Filed by: First Bancorp
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: First Bancorp
Commission File No. 0-15572
THE FOLLOWING IS A QUARTERLY SHAREHOLDER REPORT THAT WAS MAILED ON APRIL 24,
2000 TO FIRST BANCORP SHAREHOLDERS, AND OTHER PARTIES THAT HAVE ASKED TO HAVE
COMPANY COMMUNICATIONS MAILED TO THEM.
FIRST BANCORP
FIRST
QUARTER
REPORT
March 31, 2000
<PAGE>
PRESIDENT'S MESSAGE
Dear Shareholders and Friends,
The first quarter of 2000 was another strong quarter for First Bancorp.
Your company achieved significantly higher earnings than the first quarter of
1999, the net interest margin improved from the first quarter of 1999, and asset
quality remained strong. The return on average equity of 16.50% and the return
on average assets of 1.33% reflect the strong performance attained. Also,
another milestone was achieved in the first quarter with total deposits reaching
$500 million.
Net income for the three months ended March 31, 2000 was $1,842,000, a
24.8% increase over the $1,476,000 reported for the same three months of 1999.
These first quarter of 2000 earnings amounted to diluted earnings per share of
$0.40, a 25.0% increase over the diluted earnings per share of $0.32 reported in
the first quarter of 1999.
Strong growth in loans and deposits continues to be the driving force for
the increases in earnings. Over the past twelve months, loans have grown by
$74.2 million and deposits have grown by $61.3 million. This equates to twelve
month growth of 20.1% for loans and 13.9% for deposits. For the three months
ended March 31, 2000, loans grew by $23.4 million, or annualized growth of
22.5%, and deposits grew by $20.7 million, or annualized growth of 17.3%.
Also contributing to the 17.0% increase in net interest income was a higher
net interest margin. The Company's net interest margin of 5.03% for the first
quarter of 2000 was slightly higher than the 4.97% yield realized in the first
quarter of 1999. Noninterest income increased 5.7%, while noninterest expenses
increased 9.6% when comparing the first quarter of 2000 to the first quarter of
1999. The Company's effective tax rate decreased from 35.2% in the first quarter
of 1999 to 33.2% in the first quarter of 2000, primarily due to the favorable
state tax treatment realized by a subsidiary of the Company that was
incorporated in the second quarter of 1999.
The Company's asset quality ratios remained strong in the first quarter
with an annualized net charge-off to average loans percentage of 0.07% and a
nonperforming loans to total loans percentage of 0.15% at March 31, 2000.
I continue to look forward to our pending merger with First Savings
Bancorp, Inc. The more I see of this bank and its people, the more I am excited
about the business we're going to be able to do together. You may have read
about dissident shareholders who are trying to block this merger from happening.
Unfortunately, due to the stock markets' unfavorable treatment of bank stocks,
including First Bancorp, the overcapitalized status of First Savings, and the
fact that First Savings was already a very efficient organization with low
overhead, some of the traditional ratios referred to in bank mergers are not as
meaningful, and are leading some First Savings shareholders into believing that
they are not receiving fair value. I am confident that once the proxy statement
is mailed and closely examined that the merger will be approved.
Your company also continues to lay the foundation for future internal
growth via de novo branches. I would like to welcome the good folks of Pittsboro
and Salisbury to our newest branches that just recently opened in each of those
towns. In Pittsboro, our temporary branch is expected to be in use until late
summer, at which time we expect to open in a newly constructed building at the
same location. We look forward to serving the citizens of both towns. Look for
grand openings soon.
<PAGE>
Your board of directors recently announced that for the 14th straight year
the Company's dividend rate has been raised. The new quarterly rate of 13 cents
per share represents a 14.7% increase over the prior dividend rate. This
increased dividend payment is being distributed at the same time as this
quarterly report. To enroll in our dividend reinvestment plan, which offers a
convenient way to reinvest your dividends in shares of First Bancorp common
stock without paying brokerage commissions, please call our transfer agent,
Registrar and Transfer Company, at 1-800-368-5948, or Investor Relations,
Attention: Anna Hollers at First Bancorp at 1-800-548-9377.
Your support of our company as a customer of our products and services
helps us to achieve our financial success. We welcome your comments and
suggestions.
