Park Sterling Corporation Announces Record Results for Third Quarter 2013

Park Sterling Corporation Announces Record Results for Third Quarter 2013

CHARLOTTE, N.C., Oct. 25, 2013 (GLOBE NEWSWIRE) -- Park Sterling Corporation
(Nasdaq:PSTB), the holding company for Park Sterling Bank, today released
unaudited results of operations and other financial information for the third
quarter of 2013. Highlights at and for the three months ended September 30,
2013 include:

Highlights

  *Net income available to common shareholders increased 20% from the prior
    quarter to a record $4.2 million, or $0.10 per share
  *Adjusted net income available to common shareholders, which excludes
    merger-related expenses and gain on sale of securities, increased 9% from
    the prior quarter to a record $4.3 million, or $0.10 per share
  *Annualized return on average assets increased to 0.85% from 0.72% in the
    prior quarter
  *Adjusted annualized return on average assets, which excludes
    merger-related expenses and gain on sale of securities, increased to 0.87%
    from 0.81% in the prior quarter
  *Metro markets posted quarterly loan growth of $26.7 million (19%
    annualized)
  *Nonperforming assets decreased to 1.52% of total assets from 1.58% at June
    30, 2013
  *Tangible common equity increased to 11.78% of tangible assets from 11.40%
    at June 30, 2013
  *Exited Small Business Lending Fund program through redemption in whole of
    our $20.5 million in Series C Preferred Stock
  *Declared quarterly cash dividend on common shares of $0.02 per share
  *Well positioned to pursue organic growth opportunities and strategic
    partnerships

"Park Sterling's third quarter results continue to confirm the progress
achieved in executing our growth strategies," said James C. Cherry, Chief
Executive Officer. "We reported our fourth consecutive quarter of record
operating results, with adjusted net income available to common shareholders,
which excludes merger-related expenses and gain on sale of securities,
increasing 9% to $4.3 million, or $0.10 per share, for the three months ended
September 30, 2013 compared to $4.0 million, or $0.09 per share for the three
months ended June 30, 2013. As a result, our adjusted annualized return on
average assets, which excludes merger-related expenses and gain on sale of
securities, increased to 0.87% for the third quarter compared to 0.81% for the
second quarter.

"The improved earnings were supported, in part, by continued operating
strength in our metro areas. These markets – which include Charlotte, Raleigh
and Wilmington, North Carolina and Greenville and Charleston, South Carolina –
posted quarterly loan growth of $26.7 million, or 19% annualized, following a
9% annualized growth rate in the second quarter. This exceptional performance
enabled Park Sterling to report an $11.7 million increase in total loans
during the third quarter of 2013, following three consecutive quarters of net
loan contraction as a result of expected shrinkage in our acquired loan
portfolios.

"The improved earnings were also supported by continued improvements in asset
quality and sound cost controls. On the asset quality front, over 97% of our
loans remain in pass grade categories and nonperforming assets decreased to
1.52% of total assets from 1.58% at June 30, 2013. In addition, improved cash
flow expectations in our purchase credit impaired (PCI) loan pools resulted in
a $419,000 reversal of provision expense for the third quarter. The benefit
from this reversal effectively was offset by a $444,000 reduction in mortgage
banking income associated with revenue recognition under ASC 815-10-S99-1,
reflecting a decreased pipeline of mortgage loans, which contributed to an
overall $711,000, or 18%, reduction in noninterest income compared to the
second quarter. On the cost control front, adjusted noninterest expenses,
which exclude merger-related expenses, decreased $459,000, or 3%, for the
three-month period, reflecting lower run rates across most major expense
categories, primarily as a result of continued merger integration efforts.
Importantly, these good expense results occurred even as we continued to
invest in the training and development of our people, as exemplified by our
Sterling Edge retail sales program, as well as in our product capabilities, as
exemplified by our new mobile banking platform.

"On the capital management front, as previously announced, we exited the Small
Business Lending Fund (SBLF) program on September 30, 2013 as a result of
fully redeeming our $20.5 million in Series C Preferred Stock. This redemption
simplifies our capital structure, reduces our overall funding costs and is
further evidence of our strong financial position. In addition, the board has
declared a quarterly dividend of $0.02 per common share, payable on November
20, 2013 to all shareholders of record as of the close of business on November
6, 2013. Future dividends will be subject to board approval.

"Overall, we are pleased to report these strong financial results and believe
that Park Sterling is well positioned to continue pursuing our growth
strategies. We remain confident in our ability to both grow our existing
franchise and to unite with attractive, like-minded partners that share Park
Sterling's vision of building a full-service regional community bank."

Third Quarter 2013 Financial Results

Income Statement

Park Sterling reported a 20% increase in net income available to common
shareholders to a record $4.2 million, or $0.10 per share, for the three
months ended September 30, 2013 ("2013Q3").This compares to net income
available to common shareholders of $3.5 million, or $0.08 per share, for the
three months ended June 30, 2013 ("2013Q2") and net income available to common
shareholders of $620,000, or $0.02 per share, for the three months ended
September 30, 2012 ("2012Q3").The increase from 2013Q2 resulted, in part,
from sound expense controls and continued improvements in asset quality,
including a $419,000 reversal of provision expense relating to improved
expected cash flows on previously impaired PCI loan pools, as accounted for
under ASC 310-30. The increase from 2012Q3 resulted primarily from higher net
interest income associated with the merger with Citizens South Banking
Corporation (Citizens South), which was completed on October 1, 2012, combined
with continued organic growth.

In addition, net income available to common shareholders for 2013Q3 benefited
from the absence of dividends on the company's Series C Preferred Stock, which
totaled $302,000 in 2013Q2. The Series C Preferred Stock was issued to the
U.S. Department of the Treasury ("Treasury") in October 2012 in connection
with the company's acquisition of Citizens South and resulted from conversion
of the Citizens South preferred stock previously issued to the Treasury in
connection with Citizens South's participation in the SBLF program. Dividends
due in conjunction with the company's redemption of the Series C Preferred
Stock on September 30, 2013 were determined, after consultation with Treasury,
to have been recognized in the previously disclosed 2013Q2 preferred dividend
accrual. There were no preferred dividends paid in 2012Q3.

Park Sterling reported a 9% increase in adjusted net income available to
common shareholders, which excludes merger-related expenses and gain on sale
of securities, to a record $4.3 million, or $0.10 per share, in 2013Q3. This
compares to adjusted net income available to common shareholders of $4.0
million, or $0.09 per share, in 2013Q2 and of $987,000, or $0.03 per share, in
2012Q3. The increase in adjusted net income available to common shareholders
from 2013Q2 again reflects sound expense controls, continued improvements in
asset quality and the absence of preferred dividends, while the increase from
2012Q3 primarily reflects net interest income associated with the merger with
Citizens South, combined with continued organic growth.

