FIRST BANCORP /NC/ - FORM 8-K - EX-99.1 - EXHIBIT 99.1

Attached files

file	filename
8-K - FORM 8K - FIRST BANCORP /NC/	form8k-112053_fbnc.htm

News Release

For Immediate Release:	For More Information,
February 3, 2011	Contact: Jerry L. Ocheltree
	910-576-6171

First Bancorp Reports

Fourth Quarter and Annual Earnings

TROY, N.C. – First Bancorp (NASDAQ - FBNC), the parent company of First Bank, announced today a net loss available to common shareholders of $3.3 million, or ($0.19) per diluted common share, for the three months ended December 31, 2010 compared to net income available to common shareholders of $4.3 million, or $0.25 per diluted common share, for the same period in 2009. The net loss reported for the fourth quarter of 2010 was primarily caused by write-downs of foreclosed properties that were assumed in the Company’s 2009 acquisition of a failed bank. Earnings were also impacted by higher provisions for loan losses related both to loans acquired in the 2009 failed bank acquisition and to legacy loans.

For the year ended December 31, 2010, the Company reported net income available to common shareholders of $5.9 million, or $0.35 per diluted common share, compared to $56.3 million, or $3.37 per diluted common share, for the year ended December 31, 2009. The annual 2009 results were impacted by a failed bank acquisition gain recorded in the second quarter of 2009 that amounted to $41.1 million, or $2.46 per diluted common share, on an after-tax basis.

Note Regarding Components of Earnings

The comparability of the Company’s results of operation for the three and twelve months ended December 31, 2010 is significantly affected by the accounting for the FDIC-assisted failed bank acquisition completed in 2009. In the discussion below, the term “covered” is used to describe assets included as part of FDIC loss share agreements, which generally result in the FDIC reimbursing the Company for 80% of losses incurred.

As noted above, a bargain purchase gain increased income in 2009. Additionally, post-acquisition accounting adjustments have significantly impacted income statement line items, particularly in the fourth quarter of 2010. For covered loans that deteriorate in terms of repayment expectations, the Company records immediate allowances through the provision for loan losses. For covered loans that experience favorable changes in credit quality compared to what was expected at the acquisition date, the Company records positive adjustments to interest income over the life of the respective loan. For foreclosed properties that are sold at gains or losses or that are written down to lower values, the Company records the gains/losses within noninterest income.

The adjustments discussed above are recorded within the income statement line items noted without consideration of the FDIC loss share agreements. Because favorable changes in covered assets result in lower expected FDIC claims, and unfavorable changes in covered assets result in higher expected FDIC claims, the FDIC indemnification asset is adjusted to reflect those expectations. The net increase or decrease in the indemnification asset is reflected within noninterest income.

The adjustments noted above can result in volatility within individual income statement line items. Because of the FDIC loss-share agreements and the associated indemnification asset, pretax income resulting from amounts recorded as provisions for loan losses, interest income, and losses from foreclosed properties is generally only impacted by 20% due to the corresponding adjustments made to the indemnification asset.

Net Interest Income and Net Interest Margin

Net interest income for the fourth quarter of 2010 amounted to $33.6 million, an 8.2% increase over the fourth quarter of 2009. This increase was due to a higher net interest margin, which was partially offset by a lower level of earning assets.

Net interest income for the year ended December 31, 2010 amounted to $127.4 million, an 18.9% increase from 2009. This increase was due to a higher net interest margin, as well as balance sheet growth realized from the June 2009 acquisition of a failed bank.

The Company’s net interest margin (tax-equivalent net interest income divided by average earnings assets) in the fourth quarter of 2010 was 4.79%, an 87 basis point increase from the 3.92% margin realized in the fourth quarter of 2009. For the year ended December 31, 2010, the net interest margin was 4.39%, a 58 basis point increase compared to 3.81% for 2009. Throughout 2010, the Company was able to lower rates on maturing time deposits that were originated in periods of higher interest rates. Also, the Company has experienced declines in higher cost deposit accounts.

