CommunityOne Bancorp 8-K FNB United Corp. Announces Second Quarter Results

Exhibit 99.1

FNB United Corp. Announces Second Quarter Results

ASHEBORO, N.C.--(BUSINESS WIRE)--July 23, 2009--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 $1.2 million, or $(0.11) per diluted share, for the second quarter of 2009, compared to net income of $140,000, or $0.01 per diluted share, for the second quarter a year ago. Second quarter 2009 results include a $5.5 million provision for loan losses. For the first six months of the year, following a $19.6 million provision for loan losses, it reported a net loss of $7.4 million, or $(0.65) per diluted share, compared to net income of $2.5 million, or $0.22 per diluted share, in the first six months of 2008.

“Our year-to-date results have been negatively affected by the reserves set aside and loans written down due to diminished loan quality, an other than temporary impairment (OTTI) on an investment security of $1.0 million and an FDIC assessment exceeding $1.0 million. The decline related to loan quality is a result of the sluggish housing economy as well as our continued aggressive policy on loan re-evaluations focused on the value of collateral and the level and pace of sales,” said Michael C. Miller, President and CEO. “We’ve set aside significant reserves for the last four quarters, doubling our allowance for loan losses, and remain ‘well capitalized’ under all regulatory requirements. Although we anticipate provision for loan losses may continue to be elevated during the second half of 2009, it is expected that it will be at lower levels than provisions recognized over the last three quarters. We are encouraged about the future, as we believe our operating results will be sufficient to sustain us through these difficult economic times. We have the capital and the liquidity to carry us forward.”

Credit Quality

Nonperforming loans increased during the quarter to $135.0 million, or 8.48 % of total loans, at June 30, 2009, compared to 7.50% three months earlier. Construction and development loans were 68% of nonperforming loans for the quarter. Nonperforming loans were $118.8 million at the end of the preceding quarter and $12.6 million at June 30, 2008.

“The housing market remains weak and continues to present challenges,” said Miller. “We continue to build our allowance for loan losses, with a provision expense of $5.5 million during the second quarter, and year-to-date provision expense of $19.6 million compared to net charge-offs of $17.5 million.” Net charge-offs during the second quarter were $7.3 million. Net charge-offs were $10.2 million in the previous quarter and $753,000 in the second quarter a year ago. FNB United’s real estate owned and repossessed loan collateral was $10.4 million at quarter-end, compared to $9.2 million in the previous quarter, and $5.8 million at June 30, 2008.

Nonperforming assets were $145.4 million, or 6.6 % of total assets at June 30, 2009, compared to $128.0 million, or 5.94% at the end of the preceding quarter, and $18.4 million, or .90% a year ago. Nonperforming assets include all nonperforming 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 $36.8 million at quarter-end, equal to 2.31% of total loans, compared to 2.44% at March 31, 2009 and 1.20% at June 30, 2008.

Loans delinquent 30-89 days and still accruing totaled $19.1 million, or 1.21% of total loans at June 30, 2009, compared to $29.1 million, or 1.84% of total loans at March 31, 2009, and $3.4 million, or 0.21 % of total loans at June 30, 2008. The bank had loans that were 90 days or more past due and still accruing, totaling $2.7 million at June 30, 2009.

FNB United has not originated any subprime real estate loans and has no subprime mortgage-backed securities or Fannie Mae/Freddie Mac common or preferred securities exposure in its investment portfolio.

In the second quarter, an OTTI charge of $1.0 million was taken on an investment security due to credit impairment. The charge was recorded through earnings and is presented in accordance with new accounting guidance issued by the Financial Accounting Standards Board.

Balance Sheet

“Our loan mix has become heavier in residential construction and development, partially as a result of the decline of the manufacturing base, which used to be our ‘bread and butter,’ as well as our expansion into faster growing and actively developing communities,” said Miller. “Housing sales slowed markedly beginning last year and solid projects have stalled as consumers await a return of confidence. Although we don’t know how long this period will last or the extent of any further decline, we expect sales to pick back up when the economic recovery begins. We are pleased to note that the rate of decline has slowed measurably.”

