10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

ý    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2012

¨    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO ___________

Commission File Number 000-32951

CRESCENT FINANCIAL BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

Delaware	45-2915089
(State or other jurisdiction of Incorporation	(IRS Employer Identification Number)
or organization)

3600 Glenwood Avenue, Suite 300

Raleigh, North Carolina 27612

(Address of principal executive offices)

(Zip Code)

(919) 659-9000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý         No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 

Yes ý       No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨No ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

Common Stock, $0.001 par value, 28,379,445 shares outstanding as of November13, 2012.

CRESCENT FINANCIAL BANCSHARES, INC. AND SUBSIDIARY

TABLE OF CONTENTS

		Page No.
Part I.	FINANCIAL INFORMATION
Item 1 -	Financial Statements (Unaudited)
	Consolidated Balance Sheets - September 30, 2012 and December 31, 2011	3
	Consolidated Statements of Operations - Three and Nine Months Ended September 30, 2012 (Successor) and  September 30, 2011 (Predecessor)	4
	Consolidated Statements of Comprehensive Income (Loss) - Three and Nine Months Ended September 30, 2012 (Successor) and  September 30, 2011 (Predecessor)	5
	Consolidated Statement of Changes in Stockholders’ Equity - Nine Months Ended September 30, 2012 (Successor)	6
	Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2012 (Successor) and  September 30, 2011 (Predecessor)	7
	Condensed Notes to Consolidated Financial Statements	8
Item 2 -	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3 -	Quantitative and Qualitative Disclosures about Market Risk	50
Item 4 -	Controls and Procedures	50
Part II.	Other Information
Item 1 -	Legal Proceedings	51
Item 1a -	Risk Factors	51
Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3 -	Defaults Upon Senior Debt	51
Item 4 -	Mine Safety Disclosures	51
Item 5 -	Other Information	51
Item 6 -	Exhibits	52

Part I. Financial Information

Item 1 - Financial Statements

CRESCENT FINANCIAL BANCSHARES, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS (Unaudited)

	September 30, 2012			December 31, 2011*
	(thousands, except share data)
Assets
Cash and due from banks	$	9,249		$	8,844
Interest-earning deposits with banks	1,702			1,773
Federal funds sold	3,935			14,745
Investment securities available for sale, at fair value	132,953			143,504
Mortgage loans held for sale	7,023			3,841
Loans	540,946			551,392
Allowance for loan losses	(2,264		)	(227		)
Net loans	538,682			551,165
Federal Home Loan Bank stock, at cost	1,255			8,669
Premises and equipment, net	10,684			10,286
Bank owned life insurance	19,800			19,261
Foreclosed assets	3,828			9,017
Deferred tax asset, net	30,913			31,517
Goodwill	23,110			23,110
Other intangible assets, net	2,036			2,230
Accrued interest receivable and other assets	8,594			8,345
Total assets	$	793,764		$	836,307
Liabilities
Deposits:
Demand	$	86,454		$	91,215
Savings	38,780			46,840
Money market and NOW	247,772			226,584
Time	260,893			309,779
Total deposits	633,899			674,418
Long-term debt	12,326			12,216
Accrued interest payable and other liabilities	4,696			6,615
Total liabilities	650,921			693,249
Stockholders’ Equity
Preferred stock, no par value, 5,000,000 shares authorized, 24,900 shares issued and outstanding at both September 30, 2012 and December 31, 2011	24,601			24,442
Common stock, $0.001 par value, 75,000,000 shares authorized; 28,379,445 and 28,412,059 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively	28			28
Common stock warrants	1,325			1,325
Additional paid-in capital	117,459			117,434
Accumulated deficit	(2,292		)	(182		)
Accumulated other comprehensive income	1,722			11
Total stockholders' equity	142,843			143,058
Total liabilities and stockholders' equity	$	793,764		$	836,307

*     Derived from audited consolidated financial statements.

See accompanying Notes to Consolidated Financial Statements

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CRESCENT FINANCIAL BANCSHARES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three and Nine Months Ended September 30, 2012 (Successor) and September 30, 2011 (Predecessor)

	Successor Company			Predecessor Company			Successor Company			Predecessor Company
	Three months ended September 30, 2012			Three months ended September 30, 2011			Nine months ended September 30, 2012			Nine months ended September 30, 2011
	(thousands, except share and per share data)
Interest income
Loans	$	7,953		$	9,030		$	24,137		$	27,130
Investment securities available for sale	893			1,836			2,787			5,325
Federal funds sold and interest-earning deposits	10			18			48			75
Total interest income	8,856			10,884			26,972			32,530
Interest expense
Deposits	992			2,719			3,242			9,199
Short-term borrowings	—			21			2			58
Long-term debt	250			1,387			814			4,135
Total interest expense	1,242			4,127			4,058			13,392
Net interest income	7,614			6,757			22,914			19,138
Provision for loan losses	958			4,452			3,730			14,511
Net interest income after provision for loan losses	6,656			2,305			19,184			4,627
Non-interest income
Mortgage banking income	1,066			475			2,411			900
Service charges and fees on deposit accounts	425			470			1,315			1,374
Earnings on bank owned life insurance	215			215			622			644
Gain (loss) on sale of available for sale securities	483			9			648			299
Other	133			275			658			345
Total non-interest income	2,322			1,444			5,654			3,562
Non-interest expense
Salaries and employee benefits	4,263			3,140			12,099			9,624
Occupancy and equipment	1,159			968			3,251			2,959
Data processing	546			447			1,568			1,317
FDIC deposit insurance premium	159			292			678			1,117
Professional services	1,405			646			3,193			2,042
Net loss on foreclosed assets	191			291			196			1,643
Other loan related expense	411			378			1,272			1,165
Other	704			591			2,135			1,817
Total non-interest expense	8,838			6,753			24,392			21,684
Income (loss) before income taxes	140			(3,004		)	446			(13,495		)
Income taxes	94			—			109			—
Net income (loss)	46			(3,004		)	337			(13,495		)
Effective dividend on preferred stock	367			442			1,124			1,306
Net loss attributable to common shareholders	$	(321	)	$	(3,446	)	$	(787	)	$	(14,801	)
Net loss per common share
Basic	$	(0.01	)	$	(0.36	)	$	(0.03	)	$	(1.54	)
Diluted	$	(0.01	)	$	(0.36	)	$	(0.03	)	$	(1.54	)
Weighted average common shares outstanding
Basic	28,361,357			9,587,324			28,361,159			9,585,056
Diluted	28,361,357			9,587,324			28,361,159			9,585,056

See accompanying Notes to Consolidated Financial Statements

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CRESCENT FINANCIAL BANCSHARES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

Three and Nine Months Ended September 30, 2012 (Successor) and September 30, 2011 (Predecessor)

	Successor Company			Predecessor Company			Successor Company			Predecessor Company
	Three months ended September 30, 2012			Three months ended September 30, 2011			Nine months ended September 30, 2012			Nine months ended September 30, 2011
	(thousands)
Net income (loss)	$	46		$	(3,004	)	$	337		$	(13,495	)
Other comprehensive income (loss)
Securities available for sale:
Unrealized holding gains on available for sale securities	1,806			768			3,878			2,333
Tax effect	(696		)	(296		)	(1,495		)	(899		)
Reclassification of gains on sale of securities recognized in earnings	(483		)	(10		)	(648		)	(299		)
Tax effect	186			4			250			115
Net of tax amount	813			466			1,985			1,250
Cash flow hedging:
Unrealized gains (losses) on cash flow hedges	(445		)	112			(445		)	186
Tax effect	171			(43		)	171			(72		)
Net of tax amount	(274		)	69			(274		)	114
Other comprehensive income	539			535			1,711			1,364
Total comprehensive income (loss)	$	585		$	(2,469	)	$	2,048		$	(12,131	)

See accompanying Notes to Consolidated Financial Statements

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CRESCENT FINANCIAL BANCSHARES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited)

Nine Months Ended September 30, 2012 (Successor)

								Common		Additional					Accumulated Other		Total
	Preferred Stock			Common Stock				Stock		Paid-In		Accumulated			Comprehensive		Stockholders’
	Shares	Amount		Shares		Amount		Warrant		Capital		Deficit			Income		Equity
	(thousands, except share data)
Balance at December 31, 2011	24,900	$	24,442	28,412,059		$	28	$	1,325	$	117,434	$	(182	)	$	11	$	143,058
Net income	—	—		—		—		—		—		337			—		337
Other comprehensive income	—	—		—		—		—		—		—			1,711		1,711
Stock based compensation expense	—	—		—		—		—		25		—			—		25
Restricted stock, forfeited	—	—		(33,501	)	—		—		—		—			—		—
Stock options exercised	—	—		887		—		—		—		—			—		—
Accretion of discount on preferred stock	—	159		—		—		—		—		(159		)	—		—
Preferred stock dividends	—	—		—		—		—		—		(2,288		)	—		(2,288		)
Balance September 30, 2012	24,900	$	24,601	28,379,445		$	28	$	1,325	$	117,459	$	(2,292	)	$	1,722	$	142,843

See accompanying Notes to Consolidated Financial Statements

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CRESCENT FINANCIAL BANCSHARES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Nine Months Ended September 30, 2012 (Successor) and September 30, 2011 (Predecessor)

	Successor Company			Predecessor Company
	September 30, 2012			September 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES	(thousands)
Net income (loss)	$	337		$	(13,495	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation	731			740
Stock based compensation	25			98
Provision for loan losses	3,730			14,511
Accretion of purchased loans	(13,723		)	—
Amortization of core deposit intangible	194			100
Amortization of premium on time deposits	(2,438		)	—
Accretion of discount on long-term debt	110			—
Gain on mortgage loan commitments	(602		)	(187		)
Net gain on sales of mortgage loans	(1,687		)	(499		)
Originations of mortgage loans held for sale	(85,764		)	(37,992		)
Proceeds from sales of mortgage loans	84,269			40,810
Net increase in cash surrender value of bank owned life insurance	(539		)	(585		)
Deferred income taxes	109			—
Gain on sale of available for sale securities	(648		)	(299		)
Net amortization of premiums on available for sale securities	373			1,582
Net loss on disposal of and wrtiedowns to foreclosed assets	196			1,636
Loss on disposal of premises and equipment	—			1
Gains from change in fair value of interest rate swaps	(178		)	—
Change in assets and liabilities:
(Increase) decrease in accrued interest receivable	(1,354		)	711
(Increase) decrease in other assets	683			4,496
Increase (decrease) in accrued interest payable	(350		)	3
Increase (decrease) in other liabilities	(1,391		)	523
Net cash provided by (used in) operating activities	(17,917		)	12,154
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investment securities available for sale	(47,689		)	(83,826		)
Principal repayments of investment securities available for sale	11,454			28,041
Proceeds from sales of securities available for sale	50,291			21,520
Proceeds from disposal of foreclosed assets	7,005			5,080
Redemption of Federal Home Loan Bank stock	7,414			1,365
Loan originations and principal collections, net	5,655			32,024
Proceeds from sales of loans	14,809			11,404
Purchases of premises and equipment	(1,129		)	(142		)
Net cash provided by investing activities	47,810			15,466
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits:
Demand	(4,761		)	8,695
Savings	(8,060		)	(14,642		)
Money market and NOW	21,188			6,119
Time deposits	(46,448		)	(38,381		)
Net decrease in short-term borrowings	—			(2,000		)
Net decrease in long-term debt	—			(5,000		)
Dividends paid on preferred stock	(2,288		)	—
Net cash used in financing activities	(40,369		)	(45,209		)
Net change in cash and cash equivalents	(10,476		)	(17,589		)
Cash and cash equivalents, beginning of period	25,362			49,106
Cash and cash equivalents, end of period	$	14,886		$	31,517
SUPPLEMENTAL DISCLOSURES:
Cash payments for:
Interest	$	6,409		$	13,389
Income taxes	—			—
Noncash investing activities:
Transfers of loans to foreclosed assets	$	2,012		$	4,834

See accompanying Notes to Consolidated Financial Statements

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CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

Note A – Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Crescent Financial Bancshares, Inc. (the “Company”) and its wholly-owned subsidiary, Crescent State Bank (“CSB” or the “Bank”). The interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). They do not include all of the information and footnotes required by such accounting principles for complete financial statements, and therefore should be read in conjunction with the audited consolidated financial statements and accompanying footnotes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (the “Company’s 2011 Form 10-K”).

In the opinion of management, all adjustments necessary for a fair presentation of the financial position and results of operations for the periods presented have been included, and all significant intercompany transactions have been eliminated in consolidation. Results of operations for the three and nine month periods ended September 30, 2012 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2012. The consolidated balance sheet at December 31, 2011 has been derived from the audited consolidated financial statements contained in the Company’s 2011 Form 10-K.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Certain amounts for prior periods have been reclassified to conform with statement presentations for 2012. The reclassifications have no effect on shareholders’ equity or net income as previously reported. Fair values are subject to refinement for up to one year after the closing date of the transaction as additional information regarding closing date fair values becomes available. During 2012, adjustments were made based on additional information regarding the acquisition date fair values. These adjustments were made retroactive to the fourth quarter of 2011. A description of the accounting policies followed by the Company are as set forth in Note B of the Notes to Consolidated Financial Statements in the Company’s 2011 Form 10-K.

Note B – Mergers and Acquisitions

ECB Bancorp, Inc. Merger Agreement

On September 25, 2012, the Company and ECB Bancorp, Inc. ("ECB") entered into an Agreement and Plan of Merger (the “ECB Merger Agreement”). Pursuant to the ECB Merger Agreement, ECB will merge with and into the Company so that the Company is the surviving bank holding corporation in the merger (the “Merger”). Immediately following the Merger, The East Carolina Bank, a North Carolina banking corporation and a wholly-owned subsidiary of ECB, will be merged with and into Crescent State Bank, a North Carolina banking corporation and a wholly-owned subsidiary of the Company. At the effective time of the Merger, each share of ECB's outstanding common stock, par value $3.50 per share, will be converted into the right to receive 3.55 shares of the Company's common stock, par value $0.001 per share. The completion of the merger is subject to all required regulatory and stockholder approvals.

ECB is a bank holding company, headquartered in Engelhard, North Carolina, whose wholly-owned subsidiary, The East Carolina Bank, is a state-chartered, community bank. The Bank has 25 branch offices in eastern North Carolina stretching from the Virginia to South Carolina state lines east of Interstate 95.

VantageSouth Bank Merger Agreement

On July 27, 2012, the Company filed an application with the Bank’s regulators to merge VantageSouth Bank, which is 100% owned by Piedmont Community Bank Holdings, Inc. (“Piedmont”), into CSB. Additional information relating to Piedmont’s ownership interest in the Company is found in the “Piedmont Investment” section of this Note B. On August 10, 2012, an Agreement and Plan of Merger (“Merger Agreement”) was entered into by the Company, CSB, and VantageSouth Bank to merge VantageSouth Bank into CSB in a share exchange based on the Company’s volume weighted average stock price. Pursuant to terms of the Merger Agreement, outstanding VantageSouth Bank shares will be converted into the Company’s shares equal to the exchange ratio. The exchange ratio will be 4.8204 if the Company’s volume weighted average stock price is at or above $5.25. If the Company’s volume weighted average stock price is at or below $4.75, the exchange ratio will be 5.3278, and if the Company’s volume weighted

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CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

average stock price is below $5.25 but above $4.75, the exchange ratio will be equal to 25.307 divided by a number equal to the Company’s volume weighted average stock price.

VantageSouth Bank is headquartered in Burlington, North Carolina, and operates five branch offices located in Burlington (2), Fayetteville, and Salisbury (2), North Carolina. As of September 30, 2012, VantageSouth Bank had approximately $260,700 in total assets and 1,382,961 outstanding common shares. The Company’s board of directors established an independent special committee which evaluated, negotiated, and made a favorable recommendation to the board regarding the proposed merger. The North Carolina Banking Commission granted its formal approval of the Merger on September 26, 2012, and the FDIC granted its final approval of the Merger on October 30, 2012. The completion of the merger is subject to stockholder approval.

Piedmont Investment

On November 18, 2011, the Company completed the issuance and sale to Piedmont of 18,750,000 shares of common stock for $75,000 in cash (the “Piedmont Investment”) pursuant to an Investment Agreement (the “Piedmont Investment Agreement”). As part of its investment, Piedmont also made a tender offer to the Company’s stockholders commencing on November 8, 2011 to purchase up to 67% (6,442,105 shares) of our outstanding common stock at a price of $4.75 per share (“Tender Offer”). Pursuant to the Tender Offer, Piedmont purchased 6,128,423 shares of the Company’s common stock for $29,100. As a result of the Piedmont Investment and the Tender Offer, Piedmont owns approximately 88% of the Company’s outstanding common stock.

Staff Accounting Bulletin (“SAB”) Topic No. 5.J, Push Down Basis of Accounting Required in Certain Limited Circumstances, indicates that the acquiror’s application of purchase accounting is required to be pushed down to the acquiree (“push-down accounting”) in purchase transactions that result in an entity becoming substantially wholly owned. In determining whether a company has become substantially wholly owned, SEC staff guidance indicates that push-down accounting would be required if 95% or more of the company has been acquired, permitted if 80% to 95% has been acquired, and prohibited if less than 80% of the company is acquired. The Company determined push-down accounting to be appropriate due to Piedmont’s acquisition of 88% of the Company’s outstanding common stock in the Piedmont Investment and the Tender Offer.

Due to the application of push-down accounting, balances and activity in the Company’s consolidated financial statements prior to the Piedmont Investment have been labeled with “Predecessor Company” while balances and activity subsequent to the Piedmont Investment have been labeled with “Successor Company.”

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CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

The following table summarizes the Piedmont Investment and the Successor Company’s opening balance sheet: 

	Preliminary Balances at Nov. 18, 2011		Measurement Period Adjustments			Adjusted Balances at Nov. 18, 2011
Fair value of assets acquired:
Cash and cash equivalents	$	226,126	$	—		$	226,126
Investment securities available for sale	89,343		—			89,343
Mortgage loans held for sale	4,588		—			4,588
Loans	561,911		(1,485		)	560,426
Federal Home Loan Bank stock	8,669		—			8,669
Premises and equipment	10,325		—			10,325
Deferred tax asset, net	30,268		1,782			32,050
Bank owned life insurance	19,169		—			19,169
Foreclosed assets	10,584		(405		)	10,179
Goodwill	20,015		3,095			23,110
Other intangible assets	2,260		—			2,260
Other assets	10,094		(1,182		)	8,912
Total assets acquired	993,352		1,805			995,157
Fair value of liabilities assumed:
Deposits	678,289		—			678,289
Borrowings	164,801		—			164,801
Other liabilities	7,111		1,805			8,916
Total liabilities assumed	850,201		1,805			852,006
Net assets	$	143,151	$	—		$	143,151
Non-controlling interests at fair value:
Preferred stock	24,409		—			24,409
Common stock warrants	1,326		—			1,326
Common stock	42,416		—			42,416
Total non-controlling interests	68,151		—			68,151
Purchase price	$	75,000	$	—		$	75,000

The above estimated fair values of assets acquired and liabilities assumed are based on the information that was available to make estimates of fair value during the measurement period through September 30, 2012. The Company is currently within the one-year measurement period with respect to the acquisition date, and thus, material adjustments to these purchase accounting fair value adjustments are possible. In the first nine months of 2012, goodwill increased by $3,095 as a result of adjustments to refine the Company’s acquisition date estimate of market rent on two branch leases, adjustments to refine the valuation of certain other real estate owned, adjustments to the acquisition date fair value of the split-dollar liability on bank owned life insurance, and adjustments to refine acquisition date cash flow estimates and the related valuation of certain loans.

A summary and description of the assets, liabilities and non-controlling interests fair valued in conjunction with applying the acquisition method of accounting is as follows:

Cash and Cash Equivalents. Cash and cash equivalents, which include proceeds from the Piedmont Investment, held at acquisition date approximated fair value on that date and did not require a fair value adjustment.

Securities Available for Sale. Available for sale securities are reported at fair value at acquisition date. To account for the Piedmont Investment, the difference between the fair value and par value became the new premium or discount for each security in the investment portfolio. The fair value of investment securities is primarily based on values obtained from third party pricing models, which are based on recent trading activity for the same or similar securities. Two equity securities were valued at their respective stock market prices.

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CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

Loans. All loans in the loan portfolio were adjusted to estimated fair value at the Piedmont Investment date. Upon analyzing estimated credit losses, the Company forecasted expected cash flows over the remaining life of each loan and discounted those expected cash flows to present value at current market interest rates for similar loans considering loan collateral type and credit quality. Based on this valuation, the Company recorded a loan fair value discount of approximately $44,900. In addition, the Company eliminated net deferred loan fees immediately prior to the acquisition of approximately $663.

Federal Home Loan Bank Stock. The Company’s investment in FHLB stock is carried at cost. Given the option to redeem this stock at par through the FHLB, the Company determined that cost approximated fair value at acquisition date and made no related adjustment.

Premises and Equipment. Premises and equipment were adjusted to estimated fair value at acquisition date based on recent appraisals for bank-owned land and buildings. The total fair value adjustment reduced the book value of these assets by approximately $540. At acquisition, accumulated depreciation was eliminated and estimated fair value became the cost basis of these assets.

Deferred Tax Asset. The net deferred tax asset is primarily related to the recognition of differences between certain tax and book bases of assets and liabilities related to purchase accounting at the Piedmont Investment, including fair value adjustments discussed elsewhere in this section, along with federal and state net operating losses that the Company determined to be realizable as of the acquisition date. A valuation allowance is recorded for deferred tax assets, including net operating losses, if the Company determines that it is more likely than not that some portion or all of the deferred tax assets will not be realized. Based on its analysis, the Company determined that no valuation allowance was necessary at acquisition date. See Note K of Item 8 in the Company’s 2011 Form 10-K for further discussion of the Company’s valuation allowance analysis.

Bank Owned Life Insurance. Bank owned life insurance investments are recorded at their cash surrender value, or the amount that can be realized upon surrender. Therefore, no fair value adjustments were made to this amount at acquisition date.

Foreclosed Assets. Foreclosed assets were adjusted to estimated fair value, which includes consideration of recent appraisals and the Company’s disposition strategy, at acquisition date.

Goodwill. Goodwill represents the excess of purchase price over the fair value of acquired net assets. This acquisition was nontaxable and, as a result, there is no tax basis in the goodwill. Accordingly, none of the goodwill associated with the acquisition is deductible for tax purposes.

Other Intangible Assets. The only separately identifiable intangible asset we recorded at acquisition date was related to the value of the Bank’s core customer deposit relationships, or core deposit intangible. This amount represents the present value of the difference between a market participant’s cost of obtaining alternative funds and the current cost to maintain the acquired core deposit base. The present value is calculated over the estimated life of the acquired core deposit base and will be amortized on an accelerated method over a ten-year period. Deposit accounts evaluated for the core deposit intangible were demand deposit accounts, money market accounts and savings accounts. Time deposits were not included in our evaluation of the core deposit intangible.

Deposits. Time deposits were not included in the core deposit intangible evaluation. Instead, a separate valuation of time deposits was conducted due to the contractual time frame associated with these liabilities. Time deposits evaluated for purchase accounting consisted of certificates of deposit (“CD’s”), brokered deposits and CD’s through the Certificate of Deposit Account Registry Services (“CDARS”). The fair value of these deposits was determined by first stratifying the deposit pool by maturity and calculating the contractual interest rates for each maturity period. Then contractual cash flows were projected by period and discounted to present value using current market interest rates for similar duration CD’s.

Outstanding balances of CDs totaled $196,500 at acquisition date, and the estimated fair value premium totaled $4,400. The outstanding balance of brokered deposits was $115,000, and the estimated fair value premium totaled $1,600. The outstanding balance of CDARS was $15,500, and the estimated fair value premium totaled approximately $47. The Company will amortize these premiums into income as a reduction of interest expense on a level-yield basis over the weighted average time deposit terms.

Borrowings. Included in borrowings are FHLB advances as well as a subordinated term loan issued by the Bank and junior subordinated debentures issued in the form of trust preferred securities. Fair values for FHLB advances were determined by developing cash flow estimates for each advance based on scheduled principal and interest payments, contractual interest rates and prepayment penalties. Once the cash flows were determined, the current FHLB advance rate for similar maturity terms was used to discount the cash flows to the present value. The outstanding balance of FHLB advances at the acquisition date was

- 11 -

CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

$142,000, and the estimated fair value premium totaled $10,600. Acquired FHLB advances were repaid after the acquisition date prior to December 31, 2011.

Fair values for the trust preferred securities and subordinated term loan were estimated by developing cash flow estimates for each of these debt instruments based on scheduled principal and interest payments. Once the cash flows were determined, a market rate for comparable debt instruments was used to discount the cash flows to their present values. Outstanding trust preferred securities and subordinated debt at the acquisition date were $8,000 and $7,500, respectively, and the estimated fair value discount on each totaled $2,800, and $731, respectively. The Company will accrete these discounts as an increase to interest expense on a level-yield basis over the contractual term of each debt instrument.

Non-controlling Interests. Non-controlling interests, that portion of the Company not owned by Piedmont, include preferred stock and common stock warrants issued pursuant to the U.S. Treasury’s Troubled Asset Relief Program capital purchase program (“TARP CPP”) as well as common stock owned at the acquisition date by legacy stockholders. Non-controlling interests are not disclosed on the Company’s consolidated balance sheet since they represent non-controlling interests of Piedmont, not the Company. However, valuation of these non-controlling ownership interests impacts the Company’s stockholders’ equity through the push down of purchase accounting adjustments. Preferred stock issued under the TARP CPP was valued based on forecasting expected cash flows with an assumed repayment date and discounting these cash flows based on current market yields for similar preferred stock. The discount between the estimated fair value at acquisition date and the $24,900 liquidation value will be accreted to retained earnings over the remaining period to anticipated repayment of these securities. The common stock warrant, also issued to the U.S. Treasury, was valued using a Black-Scholes option pricing model. See Note I – Cumulative Perpetual Preferred Stock for more details.

The fair value of non-controlling common stock was estimated using the closing stock market price on the acquisition date, which was $4.39 per share, and applying this stock price to the number of outstanding non-controlling common shares at that date.

There were no indemnification assets in this transaction, nor was there any contingent consideration to be recognized. Professional and other costs related to the Piedmont Investment were expensed as incurred.

Note C - Commitments and Contingencies

The following is a summary of the contractual amount of the Company’s exposure to off-balance sheet commitments at September 30, 2012:

Undisbursed lines of credit	$	30,999
Commitments to extend credit	76,417
Financial standby letters of credit	4,196
Capital commitment to private investment fund	175

- 12 -

Note D - Per Share Results

Basic earnings per share represents income (loss) available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued. Potential common shares that may be issued by the Company relate to outstanding stock options, restricted stock and the common stock warrant issued to the U.S. Treasury and are determined using the treasury stock method. Outstanding stock options and warrants are considered anti-dilutive due to the net loss attributable to common shareholders in each period. The calculation of basic and diluted weighted average shares and the weighted average anti-dilutive stock options and warrants were as follows for each period presented:

	Successor Company	Predecessor Company	Successor Company	Predecessor Company
	Three months ended September 30, 2012	Three months ended September 30, 2011	Nine months ended September 30, 2012	Nine months ended September 30, 2011
Weighted average number of shares used in computing basic earnings per share	28,361,357	9,587,324	28,361,159	9,585,056
Effect of dilutive stock options and warrant	—	—	—	—
Weighted average number of shares used in computing diluted earnings per share	28,361,357	9,587,324	28,361,159	9,585,056
Anti-dilutive stock options	233,377	281,667	233,377	281,667
Anti-dilutive warrants	833,705	833,705	833,705	833,705

Note E - Investment Securities

The following is a summary of the securities portfolio by major classification:

	September 30, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale:
Residential mortgage-backed securities – GSE	$	22,692	$	620	$	—	$	23,312
Commercial mortgage-backed securities – private	6,759		113		—		6,872
Collateralized mortgage obligations – GSE	47,855		160		97		47,918
Municipals – non-taxable	15,510		708		—		16,218
Municipals – taxable	1,635		11		—		1,646
Corporate bonds	35,217		1,700		—		36,917
Marketable equity securities	37		33		—		70
	$	129,705	$	3,345	$	97	$	132,953

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CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

	December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale:
Residential mortgage-backed securities – GSE	$	19,452	$	19	$	107	$	19,364
Collateralized mortgage obligations – GSE	82,192		154		251		82,095
Municipals – non-taxable	13,281		263		30		13,514
Corporate bonds	28,042		39		115		27,966
Marketable equity securities	519		50		4		565
	$	143,486	$	525	$	507	$	143,504

The following tables summarize gross unrealized losses and fair values, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at September 30, 2012 and December 31, 2011:

	September 30, 2012
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Securities available for sale:
Collateralized mortgage obligations – GSE	24,079		97		—		—		24,079		97
Corporate bonds	2,067		—		—		—		2,067		—
Total temporarily impaired securities	$	26,146	$	97	$	—	$	—	$	26,146	$	97

	December 31, 2011
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Securities available for sale:
Residential mortgage-backed securities – GSE	$	9,153	$	107	$	—	$	—	$	9,153	$	107
Collateralized mortgage obligations – GSE	67,360		251		—		—		67,360		251
Municipals – non-taxable	2,637		30		—		—		2,637		30
Corporate bonds	15,819		115		—		—		15,819		115
Marketable equity securities	32		4		—		—		32		4
Total temporarily impaired securities	$	95,001	$	507	$	—	$	—	$	95,001	$	507

Unrealized losses on investment securities at September 30, 2012 related to sevenGSE collateralized mortgage obligations and twoinvestment grade corporate bonds. Unrealized losses on investment securities at December 31, 2011 related to eleven GSE collateralized mortgage obligations, four GSE mortgage-backed securities, three municipal securities, seveninvestment grade corporate bonds and one marketable equity security. At September 30, 2012 and December 31, 2011, none of the securities had been in an unrealized loss position for more than a twelve month period.

The securities in an unrealized loss position at September 30, 2012 have continued to perform and are expected to perform through maturity, and the issuers have not experienced significant adverse events that would call into question their ability to repay these debt obligations according to contractual terms. Further, because the Company does not intend to sell these investments and does not believe that it will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, unrealized losses on such securities are not considered to represent other-than-temporary impairment at September 30, 2012.

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CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

At September 30, 2012, the Company held no individual investment securities with an aggregate book value greater than 10% of stockholders’ equity. At September 30, 2012 and December 31, 2011, investment securities with a carrying value of $34,108 and $43,900, respectively, were pledged to secure public deposits, borrowings and for other purposes required or permitted by law.

The amortized cost and fair values of securities available for sale at September 30, 2012, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Less Than One Year		One to Five Years		Five to Ten Years		Over Ten Years		Equity Securities
Residential mortgage backed securities – GSE
Amortized cost	$	2,944	$	7,473	$	10,053	$	2,222	$	—
Fair value	3,024		7,676		10,321		2,291		—
Commercial mortgage backed securities – private
Amortized cost	—		6,759		—		—		—
Fair value	—		6,872		—		—		—
Collateralized mortgage obligations – GSE
Amortized cost	8,710		30,384		7,873		888		—
Fair value	8,724		30,424		7,884		886		—
Municipals – non-taxable
Amortized cost	—		6,776		4,205		4,529		—
Fair value	—		7,007		4,476		4,735		—
Municipals – taxable
Amortized cost	—		—		—		1,635		—
Fair value	—		—		—		1,646		—
Corporate bonds
Amortized cost	—		35,217		—		—		—
Fair value	—		36,917		—		—		—
Marketable equity securities
Amortized cost	—		—		—		—		37
Fair value	—		—		—		—		70
Total
Amortized cost	$	11,654	$	86,609	$	22,131	$	9,274	$	37
Fair value	$	11,748	$	88,896	$	22,681	$	9,558	$	70

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CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

Note F - Loans and Allowance for Loan Losses

The following is a summary of loans at September 30, 2012 and December 31, 2011: 

	September 30, 2012			December 31, 2011
Commercial:
Commercial real estate	$	306,722		$	310,315
Commercial and industrial	56,976			39,101
Construction and development	54,090			74,663
Consumer:
Residential real estate	74,760			66,657
Construction and development	4,496			8,461
Home equity	40,875			48,940
Other consumer	3,084			3,300
Total loans	541,003			551,437
Less:
Deferred loan fees	(57		)	(45		)
Allowance for loan losses	(2,264		)	(227		)
Net loans	$	538,682		$	551,165

Loans are primarily made in the Company’s market area of North Carolina, principally Wake, Johnston, Lee, Moore, and New Hanover counties. Real estate loans can be affected by the condition of the local real estate market. Commercial and consumer and other loans can be affected by the local economic conditions.

Purchased Credit-Impaired Loans

Changes in accretable yield, or income expected to be collected, related to purchased credit-impaired (“PCI”) loans in the nine months ended September 30, 2012 were as follows:

Balance at January 1, 2012	$	29,645
New loans purchased	—
Accretion of income	(11,617		)
Reclassifications from nonaccretable difference	10,297
Disposals	(1,788		)
Balance September 30, 2012	$	26,537

The accretable yield represents the excess of estimated cash flows expected to be collected over the initial fair value of the PCI loans, which is their fair value at the time of the Piedmont Investment. The accretable yield is accreted into interest income over the estimated life of the PCI loans using the level yield method. The accretable yield will change due to changes in:

• the estimate of the remaining life of PCI loans which may change the amount of future interest income, and possibly principal, expected to be collected;

• the estimate of the amount of contractually required principal and interest payments over the estimated life that will not be collected (the nonaccretable difference); and

• indices for PCI loans with variable rates of interest.

For PCI loans, the impact of loan modifications is included in the evaluation of expected cash flows for subsequent decreases or increases of cash flows. For variable rate PCI loans, expected future cash flows will be recalculated as the rates adjust over the lives of the loans. At acquisition, the expected future cash flows were based on the variable rates that were in effect at that time.

