Key Highlights

  • First Carolina Financial Services reported third quarter net income of USD 7.9 million, or USD 0.26 per diluted share.
  • The quarter marked a turnaround from a net loss of USD 2.0 million, or USD 0.08 per diluted share, a year earlier.
  • Loan growth reached USD 154.1 million during the quarter, representing an annualized growth rate of 22.3%.
  • Net interest margin expanded 32 basis points year over year to 3.38% for the quarter.

Net Income Turns Positive on Margin Expansion

First Carolina Financial Services (NYSE:FCBM) reported third quarter net income of USD 7.9 million, or USD 0.26 per diluted share, compared with a net loss of USD 2.0 million, or a loss of USD 0.08 per diluted share, in the third quarter of 2025, a swing of USD 9.9 million. Net interest income totaled USD 28.1 million for the quarter, an increase of USD 2.6 million, or 10.0%, from the prior year period.

Net interest margin was 3.38% for the quarter, a 32 basis point improvement from the prior year period, driven primarily by lower interest-bearing deposit costs. The company's total cost of funds declined 31 basis points year over year to 2.81%, reflecting a shift in deposit mix from time deposits to money market and savings accounts.

Loan Growth and Payments Business Expansion

The company generated USD 154.1 million of loan growth during the quarter, representing an annualized growth rate of 22.3%. Noninterest income declined 48.0% to USD 6.7 million, primarily reflecting the planned discontinuation of a banking-as-a-service partnership inherited through a prior acquisition, which accounted for USD 3.6 million of the decrease.

Within its Payments segment, the company began offering prepaid cards as a disbursement option for universities participating in a pilot program, extending its presence in higher education banking. The company said noninterest expense declined 19.6% to USD 25.8 million, reflecting lower salary and benefits expense following a post-acquisition workforce realignment.

Balance Sheet Actions and Per Share Adjustments

The company redeemed its 2019 subordinated debt issuance in early September, a step management said would lower interest expense in coming periods. All per share figures reflect a two-for-one stock split completed on June 17, 2026, which affects comparability of earnings per share figures across periods.

Continued loan growth at the pace seen this quarter could support further net interest income gains, while the noninterest income decline tied to the discontinued banking-as-a-service partnership means year over year comparisons in that category stay affected until the change fully cycles through results.

Margin and Growth Metrics to Track

Net interest margin trends relative to the 3.38% reported this quarter, continued loan growth relative to the 22.3% annualized pace this period, and the interest expense benefit from the redeemed subordinated debt are among the items that may shape how the fourth quarter compares with this result. Progress in the Payments segment's higher education vertical remains a longer term growth variable the company has highlighted.