Also positively impacting net interest income during each period were purchase accounting adjustments, primarily related to the Company’s failed bank acquisition in 2009, including adjustments to loan interest income previously discussed. See page 5 of the Financial Summary for a table that presents the impact of all purchase accounting adjustments.

Provision for Loan Losses and Asset Quality

The Company’s provision for loan losses amounted to $30.5 million in the fourth quarter of 2010 compared to $6.6 million in the fourth quarter of 2009. The provision for loan losses for the year ended December 31, 2010 was $54.6 million compared to $20.2 million recorded in 2009.

For the fourth quarter and year ended December 31, 2010, the Company recorded $20.9 million in provision for loan losses related to covered loans that experienced credit quality deterioration. The credit quality deterioration primarily related to collateral dependent loans for which the Company received updated appraisals during the fourth quarter of 2010 that reflected lower valuations. As discussed earlier, this expense was offset by an 80% increase to the FDIC indemnification asset which increased noninterest income.

The provision for loan losses related to non-covered loans was $9.6 million for the fourth quarter of 2010, compared to $8.4 million in the third quarter of 2010 and $6.6 million in the fourth quarter of 2009. The provision for loan losses for non-covered loans for the year ended December 31, 2010 was $33.6 million compared to $20.2 million recorded in 2009. The higher provisions for loan losses were necessary primarily as a result of higher levels of classified and nonperforming assets and the impact of declining real estate values on the Company’s collateral dependent real estate loans.

Net charge-offs for the three and twelve months ended December 31, 2010 were $26.1 million and $42.5 million, respectively, compared to $3.7 million and $12.1 million for the corresponding periods in 2009. Net charge-offs for the 2010 periods were impacted by $9.8 million in charge-offs of covered loans that were recorded in the fourth quarter of 2010. In addition, during the fourth quarter of 2010, the Company recorded partial charge-offs of non-covered loans amounting to $8.6 million. Previously, the Company recorded specific reserves on collateral deficient nonaccrual loans within the allowance for loan losses, but did not record charge-offs until the loans had been foreclosed upon.

The Company’s non-covered nonperforming assets amounted to $117 million at December 31, 2010, compared to $118 million at September 30, 2010, and $92 million at December 31, 2009. At December 31, 2010, the ratio of non-covered nonperforming assets to total non-covered assets was 4.16%, compared to 4.16% at September 30, 2010, and 3.10% at December 31, 2009.

The Company’s nonperforming assets that are covered by FDIC loss share agreements amounted to $168 million at December 31, 2010, compared to $181 million at September 30, 2010, and $165 million at December 31, 2009. The Company continues to submit reimbursement claims to the FDIC on a regular basis.

Noninterest Income

Total noninterest income was $14.9 million in the fourth quarter of 2010 compared to $6.3 million for the fourth quarter of 2009. The increase in 2010 compared to the prior year was due to a $32.3 million adjustment to the FDIC indemnification asset necessary to reflect higher than expected claims resulting from deterioration in covered loans and foreclosed assets (partially offset by $22.7 million in foreclosure losses and write-downs on covered assets).

Noninterest income for the year ended December 31, 2010 amounted to $29.1 million compared to $89.5 million for 2009. The year-to-date period in 2009 includes a $67.9 million bargain purchase gain related to the June 2009 failed bank acquisition. For the year ended December 31, 2010, foreclosed property losses and write-downs amounted to $35.5 million, while indemnification asset income was $41.8 million.

During the three and twelve months ended December 31, 2010, the Company recorded $22.7 million and $34.5 million, respectively, in write-downs on covered foreclosed properties. Subsequent to the failed bank acquisition in June 2009, the Company ordered appraisals on a majority of the acquired loans and foreclosed real estate. The appraisal values indicated that the Company’s initial fair value estimates of the failed bank’s assets were too low. Accordingly, as required by applicable accounting standards, during the second half of 2009, the Company retroactively wrote these assets up to the higher appraised values and the bargain purchase gain was increased from the originally stated $54 million to $68 million. During 2010, most significantly during the fourth quarter of 2010, the Company obtained appraisals on a majority of its covered foreclosed properties, which included many of the same properties as in the prior year. The appraised values were significantly lower than the values from a year earlier. Accordingly, the Company wrote the assets down in 2010. Consistent with the other failed bank accounting adjustments discussed earlier, the bottom line impact to pretax income of these write-downs was 20% of the gross write-downs.

