As filed with the Securities and Exchange Commission on February 5, 2008

Registration No. 333-146658

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

 

 

 

Pre-Effective Amendment No. 1

to

 

Form S-4

 

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

 

 

FIRST BANCORP

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

 

 

341 NORTH MAIN STREET

POST OFFICE BOX 508

TROY, NORTH CAROLINA 27371-0508

(910) 576-6171

(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT’S PRINCIPAL EXECUTIVE OFFICES)

 

JERRY L. OCHELTREE

PRESIDENT AND CHIEF EXECUTIVE OFFICER

FIRST BANCORP

341 NORTH MAIN STREET

POST OFFICE BOX 508

TROY, NORTH CAROLINA 27371-0508

(910) 576-6171

(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)

 

 

 

 

WITH COPIES TO:

 

 

 

 

 

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE PUBLIC:  As soon as practicable after this Registration Statement becomes effective.

 

If the securities being registered on this form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  o

 

If this form is filed to register additional securities for any offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said section 8(a), may determine.

 

 

SUBJECT TO COMPLETION, DATED FEBRUARY 5, 2008

 

GREAT PEE DEE BANCORP, INC.

901 CHESTERFIELD HIGHWAY

CHERAW, SOUTH CAROLINA 29520

 

To the Stockholders of Great Pee Dee Bancorp, Inc.:

 

Great Pee Dee Bancorp, Inc. and First Bancorp have entered into a merger agreement dated July 12, 2007, as amended on February 5, 2008. This agreement calls for a merger of Great Pee Dee and First Bancorp, with First Bancorp surviving the merger. References to the merger in the proxy statement/prospectus refer to the merger of Great Pee Dee into First Bancorp.

 

The merger requires the approval of the stockholders of Great Pee Dee. For that reason, you are receiving a proxy statement/prospectus describing the terms of the merger and providing other important information. We urge you to read it carefully, including the risk factors beginning on page 13 of the proxy statement/prospectus.

 

At a special stockholder meeting to be held on March 14, 2008, you will be asked to vote upon and approve the merger and a proposal to adjourn the special meeting, including, if necessary, to allow time for further solicitation of proxies in the event there are insufficient votes at the special meeting to approve the merger. A proxy card that can be used to cast your vote accompanies the proxy statement/prospectus. The approval of the holders of at least a majority of the shares of Great Pee Dee common stock outstanding as of January 24, 2008, which is the record date for the Great Pee Dee stockholder meeting, is required to complete the merger.

 

Under the merger agreement, you will receive 1.15 shares of First Bancorp common stock for each share of Great Pee Dee common stock you own as of the date the merger is completed. This exchange ratio is subject to adjustment in limited circumstances as described in the proxy statement/prospectus. The approximate maximum number of shares to be issued by First Bancorp pursuant to the merger agreement based on the exchange ratio is 2,086,872.

 

First Bancorp common stock is traded on the Nasdaq Global Select Market under the symbol “FBNC.” Based on the closing price of First Bancorp common stock on [ • ] of $[ • ] per share and the 1.15 exchange ratio, you would receive approximately $[ • ] worth of First Bancorp common stock for each share of Great Pee Dee common stock you hold on the closing date. The actual value of the First Bancorp common stock you receive in the merger will depend on the market value of First Bancorp common stock at the time of completion of the merger.

 

Your vote is very important. The board of directors of Great Pee Dee has unanimously adopted the merger agreement, and your board strongly encourages you to vote FOR approval of the merger and the proposal to adjourn the special meeting.

 

 

 

 

The shares of First Bancorp common stock to be issued in connection with the merger will be freely tradable in the open market, subject to the resale restrictions applicable to affiliates described in “The Merger — Resales of First Bancorp Common Stock” on page 39.

 

The date of this proxy statement/prospectus is [ • ]. It is first being mailed on or about [ • ].

GREAT PEE DEE BANCORP, INC.

901 CHESTERFIELD HIGHWAY

CHERAW, SOUTH CAROLINA 29520

(843) 537-7656

 

Notice of Special Meeting of Stockholders to be held on March 14, 2008

 

Great Pee Dee Bancorp, Inc. will hold a special meeting of stockholders at its offices located at 901 Chesterfield Highway, Cheraw, South Carolina 29520, at 2:00 p.m., local time, on March 14, 2008 for the following purposes:

 

(1) Approval of Merger Agreement.  To consider and vote on a proposal to approve the merger agreement dated July 12, 2007 between First Bancorp and Great Pee Dee, as amended on February 5, 2008, pursuant to which Great Pee Dee will merge into First Bancorp, with First Bancorp being the surviving corporation. Under the merger agreement, Great Pee Dee stockholders will receive 1.15 shares of First Bancorp common stock for each share of Great Pee Dee common stock they own as of the date the merger is completed (subject to adjustment under certain limited circumstances).

 

(2) Adjournment.  To consider and vote on a proposal to adjourn the special meeting, including, if necessary, to allow time for further solicitation of proxies in the event there are insufficient votes present at the meeting in person or by proxy, to approve the merger.

 

(3) Other Business.  To transact such other business as may properly come before the special meeting, or any adjournments or postponements of such meeting.

 

Great Pee Dee’s board of directors is not aware of any other business to be considered at the meeting.

 

The merger is described more fully in the proxy statement/prospectus attached to this notice.

 

Record holders of Great Pee Dee common stock at the close of business on January 24, 2008 will receive notice of and may vote at the special meeting, including any adjournments or postponements of such meeting.

 

Approval of the merger agreement at the special meeting will require the affirmative vote of the holders of a majority of the outstanding shares of Great Pee Dee common stock.

 

Under certain circumstances described in the proxy statement/prospectus, stockholders will have dissenters’ rights under Section 262 of the Delaware General Corporation Law with respect to the proposed merger. The procedures to exercise dissenters’ rights are summarized in, and a copy of Section 262 of the Delaware General Corporation Law is attached as Appendix C to, the proxy statement/prospectus. Strict compliance with Section 262 of the Delaware General Corporation Law is required to exercise dissenters’ rights.

 

Your vote is very important. Whether or not you plan to attend the special meeting, please take the time to vote by completing and mailing the enclosed proxy card or following the voting instructions from your broker for shares held in “street name.” If you sign, date and mail your proxy card without indicating how you want to vote, we will vote your proxy in favor of the merger and the proposal to adjourn the special meeting. If you do not either return your card or attend and vote in favor of the merger agreement at the special meeting, the effect will be the same as a vote against the merger.