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CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

Allowance for Loan Losses

The following is a summary of changes in the allowance for loan losses and the ending recorded investment in loans by portfolio segment and based on impairment method as of and for the three and nine months ended September 30, 2012 and 2011:

	Successor Company
	Three months ended September 30, 2012
	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Residential Real Estate		Consumer Construction			Home Equity			Other Consumer			Total
Allowance for loan losses:
Beginning balance	$	626	$	378	$	289	$	458	$	29		$	331		$	2		$	2,113
Charge-offs	—		—		—		—		—			(693		)	(114		)	(807		)
Recoveries	—		—		—		—		—			—			—			—
Provision for loan losses	65		82		52		253		(10		)	397			119			958
Ending balance	$	691	$	460	$	341	$	711	$	19		$	35		$	7		$	2,264

	Successor Company
	Nine months ended September 30, 2012
	Commercial Real Estate		Commercial and Industrial			Commercial Construction			Residential Real Estate			Consumer Construction		Home Equity			Other Consumer			Total
Allowance for loan losses:
Beginning balance	$	126	$	30		$	19		$	27		$	2	$	20		$	3		$	227
Charge-offs	—		(105		)	(46		)	(3		)	—		(1,404		)	(135		)	(1,693		)
Recoveries	—		—			—			—			—		—			—			—
Provision for loan losses	565		535			368			687			17		1,419			139			3,730
Ending balance	$	691	$	460		$	341		$	711		$	19	$	35		$	7		$	2,264
Ending balance:
Individually evaluated for impairment	$	—	$	—		$	—		$	—		$	—	$	—		$	—		$	—
Collectively evaluated for impairment	$	609	$	349		$	174		$	165		$	19	$	35		$	6		$	1,357
Purchased credit-impaired	$	82	$	111		$	167		$	546		$	—	$	—		$	1		$	907
Loans:
Ending balance:
Individually evaluated for impairment	$	464	$	—		$	—		$	—		$	—	$	819		$	—		$	1,283
Collectively evaluated for impairment	177,880		39,435			15,504			49,643			3,631		40,056			2,825			328,974
Purchased credit-impaired	128,378		17,541			38,586			25,117			865		—			259			210,746
Total	$	306,722	$	56,976		$	54,090		$	74,760		$	4,496	$	40,875		$	3,084		$	541,003

	Predecessor Company
	Three months ended September 30, 2011
	Commercial Real Estate			Commercial and Industrial			Commercial Construction			Residential Real Estate			Other Consumer			Total
Allowance for loan losses:
Beginning balance	$	8,015		$	2,905		$	7,227		$	4,102		$	70		$	22,319
Charge-offs	(1,723		)	(778		)	(1,534		)	(308		)	(7		)	(4,350		)
Recoveries	37			21			99			22			1			180
Provision for loan losses	1,357			433			1,944			684			34			4,452
Ending balance	$	7,686		$	2,581		$	7,736		$	4,500		$	98		$	22,601

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CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

	Predecessor Company
	Nine months ended September 30, 2011
	Commercial Real Estate			Commercial and Industrial			Construction and Development			Residential Real Estate			Consumer			Total
Allowance for loan losses:
Beginning balance	$	5,345		$	2,689		$	9,775		$	2,813		$	80		$	20,702
Charge-offs	(2,394		)	(1,556		)	(7,965		)	(1,314		)	(29		)	(13,258		)
Recoveries	37			83			447			77			2			646
Provision for loan losses	4,698			1,365			5,479			2,924			45			14,511
Ending balance	$	7,686		$	2,581		$	7,736		$	4,500		$	98		$	22,601
Ending balance:
Individually evaluated for impairment	$	18,500		$	3,395		$	30,628		$	13,484		$	33		$	66,040
Collectively evaluated for impairment	$	311,200		$	40,999		$	82,762		$	111,972		$	3,675		$	550,608

The following is a summary of the ending allowance for loans losses and the recorded investment in loans by portfolio segment and based on impairment method at December 31, 2011:

	December 31, 2011
	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Residential Real Estate		Consumer Construction		Home Equity		Other Consumer		Total
Allowance for loan losses:
Ending balance:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment	$	126	$	30	$	19	$	27	$	2	$	20	$	3	$	227
Purchased credit-impaired	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans:
Ending balance:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment	149,654		12,426		12,276		33,702		7,039		45,886		2,850		263,833
Purchased credit-impaired	160,661		26,675		62,387		32,955		1,422		3,054		450		287,604
Total	$	310,315	$	39,101	$	74,663	$	66,657	$	8,461	$	48,940	$	3,300	$	551,437

Analysis of Credit Quality

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. The Company uses the following general definitions for risk ratings:

• Pass. These loans range from superior quality with minimal credit risk to loans requiring heightened management attention but that are still an acceptable risk and continue to perform as contracted.

• Special Mention. Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date.

• Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that

- 18 -

CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

• Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	Pass		Special Mention		Substandard		Doubtful		Total
September 30, 2012
Acquired loans
Commercial:
Real estate	$	184,892	$	40,891	$	13,881	$	—	$	239,664
Commercial and industrial	25,430		1,337		1,671		—		28,438
Construction and development	21,403		17,216		6,166		384		45,169
Consumer:
Residential real estate	44,512		4,177		6,379		131		55,199
Construction and development	2,638		166		425		—		3,229
Home equity	34,469		1,264		2,007		—		37,740
Other consumer	2,077		83		17		—		2,177
Total	$	315,421	$	65,134	$	30,546	$	515	$	411,616
Loans originated by the Successor Company
Commercial:
Real estate	$	67,058	$	—	$	—	$	—	$	67,058
Commercial and industrial	28,513		18		7		—		28,538
Construction and development	5,985		2,598		338		—		8,921
Consumer:
Residential real estate	19,437		124		—		—		19,561
Construction and development	1,267		—		—		—		1,267
Home equity	3,135		—		—		—		3,135
Other consumer	906		1		—		—		907
Total	$	126,301	$	2,741	$	345	$	—	$	129,387

- 19 -

CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

	Pass		Special Mention		Substandard		Doubtful		Total
December 31, 2011
Acquired loans
Commercial:
Real estate	$	253,505	$	34,877	$	13,907	$	379	$	302,668
Commercial and industrial	33,636		2,213		2,259		—		38,108
Construction and development	39,122		22,482		12,402		519		74,525
Consumer:
Residential real estate	51,318		5,155		8,300		145		64,918
Construction and development	7,331		176		758		—		8,265
Home equity	42,766		2,064		3,684		—		48,514
Other consumer	2,795		336		43		—		3,174
Total	$	430,473	$	67,303	$	41,353	$	1,043	$	540,172
Loans originated by the Successor Company
Commercial:
Real estate	$	7,647	$	—	$	—	$	—	$	7,647
Commercial and industrial	894		99		—		—		993
Construction and development	138		—		—		—		138
Consumer:
Residential real estate	1,739		—		—		—		1,739
Construction and development	196		—		—		—		196
Home equity	426		—		—		—		426
Other consumer	126		—		—		—		126
Total	$	11,166	$	99	$	—	$	—	$	11,265

- 20 -

CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

The following table presents the aging and accrual status of the loan portfolio at September 30, 2012 and December 31, 2011 by class of loans:

	30 - 89 Days Past Due		Greater than 89 Days Past Due Accruing		Non-accrual		Total Past Due		Loans Not Past Due		Total
September 30, 2012
Acquired loans
Commercial:
Real estate	$	1,757	$	3,408	$	464	$	5,629	$	234,035	$	239,664
Commercial and industrial	610		—		68		678		27,760		28,438
Construction and development	561		2,733		23		3,317		41,852		45,169
Consumer:
Residential real estate	752		1,113		—		1,865		53,334		55,199
Construction and development	132		97		48		277		2,952		3,229
Home equity	671		—		1,080		1,751		35,989		37,740
Other consumer	83		—		5		88		2,089		2,177
Total	$	4,566	$	7,351	$	1,688	$	13,605	$	398,011	$	411,616
Loans originated by the Successor Company
Commercial:
Real estate	$	3,036	$	—	$	—	$	3,036	$	64,022	$	67,058
Commercial and industrial	—		—		7		7		28,531		28,538
Construction and development	—		—		—		—		8,921		8,921
Consumer:
Residential real estate	—		—		—		—		19,561		19,561
Construction and development	—		—		—		—		1,267		1,267
Home equity	—		—		—		—		3,135		3,135
Other consumer	—		—		—		—		907		907
Total	$	3,036	$	—	$	7	$	3,043	$	126,344	$	129,387

	30 - 89 Days Past Due		Greater than  89 Days Past Due Accruing		Non-accrual		Total Past Due		Loans Not  Past Due		Total
December 31, 2011
Acquired loans
Commercial:
Real estate	$	3,878	$	6,101	$	—	$	9,979	$	292,689	$	302,668
Commercial and industrial	925		798		—		1,723		36,385		38,108
Construction and development	4,809		10,328		—		15,137		59,388		74,525
Consumer:
Residential real estate	2,289		4,148		—		6,437		58,481		64,918
Construction and development	652		382		—		1,034		7,231		8,265
Home equity	740		1,128		—		1,868		46,646		48,514
Other Consumer	3		3		—		6		3,168		3,174
Total	$	13,296	$	22,888	$	—	$	36,184	$	503,988	$	540,172

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CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

	30 - 89 Days Past Due		Greater than 89 Days Past Due Accruing		Non-accrual		Total Past Due		Loans Not  Past Due		Total
December 31, 2011
Loans originated by the Successor Company:
Commercial:
Real estate	$	—	$	—	$	—	$	—	$	7,647	$	7,647
Commercial and industrial	—		—		—		—		993		993
Construction and development	—		—		—		—		138		138
Consumer:
Residential real estate	—		—		—		—		1,739		1,739
Construction and development	—		—		—		—		196		196
Home equity	—		—		—		—		426		426
Other Consumer	—		—		—		—		126		126
Total	$	—	$	—	$	—	$	—	$	11,265	$	11,265

Non-accrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. Loans past due 90 days or more and still accruing primarily include purchased credit-impaired loans which are accreting interest at a pool level yield. No loans originated by the Successor Company or purchased non-impaired loans had been restructured in a troubled debt restructuring at September 30, 2012.

The following table is a summary of impaired loans, which exclude purchased credit-impaired loans, including the related allowance for loan losses at September 30, 2012:

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial real estate	$	464	$	464	$	—	$	116	$	—
Residential real estate	—		—		—		—		—
Commercial Construction	—		—		—		—		—
Commercial and industrial	—		—		—		—		—
Consumer Construction	—		—		—		—		—
Home equity	819		1,361		—		257		—
Other Consumer	—		—		—		—		—
	1,283		1,825		—		373		—
With an allowance recorded:
Commercial real estate	—		—		—		—		—
Residential real estate	—		—		—		—		—
Commercial Construction	—		—		—		—		—
Commercial and industrial	—		—		—		—		—
Consumer Construction	—		—		—		—		—
Home equity	—		—		—		238		—
Other Consumer	—		—		—		—		—
	—		—		—		238		—
Total impaired loans:
Commercial real estate	464		464		—		116		—
Residential real estate	—		—		—		—		—
Commercial Construction	—		—		—		—		—
Commercial and industrial	—		—		—		—		—
Consumer Construction	—		—		—		—		—
Home equity	819		1,361		—		495		—
Other Consumer	—		—		—		—		—
Total	$	1,283	$	1,825	$	—	$	611	$	—

No interest income was recognized on impaired loans during the period in which they were impaired for the three or nine month periods ended September 30, 2012. The Company had no impaired loans at December 31, 2011.

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CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

At September 30, 2012 and December 31, 2011, loans with a recorded investment of $180,655 and $217,095, respectively, were pledged to secure public deposits, borrowings and for other purposes required or permitted by law.

Note G – Derivative Financial Instruments

The Company may, at times, use derivative financial instruments to manage its interest rate risk. These instruments carry varying degrees of credit, interest rate, and market or liquidity risks. Derivative instruments are recognized as either assets or liabilities in the consolidated financial statements and are measured at fair value. Subsequent changes in the derivatives’ fair values are recognized in earnings unless they qualify as effective cash flow hedges under U.S. GAAP.

Trust preferred securities

In August 2003, $8.0 million in trust preferred securities (“TRUPs”) were issued through Crescent Financial Capital Trust I (the “Trust”). The Trust invested the total proceeds from the sale of its TRUPs in junior subordinated deferrable interest debentures issued by the Company, which fully and unconditionally guarantees the TRUPs. The junior subordinated debentures were adjusted to estimated fair value in purchase accounting with the Piedmont Investment, and at September 30, 2012, their carrying value was $5.5 million. The TRUPs pay cumulative cash distributions quarterly at an annual contract rate, reset quarterly, equal to three-month LIBOR plus 3.10%.

In June 2009, the Predecessor Company entered into derivative financial instruments which swapped the variable rate payments for fixed payments. These instruments consisted of a three-year and four-year swap, each for one-half of the notional amount of the TRUPs for fixed rates of 5.49% and 5.97%, respectively. The three-year swap matured in June 2012. Due to the deferral of interest payments on the TRUPs, the remaining associated interest rate swap no longer qualifies for cash flow hedge accounting and is therefore marked to fair value through earnings.

Additionally, in May 2012, the Company entered into an interest rate cap effective in July 2012. This derivative financial instrument caps the interest rate on the the full $8.0 million notional amount of TRUPs at 3.57 percent through July 2017. In the event that the variable rate on the TRUPs exceeds the cap rate, the counterparty would pay the Company the difference between the variable rate due to the holders of the debentures and the cap rate.

Subordinated term loan agreement

On September 26, 2008, the Bank entered into an unsecured subordinated term loan agreement in the amount of $7.5 million. The agreement requires the Bank to make quarterly payments of interest at an annual contract rate, reset quarterly, equal to three-month LIBOR plus 4.00%. The subordinated term loan was adjusted to estimated fair value in purchase accounting with the Piedmont Investment, and at September 30, 2012, its carrying value was $6.8 million.

In June 2009, the Bank entered into derivative financial instruments which swapped the variable rate payments for fixed payments. These instruments consisted of a three-year and four-year swap, each for one-half of the notional amount of the subordinated debt for fixed rates of 6.39% and 6.87%, respectively. The three-year swap matured in June 2012. As of November 2011, these swaps were no longer designated as cash flow hedges and are, therefore, marked to fair value through earnings.

Additionally, in May 2012, the Company entered into an interest rate cap effective in July 2012. This derivative financial instrument caps the interest rate on the the full $7.5 million notional amount of subordinated term loan at 4.47 percent through July 2017. In the event that the variable rate on the subordinated term loan exceeds the cap rate, the counterparty would pay the Company the difference between the variable rate due on the subordinated term loan and the cap rate.

Loan commitments

Related to our mortgage business, we enter into interest rate lock commitments with customers and commitments to sell mortgages to investors under best-efforts contracts. The interest rate lock commitments are entered into to manage the interest rate risk associated with the best-efforts contracts and are considered derivative financial instruments under U.S. GAAP.

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CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

The following tables disclose the location and fair value amounts of derivative instruments in the consolidated balance sheets:

		September 30, 2012					December 31, 2011
	Balance Sheet Location	Notional Amount		Estimated Fair Value			Notional Amount	Estimated Fair Value
Trust preferred securities:
Interest rate swap	Other liabilities	$	—	$	—		4,000	$	(38	)
Interest rate swap	Other liabilities	4,000		(80		)	4,000	(134		)
Interest rate cap	Other assets	8,000		107			—	—
Subordinated term loan agreement:
Interest rate swap	Other liabilities	—		—			3,750	(34		)
Interest rate swap	Other liabilities	3,750		(73		)	3,750	(124		)
Interest rate cap	Other assets	$	7,500	$	100		—	$	—
Loan commitments:
Interest rate lock commitments	Other assets	48,112		814			15,667	212
				$	868			$	(118	)

The following table discloses activity in accumulated other comprehensive income (“OCI”) related to the interest rate swaps for the nine months ended September 30, 2012 and 2011: 

	Successor Company		Predecessor Company
	Nine months ended September 30, 2012		Nine months ended September 30, 2011
Accumulated OCI resulting from interest rate swaps at beginning of period, net of tax	$	—	$	(356	)
Other comprehensive loss recognized, net of tax	—		115
Accumulated OCI resulting from interest rate swaps at end of period, net of tax	$	—	$	(241	)

The Company monitors the credit risk of the interest rate swap counterparty and has pledged $780 in cash to the counterparty to the swaps at of September 30, 2012.

Note H - Fair Value Measurements

The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. For example, investment securities available for sale are recorded at fair value on a recurring basis. Additionally, we may be required to record at fair value other assets on a nonrecurring basis, such as loans held for sale, impaired loans and certain other assets. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets. The following is a description of valuation methodologies used for assets and liabilities recorded at fair value.

Investment Securities. Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market exchange prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include

- 24 -

CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

marketable equity securities traded on an active exchange, such as the New York Stock Exchange. Level 2 securities include mortgage-backed securities and collateralized mortgage obligations, both issued by government sponsored entities, private label mortgage-backed securities, municipal bonds and corporate debt securities.

Derivatives. Derivative instruments include interest rate swaps and are valued on a recurring basis using models developed by third-party providers. This type of derivative is classified as Level 2 within the hierarchy.

Loans. Loans are not recorded at fair value on a recurring basis. However, certain loans are determined to be impaired, and those loans are charged down to estimated fair value. The fair value of impaired loans that are collateral dependent is based on collateral value. For impaired loans that are not collateral dependent, estimated value is based on either an observable market price, if available, or the present value of expected future cash flows. Those impaired loans not requiring a charge-off represent loans for which the estimated fair value exceeds the recorded investments in such loans. When the fair value of an impaired loan is based on an observable market price or a current appraised value with no adjustments, we record the impaired loan as nonrecurring Level 2. When an appraised value is not available, or we determine the fair value of the collateral is further impaired below the appraised value, and there is no observable market price, we classify the impaired loan as nonrecurring Level 3.

Interest Rate Lock Commitments. The fair value of interest rate lock commitments is based on servicing rate premium, origination income net of origination costs, fall out rates and changes in loan pricing between the commitment date and period end, typically month end. The Company classifies interest rate lock commitments as Level 3. There have been no changes in valuation techniques during the nine months ended September 30, 2012.

	Interest Rate Lock Commitments Level 3
	Successor			Predecessor
	Fair Value			Fair Value
Balance, January 1	$	212		$	53
Issuances	1,707			676
Settlements	(1,105		)	(486		)
Balance September 30	$	814		$	243

The difference between the gross issuances and settlements for the period is included in mortgage banking income within non-interest income on the consolidated statements of operations.

Foreclosed Assets. Foreclosed assets are adjusted to fair value upon transfer of loans to foreclosed assets. Subsequently, foreclosed assets are carried at lower of cost or net realizable value. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. Given the lack of observable market prices for identical properties, the Company classifies foreclosed assets as nonrecurring Level 3.

- 25 -

CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

The following tables summarize information about assets and liabilities measured at fair value at September 30, 2012 and December 31, 2011:

				Fair Value Measurements at
				September 30, 2012
	Assets/(Liabilities) Measured at			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs			Significant Unobservable Inputs
Description	Fair Value			(Level 1)		(Level 2)			(Level 3)
Securities available for sale:
Residential mortgage-backed securities – GSE	$	23,312		$	—	$	23,312		$	—
Commercial mortgage-backed securities – private	6,872			—		6,872			—
Collateralized mortgage obligations – GSE	47,918			—		47,918			—
Municipals – non-taxable	16,218			—		16,218			—
Municipals – taxable	1,646			—		1,646			—
Corporate bonds	36,917			—		36,917			—
Marketable equity securities	70			70		—			—
Impaired loans	1,825			—		—			1,825
Foreclosed assets	3,828			—		—			3,828
Interest rate lock commitments	814			—		—			814
Derivative assets	207			—		207			—
Derivative liabilities	(152		)	—		(152		)	—

				Fair Value Measurements at December 31, 2011
	Assets/(Liabilities) Measured at			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs			Significant Unobservable Inputs
Description	Fair Value			(Level 1)		(Level 2)			(Level 3)
Securities available for sale:
Residential mortgage-backed securities - GSE	$	19,364		$	—	$	19,364		$	—
Collateralized mortgage obligations	82,095			—		82,095			—
Municipals – non-taxable	13,514			—		13,514			—
Corporate bonds	27,966			—		27,966			—
Marketable equity securities	565			565		—			—
Foreclosed assets	9,017			—		—			9,017
Interest rate lock commitments	212			—		—			212
Derivative liabilities	(330		)	—		(330		)	—

- 26 -

CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

Quantitative Information about Level 3 Fair Value Measurements

	Fair Value at September 30, 2012		Valuation Technique	Unobservable Input	Range
Recurring measurements:
Interest Rate Lock Commitments	$	814	Pricing model	Pull through rates	80-85%
Impaired loans	1,825		Discounted Appraisals	Collateral discounts	15-50%
Nonrecurring measurements:
Foreclosed assets	3,828		Discounted appraisals	Collateral discounts	15-50%

The significant unobservable input used in the fair value measurement of the Company’s interest rate lock commitments is the closing ratio, which represents the percentage of loans currently in a lock position which management estimates will ultimately close. Generally, the fair value of an interest rate lock commitment is positive (negative) if the prevailing interest rate is lower (higher) than the interest rate lock commitment rate. Therefore, an increase in the pull through rates (i.e., higher percentage of loans estimated to close) will result in the fair value of the interest rate lock commitments increasing in a gain position, or decreasing in a loss position. The pull through ratio is largely dependent on the loan processing stage that a loan is currently in and the change in prevailing interest rates from the time of the rate lock. The pull through rate is computed based on historical internal data and the ratio is periodically reviewed by the Company’s mortgage banking division.

Due to the nature of the Company’s business, a significant portion of its assets and liabilities consist of financial instruments. Accordingly, the estimated fair values of these financial instruments are disclosed. Quoted market prices, if available, are utilized as an estimate of the fair value of financial instruments. The fair value of such instruments has been derived based on assumptions with respect to future economic conditions, the amount and timing of future cash flows and estimated discount rates. Different assumptions could significantly affect these estimates. Accordingly, the net amounts ultimately collected could be materially different from the estimates presented below. In addition, these estimates are only indicative of the values of individual financial instruments and should not be considered an indication of the fair value of the Company taken as a whole.

Cash and Cash Equivalents. The carrying amounts for cash and cash equivalents are equal to fair value.

Investment Securities Available for Sale. See discussion related to fair value estimates for securities available for sale in the fair value hierarchy section above. There have been no changes in valuation techniques for the nine months ended September 30, 2012. Valuation techniques are consistent with techniques used in prior periods.

Mortgage Loans Held For Sale. The fair value of mortgage loans held for sale is based on commitments on hand from investors within the secondary market for loans with similar characteristics. The changes in fair value of the assets are largely driven by changes in interest rates subsequent to loan funding and changes in the fair value of servicing associated with the mortgage loan for sale. As such, the Company classifies loans measured at fair value on a nonrecurring basis as a Level 2 asset. There have been no changes in valuation techniques for the nine months ended September 30, 2012. Valuation techniques are consistent with techniques used in prior periods.

Loans Held For Investment. The Company does not record loans held-for-investment at fair value on a recurring basis. However, when a loan is considered impaired an allowance for loan losses is established. The fair value of impaired loans is estimated using one of several methods based on portfolio type, acquired and non-acquired. Upon analyzing estimated credit losses in the acquired portfolio, we forecasted expected cash flows over the remaining life of each loan and discounted those expected cash flows to present value at current market interest rates for similar loans considering loan collateral type and credit quality. The fair value of any impaired non-acquired loans would be valued using either collateral value, market value of similar debt, enterprise value, liquidation value or discounted cash flows. There have been no changes in valuation techniques for the nine months ended September 30, 2012. Valuation techniques are consistent with techniques used in prior periods.

Federal Home Loan Bank Stock. Given the option to redeem this stock at par through the FHLB, the carrying value of FHLB stock approximates fair value. There have been no changes in valuation techniques for the nine months ended September 30, 2012. Valuation techniques are consistent with techniques used in prior periods.

- 27 -

CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

Deposits. The fair value of demand deposits, savings, money market and NOW accounts represents the amount payable on demand. The fair value of fixed-maturity certificates of deposit and individual retirement accounts is estimated using the present value of the projected cash flows using interest rates currently offered for instruments of similar remaining maturities. The carrying values of short-term borrowings, including overnight, federal funds purchased and FHLB advances, approximates the fair values due to the short maturities of those instruments. There have been no changes in valuation techniques for the nine months ended September 30, 2012. Valuation techniques are consistent with techniques used in prior periods.

Short-term Borrowings and Long-term Debt. The fair value of short-term borrowings and long-term debt are based upon discounted expected cash flows at the interest rate for debt with the same or similar remaining maturities and collateral requirements could be obtained. There have been no changes in valuation techniques for the nine months ended September 30, 2012. Valuation techniques are consistent with techniques used in prior periods.

Accrued Interest Receivable and Accrued Interest Payable. The carrying amounts of accrued interest receivable and payable approximate fair value due to the short maturities of these instruments. There have been no changes in valuation techniques for the nine months ended September 30, 2012. Valuation techniques are consistent with techniques used in prior periods.

Derivative Instruments. See discussion related to fair value estimates for derivative instruments in the fair value hierarchy section above. There have been no changes in valuation techniques for the nine months ended September 30, 2012. Valuation techniques are consistent with techniques used in prior periods.

- 28 -

CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

The following tables summarize the carrying amounts and estimated fair values of the Company’s financial instruments, none of which are held for trading purposes, at September 30, 2012 and December 31, 2011:

	September 30, 2012
	Carrying amount		Estimated fair value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	14,886	$	14,886	$	14,886	$	—	$	—
Investment securities	132,953		132,953		70		132,883		—
Federal Home Loan Bank stock	1,255		1,255		—		1,255		—
Mortgage loans held for sale	7,023		7,023		—		7,023		—
Loans, net	538,682		540,857		—		—		540,857
Interest rate caps	207		207		—		207		—
Accrued interest receivable	4,156		4,156		—		5,290		—
Financial liabilities:
Deposits	633,899		636,772		—		636,772		—
Long-term debt	12,326		12,462		—		—		12,462
Interest rate swaps	152		152		—		152		—
Accrued interest payable	430		430		—		430		—

	December 31, 2011
	Carrying amount		Estimated fair value
Financial assets:
Cash and cash equivalents	$	25,362	$	25,362
Investment securities	143,504		143,504
Federal Home Loan Bank stock	8,669		8,669
Mortgage loans held for sale	3,841		3,841
Loans, net	551,165		551,165
Accrued interest receivable	2,802		2,802
Financial liabilities:
Deposits	674,418		674,418
Long-term debt	12,216		12,216
Interest rate swaps	330		330
Accrued interest payable	780		780

Note I - Cumulative Perpetual Preferred Stock

Pursuant to the United States Treasury’s TARP Capital Purchase Program (“CPP”), the Company issued $24.9 million in Fixed Rate Cumulative Perpetual Preferred Stock, Series A (“preferred stock” or “Series A Preferred Stock”), on January 9, 2009. In addition, the Company provided a warrant to the Treasury to purchase 833,705 shares of the Company’s common stock at an exercise price of $4.48 per share. These warrants were immediately exercisable and expire ten years from the date of issuance. The preferred stock is non-voting, other than having class voting rights on certain matters, and pays cumulative dividends quarterly at a rate of 5% per annum for the first five years and 9% per annum thereafter. The preferred shares are redeemable at the option of the Company subject to regulatory approval.

- 29 -

CRESCENT FINANCIAL BANCHSARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

Predecessor Company

The Predecessor Company used a Black-Scholes option pricing model to calculate the fair value of the common stock warrants issued pursuant to the TARP CPP and in connection with the Series A Preferred Stock. The common stock warrants were assigned a relative fair value of $2.28 per share, or $2.4 million in the aggregate, at issuance on January 9, 2009. This amount was recorded as the discount on the preferred stock and was accreted as a reduction in net income (loss) available for common stockholders over a five-year period. The relative fair value of the preferred stock at issuance was $22.5 million. Through the discount accretion over the five-year period, the preferred stock was scheduled to accrete up to the redemption amount of $24.9 million. For purposes of these calculations, the fair value of the common stock warrant at issuance was estimated using the Black-Scholes option pricing model based on the following assumptions:

Risk-free interest rate	2.49	%
Expected life of warrants	10 years
Expected dividend yield	—	%
Expected volatility	37.27	%

The Predecessor Company’s computation of expected volatility was based on daily historical volatility of the Company’s common stock since January 9, 2009. The risk-free interest rate was based on the market yield for ten-year U.S. Treasury securities as of the issuance date.

Successor Company

The Successor Company assigned an estimated fair value to both the Series A Preferred Stock and common stock warrants in purchase accounting in connection with the Piedmont Investment. These securities represent non-controlling interests that were recorded at estimated fair value. As discussed in Note B – Mergers and Acquisitions, the preferred stock was valued based on forecasting expected cash flows with an assumed repayment date and discounting these cash flows based on current market yields for similar preferred stock. For purposes of the discount rate, the Successor Company used the market yield on an index of publicly traded preferred stocks adjusted for a liquidity factor. The preferred stock was assigned a non-controlling interest fair value of $24.4 million at the acquisition date, and the discount between this value and the $24.9 million redemption value will be accreted as a reduction in net income (loss) available for common stockholders over a two-year period.

The common stock warrants were valued at $1.59 per share, or $1.3 million in the aggregate, at the acquisition date using a Black-Scholes option pricing model. Assumptions used in the Black-Scholes option pricing model were as follows:

Risk-free interest rate	0.31	%
Expected life of warrants	2 years
Expected dividend yield	—	%
Expected volatility	65.10	%

The risk-free interest rate was based on the market yield for two-year U.S. Treasury securities as of the acquisition date.

As a condition of the TARP CPP, the Company must obtain consent from the U.S. Treasury to repurchase its common stock or to pay a cash dividend on its common stock. Furthermore, the Company has agreed to certain restrictions on executive compensation and is subjected to heightened corporate governance requirements.

On April 12, 2012, the Company received approval from the Federal Reserve Bank of Richmond (the “Federal Reserve Bank”) to resume payment of preferred dividends on TARP Preferred Stock and interest payments due on its subordinated debentures issued in connection with trust preferred securities. The Company deferred dividend payments on its TARP Preferred Stock beginning with the payment due February 15, 2011. The Company paid all deferred cumulative preferred dividends, in the amount of $1.6 million, plus current dividends on the regularly scheduled quarterly payment date of May 15, 2012. The Company deferred interest payments on its trust preferred securities beginning with the payment due April 7, 2011 but continued to accrue interest expense in its consolidated financial statements. The Company paid all accrued deferred interest of $371 plus current interest on the regularly scheduled quarterly payment date of July 7, 2012.

- 30 -

Note J - Recent Accounting Pronouncements

In September 2011, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2011-08, Intangibles — Goodwill and Other, to amend FASB Accounting Standards Codification (“ASC”) Topic 350, Testing Goodwill for Impairment. The amendments in the Update permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Adoption of this update did not have a material impact on the Company’s financial position or results of operations.

In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income, to amend FASB ASC Topic 220, Comprehensive Income. The amendments in this update eliminate the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity and will require them to be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The single statement format would include the traditional income statement and the components and total other comprehensive income as well as total comprehensive income. In the two statement approach, the first statement would be the traditional income statement which would immediately be followed by a separate statement which includes the components of other comprehensive income, total other comprehensive income and total comprehensive income. The amendments in this update are to be applied retrospectively and are effective for the first interim or annual period beginning after December 15, 2011. Adoption of this update did not have a material impact on the Company’s financial position or results of operations.

In May 2011, the FASB issued ASU 2011-04, Amendments to Achieve CommonFair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, to amend ASC Topic 820, Fair Value Measurement. The amendments in this update result in common fair value measurement and disclosure requirements in GAAP and IFRS. Some of the amendments clarify the application of existing fair value measurement requirements and others change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. Many of the previous fair value requirements are not changed by this standard. The amendments in this update are to be applied prospectively and are effective during interim and annual periods beginning after December 15, 2011. Adoption of this update did not have a material impact on the Company’s financial position or results of operations.

In July 2012, the FASB issued ASU 2012-02, Intangibles – Goodwill and Other (Topic 350) – Testing Indefinite-Lived Intangible Assets for Impairment.” ASU 2012-02 gives entities the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that an indefinite-lived intangible asset is impaired. If, after assessing the totality of events or circumstances, an entity determines it is more likely than not that an indefinite-lived intangible asset is impaired, then the entity must perform the quantitative impairment test. If, under the quantitative impairment test, the carrying amount of the intangible asset exceeds its fair value, an entity should recognize an impairment loss in the amount of that excess. Permitting an entity to assess qualitative factors when testing indefinite-lived intangible assets for impairment results in guidance that is similar to the goodwill impairment testing guidance in ASU 2011-08. ASU 2012-02 is effective beginning January 1, 2013 with early adoption permitted. The adoption of ASU 2012-02 is not expected have a material impact on the Company’s financial position or results of operations.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis is intended to assist readers in understanding and evaluating the financial condition and consolidated results of operations of Crescent Financial Bancshares, Inc. (the “Company”). This discussion and analysis includes descriptions of significant transactions, trends and other factors affecting the Company’s operating results for the successor three and nine months ended September 30, 2012 and the predecessor three and nine months ended September 30, 2011 as well as the financial condition of the Company as of September 30, 2012. This discussion should be read in conjunction with the unaudited consolidated financial statements and accompanying notes included in this report.

