Q2 2014 Press Release

RALEIGH, N.C., July 23, 2014 – Yadkin Financial Corporation (NYSE: YDKN) (the "Company" and "Yadkin"), the parent company of Yadkin Bank, announced today financial results for the second quarter ended June 30, 2014. Net income available to common shareholders excluding merger-related expenses for the quarter was $4.3 million, or $0.30 per diluted share. Net income available to common shareholders for the quarter was $3.8 million, or $0.26 per diluted share, compared to $3.3 million, or $0.23 per diluted share, in the first quarter of 2014. These second quarter financial results do not include the financial results of VantageSouth Bancshares, Inc. ("VantageSouth"), which was merged with and into the Company on July 4, 2014.

"Yadkin and VantageSouth produced strong results individually while working hard to close the merger and plan for the integration." Joe Towell, Executive Chairman of Yadkin and CEO prior to the VantageSouth merger, stated. "Yadkin's financial performance in the second quarter continued to improve as net operating earnings available to common shareholders reached $4.3 million; an increase of 10% over Q1 2014 results. Yadkin’s net recoveries for the quarter and improving efficiency contributed significantly to the improvement in operating results." Custer, commenting on VantageSouth results, added, "VantageSouth turned in record operating results in its final quarter as a stand-alone company. Net operating earnings available to common shareholders totaled $5.0 million, an increase of 50% from Q1 2014 to Q2 2014. These results were realized by lowering credit costs, improving fee income and continuing strong expense control."

Net operating earnings, which exclude merger and conversion costs and securities gains and losses, totaled $4.9 million in the second quarter of 2014 compared to $4.4 million in the first quarter of 2014. Similarly, pre-tax, pre-provision operating earnings increased to $6.7 million in the second quarter of 2014 from $6.3 million in the first quarter of 2014. Net income was $4.4 million in the second quarter of 2014 compared to $3.9 million in the first quarter of 2014. After preferred stock dividends, net income available to common stockholders was $3.8 million, or $0.26 per diluted common share, in the second quarter of 2014 compared to $3.3 million, or $0.23 per diluted common share, in the first quarter of 2014.

The Company's key asset quality metrics continue to be strong as we maintain our focus on quality lending, underwriting, and problem asset resolution. First, our adversely classified assets to Tier 1 capital and loan loss reserve ratio has remained stable at 17.0 percent at the end of the first and second quarters. Nonperforming loans totaled $19.0 million at June 30, 2014 and the nonperforming loans to total loans ratio increased slightly to 1.32 percent at June 30, 2014, compared to 1.09 percent at March 31, 2014 due primarily to two new large relationships which Yadkin Bank has been monitoring. Other real estate owned (OREO) totaled $2.3 million at June 30, 2014, a decrease of $557 thousand compared to March 31, 2014. Total nonperforming assets at June 30, 2014 were $21.3 million, or 1.17 percent of total assets, up from $17.9 million, or 0.99 percent of total assets, at March 31, 2014.

Net operating earnings, which exclude merger and conversion costs, restructuring charges,, and securities gains, totaled $5.0 million in the second quarter of 2014 compared to $3.7 million in the first quarter of 2014 as provision for loan losses declined and VantageSouth cut costs and continued to improve its operating efficiency ratio. Pre-tax, pre-provision operating earnings increased to $8.4 million in the second quarter of 2014 from $7.1 million in the first quarter of 2014. Net income was $3.5 million in the second quarter of 2014 compared to $2.1 million in the first quarter of 2014. After preferred stock dividends and accretion, net income available to common stockholders was $3.5 million, or $0.06 per common share, in the second quarter of 2014 compared to $1.7 million, or $0.03 per common share, in the first quarter of 2014.

Income accretion on purchased loans totaled $5.0 million in the second quarter of 2014, which consisted of $3.0 million of accretion on purchased credit-impaired ("PCI") loans and $2.0 million of accretion income on purchased non-impaired loans. PCI loan accretion represents all interest income recorded for those loans in the period while accretion income on purchased non-impaired loans represents accretion of the fair value discount, which increased interest income above contractual yields. Income accretion on purchased loans in the first quarter of 2014 totaled $5.2 million, which included $3.1 million of accretion on PCI loans and $2.0 million of accretion income on purchased non-impaired loans. Accretion income on purchased non-impaired loans included $798 thousand of accelerated accretion due to principal prepayments in the second quarter of 2014 compared to $631 thousand in the first quarter of 2014. Fair value amortization on interest-bearing liabilities totaled $563 thousand in the second quarter of 2014 and $624 thousand in the first quarter of 2014, which reduced interest expense in both periods.

Provision for loan losses was $464 thousand in the second quarter of 2014, which was a decrease from $1.3 million in the first quarter of 2014. The lower provision for loan losses was primarily due to a $1.2 million decrease in provision expense for non-PCI loans, which was partially offset by a $345 thousand increase in provision on certain PCI loan pools. Provision expense on non-PCI loans was impacted by significantly lower net loan charge-offs which declined from 0.33 percent in the first quarter of 2014 to 0.07 percent of average loans in the second quarter of 2014. The table below summarizes the changes in VantageSouth's allowance for loan losses ("ALLL") in the second quarter of 2014 and first quarter of 2014.

Non-interest income totaled $5.3 million in the second quarter of 2014 compared to $4.7 million in the first quarter of 2014. Government-guaranteed, small business lending income, which includes gains on sales of the guaranteed portion of certain SBA loans originated by VantageSouth as well as servicing fees on previously sold SBA loans, decreased by $220 thousand due to a slight decline in loan sales. Despite the decline from the first quarter of 2014, government guaranteed lending income continues to be a major source of non-interest income and the Company expects strong performance in the third quarter. Offsetting this decrease, mortgage banking income increased by $212 thousand primarily due to an increase in volume and an increase in profit margins on loans sold to investors. Additionally, service charges and bank-owned life insurance income increased by $172 thousand and $83 thousand, respectively.

Non-interest expense totaled $17.8 million in the second quarter of 2014 compared to $18.7 million in the first quarter of 2014. Operating non-interest expense, which excludes merger and conversion costs, restructuring charges, and securities gains, declined $952 thousand during this period as VantageSouth continued to focus on cutting costs and operating more efficiently following its merger with ECB Bancorp, Inc. in April 2013 and then-pending merger with Yadkin. VantageSouth's operating efficiency ratio, which excludes merger and conversion costs and restructuring charges, improved from 70.1 percent in the first quarter of 2014 to 65.3 percent in the second quarter of 2014. Restructuring charges in the first and second quarter of 2014 consisted of severance expenses related to a branch optimization plan that will result in the closure or sale of five underperforming branches as well as an initiative to streamline VantageSouth's organizational structure in certain back office functions. As a result of the branch optimization plan, four branch closures occurred in May 2014 and one branch is scheduled to be sold in the third quarter of 2014.

Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables which provide a reconciliation of non-GAAP financial measures to GAAP financial measures. Yadkin and VantageSouth use these non-GAAP financial measures, including: (i) net operating earnings (loss); (ii) pre-tax, pre-provision operating earnings; (iii) operating non-interest expense, (iv) operating efficiency ratio, (v) adjusted allowance for loan losses to loans; and (vi) tangible common equity, in their analysis of the company's performance. Net operating earnings (loss) excludes the following from net income (loss): securities gains, a one-time acquisition gain, merger and conversion costs, restructuring charges, income tax expense from the change in future state tax rates, and the income tax effect of adjustments. Pre-tax, pre-provision operating earnings excludes the following from net income (loss): provision for (recovery of) loan losses, income tax expense (benefit), securities gains, a one-time acquisition gain, restructuring charges, and merger and conversion costs. Operating non-interest expense excludes merger and conversion costs and restructuring charges from non-interest expense. The operating efficiency ratio excludes a one-time acquisition gain, securities gains and losses, merger and conversion costs, and restructuring charges from the efficiency ratio. Adjusted allowance for loan losses adds net acquisition accounting fair value discounts to the allowance for loan losses. Tangible common equity excludes preferred stock as well as goodwill and other intangible assets, net, from total stockholders' equity.

Management believes that non-GAAP financial measures provide additional useful information that allows readers to evaluate the ongoing performance of the Company. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider Yadkin and VantageSouth performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP.

Information in this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, reduced earnings due to larger than expected credit losses in the sectors of our loan portfolio secured by real estate due to economic factors, including declining real estate values, increasing interest rates, increasing unemployment, or changes in payment behavior or other factors; reduced earnings due to larger credit losses because our loans are concentrated by loan type, industry segment, borrower type, or location of the borrower or collateral; the rate of delinquencies and amount of loans charged-off; the adequacy of the level of our allowance for loan losses and the amount of loan loss provisions required in future periods; costs or difficulties related to the integration of the banks we acquired or may acquire may be greater than expected; results of examinations by our regulatory authorities, including the possibility that the regulatory authorities may, among other things, require us to increase our allowance for loan losses or writedown assets; the amount of our loan portfolio collateralized by real estate, and the weakness in the commercial real estate market; our ability to maintain appropriate levels of capital, including levels of capital required under the capital rules implementing Basel III; the impact of our efforts to raise capital on our financial position, liquidity, capital, and profitability; the increase in the cost of capital of our Series T and Series T-ACB Preferred Stock in 2014 if we do not redeem within five years of the date of issuance; adverse changes in asset quality and resulting credit risk-related losses and expenses; increased funding costs due to market illiquidity, increased competition for funding, and increased regulatory requirements with regard to funding; significant increases in competitive pressure in the banking and financial services industries; changes in the interest rate environment which could reduce anticipated or actual margins; changes in political conditions or the legislative or regulatory environment, including the effect of recent financial reform legislation on the banking industry; general economic conditions, either nationally or regionally and especially in our primary service area, becoming less favorable than expected resulting in, among other things, a deterioration in credit quality; our ability to retain our existing customers, including our deposit relationships; changes occurring in business conditions and inflation; changes in monetary and tax policies; ability of borrowers to repay loans, which can be adversely affected by a number of factors, including changes in economic conditions, adverse trends or events affecting business industry groups, reductions in real estate values or markets, business closings or lay-offs, natural disasters, which could be exacerbated by potential climate change, and international instability; risks associated with a failure in or breach of our operational or security systems or infrastructure, or those of our third party vendors and other service providers or other third parties, including as a result of cyber attacks, which could disrupt our businesses, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs and cause losses; changes in accounting principles, policies or guidelines; changes in the assessment of whether a

deferred tax valuation allowance is necessary; our reliance on secondary sources such as FHLB advances, sales of securities and loans, federal funds lines of credit from correspondent banks and out-of-market time deposits, to meet our liquidity needs; loss of consumer confidence and economic disruptions resulting from terrorist activities or other military actions; and changes in the securities markets. Additional factors that could cause actual results to differ materially are discussed in the Company’s filings with the Securities and Exchange Commission ("SEC"), including without limitation its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and its Current Reports on Form 8-K. Information in this press release also contains forward-looking statements with respect to the recent merger of VantageSouth with and into the Company. These statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by such forward-looking statements, including without limitation: potential deposit attrition, higher than expected costs, customer loss and business disruption associated with business integration, including, without limitation, potential difficulties in maintaining relationships with key personnel, and technological integration. The forward-looking statements in this press release speak only as of the date of the press release, and the Company does not assume any obligation to update such forward-looking statements.



	Three Months Ended
(Dollars in thousands, except per share data)	June 30, 2014			March 31, 2014			December 31, 2013			September 30, 2013		June 30, 2013

Interest income
Loans	$	16,952		$	16,937		$	17,126		$	16,849	$	16,950
Investment securities	1,600			1,719			1,773			1,616		1,686
Federal funds sold and interest-earning deposits	16			10			4			5		15
Total interest income	18,568			18,666			18,903			18,470		18,651
Interest expense
Deposits	1,600			1,669			1,732			1,911		2,121
Short-term borrowings	211			214			165			143		60
Long-term debt	171			180			257			280		349
Total interest expense	1,982			2,063			2,154			2,334		2,530
Net interest income	16,586			16,603			16,749			16,136		16,121
Provision for (recovery of) loan losses	(891		)	(460		)	(3,017		)	40		55
Net interest income after provision for (recovery of) loan losses	17,477			17,063			19,766			16,096		16,066
Non-interest income
Service charges and fees on deposit accounts	1,243			1,224			1,264			1,336		1,317
Other service fees	1,264			1,025			1,066			1,259		1,401
Mortgage banking	769			1,022			1,162			1,713		2,546
Bank-owned life insurance	137			137			145			152		150
Gain (loss) on sales of available for sale securities	3			1,128			(2,884		)	253		272
Other	75			161			429			668		498
Total non-interest income	3,491			4,697			1,182			5,381		6,184
Non-interest expense
Salaries and employee benefits	7,367			7,917			7,854			7,780		7,953
Occupancy and equipment	1,758			1,746			2,049			2,001		1,951
Data processing	293			275			376			374		350
FDIC insurance premiums	239			151			433			363		642
Professional services	440			409			537			327		675
Foreclosed asset expenses	169			310			302			93		(174		)
Loan, collection, and repossession expense	47			97			118			203		201
Merger and conversion costs	649			1,352			—			—		—
Other	3,060			2,936			2,043			3,009		3,245
Total non-interest expense	14,022			15,193			13,712			14,150		14,843
Income before income taxes	6,946			6,567			7,236			7,327		7,407
Income tax expense	2,558			2,659			2,579			2,616		2,598
Net income	4,388			3,908			4,657			4,711		4,809
Dividends and accretion on preferred stock	608			559			421			421		590
Net income available to common stockholders	$	3,780		$	3,349		$	4,236		$	4,290	$	4,219

NET INCOME PER COMMON SHARE
Basic	$	0.27		$	0.24		$	0.30		$	0.30	$	0.30
Diluted	$	0.26		$	0.23		$	0.30		$	0.30	$	0.30

WEIGHTED AVERAGE COMMON SHARES
Weighted average common shares outstanding - basic	14,217,607			14,211,456			14,206,070			14,205,705		14,205,223
Weighted average common shares outstanding - diluted	14,279,164			14,269,453			14,259,809			14,249,152		14,223,604



