UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma condensed combined financial information and explanatory notes show the impact on the historical financial positions and results of operations of First Bancorp and ASBB and have been prepared to illustrate the effects of the merger involving First Bancorp and ASBB under the acquisition method of accounting with First Bancorp treated as the acquirer. Under the acquisition method of accounting, the assets and liabilities of ASBB have been recorded by First Bancorp at their respective fair values and the excess of the merger consideration over the fair value of ASBB’s net assets has been allocated to goodwill. The unaudited pro forma condensed combined balance sheet as June 30, 2017 is presented as if the merger had occurred on June 30, 2017. The unaudited pro forma condensed combined income statements for the fiscal year ended December 31, 2016 and the six months ended June 30, 2017 are presented as if the merger had occurred on January 1, 2016. The historical consolidated financial information has been adjusted to reflect factually supportable items that are directly attributable to the merger and, with respect to the income statements only, expected to have a continuing impact on consolidated results of operations.

The unaudited pro forma condensed combined financial information is presented for illustrative purposes only and does not necessarily indicate the financial results of the combined company had the companies actually been combined at the beginning of the periods presented. The adjustments included in these unaudited pro forma condensed combined financial statements are preliminary and may be revised. The unaudited pro forma condensed combined financial information also does not consider any potential impacts of potential revenue enhancements, anticipated cost savings and expense efficiencies, or asset dispositions, among other factors.

The unaudited pro forma condensed combined financial information is provided for informational purposes only and is prepared based on various assumptions and estimates made by management. The unaudited pro forma condensed combined financial information is not necessarily, and should not be assumed to be, an indication of the results that would have been achieved had the transaction been completed as of the dates indicated or that may be achieved in the future.

Unaudited Pro Forma Condensed Combined Balance Sheet

As of June 30, 2017

	First						Pro Forma					Pro Forma
($ in thousands)	Bancorp			ASBB			Adjustments			Notes		Combined
ASSETS
Cash & due from banks, noninterest-bearing	$	80,234			10,657			—					90,891
Due from banks, interest-bearing		337,326			42,654			(30,225	)		1		349,755
Total cash and cash equivalents		417,560			53,311			(30,225	)				440,646
Securities available for sale		207,496			95,935			—					303,431
Securities held to maturity		127,866			3,615			130			2		131,611
Loans and leases held for sale		13,071			4,097			—					17,168
Loans		3,375,976			613,603			(13,024	)		3		3,976,555
Allowance for loan losses		(24,025	)		(6,659	)		6,659			4		(24,025	)
Net loans		3,351,951			606,944			(6,365	)				3,952,530
Premises and equipment		96,605			10,854			8,624			5		116,083
Other real estate		11,196			5,034			(1,800	)		6		14,430
Goodwill		139,124			—			78,165			7		217,289
Other intangible assets		12,132			—			9,760			8		21,892
Bank-owned life insurance		87,501			10,355			—					97,856
Other		64,118			11,243			3,152			9		78,513
Total assets	$	4,528,620			801,388			61,441					5,391,449
LIABILITIES
Deposits:   Demand - noninterest-bearing	$	990,004			136,712			—					1,126,716
Interest-bearing		2,654,326			540,735			435			10		3,195,496
Total deposits		3,644,330			677,447			435					4,322,212
Borrowings		301,718			20,311			233			11		322,262
Subordinated notes and debentures		53,687			—			—					53,687
Other liabilities		28,234			7,363			3,577			12		39,174
Total liabilities		4,027,969			705,121			4,245					4,737,335
SHAREHOLDERS’ EQUITY
Common stock		262,901			38			153,425			13		416,364
Additional paid-in-capital		—			20,533			(20,533	)		14		—
Retained earnings		240,682			80,292			(80,292	)		14		240,682
Stock in directors' rabbi trust assumed in acquisition		(4,257	)		—			—					(4,257	)
Directors' deferred fee obligation		4,257			—			—					4,257
Unearned Employee Stock Ownership Plan (ESOP) shares		—			(2,669	)		2,669			15		—
Unearned equity incentive plan shares		—			(661	)		661			14		—
Stock-based deferral plan shares		—			(380	)		380			14		—
Accumulated other comprehensive income		(2,932	)		(886	)		886			14		(2,932	)
Total shareholders’ equity		500,651			96,267			57,196					654,114
Total liabilities and shareholders’ equity	$	4,528,620			801,388			61,441					5,391,449

