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

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News Release

For Immediate Release:	For More Information,
October 31, 2011	Contact: Jerry L. Ocheltree
	910-576-6171

First Bancorp Reports Third Quarter Results

TROY, N.C. – First Bancorp (NASDAQ - FBNC), the parent company of First Bank, announced today a net loss available to common shareholders of $0.7 million, or ($0.04) per diluted common share, for the three months ended September 30, 2011 compared to net income available to common shareholders of $2.8 million, or $0.17 per diluted common share, for the same period in 2010. The results for quarter ended September 30, 2011 were negatively impacted by $2.3 million of accelerated accretion of the discount remaining on the preferred stock that was redeemed during the quarter. This stock was originally issued to the U.S. Treasury in January 2009 as part of the program known as TARP. When this preferred stock was redeemed, the remaining discount that was recorded upon the issuance of the stock, which had been on a five year accretion schedule, was immediately accreted as a reduction to net income available to common shareholders.

For the nine months ended September 30, 2011, net income to common shareholders amounted to $7.3 million, or $0.43 per diluted common share, compared to $9.1 million, or $0.54 per diluted common share, for the nine months ended September 30, 2010.

Operating results for the nine month period ended September 30, 2011 were impacted by the discount accretion previously discussed, as well as a $10.2 million bargain purchase gain related to the acquisition of The Bank of Asheville in Asheville, North Carolina. This gain resulted from the difference between the purchase price and the acquisition-date fair values of the acquired assets and liabilities. The after-tax impact of this gain was $6.2 million, or $0.37 per diluted common share. The Bank of Asheville was closed by regulatory authorities on January 19, 2011, and First Bank entered into a loss share purchase and assumption agreement with the FDIC to purchase substantially all of its assets and liabilities. At the time First Bank assumed its operations, The Bank of Asheville operated through five branches in Asheville, North Carolina, and had total assets of $198 million, including $161 million in loans and $192 million in deposits.

Note Regarding Components of Earnings

In addition to the gain related to The Bank of Asheville acquisition, the Company’s results of operations are significantly affected by the on-going accounting for the two FDIC-assisted failed bank acquisitions that the Company has completed. 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.

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 pay off, the Company records positive adjustments to interest income over the life of the respective loan – also referred to as 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% due to the corresponding adjustments made to the indemnification asset.

Net Interest Income and Net Interest Margin

Net interest income for the third quarter of 2011 amounted to $33.5 million, a 7.8% increase from the $31.1 million recorded in the third quarter of 2010. Net interest income for the nine months ended September 30, 2011 amounted to $100.3 million, a 6.9% increase from the $93.8 million recorded in the comparable period of 2010. The increases in net interest income have been due to higher net interest margins realized, which were partially offset by lower levels of average earning assets.

The Company’s net interest margin (tax-equivalent net interest income divided by average earnings assets) in the third quarter of 2011 was 4.79%, a 49 basis point increase compared to the 4.30% margin realized in the third quarter of 2010. For the nine month period ended September 30, 2011, the Company’s net interest margin was 4.77% compared to 4.27% for the same period in 2010. The higher margins are primarily related to larger amounts of discount accretion on loans purchased in failed bank acquisitions, as well as lower overall funding costs. The Company’s cost of funds has steadily declined from 1.06% in the third quarter of 2010 to 0.78% in the third quarter of 2011. See page 5 of the Financial Summary for a table that presents the impact of the purchase accounting adjustments, including discount accretion on purchased loans. As previously discussed, the amount of discount accretion is offset by a corresponding 80% reduction in indemnification asset income, and therefore the positive impact of the discount accretion on the Company’s pretax income is equal to 20% of the amount of the discount accretion.

Provision for Loan Losses and Asset Quality

The Company’s provisions for loan losses remain at elevated levels, primarily due to high unemployment rates and declining property values in its market area that negatively impact collateral dependent real estate loans. The Company’s provision for loan losses for non-covered loans amounted to $6.4 million in the third quarter of 2011 compared to $8.4 million in the third quarter of 2010. For the nine months ended September 30, 2011, the provision for loan losses for non-covered loans was $21.6 million compared to $24.0 million for the comparable period of 2010. The lower provisions for loan losses for non-covered loans in 2011 are primarily due to stabilization in overall loan quality and lower levels of non-covered nonperforming loans.

