First Bancorp to Acquire First Carolina Bancshares in $166 Million Stock and Cash Merger

Merger Agreement Structure Between First Bancorp and First Carolina Bancshares

According to the July 14, 2026 merger agreement, First Carolina Bancshares Corporation will merge into First Bancorp, which will continue as the surviving holding company. Concurrently, Carolina Bank & Trust Company will merge into First Bank, First Bancorp’s banking subsidiary. This transaction expands First Bancorp’s footprint into South Carolina.

First Carolina shareholders will receive a combination of stock and cash: 14.5340 shares of First Bancorp common stock plus $294.94 in cash per share of First Carolina common stock. The aggregate merger consideration is valued at approximately $166 million, equating to $64.22 per First Carolina share at current market valuations.

Unanimous Board Approval and Projected Closing Timeline

The merger has been unanimously approved by the boards of directors of both First Bancorp and First Carolina, demonstrating strong institutional support. However, the transaction remains subject to regulatory approvals, shareholder consent, and other customary closing conditions.

The parties expect to finalize the merger in the fourth quarter of 2026 or early first quarter of 2027, contingent upon First Carolina shareholder approval, regulatory clearances, and the effectiveness of First Bancorp’s registration statement covering the issuance of shares related to the merger.

Pre-Closing Conditions Required for Completion

Beyond board endorsements, First Carolina shareholders must approve the transaction at an upcoming meeting. Regulatory agencies must grant necessary approvals, and First Bancorp’s registration statement must be declared effective. The agreement includes a termination deadline of June 30, 2027, after which either party may terminate if the merger is not completed.

Termination Rights and $6.4 Million Breakup Fee

The agreement allows termination by mutual consent, due to uncured material breaches, denial of regulatory approvals, or failure of shareholder approval. First Carolina may also terminate if it receives a superior proposal before shareholder approval, but such termination could trigger a $6.4 million termination fee payable to First Bancorp. This fee compensates First Bancorp for costs and protects against competing bids.

Support Agreements from Key First Carolina Shareholders and Directors

Upon signing, First Carolina’s directors, executives, and certain shareholders entered into Support Agreements committing them to vote at least 40% of outstanding shares in favor of the merger and against competing offers. These agreements also restrict share transfers before shareholder approval and expire upon merger completion, termination of the agreement, material adverse amendments, or by July 14, 2028.

Claims Letters and Release of Pre-Closing Claims

Additionally, certain First Carolina directors, officers, and shareholders have executed Claims Letters releasing potential claims against First Carolina, Carolina Bank, their directors, officers, and successors. This release only becomes effective upon closing, ensuring a clean transition.

Non-Competition and Confidentiality Agreements

First Carolina insiders have also signed Non-Competition and Non-Disclosure Agreements prohibiting disclosure or use of confidential information, solicitation of customers, and participation in competing businesses within a defined territory for two years post-closing. These provisions protect First Bancorp’s customer relationships and workforce.

Registration and Proxy Statement Filing Process

First Bancorp will file a registration statement with regulators covering shares to be issued to First Carolina shareholders. This filing will include a combined proxy statement from First Carolina and prospectus from First Bancorp. Investors are cautioned to consider the merger agreement alongside other public filings, as representations therein are for contractual risk allocation and not factual guarantees.

Expansion of First Bancorp’s Presence into South Carolina

Headquartered in Southern Pines, North Carolina, First Bancorp operates First Bank. First Carolina Bancshares, based in Florence, South Carolina, operates Carolina Bank & Trust Company. This merger extends First Bancorp’s geographic reach into the Pee Dee region of South Carolina, broadening its community banking footprint across the Carolinas. Immediate market reaction to the announcement was not available at the time of this report.

Deal Protections and Shareholder Voting Details

The merger agreement includes standard protections such as shareholder approval requirements, insider voting commitments covering at least 40% of shares, and a $6.4 million termination fee to safeguard against deal disruption. Notably, First Bancorp does not require a separate shareholder vote to issue the merger consideration shares. The closing timeline depends on regulatory review and shareholder voting processes, targeting Q4 2026 or early Q1 2027.