The capital purchase programme (CPP) is designed to attract broad participation by healthy banking institutions to help stabilise the financial system and increase lending for the benefit of the U.S. economy.
The preferred stock issued to the Treasury will pay a dividend of 5% for the first five years and 9% thereafter. As part of the programme, the Treasury also received warrants that give the Treasury the option for the next 10 years to purchase a total of 616,308 shares of First Bancorp common stock at an exercise price of $15.82.
Jerry Ocheltree, president and CEO of First Bancorp, said: Although First Bancorp and First Bank were both classified as well-capitalised by all regulatory measures prior to the sale of the preferred stock, the capital markets that we have utilised in the past to help finance our growth have not been available during this economic downturn. This new capital, which is being offered at attractive financial terms, will better allow us to continue to meet the credit needs of the communities we serve.
