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| For the quarterly period ended March 31, 2016 |   | 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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| PART I.  FINANCIAL INFORMATION |   |
| Item 1                         | Consolidated Financial Statements (Unaudited) |   |
|                           | Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015 | 1 |
|                           | Consolidated Statements of Operations for Three Months Ended March 31, 2016 and 2015 | 2 |
|                           | Consolidated Statements of Comprehensive Income for the Three Months ended March 31, 2016 and 2015 | 3 |
|                           | Consolidated Statements of Shareholders' Equity for the Three Months Ended March 31, 2016 and 2015 | 5 |
|                           | Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015 | 6 |
|                           | Notes to Consolidated Financial Statements | 8 |
| Item 2                         | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 34 |
| Item 3                         | Quantitative and Qualitative Disclosures about Market Risk | 49 |
| Item 4                         | Controls and Procedures | 50 |
| PART II.  OTHER INFORMATION    |   |
| Item 1                         | Legal Proceedings | 51 |
| Item 1A                        | Risk Factors | 51 |
| Item 2                         | Unregistered Sales of Equity Securities and Repurchases | 51 |
| Item 3                         | Defaults Upon Senior Securities | 51 |
| Item 4                         | Mine Safety Disclosures | 51 |
| Item 5                         | Other Information | 51 |
| Item 6                         | Exhibits | 51 |
|                           | Signatures | 52 |

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|                                                                                                                                         |  |  |  |  |  |  |  |  |
| (in thousands, except share and per share data)                                                                                         |   | March 31, 2016 |   | December 31, 2015* |
| Assets                                                                                                                                  |   |   |   |   |
| Cash and due from banks                                                                                                                 |   | $ | 22,104 |  |   | $ | 23,852 |  |
| Interest-bearing bank balances                                                                                                          |   | 41,474 |  |   | 15,323 |  |
| Investment securities:                                                                                                                  |   |   |   |   |
| Available-for-sale, at estimated fair value (amortized cost of $386,862 in 2016 and $398,815 in 2015)                                   |   | 385,994 |  |   | 390,434 |  |
| Held-to-maturity, at amortized cost (estimated fair value of $145,853 in 2016                                     and $145,185 in 2015) |   | 145,127 |  |   | 147,967 |  |
| Loans held for sale                                                                                                                     |   | 4,328 |  |   | 5,403 |  |
| Loans held for investment                                                                                                               |   | 1,524,406 |  |   | 1,543,795 |  |
| Less: Allowance for loan losses                                                                                                         |   | (14,240 | ) |   | (15,195 | ) |
| Net loans held for investment                                                                                                           |   | 1,510,166 |  |   | 1,528,600 |  |
| Premises and equipment, net                                                                                                             |   | 43,634 |  |   | 44,457 |  |
| Other real estate owned and property acquired in settlement of loans                                                                    |   | 14,158 |  |   | 16,583 |  |
| Core deposit premiums and other intangibles                                                                                             |   | 5,273 |  |   | 5,208 |  |
| Goodwill                                                                                                                                |   | 4,205 |  |   | 4,205 |  |
| Bank-owned life insurance                                                                                                               |   | 41,195 |  |   | 40,869 |  |
| Deferred tax assets, net                                                                                                                |   | 136,912 |  |   | 141,716 |  |
| Other assets                                                                                                                            |   | 30,755 |  |   | 32,648 |  |
| Total Assets                                                                                                                            |   | $ | 2,385,325 |  |   | $ | 2,397,265 |  |
| Liabilities                                                                                                                             |   |   |   |   |
| Deposits:                                                                                                                               |   |   |   |   |
| Noninterest-bearing demand deposits                                                                                                     |   | $ | 391,749 |  |   | $ | 386,329 |  |
| Interest-bearing deposits:                                                                                                              |   |   |   |   |
| Demand, savings and money market deposits                                                                                               |   | 939,900 |  |   | 939,878 |  |
| Time deposits of $250 or more                                                                                                           |   | 74,610 |  |   | 60,093 |  |
| Other time deposits                                                                                                                     |   | 548,931 |  |   | 561,237 |  |
| Total deposits                                                                                                                          |   | 1,955,190 |  |   | 1,947,537 |  |
| Retail repurchase agreements                                                                                                            |   | 7,352 |  |   | 7,219 |  |
| Federal Home Loan Bank advances                                                                                                         |   | 65,167 |  |   | 93,681 |  |
| Long-term notes payable                                                                                                                 |   | 5,435 |  |   | 5,415 |  |
| Junior subordinated debentures                                                                                                          |   | 56,702 |  |   | 56,702 |  |
| Other liabilities                                                                                                                       |   | 14,328 |  |   | 13,673 |  |
| Total Liabilities                                                                                                                       |   | 2,104,174 |  |   | 2,124,227 |  |
| Shareholders' Equity                                                                                                                    |   |   |   |   |
| Preferred stock, 10,000,000 shares authorized                                                                                           |   |   |   |   |
|    Series A, $10.00 par value; 51,500 shares issued and no shares outstanding in 2016 and 2015                           |   | — |  |   | — |  |
|    Series B, no par value, authorized 250,000 shares, no shares issued and outstanding in 2016 and 2015                  |   | — |  |   | — |  |
| Common stock, no par value; authorized 2,500,000,000 shares, issued 24,292,051 shares in 2016 and 24,292,646 in 2015                    |   | 490,243 |  |   | 490,075 |  |
| Accumulated deficit                                                                                                                     |   | (202,384 | ) |   | (206,298 | ) |
| Accumulated other comprehensive loss                                                                                                    |   | (6,708 | ) |   | (10,739 | ) |
| Total Shareholders' Equity                                                                                                              |   | 281,151 |  |   | 273,038 |  |
| Total Liabilities and Shareholders' Equity                                                                                              |   | $ | 2,385,325 |  |   | $ | 2,397,265 |  |

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|                                                         |  |  |  |  |  |  |  |
| (in thousands, except share and per share data)         | Three Months Ended March 31, |
|                                                    | 2016 |   | 2015 |
| Interest Income                                         |   |   |   |
| Interest and fees on loans                              | $ | 16,972 |  |   | $ | 15,873 |  |
| Interest and dividends on investment securities         | 3,283 |  |   | 3,224 |  |
| Other interest income                                   | 234 |  |   | 171 |  |
| Total interest income                                   | 20,489 |  |   | 19,268 |  |
| Interest Expense                                        |   |   |   |
| Deposits                                                | 1,879 |  |   | 1,731 |  |
| Retail repurchase agreements                            | 4 |  |   | 4 |  |
| Federal Home Loan Bank advances                         | 502 |  |   | 469 |  |
| Other borrowed funds                                    | 321 |  |   | 290 |  |
| Total interest expense                                  | 2,706 |  |   | 2,494 |  |
| Net Interest Income before Recovery of Loan Losses      | 17,783 |  |   | 16,774 |  |
| Recovery of provision for loan losses                   | (535 | ) |   | (1,137 | ) |
| Net Interest Income after Recovery of Loan Losses       | 18,318 |  |   | 17,911 |  |
| Noninterest Income                                      |   |   |   |
| Service charges on deposit accounts                     | 1,557 |  |   | 1,434 |  |
| Mortgage loan income                                    | 2,141 |  |   | 465 |  |
| Cardholder and merchant services income                 | 1,241 |  |   | 1,125 |  |
| Trust and investment services                           | 380 |  |   | 322 |  |
| Bank-owned life insurance                               | 269 |  |   | 250 |  |
| Other service charges, commissions and fees             | 443 |  |   | 383 |  |
| Other income                                            | 292 |  |   | 55 |  |
| Total noninterest income                                | 6,323 |  |   | 4,034 |  |
| Noninterest Expense                                     |   |   |   |
| Personnel expense                                       | 10,138 |  |   | 10,594 |  |
| Net occupancy expense                                   | 1,553 |  |   | 1,469 |  |
| Furniture, equipment and data processing expense        | 2,130 |  |   | 1,989 |  |
| Professional fees                                       | 450 |  |   | 539 |  |
| Stationery, printing and supplies                       | 160 |  |   | 176 |  |
| Advertising and marketing                               | 60 |  |   | 186 |  |
| Other real estate owned expense                         | 484 |  |   | 360 |  |
| Credit/debit card expense                               | 439 |  |   | 543 |  |
| FDIC insurance                                          | 461 |  |   | 453 |  |
| Loan collection expense                                 | 149 |  |   | 300 |  |
| Merger-related expense                                  | 771 |  |   | — |  |
| Core deposit premium intangible amortization            | 338 |  |   | 352 |  |
| Other expense                                           | 1,268 |  |   | 1,047 |  |
| Total noninterest expense                               | 18,401 |  |   | 18,008 |  |
| Income before income taxes                              | 6,240 |  |   | 3,937 |  |
| Income tax expense                                      | 2,326 |  |   | 1,418 |  |
| Net income                                              | $ | 3,914 |  |   | $ | 2,519 |  |
|                                                    |   |   |   |
| Weighted average number of shares outstanding - basic   | 24,292,004 |  |   | 24,183,396 |  |
| Weighted average number of shares outstanding - diluted | 24,314,112 |  |   | 24,195,108 |  |
| Net income per share - basic and diluted                | $ | 0.16 |  |   | $ | 0.10 |  |

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|                                                                                                          |  |  |  |  |  |  |  |
|                                                                                                     |   |   |   |
| (dollars in thousands)                                                                                   | Three Months Ended March 31, |
|                                                                                                     | 2016 |   | 2015 |
| Net income                                                                                               | $ | 3,914 |  |   | $ | 2,519 |  |
| Other comprehensive income:                                                                              |   |   |   |
| Unrealized gains arising during the period on available-for-sale securities                              | 7,426 |  |   | 2,688 |  |
| Tax effect                                                                                               | (2,792 | ) |   | (1,028 | ) |
| Unrealized gains arising during the period on available-for-sale securities, net of tax                  | 4,634 |  |   | 1,660 |  |
| Reclassification adjustment for gain on available-for-sale securities included in net income             | — |  |   | — |  |
|     Tax effect                                                                       | — |  |   | — |  |
| Reclassification adjustment for gain on available-for-sale securities included in net income, net of tax | — |  |   | — |  |
| Change in defined benefit plans liability                                                                | (86 | ) |   | — |  |
| Tax effect                                                                                               | 32 |  |   | — |  |
| Change in defined benefit plans liability, net of tax                                                    | (54 | ) |   | — |  |
| Unrealized loss on interest rate swaps                                                                   | (883 | ) |   | (523 | ) |
| Tax effect                                                                                               | 332 |  |   | 200 |  |
|     Unrealized loss on interest rate swaps, net of tax                               | (551 | ) |   | (323 | ) |
| Reclassification adjustment for loss on interest rate swaps included in net income                       | 3 |  |   | 3 |  |
| Tax effect                                                                                               | (1 | ) |   | (1 | ) |
| Reclassification adjustment for loss on interest rate swaps included in net income, net of tax           | 2 |  |   | 2 |  |
| Other comprehensive income, net of tax:                                                                  | 4,031 |  |   | 1,339 |  |
| Comprehensive income                                                                                     | $ | 7,945 |  |   | $ | 3,858 |  |

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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, 2014                                |   | — |  |   | $ | — |  |   | 24,185,923 |  |   | $ | 487,603 |  |   | $ | (213,212 | ) |   | $ | (7,475 | ) |   | $ | 266,916 |  |
| Comprehensive income:                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                |   | — |  |   | — |  |   | — |  |   | — |  |   | 2,519 |  |   | — |  |   | 2,519 |  |
| Other comprehensive income, net of tax                    |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 1,339 |  |   | 1,339 |  |
| Total comprehensive income                                |   |   |   |   |   |   |   |   |   |   |   |   |   | 3,858 |  |
| Stock options and restricted stock awards:                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Compensation expense recognized                           |   | — |  |   | — |  |   | — |  |   | 167 |  |   | — |  |   | — |  |   | 167 |  |
| Issuance of restricted stock awards, net of cancellations |   | — |  |   | — |  |   | (1,737 | ) |   | — |  |   | — |  |   | — |  |   | — |  |
| Shares issued as compensation to directors                |   |   |   |   |   | 944 |  |   | 11 |  |   |   |   |   |   | 11 |  |
| Balance, March 31, 2015                                   |   | — |  |   | $ | — |  |   | 24,185,130 |  |   | $ | 487,781 |  |   | $ | (210,693 | ) |   | $ | (6,136 | ) |   | $ | 270,952 |  |
| Balance, December 31, 2015                                |   | — |  |   | $ | — |  |   | 24,292,646 |  |   | $ | 490,075 |  |   | $ | (206,298 | ) |   | $ | (10,739 | ) |   | $ | 273,038 |  |
| Comprehensive income:                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                |   | — |  |   | — |  |   | — |  |   | — |  |   | 3,914 |  |   | — |  |   | 3,914 |  |
| Other comprehensive income net of tax                     |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 4,031 |  |   | 4,031 |  |
| Total comprehensive income                                |   |   |   |   |   |   |   |   |   |   |   |   |   | 7,945 |  |
| Stock options and restricted stock awards:                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Compensation expense recognized                           |   | — |  |   | — |  |   | — |  |   | 162 |  |   | — |  |   | — |  |   | 162 |  |
| Issuance of restricted stock awards, net of cancellations |   | — |  |   | — |  |   | (1,200 | ) |   | — |  |   | — |  |   | — |  |   | — |  |
| Shares issued upon exercise of stock options              |   | — |  |   | — |  |   | 605 |  |   | 6 |  |   | — |  |   | — |  |   | 6 |  |
| Balance, March 31, 2016                                   |   | — |  |   | $ | — |  |   | 24,292,051 |  |   | $ | 490,243 |  |   | $ | (202,384 | ) |   | $ | (6,708 | ) |   | $ | 281,151 |  |