Crescent State Bank (“CSB” or the “Bank”), which is the wholly-owned banking subsidiary of the Company, is a North Carolina-chartered commercial bank which operates fifteen full-service branch offices in the communities of Cary (2), Apex, Clayton, Holly Springs, Pinehurst, Raleigh (3), Southern Pines, Sanford, Garner, Wilmington (2) and Knightdale, North Carolina. CSB is a community bank with the objective of serving businesses, business owners and professionals within its markets. The following discussion and analysis includes financial results of the Bank, which are consolidated with financial results of the Company. The Company and its consolidated banking subsidiary are collectively referred to herein as the Company unless otherwise noted. The Company also has an interest in Crescent Financial Capital Trust I (the “Trust”). The Trust was formed for the sole purpose of issuing trust preferred securities and is not consolidated with the financial results of the Company.

VantageSouth Bank Merger Agreement

On July 27, 2012, the Company filed an application with the Bank’s regulators to merge VantageSouth Bank, which is 100% owned by Piedmont Community Bank Holdings, Inc. (“Piedmont”), into CSB. Additional information relating to Piedmont’s ownership interest in the Company is found in the “Piedmont Investment” section below. On August 10, 2012, an Agreement and Plan of Merger (“Merger Agreement”) was entered into by the Company, CSB, and VantageSouth Bank to merge VantageSouth Bank into CSB in a share exchange based on the Company’s volume weighted average stock price. Pursuant to terms of the Merger Agreement, outstanding VantageSouth Bank shares will be converted into the Company’s shares equal to the exchange ratio. The exchange ratio will be 4.8204 if the Company’s volume weighted average stock price is at or above $5.25. If the Company’s volume weighted average stock price is at or below $4.75, the exchange ratio will be 5.3278, and if the Company’s volume weighted average stock price is below $5.25 but above $4.75, the exchange ratio will be equal to $25.307 divided by a number equal to the Company’s volume weighted average stock price. VantageSouth Bank’s common stock is not registered under the Exchange Act and, as a result, VantageSouth Bank does not file securities reports with the SEC. However, additional financial and regulatory information is available in Reports of Condition and Income filed quarterly by VantageSouth Bank with the Federal Deposit Insurance Corporation, which are publicly accessible at http://www.fdic.gov. Such reports are not incorporated by reference in this Form 10-Q.

VantageSouth Bank is headquartered in Burlington, North Carolina, and operates five branch offices located in Burlington (2), Fayetteville, and Salisbury (2), North Carolina. As of September 30, 2012, VantageSouth Bank had approximately $260.7 million in total assets and 1,382,961 outstanding common shares. The Company’s board of directors established an independent special committee which evaluated, negotiated, and made a favorable recommendation to the board regarding the proposed merger. The North Carolina Banking Commission granted its formal approval of the Merger on September 26, 2012, and the FDIC granted its final approval of the Merger on October 30, 2012. The completion of the merger is subject to stockholder approval.

East Carolina Bancorp Merger Agreement

On September 25, 2012, Crescent Financial and ECB entered into an Agreement and Plan of Merger (the “ECB Merger Agreement”). Pursuant to the ECB Merger Agreement, ECB will, on the terms and subject to the conditions set forth in the ECB Merger Agreement, merge with and into the Company so that the Company is the surviving bank holding corporation in the merger (the “Merger”). Immediately following the Merger, The East Carolina Bank, a North Carolina banking corporation and a wholly-owned subsidiary of ECB, will be merged with and into Crescent State Bank, a North Carolina banking corporation and a wholly-owned subsidiary of the Company. At the effective time of the Merger (the “Effective Time”), each share of common stock, par value $3.50 per share, of ECB issued and outstanding immediately before the Effective Time (the “ECB Common Stock”), except for shares of ECB Common Stock owned by ECB or the Company (other than certain trust account shares), will be converted into the right to receive 3.55 shares of the common stock, par value $0.001 per share of the Company. The completion of the merger is subject to all required regulatory and stockholder approvals.

ECB is a bank holding company, headquartered in Engelhard, North Carolina, whose wholly-owned subsidiary, The East Carolina Bank, is a state-chartered, independent community bank insured by the FDIC with 25 branch offices in eastern North Carolina stretching from the Virginia to South Carolina state lines east of Interstate 95. ECB offers a full range of financial services including

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Mortgages, Agricultural Banking and Wealth Management services. The Company’s common stock is listed on NYSE Amex under the symbol “ECBE”.

Piedmont Investment

On November 18, 2011, the Company completed the issuance and sale to Piedmont of 18,750,000 shares of common stock for $75.0 million in cash (the “Piedmont Investment”). As part of its investment, Piedmont also made a tender offer to the Company’s stockholders commencing on November 8, 2011 to purchase up to 67% (6,442,105 shares) of the Company’s outstanding common stock at a price of $4.75 per share (“Tender Offer”). Pursuant to the Tender Offer, Piedmont purchased 6,128,423 shares of the Company’s common stock for $29.1 million. As a result of the Piedmont Investment and the Tender Offer, Piedmont owns approximately 88% of the Company’s outstanding common stock.

The Company’s results of operations in the third quarter and first nine months of 2012 were significantly impacted by the controlling investment in the Company by Piedmont. Because of the level of Piedmont’s ownership and control following the controlling investment and the Tender Offer, the Company applied push-down accounting. Accordingly, the Company’s assets and liabilities were adjusted to estimated fair value at the acquisition date, and the allowance for loan losses was eliminated. The Company is currently within the one-year measurement period with respect to the acquisition date, and thus, material adjustments to these purchase accounting fair value adjustments are possible. In the nine months of 2012, goodwill increased by $3.1 million as a result of adjustments to refine the Company’s acquisition date estimate of market rent on two branch leases, adjustments to refine the valuation of certain other real estate owned, and adjustments to refine acquisition date cash flow estimates and the related valuation of certain loans. Balances and activity in the Company’s consolidated financial statements prior to the Piedmont Investment have been labeled with “Predecessor Company” while balances and activity subsequent to the Piedmont Investment have been labeled with “Successor Company.”

Certain Regulatory Restrictions Lifted on Payment of Interest and Dividends

On April 12, 2012, the Company received approval from the Federal Reserve Bank of Richmond (the “Federal Reserve Bank”) to resume payment of preferred dividends on securities issued to the U.S. Treasury in connection with the TARP Capital Purchase Program (“TARP Preferred Stock”) and interest payments due on its subordinated debentures issued in connection with trust preferred securities. The Company deferred dividend payments on its TARP Preferred Stock beginning with the payment due February 15, 2011. The Company paid all deferred cumulative preferred dividends of $1.6 million plus current dividends on the quarterly payment date of May 15, 2012. The Company deferred interest payments on its trust preferred securities beginning with the payment due April 7, 2011 but continued to accrue interest expense in its consolidated financial statements. The Company paid all accrued deferred interest on its trust preferred securities of $371,000 plus current interest on the quarterly payment date of July 7, 2012.

Executive Overview

The following is a summary of the Company’s results of operations and changes in financial condition in the third quarter and first nine months of 2012:

• Net income totaled $337 thousand during the nine months ended September 30, 2012 compared to a net loss of $13.5 million in the predecessor nine months ended September 30, 2011. Net income in the third quarter of 2012 equaled $46 thousand compared to a net loss of $3.0 million in the predecessor third quarter of 2011.

• After the preferred stock dividend, the Company recognized net loss attributable to common shareholders of $0.03 per common share during the first nine months of 2012 compared to a net loss of $1.54 per common share in the predecessor first nine months of 2011. The Company recognized a net loss of $0.01 per common share during the third quarter of 2012 compared to a net loss of $0.36 per common share in the predecessor third quarter of 2011.

• Asset quality continued to improve as non-performing assets decreased to 1.62 percent of total assets at September 30, 2012 from 2.38 percent of total assets at June 30, 2012 and 3.87 percent of total assets at December 31, 2011.

• The Company originated $56.3 million of commercial and consumer loans in the third quarter of 2012 after $48.0 million of loan originations in the second quarter of 2012 and $15.0 million of loan originations on the first quarter of 2012.

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• The taxable equivalent net interest margin improved to 4.38 percent in the first nine months of 2012 from 2.98 percent in the predecessor first nine months of 2011. Net interest margin improved to 4.44 percent in the third quarter of 2012 from 3.17 percent in the predecessor third quarter of 2011.

• Mortgage banking income improved to $2.4 million in the first nine months of 2012 compared to $900 thousand in the predecessor first nine months of 2011. Mortgage banking income improved to $1.1 million in the third quarter of 2012 from $475 thousand in the predecessor third quarter of 2011.

Comparison of Financial Condition as of September 30, 2012

to December 31, 2011

Total assets equaled $793.8 million at September 30, 2012, a decrease of $42.5 million, or 5.1 percent, from total assets of $836.3 million at December 31, 2011. Earning assets totaled $687.8 million, or 86.7 percent of total assets, at September 30, 2012 compared to $723.9 million, or 86.6 percent of total assets, at December 31, 2011. Earning assets at September 30, 2012 consisted of $540.9 million in gross loans held for investment, $134.2 million in investment securities and Federal Home Loan Bank (“FHLB”) stock, $5.6 million in federal funds sold and interest-earning deposits with correspondent banks and $7.0 million in mortgage loans held for sale. Earning assets at December 31, 2011 consisted of $551.4 million in gross loans held for investment, $152.2 million in investment securities and FHLB stock, $16.5 million in federal funds sold and interest-earning deposits and $3.8 million in mortgage loans held for sale. Total deposits and stockholders’ equity at September 30, 2012 were $633.9 million and $142.8 million, respectively, compared to $693.2 million and $143.1 million, respectively, at December 31, 2011.

Loans

Gross loans held for investment, net of deferred loan fees, totaled $540.9 million at September 30, 2012 reflecting a $10.4 million, or 1.9 percent, decrease compared to $551.4 million at December 31, 2011. This decline resulted from a combination of principal payments in the normal course of business, problem asset resolutions, which include loan sales, and a change in the Company’s business model which has shifted the loan portfolio mix to favor business and consumer lending over construction and speculative land loans. Most of the loan categories experienced a balance reduction in the first nine months of 2012, except for commercial loans and, to a lesser extent, residential real estate loans which reflects the Company’s lending strategy and new focus. The changes in the portfolio, by category, were as follows: construction and land development loans, $25.3 million decline, or 30.2 percent; commercial real estate loans, $3.6 million decline, or 1.2 percent; residential 1-4 family mortgage loans, $7.8 million increase, or 11.6 percent; commercial and industrial loans, $17.5 million increase, or 44.5 percent; home equity loans and lines of credit, $8.1 million decline, or 16.5 percent; and consumer loans, $216 thousand increase, or 6.5 percent.

The composition of the Company’s loan portfolio at September 30, 2012 was as follows: 56.7 percent commercial real estate mortgage loans, 10.8 percent construction and land development loans, 13.8 percent residential one-to-four family mortgage loans, 7.6 percent home equity lines and loans, 10.5 percent commercial and industrial loans and consumer loans at 0.6 percent. The composition of the loan portfolio at December 31, 2011 was as follows: 56.1 percent commercial real estate loans, 15.2 percent construction and land development loans, 12.1 percent residential 1-4 family mortgage loans, 8.9 percent home equity loans and lines of credit, 7.1 percent commercial and industrial loans, and consumer loans at 0.6 percent.

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The following table summarizes the gross unpaid borrower principal balances (“UPB”) and carrying amounts in the loan portfolio by type at September 30, 2012 and December 31, 2011:

	September 30, 2012						December 31, 2011
	UPB		Carrying Amount		Carrying Amount as % of UPB		UPB		Carrying Amount		Carrying Amount as % of UPB
Commercial real estate	$	312,722	$	306,722	98.1	%	$	323,426	$	310,315	95.9	%
Residential real estate	76,559		74,760		97.7	%	69,312		67,004		96.7	%
Construction and development	63,671		58,585		92.0	%	109,965		83,930		76.3	%
Commercial	58,640		56,976		97.2	%	41,466		39,434		95.1	%
Home equity loans and lines of credit	42,526		40,875		96.1	%	51,700		48,940		94.7	%
Consumer	3,139		3,084		98.3	%	3,439		3,300		96.0	%
Total loans	$	557,257	$	541,002	97.1	%	$	599,308	$	552,923	92.3	%

Non-performing loans as a percentage of total loans held for investment totaled 1.67 percent at September 30, 2012, which was a decline from 2.90 percent at June 30, 2012 and 4.14 percent at December 31, 2011. Total non-performing assets (which include non-accrual loans, loans past due 90 days or more and still accruing, other real estate owned and repossessed loan collateral) as a percentage of total assets at September 30, 2012 totaled 1.62 percent, which was a decline from 2.38 percent at June 30, 2012 and 3.87 percent at December 31, 2011.

As part of an ongoing, focused effort to reduce its problem asset levels, the Company has completed loan sales to various investors in the first nine months of 2012. Proceeds from these loan sales totaled $14.8 million. Of those sold, loans with a carrying value of $8.1 million were classified as non-performing at year-end 2011. Included in these loan sales was a sale of notes with a total carrying value of $5.0 million to VantageSouth Holdings, LLC, a Delaware limited liability company that is a wholly-owned subsidiary of Piedmont. These loans were sold at estimated fair value, and no gain or loss was recorded on the transaction. For more information regarding non-performing assets, see section below entitled “Non-Performing Assets.”

Allowance for Loan Losses

The allowance for loan losses at September 30, 2012 increased to $2.3 million from $227 thousand at December 31, 2011. The net increase is due to a $3.7 million for loan losses, which was partially offset by $1.7 million in net charge-offs. The allowance for loan losses at September 30, 2012 consisted of $1.3 million related to estimated losses inherent in loans originated subsequent to the Piedmont Investment (“New Loans”), $86 thousand of estimated losses on purchased non-impaired loans, and $907 thousand of impairment on purchased credit-impaired loans. The increase in allowance for loan losses on New Loans was primarily attributable to the origination of approximately $119.3 million in new loans during 2012 rather than credit deterioration of existing loans originated subsequent to the Piedmont Investment.

The following table summarizes the change in allowance for loan losses for new loans, purchased non-impaired loans and purchased credit-impaired loans during the nine months ended September 30, 2012:

	New  Loans		Purchased Non-Impaired			Purchased Credit-Impaired		Total
	(dollars in thousands)
Balance January 1	$	227	$	—		$	—	$	227
Net charge-offs	—		(1,693		)	—		(1,693		)
Provision for loan losses	1,044		1,779			907		3,730
Balance September 30	$	1,271	$	86		$	907	$	2,264

There were no impaired or past due new loans at September 30, 2012 or December 31, 2011. Although purchased non-impaired loans were adjusted to fair value at acquisition, the Company records charge-offs for losses and provides reserves for deterioration

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in credit quality on these loans. All revolving loans were classified as purchased non-impaired at acquisition and a majority of the charge-offs and provision relate to acquired revolving home equity lines of credit.

Loans acquired with evidence of credit deterioration since origination are accounted for as purchased credit-impaired loans. At acquisition date the Company elected to pool loans with similar attributes and risk characteristics. Subsequent to acquisition of these loans, estimates of cash flows expected to be collected are updated each reporting period based on assumptions regarding default rates, loss severities, and other factors that reflect current market conditions. If the Company has probable decreases in cash flows expected to be collected at the pool level (other than due to decreases in interest rates), the provision for loan losses is charged, resulting in an increase to the allowance for loan losses. If there are probable and significant increases in cash flows expected to be collected at the pool level, the Company will first reverse any previously established allowance for loan losses and then increase interest income as a prospective yield adjustment over the remaining life of the loans.

Results of the Company’s third quarter of 2012 cash flow re-estimation are summarized as follows:

	Impairment			Cash Flow Improvement		New Yield		Previous Yield
	(dollars in thousands)
Loan pools with cash flow improvement	$	(143	)	$	1,026	6.44	%	6.09	%
Loan pools with impairment	278			—		8.18	%	8.18	%
Total	$	135		$	1,026	6.67	%	6.49	%

The third quarter of 2012 cash flow re-estimation indicated net improved cash flows on purchased credit-impaired loan pools of $891 thousand. The $1.0 million of cash flow improvement on related loan pools will be recorded as additional interest income as a prospective yield adjustment over the remaining life of the loans. The $135 thousand impairment was recorded to the provision for loan losses in the third quarter of 2012. The pool-level impairment and cash flow improvement were calculated as the difference between the pool-level recorded investment and the net present value of estimated cash flows at the time of the cash flow re-estimation.

For more information regarding the allowance for loan losses, see section below entitled “Analysis of Allowance for Loan Losses.”

Investment Securities

The amortized cost and fair value of the securities portfolio were $129.7 million and $133.0 million, respectively, at September 30, 2012 compared to $143.5 million for both at December 31, 2011. All marketable investment securities are accounted for as available for sale and are recorded at fair value with unrealized gains and losses charged to accumulated other comprehensive income. The investment securities portfolio at September 30, 2012 consisted of residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”), collateralized mortgage obligations (“CMO”), non-taxable and taxable municipal bonds, investment grade corporate bonds and the common stock of two publicly traded companies. All RMBSs and CMOs were issued by either a Government Sponsored Enterprise (“GSE”), such as Federal Home Loan Mortgage Corporation (“Freddie Mac”) or the Federal National Mortgage Association (“Fannie Mae”) or the government-owned Government National Mortgage Association (“Ginnie Mae”). All CMOs were issued by a GSE. The Company’s two CMBSs were issued by non-GSE financial institutions and are Aaa rated by Moody’s.

At September 30, 2012 and December 31, 2011, the securities portfolio had $3.3 million and $525 thousand, respectively, of unrealized gains and $97 thousand and $507 thousand, respectively, of unrealized losses. None of these securities had been in an unrealized loss position for more than twelve months at either date.

The following table summarizes the amortized costs and fair value of available for sale securities at September 30, 2012 and December 31, 2011:

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	September 30, 2012				December 31, 2011
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(dollars in thousands)
Residential mortgage-backed securities – GSE	$	22,692	$	23,312	$	19,452	$	19,364
Commercial mortgage-backed  securities – private	6,759		6,872		—		—
Collateralized mortgage obligations – GSE	47,855		47,918		82,192		82,095
Municipals – non-taxable	15,510		16,218		13,281		13,514
Municipals – taxable	1,635		1,646		—		—
Corporate bonds	35,217		36,917		28,042		27,966
Marketable equity securities	37		70		519		565
Total securities available for sale	$	129,705	$	132,953	$	143,486	$	143,504

The Company also owned $1.3 million and $8.7 million of FHLB stock at September 30, 2012 and December 31, 2011, respectively. This stock is recorded at cost and is classified separately from investment securities on the consolidated balance sheets.

Non-Interest Earning Assets

Total non-interest earning assets decreased from $112.4 million at December 31, 2011 to $106.0 million at September 30, 2012. Cash and due from banks, premises and equipment, bank owned life insurance, and other assets increased by $405 thousand, $398 thousand, $539 thousand, and $249 thousand, respectively. Foreclosed assets declined by $5.2 million as the Company has continued to focus on reducing problem assets through a variety of resolution strategies.

Net deferred tax assets increased by $604 thousand during the first nine months of 2012 to a balance of $30.9 million at September 30, 2012. Deferred tax assets represent, among other items, the tax impact of purchase accounting fair value adjustments as well as predecessor company net operating losses that are available to be carried forward and used to offset future taxable income.

The Company has evaluated its deferred tax assets to determine whether a valuation allowance is necessary. In conducting this evaluation, all available evidence, both positive and negative, was considered based on the more-likely-than-not criteria that such assets will be realized. This evaluation included, but was not limited to: (1) available carry back potential to offset federal tax; (2) potential future reversals of existing deferred tax liabilities, which historically have a reversal pattern generally consistent with deferred tax assets; (3) potential tax planning strategies; and (4) future projected taxable income. Our assessment of future projected taxable income considered significant changes in our operations which occurred because of the recapitalization associated with the Piedmont Investment. These changes include improved capital levels, improved asset quality, significant management and organizational improvements, improved liquidity and improved risk management processes. These factors have significantly improved the Company’s earnings potential since the Piedmont Investment. Based on this evaluation, and considering the weight of the positive evidence compared to the negative evidence, the Company concluded that at September 30, 2012, a valuation allowance was not necessary.

Goodwill and other intangibles totaled $23.1 million and $2.0 million, respectively, and $23.1 million and $2.2 million, respectively, at September 30, 2012 and December 31, 2011. Goodwill represents the excess of purchase price in the Piedmont Investment over the fair value of acquired net assets, including non-controlling interests. As part of the valuation of net assets, the Company also identified and recorded the value of customer deposit relationships, or core deposit intangible, as an other intangible asset. The core deposit intangible is being amortized over its estimated useful life using an accelerated method. The Company is currently within the one-year measurement period with respect to the acquisition date, and thus, material adjustments to purchase accounting fair value adjustments are possible. In the first nine months of 2012, goodwill increased by $3.1 million as a result of adjustments to refine the acquisition date estimate of market rent on two branch leases, adjustments to refine the valuation of certain foreclosed assets, and adjustments to refine acquisition date cash flow estimates and the related valuation of certain loans.

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Deposits

Total deposits at September 30, 2012 were $633.9 million compared to $674.4 million at December 31, 2011, reflecting a $40.5 million decline. Despite the 6.0 percent decrease in total deposits during the first nine months of 2012, there were changes to the mix of deposits within the portfolio which served to reduce the Company’s reliance on non-core funding and improve its cost of funds. Non-core, wholesale time deposits decreased by $32.7 million from $112.0 million at December 31, 2011 to $79.3 million at September 30, 2012. Retail time deposits decreased by $16.2 million, or 8.2 percent. In contrast, money market deposits increased by $63.7 million, or 85.6 percent, growing from $74.4 million at December 31, 2011 to $138.1 million at September 30, 2012. Other interest-bearing, non-maturity deposits declined by a total of $50.6 million, and non-interest bearing demand deposits decreased by $4.8 million during the first nine months of 2012.

The composition of the deposit portfolio, by category, at September 30, 2012 was as follows: 41.2 percent in time deposits, 17.3 percent in interest-bearing demand deposits, 13.6 percent in non-interest bearing demand deposits, 21.8 percent in money market and 6.1 percent in savings. The composition of the deposit portfolio, by category, at December 31, 2011 was as follows: 45.9 percent in time deposits, 22.6 percent in interest-bearing demand deposits, 13.5 percent in non-interest bearing demand deposits, 11.0 percent in money market and 6.9 percent in savings.

At September 30, 2012 and December 31, 2011, the Company had time deposits under $100,000 of $152.5 million and $83.7 million, respectively, and time deposits over $100,000 of $108.4 million and $226.1 million, respectively.

The following table summarizes balances outstanding and average interest rates for each major category of deposits at September 30, 2012 and December 31, 2011: 

	September 30, 2012				December 31, 2011
	Outstanding Balance		Average Rate(1)		Outstanding Balance		Average Rate(2)
	(dollars in thousands)
Non-interest bearing	$	86,454	—		$	91,215	—
Interest bearing demand	109,646		0.31	%	152,180		1.03	%
Money market	138,126		0.68	%	74,404		0.96	%
Savings	38,780		0.17	%	46,840		0.30	%
Retail time deposits	181,619		0.86	%	197,769		0.76	%
Brokered time deposits	79,274		1.28	%	112,010		1.12	%
Total interest bearing deposits	547,445		0.71	%	583,203		0.88	%
Total deposits	$	633,899	0.58	%	$	674,418	0.77	%

(1) Average rate for the three months ended September 30, 2012.

(2) Average rate for the period from November 19 to December 31, 2011.

Borrowings

Total borrowings were $12.3 million at September 30, 2012 compared to $12.2 million at December 31, 2011. Long-term debt at September 30, 2012 and December 31, 2011 consisted of $6.8 million in subordinated term loans issued to a non-affiliated financial institution as well as $5.5 million and $5.4 million, respectively, in junior subordinated debt issued in the form of trust preferred securities. There were no outstanding short-term borrowings, including FHLB advances, at September 30, 2012 or December 31, 2011.

Stockholders’ Equity

Total stockholders’ equity decreased by $215 thousand, from $143.1 million at December 31, 2011 to $142.8 million at September 30, 2012. This decrease was partially due to a $2.1 million decrease in accumulated deficit, which resulted from net income less dividends and accretion on preferred stock in the first nine months of 2012, and was partially offset by a $1.7 million increase in accumulated comprehensive income from higher net unrealized gains on the available for sale securities portfolio.

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Comparison of Results of Operations for the three months ended

September 30, 2012 (Successor) and September 30, 2011 (Predecessor)

The Company’s net income for the three months ended September 30, 2012, before adjusting for the effective dividend on preferred stock, was $46 thousand compared to a net loss of $3.0 million for the predecessor three months ended September 30, 2011. After adjusting for $367 thousand and $442 thousand in dividends and discount accretion on preferred stock for the two respective periods, net loss attributable to common stockholders for the current year third quarter was $321 thousand, or $0.01 per diluted share compared with net loss attributable to common stockholders of $3.4 million, or $0.36 per diluted share for the third quarter of the prior year. Annualized return on average assets was 0.02 percent in the third quarter of 2012 compared to (1.29) percent for the prior year period. Return on average equity for the third quarter of 2012 was 0.13 percent compared to (17.21) percent for the prior year period.

Net Interest Income

Net interest income in the third quarter of 2012 totaled $7.6 million compared to net interest income of $6.8 million in the predecessor third quarter of 2011. Taxable equivalent net interest margin increased from 3.17 percent in the third quarter of 2011 to 4.44 percent in the third quarter of 2012. This significant margin improvement was primarily due to a decline in funding costs as the average rate on total interest-bearing liabilities fell from 2.10 percent in the third quarter of 2011 to 0.87 percent in the third quarter of 2012. Taxable equivalent yield on interest-earning assets increased from 5.05 percent in the third quarter of 2011 to 5.15 percent in the third quarter of 2012. The increase in taxable equivalent yield on interest-earning assets was primarily attributable to an increase in the yield on loans which includes the accretion of discounts on purchased loans.

Average earning assets totaled $689.5 million in the third quarter of 2012, which was a decline from $871.5 million in the third quarter of 2011. The decline in average earning assets was due to balance sheet restructuring late in 2011, purchase accounting fair value adjustments, continued resolution of problem assets, and a change in the Company’s business model which has shifted the loan portfolio mix away from construction and speculative land loans toward commercial loans for operating businesses. This decline was comprised of a $97.2 million decrease in the average balance of loans outstanding, a $72.0 million decrease in the average balance of the securities portfolio and a $12.9 million decrease in the average balances of federal funds sold and other interest-earning cash.

Average interest-bearing liabilities totaled $569.8 million in the third quarter of 2012, which was a decline of $210.6 million, or 27.0 percent, from $780.4 million in the third quarter of 2011. Average total interest-bearing deposits decreased by $65.2 million, or 10.5 percent, from $622.6 million million in the third quarter of 2011 to $557.4 million in the third quarter of 2012. Total average time deposits declined by $80.5 million, of which $59.6 million was related to the Company’s reduction its exposure to brokered deposits. Average total borrowings decreased by $145.4 million, or 92.2 percent, from $157.7 million in the third quarter of 2011 to $12.3 million in the third quarter of 2012. The significant reduction in average borrowings was primarily due to the early redemption of all outstanding FHLB advances following the Piedmont Investment.

The following table summarizes information relating to average balances of the Company’s assets and liabilities as well as the average yield on interest-earning assets, the average cost of interest-bearing liabilities (derived by dividing income or expense by the daily average balance of interest-earning assets or interest-bearing liabilities, respectively), and the net interest margin for the three months ended September 30, 2012 and 2011.

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	Successor Company						Predecessor Company
	Three months ended September 30, 2012						Three months ended September 30, 2011
(Dollars in thousands)	Average Balance		Interest		Average Yield/Cost		Average Balance		Interest		Average Yield/Cost
Assets
Loans1	$	529,127	$	7,953	5.98	%	$	626,279	$	9,030	5.72	%
Investment securities(2),(3)	140,997		970		2.74		212,968		2,052		3.82
Federal funds and other interest-earning	19,346		11		0.22		32,242		18		0.22
Total interest-earning assets(2)	689,470		8,934		5.15	%	871,489		11,100		5.05	%
Non-interest-earning assets	110,236						53,037
Total assets	$	799,706					$	924,526
Liabilities and Equity
Interest-bearing NOW	$	109,120	85		0.31	%	$	144,255	$	494	1.36	%
Money market and savings	181,522		261		0.57		131,112		223		0.68
Time deposits	266,804		646		0.96		347,257		2,001		2.29
Total interest-bearing deposits	557,446		992		0.71		622,624		2,718		1.73
Short-term borrowings	—		—		—		5,000		21		1.70
Long-term debt	12,307		250		8.10		152,748		1,387		3.60
Total interest-bearing liabilities	569,753		1,242		0.87	%	780,372		4,126		2.10	%
Noninterest-bearing deposits	81,387						70,190
Other liabilities	4,062						4,708
Total liabilities	655,202						855,270
Stockholders’ equity	144,504						69,256
Total liabilities and stockholders’ equity	$	799,706					$	924,526
Net interest income, taxable equivalent			$	7,692					$	6,974
Interest rate spread(4)					4.28	%					2.95	%
Tax equivalent net interest margin(5)					4.44	%					3.17	%
Percentage of average interest-earning assets to average interest-bearing liabilities					121.01	%					111.68	%

1. Loans include mortgage loans held for sale in addition to non-accrual loans.

2. Yields related investment securities exempt from income taxes are stated on a taxable-equivalent basis assuming income tax rates of 34.0 percent. The taxable-equivalent adjustment was $78 and $216 for 2012 and 2011, respectively.

3. Investment securities include FHLB stock.

4. Net interest spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.

5. Net interest margin represents annualized net interest income divided by average interest-earning assets.

Provision for Loan Losses

Provision for loan losses in the third quarter of 2012 totaled $958 thousand compared to provision of $4.5 million in the predecessor third quarter of 2011. The Company’s loan portfolio was adjusted to estimated fair value at the Piedmont Investment date, and the allowance for loan losses was eliminated. Therefore, the current quarter provision cannot be meaningfully compared to the prior year quarter due to the application of purchase accounting on the acquired portfolio. In the third quarter of 2012, the Company

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recorded loan loss provisions of $564 thousand on new loans, $259 thousand on purchased non-impaired loans, and $135 thousand on purchased credit-impaired loans.

The following table summarizes the change in allowance for loan losses for new loans, purchased non-impaired loans and purchased credit-impaired loans in the three months ended September 30, 2012:

	New Loans		Purchased Non-Impaired			Purchased Credit-Impaired		Total
	(dollars in thousands)
Balance July 1	$	707	$	634		$	772	$	2,113
Net charge-offs	—		(807		)	—		(807		)
Provision for loan losses	564		259			135		958
Balance September 30	$	1,271	$	86		$	907	$	2,264

For more information on the calculation of the ending allowance for loan losses, see the “Allowance for Loan Losses” discussion in the “Comparison of Financial Condition” section above.

Non-Interest Income

Non-interest income in the third quarter of 2012 totaled $2.3 million compared to $1.4 million in the predecessor third quarter of 2011. The primary reasons for the increase was due to growth in the Company’s mortgage lending business and an increase in realized gains on securities sold in the third quarter of 2012. Total mortgage banking income increased from $475 thousand in the third quarter of 2011 to $1.1 million in the third quarter of 2012. The Company restructured its mortgage lending business following Piedmont’s investment, hired additional experienced mortgage lenders and continues to benefit from the improving housing market in the Raleigh, North Carolina area as well as the currently low interest rate environment that has encouraged refinancings. The gain on sale of available for sale securities increased $474 thousand in the third quarter due to the sale of certain equity securities.

Non-Interest Expense

Non-interest expense in the third quarter of 2012 totaled $8.8 million compared with $6.8 million in the predecessor third quarter of 2011. Salaries and employee benefits increased by $1.1 million due to additions of commercial and mortgage bankers following Piedmont’s investment. Professional services expense increased by $759 thousand, which was primarily due to higher consulting and contract employee expenses. Also contributing to higher non-interest expense was a $191 thousand increase in occupancy and equipment expense.

Partially offsetting the increase in non-interest expense was a reduction of $133 thousand in federal deposit insurance premium expense primarily due to a lower assessed premium rate and a de-leveraged balance sheet that reduced the assessment base.

Income Taxes

The Company’s income tax expense in the third quarter of 2012 totaled $94 thousand, which represented a 67.1 percent effective tax rate on pre-tax income. This effective tax rate was determined by the Company’s statutory income tax rate adjusted primarily for non-taxable municipal investment income and earnings on bank owned life insurance. The Company did not record any tax benefit associated with the pre-tax loss in the predecessor third quarter of 2011. The valuation allowance on deferred tax assets was increased in the prior year period to reflect a full reserve on the tax benefit generated by losses in that quarter.

Because of the improvement in the Company’s earnings prospects following Piedmont’s investment and based on an analysis of positive and negative evidence related to its deferred tax assets, the Company determined that there was sufficient positive evidence to indicate that it would likely realize the full value of its deferred tax assets over time and therefore established no valuation allowance on its deferred tax assets at September 30, 2012.

- 41 -

Comparison of Results of Operations for the nine months ended

September 30, 2012 (Successor) and September 30, 2011 (Predecessor)

The Company’s net income for the nine months ended September 30, 2012, before adjusting for the effective dividend on preferred stock, was $337 thousand compared to a net loss of $13.5 million for the predecessor nine months ended September 30, 2011. After adjusting for $1.1 million and $1.3 million in dividends and discount accretion on preferred stock for the two respective periods, net loss attributable to common stockholders for the first nine months of 2012 was $787 thousand, or $0.03 per diluted share compared to net loss attributable to common stockholders of $14.8 million, or $1.54 per diluted share for the first nine months of the prior year. Annualized return on average assets was 0.06 percent in the first nine months of 2012 compared to (1.91) percent for the prior year period. Return on average equity for the first nine months of 2012 was 0.31 percent compared to (24.59) percent for the prior year period.