Net interest income totaled $18.3 million for 2013Q3, which represented a 2%
decrease from $18.7 million in 2013Q2 and an 84% increase from $10.0 million
in 2012Q3. Average earning assets increased $5.5 million, or 0%, from 2013Q2
to $1.75 billion for 2013Q3.The modest increase in average earning assets
resulted from a $41.5 million, or 13%, increase in average securities to
$349.7 million, which more than offset an $18.3 million, or 1%, decrease in
average loans to $1.32 billion and a $17.6 million, or 18%, decrease in
average other earnings assets. The decrease in average loans for the period
was driven by an expected continued decrease in acquired loans. Compared to
2012Q3, average earning assets increased $749.2 million, or 75%, primarily as
a result of a $599.6 million, or 83%, increase in average loans resulting from
the merger with Citizens South.

Net interest margin was 4.16% in 2013Q3, representing a 14 basis point
decrease from 4.30% in 2013Q2 and a 19 basis point increase from 3.97% in
2012Q3. Adjusted net interest margin, which excludes accelerated accretion of
net acquisition accounting fair market value adjustments, was 4.04% in 2013Q3,
representing a 13 basis point decrease from 4.17% in 2013Q2 and a 6 basis
point increase from 3.98% in 2012Q3. Accelerated accretion of net acquisition
accounting fair market value adjustments, which totaled $529,000 in 2013Q3,
$560,000 in 2013Q2 and a negative $17,000 in 2012Q3, reflects accelerated
accretion of credit and interest rate marks resulting from borrowers repaying
performing acquired loans faster than required by their contractual terms
and/or restructuring loans in such a way as to effectively result in a new
loan under the contractual cash flow method of accounting, both of which
result in the associated remaining credit and interest rate marks being fully
accreted into interest income.

Provision expense continued to be driven in large part by the company's PCI
loan pools, as accounted for under ASC 310-30. Improved performance in these
pools resulted in a $419,000 recovery of provision expense in 2013Q3,
reflecting the reversal of previous impairments. This compares to a $75,000
provision in 2013Q2, which was driven by $372,000 of expense associated with
impairment of five of the company's thirteen PCI loan pools, and a $7,000
provision in 2012Q3, which was driven by $255,000 of expense associated with
impairment of one of the company's PCI loan pools. The company released
allowance associated with its non-acquired and acquired performing loans in
each of 2013Q3, 2013Q2 and 2012Q3 as a result of improving credit performance
(please refer to "Balance Sheet" and "Asset Quality" sections below for
additional information). 

Noninterest income decreased $711,000, or 18%, to $3.3 million in 2013Q3,
compared to $4.0 million in 2013Q2, and decreased $28,000, or 1%, compared to
$3.3 million in 2012Q3. Adjusted noninterest income, which excludes gain on
sale of securities ($0 in 2013Q3, $104,000 in 2013Q2 and $989,000 in 2012Q3),
decreased $607,000, or 16%, to $3.3 million in 2013Q3, compared to $3.9
million in 2013Q2, and increased $961,000, or 42%, compared to $2.3 million in
2012Q3. The decrease in adjusted noninterest income from 2013Q2 included a
$21,000, or 3%, increase in service charges on deposit accounts and a
$179,000, or 24%, increase in income from wealth management activities, which
were more than offset by a $576,000, or 59%, decrease in mortgage banking
income and a $187,000, or 58%, decrease in other noninterest income.The
decrease in mortgage banking income from 2013Q2 included a $444,000 reduction
in revenue recognition associated with ASC 815-10-S99-1 (formerly Staff
Accounting Bulletin 109), reflecting a decrease in the pipeline of mortgage
loans. The company recognized revenue of $89,000 in 2013Q2 associated with ASC
815-10-S99-1. The increase in adjusted noninterest income from 2012Q3 resulted
primarily from the merger with Citizens South.

Following a review of wealth management activities, the company has decided to
exit the custody business. The transition should be completed by mid-2014.
This decision is expected to have a negative impact on existing noninterest
income of approximately $175,000 per quarter, ramping in over the transition
period. Resources currently focused on the custody business are expected to be
redirected to the company's core asset management business.

Noninterest expenses decreased $1.1 million, or 7%, to $15.7 million in
2013Q3, compared to $16.8 million in 2013Q2, and increased $3.5 million, or
29%, compared to $12.2 million in 2012Q3. Adjusted noninterest expenses, which
exclude merger-related expenses ($167,000 in 2013Q3, $822,000 in 2013Q2 and
$1.4 million in 2012Q3), decreased $459,000, or 3%, in 2013Q3 to $15.5 million
compared to $16.0 million in 2013Q2, and increased $4.7 million, or 44%,
compared to $10.8 million in 2012Q3. The decrease in adjusted noninterest
expenses during the current period from 2013Q2 included reductions in most
expense categories, including salaries and employee benefits, occupancy and
equipment, data processing and service fees, legal and professional fees,
postage and supplies and loan and collection expenses. The only material
increase occurred in the net cost of operation of OREO, which totaled
$142,000, compared to a net recovery of $36,000 in 2013Q2. The increase in
adjusted noninterest expense, compared to 2012Q3 resulted primarily from the
merger with Citizens South.

Balance Sheet

Total assets decreased $33.0 million, or 2%, at 2013Q3 to $1.94 billion
compared to total assets at 2013Q2 of $1.97 billion. Cash and equivalents
decreased $60.0 million, or 53%, to $52.7 million. Approximately $26.2 million
of the proceeds were redeployed into securities, which increased 8% to $361.8
million from $335.6 million in the prior quarter. An additional $11.7 million
was redeployed into loans, excluding loans held for sale, which increased 1%
to $1.32 billion from $1.30 billion in the prior quarter. As previously
discussed, an additional $20.5 million was used to fully redeem the company's
Series C Preferred Stock, which contributed to the net reduction in the
balance sheet.Other material changes during the quarter included loans held
for sale, which decreased $7.9 million, or 72%, to $3.1 million due to the
contraction in mortgage banking activities, interest-bearing deposits, which
decreased $34.0 million, or 3%, to $1.29 billion, as the company allowed
higher-cost deposits to roll out of the bank, and total borrowings, which
increased $20.6 million, or 26%, to $99.6 million, and provided a lower cost
alternative to the aforementioned deposits. 