Loans held for investment were $1.59 billion at quarter-end, compared to $1.58 billion a year earlier. Home equity loans increased $29.2 million, commercial loans decreased $24.5 million and residential loans were up $6.0 million at June 30, 2009, compared to a year ago. The loan portfolio remains well diversified with a wide variety of borrowers and collateral. Assets increased 7.1% to $2.20 billion at June 30, 2009, compared to $2.05 billion a year earlier.

“Deposit growth remained strong again this quarter and capped the strongest core deposit surge in recent memory,” said Miller. “We attribute this growth in part to opening of three new community offices in excellent markets, the excellent customer service provided by our staff, and also as a result of a customer flight from some of the larger institutions in our marketplace to FNB United.” Total deposits increased 10.4% to $1.64 billion at June 30, 2009, compared to $1.49 billion twelve months earlier. Certificates of deposit increased 15.9% to $935 million, from $807 million a year ago while other deposits increased 4.0% to $705 million at quarter-end, compared to $678 million a year earlier. Brokered certificates of deposits were $98 million at June 30, 2009, which was 6.0% of total deposits.

Shareholders’ equity was $193 million at June 30, 2009, compared to $215 million a year earlier, and represents the write down of goodwill of $57.8 million in 2008 and the receipt of $51.5 million as a participant in the U.S. Treasury Department’s Capital Purchase Program as noted below.

Capital Measures

FNB United remains well capitalized for regulatory purposes at June 30, 2009. Book value per share was $12.33 at quarter-end compared to $18.81 a year earlier, and tangible book value per share was $7.28 at quarter-end, compared to $8.78 a year earlier.

On February 13, 2009, FNB United received $51.5 million as a participant in the U.S. Treasury Department's Capital Purchase Program (CPP). The Company issued 51,500 shares of senior preferred stock and a related warrant for 2,207,143 shares of FNB United common stock to the U.S. Treasury. Through June 30, 2009, FNB United has generated $143.4 million in consumer loans and $71.7 million in commercial loans from the date of the issuance of the preferred stock.

Net Interest Margin

FNB United’s net interest margin was 3.10% for the second quarter of 2009 compared to 3.03% in the immediate prior quarter and 3.30% in the second quarter a year ago. “Our net interest margin increased compared to the previous quarter, primarily due to the reduction in funding costs,” said Miller. The yield on interest earning assets declined ten basis points compared to the previous quarter and the cost of interest-bearing liabilities decreased by 17 basis points.

Income Statement

Second quarter net interest income before the provision for loan losses was $15.2 million, compared to $14.1 million in the preceding quarter and $14.6 million in the second quarter a year ago. Total noninterest income was $5.5 million for the quarter, compared to $5.6 million in the previous quarter and $5.1 million in the second quarter a year ago. Gains on the sale of mortgage loans was $2.2 million, compared to $796,000 for the same period in 2008. The second quarter 2009 decline in noninterest income from the previous quarter was due to a $1.0 million OTTI charge on an investment security during the second quarter of 2009.

Total noninterest expense was $16.4 million in the second quarter of 2009, compared to $15.6 million in the preceding quarter and $17.3 million in the second quarter a year ago. Although expenses were little changed from the prior year’s second quarter, a significant variance included the $1.0 million FDIC special assessment during the second quarter of 2009. Compensation and benefit expense for the second quarter 2009 was $944,000 lower than the same period a year ago due in part to the decrease in the number of full-time employees. The Company has frozen wages for all employees during 2009 and reduced the company contribution toward retirement plans. Full-time equivalent employees averaged 525 employees for the second quarter 2009 versus 545 employees for the second quarter of 2008.

For the first six months of 2009, net interest income before the provision for loan losses was $29.4 million, compared to $30.0 million in the first six months of 2008. Noninterest income was $11.1 million for the first half of 2009 compared to $10.1 million in the first half of 2008. For the first half of the year, total noninterest expense improved to $32.0 million, compared to $32.9 million in the first half of 2009. The expense improvement occurred despite the $1.0 million FDIC special assessment during the second quarter of 2009.

