Exhibit 99.(a)
First Bancorp Reports Increased Quarterly Earnings and Record Annual Earnings
TROY, N.C., Jan. 22 /PRNewswire-FirstCall/ -- First Bancorp
(Nasdaq: FBNC), the parent company of First Bank, announced fourth quarter net
income today of $4,857,000, or $0.51 per diluted share, a 9.9% increase in net
income and a 6.3% increase in diluted earnings per share over the net income
of $4,419,000, or $0.48 per diluted share, recorded in the fourth quarter of
2002.
Net income for the year ended December 31, 2003 amounted to $19,417,000,
or $2.03 per diluted share, a 12.7% increase in net income and a 9.7% increase
in diluted earnings per share over the net income of $17,230,000, or $1.85 per
diluted share, reported for the twelve months ended December 31, 2002. The
net income and diluted earnings per share amounts reported for the year ended
December 31, 2003 are both records for the company.
Key performance ratios for the year ended December 31, 2003 include:
* Return on average assets of 1.45%
* Return on average equity of 14.14%
* Net charge-offs to average loans of 0.10%
* Net interest margin of 4.52%
* Nonperforming assets to total assets at year end of 0.39%
* Efficiency ratio of 53.32%
Total assets at December 31, 2003 amounted to $1.48 billion, 21.1% higher
than a year earlier. Total loans at December 31, 2003 amounted to $1.22
billion, a 22.1% increase from a year earlier, and total deposits amounted to
$1.25 billion at December 31, 2003, an 18.3% increase from a year earlier.
The Company's January 15, 2003 acquisition of Carolina Community Bancshares,
Inc. (CCB), Dillon County, SC and the Company's acquisition of four RBC
Centura Bank branches on October 27, 2003 contributed to the year-over-year
increases. As of the respective acquisition dates, CCB had total assets of
$70 million, with loans of $48 million and deposits of $59 million, while the
four RBC Centura Bank branches had $25 million in loans and $102 million in
deposits.
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 quarterly
and annual periods in 2003 to the comparable periods in 2002. Net interest
income for the fourth quarter of 2003 amounted to $14.7 million, a 15.3%
increase over the $12.8 million recorded in the fourth quarter of 2002. Net
interest income for the year ended December 31, 2003 amounted to $55.8
million, a 12.9% increase over the $49.4 million recorded in 2002.
The positive impact on net interest income from the increases in loans and
deposits more than offset slightly lower net interest margins realized in 2003
compared to 2002. The Company's net interest margin (tax-equivalent net
interest income divided by average earning assets) for the fourth quarter of
2003 was 4.44% compared to 4.53% for the fourth quarter of 2002. For the year
ended December 31, 2003, the Company's net interest margin was 4.52% compared
to the 4.58% net interest margin realized for 2002. The slight decreases in
net interest margins in 2003 were caused primarily by the negative impact of
the interest rate cuts initiated by the Federal Reserve in the fourth quarter
of 2002 and the second quarter of 2003. The acquisition of the four RBC
Centura Bank branches in October 2003 also negatively impacted the Company's
net interest margin as a result of the high mix of cash assumed in the
acquisition.
Partially offsetting the increases in net interest income realized in the
three and twelve months ended December 31, 2003 compared to 2002 were higher
amounts of provisions for loan losses recorded by the Company. The provision
for loan losses in the fourth quarter of 2003 was $925,000 compared to
$755,000 in the fourth quarter of 2002, and the provision for loan losses for
the calendar year 2003 was $2,680,000 compared to $2,545,000 in 2002. The
higher provisions for loan losses were necessary due to very high loan growth
realized by the Company in 2003 and not because of credit quality concerns.
Internally generated net loan growth (excludes loans assumed in acquisitions
for which an allowance had already been established) for the fourth quarter of
2003 was $51 million (equates to annualized growth of 17.9%) compared to $13
million in the fourth quarter of 2002 (annualized growth of 5.1%). Internally
generated net loan growth for the year ended December 31, 2003 totaled $148
million (a growth rate of 14.8%) compared to $105 million in 2002 (an 11.8%
growth rate).
Most components of noninterest income and noninterest expense also
increased in 2003 as a result of the Company's overall growth. Noninterest
income for the fourth quarter of 2003 and the full year of 2003 were also
positively impacted by 1) the acquisition of Uwharrie Insurance Group, a
property and casualty insurance company, on January 2, 2003, which has
increased commissions from financial product sales, and 2) securities gains.
While down for the fourth quarter due to the recent increase in mortgage
interest rates, high mortgage loan refinancing activity resulted in increased
fees from presold mortgages for the year ended December 31, 2003 compared to
2002.
