UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
                             (Amendment No. ______)

Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|

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|_|   Preliminary Proxy Statement
|_|   Confidential, for Use of the Commission Only (as permitted by Rule
      14a-6(e)(2))
|X|   Definitive Proxy Statement
|_|   Definitive Additional Materials
|_|   Soliciting Material Pursuant to ss.240.14A-12

                                 FIRST BANCORP
                (Name of Registrant as Specified in Its Charter)


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                                  First Bancorp
                              341 North Main Street
                         Troy, North Carolina 27371-0508
                            Telephone (910) 576-6171

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                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                        TO BE HELD THURSDAY, MAY 5, 2005
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To Our Shareholders:

      The annual meeting of  shareholders  of First Bancorp (the "Company") will
be held at the James H. Garner  Conference  Center,  211 Burnette Street,  Troy,
North  Carolina (see map on outside back cover and please note that the location
has changed from previous years) on Thursday, May 5 at 3:00 p.m. local time, for
the purpose of considering and acting on the following matters:

1.    A proposal to elect  eighteen  (18)  nominees to the Board of Directors to
      serve  until the 2006  annual  meeting  of  shareholders,  or until  their
      successors are elected and qualified.

2.    Such other  business  as may  properly  come  before the  meeting,  or any
      adjournment or adjournments thereof.

      Only  shareholders of record as of the close of business on March 11, 2005
are entitled to notice of and to vote at the annual meeting and any adjournments
thereof.

      Whether or not you expect to be  present  at the  annual  meeting,  please
complete, date and sign the enclosed form of proxy and return it promptly in the
enclosed envelope. If you attend the meeting, your proxy will be returned to you
upon request.  Alternative  voting methods using the Internet and telephone also
are available and are described in the proxy statement.

      Please note that the  attached  form of proxy  includes a request from the
Company as to whether or not you plan to attend the annual meeting. For planning
purposes,  management  of  the  Company  would  appreciate  you  filling  in the
appropriate box indicating whether or not you plan to attend the annual meeting.
If you initially indicate that you are not planning to attend and later want to,
or do not  indicate one way or the other,  you are still  welcome and invited to
attend the meeting. See outside back cover for a map.

      The  proxy   statement   accompanying   this  notice  sets  forth  further
information concerning the proposals to be considered at the annual meeting. You
are urged to study this information carefully.

      Included in this package,  in compliance with applicable  regulations,  is
the  Company's  2004 Annual  Report on Form 10-K,  which  includes the Company's
financial  statements  and other  required  disclosures.  Also  included  in the
package is a 2004 Summary  Annual Report,  which includes a financial  overview,
the president's letter, and other general information about the Company.

                       By Order of the Board of Directors

                                 Anna G. Hollers
                                    Secretary




                                  First Bancorp
                              341 North Main Street
                         Troy, North Carolina 27371-0508
                            Telephone (910) 576-6171

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                                 PROXY STATEMENT
--------------------------------------------------------------------------------

INTRODUCTION

      This proxy  statement is furnished to the  shareholders  of First  Bancorp
(hereinafter  sometimes  referred to as the "Company") by the Board of Directors
in connection with the  solicitation of proxies for use at the annual meeting of
shareholders  of the  Company to be held on  Thursday,  May 5, 2005 at 3:00 p.m.
local time, at the James H. Garner Conference Center, 211 Burnette Street, Troy,
North  Carolina (see map on outside back cover and please note that the location
has  changed  from  previous  years),  and at any  adjournment  or  adjournments
thereof.  Action will be taken at the annual  meeting on the items  described in
this proxy  statement and on any other  business that properly  comes before the
meeting.

      This proxy statement and accompanying form of proxy are first being mailed
to shareholders on or about March 30, 2005.

      The  accompanying  proxy  is for  use  at the  2005  Annual  Meeting  if a
shareholder  either will be unable to attend in person or will attend but wishes
to vote by proxy.  Shares may be voted by completing the enclosed proxy card and
mailing it in the postage-paid  envelope  provided,  voting over the Internet or
using a toll-free  number.  Shareholders  should  refer to the proxy card or the
information  forwarded  by the  shareholder's  bank,  broker or other  holder of
record to see which voting options are available. Shareholders who vote over the
Internet may incur costs,  such as telephone and Internet  access  charges,  for
which  the  shareholder  is  responsible.  The  Internet  and  telephone  voting
facilities for eligible  shareholders of record will close at 3:00 a.m.  Eastern
Daylight  Time on May 5,  2005.  Specific  instructions  to be  followed  by any
shareholder  interested in voting via the Internet or telephone are shown on the
enclosed proxy card. The Internet and telephone  voting  procedures are designed
to authenticate  the  shareholder's  identity and to allow  shareholders to vote
their shares and confirm that their instructions have been properly recorded. In
the event that the proxy card does not  reference  Internet or telephone  voting
information  because  you are not the  registered  owner of the  shares,  please
complete and return the proxy card in the self-addressed,  postage-paid envelope
provided.

      Any shareholder  giving a proxy may revoke it at any time before a vote is
taken by (i) duly  executing  a proxy  bearing a later  date;  (ii)  executing a
notice of  revocation  in a written  instrument  filed with the secretary of the
Company;  or (iii)  appearing at the meeting and  notifying the secretary of the
intention to vote in person.  Unless a contrary choice is specified,  all shares
represented by valid proxies  received  pursuant to this  solicitation,  and not
revoked  before  they are  exercised,  will be voted as set forth in this  proxy
statement.  In addition,  the proxy  confers  discretionary  authority  upon the
persons named therein, or their substitutes,  with respect to any other business
that may properly come before the meeting.

      The presence,  in person or by proxy,  of the holders of a majority of the
outstanding  shares of the Company's  common stock entitled to vote is necessary
to  constitute  a quorum at the annual  meeting.  If a quorum is not  present or
represented at the annual meeting, the shareholders present and entitled to vote
have the power to adjourn the meeting  from time to time,  without  notice other
than announcement at the meeting,  until a quorum is present or represented.  At
any such  adjourned  meeting at which a quorum is present  or  represented,  any
business may be  transacted  that might have been  transacted  at the meeting as
originally  notified.  A  shareholder  abstaining  from the vote on a particular
proposal  and  broker  non-votes  will be counted as  present  for  purposes  of
determining  if a quorum is present,  but will be counted as not having voted on
the proposal in question.

      The Company  will bear the entire cost of preparing  this proxy  statement
and of soliciting proxies. Proxies may be solicited by employees of the Company,
either  personally,  by special letter,  or by telephone.  The Company also will
request brokers and others to send solicitation material to beneficial owners of
stock and will reimburse them for this purpose.


                                  Page 1 of 25


                     PRINCIPAL HOLDERS OF VOTING SECURITIES

      Only  shareholders of record as of the close of business on March 11, 2005
will  be  entitled  to  vote  at  the  annual  meeting  or  any  adjournment  or
adjournments  thereof.  The number of outstanding shares entitled to vote at the
shareholders  meeting is 14,118,859.  Shareholders  are entitled to one vote for
each share of the Company's common stock.

      The Company  knows of no person or group who  beneficially  owns more than
five  percent of the  outstanding  common stock of the  Company.  The  Company's
directors,  nominees  for  director,  and  executive  officers  as a  group  own
2,768,618 shares, or 19.61%, of the Company's common stock.

                       PROPOSAL 1 - ELECTION OF DIRECTORS

      Section 3.02 of the Company's bylaws provides that the number of directors
on the Board of  Directors  of the Company  will be not less than three nor more
than 18, as may be fixed by resolution duly adopted by the Board of Directors at
or prior to the  annual  meeting  at which  such  directors  are to be  elected.
Effective as of the 2005 Annual Meeting of  Shareholders to be held May 5, 2005,
the size of the board has been fixed by the Board of Directors at 18 members.

      In the absence of any  specifications  to the  contrary,  proxies  will be
voted for the  election of all 18 of the  nominees  listed in the table below by
casting  an equal  number of votes for each such  nominee.  If, at or before the
time of the meeting,  any of the nominees  listed below becomes  unavailable for
any  reason,  the  proxyholders  have the  discretion  to vote for a  substitute
nominee or  nominees.  The board  currently  knows of no reason why any  nominee
listed below is likely to become unavailable.

      The Company's articles of incorporation provide that, if cumulative voting
applies,  each  shareholder  is  "entitled to multiply the number of votes he is
entitled to cast by the number of directors  for whom he is entitled to vote and
cast the product for a single  candidate or distribute  the product among two or
more  candidates."  Cumulative  voting  procedures  will not be  followed at the
annual meeting unless a shareholder  calls for cumulative  voting as provided in
the Company's articles of incorporation, by announcing at the meeting before the
voting for  directors  starts,  his or her  intention to vote  cumulatively.  If
cumulative voting is properly invoked by a shareholder,  the chair shall declare
that all shares entitled to vote have the right to vote  cumulatively  and shall
thereupon grant a recess of not less than two days, nor more than seven days, as
the chair shall  determine,  or of such other  period of time as is  unanimously
agreed upon.  If  cumulative  voting  applies,  the  proxyholders  may, in their
discretion,  vote the shares to which such proxies  relate on a basis other than
equally  for  each of the  nominees  named  below  and for  less  than  all such
nominees,  but the proxyholders will cast such votes in a manner that would tend
to elect the greatest  number of such nominees (or any  substitutes  therefor in
the case of unavailability) as the number of votes cast by them would permit.

NOMINATIONS FOR DIRECTOR

      Nominees  for  election  to the Board of  Directors  are  selected  by the
incumbent board prior to each annual meeting,  based upon the  recommendation of
the Nominating and Corporate Governance Committee of the Board of Directors, and
the nominees  listed below were  selected in that manner.  Nominations  from the
shareholders  must  be made in  accordance  with  the  Company's  bylaws,  which
generally  require such  nominations  to be made in writing and not less than 60
nor more than 90 days prior to the meeting at which  directors are to be elected
and to include certain  information about the proposed  nominee,  in addition to
other requirements.

      The Company's  bylaws state that no  individual  may be elected to, or may
serve, on the Board of Directors any time after his or her 72nd birthday, except
that if a director is elected to the Board of Directors prior to his or her 72nd
birthday and reaches the age of 72 while serving as a director,  such director's
term shall continue until the next annual meeting of shareholders, at which time
the  director  shall  retire.  The bylaws  allow the Board of  Directors to make
exceptions to this limitation in connection with mergers or acquisitions.  Under
the terms of the Company's merger  agreement with First Savings  Bancorp,  Inc.,
the  applicable  age for Mr.  Samuels as it relates to the mandatory  retirement
noted above is age 75. The bylaws also state that the  foregoing  provisions  do
not apply to any individual  during the time such individual is serving as chief
executive officer of the Company.


                                  Page 2 of 25


      A copy of the bylaw  provision  setting  forth the complete  procedure for
shareholder  nominations  of directors may be obtained  upon written  request to
First Bancorp,  Post Office Box 508, 341 North Main Street, Troy, North Carolina
27371-0508, Attention: Anna G. Hollers, Secretary.


