FOR IMMEDIATE RELEASE:
First Carolina Financial Services Reports Net Income of $5.1 Million, or $0.20 Per Diluted Share, for the Second Quarter of 2026
RALEIGH, N.C. (July 30, 2026) – First Carolina Financial Services, Inc. (NYSE: FCBM) (“First Carolina,” the “Company,” “we,” “our,” or “us”), today reported net income of $5.1 million, or $0.20 per diluted share, for the second quarter of 2026, compared to $4.6 million, or $0.18 per diluted share, for the second quarter of 2025, an 11.0% increase in net income. All per share data has been adjusted to reflect the two-for-one stock split completed on June 17, 2026.
The quarter marked a transformational milestone for First Carolina. On June 22, 2026, the Company successfully completed its initial public offering (the “IPO”) of 5,500,000 shares of common stock at a public offering price of $12.50 per share. First Carolina's common stock began trading on the New York Stock Exchange (“NYSE”) on June 18, 2026, under the ticker symbol “FCBM.” On June 29, 2026, the underwriters of the IPO exercised their option to purchase additional shares in full, resulting in the sale of an additional 825,000 shares of the Company’s common stock at the public offering price per share. Inclusive of the shares purchased pursuant to the underwriters' option, the Company received net proceeds of approximately $69.3 million, after deducting underwriting discounts and commissions and expenses of the offering.
“The first half of 2026 was a landmark period for First Carolina as we successfully completed our initial public offering while continuing to deliver solid financial performance,” said Ron Day, Chairman, President, and Chief Executive Officer. “Our results were driven by solid loan production and net loan growth, material deposit optimization activities, expanding year-over-year net interest margin, disciplined expense management, and exceptional execution across the organization. In particular, in our traditional banking business, for the first six months of 2026, brokered deposits declined $211 million and were replaced by $246 million in less expensive, non-brokered deposits.
“What continues to set First Carolina apart is the strength and diversity of our business model. Through our Commercial Banking, Payments, Consumer Banking, and Wealth Management businesses, we are well positioned to serve clients across every stage of their financial journey. Commercial loan production remains robust, with a focus on new variable-rate loan originations to replace maturing lower-yield legacy loans, and this has helped to improve the overall profitability of our balance sheet. At the same time, we are deepening relationships with commercial clients through treasury management solutions that enhance customer engagement and drive valuable operating deposit growth.”
Day added, “With respect to our Payments business, we continue to strengthen our competitive position by expanding our service offerings. For example, we are partnering with U.S. Bank, a leader in prepaid card solutions, to develop a prepaid card option, which we anticipate will allow us to expand the range of disbursement choices made available to our higher-education institution clients and their students. We have successfully integrated the Payments business into First Carolina and are now focused on the broader banking opportunity across higher education as a strategic growth vertical. Demonstrating this shift, as of June 30, 2026, we have successfully placed $37 million in loan facilities and secured over $37 million in deposits from our base of higher-education institution clients, since completing our acquisition of BM Technologies, Inc. in January 2025.
We believe our diversified model will be a true differentiator, and we see emerging tailwinds that give us great confidence in our team's ability to deliver strong shareholder returns while staying grounded in our core values.”
Second Quarter 2026 Performance Highlights:
•Net income of $5.1 million, an increase of 11.0% from the second quarter of 2025.
•Successfully completed the Company's IPO and NYSE listing, significantly enhancing capital flexibility and growth opportunities.
•Generated $58.1 million of loan growth, representing an annualized growth rate of 8.9%.
•Expanded net interest margin by 18 basis points on a year-over-year comparative-quarter basis to 3.23%.
•Increased second quarter net interest income by 8.8% year over year.
•Maintained exceptional credit quality with zero net loan charge-offs during the quarter.
•Reduced higher-cost certificates of deposit by 24.4% during the quarter and 53.5% over the past year, supporting funding cost improvements.
•Continued strong capital levels with average shareholders' equity representing 10.53% of average assets.
•Improved asset quality, with nonperforming assets declining to 0.65% of total assets compared to 0.89% a year ago.
•Ended the quarter with book value per share of $13.88 and tangible book value per share1 of $11.66.
•Return on average assets (“ROAA”) of 0.60%.
•Return on average equity (“ROAE”) of 5.71%; Return on average tangible common equity (“ROATCE”)1 of 7.09%.
(1)Considered non-GAAP financial measure - See "Non-GAAP Financial Measures" and reconciliation of GAAP to non-GAAP financial measures in the financial tables section of the press release.
Operating Highlights
Net interest income totaled $25.6 million for the second quarter of 2026, an increase of $2.1 million, or 8.8%, over the second quarter of 2025, reflecting continued balance sheet strength and revenue generation. The Company's net interest margin was 3.23% for the second quarter of 2026, representing an 18-basis point improvement over the prior year period, driven primarily by lower interest-bearing deposit costs. Net interest margin declined modestly by two basis points from the first quarter of 2026, largely attributable to the seasonality in deposits generated by the Company’s Payments business. Noninterest-bearing deposits in the Payments business regularly decline in the second quarter of each fiscal year from the preceding first quarter period, primarily due to the educational calendar. More broadly, the Company continues to benefit from ongoing deposit repricing initiatives and a favorable shift in earning asset yields.
The yield on average interest-earning assets was 5.92% for the second quarter of 2026, compared to 6.02% for the second quarter of 2025, a decrease of 10 basis points primarily reflecting lower yield on the securities portfolio and short-term, floating rate investments in a declining rate environment. The yield on average interest-earning assets increased from 5.82% in the first quarter of 2026 to 5.92% for the second quarter of 2026, primarily attributable to an improvement in loan yields, reflecting the strength of the Company's lending franchise and loan portfolio pricing, partially offset by a decline in the yield on securities available for sale. The Company delivered meaningful growth in net interest income and year-over-year expansion in net interest margin.