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|                                                                                         |  |  |  |  |  |  |  |  |
|  (dollars in thousands)                                                            |   | Three Months Ended March 31, |
|                                                                                    |   | 2016 |   | 2015 |
| Operating Activities                                                                    |   |   |   |   |
| Net income                                                                              |   | $ | 3,914 |  |   | $ | 2,519 |  |
| Adjustments to reconcile net income to cash provided by (used in) operating activities: |   |   |   |   |
| Depreciation and amortization of premises and equipment                                 |   | 887 |  |   | 926 |  |
| Recovery of loan losses                                                                 |   | (535 | ) |   | (1,137 | ) |
| Deferred income taxes                                                                   |   | 2,326 |  |   | 1,379 |  |
| Deferred loan fees and costs, net                                                       |   | 21 |  |   | (220 | ) |
| Premium amortization and discount accretion of investment securities, net               |   | 679 |  |   | 583 |  |
| Amortization of core deposit premiums                                                   |   | 338 |  |   | 352 |  |
| Net accretion on acquired loans                                                         |   | (1,449 | ) |   | (2,099 | ) |
| Stock compensation expense                                                              |   | 162 |  |   | 178 |  |
| Increase in cash surrender value of bank-owned life insurance, net                      |   | (326 | ) |   | (266 | ) |
| Loans held for sale:                                                                    |   |   |   |   |
| Origination of loans held for sale                                                      |   | (16,337 | ) |   | (22,389 | ) |
| Net proceeds from sale of loans held for sale                                           |   | 17,560 |  |   | 17,787 |  |
| Net gain on sale of loans held for sale                                                 |   | (148 | ) |   | (173 | ) |
| Mortgage servicing rights capitalized                                                   |   | (593 | ) |   | (300 | ) |
| Mortgage servicing rights amortization                                                  |   | 170 |  |   | 130 |  |
| Net gain on sale of premises and equipment                                              |   | — |  |   | (88 | ) |
| Net loss on sales and write-downs of other real estate owned                            |   | 501 |  |   | 294 |  |
| Changes in assets and liabilities:                                                      |   |   |   |   |
| Decrease (Increase) in accrued interest receivable and other assets                     |   | 1,271 |  |   | (4,477 | ) |
| Increase (Decrease) in accrued interest payable and other liabilities                   |   | 589 |  |   | (1,834 | ) |
| Net cash provided by (used in) operating activities                                     |   | 9,030 |  |   | (8,835 | ) |
| Investing Activities                                                                    |   |   |   |   |
| Available-for-sale securities:                                                          |   |   |   |   |
| Proceeds from maturities, calls and principal repayments                                |   | 14,114 |  |   | 15,520 |  |
| Purchases                                                                               |   | — |  |   | (31,133 | ) |
| Held-to-maturity securities:                                                            |   |   |   |   |
| Proceeds from maturities, calls and principal repayments                                |   | — |  |   | 1,818 |  |
| Net increase in loans held for investment                                               |   | (26,547 | ) |   | (38,487 | ) |
| Proceeds from sales of other real estate owned                                          |   | 1,964 |  |   | 1,490 |  |
| Purchases of premises and equipment                                                     |   | (78 | ) |   | (687 | ) |
| Proceeds from sales of premises and equipment                                           |   | — |  |   | 565 |  |
| Net cash received from bulk sale of loans                                               |   | 46,642 |  |   | — |  |
| Net cash provided by (used in) investing activities                                     |   | 36,095 |  |   | (50,914 | ) |
| Financing Activities                                                                    |   |   |   |   |
| Net increase in deposits                                                                |   | 7,653 |  |   | 13,052 |  |
| Increase (Decrease) in retail repurchase agreements                                     |   | 133 |  |   | (1,239 | ) |
| Decrease in Federal Home Loan Bank advances                                             |   | (28,514 | ) |   | (13 | ) |
| Issuance of common stock, net of expense                                                |   | 6 |  |   | — |  |
| Net cash provided by (used in) financing activities                                     |   | (20,722 | ) |   | 11,800 |  |
| Net Increase (Decrease) in Cash and Cash Equivalents                                    |   | 24,403 |  |   | (47,949 | ) |
| Cash and Cash Equivalents at Beginning of Period                                        |   | 39,175 |  |   | 95,882 |  |
| Cash and Cash Equivalents at End of Period                                              |   | $ | 63,578 |  |   | $ | 47,933 |  |
|                                                                                    |   |   |   |   |
|                                                                                    |   |   |   |   |
| Supplemental disclosure of cash flow information                                        |   |  |   |   |
| Cash paid during the period for:                                                        |   |   |   |   |
| Interest                                                                                |   | $ | 2,686 |  |   | $ | 5,759 |  |
| Income taxes, net of refunds                                                            |   | 7 |  |   | 39 |  |
| Noncash transactions:                                                                   |   |   |   |   |
| Foreclosed loans transferred to other real estate owned                                 |   | 59 |  |   | 2,495 |  |
| Unrealized securities gains, net of income taxes                                        |   | 4,634 |  |   | 1,660 |  |
| Transfer of fixed assets to other assets                                                |   | — |  |   | 2,722 |  |
| Employee benefit plan costs, net of income taxes                                        |   | (54 | ) |   | — |  |
| Unrealized loss on interest rate swaps, net of income taxes                             |   | (549 | ) |   | (321 | ) |

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| March 31, 2016                                  |   |   |   |   |   |   |   |   |
| (dollars in thousands)                               |   | Amortized Cost |   | Gross Unrealized Gains |   | Gross Unrealized Losses |   | Estimated Fair Value |
| Available-for-Sale:                                  |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities-GSE           |   | $ | 278,521 |  |   | $ | 920 |  |   | $ | 2,379 |  |   | $ | 277,062 |  |
| Residential mortgage-backed securities-Private       |   | 31,079 |  |   | 399 |  |   | 44 |  |   | 31,434 |  |
| Commercial mortgage-backed securities-GSE            |   | 21,880 |  |   | 242 |  |   | — |  |   | 22,122 |  |
| Commercial mortgage-backed securities-Private        |   | 17,858 |  |   | 140 |  |   | 150 |  |   | 17,848 |  |
| Corporate notes                                      |   | 37,524 |  |   | 21 |  |   | 17 |  |   | 37,528 |  |
| Total available-for-sale                             |   | 386,862 |  |   | 1,722 |  |   | 2,590 |  |   | 385,994 |  |
| Held-to-Maturity:                                    |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities-GSE           |   | 118,194 |  |   | 698 |  |   | 109 |  |   | 118,783 |  |
| Residential mortgage-backed securities-Private       |   | 16,877 |  |   | — |  |   | 32 |  |   | 16,845 |  |
| Commercial mortgage-backed securities-Private        |   | 10,056 |  |   | 169 |  |   | — |  |   | 10,225 |  |
|      Total held-to-maturity |   | 145,127 |  |   | 867 |  |   | 141 |  |   | 145,853 |  |
| Total investment securities                          |   | $ | 531,989 |  |   | $ | 2,589 |  |   | $ | 2,731 |  |   | $ | 531,847 |  |
|                                                 |   |   |   |   |   |   |   |   |
| December 31, 2015                               |   |   |   |   |   |   |   |   |
| (dollars in thousands)                               |   | Amortized Cost |   | Gross Unrealized Gains |   | Gross Unrealized Losses |   | Estimated Fair Value |
| Available-for-Sale:                                  |   |   |   |   |   |   |   |   |
| Obligations of U.S. government sponsored enterprises |   | $ | 2,005 |  |   | $ | 3 |  |   | $ | — |  |   | $ | 2,008 |  |
| Residential mortgage-backed securities-GSE           |   | 286,057 |  |   | 339 |  |   | 8,289 |  |   | 278,107 |  |
| Residential mortgage-backed securities-Private       |   | 33,235 |  |   | 578 |  |   | 236 |  |   | 33,577 |  |
| Commercial mortgage-backed securities-GSE            |   | 21,980 |  |   | — |  |   | 368 |  |   | 21,612 |  |
| Commercial mortgage-backed securities-Private        |   | 17,869 |  |   | — |  |   | 294 |  |   | 17,575 |  |
| Corporate notes                                      |   | 37,669 |  |   | — |  |   | 114 |  |   | 37,555 |  |
| Total available-for-sale                             |   | 398,815 |  |   | 920 |  |   | 9,301 |  |   | 390,434 |  |
| Held-to-Maturity:                                    |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities-GSE           |   | 120,197 |  |   | — |  |   | 2,310 |  |   | 117,887 |  |
| Residential mortgage-backed securities-Private       |   | 17,712 |  |   | — |  |   | 298 |  |   | 17,414 |  |
| Commercial mortgage-backed securities-Private        |   | 10,058 |  |   | — |  |   | 174 |  |   | 9,884 |  |
|      Total held-to-maturity |   | 147,967 |  |   | — |  |   | 2,782 |  |   | 145,185 |  |
| Total investment securities                          |   | $ | 546,782 |  |   | $ | 920 |  |   | $ | 12,083 |  |   | $ | 535,619 |  |

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|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                           | Less than 12 Months |   | 12 Months or More |   | Total |
| (dollars in thousands)                         | Estimated Fair Value | Gross Unrealized Losses |   | Estimated Fair Value | Gross Unrealized Losses |   | Estimated Fair Value | Gross Unrealized Losses |
| March 31, 2016                            |   |   |   |   |   |   |   |   |
| Available-for-Sale:                            |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities-GSE     | $ | — |  | $ | — |  |   | $ | 189,610 |  | $ | 2,379 |  |   | $ | 189,610 |  | $ | 2,379 |  |
| Residential mortgage-backed securities-Private | 2,970 |  | 32 |  |   | 621 |  | 12 |  |   | 3,591 |  | 44 |  |
| Commercial mortgage-backed securities-GSE      | — |  | — |  |   | — |  | — |  |   | — |  | — |  |
| Commercial mortgage-backed securities-Private  | 7,399 |  | 150 |  |   | — |  | — |  |   | 7,399 |  | 150 |  |
| Corporate Notes                                | 10,224 |  | 4 |  |   | 9,994 |  | 13 |  |   | 20,218 |  | 17 |  |
| Total available-for-sale                       | 20,593 |  | 186 |  |   | 200,225 |  | 2,404 |  |   | 220,818 |  | 2,590 |  |
| Held-to-Maturity:                              |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities-GSE     | — |  | — |  |   | 13,628 |  | 109 |  |   | 13,628 |  | 109 |  |
| Residential mortgage-backed securities-Private | 16,845 |  | 32 |  |   | — |  | — |  |   | 16,845 |  | 32 |  |
| Total held-to-maturity                         | 16,845 |  | 32 |  |   | 13,628 |  | 109 |  |   | 30,473 |  | 141 |  |
| Total                                          | $ | 37,438 |  | $ | 218 |  |   | $ | 213,853 |  | $ | 2,513 |  |   | $ | 251,291 |  | $ | 2,731 |  |
|                                           |   |   |   |   |   |   |   |   |
| December 31, 2015                         |   |   |   |   |   |   |   |   |
| Available-for-Sale                             |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities-GSE     | $ | 137,998 |  | $ | 2,560 |  |   | $ | 132,148 |  | $ | 5,729 |  |   | $ | 270,146 |  | $ | 8,289 |  |
| Residential mortgage-backed securities-Private | 26,265 |  | 231 |  |   | 636 |  | 5 |  |   | 26,901 |  | 236 |  |
| Commercial mortgage-backed securities-GSE      | 21,612 |  | 368 |  |   | — |  | — |  |   | 21,612 |  | 368 |  |
| Commercial mortgage-backed securities-Private  | 17,575 |  | 294 |  |   | — |  | — |  |   | 17,575 |  | 294 |  |
| Corporate notes                                | 30,523 |  | 114 |  |   | — |  | — |  |   | 30,523 |  | 114 |  |
| Total available-for-sale                       | 233,973 |  | 3,567 |  |   | 132,784 |  | 5,734 |  |   | 366,757 |  | 9,301 |  |
| Held-to-Maturity:                              |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities-GSE     | 83,014 |  | 1,481 |  |   | 34,872 |  | 829 |  |   | 117,886 |  | 2,310 |  |
| Residential mortgage-backed securities-Private | 17,414 |  | 298 |  |   | — |  | — |  |   | 17,414 |  | 298 |  |
| Commercial mortgage-backed securities-Private  | 9,884 |  | 174 |  |   | — |  | — |  |   | 9,884 |  | 174 |  |
| Total held-to-maturity                         | 110,312 |  | 1,953 |  |   | 34,872 |  | 829 |  |   | 145,184 |  | 2,782 |  |
| Total                                          | $ | 344,285 |  | $ | 5,520 |  |   | $ | 167,656 |  | $ | 6,563 |  |  | $ | 511,941 |  | $ | 12,083 |  |

