First Bancorp Reports Fourth Quarter and Annual Results

           First Bancorp Reports Fourth Quarter and Annual Results

PR Newswire

TROY, N.C., Feb. 1, 2013

TROY, N.C., Feb. 1, 2013 /PRNewswire/ -- First Bancorp (NASDAQ:FBNC), the
parent company of First Bank, announced today a net loss available to common
shareholders of $26.5 million, or ($1.53) per diluted common share, for the
three months ended December 31, 2012, compared to net income available to
common shareholders of $0.2 million, or $0.01 per diluted common share,
recorded in the fourth quarter of 2011. For the year ended December 31, 2012,
the Company reported a net loss available to common shareholders of $26.2
million, or ($1.54) per diluted common share, compared to net income of $7.5
million, or $0.44 per diluted common share, for the year ended December 31,
2011.

As previously reported and discussed below, in the fourth quarter of 2012, the
Company completed a capital raise and undertook initiatives to strengthen and
remove risk from its balance sheet in anticipation of a planned disposition of
classified loans and the write-down of certain foreclosed properties. The
charges associated with the loan disposition and foreclosed property
write-down are reflected in the fourth quarter and year-to-date earnings being
reported today.

On December 21, 2012, the Company reported the completion of a capital raise
totaling $33.8 million. A combination of common and preferred stock was
issued, including 2,656,294 shares of common stock and 728,706 shares of
non-voting preferred stock, each at the same price of $10.00 per share. The
preferred stock is entitled to the same dividend rate as common stock and is
convertible into common stock, in a like amount, upon the occurrence of
certain transfers of the preferred stock.

Also, in the fourth quarter of 2012, the Company identified approximately $68
million of non-covered higher-risk loans that it targeted for sale to a
third-party investor. Based on an offer to purchase these loans that was
received in December, the Company wrote the loans down by approximately $38
million to their estimated liquidation value of approximately $30 million and
reclassified them as "loans held for sale." The sale of substantially the
same pool of loans was completed on January 23, 2013. The incremental
provision for loan losses that was necessary as a result of this transaction
was approximately $32.9 million, which included the net impact of several
factors affecting the Company's calculation of the allowance for loan losses.
Of the $68 million in loans targeted for sale, approximately $38.2 million
had been classified as nonaccrual loans, and $10.5 million had been classified
as accruing troubled-debt-restructurings.

Additionally, in the fourth quarter of 2012, the Company recorded write-downs
on substantially all of its non-covered foreclosed properties in connection
with efforts to accelerate the sale of these assets. The total amount of the
write-downs was $10.6 million, which amounted to 29% of the total carrying
value of the properties.

Other significant factors that affect the comparability of the full year 2012
and 2011 results are:

  oIn the third quarter of 2011, the Company recorded $2.3 million in
    accelerated accretion of the discount remaining on preferred stock that
    was redeemed that quarter. Total discount accretion of the preferred
    stock in 2011 was $2.9 million. There was no remaining preferred stock
    discount after the redemption transaction in September 2011, and therefore
    the Company did not record any discount accretion on preferred stock in
    2012.
  oIn the first quarter of 2011, the Company realized a $10.2 million bargain
    purchase gain related to the acquisition of The Bank of Asheville in
    Asheville, North Carolina.

Note Regarding Components of Earnings

The Company's results of operation are significantly affected by the on-going
accounting for two FDIC-assisted failed bank acquisitions. 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 on those assets. The term "non-covered"
refers to the Company's legacy assets, which are not included in any type of
loss share arrangement.

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, including loans that payoff, the
Company records positive adjustments to interest income over the life of the
respective loan – also referred to as loan discount accretion. 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 on covered loans, discount accretion,
and losses from covered foreclosed properties is generally only impacted by
20% of these amounts 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 2012 amounted to $35.7 million,
an 11.8% increase from the $31.9 million recorded in the fourth quarter of
2011. Net interest income for the year ended December 31, 2012 amounted to
$135.2 million, a 2.3% increase from the $132.2 million recorded 2011.

The Company's net interest margin (tax-equivalent net interest income divided
by average earning assets) in the fourth quarter of 2012 was 5.01%, a 46 basis
point increase compared to the 4.55% margin realized in the fourth quarter of
2011 and a 15 basis point increase from the 4.86% margin realized in the third
quarter of 2012. The higher margins were primarily a result of higher amounts
of discount accretion on loans purchased in failed bank acquisitions
recognized during the respective periods, as well as lower overall funding
costs. The higher amounts of discount accretion are due to increased
expectations regarding the collectability of the loans.

