Carter Bankshares, Inc. Announces Second Quarter 2025 Financial Results
Rhea-AI Summary
Carter Bankshares (NASDAQ:CARE) reported Q2 2025 net income of $8.5 million ($0.37 EPS), compared to $9.0 million ($0.39 EPS) in Q1 2025 and $4.8 million ($0.21 EPS) in Q2 2024. Net interest income rose to $32.4 million, up 7.4% from Q1 2025.
Key developments include the completion of a Branch Purchase from First Reliance Bank, acquiring $55.9 million in deposits and two North Carolina branches. The company also initiated a $20 million stock repurchase program, with $9.1 million already utilized.
Portfolio loans increased 6.5% annualized to $3.7 billion, while deposits grew 2.0% annualized. The company continues to manage its largest nonperforming credit relationship with the Justice Entities, which decreased to $235.5 million from $301.9 million in June 2023 through curtailment payments.
[ "Net interest income increased 15.2% year-over-year to $32.4 million", "Portfolio loans grew 6.5% annualized to $3.7 billion", "Total deposits increased 8.8% year-over-year", "Net interest margin improved by 26 basis points year-over-year to 2.82%", "Successfully acquired two branches with $55.9 million in deposits", "NPLs decreased by $10.9 million during Q2 2025" ]Positive
- None.
Negative
- Quarterly net income declined from $9.0 million in Q1 2025 to $8.5 million in Q2 2025
- Large nonperforming Justice Entities loans ($235.5 million) remain a significant concern
- Interest income negatively impacted by $6.7 million due to nonaccrual status
- Efficiency ratio increased to 78.63% from 75.71% in previous quarter
News Market Reaction 1 Alert
On the day this news was published, CARE gained 4.27%, reflecting a moderate positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
MARTINSVILLE, VA / ACCESS Newswire / July 24, 2025 / Carter Bankshares, Inc. (the "Company") (NASDAQ:CARE), the holding company of Carter Bank (the "Bank") today announced quarterly net income of
For the six months ended June 30, 2025, net income was
At the close of business on May 23, 2025, the Company completed the acquisition of two leased branch facilities and the deposits associated therewith, located in Mooresville, North Carolina and Winston-Salem, North Carolina, from First Reliance Bank (the "Branch Purchase"). In the Branch Purchase the Bank acquired
On May 20, 2025, the Company announced a stock repurchase program to purchase up to
The Company's financial results continue to be significantly impacted by loans in the Bank's Other segment of the Company's loan portfolio, the significant majority of which have been on nonaccrual status since the second quarter of 2023. The Bank's loans, now reduced to judgments, relate to various entities in which James C. Justice, II has an interest (collectively, the "Justice Entities"), remain the Bank's largest credit relationship and comprise the significant majority of the Other segment with an aggregate principal balance of
During the second quarter of 2025, the Company received
Financial Highlights for the Three and Six Months Ended June 30, 2025
Total portfolio loans increased
$59.6 million , or6.5% , on an annualized basis, to$3.7 billion at June 30, 2025 from March 31, 2025 and increased$197.6 million , or5.6% from June 30, 2024;The allowance for credit losses to total portfolio loans was
1.90% ,1.99% and2.72% at June 30, 2025, March 31, 2025 and June 30, 2024, respectively;Total deposits increased
$21.3 million , or2.0% on an annualized basis, compared to March 31, 2025 and increased$340.9 million , or8.8% , compared to June 30, 2024;Net interest income totaled
$32.4 million , an increase of$2.2 million , or7.4% compared to the prior quarter, and an increase of$4.3 million , or15.2% compared to the year ago quarter. Net interest margin, on a fully taxable equivalent ("FTE") basis3, increased 12 basis points to2.82% for the second quarter of 2025, compared to2.70% for the prior quarter and increased 26 basis points from the year ago quarter. Net interest income and net interest margin continue to be significantly impacted by the Bank's largest lending relationship remaining on nonaccrual status since the second quarter of 2023;NPLs decreased by
$10.9 million to$250.6 million at June 30, 2025 compared to March 31, 2025. NPLs to total portfolio loans were6.69% at June 30, 2025,7.09% at March 31, 2025 and8.46% at June 30, 2024; andThe efficiency ratio was
78.63% ,75.71% and81.62% , and the adjusted efficiency ratio (non-GAAP)4 was75.55% ,78.67% , and81.33% for the quarters ended June 30, 2025, March 31, 2025 and June 30, 2024, respectively. The efficiency ratio was impacted by the Bank's largest lending relationship that was placed in nonaccrual status during the second quarter of 2023 and a one-time gain on death benefit and expenses related to the Company's surrender of bank owned life insurance ("BOLI") in the first and second quarters of 2025.
"We are pleased to report another quarter with strong fundamentals and positive trends in the second quarter of 2025. During the quarter, we continued to see margin expansion and solid loan growth throughout our footprint. Our annualized loan growth of
Van Dyke continued, "Additionally, in the second quarter we completed the purchase of two leased branch facilities in Mooresville and Winston-Salem, North Carolina and the associated deposits from First Reliance Bank. The Bank acquired
Van Dyke continued, "On May 20, 2025, we announced a stock repurchase program to purchase up to
Van Dyke concluded, "Although our large nonperforming credit relationship continues to have a negative impact on our financial and credit metrics, aside from this impact, our fundamentals, financial performance, and asset quality metrics all remain solid. We are committed to resolving this lending relationship in a manner that best protects our Company and our shareholders in the long-term. We continue to believe we are well positioned for a strong remainder of 2025."
