EX-99.1

TROY, N.C. - First Bancorp (NASDAQ - FBNC), the parent company of First Bank, announced fourth quarter net income today of $5,144,000, or $0.36 per diluted share, for the three months ended December 31, 2006 compared to net income of $7,413,000, or $0.52 per diluted share, for the fourth quarter of 2005. As discussed below, the earnings for the fourth quarter of 2005 were positively impacted by the partial reversal of a tax loss accrual that had been recorded earlier in the year. The reversal amounted to $1,982,000, or $0.14 per diluted share.

Net income for the year ended December 31, 2006 amounted to $19,302,000, or $1.34 per diluted share, compared to net income of $16,090,000, or $1.12 per diluted share, reported for 2005. Results for 2006 include the write-off loss during the second and third quarters of a merchant credit card receivable amounting to $1,900,000, which had an after-tax impact of $1,149,000, or $0.08 per diluted share, on the Company’s earnings for 2006. Results for 2005 include a loss accrual related to income tax exposure amounting to $4,338,000, or $0.30 per diluted share. The tax loss accrual was originally recorded for $6,320,000 in the third quarter of 2005. This was reduced by $1,982,000 to $4,338,000 in the fourth quarter of 2005 as the result of a reduction in the estimate of the expected loss. The reduced loss estimate was the result of the Company’s decision to participate in a settlement initiative offered by the North Carolina Department of Revenue that offered companies the opportunity to settle certain disputed tax matters with reduced penalties.

The Company experienced strong balance sheet growth in 2006. Total assets at December 31, 2006 amounted to $2.14 billion, 18.6% higher than a year earlier. Total loans at December 31, 2006 amounted to $1.74 billion, an increase of $258 million, or 17.4%, from a year earlier. Total deposits amounted to $1.70 billion at December 31, 2006, an increase of $201 million, or 13.5%, from a year earlier. Virtually all of the loan growth was internally-generated, whereas approximately $44 million of the deposit growth was the result of two branch acquisitions that were completed in the third quarter of 2006. Total shareholders’ equity amounted to $162.7 million at December 31, 2006, a 4.5% increase from a year earlier. Shareholders’ equity was negatively impacted at December 31, 2006 upon the Company’s adoption of new pension plan accounting rules (FASB Statement 158) that resulted in an increase in pension liabilities of $6.0 million, an increase in assets (primarily deferred tax assets) in the amount of $2.2 million, and a reduction to shareholders’ equity of $3.8 million.

The impact of the growth in loans and deposits on the Company’s net interest income was partially offset by declines in the Company’s net interest margin (tax-equivalent net interest income divided by average earning assets). The Company’s net interest margin for the fourth quarter of 2006 was 4.04% compared to 4.37% for the fourth quarter of 2005. The Company’s net interest margin for the twelve months ended December 31, 2006 was 4.18% compared to 4.33% for the twelve months ended December 31, 2005. The 4.04% net interest margin realized in the fourth quarter of 2006 was an eight basis point decrease from the third quarter net interest margin of 4.12%. The compressing margin is primarily due to deposit rates paid by the Company rising by more than loan and investment yields, which is associated with the flat interest rate yield curve currently prevailing in the marketplace. The Company has also been negatively impacted by customers shifting their funds from low cost deposits to higher cost deposits as rates have risen.

The Company’s provision for loan losses amounted to $1,293,000 in the fourth quarter of 2006, an increase of 39.8% over the $925,000 recorded in the fourth quarter of 2005. The provision for loan losses for the twelve months ended December 31, 2006 was $4,923,000, an increase of 61.9% over the $3,040,000 recorded in 2005. The higher loss provisions are primarily the result of higher loan growth realized in 2006 compared to 2005, and to a lesser extent an increase in the level of the Company’s nonperforming assets. Net internal loan growth was $44 million in the fourth quarter of 2006 compared to $36 million in the fourth quarter of 2005, while net internal loan growth was $252 million for the twelve months ended December 31, 2006 compared to $116 million for 2005.

