FIRST BANCORP /NC/ - 10-Q Quarterly Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended
September 30, 2004

Commission File Number 0-15572

FIRST BANCORP
(Exact Name of Registrant as Specified in its Charter)

North Carolina		56-1421916
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

341 North Main Street, Troy, North Carolina		27371-0508
(Address of Principal Executive Offices)		(Zip Code)

(Registrant’s telephone number, including area code)		(910) 576-6171

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

|X| YES |_| NO

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.

|X| YES |_| NO

As of October 25, 2004, 9,370,489 shares of the registrant’s Common Stock, no par value, were outstanding. The registrant had no other classes of securities outstanding.

INDEX
FIRST BANCORP AND SUBSIDIARIES

		Page

Part I. Financial Information

Item 1 - Financial Statements

	Consolidated Balance Sheets - September 30, 2004 and 2003 (With Comparative Amounts at December 31, 2003)	3

	Consolidated Statements of Income - For the Periods Ended September 30, 2004 and 2003	4

	Consolidated Statements of Comprehensive Income - For the Periods Ended September 30, 2004 and 2003	5

	Consolidated Statements of Shareholders’ Equity - For the Periods Ended September 30, 2004 and 2003	6

	Consolidated Statements of Cash Flows - For the Periods Ended September 30, 2004 and 2003	7

Notes to Consolidated Financial Statements		8

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations		13

Item 3 - Quantitative and Qualitative Disclosures About Market Risk		28

Item 4 - Controls and Procedures		29

Part II. Other Information

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds		30

Item 6 - Exhibits and Reports on Form 8-K		31

Signatures		32

Page 2

Part I. Financial Information
Item 1 - Financial Statements

F irst Bancorp and Subsidiaries
Consolidated Balance Sheets

*($ in thousands-unaudited)*					September 30, 2004			December 31, 2003 (audited)			September 30, 2003


ASSETS
Cash & due from banks, noninterest-bearing					$	34,657			36,315			30,671
Due from banks, interest-bearing						52,555			12,632			5,401
Federal funds sold						—			13,967			9,478

		Total cash and cash equivalents				87,212			62,914			45,550


Securities available for sale (costs of $90,938, $101,587, and $88,032)						92,330			103,455			89,480

Securities held to maturity (fair values of $14,242, $14,906, and $15,085)						13,721			14,206			14,345

Presold mortgages in process of settlement						1,781			1,307			6,224

Loans						1,337,583			1,218,895			1,142,900
	Less: Allowance for loan losses					(14,351	)		(13,569	)		(12,700	)

	Net loans					1,323,232			1,205,326			1,130,200


Premises and equipment						28,195			25,356			23,187
Accrued interest receivable						6,432			6,087			5,230
Intangible assets						50,199			50,701			36,623
Other						7,072			6,417			6,383

			Total assets		$	1,610,174			1,475,769			1,357,222


LIABILITIES
Deposits: Demand - noninterest-bearing					$	160,791			146,499			130,521
Savings, NOW, and money market						463,144			462,876			413,511
Time deposits of $100,000 or more						288,988			238,535			228,906
Other time deposits						409,702			401,454			370,860

				Total deposits		1,322,625			1,249,364			1,143,798
Borrowings						132,239			76,000			66,000
Accrued interest payable						2,539			2,138			2,140
Other liabilities						7,183			6,411			7,196

		Total liabilities				1,464,586			1,333,913			1,219,134


SHAREHOLDERS’ EQUITY
Common stock, No par value per share
		Issued and outstanding: 9,370,091, 9,435,294, and 9,394,301 shares				51,515			55,392			54,473
Retained earnings						93,430			85,502			82,909
Accumulated other comprehensive income						643			962			706

		Total shareholders’ equity				145,588			141,856			138,088

			Total liabilities and shareholders’ equity		$	1,610,174			1,475,769			1,357,222

See notes to consolidated financial statements.

Page 3

F irst Bancorp and Subsidiaries
Consolidated Statements of Income

Three Months Ended
September 30,

Nine Months Ended
September 30,

($in thousands, except share data-unaudited)

2004

2003

2004

2003

INTEREST INCOME

Interest and fees on loans

19,321

17,296

55,516

51,554

Interest on investment securities:

Taxable interest income

1,167

910

3,451

2,761

Tax-exempt interest income

123

143

403

527

Other, principally overnight investments

123

123

313

651

Total interest income

20,734

18,472

59,683

55,493

INTEREST EXPENSE

Savings, NOW and money market

636

480

1,782

1,682

Time deposits of $100,000 or more

1,579

1,435

4,400

4,560

Other time deposits

2,062

2,103

6,093

6,888

Borrowings

916

413

2,235

1,306

Total interest expense

5,193

4,431

14,510

14,436

Net interest income

15,541

14,041

45,173

41,057

Provision for loan losses

770

695

2,080

1,755

Net interest income after provision for loan losses

14,771

13,346

43,093

39,302

NONINTEREST INCOME

Service charges on deposit accounts

2,325

1,988

6,879

5,776

Other service charges, commissions and fees

809

667

2,499

2,076

Fees from presold mortgages

220

565

698

1,918

Commissions from sales of insurance and financial products

387

361

1,083

956

Data processing fees

104

304

242

Securities gains

100

288

Other gains

351

269

Total noninterest income

4,296

3,802

12,020

11,137

NONINTEREST EXPENSES