----

Table of Contents

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                           |   | Available-for-Sale |   | Held-to-Maturity |
| (dollars in thousands)                         |   | Amortized Cost |   | Estimated Fair Value |   | Amortized Cost |   | Estimated Fair Value |
| U.S. government sponsored agencies             |   |   |   |   |   |   |   |   |
| Due in one year or less                        |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |
| Residential mortgage-backed securities-GSE     |   |   |   |   |   |   |   |   |
| Due after five years through 10 years          |   | 1,670 |  |   | 1,716 |  |   | — |  |   | — |  |
| Due after ten years                            |   | 276,851 |  |   | 275,346 |  |   | 118,194 |  |   | 118,783 |  |
| Residential mortgage-backed securities-Private |   |   |   |   |   |   |   |   |
| Due after ten years                            |   | 31,079 |  |   | 31,434 |  |   | 16,877 |  |   | 16,845 |  |
| Commercial mortgage-backed securities-GSE      |   |   |   |   |   |   |   |   |
| Due after one year through five years          |   | 21,880 |  |   | 22,122 |  |   | — |  |   | — |  |
| Commercial mortgage-backed securities-Private  |   |   |   |   |   |   |   |   |
| Due after ten years                            |   | 17,858 |  |   | 17,848 |  |   | 10,056 |  |   | 10,225 |  |
| Corporate notes                                |   |   |   |   |   |   |   |   |
| Due in one year or less                        |   | 20,465 |  |   | 20,461 |  |   | — |  |   | — |  |
| Due after one year through five years          |   | 17,059 |  |   | 17,067 |  |   | — |  |   | — |  |
| Total                                          |   | $ | 386,862 |  |   | $ | 385,994 |  |   | $ | 145,127 |  |   | $ | 145,853 |  |

----

Table of Contents

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)      |   | Accruing |   |   |   |   |   |   |   |   |
|                        |   | 30-59 days past due |   | 60-89 days past due |   | More than 90 days past due |   | Nonaccrual |   | Total past due and nonaccrual |   | Current and accruing |   | Total Loans |
| PC and Originated Loans     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial and agricultural |   | $ | 58 |  |   | $ | — |  |   | $ | — |  |   | $ | 810 |  |   | $ | 868 |  |   | $ | 149,401 |  |   | $ | 150,269 |  |
| Real estate - construction  |   | 48 |  |   | — |  |   | — |  |   | 84 |  |   | 132 |  |   | 95,596 |  |   | 95,728 |  |
| Real estate - mortgage:     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   | 2,152 |  |   | 91 |  |   | — |  |   | 9,434 |  |   | 11,677 |  |   | 626,673 |  |   | 638,350 |  |
| Commercial                  |   | 29 |  |   | — |  |   | — |  |   | 7,509 |  |   | 7,538 |  |   | 432,113 |  |   | 439,651 |  |
| Consumer                    |   | 842 |  |   | 320 |  |   | — |  |   | 580 |  |   | 1,742 |  |   | 114,039 |  |   | 115,781 |  |
| Total                       |   | 3,129 |  |   | 411 |  |   | — |  |   | 18,417 |  |   | 21,957 |  |   | 1,417,822 |  |   | 1,439,779 |  |
| PI loans                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial and agricultural |   | 47 |  |   | — |  |   | 1,637 |  |   | — |  |   | 1,684 |  |   | 3,067 |  |   | 4,751 |  |
| Real estate - construction  |   | — |  |   | — |  |   | 1,345 |  |   | — |  |   | 1,345 |  |   | 5,929 |  |   | 7,274 |  |
| Real estate - mortgage:     |   |   |   |   |   |  |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   | 774 |  |   | 171 |  |   | 1,018 |  |   | — |  |   | 1,963 |  |   | 11,457 |  |   | 13,420 |  |
| Commercial                  |   | 86 |  |   | 263 |  |   | 9,165 |  |   | — |  |   | 9,514 |  |   | 48,807 |  |   | 58,321 |  |
| Consumer                    |   | — |  |   | 2 |  |   | 5 |  |   | — |  |   | 7 |  |   | 854 |  |   | 861 |  |
| Total                       |   | 907 |  |   | 436 |  |   | 13,170 |  |   | — |  |   | 14,513 |  |   | 70,114 |  |   | 84,627 |  |
| Total Loans                 |   | $ | 4,036 |  |   | $ | 847 |  |   | $ | 13,170 |  |   | $ | 18,417 |  |   | $ | 36,470 |  |   | $ | 1,487,936 |  |   | $ | 1,524,406 |  |

----

Table of Contents

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)      |   | Accruing |   |   |   |   |   |   |   |   |
|                        |   | 30-59 days past due |   | 60-89 days past due |   | More than 90 days past due |   | Nonaccrual |   | Total past due and nonaccrual |   | Current and accruing |   | Total Loans |
| PC and Originated Loans     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial and agricultural |   | $ | — |  |   | $ | 1 |  |   | $ | — |  |   | $ | 1,053 |  |   | $ | 1,054 |  |   | $ | 146,257 |  |   | $ | 147,311 |  |
| Real estate - construction  |   | 761 |  |   | 140 |  |   | — |  |   | 110 |  |   | 1,011 |  |   | 98,247 |  |   | 99,258 |  |
| Real estate - mortgage:     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   | 2,710 |  |   | 574 |  |   | 817 |  |   | 9,106 |  |   | 13,207 |  |   | 660,430 |  |   | 673,637 |  |
| Commercial                  |   | 661 |  |   | 34 |  |   | — |  |   | 7,209 |  |   | 7,904 |  |   | 421,220 |  |   | 429,124 |  |
| Consumer                    |   | 1,227 |  |   | 250 |  |   | 1 |  |   | 538 |  |   | 2,016 |  |   | 104,885 |  |   | 106,901 |  |
| Total                       |   | 5,359 |  |   | 999 |  |   | 818 |  |   | 18,016 |  |   | 25,192 |  |   | 1,431,039 |  |   | 1,456,231 |  |
| PI loans                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial and agricultural |   | 102 |  |   | — |  |   | 1,618 |  |   | — |  |   | 1,720 |  |   | 3,275 |  |   | 4,995 |  |
| Real estate - construction  |   | — |  |   | — |  |   | 1,455 |  |   | — |  |   | 1,455 |  |   | 6,289 |  |   | 7,744 |  |
| Real estate - mortgage:     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   | 602 |  |   | 15 |  |   | 1,127 |  |   | — |  |   | 1,744 |  |   | 12,173 |  |   | 13,917 |  |
| Commercial                  |   | 517 |  |   | 123 |  |   | 8,819 |  |   | — |  |   | 9,459 |  |   | 50,530 |  |   | 59,989 |  |
| Consumer                    |   | 8 |  |   | — |  |   | 6 |  |   | — |  |   | 14 |  |   | 905 |  |   | 919 |  |
| Total                       |   | 1,229 |  |   | 138 |  |   | 13,025 |  |   | — |  |   | 14,392 |  |   | 73,172 |  |   | 87,564 |  |
| Total Loans                 |   | $ | 6,588 |  |   | $ | 1,137 |  |   | $ | 13,843 |  |   | $ | 18,016 |  |   | $ | 39,584 |  |   | $ | 1,504,211 |  |   | $ | 1,543,795 |  |

----

Table of Contents

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)      |   | Pass |   | Special Mention |   | Substandard |   | Doubtful |   |   |
|                        |   | (Ratings 1-5) |   | (Rating 6) |   | (Rating 7) |   | (Rating 8) |   | Total |
| Commercial and agricultural |   | $ | 151,873 |  |   | $ | 570 |  |   | $ | 2,577 |  |   | $ | — |  |   | $ | 155,020 |  |
| Real estate - construction  |   | 96,350 |  |   | 2,639 |  |   | 4,013 |  |   | — |  |   | 103,002 |  |
| Real estate - mortgage:     |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   | 633,530 |  |   | 2,900 |  |   | 15,340 |  |   | — |  |   | 651,770 |  |
| Commercial                  |   | 461,100 |  |   | 10,889 |  |   | 25,983 |  |   | — |  |   | 497,972 |  |
| Consumer                    |   | 115,635 |  |   | 5 |  |   | 568 |  |   | 434 |  |   | 116,642 |  |
| Total                       |   | $ | 1,458,488 |  |   | $ | 17,003 |  |   | $ | 48,481 |  |   | $ | 434 |  |   | $ | 1,524,406 |  |

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)      |   | Pass |   | Special Mention |   | Substandard |   | Doubtful |   |   |
|                        |   | (Ratings 1-5) |   | (Rating 6) |   | (Rating 7) |   | (Rating 8) |   | Total |
| Commercial and agricultural |   | $ | 148,844 |  |   | $ | 672 |  |   | $ | 2,790 |  |   | $ | — |  |   | $ | 152,306 |  |
| Real estate - construction  |   | 100,252 |  |   | 2,122 |  |   | 4,628 |  |   | — |  |   | 107,002 |  |
| Real estate - mortgage:     |   |   |   |   |   |   |   |   |   |   |
| 1-4 family residential      |   | 669,695 |  |   | 3,508 |  |   | 14,351 |  |   | — |  |   | 687,554 |  |
| Commercial                  |   | 450,587 |  |   | 12,765 |  |   | 25,761 |  |   | — |  |   | 489,113 |  |
| Consumer                    |   | 107,008 |  |   | 4 |  |   | 553 |  |   | 255 |  |   | 107,820 |  |
| Total                       |   | $ | 1,476,386 |  |   | $ | 19,071 |  |   | $ | 48,083 |  |   | $ | 255 |  |   | $ | 1,543,795 |  |

----

Table of Contents

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

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

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

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

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Table of Contents

|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                      |   | March 31, 2016 |   | December 31, 2015 |
| (dollars in thousands)                                    |   | Recorded Investment |   | Associated Reserves |   | Recorded Investment |   | Associated Reserves |
| Impaired loans, not individually reviewed for impairment  |   | $ | 5,009 |  |   | $ | — |  |   | $ | 4,903 |  |   | $ | — |  |
| Impaired loans, individually reviewed, with no impairment |   | 20,548 |  |   | — |  |   | 22,411 |  |   | — |  |
| Impaired loans, individually reviewed, with impairment    |   | 4,525 |  |   | 384 |  |   | 3,817 |  |   | 399 |  |
| Total impaired loans, excluding purchased impaired *      |   | $ | 30,082 |  |   | 384 |  |   | $ | 31,131 |  |   | 399 |  |
|                                                      |   |   |   |   |   |   |   |   |
| Purchased impaired loans with subsequent deterioration    |   | $ | 81,519 |  |   | 2,754 |  |   | $ | 84,329 |  |   | 2,754 |  |
| Purchased impaired loans with no subsequent deterioration |   | 3,108 |  |   | — |  |   | 3,235 |  |   | — |  |
| Total Reserves                                            |   |   |   | $ | 3,138 |  |   |   |   | $ | 3,153 |  |
|                                                      |   |   |   |   |   |   |   |   |
| Average impaired loans calculated using a simple average  |   | 30,607 |  |   |   |   | 35,290 |  |   |   |

|                                                                                                                                              |
|----------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                              |  |  |  |  |  |  |  |  |
| * Included at March 31, 2016 and December 31, 2015 were $11.7 million and $13.1 million, respectively, in restructured and performing loans. |