As of December 31, 2010, approximately 91% of the amount of covered foreclosed properties had supporting appraisal valuations that were less than 6 months old.

For the three and twelve month periods ended December 31, 2010, service charges on deposits decreased compared to the same periods in 2009, due primarily to lower insufficient funds fee charges, which declined in the second half of 2010 as result of fewer instances of customers overdrawing their accounts. This was partially a result of new regulations that took effect in the third quarter of 2010 that limit the Company’s ability to charge overdraft fees.

The line item “Other gains (losses)” was positively impacted by the fourth quarter sale of the Company’s merchant credit card processing portfolio, which resulted in a gain of $850,000.

Noninterest Expenses

Noninterest expenses amounted to $22.0 million in the fourth quarter of 2010, a 2.0% decrease from the $22.5 million recorded in the same period of 2009. Noninterest expenses for the year ended December 31, 2010 amounted to $87.0 million, a 10.7% increase from the $78.6 million recorded in 2009. The year to date increase is attributable to incremental operating expenses associated with the failed bank acquisition that occurred late in the second quarter of 2009. Included in other operating expenses for 2010 are approximately $2.6 million in costs (net of FDIC reimbursements) associated with collection activities on loans and foreclosed properties covered by FDIC loss sharing agreements, compared to $0.8 million in 2009.

Balance Sheet and Capital

Total assets at December 31, 2010 amounted to $3.3 billion, a 7.5% decrease from a year earlier. Total loans at December 31, 2010 amounted to $2.5 billion, a 7.5% decrease from a year earlier, and total deposits amounted to $2.7 billion at December 31, 2010, a 9.6% decrease from a year earlier. The contraction of the Company’s balance sheet has been primarily a result of weak loan demand, which has allowed the Company to lessen its reliance on higher cost sources of funding.

The Company continues to experience a general decline in loans, with loans decreasing $199 million, or 7.5%, since December 31, 2009. Although the Company originates and renews a significant amount of loans each month, normal paydowns of loans and loan foreclosures are exceeding new loan growth. Overall, loan demand remains weak in most of the Company’s market areas.

The Company’s deposits declined by $281 million, or 9.6%, during 2010. This decrease was primarily associated with time deposits, which are generally the highest cost source of funds for the Company. The Company also experienced a $70 million decrease in NOW accounts during 2010, primarily as a result of two depositors who withdrew their funds late in the year in anticipation of the expiration of certain provisions of the FDIC transaction account guarantee program, which provided unlimited FDIC insurance for interest-bearing transaction accounts earning interest rates of up to 0.25%. Brokered deposits remained at a low level at December 31, 2010, comprising just 5.4% of total deposits, with internet deposits comprising an additional 1.8%.

The Company remains well-capitalized by all regulatory standards with a Total Risk-Based Capital Ratio of 16.59% compared to the 10.00% minimum to be considered well-capitalized. The Company’s tangible common equity to tangible assets ratio was 6.52% at December 31, 2010, an increase of 58 basis points from a year earlier.

The Company continues to maintain $65 million in preferred stock that was issued to the US Treasury in January 2009. The Company has no immediate plans to redeem this stock. This capital is being held as insurance against an uncertain economy. Additionally, it provides support for growth opportunities, such as the Company’s recent FDIC-assisted bank acquisition (see below).

Comments of the President and Other Business Matters

Jerry L. Ocheltree, President and CEO of First Bancorp, commented on today’s report, “Considering the economic challenges faced by our market areas in 2010, I am pleased to report net income for the year of close to $6 million. Our capital remains very strong with all of our regulatory capital ratios being at least 50% higher than the well-capitalized threshold. We are beginning to see signs of economic recovery, and I am optimistic that First Bank is well-positioned to benefit from the recovery.”

