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| For the quarterly period ended March 31, 2014 |   | Commission File Number 0-13823 |

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|                                          |  |  |
| North Carolina                           |   | 56-1456589 |
| (State of Incorporation)                 |   | (I.R.S. Employer Identification No.) |
| 1017 E. Morehead Street                  |   |   |
| Charlotte, North Carolina                |   | 28204 |
| (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  o |
|                       |   | (Do not check if a smaller reporting company) |   |

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Table of Contents

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| PART I.  FINANCIAL INFORMATION |   |
| Item 1                         | Consolidated Financial Statements (Unaudited) |   |
|                           | Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013 | 1 |
|                           | Consolidated Statements of Operations for Three Months Ended March 31, 2014 and 2013 | 2 |
|                           | Consolidated Statements of Comprehensive Income (Loss) for Three Months Ended March 31, 2014 and 2013 | 3 |
|                           | Consolidated Statements of Shareholders' Equity for Three Months Ended March 31, 2014 and 2013 | 4 |
|                           | Consolidated Statements of Cash Flows for Three Months Ended March 31, 2014 and 2013 | 5 |
| Item 2                         | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 32 |
| Item 3                         | Quantitative and Qualitative Disclosures about Market Risk | 48 |
| Item 4                         | Controls and Procedures | 49 |
| PART II.  OTHER INFORMATION    |   |
| Item 1                         | Legal Proceedings | 50 |
| Item 1A                        | Risk Factors | 50 |
| Item 2                         | Unregistered Sales of Equity Securities and Repurchases | 50 |
| Item 3                         | Defaults Upon Senior Securities | 50 |
| Item 4                         | Mine Safety Disclosures | 50 |
| Item 5                         | Other Information | 50 |
| Item 6                         | Exhibits | 50 |
|                           | Signatures | 51 |

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|                                                                                                                                         |  |  |  |  |  |  |  |  |
| (in thousands, except share and per share data)                                                                                         |   | March 31, 2014 |   | December 31, 2013* |
| Assets                                                                                                                                  |   |   |   |   |
| Cash and due from banks                                                                                                                 |   | $ | 31,591 |  |   | $ | 31,917 |  |
| Interest-bearing bank balances                                                                                                          |   | 73,360 |  |   | 35,513 |  |
| Investment securities:                                                                                                                  |   |   |   |   |
| Available-for-sale, at estimated fair value (amortized cost of $420,619 in 2014 and $438,057 in 2013)                                   |   | 402,468 |  |   | 414,614 |  |
| Held-to-maturity, at amortized cost (estimated fair value of $141,002 in 2014                                     and $141,125 in 2013) |   | 149,060 |  |   | 151,795 |  |
| Loans held for sale                                                                                                                     |   | 1,961 |  |   | 1,836 |  |
| Loans held for investment                                                                                                               |   | 1,219,785 |  |   | 1,212,248 |  |
| Less: Allowance for loan losses                                                                                                         |   | (26,039 | ) |   | (26,785 | ) |
| Net loans held for investment                                                                                                           |   | 1,193,746 |  |   | 1,185,463 |  |
| Premises and equipment, net                                                                                                             |   | 48,172 |  |   | 50,889 |  |
| Other real estate owned and property acquired in settlement of loans                                                                    |   | 24,624 |  |   | 28,395 |  |
| Core deposit premiums and other intangibles                                                                                             |   | 6,597 |  |   | 6,914 |  |
| Goodwill                                                                                                                                |   | 4,205 |  |   | 4,205 |  |
| Bank-owned life insurance                                                                                                               |   | 40,210 |  |   | 39,940 |  |
| Other assets                                                                                                                            |   | 32,487 |  |   | 33,551 |  |
| Total Assets                                                                                                                            |   | $ | 2,008,481 |  |   | $ | 1,985,032 |  |
| Liabilities                                                                                                                             |   |   |   |   |
| Deposits:                                                                                                                               |   |   |   |   |
| Noninterest-bearing demand deposits                                                                                                     |   | $ | 315,515 |  |   | $ | 290,461 |  |
| Interest-bearing deposits:                                                                                                              |   |   |   |   |
| Demand, savings and money market deposits                                                                                               |   | 879,419 |  |   | 875,970 |  |
| Time deposits of $100 or more                                                                                                           |   | 236,742 |  |   | 229,395 |  |
| Other time deposits                                                                                                                     |   | 336,254 |  |   | 352,879 |  |
| Total deposits                                                                                                                          |   | 1,767,930 |  |   | 1,748,705 |  |
| Retail repurchase agreements                                                                                                            |   | 5,152 |  |   | 6,917 |  |
| Federal Home Loan Bank advances                                                                                                         |   | 73,271 |  |   | 73,283 |  |
| Long-term notes payable                                                                                                                 |   | 5,281 |  |   | 5,263 |  |
| Junior subordinated debentures                                                                                                          |   | 56,702 |  |   | 56,702 |  |
| Other liabilities                                                                                                                       |   | 14,814 |  |   | 13,801 |  |
| Total Liabilities                                                                                                                       |   | 1,923,150 |  |   | 1,904,671 |  |
| Shareholders' Equity                                                                                                                    |   |   |   |   |
| Preferred stock, 10,000,000 shares authorized                                                                                           |   |   |   |   |
|    Series A, $10.00 par value; 51,500 shares issued and no shares outstanding in 2014 and 2013                           |   | — |  |   | — |  |
|    Series B, no par value, authorized 250,000 shares, no shares issued and outstanding in 2014 and 2013                  |   | — |  |   | — |  |
| Common stock, no par value; authorized 2,500,000,000 shares, issued 21,973,183 shares in 2014 and 21,861,418 in 2013                    |   | 462,037 |  |   | 461,636 |  |
| Accumulated deficit                                                                                                                     |   | (362,393 | ) |   | (363,670 | ) |
| Accumulated other comprehensive loss                                                                                                    |   | (14,313 | ) |   | (17,605 | ) |
| Total Shareholders' Equity                                                                                                              |   | 85,331 |  |   | 80,361 |  |
| Total Liabilities and Shareholders' Equity                                                                                              |   | $ | 2,008,481 |  |   | $ | 1,985,032 |  |

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|                                                                   |  |  |  |  |  |  |  |
| (in thousands, except share and per share data)                   | Three Months Ended March 31, |
|                                                              | 2014 |   | 2013 |
| Interest Income                                                   |   |   |   |
| Interest and fees on loans                                        | $ | 14,081 |  |   | $ | 14,785 |  |
| Interest and dividends on investment securities:                  |   |   |   |
| Taxable income                                                    | 3,695 |  |   | 3,073 |  |
| Other interest income                                             | 151 |  |   | 212 |  |
| Total interest income                                             | 17,927 |  |   | 18,070 |  |
| Interest Expense                                                  |   |   |   |
| Deposits                                                          | 1,702 |  |   | 2,247 |  |
| Retail repurchase agreements                                      | 3 |  |   | 4 |  |
| Federal Home Loan Bank advances                                   | 469 |  |   | 382 |  |
| Other borrowed funds                                              | 274 |  |   | 264 |  |
| Total interest expense                                            | 2,448 |  |   | 2,897 |  |
| Net Interest Income before Provision for Loan Losses              | 15,479 |  |   | 15,173 |  |
| Provision for (recovery of) loan losses                           | (684 | ) |   | 110 |  |
| Net Interest Income after Provision for Loan Losses               | 16,163 |  |   | 15,063 |  |
| Noninterest Income                                                |   |   |   |
| Service charges on deposit accounts                               | 1,564 |  |   | 1,376 |  |
| Mortgage loan income                                              | 174 |  |   | 744 |  |
| Cardholder and merchant services income                           | 1,113 |  |   | 1,069 |  |
| Trust and investment services                                     | 358 |  |   | 241 |  |
| Bank-owned life insurance                                         | 252 |  |   | 263 |  |
| Other service charges, commissions and fees                       | 352 |  |   | 258 |  |
| Securities gains, net                                             | — |  |   | 2,377 |  |
| Other income                                                      | 130 |  |   | 205 |  |
| Total noninterest income                                          | 3,943 |  |   | 6,533 |  |
| Noninterest Expense                                               |   |   |   |
| Personnel expense                                                 | 10,393 |  |   | 10,679 |  |
| Net occupancy expense                                             | 1,553 |  |   | 1,831 |  |
| Furniture, equipment and data processing expense                  | 2,003 |  |   | 2,368 |  |
| Professional fees                                                 | 633 |  |   | 1,493 |  |
| Stationery, printing and supplies                                 | 162 |  |   | 186 |  |
| Advertising and marketing                                         | 153 |  |   | 665 |  |
| Other real estate owned expense                                   | 261 |  |   | 883 |  |
| Credit/debit card expense                                         | 595 |  |   | 425 |  |
| FDIC insurance                                                    | 639 |  |   | 670 |  |
| Loan collection expense                                           | 657 |  |   | 1,519 |  |
| Merger-related expense                                            | — |  |   | 1,509 |  |
| Core deposit intangible amortization                              | 352 |  |   | 352 |  |
| Other expense                                                     | 1,405 |  |   | 1,759 |  |
| Total noninterest expense                                         | 18,806 |  |   | 24,339 |  |
| Income (loss) before income taxes                                 | 1,300 |  |   | (2,743 | ) |
| Income tax expense                                                | 23 |  |   | 1,853 |  |
| Net income (loss)                                                 | $ | 1,277 |  |   | $ | (4,596 | ) |
|                                                              |   |   |   |
| Weighted average number of shares outstanding - basic and diluted | 21,935,566 |  |   | 21,698,115 |  |
| Net income (loss) per share - basic and diluted                   | 0.06 |  |   | (0.21 | ) |

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|                                                                                                           |  |  |  |  |  |  |  |
| (dollars in thousands)                                                                                    | Three Months Ended March 31, |
|                                                                                                      | 2014 |   | 2013 |
| Net income (loss)                                                                                         | 1,277 |  |   | (4,596 | ) |
| Other comprehensive income (loss):                                                                        |  |   |  |
| Unrealized holdings gains (losses) arising during the period on available-for-sale securities             | 5,291 |  |   | (4,934 | ) |
|  Tax effect                                                                                          | (2,024 | ) |   | 1,949 |  |
| Unrealized holdings gains (losses) arising during the period on available-for-sale securities, net of tax | 3,267 |  |   | (2,985 | ) |
| Reclassification adjustment for gain on available-for-sale securities included in net income              | — |  |   | (2,377 | ) |
|      Tax effect                                                                  | — |  |   | 939 |  |
| Reclassification adjustment for gain on available-for-sale securities included in net income, net of tax  | — |  |   | (1,438 | ) |
| Unrealized gain on interest rate swaps                                                                    | 41 |  |   | — |  |
| Tax effect                                                                                                | (16 | ) |   | — |  |
|     Unrealized gain on interest rate swaps, net of tax                                | 25 |  |   | — |  |
| Change in defined benefit plans liability                                                                 | — |  |   | (254 | ) |
| Tax effect                                                                                                | — |  |   | 100 |  |
| Change in defined benefit plans liability, net of tax                                                     | — |  |   | (154 | ) |
| Other comprehensive income (loss), net of tax                                                             | 3,292 |  |   | (4,577 | ) |
| Comprehensive income (loss)                                                                               | $ | 4,569 |  |   | $ | (9,173 | ) |

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|                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                      |   |   |   |   |   |   |   |   |   |   |   | Accumulated |   |   |
| (dollars in thousands, except share and per share data)   |   |   |   |   |   |   |   |   |   |   |   | Other |   |   |
|                                                      | Preferred Stock |   | Common Stock |   | Accumulated |   | Comprehensive |   |   |
|                                                      |   | Shares |   | Amount |   | Shares |   | Amount |   | Deficit |   | Income (Loss) |   | Total |
| Balance, December 31, 2012                                |   | — |  |   | $ | — |  |   | 21,698,115 |  |   | $ | 460,955 |  |   | $ | (362,187 | ) |   | $ | (323 | ) |   | $ | 98,445 |  |
| Comprehensive loss:                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                  |   | — |  |   | — |  |   | — |  |   | — |  |   | (4,596 | ) |   | — |  |   | (4,596 | ) |
| Other comprehensive income, net of tax                    |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | (4,577 | ) |   | (4,577 | ) |
| Total comprehensive loss                                  |   |   |   |   |   |   |   |   |   |   |   |   |   | (9,173 | ) |
| Stock options:                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Compensation expense recognized                           |   | — |  |   | — |  |   | — |  |   | 102 |  |   | — |  |   | — |  |   | 102 |  |
| Balance, March 31, 2013                                   |   | — |  |   | $ | — |  |   | 21,698,115 |  |   | $ | 461,057 |  |   | $ | (366,783 | ) |   | $ | (4,900 | ) |   | $ | 89,374 |  |
| Balance, December 31, 2013                                |   | — |  |   | $ | — |  |   | 21,861,418 |  |   | $ | 461,636 |  |   | $ | (363,670 | ) |   | $ | (17,605 | ) |   | $ | 80,361 |  |
| Comprehensive income:                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                |   | — |  |   | — |  |   | — |  |   | — |  |   | 1,277 |  |   | — |  |   | 1,277 |  |
| Other comprehensive income, net of tax                    |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 3,292 |  |   | 3,292 |  |
| Total comprehensive income                                |   |   |   |   |   |   |   |   |   |   |   |   |   | 4,569 |  |
| Stock options:                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Compensation expense recognized                           |   | — |  |   | — |  |   | — |  |   | 387 |  |   | — |  |   | — |  |   | 387 |  |
| Restricted stock:                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as compensation to directors                |   | — |  |   | — |  |   | 1,348 |  |   | 14 |  |   | — |  |   | — |  |   | 14 |  |
| Issuance of restricted stock awards, net of cancellations |   | — |  |   | — |  |   | 110,417 |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Balance, March 31, 2014                                   |   | — |  |   | $ | — |  |   | 21,973,183 |  |   | $ | 462,037 |  |   | $ | (362,393 | ) |   | $ | (14,313 | ) |   | $ | 85,331 |  |