As discussed above, total loans, excluding loans held for sale, increased
$11.6 million, or 1%, to $1.32 billion in 2013Q3. In terms of geographic mix,
the company's metropolitan markets, which include Charlotte, Raleigh and
Wilmington, North Carolina and Greenville and Charleston, South Carolina,
reported a $26.7 million, or 19% annualized, increase in total loans to $571.7
million due to successful origination efforts. The community markets reported
a $20.4 million, or 18% annualized, decrease in total loans to $426.3 million,
primarily due to expected runoff in acquired loans. The company's central
business units, which include mortgage, builder finance, asset-based lending,
special assets and net acquisition accounting fair market value adjustments,
reported a $5.3 million, or 2%, increase in total loans to $318.4 million,
primarily due to growth in builder finance.

The company's loan mix did not shift materially during the second quarter.
Total consumer loans decreased from 31% to 30% of total loans at 2013Q3, with
residential mortgages and home equity lines of credit at 13% and 11% of total,
respectively. The combination of commercial and industrial and owner-occupied
real estate loans remained the largest category at 31% of total loans.
Investor owned commercial real estate remained at 28% of total loans.
Acquisition, construction and development (A,C&D) loans increased slightly to
11% of total loans compared to 10% at 2013Q2. The increase in A,C&D was driven
primarily by the origination of 1-4 family construction loans in the company's
builder finance group, as well as the origination of commercial construction
loans in the company's metro markets. Residential development lending (lots
and land), which led to material charge-offs in 2010 and 2011, is no longer a
focus area for the company.

In terms of accounting designations, compared to 2013Q2, PCI loans decreased
$16.8 million, or 8%, to $184.8 million in 2013Q3, acquired performing loans
decreased $60.0 million, or 12%, to $433.7 million, and non-acquired loans
increased $88.5 million, or 15%, to $697.9 million. Non-acquired loans include
certain renewed and/or restructured acquired performing loans that are
redesignated as non-acquired. Acquired performing loans include a remaining
$5.3 million net acquisition accounting fair market value adjustment,
representing a 1.21% "mark," non-covered PCI loans include a remaining $22.2
million net acquisition accounting fair market value adjustment, representing
a 16.53% "mark," and covered PCI loans include a remaining $13.9 million net
acquisition accounting fair market value adjustment, representing a 15.61%
"mark."

Total deposits decreased $37.1 million, or 2%, to $1.56 billion at 2013Q3,
compared to $1.59 billion at 2013Q2. Noninterest bearing demand deposits
decreased $3.1 million, or 1%, to $262.1 million (17% of total deposits).
Money market, NOW and savings deposits decreased $14.6 million, or 2%, to
$729.2 million (47% of total deposits). Local time deposits decreased $17.5
million, or 4%, to $424.9 million (27% of total deposits). Finally, brokered
deposits decreased $1.8 million, or 2%, to $96.6 million (6% of total
deposits) as management elected not to renew certain maturing
certificates.Core deposits, which exclude time deposits greater than $250,000
and brokered deposits, represented 91% of total deposits at 2013Q3.

Total borrowings increased $20.6 million, or 26%, to $99.6 million at 2013Q3
compared to $79.0 million at 2013Q2, as the company swapped higher cost
deposits for lower cost short-term borrowings late in the quarter. Borrowings
at 2013Q3 included $75.0 million in FHLB borrowings, $15.0 million of acquired
trust preferred securities, net of acquisition accounting fair market value
adjustments, and $6.9 million of Tier 2-eligible subordinated debt.

Total shareholders' equity decreased $17.3 million, or 6%, to $259.8 million
at 2013Q3 compared to $277.1 million at 2013Q2, driven by the redemption of
the company's $20.5 million of Series C Preferred Stock. The company's ratio
of tangible common equity to tangible assets increased to 11.78% at 2013Q3
from 11.40% at 2013Q2. The company's Tier 1 leverage ratio decreased to 11.11%
at 2013Q3 from 11.80% at 2013Q2. Both ratios include a $1.6 million increase
in goodwill, related to the Citizens South merger, to adjust for a decrease in
the estimated fair market value of deferred tax assets determined in
connection with the preparation and filing of the final Citizen's South tax
returns.

Asset Quality

Asset quality continued to improve in the third quarter and remains a point of
strength for the company. Nonperforming loans decreased $133,000, or 1%, to
$14.7 million at 2013Q3, or 1.11% of total loans, compared to $14.8 million at
2013Q2, or 1.13% of total loans. Nonperforming assets decreased $1.5 million,
or 5%, to $29.5 million at 2013Q3, or 1.52% of total assets, compared to $31.1
million at 2013Q2, or 1.58% of total assets. Nonperforming assets include $6.2
million of covered OREO for which the company expects 80% of losses and
associated expenses to be reimbursed under its FDIC loss share agreements.

The company reported net charge-offs of $1.8 million, or 0.57% of average
loans (annualized), in 2013Q3, compared to $274,000, or 0.08% of average loans
(annualized), in 2013Q2. The company reported adjusted net charge-offs, which
exclude net charge-offs related to PCI loans, of $816,000, or 0.25% of average
loans (annualized), in 2013Q3, compared to $297,000, or 0.09% of average loans
(annualized), in 2013Q2. The increase from 2013Q2 was driven primarily by the
charge-off of a previously impaired $958,000 commercial loan.

The allowance for loan losses was $8.7 million, or 0.66% of total loans, at
2013Q3 compared to $10.8 million, or 0.83% of total loans, at 2013Q2. Adjusted
allowance for loan losses, which includes the allowance for loan losses and
net acquisition accounting fair market value adjustments for acquired
performing and PCI loans, represented 3.80% of total loans at 2013Q3, compared
to 4.22% of total loans at 2013Q2. The decrease in allowance included (i) a
$1.3 million, or 17%, reduction in the quantitative component, due to
improving credit metrics; (ii) a $1.4 million, or 100%, reduction in the PCI
component, due to the combination of net charge-offs ($960,000) and a reversal
of previously impaired pools ($419,000); and (iii) a $525,000, or 57%,
increase in the qualitative component, to adjust for expected losses believed
by management not to be adequately reflected in historical loss rates
underlying the quantitative component.

