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| 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)                           |

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| Large accelerated filer o |   | Accelerated filer  x |   | Non-accelerated filer o                       |   | Smaller reporting company x |
|---------------------------|--------|--------------------------------|--------|-----------------------------------------------|--------|-----------------------------|
|                      |   |                           |   | (Do not check if a smaller reporting company) |   |                        |

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TABLE 

| PART I. FINANCIAL INFORMATION |    |
|-------------------------------|---------|
|                          | Item 1  | Consolidated Financial Statements (Unaudited) |   |
|                          |    | Consolidated Balance Sheets September 30, 2009 and December 31, 2008 | 2 |
|                          |    | Consolidated Statements of Income (Loss) Three and Nine Months Ended September 30, 2009 and 2008 | 3 |
|                          |    | Consolidated Statements of Shareholders' Equity and Comprehensive Income (Loss) Nine Months Ended September 30, 2009 and 2008 | 4 |
|                          |    | Consolidated Statements of Cash Flows Nine Months Ended September 30, 2009 and 2008 | 5 |
|                          | Item 2  | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 21 |
|                          | Item 3  | Quantitative and Qualitative Disclosures about Market Risk | 33 |
|                          | Item 4  | Controls and Procedures | 34 |
|                          |    |   |   |
| PART II. OTHER INFORMATION    |    |
|                          | Item 1  | Legal Proceedings | 35 |
|                          | Item 1A | Risk Factors | 35 |
|                          | Item 2  | Unregistered Sales of Equity Securities and Use of Proceeds | 35 |
|                          | Item 3  | Defaults Upon Senior Securities | 35 |
|                          | Item 4  | Submission of Matters to a Vote of Security Holders | 35 |
|                          | Item 5  | Other Information | 35 |
|                          | Item 6  | Signatures | 35 |
|                          |    | Exhibits | 36 |

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Table of Contents

Item 

FNB 

| (dollars in thousands, except share and per share data)                                                                     |   | September 30, |      |   | December 31, |   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|---------------|-----------|--------|--------------|--------|
|                                                                                                                        |   | 2009          |      |   | 2008         |   |
| Assets                                                                                                                      |   |          |      |   |         |   |
| Cash and due from banks                                                                                                     |   | $             | 32,160    |   |         | $      | 28,743 |   |
| Interest-bearing bank balances                                                                                              |   |          | 376       |   |         |   | 404 |   |
| Federal funds sold                                                                                                          |   |          | 65,064    |   |         |   | 206 |   |
| Investment securities:                                                                                                      |   |          |      |   |         |   |   |   |
| Available-for-sale, at estimated fair value (amortized cost of $254,466 in 2009 and $206,072 in 2008)                       |   |          | 261,811   |   |         |   | 205,426 |   |
| Held-to-maturity (estimated fair value of $93,266 in 2009 and $27,580 in 2008)                                              |   |          | 92,777    |   |         |   | 27,794 |   |
| Loans held for sale                                                                                                         |   |          | 52,520    |   |         |   | 36,138 |   |
| Loans held for investment                                                                                                   |   |          | 1,576,530 |   |         |   | 1,585,195 |   |
| Less:  Allowance for loan losses                                                                                  |   |          | (42,349   | )      |         |   | (34,720 | ) |
| Net loans held for investment                                                                                               |   |          | 1,534,181 |   |         |   | 1,550,475 |   |
| Premises and equipment, net                                                                                                 |   |          | 48,852    |   |         |   | 50,947 |   |
| Goodwill                                                                                                                    |   |          | -         |   |         |   | 52,395 |   |
| Core deposit premiums                                                                                                       |   |          | 5,166     |   |         |   | 5,762 |   |
| Other assets                                                                                                                |   |          | 100,999   |   |         |   | 86,144 |   |
| Total Assets                                                                                                                |   | $             | 2,193,906 |   |         | $      | 2,044,434 |   |
|                                                                                                                        |   |          |      |   |         |   |   |   |
| Liabilities                                                                                                                 |   |          |      |   |         |   |   |   |
| Deposits:                                                                                                                   |   |          |      |   |         |   |   |   |
| Noninterest-bearing demand deposits                                                                                         |   | $             | 147,751   |   |         | $      | 150,273 |   |
| Interest-bearing deposits:                                                                                                  |   |          |      |   |         |   |   |   |
| Demand, savings and money market deposits                                                                                   |   |          | 577,778   |   |         |   | 479,223 |   |
| Time deposits of $100,000 or more                                                                                           |   |          | 445,545   |   |         |   | 407,539 |   |
| Other time deposits                                                                                                         |   |          | 550,668   |   |         |   | 477,712 |   |
| Total deposits                                                                                                              |   |          | 1,721,742 |   |         |   | 1,514,747 |   |
| Retail repurchase agreements                                                                                                |   |          | 19,467    |   |         |   | 18,145 |   |
| Federal Home Loan Bank advances                                                                                             |   |          | 167,953   |   |         |   | 238,910 |   |
| Federal funds purchased                                                                                                     |   |          | 75,000    |   |         |   | 37,000 |   |
| Subordinated debt                                                                                                           |   |          | 15,000    |   |         |   | 15,000 |   |
| Junior subordinated debentures                                                                                              |   |          | 56,702    |   |         |   | 56,702 |   |
| Other liabilities                                                                                                           |   |          | 9,439     |   |         |   | 16,013 |   |
| Total Liabilities                                                                                                           |   |          | 2,065,303 |   |         |   | 1,896,517 |   |
|                                                                                                                        |   |          |      |   |         |   |   |   |
| Shareholders' Equity                                                                                                        |   |          |      |   |         |   |   |   |
| Preferred stock, $10.00 par value; authorized 200,000 shares, 51,500 shares issued and outstanding at $1,000 stated value   |   |          | 48,033    |   |         |   | - |   |
| Common stock warrant                                                                                                        |   |          | 3,891     |   |         |   | - |   |
| Common stock, $2.50 par value; authorized 50,000,000 shares, issued 11,426,413 shares in 2009 and 11,428,003 shares in 2008 |   |          | 28,566    |   |         |   | 28,570 |   |
| Surplus                                                                                                                     |   |          | 114,983   |   |         |   | 114,772 |   |
| Retained earnings (accumulated deficit)                                                                                     |   |          | (67,385   | )      |         |   | 8,904 |   |
| Accumulated other comprehensive income (loss)                                                                               |   |          | 515       |   |         |   | (4,329 | ) |
| Total Shareholders' Equity                                                                                                  |   |          | 128,603   |   |         |   | 147,917 |   |
| Total Liabilities and Shareholders' Equity                                                                                  |   | $             | 2,193,906 |   |         | $      | 2,044,434 |   |

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Table of Contents

FNB 

| (dollars in thousands, except share and per share data)    |   | Three Months Ended September 30, |       |   | Nine Months Ended September 30, |   |
|------------------------------------------------------------|--------|----------------------------------|------------|--------|---------------------------------|--------|
|                                                       |   | 2009                             |       |   | 2008                            |   |   | 2009 |   |   | 2008 |   |
| Interest Income                                            |   |                             |       |   |                            |   |   |   |   |   |   |   |
| Interest and fees on loans                                 |   | $                                | 21,132     |   |                            | $      | 25,715 |   |   | $ | 63,995 |   |   | $ | 79,781 |   |
| Interest and dividends on investment securities:           |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Taxable income                                             |   |                             | 4,689      |   |                            |   | 1,795 |   |   |   | 11,864 |   |   |   | 5,386 |   |
| Non-taxable income                                         |   |                             | 562        |   |                            |   | 471 |   |   |   | 1,756 |   |   |   | 1,501 |   |
| Other interest income                                      |   |                             | 115        |   |                            |   | 204 |   |   |   | 282 |   |   |   | 723 |   |
| Total interest income                                      |   |                             | 26,498     |   |                            |   | 28,185 |   |   |   | 77,897 |   |   |   | 87,391 |   |
| Interest Expense                                           |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                   |   |                             | 7,969      |   |                            |   | 10,150 |   |   |   | 25,448 |   |   |   | 32,578 |   |
| Retail repurchase agreements                               |   |                             | 30         |   |                            |   | 204 |   |   |   | 97 |   |   |   | 616 |   |
| Federal Home Loan Bank advances                            |   |                             | 1,458      |   |                            |   | 1,927 |   |   |   | 4,534 |   |   |   | 5,440 |   |
| Federal funds purchased                                    |   |                             | 56         |   |                            |   | 114 |   |   |   | 141 |   |   |   | 412 |   |
| Other borrowed funds                                       |   |                             | 568        |   |                            |   | 860 |   |   |   | 1,881 |   |   |   | 2,364 |   |
| Total interest expense                                     |   |                             | 10,081     |   |                            |   | 13,255 |   |   |   | 32,101 |   |   |   | 41,410 |   |
| Net Interest Income before Provision for Loan Losses       |   |                             | 16,417     |   |                            |   | 14,930 |   |   |   | 45,796 |   |   |   | 45,981 |   |
| Provision for loan losses                                  |   |                             | 17,500     |   |                            |   | 9,370 |   |   |   | 37,084 |   |   |   | 12,267 |   |
| Net Interest (Loss)/Income after Provision for Loan Losses |   |                             | (1,083     | )      |                            |   | 5,560 |   |   |   | 8,712 |   |   |   | 33,714 |   |
| Noninterest Income                                         |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Service charges on deposit accounts                        |   |                             | 2,333      |   |                            |   | 2,450 |   |   |   | 6,640 |   |   |   | 6,742 |   |
| Mortgage loan income                                       |   |                             | 4,113      |   |                            |   | 2,111 |   |   |   | 8,651 |   |   |   | 3,910 |   |
| Cardholder and merchant services income                    |   |                             | 650        |   |                            |   | 615 |   |   |   | 1,854 |   |   |   | 1,681 |   |
| Trust and investment services                              |   |                             | 459        |   |                            |   | 458 |   |   |   | 1,241 |   |   |   | 1,389 |   |
| Bank owned life insurance                                  |   |                             | 363        |   |                            |   | 243 |   |   |   | 833 |   |   |   | 728 |   |
| Other service charges, commissions and fees                |   |                             | 301        |   |                            |   | 136 |   |   |   | 882 |   |   |   | 523 |   |
| Securities gains, net                                      |   |                             | 620        |   |                            |   | - |   |   |   | 617 |   |   |   | 6 |   |
| Total other-than-temporary impairment loss                 |   |                             | (3,985     | )      |                            |   | - |   |   |   | (4,985 | ) |   |   | - |   |
| Portion of loss recognized in other comprehensive income   |   |                             | -          |   |                            |   | - |   |   |   | - |   |   |   | - |   |
| Net impairment loss recognized in earnings                 |   |                             | (3,985     | )      |                            |   | - |   |   |   | (4,985 | ) |   |   | - |   |
| Other income                                               |   |                             | 106        |   |                            |   | 421 |   |   |   | 362 |   |   |   | 713 |   |
| Total noninterest income                                   |   |                             | 4,960      |   |                            |   | 6,434 |   |   |   | 16,095 |   |   |   | 15,692 |   |
| Noninterest Expense                                        |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Personnel expense                                          |   |                             | 8,559      |   |                            |   | 8,349 |   |   |   | 24,826 |   |   |   | 26,242 |   |
| Net occupancy expense                                      |   |                             | 1,365      |   |                            |   | 1,354 |   |   |   | 4,173 |   |   |   | 4,012 |   |
| Furniture, equipment, and data processing expense          |   |                             | 1,843      |   |                            |   | 1,616 |   |   |   | 5,325 |   |   |   | 4,948 |   |
| Professional fees                                          |   |                             | 487        |   |                            |   | 727 |   |   |   | 1,720 |   |   |   | 1,446 |   |
| Stationery, printing and supplies                          |   |                             | 137        |   |                            |   | 296 |   |   |   | 536 |   |   |   | 880 |   |
| Advertising and marketing                                  |   |                             | 480        |   |                            |   | 344 |   |   |   | 1,536 |   |   |   | 1,047 |   |
| Goodwill impairment                                        |   |                             | 52,395     |   |                            |   | - |   |   |   | 52,395 |   |   |   | 1,800 |   |
| FDIC insurance                                             |   |                             | 1,577      |   |                            |   | 404 |   |   |   | 3,440 |   |   |   | 724 |   |
| Other expense                                              |   |                             | 4,710      |   |                            |   | 2,185 |   |   |   | 9,566 |   |   |   | 7,192 |   |
| Total noninterest expense                                  |   |                             | 71,553     |   |                            |   | 15,275 |   |   |   | 103,517 |   |   |   | 48,291 |   |
| (Loss)/income before income taxes                          |   |                             | (67,676    | )      |                            |   | (3,281 | ) |   |   | (78,710 | ) |   |   | 1,115 |   |
| Income taxes (benefit)/expense                             |   |                             | (185       | )      |                            |   | (1,570 | ) |   |   | (5,050 | ) |   |   | 363 |   |
| Net (Loss)/Income                                          |   |                             | (67,491    | )      |                            |   | (1,711 | ) |   |   | (73,660 | ) |   |   | 752 |   |
| Preferred stock dividends                                  |   |                             | (813       | )      |                            |   | - |   |   |   | (2,055 | ) |   |   | - |   |
| Net (Loss)/Income to Common Shareholders                   |   | $                                | (68,304    | )      |                            | $      | (1,711 | ) |   | $ | (75,715 | ) |   | $ | 752 |   |
|                                                       |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Net (loss)/income per common share:                        |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                      |   | $                                | (5.98      | )      |                            | $      | (0.15 | ) |   | $ | (6.63 | ) |   | $ | 0.07 |   |
| Diluted                                                    |   | $                                | (5.98      | )      |                            | $      | (0.15 | ) |   | $ | (6.63 | ) |   | $ | 0.07 |   |
|                                                       |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of common shares outstanding:      |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                      |   |                             | 11,420,868 |   |                            |   | 11,404,885 |   |   |   | 11,414,928 |   |   |   | 11,408,037 |   |
| Diluted                                                    |   |                             | 11,420,868 |   |                            |   | 11,404,885 |   |   |   | 11,414,928 |   |   |   | 11,410,830 |   |