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|                                                                                  |  |  |  |  |  |  |  |  |
|  (dollars in thousands)                                                     |   | Three Months Ended March 31, |
|                                                                             |   | 2014 |   | 2013 |
| Operating Activities                                                             |   |   |   |   |
| Net income (loss)                                                                |   | $ | 1,277 |  |   | $ | (4,596 | ) |
| Adjustments to reconcile net income (loss) to cash used in operating activities: |   |   |   |   |
| Depreciation and amortization of premises and equipment                          |   | 945 |  |   | 728 |  |
| Provision for (recovery of) loan losses                                          |   | (684 | ) |   | 110 |  |
| Deferred income taxes                                                            |   | 23 |  |   | 1,853 |  |
| Deferred loan fees and costs, net                                                |   | (279 | ) |   | 367 |  |
| Premium amortization and discount accretion of investment securities, net        |   | 667 |  |   | 1,386 |  |
| Net gain on sale of investment securities                                        |   | — |  |   | (2,377 | ) |
| Amortization of core deposit premiums                                            |   | 352 |  |   | 352 |  |
| Net accretion of purchase accounting adjustments                                 |   | (2,774 | ) |   | (4,419 | ) |
| Stock compensation expense                                                       |   | 401 |  |   | 102 |  |
| Increase in cash surrender value of bank-owned life insurance, net               |   | (270 | ) |   | (276 | ) |
| Loans held for sale:                                                             |   |   |   |   |
| Origination of loans held for sale                                               |   | (13,250 | ) |   | (30,954 | ) |
| Net proceeds from sale of loans held for sale                                    |   | 13,255 |  |   | 33,507 |  |
| Net gain on sale of loans held for sale                                          |   | (130 | ) |   | (591 | ) |
| Mortgage servicing rights capitalized                                            |   | (144 | ) |   | (348 | ) |
| Mortgage servicing rights amortization                                           |   | 109 |  |   | 46 |  |
| Net gain on sale of premises and equipment                                       |   | (11 | ) |   | — |  |
| Net loss on sales and write-downs of other real estate owned                     |   | 274 |  |   | 219 |  |
| Changes in assets and liabilities:                                               |   |   |   |   |
| Decrease in accrued interest receivable and other assets                         |   | 1,170 |  |   | 994 |  |
| Increase in accrued interest payable and other liabilities                       |   | 1,031 |  |   | 2,775 |  |
| Net cash used in operating activities                                            |   | 1,962 |  |   | (1,122 | ) |
| Investing Activities                                                             |   |   |   |   |
| Available-for-sale securities:                                                   |   |   |   |   |
| Proceeds from sales                                                              |   | — |  |   | 148,306 |  |
| Proceeds from maturities, calls and principal repayments                         |   | 16,871 |  |   | 20,971 |  |
| Purchases                                                                        |   | — |  |   | (103,093 | ) |
| Held-to-maturity securities:                                                     |   |   |   |   |
| Proceeds from maturities, calls and principal repayments                         |   | 2,634 |  |   | — |  |
| Purchases                                                                        |   | — |  |   | (73,524 | ) |
| Net (increase) decrease in loans held for investment                             |   | (3,125 | ) |   | 65,979 |  |
| Proceeds from sales of other real estate owned                                   |   | 2,075 |  |   | 17,614 |  |
| Purchases of premises and equipment                                              |   | (369 | ) |   | (505 | ) |
| Proceeds from sales of premises and equipment                                    |   | 25 |  |   | 37 |  |
| Net cash (used in) provided by investing activities                              |   | 18,111 |  |   | 75,785 |  |
| Financing Activities                                                             |   |   |   |   |
| Net increase (decrease) in deposits                                              |   | 19,225 |  |   | (50,595 | ) |
| Decrease in retail repurchase agreements                                         |   | (1,765 | ) |   | (1,374 | ) |
| Decrease in Federal Home Loan Bank advances                                      |   | (12 | ) |   | (11 | ) |
| Net cash used in financing activities                                            |   | 17,448 |  |   | (51,980 | ) |
| Net Increase in Cash and Cash Equivalents                                        |   | 37,521 |  |   | 22,683 |  |
| Cash and Cash Equivalents at Beginning of Period                                 |   | 67,430 |  |   | 239,610 |  |
| Cash and Cash Equivalents at End of Period                                       |   | $ | 104,951 |  |   | $ | 262,293 |  |
|                                                                             |   |   |   |   |
| Supplemental disclosure of cash flow information                                 |   |  |   |   |
| Cash paid during the period for:                                                 |   |   |   |   |
| Interest                                                                         |   | $ | 2,204 |  |   | $ | 2,754 |  |
| Noncash transactions:                                                            |   |   |   |   |
| Foreclosed loans transferred to other real estate owned                          |   | 268 |  |   | 3,969 |  |
| Loans to facilitate the sale of other real estate owned                          |   | 1,699 |  |   | 2,625 |  |
| Unrealized securities gains/(losses), net of income taxes                        |   | 3,267 |  |   | (4,423 | ) |
| Transfer of fixed assets to other assets                                         |   | 2,136 |  |   | — |  |
| Employee benefit plan costs, net of income taxes                                 |   | — |  |   | (154 | ) |
| Unrealized gains on interest rate swaps                                          |   | 25 |  |   | — |  |

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|                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| March 31, 2014                                  |   |   |   |   |   |   |   |   |
| (dollars in thousands)                               |   | Amortized Cost |   | Gross Unrealized Gains |   | Gross Unrealized Losses |   | Estimated Fair Value |
| Available-for-Sale:                                  |   |   |   |   |   |   |   |   |
| Obligations of:                                      |   |   |   |   |   |   |   |   |
| U.S. government sponsored enterprises                |   | $ | 2,045 |  |   | $ | 25 |  |   | $ | — |  |   | $ | 2,070 |  |
| Residential mortgage-backed securities-GSE           |   | 356,022 |  |   | 971 |  |   | 19,429 |  |   | 337,564 |  |
| Residential mortgage-backed securities-Private       |   | 19,338 |  |   | 953 |  |   | 9 |  |   | 20,282 |  |
| Commercial mortgage-backed securities-GSE            |   | 22,670 |  |   | — |  |   | 1,080 |  |   | 21,590 |  |
| Commercial mortgage-backed securities-Private        |   | 10,398 |  |   | — |  |   | 554 |  |   | 9,844 |  |
| Business Development Company investment              |   | 1,753 |  |   | 898 |  |   | — |  |   | 2,651 |  |
| Corporate notes                                      |   | 8,393 |  |   | 74 |  |   | — |  |   | 8,467 |  |
| Total available-for-sale                             |   | $ | 420,619 |  |   | $ | 2,921 |  |   | $ | 21,072 |  |   | $ | 402,468 |  |
| Held-to-Maturity:                                    |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities-GSE           |   | 138,991 |  |   | — |  |   | 7,564 |  |   | 131,427 |  |
| Commercial mortgage-backed securities-Private        |   | 10,069 |  |   | — |  |   | 494 |  |   | 9,575 |  |
|      Total held-to-maturity |   | $ | 149,060 |  |   | $ | — |  |   | $ | 8,058 |  |   | $ | 141,002 |  |
| Total investment securities                          |   | $ | 569,679 |  |   | $ | 2,921 |  |   | $ | 29,130 |  |   | $ | 543,470 |  |
|                                                 |   |   |   |   |   |   |   |   |
| December 31, 2013                               |   |   |   |   |   |   |   |   |
| (dollars in thousands)                               |   | Amortized Cost |   | Gross Unrealized Gains |   | Gross Unrealized Losses |   | Estimated Fair Value |
| Available-for-Sale:                                  |   |   |   |   |   |   |   |   |
| Obligations of:                                      |   |   |   |   |   |   |   |   |
| U.S. government sponsored enterprises                |   | $ | 2,051 |  |   | $ | 26 |  |   | $ | — |  |   | $ | 2,077 |  |
| Residential mortgage-backed securities-GSE           |   | 364,513 |  |   | 974 |  |   | 24,340 |  |   | 341,147 |  |
| Residential mortgage-backed securities-Private       |   | 19,770 |  |   | 982 |  |   | — |  |   | 20,752 |  |
| Commercial mortgage-backed securities-GSE            |   | 22,767 |  |   | — |  |   | 1,328 |  |   | 21,439 |  |
| Commercial mortgage-backed securities-Private        |   | 10,408 |  |   | — |  |   | 823 |  |   | 9,585 |  |
| Business Development Company investment              |   | 1,753 |  |   | 984 |  |   |   |   | 2,737 |  |
| Corporate notes                                      |   | 16,795 |  |   | 82 |  |   | — |  |   | 16,877 |  |
| Total available-for-sale                             |   | $ | 438,057 |  |   | $ | 3,048 |  |   | $ | 26,491 |  |   | $ | 414,614 |  |
| Held-to-Maturity:                                    |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities-GSE           |   | 141,724 |  |   | — |  |   | 9,907 |  |   | 131,817 |  |
| Commercial mortgage-backed securities-Private        |   | 10,071 |  |   | — |  |   | 763 |  |   | 9,308 |  |
|      Total held-to-maturity |   | $ | 151,795 |  |   | $ | — |  |   | $ | 10,670 |  |   | $ | 141,125 |  |
| Total investment securities                          |   | $ | 589,852 |  |   | $ | 3,048 |  |   | $ | 37,161 |  |   | $ | 555,739 |  |

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|                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                           | Less than 12 Months |   | 12 Months or More |   | Total |
| (dollars in thousands)                         | Estimated Fair Value | Gross Unrealized Losses |   | Estimated Fair Value | Gross Unrealized Losses |   | Estimated Fair Value | Gross Unrealized Losses |
| March 31, 2014                            |   |   |   |   |   |   |   |   |
| Available-for-Sale:                            |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities-GSE     | $ | 164,313 |  | $ | 8,975 |  |   | $ | 133,699 |  | $ | 10,454 |  |   | $ | 298,012 |  | $ | 19,429 |  |
| Residential mortgage-backed securities-Private | 1,297 |  | 9 |  |   | — |  | — |  |   | 1,297 |  | 9 |  |
| Commercial mortgage-backed securities-GSE      | — |  | — |  |   | 21,591 |  | 1,080 |  |   | 21,591 |  | 1,080 |  |
| Commercial mortgage-backed securities-Private  | 9,843 |  | 554 |  |   | — |  | — |  |   | 9,843 |  | 554 |  |
| Total available-for-sale                       | $ | 175,453 |  | $ | 9,538 |  |   | $ | 155,290 |  | $ | 11,534 |  |   | $ | 330,743 |  | $ | 21,072 |  |
| Held-to-Maturity:                              |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities-GSE     | $ | 131,427 |  | $ | 7,564 |  |   | $ | — |  | $ | — |  |   | $ | 131,427 |  | $ | 7,564 |  |
| Commercial mortgage-backed securities-Private  | 9,575 |  | 494 |  |   | — |  | — |  |   | 9,575 |  | 494 |  |
| Total held-to-maturity                         | $ | 141,002 |  | $ | 8,058 |  |   | $ | — |  | $ | — |  |   | $ | 141,002 |  | $ | 8,058 |  |
| Total                                          | $ | 316,455 |  | $ | 17,596 |  |   | $ | 155,290 |  | $ | 11,534 |  |   | $ | 471,745 |  | $ | 29,130 |  |
|                                           |   |   |   |   |   |   |   |   |
| December 31, 2013                         |   |   |   |   |   |   |   |   |
| Available-for-Sale                             |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities-GSE     | $ | 222,475 |  | $ | 16,585 |  |   | $ | 76,501 |  | $ | 7,755 |  |   | $ | 298,976 |  | $ | 24,340 |  |
| Commercial mortgage-backed securities-GSE      | — |  | — |  |   | 21,439 |  | 1,328 |  |   | 21,439 |  | 1,328 |  |
| Commercial mortgage-backed securities-Private  | 9,585 |  | 823 |  |   | — |  | — |  |   | 9,585 |  | 823 |  |
| Total available-for-sale                       | $ | 232,060 |  | $ | 17,408 |  |   | $ | 97,940 |  | $ | 9,083 |  |   | $ | 330,000 |  | $ | 26,491 |  |
| Held-to-Maturity:                              |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities-GSE     | $ | 131,817 |  | $ | 9,907 |  |   | $ | — |  | $ | — |  |   | $ | 131,817 |  | $ | 9,907 |  |
| Commercial mortgage-backed securities-Private  | 9,308 |  | 763 |  |   | — |  | — |  |   | 9,308 |  | 763 |  |
| Total held-to-maturity                         | $ | 141,125 |  | $ | 10,670 |  |   | $ | — |  | $ | — |  |   | $ | 141,125 |  | $ | 10,670 |  |
| Total                                          | $ | 373,185 |  | $ | 28,078 |  |   | $ | 97,940 |  | $ | 9,083 |  |  | $ | 471,125 |  | $ | 37,161 |  |