The company introduced certain enhancements to the quantitative component of
its allowance methodology in 2013Q3. The new methodology segregates A,C&D
exposures into three collateral types: (i) commercial real estate
construction, (ii) 1-4 family construction and (iii) development (lots and
land). Management believes these enhancements both strengthen the granularity
of our allowance methodology and better align with the company's present
origination activities, which are focused on construction rather than
development activities. The new methodology also increases the qualitative
factors applied against commercial real estate loans and residential mortgage
loans to adjust for inherent risks that, in management's judgment, are not
adequately reflected in historical loss rates. These enhancements to the
company's methodology had the effect of decreasing the relative contribution
of the quantitative component and increasing the relative contribution of the
qualitative component to the total estimated allowance, but did not have a
material impact on the total estimated allowance at 2013Q3, compared to
estimates that would have been produced under the previous methodology.


During the first quarter of 2011, and as contemplated in Park Sterling's 2010
equity offering, 568,260 shares of restricted stock were issued but will not
vest until the company's share price achieves certain performance thresholds
above the equity offering price (these restricted stock awards, of which
554,400 remained outstanding at 2013Q2, vest one-third each when the share
price reaches, for 30 consecutive days, $8.125, $9.10 and $10.40 per share,
respectively). These performance thresholds have not yet been achieved.
Accordingly, these additional shares have been excluded from earnings and
tangible book value per share calculations.As of September 30, 2013, 13,860
of these restricted shares had been forfeited.

Conference Call

A conference call will be held at 8:30 a.m., Eastern Time this morning
(October 25, 2013).The conference call can be accessed by dialing (888)
317-6016 and requesting the Park Sterling Corporation earnings call.Listeners
should dial in 10 minutes prior to the start of the call. The live webcast and
presentation slides will be available on www.parksterlingbank.com under
Investor Relations, "Investor Presentations."

A replay of the webcast will be available on www.parksterlingbank.com under
Investor Relations, "Investor Presentations" shortly following the call.A
replay of the conference call can be accessed approximately one hour after the
call by dialing (877) 344-7529 and requesting conference number 10034887.

About Park Sterling Corporation

Park Sterling Corporation, the holding company for Park Sterling Bank, is
headquartered in Charlotte, North Carolina.Park Sterling, a regional
community-focused financial services company with approximately $2 billion in
assets, is the largest community bank headquartered in the Charlotte area and
has 43 banking offices stretching across the Carolinas and into North Georgia.
The bank serves professionals, individuals, and small and mid-sized businesses
by offering a full array of financial services, including deposit, mortgage
brokerage, cash management, consumer and business finance, and wealth
management services. Park Sterling prides itself on being large enough to help
customers achieve their financial aspirations, yet small enough to care that
they do. Park Sterling is focused on building a banking franchise that is
noted for sound risk management, strong community focus and exceptional
customer service. For more information, visit www.parksterlingbank.com. Park
Sterling Corporation shares are traded on NASDAQ under the symbol PSTB.

Non-GAAP Financial Measures

Tangible assets, tangible common equity, tangible book value, adjusted net
income available to common shareholders, adjusted net interest margin,
adjusted noninterest income, adjusted noninterest expenses, adjusted allowance
for loan losses, adjusted net charge-offs/ recoveries, and related ratios and
per share measures, including adjusted return on average assets, as used
throughout this release, are non-GAAP financial measures. For additional
information, see "Reconciliation of Non-GAAP Financial Measures" in the
accompanying tables.

Cautionary Statement Regarding Forward Looking Statements

This news release contains, and Park Sterling and its management may make,
certain statements that constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements can be identified by the fact that they do not relate strictly to
historical or current facts and often use words such as "may," "plan,"
"contemplate," "anticipate," "believe," "intend," "continue," "expect,"
"project," "predict," "estimate," "could," "should," "would," "will," "goal,"
"target" and similar expressions. Park Sterling cautions you that a number of
important factors could cause actual results to differ materially from those
currently anticipated in any forward-looking statement. Such factors include,
but are not limited to: failure to realize synergies and other financial
benefits from the Citizens South merger within the expected time frames;
increases in expected costs or decreases in expected savings or difficulties
related to integration of the merger; inability to identify and successfully
negotiate and complete additional combinations with potential merger partners
or to successfully integrate such businesses into Park Sterling, including the
company's ability to adequately estimate or to realize the benefits and cost
savings from and limit any unexpected liabilities acquired as a result of any
such business combination; failure to effectively redeploy resources from
custody business to the core asset management business; the effects of
negative or soft economic conditions or a "double dip" recession, including
stress in the commercial real estate markets or delay or failure of recovery
in the residential real estate markets; changes in consumer and investor
confidence and the related impact on financial markets and institutions;
changes in interest rates; failure of assumptions underlying the establishment
of allowances for loan losses; deterioration in the credit quality of the loan
portfolio or in the value of the collateral securing those loans;
deterioration in the value of securities held in the investment securities
portfolio; the impacts on the company of a potential increasing rate
environment; the potential impacts of any additional government shutdown and
further debt ceiling impasse, including the risk of a U.S. credit rating
downgrade or default which could cause disruptions in the financial markets,
impact interest rates, and cause other potential unforeseen consequences;
fluctuations in the market price of the common stock,regulatory, legal and
contractual requirements, other uses of capital, the company's financial
performance, market conditions generally, and future actions by the board of
directors, in each case impacting repurchases of common stock or declaration
of dividends; legal and regulatory developments, including changes in the
federal risk-based capital rules; increased competition from both banks and
nonbanks; changes in accounting standards, rules and interpretations,
inaccurate estimates or assumptions in accounting, including acquisition
accounting fair market value assumptions and accounting for purchased
credit-impaired loans, and the impact on Park Sterling's financial statements;
and management's ability to effectively manage credit risk, market risk,
operational risk, legal risk, and regulatory and compliance risk.

Forward-looking statements speak only as of the date they are made, and Park
Sterling undertakes no obligation to update any forward-looking statement to
reflect the impact of circumstances or events that arise after the date the
forward-looking statement was made.