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Table of Contents

FNB 

| (in thousands, except share and per share data)                                                                                  |   |            |   |   |         |   |   |   |   |   |       |   |   | Common       |   |   |          |   |   | RetainedEarnings |   |   | AccumulatedOther |   |   |   |    |
|----------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|--------|--------|--------------|--------|--------|--------|--------|--------|------------|--------|--------|--------------|--------|--------|---------------|--------|--------|------------------|--------|--------|------------------|--------|--------|--------|---------|
|                                                                                                                             |   | Preferred Stock |   |   | Common Stock |   |   | Stock  |   |   |       |   |   | (Accumulated |   |   | Comprehensive |   |   |             |   |
|                                                                                                                             |   | Shares          |   |   | Amount       |   |   | Shares |   |   | Amount     |   |   | Warrant      |   |   | Surplus       |   |   | Deficit)         |   |   | (Loss) Income    |   |   | Total  |    |
| Balance, December 31, 2007                                                                                                       |   |            | -      |   |         | $      | -      |   |   |   | 11,426,902 |   |   | $            | 28,567 |   |          | $      | -      |             |   | $      | 114,119          |   |   | $      | 74,199  |   |   | $ | (629 | ) |   | $ | 216,256 |   |
|                                                                                                                             |   |            |   |   |         |   |   |   |   |   |       |   |   |         |   |   |          |   |   |             |   |   |             |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Cumulative effect of a change in accounting principle - adoption of EITF 06-4                                                    |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | (344    | ) |   |   | - |   |   |   | (344 | ) |
| Comprehensive income:                                                                                                            |   |            |   |   |         |   |   |   |   |   |       |   |   |         |   |   |          |   |   |             |   |   |             |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Net income                                                                                                                       |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | 752     |   |   |   | - |   |   |   | 752 |   |
| Other comprehensive income, net of taxes:                                                                                        |   |            |   |   |         |   |   |   |   |   |       |   |   |         |   |   |          |   |   |             |   |   |             |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Unrealized holding gains (losses) arising during the period on securities available-for-sale,net of tax                          |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | -       |   |   |   | (1,945 | ) |   |   | (1,945 | ) |
| Reclassification adjustment for losses (gains) on securities available-for-sale included in net income, net of tax               |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | -       |   |   |   | - |   |   |   | - |   |
| Change in unrealized gains (losses) on securities,net of tax                                                                     |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | -       |   |   |   | (1,945 | ) |   |   | (1,945 | ) |
| Interest rate swap, net of tax                                                                                                   |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | -       |   |   |   | 192 |   |   |   | 192 |   |
| Pension and post-retirement liability, net of tax                                                                                |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | -       |   |   |   | 42 |   |   |   | 42 |   |
| Total comprehensive income                                                                                                       |   |            |   |   |         |   |   |   |   |   |       |   |   |         |   |   |          |   |   |             |   |   |             |   |   |   |    |   |   |   |   |   |   |   | (959 | ) |
| Cash dividends declared on common stock, $.35 per share                                                                          |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | (3,998  | ) |   |   | - |   |   |   | (3,998 | ) |
| Merger acquisition of subsidiary companies:                                                                                      |   |            |   |   |         |   |   |   |   |   |       |   |   |         |   |   |          |   |   |             |   |   |             |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Common stock issued                                                                                                              |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | -       |   |   |   | - |   |   |   | - |   |
| Fair value of stock options assumed                                                                                              |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | -       |   |   |   | - |   |   |   | - |   |
| Stock options:                                                                                                                   |   |            |   |   |         |   |   |   |   |   |       |   |   |         |   |   |          |   |   |             |   |   |             |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Proceeds from options exercised                                                                                                  |   |            | -      |   |         |   | -      |   |   |   | 150        |   |   |         | 1      |   |          |   | -      |             |   |   | 1                |   |   |   | -       |   |   |   | - |   |   |   | 2 |   |
| Compensation expense recognized                                                                                                  |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | 328              |   |   |   | -       |   |   |   | - |   |   |   | 328 |   |
| Net tax benefit related to option exercises                                                                                      |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | -       |   |   |   | - |   |   |   | - |   |
| Restricted stock:                                                                                                                |   |            |   |   |         |   |   |   |   |   |       |   |   |         |   |   |          |   |   |             |   |   |             |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Shares issued/terminated, subject to restriction                                                                                 |   |            | -      |   |         |   | -      |   |   |   | (5,049     | )      |   |         | (13    | )      |          |   | -      |             |   |   | (60              | )      |   |   | -       |   |   |   | - |   |   |   | (73 | ) |
| Compensation expense recognized                                                                                                  |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | 205              |   |   |   | -       |   |   |   | - |   |   |   | 205 |   |
| Other compensatory stock issued                                                                                                  |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   |   |             |   |   | -                |   |   |   | -       |   |   |   | - |   |   |   | - |   |
| Adjustment to initially apply SFAS No. 158                                                                                       |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   |   |             |   |   | -                |   |   |   | -       |   |   |   | - |   |   |   | - |   |
| Balance, September 30, 2008                                                                                                      |   |            | -      |   |         | $      | -      |   |   |   | 11,422,003 |   |   | $            | 28,555 |   |          | $      | -      |             |   | $      | 114,593          |   |   | $      | 70,609  |   |   | $ | (2,340 | ) |   | $ | 211,417 |   |
|                                                                                                                             |   |            |   |   |         |   |   |   |   |   |       |   |   |         |   |   |          |   |   |             |   |   |             |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2008                                                                                                       |   |            | -      |   |         | $      | -      |   |   |   | 11,428,003 |   |   | $            | 28,570 |   |          | $      | -      |             |   | $      | 114,772          |   |   | $      | 8,904   |   |   | $ | (4,329 | ) |   | $ | 147,917 |   |
| Cumulative effect of a change in accounting principle - adoption of EITF 06-4                                                    |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | -       |   |   |   | - |   |   |   | - |   |
| Comprehensive income (loss):                                                                                                     |   |            |   |   |         |   |   |   |   |   |       |   |   |         |   |   |          |   |   |             |   |   |             |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                                                         |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | (73,660 | ) |   |   | - |   |   |   | (73,660 | ) |
| Other comprehensive income, net of taxes:                                                                                        |   |            |   |   |         |   |   |   |   |   |       |   |   |         |   |   |          |   |   |             |   |   |             |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Unrealized holding gain (losses) arising during the period on securities available-for-sale,                                     |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | -       |   |   |   | 2,069 |   |   |   | 2,069 |   |
| Reclassification adjustment for (gains)on securities available-for-sale included in net income                                   |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | -       |   |   |   | (244 | ) |   |   | (244 | ) |
| Unrealized gain (losses) on securities for which credit-related portion was recognized in net realized investment gains (losses) |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | -       |   |   |   | 3,016 |   |   |   | 3,016 |   |
| Change in unrealized (losses) on securities,net of tax                                                                           |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | -       |   |   |   | 4,841 |   |   |   | 4,841 |   |
| Interest rate swap, net of tax                                                                                                   |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | -       |   |   |   | 3 |   |   |   | 3 |   |
| Pension and post-retirement liability, net of tax                                                                                |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | -       |   |   |   | - |   |   |   | - |   |
| Total comprehensive loss                                                                                                         |   |            |   |   |         |   |   |   |   |   |       |   |   |         |   |   |          |   |   |             |   |   |             |   |   |   |    |   |   |   |   |   |   |   | (68,816 | ) |
| Issuance of preferred stock                                                                                                      |   |            | 51,500 |   |         |   | 47,609 |   |   |   | -          |   |   |         | -      |   |          |   | 3,891  |             |   |   | -                |   |   |   | -       |   |   |   | - |   |   |   | 51,500 |   |
| Accretion of discount on preferred stock                                                                                         |   |            | -      |   |         |   | 424    |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | (424    | ) |   |   | - |   |   |   | - |   |
| Cash dividends declared on common stock, $0.05 per share                                                                         |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | (574    | ) |   |   | - |   |   |   | (574 | ) |
| Cash dividends declared on Series A preferred stock, $12.50 per share                                                            |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | (1,631  | ) |   |   | - |   |   |   | (1,631 | ) |
| Stock options:                                                                                                                   |   |            |   |   |         |   |   |   |   |   |       |   |   |         |   |   |          |   |   |             |   |   |             |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Proceeds from options exercised                                                                                                  |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | -                |   |   |   | -       |   |   |   | - |   |   |   | - |   |
| Compensation expense recognized                                                                                                  |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | 168              |   |   |   | -       |   |   |   | - |   |   |   | 168 |   |
| Restricted stock:                                                                                                                |   |            |   |   |         |   |   |   |   |   |       |   |   |         |   |   |          |   |   |             |   |   |             |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Shares issued, subject to restriction                                                                                            |   |            | -      |   |         |   | -      |   |   |   | (1,590     | )      |   |         | (4     | )      |          |   | -      |             |   |   | (139             | )      |   |   | -       |   |   |   | - |   |   |   | (143 | ) |
| Compensation expense recognized                                                                                                  |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |         | -      |   |          |   | -      |             |   |   | 182              |   |   |   | -       |   |   |   | - |   |   |   | 182 |   |
| Balance, September 30, 2009                                                                                                      |   |            | 51,500 |   |         | $      | 48,033 |   |   |   | 11,426,413 |   |   | $            | 28,566 |   |          | $      | 3,891  |             |   | $      | 114,983          |   |   | $      | (67,385 | ) |   | $ | 515 |   |   | $ | 128,603 |   |