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |
| (dollars in thousands)                               |   |   |   |   |
|                                                 |   | March 31, 2016 |   | December 31, 2015 |
| Loans held for investment:                           |   |   |   |   |
| Commercial and agricultural                          |   | $ | 810 |  |   | $ | 1,053 |  |
| Real estate - construction                           |   | 84 |  |   | 110 |  |
| Real estate - mortgage:                              |   |   |   |   |
| 1-4 family residential                               |   | 9,434 |  |   | 9,106 |  |
| Commercial                                           |   | 7,509 |  |   | 7,209 |  |
| Consumer                                             |   | 580 |  |   | 538 |  |
| Total nonaccrual loans                               |   | 18,417 |  |   | 18,016 |  |
| Loans more than 90 days delinquent, still on accrual |   | — |  |   | 817 |  |
| Total nonperforming loans                            |   | $ | 18,417 |  |   | $ | 18,833 |  |

----

Table of Contents

|                                                                          |
|--------------------------------------------------------------------------|
|                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                     |   |   |   | Unpaid |   |   |
| (dollars in thousands)                                                   |   | Recorded |   | Principal |   | Related |
|                                                                     |   | Investment |   | Balance |   | Allowance |
| Individually reviewed impaired loans with no related allowance recorded: |   |   |   |   |   |   |
|   Commercial and agricultural                                  |   | $ | 392 |  |   | $ | 479 |  |   | $ | — |  |
|   Real estate - construction                                   |   | 755 |  |   | 921 |  |   | — |  |
|   Real estate - mortgage:                                      |   |   |   |   |   |   |
| 1-4 family residential                                                   |   | 6,691 |  |   | 8,481 |  |   | — |  |
| Commercial                                                               |   | 12,710 |  |   | 17,944 |  |   | — |  |
|   Consumer                                                     |   | — |  |   | — |  |   | — |  |
| Total                                                                    |   | 20,548 |  |   | 27,825 |  |   | — |  |
| Individually reviewed impaired loans with an allowance recorded:         |   |   |   |   |   |   |
|   Commercial and agricultural                                  |   | — |  |   | — |  |   | — |  |
|   Real estate - construction                                   |   | — |  |   | — |  |   | — |  |
|   Real estate - mortgage:                                      |   |   |   |   |   |   |
| 1-4 family residential                                                   |   | 4,278 |  |   | 5,376 |  |   | 380 |  |
| Commercial                                                               |   | 247 |  |   | 291 |  |   | 4 |  |
|   Consumer                                                     |   | — |  |   | — |  |   | — |  |
| Total                                                                    |   | 4,525 |  |   | 5,667 |  |   | 384 |  |
| Total individually reviewed impaired loans:                              |   |   |   |   |   |   |
|   Commercial and agricultural                                  |   | 392 |  |   | 479 |  |   | — |  |
|   Real estate - construction                                   |   | 755 |  |   | 921 |  |   | — |  |
|   Real estate - mortgage:                                      |   |   |   |   |   |   |
| 1-4 family residential                                                   |   | 10,969 |  |   | 13,857 |  |   | 380 |  |
| Commercial                                                               |   | 12,957 |  |   | 18,235 |  |   | 4 |  |
|   Consumer                                                     |   | — |  |   | — |  |   | — |  |
| Total                                                                    |   | $ | 25,073 |  |   | $ | 33,492 |  |   | $ | 384 |  |
|                                                                     |   |   |   |   |   |   |
| PI loans with subsequent credit deterioration:                           |   |   |   |   |   |   |
|   Commercial and agricultural                                  |   | $ | 4,751 |  |   | $ | 3,691 |  |   | $ | 281 |  |
|   Real estate - construction                                   |   | 6,934 |  |   | 7,697 |  |   | 557 |  |
|   Real estate - mortgage:                                      |   |   |   |   |   |   |
|      1-4 family residential                     |   | 10,652 |  |   | 10,739 |  |   | 336 |  |
|      Commercial                                 |   | 58,321 |  |   | 57,885 |  |   | 1,456 |  |
|   Consumer                                                     |   | 861 |  |   | 553 |  |   | 124 |  |
| Total                                                                    |   | $ | 81,519 |  |   | $ | 80,565 |  |   | $ | 2,754 |  |

----

Table of Contents

|                                                                          |
|--------------------------------------------------------------------------|
|                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                     |   |   |   | Unpaid |   |   |
| (dollars in thousands)                                                   |   | Recorded |   | Principal |   | Related |
|                                                                     |   | Investment |   | Balance |   | Allowance |
| Individually reviewed impaired loans with no related allowance recorded: |   |   |   |   |   |   |
|   Commercial and agricultural                                  |   | $ | 399 |  |   | $ | 479 |  |   | $ | — |  |
|   Real estate - construction                                   |   | 775 |  |   | 939 |  |   | — |  |
|   Real estate - mortgage:                                      |   |   |   |   |   |   |
| 1-4 family residential                                                   |   | 7,418 |  |   | 9,406 |  |   | — |  |
| Commercial                                                               |   | 13,820 |  |   | 19,116 |  |   | — |  |
|   Consumer                                                     |   | — |  |   | — |  |   | — |  |
| Total                                                                    |   | 22,412 |  |   | 29,940 |  |   | — |  |
| Individually reviewed impaired loans with an allowance recorded:         |   |   |   |   |   |   |
|   Commercial and agricultural                                  |   | — |  |   | — |  |   | — |  |
|   Real estate - construction                                   |   | — |  |   | — |  |   | — |  |
|   Real estate - mortgage:                                      |   |   |   |   |   |   |
| 1-4 family residential                                                   |   | 3,817 |  |   | 4,691 |  |   | 399 |  |
| Commercial                                                               |   | — |  |   | — |  |   | — |  |
|   Consumer                                                     |   | — |  |   | — |  |   | — |  |
| Total                                                                    |   | 3,817 |  |   | 4,691 |  |   | 399 |  |
| Total individually reviewed impaired loans:                              |   |   |   |   |   |   |
|   Commercial and agricultural                                  |   | 399 |  |   | 479 |  |   | — |  |
|   Real estate - construction                                   |   | 775 |  |   | 939 |  |   | — |  |
|   Real estate - mortgage:                                      |   |   |   |   |   |   |
| 1-4 family residential                                                   |   | 11,235 |  |   | 14,097 |  |   | 399 |  |
| Commercial                                                               |   | 13,820 |  |   | 19,116 |  |   | — |  |
|   Consumer                                                     |   | — |  |   | — |  |   | — |  |
| Total                                                                    |   | $ | 26,229 |  |   | $ | 34,631 |  |   | $ | 399 |  |
|                                                                     |   |   |   |   |   |   |
| PI loans with subsequent credit deterioration:                           |   |   |   |   |   |   |
|   Commercial and agricultural                                  |   | $ | 4,995 |  |   | $ | 3,908 |  |   | $ | 311 |  |
|   Real estate - construction                                   |   | 7,323 |  |   | 8,121 |  |   | 579 |  |
|   Real estate - mortgage:                                      |   |   |   |   |   |   |
|      1-4 family residential                     |   | 11,103 |  |   | 11,327 |  |   | 384 |  |
|      Commercial                                 |   | 59,989 |  |   | 60,582 |  |   | 1,356 |  |
|   Consumer                                                     |   | 919 |  |   | 598 |  |   | 124 |  |
| Total                                                                    |   | $ | 84,329 |  |   | $ | 84,536 |  |   | $ | 2,754 |  |

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|                                                                          |
|--------------------------------------------------------------------------|
|                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                     |   | For Three Months Ended |   | For Three Months Ended |
|                                                                     |   | March 31, 2016 |   | March 31, 2015 |
|                                                                     |   | Average |   | Interest |   | Average |   | Interest |
| (dollars in thousands)                                                   |   | Recorded |   | Income |   | Recorded |   | Income |
|                                                                     |   | Investment |   | Recognized |   | Investment |   | Recognized |
| Individually reviewed impaired loans with no related allowance recorded: |   |   |   |   |   |   |   |   |
|   Commercial and agricultural                                  |   | $ | 395 |  |   | $ | — |  |   | $ | 478 |  |   | $ | — |  |
|   Real estate - construction                                   |   | 762 |  |   | 14 |  |   | 1,276 |  |   | 11 |  |
|   Real estate - mortgage:                                      |   |   |   |   |   |   |   |   |
| 1-4 family residential                                                   |   | 6,717 |  |   | 27 |  |   | 7,925 |  |   | 31 |  |
| Commercial                                                               |   | 12,828 |  |   | 93 |  |   | 13,081 |  |   | 73 |  |
|   Consumer                                                     |   | — |  |   | — |  |   | — |  |   | — |  |
| Total                                                                    |   | 20,702 |  |   | 134 |  |   | 22,760 |  |   | 115 |  |
| Individually reviewed impaired loans with an allowance recorded:         |   |   |   |   |   |   |   |   |
|   Commercial and agricultural                                  |   | — |  |   | — |  |   | — |  |   | — |  |
|   Real estate - construction                                   |   | — |  |   | — |  |   | — |  |   | — |  |
|   Real estate - mortgage:                                      |   |   |   |   |   |   |   |   |
| 1-4 family residential                                                   |   | 4,288 |  |   | 20 |  |   | 3,744 |  |   | 19 |  |
| Commercial                                                               |   | 249 |  |   | — |  |   | 3,830 |  |   | 52 |  |
|   Consumer                                                     |   | — |  |   | — |  |   | — |  |   | — |  |
| Total                                                                    |   | 4,537 |  |   | 20 |  |   | 7,574 |  |   | 71 |  |
| Total individually reviewed impaired loans:                              |   |   |   |   |   |   |   |   |
|   Commercial and agricultural                                  |   | 395 |  |   | — |  |   | 478 |  |   | — |  |
|   Real estate - construction                                   |   | 762 |  |   | 14 |  |   | 1,276 |  |   | 11 |  |
|   Real estate - mortgage:                                      |   |   |   |   |   |   |   |   |
| 1-4 family residential                                                   |   | 11,005 |  |   | 47 |  |   | 11,669 |  |   | 50 |  |
| Commercial                                                               |   | 13,077 |  |   | 93 |  |   | 16,911 |  |   | 125 |  |
|   Consumer                                                     |   | — |  |   | — |  |   | — |  |   | — |  |
| Total                                                                    |   | $ | 25,239 |  |   | $ | 154 |  |   | $ | 30,334 |  |   | $ | 186 |  |

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|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                            |   | At March 31, 2016 |
| (dollars in thousands)                          |   | Purchased Impaired |   | Purchased Contractual |   | Total Purchased Loans |   | UnpaidPrincipalBalance |
| Commercial and agricultural                     |   | $ | 4,751 |  |   | $ | 156 |  |   | $ | 4,907 |  |   | $ | 3,848 |  |
| Real estate - construction                      |   | 7,274 |  |   | — |  |   | 7,274 |  |   | 8,070 |  |
| Real estate - mortgage:                         |   |   |   |   |   |   |   |   |
|    1-4 family residential        |   | 13,420 |  |   | 17,470 |  |   | 30,890 |  |   | 31,442 |  |
|    Commercial                    |   | 58,321 |  |   | — |  |   | 58,321 |  |   | 57,885 |  |
| Consumer                                        |   | 861 |  |   | — |  |   | 861 |  |   | 553 |  |
|        Total |   | $ | 84,627 |  |   | $ | 17,626 |  |   | $ | 102,253 |  |   | $ | 101,798 |  |

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                            |   | At December 31, 2015 |
| (dollars in thousands)                          |   | Purchased Impaired |   | Purchased Contractual |   | TotalPurchased Loans |   | UnpaidPrincipalBalance |
| Commercial and agricultural                     |   | $ | 4,995 |  |   | $ | 238 |  |   | $ | 5,233 |  |   | $ | 4,149 |  |
| Real estate - construction                      |   | 7,744 |  |   | — |  |   | 7,744 |  |   | 8,579 |  |
| Real estate - mortgage:                         |   |   |   |   |   |   |   |   |
|    1-4 family residential        |   | 13,917 |  |   | 17,915 |  |   | 31,832 |  |   | 32,558 |  |
|    Commercial                    |   | 59,989 |  |   | — |  |   | 59,989 |  |   | 60,582 |  |
| Consumer                                        |   | 919 |  |   | — |  |   | 919 |  |   | 598 |  |
|        Total |   | $ | 87,564 |  |   | $ | 18,153 |  |   | $ | 105,717 |  |   | $ | 106,466 |  |

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|   |   |   |   |   |   |   |   |   |