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Table of Contents

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                  |   | Available-for-Sale |   | Held-to-Maturity |
| (dollars in thousands)                |   | Amortized Cost |   | Estimated Fair Value |   | Amortized Cost |   | Estimated Fair Value |
| Due in one year or less               |   | $ | 8,393 |  |   | $ | 8,467 |  |   | $ | — |  |   | $ | — |  |
| Due after one year through five years |   | 2,045 |  |   | 2,070 |  |   | — |  |   | — |  |
| With no stated maturity               |   | 1,753 |  |   | 2,652 |  |   | — |  |   | — |  |
| Total                                 |   | 12,191 |  |   | 13,189 |  |   | — |  |   | — |  |
| Mortgage-backed securities            |   | 408,428 |  |   | 389,279 |  |   | 149,060 |  |   | 141,002 |  |
| Total                                 |   | $ | 420,619 |  |   | $ | 402,468 |  |   | $ | 149,060 |  |   | $ | 141,002 |  |

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Table of Contents

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)      |   | Accruing |   |   |   |   |   |   |   |   |
|                        |   | 30-59 days past due |   | 60-89 days past due |   | More than 90 days past due |   | Nonaccrual |   | Total past due and nonaccrual |   | Current and accruing |   | Total Loans |
| PC and Originated Loans     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial and agricultural |   | $ | 43 |  |   | $ | — |  |   | $ | — |  |   | $ | 450 |  |   | $ | 493 |  |   | $ | 65,763 |  |   | $ | 66,256 |  |
| Real estate - construction  |   | 68 |  |   | — |  |   | — |  |   | 3,437 |  |   | 3,505 |  |   | 52,599 |  |   | 56,104 |  |
| Real estate - mortgage:     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   | 4,130 |  |   | — |  |   | — |  |   | 10,151 |  |   | 14,281 |  |   | 597,094 |  |   | 611,375 |  |
| Commercial                  |   | 1,760 |  |   | 324 |  |   | 355 |  |   | 19,533 |  |   | 21,972 |  |   | 267,586 |  |   | 289,558 |  |
| Consumer                    |   | 68 |  |   | 3 |  |   | — |  |   | 32 |  |   | 103 |  |   | 47,356 |  |   | 47,459 |  |
| Total                       |   | $ | 6,069 |  |   | $ | 327 |  |   | $ | 355 |  |   | $ | 33,603 |  |   | $ | 40,354 |  |   | $ | 1,030,398 |  |   | $ | 1,070,752 |  |
| PI loans                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial and agricultural |   | $ | 97 |  |   | $ | — |  |   | $ | 2,354 |  |   | $ | — |  |   | $ | 2,451 |  |   | $ | 7,271 |  |   | $ | 9,722 |  |
| Real estate - construction  |   | 54 |  |   | — |  |   | 4,569 |  |   | — |  |   | 4,623 |  |   | 6,577 |  |   | 11,200 |  |
| Real estate - mortgage:     |   |   |   |   |   |  |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   | 137 |  |   | 195 |  |   | 2,366 |  |   | — |  |   | 2,698 |  |   | 17,701 |  |   | 20,399 |  |
| Commercial                  |   | 123 |  |   | — |  |   | 15,440 |  |   | — |  |   | 15,563 |  |   | 90,989 |  |   | 106,552 |  |
| Consumer                    |   | 2 |  |   | — |  |   | 13 |  |   | — |  |   | 15 |  |   | 1,145 |  |   | 1,160 |  |
| Total                       |   | $ | 413 |  |   | $ | 195 |  |   | $ | 24,742 |  |   | $ | — |  |   | $ | 25,350 |  |   | $ | 123,683 |  |   | $ | 149,033 |  |
| Total Loans                 |   | $ | 6,482 |  |   | $ | 522 |  |   | $ | 25,097 |  |   | $ | 33,603 |  |   | $ | 65,704 |  |   | $ | 1,154,081 |  |   | $ | 1,219,785 |  |

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Table of Contents

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)      |   | Accruing |   |   |   |   |   |   |   |   |
|                        |   | 30-59 days past due |   | 60-89 days past due |   | More than 90 days past due |   | Nonaccrual |   | Total past due and nonaccrual |   | Current and accruing |   | Total Loans |
| PC and Originated Loans     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial and agricultural |   | $ | 18 |  |   | $ | 43 |  |   | $ | — |  |   | $ | 516 |  |   | $ | 577 |  |   | $ | 60,946 |  |   | $ | 61,523 |  |
| Real estate - construction  |   | 168 |  |   | 634 |  |   | — |  |   | 4,677 |  |   | 5,479 |  |   | 48,711 |  |   | 54,190 |  |
| Real estate - mortgage:     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   | 3,454 |  |   | 522 |  |   | — |  |   | 11,580 |  |   | 15,556 |  |   | 593,698 |  |   | 609,254 |  |
| Commercial                  |   | 1,765 |  |   | 77 |  |   | — |  |   | 18,380 |  |   | 20,222 |  |   | 261,524 |  |   | 281,746 |  |
| Consumer                    |   | 56 |  |   | 17 |  |   | — |  |   | 12 |  |   | 85 |  |   | 43,798 |  |   | 43,883 |  |
| Total                       |   | $ | 5,461 |  |   | $ | 1,293 |  |   | $ | — |  |   | $ | 35,165 |  |   | $ | 41,919 |  |   | $ | 1,008,677 |  |   | $ | 1,050,596 |  |
| PI loans                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial and agricultural |   | $ | 35 |  |   | $ | 16 |  |   | $ | 1,977 |  |   | $ | — |  |   | $ | 2,028 |  |   | $ | 8,701 |  |   | $ | 10,729 |  |
| Real estate - construction  |   | 48 |  |   | — |  |   | 2,758 |  |   | — |  |   | 2,806 |  |   | 7,087 |  |   | 9,893 |  |
| Real estate - mortgage:     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   | 135 |  |   | 9 |  |   | 2,907 |  |   | — |  |   | 3,051 |  |   | 23,802 |  |   | 26,853 |  |
| Commercial                  |   | 903 |  |   | — |  |   | 17,479 |  |   | — |  |   | 18,382 |  |   | 94,796 |  |   | 113,178 |  |
| Consumer                    |   | 6 |  |   | — |  |   | 12 |  |   | — |  |   | 18 |  |   | 981 |  |   | 999 |  |
| Total                       |   | $ | 1,127 |  |   | $ | 25 |  |   | $ | 25,133 |  |   | $ | — |  |   | $ | 26,285 |  |   | $ | 135,367 |  |   | $ | 161,652 |  |
| Total Loans                 |   | $ | 6,588 |  |   | $ | 1,318 |  |   | $ | 25,133 |  |   | $ | 35,165 |  |   | $ | 68,204 |  |   | $ | 1,144,044 |  |   | $ | 1,212,248 |  |

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|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)      |   | Pass |   | Special Mention |   | Substandard |   | Doubtful |   |   |
|                        |   | (Ratings 1-5) |   | (Rating 6) |   | (Rating 7) |   | (Rating 8) |   | Total |
| Commercial and agricultural |   | $ | 70,782 |  |   | $ | 1,180 |  |   | $ | 4,016 |  |   | $ | — |  |   | $ | 75,978 |  |
| Real estate - construction  |   | 54,331 |  |   | 3,275 |  |   | 9,698 |  |   | — |  |   | 67,304 |  |
| Real estate - mortgage:     |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   | 601,449 |  |   | 9,234 |  |   | 21,091 |  |   | — |  |   | 631,774 |  |
| Commercial                  |   | 310,951 |  |   | 29,466 |  |   | 55,693 |  |   | — |  |   | 396,110 |  |
| Consumer                    |   | 48,205 |  |   | 39 |  |   | 66 |  |   | 309 |  |   | 48,619 |  |
| Total                       |   | $ | 1,085,718 |  |   | $ | 43,194 |  |   | $ | 90,564 |  |   | $ | 309 |  |   | $ | 1,219,785 |  |

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)      |   | Pass |   | Special Mention |   | Substandard |   | Doubtful |   |   |
|                        |   | (Ratings 1-5) |   | (Rating 6) |   | (Rating 7) |   | (Rating 8) |   | Total |
| Commercial and agricultural |   | $ | 67,277 |  |   | $ | 1,262 |  |   | $ | 3,713 |  |   | $ | — |  |   | $ | 72,252 |  |
| Real estate - construction  |   | 50,138 |  |   | 3,984 |  |   | 9,961 |  |   | — |  |   | 64,083 |  |
| Real estate - mortgage:     |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   | 601,304 |  |   | 10,887 |  |   | 23,916 |  |   | — |  |   | 636,107 |  |
| Commercial                  |   | 307,661 |  |   | 29,711 |  |   | 57,552 |  |   | — |  |   | 394,924 |  |
| Consumer                    |   | 44,450 |  |   | 40 |  |   | 47 |  |   | 345 |  |   | 44,882 |  |
| Total                       |   | $ | 1,070,830 |  |   | $ | 45,884 |  |   | $ | 95,189 |  |   | $ | 345 |  |   | $ | 1,212,248 |  |

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Table of Contents

|         |                                                     |
|---------|-----------------------------------------------------|
| • | If unsecured, the loan must be charged off in full. |

|         |                                                                                                                                  |
|---------|----------------------------------------------------------------------------------------------------------------------------------|
| • | If secured, the outstanding principal balance of the loan should be charged down to the net liquidation value of the collateral. |

|         |                                                                                                                                        |
|---------|----------------------------------------------------------------------------------------------------------------------------------------|
| • | No regularly scheduled payment has been made within four months and the determination is made that any further payment is unlikely, or |

|         |                                                                                                                                                                               |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The loan is unsecured, the borrower has filed for bankruptcy protection and there is no other (guarantor, etc.) support from an entity outside of the bankruptcy proceedings. |

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|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                      |   | March 31, 2014 |   | December 31, 2013 |
| (dollars in thousands)                                    |   | Balance |   | Associated Reserves |   | Balance |   | Associated Reserves |
| Impaired loans, not individually reviewed for impairment  |   | $ | 4,670 |  |   | $ | — |  |   | $ | 4,612 |  |   | $ | — |  |
| Impaired loans, individually reviewed, with no impairment |   | 33,317 |  |   | — |  |   | 39,865 |  |   | — |  |
| Impaired loans, individually reviewed, with impairment    |   | 8,112 |  |   | 1,119 |  |   | 2,965 |  |   | 927 |  |
| Total impaired loans, excluding purchased impaired *      |   | $ | 46,099 |  |   | $ | 1,119 |  |   | $ | 47,442 |  |   | $ | 927 |  |
|                                                      |   |   |   |   |   |   |   |   |
| Purchased impaired loans with subsequent deterioration    |   | $ | 138,789 |  |   | 5,237 |  |   | $ | 161,307 |  |   | 5,560 |  |
| Purchased impaired loans with no subsequent deterioration |   | $ | 10,244 |  |   | — |  |   | $ | 344 |  |   | — |  |
| Total Reserves                                            |   |   |   | $ | 6,356 |  |   |   |   | $ | 6,487 |  |
|                                                      |   |   |   |   |   |   |   |   |
| Average impaired loans calculated using a simple average  |   | $ | 46,771 |  |   |   |   | $ | 65,527 |  |   |   |

|                                                                                                                                              |
|----------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                              |  |  |  |  |  |  |  |  |
| * Included at March 31, 2014 and December 31, 2013 were $12.5 million and $12.1 million, respectively, in restructured and performing loans. |

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |
| (dollars in thousands)                               |   |   |   |   |
|                                                 |   | March 31, 2014 |   | December 31, 2013 |
| Loans held for investment:                           |   |   |   |   |
| Commercial and agricultural                          |   | $ | 450 |  |   | $ | 516 |  |
| Real estate - construction                           |   | 3,437 |  |   | 4,677 |  |
| Real estate - mortgage:                              |   |   |   |   |
| 1-4 family residential                               |   | 10,151 |  |   | 11,580 |  |
| Commercial                                           |   | 19,533 |  |   | 18,380 |  |
| Consumer                                             |   | 32 |  |   | 12 |  |
| Total nonaccrual loans                               |   | $ | 33,603 |  |   | $ | 35,165 |  |
| Loans more than 90 days delinquent, still on accrual |   | 355 |  |   | — |  |
| Total nonperforming loans                            |   | $ | 33,958 |  |   | $ | 35,165 |  |

