Here are 1-2 brief analogies to describe First Carolina Financial Services (FCBM):

• It's like a regional bank that also serves as the **primary digital financial hub for college students nationwide**, leveraging its dominant financial aid disbursement platform to attract a massive base of low-cost deposits and cultivate future customers.
• Think of it as a regional bank combined with a **specialized 'deposit factory' akin to Ally Bank**, uniquely focused on capturing ultra-low-cost funds by holding a commanding market share in higher education financial aid processing.

• Commercial Real Estate (CRE) Lending: Provides term and construction financing solutions for commercial real estate properties.
• Commercial & Industrial (C&I) Lending: Offers loans for owner-occupied CRE, working capital, equipment financing, and specialized corporate finance needs for businesses.
• Portfolio Consumer Real Estate Loans: Provides relationship-based home mortgage loans to prime borrowers.
• Commercial Deposits & Treasury Management: Manages corporate clients' liquidity and provides automated payment solutions.
• Higher Education Funds Disbursement Services: Processes financial aid disbursements and refunds for higher education institutions nationwide.
• BankMobile Platform Accounts: Offers digital-first checking and savings accounts primarily to students for receiving disbursements.
• Retail Banking: Provides personalized day-to-day banking services and deposit products for commercial clients, business owners, and high-net-worth individuals.
• Wealth Management Services: Delivers a comprehensive suite of wealth management, trusts, and financial planning solutions.

First Carolina Financial Services (FCBM) serves a diverse client base across its various business lines. Based on the provided description, its major customers can be categorized as follows:

• Higher Education Institutions: These are primary clients for FCBM's Payments business, which offers financial aid disbursement and refund services to students. FCBM serves over 750 higher education campuses across 46 states, providing a significant source of institutional fees and low-cost deposits.
• Small and Medium-Sized Businesses (SMBs): This category encompasses clients of FCBM's Commercial Banking division. It includes businesses seeking Real Estate Banking solutions for commercial property financing (purchases, rehabilitation, refinancings) and Commercial & Industrial (C&I) banking solutions, such as working capital loans, equipment financing, and real estate financing for owner-occupied properties. FCBM targets firms typically with annual revenue between $5 million and $250 million.
• Individuals: This broad category covers several types of individual customers:
  • Students: Primarily through the BankMobile Platform, students receive disbursements from higher education institutions and utilize digital-first checking and savings accounts. This provides FCBM with a large base of individual customers nationwide.
  • Professionals and High Net Worth Individuals: These clients are served by FCBM's Retail Banking division for their personal day-to-day banking needs and by First Carolina Wealth for a full suite of wealth management, trust, and financial planning services.

Ronald A. Day, Chairman, President and Chief Executive Officer

Mr. Day has served as the Chief Executive Officer, President, and a Director of First Carolina Financial Services, Inc. and First Carolina Bank since July 2012, and became Chairman in 2026. He has held numerous senior positions in the banking industry, including senior roles at RBC Bank (USA) and prior CEO/COO posts.

Steven G. Deaton, Chief Financial Officer and Chief Risk Officer

Mr. Deaton brings over 30 years of experience in credit, risk, and banking leadership. He previously served as the Chief Financial Officer and Chief Risk Officer of First Carolina Financial Services, Inc. and First Carolina Bank. Prior to his current role, he was the CEO of Cornerstone Bank and held various positions at State Bank & Trust.

Kristen D. Brabble, Chief Operating Officer

Ms. Brabble has been a long-tenured operator at the bank, overseeing operations and administration since 2017, and has been with the organization for over 16 years, joining First Carolina Bank at its inception in 2012.

Douglas Ford IV, Chief Banking Officer

Mr. Ford is responsible for leading commercial banking and wealth management for the Bank. He previously launched middle-market banking at Pinnacle Financial Partners.

Patrick W. Pritchard, Chief Information Officer

Mr. Pritchard leads technology, fintech, and operations at First Carolina Bank, having joined in 2023. Prior to this, he served as an Executive Vice President at Pinnacle Financial Partners.