The Company’s total cost of funds was 2.84% for the second quarter of 2026, a decrease of 30 basis points compared to the second quarter of 2025. Deposit costs were 2.75% for the second quarter of 2026, compared to 3.05% for the second quarter of 2025, a decrease of 30 basis points, and compared to 2.63% for the first quarter of 2026, an increase of 12 basis points. The cost of interest-bearing liabilities was 3.58% for the second quarter of 2026, a decrease of 42 basis points compared to 4.00% for the second quarter of 2025, and a decrease of 1 basis point compared to 3.59% for the first quarter of 2026, reflecting the strategic shift of deposits from time deposits to money market and savings accounts. Management believes the declines in total cost of funds,
deposit costs, and cost of interest-bearing liabilities in the second quarter of 2026 versus the second quarter of 2025 are particularly instructive, as it eliminates the impact of the seasonality of the Payments business deposit flows, as compared to the linked-quarter comparisons.
Noninterest income totaled $6.7 million for the second quarter of 2026, a decrease of $6.5 million, or 49.5%, from the second quarter of 2025. The decrease primarily reflects the planned discontinuation in 2025 of a banking-as-a-service partnership inherited through the BM Technologies’ acquisition that was not consistent with the Company's long-term strategic focus. Accordingly, results for the second quarter of 2025 are not directly comparable to those for the second quarter of 2026. Noninterest expense totaled $25.5 million for the second quarter of 2026, a decrease of $5.2 million, or 17.1%, from the second quarter of 2025. The decline was primarily driven by right sizing the BM Technologies’ workforce post acquisition, which resulted in lower salaries and employee benefits expense, as well as by reduced consumer fraud and transaction losses and lower data processing expense, reflecting the Company's continued focus on disciplined expense management and operating efficiency.
The Company's effective tax rate was 21.5% for the second quarter of 2026, compared to 25.4% for the second quarter of 2025 and 19.4% for the first quarter of 2026. The lower effective tax rate compared to the prior-year quarter was primarily attributable to state income tax, non-taxable income resulting from the change in cash surrender value of bank-owned life insurance, a decrease in non-deductible expenses, and a tax credit for research and development.
Balance Sheet Trends
Total assets were $3.41 billion at June 30, 2026, reflecting an increase of $19.4 million, or 0.6%, compared to June 30, 2025. Gross loans were $2.74 billion at June 30, 2026, an increase of $45.7 million, or 1.7%, compared to June 30, 2025, and an increase of $58.1 million, or 2.2% from $2.68 billion at March 31, 2026.
Total deposits were $2.83 billion at June 30, 2026, reflecting a decrease of $107.5 million, or 3.7%, compared to June 30, 2025. The Company continues to shift its deposit mix away from higher-cost certificates of deposit (brokered and non-brokered) and toward lower-cost core deposits. Certificates of deposit were $678.3 million at June 30, 2026, a $780.8 million, or 53.5%, decrease compared to June 30, 2025, and a $219.3 million, or 24.4%, decrease compared to March 31, 2026.
Credit Quality
During the second quarter of 2026, the Company recorded a provision for credit losses of $273 thousand, compared to a recovery for credit losses of $169 thousand in the second quarter of 2025, and a recovery for credit losses of $398 thousand during the first quarter of 2026. The provision recorded during the second quarter of 2026 was primarily due to strong loan growth, offset by positive changes in economic factors and no net loan charge-offs for the period. The Company's annualized net charge-offs to average loans held for investment ratio remained steady at 0.00% across the second quarter of 2026, the preceding quarter, and one year prior.
Nonperforming assets totaled $22.3 million, or 0.65% of total assets, at June 30, 2026, compared to $30 million, or 0.89% of total assets, at June 30, 2025, and $22.3 million, or 0.65% of total assets at March 31, 2026.
About First Carolina Financial Services, Inc.
First Carolina Financial Services, Inc. (NYSE: FCBM) operates as a bank holding company for First Carolina Bank that provides financial services for businesses, higher education institutions, and individuals. First Carolina offers a range of deposit and loan products and trust services. First Carolina is headquartered in Raleigh, North Carolina with full-service banking offices in Rocky Mount, Raleigh, Wilmington, Cary, and Reidsville, North Carolina; Virginia Beach, Virginia; Columbia and Greenville, South Carolina; and Atlanta, Georgia. For more information, please visit firstcarolinabank.com. The information contained in, or that can be accessed through, our website is not incorporated by reference in, and is not part of, this press release. The inclusion of our website address in this press release is only as an inactive textual reference.
Company Note Regarding Forward-Looking Statements
This press release contains, and future oral and written statements by us and our management may contain, forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include discussion of plans, estimates, objectives, goals, guidelines, expectations, intentions, projections, and statements of the Company’s beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include, without limitation, statements that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “see,” “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan” or words or phases of similar meaning. We caution that the forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control and could cause actual results to differ materially from those currently anticipated. Such risks and uncertainties include, but are not limited to: adverse developments in our borrowers’ industries and, in particular, declines in real estate values; our ability to maintain compliance with federal and state laws that regulate our business and capital levels; our ability to raise capital as needed by our business; our ability to manage growth; the loss of any of our key employees; changes in the interest rates affecting our deposits, loans, and securities portfolio; our ability to maintain adequate liquidity and control our cost of funds; the strength of the economy in our current and future market areas, as well as general economic, market, or business conditions; negative developments in the financial industry and credit markets; an insufficient allowance for credit losses as a result of inaccurate assumptions or otherwise; the ability of our current and any future markets to weather a downturn in the economy; our potential growth, including loans, deposits, and our entrance or expansion into new markets, the opportunities that may be presented to and pursued by us and the need for sufficient capital to support that growth; changes in our competitive position, competitive actions by other financial institutions and the competitive nature of the financial services industry and our ability to compete effectively against other financial institutions in our banking markets; changes in laws, regulations and the policies of federal or state regulators and agencies or interpretations thereof; governmental monetary and fiscal policies, including the policies of the Federal Reserve; our ability to maintain internal control over financial reporting and an effective risk management framework; our effective use of technology or an interruption or breach in security of our information systems; our reliance on secondary sources, such as FHLB advances, sales of securities and loans, federal funds lines of credit from correspondent banks and out-of-market time deposits, to meet our liquidity needs; inaccurate or incomplete information about our clients; our ability to assess and manage our asset quality; natural disasters, pandemics or other public health crises, war, terrorist activities or civil unrest and their effects on the economic and business environments in which we operate; risks associated with unauthorized access, cyber-crime and other threats to data security; and other risks and uncertainties described under “Risk Factors” of our Registration Statement on Form S-1 and subsequent filings with the U.S. Securities and Exchange Commission. We assume no obligation and do not intend to update these forward-looking statements, except as required by law.