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FNB 

| (dollars in thousands)                                                                          |   | Nine Months Ended September 30, |     |
|-------------------------------------------------------------------------------------------------|--------|---------------------------------|----------|
|                                                                                            |   | 2009                            |     |   | 2008 |   |
| Operating Activities                                                                            |   |                            |     |   |   |   |
| Net (loss)/income                                                                               |   | $                               | (73,660  | ) |   | $ | 752 |   |
| Adjustments to reconcile net income/(loss) to cash (used in) provided by operatings activities: |   |                            |     |   |   |
| Depreciation and amortization of premises and equipment                                         |   |                            | 2,706    |   |   |   | 2,571 |   |
| Provision for loan losses                                                                       |   |                            | 37,084   |   |   |   | 12,267 |   |
| Deferred income taxes                                                                           |   |                            | (288     | ) |   |   | 486 |   |
| Deferred loan fees and costs, net                                                               |   |                            | (1,171   | ) |   |   | 131 |   |
| Premium amortization and discount accretion of investment securities, net                       |   |                            | (1,360   | ) |   |   | (172 | ) |
| (Gain) on sale of investment securities                                                         |   |                            | (617     | ) |   |   | (6 | ) |
| Other-than-temporary impairment charge                                                          |   |                            | 4,985    |   |   |   | - |   |
| Amortization of core deposit premiums                                                           |   |                            | 596      |   |   |   | 603 |   |
| Stock compensation expense                                                                      |   |                            | 350      |   |   |   | 533 |   |
| Income from bank owned life insurance                                                           |   |                            | (833     | ) |   |   | (728 | ) |
| Mortgage loans held for sale:                                                                   |   |                            |     |   |   |   |   |   |
| Origination of mortgage loans held for sale                                                     |   |                            | (600,482 | ) |   |   | (237,627 | ) |
| Proceeds from sale of mortgage loans held for sale                                              |   |                            | 592,612  |   |   |   | 238,383 |   |
| Gain on mortgage loan sales                                                                     |   |                            | (8,651   | ) |   |   | (3,910 | ) |
| Mortgage servicing rights capitalized                                                           |   |                            | (1,396   | ) |   |   | (958 | ) |
| Mortgage servicing rights amortization and impairment                                           |   |                            | 465      |   |   |   | 289 |   |
| Goodwill impairment                                                                             |   |                            | 52,395   |   |   |   | 1,800 |   |
| Changes in assets and liabilities:                                                              |   |                            |     |   |   |   |   |   |
| (Increase)/decrease in interest receivable                                                      |   |                            | (1,145   | ) |   |   | 1,261 |   |
| Decrease in other assets                                                                        |   |                            | 8,076    |   |   |   | 23 |   |
| (Decrease)/increase in accrued interest and other liabilities                                   |   |                            | (10,249  | ) |   |   | 125 |   |
| Net cash (used in) provided by operating activities                                             |   |                            | (583     | ) |   |   | 15,823 |   |
| Investing Activities                                                                            |   |                            |     |   |   |   |   |   |
| Available-for-sale securities:                                                                  |   |                            |     |   |   |   |   |   |
| Proceeds from sales                                                                             |   |                            | 26,354   |   |   |   | - |   |
| Proceeds from maturities and calls                                                              |   |                            | 60,405   |   |   |   | 82,978 |   |
| Purchases                                                                                       |   |                            | (140,046 | ) |   |   | (122,218 | ) |
| Held-to-maturity securities:                                                                    |   |                            |     |   |   |   |   |   |
| Proceeds from maturities and calls                                                              |   |                            | 17,285   |   |   |   | 12,268 |   |
| Purchases                                                                                       |   |                            | (80,373  | ) |   |   | - |   |
| Net increase in loans held for investment                                                       |   |                            | (38,501  | ) |   |   | (151,045 | ) |
| Purchases of premises and equipment                                                             |   |                            | (781     | ) |   |   | (7,273 | ) |
| Purchases of SBIC investments                                                                   |   |                            | (100     | ) |   |   | (75 | ) |
| Net cash used in investing activities                                                           |   |                            | (155,757 | ) |   |   | (185,365 | ) |
| Financing Activities                                                                            |   |                            |     |   |   |   |   |   |
| Net increase in deposits                                                                        |   |                            | 206,995  |   |   |   | 78,640 |   |
| Increase/(decrease) in retail repurchase agreements                                             |   |                            | 1,322    |   |   |   | (3,581 | ) |
| (Decrease)/increase in Federal Home Loan Bank advances                                          |   |                            | (71,025  | ) |   |   | 80,478 |   |
| Increase/(decrease) in federal funds purchased                                                  |   |                            | 38,000   |   |   |   | (4,500 | ) |
| Increase in other borrowings                                                                    |   |                            | -        |   |   |   | 20,000 |   |
| Proceeds from exercise of stock options                                                         |   |                            | -        |   |   |   | 2 |   |
| Proceeds from issuance of Series A preferred stock and common stock warrant                     |   |                            | 51,500   |   |   |   | - |   |
| Cash dividends paid on common stock                                                             |   |                            | (574     | ) |   |   | (4,570 | ) |
| Cash dividends paid on Series A preferred stock                                                 |   |                            | (1,631   | ) |   |   | - |   |
| Net cash provided by financing activities                                                       |   |                            | 224,587  |   |   |   | 166,469 |   |
| Net Increase/(Decrease) in Cash and Cash Equivalents                                            |   |                            | 68,247   |   |   |   | (3,073 | ) |
| Cash and Cash Equivalents at Beginning of Period                                                |   |                            | 29,353   |   |   |   | 39,117 |   |
| Cash and Cash Equivalents at End of Period                                                      |   | $                               | 97,600   |   |   | $ | 36,044 |   |
|                                                                                            |   |                            |     |   |   |   |   |   |
| Supplemental disclosure of cash flow information                                                |   |                            |     |   |   |   |   |   |
| Cash paid during the period for:                                                                |   |                            |     |   |   |   |   |   |
| Interest                                                                                        |   | $                               | 33,140   |   |   | $ | 41,855 |   |
| Income taxes, net of refunds                                                                    |   |                            | 195      |   |   |   | 1,374 |   |
| Noncash transactions:                                                                           |   |                            |     |   |   |   |   |   |
| Foreclosed loans transferred to other real estate                                               |   |                            | 20,251   |   |   |   | 6,400 |   |
| Unrealized securities gains/(losses), net of income taxes (benefit)/expense                     |   |                            | 4,841    |   |   |   | (1,945 | ) |
| Application of SFAS No. 158 to employee benefit plan costs, net of income taxes                 |   |                            | -        |   |   |   | 42 |   |
| Interest rate swap                                                                              |   |                            | 3        |   |   |   | 192 |   |
| Adoption of EITF Issue 06-4                                                                     |   |                            | -        |   |   |   | (344 | ) |

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| (dollars in thousands)                                                    |   | September 30, 2009 |   |   | December 31, 2008 |   |
|---------------------------------------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                                                                      |   | Pretax             |   |   | After-tax         |   |   | Pretax |   |   | After-tax |   |
| Net unrealized securities gains/(losses)                                  |   | $                  | 7,329  |   |              | $      | 4,471 |   |   | $ | (608 | ) |   | $ | (371 | ) |
| Other-than-temporary impairment losses on debt securities                 |   |               | -      |   |              |   | - |   |   |   | - |   |   |   | - |   |
| Net unrealized gains on cash flow derivatives                             |   |               | (489   | )      |              |   | (298 | ) |   |   | (491 | ) |   |   | (300 | ) |
| Pension, other postretirement and postemployment benefit plan adjustments |   |               | (5,996 | )      |              |   | (3,658 | ) |   |   | (5,996 | ) |   |   | (3,658 | ) |
| Accumulated other comprehensive income                                    |   | $                  | 844    |   |              | $      | 515 |   |   | $ | (7,095 | ) |   | $ | (4,329 | ) |

| (dollars in thousands, except per share data)          |   | Three Months Ended September 30, |       |   | Nine Months Ended September 30, |   |
|--------------------------------------------------------|--------|----------------------------------|------------|--------|---------------------------------|--------|
|                                                   |   | 2009                             |       |   | 2008                            |   |   | 2009 |   |   | 2008 |   |
| Net (loss) income to common shareholders               |   | $                                | (68,304    | )      |                            | $      | (1,711 | ) |   | $ | (75,715 | ) |   | $ | 752 |   |
| Denominator:                                           |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding             |   |                             | 11,420,868 |   |                            |   | 11,404,885 |   |   |   | 11,414,928 |   |   |   | 11,408,037 |   |
| Equivalent shares from potential common stock issuance |   |                             | -          |   |                            |   | - |   |   |   | - |   |   |   | 2,793 |   |
| Diluted weighted average common shares outstanding     |   |                             | 11,420,868 |   |                            |   | 11,404,885 |   |   |   | 11,414,928 |   |   |   | 11,410,830 |   |
|                                                   |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Net (loss) income per share:                           |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                  |   | $                                | (5.98      | )      |                            | $      | (0.15 | ) |   | $ | (6.63 | ) |   | $ | 0.07 |   |
| Diluted                                                |   | $                                | (5.98      | )      |                            | $      | (0.15 | ) |   | $ | (6.63 | ) |   | $ | 0.07 |   |

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| (dollars in thousands)                    |   | Amortized Cost |    |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   | Estimated Fair Value |   |
|-------------------------------------------|--------|----------------|---------|--------|------------------------|--------|--------|-------------------------|--------|--------|----------------------|--------|
| Available for Sale                        |   |           |    |   |                   |   |   |                    |   |   |                 |   |
| September 30, 2009                        |   |           |    |   |                   |   |   |                    |   |   |                 |   |
| U.S. Government agencies and corporations |   | $              | 87,567  |   |                   | $      | 2,051  |                    |   | $      | 54                   |   |   | $ | 89,564 |   |
| Mortgage-backed securities                |   |           | 101,595 |   |                   |   | 2,504  |                    |   |   | 18                   |   |   |   | 104,082 |   |
| State, county and municipal               |   |           | 48,716  |   |                   |   | 2,905  |                    |   |   | 35                   |   |   |   | 51,586 |   |
| Other debt securities                     |   |           | 13,921  |   |                   |   | 447    |                    |   |   | -                    |   |   |   | 14,367 |   |
| Equity securities                         |   |           | 2,667   |   |                   |   | -      |                    |   |   | 455                  |   |   |   | 2,212 |   |
| Total                                     |   | $              | 254,466 |   |                   | $      | 7,907  |                    |   | $      | 562                  |   |   | $ | 261,811 |   |
| December 31, 2008                         |   |           |    |   |                   |   |   |                    |   |   |                 |   |   |   |   |   |
| U.S. Government agencies and corporations |   | $              | 92,076  |   |                   | $      | 2,616  |                    |   | $      | 229                  |   |   | $ | 94,463 |   |
| Mortgage-backed securities                |   |           | 66,583  |   |                   |   | 1,546  |                    |   |   | 11                   |   |   |   | 68,118 |   |
| State, county and municipal               |   |           | 38,336  |   |                   |   | 921    |                    |   |   | 343                  |   |   |   | 38,914 |   |
| Other debt securities                     |   |           | 6,410   |   |                   |   | 2      |                    |   |   | 4,310                |   |   |   | 2,102 |   |
| Equity securities                         |   |           | 2,667   |   |                   |   | -      |                    |   |   | 838                  |   |   |   | 1,829 |   |
| Total                                     |   | $              | 206,072 |   |                   | $      | 5,085  |                    |   | $      | 5,731                |   |   | $ | 205,426 |   |
| Held to Maturity                          |   |           |    |   |                   |   |   |                    |   |   |                 |   |   |   |   |   |
| September 30, 2009                        |   |           |    |   |                   |   |   |                    |   |   |                 |   |   |   |   |   |
| U.S. Government agencies and corporations |   | $              | -       |   |                   | $      | -      |                    |   | $      | -                    |   |   | $ | - |   |
| Mortgage-backed securities                |   |           | 77,860  |   |                   |   | 1,566  |                    |   |   | 1,443                |   |   |   | 77,983 |   |
| State, county and municipal               |   |           | 13,917  |   |                   |   | 553    |                    |   |   | -                    |   |   |   | 14,470 |   |
| Other debt securities                     |   |           | 1,000   |   |                   |   | -      |                    |   |   | 187                  |   |   |   | 813 |   |
| Total                                     |   | $              | 92,777  |   |                   | $      | 2,119  |                    |   | $      | 1,630                |   |   | $ | 93,266 |   |
| December 31, 2008                         |   |           |    |   |                   |   |   |                    |   |   |                 |   |   |   |   |   |
| U.S. Government agencies and corporations |   | $              | 2,008   |   |                   | $      | 39     |                    |   | $      | -                    |   |   | $ | 2,047 |   |
| Mortgage-backed securities                |   |           | 8,420   |   |                   |   | 117    |                    |   |   | 1                    |   |   |   | 8,536 |   |
| State, county and municipal               |   |           | 16,366  |   |                   |   | 171    |                    |   |   | 252                  |   |   |   | 16,285 |   |
| Other debt securities                     |   |           | 1,000   |   |                   |   | -      |                    |   |   | 288                  |   |   |   | 712 |   |
| Total                                     |   | $              | 27,794  |   |                   | $      | 327    |                    |   | $      | 541                  |   |   | $ | 27,580 |   |