Sincerely,
James H. Garner
President and Chief Executive Officer
<PAGE>
================================================================================
First Bancorp and Subsidiaries
Financial Summary
================================================================================
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
Percent
($ in thousands except per share data - unaudited) 2000 1999 (2) Change
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCOME STATEMENT DATA
Net interest income, taxable equivalent basis $ 6,513 5,598 16.3%
Taxable equivalent adjustment 142 152 -6.6%
Net interest income 6,371 5,446 17.0%
Provision for loan losses 310 200 55.0%
Core noninterest income 1,392 1,303 6.8%
Non-core noninterest income (loss), net (1) (10) 5 -300.0%
Noninterest expense 4,685 4,275 9.6%
Income taxes 916 803 14.1%
Net income 1,842 1,476 24.8%
- -------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Earnings per share - basic $ 0.41 0.33 24.2%
Earnings per share - diluted 0.40 0.32 25.0%
Cash dividends declared 0.13 0.1133 14.7%
Stated book value 9.85 9.08 8.5%
Tangible book value 8.72 7.83 11.4%
Common shares outstanding at end of period 4,520,851 4,517,792
Weighted average shares outstanding - basic 4,537,300 4,523,076
Weighted average shares outstanding - diluted 4,612,265 4,629,944
- -------------------------------------------------------------------------------------------------------------------
PERIOD END BALANCES
Assets $ 591,155 505,862 16.9%
Securities 74,194 77,380 -4.1%
Loans 442,728 368,511 20.1%
Allowance for loan losses 6,313 5,671 11.3%
Intangible assets 5,104 5,684 -10.2%
Deposits 500,724 439,466 13.9%
Shareholders' equity 44,547 41,036 8.6%
- -------------------------------------------------------------------------------------------------------------------
AVERAGE DAILY BALANCES
Assets $ 554,775 488,851 13.5%
Loans 430,376 364,597 18.0%
Earning assets 519,142 457,237 13.5%
Deposits 486,053 439,958 10.5%
Shareholders' equity 44,788 41,255 8.6%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RATIOS
<S> <C> <C> <C>
Return on average assets 1.33% 1.22%
Return on average equity 16.50% 14.51%
Net interest margin - tax equivalent 5.03% 4.97%
Efficiency ratio - tax equivalent 59.34% 61.90%
Shareholders' equity to assets 7.54% 8.11%
- -------------------------------------------------------------------------------------------------------------------
ASSET QUALITY RATIOS
Net charge-offs to average loans - annualized 0.07% 0.04%
Nonperforming loans to total loans 0.15% 0.23%
Nonperforming assets to total assets 0.27% 0.27%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Non-core noninterest income includes gains and losses from securities sales,
loan sales, fixed assets, other real estate and other nonrecurring items.
(2) Share data for 1999 has been adjusted to reflect the 3-for-2 stock split
paid on September 13, 1999.
================================================================================
<PAGE>
First Bancorp and Subsidiaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>
March 31, December 31, March 31,
($ in thousands-unaudited) 2000 1999 1999
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Cash & due from banks, noninterest-bearing $ 18,201 23,055 15,525
Due from banks, interest-bearing 28,827 15,231 24,207
Federal funds sold 8,811 12,280 3,018
------------ ------------- ------------
Total cash and cash equivalents 55,839 50,566 42,750
------------ ------------- ------------
Securities available for sale (costs of $58,983,
$56,231, and $59,663) 57,114 54,290 59,482
Securities held to maturity (fair values of 16,878
$17,366, and $18,552) 17,080 17,518 17,898
Presold mortgages in process of settlement 661 1,121 1,879
Loans 442,728 419,163 368,511
Less: Allowance for loan losses (6,313) (6,078) (5,671)
------------ ------------- ------------
Net loans 436,415 413,085 362,840
------------ ------------- ------------
Premises and equipment 10,432 10,063 9,120
Accrued interest receivable 3,783 3,373 3,232
Intangible assets 5,104 5,261 5,684
Other 4,727 4,170 2,977
------------ ------------- ------------
Total assets $ 591,155 559,447 505,862
============= ============= ============
LIABILITIES
Deposits: Demand - noninterest-bearing $ 66,444 60,566 58,242
Savings, NOW, and money market 169,364 164,307 158,980
Time deposits of $100,000 or more 92,137 81,831 63,570
Other time deposits 172,779 173,319 158,674
------------ ------------- ------------
Total deposits 500,724 480,023 439,466
Short-term borrowings 40,000 30,000 20,000
Accrued interest payable 3,280 3,457 3,095
Other liabilities 2,604 2,025 2,265
------------ ------------- ------------
Total liabilities 546,608 515,505 464,826
------------ ------------- ------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHAREHOLDERS' EQUITY
Common stock, No par value per share
Issued and outstanding: 4,520,851,
4,551,641, and 4,517,792 shares 18,473 19,075 18,695
Retained earnings 27,306 26,051 22,450
Accumulated other comprehensive loss (1,232) (1,184) (109)
------------ ------------- ------------
Total shareholders' equity 44,547 43,942 41,036
------------ ------------- ------------
Total liabilities and shareholders' equity $ 591,155 559,447 505,862
============= ============= ============
</TABLE>
================================================================================
See notes to consolidated financial statements.
