share data) | As of and for Three Months Ended | |||||||
March 31, 2013 | March 31, 2012 | |||||||
Income Statement Data | ||||||||
Net interest income | $ | 15,173 | $ | 15,180 | ||||
Provision for loan losses | 110 | 3,067 | ||||||
Noninterest income | 6,533 | 3,826 | ||||||
Noninterest expense | 24,339 | 26,848 | ||||||
Loss from continuing operations, before income taxes | (2,743 | ) | (10,909 | ) | ||||
Loss from continuing operations, net of tax | (4,596 | ) | (10,832 | ) | ||||
Loss from discontinued operations, net of tax | — | (27 | ) | |||||
Net loss | (4,596 | ) | (10,859 | ) | ||||
Net loss to common shareholders | (4,596 | ) | (10,859 | ) | ||||
Period End Balances | ||||||||
Assets | $ | 2,093,311 | $ | 2,387,946 | ||||
Loans held for sale (1) | 5,012 | 3,938 | ||||||
Loans held for investment (2) | 1,113,765 | 1,245,759 | ||||||
Allowance for loan losses (1) | 29,641 | 39,759 | ||||||
Goodwill | 4,205 | 4,205 | ||||||
Deposits | 1,856,161 | 2,120,081 | ||||||
Borrowings | 122,320 | 123,400 | ||||||
Shareholders' equity | 89,374 | 117,974 | ||||||
Average Balances | ||||||||
Assets | $ | 2,107,869 | $ | 2,392,183 | ||||
Loans held for sale (1) | 4,616 | 5,774 | ||||||
Loans held for investment (2) | 1,142,731 | 1,218,575 | ||||||
Allowance for loan losses (1) | 29,770 | 39,197 | ||||||
Goodwill | 4,205 | 3,906 | ||||||
Deposits | 1,864,961 | 2,116,085 | ||||||
Borrowings | 123,902 | 123,422 | ||||||
Shareholders' equity | 96,566 | 127,467 | ||||||
Per Common Share Data | ||||||||
Net loss per common share from continuing operations - basic and diluted | $ | (0.21 | ) | $ | (0.51 | ) | ||
Net loss per common share from discontinued operations - basic and diluted | — | — | ||||||
Net loss per common share - basic and diluted | (0.21 | ) | (0.51 | ) | ||||
Book value (3) | 4.12 | 5.59 | ||||||
Tangible book value (3) | 3.58 | 5.02 | ||||||
Performance Ratios | ||||||||
Return on average assets | (0.87 | )% | (1.82 | )% | ||||
Return on average tangible assets (3) | (0.88 | ) | (1.83 | ) | ||||
Return on average equity (4) | (19.04 | ) | (34.26 | ) |
Return on average tangible equity (3) | (21.43 | ) | (37.81 | ) | ||||
Net interest margin (tax equivalent) | 3.20 | 2.82 | ||||||
Core noninterest expense as a percentage of average assets (3) | 3.65 | 3.06 | ||||||
Asset Quality Ratios | ||||||||
Allowance for loan losses to period end loans held for investment (1) | 2.66 | % | 3.19 | % | ||||
Nonperforming loans to period end allowance for loan losses (1) | 237.86 | 264.71 | ||||||
Net annualized charge-offs (recoveries) to average loans held for investment | (0.07 | ) | 0.87 | |||||
Nonperforming loans to total loans (5) | 6.31 | 8.43 | ||||||
Nonperforming assets to total assets (5) | 5.59 | 8.78 | ||||||
Capital and Liquidity Ratios | ||||||||
Average equity to average assets | 4.58 | % | 5.33 | % | ||||
Leverage capital | 5.41 | 6.22 | ||||||
Tier 1 risk-based capital | 9.20 | 10.53 | ||||||
Total risk-based capital | 12.49 | 12.93 | ||||||
Average loans to average deposits | 61.52 | 57.59 | ||||||
Average loans to average deposits and borrowings | 57.69 | 54.41 |
Three Months Ended March 31, | |||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
Average | Average | ||||||||||||||||||||
(dollars in thousands) | Average | Income / | Yield / | Average | Income / | Yield / | |||||||||||||||
Balance (3) | Expense | Rate | Balance (3) | Expense | Rate | ||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Loans (1)(2) | $ | 1,147,347 | $ | 14,833 | 5.24 | % | $ | 1,224,349 | $ | 17,006 | 5.59 | % | |||||||||
Taxable investment securities | 565,225 | 3,073 | 2.20 | 437,861 | 2,684 | 2.47 | |||||||||||||||
Other earning assets | 218,758 | 212 | 0.39 | 507,754 | 350 | 0.28 | |||||||||||||||
Assets of discontinued operations | — | — | — | 115 | — | — | |||||||||||||||
Total earning assets | 1,931,330 | 18,118 | 3.80 | 2,170,079 | 20,040 | 3.71 | |||||||||||||||
Noninterest-earning assets: | |||||||||||||||||||||
Cash and due from banks | 31,533 | 32,172 | |||||||||||||||||||
Goodwill and core deposit premium | 10,798 | 11,960 | |||||||||||||||||||
Other assets, net | 134,208 | 177,944 | |||||||||||||||||||
Assets of discontinued operations | — | 28 | |||||||||||||||||||
Total assets | $ | 2,107,869 | $ | 2,392,183 | |||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Interest-bearing demand deposits | $ | 356,586 | $ | 256 | 0.29 | % | $ | 347,932 | $ | 386 | 0.45 | % | |||||||||
Savings deposits | 76,822 | 19 | 0.10 | 69,997 | 26 | 0.15 | |||||||||||||||
Money market deposits | 457,190 | 246 | 0.22 | 433,498 | 496 | 0.46 | |||||||||||||||
Time deposits | 719,891 | 1,726 | 0.97 | 1,024,156 | 3,315 | 1.30 | |||||||||||||||
Total interest-bearing deposits | 1,610,489 | 2,247 | 0.57 | 1,875,583 | 4,223 | 0.91 | |||||||||||||||
Retail repurchase agreements | 8,876 | 4 | 0.18 | 8,354 | 8 | 0.39 | |||||||||||||||
Federal Home Loan Bank advances | 58,324 | 382 | 2.66 | 58,366 | 279 | 1.92 | |||||||||||||||
Other borrowed funds | 56,702 | 264 | 1.89 | 56,702 | 303 | 2.15 | |||||||||||||||
Total interest-bearing liabilities | 1,734,391 | 2,897 | 0.68 | 1,999,005 | 4,813 | 0.97 | |||||||||||||||
Noninterest-bearing liabilities and shareholders' equity: | |||||||||||||||||||||
Noninterest-bearing demand deposits | 254,472 | 240,502 | |||||||||||||||||||
Other liabilities | 22,440 | 24,675 | |||||||||||||||||||
Shareholders' equity | 96,566 | 127,467 | |||||||||||||||||||
Liabilities of discontinued operations | — | 534 | |||||||||||||||||||
