First Bancorp, the parent company of Southern Pines-based First Bank, and Select Bancorp, Inc., the parent company of Dunn-based Select Bank and Trust Company, announced Tuesday the signing of a definitive merger agreement.
First Bancorp will acquire Select in an all-stock transaction with a total current value of approximately $314.3 million, or $18.10 per share, based on First Bancorp's stock price as of May 28, 2021.
Upon completion of the acquisition, the combined company is expected to have over $9 billion in assets, $6 billion in loans, and $8 billion in deposits. This transaction represents an opportunity to further cement First Bank's position as the preeminent community bank in North Carolina in a way that is attractive for all stakeholders involved.
The merger agreement has been unanimously approved by the boards of directors of each company. The transaction is expected to close in the fourth quarter of 2021 and is subject to customary conditions, including shareholder and regulatory approval. Subject to the terms of the merger agreement, Select shareholders will receive 0.408 shares of First Bancorp's common stock for each share of Select common stock.
First Bank was founded in 1935 and is the fourth largest bank headquartered in North Carolina. From its Southern Pines base, the company employs over 1,000 full time staff and operates 101 bank branches in North Carolina and South Carolina, serving 300,000 bank customers.
Select Bank currently operates twenty-two banking locations in North Carolina, South Carolina, and Virginia and has the leading community bank market share in Fayetteville, NC and a presence in the key North Carolina growth markets of Raleigh, Charlotte, and Wilmington.
As of March 31, 2021, Select reported assets of $1.8 billion, loans of $1.3 billion, and deposits of $1.6 billion. The acquisition complements First Bank's existing footprint and provides entry into several new markets.
"Select Bank is a high quality institution with a long-standing history of service and strong community banking relationships," said Richard Moore, Chief Executive Officer of First Bancorp. "We are thrilled that the Select Bank team will be joining First Bank, and we look forward to the opportunity to serve their customers."
"We are very excited about this partnership and the unique opportunity it presents," said Bill Hedgepeth, President, CEO, and Director of Select. "We have long admired First Bancorp, and our combined company will be positioned to capitalize on an enhanced presence in exceptional markets, talent, and financial strength."
Keefe, Bruyette & Woods, Inc. served as financial advisor to First Bancorp and Brooks, Pierce, McLendon, Humphrey & Leonard, LLP provided legal counsel. Raymond James & Associates, Inc. served as financial advisor to Select Bancorp, Inc., and Wyrick Robbins Yates & Ponton LLP served as legal counsel.
A Pattern of Growth
First Bancorp first began expanding its footprint and influence beyond the Sandhills through a remarkable period of growth that kicked off nearly a decade ago.
Back in 2011, First Bank purchased a failed bank in Asheville and opened three branches. There was interest in growing that base. In terms of job growth, Asheville is one of the fastest-moving markets in North Carolina.
In March 2016, First Bank entered into an agreement to exchange seven First Bank branches located in Virginia for six First Community branches located in North Carolina. Four of those branches are in Winston-Salem, one is in Mooresville, and one is in Huntersville.
That effort was well-rewarded when another opportunity for growth in the Triad followed a few months later.
In June 2016, First Bank announced a merger agreement to acquire Carolina Bank Holdings, the parent company of Carolina Bank. Carolina Bank operated eight locations in the Greensboro, High Point, Burlington, and Winston-Salem markets.
The following year, it assumed the assets of ASB Bancorp, the parent company of Asheville Savings Bank. That acquisition complemented First Bank’s existing three branches in the Asheville area, with branches in Buncombe, Madison, McDowell, Henderson and Transylvania counties.