First Carolina IPO price falls short of expected range

First Carolina Financial Services Inc. priced below its expected range as the second US bank to complete an IPO in 2026.

The Raleigh, North Carolina-based company priced its IPO at $12.50 per share on June 17 and listed its stock on June 18. The company said in a June 12 regulatory filing that it expected to complete the offering in the range of $14 to $16 per share. First Carolina first announced its plan to go public on the NYSE under the ticker symbol FCBM in a May 22 filing.

First Carolina's listing came days after the first US bank to go public in 2026, Forbright Inc., listed its stock on June 11. Recent bank IPOs, including Forbright's, have largely priced within their expected price ranges. However, the first bank IPO of 2025, for Northpointe Bancshares Inc., also priced below its expected range.

First Carolina had $3.4 billion in assets as of March 31, and has doubled in size since 2022, Chairman and CEO Ronald Day said during an investor presentation hosted on the website RetailRoadshow. The bank's growth included the acquisition of banking-as-a-service company BM Technologies Inc. in January 2025.

Based on the bank's earlier assumption of a $15-per-share price, the net proceeds of the IPO would have been $73.6 million after offering expenses. After the listing, the offering has generated about $68.8 million in total transaction value, according to S&P Global Market Intelligence data. First Carolina intends to use the IPO proceeds to generate dry powder for growth opportunities across the bank's business lines, CFO Steven Deaton said.

The IPO funds are also slated to restore First Carolina's capital levels back up to peer levels. First Carolina has historically raised funds to maintain capital levels at or above its peers, but the bank's tangible capital decreased in 2025 because of the $58.78 million BM Technologies deal's all-cash structure, Deaton said.

Rate rut

First Carolina's asset growth since 2022 coincided with the cycle of rate hikes, which hurt the bank's loan portfolio, Deaton said.

The bank's commercial real estate loans were largely fixed rate, and "our loan yields did not keep pace with our increasing deposit costs," the CFO said.

The bank's cost of deposits grew to 3.24% in 2023 from 1.14% in 2022, with net interest margin (NIM) falling to 2.89% from 3.46% in the same period, according to the investor presentation. Noninterest expenses also grew in the 2022–23 period as the bank invested in talent to allow for future scaling, Deaton said. The bank's cost of deposits has since gone back to 2.98%, and NIM has grown to 3.12% in 2025.

"We've since migrated to the majority of our CRE loans generated as floating rates with close rate floors and no rate ceilings," Deaton said.

The bank has also focused on bringing its cost of deposits down, with emphasis on the money market segment. Its reliance on certificates of deposit decreased to 30% of deposits in the first quarter of 2026 from 48% in full year 2023.

Deaton outlined a plan to return its balance sheet growth to mid-teens in 2027 and 2028, with NIM expansion driven by a focus on lowering deposit costs, increased fee income from the BM Technologies business, and expense reductions from consolidating First Carolina's and BM Technologies' core processors.

The executives are optimistic in their ability to grow the bank by capitalizing on "distracted" banks that have recently closed acquisitions, such as Pinnacle Financial Partners Inc.'s acquisition of Synovus Financial Corp. and Huntington Bancshares Inc.'s acquisition of Cadence Bank, in its Southeast footprint, Day said.

"There are billions of dollars in deposits held by regionals in the states in which we operate, and many of those firms are distracted," Day said. "We are one of the few that can disrupt and take advantage of this significant opportunity."

Growing BankMobile

Fueled by capital from the public offering, First Carolina has plans to expand businesses, including BankMobile, the college-campus-centered payments business it acquired as part of the BM Technologies deal.

First Carolina plans to introduce prepaid virtual cards to the BankMobile business, and with contracts expiring soon, the bank has options to refashion the card brand and its network arrangements, Chief Revenue Officer Andrew Mathieson said.

Through BM Technologies, First Carolina has access to 650,000 consumer and 750 commercial and industrial loan relationships on college campuses, with noninterest income opportunities that it can capitalize on by introducing customers from the payments business to the traditional bank, Day said.

After the acquisition, the bank integrated its bankers into the BM Technologies sales team to cross-sell commercial deposits. The bank has since acquired roughly $50 million in commercial deposits from colleges, Chief Banking Officer Douglas Ford said.

BankMobile generated roughly $535 million in low-cost deposits on average in the first quarter, which helped supplement the growth of the bank's other markets, Ford said.