Total liabilities and shareholders' equity | $ | 2,107,869 | $ | 2,392,183 | |||||||||||||||||
Net interest income and net yield on earning assets (4) | $ | 15,221 | 3.20 | % | $ | 15,227 | 2.82 | % | |||||||||||||
Interest rate spread (5) | 3.12 | % | 2.74 | % |
Three months ended | |||||||
(dollars in thousands) | March 31, 2013 | March 31, 2012 | |||||
Noninterest Income | |||||||
Service charges on deposit accounts | $ | 1,376 | $ | 1,816 | |||
Mortgage loan income | 744 | 36 | |||||
Cardholder and merchant services income | 1,069 | 1,141 | |||||
Trust and investment services | 241 | 202 | |||||
Bank owned life insurance | 263 | 306 | |||||
Other service charges, commissions and fees | 258 | 254 | |||||
Securities (loss)/gains, net | 2,377 | (46 | ) | ||||
Other income | 205 | 117 | |||||
Total noninterest income | 6,533 | 3,826 | |||||
Less: | |||||||
Securities gains (losses), net | 2,377 | (46 | ) | ||||
Core noninterest income | $ | 4,156 | $ | 3,872 |
Three months ended | |||||||
(dollars in thousands) | March 31, 2013 | March 31, 2012 | |||||
Noninterest Expense | |||||||
Personnel expense | $ | 10,679 | $ | 10,026 | |||
Net occupancy expense | 1,831 | 1,561 | |||||
Furniture, equipment and data processing expense | 2,368 | 2,072 | |||||
Professional fees | 1,493 | 1,542 | |||||
Stationery, printing and supplies | 186 | 141 | |||||
Advertising and marketing | 665 | 129 | |||||
Other real estate owned expense | 883 | 5,519 | |||||
Credit/debit card expense | 425 | 410 | |||||
FDIC insurance | 670 | 598 | |||||
Loan collection expense | 1,572 | 746 | |||||
Merger-related expense | 1,509 | 2,258 | |||||
Core deposit intangible amortization | 352 | 352 | |||||
Other expense | 1,706 | 1,494 | |||||
Total noninterest income | 24,339 | 26,848 | |||||
Less: | |||||||
Other real estate owned expense | 883 | 5,519 | |||||
Merger-related expense | 1,509 | 2,258 | |||||
Loan collection expense | 1,572 | 746 | |||||
Rebranding expenses | 552 | — | |||||
Branch closure and restructuring expense | 587 | — | |||||
Core noninterest expense | $ | 19,236 | $ | 18,325 |
March 31, 2013 | December 31, 2012 | |||||||||||||
(dollars in thousands) | Balance | Associated Reserves | Balance | Associated Reserves | ||||||||||
Impaired loans, held for sale | $ | — | $ | — | $ | — | $ | — | ||||||
Impaired loans, not individually reviewed for impairment | 5,946 | — | 6,017 | — | ||||||||||
Impaired loans, individually reviewed, with no impairment | 56,985 | — | 62,282 | — | ||||||||||
Impaired loans, individually reviewed, with impairment | 16,097 | 3,129 | 15,312 | 1,737 | ||||||||||
Total impaired loans * | $ | 79,028 | $ | 3,129 | $ | 83,611 | $ | 1,737 | ||||||
Purchased impaired loans with subsequent deterioration | 176,048 | 5,373 | 192,115 | 5,373 | ||||||||||
Purchased impaired loans with no subsequent deterioration | 29,836 | — | 36,277 | — | ||||||||||
Total Reserves | 8,502 | 7,110 | ||||||||||||
Average impaired loans calculated using a simple average | $ | 76,319 | $ | 94,754 | ||||||||||
* Included at March 31, 2013 and December 31, 2012 were $3.6 million and $4.5 million, respectively, in restructured and performing loans. |
Minimum Regulatory Requirement | ||||||
FNB United | CommunityOne Bank | Bank of Granite | Adequately Capitalized | Well- Capitalized | CommunityOne Bank Order | |
Leverage capital ratio | 5.41% | 6.15% | 8.51% | 4.00% | 5.00% | 9.00% |
Tier 1 risk-based capital ratio | 9.20% | 10.24% | 15.56% | 4.00% | 6.00% | — |
Total risk-based capital ratio | 12.49% | 11.51% | 16.81% | 8.00% | 10.00% | 12.00% |
• | “Tangible shareholders' equity” is shareholders' equity reduced by recorded goodwill and other intangible assets. |
• | “Tangible assets” are total assets reduced by recorded goodwill and other intangible assets. |
• | “Tangible book value” is defined as total equity reduced by recorded goodwill and other intangible assets divided by total common shares outstanding. This measure discloses changes from period-to-period in book value per share exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing total book value while not increasing the tangible assets of a company. Companies utilizing purchase accounting in a business combination, as required by GAAP, must record goodwill related to such transactions. |
• | “Core Noninterest Expense (NIE)” is defined as total noninterest expense reduced by OREO expenses, loan collection expenses, nonrecurring items such as merger-related expense, mortgage servicing rights impairment, prepayment penalty on borrowings, goodwill impairment and loss on loans held for sale. This measure reduces noninterest expense by items which are elevated during periods of elevated problem asset activity and items which are nonrecurring in nature. |
• | “Core Noninterest Income (NII)” is defined as total noninterest income reduced by gains and losses on securities. This measure reduces noninterest income by items which are nonrecurring in nature. |
(dollars in thousands, except per share data) | March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||
Total shareholders' equity | $ | 89,374 | $ | 98,445 | $ | 117,974 | ||||||
Less: | ||||||||||||
Goodwill | 4,205 | 4,205 | 4,205 | |||||||||
Core deposit and other intangibles | 7,445 | 7,495 | 7,825 | |||||||||
Tangible shareholders' equity | $ | 77,724 | $ | 86,745 | $ | 105,944 | ||||||
Total assets | $ | 2,093,311 | $ | 2,151,565 | $ | 2,387,946 | ||||||
Less: | ||||||||||||
Goodwill | 4,205 | 4,205 | 4,205 | |||||||||
Core deposit and other intangibles | 7,445 | 7,495 | 7,825 | |||||||||
