ASHEBORO, N.C., July 29, 2010 (GLOBE NEWSWIRE) -- FNB United Corp. (Nasdaq:FNBN), the holding company for CommunityOne Bank, N.A., and its wholly owned subsidiary, Dover Mortgage Company, today reported a net loss of $25.7 million, or $(2.25) per diluted share, for the second quarter of 2010, compared to a net loss of $1.2 million, or $(0.11) per diluted share, for the second quarter a year ago. Second quarter 2010 results include a $27.4 million provision for loan losses. For the first six months of the year, following a $36.9 million provision for loan losses, FNB United reported a net loss of $30.1 million, or $(2.64) per diluted share, compared to a net loss of $7.4 million, or $(0.65) per diluted share, in the first six months of 2009.

"Our negative operating performance is attributable mainly to increased loan loss provisions, resulting from an intensified re-evaluation process directed toward our classified collateral-dependent real estate loans. In addition, an extensive third-party loan review in the second quarter resulted in some increase in classified loans, which carry higher reserves, and thus increased provisions. Our market continues to be adversely affected by the sluggish North Carolina and national economies, making it harder for some of our current loan customers to recover," said R. Larry Campbell, Interim President and CEO. "In light of market realities, we have continued to set aside significant reserves over the past several quarters, almost doubling our allowance for loan losses since June 2009," Mr. Campbell continued. He further commented, "During the past year we have been reducing our loan portfolio and building liquidity. We are also actively engaged with financial advisors to assist us in developing a capital raising plan over the coming months to stabilize our financial position."

Consent Order

The Bank signed a Consent Order with the Office of the Comptroller of the Currency on July 22, 2010, which mandates specific actions by the Bank to address certain findings from the OCC's examination and to address the Bank's current financial condition. The Consent Order contains various requirements, including a capital directive that requires the Bank to achieve and maintain minimum regulatory capital levels in excess of the statutory minimums to be well-capitalized, more controls on future extensions of credit, and the Bank's development of various programs and procedures to improve its asset quality. In anticipation of the Consent Order, the Bank has been developing a three-year strategic plan that establishes specific objectives, as outlined in the Consent Order.

The Order does not affect the Bank's FDIC coverage. The Bank's customer deposits remain fully insured by the FDIC to the maximum extent allowed by law. The standard deposit insurance amount is $250,000 per depositor for each account ownership category. In addition, the Bank participates in the FDIC's Transaction Account Guarantee program, under which the FDIC will fully guarantee until December 31, 2010, all noninterest-bearing transaction accounts, NOW accounts with interest rates of 0.25% or less and IOLTAs (lawyer trust accounts), without regard to the amount in the account. For calendar years 2011 and 2012, deposits held in noninterest-bearing transaction accounts will be fully insured, regardless of the amount in the account. 

Asset Quality and Provision for Loan Losses

Nonperforming loans increased during the quarter to $230.4 million, or 15.14% of total loans, at June 30, 2010, compared to 8.48% at June 30, 2009. Construction and development loans were 52% of nonperforming loans for the quarter. Nonperforming loans were $200.6 million at the end of the preceding quarter and $135.0 million at June 30, 2009.

Provisions for loan losses were $27.4 million for the quarter ended June 30, 2010, compared to $5.5 million in the same period in 2009, with total net charge-offs of $13.6 million in the second quarter of 2010 versus $7.3 million for the same period a year ago. For the six months ended June 30, 2010, provision for loan losses totaled $36.9 million compared to $19.6 million for the prior year period, with 2010 year-to-date net charges-offs of $16.6 million, reduced from $17.5 million in the first half of 2009. FNB United's real estate owned and repossessed loan collateral was $42.1 million at June 30, 2010, compared to $41.4 million in the previous quarter, and $10.4 million at June 30, 2009.