 

By Order of the Board of Directors

 

John S. Long

President and Chief Executive Officer

 

February  • , 2008

 

Your board of directors unanimously recommends that you vote FOR approval of the merger agreement and the proposal to adjourn the special meeting.

PLEASE NOTE

 

No one has been authorized to provide stockholders of Great Pee Dee with any information other than the information included in this document and the documents that are referred to herein. Stockholders of Great Pee Dee should not rely on other information as being authorized by Great Pee Dee or First Bancorp.

 

This proxy statement/prospectus has been prepared as of [ • ]. There may be changes in the affairs of First Bancorp or Great Pee Dee since that date that are not reflected in this document.

 

When used in this proxy statement/prospectus, the terms “Great Pee Dee” and “First Bancorp” refer to Great Pee Dee Bancorp, Inc. and First Bancorp, respectively, and, where the context requires, to Great Pee Dee and First Bancorp and their respective subsidiaries.

 

OTHER INFORMATION ABOUT THE PARTIES

 

Important business and financial information about First Bancorp is contained in documents that have been incorporated by reference into this document. These documents are described on page 75 under “Additional Information.”

 

You can obtain additional, free copies of the information described above or additional copies of this document on written or oral request, or you can ask questions about the merger, by writing or calling:

 

John M. Digby

Great Pee Dee Bancorp, Inc.

901 Chesterfield Highway

Cheraw, South Carolina 29520

Telephone: (843) 537-7656

 

Anna G. Hollers

First Bancorp

Post Office Box 508

341 North Main Street

Troy, North Carolina 27371-0508

Telephone: (910) 576-6171

 

To obtain timely delivery of the documents, you must request the information by March 4, 2008.

TABLE OF CONTENTS

 

 

Appendices

 

A WARNING ABOUT FORWARD-LOOKING STATEMENTS

 

This proxy statement/prospectus contains forward-looking statements about each of First Bancorp and Great Pee Dee, as well as information relating to the merger. Forward-looking statements are statements about the future and are not based on historical fact and can often be identified by such words as “expect,” “may,” “could,” “intend,” “believe” or “anticipate.” These forward-looking statements reflect current views as of the date of this proxy statement/prospectus of First Bancorp and Great Pee Dee, but they are based on assumptions and are subject to risks, uncertainties and other factors. These risks, uncertainties and other factors could cause actual results to differ significantly from these forward-looking statements and include the following:

 

 

Further information on specific factors that could affect the financial results of First Bancorp after the merger is included in the discussion of “Risk Factors” beginning on page 13. You should also consider the cautionary statements contained in First Bancorp’s and Great Pee Dee’s respective filings with the Securities and Exchange Commission.

SUMMARY TERM SHEET

 

First Bancorp has entered into a merger agreement with Great Pee Dee, dated July 12, 2007, as amended on February 5, 2008. A summary of the terms of the merger agreement is set forth below. Great Pee Dee’s board of directors is soliciting your proxy for use at the meeting of Great Pee Dee stockholders to be held at 901 Chesterfield Highway, Cheraw, South Carolina 29520, at 2:00 p.m., local time, on March 14, 2008. At the special meeting you will be asked to consider and approve the merger agreement. Great Pee Dee’s board of directors has unanimously approved the merger agreement and believes that the merger is fair to, and in the best interests of, Great Pee Dee stockholders. Great Pee Dee strongly encourages you to vote “FOR” the merger.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUMMARY

 

The Parties (See page 50)

 

The Merger (See page 17)

 

What Great Pee Dee Stockholders Will Receive in the Merger (See page 17)

 

Effect of the Merger on Great Pee Dee Options (See page 18)

 

First Bancorp Dividend Policy Following the Merger (See page 34)

 

Comparative Market Prices of Great Pee Dee and First Bancorp Common Stock (See page 49)

		Great Pee Dee
		Common				First Bancorp				Equivalent Price per
		Stock				Common Stock				Great Pee Dee Share(1)
July 12, 2007		$	15.50			$	18.28			$	21.02
[ • ]		$	[ • ]			$	[ • ]			$	[ • ]

(1)		The equivalent price per share of Great Pee Dee common stock at each specified date represents the closing sales price of a share of First Bancorp common stock on such date multiplied by an exchange ratio of 1.15. See “Comparative Market Prices and Dividends.”

 

Expected Tax Treatment as a Result of the Merger (See page 37)

 

Reasons for the Merger (See pages 28, 29)

 

Opinion of Great Pee Dee’s Financial Advisor (See page 20)

 

Stockholder Meeting (See page 15)

	•	approve the merger agreement;
	•	approve a proposal to adjourn the special meeting to a later date or dates, including, if necessary, to permit further solicitation of proxies in the event there are not sufficient votes at the time of the special meeting to approve the merger agreement; and
	•	transact such other business as may properly come before the meeting, or any adjournments or postponements of such meeting.

 

Required Stockholder Vote (See page 15)

 

Voting Rights at the Stockholder Meeting (See page 15)

 

Dissenters’ Rights (See page 16)

 

Great Pee Dee Recommendation to Stockholders (See page 16)

 

Share Ownership of Management and Certain Stockholders (See page 16)

 

Interests of Certain Persons in the Merger (See page 34)

 

Effective Time (See page 30)

 

Exchange of Stock Certificates for Merger Consideration (See page 30)

 

Regulatory Approval and Other Conditions (See page 32)

	•	Great Pee Dee stockholders approve the merger agreement;
	•	Great Pee Dee and First Bancorp receive an opinion from an acceptable tax advisor that the merger will qualify as a tax-free reorganization;
	•	holders of not more than 10% of Great Pee Dee’s common stock exercise dissenters’ rights in the merger;
	•	First Bancorp receives a copy of a favorable determination letter issued by the Internal Revenue Service with respect to the termination of the Sentry Bank & Trust Employee Stock Ownership Plan, which is referred to herein as the Employee Stock Ownership Plan;
	•	Great Pee Dee and First Bancorp have complied with their covenants made in the merger agreement; and
	•	neither Great Pee Dee nor First Bancorp has breached in any material respect any of its representations made in the merger agreement.