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                           |   | For Three Months Ended |   | For Three Months Ended |
|                                           |   | March 31, 2016 |   | March 31, 2015 |
|                                           |   | Purchased Impaired |   | Purchased Impaired |
| (dollars in thousands)                         |   | Carrying Amount |   | FutureAccretion |   | Carrying Amount |   | Future Accretion |
| Balance, beginning of period                   |   | $ | 87,564 |  |   | $ | 15,623 |  |   | $ | 122,842 |  |   | $ | 24,898 |  |
|   Accretion                          |   | 1,406 |  |   | (1,406 | ) |   | 2,048 |  |   | (2,048 | ) |
| Increase (Decrease) in future accretion        |   | — |  |   | (2 | ) |   | — |  |   | (1,925 | ) |
|   Payments received                  |   | (4,343 | ) |   | — |  |   | (14,854 | ) |   | — |  |
|   Foreclosed and transferred to OREO |   | — |  |   | — |  |   | (774 | ) |   | — |  |
| Subtotal before allowance                      |   | 84,627 |  |   | 14,215 |  |   | 109,262 |  |   | 20,925 |  |
| Allowance for credit losses                    |   | (2,754 | ) |   | — |  |   | (3,194 | ) |   | — |  |
| Net carrying amount, end of period             |   | $ | 81,873 |  |   | $ | 14,215 |  |   | $ | 106,068 |  |   | $ | 20,925 |  |

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|                                                                                   |
|-----------------------------------------------------------------------------------|
|                                                                                   |  |  |  |  |  |  |  |  |
|                                                                              |   | For Three Months Ended |
| (dollars in thousands)                                                            |   | March 31, 2016 |   | March 31, 2015 |
| Balance, beginning of period                                                      |   | $ | 15,195 |  |   | $ | 20,345 |  |
| Recovery of losses charged to continuing operations                               |   | (535 | ) |   | (1,137 | ) |
| Net charge-offs:                                                                  |   |   |   |   |
| Charge-offs                                                                       |   | (1,094 | ) |   | (994 | ) |
| Recoveries                                                                        |   | 674 |  |   | 794 |  |
| Net charge-offs                                                                   |   | (420 | ) |   | (200 | ) |
| Balance, end of period                                                            |   | $ | 14,240 |  |   | $ | 19,008 |  |
| Annualized net charge-offs during the period to average loans held for investment |   | 0.11 | % |   | 0.06 | % |
| Annualized net charge-offs during the period to ALL                               |   | 11.83 | % |   | 4.27 | % |
| Allowance for loan losses to loans held for investment                            |   | 0.93 | % |   | 1.36 | % |

|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                              |   |   |   |   |   | Real Estate - Mortgage |   |   |   |   |
| (dollars in thousands)            |   | Commercial and Agricultural |   | Real Estate - Construction |   | 1-4 Family Residential |   | Commercial |   | Consumer |   | Total |
| ALL:                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning balance January 1, 2016 |   | $ | 2,402 |  |   | $ | 1,769 |  |   | $ | 5,141 |  |   | $ | 2,328 |  |   | $ | 3,555 |  |   | $ | 15,195 |  |
| Charge-offs                       |   | (159 | ) |   | — |  |   | (64 | ) |   | — |  |   | (871 | ) |   | (1,094 | ) |
| Recoveries                        |   | 253 |  |   | 136 |  |   | 130 |  |   | 40 |  |   | 115 |  |   | 674 |  |
| Provision (recovery of provision) |   | (452 | ) |   | (609 | ) |   | (832 | ) |   | 175 |  |   | 1,183 |  |   | (535 | ) |
| Ending balance March 31, 2016     |   | $ | 2,044 |  |   | $ | 1,296 |  |   | $ | 4,375 |  |   | $ | 2,543 |  |   | $ | 3,982 |  |   | $ | 14,240 |  |

|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                              |   |   |   |   |   | Real Estate - Mortgage |   |   |   |   |
| (dollars in thousands)            |   | Commercial and Agricultural |   | Real Estate - Construction |   | 1-4 Family Residential |   | Commercial |   | Consumer |   | Total |
| ALL:                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning balance January 1, 2015 |   | $ | 3,915 |  |   | $ | 3,163 |  |   | $ | 5,847 |  |   | $ | 4,179 |  |   | $ | 3,241 |  |   | $ | 20,345 |  |
| Charge-offs                       |   | (49 | ) |   | (81 | ) |   | (125 | ) |   | (7 | ) |   | (732 | ) |   | (994 | ) |
| Recoveries                        |   | 221 |  |   | 196 |  |   | 138 |  |   | 58 |  |   | 181 |  |   | 794 |  |
| Provision (recovery of provision) |   | (689 | ) |   | (158 | ) |   | (237 | ) |   | (1,078 | ) |   | 1,025 |  |   | (1,137 | ) |
| Ending balance March 31, 2015     |   | $ | 3,398 |  |   | $ | 3,120 |  |   | $ | 5,623 |  |   | $ | 3,152 |  |   | $ | 3,715 |  |   | $ | 19,008 |  |

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|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                      |   |   |   |   |   | Real Estate - Mortgage |   |   |   |   |
| (dollars in thousands)                                    |   | Commercial and Agricultural |   | Real Estate - Construction |   | 1-4 Family Residential |   | Commercial |   | Consumer |   | Total |
| ALL:                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
|   Individually reviewed for impairment          |   | $ | — |  |   | $ | — |  |   | $ | 380 |  |   | $ | 4 |  |   | $ | — |  |   | $ | 384 |  |
|   Collectively reviewed for impairment          |   | 1,763 |  |   | 739 |  |   | 3,659 |  |   | 1,083 |  |   | 3,858 |  |   | 11,102 |  |
|   PI loans reviewed for credit impairment       |   | 281 |  |   | 557 |  |   | 336 |  |   | 1,456 |  |   | 124 |  |   | 2,754 |  |
|   PI loans with no credit deterioration         |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Total ALL                                                 |   | $ | 2,044 |  |   | $ | 1,296 |  |   | $ | 4,375 |  |   | $ | 2,543 |  |   | $ | 3,982 |  |   | $ | 14,240 |  |
| Loans held for investment:                                |   |   |   |   |   |   |   |   |   |   |   |   |
|   Individually reviewed for impairment          |   | $ | 392 |  |   | $ | 755 |  |   | $ | 10,969 |  |   | $ | 12,957 |  |   | $ | — |  |   | $ | 25,073 |  |
|   Collectively reviewed for impairment          |   | 149,877 |  |   | 94,973 |  |   | 627,381 |  |   | 426,694 |  |   | 115,781 |  |   | 1,414,706 |  |
|   PI loans with subsequent credit deterioration |   | 4,751 |  |   | 6,934 |  |   | 10,652 |  |   | 58,321 |  |   | 861 |  |   | 81,519 |  |
|   PI loans with no credit deterioration         |   | — |  |   | 340 |  |   | 2,768 |  |   | — |  |   | — |  |   | 3,108 |  |
| Total loans                                               |   | $ | 155,020 |  |   | $ | 103,002 |  |   | $ | 651,770 |  |   | $ | 497,972 |  |   | $ | 116,642 |  |   | $ | 1,524,406 |  |

|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                      |   |   |   |   |   | Real Estate - Mortgage |   |   |   |   |
| (dollars in thousands)                                    |   | Commercial and Agricultural |   | Real Estate - Construction |   | 1-4 Family Residential |   | Commercial |   | Consumer |   | Total |
| ALL:                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
|   Individually reviewed for impairment          |   | $ | — |  |   | $ | — |  |   | $ | 399 |  |   | $ | — |  |   | $ | — |  |   | $ | 399 |  |
|   Collectively reviewed for impairment          |   | 2,091 |  |   | 1,190 |  |   | 4,358 |  |   | 972 |  |   | 3,431 |  |   | 12,042 |  |
|   PI loans reviewed for credit impairment       |   | 311 |  |   | 579 |  |   | 384 |  |   | 1,356 |  |   | 124 |  |   | 2,754 |  |
|   PI loans with no credit deterioration         |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Total ALL                                                 |   | $ | 2,402 |  |   | $ | 1,769 |  |   | $ | 5,141 |  |   | $ | 2,328 |  |   | $ | 3,555 |  |   | $ | 15,195 |  |
| Loans held for investment:                                |   |   |   |   |   |   |   |   |   |   |   |   |
|   Individually reviewed for impairment          |   | $ | 399 |  |   | $ | 775 |  |   | $ | 11,235 |  |   | $ | 13,820 |  |   | $ | — |  |   | $ | 26,229 |  |
|   Collectively reviewed for impairment          |   | 146,912 |  |   | 98,483 |  |   | 662,402 |  |   | 415,304 |  |   | 106,901 |  |   | 1,430,002 |  |
|   PI loans with subsequent credit deterioration |   | 4,995 |  |   | 7,323 |  |   | 11,103 |  |   | 59,989 |  |   | 919 |  |   | 84,329 |  |
|   PI loans with no credit deterioration         |   | — |  |   | 421 |  |   | 2,814 |  |   | — |  |   | — |  |   | 3,235 |  |
| Total loans                                               |   | $ | 152,306 |  |   | $ | 107,002 |  |   | $ | 687,554 |  |   | $ | 489,113 |  |   | $ | 107,820 |  |   | $ | 1,543,795 |  |

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

|                                          |
|------------------------------------------|
|                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                     |   | For Three Months Ended March 31, 2016 |   | For Three Months Ended March 31, 2015 |
|                                     |   |   |   | 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 |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
|    Commercial             |   | 2 |  |   | 332 |  |   | 332 |  |   | — |  |   | — |  |   | — |  |
| Consumer                                 |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
|     Total            |   | 2 |  |   | $ | 332 |  |   | $ | 332 |  |   | — |  |   | $ | — |  |   | $ | — |  |

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

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

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

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |
| (dollars in thousands)                         |   | March 31, 2016 |   | December 31, 2015 |
| Real estate acquired in settlement of loans    |   | $ | 13,845 |  |   | $ | 16,251 |  |
| Property acquired in settlement of loans       |   | 313 |  |   | 332 |  |
| Total property acquired in settlement of loans |   | $ | 14,158 |  |   | $ | 16,583 |  |

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

|                                                                  |
|------------------------------------------------------------------|
|                                                                  |  |  |  |  |  |  |  |  |
|                                                             |   | For Three Months Ended |
| (dollars in thousands)                                           |   | March 31, 2016 |   | March 31, 2015 |
| Real estate acquired in settlement of loans, beginning of period |   | $ | 16,251 |  |   | $ | 20,122 |  |
| Plus:  New real estate acquired in settlement of loans           |   | 59 |  |   | 2,495 |  |
| Less:  Sales of real estate acquired in settlement of loans      |   | (1,964 | ) |   | (1,490 | ) |
| Less:  Write-downs and net loss on sales charged to expense      |   | (501 | ) |   | (294 | ) |
| Real estate acquired in settlement of loans, end of period       |   | $ | 13,845 |  |   | $ | 20,833 |  |

|                                                         |
|---------------------------------------------------------|
|                                                         |  |  |  |  |  |  |  |  |
| (dollars in thousands, except share and per share data) |   | For Three Months Ended |
|                                                    |   | March 31, 2016 |   | March 31, 2015 |
| Net income                                              |   | $ | 3,914 |  |   | $ | 2,519 |  |
| Weighted average number of shares outstanding - basic   |   | 24,292,004 |  |   | 24,183,396 |  |
| Weighted average number of shares outstanding - diluted |   | 24,314,112 |  |   | 24,195,108 |  |
| Net income per share - basic and diluted                |   | $ | 0.16 |  |   | $ | 0.10 |  |

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|                                                                      |
|----------------------------------------------------------------------|
|                                                                      |  |  |  |  |  |  |  |  |
|                                                                 |   | Gain (Loss) Recognized |
| (dollars in thousands)                                               |   | For Three Months Ended |
|                                                                 |   | March 31, 2016 |   | March 31, 2015 |
| Derivatives designated as hedging instruments:                       |   |   |   |   |
|     Interest rate swap contracts - FHLB advances |   | $ | (549 | ) |   | $ | (321 | ) |
| Derivatives not designated as hedging instruments:                   |   |   |   |   |
| Mortgage loan rate lock commitments                                  |   | $ | 1 |  |   | $ | (7 | ) |
| Mortgage loan forward sales                                          |   | 7 |  |   | 79 |  |
| Total                                                                |   | $ | 8 |  |   | $ | 72 |  |
|                                                                 |   |   |   |   |