Operating Highlights
Credit Quality
NPLs as a percentage of total portfolio loans were
Since the Bank's largest lending relationship was transferred to nonaccrual status, in the second quarter of 2023 due to loan maturities and failure to pay in full, this relationship's NPL balance has decreased from
The specific reserves with respect to the Bank's largest NPL credit relationship were
During the second quarter of 2025, the (recovery) provision for credit losses was a recovery of
During the second quarter of 2025, the recovery for unfunded commitments was a recovery of
Net Interest Income
Net interest income for the second quarter of 2025 increased
Total interest-bearing deposit costs decreased 16 basis points to
Noninterest Income
Noninterest Income was
Noninterest Expense
Noninterest expense was
Other noninterest expenses and professional and legal fees similarly increased compared to the second quarter of 2024 driven by the matters discussed above. However, occupancy expense, net increased
Financial Condition
Total assets increased
Total portfolio loans increased
Total deposits increased
FHLB borrowings increased
At June 30, 2025 and March 31, 2025, approximately
Capitalization and Liquidity
The Company remained well capitalized at June 30, 2025. The Company's Tier 1 Capital ratio was
At June 30, 2025, funding sources accessible to the Company include borrowing availability at the FHLB, equal to
About Carter Bankshares, Inc.
Headquartered in Martinsville, VA, Carter Bankshares, Inc. (NASDAQ:CARE) provides a full range of commercial banking, consumer banking, mortgage and services through its subsidiary Carter Bank. The Company has
Important Note Regarding Non-GAAP Financial Measures
In addition to the results of operations presented in accordance with generally accepted accounting principles in the United States ("GAAP"), our management uses, and this press release contains or references, certain non-GAAP financial measures and should be read along with the accompanying tables in our definitions and reconciliations of GAAP to non-GAAP financial measures. This press release and the accompanying tables discuss financial measures that we believe are useful because they enhance the ability of investors and management to evaluate and compare the Company's operating results from period to period in a meaningful manner. Management also believes these measures provide information useful to investors in understanding our underlying business, operational performance and performance trends as these measures facilitate comparisons with the performance of other companies in the financial services industry. Non-GAAP measures should not be considered as an alternative to GAAP or considered to be more relevant than financial results determined in accordance with GAAP, nor are they necessarily comparable with similar non-GAAP measures that may be presented by other companies. Investors should consider the Company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results or financial condition as reported under GAAP.
Important Note Regarding Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements made in Mr. Van Dyke's quotations and may include statements relating to our financial condition, market conditions, results of operations, plans, objectives, outlook for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality and nonaccrual and nonperforming loans. Forward looking statements are typically identified by words or phrases such as "will likely result," "expect," "anticipate," "estimate," "forecast," "project," "intend," " believe," "assume," "strategy," "trend," "plan," "outlook," "outcome," "continue," "remain," "potential," "opportunity," "comfortable," "current," "position," "maintain," "sustain," "seek," "achieve" and variations of such words and similar expressions, or future or conditional verbs such as will, would, should, could or may.
These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions that are difficult to predict and often are beyond the Company's control. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. The matters discussed in these forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected, or implied in or by the forward-looking statements including, but not limited to the effects of:
market interest rates and the impacts of market interest rates on economic conditions, customer behavior, and the Company's net interest margin, net interest income and its deposit, loan and securities portfolios;
inflation, market and monetary fluctuations;
changes in trade, tariffs, monetary and fiscal policies and laws of the U.S. government and the related impacts on economic conditions and financial markets, and changes in policies of the Federal Reserve, FDIC and U.S. Department of the Treasury;
changes in accounting policies, practices, or guidance, for example, our adoption of Current Expected Credit Losses ("CECL") methodology, including potential volatility in the Company's operating results due to application of the CECL methodology;
cyber-security threats, attacks or events;
rapid technological developments and changes;
our ability to resolve our nonperforming assets and our ability to secure collateral on loans that have entered nonaccrual status due to loan maturities and failure to pay in full;
changes in the Company's liquidity and capital positions;
concentrations of loans secured by real estate, particularly CRE loans, and the potential impacts of changes in market conditions on the value of real estate collateral;
increased delinquency and foreclosure rates on CRE loans;
an insufficient allowance for credit losses;
the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, war and other geopolitical conflicts or public health events, and of any governmental and societal responses thereto; these potential adverse effects may include, without limitation, adverse effects on the ability of the Company's borrowers to satisfy their obligations to the Company, on the value of collateral securing loans, on the demand for the Company's loans or its other products and services, on incidents of cyberattack and fraud, on the Company's liquidity or capital positions, on risks posed by reliance on third-party service providers, on other aspects of the Company's business operations and on financial markets and economic growth;
a change in spreads on interest-earning assets and interest-bearing liabilities;
regulatory supervision and oversight, including our relationship with regulators and any actions that may be initiated by our regulators;
legislation affecting the financial services industry as a whole, and the Company and the Bank, in particular;
the outcome of pending and future litigation and/or governmental proceedings;
increasing price and product/service competition;
the ability to continue to introduce competitive new products and services on a timely, cost-effective basis;
managing our internal growth and acquisitions;
the possibility that the anticipated benefits from acquisitions cannot be fully realized in a timely manner or at all, or that integrating acquired operations will be more difficult, disruptive or more costly than anticipated;
the soundness of other financial institutions and any indirect exposure related to large bank failures and their impact on the broader market through other customers, suppliers and partners or that the conditions which resulted in the liquidity concerns with those failed banks may also adversely impact, directly or indirectly, other financial institutions and market participants with which the Company has commercial or deposit relationships with;
material increases in costs and expenses;
reliance on significant customer relationships;
general economic or business conditions, including unemployment levels, supply chain disruptions and slowdowns in economic growth;
significant weakening of the local economies in which we operate;
changes in customer behaviors, including consumer spending, borrowing and saving habits;
changes in deposit flows and loan demand;
our failure to attract or retain key associates;
expansions or consolidations in the Company's branch network, including that the anticipated benefits of the Company's branch acquisitions or the Company's branch network optimization project are not fully realized in a timely manner or at all;
deterioration of the housing market and reduced demand for mortgages; and
re-emergence of turbulence in significant portions of the global financial and real estate markets that could impact our performance, both directly, by affecting our revenues and the value of our assets and liabilities, and indirectly, by affecting the economy generally and access to capital in the amounts, at the times and on the terms required to support our future businesses.
