ASHEBORO, N.C.--(BUSINESS WIRE)--October 22, 2009--FNB United Corp. (NASDAQ:FNBN), the holding company for CommunityONE Bank, N.A., and its wholly owned subsidiary, Dover Mortgage Company, today reported financial results for the third quarter of 2009. During the quarter, FNB United recognized a provision for loan losses of $17.5 million, charged off goodwill of $52.4 million, established a valuation reserve of $6 million for deferred tax assets, and took an Other Than Temporary Impairment (OTTI) write-down of $4.0 million on a specific investment security. As a result, FNB United reported a net operating loss, excluding the goodwill impairment charge, the OTTI charge, and the deferred tax asset valuation reserve, of $7.3 million. The net loss on a GAAP basis was $67.5 million. Adjusting for dividends paid to the U.S. Treasury on the preferred stock issued in the Capital Purchase Program, the resulting loss allocated to common shareholders was $68.3 million, or $5.98 per diluted share, in the third quarter of 2009. The non-cash goodwill impairment charge represents the write-off of FNB United’s remaining goodwill recorded from prior bank acquisitions. The goodwill impairment charge does not affect liquidity, operations, tangible capital or the corporation’s regulatory capital ratios.

In the third quarter a year ago, following a $9.4 million provision for loan losses, FNB United reported a net operating loss of $1.7 million, or $0.15 loss per diluted share. For the first nine months of 2009, FNB United reported a net operating loss, excluding the goodwill impairment charge, the OTTI charge, the deferred tax valuation reserve and a $1 million special assessment imposed by the FDIC in the second quarter, of $13.4 million. For the first nine months of 2009, reported net operating losses were $73.7 million and losses attributable to common shareholders, taking into account preferred dividends, were $75.7 million, or $6.63 loss per diluted share. In the first nine months of 2008, FNB United earned $754,000, or $0.07 per diluted share.

“Like many other banks, the prolonged downturn in the residential real estate market and its resulting impact on contractors, developers, and property values, has adversely affected our loan portfolio and caused us to add to our reserve for loan losses,” said Michael C. Miller, President and CEO. “The continued decline in the real estate market has resulted in an increase in nonperforming loans and charge-offs, primarily in the residential land and construction portfolios. We are facing the current economic challenges head-on by aggressively and proactively identifying and working-out potential problem loans. The bank continues to be ‘well-capitalized’ under all regulatory requirements and has been very successful in growing retail deposits and building strong levels of liquidity.”

“We’ve set aside significant reserves for the last four quarters, increasing our allowance for loan losses to 2.69% of total loans, compared to 1.68% a year earlier,” Miller continued. “Although we anticipate the provision for loan losses may continue to be elevated during the remainder of 2009, we are encouraged about the future, as we believe our core operating performance will be sufficient to sustain us through these difficult economic times. We have the capital and the liquidity to carry us forward.”

Nonperforming loans increased during the quarter to $154 million, or 9.76 % of total loans, at September 30, 2009, compared to 8.48% three months earlier. Construction, land and land development loans were 66.2% of nonperforming loans at quarter end. Nonperforming loans were $135.0 million at the end of the preceding quarter and $40.8 million a year ago.

Nonperforming assets were $179 million, or 8.14% of total assets at the end of September, compared to $145.4 million, or 6.61% at the end of the preceding quarter, and $47.4 million, or 2.29% a year ago. Nonperforming assets include all nonperforming loans, all loans over 90 days delinquent and still accruing interest, other real estate owned, and other repossessed loan collateral. Loans delinquent 30-89 days and still accruing totaled $25.3 million, or 1.60% of total loans at September 30, 2009, compared to $19.0 million, or 1.20% of total loans at June 30, 2009, and $8.1 million, or 0.51% of total loans at September 30, 2008. The bank had loans that were 90 days or more past due and still accruing, totaling $7.7 million at September 30, 2009.