Net Interest Income

Net interest income in the first nine months of 2012 totaled $22.9 million compared to net interest income of $19.1 million in the predecessor first nine months of 2011. Taxable equivalent net interest margin increased from 2.98 percent in the first nine months of 2011 to 4.38 percent in the first nine months of 2012. This significant margin improvement was primarily due to a decline in funding costs as the average rate on total interest-bearing liabilities fell from 2.23 percent in the first nine months of 2011 to 0.93 percent in the first nine months of 2012. Tax equivalent yield on earning assets increased from 4.99 percent in the first nine months of 2011 to 5.15 percent in the first nine months of 2012.

Average earning assets totaled $704.6 million in the first nine months of 2012, which was a decline from $892.3 million in the first nine months of 2011. The decline in average earning assets was due to balance sheet restructuring late in 2011, purchase accounting fair value adjustments, continued resolution of problem assets, and a change in the Company’s business model which has shifted the loan portfolio mix away from construction and speculative land loans toward commercial loans for operating businesses. This decline was comprised of a $117.9 million decrease in the average balance of loans outstanding, a $55.3 million decrease in the average balance of the securities portfolio and a $14.5 million decrease in the average balances of federal funds sold and other interest-earning cash.

Average interest-bearing liabilities totaled $582.7 million in the first nine months of 2012, which was a decline of $221.8 million or 27.6 percent, from $804.5 million in the first nine months of 2011. Average total interest-bearing deposits decreased by $77.7 million, or 12.0 percent, from $646.4 million in the first nine months of 2011 to $568.8 million in the first nine months of 2012. Total average time deposits declined by $81.3 million, of which $63.3 million was related to the Company’s reduction in its exposure to brokered deposits. Average total borrowings decreased by $144.1 million, or 91.2 percent, from $158.0 million in the first nine months of 2011 to $13.9 million in the first nine months of 2012. The significant reduction in average borrowings was primarily due to the early redemption of all outstanding FHLB advances following the Piedmont Investment.

Year-to-date accretion of the discount on purchased non-impaired loans added $489 thousand to net interest income in the first nine months of 2012 and increased earning asset yields by 0.09 percent. Additionally, the Company recorded $835 thousand of income in the first nine months of 2012 related to recovery payments in excess of carrying value on certain purchased credit-impaired loans not grouped in pools. These loan recoveries benefited earning asset yields by 0.16 percent. Net amortization of purchase accounting fair value adjustments on interest-bearing liabilities increased net interest income by $2.3 million in the first nine months of 2012 and lowered the cost of interest-bearing liabilities by 0.53 percent. The remaining decline in the cost of interest-bearing liabilities not attributable to amortization of fair value adjustments was due to the repricing and change in mix of deposits to favor low-cost, core deposits.

The following table summarizes information relating to average balances of the Company’s assets and liabilities as well as the average yield on interest-earning assets, the average cost of interest-bearing liabilities (derived by dividing income or expense by the daily average balance of interest-earning assets or interest-bearing liabilities, respectively), and the net interest margin for the nine months ended September 30, 2012 and 2011.

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	Successor Company						Predecessor Company
	Nine months ended September 30, 2012						Nine months ended September 30, 2011
(Dollars in thousands)	Average Balance		Interest		Average Yield/Cost		Average Balance		Interest		Average Yield/Cost
Assets
Loans1	$	527,968	$	24,137	6.11	%	$	645,915	$	27,130	5.62	%
Investment securities(2),(3)	147,363		2,995		2.71		202,621		6,071		4.01
Federal funds and other interest-earning	29,244		48		0.22		43,717		75		0.23
Total interest-earning assets(2)	704,575		27,180		5.15	%	892,253		33,276		4.99	%
Non-interest-earning assets	106,236						54,289
Total assets	$	810,811					$	946,542
Liabilities and Equity
Interest-bearing NOW	$	123,544	466		0.50	%	$	148,855	$	1,950	1.75	%
Money market and savings	161,257		773		0.64		132,339		807		0.82
Time deposits	283,983		2,003		0.94		365,254		6,452		2.36
Total interest-bearing deposits	568,784		3,242		0.76		646,448		9,209		1.90
Short-term borrowings	1,668		2		—		4,549		58		1.71
Long-term debt	12,266		814		8.87		153,481		4,135		3.60
Total interest-bearing liabilities	582,718		4,058		0.93	%	804,478		13,402		2.23	%
Noninterest-bearing deposits	78,900						64,141
Other liabilities	4,514						4,536
Total liabilities	666,132						873,155
Stockholders’ equity	144,680						73,388
Total liabilities and stockholders’ equity	$	810,812					$	946,543
Net interest income, taxable equivalent			$	23,122					$	19,874
Interest rate spread(4)					4.22	%					2.76	%
Tax equivalent net interest margin(5)					4.38	%					2.98	%
Percentage of average interest-earning assets to average interest-bearing liabilities					120.91	%					110.91	%

_____________________________________________________________

1. Loans include mortgage loans held for sale in addition to non-accrual loans.

2. Yields related investment securities exempt from income taxes are stated on a taxable-equivalent basis assuming income tax rates of 34.0 percent. The taxable-equivalent adjustment was $208 and $746 for 2012 and 2011, respectively.

3. Investment securities include FHLB stock.

4. Net interest spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.

5. Net interest margin represents net interest income divided by average interest-earning assets.

Provision for Loan Losses

Provision for loan losses in the first nine months of 2012 totaled $3.7 million compared to provision of $14.5 million in the predecessor first nine months of 2011. The Company’s loan portfolio was adjusted to estimated fair value at the Piedmont Investment date, and the allowance for loan losses was eliminated. Therefore, the current year-to-date period provision cannot be meaningfully compared to the prior year period due to the application of purchase accounting on the acquired portfolio. In the first nine months of 2012, the Company recorded loan loss provisions of $1.0 million on new loans, $1.8 million on purchased non-impaired loans, and $907 thousand on purchased credit-impaired loans.

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The following table summarizes the change in allowance for loan losses for new loans, purchased non-impaired loans and purchased credit-impaired loans in the nine months ended September 30, 2012:

	New  Loans		Purchased  Non-Impaired			Purchased Credit-Impaired		Total
	(dollars in thousands)
Balance January 1	$	227	$	—		$	—	$	227
Net charge-offs	—		(1,693		)	—		(1,693		)
Provision for loan losses	1,044		1,779			907		3,730
Balance September 30	$	1,271	$	86		$	907	$	2,264

For more information on the calculation of the ending allowance for loan losses, see the “Allowance for Loan Losses” discussion in the “Comparison of Financial Condition” section above.

Non-Interest Income

Non-interest income in the first nine months of 2012 totaled $5.7 million compared to $3.6 million in the predecessor first nine months of 2011. The primary reason for this increase is the growth in the Company’s mortgage lending business. Total mortgage banking income increased from $900 thousand in the first nine months of 2011 to $2.4 million in the first nine months of 2012. The Company restructured its mortgage lending business following Piedmont’s investment, hired additional experienced mortgage lenders and continues to benefit from the improving housing market in the Raleigh, North Carolina area as well as the currently low interest rate environment. Other non-interest income increased by $313 thousand primarily due to a benefit of $178 thousand from fair value adjustments on the Company’s interest rate swaps.

Non-Interest Expense

Non-interest expense in the first nine months of 2012 totaled $24.4 million compared with $21.7 million in the predecessor first nine months of 2011. Salaries and employee benefits increased by $2.5 million partially due to a contract termination payment to a former executive and due to the addition of commercial and mortgage bankers following Piedmont’s investment. Other non-interest expense and professional services increased by a combined $1.5 million, which was primarily due to higher contract employee expenses. Also contributing to higher non-interest expense was a $292 thousand increase in occupancy and equipment expense and a $251 thousand increase in data processing expense.

Partially offsetting the increase in year-to-date non-interest expense was a reduction of $439 thousand in federal deposit insurance premium expense primarily due to a lower assessed premium rate and a de-leveraged balance sheet that reduced the assessment base. The Company also reduced foreclosed asset losses by $1.4 million due to a significant reduction in the level of other real estate and foreclosed assets.

Income Taxes

The Company’s income tax expense in the first nine months of 2012 totaled $109 thousand, which represented a 24.4 percent effective tax rate on pre-tax income. Tax expense was determined based on the Company’s statutory income tax rate adjusted primarily for non-taxable municipal investment income and earnings on bank owned life insurance. The Company did not record any tax benefit associated with the pre-tax loss in the predecessor first nine months of 2011. The valuation allowance on deferred tax assets was increased in the prior year period to reflect a full reserve on the tax benefit generated by losses in that period.

Non-Performing Assets

Loans are considered past due when the contractual amounts due with respect to principal and interest are not received within 30 days of the contractual due date. Loans are generally classified as non-accrual if they are past due for a period of more than 90 days, unless such loans are well secured and in the process of collection. If a loan or a portion of a loan is classified as doubtful or as partially charged off, the loan is generally classified as non-accrual. Loans that are on a current payment status or past due less than 90 days may also be classified as non-accrual if repayment in full of principal and/or interest is in doubt. Loans may be returned to accrual status when all principal and interest amounts contractually due (including arrearages) are reasonably assured

- 44 -

of repayment within an acceptable period of time, and there is a sustained period of repayment performance of interest and principal by the borrower in accordance with the contractual terms.

While a loan is classified as non-accrual and the future collectability of the recorded loan balance is doubtful, collections of interest and principal are generally applied as a reduction to the principal outstanding, except in the case of loans with scheduled amortizations where the payment is generally applied to the oldest payment due. When the recorded loan balance has been collected, interest income may be recognized on a cash basis. In the case where a non-accrual loan had been partially charged off, recognition of interest on a cash basis is limited to that which would have been recognized on the recorded loan balance at the contractual interest rate. Receipts in excess of that amount are recorded as recoveries to the allowance for loan losses until prior charge-offs have been fully recovered.

Assets acquired as a result of foreclosure are recorded at estimated fair value in other real estate. Any excess of cost over estimated fair value at the time of foreclosure is charged to the allowance for loan losses. Valuations are periodically performed on these properties, and any subsequent write-downs are charged to earnings. Routine maintenance and other holding costs are included in non-interest expense.

A loan is classified as a troubled debt restructuring (“TDR”) by the Company when certain modifications are made to the loan terms and concessions are granted to the borrowers due to financial difficulty experienced by those borrowers. The Company grants concessions by (1) reduction of the stated interest rate for the remaining original life of the debt or (2) extension of the maturity date at a stated interest rate lower than the current market rate for new debt with similar risk. The Company does not generally grant concessions through forgiveness of principal or accrued interest.

The Company’s policy with respect to accrual of interest on loans restructured in a TDR follows relevant supervisory guidance. That is, if a borrower has demonstrated performance under the previous loan terms and shows capacity to perform under the restructured loan terms, continued accrual of interest at the restructured interest rate is likely. If a borrower was materially delinquent on payments prior to the restructuring but shows the capacity to meet the restructured loan terms, the loan will likely continue as non-accrual until a period of demonstrated performance under new terms has been established. Lastly, if the borrower does not perform under the restructured terms, the loan is placed on non-accrual status. The Company closely monitors these loans and ceases accruing interest on them if management believes that the borrowers may not continue performing based on the restructured note terms.

Non-performing assets consist of non-accrual loans, accruing loans past due 90 days or more, and foreclosed assets. Loans classified as purchased credit-impaired are included in an acquired loan pool and accrete interest based on a pool yield. Therefore, applicable purchased credit-impaired loans are excluded from non-accrual loans and are classified as accruing loans past due 90 days, if applicable.

The table below summarizes information about the Company’s non-performing loans and non-performing assets as well as certain key credit quality ratios at September 30, 2012 and December 31, 2011:

	September 30, 2012			December 31, 2011
	(dollars in thousands)
Non-accrual loans	$	1,695		$	—
Accruing loans past due 90 days or more	7,351			22,888
Foreclosed assets	3,828			9,017
Total non-performing assets	$	12,874		$	31,905
Restructured loans not included above	$	—		$	—
Allowance for loan losses	$	2,264		$	227
Allowance for loan losses to total loans	0.42		%	0.04		%
Non-performing loans to total loans	1.67		%	4.14		%
Non-performing assets to total assets	1.62		%	3.87		%

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The following table below summarizes information about the Company’s non-performing loans by type at September 30, 2012 and December 31, 2011:

	September 30, 2012				December 31, 2011
	Carrying Value		Percentage of Total Loans in Category		Carrying Value		Percentage of Total Loans in Category
	(dollars in thousands)
Construction and development	$	2,900	0.95	%	$	10,710	12.76	%
Commercial real estate	3,873		5.18	%	6,101		1.97	%
Residential real estate	1,113		2.06	%	4,148		6.19	%
Commercial	75		0.13	%	798		2.02	%
Home equity loans and lines of credit	1,080		2.64	%	1,128		2.30	%
Consumer	5		0.15	%	3		0.09	%
Total non-performing loans	$	9,046	1.69	%	$	22,888	4.14	%

Analysis of Allowance for Loan and Lease Losses

The allowance for loan losses is established through periodic charges to earnings in the form of a provision for loan losses. Increases to the allowance for loan losses occur as a result of provisions charged to operations and recoveries of amounts previously charged off, and decreases to the allowance occur when loans are charged off. Management evaluates the adequacy of our allowance for loan losses at least quarterly. The evaluation of the adequacy of the allowance for loan losses includes loans evaluated collectively for impairment and loans evaluated individually for impairment and involves considerations of adverse conditions affecting a borrower’s ability to repay, collateral values, historical loan loss experience, current delinquency levels and trends, loan growth, loan portfolio composition, industry diversification, prevailing economic conditions and all other relevant factors.

Because of the Piedmont Investment, the Company’s assets and liabilities were adjusted to fair value at acquisition, and the allowance for loan losses was eliminated. The Company’s methodology for evaluating the allowance for loan losses applies to all loans originated subsequent to the Piedmont Investment, or new loans, and acquired loans not identified as purchased credit-impaired. The allowance for loan losses of $2.3 million at September 30, 2012 reflected $1.3 million of losses incurred on new loans and $86 thousand of losses incurred on purchased non-impaired loans. For purchased credit-impaired loans, estimates of cash flows expected to be collected are updated each reporting period, and probable pool-level decreases in cash flows are charged to the provision for loan losses. Total impairment of $907 thousand was recorded to the allowance for loan losses on purchased credit-impaired loans at September 30, 2012.

The Company uses an internal grading system to assign the degree of inherent risk on each loan in the portfolio. The risk grade is initially assigned by the lending officer and reviewed by the loan administration function. The internal risk grading system is reviewed and tested periodically by an independent third party credit review firm. The allowance for loan losses model uses the Company’s internal loan grading system to segment each category of loans by risk grade. The Company’s internal grading system is comprised of four different risk classifications. Generally, loans with a risk grade of Pass demonstrate various degrees of risk, but each is considered to have the capacity to perform in accordance with the terms of the loan. These loans are evaluated collectively for impairment. Loans with a risk grade of Special Mention, Substandard or Doubtful are generally considered impaired and are individually evaluated for impairment if the balance of the borrowing relationship exceeds $100 thousand. Certain Special Mention loans which continue to accrue interest and have not been restructured are not considered impaired.

The loss rates applied to non-impaired loans are determined based on historical charge-off rates and certain qualitative factors. For each loan type, the average historical charge-off rate is calculated over a two year period. Additionally, qualitative factors are added which reflect current economic conditions and trends. Together, these two components comprise the loss rates for loans evaluated collectively for impairment.

Loans that are identified through the Company’s internal loan grading system as impaired are evaluated individually for impairment. Each loan is analyzed to determine the net value of collateral and an estimate of loss. The net value of collateral based on the Company’s analysis is determined using various subjective discounts, selling expenses and a review of the assumptions used to

- 46 -

generate the current appraisal. If the analysis of a real estate collateral-supported loan results in an estimated loss, a specific reserve is recorded. When an impaired loan is determined to be collateral dependent and the borrower or guarantors no longer demonstrate the ability of willingness to service the debt, the loan is charged down to its estimated fair value.

The Company’s regulators, as an integral part of their examination process, periodically review the allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance for loan losses based on their judgments about all relevant information available to them at the time of their examination. Any adjustments to original estimates are made in the period in which the factors and other considerations indicate that adjustments to the allowance for loan losses are necessary.

The following table summarizes the allocation of the allowance for loan losses among various categories of loans at September 30, 2012 and December 31, 2011: 

	September 30, 2012				December 31, 2011
	Amount		% of Total Allowance		Amount		% of Total Allowance
	(dollars in thousands)
Commercial real estate	$	691	30.52	%	$	126	55.51	%
Residential real estate	711		31.40		27		11.89
Commercial Construction	341		15.06		19		8.37
Commercial and Industrial	460		20.32		30		13.22
Consumer Construction	19		0.84		2		0.88
Home equity	35		1.55		20		8.81
Consumer	7		0.31		3		1.32
Total allowance for loan losses	$	2,264	100.00	%	$	227	100.00	%

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The following table summarizes information regarding changes in the allowance for loan losses for the nine months ended September 30, 2012 and 2011: 

	Successor Company			Predecessor Company
	Nine months ended September 30, 2012			Nine months ended September 30, 2011
	(dollars in thousands)
Allowance for loan losses, beginning of period	$	227		$	20,702
Charge-offs:
Commercial real estate	—			2,394
Commercial and Industrial	105			1,556
Commercial Construction	46			7,965
Residential real estate	3			520
Consumer Construction	—			—
Home equity	1,404			794
Consumer	135			29
Total charge-offs	1,693			13,258
Recoveries:
Commercial real estate	—			37
Commercial and Industrial	—			83
Commercial Construction	—			447
Residential real estate	—			45
Consumer Construction	—			—
Home equity	—			32
Consumer	—			2
Total recoveries	—			646
Net charge-offs	1,693			12,612
Provision for loan losses	3,730			14,511
Allowance for loan losses, end of period	$	2,264		$	22,601
Net charge-offs to average loans (annualized)	0.43		%	2.61		%

Liquidity and Capital Resources

Liquidity management involves the ability to fund the needs and requirements of depositors and borrowers, paying operating expenses and ensuring compliance with regulatory liquidity requirements. To ensure the Company is positioned to meet immediate and future cash demands, it relies on internal analysis of liquidity, knowledge of current economic and market trends and forecasts of future conditions. Investment portfolio principal payments and maturities, loan principal payments, deposit growth, brokered deposit sources, and available borrowings from the FHLB, the Federal Reserve Bank and a federal funds line are the primary sources of liquidity for the Company. The primary uses of liquidity are repayments of borrowings, disbursements of loan proceeds and investment purchases.

At September 30, 2012, liquid assets (which include cash and due from banks, interest-earning deposits with banks, federal funds sold and investment securities available for sale) totaled $147.8 million, which represented 18.6 percent of total assets and 23.3 percent of total deposits. Supplementing this on-balance sheet liquidity, the Company has available off-balance sheet liquidity in the form of lines of credit from various correspondent banks which totaled $327.0 million at September 30, 2012. At September 30, 2012, outstanding commitments for undisbursed lines of credit and letters of credit totaled $111.6 million and outstanding capital commitments to a private investment fund were $175 thousand. Management believes that the aggregate liquidity position of the Company is sufficient to meet deposit maturities and withdrawals, borrowing commitments and loan funding requirements. Core deposits (total deposits less brokered deposits), one of our most stable sources of liquidity, together with common equity capital funded $672.9 million, or 84.8 percent, of total assets at September 30, 2012 compared with $681.0 million, or 81.4 percent, of total assets at December 31, 2011.

Total stockholders’ equity decreased by $215 thousand, from $143.1 million at December 31, 2011 to $142.8 million at September 30, 2012. This decrease was partially due to a $2.1 million decrease in retained earnings, which resulted from net income less dividends and accretion on preferred stock in the first nine months of 2012, and was partially offset by a $1.7 million increase in accumulated comprehensive income from higher net unrealized gains on the available for sale securities portfolio.

- 48 -

Certain capital ratios are required to be reported in periodic regulatory filings by bank holding companies and individual banks owned by those holding companies. However, due to the Piedmont ownership of the Company, only Piedmont and CSB are required to file such reports. Therefore, the capital ratios for the Company provided below are based on the calculation requirements of such reports but will not be filed with any regulatory agencies. At September 30, 2012, the Company had a leverage ratio of 12.4 percent, a Tier 1 capital ratio of 14.1 percent, and a total risk-based capital ratio of 15.5 percent. These ratios exceed all federal regulatory capital requirements. The Company’s tangible equity to tangible assets ratio increased from 14.52 percent at December 31, 2011 to 15.31 percent at September 30, 2012, and its tangible common equity to tangible assets ratio decreased slightly from 11.50 percent at December 31, 2011 to 12.11 percent at September 30, 2012. At September 30, 2012, CSB had a leverage ratio of 12.21 percent and a total risk-based capital ratio of 15.20 percent.

Capital Analysis
	September 30, 2012			Regulatory Minimum		Well Capitalized Requirement
	(Dollars in thousands)
Tier 1 capital	$	92,534
Tier 2 capital	9,109
Total capital	$	101,643
Risk-adjusted assets	$	655,789
Risk-based capital ratios
Tier 1 capital	14.11		%	4.00	%	6.00	%
Total capital	15.50		%	8.00	%	10.00	%
Tier 1 leverage	12.43		%	3.00	%	5.00	%
Other Ratios
Tangible equity to tangible assets	15.31		%
Tangible common equity to tangible assets	12.11		%

On April 12, 2012, the Company received approval from the Federal Reserve Bank to resume payment of preferred dividends on its TARP Preferred Stock and interest payments due on its subordinated debentures issued in connection with trust preferred securities. The Company deferred dividend payments on its TARP Preferred Stock beginning with the payment due February 15, 2011. The Company paid all deferred cumulative preferred dividends of $1.6 million plus current dividends on the quarterly payment date of May 15, 2012. The Company deferred interest payments on its trust preferred securities beginning with the payment due April 7, 2011 but continued to accrue interest expense in its consolidated financial statements. The Company paid all accrued deferred interest of $371,000 plus current interest on the quarterly payment date of July 7, 2012.

- 49 -

Forward-Looking Information

This quarterly report on Form 10-Q contains certain “forward-looking statements” that represent management’s judgments concerning the future and are subject to risks and uncertainties that could cause the Company’s actual operating results and financial position to differ materially from those projected in the forward-looking statements. Such forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “anticipate,” “should,” “would,” “project,” “future,” “strategy,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “intend,” “seeks,” or other similar words and expressions of the future. Risks and other factors that could influence the estimates include risks associated with the ownership by Piedmont of a majority of the Company’s voting power, including interests of Piedmont differing from other stockholders or any change in management, strategic direction, business plan, or operations, the Company’s new management’s ability to successfully integrate into the Company’s business and execute its business plan, local economic conditions affecting retail and commercial real estate, disruptions in the credit markets, particularly in light of continued economic uncertainty in the European Union, continued political unrest and instability in the Middle East; changes in interest rates, adverse developments in the real estate market affecting the value and marketability of collateral securing loans made by the Bank, the failure of assumptions underlying loan loss and other reserves, competition and the risk of new and changing regulation, including, but not limited to recent proposals that would change capital standards and asset risk-weighting for financial institutions. Additional factors that could cause actual results to differ materially are discussed in the Company’s filings with the Securities and Exchange Commission, including without limitation its Annual Report on Form 10-K. The forward-looking statements in this Quarterly Report on Form 10-Q speak only as of the date hereof, and the Company does not assume any obligation to update such forward-looking statements, except as may otherwise be required by law.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company’s primary market risk is interest rate risk. Interest rate risk is the result of differences in the maturity or timing of coupon adjustments of bank assets, liabilities and off-balance sheet instruments (re-pricing or maturity mismatch risk), the risk of changes in the slope of the yield curve (yield curve risk), and the risk from imperfect correlations in the adjustment of rates earned and paid on different instruments with otherwise similar re-pricing characteristics (basis risk). These conditions may impact the earnings generated by the Company’s interest earning assets or the cost of its interest bearing liabilities, thus directly impacting the Company’s overall earnings. The Company’s management actively monitors and manages interest rate risk. One way this is accomplished is through the development of and adherence to the Company’s asset/liability policy. This policy sets forth management’s strategy for measuring, monitoring and mitigating the risk characteristics of the Company’s interest earning assets and liabilities. The Company’s market risk profile has not changed significantly since December 31, 2011.

Item 4. Controls and Procedures

The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of September 30, 2012. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by the Company in the reports filed or submitted by it under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to provide reasonable assurance that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in the Company’s internal controls over financial reporting during the period covered by this Quarterly Report that have materially affected, or are reasonably likely to materially affect, these internal controls.

- 50 -

Part II.          Other information

Item 1. Legal Proceedings

The Company is involved in legal proceedings which arise in the ordinary course of business, none of which are considered material.

Item 1a. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2011, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Debt

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

- 51 -

Item 6. Exhibits

31.1	Certification of Principal Executive Officer pursuant to Rule 13a – 14(a).
31.2	Certification of Principal Financial Officer pursuant to Rule 13a – 14(a).
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
2.1	Agreement and Plan of Merger, dated August 10, 2012, by and among Crescent Financial Bancshares, Inc., Crescent State Bank and VantageSouth Bank.(1)
2.2	Agreement and Plan of Merger, dated as of September 25, 2012, by and between ECB Bancorp, Inc. and Crescent Financial Bancshares, Inc. (2)
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.

_____________________________________________________________

(1) Incorporated by reference to the Exhibit 2.1 to Crescent Financial Bancshares, Inc.'s Current Report on Form 8-K dated August 13, 2012.

(2) Incorporated by reference to the Exhibit 2.1 to Crescent Financial Bancshares, Inc.'s Current Report on Form 8-K dated September 25, 2012.

* XBRL information is deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act, is deemed not filed for purposes of Section 18 of the Exchange Act, and otherwise is not subject to liability under these sections.

- 52 -

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		CRESCENT FINANCIAL BANCSHARES, INC.
Date:	November 13, 2012	By:	/s/ Scott M. Custer
			Scott M. Custer
			President and Chief Executive Officer
Date:	November 13, 2012	By:	/s/ Terry S. Earley
			Terry S. Earley
			Executive Vice President and Chief  Financial Officer

- 53 -

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Pursuant to Rule 13a – 14(a)

I, Scott M. Custer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Crescent Financial Bancshares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13(a)-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 13, 2012	By:	/s/ Scott M. Custer
			Scott M. Custer
			President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

Pursuant to Rule 13a – 14(a)

I, Terry S. Earley, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Crescent Financial Bancshares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13(a)-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 13, 2012	By:	/s/ Terry S. Earley
			Terry S. Earley
			Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer Regarding Periodic Report Containing Financial Statements pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, Scott M. Custer, the Chief Executive Officer of Crescent Financial Bancshares, Inc., in compliance with 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify that, (i) the Form 10-Q filed by Crescent Financial Bancshares, Inc. (the "Issuer") for the quarter ended September 30, 2012, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in that report fairly presents, in all material respects, the financial condition and results of operations of the Issuer on the dates and for the periods presented therein.

Date:	November 13, 2012	By:	/s/ Scott M. Custer
			Scott M. Custer
			President and Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer Regarding Periodic Report Containing Financial Statements pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, Terry S. Earley, the Chief Financial Officer of Crescent Financial Bancshares, Inc., in compliance with 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify that, (i) the Form 10-Q filed by Crescent Financial Bancshares, Inc. (the "Issuer") for the quarter ended September 30, 2012, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in that report fairly presents, in all material respects, the financial condition and results of operations of the Issuer on the dates and for the periods presented therein.

Date:	November 13, 2012	By:	/s/ Terry S. Earley
			Terry S. Earley
			Executive Vice President and Chief Financial Officer

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 5) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Pledged Financial Instruments, Not Separately Reported, Loans Receivable Pledged as Collateral	$ 180,655	$ 217,095
Recorded Investment	1,283	551,437
Unpaid Principal Balance	1,825
Related Allowance	0
Average Recorded Investment	611
Interest Income Recognized	0
Commercial Real Estate [Member]
Recorded Investment	464
Unpaid Principal Balance	464
Related Allowance	0
Average Recorded Investment	116
Interest Income Recognized	0
Residential Real Estate [Member]
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	0
Construction and Development [Member]
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	0
Commercial Loan [Member]
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	0
Consumer Construction and development [Member]
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	0
Home Equity Line Of Credit [Member]
Recorded Investment	819
Unpaid Principal Balance	1,361
Related Allowance	0
Average Recorded Investment	495
Interest Income Recognized	0
Consumer Loan [Member]
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	0
With No Related Allowance Recorded [Member]
Recorded Investment	1,283
Unpaid Principal Balance	1,825
Related Allowance	0
Average Recorded Investment	373
Interest Income Recognized	0
With No Related Allowance Recorded [Member] | Commercial Real Estate [Member]
Recorded Investment	464
Unpaid Principal Balance	464
Related Allowance	0
Average Recorded Investment	116
Interest Income Recognized	0
With No Related Allowance Recorded [Member] | Residential Real Estate [Member]
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	0
With No Related Allowance Recorded [Member] | Construction and Development [Member]
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	0
With No Related Allowance Recorded [Member] | Commercial Loan [Member]
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	0
With No Related Allowance Recorded [Member] | Consumer Construction and development [Member]
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	0
With No Related Allowance Recorded [Member] | Home Equity Line Of Credit [Member]
Recorded Investment	819
Unpaid Principal Balance	1,361
Related Allowance	0
Average Recorded Investment	257
Interest Income Recognized	0
With No Related Allowance Recorded [Member] | Consumer Loan [Member]
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	0
With Related Allowance Recorded [Member]
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	238
Interest Income Recognized	0
With Related Allowance Recorded [Member] | Commercial Real Estate [Member]
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	0
With Related Allowance Recorded [Member] | Residential Real Estate [Member]
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	0
With Related Allowance Recorded [Member] | Construction and Development [Member]
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	0
With Related Allowance Recorded [Member] | Commercial Loan [Member]
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	0
With Related Allowance Recorded [Member] | Consumer Construction and development [Member]
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	0
With Related Allowance Recorded [Member] | Home Equity Line Of Credit [Member]
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	238
Interest Income Recognized	0
With Related Allowance Recorded [Member] | Consumer Loan [Member]
Recorded Investment	0
Unpaid Principal Balance	0
Related Allowance	0
Average Recorded Investment	0
Interest Income Recognized	$ 0

XML

CUMULATIVE PERPETUAL PREFERRED STOCK (Details Textual) (USD $)	1 Months Ended	9 Months Ended						9 Months Ended				9 Months Ended
	Jan. 31, 2009	Sep. 30, 2012	Jan. 09, 2009	Jul. 07, 2012 Subsequent Event [Member] Troubled Asset Relief Program Subordinated Debt [Member]	May 15, 2012 Subsequent Event [Member] Troubled Asset Relief Program Subordinated Debt [Member]	Sep. 30, 2012 Fixed Rate Cumulative Perpetual Preferred Stock [Member]	Jan. 09, 2009 Fixed Rate Cumulative Perpetual Preferred Stock [Member]	Sep. 30, 2012 Maximum [Member] Fixed Rate Cumulative Perpetual Preferred Stock [Member]	Sep. 30, 2012 Minimum [Member] Fixed Rate Cumulative Perpetual Preferred Stock [Member]	Sep. 30, 2012 Predecessor [Member]	Jan. 09, 2009 Predecessor [Member]	Sep. 30, 2012 Successor [Member]	Sep. 30, 2012 Successor [Member] Noncontrolling Interest [Member]
Procceds From Issuance Of Cumulative Perpetual Preferred Stock						$ 24,900,000	$ 24,900,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			833,705
Class Of Warrant Or Right Exercise Price Warrants Or Rights			$ 4.48
Warrants Expiry Period	10 years
Preferred Stock, Dividend Rate, Percentage								9.00%	5.00%
Class Of Warrants And Right Fair Value Per Share										$ 2.28
Class Of Warrants and Right, Fair Value Disclosure											2,400,000
Mandatorily Redeemable Preferred Stock, Fair Value Disclosure											22,500,000		24,400,000
Preferred Stock, Redemption Amount											24,900,000
Warrants Not Settleable In Cash, Fair Value, Per Share												$ 1.59
Warrants Not Settleable in Cash, Fair Value Disclosure												1,300,000
Cumulative Dividends					1,600,000
Interest Payable, Current				$ 371,000
Discount Accretion Period		2 years								5 years		5 years

XML

FAIR VALUE MEASUREMENT (Details 3) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012 Fair Value, Inputs, Level 1 [Member]	Sep. 30, 2012 Fair Value, Inputs, Level 2 [Member]	Sep. 30, 2012 Fair Value, Inputs, Level 3 [Member]	Dec. 31, 2011 Predecessor [Member]		Sep. 30, 2011 Predecessor [Member]	Dec. 31, 2010 Predecessor [Member]	Sep. 30, 2012 Successor [Member]	Dec. 31, 2011 Successor [Member]	Sep. 30, 2012 Successor [Member] Fair Value, Inputs, Level 1 [Member]	Sep. 30, 2012 Successor [Member] Fair Value, Inputs, Level 2 [Member]	Sep. 30, 2012 Successor [Member] Fair Value, Inputs, Level 3 [Member]
Financial assets:
Cash and cash equivalents at carrying value				$ 25,362		$ 31,517	$ 49,106	$ 14,886	$ 25,362
Investment securities at carrying value				143,504	[1]			132,953
Federal Home Loan Bank stock at carrying value				8,669	[1]			1,255
Mortgage loans held for sale at carrying value				3,841	[1]			7,023
Loans held for investment, net at carrying value				551,165				538,682
Accrued interest receivable at carrying value				2,802				4,156
Cash and cash equivalents	14,886	0	0	25,362				14,886
Investment securities	70	132,883	0	143,504				132,953
Federal Home Loan Bank stock				8,669				1,255		0	1,255	0
Mortgage loans held for sale			0	3,841				7,023		0	7,023
Loans, net	0	0	540,857	551,165				540,857
Interest rate cap								207
Interest Rate Cap Fair Value	0	207	0					207
Accrued interest receivable	0	5,290	0	2,802				4,156
Financial liabilities:
Deposits at carrying value				674,418				633,899
Long-term debt at carrying value				12,216	[1]			12,326
Interest rate swaps at carrying value				330				152
Accrued interest payable at carrying value				780				430
Deposits	0	636,772	0	674,418				636,772
Long-term debt	0	0		12,216				12,462				12,462
Interest rate swaps	0	152	0	330				152
Accrued interest payable	$ 0	$ 430	$ 0	$ 780				$ 430

[1] Derived from audited consolidated financial statements.