The Company’s ratio of annualized net charge-offs to average loans was 19 basis points in the fourth quarter of 2006 compared to 29 basis points in the fourth quarter of 2005. For the fiscal year, the net charge-off ratio was 11 basis points in 2006 compared to 14 basis points in 2005. The Company’s level of nonperforming assets amounted to $8.4 million at December 31, 2006 compared to $3.1 million at December 31, 2005. This increase was primarily the result of the December 31, 2005 level of nonperforming assets being unusually low. The low level of nonperforming assets was the result of several of the Company's largest nonaccrual loan relationships being reduced to zero in the fourth quarter of 2005, either as a result of cash received or the loan being charged-off. This resulted in the amount of the Company's nonperforming loans at December 31, 2005 reaching its lowest level in over five years. In 2006, the Company experienced more typical activity within its nonaccrual loan category, and the amount of nonaccrual loans increased to a more normal level. The Company’s nonperforming assets to total assets ratio was 0.39% at December 31, 2006 compared to 0.17% at December 31, 2005. This ratio averaged 0.34% for each of the five year ends from 2000-2004.

Noninterest income amounted to $4,058,000 for the fourth quarter of 2006, a 6.7% increase from the $3,803,000 recorded in the fourth quarter of 2005. Noninterest income for the twelve months ended December 31, 2006 amounted to $14,310,000, a decrease of 4.6% from the $15,004,000 recorded in 2005. The decrease in the 2006 amount was caused by the write-off loss of a merchant credit card receivable. During the second quarter of 2006, the Company discovered that it had liability associated with a customer that sold furniture over the internet. The furniture store did not deliver furniture that its customers had ordered and paid for, and was unable to immediately refund their credit card purchases. As the furniture store’s credit card processor, the Company became contractually liable for the amounts that were required to be refunded. During the second quarter of 2006, the furniture store changed management, stated its intention to repay the Company for all funds advanced, and began making repayments to the Company. At June 30, 2006, the Company recorded a $230,000 loss to reserve for this situation. During the third quarter of 2006, the furniture store’s financial condition deteriorated significantly. Accordingly, the Company determined that it should fully reserve for the entire $1.9 million exposure associated with this situation, which resulted in recording an additional loss of $1,670,000. The

Noninterest expenses amounted to $13.9 million in the fourth quarter of 2006, a 13.9% increase over the $12.2 million recorded in the fourth quarter of 2005. Noninterest expenses for the twelve months ended December 31, 2006 amounted to $53.2 million, an 11.7% increase from the $47.6 million recorded in 2005. The increase in noninterest expenses is primarily attributable to costs associated with the Company’s overall growth in loans, deposits and branch network. Since January 1, 2005, the Company’s loans and deposits have increased by 27% and 22%, respectively, and the Company’s branch network has increased from 59 branches to 68 branches. Additionally, in accordance with the new accounting requirements regarding stock-based compensation (FASB Statement 123(R)) that were effective on January 1, 2006, the Company recorded stock option expense of $11,000 ($11,000 after-tax effect) and $325,000 ($247,000 after-tax effect) for the three and twelve month periods ended December 31, 2006, respectively. As permitted by previous accounting standards, no stock option expense was recorded by the Company in 2005, or any prior periods.

The Company’s effective tax rate was 36%-37% for each of the three and twelve month periods ended December 31, 2006. As discussed above, the Company’s income tax expense in 2005 was significantly impacted by a tax loss accrual recorded in the third quarter of 2005 and a partial reversal of this accrual recorded in the fourth quarter of 2005. For more detail on this matter, see the Company’s September 30, 2006 Form 10-Q and December 31, 2005 Form 10-K filed with the Securities and Exchange Commission.

