First Carolina Financial Services Reports Net Income of $7.9 Million, or $0.26 Per Diluted Share, for the Third Quarter of 2026

RALEIGH, N.C.--( BUSINESS WIRE)--First Carolina Financial Services, Inc. (NYSE: FCBM) (“First Carolina,” the “Company,” “we,” “our,” or “us”), today reported net income of $7.9 million, or $0.26 per diluted share, for the third quarter of 2026, compared to a loss of $2.0 million, or a loss of $0.08 per diluted share, for the third quarter of 2025. These results reflect a $9.9 million increase in net income compared to the third quarter of 2025. All per share data has been adjusted to reflect the two-for-one stock split completed on June 17, 2026.

“This was a pivotal quarter for First Carolina,” said Ron Day, Chairman, President, and Chief Executive Officer. “Last quarter we strengthened our core funding base, and this quarter we demonstrated what that foundation makes possible. On a linked-quarter basis, net income was up $2.8 million, or 55%. Our net interest margin expanded to 3.38% for the quarter, driven by continued loan repricing, higher yields on new originations, and well-managed funding costs even as rates have risen. Deepening treasury management relationships with our commercial clients continues to drive valuable operating deposit growth, which supports our discipline on funding costs. We also redeemed our 2019 subordinated debt issuance in early September, which should positively impact interest expense in coming periods. Most importantly, we have done all of this while keeping our eye on credit quality, and nonperforming assets held steady.”

“In payments, we are making significant progress in expanding our service offerings. At the end of the quarter, we began offering prepaid cards as a payment modality for universities participating in our pilot program, which gives our higher-education clients and their students a broader set of disbursement options. We continue penetrating the broader banking opportunity in higher education, which remains a strategic growth vertical for us. More broadly, we feel demand for First Carolina has never been higher. Customers have responded well to our becoming a public company, and the strength and range of our Commercial Banking, Payments, Consumer Banking and Wealth Management businesses position us to meet that demand across every stage of our clients’ financial journeys. We are very pleased with these accomplishments and believe they reflect the durable earnings power of our franchise as we head into the remainder of the year.”

Third Quarter 2026 Performance Highlights:

(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 $28.1 million for the third quarter of 2026, an increase of $2.6 million, or 10.0%, over the third quarter of 2025, reflecting continued balance sheet strength and revenue generation. The Company's net interest margin was 3.38% for the third quarter of 2026, representing a 32 basis point improvement over the prior year period, driven primarily by lower interest-bearing deposit costs. Net interest margin increased by 15 basis points from the second 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 increase in the third quarter of each fiscal year from the preceding second quarter period, primarily due to the educational calendar. Beyond these areas, deposit repricing initiatives and stronger yields on loans remain meaningful drivers of the Company’s performance.

The yield on average interest-earning assets was 5.97% for the third quarter of 2026, compared to 6.02% for the third quarter of 2025, a decrease of 5 basis points, primarily reflecting lower yield on the securities portfolio and short-term, floating rate investments. The yield on average interest-earning assets increased to 5.97% in the third quarter of 2026, from 5.92% in the second quarter of 2026, primarily driven by higher loan yields. The improvement reflects the strength of the Company's lending franchise and its disciplined approach to loan pricing, and it more than offset the decline in the yield on securities available for sale. As a result, 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 2.81% for the third quarter of 2026, a decrease of 31 basis points compared to the third quarter of 2025. Deposit costs were 2.71% for the third quarter of 2026, compared to 3.04% for the third quarter of 2025, a decrease of 33 basis points, and compared to 2.75% for the second quarter of 2026, a decrease of 4 basis points. The cost of interest-bearing liabilities was 3.58% for the third quarter of 2026, a decrease of 39 basis points compared to 3.97% for the third quarter of 2025, and no change compared to 3.58% for the second quarter of 2026, reflecting the strategic shift of deposits from time deposits to money market and savings accounts. Management believes the year-over-year decrease in total cost of funds, deposit costs, and cost of interest-bearing liabilities in the third quarter of 2026 versus the third quarter of 2025 are particularly meaningful, as this comparison eliminates the impact of the seasonal deposit flows in the Payments business that affect linked-quarter comparisons.