The Company’s provision for loan losses for covered loans amounted to $2.7 million and $9.8 million for the three and nine months ended September 30, 2011, whereas the Company did not record any provisions for loan losses on covered loans in the first nine months of 2010. The 2011 provisions were necessary primarily due to declines in real estate values on collateral dependent loans. As previously discussed, the provision for loan losses

related to covered loans is offset by an 80% increase to the FDIC indemnification asset, which increases noninterest income.

Total non-covered nonperforming assets have remained fairly stable over the past five quarter ends, ranging from $117 million to $120 million, or approximately 4.2% of total non-covered assets. Covered nonperforming assets have generally declined over that same period, amounting to $158 million at September 30, 2011 compared to $181 million at September 30, 2010.

Noninterest Income

Total noninterest income was $3.5 million in the third quarter of 2011 compared to $4.0 million for the third quarter of 2010. For the nine months ended September 30, 2011 and 2010, the Company recorded noninterest income of $22.8 million and $14.2 million, respectively. The significant increase in noninterest income for the nine month period comparison is primarily attributable to the aforementioned bargain purchase gain recorded in the first quarter of 2011 related to The Bank of Asheville transaction.

Within noninterest income, service charges on deposits declined for the first nine months of 2011 compared to the same period in 2010, amounting to $10.0 million in 2011 compared to $10.4 million in 2010. This decline was primarily attributable to lower overdraft fees, which began declining in the second half of 2010 partially as a result of new regulations that took effect in the third quarter of 2010 that limit the Company’s ability to charge overdraft fees. Service charges on deposit accounts recorded in the third quarter of 2011 were approximately the same as they were in the third quarter of 2010. Revenue that was lost in 2010 was substantially replaced by new fees on deposit accounts that took effect April 1, 2011.

Other service charges, commissions and fees amounted to $1.7 million in the third quarter of 2011 compared to $1.3 million in the third quarter of 2010. For the nine months ended September 30, 2011, this line item totaled $5.0 million compared to $4.1 million in the comparable period of 2010. The increases in 2011 are primarily attributable to increased debit card usage by the Company’s customers. The Company earns a small fee each time its customers make a debit card transaction. Because the Company has less than $10 billion in assets, it is exempt from recently announced regulatory rules limiting this income.

The Company continues to experience losses and write-downs on its foreclosed properties due to declining property values in its market area. For the third quarter of 2011, these losses amounted to $5.2 million for covered properties compared to $6.3 million in the third quarter of 2010. For the first nine months of 2011, losses on covered properties amounted to $12.7 million compared to $11.8 million for the same period in 2010.

Losses on non-covered foreclosed properties amounted to $0.9 million for the third quarter of 2011 compared to $0.1 million in the third quarter of 2010. For the nine months ended September 30, 2011, losses on non-covered foreclosed properties amounted to $2.5 million compared to $0.1 million for the comparable period of 2010.

As previously discussed, indemnification asset income is recorded to reflect additional amounts expected to be received from the FDIC due to covered loan and foreclosed property losses arising during the period. For the third quarter of 2011, indemnification asset income totaled $3.6 million compared to $5.1 million the third quarter of 2010. For the nine months ended September 30, 2011, indemnification asset income amounted to $10.5 million compared to $9.5 million for the same period of 2010.

Noninterest Expenses

Noninterest expenses amounted to $24.0 million in the third quarter of 2011, a 15.7% increase over the $20.7 million recorded in the same period of 2010. Noninterest expenses for the nine months ended September 30, 2011 amounted to $71.9 million, a 10.7% increase from the $64.9 million recorded in the first nine months of 2010.

Personnel expense has increased in 2011 due to employees joining the Company in The Bank of Asheville acquisition, as well as higher employee medical expense due to higher claims. Also, the Company has progressively built its infrastructure to manage increased compliance burdens, collection activities and overall growth.

