First Bancorp

What they do

First Bancorp is a bank holding company whose principal activity is ownership and operation of First Bank, a state-chartered bank headquartered in Southern Pines, North Carolina. Through the bank it provides commercial and consumer banking, mortgage lending, SBA lending, and investment advisory services. Its subsidiaries include Magnolia Financial, which offers accounts receivable financing and factoring, inventory financing, and purchase order financing in the southeastern U.S., and First Troy SPE, LLC, a holding entity for certain foreclosed real estate. At December 31, 2025 the bank had 113 branches and 1,353 full-time equivalent employees.

Revenue drivers

• Net interest income on loans — Loans of $8.99 billion at June 30, 2026 generated interest and fees on loans of $125.8 million in Q2 2026, up from $112.9 million in Q2 2025; loans carried a 5.67% total yield in the quarter.
• Investment securities — Available-for-sale securities of $1.94 billion and held-to-maturity securities of $0.51 billion produced $18.0 million of taxable and tax-exempt interest income in Q2 2026, though the securities yield slipped 3 basis points to 2.71%.
• Deposit-funded spread — Total deposits were $11.08 billion at June 30, 2026, with noninterest-bearing demand deposits of $3.6 billion, or 32% of total deposits; total cost of deposits was 1.31% and the net interest margin was 3.71%.
• Noninterest income — Noninterest income was $16.0 million in Q2 2026 versus $14.3 million in Q2 2025; full-year 2025 noninterest income fell $25.8 million largely due to a $71.6 million securities loss from loss-earnback transactions.

Recent performance

For the second quarter of 2026 First Bancorp reported net income of $50.5 million, or $1.22 diluted EPS, compared with $46.7 million ($1.13) in the linked quarter and $38.6 million ($0.93) in the second quarter of 2025. The net interest margin expanded to 3.71% from 3.67% linked-quarter and 3.32% a year earlier, and the efficiency ratio was 49.12%. Total assets passed $13 billion for the first time, and total loans grew $194.9 million, or 8.9% annualized, to $9.0 billion. The provision for credit losses was $1.2 million and the quarterly net charge-off ratio was 0.04%. ROI was 1.56% and ROCE 11.89% for the quarter.

Strategy

Management has grown both organically and through acquisitions, including GrandSouth Bancorp in January 2023 (about $1.2 billion of assets) and Select Bancorp in October 2021 (about $1.8 billion), extending the franchise into South Carolina markets such as Greenville, Charleston and Columbia. On July 14, 2026 the company announced a pending acquisition of First Carolina Bancshares Corporation and its subsidiary Carolina Bank Trust Company of Florence, South Carolina, structured as 75% stock and 25% cash. In 2025 the company ran securities loss-earnback transactions, executed $71.6 million of securities losses, and repaid $18.0 million of subordinated debt. It also established a loan participation initiative in 2025, though participation balances at December 31, 2025 were nominal, and it continued managing headcount and expenses.

Risks

• North and South Carolina geographic concentration — The 10-K states the company operates primarily within North Carolina and South Carolina, so its results depend on the economic conditions of those two states.
• Securities loss exposure — Securities loss-earnback transactions produced a $71.6 million loss in 2025 and a $38.0 million loss in 2024, weighing on noninterest income and returns.
• Acquisition integration risk — The pending 75% stock / 25% cash acquisition of First Carolina Bancshares, expected to close in late 2026 or early 2027, requires regulatory and shareholder approvals and successful integration.
• Hurricane and credit-loss provisioning — Provision for credit losses in 2024 included $13.0 million tied to potential Hurricane Helene exposure, and 2025 saw an $11.1 million reversal of that provision as well as higher net charge-offs.

Outlook

Management did not provide quantified earnings guidance in the excerpts; it reported that the pending First Carolina Bancshares acquisition is expected to close in the late fourth quarter of 2026 or early 2027, subject to regulatory and shareholder approvals. Second quarter 2026 disclosures show year-over-year margin expansion to 3.71%, an efficiency ratio of 49.12%, and total assets above $13 billion. The company notes that June 30, 2026 capital ratios are preliminary, with common equity tier 1 at 14.09% and total risk-based capital at 16.06%.