Tangible assets | $ | 2,081,661 | $ | 2,139,865 | $ | 2,375,916 | ||||||
Book value per common share | $ | 4.12 | $ | 4.56 | $ | 5.59 | ||||||
Effect of intangible assets | (0.54 | ) | (0.54 | ) | (0.57 | ) | ||||||
Tangible book value per common share | 3.58 | 4.02 | 5.02 |
(dollars in thousands) | For the three months ended | |||||||
March 31, 2013 | March 31, 2012 | |||||||
Total noninterest expense | 24,339 | 26,848 | ||||||
Less: | ||||||||
Other real estate owned expense | (883 | ) | (5,519 | ) | ||||
Loan collection expense | (1,572 | ) | (746 | ) | ||||
Merger-related expense | (1,509 | ) | (2,258 | ) | ||||
Rebranding expenses | (552 | ) | — | |||||
Branch closure and restructuring expense | (587 | ) | — | |||||
Core noninterest expense | $ | 19,236 | $ | 18,325 | ||||
Total noninterest income | 6,533 | 3,826 | ||||||
Less: | ||||||||
Securities gains (losses), net | 2,377 | (46 | ) | |||||
Core noninterest income | $ | 4,156 | $ | 3,872 |
31.2 | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32 | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
1. | I have reviewed this quarterly report on Form 10-Q of FNB United Corp.; |
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 quarterly 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 Exchange Act Rules 13a-15(f) and 15(d)-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 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. |
1. | I have reviewed this quarterly report on Form 10-Q of FNB United Corp.; |
1. | 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; |
2. | Based on my knowledge, the financial statements, and other financial information included in this quarterly 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; |
3. | 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 Exchange Act Rules 13a-15(f) and 15(d)-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 |
4. | 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 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. |
Earnings Per Share (Details)
|
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Earnings Per Share Disclosure [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 23,037 | 23,310 |
Stock Options [Member]
|
||
Earnings Per Share Disclosure [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 955 | 1,238 |
Warrant [Member]
|
||
Earnings Per Share Disclosure [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 22,072 | 22,072 |
Loans (Allowance for Loan Losses, by Segment Portfolio) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Balance, beginning of period | $ 29,314 | $ 39,360 |
Charge-offs | (3,010) | (4,015) |
Recoveries | 3,227 | 1,383 |
Provision for losses charged to continuing operations | 110 | 3,067 |
Balance, end of period | 29,641 | 39,795 |
Commercial and agricultural [Member]
|
||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Balance, beginning of period | 3,238 | 5,776 |
Charge-offs | (319) | (694) |
Recoveries | 278 | 254 |
Provision for losses charged to continuing operations | 176 | 669 |
Balance, end of period | 3,373 | 6,005 |
Real estate - construction [Member]
|
||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Balance, beginning of period | 4,987 | 11,995 |
Charge-offs | (344) | (1,775) |
Recoveries | 796 | 601 |
Provision for losses charged to continuing operations | 155 | 91 |
Balance, end of period | 5,594 | 10,912 |
Real estate - mortgage, 1-4 family residential [Member]
|
||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Balance, beginning of period | 8,701 | 8,885 |
Charge-offs | (632) | (705) |
Recoveries | 185 | 133 |
Provision for losses charged to continuing operations | 549 | 3,790 |
Balance, end of period | 8,803 | 12,103 |
Real estate - mortgage, commercial [Member]
|
||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Balance, beginning of period | 9,627 | 11,063 |
Charge-offs | (891) | (38) |
Recoveries | 932 | 74 |
Provision for losses charged to continuing operations | (377) | (2,300) |
Balance, end of period | 9,291 | 8,799 |
Consumer [Member]
|
||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Balance, beginning of period | 2,761 | 1,641 |
Charge-offs | (824) | (803) |
Recoveries | 1,036 | 321 |
Provision for losses charged to continuing operations | (393) | 817 |
Balance, end of period | $ 2,580 | $ 1,976 |
Earnings Per Share (EPS Calculation) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Earnings Per Share [Abstract] | ||
Net loss from continuing operations before cumulative dividends on preferred stock | $ (4,596) | $ (10,832) |
Loss from continuting operations, net of tax | (4,596) | (10,832) |
Loss from discontinued operations, net of tax | 0 | (27) |
Net loss to common shareholders | $ (4,596) | $ (10,859) |
Weighted average number of common shares outstanding - basic and diluted | 21,698,115 | 21,102,465 |
Net loss per common share from continuing operations - basic and diluted | $ (0.21) | $ (0.51) |
Net loss per common share from discontinued operations - basic and diluted | $ 0.00 | $ 0.00 |
Net loss per common share - basic and diluted | $ (0.21) | $ (0.51) |
Loans (Purchased Loans with Deteriorated Credity Quality) (Details) (Granite Corp [Member], USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Granite Corp [Member]
|
||
Deterioarted Loans Acquired Movement Schedule [Roll Forward] | ||
Balance, beginning of period | $ 228,392 | $ 330,836 |
Accretion | 4,203 | 5,772 |
Payment received | (25,928) | (23,110) |
Foreclosed and transferred to OREO | (783) | (3,109) |
