Relevant Statistics:

Assets Purchased: $210 million
Loans Purchased : $162 million
Deposits Assumed: $205 million
Asset Discount: $23.9 million
Deposit Premium: 0%
FDIC Loss Share: 80% of covered loans

Background:

The Bank of Asheville is a commercial bank operating 5 branches in the Asheville MSA of North Carolina. The Company’s capital ratios deteriorated rapidly in 2010 as a result of loan losses. The Bank of Asheville was unable to raise sufficient capital to meet the requirements of a consent order with the North Carolina Office of the Commissioner of Banks with various.

Investment Banking Role:

On January 21st, 2011, First Bancorp announced that First Bank, its banking subsidiary, had entered into a purchase and assumption agreement with the FDIC to purchase substantially all of the assets and liabilities of the Bank of Asheville. Raymond James acted as sole financial advisor to First Bancorp in this transaction.

Successful Outcome:

As a result of the transaction, First Bancorp acquired its first five branches in the Asheville MSA. Substantially all of the loans purchased were covered by a loss share agreement between the FDIC and First Bank, which provides First Bank with reimbursement on 80% of incurred losses. First Bancorp purchased the net assets from the FDIC at a discount of $23.9 million and was able to record a bargain purchase gain.