Nonperforming assets were $272.5 million, or 13.47% of total assets at June 30, 2010, compared to $242.1 million, or 11.91% at the end of the preceding quarter, and $145.4 million, or 6.61% a year ago. Nonperforming assets include all nonaccrual loans, all loans over 90 days delinquent and still accruing, other real estate owned, and other repossessed loan collateral. The total allowance for loan losses was $69.8 million at June 30, 2010, equal to 4.58% of loans held for investment, compared to 3.61% at March 31, 2010 and 2.31% at June 30, 2009.

Loans that were delinquent 30-89 days totaled $19.0 million, or 1.25% of total loans at June 30, 2010, compared to $30.7 million, or 1.98% of total loans at March 31, 2010, and $19.0 million, or 1.20% of total loans at June 30, 2009. The Bank had loans 90 days or more past due and still accruing, totaling $5.1 million at June 30, 2010, $4.2 million at March 31, 2010 and $2.7 million at June 30, 2009.

Net Interest Income

Second quarter 2010 net interest income before the provision for loan losses was $14.0 million, compared to $15.7 million in the preceding quarter and $15.2 million in the second quarter a year ago. FNB United's net interest margin was 3.08% for the second quarter of 2010 compared to 3.35% in the immediate prior quarter and 3.13% in the second quarter a year ago. The reduction in the net interest margin in the second quarter 2010 of 27 basis points was primarily attributable to a reduction of 44 basis points in the average yield on commercial loans due to additional loans being put on non-accrual and the related reversal of interest income. The yield on interest earning assets declined 29 basis points compared to the previous quarter while the cost of interest-bearing liabilities decreased by five basis points. For the first six months of 2010, net interest income before the provision for loan losses was $29.7 million, compared to $29.4 million in the first six months of 2009.

Noninterest Income

Total noninterest income was $5.9 million for the second quarter 2010, compared to $5.6 million in the previous quarter and $5.5 million in the second quarter a year ago. Mortgage loan income was $1.2 million, compared to $2.6 million for the same period in 2009, primarily due to a reduction of loans sold into the secondary market from $195.6 million in the second quarter of 2009 to $107.1 million during the second quarter of 2010. The second quarter of 2009 incurred a $1.0 million OTTI charge on an investment security. Noninterest income was $11.6 million for the first half of 2010 compared to $11.1 million in the first half of 2009.

Noninterest Expense

Total noninterest expense was $20.3 million in the second quarter of 2010, compared to $14.8 million in the preceding quarter and $16.4 million in the second quarter a year ago. The increase in the second quarter 2010 versus the first quarter 2010 of $5.5 million is primarily due to an increase in expenses related to other real estate owned of $4.1 million. The second quarter of 2009 included a $1.0 million FDIC special assessment. Compensation and benefit expense for the second quarter 2010 was $762,000 lower than the same period a year ago due in part to the decrease in the number of full-time equivalent employees from an average of 525 in the second quarter 2009 to 512 in the second quarter 2010 and a reduction of the company contribution toward retirement plans.

For the first half of 2010, total noninterest expense increased to $35.1 million, compared to $32.0 million in the first half of 2009. Net of the increase in other real estate owned expenses, expenses declined $1.7 million, or 5.3%.

Loans Held for Investment

Loans held for investment were $1.52 billion at quarter-end 2010, compared to $1.59 billion a year earlier. Home equity loans increased $17.9 million, commercial loans decreased $123.1 million and residential loans were up $21.7 million at June 30, 2010, compared to a year ago. Assets decreased 8.0% to $2.02 billion at June 30, 2010, compared to $2.20 billion a year earlier.

Deposits

Total deposits increased 5.1% to $1.72 billion at June 30, 2010, compared to $1.64 billion twelve months earlier. Certificates of deposit increased 4.0% to $972 million, from $935 million a year ago while other deposits increased 6.6% to $752 million at quarter-end, compared to $705 million a year earlier. 