The Company's asset quality ratios remained sound in 2003. For the three
and twelve months ended December 31, 2003, net charge-offs as a percentage of
average loans amounted to 13 basis points (annualized) and 10 basis points,
respectively, compared to 17 basis points (annualized) and 11 basis points for
each of the comparable periods in 2002. The Company's nonperforming assets to
total assets ratio of 0.39% at December 31, 2003 is slightly higher than the
same ratio of 0.36% a year earlier, but remains significantly lower than a
September 30, 2003 North Carolina state bank average of 0.59%.
James H. Garner, President and CEO of First Bancorp, commented on today's
earnings report, "I am pleased with the Company's performance in 2003,
especially in light of the weak economy and the challenging interest rate
environment. The Company's earnings per share growth was solid and asset
quality remained sound."
Mr. Garner continued, "While working hard to ensure good earnings in 2003,
the Company also made several strategic moves that I believe will contribute
to the future success of the Company. During 2003, the Company completed two
acquisitions that brought a total of seven additional branches to the Company,
all in new markets. The Company also opened two de novo bank branches in 2003,
as well as acquired a property and casualty insurance agency that has been a
good source of fee income for the Company."
"I would like to congratulate and thank all of my fellow employees for
another terrific year," Mr. Garner concluded.
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
completed the acquisition of four RBC Centura branches, located in
Wallace, Kenansville, Fairmont, and Harmony, all in North Carolina.
The branches had a total of approximately $102 million in deposits and
$25 million in loans as of the date of acquisition. The Company
recorded intangible assets of $14.2 million in connection with the
acquisition, including $12.9 million of goodwill.
- During the fourth quarter of 2003, the Company opened two new branches,
located in Mayodan and Sanford, North Carolina. Mayodan is located in
Rockingham County, which is north of Greensboro, and is First Bank's
first office in the county. Sanford is located in Lee County, and this
branch joined First Bank's existing two branches in Sanford and the
branch in Broadway in serving the citizens of Lee County.
- The Company held a ground-breaking on November 14, 2003 for a new
building being constructed in Wytheville, Virginia. 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.
- On January 20, 2004, the Company opened a new branch in Abingdon,
Virginia. Abingdon is located approximately 40 miles southwest of
Wytheville, Virginia. The branch is located at 102 Wall Street.
- On December 16, 2003, the Company announced a quarterly dividend of 24
cents per share payable on January 23, 2004 to shareholders of record
on December 31, 2003. The 24 cent rate represents an increase over the
previous rate of 23 cents per share paid in the fourth quarter of 2002.
- On December 19, 2003, the Company issued $20 million in debt structured
as trust preferred securities. Trust preferred securities are
includible as capital for regulatory purposes, and thus their issuance
has enhanced the Company's capital position. These securities have a
30 year maturity, but are callable by the Company after 5 years. The
Company now has a total of $40 million in debt structured as trust
preferred securities outstanding. These securities are included as
"borrowings" in the accompanying financial schedules.
- During the fourth quarter of 2003, the Company did not repurchase any
shares of its own stock. For the year ended December 31, 2003, the
Company repurchased 209,380 shares of its 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 $1.5 billion. Its principal activity is the
ownership and operation of First Bank, a state-chartered community bank that
operates 58 branch offices, with 53 branches operating in a sixteen county
market area in the central piedmont region of North Carolina, 3 branches in
Dillon County, South Carolina, and 2 branches in Virginia (Wytheville and
Abingdon) where First Bank does business as First Bank of Virginia. First
Bancorp's common stock is traded on the NASDAQ National Market under the
symbol FBNC.
Please visit our website at www.firstbancorp.com . For additional
financial data, please see the attached Financial Summary.
This press release contains statements that could be deemed
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995,
which statements are inherently subject to risks and uncertainties.
Forward-looking statements are statements that include projections,
predictions, expectations or beliefs about future events or results or
otherwise are not statements of historical fact. Such statements are often
characterized by the use of qualifying words (and their derivatives) such as
"expect," "believe," "estimate," "plan," "project," or other statements
concerning opinions or judgments of the Company and its management about
future events. Factors that could influence the accuracy of such
forward-looking statements include, but are not limited to, the financial
success or changing strategies of the Company's customers, the Company's level
of success in integrating acquisitions, actions of government regulators, the
level of market interest rates, and general economic conditions.
