Filed by Great Pee Dee Bancorp, Inc.
pursuant to Rule 425
under the Securities Act
of 1933 and deemed filed
pursuant to Rule 14a-12
under the Securities
Exchange Act of 1934
Subject Company: Great Pee Dee Bancorp, Inc.
Commission File Number: 000-23521
News Release
First Bancorp to Acquire Great Pee Dee Bancorp, Inc.
Thursday, July 12, 2007 (For Immediate Release)
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Troy, North Carolina and Cheraw, South Carolina - First Bancorp (NASDAQ -
FBNC) and Great Pee Dee Bancorp, Inc. (NASDAQ - PEDE) ("Great Pee Dee") jointly
announce the signing of a definitive merger agreement providing for the merger
of Great Pee Dee into First Bancorp. The terms of the agreement call for
shareholders of Great Pee Dee to receive 1.15 shares of First Bancorp stock for
each share of Great Pee Dee stock they own. Based on Thursday's closing price of
First Bancorp's common stock of $18.28, the transaction represents a price of
$21.02 per share of Great Pee Dee's common stock and a total transaction value
of approximately $38.2 million. See the attached exhibit for additional merger
terms and estimated impact on First Bancorp book value and earnings per share.
First Bancorp is the holding company for First Bank, a community bank
headquartered in Troy, North Carolina with approximately $2.1 billion in total
assets. First Bank has 69 branches, with 62 branches operating in a twenty-one
county market area in the central piedmont and coastal regions of North
Carolina, three branches in Dillon County, South Carolina, and four branches in
Virginia (Abingdon, Dublin, Radford, and Wytheville), where First Bank does
business as First Bank of Virginia. The Company also has a loan production
office in Blacksburg, Virginia.
Great Pee Dee is the holding company for Sentry Bank and Trust, a
three-branch community bank headquartered in Cheraw, South Carolina, with two
branches in Cheraw and one branch in Florence, South Carolina. At March 31,
2007, Great Pee Dee had total assets of $219 million, total loans of $188
million, total deposits of $153 million, and total shareholders' equity of $27.3
million.
Jerry L. Ocheltree, President and CEO of First Bancorp, states, "We are
delighted to be joining with such a fine company that is so well respected in
its market area. Cheraw and Florence represent natural extensions of First
Bank's branch network and will help to solidify our presence in the I-95
corridor of South Carolina. We look forward to serving the customers of Sentry
Bank and Trust and providing them with additional products and services."
Mr. Ocheltree also noted that John S. Long, the current president of Great
Pee Dee, will remain with First Bancorp as an executive vice president, leading
First Bank's growth in the Cheraw and Florence markets and surrounding areas. "I
have known John now for several years and admire him as a banker and as a
person. I look forward to working with him, and I congratulate him, the Great
Pee Dee Board of Directors, and the employees of Sentry Bank and Trust for their
excellent company," stated Mr. Ocheltree.
Mr. Ocheltree added, "The additional capital that this transaction will
provide is important to First Bancorp. The high growth we have experienced in
recent years has reduced our capital levels to a point where we were beginning
to study the possibility of a common stock offering. The capital created by this
transaction will help to replenish our capital base and allow for continued
growth."
Mr. Long spoke on behalf of the employees and Board of Directors of Great
Pee Dee, "We are very pleased to be merging with First Bancorp. It is a
community-oriented institution which, much like Sentry Bank and Trust,
distinguishes itself with its focus on customer service. Our cultures are very
similar and therefore are a good fit for each other. We believe that by joining
with First Bank, we will be able to continue to focus on our customers, while
also providing benefits to our shareholders."
Mr. Ocheltree continued, "We don't take lightly the responsibility we have
to our customers. We know that Sentry Bank and Trust has served Cheraw and
surrounding markets well since 1935." Addressing the customers of Sentry Bank
and Trust, Mr. Ocheltree stated, "We will do everything we can to continue to
earn your business and loyalty. Like your bank, we have also been in business
since 1935, and we take great pride in providing the best in customer service.
Each of Sentry Bank's offices will remain open as branches of First Bank, so you
can expect to be served by the same friendly employees in the same friendly
manner. We'll be in close communication with you regarding the transition to
First Bank when the time nears, which we expect will be sometime this winter. "
The transaction is expected to be consummated late in the fourth quarter of
this year or early in the first quarter of 2008. The transaction is intended to
qualify as a tax-free reorganization, and is subject to regulatory approval and
approval by Great Pee Dee's shareholders.