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Table of Contents

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                 |   |   |   | Unpaid |   |   |
| (dollars in thousands)                               |   | Recorded |   | Principal |   | Related |
|                                                 |   | Investment |   | Balance |   | Allowance |
| With no related allowance recorded:                  |   |   |   |   |   |   |
|   Commercial and agricultural              |   | $ | 242 |  |   | $ | 485 |  |   | $ | — |  |
|   Real estate - construction               |   | 2,677 |  |   | 3,195 |  |   | — |  |
|   Real estate - mortgage:                  |   |   |   |   |   |   |
| 1-4 family residential                               |   | 9,064 |  |   | 11,740 |  |   | — |  |
| Commercial                                           |   | 21,334 |  |   | 25,856 |  |   | — |  |
|   Consumer                                 |   | — |  |   | — |  |   | — |  |
| Total                                                |   | $ | 33,317 |  |   | $ | 41,276 |  |   | $ | — |  |
| With an allowance recorded:                          |   |   |   |   |   |   |
|   Commercial and agricultural              |   | $ | — |  |   | $ | — |  |   | $ | — |  |
|   Real estate - construction               |   | 648 |  |   | 956 |  |   | 73 |  |
|   Real estate - mortgage:                  |   |   |   |   |   |   |
| 1-4 family residential                               |   | 3,920 |  |   | 4,207 |  |   | 561 |  |
| Commercial                                           |   | 3,544 |  |   | 4,555 |  |   | 485 |  |
|   Consumer                                 |   | — |  |   | — |  |   | — |  |
| Total                                                |   | $ | 8,112 |  |   | $ | 9,718 |  |   | $ | 1,119 |  |
| Total individually evaluated impaired loans          |   |   |   |   |   |   |
|   Commercial and agricultural              |   | $ | 242 |  |   | $ | 485 |  |   | $ | — |  |
|   Real estate - construction               |   | 3,325 |  |   | 4,151 |  |   | 73 |  |
|   Real estate - mortgage:                  |   |   |   |   |   |   |
| 1-4 family residential                               |   | 12,984 |  |   | 15,947 |  |   | 561 |  |
| Commercial                                           |   | 24,878 |  |   | 30,411 |  |   | 485 |  |
|   Consumer                                 |   | — |  |   | — |  |   | — |  |
| Total                                                |   | $ | 41,429 |  |   | $ | 50,994 |  |   | $ | 1,119 |  |
|                                                 |   |   |   |   |   |   |
| PI loans with subsequent credit deterioration:       |   |   |   |   |   |   |
|   Commercial and agricultural              |   | $ | 5,425 |  |   | $ | 4,278 |  |   | $ | 638 |  |
|   Real estate - construction               |   | 9,946 |  |   | 10,919 |  |   | 1,148 |  |
|   Real estate - mortgage:                  |   |   |   |   |   |   |
|      1-4 family residential |   | 16,031 |  |   | 17,460 |  |   | 390 |  |
|      Commercial             |   | 106,248 |  |   | 114,322 |  |   | 2,871 |  |
|   Consumer                                 |   | 1,139 |  |   | 737 |  |   | 190 |  |
| Total                                                |   | $ | 138,789 |  |   | $ | 147,716 |  |   | $ | 5,237 |  |

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Table of Contents

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                 |   |   |   | Unpaid |   |   |
| (dollars in thousands)                               |   | Recorded |   | Principal |   | Related |
|                                                 |   | Investment |   | Balance |   | Allowance |
| With no related allowance recorded:                  |   |   |   |   |   |   |
|   Commercial and agricultural              |   | $ | 398 |  |   | $ | 643 |  |   | $ | — |  |
|   Real estate - construction               |   | 4,734 |  |   | 8,893 |  |   | — |  |
|   Real estate - mortgage:                  |   |   |   |   |   |   |
| 1-4 family residential                               |   | 11,154 |  |   | 14,431 |  |   | — |  |
| Commercial                                           |   | 23,579 |  |   | 28,905 |  |   | — |  |
|   Consumer                                 |   | — |  |   | — |  |   | — |  |
| Total                                                |   | $ | 39,865 |  |   | $ | 52,872 |  |   | $ | — |  |
| With an allowance recorded:                          |   |   |   |   |   |   |
|   Commercial and agricultural              |   | $ | — |  |   | $ | — |  |   | $ | — |  |
|   Real estate - construction               |   | — |  |   | — |  |   | — |  |
|   Real estate - mortgage:                  |   |   |   |   |   |   |
| 1-4 family residential                               |   | 2,965 |  |   | 3,032 |  |   | 927 |  |
| Commercial                                           |   | — |  |   | — |  |   | — |  |
|   Consumer                                 |   | — |  |   | — |  |   | — |  |
| Total                                                |   | $ | 2,965 |  |   | $ | 3,032 |  |   | $ | 927 |  |
| Total individually evaluated impaired loans          |   |   |   |   |   |   |
|   Commercial and agricultural              |   | $ | 398 |  |   | $ | 643 |  |   | $ | — |  |
|   Real estate - construction               |   | 4,734 |  |   | 8,893 |  |   | — |  |
|   Real estate - mortgage:                  |   |   |   |   |   |   |
| 1-4 family residential                               |   | 14,119 |  |   | 17,463 |  |   | 927 |  |
| Commercial                                           |   | 23,579 |  |   | 28,905 |  |   | — |  |
|   Consumer                                 |   | — |  |   | — |  |   | — |  |
| Total                                                |   | $ | 42,830 |  |   | $ | 55,904 |  |   | $ | 927 |  |
| PI loans with subsequent credit deterioration:       |   |   |   |   |   |   |
|   Commercial and agricultural              |   | $ | 10,729 |  |   | $ | 10,344 |  |   | $ | 382 |  |
|   Real estate - construction               |   | 9,792 |  |   | 11,216 |  |   | 1,015 |  |
|   Real estate - mortgage:                  |   |   |   |   |   |   |
|      1-4 family residential |   | 26,628 |  |   | 28,143 |  |   | 724 |  |
|      Commercial             |   | 113,178 |  |   | 121,813 |  |   | 3,251 |  |
|   Consumer                                 |   | 980 |  |   | 785 |  |   | 188 |  |
| Total                                                |   | $ | 161,307 |  |   | $ | 172,301 |  |   | $ | 5,560 |  |

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Table of Contents

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                    |   | For Three Months Ended |   | For Three Months Ended |
|                                    |   | March 31, 2014 |   | March 31, 2013 |
|                                    |   | Average |   | Interest |   | Average |   | Interest |
| (dollars in thousands)                  |   | Recorded |   | Income |   | Recorded |   | Income |
|                                    |   | Investment |   | Recognized |   | Investment |   | Recognized |
| With no related allowance recorded:     |   |   |   |   |   |   |   |   |
|   Commercial and agricultural |   | $ | 242 |  |   | $ | — |  |   | $ | 886 |  |   | $ | — |  |
|   Real estate - construction  |   | 2,688 |  |   | 10 |  |   | 9,233 |  |   | — |  |
|   Real estate - mortgage:     |   |   |   |   |   |   |   |   |
| 1-4 family residential                  |   | 9,050 |  |   | 28 |  |   | 13,472 |  |   | 26 |  |
| Commercial                              |   | 21,503 |  |   | 89 |  |   | 34,010 |  |   | 87 |  |
|   Consumer                    |   | — |  |   | — |  |   | — |  |   | — |  |
| Total                                   |   | $ | 33,483 |  |   | $ | 127 |  |   | $ | 57,601 |  |   | $ | 113 |  |
| With an allowance recorded:             |   |   |   |   |   |   |   |   |
|   Commercial and agricultural |   | $ | — |  |   | $ | — |  |   | $ | 917 |  |   | $ | 5 |  |
|   Real estate - construction  |   | 650 |  |   | 2 |  |   | 2,111 |  |   | — |  |
|   Real estate - mortgage:     |   |   |   |   |   |   |   |   |
| 1-4 family residential                  |   | 3,829 |  |   | 19 |  |   | 4,666 |  |   | 8 |  |
| Commercial                              |   | 3,552 |  |   | 30 |  |   | 8,663 |  |   | 4 |  |
|   Consumer                    |   | — |  |   | — |  |   | — |  |   | — |  |
| Total                                   |   | $ | 8,031 |  |   | $ | 51 |  |   | $ | 16,357 |  |   | $ | 17 |  |
| Total:                                  |   |   |   |   |   |   |   |   |
|   Commercial and agricultural |   | $ | 242 |  |   | $ | — |  |   | $ | 1,803 |  |   | $ | 5 |  |
|   Real estate - construction  |   | 3,338 |  |   | 12 |  |   | 11,344 |  |   | — |  |
|   Real estate - mortgage:     |   |   |   |   |   |   |   |   |
| 1-4 family residential                  |   | 12,879 |  |   | 47 |  |   | 18,138 |  |   | 34 |  |
| Commercial                              |   | 25,055 |  |   | 119 |  |   | 42,673 |  |   | 91 |  |
|   Consumer                    |   | — |  |   | — |  |   | — |  |   | — |  |
| Total                                   |   | $ | 41,514 |  |   | $ | 178 |  |   | $ | 73,958 |  |   | $ | 130 |  |

|        |
|--------|
|        |  |  |  |  |  |  |  |  |
|   |   |   |   |   |   |   |   |   |

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|--------|
|        |  |  |  |  |  |  |  |  |  |  |  |
|   |   |   |   |   |   |   |   |   |   |   |   |

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|        |  |  |  |  |  |  |  |  |  |  |  |
|   |   |   |   |   |   |   |   |   |   |   |   |

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Table of Contents

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                            |   | At March 31, 2014 |
| (dollars in thousands)                          |   | Purchased Impaired |   | Purchased Contractual |   | Total Purchased Loans |   | UnpaidPrincipalBalance |
| Commercial and agricultural                     |   | $ | 9,722 |  |   | $ | 4,044 |  |   | $ | 13,766 |  |   | $ | 12,654 |  |
| Real estate - construction                      |   | 11,200 |  |   | — |  |   | 11,200 |  |   | 12,218 |  |
| Real estate - mortgage:                         |   |   |   |   |   |   |   |   |
|    1-4 family residential        |   | 20,399 |  |   | 25,041 |  |   | 45,440 |  |   | 47,829 |  |
|    Commercial                    |   | 106,552 |  |   | 365 |  |   | 106,917 |  |   | 114,984 |  |
| Consumer                                        |   | 1,160 |  |   | — |  |   | 1,160 |  |   | 766 |  |
|        Total |   | $ | 149,033 |  |   | $ | 29,450 |  |   | $ | 178,483 |  |   | $ | 188,451 |  |

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                            |   | At December 31, 2013 |
| (dollars in thousands)                          |   | Purchased Impaired |   | Purchased Contractual |   | TotalPurchased Loans |   | UnpaidPrincipalBalance |
| Commercial and agricultural                     |   | $ | 10,729 |  |   | $ | 5,948 |  |   | $ | 16,677 |  |   | $ | 16,452 |  |
| Real estate - construction                      |   | 9,892 |  |   | — |  |   | 9,892 |  |   | 11,368 |  |
| Real estate - mortgage:                         |   |   |   |   |   |   |   |   |
|    1-4 family residential        |   | 26,854 |  |   | 22,127 |  |   | 48,981 |  |   | 51,359 |  |
|    Commercial                    |   | 113,178 |  |   | 373 |  |   | 113,551 |  |   | 122,197 |  |
| Consumer                                        |   | 998 |  |   | — |  |   | 998 |  |   | 798 |  |
|        Total |   | $ | 161,651 |  |   | $ | 28,448 |  |   | $ | 190,099 |  |   | $ | 202,174 |  |

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Table of Contents

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                  |   | For Three Months Ended |   | For Three Months Ended |
|                                                  |   | March 31, 2014 |   | March 31, 2013 |
|                                                  |   | Purchased Impaired |   | Purchased Impaired |
| (dollars in thousands)                                |   | Carrying Amount |   | FutureAccretion |   | Carrying Amount |   | Future Accretion |
| Balance, beginning of period                          |   | $ | 161,651 |  |   | $ | 29,987 |  |   | $ | 228,392 |  |   | $ | 30,299 |  |
|   Accretion                                 |   | 2,665 |  |   | (2,665 | ) |   | 4,203 |  |   | (4,203 | ) |
|   Increase in future accretion              |   | — |  |   | 1,005 |  |   | — |  |   | — |  |
|   Reclassification of loans and adjustments |   | (4,180 | ) |   | — |  |   | — |  |   | — |  |
|   Payments received                         |   | (11,081 | ) |   | — |  |   | (25,928 | ) |   | — |  |
|   Foreclosed and transferred to OREO        |   | (22 | ) |   | — |  |   | (783 | ) |   | — |  |
| Subtotal before allowance                             |   | 149,033 |  |   | 28,327 |  |   | 205,884 |  |   | 26,096 |  |
| Allowance for credit losses                           |   | (5,237 | ) |   | — |  |   | (5,373 | ) |   | — |  |
| Net carrying amount, end of period                    |   | $ | 143,796 |  |   | $ | 28,327 |  |   | $ | 200,511 |  |   | $ | 26,096 |  |

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|--------|
|        |  |  |  |  |  |  |  |  |
|   |   |   |   |   |   |   |   |   |

