FBNC

We rate FIRST BANCORP /NC/ (FBNC) as a Hold with a composite score of 50.1/100 at a current price of $58.89. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in momentum (82th percentile) and stability (52th percentile), which together account for the majority of the composite score. Offsetting weakness in quality (33th percentile) and value (35th percentile) tempers our overall conviction. We assign a Narrow Moat rating (47/100), Low uncertainty, and Standard capital allocation.

Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

FIRST BANCORP /NC/ holds a top-quartile position (#0 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 50.1/100 places it at rank #1993 in our full 7,333-stock universe. At $2.2B in market capitalization, FIRST BANCORP /NC/ is a mid-cap player in the Finance, Insurance, And Real Estate space, which limits certain scale advantages but may allow for more agile strategic execution.

The outlook is moderately positive, with revenue expanding at 12% and favorable momentum (82th percentile) reflecting constructive market sentiment. The business shows steady execution, though the growth rate is below the levels typically associated with high-conviction growth stories. Momentum confirmation provides support for the current price level.

Available margin data shows operating margins of 27%. Incomplete margin data limits our ability to fully assess the cost structure and margin trajectory, though the available metrics provide a partial view of operating efficiency.

At a current price of $58.89, FIRST BANCORP /NC/ is trading at a premium to fundamental value. Our value factor score of 35/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The premium valuation implies the market is pricing in significant future growth or quality improvements that are not yet fully reflected in current fundamentals.

The stock currently trades at a P/E of 22.6x (a 90% premium to the sector median of 11.9x), EV/EBITDA of 18.4x (at a premium), P/B of 1.6x, P/S of 4.7x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a Low uncertainty rating to FIRST BANCORP /NC/. The company exhibits strong financial stability with a beta of 0.84, conservative leverage (6% D/E), and a stability factor in the 52th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

Specific risk factors that inform our assessment include: weak quality scores (33th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 52th percentile and quality factor at the 33th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: conservative leverage (6% D/E) limits balance sheet risk. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate FIRST BANCORP /NC/'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 7.1%, and the balance sheet is managed within acceptable parameters (D/E: 6%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; FIRST BANCORP /NC/ falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 1.70% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, FIRST BANCORP /NC/ receives a Hold rating with a composite score of 50.1/100 (rank #1993 of 7,333). Our quantitative framework assigns a Narrow Moat (47/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 50/100.

Our analysis supports a neutral stance on FIRST BANCORP /NC/. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.