Subtotal before provision | (5,373) | 0 |
Balance, end of period | 200,511 | 310,389 |
Deteriorated Loans Acquired, Accretable Yield Movement Schedule [Roll Forward] | ||
Future accretion balance, beginning of period | 30,299 | 47,804 |
Future accretion, accretion | (4,203) | (5,772) |
Future accretion balance, end of period | $ 26,096 | $ 42,032 |
Investment Securities (Other Disclosures) (Details) (USD $)
|
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
Dec. 31, 2012
|
|
Schedule of Available-for-sale Securities [Line Items] | |||
FHLB stock | $ 5,200,000 | $ 6,300,000 | |
FRBR stock | 3,100,000 | 3,100,000 | |
Investment securities portfolio available as lendable collateral | 446,900,000 | ||
Book value of securities sold | 145,900,000 | 10,800,000 | |
Gain on securities sold | 2,377,000 | (46,000) | |
Deposits [Member]
|
|||
Schedule of Available-for-sale Securities [Line Items] | |||
Investment securities portfolio pledged as collateral | 102,700,000 | ||
Retail repurchase agreements [Member]
|
|||
Schedule of Available-for-sale Securities [Line Items] | |||
Investment securities portfolio pledged as collateral | 13,900,000 | ||
Others [Member]
|
|||
Schedule of Available-for-sale Securities [Line Items] | |||
Investment securities portfolio pledged as collateral | $ 2,100,000 |
Fair Values of Assets and Liabilities (Measured on Recurring Basis) (Details) (Continuing operations [Member], USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Level 2 [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Loans held for sale | $ 5,012 | $ 6,974 |
Available-for-sale investment securities | 492,355 | 564,850 |
Recurring [Member] | Total [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Available-for-sale investment securities | 492,355 | 564,850 |
Mortgage servicing rights | 1,028 | 726 |
Total assets at fair value | 493,383 | 565,576 |
Recurring [Member] | Total [Member] | U.S, Treasury and government agencies debt securities [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Available-for-sale investment securities | 6,981 | |
Recurring [Member] | Total [Member] | U.S. government sponsored agencies debt securities [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Available-for-sale investment securities | 2,107 | 22,173 |
Recurring [Member] | Total [Member] | States and political subdivisions debt securities [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Available-for-sale investment securities | 6,038 | |
Recurring [Member] | Total [Member] | Residential mortgage-backed securities - GSE [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Available-for-sale investment securities | 408,464 | 441,074 |
Recurring [Member] | Total [Member] | Residential mortgage-backed securities - private [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Available-for-sale investment securities | 22,621 | 22,945 |
Recurring [Member] | Total [Member] | Commercial mortgage-backed securities - GSE [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Available-for-sale investment securities | 22,396 | 23,359 |
Recurring [Member] | Total [Member] | Commercial mortgage-backed securities - private [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Available-for-sale investment securities | 5,317 | |
Recurring [Member] | Total [Member] | Corporate notes [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Available-for-sale investment securities | 36,767 | 36,963 |
Recurring [Member] | Level 2 [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Available-for-sale investment securities | 492,355 | 564,850 |
Total assets at fair value | 492,355 | 564,850 |
Recurring [Member] | Level 2 [Member] | U.S, Treasury and government agencies debt securities [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Available-for-sale investment securities | 6,981 | |
Recurring [Member] | Level 2 [Member] | U.S. government sponsored agencies debt securities [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Available-for-sale investment securities | 2,107 | 22,173 |
Recurring [Member] | Level 2 [Member] | States and political subdivisions debt securities [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Available-for-sale investment securities | 6,038 | |
Recurring [Member] | Level 2 [Member] | Residential mortgage-backed securities - GSE [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Available-for-sale investment securities | 408,464 | 441,074 |
Recurring [Member] | Level 2 [Member] | Residential mortgage-backed securities - private [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Available-for-sale investment securities | 22,621 | 22,945 |
Recurring [Member] | Level 2 [Member] | Commercial mortgage-backed securities - GSE [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Available-for-sale investment securities | 22,396 | 23,359 |
Recurring [Member] | Level 2 [Member] | Commercial mortgage-backed securities - private [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Available-for-sale investment securities | 5,317 | |
Recurring [Member] | Level 2 [Member] | Corporate notes [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Available-for-sale investment securities | 36,767 | 36,963 |
Recurring [Member] | Level 3 [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Mortgage servicing rights | 1,028 | 726 |
Total assets at fair value | $ 1,028 | $ 726 |
Derivative Financial Instruments (Tables)
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments, Gain (Loss) |
|
Loans (Troubled Debt Restructuring) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
