First Bancorp (FBNC) 8-K First Bancorp Reports Upward Revision to

FIRST 1 BANCORP

News Release

For Immediate Release:	For More Information,
March 3, 2006	Contact: James H. Garner
	910-576-6171

First Bancorp Reports Upward Revision to

Previously Announced 2005 Earnings

TROY, N.C. - First Bancorp (NASDAQ - FBNC), the parent company of First Bank, announced today an upward revision of $1,982,000, or $0.14 per diluted share, to its previously announced fourth quarter and full year 2005 earnings, caused by a change in the Company’s estimate of a contingency loss accrual resulting from an event that occurred subsequent to December 31, 2005 but prior to the issuance of the Company’s audited financial statements. As a result of this change, the Company now reports net income for the fourth quarter of 2005 of $7,413,000, or $0.52 per diluted share, and net income for the full year 2005 of $16,090,000, or $1.12 per diluted share. The Company previously reported fourth quarter 2005 net income of $5,431,000, or $0.38 per diluted share, and net income for the full year 2005 of $14,108,000, or $0.98 per diluted share.

As previously reported, since June 2005, the Company has been the subject of an income tax audit by the North Carolina Department of Revenue, which has indicated that they will challenge certain aspects of the Company’s operating structure involving a real estate investment trust (“REIT”) that resulted in a reduction in the Company’s state tax liability. In the third quarter of 2005, based on consultations with the Company’s external auditor and legal counsel, the Company determined that it should record a loss accrual of $6,320,000, or $0.44 per diluted share, to reserve for this issue.

In February 2006, the North Carolina Department of Revenue announced a “Settlement Initiative” that offers companies with certain transactions, including those with a REIT operating structure, the opportunity to resolve such matters with reduced penalties by agreeing to participate in the initiative by June 15, 2006. Although the Company continues to believe that its tax returns complied with the relevant statutes, the Board of Directors of the Company has tentatively decided that it is in the best interests of the Company to settle this matter by participating in the initiative. Based on the terms of the initiative, the Company estimates that its total liability to settle the matter will be approximately $4,338,000 (after-tax), or $0.30 per diluted share, or $1,982,000 less than the amount that was originally accrued. The aspects of the REIT structure that gave rise to this issue were discontinued effective January 1, 2005, and thus the Company does not believe it has any additional exposure related to this item beyond the amount of the accrual other than ongoing interest on the unpaid taxes amounting to $65,000 per quarter (after-tax).

Accordingly, because the February 2006 Settlement Initiative results in a change to the Company’s estimate of its loss and the change in estimate has occurred prior to the issuance of its 2005 audited financial statements, the relevant accounting standards require the Company to reflect the revised estimate in its audited 2005 financial statements. The primary effects of the change to the previously reported financial results for the fourth quarter and calendar year 2005 are a reduction to income tax expense by $1,982,000 and a corresponding increase in net income and shareholders’ equity.

The financial schedules originally included in the Company’s press release dated January 24, 2006 have been adjusted to reflect the revision and are included below.

First Bancorp is a bank holding company based in Troy, North Carolina with total assets of approximately $1.8 billion. Its principal activity is the ownership and operation of First Bank, a state-chartered community bank that operates 61 branch offices, with 55 branches operating in a nineteen county market area in the central piedmont region of North Carolina, 3 branches in Dillon County, South Carolina, and 3 branches in Virginia (Abingdon, Radford, and Wytheville), where First Bank does business as First Bank of Virginia. The Company also has loan production offices in Mooresville and Wilmington, North Carolina and Blacksburg, Virginia. First Bancorp’s common stock is traded on the NASDAQ National Market under the symbol FBNC.

Please visit our website at www.firstbancorp.com. For additional financial data, please see the attached Financial Summary.

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,” 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.