Investor Relations Contact:
Kristen Brabble
Chief Operating Officer
252-451-2964
investorrelations@firstcarolinabank.com
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| FIRST CAROLINA FINANCIAL SERVICES, INC. |
| QUARTER END BALANCE SHEETS |
| |
|
| (dollars in thousands) | June 30,
2026 | | March 31,
2026 | | December 31,
2025 | | June 30,
2025 |
| (unaudited) | | (unaudited) | | (audited) | | (unaudited) |
| Assets | | | | | | | |
| Cash and cash equivalents | $ | 118,821 | | | $ | 190,323 | | | $ | 134,116 | | | $ | 151,910 | |
| Investment securities, available for sale | 325,341 | | | 331,641 | | | 312,090 | | | 284,608 | |
| Investment securities, held to maturity | - | | | - | | | - | | | 37,421 | |
| Federal Home Loan Bank stock, at cost | 4,739 | | | 2,364 | | | 5,732 | | | 2,143 | |
| Loans receivable | 2,742,549 | | | 2,684,469 | | | 2,648,174 | | | 2,696,875 | |
| Allowance for credit losses | (22,064) | | | (21,121) | | | (20,893) | | | (21,760) | |
| Net loans | 2,720,485 | | | 2,663,348 | | | 2,627,281 | | | 2,675,115 | |
| Premises and equipment, net | 42,077 | | | 43,531 | | | 44,707 | | | 46,331 | |
| Goodwill and intangible assets, net | 69,009 | | | 69,702 | | | 70,395 | | | 67,870 | |
| Deferred tax asset | 24,055 | | | 24,092 | | | 25,142 | | | 31,366 | |
| Bank-owned life insurance | 68,577 | | | 58,910 | | | 58,356 | | | 57,239 | |
| Prepaid expenses and other assets | 32,825 | | | 34,466 | | | 39,689 | | | 32,492 | |
| Total assets | $ | 3,405,929 | | | $ | 3,418,377 | | | $ | 3,317,508 | | | $ | 3,386,495 | |
| Liabilities and shareholders' equity | | | | | | | |
| Liabilities | | | | | | | |
| Deposits | | | | | | | |
| Noninterest bearing DDA | $ | 563,008 | | | $ | 658,707 | | | $ | 533,232 | | | $ | 577,066 | |
| Interest bearing DDA | 572,971 | | | 479,032 | | | 376,537 | | | 284,266 | |
| Savings and money market | 1,016,471 | | | 931,271 | | | 759,197 | | | 617,869 | |
| Certificates of deposit | 678,265 | | | 897,584 | | | 1,126,707 | | | 1,459,023 | |
| Total deposits | 2,830,715 | | | 2,966,594 | | | 2,795,673 | | | 2,938,224 | |
| Federal Home Loan Bank advances | 50,000 | | | - | | | 75,000 | | | - | |
| Subordinated debt, net | 63,489 | | | 63,463 | | | 63,436 | | | 63,383 | |
Allowance for credit losses
on off-balance sheet credit exposures | 2,493 | | | 3,164 | | | 3,794 | | | 3,289 | |
| Accrued expenses and other liabilities | 28,028 | | | 31,802 | | | 32,680 | | | 32,054 | |
| Total liabilities | 2,974,725 | | | 3,065,023 | | | 2,970,583 | | | 3,036,950 | |
| Shareholders' equity | | | | | | | |
| Common stock | 15,535 | | | 12,307 | | | 12,261 | | | 12,483 | |
| Additional paid-in capital | 309,745 | | | 240,684 | | | 239,903 | | | 243,631 | |
| Retained earnings | 106,254 | | | 101,160 | | | 95,249 | | | 93,665 | |
| Accumulated other comprehensive loss | (330) | | | (797) | | | (488) | | | (234) | |
| Total shareholders' equity | 431,204 | | | 353,354 | | | 346,925 | | | 349,545 | |
| Total liabilities and shareholders' equity | $ | 3,405,929 | | | $ | 3,418,377 | | | $ | 3,317,508 | | | $ | 3,386,495 | |
| | | | | | | | | | | | | | | | | |
| FIRST CAROLINA FINANCIAL SERVICES, INC. |
| STATEMENTS OF OPERATIONS (unaudited) |
| | | | | |
|
| As of and for the Three Months Ended | As of and for the Six Months Ended |
| (dollars in thousands) | June 30,
2026 | March 31,
2026 | June 30,
2025 | June 30,
2026 | June 30,
2025 |
| Interest income | | | | | |
| Interest on cash and due from banks | $ | 1,424 | | $ | 1,940 | | $ | 2,136 | | $ | 3,364 | | $ | 4,277 | |
| Loans, including fees | 41,592 | | 40,063 | | 41,174 | | 81,655 | | 81,112 | |
| Investment securities | 3,786 | | 3,693 | | 3,001 | | 7,479 | | 5,255 | |
| Other interest and dividends | 44 | | 45 | | 47 | | 89 | | 123 | |
| Total interest income | 46,846 | | 45,741 | | 46,358 | | 92,587 | | 90,767 | |
| Interest expense | | | | | |
| Deposits | 19,951 | | 19,076 | | 21,439 | | 39,027 | | 40,878 | |
| Borrowings | 1,307 | | 1,138 | | 1,390 | | 2,445 | | 2,574 | |
| Total interest expense | 21,258 | | 20,214 | | 22,829 | | 41,472 | | 43,452 | |
| Net interest income | 25,588 | | 25,527 | | 23,529 | | 51,115 | | 47,315 | |