 

Waiver, Amendment and Termination (See page 32)

 

Termination Fee (See page 39)

 

Accounting Treatment (See page 39)

 

Certain Differences in Stockholders’ Rights (See page 40)

 

Management and Operations after the Merger (See page 34)

 

Selected Financial Data

		Nine Months Ended
		September 30,								Years Ended December 31,
		2007				2006				2006				2005				2004				2003				2002
		(Unaudited)
		(Dollars in thousands, except per share data)
Income Statement Data
Interest income		$	110,628			$	93,937			$	129,207			$	101,429			$	81,593			$	74,667			$	73,261
Interest expense			51,907				38,599				54,671				32,838				20,303				18,907				23,871
Net interest income			58,721				55,338				74,536				68,591				61,290				55,760				49,390
Provision for loan losses			3,742				3,630				4,923				3,040				2,905				2,680				2,545
Net interest income after provision for loan losses			54,979				51,708				69,613				65,551				58,385				53,080				46,845
Noninterest income			13,370				10,252				14,310				15,004				15,864				14,918				11,968
Noninterest expense			42,581				39,328				53,198				47,636				43,717				37,964				32,301
Income before income taxes			25,768				22,632				30,725				32,919				30,532				30,034				26,512
Income taxes			9,720				8,474				11,423				16,829				10,418				10,617				9,282
Net income		$	16,048			$	14,158			$	19,302			$	16,090			$	20,114			$	19,417			$	17,230
Per Share Data(1)
Net income per share — basic		$	1.12			$	0.99			$	1.35			$	1.14			$	1.42			$	1.38			$	1.26
Net income per share — diluted			1.11				0.98				1.34				1.12				1.40				1.35				1.23
Cash dividends declared			0.57				0.55				0.74				0.70				0.66				0.63				0.60
Period end stated book value			11.88				11.40				11.34				10.94				10.54				10.02				9.06
Period end tangible book value			8.32				7.78				7.76				7.48				7.04				6.44				7.22
Balance Sheet Data (at Period End)
Total assets		$	2,284,263			$	2,078,458			$	2,136,624			$	1,801,050			$	1,638,913			$	1,475,769			$	1,218,146
Loans			1,838,346				1,696,835				1,740,396				1,482,611				1,367,053				1,218,895				998,547
Allowance for loan losses			20,631				18,465				18,947				15,716				14,717				13,569				10,907
Deposits			1,818,908				1,664,902				1,695,679				1,494,577				1,388,768				1,249,364				1,055,957
Borrowed funds			233,013				200,013				210,013				100,239				92,239				76,000				30,000
Total shareholders’ equity			170,770				163,089				162,705				155,728				148,478				141,856				123,985
Performance Ratios
Return on average assets(2)			1.01	%			1.00	%			1.00	%			0.94	%			1.30	%			1.45	%			1.48	%
Return on average equity(2)			12.68	%			11.70	%			11.83	%			10.39	%			13.71	%			14.14	%			14.25	%
Net interest income (taxable- equivalent)/average earning assets(2)(3)			4.00	%			4.22	%			4.18	%			4.33	%			4.31	%			4.52	%			4.58	%
Shareholders’ equity to total assets			7.48	%			7.85	%			7.62	%			8.65	%			9.06	%			9.61	%			10.18	%

		Nine Months Ended
		September 30,								Years Ended December 31,
		2007				2006				2006				2005				2004				2003				2002
		(Unaudited)
Capital Ratios
Tier I risk-based capital			10.04	%			10.13	%			10.05	%			10.49	%			10.92	%			11.51	%			12.68	%
Total risk-based capital			11.63	%			11.77	%			11.81	%			11.61	%			12.08	%			12.56	%			13.69	%
Leverage			8.60	%			8.69	%			8.59	%			8.60	%			8.86	%			9.44	%			10.09	%
Asset Quality Ratios
Allowance/gross loans			1.12	%			1.09	%			1.09	%			1.06	%			1.08	%			1.11	%			1.09	%
Nonperforming loans/total loans			0.38	%			0.31	%			0.39	%			0.11	%			0.27	%			0.35	%			0.30	%
Nonperforming assets/total assets			0.39	%			0.34	%			0.39	%			0.17	%			0.32	%			0.39	%			0.36	%
Net charge-offs/average loans(2)			0.15	%			0.08	%			0.11	%			0.14	%			0.14	%			0.10	%			0.11	%

(1)		Per share amounts for 2002 and 2003 have been restated from their originally reported amounts to reflect the 3-for-2 stock split paid on November 15, 2004.

(2)		Ratios for the nine-month periods ended September 30, 2007 and 2006 have been annualized.

(3)		Net interest income on a tax equivalent basis is derived by adding the tax benefit realized from tax-exempt securities to reported interest income. The following is a reconciliation of reported net interest income to tax equivalent net interest income.

		Nine Months Ended
		September 30,								Years Ended December 31,
		2007				2006				2006				2005				2004				2003				2002
		(Unaudited)
		(Dollars in thousands)
Taxable-Equivalent Net Interest Income
Net interest income as reported		$	58,721			$	55,338			$	74,536			$	68,591			$	61,290			$	55,760			$	49,390
Tax-equivalent adjustment			399				384				501				448				475				519				535
Net interest income, tax-equivalent		$	59,120			$	55,722			$	75,037			$	69,039			$	61,765			$	56,279			$	49,925