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|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)                         |   | Total |   | Level 1 |   | Level 2 |   | Level 3 |
| Assets:                                        |   |   |   |   |   |   |   |   |
| Available-for-sale debt securities:            |   |   |   |   |   |   |   |   |
| U.S. government sponsored agencies             |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |
| Residential mortgage-backed securities-GSE     |   | 277,062 |  |   | — |  |   | 277,062 |  |   | — |  |
| Residential mortgage-backed securities-Private |   | 31,434 |  |   | — |  |   | 31,434 |  |   | — |  |
| Commercial mortgage-backed securities-GSE      |   | 22,122 |  |   | — |  |   | 22,122 |  |   | — |  |
| Commercial mortgage-backed securities-Private  |   | 17,848 |  |   | — |  |   | 17,848 |  |   | — |  |
| Corporate notes                                |   | 37,528 |  |   | — |  |   | 37,528 |  |   | — |  |
| Total available-for-sale debt securities       |   | 385,994 |  |   | — |  |   | 385,994 |  |   | — |  |
| Mortgage servicing rights                      |   | 2,654 |  |   | — |  |   | — |  |   | 2,654 |  |
| Interest rate swaps                            |   | (1,627 | ) |   | — |  |   | (1,627 | ) |   | — |  |
| Total assets at fair value                     |   | $ | 387,021 |  |   | $ | — |  |   | $ | 384,367 |  |   | $ | 2,654 |  |

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)                         |   | Total |   | Level 1 |   | Level 2 |   | Level 3 |
| Assets:                                        |   |   |   |   |   |   |   |   |
| Available-for-sale debt securities:            |   |   |   |   |   |   |   |   |
| U.S. government sponsored agencies             |   | $ | 2,008 |  |   | $ | — |  |   | $ | 2,008 |  |   | $ | — |  |
| Residential mortgage-backed securities-GSE     |   | 278,107 |  |   | — |  |   | 278,107 |  |   | — |  |
| Residential mortgage-backed securities-Private |   | 33,577 |  |   | — |  |   | 33,577 |  |   | — |  |
| Commercial mortgage-backed securities-GSE      |   | 21,611 |  |   | — |  |   | 21,611 |  |   | — |  |
| Commercial mortgage-backed securities-Private  |   | 17,575 |  |   | — |  |   | 17,575 |  |   | — |  |
| Corporate notes                                |   | 37,555 |  |   | — |  |   | 37,555 |  |   | — |  |
| Total available-for-sale debt securities       |   | 390,433 |  |   | — |  |   | 390,433 |  |   | — |  |
| Mortgage servicing rights                      |   | 2,231 |  |   | — |  |   | — |  |   | 2,231 |  |
| Interest rate swaps                            |   | (755 | ) |   | — |  |   | (755 | ) |   | — |  |
| Total assets at fair value                     |   | $ | 391,909 |  |   | $ | — |  |   | $ | 389,678 |  |   | $ | 2,231 |  |

----

Table of Contents

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |
|                                                  |   | Fair Value Measurements Using Significant |
|                                                  |   | Unobservable Inputs (Level 3) |
|                                                  |   | Mortgage Servicing Rights |
| (dollars in thousands)                                |   | Three Months Ended March 31, |
|                                                  |   | 2016 |   | 2015 |
| Balance, beginning of period                          |   | $ | 2,231 |  |   | $ | 1,726 |  |
| Total gains or losses (realized/unrealized):          |   |   |   |   |
| Included in earnings, gross                           |   | 593 |  |   | 300 |  |
|       Less amortization |   | (170 | ) |   | (130 | ) |
| Balance, end of period                                |   | $ | 2,654 |  |   | $ | 1,896 |  |

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

----

Table of Contents

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)                                |   | Total |   | Level 1 |   | Level 2 |   | Level 3 |
| Impaired loans, net                                   |   | $ | 2,364 |  |   | $ | — |  |   | $ | — |  |   | $ | 2,364 |  |
| Other real estate owned                               |   | 7,159 |  |   | — |  |   | — |  |   | 7,159 |  |
| Total assets at fair value from continuing operations |   | $ | 9,523 |  |   | $ | — |  |   | $ | — |  |   | $ | 9,523 |  |

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)                                |   | Total |   | Level 1 |   | Level 2 |   | Level 3 |
| Impaired loans, net                                   |   | $ | 3,418 |  |   | $ | — |  |   | $ | — |  |   | $ | 3,418 |  |
| Other real estate owned                               |   | 10,630 |  |   | — |  |   | — |  |   | 10,630 |  |
| Total assets at fair value from continuing operations |   | $ | 14,048 |  |   | $ | — |  |   | $ | — |  |   | $ | 14,048 |  |

|                           |
|---------------------------|
|                           |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)    |   | Fair Value at March 31, 2016 |   | Valuation Techniques |   | UnobservableInput |   | Range |
|                           |   |   |   |   |   |   |   |   |
| Impaired loans, net       |   | $ | 2,364 |  |   | Discounted appraisals |   | Collateral discounts |   | 1.00% - 30.00% |
| Other real estate owned   |   | 7,159 |  |   | Discounted appraisals |   | Collateral discounts |   | 1.00% - 30.00% |
| Mortgage servicing rights |   | 2,654 |  |   | 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, 2015 |   | Valuation Techniques |   | UnobservableInput |   | Range |
|                      |   |   |   |   |   |   |   |   |
| Impaired loans, net       |   | $ | 3,418 |  |   | Discounted appraisals |   | Collateral discounts |   | 1.00%-30.00% |
| Other real estate owned   |   | 10,630 |  |   | Discounted appraisals |   | Collateral discounts |   | 1.00%-30.00% |
| Mortgage servicing rights |   | 2,231 |  |   | Discounted cash flows |   | Prepayment rate |   | 10.00% - 25.00% |
| Mortgage servicing rights |   |   |   |   |   | Discount rate |   | 6.00% - 10.00% |

----

Table of Contents

|                                            |
|--------------------------------------------|
|                                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                       |   | At March 31, 2016 |
| (dollars in thousands)                     |   | Carrying Value |   | Estimated Fair Value |   | Level 1 |   | Level 2 |   | Level 3 |
| Financial Assets:                          |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                  |   | $ | 63,578 |  |   | $ | 63,578 |  |   | $ | 63,578 |  |   | $ | — |  |   | $ | — |  |
| Investment securities:  Available-for-sale |   | 385,994 |  |   | 385,994 |  |   | — |  |   | 385,994 |  |   | — |  |
| Investment securities:  Held-to-maturity   |   | 145,127 |  |   | 145,853 |  |   | — |  |   | 145,853 |  |   | — |  |
| Loans held for sale                        |   | 4,328 |  |   | 4,328 |  |   | — |  |   | 4,328 |  |   | — |  |
| Loans held for investment, net             |   | 1,510,166 |  |   | 1,512,307 |  |   | — |  |   | — |  |   | 1,512,307 |  |
| Accrued interest receivable                |   | 5,421 |  |   | 5,421 |  |   | 3 |  |   | 1,522 |  |   | 3,896 |  |
| Interest rate swaps                        |   | (1,627 | ) |   | (1,627 | ) |   | — |  |   | (1,627 | ) |   | — |  |
| Financial Liabilities:                     |   |   |   |   |   |   |   |   |   |   |
| Deposits                                   |   | 1,955,190 |  |   | 1,956,107 |  |   | — |  |   | 1,956,107 |  |   | — |  |
| Retail repurchase agreements               |   | 7,352 |  |   | 7,352 |  |   | — |  |   | 7,352 |  |   | — |  |
| Federal Home Loan Bank advances            |   | 65,167 |  |   | 67,437 |  |   | — |  |   | 67,437 |  |   | — |  |
| Long-term notes payable                    |   | 5,435 |  |   | 5,435 |  |   | — |  |   | — |  |   | 5,435 |  |
| Junior subordinated debentures             |   | 56,702 |  |   | 31,853 |  |   | — |  |   | — |  |   | 31,853 |  |
| Accrued interest payable                   |   | 387 |  |   | 387 |  |   | — |  |   | 368 |  |   | 19 |  |

----

Table of Contents

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                  |   | At December 31, 2015 |
| (dollars in thousands)                                |   | Carrying Value |   | Estimated Fair Value |   | Level 1 |   | Level 2 |   | Level 3 |
| Financial Assets:                                     |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                             |   | $ | 39,175 |  |   | $ | 39,175 |  |   | $ | 39,175 |  |   | $ | — |  |   | $ | — |  |
| Investment securities:  Available-for-sale            |   | 390,434 |  |   | 390,434 |  |   | — |  |   | 390,434 |  |   | — |  |
| Investment securities:  Held-to-maturity              |   | 147,967 |  |   | 145,184 |  |   | — |  |   | 145,184 |  |   | — |  |
| Loans held for sale                                   |   | 5,403 |  |   | 5,403 |  |   | — |  |   | 5,403 |  |   | — |  |
| Loans held for investment, net                        |   | 1,528,600 |  |   | 1,513,226 |  |   | — |  |   | — |  |   | 1,513,226 |  |
| Accrued interest receivable                           |   | 5,305 |  |   | 5,305 |  |   | — |  |   | 1,630 |  |   | 3,675 |  |
| Interest rate locks and forward loan sale commitments |   | (755 | ) |   | (755 | ) |   | — |  |   | (755 | ) |   | — |  |
| Financial Liabilities:                                |   |   |   |   |   |   |   |   |   |   |
| Deposits                                              |   | 1,947,537 |  |   | 1,945,691 |  |   | — |  |   | 1,945,691 |  |   | — |  |
| Retail repurchase agreements                          |   | 7,219 |  |   | 7,219 |  |   | — |  |   | 7,219 |  |   | — |  |
| Federal Home Loan Bank advances                       |   | 93,681 |  |   | 95,781 |  |   | — |  |   | 95,781 |  |   | — |  |
| Long-term notes payable                               |   | 5,415 |  |   | 5,415 |  |   | — |  |   | — |  |   | 5,415 |  |
| Junior subordinated debentures                        |   | 56,702 |  |   | 32,536 |  |   | — |  |   | — |  |   | 32,536 |  |
| Accrued interest payable                              |   | 367 |  |   | 367 |  |   | — |  |   | 349 |  |   | 18 |  |

----

Table of Contents

|                                                                  |
|------------------------------------------------------------------|
|                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in thousands)                                           |   | Unrealized Gains (Losses) on Available-For-Sale Securities |   | Interest Rate Swaps |   | Defined Benefit Plan Items |   | Total |
|                                                             |   |   |   |   |   |   |   |   |
| Beginning balance January 1, 2016                                |   | $ | (5,176 | ) |   | $ | (466 | ) |   | $ | (5,097 | ) |   | $ | (10,739 | ) |
| Other comprehensive income (loss) before reclassifications       |   | 4,634 |  |   | (551 | ) |   | (54 | ) |   | 4,029 |  |
| Amounts reclassified from accumulated other comprehensive income |   | — |  |   | 2 |  |   | — |  |   | 2 |  |
| Net current period other comprehensive income  (loss)            |   | 4,634 |  |   | (549 | ) |   | (54 | ) |   | 4,031 |  |
| Ending balance March 31, 2016                                    |   | $ | (542 | ) |   | $ | (1,015 | ) |   | $ | (5,151 | ) |   | $ | (6,708 | ) |

|                                                                  |
|------------------------------------------------------------------|
|                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in thousands)                                           |   | Unrealized Gains (Losses) on Available-For-Sale Securities |   | Interest Rate Swaps |   | Defined Benefit Plan Items |   | Total |
|                                                             |   |   |   |   |   |   |   |   |
| Beginning balance January 1, 2015                                |   | $ | (3,017 | ) |   | $ | (324 | ) |   | $ | (4,134 | ) |   | $ | (7,475 | ) |
| Other comprehensive income (loss) before reclassifications       |   | 1,660 |  |   | (323 | ) |   | — |  |   | 1,337 |  |
| Amounts reclassified from accumulated other comprehensive income |   | — |  |   | 2 |  |   | — |  |   | 2 |  |
| Net current period other comprehensive income (loss)             |   | 1,660 |  |   | (321 | ) |   | — |  |   | 1,339 |  |
| Ending balance March 31, 2015                                    |   | $ | (1,357 | ) |   | $ | (645 | ) |   | $ | (4,134 | ) |   | $ | (6,136 | ) |

|                                        |
|----------------------------------------|
|                                        |  |  |  |  |  |  |  |  |  |
| (Dollars in thousands)                 | Amount Reclassified from AOCI |   |   |
|                                   | For Three Months Ended |   |   |
|                                   | March 31, 2016 |   | March 31, 2015 |   | Line Item in the Consolidated Statement of Operations |
| Interest rate swaps:                   |   |   |   |   |   |
| Swap ineffectiveness expense           | 3 |  |   | 3 |  |   | Other expense |
| Income tax benefit                     | (1 | ) |   | (1 | ) |   | Income tax expense |
| Total, net of tax                      | 2 |  |   | 2 |  |   |   |
| Total reclassifications for the period | $ | 2 |  |   | $ | 2 |  |   |   |