Factors playing a role in the increased other operating expense line item were – 1) collection expenses on non-covered assets, which amounted to $1.1 million and $2.6 million for the three and nine months ended September 30, 2011, respectively, compared to $0.4 million and $1.4 million for the comparable periods in 2010, 2) fraud losses, which amounted to $0.2 million and $1.0 million for the three and nine months ended September 30, 2011, respectively, compared to a recovery of $0.3 million in the third quarter of 2010 and a loss of $0.4 million for the nine months ended September 30, 2010, and 3) overall higher overhead expenses associated with growth in the Company’s branch network, including the branches assumed from The Bank of Asheville.

Balance Sheet and Capital

Total assets at September 30, 2011 amounted to $3.3 billion, a 1.7% decrease from a year earlier. Total loans at September 30, 2011 amounted to $2.4 billion, a 3.1% decrease from a year earlier, and total deposits amounted to $2.7 billion at September 30, 2011, a 0.8% decrease from a year earlier.

Since the onset of the recession, the Company has generally experienced declines in loans and deposits. Normal loan paydowns and loan foreclosures have exceeded new loan growth, which has provided the liquidity to lessen reliance on high cost deposits. However, for the first time since this trend began, the Company experienced sequential growth in its non-covered loan portfolio, which increased $18 million from June 30, 2011 to September 30, 2011. The Company is actively pursuing lending opportunities in order to improve its asset yields, as well as to potentially decrease the dividend rate on its preferred stock, as discussed in the following paragraph.

On September 1, 2011, the Company received an investment of $63.5 million in the Company’s preferred stock from the U.S. Treasury as part of the Company’s participation in the Small Business Lending Fund (“SBLF”). Simultaneously, the Company redeemed the $65 million of shares of preferred stock issued to the Treasury in January 2009 under the Capital Purchase Program, a part of the Troubled Asset Relief Program (“TARP”). The goal of the SBLF is to incentivize healthy banks to make loans to small businesses. Only 36% of the banks in the nation that applied to participate in the SBLF were approved. Depending on our success in making small business loans, the dividend rate on the preferred stock could be reduced from the current 5% to as low as 1% for several years. Based on current loan levels, the Company continues to pay at the 5% rate. As previously discussed, the redemption of the TARP preferred stock resulted in an immediate acceleration of the remaining discount on the preferred stock that was recorded at the time of its issuance. There was no discount recorded related to the SBLF preferred stock (because no warrants were issued in connection with this preferred stock issuance), and therefore there will be no future amounts recorded for preferred stock discount accretion.

The Company remains well-capitalized by all regulatory standards with a Total Risk-Based Capital Ratio of 16.91% compared to the 10.00% minimum to be considered well-capitalized. The Company’s tangible common equity to tangible assets ratio was 6.75% at September 30, 2011, an increase of 20 basis points from a year earlier.

Comments of the President and Other Business Matters

Jerry L. Ocheltree, President and CEO of First Bancorp, commented on today’s report, “During the third quarter, we saw some positive developments, including a decrease in nonperforming assets and growth in our legacy loan portfolio. We are hopeful that this continues. First Bancorp remains very strong financially, and we are doing everything we can to improve this economy by lending to qualified borrowers. In addition, we continue to provide free checking account options and free debit cards to our customers, which I know are appreciated.”

Mr. Ocheltree noted the following other corporate developments:

On October 24, 2011, the Company reported that it had reached an agreement to purchase eleven coastal branches from Waccamaw Bank, headquartered in Whiteville, North Carolina. Seven of the branches are in Brunswick County, North Carolina, three branches are in Horry County, South Carolina, and one branch is in Wilmington, North Carolina. Approximately $180 million in deposits and $98 million in performing loans are expected to be acquired in the transaction. This transaction is subject to regulatory approval and is expected to be completed in the first quarter of 2012.

On November 3, 2011, the Shallotte, North Carolina branch will be holding a grand opening to celebrate the bank’s new facility on Highway 130 – Whiteville Road.

On December 5, 2011, the Wilmington, North Carolina Hanover Center branch is scheduled to re-open after an extensive renovation.

The Company has received regulatory approvals to open a branch in Salem, Virginia and to relocate its branch in Fort Chiswell, Virginia. Both are expected to occur in the spring of 2012.

On August 25, 2011, the Company announced a quarterly cash dividend of $0.08 cents per share payable on October 25, 2011 to shareholders of record on September 30, 2011. This is the same dividend rate as the Company declared in the third quarter of 2010.