Brokered certificates of deposits were $111.6 million at June 30, 2010, which was 6.5% of total deposits. As a result of the Consent Order described above, the Bank can no longer renew, roll-over or increase the amount of brokered deposits above the amount outstanding at the date of the Consent Order without obtaining a waiver from the OCC. The Bank can apply for a waiver of this rule, but such a waiver may or may not be granted.  

Capital Levels and Shareholders' Equity

Shareholders' equity was $72.5 million at June 30, 2010, compared to $192.7 million a year earlier. Shareholders' equity includes the receipt of $51.5 million as a participant in the U.S. Treasury Department's Capital Purchase Program. Book value per common share was $1.76 at quarter-end 2010 compared to $12.33 a year earlier, and tangible book value per common share was $1.36 at quarter-end 2010, compared to $7.28 a year earlier. At June 30, 2010, the Bank is adequately capitalized.

About the Company

FNB United Corp. is the Asheboro, North Carolina based bank holding company for CommunityOne Bank, N.A., and the bank's subsidiary, Dover Mortgage Company. Opened in 1907, CommunityOne Bank (MyYesBank.com) operates 45 offices in 38 communities throughout central, southern and western North Carolina. Through these subsidiaries, FNB United offers a complete line of consumer, mortgage and business banking services, including loan, deposit, cash management, wealth management and internet banking services.

This news release may contain forward-looking statements regarding future events.  Forward-looking statements often address our expected future business and financial performance, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," or "will." These statements are only predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially. These risks and uncertainties include risks of managing our growth, changes in financial markets, changes in real estate markets, regulatory changes, changes in interest rates, changes in economic conditions being less favorable than anticipated, and loss of deposits and loan demand to other financial institutions. Additional information concerning factors that could cause actual results to be materially different from those in the forward-looking statements is contained in FNB United's filings with the Securities and Exchange Commission. FNB United does not assume any obligation to update these forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements. 
RESULTS OF OPERATIONS (Unaudited)            
(In thousands except share and per share data)            
  Quarter Ended Percent Change From
  June 30, 2010 March 31, 2010 December 31, 2009 June 30, 2009 March 31, 2010 June 30, 2009
Interest Income            
Interest and fees on loans  $ 18,137  $ 19,405  $ 20,157  $ 21,264 -6.5% -14.7%
Interest and dividends on investments securities:            
 Taxable income  3,120  3,825  4,392  4,108 -18.4% -24.1%
Non-taxable income  395  435  500  594 -9.2% -33.5%
Other interest income  107  86  117  87 24.4% 23.0%
Total interest income  21,759  23,751  25,166  26,053 -8.4% -16.5%
Interest Expense            
Deposits  6,215  6,402  7,042  8,605 -2.9% -27.8%
Borrowed funds  1,534  1,648  1,831  2,202 -6.9% -30.3%
Total interest expense  7,749  8,050  8,873  10,807 -3.7% -28.3%
Net Interest Income before Provision for Loan Losses  14,010  15,701  16,293  15,246 -10.8% -8.1%
Provision for loan losses  27,429  9,490  24,682  5,525 189.0% 396.5%
Net Interest (Loss)/Income After Provision for Loan Losses  (13,419)  6,211  (8,389)  9,721 -316.1% -238.0%
Noninterest Income            
Service charges on deposit accounts  1,981  1,938  2,316  2,173 2.2% -8.8%
Mortgage loan income  1,207  1,184  1,185  2,631 1.9% -54.1%
Cardholder and merchant services income  791  680  660  642 16.3% 23.2%
Trust and investment services  518  479  500  440 8.1% 17.7%
Bank-owned life insurance  257  241  236  241 6.6% 6.6%
Other service charges, commissions and fees  236  360  265  299 -34.4% -21.1%
Security gains/(losses)  828  669  372  4 23.8% NM
Fair value swap gains  49  45  66  -- 8.9% N/A
Total other-than-temporary impairment loss  --  --  --  (4,367) N/A -100.0%
Portion of loss recognized in other comprehensive income  --  --  --  3,367 N/A -100.0%
Net impairment loss recognized in earnings  --  --  --  (1,000) N/A -100.0%
Other income  70  30  125  60 133.3% 16.7%
Total noninterest income  5,937  5,626  5,725  5,490 5.5% 8.1%
Noninterest Expense            
Personnel expense  7,691  7,762  7,783  8,453 -0.9% -9.0%
Net occupancy expense  1,238  1,301  1,349  1,286 -4.8% -3.7%
Furniture, equipment and data processing expense  1,761  1,769  1,796  1,720 -0.5% 2.4%
Professional fees  810  586  350  473 38.2% 71.2%
Stationery, printing and supplies  141  118  166  156 19.5% -9.6%
Advertising and marketing  387  483  519  469 -19.9% -17.5%
Other real estate owned  4,615  471  1,440  187 879.8% NM
Credit/debit card expense  447  462  416  416 -3.2% 7.5%
FDIC assessment  812  721  730  1,560 12.6% -47.9%
Other expense  2,369  1,155  1,819  1,636 105.1% 44.8%
Total noninterest expense  20,271  14,828  16,368  16,356 36.7% 23.9%
Loss Before Income Taxes  (27,753)  (2,991)  (19,032)  (1,145) 827.9% NM
Income taxes (benefit)/expense  (2,828)  586  9,000  (742) -582.6% 281.1%
Net Loss  (24,925)  (3,577)  (28,032)  (403) 596.8% NM
Preferred stock dividends  (822)  (819)  (818)  (809) 0.4% 1.6%
Net Loss to Common Shareholders  $ (25,747)  $ (4,396)  $ (28,850)  $ (1,212) 485.7% NM
             