Excluding the discount accretion on purchased loans, the Company's net
interest margin was 4.17% for the fourth quarter of 2012 compared to 4.22% for
the third quarter of 2012 and 4.31% in the fourth quarter of 2011. The
decline was due to asset yields that declined by more than the average cost of
deposits. See the Financial Summary for a table that presents the impact of
the loan discount accretion, as well as other purchase accounting adjustments.
Also see the Financial Summary for a reconciliation of the Company's net
interest margin to the net interest margin excluding the loan discount
accretion, and the note thereto that explains why this ratio is presented and
caution regarding the use of this non-GAAP performance measure. 

The Company's cost of funds has steadily declined from 0.72% in the fourth
quarter of 2011 to 0.51% in the fourth quarter of 2012.

For the twelve month period ended December 31, 2012, the Company's net
interest margin was 4.78% compared to 4.72% for 2011.

Provision for Loan Losses and Asset Quality

The Company recorded total provisions for loan losses of $44.6 million in the
fourth quarter of 2012 compared to $9.9 million for the fourth quarter of
2011. For the year ended December 31, 2012, the Company recorded total
provisions for loan losses of $79.7 million compared to $41.3 million for
2011.

The provision for loan losses on non-covered loans amounted to $40.3 million
in the fourth quarter of 2012 compared to $6.9 million in the fourth quarter
of 2011. The increase was due to the $33.6 incremental provision for loan
losses recorded in connection with the loan sale that was discussed above.
For 2012, the provision for loan losses on non-covered loans amounted to $70.0
million compared to $28.5 million for 2011. The higher provision for loan
losses was primarily a result of 1) the aforementioned loan sale and 2) an
internal review of non-covered loans that occurred in the first quarter of
2012 that applied more conservative assumptions to estimate the probable
losses associated with some of the Company's nonperforming loan relationships,
which the Company believed could lead to a more timely resolution of the
related credits – many of these same loans were included in the loans
transferred to the held-for-sale category in the fourth quarter of 2012.

The Company's provisions for loan losses for covered loans amounted to $4.3
million and $3.0 million for the three months ended December 31, 2012 and
2011, respectively, and $9.7 million and $12.8 million for the year ended
December 31, 2012 and 2011, respectively. The lower provision for the year
ended 2012 was due to stabilization in the Company's assessment of the losses
associated with its nonperforming covered loans. Until the fourth quarter of
2012, the provision for loan losses related to covered loans was always offset
by an 80% increase to the FDIC indemnification asset, which increases
noninterest income. In the fourth quarter of 2012, as it relates to $1.5
million of the $4.3 million provision for loan losses on covered loans, the
Company did not record an increase to the indemnification asset because the
Company believes that the loan losses will occur after the expiration of a
commercial loss share agreement that expires in June 2014.

Total non-covered nonperforming assets amounted to $106.1 million at December
31, 2012 (3.64% of non-covered total assets) a decrease of $16.2 million from
the $122.3 million recorded at December 31, 2011. The decrease is due to the
write-downs associated with the loan sale, as well as the foreclosed property
write-downs. Upon the January 23, 2013 completion of the loan sale,
nonperforming assets declined by the $21.9 million of nonperforming loans held
for sale recorded at December 31, 2012.

Troubled debt restructurings (TDRs) increased by $13.1 million since December
31, 2011. TDRs are accruing loans that the Company has granted concessions to
as a result of the borrower's financial difficulties. As part of a routine
regulatory exam that concluded in the third quarter of 2012, the Company
reclassified approximately $30 million of performing loans to TDR status
during the second and third quarters of 2012. Other than reclassifying these
loans to a nonperforming asset category for disclosure purposes, the
reclassifications did not impact the Company's financial statements. In
connection with the loan sale, the Company recorded $5.8 million in
charge-offs to write-down the TDRs to their estimated fair value at December
31, 2012, and reclassified approximately $4.7 million of TDRs to the
"nonperforming loans held for sale" category as of December 31, 2012. 

Non-covered foreclosed real estate has declined from $37.0 million at December
31, 2011 to $26.3 million at December 31, 2012 due to the aforementioned
write-downs of $10.6 million in the fourth quarter of 2012.

Total covered nonperforming assets steadily declined during 2012, amounting to
$96.2 million at December 31, 2012 compared to $141.0 million at December 31,
2011. Within this category, foreclosed real estate declined from $85.3
million at December 31, 2011 to $47.3 million at December 31, 2012.