First Bancorp is a bank holding company headquartered in Troy, North Carolina with total assets of approximately $3.3 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 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 and Subsidiaries

Financial Summary

	Three Months Ended September 30,						Percent
($ in thousands except per share data - unaudited)	2011			2010			Change

INCOME STATEMENT

Interest income
Interest and fees on loans	$	37,200			36,897
Interest on investment securities		1,921			1,778
Other interest income		107			135
Total interest income		39,228			38,810			1.1	%
Interest expense
Interest on deposits		5,150			7,245
Other, primarily borrowings		589			494
Total interest expense		5,739			7,739			(25.8	%)
Net interest income		33,489			31,071			7.8	%
Provision for loan losses – non-covered loans		6,441			8,391			(23.2	%)
Provision for loan losses – covered loans		2,705			–			n/m
Total provision for loan losses		9,146			8,391			9.0	%
Net interest income after provision for loan losses		24,343			22,680			7.3	%
Noninterest income
Service charges on deposit accounts		3,429			3,350
Other service charges, commissions, and fees		1,657			1,325
Fees from presold mortgages		468			404
Commissions from financial product sales		383			325
Foreclosed property losses and write-downs – covered		(5,176	)		(6,335	)
Foreclosed property losses and write-downs – non-covered		(919	)		(57	)
Indemnification asset income, net		3,589			5,068
Securities gains		–			1
Other gains (losses)		55			(124	)
Total noninterest income		3,486			3,957			(11.9	%)
Noninterest expenses
Personnel expense		13,066			11,309
Occupancy and equipment expense		2,763			2,812
Intangibles amortization		226			219
Merger expenses		12			–
Other operating expenses		7,891			6,371
Total noninterest expenses		23,958			20,711			15.7	%
Income before income taxes		3,871			5,926			(34.7	%)
Income taxes		1,314			2,078			(36.8	%)
Net income		2,557			3,848			(33.5	%)

Preferred stock dividends		(815	)		(812	)
Accretion of preferred stock discount		(2,474	)		(215	)

Net income (loss) available to common shareholders	$	(732	)		2,821			(125.9	%)


Earnings (loss) per common share – basic	$	(0.04	)		0.17			(123.5	%)
Earnings (loss) per common share – diluted		(0.04	)		0.17			(123.5	%)

ADDITIONAL INCOME STATEMENT INFORMATION
Net interest income, as reported	$	33,489			31,071
Tax-equivalent adjustment (1)		389			330
Net interest income, tax-equivalent	$	33,878			31,401			7.9	%

(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 2

	Nine Months Ended September 30,						Percent
($ in thousands except per share data - unaudited)	2011			2010			Change

INCOME STATEMENT

Interest income
Interest and fees on loans	$	112,471			112,724
Interest on investment securities		5,815			5,650
Other interest income		300			463
Total interest income		118,586			118,837			(0.2	%)
Interest expense
Interest on deposits		16,684			23,476
Other, primarily borrowings		1,619			1,577
Total interest expense		18,303			25,053			(26.9	%)
Net interest income		100,283			93,784			6.9	%
Provision for loan losses – non-covered		21,618			24,017			(10.0	%)
Provision for loan losses – covered		9,805			–			n/m
Total provision for loan losses		31,423			24,017			30.8	%
Net interest income after provision for loan losses		68,860			69,767			(1.3	%)
Noninterest income
Service charges on deposit accounts		10,038			10,408
Other service charges, commissions, and fees		4,972			4,080
Fees from presold mortgages		1,109			1,216
Commissions from financial product sales		1,147			1,087
Gain from acquisition		10,196			–
Foreclosed property losses and write-downs – covered		(12,693	)		(11,830	)
Foreclosed property losses and write-downs – non-covered		(2,543	)		(108	)
Indemnification asset income, net		10,455			9,464
Securities gains		74			25
Other gains (losses)		38			(154	)
Total noninterest income		22,793			14,188			60.6	%
Noninterest expenses
Personnel expense		38,627			33,733
Occupancy and equipment expense		8,205			8,654
Intangibles amortization		676			654
Merger expenses		606			–
Other operating expenses		23,800			21,907
Total noninterest expenses		71,914			64,948			10.7	%
Income before income taxes		19,739			19,007			3.9	%
Income taxes		7,081			6,780			4.4	%
Net income	$	12,658			12,227			3.5	%