Many of these factors, as well as other factors, are described in our filings with the Securities and Exchange Commission, including in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2024. All risk factors and uncertainties described herein and therein should be considered in evaluating the Company's forward-looking statements. Forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. We caution you not to unduly rely on forward-looking statements because the assumptions, beliefs, expectations and projections about future events are expressed in or implied by a forward-looking statement may, and often do, differ materially from actual results. Any forward-looking statement speaks only as to the date on which it is made, and we undertake no obligation to update, revise or clarify any forward-looking statement to reflect developments occurring after the statement is made, except as required by law.
Carter Bankshares, Inc.
investorrelations@CBTCares.com
CARTER BANKSHARES, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
BALANCE SHEETS
June 30, | March 31, | June 30, | ||||||||||
(Dollars in Thousands, except per share data) | (unaudited) | (unaudited) | (unaudited) | |||||||||
ASSETS | ||||||||||||
Cash and Due From Banks, including Interest-Bearing Deposits of | $ | 99,905 | $ | 88,999 | $ | 61,746 | ||||||
Securities Available-for-Sale, at Fair Value | 755,212 | 745,390 | 746,325 | |||||||||
Equity Securities | 10,200 | 10,178 | 5,063 | |||||||||
Loans Held-for-Sale | 246 | - | - | |||||||||
Portfolio Loans | 3,747,121 | 3,687,495 | 3,549,521 | |||||||||
Allowance for Credit Losses | (71,023 | ) | (73,518 | ) | (96,686 | ) | ||||||
Portfolio Loans, net | 3,676,098 | 3,613,977 | 3,452,835 | |||||||||
Bank Premises and Equipment, net | 72,105 | 73,944 | 73,347 | |||||||||
Goodwill | 1,193 | - | - | |||||||||
Core Deposit Intangible | 1,073 | - | - | |||||||||
Other Real Estate Owned, net | 1,657 | 577 | 2,501 | |||||||||
Federal Home Loan Bank Stock, at Cost | 8,653 | 5,875 | 14,467 | |||||||||
Bank Owned Life Insurance | 48,365 | 48,224 | 58,828 | |||||||||
Other Assets | 109,384 | 113,123 | 117,397 | |||||||||
Total Assets | $ | 4,784,091 | $ | 4,700,287 | $ | 4,532,509 | ||||||
LIABILITIES | ||||||||||||
Deposits: | ||||||||||||
Noninterest-Bearing Demand | $ | 635,192 | $ | 631,714 | $ | 653,296 | ||||||
Interest-Bearing Demand | 805,013 | 794,059 | 565,465 | |||||||||
Money Market | 544,764 | 528,381 | 500,475 | |||||||||
Savings | 343,659 | 353,394 | 399,833 | |||||||||
Certificates of Deposit | 1,893,611 | 1,893,379 | 1,762,232 | |||||||||
Total Deposits | 4,222,239 | 4,200,927 | 3,881,301 | |||||||||
Federal Home Loan Bank Borrowings | 113,500 | 55,000 | 238,000 | |||||||||
Reserve for Unfunded Loan Commitments | 2,737 | 3,072 | 2,914 | |||||||||
Other Liabilities | 39,980 | 39,522 | 45,883 | |||||||||
Total Liabilities | 4,378,456 | 4,298,521 | 4,168,098 | |||||||||
SHAREHOLDERS' EQUITY | ||||||||||||
Common Stock, Par Value | ||||||||||||
Outstanding- 22,669,834 shares at June 30, 2025, 23,161,993 shares at March 31, 2025 and 23,072,750 shares at June 30, 2024 | 22,670 | 23,162 | 23,073 | |||||||||
Additional Paid-in Capital | 84,146 | 92,418 | 91,274 | |||||||||
Retained Earnings | 351,069 | 342,559 | 319,697 | |||||||||
Accumulated Other Comprehensive Loss | (52,250 | ) | (56,373 | ) | (69,633 | ) | ||||||
Total Shareholders' Equity | 405,635 | 401,766 | 364,411 | |||||||||
Total Liabilities and Shareholders' Equity | $ | 4,784,091 | $ | 4,700,287 | $ | 4,532,509 | ||||||
PERFORMANCE RATIOS | ||||||||||||
Return on Average Assets (QTD Annualized) | 0.72 | % | 0.78 | % | 0.43 | % | ||||||
Return on Average Assets (YTD Annualized) | 0.75 | % | 0.78 | % | 0.47 | % | ||||||
Return on Average Shareholders' Equity (QTD Annualized) | 8.45 | % | 9.27 | % | 5.40 | % | ||||||
Return on Average Shareholders' Equity (YTD Annualized) | 8.85 | % | 9.27 | % | 5.99 | % | ||||||
Portfolio Loans to Deposit Ratio | 88.75 | % | 87.78 | % | 91.45 | % | ||||||
Allowance for Credit Losses to Total Portfolio Loans | 1.90 | % | 1.99 | % | 2.72 | % | ||||||
CAPITALIZATION RATIOS | ||||||||||||
Shareholders' Equity to Assets | 8.48 | % | 8.55 | % | 8.04 | % | ||||||