Mr. Ocheltree continued, “I would also like to say how much I enjoyed meeting our new First Bank employees and customers in Asheville last week. We look forward to continuing the tradition of excellent community banking that you experienced with Bank of Asheville, and we appreciate your business.”

Mr. Ocheltree noted the following corporate developments:

On January 21, 2011, the Company announced that it had entered into a purchase and assumption agreement with the FDIC to purchase substantially all of the assets and liabilities of The Bank of Asheville. As of December 31, 2010, The Bank of Asheville operated through five branches with approximately $210 million in total assets, including $162 million in loans, and $209 million in liabilities, including $205 million in deposits. Financial information made available after the closing showed that First Bank acquired approximately $193 million in total assets, including $155 million in loans, and $196 million in liabilities, including $192 million in deposits.

·	The Company recently broke ground on the construction of a new branch facility in Shallotte, North Carolina, which will be located on Highway 130 – Whiteville Road. This new branch is expected to open in the spring, with the Company’s existing Shallotte branch being moved into this new location.

·	On December 14, 2010, the Company announced a quarterly cash dividend of $0.08 cents per share payable on January 25, 2011 to shareholders of record on December 31, 2010. This is the same dividend rate as the Company declared in the fourth quarter of 2009.

First Bancorp is a bank holding company headquartered in Troy, North Carolina with total assets of approximately $3.5 billion. Its principal activity is the ownership and operation of First Bank, a state-chartered community bank that now operates 97 branches, with 82 branches operating in North Carolina, 9 branches in South Carolina (Cheraw, Dillon, Florence, Latta, Jefferson, and Little River), and 6 branches in Virginia (Abingdon, Christiansburg, Dublin, Fort Chiswell, Radford, and Wytheville), where First Bank does business as First Bank of Virginia. First Bank also has a loan production office in Blacksburg, Virginia. First Bancorp’s common stock is traded on the NASDAQ Global Select Market under the symbol “FBNC.”

Please visit our website at www.FirstBancorp.com.

This press release contains statements that could be deemed forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, which statements are inherently subject to risks and uncertainties. Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future events or results or otherwise are not statements of historical fact. Such statements are often characterized by the use of qualifying words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” or other statements concerning opinions or judgments of the Company and its management about future events. Factors that could influence the accuracy of such forward-looking statements include, but are not limited to, the financial success or changing strategies of the Company’s customers, the Company’s level of success in integrating acquisitions, actions of government regulators, the level of market interest rates, and general economic conditions. For additional information about the factors that could affect the matters discussed in this paragraph, see the “Risk Factors” section of the Company’s most recent annual report on Form 10-K.

First Bancorp - Financial Summary

	Three Months Ended December 31,						Percent
($ in thousands except per share data - unaudited)	2010			2009			Change

INCOME STATEMENT

Interest income
Interest and fees on loans	$	38,568			40,411
Interest on investment securities		1,733			1,751
Other interest income		123			252
Total interest income		40,424			42,414			(4.7	%)
Interest expense
Interest on deposits		6,454			10,700
Other, primarily borrowings		400			681
Total interest expense		6,854			11,381			(39.8	%)
Net interest income		33,570			31,033			8.2	%
Provision for loan losses – non-covered loans		9,629			6,575			46.4	%
Provision for loan losses – covered loans		20,916			−			n/m
Total provision for loan losses		30,545			6,575			364.6	%
Net interest income after provision for loan losses		3,025			24,458			(87.6	%)
Noninterest income
Service charges on deposit accounts		3,014			3,819
Other service charges, commissions, and fees		1,340			1,342
Fees from presold mortgages		597			658
Commissions from financial product sales		389			360
Foreclosed property losses and write-downs - covered		(22,697	)		–
Foreclosed property losses and write-downs – non-covered		(876	)		–
Indemnification asset income, net		32,344			–
Securities gains (losses)		1			9
Other gains (losses)		806			67
Total noninterest income		14,918			6,255			138.5	%
Noninterest expenses
Personnel expense		11,557			11,760
Occupancy and equipment expense		2,472			3,143
Intangibles amortization		220			216
Acquisition expenses		–			261
Other operating expenses		7,759			7,078
Total noninterest expenses		22,008			22,458			(2.0	%)
Income (loss) before income taxes		(4,065	)		8,255			(149.2	%)
Income tax expense (benefit)		(1,820	)		2,987			(160.9	%)
Net income (loss)	$	(2,245	)		5,268			(142.6	%)