XML

INVESTMENT SECURITIES (Details Textual) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012 equity_security municipal_security mortgage_obligations mortgage_backed_security	Dec. 31, 2011
Number of mortgage obligations	11
Number of Mortgage Backed Securitites	4
Number of Municipal Securities	3
Number of Equity Securities	1
Deposit Liabilities, Collateral Issued, Financial Instruments	$ 34,108	$ 43,900
Investment Securities Percentage	10.00%

XML

CUMULATIVE PERPETUAL PREFERRED STOCK (Table)

9 Months Ended

Sep. 30, 2012

Successor [Member]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

Risk-free interest rate	0.31	%
Expected life of warrants	2 years
Expected dividend yield	—	%
Expected volatility	65.10	%

Predecessor [Member]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

For purposes of these calculations, the fair value of the common stock warrant at issuance was estimated using the Black-Scholes option pricing model based on the following assumptions:

Risk-free interest rate	2.49	%
Expected life of warrants	10 years
Expected dividend yield	—	%
Expected volatility	37.27	%

XML

DERIVATIVE FINANCIAL INSTRUMENTS (Details Textual) (USD $)	1 Months Ended	9 Months Ended							1 Months Ended			1 Months Ended
	Jun. 30, 2009	Sep. 30, 2012	Sep. 26, 2008	Jun. 30, 2009 Three Year Swap [Member] Trust Preferred Securities Subject to Mandatory Redemption [Member]	Jun. 30, 2009 Four Year Swap [Member] Trust Preferred Securities Subject to Mandatory Redemption [Member]	Jun. 30, 2009 Subordinated Deferrable Interest Debentures [Member] Three Year Swap [Member]	Jun. 30, 2009 Subordinated Deferrable Interest Debentures [Member] Four Year Swap [Member]	Sep. 30, 2012 Junior Subordinated Debt [Member]	Sep. 26, 2008 Unsecured Subordinated Term Loan [Member]	Jul. 31, 2012 Unsecured Subordinated Term Loan [Member]	Jul. 31, 2012 Trust Preferred Securities [Member]	Aug. 31, 2003 Trust Preferred Securities [Member] Crescent Financial Capital Trust I [Member]
Proceeds from Issuance of Trust Preferred Securities												$ 8,000,000
Derivative, Cap Interest Rate										4.47%	3.57%
Subordinated Debt		6,800,000	7,500,000					5,500,000
Subordinated Borrowing, Interest Rate			4.00%
Trust Preferred Securitites Contract Rate												3.10%
Debt Instrument, Interest Rate Terms		The TRUPs pay cumulative cash distributions quarterly at an annual contract rate, reset quarterly, equal to three-month LIBOR plus 3.10%.							The agreement requires the Bank to make quarterly payments of interest at an annual contract rate, reset quarterly, equal to three-month LIBOR plus 4.00%.
Derivative, Fixed Interest Rate				5.49%	5.97%	6.39%	6.87%
Pledged Financial Instruments Interest Rate Swaps		$ 780,000
Derivative Financial Instruments Description	one-half of the notional amount

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 3) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Commercial, Construction		$ 519
Consumer, Construction		0
Consumer, Home equity		0
Total	541,003	551,437
Acquired Loans [Member]
Commercial, Real estate	239,664	302,668
Commercial and industrial	28,438	38,108
Commercial, Construction	45,169	74,525
Consumer, Residential real estate	55,199	64,918
Consumer, Construction	3,229	8,265
Consumer, Home equity	37,740	48,514
Consumer, Loans to individuals	2,177	3,174
Total	411,616	540,172
Acquired Loans [Member] | Pass [Member]
Commercial, Real estate	184,892	253,505
Commercial and industrial	25,430	33,636
Commercial, Construction	21,403	39,122
Consumer, Residential real estate	44,512	51,318
Consumer, Construction	2,638	7,331
Consumer, Home equity	34,469	42,766
Consumer, Loans to individuals	2,077	2,795
Total	315,421	430,473
Acquired Loans [Member] | Special Mention [Member]
Commercial, Real estate	40,891	34,877
Commercial and industrial	1,337	2,213
Commercial, Construction	17,216	22,482
Consumer, Residential real estate	4,177	5,155
Consumer, Construction	166	176
Consumer, Home equity	1,264	2,064
Consumer, Loans to individuals	83	336
Total	65,134	67,303
Acquired Loans [Member] | Substandard [Member]
Commercial, Real estate	13,881	13,907
Commercial and industrial	1,671	2,259
Commercial, Construction	6,166	12,402
Consumer, Residential real estate	6,379	8,300
Consumer, Construction	425	758
Consumer, Home equity	2,007	3,684
Consumer, Loans to individuals	17	43
Total	30,546	41,353
Acquired Loans [Member] | Doubtful [Member]
Commercial, Real estate	0	379
Commercial and industrial	0	0
Commercial, Construction	384
Consumer, Residential real estate	131	145
Consumer, Construction	0
Consumer, Home equity	0
Consumer, Loans to individuals	0	0
Total	515	1,043
Acquired Loans [Member] | Days Past Due 30 89 [Member]
Commercial, Real estate	1,757	3,878
Commercial and industrial	610	925
Commercial, Construction	561	4,809
Consumer, Residential real estate	752	2,289
Consumer, Construction	132	652
Consumer, Home equity	671	740
Consumer, Loans to individuals	83	3
Total	4,566	13,296
Acquired Loans [Member] | Greater Than 89 Days Past Due Accruing [Member]
Commercial, Real estate	3,408	6,101
Commercial and industrial	0	798
Commercial, Construction	2,733	10,328
Consumer, Residential real estate	1,113	4,148
Consumer, Construction	97	382
Consumer, Home equity	0	1,128
Consumer, Loans to individuals	0	3
Total	7,351	22,888
Acquired Loans [Member] | Nonaccrual [Member]
Commercial, Real estate	464	0
Commercial and industrial	68	0
Commercial, Construction	23	0
Consumer, Residential real estate	0	0
Consumer, Construction	48	0
Consumer, Home equity	1,080	0
Consumer, Loans to individuals	5	0
Total	1,688	0
Acquired Loans [Member] | Total Past Due [Member]
Commercial, Real estate	5,629	9,979
Commercial and industrial	678	1,723
Commercial, Construction	3,317	15,137
Consumer, Residential real estate	1,865	6,437
Consumer, Construction	277	1,034
Consumer, Home equity	1,751	1,868
Consumer, Loans to individuals	88	6
Total	13,605	36,184
Acquired Loans [Member] | Loans Not Past Due [Member]
Commercial, Real estate	234,035	292,689
Commercial and industrial	27,760	36,385
Commercial, Construction	41,852	59,388
Consumer, Residential real estate	53,334	58,481
Consumer, Construction	2,952	7,231
Consumer, Home equity	35,989	46,646
Consumer, Loans to individuals	2,089	3,168
Total	398,011	503,988
Loans Originated By Company [Member]
Commercial, Real estate	67,058	7,647
Commercial and industrial	28,538	993
Commercial, Construction	8,921	138
Consumer, Residential real estate	19,561	1,739
Consumer, Construction	1,267	196
Consumer, Home equity	3,135	426
Consumer, Loans to individuals	907	126
Total	129,387	11,265
Loans Originated By Company [Member] | Pass [Member]
Commercial, Real estate	67,058	7,647
Commercial and industrial	28,513	894
Commercial, Construction	5,985	138
Consumer, Residential real estate	19,437	1,739
Consumer, Construction	1,267	196
Consumer, Home equity	3,135	426
Consumer, Loans to individuals	906	126
Total	126,301	11,166
Loans Originated By Company [Member] | Special Mention [Member]
Commercial, Real estate	0	0
Commercial and industrial	18	99
Commercial, Construction	2,598	0
Consumer, Residential real estate	124	0
Consumer, Construction	0	0
Consumer, Home equity	0	0
Consumer, Loans to individuals	1	0
Total	2,741	99
Loans Originated By Company [Member] | Substandard [Member]
Commercial, Real estate	0	0
Commercial and industrial	7	0
Commercial, Construction	338	0
Consumer, Residential real estate	0	0
Consumer, Construction	0	0
Consumer, Home equity	0	0
Consumer, Loans to individuals	0	0
Total	345	0
Loans Originated By Company [Member] | Doubtful [Member]
Commercial, Real estate	0	0
Commercial and industrial	0	0
Commercial, Construction	0	0
Consumer, Residential real estate	0	0
Consumer, Construction	0	0
Consumer, Home equity	0	0
Consumer, Loans to individuals	0	0
Total	0	0
Loans Originated By Company [Member] | Days Past Due 30 89 [Member]
Commercial, Real estate	3,036	0
Commercial and industrial	0	0
Commercial, Construction	0	0
Consumer, Residential real estate	0	0
Consumer, Construction	0	0
Consumer, Home equity	0	0
Consumer, Loans to individuals	0	0
Total	3,036	0
Loans Originated By Company [Member] | Greater Than 89 Days Past Due Accruing [Member]
Commercial, Real estate	0	0
Commercial and industrial	0	0
Commercial, Construction	0	0
Consumer, Residential real estate	0	0
Consumer, Construction	0	0
Consumer, Home equity	0	0
Consumer, Loans to individuals	0	0
Total	0	0
Loans Originated By Company [Member] | Nonaccrual [Member]
Commercial, Real estate	0	0
Commercial and industrial	7	0
Commercial, Construction	0	0
Consumer, Residential real estate	0	0
Consumer, Construction	0	0
Consumer, Home equity	0	0
Consumer, Loans to individuals	0	0
Total	7	0
Loans Originated By Company [Member] | Total Past Due [Member]
Commercial, Real estate	3,036	0
Commercial and industrial	7	0
Commercial, Construction	0	0
Consumer, Residential real estate	0	0
Consumer, Construction	0	0
Consumer, Home equity	0	0
Consumer, Loans to individuals	0	0
Total	3,043	0
Loans Originated By Company [Member] | Loans Not Past Due [Member]
Commercial, Real estate	64,022	7,647
Commercial and industrial	28,531	993
Commercial, Construction	8,921	138
Consumer, Residential real estate	19,561	1,739
Consumer, Construction	1,267	196
Consumer, Home equity	3,135	426
Consumer, Loans to individuals	907	126
Total	$ 126,344	$ 11,265

XML

CUMULATIVE PERPETUAL PREFERRED STOCK (Details)	9 Months Ended
	Sep. 30, 2012
Predecessor [Member]
Risk-free interest rate	2.49%
Expected life of warrants	10 years
Expected dividend yield	0.00%
Expected volatility	37.27%
Successor [Member]
Risk-free interest rate	0.31%
Expected life of warrants	2 years
Expected dividend yield	0.00%
Expected volatility	65.10%

XML

MERGERS AND ACQUISITIONS

9 Months Ended

Sep. 30, 2012

Business Combinations [Abstract]

Mergers and Acquisitions [Text Block]

Mergers and Acquisitions

ECB Bancorp, Inc. Merger Agreement

On September 25, 2012, the Company and ECB Bancorp, Inc. ("ECB") entered into an Agreement and Plan of Merger (the “ECB Merger Agreement”). Pursuant to the ECB Merger Agreement, ECB will merge with and into the Company so that the Company is the surviving bank holding corporation in the merger (the “Merger”). Immediately following the Merger, The East Carolina Bank, a North Carolina banking corporation and a wholly-owned subsidiary of ECB, will be merged with and into Crescent State Bank, a North Carolina banking corporation and a wholly-owned subsidiary of the Company. At the effective time of the Merger, each share of ECB's outstanding common stock, par value $3.50 per share, will be converted into the right to receive 3.55 shares of the Company's common stock, par value $0.001 per share. The completion of the merger is subject to all required regulatory and stockholder approvals.

ECB is a bank holding company, headquartered in Engelhard, North Carolina, whose wholly-owned subsidiary, The East Carolina Bank, is a state-chartered, community bank. The Bank has 25 branch offices in eastern North Carolina stretching from the Virginia to South Carolina state lines east of Interstate 95.

VantageSouth Bank Merger Agreement

On July 27, 2012, the Company filed an application with the Bank’s regulators to merge VantageSouth Bank, which is 100% owned by Piedmont Community Bank Holdings, Inc. (“Piedmont”), into CSB. Additional information relating to Piedmont’s ownership interest in the Company is found in the “Piedmont Investment” section of this Note B. On August 10, 2012, an Agreement and Plan of Merger (“Merger Agreement”) was entered into by the Company, CSB, and VantageSouth Bank to merge VantageSouth Bank into CSB in a share exchange based on the Company’s volume weighted average stock price. Pursuant to terms of the Merger Agreement, outstanding VantageSouth Bank shares will be converted into the Company’s shares equal to the exchange ratio. The exchange ratio will be 4.8204 if the Company’s volume weighted average stock price is at or above $5.25. If the Company’s volume weighted average stock price is at or below $4.75, the exchange ratio will be 5.3278, and if the Company’s volume weighted average stock price is below $5.25 but above $4.75, the exchange ratio will be equal to 25.307 divided by a number equal to the Company’s volume weighted average stock price.

VantageSouth Bank is headquartered in Burlington, North Carolina, and operates five branch offices located in Burlington (2), Fayetteville, and Salisbury (2), North Carolina. As of September 30, 2012, VantageSouth Bank had approximately $260,700 in total assets and 1,382,961 outstanding common shares. The Company’s board of directors established an independent special committee which evaluated, negotiated, and made a favorable recommendation to the board regarding the proposed merger. The North Carolina Banking Commission granted its formal approval of the Merger on September 26, 2012, and the FDIC granted its final approval of the Merger on October 30, 2012. The completion of the merger is subject to stockholder approval.

Piedmont Investment

On November 18, 2011, the Company completed the issuance and sale to Piedmont of 18,750,000 shares of common stock for $75,000 in cash (the “Piedmont Investment”) pursuant to an Investment Agreement (the “Piedmont Investment Agreement”). As part of its investment, Piedmont also made a tender offer to the Company’s stockholders commencing on November 8, 2011 to purchase up to 67% (6,442,105 shares) of our outstanding common stock at a price of $4.75 per share (“Tender Offer”). Pursuant to the Tender Offer, Piedmont purchased 6,128,423 shares of the Company’s common stock for $29,100. As a result of the Piedmont Investment and the Tender Offer, Piedmont owns approximately 88% of the Company’s outstanding common stock.

Staff Accounting Bulletin (“SAB”) Topic No. 5.J, Push Down Basis of Accounting Required in Certain Limited Circumstances, indicates that the acquiror’s application of purchase accounting is required to be pushed down to the acquiree (“push-down accounting”) in purchase transactions that result in an entity becoming substantially wholly owned. In determining whether a company has become substantially wholly owned, SEC staff guidance indicates that push-down accounting would be required if 95% or more of the company has been acquired, permitted if 80% to 95% has been acquired, and prohibited if less than 80% of the company is acquired. The Company determined push-down accounting to be appropriate due to Piedmont’s acquisition of 88% of the Company’s outstanding common stock in the Piedmont Investment and the Tender Offer.

Due to the application of push-down accounting, balances and activity in the Company’s consolidated financial statements prior to the Piedmont Investment have been labeled with “Predecessor Company” while balances and activity subsequent to the Piedmont Investment have been labeled with “Successor Company.”

The following table summarizes the Piedmont Investment and the Successor Company’s opening balance sheet: 

	Preliminary Balances at Nov. 18, 2011		Measurement Period Adjustments			Adjusted Balances at Nov. 18, 2011
Fair value of assets acquired:
Cash and cash equivalents	$	226,126	$	—		$	226,126
Investment securities available for sale	89,343		—			89,343
Mortgage loans held for sale	4,588		—			4,588
Loans	561,911		(1,485		)	560,426
Federal Home Loan Bank stock	8,669		—			8,669
Premises and equipment	10,325		—			10,325
Deferred tax asset, net	30,268		1,782			32,050
Bank owned life insurance	19,169		—			19,169
Foreclosed assets	10,584		(405		)	10,179
Goodwill	20,015		3,095			23,110
Other intangible assets	2,260		—			2,260
Other assets	10,094		(1,182		)	8,912
Total assets acquired	993,352		1,805			995,157
Fair value of liabilities assumed:
Deposits	678,289		—			678,289
Borrowings	164,801		—			164,801
Other liabilities	7,111		1,805			8,916
Total liabilities assumed	850,201		1,805			852,006
Net assets	$	143,151	$	—		$	143,151
Non-controlling interests at fair value:
Preferred stock	24,409		—			24,409
Common stock warrants	1,326		—			1,326
Common stock	42,416		—			42,416
Total non-controlling interests	68,151		—			68,151
Purchase price	$	75,000	$	—		$	75,000

The above estimated fair values of assets acquired and liabilities assumed are based on the information that was available to make estimates of fair value during the measurement period through September 30, 2012. The Company is currently within the one-year measurement period with respect to the acquisition date, and thus, material adjustments to these purchase accounting fair value adjustments are possible. In the first nine months of 2012, goodwill increased by $3,095 as a result of adjustments to refine the Company’s acquisition date estimate of market rent on two branch leases, adjustments to refine the valuation of certain other real estate owned, adjustments to the acquisition date fair value of the split-dollar liability on bank owned life insurance, and adjustments to refine acquisition date cash flow estimates and the related valuation of certain loans.

A summary and description of the assets, liabilities and non-controlling interests fair valued in conjunction with applying the acquisition method of accounting is as follows:

Cash and Cash Equivalents. Cash and cash equivalents, which include proceeds from the Piedmont Investment, held at acquisition date approximated fair value on that date and did not require a fair value adjustment.

Securities Available for Sale. Available for sale securities are reported at fair value at acquisition date. To account for the Piedmont Investment, the difference between the fair value and par value became the new premium or discount for each security in the investment portfolio. The fair value of investment securities is primarily based on values obtained from third party pricing models, which are based on recent trading activity for the same or similar securities. Two equity securities were valued at their respective stock market prices.

Loans. All loans in the loan portfolio were adjusted to estimated fair value at the Piedmont Investment date. Upon analyzing estimated credit losses, the Company forecasted expected cash flows over the remaining life of each loan and discounted those expected cash flows to present value at current market interest rates for similar loans considering loan collateral type and credit quality. Based on this valuation, the Company recorded a loan fair value discount of approximately $44,900. In addition, the Company eliminated net deferred loan fees immediately prior to the acquisition of approximately $663.

Federal Home Loan Bank Stock. The Company’s investment in FHLB stock is carried at cost. Given the option to redeem this stock at par through the FHLB, the Company determined that cost approximated fair value at acquisition date and made no related adjustment.

Premises and Equipment. Premises and equipment were adjusted to estimated fair value at acquisition date based on recent appraisals for bank-owned land and buildings. The total fair value adjustment reduced the book value of these assets by approximately $540. At acquisition, accumulated depreciation was eliminated and estimated fair value became the cost basis of these assets.

Deferred Tax Asset. The net deferred tax asset is primarily related to the recognition of differences between certain tax and book bases of assets and liabilities related to purchase accounting at the Piedmont Investment, including fair value adjustments discussed elsewhere in this section, along with federal and state net operating losses that the Company determined to be realizable as of the acquisition date. A valuation allowance is recorded for deferred tax assets, including net operating losses, if the Company determines that it is more likely than not that some portion or all of the deferred tax assets will not be realized. Based on its analysis, the Company determined that no valuation allowance was necessary at acquisition date. See Note K of Item 8 in the Company’s 2011 Form 10-K for further discussion of the Company’s valuation allowance analysis.

Bank Owned Life Insurance. Bank owned life insurance investments are recorded at their cash surrender value, or the amount that can be realized upon surrender. Therefore, no fair value adjustments were made to this amount at acquisition date.

Foreclosed Assets. Foreclosed assets were adjusted to estimated fair value, which includes consideration of recent appraisals and the Company’s disposition strategy, at acquisition date.

Goodwill. Goodwill represents the excess of purchase price over the fair value of acquired net assets. This acquisition was nontaxable and, as a result, there is no tax basis in the goodwill. Accordingly, none of the goodwill associated with the acquisition is deductible for tax purposes.

Other Intangible Assets. The only separately identifiable intangible asset we recorded at acquisition date was related to the value of the Bank’s core customer deposit relationships, or core deposit intangible. This amount represents the present value of the difference between a market participant’s cost of obtaining alternative funds and the current cost to maintain the acquired core deposit base. The present value is calculated over the estimated life of the acquired core deposit base and will be amortized on an accelerated method over a ten-year period. Deposit accounts evaluated for the core deposit intangible were demand deposit accounts, money market accounts and savings accounts. Time deposits were not included in our evaluation of the core deposit intangible.

Deposits. Time deposits were not included in the core deposit intangible evaluation. Instead, a separate valuation of time deposits was conducted due to the contractual time frame associated with these liabilities. Time deposits evaluated for purchase accounting consisted of certificates of deposit (“CD’s”), brokered deposits and CD’s through the Certificate of Deposit Account Registry Services (“CDARS”). The fair value of these deposits was determined by first stratifying the deposit pool by maturity and calculating the contractual interest rates for each maturity period. Then contractual cash flows were projected by period and discounted to present value using current market interest rates for similar duration CD’s.

Outstanding balances of CDs totaled $196,500 at acquisition date, and the estimated fair value premium totaled $4,400. The outstanding balance of brokered deposits was $115,000, and the estimated fair value premium totaled $1,600. The outstanding balance of CDARS was $15,500, and the estimated fair value premium totaled approximately $47. The Company will amortize these premiums into income as a reduction of interest expense on a level-yield basis over the weighted average time deposit terms.

Borrowings. Included in borrowings are FHLB advances as well as a subordinated term loan issued by the Bank and junior subordinated debentures issued in the form of trust preferred securities. Fair values for FHLB advances were determined by developing cash flow estimates for each advance based on scheduled principal and interest payments, contractual interest rates and prepayment penalties. Once the cash flows were determined, the current FHLB advance rate for similar maturity terms was used to discount the cash flows to the present value. The outstanding balance of FHLB advances at the acquisition date was$142,000, and the estimated fair value premium totaled $10,600. Acquired FHLB advances were repaid after the acquisition date prior to December 31, 2011.

Fair values for the trust preferred securities and subordinated term loan were estimated by developing cash flow estimates for each of these debt instruments based on scheduled principal and interest payments. Once the cash flows were determined, a market rate for comparable debt instruments was used to discount the cash flows to their present values. Outstanding trust preferred securities and subordinated debt at the acquisition date were $8,000 and $7,500, respectively, and the estimated fair value discount on each totaled $2,800, and $731, respectively. The Company will accrete these discounts as an increase to interest expense on a level-yield basis over the contractual term of each debt instrument.

Non-controlling Interests. Non-controlling interests, that portion of the Company not owned by Piedmont, include preferred stock and common stock warrants issued pursuant to the U.S. Treasury’s Troubled Asset Relief Program capital purchase program (“TARP CPP”) as well as common stock owned at the acquisition date by legacy stockholders. Non-controlling interests are not disclosed on the Company’s consolidated balance sheet since they represent non-controlling interests of Piedmont, not the Company. However, valuation of these non-controlling ownership interests impacts the Company’s stockholders’ equity through the push down of purchase accounting adjustments. Preferred stock issued under the TARP CPP was valued based on forecasting expected cash flows with an assumed repayment date and discounting these cash flows based on current market yields for similar preferred stock. The discount between the estimated fair value at acquisition date and the $24,900 liquidation value will be accreted to retained earnings over the remaining period to anticipated repayment of these securities. The common stock warrant, also issued to the U.S. Treasury, was valued using a Black-Scholes option pricing model. See Note I – Cumulative Perpetual Preferred Stock for more details.

The fair value of non-controlling common stock was estimated using the closing stock market price on the acquisition date, which was $4.39 per share, and applying this stock price to the number of outstanding non-controlling common shares at that date.

There were no indemnification assets in this transaction, nor was there any contingent consideration to be recognized. Professional and other costs related to the Piedmont Investment were expensed as incurred.

XML

FAIR VALUE MEASUREMENT (Details) (Fair Value, Inputs, Level 3 [Member], USD $) In Thousands, unless otherwise specified			9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2012 Interest Rate Lock Commitments [Member] Successor [Member]	Sep. 30, 2012 Interest Rate Lock Commitments [Member] Predecessor [Member]
Balance, December 31, 2011 and 2010	$ 814	$ 212	$ 212	$ 53
Transfers in - applications			1,707	676
Transfers out - closed and cancelled			(1,105)	(486)
Balance, June 30, 2012 and 2011	$ 814	$ 212	$ 814	$ 243

XML

PER SHARE RESULTS (Details)	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2012 Successor [Member]	Sep. 30, 2012 Successor [Member]	Sep. 30, 2011 Predecessor [Member]	Sep. 30, 2011 Predecessor [Member]	Sep. 30, 2012 Stock Options [Member] Successor [Member]	Sep. 30, 2012 Stock Options [Member] Successor [Member]	Sep. 30, 2011 Stock Options [Member] Predecessor [Member]	Sep. 30, 2011 Stock Options [Member] Predecessor [Member]	Sep. 30, 2012 Warrant [Member] Successor [Member]	Sep. 30, 2012 Warrant [Member] Successor [Member]	Sep. 30, 2011 Warrant [Member] Predecessor [Member]	Sep. 30, 2011 Warrant [Member] Predecessor [Member]
Weighted average number of shares used in computing basic earnings per share	28,361,357	28,361,159	9,587,324	9,585,056
Effect of dilutive stock options and warrant	0	0	0	0
Diluted (in shares)	28,361,357	28,361,159	9,587,324	9,585,056
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount					233,377	233,377	281,667	281,667	833,705	833,705	833,705	833,705

XML

COMMITMENTS AND CONTINGENCIES (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Undisbursed Lines Of Credit [Member]
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability	$ 30,999
Commitments To Extend Credit [Member]
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability	76,417
Financial Standby Letters Of Credit [Member]
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability	4,196
Capital Commitment To Private Investment Fund [Member]
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability	$ 175

XML

FAIR VALUE MEASUREMENT (Details 1) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Estimate Of Fair Value, Fair Value Disclosure [Member]
Impaired Loans At Fair Value	$ 1,825
Foreclosed assets	3,828	9,017
Interest rate lock commitments	814	212
Interest Rate Derivative Assets, at Fair Value	207
Derivative liabilities	(152)	(330)
Estimate Of Fair Value, Fair Value Disclosure [Member] | Mortgage Backed Securities G S E [Member]
Investment securities available for sale	23,312	19,364
Estimate Of Fair Value, Fair Value Disclosure [Member] | Commercial mortgage-backed securities - private [Member]
Investment securities available for sale	6,872
Estimate Of Fair Value, Fair Value Disclosure [Member] | Collateralized Mortgage Obligations [Member]
Investment securities available for sale	47,918	82,095
Estimate Of Fair Value, Fair Value Disclosure [Member] | Municipals Non Taxable [Member]
Investment securities available for sale	16,218	13,514
Estimate Of Fair Value, Fair Value Disclosure [Member] | Municipals Taxable [Member]
Investment securities available for sale	1,646
Estimate Of Fair Value, Fair Value Disclosure [Member] | Corporate Bond [Member]
Investment securities available for sale	36,917	27,966
Estimate Of Fair Value, Fair Value Disclosure [Member] | Marketable Equity [Member]
Investment securities available for sale	70	565
Fair Value, Inputs, Level 1 [Member]
Investment securities available for sale	70
Impaired Loans At Fair Value	0
Foreclosed assets	0	0
Interest rate lock commitments	0	0
Interest Rate Derivative Assets, at Fair Value	0
Derivative liabilities	0	0
Fair Value, Inputs, Level 1 [Member] | Mortgage Backed Securities G S E [Member]
Investment securities available for sale	0	0
Fair Value, Inputs, Level 1 [Member] | Commercial mortgage-backed securities - private [Member]
Investment securities available for sale	0
Fair Value, Inputs, Level 1 [Member] | Collateralized Mortgage Obligations [Member]
Investment securities available for sale	0	0
Fair Value, Inputs, Level 1 [Member] | Municipals Non Taxable [Member]
Investment securities available for sale	0	0
Fair Value, Inputs, Level 1 [Member] | Municipals Taxable [Member]
Investment securities available for sale	0
Fair Value, Inputs, Level 1 [Member] | Corporate Bond [Member]
Investment securities available for sale	0	0
Fair Value, Inputs, Level 1 [Member] | Marketable Equity [Member]
Investment securities available for sale	70	565
Fair Value, Inputs, Level 2 [Member]
Investment securities available for sale	132,883
Impaired Loans At Fair Value	0
Foreclosed assets	0	0
Interest rate lock commitments	0	0
Interest Rate Derivative Assets, at Fair Value	207
Derivative liabilities	(152)	(330)
Fair Value, Inputs, Level 2 [Member] | Mortgage Backed Securities G S E [Member]
Investment securities available for sale	23,312	19,364
Fair Value, Inputs, Level 2 [Member] | Commercial mortgage-backed securities - private [Member]
Investment securities available for sale	6,872
Fair Value, Inputs, Level 2 [Member] | Collateralized Mortgage Obligations [Member]
Investment securities available for sale	47,918	82,095
Fair Value, Inputs, Level 2 [Member] | Municipals Non Taxable [Member]
Investment securities available for sale	16,218	13,514
Fair Value, Inputs, Level 2 [Member] | Municipals Taxable [Member]
Investment securities available for sale	1,646
Fair Value, Inputs, Level 2 [Member] | Corporate Bond [Member]
Investment securities available for sale	36,917	27,966
Fair Value, Inputs, Level 2 [Member] | Marketable Equity [Member]
Investment securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member]
Investment securities available for sale	0
Impaired Loans At Fair Value	1,825
Foreclosed assets	3,828	9,017
Interest rate lock commitments	814	212
Interest Rate Derivative Assets, at Fair Value	0
Derivative liabilities	0	0
Fair Value, Inputs, Level 3 [Member] | Mortgage Backed Securities G S E [Member]
Investment securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member] | Commercial mortgage-backed securities - private [Member]
Investment securities available for sale	0
Fair Value, Inputs, Level 3 [Member] | Collateralized Mortgage Obligations [Member]
Investment securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member] | Municipals Non Taxable [Member]
Investment securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member] | Municipals Taxable [Member]
Investment securities available for sale	0
Fair Value, Inputs, Level 3 [Member] | Corporate Bond [Member]
Investment securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member] | Marketable Equity [Member]
Investment securities available for sale	$ 0	$ 0

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INVESTMENT SECURITIES (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Nov. 18, 2011
Securities available for sale:
Amortized cost	$ 129,705	$ 143,486	$ 89,800
Gross unrealized gains	3,345	525
Gross unrealized losses	97	507
Residential mortgage-backed securities - GSE [Member]
Securities available for sale:
Amortized cost	22,692	19,452
Gross unrealized gains	620	19
Gross unrealized losses	0	107
Fair value	23,312	19,364
Commercial mortgage-backed securities - private [Member]
Securities available for sale:
Amortized cost	6,759
Gross unrealized gains	113
Gross unrealized losses	0
Fair value	6,872
Collateralized mortgage obligations - GSE [Member]
Securities available for sale:
Amortized cost	47,855	82,192
Gross unrealized gains	160	154
Gross unrealized losses	97	251
Fair value	47,918	82,095
Municipals Non Taxable [Member]
Securities available for sale:
Amortized cost	15,510	13,281
Gross unrealized gains	708	263
Gross unrealized losses	0	30
Fair value	16,218	13,514
Municipals Taxable [Member]
Securities available for sale:
Amortized cost	1,635
Gross unrealized gains	11
Gross unrealized losses	0
Fair value	1,646
Corporate Bond [Member]
Securities available for sale:
Amortized cost	35,217	28,042
Gross unrealized gains	1,700	39
Gross unrealized losses	0	115
Fair value	36,917	27,966
Marketable Equity Securities [Member]
Securities available for sale:
Amortized cost	37	519
Gross unrealized gains	33	50
Gross unrealized losses	0	4
Fair value	70	565
Successor [Member]
Securities available for sale:
Fair value	132,953
Predecessor [Member]
Securities available for sale:
Fair value		$ 143,504

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INVESTMENT SECURITIES (Details 1) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Securities available for sale:
Less than 12 months, Fair Value	$ 26,146	$ 95,001
Less than 12 months, Unrealized Loss	97	507
12 Months or More, Fair Value	0	0
12 Months or More, Unrealized Loss	0	0
Total Fair Value	26,146	95,001
Total Unrealized Loss	97	507
Residential mortgage-backed securities - GSE [Member]
Securities available for sale:
Less than 12 months, Fair Value		9,153
Less than 12 months, Unrealized Loss		107
12 Months or More, Fair Value		0
12 Months or More, Unrealized Loss		0
Total Fair Value		9,153
Total Unrealized Loss		107
Collateralized mortgage obligations - GSE [Member]
Securities available for sale:
Less than 12 months, Fair Value	24,079	67,360
Less than 12 months, Unrealized Loss	97	251
12 Months or More, Fair Value	0	0
12 Months or More, Unrealized Loss	0	0
Total Fair Value	24,079	67,360
Total Unrealized Loss	97	251
Municipals Non Taxable [Member]
Securities available for sale:
Less than 12 months, Fair Value		2,637
Less than 12 months, Unrealized Loss		30
12 Months or More, Fair Value		0
12 Months or More, Unrealized Loss		0
Total Fair Value		2,637
Total Unrealized Loss		30
Corporate Bond [Member]
Securities available for sale:
Less than 12 months, Fair Value	2,067	15,819
Less than 12 months, Unrealized Loss	0	115
12 Months or More, Fair Value	0	0
12 Months or More, Unrealized Loss	0	0
Total Fair Value	2,067	15,819
Total Unrealized Loss	0	115
Marketable Equity Securities [Member]
Securities available for sale:
Less than 12 months, Fair Value		32
Less than 12 months, Unrealized Loss		4
12 Months or More, Fair Value		0
12 Months or More, Unrealized Loss		0
Total Fair Value		32
Total Unrealized Loss		$ 4

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BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Crescent Financial Bancshares, Inc. (the “Company”) and its wholly-owned subsidiary, Crescent State Bank (“CSB” or the “Bank”). The interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). They do not include all of the information and footnotes required by such accounting principles for complete financial statements, and therefore should be read in conjunction with the audited consolidated financial statements and accompanying footnotes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (the “Company’s 2011 Form 10-K”).