----

Table of Contents

|                                                                            |
|----------------------------------------------------------------------------|
|                                                                            |  |  |  |  |  |  |  |  |
|                                                                       |   | For Three Months Ended |
| (dollars in thousands)                                                     |   | March 31, 2014 |   | March 31, 2013 |
| Balance, beginning of period                                               |   | $ | 26,785 |  |   | $ | 29,314 |  |
| Provision for (recovery of) losses charged to continuing operations        |   | (684 | ) |   | 110 |  |
| Net recoveries (charge-offs):                                              |   |   |   |   |
| Charge-offs                                                                |   | (1,977 | ) |   | (3,010 | ) |
| Recoveries                                                                 |   | 1,915 |  |   | 3,227 |  |
| Net recoveries (charge-offs)                                               |   | (62 | ) |   | 217 |  |
| Balance, end of period                                                     |   | $ | 26,039 |  |   | $ | 29,641 |  |
| Annualized net charge-offs (recoveries) during the period to average loans |   | 0.02 | % |   | (0.08 | )% |
| Annualized net charge-offs (recoveries) during the period to ALL           |   | 0.97 | % |   | (2.93 | )% |
| Allowance for loan losses to loans held for investment                     |   | 2.13 | % |   | 2.66 |  % |

|                        |
|------------------------|
|                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                   |   |   |   |   |   | Real Estate - Mortgage |   |   |   |   |
| (dollars in thousands) |   | Commercial and Agricultural |   | Real Estate - Construction |   | 1-4 Family Residential |   | Commercial |   | Consumer |   | Total |
|                        |   |   |   |   |   |   |   |   |   |   |   |   |
| ALL:                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning balance      |   | $ | 2,931 |  |   | $ | 5,233 |  |   | $ | 8,869 |  |   | $ | 7,195 |  |   | $ | 2,557 |  |   | $ | 26,785 |  |
| Charge-offs            |   | (389 | ) |   | (533 | ) |   | (484 | ) |   | (66 | ) |   | (505 | ) |   | (1,977 | ) |
| Recoveries             |   | 392 |  |   | 964 |  |   | 235 |  |   | 66 |  |   | 258 |  |   | 1,915 |  |
| Provision              |   | 507 |  |   | (356 | ) |   | (697 | ) |   | (229 | ) |   | 91 |  |   | (684 | ) |
| Ending balance         |   | $ | 3,441 |  |   | $ | 5,308 |  |   | $ | 7,923 |  |   | $ | 6,966 |  |   | $ | 2,401 |  |   | $ | 26,039 |  |

|                        |
|------------------------|
|                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                   |   |   |   |   |   | Real Estate - Mortgage |   |   |   |   |
| (dollars in thousands) |   | Commercial and Agricultural |   | Real Estate - Construction |   | 1-4 Family Residential |   | Commercial |   | Consumer |   | Total |
| ALL:                   |   |   |   |   |   |   |   |   |   |   |   |   |
|                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning balance      |   | $ | 3,238 |  |   | $ | 4,987 |  |   | $ | 8,701 |  |   | $ | 9,627 |  |   | $ | 2,761 |  |   | $ | 29,314 |  |
| Charge-offs            |   | (319 | ) |   | (344 | ) |   | (632 | ) |   | (891 | ) |   | (824 | ) |   | (3,010 | ) |
| Recoveries             |   | 278 |  |   | 796 |  |   | 185 |  |   | 932 |  |   | 1,036 |  |   | 3,227 |  |
| Provision              |   | 176 |  |   | 155 |  |   | 549 |  |   | (377 | ) |   | (393 | ) |   | 110 |  |
| Ending balance         |   | $ | 3,373 |  |   | $ | 5,594 |  |   | $ | 8,803 |  |   | $ | 9,291 |  |   | $ | 2,580 |  |   | $ | 29,641 |  |

|        |
|--------|
|        |  |  |  |  |  |  |  |  |  |  |  |  |
|   |   |   |   |   |   |   |   |   |   |   |   |   |

|        |
|--------|
|        |  |  |  |  |  |  |  |  |  |  |  |  |
|   |   |   |   |   |   |   |   |   |   |   |   |   |

----

Table of Contents

|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                      |   |   |   |   |   | Real Estate - Mortgage |   |   |   |   |
| (dollars in thousands)                                    |   | Commercial and Agricultural |   | Real Estate - Construction |   | 1-4 Family Residential |   | Commercial |   | Consumer |   | Total |
| ALL:                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
|   Individually evaluated for impairment         |   | $ | — |  |   | $ | 73 |  |   | $ | 561 |  |   | $ | 485 |  |   | $ | — |  |   | $ | 1,119 |  |
|   Collectively evaluated for impairment         |   | 2,803 |  |   | 4,087 |  |   | 6,972 |  |   | 3,610 |  |   | 2,211 |  |   | 19,683 |  |
|   PI loans evaluated for credit impairment      |   | 638 |  |   | 1,148 |  |   | 390 |  |   | 2,871 |  |   | 190 |  |   | 5,237 |  |
|   PI loans with no credit deterioration         |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Total ALL                                                 |   | $ | 3,441 |  |   | $ | 5,308 |  |   | $ | 7,923 |  |   | $ | 6,966 |  |   | $ | 2,401 |  |   | $ | 26,039 |  |
| Loans held for investment                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|   Individually evaluated for impairment         |   | $ | 242 |  |   | $ | 3,326 |  |   | $ | 12,997 |  |   | $ | 24,878 |  |   | $ | — |  |   | $ | 41,443 |  |
|   Collectively evaluated for impairment         |   | 66,014 |  |   | 52,778 |  |   | 598,378 |  |   | 264,680 |  |   | 47,459 |  |   | 1,029,309 |  |
|   PI loans with subsequent credit deterioration |   | 5,425 |  |   | 9,946 |  |   | 16,031 |  |   | 106,248 |  |   | 1,139 |  |   | 138,789 |  |
|   PI loans with no credit deterioration         |   | 4,297 |  |   | 1,254 |  |   | 4,368 |  |   | 304 |  |   | 21 |  |   | 10,244 |  |
| Total loans                                               |   | $ | 75,978 |  |   | $ | 67,304 |  |   | $ | 631,774 |  |   | $ | 396,110 |  |   | $ | 48,619 |  |   | $ | 1,219,785 |  |

|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                      |   |   |   |   |   | Real Estate - Mortgage |   |   |   |   |
| (dollars in thousands)                                    |   | Commercial and Agricultural |   | Real Estate - Construction |   | 1-4 Family Residential |   | Commercial |   | Consumer |   | Total |
| ALL:                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
|   Individually evaluated for impairment         |   | $ | — |  |   | $ | — |  |   | $ | 927 |  |   | $ | — |  |   | $ | — |  |   | $ | 927 |  |
|   Collectively evaluated for impairment         |   | 2,549 |  |   | 4,218 |  |   | 7,218 |  |   | 3,944 |  |   | 2,369 |  |   | 20,298 |  |
|   PI loans evaluated for credit impairment      |   | 382 |  |   | 1,015 |  |   | 724 |  |   | 3,251 |  |   | 188 |  |   | 5,560 |  |
|   PI loans with no credit deterioration         |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Total ALL                                                 |   | $ | 2,931 |  |   | $ | 5,233 |  |   | $ | 8,869 |  |   | $ | 7,195 |  |   | $ | 2,557 |  |   | $ | 26,785 |  |
| Loans held for investment                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|   Individually evaluated for impairment         |   | $ | 398 |  |   | $ | 4,734 |  |   | $ | 14,119 |  |   | $ | 23,579 |  |   | $ | — |  |   | $ | 42,830 |  |
|   Collectively evaluated for impairment         |   | 61,125 |  |   | 49,457 |  |   | 595,135 |  |   | 258,167 |  |   | 43,883 |  |   | 1,007,767 |  |
|   PI loans with subsequent credit deterioration |   | 10,729 |  |   | 9,792 |  |   | 26,628 |  |   | 113,178 |  |   | 980 |  |   | 161,307 |  |
|   PI loans with no credit deterioration         |   | — |  |   | 100 |  |   | 225 |  |   | — |  |   | 19 |  |   | 344 |  |
| Total loans                                               |   | $ | 72,252 |  |   | $ | 64,083 |  |   | $ | 636,107 |  |   | $ | 394,924 |  |   | $ | 44,882 |  |   | $ | 1,212,248 |  |

----

Table of Contents

|                                          |
|------------------------------------------|
|                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                     |   | For Three Months Ended March 31, 2014 |   | For Three Months Ended March 31, 2013 |
|                                     |   |   |   | Pre-Modification |   | Post-Modification |   |   |   | Pre-Modification |   | Post-Modification |
|                                     |   |   |   | Outstanding |   | Outstanding |   |   |   | Outstanding |   | Outstanding |
| (dollars in thousands)                   |   | Number |   | Recorded |   | Recorded |   | Number |   | Recorded |   | Recorded |
|                                     |   | of Loans |   | Investment |   | Investment |   | of Loans |   | Investment |   | Investment |
| Commercial and agricultural              |   | 1 |  |   | $ | 11 |  |   | $ | 11 |  |   | — |  |   | $ | — |  |   | $ | — |  |
| Real estate - construction               |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Real estate - mortgage:                  |   |   |   |   |   |   |   |   |   |   |   |   |
|    1-4 family residential |   | 5 |  |   | 735 |  |   | 732 |  |   | 4 |  |   | 1,777 |  |   | 1,773 |  |
|    Commercial             |   | — |  |   | — |  |   | — |  |   | 1 |  |   | 1,151 |  |   | 807 |  |
| Consumer                                 |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
|     Total            |   | 6 |  |   | $ | 746 |  |   | $ | 743 |  |   | 5 |  |   | $ | 2,928 |  |   | $ | 2,580 |  |

|        |
|--------|
|        |  |  |  |  |  |  |  |  |  |  |  |  |
|   |   |   |   |   |   |   |   |   |   |   |   |   |

|         |                                                                                  |
|---------|----------------------------------------------------------------------------------|
| • | Straight Lines of Credit - Unfunded balance of line of credit (100% utilization) |

|         |                                                                                                   |
|---------|---------------------------------------------------------------------------------------------------|
| • | Revolving Lines of Credit - Average Utilization (for the last 12 months) less Current Utilization |

|         |                                         |
|---------|-----------------------------------------|
| • | Letters of Credit - 10% utilization |

|                                                   |
|---------------------------------------------------|
|                                                   |  |  |  |  |  |  |  |  |
| (dollars in thousands)                            |   | March 31, 2014 |   | December 31, 2013 |  |
| Real estate acquired in settlement of loans       |   | $ | 24,573 |  |   | $ | 28,353 |  |
| Personal property acquired in settlement of loans |   | 51 |  |   | 42 |  |
| Total property acquired in settlement of loans    |   | $ | 24,624 |  |   | $ | 28,395 |  |

|                                                                    |
|--------------------------------------------------------------------|
|                                                                    |  |  |  |  |  |  |  |  |
|                                                               |   | For Three Months Ended |
| (dollars in thousands)                                             |   | March 31, 2014 |   | March 31, 2013 |
| Real estate acquired in settlement of loans, beginning of period   |   | $ | 28,353 |  |   | $ | 62,796 |  |
| Plus:  New real estate acquired in settlement of loans             |   | 268 |  |   | 3,969 |  |
| Less:  Sales of real estate acquired in settlement of loans        |   | (3,774 | ) |   | (20,239 | ) |
| Less:  Write-downs and net gain (loss) on sales charged to expense |   | (274 | ) |   | (219 | ) |
| Real estate acquired in settlement of loans, end of period         |   | $ | 24,573 |  |   | $ | 46,307 |  |

|        |
|--------|
|        |  |  |  |  |
|   |   |   |   |   |

|                                                                   |
|-------------------------------------------------------------------|
|                                                                   |  |  |  |  |  |  |  |  |
| (dollars in thousands, except per share data)                     |   | For Three Months Ended |
|                                                              |   | March 31, 2014 |   | March 31, 2013 |
| Net income (loss)                                                 |   | $ | 1,277 |  |   | $ | (4,596 | ) |
| Weighted average number of shares outstanding - basic and diluted |   | 21,935,566 |  |   | 21,698,115 |  |
| Net income (loss) per share - basic and diluted                   |   | $ | 0.06 |  |   | $ | (0.21 | ) |

----

Table of Contents

|                                                                      |
|----------------------------------------------------------------------|
|                                                                      |  |  |  |  |  |  |  |  |
|                                                                 |   | Gain (Loss) Recognized |
| (dollars in thousands)                                               |   | For Three Months Ended |
|                                                                 |   | March 31, 2014 |   | March 31, 2013 |
| Derivatives designated as hedging instruments:                       |   |   |   |   |
|     Interest rate swap contracts - FHLB advances |   | $ | — |  |   | $ | — |  |
| Derivatives not designated as hedging instruments:                   |   |   |   |   |
| Mortgage loan rate lock commitments                                  |   | $ | 2 |  |   | $ | 8 |  |
| Mortgage loan forward sales                                          |   | 1 |  |   | (78 | ) |
| Total                                                                |   | $ | 3 |  |   | $ | (70 | ) |
|                                                                 |   |   |   |   |

