News Column

CAPITAL BANK FINANCIAL CORP. - 10-Q - : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

August 7, 2014

Certain of the matters discussed under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Form 10-Q may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and, as such, may involve known and unknown risk, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from future results described in such forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "believes," "can," "could," "may," "predicts," "potential," "should," "will," "estimate," "plans," "projects," "continuing," "ongoing," "expects," "intends" and similar words or phrases. Actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation: market and economic conditions, the management of our growth, the risks associated with Capital Bank, NA's loan portfolio and real estate holdings, local economic conditions affecting retail and commercial real estate, the Company's geographic concentration in the southeastern region of the United States, restrictions imposed by Capital Bank, NA's loss sharing agreements with the FDIC, the assumptions and judgments required by loss share accounting and the acquisition method of accounting, competition within the industry, dependence on key personnel, government legislation and regulation, the risks associated with identification, completion and integration of any future acquisitions, and risks related to Capital Bank, NA's technology and information systems. Additional factors that may cause actual results to differ materially from these forward looking statements, include but are not limited to, the risk factors described in Part I, Item 1A of our annual report on Form 10-K for the fiscal year ended December 31, 2013. All forward-looking statements attributable to the Company are expressly qualified in their entirety by these cautionary statements. The Company disclaims any intent or obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise. Our financial information is prepared in accordance with U.S. GAAP. Application of these principles requires management to make complex and subjective estimates and judgments that affect the amounts reported in the following discussion and in our consolidated financial statements and accompanying notes. For more information on our accounting policies and estimates, refer to Company's consolidated financial statements and notes thereto included in our annual report on Form 10-K for the fiscal year ended December 31, 2013. The following discussion addresses the factors that have affected the financial condition and results of operations of the Company as reflected in the unaudited consolidated statement of condition as of June 30, 2014, and statements of income for the three and six months then ended. Except as noted in tables or otherwise, in dollar and share amounts in this Management's Discussion and Analysis of Financial Condition and Results of Operations are not in thousands. The following discussion pertains to our historical results, which includes the operations of First National Bank of the South, Metro Bank, Turnberry Bank (collectively, the "Failed Banks"), TIB Financial, Capital Bank Corp., Green Bankshares and Southern Community Financial subsequent to our acquisition of each such entity. Throughout this discussion we collectively refer to the above acquisitions as the "acquisitions" and we refer to loans originated or purchased by Capital Bank, N.A. as "new loans" or "originated loans".



Overview

We are a bank holding company incorporated in late 2009 with the goal of creating a regional banking franchise in the southeastern region of the United States through organic growth and acquisitions of other banks, including failed, underperforming and undercapitalized banks. We have raised $955.6 million to make acquisitions through a series of private placements and an initial public offering of our common stock. Since inception, we have acquired seven depository institutions, including the assets and certain deposits from the Failed Banks. We operate 162 branches in Florida, North and South Carolina, Tennessee and Virginia. Through our branches, we offer a wide range of commercial and consumer loans and deposits, as well as ancillary financial services.



We were founded by a group of experienced bankers with a multi-decade record of leading, operating, acquiring and integrating financial institutions.

Our executive management team is led by our Chief Executive Officer, R. Eugene Taylor. Mr. Taylor is the former Vice Chairman of Bank of America Corp., where his career spanned 38 years and included responsibilities as Vice Chairman and President of the Consumer and Commercial Bank. Mr. Taylor also served on Bank of America's Risk & Capital and Management Operating Committees. He has extensive experience executing and overseeing bank acquisitions, including NationsBank Corp.'s acquisition and integration of Bank of America, Maryland National Bank and Barnett Banks, Inc. Our Chief Financial Officer, Christopher G. Marshall, has over 31 years of financial and managerial experience, including serving as Senior Advisor to the Chief Executive Officer and Chief Restructuring Officer at GMAC, Chief Financial Officer of Fifth Third Bancorp and as the Chief Operations Executive for Bank of America's Global Consumer and Small Business Bank. Mr. Marshall also served as Chief Financial Officer of Bank of America's Consumer Products Group. Prior to joining Bank of America, Mr. Marshall served as Chief Financial Officer and Chief Operating Officer of Honeywell International Inc. Global Business Services. 39



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Our Chief Credit Officer, R. Bruce Singletary, has over 32 years of experience, including 19 years of experience managing credit risk. He has served as Head of Credit for NationsBank Corp. for the Mid-Atlantic region, where he established a centralized underwriting function to serve middle market commercial clients in the southeastern region of the United States. Mr. Singletary also served as Senior Risk Manager for commercial banking for Bank of America's Florida Bank and as Senior Credit Policy Executive of C&S Sovran (renamed NationsBank Corp). Our Chief of Strategic Planning and Investor Relations, Kenneth A. Posner, spent 13 years as an equity research analyst including serving as a Managing Director at Morgan Stanley focusing on a wide range of financial services firms. Mr. Posner also served in the United States Army, rising to the rank of Captain and has received professional designations as a Certified Public Accountant, a Chartered Financial Analyst and for Financial Risk Management. On September 24, 2012, our majority owned subsidiaries, CBKN, GRNB and TIBB, merged with and into Capital Bank Financial Corp. ("CBF" or the "Company"), with CBF continuing as the surviving corporation (the "Reorganization"). Upon completion of the reorganization the outstanding common shares held by the minority shareholders were converted into an aggregate of 3.7 million shares of CBF's Class A common stock. On October 1, 2012, the Company completed its acquisition of Southern Community Financial Corporation ("SCMF" or "Southern Community"), a publicly held bank holding company headquartered in Winston Salem, North Carolina.



Primary Factors Used to Evaluate Our Business

As a financial institution, we manage and evaluate various aspects of both our results of operations and our financial condition. We evaluate the levels and trends of the line items included in our balance sheet and income statement, as well as various financial ratios that are commonly used in our industry. We analyze these ratios and financial trends against our budgeted performance and the financial condition and performance of comparable financial institutions in our region and nationally. Our financial information is prepared in accordance with U.S. GAAP. Application of these principles requires management to make complex and subjective estimates and judgments that affect the amounts reported in the following discussion and in our consolidated financial statements and accompanying notes. For a full description of income statement metrics and balance sheet drivers used to evaluate our business such as, Net Interest Income, Provision for Loan Losses, Non-Interest Income, Non-Interest Expense, Net Income, Loan Growth, Asset Quality, Deposit Growth, Liquidity and Capital,refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our annual report on Form 10-K for the fiscal year ended December 31, 2013.



Quarterly Summary

For the three months ended June 30, 2014, we had net income of $12.4 million, or $0.25 per diluted share, an increase of 9% and 32% over the first quarter and prior year second quarter, respectively. Results include the following non-core items: $0.3 million of contingent value right ("CVR") expense, and $0.3 million of stock-based compensation expense associated with original founders awards.



Operating and financial highlights for the quarter include the following:

• Loan portfolio grew sequentially at an annualized rate of 16%;



• New loans of $441.7 million during the quarter; an increase of 75% and 46%

sequentially and year over year, respectively; • Legacy credit expenses declined 32% and 67% sequentially and year over year, respectively; • Efficiency and core efficiency ratio declined to 70.5% and 69.3%, respectively; • ROA and core ROA increased to 0.76% and 0.80%, respectively; and • Tangible book value per share increased to $18.85. 40



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Table of Contents Results of Operations Net Interest Income Net interest income is the largest component of our income and is affected by the interest rate environment and the volume and composition of interest-earning assets and interest-bearing liabilities. Our interest-earning assets include loans, interest-bearing deposits in other banks, investment securities, federal funds sold and securities purchased under agreements to resell. Our interest-bearing liabilities include deposits, federal funds purchased, subordinated debentures, repurchase agreements and other short-term borrowings.



Three months ended June 30, 2014 compared to three months ended March 31, 2014

Net interest income for the three months ended June 30, 2014 declined by $1.6 million, or 2.6%, to $60.8 million from $62.5 million for the three months ended March 31, 2014. The decline reflects the lower yield on new loans as compared to the yield on our legacy portfolio and a decline in average investment securities balances, partially offset by a decline in high-cost legacy time deposits. The net interest margin declined 15 basis points to 4.26% from 4.41% and the net interest income spread declined to 4.12% from 4.28%. Loan yields declined to 5.40% from 5.66%, driven by new loans of $441.7 million with an average yield of 3.5% down from 4.0% in the first quarter of 2014. The decline in yield on new loans was driven by a shift in customer preference for variable rate financing as the percentage of new loans with variable rates increased to 65% as compared to 56% in the prior quarter. Variable rate loans comprised 52% of the loan portfolio at June 30, 2014, increasing from 50% at December 31, 2013. The decline in average investment securities balances and increase in yields was mainly due to the sale of approximately $125.0 million in lower yield asset backed securities in order to re-balance our investment securities portfolio as part of our strategy to manage the bank's overall interest rate risk position. The decline in time deposits average balances is a result of continued planned shrinkage of high-cost legacy time deposits. The cost of core deposits remained flat at 0.14%. The cost of funds remained flat at 0.45%. (Dollars in thousands) Three Months Ended Three Months Ended June 30, 2014 March 31, 2014 Average Average Balances Interest Yield /



Rate Balances Interest Yield / Rate Interest earning assets Loans (1)

$ 4,593,337$ 61,826 5.40 % $ 4,542,255$ 63,404 5.66 % Investment securities (1) 1,060,611 4,648 1.76 % 1,141,231 4,801 1.71 % Interest bearing deposits 62,172 37 0.24 % 47,526 25 0.21 % Other (2) 40,346 578 5.75 % 43,123 581 5.46 % Total interest earning assets 5,756,466 $ 67,089 4.67 % 5,774,135 $ 68,811 4.83 % Non-interest earning assets 763,185 779,933 Total assets $ 6,519,651$ 6,554,068 Interest bearing liabilities Time deposits $ 1,358,478$ 2,878 0.85 % $ 1,413,731$ 2,970 0.85 % Money market 931,867 523 0.23 % 948,738 526 0.22 % Negotiable order of withdrawal accounts 1,330,856 556 0.17 % 1,313,700 538 0.17 % Savings 531,414 286 0.22 % 532,823 282 0.21 % Total interest bearing deposits 4,152,615 4,243 0.41 % 4,208,992 4,316 0.42 % Short-term borrowings and FHLB advances 98,002 50 0.20 % 103,851 70 0.27 % Long-term borrowings 135,831 1,719 5.08 % 135,317 1,704 5.11 % Total interest bearing liabilities 4,386,448 $ 6,012 0.55 % 4,448,160 $ 6,090 0.56 % Non-interest bearing deposits 1,002,757 942,006 Other liabilities 45,281 48,964 Shareholders' equity 1,085,165 1,114,938 Total liabilities and shareholders' equity $ 6,519,651$ 6,554,068 Net interest income and spread $ 61,077 4.12 % $ 62,721 4.28 % Net interest margin 4.26 % 4.41 % 41



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Table of Contents Rate/Volume Analysis (Dollars in thousands) Three Months Ended June 30, 2014 Compared to Three Months Ended March 31, 2014 Due to changes (3) in: Average Average Net Increase Volume Yield / Rate (Decrease) Interest income Loans (1) $ 707 $ (2,285 )$ (1,578 ) Investment securities (348 ) 195 (153 ) Interest-bearing deposits 8 4 12 Other (2) (39 ) 36 (3 ) Total interest income 328 (2,050 ) (1,722 ) Interest expense Time deposits (117 ) 25 (92 ) Money market (9 ) 6 (3 ) Negotiable order of withdrawal accounts 7 11 18 Savings (1 ) 5 4 Short-term borrowings and FHLB advances (4 ) (16 ) (20 ) Long-term borrowings 6 9 15 Total interest expense (118 ) 40 (78 ) Change in net interest income $ 446 $ (2,090 )$ (1,644 )



(1) Interest income and rates include the effects of a tax equivalent adjustment

using applicable statutory tax rates in adjusting tax-exempt interest on

tax-exempt investment securities and loans to a fully taxable basis. Average

loan volumes include non-performing assets which results in the impact of the

non-accrual of interest being reflected in the change in average rate.

(2) Includes Federal Reserve Bank, Federal Home Loan Bank and Bankers Bank stock.

(3) For each major category of interest-earning assets and interest-bearing

liabilities, information is provided with respect to changes due to average

volumes and changes due to rates, with the changes in both volumes and rates

allocated to these two categories based on the proportionate absolute changes

in each category.