	Three Months Ended
(Dollars in thousands, except per share data)	June 30, 2014			March 31, 2014			December 31, 2013			September 30, 2013			June 30, 2013

PERFORMANCE RATIOS (annualized)
Return on average assets	0.84		%	0.76		%	0.93		%	0.95		%	0.93		%
Return on average equity	7.96		%	7.29		%	9.31		%	9.74		%	9.63		%
Yield on earning assets, tax equivalent	4.47		%	4.61		%	4.54		%	4.48		%	4.50		%
Cost of interest-bearing liabilities	0.60		%	0.63		%	0.64		%	0.69		%	0.74		%
Net interest margin, tax equivalent	4.00		%	4.11		%	4.04		%	3.93		%	3.90		%
Efficiency ratio	69.84		%	71.33		%	76.47		%	65.76		%	66.55		%
Net loan charge-offs (recoveries)	(0.23		)%	0.32		%	(0.02		)%	0.58		%	0.49		%

Reconciliation of GAAP to Non-GAAP
OPERATING EARNINGS
Net income (GAAP)	$	4,388		$	3,908		$	4,657		$	4,711		$	4,809
Securities (gains) losses	(3		)	(1,128		)	2,884			(253		)	(272		)
Merger and conversion costs	649			1,352			—			—			—
Income tax effect of adjustments	(146		)	312			(1,120		)	100			106
Net operating earnings (Non-GAAP)	4,888			4,444			6,421			4,558			4,643
Dividends and accretion on preferred stock	608			559			421			421			590
Net operating earnings available to common stockholders (Non-GAAP)	$	4,280		$	3,885		$	6,000		$	4,137		$	4,053

Net operating earnings per common share:
Basic (Non-GAAP)	$	0.30		$	0.27		$	0.42		$	0.29		$	0.29
Diluted (Non-GAAP)	$	0.30		$	0.27		$	0.42		$	0.29		$	0.28

Net operating return on average assets	1.08		%	1.00		%	1.41		%	1.01		%	1.02		%
Net operating return on average equity	10.29		%	9.67		%	14.12		%	10.35		%	10.59		%

PRE-TAX, PRE-PROVISION OPERATING EARNINGS
Net income (GAAP)	$	4,388		$	3,908		$	4,657		$	4,711		$	4,809
Provision for (recovery of) loan losses	(891		)	(460		)	(3,017		)	40			55
Income tax expense	2,558			2,659			2,579			2,616			2,598
Pre-tax, pre-provision income	6,055			6,107			4,219			7,367			7,462
Securities (gains) losses	(3		)	(1,128		)	2,884			(253		)	(272		)
Merger and conversion costs	649			1,352			—			—			—
Pre-tax, pre-provision operating earnings (Non-GAAP)	$	6,701		$	6,331		$	7,103		$	7,114		$	7,190

OPERATING NON-INTEREST EXPENSE
Non-interest expense (GAAP)	$	14,022		$	15,193		$	13,712		$	14,150		$	14,843
Merger and conversion costs	(649		)	(1,352		)	—			—			—
Operating non-interest expense (Non-GAAP)	$	13,373		$	13,841		$	13,712		$	14,150		$	14,843

OPERATING EFFICIENCY RATIO
Efficiency ratio (GAAP)	69.84		%	71.33		%	76.47		%	65.76		%	66.55		%
Effect to adjust for securities gains	0.01		%	3.99		%	(10.59		)%	0.78		%	0.82		%
Effect to adjust for gain on acquisition	—		%	—		%	—		%	—		%	—		%
Effect to adjust for merger and conversion costs	(3.23		)%	(6.71		)%	—		%	—		%	—		%
Effect to adjust for restructuring costs	—		%	—		%	—		%	—		%	—		%
Operating efficiency ratio (Non-GAAP)	66.62		%	68.61		%	65.88		%	66.54		%	67.37		%



	Six Months Ended June 30,
(Dollars in thousands, except per share data)	2014			2013

Interest income
Loans	$	33,889		$	33,629
Investment securities	3,319			3,234
Federal funds sold and interest-earning deposits	26			63
Total interest income	37,234			36,926
Interest expense
Deposits	3,269			4,904
Short-term borrowings	425			153
Long-term debt	351			696
Total interest expense	4,045			5,753
Net interest income	33,189			31,173
Provision for (recovery of) loan losses	(1,351		)	292
Net interest income after provision for (recovery of) loan losses	34,540			30,881
Non-interest income
Service charges and fees on deposit accounts	2,467			2,586
Other service fees	2,289			2,327
Mortgage banking	1,791			5,834
Bank-owned life insurance	274			303
Gain on sales of available for sale securities	1,131			276
Other	236			514
Total non-interest income	8,188			11,840
Non-interest expense
Salaries and employee benefits	15,285			15,343
Occupancy and equipment	3,505			3,765
Data processing	568			744
FDIC insurance premiums	389			1,234
Professional services	850			974
Foreclosed asset expenses	478			(997		)
Loan, collection, and repossession expense	144			418
Merger and conversion costs	2,001			—
Other	5,995			6,576
Total non-interest expense	29,215			28,057
Income before income taxes	13,513			14,664
Income tax expense	5,217			5,206
Net income	8,296			9,458
Dividends and accretion on preferred stock	1,167			1,035
Net income available to common stockholders	$	7,129		$	8,423

NET INCOME PER COMMON SHARE
Basic	$	0.50		$	0.59
Diluted	$	0.50		$	0.59

WEIGHTED AVERAGE COMMON SHARES
Weighted average common shares outstanding - basic	14,214,549			14,200,264
Weighted average common shares outstanding - diluted	14,274,304			14,200,264



	Six Months Ended June 30,
(Dollars in thousands, except per share data)	2014			2013
PERFORMANCE RATIOS (annualized)
Return on average assets	0.80		%	0.92		%
Return on average equity	7.63		%	9.78		%
Yield on earning assets, tax equivalent	4.54		%	4.41		%
Cost of interest-bearing liabilities	0.62		%	0.82		%
Net interest margin, tax equivalent	4.06		%	3.73		%
Efficiency ratio	70.61		%	65.23		%
Net loan charge-offs	0.04		%	0.38		%

Reconciliation of GAAP to Non-GAAP
OPERATING EARNINGS
Net income (GAAP)	$	8,296		$	9,458
Securities gains	(1,131		)	(276		)
Merger and conversion costs	2,001			—
Income tax effect of adjustments	165			108
Net operating earnings (Non-GAAP)	9,331			9,290
Dividends and accretion on preferred stock	1,167			1,035
Net operating earnings available (loss attributable) to common stockholders (Non-GAAP)	$	8,164		$	8,255

Net operating earnings per common share:
Basic (Non-GAAP)	$	0.57		$	0.58
Diluted (Non-GAAP)	$	0.57		$	0.58

Net operating return on average assets	1.04		%	1.01		%
Net operating return on average equity	9.98		%	10.79		%