Loss per common share:            
Basic  $ (2.25)  $ (0.38)  $ (2.53)  $ (0.11) 485.7% NM
Diluted  $ (2.25)  $ (0.38)  $ (2.53)  $ (0.11) 485.7% NM
Cash dividends declared per common share  $ --  $ --  $ --  $ 0.025 N/A -100.0%
Weighted average shares outstanding:            
Basic 11,424,435 11,424,159 11,423,058 11,413,735    
Diluted 11,424,435 11,424,159 11,423,058 11,413,735    
             
NM = Not Meaningful            
             
   
RESULTS OF OPERATIONS (Unaudited)  
(In thousands except share and per share data)  
  Year-to-Date Percent
  June 30, 2010 June 30, 2009 Change
Interest Income      
Interest and fees on loans  $ 37,542  $ 42,863 -12.4%
Interest and dividends on investments securities:      
Taxable income  6,945  7,175 -3.2%
Non-taxable income  830  1,194 -30.5%
Other interest income  193  167 15.6%
Total interest income  45,510  51,399 -11.5%
Interest Expense      
Deposits  12,617  17,479 -27.8%
Borrowed funds  3,183  4,542 -29.9%
Total interest expense  15,800  22,021 -28.3%
Net Interest Income Before Provision for Loan Losses  29,710  29,378 1.1%
Provision for loan losses  36,919  19,584 88.5%
Net Interest (Loss)/Income After Provision for Loan Losses  (7,209)  9,794 -173.6%
Noninterest Income      
Service charges on deposit accounts  3,919  4,306 -9.0%
Mortgage loan income  2,391  4,547 -47.4%
Cardholder and merchant services income  1,470  1,204 22.1%
Trust and investment services  996  781 27.5%
Bank owned life insurance  498  470 6.0%
Other service charges, commissions and fees  596  586 1.7%
Security gains/(losses)  1,497  (2) N/M
Fair value swap gains  95  -- N/A
Total other than temporary impairment loss  --  (4,367) -100.0%
Portion of loss recognized in other comprehensive income  --  (3,367) -100.0%
Net impairment loss recognized in earnings  --  (1,000) -100.0%
Other income  99  241 -58.9%
Total noninterest income  11,561  11,133 3.8%
Noninterest Expense      
Personnel expense  15,453  16,917 -8.7%
Net occupancy expense  2,538  2,808 -9.6%
Furniture, equipment and data processing expense  3,531  3,482 1.4%
Professional fees  1,396  1,233 13.2%
Stationery, printing and supplies  259  338 -23.4%
Advertising and marketing  869  1,056 -17.7%
Other real estate owned  5,086  245 NM
Credit/debit card expense  909  813 11.8%
FDIC assessment  1,534  1,863 -17.7%
Other expense  3,521  3,208 9.8%
Total noninterest expense  35,096  31,963 9.8%
Loss Before Income Taxes  (30,744)  (11,036) 178.6%
Income taxes benefit  (2,242)  (4,866) -53.9%
Net Loss  (28,502)  (6,170) 361.9%
Preferred stock dividends  (1,641)  (1,240) 32.3%
Net Loss to Common Shareholders  $ (30,143)  $ (7,410) 306.8%
       