<PAGE>
First Bancorp and Subsidiaries
Consolidated Statements of Income
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
($ in thousands, except share data-unaudited) 2000 1999
- -------------------------------------------------------------------------------------
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 9,693 7,919
Interest on investment securities:
Taxable interest income 862 798
Tax-exempt interest income 214 237
Other, principally overnight investments 209 204
------------ -------------
Total interest income 10,978 9,158
------------ -------------
INTEREST EXPENSE
Savings, NOW and money market 839 793
Time deposits of $100,000 or more 1,234 885
Other time deposits 2,265 1,999
Short-term borrowings 269 35
------------ -------------
Total interest expense 4,607 3,712
------------ -------------
Net interest income 6,371 5,446
Provision for loan losses 310 200
------------ -------------
Net interest income after provision
for loan losses 6,061 5,246
------------ -------------
NONINTEREST INCOME
Service charges on deposit accounts 695 664
Other service charges, commissions and fees 446 371
Fees from presold mortgages 86 171
Commissions from insurance sales 145 87
Data processing fees 20 10
Securities gains - 5
Other gains (losses) (10) -
------------ -------------
Total noninterest income 1,382 1,308
------------ -------------
NONINTEREST EXPENSES
Salaries 2,141 1,866
Employee benefits 539 479
------------ -------------
Total personnel expense 2,680 2,345
Net occupancy expense 308 297
Equipment related expenses 289 255
Other operating expenses 1,408 1,378
------------ -------------
Total noninterest expenses 4,685 4,275
------------ -------------
Income before income taxes 2,758 2,279
Income taxes 916 803
------------ -------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
NET INCOME $ 1,842 1,476
============= =============
Earnings per share:
Basic 0.41 0.33
Diluted 0.40 0.32
Weighted average common shares outstanding:
Basic 4,537,300 4,523,076
Diluted 4,612,265 4,629,944
</TABLE>
================================================================================
See notes to consolidated financial statements.
<PAGE>
First Bancorp And Subsidiaries
Notes To Consolidated Financial Statements
(unaudited) For the Periods Ended March 31, 2000 and 1999
- --------------------------------------------------------------------------------
NOTE 1
The accompanying unaudited consolidated balance sheets and income statements
were prepared on a consistent basis with those contained in the Company's 1999
Annual Report on Form 10-K. Reference is made to the most recent Annual Report
on Form 10-K filed with the SEC for a full set of financial statements, as well
as a discussion of accounting policies and other relevant information with
respect to the financial statements. Reference is also made to the Company's
quarterly reporting contained on Form 10-Q filed with the SEC within 45 days
after each quarter end.
NOTE 2
The results of operations for the periods ended March 31, 2000 and 1999 are not
necessarily indicative of the results to be expected for the full year. Basic
earnings per share were computed by dividing net income by the weighted average
common shares outstanding. Diluted earnings per share includes the potentially
dilutive effects of the Company's 1994 Stock Option Plan. Share data for 1999,
including earnings per share, have been adjusted to reflect the 3-for-2 stock
split that was paid on September 13, 1999 to shareholders of record as of August
30, 1999.