                                  Page 3 of 25


DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS

      The  following  table sets forth  certain  information  as of December 31,
2004,  with  respect  to the  eighteen  nominees  for  election  to the Board of
Directors,  two current directors who are not standing for re-election,  and the
executive officers of the Company (all of these persons may be contacted at Post
Office Box 508, 341 North Main Street,  Troy, North Carolina 27371).  Sixteen of
the eighteen nominees are current directors, whereas two nominees are first time
nominees.  Each nominee was  nominated for election to the Board of Directors by
the  Nominating and Corporate  Governance  Committee as described in the section
below  entitled  "Corporate   Governance  Policies  and  Procedures  -  Director
Nomination Process."

               TABLE OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS



                                                                                              Common Stock
                                                                                          Beneficially Owned (1)
                                                                                      ------------------------------
                                         Current Director (D),           Director
                                            Nominee (N), or             of Company    Number of             Percent
       Name (Age)                        Position with Company             Since        Shares             of Class
-------------------------------    ----------------------------------  ------------   -------------------------------
                                                                                              
Directors and Nominees
----------------------
James H. Garner (75)                   President and CEO (D) (N)           1995         55,945     (2)       0.40%
Jack D. Briggs (65)                             (D) (N)                    1983        101,305     (3)       0.72%
R. Walton Brown (52)                Executive Vice President (D) (N)       2003         31,154     (4)       0.22%
H. David Bruton, M.D. (70)                      (D) (N)                    2000        114,688     (5)       0.81%
David L. Burns (66)                             (D) (N)                    1988         72,948     (6)       0.52%
John F. Burns (57)                  Executive Vice President (D) (N)       2000         75,082     (7)       0.53%
Jesse S. Capel (72)                               (D)                      1983        178,231     (8)       1.26%
Mary Clara Capel (46)                             (N)                       N/A          2,090     (9)       0.01%
Goldie H. Wallace-Gainey (58)                   (D) (N)                    1997        252,881    (10)       1.79%
James G. Hudson, Jr. (65)           Executive Vice President (D) (N)       2001         70,552    (11)       0.50%
George R. Perkins, Jr. (65)                     (D) (N)                    1996        500,443    (12)       3.54%
Thomas F. Phillips (59)                         (D) (N)                    2000         88,613    (13)       0.63%
William E. Samuels (74)                         (D) (N)                    2000        149,631    (14)       1.06%
Edward T. Taws (70)                             (D) (N)                    1986         33,982    (15)       0.24%
Frederick H. Taylor (65)                          (D)                      1983        190,503    (16)       1.35%
Frederick L. Taylor II (35)                       (N)                       N/A          3,084    (17)       0.02%
Virginia C. Thomasson (53)                      (D) (N)                    2000         22,065    (18)       0.16%
A. Jordan Washburn (68)                         (D) (N)                    1995         41,447    (19)       0.29%
Dennis A. Wicker (52)                           (D) (N)                    2001         14,934    (20)       0.11%
John C. Willis (62)                             (D) (N)                    1983        494,375    (21)       3.50%

Non-Director
------------
Executive Officers
------------------
Anna G. Hollers (54)                    Executive Vice President            n/a         91,210    (22)       0.65%
                                              and Secretary
Teresa C. Nixon (47)                    Executive Vice President            n/a         58,266    (23)       0.41%
                                    & Compliance Officer, First Bank
David G. Grigg (54)                      President of Montgomery            n/a         47,915    (24)       0.34%
                                           Data Services, Inc.
Jerry M. Arnold (64)                      Senior Vice President             n/a         16,785    (25)       0.12%
                                        of Operations, First Bank
Eric P. Credle (36)                     Senior Vice President and           n/a         22,201    (26)       0.16%
                                         Chief Financial Officer
Timothy S. Maples (44)                  Senior Vice President and           n/a         23,703    (27)       0.17%
                                           Investment Officer
Lee C. McLaurin (42)               Senior Vice President & Controller       n/a         14,585    (28)       0.10%



                                  Page 4 of 25


----------------------
Notes to Table of Directors, Nominees and Executive Officers:

(1)   Unless otherwise indicated, each individual has sole voting and investment
      power with respect to all shares  beneficially  owned by such  individual.
      The above table includes executive officers' reported shares in the 401(k)
      defined  contribution plan, which are voted by the plan trustee and not by
      the shareholder for whom such shares are listed.  Also included are shares
      subject to options  (exercisable as of December 31, 2004 or within 60 days
      after December 31, 2004) granted under the Company's stock option plan.

(2)   Mr.  Garner's  number of shares  includes 113 shares held in the Company's
      401(k)  defined  contribution  plan,  9,341  shares held  jointly with his
      spouse and exercisable options to purchase 12,001 shares.

(3)   Mr. Briggs'  number of shares  includes 1,289 shares held as custodian for
      his daughter,  58,354 shares held jointly with his spouse, 800 shares held
      by his spouse and exercisable options to purchase 11,250 shares.

(4)   Mr.  Brown's  number of shares  includes 596 shares held in the  Company's
      401(k) defined contribution plan and exercisable options to purchase 6,000
      shares.

(5)   Dr.  Bruton's  number of shares  includes 6,732 shares held by his spouse,
      3,374  shares held as custodian  in a trust for a minor,  and  exercisable
      options to purchase 9,000 shares.

(6)   Mr. D. Burns' number of shares  includes  35,448 shares held by Mr. Burns'
      business interests and exercisable options to purchase 13,500 shares.

(7)   Mr. J. Burns' number of shares includes 2,518 shares held in the Company's
      401(k) defined contribution plan and exercisable options to purchase 9,750
      shares.

(8)   Mr.  Capel's  number  of  shares  includes  55,656  shares  held by Capel,
      Incorporated  of which  Mr.  Capel is  principal  owner and  director  and
      exercisable options to purchase 20,250 shares.

(9)   Ms. Capel,  a nominee for  director,  owned 2,090 shares of the Company at
      December 31, 2004.

(10)  Mrs.  Wallace-Gainey's  number of shares  includes  732 shares held by her
      spouse,  35  shares  held as  custodian  by her  spouse  for a minor,  and
      exercisable options to purchase 18,000 shares.

(11)  Mr.  Hudson's  number of shares  includes 2,429 shares held by his spouse,
      1,780 shares held in the Company's 401(k) defined  contribution  plan, and
      exercisable options to purchase 7,500 shares.

(12)  Mr.  Perkins' number of shares  includes  exercisable  options to purchase
      20,250 shares.

(13)  Mr.  Phillips'  number of shares includes 1,965 shares held by his spouse,
      186 shares  jointly  owned with a  relative,  and  exercisable  options to
      purchase 9,000 shares.

(14)  Mr.  Samuels'  number of shares  includes 33,663 shares held by his spouse
      and exercisable options to purchase 9,000 shares.

(15)  Mr.  Taws' number of shares  includes  8,677 shares held by his spouse and
      exercisable options to purchase 18,750 shares.

(16)  Mr.  Taylor's  number of shares  includes  104,082  shares held in trusts,
      61,962  shares  held by his spouse  and  exercisable  options to  purchase
      20,250 shares.

(17)  Mr. Taylor II, a nominee for  director,  owned 3,084 shares of the Company
      at December 31, 2004.

(18)  Mrs. Thomasson's number of shares includes exercisable options to purchase
      15,765 shares.

(19)  Mr. Washburn's number of shares includes  exercisable  options to purchase
      6,750 shares.


                                  Page 5 of 25


(20)  Mr.  Wicker's number of shares  includes  exercisable  options to purchase
      9,000 shares.

(21)  Mr.  Willis' number of shares  includes  286,591 shares held by his spouse
      and exercisable options to purchase 22,500 shares.

(22)  Ms.  Hollers' number of shares includes 1,043 shares held jointly with her
      daughters, 15,947 shares held in the Company's 401(k) defined contribution
      plan, 3,075 shares held by her spouse and exercisable  options to purchase
      24,751 shares.

(23)  Ms. Nixon's number of shares  includes 12,063 shares held in the Company's
      401(k)  defined  contribution  plan,  2,427  shares  held  by Ms.  Nixon's
      business  interests,  37 shares held in trust for a minor, and exercisable
      options to purchase 32,101 shares.

(24)  Mr.  Grigg's  number of shares  includes  234 shares held jointly with his
      daughters,  117 shares held jointly with his son, 9,350 shares held in the
      Company's  401(k) defined  contribution  plan and  exercisable  options to
      purchase 9,871 shares.

(25)  Mr.  Arnold's number of shares includes 5,967 shares held in the Company's
      401(k) defined contribution plan.

(26)  Mr.  Credle's number of shares includes 1,913 shares held in the Company's
      401(k)  defined  contribution  plan and  exercisable  options to  purchase
      17,851 shares.

(27)  Mr.  Maples'  number of shares  includes 103 shares held in the  Company's
      401(k) defined contribution plan.

(28)  Mr.  McLaurin's number of shares includes 235 shares held in the Company's
      401(k) defined contribution plan and exercisable options to purchase 9,600
      shares.

---------------------

Directors and Nominees

      James H.  Garner  became  President  and  Chief  Executive  Officer  and a
director of the Company and First Bank in 1995.  Mr. Garner has been employed by
First Bank since 1969, serving as Executive Vice President from 1989 until 1995.

      Jack D. Briggs is a funeral director and retail furniture  merchant and is
president and owner of J. Briggs,  Inc., Davidson Funeral Home, Inc., and Carter
Funeral Home,  Inc., and secretary of Piedmont Funeral Home. Mr. Briggs has been
a director of the Company since 1983 and a director of First Bank since 1976.

      R. Walton Brown was the chairman of the Board of Directors, President, and
Chief Executive Officer of Carolina Community  Bancshares,  Inc., a bank holding
company headquartered in Latta, South Carolina, from its inception in 1995 until
its  acquisition  by the Company in January  2003. He served as the president of
Carolina Community Bank, the bank subsidiary of Carolina  Community  Bancshares,
and its  predecessors  from 1979 until January 2003, and now serves as Executive
Vice President of First Bank.

      H. David Bruton,  M.D. is a retired  physician and served as the Secretary
of North  Carolina's  Department  of Health and Human  Services  from 1997 until
2001.  Until  December 31, 1996, he was a practicing  physician  with  Sandhills
Pediatric, Inc. He served as a director of First Savings Bancorp, Inc. from 1979
until First  Savings'  2000 merger with the Company and has served as a director
of the Company and First Bank since that time.

      David L. Burns is the chairman of the Board of Directors.  He is president
of Z. V. Pate,  Inc.,  a Laurel  Hill-based  holding  company for  agricultural,
timber,  restaurants  and retail  sales.  Mr.  Burns has been a director  of the
Company since 1988 and a director of First Bank since 1992.

      John F.  Burns  served as a director  and  President  and Chief  Executive
Officer of First Savings  Bancorp,  Inc. at the time of the First  Bancorp-First
Savings  merger and had been  employed by First  Savings  since 1972.  Since the
merger,  he has served as a director of the  Company and First Bank.  He is also
employed as an Executive Vice President of the Company and First Bank.


