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| For the quarterly period ended September 30, 2013 |   | 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 September 30, 2013 and December 31, 2012 | 1 |
|                           | Consolidated Statements of Operations for Three Months and Nine Months Ended September 30, 2013 and 2012 | 2 |
|                           | Consolidated Statements of Comprehensive Income (Loss) for Three Months and Nine Months Ended September 30, 2013 and 2012 | 3 |
|                           | Consolidated Statements of Shareholders' Equity for Nine Months Ended September 30, 2013 and 2012 | 4 |
|                           | Consolidated Statements of Cash Flows for Nine Months Ended September 30, 2013 and 2012 | 5 |
| Item 2                         | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 36 |
| Item 3                         | Quantitative and Qualitative Disclosures about Market Risk | 55 |
| Item 4                         | Controls and Procedures | 56 |
| PART II.  OTHER INFORMATION    |   |
| Item 1                         | Legal Proceedings | 57 |
| Item 1A                        | Risk Factors | 57 |
| Item 2                         | Unregistered Sales of Equity Securities and Repurchases | 57 |
| Item 3                         | Defaults Upon Senior Securities | 57 |
| Item 4                         | Mine Safety Disclosures | 57 |
| Item 5                         | Other Information | 57 |
| Item 6                         | Exhibits | 57 |
|                           | Signatures | 58 |

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|                                                                                                                          |  |  |  |  |  |  |  |  |
| (in thousands, except share and per share data)                                                                          |   | September 30, 2013 |   | December 31, 2012* |
| Assets                                                                                                                   |   |   |   |   |
| Cash and due from banks                                                                                                  |   | $ | 29,506 |  |   | $ | 38,552 |  |
| Interest-bearing bank balances                                                                                           |   | 73,568 |  |   | 201,058 |  |
| Investment securities:                                                                                                   |   |   |   |   |
| Available-for-sale, at estimated fair value (amortized cost of $456,310 in 2013 and $558,818 in 2012)                    |   | 439,712 |  |   | 564,850 |  |
| Held-to-maturity (estimated fair value of $146,474 in 2013)                                                              |   | 153,684 |  |   | — |  |
| Loans held for sale                                                                                                      |   | 2,734 |  |   | 6,974 |  |
| Loans held for investment                                                                                                |   | 1,195,142 |  |   | 1,177,035 |  |
| Less: Allowance for loan losses                                                                                          |   | (25,387 | ) |   | (29,314 | ) |
| Net loans held for investment                                                                                            |   | 1,169,755 |  |   | 1,147,721 |  |
| Premises and equipment, net                                                                                              |   | 51,409 |  |   | 52,725 |  |
| Other real estate owned and property acquired in settlement of loans                                                     |   | 33,179 |  |   | 63,131 |  |
| Core deposit premiums and other intangibles                                                                              |   | 7,197 |  |   | 7,495 |  |
| Goodwill                                                                                                                 |   | 4,205 |  |   | 4,205 |  |
| Bank-owned life insurance                                                                                                |   | 39,646 |  |   | 38,792 |  |
| Other assets                                                                                                             |   | 32,578 |  |   | 26,062 |  |
| Total Assets                                                                                                             |   | $ | 2,037,173 |  |   | $ | 2,151,565 |  |
| Liabilities                                                                                                              |   |   |   |   |
| Deposits:                                                                                                                |   |   |   |   |
| Noninterest-bearing demand deposits                                                                                      |   | $ | 308,178 |  |   | $ | 251,235 |  |
| Interest-bearing deposits:                                                                                               |   |   |   |   |
| Demand, savings and money market deposits                                                                                |   | 874,211 |  |   | 892,576 |  |
| Time deposits of $100 or more                                                                                            |   | 264,363 |  |   | 290,166 |  |
| Other time deposits                                                                                                      |   | 343,856 |  |   | 473,011 |  |
| Total deposits                                                                                                           |   | 1,790,608 |  |   | 1,906,988 |  |
| Retail repurchase agreements                                                                                             |   | 12,422 |  |   | 8,675 |  |
| Federal Home Loan Bank advances                                                                                          |   | 73,295 |  |   | 58,328 |  |
| Long term notes payable                                                                                                  |   | 5,244 |  |   | — |  |
| Junior subordinated debentures                                                                                           |   | 56,702 |  |   | 56,702 |  |
| Other liabilities                                                                                                        |   | 18,100 |  |   | 22,427 |  |
| Total Liabilities                                                                                                        |   | 1,956,371 |  |   | 2,053,120 |  |
| Shareholders' Equity                                                                                                     |   |   |   |   |
| Preferred stock Series A, $10.00 par value; authorized 200,000 shares, no shares issued and outstanding in 2013 and 2012 |   | — |  |   | — |  |
| Preferred stock, $1.00 par value, authorized 15,000,000 shares, no shares issued and outstanding in 2013 and 2012        |   | — |  |   | — |  |
| Common stock, no par value; authorized 2,500,000,000 shares, issued 21,739,646 shares in 2013 and 21,698,115 in 2012     |   | 461,446 |  |   | 460,955 |  |
| Accumulated deficit                                                                                                      |   | (365,960 | ) |   | (362,187 | ) |
| Accumulated other comprehensive loss                                                                                     |   | (14,684 | ) |   | (323 | ) |
| Total Shareholders' Equity                                                                                               |   | 80,802 |  |   | 98,445 |  |
| Total Liabilities and Shareholders' Equity                                                                               |   | $ | 2,037,173 |  |   | $ | 2,151,565 |  |

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|                                                                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in thousands, except share and per share data)                                   | Three Months Ended September 30, |   | Nine Months Ended September 30, |
|                                                                              | 2013 |   | 2012 |   | 2013 |   | 2012 |
| Interest Income                                                                   |   |   |   |   |   |   |   |
| Interest and fees on loans                                                        | $ | 15,993 |  |   | $ | 16,264 |  |   | $ | 45,451 |  |   | $ | 50,458 |  |
| Interest and dividends on investment securities:                                  |   |   |   |   |   |   |   |
| Taxable income                                                                    | 3,788 |  |   | 2,667 |  |   | 10,366 |  |   | 8,238 |  |
| Non-taxable income                                                                | (14 | ) |   | — |  |   | — |  |   | — |  |
| Other interest income                                                             | 86 |  |   | 276 |  |   | 244 |  |   | 936 |  |
| Total interest income                                                             | 19,853 |  |   | 19,207 |  |   | 56,061 |  |   | 59,632 |  |
| Interest Expense                                                                  |   |   |   |   |   |   |   |
| Deposits                                                                          | 1,894 |  |   | 3,320 |  |   | 6,231 |  |   | 11,244 |  |
| Retail repurchase agreements                                                      | 6 |  |   | 6 |  |   | 15 |  |   | 23 |  |
| Federal Home Loan Bank advances                                                   | 289 |  |   | 391 |  |   | 1,037 |  |   | 1,057 |  |
| Other borrowed funds                                                              | 282 |  |   | 288 |  |   | 809 |  |   | 877 |  |
| Total interest expense                                                            | 2,471 |  |   | 4,005 |  |   | 8,092 |  |   | 13,201 |  |
| Net Interest Income before Provision for Loan Losses                              | 17,382 |  |   | 15,202 |  |   | 47,969 |  |   | 46,431 |  |
| Provision for (recovery of) loan losses                                           | (350 | ) |   | 32 |  |   | (1,297 | ) |   | 10,877 |  |
| Net Interest Income after Provision for Loan Losses                               | 17,732 |  |   | 15,170 |  |   | 49,266 |  |   | 35,554 |  |
| Noninterest Income                                                                |   |   |   |   |   |   |   |
| Service charges on deposit accounts                                               | 1,858 |  |   | 1,778 |  |   | 4,915 |  |   | 5,424 |  |
| Mortgage loan income                                                              | 420 |  |   | 728 |  |   | 2,085 |  |   | 1,051 |  |
| Cardholder and merchant services income                                           | 1,161 |  |   | 1,119 |  |   | 3,403 |  |   | 3,436 |  |
| Trust and investment services                                                     | 329 |  |   | 234 |  |   | 964 |  |   | 692 |  |
| Bank owned life insurance                                                         | 267 |  |   | 290 |  |   | 805 |  |   | 910 |  |
| Other service charges, commissions and fees                                       | 365 |  |   | 252 |  |   | 960 |  |   | 777 |  |
| Securities gains (losses), net                                                    | 50 |  |   | (33 | ) |   | 2,773 |  |   | 1,923 |  |
| Other income                                                                      | 37 |  |   | 275 |  |   | 362 |  |   | 788 |  |
| Total noninterest income                                                          | 4,487 |  |   | 4,643 |  |   | 16,267 |  |   | 15,001 |  |
| Noninterest Expense                                                               |   |   |   |   |   |   |   |
| Personnel expense                                                                 | 9,663 |  |   | 9,717 |  |   | 31,149 |  |   | 30,351 |  |
| Net occupancy expense                                                             | 1,558 |  |   | 1,710 |  |   | 5,060 |  |   | 4,885 |  |
| Furniture, equipment and data processing expense                                  | 2,050 |  |   | 2,012 |  |   | 6,512 |  |   | 6,395 |  |
| Professional fees                                                                 | 222 |  |   | 1,336 |  |   | 2,475 |  |   | 4,265 |  |
| Stationery, printing and supplies                                                 | 136 |  |   | 152 |  |   | 509 |  |   | 446 |  |
| Advertising and marketing                                                         | 150 |  |   | 166 |  |   | 994 |  |   | 420 |  |
| Other real estate owned expense                                                   | (98 | ) |   | 3,602 |  |   | 4,116 |  |   | 21,594 |  |
| Credit/debit card expense                                                         | 627 |  |   | 432 |  |   | 1,525 |  |   | 1,279 |  |
| FDIC insurance                                                                    | 646 |  |   | 1,056 |  |   | 1,980 |  |   | 2,879 |  |
| Loan collection expense                                                           | 1,120 |  |   | 1,119 |  |   | 3,784 |  |   | 2,379 |  |
| Merger-related expense                                                            | — |  |   | 939 |  |   | 3,498 |  |   | 2,357 |  |
| Core deposit intangible amortization                                              | 352 |  |   | 352 |  |   | 1,056 |  |   | 1,056 |  |
| Other expense                                                                     | 1,501 |  |   | 2,009 |  |   | 4,273 |  |   | 6,059 |  |
| Total noninterest expense                                                         | 17,927 |  |   | 24,602 |  |   | 66,931 |  |   | 84,365 |  |
| Income (Loss) from continuing operations, before income taxes                     | 4,292 |  |   | (4,789 | ) |   | (1,398 | ) |   | (33,810 | ) |
| Income tax expense (benefit) - continuing operations                              | 286 |  |   | (77 | ) |   | 2,375 |  |   | (128 | ) |
| Income (Loss) from continuing operations, net of tax                              | 4,006 |  |   | (4,712 | ) |   | (3,773 | ) |   | (33,682 | ) |
| Loss from discontinued operations, net of tax                                     | — |  |   | — |  |   | — |  |   | (27 | ) |
| Net income (loss)                                                                 | $ | 4,006 |  |   | $ | (4,712 | ) |   | $ | (3,773 | ) |   | $ | (33,709 | ) |
|                                                                              |   |   |   |   |   |   |   |
| Weighted average number of common shares outstanding - basic and diluted          | 21,738,770 |  |   | 21,588,027 |  |   | 21,722,536 |  |   | 21,294,727 |  |
| Net income (loss) per common share from continuing operations - basic and diluted | $ | 0.18 |  |   | $ | (0.22 | ) |   | $ | (0.17 | ) |   | $ | (1.58 | ) |
| Net loss per common share from discontinued operations - basic and diluted        | — |  |   | — |  |   | — |  |   | — |  |
| Net income (loss) per common share - basic and diluted                            | 0.18 |  |   | (0.22 | ) |   | (0.17 | ) |   | (1.58 | ) |

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|                                                                                                                   |  |  |  |  |  |  |  |
| (dollars in thousands)                                                                                            | Three Months Ended September 30, |
|                                                                                                              | 2013 |   | 2012 |
| Net income (loss)                                                                                                 | $ | 4,006 |  |   | $ | (4,712 | ) |
| Other comprehensive income (loss):                                                                                |  |   |  |
| Unrealized gains arising from termination of supplemental executive retirement plans                              | — |  |   | 371 |  |
| Unrealized holdings gains (losses) arising during the period on available-for-sale securities                     | 1,584 |  |   | 5,633 |  |
|  Tax effect                                                                                                  | (829 | ) |   | (2,225 | ) |
| Unrealized holdings gains (losses) arising during the period on available-for-sale securities, net of tax         | 755 |  |   | 3,408 |  |
| Reclassification adjustment for (gain) losses on available-for-sale securities included in net income             | (50 | ) |   | 33 |  |
|      Tax effect                                                                          | 19 |  |   | (13 | ) |
| Reclassification adjustment for (gain) losses on available-for-sale securities included in net income, net of tax | (31 | ) |   | 20 |  |
| Change in defined benefit plans liability                                                                         | (249 | ) |   | — |  |
| Tax effect                                                                                                        | 95 |  |   | — |  |
| Change in defined benefit plans liability, net of tax                                                             | (154 | ) |   | — |  |
| Other comprehensive income (loss), net of tax:                                                                    | 570 |  |   | 3,799 |  |
| Comprehensive income (loss)                                                                                       | $ | 4,576 |  |   | $ | (913 | ) |

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|                                                                                                                   |  |  |  |  |  |  |  |
| (dollars in thousands)                                                                                            | Nine Months Ended September 30, |
|                                                                                                              | 2013 |   | 2012 |
| Net loss                                                                                                          | $ | (3,773 | ) |   | $ | (33,709 | ) |
| Other comprehensive income (loss):                                                                                |   |   |   |
| Unrealized gains arising from termination of supplemental executive retirement plans                              | — |  |   | 371 |  |
| Unrealized holdings gains (losses) arising during the period on available-for-sale securities                     | (19,857 | ) |   | 10,817 |  |
|  Tax effect                                                                                                  | 7,636 |  |   | (4,245 | ) |
| Unrealized holdings gains (losses) arising during the period on available-for-sale securities, net of tax         | (12,221 | ) |   | 6,572 |  |
| Reclassification adjustment for (gain) losses on available-for-sale securities included in net income             | (2,773 | ) |   | (1,923 | ) |
|      Tax effect                                                                          | 1,094 |  |   | 760 |  |
| Reclassification adjustment for (gain) losses on available-for-sale securities included in net income, net of tax | (1,679 | ) |   | (1,163 | ) |
| Change in defined benefit plans liability                                                                         | (757 | ) |   | — |  |
| Tax effect                                                                                                        | 296 |  |   | — |  |
| Change in defined benefit plans liability, net of tax                                                             | (461 | ) |   | — |  |
| Other comprehensive income (loss), net of tax:                                                                    | (14,361 | ) |   | 5,780 |  |
| Comprehensive loss                                                                                                | $ | (18,134 | ) |   | $ | (27,929 | ) |

