First Bancorp, the parent company of First Bank in Rockingham, has completed the sale of $65 million worth of preferred stock to the U.S. Treasury Department.
The move is part of the Treasury’s Capital Purchase Program (CPP), approved by Congress to attract healthy banking institutions to help the financial system and increase lending to benefit the U.S. economy.
“From the big picture perspective, we just felt that this was a good time to add capital given the uncertain economy,” said Bancorp Chief Financial Officer Eric Credle. “The trickle-down effect of that is that we can continue to do business as usual without having to worry about the capital situation.”
He said that the deal boils down to making loans.
“This will help us continue to make loans, again, without having to worry about the capital situation,” he said. “But we’ve been making loans all along, so our customers probably won’t see any difference at all.”
The preferred stock issued to the Treasury will pay a dividend of 5 percent for the
first five years and 9 percent thereafter.
The Treasury also received warrants that give it the option for the
next 10 years to purchase a total of 616,308 shares of First Bancorp common
stock at an exercise price of $15.82.
“We are pleased to have raised this capital,” President and Chief Executive Officer Jerry L. Ocheltree said in a press release. “Although First Bancorp and First Bank were both classified as ‘well-capitalized’ by all regulatory measures prior to the sale of the preferred stock, the capital markets that we have utilized in the past to help finance our growth have not been available during this economic downturn.
“This new capital, which is being offered at attractive financial terms, will better allow us to continue to meet the credit needs of the communities we serve,” he finished.
First Bancorp is a bank holding company with its headquarters in Troy, and total assets of approximately $2.7 billion.
The company owns and operates First Bank, a state-chartered community bank that operates 74 branches. Sixty-three of those branches are in a 21-county area in the central Piedmont and coastal regions of North Carolina.
First Bancorp’s common stock is traded on the NASDAQ Global Select Market under the symbol “FBNC.”