ASB Bancorp, Inc. (NASDAQ:ASBB) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01

On May 1, 2017, ASB Bancorp, Inc. (the Company), the holding
company for Asheville Savings Bank, S.S.B., Asheville, North
Carolina (the Bank), entered into an Agreement and Plan of Merger
and Reorganization (the Merger Agreement) with First Bancorp
(FBNC), the holding company for First Bank, Southern Pines, North
Carolina. Under the Merger Agreement, the Company will merge with
and into FBNC (the Merger) and the Bank will merge with and into
First Bank.

The aggregate merger consideration has a total current value of
approximately $175 million, or $43.12 per share.

Subject to the terms and conditions of the Agreement, the
Companys shareholders will have the right to receive 1.44 shares
of FBNC common stock or $41.90 in cash, or a combination thereof,
for each share of the Companys common stock. The total merger
consideration will be prorated as necessary to ensure that 10% of
the total outstanding shares of the Companys common stock will be
exchanged for cash, and 90% of the total outstanding shares of
the Companys common stock will be exchanged for shares of the
FBNC common stock in the Merger, provided that the number of
shares of FBNC common stock to be issued will not exceed 19.9% of
the number of shares of FBNC common stock issued and outstanding
immediately before the effective time of the Merger, and to the
extent the total number of shares of FBNC common stock would
exceed 19.9%, the proration of the total merger consideration
described above will be appropriately adjusted. Additionally, at
closing each outstanding and unexercised option to acquire shares
of the Companys common stock, whether or not previously vested,
will be cancelled in exchange for a cash payment of $41.90 minus
the exercise price for each Company share subject to such stock
option.

The Merger Agreement has been unanimously approved by the boards
of directors of each of the Company and FBNC. The closing of the
Merger is subject to the approval of the Companys shareholders,
requisite regulatory approvals, the effectiveness of the
registration statement to be filed by FBNC with respect to the
shares of FBNC common stock to be issued in the Merger, and other
customary closing conditions. The parties anticipate closing the
Merger during the fourth quarter of 2017.

The Merger Agreement also provides that following the closing of
the Merger, FBNC will appoint Suzanne S. DeFerie, the Companys
current president and chief executive officer, and one additional
representative of the Companys board of directors to the boards
of directors of FBNC and First Bank.

In connection with entering into the Merger Agreement, each of
the directors and executive officers of the Company has entered
into a voting and support agreement (collectively, the Support
Agreements). The Support Agreements generally require that each
Company director and executive officer votes all of his or her
shares of the Companys common stock in favor of the Merger and
against alternative transactions and generally prohibit the
solicitation of an alternative transaction or the transfer of
such shareholders shares of the Companys common stock prior to
the consummation of the Merger. The Support Agreements will
terminate upon the earliest of the consummation of the Merger, in
the event the Companys board of directors fails to recommend
approval of the Merger Agreement to its shareholders, or upon the
termination of the Merger Agreement in accordance with its terms.

The Merger Agreement may be terminated in certain circumstances,
including: (i) by mutual written agreement of the parties; (ii)
by either party in the event of a breach by the other party of
any representation, warranty, covenant, or other agreement
contained in the Merger Agreement which has not been cured within
30 days and where such breach is reasonably likely to permit such
party to refuse to consummate the Merger; (iii) by either party
in the event that any consent of any required regulatory
authority is denied by final action or any law or order
prohibiting the Merger becomes final and nonappealable; (iv) by
either party if the required Company shareholder approval is not
obtained; (v) by either party in the event that the Merger is not
consummated by December 31, 2017; (vi) by FBNC in the event that
the Companys board of directors fails to recommend approval of
the Merger Agreement to its shareholders; or (vii) by the
Company, prior to Company shareholder approval, in order to enter
into a superior proposal. Upon termination of the Merger
Agreement under certain circumstances, the Company may be
required to pay FBNC a termination fee of $6.8 million.

