Going Concern Considerations And Management's Plans And Intentions	9 Months Ended
Sep. 30, 2011
Going Concern Considerations And Managements Plans And Intentions [Abstract]
Going Concern Considerations And Management's Plans And Intentions	4. Going Concern Considerations and Management's Plans and Intentions Going Concern Considerations The going concern assumption is a fundamental principle in the preparation of financial statements. It is the responsibility of management to assess the Company's ability to continue as a going concern. In making this assessment, the Company has taken into account all available information about the future, which is at least, but is not limited to, twelve months from the balance sheet date of September 30, 2011. The Company had a history of profitable operations and sufficient sources of liquidity to meet its short-term and long-term funding needs. However, the Company's financial condition has suffered during 2009, 2010 and the first nine months of 2011 in what may ultimately be the worst economic downturn since the Great Depression. The effects of the current economic environment are being felt across many industries, with financial services and real estate being particularly hard-hit, and have been particularly severe during the last three years. The Company, with a loan portfolio consisting of a concentration in commercial real estate loans, including residential construction and development loans, has seen a decline in the value of the collateral securing its portfolio as well as rapid deterioration in its borrowers' cash flow and ability to repay their outstanding loans to the Company. For the first nine months of 2011 and for the year ended December 31, 2010, the Company recorded provisions of $60.9 million and $132.8 million, respectively, to increase the allowance for loan losses to a level that, in management's best judgment, adequately reflected the increased risk inherent in the loan portfolio as of the quarter-end and year-end periods, respectively. FNB United and the Bank operate in a highly regulated industry and must plan for the liquidity needs of each entity separately. A variety of sources of liquidity are available to the Bank to meet its short-term and long-term funding needs. Although a number of these sources are limited following execution of the Order with the OCC, management has prepared forecasts of the Bank's sources of funds and projected uses of funds for a three-year period in an effort to ensure that the sources available are sufficient to meet the Bank's projected liquidity needs. FNB United is a legal entity separate and distinct from the Bank and has in the past relied on dividends from the Bank as its primary source of liquidity. The Order and the Written Agreement, as well as the Prompt Correction Action provisions of federal law, prohibit the Bank from lending or otherwise supplying funds to FNB United to meet its obligations, including paying any dividends. Not later than 90 days after an institution becomes critically undercapitalized, the institution's primary federal bank regulatory agency must appoint a receiver or a conservator, unless the agency, with the concurrence of the FDIC, determines that the purposes of the prompt corrective action provisions would be better served by another course of action. Any alternative determination must be documented by the agency and reassessed on a periodic basis. Notwithstanding the foregoing, a receiver must be appointed after 270 days unless the FDIC determines that the institution has positive net worth, is in compliance with a capital plan, is profitable or has a sustainable upward trend in earnings, and is reducing its ratio of nonperforming loans to total loans, and unless the head of the appropriate federal banking agency and the chairperson of the FDIC certify that the institution is viable and not expected to fail. In efforts to raise capital to meet the standards set forth in applicable law and required by the OCC, on April 26, 2011, FNB United entered into investment agreements (the "Investment Agreements") with The Carlyle Group ("Carlyle") and Oak Hill Capital Partners ("Oak Hill Capital") to recapitalize FNB United, as well as a merger agreement (the "Merger Agreement") with Granite. On June 16 and August 4, 2011, FNB United entered into subscription agreements with various accredited investors for the purchase and sale of its common stock. On October 21, 2011, FNB United issued and sold $310 million of its common stock at $0.16 per share pursuant to the Investment Agreements with Carlyle and Oak Hill Capital and the subscription agreements. Details of the Investment Agreements, the subscription agreements and the Merger Agreement can be found in Note 21, Capital Raise, Merger Agreement and Related Matters and Note 22, Subsequent Events. The perception or possibility that FNB United's common stock could be delisted from the Nasdaq in the future could negatively affect its liquidity and price. Delisting would have an adverse effect on the liquidity of the common