The Bank Slate


First Bancorp in N.C. strikes deal for Select

First Bancorp in Southern Pines, N.C., has agreed to buy Select Bancorp in Dunn, N.C. 

The $7.7 billion-asset First Bancorp said in a press release Tuesday that it will pay $314.3 million in stock for the $1.8 billion-asset Select. The deal, which is expected to close in the fourth quarter, priced Select at 185% of its tangible book value.

Select has 22 branches and three loan-production offices across North Carolina, South Carolina and Virginia. It has $1.3 billion of loans and $1.6 billion of deposits.

Select “is a high-quality institution with a long-standing history of service and strong community banking relationships,” Richard Moore, First Bancorp’s CEO, said in the release. 

“We are thrilled that the Select … team will be joining First Bank, and we look forward to the opportunity to serve their customers,” Moore added.

Two Select directors will join First Bancorp’s board.

The deal is expected to by 10% accretive to First Bancorp’s earnings per share. The company said it should take about two years to earn back an expected 3% dilution to its tangible book value.

First Bancorp expects to incur $20 million of merger-related expenses. The company will look to cut roughly 45% of Select’s annual noninterest expenses.

The deal was announced less than a week after United Community Banks in Blairsville, Ga., agreed to buy Aquesta Financial Holdings in Cornelius, N.C.

“Strategically, First Bancorp’s purchase of Select makes sense given the solid EPS accretion as well as the importance of ‘playing defense’ within its strong North Carolina footprint,” Chris Marinac, analyst at Janney Montgomery Scott, said in a client note.

“There are a limited number of banks remaining in North Carolina, hence the price paid,” Marinac added. “We see First Bancorp’s ROA and ROTCA enhanced by this acquisition, which supports a premium valuation.”

“We see this as a highly attractive fill-in acquisition,” Stephen Scouten, an analyst at Piper Sandler, wrote in his note to clients. “First Bancorp knows the Select team and the cost saves should be readily achievable.”

Keefe, Bruyette & Woods and Brooks, Pierce, McLendon, Humphrey & Leonard advised First Bancorp. Raymond James and Wyrick Robbins Yates & Ponton advised Select.

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