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Table of Contents

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Table of Contents

|                                                        |
|--------------------------------------------------------|
|                                                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)                                 |   | Total |   | Level 1 |   | Level 2 |   | Level 3 |
| Assets:                                                |   |   |   |   |   |   |   |   |
| Available-for-sale debt securities:                    |   |   |   |   |   |   |   |   |
| U.S. government sponsored agencies                     |   | $ | 2,070 |  |   | $ | — |  |   | $ | 2,070 |  |   | $ | — |  |
| Residential mortgage-backed securities-GSE             |   | 337,564 |  |   | — |  |   | 337,564 |  |   | — |  |
| Residential mortgage-backed securities-Private         |   | 20,282 |  |   | — |  |   | 20,282 |  |   | — |  |
| Commercial mortgage-backed securities-GSE              |   | 21,590 |  |   |   |   | 21,590 |  |   |   |
| Commercial mortgage-backed securities-Private          |   | 9,844 |  |   | — |  |   | 9,844 |  |   | — |  |
| Business Development Company investment                |   | 2,651 |  |   | 2,651 |  |   | — |  |   | — |  |
| Corporate notes                                        |   | 8,467 |  |   | — |  |   | 8,467 |  |   | — |  |
| Total available-for-sale debt securities               |   | 402,468 |  |   | 2,651 |  |   | 399,817 |  |   | — |  |
| Mortgage servicing rights                              |   | 1,587 |  |   | — |  |   | — |  |   | 1,587 |  |
| Interest rate swaps                                    |   | 41 |  |   | — |  |   | 41 |  |   | — |  |
| Interest rate locks and forward loan sales commitments |   | 39 |  |   | — |  |   | 39 |  |   | — |  |
| Total assets at fair value                             |   | $ | 404,135 |  |   | $ | 2,651 |  |   | $ | 399,897 |  |   | $ | 1,587 |  |

|                                                        |
|--------------------------------------------------------|
|                                                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)                                 |   | Total |   | Level 1 |   | Level 2 |   | Level 3 |
| Assets:                                                |   |   |   |   |   |   |   |   |
| Available-for-sale debt securities:                    |   |   |   |   |   |   |   |   |
| U.S. government sponsored agencies                     |   | $ | 2,077 |  |   | $ | — |  |   | $ | 2,077 |  |   | $ | — |  |
| Residential mortgage-backed securities-GSE             |   | 341,147 |  |   | — |  |   | 341,147 |  |   | — |  |
| Residential mortgage-backed securities-Private         |   | 20,752 |  |   | — |  |   | 20,752 |  |   | — |  |
| Commercial mortgage-backed securities-GSE              |   | 21,439 |  |   | — |  |   | 21,439 |  |   | — |  |
| Commercial mortgage-backed securities-Private          |   | 9,585 |  |   | — |  |   | 9,585 |  |   | — |  |
| Business Development Company investment                |   | 2,737 |  |   | 2,737 |  |   | — |  |   | — |  |
| Corporate notes                                        |   | 16,877 |  |   | — |  |   | 16,877 |  |   | — |  |
| Total available-for-sale debt securities               |   | 414,614 |  |   | 2,737 |  |   | 411,877 |  |   | — |  |
| Mortgage servicing rights                              |   | 1,552 |  |   | — |  |   | — |  |   | 1,552 |  |
| Interest rate locks and forward loan sales commitments |   | 39 |  |   | — |  |   | 39 |  |   | — |  |
| Total assets at fair value                             |   | $ | 416,205 |  |   | $ | 2,737 |  |   | $ | 411,916 |  |   | $ | 1,552 |  |

----

Table of Contents

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |
|                                                  |   | Fair Value Measurements Using Significant |
|                                                  |   | Unobservable Inputs (Level 3) |
|                                                  |   | Mortgage Servicing Rights |
| (dollars in thousands)                                |   | Three Months Ended March 31, |
|                                                  |   | 2014 |   | 2013 |
| Balance, beginning of period                          |   | $ | 1,552 |  |   | $ | 726 |  |
| Total gains or losses (realized/unrealized):          |   |   |   |   |
| Included in earnings, gross                           |   | 144 |  |   | 348 |  |
|       Less amortization |   | (109 | ) |   | (46 | ) |
| Balance, end of period                                |   | $ | 1,587 |  |   | $ | 1,028 |  |

|        |
|--------|
|        |  |  |  |  |
|   |   |   |   |   |

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)                                |   | Total |   | Level 1 |   | Level 2 |   | Level 3 |
| Impaired loans, net                                   |   | $ | 6,993 |  |   | $ | — |  |   | $ | — |  |   | $ | 6,993 |  |
| Other real estate owned                               |   | 17,840 |  |   | — |  |   | — |  |   | 17,840 |  |
| Total assets at fair value from continuing operations |   | $ | 24,833 |  |   | $ | — |  |   | $ | — |  |   | $ | 24,833 |  |

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)                                |   | Total |   | Level 1 |   | Level 2 |   | Level 3 |
| Impaired loans, net                                   |   | $ | 2,038 |  |   | $ | — |  |   | $ | — |  |   | $ | 2,038 |  |
| Other real estate owned                               |   | 18,263 |  |   | — |  |   | — |  |   | 18,263 |  |
| Total assets at fair value from continuing operations |   | $ | 20,301 |  |   | $ | — |  |   | $ | — |  |   | $ | 20,301 |  |

|                           |
|---------------------------|
|                           |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)    |   | Fair Value at March 31, 2014 |   | Valuation Techniques |   | UnobservableInput |   | Range |
|                           |   |   |   |   |   |   |   |   |
| Impaired loans, net       |   | $ | 6,993 |  |   | Discounted appraisals |   | Collateral discounts |   | 1.00% - 30.00% |
| Other real estate owned   |   | 17,840 |  |   | Discounted appraisals |   | Collateral discounts |   | 1.00% - 30.00% |
| Mortgage servicing rights |   | 1,587 |  |   | Discounted cash flows |   | Prepayment rate |   | 10.00% - 25.00% |
| Mortgage servicing rights |   |   |   |   |   | Discount rate |   | 6.00% - 10.00% |

----

Table of Contents

|                           |
|---------------------------|
|                           |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)    |   | Fair Value atDecember 31, 2013 |   | Valuation Techniques |   | UnobservableInput |   | Range |
|                      |   |   |   |   |   |   |   |   |
| Impaired loans, net       |   | $ | 2,038 |  |   | Discounted appraisals |   | Collateral discounts |   | 1.00%-30.00% |
| Other real estate owned   |   | 18,263 |  |   | Discounted appraisals |   | Collateral discounts |   | 1.00%-30.00% |
| Mortgage servicing rights |   | 1,552 |  |   | Discounted cash flows |   | Prepayment rate |   | 10.00% - 25.00% |
| Mortgage servicing rights |   |   |   |   |   | Discount rate |   | 6.00% - 10.00% |

----

Table of Contents

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                  |   | At March 31, 2014 |
| (dollars in thousands)                                |   | Carrying Value |   | Estimated Fair Value |   | Level 1 |   | Level 2 |   | Level 3 |
| Financial Assets:                                     |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                             |   | $ | 104,951 |  |   | $ | 104,951 |  |   | $ | 104,951 |  |   | $ | — |  |   | $ | — |  |
| Investment securities:  Available-for-sale            |   | 402,468 |  |   | 402,468 |  |   | 2,651 |  |   | 399,817 |  |   | — |  |
| Investment securities:  Held-to-maturity              |   | 149,060 |  |   | 141,002 |  |   | — |  |   | 141,002 |  |   | — |  |
| Loans held for sale                                   |   | 1,961 |  |   | 1,961 |  |   | — |  |   | 1,961 |  |   | — |  |
| Loans, net                                            |   | 1,193,746 |  |   | 1,179,506 |  |   | — |  |   | — |  |   | 1,179,506 |  |
| Accrued interest receivable                           |   | 6,307 |  |   | 6,307 |  |   | — |  |   | 1,500 |  |   | 4,807 |  |
| Interest rate swaps                                   |   | 41 |  |   | 41 |  |   | — |  |   | 41 |  |   | — |  |
| Interest rate locks and forward loan sale commitments |   | 39 |  |   | 39 |  |   | — |  |   | 39 |  |   | — |  |
| Financial Liabilities:                                |   |   |   |   |   |   |   |   |   |   |
| Deposits                                              |   | 1,767,930 |  |   | 1,768,997 |  |   | — |  |   | 1,768,997 |  |   | — |  |
| Retail repurchase agreements                          |   | 5,152 |  |   | 5,152 |  |   | — |  |   | 5,152 |  |   | — |  |
| Federal Home Loan Bank advances                       |   | 73,271 |  |   | 76,224 |  |   | — |  |   | 76,224 |  |   | — |  |
| Long-term notes payable                               |   | 5,281 |  |   | 5,281 |  |   | — |  |   | — |  |   | 5,281 |  |
| Junior subordinated debentures                        |   | 56,702 |  |   | 22,973 |  |   | — |  |   | — |  |   | 22,973 |  |
| Accrued interest payable                              |   | 2,868 |  |   | 2,868 |  |   | — |  |   | 378 |  |   | 2,490 |  |

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                  |   | At December 31, 2013 |
| (dollars in thousands)                                |   | Carrying Value |   | Estimated Fair Value |   | Level 1 |   | Level 2 |   | Level 3 |
| Financial Assets:                                     |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                             |   | $ | 67,430 |  |   | $ | 67,430 |  |   | $ | 67,430 |  |   | $ | — |  |   | $ | — |  |
| Investment securities:  Available-for-sale            |   | 414,614 |  |   | 414,614 |  |   | 2,737 |  |   | 411,877 |  |   | — |  |
| Investment securities:  Held-to-maturity              |   | 151,795 |  |   | 141,125 |  |   |   |   | 141,125 |  |   | — |  |
| Loans held for sale                                   |   | 1,836 |  |   | 1,836 |  |   | — |  |   | 1,836 |  |   | — |  |
| Loans, net                                            |   | 1,185,463 |  |   | 1,129,826 |  |   | — |  |   | — |  |   | 1,129,826 |  |
| Accrued interest receivable                           |   | 6,283 |  |   | 6,283 |  |   | — |  |   | 1,583 |  |   | 4,700 |  |
| Interest rate locks and forward loan sale commitments |   | 39 |  |   | 39 |  |   | — |  |   | 39 |  |   | — |  |
| Financial Liabilities:                                |   |   |   |   |   |   |   |   |   |   |
| Deposits                                              |   | 1,748,705 |  |   | 1,748,685 |  |   | — |  |   | 1,748,685 |  |   | — |  |
| Retail repurchase agreements                          |   | 6,917 |  |   | 6,917 |  |   | — |  |   | 6,917 |  |   | — |  |
| Federal Home Loan Bank advances                       |   | 73,283 |  |   | 75,663 |  |   | — |  |   | 75,663 |  |   | — |  |
| Long-term notes payable                               |   | 5,263 |  |   | 5,263 |  |   | — |  |   | — |  |   | 5,263 |  |
| Junior subordinated debentures                        |   | 56,702 |  |   | 22,316 |  |   | — |  |   | — |  |   | 22,316 |  |
| Accrued interest payable                              |   | 2,624 |  |   | 2,624 |  |   | — |  |   | 389 |  |   | 2,235 |  |

----

Table of Contents

|                                                                  |
|------------------------------------------------------------------|
|                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in thousands)                                           |   | Unrealized Gains (Losses) on Available-For-Sale Securities |   | Interest Rate Swaps |   | Defined Benefit Plan Items |   | Total |
|                                                             |   |   |   |   |   |   |   |   |
| Beginning balance January 1, 2014                                |   | $ | (14,476 | ) |   | $ | — |  |   | $ | (3,129 | ) |   | $ | (17,605 | ) |
| Other comprehensive income before reclassifications              |   | 3,267 |  |   | 25 |  |   | — |  |   | 3,292 |  |
| Amounts reclassified from accumulated other comprehensive income |   | — |  |   | — |  |   | — |  |   | — |  |
| Net current period other comprehensive income                    |   | 3,267 |  |   | 25 |  |   | — |  |   | 3,292 |  |
| Ending balance March 31, 2014                                    |   | $ | (11,209 | ) |   | $ | 25 |  |   | $ | (3,129 | ) |   | $ | (14,313 | ) |

|                                                                  |
|------------------------------------------------------------------|
|                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in thousands)                                           |   | Unrealized Gains (Losses) on Available-For-Sale Securities |   | Defined Benefit Plan Items |   | Total |
|                                                             |   |   |   |   |   |   |
| Beginning balance January 1, 2013                                |   | $ | 3,650 |  |   | $ | (3,973 | ) |   | $ | (323 | ) |
| Other comprehensive loss before reclassifications                |   | (2,985 | ) |   | — |  |   | (2,985 | ) |
| Amounts reclassified from accumulated other comprehensive income |   | (1,438 | ) |   | (154 | ) |   | (1,592 | ) |
| Net current period other comprehensive loss                      |   | (4,423 | ) |   | (154 | ) |   | (4,577 | ) |
| Ending balance March 31, 2013                                    |   | $ | (773 | ) |   | $ | (4,127 | ) |   | $ | (4,900 | ) |

|                                          |
|------------------------------------------|
|                                          |  |  |  |  |  |  |  |  |  |
| (Dollars in thousands)                   | Amount Reclassified from AOCI |   |   |
|                                     | Three Months Ended March 31, 2014 |   | Three Months Ended March 31, 2013 |   | Line Item in the Consolidated Statement of Operations |
| Available-for-sale securities:           |   |   |   |   |   |
| Net realized gains on sale of securities | $ | — |  |   | $ | (2,377 | ) |   | Securities gains, net |
| Income tax (benefit) expense             | — |  |   | 939 |  |   | Income tax expense |
| Total, net of tax                        | — |  |   | (1,438 | ) |   |   |
|                                     |   |   |   |   |   |
| Defined benefit plan items:              |   |   |   |   |   |
|    Net actuarial gains    | — |  |   | (254 | ) |   | Personnel expense |
| Income tax (benefit) expense             | — |  |   | 100 |  |   | Income tax expense |
| Total, net of tax                        | — |  |   | (154 | ) |   |   |
| Total reclassifications for the period   | $ | — |  |   | $ | (1,592 | ) |   |   |