“We continue to build our allowance for loan losses, with a provision expense of $17.5 million during the third quarter, and a year-to-date provision expense of $37.1 million. Last year we booked a provision of $9.4 million in the third quarter and $12.3 million in the first nine months,” Miller added. The allowance for loan losses now totals $42.3 million at quarter-end, equal to 2.69% of total loans, compared to 2.31% at June 30, 2009 and 1.68% at September 30, 2008.

“To reflect the current state of the real estate market valuations, we are aggressively writing off problem loans and in the first nine-months of the year had net charge offs totaling $29.5 million,” Miller said. Net charge-offs were $12.0 million for the third quarter and $7.3 million for the preceding quarter. In the third quarter a year ago, net charge-offs totaled $1.5 million. FNB United’s other real estate owned and repossessed loan collateral increased to $24.6 million at quarter-end, compared to $10.4 million in the preceding quarter, and $6.6 million at September 30, 2008.

“Housing sales slowed markedly and consumer confidence sagged beginning in 2008 and as a result, solid projects have stalled,” said Miller. “Although we don’t know how long this period will last, or the extent of any further decline, we expect sales to increase when the economic recovery begins. We are pleased to note that the rate of decline has slowed measurably.”

Loans held for investment were $1.58 billion at quarter-end, compared to $1.59 billion a year earlier. The loan portfolio remains well diversified with a wide variety of borrowers and collateral and much of the business remains a strong revenue generator. At the end of September single family mortgage loans approximated 18.5% of total loans, compared to 16.2% a year earlier, construction and development loans decreased to 26.7% of the loan portfolio, compared to 31.1% a year ago, commercial and industrial loans decreased to 8.1%, compared to 8.8% at September 30, 2008. Home equity loans increased to 9.2% of total loans, versus 7.5% a year earlier. Commercial real estate, which is 62.6% owner occupied, decreased to 32.3% of total loans compared to 32.6% a year ago.

Total assets increased 6.2% to $2.20 billion at September 30, 2009, compared to $2.07 billion a year earlier.

“Our core deposit growth has been the best in our company’s history,” said Miller. “We attribute this growth in part to opening three new community offices in excellent markets, the exceptional customer service provided by our staff, and also as a result of customer flight from some of the larger institutions in our marketplace.” Total deposits increased 13.4% to $1.72 billion at September 30, 2009, compared to $1.52 billion a year earlier and total deposits increased $82.0 million, or 5.0% compared to three months earlier. Core deposits increased 12.8% to $725.5 million at quarter-end, compared to $643.0 million a year earlier and certificates of deposit increased 13.8% to $996 million, from $876 million a year earlier. Brokered certificates of deposits were $95.2 million at September 30, 2009, representing 5.5% of total deposits.

Shareholders’ equity was $128.6 million at September 30, 2009, compared to $211.4 million a year earlier. The change in shareholder equity includes the goodwill write-downs totaling $108.4 million and issuing $51.5 million of preferred stock as a participant in the U.S. Treasury Department’s Capital Purchase Program.

FNB United remains well capitalized for regulatory purposes at September 30, 2009. Book value per share was $6.71 at quarter-end compared to $18.51 a year earlier, and tangible book value per share was $6.26 at quarter-end, compared to $8.50 a year earlier.

In October 2009, FNB United announced that it would temporarily discontinue its regular quarterly cash dividend on common stock. “To conserve capital, the Board elected to temporarily discontinue regular quarterly cash dividend payments to common shareholders,” said Miller. “Future operating earnings will dictate the return of the cash dividends that our historical financial performance has provided.”

On February 13, 2009, FNB United received $51.5 million as a participant in the U.S. Treasury Department's Capital Purchase Program. FNB United issued 51,500 shares of senior preferred stock and a related warrant for 2,207,143 shares of FNB United common stock to the U.S. Treasury. To date, FNB United has paid $1.3 million in dividends to the U.S. Treasury.

FNB United’s net interest margin was 3.25% for the third quarter of 2009 compared to 3.10% in the immediate prior quarter and 3.32% in the third quarter a year ago. “The reduction in our deposit costs more than offset the impact of additional nonperforming loans. As a result our net interest margin improved during the third quarter compared to the previous quarter,” said Miller. “Our yield on interest earning assets declined by six basis points compared to the previous quarter and the cost of interest-bearing liabilities declined 23 basis points.” For the first nine months of the year, the net interest margin was 3.14% compared to 3.52% for the first nine months of 2008.