PARK STERLING CORPORATION
CONDENSED CONSOLIDATED INCOME STATEMENT
THREE MONTH RESULTS
($ in thousands,  September                          December   September
except per share   30,        June 30,  March 31, 31,        30,
amounts)
                  2013        2013        2013        2012        2012
                  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Interest income                                              
Loans, including  $17,970   $18,805   $18,140   $20,269   $10,346
fees
Taxable
investment         1,494      1,068      866        792        826
securities
Tax-exempt
investment         187        195        190        191        187
securities
Nonmarketable     37         25         48         80         22
equity securities
Interest on       48         44         62         79         34
deposits at banks
Federal funds     --        7          17         11         16
sold
Total interest    19,736     20,144     19,323     21,422     11,431
income
Interest expense                                             
Money market, NOW
and savings        399        379        407        491        339
deposits
Time deposits    455        527        608        777        632
Short-term        --         1          6          7          --
borrowings
FHLB advances    138        137        137        143        149
Subordinated      430        429        429        472        340
debt
Total interest    1,422      1,473      1,587      1,890      1,460
expense
Net interest      18,314     18,671     17,736     19,532     9,971
income
Provision for     (419)      75         309        994        7
loan losses
Net interest
income after       18,733     18,596     17,427     18,538     9,964
provision
Noninterest                                                   
income
Service charges
on deposit         637        616        764        879        324
accounts
Mortgage banking  401        977        968        815        662
income
Income from
wealth management  910        731        708        693        665
activities
ATM and card      639        692        488        448        174
income
Income from
bank-owned life    537        528        381        450        294
insurance
Gain on sale of
securities         --         104        --         --         989
available for
sale
Other noninterest 133        320        149        307        177
income
Total noninterest 3,257      3,968      3,458      3,592      3,285
income
Noninterest                                                   
expenses
Salaries and      8,606      8,800      8,778      11,041     6,314
employee benefits
Occupancy and     1,861      1,980      1,908      1,942      928
equipment
Data processing
and outside        1,268      1,640      1,653      1,599      784
service fees
Legal and         732        861        893        1,077      1,181
professional fees
Deposit charges
and FDIC           372        409        487        473        261
insurance
Communication     432        448        432        319        198
fees
Postage and       188        298        329        360        112
supplies
Loan and
collection         556        679        326        248        434
expense
Core deposit
intangible         257        257        257        257        102
amortization
Advertising and   186        150        220        367        144
promotion
Net cost of
operation of other 142        (36)       (428)      1,167      964
real estate owned
Other noninterest 1,070      1,298      1,066      1,187      748
expense
Total noninterest 15,670     16,784     15,921     20,037     12,170
expenses
Income before     6,320      5,780      4,964      2,093      1,079
income taxes
Income tax        2,106      1,968      1,724      771        459
expense
Net income       4,214      3,812      3,240      1,322      620
Preferred         --         302        51         51         --
dividends
Net income
available to       $4,214    $3,510    $3,189    $1,271    $620
common shares
                                                              
Earnings per
common share,      $0.10     $0.08     $0.07     $0.03     $0.02
fully diluted
Weighted average
diluted common     44,273,821 44,204,581 44,069,053 44,025,874 32,138,554
shares


PARK STERLING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands)   September    June30,    March 31,   December    September
                     30,                                      31,         30,
                    2013          2013          2013          2012*        2012
                    (Unaudited) (Unaudited) (Unaudited)             (Unaudited)
ASSETS                                                                
Cash and due from   $11,780     $11,746     $19,249     $36,716    $47,115
banks
Interest-earning    40,222       100,469      51,861       101,431     37,256
balances at banks
Investment
securities available 328,396      329,720      299,073      245,571     186,802
for sale
Investment
securities held to   26,636       --           --           --          --
maturity
Nonmarketable       6,805        5,905        5,913        7,422       4,599
equity securities
Federal funds sold 695          495          51,155       45,995      22,165
Loans held for      3,070        10,985       11,659       14,147      6,095
sale
Loans -             1,240,307    1,219,513    1,237,813    1,255,019   708,283
Non-covered
Loans - Covered    76,035       85,146       91,936       101,688     --
Allowance for loan  (8,652)      (10,847)     (10,749)     (10,591)    (9,207)
losses
Net loans          1,307,690    1,293,812    1,319,000    1,346,116   699,076
                                                                       
Premises and        56,670       56,929       57,596       57,222      26,729
equipment, net
FDIC receivable for
loss share           13,959       14,848       15,340       18,697      --
agreements
Other real estate   8,708        9,741        13,597       18,427      13,028
owned - non-covered
Other real estate   6,173        6,542        7,654        6,646       --
owned - covered
Bank-owned life     47,485       47,019       46,546       46,133      26,945
insurance
Deferred tax asset 38,528       40,595       39,140       40,926      29,087
Goodwill           26,589       26,589       26,589       26,589      622
Core deposit        8,886        9,143        9,401        9,658       3,715
intangible
Other assets       7,768        8,554        9,967        11,267      6,954
                                                                       
Total assets       $1,940,060  $1,973,092  $1,983,740  $2,032,963 $1,110,188
                                                                       
LIABILITIES AND SHAREHOLDERS'                                           
EQUITY
                                                                       
Deposits:                                                             
Demand              $262,114    $265,246    $256,931    $243,495   $165,899
noninterest-bearing
Money market, NOW   729,209      743,791      733,493      758,763     341,788
and savings
Time deposits      564,640      584,068      604,397      629,746     323,988
Total deposits     1,555,963    1,593,105    1,594,821    1,632,004   831,675
                                                                       
Short-term          2,702        2,176        10,368       10,143      1,135
borrowings
FHLB advances      75,000       55,000       55,000       70,000      55,000
Subordinated debt  21,932       21,812       21,692       21,573      12,592
Accrued expenses
and other            24,710       23,942       22,874       23,541      13,982
liabilities
Total liabilities  1,680,307    1,696,035    1,704,755    1,757,261   914,384
                                                                       
Shareholders'                                                          
equity:
Preferred stock    --           20,500       20,500       20,500      --
Common stock       44,761       44,701       44,648       44,576      32,707
Additional paid-in  222,559      221,935      221,450      220,996     173,826
capital
Accumulated         (3,549)      (6,869)      (10,379)     (13,568)    (14,839)
deficit
Accumulated other
comprehensive        (4,018)      (3,210)      2,766        3,198       4,110
income
Total shareholders' 259,753      277,057      278,985      275,702     195,804
equity
                                                                       
Total liabilities
and shareholders'    $1,940,060  $1,973,092  $1,983,740  $2,032,963 $1,110,188
equity
                                                                       
Common shares
issued and           44,761,384   44,700,805   44,648,165   44,575,853  32,706,627
outstanding
                                                                       
* Derived from audited financial statements. Revised to reflect measurement period
adjustments to goodwill.


