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Carter Bankshares, Inc. Announces Second Quarter 2025 Financial Results

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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" ]

Carter Bankshares (NASDAQ:CARE) ha riportato un utile netto di 8,5 milioni di dollari nel secondo trimestre del 2025 (utile per azione di 0,37 dollari), rispetto a 9,0 milioni di dollari (0,39 dollari per azione) nel primo trimestre del 2025 e 4,8 milioni di dollari (0,21 dollari per azione) nel secondo trimestre del 2024. Il reddito netto da interessi 猫 salito a 32,4 milioni di dollari, con un aumento del 7,4% rispetto al primo trimestre del 2025.

Tra gli sviluppi chiave, si segnala il completamento di un acquisto di filiali da First Reliance Bank, con l鈥檃cquisizione di 55,9 milioni di dollari in depositi e due filiali in North Carolina. L鈥檃zienda ha inoltre avviato un programma di riacquisto azionario da 20 milioni di dollari, di cui 9,1 milioni gi脿 utilizzati.

I prestiti in portafoglio sono cresciuti del 6,5% su base annualizzata, raggiungendo 3,7 miliardi di dollari, mentre i depositi sono aumentati del 2,0% su base annualizzata. La societ脿 continua a gestire la sua pi霉 grande esposizione creditizia non performante con le Justice Entities, che 猫 diminuita a 235,5 milioni di dollari dai 301,9 milioni di giugno 2023 grazie a pagamenti di riduzione del debito.

  • Il reddito netto da interessi 猫 aumentato del 15,2% su base annua, raggiungendo 32,4 milioni di dollari
  • I prestiti in portafoglio sono cresciuti del 6,5% su base annualizzata, arrivando a 3,7 miliardi di dollari
  • I depositi totali sono aumentati dell鈥�8,8% su base annua
  • Il margine di interesse netto 猫 migliorato di 26 punti base su base annua, arrivando al 2,82%
  • Acquisite con successo due filiali con 55,9 milioni di dollari in depositi
  • Le esposizioni creditizie non performanti sono diminuite di 10,9 milioni di dollari nel secondo trimestre del 2025

Carter Bankshares (NASDAQ:CARE) inform贸 un ingreso neto de 8.5 millones de d贸lares en el segundo trimestre de 2025 (beneficio por acci贸n de 0,37 d贸lares), en comparaci贸n con 9,0 millones de d贸lares (0,39 d贸lares por acci贸n) en el primer trimestre de 2025 y 4,8 millones de d贸lares (0,21 d贸lares por acci贸n) en el segundo trimestre de 2024. Los ingresos netos por intereses aumentaron a 32,4 millones de d贸lares, un 7,4% m谩s que en el primer trimestre de 2025.

Entre los desarrollos clave se incluye la finalizaci贸n de una compra de sucursales a First Reliance Bank, adquiriendo 55,9 millones de d贸lares en dep贸sitos y dos sucursales en Carolina del Norte. La compa帽铆a tambi茅n inici贸 un programa de recompra de acciones de 20 millones de d贸lares, con 9,1 millones ya utilizados.

Los pr茅stamos en cartera aumentaron un 6,5% anualizado hasta 3,7 mil millones de d贸lares, mientras que los dep贸sitos crecieron un 2,0% anualizado. La empresa contin煤a gestionando su mayor relaci贸n crediticia no productiva con las Justice Entities, que disminuy贸 a 235,5 millones de d贸lares desde 301,9 millones en junio de 2023 mediante pagos de reducci贸n.

  • Los ingresos netos por intereses aumentaron un 15,2% interanual hasta 32,4 millones de d贸lares
  • Los pr茅stamos en cartera crecieron un 6,5% anualizado hasta 3,7 mil millones de d贸lares
  • Los dep贸sitos totales aumentaron un 8,8% interanual
  • El margen neto de inter茅s mejor贸 26 puntos b谩sicos interanuales hasta el 2,82%
  • Se adquirieron con 茅xito dos sucursales con 55,9 millones de d贸lares en dep贸sitos
  • Los pr茅stamos incobrables disminuyeron en 10,9 millones de d贸lares durante el segundo trimestre de 2025

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欤检殧 氚滌爠 靷暛鞙茧電� First Reliance Bank搿滊秬韯� 歆鞝� 鞚胳垬毳� 鞕勲頃橃棳 5590毵� 雼煬鞚� 鞓堦笀瓿� 雲胳姢旌愲·霛检澊雮� 雮� 霊� 臧� 歆鞝愳潉 旆摑頃� 鞝愳澊 鞛堨姷雼堧嫟. 霕愴暅 須岇偓電� 2000毵� 雼煬 攴滊鞚� 鞛愳偓欤� 毵れ瀰 頂勲攴鸽灗鞚� 鞁滌瀾頄堨溂氅�, 攴胳 910毵� 雼煬臧 鞚措 靷毄霅橃棃鞀惦媹雼�.

雽於� 韽姼韽措Μ鞓る姅 鞐绊櫂靷� 旮办 6.5% 歃濌皜頃橃棳 37鞏� 雼煬鞐� 雼枅鞙茧┌, 鞓堦笀鞚 鞐绊櫂靷� 旮办 2.0% 歃濌皜頄堨姷雼堧嫟. 須岇偓電� Justice Entities鞕鞚� 斓滊寑 攵鞁れ眲甓� 甏瓿勲ゼ 瓿勳啀 甏毽晿瓿� 鞛堨溂氅�, 鞚措姅 2023雲� 6鞗� 3鞏�190毵� 雼煬鞐愳劀 靸來櫂旮堨溂搿� 鞚疙暣 2鞏�3550毵� 雼煬搿� 臧愳唽頄堨姷雼堧嫟.

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Carter Bankshares (NASDAQ:CARE) a annonc茅 un b茅n茅fice net de 8,5 millions de dollars au deuxi猫me trimestre 2025 (b茅n茅fice par action de 0,37 $), contre 9,0 millions de dollars (0,39 $ par action) au premier trimestre 2025 et 4,8 millions de dollars (0,21 $ par action) au deuxi猫me trimestre 2024. Le revenu net d鈥檌nt茅r锚ts a augment茅 pour atteindre 32,4 millions de dollars, soit une hausse de 7,4 % par rapport au premier trimestre 2025.

Parmi les d茅veloppements cl茅s figure l鈥檃ch猫vement d鈥檜n rachat d鈥檃gences aupr猫s de First Reliance Bank, acqu茅rant 55,9 millions de dollars de d茅p么ts et deux agences en Caroline du Nord. La soci茅t茅 a 茅galement lanc茅 un programme de rachat d鈥檃ctions de 20 millions de dollars, dont 9,1 millions ont d茅j脿 茅t茅 utilis茅s.

Les pr锚ts du portefeuille ont augment茅 de 6,5 % annualis茅s pour atteindre 3,7 milliards de dollars, tandis que les d茅p么ts ont cr没 de 2,0 % annualis茅s. La soci茅t茅 continue de g茅rer sa plus grande relation de cr茅dit non performante avec les Justice Entities, qui a diminu茅 脿 235,5 millions de dollars contre 301,9 millions en juin 2023 gr芒ce 脿 des paiements de r茅duction.

  • Le revenu net d鈥檌nt茅r锚ts a augment茅 de 15,2 % en glissement annuel pour atteindre 32,4 millions de dollars
  • Les pr锚ts du portefeuille ont cr没 de 6,5 % annualis茅s pour atteindre 3,7 milliards de dollars
  • Les d茅p么ts totaux ont augment茅 de 8,8 % en glissement annuel
  • La marge nette d鈥檌nt茅r锚t s鈥檈st am茅lior茅e de 26 points de base en glissement annuel pour atteindre 2,82 %
  • Acquisition r茅ussie de deux agences avec 55,9 millions de dollars de d茅p么ts
  • Les pr锚ts non performants ont diminu茅 de 10,9 millions de dollars au cours du deuxi猫me trimestre 2025

Carter Bankshares (NASDAQ:CARE) meldete f眉r das zweite Quartal 2025 einen Nettogewinn von 8,5 Millionen US-Dollar (Gewinn pro Aktie 0,37 US-Dollar), im Vergleich zu 9,0 Millionen US-Dollar (0,39 US-Dollar pro Aktie) im ersten Quartal 2025 und 4,8 Millionen US-Dollar (0,21 US-Dollar pro Aktie) im zweiten Quartal 2024. Die Nettozinsertr盲ge stiegen auf 32,4 Millionen US-Dollar, ein Anstieg von 7,4 % gegen眉ber dem ersten Quartal 2025.

Zu den wichtigsten Entwicklungen geh枚rt der Abschluss eines Filialankaufs von der First Reliance Bank, bei dem Einlagen in H枚he von 55,9 Millionen US-Dollar und zwei Filialen in North Carolina erworben wurden. Das Unternehmen hat au脽erdem ein Aktienr眉ckkaufprogramm in H枚he von 20 Millionen US-Dollar gestartet, von dem bereits 9,1 Millionen US-Dollar genutzt wurden.

Die Darlehensportfolios stiegen annualisiert um 6,5 % auf 3,7 Milliarden US-Dollar, w盲hrend die Einlagen annualisiert um 2,0 % wuchsen. Das Unternehmen verwaltet weiterhin seine gr枚脽te notleidende Kreditbeziehung mit den Justice Entities, die sich durch Tilgungszahlungen von 301,9 Millionen US-Dollar im Juni 2023 auf 235,5 Millionen US-Dollar reduziert hat.

  • Die Nettozinsertr盲ge stiegen im Jahresvergleich um 15,2 % auf 32,4 Millionen US-Dollar
  • Die Darlehensportfolios wuchsen annualisiert um 6,5 % auf 3,7 Milliarden US-Dollar
  • Die Gesamteinlagen stiegen im Jahresvergleich um 8,8 %
  • Die Nettozinsmarge verbesserte sich im Jahresvergleich um 26 Basispunkte auf 2,82 %
  • Erfolgreiche 脺bernahme von zwei Filialen mit 55,9 Millionen US-Dollar an Einlagen
  • Die notleidenden Kredite gingen im zweiten Quartal 2025 um 10,9 Millionen US-Dollar zur眉ck
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

Insights

Carter Bankshares shows modest growth and improving metrics despite ongoing challenges with a large nonperforming loan relationship.

Carter Bankshares reported Q2 2025 net income of $8.5 million ($0.37 EPS), slightly down from $9.0 million in Q1 2025 but significantly improved from $4.8 million in Q2 2024. This represents a 77% year-over-year increase in quarterly earnings despite continued headwinds from a major nonperforming loan.

The bank's net interest income increased to $32.4 million, up 7.4% quarter-over-quarter and 15.2% year-over-year. Net interest margin improved 12 basis points sequentially to 2.82%, reflecting better funding costs as deposit pricing pressure eases. These improving margins signal the bank is navigating the current rate environment effectively.

Loan growth was solid at 6.5% annualized during Q2, primarily driven by commercial real estate loans which increased by $84.9 million. Total portfolio loans reached $3.7 billion, up $197.6 million or 5.6% year-over-year, demonstrating consistent organic growth.

The bank's credit quality metrics show a complex picture. Nonperforming loans decreased by $10.9 million to $250.6 million, with NPLs to total portfolio loans improving to 6.69% from 7.09% in Q1. However, this ratio remains elevated primarily due to the bank's largest lending relationship with the Justice Entities, which comprises 94% of total NPLs. The bank received $9.5 million in curtailment payments from this relationship during Q2, reducing the total outstanding balance to $235.5 million.

The allowance for credit losses to total portfolio loans decreased to 1.90% from 1.99% in Q1 and 2.72% a year ago. The bank recorded a $2.3 million recovery for credit losses this quarter, indicating improved loss expectations.

Carter completed two strategic initiatives: acquiring two branch locations in North Carolina with $55.9 million in deposits, and implementing a stock repurchase program. As of quarter-end, the bank had repurchased 547,332 shares at a total cost of $9.1 million, utilizing 46% of the authorized $20 million program.

The efficiency ratio was 78.63%, showing a slight deterioration from 75.71% in Q1 but improved from 81.62% a year ago. This metric continues to be negatively impacted by the large nonperforming loan relationship, which reduced interest income by $6.7 million during Q2 alone.

MARTINSVILLE, VA / / July 24, 2025 / Carter Bankshares, Inc. (the "Company") (NASDAQ:CARE), the holding company of Carter Bank (the "Bank") today announced quarterly net income of $8.5 million, or $0.37 diluted earnings per share ("EPS"), for the second quarter of 2025 compared to net income of $9.0 million, or $0.39 diluted EPS, for the first quarter of 2025 and net income of $4.8 million, or $0.21 diluted EPS, for the second quarter of 2024. Net interest income was $32.4 million for the second quarter of 2025, $30.1 million for the first quarter of 2025, and $28.1 million for the second quarter of 2024. Pre-tax pre-provision income1 was $8.0 million for the second quarter of 2025, $9.0 million for the first quarter of 2025 and $6.2 million for the second quarter of 2024.

For the six months ended June 30, 2025, net income was $17.5 million, or $0.76 diluted EPS, compared to net income of $10.6 million, or $0.46 diluted EPS for the same period in 2024. Net interest income was $62.5 million for the six months ended June 30, 2025, and $56.5 million for the six months ended June 30, 2024. Pre-tax pre-provision income1 was $17.0 million and $13.4 million for the six months ended June 30, 2025 and 2024, respectively.

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 $55.9 million of deposits, as well as cash, personal property and other fixed assets related to the branch locations purchased, and welcomed 10 new associates to its team. The Branch Purchase did not include any loans.

On May 20, 2025, the Company announced a stock repurchase program to purchase up to $20.0 million of the Company's common stock through May 14, 2026. The repurchase program does not obligate the Company to purchase any particular number of shares and may be modified or terminated by the Company's Board of Directors at any time. As of June 30, 2025, under the repurchase program we have repurchased 547,332 shares of the Company's common stock at a total cost of $9.1 million and a weighted average cost per share of $16.70.

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 $235.5 million as of June 30, 2025. Interest income was negatively impacted by $6.7 million during the second quarter of 2025, $6.8 million during the first quarter of 2025, and $9.1 million during the second quarter of 2024, due to these credits being on nonaccrual status. Interest income has been negatively impacted by $78.6 million in the aggregate since placement of these credits on nonaccrual status during the second quarter of 2023.

During the second quarter of 2025, the Company received $9.5 million of curtailment payments. As of June 30, 2025, $66.4 million of aggregate curtailment payments made by the Justice Entities to the Bank have decreased the aggregate nonperforming loan ("NPL") balance from $301.9 million as of June 30, 2023 to $235.5 million as of June 30, 2025. For additional information regarding the Bank's credit relationship with the Justice Entities, see "Credit Quality."

Financial Highlights for the Three and Six Months Ended June 30, 2025

  • Total portfolio loans increased $59.6 million, or 6.5%, on an annualized basis, to $3.7 billion at June 30, 2025 from March 31, 2025 and increased $197.6 million, or 5.6% from June 30, 2024;

  • The allowance for credit losses to total portfolio loans was 1.90%, 1.99% and 2.72% at June 30, 2025, March 31, 2025 and June 30, 2024, respectively;

  • Total deposits increased $21.3 million, or 2.0% on an annualized basis, compared to March 31, 2025 and increased $340.9 million, or 8.8%, compared to June 30, 2024;

  • Net interest income totaled $32.4 million, an increase of $2.2 million, or 7.4% compared to the prior quarter, and an increase of $4.3 million, or 15.2% compared to the year ago quarter. Net interest margin, on a fully taxable equivalent ("FTE") basis3, increased 12 basis points to 2.82% for the second quarter of 2025, compared to 2.70% 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 were 6.69% at June 30, 2025, 7.09% at March 31, 2025 and 8.46% at June 30, 2024; and

  • The efficiency ratio was 78.63%, 75.71% and 81.62%, and the adjusted efficiency ratio (non-GAAP)4 was 75.55%, 78.67%, and 81.33% 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 6.5% reflects good momentum in our commercial lending platform. Our loan pipeline remains healthy and we continue to expect a tailwind from prior construction lending that will come online over the coming 12 to 18 months as projects progress. The Bank continues to add seasoned commercial lenders in key strategic growth markets. On the deposit side, balances are showing modest growth and cost of deposits continues to decline, albeit at a slower pace. If the Federal Reserve reduces short-term interest rates in the near term, we are well positioned to benefit given the short-term nature of our certificates of deposit ("CD") portfolio," stated Litz H. Van Dyke, Chief Executive Officer.

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 $55.9 million of deposits at the two branch locations. We are thrilled to welcome First Reliance's associates and customers to the Carter family."

Van Dyke continued, "On May 20, 2025, we announced a stock repurchase program to purchase up to $20.0 million of the Company's common stock through May 14, 2026. Given our strong capital position, we believe that this program currently is the most prudent way to deliver shareholder value. As of June 30, 2025, we have utilized approximately 46% of the stock repurchase program."

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 6.69%, 7.09% and 8.46% at June 30, 2025, March 31, 2025 and June 30, 2024, respectively. At June 30, 2025, NPLs decreased $10.9 million to $250.6 million compared to March 31, 2025. The decrease during the quarter was primarily due to $9.5 million of curtailment payments made by the Bank's largest NPL credit relationship, as well as a decline of $1.2 million in nonaccrual residential mortgages.

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 $301.9 million at June 30, 2023 to $235.5 million at June 30, 2025. This NPL relationship represents 94.0% of total NPLs and 6.3% of total portfolio loans at June 30, 2025. The Company continues to believe it is well secured based on the net carrying value of the credit relationship and is appropriately reserved for potential credit losses with respect to all such loans based on information currently available. However, the Company cannot give any assurance as to the timing or amount of future payments or collections on such loans or that the Company will ultimately collect all amounts contractually due under the terms of such loans.

The specific reserves with respect to the Bank's largest NPL credit relationship were $24.0 million at June 30, 2025 compared to $27.1 million at March 31, 2025. The decline during the second quarter of 2025 was driven by the aforementioned curtailment payments and updated analysis of the credit relationship. The Company uses the discounted cash flow model with updated assumptions and inputs regarding the credit relationship, legal risk and related risks. The updated analysis and the impact on the specific reserves significantly contributed to the $(2.3) million (recovery) for credit losses during the second quarter of 2025 as compared to the prior quarter.

During the second quarter of 2025, the (recovery) provision for credit losses was a recovery of $(2.3) million compared to a recovery of $(2.0) million during the first quarter of 2025 and a provision for credit losses of $491 thousand during the second quarter of 2024. The change compared to the first quarter of 2025 was primarily driven by a decline in the Other segment reserve rate from 11.05% to 10.18%, higher curtailment payments in the second quarter of 2025 compared to the first quarter of 2025, partially offset by loan growth in the second quarter of 2025.

During the second quarter of 2025, the recovery for unfunded commitments was a recovery of $(335) thousand compared to a recovery of $(114) thousand in the first quarter of 2025 and a recovery of $(236) thousand in the second quarter of 2024. The increased recovery during the second quarter of 2025 compared to both the first quarter of 2025 and the second quarter of 2024 was due to decreased unfunded commitments in construction loans.

Net Interest Income

Net interest income for the second quarter of 2025 increased $2.2 million, or 7.4%, to $32.4 million compared to the first quarter of 2025 and increased $4.3 million, or 15.2% compared to the second quarter of 2024. The increase in net interest income for the second quarter of 2025 was primarily due to 14 basis point and 30 basis point declines in funding costs and one basis point and four basis point increases in the yield on average interest-earning assets compared to the first quarter of 2025 and the second quarter of 2024, respectively. Net interest margin, on a FTE basis3, increased 12 basis points to 2.82% compared to the first quarter of 2025, and increased 26 basis points compared to the second quarter of 2024. The increases during the second quarter of 2025 were driven by lower funding costs and higher yields on interest-earning assets.

Total interest-bearing deposit costs decreased 16 basis points to 2.70% compared to 2.86% in the first quarter of 2025, while the balance of average interest-bearing deposits increased $31.8 million compared to the first quarter of 2025 primarily due to the Branch Purchase. The lower interest-bearing funding costs were positively impacted by the Federal Reserve's cut of short-term interest rates by 100 basis points beginning from September 2024 to December 2024. Total average borrowings increased $39.2 million to $119.5 million compared to the first quarter of 2025 primarily due to additional Federal Home Loan Bank ("FHLB") borrowings to fund loan growth.

Noninterest Income

Noninterest Income was $4.9 million for the second quarter of 2025 a decrease of $2.0 million, or 28.9%, compared to the first quarter of 2025 and a decrease of $0.6 million, or 11.3%, compared to the second quarter of 2024. The primary driver for the decrease compared to the previous quarter was the $1.9 million gain on a BOLI death benefit recorded in other noninterest income in the first quarter of 2025. The most significant decreases compared to the year ago quarter were $0.3 million in other noninterest income and $0.2 million in insurance commissions due to lower activity in the second quarter of 2025.

Noninterest Expense

Noninterest expense was $29.3 million for the second quarter of 2025 an increase of $1.3 million, or 4.5% compared to the first quarter of 2025 and an increase of $1.9 million compared to the second quarter of 2024. The primary drivers compared to the first quarter of 2025 were increases in other noninterest expenses, professional and legal fees, and salaries and employee benefits. Other noninterest expenses increased due to a $0.3 million 1035 exchange fee as a direct result of the early surrender of one of the Company's BOLI policies recorded in the second quarter of 2025. Professional and legal fees increased $0.4 million due to costs expensed in the second quarter of 2025. Salaries and employee benefits increased $0.4 million primarily due to higher medical expenses and one extra day in the second quarter of 2025, as well as ten full-time associates retained from the Branch Purchase.

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 $0.4 million primarily due to additional software and maintenance expenses and higher depreciation expense as a result of the Branch Purchase.

Financial Condition

Total assets increased $83.8 million, to $4.8 billion at June 30, 2025 compared to March 31, 2025. Cash and due from banks increased $10.9 million to $99.9 million at June 30, 2025 compared to $89.0 million at March 31, 2025. The available-for-sale securities portfolio increased $9.8 million compared to March 31, 2025 and is currently 15.8% of total assets at June 30, 2025 compared to 15.9% of total assets at March 31, 2025. The increase is due to new security purchases, partially offset by normal paydowns and maturities.

Total portfolio loans increased $59.6 million, or 6.5%, on an annualized basis, to $3.7 billion at June 30, 2025 compared to March 31, 2025. The increase in portfolio loans compared to March 31, 2025 related to growth of $84.9 million in commercial real estate loans ("CRE") and an increase of $12.9 million in residential mortgages, partially offset by the following decreases: $15.7 million in construction, $12.1 million in commercial and industrial ("C&I"), $9.5 million in other and $0.8 million in other consumer.

Total deposits increased $21.3 million to $4.2 billion at June 30, 2025 compared to March 31, 2025. Total deposits included $55.9 million related to the Branch Purchase completed during the second quarter of 2025; however, excluding these assumed deposits, total deposits decreased $34.6 million compared to March 31, 2025 primarily due to a few large commercial depositors repositioning funds for working capital needs during the second quarter.

FHLB borrowings increased $58.5 million to $113.5 million at June 30, 2025 compared to March 31, 2025 due to additional FHLB borrowings to fund loan growth.

At June 30, 2025 and March 31, 2025, approximately 81.5% of our total deposits of $4.2 billion were insured under standard Federal Deposit Insurance Corporation ("FDIC") insurance coverage limits, and approximately 18.5% of our total deposits were uninsured deposits over the standard FDIC insurance coverage limit, respectively.

Capitalization and Liquidity

The Company remained well capitalized at June 30, 2025. The Company's Tier 1 Capital ratio was 10.87% at June 30, 2025 as compared to 11.01% at March 31, 2025. The Company's leverage ratio was 9.46% at June 30, 2025 as compared to 9.67% at March 31, 2025. The Company's Total Risk-Based Capital ratio was 12.12% at June 30, 2025 as compared to 12.27% at March 31, 2025.

At June 30, 2025, funding sources accessible to the Company include borrowing availability at the FHLB, equal to 25.0% of the Company's assets or approximately $1.2 billion, subject to the amount of eligible collateral pledged, of which the Company is eligible to borrow up to an additional $732.0 million. The Company has unsecured facilities with three other correspondent financial institutions totaling $30.0 million, a fully secured facility with one other correspondent financial institution totaling $45.0 million, and access to the institutional CD market. The Company did not have outstanding borrowings on these federal funds lines as of June 30, 2025. In addition to the above funding resources, the Company also has $438.8 million unpledged available-for-sale investment securities, at fair value, as an additional source of liquidity.

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 $4.8 billion in assets and 64 branches in Virginia and North Carolina. For more information or to open an account visit .

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.
[email protected]

CARTER BANKSHARES, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
BALANCE SHEETS

June 30,
2025

March 31,
2025

June 30,
2024

(Dollars in Thousands, except per share data)

(unaudited)

(unaudited)

(unaudited)

ASSETS
Cash and Due From Banks, including Interest-Bearing Deposits of $51,890 at June 30, 2025, $46,490 at March 31, 2025 and $21,364 at June 30, 2024

$

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 AG真人官方 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 $1.00 Per Share, Authorized 100,000,000 Shares;
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,
2025

March 31,
2025

June 30,
2024

June 30,
2025

June 30,
2024

(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,
2025

March 31,
2025

June 30,
2024

Commercial
Commercial AG真人官方 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,
2025

March 31,
2025

June 30,
2024

Nonaccrual Loans
Commercial AG真人官方 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 AG真人官方 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 AG真人官方 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,
2025

March 31,
2025

June 30,
2024

June 30,
2025

June 30,
2024

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 AG真人官方 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 AG真人官方 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,
2025

March 31,
2025

June 30,
2024

June 30,
2025

June 30,
2024

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,
2025

March 31,
2025

June 30,
2024

June 30,
2025

June 30,
2024

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 21% federal income tax rate for the 2025 and 2024 periods.

Net Interest Income (FTE) (Non-GAAP)

Quarter-to-Date

Year-to-Date

(Dollars in Thousands)

June 30,
2025

March 31,
2025

June 30,
2024

June 30,
2025

June 30,
2024

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,
2025

March 31,
2025

June 30,
2024

June 30,
2025

June 30,
2024

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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FAQ

What were Carter Bankshares (CARE) Q2 2025 earnings?

Carter Bankshares reported net income of $8.5 million ($0.37 per diluted share) for Q2 2025, compared to $9.0 million in Q1 2025 and $4.8 million in Q2 2024.

How much did Carter Bankshares (CARE) acquire in deposits from First Reliance Bank?

Carter Bankshares acquired $55.9 million in deposits through the purchase of two branch facilities in Mooresville and Winston-Salem, North Carolina from First Reliance Bank.

What is the status of Carter Bankshares' Justice Entities loan relationship?

The Justice Entities loans total $235.5 million as of June 30, 2025, down from $301.9 million in June 2023. The relationship remains on nonaccrual status and represents 94% of total nonperforming loans.

How much has Carter Bankshares (CARE) spent on its stock repurchase program?

As of June 30, 2025, Carter Bankshares has repurchased 547,332 shares at a total cost of $9.1 million (average cost $16.70 per share) out of the $20 million authorized program.

What is Carter Bankshares' (CARE) current loan portfolio size and growth rate?

Carter Bankshares' total portfolio loans reached $3.7 billion, growing at an annualized rate of 6.5% in Q2 2025 compared to Q1 2025.
Carter Bankshares Inc

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Banks - Regional
National Commercial Banks
United States
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