Exhibit 99(a)
First Bancorp Reports Record Quarterly Earnings
TROY, N.C., Oct. 23 /PRNewswire-FirstCall/ -- First Bancorp
(Nasdaq: FBNC), the parent company of First Bank, announced third quarter net
income today of $5,056,000, or $0.53 per diluted share, both amounts which are
records for the company. The reported diluted earnings per share of $0.53 are
a 6.0% increase over the $0.50 diluted earnings per share reported by the
company in both the second quarter of 2003 and the third quarter of 2002.
Annualized key performance ratios for the quarter ended September 30, 2003
include:
* Return on average assets of 1.50%
* Return on average equity of 14.57%
* Net charge-offs to average loans of 0.08%
* Net interest margin of 4.52%
* Nonperforming assets to total assets at quarter end of 0.39%
* Efficiency ratio of 51.63%
Net income for the nine months ended September 30, 2003 amounted to
$14,560,000, or $1.52 per diluted share, a 10.9% increase in diluted earnings
per share over the net income of $12,811,000, or $1.37 per diluted share,
reported for the nine months ended September 30, 2002.
Total assets at September 30, 2003 amounted to $1.36 billion, 16.1% higher
than a year earlier. Total loans at September 30, 2003 amounted to
$1.14 billion, a 16.3% increase from a year earlier, and total deposits
amounted to $1.14 billion at September 30, 2003, a 12.7% increase from a year
earlier. The Company's January 15, 2003 acquisition of Carolina Community
Bancshares, Inc. (CCB), Dillon County, SC, contributed to the year-over-year
increases. As of the acquisition date, CCB had total assets of $70.2 million,
with loans of $47.7 million and deposits of $58.7 million.
The increase in loans and deposits over the past twelve months resulted in
an increase in the Company's net interest income when comparing the three and
nine month periods in 2003 to the comparable periods in 2002. Net interest
income for the third quarter of 2003 amounted to $14.0 million, a 7.9%
increase over the $13.0 million recorded in the third quarter of 2002. Net
interest income for the nine months ended September 30, 2003 amounted to
$41.1 million, a 12.1% increase over the $36.6 million recorded in the same
nine month period in 2002.
The positive impact on net interest income of the increases in loans and
deposits more than offset slightly lower net interest margins realized in 2003
compared to 2002. The Company's 4.52% net interest margin (tax-equivalent net
interest income divided by average earning assets) for the third quarter of
2003 was within 7 basis points of the net interest margin recorded in each of
the three preceding quarters, but was less than the 4.78% net interest margin
recorded in the third quarter of 2002. The decrease in the net interest
margin was caused primarily by the negative impact of the interest rate cuts
initiated by the Federal Reserve subsequent to September 30, 2002. The
Company's net interest margin for the nine months ended September 30, 2003 and
2002 did not vary significantly, amounting to 4.54% and 4.59%, respectively.
Most components of noninterest income and noninterest expense have
increased in 2003 as a result of the Company's overall growth. Noninterest
income has also been positively affected by 1) increased mortgage loan
refinancing activity that has increased mortgage origination fees, and 2) the
acquisition of Uwharrie Insurance Group, a property and casualty insurance
company, on January 2, 2003 that has increased commissions from financial
product sales.
The Company's asset quality ratios have remained sound in 2003. For the
three and nine months ended September 30, 2003, annualized net charge-offs as
a percentage of average loans amounted to 8 basis points and 9 basis points,
respectively, compared to 9 basis points for each of the comparable periods in
2002. The Company's nonperforming assets to total assets ratio of 0.39% at
September 30, 2003 is slightly higher than the same ratio of 0.37% a year
earlier, but remains significantly lower than a June 30, 2003 North Carolina
state bank average of 0.60%. While asset quality ratios have not varied
significantly, the Company recorded a higher provision for loan losses in the
third quarter of 2003 compared to 2002 ($695,000 vs. $575,000) as a result of
higher loan growth experienced during the quarter. The provision for loan
losses was approximately $1.8 million for each of the nine month periods ended
September 30, 2003 and 2002.
James H. Garner, President and CEO of First Bancorp, commented on today's
earnings report, "I am pleased to report these record quarterly earnings,
especially in light of the weak economy and the challenges to the Company's
net interest margin caused by the June 27, 2003 Federal Reserve interest rate
cut. We continue to focus on providing the best in community banking to our
customers, and I am pleased that our strong performance reflects those
efforts."