Noninterest income totaled $6.7 million for the third quarter of 2026, a decrease of $6.2 million, or 48.0%, from the third quarter of 2025. The decrease primarily reflects the planned discontinuation 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 and accounts for $3.6 million of the decrease from the third quarter of 2025. The decrease also reflects the non-recurring nature of the $1.7 million in net gains on sale of securities in the third quarter of 2025. Accordingly, results for the third quarter of 2026 are not directly comparable to those for the third quarter of 2025. Noninterest expense totaled $25.8 million for the third quarter of 2026, a decrease of $6.3 million, or 19.6%, from the third quarter of 2025. The decrease reflects lower salaries and employee benefits expense following the post-acquisition realignment of BM Technologies’ workforce, along with lower data processing costs and other professional fees. These results demonstrate the Company's ongoing commitment to disciplined cost control and operational efficiency.

The Company's effective tax rate was 20.7% for the third quarter of 2026, compared to 18.6% for the third quarter of 2025 and 21.5% for the second quarter of 2026. The higher effective tax rate compared to the prior-year quarter was primarily attributable to a higher state income effective tax rate due to a change in allocation of income before taxes between the Company, the Bank, and BM Technologies.

Balance Sheet Trends

Total assets were $3.67 billion at September 30, 2026, reflecting an increase of $154.1 million, or 4.4%, compared to September 30, 2025. Gross loans were $2.90 billion at September 30, 2026, an increase of $201.3 million, or 7.5%, compared to September 30, 2025, and an increase of $154.1 million, or 5.6%, from $2.74 billion at June 30, 2026.

Total deposits were $3.16 billion at September 30, 2026, reflecting an increase of $92.6 million, or 3.0%, compared to September 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 $571.7 million at September 30, 2026, a $815.3 million, or 58.8%, decrease compared to September 30, 2025, and a $106.6 million, or 15.7%, decrease compared to June 30, 2026.

Credit Quality

During the third quarter of 2026, the Company recorded a net release of the provision for credit losses of $1.0 million, compared to a provision for credit losses of $9.4 million in the third quarter of 2025, and a provision for credit losses of $273 thousand during the second quarter of 2026. The release recorded during the third quarter of 2026 was primarily attributable to the migration of construction loans to permanent financing, which carry lower expected loss rates, the reduction in unfunded commitments, an improvement in economic factors, and limited loan charge-offs for the period. The provision for credit losses in the third quarter of 2025 was impacted by the charge-off of a held-to-maturity security with an amortized cost basis of $5.8 million and a $1.9 million charge-off on a commercial loan. The Company's annualized net charge-offs to average loans held for investment ratio was 0.01% for the third quarter of 2026, 0.00% for the preceding quarter, and 0.07% one year prior.

Nonperforming assets totaled $21.9 million, or 0.60% of total assets, at September 30, 2026, compared to $22.3 million, or 0.63% of total assets, at September 30, 2025, and $22.3 million, or 0.65% of total assets at June 30, 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 phrases 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 or products, including our prepaid card offering being piloted at certain universities; 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.

FIRST CAROLINA FINANCIAL SERVICES, INC.

QUARTER END BALANCE SHEETS

(dollars in thousands)

September 30,

2026

June 30,

2026

March 31,

2026

December 31,

2025

September 30,

2025

(unaudited)

(audited)

(unaudited)

Assets

Cash and cash equivalents

237,374

118,821

190,323

134,116

297,177

Investment securities, available for sale

319,145

325,341

331,641

312,090

310,833

Investment securities, held to maturity

250

Federal Home Loan Bank stock, at cost

2,364

4,739

2,364

5,732

2,143

Loans receivable

2,896,606

2,742,549

2,684,469

2,648,174

2,695,350

Allowance for credit losses

(21,280

)

(22,064

)

(21,121

)

(20,893

)

(23,492

)