PRE-TAX, PRE-PROVISION OPERATING EARNINGS
Net income (GAAP)	$	8,296		$	9,458
Provision for (recovery of) loan losses	(1,351		)	292
Income tax expense	5,217			5,206
Pre-tax, pre-provision income	12,162			14,956
Securities gains	(1,131		)	(276		)
Merger and conversion costs	2,001			—
Pre-tax, pre-provision operating earnings (Non-GAAP)	$	13,032		$	14,680

OPERATING NON-INTEREST EXPENSE
Non-interest expense (GAAP)	$	29,215		$	28,057
Merger and conversion costs	(2,001		)	—
Operating non-interest expense (Non-GAAP)	$	27,214		$	28,057

OPERATING EFFICIENCY RATIO
Efficiency ratio (GAAP)	70.61		%	65.23		%
Effect to adjust for securities gains	1.98		%	0.42		%
Effect to adjust for gain on acquisition	—		%	—		%
Effect to adjust for merger and conversion costs	(4.97		)%	—		%
Effect to adjust for restructuring costs	—		%	—		%
Operating efficiency ratio (Non-GAAP)	67.62		%	65.65		%



	Ending Balances
(Dollars in thousands, except per share data)	June 30,			March 31,			December 31,			September 30,			June 30,
	2014			2014			2013			2013			2013
Assets
Cash and due from banks	$	32,159		$	32,254		$	32,226		$	32,417		$	28,104
Interest-earning deposits with banks	3,957			29,249			8,759			6,695			4,654
Federal funds sold	15			15			10			15			50
Investment securities available for sale	259,143			267,093			288,922			328,690			330,345
Loans held for sale	15,696			6,962			18,913			12,632			22,545
Loans	1,419,868			1,382,698			1,358,746			1,333,437			1,314,761
Allowance for loan losses	(16,449		)	(16,522		)	(18,063		)	(21,014		)	(22,924		)
Net loans	1,403,419			1,366,176			1,340,683			1,312,423			1,291,837
Federal Home Loan Bank stock	3,778			2,789			3,473			5,273			3,473
Premises and equipment, net	40,204			40,396			40,698			41,050			42,410
Bank-owned life insurance	27,306			27,169			27,032			26,888			26,736
Foreclosed assets	2,271			2,828			3,267			2,989			3,812
Deferred tax asset, net	16,955			20,305			23,425			26,588			29,225
Other intangible assets, net	1,665			1,818			1,974			2,133			2,301
Accrued interest receivable and other assets	16,315			16,433			16,645			15,724			16,423
Total assets	$	1,822,883		$	1,813,487		$	1,806,027		$	1,813,517		$	1,801,915

Liabilities
Deposits:
Non-interest demand	$	296,861		$	287,585		$	267,596		$	266,951		$	252,618
Interest-bearing demand	228,429			231,230			224,260			222,063			222,125
Money market and savings	468,809			473,351			469,298			454,439			464,313
Time	515,482			533,308			557,269			547,883			584,041
Total deposits	1,509,581			1,525,474			1,518,423			1,491,336			1,523,097
Short-term borrowings	72,879			49,083			43,260			85,129			30,915
Long-term debt	35,959			40,956			45,954			45,951			60,981
Accrued interest payable and other liabilities	10,706			9,198			13,920			12,229			12,306
Total liabilities	1,629,125			1,624,711			1,621,557			1,634,645			1,627,299

Stockholders' equity
Preferred stock, no par value	28,405			28,405			28,405			28,339			28,273
Common stock, $1.00 par value	14,380			14,381			14,384			14,384			14,384
Common stock warrant	1,850			1,850			1,850			1,850			1,850
Additional paid-in capital	187,264			187,317			187,118			186,994			186,869
Accumulated deficit	(40,163		)	(43,943		)	(47,292		)	(51,528		)	(55,818		)
Accumulated other comprehensive income (loss)	2,022			766			5			(1,167		)	(942		)
Total stockholders' equity	193,758			188,776			184,470			178,872			174,616
Total liabilities and stockholders' equity	$	1,822,883		$	1,813,487		$	1,806,027		$	1,813,517		$	1,801,915



	Ending Balances
	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in thousands, except per share data)	2014			2014			2013			2013			2013

COMMON SHARE DATA
Book value per common share	$	11.50		$	11.15		$	10.85		$	10.47		$	10.17
Tangible book value per common share	$	11.38		$	11.03		$	10.71		$	10.32		$	10.01
Ending shares outstanding	14,380,127			14,380,673			14,383,986			14,383,986			14,383,986

CAPITAL RATIOS
Tangible equity to tangible assets	10.55		%	10.32		%	10.12		%	9.76		%	9.69		%
Tangible common equity to tangible assets	8.99		%	8.75		%	8.54		%	8.19		%	8.00		%
Yadkin Financial Corporation:
Tier 1 leverage ratio	12.18		%	11.88		%	11.45		%	11.12		%	10.56		%
Tier 1 risk-based capital ratio	14.02		%	13.93		%	13.46		%	13.2		%	12.8		%
Total risk-based capital ratio	15.01		%	14.95		%	14.59		%	14.38		%	13.98		%
Yadkin Bank:
Tier 1 leverage ratio	12.07		%	11.71		%	11.24		%	10.88		%	10.3		%
Tier 1 risk-based capital ratio	13.89		%	13.73		%	13.21		%	12.92		%	12.49		%
Total risk-based capital ratio	14.95		%	14.82		%	14.41		%	14.17		%	13.74		%

ASSET QUALITY DATA
Nonperforming loans	$	18,982		$	15,082		$	15,393		$	17,874		$	19,698
Foreclosed assets	2,271			2,828			3,267			2,989			3,812
Total nonperforming assets	$	21,253		$	17,910		$	18,660		$	20,863		$	23,510

Allowance for loan losses to loans	1.15		%	1.19		%	1.31		%	1.56		%	1.71		%
Nonperforming loans to total loans	1.32		%	1.09		%	1.12		%	1.33		%	1.47		%
Nonperforming assets to total assets	1.17		%	0.99		%	1.03		%	1.15		%	1.30		%
Restructured loans not included in categories above	$	1,894		$	1,910		$	5,033		$	5,599		$	6,627

Reconciliation of GAAP to Non-GAAP

TANGIBLE COMMON EQUITY
Total stockholders' equity (GAAP)	$	193,758		$	188,776		$	184,470		$	178,872		$	174,616
Less: Preferred stock	28,405			28,405			28,405			28,405			28,405
Less: Goodwill and other intangible assets, net	1,665			1,818			1,974			2,133			2,301
Tangible common equity (Non-GAAP)	$	163,688		$	158,553		$	154,091		$	148,334		$	143,910



	Three months ended June 30, 2014						Three months ended March 31, 2014						Three months ended June 30, 2013
(Dollars in thousands)	Average Balance		Interest*		Yield/Cost*		Average Balance		Interest*		Yield/Cost*		Average Balance		Interest*		Yield/Cost*