Noninterest Income

Total noninterest income (loss) for the three months ended December 31, 2012
was ($8.5 million) compared to $3.4 million for the comparable period of
2011. For the years ended December 31, 2012 and 2011, the Company recorded
noninterest income of $1.4 million and $26.2 million, respectively. The
significant decrease in noninterest income for the quarter-to-date and
year-to-date period comparison is primarily the result of the previously
discussed non-covered foreclosed property write-downs recorded in the fourth
quarter of 2012 and the $10.2 million bargain purchase gain recorded in the
acquisition of The Bank of Asheville during the first quarter of 2011.

Core noninterest income includes i) service charges on deposit accounts, ii)
other service charges, commissions, and fees, iii) fees from presold
mortgages, iv) commissions from financial product sales, and v) bank-owned
life insurance income. Core noninterest income for the fourth quarter of 2012
was $6.6 million, an increase of 11.7% over the $5.9 million reported for the
fourth quarter of 2011. Core noninterest income for the year ended December
31, 2012 amounted to $25.5 million, an increase of 9.8% from 2011. These
increases were primarily due to higher debit card usage and mortgage loan
refinancing activity.

Losses on non-covered foreclosed properties amounted to $12.3 million for the
fourth quarter of 2012, compared to $0.8 million for the fourth quarter of
2011. For the twelve months ended December 31, 2012, losses on non-covered
foreclosed properties amounted to $15.3 million compared to $3.4 million for
2011. These increases are primarily due to the $10.6 million in fourth
quarter 2012 write-downs previously discussed.

For the fourth quarter of 2012, the Company recorded losses on covered
foreclosed properties of $0.3 million compared to $11.8 million in the fourth
quarter of 2011. For the years ended December 31, 2012 and 2011, losses on
covered properties amounted to $13.0 million and $24.5 million, respectively.
The lower losses in 2012 were primarily a result of lower levels of covered
foreclosed properties, as well as stabilization in real estate market values.

As previously discussed, indemnification asset income (expense) is recorded to
reflect additional (decreased) amounts expected to be received from the FDIC
due to covered loan and foreclosed property losses arising during the period.
In the fourth quarter of 2012, higher loan discount accretion and relatively
low levels of loan and foreclosed property losses on covered assets resulted
in a net reduction in the indemnification asset, which resulted in $2.0
million of indemnification asset expense compared to $10.0 million in
indemnification asset income recorded in the fourth quarter of 2011. For the
year ended December 31, 2012, indemnification asset income amounted to $4.1
million compared to $20.5 million for 2011.

The Company recorded "other losses" of $0.5 million in the fourth quarter of
2012. This was primarily a result of prepayment penalties associated with the
Company paying off $65 million in borrowings prior to their maturity dates.

The Company recorded $0.6 million in gains on sales of securities during 2012
compared to $0.1 million in 2011.

Noninterest Expenses

Noninterest expenses amounted to $25.8 million in the fourth quarter of 2012,
a 6.6% increase from the $24.2 million recorded in the fourth quarter of
2011. Noninterest expenses for the twelve months ended December 31, 2012
amounted to $97.3 million, a 1.2% increase from the $96.1 million recorded in
2011. The increase in noninterest expense primarily relates to an increase in
personnel expense as the Company has hired additional employees in order to
build the Company's infrastructure, expand wealth management capabilities, and
prepare the Company for future growth.

During the fourth quarter of 2012, the Company recorded approximately $1.2
million in noninterest expenses related to several miscellaneous expenses that
are not considered a normal part of ongoing operations, including the early
termination of a lease, due diligence costs associated with the loan sale, and
non-credit losses. Effective December 31, 2012, the Company froze its two
defined benefit pension plans. As a result, the Company does not expect to
record defined benefit pension expense in future periods. Total pension
expense was $2.6 million in 2012 and $2.8 million in 2011.

Balance Sheet and Capital

Total assets at December 31, 2012 amounted to $3.2 billion, a 1.4% decrease
from a year earlier. Total loans at December 31, 2012 amounted to $2.4
billion, a 2.2% decrease from a year earlier, and total deposits amounted to
$2.8 billion at December 31, 2012, a 2.4% increase from a year earlier.

During the fourth quarter of 2012, the Company continued to originate new
loans within its non-covered loan portfolio. However, due to the
aforementioned loan sale, the Company wrote-down and transferred a total of
$68 million from this category in the fourth quarter of 2012. This event
resulted in a $43 million net decline in non-covered loans in the fourth
quarter of 2012. At December 31, 2012, non-covered loans amounted to $2.1
billion, an increase of $25.0 million, or 1.2%, from a year earlier. The
Company is actively pursuing lending opportunities.