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
(In thousands except share and per share data)	Quarter Ended											Percent Change
	June 30, 2009			March 31, 2009			December 31, 2008			June 30, 2008		March 31, 2009		June 30, 2008
INTEREST INCOME:
Interest and fees on loans	$	21,264		$	21,599		$	23,584		$	25,548	-1.6	%	-16.8	%
Interest and dividends on investments securities:
Taxable income		4,108			3,067			2,434			1,699	33.9	%	141.8	%
Non-taxable income		594			600			539			503	-1.0	%	18.1	%
Other interest income		87			80			87			265	8.7	%	-67.2	%
Total interest income		26,053			25,346			26,644			28,015	2.8	%	-7.0	%
INTEREST EXPENSE:
Deposits		8,605			8,874			9,632			10,622	-3.03	%	-18.99	%
Borrowed funds		2,202			2,340			2,975			2,754	-5.90	%	-20.04	%
Total interest expense		10,807			11,214			12,607			13,376	-3.63	%	-19.21	%
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES		15,246			14,132			14,037			14,639	7.88	%	4.15	%
Provision for loan losses		5,500			14,059			15,492			1,383	-60.88	%	297.69	%
NET INTEREST INCOME/(LOSS) AFTER PROVISION FOR LOAN LOSSES		9,746			73			(1,455	)		13,256	13250.68	%	-26.48	%
NONINTEREST INCOME:
Service charges on deposit accounts		2,232			2,074			2,539			2,174	7.62	%	2.67	%
Mortgage loan income		2,608			1,920			2,430			1,312	35.83	%	98.78	%
Cardholder and merchant services income		582			622			600			603	-6.43	%	-3.48	%
Trust and investment services		440			341			438			468	29.03	%	-5.98	%
Bank owned life insurance		242			228			255			236	6.14	%	2.54	%
Other service charges, commissions and fees		296			285			273			155	3.86	%	90.97	%
Security gains (losses)		4			(6	)		647			6	-166.67	%	-33.33	%
Total other-than-temporary impairment loss		(4,367	)		-			-			-	N/A		N/A
Portion of loss recognized in other comprehensive income		3,367			-			-			-	N/A		N/A
Net impairment loss recognized in earnings		(1,000	)		-			-			-	N/A		N/A
Other income		86			179			49			99	-51.96	%	-13.13	%
Total noninterest income		5,490			5,643			7,231			5,053	-2.71	%	8.65	%
NONINTEREST EXPENSE:
Personnel expense		8,100			8,167			6,750			9,044	-0.82	%	-10.44	%
Net occupancy expense		1,286			1,522			1,331			1,353	-15.51	%	-4.95	%
FF&E and data processing expenses		1,690			1,791			1,764			1,681	-5.64	%	0.54	%
Goodwill impairment		-			-			56,000			1,800	N/A		-100.00	%
Other expense		5,305			4,127			3,973			3,442	28.54	%	54.13	%
Total noninterest expense		16,381			15,607			69,818			17,320	4.96	%	-5.42	%
(LOSS)/INCOME BEFORE INCOME TAXES		(1,145	)		(9,891	)		(64,042	)		989	-88.42	%	-215.77	%
Income taxes (benefit)/expense		(742	)		(4,124	)		(3,481	)		849	-82.01	%	-187.40	%
NET (LOSS)/INCOME		(403	)		(5,767	)		(60,561	)		140	-93.01	%	-387.86	%
Preferred stock dividends		(809	)		(431	)		-			-	87.70	%	N/A
NET (LOSS)/INCOME TO COMMON SHAREHOLDERS'	$	(1,212	)	$	(6,198	)	$	(60,561	)	$	140	-80.45	%	-965.71	%
Earnings per common share:
Basic	$	(0.11	)	$	(0.54	)	$	(5.31	)	$	0.01	-80.45	%	-963.67	%
Diluted	$	(0.11	)	$	(0.54	)	$	(5.31	)	$	0.01	-80.45	%	-963.67	%
Cash dividends declared per common share	$	0.025		$	0.025		$	0.10		$	0.15	0.00	%	-83.33	%
Weighted average shares outstanding:
Basic		11,413,735			11,410,063			11,406,361			11,386,767
Diluted		11,413,735			11,410,063			11,406,361			11,386,767

