Filed by: First Bancorp
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Century Bancorp, Inc.
Commission File No. 333-57112
THE FOLLOWING IS A PRESS RELEASE THAT WAS DISSEMINATED TO THE PUBLIC ON APRIL
23, 2001.
First Bancorp Reports First Quarter Earnings
Monday, April 23, 2001 (For Immediate Release)
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TROY, N.C. - First Bancorp (NASDAQ - FBNC), the parent company of First
Bank, announced earnings today of $3,224,000, or $0.36 per diluted share, for
the three months ended March 31, 2001 compared to earnings recorded in the first
quarter of 2000 of $3,238,000, or $0.36 per diluted share. The earnings for the
first quarter of 2001 represent a return on average assets of 1.41% and a return
on average equity of 11.73%.
The essentially flat earnings when comparing the first quarter of 2001
to the same quarter of 2000 are primarily a result of virtually unchanged net
interest income after provision for loan losses, with offsetting increases in
noninterest income and noninterest expenses. Net interest income for the first
quarter of 2001 was 5.5% less than the amount of net interest income recorded in
the fourth quarter of 2000. The company attributes the decrease in net interest
income on a consecutive quarter basis to the significant decrease in the
interest rate environment that occurred in the first quarter of 2001.
Noninterest income for the first quarter of 2001 increased 24.4% over
the amount recorded in the first quarter of 2000 primarily as a result of
increases in service charges on deposit accounts, growth in the company's
customer base, and higher fees from presold mortgages resulting from a higher
level of mortgage loan refinancings. Noninterest expenses for the first quarter
of 2001 increased 7.4% over the first quarter of 2000 as a result of the
company's growth.
The company's annualized net charge-off percentage remained low
amounting to 3 basis points for the quarter. Although the company's ratio of
nonperforming assets to total assets of 0.50% at March 31, 2001 is in line with
industry averages, it represents an increase from year ago and previous quarter
end ratios. The increase in the level of nonperforming assets is primarily
related to $2.4 million in loans to one borrower that were placed on nonaccrual
status during the first quarter as a result of liquidity problems being
experienced by the borrower. The loans related to this borrower are
collateralized by various pieces of real estate, the aggregate value of which
the company believes exceeds the outstanding loan balance.
During the first quarter of 2001, the company completed its acquisition
of four branch offices in Scotland and Robeson counties, with total deposits of
approximately $102 million and consumer loans of approximately $17 million. In
connection with this acquisition, the company recorded intangible assets of
approximately $14.4 million. The acquisition of these branches brought the
company's total assets to over $1 billion for the first time in the company's
history.
During the second quarter of 2001, the company expects to complete its
acquisition of Century Bancorp, Inc., a one branch institution with
approximately $105 million in assets located in Thomasville, North Carolina.
"I am pleased with the earnings being reported today," stated President
and CEO Jimmie Garner. "It is encouraging that the company was able to maintain
steady earnings despite the economic slowdown and significant changes in the
interest rate environment experienced in the first quarter."
"The last three months were also important strategically for the
company," noted Mr. Garner. "It marked the first full quarter of integrated
operations resulting from the First Savings Bancorp merger, as well as the
acquisition and computer conversion of the four purchased branch offices. I
would again like to welcome the new employees and customers of the acquired
branches to the First Bank family."
"I also look forward to joining forces soon with Jim Hudson, President
and CEO of Century Bancorp, and his team of dedicated employees that have
created such a high quality institution in Thomasville. We firmly believe we can
leverage each other's strengths to gain market share in this attractive market,"
added Mr. Garner.
Mr. Garner noted that, pursuant to the company's share repurchase
program announced in conjunction with the execution of the merger agreement with
Century Bancorp, Inc., the company repurchased 94,627 shares of its common
stock at an average repurchase price of $18.39 per share during the three months
ended March 31, 2001. Mr. Garner also noted that the share repurchase program
has been suspended due to the pending acquisition of Century Bancorp, Inc.
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The financial results discussed above reflect the effects of the
completion of the merger with First Savings Bancorp, Inc., which occurred on
September 14, 2000. The merger with First Savings Bancorp, Inc. was accounted
for as a pooling-of-interests, and therefore all results reported reflect the
combined results of First Bancorp and First Savings Bancorp, Inc.
On October 20, 2000, First Bancorp announced the signing of a
definitive merger agreement to acquire Century Bancorp, Inc. Century Bancorp is
the holding company for Home Savings, Inc., SSB, a one branch savings
institution located in Thomasville, NC, with total assets of $105 million. All
regulatory approvals have been received, and this transaction is expected to
close in the second quarter of 2001.
First Bancorp is a bank holding company based in Troy, North Carolina.
Its principal activity is the ownership and operation of First Bank, a
state-chartered bank that operates 43 branch offices in a fifteen county market
area centered in the central piedmont region of North Carolina. First Bancorp's
common stock is traded on the NASDAQ National Market under the symbol FBNC.