		Three Months Ended
		September 30,								Years Ended June 30,
		2007				2006				2007				2006				2005				2004				2003
		(Dollars in thousands, except per share data)
Income Statement Data
Interest income		$	3,941			$	3,545			$	14,516			$	12,754			$	9,746			$	8,312			$	8,426
Interest expense			2,229				1,824				7,963				6,038				3,954				3,131				3,367
Net interest income			1,712				1,721				6,553				6,716				5,792				5,181				5,059
Provision for loan losses			67				47				168				363				192				375				400
Net interest income after provision for loan losses			1,645				1,674				6,385				6,353				5,600				4,806				4,659
Noninterest income			275				290				1,142				773				941				1,274				1,080
Noninterest expense			1,577				1,231				5,029				4,584				4,723				4,105				3,496
Income before income taxes			343				733				2,498				2,542				1,818				1,975				2,243
Income taxes			248				280				955				943				654				727				833
Net income		$	95			$	453			$	1,543			$	1,599			$	1,164			$	1,248			$	1,410
Per Share Data
Net income per share — basic		$	0.06			$	0.27			$	0.90			$	0.93			$	0.68			$	0.74			$	0.87
Net income per share — diluted			0.05				0.26				0.89				0.92				0.68				0.73				0.85
Cash dividends declared			0.16				0.16				0.64				0.64				0.64				0.61				0.55
Period end stated book value			15.23				15.04				15.26				14.83				14.57				14.38				14.77
Period end tangible book value			14.99				14.69				14.98				14.45				14.10				13.80				14.07
Balance Sheet Data (at Period End)
Total assets		$	221,641			$	214,237			$	236,747			$	212,706			$	195,746			$	156,355			$	143,326
Loans held for investment			174,702				180,880				178,687				177,176				155,724				115,824				109,370
Allowance for loan losses			1,987				1,940				1,938				1,901				1,593				1,532				1,416
Deposits			160,427				155,387				171,204				151,339				136,573				108,945				108,812
Borrowed funds			31,900				30,100				36,400				33,100				31,448				21,000				8,000
Total stockholders’ equity			27,354				26,863				27,315				26,540				26,256				26,051				26,043
Performance Ratios
Return on average assets(1)			0.18	%			0.90	%			0.71	%			0.76	%			0.66	%			0.81	%			1.01	%
Return on average equity(1)			1.39	%			6.78	%			5.87	%			6.05	%			4.52	%			4.80	%			5.49	%
Net interest income/average earning assets(1)			3.16	%			3.44	%			3.21	%			3.38	%			3.50	%			3.55	%			3.79	%
Stockholders’ equity to total assets			12.34	%			12.54	%			11.54	%			12.48	%			13.41	%			16.66	%			18.17	%
Capital Ratios (for Sentry)
Tier I risk-based capital			14.61	%			14.02	%			14.01	%			15.78	%			18.78	%			23.52	%			26.72	%
Total risk-based capital			15.79	%			15.21	%			15.14	%			16.97	%			20.03	%			23.52	%			27.97	%
Leverage			11.13	%			10.69	%			10.05	%			11.90	%			12.28	%			14.33	%			16.72	%
Asset Quality Ratios
Allowance/gross loans			1.14	%			1.07	%			1.08	%			1.07	%			1.02	%			1.32	%			1.29	%
Nonperforming loans/total loans			0.93	%			0.32	%			0.70	%			0.31	%			0.71	%			1.86	%			2.06	%
Nonperforming assets/total assets			0.78	%			0.28	%			0.56	%			0.31	%			0.66	%			1.70	%			1.60	%
Net charge-offs/average loans(1)			0.04	%			0.02	%			0.07	%			0.03	%			0.10	%			0.23	%			0.04	%

(1)		Ratios for the three-month periods ended September 30, 2007 and 2006 have been annualized.

 

HISTORICAL AND PRO FORMA COMPARATIVE PER SHARE DATA

		Nine Months				Twelve Months
		Ended				Ended
		September 30,				December 31,
		2007				2006
Net Income Per Share
First Bancorp — Historical
Basic		$	1.12			$	1.35
Diluted			1.11				1.34
First Bancorp — Pro forma(1)
Basic			1.03				1.30
Diluted			1.02				1.29
Great Pee Dee — Historical(2)
Basic			0.46				1.00
Diluted			0.46				0.99
Great Pee Dee — Pro forma equivalent(3)
Basic			1.18				1.50
Diluted			1.17				1.48
Cash Dividends Per Share
First Bancorp — Historical			0.57				0.74
First Bancorp — Pro forma(4)			0.57				0.74
Great Pee Dee — Historical			0.48				0.64
Great Pee Dee — Pro forma equivalent(3)(4)			0.66				0.85
Book Value — At Period End
First Bancorp — Historical			11.88				11.34
First Bancorp — Pro forma(5)			12.67				12.20
Great Pee Dee Bancorp — Historical			15.23				15.16
Great Pee Dee — Pro forma equivalent(3)			14.57				14.03

(1)		Pro forma assumptions include:

	•	the immediate cancellation of 27,329 shares of First Bancorp common stock in connection with the planned termination of the Employee Stock Ownership Plan;

	•	the amortization of an estimated fair value adjustment to loans amounting to $2,678,000, which results in estimated additional interest income in the first year of $412,000;
	•	the amortization of an estimated fair value adjustment to investment securities amounting to $588,000, which results in estimated additional interest income in the first year of $113,000;

	•	a cost of funds rate of 5.5% per annum on the estimated net transaction expenses of $2,353,000, which reduces interest income by $129,000 annually; and

	•	a seven-year straight-line amortization of the estimated core deposit intangible of $790,000, which results in annual amortization expense of $113,000, or $72,000 less than Great Pee Dee’s current intangible amortization expense.

(2)		Converted from a fiscal year end of June 30 to First Bancorp’s fiscal year end of December 31 and nine-months ended September 30, 2007.

(3)		The pro forma equivalent per share data for Great Pee Dee are calculated by multiplying First Bancorp’s pro forma information by the 1.15 exchange ratio.
(4)		First Bancorp’s pro forma cash dividends per share represents historical dividends per share paid by First Bancorp. First Bancorp currently pays quarterly dividends at an annualized rate of $0.76 per share, which is a pro forma equivalent of $0.87 per share of Great Pee Dee common stock. See “The Merger — Management and Operations after the Merger” and “— Dividend Policy.”

(5)		Based on the pro forma total shareholders’ equity of First Bancorp divided by the total pro forma shares of First Bancorp common stock, assuming the issuance of 2,059,543 shares of First Bancorp common stock (after cancellation of the shares issued in connection with the repayment of the loan from the Employee Stock Option Plan).

 

Upon completion of the merger, Great Pee Dee stockholders will receive shares of First Bancorp common stock in exchange for their shares of Great Pee Dee common stock. Great Pee Dee stockholders should be aware of and consider particular risks and uncertainties that are applicable to the merger.

 

The value of the merger consideration will vary with changes in First Bancorp’s stock price.

 

Subject to certain exceptions, each share of Great Pee Dee common stock owned by Great Pee Dee stockholders will be converted into the right to receive shares of First Bancorp common stock. The price of First Bancorp common stock when the merger takes place will likely vary from its price at the date of this proxy statement/prospectus and at the date of Great Pee Dee’s stockholder meeting. Such variations in the price of First Bancorp common stock may result from changes in the business, operations or prospects of First Bancorp, regulatory considerations, general market and economic conditions and other factors. At the time of Great Pee Dee’s stockholder meeting, you will not know the exact value of the merger consideration to be received when the merger is completed.

 

The value of First Bancorp shares may decline before the merger consideration is received.