Third quarter net interest income before the provision for loan losses increased 10.0% to $16.4 million, compared to $14.9 million in the third quarter a year ago. Net interest income before the provision for loan losses was $15.2 million in the immediate prior quarter. Total noninterest income was $5.0 million for the quarter, compared to $5.5 million in the preceding quarter and $6.4 million in the third quarter a year ago. The decline in noninterest income for the third quarter of 2009 was primarily due to a $4.0 million OTTI charge on an investment security, which more than offset the $2.0 million increase on the gain on sale of mortgage loans compared to the prior year’s third quarter. Gains on the sale of mortgage loans totaled $4.1 million in the third quarter of 2009, compared to $2.6 million in the preceding quarter and $2.1 million in the third quarter a year ago, as Dover Mortgage and the bank’s internal mortgage operation have produced record originations.

For the first nine months of 2009, net interest income before the provision for loan losses was $45.8 million, compared to $46.0 million in the first nine months of 2008. Noninterest income increased 2.6% to $16.1 million for the first nine months of 2009 compared to $15.7 million in the first nine months of 2008.

Third quarter noninterest expense was $19.2 million, excluding the goodwill impairment charge, compared to $16.4 million in the preceding quarter and $15.3 million in the third quarter a year ago. FDIC insurance expense increased $1.2 million over the prior year’s third quarter. However, compensation and benefit expense remained nearly unchanged due in part to the decrease in the number of full-time employees. The company has frozen wages for all employees during 2009 and reduced the company contribution toward the 401K retirement plan. Excluding goodwill impairment charges taken in the third quarter of 2009 and the second quarter of 2008, total noninterest expense for the first nine months of the year was $51.1 million, compared to $46.5 million for the first nine months a year ago.

FNB United Corp. is the Asheboro, North Carolina-based bank holding company for CommunityONE Bank, N.A., and the bank’s subsidiary, Dover Mortgage Company. Opened in 1907, CommunityONE Bank (MyYesBank.com) operates 45 offices in 38 communities throughout central, southern and western North Carolina. Through these subsidiaries, FNB United offers a complete line of consumer, mortgage and business banking services, including loan, deposit, cash management, wealth management and internet banking services.

This news release may contain forward-looking statements regarding future events. Forward-looking statements often address our expected future business and financial performance, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” or “will.” These statements are only predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially. These risks and uncertainties include risks of managing our growth, changes in financial markets, changes in real estate markets, regulatory changes, changes in interest rates, changes in economic conditions being less favorable than anticipated, and loss of deposits and loan demand to other financial institutions. Additional information concerning factors that could cause actual results to be materially different from those in the forward-looking statements is contained in FNB United’s filings with the Securities and Exchange Commission. FNB United does not assume any obligation to update these forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.