First Bancorp and Subsidiaries
Financial Summary
Three Months Twelve Months
Ended Ended
($ in thousands except December 31, Percent December 31, Percent
per share data - unaudited) 2003 2002 Change 2003 2002 Change
INCOME STATEMENT
Interest income
Interest and fees
on loans $17,764 16,732 $69,318 66,742
Interest on investment
securities 1,282 1,156 4,570 5,688
Other interest income 128 233 779 831
Total interest income 19,174 18,121 5.8% 74,667 73,261 1.9%
Interest expense
Interest on deposits 3,978 5,006 17,108 22,789
Interest on borrowings 493 364 1,799 1,082
Total interest expense 4,471 5,370 -16.7% 18,907 23,871 -20.8%
Net interest income 14,703 12,751 15.3% 55,760 49,390 12.9%
Provision for loan losses 925 755 22.5% 2,680 2,545 5.3%
Net interest income
after provision for
loan losses 13,778 11,996 14.9% 53,080 46,845 13.3%
Noninterest income
Service charges on
deposit accounts 2,162 1,837 7,938 6,856
Other service charges,
commissions, and fees 634 578 2,710 2,336
Fees from presold
mortgages 409 574 2,327 1,713
Commissions from financial
product sales 348 106 1,304 738
Data processing fees 91 69 333 303
Securities gains 136 - 218 25
Other gains (losses) 1 17 88 (3)
Total noninterest income 3,781 3,181 18.9% 14,918 11,968 24.6%
Noninterest expenses
Personnel expense 5,854 4,594 22,137 18,467
Occupancy and equipment
expense 1,263 1,123 4,921 4,205
Intangibles amortization 87 7 224 31
Other operating expenses 2,887 2,639 10,682 9,598
Total noninterest
expenses 10,091 8,363 20.7% 37,964 32,301 17.5%
Income before income taxes 7,468 6,814 9.6% 30,034 26,512 13.3%
Income taxes 2,611 2,395 9.0% 10,617 9,282 14.4%
Net income $4,857 4,419 9.9% $19,417 17,230 12.7%
Earnings per share - basic $ 0.52 0.48 8.3% $ 2.07 1.89 9.5%
Earnings per share
- diluted 0.51 0.48 6.3% 2.03 1.85 9.7%
ADDITIONAL INCOME STATEMENT
INFORMATION
Net interest income,
as reported $14,703 12,751 $55,760 49,390
Tax-equivalent
adjustment(A) 125 131 519 535
Net interest income,
tax-equivalent $14,828 12,882 15.1% $56,279 49,925 12.7%
(A) 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.
Three Months Twelve Months
Ended Ended
PERFORMANCE RATIOS December 31, Percent December 31, Percent
(annualized) 2003 2002 Change 2003 2002 Change
Return on
average
assets 1.35% 1.47% 1.45% 1.48%
Return on
average equity 13.61% 14.13% 14.14% 14.25%
Net interest
margin - tax
equivalent (A) 4.44% 4.53% 4.52% 4.58%
Efficiency ratio
- tax
equivalent (A)(B) 54.23% 52.06% 53.32% 52.19%
Net charge-offs
to average loans 0.13% 0.17% 0.10% 0.11%
Nonperforming
assets to total
assets
(period end) 0.39% 0.36% 0.39% 0.36%
SHARE DATA
Cash dividends
declared $0.24 0.23 4.3% $0.94 0.90 4.4%
Stated book
value 15.03 13.59 10.6% 15.03 13.59 10.6%
Tangible book
value 9.66 10.83 -10.8% 9.66 10.83 -10.8%
Common shares
outstanding
at end of
period 9,435,294 9,121,630 9,435,294 9,121,630
Weighted
average
shares
outstanding
- basic 9,407,513 9,120,888 9,384,314 9,138,750
Weighted
average
shares
outstanding -
diluted 9,601,393 9,287,634 9,567,404 9,320,721
Shareholders'
equity to
assets 9.61% 10.18% 9.61% 10.18%
AVERAGE BALANCES
(in thousands)
Total assets $1,431,031 1,195,930 19.7% $1,339,823 1,162,708 15.2%
Loans 1,188,045 990,489 19.9% 1,113,426 954,885 16.6%
Earning assets 1,324,635 1,128,763 17.4% 1,245,679 1,090,666 14.2%
Deposits 1,221,215 1,039,880 17.4% 1,153,385 1,010,693 14.1%
Interest-
bearing
liabilities 1,136,788 955,950 18.9% 1,065,949 928,686 14.8%
Shareholders'
equity 141,629 124,081 14.1% 137,293 120,943 13.5%
(A) See footnote A on page 1 of Financial Summary for discussion of
tax-equivalent adjustments.
(B) Calculated by dividing noninterest expense by the sum of
tax-equivalent net interest income plus noninterest income.