Preferred stock dividends		(2,440	)		(2,437	)
Accretion of preferred stock discount		(2,932	)		(643	)

Net income available to common shareholders	$	7,286			9,147			(20.3	%)


Earnings per share - basic	$	0.43			0.55			(21.8	%)
Earnings per share - diluted		0.43			0.54			(20.4	%)

ADDITIONAL INCOME STATEMENT INFORMATION
Net interest income, as reported	$	100,283			93,784
Tax-equivalent adjustment (1)		1,162			956
Net interest income, tax-equivalent	$	101,445			94,740			7.1	%

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

First Bancorp and Subsidiaries

Financial Summary - page 3

	Three Months Ended September 30,						Nine Months Ended September 30,
PERFORMANCE RATIOS (annualized)	2011			2010			2011			2010
Return on average assets (1)		(0.09	%)		0.34	%		0.29	%		0.37	%
Return on average common equity (2)		(1.00	%)		3.89	%		3.38	%		4.30	%
Net interest margin – tax-equivalent (3)		4.79	%		4.30	%		4.77	%		4.27	%
Net charge-offs to average loans – non-covered		1.26	%		1.06	%		1.66	%		1.04	%

COMMON SHARE DATA
Cash dividends declared – common	$	0.08			0.08		$	0.24			0.24
Stated book value – common		17.08			17.04			17.08			17.04
Tangible book value – common		12.93			12.83			12.93			12.83
Common shares outstanding at end of period		16,884,617			16,785,750			16,884,617			16,785,750
Weighted average shares outstanding – basic		16,875,918			16,779,554			16,843,716			16,754,678
Weighted average shares outstanding – diluted		16,903,031			16,807,135			16,871,010			16,784,032

CAPITAL RATIOS
Tangible equity to tangible assets		8.72	%		8.52	%		8.72	%		8.52	%
Tangible common equity to tangible assets		6.75	%		6.55	%		6.75	%		6.55	%
Tier I leverage ratio		10.26	%		10.25	%		10.26	%		10.25	%
Tier I risk-based capital ratio		15.66	%		15.48	%		15.66	%		15.48	%
Total risk-based capital ratio		16.91	%		16.74	%		16.91	%		16.74	%

AVERAGE BALANCES ($ in thousands)
Total assets	$	3,293,758			3,272,161		$	3,322,562			3,343,223
Loans		2,441,486			2,529,356			2,471,804			2,577,640
Earning assets		2,808,205			2,894,660			2,841,021			2,966,424
Deposits		2,724,418			2,777,358			2,767,222			2,835,494
Interest-bearing liabilities		2,592,873			2,613,762			2,616,157			2,692,570
Shareholders’ equity		355,575			353,061			353,382			349,639

(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.

TREND INFORMATION

($ in thousands except per share data)	For the Three Months Ended
INCOME STATEMENT	September 30, 2011			June 30, 2011		March 31, 2011		December 31, 2010			September 30, 2010

Net interest income – tax-equivalent (1)	$	33,878			34,868		32,699		33,931			31,401
Taxable equivalent adjustment (1)		389			388		385		361			330
Net interest income		33,489			34,480		32,314		33,570			31,071
Provision for loan losses – non-covered		6,441			7,607		7,570		9,629			8,391
Provision for loan losses – covered		2,705			3,327		3,773		20,916			–
Noninterest income		3,486			5,114		14,193		14,918			3,957
Noninterest expense		23,958			22,913		25,043		22,008			20,711
Income (loss) before income taxes		3,871			5,747		10,121		(4,065	)		5,926
Income tax expense (benefit)		1,314			2,021		3,746		(1,820	)		2,078
Net income (loss)		2,557			3,726		6,375		(2,245	)		3,848
Preferred stock dividends		815			812		813		813			812
Accretion of preferred stock discount		2,474			229		229		214			215
Net income (loss) available to common shareholders		(732	)		2,685		5,333		(3,272	)		2,821

Earnings (loss) per common share – basic		(0.04	)		0.16		0.32		(0.19	)		0.17
Earnings (loss) per common share – diluted		(0.04	)		0.16		0.32		(0.19	)		0.17