Assets
Loans	$	1,404,273	$	16,979	4.85	%	$	1,371,694	$	16,966	5.02	%	$	1,325,313	$	16,978	5.14	%
Investment securities	262,951		1,860		2.84		286,094		2,046		2.90		353,837		2,041		2.31
Federal funds and other	22,808		16		0.28		16,794		10		0.24		17,741		15		0.34
Total interest-earning assets	1,690,032		18,855		4.47	%	1,674,582		19,022		4.61	%	1,696,891		19,034		4.50	%
Non-interest-earning assets	118,816						122,754						123,142
Total assets	$	1,808,848					$	1,797,336					$	1,820,033

Liabilities and Equity
Interest-bearing demand	$	227,031	$	41	0.07	%	$	221,867	$	56	0.10	%	$	214,216	$	46	0.09	%
Money market and savings	469,710		242		0.21		463,489		237		0.21		460,750		239		0.21
Time	527,444		1,317		1.00		548,673		1,376		1.02		607,172		1,835		1.23
Total interest-bearing deposits	1,224,185		1,600		0.52		1,234,029		1,669		0.55		1,282,138		2,120		0.67
Short-term borrowings	52,549		211		1.61		47,059		214		1.84		38,433		61		0.64
Long-term debt	37,495		171		1.83		42,565		180		1.72		60,947		348		2.32
Total interest-bearing liabilities	1,314,229		1,982		0.60	%	1,323,653		2,063		0.63	%	1,381,518		2,529		0.74	%
Non-interest-bearing deposits	294,596						276,878						251,482
Other liabilities	9,457						10,459						11,260
Total liabilities	1,618,282						1,610,990						1,644,260
Stockholders’ equity	190,565						186,346						175,774
Total liabilities and stockholders’ equity	$	1,808,847					$	1,797,336					$	1,820,034

Net interest income, taxable equivalent			$	16,873					$	16,959					$	16,505
Interest rate spread					3.87	%					3.98	%					3.76	%
Tax equivalent net interest margin					4.00	%					4.11	%					3.90	%

Percentage of average interest-earning assets to average interest-bearing liabilities					128.59	%					126.51	%					122.83	%
* Taxable equivalent basis



	Six months ended June 30, 2014						Six months ended June 30, 2013
(Dollars in thousands)	Average Balance		Interest*		Yield/Cost*		Average Balance		Interest*		Yield/Cost*

Assets
Loans	$	1,388,073	$	33,945	4.93	%	$	1,323,294	$	33,685	5.13	%
Investment securities	274,459		3,906		2.87		359,158		3,879		2.18
Federal funds and other	19,817		26		0.26		40,099		64		0.32
Total interest-earning assets	1,682,349		37,877		4.54	%	1,722,551		37,628		4.41	%
Non-interest-earning assets	120,775						125,861
Total assets	$	1,803,124					$	1,848,412

Liabilities and Equity
Interest-bearing demand	$	224,463	97		0.09	%	$	203,315	$	91	0.09	%
Money market and savings	466,617		479		0.21		453,645		468		0.21
Time	538,000		2,693		1.01		649,736		4,345		1.35
Total interest-bearing deposits	1,229,080		3,269		0.54		1,306,696		4,904		0.76
Short-term borrowings	49,819		425		1.72		39,620		154		0.78
Long-term debt	40,016		351		1.77		60,945		695		2.30
Total interest-bearing liabilities	1,318,915		4,045		0.62	%	1,407,261		5,753		0.82	%
Noninterest-bearing deposits	285,786						255,660
Other liabilities	9,956						11,822
Total liabilities	1,614,657						1,674,743
Stockholders’ equity	188,467						173,670
Total liabilities and stockholders’ equity	$	1,803,124					$	1,848,413

Net interest income, taxable equivalent			$	33,832					$	31,875
Interest rate spread					3.92	%					3.59	%
Tax equivalent net interest margin					4.06	%					3.73	%

Percentage of average interest-earning assets to average interest-bearing liabilities					127.56	%					122.40	%
* Taxable equivalent basis



	Three Months Ended
(Dollars in thousands, except per share data)	June 30, 2014		March 31, 2014		December 31, 2013		September 30, 2013		June 30, 2013

Interest income
Loans	$	19,803	$	19,906	$	20,206	$	20,348	$	20,376
Investment securities	1,992		1,985		2,360		1,846		2,005
Federal funds sold and interest-earning deposits	26		26		19		33		21
Total interest income	21,821		21,917		22,585		22,227		22,402
Interest expense
Deposits	1,657		1,659		1,661		1,621		1,619
Short-term borrowings	95		78		65		46		42
Long-term debt	1,029		1,031		1,048		654		313
Total interest expense	2,781		2,768		2,774		2,321		1,974
Net interest income	19,040		19,149		19,811		19,906		20,428
Provision for loan losses	464		1,290		757		1,280		1,492
Net interest income after provision for loan losses	18,576		17,859		19,054		18,626		18,936
Non-interest income
Service charges and fees on deposit accounts	1,487		1,315		1,407		1,512		1,525
Government-guaranteed lending	2,121		2,341		1,884		1,525		1,058
Mortgage banking	530		318		468		310		1,096
Bank-owned life insurance	389		306		397		324		310
Gain on sales of available for sale securities	217		—		—		—		123
Gain on acquisition	—		—		—		—		7,382
Other	523		387		397		866		743
Total non-interest income	5,267		4,667		4,553		4,537		12,237
Non-interest expense
Salaries and employee benefits	8,574		9,014		9,452		10,034		11,009
Occupancy and equipment	2,523		2,636		2,600		2,497		2,408
Data processing	991		1,030		1,096		1,105		1,075
FDIC insurance premiums	365		390		436		423		400
Professional services	594		544		780		598		914
Foreclosed asset expenses	151		263		10		201		79
Loan, collection, and repossession expense	350		679		802		909		792
Merger and conversion costs	1,968		1,209		599		477		11,961
Restructuring charges	93		836		—		—		—
Other	2,186		2,130		2,348		2,438		2,502
Total non-interest expense	17,795		18,731		18,123		18,682		31,140
Income before income taxes	6,048		3,795		5,484		4,481		33
Income tax expense (benefit)	2,504		1,681		2,220		2,997		(2,808		)
Net income	3,544		2,114		3,264		1,484		2,841
Dividends and accretion on preferred stock	—		377		711		708		705
Net income available (loss attributable) to common stockholders	$	3,544	$	1,737	$	2,553	$	776	$	2,136

NET INCOME PER COMMON SHARE
Basic	$	0.06	$	0.03	$	0.06	$	0.02	$	0.05
Diluted	$	0.06	$	0.03	$	0.06	$	0.02	$	0.05

WEIGHTED AVERAGE COMMON SHARES
Weighted average common shares outstanding - basic	55,259,830		52,075,323		46,032,153		46,021,308		45,916,707
Weighted average common shares outstanding - diluted	55,563,960		52,360,688		46,222,652		46,213,216		45,935,330



	Three Months Ended
(Dollars in thousands, except per share data)	June 30, 2014			March 31, 2014			December 31, 2013			September 30, 2013			June 30, 2013