In the opinion of management, all adjustments necessary for a fair presentation of the financial position and results of operations for the periods presented have been included, and all significant intercompany transactions have been eliminated in consolidation. Results of operations for the three and nine month periods ended September 30, 2012 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2012. The consolidated balance sheet at December 31, 2011 has been derived from the audited consolidated financial statements contained in the Company’s 2011 Form 10-K.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Certain amounts for prior periods have been reclassified to conform with statement presentations for 2012. The reclassifications have no effect on shareholders’ equity or net income as previously reported. Fair values are subject to refinement for up to one year after the closing date of the transaction as additional information regarding closing date fair values becomes available. During 2012, adjustments were made based on additional information regarding the acquisition date fair values. These adjustments were made retroactive to the fourth quarter of 2011. A description of the accounting policies followed by the Company are as set forth in Note B of the Notes to Consolidated Financial Statements in the Company’s 2011 Form 10-K.

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INVESTMENT SECURITIES (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Securities available for sale:
Due in one year or less, Amortized cost	$ 11,654
Due from one to five years, Amortized cost	86,609
Due from five to ten years, Amortized cost	22,131
Due after ten years, Amortized cost	9,274
Other Equity Securities, Amortized cost	37
Due in one year or less, Fair value	11,748
Due from one to five years, Fair value	88,896
Due from five to ten years, Fair value	22,681
Due after ten years, Fair value	9,558
Other Equity Securities, Fair value	70
Residential mortgage-backed securities - GSE [Member]
Securities available for sale:
Due in one year or less, Amortized cost	2,944
Due from one to five years, Amortized cost	7,473
Due from five to ten years, Amortized cost	10,053
Due after ten years, Amortized cost	2,222
Other Equity Securities, Amortized cost	0
Due in one year or less, Fair value	3,024
Due from one to five years, Fair value	7,676
Due from five to ten years, Fair value	10,321
Due after ten years, Fair value	2,291
Other Equity Securities, Fair value	0
Commercial mortgage-backed securities - private [Member]
Securities available for sale:
Due in one year or less, Amortized cost	0
Due from one to five years, Amortized cost	6,759
Due from five to ten years, Amortized cost	0
Due after ten years, Amortized cost	0
Other Equity Securities, Amortized cost	0
Due in one year or less, Fair value	0
Due from one to five years, Fair value	6,872
Due from five to ten years, Fair value	0
Due after ten years, Fair value	0
Other Equity Securities, Fair value	0
Collateralized mortgage obligations - GSE [Member]
Securities available for sale:
Due in one year or less, Amortized cost	8,710
Due from one to five years, Amortized cost	30,384
Due from five to ten years, Amortized cost	7,873
Due after ten years, Amortized cost	888
Other Equity Securities, Amortized cost	0
Due in one year or less, Fair value	8,724
Due from one to five years, Fair value	30,424
Due from five to ten years, Fair value	7,884
Due after ten years, Fair value	886
Other Equity Securities, Fair value	0
Municipals Non Taxable [Member]
Securities available for sale:
Due in one year or less, Amortized cost	0
Due from one to five years, Amortized cost	6,776
Due from five to ten years, Amortized cost	4,205
Due after ten years, Amortized cost	4,529
Other Equity Securities, Amortized cost	0
Due in one year or less, Fair value	0
Due from one to five years, Fair value	7,007
Due from five to ten years, Fair value	4,476
Due after ten years, Fair value	4,735
Other Equity Securities, Fair value	0
Municipals Taxable [Member]
Securities available for sale:
Due in one year or less, Amortized cost	0
Due from one to five years, Amortized cost	0
Due from five to ten years, Amortized cost	0
Due after ten years, Amortized cost	1,635
Other Equity Securities, Amortized cost	0
Due in one year or less, Fair value	0
Due from one to five years, Fair value	0
Due from five to ten years, Fair value	0
Due after ten years, Fair value	1,646
Other Equity Securities, Fair value	0
Corporate Bond [Member]
Securities available for sale:
Due in one year or less, Amortized cost	0
Due from one to five years, Amortized cost	35,217
Due from five to ten years, Amortized cost	0
Due after ten years, Amortized cost	0
Other Equity Securities, Amortized cost	0
Due in one year or less, Fair value	0
Due from one to five years, Fair value	36,917
Due from five to ten years, Fair value	0
Due after ten years, Fair value	0
Other Equity Securities, Fair value	0
Marketable Equity Securities [Member]
Securities available for sale:
Due in one year or less, Amortized cost	0
Due from one to five years, Amortized cost	0
Due from five to ten years, Amortized cost	0
Due after ten years, Amortized cost	0
Other Equity Securities, Amortized cost	37
Due in one year or less, Fair value	0
Due from one to five years, Fair value	0
Due from five to ten years, Fair value	0
Due after ten years, Fair value	0
Other Equity Securities, Fair value	$ 70

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DERIVATIVE FINANCIAL INSTRUMENTS (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Estimated Fair Value of Derivative Instruments	$ 868	$ (118)
Other Liabilities [Member] | Interest Rate Swap1 [Member] | Subordinated Debt Obligations [Member]
Notional Amount of Derivative Instruments	0	3,750
Estimated Fair Value of Derivative Instruments	0	(34)
Other Liabilities [Member] | Interest Rate Swap1 [Member] | Trust Preferred Securities [Member]
Notional Amount of Derivative Instruments	0	4,000
Estimated Fair Value of Derivative Instruments	0	(38)
Other Liabilities [Member] | Interest Rate Swap2 [Member] | Subordinated Debt Obligations [Member]
Notional Amount of Derivative Instruments	3,750	3,750
Estimated Fair Value of Derivative Instruments	(73)	(124)
Other Liabilities [Member] | Interest Rate Swap2 [Member] | Trust Preferred Securities [Member]
Notional Amount of Derivative Instruments	4,000	4,000
Estimated Fair Value of Derivative Instruments	(80)	(134)
Other Assets [Member] | Interest Rate Cap1 [Member] | Subordinated Debt Obligations [Member]
Notional Amount of Derivative Instruments	7,500	0
Estimated Fair Value of Derivative Instruments	100	0
Other Assets [Member] | Interest Rate Cap1 [Member] | Trust Preferred Securities [Member]
Notional Amount of Derivative Instruments	8,000	0
Estimated Fair Value of Derivative Instruments	107	0
Other Assets [Member] | Interest Rate Lock Commitment1 [Member] | Subordinated Debt Obligations [Member]
Notional Amount of Derivative Instruments	48,112	15,667
Estimated Fair Value of Derivative Instruments	$ 814	$ 212

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CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2012 Successor [Member]	Dec. 31, 2011 Predecessor [Member]
ASSETS
Cash and due from banks	$ 9,249,000	$ 8,844,000	[1]
Interest-earning deposits with banks	1,702,000	1,773,000	[1]
Federal funds sold	3,935,000	14,745,000	[1]
Investment securities available for sale, at fair value	132,953,000	143,504,000	[1]
Mortgage loans held for sale	7,023,000	3,841,000	[1]
Loans held for investment	540,946,000	551,392,000	[1]
Allowance for loan losses	(2,264,000)	(227,000)	[1]
NET LOANS HELD FOR INVESTMENT	538,682,000	551,165,000
Federal Home Loan Bank stock, at cost	1,255,000	8,669,000	[1]
Premises and equipment, net	10,684,000	10,286,000	[1]
Bank owned life insurance	19,800,000	19,261,000	[1]
Foreclosed assets	3,828,000	9,017,000	[1]
Deferred tax asset, net	30,913,000	31,517,000	[1]
Goodwill	23,110,000	23,110,000	[1]
Other intangibles, net	2,036,000	2,230,000	[1]
Other assets	8,594,000	8,345,000	[1]
TOTAL ASSETS	793,764,000	836,307,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Demand	86,454,000	91,215,000	[1]
Savings	38,780,000	46,840,000	[1]
Money market and NOW	247,772,000	226,584,000	[1]
Time	260,893,000	309,779,000	[1]
TOTAL DEPOSITS	633,899,000	674,418,000
Long-term debt	12,326,000	12,216,000	[1]
Accrued expenses and other liabilities	4,696,000	6,615,000	[1]
TOTAL LIABILITIES	650,921,000	693,249,000
Stockholders' Equity
Preferred stock, no par value, 5,000,000 shares authorized, 24,900 shares issued and outstanding at both September 30, 2012 and December 31, 2011	24,601,000	24,442,000	[1]
Common stock, $0.001 par value, 75,000,000 shares authorized; 28,379,445 and 28,412,059 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively	28,000	28,000	[1]
Common stock warrants	1,325,000	1,325,000	[1]
Additional paid-in capital	117,459,000	117,434,000	[1]
Accumulated deficit	(2,292,000)	(182,000)	[1]
Accumulated other comprehensive income	1,722,000	11,000	[1]
TOTAL STOCKHOLDERS' EQUITY	142,843,000	143,058,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 793,764,000	$ 836,307,000

[1] Derived from audited consolidated financial statements.

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FAIR VALUE MEASUREMENT (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 30, 2012
Recurring measurements:
Fair Value Measurements, Valuation Techniques	Discounted Appraisals
Interest Rate Lock Commitments [Member]
Recurring measurements:
Fair Value Measurements, Valuation Techniques	Pricing model
Unobservable Input	Pull through rates
Foreclosed Assets [Member]
Recurring measurements:
Fair Value Measurements, Valuation Techniques	Discounted appraisals
Unobservable Input	Collateral discounts
Maximum [Member]
Recurring measurements:
Pull Through Rate	85.00%
Collateral Discount Rate	50.00%
Minimum [Member]
Recurring measurements:
Pull Through Rate	80.00%
Collateral Discount Rate	15.00%
Successor [Member]
Nonrecurring measurements:
Foreclosed assets	3,828
Fair Value, Measurements, Recurring [Member] | Successor [Member]
Recurring measurements:
Balance, December 31, 2011 and 2010	814
Impaired loans	1,825
Fair Value, Measurements, Nonrecurring [Member] | Successor [Member]
Nonrecurring measurements:
Foreclosed assets	3,828

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CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (USD $) In Thousands, except Share data	Predecessor [Member]	Predecessor [Member] Preferred Stock [Member]	Predecessor [Member] Common Stock [Member]	Predecessor [Member] Common Stock Warrants [Member]	Predecessor [Member] Additional Paid-In Capital [Member]	Predecessor [Member] Accumulated Deficit [Member]	Predecessor [Member] Accumulated Other Comprehensive Income (Loss) [Member]	Successor [Member]	Successor [Member] Preferred Stock [Member]	Successor [Member] Common Stock [Member]	Successor [Member] Common Stock Warrants [Member]	Successor [Member] Additional Paid-In Capital [Member]	Successor [Member] Accumulated Deficit [Member]	Successor [Member] Accumulated Other Comprehensive Income (Loss) [Member]
Balance at December 31, 2011 at Dec. 31, 2011	$ 143,058	$ 24,442	$ 28	$ 1,325	$ 117,434	$ (182)	$ 11
Balance (in shares) at Dec. 31, 2011		24,900	28,412,059
Net income								337	0	0	0	0		0
Other comprehensive income								1,711	0	0	0	0	0	1,711
Stock based compensation expense								25	0	0	0	25	0	0
Restricted stock, forfeited								0	0	0	0	0	0	0
Stock options exercised								887
Restricted stock, forfeited (in shares)									0	(33,501)
Accretion of discount on preferred stock								0	159	0	0	0	(159)	0
Preferred stock dividends								(2,288)	0	0	0	0	(2,288)	0
Balance at September 30, 2012 at Sep. 30, 2012								142,843	24,601	28	1,325	117,459	(2,292)	1,722
Balance (in shares) at Sep. 30, 2012									24,900	28,379,445
Balance at December 31, 2011 at Jun. 30, 2012
Net income								46
Other comprehensive income								539
Balance at September 30, 2012 at Sep. 30, 2012								$ 142,843

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 1) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Receivables [Abstract]
Balance at January 1, 2012	$ 29,645
New loans purchased	0
Accretion of income	(11,617)
Reclassifications from nonaccretable difference	10,297
Disposals	(1,788)
Balance at September 30, 2012	$ 26,537

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)

9 Months Ended

Sep. 30, 2012

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

The following is a summary of loans at September 30, 2012 and December 31, 2011: 

	September 30, 2012			December 31, 2011
Commercial:
Commercial real estate	$	306,722		$	310,315
Commercial and industrial	56,976			39,101
Construction and development	54,090			74,663
Consumer:
Residential real estate	74,760			66,657
Construction and development	4,496			8,461
Home equity	40,875			48,940
Other consumer	3,084			3,300
Total loans	541,003			551,437
Less:
Deferred loan fees	(57		)	(45		)
Allowance for loan losses	(2,264		)	(227		)
Net loans	$	538,682		$	551,165

Schedule of Accretable yield of Purchased Credit Impaired Loans Table [Text Block]

Changes in accretable yield, or income expected to be collected, related to purchased credit-impaired (“PCI”) loans in the nine months ended September 30, 2012 were as follows:

Balance at January 1, 2012	$	29,645
New loans purchased	—
Accretion of income	(11,617		)
Reclassifications from nonaccretable difference	10,297
Disposals	(1,788		)
Balance September 30, 2012	$	26,537

Allowance for Credit Losses on Financing Receivables [Table Text Block]

The following is a summary of changes in the allowance for loan losses and the ending recorded investment in loans by portfolio segment and based on impairment method as of and for the three and nine months ended September 30, 2012 and 2011:

	Successor Company
	Three months ended September 30, 2012
	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Residential Real Estate		Consumer Construction			Home Equity			Other Consumer			Total
Allowance for loan losses:
Beginning balance	$	626	$	378	$	289	$	458	$	29		$	331		$	2		$	2,113
Charge-offs	—		—		—		—		—			(693		)	(114		)	(807		)
Recoveries	—		—		—		—		—			—			—			—
Provision for loan losses	65		82		52		253		(10		)	397			119			958
Ending balance	$	691	$	460	$	341	$	711	$	19		$	35		$	7		$	2,264

	Successor Company
	Nine months ended September 30, 2012
	Commercial Real Estate		Commercial and Industrial			Commercial Construction			Residential Real Estate			Consumer Construction		Home Equity			Other Consumer			Total
Allowance for loan losses:
Beginning balance	$	126	$	30		$	19		$	27		$	2	$	20		$	3		$	227
Charge-offs	—		(105		)	(46		)	(3		)	—		(1,404		)	(135		)	(1,693		)
Recoveries	—		—			—			—			—		—			—			—
Provision for loan losses	565		535			368			687			17		1,419			139			3,730
Ending balance	$	691	$	460		$	341		$	711		$	19	$	35		$	7		$	2,264
Ending balance:
Individually evaluated for impairment	$	—	$	—		$	—		$	—		$	—	$	—		$	—		$	—
Collectively evaluated for impairment	$	609	$	349		$	174		$	165		$	19	$	35		$	6		$	1,357
Purchased credit-impaired	$	82	$	111		$	167		$	546		$	—	$	—		$	1		$	907
Loans:
Ending balance:
Individually evaluated for impairment	$	464	$	—		$	—		$	—		$	—	$	819		$	—		$	1,283
Collectively evaluated for impairment	177,880		39,435			15,504			49,643			3,631		40,056			2,825			328,974
Purchased credit-impaired	128,378		17,541			38,586			25,117			865		—			259			210,746
Total	$	306,722	$	56,976		$	54,090		$	74,760		$	4,496	$	40,875		$	3,084		$	541,003

	Predecessor Company
	Three months ended September 30, 2011
	Commercial Real Estate			Commercial and Industrial			Commercial Construction			Residential Real Estate			Other Consumer			Total
Allowance for loan losses:
Beginning balance	$	8,015		$	2,905		$	7,227		$	4,102		$	70		$	22,319
Charge-offs	(1,723		)	(778		)	(1,534		)	(308		)	(7		)	(4,350		)
Recoveries	37			21			99			22			1			180
Provision for loan losses	1,357			433			1,944			684			34			4,452
Ending balance	$	7,686		$	2,581		$	7,736		$	4,500		$	98		$	22,601

	Predecessor Company
	Nine months ended September 30, 2011
	Commercial Real Estate			Commercial and Industrial			Construction and Development			Residential Real Estate			Consumer			Total
Allowance for loan losses:
Beginning balance	$	5,345		$	2,689		$	9,775		$	2,813		$	80		$	20,702
Charge-offs	(2,394		)	(1,556		)	(7,965		)	(1,314		)	(29		)	(13,258		)
Recoveries	37			83			447			77			2			646
Provision for loan losses	4,698			1,365			5,479			2,924			45			14,511
Ending balance	$	7,686		$	2,581		$	7,736		$	4,500		$	98		$	22,601
Ending balance:
Individually evaluated for impairment	$	18,500		$	3,395		$	30,628		$	13,484		$	33		$	66,040
Collectively evaluated for impairment	$	311,200		$	40,999		$	82,762		$	111,972		$	3,675		$	550,608

The following is a summary of the ending allowance for loans losses and the recorded investment in loans by portfolio segment and based on impairment method at December 31, 2011:

	December 31, 2011
	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Residential Real Estate		Consumer Construction		Home Equity		Other Consumer		Total
Allowance for loan losses:
Ending balance:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment	$	126	$	30	$	19	$	27	$	2	$	20	$	3	$	227
Purchased credit-impaired	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans:
Ending balance:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment	149,654		12,426		12,276		33,702		7,039		45,886		2,850		263,833
Purchased credit-impaired	160,661		26,675		62,387		32,955		1,422		3,054		450		287,604
Total	$	310,315	$	39,101	$	74,663	$	66,657	$	8,461	$	48,940	$	3,300	$	551,437

Schedule Of Carrying Value Of Loan Portfolio By Internal Risk Ratings Table [Text Block]

Based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	Pass		Special Mention		Substandard		Doubtful		Total
September 30, 2012
Acquired loans
Commercial:
Real estate	$	184,892	$	40,891	$	13,881	$	—	$	239,664
Commercial and industrial	25,430		1,337		1,671		—		28,438
Construction and development	21,403		17,216		6,166		384		45,169
Consumer:
Residential real estate	44,512		4,177		6,379		131		55,199
Construction and development	2,638		166		425		—		3,229
Home equity	34,469		1,264		2,007		—		37,740
Other consumer	2,077		83		17		—		2,177
Total	$	315,421	$	65,134	$	30,546	$	515	$	411,616
Loans originated by the Successor Company
Commercial:
Real estate	$	67,058	$	—	$	—	$	—	$	67,058
Commercial and industrial	28,513		18		7		—		28,538
Construction and development	5,985		2,598		338		—		8,921
Consumer:
Residential real estate	19,437		124		—		—		19,561
Construction and development	1,267		—		—		—		1,267
Home equity	3,135		—		—		—		3,135
Other consumer	906		1		—		—		907
Total	$	126,301	$	2,741	$	345	$	—	$	129,387

	Pass		Special Mention		Substandard		Doubtful		Total
December 31, 2011
Acquired loans
Commercial:
Real estate	$	253,505	$	34,877	$	13,907	$	379	$	302,668
Commercial and industrial	33,636		2,213		2,259		—		38,108
Construction and development	39,122		22,482		12,402		519		74,525
Consumer:
Residential real estate	51,318		5,155		8,300		145		64,918
Construction and development	7,331		176		758		—		8,265
Home equity	42,766		2,064		3,684		—		48,514
Other consumer	2,795		336		43		—		3,174
Total	$	430,473	$	67,303	$	41,353	$	1,043	$	540,172
Loans originated by the Successor Company
Commercial:
Real estate	$	7,647	$	—	$	—	$	—	$	7,647
Commercial and industrial	894		99		—		—		993
Construction and development	138		—		—		—		138
Consumer:
Residential real estate	1,739		—		—		—		1,739
Construction and development	196		—		—		—		196
Home equity	426		—		—		—		426
Other consumer	126		—		—		—		126
Total	$	11,166	$	99	$	—	$	—	$	11,265

Past Due Financing Receivables [Table Text Block]

The following table presents the aging and accrual status of the loan portfolio at September 30, 2012 and December 31, 2011 by class of loans:

	30 - 89 Days Past Due		Greater than 89 Days Past Due Accruing		Non-accrual		Total Past Due		Loans Not Past Due		Total
September 30, 2012
Acquired loans
Commercial:
Real estate	$	1,757	$	3,408	$	464	$	5,629	$	234,035	$	239,664
Commercial and industrial	610		—		68		678		27,760		28,438
Construction and development	561		2,733		23		3,317		41,852		45,169
Consumer:
Residential real estate	752		1,113		—		1,865		53,334		55,199
Construction and development	132		97		48		277		2,952		3,229
Home equity	671		—		1,080		1,751		35,989		37,740
Other consumer	83		—		5		88		2,089		2,177
Total	$	4,566	$	7,351	$	1,688	$	13,605	$	398,011	$	411,616
Loans originated by the Successor Company
Commercial:
Real estate	$	3,036	$	—	$	—	$	3,036	$	64,022	$	67,058
Commercial and industrial	—		—		7		7		28,531		28,538
Construction and development	—		—		—		—		8,921		8,921
Consumer:
Residential real estate	—		—		—		—		19,561		19,561
Construction and development	—		—		—		—		1,267		1,267
Home equity	—		—		—		—		3,135		3,135
Other consumer	—		—		—		—		907		907
Total	$	3,036	$	—	$	7	$	3,043	$	126,344	$	129,387

	30 - 89 Days Past Due		Greater than  89 Days Past Due Accruing		Non-accrual		Total Past Due		Loans Not  Past Due		Total
December 31, 2011
Acquired loans
Commercial:
Real estate	$	3,878	$	6,101	$	—	$	9,979	$	292,689	$	302,668
Commercial and industrial	925		798		—		1,723		36,385		38,108
Construction and development	4,809		10,328		—		15,137		59,388		74,525
Consumer:
Residential real estate	2,289		4,148		—		6,437		58,481		64,918
Construction and development	652		382		—		1,034		7,231		8,265
Home equity	740		1,128		—		1,868		46,646		48,514
Other Consumer	3		3		—		6		3,168		3,174
Total	$	13,296	$	22,888	$	—	$	36,184	$	503,988	$	540,172

	30 - 89 Days Past Due		Greater than 89 Days Past Due Accruing		Non-accrual		Total Past Due		Loans Not  Past Due		Total
December 31, 2011
Loans originated by the Successor Company:
Commercial:
Real estate	$	—	$	—	$	—	$	—	$	7,647	$	7,647
Commercial and industrial	—		—		—		—		993		993
Construction and development	—		—		—		—		138		138
Consumer:
Residential real estate	—		—		—		—		1,739		1,739
Construction and development	—		—		—		—		196		196
Home equity	—		—		—		—		426		426
Other Consumer	—		—		—		—		126		126
Total	$	—	$	—	$	—	$	—	$	11,265	$	11,265

Schedule Of Allowance For Loans Losses and Recorded Investment In Loans [Table Text Block]

The following table is a summary of impaired loans, which exclude purchased credit-impaired loans, including the related allowance for loan losses at September 30, 2012:

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial real estate	$	464	$	464	$	—	$	116	$	—
Residential real estate	—		—		—		—		—
Commercial Construction	—		—		—		—		—
Commercial and industrial	—		—		—		—		—
Consumer Construction	—		—		—		—		—
Home equity	819		1,361		—		257		—
Other Consumer	—		—		—		—		—
	1,283		1,825		—		373		—
With an allowance recorded:
Commercial real estate	—		—		—		—		—
Residential real estate	—		—		—		—		—
Commercial Construction	—		—		—		—		—
Commercial and industrial	—		—		—		—		—
Consumer Construction	—		—		—		—		—
Home equity	—		—		—		238		—
Other Consumer	—		—		—		—		—
	—		—		—		238		—
Total impaired loans:
Commercial real estate	464		464		—		116		—
Residential real estate	—		—		—		—		—
Commercial Construction	—		—		—		—		—
Commercial and industrial	—		—		—		—		—
Consumer Construction	—		—		—		—		—
Home equity	819		1,361		—		495		—
Other Consumer	—		—		—		—		—
Total	$	1,283	$	1,825	$	—	$	611	$	—

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 2) (USD $) In Thousands, unless otherwise specified										3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Dec. 31, 2011 Commercial Real Estate [Member]	Dec. 31, 2011 Commercial and Industrial Loans [Member]	Dec. 31, 2011 Construction Loans [Member]	Dec. 31, 2011 Residential Real Estate [Member]	Dec. 31, 2011 Consumer Construction and development [Member]	Dec. 31, 2011 Home Equity Line Of Credit [Member]	Dec. 31, 2011 Consumer Loan [Member]	Sep. 30, 2011 Acquired Loans [Member]	Sep. 30, 2011 Acquired Loans [Member]	Sep. 30, 2011 Acquired Loans [Member] Commercial Real Estate [Member]	Sep. 30, 2011 Acquired Loans [Member] Commercial Real Estate [Member]	Sep. 30, 2011 Acquired Loans [Member] Commercial and Industrial Loans [Member]	Sep. 30, 2011 Acquired Loans [Member] Commercial and Industrial Loans [Member]	Sep. 30, 2011 Acquired Loans [Member] Construction Loans [Member]	Sep. 30, 2011 Acquired Loans [Member] Construction Loans [Member]	Sep. 30, 2011 Acquired Loans [Member] Residential Real Estate [Member]	Sep. 30, 2011 Acquired Loans [Member] Residential Real Estate [Member]	Sep. 30, 2011 Acquired Loans [Member] Consumer Loan [Member]	Sep. 30, 2011 Acquired Loans [Member] Consumer Loan [Member]	Sep. 30, 2012 Loans Originated By Company [Member]	Sep. 30, 2012 Loans Originated By Company [Member]	Sep. 30, 2012 Loans Originated By Company [Member] Commercial Real Estate [Member]	Sep. 30, 2012 Loans Originated By Company [Member] Commercial Real Estate [Member]	Sep. 30, 2012 Loans Originated By Company [Member] Commercial and Industrial Loans [Member]	Sep. 30, 2012 Loans Originated By Company [Member] Commercial and Industrial Loans [Member]	Sep. 30, 2012 Loans Originated By Company [Member] Construction Loans [Member]	Sep. 30, 2012 Loans Originated By Company [Member] Construction Loans [Member]	Sep. 30, 2012 Loans Originated By Company [Member] Residential Real Estate [Member]	Sep. 30, 2012 Loans Originated By Company [Member] Residential Real Estate [Member]	Sep. 30, 2012 Loans Originated By Company [Member] Consumer Construction and development [Member]	Sep. 30, 2012 Loans Originated By Company [Member] Consumer Construction and development [Member]	Sep. 30, 2012 Loans Originated By Company [Member] Home Equity Line Of Credit [Member]	Sep. 30, 2012 Loans Originated By Company [Member] Home Equity Line Of Credit [Member]	Sep. 30, 2012 Loans Originated By Company [Member] Consumer Loan [Member]	Sep. 30, 2012 Loans Originated By Company [Member] Consumer Loan [Member]	Dec. 31, 2011 Predecessor [Member]	Dec. 31, 2011 Predecessor [Member] Loans Originated By Company [Member]	Sep. 30, 2012 Successor [Member] Loans Originated By Company [Member]
Allowance for loan losses
Beginning balance										$ 22,319	$ 20,702	$ 8,015	$ 5,345	$ 2,905	$ 2,689	$ 7,227	$ 9,775	$ 4,102	$ 2,813	$ 70	$ 80	$ 2,113		$ 626	$ 126	$ 378	$ 30	$ 289	$ 19	$ 458	$ 27	$ 29	$ 2	$ 331	$ 20	$ 2	$ 3		$ 227	$ 2,264
Charge-offs										(4,350)	(13,258)	(1,723)	(2,394)	(778)	(1,556)	(1,534)	(7,965)	(308)	(1,314)	(7)	(29)	(807)	(1,693)	0	0	0	(105)	0	(46)	0	(3)	0	0	(693)	(1,404)	(114)	(135)
Recoveries										180	646	37	37	21	83	99	447	22	77	1	2	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Provision for loan losses										4,452	14,511	1,357	4,698	433	1,365	1,944	5,479	684	2,924	34	45	958	3,730	65	565	82	535	52	368	253	687	(10)	17	397	1,419	119	139
Ending balance										22,601	22,601	7,686	7,686	2,581	2,581	7,736	7,736	4,500	4,500	98	98			691	691	460	460	341	341	711	711	19	19	35	35	7	7		227	2,264
Ending balance:
Individually evaluated for impairment		0	0	0	0	0	0	0	0	66,040	66,040	18,500	18,500	3,395	3,395	30,628	30,628	13,484	13,484	33	33	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Collectively evaluated for impairment			126	30	19	27	2	20	3	550,608	550,608	311,200	311,200	40,999	40,999	82,762	82,762	111,972	111,972	3,675	3,675	1,357	1,357	609	609	349	349	174	174	165	165	19	19	35	35	6	6	227
Purchased credit-impaired		0	0	0	0	0	0	0	0													907	907	82	82	111	111	167	167	546	546	0	0	0	0	1	1
Loans:
Recorded Investment	1,283	551,437	310,315	39,101	74,663	66,657	8,461	48,940	3,300													541,003	541,003	306,722	306,722	56,976	56,976	54,090	54,090	74,760	74,760	4,496	4,496	40,875	40,875	3,084	3,084
Ending balance:
Individually evaluated for impairment		0	0	0	0	0	0	0	0													1,283	1,283	464	464	0	0	0	0	0	0	0	0	819	819	0	0
Collectively evaluated for impairment		263,833	149,654	12,426	12,276	33,702	7,039	45,886	2,850													328,974	328,974	177,880	177,880	39,435	39,435	15,504	15,504	49,643	49,643	3,631	3,631	40,056	40,056	2,825	2,825
Purchased credit-impaired		$ 287,604	$ 160,661	$ 26,675	$ 62,387	$ 32,955	$ 1,422	$ 3,054	$ 450													$ 210,746	$ 210,746	$ 128,378	$ 128,378	$ 17,541	$ 17,541	$ 38,586	$ 38,586	$ 25,117	$ 25,117	$ 865	$ 865	$ 0	$ 0	$ 259	$ 259

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FAIR VALUE MEASUREMENT (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Of Interest Rate Lock Commitments Table [Text Block]

There have been no changes in valuation techniques during the nine months ended September 30, 2012.