NOTE 3
Certain amounts reported in the period ended March 31, 1999 have been
reclassified to conform with the presentation for March 31, 2000. These
reclassifications had no effect on net income or shareholders' equity for the
periods presented, nor did they materially impact trends in financial
information.
NOTE 4
Nonperforming assets are defined as nonaccrual loans, loans past due 90 or more
days and still accruing interest, restructured loans and other real estate. For
each of the periods presented, the Company had no loans past due 90 or more days
and still accruing interest. Nonperforming assets are summarized as follows:
<TABLE>
<CAPTION>
March 31, December 31, March 31,
($ in thousands) 2000 1999 1999
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nonperforming loans:
Nonaccrual loans $ 429 595 596
Restructured loans 252 257 258
---------- ---------- ---------
Total nonperforming loans 681 852 854
Other real estate 888 906 525
---------- ---------- ---------
Total nonperforming assets $ 1,569 1,758 1,379
========== ========== =========
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Nonperforming loans to total loans 0.15% 0.20% 0.23%
Nonperforming assets as a percentage of
loans and other real estate 0.35% 0.42% 0.37%
Nonperforming assets to total assets 0.27% 0.31% 0.27%
Allowance for loan losses to total loans 1.43% 1.45% 1.54%
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
First Bancorp and Subsidiaries
Trend Information
($ in thousands except share data)
<TABLE>
<CAPTION>
For the Three Months Ended
--------------------------
March 31, Dec. 31, Sept. 30, June 30, March 31, One Year
INCOME STATEMENT 2000 1999 1999 1999 (2) 1999 (2) Change
----------- ------------ ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net interest income - tax equivalent $ 6,513 6,347 6,221 5,892 5,598 16.3%
Taxable equivalent adjustment 142 130 143 149 152 -6.6%
Net interest income 6,371 6,217 6,078 5,743 5,446 17.0%
Provision for loan losses 310 245 205 260 200 55.0%
Core noninterest income 1,392 1,247 1,239 1,293 1,303 6.8%
Non-core noninterest income (loss), net (1) (10) 14 3 17 5 -300.0%
Noninterest expense 4,685 4,628 4,606 4,307 4,275 9.6%
Income before income taxes 2,758 2,605 2,509 2,486 2,279 21.0%
Income taxes 916 828 771 858 803 14.1%
Net income 1,842 1,777 1,738 1,628 1,476 24.8%
Earnings per share - basic 0.41 0.39 0.38 0.36 0.33 24.2%
Earnings per share - diluted 0.40 0.38 0.37 0.35 0.32 25.0%
</TABLE>
(1) Includes gains and losses from securities sales, loan sales, fixed assets,
other real estate and other nonrecurring items. (2) Share data has been adjusted
to reflect the 3-for-2 stock split paid on September 13, 1999.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31, Dec. 31, Sept. 30, June 30, March 31, One Year
PERIOD END BALANCES 2000 1999 1999 1999 1999 Change
----------- ------------ ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Assets $ 591,155 559,447 535,149 526,287 505,862 16.9%
Securities 74,194 71,808 71,463 73,100 77,380 -4.1%
Loans 442,728 419,163 400,574 387,755 368,511 20.1%
Allowance for loan losses 6,313 6,078 5,988 5,822 5,671 11.3%
Intangible assets 5,104 5,261 5,366 5,525 5,684 -10.2%
Deposits 500,724 480,023 456,085 451,356 439,466 13.9%
Short-term borrowings 40,000 30,000 30,000 28,000 20,000 100.0%
Shareholders' equity 44,547 43,942 42,880 41,728 41,036 8.6%
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
For the Three Months Ended
--------------------------
March 31, Dec. 31, Sept. 30, June 30, March 31, One Year
YIELD INFORMATION 2000 1999 1999 1999 1999 Change (2)
----------- ------------ ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Yield on loans 9.03% 8.93% 8.83% 8.74% 8.81% 22 bp
Yield on securities - tax equivalent 6.57% 6.34% 6.38% 6.30% 6.31% 26 bp
Yield on other earning assets 5.80% 5.38% 5.71% 5.21% 5.07% 73 bp
Yield on all interest earning assets 8.59% 8.32% 8.37% 8.25% 8.26% 33 bp
Rate on interest bearing deposits 4.09% 3.91% 3.76% 3.80% 3.90% 19 bp
Rate on other interest bearing liabilities 5.95% 5.71% 5.44% 5.12% 4.63% 132 bp
Rate on all interest bearing liabilities 4.17% 4.02% 3.80% 3.81% 3.91% 26 bp
Interest rate spread - tax equivalent 4.42% 4.30% 4.57% 4.44% 4.35% 7 bp
Net interest margin - tax equivalent (1) 5.03% 4.88% 5.16% 5.04% 4.97% 6 bp
Average prime rate 8.69% 8.37% 8.10% 7.75% 7.75% 94 bp
</TABLE>
(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.