RESULTS OF OPERATIONS
(In thousands except share and per share data)	Year-to-Date					Percent
	June 30, 2009			June 30, 2008		Change
INTEREST INCOME:
Interest and fees on loans	$	42,863		$	53,029	-19.2	%
Interest and dividends on investments securities:
Taxable income		7,175			3,591	99.8	%
Non-taxable income		1,194			1,030	15.9	%
Other interest income		167			519	-67.8	%
Total interest income		51,399			58,169	-11.6	%
INTEREST EXPENSE:
Deposits		17,479			22,428	-22.1	%
Borrowed funds		4,542			5,727	-20.7	%
Total interest expense		22,021			28,155	-21.8	%
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES		29,378			30,014	-2.1	%
Provision for loan losses		19,559			2,897	575.1	%
NET INTEREST INCOME/(LOSS) AFTER PROVISION FOR LOAN LOSSES		9,819			27,117	-63.8	%
NONINTEREST INCOME:
Service charges on deposit accounts		4,306			4,291	0.3	%
Mortgage loan income		4,528			2,677	69.1	%
Cardholder and merchant services income		1,204			1,066	12.9	%
Trust and investment services		781			931	-16.1	%
Bank owned life insurance		470			486	-3.3	%
Other service charges, commissions and fees		581			387	50.1	%
Security gains (losses)		(2	)		6	-133.3	%
Total other than temporary impairment loss		(4,367	)		-	N/A
Portion of loss recognized in other comprehensive income		3,367			-	N/A
Net impairment loss recognized in earnings		(1,000	)		-	N/A
Other income		265			292	-9.2	%
Total noninterest income		11,133			10,136	9.8	%
NONINTEREST EXPENSE:
Personnel expense		16,267			17,898	-9.1	%
Net occupancy expense		2,808			2,659	5.6	%
FF&E and data processing expenses		3,481			3,392	2.6	%
Goodwill impairment		-			1,800	-100.0	%
Other expense		9,432			7,106	32.7	%
Total noninterest expense		31,988			32,855	-2.6	%
(LOSS)/INCOME BEFORE INCOME TAXES		(11,036	)		4,398	-350.9	%
Income taxes (benefit)/expense		(4,866	)		1,933	-351.7	%
NET (LOSS)/INCOME		(6,170	)		2,465	-350.3	%
Preferred stock dividends		(1,240	)		-	N/A
NET (LOSS)/INCOME TO COMMON SHAREHOLDERS'	$	(7,410	)	$	2,465	-400.6	%
Earnings per common share:
Basic	$	(0.65	)	$	0.22	-400.5	%
Diluted	$	(0.65	)	$	0.22	-400.6	%
Cash dividends declared per common share	$	0.025		$	0.15	-83.3	%
Weighted average shares outstanding:
Basic		11,411,909			11,409,630
Diluted		11,411,909			11,411,569