PERFORMANCE RATIOS (annualized)
Return on average assets	0.67		%	0.41		%	0.63		%	0.29		%	0.58		%
Return on average equity	5.91		%	3.45		%	5.54		%	2.55		%	4.81		%
Yield on earning assets, tax equivalent	4.74		%	4.80		%	4.90		%	5.12		%	4.91		%
Cost of interest-bearing liabilities	0.67		%	0.69		%	0.59		%	0.51		%	0.76		%
Net interest margin, tax equivalent	4.13		%	4.19		%	4.39		%	4.67		%	4.24		%
Efficiency ratio	73.21		%	78.65		%	74.38		%	76.43		%	95.33		%
Net loan charge-offs	0.07		%	0.33		%	0.22		%	0.20		%	0.18		%

Reconciliation of GAAP to Non-GAAP
OPERATING EARNINGS
Net income (GAAP)	$	3,544		$	2,114		$	3,264		$	1,484		$	2,841
Securities gains	(217		)	—			—			—			(123		)
Gain on acquisition	—			—			—			—			(7,382		)
Merger and conversion costs	1,968			1,209			599			477			11,961
Restructuring charges	93			836			—			—			—
Income tax effect of adjustments	(387		)	(452		)	(24		)	(172		)	(4,484		)
Deferred tax asset revaluation from reduction in state income tax rates	—			—			—			1,218			—
Net operating earnings (Non-GAAP)	5,001			3,707			3,839			3,007			2,813
Dividends and accretion on preferred stock	—			377			711			708			705
Net operating earnings available to common stockholders (Non-GAAP)	$	5,001		$	3,330		$	3,128		$	2,299		$	2,108

Net operating earnings per common share:
Basic (Non-GAAP)	$	0.09		$	0.06		$	0.07		$	0.05		$	0.05
Diluted (Non-GAAP)	$	0.09		$	0.06		$	0.07		$	0.05		$	0.05

Net operating return on average assets	0.95		%	0.72		%	0.74		%	0.59		%	0.57		%
Net operating return on average equity	8.34		%	6.05		%	6.52		%	5.16		%	4.76		%

PRE-TAX, PRE-PROVISION OPERATING EARNINGS
Net income (GAAP)	$	3,544		$	2,114		$	3,264		$	1,484		$	2,841
Provision for loan losses	464			1,290			757			1,280			1,492
Income tax expense (benefit)	2,504			1,681			2,220			2,997			(2,808		)
Pre-tax, pre-provision income	6,512			5,085			6,241			5,761			1,525
Securities gains	(217		)	—			—			—			(123		)
Gain on acquisition	—			—			—			—			(7,382		)
Merger and conversion costs	1,968			1,209			599			477			11,961
Restructuring charges	93			836			—			—			—
Pre-tax, pre-provision operating earnings (Non-GAAP)	$	8,356		$	7,130		$	6,840		$	6,238		$	5,981

OPERATING NON-INTEREST EXPENSE
Non-interest expense (GAAP)	$	17,795		$	18,731		$	18,123		$	18,682		$	31,140
Merger and conversion costs	(1,968		)	(1,209		)	(599		)	(477		)	(11,961		)
Restructuring charges	(93		)	(836		)	—			—			—
Operating non-interest expense (Non-GAAP)	$	15,734		$	16,686		$	17,524		$	18,205		$	19,179

OPERATING EFFICIENCY RATIO
Efficiency ratio (GAAP)	73.21		%	78.65		%	74.38		%	76.43		%	95.33		%
Effect to adjust for securities gains	0.66		%	—		%	—		%	—		%	0.36		%
Effect to adjust for gain on acquisition	—		%	—		%	—		%	—		%	27.84		%
Effect to adjust for merger and conversion costs	(8.17		)%	(5.08		)%	(2.45		)%	(1.95		)%	(47.30		)%
Effect to adjust for restructuring costs	(0.39		)%	(3.51		)%	—		%	—		%	—		%
Operating efficiency ratio (Non-GAAP)	65.31		%	70.06		%	71.93		%	74.48		%	76.23		%



	Six Months Ended June 30,
(Dollars in thousands, except per share data)	2014		2013

Interest income
Loans	$	39,709	$	31,073
Investment securities	3,977		2,820
Federal funds sold and interest-earning deposits	52		37
Total interest income	43,738		33,930
Interest expense
Deposits	3,316		2,921
Short-term borrowings	173		54
Long-term debt	2,060		583
Total interest expense	5,549		3,558
Net interest income	38,189		30,372
Provision for loan losses	1,754		3,432
Net interest income after provision for loan losses	36,435		26,940
Non-interest income
Service charges and fees on deposit accounts	2,802		2,040
Government-guaranteed lending	4,462		2,177
Mortgage banking	848		1,487
Bank-owned life insurance	695		505
Gain on sales of available for sale securities	217		1,215
Gain on acquisition	—		7,382
Other	910		893
Total non-interest income	9,934		15,699
Non-interest expense
Salaries and employee benefits	17,588		17,000
Occupancy and equipment	5,159		3,955
Data processing	2,021		1,719
FDIC insurance premiums	755		627
Professional services	1,138		1,411
Foreclosed asset expenses	414		262
Loan, collection, and repossession expense	1,029		1,253
Merger and conversion costs	3,177		13,562
Restructuring charges	929		—
Other	4,316		4,018
Total non-interest expense	36,526		43,807
Income (loss) before income taxes	9,843		(1,168		)
Income tax expense (benefit)	4,185		(3,203		)
Net income	5,658		2,035
Dividends and accretion on preferred stock	377		1,074
Net income available to common stockholders	$	5,281	$	961

NET INCOME PER COMMON SHARE
Basic	$	0.10	$	0.02
Diluted	$	0.10	$	0.02

WEIGHTED AVERAGE COMMON SHARES
Weighted average common shares outstanding - basic	53,676,373		40,865,433
Weighted average common shares outstanding - diluted	53,971,712		40,883,775



	Six Months Ended June 30,
(Dollars in thousands, except per share data)	2014			2013
PERFORMANCE RATIOS (annualized)
Return on average assets	0.54		%	0.27		%
Return on average equity	4.67		%	2.00		%
Yield on earning assets, tax equivalent	4.77		%	5.06		%
Cost of interest-bearing liabilities	0.68		%	0.60		%
Net interest margin, tax equivalent	4.16		%	4.53		%
Efficiency ratio	75.90		%	95.09		%
Net loan charge-offs	0.19		%	0.19		%

Reconciliation of GAAP to Non-GAAP
OPERATING EARNINGS
Net income (GAAP)	$	5,658		$	2,035
Securities gains	(217		)	(1,215		)
Gain on acquisition	—			(7,382		)
Merger and conversion costs	3,177			13,562
Restructuring charges	929			—
Income tax effect of adjustments	(840		)	(4,609		)
Net operating earnings (Non-GAAP)	8,707			2,391
Dividends and accretion on preferred stock	377			1,074
Net operating earnings available to common stockholders (Non-GAAP)	$	8,330		$	1,317

Net operating earnings per common share:
Basic (Non-GAAP)	$	0.16		$	0.03
Diluted (Non-GAAP)	$	0.15		$	0.03

Net operating return on average assets	0.83		%	0.31		%
Net operating return on average equity	7.18		%	2.35		%