Three months ended June 30, 2014 compared to three months ended June 30, 2013

Net interest income for the three months ended June 30, 2014 declined by $4.5 million, or 7.0%, to $60.8 million, from $65.4 million for the three months ended June 30, 2013. The decline was mainly due to lower yields on new loans, partially offset by a decline in high-cost legacy time deposits. The net interest margin declined 6 basis points to 4.26% from 4.32% and the net interest income spread declined to 4.12% from 4.19%. Loan yields declined to 5.40% from 5.96% mainly due to our new loan portfolio replacing higher yield legacy loans and a shift in customer preference for variable rate financing; for the trailing twelve months, new loans were $1.7 billion with an average yield of 3.74%. For the second quarter of 2014, new loans were $441.7 million with an average yield of 3.50% as compared to new loans of $301.6 million with an average yield of 3.98% in the second quarter of 2013. The cost of core deposits remained flat at 0.14%. The cost of funds declined to 0.45% from 0.55% for the prior year second quarter due to the continued planned shrinkage of high-cost legacy time deposits. Average balances in time deposits declined $495.1 million, or 27%, and average rates declined fourteen basis points. 42 -------------------------------------------------------------------------------- Table of Contents (Dollars in thousands) Three Months Ended Three Months Ended June 30, 2014 June 30, 2013 Average Average Balances Interest Yield /



Rate Balances Interest Yield / Rate Interest earning assets Loans (1)

$ 4,593,337$ 61,826 5.40 % $ 4,604,224$ 68,363 5.96 % Investment securities (1) 1,060,611 4,648 1.76 % 1,292,249 4,525 1.40 % Interest bearing deposits 62,172 37 0.24 % 164,784 102 0.25 % Other (2) 40,346 578 5.75 % 36,278 462 5.11 % Total interest earning assets 5,756,466 $ 67,089 4.67 % 6,097,535 $ 73,452 4.83 % Non-interest earning assets 763,185 865,118 Total assets $ 6,519,651$ 6,962,653 Interest bearing liabilities Time deposits $ 1,358,478$ 2,878 0.85 % $ 1,853,592$ 4,598 0.99 % Money market 931,867 523 0.23 % 1,055,635 575 0.22 % Negotiable order of withdrawal accounts 1,330,856 556 0.17 % 1,263,133 499 0.16 % Savings 531,414 286 0.22 % 506,997 255 0.20 % Total interest bearing deposits 4,152,615 4,243 0.41 % 4,679,357 5,927 0.51 % Short-term borrowings and FHLB advances 98,002 50 0.20 % 38,794 15 0.16 % Long-term borrowings 135,831 1,719 5.08 % 142,541 1,894 5.33 % Total interest bearing liabilities 4,386,448 $ 6,012 0.55 % 4,860,692 $ 7,836 0.65 % Non-interest bearing deposits 1,002,757 903,637 Other liabilities 45,281 56,324 Shareholders' equity 1,085,165 1,142,000 Total liabilities and shareholders' equity $ 6,519,651$ 6,962,653 Net interest income and spread $ 61,077 4.12 % $ 65,616 4.19 % Net interest margin 4.26 % 4.32 % Rate/Volume Analysis (Dollars in thousands) Three Months Ended June 30, 2014 Compared to Three Months Ended June 30, 2013 Due to changes (3) in: Average Average Net Increase Volume Yield / Rate (Decrease) Interest income Loans (1) $ (161 ) $ (6,376 )$ (6,537 ) Investment securities (896 ) 1,019 123 Interest-bearing deposits (61 ) (4 ) (65 ) Other (2) 55 61 116 Total interest income (1,063 ) (5,300 ) (6,363 ) Interest expense Time deposits (1,112 ) (608 ) (1,720 ) Money market (69 ) 17 (52 ) Negotiable order of withdrawal accounts 27 30 57 Savings 13 18 31 Short-term borrowings and FHLB advances 29 6 35 Long-term borrowings (87 ) (88 ) (175 ) Total interest expense (1,199 ) (625 ) (1,824 ) Change in net interest income $ 136 $ (4,675 )$ (4,539 )



(1) Interest income and rates include the effects of a tax equivalent adjustment

using applicable statutory tax rates in adjusting tax-exempt interest on

tax-exempt investment securities and loans to a fully taxable basis. Average

loan volumes include non-performing assets which results in the impact of the

non-accrual of interest being reflected in the change in average rate.

(2) Includes Federal Reserve Bank, Federal Home Loan Bank and Bankers Bank stock.

(3) For each major category of interest-earning assets and interest-bearing

liabilities, information is provided with respect to changes due to average

volumes and changes due to rates, with the changes in both volumes and rates

allocated to these two categories based on the proportionate absolute changes

in each category. 43



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Six months ended June 30, 2014 compared to six months ended June 30, 2013

Net interest income for the six months ended June 30, 2014 declined by $9.2 million, or 6.9%, to $123.3 million from $132.5 million for the six months ended June 30, 2013. The decline was mainly due to lower yields on new loans and average loans balances, partially offset by a decline in high-cost legacy time deposits, higher investment securities yields, and the prepayment of high coupon trust preferred securities during 2013. The net interest margin remained flat at 4.33% and the net interest income spread increased to 4.20% from 4.19%. Loan yields declined to 5.53% from 6.10%, mainly due to our new loan portfolio replacing higher yield legacy loans and a shift in customer preference for variable rate loans, as the percentage of new loans with variable rates increased to 61% as compared to 52% in the six months of the prior year. For the six months ended June 30, 2014, new loans were $694.2 million with an average yield of 3.68% as compared to new loans of $553.0 million with an average yield of 4.16% for the six months ended June 30, 2013. Investment securities yields increased due to the deployment of excess liquidity in higher yield investment securities. The cost of core deposits remained flat at 0.11%. The cost of funds declined to 0.45% from 0.58% at June 30, 2013, due to the decline in time deposits as a result of continued planned shrinkage of high-cost legacy time deposits and the $42.5 million prepayment of trust preferred securities in 2013. Average balances in time deposits declined $533.6 million, or 28%, and average rates declined sixteen basis points. (Dollars in thousands) Six Months Ended Six Months Ended June 30, 2014 June 30, 2013 Average Average Balances Interest Yield / Rate Balances Interest Yield / Rate Interest earning assets Loans (1) $ 4,567,937$ 125,230 5.53 % $ 4,638,263$ 140,319 6.10 % Investment securities (1) 1,100,698 9,449 1.73 % 1,150,237 8,074 1.42 % Interest bearing deposits 54,890 63 0.23 % 374,399 473 0.25 % Other (2) 41,727 1,159 5.60 % 37,565 952 5.11 % Total interest earning assets 5,765,252 $ 135,901 4.75 % 6,200,464 $ 149,818 4.87 % Non-interest earning assets 775,274 880,302 Total assets $ 6,540,526$ 7,080,766 Interest bearing liabilities Time deposits $ 1,385,952$ 5,850 0.85 % $ 1,919,601$ 9,633 1.01 % Money market 940,256 1,049 0.22 % 1,084,577 1,204 0.22 % Negotiable order of withdrawal accounts 1,322,325 1,094 0.17 % 1,269,488 1,054 0.17 % Savings 532,115 568 0.22 % 505,365 513 0.20 % Total interest bearing deposits 4,180,648 8,561 0.41 % 4,779,031 12,404 0.52 % Short-term borrowings and FHLB advances 100,910 121 0.24 % 41,009 29 0.14 % Long-term borrowings 135,575 3,423 5.09 % 156,648 4,393 5.66 % Total interest bearing liabilities 4,417,133 $ 12,105 0.55 % 4,976,688 $ 16,826 0.68 % Non-interest bearing deposits 972,549 896,277 Other liabilities 50,872 54,320 Shareholders' equity 1,099,972 1,153,481 Total liabilities and shareholders' equity $ 6,540,526$ 7,080,766 Net interest income and spread $ 123,796 4.20 % $ 132,992 4.19 % Net interest margin 4.33 % 4.33 % 44



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Table of Contents Rate/Volume Analysis (Dollars in thousands) Six Months Ended June 30, 2014 Compared to Six Months Ended June 30, 2013 Due to changes (3) in: Average Average Yield / Net Increase Volume Rate (Decrease) Interest income Loans (1) $ (2,100 )$ (12,989 )$ (15,089 ) Investment securities (360 ) 1,735 1,375 Interest-bearing deposits (370 ) (40 ) (410 ) Other (2) 111 96 207 Total interest income (2,719 ) (11,198 ) (13,917 ) Interest expense Time deposits (2,407 ) (1,376 ) (3,783 ) Money market (161 ) 6 (155 ) Negotiable order of withdrawal accounts 44 (4 ) 40 Savings 28 27 55 Short-term borrowings and FHLB advances 62 30 92 Long-term borrowings (557 ) (413 ) (970 ) Total interest expense (2,991 ) (1,730 ) (4,721 ) Change in net interest income $ 272$ (9,468 )$ (9,196 )



(1) Interest income and rates include the effects of a tax equivalent adjustment

using applicable statutory tax rates in adjusting tax-exempt interest on

tax-exempt investment securities and loans to a fully taxable basis. Average

loan volumes include non-performing assets which results in the impact of the

non-accrual of interest being reflected in the change in average rate.

(2) Includes Federal Reserve Bank, Federal Home Loan Bank and Bankers Bank stock.

(3) For each major category of interest-earning assets and interest-bearing

liabilities, information is provided with respect to changes due to average

volumes and changes due to rates, with the changes in both volumes and rates

allocated to these two categories based on the proportionate absolute changes

in each category. Provision for Loan Losses The following table presents the provision (reversal) for loan losses for PCI and non-PCI loans for the three and six months ended June 30, 2014 and 2013: (Dollars in thousands) Three Months Ended Six Months Ended June 30, 2014 June 30, 2013 June 30, 2014 June 30, 2013 Provision (reversal) for loan losses on PCI loans $ (940 )



$ 2,517 $ (3,428 ) $ (631 ) Provision for loan losses on non-PCI loans

2,344 1,950 4,808 10,500 Provision for Loan Losses $ 1,404 $ 4,467 $ 1,380 $ 9,869



Three months ended June 30, 2014 compared to three months ended June 30, 2013.

The provision for loan losses for the three months ended June 30, 2014 was $1.4 million compared to a provision of $4.5 million for the three months ended June 30, 2013. The improvement was mainly due to a lower level of net charge offs, which declined from $4.8 million to $1.7 million. For our new loans portfolio, a $4.2 million charge off was recorded during the three months of the prior year related to a single commercial credit relationship associated with suspected fraud. In the current year, the net reversal of impairment associated with PCI loans was mainly due to improvements in our expectations of future cash flows resulting from higher than anticipated payoffs mainly in the consumer and commercial categories and the continued resolution of special assets. Improvement in cash flows resulted in a $0.2 million and a $0.7 million reversal of impairment in covered and non-covered loans, respectively. In contrast, in the prior year, estimation of cash flows resulted in $0.2 million and $2.3 million additional impairment in covered and non-covered loans, respectively. 45



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Six months ended June 30, 2014 compared to six months ended June 30, 2013.

The provision for loan losses for the six months ended June 30, 2014 was $1.4 million compared to $9.9 million for the six months ended June 30, 2013. The improvement was mainly due to a lower level of net charge offs, which declined from $10.3 million to $2.9 million. For our new loans portfolio, a $7.8 million charge off was recorded during the six months of the prior year related to a single commercial credit relationship associated with suspected fraud. In the current year, the net reversal of impairment associated with PCI loans was mainly due to improvements in our expectations of future cash flows resulting from higher than anticipated payoffs mainly in the consumer and commercial categories and the continued resolution of special assets. Improvement in cash flows on non-covered loans resulted in a $3.6 million reversal of impairment, partially offset by $0.2 million in increased impairment from covered loans. In contrast, in the prior year, improvement in cash flows on covered loans resulted in $3.3 million reversal of impairment, partially offset by $2.7 million in increased impairment from non-covered loans.



The table below illustrates the impact of our second quarter 2014 estimates of expected cash flows on PCI loans on impairment and prospective yield:

(Dollars in thousands) Weighted Average Prospective Yields Based on Most Weighted Weighted Based on Original Recent Estimates of Average Average Cumulative Estimates of Expected Cash Note Life Impairment Expected Cash Flows Flows Loan Balance (2) Rate (Years) Covered loan pools (1) $ 13,223 6.09 % 7.99 % $ 212,791 4.91 % 2.87 Non-covered loans pools (1) 21,249 5.59 % 7.77 % 1,398,214 5.05 % 3.21 Total $ 34,472 5.67 % 7.80 % $ 1,611,005 5.03 % 3.17



(1) Covered loan pools are comprised of loans acquired in acquisition of the

Failed Banks with loans types guaranteed by the FDIC under loss sharing

agreements. Accordingly, certain pools classified as covered may include

individual loans which are not, or are no longer covered.