FINANCIAL CONDITION
(In thousands except share and per share data)	As of												Percent Change From
	June 30, 2009			March 31, 2009			December 31, 2008			June 30, 2008			March 31, 2009		June 30, 2008
ASSETS
Cash and due from banks	$	26,675		$	28,608		$	28,743		$	35,627		-6.8	%	-25.1	%
Interest-bearing bank balances		56			5,390			404			210		-99.0	%	-73.3	%
Federal funds sold		42			235			206			500		-82.1	%	-91.6	%
Securities available-for-sale		254,826			263,108			205,426			168,040		-3.1	%	51.6	%
Securities held-to-maturity		100,475			64,989			27,794			25,360		54.6	%	296.2	%
Loans held for sale		65,084			48,948			36,138			19,736		33.0	%	229.8	%
Loans held for investment		1,591,686			1,583,574			1,585,195			1,575,044		0.5	%	1.1	%
Less: Allowance for loan losses		(36,844	)		(38,573	)		(34,720	)		(18,845	)	-4.5	%	95.5	%
Net loans held for investment		1,554,842			1,545,001			1,550,475			1,556,199		0.6	%	-0.1	%
Property and equipment, net		49,430			50,112			50,947			49,926		-1.4	%	-1.0	%
Goodwill		52,395			52,395			52,395			108,395		0.0	%	-51.7	%
Core deposit premiums		5,365			5,564			5,762			6,161		-3.6	%	-12.9	%
Other assets		90,416			89,676			86,144			83,555		0.8	%	8.2	%
Total Assets	$	2,199,606		$	2,154,026		$	2,044,434		$	2,053,709		2.1	%	7.1	%
LIABILITIES
Deposits:
Noninterest-bearing demand deposits	$	155,223		$	143,146		$	150,273		$	163,648		8.4	%	-5.1	%
Interest-bearing deposits:
Demand, savings, and money market deposits		549,630			539,171			479,223			514,392		1.9	%	6.9	%
Time deposits of $100,000 or more		295,490			399,774			407,539			383,583		-26.1	%	-23.0	%
Other time deposits		639,412			524,605			477,712			423,488		21.9	%	51.0	%
Total deposits		1,639,755			1,606,696			1,514,747			1,485,111		2.1	%	10.4	%
Retail repurchase agreements		17,460			22,572			18,145			32,297		-22.6	%	-45.9	%
Federal Home Loan Bank advances		184,445			172,928			238,910			202,418		6.7	%	-8.9	%
Federal funds purchased		80,000			75,000			37,000			28,000		6.7	%	185.7	%
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		13,517			12,358			16,013			19,299		9.4	%	-30.0	%
Total liabilities		2,006,879			1,961,256			1,896,517			1,838,827		2.3	%	9.1	%
SHAREHOLDERS' EQUITY
Series A preferred stock		47,864			47,697			-			-		0.4	%	N/A
Common stock warrants		3,891			3,891			-			-		0.0	%	N/A
Common stock		28,573			28,570			28,570			28,563		0.0	%	0.0	%
Surplus		115,043			114,909			114,772			114,478		0.1	%	0.5	%
Retained earnings		920			2,420			8,904			73,449		-62.0	%	-98.7	%
Accumulated other comprehensive loss		(3,564	)		(4,717	)		(4,329	)		(1,608	)	-24.4	%	121.6	%
Total shareholders' equity		192,727			192,770			147,917			214,882		0.0	%	-10.3	%
Total Liabilities and Shareholders' Equity	$	2,199,606		$	2,154,026		$	2,044,434		$	2,053,709		2.1	%	7.1	%
Shares outstanding at end of period		11,429,203			11,428,003			11,428,003			11,425,052		0.0	%	0.0	%
Book value per share (1)	$	12.33		$	12.35		$	12.94		$	18.81		-0.2	%	-34.4	%
Tangible book value per share (1)	$	7.28		$	7.28		$	7.85		$	8.78		0.0	%	-17.1	%
(1) - Calculation is based on number of shares outstanding at the end of the period rather than weighted average shares outstanding

ADDITIONAL FINANCIAL INFORMATION
(Dollars in thousands)
(Rates / Ratios Annualized)
	For the Quarters Ended
OPERATING PERFORMANCE:	June 30, 2009			March 31, 2009			December 31, 2008			June 30, 2008
Average loans	$	1,639,395		$	1,636,850		$	1,611,328		$	1,577,769
Average securities		341,380			280,010			218,307			226,526
Average other interest-earning assets		18,893			23,321			25,052			19,020
Average noninterest-earning assets		169,858			169,957			230,138			222,719
Total average assets	$	2,169,526		$	2,110,138		$	2,084,825		$	2,046,034
Average interest-bearing deposits	$	1,470,461		$	1,404,718		$	1,357,565		$	1,322,218
Average noninterest bearing deposits		154,327			144,479			151,560			164,611
Average borrowings		339,948			370,227			344,699			323,305
Average noninterest-earning liabilities		11,809			15,452			20,165			18,447
Total average liabilities		1,976,545			1,934,876			1,873,989			1,828,581
Total average shareholders' equity		192,981			175,262			210,836			217,453
Total average liabilities and shareholders' equity	$	2,169,526		$	2,110,138		$	2,084,825		$	2,046,034
Interest rate yield on loans		5.21	%		5.36	%		5.83	%		6.53	%
Interest rate yield on securities		5.90	%		5.78	%		5.95	%		4.39	%
Interest rate yield on interest-earning assets		5.30	%		5.37	%		5.79	%		6.25	%
Interest rate expense on deposits		2.35	%		2.56	%		2.82	%		3.23	%
Interest rate expense on borrowings		2.60	%		2.56	%		3.43	%		3.43	%
Interest rate expense on interest-bearing liabilities		2.39	%		2.56	%		2.94	%		3.26	%
Interest rate spread		2.91	%		2.81	%		2.85	%		2.99	%
Net interest margin		3.13	%		3.03	%		3.08	%		3.30	%
Other operating income / Average assets		1.01	%		1.08	%		1.38	%		0.99	%
Other operating expense / Average assets		3.03	%		3.00	%		13.32	%		3.40	%
Efficiency ratio (other operating expense / revenue before provision)		79.00	%		78.92	%		328.28	%		87.95	%
Return on average assets		(0.07	%)		(1.11	%)		(11.56	%)		0.03	%
Return on average tangible assets		(0.08	%)		(1.14	%)		(12.22	%)		0.03	%
Return on average equity		(0.84	%)		(13.34	%)		(114.27	%)		0.26	%
Return on average tangible equity		(1.20	%)		(19.96	%)		(247.97	%)		0.56	%
Average equity / Average assets		8.90	%		8.31	%		10.11	%		10.63	%