| Provision (recovery) for credit losses | 273 | | (398) | | (169) | | (125) | | 363 | |
| Net interest income after provision for credit losses | 25,315 | | 25,925 | | 23,698 | | 51,240 | | 46,952 | |
| Noninterest income | | | | | |
| Service charges on deposit accounts | 5,538 | | 6,825 | | 12,095 | | 12,363 | | 19,929 | |
| Gain on sale of securities, net | - | | 108 | | - | | 108 | | - | |
| Bank-owned life insurance | 636 | | 554 | | 348 | | 1,190 | | 692 | |
| Other noninterest income | 501 | | 154 | | 763 | | 655 | | 2,273 | |
| Total noninterest income | 6,675 | | 7,641 | | 13,206 | | 14,316 | | 22,894 | |
| Noninterest expense | | | | | |
| Salaries and employee benefits | 11,662 | | 12,399 | | 15,215 | | 24,061 | | 27,596 | |
| Occupancy and equipment | 4,013 | | 4,325 | | 3,902 | | 8,338 | | 6,901 | |
| Data processing | 1,738 | | 1,952 | | 2,302 | | 3,690 | | 4,146 | |
| Other professional fees | 3,183 | | 2,506 | | 2,198 | | 5,689 | | 3,569 | |
| Service fees | 95 | | 75 | | 75 | | 170 | | 1,853 | |
| Federal deposit insurance premiums | 650 | | 1,050 | | 795 | | 1,700 | | 1,590 | |
| Consumer fraud and transaction losses | 1,432 | | 1,338 | | 3,522 | | 2,770 | | 7,039 | |
| Other noninterest expense | 2,729 | | 2,587 | | 2,737 | | 5,316 | | 5,170 | |
| Total noninterest expense | 25,502 | | 26,232 | | 30,746 | | 51,734 | | 57,864 | |
| Net income before taxes | 6,488 | | 7,334 | | 6,158 | | 13,822 | | 11,982 | |
| Income tax expense | 1,392 | | 1,423 | | 1,567 | | 2,815 | | 2,686 | |
| Net income | $ | 5,096 | | $ | 5,911 | | $ | 4,591 | | $ | 11,007 | | $ | 9,296 | |
| | | | | | | | | | | | | | | | | |
| FIRST CAROLINA FINANCIAL SERVICES, INC. |
| FINANCIAL TABLES |
| | | | | |
| Financial Highlights (unaudited) | | | | |
| As of and for the Three Months Ended | As of and for the Six Months Ended |
| (dollars in thousands except per share amounts) | June 30,
2026 | March 31,
2026 | June 30,
2025 | June 30,
2026 | June 30,
2025 |
| Selected Operating Data: | | | | | |
| Interest income | $ | 46,846 | | $ | 45,741 | | $ | 46,358 | | $ | 92,587 | | $ | 90,767 | |
| Interest expense | 21,258 | | 20,214 | | 22,829 | | 41,472 | | 43,452 | |
| Net interest income | 25,588 | | 25,527 | | 23,529 | | 51,115 | | 47,315 | |
| Provision (recovery) for credit losses | 273 | | (398) | | (169) | | (125) | | 363 | |
| Noninterest income | 6,675 | | 7,641 | | 13,206 | | 14,316 | | 22,894 | |
| Noninterest expense | 25,502 | | 26,232 | | 30,746 | | 51,734 | | 57,864 | |
| Income tax expense | 1,392 | | 1,423 | | 1,567 | | 2,815 | | 2,686 | |
| Net income | 5,096 | | 5,911 | | 4,591 | | 11,007 | | 9,296 | |
| Share and Per Share Data: | | | | | |
| Basic earnings per share | $ | 0.16 | | $ | 0.24 | | $ | 0.18 | | $ | 0.35 | | $ | 0.37 | |
| Diluted earnings per share | $ | 0.20 | | $ | 0.24 | | $ | 0.18 | | $ | 0.44 | | $ | 0.37 | |
| Book value per share (at period end) | $ | 13.88 | | $ | 14.36 | | $ | 14.00 | | $ | 13.88 | | $ | 14.00 | |
| Tangible book value per share1 | $ | 11.66 | | $ | 11.52 | | $ | 11.28 | | $ | 11.66 | | $ | 11.28 | |
| Shares of common stock outstanding | 31,068,852 | 24,614,852 | 24,965,054 | 31,068,852 | 24,965,054 |
| Weighted average diluted shares outstanding | 25,235,701 | 24,610,368 | 24,955,621 | 24,924,762 | 24,946,966 |
| Selected Balance Sheet Data: | | | | | |
| Total assets | $ | 3,405,929 | | $ | 3,418,377 | | $ | 3,386,495 | | $ | 3,405,929 | | $ | 3,386,495 | |
| Securities available-for-sale, at fair value | 325,341 | | 331,641 | | 284,608 | | 325,341 | | 284,608 | |
| Securities held-to-maturity, at fair value | - | | - | | 37,421 | | - | | 37,421 | |
| Gross loans held for investment (LHFI) | 2,742,549 | | 2,684,469 | | 2,696,875 | | 2,742,549 | | 2,696,875 | |
| Allowance for credit losses | 22,064 | | 21,121 | | 21,760 | | 22,064 | | 21,760 | |
| Goodwill and other intangible assets | 69,009 | | 69,702 | | 67,870 | | 69,009 | | 67,870 | |
| Deposits | 2,830,715 | | 2,966,594 | | 2,938,224 | | 2,830,715 | | 2,938,224 | |
| Sub debt | 63,489 | | 63,463 | | 63,383 | | 63,489 | | 63,383 | |
| Other borrowings | 50,000 | | - | | - | | 50,000 | | - | |
| Total shareholders' equity | 431,204 | | 353,354 | | 349,545 | | 431,204 | | 349,545 | |