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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, 2011                                                                                   |   | — |  |   | $ | — |  |   | 21,102,668 |  |   | $ | 455,166 |  |   | $ | (322,182 | ) |   | $ | (3,969 | ) |   | $ | 129,015 |  |
| Comprehensive loss:                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                                     |   | — |  |   | — |  |   | — |  |   | — |  |   | (33,709 | ) |   | — |  |   | (33,709 | ) |
| Other comprehensive income, net of tax                                                                       |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 5,780 |  |   | 5,780 |  |
| Total comprehensive loss                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   | (27,929 | ) |
| Expense related to 2011 issuance of common stock                                                             |   | — |  |   | — |  |   | — |  |   | (913 | ) |   | — |  |   | — |  |   | (913 | ) |
| Return of common stock not received for fractional shares rounding purposes in the 1:100 reverse stock split |   | — |  |   | — |  |   | (586 | ) |   | — |  |   | — |  |   | — |  |   | — |  |
| Stock options:                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Compensation expense recognized                                                                              |   | — |  |   | — |  |   | — |  |   | 1 |  |   | — |  |   | — |  |   | 1 |  |
| Exercise of warrants related to stock offering                                                               |   |   |   |   |   | 186 |  |   | 3 |  |   |   |   |   |   | 3 |  |
| Stock offering, net of issuance costs of $158                                                                |   | — |  |   | — |  |   | 485,788 |  |   | 6,696 |  |   | — |  |   | — |  |   | 6,696 |  |
| Balance, September 30, 2012                                                                                  |   | — |  |   | $ | — |  |   | 21,588,056 |  |   | $ | 460,953 |  |   | $ | (355,891 | ) |   | $ | 1,811 |  |   | $ | 106,873 |  |
| Balance, December 31, 2012                                                                                   |   | — |  |   | $ | — |  |   | 21,698,115 |  |   | $ | 460,955 |  |   | $ | (362,187 | ) |   | $ | (323 | ) |   | $ | 98,445 |  |
| Comprehensive loss:                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                                     |   | — |  |   | — |  |   | — |  |   | — |  |   | (3,773 | ) |   | — |  |   | (3,773 | ) |
| Other comprehensive loss, net of tax                                                                         |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | (14,361 | ) |   | (14,361 | ) |
| Total comprehensive loss                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   | (18,134 | ) |
| Stock options:                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Compensation expense recognized                                                                              |   | — |  |   | — |  |   | — |  |   | 462 |  |   | — |  |   | — |  |   | 462 |  |
| Restricted stock:                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as compensation to directors                                                                   |   | — |  |   | — |  |   | 3,708 |  |   | 29 |  |   | — |  |   | — |  |   | 29 |  |
| Issuance of restricted stock awards to employees                                                             |   | — |  |   | — |  |   | 37,823 |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Balance, September 30, 2013                                                                                  |   | — |  |   | $ | — |  |   | 21,739,646 |  |   | $ | 461,446 |  |   | $ | (365,960 | ) |   | $ | (14,684 | ) |   | $ | 80,802 |  |

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|                                                                           |  |  |  |  |  |  |  |  |
|  (dollars in thousands)                                              |   | Nine Months Ended September 30, |
|                                                                      |   | 2013 |   | 2012 |
| Operating Activities                                                      |   |   |   |   |
| Net loss                                                                  |   | $ | (3,773 | ) |   | $ | (33,709 | ) |
| Net loss from discontinued operations                                     |   | — |  |   | (27 | ) |
| Net loss from continuing operations                                       |   | (3,773 | ) |   | (33,682 | ) |
| Adjustments to reconcile net loss to cash used in operating activities:   |   |   |   |   |
| Depreciation and amortization of premises and equipment                   |   | 2,715 |  |   | 2,906 |  |
| Provision for (recovery of) loan losses                                   |   | (1,297 | ) |   | 10,877 |  |
| Deferred income taxes (benefit)                                           |   | 2,375 |  |   | (128 | ) |
| Deferred loan fees and costs, net                                         |   | (279 | ) |   | (3,432 | ) |
| Premium amortization and discount accretion of investment securities, net |   | 3,632 |  |   | 6,547 |  |
| Net (gain) loss on sale of investment securities                          |   | (2,773 | ) |   | (1,923 | ) |
| Amortization of core deposit premiums                                     |   | 1,056 |  |   | 1,056 |  |
| Net accretion of purchase accounting adjustments                          |   | (13,364 | ) |   | (19,661 | ) |
| Adjustment to goodwill                                                    |   | — |  |   | (300 | ) |
| Stock compensation expense                                                |   | 491 |  |   | 1 |  |
| Increase in cash surrender value of bank-owned life insurance, net        |   | (854 | ) |   | (967 | ) |
| Loans held for sale:                                                      |   |   |   |   |
| Origination of loans held for sale                                        |   | (93,390 | ) |   | (40,078 | ) |
| Net proceeds from sale of loans held for sale                             |   | 100,208 |  |   | 32,425 |  |
| Net loss (gain) on sale of loans held for sale                            |   | (1,684 | ) |   | (559 | ) |
| Mortgage servicing rights capitalized                                     |   | (959 | ) |   | — |  |
| Mortgage servicing rights amortization                                    |   | 203 |  |   | — |  |
| Net (gain) loss on sale of premises and equipment                         |   | 604 |  |   | — |  |
| Net loss on sales and write-downs of other real estate owned              |   | 3,004 |  |   | 16,091 |  |
| Changes in assets and liabilities:                                        |   |   |   |   |
| Decrease (increase) in accrued interest receivable and other assets       |   | (1,879 | ) |   | 431 |  |
| Increase in accrued interest payable and other liabilities                |   | 155 |  |   | (2,742 | ) |
| Net cash used in operating activities of continuing operations            |   | (5,809 | ) |   | (33,138 | ) |
| Net effect of discontinued operations                                     |   | — |  |   | (874 | ) |
| Net cash used in operating activities                                     |   | (5,809 | ) |   | (34,012 | ) |
| Investing Activities                                                      |   |   |   |   |
| Available-for-sale securities:                                            |   |   |   |   |
| Proceeds from sales                                                       |   | 175,046 |  |   | 133,241 |  |
| Proceeds from maturities, calls and principal repayments                  |   | 56,650 |  |   | 120,718 |  |
| Purchases                                                                 |   | (126,041 | ) |   | (309,221 | ) |
| Held-to-maturity securities:                                              |   |   |   |   |
| Purchases                                                                 |   | (155,394 | ) |   | — |  |
| Net (increase) decrease in loans held for investment                      |   | (13,608 | ) |   | (32,856 | ) |
| Proceeds from sales of other real estate owned                            |   | 32,001 |  |   | 37,528 |  |
| Purchases of premises and equipment                                       |   | (2,455 | ) |   | (1,862 | ) |
| Proceeds from sales of premises and equipment                             |   | 276 |  |   | 36 |  |
| Expenses paid in 2012 related to 2011 capital raise                       |   | — |  |   | (913 | ) |
| Net cash (used in) provided by investing activities                       |   | (33,525 | ) |   | (53,329 | ) |
| Financing Activities                                                      |   |   |   |   |
| Net decrease in deposits                                                  |   | (115,916 | ) |   | (145,465 | ) |
| Increase in retail repurchase agreements                                  |   | 3,747 |  |   | 595 |  |
| Decrease in Federal Home Loan Bank advances                               |   | 14,967 |  |   | (31 | ) |
| Issuance of common stock, net of expense                                  |   | — |  |   | 6,696 |  |
| Net cash used in financing activities of continuing operations            |   | (97,202 | ) |   | (138,205 | ) |
| Net effect of discontinued operations                                     |   | — |  |   | — |  |
| Net cash used in financing activities                                     |   | (97,202 | ) |   | (138,205 | ) |
| Net Decrease in Cash and Cash Equivalents                                 |   | (136,536 | ) |   | (225,546 | ) |
| Cash and Cash Equivalents at Beginning of Period                          |   | 239,610 |  |   | 553,416 |  |
| Cash and Cash Equivalents at End of Period                                |   | $ | 103,074 |  |   | $ | 327,870 |  |
|                                                                      |   |   |   |   |
| Supplemental disclosure of cash flow information                          |   |  |   |   |
| Cash paid during the period for:                                          |   |   |   |   |
| Interest                                                                  |   | $ | 7,793 |  |   | $ | 13,982 |  |
| Noncash transactions:                                                     |   |   |   |   |
| Foreclosed loans transferred to other real estate owned                   |   | 10,403 |  |   | 23,647 |  |
| Loans to facilitate the sale of other real estate owned                   |   | 5,071 |  |   | 778 |  |
| Transfer of loans from held for investment to held for sale               |   | 894 |  |   | 600 |  |
| Transfer of loans from held for sale to held for investment               |   | — |  |   | 1,119 |  |
| Unrealized securities gains/(losses), net of income taxes                 |   | (13,900 | ) |   | 5,409 |  |
| Transfer of investment from other assets to available for sale securities |   | 2,640 |  |   | — |  |
| Employee benefit plan costs, net of income taxes                          |   | (461 | ) |   | — |  |

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|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |
| (dollars in thousands)                               |   | Nine Months Ended September 30, |
|                                                 |   | 2013 |   | 2012 |
| Interest Income                                      |   |   |   |   |
| Total interest income                                |   | $ | — |  |   | $ | — |  |
| Interest Expense                                     |   |   |   |   |
| Total interest expense                               |   | — |  |   | — |  |
| Net Interest Income before Provision for Loan Losses |   | — |  |   | — |  |
| Provision for loan losses                            |   | — |  |   | — |  |
| Net Interest Income after Provision for Loan Losses  |   | — |  |   | — |  |
| Noninterest Income                                   |   |   |   |   |
| Total noninterest income                             |   | — |  |   | — |  |
| Noninterest Expense                                  |   |   |   |   |
| Personnel expense                                    |   | — |  |   | 1 |  |
| Net occupancy expense                                |   | — |  |   | 1 |  |
| Professional fees                                    |   | — |  |   | 25 |  |
| Total noninterest expense                            |   | — |  |   | 27 |  |
| Loss before income taxes                             |   | — |  |   | (27 | ) |
| Income tax (benefit)/expense                         |   | — |  |   | — |  |
| Net loss from discontinued operations, net of tax    |   | $ | — |  |   | $ | (27 | ) |

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|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| September 30, 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                |   | $ | 2,057 |  |   | $ | 25 |  |   | $ | — |  |   | $ | 2,082 |  |
| Residential mortgage-backed securities-GSE           |   | 373,860 |  |   | 945 |  |   | 17,358 |  |   | 357,447 |  |
| Residential mortgage-backed securities-Private       |   | 20,484 |  |   | 784 |  |   | 10 |  |   | 21,258 |  |
| Commercial mortgage backed securities-GSE            |   | 22,863 |  |   | — |  |   | 1,219 |  |   | 21,644 |  |
| Commercial mortgage-backed securities-Private        |   | 10,419 |  |   | — |  |   | 786 |  |   | 9,633 |  |
| Business Development Company investment              |   | 1,753 |  |   | 887 |  |   | — |  |   | 2,640 |  |
| Corporate notes                                      |   | 24,874 |  |   | 134 |  |   | — |  |   | 25,008 |  |
| Total available for sale                             |   | $ | 456,310 |  |   | $ | 2,775 |  |   | $ | 19,373 |  |   | $ | 439,712 |  |
| Held to Maturity:                                    |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities-GSE           |   | 143,611 |  |   | — |  |   | 6,556 |  |   | 137,055 |  |
| Commercial mortgage-backed securities-Private        |   | 10,073 |  |   | — |  |   | 654 |  |   | 9,419 |  |
|      Total held to maturity |   | $ | 153,684 |  |   | $ | — |  |   | $ | 7,210 |  |   | $ | 146,474 |  |
| Total investment securities                          |   | $ | 609,994 |  |   | $ | 2,775 |  |   | $ | 26,583 |  |   | $ | 586,186 |  |
|                                                 |   |   |   |   |   |   |   |   |
| December 31, 2012                               |   |   |   |   |   |   |   |   |
| (dollars in thousands)                               |   | Amortized Cost |   | Gross Unrealized Gains |   | Gross Unrealized Losses |   | Estimated Fair Value |
| Available for Sale:                                  |   |   |   |   |   |   |   |   |
| Obligations of:                                      |   |   |   |   |   |   |   |   |
| U.S. Treasury and government agencies                |   | $ | 6,646 |  |   | $ | 335 |  |   | $ | — |  |   | $ | 6,981 |  |
| U.S. government sponsored enterprises                |   | 22,118 |  |   | 55 |  |   | — |  |   | 22,173 |  |
| States and political subdivisions                    |   | 5,918 |  |   | 120 |  |   | — |  |   | 6,038 |  |
| Residential mortgage-backed securities-GSE           |   | 436,344 |  |   | 5,678 |  |   | 948 |  |   | 441,074 |  |
| Residential mortgage-backed securities-Private       |   | 22,649 |  |   | 750 |  |   | 454 |  |   | 22,945 |  |
| Commercial mortgage backed securities-GSE            |   | 23,150 |  |   | 209 |  |   | — |  |   | 23,359 |  |
| Commercial mortgage backed securities-Private        |   | 5,283 |  |   | 34 |  |   | — |  |   | 5,317 |  |
| Corporate notes                                      |   | 36,710 |  |   | 270 |  |   | 17 |  |   | 36,963 |  |
| Total                                                |   | $ | 558,818 |  |   | $ | 7,451 |  |   | $ | 1,419 |  |   | $ | 564,850 |  |

