First Bancorp of Troy, N.C., said Thursday that it would buy First Savings Bancorp of Southern Pines, N.C., in a $101 million stock swap.

The in-market deal would create an $860 million-asset company with 40 branches in central North Carolina. The combined entity would vault over BB&T Corp. of Winston-Salem, N.C., to control about one-third of the deposit market share in Moore County, and it would be the 10th-largest banking company in the state. The deal is expected to close in the second quarter.

"The combined entity will be a formidable financial institution in one of the best regions in the state," said Jimmie Garner, president and chief executive officer of First Bancorp.

First, which was founded in 1935, is the $535 million-asset parent of First Bank. First Savings, formed in 1922, has $325 million of assets and is the parent of First Savings Bank of Moore County.

Under terms of the pooling-of-interests agreement, First would pay 1.2 times First Savings' book value and 15.5 times its trailing earnings.

First Savings shareholders would get 1.2468 share of First Bancorp stock for each share they own.

Laurie Hunsicker, an analyst at Friedman Billings Ramsey & Co. in Arlington, Va., said the buyer would pick up a solidly performing thrift for a cheap price.

As of Sept. 30, First Savings had a 1.7% return on assets and a 32% efficiency ratio. Its nonperforming assets, at 0.11% of total assets, were well below the industry average, she added.

Bill Samuel, chairman of First Savings, would become vice chairman of First Bancorp and be joined by four other First Savings directors on the combined entity's board.

In midday trading Thursday, First Bancorp's stock price was unchanged, at $17. First Savings' was up 1.69%, at $18.75.

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