Broker contacts for market makers of First Bancorp's common stock include Legg
Mason (Paul Newton at 1-800-628-5770), Scott & Stringfellow, Inc. (Jeff O'Quinn
at 1-800-763-1893), Sterne, Agee, & Leach, Inc. (Sandy Park at 1-800-239-6921),
Trident Securities (Sadler Stukes at 1-800-340-6321), and Wachovia Securities,
Inc. (Kel Normann at 1-800-929-1019).
Please visit our website at www.firstbancorp.com. For additional
financial data, please see the attached Financial Summary. For additional
information, please contact:
Mr. James H. Garner
President & Chief Executive Officer
Telephone: (910) 576-6171
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.
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First Bancorp has filed a proxy statement/prospectus and other documents
concerning the acquisition of Century Bancorp, Inc. with the United States
Securities and Exchange Commission ("SEC") and the proxy statement/prospectus
has been mailed to Century's shareholders. These documents contain important
information and we urge Century shareholders to read the proxy
statement/prospectus and other documents filed with the SEC carefully. You can
obtain the documents free from the SEC's website, www.sec.gov. In addition,
you may obtain a copy for free from the Corporate Secretary of Century
Bancorp, Inc., 22 Winston Street, Thomasville, North Carolina 27360,
telephone (336) 475-4663.
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First Bancorp and Subsidiaries
Financial Summary
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Three Months Ended
--------------------------
March 31,
-------------------------- Percent
($ in thousands except per share data - unaudited) 2001 2000 Change
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INCOME STATEMENT
Interest income
Interest and fees on loans $ 16,422 14,171
Interest on investment securities 1,805 2,532
Other interest income 197 234
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Total interest income 18,424 16,937 8.8%
-------- --------
Interest expense
Interest on deposits 8,581 6,833
Interest on borrowings 524 710
-------- --------
Total interest expense 9,105 7,543 20.7%
-------- --------
Net interest income 9,319 9,394 (0.8%)
Provision for loan losses 220 310 (29.0%)
-------- --------
Net interest income after provision
for loan losses 9,099 9,084 0.2%
-------- --------
Noninterest income
Service charges on deposit accounts 908 746
Other service charges, commissions, and fees 580 507
Fees from presold mortgages 138 89
Commissions from credit insurance sales 152 145
Data processing fees 47 20
Other gains (losses) 37 (10)
-------- --------
Total noninterest income 1,862 1,497 24.4%
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Noninterest expenses
Personnel expense 3,405 3,189
Occupancy and equipment expense 775 678
Intangibles amortization 182 158
Other operating expenses 1,703 1,621
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Total noninterest expenses 6,065 5,646 7.4%
-------- --------
Income before income taxes 4,896 4,935 (0.8%)
Income taxes 1,672 1,697 (1.5%)
-------- --------
Net income $ 3,224 3,238 (0.4%)
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Effect of nonrecurring items, net of taxes (24) 6
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Net income, excluding nonrecurring items $ 3,200 3,244 (1.4%)
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ADDITIONAL INCOME STATEMENT INFORMATION
Intangibles amortization - net of tax benefit $ 151 135
======== ========
Tax equivalent net interest income
Net interest income, as recorded $ 9,319 9,394
Tax equivalent adjustment 143 151
-------- --------
Tax equivalent net interest income $ 9,462 9,545 (0.9%)
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First Bancorp and Subsidiaries
Financial Summary - page 2
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Three Months Ended
March 31,
---------------------------------- Percent
SHARE DATA 2001 2000 Change
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Earnings per share - basic, as reported $ 0.37 0.37 0.0%
Earnings per share - basic, excluding non-recurring items 0.36 0.37 -2.7%
Earnings per share - diluted, as reported 0.36 0.36 0.0%
Earnings per share - diluted, excluding non-recurring items 0.36 0.36 0.0%
Cash dividends declared 0.22 0.17 29.4%
Stated book value 12.66 12.15 4.2%
Tangible book value 10.50 11.57 -9.2%
Common shares outstanding at end of period 8,755,161 8,911,475
Weighted average shares outstanding - basic 8,774,877 8,865,941
Weighted average shares outstanding - diluted 8,987,252 9,098,387
SELECTED RATIOS
Return on average assets, as reported 1.41% 1.47%
Return on average assets, excluding non-recurring items 1.40% 1.47%
Return on average equity, as reported 11.73% 11.99%
Return on average equity, excluding non-recurring items 11.64% 12.01%