Key Risks for First Carolina Financial Services (FCBM)

1. Dependence on the Higher Education Market and Payments Business Dominance: First Carolina Financial Services' Payments business holds a dominant 73% market share, based on the number of partnerships, within the higher education funds disbursement sector. This business is a significant source of low-cost deposits (approximately $535 million as of March 31, 2026) and provides an "evergreen pipeline" for new customer accounts through its BankMobile Platform. The company’s strategy relies heavily on this segment for deposit gathering, non-interest fee income, and establishing new customer relationships. Consequently, any adverse changes in the higher education landscape, such as declining enrollments, shifts in federal financial aid policies, increased regulatory scrutiny (as suggested by the CFPB's annual report), or heightened competition within student banking services, could significantly impact the company's deposit base, fee income, and growth strategy.

2. Credit Risk and Concentration within Commercial Banking: The company's Commercial Banking operations, encompassing Real Estate Banking and Commercial & Industrial (C&I) Banking, carry inherent credit risks. Within Real Estate Banking, First Carolina intentionally limits its credit risk to borrowers and properties in the hospitality and quick-service restaurant industries, which creates a concentration risk. A downturn specific to these sectors or the broader commercial real estate market could lead to increased loan defaults and losses. For C&I Banking, loans are primarily made to closely held companies with annual revenues between $5 million and $250 million, relying on the operating business's cash flow for repayment. An economic slowdown or adverse conditions impacting small and medium-sized businesses could therefore heighten default risk in this segment. Furthermore, 85.8% of CRE and C&I clients also maintain deposit relationships, meaning widespread issues among these commercial clients could simultaneously affect both asset quality and deposit stability.

3. Interest Rate Risk: First Carolina Financial Services is exposed to interest rate risk, which impacts its net interest margin. The company explicitly states that its Commercial Banking business anticipates "significant headroom for growth and margin expansion, as older fixed-rate loans originated during lower rate environments pay off and we make new variable-rate loans in today’s comparatively higher rate environment." While the strategy is to move towards variable-rate lending, existing fixed-rate loans and unexpected or rapid shifts in interest rates could compress margins if the cost of funds increases faster than loan yields, or if loan demand softens in a high-rate environment. Effective management of this spread between interest-earning assets and interest-bearing liabilities is crucial for sustained profitability.

For First Carolina Financial Services (symbol: FCBM), the addressable market for its Payments business is as follows:

• Higher Education Funds Disbursement Sector: Greater than $127 billion in annual grants and loans in 2025 (U.S.).

• Commercial Banking Growth and Margin Expansion: The company expects significant headroom for growth and margin expansion within its Commercial Banking business. This is driven by the payoff of older fixed-rate loans originated during lower rate environments and the origination of new variable-rate loans in the comparatively higher current rate environment. Additionally, aggressive expansion of its treasury management and commercial deposit platform is aimed at securing low-cost, sticky operating deposits and providing mission-critical liquidity management and automated payment solutions to corporate clients.
• Expansion and Monetization of the Payments Business: Following the acquisition of BM Tech in 2025, the Payments business, an industry leader in higher education funds disbursement, presents a transformational opportunity. Growth is expected from capturing a larger share of the annual disbursements volume it already processes. Revenue will be generated through institutional fees (transactional and subscriptions), interchange and account fees from the BankMobile Platform deposit offering and associated debit cards, and as a significant source of low-cost deposits.
• Graduation of BankMobile Platform Customers into Long-Term Relationships: The BankMobile Platform provides an evergreen pipeline for new accounts with a near-zero customer acquisition cost. The company aims to monetize these accounts through interchange and account fees and by graduating student deposit accounts into long-term, franchise banking relationships. This strategy focuses on retaining customers acquired through the Payments business.
• Maturation of Strategic Technology Investments: Through 2024 and 2025, First Carolina made strategic investments to build a technology-forward operating platform capable of supporting long-term scale. These investments are expected to mature, enhancing sophisticated commercial and consumer banking divisions, improving enterprise risk management, and expanding the suite of offerings. This is anticipated to lead to increased operating leverage and a return to and exceeding historical levels of profitability.

Share Issuance

First Carolina Financial Services recently priced an IPO at $12.50 per share, offering 5.5 million shares for gross proceeds of approximately $68.75 million and estimated net proceeds of about $60.8 million, with an expected IPO date around June 18, 2026.

The company is targeting up to $85.1 million from its IPO to fund growth, leveraging a tech-driven, diversified banking model.

Outbound Investments

In 2025, First Carolina Financial Services acquired BM Tech to establish its Payments business.

Capital Expenditures

Through 2024 and 2025, First Carolina Financial Services made strategic investments to build an operating platform capable of supporting long-term scale.

Capital expenditures for the trailing twelve months ended December 2025 totaled approximately -$3.89 million.