Preferred stock dividends and accretion		(1,027	)		(1,014	)

Net income (loss) available to common shareholders	$	(3,272	)		4,254			(176.9	%)


Earnings (loss) per common share – basic	$	(0.19	)		0.25			(176.0	%)
Earnings (loss) per common share – diluted		(0.19	)		0.25			(176.0	%)

ADDITIONAL INCOME STATEMENT INFORMATION

Net interest income, as reported	$	33,570			31,033
Tax-equivalent adjustment (1)		361			247
Net interest income, tax-equivalent	$	33,931			31,280			8.5	%

(1)

This amount reflects the tax benefit that the Company receives related to its tax-exempt loans and securities, which carry interest rates lower than similar taxable investments due to their tax-exempt status. This amount has been computed assuming a 39% tax rate and is reduced by the related nondeductible portion of interest expense.

First Bancorp - Financial Summary - Page 2

	Twelve Months Ended December 31,						Percent
($ in thousands except per share data - unaudited)	2010			2009			Change

INCOME STATEMENT

Interest income
Interest and fees on loans	$	151,292			148,007
Interest on investment securities		7,383			7,439
Other interest income		586			545
Total interest income		159,261			155,991			2.1	%
Interest expense
Interest on deposits		29,930			45,518
Other, primarily borrowings		1,977			3,377
Total interest expense		31,907			48,895			(34.7	%)
Net interest income		127,354			107,096			18.9	%
Provision for loan losses – non-covered loans		33,646			20,186			66.7	%
Provision for loan losses – covered loans		20,916			−			n/m
Total provision for loan losses		54,562			20,186			170.3	%
Net interest income after provision for loan losses		72,792			86,910			(16.2	%)
Noninterest income
Service charges on deposit accounts		13,422			13,854
Other service charges, commissions, and fees		5,420			4,987
Fees from presold mortgages		1,813			1,505
Commissions from financial product sales		1,476			1,524
Gain from acquisition		–			67,894
Foreclosed property losses and write-downs – covered		(34,527	)		–
Foreclosed property losses and write-downs – non-covered		(984	)		–
Indemnification asset income, net		41,808			–
Securities gains (losses)		26			(104	)
Other gains (losses)		652			(142	)
Total noninterest income		29,106			89,518			(67.5	%)
Noninterest expenses
Personnel expense		45,290			41,588
Occupancy and equipment expense		11,126			10,405
Intangibles amortization		874			630
Acquisition expenses		–			1,343
Other operating expenses		29,666			24,585
Total noninterest expenses		86,956			78,551			10.7	%
Income before income taxes		14,942			97,877			(84.7	%)
Income tax expense		4,960			37,618			(86.8	%)
Net income	$	9,982			60,259			(83.4	%)

Preferred stock dividends and accretion		(4,107	)		(3,972	)

Net income available to common shareholders	$	5,875			56,287			(89.6	%)


Earnings per share - basic	$	0.35			3.38			(89.6	%)
Earnings per share - diluted		0.35			3.37			(89.6	%)

ADDITIONAL INCOME STATEMENT INFORMATION
Net interest income, as reported	$	127,354			107,096
Tax-equivalent adjustment (1)		1,316			818
Net interest income, tax-equivalent	$	128,670			107,914			19.2	%

(1) See footnote 1 on page 1 of Financial Summary for discussion of tax-equivalent adjustments.