Mr. Ocheltree continued, “On December 31, 2006, our beloved President and Chief Executive Officer, Mr. James H. Garner, retired. Mr. Garner served this company and its customers faithfully for 37 years, and I believe his legacy has positioned the Company for a bright future. We already miss Jimmie, but wish him all the best in retirement. We are pleased that he has graciously agreed to be involved with the Company in 2007, serving as a consultant to ensure a smooth transition of responsibilities, assisting in special projects, and supporting employee and public relations efforts.”

First Bancorp is a bank holding company based in Troy, North Carolina with total assets of approximately $2.1 billion. Its principal activity is the ownership and operation of First Bank, a state-chartered community bank that operates 68 branch offices, with 61 branches operating in a twenty-one county market area in the central piedmont and coastal regions of North Carolina, 3 branches in Dillon County, South Carolina, and 4 branches in Virginia (Abingdon, Dublin, Radford, and Wytheville), where First Bank does business as First Bank of Virginia. The Company also has a loan production office in Blacksburg, Virginia. First Bancorp’s common stock is traded on the NASDAQ Global Select Market under the symbol FBNC.

This press release contains statements that could be deemed forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, which statements are inherently subject to risks and uncertainties. Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future events or results or otherwise are not statements of historical fact. Such statements are often characterized by the use of qualifying words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” or other statements concerning opinions or judgments of the Company and its management about future events. Factors that could influence the accuracy of such forward-looking statements include, but are not limited to, the financial success or changing strategies of the Company’s customers, the Company’s level of success in integrating acquisitions, actions of government regulators, the level of market interest rates, and general economic conditions. For additional information about the factors that could affect the matters discussed in this paragraph, see the “Risk Factors” section of the Company’s most recent report on Form 10-K.

	Three Months Ended December 31,						Percent
($ in thousands except per share data - unaudited)	2006			2005			Change

INCOME STATEMENT

Interest income
Interest and fees on loans	$	32,990			25,766
Interest on investment securities		1,650			1,419
Other interest income		630			555
Total interest income		35,270			27,740			27.1	%
Interest expense
Interest on deposits		13,487			8,537
Other, primarily borrowings		2,585			1,256
Total interest expense		16,072			9,793			64.1	%
Net interest income		19,198			17,947			7.0	%
Provision for loan losses		1,293			925			39.8	%
Net interest income after provision for loan losses		17,905			17,022			5.2	%
Noninterest income
Service charges on deposit accounts		2,346			2,204
Other service charges, commissions, and fees		1,152			1,013
Fees from presold mortgages		273			325
Commissions from financial product sales		313			310
Data processing fees		49			36
Securities gains		-			3
Other gains (losses)		(75	)		(88	)
Total noninterest income		4,058			3,803			6.7	%
Noninterest expenses
Personnel expense		7,638			7,096
Occupancy and equipment expense		1,791			1,536
Intangibles amortization		101			73
Other operating expenses		4,340			3,470
Total noninterest expenses		13,870			12,175			13.9	%
Income before income taxes		8,093			8,650			(6.4	%)
Income taxes		2,949			1,237			138.4	%
Net income	$	5,144			7,413			(30.6	%)


Earnings per share - basic	$	0.36			0.52			(30.8	%)
Earnings per share - diluted		0.36			0.52			(30.8	%)

ADDITIONAL INCOME STATEMENT INFORMATION
Net interest income, as reported	$	19,198			17,947
Tax-equivalent adjustment (1)		117			113
Net interest income, tax-equivalent	$	19,315			18,060			6.9	%


(1) This amount reflects the tax benefit that the Company receives related to its tax-exempt loans and securities, which carry interest rates lower than similar taxable investments due to their tax exempt status. This amount has been computed assuming a 39% tax rate and is reduced by the related nondeductible portion of interest expense.

