Business Combination

9 Months Ended

Sep. 30, 2011

Business Combination [Abstract]

Business Combination

24. Business Combination

On October 21, 2011, FNB United the Merger. The Merger was part of the Company's recapitalization strategy, a condition to the closing of the Investment Agreements, and was a 100% stock exchange transaction. The shareholders of Granite are entitled to receive 3.375 shares of FNB United common stock for each share of Granite stock that they owned on the closing date of the Merger. The aggregate Merger consideration totals approximately 521,595 shares (adjusted for the Reverse Stock Split).

The Merger will be accounted for as a business combination under the acquisition method of accounting and the Company is the deemed accounting acquirer and Granite is the deemed accounting acquiree. The determination of the value of the equity consideration representing the purchase price is dependent upon certain valuation studies that are not yet final. The allocation of the purchase price is also dependent upon certain valuation and other studies that are not yet final. The final allocation will be determined subsequent to the Merger and is subject to further adjustments as additional information becomes available and as final analyses are performed. Until the valuation work is complete, it is impractical to include disclosures related to the fair value of the assets acquired, such as loans, other real estate, investment securities, fixed assets, and deposits. The valuation analysis is being done by an independent third party accounting firm and will be used by management to determine the required purchase accounting adjustments. The valuation analysis is expected to be completed in the fourth quarter of 2011.