Loss per common share:      
Basic  $ (2.64)  $ (0.65) 306.3%
Diluted  $ (2.64)  $ (0.65) 306.3%
       
Cash dividends declared per common share  $ --  $ 0.05 -100.0%
       
Weighted average shares outstanding:      
Basic  11,424,298  11,411,909  
Diluted  11,424,298  11,411,909  
       
NM = Not Meaningful      
       
FINANCIAL CONDITION (Unaudited)        
(In thousands except share and per share data)          
  As of Percent Change From
  June 30, 2010 March 31, 2010 December 31, 2009 June 30, 2009 March 31, 2010 June 30, 2009
ASSETS            
Cash and due from banks  $ 73,535  $ 49,346  $ 27,600  $ 26,675 49.0% 175.7%
Interest-bearing bank balances  5,024  351  98  56 NM NM
Federal funds sold  --  --  --  42 N/A -100.0%
Securities available-for-sale  280,120  183,192  237,630  254,826 52.9% 9.9%
Securities held-to-maturity  --  84,853  88,559  100,475 -100.0% -100.0%
Loans held for sale  31,559  42,956  58,219  65,084 -26.5% -51.5%
Loans held for investment  1,521,965  1,548,405  1,563,021  1,591,686 -1.7% -4.4%
Less: Allowance for loan losses  (69,760)  (55,895)  (49,461)  (36,844) 24.8% 89.3%
Net loans held for investment  1,452,205  1,492,510  1,513,560  1,554,842 -2.7% -6.6%
Premises and equipment, net  46,858  47,490  48,115  49,430 -1.3% -5.2%
Other real estate owned  42,002  41,359  35,170  10,264 1.6% 309.2%
Goodwill   --  --  --  52,395 N/A -100.0%
Core deposit premiums  4,570  4,769  4,968  5,365 -4.2% -14.8%
Bank-owned life insurance  31,432  31,146  30,883  30,423 0.9% 3.3%
Other assets  55,152  54,572  56,494  49,049 1.1% 12.4%
Total Assets  $ 2,022,457  $ 2,032,544  $ 2,101,296  $ 2,198,926 -0.5% -8.0%
LIABILITIES            
Deposits:            
Noninterest-bearing demand deposits  $ 158,949  $ 156,780  $ 152,522  $ 155,223 1.4% 2.4%
Interest-bearing deposits:            
Demand, savings, and money market deposits  592,614  612,219  594,377  549,630 -3.2% 7.8%
Time deposits of $100,000 or more  484,734  422,023  425,858  395,490 14.9% 22.6%
Other time deposits  487,463  492,259  549,371  539,412 -1.0% -9.6%
Total deposits  1,723,760  1,683,281  1,722,128  1,639,755 2.4% 5.1%
Retail repurchase agreements  16,424  13,907  13,592  17,460 18.1% -5.9%
Federal Home Loan Bank advances  119,573  151,785  166,165  184,445 -21.2% -35.2%
Federal funds purchased  --  --  10,000  80,000 N/A -100.0%
Subordinated debt  15,000  15,000  15,000  15,000 0.0% 0.0%
Junior subordinated debentures  56,702  56,702  56,702  56,702 0.0% 0.0%
Other liabilities  18,464  17,769  19,350  12,837 3.9% 43.8%
Total liabilities  1,949,923  1,938,444  2,002,937  2,006,199 0.6% -2.8%
SHAREHOLDERS' EQUITY            
Series A preferred stock  48,558  48,380  48,205  47,864 0.4% 1.4%
Common stock warrants  3,891  3,891  3,891  3,891 0.0% 0.0%
Common stock  28,561  28,566  28,566  28,573 0.0% 0.0%
Surplus  115,057  115,059  115,039  115,043 0.0% 0.0%
Retained earnings/(accumulated deficit)  (126,376)  (101,330)  (96,234)  920 24.7% NM
Accumulated other comprehensive income/(loss )  2,843  (466)  (1,108)  (3,564) -710.1% -179.8%
Total shareholders' equity  72,534  94,100  98,359  192,727 -22.9% -62.4%
Total Liabilities and Shareholders' Equity  $ 2,022,457  $ 2,032,544  $ 2,101,296  $ 2,198,926 -0.5% -8.0%
Shares outstanding at end of period  11,424,390  11,426,413  11,426,413  11,429,203 0.0% 0.0%
Book value per common share (1)  $ 1.76  $ 3.66  $ 4.05  $ 12.33 -52.0% -85.7%
Tangible book value per common share (1)(2)  $ 1.36  $ 3.24  $ 3.61  $ 7.28 -58.1% -81.3%
             