1 Considered non-GAAP financial measure - See "Non-GAAP Financial Measures.”
| | | | | | | | | | | | | | | | | |
| FIRST CAROLINA FINANCIAL SERVICES, INC. |
| FINANCIAL TABLES |
| | | | | |
| Financial Highlights - continued (unaudited) | | | |
| As of and for the Three Months Ended | As of and for the Six Months Ended |
| (dollars in thousands) | June 30,
2026 | March 31,
2026 | June 30,
2025 | June 30,
2026 | June 30,
2025 |
| Performance Ratios: | | | | | |
| Pre-tax pre-provision net revenue (PPNR)1 | $ | 6,761 | | $ | 6,936 | | $ | 5,989 | | $ | 13,697 | | $ | 12,345 | |
Return on average assets (ROAA)2 | 0.60 | % | 0.70 | % | 0.56 | % | 0.65 | % | 0.58 | % |
| Return on average equity2 | 5.71 | | 6.80 | | 5.36 | | 6.25 | | 5.46 | |
Return on average tangible common equity (ROATCE)1 | 7.09 | | 8.50 | | 6.69 | | 7.78 | | 6.55 | |
| Net interest margin | 3.23 | | 3.25 | | 3.05 | | 3.24 | | 3.14 | |
Efficiency ratio1 | 79.05 | | 79.35 | | 83.70 | | 79.20 | | 82.42 | |
| Noninterest income to average total assets | 0.79 | | 0.91 | | 1.61 | | 0.85 | | 1.43 | |
| Noninterest income to total revenue | 20.69 | | 23.04 | | 35.95 | | 21.88 | | 32.61 | |
| Noninterest expense to average total assets | 3.01 | | 3.12 | | 3.74 | | 3.07 | | 3.60 | |
| Average interest-earning assets to average interest-bearing liabilities | 133.15 | | 139.47 | | 135.03 | | 136.22 | | 139.63 | |
| Average equity to average total assets | 10.53 | | 10.34 | | 10.41 | | 10.43 | | 10.61 | |
| Asset Quality Data: | | | | | |
| Nonperforming assets to total assets | 0.65 | % | 0.65 | % | 0.89 | % | 0.65 | % | 0.89 | % |
| Nonperforming loans to gross LHFI | 0.81 | | 0.83 | | 0.90 | | 0.81 | | 0.90 | |
| Total allowance for credit losses to nonperforming loans | 99.07 | | 94.54 | | 89.75 | | 99.07 | | 89.75 | |
| Total allowance for credit losses to total LHFI | 0.80 | | 0.79 | | 0.81 | | 0.80 | | 0.81 | |
| Net charge-offs to average LHFI | 0.00 | | 0.00 | | 0.00 | | 0.00 | | 0.00 | |
| Balance Sheet and Capital Ratios: | | | | | |
| Loan-to-deposit ratio | 96.89 | % | 90.49 | % | 91.79 | % | 96.89 | % | 91.79 | % |
| Noninterest bearing deposits to total deposits | 19.89 | | 22.20 | | 19.64 | | 19.89 | | 19.64 | |
| Total shareholders' equity to total assets | 12.66 | | 10.34 | | 10.32 | | 12.66 | | 10.32 | |
Tangible common equity to tangible assets1 | 10.85 | | 8.47 | | 8.49 | | 10.85 | | 8.49 | |