                                  Page 6 of 25


      Jesse S. Capel is the  immediate  past chairman of the Board of Directors.
He serves as an executive  officer of Capel,  Incorporated,  a rug manufacturer,
importer  and exporter  located in Troy,  North  Carolina.  Mr. Capel has been a
director of the Company since 1983 and a director of First Bank since 1959.  Mr.
Capel is retiring  from the Board of Directors at the 2005 Annual  Shareholders'
Meeting.

      Mary  Clara  Capel is a member of senior  management  as the  director  of
administration at Capel, Incorporated, a rug manufacturer, importer and exporter
located in Troy,  North  Carolina,  where she has been employed  since 1981. Ms.
Capel is a first time  nominee for the Board of  Directors of the Company and is
the daughter of Jesse S. Capel,  an  independent  director of the  Company.  Mr.
Capel recommended Ms. Capel to the Nominating and Corporate Governance Committee
of the Company for consideration as a board member.

      Goldie H.  Wallace-Gainey  is a private  investor in the Company and other
business  interests.  Ms.  Wallace-Gainey has been a director of the Company and
First Bank since 1997.

      James G.  Hudson,  Jr.  served  as a  director  and  President  and  Chief
Executive Officer of Century Bancorp, Inc., a bank holding company headquartered
in  Thomasville,  North  Carolina,  at the time of the May 2001 Century  Bancorp
acquisition by the Company and had been employed with Century since 1972.  Since
that time, he has served as a director of the Company and First Bank. He is also
employed as an Executive Vice President of First Bank.

      George  R.  Perkins,  Jr. is  President  and Chief  Executive  Officer  of
Frontier  Spinning Mills,  Inc., a yarn manufacturer  located in Sanford,  North
Carolina,  and has served in such capacity  since 1996.  Mr.  Perkins has been a
director of the Company and First Bank since 1996.

      Thomas F.  Phillips is an  automobile  dealer and owner of Phillips  Ford,
located in Carthage,  North  Carolina.  He served as a director of First Savings
Bancorp,  Inc.  from 1985 until First  Savings' 2000 merger with the Company and
has served as a director of the Company and First Bank since that time.

      William  E.  Samuels is  vice-chairman  of the Board of  Directors  of the
Company and First Bank.  He was the  President  and Chief  Executive  Officer of
First  Savings  Bancorp,  Inc.  until his  retirement  in 1998. He is the former
chairman of the Board of Directors of First Savings Bancorp,  Inc. and served as
a director of First Savings from 1977 until First  Savings' 2000 merger with the
Company.  He has served as a director  of the  Company and First Bank since that
time.

      Edward  T.  Taws,   Jr.  is  Chairman   of  Fletcher   Industries/Fletcher
International,  a manufacturer of textile  machinery  located in Southern Pines,
North  Carolina.  Mr. Taws has been a director  of the Company  since 1986 and a
director of First Bank since 1992.

      Frederick H. Taylor is President of Troy Lumber Company,  located in Troy,
North  Carolina.  Mr. Taylor has been a director of the Company since 1983 and a
director of First Bank since 1978. Mr. Taylor is not standing for re-election as
a member of the Board of Directors.

      Frederick L. Taylor II is a vice-president of Troy Lumber Company, located
in Troy,  North Carolina where he has been employed since 1992. Mr. Taylor II is
a first time nominee for the Board of Directors of the Company and is the son of
Frederick  H.  Taylor,  an  independent  director  of the  Company.  Mr.  Taylor
recommended Mr. Taylor II to the Nominating and Corporate  Governance  Committee
of the Company for consideration as a board member.

      Virginia C.  Thomasson  is a  Certified  Public  Accountant  with the firm
Holden,  Thomasson,  &  Longfellow,  P.C.,  located  in  Southern  Pines,  North
Carolina.  She served as a director of First  Savings  Bancorp,  Inc.  from 1997
until First  Savings'  2000 merger with the Company and has served as a director
of the Company and First Bank since that time.

      A. Jordan Washburn was a sales representative for Morrisette Paper Company
located in High Point, North Carolina until his retirement in 2001. Mr. Washburn
has been a director of the Company since 1995 and a director of First Bank since
1994.

      Dennis A.  Wicker is a partner  with the law firm Helms  Mulliss & Wicker,
LLP in Raleigh,  North  Carolina.  Mr. Wicker  served as Lieutenant  Governor of
North  Carolina  from  1993 to 2000.  Mr.  Wicker  is a member  of the  board of
directors of Coca-Cola Bottling Company  Consolidated and Air T, Inc. Mr. Wicker
has been a director of the


                                  Page 7 of 25


Company and First Bank since 2001.

      John C.  Willis  is a  private  investor  in  restaurant  and real  estate
interests.  Mr.  Willis  has been a  director  of the  Company  since 1983 and a
director of First Bank since 1980.

Executive Officers

In  addition  to Mr.  Garner,  Mr.  Brown,  Mr. J. Burns,  and Mr.  Hudson,  the
executive officers of the Company are as follows:

      Anna G. Hollers is Executive  Vice  President and Secretary of the Company
and Executive  Vice President and Secretary of First Bank. She has been employed
by the Company since 1983 and by First Bank since 1972.

      Teresa C. Nixon is  Executive  Vice  President - Loan  Administration  and
Compliance of First Bank. She has been employed by First Bank since 1989.

      David G. Grigg has served as President of Montgomery  Data Services,  Inc.
since its formation in 1984. He was employed by First Bank from 1972 until 1984.

      Jerry M. Arnold is Senior Vice  President - Operations  of First Bank.  He
has been employed by First Bank since 1986.

      Eric P. Credle is Senior Vice President and Chief Financial Officer of the
Company and First Bank. He has been employed by the Company and First Bank since
1997.

      Timothy S. Maples is Senior Vice President and Investment Officer of First
Bank. He was the Chief Financial Officer and Treasurer of First Savings Bancorp,
Inc. from 1993 until First Savings' 2000 merger with the Company.

      Lee C. McLaurin is Senior Vice President and Controller of the Company and
First Bank. He has been employed by the Company since 1987.

BOARD COMMITTEES, ATTENDANCE AND COMPENSATION

Executive Committee

      The Executive  Committee is authorized,  between  meetings of the Board of
Directors,  to perform all duties and  exercise  all  authority  of the Board of
Directors, except those duties and authorities exclusively reserved to the Board
of  Directors  by the  Company's  bylaws or by statute.  The 2004 members of the
Committee  were Mr.  Briggs,  Mr.  Brown,  Mr.  D.  Burns,  Mr.  J.  Burns,  Mr.
Capel-Chairman,  Mr. Garner, Mr. Perkins, Mr. Samuels, Mr. Taws, Mr. Taylor, Mr.
Washburn and Mr. Willis. The Executive Committee held 12 meetings during 2004.

Audit Committee

      The Audit Committee is responsible for the  appointment,  compensation and
oversight of the Company's independent auditors, and must approve in advance all
audit fees and the terms of all non-audit  services  provided by the independent
auditors.  The  Audit  Committee  also  reviews  and  presents  to the  Board of
Directors  information regarding the effectiveness of the Company's policies and
procedures  with respect to auditing,  accounting,  and internal  controls.  The
Audit Committee also reviews the Company's financial reporting process on behalf
of the Board of  Directors.  The 2004  members of the Audit  Committee  were Mr.
Briggs, Dr. Bruton, Mr. D. Burns, Mr. Capel-Chairman,  Ms.  Wallace-Gainey,  Ms.
Thomasson,  Mr. Wicker, and Mr. Willis, each of whom is independent,  as defined
by the National  Association of Securities  Dealers  ("NASD") and the Securities
Exchange Act. The Audit  Committee  held 11 meetings  during 2004.  The Board of
Directors has determined  that Ms.  Thomasson is an "audit  committee  financial
expert" within the meaning of SEC rules and regulations.


                                  Page 8 of 25


Compensation Committee

      The  Compensation  Committee is responsible for reviewing the compensation
policies  and  benefit  plans  of the  Company  and for  making  recommendations
regarding  the  compensation  of its  executive  officers.  The  Committee  also
administers  the Company's  stock option plan. The 2004 members of the Committee
were Mr. Briggs, Mr. D. Burns, Mr.  Capel-Chairman,  Mr. Taws, Mr. Washburn, and
Mr.  Willis,  each  of  whom  is  independent,  as  defined  by  the  NASD.  The
Compensation Committee held four meetings during 2004.

Nominating and Corporate Governance Committee

      The Nominating and Corporate  Governance  Committee is responsible  for i)
identifying  qualified  individuals to become Board members, ii) determining the
composition  of  the  Board  and  its   committees,   and  iii)  developing  and
implementing the Company's corporate governance  guidelines.  The Committee will
consider shareholder  nominees for board membership.  Any shareholder wishing to
nominate a candidate  for director must follow the  procedures  described in the
section  "Nominations For Director" above. The section below entitled "Corporate
Governance  Policies and Practices - Director  Nomination Process" describes the
process  utilized by the  Nominating  and  Corporate  Governance  Committee  for
identifying  and  evaluating  candidates  to be nominated as  directors.  At its
February 2004 meeting, the Nominating and Corporate Governance Committee adopted
a charter,  which is available on the Company's website at  www.firstbancorp.com
under the tab "Investor  Relations."  The 2004 members of the Committee were Mr.
D. Burns, Mr. J. Capel-Chairman,  Mr. Taws, Mr. Washburn and Mr. Willis, each of
whom is  independent,  as  defined by the NASD.  The  Nominating  and  Corporate
Governance Committee held two meetings during 2004.

Attendance

      The Board of Directors  held 14 meetings  during 2004. In 2004, all of the
directors and nominees for re-election, except for Mr. Perkins who attended 4 of
12  Executive  Committee  meetings  and 13 of 14  Board of  Directors  meetings,
attended at least 75% of the aggregate of the meetings of the Board of Directors
and the committees  described  above on which they served during the period they
were directors and members of such committees.

CORPORATE GOVERNANCE POLICIES AND PRACTICES

      The  Company has  developed,  and  operates  under,  corporate  governance
principles  and practices  that are designed to maximize  long-term  shareholder
value,  align  the  interests  of the  board and  management  with  those of the
Company's  shareholders,  and  promote  the highest  ethical  conduct  among the
Company's  directors  and  employees.  Highlights  of  the  Company's  corporate
governance policies, practices and procedures are described below.

Director Independence

      The Board of Directors  believes that a substantial  majority of the board
should consist of directors who are  independent  under rules set forth by NASD.
The Board of Directors makes an annual determination  regarding the independence
of each of the Company's directors. The board last made these determinations for
each  member  of the  board  in March  2005,  based on the  review  of  director
questionnaires designed to elicit information regarding independence.  The Board
of Directors has determined  that 12 of its 18 directors  (assuming the Nominees
listed above are elected) will be independent as  contemplated  by NASD. The six
individuals who are not independent are Mr. Brown, Mr. J. Burns, Mr. Garner, Mr.
Hudson,  Mr.  Perkins  and  Mr.  Samuels.  Each  of  the  directors  who  is not
independent, except Mr. Perkins, is a current or former employee of the Company.
Mr.  Perkins  is  not  considered  independent  under  NASD  criteria  due  to a
transaction  between a business  interest of his and the Company - see  "Certain
Transactions" below.