----

----

Table of Contents

|         |                                                                                                                                                   |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| • | our ability to raise capital in amounts and at terms that will support our business needs and meet our Business Plan and regulatory expectations; |

|         |                                                                                                           |
|---------|-----------------------------------------------------------------------------------------------------------|
| • | financial resources in the amount, at the times and on the terms required to support our future business; |

|         |                                                                                                                                                    |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------|
| • | changes in interest rates, spreads on earning assets and interest-bearing liabilities, the shape of the yield curve and interest rate sensitivity; |

|         |                                           |
|---------|-------------------------------------------|
| • | a prolonged period of low interest rates; |

|         |                                                                                                  |
|---------|--------------------------------------------------------------------------------------------------|
| • | continued and increased credit losses and material changes in the quality of our loan portfolio; |

|         |                                             |
|---------|---------------------------------------------|
| • | continued decline in the value of our OREO; |

|         |                                                                            |
|---------|----------------------------------------------------------------------------|
| • | increased competitive pressures in the banking industry or in our markets; |

|         |                                                                                                                                                               |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | less favorable general economic conditions, either nationally or regionally, resulting in, among other things, a reduced demand for credit or other services; |

|         |                                                                                                                       |
|---------|-----------------------------------------------------------------------------------------------------------------------|
| • | a slowdown in the housing markets, or an increase in interest rates, either of which may reduce demand for mortgages; |

|         |                                                                                                                                                                         |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board and Federal, State and local taxing authorities; |

|         |                                                                                                                                                                                                                                                               |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | the outcome of legislation and regulation affecting the financial services industry, including COB, including the effects resulting from the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III capital rules; |

|         |                                                 |
|---------|-------------------------------------------------|
| • | changes in accounting principles and standards; |

|         |                                                                                                                                            |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------|
| • | adverse changes in financial performance or condition of our borrowers, which could affect repayment of such borrowers' outstanding loans; |

|         |                                                                   |
|---------|-------------------------------------------------------------------|
| • | repurchase risk in connection with our mortgage line of business; |

|         |                              |
|---------|------------------------------|
| • | reducing costs and expenses; |

|         |                                                                  |
|---------|------------------------------------------------------------------|
| • | increasing price and product/service competition by competitors; |

|         |                                              |
|---------|----------------------------------------------|
| • | rapid technological development and changes; |

|         |                                                                                                                                 |
|---------|---------------------------------------------------------------------------------------------------------------------------------|
| • | the effect of any mergers, acquisitions or other transactions to which we or our subsidiaries may from time to time be a party; |

|         |                                                                        |
|---------|------------------------------------------------------------------------|
| • | the inaccuracy of assumptions underlying the establishment of our ALL; |

|         |                                                      |
|---------|------------------------------------------------------|
| • | loss of one or more members of executive management; |

|         |                                                                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | disruptions in or manipulations of our operating systems or the systems of our vendors due to, among other things, cybersecurity risks or otherwise; and |

|         |                                                              |
|---------|--------------------------------------------------------------|
| • | our success at managing the risks involved in the foregoing. |

----

Table of Contents

|                                                                       |
|-----------------------------------------------------------------------|
|                                                                       |  |  |  |  |  |  |  |  |
| (dollars in thousands, except per share data)                         |   | As of and for Three Months Ended |
|                                                                  |   | March 31, 2014 |   | March 31, 2013 |
| Income Statement Data                                                 |   |   |   |   |
| Net interest income                                                   |   | $ | 15,479 |  |   | $ | 15,173 |  |
| Provision for (recovery of) loan losses                               |   | (684 | ) |   | 110 |  |
| Noninterest income                                                    |   | 3,943 |  |   | 6,533 |  |
| Noninterest expense                                                   |   | 18,806 |  |   | 24,339 |  |
| Income (loss) before income taxes                                     |   | 1,300 |  |   | (2,743 | ) |
| Net income (loss)                                                     |   | 1,277 |  |   | (4,596 | ) |
| Period End Balances                                                   |   |   |   |   |
| Assets                                                                |   | $ | 2,008,481 |  |   | $ | 2,093,311 |  |
| Loans held for sale                                                   |   | 1,961 |  |   | 5,012 |  |
| Loans held for investment (1)                                         |   | 1,219,785 |  |   | 1,113,765 |  |
| Allowance for loan losses                                             |   | 26,039 |  |   | 29,641 |  |
| Goodwill                                                              |   | 4,205 |  |   | 4,205 |  |
| Deposits                                                              |   | 1,767,930 |  |   | 1,856,161 |  |
| Borrowings                                                            |   | 140,406 |  |   | 122,320 |  |
| Shareholders' equity                                                  |   | 85,331 |  |   | 89,374 |  |
| Average Balances                                                      |   |   |   |   |
| Assets                                                                |   | $ | 1,979,036 |  |   | $ | 2,107,869 |  |
| Loans held for sale                                                   |   | 1,298 |  |   | 4,616 |  |
| Loans held for investment (1)                                         |   | 1,208,416 |  |   | 1,142,731 |  |
| Allowance for loan losses                                             |   | 26,942 |  |   | 29,770 |  |
| Goodwill                                                              |   | 4,205 |  |   | 4,205 |  |
| Deposits                                                              |   | 1,739,354 |  |   | 1,864,961 |  |
| Borrowings                                                            |   | 142,244 |  |   | 123,902 |  |
| Shareholders' equity                                                  |   | 83,776 |  |   | 96,566 |  |
| Per Common Share Data                                                 |   |   |   |   |
| Net income (loss) - basic and diluted                                 |   | 0.06 |  |   | (0.21 | ) |
| Book value (2)                                                        |   | 3.88 |  |   | 4.12 |  |
| Tangible book value (2)                                               |   | 3.39 |  |   | 3.58 |  |
| Performance Ratios                                                    |   |   |   |   |
| Return on average assets                                              |   | 0.26 | % |   | (0.88 | )% |
| Return on average tangible assets (2)                                 |   | 0.26 |  |   | (0.89 | ) |
| Return on average equity                                              |   | 6.18 |  |   | (19.30 | ) |
| Return on average tangible equity (2)                                 |   | 7.11 |  |   | (21.92 | ) |
| Net interest margin (tax equivalent)                                  |   | 3.43 |  |   | 3.20 |  |
| Core noninterest expense as a percentage of average assets (3)        |   | 3.59 |  |   | 3.66 |  |
| Asset Quality Ratios                                                  |   |   |   |   |
| Allowance for loan losses to period end loans held for investment (1) |   | 2.13 | % |   | 2.66 |  % |
| Nonperforming loans to period end allowance for loan losses (3)       |   | 130 |  |   | 238 |  |

----

Table of Contents

|                                                                                  |
|----------------------------------------------------------------------------------|
|                                                                                  |  |  |  |  |  |  |  |  |
| Net annualized charge-offs (recoveries) to average loans held for investment (1) |   | 0.02 |  |   | (0.08 | ) |
| Nonperforming assets to period end total assets (3)                              |   | 2.9 |  |   | 5.6 |  |
| Capital and Liquidity Ratios                                                     |   |   |   |   |
| Average equity to average assets                                                 |   | 4.23 | % |   | 4.58 |  % |
| Leverage capital                                                                 |   | 6.20 |  |   | 5.37 |  |
| Tier 1 risk-based capital                                                        |   | 9.67 |  |   | 9.19 |  |
| Total risk-based capital                                                         |   | 12.80 |  |   | 12.58 |  |
| Period end loans to period end deposits                                          |   | 69 |  |   | 60 |  |

----

|    |            |
|----|------------|
| 1. | Grow loans |

|    |                    |
|----|--------------------|
| 2. | Grow core deposits |

|    |                                                                          |
|----|--------------------------------------------------------------------------|
| 3. | Invest in people and products while maintaining sound expense discipline |

|    |                                     |
|----|-------------------------------------|
| 4. | Resolve our remaining credit issues |

----

----

Table of Contents

|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                      | Three Months Ended March 31, |
|                                                      | 2014 |   | 2013 |
|                                                      |   |   |   |   | Average |   |   |   |   |   | Average |
| (dollars in thousands)                                    | Average |   | Income / |   | Yield / |   | Average |   | Income / |   | Yield / |
|                                                      | Balance (3) |   | Expense |   | Rate |   | Balance (3) |   | Expense |   | Rate |
| Interest-earning assets:                                  |   |   |   |   |   |   |   |   |   |   |   |
| Loans (1)(2)                                              | $ | 1,209,714 |  |   | $ | 14,106 |  |   | 4.73 | % |   | $ | 1,147,347 |  |   | $ | 14,833 |  |   | 5.24 | % |
| Taxable investment securities                             | 560,556 |  |   | 3,695 |  |   | 2.67 |  |   | 565,225 |  |   | 3,073 |  |   | 2.20 |  |
| Other earning assets                                      | 60,552 |  |   | 150 |  |   | 1.00 |  |   | 218,758 |  |   | 212 |  |   | 0.39 |  |
|   Total earning assets                          | 1,830,822 |  |   | 17,951 |  |   | 3.98 |  |   | 1,931,330 |  |   | 18,118 |  |   | 3.80 |  |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-earning assets:                               |   |   |   |   |   |   |   |   |   |   |   |
| Cash and due from banks                                   | 27,314 |  |   |   |   |   |   | 31,533 |  |   |   |   |   |
| Goodwill and other intangible assets                      | 10,953 |  |   |   |   |   |   | 10,798 |  |   |   |   |   |
| Other assets, net                                         | 109,947 |  |   |   |   |   |   | 134,208 |  |   |   |   |   |
|   Total assets                                  | $ | 1,979,036 |  |   |   |   |   |   | $ | 2,107,869 |  |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                             |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand deposits                          | $ | 337,364 |  |   | $ | 250 |  |   | 0.30 | % |   | $ | 356,586 |  |   | $ | 256 |  |   | 0.29 | % |
| Savings deposits                                          | 82,129 |  |   | 21 |  |   | 0.10 |  |   | 76,822 |  |   | 19 |  |   | 0.10 |  |
| Money market deposits                                     | 448,686 |  |   | 265 |  |   | 0.24 |  |   | 457,190 |  |   | 246 |  |   | 0.22 |  |
| Time deposits                                             | 574,848 |  |   | 1,166 |  |   | 0.82 |  |   | 719,891 |  |   | 1,726 |  |   | 0.97 |  |
|   Total interest-bearing deposits               | 1,443,027 |  |   | 1,702 |  |   | 0.48 |  |   | 1,610,489 |  |   | 2,247 |  |   | 0.57 |  |
| Retail repurchase agreements                              | 6,995 |  |   | 3 |  |   | 0.17 |  |   | 8,876 |  |   | 4 |  |   | 0.18 |  |
| Federal Home Loan Bank advances                           | 73,278 |  |   | 469 |  |   | 2.60 |  |   | 58,324 |  |   | 382 |  |   | 2.66 |  |
| Other borrowed funds                                      | 61,971 |  |   | 274 |  |   | 1.79 |  |   | 56,702 |  |   | 264 |  |   | 1.89 |  |
|   Total interest-bearing liabilities            | 1,585,271 |  |   | 2,448 |  |   | 0.63 |  |   | 1,734,391 |  |   | 2,897 |  |   | 0.68 |  |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing liabilities and shareholders' equity: |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing demand deposits                       | 296,327 |  |   |   |   |   |   | 254,472 |  |   |   |   |   |
| Other liabilities                                         | 13,662 |  |   |   |   |   |   | 22,440 |  |   |   |   |   |
| Shareholders' equity                                      | 83,776 |  |   |   |   |   |   | 96,566 |  |   |   |   |   |
|   Total liabilities and shareholders' equity    | $ | 1,979,036 |  |   |   |   |   |   | $ | 2,107,869 |  |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income and net yield on earning assets (4)   |   |   | $ | 15,503 |  |   | 3.43 | % |   |   |   | $ | 15,221 |  |   | 3.20 | % |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate spread (5)                                  |   |   |   |   | 3.35 | % |   |   |   |   |   | 3.12 | % |

|        |
|--------|
|        |  |  |  |  |  |  |  |  |  |  |  |
|   |   |   |   |   |   |   |   |   |   |   |   |