(2) Loan balance represents the recorded investment of all loans in the covered

and non-covered pools, respectively. Not all covered loans are classified as

PCI. Non-interest Income



Three months ended June 30, 2014 compared to three months ended June 30, 2013

Non-interest income declined $1.6 million to $11.9 million for the three months ended June 30, 2014 from $13.5 million for the three months ended June 30, 2013. The decline was mainly due to a $1.0 million increase in FDIC indemnification asset amortization as a result of lower credit loss expectations in our legacy loan portfolios, a $0.7 million decline in service charges on deposit accounts as a result of a 16% decline in average balances on customer overdrafts, and a $0.5 million decline in mortgage fees, as residential mortgage loans sold declined to $40.4 million for the three months ended June 30, 2014, from $49.8 million for the three months ended June 30, 2013. Partially offsetting this decline was an increase of $0.6 million in investment advisory and trust fees which benefited from a 23% increase year over year in fiduciary trust assets under management coupled with higher investment advisory commissions.



Six months ended June 30, 2014 compared to six months ended June 30, 2013

Non-interest income declined $1.2 million to $23.3 million for the six months ended June 30, 2014 from $24.4 million for the six months ended June 30, 2013. The decline was mainly due to a $1.6 million decline in service charges on deposit accounts as a result of a 19% decline in average balances on customer overdrafts, a $1.0 million increase in FDIC indemnification asset amortization as a result of lower credit loss expectations in our legacy loan portfolios, and a $1.0 million decline in mortgage fees, as residential mortgage loans sold declined to $66.4 million for the six months ended June 30, 2014 from $89.3 million for the six months ended June 30, 2013. Partially offsetting this decline was an increase of $1.5 million in investment advisory and trust fees due to an increase in fiduciary trust assets under management and higher investment advisory commissions as discussed above. 46



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The following table sets forth the components of non-interest income for the periods indicated: (Dollars in thousands) Three Months Ended Six Months Ended June 30, 2014 June 30, 2013 June 30, 2014 June 30, 2013 Service charges on deposit accounts $ 5,672 $ 6,335 $ 11,108$ 12,677 Debit card income 3,103 2,979 5,947 5,815 Fees on mortgage loans originated and sold 1,123 1,601 1,882 2,842 Investment advisory and trust fees 910 357 2,171 640 FDIC indemnification asset expense (2,064 ) (1,108 ) (4,229 ) (3,277 ) Investment securities (losses) gains, net (28 ) 205 146 205 OREO revenue 538 427 1,196 955 Earnings on bank owned life insurance policies 396 417 863 820 Wire transfer fees 188 193 366 378 Other income 2,049 2,100 3,806 3,360 Total non-interest income $ 11,887 $ 13,506$ 23,256$ 24,415 Non-interest Expense



Three months ended June 30, 2014 compared to three months ended June 30, 2013

Non-interest expense declined $8.1 million to $51.3 million for the three months ended June 30, 2014 from $59.4 million for the three months ended June 30, 2013. The decline was mainly due to a $6.5 million decline in the OREO valuation expense, foreclosed asset and loan workout expense components of our legacy credit expenses, which is reflecting the continued resolution of special assets. OREO sales during the quarter resulted in $32.4 million in cash proceeds, including $3.2 million in gains, reducing our OREO balance by 20% from March 31, 2014. Also contributing to the decline was a $0.3 million decrease in stock-based compensation expense mainly associated with original founders awards.



Salary and employee benefits increased $0.8 million mainly due to an increase in benefits reflecting higher healthcare costs.

Net occupancy expense remained relatively flat for the three months ended June 30, 2014 as compared to the three months ended June 30, 2013, as a result of our continued focus on consolidating facilities, offset by contractual increases in operating lease costs.

Other operating expense declined $1.3 million due to a decline in operational charge-offs, professional fees and insurance costs.

Six months ended June 30, 2014 compared to six months ended June 30, 2013

Non-interest expense declined $14.2 million to $106.5 million for the six months ended June 30, 2014 from $120.7 million for the six months ended June 30, 2013. The decline was mainly due to a $9.9 million decrease in the OREO valuation expense, foreclosed asset and loan workout expense components of our total legacy credit expenses, which is reflecting the continued resolution of special assets. OREO sales during the six months resulted in $48.3 million in cash proceeds, including $3.9 million in gains, reducing our OREO balance by 26% from December 31, 2013. Also contributing to the decline was a reduction of $2.2 million in CVR expense as a result of our most recent estimate of expected credit losses from our legacy Southern Community and Green Bankshares portfolios, and a $1.2 million decrease in stock-based compensation expense mainly associated with original founders awards. The CVR liability is measured each quarter and is payable after the fifth anniversary of the consummation of the respective acquisition and the current amount of the liability represents the expected payout discounted at an estimated market discount rate from the payout date to the reporting date.



Salary and employee benefits increased $3.5 million, mainly due to an increase in compensation as a result of higher incentive compensation and employee benefits due to increasing healthcare costs.

Net occupancy expense decline $0.3 million for the six months ended June 30, 2014 as compared to the six months ended June 30, 2013, as a result of our continued focus on consolidating facilities, partially offset by contractual increases in operating lease costs.



Other operating expense declined $4.1 million due to a decline in operational charge-offs, professional fees and insurance costs.

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The following table sets forth the components of non-interest expense for the periods indicated: (Dollars in thousands) Three Months Ended Six Months Ended June 30, 2014 June 30, 2013 June 30, 2014 June 30, 2013 Salaries and employee benefits $ 23,449 $ 22,638$ 46,947$ 43,422 Stock-based compensation expense 1,020 1,364 1,748 2,941 Net occupancy and equipment expense 8,723 8,686 17,322 17,593 OREO valuation expense 3,022 6,209 6,595 12,799 Gain on sales of OREO (3,192 ) (2,205 ) (3,913 ) (3,392 ) Foreclosed asset related expense 991 2,225 2,450 3,644 Loan workout expense 1,117 2,236 2,294 4,300 Conversion and merger related expense - 140 - 253 Professional fees 2,038 2,344 4,042 4,992 Loss on extinguishment of debt - - - 308 Software expense 1,940 1,817 3,808 3,640 Computer services 3,389 3,541 6,642 6,641 Contingent value right expense 327 428 1,094 3,311 FDIC assessments 1,648 1,763 3,277 3,566 Telecomunication expense 1,628 1,631 3,236 3,385 Amortization of intangible 1,186 1,270 2,400 2,542 Other expense 3,987 5,295 8,555 10,750 Total non-interest expense $ 51,273 $ 59,382$ 106,497$ 120,695 Our efficiency ratio for the three months ended June 30, 2014 and 2013 was 70.5% and 75.3%, respectively. Our core efficiency ratio for the three months ended June 30, 2014 and 2013 was 69.3% and 73.0%, respectively. Our efficiency ratio for the six months ended June 30, 2014 and 2013 was 72.7% and 76.9%, respectively. Our core efficiency ratio for the six months ended June 30, 2014 and 2013 was 71.3% and 72.7%, respectively. The core efficiency ratio, which equals core non-interest expense divided by core net revenues (net interest income plus core non-interest income), for the three and six months ended June 30, 2014 and 2013 is as follows: (Dollars in thousands) Three Months Ended Six Months Ended June 30, 2014 June 30, 2013 June 30, 2014 June 30, 2013 Reported non-interest expense $ 51,273 $ 59,382$ 106,497$ 120,695 Less: Stock-based compensation expense 531 1,366 1,064 2,943 CVR expense 327 428 1,094 3,311 Conversion and merger related expenses and salaries and employee benefits - 140 - 253 Loss on extinguishment of debt - - - 308



Core non-interest expense $ 50,415 $ 57,448

$ 104,339$ 113,880

Net interest income $ 60,831 $ 65,352$ 123,284$ 132,466 Reported non-interest income 11,887 13,506 23,256 24,415 Less: Securities (losses) gains (28 ) 205 146 205 Core non-interest income $ 11,915 $ 13,301$ 23,110$ 24,210 Efficiency Ratios 70.5 % 75.3 % 72.7 % 76.9 % Core Efficiency Ratios 69.3 % 73.0 % 71.3 % 72.7 % The core efficiency ratio is a non-GAAP measure which we believe provides analysts and investors with information useful in understanding our business and evaluating our operating efficiency. We monitor the core efficiency ratio to evaluate and control operating costs. The core efficiency ratio is also a measure utilized by our Board of Directors in measuring management's performance in controlling operating costs in comparison to peers. This non-GAAP measure has inherent limitations and is not required to be uniformly applied. It should not be considered in isolation or as a substitute for analyses of results reported under GAAP. This non-GAAP measure may not be comparable to similarly titled measures reported by other companies and should not be viewed as a substitute for non-interest expense. 48



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Income Taxes

The provision for income taxes was $7.6 million for the three months ended June 30, 2014 and $5.6 million for the three months ended June 30, 2013. The effective income tax rate was 38% and 37%, respectively. The change in effective income tax rate was mainly due to more favorable tax-exempt interest income and the impact of the CVR expense to the three months ended June 30, 2013 as compared to the three months ended June 30, 2014. The change in value of the CVR resulted from the overall improvement in our most recent estimates of cash flows, substantially related to the Company's legacy Southern Community and Green Bankshares portfolios. The change in estimated value of the CVRs is not deductible for income tax purposes. Excluding the impact of the CVR expense, the effective income tax rate was 37% for the three months ended June 30, 2014. The provision for income taxes was $14.8 million for the six months ended June 30, 2014 and $11.1 million for the six months ended June 30, 2013. The effective income tax rate was 38% and 42%, respectively. The change in effective income tax rates was mainly due to the impact of the CVR expense. As noted above, the change in estimated value of the CVRs is not deductible for income tax purposes. Excluding the impact of the CVR expense, the effective income tax rate was 37% for the six months ended June 30, 2014. There were no unrecognized tax benefits at June 30, 2014 and December 31, 2013, and we do not expect to identify any unrecognized tax benefits during the next 12 months. Financial Condition Our assets totaled $6.6 billion at June 30, 2014 and December 31, 2013. Total loans increased $170.1 million to $4.7 billion at June 30, 2014 compared to $4.6 billion at December 31, 2013. The increase in total loans was due to $694.2 million of new loans, partially offset by $149.2 million in resolutions of problem loans and $374.9 million in net principal repayments. Investment securities declined by $80.5 million mainly due to the sale of approximately $125.0 million in lower rate asset backed securities in order to re-balance our investment securities portfolio as part of our strategy to manage the bank's overall interest rate risk position. Total deposits were $5.2 billion at June 30, 2014 and December 31, 2013. Continued planned shrinkage in high-cost legacy time deposits, which declined by $87.8 million, and the increase in demand deposit and non-interest bearing accounts of $73.8 million, increased our core deposits to 73.7% of total deposits at June 30, 2014 compared to 72.1% at December 31, 2013. Borrowed funds, consisting of FHLB advances, short-term borrowings, notes payable and subordinated debentures, totaled $333.1 million and $259.7 million at June 30, 2014 and December 31, 2013, respectively. The increase in borrowed funds was mainly due to $64.9 million of new short-term FHLB advances. Shareholders' equity was $1.1 billion at June 30, 2014 and December 31, 2013. During 2013, the Company's Board of Directors authorized stock repurchase plans of $150.0 million. Stock repurchases may be made from time to time, on the open market or in privately negotiated transactions. The approved stock repurchase programs do not obligate the Company to repurchase any particular amount of shares, and the programs may be extended, modified, suspended, or discontinued at any time. During the three months ended June 30, 2014, the Company repurchased $43.2 million, or 1,798,133 common shares at an average price of $24.04 per share. During the six months ended June 30, 2014, the Company repurchased $65.9 million, or 2,766,998 common shares at an average price of $23.81 per share. As of June 30, 2014, the Company has repurchased a total of $135.8 million or 6,528,315 common shares at an average price of $20.80 per share, and had $14.2 million of remaining availability for future share repurchases under the $150.0 authorization. On July 23, 2014, the Board of Directors authorized an additional repurchase of up to $50.0 million of its common stock to be made from time to time, subject to market conditions and other factors.