Mr. Garner also commented on the Company's pending acquisition of four
branches from RBC Centura with approximately $100 million in deposits, "In
August, we announced an agreement to acquire four RBC branches, located in
Fairmont, Harmony, Kenansville, and Wallace. I am pleased to report that we
plan to open these branches as branches of First Bank on Monday,
October 27, 2003. Let me extend an early welcome to the customers and
employees that will become part of our family," stated Mr. Garner. "I look
forward to our future together," Mr. Garner added.
Mr. Garner also noted the following corporate developments:
* As noted above and discussed in more detail in an August 14, 2003 press
release reporting the agreement, on October 27, 2003, the Company
expects to complete the acquisition of four RBC Centura branches,
located in Wallace, Kenansville, Fairmont, and Harmony, all in North
Carolina. The branches have a total of approximately $100 million in
deposits and $30 million in loans.
* During the fourth quarter of 2003, the Company plans to open two new
branches, located in Mayodan and Sanford. Mayodan is located in
Rockingham County, which is north of Greensboro, and will represent
First Bank's first office in the county. Sanford is located in Lee
County, and this branch will join First Bank's existing two branches in
Sanford and the branch in Broadway in serving the citizens of Lee
County.
* The Company is holding a ground-breaking for a new building being
constructed in Wytheville, Virginia on November 14, 2003. The existing
branch in Wytheville will be moving to the new location upon the
completion of the building, expected to be in the third quarter of 2004.
The new building will be located at the Wal-Mart shopping center on
Virginia Avenue. The Company entered Virginia in December 2001 with the
opening of the Wytheville branch.
* In January 2004, the Company expects to open a new branch in Abingdon,
Virginia. Abingdon is located approximately 40 miles southwest of
Wytheville, Virginia. The branch will be located at 102 Wall Street.
* On August 26, 2003, the Company announced a quarterly dividend increase
to 24 cents per share (from 23 cents per share) payable on
October 24, 2003 to shareholders of record on September 30, 2003.
* During the third quarter of 2003, the Company repurchased 8,666 shares
of its own common stock at an average price of $26.01 per share. For
the nine months ended September 30, 2003, the Company repurchased
209,380 shares of its own common stock at an average price of $24.83 per
share.
First Bancorp is a bank holding company based in Troy, North Carolina with
total assets of approximately $1.4 billion. Its principal activity is the
ownership and operation of First Bank, a state-chartered community bank that
operates 51 branch offices, with 47 branches operating in a sixteen county
market area in the central piedmont region of North Carolina, 3 branches in
Dillon County, South Carolina, and 1 branch in Wytheville, Virginia, where
First Bank does business as First Bank of Virginia. First Bancorp's common
stock is traded on the NASDAQ National Market under the symbol FBNC.
Please visit our website at www.firstbancorp.com. For additional
financial data, please see the attached Financial Summary.
This press release contains statements that could be deemed forward-
looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995,
which statements are inherently subject to risks and uncertainties. Forward-
looking statements are statements that include projections, predictions,
expectations or beliefs about future events or results or otherwise are not
statements of historical fact. Such statements are often characterized by the
use of qualifying words (and their derivatives) such as "expect," "believe,"
"estimate," "plan," "project," or other statements concerning opinions or
judgments of the Company and its management about future events. Factors that
could influence the accuracy of such forward-looking statements include, but
are not limited to, the financial success or changing strategies of the
Company's customers, the Company's level of success in integrating
acquisitions, actions of government regulators, the level of market interest
rates, and general economic conditions.