PARK STERLING CORPORATION
SUMMARY OF LOAN PORTFOLIO
($ in thousands)
              September    June 30,     March 31,    December 31, September
               30,                                                 30,
              2013         2013         2013         2012*        2012
BY LOAN TYPE   (Unaudited)  (Unaudited)  (Unaudited)              (Unaudited)
Commercial:                                                    
Commercial and $131,523   $124,773   $118,796   $119,132   $70,155
industrial
Commercial
real estate -  273,340     274,043     285,353     299,417     161,360
owner-occupied
Commercial
real estate -
investor       371,903     368,556     367,434     371,956     206,808
income
producing
Acquisition,
construction   142,784     129,154     140,869     140,661     81,027
and
development
Other          3,941       3,521       4,894       5,628       13,059
commercial
Total
commercial     923,491     900,047     917,346     936,794     532,409
loans
                                                              
Consumer:                                                      
Residential    174,780     180,195     180,368     188,532     58,062
mortgage
Home equity
lines of       146,484     148,686     156,802     163,625     82,690
credit
Residential    46,499      52,669      55,205      52,811      25,872
construction
Other loans to 24,725      22,896      20,237      15,554      9,839
individuals
Total consumer 392,488     404,446     412,612     420,522     176,463
loans
Total loans    1,315,979   1,304,493   1,329,958   1,357,316   708,872
Deferred costs 363         166         (209)       (609)       (589)
(fees)
Total loans,
net of         $1,316,342 $1,304,659 $1,329,749 $1,356,707 $708,283
deferred costs
(fees)
                                                              
*Derived from
audited                                                        
financial
statements.
                                                              
              September    June 30,     March 31,    December 31, September
               30,                                                 30,
              2013         2013         2013         2012         2012
BY ACQUIRED
AND            (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)
NON-ACQUIRED
Acquired loans $433,695   $493,660   $556,135   $614,518   $246,267
- performing
Acquired loans
- purchase     184,762     201,585     215,968     234,282     42,823
credit
impaired
Total acquired 618,457     695,245     772,103     848,800     289,090
loans
Non-acquired
loans, net of  697,885     609,414     557,646     507,907     419,193
deferred costs
(fees)**
Total loans    $1,316,342 $1,304,659 $1,329,749 $1,356,707 $708,283
                                                              
** Includes loans transferred from acquired pools following release of
acquisition accounting FMV adjustments.


PARK STERLING CORPORATION
ALLOWANCE FOR LOAN LOSSES
THREE MONTH RESULTS
($ in thousands)  September   June 30,    March 31,   December 31, September
                  30,                                              30,
                 2013        2013        2013        2012         2012
                 (Unaudited) (Unaudited) (Unaudited) (Unaudited)  (Unaudited)
Beginning of      $10,847   $10,749   $10,591   $9,207     $9,431
period allowance
Loans charged-off (1,917)    (1,133)    (782)      (330)       (1,102)
Recoveries of     141        859        631        720         871
loans charged-off
Net charge-offs   (1,776)    (274)      (151)      390         (231)
                                                              
Provision expense (419)      372        309        994         7
Benefit
attributable to   --         (297)      --         --          --
FDIC loss share
agreements
Total provision
expense charged   (419)      75         309        994         7
to operations
Provision expense
recorded through  --         297        --         --          --
FDIC loss share
receivable
End of period     $8,652    $10,847   $10,749   $10,591    $9,207
allowance
                                                              
Net charge-offs   $1,776    $274      $151      $(390)     $231
(recoveries)
Net charge-offs
(recoveries) to   0.57%       0.08%       0.05%       -0.11%       0.13%
average loans
(annualized)


PARK STERLING CORPORATION
AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS
THREE MONTHS
($ in thousands)    September                   September             
                    30, 2013                      30, 2012
                   Average      Income/   Yield/ Average      Income/   Yield/
                   Balance      Expense   Rate   Balance      Expense   Rate
                                           (3)                           (3)
Assets                                                              
Interest-earning                                                    
assets:
Loans and loans
held for sale, net  $1,319,026 $17,970 5.41%  $719,397   $10,346 5.72%
(1)(2)
Fed funds sold      532         --       0.00%  26,374      16       0.24%
Taxable investment  327,224     1,494    1.83%  197,127     826      1.68%
securities
Tax-exempt
investment          16,592      187      4.51%  17,774      187      4.21%
securities
Other
interest-earning    84,512      85       0.40%  37,997      56       0.59%
assets
                                                                   
Total
interest-earning    1,747,886   19,736   4.48%  998,669     11,431   4.55%
assets
                                                                   
Allowance for loan  (10,295)                   (9,586)              
losses
Cash and due from   12,730                     17,902               
banks
Premises and        56,842                     24,986               
equipment
Goodwill            24,743                     622                  
Intangible assets   8,973                      3,750                
Other assets        127,025                    76,580               
                                                                   
Total assets        $1,967,904                $1,112,923          
                                                                   
Liabilities and
shareholders'                                                       
equity
Interest-bearing                                                    
liabilities:
Interest-bearing    $287,096   $59     0.08%  $83,813    $62     0.29%
demand
Savings and money   463,309     340      0.29%  249,760     277      0.44%
market
Time deposits -     477,004     253      0.21%  199,938     269      0.54%
core
Time deposits -     97,086      202      0.83%  135,855     363      1.06%
brokered
Total
interest-bearing    1,324,495   854      0.26%  669,366     971      0.58%
deposits
Federal Home Loan   55,217      138      0.99%  55,000      149      1.08%
Bank advances
Subordinated debt   21,875      430      7.80%  12,558      340      10.77%
Other borrowings    1,382       --       0.00%  1,325       --       0.00%
Total borrowed      78,474      568      2.87%  68,883      489      2.82%
funds
                                                                   
Total
interest-bearing    1,402,969   1,422    0.40%  738,249     1,460    0.79%
liabilities
                                                                   
Net interest rate               18,314   4.08%              9,971    3.77%
spread
                                                                   
Noninterest-bearing 261,494                    165,050              
demand deposits
Other liabilities   24,304                     13,611               
Shareholders'       279,137                    196,013              
equity
                                                                   
Total liabilities
and shareholders'   $1,967,904                $1,112,923          
equity
                                                                   
Net interest margin                      4.16%                       3.97%
Net interest margin
(fully                                   4.19%                       4.01%
tax-equivalent) (4)
                                                                   
(1)Nonaccrual loans are included in the average loan balances.
(2)Interest income and yields for the three months ended September 30, 2013
and 2012 include accretion from acquisition accounting adjustments associated
with acquired loans.
(3) Yield/ rate calculated on Actual/Actual day count basis, except for yield
on investments which is calculated on a 30/360 day count basis.
(4)Fully tax-equivalent basis at 33.67% and 32.15% tax rate at September 30,
2013 and 2012, respectively, for nontaxable securities and loans.