RESULTS OF OPERATIONS
(In thousands except share and per share data)
	Quarter Ended												Percent Change From
	September 30, 2009			June 30, 2009			December 31, 2008			September 30, 2008			June 30, 2009		September 30, 2008
INTEREST INCOME:
Interest and fees on loans	$	21,132		$	21,264		$	23,584		$	25,715		-0.6	%	-17.8	%
Interest and dividends on investments securities:
Taxable income		4,689			4,375			2,434			1,795		7.2	%	161.2	%
Non-taxable income		562			327			539			471		71.9	%	19.3	%
Other interest income		115			87			87			204		32.2	%	-43.6	%
Total interest income		26,498			26,053			26,644			28,185		1.7	%	-6.0	%
INTEREST EXPENSE:
Deposits		7,969			8,605			9,632			10,150		-7.39	%	-21.49	%
Borrowed funds		2,112			2,202			2,975			3,105		-4.09	%	-31.98	%
Total interest expense		10,081			10,807			12,607			13,255		-6.72	%	-23.95	%
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES		16,417			15,246			14,037			14,930		7.68	%	9.96	%
Provision for loan losses		17,500			5,525			15,492			9,370		216.74	%	86.77	%
NET INTEREST (LOSS)/INCOME AFTER PROVISION FOR LOAN LOSSES		(1,083	)		9,721			(1,455	)		5,560		-111.14	%	-119.48	%
NONINTEREST INCOME:
Service charges on deposit accounts		2,333			2,232			2,539			2,450		4.53	%	-4.78	%
Mortgage loan income		4,113			2,608			2,430			2,111		57.71	%	94.84	%
Cardholder and merchant services income		650			582			600			615		11.68	%	5.69	%
Trust and investment services		459			440			438			458		4.32	%	0.22	%
Bank owned life insurance		363			242			255			243		50.00	%	49.38	%
Other service charges, commissions and fees		301			296			273			136		1.69	%	121.32	%
Security gains		620			4			647			-		15400.00	%	N/A
Total other-than-temporary impairment loss		(3,985	)		(4,367	)		-			-		-8.75	%	N/A
Portion of loss recognized in other comprehensive income		-			3,367			-			-		-100.00	%	N/A
Net impairment loss recognized in earnings		(3,985	)		(1,000	)		-			-		298.50	%	N/A
Other income		106			86			49			421		23.26	%	-74.82	%
Total noninterest income		4,960			5,490			7,231			6,434		-9.65	%	-22.91	%
NONINTEREST EXPENSE:
Personnel expense		8,559			8,100			6,750			8,349		5.67	%	2.52	%
Net occupancy expense		1,365			1,286			1,331			1,354		6.14	%	0.81	%
FF&E and data processing expenses		1,843			1,690			1,764			1,616		9.05	%	14.05	%
Goodwill impairment		52,395			-			56,000			-		N/A		N/A
Other expense		7,391			5,280			3,973			3,958		39.98	%	86.74	%
Total noninterest expense		71,553			16,356			69,818			15,277		337.47	%	368.37	%
(LOSS) BEFORE INCOME TAXES		(67,676	)		(1,145	)		(64,042	)		(3,283	)	5810.57	%	1961.41	%
Income taxes (benefit)		(185	)		(742	)		(3,481	)		(1,570	)	-75.07	%	-88.22	%
NET (LOSS)		(67,491	)		(403	)		(60,561	)		(1,713	)	16647.15	%	3839.93	%
Preferred stock dividends		(813	)		(809	)		-			-		0.49	%	N/A
NET (LOSS) TO COMMON SHAREHOLDERS'	$	(68,304	)	$	(1,212	)	$	(60,561	)	$	(1,713	)	5535.64	%	3887.39	%

Loss per common share:
Basic	$	(5.98	)	$	(0.11	)	$	(5.31	)	$	(0.15	)	5532.12	%	3881.81	%
Diluted	$	(5.98	)	$	(0.11	)	$	(5.31	)	$	(0.15	)	5532.12	%	3881.81	%

Cash dividends declared per common share	$	-		$	0.025		$	0.10		$	0.10		-100.00	%	-100.00	%

Weighted average shares outstanding:
Basic		11,420,868			11,413,735			11,406,361			11,404,885
Diluted		11,420,868			11,413,735			11,406,361			11,404,885


