First Quarter 2026 Highlights
Net income increased 113% for the first quarter of 2026 to $3.4 million, or $0.41 per diluted share, compared to $1.6 million, or $0.19 per diluted share, for the first quarter of 2025. Operating earnings (non-GAAP), which excludes securities losses, net of tax, gain/(loss), the disposal/write down fixed assets and right of use assets, net of tax, gain on early extinguishment of debt, net of tax, and expenses related to branch sale, net of tax, gain on sale of branches, net of tax, and gain on sale of mortgage servicing rights (MSR), net of tax, were $3.2 million, or $0.39 per diluted share, for the first quarter of 2026, compared to $1.7 million, or $0.20 per diluted share, in the first quarter of 2025.
Book value per share increased $1.97, or 19.4%, from $10.18 per share at March 31, 2025, to $12.15 per share at March 31, 2026. Tangible book value (non-GAAP) per share increased $1.97, or 19.5%, from $10.09 per share at March 31, 2025, to $12.06 per share at March 31, 2026.
Net interest income for the quarter was $9.5 million, which represents an increase of $758 thousand, or 8.6%, compared to the first quarter of 2025. On a linked quarter basis, the decrease was $95 thousand, or 1.0%.
Net interest margin (NIM) increased during the quarter to 3.77% from 3.49% at March 31, 2025, and increased 6 basis points from 3.71% at December 31, 2025.
Total loans held for investment increased $21.3 million, or 10.9% annualized, to $801.2 million at March 31, 2026, from $779.9 million at December 31, 2025. During the second quarter of 2025, the Company sold the two branches in North Carolina and retained approximately $75.6 million of loans in those locations. Excluding the loan portfolio decline during the first quarter of 2026 of $4.2 million from the North Carolina market, loan growth for the quarter totaled $25.5 million. There was approximately $51.0 million loan portfolio remaining in the North Carolina market at March 31, 2026.
Total deposits decreased $19.1 million, or 8.1% annualized, to $929.0 million at March 31, 2026, from $948.1 million at December 31, 2025. During the second quarter of 2025, the Company sold the two branches in North Carolina which resulted in a decline of $55.9 million in deposits.
Asset quality remained steady with nonperforming assets declining to $2.1 million, or 0.19% of total assets at March 31, 2026, from $2.5 million, or 0.23% of total assets at December 31, 2025, compared to $933 thousand, or 0.09% of total assets at March 31, 2025.
Rick Saunders, Chief Executive Officer, commented: "We had good loan growth in the first quarter of 10.9% annualized, continued to improve our net interest margin and our efficiency ratio with good expense management. During the quarter, we sold mortgage servicing rights resulting in a gain of $266 thousand. This transaction allows us to manage our risk tolerance of our MSR asset relative to our capital ratios. Operating earnings improved 94% year over year, and our tangible book value per share improved by 19.5%. We expanded our NIM 28 basis points this quarter compared to the first quarter of 2025. Our loan pipelines remain strong as we begin 2026 and this momentum should continue for the remainder of the year. The Company remains committed to the communities we serve by providing exceptional service and banking solutions for our clients."