PARK STERLING CORPORATION
SELECTED RATIOS
($ in thousands,   September                           December    September
except per share   30,         June 30,    March 31,   31,         30,
amounts)
                  2013        2013        2013        2012        2012
                  Unaudited   Unaudited   Unaudited   Unaudited   Unaudited
ASSET QUALITY                                                  
Nonaccrual loans   $6,778    $6,832    $9,725    $10,374   $9,792
Troubled debt      7,527      7,767      7,383      7,367      7,390
restructuring
Past due 90 days
plus (and still    357        196        2          77         164
accruing)
Nonperforming      14,662     14,795     17,110     17,818     17,346
loans
OREO               14,881     16,283     21,251     25,073     13,028
Nonperforming      29,543     31,078     38,361     42,891     30,374
assets
Past due 30-59
days (and still    663        2,488      1,250      607        1,040
accruing)
Past due 60-89
days (and still    459        1,606      521        121        561
accruing)
                                                              
Nonperforming
loans to total     1.11%       1.13%       1.29%       1.31%       2.45%
loans
Nonperforming
assets to total    1.52%       1.58%       1.93%       2.11%       2.74%
assets
Allowance to total 0.66%       0.83%       0.81%       0.78%       1.30%
loans
Allowance to
nonperforming      59.01%      73.32%      62.82%      59.44%      53.08%
loans
Allowance to
nonperforming      29.29%      34.90%      28.02%      24.69%      30.31%
assets
Past due 30-89
days (accruing) to 0.09%       0.31%       0.13%       0.05%       0.23%
total loans
Net charge-offs
(recoveries) to    0.57%       0.08%       0.05%       -0.11%      0.13%
average loans
(annualized)
                                                              
CAPITAL                                                        
Book value per     $5.87     $5.80     $5.87     $5.80     $6.09
common share
Tangible book
value per common   $5.07     $5.00     $5.05     $4.97     $5.96
share**
Common shares      44,761,384 44,700,805 44,648,165 44,575,853 32,706,627
outstanding
Average dilutive
common shares      44,273,821 44,204,581 44,069,053 44,025,874 32,138,554
outstanding
                                                              
Tier 1 capital     $211,121  $223,516  $221,435  $217,188  $165,345
Tier 2 capital     15,418     17,742     17,644     17,611     16,103
Total risk based   226,539    241,258    239,079    234,799    181,447
capital
Risk weighted      1,435,214  1,399,273  1,436,350  1,452,229  774,035
assets
Average assets for 1,900,990  1,894,989  1,906,061  1,947,156  1,074,410
leverage ratio
                                                              
Tier 1 ratio       14.71%      15.97%      15.42%      14.96%      21.36%
Total risk based   15.78%      17.24%      16.64%      16.17%      23.44%
capital ratio
Tier 1 leverage    11.11%      11.80%      11.62%      11.15%      15.39%
ratio
Tangible common
equity to tangible 11.78%      11.40%      11.42%      10.97%      17.31%
assets**
                                                              
LIQUIDITY                                                      
Net loans to total 84.04%      81.21%      82.71%      82.48%      84.06%
deposits
Reliance on        11.85%      10.61%      11.35%      12.27%      22.24%
wholesale funding
                                                              
INCOME STATEMENT
(THREE MONTH                                        
RESULTS;
ANNUALIZED)
Return on Average  0.85%       0.72%       0.65%       0.25%       0.22%
Assets
Return on Average  6.46%       5.38%       5.01%       1.96%       1.26%
Common Equity
Net interest
margin (non-tax    0.00%       4.30%       4.15%       4.36%       3.97%
equivalent)
                                                              
INCOME STATEMENT                                               
(ANNUAL RESULTS)
Return on Average  n/a         n/a         n/a         0.32%       n/a
Assets
Return on Average  n/a         n/a         n/a         1.99%       n/a
Equity
Net interest
margin (non-tax    n/a         n/a         n/a         4.27%       n/a
equivalent)
                                                              
** Non-GAAP                                                    
financialmeasure

Non-GAAP Financial Measures

Tangible assets, tangible common equity, tangible book value, adjusted net
income available to common shareholders, adjusted net interest margin,
adjusted noninterest income, adjusted noninterest expenses, adjusted total
revenues, adjusted allowance for loan losses, adjusted net charge-offs/
recoveries, and related ratios and per share measures, including adjusted
return on average assets and adjusted return on average equity, as used
throughout this release, are non-GAAP financial measures. Management uses (i)
tangible assets, tangible common equity and tangible book value (which exclude
goodwill and other intangibles from equity and assets), and related ratios, to
evaluate the adequacy of shareholders' equity and to facilitate comparisons
with peers; (ii) adjusted allowance for loan losses (which includes net FMV
adjustments related to acquired loans) and adjusted net charge-offs/
recoveries (which exclude the impact of acquisition accounting related to PCI
loans) to evaluate both its asset quality and asset quality trends, and to
facilitate comparisons with peers; and (iii) adjusted net income, adjusted
noninterest income, adjusted noninterest expenses and adjusted total revenues
(which exclude merger-related expenses and gain on sale of securities, as
applicable), adjusted net interest margin (which excludes accelerated
accretion of net acquisition accounting fair market value adjustments),
adjusted return on average assets and adjusted return on average equity (which
exclude merger-related expenses and gain on sale of securities) to evaluate
core earnings and to facilitate comparisons with peers.

PARK STERLING CORPORATION
RECONCILIATION OF NON-GAAP MEASURES
($ in thousands, except per share amounts)
(three month
and period end September                                December     September
results unless 30,          June 30,    March 31,   31,          30,
otherwise
stated)
              2013          2013          2013          2012          2012
              (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Adjusted net                                                       
income
Pretax income  $6,320      $5,780      $4,964      $2,093      $1,079
(as reported)
Plus:
merger-related 167          822          836          3,167        1,364
expenses
Less: gain on
sale of        --           (104)        --           --           (989)
securities
Adjusted       6,487        6,498        5,800        5,260        1,454
pretax income
Tax expense    2,162        2,235        1,995        1,691        467
Adjusted net   $4,325      $4,263      $3,805      $3,569      $987
income
Preferred      --           302          51           51           --
dividends
Adjusted net
income
available to   $4,325      $3,961      $3,754      $3,518      $987
common
shareholders
                                                                  
Divided by:
weighted       44,273,821   44,204,581   44,069,053   44,025,874   32,138,554
average
diluted shares
Adjusted net
income
available to   $0.10       $0.09       $0.09       $0.08       $0.03
common
shareholders
per share
Estimated tax  33.40%        34.40%        34.40%        32.15%        32.15%
rate
                                                                  