PRE-TAX, PRE-PROVISION OPERATING EARNINGS
Net income (GAAP)	$	5,658		$	2,035
Provision for loan losses	1,754			3,432
Income tax expense (benefit)	4,185			(3,203		)
Pre-tax, pre-provision income	11,597			2,264
Securities gains	(217		)	(1,215		)
Gain on acquisition	—			(7,382		)
Merger and conversion costs	3,177			13,562
Restructuring charges	836			836
Pre-tax, pre-provision operating earnings (Non-GAAP)	$	15,393		$	8,065

OPERATING NON-INTEREST EXPENSE
Non-interest expense (GAAP)	$	36,526		$	43,807
Merger and conversion costs	(3,177		)	(13,562		)
Restructuring charges	(929		)	—
Operating non-interest expense (Non-GAAP)	$	32,420		$	30,245

OPERATING EFFICIENCY RATIO
Efficiency ratio (GAAP)	75.90		%	95.09		%
Effect to adjust for securities gains	0.35		%	2.57		%
Effect to adjust for gain on acquisition	—		%	18.14		%
Effect to adjust for merger and conversion costs	(6.65		)%	(35.09		)%
Effect to adjust for restructuring costs	(1.93		)%	—		%
Operating efficiency ratio (Non-GAAP)	67.67		%	80.71		%



	Ending Balances
(Dollars in thousands, except per share data)	June 30,			March 31,			December 31,			September 30,			June 30,
	2014			2014			2013			2013			2013
Assets
Cash and due from banks	$	38,770		$	30,969		$	29,080		$	37,681		$	29,264
Interest-earning deposits with banks	76,125			42,474			71,699			47,954			57,689
Federal funds sold	—			—			—			—			855
Investment securities available for sale	394,492			407,231			404,388			403,900			376,536
Investment securities held to maturity	3,119			3,119			500			208			200
Loans held for sale	10,658			11,158			8,663			7,216			21,009
Loans	1,368,568			1,381,926			1,389,666			1,353,550			1,324,171
Allowance for loan losses	(7,451		)	(7,213		)	(7,043		)	(7,034		)	(6,425		)
Net loans	1,361,117			1,374,713			1,382,623			1,346,516			1,317,746
Federal Home Loan Bank stock	8,950			8,455			8,929			8,029			6,904
Premises and equipment, net	44,212			44,350			44,875			42,306			43,052
Bank-owned life insurance	48,700			33,386			33,148			32,896			32,642
Foreclosed assets	9,786			9,505			10,518			11,501			11,327
Deferred tax asset, net	48,783			52,276			54,867			55,960			59,099
Goodwill	26,254			26,254			26,254			26,254			26,254
Other intangible assets, net	5,432			5,657			5,883			6,113			6,343
Accrued interest receivable and other assets	63,071			56,643			38,130			19,226			19,757
Total assets	$	2,139,469		$	2,106,190		$	2,119,557		$	2,045,760		$	2,008,677

Liabilities
Deposits:
Non-interest demand	$	234,370		$	198,710		$	220,659		$	208,736		$	197,229
Interest-bearing demand	348,075			356,134			351,921			339,973			344,515
Money market and savings	473,258			472,968			467,814			458,214			482,672
Time	620,336			630,132			634,915			615,616			630,283
Total deposits	1,676,039			1,657,944			1,675,309			1,622,539			1,654,699
Short-term borrowings	140,500			129,500			126,500			100,500			68,002
Long-term debt	69,933			69,961			72,921			75,880			45,341
Accrued interest payable and other liabilities	12,914			11,764			12,919			16,259			11,621
Total liabilities	1,899,386			1,869,169			1,887,649			1,815,178			1,779,663

Stockholders' equity
Preferred stock, Series A, no par value	—			—			24,894			24,833			24,774
Preferred stock, Series B, no par value	—			—			17,891			17,776			17,663
Common stock, $0.001 par value	55			55			46			46			46
Common stock warrant	—			1,457			1,457			1,457			1,457
Additional paid-in capital	233,010			233,608			188,908			188,658			188,408
Retained earnings (accumulated deficit)	8,166			4,622			2,885			333			(443		)
Accumulated other comprehensive loss	(1,148		)	(2,721		)	(4,173		)	(2,521		)	(2,891		)
Total stockholders' equity	240,083			237,021			231,908			230,582			229,014
Total liabilities and stockholders' equity	$	2,139,469		$	2,106,190		$	2,119,557		$	2,045,760		$	2,008,677



	Ending Balances
	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in thousands, except per share data)	2014			2014			2013			2013			2013

COMMON SHARE DATA
Book value per common share	$	4.34		$	4.29		$	4.11		$	4.08		$	4.05
Tangible book value per common share	$	3.77		$	3.71		$	3.41		$	3.38		$	3.34
Ending shares outstanding	55,269,712			55,260,170			46,037,685			46,037,808			46,038,808

CAPITAL RATIOS
Tangible equity to tangible assets	9.89		%	9.89		%	9.57		%	9.84		%	9.94		%
Tangible common equity to tangible assets	9.89		%	9.89		%	7.52		%	7.73		%	7.79		%
VantageSouth Bancshares, Inc.:
Tier 1 leverage ratio	8.67		%	8.54		%	8.47		%	8.30		%	8.28		%
Tier 1 risk-based capital ratio	10.31		%	10.10		%	9.89		%	9.83		%	10.26		%
Total risk-based capital ratio	13.37		%	13.17		%	12.97		%	12.99		%	11.15		%
VantageSouth Bank:
Tier 1 leverage ratio	10.31		%	10.14		%	10.16		%	9.95		%	8.26		%
Tier 1 risk-based capital ratio	12.26		%	12.00		%	11.85		%	11.78		%	10.22		%
Total risk-based capital ratio	13.12		%	12.85		%	12.70		%	12.66		%	11.11		%

ASSET QUALITY DATA
Nonperforming loans	$	20,928		$	20,694		$	20,925		$	18,911		$	15,116
Foreclosed assets	9,786			9,505			10,823			11,806			11,632
Total nonperforming assets	$	30,714		$	30,199		$	31,748		$	30,717		$	26,748

Allowance for loan losses to loans	0.54		%	0.52		%	0.51		%	0.52		%	0.49		%
Nonperforming loans to total loans	1.53		%	1.50		%	1.51		%	1.40		%	1.14		%
Nonperforming assets to total assets	1.44		%	1.43		%	1.50		%	1.50		%	1.33		%
Restructured loans not included in categories above	$	4,000		$	985		$	534		$	542		$	550

Reconciliation of GAAP to Non-GAAP

ADJUSTED ALLOWANCE FOR LOAN LOSSES
Allowance for loan losses (GAAP)	$	7,451		$	7,213		$	7,043		$	7,034		$	6,425
Net acquisition accounting fair value discounts to loans	25,624			27,906			31,152			34,264			42,783
Adjusted allowance for loan losses	33,075			35,119			38,195			41,298			49,208
Loans	$	1,368,568		$	1,381,926		$	1,389,666		$	1,353,550		$	1,324,171
Adjusted allowance for loan losses to loans (Non-GAAP)	2.42		%	2.54		%	2.75		%	3.05		%	3.72		%