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|                                                                             |  |  |  |  |  |  |  |
|                                                                        | Three Months Ended |
| (dollars in thousands)                                                      | March 31, 2014 |   | March 31, 2013 |
| Noninterest Income                                                          |   |   |   |
|     Service charges on deposit accounts                 | $ | 1,564 |  |   | $ | 1,376 |  |
|     Mortgage loan income                                | 174 |  |   | 744 |  |
|     Cardholder and merchant services income             | 1,113 |  |   | 1,069 |  |
|     Trust and investment services                       | 358 |  |   | 241 |  |
|     Bank-owned life insurance                           | 252 |  |   | 263 |  |
|     Other service charges, commissions and fees         | 352 |  |   | 258 |  |
|     Securities (loss)/gains, net                        | — |  |   | 2,377 |  |
|     Other income                                        | 130 |  |   | 205 |  |
|         Total noninterest income    | 3,943 |  |   | 6,533 |  |
| Less:                                                                       |   |   |   |
|     Securities (loss) gains, net                        | — |  |   | 2,377 |  |
|         Core noninterest income (1) | $ | 3,943 |  |   | $ | 4,156 |  |

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|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |  |  |  |  |  |  |  |
|                                                                         | Three Months Ended |
| (dollars in thousands)                                                       | March 31, 2014 |   | March 31, 2013 |
| Noninterest Expense                                                          |   |   |   |
|     Personnel expense                                    | $ | 10,393 |  |   | $ | 10,679 |  |
|     Net occupancy expense                                | 1,553 |  |   | 1,831 |  |
|     Furniture, equipment and data processing expense     | 2,003 |  |   | 2,368 |  |
|     Professional fees                                    | 633 |  |   | 1,493 |  |
|     Stationery, printing and supplies                    | 162 |  |   | 186 |  |
|     Advertising and marketing                            | 153 |  |   | 665 |  |
|     Other real estate owned expense                      | 261 |  |   | 883 |  |
|     Credit/debit card expense                            | 595 |  |   | 425 |  |
|     FDIC insurance                                       | 639 |  |   | 670 |  |
|     Loan collection expense                              | 657 |  |   | 1,519 |  |
|     Merger-related expense                               | — |  |   | 1,509 |  |
|     Core deposit intangible amortization                 | 352 |  |   | 352 |  |
|     Other expense                                        | 1,405 |  |   | 1,759 |  |
|         Total noninterest expense    | 18,806 |  |   | 24,339 |  |
| Less:                                                                        |   |   |   |
|     Other real estate owned expense                      | 261 |  |   | 883 |  |
|     Merger-related expense                               | — |  |   | 1,509 |  |
|     Loan collection expense                              | 657 |  |   | 1,519 |  |
|     Rebranding expenses                                  | — |  |   | 552 |  |
|     Mortgage and litigation accrual                      | (75 | ) |   | — |  |
|     Branch closure and restructuring expense             | 183 |  |   | 587 |  |
|         Core noninterest expense (1) | $ | 17,780 |  |   | $ | 19,289 |  |

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|                                                                                                                                              |
|----------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                                                         |   | March 31, 2014 |   | December 31, 2013 |
| (dollars in thousands)                                                                                                                       |   | Balance |   | Associated Reserves |   | Balance |   | Associated Reserves |
| Impaired loans, not individually reviewed for impairment                                                                                     |   | $ | 4,670 |  |   | $ | — |  |   | $ | 4,612 |  |   | $ | — |  |
| Impaired loans, individually reviewed, with no impairment                                                                                    |   | 33,317 |  |   | — |  |   | 39,865 |  |   | — |  |
| Impaired loans, individually reviewed, with impairment                                                                                       |   | 8,112 |  |   | 1,119 |  |   | 2,965 |  |   | 927 |  |
| Total impaired loans *                                                                                                                       |   | $ | 46,099 |  |   | $ | 1,119 |  |   | $ | 47,442 |  |   | $ | 927 |  |
|                                                                                                                                         |   |   |   |   |   |   |   |   |
| Purchased impaired loans with subsequent deterioration                                                                                       |   | 138,789 |  |   | 5,237 |  |   | 161,307 |  |   | 5,560 |  |
| Purchased impaired loans with no subsequent deterioration                                                                                    |   | 10,244 |  |   | — |  |   | 344 |  |   | — |  |
| Total Reserves                                                                                                                               |   |   |   | 6,356 |  |   |   |   | 6,487 |  |
| Average impaired loans calculated using a simple average                                                                                     |   | $ | 46,771 |  |   |   |   | $ | 65,527 |  |   |   |
| * Included at March 31, 2014 and December 31, 2013 were $12.5 million and $12.1 million, respectively, in restructured and performing loans. |

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|                                 |
|---------------------------------|
|                                 |  |  |  |  |
|                            |   |   | Minimum Regulatory Requirement |
|                            | CommunityOne Bancorp | CommunityOneBank | AdequatelyCapitalized | Well-Capitalized |
| Leverage capital ratio          | 6.20% | 7.74% | 4.00% | 5.00% |
| Tier 1 risk-based capital ratio | 9.67% | 12.09% | 4.00% | 6.00% |
| Total risk-based capital ratio  | 12.80% | 13.38% | 8.00% | 10.00% |

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|         |                                                                                                                                                                                       |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | “Average tangible shareholders’ equity” is defined as average shareholders’ equity reduced by average recorded goodwill, and average other intangible assets. |

|         |                                                                                                                                                    |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------|
| • | “Average tangible assets” is defined as average total assets reduced by average recorded goodwill and average other intangible assets. |

|         |                                                                                                                                                     |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| • | “Tangible shareholders’ equity” is defined as shareholders’ equity reduced by recorded goodwill and other intangible assets |

|         |                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------|
| • | “Tangible assets” is defined as total assets reduced by recorded goodwill and other intangible assets. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | “Tangible book value” is defined as total equity reduced by recorded goodwill, other intangible assets and preferred stock divided by total common shares outstanding. This measure discloses changes from period-to-period in book value per share exclusive of changes in intangible assets and preferred stock. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing total book value while not increasing the tangible assets of a company. Companies utilizing purchase accounting in a business combination, as required by GAAP, must record goodwill related to such transactions. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | “Non-core Noninterest Expense ” is defined as OREO expenses, loan collection expenses, nonrecurring items such as merger-related expense, mortgage servicing rights impairment, prepayment penalty on borrowings, goodwill impairment and loss on loans held for sale. This measure identifies items which are elevated during periods of elevated problem asset activity and items which are nonrecurring in nature. |

|         |                                                                                                                                                                                                                                                                                      |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | "Core Noninterest Expense (NIE)" is defined as total noninterest expense reduced by Non-core Noninterest expense. This measure reduces noninterest expense by items which are elevated during periods of elevated problem asset activity and items which are nonrecurring in nature. |

|         |                                                                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | "Non-core Noninterest Income" is defined as gains and losses on securities and any other nonrecurring noninterest income items. This measure identifies noninterest income items which are nonrecurring in nature. |

|         |                                                                                                                                                                                                               |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | “Core Noninterest Income (NII)” is defined as total noninterest income reduced by Non-core Noninterest Income. This measure reduces noninterest income by items which are nonrecurring in nature. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | "Core Earnings" is defined as income (loss) from continuing operations, before income taxes, increased by Non-core Noninterest Expense, decreased by Non-core Noninterest Income, and increased by provision for loan losses or decreased by recovery of loan losses. This measure identifies the Company's pre-tax earnings excluding items which are elevated during periods of elevated problem asset activity and items which are nonrecurring in nature. |

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|                                                  |
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|                                                  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands, except per share data)    |   | As of and for the three months ended March 31, 2014 |   | As of and for the year ended December 31, 2013 |   | As of and for the three months ended March 31, 2013 |
| Total  average shareholders' equity              |   | $ | 83,776 |  |   | $ | 85,576 |  |   | $ | 96,566 |  |
| Less:                                            |   |   |   |   |   |   |
| Average goodwill                                 |   | (4,205 | ) |   | (4,205 | ) |   | (4,205 | ) |
| Average core deposit and other intangibles       |   | (6,748 | ) |   | (7,207 | ) |   | (7,340 | ) |
| Average tangible shareholders' equity (non-GAAP) |   | $ | 72,823 |  |   | $ | 74,164 |  |   | $ | 85,021 |  |
|                                             |   |   |   |   |   |   |
| Total average assets                             |   | $ | 1,979,036 |  |   | $ | 2,047,146 |  |   | $ | 2,107,869 |  |
| Less:                                            |   |   |   |   |   |   |
| Average goodwill                                 |   | (4,205 | ) |   | (4,205 | ) |   | (4,205 | ) |
| Average core deposit and other intangibles       |   | (6,748 | ) |   | (7,207 | ) |   | (7,340 | ) |
| Average tangible assets (non-GAAP)               |   | $ | 1,968,083 |  |   | $ | 2,035,734 |  |   | $ | 2,096,324 |  |
|                                             |   |   |   |   |   |   |
| Total shareholders' equity                       |   | $ | 85,331 |  |   | $ | 80,361 |  |   | $ | 89,374 |  |
| Less:                                            |   |   |   |   |   |   |
| Goodwill                                         |   | (4,205 | ) |   | (4,205 | ) |   | (4,205 | ) |
| Core deposit and other intangibles               |   | (6,597 | ) |   | (6,914 | ) |   | (7,445 | ) |
| Tangible shareholders' equity (non-GAAP)         |   | $ | 74,529 |  |   | $ | 69,242 |  |   | $ | 77,724 |  |
|                                             |   |   |   |   |   |   |
| Total assets                                     |   | $ | 2,008,481 |  |   | $ | 1,985,032 |  |   | $ | 2,093,311 |  |
| Less:                                            |   |   |   |   |   |   |
| Goodwill                                         |   | (4,205 | ) |   | (4,205 | ) |   | (4,205 | ) |
| Core deposit and other intangibles               |   | (6,597 | ) |   | (6,914 | ) |   | (7,445 | ) |
| Tangible assets (non-GAAP)                       |   | $ | 1,997,679 |  |   | $ | 1,973,913 |  |   | $ | 2,081,661 |  |
|                                             |   |   |   |   |   |   |
| Book value per common share                      |   | $ | 3.88 |  |   | $ | 3.70 |  |   | $ | 4.12 |  |
| Effect of intangible assets                      |   | (0.49 | ) |   | (0.51 | ) |   | (0.54 | ) |
| Tangible book value per common share (non-GAAP)  |   | $3.39 |   | $3.19 |   | $3.58 |

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|                                                                                                 |
|-------------------------------------------------------------------------------------------------|
|                                                                                                 |  |  |  |  |  |  |  |  |
| (dollars in thousands)                                                                          |   | Three Months Ended |
|                                                                                            |   | March 31, 2014 |   | March 31, 2013 |
| Total noninterest expense                                                                       |   | $ | 18,806 |  |   | $ | 24,339 |  |
| Less:                                                                                           |   |   |   |   |
|      Other real estate owned expense                                   |   | 261 |  |   | 883 |  |
|      Loan collection expense                                           |   | 657 |  |   | 1,519 |  |
|      Merger-related expense                                            |   | — |  |   | 1,509 |  |
|      Rebranding expenses                                               |   | — |  |   | 552 |  |
|      Granite mortgage and litigation accrual                           |   | (75 | ) |   | — |  |
|      Branch closure and restructuring expense                          |   | 183 |  |   | 587 |  |
| Total non-core noninterest expense (non-GAAP)                                                   |   | 1,026 |  |   | 5,050 |  |
|           Core noninterest expense (non-GAAP) |   | $ | 17,780 |  |   | $ | 19,289 |  |
|                                                                                            |   |   |   |   |
| Total noninterest income                                                                        |   | $ | 3,943 |  |   | $ | 6,533 |  |
| Less:                                                                                           |   |   |   |   |
|     Securities gains (losses), net                                          |   | — |  |   | 2,377 |  |
| Total non-core noninterest income (non-GAAP)                                                    |   | — |  |   | 2,377 |  |
|         Core noninterest income (non-GAAP)              |   | $ | 3,943 |  |   | $ | 4,156 |  |
|                                                                                            |   |   |   |   |
| Income loss from continuing operations, before income taxes                                     |   | $ | 1,300 |  |   | $ | (2,743 | ) |
| Non-core noninterest expense (non-GAAP)                                                         |   | 1,026 |  |   | 5,050 |  |
| Less: Non-core noninterest income (non-GAAP)                                                    |   | — |  |   | (2,377 | ) |
| Provision for (recovery of) loan losses                                                         |   | (684 | ) |   | 110 |  |
|    Core earnings (non-GAAP)                                                      |   | $ | 1,642 |  |   | $ | 40 |  |

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|             |
|-------------|
|             |  |
| Exhibit No. | Description of Exhibit |
| 31.1        | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.2        | 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. |
| 101         | Financial Statements submitted in XBRL format |