First Bancorp - Financial Summary - page 3

	Three Months Ended December 31,						Twelve Months Ended December 31,
PERFORMANCE RATIOS (annualized)	2010			2009			2010			2009
Return on average assets (1)		(0.40	%)		0.48	%		0.18	%		1.82	%
Return on average common equity (2)		(4.48	%)		6.15	%		2.05	%		22.55	%
Net interest margin – tax-equivalent (3)		4.79	%		3.92	%		4.39	%		3.81	%
Efficiency ratio – tax-equivalent (3) (4)		45.05	%		59.83	%		55.11	%		39.79	%
Net charge-offs to average loans – non-covered		3.10	%		0.69	%		1.55	%		0.56	%

COMMON SHARE DATA
Cash dividends declared – common	$	0.08			0.08		$	0.32			0.32
Stated book value – common		16.64			16.59			16.64			16.59
Tangible book value – common		12.45			12.34			12.45			12.34
Common shares outstanding at end of period		16,801,426			16,722,423			16,801,426			16,722,423
Weighted average shares outstanding – basic		16,795,482			16,685,350			16,764,879			16,648,822
Weighted average shares outstanding – diluted		16,823,089			16,723,524			16,793,650			16,686,880

CAPITAL RATIOS
Tangible equity to tangible assets		8.54	%		7.81	%		8.54	%		7.81	%
Tangible common equity to tangible assets		6.52	%		5.94	%		6.52	%		5.94	%
Tier I leverage ratio		10.28	%		9.30	%		10.28	%		9.30	%
Tier I risk-based capital ratio		15.31	%		13.88	%		15.31	%		13.88	%
Total risk-based capital ratio		16.58	%		15.14	%		16.58	%		15.14	%

AVERAGE BALANCES ($ in thousands)
Total assets	$	3,225,655			3,520,632		$	3,326,977			3,097,137
Loans		2,484,684			2,685,090			2,554,401			2,475,045
Earning assets		2,811,988			3,162,966			2,927,815			2,833,167
Deposits		2,722,162			2,913,738			2,807,161			2,549,709
Interest-bearing liabilities		2,543,070			2,859,989			2,655,195			2,497,304
Shareholders’ equity		354,715			339,321			350,908			313,173

(1) Calculated by dividing annualized net income available to common shareholders by average assets.

(2) Calculated by dividing annualized net income available to common shareholders by average common equity.

(3) See footnote 1 on page 1 of Financial Summary for discussion of tax-equivalent adjustments.

(4) Calculated by dividing noninterest expense by the sum of tax-equivalent net interest income plus noninterest income.

TREND INFORMATION

($ in thousands except per share data)	For the Three Months Ended
INCOME STATEMENT	December 31, 2010			September 30, 2010		June 30, 2010		March 31, 2010		December 31, 2009

Net interest income – tax-equivalent (1)	$	33,931			31,401		31,867		31,472		31,280
Taxable equivalent adjustment (1)		361			330		331		295		247
Net interest income		33,570			31,071		31,536		31,177		31,033
Provision for loan losses		30,545			8,391		8,003		7,623		6,575
Noninterest income		14,918			3,957		4,537		5,694		6,255
Noninterest expense		22,008			20,711		21,957		22,280		22,458
Income (loss) before income taxes		(4,065	)		5,926		6,113		6,968		8,255
Income tax expense (benefit)		(1,820	)		2,078		2,172		2,530		2,987
Net income (loss)		(2,245	)		3,848		3,941		4,438		5,268
Preferred stock dividends and accretion		1,027			1,027		1,026		1,027		1,014
Net income (loss) available to common shareholders		(3,272	)		2,821		2,915		3,411		4,254

Earnings (loss) per common share – basic		(0.19	)		0.17		0.17		0.20		0.25
Earnings (loss) per common share – diluted		(0.19	)		0.17		0.17		0.20		0.25

(1) See footnote 1 on page 1 of Financial Summary for discussion of tax-equivalent adjustments.