The Company's level of non-interest bearing checking accounts amounted to
$413.2 million at December 31, 2012, a 23.0% increase from a year earlier,
while interest-bearing checking accounts amounted to $519.6 million, an
increase of 22.7% from a year earlier. The overall growth in checking and
other transaction accounts has allowed the Company to reduce its reliance on
higher cost time deposits and borrowings.

During the fourth quarter of 2012, the Company's capital level was impacted by
the $33.8 million capital raise, the $26.2 million net loss available to
common shareholders, and a $9 million positive adjustment related to the
freezing of the Company's pension plans.

The Company remains well-capitalized by all regulatory standards, with a Total
Risk-Based Capital Ratio at December 31, 2012 of 16.65% compared to the 10.00%
minimum to be considered well-capitalized. The Company's tangible common
equity to tangible assets ratio was 6.81% at December 31, 2012, an increase of
23 basis points from a year earlier.

Comments of the President and Other Business Matters

Richard H. Moore, President and CEO of First Bancorp, commented on today's
report, "We are pleased with the recent completion of two major initiatives
that have provided our company with higher capital levels and lower balance
sheet risk. We are now better positioned to grow and undertake new
initiatives."

The following is a list of business development and other miscellaneous
matters affecting the Company:

  oOn December 3, 2012, the Biscoe, North Carolina branch relocated to a new
    branch building located at 104 National Drive.
  oThe Company completed the relocation of its branch in Fort Chiswell,
    Virginia on November 5, 2012. The new branch is located at 145 Ivanhoe
    Road.
  oOn December 14, 2012, the Company announced a quarterly cash dividend of
    $0.08 cents per share payable on January 25, 2013 to shareholders of
    record on December 31, 2012. This is the same dividend rate as the
    Company declared in the fourth quarter of 2011.
  oOn December 28, 2012, the Company closed its Reynolds branch in Asheville,
    North Carolina. The Company continues to serve the Asheville market with
    four branches.

First Bancorp is a bank holding company headquartered in Troy, North Carolina
with total assets of approximately $3.2 billion. Its principal activity is
the ownership and operation of First Bank, a state-chartered community bank
that operates 97 branches, with 81 branches operating in North Carolina, 9
branches in South Carolina (Cheraw, Dillon, Florence, Latta, Jefferson, and
Little River), and 7 branches in Virginia (Abingdon, Christiansburg, Dublin,
Fort Chiswell, Radford, Salem and Wytheville), where First Bank does business
as First Bank of Virginia. First Bank also has loan production offices in
Greenville, North Carolina and 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 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. Forward-looking
statements speak only as of the date they are made, and the Company undertakes
no obligation to update or revise forward-looking statements. The Company is
also not responsible for changes made to the press release by wire services,
internet services or other media.

First Bancorp and Subsidiaries
Financial Summary – Page 1
                                     Three Months Ended             

                                     December 31,                   Percent
($ in thousands except per share     2012               2011        Change
data – unaudited)
INCOME STATEMENT
Interest income
 Interest and fees on loans        $             35,181
                                     37,839
 Interest on investment securities 1,431              1,865
 Other interest income             175                136
 Total interest income          39,445             37,182      6.1%
Interest expense
 Interest on deposits              3,379              4,667
 Other, primarily borrowings       381                595
 Total interest expense         3,760              5,262       (28.5%)
 Net interest income          35,685             31,920      11.8%
Provision for loan losses –          40,272             6,907       483.1%
non-covered loans
Provision for loan losses – covered  4,305              2,971       44.9%
loans
Total provision for loan losses      44,577             9,878       351.3%
Net interest income (loss) after     (8,892)            22,042      (140.3%)
provision for loan losses
Noninterest income
 Service charges on deposit        2,998              2,996
accounts
 Other service charges,            2,197              2,042
commissions, and fees
 Fees from presold mortgages       693                500
 Commissions from financial        507                365
product sales
 Bank-owned life insurance income  211                12
 Foreclosed property losses and    (293)              (11,799)
write-downs – covered
 Foreclosed property losses and    (12,299)           (812)
write-downs – non-covered
 Indemnification asset income      (2,017)            10,026
(expense), net
 Other gains (losses)              (530)              93
 Total noninterest income       (8,533)            3,423       (349.3%)
Noninterest expenses
 Personnel expense                 13,396             12,811
 Occupancy and equipment expense   3,136              2,695
 Intangibles amortization          227                226
 Merger expenses                   −                  30
 Other operating expenses          9,036              8,430
 Total noninterest expenses     25,795             24,192      6.6%
Income (loss) before income taxes    (43,220)           1,273       n/m
Income taxes (benefit)               (17,283)           289         n/m
Net income (loss)                    (25,937)           984         n/m
Preferred stock dividends            (532)              (794)
Accretion of preferred stock         −                  −
discount
Net income (loss) available to       $              190         n/m
common shareholders                  (26,469)
Earnings (loss) per common share –   $             0.01        n/m
basic                                (1.53)
Earnings (loss) per common share –   (1.53)             0.01        n/m
diluted
ADDITIONAL INCOME STATEMENT
INFORMATION
 Net interest income, as reported  $             31,920
                                     35,685
 Tax-equivalent adjustment (1)     377                394
 Net interest income,              $             32,314      11.6%
tax-equivalent                       36,062
(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.