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| (dollars in thousands)                               |   | Less than 12 Months  |   |   | 12 Months or More                 |   |   | Total                |   |
|------------------------------------------------------|--------|----------------------|--------|--------|-----------------------------------|--------|--------|----------------------|--------|
|                                                 |   | Estimated Fair Value |   |   | Gross Unrealized Losses |   |   | Estimated Fair Value |   |   | Gross Unrealized Losses |   |   | Estimated Fair Value |   |   | Gross Unrealized Losses |   |
| September 30, 2009                                   |   |                 |   |   |                              |   |   |                 |   |   |   |   |   |   |   |   |   |   |
| Available-for-Sale - Temporary Impairment            |   |                 |   |   |                              |   |   |                 |   |   |   |   |   |   |   |   |
| U.S. Government agencies and corporations            |   | $                    | 11,578 |   |                              | $      | 54     |                 |   | $ | - |   |   | $ | - |   |   | $ | 11,578 |   |   | $ | 54 |   |
| Mortgage-backed securities                           |   |                 | 1,137  |   |                              |   | 18     |                 |   |   | - |   |   |   | - |   |   |   | 1,137 |   |   |   | 18 |   |
| State, county and municipal                          |   |                 | -      |   |                              |   | -      |                 |   |   | 832 |   |   |   | 35 |   |   |   | 832 |   |   |   | 35 |   |
| Other debt securities                                |   |                 | -      |   |                              |   | -      |                 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Equity securities                                    |   |                 | -      |   |                              |   | -      |                 |   |   | 2,667 |   |   |   | 454 |   |   |   | 2,667 |   |   |   | 454 |   |
| Total                                                |   | $                    | 12,715 |   |                              | $      | 72     |                 |   | $ | 3,499 |   |   | $ | 489 |   |   | $ | 16,214 |   |   | $ | 561 |   |
| Available-for-Sale - Other Than Temporary Impairment |   |                 |   |   |                              |   |   |                 |   |   |   |   |   |   |   |   |   |
| Other debt securities                                |   | $                    | -      |   |                              | $      | -      |                 |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Total                                                |   | $                    | -      |   |                              | $      | -      |                 |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Held-to-Maturity - Temporary Impairment              |   |                 |   |   |                              |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government agencies and corporations            |   | $                    | -      |   |                              | $      | -      |                 |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Mortgage-backed securities                           |   |                 | 27,885 |   |                              |   | 1,443  |                 |   |   | - |   |   |   | - |   |   |   | 27,885 |   |   |   | 1,443 |   |
| State, county and municipal                          |   |                 | -      |   |                              |   | -      |                 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Other debt securities                                |   |                 | -      |   |                              |   | -      |                 |   |   | 813 |   |   |   | 187 |   |   |   | 813 |   |   |   | 187 |   |
| Total                                                |   | $                    | 27,885 |   |                              | $      | 1,443  |                 |   | $ | 813 |   |   | $ | 187 |   |   | $ | 28,698 |   |   | $ | 1,630 |   |
| December 31, 2008                                    |   |                 |   |   |                              |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Available-for-Sale - Temporary Impairment            |   |                 |   |   |                              |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government agencies and corporations            |   | $                    | 19,941 |   |                              | $      | 221    |                 |   | $ | 1,289 |   |   | $ | 8 |   |   | $ | 21,230 |   |   | $ | 229 |   |
| Mortgage-backed securities                           |   |                 | 4,475  |   |                              |   | 11     |                 |   |   | - |   |   |   | - |   |   |   | 4,475 |   |   |   | 11 |   |
| State, county and municipal                          |   |                 | 6,348  |   |                              |   | 343    |                 |   |   | - |   |   |   | - |   |   |   | 6,348 |   |   |   | 343 |   |
| Other debt securities                                |   |                 | -      |   |                              |   | -      |                 |   |   | 644 |   |   |   | 4,310 |   |   |   | 644 |   |   |   | 4,310 |   |
| Equity securities                                    |   |                 | 52     |   |                              |   | 11     |                 |   |   | 2,615 |   |   |   | 827 |   |   |   | 2,667 |   |   |   | 838 |   |
| Total                                                |   | $                    | 30,816 |   |                              | $      | 586    |                 |   | $ | 4,548 |   |   | $ | 5,145 |   |   | $ | 35,364 |   |   | $ | 5,731 |   |
| Held-to-Maturity - Temporary Impairment              |   |                 |   |   |                              |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government agencies and corporations            |   | $                    | -      |   |                              | $      | -      |                 |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Mortgage-backed securities                           |   |                 | 4,488  |   |                              |   | 1      |                 |   |   | 227 |   |   |   | 1 |   |   |   | 4,715 |   |   |   | 2 |   |
| State, county and municipal                          |   |                 | 1,916  |   |                              |   | 56     |                 |   |   | 4,126 |   |   |   | 195 |   |   |   | 6,042 |   |   |   | 251 |   |
| Other debt securities                                |   |                 | -      |   |                              |   | -      |                 |   |   | 712 |   |   |   | 288 |   |   |   | 712 |   |   |   | 288 |   |
| Total                                                |   | $                    | 6,404  |   |                              | $      | 57     |                 |   | $ | 5,065 |   |   | $ | 484 |   |   | $ | 11,469 |   |   | $ | 541 |   |

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| (dollars in thousands)                    |   | Available-for-Sale |    |   | Held-to-Maturity     |   |
|-------------------------------------------|--------|--------------------|---------|--------|----------------------|--------|
|                                      |   | Amortized Cost     |    |   | Estimated Fair Value |   |   | Amortized Cost |   |   | Estimated Fair Value |   |
| Due in one year or less                   |   | $                  | 22,840  |   |                 | $      | 23,071 |   |   | $ | 1,556 |   |   | $ | 1,573 |   |
| Due after one one year through five years |   |               | 49,516  |   |                 |   | 51,364 |   |   |   | 5,678 |   |   |   | 5,674 |   |
| Due after five years through 10 years     |   |               | 60,123  |   |                 |   | 61,682 |   |   |   | 5,906 |   |   |   | 6,188 |   |
| Due after 10 years                        |   |               | 17,725  |   |                 |   | 19,400 |   |   |   | 1,777 |   |   |   | 1,848 |   |
| Total                                     |   |               | 150,204 |   |                 |   | 155,517 |   |   |   | 14,917 |   |   |   | 15,283 |   |
| Mortgage-backed securities                |   |               | 101,595 |   |                 |   | 104,082 |   |   |   | 77,860 |   |   |   | 77,983 |   |
| Equity securities                         |   |               | 2,667   |   |                 |   | 2,212 |   |   |   | - |   |   |   | - |   |
| Total                                     |   | $                  | 254,466 |   |                 | $      | 261,811 |   |   | $ | 92,777 |   |   | $ | 93,266 |   |

| (dollars in thousands)                                                                           |   | September 30, 2009 |   |
|--------------------------------------------------------------------------------------------------|--------|--------------------|--------|
|                                                                                             |   |               |   |
| Balance of credit losses on debt securities at the beginning of the current period               |   | $                  | 1,000  |   |
| Additional increase related to the credit loss for which an other-than-impairment was recognized |   |               | 3,985  |   |
| Balance of credit losses on debt securities at the end of the current period                     |   | $                  | 4,985  |   |

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| (dollars in thousands)      |   | At September 30, 2009 |      |   | At December 31, 2008 |   |
|-----------------------------|--------|-----------------------|-----------|--------|----------------------|--------|
| Loans held for sale         |   | $                     | 52,520    |   |                 |   |   |   | $ | 36,138 |   |   |   |   |
|                        |   |                  |      |   |                 |   |   |   |   |   |   |   |   |   |
| Loans held for investment:  |   |                  |      |   |                 |   |   |   |   |   |   |   |   |   |
| Commercial and agricultural |   | $                     | 192,587   |   |                 |   | 12.2 | % |   | $ | 184,909 |   |   |   | 11.7 | % |
| Real estate-construction    |   |                  | 417,880   |   |                 |   | 26.5 |   |   |   | 453,668 |   |   |   | 28.6 |   |
| Real estate-mortgage:       |   |                  |      |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   |                  | 393,362   |   |                 |   | 25.0 |   |   |   | 369,948 |   |   |   | 23.3 |   |
| Commercial                  |   |                  | 528,803   |   |                 |   | 33.5 |   |   |   | 540,192 |   |   |   | 34.1 |   |
| Consumer                    |   |                  | 43,898    |   |                 |   | 2.8 |   |   |   | 36,478 |   |   |   | 2.3 |   |
| Total                       |   | $                     | 1,576,530 |   |                 |   | 100.0 | % |   | $ | 1,585,195 |   |   |   | 100.0 | % |

| (dollars in thousands)                               |   | September 30, 2009 |    |   | December 31, 2008 |   |
|------------------------------------------------------|--------|--------------------|---------|--------|-------------------|--------|
| Loans on nonaccrual status                           |   | $                  | 146,227 |   |              | $      | 95,173 |   |
| Loans more than 90 days delinquent, still on accrual |   |               | 7,670   |   |              |   | 853 |   |
| Real estate owned  / Repossessed assets    |   |               | 24,634  |   |              |   | 6,898 |   |
| Total                                                |   | $                  | 178,531 |   |              | $      | 102,924 |   |

| (dollars in thousands)                                                    |   | Three Months Ended September 30, |    |   | Nine Months Ended September 30, |   |
|---------------------------------------------------------------------------|--------|----------------------------------|---------|--------|---------------------------------|--------|
|                                                                      |   | 2009                             |    |   | 2008                            |   |   | 2009 |   |   | 2008 |   |
| Balance, beginning of period                                              |   | $                                | 36,844  |   |                            | $      | 18,845 |   |   | $ | 34,720 |   |   | $ | 17,381 |   |
| Provision charged to operations                                           |   |                             | 17,500  |   |                            |   | 9,370 |   |   |   | 37,084 |   |   |   | 12,267 |   |
| Net charge-offs:                                                          |   |                             |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Charge-offs                                                               |   |                             | (12,988 | )      |                            |   | (2,031 | ) |   |   | (31,426 | ) |   |   | (4,183 | ) |
| Recoveries                                                                |   |                             | 993     |   |                            |   | 566 |   |   |   | 1,971 |   |   |   | 1,285 |   |
| Net charge-offs                                                           |   |                             | (11,995 | )      |                            |   | (1,465 | ) |   |   | (29,455 | ) |   |   | (2,898 | ) |
| Balance, end of period                                                    |   | $                                | 42,349  |   |                            | $      | 26,750 |   |   | $ | 42,349 |   |   | $ | 26,750 |   |
|                                                                      |   |                             |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Annualized net charge-offs during the period to average loans             |   |                             | 2.99    | %      |                            |   | 0.37 | % |   |   | 2.48 | % |   |   | 0.25 | % |
| Annualized net charge-offs during the period to allowance for loan losses |   |                             | 112.37  | %      |                            |   | 21.91 | % |   |   | 92.99 | % |   |   | 14.44 | % |
| Allowance for loan losses to loans held for investment                    |   |                             | 2.69    | %      |                            |   | 1.68 | % |   |   | 2.69 | % |   |   | 1.68 | % |

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| (dollars in thousands)                     |   | Three Months Ended |   |   | Nine Months Ended |   |
|--------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                                       |   | September 30,      |   |   | September 30,     |   |
|                                       |   | 2009               |   |   | 2008              |   |   | 2009 |   |   | 2008 |   |
| Pension Plan                               |   |               |   |   |              |   |   |   |   |   |   |   |
| Service cost                               |   | $                  | 50     |   |              | $      | 66 |   |   | $ | 153 |   |   | $ | 198 |   |
| Interest cost                              |   |               | 183    |   |              |   | 165 |   |   |   | 508 |   |   |   | 495 |   |
| Expected return on plan assets             |   |               | (138   | )      |              |   | (235 | ) |   |   | (412 | ) |   |   | (705 | ) |
| Amortization of prior service cost         |   |               | 1      |   |              |   | 1 |   |   |   | 3 |   |   |   | 3 |   |
| Amortization of net actuarial loss         |   |               | 77     |   |              |   | 2 |   |   |   | 237 |   |   |   | 6 |   |
| Net periodic pension cost (income)         |   | $                  | 173    |   |              | $      | (1 | ) |   | $ | 489 |   |   | $ | (3 | ) |
| Supplemental Executive Retirement Plan     |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Service cost                               |   | $                  | 68     |   |              | $      | 34 |   |   | $ | 166 |   |   | $ | 102 |   |
| Interest cost                              |   |               | 33     |   |              |   | 36 |   |   |   | 108 |   |   |   | 108 |   |
| Expected return on plan assets             |   |               | -      |   |              |   | - |   |   |   | - |   |   |   | - |   |
| Amortization of prior service cost         |   |               | 12     |   |              |   | 17 |   |   |   | 36 |   |   |   | 51 |   |
| Amortization of net actuarial (gain) loss  |   |               | (2     | )      |              |   | 2 |   |   |   | (4 | ) |   |   | 6 |   |
| Net periodic SERP cost                     |   | $                  | 111    |   |              | $      | 89 |   |   | $ | 306 |   |   | $ | 267 |   |
| Other Postretirement Defined Benefit Plans |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Service cost                               |   | $                  | 6      |   |              | $      | 4 |   |   | $ | 16 |   |   | $ | 12 |   |
| Interest cost                              |   |               | 23     |   |              |   | 18 |   |   |   | 70 |   |   |   | 54 |   |
| Expected return on plan assets             |   |               | -      |   |              |   | - |   |   |   | - |   |   |   | - |   |
| Amortization of prior service (credit)     |   |               | (1     | )      |              |   | (1 | ) |   |   | (3 | ) |   |   | (3 | ) |
| Amortization of net actuarial loss         |   |               | 7      |   |              |   | - |   |   |   | 17 |   |   |   | - |   |
| Net periodic postretirement benefit cost   |   | $                  | 35     |   |              | $      | 21 |   |   | $ | 100 |   |   | $ | 63 |   |