- --------------------------------------------------------------------------------
<PAGE>
First Bancorp and Subsidiaries
Corporate Information
<TABLE>
<CAPTION>
<S> <C>
Board of Directors For Additional Information Contact
Jack D. Briggs, Chairman Anna G. Hollers
David L. Burns Investor Relations
Jesse S. Capel Telephone: 800-548-9377
James H. Garner
George R. Perkins, Jr.
G. T. Rabe, Jr. NASDAQ Symbol: FBNC
Edward T. Taws, Jr. Traded on the NASDAQ National Market System
Frederick H. Taylor
Goldie H. Wallace
A. Jordan Washburn Market Makers in First Bancorp Stock
John C. Willis (Broker Contacts listed in parenthesis)
J.C. Bradford & Co. (Clay Young at 1-800-830-6071)
Emeritus - D. C. Deaton, Jr. Legg Mason (Paul Newton at 1-800-628-5770)
John L. Frye, Sr. Scott & Stringfellow (Jeff O'Quinn at 1-800-763-1893 or
Jack L. Harper Alan Tilley at 1-800-476-1824)
John J. Russell Trident Securities (Sadler Stukes at 1-800-340-6321)
John C. Wallace Wachovia Securities (Kel Normann at 1-800-929-1019)
Executive Officers Dividend Reinvestment Plan
James H. Garner, President and Chief Executive Registered holders of First Bancorp common stock are
Officer eligible to participate in the Company's Dividend
Anna G. Hollers, Executive Vice President and Reinvestment Plan, a convenient and economical way to
Secretary purchase additional shares of First Bancorp common stock
Teresa C. Nixon, Executive Vice President of Loan without payment of brokerage commissions. For an
Administration and Compliance information folder and authorization form or to receive
David G. Grigg, President of Montgomery Data additional information please contact:
Services, Inc.
Jerry M. Arnold, Senior Vice President of Operations First Bancorp Investor Relations
Eric P. Credle, Senior Vice President and Chief Attention: Anna Hollers
Financial Officer Post Office Box 508
Lee C. McLaurin, Senior Vice President and Controller Troy, NC 27371-0508
Telephone: 800-548-9377
or
Registrar and Transfer Company
Telephone: 800-368-5948
Corporate Office Stock Transfer Agent
341 North Main Street Registrar and Transfer Company
Troy, NC 27371-0508 10 Commerce Drive
Telephone: 910-576-6171 Cranford, NJ 07016
Fax: 910-576-1070 Telephone: 800-368-5948
</TABLE>
Please visit our website at www.firstbancorp.com
<PAGE>
FIRST BANCORP Address Correction Requested
341 North Main Street
P.O. Box 508
Troy, North Carolina 27371-0508
Investors and security holders are advised to read the joint proxy
statement/prospectus regarding the merger referenced in the foregoing
information when it becomes available, because it will contain important
information. The joint proxy statement/prospectus will be filed with the
Securities and Exchange Commission by First Bancorp. Investors and security
holders may obtain a free copy of the joint proxy statement/prospectus (when
available) and other documents filed by First Bancorp at the Commission's
website at www.sec.gov. The joint proxy statement/prospectus and other relevant
documents may also be obtained from First Bancorp by directing such request to
First Bancorp, 341 North Main Street, Troy, North Carolina 27371-0508,
Attention: Anna G. Hollers, telephone: (910) 576-6171.