shares and, as a result, the market price for the common stock might become more volatile. Delisting could also make it more difficult for FNB United to raise additional capital. The accompanying consolidated financial statements for the Company have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future, and does not include any adjustments to reflect the possible future effects on the recoverability or classification of assets. Management's Plans and Intentions The Company incurred significant net losses in 2009, which continued in 2010 and 2011, primarily from the higher provisions for loan losses due to the significant level of nonperforming assets, write-downs and losses on other real estate owned due to declining real estate values, and the write-off of goodwill. The Bank consented and agreed to the issuance of the Order by the OCC in July 2010 and FNB United entered into a written agreement with the FRBR in October 2010. The Company's independent registered public accounting firm issued a report with respect to the Company's audited financial statements for each of the fiscal years ended December 31, 2010 and 2009, which contained an explanatory paragraph indicating that there is substantial doubt about the Company's ability to continue as a going concern. The following strategies have been or are being implemented in addition to the recapitalization transactions described below: Deferring Preferred Stock and Trust Preferred Securities Payments – FNB United began deferring the payment of cash dividends on its outstanding Fixed Rate Cumulative Perpetual Preferred Stock, Series A, beginning in the second quarter 2010, as well as the payment of interest on the outstanding junior subordinated notes related to its trust preferred securities to enhance the Company's liquidity. The dividends on preferred stock are shown as an increase to net loss to derive net loss to common shareholders in the Consolidated Statements of Operations. On October 21, 2011 and in connection with the recapitalization of the Company, FNB United deposited with the various trustees for its trust preferred securities sums sufficient to pay the interest accrued and accruing to December 15, 2011 or December 30, 2011, as applicable, on the junior subordinated notes related to those trust preferred securities. Following that date, FNB United expects again to defer payment of interest on the outstanding junior subordinated notes related to its trust preferred securities. Balance Sheet Reductions – Management is implementing strategies to improve capital ratios through the reduction of assets and off-balance sheet commitments. At September 30, 2011, risk-weighted assets have been reduced by $381.3 million since December 31, 2010. Reductions occurred primarily in reductions in the commercial real estate and real estate construction portfolios. On December 30, 2010, the Company sold $32.9 million of mortgage loans held for investment and recognized a net gain of $383,000, including transaction costs. Management expects future reductions in risk-weighted assets to be moderate and occur primarily in the loan portfolio. To offset the majority of asset reductions, liabilities declined primarily through reductions in deposits by $130.8 million. Future liability reductions are expected to occur primarily in deposits, largely public unit deposits, high-rate NOW accounts and brokered certificates of deposits, and Federal Home Loan Bank ("FHLB") advances. Stimulus Loan Program – The Company implemented in 2009 a stimulus loan program to facilitate the sale of residential real estate held as collateral for some of the Company's nonperforming and performing loans and certain Company-owned properties. The purpose of the program was to reduce the Company's credit concentrations and nonperforming assets by providing attractive terms that both filled the mortgage lending void created by the ongoing recession and incented potential buyers to purchase real estate. The Company offered a reduced interest rate to qualified new borrowers to encourage them to purchase properties in this program. New borrowers qualified according to the Company's normal consumer and mortgage underwriting standards. The Company recorded these loans at fair value at time of issue. Existing unimpaired development loans that become part of the program are considered impaired upon inclusion in the stimulus loan program. The Company currently has $30.5 million in loans under the stimulus loan program, of which $15.2 million required a fair value adjustment of $88,200 as of September 30, 2011. The fair value adjustment is recorded as a reduction of the outstanding loan balance on the balance sheet and accreted into interest income over the contractual life of the loan. The Company discontinued the stimulus loan program and booked the last stimulus loan during the first quarter of 2011. The Company will continue to report stimulus loan information, as indicated above, through the filing of the annual report on Form 10-K for the year ending December 31, 2011.