Tier 1 Leverage Ratio | 9.46 | % | 9.67 | % | 9.43 | % | ||||||
Risk-Based Capital - Tier 1 | 10.87 | % | 11.01 | % | 10.95 | % | ||||||
Risk-Based Capital - Total | 12.12 | % | 12.27 | % | 12.22 | % | ||||||
CARTER BANKSHARES, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
INCOME STATEMENTS
Quarter-to-Date | Year-to-Date | |||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
(Dollars in Thousands, except per share data) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||
Interest Income | $ | 57,747 | $ | 56,007 | $ | 54,583 | $ | 113,754 | $ | 108,632 | ||||||||||
Interest Expense | 25,388 | 25,869 | 26,491 | 51,257 | 52,121 | |||||||||||||||
NET INTEREST INCOME | 32,359 | 30,138 | 28,092 | 62,497 | 56,511 | |||||||||||||||
(Recovery) Provision for Credit Losses | (2,330 | ) | (2,025 | ) | 491 | (4,355 | ) | 507 | ||||||||||||
Recovery for Unfunded Commitments | (335 | ) | (114 | ) | (236 | ) | (449 | ) | (279 | ) | ||||||||||
NET INTEREST INCOME AFTER (RECOVERY) PROVISION FOR CREDIT LOSSES | 35,024 | 32,277 | 27,837 | 67,301 | 56,283 | |||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||||
Gains on Sales of Securities, net | - | - | 36 | - | 36 | |||||||||||||||
Service Charges, Commissions and Fees | 1,765 | 1,874 | 1,852 | 3,639 | 3,727 | |||||||||||||||
Debit Card Interchange Fees | 1,942 | 2,104 | 1,933 | 4,046 | 4,019 | |||||||||||||||
Insurance Commissions | 714 | 344 | 934 | 1,058 | 1,548 | |||||||||||||||
Bank Owned Life Insurance Income | 357 | 341 | 365 | 698 | 713 | |||||||||||||||
Other | 130 | 2,238 | 413 | 2,368 | 535 | |||||||||||||||
Total Noninterest Income | 4,908 | 6,901 | 5,533 | 11,809 | 10,578 | |||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||
Salaries and Employee Benefits | 14,082 | 13,657 | 14,216 | 27,739 | 28,416 | |||||||||||||||
Occupancy Expense, net | 4,230 | 4,472 | 3,793 | 8,702 | 7,541 | |||||||||||||||
FDIC Insurance Expense | 1,436 | 1,430 | 1,566 | 2,866 | 3,253 | |||||||||||||||
Other Taxes | 922 | 947 | 894 | 1,869 | 1,802 | |||||||||||||||
Advertising Expense | 708 | 911 | 528 | 1,619 | 885 | |||||||||||||||
Telephone Expense | 307 | 304 | 342 | 611 | 759 | |||||||||||||||
Professional and Legal Fees | 1,921 | 1,230 | 1,542 | 3,151 | 3,055 | |||||||||||||||
Data Processing | 1,395 | 1,444 | 1,234 | 2,839 | 2,125 | |||||||||||||||
Debit Card Expense | 991 | 992 | 808 | 1,983 | 1,564 | |||||||||||||||
Other | 3,312 | 2,655 | 2,523 | 5,967 | 4,303 | |||||||||||||||
Total Noninterest Expense | 29,304 | 28,042 | 27,446 | 57,346 | 53,703 | |||||||||||||||
Income Before Income Taxes | 10,628 | 11,136 | 5,924 | 21,764 | 13,158 | |||||||||||||||
Income Tax Provision | 2,118 | 2,183 | 1,121 | 4,301 | 2,544 | |||||||||||||||
Net Income | $ | 8,510 | $ | 8,953 | $ | 4,803 | $ | 17,463 | $ | 10,614 | ||||||||||
Shares Outstanding, at End of Period | 22,669,834 | 23,161,993 | 23,072,750 | 22,669,834 | 23,072,750 | |||||||||||||||
Average Shares Outstanding-Basic & Diluted | 22,805,881 | 22,873,800 | 22,826,510 | 22,839,412 | 22,798,476 | |||||||||||||||
PER SHARE DATA | ||||||||||||||||||||
Basic Earnings Per Common Share* | $ | 0.37 | $ | 0.39 | $ | 0.21 | $ | 0.76 | $ | 0.46 | ||||||||||
Diluted Earnings Per Common Share* | $ | 0.37 | $ | 0.39 | $ | 0.21 | $ | 0.76 | $ | 0.46 | ||||||||||
Book Value | $ | 17.89 | $ | 17.35 | $ | 15.79 | $ | 17.89 | $ | 15.79 | ||||||||||
Market Value | $ | 17.34 | $ | 16.18 | $ | 15.12 | $ | 17.34 | $ | 15.12 | ||||||||||
PROFITABILITY RATIOS (GAAP) | ||||||||||||||||||||
Net Interest Margin | 2.80 | % | 2.68 | % | 2.55 | % | 2.74 | % | 2.56 | % | ||||||||||
Efficiency Ratio | 78.63 | % | 75.71 | % | 81.62 | % | 77.18 | % | 80.05 | % | ||||||||||
PROFITABILITY RATIOS (Non-GAAP) | ||||||||||||||||||||
Net Interest Margin (FTE)3 | 2.82 | % | 2.70 | % | 2.56 | % | 2.76 | % | 2.58 | % | ||||||||||
Adjusted Efficiency Ratio (Non-GAAP)4 | 75.55 | % | 78.67 | % | 81.33 | % | 77.06 | % | 80.17 | % | ||||||||||
*All outstanding unvested restricted stock awards are considered participating securities for the earnings per share calculation. As such, these shares have been allocated to a portion of net income and are excluded from the diluted earnings per share calculation.