| Other: | | | | | |
| Number of branches | 9 | 9 | 9 | 9 | 9 |
| Number of full-time equivalent employees | 269 | 269 | 312 | 275 | 312 |
1 Considered non-GAAP financial measure - See "Non-GAAP Financial Measures.”
2 Annualized calculations shown for quarterly periods presented.
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| FIRST CAROLINA FINANCIAL SERVICES, INC. |
| FINANCIAL TABLES |
| | | | | | | | | | | | | | | | | | |
| QTD Average Balances and Yields/Rates (unaudited) |
| | As of and for the Three Months Ended |
| | June 30, 2026 | | March 31, 2026 | | June 30, 2025 |
| (dollars in thousands) | | Average balance | | Interest income/expense | | Average yields earned/rates paid | | Average balance | | Interest income/expense | | Average yields earned/rates paid | | Average balance | | Interest income/expense | | Average yields earned/rates paid |
| Assets: | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 2,688,901 | | | $ | 41,592 | | | 6.20 | % | | $ | 2,656,562 | | | $ | 40,063 | | | 6.12 | % | | $ | 2,671,797 | | | $ | 41,174 | | | 6.18 | % |
| Securities, available for sale | | 328,941 | | | 3,786 | | | 4.62 | % | | 319,900 | | | 3,693 | | | 4.68 | % | | 194,246 | | | 2,448 | | | 5.05 | % |
| Securities, held to maturity | | - | | | - | | | 0.00 | % | | - | | | - | | | 0.00 | % | | 40,360 | | | 553 | | | 5.50 | % |
| Deposits in banks and short-term investments | | 156,891 | | | 1,468 | | | 3.75 | % | | 210,574 | | | 1,985 | | | 3.82 | % | | 184,541 | | | 2,183 | | | 4.74 | % |
| Total interest earning assets | | 3,174,733 | | | 46,846 | | | 5.92 | % | | 3,187,036 | | | 45,741 | | | 5.82 | % | | 3,090,944 | | | 46,358 | | | 6.02 | % |
| Noninterest-earning assets | | 223,606 | | | | | | | 221,340 | | | | | | | 207,726 | | | | | |
| Total assets | | $ | 3,398,339 | | | | | | | $ | 3,408,376 | | | | | | | $ | 3,298,670 | | | | | |
| Liabilities and shareholders’ equity | | | | | | | | | | | | | | | | | | |
| Transaction accounts | | $ | 517,257 | | | $ | 4,373 | | | 3.39 | % | | $ | 389,712 | | | $ | 3,138 | | | 3.27 | % | | $ | 295,503 | | | $ | 2,843 | | | 3.86 | % |
| Money market and savings | | 972,528 | | | 7,654 | | | 3.16 | % | | 847,186 | | | 6,294 | | | 3.01 | % | | 614,315 | | | 5,326 | | | 3.48 | % |
| Time deposits | | 799,742 | | | 7,924 | | | 3.97 | % | | 972,238 | | | 9,644 | | | 4.02 | % | | 1,291,002 | | | 13,270 | | | 4.12 | % |
| Total interest-bearing deposits | | 2,289,527 | | | 19,951 | | | 3.50 | % | | 2,209,136 | | | 19,076 | | | 3.50 | % | | 2,200,820 | | | 21,439 | | | 3.91 | % |
| Sub debt | | 63,480 | | | 1,014 | | | 6.41 | % | | 63,453 | | | 1,019 | | | 6.51 | % | | 63,374 | | | 1,158 | | | 7.33 | % |
| Borrowings | | 31,348 | | | 293 | | | 3.75 | % | | 12,534 | | | 119 | | | 3.85 | % | | 24,801 | | | 232 | | | 3.75 | % |
| Total interest-bearing liabilities | | 2,384,355 | | | 21,258 | | | 3.58 | % | | 2,285,123 | | | 20,214 | | | 3.59 | % | | 2,288,995 | | | 22,829 | | | 4.00 | % |
| Noninterest-bearing demand deposits | | 620,825 | | | | | | | 731,313 | | | | | | | 623,172 | | | | | |
| Other liabilities | | 35,442 | | | | | | | 39,646 | | | | | | | 43,011 | | | | | |
| Shareholders’ equity | | 357,717 | | | | | | | 352,294 | | | | | | | 343,492 | | | | | |
| Total liabilities and shareholders’ equity | | $ | 3,398,339 | | | | | | | $ | 3,408,376 | | | | | | | $ | 3,298,670 | | | | | |
| Net interest spread | | | | | | 2.34 | % | | | | | | 2.23 | % | | | | | | 2.02 | % |
| Net interest income and spread | | | | $ | 25,588 | | | | | | | $ | 25,527 | | | | | | | $ | 23,529 | | | |
| Net interest income/margin | | | | | | 3.23 | % | | | | | | 3.25 | % | | | | | | 3.05 | % |
| Cost of total deposits | | | | | | 2.75 | % | | | | | | 2.63 | % | | | | | | 3.05 | % |
| Cost of total funding | | | | | | 2.84 | % | | | | | | 2.72 | % | | | | | | 3.14 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| FIRST CAROLINA FINANCIAL SERVICES, INC. |
| FINANCIAL TABLES |
| | | | | | | | | | | | |
| YTD Average Balances and Yields/Rates (unaudited) | | | | |
| | As of and for the Six Months Ended |
| | June 30, 2026 | | June 30, 2025 |
| (dollars in thousands) | | Average balance | | Interest
income/
expense | | Average yields earned/rates paid | | Average balance | | Interest
income/
expense | | Average yields earned/rates paid |
| Assets: | | | | | | | | | | | | |
| Loans | | $ | 2,672,821 | | | $ | 81,655 | | | 6.16 | % | | $ | 2,654,768 | | | $ | 81,112 | | | 6.16 | % |
| Securities, available for sale | | 324,446 | | | 7,478 | | | 4.65 | % | | 153,968 | | | 4,047 | | | 5.30 | % |
| Securities, held to maturity | | - | | | - | | | 0.00 | % | | 44,833 | | | 1,208 | | | 5.43 | % |
| Deposits in banks and short-term investments | | 183,584 | | | 3,454 | | | 3.79 | % | | 189,171 | | | 4,400 | | | 4.69 | % |
| Total interest earning assets | | 3,180,851 | | | 92,587 | | | 5.87 | % | | 3,042,740 | | | 90,767 | | | 6.02 | % |
| Noninterest-earning assets | | 222,479 | | | | | | | 193,504 | | | | | |
| Total assets | | $ | 3,403,330 | | | | | | | $ | 3,236,244 | | | | | |
| Liabilities and shareholders’ equity | | | | | | | | | | | | |
| Transaction accounts | | 453,837 | | | 7,511 | | | 3.34 | % | | 299,450 | | | 5,761 | | | 3.88 | % |
| Money market and savings | | 910,203 | | | 13,948 | | | 3.09 | % | | 601,652 | | | 10,333 | | | 3.46 | % |
| Time deposits | | 885,513 | | | 17,568 | | | 4.00 | % | | 1,193,282 | | | 24,785 | | | 4.19 | % |
| Total interest-bearing deposits | | 2,249,553 | | | 39,027 | | | 3.50 | % | | 2,094,384 | | | 40,878 | | | 3.94 | % |