Going Concern Considerations And Management's Plans And Intentions

9 Months Ended

Sep. 30, 2011

Going Concern Considerations And Managements Plans And Intentions [Abstract]

Going Concern Considerations And Management's Plans And Intentions

4. Going Concern Considerations and Management's Plans and Intentions

Going Concern Considerations

The going concern assumption is a fundamental principle in the preparation of financial statements. It is the responsibility of management to assess the Company's ability to continue as a going concern. In making this assessment, the Company has taken into account all available information about the future, which is at least, but is not limited to, twelve months from the balance sheet date of September 30, 2011. The Company had a history of profitable operations and sufficient sources of liquidity to meet its short-term and long-term funding needs. However, the Company's financial condition has suffered during 2009, 2010 and the first nine months of 2011 in what may ultimately be the worst economic downturn since the Great Depression.

The effects of the current economic environment are being felt across many industries, with financial services and real estate being particularly hard-hit, and have been particularly severe during the last three years. The Company, with a loan portfolio consisting of a concentration in commercial real estate loans, including residential construction and development loans, has seen a decline in the value of the collateral securing its portfolio as well as rapid deterioration in its borrowers' cash flow and ability to repay their outstanding loans to the Company. For the first nine months of 2011 and for the year ended December 31, 2010, the Company recorded provisions of $60.9 million and $132.8 million, respectively, to increase the allowance for loan losses to a level that, in management's best judgment, adequately reflected the increased risk inherent in the loan portfolio as of the quarter-end and year-end periods, respectively.

FNB United and the Bank operate in a highly regulated industry and must plan for the liquidity needs of each entity separately. A variety of sources of liquidity are available to the Bank to meet its short-term and long-term funding needs. Although a number of these sources are limited following execution of the Order with the OCC, management has prepared forecasts of the Bank's sources of funds and projected uses of funds for a three-year period in an effort to ensure that the sources available are sufficient to meet the Bank's projected liquidity needs.

FNB United is a legal entity separate and distinct from the Bank and has in the past relied on dividends from the Bank as its primary source of liquidity. The Order and the Written Agreement, as well as the Prompt Correction Action provisions of federal law, prohibit the Bank from lending or otherwise supplying funds to FNB United to meet its obligations, including paying any dividends.

Not later than 90 days after an institution becomes critically undercapitalized, the institution's primary federal bank regulatory agency must appoint a receiver or a conservator, unless the agency, with the concurrence of the FDIC, determines that the purposes of the prompt corrective action provisions would be better served by another course of action. Any alternative determination must be documented by the agency and reassessed on a periodic basis. Notwithstanding the foregoing, a receiver must be appointed after 270 days unless the FDIC determines that the institution has positive net worth, is in compliance with a capital plan, is profitable or has a sustainable upward trend in earnings, and is reducing its ratio of nonperforming loans to total loans, and unless the head of the appropriate federal banking agency and the chairperson of the FDIC certify that the institution is viable and not expected to fail.

In efforts to raise capital to meet the standards set forth in applicable law and required by the OCC, on April 26, 2011, FNB United entered into investment agreements (the "Investment Agreements") with The Carlyle Group ("Carlyle") and Oak Hill Capital Partners ("Oak Hill Capital") to recapitalize FNB United, as well as a merger agreement (the "Merger Agreement") with Granite. On June 16 and August 4, 2011, FNB United entered into subscription agreements with various accredited investors for the purchase and sale of its common stock. On October 21, 2011, FNB United issued and sold $310 million of its common stock at $0.16 per share pursuant to the Investment Agreements with Carlyle and Oak Hill Capital and the subscription agreements. Details of the Investment Agreements, the subscription agreements and the Merger Agreement can be found in Note 21, Capital Raise, Merger Agreement and Related Matters and Note 22, Subsequent Events.