CARTER BANKSHARES, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
NET INTEREST MARGIN (FTE) (QTD AVERAGES)
(Unaudited)
June 30, 2025 | March 31, 2025 | June 30, 2024 | ||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | Average Balance | Income/ Expense | Rate | Average Balance | Income/ Expense | Rate | Average Balance | Income/ Expense | Rate | |||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||||||
Interest-Bearing Deposits with Banks | $ | 58,006 | $ | 643 | 4.45 | % | $ | 67,387 | $ | 748 | 4.50 | % | $ | 31,083 | $ | 420 | 5.43 | % | ||||||||||||||||||
Tax-Free Investment Securities3 | 11,622 | 85 | 2.93 | % | 11,662 | 84 | 2.92 | % | 11,779 | 86 | 2.94 | % | ||||||||||||||||||||||||
Taxable Investment Securities | 818,588 | 6,796 | 3.33 | % | 807,891 | 6,655 | 3.34 | % | 841,787 | 7,721 | 3.69 | % | ||||||||||||||||||||||||
Total Securities | 830,210 | 6,881 | 3.32 | % | 819,553 | 6,739 | 3.33 | % | 853,566 | 7,807 | 3.68 | % | ||||||||||||||||||||||||
Tax-Free Loans3 | 89,362 | 732 | 3.29 | % | 93,480 | 761 | 3.30 | % | 105,487 | 854 | 3.26 | % | ||||||||||||||||||||||||
Taxable Loans | 3,648,629 | 49,522 | 5.44 | % | 3,567,184 | 47,825 | 5.44 | % | 3,430,330 | 45,395 | 5.32 | % | ||||||||||||||||||||||||
Total Loans | 3,737,991 | 50,254 | 5.39 | % | 3,660,664 | 48,586 | 5.38 | % | 3,535,817 | 46,249 | 5.26 | % | ||||||||||||||||||||||||
Federal Home Loan Bank Stock | 8,428 | 140 | 6.66 | % | 6,499 | 112 | 6.99 | % | 16,611 | 304 | 7.36 | % | ||||||||||||||||||||||||
Total Interest-Earning Assets | 4,634,635 | 57,918 | 5.01 | % | 4,554,103 | 56,185 | 5.00 | % | 4,437,077 | 54,780 | 4.97 | % | ||||||||||||||||||||||||
Noninterest Earning Assets | 126,303 | 121,766 | 91,648 | |||||||||||||||||||||||||||||||||
Total Assets | $ | 4,760,938 | $ | 4,675,869 | $ | 4,528,725 | ||||||||||||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||||||||||||
Interest-Bearing Demand | $ | 805,749 | $ | 3,661 | 1.82 | % | $ | 744,895 | $ | 3,386 | 1.84 | % | $ | 532,700 | $ | 1,689 | 1.28 | % | ||||||||||||||||||
Money Market | 536,366 | 3,510 | 2.62 | % | 525,463 | 3,319 | 2.56 | % | 510,828 | 3,926 | 3.09 | % | ||||||||||||||||||||||||
Savings | 347,863 | 129 | 0.15 | % | 355,123 | 113 | 0.13 | % | 411,457 | 145 | 0.14 | % | ||||||||||||||||||||||||
Certificates of Deposit | 1,885,486 | 16,759 | 3.57 | % | 1,918,195 | 18,205 | 3.85 | % | 1,731,358 | 16,963 | 3.94 | % | ||||||||||||||||||||||||
Total Interest-Bearing Deposits | 3,575,464 | 24,059 | 2.70 | % | 3,543,676 | 25,023 | 2.86 | % | 3,186,343 | 22,723 | 2.87 | % | ||||||||||||||||||||||||
Federal Home Loan Bank Borrowings | 108,753 | 1,186 | 4.37 | % | 69,833 | 702 | 4.08 | % | 283,154 | 3,675 | 5.22 | % | ||||||||||||||||||||||||
Other Borrowings | 10,713 | 143 | 5.35 | % | 10,417 | 144 | 5.61 | % | 8,460 | 93 | 4.42 | % | ||||||||||||||||||||||||
Total Borrowings | 119,466 | 1,329 | 4.46 | % | 80,250 | 846 | 4.28 | % | 291,614 | 3,768 | 5.20 | % | ||||||||||||||||||||||||
Total Interest-Bearing Liabilities | 3,694,930 | 25,388 | 2.76 | % | 3,623,926 | 25,869 | 2.90 | % | 3,477,957 | 26,491 | 3.06 | % | ||||||||||||||||||||||||
Noninterest-Bearing Liabilities | 662,168 | 660,437 | 693,336 | |||||||||||||||||||||||||||||||||
Shareholders' Equity | 403,840 | 391,506 | 357,432 | |||||||||||||||||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 4,760,938 | $ | 4,675,869 | $ | 4,528,725 | ||||||||||||||||||||||||||||||
Net Interest Income3 | $ | 32,530 | $ | 30,316 | $ | 28,289 | ||||||||||||||||||||||||||||||
Net Interest Margin3 | 2.82 | % | 2.70 | % | 2.56 | % | ||||||||||||||||||||||||||||||
CARTER BANKSHARES, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
NET INTEREST MARGIN (FTE) (YTD AVERAGES)
(Unaudited)
Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |||||||||||||||||||||||
(Dollars in Thousands) | Average Balance | Income/ Expense | Rate | Average Balance | Income/ Expense | Rate | ||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Interest-Bearing Deposits with Banks | $ | 62,670 | $ | 1,391 | 4.48 | % | $ | 27,606 | $ | 755 | 5.50 | % | ||||||||||||