Annual Director Re-Election

      Since the Company's  inception,  its bylaws have  required that  directors
must  stand  for   re-election   to  the  Board  of  Directors  at  each  annual
shareholders' meeting. The Board of Directors believes that this policy makes it
easier for


                                 Page 9 of 25


shareholders   to  hold  directors  more  directly   accountable  for  corporate
performance  compared  to the  staggered-board  structure  in use at many public
companies, which permits directors to hold their positions for several years.

Separation of the Offices of Chairman and Chief Executive Officer

      The  Board of  Directors  believes  that one of its  main  purposes  is to
protect   shareholders'   interests  by  providing   independent   oversight  of
management,  including the Chief Executive Officer. Although not required by the
Company's  bylaws,  the  Board  of  Directors  has  historically  believed,  and
continues  to  believe,   that  this  objective  is  facilitated  by  having  an
independent  director  serve as  Chairman,  thereby  separating  the  offices of
Chairman of the Board of Directors and Chief Executive Officer.  The Chairman of
the Board is responsible for approving meeting schedules and agendas, as well as
acting as a liaison  between the Chief  Executive  Officer  and the  independent
directors.

Executive Sessions

      At its February 2004 meeting,  the Board of Directors adopted a resolution
requiring  that the  independent  directors of the Company meet at least twice a
year in executive session with no non-independent  directors or employees of the
Company  present.  At  these  meetings,   the  independent  directors  discusses
strategic  or other key issues  regarding  the Company.  Two of these  executive
sessions were held in 2004.

Director Nomination Process

      The  Nominating  and Corporate  Governance  Committee is  responsible  for
identifying  individuals  qualified to become board members and  recommending to
the board the  individuals  for nomination as members of the board.  The goal of
the Nominating and Corporate Governance Committee is to create a board that will
demonstrate objectivity and the highest degree of integrity on an individual and
collective  basis.  In  evaluating  current  members  and  new  candidates,  the
Nominating and Corporate  Governance  Committee considers the needs of the board
and the Company in light of the current mix of director  skills and  attributes.
In addition to requiring  that each director  possess the highest  integrity and
character,  the Nominating and Corporate  Governance  Committee's  evaluation of
director  candidates  includes an assessment of issues and factors  regarding an
individual's familiarity with the Company's geographic market area, independence
as  defined  by  the  various  regulatory   authorities,   business  experience,
accounting and financial  expertise,  diversity,  and awareness of the Company's
responsibilities  to  its  customers,  employees,  regulatory  bodies,  and  the
communities  in which it  operates.  The  Nominating  and  Corporate  Governance
Committee  also  takes  into  consideration  the  board's  established  policies
relating to the board's retirement policy and the ability of directors to devote
adequate time to board and committee matters.  When the Nominating and Corporate
Governance  Committee is  considering  current board members for  nomination for
reelection,   the  Committee  also  considers  prior  board   contributions  and
performance, as well as meeting attendance records.


      The  Nominating and Corporate  Governance  Committee may seek the input of
the other members of the board and  management  in  identifying  and  attracting
director  candidates  that are consistent  with the criteria  outlined above. In
addition,  the Committee may use the services of  consultants  or a search firm,
although it has not done so in the past. The Nominating and Corporate Governance
Committee will consider  recommendations  by Company  shareholders  of qualified
director  candidates  for possible  nomination  to the board.  Shareholders  may
recommend  qualified director  candidates by writing to the Company's  Corporate
Secretary,  at 341 North Main Street,  Troy,  North Carolina 27371.  Submissions
should include information regarding a candidate's  background,  qualifications,
experience,  and  willingness  to serve as a  director.  Based on a  preliminary
assessment  of  a  candidate's  qualifications,  the  Nominating  and  Corporate
Governance  Committee  may conduct  interviews  with the  candidate  and request
additional  information from the candidate.  The Committee uses the same process
for evaluating all nominees, including those recommended by shareholders.


      In addition,  the Company's bylaws contain specific conditions under which
persons may be  nominated  directly by  shareholders  as  directors at an annual
meeting of shareholders.  The provisions include the condition that shareholders
comply with the  advance  notice  time-frame  requirements  described  under the
section entitled "Nominations for Director" above.


                                 Page 10 of 25


Stock Ownership Requirements

      The  Company's  Board of Directors  has adopted a common  stock  ownership
policy for members of the board. This policy requires that any candidate for the
Board of  Directors  must either own, or commit to acquire,  common stock of the
Company with a monetary value of at least $50,000.  The Board believes that this
stock ownership policy  substantially  enhances  shareholder value by materially
aligning the Board's interest with those of the shareholders.

Mandatory Retirement

      The Company's  bylaws state that no  individual  may be elected to, or may
serve, on the Board of Directors any time after his or her 72nd birthday, except
that if a director is elected to the Board of Directors prior to his or her 72nd
birthday and reaches the age of 72 while serving as a director,  such director's
term shall continue until the next annual meeting of shareholders, at which time
the director shall retire.  The bylaws allow for the Board to make exceptions to
this  limitation in  connection  with mergers or  acquisitions.  The bylaws also
state that the foregoing  provisions do not apply to any  individual  during the
time such individual is serving as chief executive officer of the Company.

Communications with Directors

      The Board of Directors  believes  that it is  important  that a direct and
open  line of  communication  exist  between  the  Board  of  Directors  and its
shareholders and other interested  parties.  Any shareholder or other interested
party who desires to contact one or more of the  Company's  directors may send a
letter to the following address:

      First Bancorp Board of Directors
      PO Box 417
      Troy, North Carolina   27371

      In  addition,  any  shareholder  or  other  interested  party  who has any
concerns or complaints  relating to  accounting,  internal  controls or auditing
matters, may contact the Audit Committee by writing to the following address:

      First Bancorp Audit Committee
      PO Box 417
      Troy, North Carolina   27371

      All such communications will be forwarded to the appropriate party as soon
as practicable without being screened.

Annual Meeting Policy

      Directors  are  expected  to  attend  the  Company's   annual  meeting  of
shareholders.  All members of the board, with the exception of one, attended the
Company's 2004 annual meeting of shareholders.

Cumulative Voting

      The Company's bylaws provide for the  availability of "cumulative  voting"
in  the  election  of  directors.  Under  cumulative  voting,  each  shareholder
calculates the number of votes available to such  shareholder by multiplying the
number of votes to which his or her shares are  normally  entitled by the number
of directors for whom the  shareholder is entitled to vote. The  shareholder can
then  cast the  product  of the  multiplication  for a single  candidate  or can
distribute it in any manner among any number of candidates.  For example,  if 18
directors are to be elected,  a shareholder  who owns 1,000 shares with one vote
per share will have 18,000 votes.  This  shareholder can cast all of these votes
for one  candidate,  or 1,000  for 18  candidates,  or  6,000  for each of three
candidates, or any other mathematically possible combination.

      The  purpose of  cumulative  voting is to  preserve  the right of minority
shareholders,   or  a  group  of  shareholders   acting   together,   to  obtain
representation  on the Board of Directors that is roughly  proportional to their
ownership interest in the corporation. The Company's Board of Directors believes
that the minority representation guaranteed


                                 Page 11 of 25


by cumulative voting is an appropriate feature of corporate democracy and is not
likely to cause harmful factionalism on the board.

      Cumulative  voting  procedures  will not be followed at the annual meeting
unless a shareholder  calls for  cumulative  voting as provided in the Company's
articles of  incorporation,  by announcing at the meeting  before the voting for
directors  starts,  his or her  intention  to vote  cumulatively.  See the third
paragraph  under  Proposal  1 above for more  information  regarding  cumulative
voting.

Code of Conduct

      The Company has had a written code of conduct for many years.  In February
2004,  the Board of Directors  adopted a revised Code of Conduct that applies to
the Company's  directors and employees,  including the Chief Executive  Officer,
Chief  Financial  Officer and Principal  Accounting  Officer.  The Code includes
guidelines  relating to ethical  handling of actual or  potential  conflicts  of
interest, compliance with laws, accurate financial reporting, and procedures for
promoting  compliance  with, and reporting  violations of, the Code. The Code of
Conduct is  available  upon  written  request to the  following  address:  First
Bancorp, Attention: Corporate Secretary, PO Box 508, Troy, North Carolina 27371.

COMPENSATION OF DIRECTORS

      In January 2004, the Company engaged an outside consultant to evaluate the
level of the  Company's  director  compensation.  The  consultant's  process  of
assessing the appropriateness of compensation  arrangements  involved the use of
peer data to determine the extent to which the Company's  director  compensation
arrangements   were   competitive   within  both  the  Company's   industry  and
geographical  area. As a part of this  assessment,  the consultant  compared the
Company's arrangements, both in whole and in part, with those of other financial
institutions  of  similar  size  and  performance  both  within  the  state  and
nationally.  This peer group was a subset of the broader peer group to which the
Company  compares its total returns to  shareholders.  Based on this evaluation,
the Company set its monthly retainer at $500, and the fee for each board meeting
attended at $250. Normally, meetings are held monthly. Such directors who served
on the Executive Committee, Nominating and Corporate Governance Committee, Audit
Committee,  or Compensation  Committee  received $250 for each committee meeting
attended.

      In 2004,  directors  of the Company  were also  compensated  $250 for each
meeting  attended for their  service as directors on the boards of the Company's
subsidiaries.  As it relates  to First  Bank,  the  Company's  most  significant
subsidiary,  all directors of the Company are members of the First Bank Board of
Directors. Various combinations of six to nine directors of the Company serve on
the boards of Montgomery  Data Services and First  Bancorp  Financial  Services,
subsidiaries of the Company,  and First Bank Insurance Services, a subsidiary of
First Bank. The boards of First Bank and Montgomery Data Services  normally meet
on a monthly basis,  whereas the First Bancorp Financial Services and First Bank
Insurance Services boards normally meet on a quarterly basis.

      In 2004,  non-employee  directors of the Company also  participated in the
Company's  stock option plan.  The  non-employee  director  portion of the stock
option  plan in effect  during 2004  provided  that on June 1 of each year for a
five-year  period  beginning  on June 1, 2004 and ending on June 1,  2009,  each
non-employee  director  of the  Company  received  or will  receive an option to
acquire  2,250 shares (as adjusted for the November 2004 3-for-2 stock split) of
the Company's common stock over a 10 year term at an exercise price equal to the
fair market value of such stock on the date of grant.  At December 31, 2004, the
fourteen  directors who were not employees of the Company held aggregate options
to purchase 203,265 shares at exercise prices ranging from $4.83 to $19.69.