Financial Summary
Three Months Ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
($ in thousands, except per share data)
2026
2025
2025
2025
2025
Earnings:
Net income available to common shareholders
$ 3,436
$ 2,926
$ 2,714
$ 3,653
$ 1,613
Operating earnings (Non-GAAP)
3,233
2,852
2,714
2,248
1,665
Earnings per common share, diluted
0.41
0.36
0.33
0.44
0.19
Operating earnings, diluted (Non-GAAP)
0.39
0.35
0.33
0.27
0.20
Total revenue(1)
13,025
12,353
12,238
13,920
11,158
Net interest margin
3.77 %
3.71 %
3.66 %
3.53 %
3.49 %
Return on average assets(2)
1.25 %
1.06 %
0.99 %
1.32 %
0.59 %
Return on average assets-Operating Non-GAAP(2)
1.18 %
1.03 %
0.99 %
0.81 %
0.61 %
Return on average equity(2)
14.53 %
12.83 %
12.55 %
17.84 %
8.15 %
Return on average equity-Operating Non-GAAP(2)
13.67 %
12.51 %
12.55 %
10.98 %
8.41 %
Efficiency ratio(3)
64.84 %
71.08 %
69.61 %
64.61 %
75.52 %
Adjusted efficiency ratio - Non-GAAP(3)
66.16 %
71.59 %
69.61 %
74.03 %
75.04 %
As of
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
($ in thousands)
2026
2025
2025
2025
2025
Balance Sheet:
Total assets
$ 1,118,388
$ 1,093,359
$ 1,097,846
$ 1,102,203
$ 1,097,389
Total loans receivable
801,243
779,935
779,997
784,749
784,469
Total deposits
929,045
948,120
959,300
950,339
978,667
Total transaction deposits(4) to total deposits
36.83 %
36.59 %
40.68 %
39.50 %
39.46 %
Loans to deposits
86.24 %
82.26 %
81.31 %
82.58 %
80.16 %
Bank Capital Ratios:
Total risk-based capital ratio
14.15 %
13.82 %
13.58 %
12.88 %
12.99 %
Tier 1 risk-based capital ratio
13.04 %
12.72 %
12.48 %
11.84 %
11.92 %
Tier 1 leverage ratio
10.53 %
10.16 %
9.94 %
9.74 %
9.80 %
Common equity tier 1 capital ratio
13.04 %
12.72 %
12.48 %
11.84 %
11.92 %
Asset Quality Ratios:
Nonperforming assets as a percentage of total assets
0.19 %
0.23 %
0.03 %
0.02 %
0.09 %
Allowance for credit losses as a percentage of total loans receivable
1.14 %
1.13 %
1.12 %
1.09 %
1.10 %
Annualized quarterly net charge-offs (recoveries) as a percentage of average total loans receivable
(0.01 %)
(0.03 %)
0.02 %
0.03 %
0.08 %
Footnotes to tables located at the end of this release.
CONDENSED CONSOLIDATED INCOME STATEMENTS, Unaudited
Three Months Ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
($ in thousands, except per share data)
2026
2025
2025
2025
2025
Interest income
Loans
$ 11,534
$ 11,518
$ 11,842
$ 11,657
$ 11,293
Investment securities
2,413
2,302
2,300
2,145
2,166
Other interest income
189
406
323
505
318
Total interest income
14,136
14,226
14,465
14,307
13,777
Interest expense
Deposits
3,930
4,215
4,536
4,703
4,468
Other interest expense
683
393
476
495
544
Total interest expense
4,613
4,608
5,012
5,198
5,012
Net interest income
9,523
9,618
9,453
9,109
8,765
Provision for credit losses
175
76
90
88
707
Net interest income after provision for loan losses
9,348
9,542
9,363
9,021
8,058
Noninterest income
Mortgage banking income
2,103
1,405
1,577
1,586
1,351
Service fees on deposit accounts
366
405
412
299
319
Debit card and other service charges, commissions, and fees
506
527
531
543
529
Income from bank owned life insurance
104
107
108
104
102
Loss on sale of securities, net
(6)
(294)
-
-
(182)
Gain on sale of branches
2,313
Gain on sale of MSR
266
Gain on early extinguishment of debt
-
-
-
-
140
Gain (loss) on disposal / write down of fixed assets
-
382
-
(200)
-
Other income
163
203
157
166
134
Total noninterest income
3,502
2,735
2,785
4,811
2,393
Noninterest expense
Compensation and benefits
5,447
5,499
5,431
5,574
5,281
Occupancy and equipment
796
725
736
770
791
Data processing, technology, and communications
1,218
1,216
1,061
1,143
1,156
Professional fees
77
85
195
248
153
Marketing
96
71
155
175
123
Other
812
1,185
941
1,083
923
Total noninterest expense
8,446
8,781
8,519
8,993
8,427
Income before provision for income taxes
4,404
3,496
3,629
4,839
2,024
Income tax expense
968
570
915
1,186
411
Net income available to common shareholders
$ 3,436
$ 2,926
$ 2,714
$ 3,653
$ 1,613
Add back loss (gain) on fixed assets, net of tax
-
(320)
-
151
Subtract gain on sale of branches, net of tax
(1,746)
Subtract gain on sale of MSR, net of tax
(208)
Subtract gain on early extinguishment of debt, net of tax
(111)
Add back expenses related to branch sale, net of tax
-
-
190
18
Add back securities losses, net of tax
5
246
-
-
145
Operating earnings (Non-GAAP)
$ 3,233
$ 2,852
$ 2,714
$ 2,248
$ 1,665
Weighted average common shares - basic
7,866
7,745
7,902
7,892