Unaudited Pro Forma Condensed Combined Statement of Income

For the Six Months Ended June 30, 2017

											First Bancorp
	First					Pro Forma					and ASBB - Pro
	Bancorp			ASBB		Adjustments			Notes		Forma Combined
	($ in thousands, except per share data)
Interest income
Interest and fees on loans	$	73,359		$	12,760	$	—				$	86,119
Interest on investment securities		4,696			1,047		(33	)		16	$	5,710
Other, principally overnight investments		1,240			230		(189	)		17		1,281
Total interest income		79,295			14,037		(222	)				93,110
Interest expense
Savings, checking and money market accounts		1,207			303		—					1,510
Time deposits		1,927			509		(34	)		18		2,402
Borrowings		1,949			605		—			19		2,554
Total interst expense		5,083			1,417		(34	)				6,466
Net interest income		74,212			12,620		(188	)				86,644
Provision for loan losses		723			132		—					855
Net interest income after provision (reversal) for loan losses		73,489			12,488		(188	)				85,789
Noninterest income
Service charges on deposit accounts		5,580			912		—					6,492
Other charges, commissions and fees		6,727			1,567		—					8,294
Mortgage banking income		2,279			887		—					3,166
Commissions from sales of insurance and financial products		1,878			124		—					2,002
SBA consulting fees		2,310			—							2,310
SBA loan sale gains		1,549			—							1,549
Bank-owned life insurance income		1,088			170		—					1,258
Securities gains (losses)		(223	)		27		—					(196	)
Foreclosed property gains (losses)		(235	)		16		—					(219	)
Other gain (losses)		731			—		—					731
Total noninterest income		21,684			3,703		—					25,387
Noninterest expenses
Salaries and employee benefits		37,739			6,608		—					44,347
Occupancy and equipment expense		6,963			804		—					7,767
Merger and acquisition expense		3,495			520		(843	)		20		3,172
Intangibles amortization		1,607			—		1,122			21		2,729
Other		17,352			3,918		—					21,270
Total noninterest expenses		67,156			11,850		279					79,285
Income before income taxes		28,017			4,341		(467	)				31,891
Income taxes		9,308			1,355		(173	)				10,490
Net income		18,709			2,986		(294	)				21,401
Preferred stock dividends		—			—		—					—
Net income available to common shareholders	$	18,709		$	2,986	$	(294	)			$	21,401
Basic earnings per share	$	0.80		$	0.86						$	0.76
Diluted earnings per share	$	0.80		$	0.80						$	0.76
Weighted average common shares - basic		23,288,635			3,464,356		1,444,892			22		28,197,883
Weighted average common shares - diluted		23,368,503			3,731,780		1,177,468			22		28,277,751