      The Board of Directors has elected to maintain the fee structure described
above in 2005.

      In addition to the compensation  described above, the Company provides one
of its directors,  Mr. Washburn,  with  approximately  100 square feet of office
space,  which Mr.  Washburn  uses  primarily  in  connection  with his work with
various charitable organizations.

      In addition to the  compensation  they  receive for service as  directors,
there are four  board  members  who are also  employees  of the  Company.  Those
directors are Mr. Brown, Mr. J. Burns, Mr. Garner, and Mr. Hudson.  Compensation
related to Mr. J. Burns and Mr.  Garner is  disclosed in the  following  section
entitled  "Compensation  of Executive  Officers."  Mr. Brown and Mr. Hudson each
have  employment  agreements  with the Company  that are  consistent  with those
described in the section below entitled  "Compensation  Of Executive  Officers -
Employment


                                 Page 12 of 25


Contracts and Change in Control  Agreements."  In 2004,  Mr. Brown received cash
compensation (salary and bonus) of $183,750 for his service as an employee,  and
the Company paid club  memberships  totaling  $952 on his behalf.  In 2004,  Mr.
Hudson received cash compensation (salary and bonus) of $195,276 for his service
as an employee,  and the Company paid club  memberships  totaling  $2,315 on his
behalf.

COMPENSATION OF EXECUTIVE OFFICERS

      Summary  Compensation  Table. The following table sets forth  compensation
paid by the Company in the forms specified  therein for the years ended December
31, 2004,  2003 and 2002 to (i) the chief  executive  officer of the Company and
(ii) the Company's four most highly  compensated  executive  officers other than
the chief executive officer.

                           SUMMARY COMPENSATION TABLE



                                                                       Long Term Compensation
                                                             ------------------------------------------
                            Annual Compensation                        Awards                Payouts
                 ------------------------------------------  ---------------------------  -------------
   (a), (b)           (c)           (d)            (e)           (f)            (g)            (h)           (i)
                                                  Other                     Securities                       All
     Name,                                       Annual       Restricted    Underlying                      Other
   Principal                                     Compen-        Stock        Options/         LTIP         Compen-
   Position         Salary       Bonus (1)       sation       Award (s)        SARs          Payouts      sation (2)
   and Year           ($)           ($)            ($)           ($)          (# sh)           ($)           ($)
---------------  -------------  ------------  -------------  ------------  -------------  -------------  ------------
                                                                                     
James H. Garner, President and Chief Executive Officer
     2004              $275,000    $ 201,137           $ --          $ --             --           $ --      $ 66,090
     2003               260,000      195,310             --            --             --             --        31,418
     2002               240,000      172,300             --            --             --             --        30,127
Anna G. Hollers, Executive Vice President and Secretary
     2004              $202,740     $ 87,000           $ --          $ --          9,001           $ --      $ 24,208
     2003               186,000       73,000             --            --             --             --        19,123
     2002               168,950       60,000             --            --             --             --        19,432
Teresa C. Nixon, Executive Vice President and Compliance Officer
     2004              $196,200     $ 87,000           $ --          $ --          9,001           $ --      $ 12,256
     2003               180,000       73,000             --            --             --             --        11,380
     2002               163,000       60,000             --            --             --             --        10,616
John F. Burns, Executive Vice President
     2004              $176,141     $ 44,035           $ --          $ --             --           $ --      $ 26,370
     2003               167,754       44,000             --            --             --             --        23,268
     2002               159,766       43,936             --            --             --             --        22,865
Eric P. Credle, Senior Vice President and Chief Financial Officer
     2004              $165,000     $ 65,000           $ --          $ --          3,001           $ --      $  9,802
     2003               150,000       60,000             --            --             --             --         7,412
     2002               130,000       50,000             --            --             --             --         7,048


---------------------
Notes:

(1)   The amounts in this column represent actual incentive cash bonuses accrued
      during the year indicated.

(2)   The amounts in this column relate to four items: (1) Company contributions
      to the Company's  defined  contribution  plan under Section  401(k) of the
      Internal Revenue Code that covers all Company employees,  (2) the value of
      certain life insurance provided for the indicated executives, based on the
      term insurance  value of such payments as calculated  under IRS Table 2001
      pursuant to IRS Notice  2002-8,  (3) fees earned for service as a director
      of the Company,  or its  subsidiaries,  and  committees  thereof,  and (4)
      "Other,"  which is comprised of the vested value of policy  premiums under
      the  Company's  Long  Term Care  Insurance  Plan for Mr.  Garner  and club
      membership dues for Ms. Nixon. The following table presents the amounts of
      those items:

                                 Page 13 of 25




                                             Defined     Split-Dollar    Director/
                                          Contribution     Insurance     Committee
                                              Plan           Plan           Fees          Other
                                          ------------  --------------  -----------    ------------
                                                                          
James H. Garner                  2004        $9,750        $ 1,652         $22,910       $31,778
                                 2003         9,000          3,018          19,400            --
                                 2002         8,250          2,757          19,120            --
Anna G. Hollers                  2004         9,750            208          14,250            --
                                 2003         7,403            320          11,400            --
                                 2002         7,151            281          12,000            --
Teresa C. Nixon                  2004         9,750             92           1,720           694
                                 2003         9,000            167           1,520           693
                                 2002         8,250            153           1,520           693
John F. Burns                    2004         9,750            260          16,360            --
                                 2003         9,000            468          13,800            --
                                 2002         8,250            415          14,200            --
Eric P. Credle                   2004         9,750             52              --            --
                                 2003         7,313             99              --            --
                                 2002         6,950             98              --            --

Option/SAR Grants in Last Fiscal Year

      The  information set forth below reflects the stock options granted during
2004 to the executive  officers listed in the Summary  Compensation Table above.
Mr.  Garner  and Mr.  Burns did not  receive  option  grants  in 2004.  No stock
appreciation rights have been granted to the executive officers listed.

                      Option/SAR Grants in Last Fiscal Year



                                                                              Potential Realizable Value
                                                                              at Assumed Annual Rates of
                                                                             Stock Price Appreciation for
                                  Individual Grants                                   Option Term
---------------------------------------------------------------------------  ----------------------------
       (a)             (b)              (c)             (d)         (e)         (f)          (g)
                                    Percent of
                    Number of         Total
                    Securities     Options/SARs
                    Underlying      Granted to     Exercise or
                   Options/SARs    Employees in     Base Price   Expiration      5%              10%
      Name         Granted (1)     Fiscal Year       ($/Sh)         Date        ($)              ($)
-----------------  ------------   --------------  -------------  ----------  -----------      -----------
                                                                             
Anna G. Hollers       9,001            4.91%         $ 21.70       4/1/14     $  122,837       $ 311,292
Teresa C. Nixon       9,001            4.91%           21.70       4/1/14        122,837         311,292
Eric P. Credle        3,001            1.64%           21.70       4/1/14         40,955         103,787


(1)   All of the above options vested immediately.


                                 Page 14 of 25


Aggregated  Option/SAR  Exercises  in  Last  Fiscal  Year  and  Fiscal  Year-End
Option/SAR Values

      Set forth below is  information  concerning  the exercise of stock options
during  the year ended  December  31,  2004 and  year-end  value of  unexercised
options by the executive officers listed in the Summary  Compensation  Table. No
stock appreciation rights have been granted to the executive officers listed.

               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                      AND FISCAL YEAR-END OPTION/SAR VALUES



                                                          Number of Securities              Value of Unexercised
                                                         Underlying Unexercised                 In-the-Money
                           Shares                            Options/SARs at                   Options/SARs at
                          Acquired                       Fiscal Year End (# sh)              Fiscal Year End ($)
                        on Exercise        Value      ------------------------------    -----------------------------
Name                       (# sh)         Realized     Exercisable    Unexercisable      Exercisable   Unexercisable
----------------        ------------    ------------  -------------  ---------------    ------------- ---------------
                                                                                       
James H. Garner            6,000          $ 65,952         12,001            --           $ 193,456      $       --
Anna G. Hollers            6,375           106,450         24,751         3,000             290,697          37,044
Teresa C. Nixon            1,500            21,951         32,101         2,400             443,280          29,635
John F. Burns              2,250            28,492          9,750         3,000             174,769          53,775
Eric P. Credle             5,400            54,000         17,851         6,000             218,814          74,088


Defined Benefit Plans

      Retirement  Plan.  The  following  table sets forth the  estimated  annual
pension benefits payable at normal  retirement age of 65 to a participant in the
Company's noncontributory defined benefit retirement plan.

                 TABLE OF ANNUAL BENEFITS PAYABLE ON RETIREMENT
                            UNDER THE RETIREMENT PLAN



         Final
        Average                                          Years of Service
         Annual         --------------------------------------------------------------------------------
      Compensation            15                20              25               30                35
      ------------      ------------     -------------    -------------     ------------     -----------
                                                                                
      $  100,000         $  16,300         $  21,700        $  27,100         $  32,500        $  37,900
         150,000            26,800            35,700           44,600            53,500           62,400
         200,000            37,300            49,700           62,100            74,500           86,900
         250,000            39,400            52,500           65,600            78,700           91,800
         300,000            39,400            52,500           65,600            78,700           91,800
         350,000            39,400            52,500           65,600            78,700           91,800
         400,000            39,400            52,500           65,600            78,700           91,800
         450,000            39,400            52,500           65,600            78,700           91,800


      Final  Average  Annual  Compensation  is the  average of the five  highest
consecutive  calendar  years earnings out of the 10 calendar years of employment
preceding  retirement.  Benefits  shown  are  estimated  on the  basis  of "life
annuity" amounts, although participants in the retirement plan may choose from a
variety of benefit  payment  options.  For executive  officers,  current  annual
compensation for the purposes of the retirement plan may be estimated as the sum
of the  "Salary"  and "Bonus"  amounts in the Summary  Compensation  Table.  The
benefits  listed above are not subject to any deduction  for Social  Security or
other offset amounts.  The Company's executive officers appearing in the Summary
Compensation  Table  who are  participants  in the  retirement  plan  and  their
respective  credited years of service are: Mr. Garner, 36 years; Ms. Hollers, 32
years; Ms. Nixon, 16 years; Mr. Burns, 4 years; and Mr. Credle, 7



                                 Page 15 of 25


years.

      Supplemental Executive Retirement Plan. The following table sets forth the
estimated  annual  pension  benefits  payable at normal  retirement age of 65 to
executive officers, other than the CEO, in the Company's SERP. Benefits shown in
the table are prior to deductions  for 50% of social  security  benefits and all
benefits paid under the retirement plan.