	Interest Rate Lock Commitments Level 3
	Successor			Predecessor
	Fair Value			Fair Value
Balance, January 1	$	212		$	53
Issuances	1,707			676
Settlements	(1,105		)	(486		)
Balance September 30	$	814		$	243

Fair Value And Measurement Level Of Assets And Liabilities Table [Text Block]

The following tables summarize information about assets and liabilities measured at fair value at September 30, 2012 and December 31, 2011:

				Fair Value Measurements at
				September 30, 2012
	Assets/(Liabilities) Measured at			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs			Significant Unobservable Inputs
Description	Fair Value			(Level 1)		(Level 2)			(Level 3)
Securities available for sale:
Residential mortgage-backed securities – GSE	$	23,312		$	—	$	23,312		$	—
Commercial mortgage-backed securities – private	6,872			—		6,872			—
Collateralized mortgage obligations – GSE	47,918			—		47,918			—
Municipals – non-taxable	16,218			—		16,218			—
Municipals – taxable	1,646			—		1,646			—
Corporate bonds	36,917			—		36,917			—
Marketable equity securities	70			70		—			—
Impaired loans	1,825			—		—			1,825
Foreclosed assets	3,828			—		—			3,828
Interest rate lock commitments	814			—		—			814
Derivative assets	207			—		207			—
Derivative liabilities	(152		)	—		(152		)	—

				Fair Value Measurements at December 31, 2011
	Assets/(Liabilities) Measured at			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs			Significant Unobservable Inputs
Description	Fair Value			(Level 1)		(Level 2)			(Level 3)
Securities available for sale:
Residential mortgage-backed securities - GSE	$	19,364		$	—	$	19,364		$	—
Collateralized mortgage obligations	82,095			—		82,095			—
Municipals – non-taxable	13,514			—		13,514			—
Corporate bonds	27,966			—		27,966			—
Marketable equity securities	565			565		—			—
Foreclosed assets	9,017			—		—			9,017
Interest rate lock commitments	212			—		—			212
Derivative liabilities	(330		)	—		(330		)	—

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

Quantitative Information about Level 3 Fair Value Measurements

	Fair Value at September 30, 2012		Valuation Technique	Unobservable Input	Range
Recurring measurements:
Interest Rate Lock Commitments	$	814	Pricing model	Pull through rates	80-85%
Impaired loans	1,825		Discounted Appraisals	Collateral discounts	15-50%
Nonrecurring measurements:
Foreclosed assets	3,828		Discounted appraisals	Collateral discounts	15-50%

Fair Carrying Value And Measurement Level Of Financial Assets And Liabilities Table [Text Block]

The following tables summarize the carrying amounts and estimated fair values of the Company’s financial instruments, none of which are held for trading purposes, at September 30, 2012 and December 31, 2011:

	September 30, 2012
	Carrying amount		Estimated fair value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	14,886	$	14,886	$	14,886	$	—	$	—
Investment securities	132,953		132,953		70		132,883		—
Federal Home Loan Bank stock	1,255		1,255		—		1,255		—
Mortgage loans held for sale	7,023		7,023		—		7,023		—
Loans, net	538,682		540,857		—		—		540,857
Interest rate caps	207		207		—		207		—
Accrued interest receivable	4,156		4,156		—		5,290		—
Financial liabilities:
Deposits	633,899		636,772		—		636,772		—
Long-term debt	12,326		12,462		—		—		12,462
Interest rate swaps	152		152		—		152		—
Accrued interest payable	430		430		—		430		—

	December 31, 2011
	Carrying amount		Estimated fair value
Financial assets:
Cash and cash equivalents	$	25,362	$	25,362
Investment securities	143,504		143,504
Federal Home Loan Bank stock	8,669		8,669
Mortgage loans held for sale	3,841		3,841
Loans, net	551,165		551,165
Accrued interest receivable	2,802		2,802
Financial liabilities:
Deposits	674,418		674,418
Long-term debt	12,216		12,216
Interest rate swaps	330		330
Accrued interest payable	780		780

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012 Successor [Member]	Sep. 30, 2011 Predecessor [Member]
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ 337	$ (13,495)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation	731	740
Stock based compensation	25	98
Provision for loan losses	3,730	14,511
Accretion of purchased loans	(13,723)	0
Amortization of core deposit intangible	194	100
Amortization of premium on time deposits	(2,438)	0
Accretion of discount on long-term debt	110	0
Gain on mortgage loan commitments	602	187
Net gain on sales of mortgage loans	1,687	499
Originations of mortgage loans held for sale	85,764	37,992
Proceeds from sales of mortgage loans	84,269	40,810
Net increase in cash surrender value of bank owned life insurance	539	585
Deferred income taxes	109	0
Gain on sale of available for sale securities	648	299
Net amortization of premiums on available for sale securities	373	1,582
Net loss on disposal of and valuation writedowns to foreclosed assets	196	1,636
Loss on disposal of premises and equipment	0	(1)
Gains from change in fair value of interest rate swaps	(178)	0
Change in assets and liabilities:
(Increase) decrease in accrued interest receivable	1,354	(711)
(Increase) decrease in other assets	(683)	(4,496)
Increase (decrease) in accrued interest payable	(350)	3
Increase in accrued expenses and other liabilities	(1,391)	523
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	(17,917)	12,154
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investment securities available for sale	(47,689)	(83,826)
Principal repayments of investment securities available for sale	11,454	28,041
Proceeds from sales of securities available for sale	50,291	21,520
Proceeds from disposal of foreclosed assets	7,005	5,080
Redemption of Federal Home Loan Bank stock	7,414	1,365
Loan originations and principal collections, net	5,655	32,024
Proceeds from sale of loans	14,809	11,404
Purchases of premises and equipment	(1,129)	(142)
NET CASH PROVIDED BY INVESTING ACTIVITIES	47,810	15,466
CASH FLOWS FROM FINANCING ACTIVITIES
Demand	(4,761)	8,695
Savings	(8,060)	(14,642)
Money market and NOW	21,188	6,119
Time deposits	(46,448)	(38,381)
Net decrease in short-term borrowings	0	(2,000)
Net decrease in long-term debt	0	(5,000)
Dividends paid on preferred stock	(2,288)	0
NET CASH USED IN FINANCING ACTIVITIES	(40,369)	(45,209)
NET INCREASE IN CASH AND CASH EQUIVALENTS	(10,476)	(17,589)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	25,362	49,106
CASH AND CASH EQUIVALENTS, END OF PERIOD	14,886	31,517
SUPPLEMENTAL DISCLOSURES:
Interest	6,409	13,389
Income taxes	0	0
Noncash investing activities:
Transfers of loans to foreclosed assets	$ 2,012	$ 4,834

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CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $)	Sep. 30, 2012 Successor [Member]	Dec. 31, 2011 Predecessor [Member]
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	24,900	24,900
Preferred stock, shares outstanding	24,900	24,900
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	28,379,445	28,412,059
Common stock, shares outstanding	28,379,445	28,412,059

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RECENT ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Sep. 30, 2012

Accounting Changes and Error Corrections [Abstract]

Accounting Changes and Error Corrections [Text Block]

Recent Accounting Pronouncements

In September 2011, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2011-08, Intangibles — Goodwill and Other, to amend FASB Accounting Standards Codification (“ASC”) Topic 350, Testing Goodwill for Impairment. The amendments in the Update permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Adoption of this update did not have a material impact on the Company’s financial position or results of operations.

In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income, to amend FASB ASC Topic 220, Comprehensive Income. The amendments in this update eliminate the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity and will require them to be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The single statement format would include the traditional income statement and the components and total other comprehensive income as well as total comprehensive income. In the two statement approach, the first statement would be the traditional income statement which would immediately be followed by a separate statement which includes the components of other comprehensive income, total other comprehensive income and total comprehensive income. The amendments in this update are to be applied retrospectively and are effective for the first interim or annual period beginning after December 15, 2011. Adoption of this update did not have a material impact on the Company’s financial position or results of operations.

In May 2011, the FASB issued ASU 2011-04, Amendments to Achieve CommonFair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, to amend ASC Topic 820, Fair Value Measurement. The amendments in this update result in common fair value measurement and disclosure requirements in GAAP and IFRS. Some of the amendments clarify the application of existing fair value measurement requirements and others change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. Many of the previous fair value requirements are not changed by this standard. The amendments in this update are to be applied prospectively and are effective during interim and annual periods beginning after December 15, 2011. Adoption of this update did not have a material impact on the Company’s financial position or results of operations.

In July 2012, the FASB issued ASU 2012-02, Intangibles – Goodwill and Other (Topic 350) – Testing Indefinite-Lived Intangible Assets for Impairment.” ASU 2012-02 gives entities the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that an indefinite-lived intangible asset is impaired. If, after assessing the totality of events or circumstances, an entity determines it is more likely than not that an indefinite-lived intangible asset is impaired, then the entity must perform the quantitative impairment test. If, under the quantitative impairment test, the carrying amount of the intangible asset exceeds its fair value, an entity should recognize an impairment loss in the amount of that excess. Permitting an entity to assess qualitative factors when testing indefinite-lived intangible assets for impairment results in guidance that is similar to the goodwill impairment testing guidance in ASU 2011-08. ASU 2012-02 is effective beginning January 1, 2013 with early adoption permitted. The adoption of ASU 2012-02 is not expected have a material impact on the Company’s financial position or results of operations.

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DOCUMENT AND ENTITY INFORMATION	9 Months Ended
	Sep. 30, 2012	Nov. 13, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	Crescent Financial Bancshares, Inc.
Entity Central Index Key	0001143921
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	crfn
Entity Common Stock, Shares Outstanding		28,379,445
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2012
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2012

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MERGERS AND ACQUISITIONS (Table)

9 Months Ended

Sep. 30, 2012

Business Combinations [Abstract]

Fair Value, by Balance Sheet Grouping [Table Text Block]

The following table summarizes the Piedmont Investment and the Successor Company’s opening balance sheet: 

	Preliminary Balances at Nov. 18, 2011		Measurement Period Adjustments			Adjusted Balances at Nov. 18, 2011
Fair value of assets acquired:
Cash and cash equivalents	$	226,126	$	—		$	226,126
Investment securities available for sale	89,343		—			89,343
Mortgage loans held for sale	4,588		—			4,588
Loans	561,911		(1,485		)	560,426
Federal Home Loan Bank stock	8,669		—			8,669
Premises and equipment	10,325		—			10,325
Deferred tax asset, net	30,268		1,782			32,050
Bank owned life insurance	19,169		—			19,169
Foreclosed assets	10,584		(405		)	10,179
Goodwill	20,015		3,095			23,110
Other intangible assets	2,260		—			2,260
Other assets	10,094		(1,182		)	8,912
Total assets acquired	993,352		1,805			995,157
Fair value of liabilities assumed:
Deposits	678,289		—			678,289
Borrowings	164,801		—			164,801
Other liabilities	7,111		1,805			8,916
Total liabilities assumed	850,201		1,805			852,006
Net assets	$	143,151	$	—		$	143,151
Non-controlling interests at fair value:
Preferred stock	24,409		—			24,409
Common stock warrants	1,326		—			1,326
Common stock	42,416		—			42,416
Total non-controlling interests	68,151		—			68,151
Purchase price	$	75,000	$	—		$	75,000

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2012 Successor [Member]	Sep. 30, 2012 Successor [Member]	Sep. 30, 2011 Predecessor [Member]	Sep. 30, 2011 Predecessor [Member]
INTEREST INCOME
Loans	$ 7,953	$ 24,137	$ 9,030	$ 27,130
Investment securities available for sale	893	2,787	1,836	5,325
Federal funds sold and interest-earning deposits	10	48	18	75
TOTAL INTEREST INCOME	8,856	26,972	10,884	32,530
INTEREST EXPENSE
Deposits	992	3,242	2,719	9,199
Short-term borrowings	0	2	21	58
Long-term debt	250	814	1,387	4,135
TOTAL INTEREST EXPENSE	1,242	4,058	4,127	13,392
NET INTEREST INCOME	7,614	22,914	6,757	19,138
PROVISION FOR LOAN LOSSES	958	3,730	4,452	14,511
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	6,656	19,184	2,305	4,627
NON-INTEREST INCOME
Mortgage banking income	1,066	2,411	475	900
Service charges and fees on deposit accounts	425	1,315	470	1,374
Earnings on bank owned life insurance	215	622	215	644
Gain (loss) on sale of available for sale securities	483	648	9	299
Other	133	658	275	345
TOTAL NON-INTEREST INCOME	2,322	5,654	1,444	3,562
NON-INTEREST EXPENSE
Salaries and employee benefits	4,263	12,099	3,140	9,624
Occupancy and equipment	1,159	3,251	968	2,959
Data processing	546	1,568	447	1,317
FDIC deposit insurance premium	159	678	292	1,117
Professional services	1,405	3,193	646	2,042
Net loss on foreclosed assets	191	196	291	1,643
Other loan related expense	411	1,272	378	1,165
Other	704	2,135	591	1,817
TOTAL NON-INTEREST EXPENSE	8,838	24,392	6,753	21,684
INCOME (LOSS) BEFORE INCOME TAXES	140	446	(3,004)	(13,495)
INCOME TAXES	94	109	0	0
NET INCOME (LOSS)	46	337	(3,004)	(13,495)
Effective dividend on preferred stock (Note I)	367	1,124	442	1,306
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ (321)	$ (787)	$ (3,446)	$ (14,801)
NET LOSS PER COMMON SHARE
Basic (in dollars per share)	$ (0.01)	$ (0.03)	$ (0.36)	$ (1.54)
Diluted (in dollars per share)	$ (0.01)	$ (0.03)	$ (0.36)	$ (1.54)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Note D)
Basic (in shares)	28,361,357	28,361,159	9,587,324	9,585,056
Diluted (in shares)	28,361,357	28,361,159	9,587,324	9,585,056

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INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2012

Investments, Debt and Equity Securities [Abstract]

Available For Sale Securities Disclosure [Text Block]

Investment Securities

The following is a summary of the securities portfolio by major classification:

	September 30, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale:
Residential mortgage-backed securities – GSE	$	22,692	$	620	$	—	$	23,312
Commercial mortgage-backed securities – private	6,759		113		—		6,872
Collateralized mortgage obligations – GSE	47,855		160		97		47,918
Municipals – non-taxable	15,510		708		—		16,218
Municipals – taxable	1,635		11		—		1,646
Corporate bonds	35,217		1,700		—		36,917
Marketable equity securities	37		33		—		70
	$	129,705	$	3,345	$	97	$	132,953

	December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale:
Residential mortgage-backed securities – GSE	$	19,452	$	19	$	107	$	19,364
Collateralized mortgage obligations – GSE	82,192		154		251		82,095
Municipals – non-taxable	13,281		263		30		13,514
Corporate bonds	28,042		39		115		27,966
Marketable equity securities	519		50		4		565
	$	143,486	$	525	$	507	$	143,504

The following tables summarize gross unrealized losses and fair values, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at September 30, 2012 and December 31, 2011:

	September 30, 2012
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Securities available for sale:
Collateralized mortgage obligations – GSE	24,079		97		—		—		24,079		97
Corporate bonds	2,067		—		—		—		2,067		—
Total temporarily impaired securities	$	26,146	$	97	$	—	$	—	$	26,146	$	97

	December 31, 2011
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Securities available for sale:
Residential mortgage-backed securities – GSE	$	9,153	$	107	$	—	$	—	$	9,153	$	107
Collateralized mortgage obligations – GSE	67,360		251		—		—		67,360		251
Municipals – non-taxable	2,637		30		—		—		2,637		30
Corporate bonds	15,819		115		—		—		15,819		115
Marketable equity securities	32		4		—		—		32		4
Total temporarily impaired securities	$	95,001	$	507	$	—	$	—	$	95,001	$	507

Unrealized losses on investment securities at September 30, 2012 related to sevenGSE collateralized mortgage obligations and twoinvestment grade corporate bonds. Unrealized losses on investment securities at December 31, 2011 related to eleven GSE collateralized mortgage obligations, four GSE mortgage-backed securities, three municipal securities, seveninvestment grade corporate bonds and one marketable equity security. At September 30, 2012 and December 31, 2011, none of the securities had been in an unrealized loss position for more than a twelve month period.

The securities in an unrealized loss position at September 30, 2012 have continued to perform and are expected to perform through maturity, and the issuers have not experienced significant adverse events that would call into question their ability to repay these debt obligations according to contractual terms. Further, because the Company does not intend to sell these investments and does not believe that it will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, unrealized losses on such securities are not considered to represent other-than-temporary impairment at September 30, 2012.

At September 30, 2012, the Company held no individual investment securities with an aggregate book value greater than 10% of stockholders’ equity. At September 30, 2012 and December 31, 2011, investment securities with a carrying value of $34,108 and $43,900, respectively, were pledged to secure public deposits, borrowings and for other purposes required or permitted by law.

The amortized cost and fair values of securities available for sale at September 30, 2012, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Less Than One Year		One to Five Years		Five to Ten Years		Over Ten Years		Equity Securities
Residential mortgage backed securities – GSE
Amortized cost	$	2,944	$	7,473	$	10,053	$	2,222	$	—
Fair value	3,024		7,676		10,321		2,291		—
Commercial mortgage backed securities – private
Amortized cost	—		6,759		—		—		—
Fair value	—		6,872		—		—		—
Collateralized mortgage obligations – GSE
Amortized cost	8,710		30,384		7,873		888		—
Fair value	8,724		30,424		7,884		886		—
Municipals – non-taxable
Amortized cost	—		6,776		4,205		4,529		—
Fair value	—		7,007		4,476		4,735		—
Municipals – taxable
Amortized cost	—		—		—		1,635		—
Fair value	—		—		—		1,646		—
Corporate bonds
Amortized cost	—		35,217		—		—		—
Fair value	—		36,917		—		—		—
Marketable equity securities
Amortized cost	—		—		—		—		37
Fair value	—		—		—		—		70
Total
Amortized cost	$	11,654	$	86,609	$	22,131	$	9,274	$	37
Fair value	$	11,748	$	88,896	$	22,681	$	9,558	$	70

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PER SHARE RESULTS

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Per Share Results

Basic earnings per share represents income (loss) available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued. Potential common shares that may be issued by the Company relate to outstanding stock options, restricted stock and the common stock warrant issued to the U.S. Treasury and are determined using the treasury stock method. Outstanding stock options and warrants are considered anti-dilutive due to the net loss attributable to common shareholders in each period. The calculation of basic and diluted weighted average shares and the weighted average anti-dilutive stock options and warrants were as follows for each period presented:

	Successor Company	Predecessor Company	Successor Company	Predecessor Company
	Three months ended September 30, 2012	Three months ended September 30, 2011	Nine months ended September 30, 2012	Nine months ended September 30, 2011
Weighted average number of shares used in computing basic earnings per share	28,361,357	9,587,324	28,361,159	9,585,056
Effect of dilutive stock options and warrant	—	—	—	—
Weighted average number of shares used in computing diluted earnings per share	28,361,357	9,587,324	28,361,159	9,585,056
Anti-dilutive stock options	233,377	281,667	233,377	281,667
Anti-dilutive warrants	833,705	833,705	833,705	833,705

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DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

The following tables disclose the location and fair value amounts of derivative instruments in the consolidated balance sheets:

		September 30, 2012					December 31, 2011
	Balance Sheet Location	Notional Amount		Estimated Fair Value			Notional Amount	Estimated Fair Value
Trust preferred securities:
Interest rate swap	Other liabilities	$	—	$	—		4,000	$	(38	)
Interest rate swap	Other liabilities	4,000		(80		)	4,000	(134		)
Interest rate cap	Other assets	8,000		107			—	—
Subordinated term loan agreement:
Interest rate swap	Other liabilities	—		—			3,750	(34		)
Interest rate swap	Other liabilities	3,750		(73		)	3,750	(124		)
Interest rate cap	Other assets	$	7,500	$	100		—	$	—
Loan commitments:
Interest rate lock commitments	Other assets	48,112		814			15,667	212
				$	868			$	(118	)

Schedule Of Accumulated Other Comprehensive Income (Oci) Related To Interest Rate Swaps [Table Text Block]

The following table discloses activity in accumulated other comprehensive income (“OCI”) related to the interest rate swaps for the nine months ended September 30, 2012 and 2011: 

	Successor Company		Predecessor Company
	Nine months ended September 30, 2012		Nine months ended September 30, 2011
Accumulated OCI resulting from interest rate swaps at beginning of period, net of tax	$	—	$	(356	)
Other comprehensive loss recognized, net of tax	—		115
Accumulated OCI resulting from interest rate swaps at end of period, net of tax	$	—	$	(241	)

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COMMITMENTS AND CONTINGENCIES(Table)

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Schedule of Fair Value, Off-balance Sheet Risks [Table Text Block]

The following is a summary of the contractual amount of the Company’s exposure to off-balance sheet commitments at September 30, 2012:

Undisbursed lines of credit	$	30,999
Commitments to extend credit	76,417
Financial standby letters of credit	4,196
Capital commitment to private investment fund	175

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FAIR VALUE MEASUREMENT

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Fair Value Measurements

The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. For example, investment securities available for sale are recorded at fair value on a recurring basis. Additionally, we may be required to record at fair value other assets on a nonrecurring basis, such as loans held for sale, impaired loans and certain other assets. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets. The following is a description of valuation methodologies used for assets and liabilities recorded at fair value.

Investment Securities. Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market exchange prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include marketable equity securities traded on an active exchange, such as the New York Stock Exchange. Level 2 securities include mortgage-backed securities and collateralized mortgage obligations, both issued by government sponsored entities, private label mortgage-backed securities, municipal bonds and corporate debt securities.

Derivatives. Derivative instruments include interest rate swaps and are valued on a recurring basis using models developed by third-party providers. This type of derivative is classified as Level 2 within the hierarchy.

Loans. Loans are not recorded at fair value on a recurring basis. However, certain loans are determined to be impaired, and those loans are charged down to estimated fair value. The fair value of impaired loans that are collateral dependent is based on collateral value. For impaired loans that are not collateral dependent, estimated value is based on either an observable market price, if available, or the present value of expected future cash flows. Those impaired loans not requiring a charge-off represent loans for which the estimated fair value exceeds the recorded investments in such loans. When the fair value of an impaired loan is based on an observable market price or a current appraised value with no adjustments, we record the impaired loan as nonrecurring Level 2. When an appraised value is not available, or we determine the fair value of the collateral is further impaired below the appraised value, and there is no observable market price, we classify the impaired loan as nonrecurring Level 3.

Interest Rate Lock Commitments. The fair value of interest rate lock commitments is based on servicing rate premium, origination income net of origination costs, fall out rates and changes in loan pricing between the commitment date and period end, typically month end. The Company classifies interest rate lock commitments as Level 3. There have been no changes in valuation techniques during the nine months ended September 30, 2012.

	Interest Rate Lock Commitments Level 3
	Successor			Predecessor
	Fair Value			Fair Value
Balance, January 1	$	212		$	53
Issuances	1,707			676
Settlements	(1,105		)	(486		)
Balance September 30	$	814		$	243

The difference between the gross issuances and settlements for the period is included in mortgage banking income within non-interest income on the consolidated statements of operations.

Foreclosed Assets. Foreclosed assets are adjusted to fair value upon transfer of loans to foreclosed assets. Subsequently, foreclosed assets are carried at lower of cost or net realizable value. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. Given the lack of observable market prices for identical properties, the Company classifies foreclosed assets as nonrecurring Level 3.

The following tables summarize information about assets and liabilities measured at fair value at September 30, 2012 and December 31, 2011:

				Fair Value Measurements at
				September 30, 2012
	Assets/(Liabilities) Measured at			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs			Significant Unobservable Inputs
Description	Fair Value			(Level 1)		(Level 2)			(Level 3)
Securities available for sale:
Residential mortgage-backed securities – GSE	$	23,312		$	—	$	23,312		$	—
Commercial mortgage-backed securities – private	6,872			—		6,872			—
Collateralized mortgage obligations – GSE	47,918			—		47,918			—
Municipals – non-taxable	16,218			—		16,218			—
Municipals – taxable	1,646			—		1,646			—
Corporate bonds	36,917			—		36,917			—
Marketable equity securities	70			70		—			—
Impaired loans	1,825			—		—			1,825
Foreclosed assets	3,828			—		—			3,828
Interest rate lock commitments	814			—		—			814
Derivative assets	207			—		207			—
Derivative liabilities	(152		)	—		(152		)	—

				Fair Value Measurements at December 31, 2011
	Assets/(Liabilities) Measured at			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs			Significant Unobservable Inputs
Description	Fair Value			(Level 1)		(Level 2)			(Level 3)
Securities available for sale:
Residential mortgage-backed securities - GSE	$	19,364		$	—	$	19,364		$	—
Collateralized mortgage obligations	82,095			—		82,095			—
Municipals – non-taxable	13,514			—		13,514			—
Corporate bonds	27,966			—		27,966			—
Marketable equity securities	565			565		—			—
Foreclosed assets	9,017			—		—			9,017
Interest rate lock commitments	212			—		—			212
Derivative liabilities	(330		)	—		(330		)	—

Quantitative Information about Level 3 Fair Value Measurements

	Fair Value at September 30, 2012		Valuation Technique	Unobservable Input	Range
Recurring measurements:
Interest Rate Lock Commitments	$	814	Pricing model	Pull through rates	80-85%
Impaired loans	1,825		Discounted Appraisals	Collateral discounts	15-50%
Nonrecurring measurements:
Foreclosed assets	3,828		Discounted appraisals	Collateral discounts	15-50%

The significant unobservable input used in the fair value measurement of the Company’s interest rate lock commitments is the closing ratio, which represents the percentage of loans currently in a lock position which management estimates will ultimately close. Generally, the fair value of an interest rate lock commitment is positive (negative) if the prevailing interest rate is lower (higher) than the interest rate lock commitment rate. Therefore, an increase in the pull through rates (i.e., higher percentage of loans estimated to close) will result in the fair value of the interest rate lock commitments increasing in a gain position, or decreasing in a loss position. The pull through ratio is largely dependent on the loan processing stage that a loan is currently in and the change in prevailing interest rates from the time of the rate lock. The pull through rate is computed based on historical internal data and the ratio is periodically reviewed by the Company’s mortgage banking division.

Due to the nature of the Company’s business, a significant portion of its assets and liabilities consist of financial instruments. Accordingly, the estimated fair values of these financial instruments are disclosed. Quoted market prices, if available, are utilized as an estimate of the fair value of financial instruments. The fair value of such instruments has been derived based on assumptions with respect to future economic conditions, the amount and timing of future cash flows and estimated discount rates. Different assumptions could significantly affect these estimates. Accordingly, the net amounts ultimately collected could be materially different from the estimates presented below. In addition, these estimates are only indicative of the values of individual financial instruments and should not be considered an indication of the fair value of the Company taken as a whole.

Cash and Cash Equivalents. The carrying amounts for cash and cash equivalents are equal to fair value.

Investment Securities Available for Sale. See discussion related to fair value estimates for securities available for sale in the fair value hierarchy section above. There have been no changes in valuation techniques for the nine months ended September 30, 2012. Valuation techniques are consistent with techniques used in prior periods.

Mortgage Loans Held For Sale. The fair value of mortgage loans held for sale is based on commitments on hand from investors within the secondary market for loans with similar characteristics. The changes in fair value of the assets are largely driven by changes in interest rates subsequent to loan funding and changes in the fair value of servicing associated with the mortgage loan for sale. As such, the Company classifies loans measured at fair value on a nonrecurring basis as a Level 2 asset. There have been no changes in valuation techniques for the nine months ended September 30, 2012. Valuation techniques are consistent with techniques used in prior periods.

Loans Held For Investment. The Company does not record loans held-for-investment at fair value on a recurring basis. However, when a loan is considered impaired an allowance for loan losses is established. The fair value of impaired loans is estimated using one of several methods based on portfolio type, acquired and non-acquired. Upon analyzing estimated credit losses in the acquired portfolio, we forecasted expected cash flows over the remaining life of each loan and discounted those expected cash flows to present value at current market interest rates for similar loans considering loan collateral type and credit quality. The fair value of any impaired non-acquired loans would be valued using either collateral value, market value of similar debt, enterprise value, liquidation value or discounted cash flows. There have been no changes in valuation techniques for the nine months ended September 30, 2012. Valuation techniques are consistent with techniques used in prior periods.

Federal Home Loan Bank Stock. Given the option to redeem this stock at par through the FHLB, the carrying value of FHLB stock approximates fair value. There have been no changes in valuation techniques for the nine months ended September 30, 2012. Valuation techniques are consistent with techniques used in prior periods.

Deposits. The fair value of demand deposits, savings, money market and NOW accounts represents the amount payable on demand. The fair value of fixed-maturity certificates of deposit and individual retirement accounts is estimated using the present value of the projected cash flows using interest rates currently offered for instruments of similar remaining maturities. The carrying values of short-term borrowings, including overnight, federal funds purchased and FHLB advances, approximates the fair values due to the short maturities of those instruments. There have been no changes in valuation techniques for the nine months ended September 30, 2012. Valuation techniques are consistent with techniques used in prior periods.

Short-term Borrowings and Long-term Debt. The fair value of short-term borrowings and long-term debt are based upon discounted expected cash flows at the interest rate for debt with the same or similar remaining maturities and collateral requirements could be obtained. There have been no changes in valuation techniques for the nine months ended September 30, 2012. Valuation techniques are consistent with techniques used in prior periods.

Accrued Interest Receivable and Accrued Interest Payable. The carrying amounts of accrued interest receivable and payable approximate fair value due to the short maturities of these instruments. There have been no changes in valuation techniques for the nine months ended September 30, 2012. Valuation techniques are consistent with techniques used in prior periods.

Derivative Instruments. See discussion related to fair value estimates for derivative instruments in the fair value hierarchy section above. There have been no changes in valuation techniques for the nine months ended September 30, 2012. Valuation techniques are consistent with techniques used in prior periods.

The following tables summarize the carrying amounts and estimated fair values of the Company’s financial instruments, none of which are held for trading purposes, at September 30, 2012 and December 31, 2011:

	September 30, 2012
	Carrying amount		Estimated fair value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	14,886	$	14,886	$	14,886	$	—	$	—
Investment securities	132,953		132,953		70		132,883		—
Federal Home Loan Bank stock	1,255		1,255		—		1,255		—
Mortgage loans held for sale	7,023		7,023		—		7,023		—
Loans, net	538,682		540,857		—		—		540,857
Interest rate caps	207		207		—		207		—
Accrued interest receivable	4,156		4,156		—		5,290		—
Financial liabilities:
Deposits	633,899		636,772		—		636,772		—
Long-term debt	12,326		12,462		—		—		12,462
Interest rate swaps	152		152		—		152		—
Accrued interest payable	430		430		—		430		—

	December 31, 2011
	Carrying amount		Estimated fair value
Financial assets:
Cash and cash equivalents	$	25,362	$	25,362
Investment securities	143,504		143,504
Federal Home Loan Bank stock	8,669		8,669
Mortgage loans held for sale	3,841		3,841
Loans, net	551,165		551,165
Accrued interest receivable	2,802		2,802
Financial liabilities:
Deposits	674,418		674,418
Long-term debt	12,216		12,216
Interest rate swaps	330		330
Accrued interest payable	780		780

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LOANS AND ALLOWANCE FOR LOAN LOSSES

9 Months Ended

Sep. 30, 2012

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Loans and Allowance for Loan Losses

The following is a summary of loans at September 30, 2012 and December 31, 2011: 

	September 30, 2012			December 31, 2011
Commercial:
Commercial real estate	$	306,722		$	310,315
Commercial and industrial	56,976			39,101
Construction and development	54,090			74,663
Consumer:
Residential real estate	74,760			66,657
Construction and development	4,496			8,461
Home equity	40,875			48,940
Other consumer	3,084			3,300
Total loans	541,003			551,437
Less:
Deferred loan fees	(57		)	(45		)
Allowance for loan losses	(2,264		)	(227		)
Net loans	$	538,682		$	551,165

Loans are primarily made in the Company’s market area of North Carolina, principally Wake, Johnston, Lee, Moore, and New Hanover counties. Real estate loans can be affected by the condition of the local real estate market. Commercial and consumer and other loans can be affected by the local economic conditions.

Purchased Credit-Impaired Loans

Changes in accretable yield, or income expected to be collected, related to purchased credit-impaired (“PCI”) loans in the nine months ended September 30, 2012 were as follows:

Balance at January 1, 2012	$	29,645
New loans purchased	—
Accretion of income	(11,617		)
Reclassifications from nonaccretable difference	10,297
Disposals	(1,788		)
Balance September 30, 2012	$	26,537

The accretable yield represents the excess of estimated cash flows expected to be collected over the initial fair value of the PCI loans, which is their fair value at the time of the Piedmont Investment. The accretable yield is accreted into interest income over the estimated life of the PCI loans using the level yield method. The accretable yield will change due to changes in:

• the estimate of the remaining life of PCI loans which may change the amount of future interest income, and possibly principal, expected to be collected;

• the estimate of the amount of contractually required principal and interest payments over the estimated life that will not be collected (the nonaccretable difference); and

• indices for PCI loans with variable rates of interest.

For PCI loans, the impact of loan modifications is included in the evaluation of expected cash flows for subsequent decreases or increases of cash flows. For variable rate PCI loans, expected future cash flows will be recalculated as the rates adjust over the lives of the loans. At acquisition, the expected future cash flows were based on the variable rates that were in effect at that time.

Allowance for Loan Losses

The following is a summary of changes in the allowance for loan losses and the ending recorded investment in loans by portfolio segment and based on impairment method as of and for the three and nine months ended September 30, 2012 and 2011:

	Successor Company
	Three months ended September 30, 2012
	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Residential Real Estate		Consumer Construction			Home Equity			Other Consumer			Total
Allowance for loan losses:
Beginning balance	$	626	$	378	$	289	$	458	$	29		$	331		$	2		$	2,113
Charge-offs	—		—		—		—		—			(693		)	(114		)	(807		)
Recoveries	—		—		—		—		—			—			—			—
Provision for loan losses	65		82		52		253		(10		)	397			119			958
Ending balance	$	691	$	460	$	341	$	711	$	19		$	35		$	7		$	2,264

	Successor Company
	Nine months ended September 30, 2012
	Commercial Real Estate		Commercial and Industrial			Commercial Construction			Residential Real Estate			Consumer Construction		Home Equity			Other Consumer			Total
Allowance for loan losses:
Beginning balance	$	126	$	30		$	19		$	27		$	2	$	20		$	3		$	227
Charge-offs	—		(105		)	(46		)	(3		)	—		(1,404		)	(135		)	(1,693		)
Recoveries	—		—			—			—			—		—			—			—
Provision for loan losses	565		535			368			687			17		1,419			139			3,730
Ending balance	$	691	$	460		$	341		$	711		$	19	$	35		$	7		$	2,264
Ending balance:
Individually evaluated for impairment	$	—	$	—		$	—		$	—		$	—	$	—		$	—		$	—
Collectively evaluated for impairment	$	609	$	349		$	174		$	165		$	19	$	35		$	6		$	1,357
Purchased credit-impaired	$	82	$	111		$	167		$	546		$	—	$	—		$	1		$	907
Loans:
Ending balance:
Individually evaluated for impairment	$	464	$	—		$	—		$	—		$	—	$	819		$	—		$	1,283
Collectively evaluated for impairment	177,880		39,435			15,504			49,643			3,631		40,056			2,825			328,974
Purchased credit-impaired	128,378		17,541			38,586			25,117			865		—			259			210,746
Total	$	306,722	$	56,976		$	54,090		$	74,760		$	4,496	$	40,875		$	3,084		$	541,003

	Predecessor Company
	Three months ended September 30, 2011
	Commercial Real Estate			Commercial and Industrial			Commercial Construction			Residential Real Estate			Other Consumer			Total
Allowance for loan losses:
Beginning balance	$	8,015		$	2,905		$	7,227		$	4,102		$	70		$	22,319
Charge-offs	(1,723		)	(778		)	(1,534		)	(308		)	(7		)	(4,350		)
Recoveries	37			21			99			22			1			180
Provision for loan losses	1,357			433			1,944			684			34			4,452
Ending balance	$	7,686		$	2,581		$	7,736		$	4,500		$	98		$	22,601

	Predecessor Company
	Nine months ended September 30, 2011
	Commercial Real Estate			Commercial and Industrial			Construction and Development			Residential Real Estate			Consumer			Total
Allowance for loan losses:
Beginning balance	$	5,345		$	2,689		$	9,775		$	2,813		$	80		$	20,702
Charge-offs	(2,394		)	(1,556		)	(7,965		)	(1,314		)	(29		)	(13,258		)
Recoveries	37			83			447			77			2			646
Provision for loan losses	4,698			1,365			5,479			2,924			45			14,511
Ending balance	$	7,686		$	2,581		$	7,736		$	4,500		$	98		$	22,601
Ending balance:
Individually evaluated for impairment	$	18,500		$	3,395		$	30,628		$	13,484		$	33		$	66,040
Collectively evaluated for impairment	$	311,200		$	40,999		$	82,762		$	111,972		$	3,675		$	550,608

The following is a summary of the ending allowance for loans losses and the recorded investment in loans by portfolio segment and based on impairment method at December 31, 2011:

	December 31, 2011
	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Residential Real Estate		Consumer Construction		Home Equity		Other Consumer		Total
Allowance for loan losses:
Ending balance:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment	$	126	$	30	$	19	$	27	$	2	$	20	$	3	$	227
Purchased credit-impaired	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans:
Ending balance:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment	149,654		12,426		12,276		33,702		7,039		45,886		2,850		263,833
Purchased credit-impaired	160,661		26,675		62,387		32,955		1,422		3,054		450		287,604
Total	$	310,315	$	39,101	$	74,663	$	66,657	$	8,461	$	48,940	$	3,300	$	551,437

Analysis of Credit Quality

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. The Company uses the following general definitions for risk ratings:

• Pass. These loans range from superior quality with minimal credit risk to loans requiring heightened management attention but that are still an acceptable risk and continue to perform as contracted.