First Bancorp - Financial Summary – page 4

CONSOLIDATED BALANCE SHEETS ($ in thousands)	At Dec. 31, 2010			At Sept. 30, 2010			At Dec. 31, 2009			One Year Change
Assets
Cash and due from banks	$	56,821			51,812			60,071			-5.4	%
Interest bearing deposits with banks		155,181			267,863			290,801			-46.6	%
Total cash and cash equivalents		212,002			319,675			350,872			-39.6	%

Investment securities		235,200			194,708			214,168			9.8	%
Presold mortgages		3,962			3,226			3,967			-0.1	%

Loans – non-covered		2,083,004			2,096,439			2,132,843			-2.3	%
Loans – covered by FDIC loss share agreements		371,128			413,735			520,022			-28.6	%
Total loans		2,454,132			2,510,174			2,652,865			-7.5	%
Allowance for loan losses – non-covered		(38,275	)		(44,999	)		(37,343	)		2.5	%
Allowance for loan losses – covered		(11,155	)		−			−			n/m
Total allowance for loan losses		(49,430	)		(44,999	)		(37,343	)		32.4	%
Net loans		2,404,702			2,465,175			2,615,522			-8.1	%

Premises and equipment		67,741			54,039			54,159			25.1	%
FDIC indemnification asset		123,719			93,125			143,221			-13.6	%
Intangible assets		70,358			70,577			70,948			-0.8	%
Other real estate owned – non-covered		21,081			17,475			8,793			139.7	%
Other real estate owned – covered		94,891			101,389			47,430			100.1	%
Other assets		45,276			40,948			36,276			24.8	%
Total assets	$	3,278,932			3,360,337			3,545,356			-7.5	%


Liabilities
Deposits:
Non-interest bearing demand	$	292,759			290,388			272,422			7.5	%
NOW accounts		292,623			370,654			362,366			-19.2	%
Money market accounts		498,312			492,983			496,940			0.3	%
Savings accounts		153,325			154,955			149,338			2.7	%
Brokered time deposits		143,554			94,073			76,332			88.1	%
Internet time deposits		46,801			53,246			128,024			-63.4	%
Other time deposits > $100,000		602,371			641,970			704,128			-14.5	%
Other time deposits		622,768			653,213			743,558			-16.2	%
Total deposits		2,652,513			2,751,482			2,933,108			-9.6	%

Repurchase agreements		54,460			68,157			64,058			-15.0	%
Borrowings		196,870			158,907			176,811			11.3	%
Other liabilities		30,486			30,836			28,996			5.1	%
Total liabilities		2,934,329			3,009,382			3,202,973			-8.4	%

Shareholders’ equity
Preferred stock		65,000			65,000			65,000			0.0	%
Discount on preferred stock		(2,932	)		(3,146	)		(3,789	)		-22.6	%
Common stock		99,615			99,303			98,099			1.5	%
Common stock warrants		4,592			4,592			4,592			0.0	%
Retained earnings		183,413			188,028			182,908			0.3	%
Accumulated other comprehensive income (loss)		(5,085	)		(2,822	)		(4,427	)		14.9	%
Total shareholders’ equity		344,603			350,955			342,383			0.6	%
Total liabilities and shareholders’ equity	$	3,278,932			3,360,337			3,545,356			-7.5	%

First Bancorp - Financial Summary – page 5

	For the Three Months Ended
YIELD INFORMATION	December 31, 2010			September 30, 2010			June 30, 2010			March 31, 2010			December 31, 2009

Yield on loans		6.16	%		5.79	%		5.86	%		5.90	%		5.97	%
Yield on securities – tax-equivalent (1)		4.00	%		4.26	%		4.38	%		4.13	%		3.97	%
Yield on other earning assets		0.41	%		0.32	%		0.32	%		0.38	%		0.36	%
Yield on all interest earning assets		5.75	%		5.36	%		5.46	%		5.37	%		5.35	%

Rate on interest bearing deposits		1.06	%		1.16	%		1.22	%		1.32	%		1.61	%
Rate on other interest bearing liabilities		1.30	%		1.52	%		1.54	%		1.41	%		1.17	%
Rate on all interest bearing liabilities		1.07	%		1.17	%		1.23	%		1.32	%		1.58	%
Total cost of funds		0.96	%		1.06	%		1.11	%		1.20	%		1.44	%

Net interest margin – tax-equivalent (2)		4.79	%		4.30	%		4.35	%		4.16	%		3.92	%
Average prime rate		3.25	%		3.25	%		3.25	%		3.25	%		3.25	%

(1)	See footnote 1 on page 1 of Financial Summary for discussion of tax-equivalent adjustments.