TANGIBLE COMMON EQUITY
Total stockholders' equity (GAAP)	$	240,083		$	237,021		$	231,908		$	230,582		$	229,014
Less: Preferred stock	—			—			42,785			42,609			42,437
Less: Goodwill and other intangible assets, net	31,686			31,911			32,137			32,367			32,597
Tangible common equity (Non-GAAP)	$	208,397		$	205,110		$	156,986		$	155,606		$	153,980



	Three months ended June 30, 2014						Three months ended March 31, 2014						Three months ended June 30, 2013
(Dollars in thousands)	Average Balance		Interest*		Yield/Cost*		Average Balance		Interest*		Yield/Cost*		Average Balance		Interest*		Yield/Cost*

Assets
Loans	$	1,390,855	$	19,803	5.71	%	$	1,396,881	$	19,906	5.78	%	$	1,316,237	$	20,376	6.21	%
Investment securities	404,173		2,010		1.99		407,831		1,990		1.98		394,398		2,008		2.04
Federal funds and other	54,681		26		0.19		49,177		26		0.21		43,719		21		0.19
Total interest-earning assets	1,849,709		21,839		4.74	%	1,853,889		21,922		4.80	%	1,754,354		22,405		5.12	%
Non-interest-earning assets	271,356						245,914						225,912
Total assets	$	2,121,065					$	2,099,803					$	1,980,266

Liabilities and Equity
Interest-bearing demand	$	351,204	$	150	0.17	%	$	348,047	$	180	0.21	%	$	333,215	$	183	0.22	%
Money market and savings	469,848		313		0.27		469,288		349		0.30		484,685		346		0.29
Time	630,931		1,194		0.76		630,840		1,130		0.73		620,441		1,090		0.70
Total interest-bearing deposits	1,451,983		1,657		0.46		1,448,175		1,659		0.46		1,438,341		1,619		0.45
Short-term borrowings	140,819		95		0.27		116,900		78		0.27		58,292		42		0.29
Long-term debt	69,946		1,029		5.90		71,873		1,031		5.82		45,465		313		2.76
Total interest-bearing liabilities	1,662,748		2,781		0.67	%	1,636,948		2,768		0.69	%	1,542,098		1,974		0.51	%
Non-interest-bearing deposits	206,833						204,156						192,459
Other liabilities	11,080						10,259						8,846
Total liabilities	1,880,661						1,851,363						1,743,403
Stockholders’ equity	240,404						248,440						236,863
Total liabilities and stockholders’ equity	$	2,121,065					$	2,099,803					$	1,980,266

Net interest income, taxable equivalent			$	19,058					$	19,154					$	20,431
Interest rate spread					4.07	%					4.11	%					4.61	%
Tax equivalent net interest margin					4.13	%					4.19	%					4.67	%

Percentage of average interest-earning assets to average interest-bearing liabilities					111.24	%					113.25	%					113.76	%
* Taxable equivalent basis



	Six months ended June 30, 2014							Six months ended June 30, 2013
(Dollars in thousands)	Average Balance		Interest*			Yield/Cost*		Average Balance		Interest*		Yield/Cost*

Assets
Loans	$	1,393,852	$	39,709		5.74	%	$	1,049,646	$	31,073	5.97	%
Investment securities	405,992		4,000			1.99		268,589		2,866		2.15
Federal funds and other	51,944		52			0.20		36,672		37		0.20
Total interest-earning assets	1,851,788		43,761			4.77	%	1,354,907		33,976		5.06	%
Non-interest-earning assets	258,704							180,565
Total assets	$	2,110,492						$	1,535,472

Liabilities and Equity
Interest-bearing demand	$	349,634	329			0.19	%	$	258,441	$	323	0.25	%
Money market and savings	469,570		662			0.28		374,801		689		0.37
Time	630,886		2,325			0.74		491,845		1,909		0.78
Total interest-bearing deposits	1,450,090		3,316		—	0.46		1,125,087		2,921		0.52
Short-term borrowings	128,925		173			0.27		32,751		54		0.33
Long-term debt	70,905		2,060			5.86		34,333		583		3.42
Total interest-bearing liabilities	1,649,920		5,549			0.68	%	1,192,171		3,558		0.60	%
Noninterest-bearing deposits	205,502							130,215
Other liabilities	10,671							7,634
Total liabilities	1,866,093							1,330,020
Stockholders’ equity	244,399							205,452
Total liabilities and stockholders’ equity	$	2,110,492						$	1,535,472

Net interest income, taxable equivalent			$	38,212						$	30,418
Interest rate spread						4.09	%					4.46	%
Tax equivalent net interest margin						4.16	%					4.53	%

Percentage of average interest-earning assets to average interest-bearing liabilities						112.24	%					113.65	%
* Taxable equivalent basis



	Nonperforming Loan Analysis
(Dollars in thousands)	June 30, 2014				March 31, 2014
Loan Type	Outstanding Balance		% of Total Loans		Outstanding Balance		% of Total Loans
Construction/land development	$	1,628	0.11	%	$	1,595	0.12	%
Residential construction	577		0.04	%	586		0.04	%
HELOC	1,012		0.07	%	904		0.07	%
1-4 Family Residential	4,576		0.32	%	2,682		0.19	%
Commercial real estate	8,148		0.57	%	7,797		0.56	%
Commercial & Industrial	2,787		0.19	%	1,245		0.09	%
Consumer & Other	254		0.02	%	272		0.02	%
Total	$	18,982	1.32	%	$	15,081	1.09	%



(Dollars in thousands)	Non-PCI Loans			PCI Loans			Total

Q2 2014:
Balance at April 1, 2014	$	5,164		$	2,049		$	7,213
Net charge-offs	(226		)	—			(226		)
Provision for loan losses	431			33			464
Balance at June 30, 2014	$	5,369		$	2,082		$	7,451

Q1 2014:
Balance at January 1, 2014	$	4,682		$	2,361		$	7,043
Net charge-offs	(1,120		)	—			(1,120		)
Provision for loan losses	1,602			(312		)	1,290
Balance at March 31, 2014	$	5,164		$	2,049		$	7,213



	Yadkin						VantageSouth
	Q2 2014			Q1 2014			Q2 2014			Q1 2014
Pre-tax, pre-provision operating earnings (millions)	$	6.70		$	6.33		$	8.36		$	7.13
Annualized operating return on average assets	1.08		%	1.00		%	0.95		%	0.72		%
Annualized operating return on average equity	10.29		%	9.67		%	8.34		%	6.05		%
Operating efficiency ratio	66.62		%	68.61		%	65.31		%	70.06		%
Operating earnings per diluted common share	$	0.30		$	0.27		$	0.09		$	0.06
Net loan charge-offs	(0.23		)%	0.32		%	0.07		%	0.33		%
Annualized net loan growth	10.93		%	7.71		%	(3.99		)%	(1.52		)%
Taxable equivalent net interest margin	4.00		%	4.11		%	4.13		%	4.19		%
Tangible common equity to tangible assets	8.99		%	8.75		%	9.89		%	9.89		%