 

As discussed above, the price of First Bancorp common stock that Great Pee Dee stockholders receive in the merger may decline from its price at the date of this proxy statement/prospectus and at the date of Great Pee Dee’s stockholder meeting. Additionally, there will be a time period after the merger between the deadline for delivering a transmittal letter and surrendering certificates representing Great Pee Dee shares and the time at which former Great Pee Dee stockholders receive the certificates representing the merger consideration. Until such certificates are received, Great Pee Dee stockholders will not be able to sell their First Bancorp shares on the open market and thus will not be able to avoid losses resulting from any decline in the trading prices of First Bancorp common stock during such period.

 

The merger agreement limits Great Pee Dee’s ability to pursue alternative transactions.

 

The merger agreement prohibits Great Pee Dee and its directors, officers, representatives and agents from soliciting, authorizing the solicitation of or, subject to very narrow exceptions, entering into discussions with any third party regarding alternative acquisition proposals. The prohibition limits Great Pee Dee’s ability to pursue offers that may be superior from a financial point of view from other possible acquirers. If Great Pee Dee receives an unsolicited proposal from a third party that is superior from a financial point of view to that made by First Bancorp and terminates the merger agreement, Great Pee Dee would be required to pay a $1,200,000 termination fee. This fee makes it less likely that a third party will make an alternative acquisition proposal.

 

If First Bancorp does not successfully integrate the operations of Great Pee Dee, it may not realize all the expected benefits from the merger.

 

The merger involves the combination of two holding companies that previously have operated independently. A successful combination of their operations will depend substantially on First Bancorp’s ability to consolidate operations, systems and procedures and to eliminate redundancies and costs. First Bancorp may not be able to combine the operations of Great Pee Dee and First Bancorp without encountering difficulties, such as:

 

 

After the merger is completed, Great Pee Dee stockholders will become First Bancorp shareholders and will have different rights.

 

Upon completion of the merger, Great Pee Dee stockholders who receive First Bancorp common stock for their shares of Great Pee Dee common stock will become First Bancorp shareholders. Differences in Great Pee Dee’s certificate of incorporation and bylaws and First Bancorp’s articles of incorporation and bylaws will result in changes to the rights of Great Pee Dee stockholders who become First Bancorp shareholders. For more information, see “Effect of the Merger on Rights of Stockholders,” beginning on page 40. A stockholder of Great Pee Dee may conclude that his, her or its current rights under Great Pee Dee’s certificate of incorporation and bylaws are more advantageous than the rights he, she or it may have as a First Bancorp shareholder under First Bancorp’s articles of incorporation and bylaws.

 

Finally, there are risks and uncertainties relating to an investment in First Bancorp common stock or to economic conditions generally that should affect other financial institutions in similar ways. These aspects are discussed under the heading “A Warning About Forward-Looking Statements” herein and in First Bancorp’s 2006 Annual Report on 10-K under the heading “Risk Factors.”

 

 

Great Pee Dee is furnishing this proxy statement/prospectus to the holders of Great Pee Dee common stock in connection with a proxy solicitation by the Great Pee Dee board of directors, which will use the proxies at a special meeting of Great Pee Dee stockholders to be held at 901 Chesterfield Highway, Cheraw, South Carolina 29520 at 2:00 p.m., local time, on March 14, 2008.

 

At this meeting, holders of Great Pee Dee common stock will be asked to:

 

 

 

Great Pee Dee’s board of directors is not aware of any other business to be considered at the special meeting.

 

The Great Pee Dee board of directors fixed the close of business on January 24, 2008 as the record date for determining the Great Pee Dee stockholders entitled to notice of and to vote at the special meeting of Great Pee Dee stockholders. Only holders of Great Pee Dee common stock of record on the books of Great Pee Dee at the close of business on January 24, 2008 have the right to receive notice of and to vote at the special meeting. On the record date, there were 1,814,671 shares of Great Pee Dee common stock issued and outstanding held by approximately 259 holders of record. At the special meeting, Great Pee Dee stockholders will have one vote for each share of Great Pee Dee common stock owned on the record date.

 

A quorum of stockholders is required to hold the special meeting. A quorum will exist when the holders of a majority of the outstanding shares of Great Pee Dee common stock entitled to vote on a matter are present at the meeting. To determine whether a quorum is present, Great Pee Dee will count all shares of Great Pee Dee common stock present at the special meeting either in person or by proxy, whether or not such shares are voted for any matter.

 

Approval of the merger agreement will require the affirmative vote of the holders of a majority of the outstanding shares of Great Pee Dee common stock. Approval of the proposal to adjourn will require more votes in favor of the proposal than against the proposal.

 

Brokers who hold shares in street name for customers who are the beneficial owners of such shares may not give a proxy to vote those shares without specific instructions from their customers. Any abstention, nonvoting share or “broker non-vote” will have the same effect as a vote AGAINST approval of the merger.

 

Properly executed proxies that Great Pee Dee receives before the vote at the Great Pee Dee special meeting that are not revoked will be voted in accordance with the instructions indicated on the proxies. Any proxy received with no instructions indicated will be voted FOR the proposal to approve the merger agreement and the proposal to adjourn the special meeting, and the proxy holder may vote the proxy in its discretion as to any other matter that may come properly before the special meeting. No proxy holder, however, will vote a proxy in favor of a proposal to adjourn the special meeting if that proxy instructed a vote against approval of the merger.

 

A stockholder of Great Pee Dee who has given a proxy may revoke it at any time prior to its exercise at the Great Pee Dee special meeting by:

 

 

All written notices of revocation and other communications with respect to revocation of proxies should be sent to:

 

Great Pee Dee Bancorp, Inc.

901 Chesterfield Highway

Cheraw, South Carolina 29520

Attention: John M. Digby

 

On the record date, Great Pee Dee’s directors and executive officers, including their immediate family members and affiliated entities, owned or had or shared voting power over 282,916 shares or approximately 15.6% of the outstanding shares of Great Pee Dee common stock, or approximately 31.2% of the shares required to approve the merger. This number does not include shares subject to options to purchase Great Pee Dee common stock. It is expected that the directors and executive officers of Great Pee Dee will vote their shares in favor of the merger. On the record date, one of First Bancorp’s directors indirectly owned a minority interest in 9,900 shares of Great Pee Dee common stock. No other executive officer or director of First Bancorp owned any shares of Great Pee Dee common stock on the record date, and neither First Bancorp or its subsidiaries nor Great Pee Dee or its subsidiaries owned any shares of Great Pee Dee common stock other than in a fiduciary capacity for others or as a result of debts previously contracted.

