Ex-Politician Touts Campaign to Improve First Bancorp in N.C.

Richard Moore, who has spent the past year overseeing a turnaround at First Bancorp in Troy, N.C., is quick to share his political opinions.

Politics comes naturally for Moore, who served two terms as North Carolina's state treasurer and ran an unsuccessful campaign to become the Democratic Party's gubernatorial nominee in 2008.

Moore joined First Bancorp's board less than a year after that primary defeat, and he became its CEO in May. Since then, he has been aggressively unloading bad assets at the $3.2 billion-asset company. First Bancorp raised $34 million in December to support the effort.

First Bancorp also lost $26 million last year, with most of the red ink spilling in the fourth quarter. But total risk-based capital is solid, ending last year at 16.65%, and Moore believes the company can get back on its front foot in 2013.

Moore is also a managing director at Relational Investors, a San Diego firm that invests heavily in the banking sector, and a former chairman of the North Carolina State Banking Commission.

In a wide-ranging interview, he discusses his efforts at First Bancorp, wrangling in Washington and whether he still gets the itch to return to politics. Here is an excerpt.

How would you describe your transition from political life to running a bank?
RICHARD MOORE: It is very different managing a publicly traded company in the private sector. Still, many of the skills I mastered [as state treasurer] are, hopefully, the same. It is all about charting a clear course, and my tenure as state treasurer helped me tremendously.

I spent eight years as the sole trustee of $70 to $90 billion. As part of that job, I developed working relationships with some of the smartest financial minds in the world who helped me with understanding their financial strategies. As treasurer of all the public employees' retirement money, I also spent eight years doing due diligence on those investments.

How did you approach First Bancorp's turnaround?
As CEO, I spent most of my time last year looking at our biggest obstacles to becoming an extremely healthy and profitable institution again.

The answer became quite clear. We had spent a lot of time in a business we weren't good at — foreclosing on loans and disposing assets. It had consumed us, so it made a lot of sense to figure out how to put that behind us in the most cost-efficient way for shareholders. We seemed to have done that and we can now refocus our efforts on making new loans and serving our customers.

There's a growing belief that we will see a new spike in foreclosures. What are you doing to prepare for that?
What we're trying to do is make the best loans we can make every day. We're trying to use the experience of the downturn to make necessary adjustments to our underwriting, meet customers' needs and protect against the downside.

Well-run institutions are being more vigilant and paying more attention to early signs that a loan may be in trouble. We're making sure that we are working with our customers in every way we can to protect our loans.

How will sequestration affect First Bancorp?
I think it is all unfortunate political bluster and it is irrelevant to my business.

What does the road ahead look like in 2013?
We're just getting started. We think we're big enough to have the kind of back office [resources], efficiencies and capabilities to do the things that large banks do well.

At the same time, we can continue to really know our customers and do what a small bank does well. That includes greeting people when they come through the door and marrying a small town approach with a large banking platform of services and abilities.

What are those services?
We've got a lot going on in this bank that can make the customer experience better. Later this year we'll be rolling out a new and broader selection of secondary mortgages. Someone can walk into an office and be met by an extremely trained and well-qualified broker with a wide variety of products. And they will continue to offer our in-house product.

We're going to try and be right there in the middle to meet our customers' needs.

How will the qualified mortgage rule shape those efforts?
I think it is extremely unfortunate that the political powers that be are treating all banks the same. I don't have a single derivatives product in my portfolio. I'm very risk averse, and there should be a sliding scale [for capital] based on how much risk you take.

I think [qualified mortgage] rules are going to be really painful for smaller banks. It comes back to public policy. How do you keep a family's money safe? Unless Wake County [in North Carolina] stops making its bond payments, nobody is going to take my bank away from me.

First Bancorp was involved with failed-bank deals. What is your view of that process?
We bought two failed banks. The five-year time limit that covers the loss share is an artificial and arbitrary number.

Why not extend it? And it should be extended more than just a year at a time. Why won't the federal government extend it to eight years? Who loses out on that? No one. In fact, you are creating a greater likelihood that the workout would be better for taxpayers. I have floated that out to our regulators.

Some banks have addressed issues and then found buyers. Could First Bancorp become a seller?
If it is, no one has told me. That's not what I signed up for.

Do you think the political bug will bite you again?
I don't know about the political bug. I also don't know what the future holds. I'm enjoying working at this institution. I'm only 52. I don't know many people who have done as many things as I have done.