(2)	Calculated by dividing annualized tax-equivalent net interest income by average earning assets for the period. See footnote 1 on page 1 of Financial Summary for discussion of tax-equivalent adjustments.

NET INTEREST INCOME PURCHASE ACCOUNTING ADJUSTMENTS
	For the Three Months Ended
	December 31, 2010			September 30, 2010			June 30, 2010			March 31, 2010			December 31, 2009
	Positive (negative) impact on net interest income

Interest income – reduced by premium amortization on loans	$	(49	)		(49	)		(49	)		(49	)		(49	)
Interest income – increased by accretion of loan discount		3,233			1,231			1,659			1,484			1,469
Interest expense – reduced by premium amortization of deposits		–			296			731			1,184			1,639
Interest expense – reduced by premium amortization of borrowings		37			72			116			116			116
Impact on net interest income	$	3,221			1,550			2,457			2,735			3,175

	Year Ended
	December 31, 2010			December 31, 2009


Interest income – reduced by premium amortization on loans	$	(196	)		(196	)
Interest income – increased by accretion of loan discount		7,607			1,469
Interest expense – reduced by premium amortization of deposits		2,211			3,911
Interest expense – reduced by premium amortization of borrowings		341			464
Impact on net interest income	$	9,963			5,648

First Bancorp - Financial Summary - page 6


ASSET QUALITY DATA ($ in thousands)	Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			March 31, 2010			Dec. 31, 2009

Non-covered nonperforming assets
Nonaccrual loans	$	62,326			80,318			73,152			63,415			62,206
Restructured loans		33,677			20,447			20,392			27,207			21,283
Accruing loans > 90 days past due		-			-			-			-			-
Total non-covered nonperforming loans		96,003			100,765			93,544			90,622			83,489
Other real estate		21,081			17,475			14,690			10,818			8,793
Total non-covered nonperforming assets	$	117,084			118,240			108,234			101,440			92,282

Covered nonperforming assets (1)
Nonaccrual loans (2)	$	58,466			75,116			98,669			105,043			117,916
Restructured loans		14,359			4,160			8,450			11,379			-
Accruing loans > 90 days past due		-			-			-			-			-
Total covered nonperforming loans		72,825			79,276			107,119			116,422			117,916
Other real estate		94,891			101,389			80,074			68,044			47,430
Total covered nonperforming assets	$	167,716			180,665			187,193			184,466			165,346

Total nonperforming assets	$	284,800			298,905			295,427			285,906			257,628
Asset Quality Ratios – All Assets
Net charge-offs to average loans - annualized		4.17	%		0.88	%		0.85	%		0.81	%		0.54	%
Nonperforming loans to total loans		6.88	%		7.17	%		7.86	%		7.94	%		7.59	%
Nonperforming assets to total assets		8.69	%		8.90	%		8.90	%		8.43	%		7.27	%
Allowance for loan losses to total loans		2.01	%		1.79	%		1.65	%		1.52	%		1.41	%

Asset Quality Ratios – Based on Non-covered Assets only
Net charge-offs to average loans – non-covered - annualized		3.10	%		1.06	%		1.04	%		1.01	%		0.69	%
Non-covered nonperforming loans to non-covered loans		4.61	%		4.81	%		4.46	%		4.28	%		3.91	%
Non-covered nonperforming assets to total non-covered assets		4.16	%		4.16	%		3.89	%		3.58	%		3.10	%
Allowance for loan losses to non-covered loans		1.84	%		2.15	%		2.01	%		1.87	%		1.75	%

(1) Covered nonperforming assets consist of assets that are included in loss-share agreements with the FDIC. (2) At December 31, 2010, the contractual balance of the nonaccrual loans covered by the FDIC loss share agreements was $86.2 million.

FIRST BANCORP /NC/ - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - February 3, 2011

Attached files

FIRST BANCORP /NC/ Reports