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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 |
| September 30, 2013                        |   |   |   |   |   |   |   |   |
| Available for Sale:                            |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities-GSE     | $ | 312,145 |  | $ | 17,358 |  |   | $ | — |  | $ | — |  |   | $ | 312,145 |  | $ | 17,358 |  |
| Residential mortgage-backed securities-Private | 1,350 |  | 10 |  |   | — |  | — |  |   | 1,350 |  | 10 |  |
| Commercial mortgage-backed securities-GSE      | 21,644 |  | 1,219 |  |   | — |  | — |  |   | 21,644 |  | 1,219 |  |
| Commercial mortgage-backed securities-Private  | 9,633 |  | 786 |  |   | — |  | — |  |   | 9,633 |  | 786 |  |
| Total available for sale                       | $ | 344,772 |  | $ | 19,373 |  |   | $ | — |  | $ | — |  |   | $ | 344,772 |  | $ | 19,373 |  |
| Held to Maturity:                              |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities-GSE     | $ | 137,055 |  | $ | 6,556 |  |   | $ | — |  | $ | — |  |   | $ | 137,055 |  | $ | 6,556 |  |
| Commercial mortgage-backed securities-Private  | 9,419 |  | 654 |  |   | — |  | — |  |   | 9,419 |  | 654 |  |
| Total held to maturity                         | $ | 146,474 |  | $ | 7,210 |  |   | $ | — |  | $ | — |  |   | $ | 146,474 |  | $ | 7,210 |  |
| Total                                          | $ | 491,246 |  | $ | 26,583 |  |   | $ | — |  | $ | — |  |   | $ | 491,246 |  | $ | 26,583 |  |
|                                           |   |   |   |   |   |   |   |   |
| December 31, 2012                         |   |   |   |   |   |   |   |   |
| Obligations of:                                |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities-GSE     | $ | 123,489 |  | $ | 904 |  |   | $ | 7,027 |  | $ | 44 |  |   | $ | 130,516 |  | $ | 948 |  |
| Residential mortgage-backed securities-Private | 7,499 |  | 454 |  |   | — |  | — |  |   | 7,499 |  | 454 |  |
| Corporate notes                                | 3,249 |  | 17 |  |   | — |  | — |  |   | 3,249 |  | 17 |  |
| Total                                          | $ | 134,237 |  | $ | 1,375 |  |   | $ | 7,027 |  | $ | 44 |  |   | $ | 141,264 |  | $ | 1,419 |  |

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|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                  |   | 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               |   | $ | 16,486 |  |   | $ | 16,539 |  |   | $ | — |  |   | $ | — |  |
| Due after one year through five years |   | 10,445 |  |   | 10,551 |  |   | — |  |   | — |  |
| With no stated maturity               |   | 1,753 |  |   | 2,640 |  |   | — |  |   | — |  |
| Total                                 |   | 28,684 |  |   | 29,730 |  |   | — |  |   | — |  |
| Mortgage-backed securities            |   | 427,626 |  |   | 409,982 |  |   | 153,684 |  |   | 146,474 |  |
| Total                                 |   | $ | 456,310 |  |   | $ | 439,712 |  |   | $ | 153,684 |  |   | $ | 146,474 |  |

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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 |   | $ | 65,556 |  |   | $ | 640 |  |   | $ | 3,421 |  |   | $ | — |  |   | $ | 69,617 |  |
| Real estate - construction  |   | 48,665 |  |   | 3,310 |  |   | 15,567 |  |   | — |  |   | 67,542 |  |
| Real estate - mortgage:     |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   | 578,197 |  |   | 12,638 |  |   | 27,427 |  |   | — |  |   | 618,262 |  |
| Commercial                  |   | 300,609 |  |   | 26,918 |  |   | 67,559 |  |   | — |  |   | 395,086 |  |
| Consumer                    |   | 43,997 |  |   | 48 |  |   | 241 |  |   | 349 |  |   | 44,635 |  |
| Total                       |   | $ | 1,037,024 |  |   | $ | 43,554 |  |   | $ | 114,215 |  |   | $ | 349 |  |   | $ | 1,195,142 |  |

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)      |   | Pass |   | Special Mention |   | Substandard |   | Doubtful |   |   |
|                        |   | (Ratings 1-5) |   | (Rating 6) |   | (Rating 7) |   | (Rating 8) |   | Total |
| Commercial and agricultural |   | $ | 69,003 |  |   | $ | 3,447 |  |   | $ | 6,953 |  |   | $ | 301 |  |   | $ | 79,704 |  |
| Real estate - construction  |   | 40,117 |  |   | 2,031 |  |   | 16,266 |  |   | — |  |   | 58,414 |  |
| Real estate - mortgage:     |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   | 504,819 |  |   | 15,855 |  |   | 32,625 |  |   | 239 |  |   | 553,538 |  |
| Commercial                  |   | 296,271 |  |   | 50,275 |  |   | 95,126 |  |   | 164 |  |   | 441,836 |  |
| Consumer                    |   | 42,495 |  |   | 178 |  |   | 426 |  |   | 444 |  |   | 43,543 |  |
| Total                       |   | $ | 952,705 |  |   | $ | 71,786 |  |   | $ | 151,396 |  |   | $ | 1,148 |  |   | $ | 1,177,035 |  |

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|         |                                                     |
|---------|-----------------------------------------------------|
| • | 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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|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (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 |   | $ | 52 |  |   | $ | — |  |   | $ | — |  |   | $ | 590 |  |   | $ | 642 |  |   | $ | 57,558 |  |   | $ | 58,200 |  |
| Real estate - construction  |   | 47 |  |   | — |  |   | 76 |  |   | 10,190 |  |   | 10,313 |  |   | 47,034 |  |   | 57,347 |  |
| Real estate - mortgage:     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   | 1,269 |  |   | 759 |  |   | — |  |   | 12,822 |  |   | 14,850 |  |   | 573,700 |  |   | 588,550 |  |
| Commercial                  |   | 220 |  |   | 153 |  |   | — |  |   | 27,425 |  |   | 27,798 |  |   | 243,108 |  |   | 270,906 |  |
| Consumer                    |   | 97 |  |   | 13 |  |   | — |  |   | 104 |  |   | 214 |  |   | 43,332 |  |   | 43,546 |  |
| Total                       |   | $ | 1,685 |  |   | $ | 925 |  |   | $ | 76 |  |   | $ | 51,131 |  |   | $ | 53,817 |  |   | $ | 964,732 |  |   | $ | 1,018,549 |  |
| PI loans                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial and agricultural |   | $ | 77 |  |   | $ | — |  |   | $ | 2,235 |  |   | $ | — |  |   | $ | 2,312 |  |   | $ | 9,106 |  |   | $ | 11,418 |  |
| Real estate - construction  |   | — |  |   | — |  |   | 2,884 |  |   | — |  |   | 2,884 |  |   | 7,312 |  |   | 10,196 |  |
| Real estate - mortgage:     |   |   |   |   |   |  |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   | 10 |  |   | — |  |   | 5,242 |  |   | — |  |   | 5,252 |  |   | 24,460 |  |   | 29,712 |  |
| Commercial                  |   | 174 |  |   | 594 |  |   | 19,228 |  |   | — |  |   | 19,996 |  |   | 104,182 |  |   | 124,178 |  |
| Consumer                    |   | 7 |  |   | — |  |   | 15 |  |   | — |  |   | 22 |  |   | 1,067 |  |   | 1,089 |  |
| Total                       |   | $ | 268 |  |   | $ | 594 |  |   | $ | 29,604 |  |   | $ | — |  |   | $ | 30,466 |  |   | $ | 146,127 |  |   | $ | 176,593 |  |
| Total Loans                 |   | $ | 1,953 |  |   | $ | 1,519 |  |   | $ | 29,680 |  |   | $ | 51,131 |  |   | $ | 84,283 |  |   | $ | 1,110,859 |  |   | $ | 1,195,142 |  |

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (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 |   | $ | 515 |  |   | $ | — |  |   | $ | 50 |  |   | $ | 2,746 |  |   | $ | 3,311 |  |   | $ | 61,727 |  |   | $ | 65,038 |  |
| Real estate - construction  |   | 26 |  |   | 119 |  |   | — |  |   | 14,297 |  |   | 14,442 |  |   | 41,290 |  |   | 55,732 |  |
| Real estate - mortgage:     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   | 6,173 |  |   | 880 |  |   | — |  |   | 18,372 |  |   | 25,425 |  |   | 488,898 |  |   | 514,323 |  |
| Commercial                  |   | 617 |  |   | — |  |   | 177 |  |   | 43,621 |  |   | 44,415 |  |   | 226,948 |  |   | 271,363 |  |
| Consumer                    |   | 24 |  |   | — |  |   | — |  |   | 206 |  |   | 230 |  |   | 41,957 |  |   | 42,187 |  |
| Total                       |   | $ | 7,355 |  |   | $ | 999 |  |   | $ | 227 |  |   | $ | 79,242 |  |   | $ | 87,823 |  |   | $ | 860,820 |  |   | $ | 948,643 |  |
| PI loans                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial and agricultural |   | $ | 100 |  |   | $ | 1 |  |   | $ | 1,103 |  |   | $ | — |  |   | $ | 1,204 |  |   | $ | 13,462 |  |   | $ | 14,666 |  |
| Real estate - construction  |   | 117 |  |   | — |  |   | 655 |  |   | — |  |   | 772 |  |   | 1,910 |  |   | 2,682 |  |
| Real estate - mortgage:     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   | 1,308 |  |   | 495 |  |   | 4,678 |  |   | — |  |   | 6,481 |  |   | 32,734 |  |   | 39,215 |  |
| Commercial                  |   | 2,559 |  |   | 4,300 |  |   | 17,384 |  |   | — |  |   | 24,243 |  |   | 146,230 |  |   | 170,473 |  |
| Consumer                    |   | 4 |  |   | — |  |   | 13 |  |   | — |  |   | 17 |  |   | 1,339 |  |   | 1,356 |  |
| Total                       |   | $ | 4,088 |  |   | $ | 4,796 |  |   | $ | 23,833 |  |   | $ | — |  |   | $ | 32,717 |  |   | $ | 195,675 |  |   | $ | 228,392 |  |
| Total Loans                 |   | $ | 11,443 |  |   | $ | 5,795 |  |   | $ | 24,060 |  |   | $ | 79,242 |  |   | $ | 120,540 |  |   | $ | 1,056,495 |  |   | $ | 1,177,035 |  |

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|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                      |   | September 30, 2013 |   | December 31, 2012 |
| (dollars in thousands)                                    |   | Balance |   | Associated Reserves |   | Balance |   | Associated Reserves |
| Impaired loans, not individually reviewed for impairment  |   | $ | 4,550 |  |   | $ | — |  |   | $ | 6,017 |  |   | $ | — |  |
| Impaired loans, individually reviewed, with no impairment |   | 49,356 |  |   | — |  |   | 62,282 |  |   | — |  |
| Impaired loans, individually reviewed, with impairment    |   | 2,963 |  |   | 486 |  |   | 15,312 |  |   | 1,737 |  |
| Total impaired loans, excluding purchased impaired *      |   | $ | 56,869 |  |   | $ | 486 |  |   | $ | 83,611 |  |   | $ | 1,737 |  |
|                                                      |   |   |   |   |   |   |   |   |
| Purchased impaired loans with subsequent deterioration    |   | $ | 147,852 |  |   | 4,066 |  |   | $ | 192,115 |  |   | 5,373 |  |
| Purchased impaired loans with no subsequent deterioration |   | $ | 28,741 |  |   | — |  |   | $ | 36,277 |  |   | — |  |
| Total Reserves                                            |   |   |   | $ | 4,552 |  |   |   |   | $ | 7,110 |  |
|                                                      |   |   |   |   |   |   |   |   |
| Average impaired loans calculated using a simple average  |   | $ | 61,837 |  |   |   |   | $ | 94,754 |  |   |   |

|                                                                                                                                                |
|------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                |  |  |  |  |  |  |  |  |
| * Included at September 30, 2013 and December 31, 2012 were $6.7 million and $4.5 million, respectively, in restructured and performing loans. |

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|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |
| (dollars in thousands)                               |   |   |   |   |
|                                                 |   | September 30, 2013 |   | December 31, 2012 |
| Loans held for investment:                           |   |   |   |   |
| Commercial and agricultural                          |   | $ | 590 |  |   | $ | 2,746 |  |
| Real estate - construction                           |   | 10,190 |  |   | 14,297 |  |
| Real estate - mortgage:                              |   |   |   |   |
| 1-4 family residential                               |   | 12,822 |  |   | 18,372 |  |
| Commercial                                           |   | 27,425 |  |   | 43,621 |  |
| Consumer                                             |   | 104 |  |   | 206 |  |
| Total nonaccrual loans                               |   | $ | 51,131 |  |   | $ | 79,242 |  |
| Loans more than 90 days delinquent, still on accrual |   | 76 |  |   | 227 |  |
| Total nonperforming loans                            |   | $ | 51,207 |  |   | $ | 79,469 |  |

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|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                 |   |   |   | Unpaid |   |   |
| (dollars in thousands)                               |   | Recorded |   | Principal |   | Related |
|                                                 |   | Investment |   | Balance |   | Allowance |
| With no related allowance recorded:                  |   |   |   |   |   |   |
|   Commercial and agricultural              |   | $ | 416 |  |   | $ | 776 |  |   | $ | — |  |
|   Real estate - construction               |   | 9,900 |  |   | 14,246 |  |   | — |  |
|   Real estate - mortgage:                  |   |   |   |   |   |   |
| 1-4 family residential                               |   | 10,465 |  |   | 13,416 |  |   | — |  |
| Commercial                                           |   | 28,576 |  |   | 34,748 |  |   | — |  |
|   Consumer                                 |   | — |  |   | — |  |   | — |  |
| Total                                                |   | $ | 49,357 |  |   | $ | 63,186 |  |   | $ | — |  |
| With an allowance recorded:                          |   |   |   |   |   |   |
|   Commercial and agricultural              |   | $ | — |  |   | $ | — |  |   | $ | — |  |
|   Real estate - construction               |   | 97 |  |   | 112 |  |   | 1 |  |
|   Real estate - mortgage:                  |   |   |   |   |   |   |
| 1-4 family residential                               |   | 2,595 |  |   | 2,994 |  |   | 446 |  |
| Commercial                                           |   | 271 |  |   | 397 |  |   | 39 |  |
|   Consumer                                 |   | — |  |   | — |  |   | — |  |
| Total                                                |   | $ | 2,963 |  |   | $ | 3,503 |  |   | $ | 486 |  |
| Total individually evaluated impaired loans          |   |   |   |   |   |   |
|   Commercial and agricultural              |   | $ | 416 |  |   | $ | 776 |  |   | $ | — |  |
|   Real estate - construction               |   | 9,997 |  |   | 14,358 |  |   | 1 |  |
|   Real estate - mortgage:                  |   |   |   |   |   |   |
| 1-4 family residential                               |   | 13,060 |  |   | 16,410 |  |   | 446 |  |
| Commercial                                           |   | 28,847 |  |   | 35,145 |  |   | 39 |  |
|   Consumer                                 |   | — |  |   | — |  |   | — |  |
| Total                                                |   | $ | 52,320 |  |   | $ | 66,689 |  |   | $ | 486 |  |
|                                                 |   |   |   |   |   |   |
| PI loans with subsequent credit deterioration:       |   |   |   |   |   |   |
|   Commercial and agricultural              |   | $ | 8,821 |  |   | $ | 9,042 |  |   | $ | 34 |  |
|   Real estate - construction               |   | 8,258 |  |   | 8,897 |  |   | 747 |  |
|   Real estate - mortgage:                  |   |   |   |   |   |   |
|      1-4 family residential |   | 26,661 |  |   | 27,130 |  |   | 527 |  |
|      Commercial             |   | 103,028 |  |   | 106,249 |  |   | 2,567 |  |
|   Consumer                                 |   | 1,084 |  |   | 848 |  |   | 191 |  |
| Total                                                |   | $ | 147,852 |  |   | $ | 152,166 |  |   | $ | 4,066 |  |

