Under the merger agreement, each share of First Carolina common stock will be converted into the right to receive $294.94 in cash plus 14.5340 shares of First Bancorp common stock, subject to adjustment if First Carolina's tangible common equity capital at closing falls outside a target range of $110 million (minimum) to $125 million (maximum). In aggregate, First Carolina shareholders will receive approximately $40 million in cash and 1,967,017 First Bancorp shares, a mix of roughly 75% stock and 25% cash. At closing, First Bancorp shareholders are expected to own approximately 95% of the combined company and former First Carolina shareholders approximately 5%.
The $166 million transaction value represents 1.53 times First Carolina's tangible common equity (versus 1.47 times at the June 23, 2026 letter-of-intent stage, when the deal was valued at $160 million), 11.9 times First Carolina's estimated 2027 earnings, and 9.1 times estimated 2027 earnings including fully phased-in cost savings, according to First Bancorp's investor presentation. The presentation also cites a pay-to-trade ratio of approximately 68%.
First Bancorp disclosed expected cost savings equal to 30% of Carolina Bank's noninterest expense base, with 75% of those savings realized in 2027 and the full amount realized thereafter. The presentation's key transaction assumptions also include an allowance for credit losses of $10.9 million (1.75% of Carolina Bank's loans at closing), a loan interest rate mark of $12.5 million (2.0% of loans at closing, accreted into earnings over six years), a fixed-asset write-up of $4.5 million, a core deposit intangible of 3.00% of non-time deposits (amortized over 10 years), and approximately $15.8 million of after-tax merger charges fully reflected in tangible book value dilution at closing.
First Bancorp expects the transaction to be accretive to fully phased-in earnings per share by approximately 3%, with initial tangible book value dilution of approximately 1% and an earnback period of 1.7 years (based on when pro forma tangible book value per share crosses and begins to exceed projected standalone First Bancorp tangible book value per share). The company also cites an expected internal rate of return of 20%-plus. On a pro forma basis, the combined company is expected to have approximately $13.8 billion in total assets, $9.4 billion in gross loans and $11.7 billion in deposits, with a 2027 estimated return on average assets of 1.6%, return on average tangible common equity of 15%, and efficiency ratio of 47%. First Bancorp states the deal will increase its South Carolina deposit base by more than 50%, double its South Carolina branch footprint, and place it in the top 10 for deposit market share in both North Carolina and South Carolina and number 2 in the Pee Dee region, based on FDIC deposit data as of June 30, 2025.
Adam Currie, President and CEO of First Bank, said in the press release that "Carolina Bank has deep roots in the communities it serves and a strong reputation for relationship-based banking," adding that "their approach to serving customers aligns closely with our own." Rick Beasley, Chairman and CEO of Carolina Bank, said "this partnership brings together two organizations that share a commitment to community banking" and that customers "will benefit from expanded resources, while continuing to work with the team they know and trust." Per the investor presentation, Beasley and Carolina Bank CFO R.W. "Bubba" DeMaurice III are expected to retire upon closing, while other Carolina Bank leaders are expected to remain with First Bank in local leadership roles.
The registration statement on Form S-4 (declared effective October 9, 2026, with a final prospectus filed October 13, 2026 on Form 424B3) discloses the negotiation background. Discussions began with informal talks between First Bancorp CEO Richard Moore and First Carolina CEO Rick Beasley in mid-April 2026, followed by a non-disclosure agreement on April 29, 2026 and several weeks of due diligence. First Bancorp made a verbal proposal on June 11, 2026 at an implied value of approximately $157 million (75% stock / 25% cash), which was followed by negotiation to approximately $160 million by June 16-18, 2026 and a non-binding letter of intent on June 23, 2026 reflecting the final exchange ratio of 14.5340 shares and $294.94 cash per share. The merger agreement was finalized by July 9, 2026 and executed July 13, 2026 after both boards' unanimous approval; First Carolina's board received a fairness opinion from Piper Sandler dated July 13, 2026 concluding the merger consideration was fair to First Carolina shareholders from a financial point of view. The filings do not indicate that First Carolina solicited or received competing offers from other acquirers during this process.
Stephens Inc. served as financial advisor to First Bancorp, and Brooks, Pierce, McLendon, Humphrey & Leonard, LLP served as its legal counsel. Piper Sandler & Co. served as financial advisor to First Carolina, and Nelson Mullins Riley & Scarborough LLP served as its legal counsel.
The merger agreement provides for a termination fee of $6.4 million payable by First Carolina to First Bancorp under specified circumstances, including termination following an alternative acquisition proposal. Closing is subject to approval by two-thirds of First Carolina's outstanding shares, regulatory approvals from the Federal Reserve, FDIC, and North and South Carolina state banking regulators, and effectiveness of the Form S-4 registration statement. The transaction is expected to close in the fourth quarter of 2026 or early in the first quarter of 2027, with systems integration scheduled for the first quarter of 2027. As of this update, no closing 8-K or shareholder vote result has been identified, so the deal remains in announced/pending status.