The foregoing description of the Merger Agreement and the Support
Agreements does not purport to be complete and is qualified in
its entirety by reference to the full text of the Merger
Agreement and the Support Agreements, which are attached hereto
as Exhibit 2.1 and are incorporated herein by reference. The
related joint press release is filed as Exhibit 99.1 to this
Current Report on Form 8-K and is incorporated herein by
reference. The representations, warranties and covenants of each
party set forth in the Merger Agreement have been made only for
purposes of, and were and are solely for the benefit of the
parties to, the Merger Agreement, may be subject to limitations
agreed upon by the contracting parties, including being qualified
by confidential disclosure memoranda made for the purposes of
allocating contractual risk between the parties to the Merger
Agreement instead of establishing these matters as facts, and may
be subject to standards of materiality applicable to the
contracting parties that differ from those applicable to
investors. Accordingly, the representations and warranties may
not describe the actual state of affairs at the date they were
made or at any other time, and investors should not rely on them
as statements of fact. In addition, such representations and
warranties (i) will not survive consummation of the Merger,
unless otherwise specified therein, and (ii) were made only as of
the date of the Merger Agreement or such other date as is
specified in the Merger Agreement. Moreover, information
concerning the subject matter of the representations and
warranties may change after the date of the Merger Agreement,
which subsequent information may or may not be fully reflected in
the parties public disclosures. Accordingly, the Merger Agreement
is included with this filing only to provide investors with
information regarding the terms of the Merger Agreement, and not
to provide investors with any other factual information regarding
the Company or FBNC, their respective affiliates or their
respective businesses. The Merger Agreement should not be read
alone, but should instead be read in conjunction with the other
information regarding the Company, FBNC, their respective
affiliates or their respective businesses, the Merger Agreement
and the Merger that will be contained in, or incorporated by
reference into, the registration statement on Form S-4 that will
include a proxy statement of the Company and a prospectus of
FBNC, as well as in the Forms 10-K, Forms 10-Q, Forms 8-K and
other filings that each of the Company and FBNC make with the
Securities and Exchange Commission (SEC).

On May 1 2017, the Company and FBNC issued a joint press release
announcing the execution of the Merger Agreement with FBNC. The
complete text of the press release is attached to this report as
Exhibit 99.1.

The following exhibits are filed herewith:

FORWARD-LOOKING STATEMENTS

This Current Report contains certain forward looking statements
within the meaning of the Private Securities Litigation Reform
Act of 1995 givingthe Companys and FBNCsexpectations or
predictions of future financial or business performance or
conditions. Forward-looking statements are typically identified
by words such as believe, expect, anticipate, intend, target,
estimate, continue, positions, prospects or potential, by future
conditional verbs such as will, would, should, could or may, or
by variations of such words or by similar expressions. Such
forward-looking statements include, but are not limited to,
statements about the benefits of the combination of the Company
and FBNC, including future financial and operating results,
expected cost savings, expected impact on future earnings, the
combined companys plans, objectives, expectations and intentions
and other statements that are not historical facts. These
forward-looking statements are subject to numerous assumptions,
risks and uncertainties which change over time. Forward-looking
statements speak only as of the date they are made and you are
cautioned not to place undue reliance on any forward-looking
statements. We assume no duty to update forward-looking
statements.

In addition to factors previously disclosed in the Companys and
FBNCs reports filed with theSEC, the following factors among
others, could cause actual results to differ materially from
forward-looking statements: ability to obtain regulatory
approvals and meet other closing conditions to the Merger,
including approval by the Companys shareholders, on the expected
terms and schedule; delay in closing the Merger; difficulties and
delays in integrating the Company and FBNC businesses or fully
realizing cost savings and other benefits; business disruption
following the proposed transaction; changes in asset quality and
credit risk; the inability to sustain revenue and earnings
growth; changes in interest rates and capital markets; inflation;
customer borrowing, repayment, investment and deposit practices;
the introduction, withdrawal, success and timing of business
initiatives; competitive conditions; the inability to realize
cost savings or revenues or to implement integration plans and
other consequences associated with mergers, acquisitions and
divestitures; economic conditions; the reaction to the
transaction of the companies customers, employees and
counterparties; and the impact, extent and timing of
technological changes, capital management activities, and other
actions of theBoardof Governors of the Federal Reserve and
legislative and regulatory actions and reforms.