Adjusted net
interest                                                           
margin
Net interest
income (as     $18,314     $18,671     $17,736     $19,532     $9,971
reported)
Less:
accelerated    (529)        (560)        --           (921)        17
mark accretion
Less: other
accelerated    --           --           --           (121)        --
accretion
Adjusted net
interest       17,785       18,111       17,736       18,490       9,988
income
Divided by:
average        1,747,886    1,742,312    1,732,366    1,782,922    998,669
earning assets
Mutliplied by:
annualization  3.97         4.01         4.06         3.98         3.98
factor
Adjusted net
interest       4.04%         4.17%         4.15%         4.13%         3.98%
margin
Net interest   4.16%         4.30%         4.15%         4.36%         3.97%
margin
                                                                  
Adjusted
noninterest                                                        
income
Noninterest
income (as     $3,257      $3,968      $3,458      $3,592      $3,285
reported)
Less: gain on
sale of        --           (104)        --           --           (989)
securities
Adjusted
noninterest    $3,257      $3,864      $3,458      $3,592      $2,296
income
                                                                  
Adjusted
noninterest                                                        
expense
Noninterest
expense (as    $15,670     $16,784     $15,921     $20,037     $12,170
reported)
Less:
merger-related (167)        (822)        (836)        (3,167)      (1,364)
expenses
Adjusted
noninterest    15,503       15,962       15,085       16,870       10,806
expense
                                                                  
Adjusted total                                                     
revenues
Net interest
income (as     $18,314     $18,671     $17,736     $19,532     $9,971
reported)
Adjusted
noninterest    3,257        3,864        3,458        3,592        2,296
income
Adjusted total $21,571     $22,535     $21,194     $23,124     $12,267
revenues
                                                                  
Adjusted
return on                                                          
average
assets
Adjusted net
income
available to   $4,325      $3,961      $3,754      $3,518      $987
common
shareholders
Divided by:    1,967,904    1,967,736    1,978,144    2,020,662    1,112,923
average assets
Mutliplied by:
annualization  3.97         4.01         4.06         3.98         3.98
factor
Adjusted
return on      0.87%         0.81%         0.77%         0.69%         0.35%
average assets
Return on      0.85%         0.72%         0.65%         0.25%         0.22%
average assets
                                                                  
                                                                  
                                                                  
PARK STERLING CORPORATION
RECONCILIATION OF NON-GAAP MEASURES
($ in thousands, except per share amounts)
(three month
and period end September                                December     September
results unless 30,          June 30,    March 31,   31,          30,
otherwise
stated)
              2013          2013          2013          2012          2012
              (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Adjusted
return on                                                          
average
equity
Adjusted net
income
available to   $4,325      $3,961      $3,754      $3,518      $987
common
shareholders
Divided by:
average common 258,860      261,511      258,234      257,335      196,013
equity
Mutliplied by:
annualization  3.97         4.01         4.06         3.98         3.98
factor
Adjusted
return on      6.63%         6.07%         5.90%         5.44%         2.00%
average equity
Return on      6.46%         5.38%         5.01%         1.96%         1.26%
average equity
                                                                  
Tangible
common equity                                                      
to tangible
assets
Total assets   $1,940,060  $1,973,092  $1,983,740  $2,032,963  $1,110,188
Less:
intangible     (35,475)     (35,732)     (35,990)     (36,247)     (4,337)
assets
Tangible       $1,904,585  $1,937,360  $1,947,750  $1,996,716  $1,105,851
assets
                                                                  
Total common   $259,753    $256,557    $258,485    $255,202    $195,804
equity
Less:
intangible     (35,475)     (35,732)     (35,990)     (36,247)     (4,337)
assets
Tangible       $224,278    $220,825    $222,495    $218,955    $191,467
common equity
                                                                  
Tangible       $224,278    $220,825    $222,495    $218,955    $191,467
common equity
Divided by:
tangible       $1,904,585  $1,937,360  $1,947,750  $1,996,716  $1,105,851
assets
Tangible
common equity  11.78%        11.40%        11.42%        10.97%        17.31%
to tangible
assets
Common equity  13.39%        13.00%        13.03%        12.55%        17.64%
to assets
                                                                  
Tangible book
value per                                                          
share
Issued and
outstanding    44,761,384   44,700,805   44,648,165   44,575,853   32,706,627
shares
Less:
nondilutive    (554,400)    (554,400)    (568,260)    (568,260)    (568,260)
restricted
stock awards
Period end
dilutive       44,206,984   44,146,405   44,079,905   44,007,593   32,138,367
shares
                                                                  
Tangible       $224,278    $220,825    $222,495    $218,955    $191,467
common equity
Divided by:
period end     44,206,984   44,146,405   44,079,905   44,007,593   32,138,367
dilutive
shares
Tangible
common book    $5.07       $5.00       $5.05       $4.98       $5.96
value per
share
Common book
value per      $5.88       $5.81       $5.86       $5.80       $6.09
share
                                                                  
Adjusted
allowance for                                                      
loan losses
Allowance for  $8,652      $10,847     $10,749     $10,591     $9,207
loan losses
Plus:
acquisition
accounting FMV 41,389       44,179       49,633       53,719       21,512
adjustments to
acquired loans
Adjusted
allowance for  $50,041     $55,026     $60,382     $64,310     $30,719
loan losses
Divided by:
total loans    $1,316,342  $1,304,659  $1,329,749  $1,356,707  $708,283
(excluding
LHFS)
Adjusted
allowance for  3.80%         4.22%         4.54%         4.74%         4.34%
loan losses to
total loans
Allowance for
loan losses to 0.66%         0.83%         0.81%         0.78%         1.30%
total loans
                                                                  
Adjusted net
charge-offs                                                        
(recoveries)
(annualized)
Net
charge-offs    $1,776      $274        $151        $(390)      $231
(recoveries)
Less: net
charge-offs
(recoveries)   (960)        23           (414)        --           --
of PCI loans
(ASC 310-30)
Adjusted net
charge-offs    $816        $297        $(263)      $(390)      $231
(recoveries)
Divided by:    $1,319,026  $1,337,318  $1,346,603  $1,388,627  $719,397
average loans
Mutliplied by:
annualization  3.97         4.01         4.06         3.98         3.98
factor
Adjusted net
charge-offs    0.25%         0.09%         -0.08%        -0.11%        0.13%
(recoveries)
(annualized)
Net
charge-offs    0.57%         0.08%         0.05%         -0.11%        0.13%
(recoveries)
(annualized)

CONTACT: For additional information contact:
         David Gaines
         Chief Financial Officer
         (704) 716-2134
         david.gaines@parksterlingbank.com
 
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