| Sub debt | | 63,467 | | | 2,033 | | | 6.46 | % | | 63,360 | | | 2,140 | | | 6.81 | % |
| Borrowings | | 21,993 | | | 412 | | | 3.78 | % | | 21,456 | | | 434 | | | 4.08 | % |
| Total interest-bearing liabilities | | 2,335,013 | | | 41,472 | | | 3.58 | % | | 2,179,200 | | | 43,452 | | | 4.02 | % |
| Non-interest-bearing demand deposits | | 675,764 | | | | | | | 668,783 | | | | | |
| Other liabilities | | 37,532 | | | | | | | 45,912 | | | | | |
| Shareholders’ equity | | 355,021 | | | | | | | 342,349 | | | | | |
| Total liabilities and shareholders’ equity | | $ | 3,403,330 | | | | | | | $ | 3,236,244 | | | | | |
| Net interest spread | | | | | | 2.29 | % | | | | | | 1.99 | % |
| Net interest income and spread | | | | $ | 51,115 | | | | | | | $ | 47,315 | | | |
| Net interest income/margin | | | | | | 3.24 | % | | | | | | 3.14 | % |
| Cost of total deposits | | | | | | 2.69 | % | | | | | | 2.98 | % |
| Cost of total funding | | | | | | 2.78 | % | | | | | | 3.08 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| FIRST CAROLINA FINANCIAL SERVICES, INC. |
| FINANCIAL TABLES |
| | | | | | | | | | | | |
| Loan Data (unaudited) | | | | | | | | |
| | As of the Quarter Ended |
| | June 30,
2026 | | March 31,
2026 | | June 30,
2025 |
| (dollars in thousands) | | Amount | | % of
Loans | | Amount | | % of
Loans | | Amount | | % of
Loans |
| Construction, land & land development | | $ | 325,384 | | | 11.9 | % | | $ | 283,894 | | | 10.6 | % | | $ | 330,465 | | | 12.3 | % |
| Other commercial real estate | | 1,475,934 | | | 53.8 | % | | 1,449,799 | | | 54.0 | % | | 1,493,746 | | | 55.4 | % |
| Owner-occupied real estate | | 270,838 | | | 9.9 | % | | 268,905 | | | 10.0 | % | | 283,528 | | | 10.5 | % |
| Commercial, industrial & agricultural | | 313,056 | | | 11.4 | % | | 327,404 | | | 12.2 | % | | 297,347 | | | 11.0 | % |
| Residential real estate | | 355,291 | | | 13.0 | % | | 352,532 | | | 13.1 | % | | 289,823 | | | 10.7 | % |
| Consumer | | 2,046 | | | 0.1 | % | | 1,935 | | | 0.1 | % | | 1,966 | | | 0.1 | % |
| Gross loans held for investment | | $ | 2,742,549 | | | | | $ | 2,684,469 | | | | | $ | 2,696,875 | | | |
| Allowance for credit losses on LHFI | | (22,064) | | | | | (21,121) | | | | | (21,760) | | | |
| Net loans held for investment | | $ | 2,720,485 | | | | | $ | 2,663,348 | | | | | $ | 2,675,115 | | | |
| | | | | | | | | | | | | | | | | | | | |
|
|
| | | | | | |
| Nonperforming Assets (unaudited) | | | | |
| | | | | | |
| | As of the Quarter Ended |
| (dollars in thousands) | | June 30,
2026 | | March 31,
2026 | | June 30,
2025 |
| Nonaccrual loans | | $ | 22,272 | | | $ | 22,340 | | | $ | 24,245 | |
| Past due loans 90 days and still accruing | | - | | | - | | | - | |
| Total nonperforming loans | | $ | 22,272 | | | $ | 22,340 | | | $ | 24,245 | |
| Other nonperforming assets | | - | | | - | | | 5,780 | |
| Other real estate owned | | - | | | - | | | - | |
| Total nonperforming assets | | $ | 22,272 | | | $ | 22,340 | | | $ | 30,025 | |
| Nonperforming loans to gross loans | | 0.81 | % | | 0.83 | % | | 0.90 | % |
| Nonaccrual loans to gross loans | | 0.81 | % | | 0.83 | % | | 0.90 | % |
| Nonaccrual loans to total assets | | 0.65 | % | | 0.65 | % | | 0.72 | % |
| Nonperforming assets to total assets | | 0.65 | % | | 0.65 | % | | 0.89 | % |
Non-GAAP Financial Measures
Some of the financial measures discussed or presented in this press release or the accompanying financial tables are non-GAAP financial measures. In accordance with SEC rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”).
Our accounting and reporting policies conform to GAAP and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional non-GAAP financial measures. Management uses these non-GAAP financial measures because it believes they may provide useful supplemental information for evaluating our operations and performance over periods of time, as well as in managing and evaluating our business and in discussions about our operations and performance. Management believes these non-GAAP financial measures may also provide users of our financial information with a meaningful measure for assessing our financial results and credit trends, as well as a comparison to financial results for prior periods. These non-GAAP financial measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP and are not necessarily comparable to other similarly titled measures used by other companies.
Tangible common equity is defined as total shareholders’ equity less goodwill and other intangible assets.
Tangible book value per share is defined as tangible common equity divided by total common shares outstanding. We believe this measure is important because it shows changes from period to period in book value per share exclusive of changes in intangible assets.
Tangible common equity to tangible assets is defined as the ratio of tangible common equity divided by total tangible assets. We believe this measure is important because it shows relative changes from period to period in equity and total assets, each exclusive of changes in intangible assets.
Return on average tangible common equity (ROATCE) is defined as the ratio of net income to average tangible common equity (as defined above).
Efficiency ratio is defined as total noninterest expense divided by the sum of net interest income and noninterest income, excluding only gains from securities transactions. We believe this measure is important as an indicator of productivity because it shows the amount of revenue generated for each dollar spent.
Pretax pre-provision return (PPNR) is defined as net income plus income tax expense plus provision (minus recovery) for credit losses.