Net interest margin - tax equivalent 4.35% 4.56%
Efficiency ratio - tax equivalent, as reported 53.56% 51.13%
Efficiency ratio - tax equivalent, excluding non-recurring items 53.73% 51.09%
Shareholders' equity to assets 10.73% 11.78%
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TREND INFORMATION
($ in thousands except share data)
For the Three Months Ended
--------------------------
March 31, Dec. 31, Sept. 30, June 30, March 31, One Year
INCOME STATEMENT 2001 2000 2000 2000 2000 Change
---- ---- ---- ---- ---- ------
Net interest income - tax equivalent $ 9,462 10,014 9,841 9,889 9,545 (0.9%)
Taxable equivalent adjustment 143 149 146 148 151 (5.3%)
Net interest income 9,319 9,865 9,695 9,741 9,394 (0.8%)
Provision for loan losses - recurring in nature 220 240 285 350 310 (29.0%)
Noninterest income - recurring in nature 1,825 1,469 1,451 1,419 1,507 21.1%
Noninterest expense- recurring in nature 6,065 6,129 5,915 5,863 5,646 7.4%
Nonrecurring items, net(1) 37 811 (5,614) 88 (10) n/m
Income (loss) before income taxes 4,896 5,776 (668) 5,035 4,935 (0.8%)
Income taxes 1,672 2,033 255 1,751 1,697 (1.5%)
Net income (loss) 3,224 3,743 (923) 3,284 3,238 (0.4%)
Nonrecurring (income)/expense, net of taxes (24) (492) 4,065 (54) 6 n/m
Net income, excluding nonrecurring items 3,200 3,251 3,142 3,230 3,244 (1.4%)
Earnings (loss) per share - basic, as reported 0.37 0.42 (0.10) 0.37 0.37 0.0%)
Earnings per share - basic, excluding non-recurring items 0.36 0.37 0.35 0.36 0.37 (2.7%)
Earnings (loss) per share - diluted 0.36 0.41 (0.10) 0.36 0.36 (0.0%)
Earnings per share - diluted, excluding non-recurring items 0.36 0.36 0.35 0.35 0.36 (0.0%)
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(1) Includes gains and losses from securities sales, loan sales, fixed assets,
other real estate, and other nonrecurring items. The quarter ended September 30,
2000 also includes merger expenses totaling $3,188,000 and a provision for loan
losses entry for $420,000 to conform an acquired institution's credit risk
practices to those of First Bancorp.
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First Bancorp and Subsidiaries
Financial Summary - page 3
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March 31, Dec. 31, Sept. 30, June 30, March 31, One Year
PERIOD END BALANCES 2001 2000 2000 2000 2000 Change
---- ---- ---- ---- ---- ------
Assets $1,033,078 915,167 928,820 954,887 918,490 12.5%
Securities 110,441 117,521 107,299 157,692 162,820 (32.2%)
Loans 770,749 746,089 730,134 704,714 673,089 14.5%
Allowance for loan losses 8,386 7,893 7,773 7,143 6,908 21.4%
Intangible assets 18,910 4,630 4,788 4,946 5,104 270.5%
Deposits 887,813 770,379 769,008 752,787 731,392 21.4%
Borrowings 26,200 26,200 41,200 84,000 70,500 (62.8%)
Shareholders' equity 110,802 110,684 109,961 110,700 108,244 2.4%
For the Three Months Ended
--------------------------
March 31, Dec. 31, Sept. 30, June 30, March 31, One Year
YIELD INFORMATION 2001 2000 2000 2000 2000 Change (2)
---- ---- ---- ---- ---- ----------
Yield on loans 8.85% 9.03% 8.97% 8.85% 8.64% 21 bp
Yield on securities - tax equivalent 6.97% 6.82% 6.93% 6.43% 6.44% 53 bp
Yield on other earning assets 5.37% 7.38% 6.26% 6.63% 6.14% (77 bp)
Yield on all interest earning assets 8.54% 8.70% 8.57% 8.36% 8.16% 38 bp
Rate on interest bearing deposits 4.94% 4.95% 4.79% 4.41% 4.20% 74 bp
Rate on other interest bearing liabilities 6.45% 6.43% 7.17% 6.31% 5.62% 83 bp
Rate on all interest bearing liabilities 5.00% 5.00% 4.95% 4.57% 4.30% 70 bp
Interest rate spread - tax equivalent 3.54% 3.70% 3.62% 3.79% 3.86% (32 bp)
Net interest margin - tax equivalent (1) 4.35% 4.54% 4.41% 4.56% 4.56% (21 bp)
Average prime rate 8.64% 9.50% 9.50% 9.25% 8.69% (5 bp)
(1) Calculated by dividing annualized tax equivalent net interest income by
average earning assets for the period.
(2) Expressed in terms of change in basis points from previous year.
March 31, Dec. 31, Sept. 30, June 30, March 31, One Year
2001 2000 2000 2000 2000 Change
---- ---- ---- ---- ---- ------
ASSET QUALITY DATA
Nonaccrual loans $3,598 626 992 738 1,199 200.1%
Restructured loans 231 237 243 249 252 (8.3%)
------ ----- ----- ----- -----
Total nonperforming loans 3,829 863 1,235 987 1,451 163.9%
Other real estate 1,324 893 738 767 997 32.8%
------ ----- ----- ----- -----
Total nonperforming assets $5,153 1,756 1,973 1,754 2,448 110.5%
====== ===== ===== ===== =====
Net charge-offs to average loans - annualized 0.03% 0.06% 0.04% 0.07% 0.05% (2 bp*)
Nonperforming loans to total loans 0.50% 0.12% 0.17% 0.14% 0.22% 28 bp*
Nonperforming assets to total assets 0.50% 0.19% 0.21% 0.18% 0.27% 23 bp*
Allowance for loan losses to total loans 1.09% 1.06% 1.06% 1.01% 1.03% 6 bp*
* Expressed in terms of change in basis points from previous year.
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