loans
|
Mar. 31, 2012
loans
|
|
Financing Receivable, Modifications [Line Items] | ||
Number of loans | 5 | 11 |
Pre-modification outstanding recorded investment | $ 2,928 | $ 426 |
Post-modification outstanding recorded investment | 2,580 | 426 |
Commercial and agricultural [Member]
|
||
Financing Receivable, Modifications [Line Items] | ||
Number of loans | 0 | 0 |
Pre-modification outstanding recorded investment | 0 | 0 |
Post-modification outstanding recorded investment | 0 | 0 |
Real estate - construction [Member]
|
||
Financing Receivable, Modifications [Line Items] | ||
Number of loans | 0 | 2 |
Pre-modification outstanding recorded investment | 0 | 192 |
Post-modification outstanding recorded investment | 0 | 192 |
Real estate - mortgage, 1-4 family residential [Member]
|
||
Financing Receivable, Modifications [Line Items] | ||
Number of loans | 4 | 8 |
Pre-modification outstanding recorded investment | 1,777 | 210 |
Post-modification outstanding recorded investment | 1,773 | 210 |
Real estate - mortgage, commercial [Member]
|
||
Financing Receivable, Modifications [Line Items] | ||
Number of loans | 1 | 0 |
Pre-modification outstanding recorded investment | 1,151 | 0 |
Post-modification outstanding recorded investment | 807 | 0 |
Consumer [Member]
|
||
Financing Receivable, Modifications [Line Items] | ||
Number of loans | 0 | 1 |
Pre-modification outstanding recorded investment | 0 | 24 |
Post-modification outstanding recorded investment | $ 0 | $ 24 |
Loans (Impaired Loans Disclosure) (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Financing Receivable, Impaired [Line Items] | ||
With no related allowance recorded, recorded investment | $ 56,985 | $ 62,282 |
With an allowance recorded, recorded investment | 16,097 | 15,312 |
Impaired Financing Receivable, Recorded Investment | 73,082 | 77,594 |
With no related allowance recorded, unpaid principal balance | 74,277 | 80,510 |
With an allowance recorded, unpaid principal balance | 19,357 | 18,904 |
Impaired Financing Receivable, Unpaid Principal Balance | 93,634 | 99,414 |
Related allowance | 3,129 | 1,737 |
Purchased impaired loans with subsequent deterioration | 176,048 | 192,115 |
Purchased impaired loans with subsequent credit deterioration, unpaid principal balance | 178,265 | 196,617 |
Purchased impaired loans with subsequent deterioration, related allowance | 5,373 | 5,373 |
Commercial and agricultural [Member]
|
||
Financing Receivable, Impaired [Line Items] | ||
With no related allowance recorded, recorded investment | 875 | 1,755 |
With an allowance recorded, recorded investment | 917 | 579 |
Impaired Financing Receivable, Recorded Investment | 1,792 | 2,334 |
With no related allowance recorded, unpaid principal balance | 1,413 | 2,608 |
With an allowance recorded, unpaid principal balance | 917 | 602 |
Impaired Financing Receivable, Unpaid Principal Balance | 2,330 | 3,210 |
Related allowance | 227 | 282 |
Purchased impaired loans with subsequent deterioration | 9,930 | 11,533 |
Purchased impaired loans with subsequent credit deterioration, unpaid principal balance | 9,800 | 11,728 |
Purchased impaired loans with subsequent deterioration, related allowance | 545 | 524 |
Real estate - construction [Member]
|
||
Financing Receivable, Impaired [Line Items] | ||
With no related allowance recorded, recorded investment | 8,953 | 11,875 |
With an allowance recorded, recorded investment | 2,080 | 1,658 |
Impaired Financing Receivable, Recorded Investment | 11,033 | 13,533 |
With no related allowance recorded, unpaid principal balance | 14,910 | 18,553 |
With an allowance recorded, unpaid principal balance | 2,159 | 1,843 |
Impaired Financing Receivable, Unpaid Principal Balance | 17,069 | 20,396 |
Related allowance | 501 | 82 |
Purchased impaired loans with subsequent deterioration | 1,986 | 2,285 |
Purchased impaired loans with subsequent credit deterioration, unpaid principal balance | 1,924 | 2,236 |
Purchased impaired loans with subsequent deterioration, related allowance | 197 | 200 |
Real estate - mortgage, 1-4 family residential [Member]
|
||
Financing Receivable, Impaired [Line Items] | ||
With no related allowance recorded, recorded investment | 14,310 | 16,437 |
With an allowance recorded, recorded investment | 4,599 | 1,681 |
Impaired Financing Receivable, Recorded Investment | 18,909 | 18,118 |
With no related allowance recorded, unpaid principal balance | 17,861 | 20,764 |
With an allowance recorded, unpaid principal balance | 5,360 | 1,745 |
Impaired Financing Receivable, Unpaid Principal Balance | 23,221 | 22,509 |
Related allowance | 1,317 | 607 |
Purchased impaired loans with subsequent deterioration | 33,174 | 34,961 |
Purchased impaired loans with subsequent credit deterioration, unpaid principal balance | 33,776 | 35,802 |
Purchased impaired loans with subsequent deterioration, related allowance | 730 | 711 |
Real estate - mortgage, commercial [Member]
|
||
Financing Receivable, Impaired [Line Items] | ||
With no related allowance recorded, recorded investment | 32,847 | 32,215 |
With an allowance recorded, recorded investment | 8,501 | 11,394 |
Impaired Financing Receivable, Recorded Investment | 41,348 | 43,609 |
With no related allowance recorded, unpaid principal balance | 40,093 | 38,585 |
With an allowance recorded, unpaid principal balance | 10,921 | 14,714 |
Impaired Financing Receivable, Unpaid Principal Balance | 51,014 | 53,299 |
Related allowance | 1,084 | 766 |
Purchased impaired loans with subsequent deterioration | 129,655 | 141,974 |