Net loans

2,875,326

2,720,485

2,663,348

2,627,281

2,671,858

Premises and equipment, net

41,059

42,077

43,531

44,707

45,086

Goodwill and intangible assets, net

68,318

69,009

69,702

70,395

68,080

Deferred tax asset

25,740

24,055

24,092

25,142

27,706

Bank-owned life insurance

69,258

68,577

58,910

58,356

57,798

Prepaid expenses and other assets

32,038

32,825

34,466

39,689

35,591

Total assets

3,670,622

3,405,929

3,418,377

3,317,508

3,516,522

Liabilities and shareholders' equity

Liabilities

Deposits

Noninterest bearing DDA

805,226

563,008

658,707

533,232

792,736

Interest bearing DDA

509,985

572,971

479,032

376,537

313,754

Savings and money market

1,276,158

1,016,471

931,271

759,197

576,962

Certificates of deposit

571,661

678,265

897,584

1,126,707

1,387,002

Total deposits

3,163,030

2,830,715

2,966,594

2,795,673

3,070,454

Federal Home Loan Bank advances

50,000

75,000

Subordinated debt, net

31,654

63,489

63,463

63,436

63,409

Allowance for credit losses

on off-balance sheet credit exposures

2,234

2,494

3,164

3,794

3,249

Accrued expenses and other liabilities

41,034

29,577

31,802

32,680

39,796

Total liabilities

3,237,952

2,976,275

3,065,023

2,970,583

3,176,908

Shareholders' equity

Common stock

15,535

12,307

12,261

Additional paid-in capital

309,186

308,195

240,684

239,903

239,014

Retained earnings

114,151

106,254

101,160

95,249

90,346

Accumulated other comprehensive loss

(6,202

)

(330

)

(797

)

(488

)

(2,007

)

Total shareholders' equity

432,670

429,654

353,354

346,925

339,614

Total liabilities and shareholders' equity

3,670,622

3,405,929

3,418,377

3,317,508

3,516,522

FIRST CAROLINA FINANCIAL SERVICES, INC.

STATEMENTS OF OPERATIONS (unaudited)

As of and for the Three Months Ended

As of and for the Nine Months Ended

(dollars in thousands)

September 30,

2026

June 30,

2026

September 30,

2025

September 30,

2026

September 30,

2025

Interest income

Interest on cash and due from banks

1,525

1,424

3,337

4,890

7,614

Loans, including fees

44,156

41,592

42,781

125,810

123,893

Investment securities

3,822

3,786

4,017

11,300

9,272

Other interest and dividends

148

178

Total interest income

49,562

46,846

50,190

142,148

140,957

Interest expense

Deposits

20,076

19,951

23,606

59,103

64,484

Borrowings

1,423

1,307

1,071

3,867

3,645

Total interest expense

21,499

21,258

24,677

62,970

68,129

Net interest income

28,063

25,588

25,513

79,178

72,828

Provision (recovery) for credit losses

(1,029

)

273

9,350

(1,155

)

9,713

Net interest income after provision for credit losses

29,092

25,315

16,163

80,333

63,115

Noninterest income

Service charges on deposit accounts

5,875

5,538

10,540

18,237

30,470

Gain on sale of securities, net

1,721

108

1,721

Bank-owned life insurance

681

636

559

1,871

1,250

Other noninterest income

161

501

110

816

2,382

Total noninterest income

6,717

6,675

12,930

21,032

35,823

Noninterest expense

Salaries and employee benefits

12,376

11,662

14,456

36,436

42,052

Occupancy and equipment

4,125

4,013

4,442

12,463

11,343

Data processing

1,651

1,738

2,179

5,342

6,325

Other professional fees

3,300

3,183

6,025

8,989

9,594

Service fees

252

1,928

Federal deposit insurance premiums

450

650

795

2,150

2,385

Consumer fraud and transaction losses

1,226

1,432

1,717

3,996

8,754

Other noninterest expense

2,597

2,729

2,421

7,913

7,592

Total noninterest expense

25,807

25,502

32,109

77,541

89,973

Net income before taxes

10,002

6,488

(3,016

)

23,824

8,965

Income tax expense

2,106

1,392

(1,016

)

4,921

1,669

Net income (loss)

7,896

5,096

(2,000

)

18,903

7,296

FIRST CAROLINA FINANCIAL SERVICES, INC.

FINANCIAL TABLES

Financial Highlights (unaudited)

As of and for the Three Months Ended

As of and for the Nine Months Ended

(dollars in thousands except per share amounts)

September 30,

2026

June 30,

2026

September 30,

2025

September 30,

2026

September 30,

2025

Selected Operating Data:

Interest income

49,562

46,846

50,190

142,148

140,957

Interest expense

21,499

21,258

24,677

62,970

68,129

Net interest income

28,063

25,588

25,513

79,178

72,828

Provision (recovery) for credit losses

(1,029

)

273

9,350

(1,155

)

9,713

Noninterest income

6,717

6,675

12,930

21,032

35,823

Noninterest expense

25,807

25,502

32,109

77,541

89,973

Income tax expense

2,106

1,392

(1,016

)