	Twelve Months Ended December 31,						Percent
($ in thousands except per share data - unaudited)	2006			2005			Change

INCOME STATEMENT

Interest income
Interest and fees on loans	$	120,694			94,097
Interest on investment securities		6,231			5,660
Other interest income		2,282			1,672
Total interest income		129,207			101,429			27.4	%
Interest expense
Interest on deposits		46,032			28,516
Other, primarily borrowings		8,639			4,322
Total interest expense		54,671			32,838			66.5	%
Net interest income		74,536			68,591			8.7	%
Provision for loan losses		4,923			3,040			61.9	%
Net interest income after provision for loan losses		69,613			65,551			6.2	%
Noninterest income
Service charges on deposit accounts		8,968			8,537
Other service charges, commissions, and fees		4,578			3,963
Fees from presold mortgages		1,062			1,176
Commissions from financial product sales		1,434			1,307
Data processing fees		162			279
Securities gains		205			5
Other gains (losses)		(2,099	)		(263	)
Total noninterest income		14,310			15,004			(4.6	%)
Noninterest expenses
Personnel expense		30,678			27,975
Occupancy and equipment expense		6,866			6,002
Intangibles amortization		322			290
Other operating expenses		15,332			13,369
Total noninterest expenses		53,198			47,636			11.7	%
Income before income taxes		30,725			32,919			(6.7	%)
Income taxes		11,423			16,829			(32.1	%)
Net income	$	19,302			16,090			20.0	%


Earnings per share - basic	$	1.35			1.14			18.4	%
Earnings per share - diluted		1.34			1.12			19.6	%

ADDITIONAL INCOME STATEMENT INFORMATION
Net interest income, as reported	$	74,536			68,591
Tax-equivalent adjustment (1)		501			448
Net interest income, tax-equivalent	$	75,037			69,039			8.7	%

(1) See footnote 1 on page 1 of Financial Summary for discussion of tax-equivalent adjustments.

	Three Months Ended December 31,				Twelve Months Ended December 31,
	2006		2005		2006		2005
PERFORMANCE RATIOS (annualized)
Return on average assets		1.01%		1.67%		1.00%		0.94%
Return on average equity		12.20%		19.03%		11.83%		10.39%
Net interest margin - tax equivalent (1)		4.04%		4.37%		4.18%		4.33%
Efficiency ratio - tax equivalent (1) (2)		59.34%		55.69%		59.54%		56.68%
Net charge-offs to average loans		0.19%		0.29%		0.11%		0.14%
Nonperforming assets to total assets (period end)		0.39%		0.17%		0.39%		0.17%

SHARE DATA
Cash dividends declared	$	0.19	$	0.18	$	0.74	$	0.70
Stated book value		11.34		10.94		11.34		10.94
Tangible book value		7.76		7.48		7.76		7.48
Common shares outstanding at end of period		14,352,884		14,229,148		14,352,884		14,229,148
Weighted average shares outstanding - basic		14,333,120		14,212,387		14,294,753		14,165,992
Weighted average shares outstanding - diluted		14,465,235		14,385,115		14,435,252		14,360,032
Shareholders’ equity to assets		7.62%		8.65%		7.62%		8.65%

AVERAGE BALANCES (in thousands)
Total assets	$	2,030,366	$	1,759,279	$	1,922,510	$	1,709,380
Loans		1,713,803		1,463,468		1,623,188		1,422,419
Earning assets		1,897,442		1,639,823		1,797,191		1,593,554
Deposits		1,679,747		1,493,683		1,599,575		1,460,620
Interest-bearing liabilities		1,632,107		1,392,921		1,537,385		1,359,744
Shareholders’ equity		167,276		154,562		163,193		154,871

	For the Three Months Ended
INCOME STATEMENT	December 31, 2006		September 30, 2006 (3)		June 30, 2006		March 31, 2006		December 31, 2005 (2)