Unaudited Pro Forma Condensed Combined Statement of Income

For the Year Ended December 31, 2016

												First Bancorp
	First						Pro Forma					and ASBB - Pro
	Bancorp			ASBB			Adjustments			Notes		Forma Combined
	($ in thousands, except per share data)
Interest income
Interest and fees on loans	$	121,322		$	24,769		$	—				$	146,091
Interest on investment securities		8,782			2,263			(65	)		16		10,980
Other, principally overnight investments		883			316			(378	)		17		821
Total interest income		130,987			27,348			(443	)				157,892
Interest expense
Savings, checking and money market accounts		1,620			550			—					2,170
Time deposits		3,550			922			(401	)		18		4,071
Borrowings		2,437			1,972			(233	)		19		4,176
Total interst expense		7,607			3,444			(634	)				10,417
Net interest income		123,380			23,904			191					147,475
Provision for loan losses - noncovered		2,109			548			—					2,657
Provision (reversal) for loan losses - covered		(2,132	)		—			—					(2,132	)
Total provision (reversal) for loan losses		(23	)		548			—					525
Net interest income after provision (reversal) for loan losses		123,403			23,356			191					146,950
Noninterest income
Service charges on deposit accounts		10,571			1,988			—					12,559
Other charges, commissions and fees		11,913			3,328			—					15,241
Mortgage banking income		2,033			1,710			—					3,743
Commissions from sales of insurance and financial products		3,790			243			—					4,033
SBA consulting fees		3,199			—			—					3,199
SBA loan sale gains		1,433			—								1,433
Bank-owned life insurance income		2,052			185			—					2,237
Securities gains (losses)		3			1,321			—					1,324
Foreclosed property gains (losses)		(625	)		(2	)		—					(627	)
Indemnification asset income		(10,255	)		—			—					(10,255	)
Other gain (losses)		1,437			(17	)		—					1,420
Total noninterest income		25,551			8,756			—					34,307
Noninterest expenses
Salaries and employee benefits		62,064			13,088			—					75,152
Occupancy and equipment expense		11,446			1,786			—					13,232
Merger and acquisition expenses		1,431			—			—					1,431
Settlement of qualified pension plan		—			7,607			(7,607	)		23		—
Intangibles amortization		1,211			—			2,519			21		3,730
Other		30,669			7,969			—					38,638
Total noninterest expenses		106,821			30,450			(5,088	)				132,183
Income before income taxes		42,133			1,662			5,279					49,074
Income taxes		14,624			444			1,951					17,019
Net income		27,509			1,218			3,328					32,055
Preferred stock dividends		(175	)		—			—					(175	)
Net income available to common shareholders	$	27,334		$	1,218		$	3,328				$	31,880
Basic earnings per share	$	1.37		$	0.35							$	1.28
Diluted earnings per share	$	1.33		$	0.33							$	1.25
Weighted average common shares - basic		19,964,727			3,505,387			1,403,861			22		24,873,975
Weighted average common shares - diluted		20,732,917			3,659,575			1,249,673			22		25,642,165

Notes to Unaudited Pro Forma Consolidated Information

($ in thousands except per share data)

Note I – Pro Forma Adjustments

The following pro forma adjustments have been reflected in the unaudited pro forma combined consolidated financial information. All adjustments are based on current assumptions and valuations, which are subject to change.

1. This represents the cash portion of the merger consideration of $15,872, the cash out of the stock options of $11,482 and after-tax merger-related costs of $6,000, partially offset by $3,129 in proceeds from the termination of ASBB’s employee stock ownership plan.

2. This is the estimated fair market value adjustment to the held to maturity securities portfolio.

3. This is the estimated fair value adjustment of the acquired loan portfolio.

4. The existing ASBB allowance for loan losses is not carried over under applicable accounting rules.

5. This is the estimated fair market value adjustment to ASBB’s land and buildings.

6. This is the estimated fair market value adjustment to ASBB’s foreclosed real estate holdings.

7. This is the estimated goodwill that would have been created in this transaction as of June 30, 2017 as a result of the consideration paid being greater than the net assets acquired.

8. This is the estimated core deposit intangible related to acquired core deposit accounts.

9. This is the tax receivable recorded in connection with the cash out of ASBB’s stock options.

10. This is the estimated fair market value adjustment associated with the interest rate being paid on time deposits based on similar market products.

11. This is the estimated fair market value adjustment associated with ASBB’s borrowings.

12. This is the net increase in tax liability resulting from the deferred tax liability associated with the fair market value adjustments at a 37% blended effective tax rate.

13. This is the adjustment necessary to reflect the issuance of 4,909,248 shares of First Bancorp common stock based at a value of $31.26 per share (the price of First Bancorp stock on June 30, 2017), resulting in total stock merger consideration of approximately $153,463.