----

Table of Contents

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                 |   |   |   | Unpaid |   |   |
| (dollars in thousands)                               |   | Recorded |   | Principal |   | Related |
|                                                 |   | Investment |   | Balance |   | Allowance |
| With no related allowance recorded:                  |   |   |   |   |   |   |
|   Commercial and agricultural              |   | $ | 1,755 |  |   | $ | 2,608 |  |   | $ | — |  |
|   Real estate - construction               |   | 11,875 |  |   | 18,553 |  |   | — |  |
|   Real estate - mortgage:                  |   |   |   |   |   |   |
| 1-4 family residential                               |   | 16,437 |  |   | 20,764 |  |   | — |  |
| Commercial                                           |   | 32,215 |  |   | 38,585 |  |   | — |  |
|   Consumer                                 |   | — |  |   | — |  |   | — |  |
| Total                                                |   | $ | 62,282 |  |   | $ | 80,510 |  |   | $ | — |  |
| With an allowance recorded:                          |   |   |   |   |   |   |
|   Commercial and agricultural              |   | $ | 579 |  |   | $ | 602 |  |   | $ | 282 |  |
|   Real estate - construction               |   | 1,658 |  |   | 1,843 |  |   | 82 |  |
|   Real estate - mortgage:                  |   |   |   |   |   |   |
| 1-4 family residential                               |   | 1,681 |  |   | 1,745 |  |   | 607 |  |
| Commercial                                           |   | 11,394 |  |   | 14,714 |  |   | 766 |  |
|   Consumer                                 |   | — |  |   | — |  |   | — |  |
| Total                                                |   | $ | 15,312 |  |   | $ | 18,904 |  |   | $ | 1,737 |  |
| Total individually evaluated impaired loans          |   |   |   |   |   |   |
|   Commercial and agricultural              |   | $ | 2,334 |  |   | $ | 3,210 |  |   | $ | 282 |  |
|   Real estate - construction               |   | 13,533 |  |   | 20,396 |  |   | 82 |  |
|   Real estate - mortgage:                  |   |   |   |   |   |   |
| 1-4 family residential                               |   | 18,118 |  |   | 22,509 |  |   | 607 |  |
| Commercial                                           |   | 43,609 |  |   | 53,299 |  |   | 766 |  |
|   Consumer                                 |   | — |  |   | — |  |   | — |  |
| Total                                                |   | $ | 77,594 |  |   | $ | 99,414 |  |   | $ | 1,737 |  |
| PI loans with subsequent credit deterioration:       |   |   |   |   |   |   |
|   Commercial and agricultural              |   | $ | 11,533 |  |   | $ | 11,728 |  |   | $ | 524 |  |
|   Real estate - construction               |   | 2,285 |  |   | 2,236 |  |   | 200 |  |
|   Real estate - mortgage:                  |   |   |   |   |   |   |
|      1-4 family residential |   | 34,961 |  |   | 35,802 |  |   | 711 |  |
|      Commercial             |   | 141,974 |  |   | 145,704 |  |   | 3,388 |  |
|   Consumer                                 |   | 1,362 |  |   | 1,147 |  |   | 550 |  |
| Total                                                |   | $ | 192,115 |  |   | $ | 196,617 |  |   | $ | 5,373 |  |

----

Table of Contents

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                    |   | For Three Months Ended |   | For Three Months Ended |
|                                    |   | September 30, 2013 |   | September 30, 2012 |
|                                    |   | Average |   | Interest |   | Average |   | Interest |
| (dollars in thousands)                  |   | Recorded |   | Income |   | Recorded |   | Income |
|                                    |   | Investment |   | Recognized |   | Investment |   | Recognized |
| With no related allowance recorded:     |   |   |   |   |   |   |   |   |
|   Commercial and agricultural |   | $ | 434 |  |   | $ | — |  |   | $ | 1,557 |  |   | $ | 56 |  |
|   Real estate - construction  |   | 10,006 |  |   | 3 |  |   | 15,484 |  |   | 104 |  |
|   Real estate - mortgage:     |   |   |   |   |   |   |   |   |
| 1-4 family residential                  |   | 10,516 |  |   | — |  |   | 14,265 |  |   | 81 |  |
| Commercial                              |   | 27,844 |  |   | 4 |  |   | 44,480 |  |   | 567 |  |
|   Consumer                    |   | — |  |   | — |  |   | 162 |  |   | 4 |  |
| Total                                   |   | $ | 48,800 |  |   | $ | 7 |  |   | $ | 75,948 |  |   | $ | 812 |  |
| With an allowance recorded:             |   |   |   |   |   |   |   |   |
|   Commercial and agricultural |   | $ | — |  |   | $ | — |  |   | $ | 1,274 |  |   | $ | 6 |  |
|   Real estate - construction  |   | 97 |  |   | — |  |   | 2,802 |  |   | 9 |  |
|   Real estate - mortgage:     |   |   |   |   |   |   |   |   |
| 1-4 family residential                  |   | 2,605 |  |   | — |  |   | 6,436 |  |   | 41 |  |
| Commercial                              |   | 273 |  |   | — |  |   | 4,689 |  |   | 27 |  |
|   Consumer                    |   | — |  |   | — |  |   | 100 |  |   | 1 |  |
| Total                                   |   | $ | 2,975 |  |   | $ | — |  |   | $ | 15,301 |  |   | $ | 84 |  |
| Total:                                  |   |   |   |   |   |   |   |   |
|   Commercial and agricultural |   | $ | 434 |  |   | $ | — |  |   | $ | 2,831 |  |   | $ | 62 |  |
|   Real estate - construction  |   | 10,103 |  |   | 3 |  |   | 18,286 |  |   | 113 |  |
|   Real estate - mortgage:     |   |   |   |   |   |   |   |   |
| 1-4 family residential                  |   | 13,121 |  |   | — |  |   | 20,701 |  |   | 122 |  |
| Commercial                              |   | 28,117 |  |   | 4 |  |   | 49,169 |  |   | 594 |  |
|   Consumer                    |   | — |  |   | — |  |   | 262 |  |   | 5 |  |
| Total                                   |   | $ | 51,775 |  |   | $ | 7 |  |   | $ | 91,249 |  |   | $ | 896 |  |

----

Table of Contents

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                    |   | For Nine Months Ended |   | For Nine Months Ended |
|                                    |   | September 30, 2013 |   | September 30, 2012 |
|                                    |   | Average |   | Interest |   | Average |   | Interest |
| (dollars in thousands)                  |   | Recorded |   | Income |   | Recorded |   | Income |
|                                    |   | Investment |   | Recognized |   | Investment |   | Recognized |
| With no related allowance recorded:     |   |   |   |   |   |   |   |   |
|   Commercial and agricultural |   | $ | 455 |  |   | $ | 7 |  |   | $ | 1,879 |  |   | $ | 152 |  |
|   Real estate - construction  |   | 10,300 |  |   | 23 |  |   | 18,140 |  |   | 350 |  |
|   Real estate - mortgage:     |   |   |   |   |   |   |   |   |
| 1-4 family residential                  |   | 10,442 |  |   | 14 |  |   | 15,096 |  |   | 292 |  |
| Commercial                              |   | 29,288 |  |   | 58 |  |   | 46,051 |  |   | 1,388 |  |
|   Consumer                    |   | — |  |   | — |  |   | 279 |  |   | 6 |  |
| Total                                   |   | $ | 50,485 |  |   | $ | 102 |  |   | $ | 81,445 |  |   | $ | 2,188 |  |
| With an allowance recorded:             |   |   |   |   |   |   |   |   |
|   Commercial and agricultural |   | $ | 107 |  |   | $ | — |  |   | $ | 1,266 |  |   | $ | 36 |  |
|   Real estate - construction  |   | 220 |  |   | 6 |  |   | 2,873 |  |   | 32 |  |
|   Real estate - mortgage:     |   |   |   |   |   |   |   |   |
| 1-4 family residential                  |   | 1,682 |  |   | 4 |  |   | 6,869 |  |   | 163 |  |
| Commercial                              |   | 3,933 |  |   | — |  |   | 4,687 |  |   | 145 |  |
|   Consumer                    |   | 167 |  |   | 1 |  |   | 95 |  |   | 2 |  |
| Total                                   |   | $ | 6,109 |  |   | $ | 11 |  |   | $ | 15,790 |  |   | $ | 378 |  |
| Total:                                  |   |   |   |   |   |   |   |   |
|   Commercial and agricultural |   | $ | 562 |  |   | $ | 7 |  |   | $ | 3,145 |  |   | $ | 188 |  |
|   Real estate - construction  |   | 10,520 |  |   | 29 |  |   | 21,013 |  |   | 382 |  |
|   Real estate - mortgage:     |   |   |   |   |   |   |   |   |
| 1-4 family residential                  |   | 12,124 |  |   | 18 |  |   | 21,965 |  |   | 455 |  |
| Commercial                              |   | 33,221 |  |   | 58 |  |   | 50,738 |  |   | 1,533 |  |
|   Consumer                    |   | 167 |  |   | 1 |  |   | 374 |  |   | 8 |  |
| Total                                   |   | $ | 56,594 |  |   | $ | 113 |  |   | $ | 97,235 |  |   | $ | 2,566 |  |

----

Table of Contents

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                        | For Three Months Ended |   | For Three Months Ended |
|                        | September 30, 2013 |   | September 30, 2012 |
| (dollars in thousands)      | Number |   | Recorded |   | Contract |   | Number |   | Recorded |   | Contract |
|                        | of Loans |   | Investment |   | Pricing |   | of Loans |   | Investment |   | Pricing |
| Commercial and agricultural | — |  |   | $ | — |  |   | $ | — |  |   | — |  |   | $ | — |  |   | $ | — |  |
| Real estate - construction  | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Real estate - mortgage:     |   |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential      | — |  |   | — |  |   | — |  |   | 1 |  |   | 602 |  |   | 540 |  |
| Commercial                  | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Consumer                    | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Total                       | — |  |   | $ | — |  |   | $ | — |  |   | 1 |  |  | $ | 602 |  |  | $ | 540 |  |

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                        | For Nine Months Ended |   | For Nine Months Ended |
|                        | September 30, 2013 |   | September 30, 2012 |
| (dollars in thousands)      | Number |   | Recorded |   | Contract |   | Number |   | Recorded |   | Contract |
|                        | of Loans |   | Investment |   | Pricing |   | of Loans |   | Investment |   | Pricing |
| Commercial and agricultural | — |  |   | $ | — |  |   | $ | — |  |   | — |  |   | $ | — |  |   | $ | — |  |
| Real estate - construction  | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Real estate - mortgage:     |   |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential      | — |  |   | — |  |   | — |  |   | 7 |  |   | 1,865 |  |   | 1,896 |  |
| Commercial                  | — |  |   | — |  |   | — |  |   | 2 |  |   | 4,402 |  |   | 4,590 |  |
| Consumer                    | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Total                       | — |  |   | $ | — |  |   | $ | — |  |   | 9 |  |  | $ | 6,267 |  |   | $ | 6,486 |  |

----

Table of Contents

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                            |   | At September 30, 2013 |
| (dollars in thousands)                          |   | Purchased Impaired |   | Purchased Contractual |   | Total Purchased Loans |   | UnpaidPrincipalBalance |
| Commercial and agricultural                     |   | $ | 11,418 |  |   | $ | 4,874 |  |   | $ | 16,292 |  |   | $ | 15,597 |  |
| Real estate - construction                      |   | 10,196 |  |   | — |  |   | 10,196 |  |   | 9,902 |  |
| Real estate - mortgage:                         |   |   |   |   |   |   |   |   |
|    1-4 family residential        |   | 29,712 |  |   | 22,833 |  |   | 52,545 |  |   | 53,476 |  |
|    Commercial                    |   | 124,178 |  |   | 381 |  |   | 124,559 |  |   | 125,395 |  |
| Consumer                                        |   | 1,089 |  |   | — |  |   | 1,089 |  |   | 860 |  |
|        Total |   | $ | 176,593 |  |   | $ | 28,088 |  |   | $ | 204,681 |  |   | $ | 205,230 |  |

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                            |   | At December 31, 2012 |
| (dollars in thousands)                          |   | Purchased Impaired |   | Purchased Contractual |   | TotalPurchased Loans |   | UnpaidPrincipalBalance |
| Commercial and agricultural                     |   | $ | 14,666 |  |   | $ | 7,311 |  |   | $ | 21,977 |  |   | $ | 21,692 |  |
| Real estate - construction                      |   | 2,682 |  |   | — |  |   | 2,682 |  |   | 2,677 |  |
| Real estate - mortgage:                         |   |   |   |   |   |   |   |   |
|    1-4 family residential        |   | 39,215 |  |   | 27,484 |  |   | 66,699 |  |   | 69,200 |  |
|    Commercial                    |   | 170,467 |  |   | 49 |  |   | 170,516 |  |   | 176,347 |  |
| Consumer                                        |   | 1,362 |  |   | — |  |   | 1,362 |  |   | 1,144 |  |
|        Total |   | $ | 228,392 |  |   | $ | 34,844 |  |   | $ | 263,236 |  |   | $ | 271,060 |  |

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                           |   | For Three Months Ended |   | For Three Months Ended |
|                                           |   | September 30, 2013 |   | September 30, 2012 |
|                                           |   | Purchased Impaired |   | Purchased Impaired |
| (dollars in thousands)                         |   | Carrying Amount |   | FutureAccretion |   | Carrying Amount |   | Future Accretion |
| Balance, beginning of period                   |   | $ | 189,159 |  |   | $ | 28,706 |  |   | $ | 287,092 |  |   | $ | 41,133 |  |
|   Accretion                          |   | 4,283 |  |   | (4,283 | ) |   | 4,568 |  |   | (4,568 | ) |
|   Increase in future accretion       |   | — |  |   | — |  |   | — |  |   | — |  |
|   Payments received                  |   | (16,225 | ) |   | — |  |   | (34,043 | ) |   | — |  |
|   Foreclosed and transferred to OREO |   | (624 | ) |   | — |  |   | (5,412 | ) |   | — |  |
| Subtotal before allowance                      |   | 176,593 |  |   | 24,423 |  |   | 252,205 |  |   | 36,565 |  |
| Allowance for credit losses                    |   | (4,066 | ) |   | — |  |   | (3,296 | ) |   | — |  |
| Net carrying amount, end of period             |   | $ | 172,527 |  |   | $ | 24,423 |  |   | $ | 248,909 |  |   | $ | 36,565 |  |