We believe that these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP. However, we acknowledge that our non-GAAP financial measures have a number of limitations. As such, these disclosures should not be considered as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other banking companies use. Other banking companies may use names similar to those we disclose for the non-GAAP financial measures, but may calculate them differently.
| | | | | | | | | | | | | | | | | |
| FIRST CAROLINA FINANCIAL SERVICES, INC. |
| NON-GAAP RECONCILIATION |
| | | | | |
| Tangible Book Value per Share / Tangible Common Equity to Tangible Assets (unaudited) |
| As of and for the Three Months Ended | As of and for the Six Months Ended |
| (dollars in thousands, except per share data) | June 30,
2026 | March 31,
2026 | June 30,
2025 | June 30,
2026 | June 30,
2025 |
| Total shareholders' equity (GAAP) | $ | 431,204 | | $ | 353,354 | | $ | 349,545 | | $ | 431,204 | | $ | 349,545 | |
| Less: goodwill and intangibles | (69,009) | | (69,702) | | (67,870) | | (69,009) | | (67,870) | |
| Tangible common equity (Non-GAAP) | $ | 362,195 | | $ | 283,652 | | $ | 281,675 | | $ | 362,195 | | $ | 281,675 | |
| Common shares outstanding | 31,068,852 | | 24,614,852 | | 24,965,054 | | 31,068,852 | | 24,965,054 | |
| Book value per common share (GAAP) | 13.88 | | 14.36 | | 14.00 | | 13.88 | | 14.00 | |
| Tangible book value per common share (Non-GAAP) | 11.66 | | 11.52 | | 11.28 | | 11.66 | | 11.28 | |
| Total assets (GAAP) | $ | 3,405,929 | | $ | 3,418,377 | | $ | 3,386,495 | | $ | 3,405,929 | | $ | 3,386,495 | |
| Less: goodwill and intangibles | (69,009) | | (69,702) | | (67,870) | | (69,009) | | (67,870) | |
| Tangible assets | $ | 3,336,920 | | $ | 3,348,675 | | $ | 3,318,625 | | $ | 3,336,920 | | $ | 3,318,625 | |
| Tangible common equity to tangible assets (Non-GAAP) | 10.85 | % | 8.47 | % | 8.49 | % | 10.85 | % | 8.49 | % |
| | | | | | | | | | | | | | | | | |
|
|
| | | | | |
| Return on Average Tangible Common Equity (unaudited) |
| As of and for the Three Months Ended | As of and for the Six Months Ended |
| (dollars in thousands) | June 30,
2026 | March 31,
2026 | June 30,
2025 | June 30,
2026 | June 30,
2025 |
| Net income (GAAP) | $ | 5,096 | | $ | 5,911 | | $ | 4,591 | | $ | 11,007 | | $ | 9,296 | |
| Average shareholders' equity | 357,717 | | 352,294 | | 343,492 | | 355,020 | | 343,575 | |
| Return on average equity | 5.71 | % | 6.80 | % | 5.36 | % | 6.25 | % | 5.46 | % |
| Average shareholders' equity | $ | 357,717 | | $ | 352,294 | | $ | 343,492 | | $ | 355,020 | | $ | 343,575 | |
| Less: average goodwill and intangibles | (69,463) | | (70,156) | | (68,398) | | (69,807) | | (57,167) | |
| Average tangible common equity (Non-GAAP) | 288,254 | | 282,138 | | 275,094 | | 285,213 | | 286,408 | |
| Return on average tangible common equity (Non-GAAP) | 7.09 | % | 8.50 | % | 6.69 | % | 7.78 | % | 6.55 | % |
| | | | | | | | | | | | | | | | | |
|
|
| | | | | |
| Efficiency Ratio (unaudited) |
| As of and for the Three Months Ended | As of and for the Six Months Ended |
| (dollars in thousands) | June 30,
2026 | March 31,
2026 | June 30,
2025 | June 30,
2026 | June 30,
2025 |
| Net interest income | $ | 25,588 | | $ | 25,527 | | $ | 23,529 | | $ | 51,115 | | $ | 47,315 | |
| Noninterest income (loss) | 6,675 | | 7,641 | | 13,206 | | 14,316 | | 22,894 | |
| Adjusted for: | | | | | |
| Gain (loss) on sale of securities | - | | 108 | | - | | 108 | | - | |
| Adjusted revenue | $ | 32,263 | | $ | 33,060 | | $ | 36,735 | | $ | 65,323 | | $ | 70,209 | |
| Total noninterest expense | 25,502 | | 26,232 | | 30,746 | | 51,734 | | 57,864 | |
| GAAP-based efficiency ratio | 79.04 | % | 79.35 | % | 83.70 | % | 79.20 | % | 82.42 | % |
| | | | | | | | | | | | | | | | | |
| FIRST CAROLINA FINANCIAL SERVICES, INC. |
| NON-GAAP RECONCILIATION |
| | | | | |
| Pretax pre-provision return (unaudited) | | | | |
| As of and for the Three Months Ended | As of and for the Six Months Ended |
| (dollars in thousands) | June 30,
2026 | March 31,
2026 | June 30,
2025 | June 30,
2026 | June 30,
2025 |
| Net income (GAAP-based) | $ | 5,096 | | $ | 5,911 | | $ | 4,591 | | $ | 11,007 | | $ | 9,296 | |
| Plus: | | | | | |
| Income tax expense | 1,392 | | 1,423 | | 1,567 | | 2,815 | | $ | 2,686 | |
| Provision (recovery) for credit losses | 273 | | (398) | | (169) | | (125) | | $ | 363 | |
| Pre-tax, pre-provision return | $ | 6,761 | | $ | 6,936 | | $ | 5,989 | | $ | 13,697 | | $ | 12,345 | |