First Bancorp and Subsidiaries
Financial Summary
($ in thousands except per share data - unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
Percent Percent
2003 2002 Change 2003 2002 Change
INCOME STATEMENT
Interest income
Interest and fees
on loans $ 17,296 17,140 $ 51,554 50,010
Interest on investment
securities 1,053 1,408 3,288 4,532
Other interest income 123 122 651 598
Total interest
income 18,472 18,670 -1.1% 55,493 55,140 0.6%
Interest expense
Interest on
deposits 4,018 5,396 13,130 17,783
Interest on
borrowings 413 258 1,306 718
Total interest
expense 4,431 5,654 -21.6% 14,436 18,501 -22.0%
Net interest
income 14,041 13,016 7.9% 41,057 36,639 12.1%
Provision for loan
losses 695 575 20.9% 1,755 1,790 -2.0%
Net interest income
after provision
for loan losses 13,346 12,441 7.3% 39,302 34,849 12.8%
Noninterest income
Service charges on
deposit accounts 1,988 1,733 5,776 5,019
Other service charges,
commissions, and
fees 667 548 2,076 1,758
Fees from presold
mortgages 565 359 1,918 1,139
Commissions from
financial product
sales 361 189 956 632
Data processing fees 90 78 242 234
Securities gains 82 (2) 82 25
Other gains (losses) 49 (16) 87 (20)
Total noninterest
income 3,802 2,889 31.6% 11,137 8,787 26.7%
Noninterest expenses
Personnel expense 5,561 4,714 16,283 13,873
Occupancy and equipment
expense 1,231 1,063 3,658 3,082
Intangibles
amortization 46 8 137 24
Other operating
expenses 2,435 2,348 7,795 6,959
Total noninterest
expenses 9,273 8,133 14.0% 27,873 23,938 16.4%
Income before income
taxes 7,875 7,197 9.4% 22,566 19,698 14.6%
Income taxes 2,819 2,538 11.1% 8,006 6,887 16.2%
Net income $ 5,056 $ 4,659 8.5% $ 14,560 $ 12,811 13.7%
Earnings per share
- basic $ 0.54 0.51 5.9% $ 1.55 1.40 10.7%
Earnings per share
- diluted 0.53 0.50 6.0% 1.52 1.37 10.9%
ADDITIONAL INCOME STATEMENT INFORMATION
Net interest income,
as reported $ 14,041 13,016 $ 41,057 36,639
Tax-equivalent
adjustment (1) 119 127 393 404
Net interest income,
tax-equivalent $ 14,160 13,143 7.7% $ 41,450 37,043 11.9%
(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 35% tax rate and is
reduced by the related nondeductible portion of interest expense.
PERFORMANCE RATIOS (annualized)
Three Months Ended Nine Months Ended
September 30, September 30,
Percent Percent
2003 2002 Change 2003 2002 Change
Return on average
assets 1.50% 1.59% 1.49% 1.49%
Return on average
equity 14.57% 15.31% 14.33% 14.29%
Net interest margin
- tax
equivalent (1) 4.52% 4.78% 4.54% 4.59%
Efficiency ratio -
tax equivalent (1)
(2) 51.63% 50.73% 53.00% 52.23%
Net charge-offs to
average loans 0.08% 0.09% 0.09% 0.09%
Nonperforming assets
to total assets
(period end) 0.39% 0.37% 0.39% 0.37%
SHARE DATA
Cash dividends
declared $ 0.24 0.23 4.3% $ 0.70 0.67 4.5%
Stated book value 14.70 13.38 9.9% 14.70 13.38 9.9%
Tangible book
value 10.80 10.70 0.9% 10.80 10.70 0.9%
Common shares
outstanding at
end of period 9,394,301 9,126,019 9,394,301 9,126,019
Weighted average
shares outstanding
- basic 9,378,865 9,131,922 9,376,581 9,144,704
Weighted average
shares outstanding
- diluted 9,560,585 9,314,960 9,555,610 9,331,835
Shareholders'
equity to
assets 10.17% 10.45% 10.17% 10.45%
AVERAGE BALANCES (in thousands)
Total assets $1,334,177 1,163,122 14.7% $1,309,421 1,151,634 13.7%
Loans 1,127,947 979,489 15.2% 1,088,553 943,017 15.4%
Earning assets 1,243,195 1,091,119 13.9% 1,219,360 1,077,967 13.1%
Deposits 1,146,683 1,002,770 14.4% 1,130,775 1,000,964 13.0%
Interest-bearing
liabilities 1,057,358 928,672 13.9% 1,042,336 919,598 13.3%
Shareholders'
equity 137,655 120,731 14.0% 135,848 119,897 13.3%
(1) See footnote 1 on page 1 of Financial Summary for discussion of tax-
equivalent adjustments.
(2) Calculated by dividing noninterest expense by the sum of tax-
equivalent net interest income plus noninterest income.
TREND INFORMATION
($ in thousands except share data)
INCOME STATEMENT
For the Three Months Ended
Sept. 30, June 30, March 31, Dec. 31, Sept. 30, One Year
2003 2003 2003 2002 2002 Change
Net interest income
- tax equivalent
(1) $14,160 13,807 13,483 12,882 13,143 7.7%
Taxable equivalent
adjustment 119 133 141 131 127 -6.3%
Net interest
income 14,041 13,674 13,342 12,751 13,016 7.9%
Provision for loan
losses 695 540 520 755 575 20.9%
Noninterest income 3,802 3,602 3,733 3,181 2,889 31.6%
Noninterest
expense 9,273 9,352 9,248 8,363 8,133 14.0%
Income before income
taxes 7,875 7,384 7,307 6,814 7,197 9.4%
Income taxes 2,819 2,573 2,614 2,395 2,538 11.1%
Net income 5,056 4,811 4,693 4,419 4,659 8.5%
Earnings per share
- basic 0.54 0.51 0.50 0.48 0.51 5.9%
Earnings per share
- diluted 0.53 0.50 0.49 0.48 0.50 6.0%
(1) See footnote 1 on page 1 of Financial Summary for discussion of tax-
equivalent adjustments.