RESULTS OF OPERATIONS
(In thousands except share and per share data)
	Year-to-Date
	September 30, 2009			September 30, 2008		Percent Change
INTEREST INCOME:
Interest and fees on loans	$	63,995		$	79,781	-19.8	%
Interest and dividends on investments securities:
Taxable income		11,864			5,386	120.3	%
Non-taxable income		1,756			1,501	17.0	%
Other interest income		282			723	-61.0	%
Total interest income		77,897			87,391	-10.9	%
INTEREST EXPENSE:
Deposits		25,448			32,578	-21.9	%
Borrowed funds		6,653			8,832	-24.7	%
Total interest expense		32,101			41,410	-22.5	%
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES		45,796			45,981	-0.4	%
Provision for loan losses		37,084			12,267	202.3	%
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		8,712			33,714	-74.2	%
NONINTEREST INCOME:
Service charges on deposit accounts		6,640			6,742	-1.5	%
Mortgage loan income		8,651			3,910	121.3	%
Cardholder and merchant services income		1,854			1,681	10.3	%
Trust and investment services		1,241			1,389	-10.7	%
Bank owned life insurance		833			728	14.4	%
Other service charges, commissions and fees		882			523	68.6	%
Security gains		617			6	10183.3	%
Total other than temporary impairment loss		(4,985	)		-	N/A
Portion of loss recognized in other comprehensive income		-			-	N/A
Net impairment loss recognized in earnings		(4,985	)		-	N/A
Other income		362			714	-49.3	%
Total noninterest income		16,095			15,693	2.6	%
NONINTEREST EXPENSE:
Personnel expense		24,826			26,242	-5.4	%
Net occupancy expense		4,173			4,012	4.0	%
FF&E and data processing expenses		5,325			4,948	7.6	%
Goodwill impairment		52,395			1,800	2810.8	%
Other expense		16,798			11,288	48.8	%
Total noninterest expense		103,517			48,290	114.4	%
(LOSS)/INCOME BEFORE INCOME TAXES		(78,710	)		1,117	-7146.6	%
Income taxes (benefit)/expense		(5,050	)		363	-1491.2	%
NET (LOSS)/INCOME		(73,660	)		754	-9869.2	%
Preferred stock dividends		(2,055	)		-	N/A
NET (LOSS)/INCOME TO COMMON SHAREHOLDERS'	$	(75,715	)	$	754	-10141.8	%

(Loss)/Earnings per common share:
Basic	$	(6.63	)	$	0.07	-10135.7	%
Diluted	$	(6.63	)	$	0.07	-10138.2	%

Cash dividends declared per common share	$	0.05		$	0.35	-85.7	%

Weighted average shares outstanding:
Basic		11,414,928			11,408,037
Diluted		11,414,928			11,410,830