----

Table of Contents

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                           |   | For Nine Months Ended |   | For Nine Months Ended |
|                                           |   | September 30, 2013 |   | September 30, 2012 |
|                                           |   | Purchased Impaired |   | Purchased Impaired |
| (dollars in thousands)                         |   | Carrying Amount |   | FutureAccretion |   | Carrying Amount |   | Future Accretion |
| Balance, beginning of period                   |   | $ | 228,392 |  |   | $ | 30,299 |  |   | $ | 330,836 |  |   | $ | 47,804 |  |
|   Accretion                          |   | 12,677 |  |   | (12,677 | ) |   | 15,831 |  |   | (15,831 | ) |
| Increase in future accretion                   |   | — |  |   | 6,801 |  |   | — |  |   | 4,592 |  |
|   Payments received                  |   | (62,556 | ) |   | — |  |   | (84,944 | ) |   | — |  |
|   Foreclosed and transferred to OREO |   | (1,920 | ) |   | — |  |   | (9,518 | ) |   | — |  |
| Subtotal before allowance                      |   | 176,593 |  |   | 24,423 |  |   | 252,205 |  |   | 36,565 |  |
| Allowance for credit losses                    |   | (4,066 | ) |   | — |  |   | (3,296 | ) |   | — |  |
| Net carrying amount, end of period             |   | $ | 172,527 |  |   | $ | 24,423 |  |   | $ | 248,909 |  |   | $ | 36,565 |  |

|                                                                            |
|----------------------------------------------------------------------------|
|                                                                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                       |   | For Three Months Ended |   | For Nine Months Ended |
| (dollars in thousands)                                                     |   | September 30, 2013 |   | September 30, 2012 |   | September 30, 2013 |   | September 30, 2012 |
| Balance, beginning of period                                               |   | $ | 25,085 |  |   | $ | 38,551 |  |   | $ | 29,314 |  |   | $ | 39,360 |  |
| Provision for (recoveries of) losses charged to continuing operations      |   | (350 | ) |   | 32 |  |   | (1,297 | ) |   | 10,877 |  |
| Net charge-offs:                                                           |   |   |   |   |   |   |   |   |
| Charge-offs                                                                |   | (1,724 | ) |   | (9,276 | ) |   | (10,836 | ) |   | (23,580 | ) |
| Recoveries                                                                 |   | 2,376 |  |   | 1,552 |  |   | 8,206 |  |   | 4,202 |  |
| Net recoveries (charge-offs)                                               |   | 652 |  |   | (7,724 | ) |   | (2,630 | ) |   | (19,378 | ) |
| Balance, end of period                                                     |   | $ | 25,387 |  |   | $ | 30,859 |  |   | $ | 25,387 |  |   | $ | 30,859 |  |
| Annualized net charge-offs (recoveries) during the period to average loans |   | (0.22 | )% |   | 2.46 | % |   | 0.31 | % |   | 2.06 | % |
| Annualized net charge-offs (recoveries) during the period to ALL           |   | (10.19 | )% |   | 100.12 | % |   | 13.85 | % |   | 83.73 | % |
| Allowance for loan losses to loans held for investment (1)                 |   | 2.12 |  % |   | 2.51 | % |   | 2.12 | % |   | 2.51 | % |

|                                      |
|--------------------------------------|
|                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                 |   |   |   |   |   | Real Estate - Mortgage |   |   |   |   |
| (dollars in thousands)               |   | Commercial and Agricultural |   | Real Estate - Construction |   | 1-4 Family Residential |   | Commercial |   | Consumer |   | Total |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| ALL:                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning balance at July 1, 2013    |   | $ | 2,192 |  |   | $ | 5,652 |  |   | $ | 7,400 |  |   | $ | 7,387 |  |   | $ | 2,454 |  |   | $ | 25,085 |  |
| Charge-offs                          |   | (2 | ) |   | (36 | ) |   | (394 | ) |   | (592 | ) |   | (700 | ) |   | (1,724 | ) |
| Recoveries                           |   | 465 |  |   | 1,039 |  |   | 285 |  |   | 357 |  |   | 230 |  |   | 2,376 |  |
| Provision                            |   | (45 | ) |   | (1,560 | ) |   | 1,493 |  |   | (677 | ) |   | 439 |  |   | (350 | ) |
| Ending balance at September 30, 2013 |   | $ | 2,610 |  |   | $ | 5,095 |  |   | $ | 8,784 |  |   | $ | 6,475 |  |   | $ | 2,423 |  |   | $ | 25,387 |  |

----

Table of Contents

|                                      |
|--------------------------------------|
|                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                 |   |   |   |   |   | Real Estate - Mortgage |   |   |   |   |
| (dollars in thousands)               |   | Commercial and Agricultural |   | Real Estate - Construction |   | 1-4 Family Residential |   | Commercial |   | Consumer |   | Total |
| ALL:                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning balance at July 1, 2012    |   | $ | 7,151 |  |   | $ | 11,320 |  |   | $ | 8,784 |  |   | $ | 9,218 |  |   | $ | 2,078 |  |   | $ | 38,551 |  |
| Charge-offs                          |   | (1,156 | ) |   | (2,465 | ) |   | (1,646 | ) |   | (2,602 | ) |   | (1,407 | ) |   | (9,276 | ) |
| Recoveries                           |   | 286 |  |   | 323 |  |   | 69 |  |   | 388 |  |   | 486 |  |   | 1,552 |  |
| Provision                            |   | (1,128 | ) |   | (3,195 | ) |   | 2,787 |  |   | 54 |  |   | 1,514 |  |   | 32 |  |
| Ending balance at September 30, 2012 |   | $ | 5,153 |  |   | $ | 5,983 |  |   | $ | 9,994 |  |   | $ | 7,058 |  |   | $ | 2,671 |  |   | $ | 30,859 |  |

|                                      |
|--------------------------------------|
|                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                 |   |   |   |   |   | Real Estate - Mortgage |   |   |   |   |
| (dollars in thousands)               |   | Commercial and Agricultural |   | Real Estate - Construction |   | 1-4 Family Residential |   | Commercial |   | Consumer |   | Total |
|                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| ALL:                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning balance at January 1, 2013 |   | $ | 3,238 |  |   | $ | 4,987 |  |   | $ | 8,701 |  |   | $ | 9,627 |  |   | $ | 2,761 |  |   | $ | 29,314 |  |
| Charge-offs                          |   | (1,196 | ) |   | (964 | ) |   | (3,563 | ) |   | (2,853 | ) |   | (2,260 | ) |   | (10,836 | ) |
| Recoveries                           |   | 1,376 |  |   | 2,106 |  |   | 962 |  |   | 2,363 |  |   | 1,399 |  |   | 8,206 |  |
| Provision                            |   | (808 | ) |   | (1,034 | ) |   | 2,684 |  |   | (2,662 | ) |   | 523 |  |   | (1,297 | ) |
| Ending balance at September 30, 2013 |   | $ | 2,610 |  |   | $ | 5,095 |  |   | $ | 8,784 |  |   | $ | 6,475 |  |   | $ | 2,423 |  |   | $ | 25,387 |  |

|                                      |
|--------------------------------------|
|                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                 |   |   |   |   |   | Real Estate - Mortgage |   |   |   |   |
| (dollars in thousands)               |   | Commercial and Agricultural |   | Real Estate - Construction |   | 1-4 Family Residential |   | Commercial |   | Consumer |   | Total |
| ALL:                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning balance at January 1, 2012 |   | $ | 5,776 |  |   | $ | 11,995 |  |   | $ | 8,885 |  |   | $ | 11,063 |  |   | $ | 1,641 |  |   | $ | 39,360 |  |
| Charge-offs                          |   | (2,774 | ) |   | (8,761 | ) |   | (4,805 | ) |   | (3,594 | ) |   | (3,646 | ) |   | (23,580 | ) |
| Recoveries                           |   | 777 |  |   | 1,169 |  |   | 447 |  |   | 725 |  |   | 1,084 |  |   | 4,202 |  |
| Provision                            |   | 1,374 |  |   | 1,580 |  |   | 5,467 |  |   | (1,136 | ) |   | 3,592 |  |   | 10,877 |  |
| Ending balance at September 30, 2012 |   | $ | 5,153 |  |   | $ | 5,983 |  |   | $ | 9,994 |  |   | $ | 7,058 |  |   | $ | 2,671 |  |   | $ | 30,859 |  |

----

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         |   | $ | — |  |   | $ | 1 |  |   | $ | 446 |  |   | $ | 39 |  |   | $ | — |  |   | $ | 486 |  |
|   Collectively evaluated for impairment         |   | 2,576 |  |   | 4,347 |  |   | 7,811 |  |   | 3,869 |  |   | 2,232 |  |   | 20,835 |  |
|   PI loans evaluated for credit impairment      |   | 34 |  |   | 747 |  |   | 527 |  |   | 2,567 |  |   | 191 |  |   | 4,066 |  |
|   PI loans with no credit deterioration         |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Total ALL                                                 |   | $ | 2,610 |  |   | $ | 5,095 |  |   | $ | 8,784 |  |   | $ | 6,475 |  |   | $ | 2,423 |  |   | $ | 25,387 |  |
| Loans held for investment                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|   Individually evaluated for impairment         |   | $ | 416 |  |   | $ | 9,998 |  |   | $ | 13,060 |  |   | $ | 28,846 |  |   | $ | — |  |   | $ | 52,320 |  |
|   Collectively evaluated for impairment         |   | 57,783 |  |   | 47,348 |  |   | 575,490 |  |   | 242,062 |  |   | 43,546 |  |   | 966,229 |  |
|   PI loans with subsequent credit deterioration |   | 8,821 |  |   | 8,258 |  |   | 26,661 |  |   | 103,028 |  |   | 1,084 |  |   | 147,852 |  |
|   PI loans with no credit deterioration         |   | 2,597 |  |   | 1,938 |  |   | 3,051 |  |   | 21,150 |  |   | 5 |  |   | 28,741 |  |
| Total loans                                               |   | $ | 69,617 |  |   | $ | 67,542 |  |   | $ | 618,262 |  |   | $ | 395,086 |  |   | $ | 44,635 |  |   | $ | 1,195,142 |  |

|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                      |   |   |   |   |   | Real Estate - Mortgage |   |   |   |   |
| (dollars in thousands)                                    |   | Commercial and Agricultural |   | Real Estate - Construction |   | 1-4 Family Residential |   | Commercial |   | Consumer |   | Total |
| ALL:                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
|   Individually evaluated for impairment         |   | $ | 282 |  |   | $ | 82 |  |   | $ | 607 |  |   | $ | 766 |  |   | $ | — |  |   | $ | 1,737 |  |
|   Collectively evaluated for impairment         |   | 2,432 |  |   | 4,705 |  |   | 7,383 |  |   | 5,473 |  |   | 2,211 |  |   | 22,204 |  |
|   PI loans evaluated for credit impairment      |   | 524 |  |   | 200 |  |   | 711 |  |   | 3,388 |  |   | 550 |  |   | 5,373 |  |
|   PI loans with no credit deterioration         |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Total ALL                                                 |   | $ | 3,238 |  |   | $ | 4,987 |  |   | $ | 8,701 |  |   | $ | 9,627 |  |   | $ | 2,761 |  |   | $ | 29,314 |  |
| Loans held for investment                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|   Individually evaluated for impairment         |   | $ | 2,334 |  |   | $ | 13,533 |  |   | $ | 18,118 |  |   | $ | 43,609 |  |   | $ | — |  |   | $ | 77,594 |  |
|   Collectively evaluated for impairment         |   | 62,704 |  |   | 42,199 |  |   | 496,205 |  |   | 227,760 |  |   | 42,181 |  |   | 871,049 |  |
|   PI loans with subsequent credit deterioration |   | 11,533 |  |   | 2,285 |  |   | 34,961 |  |   | 141,974 |  |   | 1,362 |  |   | 192,115 |  |
|   PI loans with no credit deterioration         |   | 3,133 |  |   | 397 |  |   | 4,254 |  |   | 28,493 |  |   | — |  |   | 36,277 |  |
| Total loans                                               |   | $ | 79,704 |  |   | $ | 58,414 |  |   | $ | 553,538 |  |   | $ | 441,836 |  |   | $ | 43,543 |  |   | $ | 1,177,035 |  |

----

Table of Contents

|                                          |
|------------------------------------------|
|                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                     |   | Three Months Ended September 30, 2013 |   | For Three Months Ended September 30, 2012 |
|                                     |   |   |   | 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              |   | — |  |   | $ | — |  |   | $ | — |  |   | — |  |   | $ | — |  |   | $ | — |  |
| Real estate - construction               |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Real estate - mortgage:                  |   |   |   |   |   |   |   |   |   |   |   |   |
|    1-4 family residential |   | — |  |   | — |  |   | — |  |   | 1 |  |   | 202 |  |   | 202 |  |
|    Commercial             |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Consumer                                 |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
|     Total            |   | — |  |   | $ | — |  |   | $ | — |  |   | 1 |  |   | $ | 202 |  |   | $ | 202 |  |

|                                          |
|------------------------------------------|
|                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                     |   | For Nine Months Ended September 30, 2013 |   | For Nine Months Ended September 30, 2012 |
|                                     |   |   |   | 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              |   | — |  |   | $ | — |  |   | $ | — |  |   | — |  |   | $ | — |  |   | $ | — |  |
| Real estate - construction               |   | — |  |   | — |  |   | — |  |   | 9 |  |   | 2,526 |  |   | 1,603 |  |
| Real estate - mortgage:                  |   |   |   |   |   |   |   |   |   |   |   |   |
|    1-4 family residential |   | 9 |  |   | 2,733 |  |   | 2,630 |  |   | 3 |  |   | 260 |  |   | 260 |  |
|    Commercial             |   | 2 |  |   | 1,611 |  |   | 1,195 |  |   | 8 |  |   | 1,356 |  |   | 1,353 |  |
| Consumer                                 |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
|     Total            |   | 11 |  |   | $ | 4,344 |  |   | $ | 3,825 |  |   | 20 |  |   | $ | 4,142 |  |   | $ | 3,216 |  |

----

Table of Contents

|         |                                                               |
|---------|---------------------------------------------------------------|
| • | Straight Lines of Credit - Unfunded balance of line of credit |