Loans

Our loan portfolio is our primary earning asset. Our strategy is to grow the loan portfolio by originating commercial and consumer loans that we believe to be of high quality, that comply with our conservative credit policies and that produce revenues consistent with our financial objectives. Additionally, we have worked to reduce excessive concentrations in commercial real estate loans, which were the predominant portion of the acquisitions' legacy portfolios, in order to achieve a more diversified portfolio mix. 49



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The following table sets forth the carrying amounts of our loan portfolio:

(Dollars in thousands) As of June 30, 2014 As of December 31, 2013 Sequential Change Amount Percent Amount Percent Amount Percent Non-owner occupied commercial real estate $ 793,733 16.8 % $ 775,733 17.0 % $ 18,000 2.3 % Other commercial construction and land 243,671 5.2 % 300,494 6.6 % (56,823 ) -18.9 % Multifamily commercial real estate 62,793 1.3 % 67,688 1.5 % (4,895 ) -7.2 % 1-4 family residential construction and land 80,160 1.7 % 71,351 1.6 % 8,809 12.3 %



Total commercial real estate 1,180,357 25.0 % 1,215,266 26.7 % (34,909 ) -2.9 % Owner occupied commercial real estate

1,040,533 22.0 %



1,058,148 23.2 % (17,615 ) -1.7 % Commercial and industrial loans 932,800 19.8 %

803,736 17.7 % 129,064 16.1 % Lease financing 2,346 0.0 % 2,676 0.1 % (330 ) -12.3 % Total commercial 1,975,679 41.8 % 1,864,560 41.0 % 111,119 6.0 % 1-4 family residential 863,897 18.3 % 804,322 17.7 % 59,575 7.4 % Home equity loans 380,767 8.1 % 386,366 8.5 % (5,599 ) -1.4 % Other consumer loans 213,639 4.5 % 170,526 3.7 % 43,113 25.3 % Total consumer 1,458,303 30.9 % 1,361,214 29.9 % 97,089 7.1 % Other 107,836 2.3 % 110,989 2.4 % (3,153 ) -2.8 % Total loans $ 4,722,175 100.0 % $ 4,552,029 100.0 % $ 170,146 3.7 % The following table sets forth the carrying amounts of our non-pci and pci loan portfolio by category: (Dollars in thousands) As of June 30, 2014 Non PCI Loans New Acquired PCI Loans Total Non-owner occupied commercial real estate $ 295,756$ 68,261$ 429,716$ 793,733 Other commercial construction and land 62,754 246 180,671 243,671 Multifamily commercial real estate 17,179 14,061 31,553 62,793 1-4 family residential construction and land 66,334 -



13,826 80,160

Total commercial real estate 442,023 82,568 655,766 1,180,357 Owner occupied commercial real estate 687,303 42,236 310,994 1,040,533 Commercial and industrial loans 795,315 17,276 120,209 932,800 Lease financing 2,346 - - 2,346 Total commercial 1,484,964 59,512 431,203 1,975,679 1-4 family residential 448,315 49,549 366,033 863,897 Home equity loans 73,749 201,158 105,860 380,767 Other consumer loans 200,024 5,383 8,232 213,639 Total consumer 722,088 256,090 480,125 1,458,303 Other 60,186 3,739 43,911 107,836 Total loans $ 2,709,261$ 401,909$ 1,611,005$ 4,722,175 (Dollars in thousands) As of December 31, 2013 Non PCI Loans New Acquired PCI Loans Total Non-owner occupied commercial real estate $ 219,482$ 68,080$ 488,171$ 775,733 Other commercial construction and land 67,537 252 232,705 300,494 Multifamily commercial real estate 12,537 16,650 38,501 67,688 1-4 family residential construction and land 56,978 1



14,372 71,351

Total commercial real estate 356,534 84,983 773,749 1,215,266 Owner occupied commercial real estate 642,794 48,459 366,895 1,058,148 Commercial and industrial loans 643,044 20,875 139,817 803,736 Lease financing 2,676 - - 2,676 Total commercial 1,288,514 69,334 506,712 1,864,560 1-4 family residential 332,585 53,095 418,642 804,322 Home equity loans 52,918 217,252 116,196 386,366 Other consumer loans 151,584 6,407 12,535 170,526 Total consumer 537,087 276,754 547,373 1,361,214 Other 57,320 3,959 49,710 110,989 Total loans $ 2,239,455$ 435,030$ 1,877,544$ 4,552,029 During the six months ended June 30, 2014, our loan portfolio increased by $170.1 million due to $694.2 million of new loans, partially offset by $149.2 million in resolutions of problem loans and $374.9 million in net principal repayments. The composition of new loan production is indicative of our business strategy of emphasizing commercial and industrial and consumer loans. As illustrated in the table below, commercial loans and consumer and other loans represented approximately 45.9% and 35.2%, respectively, of new loan production for the six months ended June 30, 2014. We expect that this production will be more balanced going forward, as we have substantially reduced our concentration in commercial real estate loans.



The following table sets forth our new loans (excluding renewals of existing loans) segmented by loan type:

(Dollars in thousands) Six Months Ended June 30, 2014 June 30, 2013 Amount Percent Amount Percent Non-owner occupied commercial real estate $ 66,717 9.6 % $ 20,239 3.7 % Other commercial construction and land 36,324 5.2 % 21,840 3.9 % Multifamily commercial real estate 3,606 0.5 % 1,856 0.4 % 1-4 family residential construction and land 24,890 3.6 % 28,327 5.1 % Total commercial real estate 131,537 18.9 % 72,262 13.1 % Owner occupied commercial real estate 77,137 11.1 % 116,324 21.0 % Commercial and industrial loans 241,489 34.8 % 196,862 35.6 % Total commercial 318,626 45.9 % 313,186 56.6 % 1-4 family residential 128,115 18.5 % 99,244 17.9 % Home equity loans 25,530 3.7 % 11,514 2.1 % Other consumer loans 84,678 12.2 % 49,738 9.0 % Total consumer 238,323 34.4 % 160,496 29.0 % Other 5,750 0.8 % 7,091 1.3 % Total loans $ 694,236 100.0 % $ 553,035 100.0 % We underwrite commercial real estate loans based on the value of the collateral, the ratio of debt service to property income and the creditworthiness of tenants. Due to the inherent risk of commercial real estate lending, we underwrite loans selectively. Accordingly, we have reduced the concentration in our portfolio over time, which had characterized our acquired loan portfolios. Florida, South Carolina, North Carolina and Tennessee accounted for 31.9%, 13.4%, 31.2% and 23.5% of our new loans, respectively, for the six months ended June 30, 2014. Florida, South Carolina, North Carolina, and Tennessee accounted for 32.7%, 9.9%, 43.3% and 14.1% of our new loans, respectively, for the six months ended June 30, 2013. Of the new loans for the six months ended June 30, 2014, $46.0 million related to purchased high quality residential loans. 50



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Asset Quality

Consistent with our strategy of operating with a sound risk profile, we have focused on originating loans we believe to be of high quality, disposing of non-performing assets as rapidly as possible, and reducing the size of our legacy commercial real estate loan portfolio. To achieve these objectives, we underwrite new loans and manage existing loans in accordance with our underwriting standards under the direction of our Chief Credit Officer. Additionally, we have assigned senior credit officers to oversee the Florida, Tennessee and Carolinas markets, and we have established a special assets division to dispose of legacy problem loans and OREO. We refer to our loans covered under loss sharing agreements with the FDIC as "covered loans." These are the legacy loans of Metro Bank, Turnberry Bank, and First National Bank of the South that are covered by FDIC loss sharing agreements that reimburse us for 80% of net charge-offs and OREO losses over a five-year period for commercial loans and a ten-year period for residential loans. We refer to all other loans as "non-covered loans." These are new loans we originate or purchase, loans acquired through the acquisitions of Capital Bank, TIB Bank, Greenbank and Southern Community Financial and certain consumer loans of the Failed Banks that we acquired, which are not covered by any loss sharing agreement. Covered Loans As of June 30, 2014, covered loans were $240.5 million, representing 5.1% of our loan portfolio of which 0.5% were past due 30-89 days, 12.4% were greater than 90 days past due and still accruing/accreting and 0.5% were nonaccrual. As of December 31, 2013, covered loans were $285.3 million, representing 6.3% of our loan portfolio of which 0.3% were past due 30-89 days, 14.2% greater than 90 days past due and still accruing/accreting and 0.5% nonaccrual. The status of these loans reflects the severity of the real estate downturn and the excessive concentrations in commercial real estate and poor quality underwriting that characterized the banks we acquired from the FDIC under their prior business models. We have recorded these loans at estimated fair value reflecting expected lifetime losses estimated as of their acquisition date. Actual claims for reimbursement filed with the FDIC for incurred losses on covered loans but not yet paid were $4.6 million at June 30, 2014. We manage credit risk associated with loans covered under loss sharing agreements in the same manner as credit risk associated with non-covered loans. This includes following consistent policies and procedures relating to the process of working with borrowers in efforts to resolve problem loans resulting in the lowest losses possible and collection including foreclosure, repossession and the ultimate liquidation of any applicable underlying collateral. The loss sharing agreements also contain certain restrictions and conditions which, among other things, provide that certain credit risk management strategies such as loan sales, under certain conditions, could be prohibited under the agreements and may lead to the termination of coverage of any applicable losses on the related loans. Accordingly, actions taken by management in the process of prudently managing credit risk and borrower relationships, including, but not limited to, the renewal of covered loans for periods extending beyond the expiration of the applicable loss sharing agreement, the extension of additional credit or the making of certain modifications of loan terms, can lead to the termination of coverage under the loss sharing agreements for these particular loans. Collection of loss claims under the loss sharing agreements requires extensive and specific recordkeeping and incremental quarterly reporting to the FDIC on the status of covered loans. The loss claims filed and the related reporting on covered loans to the FDIC are subject to review and approval by the FDIC and various subcontractors utilized by the FDIC. The requirements for such reporting and interpretations thereof are occasionally revised by the FDIC and its subcontractors. Such changes along with our ability to comply with the requirements and revisions require interpretation and can lead to delays in the collection of claims on losses incurred. Claims filed by us for losses realized through June 30, 2014, totaling $126.0 million have been collected from the FDIC. Additionally, the loss sharing agreements provide for regular examination of compliance with loss sharing agreements including reviews of relevant policies and procedures and detailed audits of claims filed. Noncompliance with the provisions of the loss sharing agreements can lead to termination of the agreements. Non-Covered Loans As of June 30, 2014, non-covered loans were $4.5 billion, representing 94.9% of our loan portfolio, of which 0.3% were past due 30-89 days, 4.3% were greater than 90 days past due and still accruing/accreting and 0.2% were nonaccrual. As of December 31, 2013, non-covered loans were $4.3 billion, representing 93.7% of our loan portfolio, of which 0.5% were past due 30-89 days, 5.6% were greater than 90 days past due and still accruing/accreting and 0.3% were nonaccrual. As a large percentage of the non-covered loans are acquired impaired loans, these loans have also been affected by the real estate downturn and excessive commercial real estate concentrations. However, the credit quality of these loans is generally higher than that of the covered loans. In connection with the acquisitions, we applied acquisition accounting adjustments to the non-covered loans not originated by us to reflect estimates at the time of acquisition of the expected lifetime losses of such loans. 51



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Covered and Non-Covered Loan Credit Quality Summary

The table below summarizes key loan credit quality indicators for covered and non-covered loan portfolios as of the dates indicated:

(Dollars in thousands) June 30, 2014 December 31, 2013 % Greater % Greater Than 90 Days Than 90 Days % 30-89 Past Due and % 30-89 Past Due and Portfolio Days Past Still Accruing/ % Non- Portfolio Days Past Still Accruing/ % Non- Balance Due Accreting accruals Balance Due Accreting accruals Covered Porfolio Non-owner occupied commercial real estate $ 40,513 0.0 % 10.2 % 0.0 % $ 55,734 0.2 % 19.1 % 0.0 % Other commercial construction and land 17,173 1.8 % 54.9 % 0.0 % 19,162 0.0 % 44.2 % 0.0 % Multifamily commercial real estate 4,833 0.0 % 4.3 % 0.0 % 9,109 0.0 % 0.0 % 0.0 % Total commercial real estate 62,519 0.5 % 22.0 % 0.0 % 84,005 0.1 % 22.8 % 0.0 % Owner occupied commercial real estate 60,648 0.0 % 4.9 % 0.0 % 67,302 0.4 % 9.9 % 0.0 % Commercial and industrial loans 8,619 0.0 % 2.1 % 0.8 % 10,212 0.0 % 15.6 % 0.0 % Total commercial 69,267 0.0 % 4.5 % 0.1 % 77,514 0.3 % 10.6 % 0.1 % 1-4 family residential 60,631 0.9 % 14.0 % 0.0 % 70,599 0.3 % 15.3 % 0.0 % Home equity loans 47,095 0.8 % 9.2 % 2.3 % 51,315 0.4 % 2.4 % 2.5 % Other consumer loans 65 0.0 % 41.5 % 0.0 % 102 0.0 % 65.7 % 0.0 % Total consumer 107,791 0.8 % 11.9 % 1.0 % 122,016 0.4 % 9.9 % 1.0 % Other 868 0.0 % 0.0 % 0.0 % 1,822 0.0 % 52.4 % 0.0 % Total covered loans $ 240,445 0.5 % 12.4 % 0.5 % $ 285,357 0.3 % 14.2 % 0.5 % Non-covered Porfolio Non-owner occupied commercial real estate $ 753,220 0.1 % 4.4 % 0.2 % $ 719,999 0.2 % 4.9 % 0.0 % Other commercial construction and land 226,498 0.1 % 15.9 % 0.1 % 281,332 0.4 % 20.8 % 0.2 % Multifamily commercial real estate 57,960 0.0 % 3.6 % 0.0 % 58,579 0.5 % 4.5 % 0.0 % 1-4 family residential construction and land 80,160 0.2 % 2.8 % 0.0 % 71,351 0.0 % 2.5 % 0.0 % Total commercial real estate 1,117,838 0.1 % 6.6 % 0.1 % 1,131,261 0.3 % 8.7 % 0.1 % Owner occupied commercial real estate 979,885 0.3 % 2.7 % 0.2 % 990,846 0.5 % 3.4 % 0.3 % Commercial and industrial loans 924,181 0.1 % 3.3 % 0.3 % 793,524 0.0 % 3.8 % 0.2 % Lease financing 2,346 0.0 % 0.0 % 0.0 % 2,676 0.0 % 0.0 % 0.0 % Total commercial 1,906,412 0.2 % 3.0 % 0.2 % 1,787,046 0.3 % 3.6 % 0.3 % 1-4 family residential 803,266 0.5 % 4.0 % 0.2 % 733,723 1.0 % 5.1 % 0.2 % Home equity loans 333,672 0.8 % 1.6 % 0.7 % 335,051 0.8 % 2.2 % 0.7 % Other consumer loans 213,574 1.3 % 0.1 % 0.3 % 170,424 1.3 % 0.7 % 0.5 % Total consumer 1,350,512 0.7 % 2.8 % 0.3 % 1,239,198 1.0 % 3.7 % 0.4 % Other 106,968 0.0 % 2.8 % 0.0 % 109,167 0.4 % 4.3 % 0.0 % Total non-covered loans $ 4,481,730 0.3 % 3.8 % 0.2 % $ 4,266,672 0.5 % 5.0 % 0.2 % Total loans $ 4,722,175 0.3 % 4.3 % 0.2 % $ 4,552,029 0.5 % 5.6 % 0.3 % Of the loans past due greater than 90 days and still in accruing/accreting status as of June 30, 2014, $29.7 million (or approximately 14.8%) were loans covered by loss sharing agreements with the FDIC. Of the loans past due greater than 90 days and still in accruing/accreting status as of December 31, 2013, $40.4 million (or approximately 15.9%) were loans covered by loss sharing agreements with the FDIC. All of these loans were acquired loans and such loans were either PCI loans or, based upon their recorded investment, were considered well secured and in the process of collection and met the criteria for reporting as 90 days past due and still accruing. Total non-performing loans as of June 30, 2014 declined by $53.5 million to $212.1 million as compared to $265.6 million at December 31, 2013. The change in non-performing loans during the six months ended June 30, 2014 was attributable to $17.9 million in transfers to other real estate owned through foreclosures or receipt of deeds in lieu of foreclosures and $73.3 million in resolutions. Partially offsetting these decreases were $37.7 million of loans that became non-performing. During the six months ended June 30, 2014 of the loans we foreclosed, or received deeds in lieu of foreclosure, approximately 54% consisted of commercial real estate loans and approximately 14.9% were associated with the covered loans in South Carolina. 52



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The customer-owed principal balances and carrying amounts as of June 30, 2014 and December 31, 2013 are set forth in the tables below:

(Dollars in thousands) June 30, 2014 Carrying Amount of Carrying Noncurrent Amount as a Carrying Loans as a Gross Percentage of Amount of Percentage of Customer Carrying Customer Noncurrent Carrying Balance Owed Amount (1) Balance Loans (2) Amount Covered Portfolio Non-owner occupied commercial real estate $ 86,574$ 40,513 46.8 % $ 4,124 10.2 % Other commercial construction and land 79,609 17,173 21.6 % 9,434 54.9 % Multifamily commercial real estate 11,178 4,833 43.2 % 208 4.3 % 1-4 family residential construction and land 3,170 - 0.0 % - 0.0 % Total commercial real estate 180,531 62,519 34.6 % 13,766 22.0 % Owner occupied commercial real estate 75,741 60,648 80.1 % 2,955 4.9 % Commercial and industrial loans 18,739 8,619 46.0 % 248 2.9 % Total commercial 94,480 69,267 73.3 % 3,203 4.6 % 1-4 family residential 90,687 60,631 66.9 % 8,488 14.0 % Home equity loans 64,221 47,095 73.3 % 5,429 11.5 % Other consumer loans 200 65 32.5 % 27 41.5 % Total consumer 155,108 107,791 69.5 % 13,944 12.9 % Other 16,249 868 5.3 % - 0.0 % Total covered loans $ 446,368$ 240,445 53.9 % $ 30,913 12.9 % Non-covered Portfolio Non-owner occupied commercial real estate $ 836,309$ 753,220 90.1 % $ 34,195 4.5 % Other commercial construction and land 504,812 226,498 44.9 % 36,360 16.1 % Multifamily commercial real estate 66,981 57,960 86.5 % 2,100 3.6 % 1-4 family residential construction and land 113,511 80,160 70.6 % 2,219 2.8 % Total commercial real estate 1,521,613 1,117,838 73.5 % 74,874 6.7 %



Owner occupied commercial real estate 1,051,834 979,885

93.2 % 28,309 2.9 % Commercial and industrial loans 1,032,433 924,181 89.5 % 32,496 3.5 % Lease financing 2,346 2,346 100.0 % - 0.0 % Total commercial 2,086,613 1,906,412 91.4 % 60,805 3.2 % 1-4 family residential 863,012 803,266 93.1 % 34,089 4.2 % Home equity loans 388,710 333,672 85.8 % 7,487 2.2 % Other consumer loans 188,046 213,574 113.6 % 931 0.4 % Total consumer 1,439,768 1,350,512 93.8 % 42,507 3.1 % Other 115,864 106,968 92.3 % 3,024 2.8 % Total non-covered loans $ 5,163,858$ 4,481,730 86.8 % $ 181,210 4.0 % Total loans $ 5,610,226$ 4,722,175 84.2 % $ 212,123 4.5 % (1) The carrying amount for total covered and non-covered loans represents a



discount from the total gross customer balance of $205.9 million, or 46.1%,

and $682.1 million, or 13.2%, respectively.

(2) Includes loans greater than 90 days past due.

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Table of Contents (Dollars in thousands) December 31, 2013 Carrying Amount of Carrying Noncurrent Amount as a Carrying Loans as a Gross Percentage of Amount of Percentage of Customer Carrying Customer Noncurrent Carrying Balance Owed Amount (1) Balance Loans (2) Amount Covered Portfolio Non-owner occupied commercial real estate $ 101,639$ 55,734 54.8 % $ 10,658 19.1 % Other commercial construction and land 86,039 19,162 22.3 % 8,479 44.2 % Multifamily commercial real estate 15,543 9,109 58.3 % - 0.0 % 1-4 family residential construction and land 3,556 - 0.0 % - 0.0 % Total commercial real estate 206,777 84,005 40.6 % 19,137 22.8 % Owner occupied commercial real estate 82,206 67,302 81.9 % 6,631 9.9 % Commercial and industrial loans 20,466 10,212 49.8 % 1,663 16.3 % Total commercial 102,672 77,514 75.5 % 8,294 10.7 % 1-4 family residential 101,830 70,599 69.4 % 10,824 15.3 % Home equity loans 70,686 51,315 72.6 % 2,497 4.9 % Other consumer loans 85 102 - 67 65.7 % Total consumer 172,601 122,016 70.7 % 13,388 11.0 % Other 18,315 1,822 9.8 % 954 52.4 % Total covered loans $ 500,365$ 285,357 57.0 % $ 41,773 14.6 % Non-covered Portfolio Non-owner occupied commercial real estate $ 811,499$ 719,999 88.7 % $ 35,653 5.0 % Other commercial construction and land 555,044 281,332 50.7 % 59,196 21.0 % Multifamily commercial real estate 68,124 58,579 86.0 % 2,641 4.5 % 1-4 family residential construction and land 104,530 71,351 68.3 % 1,797 2.5 % Total commercial real estate 1,539,197 1,131,261 73.5 % 99,287 8.8 %



Owner occupied commercial real estate 1,072,309 990,846

92.4 % 37,368 3.8 % Commercial and industrial loans 903,772 793,524 87.8 % 31,698 4.0 % Lease financing 2,676 2,676 100.0 % - 0.0 % Total commercial 1,978,757 1,787,046 90.3 % 69,066 3.9 % 1-4 family residential 805,865 733,723 91.0 % 39,063 5.3 % Home equity loans 390,049 335,051 85.9 % 9,637 2.9 % Other consumer loans 183,869 170,424 92.7 % 2,055 1.2 % Total consumer 1,379,783 1,239,198 89.8 % 50,755 4.1 % Other 117,804 109,167 92.7 % 4,745 4.3 % Total non-covered loans $ 5,015,541$ 4,266,672 85.1 % $ 223,853 5.2 % Total loans $ 5,515,906$ 4,552,029 82.5 % $ 265,626 5.8 % (1) The carrying amount for total covered and non-covered loans represents a



discount from the total gross customer balance of $215.1 million, or 43.0%,

and $748.8 million, or 14.9%, respectively.

(2) Includes loans greater than 90 days past due.

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Allowance and Provision for Loan Losses

At June 30, 2014, the allowance for loan losses was $55.3 million of which $20.8 million related to new loans or acquired non-PCI loans, and $34.5 million was associated with PCI loans. At December 31, 2013, the allowance for loan losses was $56.9 million of which $19.0 million related to new loans or acquired non-PCI loans, and $37.9 million was associated with PCI loans. For non PCI loans, the allowance for loan losses reflects an allowance for probable incurred credit losses in the loan portfolio. Our formalized process for assessing the adequacy of the allowance for loan losses and the resultant need, if any, for periodic provisions to the allowance charged to income, includes both individual loan analyses and loan pool analyses. Individual loan analyses are periodically performed on loan relationships of a significant size, or when otherwise deemed necessary, and are performed primarily on commercial real estate and other commercial loans. The result is that commercial real estate loans and commercial loans are divided into the following risk categories: Pass, Special Mention, Substandard and Loss. The allowance consists of specific and general components. When appropriate, a specific reserve will be established for individual loans based upon the risk classifications and the estimated potential for loss. The specific component relates to loans that are individually classified as impaired. Otherwise, we estimate an allowance for each risk category. Home equity loans, indirect auto loans, residential loans and consumer loans generally are not analyzed individually or separately identified for impairment disclosures. These loans are grouped into pools and assigned risk categories based on their current payment status and management's assessment of risk inherent in the various types of loans. The allocations are based on the same factors mentioned above. However, should such loans exceeding certain size thresholds exhibit signs of impairment; they are individually evaluated for impairment. For PCI loans, the allowance for loan losses is a measure of impairment based upon our most recent estimates of expected cash flows. Our estimation of expected cash flows, which is used to determine the need for provisions to or reversals of the allowance every reporting period, is determined by assigning probability of default ("PD") and loss given default ("LGD") assumptions, amongst other assumptions such as prepayment speeds and recovery or liquidation timing. For commercial real estate and other commercial loans, we generally assign PD assumptions through the mapping of the following loan level risk ratings: Pass, Watch, Sub-Performing and Non-Performing. For home equity loans, residential loans, and consumer loans, PD is determined by mapping payment performance and delinquency status to market based default assumptions. Estimated loan to value ratios, determined using current appraisals and/or real estate indices, are used to derive loss given default assumptions for real estate collateralized loans.