• Special Mention. Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date.

• Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

• Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	Pass		Special Mention		Substandard		Doubtful		Total
September 30, 2012
Acquired loans
Commercial:
Real estate	$	184,892	$	40,891	$	13,881	$	—	$	239,664
Commercial and industrial	25,430		1,337		1,671		—		28,438
Construction and development	21,403		17,216		6,166		384		45,169
Consumer:
Residential real estate	44,512		4,177		6,379		131		55,199
Construction and development	2,638		166		425		—		3,229
Home equity	34,469		1,264		2,007		—		37,740
Other consumer	2,077		83		17		—		2,177
Total	$	315,421	$	65,134	$	30,546	$	515	$	411,616
Loans originated by the Successor Company
Commercial:
Real estate	$	67,058	$	—	$	—	$	—	$	67,058
Commercial and industrial	28,513		18		7		—		28,538
Construction and development	5,985		2,598		338		—		8,921
Consumer:
Residential real estate	19,437		124		—		—		19,561
Construction and development	1,267		—		—		—		1,267
Home equity	3,135		—		—		—		3,135
Other consumer	906		1		—		—		907
Total	$	126,301	$	2,741	$	345	$	—	$	129,387

	Pass		Special Mention		Substandard		Doubtful		Total
December 31, 2011
Acquired loans
Commercial:
Real estate	$	253,505	$	34,877	$	13,907	$	379	$	302,668
Commercial and industrial	33,636		2,213		2,259		—		38,108
Construction and development	39,122		22,482		12,402		519		74,525
Consumer:
Residential real estate	51,318		5,155		8,300		145		64,918
Construction and development	7,331		176		758		—		8,265
Home equity	42,766		2,064		3,684		—		48,514
Other consumer	2,795		336		43		—		3,174
Total	$	430,473	$	67,303	$	41,353	$	1,043	$	540,172
Loans originated by the Successor Company
Commercial:
Real estate	$	7,647	$	—	$	—	$	—	$	7,647
Commercial and industrial	894		99		—		—		993
Construction and development	138		—		—		—		138
Consumer:
Residential real estate	1,739		—		—		—		1,739
Construction and development	196		—		—		—		196
Home equity	426		—		—		—		426
Other consumer	126		—		—		—		126
Total	$	11,166	$	99	$	—	$	—	$	11,265

The following table presents the aging and accrual status of the loan portfolio at September 30, 2012 and December 31, 2011 by class of loans:

	30 - 89 Days Past Due		Greater than 89 Days Past Due Accruing		Non-accrual		Total Past Due		Loans Not Past Due		Total
September 30, 2012
Acquired loans
Commercial:
Real estate	$	1,757	$	3,408	$	464	$	5,629	$	234,035	$	239,664
Commercial and industrial	610		—		68		678		27,760		28,438
Construction and development	561		2,733		23		3,317		41,852		45,169
Consumer:
Residential real estate	752		1,113		—		1,865		53,334		55,199
Construction and development	132		97		48		277		2,952		3,229
Home equity	671		—		1,080		1,751		35,989		37,740
Other consumer	83		—		5		88		2,089		2,177
Total	$	4,566	$	7,351	$	1,688	$	13,605	$	398,011	$	411,616
Loans originated by the Successor Company
Commercial:
Real estate	$	3,036	$	—	$	—	$	3,036	$	64,022	$	67,058
Commercial and industrial	—		—		7		7		28,531		28,538
Construction and development	—		—		—		—		8,921		8,921
Consumer:
Residential real estate	—		—		—		—		19,561		19,561
Construction and development	—		—		—		—		1,267		1,267
Home equity	—		—		—		—		3,135		3,135
Other consumer	—		—		—		—		907		907
Total	$	3,036	$	—	$	7	$	3,043	$	126,344	$	129,387

	30 - 89 Days Past Due		Greater than  89 Days Past Due Accruing		Non-accrual		Total Past Due		Loans Not  Past Due		Total
December 31, 2011
Acquired loans
Commercial:
Real estate	$	3,878	$	6,101	$	—	$	9,979	$	292,689	$	302,668
Commercial and industrial	925		798		—		1,723		36,385		38,108
Construction and development	4,809		10,328		—		15,137		59,388		74,525
Consumer:
Residential real estate	2,289		4,148		—		6,437		58,481		64,918
Construction and development	652		382		—		1,034		7,231		8,265
Home equity	740		1,128		—		1,868		46,646		48,514
Other Consumer	3		3		—		6		3,168		3,174
Total	$	13,296	$	22,888	$	—	$	36,184	$	503,988	$	540,172

	30 - 89 Days Past Due		Greater than 89 Days Past Due Accruing		Non-accrual		Total Past Due		Loans Not  Past Due		Total
December 31, 2011
Loans originated by the Successor Company:
Commercial:
Real estate	$	—	$	—	$	—	$	—	$	7,647	$	7,647
Commercial and industrial	—		—		—		—		993		993
Construction and development	—		—		—		—		138		138
Consumer:
Residential real estate	—		—		—		—		1,739		1,739
Construction and development	—		—		—		—		196		196
Home equity	—		—		—		—		426		426
Other Consumer	—		—		—		—		126		126
Total	$	—	$	—	$	—	$	—	$	11,265	$	11,265

Non-accrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. Loans past due 90 days or more and still accruing primarily include purchased credit-impaired loans which are accreting interest at a pool level yield. No loans originated by the Successor Company or purchased non-impaired loans had been restructured in a troubled debt restructuring at September 30, 2012.

The following table is a summary of impaired loans, which exclude purchased credit-impaired loans, including the related allowance for loan losses at September 30, 2012:

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial real estate	$	464	$	464	$	—	$	116	$	—
Residential real estate	—		—		—		—		—
Commercial Construction	—		—		—		—		—
Commercial and industrial	—		—		—		—		—
Consumer Construction	—		—		—		—		—
Home equity	819		1,361		—		257		—
Other Consumer	—		—		—		—		—
	1,283		1,825		—		373		—
With an allowance recorded:
Commercial real estate	—		—		—		—		—
Residential real estate	—		—		—		—		—
Commercial Construction	—		—		—		—		—
Commercial and industrial	—		—		—		—		—
Consumer Construction	—		—		—		—		—
Home equity	—		—		—		238		—
Other Consumer	—		—		—		—		—
	—		—		—		238		—
Total impaired loans:
Commercial real estate	464		464		—		116		—
Residential real estate	—		—		—		—		—
Commercial Construction	—		—		—		—		—
Commercial and industrial	—		—		—		—		—
Consumer Construction	—		—		—		—		—
Home equity	819		1,361		—		495		—
Other Consumer	—		—		—		—		—
Total	$	1,283	$	1,825	$	—	$	611	$	—

No interest income was recognized on impaired loans during the period in which they were impaired for the three or nine month periods ended September 30, 2012. The Company had no impaired loans at December 31, 2011.

At September 30, 2012 and December 31, 2011, loans with a recorded investment of $180,655 and $217,095, respectively, were pledged to secure public deposits, borrowings and for other purposes required or permitted by law.

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DERIVATIVE FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Derivative Financial Instruments

The Company may, at times, use derivative financial instruments to manage its interest rate risk. These instruments carry varying degrees of credit, interest rate, and market or liquidity risks. Derivative instruments are recognized as either assets or liabilities in the consolidated financial statements and are measured at fair value. Subsequent changes in the derivatives’ fair values are recognized in earnings unless they qualify as effective cash flow hedges under U.S. GAAP.

Trust preferred securities

In August 2003, $8.0 million in trust preferred securities (“TRUPs”) were issued through Crescent Financial Capital Trust I (the “Trust”). The Trust invested the total proceeds from the sale of its TRUPs in junior subordinated deferrable interest debentures issued by the Company, which fully and unconditionally guarantees the TRUPs. The junior subordinated debentures were adjusted to estimated fair value in purchase accounting with the Piedmont Investment, and at September 30, 2012, their carrying value was $5.5 million. The TRUPs pay cumulative cash distributions quarterly at an annual contract rate, reset quarterly, equal to three-month LIBOR plus 3.10%.

In June 2009, the Predecessor Company entered into derivative financial instruments which swapped the variable rate payments for fixed payments. These instruments consisted of a three-year and four-year swap, each for one-half of the notional amount of the TRUPs for fixed rates of 5.49% and 5.97%, respectively. The three-year swap matured in June 2012. Due to the deferral of interest payments on the TRUPs, the remaining associated interest rate swap no longer qualifies for cash flow hedge accounting and is therefore marked to fair value through earnings.

Additionally, in May 2012, the Company entered into an interest rate cap effective in July 2012. This derivative financial instrument caps the interest rate on the the full $8.0 million notional amount of TRUPs at 3.57 percent through July 2017. In the event that the variable rate on the TRUPs exceeds the cap rate, the counterparty would pay the Company the difference between the variable rate due to the holders of the debentures and the cap rate.

Subordinated term loan agreement

On September 26, 2008, the Bank entered into an unsecured subordinated term loan agreement in the amount of $7.5 million. The agreement requires the Bank to make quarterly payments of interest at an annual contract rate, reset quarterly, equal to three-month LIBOR plus 4.00%. The subordinated term loan was adjusted to estimated fair value in purchase accounting with the Piedmont Investment, and at September 30, 2012, its carrying value was $6.8 million.

In June 2009, the Bank entered into derivative financial instruments which swapped the variable rate payments for fixed payments. These instruments consisted of a three-year and four-year swap, each for one-half of the notional amount of the subordinated debt for fixed rates of 6.39% and 6.87%, respectively. The three-year swap matured in June 2012. As of November 2011, these swaps were no longer designated as cash flow hedges and are, therefore, marked to fair value through earnings.

Additionally, in May 2012, the Company entered into an interest rate cap effective in July 2012. This derivative financial instrument caps the interest rate on the the full $7.5 million notional amount of subordinated term loan at 4.47 percent through July 2017. In the event that the variable rate on the subordinated term loan exceeds the cap rate, the counterparty would pay the Company the difference between the variable rate due on the subordinated term loan and the cap rate.

Loan commitments

Related to our mortgage business, we enter into interest rate lock commitments with customers and commitments to sell mortgages to investors under best-efforts contracts. The interest rate lock commitments are entered into to manage the interest rate risk associated with the best-efforts contracts and are considered derivative financial instruments under U.S. GAAP.

The following tables disclose the location and fair value amounts of derivative instruments in the consolidated balance sheets:

		September 30, 2012					December 31, 2011
	Balance Sheet Location	Notional Amount		Estimated Fair Value			Notional Amount	Estimated Fair Value
Trust preferred securities:
Interest rate swap	Other liabilities	$	—	$	—		4,000	$	(38	)
Interest rate swap	Other liabilities	4,000		(80		)	4,000	(134		)
Interest rate cap	Other assets	8,000		107			—	—
Subordinated term loan agreement:
Interest rate swap	Other liabilities	—		—			3,750	(34		)
Interest rate swap	Other liabilities	3,750		(73		)	3,750	(124		)
Interest rate cap	Other assets	$	7,500	$	100		—	$	—
Loan commitments:
Interest rate lock commitments	Other assets	48,112		814			15,667	212
				$	868			$	(118	)

The following table discloses activity in accumulated other comprehensive income (“OCI”) related to the interest rate swaps for the nine months ended September 30, 2012 and 2011: 

	Successor Company		Predecessor Company
	Nine months ended September 30, 2012		Nine months ended September 30, 2011
Accumulated OCI resulting from interest rate swaps at beginning of period, net of tax	$	—	$	(356	)
Other comprehensive loss recognized, net of tax	—		115
Accumulated OCI resulting from interest rate swaps at end of period, net of tax	$	—	$	(241	)

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CUMULATIVE PERPETUAL PREFERRED STOCK

9 Months Ended

Sep. 30, 2012

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Cumulative Perpetual Preferred Stock

Pursuant to the United States Treasury’s TARP Capital Purchase Program (“CPP”), the Company issued $24.9 million in Fixed Rate Cumulative Perpetual Preferred Stock, Series A (“preferred stock” or “Series A Preferred Stock”), on January 9, 2009. In addition, the Company provided a warrant to the Treasury to purchase 833,705 shares of the Company’s common stock at an exercise price of $4.48 per share. These warrants were immediately exercisable and expire ten years from the date of issuance. The preferred stock is non-voting, other than having class voting rights on certain matters, and pays cumulative dividends quarterly at a rate of 5% per annum for the first five years and 9% per annum thereafter. The preferred shares are redeemable at the option of the Company subject to regulatory approval.

Predecessor Company

The Predecessor Company used a Black-Scholes option pricing model to calculate the fair value of the common stock warrants issued pursuant to the TARP CPP and in connection with the Series A Preferred Stock. The common stock warrants were assigned a relative fair value of $2.28 per share, or $2.4 million in the aggregate, at issuance on January 9, 2009. This amount was recorded as the discount on the preferred stock and was accreted as a reduction in net income (loss) available for common stockholders over a five-year period. The relative fair value of the preferred stock at issuance was $22.5 million. Through the discount accretion over the five-year period, the preferred stock was scheduled to accrete up to the redemption amount of $24.9 million. For purposes of these calculations, the fair value of the common stock warrant at issuance was estimated using the Black-Scholes option pricing model based on the following assumptions:

Risk-free interest rate	2.49	%
Expected life of warrants	10 years
Expected dividend yield	—	%
Expected volatility	37.27	%

The Predecessor Company’s computation of expected volatility was based on daily historical volatility of the Company’s common stock since January 9, 2009. The risk-free interest rate was based on the market yield for ten-year U.S. Treasury securities as of the issuance date.

Successor Company

The Successor Company assigned an estimated fair value to both the Series A Preferred Stock and common stock warrants in purchase accounting in connection with the Piedmont Investment. These securities represent non-controlling interests that were recorded at estimated fair value. As discussed in Note B – Mergers and Acquisitions, the preferred stock was valued based on forecasting expected cash flows with an assumed repayment date and discounting these cash flows based on current market yields for similar preferred stock. For purposes of the discount rate, the Successor Company used the market yield on an index of publicly traded preferred stocks adjusted for a liquidity factor. The preferred stock was assigned a non-controlling interest fair value of $24.4 million at the acquisition date, and the discount between this value and the $24.9 million redemption value will be accreted as a reduction in net income (loss) available for common stockholders over a two-year period.

The common stock warrants were valued at $1.59 per share, or $1.3 million in the aggregate, at the acquisition date using a Black-Scholes option pricing model. Assumptions used in the Black-Scholes option pricing model were as follows:

Risk-free interest rate	0.31	%
Expected life of warrants	2 years
Expected dividend yield	—	%
Expected volatility	65.10	%

The risk-free interest rate was based on the market yield for two-year U.S. Treasury securities as of the acquisition date.

As a condition of the TARP CPP, the Company must obtain consent from the U.S. Treasury to repurchase its common stock or to pay a cash dividend on its common stock. Furthermore, the Company has agreed to certain restrictions on executive compensation and is subjected to heightened corporate governance requirements.

On April 12, 2012, the Company received approval from the Federal Reserve Bank of Richmond (the “Federal Reserve Bank”) to resume payment of preferred dividends on TARP Preferred Stock and interest payments due on its subordinated debentures issued in connection with trust preferred securities. The Company deferred dividend payments on its TARP Preferred Stock beginning with the payment due February 15, 2011. The Company paid all deferred cumulative preferred dividends, in the amount of $1.6 million, plus current dividends on the regularly scheduled quarterly payment date of May 15, 2012. The Company deferred interest payments on its trust preferred securities beginning with the payment due April 7, 2011 but continued to accrue interest expense in its consolidated financial statements. The Company paid all accrued deferred interest of $371 plus current interest on the regularly scheduled quarterly payment date of July 7, 2012.

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Loans	$ 541,003	$ 551,437
Less:
Deferred loan fees	(57)	(45)
Net loans	538,682	551,165
Commercial Real Estate [Member]
Loans	306,722	310,315
Commercial [Member]
Loans	56,976	39,101
Construction and development [Member]
Loans	54,090	74,663
Residential Real Estate [Member]
Loans	74,760	66,657
Consumer Construction and development [Member]
Loans	4,496	8,461
Home Equity Line Of Credit [Member]
Loans	40,875	48,940
Consumer Loan [Member]
Loans	3,084	3,300
Successor [Member]
Less:
Allowance for loan losses	(2,264)
Predecessor [Member]
Less:
Allowance for loan losses		$ (227)	[1]

[1] Derived from audited consolidated financial statements.

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INVESTMENT SECURITIES (Tables)

9 Months Ended

Sep. 30, 2012

Investments, Debt and Equity Securities [Abstract]

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

The following is a summary of the securities portfolio by major classification:

	September 30, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale:
Residential mortgage-backed securities – GSE	$	22,692	$	620	$	—	$	23,312
Commercial mortgage-backed securities – private	6,759		113		—		6,872
Collateralized mortgage obligations – GSE	47,855		160		97		47,918
Municipals – non-taxable	15,510		708		—		16,218
Municipals – taxable	1,635		11		—		1,646
Corporate bonds	35,217		1,700		—		36,917
Marketable equity securities	37		33		—		70
	$	129,705	$	3,345	$	97	$	132,953

	December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale:
Residential mortgage-backed securities – GSE	$	19,452	$	19	$	107	$	19,364
Collateralized mortgage obligations – GSE	82,192		154		251		82,095
Municipals – non-taxable	13,281		263		30		13,514
Corporate bonds	28,042		39		115		27,966
Marketable equity securities	519		50		4		565
	$	143,486	$	525	$	507	$	143,504

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Table Text Block]

The following tables summarize gross unrealized losses and fair values, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at September 30, 2012 and December 31, 2011:

	September 30, 2012
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Securities available for sale:
Collateralized mortgage obligations – GSE	24,079		97		—		—		24,079		97
Corporate bonds	2,067		—		—		—		2,067		—
Total temporarily impaired securities	$	26,146	$	97	$	—	$	—	$	26,146	$	97

	December 31, 2011
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Securities available for sale:
Residential mortgage-backed securities – GSE	$	9,153	$	107	$	—	$	—	$	9,153	$	107
Collateralized mortgage obligations – GSE	67,360		251		—		—		67,360		251
Municipals – non-taxable	2,637		30		—		—		2,637		30
Corporate bonds	15,819		115		—		—		15,819		115
Marketable equity securities	32		4		—		—		32		4
Total temporarily impaired securities	$	95,001	$	507	$	—	$	—	$	95,001	$	507

Investments Classified by Contractual Maturity Date [Table Text Block]

The amortized cost and fair values of securities available for sale at September 30, 2012, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Less Than One Year		One to Five Years		Five to Ten Years		Over Ten Years		Equity Securities
Residential mortgage backed securities – GSE
Amortized cost	$	2,944	$	7,473	$	10,053	$	2,222	$	—
Fair value	3,024		7,676		10,321		2,291		—
Commercial mortgage backed securities – private
Amortized cost	—		6,759		—		—		—
Fair value	—		6,872		—		—		—
Collateralized mortgage obligations – GSE
Amortized cost	8,710		30,384		7,873		888		—
Fair value	8,724		30,424		7,884		886		—
Municipals – non-taxable
Amortized cost	—		6,776		4,205		4,529		—
Fair value	—		7,007		4,476		4,735		—
Municipals – taxable
Amortized cost	—		—		—		1,635		—
Fair value	—		—		—		1,646		—
Corporate bonds
Amortized cost	—		35,217		—		—		—
Fair value	—		36,917		—		—		—
Marketable equity securities
Amortized cost	—		—		—		—		37
Fair value	—		—		—		—		70
Total
Amortized cost	$	11,654	$	86,609	$	22,131	$	9,274	$	37
Fair value	$	11,748	$	88,896	$	22,681	$	9,558	$	70

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MERGERS AND ACQUISITIONS (Details) (USD $)	Sep. 25, 2012	Dec. 31, 2011 Predecessor [Member]		Nov. 18, 2011 Piedmont Investment and Successor Company [Member] Preliminary Balance [Member]	Nov. 18, 2011 Piedmont Investment and Successor Company [Member] Measurement Period Adjustment [Member]	Nov. 18, 2011 Piedmont Investment and Successor Company [Member] Adjusted Balance [Member]
Fair value of assets acquired:
Cash and cash equivalents		$ 25,362,000		$ 226,126,000	$ 0	$ 226,126,000
Investment securities available for sale		143,504,000		89,343,000	0	89,343,000
Mortgage loans held for sale		3,841,000		4,588,000	0	4,588,000
Loans				561,911,000	(1,485,000)	560,426,000
Federal Home Loan Bank stock		8,669,000		8,669,000	0	8,669,000
Premises and equipment				10,325,000	0	10,325,000
Deferred tax asset, net				30,268,000	1,782,000	32,050,000
Bank owned life insurance				19,169,000	0	19,169,000
Foreclosed assets		9,017,000	[1]	10,584,000	(405,000)	10,179,000
Goodwill				20,015,000	3,095,000	23,110,000
Other intangibles				2,260,000	0	2,260,000
Other assets				10,094,000	(1,182,000)	8,912,000
Total assets acquired				993,352,000	1,805,000	995,157,000
Fair value of liabilities assumed:
Deposits		674,418,000		678,289,000	0	678,289,000
Borrowings				164,801,000	0	164,801,000
Other liabilities				7,111,000	1,805,000	8,916,000
Total liabilities assumed				850,201,000	1,805,000	852,006,000
Net assets				143,151,000	0	143,151,000
Non-controlling interests at fair value:
Preferred stock		24,442,000	[1]	24,409,000	0	24,409,000
Common stock warrants		1,325,000	[1]	1,326,000	0	1,326,000
Common stock	0.001	28,000	[1]	42,416,000	0	42,416,000
Total non-controlling interests				68,151,000	0	68,151,000
Purchase price				$ 75,000,000	$ 0	$ 75,000,000

[1] Derived from audited consolidated financial statements.

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DERIVATIVE FINANCIAL INSTRUMENTS (Details 1) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012 Successor [Member]	Sep. 30, 2011 Predecessor [Member]
Accumulated OCI resulting from interest rate swaps at beginning of period, net of tax	$ 0	$ (356)
Other comprehensive loss recognized, net of tax	0	115
Accumulated OCI resulting from interest rate swaps at end of period, net of tax	$ 0	$ (241)

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2012 Successor [Member]	Sep. 30, 2012 Successor [Member]	Sep. 30, 2011 Predecessor [Member]	Sep. 30, 2011 Predecessor [Member]
NET INCOME (LOSS)	$ 46	$ 337	$ (3,004)	$ (13,495)
Securities available for sale:
Unrealized holding gains on available for sale securities	1,806	3,878	768	2,333
Tax effect	(696)	(1,495)	(296)	(899)
Reclassification of (gains) losses on sale of securities recognized in earnings	(483)	(648)	(10)	(299)
Tax effect	(186)	(250)	(4)	(115)
Net of tax amount	813	1,985	466	1,250
Cash flow hedging:
Unrealized gains (losses) on cash flow hedges	(445)	(445)	112	186
Tax effect	171	171	(43)	(72)
Net of tax amount	(274)	(274)	69	114
Other comprehensive income	539	1,711	535	1,364
TOTAL COMPREHENSIVE INCOME (LOSS)	$ 585	$ 2,048	$ (2,469)	$ (12,131)

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments Disclosure [Text Block]

Commitments and Contingencies

The following is a summary of the contractual amount of the Company’s exposure to off-balance sheet commitments at September 30, 2012:

Undisbursed lines of credit	$	30,999
Commitments to extend credit	76,417
Financial standby letters of credit	4,196
Capital commitment to private investment fund	175

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MERGERS AND ACQUISITIONS (Details Textual) (USD $)	1 Months Ended	9 Months Ended										0 Months Ended
	Nov. 30, 2011	Sep. 30, 2012	Sep. 25, 2012	Dec. 31, 2011	Nov. 18, 2011	Sep. 26, 2008	Nov. 08, 2011 Piedmont Investment and Tender Offer [Member]	Nov. 18, 2011 Piedmont Community Bank Holdings Inc [Member]	Nov. 08, 2011 Piedmont Community Bank Holdings Inc [Member]	Nov. 08, 2011 Piedmont Community Bank Holdings Inc [Member] Minimum [Member]	Nov. 08, 2011 Piedmont Community Bank Holdings Inc [Member] Maximum [Member]	Jul. 27, 2012 Vantage South Bank Merger [Member]	Sep. 30, 2012 Vantage South Bank Merger [Member]	Aug. 12, 2012 Vantage South Bank Merger [Member]	Aug. 12, 2012 Vantage South Bank Merger [Member] Minimum [Member]	Nov. 08, 2011 Vantage South Bank Merger [Member] Minimum [Member]	Aug. 12, 2012 Vantage South Bank Merger [Member] Maximum [Member]	Nov. 08, 2011 Vantage South Bank Merger [Member] Maximum [Member]	Sep. 25, 2012 East Carolina Bancorp [Member] branch_office
Common Stock, Par or Stated Value Per Share																			$ 3.50
Conversion Rate of Common Stock															4.8204		5.3278		3.55
Common Stock, Value, Issued			$ 0.001
Number of Branch Offices																			25
Subsidiary or Equity Method Investee, Cumulative Percentage Ownership after All Transactions												100.00%
Stock Issued Shares Issued For Cash								18,750,000
Proceeds From Sales Of Common Stock								75,000,000	29,100,000
Equity Method Investment, Ownership Percentage										67.00%	88.00%
Tender Offer Purchase Common Shares									6,442,105
Tender Offer Price Per Common Shares							$ 4.75		$ 4.75							$ 4.75		$ 5.25
Conversion Rate of Common Stock Between $4.75 and $5.25														25.307
Push Down Accounting Purchase Transactions Discription		In determining whether a company has become substantially wholly owned, SEC staff guidance indicates that push-down accounting would be required if 95% or more of the company has been acquired, permitted if 80% to 95% has been acquired, and prohibited if less than 80% of the company is acquired. The Company determined push-down accounting to be appropriate due to Piedmont’s acquisition of 88% of the Company’s outstanding common stock in the Piedmont Investment and the Tender Offer.
Number Of Share Purchased At Offer Price									6,128,423
Goodwill, Period Increase (Decrease)		3,095,000
Amortized Cost		129,705,000		143,486,000	89,800,000
Available For Sale Securities Change In Unrealized Holding Gain Loss					862,000
Fair Value Financial Assets Held For Investment Present Value					44,900,000
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums					663,000
Long Lived Assets Held-for-sale, Impairment Charge					540,000
Certificates of Deposit, at Carrying Value					196,500,000
Certificates Of Deposit Fair Value Premium					4,400,000
Brokered Deposits Carrying Value					115,000,000
Brokered Deposits Fair Value Premium					1,600,000
Certificate Of Deposit Account Registry Service At Carrying Value					15,500,000
Certificate Of Deposit Account Registry Service Fair Value Premium					47,000
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Amount of Advances					142,000,000
Federa Lhome Loan Bank Advances Branch Of F H L B Bank Fair Value Premium					10,600,000
Federal Home Loan Bank Advance Branch Of F H L B Bank Due Date	Dec. 31, 2011
Trusted Perfered Securities Carrying Value					8,000,000
Subordinated Debt		6,800,000				7,500,000
Trusted Perfered Securities Fair Value Discount Premium					2,800,000
Fair Value Liabilities Measured On Recurring Basis Subordinated Debt Obligations Premium Discount					731,000
Redeemable Noncontrolling Interest, Equity, Carrying Amount					24,900,000
Market Price Per Share					$ 4.39
TOTAL ASSETS													$ 260,700,000
Common stock, shares outstanding													1,382,961

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 4) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Commercial, Construction		$ 519
Consumer, Construction		0
Consumer, Home equity		0
Loans	541,003	551,437
Acquired Loans [Member]
Commercial, Real estate	239,664	302,668
Commercial, Construction	45,169	74,525
Commercial and industrial	28,438	38,108
Consumer, Residential real estate	55,199	64,918
Consumer, Construction	3,229	8,265
Consumer, Home equity	37,740	48,514
Loans to individuals	2,177	3,174
Loans	411,616	540,172
Loans Originated By Company [Member]
Commercial, Real estate	67,058	7,647
Commercial, Construction	8,921	138
Commercial and industrial	28,538	993
Consumer, Residential real estate	19,561	1,739
Consumer, Construction	1,267	196
Consumer, Home equity	3,135	426
Loans to individuals	907	126
Loans	129,387	11,265
Days Past Due 30 89 [Member] | Acquired Loans [Member]
Commercial, Real estate	1,757	3,878
Commercial, Construction	561	4,809
Commercial and industrial	610	925
Consumer, Residential real estate	752	2,289
Consumer, Construction	132	652
Consumer, Home equity	671	740
Loans to individuals	83	3
Loans	4,566	13,296
Days Past Due 30 89 [Member] | Loans Originated By Company [Member]
Commercial, Real estate	3,036	0
Commercial, Construction	0	0
Commercial and industrial	0	0
Consumer, Residential real estate	0	0
Consumer, Construction	0	0
Consumer, Home equity	0	0
Loans to individuals	0	0
Loans	3,036	0
Greater Than 89 Days Past Due Accruing [Member] | Acquired Loans [Member]
Commercial, Real estate	3,408	6,101
Commercial, Construction	2,733	10,328
Commercial and industrial	0	798
Consumer, Residential real estate	1,113	4,148
Consumer, Construction	97	382
Consumer, Home equity	0	1,128
Loans to individuals	0	3
Loans	7,351	22,888
Greater Than 89 Days Past Due Accruing [Member] | Loans Originated By Company [Member]
Commercial, Real estate	0	0
Commercial, Construction	0	0
Commercial and industrial	0	0
Consumer, Residential real estate	0	0
Consumer, Construction	0	0
Consumer, Home equity	0	0
Loans to individuals	0	0
Loans	0	0
Nonaccrual [Member] | Acquired Loans [Member]
Commercial, Real estate	464	0
Commercial, Construction	23	0
Commercial and industrial	68	0
Consumer, Residential real estate	0	0
Consumer, Construction	48	0
Consumer, Home equity	1,080	0
Loans to individuals	5	0
Loans	1,688	0
Nonaccrual [Member] | Loans Originated By Company [Member]
Commercial, Real estate	0	0
Commercial, Construction	0	0
Commercial and industrial	7	0
Consumer, Residential real estate	0	0
Consumer, Construction	0	0
Consumer, Home equity	0	0
Loans to individuals	0	0
Loans	7	0
Total Past Due [Member] | Acquired Loans [Member]
Commercial, Real estate	5,629	9,979
Commercial, Construction	3,317	15,137
Commercial and industrial	678	1,723
Consumer, Residential real estate	1,865	6,437
Consumer, Construction	277	1,034
Consumer, Home equity	1,751	1,868
Loans to individuals	88	6
Loans	13,605	36,184
Total Past Due [Member] | Loans Originated By Company [Member]
Commercial, Real estate	3,036	0
Commercial, Construction	0	0
Commercial and industrial	7	0
Consumer, Residential real estate	0	0
Consumer, Construction	0	0
Consumer, Home equity	0	0
Loans to individuals	0	0
Loans	3,043	0
Loans Not Past Due [Member] | Acquired Loans [Member]
Commercial, Real estate	234,035	292,689
Commercial, Construction	41,852	59,388
Commercial and industrial	27,760	36,385
Consumer, Residential real estate	53,334	58,481
Consumer, Construction	2,952	7,231
Consumer, Home equity	35,989	46,646
Loans to individuals	2,089	3,168
Loans	398,011	503,988
Loans Not Past Due [Member] | Loans Originated By Company [Member]
Commercial, Real estate	64,022	7,647
Commercial, Construction	8,921	138
Commercial and industrial	28,531	993
Consumer, Residential real estate	19,561	1,739
Consumer, Construction	1,267	196
Consumer, Home equity	3,135	426
Loans to individuals	907	126
Loans	$ 126,344	$ 11,265

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PER SHARE RESULTS (Table)

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Schedule of Earnings Per Share Reconciliation [Table Text Block]

The calculation of basic and diluted weighted average shares and the weighted average anti-dilutive stock options and warrants were as follows for each period presented:

	Successor Company	Predecessor Company	Successor Company	Predecessor Company
	Three months ended September 30, 2012	Three months ended September 30, 2011	Nine months ended September 30, 2012	Nine months ended September 30, 2011
Weighted average number of shares used in computing basic earnings per share	28,361,357	9,587,324	28,361,159	9,585,056
Effect of dilutive stock options and warrant	—	—	—	—
Weighted average number of shares used in computing diluted earnings per share	28,361,357	9,587,324	28,361,159	9,585,056
Anti-dilutive stock options	233,377	281,667	233,377	281,667
Anti-dilutive warrants	833,705	833,705	833,705	833,705