PERIOD END BALANCES (in thousands)
Sept. 30, June 30, March 31, Dec. 31, Sept. 30, One Year
2003 2003 2003 2002 2002 Change
Assets $1,357,222 1,325,803 1,323,647 1,218,146 1,168,875 16.1%
Securities 103,825 91,869 95,814 80,769 94,744 9.6%
Loans 1,142,900 1,107,997 1,071,432 998,547 983,045 16.3%
Allowance for
loan losses 12,700 12,243 11,898 10,907 10,524 20.7%
Intangible
assets 36,623 36,667 36,426 25,169 24,444 49.8%
Deposits 1,143,798 1,151,969 1,143,813 1,055,957 1,015,318 12.7%
Borrowings 66,000 31,000 36,000 30,000 23,000 187.0%
Shareholders'
equity 138,088 135,327 133,551 123,985 122,129 13.1%
YIELD INFORMATION
For the Three Months Ended
Sept. 30, June 30, March 31, Dec. 31, Sept. 30, One Year
2003 2003 2003 2002 2002 Change (2)
Yield on loans 6.08% 6.36% 6.57% 6.70% 6.94% -86 bp
Yield on securities
- tax equivalent 5.06% 5.43% 5.84% 6.06% 6.29% -123 bp
Yield on other
earning assets 2.10% 2.00% 2.34% 1.71% 3.25% -115 bp
Yield on all interest
earning assets 5.93% 6.13% 6.33% 6.42% 6.83% -90 bp
Rate on interest
bearing deposits 1.57% 1.77% 1.90% 2.13% 2.38% -81 bp
Rate on other
interest bearing
liabilities 3.86% 5.08% 5.95% 5.88% 3.60% 26 bp
Rate on all interest
bearing
liabilities 1.66% 1.87% 2.03% 2.23% 2.42% -76 bp
Interest rate spread
- tax equivalent 4.27% 4.26% 4.30% 4.19% 4.41% -14 bp
Net interest margin
- tax
equivalent (1) 4.52% 4.53% 4.59% 4.53% 4.78% -26 bp
Average prime rate 4.00% 4.23% 4.25% 4.45% 4.75% -75 bp
(1) Calculated by dividing annualized tax equivalent net interest income
by average earning assets for the period. See footnote 1 on page 1 of
Financial Summary for discussion of tax-equivalent adjustments.
(2) Expressed in terms of change in basis points from previous year.
ASSET QUALITY DATA ($ in thousands)
Sept. 30, June 30, March 31, Dec. 31, Sept. 30, One Year
2003 2003 2003 2002 2002 Change
Nonaccrual loans $4,343 3,741 2,941 2,976 3,009 44.3%
Restructured loans 21 22 38 41 73 -71.2%
Accruing loans > 90
days past due -- -- -- -- -- --
Total nonperforming
loans 4,364 3,763 2,979 3,017 3,082 41.6%
Other real estate 929 1,174 1,326 1,384 1,277 -27.3%
Total nonperforming
assets $5,293 4,937 4,305 4,401 4,359 21.4%
Net charge-offs to
average loans -
annualized 0.08% 0.07% 0.11% 0.17% 0.09% -1 bp*
Nonperforming loans
to total loans 0.38% 0.34% 0.28% 0.30% 0.31% 7 bp*
Nonperforming assets
to total assets 0.39% 0.37% 0.33% 0.36% 0.37% 2 bp*
Allowance for loan
losses to total
loans 1.11% 1.10% 1.11% 1.09% 1.07% 4 bp*
* Expressed in terms of change in basis points from previous year.
SOURCE First Bancorp
-0- 10/23/2003
/CONTACT: James H. Garner of First Bancorp, +1-910-576-6171/
/Web site: http://www.firstbancorp.com /
(FBNC)
CO: First Bancorp; First Bank
ST: North Carolina, South Carolina, Virginia
IN: FIN
SU: ERN