Purchased impaired loans with subsequent credit deterioration, unpaid principal balance | 131,753 | 145,704 |
Purchased impaired loans with subsequent deterioration, related allowance | 3,351 | 3,388 |
Consumer [Member]
|
||
Financing Receivable, Impaired [Line Items] | ||
With no related allowance recorded, recorded investment | 0 | 0 |
With an allowance recorded, recorded investment | 0 | 0 |
Impaired Financing Receivable, Recorded Investment | 0 | 0 |
With no related allowance recorded, unpaid principal balance | 0 | 0 |
With an allowance recorded, unpaid principal balance | 0 | 0 |
Impaired Financing Receivable, Unpaid Principal Balance | 0 | 0 |
Related allowance | 0 | 0 |
Purchased impaired loans with subsequent deterioration | 1,303 | 1,362 |
Purchased impaired loans with subsequent credit deterioration, unpaid principal balance | 1,012 | 1,147 |
Purchased impaired loans with subsequent deterioration, related allowance | $ 550 | $ 550 |
Loans (Credit Quality Indicator) (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | $ 1,113,765 | $ 1,177,035 | [1] | |||||||
Substandard or Doubtful [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans purchased in the Merger | 70,000 | 60,600 | ||||||||
Pass [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 913,962 | 952,705 | ||||||||
Special Mention [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 62,956 | 71,786 | ||||||||
Substandard [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 136,173 | [2] | 151,396 | [3] | ||||||
Doubtful [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 674 | [2] | 1,148 | [3] | ||||||
Commercial and agricultural [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 77,490 | 79,704 | ||||||||
Commercial and agricultural [Member] | Pass [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 67,700 | 69,003 | ||||||||
Commercial and agricultural [Member] | Special Mention [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 3,416 | 3,447 | ||||||||
Commercial and agricultural [Member] | Substandard [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 6,076 | [2] | 6,953 | [3] | ||||||
Commercial and agricultural [Member] | Doubtful [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 298 | [2] | 301 | [3] | ||||||
Real estate - construction [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 57,653 | 58,414 | ||||||||
Real estate - construction [Member] | Pass [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 41,979 | 40,117 | ||||||||
Real estate - construction [Member] | Special Mention [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 1,817 | 2,031 | ||||||||
Real estate - construction [Member] | Substandard [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 13,857 | [2] | 16,266 | [3] | ||||||
Real estate - construction [Member] | Doubtful [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 0 | [2] | 0 | [3] | ||||||
Real estate - mortgage, 1-4 family residential [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 520,808 | 553,538 | ||||||||
Real estate - mortgage, 1-4 family residential [Member] | Pass [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 471,592 | 504,819 | ||||||||
Real estate - mortgage, 1-4 family residential [Member] | Special Mention [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 14,785 | 15,855 | ||||||||
Real estate - mortgage, 1-4 family residential [Member] | Substandard [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 34,431 | [2] | 32,625 | [3] | ||||||
Real estate - mortgage, 1-4 family residential [Member] | Doubtful [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 0 | [2] | 239 | [3] | ||||||
Real estate - mortgage, commercial [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 414,995 | 441,836 | ||||||||
Real estate - mortgage, commercial [Member] | Pass [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 290,610 | 296,271 | ||||||||
Real estate - mortgage, commercial [Member] | Special Mention [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 42,767 | 50,275 | ||||||||
Real estate - mortgage, commercial [Member] | Substandard [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 81,450 | [2] | 95,126 | [3] | ||||||
Real estate - mortgage, commercial [Member] | Doubtful [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 168 | [2] | 164 | [3] | ||||||
Consumer [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 42,819 | 43,543 | ||||||||
Consumer [Member] | Pass [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 42,081 | 42,495 | ||||||||
Consumer [Member] | Special Mention [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 171 | 178 | ||||||||
Consumer [Member] | Substandard [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | 359 | [2] | 426 | [3] | ||||||
Consumer [Member] | Doubtful [Member]
|
||||||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||||||
Loans held for investment | $ 208 | [2] | $ 444 | [3] | ||||||
|
Other Real Estate Owned and Property Acquired in Settlement of Loans (Details) (USD $)
|
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2012
|
Dec. 31, 2011
|
||||
Repossessed Assets [Abstract] | |||||||
Decrease in total OREO and foreclosed assets | $ 16,600,000 | ||||||
Total OREO and foreclosed assets as a percentage of total nonperforming assets | 40.00% | 44.00% | |||||
Real estate acquired in settlement of loans | 46,307,000 | 62,796,000 | 104,193,000 | 110,009,000 | |||
Personal property acquired in settlement of loans | 230,000 | 335,000 | |||||