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|                                               |   | As of September 30, 2009 |   |   | As of December 31, 2008 |   |
|----------------------------------------------------|--------|--------------------------|--------|--------|-------------------------|--------|
|                                               |   | Assets                   |   |   | (Liabilities)           |   |   |   |   |   | Assets |   |   | (Liabilities) |   |   |   |   |
| (dollars in thousands)                             |   |                     |   |   |                    |   |   | Derivative |   |   |   |   |   |   |   |   | Derivative |   |
|                                               |   | Carrying                 |   |   | Carrying                |   |   | Net Carrying |   |   | Carrying |   |   | Carrying |   |   | Net Carrying |   |
|                                               |   | Value                    |   |   | Value                   |   |   | Value |   |   | Value |   |   | Value |   |   | Value |   |
| Derivatives designated as hedging instruments:     |   |                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate swap contracts (1)              |   | $                        | -      |   |                    | $      | (459 | ) |   | $ | (459 | ) |   | $ | - |   |   | $ | (457 | ) |   | $ | (457 | ) |
| Derivatives not designated as hedging instruments: |   |                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage loan forward sales and MBS (1)            |   | $                        | -      |   |                    | $      | (245 | ) |   | $ | (245 | ) |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Mortgage loan rate lock commitments (2)            |   |                     | 287    |   |                    |   | - |   |   |   | 287 |   |   |   | - |   |   |   | - |   |   |   | - |   |

|                                           |   | Gain or (Loss), Net of Tax             |   |   | Gain or (Loss) in Income             |   |
|------------------------------------------------|--------|----------------------------------------|--------|--------|--------------------------------------|--------|
|                                           |   | Recognized in Accumulated Other        |   |   | (Ineffective Portion and Amount      |   |
| (dollars in thousands)                         |   | Comprehensive Loss (Effective Portion) |   |   | Excluded from Effectiveness Testing) |   |
|                                           |   | As of                                  |   |   | As of                                |   |   | Three months ended |   |   | Three months ended |   |
|                                           |   | September 30, 2009                     |   |   | December 31, 2008                    |   |   | September 30, 2009 |   |   | December 31, 2008 |   |
| Derivatives designated as hedging instruments: |   |                                   |   |   |                                 |   |   |   |   |   |   |   |
| Interest rate swap contracts                   |   | $                                      | (298   | )      |                                 | $      | (301 | ) |   | $ | - |   |   | $ | - |   |

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| (dollars in thousands)                             |   | Gain or (Loss) During Nine Months Ended |   |
|----------------------------------------------------|--------|-----------------------------------------|--------|
|                                               |   | September 30, 2009                      |   |   | December 31, 2008 |   |
| Derivatives not designated as hedging instruments: |   |                                    |   |   |   |   |
| Mortgage loan forward sales and MBS (1)            |   | $                                       | (245   | ) |   | $ | - |   |
| Mortgage loan rate lock commitments (2)            |   |                                    | 287    |   |   |   | - |   |
| Total                                              |   | $                                       | 42     |   |   | $ | - |   |

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| (dollars in thousands)                   |   | Total  |    |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
|------------------------------------------|--------|--------|---------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| Investment securities available-for-sale |   | $      | 261,811 |   |    | $      | 2,212  |    |   | $      | 259,599 |   |   | $ | - |   |
| Derivative assets                        |   |   | -       |   |    |   | -      |    |   |   | -       |   |   |   | - |   |
| Loans held for sale                      |   |   | 49,671  |   |    |   | -      |    |   |   | 49,671  |   |   |   | - |   |
| Mortgage servicing rights                |   |   | 4,974   |   |    |   | -      |    |   |   | -       |   |   |   | 4,974 |   |
| Total assets at fair value               |   | $      | 316,456 |   |    | $      | 2,212  |    |   | $      | 309,270 |   |   | $ | 4,974 |   |
| Derivative liabilities                   |   | $      | (704    | )      |    | $      | -      |    |   | $      | (704    | )      |   | $ | - |   |
| Total liabilities at fair value          |   | $      | (704    | )      |    | $      | -      |    |   | $      | (704    | )      |   | $ | - |   |

| (dollars in thousands)                   |   | Total  |    |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
|------------------------------------------|--------|--------|---------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| Investment securities available-for-sale |   | $      | 205,426 |   |    | $      | 1,829  |    |   | $      | 203,597 |   |   | $ | - |   |
| Mortgage servicing rights                |   |   | 4,043   |   |    |   | -      |    |   |   | -       |   |   |   | 4,043 |   |
| Total assets at fair value               |   | $      | 209,469 |   |    | $      | 1,829  |    |   | $      | 203,597 |   |   | $ | 4,043 |   |
| Derivative liabilities                   |   | $      | (457    | )      |    | $      | -      |    |   | $      | (457    | )      |   | $ | - |   |
| Total liabilities at fair value          |   | $      | (457    | )      |    | $      | -      |    |   | $      | (457    | )      |   | $ | - |   |

|                                         |   | Fair Value Measurements Using Significant |   |
|----------------------------------------------|--------|-------------------------------------------|--------|
|                                         |   | Unobservable Inputs (Level 3)             |   |
| (dollars in thousands)                       |   | Investment                                |   |   |   |   |   |   |   |
|                                         |   | Securities                                |   |   | Mortgage |   |   |   |   |
|                                         |   | Available-                                |   |   | Servicing |   |   |   |   |
|                                         |   | for-Sale                                  |   |   | Rights |   |   | Total |   |
| Beginning balance at December 31, 2008       |   | $                                         | -      |   |   | $ | 4,043 |   |   | $ | 4,043 |   |
| Total gains or losses (realized/unrealized): |   |                                      |   |   |   |   |   |   |   |   |   |   |
| Included in earnings                         |   |                                      | -      |   |   |   | (465 | ) |   |   | (465 | ) |
| Included in other comprehensive income       |   |                                      | -      |   |   |   | - |   |   |   | - |   |
| Purchases, issuances and settlements         |   |                                      | -      |   |   |   | 1,396 |   |   |   | 1,396 |   |
| Transfers in/out of Level 3                  |   |                                      | -      |   |   |   | - |   |   |   | - |   |
| Ending balance at September 30, 2009         |   | $                                         | -      |   |   | $ | 4,974 |   |   | $ | 4,974 |   |

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|                                         |   | Fair Value Measurements Using Significant |   |
|----------------------------------------------|--------|-------------------------------------------|--------|
|                                         |   | Unobservable Inputs (Level 3)             |   |
| (dollars in thousands)                       |   | Investment                                |   |   |   |   |   |   |   |
|                                         |   | Securities                                |   |   | Mortgage |   |   |   |   |
|                                         |   | Available-                                |   |   | Servicing |   |   |   |   |
|                                         |   | for-Sale                                  |   |   | Rights |   |   | Total |   |
| Beginning balance at December 31, 2007       |   | $                                         | -      |   |   | $ | - |   |   | $ | - |   |
| Total gains or losses (realized/unrealized): |   |                                      |   |   |   |   |   |   |   |   |   |   |
| Included in earnings                         |   |                                      | -      |   |   |   | - |   |   |   | - |   |
| Included in other comprehensive income       |   |                                      | -      |   |   |   | - |   |   |   | - |   |
| Purchases, issuances and settlements         |   |                                      | -      |   |   |   | - |   |   |   | - |   |
| Transfers in/out of Level 3                  |   |                                      | 3,402  |   |   |   | - |   |   |   | 3,402 |   |
| Ending balance at September 30, 2008         |   | $                                         | 3,402  |   |   | $ | - |   |   | $ | 3,402 |   |

| (dollars in thousands)     |   | Total  |    |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
|----------------------------|--------|--------|---------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| Impaired loans             |   | $      | 84,065  |   |    | $      | -      |    |   | $      | -       |   |   | $ | 84,065 |   |
| Other real estate owned    |   |   | 24,507  |   |    |   | -      |    |   |   | -       |   |   |   | 24,507 |   |
| Total assets at fair value |   | $      | 108,572 |   |    | $      | -      |    |   | $      | -       |   |   | $ | 108,572 |   |

| (dollars in thousands)     |   | Total |   |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
|----------------------------|--------|-------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| Impaired loans             |   | $     | 94,782 |   |    | $      | -      |    |   | $      | -       |   |   | $ | 94,782 |   |
| Total assets at fair value |   | $     | 94,782 |   |    | $      | -      |    |   | $      | -       |   |   | $ | 94,782 |   |

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|                            |   | As of September 30, 2009 |      |   | As of December 31, 2008 |   |
|---------------------------------|--------|--------------------------|-----------|--------|-------------------------|--------|
| (dollars in thousands)          |   | Carrying Value           |      |   | Estimated Fair Value    |   |   | Carrying Value |   |   | Estimated Fair Value |   |
| Financial Assets                |   |                     |      |   |                    |   |   |   |   |   |   |   |
| Cash and cash equivalents       |   | $                        | 97,600    |   |                    | $      | 97,600 |   |   | $ | 29,353 |   |   | $ | 29,353 |   |
| Investment securities:          |   |                     |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Available-for-sale              |   |                     | 261,811   |   |                    |   | 261,811 |   |   |   | 205,426 |   |   |   | 205,426 |   |
| Held-to-maturity                |   |                     | 92,777    |   |                    |   | 93,266 |   |   |   | 27,794 |   |   |   | 27,580 |   |
| Loans held for sale             |   |                     | 52,520    |   |                    |   | 52,520 |   |   |   | 36,138 |   |   |   | 36,138 |   |
| Net loans                       |   |                     | 1,534,181 |   |                    |   | 1,480,769 |   |   |   | 1,585,195 |   |   |   | 1,480,270 |   |
| Accrued interest receivable     |   |                     | 8,009     |   |                    |   | 8,009 |   |   |   | 7,196 |   |   |   | 7,196 |   |
| Bank-owned life insurance       |   |                     | 30,612    |   |                    |   | 30,612 |   |   |   | 29,901 |   |   |   | 29,901 |   |
| Other earning assets            |   |                     | 83,667    |   |                    |   | 83,667 |   |   |   | 19,825 |   |   |   | 19,825 |   |
|                            |   |                     |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Financial Liabilities           |   |                     |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                        |   | $                        | 1,721,742 |   |                    | $      | 1,672,928 |   |   | $ | 1,514,747 |   |   | $ | 1,526,719 |   |
| Retail repurchase agreements    |   |                     | 19,467    |   |                    |   | 19,467 |   |   |   | 18,145 |   |   |   | 18,145 |   |
| Federal Home Loan Bank advances |   |                     | 167,953   |   |                    |   | 175,314 |   |   |   | 238,910 |   |   |   | 248,283 |   |
| Federal funds purchased         |   |                     | 75,000    |   |                    |   | 75,000 |   |   |   | 37,000 |   |   |   | 37,000 |   |
| Subordinated debt               |   |                     | 15,000    |   |                    |   | 15,000 |   |   |   | 15,000 |   |   |   | 14,173 |   |
| Junior subordinated debentures  |   |                     | 56,702    |   |                    |   | 42,049 |   |   |   | 56,702 |   |   |   | 35,603 |   |
| Accrued interest payable        |   |                     | 2,959     |   |                    |   | 2,959 |   |   |   | 4,078 |   |   |   | 4,078 |   |