Senior management and our Board of Directors review this calculation and the underlying assumptions on a routine basis not less frequently than quarterly.

The provision for loan losses is a charge to income in the current period to establish or replenish the allowance and maintain it at a level that management has determined to be adequate to absorb estimated incurred losses in the loan portfolio for new loans. A provision for loan losses is also required for any unfavorable changes in expected cash flows related to pools of purchased impaired loans. The provision for loan losses and expectations of cash flows may be impacted by many factors, including changes in the value of real estate collateralizing loans, net charge-offs and credit losses incurred, changes in loans outstanding, changes in impaired loans, historical loss rates and the mix of loan types. As the majority of our acquired loans are considered PCI loans, our provision for loan losses in future periods for acquired loans will be most significantly influenced in the short term by the differences between the actual credit losses resulting from the resolution of problem loans and the estimated credit losses used in determining the estimated fair values of purchased impaired loans as of their acquisition dates. For new loans, the provision for loan losses will be affected by the loss potential of impaired loans and trends in the delinquency of loans, non-performing loans and net charge offs, which cannot be reasonably predicted. Refer to Provision for loan losses section for further discussion. Management continuously monitors and actively manages the credit quality of the entire loan portfolio and will continue to recognize the provision required to maintain the allowance for loan losses at an appropriate level. The following table presents the roll forward of the allowance for loan losses for PCI and non-PCI loans for the three and six months ended June 30, 2014 and 2013 by the class of loans against which the allowance is allocated: 55 --------------------------------------------------------------------------------

Table of Contents (Dollars in thousands) Three Months Ended June 30, 2014 June 30, 2013 Non-PCI PCI Total Non-PCI PCI Total Allowance for loan losses at the beginning of the period $ 20,194$ 35,412$ 55,606$ 20,496$ 36,675$ 57,171 Charge-offs: Non-owner occupied commercial real estate 204 - 204 11 - 11 Other commercial construction and land (1 ) - (1 ) 28 - 28 1-4 family residential construction and land (1 ) - (1 ) - - - Total commercial real estate 202 - 202 39 - 39 Owner occupied commercial real estate 8 - 8 - - - Commercial and industrial loans 106 - 106 4,107 - 4,107 Lease financing - - - - - - Total commercial 114 - 114 4,107 - 4,107 1-4 family residential 80 - 80 28 - 28 Home equity loans 465 - 465 587 - 587 Other consumer loans 781 - 781 680 - 680 Total consumer 1,326 - 1,326 1,295 - 1,295 Other 534 - 534 628 - 628 Total charge-offs 2,176 - 2,176 6,069 - 6,069 Recoveries: Non-owner occupied commercial real estate 77 - 77 20 - 20 Other commercial construction and land 4 - 4 104 - 104 1-4 family residential construction and land 2 - 2 2 - 2 Total commercial real estate 83 - 83 126 - 126 Owner occupied commercial real estate 1 - 1 222 - 222 Commercial and industrial loans 34 - 34 123 - 123 Total commercial 35 - 35 345 - 345 1-4 family residential 4 - 4 20 - 20 Home equity loans 33 - 33 358 - 358 Other consumer loans 146 - 146 159 - 159 Total consumer 183 - 183 537 - 537 Other 172 - 172 255 - 255 Total recoveries 473 - 473 1,263 - 1,263 Net charge-offs (recoveries) 1,703 - 1,703 4,806 - 4,806 Provision for loan losses: Non-owner occupied commercial real estate 159 626 785 (222 ) 1,093 871 Other commercial construction and land (1 ) 2,606 2,605 (346 ) (300 ) (646 ) Multifamily commercial real estate (13 ) 90 77 (6 ) 72 66 1-4 family residential construction and land (36 ) 105 69 6 239 245 Total commercial real estate 109 3,427 3,536 (568 ) 1,104 536 Owner occupied commercial real estate (183 ) (23 ) (206 ) (277 ) 637 360 Commercial and industrial loans 347 172 519 1,057 700 1,757 Lease financing (1 ) 1 - - - - Total commercial 163 150 313 780 1,337 2,117 1-4 family residential 303 (3,472 ) (3,169 ) 115 665 780 Home equity loans 473 (626 ) (153 ) 359 (808 ) (449 ) Other consumer loans 899 104 1,003 750 (38 ) 712 Total consumer 1,675 (3,994 ) (2,319 ) 1,224 (181 ) 1,043 Other 397 (523 ) (126 ) 514 257 771



Total provision for loan losses 2,344 (940 ) 1,404

1,950 2,517 4,467

Allowance for loan losses at the end of the period $ 20,835$ 34,472$ 55,307$ 17,640$ 39,192$ 56,832 56

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Table of Contents (Dollars in thousands) Six Months Ended June 30, 2014 June 30, 2013 Non-PCI PCI Total Non-PCI PCI Total Allowance for loan losses at the beginning of the period $ 18,951$ 37,900$ 56,851$ 17,439$ 39,823$ 57,262 Charge-offs: Non-owner occupied commercial real estate 204 - 204 92 - 92 Other commercial construction and land 207 - 207 102 - 102 1-4 family residential construction and land 2 - 2 - - - Total commercial real estate 413 - 413 194 - 194 Owner occupied commercial real estate 144 - 144 - - - Commercial and industrial loans 161 - 161 9,011 - 9,011 Total commercial 305 - 305 9,011 - 9,011 1-4 family residential 101 - 101 28 - 28 Home equity loans 594 - 594 1,367 - 1,367 Other consumer loans 1,588 - 1,588 1,381 - 1,381 Total consumer 2,283 - 2,283 2,776 - 2,776 Other 1,131 - 1,131 1,409 - 1,409 Total charge-offs 4,132 - 4,132 13,390 - 13,390 Recoveries: Non-owner occupied commercial real estate 90 - 90 65 - 65 Other commercial construction and land 12 - 12 620 - 620 Multifamily commercial real estate - - - 41 - 41 1-4 family residential construction and land 4 - 4 23 - 23 Total commercial real estate 106 - 106 749 - 749 Owner occupied commercial real estate 24 - 24 266 - 266 Commercial and industrial loans 166 - 166 660 - 660 Total commercial 190 - 190 926 - 926 1-4 family residential 7 - 7 48 - 48 Home equity loans 114 - 114 455 - 455 Other consumer loans 314 - 314 297 - 297 Total consumer 435 - 435 800 - 800 Other 477 - 477 616 - 616 Total recoveries 1,208 - 1,208 3,091 - 3,091 Net charge-offs (recoveries) 2,924 - 2,924 10,299 - 10,299 Provision for loan losses: Non-owner occupied commercial real estate 181 (215 ) (34 ) (199 ) 791 592 Other commercial construction and land 499 2,981 3,480 (527 ) (392 ) (919 ) Multifamily commercial real estate (24 ) 184 160 (47 ) (84 ) (131 ) 1-4 family residential construction and land (70 ) 141 71 107 (40 ) 67 Total commercial real estate 586 3,091 3,677 (666 ) 275 (391 ) Owner occupied commercial real estate 39 (1,052 ) (1,013 ) (555 ) 930 375 Commercial and industrial loans 382 (52 ) 330 8,179 970 9,149 Lease financing (2 ) - (2 ) - - - Total commercial 419 (1,104 ) (685 ) 7,624 1,900 9,524 1-4 family residential 557 (5,049 ) (4,492 ) 145 1,667 1,812 Home equity loans 614 287 901 1,020 (4,841 ) (3,821 ) Other consumer loans 2,087 (64 ) 2,023 1,523 (160 ) 1,363 Total consumer 3,258 (4,826 ) (1,568 ) 2,688 (3,334 ) (646 ) Other 545 (589 ) (44 ) 854 528 1,382 Total provision for loan losses 4,808 (3,428 ) 1,380



10,500 (631 ) 9,869

Allowance for loan losses at the end of the period $ 20,835$ 34,472$ 55,307$ 17,640$ 39,192$ 56,832 No portion of the allowance allocated to non-PCI loans is in any way restricted to any individual loan or group of new loans or non-PCI loans, and the entirety of such allowance is available to absorb probable incurred credit losses from any and all such loans. The following table represents management's best estimate of the allocation of the allowance for loan losses for non-PCI loans to the various segments of the loan portfolio based on information available as of June 30, 2014 and December 31, 2013. 57 --------------------------------------------------------------------------------

Table of Contents (Dollars in thousands) June 30, 2014 December 31, 2013 Percent of Percent of Non-PCI Allowance for Non-PCI Non-PCI Allowance for Non-PCI Loan Balance Loan Losses Loans Loan Balance Loan Losses Loans Non-owner occupied commercial real estate $ 364,017 $ 1,682 0.5 % $ 287,562 $ 1,615 0.6 % Other commercial construction and land 63,000 1,505 2.4 % 67,789 1,201 1.8 % Multifamily commercial real estate 31,240 92 0.3 % 29,187 116 0.4 % 1-4 family residential construction and land 66,334 997 1.5 % 56,979 1,065 1.9 % Total commercial real estate 524,591 4,276 0.8 % 441,517 3,997 0.9 % Owner occupied commercial real estate 729,539 2,531 0.3 % 691,253 2,611 0.4 % Commercial and industrial loans 812,591 7,264 0.9 % 663,919 6,877 1.0 % Lease financing 2,346 1 0.0 % 2,676 3 0.1 % Total commercial 1,544,476 9,796 0.6 % 1,357,848 9,491 0.7 % 1-4 family residential 487,938 2,742 0.6 % 377,668 2,279 0.6 % Home equity loans 274,907 533 0.2 % 270,170 398 0.1 % Other consumer loans 205,407 3,130 1.5 % 157,991 2,318 1.5 % Total consumer 968,252 6,405 0.7 % 805,829 4,995 0.6 % Other 63,925 358 0.6 % 61,279 468 0.8 % Total loans $ 3,101,244$ 20,835 0.7 % $ 2,666,473$ 18,951 0.7 %



Criticized and Classified Loans

Loans with the following attributes are categorized as criticized and classified loans: (1) a potential weakness that deserves management's close attention; (2) inadequate protection by the current net worth and paying capacity of the obligor or of the collateral pledged; or (3) weaknesses which make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The following table summarizes criticized and classified loans at June 30, 2014 and December 31, 2013: (Dollars in thousands) June 30, 2014 (1) December 31, 2013 (1) Non- Non- Covered Covered Total Covered Covered Total Non-owner occupied commercial real estate $ 16,002$ 109,919$ 125,921$ 26,995$ 123,515$ 150,510 Other commercial construction and land 13,012 71,099 84,111 15,297 110,245 125,542 Multifamily commercial real estate 1,028 5,196 6,224 2,421 6,270 8,691 1-4 family residential construction and land - 8,509 8,509 - 8,336 8,336 Total commercial real estate 30,042 194,723 224,765 44,713 248,366 293,079 Owner occupied commercial real estate 22,674 66,642 89,316 24,747 86,335 111,082 Commercial and industrial loans 3,197 45,433 48,630 4,504 54,261 58,765 Total commercial 25,871 112,075 137,946 29,251 140,596 169,847 1-4 family residential 10,612 49,034 59,646 16,208 59,828 76,036 Home equity loans 6,113 10,006 16,119 6,983 13,663 20,646 Other consumer loans 27 1,014 1,041 67 2,189 2,256 Total consumer 16,752 60,054 76,806 23,258 75,680 98,938 Other 841 8,342 9,183 1,794 13,114 14,908 Total loans $ 73,506$ 375,194$ 448,700$ 99,016$ 477,756$ 576,772



(1) PCI and non-PCI loans are included in the balances presented.

Total criticized and classified loans declined $128.1 million for the six months ended June 30, 2014 as a result of $17.9 million in transfers to other real estate owned, $160.9 million of pay downs, charge offs and upgrades. Loan downgrades of $50.7 million partially offset the net decline.