n/m = not meaningful



First Bancorp and Subsidiaries
Financial Summary – Page 2
                                      Twelve Months Ended            

                                      December 31,                   Percent
($ in thousands except per share data 2012               2011        Change
– unaudited)
INCOME STATEMENT
Interest income
 Interest and fees on loans         $              147,652
                                      145,554
 Interest on investment securities  6,310              7,680
 Other interest income              656                436
 Total interest income           152,520            155,768     (2.1%)
Interest expense
 Interest on deposits               15,454             21,351
 Other, primarily borrowings        1,866              2,214
 Total interest expense          17,320             23,565      (26.5%)
 Net interest income           135,200            132,203     2.3%
Provision for loan losses –           69,993             28,525      145.4%
non-covered loans
Provision for loan losses – covered   9,679              12,776      (24.2%)
loans
Total provision for loan losses       79,672             41,301      92.9%
Net interest income after provision   55,528             90,902      (38.9%)
for loan losses
Noninterest income
 Service charges on deposit         11,865             11,981
accounts
 Other service charges,             8,831              8,067
commissions, and fees
 Fees from presold mortgages        2,378              1,609
 Commissions from financial product 1,832              1,512
sales
 Bank-owned life insurance income   591                45
 Gain from business acquisition     −                  10,196
 Foreclosed property losses and     (13,035)           (24,492)
write-downs – covered
 Foreclosed property losses and     (15,325)           (3,355)
write-downs – non-covered
 Indemnification asset income, net  4,077              20,481
 Securities gains                   638                74
 Other gains (losses)               (463)              98
 Total noninterest income        1,389              26,216      (94.7%)
Noninterest expenses
 Personnel expense                  53,343             51,438
 Occupancy and equipment expense    11,754             10,900
 Intangibles amortization           897                902
 Merger expenses                    −                  636
 Other operating expenses           31,281             32,230
 Total noninterest expenses      97,275             96,106      1.2%
Income (loss) before income taxes     (40,358)           21,012      n/m
Income taxes (benefit)                (16,952)           7,370       n/m
Net income (loss)                     (23,406)           13,642      n/m
Preferred stock dividends             (2,809)            (3,234)
Accretion of preferred stock discount −                  (2,932)
Net income (loss) available to common $              7,476       n/m
shareholders                          (26,215)
Earnings (loss) per common share –    $             0.44        n/m
basic                                 (1.54)
Earnings (loss) per common share –    (1.54)             0.44        n/m
diluted
ADDITIONAL INCOME STATEMENT
INFORMATION
 Net interest income, as reported   $              132,203
                                      135,200
 Tax-equivalent adjustment (1)      1,527              1,556
 Net interest income,               $              133,759     2.2%
tax-equivalent                        136,727
(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 and Subsidiaries
Financial Summary - Page 3
                          Three Months Ended          Twelve Months Ended