TREND INFORMATION
($ in thousands except per share data)
For the Three Months Ended
Dec. Sept. June March Dec. One
31, 30, 30, 31, 31, Year
INCOME STATEMENT 2003 2003 2003 2003 2002 Change
Net interest income
- tax equivalent (A) $14,828 14,160 13,807 13,483 12,882 15.1%
Taxable equivalent
adjustment 125 119 133 141 131 -4.6%
Net interest income 14,703 14,041 13,674 13,342 12,751 15.3%
Provision for loan
losses 925 695 540 520 755 22.5%
Noninterest income 3,781 3,802 3,602 3,733 3,181 18.9%
Noninterest expense 10,091 9,273 9,352 9,248 8,363 20.7%
Income before income
taxes 7,468 7,875 7,384 7,307 6,814 9.6%
Income taxes 2,611 2,819 2,573 2,614 2,395 9.0%
Net income 4,857 5,056 4,811 4,693 4,419 9.9%
Earnings per share
- basic 0.52 0.54 0.51 0.50 0.48 8.3%
Earnings per share
- diluted 0.51 0.53 0.50 0.49 0.48 6.3%
(A) See footnote A on page 1 of Financial Summary for discussion of
tax-equivalent adjustments.
PERIOD END
BALANCES One
(in thousands) Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, Year
2003 2003 2003 2003 2002 Change
Assets $1,475,769 $1,357,222 1,325,803 1,323,647 1,218,146 21.1%
Securities 117,661 103,825 91,869 95,814 80,769 45.7%
Loans 1,218,895 1,142,900 1,107,997 1,071,432 998,547 22.1%
Allowance for
loan losses 13,569 12,700 12,243 11,898 10,907 24.4%
Intangible
assets 50,701 36,623 36,667 36,426 25,169 101.4%
Deposits 1,249,364 1,143,798 1,151,969 1,143,813 1,055,957 18.3%
Borrowings 76,000 66,000 31,000 36,000 30,000 153.3%
Shareholders'
equity 141,856 138,088 135,327 133,551 123,985 14.4%
For the Three Months Ended
YIELD One
INFORMATION Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, Year
2003 2003 2003 2003 2002 Change(B)
Yield on loans 5.93% 6.08% 6.36% 6.57% 6.70% -77 bp
Yield on securities
- tax equivalent 5.07% 5.06% 5.43% 5.84% 6.06% -99 bp
Yield on other
earning assets 1.92% 2.10% 2.00% 2.34% 1.71% 21 bp
Yield on all interest
earning assets 5.78% 5.93% 6.13% 6.33% 6.42% -64 bp
Rate on interest
bearing deposits 1.47% 1.57% 1.77% 1.90% 2.13% -66 bp
Rate on other
interest bearing
liabilities 3.24% 3.86% 5.08% 5.95% 5.88% -264 bp
Rate on all
interest bearing
liabilities 1.56% 1.66% 1.87% 2.03% 2.23% -67 bp
Interest rate
spread - tax
equivalent 4.22% 4.27% 4.26% 4.30% 4.19% 3 bp
Net interest
margin - tax
equivalent (A) 4.44% 4.52% 4.53% 4.59% 4.53% -9 bp
Average prime
rate 4.00% 4.00% 4.23% 4.25% 4.45% -45 bp
(A) Calculated by dividing annualized tax equivalent net interest income
by average earning assets for the period. See footnote A on page 1 of
Financial Summary for discussion of tax-equivalent adjustments.
(B) Expressed in terms of change in basis points from previous year.
ASSET QUALITY DATA
($ in thousands) Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, One Year
2003 2003 2003 2003 2002 Change
Nonaccrual loans $4,274 4,343 3,741 2,941 2,976 43.6%
Restructured loans 21 21 22 38 41 -48.8%
Accruing loans
> 90 days
past due - - - - - -
Total non-
performing
loans 4,295 4,364 3,763 2,979 3,017 42.4%
Other real estate 1,398 929 1,174 1,326 1,384 1.0%
Total non-
performing
assets $5,693 5,293 4,937 4,305 4,401 29.4%
Net charge-offs
to average loans
- annualized 0.13% 0.08% 0.07% 0.11% 0.17% -4 bp*
Nonperforming
loans to total
loans 0.35% 0.38% 0.34% 0.28% 0.30% 5 bp*
Nonperforming
assets to total
assets 0.39% 0.39% 0.37% 0.33% 0.36% 3 bp*
Allowance for
loan losses to
total loans 1.11% 1.11% 1.10% 1.11% 1.09% 2 bp*
* Expressed in terms of change in basis points from previous year.
SOURCE First Bancorp
-0- 01/22/2004
/CONTACT: James H. Garner of First Bancorp, +1-910-576-6171 /
/Web site: http://www.firstbancorp.com /
(FBNC)
CO: First Bancorp
ST: North Carolina
IN: FIN
SU: ERN