This news release contains forward-looking statements, including statements
about future operating results and other forward-looking information for First
Bancorp and Great Pee Dee Bancorp, Inc. These statements constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. As such, the statements involve significant risks
and uncertainties. Actual results may differ materially due to such factors as:
(1) expected cost savings from the merger not materializing within the expected
time frame; (2) revenues following the merger not meeting expectations; (3)
failure to retain the customer bases of the two institutions following the
merger; (4) competitive pressures among financial institutions increasing
significantly; (5) costs or difficulties related to the integration of the
businesses of First Bancorp and Great Pee Dee Bancorp, Inc. being greater than
anticipated; (6) general economic conditions being less favorable than
anticipated; (7) legislation or regulatory changes adversely affecting the
business in which the combined company will be engaged; and (8) the timing of
the completion of the transactions.
First Bancorp will file a registration statement, a proxy
statement/prospectus and other relevant documents concerning the proposed
transaction with the Securities and Exchange Commission (the "SEC").
Shareholders are urged to read the registration statement and the proxy
statement/prospectus when it becomes available and any other relevant documents
filed with the SEC, as well as any amendments or supplements to those documents,
because they will contain important information. You will be able to obtain a
free copy of the joint proxy statement/prospectus, as well as other filings
containing information about First Bancorp and Great Pee Dee, at the SEC's
Internet site (http://www.sec.gov). Copies of the proxy statement/prospectus to
be filed by First Bancorp also can be obtained, when available and without
charge, by directing a request to First Bancorp, Attention: Anna Hollers,
Investor Relations, P.O. Box 508, Troy, North Carolina, 27371, (910) 576-6171,
or to Great Pee Dee Bancorp, Inc., Attention: John Digby, Chief Financial
Officer, 901 Chesterfield Highway, Cheraw, South Carolina 29520, (843) 537-7656.
Great Pee Dee, First Bancorp and their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies from
the shareholders of Great Pee Dee in connection with the acquisition.
Information about the directors and executive officers of Great Pee Dee and
their ownership of Great Pee Dee common stock is set forth in Great Pee Dee's
most recent proxy statement as filed with the SEC, which is available at the
SEC's Internet site (http://www.sec.gov) and at Great Pee Dee's address in the
preceding paragraph. Information about the directors and executive officers of
First Bancorp is set forth in First Bancorp's most recent proxy statement filed
with the SEC and available at the SEC's Internet site and from First Bancorp at
the address set forth in the preceding paragraph. Additional information
regarding the interests of these participants may be obtained by reading the
joint proxy statement/prospectus regarding the proposed transaction when it
becomes available.
Contacts: First Bancorp - Jerry L. Ocheltree - (910) 576-6171
Great Pee Dee Bancorp - John S. Long - (843) 537-7656
First Bancorp - Great Pee Dee Bancorp
Summary of Merger Transaction Terms*
Consideration = 100% stock-for-stock exchange
Exchange ratio = 1.15 shares of First Bancorp common stock for each share of
Great Pee Dee common stock
Structure = Tax-free reorganization. Merger of Great Pee Dee into First Bancorp.
Board of Directors = 1 director of Great Pee Dee to join First Bancorp Board of
Directors. Advisory board to be established with remaining Great Pee Dee
board members.
Stock price collar = The Great Pee Dee Board of Directors may elect to terminate
the transaction if the 20 day average price of First Bancorp common stock
during the measurement period (as defined in the merger agreement) is less
than $16.50 per share. If this occurs, First Bancorp can nullify the
termination by adding stock and/or cash in an amount that would equate to a
value of $18.975 per Great Pee Dee share ($16.50 x 1.15).
Pro-forma accretion to First Bancorp March 31, 2007 stated book value per share
= $0.88
Pro-forma accretion to First Bancorp March 31, 2007 tangible book value per
share = $0.33
Projected cost savings = $2.0 million (41% of Great Pee Dee noninterest expenses
reported for the twelve months ended March 31, 2007)
Projected Impact to First Bancorp's 2008 GAAP EPS Assuming Full Realization of
Cost Saves and No Leveraging of Excess Capital Generated in the Transaction
= $0.01 dilution (includes $0.03 per share positive impact of estimated
purchase accounting adjustments)
Pro-forma projected annual dividends per share to Great Pee Dee shareholders =
$0.87 (35.9% increase)
Financial Advisor to First Bancorp - Raymond James & Associates, Inc.
Financial Advisor to Great Pee Dee Bancorp - Howe Barnes Hoefer & Arnett, Inc.
Legal Counsel to First Bancorp - Robinson, Bradshaw & Hinson
Legal Counsel to Great Pee Dee Bancorp - Luse Gorman Pomerenk & Schick
* Please see the merger agreement to be filed on Form 8-K with the SEC by both
companies within four business days for the exact merger terms.