ADDITIONAL FINANCIAL INFORMATION
(Dollars in thousands)
	As of / For the Quarters Ended												As of / For the Six Months Ended
NONPERFORMING ASSETS	June 30, 2009			March 31, 2009			December 31, 2008			June 30, 2008			June 30, 2009			June 30, 2008
Loans on nonaccrual status	$	132,312		$	113,178		$	95,173		$	12,390		$	132,312		$	12,390
Loans more than 90 days delinquent, still on accrual		2,705			5,634			853			260			2,705			260
Total nonperforming loans		135,017			118,812			96,026			12,650			135,017			12,650
Real estate owned (OREO)/Repossessed assets		10,374			9,155			6,898			5,772			10,374			5,772
Total nonperforming assets	$	145,391		$	127,967		$	102,924		$	18,422		$	145,391		$	18,422
Total nonperforming assets/Total assets		6.61	%		5.94	%		5.03	%		0.90	%		6.61	%		0.90	%
CHANGE IN THE
ALLOWANCE FOR LOAN LOSSES	June 30, 2009			March 31, 2009			December 31, 2008			June 30, 2008			June 30, 2009			June 30, 2008
Balance, beginning of period	$	38,573		$	34,720		$	26,750		$	18,215		$	34,720		$	17,381
Provision		5,525			14,059			15,492			1,383			19,584			2,897
Recoveries of loans previously charged off		372			606			2,057			353			978			719
Loans charged-off		(7,626	)		(10,812	)		(9,579	)		(1,106	)		(18,438	)		(2,152	)
Net (charge-offs)/recoveries		(7,254	)		(10,206	)		(7,522	)		(753	)		(17,460	)		(1,433	)
Balance, end of period	$	36,844		$	38,573		$	34,720		$	18,845		$	36,844		$	18,845
Net chargeoffs/Average loans outstanding (annualized)		1.83	%		2.58	%		1.89	%		0.19	%		2.20	%		0.19	%
Allowance for loan losses/Loans held for investment		2.31	%		2.44	%		2.19	%		1.20	%		2.31	%		1.20	%
DEPOSITS	June 30, 2009			March 31, 2009			December 31, 2008			June 30, 2008			June 30, 2009			June 30, 2008
Noninterest-bearing	$	155,223		$	143,146		$	150,273		$	164,671		$	155,223		$	164,671
Interest-bearing transaction deposits:
Checking		199,044			195,428			173,614			173,974			199,044			173,974
Money Market		310,036			303,753			267,496			298,585			310,036			298,585
Savings		40,550			39,990			38,113			41,833			40,550			41,833
Total interest-bearing transaction deposits		549,630			539,171			479,223			514,392			549,630			514,392
Interest-bearing time deposits		934,902			924,379			885,251			807,071			934,902			807,071
Total deposits	$	1,639,755		$	1,606,696		$	1,514,747		$	1,486,134		$	1,639,755		$	1,486,134

CONTACT:
FNB United Corp.
Mark Severson, CFO, 336-626-8351