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

|         |                                                      |
|---------|------------------------------------------------------|
| • | Letters of Credit - a 10% utilization is applied |

|                                                   |
|---------------------------------------------------|
|                                                   |  |  |  |  |  |  |  |  |
| (dollars in thousands)                            |   | September 30, 2013 |   | December 31, 2012 |  |
| Real estate acquired in settlement of loans       |   | $ | 33,123 |  |   | $ | 62,796 |  |
| Personal property acquired in settlement of loans |   | 56 |  |   | 335 |  |
| Total property acquired in settlement of loans    |   | $ | 33,179 |  |   | $ | 63,131 |  |

|                                                                    |
|--------------------------------------------------------------------|
|                                                                    |  |  |  |  |  |  |  |  |
|                                                               |   | For Three Months Ended |
| (dollars in thousands)                                             |   | September 30, 2013 |   | September 30, 2012 |
| Real estate acquired in settlement of loans, beginning of period   |   | $ | 35,662 |  |   | $ | 86,183 |  |
| Plus:  New real estate acquired in settlement of loans             |   | 3,610 |  |   | 9,746 |  |
| Less:  Sales of real estate acquired in settlement of loans        |   | (6,411 | ) |   | (13,826 | ) |
| Less:  Write-downs and net gain (loss) on sales charged to expense |   | 262 |  |   | (1,621 | ) |
| Real estate acquired in settlement of loans, end of period         |   | $ | 33,123 |  |   | $ | 80,482 |  |

|                                                                  |
|------------------------------------------------------------------|
|                                                                  |  |  |  |  |  |  |  |  |
|                                                             |   | For Nine Months Ended |
| (dollars in thousands)                                           |   | September 30, 2013 |   | September 30, 2012 |
| Real estate acquired in settlement of loans, beginning of period |   | $ | 62,796 |  |   | $ | 110,009 |  |
| Plus:  New real estate acquired in settlement of loans           |   | 10,403 |  |   | 24,766 |  |
| Less:  Sales of real estate acquired in settlement of loans      |   | (37,072 | ) |   | (38,202 | ) |
| Less:  Write-downs and net loss on sales charged to expense      |   | (3,004 | ) |   | (16,091 | ) |
| Real estate acquired in settlement of loans, end of period       |   | $ | 33,123 |  |   | $ | 80,482 |  |

----

Table of Contents

|                                                                                   |
|-----------------------------------------------------------------------------------|
|                                                                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands, except per share data)                                     |   | For Three Months Ended |   | For Nine Months Ended |
|                                                                              |   | September 30, 2013 |   | September 30, 2012 |   | September 30, 2013 |   | September 30, 2012 |
| Income (Loss) from continuing operations, net of tax                              |   | $ | 4,006 |  |   | $ | (4,712 | ) |   | $ | (3,773 | ) |   | $ | (33,682 | ) |
| Loss from discontinued operations, net of tax                                     |   | — |  |   | — |  |   | — |  |   | (27 | ) |
| Net income (loss) to common shareholders                                          |   | $ | 4,006 |  |   | $ | (4,712 | ) |   | $ | (3,773 | ) |   | $ | (33,709 | ) |
| Weighted average number of common shares outstanding - basic and diluted          |   | 21,738,770 |  |   | 21,588,027 |  |   | 21,722,536 |  |   | 21,294,727 |  |
| Net income (loss) per common share from continuing operations - basic and diluted |   | $ | 0.18 |  |   | $ | (0.22 | ) |   | $ | (0.17 | ) |   | $ | (1.58 | ) |
| Net loss per common share from discontinued operations - basic and diluted        |   | — |  |   | — |  |   | — |  |   | — |  |
| Net income (loss) per common share - basic and diluted                            |   | $ | 0.18 |  |   | $ | (0.22 | ) |   | $ | (0.17 | ) |   | $ | (1.58 | ) |

----

Table of Contents

|                                                    |
|----------------------------------------------------|
|                                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                               |   | Gain (Loss) Recognized |
| (dollars in thousands)                             |   | For Three Months Ended |   | For Nine Months Ended |
|                                               |   | September 30, 2013 |   | September 30, 2012 |   | September 30, 2013 |   | September 30, 2012 |
| Derivatives not designated as hedging instruments: |   |   |   |   |   |   |   |   |
| Mortgage loan rate lock commitments                |   | $ | 20 |  |   | $ | 13 |  |   | $ | 8 |  |   | $ | 13 |  |
| Mortgage loan forward sales                        |   | (102 | ) |   | 120 |  |   | (196 | ) |   | 298 |  |
| Total                                              |   | $ | (82 | ) |   | $ | 133 |  |   | $ | (188 | ) |   | $ | 311 |  |
|                                               |   |   |   |   |   |   |   |   |

----

Table of Contents

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)                                |   | Total |   | Level 1 |   | Level 2 |   | Level 3 |
| Assets:                                               |   |   |   |   |   |   |   |   |
| Available-for-sale debt securities:                   |   |   |   |   |   |   |   |   |
| U.S. government sponsored agencies                    |   | $ | 2,082 |  |   | $ | — |  |   | $ | 2,082 |  |   | $ | — |  |
| Residential mortgage-backed securities-GSE            |   | 357,447 |  |   | — |  |   | 357,447 |  |   | — |  |
| Residential mortgage-backed securities-Private        |   | 21,258 |  |   | — |  |   | 21,258 |  |   | — |  |
| Commercial mortgage-backed securities-GSE             |   | 21,644 |  |   |   |   | 21,644 |  |   |   |
| Commercial mortgage-backed securities-Private         |   | 9,633 |  |   | — |  |   | 9,633 |  |   | — |  |
| Business Development Company investment               |   | 2,640 |  |   | 2,640 |  |   | — |  |   | — |  |
| Corporate notes                                       |   | 25,008 |  |   | — |  |   | 25,008 |  |   | — |  |
| Total available-for-sale debt securities              |   | 439,712 |  |   | 2,640 |  |   | 437,072 |  |   | — |  |
| Mortgage servicing rights                             |   | 1,482 |  |   | — |  |   | — |  |   | 1,482 |  |
| Total assets at fair value from continuing operations |   | $ | 441,194 |  |   | $ | 2,640 |  |   | $ | 437,072 |  |   | $ | 1,482 |  |

----

Table of Contents

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)                                |   | Total |   | Level 1 |   | Level 2 |   | Level 3 |
| Assets:                                               |   |   |   |   |   |   |   |   |
| Available-for-sale debt securities:                   |   |   |   |   |   |   |   |   |
| U.S. Treasury and government agencies                 |   | $ | 6,981 |  |   | $ | — |  |   | $ | 6,981 |  |   | $ | — |  |
| U.S. government sponsored agencies                    |   | 22,173 |  |   | — |  |   | 22,173 |  |   | — |  |
| States and political subdivisions                     |   | 6,038 |  |   | — |  |   | 6,038 |  |   | — |  |
| Residential mortgage-backed securities-GSE            |   | 441,074 |  |   | — |  |   | 441,074 |  |   | — |  |
| Residential mortgage-backed securities-Private        |   | 22,945 |  |   | — |  |   | 22,945 |  |   | — |  |
| Commercial mortgage-backed securities-GSE             |   | 23,359 |  |   | — |  |   | 23,359 |  |   | — |  |
| Commercial mortgage-backed securities-Private         |   | 5,317 |  |   | — |  |   | 5,317 |  |   | — |  |
| Corporate notes                                       |   | 36,963 |  |   | — |  |   | 36,963 |  |   | — |  |
| Total available-for-sale debt securities              |   | 564,850 |  |   | — |  |   | 564,850 |  |   | — |  |
| Mortgage servicing rights                             |   | 726 |  |   | — |  |   | — |  |   | 726 |  |
| Total assets at fair value from continuing operations |   | $ | 565,576 |  |   | $ | — |  |   | $ | 564,850 |  |   | $ | 726 |  |

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |
|                                                  |   | Fair Value Measurements Using Significant |
|                                                  |   | Unobservable Inputs (Level 3) |
|                                                  |   | Mortgage Servicing Rights |
| (dollars in thousands)                                |   | Three Months Ended September 30, |
|                                                  |   | 2013 |   | 2012 |
| Balance, beginning of period                          |   | $ | 1,337 |  |   | $ | 25 |  |
| Total gains or losses (realized/unrealized):          |   |   |   |   |
| Included in earnings, gross                           |   | 235 |  |   | 225 |  |
|       Less amortization |   | (90 | ) |   | (2 | ) |
| Balance, end of period                                |   | $ | 1,482 |  |   | $ | 248 |  |

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |
|                                                  |   | Fair Value Measurements Using Significant |
|                                                  |   | Unobservable Inputs (Level 3) |
|                                                  |   | Mortgage Servicing Rights |
| (dollars in thousands)                                |   | Nine Months Ended September 30, |
|                                                  |   | 2013 |   | 2012 |
| Beginning balance at January 1,                       |   | $ | 726 |  |   | $ | — |  |
| Total gains or losses (realized/unrealized):          |   |   |   |   |
| Included in earnings, gross                           |   | 959 |  |   | 250 |  |
|       Less amortization |   | (203 | ) |   | (2 | ) |
| Balance, end of period                                |   | $ | 1,482 |  |   | $ | 248 |  |

----

Table of Contents

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)                                |   | Total |   | Level 1 |   | Level 2 |   | Level 3 |
| Impaired loans, net                                   |   | $ | 2,477 |  |   | $ | — |  |   | $ | — |  |   | $ | 2,477 |  |
| Other real estate owned                               |   | 25,271 |  |   | — |  |   | — |  |   | 25,271 |  |
| Total assets at fair value from continuing operations |   | $ | 27,748 |  |   | $ | — |  |   | $ | — |  |   | $ | 27,748 |  |

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)                                |   | Total |   | Level 1 |   | Level 2 |   | Level 3 |
| Impaired loans, net                                   |   | $ | 13,575 |  |   | $ | — |  |   | $ | — |  |   | $ | 13,575 |  |
| Other real estate owned                               |   | 48,480 |  |   | — |  |   | — |  |   | 48,480 |  |
| Total assets at fair value from continuing operations |   | $ | 62,055 |  |   | $ | — |  |   | $ | — |  |   | $ | 62,055 |  |

|                           |
|---------------------------|
|                           |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)    |   | Fair Value at September 30, 2013 |   | Valuation Techniques |   | UnobservableInput |   | Range |
|                           |   |   |   |   |   |   |   |   |
| Impaired loans, net       |   | $ | 2,477 |  |   | Discounted appraisals |   | Collateral discounts |   | 6.00% - 40.00% |
| Other real estate owned   |   | 25,271 |  |   | Discounted appraisals |   | Collateral discounts |   | 6.00% - 40.00% |
| Mortgage servicing rights |   | 1,482 |  |   | Discounted cash flows |   | Prepayment rate |   | 10.00% - 25.00% |
| Mortgage servicing rights |   |   |   |   |   | Discount rate |   | 6.00% - 10.00% |

|                           |
|---------------------------|
|                           |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)    |   | Fair Value atDecember 31, 2012 |   | Valuation Techniques |   | UnobservableInput |   | Range |
|                      |   |   |   |   |   |   |   |   |
| Impaired loans, net       |   | $ | 13,575 |  |   | Discounted appraisals |   | Collateral discounts |   | 6.00%-40.00% |
| Other real estate owned   |   | 48,480 |  |   | Discounted appraisals |   | Collateral discounts |   | 6.00%-40.00% |
| Mortgage servicing rights |   | 726 |  |   | Discounted cash flows |   | Prepayment rate |   | 10.00% - 30.00% |
| Mortgage servicing rights |   |   |   |   |   | Discount rate |   | 6.00% - 12.00% |

----

Table of Contents

----

Table of Contents

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                            |   | At September 30, 2013 |
| (dollars in thousands)                          |   | Carrying Value |   | Estimated Fair Value |   | Level 1 |   | Level 2 |   | Level 3 |
| Financial Assets of Continuing Operations:      |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                       |   | $ | 103,074 |  |   | $ | 103,074 |  |   | $ | 103,074 |  |   | $ | — |  |   | $ | — |  |
| Investment securities:  Available-for-sale      |   | 439,712 |  |   | 439,712 |  |   | 2,640 |  |   | 437,072 |  |   | — |  |
| Investment securities:  Held-to-maturity        |   | 153,684 |  |   | 146,474 |  |   | — |  |   | 146,474 |  |   | — |  |
| Loans held for sale                             |   | 2,734 |  |   | 2,734 |  |   | — |  |   | 2,734 |  |   | — |  |
| Loans, net                                      |   | 1,169,755 |  |   | 1,137,425 |  |   | — |  |   | — |  |   | 1,137,425 |  |
| Accrued interest receivable                     |   | 6,527 |  |   | 6,527 |  |   | — |  |   | 1,735 |  |   | 4,792 |  |
| Financial Liabilities of Continuing Operations: |   |   |   |   |   |   |   |   |   |   |
| Deposits                                        |   | 1,790,608 |  |   | 1,791,409 |  |   | — |  |   | 1,791,409 |  |   | — |  |
| Retail repurchase agreements                    |   | 12,422 |  |   | 12,422 |  |   | — |  |   | 12,422 |  |   | — |  |
| Federal Home Loan Bank advances                 |   | 73,295 |  |   | 77,010 |  |   | — |  |   | 77,010 |  |   | — |  |
| Long term notes payable                         |   | 5,244 |  |   | 5,244 |  |   | — |  |   | — |  |   | 5,244 |  |
| Junior subordinated debentures                  |   | 56,702 |  |   | 21,818 |  |   | — |  |   | — |  |   | 21,818 |  |
| Accrued interest payable                        |   | 2,410 |  |   | 2,410 |  |   | — |  |   | 439 |  |   | 1,971 |  |

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                            |   | At December 31, 2012 |
| (dollars in thousands)                          |   | Carrying Value |   | Estimated Fair Value |   | Level 1 |   | Level 2 |   | Level 3 |
| Financial Assets of Continuing Operations:      |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                       |   | $ | 239,610 |  |   | $ | 239,610 |  |   | $ | 239,610 |  |   | $ | — |  |   | $ | — |  |
| Investment securities:  Available-for-sale      |   | 564,850 |  |   | 564,850 |  |   | — |  |   | 564,850 |  |   | — |  |
| Loans held for sale                             |   | 6,974 |  |   | 6,974 |  |   | — |  |   | 6,974 |  |   | — |  |
| Loans, net                                      |   | 1,147,721 |  |   | 1,140,088 |  |   | — |  |   | — |  |   | 1,140,088 |  |
| Accrued interest receivable                     |   | 6,102 |  |   | 6,102 |  |   | — |  |   | 1,812 |  |   | 4,290 |  |
| Financial Liabilities of Continuing Operations: |   |   |   |   |   |   |   |   |   |   |
| Deposits                                        |   | 1,906,988 |  |   | 1,910,927 |  |   | — |  |   | 1,910,927 |  |   | — |  |
| Retail repurchase agreements                    |   | 8,675 |  |   | 8,675 |  |   | — |  |   | 8,675 |  |   | — |  |
| Federal Home Loan Bank advances                 |   | 58,328 |  |   | 62,950 |  |   | — |  |   | 62,950 |  |   | — |  |
| Junior subordinated debentures                  |   | 56,702 |  |   | 18,760 |  |   | — |  |   | — |  |   | 18,760 |  |
| Accrued interest payable                        |   | 2,111 |  |   | 2,111 |  |   | — |  |   | 937 |  |   | 1,174 |  |