Tax-Free Investment Securities3 | 11,642 | 169 | 2.93 | % | 11,799 | 171 | 2.91 | % | ||||||||||||||||
Taxable Investment Securities | 813,269 | 13,451 | 3.34 | % | 847,664 | 15,464 | 3.67 | % | ||||||||||||||||
Total Securities | 824,911 | 13,620 | 3.33 | % | 859,463 | 15,635 | 3.66 | % | ||||||||||||||||
Tax-Free Loans3 | 91,410 | 1,493 | 3.29 | % | 108,479 | 1,751 | 3.25 | % | ||||||||||||||||
Taxable Loans | 3,608,131 | 97,347 | 5.44 | % | 3,418,994 | 90,212 | 5.31 | % | ||||||||||||||||
Total Loans | 3,699,541 | 98,840 | 5.39 | % | 3,527,473 | 91,963 | 5.24 | % | ||||||||||||||||
Federal Home Loan Bank Stock | 7,469 | 252 | 6.80 | % | 18,507 | 682 | 7.41 | % | ||||||||||||||||
Total Interest-Earning Assets | 4,594,591 | 114,103 | 5.01 | % | 4,433,049 | 109,035 | 4.95 | % | ||||||||||||||||
Noninterest Earning Assets | 124,048 | 91,409 | ||||||||||||||||||||||
Total Assets | $ | 4,718,639 | $ | 4,524,458 | ||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||
Interest-Bearing Demand | $ | 775,490 | $ | 7,047 | 1.83 | % | $ | 514,376 | $ | 2,801 | 1.10 | % | ||||||||||||
Money Market | 530,944 | 6,829 | 2.59 | % | 517,862 | 7,922 | 3.08 | % | ||||||||||||||||
Savings | 351,473 | 242 | 0.14 | % | 425,616 | 282 | 0.13 | % | ||||||||||||||||
Certificates of Deposit | 1,901,751 | 34,964 | 3.71 | % | 1,683,589 | 32,435 | 3.87 | % | ||||||||||||||||
Total Interest-Bearing Deposits | 3,559,658 | 49,082 | 2.78 | % | 3,141,443 | 43,440 | 2.78 | % | ||||||||||||||||
Federal Home Loan Bank Borrowings | 89,400 | 1,888 | 4.26 | % | 324,968 | 8,494 | 5.26 | % | ||||||||||||||||
Other Borrowings | 10,566 | 287 | 5.48 | % | 8,081 | 187 | 4.65 | % | ||||||||||||||||
Total Borrowings | 99,966 | 2,175 | 4.39 | % | 333,049 | 8,681 | 5.24 | % | ||||||||||||||||
Total Interest-Bearing Liabilities | 3,659,624 | 51,257 | 2.82 | % | 3,474,492 | 52,121 | 3.02 | % | ||||||||||||||||
Noninterest-Bearing Liabilities | 661,308 | 693,814 | ||||||||||||||||||||||
Shareholders' Equity | 397,707 | 356,152 | ||||||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 4,718,639 | $ | 4,524,458 | ||||||||||||||||||||
Net Interest Income3 | $ | 62,846 | $ | 56,914 | ||||||||||||||||||||
Net Interest Margin3 | 2.76 | % | 2.58 | % | ||||||||||||||||||||
CARTER BANKSHARES, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
LOANS AND LOANS HELD-FOR-SALE
(Unaudited)
(Dollars in Thousands) | June 30, | March 31, | June 30, | |||||||||
Commercial | ||||||||||||
Commercial Real Estate | $ | 2,000,766 | $ | 1,915,863 | $ | 1,801,397 | ||||||
Commercial and Industrial | 221,880 | 234,024 | 240,611 | |||||||||
Total Commercial Loans | 2,222,646 | 2,149,887 | 2,042,008 | |||||||||
Consumer | ||||||||||||
Residential Mortgages | 814,188 | 801,253 | 783,903 | |||||||||
Other Consumer | 27,991 | 28,804 | 31,284 | |||||||||
Total Consumer Loans | 842,179 | 830,057 | 815,187 | |||||||||
Construction | 443,573 | 459,285 | 394,926 | |||||||||
Other | 238,723 | 248,266 | 297,400 | |||||||||
Total Portfolio Loans | 3,747,121 | 3,687,495 | 3,549,521 | |||||||||
Loans Held-for-Sale | 246 | - | - | |||||||||
Total Loans | $ | 3,747,367 | $ | 3,687,495 | $ | 3,549,521 | ||||||
CARTER BANKSHARES, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
ASSET QUALITY DATA
(Unaudited)
For the Periods Ended | ||||||||||||
(Dollars in Thousands) | June 30, | March 31, | June 30, | |||||||||
Nonaccrual Loans | ||||||||||||
Commercial Real Estate | $ | 9,613 | $ | 9,733 | $ | 611 | ||||||
Commercial and Industrial | 1,048 | 1,070 | 1,084 | |||||||||
Residential Mortgages | 4,142 | 5,326 | 1,951 | |||||||||
Other Consumer | 29 | 38 | 30 | |||||||||
Construction | 207 | 213 | 2,426 | |||||||||
Other | 235,542 | 245,064 | 294,140 | |||||||||
Total Nonperforming Loans | 250,581 | 261,444 | 300,242 | |||||||||
Other Real Estate Owned | 1,657 | 577 | 2,501 | |||||||||
Total Nonperforming Assets | $ | 252,238 | $ | 262,021 | $ | 302,743 | ||||||
Nonperforming Loans to Total Portfolio Loans | 6.69 | % | 7.09 | % | 8.46 | % | ||||||