                          December 31,                December 31,
PERFORMANCE RATIOS        2012         2011           2012         2011
(annualized)
Return on average assets  (3.18%)      0.02%          (0.79%)      0.23%
(1)
Return on average common  (36.95%)     0.26%          (9.29%)      2.59%
equity (2)
Net interest margin –     5.01%        4.55%          4.78%        4.72%
tax-equivalent (3)
Net charge-offs to
average loans –           8.09%        1.09%          3.02%        1.52%
non-covered
COMMON SHARE DATA
Cash dividends declared – $        $          $        $    
common                    0.08         0.08           0.32         0.32
Stated book value –       14.51        16.66          14.51        16.66
common
Tangible book value –     11.00        12.53          11.00        12.53
common
Common shares outstanding 19,669,302   16,909,820     19,669,302   16,909,820
at end of period
Weighted average shares   17,332,662   16,893,140     17,049,513   16,856,072
outstanding – basic
Weighted average shares   17,332,662   16,920,210     17,049,513   16,883,244
outstanding – diluted
CAPITAL RATIOS
Tangible equity to        9.04%        8.55%          9.04%        8.55%
tangible assets
Tangible common equity to 6.81%        6.58%          6.81%        6.58%
tangible assets
Tier I leverage ratio     10.23%       10.21%         10.23%       10.21%
Tier I risk-based capital 15.39%       15.46%         15.39%       15.46%
ratio
Total risk-based capital  16.65%       16.72%         16.65%       16.72%
ratio
AVERAGE BALANCES ($ in
thousands)
Total assets              $ 3,314,433  $ 3,292,494    $ 3,311,289  $ 3,315,045
Loans                     2,446,096    2,432,568      2,436,997    2,461,995
Earning assets            2,864,243    2,816,689      2,857,541    2,834,938
Deposits                  2,823,856    2,730,422      2,809,357    2,758,022
Interest-bearing          2,520,361    2,577,329      2,553,175    2,606,450
liabilities
Shareholders' equity      349,371      354,206        345,981      353,588
(1) Calculated by dividing annualized net income (loss) available to common
shareholders by average assets.
(2) Calculated by dividing annualized net income (loss) available to common
shareholders by average common equity.
(3) See footnote 1 on page 1 of Financial Summary for discussion of
tax-equivalent adjustments.





TREND INFORMATION
($ in thousands except   For the Three Months Ended
per share data)
                        December 31, September  June    March 31, December
                                       30,       30,               31,
INCOME STATEMENT         2012                             2012
                                       2012       2012               2011
Net interest income –    $  36,062   34,849     33,338  32,478     32,314
tax-equivalent (1)
Taxable equivalent       377           376        387     387        394
adjustment (1)
Net interest income      35,685        34,473     32,951  32,091     31,920
Provision for loan       40,272        5,970      5,194   18,557     6,907
losses – non-covered
Provision for loan       4,305         1,103      1,273   2,998      2,971
losses – covered
Noninterest income       (8,533)       2,803      1,770   5,349      3,423
Noninterest expense      25,795        23,657     23,448  24,375     24,192
Income (loss) before     (43,220)      6,546      4,806   (8,490)    1,273
income taxes
Income tax expense       (17,283)      2,123      1,516   (3,308)    289
(benefit)
Net income (loss)        (25,937)      4,423      3,290   (5,182)    984
Preferred stock          (532)         (688)      (829)   (760)      (794)
dividends
Net income (loss)
available to common      (26,469)      3,735      2,461   (5,942)    190
shareholders
Earnings (loss) per      (1.53)        0.22       0.15    (0.35)     0.01
common share – basic
Earnings (loss) per      (1.53)        0.22       0.15    (0.35)     0.01
common share – diluted
See footnote 1 on page 1 of Financial Summary for discussion of tax-equivalent
adjustments.



First Bancorp and Subsidiaries
Financial Summary – Page 4
                                                                  One

CONSOLIDATED BALANCE       At Dec. 31,     At Sept. 30,  At Dec. 31,  Year
SHEETS
                           2012            2012          2011         Change
($ in thousands)
Assets
Cash and due from banks    $            79,991        80,341       20.2%
                           96,588
Interest bearing deposits  144,919         203,212       135,826      6.7%
with banks
 Total cash and cash   241,507         283,203       216,167      11.7%
equivalents
Investment securities      223,416         217,530       240,614      (7.1%)
Presold mortgages          8,490           4,380         6,090        39.4%
Loans – non-covered        2,094,143       2,137,074     2,069,152    1.2%
Loans – covered by FDIC    282,314         303,997       361,234      (21.8%)
loss share agreements
 Total loans           2,376,457       2,441,071     2,430,386    (2.2%)
Allowance for loan losses  (41,643)        (45,154)      (35,610)     16.9%
– non-covered
Allowance for loan losses  (4,759)         (4,394)       (5,808)      (18.1%)
– covered
 Total allowance for   (46,402)        (49,548)      (41,418)     12.0%
loan losses
 Net loans             2,330,055       2,391,523     2,388,968    (2.5%)
Loans held for sale        30,393          −             −            −
Premises and equipment     74,371          74,044        69,975       6.3%
FDIC indemnification asset 102,559         107,615       121,677      (15.7%)
Intangible assets          68,943          69,170        69,732       (1.1%)
Foreclosed real estate –   26,285          38,065        37,023       (29.0%)
non-covered
Foreclosed real estate –   47,290          58,367        85,272       (44.5%)
covered
Bank-owned life insurance  27,857          27,587        2,207        1,162%
Other assets               63,744          51,193        52,749       (20.8%)
 Total assets          $  3,244,910   3,322,677     3,290,474    (1.4%)
Liabilities
Deposits:
 Non-interest bearing  $   413,195  398,527       335,833      23.0%
checking accounts
 Interest bearing      519,573         482,583       423,452      22.7%
checking accounts
 Money market accounts 551,209         533,462       509,801      8.1%
 Savings accounts      158,578         159,189       146,481      8.3%
 Brokered deposits     130,836         146,180       157,408      (16.9%)
 Internet time         10,060          18,518        29,902       (66.4%)
deposits
 Other time deposits > 530,015         562,245       575,408      (7.9%)
$100,000
 Other time deposits   507,894         533,760       576,752      (11.9%)
 Total deposits   2,821,360       2,834,464     2,755,037    2.4%
Repurchase agreements      −               −             17,105       (100.0%)
Borrowings                 46,394          111,394       133,925      (65.4%)
Other liabilities          21,039          34,029        39,257       (46.4%)
 Total liabilities     2,888,793       2,979,887     2,945,324    (1.9%)
Shareholders' equity
Preferred stock            70,787          63,500        63,500       11.5%
Common stock               131,877         105,454       104,841      25.8%
Retained earnings          153,629         181,672       185,491      (17.2%)
Accumulated other
comprehensive income       (176)           (7,836)       (8,682)      98.0%
(loss)
 Total shareholders'   356,117         342,790       345,150      3.2%
equity
Total liabilities and      $  3,244,910   3,322,677     3,290,474    (1.4%)
shareholders' equity