First Bancorp and Subsidiaries

Financial Summary - Revised

	Three Months Ended December 31,					Percent
($ in thousands except per share data - unaudited)	2005			2004		Change
INCOME STATEMENT
Interest income
Interest and fees on loans	$	25,766			20,577
Interest on investment securities		1,419			1,102
Other interest income		555			231
Total interest income		27,740			21,910		26.6	%
Interest expense
Interest on deposits		8,537			4,951
Other, primarily borrowings		1,256			842
Total interest expense		9,793			5,793		69.0	%
Net interest income		17,947			16,117		11.4	%
Provision for loan losses		925			825		12.1	%
Net interest income after provision
for loan losses		17,022			15,292		11.3	%
Noninterest income
Service charges on deposit accounts		2,204			2,185
Other service charges, commissions, and fees		1,013			862
Fees from presold mortgages		325			271
Commissions from financial product sales		310			323
Data processing fees		36			112
Securities gains		3			11
Other gains (losses)		(88	)		80
Total noninterest income		3,803			3,844		(1.1	%)
Noninterest expenses
Personnel expense		7,096			6,543
Occupancy and equipment expense		1,536			1,425
Intangibles amortization		73			94
Other operating expenses		3,470			3,209
Total noninterest expenses		12,175			11,271		8.0	%
Income before income taxes		8,650			7,865		10.0	%
Income taxes		1,237			2,554		(51.6	%)
Net income	$	7,413			5,311		39.6	%
Earnings per share - basic	$	0.52			0.38		36.8	%
Earnings per share - diluted		0.52			0.37		40.5	%
ADDITIONAL INCOME STATEMENT INFORMATION
Net interest income, as reported	$	17,947			16,117
Tax-equivalent adjustment (1)		113			116
Net interest income, tax-equivalent	$	18,060			16,233		11.3	%
(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 - Revised

	Twelve Months Ended December 31,					Percent
($ in thousands except per share data - unaudited)	2005			2004		Change
INCOME STATEMENT
Interest income
Interest and fees on loans	$	94,097			76,093
Interest on investment securities		5,660			4,956
Other interest income		1,672			544
Total interest income		101,429			81,593		24.3	%
Interest expense
Interest on deposits		28,516			17,226
Other, primarily borrowings		4,322			3,077
Total interest expense		32,838			20,303		61.7	%
Net interest income		68,591			61,290		11.9	%
Provision for loan losses		3,040			2,905		4.6	%
Net interest income after provision
for loan losses		65,551			58,385		12.3	%
Noninterest income
Service charges on deposit accounts		8,537			9,064
Other service charges, commissions, and fees		3,963			3,361
Fees from presold mortgages		1,176			969
Commissions from financial product sales		1,307			1,387
Data processing fees		279			416
Securities gains		5			299
Other gains (losses)		(263	)		349
Total noninterest income		15,004			15,845		(5.3	%)
Noninterest expenses
Personnel expense		27,975			25,604
Occupancy and equipment expense		6,002			5,710
Intangibles amortization		290			378
Other operating expenses		13,369			12,006
Total noninterest expenses		47,636			43,698		9.0	%
Income before income taxes		32,919			30,532		7.8	%
Income taxes		16,829			10,418		61.5	%
Net income	$	16,090			20,114		(20.0	%)
Earnings per share - basic	$	1.14			1.42		(19.7	%)
Earnings per share - diluted		1.12			1.40		(20.0	%)
ADDITIONAL INCOME STATEMENT INFORMATION
Net interest income, as reported	$	68,591			61,290
Tax-equivalent adjustment (1)		448			475
Net interest income, tax-equivalent	$	69,039			61,765		11.8	%
(1)See footnote 1 on page 1 of Financial Summary for discussion of tax-equivalent adjustments.