Nonperforming Assets to Total Portfolio Loans plus Other Real Estate Owned | 6.73 | % | 7.10 | % | 8.52 | % | ||||||
Allowance for Credit Losses to Total Portfolio Loans | 1.90 | % | 1.99 | % | 2.72 | % | ||||||
Allowance for Credit Losses to Nonperforming Loans | 28.34 | % | 28.12 | % | 32.20 | % | ||||||
Net Loan Charge-offs QTD | $ | 165 | $ | 57 | $ | 341 | ||||||
Net Loan Charge-offs YTD | $ | 222 | $ | 57 | $ | 873 | ||||||
Net Loan Charge-offs (Annualized) to Average Portfolio Loans QTD | 0.02 | % | 0.01 | % | 0.04 | % | ||||||
Net Loan Charge-offs (Annualized) to Average Portfolio Loans YTD | 0.01 | % | 0.01 | % | 0.05 | % |
CARTER BANKSHARES, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
ALLOWANCE FOR CREDIT LOSSES
(Unaudited)
Quarter-to-Date | Year-to-Date | |||||||||||||||||||
(Dollars in Thousands) | June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
Balance Beginning of Period | $ | 73,518 | $ | 75,600 | $ | 96,536 | $ | 75,600 | $ | 97,052 | ||||||||||
(Recovery) Provision for Credit Losses | (2,330 | ) | (2,025 | ) | 491 | (4,355 | ) | 507 | ||||||||||||
Charge-offs: | ||||||||||||||||||||
Commercial Real Estate | - | - | - | - | - | |||||||||||||||
Commercial and Industrial | - | 7 | 1 | 7 | 19 | |||||||||||||||
Residential Mortgages | - | - | 4 | - | 27 | |||||||||||||||
Other Consumer | 288 | 171 | 488 | 459 | 968 | |||||||||||||||
Construction | - | 1 | - | 1 | 156 | |||||||||||||||
Other | - | - | - | - | - | |||||||||||||||
Total Charge-offs | 288 | 179 | 493 | 467 | 1,170 | |||||||||||||||
Recoveries: | ||||||||||||||||||||
Commercial Real Estate | - | - | - | - | - | |||||||||||||||
Commercial and Industrial | 2 | 3 | 1 | 5 | 2 | |||||||||||||||
Residential Mortgages | 2 | 8 | 22 | 10 | 24 | |||||||||||||||
Other Consumer | 119 | 110 | 129 | 229 | 271 | |||||||||||||||
Construction | - | 1 | - | 1 | - | |||||||||||||||
Other | - | - | - | - | - | |||||||||||||||
Total Recoveries | 123 | 122 | 152 | 245 | 297 | |||||||||||||||
Total Net Charge-offs | 165 | 57 | 341 | 222 | 873 | |||||||||||||||
Balance End of Period | $ | 71,023 | $ | 73,518 | $ | 96,686 | $ | 71,023 | $ | 96,686 | ||||||||||
CARTER BANKSHARES, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
DEFINITIONS AND RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES:
(Unaudited)
1 Pre-tax Pre-provision Income (Non-GAAP) | Quarter-to-Date | Year-to-Date | ||||||||||||||||||
(Dollars in Thousands) | June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
Net Interest Income | $ | 32,359 | $ | 30,138 | $ | 28,092 | $ | 62,497 | $ | 56,511 | ||||||||||
Noninterest Income | 4,908 | 6,901 | 5,533 | 11,809 | 10,578 | |||||||||||||||
Noninterest Expense | 29,304 | 28,042 | 27,446 | 57,346 | 53,703 | |||||||||||||||
Pre-tax Pre-provision Income (Non-GAAP) | $ | 7,963 | $ | 8,997 | $ | 6,179 | $ | 16,960 | $ | 13,386 | ||||||||||
2 Adjusted Net Income (Non-GAAP) | Quarter-to-Date | Year-to-Date | ||||||||||||||||||
(Dollars in Thousands, except per share data) | June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
Net Income | $ | 8,510 | $ | 8,953 | $ | 4,803 | $ | 17,463 | $ | 10,614 | ||||||||||
Gains on Sales of Securities, net | - | - | (36 | ) | - | (36 | ) | |||||||||||||
Equity Security Unrealized Fair Value Gain | (22 | ) | (137 | ) | (63 | ) | (159 | ) | (63 | ) | ||||||||||
Losses (Gains) on Sales and Write-downs of Bank Premises, net | 60 | (3 | ) | 44 | 57 | 45 | ||||||||||||||
Losses (Gains) on Sales and Write-downs of OREO, net | 262 | 81 | (8 | ) | 343 | (350 | ) | |||||||||||||
1035 Exchange fee on BOLI | 252 | 275 | - | 527 | - | |||||||||||||||
Acquisition Costs | 386 | - | - | 386 | - | |||||||||||||||
Gain on BOLI death benefit5 | - | (1,882 | ) | - | (1,882 | ) | - | |||||||||||||
OREO Income | - | - | (20 | ) | - | (28 | ) | |||||||||||||
Severance Pay | 40 | - | - | 40 | - | |||||||||||||||
Contingent Liability | 38 | - | - | 38 | - | |||||||||||||||
Total Tax Effect | (214 | ) | (45 | ) | 18 | (259 | ) | 91 | ||||||||||||