FINANCIAL CONDITION
(In thousands except share and per share data)
	As of												Percent Change From
	September 30, 2009			June 30, 2009			December 31, 2008			September 30, 2008			June 30, 2009		September 30, 2008
ASSETS
Cash and due from banks	$	32,160		$	26,675		$	28,743		$	34,502		20.6	%	-6.8	%
Interest-bearing bank balances		376			56			404			247		571.4	%	52.2	%
Federal funds sold		65,064			42			206			207		154814.3	%	31331.9	%
Securities available-for-sale		261,811			254,826			205,426			179,433		2.7	%	45.9	%
Securities held-to-maturity		92,777			100,475			27,794			23,328		-7.7	%	297.7	%
Loans held for sale		52,520			64,850			36,138			20,261		-19.0	%	159.2	%
Loans held for investment		1,576,530			1,591,686			1,585,195			1,589,064		-1.0	%	-0.8	%
Less: Allowance for loan losses		(42,349	)		(36,844	)		(34,720	)		(26,750	)	14.9	%	58.3	%
Net loans held for investment		1,534,181			1,554,842			1,550,475			1,562,314		-1.3	%	-1.8	%
Property and equipment, net		48,852			49,430			50,947			51,038		-1.2	%	-4.3	%
Goodwill		-			52,395			52,395			108,395		-100.0	%	-100.0	%
Core deposit premiums		5,166			5,365			5,762			5,961		-3.7	%	-13.3	%
Other assets		100,999			90,650			86,144			84,351		11.4	%	19.7	%
Total Assets	$	2,193,906		$	2,199,606		$	2,044,434		$	2,070,037		-0.3	%	6.0	%
LIABILITIES
Deposits:
Noninterest-bearing demand deposits	$	147,751		$	155,223		$	150,273		$	158,794		-4.8	%	-7.0	%
Interest-bearing deposits:
Demand, savings, and money market deposits		577,778			549,630			479,223			484,241		5.1	%	19.3	%
Time deposits of $100,000 or more		445,545			295,490			407,539			422,107		50.8	%	5.6	%
Other time deposits		550,668			639,412			477,712			453,452		-13.9	%	21.4	%
Total deposits		1,721,742			1,639,755			1,514,747			1,518,594		5.0	%	13.4	%
Retail repurchase agreements		19,467			17,460			18,145			25,552		11.5	%	-23.8	%
Federal Home Loan Bank advances		167,953			184,445			238,910			212,387		-8.9	%	-20.9	%
Federal funds purchased		75,000			80,000			37,000			9,000		-6.3	%	733.3	%
Subordinated debt		15,000			15,000			15,000			15,000		0.0	%	0.0	%
Junior subordinated debentures		56,702			56,702			56,702			56,702		0.0	%	0.0	%
Other borrowings		-			-			-			5,000		N/A		-100.0	%
Other liabilities		9,439			13,517			16,013			16,386		-30.2	%	-42.4	%
Total liabilities		2,065,303			2,006,879			1,896,517			1,858,621		2.9	%	11.1	%
SHAREHOLDERS' EQUITY
Series A preferred stock		48,033			47,864			-			-		0.4	%	N/A
Common stock warrants		3,891			3,891			-			-		0.0	%	N/A
Common stock		28,566			28,573			28,570			28,555		0.0	%	0.0	%
Surplus		114,983			115,043			114,772			114,593		-0.1	%	0.3	%
Retained earnings		(67,385	)		920			8,904			70,609		-7424.5	%	-195.4	%
Accumulated other comprehensive loss		515			(3,564	)		(4,329	)		(2,341	)	-114.5	%	-122.0	%
Total shareholders' equity		128,603			192,727			147,917			211,416		-33.3	%	-39.2	%
Total Liabilities and Shareholders' Equity	$	2,193,906		$	2,199,606		$	2,044,434		$	2,070,037		-0.3	%	6.0	%
Shares outstanding at end of period		11,426,413			11,429,203			11,428,003			11,422,003		0.0	%	N/A
Book value per share (1)	$	6.71		$	12.33		$	12.94		$	18.51		-45.6	%	-63.7	%
Tangible book value per share (1)(2)	$	6.26		$	7.28		$	7.85		$	8.50		-14.0	%	-26.3	%

(1) - Calculation is based on number of shares outstanding at the end of the period rather than weighted average shares outstanding.

(2) - Calculation excludes goodwill and core deposit premiums.


ADDITIONAL FINANCIAL INFORMATION
(Dollars in thousands)
(Rates / Ratios Annualized)
	For the Quarters Ended
OPERATING PERFORMANCE:	September 30, 2009			June 30, 2009			December 31, 2008			September 30, 2008
Average loans	$	1,658,180		$	1,639,395		$	1,611,328		$	1,607,099
Average securities		351,253			341,380			218,307			196,992
Average other interest-earning assets		32,799			18,903			25,052			22,232
Average noninterest-earning assets		172,258			169,848			230,138			240,177
Total average assets	$	2,214,490		$	2,169,526		$	2,084,825		$	2,066,500

Average interest-bearing deposits	$	1,498,662		$	1,470,461		$	1,357,565		$	1,328,277
Average noninterest bearing deposits		156,347			154,327			151,560			160,233
Average borrowings		352,366			339,948			344,699			342,464
Average noninterest-earning liabilities		13,449			11,809			20,165			19,805
Total average liabilities		2,020,824			1,976,545			1,873,989			1,850,779
Total average shareholders' equity		193,666			192,981			210,836			215,721
Total average liabilities and shareholders' equity	$	2,214,490		$	2,169,526		$	2,084,825		$	2,066,500

Interest rate yield on loans		5.06	%		5.21	%		5.83	%		6.38	%
Interest rate yield on securities		6.27	%		5.73	%		5.95	%		5.09	%
Interest rate yield on interest-earning assets		5.21	%		5.27	%		5.79	%		6.21	%
Interest rate expense on deposits		2.11	%		2.35	%		2.82	%		3.04	%
Interest rate expense on borrowings		2.38	%		2.60	%		3.43	%		3.61	%
Interest rate expense on interest-bearing liabilities		2.16	%		2.39	%		2.95	%		3.16	%
Interest rate spread		3.05	%		2.87	%		2.84	%		3.05	%
Net interest margin		3.25	%		3.10	%		3.08	%		3.32	%