                 TABLE OF ANNUAL BENEFITS PAYABLE ON RETIREMENT
                UNDER THE SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

      Final
     Average                           Years of Service
      Annual          ----------------------------------------------
   Compensation            10              15            20 or more
 -----------------    -----------     -----------       ------------
    $  100,000         $   30,000       $  45,000        $    60,000
       150,000             45,000          67,500             90,000
       200,000             60,000          90,000            120,000
       250,000             75,000         112,500            150,000
       300,000             90,000         135,000            180,000
       350,000            105,000         157,500            210,000
       400,000            120,000         180,000            240,000
       450,000            135,000         202,500            270,000

      Final  Average  Annual  Compensation  is the  average of the five  highest
consecutive  calendar  years earnings out of the 10 calendar years of employment
preceding  retirement.  Benefits  shown  are  estimated  on the  basis  of "life
annuity" amounts, although participants in the SERP may choose from a variety of
benefit payment options. For executive officers, current annual compensation for
the purposes of the SERP may be estimated as the sum of the "Salary" and "Bonus"
amounts in the Summary Compensation Table. As noted above, benefits shown in the
table  are  prior to  deductions  for 50% of social  security  benefits  and all
benefits paid under the retirement plan. The Company's executive officers, other
than the CEO,  appearing in the Summary  Compensation Table who are participants
in the SERP and their respective  credited years of service are: Ms. Hollers, 20
years (the maximum for  participants  other than the CEO); Ms. Nixon,  16 years;
Mr. Burns, 4 years; and Mr. Credle, 7 years.

      Mr.  Garner,  the Company's  CEO, is also a participant  in the SERP.  The
provisions of the SERP applicable to him are the same as those described  above,
except that his maximum benefit is 65% of Final Average Compensation compared to
60% for the other  participants of the plan. Based on his years of service,  Mr.
Garner has already reached the maximum benefit.  Accordingly, his benefits under
the SERP,  prior to deductions for 50% of social security  benefits and benefits
paid under the  retirement  plan,  will be determined by  multiplying  his Final
Average Compensation times 65%.

Employment Contracts and Change in Control Agreements

      The Company has entered into  employment  agreements with 21 of its senior
officers, including each officer currently serving as an executive officer.

      The  employment  agreements  have  two to three  year  terms  that  extend
automatically  for an  additional  year on each  anniversary  of the date of the
agreement,  unless  either party gives the other  written  notice on or prior to
such  anniversary  date that the extension will not occur.  The initial term for
each officer in the Summary  Compensation  Table is three years.  The employment
agreements  provide that the officers are  guaranteed  minimum  annual  salaries
equal to their  current  annualized  base  salaries,  and  will  receive  annual
increases  that  are at  least as much as any  percentage  increase  in the U.S.
Consumer  Price  Index  during  the  preceding  twelve  months.  The  employment
agreements  provide  that  each  officer  will be  entitled  to such  insurance,
pension,  profit-sharing  and other benefit plans as are or may become available
generally to employees of the Company.  The employment  agreements  provide that
each officer will be eligible for  participation  in the Company's  Supplemental
Employee  Retirement Plan and Stock Option Plan. The employment  agreements also
provide that each officer will be entitled to reasonable time off



                                 Page 16 of 25


for vacation, sick leave,  bereavement leave, jury duty and military obligations
as are or may become available to employees of the Company in positions  similar
to those of the officer.

      The employment  agreements  provide the Company the right to terminate the
officer's  employment  "for cause" with no further  accrual of  compensation  or
benefits if the Company finds that the officer (i) demonstrated gross negligence
or willful  misconduct in the execution of the officer's duties,  (ii) committed
an act of dishonesty or moral turpitude, or (iii) has been convicted of a felony
or other serious crime.

      In the event that the Company  terminates  an officer  for a reason  other
than for cause,  the Company is obligated to pay the  officer's  base salary for
the remainder of the agreement  term. In addition,  each officer may voluntarily
terminate  employment  by  providing  at least  45 days  written  notice  to the
Company,  in which case the officer's  compensation,  vested rights and employee
benefits will accrue through the date of termination of employment.

      The employment agreements also contain  noncompetition and confidentiality
covenants.  The  noncompetition  covenants  provide  that  upon  termination  of
employment with the Company, the officer may not engage directly, or indirectly,
in any  activity or business  that is in  competition  with the  business of the
Company  within the restricted  territory,  during the  restricted  period.  The
restricted  territory is a 50-mile  radius of each officer's  primary  residence
and/or work location.  The restricted period upon termination by the Company for
cause or voluntary  employee  termination is one year and for termination by the
Company  other  than for  cause is the  remainder  of the  agreement  term.  The
noncompetition  covenant  also  prohibits  solicitation  or  recruitment  of any
employees of the Company  during the  restricted  period,  and  prohibits  sales
contacts or  solicitation  from any  customer of the Company for any products or
services  offered by the  Company  within the  restricted  territory  during the
restricted  period.  The  confidentiality  covenants  prohibit  the officer from
disclosing any  confidential  business secrets or other  confidential  data both
during  the  term of the  employment  agreement  and for a period  of two  years
following the termination of the agreement.

      The  employment  agreements  also  provide  that if there is a "change  in
control"  of the Company  and the  officer's  employment  is  terminated  by the
Company or the officer for any reason, or no reason (other than for cause),  the
Company must pay the officer a severance  payment  equal to the  officer's  base
salary  times a factor that ranges from 1 to 2.9.  The  multiple for each of the
officers listed in the Summary  Compensation  Table above is 2.9.  Control means
the power,  directly or indirectly,  to direct the management or policies of the
Company or to vote 40% or more of any class of voting securities of the Company.
Change in control is defined as a change in control of the  Company  except that
any merger, consolidation or corporate reorganization in which the owners of the
capital stock entitled to vote in the election of directors of the Company prior
to the combination  own 61% or more of the resulting  entity's voting stock will
not be  considered  a  change  in  control  for the  purpose  of the  employment
agreements; provided that a change in control will be deemed to have occurred if
(i) any  "person"  (as that term is used in Sections  13(d) and  14(d)(2) of the
Securities  Exchange  Act of  1934),  other  than a trustee  or other  fiduciary
holding securities under an employee benefit plan of the Company,  is or becomes
the  beneficial  owner (as that term is used in Section 13(d) of the  Securities
Exchange  Act of 1934),  directly  or  indirectly,  of 33% or more of the voting
stock  of  the  Company  or  its  successors;  (ii)  during  any  period  of two
consecutive  years,  individuals who at the beginning of such period constituted
the Board of Directors of the Company or its successors (the "Incumbent  Board")
cease for any reason to constitute  at least a majority of the board;  provided,
that any person who  becomes a director of the Company  after the  beginning  of
such  period  whose  election  was  approved  by a vote of at  least  3/4 of the
directors  comprising  the  Incumbent  Board will be  considered a member of the
Incumbent  Board;  or (iii) there is a sale of all or  substantially  all of the
assets of the Company.  Notwithstanding  the foregoing,  no change in control is
deemed to occur as a result  of any  transaction  that  results  in the  officer
subject to the employment agreement in question, or a group of persons including
such officer,  acquiring,  directly or  indirectly,  33% or more of the combined
voting power of the Company's outstanding securities.

      In  addition  to the  employment  agreement  change in control  provisions
discussed above, all memoranda of options granted under the Company's 1994 Stock
Option Plan and 2004 Stock  Option Plan provide that in the event of a change in
control of the  Company,  which is defined the same as it is above,  all options
become fully  vested and  immediately  exercisable.  Also,  under the SERP,  all
participants  become fully vested in the event of a change in control,  which is
defined the same as it is above.


                                 Page 17 of 25


REPORT OF THE COMPENSATION COMMITTEE

      The  fundamental  philosophy of the Company's  compensation  program is to
offer  compensation  arrangements  that  are (i)  commensurate  with  individual
contributions  to the  performance  of the  Company  and (ii)  competitive  with
publicly  owned  financial   institutions  of  similar  size  and   performance.
Compensation  is  designed  to attract  and retain  individuals  possessing  the
specialized  talents  required  by the  Company  to  remain  competitive  in the
financial services industry.

      In  applying  this  philosophy,   the  Company's  Compensation  Committee,
comprised   entirely   of   independent    directors,    develops   compensation
recommendations  to  be  considered  by  the  entire  Board  of  Directors.  The
Compensation  Committee  directly  determines the  recommendation  regarding the
compensation of the Chief  Executive  Officer.  In addition,  the Committee also
sets forth recommendations  involving (i) compensation policies,  (ii) incentive
compensation, (iii) long-term equity participation and (iv) benefit plans. Prior
to 2004, the Compensation Committee delegated to the Chief Executive Officer the
responsibility to determine appropriate levels of salaries and incentive bonuses
for the other  executive  officers of the  Company.  In 2004,  the  Compensation
Committee   increased  its  role  by  reviewing   and  formally   approving  the
recommendations  of the Company's Chief Executive  Officer as they relate to the
compensation  levels of the Company's other executive  officers.  In determining
appropriate compensation levels, both the Compensation Committee (with regard to
the Chief Executive Officer) and the Chief Executive Officer (with regard to the
other executive  officers)  consider the  demonstration of the leadership skills
needed to enable the Company to achieve the business objectives set forth by the
Board of  Directors.  Periodically,  including in 2004 as discussed  below,  the
Compensation Committee engages outside compensation  consultants to evaluate and
provide recommendations regarding executive officer compensation.

      In January 2004, the Compensation  Committee engaged an outside consultant
to  evaluate  the  compensation  of the Chief  Executive  Officer and each other
executive officer. The consultant met with the Compensation Committee in January
2004,  where he presented the Committee with his assessment of the  compensation
arrangements  for  each  of the  Company's  executive  officers  for  2003.  The
consultant's   process  of  assessing  the   appropriateness   of   compensation
arrangements  involved the use of peer data to determine the extent to which the
Company's  compensation  arrangements  were  competitive  within  the  Company's
industry and  geographical  area. As a part of this  assessment,  the consultant
compared the Company's  arrangements,  both in whole and in part,  with those of
other financial  institutions  of similar size and  performance  both within the
state and nationally.  This peer group was a subset of the broader peer group to
which the Company compares its total returns to  shareholders.  See "Shareholder
Return   Performance."   The  results  of  this  evaluation  were  used  by  the
Compensation  Committee in  recommending  compensation  levels for the Company's
executive officers for 2004.

      Annual  compensation  for the Company's  Chief  Executive  Officer and its
other executive officers  primarily  consists of four types of compensation,  as
set forth below:

            o     base salary;

            o     annual incentive bonus (linked directly to corporate  earnings
                  and/or individual performance);

            o     long-term equity participation  (through the periodic issuance
                  of stock options under the Company's stock option plan), in an
                  effort to more closely  align the  interests of the  executive
                  officers with those of the Company's shareholders; and

            o     benefit plans for executive officers.

      Base Salary.  For the Company's  executive  officers,  including the Chief
Executive  Officer,  base salaries are targeted to approximate  average salaries
for individuals in similar positions with similar levels of responsibilities who
are employed by other publicly owned banking  organizations  of similar size and
performance.  The Company frequently participates in salary/compensation surveys
and has access to other published  salary/compensation data. The results of such
surveys are used in  developing  the  appropriate  levels of base  salaries  for
executive officers.