Impaired Loans

Non-performing loans and impaired loans are defined differently. Some loans may be included in both categories, whereas other loans may only be included in one category. A loan is considered impaired when it is probable that not all principal and interest amounts will be collected according to the loan contract. Generally, residential mortgages, commercial and commercial real estate loans exceeding certain size thresholds established by management are individually evaluated for impairment. Non-accrual loans and restructured loans where loan term concessions benefiting the borrowers have been made are generally designated as impaired. 58



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Within the context of the accounting for impaired loans described in the preceding paragraph, other than the PCI loans described above, as of June 30, 2014, there were 13 loans individually evaluated for impairment and deemed impaired with a related allowance for loan losses of $30 thousand. At December 31, 2013, there were seven loans individually evaluated for impairment and deemed impaired with a related allowance for loan losses of $0.5 million. The specific reserve at December 31, 2013 was primarily related to a commercial loan with a balance $1.8 million. Due to the pool method of accounting for purchased credit impaired loans, non-performing PCI loans are reported as 90 days past due and still accruing/accreting. Going forward, additional acquired loans not classified as purchased credit impaired and new loans originated by us may become impaired and will be classified as such. Impaired loans also include loans which were not classified as non-accrual, but otherwise meet the criteria for classification as an impaired loan (i.e., loans for which the collection of all principal and interest amounts as specified in the original loan contract are not expected, or where management has substantial doubt that the collection will be as specified, but is still expected to occur in its entirety). In our evaluation of the adequacy of the allowance for loan losses, we consider (1) purchased credit impaired loans and loans classified as impaired, (2) our historical portfolio loss experience and trends and (3) certain other quantitative and qualitative factors. Non-Performing Assets Non-performing assets include accruing/accreting loans delinquent 90 days or more, non-accrual loans and investment securities, repossessed personal property and other real estate. Non-PCI loans and investments in debt securities are placed on non-accrual status when management has concerns relating to the ability to collect the principal and interest and generally when such assets are 90 days past due. Non-performing assets were as follows: (Dollars in thousands) June 30, 2014 December 31, 2013 Non- Non- Covered Covered Total Covered Covered Total Total non-accrual loans $ 1,180$ 10,188$ 11,368$ 1,336$ 10,474$ 11,810 Accruing/accreting loans delinquent 90 days or more 29,733 171,022 200,755 40,437 213,379 253,816 Total non-performing loans 30,913 181,210



212,123 41,773 223,853 265,626 Non-accrual investment securities

- - - - 800 800 Repossessed personal property - 107 107 - 108 108 Other real estate owned 17,013 79,270



96,283 25,251 104,145 129,396

Total non-performing assets $ 47,926$ 260,587 $



308,513 $ 67,024$ 328,906$ 395,930

Allowance for loan losses $ 13,223$ 42,084 $



55,307 $ 13,051$ 43,800$ 56,851 Non-performing asets as a percent of total assets

0.72 % 3.93 %



4.66 % 1.01 % 4.97 % 5.98 % Non-performing loans as a percent of total loans

0.65 % 3.84 %



4.49 % 0.92 % 4.92 % 5.84 % Allowance for loan losses as a percent of non-performing loans

42.77 % 23.22 %



26.07 % 31.24 % 19.57 % 21.40 % Allowance for loan losses as a percent of non-PCI loans

0.67 % 0.71 % At June 30, 2014 and December 31, 2013, covered and non-covered loans classified as delinquent 90 days or more and accruing/accreting are entirely comprised of components of PCI loan pools. There were no non-PCI loans included in this category at the end of each period presented. In addition to the discussion in the previous section, please refer to Note 4. Loans in our consolidated financial statements for a description of the accounting for pooled PCI loans. Total non-performing assets at June 30, 2014 declined by $87.4 million to $308.5 million compared to $395.9 million at December 31, 2013. The change in non-performing assets was mainly attributable to a decline in non-performing loans and other real estate owned of $53.5 million and $33.1 million, respectively. The decline in non-performing loans was due to $73.3 million in resolutions and $17.9 million in transfers to other real estate owned through foreclosures or receipt of deeds in lieu of foreclosures, offset by $37.7 million of loans that became non-performing. The decline in other real estate owned was mainly due to sales of $44.4 million, partially offset by valuation adjustments and acquisitions as noted above.



Investment Securities

Investment securities represent a significant portion of our assets. We invest in a variety of securities including obligations of U.S. government agencies, U.S. government-sponsored entities, including mortgage-backed securities, obligations of states or political subdivisions, privately issued mortgage-backed securities, bank eligible corporate obligations, mutual funds and limited types of equity securities. Our investment activities are governed internally by a written, board-approved policy. The investment policy is carried out by our Treasury department. Investment strategies are reviewed by the Risk Committee of the Board based on the interest rate environment, balance sheet mix, actual and anticipated loan demand, funding opportunities and our overall interest rate sensitivity. In general, the investment portfolio is managed in a manner appropriate to the attainment of the following goals: (1) to provide a margin of liquid assets sufficient to meet unanticipated deposit and loan fluctuations and overall funds management objectives; (2) to provide eligible securities to secure public funds and other borrowings; and (3) to manage interest rate risk and earn the maximum return on funds invested that is commensurate with meeting our first two goals. Our investment securities consisted primarily of U.S. agency mortgage-backed securities, which expose us to a lower degree of credit and liquidity risk. The following tables set forth our investment securities as of June 30, 2014 and December 31, 2013: 59

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Table of Contents (Dollars in thousands) June 30, 2014 Percent of Modified Total Duration in Security Type Book Value Fair Value Portfolio Yield Years Available-for-sale Marketable equity securities $ 946$ 949 0.2 % NA NA Mortgage-backed securities-residential issued by government sponsored entities 587,142 590,060 99.2 % 1.80 % 3.81 Industrial revenue bonds 3,580 3,736 0.6 % 2.23 % 0.24 Total $ 591,668$ 594,745 100.0 % 1.80 % 3.79 Held-to-maturity U.S. Government agencies $ 14,567$ 14,565 3.0 % 2.86 % 5.46 Corportate bonds 25,000 25,000 5.2 % 5.17 % 5.34 State and political subdivisions-tax exempt 13,599 14,032 2.9 % 3.22 % 4.39 State and political subdivisions-taxable 541 561 0.1 % 3.87 % 4.29 Mortgage-backed securities-residential issued by government sponsored entities 421,460 426,813 88.8 % 2.39 % 4.36 Total $ 475,167$ 480,971 100.0 % 2.58 % 4.44 (Dollars in thousands) December 31, 2013 Percent of Modified Total Duration in Security Type Book Value Fair Value Portfolio Yield Years Available-for-sale Asset-backed securities $ 133,647$ 133,225 19.4 % 0.62 % 3.99 Marketable equity securities 946 931 0.1 % NA NA Mortgage-backed securities-residential issued by government sponsored entities 549,869 546,626 79.8 % 1.66 % 3.39 Industrial revenue bonds 3,750 3,859 0.6 % 2.25 % 0.24 Collaterilized debt obligations 505 800 0.1 % - - Total $ 688,717$ 685,441 100.0 % 1.46 % 3.48 Held-to-maturity U.S. Government agencies $ 14,972$ 14,571 3.2 % 2.86 % 5.53 State and political subdivisions-tax exempt 14,201 14,099 3.1 % 3.01 % 4.67 State and political subdivisions-taxable 545 533 0.1 % 3.86 % 4.65 Mortgage-backed securities-residential issued by government sponsored entities 435,380 430,490 93.6 % 2.38 % 4.73 Total $ 465,098$ 459,693 100.0 % 2.42 % 4.75 60



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Contractual maturities of investment securities at June 30, 2014 and December 31, 2013 are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or repay obligations without call or prepayment penalties. Other securities include mortgage-backed securities and marketable equity securities which are not due at a single maturity date. The following table segments our investment portfolio by maturity date: (Dollars in thousands) After One Year After Five Years Within One Year Within Five Years Within Ten Years After Ten Years Other Securities Total As of June 30, 2014 Amount Yield



Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Available-for-sale Marketable equity securities

$ - - $ - - $ - - $ - - $ 949 NA $ 949 NA Mortgage-backed securities-residential issued by government sponsored entities - - - - - - - -



590,060 1.80 % 590,060 1.80 % Industrial revenue bonds

- - - - - - 3,736 2.23 % - - 3,736 2.23 % Total $ - - $ - - $ - - $ 3,736 2.23 % $ 591,009 1.80 % $ 594,745 1.80 % Held-to-maturity U.S. Government agencies $ - - $ - - $ - - $ 14,565 2.86 % $ - - $ 14,565 2.86 % Corporate bonds - - - - 25,000 5.17 % - - - - 25,000 5.17 % State and political subdivisions-tax exempt 205 0.76 % 935 2.30 % 10,258 3.17 % 2,634 3.89 % - - 14,032 3.22 % State and political subdivisions-taxable - - - - - - 561 3.87 % - - 561 3.87 % Mortgage-backed securities-residential issued by government sponsored entities - - - - - - - - 426,813 2.39 % 426,813 2.39 % Total $ 205 0.76 % $ 935 2.30 % $ 35,258 4.59 % $ 17,760 3.04 % $ 426,813 2.39 % $ 480,971 2.58 % (Dollars in thousands) After One Year After Five Years Within One Year Within Five Years Within Ten Years After Ten Years Other Securities Total As of December 31, 2013 Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Available-for-sale Asset-backed securities $ - - $ - - $ 55,983 0.64 % $ 77,242 0.61 % $ - - $ 133,225 0.62 % Marketable equity securities - - - - - - - - 931 NA 931 NA



Mortgage-backed

securities-residential issued by government sponsored entities - - - - - - - -



546,626 4.66 % 546,626 1.66 % Industrial revenue bonds

- - - - - - 3,859 2.25 % - - 3,859 2.25 % Collaterilized debt obligations - - - - - - 800 - - - 800 - Total $ - - $ - - $ 55,983 0.64 % $ 81,901 0.68 % $ 547,557 4.66 % $ 685,441 1.46 % Held-to-maturity U.S. Government agencies $ - - $ - - $ - - $ 14,571 2.86 % $ - - $ 14,571 2.86 % State and political subdivisions-tax exempt 674 0.83 % 1,140 2.06 % 7,631 3.02 % 4,654 3.56 % - - 14,099 3.01 % State and political subdivisions-taxable - - - - - - 533 3.86 % - - 533 3.86 % Mortgage-backed securities-residential issued by government sponsored entities - - - - - - - -



430,490 2.38 % 430,490 2.38 %

Total $ 674 0.83 % $ 1,140 2.06 % $ 7,631 3.02 % $ 19,758 3.05 % $ 430,490 2.38 % $ 459,693 2.42 % We regularly review each investment security for impairment based on criteria that include the extent to which cost exceeds the estimated fair value, the financial health of and specific prospects for the issuer(s) and our ability and intention with regard to holding the security to maturity. Future declines in the fair value of securities may result in impairment charges which may be material to our financial condition and results of operations. More specifically, our impairment analysis is based on the following: (1) whether it is "more likely than not" we would have to sell a security prior to recovery of the amortized cost; (2) whether we intend to sell the security; and (3) whether or not we expect to recover our recorded investment on an amortized cost basis based on credit characteristics of the investment. If, based upon our analysis, any of those conditions exist for a given security; we would generally be required to record an impairment charge in the amount of the difference between the carrying amounts and estimated fair value of such security. Based on the Company's analysis, there were no investment securities considered to be other-than-temporarily impaired as of June 30, 2014 and 2013. At December 31, 2013 the Company owned a collateralized debt obligation ("CDO") collateralized by trust preferred securities issued primarily by banks and several insurance companies. The Company sold its investment in the CDO on January 7, 2014. Proceeds from the sale were $0.8 million and gross gains were $0.3 million. Deposits Our strategy is to fund asset growth primarily with low-cost customer deposits in order to maintain a stable liquidity profile and net interest margin, as we are building our deposit base around service-oriented customer relationships. As of June 30, 2014, our core deposits, which we define as demand deposits, savings and money market accounts, increased by $64.2 million compared to December 31, 2013. Record net new checking account growth contributed to the increase in core deposits during the six months ended June 30, 2014. The average contractual rate on core deposits remained flat at 0.14%. Time deposit balances declined by $87.8 million as compared to December 31, 2013. At June 30, 2014, our wholesale time deposits increased by $90.0 million compared to December 31, 2013, providing a lower cost source of funding as compared with higher rate legacy time deposits. The $178.4 million net decrease in retail certificates of deposit accounts was primarily a result of continued planned shrinkage in these high-cost legacy time deposits. The average contractual rate on time deposits decreased to 1.09% from 1.18% at December 31, 2013. 61