4,921

1,669

Net income (loss)

7,896

5,096

(2,000

)

18,903

7,296

Share and Per Share Data:

Basic earnings per share

0.26

0.21

(0.08

)

0.71

0.29

Diluted earnings per share

0.26

0.20

(0.08

)

0.71

0.29

Book value per share (at period end)

13.93

13.83

13.85

13.93

13.85

Tangible book value per share 1

11.73

11.61

11.07

11.73

11.07

Shares of common stock outstanding

31,069,852

31,068,852

24,521,854

31,069,852

24,521,854

Weighted average basic shares outstanding

30,838,326

24,802,799

24,537,037

26,810,808

24,808,766

Weighted average diluted shares outstanding

30,838,326

25,235,701

24,537,037

26,810,808

24,808,766

Selected Balance Sheet Data:

Total assets

3,670,622

3,405,929

3,516,522

3,670,622

3,516,522

Securities available-for-sale, at fair value

319,145

325,341

310,833

319,145

310,833

Securities held-to-maturity, at fair value

250

Gross loans held for investment (LHFI)

2,896,606

2,742,549

2,695,350

2,896,606

2,695,350

Allowance for credit losses

21,280

22,064

23,492

21,280

23,492

Goodwill and other intangible assets

68,318

69,009

68,080

68,318

68,080

Deposits

3,163,030

2,830,715

3,070,454

3,163,030

3,070,454

Sub debt

31,654

63,489

63,409

31,654

63,409

Other borrowings

50,000

Total shareholders' equity

432,670

429,654

339,614

432,670

339,614

FIRST CAROLINA FINANCIAL SERVICES, INC.

FINANCIAL TABLES

Financial Highlights - continued (unaudited)

As of and for the Three Months Ended

As of and for the Nine Months Ended

(dollars in thousands)

September 30,

2026

June 30,

2026

September 30,

2025

September 30,

2026

September 30,

2025

Performance Ratios:

Pre-tax pre-provision return (PPR) 2

8,973

6,761

6,334

22,669

18,678

Return on average assets (ROAA) 2

0.89

0.60

(0.22

0.73

0.29

Return on average equity 3

7.24

5.71

(2.29

)

6.63

2.84

Return on average tangible common equity (ROATCE) 1

8.61

7.09

(2.85

)

8.11

3.45

Net interest margin

3.38

3.23

3.06

3.29

3.11

Efficiency ratio 1

74.20

79.04

87.44

77.46

84.14

Noninterest income to average total assets

0.76

0.79

1.45

0.82

1.44

Noninterest income to total revenue

19.31

20.69

33.63

20.99

32.97

Noninterest expense to average total assets

2.92

3.01

3.61

3.01

3.61

Average interest-earning assets to average interest-bearing liabilities

138.02

133.15

134.14

136.84

137.62

Average equity to average total assets

12.33

10.53

9.79

11.09

10.30

Asset Quality Data:

Nonperforming assets to total assets

0.60

0.65

0.63

0.60

0.63

Nonperforming loans to gross LHFI

0.76

0.81

0.83

0.76

0.83

Total allowance for credit losses to nonperforming loans

97.15

99.07

105.26

97.15

105.26

Total allowance for credit losses to total LHFI

0.73

0.80

0.87

0.73

0.87

Net charge-offs to average LHFI

0.01

0.00

0.07

0.01

0.07

Balance Sheet and Capital Ratios:

Loan-to-deposit ratio

91.58

96.89

87.78

91.58

87.78

Noninterest bearing deposits to total deposits

25.46

19.89

25.82

25.46

25.82

Total shareholders' equity to total assets

11.79

12.61

9.66

11.79

9.66

Tangible common equity to tangible assets 1

10.11

10.81

7.87

10.11

7.87

Other:

Number of branches

Number of full-time equivalent employees

271

269

297

271

297

FIRST CAROLINA FINANCIAL SERVICES, INC.

