First Bancorp in Southern Pines, N.C., has terminated loss-share agreements tied to a pair of failed-bank acquisitions.
The $3.5 billion-asset company said that its First Bank unit paid $2 million to the Federal Deposit Insurance Corp. to end the agreements, which stemmed from its purchase of Cooperative Bank in Wilmington, N.C., in 2009 and Bank of Asheville in Asheville, N.C., in 2011.
Under the early-termination agreement, announced Thursday, First Bank will be responsible for all future losses and recoveries associated with the failed banks' assets. It will record a pretax third-quarter expense of about $5.7 million to cover the payment and the write-off of the remaining FDIC indemnification asset.
The company said it expects a "positive impact" on future earnings from the early termination, which would eliminate the indemnification asset expense.
First Bank operates 88 branches in North Carolina and South Carolina.