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| (dollars in thousands) |   |       |     |     |   |     |
|------------------------|--------|------------|----------|----------|--------|----------|
|                   |   |       |     |     |   |     |   |   |
| Notional               |   | Settlement | Maturity |     | Fixed  | Floating | Rate |
| Amount                 |   | Date       | Date     |     | Rate   | Rate     | Reset |
| $                      | 15,000 |       | 10/22/09 | 01/22/15 |   |     | 3.7810 | % | 3 month LIBOR + 1.03% | quarterly |
| $                      | 10,000 |       | 10/26/09 | 03/17/14 |   |     | 2.9850 | % | 3 month LIBOR + 0.59% | quarterly |
| $                      | 10,000 |       | 11/06/09 | 03/04/13 |   |     | 3.4275 | % | 3 month LIBOR + 1.445% | quarterly |

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|                                                                                     |   | As of and            |      |   | As of and           |   |
|------------------------------------------------------------------------------------------|--------|----------------------|-----------|--------|---------------------|--------|
|                                                                                     |   | For the Three Months |      |   | For the Nine Months |   |
| (dollars in thousands, except per share data)                                            |   | Ended September 30,  |      |   | Ended September 30, |   |
|                                                                                     |   | 2009                 |      |   | 2008                |   |   | 2009 |   |   | 2008 |   |
| Income Statement Data                                                                    |   |                 |      |   |                |   |   |   |   |   |   |   |
| Net interest income                                                                      |   | $                    | 16,417    |   |                | $      | 14,930 |   |   | $ | 45,796 |   |   | $ | 45,981 |   |
| Provision for loan losses                                                                |   |                 | 17,500    |   |                |   | 9,370 |   |   |   | 37,084 |   |   |   | 12,267 |   |
| Noninterest income                                                                       |   |                 | 4,960     |   |                |   | 6,434 |   |   |   | 16,095 |   |   |   | 15,692 |   |
| Noninterest expense                                                                      |   |                 | 71,553    |   |                |   | 15,275 |   |   |   | 103,517 |   |   |   | 48,291 |   |
| Net (loss)/income                                                                        |   |                 | (67,491   | )      |                |   | (1,711 | ) |   |   | (73,660 | ) |   |   | 752 |   |
| Preferred stock dividends                                                                |   |                 | (813      | )      |                |   | - |   |   |   | (2,055 | ) |   |   | - |   |
| Net (loss)/income to common shareholders                                                 |   |                 | (68,304   | )      |                |   | (1,711 | ) |   |   | (75,715 | ) |   |   | 752 |   |
| Period End Balances                                                                      |   |                 |      |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Assets                                                                                   |   | $                    | 2,193,906 |   |                | $      | 2,070,037 |   |   | $ | 2,193,906 |   |   | $ | 2,070,037 |   |
| Loans held for sale                                                                      |   |                 | 52,520    |   |                |   | 20,261 |   |   |   | 52,520 |   |   |   | 20,261 |   |
| Loans held for investment (1)                                                            |   |                 | 1,576,530 |   |                |   | 1,589,064 |   |   |   | 1,576,530 |   |   |   | 1,589,064 |   |
| Allowance for loan losses                                                                |   |                 | 42,349    |   |                |   | 26,750 |   |   |   | 42,349 |   |   |   | 26,750 |   |
| Goodwill                                                                                 |   |                 | -         |   |                |   | 108,395 |   |   |   | - |   |   |   | 108,395 |   |
| Deposits                                                                                 |   |                 | 1,721,742 |   |                |   | 1,518,594 |   |   |   | 1,721,742 |   |   |   | 1,518,594 |   |
| Borrowings                                                                               |   |                 | 334,122   |   |                |   | 323,641 |   |   |   | 334,122 |   |   |   | 323,641 |   |
| Shareholders' equity                                                                     |   |                 | 128,603   |   |                |   | 211,416 |   |   |   | 128,603 |   |   |   | 211,416 |   |
| Average Balances                                                                         |   |                 |      |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Assets                                                                                   |   | $                    | 2,214,489 |   |                | $      | 2,066,499 |   |   | $ | 2,165,506 |   |   | $ | 2,023,483 |   |
| Loans held for sale                                                                      |   |                 | 67,987    |   |                |   | 21,053 |   |   |   | 58,255 |   |   |   | 19,858 |   |
| Loans held for investment (1)                                                            |   |                 | 1,590,193 |   |                |   | 1,586,046 |   |   |   | 1,586,984 |   |   |   | 1,544,140 |   |
| Allowance for loan losses                                                                |   |                 | 37,197    |   |                |   | 19,082 |   |   |   | 36,981 |   |   |   | 18,404 |   |
| Goodwill                                                                                 |   |                 | 51,824    |   |                |   | 108,393 |   |   |   | 52,203 |   |   |   | 109,632 |   |
| Deposits                                                                                 |   |                 | 1,655,009 |   |                |   | 1,488,510 |   |   |   | 1,610,441 |   |   |   | 1,475,133 |   |
| Borrowings                                                                               |   |                 | 352,366   |   |                |   | 342,464 |   |   |   | 354,115 |   |   |   | 312,290 |   |
| Shareholders' equity                                                                     |   |                 | 193,666   |   |                |   | 215,721 |   |   |   | 187,370 |   |   |   | 216,953 |   |
| Per Common Share Data                                                                    |   |                 |      |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Net (loss)/income per common share:                                                      |   |                 |      |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                    |   | $                    | (5.98     | )      |                | $      | (0.15 | ) |   | $ | (6.63 | ) |   | $ | 0.07 |   |
| Diluted (2)                                                                              |   |                 | (5.98     | )      |                |   | (0.15 | ) |   |   | (6.63 | ) |   |   | 0.07 |   |
| Cash dividends declared                                                                  |   |                 | -         |   |                |   | 0.10 |   |   |   | 0.05 |   |   |   | 0.35 |   |
| Book value                                                                               |   |                 | 6.71      |   |                |   | 18.51 |   |   |   | 6.71 |   |   |   | 18.51 |   |
| Tangible book value                                                                      |   |                 | 6.26      |   |                |   | 8.50 |   |   |   | 6.26 |   |   |   | 8.50 |   |
| Performance Ratios                                                                       |   |                 |      |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Return on average assets                                                                 |   |                 | (12.09    | ) %    |                |   | (0.33 | ) % |   |   | (4.55 | ) % |   |   | 0.05 | % |
| Return on average tangible assets                                                        |   |                 | (12.41    | )      |                |   | (0.35 | ) |   |   | (4.67 | ) |   |   | 0.05 |   |
| Return on average equity (3)                                                             |   |                 | (138.26   | )      |                |   | (3.16 | ) |   |   | (52.56 | ) |   |   | 0.46 |   |
| Return on average tangible equity                                                        |   |                 | (196.10   | )      |                |   | (6.72 | ) |   |   | (75.95 | ) |   |   | 0.99 |   |
| Net interest margin (tax equivalent)                                                     |   |                 | 3.25      |   |                |   | 3.32 |   |   |   | 3.14 |   |   |   | 3.51 |   |
| Dividend payout on common shares (4)                                                     |   |                 | N/A       |   |                |   | 66.80 |   |   |   | N/A |   |   |   | 531.65 |   |
| Asset Quality Ratios                                                                     |   |                 |      |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses to period end loans held for investment                        |   |                 | 2.69      | %      |                |   | 1.68 | % |   |   | 2.69 | % |   |   | 1.68 | % |
| Nonperforming loans to period end allowance for loan losses                              |   |                 | 363.40    |   |                |   | 152.46 |   |   |   | 363.40 |   |   |   | 152.46 |   |
| Net chargeoffs (annualized) to average loans held for investment                         |   |                 | 2.99      |   |                |   | 0.37 |   |   |   | 2.48 |   |   |   | 0.25 |   |
| Nonperforming assets to period end loans held for investment and foreclosed property (5) |   |                 | 11.15     |   |                |   | 2.97 |   |   |   | 11.15 |   |   |   | 2.97 |   |
| Capital and Liquidity Ratios                                                             |   |                 |      |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Average equity to average assets                                                         |   |                 | 8.75      | %      |                |   | 10.44 | % |   |   | 8.65 | % |   |   | 10.72 | % |
| Leverage capital                                                                         |   |                 | 6.49      |   |                |   | 6.73 |   |   |   | 6.49 |   |   |   | 6.73 |   |
| Tier 1 risk based capital                                                                |   |                 | 7.83      |   |                |   | 7.21 |   |   |   | 7.83 |   |   |   | 7.21 |   |
| Total risk based capital                                                                 |   |                 | 11.52     |   |                |   | 10.50 |   |   |   | 11.52 |   |   |   | 10.50 |   |
| Average loans to average deposits                                                        |   |                 | 100.19    |   |                |   | 107.97 |   |   |   | 102.16 |   |   |   | 106.02 |   |
| Average loans to average deposits and borrowings                                         |   |                 | 82.60     |   |                |   | 87.77 |   |   |   | 83.75 |   |   |   | 87.50 |   |

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|                                                      |   | Three Months Ended September 30, |      |
|-----------------------------------------------------------|--------|----------------------------------|-----------|
|                                                      |   |                             |      |   | 2009 |   |   |   |   |   |   |   |   | 2008 |   |   |   |   |
| (dollars in thousands)                                    |   |                             |      |   |   |   |   | Average |   |   |   |   |   |   |   |   | Average |   |
|                                                      |   | Average                          |      |   | Income / |   |   | Yield / |   |   | Average |   |   | Income / |   |   | Yield / |   |
|                                                      |   | Balance (3)                      |      |   | Expense |   |   | Rate |   |   | Balance (3) |   |   | Expense |   |   | Rate |   |
| Interest earning assets:                                  |   |                             |      |
| Loans (1)(2)                                              |   | $                                | 1,658,180 |   |   | $ | 21,159 |   |   |   | 5.06 | % |   | $ | 1,607,099 |   |   | $ | 25,766 |   |   |   | 6.38 | % |
| Taxable investment securities                             |   |                             | 302,680   |   |   |   | 4,689 |   |   |   | 6.15 |   |   |   | 147,688 |   |   |   | 1,795 |   |   |   | 4.84 |   |
| Tax-exempt investment securities (1)                      |   |                             | 48,574    |   |   |   | 865 |   |   |   | 7.06 |   |   |   | 49,305 |   |   |   | 725 |   |   |   | 5.85 |   |
| Other earning assets                                      |   |                             | 32,799    |   |   |   | 115 |   |   |   | 1.39 |   |   |   | 22,233 |   |   |   | 204 |   |   |   | 3.65 |   |
| Total earning assets                                      |   |                             | 2,042,233 |   |   |   | 26,828 |   |   |   | 5.21 |   |   |   | 1,826,325 |   |   |   | 28,490 |   |   |   | 6.21 |   |
|                                                      |   |                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-earning assets:                                       |   |                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and due from banks                                   |   |                             | 26,497    |   |   |   |   |   |   |   |   |   |   |   | 29,545 |   |   |   |   |   |   |   |   |   |
| Goodwill and core deposit premium                         |   |                             | 57,120    |   |   |   |   |   |   |   |   |   |   |   | 114,484 |   |   |   |   |   |   |   |   |   |
| Other assets, net                                         |   |                             | 88,639    |   |   |   |   |   |   |   |   |   |   |   | 96,145 |   |   |   |   |   |   |   |   |   |
| Total assets                                              |   | $                                | 2,214,489 |   |   |   |   |   |   |   |   |   |   | $ | 2,066,499 |   |   |   |   |   |   |   |   |   |
|                                                      |   |                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                             |   |                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand deposits                          |   | $                                | 198,414   |   |   | $ | 603 |   |   |   | 1.21 | % |   | $ | 167,326 |   |   | $ | 507 |   |   |   | 1.21 | % |
| Savings deposits                                          |   |                             | 40,696    |   |   |   | 27 |   |   |   | 0.26 |   |   |   | 40,789 |   |   |   | 29 |   |   |   | 0.28 |   |
| Money market deposits                                     |   |                             | 320,719   |   |   |   | 1,107 |   |   |   | 1.37 |   |   |   | 285,769 |   |   |   | 1,668 |   |   |   | 2.32 |   |
| Time deposits                                             |   |                             | 938,833   |   |   |   | 6,232 |   |   |   | 2.63 |   |   |   | 834,393 |   |   |   | 7,946 |   |   |   | 3.79 |   |
| Retail repurchase agreements                              |   |                             | 17,618    |   |   |   | 30 |   |   |   | 0.68 |   |   |   | 37,934 |   |   |   | 204 |   |   |   | 2.14 |   |
| Federal Home Loan Bank advances                           |   |                             | 175,360   |   |   |   | 1,458 |   |   |   | 3.30 |   |   |   | 212,970 |   |   |   | 1,927 |   |   |   | 3.60 |   |
| Federal funds purchased                                   |   |                             | 87,686    |   |   |   | 56 |   |   |   | 0.25 |   |   |   | 19,804 |   |   |   | 114 |   |   |   | 2.29 |   |
| Other borrowed funds                                      |   |                             | 71,702    |   |   |   | 568 |   |   |   | 3.14 |   |   |   | 71,756 |   |   |   | 860 |   |   |   | 4.77 |   |
| Total interest-bearing liabilities                        |   |                             | 1,851,028 |   |   |   | 10,081 |   |   |   | 2.16 |   |   |   | 1,670,741 |   |   |   | 13,255 |   |   |   | 3.16 |   |
|                                                      |   |                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing liabilities and shareholders' equity: |   |                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing demand deposits                       |   |                             | 156,347   |   |   |   |   |   |   |   |   |   |   |   | 160,233 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                         |   |                             | 13,448    |   |   |   |   |   |   |   |   |   |   |   | 19,804 |   |   |   |   |   |   |   |   |   |
| Shareholders' equity                                      |   |                             | 193,666   |   |   |   |   |   |   |   |   |   |   |   | 215,721 |   |   |   |   |   |   |   |   |   |
| Total liabilities and equity                              |   | $                                | 2,214,489 |   |   |   |   |   |   |   |   |   |   | $ | 2,066,499 |   |   |   |   |   |   |   |   |   |
|                                                      |   |                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                      |   |                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income and net yield on earning assets (4)   |   |                             | $         | 16,747 |   |   |   | 3.25 | % |   |   |   |   |   | $ | 15,235 |   |   |   | 3.32 | % |
|                                                      |   |                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate spread (5)                                  |   |                             |      |   |   |   |   |   |   |   | 3.05 | % |   |   |   |   |   |   |   |   |   |   | 3.05 | % |