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

First Bancorp and Subsidiaries

Financial Summary - page 4

CONSOLIDATED BALANCE SHEETS ($ in thousands)	At Sept. 30, 2011			At June 30, 2011			At Dec. 31, 2010			At Sept. 30, 2010			One Year Change
Assets
Cash and due from banks	$	75,772			73,676			56,821			51,812			46.2	%
Interest bearing deposits with banks		167,712			164,571			155,181			267,863			-37.4	%
Total cash and cash equivalents		243,484			238,247			212,002			319,675			-23.8	%

Investment securities		217,403			229,437			235,200			194,708			11.7	%
Presold mortgages		3,823			2,466			3,962			3,226			18.5	%

Loans – non-covered		2,058,724			2,040,714			2,083,004			2,096,439			-1.8	%
Loans – covered by FDIC loss share agreements		373,824			401,726			371,128			413,735			-9.6	%
Total loans		2,432,548			2,442,440			2,454,132			2,510,174			-3.1	%
Allowance for loan losses – non-covered		(34,397	)		(34,465	)		(38,275	)		(44,999	)		-23.6	%
Allowance for loan losses – covered		(3,257	)		(5,540	)		(11,155	)		−			n/m
Total allowance for loan losses		(37,654	)		(40,005	)		(49,430	)		(44,999	)		-16.3	%
Net loans		2,394,894			2,402,435			2,404,702			2,465,175			-2.9	%

Premises and equipment		69,862			68,898			67,741			54,039			29.3	%
FDIC loss share receivable		120,950			142,894			123,719			93,125			29.9	%
Intangible assets		69,958			70,184			70,358			70,577			-0.9	%
Other real estate owned – non-covered		32,673			31,849			21,081			17,475			87.0	%
Other real estate owned – covered		104,785			102,883			94,891			101,389			3.3	%
Other assets		44,866			44,456			45,276			40,948			9.6	%
Total assets	$	3,302,698			3,333,749			3,278,932			3,360,337			-1.7	%


Liabilities
Deposits:
Non-interest bearing demand	$	334,109			323,223			292,759			290,388			15.1	%
NOW accounts		376,999			371,693			292,623			370,654			1.7	%
Money market accounts		502,235			497,112			498,312			492,983			1.9	%
Savings accounts		146,977			145,576			153,325			154,955			-5.1	%
Brokered deposits		157,177			175,161			143,554			94,073			67.1	%
Internet time deposits		40,120			40,677			46,801			53,246			-24.7	%
Other time deposits > $100,000		567,347			567,722			602,371			641,970			-11.6	%
Other time deposits		604,440			626,254			622,768			653,213			-7.5	%
Total deposits		2,729,404			2,747,418			2,652,513			2,751,482			-0.8	%

Repurchase agreements		60,498			68,608			54,460			68,157			-11.2	%
Borrowings		135,759			138,796			196,870			158,907			-14.6	%
Other liabilities		25,224			26,629			30,486			30,836			-18.2	%
Total liabilities		2,950,885			2,981,451			2,934,329			3,009,382			-1.9	%

Shareholders’ equity
Preferred stock		63,500			65,000			65,000			65,000			-2.3	%
Discount on preferred stock		−			(2,474	)		(2,932	)		(3,146	)		-100.0	%
Common stock		100,926			100,549			99,615			99,303			1.6	%
Common stock warrants		4,592			4,592			4,592			4,592			0.0	%
Retained earnings		186,654			188,737			183,413			188,028			-0.7	%
Accumulated other comprehensive income (loss)		(3,859	)		(4,106	)		(5,085	)		(2,822	)		-36.7	%
Total shareholders’ equity		351,813			352,298			344,603			350,955			0.2	%
Total liabilities and shareholders’ equity	$	3,302,698			3,333,749			3,278,932			3,360,337			-1.7	%

First Bancorp and Subsidiaries

Financial Summary - page 5

	For the Three Months Ended
YIELD INFORMATION	September 30, 2011			June 30, 2011			March 31, 2011			December 31, 2010			September 30, 2010

Yield on loans		6.04	%		6.24	%		5.97	%		6.16	%		5.79	%
Yield on securities – tax-equivalent (1)		4.14	%		3.90	%		3.87	%		4.00	%		4.26	%
Yield on other earning assets		0.29	%		0.32	%		0.29	%		0.41	%		0.32	%
Yield on all interest earning assets		5.60	%		5.77	%		5.54	%		5.75	%		5.36	%

Rate on interest bearing deposits		0.85	%		0.91	%		0.99	%		1.06	%		1.16	%
Rate on other interest bearing liabilities		1.22	%		1.25	%		1.24	%		1.30	%		1.52	%
Rate on all interest bearing liabilities		0.88	%		0.93	%		1.00	%		1.07	%		1.17	%
Total cost of funds		0.78	%		0.82	%		0.89	%		0.96	%		1.06	%

Net interest margin – tax-equivalent (2)		4.79	%		4.92	%		4.62	%		4.79	%		4.30	%

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.

	For the Three Months Ended
NET INTEREST INCOME PURCHASE ACCOUNTING ADJUSTMENTS	September 30, 2011			June 30, 2011			March 31, 2011			December 31, 2010			September 30, 2010
	Positive (negative) impact on net interest income

Interest income – reduced by premium amortization on loans	$	(116	)		(116	)		(105	)		(49	)		(49	)
Interest income – increased by accretion of loan discount (1)		3,339			4,014			2,515			3,233			1,231
Interest expense – reduced by premium amortization of deposits		96			130			53			–			296
Interest expense – reduced by premium amortization of borrowings		37			37			37			37			72
Impact on net interest income	$	3,356			4,065			2,500			3,221			1,550

(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


ASSET QUALITY DATA ($ in thousands)	Sept. 30, 2011			June 30, 2011			March 31, 2011			Dec. 31, 2010			Sept. 30, 2010

Non-covered nonperforming assets
Nonaccrual loans	$	75,013			71,570			69,250			62,326			80,318
Restructured loans		11,257			16,893			19,843			33,677			20,447
Accruing loans > 90 days past due		-			-			-			-			-
Total non-covered nonperforming loans		86,270			88,463			89,093			96,003			100,765
Other real estate		32,673			31,849			26,961			21,081			17,475
Total non-covered nonperforming assets	$	118,943			120,312			116,054			117,084			118,240

Covered nonperforming assets (1)
Nonaccrual loans (2)	$	36,536			37,057			56,862			58,466			75,116
Restructured loans		16,912			24,325			16,238			14,359			4,160
Accruing loans > 90 days past due		-			-			-			-			-
Total covered nonperforming loans		53,448			61,382			73,100			72,825			79,276
Other real estate		104,785			102,883			95,868			94,891			101,389
Total covered nonperforming assets	$	158,233			164,265			168,968			167,716			180,665

Total nonperforming assets	$	277,176			284,577			285,022			284,800			298,905
Asset Quality Ratios – All Assets
Net charge-offs to average loans - annualized		1.87	%		2.22	%		2.92	%		4.17	%		0.88	%
Nonperforming loans to total loans		5.74	%		6.14	%		6.52	%		6.88	%		7.17	%
Nonperforming assets to total assets		8.39	%		8.54	%		8.38	%		8.69	%		8.90	%
Allowance for loan losses to total loans		1.55	%		1.64	%		1.72	%		2.01	%		1.79	%

Asset Quality Ratios – Based on Non-covered Assets only
Net charge-offs to average non-covered loans - annualized		1.26	%		1.74	%		1.97	%		3.10	%		1.06	%
Non-covered nonperforming loans to non-covered loans		4.19	%		4.33	%		4.35	%		4.61	%		4.81	%
Non-covered nonperforming assets to total non-covered assets		4.21	%		4.25	%		4.05	%		4.16	%		4.16	%
Allowance for loan losses to non-covered loans		1.67	%		1.69	%		1.75	%		1.84	%		2.15	%

(1) Covered nonperforming assets consist of assets that are included in loss-share agreements with the FDIC. (2) At September 30, 2011, the contractual balance of the nonaccrual loans covered by the FDIC loss share agreements was $65.0 million.

FIRST BANCORP /NC/ - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - October 31, 2011

Attached files

FIRST BANCORP /NC/ Reports