      Annual Incentive Bonus. For the Company's  executive  officers,  including
the  Chief  Executive  Officer,   annual  incentive  bonuses  are  directly  and
indirectly linked to the Company's earnings and to the executive officer's


                                 Page 18 of 25


individual  performance  as it relates to  enabling  the  Company to achieve its
performance goals.

      For  2004,  as in prior  years,  the  Committee  set the  Chief  Executive
Officer's annual incentive bonus as a percentage of the net income earned by the
Company.  Such  percentage for 2004,  2003 and 2002 was 1% of  consolidated  net
income.

      For the other  executive  officers,  the 2004 annual  incentive  bonus was
based on a combination of (i) a percentage, as determined by the Chief Executive
Officer,  of base salary related to the Company's  achievement of  predetermined
earnings  targets and (ii)  additional  amounts,  at the discretion of the Chief
Executive Officer, related to the executive officer's individual contribution to
the overall  achievement of Company-wide  earnings targets. In 2004, the Company
did not meet all of its  earning  targets  set by the  Board of  Directors.  The
Company met its return on equity target; however, the Company failed to meet the
2004 earnings target by  approximately  2%. However the  Compensation  Committee
concluded  that  because  of  unanticipated  expenses,  such  as  Sarbanes-Oxley
compliance  costs,  Internet Banking start-up costs,  higher external audit fees
and new branch start-up costs that were not included in the 2004 budget on which
the  earnings  target was  based,  bonuses  should be paid under the  Management
Incentive Plan as if the earnings target were met. Accordingly, the salary-based
portion of the 2004 incentive bonus for executive  officers other than the Chief
Executive Officer ranged from 15% to 43% of the respective base salaries.  Based
on the 1% of net income formula  discussed above, the Chief Executive  Officer's
incentive bonus amounted to 73% of his base salary.

      Long-Term Equity Participation.  For the Company's CEO and other executive
officers  and key  employees,  stock  options  may be  granted  each year at the
discretion of the Board of  Directors.  Although no formal system is employed in
determining the number of options granted, either in the aggregate or to any one
individual, the Board considers the Company's current financial performance, the
individual's  level of responsibility and the number of previously granted stock
options.  Options  are  not  intended  to  be an  ongoing  component  of  annual
compensation,  but  instead  are  typically  granted to  attract  and retain new
employees,  to recognize changes in responsibilities of existing employees,  and
to  periodically  reward  exemplary  performance.  In  recognition of increasing
responsibilities  associated with new regulations and the Company's growth,  the
Compensation  Committee granted stock options in 2004 to Ms. Hollers, Ms. Nixon,
and Mr. Credle, as reflected in the Summary Compensation Table.

      Benefit Plans For Executive  Officers.  In addition to the  aforementioned
methods of  compensating  executive  officers,  the Company  provides  executive
officers  with the same  benefits  that are  afforded to all Company  employees,
including matching  contributions under the Company's defined contribution plan,
retirement  benefits  under  the  Company's  pension  plan and  group  insurance
covering health, life and disability.  Also,  executive officers  participate in
the Company's Supplemental Executive Retirement Plan. Until mid-2004,  executive
officers also  participated in a Split-Dollar  Insurance Plan.  However,  due to
recently passed  congressional and IRS regulations,  the Company  terminated the
Split-Dollar Insurance Plan in 2004.

      In 2004,  the Company  adopted the First Bancorp Long Term Care  Insurance
Plan ("Long Term Care  Plan").  This plan is intended to provide for the payment
of insurance  premiums for a long term care insurance policy and the delivery of
long term care benefits under the terms of such a policy for such employees that
the Compensation Committee directs. Mr. Garner is currently the only participant
in the Long Term Care  Plan.  In 2004,  a long term care  insurance  policy  was
obtained for his benefit. The policy calls for 10 annual payments of $22,880 per
year. Mr.  Garner's  right to have policy  premiums paid by the Company vests as
follows:  Upon the  completion  of one year of service (as defined in the plan),
the Company is obligated to pay one-third of the aggregate policy premiums; upon
the  completion  of two  years of  service,  the  Company  is  obligated  to pay
two-thirds of the aggregate policy premiums;  upon the completion of three years
of  service,  the  Company  is  obligated  to pay 100% of the  aggregate  Policy
premiums.  However,  upon the occurrence of disability of Mr. Garner (as defined
in the Plan),  Mr. Garner's right to have 100% of the aggregate  policy premiums
paid by the Company becomes fully vested.

      Employment  Agreements.  Over the past  several  years,  the  Company  has
entered into employment  agreements with each executive officer,  as well as ten
other  senior  officers.  These  agreements  were  determined  to be in the best
interest of the  Company,  among  other  reasons,  (i) to better  compete in the
retention of  executive  and senior  officers  with peer banks that have similar
agreements,  (ii) to  provide  certain  protections  to the  Company,  including
noncompetition  and  confidentiality  covenants in the event that  employment is
terminated,  and  (iii) to  protect  the  Company,  through  change  in  control
provisions, from loss of executive and senior officers as a result of any change
in control  possibilities  that might arise.  The  provisions of the  employment
agreements  were   previously   described  in  more  detail  under  the  heading
"Employment Contracts and Change in Control Agreements."


                                 Page 19 of 25


      The above is a summary of current  practice  regarding  CEO and  executive
officer  compensation  matters  considered  by the  Committee.  Because  CEO and
executive  officer  salaries are not  currently (or in the  foreseeable  future)
expected  to exceed  those  limitations  provided  under  Section  162(m) of the
Internal  Revenue Code, the Committee has no specific  policy that addresses the
deductibility  for income tax purposes of  "qualified  compensation"  under said
code section.

      RESPECTFULLY SUBMITTED BY THE COMPENSATION COMMITTEE OF
      THE BOARD OF DIRECTORS:

             Jack D. Briggs                     Edward T. Taws, Jr.
             David L. Burns                     A. Jordan Washburn
             Jesse S. Capel                     John C. Willis


                                 Page 20 of 25


                         SHAREHOLDER RETURN PERFORMANCE

      The performance graph shown below compares the Company's  cumulative total
return to shareholders for the five-year period commencing December 31, 1999 and
ending December 31, 2004,  with the cumulative  total return of the Russell 2000
Index  (reflecting  overall  stock market  performance  of  small-capitalization
companies),  and an index of banks with  between  $1  billion  and $5 billion in
assets,  as constructed  by SNL  Securities,  LP (reflecting  changes in banking
industry stocks).  The graph and table assume that $100 was invested on December
31, 1999 in each of the Company's  common stock, the Russell 2000 Index, and the
SNL Bank Index, and that all dividends were reinvested.

                                  First Bancorp
              Comparison of Five-Year Total Return Performances (1)
                       Five Years Ending December 31, 2004

                              [LINE GRAPH OMITTED]



                                                    Total Return Index Values (1)
                                                            December 31,
                              ---------------------------------------------------------------------------
                               1999         2000          2001          2002          2003         2004
                              -------      -------       -------       -------      -------      --------
                                                                               
First Bancorp                 $100.00      $100.00       $148.75       $160.85      $220.78      $ 296.65
Russell 2000                   100.00        96.98         99.39         79.03       116.38        137.71
Index-Banks between $1
  billion and $5 billion       100.00       113.48        137.88        159.16       216.44        267.12


Notes:

(1)   Total  return  indices  were  provided  from an  independent  source,  SNL
      Securities LP, Charlottesville, Virginia, and assume initial investment of
      $100 on December  31,  1999,  reinvestment  of  dividends,  and changes in
      market values.  Total return index  numerical  values used in this example
      are for illustrative purposes only.


                                 Page 21 of 25


      Shareholders  should  recognize  that  corporations  often use a number of
other performance  benchmarks (in addition to shareholder return) to set various
levels of executive  officer  compensation.  Shareholders  should thus  consider
other relevant performance indicators in assessing  performance,  such as growth
in earnings per share,  growth in book value per share, growth in cash dividends
per share, and other performance measures such as return on assets and return on
shareholders' equity.

Certain Transactions

      Certain of the directors,  nominees,  principal  shareholders and officers
(and  their   affiliates)  of  the  Company  have  deposit  accounts  and  other
transactions  with  First  Bank,  including  loans  in the  ordinary  course  of
business.  All  loans or  other  extensions  of  credit  made by  First  Bank to
directors,  nominees,  principal shareholders and officers of the Company and to
affiliates  of such  persons  were made in the  ordinary  course of  business on
substantially the same terms, including interest rates and collateral,  as those
prevailing  at the time  for  comparable  transactions  with  independent  third
parties  and did not  involve  more than the normal  risk of  collectibility  or
present  other  unfavorable  features.  At  December  31,  2004,  the  aggregate
principal  amount of loans to directors,  nominees,  principal  shareholders and
officers of the  Company and to  affiliates  of such  persons was  approximately
$13,764,000.

      Under the authority of the Company's  share  repurchase  plan, the Company
made the following  repurchases  from directors of the Company.  All amounts are
adjusted for the Company's  November 2004 stock split. On February 23, 2004, the
Company  repurchased 15,000 shares from Ms.  Wallace-Gainey at a price of $22.21
per share,  the prevailing  market value at the time of the purchase.  On August
24, 2004,  the Company  repurchased  3,750 shares from Dr.  Bruton at a price of
$21.71 per share,  the prevailing  market value at the time of the purchase.  On
October 27, 2004, the Company  repurchased  12,251 from Mr. Garner at a price of
$24.47 per share, the prevailing market value at the time of the purchase.

      On November 22, 2004, the Company purchased land located in Sanford, North
Carolina from a partnership in which Mr. Perkins, a director of the Company,  is
a 50% owner. The purchase price of the land was $750,000. The purchase price was
negotiated by Mr. Perkins and by Ms. Nixon, an executive officer of the Company,
subject to board approval. The Board of Directors determined that $750,000 was a
fair price for the property  based on a sale of adjacent  land owned by the same
partnership,  which had recently been sold to an independent third party, giving
effect to  characteristics  of the land under  consideration  that  enhanced its
value. The Audit Committee also approved this transaction.

Section 16(a) Beneficial Ownership Reporting Compliance

      Under the securities laws of the United States,  the Company's  directors,
its executive  officers,  and any persons holding more than 10% of the Company's
common  stock are required to report their  ownership  of the  Company's  common
stock  and  any  changes  in  that  ownership  to the  Securities  and  Exchange
Commission  and  the  National   Association  of  Securities  Dealers  Automated
Quotation  System.  Specific due dates for these reports have been  established,
and the  Company is required  to report in this proxy  statement  any failure to
file by these dates during 2004. To the Company's knowledge,  during 2004 all of
these  filing  requirements  were  satisfied  by  the  Company's  directors  and
officers.