First Bancorp and Subsidiaries
Financial Summary - Page 5
                          For the Three Months Ended
                         December    September    June     March   December
                          31,      30,       30,   31,     31,
YIELD INFORMATION
                          2012        2012         2012    2012    2011
Yield on loans            6.15%       6.06%        5.88%    5.80%   5.74%
Yield on securities –     3.41%       3.45%        3.69%    3.84%   3.95%
tax-equivalent (1)
Yield on other earning    0.34%       0.31%        0.35%    0.29%   0.34%
assets
 Yield on all interest  5.53%       5.44%        5.31%    5.27%   5.29%
earning assets
Rate on interest bearing  0.56%       0.61%        0.66%    0.71%   0.77%
deposits
Rate on other interest    1.40%       1.60%        1.54%    1.61%   1.27%
bearing liabilities
 Rate on all interest   0.59%       0.66%        0.70%    0.76%   0.81%
bearing liabilities
 Total cost of funds  0.51%       0.57%        0.62%    0.67%   0.72%
 Net interest
margin – tax-equivalent   5.01%       4.86%        4.68%    4.59%   4.55%
(2)
 Average prime     3.25%       3.25%        3.25%    3.25%   3.25%
rate
(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.

                    For the Three Months Ended
NET INTEREST INCOME                                              
PURCHASE
                    December       September      June      March    December
ACCOUNTING          31,            30,            30,       31,      31,
ADJUSTMENTS
                    2012           2012           2012      2012     2011
($ in thousands)
Interest income –
reduced by premium  $    
              (116)         (116)          (116)     (116)    (116)
amortization on
loans
Interest income –
increased by                                                     
accretion of
 loan        6,011          4,587          3,290     2,578    1,730
discount (1)
Interest expense –
reduced by premium                                               

amortization of    13             17             22        33       58
deposits
Interest expense –
reduced by premium                                               

amortization of     −              −              −         30       35
borrowings
 Impact on net  $          4,488          3,196     2,525    1,707
interest income     5,908
(1) Indemnification asset income is reduced by 80% of the amount of the
accretion of loan discount, and therefore the net effect is that pretax income
is positively impacted by 20% of the amounts in this line item.



First Bancorp and Subsidiaries
Financial Summary - Page 6
                       Dec. 31,          Sept. 30,                   June 30,          March 31,      Dec. 31,

ASSET QUALITY DATA ($   2012              2012                       2012              2012           2011
in thousands)
Non-covered
nonperforming assets
Nonaccrual loans        $   33,034     69,413                      73,918            69,665         73,566
Troubled debt
restructurings -        24,848            38,522                      20,684            10,619         11,720
accruing
Accruing loans > 90     -                 -                           -                 -              -
days past due
 Total non-covered  57,882            107,935                     94,602            80,284         85,286
nonperforming loans
Nonperforming loans     21,938            -                           -                 -              -
held for sale
Foreclosed real estate  26,285            38,065                      37,895            36,838         37,023
Total non-covered       $  106,105      146,000                     132,497           117,122        122,309
nonperforming assets
Covered nonperforming
assets (1)
Nonaccrual loans        $   33,491     37,619                      39,075            42,369         41,472
Troubled debt
restructurings -        15,465            17,945                      19,054            13,158         14,218
accruing
Accruing loans > 90     -                 -                           -                 -              -
days past due
 Total covered      48,956            55,564                      58,129            55,527         55,690
nonperforming loans
Foreclosed real estate  47,290            58,367                      70,850            79,535         85,272
Total covered           $   96,246      113,931                     128,979           135,062        140,962
nonperforming assets
 Total              $  202,351       259,931                     261,476           252,184        263,271
nonperforming assets