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Table of Contents

|                                                                  |
|------------------------------------------------------------------|
|                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |
| (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 income (loss) before reclassifications       |   | (12,221 | ) |   | — |  |   | (12,221 | ) |
| Amounts reclassified from accumulated other comprehensive income |   | (1,679 | ) |   | (461 | ) |   | (2,140 | ) |
| Net current period other comprehensive income                    |   | (13,900 | ) |   | (461 | ) |   | (14,361 | ) |
| Ending balance September 30, 2013                                |   | $ | (10,250 | ) |   | $ | (4,434 | ) |   | $ | (14,684 | ) |

|                                          |
|------------------------------------------|
|                                          |  |  |  |  |  |  |  |  |  |
| (Dollars in thousands)                   | Amount Reclassified from AOCI |   |   |
|                                     | Three Months Ended September 30, 2013 |   | Nine Months Ended September 30, 2013 |   | Line Item in the Consolidated Statement of Operations |
| Available for sale securities:           |   |   |   |   |   |
| Net realized gains on sale of securities | $ | (50 | ) |   | $ | (2,773 | ) |   | Securities gains (losses), net |
| Income tax benefit (expense)             | 19 |  |   | 1,095 |  |   | Income tax benefit (expense) |
| Total, net of tax                        | (31 | ) |   | (1,678 | ) |   |   |
|                                     |   |   |   |   |   |
| Defined benefit plan items:              |   |   |   |   |   |
|    Net actuarial gains    | (249 | ) |   | (762 | ) |   | Personnel expense |
| Income tax benefit (expense)             | 95 |  |   | 301 |  |   | Income tax benefit (expense) |
| Total, net of tax                        | (154 | ) |   | (461 | ) |   |   |
| Total reclassifications for the period   | $ | (185 | ) |   | $ | (2,139 | ) |   |   |

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Table of Contents

|         |                                                                                                           |
|---------|-----------------------------------------------------------------------------------------------------------|
| • | 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. |

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|                                                                                   |
|-----------------------------------------------------------------------------------|
|                                                                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands, except per share data)                                     |   | As of and for Three Months Ended |   | As of and for Nine Months Ended |
|                                                                              |   | September 30, 2013 |   | September 30, 2012 |   | September 30, 2013 |   | September 30, 2012 |
| Income Statement Data                                                             |   |   |   |   |   |   |   |   |
| Net interest income                                                               |   | $ | 17,382 |  |   | $ | 15,202 |  |   | $ | 47,969 |  |   | $ | 46,431 |  |
| Provision for (recovery of) loan losses                                           |   | (350 | ) |   | 32 |  |   | (1,297 | ) |   | 10,877 |  |
| Noninterest income                                                                |   | 4,487 |  |   | 4,643 |  |   | 16,267 |  |   | 15,001 |  |
| Noninterest expense                                                               |   | 17,927 |  |   | 24,602 |  |   | 66,931 |  |   | 84,365 |  |
| Income (Loss) from continuing operations, before income taxes                     |   | 4,292 |  |   | (4,789 | ) |   | (1,398 | ) |   | (33,810 | ) |
| Income (Loss) from continuing operations, net of tax                              |   | 4,006 |  |   | (4,712 | ) |   | (3,773 | ) |   | (33,682 | ) |
| Loss from discontinued operations, net of tax                                     |   | — |  |   | — |  |   | — |  |   | (27 | ) |
| Net income (loss)                                                                 |   | 4,006 |  |   | (4,712 | ) |   | (3,773 | ) |   | (33,709 | ) |
| Net income (loss) to common shareholders                                          |   | 4,006 |  |   | (4,712 | ) |   | (3,773 | ) |   | (33,709 | ) |
| Period End Balances                                                               |   |   |   |   |   |   |   |   |
| Assets                                                                            |   | $ | 2,037,173 |  |   | $ | 2,238,065 |  |   | $ | 2,037,173 |  |   | $ | 2,238,065 |  |
| Loans held for sale (1)                                                           |   | 2,734 |  |   | 8,212 |  |   | 2,734 |  |   | 8,212 |  |
| Loans held for investment (2)                                                     |   | 1,195,142 |  |   | 1,231,795 |  |   | 1,195,142 |  |   | 1,231,795 |  |
| Allowance for loan losses (1)                                                     |   | 25,387 |  |   | 30,859 |  |   | 25,387 |  |   | 30,859 |  |
| Goodwill                                                                          |   | 4,205 |  |   | 4,205 |  |   | 4,205 |  |   | 4,205 |  |
| Deposits                                                                          |   | 1,790,608 |  |   | 1,982,253 |  |   | 1,790,608 |  |   | 1,982,253 |  |
| Borrowings                                                                        |   | 147,663 |  |   | 124,474 |  |   | 147,663 |  |   | 124,474 |  |
| Shareholders' equity                                                              |   | 80,802 |  |   | 106,873 |  |   | 80,802 |  |   | 106,873 |  |
| Average Balances                                                                  |   |   |   |   |   |   |   |   |
| Assets                                                                            |   | $ | 2,002,237 |  |   | $ | 2,247,437 |  |   | $ | 2,057,905 |  |   | $ | 2,322,484 |  |
| Loans held for sale (1)                                                           |   | 2,798 |  |   | 4,769 |  |   | 4,085 |  |   | 4,669 |  |
| Loans held for investment (2)                                                     |   | 1,185,559 |  |   | 1,257,460 |  |   | 1,146,248 |  |   | 1,253,252 |  |
| Allowance for loan losses (1)                                                     |   | 25,681 |  |   | 38,098 |  |   | 28,243 |  |   | 38,898 |  |
| Goodwill                                                                          |   | 4,205 |  |   | 4,205 |  |   | 4,205 |  |   | 4,105 |  |
| Deposits                                                                          |   | 1,775,529 |  |   | 1,989,669 |  |   | 1,822,906 |  |   | 2,054,628 |  |
| Borrowings                                                                        |   | 131,033 |  |   | 125,621 |  |   | 126,650 |  |   | 124,221 |  |
| Shareholders' equity                                                              |   | 75,740 |  |   | 107,628 |  |   | 86,708 |  |   | 117,953 |  |
| Per Common Share Data                                                             |   |   |   |   |   |   |   |   |
| Net income (loss) per common share from continuing operations - basic and diluted |   | $ | 0.18 |  |   | $ | (0.22 | ) |   | $ | (0.17 | ) |   | $ | (1.58 | ) |
| Net loss per common share from discontinued operations - basic and diluted        |   | — |  |   | — |  |   | — |  |   | — |  |
| Net income (loss) per common share - basic and diluted                            |   | 0.18 |  |   | (0.22 | ) |   | (0.17 | ) |   | (1.58 | ) |
| Book value (3)                                                                    |   | 3.72 |  |   | 4.95 |  |   | 3.72 |  |   | 4.95 |  |
| Tangible book value (3)                                                           |   | 3.19 |  |   | 4.41 |  |   | 3.19 |  |   | 4.41 |  |
| Performance Ratios                                                                |   |   |   |   |   |   |   |   |
| Return on average assets                                                          |   | 0.79 |  % |   | (0.83 | )% |   | (0.25 | )% |   | (1.94 | )% |
| Return on average tangible assets (3)                                             |   | 0.80 |  |   | (0.84 | ) |   | (0.25 | ) |   | (1.95 | ) |

----

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|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Return on average equity                                                     |   | 20.98 |  |   | (17.42 | ) |   | (5.82 | ) |   | (38.17 | ) |
| Return on average tangible equity (3)                                        |   | 24.71 |  |   | (19.52 | ) |   | (6.71 | ) |   | (42.40 | ) |
| Net interest margin (tax equivalent)                                         |   | 3.76 |  |   | 2.95 |  |   | 3.41 |  |   | 2.94 |  |
| Core noninterest expense as a percentage of average assets (3)               |   | 3.42 |  |   | 3.37 |  |   | 3.56 |  |   | 3.22 |  |
| Asset Quality Ratios                                                         |   |   |   |   |   |   |   |   |
| Allowance for loan losses to period end loans held for investment (1)        |   | 2.12 |  % |   | 2.51 |  % |   | 2.12 |  % |   | 2.51 |  % |
| Nonperforming loans to period end allowance for loan losses (1)              |   | 201.71 |  |   | 279.15 |  |   | 201.71 |  |   | 279.15 |  |
| Net annualized charge-offs (recoveries) to average loans held for investment |   | (0.22 | ) |   | 2.46 |  |   | 0.31 |  |   | 2.06 |  |
| Nonperforming loans to loans held for investment (4)                         |   | 4.28 |  |   | 6.99 |  |   | 4.28 |  |   | 6.99 |  |
| Nonperforming assets to total assets (4)                                     |   | 4.14 |  |   | 7.46 |  |   | 4.14 |  |   | 7.46 |  |
| Capital and Liquidity Ratios                                                 |   |   |   |   |   |   |   |   |
| Average equity to average assets                                             |   | 3.78 |  % |   | 4.79 |  % |   | 4.21 |  % |   | 5.08 |  % |
| Leverage capital                                                             |   | 5.83 |  |   | 5.68 |  |   | 5.83 |  |   | 5.68 |  |
| Tier 1 risk-based capital                                                    |   | 9.18 |  |   | 9.60 |  |   | 9.18 |  |   | 9.60 |  |
| Total risk-based capital                                                     |   | 12.38 |  |   | 12.47 |  |   | 12.38 |  |   | 12.47 |  |
| Average loans held for investment to average deposits                        |   | 66.77 |  |   | 63.20 |  |   | 62.88 |  |   | 61.00 |  |
| Average loans held for investment to average deposits and borrowings         |   | 62.18 |  |   | 59.45 |  |   | 58.80 |  |   | 57.52 |  |

----

|    |                                                                                         |
|----|-----------------------------------------------------------------------------------------|
| 1. | Complete the merger of Bank of Granite into the Bank during the second quarter of 2013, |

|    |                                                                 |
|----|-----------------------------------------------------------------|
| 2. | Return the Company to profitability in the second half of 2013, |

|    |                                                                        |
|----|------------------------------------------------------------------------|
| 3. | Continue to reduce problem asset levels and improve asset quality, and |

|    |                                                                           |
|----|---------------------------------------------------------------------------|
| 4. | Continue efforts to restore COB and the Bank to a satisfactory condition. |

----

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|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                      | Three Months Ended September 30, |
|                                                      | 2013 |   | 2012 |
|                                                      |   |   |   |   | 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)                                              | $ | 1,188,357 |  |   | $ | 16,012 |  |   | 5.35 | % |   | $ | 1,262,229 |  |   | $ | 16,312 |  |   | 5.14 | % |
| Taxable investment securities                             | 595,773 |  |   | 3,774 |  |   | 2.51 |  |   | 475,032 |  |   | 2,667 |  |   | 2.23 |  |
| Other earning assets                                      | 55,229 |  |   | 115 |  |   | 0.83 |  |   | 317,932 |  |   | 276 |  |   | 0.35 |  |
|   Total earning assets                          | 1,839,359 |  |   | 19,901 |  |   | 4.29 |  |   | 2,055,193 |  |   | 19,255 |  |   | 3.73 |  |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-earning assets:                               |   |   |   |   |   |   |   |   |   |   |   |
| Cash and due from banks                                   | 27,401 |  |   |   |   |   |   | 31,202 |  |   |   |   |   |
| Goodwill and other intangible assets                      | 11,402 |  |   |   |   |   |   | 11,502 |  |   |   |   |   |
| Other assets, net                                         | 124,075 |  |   |   |   |   |   | 149,540 |  |   |   |   |   |
|   Total assets                                  | $ | 2,002,237 |  |   |   |   |   |   | $ | 2,247,437 |  |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                             |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand deposits                          | $ | 330,934 |  |   | $ | 253 |  |   | 0.30 | % |   | $ | 346,289 |  |   | $ | 335 |  |   | 0.38 | % |
| Savings deposits                                          | 80,412 |  |   | 21 |  |   | 0.10 |  |   | 73,274 |  |   | 28 |  |   | 0.15 |  |
| Money market deposits                                     | 445,639 |  |   | 265 |  |   | 0.24 |  |   | 445,192 |  |   | 436 |  |   | 0.39 |  |
| Time deposits                                             | 618,284 |  |   | 1,355 |  |   | 0.87 |  |   | 867,963 |  |   | 2,521 |  |   | 1.16 |  |
|   Total interest-bearing deposits               | 1,475,269 |  |   | 1,894 |  |   | 0.51 |  |   | 1,732,718 |  |   | 3,320 |  |   | 0.76 |  |
| Retail repurchase agreements                              | 10,871 |  |   | 6 |  |   | 0.22 |  |   | 10,574 |  |   | 6 |  |   | 0.23 |  |
| Federal Home Loan Bank advances                           | 59,932 |  |   | 289 |  |   | 1.91 |  |   | 58,345 |  |   | 391 |  |   | 2.67 |  |
| Other borrowed funds                                      | 60,230 |  |   | 282 |  |   | 1.86 |  |   | 56,702 |  |   | 288 |  |   | 2.02 |  |
|   Total interest-bearing liabilities            | 1,606,302 |  |   | 2,471 |  |   | 0.61 |  |   | 1,858,339 |  |   | 4,005 |  |   | 0.86 |  |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing liabilities and shareholders' equity: |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing demand deposits                       | 300,260 |  |   |   |   |   |   | 256,951 |  |   |   |   |   |
| Other liabilities                                         | 19,935 |  |   |   |   |   |   | 24,519 |  |   |   |   |   |
| Shareholders' equity                                      | 75,740 |  |   |   |   |   |   | 107,628 |  |   |   |   |   |
|   Total liabilities and shareholders' equity    | $ | 2,002,237 |  |   |   |   |   |   | $ | 2,247,437 |  |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income and net yield on earning assets (4)   |   |   | $ | 17,430 |  |   | 3.76 | % |   |   |   | $ | 15,250 |  |   | 2.95 | % |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate spread (5)                                  |   |   |   |   | 3.68 | % |   |   |   |   |   | 2.87 | % |