Total property acquired in settlement of loans | $ 46,537,000 | $ 63,131,000 | [1] | ||||
|
Fair Values of Assets and Liabilities (Fair Value of Financial Instruments) (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Fair Value, Balance Sheet [Line Items] | ||
Investment securities: Held-to-maturity | $ 73,245 | |
Continuing operations [Member] | Carrying value [Member]
|
||
Fair Value, Balance Sheet [Line Items] | ||
Cash and cash equivalents | 262,293 | 239,610 |
Investment securities: Available-for-sale | 492,355 | 564,850 |
Investment securities: Held-to-maturity | 73,515 | |
Loans held for sale | 5,012 | 6,974 |
Loans, net | 1,084,124 | 1,147,721 |
Accrued interest receivable | 5,546 | 6,102 |
Deposits | 1,856,161 | 1,906,988 |
Retail repurchase agreements | 7,301 | 8,675 |
Federal Home Loan Bank advances | 58,317 | 58,328 |
Junior subordinated debentures | 56,702 | 56,702 |
Accrued interest payable | 2,230 | 2,111 |
Continuing operations [Member] | Estimated fair value [Member]
|
||
Fair Value, Balance Sheet [Line Items] | ||
Cash and cash equivalents | 262,293 | 239,610 |
Investment securities: Available-for-sale | 492,355 | 564,850 |
Investment securities: Held-to-maturity | 73,245 | |
Loans held for sale | 5,012 | 6,974 |
Loans, net | 1,070,762 | 1,140,088 |
Accrued interest receivable | 5,546 | 6,102 |
Deposits | 1,858,736 | 1,910,927 |
Retail repurchase agreements | 7,301 | 8,675 |
Federal Home Loan Bank advances | 62,472 | 62,950 |
Junior subordinated debentures | 19,418 | 18,760 |
Accrued interest payable | 2,230 | 2,111 |
Continuing operations [Member] | Level 1 [Member]
|
||
Fair Value, Balance Sheet [Line Items] | ||
Cash and cash equivalents | 262,293 | 239,610 |
Continuing operations [Member] | Level 2 [Member]
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Fair Value, Balance Sheet [Line Items] | ||
Investment securities: Available-for-sale | 492,355 | 564,850 |
Investment securities: Held-to-maturity | 73,245 | |
Loans held for sale | 5,012 | 6,974 |
Accrued interest receivable | 5,546 | 6,102 |
Deposits | 1,858,736 | 1,910,927 |
Retail repurchase agreements | 7,301 | 8,675 |
Federal Home Loan Bank advances | 62,472 | 62,950 |
Accrued interest payable | 2,230 | 2,111 |
Continuing operations [Member] | Level 3 [Member]
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Fair Value, Balance Sheet [Line Items] | ||
Loans, net | 1,070,762 | 1,140,088 |
Junior subordinated debentures | $ 19,418 | $ 18,760 |
Loans (Allowance for Loan Losses) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
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Mar. 31, 2012
|
Dec. 31, 2012
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Allowance for Loan and Lease Losses [Roll Forward] | |||||||||
Balance, beginning of period | $ 29,314 | [1] | $ 39,360 | ||||||
Charge-offs | (3,010) | (4,015) | |||||||
Recoveries | 3,227 | 1,383 | |||||||
Net charge-offs | 217 | (2,632) | |||||||
Balance, end of period | 29,641 | 39,795 | |||||||
Annualized net charge-offs during the period to average loans | (0.07%) | 0.87% | |||||||
Annualized net charge-offs during the period to ALL | (2.93%) | 26.60% | |||||||
Allowance for loan losses to loans held for investment | 2.66% | [2] | 3.19% | [2] | 2.49% | ||||
Continuing operations [Member]
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|||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||
Provision for losses | $ 110 | $ 3,067 | |||||||
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Basis of Presentation
|
3 Months Ended |
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Mar. 31, 2013
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Nature of Operations FNB United Corp., we or us (which also refers to FNB and our subsidiaries on a consolidated basis) ("FNB"), is a bank holding company incorporated in 1984 under the laws of the State of North Carolina. We own two bank subsidiaries: CommunityOne Bank, N.A. (“CommunityOne”), a national banking association headquartered in Asheboro, North Carolina and, through Bank of Granite Corporation (“Granite Corp.”), Bank of Granite (“Granite”), a state chartered bank headquartered in Granite Falls, North Carolina. On March 1, 2013, we filed an application to merge Granite into CommunityOne. Subject to regulatory approval, we expect to complete the Granite Merger in the second quarter of 2013. Through our bank subsidiaries, we offer a complete line of consumer, wealth management, mortgage and business banking services, including loan, deposit, cash management, investment management and trust services, to individual and business customers through operations located throughout central, southern and western North Carolina, including the counties of Alamance, Alexander, Ashe, Burke, Caldwell, Catawba, Chatham, Gaston, Guilford, Iredell, Mecklenburg, Montgomery, Moore, Orange, Randolph, Richmond, Rowan, Scotland, Watauga and Wilkes. CommunityOne owns two subsidiaries: Dover Mortgage Company (“Dover”) and First National Investor Services, Inc. Dover previously engaged in the business of originating, underwriting and closing mortgage loans for sale in the secondary market. Dover ceased operations in the first quarter of 2011 and filed for Chapter 11 bankruptcy on February 15, 2012. First National Investor Services, Inc. holds deeds of trust for CommunityOne. Through Granite Corp., we also own Granite Mortgage, Inc., which ceased mortgage operations in 2009 and filed for Chapter 11 bankruptcy on February 15, 2012. FNB also owns FNB United Statutory Trust I, FNB