Subsequent Events

6 Months Ended

Jun. 30, 2011

Subsequent Events

Subsequent Events

22. Subsequent Events

On August 1, 2011, the Bank and SunTrust Bank entered into an agreement to settle the $2.5 million in subordinated debt of the Bank held by SunTrust Bank for cash in amount equal to 35% of the principal amount of the debt, plus 100% of the accrued but unpaid interest on the debt as of the closing date of the proposed merger with Bank of Granite Corporation. The agreement also provides for the Bank's repurchase of the 12.5 million shares of Bank preferred stock owned by SunTrust Bank for cash in an amount equal to 25% of the aggregate liquidation amount of the preferred stock, plus 100% of the accrued but unpaid dividends thereon as of the closing date of the merger.

On August 3, 2011, the Company received written notice from The Nasdaq Stock Market of the Nasdaq staff's determination that the Company has not regained compliance with Nasdaq Listing Rule 5550(a)(2), the bid price rule. On August 2, 2010, the Nasdaq staff notified the Company that it was not in compliance with Listing Rule 5450(a)(1), the bid price rule for continued listing on The Nasdaq Global Market, and provided the Company 180 calendar days, or until January 31, 2011, to regain compliance with the rule. Subsequently, on February 3, 2011, the Company transferred to The Nasdaq Capital Market and was afforded a second 180-day period, or until August 1, 2011, to regain compliance. The Company previously received a notice dated June 10, 2011 from The Nasdaq Stock Market that the Company is also not in compliance with Nasdaq Listing Rule 5550(b)(1), the stockholders' equity rule. The Company is in the process of appealing the determination of the Nasdaq staff to remove the Company's common stock from listing and registration on The Nasdaq Stock Market. The Company's common stock will continue to trade on The Nasdaq Capital Market under the symbol "FNBN" during the appeals period.

On August 4, 2011, the Company entered into binding subscription agreements with various accredited investors and amendments to the investment agreements with Carlyle and Oak Hill Capital and certain of the subscription agreements executed on June 16, 2011 to finalize allocations of the Company's proposed $310 million capital raise.