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|                                                      |   | Nine Months Ended September 30, |      |
|-----------------------------------------------------------|--------|---------------------------------|-----------|
|                                                      |   |                            |      |   | 2009 |   |   |   |   |   |   |   |   | 2008 |   |   |   |   |
| (dollars in thousands)                                    |   |                            |      |   |   |   |   | Average |   |   |   |   |   |   |   |   | Average |   |
|                                                      |   | Average                         |      |   | Income / |   |   | Yield / |   |   | Average |   |   | Income / |   |   | Yield / |   |
|                                                      |   | Balance (3)                     |      |   | Expense |   |   | Rate |   |   | Balance (3) |   |   | Expense |   |   | Rate |   |
| Interest earning assets:                                  |   |                            |      |
| Loans (1)(2)                                              |   | $                               | 1,645,239 |   |   | $ | 64,103 |   |   |   | 5.21 | % |   | $ | 1,563,998 |   |   | $ | 79,934 |   |   |   | 6.83 | % |
| Taxable investment securities                             |   |                            | 272,778   |   |   |   | 11,864 |   |   |   | 5.82 |   |   |   | 148,744 |   |   |   | 5,386 |   |   |   | 4.84 |   |
| Tax-exempt investment securities (1)                      |   |                            | 52,347    |   |   |   | 2,702 |   |   |   | 6.90 |   |   |   | 53,000 |   |   |   | 2,309 |   |   |   | 5.82 |   |
| Other earning assets                                      |   |                            | 25,041    |   |   |   | 282 |   |   |   | 1.51 |   |   |   | 19,698 |   |   |   | 723 |   |   |   | 4.90 |   |
| Total earning assets                                      |   |                            | 1,995,405 |   |   |   | 78,951 |   |   |   | 5.29 |   |   |   | 1,785,440 |   |   |   | 88,352 |   |   |   | 6.61 |   |
|                                                      |   |                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-earning assets:                                       |   |                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and due from banks                                   |   |                            | 28,454    |   |   |   |   |   |   |   |   |   |   |   | 30,052 |   |   |   |   |   |   |   |   |   |
| Goodwill and core deposit premium                         |   |                            | 57,696    |   |   |   |   |   |   |   |   |   |   |   | 115,901 |   |   |   |   |   |   |   |   |   |
| Other assets, net                                         |   |                            | 83,951    |   |   |   |   |   |   |   |   |   |   |   | 92,090 |   |   |   |   |   |   |   |   |   |
| Total assets                                              |   | $                               | 2,165,506 |   |   |   |   |   |   |   |   |   |   | $ | 2,023,483 |   |   |   |   |   |   |   |   |   |
|                                                      |   |                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                             |   |                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand deposits                          |   | $                               | 191,560   |   |   | $ | 1,572 |   |   |   | 1.10 | % |   | $ | 166,429 |   |   | $ | 1,548 |   |   |   | 1.24 | % |
| Savings deposits                                          |   |                            | 40,085    |   |   |   | 78 |   |   |   | 0.26 |   |   |   | 41,367 |   |   |   | 87 |   |   |   | 0.28 |   |
| Money market deposits                                     |   |                            | 302,829   |   |   |   | 3,377 |   |   |   | 1.49 |   |   |   | 277,844 |   |   |   | 5,049 |   |   |   | 2.43 |   |
| Time deposits                                             |   |                            | 923,817   |   |   |   | 20,421 |   |   |   | 2.96 |   |   |   | 829,496 |   |   |   | 25,894 |   |   |   | 4.17 |   |
| Retail repurchase agreements                              |   |                            | 19,633    |   |   |   | 97 |   |   |   | 0.66 |   |   |   | 34,041 |   |   |   | 616 |   |   |   | 2.42 |   |
| Federal Home Loan Bank advances                           |   |                            | 192,543   |   |   |   | 4,534 |   |   |   | 3.15 |   |   |   | 194,736 |   |   |   | 5,440 |   |   |   | 3.73 |   |
| Federal funds purchased                                   |   |                            | 70,237    |   |   |   | 141 |   |   |   | 0.27 |   |   |   | 21,705 |   |   |   | 412 |   |   |   | 2.54 |   |
| Other borrowed funds                                      |   |                            | 71,702    |   |   |   | 1,881 |   |   |   | 3.51 |   |   |   | 61,808 |   |   |   | 2,364 |   |   |   | 5.11 |   |
| Total interest-bearing liabilities                        |   |                            | 1,812,406 |   |   |   | 32,101 |   |   |   | 2.37 |   |   |   | 1,627,426 |   |   |   | 41,410 |   |   |   | 3.40 |   |
|                                                      |   |                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing liabilities and shareholders' equity: |   |                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing demand deposits                       |   |                            | 152,150   |   |   |   |   |   |   |   |   |   |   |   | 159,997 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                         |   |                            | 13,580    |   |   |   |   |   |   |   |   |   |   |   | 19,107 |   |   |   |   |   |   |   |   |   |
| Shareholders' equity                                      |   |                            | 187,370   |   |   |   |   |   |   |   |   |   |   |   | 216,953 |   |   |   |   |   |   |   |   |   |
| Total liabilities and equity                              |   | $                               | 2,165,506 |   |   |   |   |   |   |   |   |   |   | $ | 2,023,483 |   |   |   |   |   |   |   |   |   |
|                                                      |   |                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                      |   |                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income and net yield on earning assets (4)   |   |                            | $         | 46,850 |   |   |   | 3.14 | % |   |   |   |   |   | $ | 46,942 |   |   |   | 3.51 | % |
|                                                      |   |                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate spread (5)                                  |   |                            |      |   |   |   |   |   |   |   | 2.92 | % |   |   |   |   |   |   |   |   |   |   | 3.21 | % |

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| NONINTEREST INCOME                                       |   | For the Three Months |   |   | For the Nine Months Ended |   |
|----------------------------------------------------------|--------|----------------------|--------|--------|---------------------------|--------|
|                                                     |   | September 30,        |   |   | September 30,             |   |
| (dollars in thousands)                                   |   | 2009                 |   |   | 2008                      |   |   | 2009 |   |   | 2008 |   |
| Service charges on deposit accounts                      |   | $                    | 2,333  |   |                      | $      | 2,450 |   |   | $ | 6,640 |   |   | $ | 6,742 |   |
| Mortgage loan income                                     |   |                 | 4,113  |   |                      |   | 2,111 |   |   |   | 8,651 |   |   |   | 3,910 |   |
| Cardholder and merchant services income                  |   |                 | 650    |   |                      |   | 615 |   |   |   | 1,854 |   |   |   | 1,681 |   |
| Trust and investment services                            |   |                 | 459    |   |                      |   | 458 |   |   |   | 1,241 |   |   |   | 1,389 |   |
| Bank owned life insurance                                |   |                 | 363    |   |                      |   | 243 |   |   |   | 833 |   |   |   | 728 |   |
| Other service charges, commissions and fees              |   |                 | 301    |   |                      |   | 136 |   |   |   | 882 |   |   |   | 523 |   |
| Security gains (losses)                                  |   |                 | 620    |   |                      |   | - |   |   |   | 617 |   |   |   | 6 |   |
| Total other than temporary impairment loss               |   |                 | (3,985 | )      |                      |   | - |   |   |   | (4,985 | ) |   |   | - |   |
| Portion of loss recognized in other comprehensive income |   |                 | -      |   |                      |   | - |   |   |   | - |   |   |   | - |   |
| Net impairment loss recognized in earnings               |   |                 | (3,985 | )      |                      |   | - |   |   |   | (4,985 | ) |   |   | - |   |
| Other income                                             |   |                 | 106    |   |                      |   | 421 |   |   |   | 362 |   |   |   | 713 |   |
| Total noninterest income                                 |   | $                    | 4,960  |   |                      | $      | 6,434 |   |   | $ | 16,095 |   |   | $ | 15,692 |   |

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| NONINTEREST EXPENSE                               |   | For the Three Months |   |   | For the Nine Months Ended |   |
|---------------------------------------------------|--------|----------------------|--------|--------|---------------------------|--------|
|                                              |   | September 30,        |   |   | September 30,             |   |
| (dollars in thousands)                            |   | 2009                 |   |   | 2008                      |   |   | 2009 |   |   | 2008 |   |
| Personnel expense                                 |   | $                    | 8,559  |   |                      | $      | 8,349 |   |   | $ | 24,826 |   |   | $ | 26,242 |   |
| Net occupancy expense                             |   |                 | 1,365  |   |                      |   | 1,354 |   |   |   | 4,173 |   |   |   | 4,012 |   |
| Furniture, equipment, and data processing expense |   |                 | 1,843  |   |                      |   | 1,616 |   |   |   | 5,325 |   |   |   | 4,948 |   |
| Professional fees                                 |   |                 | 487    |   |                      |   | 727 |   |   |   | 1,720 |   |   |   | 1,446 |   |
| Stationery, printing and supplies                 |   |                 | 137    |   |                      |   | 296 |   |   |   | 536 |   |   |   | 880 |   |
| Advertising and marketing                         |   |                 | 480    |   |                      |   | 344 |   |   |   | 1,536 |   |   |   | 1,047 |   |
| Goodwill impairment                               |   |                 | 52,395 |   |                      |   | - |   |   |   | 52,395 |   |   |   | 1,800 |   |
| FDIC insurance                                    |   |                 | 1,577  |   |                      |   | 404 |   |   |   | 3,440 |   |   |   | 724 |   |
| Other expense                                     |   |                 | 4,710  |   |                      |   | 2,185 |   |   |   | 9,566 |   |   |   | 7,192 |   |
| Total noninterest expense                         |   | $                    | 71,553 |   |                      | $      | 15,275 |   |   | $ | 103,517 |   |   | $ | 48,291 |   |

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| (dollars in thousands)                                   |   | September 30, 2009 |    |   | December 31, 2008 |   |
|----------------------------------------------------------|--------|--------------------|---------|--------|-------------------|--------|
| Impaired loans without a related allowance for loan loss |   | $                  | 59,863  |   |              | $      | 21,300 |   |
| Impaired loans with a related allowance for loan loss    |   |               | 105,951 |   |              |   | 94,800 |   |
| Total impaired loans                                     |   | $                  | 165,814 |   |              | $      | 116,100 |   |
| Allowance for loan loss related to impaired loans        |   | $                  | 21,886  |   |              | $      | 15,400 |   |