Asset Quality Ratios –
All Assets
Net charge-offs to
average loans -         7.76%             1.80%                       0.96%             1.68%          1.00%
annualized
Nonperforming loans to  4.50%             6.70%                       6.27%             5.57%          5.80%
total loans
Nonperforming assets to 6.24%             7.82%                       7.86%             7.56%          8.00%
total assets
Allowance for loan      1.95%             2.03%                       2.19%             2.17%          1.70%
losses to total loans
Asset Quality Ratios – Based on
Non-covered Assets only
Net charge-offs to
average non-covered     8.09%             1.57%                       0.79%             1.49%          1.09%
loans - annualized
Non-covered
nonperforming loans to  2.76%             5.05%                       4.47%             3.83%          4.12%
non-covered loans
Non-covered
nonperforming assets to 3.64%             4.93%                       4.51%             4.02%          4.30%
total non-covered
assets
Allowance for loan
losses to non-covered   1.99%             2.11%                       2.25%             2.22%          1.72%
loans
___________________________________________________________________________________________________________________

(1) Covered nonperforming assets consist of assets that are included in loss-share agreements with the FDIC.







First Bancorp and Subsidiaries
Financial Summary - Page 7
                     For the Three Months Ended
NET INTEREST MARGIN,                                             
EXCLUDING
LOAN DISCOUNT                                                    
ACCRETION –
RECONCILIATION   Dec. 31,    Sept. 30,   June 30,   March 31,  Dec.
                                                                     31,
($ in thousands)     2012          2012        2012       2012
                                                                     2011
Net interest income, $          34,473      32,951     32,091     31,920
as reported          35,685
Tax-equivalent       377           376         387        387        394
adjustment
Net interest income, $          34,849      33,338     32,478     32,314
tax-equivalent (A)   36,062
                                                                

Average earning      $            2,855,083   2,863,866  2,846,972  2,816,689
assets (B)           2,864,243
Tax-equivalent net
interest                                                        
 margin,
annualized – as      5.01%         4.86%       4.68%      4.59%      4.55%
reported – (A)/(B)
Net interest income, $         34,849      33,338     32,478     32,314
tax-equivalent       36,062
Loan discount        6,011         4,587       3,290      2,578      1,730
accretion
Net interest income, 
tax-equivalent,                                                   
excluding            $    
 loan discount     30,051        30,262      30,048     29,900     30,584
accretion (A)
                                                                

Average earnings     $            2,855,083   2,863,866  2,846,972  2,816,689
assets (B)          2,864,243
Tax-equivalent net
interest margin,
excluding                                                        
 impact of loan
discount accretion,  4.17%         4.22%       4.22%      4.22%      4.31%
 annualized – (A)
/ (B)
Note: The measure "tax-equivalent net interest margin, excluding impact of
loan discount accretion" is a non-GAAP performance measure. Management of the
Company believes that it is useful to calculate and present the Company's net
interest margin without the impact of loan discount accretion for the reasons
explained in the remainder of this paragraph. Loan discount accretion is a
non-cash interest income adjustment related to the Company's acquisition of
two failed banks and represents the portion of the fair value discount that
was initially recorded on the acquired loans that is being recognized into
income over the lives of the loans. At December 31, 2012, the Company had a
remaining loan discount balance of $74.9 million compared to $108.1 million at
December 31, 2011. For the related loans that perform and pay-down over time,
the loan discount will also be reduced, with a corresponding increase to
interest income. Therefore management of the Company believes it is useful to
also present this ratio to reflect the Company's net interest margin excluding
this non-cash, temporary loan discount accretion adjustment to aid investors
in comparing financial results between periods. The Company cautions that
non-GAAP financial measures should be considered in addition to, but not as a
substitute for, the Company's reported GAAP results.



SOURCE First Bancorp

Website: http://www.firstbancorp.com
Contact: Elaine Pozarycki, +1-919-834-3090
 
Press spacebar to pause and continue. Press esc to stop.