----

|                                            |
|--------------------------------------------|
|                                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| March 31, 2016                             |   |   |   |   |   |   |   |
| (dollars in thousands)                     | Remaining Contractual Maturity of the Agreements |
|                                       | Overnight and Continuous |   | 1 - 90 days |   | Over 90 days |   | Total |
| Residential mortgage-backed securities-GSE | $ | 7,352 |  |   | $ | — |  |   | $ | — |  |   | $ | 7,352 |  |
|                                       |   |   |   |   |   |   |   |
| December 31, 2015                          |   |   |   |   |   |   |   |
| (dollars in thousands)                     | Remaining Contractual Maturity of the Agreements |
|                                       | Overnight and Continuous |   | 1 - 90 days |   | Over 90 days |   | Total |
| Residential mortgage-backed securities-GSE | $ | 7,219 |  |   | $ | — |  |   | $ | — |  |   | $ | 7,219 |  |

----

Table of Contents

|         |                                                                                      |
|---------|--------------------------------------------------------------------------------------|
| • | Our ability to continue to grow our business internally while controlling our costs; |

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

|         |                                                                                                            |
|---------|------------------------------------------------------------------------------------------------------------|
| • | A material delay or inability to obtain regulatory approval of the Merger and meet the other conditions to |

|         |                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------|
| • | The successful completion of the Merger and subsequent integration of the two businesses without material customer |

|         |                                                                                                                                                                                                                                                                 |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The accuracy of our assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of real estate and other assets, which could affect repayment of such borrowers' outstanding loans; |

|         |                                                                                                             |
|---------|-------------------------------------------------------------------------------------------------------------|
| • | Material changes in the quality of our loan portfolio and the resulting credit related losses and expenses; |

|         |                                                                           |
|---------|---------------------------------------------------------------------------|
| • | The accuracy of our assumptions relating to the establishment of our ALL; |

|         |                                                                  |
|---------|------------------------------------------------------------------|
| • | Adverse changes in the value of real estate in our market areas; |

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

|         |                                                                                                                                                    |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------|
| • | 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; |

|         |                                    |
|---------|------------------------------------|
| • | Declines in the value of our OREO; |

|         |                                                                                                                                |
|---------|--------------------------------------------------------------------------------------------------------------------------------|
| • | The accuracy of our assumptions relating to our ability to use net operating loss carryforwards to reduce future tax payments; |

|         |                                                                                                                   |
|---------|-------------------------------------------------------------------------------------------------------------------|
| • | The loss of one or more members of executive management and our ability to retain key lenders and other employees |

|         |                                                                                                                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Less favorable general economic conditions, either nationally or regionally; resulting in, among other things, a reduced demand for our credit or other services and thus reduced origination volume; |

|         |                                                                                                                                 |
|---------|---------------------------------------------------------------------------------------------------------------------------------|
| • | Increased competitive pressures in the banking industry or in COB's markets affecting pricing or product and service offerings; |

|         |                                                                         |
|---------|-------------------------------------------------------------------------|
| • | Our ability to respond to rapid technological developments and changes; |

|         |                                                           |
|---------|-----------------------------------------------------------|
| • | Disruptions in or manipulations of our operating systems; |

|         |                                                                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Information security risks impacting us or our vendors, including “hacking” and “identity theft,” that could adversely affect |

|         |                                                                                         |
|---------|-----------------------------------------------------------------------------------------|
| • | The loss or disruption of the services provided by one or more of our critical vendors; |

|         |                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------|
| • | Our ability to achieve our targeted reductions in costs and expenses, particularly in light of the pending Merger; |

|         |                                                                                                                           |
|---------|---------------------------------------------------------------------------------------------------------------------------|
| • | The impact of laws and regulatory requirements, including the Basel III capital rules, Bank Secrecy Act requirements, and |

|         |                                                                                                                         |
|---------|-------------------------------------------------------------------------------------------------------------------------|
| • | Changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board; |

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

----

Table of Contents

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

----

Table of Contents

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |
| (dollars in thousands, except per share data)  |   | As of and for Three Months Ended |
|                                           |   | March 31, 2016 |   | March 31, 2015 |
| Income Statement Data                          |   |   |   |   |
| Net interest income                            |   | $ | 17,783 |  |   | $ | 16,774 |  |
| Recovery of loan losses                        |   | (535 | ) |   | (1,137 | ) |
| Noninterest income                             |   | 6,323 |  |   | 4,034 |  |
| Noninterest expense                            |   | 18,401 |  |   | 18,008 |  |
| Income before income taxes                     |   | 6,240 |  |   | 3,937 |  |
| Net income                                     |   | 3,914 |  |   | 2,519 |  |
| Period End Balances                            |   |   |   |   |
| Assets                                         |   | $ | 2,385,325 |  |   | $ | 2,231,934 |  |
| Loans held for sale                            |   | 4,328 |  |   | 7,571 |  |
| Loans held for investment (1)                  |   | 1,524,406 |  |   | 1,395,911 |  |
| Allowance for loan losses                      |   | 14,240 |  |   | 19,008 |  |
| Goodwill and other intangible assets           |   | 9,478 |  |   | 9,705 |  |
| Deferred tax assets, net                       |   | 136,912 |  |   | 144,223 |  |
| Deposits                                       |   | 1,955,190 |  |   | 1,807,472 |  |
| Borrowings                                     |   | 134,656 |  |   | 138,118 |  |
| Shareholders' equity                           |   | 281,151 |  |   | 270,952 |  |
| Average Balances                               |   |   |   |   |
| Assets                                         |   | $ | 2,394,540 |  |   | $ | 2,202,247 |  |
| Loans held for sale                            |   | 3,417 |  |   | 2,780 |  |
| Loans held for investment (1)                  |   | 1,554,367 |  |   | 1,376,053 |  |
| Allowance for loan losses                      |   | 15,035 |  |   | 20,239 |  |
| Goodwill and other intangible assets           |   | 9,204 |  |   | 9,697 |  |
| Deferred tax assets, net                       |   | 139,722 |  |   | 143,359 |  |
| Deposits                                       |   | 1,932,007 |  |   | 1,781,534 |  |
| Borrowings                                     |   | 171,262 |  |   | 138,756 |  |
| Shareholders' equity                           |   | 278,079 |  |   | 268,799 |  |
| Per Common Share Data                          |   |   |   |   |
| Net income - basic and diluted                 |   | $ | 0.16 |  |   | $ | 0.10 |  |
| Core net income - diluted (2)                  |   | 0.18 |  |   | 0.10 |  |
| Book value (shareholders' equity)              |   | 11.57 |  |   | 11.20 |  |
| Tangible book value (shareholders' equity) (2) |   | 11.18 |  |   | 10.80 |  |
| Performance Ratios                             |   |   |   |   |
| Return on average assets                       |   | 0.66 | % |   | 0.46 | % |
| Core return on average assets (2)              |   | 0.74 |  |   | 0.46 |  |
| Pre-tax return on average assets               |   | 1.05 |  |   | 0.73 |  |
| Return on average tangible assets (2)          |   | 0.70 |  |   | 0.47 |  |
| Return on average equity                       |   | 5.58 |  |   | 3.80 |  |
| Return on average tangible equity (2)          |   | 5.77 |  |   | 3.94 |  |
| Net interest margin (tax equivalent)           |   | 3.38 |  |   | 3.54 |  |

----

Table of Contents

|                                                                       |
|-----------------------------------------------------------------------|
|                                                                       |  |  |  |  |  |  |  |  |
| Asset Quality Ratios                                                  |   |   |   |   |
| Allowance for loan losses to period end loans held for investment (1) |   | 0.93 | % |   | 1.36 | % |
| Net annualized charge-offs to average loans held for investment (1)   |   | 0.11 | % |   | 0.06 | % |
| Classified assets to Tier 1 capital and allowance for loan losses     |   | 34.0 |  |   | 38.8 |  |
| Nonperforming assets to period end total assets (3)                   |   | 1.4 |  |   | 1.9 |  |
| Capital and Liquidity Ratios                                          |   |   |   |   |
| Average equity to average assets                                      |   | 11.61 | % |   | 12.21 | % |
| Leverage capital                                                      |   | 8.54 |  |   | 8.47 |  |
| Common equity tier 1 risk-based capital                               |   | 11.81 |  |   | 11.86 |  |
| Tier 1 risk-based capital                                             |   | 11.81 |  |   | 11.86 |  |
| Total risk-based capital                                              |   | 13.66 |  |   | 14.40 |  |
| Period end loans to period end deposits                               |   | 78 |  |   | 77 |  |

----

----

Table of Contents

|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                      | Three Months Ended March 31, |
|                                                      | 2016 |   | 2015 |
|                                                      |   |   |   |   | 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)                                              | $ | 1,557,784 |  |   | $ | 16,984 |  |   | 4.39 | % |   | $ | 1,378,833 |  |   | $ | 15,891 |  |   | 4.67 | % |
| Investment securities                                     | 536,076 |  |   | 3,283 |  |   | 2.46 |  |   | 507,765 |  |   | 3,224 |  |   | 2.58 |  |
| Other earning assets                                      | 25,780 |  |   | 234 |  |   | 3.65 |  |   | 35,899 |  |   | 171 |  |   | 1.93 |  |
|   Total earning assets                          | 2,119,640 |  |   | 20,501 |  |   | 3.89 |  |   | 1,922,497 |  |   | 19,286 |  |   | 4.07 |  |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-earning assets:                               |   |   |   |   |   |   |   |   |   |   |   |
| Cash and due from banks                                   | 24,734 |  |   |   |   |   |   | 26,463 |  |   |   |   |   |
| Goodwill and other intangible assets                      | 9,204 |  |   |   |   |   |   | 9,697 |  |   |   |   |   |
| Other assets, net                                         | 240,962 |  |   |   |   |   |   | 243,590 |  |   |   |   |   |
|   Total assets                                  | $ | 2,394,540 |  |   |   |   |   |   | $ | 2,202,247 |  |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                             |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand deposits                          | $ | 365,877 |  |   | $ | 220 |  |   | 0.24 | % |   | $ | 350,165 |  |   | $ | 255 |  |   | 0.30 | % |
| Savings deposits                                          | 97,059 |  |   | 25 |  |   | 0.10 |  |   | 88,012 |  |   | 22 |  |   | 0.10 |  |
| Money market deposits                                     | 476,207 |  |   | 394 |  |   | 0.33 |  |   | 433,370 |  |   | 313 |  |   | 0.29 |  |
| Time deposits                                             | 618,032 |  |   | 1,240 |  |   | 0.81 |  |   | 587,434 |  |   | 1,141 |  |   | 0.79 |  |
|   Total interest-bearing deposits               | 1,557,175 |  |   | 1,879 |  |   | 0.49 |  |   | 1,458,981 |  |   | 1,731 |  |   | 0.48 |  |
| Retail repurchase agreements                              | 7,334 |  |   | 4 |  |   | 0.22 |  |   | 8,480 |  |   | 5 |  |   | 0.24 |  |
| Federal Home Loan Bank advances                           | 101,804 |  |   | 502 |  |   | 1.98 |  |   | 68,229 |  |   | 469 |  |   | 2.79 |  |
| Other borrowed funds                                      | 62,124 |  |   | 320 |  |   | 2.07 |  |   | 62,047 |  |   | 289 |  |   | 1.89 |  |
|   Total interest-bearing liabilities            | 1,728,437 |  |   | 2,705 |  |   | 0.63 |  |   | 1,597,737 |  |   | 2,494 |  |   | 0.63 |  |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing liabilities and shareholders' equity: |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing demand deposits                       | 374,831 |  |   |   |   |   |   | 322,553 |  |   |   |   |   |
| Other liabilities                                         | 13,193 |  |   |   |   |   |   | 13,158 |  |   |   |   |   |
| Shareholders' equity                                      | 278,079 |  |   |   |   |   |   | 268,799 |  |   |   |   |   |
|   Total liabilities and shareholders' equity    | $ | 2,394,540 |  |   |   |   |   |   | $ | 2,202,247 |  |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income and net yield on earning assets (4)   |   |   | $ | 17,796 |  |   | 3.38 | % |   |   |   | $ | 16,792 |  |   | 3.54 | % |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate spread (5)                                  |   |   |   |   | 3.26 | % |   |   |   |   |   | 3.44 | % |