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|             |   | Regulatory Guidelines |   |   |        |   |   |       |   |
|------------------|--------|-----------------------|--------|--------|-------------|--------|--------|------------|--------|
|             |   | Well                  |   |   | Adequately  |   |   |       |   |   |   |   |
|             |   | Capitalized           |   |   | Capitalized |   |   | FNB United |   |   | CommunityONE |   |
| Total Capital    |   |                  | 10.00  | %      |        |   | 8.00   | %          |   |   | 11.52 | % |   |   | 10.86 | % |
| Tier 1 Capital   |   |                  | 6.00   |   |        |   | 4.00   |       |   |   | 8.68 |   |   |   | 8.77 |   |
| Leverage Capital |   |                  | 5.00   |   |        |   | 4.00   |       |   |   | 7.20 |   |   |   | 7.26 |   |

Item 

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Item 

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| Item 1. | Legal Proceedings |
|---------|-------------------|

| Item 1A | Risk Factors |
|---------|--------------|

| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
|---------|-------------------------------------------------------------|

| Item 3. | Defaults Upon Senior Securities |
|---------|---------------------------------|

| Item 4. | Submission of Matters to a Vote of Security Holders |
|---------|-----------------------------------------------------|

| Item 5. | Other Information |
|---------|-------------------|

| Item 6. | Exhibits |
|---------|----------|

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|                   |   | FNB United Corp. |
|------------------------|--------|------------------|
|                   |   | (Registrant)     |
|                   |   |             |   |
|                   |   |             |   |
| Date: November 6, 2009 |   | By:              | /s/ Mark A. Severson |
|                   |   |             | Mark A. Severson |
|                   |   |             | Executive Vice President and Chief |
|                   |   |             | Financial Officer |
|                   |   |             | (Duly Authorized Officer and Principal |
|                   |   |             | Financial Officer) |

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INDEX 

| Exhibit No. |   | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                 |
|-------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.10        |   | Articles of Incorporation of the Registrant, incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form S-14 Registration Statement (No. 2-96498) filed March 16, 1985.                                                                                                                                                                                            |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.11        |   | Articles of Amendment to Articles of Incorporation of the Registrant, adopted May 10, 1988, incorporated herein by reference to Exhibit 19.10 to the Registrant’s Form 10-Q Quarterly Report for the quarter ended June 30, 1988.                                                                                                                                                |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.12        |   | Articles of Amendment to Articles of Incorporation of the Registrant, adopted May 12, 1998, incorporated herein by reference to Exhibit 3.12 to the Registrant’s Form 10-Q Quarterly Report for the quarter ended June 30, 1998.                                                                                                                                                 |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.13        |   | Articles of Amendment to Articles of Incorporation of the Registrant, adopted May 23, 2003, incorporated herein by reference to Exhibit 3.13 to the Registrant’s Form 10-Q Quarterly Report for the quarter ended June 30, 2003.                                                                                                                                                 |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.14        |   | Articles of Amendment to Articles of Incorporation of the Registrant, adopted March 15, 2006, incorporated herein by reference to Exhibit 3.14 to the Registrant’s Form 10-Q Quarterly Report for the quarter ended March 31, 2006.                                                                                                                                              |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.15        |   | Articles of Merger, setting forth amendment to Articles of Incorporation of the Registrant, effective April 28, 2006, incorporated herein by reference to Exhibit 3.15 to the Registrant’s Form 10-Q Quarterly Report for the quarter ended March 31, 2006.                                                                                                                      |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.16        |   | Articles of Amendment to Articles of Incorporation, adopted January 23, 2009, incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K Current Report filed January 23, 2009.                                                                                                                                                                                |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.17        |   | Articles of Amendment to Articles of Incorporation, adopted February 11, 2009, incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K Current Report filed February 13, 2009.                                                                                                                                                                              |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.20        |   | Amended and Restated Bylaws of the Registrant, adopted February 11, 2009, incorporated herein by reference to Exhibit 3.2 to the Registrant’s Form 8-K Current Report filed February 13, 2009.                                                                                                                                                                                   |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.10        |   | Specimen of Registrant’s Common Stock Certificate, incorporated herein by reference to Exhibit 4 to Amendment No. 1 to the Registrant’s Form S-14 Registration Statement (No. 2-96498) filed April 19, 1985.                                                                                                                                                               |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.11        |   | Specimen of Registrant’s Fixed Rate Cumulative Perpetual Preferred Stock, Series A, Stock Certificate, incorporated herein by reference to Exhibit 4.1 to the Registrant’s Form 8-K Current Report filed February 13, 2009.                                                                                                                                                |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.20        |   | Indenture dated as of November 4, 2005, between FNB Corp. and U.S. Bank, National Association, as trustee, incorporated herein by reference to Exhibit 4.1 to the Registrant’s Form 8-K Current Report filed November 8, 2005.                                                                                                                                                   |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.21        |   | Amended and Restated Declaration of Trust of FNB United Statutory Trust I dated as of November 4, 2005, among FNB Corp., as sponsor, U.S. Bank, National Association, as institutional trustee, and Michael C. Miller and Jerry A. Little, as administrators, incorporated herein by reference to Exhibit 4.2 to the Registrant’s Form 8-K CurrentReport dated November 4, 2005. |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.30        |   | Amended and Restated Declaration of Trust of FNB United Statutory Trust I dated as of November 4, 2005, among FNB Corp., as sponsor, U.S. Bank, National Association, as institutional trustee, and Michael C. Miller and Jerry A. Little, as administrators, incorporated herein by reference to Exhibit 4.2 to the Registrant’s Form 8-K CurrentReport filed November 8, 2005. |

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| 4.31   |   | Amended and Restated Trust Agreement of FNB United Statutory Trust II dated as of April 27, 2006, among FNB Corp., as sponsor, Wilmington Trust Company, as institutional trustee, and Michael C. Miller and Jerry A. Little, as administrators, incorporated herein by reference to Exhibit 4.2 to the Registrant’s Form 8-K Current Reportdated April 27, 2006 and filed April 28, 2006. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.40   |   | Warrant to purchase up to 2,207,143 shares of Common Stock used to the United States Department of the Treasury, incorporated herein by reference to Exhibit 4.2 to the Registrant’s Form 8-K Current Report filed February 13, 2009.                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.10* |   | Form of Split Dollar Insurance Agreement dated as of November 1, 1987 between First National Bank and Trust Company and certain of its key employees and directors, incorporated herein by reference to Exhibit 19.20 to the Registrant’s Form 10-Q Quarterly Report for the quarter ended June 30, 1988.                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.11* |   | Form of Amendment to Split Dollar Insurance Agreement dated as of November 1, 1994 between First National Bank and Trust Company and certain of its key employees and directors, incorporated herein by reference to Exhibit 10.11 to the Registrant’s Form 10-KSB Annual Report for the fiscal year ended December 31, 1994.                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.20* |   | Stock Compensation Plan as amended effective May 12, 1998, incorporated herein by reference to Exhibit 10.30 to the Registrant’s Form 10-Q Quarterly Report for the quarter ended June 30, 1998.                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.21* |   | Form of Incentive Stock Option Agreement between FNB Corp. and certain of its key employees, pursuant to the Registrant’s Stock Compensation Plan, incorporated herein by reference to Exhibit 10.31 to the Registrant’s Form 10-KSB Annual Report for the fiscal year ended December 31, 1994.                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.22* |   | Form of Nonqualified Stock Option Agreement between FNB Corp. and certain of its directors, pursuant to the Registrant’s Stock Compensation Plan, incorporated herein by reference to Exhibit 10.32 to the Registrant’s Form 10-KSB Annual Report for the fiscal year ended December 31, 1994.                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.23* |   | FNB United Corp. 2003 Stock Incentive Plan, as amended and restated as of December 31, 2008, incorporated herein by reference to Exhibit 10.23 to the Registrant’s Form 10-K Annual Report for the fiscal year ended December 31, 2008.                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.24* |   | Form of Incentive Stock Option Agreement between FNB Corp. and certain of its key employees, pursuant to the Registrant’s 2003 Stock Incentive Plan, incorporated herein by reference to Exhibit 10.24 to the Registrant’s Form 10-Q Quarterly Report for the quarter ended  September 30, 2003.                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.25* |   | Form of Nonqualified Stock Option Agreement between FNB Corp. and certain of its directors, pursuant to the Registrant’s 2003 Stock Incentive Plan, incorporated herein by reference to Exhibit 10.25 to the Registrant’s Form 10-K Annual Report for the fiscal year ended December 31, 2003.                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.26* |   | Form of Restricted Stock Agreement between FNB United Corp. and certain of its key employees and non-employee directors, pursuant to the Registrant’s 2003 Stock Incentive Plan, incorporated herein by reference to Exhibit 10.26 to the Registrant’s Form 10-Q Quarterly Report for the quarter ended June 30, 2006.                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.30* |   | Amended and Restated Employment Agreement dated as of December 31, 2008 among FNB United Corp., CommunityONE Bank, National Association and Michael C. Miller, incorporated herein by reference to Exhibit 10.30 to the Registrant’s Form 10-K Annual Report for the fiscal yearended December 31, 2008.                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.31* |   | Carolina Fincorp, Inc. Stock Option Plan (assumed by the Registrant on April 10, 2000), incorporated herein by reference to Exhibit 99.1 to the Registrant’s Registration Statement on Form S-8 (File No. 333-54702).                                                                                                                                                                      |

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| 10.32* |   | Amended and Restated Employment Agreement dated as of December 31, 2008 between CommunityONE Bank, National Association and R. Larry Campbell, incorporated herein by reference to Exhibit 10.32 to the Registrant’s Form 10-K Annual Report for the fiscal year ended December 31, 2008.                                      |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                 |
| 10.33* |   | Nonqualified Supplemental Retirement Plan with R. Larry Campbell, incorporated herein by reference to Exhibit 10(c) to the Annual Report on Form 10-KSB of Carolina Fincorp, Inc. for the fiscal year ended June 30, 1997.                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                 |
| 10.34* |   | Amendment to Executive Income Deferred Compensation Agreement dated as of December 31, 2008 between CommunityONE Bank, National Association and R. Larry Campbell, incorporated herein by reference to Exhibit 10.34 to the Registrant’s Form 10-K Annual Report for the fiscal year ended December 31, 2008.                  |
|   |   |                                                                                                                                                                                                                                                                                                                                 |
| 10.35* |   | Amended and Restated Change of Control Agreement dated as of December 31, 2008 among FNB United Corp., CommunityONE Bank, National Association, and R. Mark Hensley, incorporated herein by reference to Exhibit 10.35 to the Registrant’s Form 10-K Annual Report for the fiscal year ended December 31, 2008.                |
|   |   |                                                                                                                                                                                                                                                                                                                                 |
| 10.36* |   | Amended and Restated Change of Control Agreement dated as of December 31, 2008 among FNB United Corp., CommunityONE Bank, National Association, and Mark A. Severson, incorporated herein by reference to Exhibit 10.36 to the Registrant’s Form 10-K Annual Report for the fiscal year ended December 31, 2008.               |
|   |   |                                                                                                                                                                                                                                                                                                                                 |
| 10.37* |   | Form of Change of Control Agreement among FNB United Corp., CommunityONE Bank, National Association and certain key officers and employees, incorporated herein by reference to Exhibit 10.37 to the Registrant’s Form 10-K Annual Report for the fiscal year ended December 31, 2008.                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                 |
| 10.38* |   | Form of Letter Agreement between FNB United Corp. and senior executive officers incorporated herein by reference to the Registrant’s Form 8-K Current Report filed February 13, 2009.                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                 |
| 10.40  |   | Guarantee Agreement dated as of November 4, 2005, by FNB Corp. for the benefit of the holders of trust preferred securities, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K Current Report dated November 4, 2005 and filed November 5, 2005.                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                 |
| 10.41  |   | Guarantee Agreement dated as of April 27, 2006 between FNB Corp. and Wilmington Trust Company, as guarantee trustee, for the benefit of the holders of trust preferred securities, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K Current Report dated April 27, 2006 and filed April 28, 2006. |
|   |   |                                                                                                                                                                                                                                                                                                                                 |
| 10.42  |   | Subordinated Debt Loan Agreement dated as of June 30, 2008, between CommunityONE Bank, National Association and SunTrust Bank, incorporated herein by reference to Exhibit 10.43 to the Registrant’s Form 10-Q Quarterly Report for the quarter ended June 30, 2008.                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                 |
| 10.5   |   | Letter Agreement between the Registrant and the United States Department of the Treasury, dated February 13, 2009, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K Current Report filed February 13, 2009.                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                 |
| 31.10  |   | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                 |
| 31.11  |   | 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.                                                                                                                                                                                                                                                             |

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