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The following table sets forth the balances and average contractual rates payable to customers on our deposits, segmented by account type as of June 30, 2014 and December 31, 2013: (Dollars in thousands) As of June 30, 2014 As of December 31, 2013 Sequential Change Weighted Weighted Percent Average Percent Average of Contractual of Contractual Amount Total Rate Amount Total Rate Amount Percent Non-interest-bearing demand deposits $ 1,000,049 19 % 0.00 % $ 923,993 18 % 0.00 % $ 76,056 8.2 % Negotiable order of withdrawal accounts 1,319,667 26 % 0.14 % 1,321,903 25 % 0.15 % (2,236 ) -0.2 % Savings 528,567 10 % 0.22 % 530,144 10 % 0.21 % (1,577 ) -0.3 % Money market 953,446 18 % 0.23 % 961,526 19 % 0.21 %



(8,080 ) -0.8 %

Total core deposits 3,801,729 74 % 0.14 % 3,737,566 72 % 0.14 % 64,163 1.7 % Customer time deposits 1,217,967 24 % 1.11 % 1,396,361 27 % 1.14 % (178,394 ) -12.8 % Wholesale time deposits 141,760 3 % 0.99 % 51,136 1 % 2.41 %



90,624 177.2 %

Total time deposits 1,359,727 26 % 1.09 % 1,447,497 28 % 1.18 % (87,770 ) -6.1 % Total deposits $ 5,161,456 100 % 0.39 % $ 5,185,063 100 % 0.43 % $ (23,607 ) -0.5 %



The following table sets forth our average deposits and the average rates expensed for the periods indicated:

(Dollars in thousands) Three Months Ended June 30, 2014 December 31, 2013 Average Average Average Average Amount Rate Amount Rate Non-interest-bearing demand deposits $ 1,002,757 0.00 % $ 964,823 0.00 % Interest-bearing deposits Negotiable order of withdrawal accounts 1,330,856 0.17 % 1,288,723 0.17 % Savings 531,414 0.22 % 531,930 0.21 % Money market 931,867 0.23 % 947,429 0.22 % Time deposits (1) 1,358,478 0.85 % 1,513,038 0.83 % Total deposits $ 5,155,372 0.33 % $ 5,245,943 0.34 %



(1) The average rates on time deposits include the amortization of premiums on

time deposits assumed in connection with the acquisitions. Such premiums

were required to be recorded by the acquisition method of accounting to

initially record these deposits at their fair values as of the respective

acquisition dates.

The following table sets forth our time deposits segmented by months to maturity and deposit amount: (Dollars in thousands) June 30, 2014 Time Deposits of Time Deposits $100K and of less than Months to maturity: Greater $100K Total Three or less $ 92,003 $ 119,151$ 211,154 Over Three to Six 69,803 53,819 123,622 Over Six to Twelve 174,755 194,741 369,496 Over Twelve 370,019 285,436 655,455 Total deposits $ 706,580 $ 653,147$ 1,359,727 62



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Capital Resources and Liquidity

Capital Resources

In order to maintain a conservative risk profile, we operate with a prudent cushion of capital in relation to regulatory requirements and to the risk of our assets and business model. For planning purposes, we expect to operate with a minimum capital target equal to an 8% leverage ratio (defined as Tier 1 capital equal to 8% of average tangible assets), which would be in excess of regulatory standards for "well-capitalized" banks. We believe the 8% target is appropriate for our business model because of our conservative loan underwriting policies, investment portfolio composition, funding strategy, interest rate risk management limits and liquidity risk profile and because of the experience of our senior management team and Board of Directors. As of June 30, 2014 and December 31, 2013, we had 14.19% and 14.82% tangible common equity ratios, respectively. We calculate tangible common equity, tangible assets and the tangible common equity ratio, which are non-GAAP measures, because we believe they are useful for both investors and management as these are measures commonly used by financial institutions, regulators and investors to measure the capital adequacy of financial institutions. The tangible common equity ratio is calculated as tangible common shareholders' equity divided by tangible assets. Tangible common equity is calculated as total shareholders' equity less preferred stock and less goodwill and other intangible assets, net, and tangible assets are total assets less goodwill and other intangible assets, net. We believe these measures facilitate comparison of the quality and composition of the Company's capital over time and in comparison to its competitors. These non-GAAP measures have inherent limitations and are not required to be uniformly applied. They should not be considered in isolation or as a substitute for analyses of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies and should not be viewed as a substitute for shareholders' equity or total assets. The following table provides reconciliations of tangible common equity and tangible common equity ratio to GAAP total common shareholders' equity and tangible assets to GAAP total assets: (Dollars in thousands) June 30, 2014 December 31, 2013 Shareholder's equity $ 1,073,558 $ 1,112,788 Less: Goodwill and other intangible assets, net (155,398 ) (155,352 ) Tangible common shareholder's equity $ 918,160 $ 957,436 Total assets 6,624,006 6,617,561 Less: Goodwill and other intangible assets, net (155,398 ) (155,352 ) Tangible assets $ 6,468,608 $ 6,462,209 Tangible common equity ratio 14.19 % 14.82 % The Company operates with a significant level of excess capital above regulatory requirements (see the table below for the historical capital ratios as well as minimum and well capitalized ratio requirements). As of June 30, 2014, we had a Tier 1 leverage ratio of 14.6%, which provides us with $289.7 million in excess capital relative to the 10% Tier 1 leverage ratio required under our OCC Operating Agreement and $415.4 million in excess capital relative to our longer-term target of 8%.



As of June 30, 2014, Capital Bank, N.A. had a 14.1% Tier 1 leverage ratio, an 18.0% Tier 1 risk-based ratio and an 19.2% total risk-based capital ratio.

As of December 31, 2013, we had a Tier 1 leverage ratio of 14.9%, which provides us with $314.3 million in excess capital relative to the 10% Tier 1 leverage ratio required under the OCC Operating Agreement and $441.4 million in excess capital relative to our longer-term target of 8%.



As of December 31, 2013, Capital Bank, N.A. had a 13.4% Tier 1 leverage ratio, an 17.7% Tier 1 risk-based ratio and an 18.9% total risk-based capital ratio.

At present, the OCC Operating Agreement requires Capital Bank, N.A. to maintain total capital equal to at least 12% of risk-weighted assets, Tier 1 capital equal to at least 11% of risk-weighted assets and a minimum leverage ratio of 10%. We expect to operate under this capital standard until we demonstrate that we have stabilized our acquired operations, improved our profitability and reduced legacy problem assets. 63



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The minimum ratios along with the actual ratios for us and Capital Bank, N.A. as of June 30, 2014 and December 31, 2013 are presented in the following tables. (Dollars in thousands) Actual Well Adequately Capitalized Capitalized June 30, December 31, June 30, 2014 Requirement Requirement 2014 2013 Tier 1 Capital (to Average Assets) CBF Consolidated N/A ³ 4.0 % 14.6 % 14.9 % Capital Bank, N.A. ³ 5.0 % ³ 4.0 % 14.1 % 13.4 % Tier 1 Capital (to Risk Weighted Assets) CBF Consolidated N/A ³ 4.0 % 18.6 % 19.7 % Capital Bank, N.A. ³ 6.0 % ³ 4.0 % 18.0 % 17.7 % Total Capital (to Risk Weighted Assets) CBF Consolidated N/A ³ 8.0 % 19.8 % 21.0 % Capital Bank, N.A. ³ 10.0 % ³ 8.0 % 19.2 % 18.9 % Actual June 30, December 31,

(Dollars in thousands) 2014 2013 CBF Consolidated Tier 1 Capital $ 917,990$ 949,623 Excess Tier 1 Capital: vs. 10% regulatory requirement $ 289,692$ 314,306 vs. 8% target $ 415,352$ 441,370 Capital Bank, N.A. Tier 1 Capital $ 887,652$ 849,520 Excess Tier 1 Capital: vs. 10% regulatory requirement $ 260,032$ 214,396 vs. 8% target $ 385,556$ 341,421 In July 2013, the U.S. banking regulators adopted a final rule which implements the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision, and certain changes required by the Dodd-Frank Act. The final rule establishes an integrated regulatory capital framework and introduces the "Standardized Approach" for risk weighted assets, which will replace the Basel I risk-based guidance for determining risk-weighted assets as of January 1, 2015 (the date we expect to become subject to the new rules). We do not believe adoption of the final rules and relevant provisions will have a significant impact on our operations.



Liquidity

Liquidity involves our ability to raise funds to support asset growth or reduce assets to meet deposit withdrawals and other borrowing needs, to maintain reserve requirements and to otherwise operate on an ongoing basis. To mitigate liquidity risk, our strategy is to fund asset growth primarily with low-cost customer deposits. We also operate under a liquidity policy and contingent liquidity plan that requires us to monitor indicators of potential liquidity risk, utilize cash flow projection models to forecast liquidity needs, identify alternative back-up sources of liquidity and maintain a predetermined cushion of cash and liquid securities at 15% of total assets. Our liquidity needs are met primarily by our cash position, growth in core deposits and cash flow from our amortizing investment and loan portfolios (including scheduled payments, prepayments, and maturities from portfolios of loans and investment securities). Our ability to borrow funds from non-deposit sources provides additional flexibility in meeting our liquidity needs. Short-term borrowings include federal funds purchased, securities sold under repurchase agreements and brokered deposits. We also utilize longer-term borrowings when management determines that the pricing and maturity options available through these sources create cost effective options for funding asset growth and satisfying capital needs. Our long-term borrowings include structured repurchase agreements and subordinated notes underlying our trust preferred securities. As of June 30, 2014 and December 31, 2013, cash and liquid securities totaled 18.4%, and 20.0% of assets, respectively providing us with $223.9 million and $328.7 million, respectively, of excess liquidity relative to our planning target. As of June 30, 2014 and December 31, 2013, the ratio of wholesale to total funding was 10.0% and 7.2% respectively, which is below our planning target of 15%. In addition to maintaining a stable core deposit base, we maintain adequate liquidity primarily through the use of investment securities, short term investments such as federal funds sold and unused borrowing capacity. We hold investments in FHLB stock for the purpose of maintaining credit lines with the FHLB. The credit availability is based on a percentage of the subsidiary bank's total assets as reported in their most recent quarterly financial information submitted to the FHLB and subject to the pledging of sufficient collateral. 64



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At June 30, 2014 and December 31, 2013, there were $161.2 million and $96.3 million in advances outstanding, respectively. In addition, we had $25.6 million in letters of credit outstanding as of June 30, 2014 and December 31, 2013 and collateral available under our agreements with the FHLB provided for incremental borrowing availability of up to approximately $70.8 million and $95.4 million, respectively. We believe that we have adequate funding sources through unused borrowing capacity from the FHLB, unpledged investment securities, cash on hand and on deposit in other financial institutions, loan principal repayment and potential asset maturities and sales to meet our foreseeable liquidity requirements and contractual obligations. As of June 30, 2014 and December 31, 2013, our holding company had cash of approximately $39.4 million and $109.9 million, respectively. This cash is available for providing capital support to our subsidiary bank and for other general corporate purposes, including potential future acquisitions. The decline in cash at our holding company was primarily due to the repurchase of $65.9 million of common stock during the six months ended June 30, 2014. During July 2014, the OCC approved and the Bank declared and paid dividends of $56 million to the Holding Company. We calculate tangible book value, and tangible book value per share, which are non-GAAP measures because we believe they are useful for both investors and management as these are measures commonly used by financial institutions, regulators and investors to measure the capital adequacy of financial institutions. Tangible book value is equal to book value less goodwill and core deposit intangibles, net of related deferred tax liabilities. We believe these measures facilitate comparison of the quality and composition of the Company's capital over time and in comparison to its competitors. These non-GAAP measures have inherent limitations and are not required to be uniformly applied. They should not be considered in isolation or as a substitute for analyses of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies and should not be viewed as a substitute for total shareholders' equity. The following table sets forth a reconciliation of tangible book value and tangible book value per share to total shareholders' equity, which is the most directly comparable GAAP measure: (Dollars in thousands, except per share amounts) June 30, 2014 December 31, 2013 Shareholder's equity $ 1,073,558 $ 1,112,788 Less: Goodwill (134,522 ) (131,987 ) Less: Core deposits and other intangibles, net of taxes (12,768 ) (14,290 ) Tangible Book Value $ 926,268 $ 966,511 Book Value Per Share $ 21.84 $ 21.36 Tangible Book Value Per Share $ 18.85 $ 18.55


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Source: Edgar Glimpses


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