FINANCIAL TABLES

QTD Average Balances and Yields/Rates (unaudited)

As of and for the Three Months Ended

September 30, 2026

June 30, 2026

September 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

2,805,567

44,156

6.24

2,688,901

41,592

6.20

2,701,520

42,781

6.28

Securities, available for sale

325,152

3,822

4.66

328,941

3,786

4.62

273,130

3,656

5.31

Securities, held to maturity

0.00

29,304

361

4.89

Deposits in banks and short-term investments

160,902

1,584

3.91

156,891

1,468

3.75

302,170

3,392

4.45

Total interest earning assets

3,291,621

49,562

5.97

3,174,733

46,846

5.92

3,306,124

50,190

6.02

Noninterest-earning assets

219,303

223,606

225,782

Total assets

3,510,924

3,398,339

3,531,906

Liabilities and shareholders’ equity

Transaction accounts

536,191

4,798

3.55

517,257

4,373

3.39

300,417

2,863

3.78

Money market and savings

1,149,202

9,603

3.32

972,528

7,654

3.16

620,330

5,447

3.48

Time deposits

599,421

5,675

3.76

799,742

7,924

3.97

1,480,550

15,296

4.10

Total interest-bearing deposits

2,284,814

20,076

3.49

2,289,527

19,951

3.50

2,401,297

23,606

3.90

Sub debt

56,234

993

7.01

63,480

1,014

6.41

63,400

1,070

6.70

Borrowings

43,777

430

3.90

31,348

293

3.75

6.50

Total interest-bearing liabilities

2,384,825

21,499

3.58

2,384,355

21,258

3.58

2,464,758

24,677

3.97

Noninterest-bearing demand deposits

655,744

620,825

675,808

Other liabilities

37,542

35,442

45,509

Shareholders’ equity

432,813

357,717

345,831

Total liabilities and shareholders’ equity

3,510,924

3,398,339

3,531,906

Net interest spread

2.40

2.34

2.05

Net interest income and spread

28,063

25,588

25,513

Net interest income/margin

3.38

3.23

3.06

Cost of total deposits

2.71

2.75

3.04

Cost of total funding

2.81

2.84

3.12

FIRST CAROLINA FINANCIAL SERVICES, INC.

FINANCIAL TABLES

YTD Average Balances and Yields/Rates (unaudited)

As of and for the Nine Months Ended

September 30, 2026

September 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

2,717,556

125,810

6.19

2,670,523

123,893

6.20

Securities, available for sale

324,684

11,300

4.65

194,069

7,703

5.31

Securities, held to maturity

0.00

39,656

1,569

5.29

Deposits in banks and short-term investments

175,940

5,038

3.83

227,251

7,792

4.58

Total interest earning assets

3,218,180

142,148

5.91

3,131,499

140,957

6.02

Noninterest-earning assets

220,975

204,382

Total assets

3,439,155

3,335,881

Liabilities and shareholders’ equity

Transaction accounts

481,590

12,310

3.42

299,776

8,624

3.85

Money market and savings

990,745

23,550

3.18

607,946

15,780

3.47

Time deposits

789,101

23,243

3.94

1,290,090

40,080

4.15

Total interest-bearing deposits

2,261,436

59,103

3.49

2,197,812

64,484

3.92

Sub debt

61,029

3,025

6.63

63,374

3,209

6.77

Borrowings

29,334

842

3.84

14,246

436

4.09

Total interest-bearing liabilities

2,351,799

62,970

3.58

2,275,432

68,129

4.00

Non-interest-bearing demand deposits

669,017

671,150

Other liabilities

37,108

45,777

Shareholders’ equity

381,231

343,522

Total liabilities and shareholders’ equity

3,439,155

3,335,881

Net interest spread

2.33

2.02

Net interest income and spread

79,178

72,828

Net interest income/margin

3.29

3.11

Cost of total deposits

2.70

3.01

Cost of total funding

2.79

3.09

FIRST CAROLINA FINANCIAL SERVICES, INC.

FINANCIAL TABLES

Loan Data (unaudited)

As of the Quarter Ended

September 30,

2026

June 30,

2026

September 30,

2025

(dollars in thousands)

Amount

% of

Loans

Amount

% of

Loans

Amount

% of

Loans

Construction, land & land development

249,744

8.6

325,384

11.9

315,488

11.7

Other commercial real estate

1,640,357

56.6

1,475,934

53.8

1,448,761

53.8

Owner-occupied real estate

317,752

11.0

270,838

9.9

296,887

11.0

Commercial, industrial & agricultural

314,855

10.9

313,056

11.4

322,688

12.0

Residential real estate

372,783

12.9

355,291

13.0

309,869

11.5

Consumer

1,115

0.0

2,046

0.1

1,657

0.1

Gross loans held for investment

2,896,606

2,742,549

2,695,350

Allowance for credit losses on LHFI

(21,280

)