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

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|                                                                             |  |  |  |  |  |  |  |
|                                                                        | Three Months Ended |
| (dollars in thousands)                                                      | March 31, 2016 |   | March 31, 2015 |
| Noninterest Income                                                          |   |   |   |
|     Service charges on deposit accounts                 | $ | 1,557 |  |   | $ | 1,434 |  |
|     Mortgage loan income                                | 2,141 |  |   | 465 |  |
|     Cardholder and merchant services income             | 1,241 |  |   | 1,125 |  |
|     Trust and investment services                       | 380 |  |   | 322 |  |
|     Bank-owned life insurance                           | 269 |  |   | 250 |  |
|     Other service charges, commissions and fees         | 443 |  |   | 383 |  |
|     Other income                                        | 292 |  |   | 55 |  |
|         Total noninterest income    | 6,323 |  |   | 4,034 |  |
| Less nonrecurring items:                                                    |   |   |   |
|                                                                        | — |  |   | — |  |
|         Core noninterest income (1) | $ | 6,323 |  |   | $ | 4,034 |  |

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|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |  |  |  |  |  |  |  |
|                                                                         | Three Months Ended |
| (dollars in thousands)                                                       | March 31, 2016 |   | March 31, 2015 |
| Noninterest Expense                                                          |   |   |   |
|     Personnel expense                                    | $ | 10,138 |  |   | $ | 10,594 |  |
|     Net occupancy expense                                | 1,553 |  |   | 1,469 |  |
|     Furniture, equipment and data processing expense     | 2,130 |  |   | 1,989 |  |
|     Professional fees                                    | 450 |  |   | 539 |  |
|     Stationery, printing and supplies                    | 160 |  |   | 176 |  |
|     Advertising and marketing                            | 60 |  |   | 186 |  |
|     Other real estate owned expense                      | 484 |  |   | 360 |  |
|     Credit/debit card expense                            | 439 |  |   | 543 |  |
|     FDIC insurance                                       | 461 |  |   | 453 |  |
|     Loan collection expense                              | 149 |  |   | 300 |  |
|     Merger-related expense                               | 771 |  |   | — |  |
|     Core deposit intangible amortization                 | 338 |  |   | 352 |  |
|     Other expense                                        | 1,268 |  |   | 1,047 |  |
|         Total noninterest expense    | 18,401 |  |   | 18,008 |  |
| Less nonrecurring:                                                           |   |   |   |
| Merger-related expense                                                       | 771 |  |   | — |  |
|         Core noninterest expense (1) | $ | 17,630 |  |   | $ | 18,008 |  |

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|                                                                                                                                              |
|----------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                                                         |   | March 31, 2016 |   | December 31, 2015 |
| (dollars in thousands)                                                                                                                       |   | Balance |   | Associated Reserves |   | Balance |   | Associated Reserves |
| Impaired loans, not individually reviewed for impairment                                                                                     |   | $ | 5,009 |  |   | $ | — |  |   | $ | 4,903 |  |   | $ | — |  |
| Impaired loans, individually reviewed, with no impairment                                                                                    |   | 20,548 |  |   | — |  |   | 22,411 |  |   | — |  |
| Impaired loans, individually reviewed, with impairment                                                                                       |   | 4,525 |  |   | 384 |  |   | 3,817 |  |   | 399 |  |
| Total impaired loans *                                                                                                                       |   | $ | 30,082 |  |   | 384 |  |   | $ | 31,131 |  |   | 399 |  |
|                                                                                                                                         |   |   |   |   |   |   |   |   |
| Purchased impaired loans with subsequent deterioration                                                                                       |   | $ | 81,519 |  |   | 2,754 |  |   | $ | 84,329 |  |   | 2,754 |  |
| Purchased impaired loans with no subsequent deterioration                                                                                    |   | 3,108 |  |   | — |  |   | 3,235 |  |   | — |  |
| Total Reserves                                                                                                                               |   |   |   | $ | 3,138 |  |   |   |   | $ | 3,153 |  |
|                                                                                                                                         |   |   |   |   |   |   |   |   |
| Average impaired loans calculated using a simple average                                                                                     |   | 30,607 |  |   |   |   | 35,290 |  |   |   |
| * Included at March 31, 2016 and December 31, 2015 were $11.7 million and $13.1 million, respectively, in restructured and performing loans. |

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|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |  |
|                                  |   |   | Minimum Regulatory Requirement |
|                                  | CommunityOne Bancorp | CommunityOneBank | AdequatelyCapitalized | Well-Capitalized |
| Leverage capital ratio                | 8.54 | % | 9.62 | % | 4.00 | % | 5.00 | % |
| CET1 risk-based capital ratio         | 11.81 |  | 13.07 |  | 4.50 |  | 6.50 |  |
| Total Tier 1 risk-based capital ratio | 11.81 |  | 13.07 |  | 6.00 |  | 8.00 |  |
| Total risk-based capital ratio        | 13.66 |  | 13.97 |  | 8.00 |  | 10.00 |  |

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|         |                                                                                                                                                   |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| • | “Average tangible shareholders’ equity” is average shareholders’ equity reduced by average recorded goodwill, and average |

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

|         |                                                                                                                                          |
|---------|------------------------------------------------------------------------------------------------------------------------------------------|
| • | “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, other intangible assets and preferred stock |

|         |                                                                                                                                                        |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | "Core Noninterest Expense" ("Core NIE") is defined as total noninterest expense reduced by noninterest expense items which are nonrecurring in nature. |

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|         |                                                                                                                           |
|---------|---------------------------------------------------------------------------------------------------------------------------|
| • | “Core Noninterest Income "("NII") is defined as total noninterest income reduced by items which are nonrecurring in |

|         |                                                                                                                                                                                     |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | "Core net income before tax" is defined as income (loss), before income taxes, adjusted by noninterest income items and noninterest expense items which are nonrecurring in nature. |

|         |                                                                                                                       |
|---------|-----------------------------------------------------------------------------------------------------------------------|
| • | "Core income tax expense" is defined as income taxes, adjusted by tax related items which are nonrecurring in nature. |

|         |                                                                                          |
|---------|------------------------------------------------------------------------------------------|
| • | "Core net income" is defined as core net income before tax less core income tax expense. |

|         |                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------|
| • | "Core return on average assets" is defined as annualized core net income divided by total average assets |

|         |                                                                                                                 |
|---------|-----------------------------------------------------------------------------------------------------------------|
| • | "Core net income per share" is defined as core net income divided by average shares outstanding for the period. |

|                                                  |
|--------------------------------------------------|
|                                                  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands, except per share data)    |   | As of and for the Three Months ended March 31, 2016 |   | As of and for the Year ended December 31, 2015 |   | As of and for the Three Months ended March 31, 2015 |
| Total average shareholders' equity               |   | $ | 278,079 |  |   | $ | 271,821 |  |   | $ | 268,799 |  |
| Less:                                            |   |   |   |   |   |   |
| Average goodwill                                 |   | (4,205 | ) |   | (4,205 | ) |   | (4,205 | ) |
| Average core deposit and other intangibles       |   | (4,999 | ) |   | (5,327 | ) |   | (5,492 | ) |
| Average tangible shareholders' equity (non-GAAP) |   | $ | 268,875 |  |   | $ | 262,289 |  |   | $ | 259,102 |  |
|                                             |   |   |   |   |   |   |
| Total average assets                             |   | $ | 2,394,540 |  |   | $ | 2,290,090 |  |   | $ | 2,202,247 |  |
| Less:                                            |   |   |   |   |   |   |
| Average goodwill                                 |   | (4,205 | ) |   | (4,205 | ) |   | (4,205 | ) |
| Average core deposit and other intangibles       |   | (4,999 | ) |   | (5,327 | ) |   | (5,492 | ) |
| Average tangible assets (non-GAAP)               |   | $ | 2,385,336 |  |   | $ | 2,280,558 |  |   | $ | 2,192,550 |  |
|                                             |   |   |   |   |   |   |
| Total shareholders' equity                       |   | $ | 281,151 |  |   | $ | 273,038 |  |   | $ | 270,952 |  |
| Less:                                            |   |   |   |   |   |   |
| Goodwill                                         |   | (4,205 | ) |   | (4,205 | ) |   | (4,205 | ) |
| Core deposit and other intangibles               |   | (5,273 | ) |   | (5,208 | ) |   | (5,500 | ) |
| Tangible shareholders' equity (non-GAAP)         |   | $ | 271,673 |  |   | $ | 263,625 |  |   | $ | 261,247 |  |
|                                             |   |   |   |   |   |   |
| Total assets                                     |   | $ | 2,385,325 |  |   | $ | 2,397,265 |  |   | $ | 2,231,934 |  |
| Less:                                            |   |   |   |   |   |   |
| Goodwill                                         |   | (4,205 | ) |   | (4,205 | ) |   | (4,205 | ) |
| Core deposit and other intangibles               |   | (5,273 | ) |   | (5,208 | ) |   | (5,500 | ) |
| Tangible assets (non-GAAP)                       |   | $ | 2,375,847 |  |   | $ | 2,387,852 |  |   | $ | 2,222,229 |  |
|                                             |   |   |   |   |   |   |
| Book value per common share                      |   | $ | 11.57 |  |   | $ | 11.24 |  |   | $ | 11.20 |  |
| Effect of intangible assets                      |   | (0.39 | ) |   | (0.39 | ) |   | (0.40 | ) |
| Tangible book value per common share (non-GAAP)  |   | $ | 11.18 |  |   | $ | 10.85 |  |   | $ | 10.80 |  |

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|                                                                    |
|--------------------------------------------------------------------|
|                                                                    |  |  |  |  |  |  |  |  |
| (dollars in thousands)                                             |   | Three Months Ended |
|                                                               |   | March 31, 2016 |   | March 31, 2015 |
| Income before income taxes                                         |   | $ | 6,240 |  |   | $ | 3,937 |  |
| Less nonrecurring:                                                 |   |   |   |   |
|      Merger-related expense               |   | (771 | ) |   | — |  |
|      Gain on bulk sale of loans           |   | — |  |   | — |  |
|    Core net income before tax (non-GAAP)            |   | $ | 7,011 |  |   | $ | 3,937 |  |
|                                                               |   |   |   |   |
| Income tax expense                                                 |   | $ | 2,326 |  |   | $ | 1,418 |  |
| Less nonrecurring tax items and adjustments:                       |   |   |   |   |
|      Tax effect of nonrecurring items (1) |   | (253 | ) |   | — |  |
|    Core income tax expense (non-GAAP)               |   | $ | 2,579 |  |   | $ | 1,418 |  |
|    Core net income (non-GAAP)                       |   | $ | 4,432 |  |   | $ | 2,519 |  |
|                                                               |   |   |   |   |
| Return on average assets                                           |   | 0.66 | % |   | 0.46 | % |
| Effect of adjustments to arrive at core net income                 |   | 0.08 |  |   | — |  |
| Core return on average assets (non-GAAP)                           |   | 0.74 | % |   | 0.46 | % |
|                                                               |   |   |   |   |
| Net income per share - diluted                                     |   | $ | 0.16 |  |   | $ | 0.10 |  |
| Effect of adjustments to arrive at core net income                 |   | 0.02 |  |   | — |  |
| Core net income per share - diluted (non-GAAP)                     |   | $ | 0.18 |  |   | $ | 0.10 |  |

|                                                                                     |
|-------------------------------------------------------------------------------------|
|                                                                                     |  |  |  |  |  |  |  |
| (dollars in thousands)                                                              | Three Months Ended |
|                                                                                | March 31, 2016 |   | March 31, 2015 |
| Total noninterest income                                                            | $ | 6,323 |  |   | $ | 4,034 |  |
| Less nonrecurring items:                                                            |   |   |   |
|                                                                                | — |  |   | — |  |
|         Core noninterest income (non-GAAP)  | $ | 6,323 |  |   | $ | 4,034 |  |
|                                                                                |   |   |   |
| Total noninterest expense                                                           | $ | 18,401 |  |   | $ | 18,008 |  |
| Less nonrecurring items:                                                            |   |   |   |
|     Merger-related expense                                      | 771 |  |   | — |  |
|         Core noninterest expense (non-GAAP) | $ | 17,630 |  |   | $ | 18,008 |  |

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|                    |
|--------------------|
|                    |  |  |
|               |   | CommunityOne Bancorp |
|               |   | (Registrant) |
|               |   |   |
| Date:  May 6, 2016 | By: | /s/ DAVID L. NIELSEN |
|               |   | David L. Nielsen |
|               |   | Executive Vice President and |
|               |   | Chief Financial Officer |
|               |   | (Principal Financial and Accounting Officer) |

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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 |