 

Directors, officers, employees, and agents of Great Pee Dee may solicit proxies by mail, in person, or by telephone or telegraph. They will receive no additional compensation for such services. Although Great Pee Dee does not currently expect to do so, it may engage one or more proxy solicitation firms to assist it in the delivery of proxy materials and solicitation of votes. Great Pee Dee also may make arrangements with brokerage firms and other custodians, nominees, and fiduciaries, if any, for the forwarding of solicitation materials to the beneficial owners of the common stock held of record by such persons. Great Pee Dee will reimburse any such brokers, custodians, nominees, and fiduciaries for the reasonable out-of-pocket expenses incurred by them in connection with the services provided. In general, Great Pee Dee will pay its own expenses incurred in connection with the merger. See ‘‘The Merger — Expenses.”

 

If First Bancorp pays a portion of the merger consideration in cash (other than cash paid for fractional shares), as described in “The Merger — What Great Pee Dee Stockholders Will Receive in the Merger,” then stockholders who vote against or abstain from voting on the merger and properly exercise their dissenters’ rights prior to the stockholder meeting will have the right to receive a cash payment for the fair value of their shares of Great Pee Dee common stock. To exercise these rights, stockholders must comply with Section 262 of the Delaware General Corporation Law, the relevant portions of which are attached as Appendix C to this proxy statement/prospectus. If you wish to dissent, please read this information carefully as you must take affirmative steps to preserve your rights.

 

Great Pee Dee’s board of directors has unanimously approved the merger agreement, and it believes that completion of the merger is in the best interests of Great Pee Dee and its stockholders. Great Pee Dee’s board of directors unanimously recommends that its stockholders vote FOR approval of the merger agreement and the proposal to adjourn the special meeting if necessary.

 

The following information describes material aspects of the merger. This description is not a complete description of all the terms and conditions of the merger agreement. This description is qualified in its entirety by the Appendices attached to this proxy statement/prospectus, including the merger agreement, which is attached as Appendix A and incorporated into this document by reference. You are urged to read the Appendices in their entirety.

 

Great Pee Dee will be acquired by and merged into First Bancorp, with First Bancorp being the surviving corporation.

 

Upon completion of the merger, Great Pee Dee stockholders will receive 1.15 shares of First Bancorp common stock for each share of Great Pee Dee common stock.

 

No fractional shares of First Bancorp common stock will be issued. Instead, cash (without interest) will be paid in lieu of any fractional share to which any Great Pee Dee stockholder would be entitled upon completion of the merger in an amount equal to such stockholder’s fractional interest multiplied by the closing price of First Bancorp common stock on the Nasdaq Global Select Market on the last trading day preceding the effective date of the merger.

 

Great Pee Dee’s board of directors may terminate the merger agreement if:

 

 

provided, however, that:

 

 

For purposes of the adjustment provisions described above,

 

 

The actual market value of shares of First Bancorp common stock at the effective time of the merger and at the time stock certificates for those shares are delivered following surrender and exchange of stock certificates representing shares of Great Pee Dee common stock may be more or less than the average closing price during the measurement period. Great Pee Dee stockholders are urged to obtain current market prices for First Bancorp common stock.

 

The above description is adapted from the provisions contained in Section 9.1(h) of the merger agreement, which is attached to this proxy statement/prospectus as Appendix A.

 

If First Bancorp pays a portion of the merger consideration in cash (other than cash paid for fractional shares), as described above in “— What Great Pee Dee Stockholders Will Receive in the Merger,” stockholders who vote against or abstain from voting on the merger and properly exercise their dissenters’ rights prior to the stockholder meeting have the right to receive a cash payment for the fair value of their shares of Great Pee Dee common stock, plus accrued interest. Any such payment will be in lieu of shares of First Bancorp common stock otherwise receivable by the dissenting stockholder and could be more than, the same as, or less

than the value of such shares of First Bancorp common stock. To exercise these rights, you must comply with Section 262 of the Delaware General Corporation Law, the relevant portions of which are attached as Appendix C to this proxy statement/prospectus and which sets forth in detail the procedures by which these rights are exercisable and by which the fair value of shares is determined and paid. If you wish to dissent, please read this information carefully as you must take affirmative steps to preserve your rights.

 

Great Pee Dee’s directors and several of its employees hold options to purchase shares of Great Pee Dee common stock. When the merger becomes effective, each outstanding option or other right to purchase Great Pee Dee common stock granted under Great Pee Dee’s stock option plan will become an option to purchase First Bancorp common stock. First Bancorp will assume each option in accordance with the terms of Great Pee Dee’s stock option plan and the agreements that evidence the options and will deliver First Bancorp common stock upon the exercise of each option. All Great Pee Dee options not already exercisable have or will become vested, non-forfeitable and exercisable as a result of the proposed merger and the change-in-control provisions in the Great Pee Dee stock option plan. After the merger becomes effective:

 

 

 

 

Notwithstanding the foregoing:

 

 

For information with respect to stock options held by Great Pee Dee’s management, see “The Merger — Interests of Certain Persons in the Merger.”

 

Great Pee Dee has been a public company since its initial public offering in 1997 relating to the mutual-to-stock conversion of Sentry. As a result of the enactment of the Sarbanes-Oxley Act in 2002, Great Pee Dee has become subject to heightened compliance and documentation requirements in a variety of areas, including disclosure controls, internal and external audit relationships, and the duties and qualifications of its board committees. Great Pee Dee has also become subject to expanded disclosure requirements relating to its corporate and trading activities. As a result of these new requirements, Great Pee Dee’s cost of compliance has increased, particularly relative to its limited personnel resources and market capitalization. In addition to the substantial indirect costs in management time, costs associated with Great Pee Dee’s reporting obligations include securities counsel fees, auditor fees, costs of printing and mailing shareholder documents, and specialized word processing and filing costs. Additional costs are anticipated from the upcoming requirement under Section 404 of the Sarbanes-Oxley Act that Great Pee Dee document, test and assess its internal control structure and that its external auditors report on the effectiveness of its internal control structure.

In light of the foregoing, at a regular meeting of Great Pee Dee’s board of directors in March 2007, the board discussed the advantages and disadvantages of pursuing a “going private” transaction that would result in the termination of Great Pee Dee’s reporting obligations under the federal securities laws. In early April, certain members of Great Pee Dee’s management and the board met with an executive of a bank in North Carolina that had engaged in a going private transaction. At a special meeting held on April 20, the board reviewed a detailed analysis of a going private transaction and the alternative methods available to accomplish the deregistration of Great Pee Dee’s common stock.