                                 Page 22 of 25


AUDIT COMMITTEE REPORT

      Management has the primary responsibility for the financial statements and
the reporting process. The Company's  independent auditor,  which for the fiscal
year 2004 was KPMG LLP ("KPMG"), is responsible for expressing an opinion on the
conformity  of  the  Company's  audited   financial   statements  to  accounting
principles  generally accepted in the United States of America and for attesting
to the Company's control over financial reporting. The Company's Audit Committee
pre-approves all audit services and permitted  non-audit services (including the
fees and  terms  thereof)  to be  performed  by the  independent  auditors.  The
Committee may form and delegate authority to subcommittees  consisting of one or
more members when appropriate, including the authority to grant pre-approvals of
audit  and  permitted  non-audit  services,  provided  that  decisions  of  such
subcommittee to grant  pre-approvals shall be presented to the full Committee at
its next scheduled  meeting.  The Audit Committee  pre-approved all services for
which KPMG was engaged in 2004.

      The Audit  Committee has reviewed and discussed  with  management and KPMG
the audited financial statements as of and for the year ended December 31, 2004.
The Audit Committee has discussed with KPMG the matters required to be discussed
by Statement on Auditing Standards No. 61 (Communication with Audit Committees).
In addition,  the Audit Committee has received from KPMG the written disclosures
and letter required by Independence Standards Board Standard No. 1 (Independence
Discussions  with Audit  Committees) and discussed with them their  independence
from the Company and its  management.  The Audit  Committee  also has considered
whether  KPMG's  provision  of any  information  technology  services  or  other
non-audit  services  to the  Company is  compatible  with the concept of auditor
independence.  In this analysis,  the Audit Committee  reviewed the services and
related fees provided by KPMG in the following categories and amounts:

                                           2004            2003
                                         --------         -------
              Audit Fees                 $620,500         135,891
              Audit-Related Fees           16,400          15,400
              Tax Fees                    107,150          79,700
              All Other Fees                   --              --
                                         --------         -------
                   Total Fees            $744,050         230,991
                                         ========         =======

      In  2004,  audit  fees  included  fees  for the  integrated  audit  of the
consolidated  financial statements and internal control over financial reporting
(Sarbanes-Oxley  Section  404),  quarterly  reviews of the interim  consolidated
financial  statements and an additional internal control  attestation.  In 2003,
audit fees included fees for the audit of the consolidated financial statements,
quarterly  reviews  of the  interim  consolidated  financial  statements  and an
internal  control  attestation  engagement.  Audit-related  fees for both  years
consisted of audits of the financial  statements of two employee  benefit plans.
Tax fees for both years consisted of tax compliance and tax consulting.

      Based  on the  reviews  and  discussions  referred  to  above,  the  Audit
Committee  recommended to the Board of Directors  that the audited  consolidated
financial statements be included in the Company's Annual Report on Form 10-K for
the year ended  December  31, 2004 for filing with the  Securities  and Exchange
Commission.

      The Board of  Directors  has  determined  that Ms.  Thomasson is an "audit
committee financial expert" within the meaning of SEC rules and regulations.

      The  Board of  Directors  has  adopted  a  written  charter  for the Audit
Committee, which is reviewed and reassessed for adequacy on an annual basis. The
Audit  Committee  charter  was amended  and  restated  in February  2004 and was
included as an exhibit to the 2004 Proxy Statement.

      Representatives  of KPMG LLP are  expected  to be  present  at the  annual
meeting to respond to appropriate  questions and will be given an opportunity to
make any statement they consider appropriate.


                                 Page 23 of 25


      The Audit  Committee  is currently  evaluating  audit firms to perform the
2005 integrated  audit of the Company's  consolidated  financial  statements and
internal  control over financial  reporting.  No decision has been made yet, and
for  this  reason  the  Audit  Committee  has not  recommended  an  auditor  for
ratification in this proxy statement.

      RESPECTFULLY SUBMITTED BY THE AUDIT COMMITTEE
      OF THE BOARD OF DIRECTORS:

Jack D. Briggs                            Thomas F. Phillips
H. David Bruton                           Virginia C. Thomasson
David L. Burns, Chairman                  Dennis A. Wicker
Jesse S. Capel                            John C. Willis
Goldie H. Wallace-Gainey

      The  nominees  who  receive the  highest  number of votes cast,  up to the
number of directors to be elected,  shall be elected as directors.  The Board of
Directors  recommends that  shareholders vote "FOR" the proposal to elect the 18
nominees as directors.  Unless indicated to the contrary,  proxies will be voted
"FOR" the 18 nominees listed above.


                                 Page 24 of 25


                     SHAREHOLDERS PROPOSALS FOR 2006 MEETING

      Shareholders  may submit proposals  appropriate for shareholder  action at
the  Company's  2006  annual  meeting  consistent  with the  regulations  of the
Securities and Exchange Commission. For proposals to be considered for inclusion
in the proxy statement for the 2006 annual meeting, they must be received by the
Company no later than November 30, 2005.  Such  proposals  should be directed to
First  Bancorp,  Attn.  Anna G.  Hollers,  341 North Main  Street,  Troy,  North
Carolina 27371-0508.

      The bylaws of the  Company  establish  an  advance  notice  procedure  for
shareholder  proposals  to be brought  before a meeting of  shareholders  of the
Company. Subject to any other applicable requirements, only such business may be
conducted  at a meeting  of the  shareholders  as has been  brought  before  the
meeting by, or at the  direction  of, the Board of Directors or by a shareholder
who has given to the Secretary of the Company timely written  notice,  in proper
form, of the shareholder's  intention to bring that business before the meeting.
The  presiding   officer  at  such  meeting  has  the  authority  to  make  such
determinations.  To be timely, notice of other business to be brought before any
meeting must generally be received by the Secretary of the Company not less than
60 nor more than 90 days in advance of the shareholders'  meeting. The notice of
any shareholder  proposal must set forth the various information  required under
the bylaws.  The person submitting the notice must provide,  among other things,
the name and address under which such shareholder appears on the Company's books
and the class and  number of shares  of the  Company's  capital  stock  that are
beneficially owned by such shareholder.  Any shareholder  desiring a copy of the
Company's  bylaws will be furnished one without  charge upon written  request to
the Secretary of the Company at the Company's address noted above.

                                  OTHER MATTERS

      As of the date of this proxy  statement,  the Board of Directors  does not
know of any other  business to be presented for  consideration  or action at the
annual meeting.  If other matters  properly come before the annual meeting,  the
enclosed  proxy  will  be  deemed  to  confer  discretionary  authority  to  the
individuals  named as proxies  therein to vote the  shares  represented  by such
proxy as to any such matters.

                       By Order of the Board of Directors,

                                 Anna G. Hollers
                                    Secretary

                           -------------------------


                                 Page 25 of 25


               Directions to the James H. Garner Conference Center
                               New Location of the
                 2005 First Bancorp Annual Shareholders' Meeting
                         Thursday, May 5, 2005 - 3:00 PM

                                      [MAP]

        (Please note that the location has changed from previous years.)



                                  First Bancorp

           This Proxy is Solicited on Behalf of the Board of Directors

      The undersigned  hereby appoints James H. Garner and Anna G. Hollers,  and
each of them, attorneys and proxies with full power of substitution,  to act and
vote as  designated  below the shares of common  stock of First  Bancorp held of
record  by the  undersigned  on  March  11,  2005,  at  the  annual  meeting  of
shareholders  to be held on May 5,  2005,  or any  adjournment  or  adjournments
thereof.

      1.    PROPOSAL to elect  eighteen  (18) nominees to the Board of Directors
            to serve until the 2006  Annual  Meeting of  Shareholders,  or until
            their  successors are elected and qualified.  The Board of Directors
            recommends a vote "FOR" all nominees.


                                                      
             |_|   FOR the 18 nominees listed below      |_|   WITHHOLD AUTHORITY
                   (except as marked to the contrary           to vote for the 18 nominees below.
                   below).


            (Instruction:  To  withhold  authority  to vote  for any  individual
            nominee,  strike  a line  through  the  nominee's  name in the  list
            below).

          Jack D. Briggs        Goldie H. Wallace-Gainey  Edward T. Taws, Jr.
          R. Walton Brown       James H. Garner           Frederick L. Taylor II
          H. David Bruton, M.D. James G. Hudson, Jr.      Virginia C. Thomasson
          David L. Burns        George R. Perkins, Jr.    A. Jordan Washburn
          John F. Burns         Thomas F. Phillips        Dennis A. Wicker
          Mary Clara Capel      William E. Samuels        John C. Willis

      2.    In their discretion, the proxies are authorized to vote on any other
            business that may properly come before the meeting.

      3.    Do you plan to attend the May 5, 2005 annual meeting? |_| YES |_| NO

This  proxy when  properly  executed  will be voted as  directed  herein.  If no
direction  is made,  this proxy will be voted "FOR" all  nominees in Proposal 1.
If, at or before the time of the meeting,  any of the nominees  listed above has
become unavailable for any reason, the proxies have the discretion to vote for a
substitute nominee or nominees.

                                    Dated                               , 2005
                                           ----------------------------


                                    --------------------------------------------
                                    Signature


                                    --------------------------------------------
                                    Signature (if jointly held)

                                    (Please  sign exactly as the name appears on
                                    this   proxy.   If  signing   as   attorney,
                                    administrator,    executor,   guardian,   or
                                    trustee,  please  give  title as such.  If a
                                    corporation,  please sign in full  corporate
                                    name by the  President  or other  authorized
                                    officers.  If a partnership,  please sign in
                                    partnership name by authorized person.)

Please mark,  sign,  date and return promptly in the envelope  provided.  If you
attend the meeting, you may withdraw your proxy and vote in person.

   If you wish to vote by telephone or internet, please read the instructions
                                     below.




                       INSTRUCTIONS FOR VOTING YOUR PROXY

Shareholders of record have three alternative ways of voting their proxies:

1. By Mail (traditional method); or
2. By Telephone (using a Touch-Tone Phone): or
3. By Internet

Your telephone or Internet vote authorized the named proxies to vote your shares
in the same manner as if you marked, signed, dated and returned your proxy card.
Please note all votes cast via the  telephone or Internet  must be cast prior to
3:00 a.m. on May 5, 2005.


                                                            
Vote by Telephone                                              Vote by Internet
It's fast, convenient and immediate!                           It's fast, convenient, and your vote is
Call Toll-Free on a Touch-Tone Phone:  1-866-287-9707          immediately confirmed and posted.

Follow these four easy steps:                                  Follow these four easy steps:
1.  Read the accompanying Proxy Statement                      1.  Read the accompanying Proxy Statement
    and Proxy Card                                                 and Proxy Card
2.  Call the toll-free number:                                 2.  Go to the website:
    1-866-287-9707                                                 https://www.proxyvotenow.com/fbnc
3.  Enter the 9 digit Control Number located                   3.  Enter your 9 digit Control Number located on
    on your Proxy Card below.                                      your Proxy Card below.
4.  Follow the recorded instructions                           4.  Follow the instructions on the website.

Your vote is important!                                        Your vote is important!
Call 1-866-287-9707 anytime                                    Go to https://www.proxyvotenow.com/fbnc


It is not  necessary to return your proxy card if you are voting by telephone or
internet.

Please note that the last vote received,  whether by telephone,  internet, or by
mail, will be the vote counted.

For Telephone/Internet Voting:
Control Number
----------------------------
Control Number Provided Here
----------------------------