14. These items of shareholders’ equity are eliminated as part of the accounting entries to reflect the transaction.

15. The adjustment reflects the termination of the employee stock ownership plan as of the merger date.

16. This reflects the expected amortization expense associated with the fair market value adjustment related to securities.

17. This is the estimate of foregone interest income that is expected as a result of the cash outlay described in note 1.

18. This is the estimate of amortization expense associated with the fair market value adjustment related to time deposits.

19. This is the estimate of amortization expense associated with the fair market value adjustment related to borrowings.

20. This is the amount of combined merger expenses recorded by First Bancorp and ASBB associated with this transaction for the six months ended June 30, 2017.

21. This is the estimated amortization expense of the core deposit intangible.

22. This is the adjustment necessary to reflect the expected number of First Bancorp shares of to be issued as merger consideration of 4,909,248.

23. This is the one-time charge that ASBB recorded in 2016 to terminate the company’s defined benefit pension plan. Due to the nonrecurring nature, the financial impact of this item has been eliminated.

Note II – Merger Related Charges

The total estimated cash transaction costs related to the merger are approximately $13.9 million on a pretax basis. These estimated transaction costs are still being developed and will continue to be refined over the next several months, and will include assessing personnel, benefit plans, premises, equipment, and service contracts to determine where they may take advantage of redundancies. These costs are recorded as non-interest expense as incurred. The total estimated cash transaction costs are presented in the following table.

Merger Transaction Costs Schedule
Salaries and employee benefits	$	5,625
Professional fees		4,075
Contract termination fess		3,200
Other noninterest expense		1,000
Total merger related costs		13,900
Applicable tax benefit		4,600
Net expense after tax benefit	$	9,300

Through June 30, 2017, First Bancorp had recorded approximately $0.3 million and ASBB had recorded approximately $0.5 million in such costs, primarily professional fees, in connection with the transaction. For the period from July 1, 2017 until the closing of the merger on October 1, 2017, First Bancorp recorded approximately $0.1 million and ASBB recorded approximately $9.2 million in merger expenses ($6.0 million after-tax). The majority of the remaining approximately $3.8 million in merger-related costs are expected to be recorded by First Bancorp in the fourth quarter of 2017 as a component of noninterest expense.

In addition to the cash charges discussed above, prior to the merger date, ASBB recorded $10.7 million in non-cash charges related primarily to the termination of its Employee Stock Ownership Plan (ESOP) in connection with the closing of the merger. Although the charges lowered ASBB’s reported earnings for the pre-merger period, additional paid-in-capital increased by approximately the same amount, and thus these charges did not impact the shareholders’ equity of ASBB.

Note III – Preliminary Purchase Accounting Allocation

The unaudited pro forma combined consolidated financial information reflects the pro forma issuance of 4,909,248 shares of First Bancorp common stock with an aggregate value of $169.3 million, as well as cash consideration of approximately $27.4 million. The merger will be accounted for using the acquisition method of accounting; accordingly, First Bancorp’s cost to acquire ASBB will be allocated to the assets (including identifiable intangible assets) and liabilities of ASBB at their respective estimated fair values as of the merger date. Accordingly, the pro forma purchase price was preliminarily allocated to the assets acquired and the liabilities assumed based on their estimated fair values, as summarized in the following table.

$	153,463		Stock consideration (4,909 shares issued X $31.26 FBNC Stock Price on 6/30/17)
	27,354		Cash consideration – from above
	180,817		Total merger consideration
	96,267		Equity of ASBB at June 30, 2017
	84,550		Preliminary goodwill amount
	6,000		After-tax deal charges to be incurred by ASBB prior to merger
			Fair Value Adjustments
	(130	)	Held to maturity securities
	6,365		Loan mark, net of allowance
	1,800		Foreclosed property mark
	(8,624	)	Premises
	(9,760	)	Core deposit intangible
	435		Time deposits interest rate mark
	233		Borrowings mark
	(3,152	)	Current tax receivable associated with cash out of stock options
	(3,129	)	ESOP termination tax benefit
	3,577		Deferred tax liability associated with fair value adjustments
$	78,165		Total goodwill