Adjusted Net Income (Non-GAAP) | $ | 9,312 | $ | 7,242 | $ | 4,738 | $ | 16,554 | $ | 10,273 | ||||||||||
Average Shares Outstanding - diluted | 22,805,881 | 22,873,800 | 22,826,510 | 22,839,412 | 22,798,476 | |||||||||||||||
Adjusted Earnings Per Common Share (diluted) (Non-GAAP) | $ | 0.41 | $ | 0.32 | $ | 0.21 | $ | 0.72 | $ | 0.45 | ||||||||||
3 Net interest income has been computed on a fully taxable equivalent basis ("FTE") using
Net Interest Income (FTE) (Non-GAAP) | Quarter-to-Date | Year-to-Date | ||||||||||||||||||
(Dollars in Thousands) | June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
Interest and Dividend Income (GAAP) | $ | 57,747 | $ | 56,007 | $ | 54,583 | $ | 113,754 | $ | 108,632 | ||||||||||
Tax Equivalent Adjustment3 | 171 | 178 | 197 | 349 | 403 | |||||||||||||||
Interest and Dividend Income (FTE) (Non-GAAP) | 57,918 | 56,185 | 54,780 | 114,103 | 109,035 | |||||||||||||||
Average Earning Assets | 4,634,635 | 4,554,103 | 4,437,077 | 4,594,591 | 4,433,049 | |||||||||||||||
Yield on Interest-earning Assets (GAAP) | 5.00 | % | 4.99 | % | 4.95 | % | 4.99 | % | 4.93 | % | ||||||||||
Yield on Interest-earning Assets (FTE) (Non-GAAP) | 5.01 | % | 5.00 | % | 4.97 | % | 5.01 | % | 4.95 | % | ||||||||||
Net Interest Income (GAAP) | 32,359 | 30,138 | 28,092 | 62,497 | 56,511 | |||||||||||||||
Tax Equivalent Adjustment3 | 171 | 178 | 197 | 349 | 403 | |||||||||||||||
Net Interest Income (FTE) (Non-GAAP) | $ | 32,530 | $ | 30,316 | $ | 28,289 | $ | 62,846 | $ | 56,914 | ||||||||||
Average Earning Assets | $ | 4,634,635 | $ | 4,554,103 | $ | 4,437,077 | $ | 4,594,591 | $ | 4,433,049 | ||||||||||
Net Interest Margin (GAAP) | 2.80 | % | 2.68 | % | 2.55 | % | 2.74 | % | 2.56 | % | ||||||||||
Net Interest Margin (FTE) (Non-GAAP) | 2.82 | % | 2.70 | % | 2.56 | % | 2.76 | % | 2.58 | % | ||||||||||
CARTER BANKSHARES, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
4 Adjusted Efficiency Ratio (Non-GAAP) | Quarter-to-Date | Year-to-Date | ||||||||||||||||||
(Dollars in Thousands) | June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
Noninterest Expense | $ | 29,304 | $ | 28,042 | $ | 27,446 | $ | 57,346 | $ | 53,703 | ||||||||||
Less:(Losses) Gains on sales and write-downs of Branch Premises, net | (60 | ) | 3 | (44 | ) | (57 | ) | (45 | ) | |||||||||||
Less: (Losses) Gains on Sales and write-downs of OREO, net | (262 | ) | (81 | ) | 8 | (343 | ) | 350 | ||||||||||||
1035 Exchange fee on BOLI | (252 | ) | (275 | ) | - | (527 | ) | - | ||||||||||||
Less: Acquisition Costs | (386 | ) | - | - | (386 | ) | - | |||||||||||||
Less: Severance Pay | (40 | ) | - | - | (40 | ) | - | |||||||||||||
Less: Contingent Liability | (38 | ) | - | - | (38 | ) | - | |||||||||||||
Adjusted Noninterest Expense (Non-GAAP) | $ | 28,266 | $ | 27,689 | $ | 27,410 | $ | 55,955 | $ | 54,008 | ||||||||||
Net Interest Income | $ | 32,359 | $ | 30,138 | $ | 28,092 | $ | 62,497 | $ | 56,511 | ||||||||||
Plus: Taxable Equivalent Adjustment3 | 171 | 178 | 197 | 349 | 403 | |||||||||||||||
Net Interest Income (FTE) (Non-GAAP) | $ | 32,530 | $ | 30,316 | $ | 28,289 | $ | 62,846 | $ | 56,914 | ||||||||||
Less: Gains on Sales of Securities, net | - | - | (36 | ) | - | (36 | ) | |||||||||||||
Less: Equity Security Unrealized Fair Value Gain | (22 | ) | (137 | ) | (63 | ) | (159 | ) | (63 | ) | ||||||||||
Gain on BOLI death benefit5 | - | (1,882 | ) | - | (1,882 | ) | - | |||||||||||||
Less: OREO Income | - | - | (20 | ) | - | (28 | ) | |||||||||||||
Noninterest Income | 4,908 | 6,901 | 5,533 | 11,809 | 10,578 | |||||||||||||||
Net Interest Income (FTE) (Non-GAAP) plus Adjusted Noninterest Income | $ | 37,416 | $ | 35,198 | $ | 33,703 | $ | 72,614 | $ | 67,365 | ||||||||||
Efficiency Ratio (GAAP) | 78.63 | % | 75.71 | % | 81.62 | % | 77.18 | % | 80.05 | % | ||||||||||
Adjusted Efficiency Ratio (Non-GAAP) | 75.55 | % | 78.67 | % | 81.33 | % | 77.06 | % | 80.17 | % | ||||||||||
5The Gain on BOLI death benefit is tax-exempt.
SOURCE: Carter Bankshares, Inc.
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