(22,064

)

(23,492

)

Net loans held for investment

2,875,326

2,720,485

2,671,858

Nonperforming Assets (unaudited)

As of the Quarter Ended

(dollars in thousands)

September 30,

2026

June 30,

2026

September 30,

2025

Nonaccrual loans

21,905

22,272

22,318

Past due loans 90 days and still accruing

Total nonperforming loans

21,905

22,272

22,318

Other nonperforming assets

Other real estate owned

Total nonperforming assets

21,905

22,272

22,318

Nonperforming loans to gross loans

0.76

0.81

0.83

Nonaccrual loans to gross loans

0.76

0.81

0.83

Nonaccrual loans to total assets

0.60

0.65

0.63

Nonperforming assets to total assets

0.60

0.65

0.63

Non-GAAP Financial Measures

Some of the financial measures discussed or presented in this press release or the accompanying financial tables are not measures recognized under accounting principles generally accepted in the United States of America (“GAAP”) and therefore are considered 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 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.

Pre-tax pre-provision return (PPR) 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 the Quarter Ended

(dollars in thousands, except per share data)

September 30,

2026

June 30,

2026

September 30,

2025

Total shareholders' equity (GAAP)

432,670

429,654

339,614

Less: goodwill and intangibles

(68,318

)

(69,009

)

(68,080

)

Tangible common equity (Non-GAAP)

364,352

360,645

271,534

Common shares outstanding

31,069,852

31,068,852

24,521,854

Book value per common share (GAAP)

13.93

13.83

13.85

Tangible book value per common share (Non-GAAP)

11.73

11.61

11.07

Total assets (GAAP)

3,670,622

3,405,929

3,516,522

Less: goodwill and intangibles

(68,318

)

(69,009

)

(68,080

)

Tangible assets

3,602,304

3,336,920

3,448,442

Tangible common equity to tangible assets (Non-GAAP)

10.11

10.81

7.87

Return on Average Tangible Common Equity (unaudited)

As of and for the Three Months Ended

As of and for the Nine Months Ended

(dollars in thousands)

September 30,

2026

June 30,

2026

September 30,

2025

September 30,

2026

September 30,

2025

Net income (GAAP)

7,896

5,096

(2,000

)

18,903

7,296

Average shareholders' equity

432,813

357,717

345,831

381,231

343,522

Return on average equity

7.24

5.71

(2.29

6.63

2.84

Average shareholders' equity

432,813

357,717

345,831

381,231

343,522

Less: average goodwill and intangibles

(68,774

)

(69,463

)

(67,606

)

(69,459

)

(60,685

)

Average tangible common equity (Non-GAAP)

364,039

288,254

278,225

311,772

282,837

Return on average tangible common equity (Non-GAAP)

8.61

7.09

(2.85

8.11

3.45

Efficiency Ratio (unaudited)

As of and for the Three Months Ended

As of and for the Nine Months Ended

(dollars in thousands)

September 30,

2026

June 30,

2026

September 30,

2025

September 30,

2026

September 30,

2025

Net interest income

28,063

25,588

25,513

79,178

72,828

Noninterest income

6,717

6,675

12,930

21,032

35,823

Adjusted for:

Gain on sale of securities

1,721

108

1,721

Adjusted revenue

34,780

32,263

36,722

100,102

106,930

Total noninterest expense

25,807

25,502

32,109

77,541

89,973

Efficiency ratio (Non-GAAP)

74.20

79.04

87.44

77.46

84.14

FIRST CAROLINA FINANCIAL SERVICES, INC.

NON-GAAP RECONCILIATION

Pre-tax pre-provision return (unaudited)

As of and for the Three Months Ended

As of and for the Nine Months Ended

(dollars in thousands)

September 30,

2026

June 30,

2026

September 30,

2025

September 30,

2026

September 30,

2025

Net income (GAAP)

7,896

5,096

(2,000

)

18,903

7,296

Plus:

Income tax expense

2,106

1,392

(1,016

)

4,921

1,669

Provision (recovery) for credit losses

(1,029

)

273

9,350

(1,155

)

9,713

Pre-tax, pre-provision return (Non-GAAP)

8,973

6,761

6,334

22,669

18,678