NM = Not Meaningful            
             
(1) - Calculation is based on number of shares outstanding at the end of the period rather than weighted average shares outstanding and does not include preferred stock or stock warrants.
(2) - Calculation excludes goodwill and core deposit premiums.  
         
ADDITIONAL FINANCIAL INFORMATION        
(Dollars in thousands)        
(Rates / Ratios Annualized)        
  For the Quarters Ended
OPERATING PERFORMANCE: June 30, 2010 March 10, 2010 December 31, 2009 June 30, 2009
Average securities  $ 266,316  $ 309,766  $ 348,158  $ 341,381
Average loans held for sale  37,873  40,988  53,308  53,955
Average loans  1,538,220  1,555,865  1,572,025  1,585,440
Average other interest-earning assets  18,613  26,096  27,180  18,903
Average noninterest-earning assets  182,105  142,969  136,870  169,847
Total average assets  $ 2,043,127  $ 2,075,684  $ 2,137,541  $ 2,169,526
         
Average interest-bearing deposits  $ 1,534,462  $ 1,554,539  $ 1,574,068  $ 1,470,461
Average noninterest bearing deposits  161,138  155,337  152,977  154,327
Average borrowings  234,865  250,274  275,625  339,948
Average noninterest-earning liabilities  16,765  16,792  7,556  11,809
Total average liabilities  1,947,230  1,976,942  2,010,226  1,976,545
Total average shareholders' equity  95,897  98,742  127,315  192,981
Total average liabilities and shareholders' equity  $ 2,043,127  $ 2,075,684  $ 2,137,541  $ 2,169,526
         
Interest rate yield on loans 4.63% 4.93% 4.93% 5.21%
Interest rate yield on securities 5.61% 5.88% 5.88% 5.90%
Interest rate yield on interest-earning assets 4.75% 5.04% 5.05% 5.30%
         
Interest rate expense on deposits 1.62% 1.67% 1.77% 2.35%
Interest rate expense on borrowings 2.62% 2.67% 2.64% 2.60%
Interest rate expense on interest-bearing liabilities 1.76% 1.81% 1.90% 2.39%
         