----

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----

Table of Contents

|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                      | Nine Months Ended September 30, |
|                                                      | 2013 |   | 2012 |
|                                                      |   |   |   |   | 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)                                              | $ | 1,150,333 |  |   | $ | 45,315 |  |   | 5.27 | % |   | $ | 1,257,921 |  |   | $ | 50,601 |  |   | 5.37 | % |
| Taxable investment securities                             | 579,599 |  |   | 10,366 |  |   | 2.39 |  |   | 456,836 |  |   | 8,238 |  |   | 2.41 |  |
| Other earning assets                                      | 158,210 |  |   | 524 |  |   | 0.44 |  |   | 398,463 |  |   | 937 |  |   | 0.31 |  |
|   Total earning assets                          | 1,888,142 |  |   | 56,205 |  |   | 3.98 |  |   | 2,113,220 |  |   | 59,776 |  |   | 3.78 |  |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-earning assets:                               |   |   |   |   |   |   |   |   |   |   |   |
| Cash and due from banks                                   | 30,566 |  |   |   |   |   |   | 31,668 |  |   |   |   |   |
| Goodwill and other intangible assets                      | 11,474 |  |   |   |   |   |   | 11,754 |  |   |   |   |   |
| Other assets, net                                         | 127,723 |  |   |   |   |   |   | 165,731 |  |   |   |   |   |
| Assets of discontinued operations                         | — |  |   |   |   |   |   | 111 |  |   |   |   |   |
|   Total assets                                  | $ | 2,057,905 |  |   |   |   |   |   | $ | 2,322,484 |  |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                             |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand deposits                          | $ | 346,730 |  |   | $ | 784 |  |   | 0.30 | % |   | $ | 348,145 |  |   | $ | 1,099 |  |   | 0.42 | % |
| Savings deposits                                          | 79,293 |  |   | 60 |  |   | 0.10 |  |   | 72,187 |  |   | 81 |  |   | 0.15 |  |
| Money market deposits                                     | 450,197 |  |   | 759 |  |   | 0.23 |  |   | 439,296 |  |   | 1,418 |  |   | 0.43 |  |
| Time deposits                                             | 669,197 |  |   | 4,628 |  |   | 0.92 |  |   | 943,897 |  |   | 8,646 |  |   | 1.22 |  |
|   Total interest-bearing deposits               | 1,545,417 |  |   | 6,231 |  |   | 0.54 |  |   | 1,803,525 |  |   | 11,244 |  |   | 0.83 |  |
| Retail repurchase agreements                              | 9,303 |  |   | 15 |  |   | 0.22 |  |   | 9,163 |  |   | 23 |  |   | 0.34 |  |
| Federal Home Loan Bank advances                           | 58,862 |  |   | 1,037 |  |   | 2.36 |  |   | 58,356 |  |   | 1,057 |  |   | 2.42 |  |
| Other borrowed funds                                      | 58,485 |  |   | 809 |  |   | 1.85 |  |   | 56,702 |  |   | 877 |  |   | 2.07 |  |
|   Total interest-bearing liabilities            | 1,672,067 |  |   | 8,092 |  |   | 0.65 |  |   | 1,927,746 |  |   | 13,201 |  |   | 0.91 |  |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing liabilities and shareholders' equity: |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing demand deposits                       | 277,489 |  |   |   |   |   |   | 251,103 |  |   |   |   |   |
| Other liabilities                                         | 21,641 |  |   |   |   |   |   | 25,682 |  |   |   |   |   |
| Shareholders' equity                                      | 86,708 |  |   |   |   |   |   | 117,953 |  |   |   |   |   |
|   Total liabilities and shareholders' equity    | $ | 2,057,905 |  |   |   |   |   |   | $ | 2,322,484 |  |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income and net yield on earning assets (4)   |   |   | $ | 48,113 |  |   | 3.41 | % |   |   |   | $ | 46,575 |  |   | 2.94 | % |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate spread (5)                                  |   |   |   |   | 3.33 | % |   |   |   |   |   | 2.87 | % |

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|                                                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                        | Three Months Ended |   | Nine Months Ended |
| (dollars in thousands)                                                      | September 30, 2013 |   | September 30, 2012 |   | September 30, 2013 |   | September 30, 2012 |
| Noninterest Income                                                          |   |   |   |   |   |   |   |
|     Service charges on deposit accounts                 | $ | 1,858 |  |   | $ | 1,778 |  |   | $ | 4,915 |  |   | $ | 5,424 |  |
|     Mortgage loan income                                | 420 |  |   | 728 |  |   | 2,085 |  |   | 1,051 |  |
|     Cardholder and merchant services income             | 1,161 |  |   | 1,119 |  |   | 3,403 |  |   | 3,436 |  |
|     Trust and investment services                       | 329 |  |   | 234 |  |   | 964 |  |   | 692 |  |
|     Bank owned life insurance                           | 267 |  |   | 290 |  |   | 805 |  |   | 910 |  |
|     Other service charges, commissions and fees         | 365 |  |   | 252 |  |   | 960 |  |   | 777 |  |
|     Securities (loss)/gains, net                        | 50 |  |   | (33 | ) |   | 2,773 |  |   | 1,923 |  |
|     Other income                                        | 37 |  |   | 275 |  |   | 362 |  |   | 788 |  |
|         Total noninterest income    | 4,487 |  |   | 4,643 |  |   | 16,267 |  |   | 15,001 |  |
| Less:                                                                       |   |   |   |   |   |   |   |
|     Securities (loss) gains, net                        | 50 |  |   | (33 | ) |   | 2,773 |  |   | 1,923 |  |
|         Core noninterest income (1) | $ | 4,437 |  |   | $ | 4,676 |  |   | $ | 13,494 |  |   | $ | 13,078 |  |

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|                                                                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                         | Three Months Ended |   | Nine Months Ended |
| (dollars in thousands)                                                       | September 30, 2013 |   | September 30, 2012 |   | September 30, 2013 |   | September 30, 2012 |
| Noninterest Expense                                                          |   |   |   |   |   |   |   |
|     Personnel expense                                    | $ | 9,663 |  |   | $ | 9,717 |  |   | $ | 31,149 |  |   | $ | 30,351 |  |
|     Net occupancy expense                                | 1,558 |  |   | 1,710 |  |   | 5,060 |  |   | 4,885 |  |
|     Furniture, equipment and data processing expense     | 2,050 |  |   | 2,012 |  |   | 6,512 |  |   | 6,395 |  |
|     Professional fees                                    | 222 |  |   | 1,336 |  |   | 2,475 |  |   | 4,265 |  |
|     Stationery, printing and supplies                    | 136 |  |   | 152 |  |   | 509 |  |   | 446 |  |
|     Advertising and marketing                            | 150 |  |   | 166 |  |   | 994 |  |   | 420 |  |
|     Other real estate owned expense                      | (98 | ) |   | 3,602 |  |   | 4,116 |  |   | 21,594 |  |
|     Credit/debit card expense                            | 627 |  |   | 432 |  |   | 1,525 |  |   | 1,279 |  |
|     FDIC insurance                                       | 646 |  |   | 1,056 |  |   | 1,980 |  |   | 2,879 |  |
|     Loan collection expense                              | 1,120 |  |   | 1,119 |  |   | 3,784 |  |   | 2,379 |  |
|     Merger-related expense                               | — |  |   | 939 |  |   | 3,498 |  |   | 2,357 |  |
|     Core deposit intangible amortization                 | 352 |  |   | 352 |  |   | 1,056 |  |   | 1,056 |  |
|     Other expense                                        | 1,501 |  |   | 2,009 |  |   | 4,273 |  |   | 6,059 |  |
|         Total noninterest expense    | 17,927 |  |   | 24,602 |  |   | 66,931 |  |   | 84,365 |  |
| Less:                                                                        |   |   |   |   |   |   |   |
|     Other real estate owned expense                      | (98 | ) |   | 3,602 |  |   | 4,116 |  |   | 21,594 |  |
|     Merger-related expense                               | — |  |   | 939 |  |   | 3,498 |  |   | 2,357 |  |
|     Loan collection expense                              | 1,120 |  |   | 1,119 |  |   | 3,784 |  |   | 2,379 |  |
|     Rebranding expenses                                  | 6 |  |   | — |  |   | 616 |  |   | — |  |
|     Granite mortgage and litigation accrual              | (117 | ) |   | — |  |   | (487 | ) |   | 1,100 |  |
|     Branch closure and restructuring expense             | (105 | ) |   | — |  |   | 497 |  |   | — |  |
|         Core noninterest expense (1) | $ | 17,121 |  |   | $ | 18,942 |  |   | $ | 54,907 |  |   | $ | 56,935 |  |

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|                                                                                                                                                |
|------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                                                           |   | September 30, 2013 |   | December 31, 2012 |
| (dollars in thousands)                                                                                                                         |   | Balance |   | Associated Reserves |   | Balance |   | Associated Reserves |
| Impaired loans, not individually reviewed for impairment                                                                                       |   | $ | 4,550 |  |   | $ | — |  |   | $ | 6,017 |  |   | $ | — |  |
| Impaired loans, individually reviewed, with no impairment                                                                                      |   | 49,356 |  |   | — |  |   | 62,282 |  |   | — |  |
| Impaired loans, individually reviewed, with impairment                                                                                         |   | 2,963 |  |   | 486 |  |   | 15,312 |  |   | 1,737 |  |
| Total impaired loans *                                                                                                                         |   | $ | 56,869 |  |   | $ | 486 |  |   | $ | 83,611 |  |   | $ | 1,737 |  |
|                                                                                                                                           |   |   |   |   |   |   |   |   |
| Purchased impaired loans with subsequent deterioration                                                                                         |   | 147,852 |  |   | 4,066 |  |   | 192,115 |  |   | 5,373 |  |
| Purchased impaired loans with no subsequent deterioration                                                                                      |   | 28,741 |  |   | — |  |   | 36,277 |  |   | — |  |
| Total Reserves                                                                                                                                 |   |   |   | 4,552 |  |   |   |   | 7,110 |  |
|                                                                                                                                           |   |   |   |   |   |   |   |   |
| Average impaired loans calculated using a simple average                                                                                       |   | $ | 61,837 |  |   |   |   | $ | 94,754 |  |   |   |
| * Included at September 30, 2013 and December 31, 2012 were $6.7 million and $4.5 million, respectively, in restructured and performing loans. |

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|                                 |
|---------------------------------|
|                                 |  |  |  |  |
|                            |   |   | Minimum Regulatory Requirement |
|                            | CommunityOne Bancorp | CommunityOneBank | AdequatelyCapitalized | Well-Capitalized |
| Leverage capital ratio          | 5.83% | 7.39% | 4.00% | 5.00% |
| Tier 1 risk-based capital ratio | 9.18% | 11.62% | 4.00% | 6.00% |
| Total risk-based capital ratio  | 12.38% | 12.88% | 8.00% | 10.00% |

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|         |                                                                                                                               |
|---------|-------------------------------------------------------------------------------------------------------------------------------|
| • | “Tangible shareholders' equity” is shareholders' equity reduced by recorded goodwill and other intangible assets. |

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

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | “Tangible book value” is defined as total equity reduced by recorded goodwill and other intangible assets 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.  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) |   | September 30, 2013 |   | December 31, 2012 |   | September 30, 2012 |
| Total shareholders' equity                    |   | $ | 80,802 |  |   | $ | 98,445 |  |   | $ | 106,873 |  |
| Less:                                         |   |   |   |   |   |   |
| Goodwill                                      |   | 4,205 |  |   | 4,205 |  |   | 4,205 |  |
| Core deposit and other intangibles            |   | 7,197 |  |   | 7,495 |  |   | 7,369 |  |
| Tangible shareholders' equity                 |   | $ | 69,400 |  |   | $ | 86,745 |  |   | $ | 95,299 |  |
| Total assets                                  |   | $ | 2,037,173 |  |   | $ | 2,151,565 |  |   | $ | 2,238,065 |  |
| Less:                                         |   |   |   |   |   |   |
| Goodwill                                      |   | 4,205 |  |   | 4,205 |  |   | 4,205 |  |
| Core deposit and other intangibles            |   | 7,197 |  |   | 7,495 |  |   | 7,369 |  |
| Tangible assets                               |   | $ | 2,025,771 |  |   | $ | 2,139,865 |  |   | $ | 2,226,491 |  |
| Book value per common share                   |   | $ | 3.72 |  |   | $ | 4.54 |  |   | $ | 4.95 |  |
| Effect of intangible assets                   |   | (0.53 | ) |   | (0.54 | ) |   | (0.54 | ) |
| Tangible book value per common share          |   | 3.19 |  |   | 4.00 |  |   | 4.41 |  |

|                                                                                      |
|--------------------------------------------------------------------------------------|
|                                                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)                                                               |   | Three Months Ended |   | Nine Months Ended |
|                                                                                 |   | September 30, 2013 |   | September 30, 2012 |   | September 30, 2013 |   | September 30, 2012 |
| Total noninterest expense                                                            |   | $ | 17,927 |  |   | $ | 24,602 |  |   | $ | 66,931 |  |   | $ | 84,365 |  |
| Less:                                                                                |   |   |   |   |   |   |   |   |
|      Other real estate owned expense                        |   | (98 | ) |   | 3,602 |  |   | 4,116 |  |   | 21,594 |  |
|      Loan collection expense                                |   | 1,120 |  |   | 1,119 |  |   | 3,784 |  |   | 2,379 |  |
|      Merger-related expense                                 |   | — |  |   | 939 |  |   | 3,498 |  |   | 2,357 |  |
|      Rebranding expenses                                    |   | 6 |  |   | — |  |   | 616 |  |   | — |  |
|      Granite mortgage and litigation accrual                |   | (117 | ) |   | — |  |   | (487 | ) |   | 1,100 |  |
|      Branch closure and restructuring expense               |   | (105 | ) |   | — |  |   | 497 |  |   | — |  |
| Total non-core noninterest expense                                                   |   | 806 |  |   | 5,660 |  |   | 12,024 |  |   | 27,430 |  |
|           Core noninterest expense |   | $ | 17,121 |  |   | $ | 18,942 |  |   | $ | 54,907 |  |   | $ | 56,935 |  |
|                                                                                 |   |   |   |   |   |   |   |   |
| Total noninterest income                                                             |   | $ | 4,487 |  |   | $ | 4,643 |  |   | $ | 16,267 |  |   | $ | 15,001 |  |
| Less:                                                                                |   |   |   |   |   |   |   |   |
|     Securities gains (losses), net                               |   | 50 |  |   | (33 | ) |   | 2,773 |  |   | 1,923 |  |
| Total non-core noninterest income                                                    |   | 50 |  |   | (33 | ) |   | 2,773 |  |   | 1,923 |  |
|         Core noninterest income              |   | $ | 4,437 |  |   | $ | 4,676 |  |   | $ | 13,494 |  |   | $ | 13,078 |  |
|                                                                                 |   |   |   |   |   |   |   |   |
| Income loss from continuing operations, before income taxes                          |   | $ | 4,292 |  |   | $ | (4,789 | ) |   | $ | (1,398 | ) |   | $ | (33,810 | ) |
| Non-core noninterest expense                                                         |   | 806 |  |   | 5,660 |  |   | 12,024 |  |   | 27,430 |  |
| Less: Non-core noninterest income                                                    |   | (50 | ) |   | 33 |  |   | (2,773 | ) |   | (1,923 | ) |
| Provision for (recovery of) loan losses                                              |   | (350 | ) |   | 32 |  |   | (1,297 | ) |   | 10,877 |  |
|    Core earnings                                                      |   | $ | 4,698 |  |   | $ | 936 |  |   | $ | 6,556 |  |   | $ | 2,574 |  |

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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 |