Net interest income - tax equivalent (1)	$	19,315		19,174		18,569		17,979		18,060
Taxable equivalent adjustment (1)		117		133		125		126		113
Net interest income		19,198		19,041		18,444		17,853		17,947
Provision for loan losses		1,293		1,215		1,400		1,015		925
Noninterest income		4,058		2,454		3,844		3,954		3,803
Noninterest expense		13,870		13,535		13,064		12,729		12,175
Income before income taxes		8,093		6,745		7,824		8,063		8,650
Income taxes		2,949		2,373		3,029		3,072		1,237
Net income		5,144		4,372		4,795		4,991		7,413

Earnings per share - basic		0.36		0.31		0.34		0.35		0.52
Earnings per share - diluted		0.36		0.30		0.33		0.35		0.52

(2) Net income for the three months ended December 31, 2005 was significantly impacted by the reversal of a portion of a tax loss accrual, amounting to $1,982,000, or $0.14 per share(which decreased income tax expense). This reversal related to a tax loss accrual recorded in the third quarter of 2005 amounting to $6,320,000, or $0.44 per share. This reversal reduced the tax loss accrual to $4,338,000, or $0.30 per share.

PERIOD END BALANCES (in thousands)	December 31, 2006		September 30, 2006		December 31, 2005		One Year Change
Assets	$	2,136,624		2,078,458		1,801,050		18.6	%
Securities		147,182		140,220		127,785		15.2	%
Loans		1,740,396		1,696,835		1,482,611		17.4	%
Allowance for loan losses		18,947		18,465		15,716		20.6	%
Intangible assets		51,394		51,718		49,227		4.4	%
Deposits		1,695,679		1,664,902		1,494,577		13.5	%
Borrowings		210,013		200,013		100,239		109.5	%
Shareholders’ equity		162,705		163,089		155,728		4.5	%

	For the Three Months Ended
YIELD INFORMATION	December 31, 2006		September 30, 2006		June 30, 2006		March 31, 2006		December 31, 2005

Yield on loans		7.64%		7.54%		7.36%		7.16%		6.99%
Yield on securities - tax equivalent (1)		4.98%		5.13%		5.09%		5.06%		4.82%
Yield on other earning assets		5.82%		5.61%		5.60%		5.12%		4.39%
Yield on all interest earning assets		7.40%		7.32%		7.15%		6.95%		6.74%

Rate on interest bearing deposits		3.65%		3.44%		3.18%		2.88%		2.61%
Rate on other interest bearing liabilities		6.19%		6.17%		5.96%		5.54%		5.30%
Rate on all interest bearing liabilities		3.91%		3.72%		3.44%		3.08%		2.79%

Interest rate spread - tax equivalent (1)		3.49%		3.60%		3.71%		3.87%		3.95%
Net interest margin - tax equivalent (2)		4.04%		4.12%		4.22%		4.33%		4.37%
Average prime rate		8.25%		8.25%		7.90%		7.42%		6.96%


ASSET QUALITY DATA ($ in thousands)	December 31, 2006		September 30, 2006		June 30, 2006		March 31, 2006		December 31, 2005

Nonaccrual loans	$	6,852		5,170		3,973		3,283		1,640
Restructured loans		10		11		12		12		13
Accruing loans > 90 days past due		-		-		-		-		-
Total nonperforming loans		6,862		5,181		3,985		3,295		1,653
Other real estate		1,539		1,799		2,024		1,451		1,421
Total nonperforming assets	$	8,401		6,980		6,009		4,746		3,074

Net charge-offs to average loans - annualized		0.19%		0.11%		0.09%		0.03%		0.29%
Nonperforming loans to total loans		0.39%		0.31%		0.24%		0.21%		0.11%
Nonperforming assets to total assets		0.39%		0.34%		0.30%		0.25%		0.17%
Allowance for loan losses to total loans		1.09%		1.09%		1.08%		1.07%		1.06%

For Immediate Release:	For More Information,
January 25, 2007	Contact: Jerry L. Ocheltree
	910-576-6171