Interest rate spread 2.99% 3.23% 3.15% 2.90%
         
Net interest margin 3.08% 3.35% 3.29% 3.13%
         
Other operating income / Average assets 1.17% 1.10% 1.06% 1.01%
Other operating expense / Average assets 3.98% 2.90% 3.04% 3.02%
Efficiency ratio (other operating expense / revenue before provision) 101.62% 69.53% 74.34% 78.88%
Return on average assets (4.89%) (0.70%) (5.20%) (0.07%)
Return on average equity (104.25%) (14.69%) (87.35%) (0.84%)
Average equity / Average assets 4.69% 4.76% 5.96% 8.90%
         
Tier 1 leverage 4.03%* 5.62% 5.68% 8.60%
Tier 1 risk-based capital 4.96%* 6.90% 6.86% 9.75%
Total risk-based capital 9.13%* 10.53% 10.29% 12.18%
         
* Estimate        
         
ADDITIONAL FINANCIAL INFORMATION            
(Dollars in thousands)            
  As of / For the Quarters Ended As of / For the Six Months Ended
NONPERFORMING ASSETS June 30, 2010 March 31, 2010 December 31, 2009 June 30, 2009 June 30, 2010 June 30, 2009
Loans on nonaccrual status  $ 225,279  $ 196,405  $ 167,507  $ 132,313  $ 225,279  $ 132,313
Loans more than 90 days delinquent, still on accrual  5,140  4,236  7,085  2,705  5,140  2,705
Total nonperforming loans  230,419  200,641  174,592  135,018  230,419  135,018
Real estate owned (OREO)/Repossessed assets  42,103  41,438  35,238  10,374  42,103  10,374
Total nonperforming assets  $ 272,522  $ 242,079  $ 209,830  $ 145,392  $ 272,522  $ 145,392
Total nonperforming assets/Total assets 13.47% 11.91% 9.99% 6.61% 13.47% 6.61%
             
             
CHANGE IN THE ALLOWANCE FOR LOAN LOSSES June 30, 2010 March 31, 2010 December 31, 2009 June 30, 2009 June 30, 2010 June 30, 2009
Balance, beginning of period   $ 55,895  $ 49,461  $ 42,349  $ 38,573  $ 49,461  $ 34,720
Provision  27,429  9,490  24,657  5,525  36,919  19,584
Recoveries of loans previously charged off  503  451  414  372  954  978
Loans charged-off  (14,067)  (3,507)  (17,959)  (7,626)  (17,574)  (18,438)
Net (charge-offs)/recoveries  (13,564)  (3,056)  (17,545)  (7,254)  (16,620)  (17,460)
Balance, end of period   $ 69,760  $ 55,895  $ 49,461  $ 36,844  $ 69,760  $ 36,844
Net chargeoffs/Average loans outstanding (annualized) 3.54% 0.80% 2.97% 1.83% 2.17% 1.10%
Allowance for loan losses/Loans held for investment 4.58% 3.61% 3.16% 2.31% 4.58% 2.31%
             
             
DEPOSITS June 30, 2010 March 31, 2010 December 31, 2009 June 30, 2009 June 30, 2010 June 30, 2009
Noninterest-bearing  $ 158,949  $ 156,780  $ 152,522  $ 155,223  $ 158,949  $ 155,223
Interest-bearing transaction deposits:            
Checking  229,067  232,835  226,696  199,044  229,067  199,044
Money Market  319,777  335,602  326,958  310,036  319,777  310,036
Savings  43,770  43,782  40,723  40,550  43,770  40,550
Total interest-bearing transaction deposits  592,614  612,219  594,377  549,630  592,614  549,630
Interest-bearing time deposits  972,197  914,282  975,229  934,902  972,197  934,902
Total deposits  $ 1,723,760  $ 1,683,281  $ 1,722,128  $ 1,639,755  $ 1,723,760  $ 1,639,755
CONTACT:  FNB United Corp.          Mark Severson, CFO          336.626.8351

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