The perception or possibility that FNB United's common stock could be delisted from the Nasdaq in the future could negatively affect its liquidity and price. Delisting would have an adverse effect on the liquidity of the common shares and, as a result, the market price for the common stock might become more volatile. Delisting could also make it more difficult for FNB United to raise additional capital.

The accompanying consolidated financial statements for the Company have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future, and does not include any adjustments to reflect the possible future effects on the recoverability or classification of assets.

Management's Plans and Intentions

The Company incurred significant net losses in 2009, which continued in 2010 and 2011, primarily from the higher provisions for loan losses due to the significant level of nonperforming assets, write-downs and losses on other real estate owned due to declining real estate values, and the write-off of goodwill. The Bank consented and agreed to the issuance of the Order by the OCC in July 2010 and FNB United entered into a written agreement with the FRBR in October 2010. The Company's independent registered public accounting firm issued a report with respect to the Company's audited financial statements for each of the fiscal years ended December 31, 2010 and 2009, which contained an explanatory paragraph indicating that there is substantial doubt about the Company's ability to continue as a going concern. The following strategies have been or are being implemented in addition to the recapitalization transactions described below:

Deferring Preferred Stock and Trust Preferred Securities Payments – FNB United began deferring the payment of cash dividends on its outstanding Fixed Rate Cumulative Perpetual Preferred Stock, Series A, beginning in the second quarter 2010, as well as the payment of interest on the outstanding junior subordinated notes related to its trust preferred securities to enhance the Company's liquidity. The dividends on preferred stock are shown as an increase to net loss to derive net loss to common shareholders in the Consolidated Statements of Operations.

On October 21, 2011 and in connection with the recapitalization of the Company, FNB United deposited with the various trustees for its trust preferred securities sums sufficient to pay the interest accrued and accruing to December 15, 2011 or December 30, 2011, as applicable, on the junior subordinated notes related to those trust preferred securities. Following that date, FNB United expects again to defer payment of interest on the outstanding junior subordinated notes related to its trust preferred securities.

Balance Sheet Reductions – Management is implementing strategies to improve capital ratios through the reduction of assets and off-balance sheet commitments. At September 30, 2011, risk-weighted assets have been reduced by $381.3 million since December 31, 2010. Reductions occurred primarily in reductions in the commercial real estate and real estate construction portfolios. On December 30, 2010, the Company sold $32.9 million of mortgage loans held for investment and recognized a net gain of $383,000, including transaction costs. Management expects future reductions in risk-weighted assets to be moderate and occur primarily in the loan portfolio. To offset the majority of asset reductions, liabilities declined primarily through reductions in deposits by $130.8 million. Future liability reductions are expected to occur primarily in deposits, largely public unit deposits, high-rate NOW accounts and brokered certificates of deposits, and Federal Home Loan Bank ("FHLB") advances.

Stimulus Loan Program – The Company implemented in 2009 a stimulus loan program to facilitate the sale of residential real estate held as collateral for some of the Company's nonperforming and performing loans and certain Company-owned properties. The purpose of the program was to reduce the Company's credit concentrations and nonperforming assets by providing attractive terms that both filled the mortgage lending void created by the ongoing recession and incented potential buyers to purchase real estate. The Company offered a reduced interest rate to qualified new borrowers to encourage them to purchase properties in this program. New borrowers qualified according to the Company's normal consumer and mortgage underwriting standards. The Company recorded these loans at fair value at time of issue. Existing unimpaired development loans that become part of the program are considered impaired upon inclusion in the stimulus loan program. The Company currently has $30.5 million in loans under the stimulus loan program, of which $15.2 million required a fair value adjustment of $88,200 as of September 30, 2011. The fair value adjustment is recorded as a reduction of the outstanding loan balance on the balance sheet and accreted into interest income over the contractual life of the loan. The Company discontinued the stimulus loan program and booked the last stimulus loan during the first quarter of 2011. The Company will continue to report stimulus loan information, as indicated above, through the filing of the annual report on Form 10-K for the year ending December 31, 2011.