Other operating income / Average assets		0.89	%		1.01	%		1.38	%		1.24	%
Other operating expense / Average assets		12.82	%		3.02	%		13.32	%		2.94	%
Efficiency ratio (other operating expense / revenue before provision)		334.72	%		78.88	%		328.28	%		71.51	%
Return on average assets		(12.09	%)		(0.07	%)		(11.56	%)		(0.33	%)
Return on average tangible assets		(12.41	%)		(0.08	%)		(12.22	%)		(0.35	%)
Return on average equity		(138.26	%)		(0.84	%)		(114.27	%)		(3.16	%)
Return on average tangible equity		(196.10	%)		(1.20	%)		(247.97	%)		(6.73	%)
Average equity / Average assets		8.75	%		8.90	%		10.11	%		10.44	%


ADDITIONAL FINANCIAL INFORMATION
(Dollars in thousands)
	As of / For the Quarters Ended												As of / For the Nine Months Ended
NONPERFORMING ASSETS	September 30, 2009			June 30, 2009			December 31, 2008			September 30, 2008			September 30, 2009			September 30, 2008
Loans on nonaccrual status	$	146,227		$	132,312		$	95,173		$	39,260		$	146,227		$	39,260
Loans more than 90 days delinquent, still on accrual		7,670			2,705			853			1,522			7,670			1,522
Total nonperforming loans		153,897			135,017			96,026			40,782			153,897			40,782
Real estate owned (OREO)/Repossessed assets		24,635			10,374			6,898			6,616			24,635			6,616
Total nonperforming assets	$	178,532		$	145,391		$	102,924		$	47,398		$	178,532		$	47,398
Total nonperforming assets/Total assets		8.14	%		6.61	%		5.03	%		2.29	%		8.14	%		2.29	%

CHANGE IN THE ALLOWANCE FOR LOAN LOSSES	September 30, 2009			June 30, 2009			December 31, 2008			September 30, 2008			September 30, 2009			September 30, 2008
Balance, beginning of period	$	36,844		$	38,573		$	26,750		$	18,845		$	34,720		$	17,381
Provision		17,500			5,525			15,492			9,370			37,084			12,267
Recoveries of loans previously charged off		993			372			2,057			566			1,971			1,285
Loans charged-off		(12,988	)		(7,626	)		(9,579	)		(2,031	)		(31,426	)		(4,183	)
Net (charge-offs)/recoveries		(11,995	)		(7,254	)		(7,522	)		(1,465	)		(29,455	)		(2,898	)
Balance, end of period	$	42,349		$	36,844		$	34,720		$	26,750		$	42,349		$	26,750
Net chargeoffs/Average loans outstanding (annualized)		2.99	%		1.83	%		1.89	%		0.37	%		2.48	%		0.37	%
Allowance for loan losses/Loans held for investment		2.69	%		2.31	%		2.19	%		1.68	%		2.69	%		1.68	%

DEPOSITS	September 30, 2009			June 30, 2009			December 31, 2008			September 30, 2008			September 30, 2009			September 30, 2008
Noninterest-bearing	$	147,751		$	155,223		$	150,273		$	158,794		$	147,751		$	158,794
Interest-bearing transaction deposits:
Checking		208,723			199,044			173,614			174,773			208,723			174,773
Money Market		327,761			310,036			267,496			269,686			327,761			269,686
Savings		41,294			40,550			38,113			39,782			41,294			39,782
Total interest-bearing transaction deposits		577,778			549,630			479,223			484,241			577,778			484,241
Interest-bearing time deposits		996,213			934,902			885,251			875,559			996,213			875,559
Total deposits	$	1,721,742		$	1,639,755		$	1,514,747		$	1,518,594		$	1,721,742		$	1,518,594