ADDITIONAL INFORMATION ABOUT THE PROPOSED TRANSACTION AND
WHERE TO FIND IT

This communication is being made in respect of the proposed
transaction involvingthe Company and FBNC.This material is not a
solicitation of any vote or approval ofthe Companysshareholders
and is not a substitute for the proxy statement/prospectus or any
other documents whichthe Company and FBNCmay send in connection
with the Merger.This communication does not constitute an offer
to sell or the solicitation of an offer to buy any securities.

In connection with the proposed transaction,FBNCintends to file
with theSECa Registration Statement on Form S-4 that will include
a proxy statement ofthe Companyand a prospectus ofFBNC, as well
as other relevant documents concerning the proposed
transaction.Investors and security holders are also urged to
carefully review and consider each ofthe Companys and FBNCspublic
filings with theSEC, including, but not limited to, their Annual
Reports on Form 10-K, their proxy statements, their Current
Reports on Form 8-K and their Quarterly Reports on Form 10-Q.The
proxy statement/prospectus will be mailed to the
Companysshareholders. BEFORE MAKING ANY VOTING OR INVESTMENT
DECISIONS, INVESTORS AND SHAREHOLDERS OF THE COMPANY ARE URGED TO
CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND PROXY
STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER WHEN IT
BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH
THESEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE
DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE PROPOSED TRANSACTION. Investors and security holders may
obtain a free copy of the proxy statement/prospectus (when
available) and other filings containing information aboutthe
Company and FBNCat theSECswebsite atwww.sec.gov. Investors
and security holders may also obtain free copies of the documents
filed with theSECbythe Company on its website
atwww.ashevillesavingsbank.com and by FBNC on its website
athttp://www.localfirstbank.com.

The Company, FBNC and certain of their respective directors and
executive officers, under theSECsrules, may be deemed to be
participants in the solicitation of proxies ofthe
Companysshareholders in connection with the proposed transaction.
Information about the directors and executive officers ofthe
Companyand their ownership ofthe Companyscommon stock is set
forth in the proxy statement forthe Companys 2017 Annual Meeting
of Shareholders, as filed with theSECon Schedule 14A onApril 5,
2017. Information about the directors and executive officers
ofFBNCand their ownership ofFBNCcommon stock is set forth in the
proxy statement forFBNCs2017 Annual Meeting of Shareholders, as
filed with theSECon Schedule 14A onMarch 27, 2017. Additional
information regarding the interests of those participants and
other persons who may be deemed participants in the transaction
may be obtained by reading the proxy statement/prospectus
regarding the proposed transaction when it becomes available.Free
copies of this document may be obtained as described in the
preceding paragraph.

About ASB Bancorp, Inc. (NASDAQ:ASBB)

ASB Bancorp, Inc. is the holding company for Asheville Savings Bank (the Bank). The Company’s principal business activity is the ownership of the outstanding shares of common stock of the Bank. The Bank is a chartered savings bank. It operates as a community-oriented financial institution offering traditional financial services to consumers and businesses in its primary market area. It accepts deposits from the public and uses these funds to originate loans. The Bank, through a third-party registered broker-dealer, offers its customers non-deposit investment products, including mutual funds, debt, equity and government securities, retirement accounts, insurance products, and fixed and variable annuities. Its primary market area is Asheville, North Carolina and the rest of Buncombe County where it has over eight branch offices, as well as Henderson, Madison, McDowell and Transylvania Counties where it has over five branch offices and a loan production office in Mecklenburg County.

ASB Bancorp, Inc. (NASDAQ:ASBB) Recent Trading Information

ASB Bancorp, Inc. (NASDAQ:ASBB) closed its last trading session up +0.17 at 35.20 with 5,046 shares trading hands.