 

At a special meeting on April 26, the board again discussed engaging in a transaction that would result in the deregistration of Great Pee Dee’s common stock and the termination of its reporting obligations under the federal securities laws. Counsel to Great Pee Dee, Luse Gorman Pomerenk & Schick, reviewed various legal issues associated with a going private transaction and the process involved. At the April 26 meeting, Great Pee Dee’s President and Chief Executive Officer, John Long, also reported on a meeting he had with certain executives of First Bancorp and their expression of interest in a possible merger between First Bancorp and Great Pee Dee. The board determined to continue with its review and consideration of a going private transaction, but authorized management and Great Pee Dee’s financial advisor, Howe Barnes Hoefer & Arnett, Inc., referred to herein as Howe Barnes, to have further discussions with First Bancorp regarding a possible merger between the companies.

 

Further discussions took place between Howe Barnes and management of Great Pee Dee and First Bancorp regarding the possible terms of a merger between Great Pee Dee and First Bancorp. At a special meeting held on May 9, the Great Pee Dee board reviewed an analysis prepared by Howe Barnes regarding the terms of a business combination that were proposed by First Bancorp, which involved a stock-for-stock merger with an exchange ratio of 1.1429 shares of First Bancorp stock for each share of Great Pee Dee common stock, the assumption of outstanding stock options, and the appointment of one director from Great Pee Dee to the board of First Bancorp. The board also reviewed an analysis and overview of First Bancorp that was prepared by Howe Barnes. The board further discussed the matter in executive session, and concluded by authorizing management and Howe Barnes to continue discussions with First Bancorp and to seek an increase in the proposed exchange ratio.

 

At a special meeting held on May 22, Howe Barnes reported that First Bancorp had agreed to increase the exchange ratio to 1.15 shares of First Bancorp common stock for each share of Great Pee Dee common stock. The board reviewed an updated analysis of the proposed terms and a preliminary financial analysis of the proposed terms presented by Howe Barnes. After further discussion, including discussion among the independent board members in executive session, the board authorized management and Great Pee Dee’s legal and financial advisors to proceed to the negotiation of a definitive merger agreement.

 

On May 23, each of the parties entered into confidentiality agreements in contemplation of conducting due diligence. During the next several weeks, each party conducted due diligence reviews of the other. A merger agreement was prepared by counsel to First Bancorp and negotiated with Great Pee Dee and its advisors. A special board meeting was held on June 26. Management, Howe Barnes and Great Pee Dee’s legal counsel reported on the favorable results of the due diligence investigation of First Bancorp. Howe Barnes presented a detailed analysis from a financial point of view of the terms of the proposed merger. Counsel reviewed in detail a proposed merger agreement, which had been distributed to the board in advance of the meeting, and discussed the fiduciary duties of the board of directors in general and in particular in connection with a merger transaction. Howe Barnes stated that it was prepared to provide its opinion that the proposed merger consideration was fair to Great Pee Dee and its stockholders from a financial point of view. Counsel indicated that further discussions and negotiations needed to take place before a definitive agreement would be ready for execution and final approval by the board.

 

A special board meeting was held on July 12, and Howe Barnes presented its fairness opinion as to the merger consideration at the meeting. Great Pee Dee’s legal counsel again reviewed the material terms of the merger agreement and the fiduciary duties of the board. After further discussion, the board of directors voted unanimously to approve the merger agreement as being in the best interests of Great Pee Dee and its stockholders. Management was authorized to execute the agreement and to issue a joint press release announcing the transaction.

 

On February 5, 2008, Great Pee Dee’s board of directors met and unanimously approved an amendment to the merger agreement to modify the procedure for converting Great Pee Dee options into First Bancorp options. This modification was made to ensure compliance with Section 368(a) of the Internal Revenue Code. The amendment was entered into by First Bancorp and Great Pee Dee on February 5, 2008 and is included in Appendix A to this proxy statement/prospectus.

 

On July 12, 2007, at a meeting of the Great Pee Dee board of directors, Howe Barnes delivered to the Great Pee Dee board of directors its opinion, to the effect that, as of that date and based upon and subject to various assumptions, matters considered, and limitations on Howe Barnes’ review described in the opinion, the merger consideration was fair, from a financial point of view, to the stockholders of Great Pee Dee. Howe Barnes has updated its opinion as of January 31, 2008. No limitations were imposed by Great Pee Dee on Howe Barnes with respect to the investigations made or the procedures followed in rendering its opinion.

 

Great Pee Dee retained Howe Barnes to act as its financial advisor in connection with its proposed merger with First Bancorp. Great Pee Dee selected Howe Barnes as its financial advisor based upon Howe Barnes’ qualifications, expertise, and reputation advising financial institutions and other companies with regard to mergers and acquisitions.

 

The full text of Howe Barnes’ updated written opinion to Great Pee Dee’s board, dated January 31, 2008, which sets forth the assumptions made, matters considered and extent of review by Howe Barnes, is attached as Appendix B and is incorporated herein by reference. You should read the fairness opinion carefully and in its entirety. The following summary of Howe Barnes’ opinion is qualified in its entirety by reference to the full text of the opinion. Howe Barnes’ opinion is directed to Great Pee Dee’s board and does not constitute a recommendation to any stockholder of Great Pee Dee as to how a stockholder should vote with regard to the merger at the stockholders meeting described in this proxy statement/prospectus. The opinion addresses only the fairness, from a financial point of view, of the merger consideration to the holders of Great Pee Dee’s common stock. The opinion does not address the relative merits of the merger or any alternatives to the merger, the underlying decision of Great Pee Dee’s board to approve or proceed with or effect the merger, or any other aspect of the merger.

 

Howe Barnes has consented to the inclusion of its opinion and to the inclusion of the summary of its opinion in this proxy statement/prospectus. In giving such consent, Howe Barnes does not concede that it comes within the category of persons whose consent is required under the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder, nor does it concede that it is an expert within the meaning of the term “expert” as used in the Securities Act or the rules and regulations of the Securities and Exchange Commission thereunder with respect to any part of the registration statement on Form S-4 of which this proxy statement/prospectus forms a part.