First Bancorp and Subsidiaries

Financial Summary - Page 3 - Revised

	Three Months Ended December 31,				Twelve Months Ended December 31,
	2005		2004		2005		2004
PERFORMANCE RATIOS (annualized)
Return on average assets		1.67%		1.31%		0.94%		1.30%
Return on average equity		19.03%		14.07%		10.39%		13.71%
Net interest margin - tax equivalent (1)		4.37%		4.32%		4.33%		4.31%
Efficiency ratio - tax equivalent (1) (2)		55.69%		56.14%		56.68%		56.30%
Net charge-offs to average loans		0.29%		0.14%		0.14%		0.14%
Nonperforming assets to total assets (period end)		0.17%		0.32%		0.17%		0.32%
SHARE DATA
Cash dividends declared	$	0.18		0.17	$	0.70		0.66
Stated book value		10.94		10.54		10.94		10.54
Tangible book value		7.48		7.04		7.48		7.04
Common shares outstanding at end of period		14,229,148		14,083,856		14,229,148		14,083,856
Weighted average shares outstanding - basic		14,212,387		14,064,422		14,165,992		14,138,513
Weighted average shares outstanding - diluted		14,385,115		14,361,437		14,360,032		14,395,152
Shareholders’ equity to assets		8.65%		9.06%		8.65%		9.06%
AVERAGE BALANCES (in thousands)
Total assets	$	1,759,279		1,608,146	$	1,709,380		1,545,332
Loans		1,463,468		1,352,589		1,422,419		1,295,682
Earning assets		1,639,823		1,495,139		1,593,554		1,434,425
Deposits		1,493,683		1,363,557		1,460,620		1,306,404
Interest-bearing liabilities		1,392,921		1,282,404		1,359,744		1,232,130
Shareholders’ equity		154,562		150,163		154,871		146,683
(1) See footnote 1 on page 1 of Financial Summary for discussion of tax-equivalent adjustments.
(2) 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, 2005		September 30, 2005			June 30, 2005		March 31, 2005		December 31, 2004
Net interest income - tax equivalent (1)	$	18,060		17,463			17,118		16,398		16,233
Taxable equivalent adjustment (1)		113		111			111		113		116
Net interest income		17,947		17,352			17,007		16,285		16,117
Provision for loan losses		925		690			845		580		825
Noninterest income		3,803		3,779			3,712		3,710		3,844
Noninterest expense		12,175		11,486			12,260		11,715		11,271
Income before income taxes		8,650		8,955			7,614		7,700		7,865
Income taxes		1,237		9,646			2,962		2,984		2,554
Net income		7,413		(691	)		4,652		4,716		5,311
Earnings (loss) per share - basic		0.52		(0.05	)		0.33		0.33		0.38
Earnings (loss) per share - diluted		0.52		(0.05	)		0.32		0.33		0.37
(1) See footnote 1 on page 1 of Financial Summary for discussion of tax-equivalent adjustments.

First Bancorp and Subsidiaries

Financial Summary - Page 4 - Revised

PERIOD END BALANCES (in thousands)	December 31, 2005		September 30, 2005		December 31, 2004		One Year Change
Assets	$	1,801,050		1,758,034		1,638,913		9.9	%
Securities		127,785		128,421		102,579		24.6	%
Loans		1,482,611		1,446,185		1,367,053		8.5	%
Allowance for loan losses		15,716		15,879		14,717		6.8	%
Intangible assets		49,227		49,300		49,330		(0.2	%)
Deposits		1,494,577		1,475,528		1,388,768		7.6	%
Borrowings		100,239		101,239		92,239		8.7	%
Shareholders’ equity		155,728		150,929		148,478		4.9	%

	For the Three Months Ended
YIELD INFORMATION	December 31, 2005		September 30, 2005		June 30, 2005		March 31, 2005		December 31, 2004
Yield on loans		6.99%		6.71%		6.47%		6.26%		6.05%
Yield on securities - tax equivalent (1)		4.82%		4.72%		5.06%		4.94%		4.72%
Yield on other earning assets		4.39%		3.84%		3.33%		2.80%		2.30%
Yield on all interest earning assets		6.74%		6.47%		6.25%		6.08%		5.86%
Rate on interest bearing deposits		2.61%		2.35%		2.09%		1.86%		1.65%
Rate on other interest bearing liabilities		5.30%		5.22%		5.27%		4.92%		3.87%
Rate on all interest bearing liabilities		2.79%		2.53%		2.27%		2.04%		1.80%
Interest rate spread - tax equivalent (1)		3.95%		3.94%		3.98%		4.04%		4.06%
Net interest margin - tax equivalent (2)		4.37%		4.32%		4.31%		4.33%		4.32%
Average prime rate		6.96%		6.42%		5.91%		5.44%		4.94%
(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.

ASSET QUALITY DATA ($ in thousands)	December 31, 2005		September 30, 2005		June 30, 2005		March 31, 2005		December 31, 2004
Nonaccrual loans	$	1,640		3,330		3,806		4,249		3,707
Restructured loans		13		14		15		15		17
Accruing loans > 90 days past due		-		-		-		-		-
Total nonperforming loans		1,653		3,344		3,821		4,264		3,724
Other real estate		1,421		2,023		2,520		2,401		1,470
Total nonperforming assets	$	3,074		5,367		6,341		6,665		5,194
Net charge-offs to average loans - annualized		0.29%		0.12%		0.08%		0.07%		0.14%
Nonperforming loans to total loans		0.11%		0.23%		0.27%		0.31%		0.27%
Nonperforming assets to total assets		0.17%		0.31%		0.36%		0.40%		0.32%
Allowance for loan losses to total loans		1.06%		1.10%		1.10%		1.08%		1.08%