United Statutory Trust II, and Catawba Valley Capital Trust II, which were formed to facilitate the issuance of trust preferred securities. On October 21, 2011, as part of the recapitalization of FNB, FNB acquired Granite Corp., through the merger of a wholly owned subsidiary of FNB merging into Granite Corp. (the "Merger"). The Merger was part of FNB's recapitalization strategy. General The accompanying consolidated financial statements, prepared without audit, include the accounts of FNB and its subsidiaries. All significant intercompany balances and transactions have been eliminated. Descriptions of the organization and business of FNB, accounting policies followed by FNB and other relevant information are contained in FNB's Annual Report on Form 10-K for the year ended December 31, 2012, (the "Form 10-K"), including the notes to the consolidated financial statements filed as part of that report. This quarterly report should be read in conjunction with the Form 10-K. In the opinion of management, the accompanying condensed consolidated financial statements contain all the adjustments, all of which are normal recurring adjustments, necessary to present fairly the financial position of FNB as of March 31, 2013 and December 31, 2012, and the results of its operations and cash flows for the three months ended March 31, 2013 and 2012, respectively. All financial information is reported on a continuing operations basis, unless otherwise noted. See Note 2 to the consolidated financial statements for a discussion regarding discontinued operations and certain assets and liabilities at March 31, 2013 and December 31, 2012. Use of Estimates We have made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period to prepare these consolidated financial statements in conformity with accounting principles generally accepted in the United States ("GAAP"). Actual results could differ from those estimates. Material estimates subject to change in the near term include, among other items, the allowances for loan losses (“ALL”), the carrying value of other real estate owned (“OREO”), the carrying value of intangible assets and the realization of deferred tax assets. Reclassification Certain reclassifications have been made to the prior period consolidated financial statements to place them on a comparable basis with the current period consolidated financial statements. These reclassifications have no effect on net income or shareholders' equity as previously reported. Subsequent Events Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Non-recognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date. Management has reviewed events occurring through the date of this filing and has concluded that no subsequent events have occurred requiring accrual or disclosure in addition to that included herein. Recent Accounting Pronouncements Comprehensive Income - In February 2013, the FASB issued ASU No. 2013-02 Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU No. 2013-02”). This pronouncement requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income for each applicable component of net income, as well as a rollforward of the components of accumulated other comprehensive income on a prospective basis. This pronouncement is effective beginning January 1, 2013. The provisions of ASU No. 2013-02 relate only to financial statement presentation of other comprehensive income and, accordingly, its adoption did not have a material effect on FNB's financial statements. See Note 10 for further disclosure. FASB - From time to time, the Financial Accountings Standards Board (“FASB”) issues exposure drafts for proposed statements of financial accounting standards. Such exposure drafts are subject to comment from the public, to revisions by the FASB and to final issuance by the FASB as statements of financial accounting standards. Management considers the effect of the proposed statements on the consolidated financial statements of FNB and monitors the status of changes to and proposed effective dates of exposure drafts. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on FNB’s financial position, results of operations or cash flows. |
Accumulated Other Comprehensive Income (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
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Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
Beginning balance | $ (323) | [1] | |||
Other comprehensive income before reclassifications | (2,985) | ||||
Amounts reclassified from accumulated other comprehensive income | (1,592) | ||||
Net current period other comprehensive income | (4,577) | 730 | |||
Ending balance | (4,900) | ||||
Unrealized gains (losses) on available for sale securities [Member]
|
|||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
Beginning balance | 3,650 | ||||
Other comprehensive income before reclassifications | (2,985) | ||||
Amounts reclassified from accumulated other comprehensive income | (1,438) | ||||
Net current period other comprehensive income | (4,423) | ||||
Ending balance | (773) | ||||
Defined benefit plan items [Member]
|
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Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
Beginning balance | (3,973) | ||||
Other comprehensive income before reclassifications | 0 | ||||
Amounts reclassified from accumulated other comprehensive income | (154) | ||||
Net current period other comprehensive income | (154) | ||||
Ending balance | $ (4,127) | ||||
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