 

In connection with rendering its original opinion, Howe Barnes:

 

(1) reviewed the terms of the merger agreement;

 

(2) reviewed First Bancorp’s recent filings with the Securities and Exchange Commission, including its proxy statement filed March 27, 2007, annual reports on Form 10-K for the three years ended December 31, 2006, 2005 and 2004, and quarterly report on Form 10-Q for the three months ended March 31, 2007;

 

(3) reviewed Great Pee Dee’s recent filings with the Securities and Exchange Commission, including its proxy statement filed September 8, 2006, annual reports on Form 10-KSB for the three years ended June 30, 2006, 2005 and 2004, and quarterly reports on Form 10-QSB for the three quarters ended March 31, 2007, December 31, 2006 and September 30, 2006;

 

(4) reviewed current reports to stockholders of Great Pee Dee and First Bancorp as filed on Form 8-K with the Securities and Exchange Commission from January 1, 2004 through the date of its opinion;

(5) reviewed certain internal financial information and financial forecasts relating to the business, earnings, cash flows, assets and prospects of the respective companies furnished to Howe Barnes by Great Pee Dee and First Bancorp;

 

(6) held discussions with members of senior management of Great Pee Dee and First Bancorp, including without limitation, their respective outside accountants, legal advisors and others concerning the past and current results of operations of Great Pee Dee and First Bancorp, their respective current financial condition and managements’ opinion of their respective future prospects;

 

(7) reviewed the historical record of reported prices, trading activity and dividend payments for both Great Pee Dee and First Bancorp;

 

(8) compared the reported financial terms of selected recent business combinations in the banking industry; and

 

(9) performed such other studies and analyses as Howe Barnes considered appropriate under the circumstances.

 

The written opinion provided by Howe Barnes to Great Pee Dee, dated as of July 12, 2007, and updated as of January 31, 2008, was necessarily based upon economic, monetary, financial market, and other relevant conditions as of the date the opinion was rendered. Accordingly, you should understand that although subsequent developments may affect its opinion, Howe Barnes does not have any obligation to further update, revise, or reaffirm its opinion.

 

In connection with its review and arriving at its opinion, with the consent of Great Pee Dee’s board, Howe Barnes assumed and relied upon the accuracy and completeness of the financial information and other pertinent information provided by Great Pee Dee and First Bancorp to Howe Barnes for purposes of rendering its opinion. Howe Barnes did not assume any obligation to independently verify any of the information discussed above, including, without limitation, information from published sources, as being complete and accurate. With regard to the financial information, including financial projections it received from Great Pee Dee and First Bancorp, as well as projections of cost savings, Howe Barnes assumed that this information reflected the best available estimates and good faith judgments of management as to Great Pee Dee’s future performance and that the projections provided a reasonable basis upon which Howe Barnes could formulate its opinion. Great Pee Dee does not publicly disclose internal management forecasts or projections of the type utilized by Howe Barnes in connection with Howe Barnes’ role as its financial advisor, and those forecasts and projections were not prepared with a view towards public disclosure. The forecasts and projections were based upon numerous variables and assumptions that are inherently uncertain, including, among others, factors relative to the general economic and competitive conditions Great Pee Dee faces. Accordingly, actual results could vary significantly from those set forth in the forecasts and projections.

 

Howe Barnes does not purport to be an expert in the evaluation of loan portfolios or the allowance for loan losses with respect to loan portfolios and, accordingly, assumes that Great Pee Dee’s allowances and First Bancorp’s allowances were adequate to cover any losses. In addition, Howe Barnes has not reviewed and does not assume any responsibility for any individual credit files and did not make an independent evaluation, appraisal, or physical inspection of the assets or liabilities, contingent or otherwise, of Great Pee Dee’s or First Bancorp’s individual properties, nor was Howe Barnes provided with any such appraisals. In rendering its opinion, Howe Barnes expressed no opinions with respect to the amount or nature of any compensation to any officers, directors, or employees of Great Pee Dee, or any class of such persons relative to the exchange ratio to be received by the holders of the common stock of Great Pee Dee in the transaction or with respect to the fairness of any such compensation. In addition, for purposes of rendering its written opinion, Howe Barnes assumed that (i) the merger will be consummated in accordance with the terms set forth in the merger agreement, without any waiver of any of its material terms or conditions, and that obtaining the necessary regulatory approvals for the merger will not have an adverse effect on either separate institution or the combined entity, and (ii) the merger will be consummated in a manner that complies in all respects with the applicable provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and all other applicable federal and state statutes, rules, and regulations.

In connection with rendering its opinion to Great Pee Dee’s board, Howe Barnes performed a variety of financial and comparative analyses, which are briefly summarized below. Such summaries do not purport to be a complete description of the analyses performed by Howe Barnes. The fact that any specific analysis has been referred to in the summaries below is not meant to indicate that the analysis was given greater weight than any other analysis. Accordingly, the ranges of values resulting from any particular analysis described below should not be taken to be Howe Barnes’ view of Great Pee Dee’s or the combined company’s actual value. Moreover, Howe Barnes believes that the analyses must be considered as a whole and that selecting portions of the analyses and the factors considered, including information presented in tabular form, without considering all of the analyses and factors, could create an incomplete understanding of the process underlying the analyses and, more importantly, a misleading or incomplete view of its opinion as to fairness from a financial point of view that is based on those analyses.

 

Comparable Transaction Analysis.  Howe Barnes reviewed and compared financial performance and pricing information for the following groups of United States thrift merger transactions announced in the 24 months ended July 10, 2007 (the “Nationwide Merger Groups”):

 

 

Pricing ratios for the merger were compared to the Nationwide Merger Group’s median (1) price to book value, (2) price to tangible book value, (3) capital adjusted price to tangible book value, (4) price to last twelve months reported earnings, (5) tangible book value premium to core deposits, and (6) premium paid to market price (the “Pricing Ratios”), as seen below:

 

 

 

 

 

In addition, Howe Barnes reviewed a selected group of thrift merger transactions announced since January 1, 2004 involving acquired thrifts with assets of $100 million to $500 million, tangible equity to tangible assets of 8.0% to 16.0% and return on average assets of 0.50% to 1.00%, as well as First Community Corp.’s acquisition of Dutchfork Bancshares, Inc. based on its similar asset size, capital level and proximity to Great Pee Dee (the “Guideline Transactions”). The following table represents the Guideline Transactions:

 

 

The following table represents a comparison of the merger to the Guideline Transaction Pricing Ratios: