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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20429
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 25, 2024
CARTER BANKSHARES, INC.
(Exact name of registrant as specified in its charter)
Virginia001-3973185-3365661
(State or other jurisdiction
of incorporation)
(Commission
file number)
(IRS Employer
Identification No.)
1300 Kings Mountain Road, Martinsville, Virginia 24112
(Address of Principal Executive Offices) (Zip Code)
(276) 656-1776
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b))
 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which
registered
Common Stock, $1.00 par valueCARENASDAQ Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 



ITEM 2.02.    RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On July 25, 2024, Carter Bankshares, Inc. announced by press release its financial results for the three and six months ended June 30, 2024. A copy of the press release is attached hereto as Exhibit 99.1. The information contained in this Report on Form 8-K is furnished pursuant to Item 2.02 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Exchange Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
ITEM 9.01.    FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
Exhibit No.
Exhibit 99.1    Press Release announcing Second Quarter 2024 Financial Results.
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 quotes 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 assumption 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 loan and securities portfolios;
inflation, market and monetary fluctuations;
changes in trade, monetary and fiscal policies and laws of the U.S. government, including policies of the Federal Reserve, FDIC and Treasury Department;
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 commercial real estate, and the potential impacts of changes in market conditions on the value of real estate collateral;
increased delinquency and foreclosure rates on commercial real estate 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 military conflicts (such as the war between Israel and Hamas and the ongoing war between Russia and Ukraine) or public health events (such as the COVID-19 pandemic), and of any governmental and
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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, including the outcome of lawsuits     related to the large NPL relationship;
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 recent 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, continuing 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 employees;
expansions or consolidations in the Company’s branch network, including that the anticipated benefits of 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 SEC including in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. 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 prepared. 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.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 CARTER BANKSHARES, INC.
 (Registrant)
Date: July 25, 2024
By:/s/ Wendy S. Bell
Name:Wendy S. Bell
Title:Chief Financial Officer


Exhibit 99.1
FOR IMMEDIATE RELEASE – July 25, 2024
Carter Bankshares, Inc. Announces Second Quarter 2024 Financial Results
Martinsville, VA, July 25, 2024 – Carter Bankshares, Inc. (the “Company”) (NASDAQ:CARE), the holding company of Carter Bank & Trust (the “Bank”) today announced quarterly net income of $4.8 million, or $0.21 diluted earnings per share (“EPS”), for the second quarter of 2024 compared to net income of $5.8 million, or $0.25 diluted EPS, in the first quarter of 2024 and net income of $5.7 million, or $0.24 diluted EPS, for the second quarter of 2023. The pre-tax pre-provision income1 was $6.2 million for the second quarter of 2024, $7.2 million for the first quarter of 2024 and $6.2 million for the second quarter of 2023.
For the six months ended June 30, 2024, net income was $10.6 million, or $0.46 diluted EPS, compared to net income of $21.6 million, or $0.91 diluted EPS for the same period in 2023. Pre-tax pre-provision income1 was $13.4 million and $28.1 million for the six months ended June 30, 2024 and 2023, respectively.
During the second quarter of 2024 the federal court lawsuit filed against the Company and the Bank by West Virginia Governor James C. Justice II, his wife Cathy L. Justice, his son James C. Justice, III, and related entities that he and/or they own (collectively, the “Justice Entities”) was dismissed with prejudice. In connection with the dismissal of this litigation, the Justice Entities have agreed upon a pathway of curtailment and payoff of the outstanding loans with the Bank. The Justice Entities have already started that process of curtailment, and the aggregate nonperforming loan balance associated with the Justice Entities has been reduced from $301.9 million as of March 31, 2024 to $294.1 million as of June 30, 2024.
The Company’s financial results continue to be significantly impacted by placing loans contained in the Bank's Other segment on nonaccrual status during the second quarter of 2023. The Bank’s Other segment, represents the Bank’s loans to the Justice Entities, which remains the Bank's largest lending relationship. As a result, interest income was negatively impacted by $9.1 million and $11.3 million during the second quarter of 2024 and 2023, respectively. Interest income has been negatively impacted by $48.4 million in the aggregate since placement of these loans on nonaccrual status during the second quarter of 2023.
Financial Highlights for the Three and Six Months Ended June 30, 2024
At June 30, 2024, nonperforming loans declined by $7.1 million to $300.2 million when compared to March 31, 2024. Nonperforming loans to total portfolio loans were 8.46%, 8.76% and 9.33% for the quarters ended June 30, 2024, March 31, 2024 and June 30, 2023, respectively. The decline in nonperforming loans during the second quarter of 2024 is primarily due to $7.8 million of curtailment payments made by the Bank’s largest nonperforming lending relationship;
The allowance for credit losses to total portfolio loans were 2.72%, 2.75% and 2.83% at June 30, 2024, March 31, 2024 and June 30, 2023, respectively. The decrease is primarily related to $1.4 million of other segment specific reserves released in connection with the aforementioned $7.8 million of curtailment payments;
Total portfolio loans increased $40.5 million, or 4.6% on an annualized basis, to $3.5 billion at June 30, 2024 compared to March 31, 2024 and increased $219.1 million, or 6.6%, compared to June 30, 2023;
Total deposits increased $50.8 million, or 5.3% on an annualized basis, compared to March 31, 2024 and increased $301.2 million, or 8.4%, compared to June 30, 2023;
Net interest income decreased $0.3 million, or 1.2%, to $28.1 million compared to the first quarter of 2024 and increased $1.4 million, or 5.2% compared to the second quarter of 2023. For the six months ended



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June 30, 2024 net interest income decreased $11.0 million, or 16.3% compared to the same period in 2023 primarily driven by the aforementioned NPL relationship, which negatively impacted interest income by $18.4 million for the six months ended June 30, 2024 as compared to $11.3 million for the same period in 2023. Funding costs increased 127 basis points, offset by an increase of 36 basis points on the yield on earning assets for the six months ended June 30, 2024 compared to the same period in 2023;
Net interest margin, on a fully taxable equivalent basis3 (“FTE”), decreased four basis points to 2.56% compared to the first quarter of 2024 and increased two basis points compared to the second quarter of 2023. For the six months ended June 30, 2024 net interest margin, on a FTE basis, decreased 67 basis points to 2.58% compared to the same period in 2023. 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;
The efficiency ratio was 81.62%, 78.46% and 80.46% for the quarters ended June 30, 2024, March 31, 2024 and June 30, 2023, respectively. The efficiency ratio was impacted primarily by the Bank’s largest lending relationship that was placed in nonaccrual status during the second quarter of 2023.
“As previously noted, the lawsuit filed by West Virginia Governor James Justice and related entities was dismissed with prejudice during the second quarter of 2024, and the Justice Entities have begun curtailing their debt owed to the Bank. This was a favorable outcome for our Company and we remain committed to resolving this lending relationship in a manner that best protects the Company, the Bank and shareholders, stated Litz H. Van Dyke, Chief Executive Officer.”
Van Dyke continued, “Obviously, the large nonperforming lending relationship continues to have a negative impact on our financial results, but aside from this issue, we believe our financial performance for the second quarter was solid and our asset quality remains strong across all credit metrics. We continue to feel positive about the fundamentals of the Company and the structure of our balance sheet. Capital and liquidity levels continue to be strong. Loan production was modest in the second quarter, largely due to more construction lending that we expect to fund gradually over time. Our loan production pipeline also remains solid, however, we are still expecting moderate loan growth this year. We believe our bond portfolio is well positioned to outperform many of our peers in what appears to be a protracted period of higher interest rates. Modest deposit growth is occurring in most categories. While there continues to be pressure on the cost of funds, rates have been leveling off. However, the current rate environment will continue to affect our margin in the coming quarters. We expect that our net interest margin will return to a more normalized level once the large nonperforming lending relationship is fully resolved. Additionally, if the Fed begins to cut short-term interest rates, we believe our balance sheet is positioned so that it will positively impact our margins.”
Operating Highlights
Credit Quality
Nonperforming loans as a percentage of total portfolio loans were 8.46%, 8.76% and 9.33% as of June 30, 2024, March 31, 2024 and June 30, 2023, respectively. At June 30, 2024, nonperforming loans decreased $7.1 million to $300.2 million since March 31, 2024. The decrease was primarily due to $7.8 million of curtailment payments made by the Bank’s largest nonperforming lending relationship.
During the second quarter of 2023, the Company placed commercial loans in the other segment of the Company’s loan portfolio relating to the Bank’s largest lending relationship with a current aggregate principal amount of $294.1 million on nonaccrual status due to loan maturities and failure to pay in full. This nonperforming relationship represents 98.0% of total nonperforming loans and 8.3% of total portfolio loans at June 30, 2024.
In connection with the settlement and the path of curtailment described above, during the second quarter of 2024, $7.8 million of curtailments have decreased the aggregate nonperforming loan balance outstanding to the



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Bank. The Company believes it is well secured based on the net carrying value of the credit relationship and it has appropriately reserved for expected 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 Company has specific reserves of $52.9 million at June 30, 2024 with respect to such loans.
The provision for credit losses increased $0.5 million and $0.4 million in the second quarter of 2024 compared to the first quarter of 2024 and the second quarter of 2023, respectively. The increase in the provision for credit losses as compared to the first quarter of 2024 was primarily driven by loan growth, net charge-offs and a $0.5 million reserve on a new individually evaluated loan in the second quarter of 2024, offset by $1.4 million of other segment reserves released during the second quarter of 2024 related to the aforementioned $7.8 million of curtailment payments.
The (recovery) provision for unfunded commitments in the second quarter of 2024 was a recovery of $235.4 thousand compared to a recovery of $43.3 thousand in the first quarter of 2024 and a provision of $359.8 thousand in the second quarter of 2023. The decline was due to decreased commitments in construction loans during the second quarter of 2024.
Net Interest Income
Net interest income decreased $0.3 million, or 1.2%, to $28.1 million compared to the first quarter of 2024 and increased $1.4 million, or 5.2%, compared to the second quarter of 2023. The net interest margin decreased three basis points to 2.55% compared to the first quarter of 2024, and increased four basis points compared to the second quarter of 2023. Net interest margin, on an FTE basis decreased four basis points to 2.56% compared to the quarter ended March 31, 2024 and increased two basis points compared to the second quarter of 2023. The yield on interest-earning assets increased four basis points compared to the quarter ended March 31, 2024 and increased 84 basis points compared to the quarter ended June 30, 2023.
Interest income increased $0.5 million during the second quarter of 2024 compared to the first quarter of 2024 primarily due to higher interest rate yields on interest-earning assets of four basis points due to new loan growth coming on at higher interest rates. Interest income increased $10.9 million for the six months ended June 30, 2024 compared to the same period in 2023 primarily due to average loan growth of $272.6 million in taxable loans during the second quarter of 2024, offset by the negative impact on interest income of $9.1 million relating to the Bank’s largest nonperforming lending relationship in the second quarter of 2024 compared to a higher negative impact of $11.3 million in the second quarter of 2023.
Interest expense increased $0.9 million, or 3.4%, for the three months ended June 30, 2024 compared to the first quarter of 2024 and increased $9.5 million, or 55.8%, as compared to the second quarter of 2023. Funding costs increased nine basis points compared to the previous quarter and increased 98 basis points compared to the same quarter of 2023. The increase in interest expense is due to customers migrating from lower cost non-maturing deposits to higher interest-bearing demand, money market and certificate of deposit (“CD”) products. During the second quarter of 2024, $286.8 million of CDs matured and repriced from an average rate of 4.32% to an average rate of 4.39%.
Net interest income decreased $11.0 million, or 16.3%, to $56.5 million for the six months ended June 30, 2024 compared to the same period in 2023. The net interest margin decreased 66 basis points to 2.56% for the six months ended June 30, 2024 compared to 3.22% for the same period in 2023. Net interest margin, on an FTE basis3, decreased 67 basis points to 2.58% for the six months ended June 30, 2024 compared to 3.25% for the same period in 2023. The decline in net interest income and net interest margin were significantly driven by the aforementioned large nonperforming lending relationship, which negatively impacted interest income by $18.4 million for the six months ended June 30, 2024 as compared to $11.3 million for the same period in 2023. Funding



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costs increased 127 basis points, partially offset by an increase of 36 basis points on the yield on earning assets for the six months ended June 30, 2024 compared to the same period in 2023. During the six months ended June 30, 2024, $760.6 million of CDs matured and repriced from an average rate of 4.30% to an average rate of 4.41%.
Since the first quarter of 2023, there has been continued pressure on our cost of funds due to the shift from non-maturing deposits to higher yielding certificates of deposits, interest-bearing demand, money markets and higher-cost borrowings driven by the ongoing inversion of the yield curve, which has negatively impacted our net interest margin. During the second quarter of 2024, this trend began to stabilize and we believe it will continue to stabilize in the coming quarters. Our balance sheet is currently exhibiting characteristics of a slightly liability sensitive position due to the short-term nature of our deposit portfolio and Federal Home Loan Bank (“FHLB”) borrowings. Specifically, 91.70% of our CD portfolio and 81.1% of our outstanding FHLB borrowings will mature and reprice over the next twelve months. This strategy gives us flexibility to manage the structure and pricing of our deposit and borrowing portfolios to reduce future funding costs should the Federal Open Market Committee (“FOMC”) begin cutting short-term rates later this year and beyond.
Noninterest Income
For the second quarter of 2024, total noninterest income was $5.5 million, an increase of $0.5 million, or 9.7%, from the first quarter of 2024 and an increase of $0.5 million, or 10.0%, compared to the second quarter of 2023. For the six months ended June 30, 2024, total noninterest income was $10.6 million, an increase of $0.8 million, or 8.3%, from the same period in 2023.
The increase of $0.5 million in noninterest income compared to the first quarter of 2024 primarily related to an increase of $0.3 million in insurance commissions and a $0.3 million increase in other noninterest income, offset by a decrease of $0.2 million in debit card interchange fees. The decline in debit card interchange fees was due to an annual Visa incentive program that occurred during the first quarter of 2024 and increased income by $0.3 million. During the three months ended June 30, 2024, we recognized an unrealized fair value gain of $63.3 thousand on equity securities. This unrealized fair value gain is recorded in Other Income on the Consolidated Statements of Income.
As compared to the second quarter of 2023, the $0.5 million variance in noninterest income was primarily due to an increase of $0.4 million in insurance commissions and $0.1 million increase on service charges, commissions and fees, offset by a decrease of $0.1 million in other noninterest income.
The most significant increase during the six months ended June 30, 2024 was $0.9 million higher insurance commissions. Also impacting the year-to-date increase was $0.1 million higher service charges, commissions and fees, offset by a decrease of $0.1 million in other noninterest income, as well as a decline of $0.1 million in commercial loan swap fee income as activity has declined due to the interest rate environment.
Noninterest Expense
For the second quarter of 2024, total noninterest expense was $27.4 million, an increase of $1.2 million, or 4.5%, from the first quarter of 2024 and an increase of $1.9 million, or 7.5% from the second quarter of 2023. For the six months ended June 30, 2024, total noninterest expenses was $53.7 million, an increase of $4.6 million, or 9.3%, from the same period in 2023.
As compared to the first quarter of 2024, the increase of $1.2 million included increases of $0.7 million in other noninterest expense, an increase of $0.3 million in data processing, and an increase of $0.2 million in advertising expenses, offset by a decrease of $0.1 million in Federal Deposit Insurance Corporation, (“FDIC”) insurance expense. The increase in other noninterest expense relates to a net change of $0.3 million on two other real estate owned (“OREO”) properties that sold in the first quarter of 2024, as well as higher appraisal expenses and loan collection expenses during the second quarter of 2024.



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As compared to the second quarter of 2023, the increase of $1.9 million related to $0.9 million higher FDIC insurance expenses due to the deterioration in asset quality as a direct result of the large nonperforming lending relationship, and that reduced asset quality’s impact on the FDIC insurance assessment calculation, an increase of $0.6 million in salaries and employee benefits, an increase of $0.2 million in data processing expenses, and an increase of $0.2 million in occupancy expenses. Salaries and employee benefits increased as a result of higher salary expense due to fewer open positions in retail, job grade assessment increases and normal merit increases. The variance in occupancy relates primarily to general inflationary cost increases for existing and new service agreements, as well as lease expense on a newly opened office in the second quarter of 2024.
For the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, the most significant increases in total noninterest expense, and similar variances to the year ago quarter, was an increase of $1.9 million in FDIC insurance expense, which was a direct result of the aforementioned large nonperforming lending relationship, an increase of $1.1 million in salaries and employee benefits, and an increase of $0.5 million in occupancy expenses. However, the year-to-date variance was also impacted by a $0.6 million increase in professional and legal fees as a result of fees incurred in connection with the large nonperforming lending relationship and an increase of $0.3 million in debit card expense. The variance in debit card expenses was primarily related to discounts received in March of 2023.
Financial Condition
Total assets were $4.5 billion at June 30, 2024, decreasing $22.4 million during the second quarter of 2024. Total portfolio loans increased $40.5 million, or 4.6% on an annualized basis, to $3.5 billion at June 30, 2024 compared to March 31, 2024. Cash and due from banks decreased $46.4 million to $61.7 million at June 30, 2024 compared to $108.1 million at March 31, 2024. The available-for-sale securities portfolio decreased $22.5 million and is currently 16.5% of total assets at June 30, 2024 compared to 16.9% of total assets at March 31, 2024. The decrease is due to maturities deployed into higher yielding loan assets during the six months ended June 30, 2024. FHLB stock, at cost, decreased $3.4 million to $14.5 million at June 30, 2024 compared to $17.9 million at March 31, 2024 due to lower levels of FHLB borrowings.
During the second quarter of 2024, the Company purchased $5.0 million of equity securities with carrying value totaling $5.1 million at June 30, 2024. The equity securities consist of our investment in a market-rate bond mutual fund that invests in high quality fixed income bonds, mainly government agency securities whose proceeds are designed to positively impact community development throughout the United States. The mutual fund focuses exclusively on providing affordable housing to low- and moderate-income borrowers and renters, including those in Majority Minority Census Tracts.
Total deposits increased $50.8 million, or 5.3% on an annualized basis, to $3.9 billion at June 30, 2024 compared to March 31, 2024 due to an increase of $67.5 million in CDs, an increase of $49.9 million in interest-bearing demand accounts, offset by a decrease of $27.6 million in savings accounts, a decrease of $20.3 million in money market accounts, and a decrease of $18.7 million in noninterest-bearing demand accounts. The Company had $115.6 million brokered CDs at both June 30, 2024 and March 31, 2024.
At June 30, 2024, noninterest-bearing deposits comprised 16.8% of total deposits compared to 17.5% and 19.3% at March 31, 2024 and June 30, 2023, respectively. CDs comprised 45.4%, 44.2% and 40.5% of total deposits at June 30, 2024, March 31, 2024 and June 30, 2023, respectively. As of June 30, 2024, approximately 82.8% of our total deposits of $3.9 billion were insured under standard FDIC insurance coverage limits, and approximately 17.2% of our total deposits were uninsured deposits over the standard FDIC insurance coverage limit. As of March 31, 2024, approximately 82.8% of our total deposits of $3.8 billion were insured under standard FDIC



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insurance coverage limits, and approximately 17.2% of our total deposits were uninsured deposits over the standard FDIC insurance coverage limit.
FHLB borrowings decreased $72.5 million to $238.0 million at June 30, 2024 compared to $310.5 million at March 31, 2024 primarily due to deposit growth. The Company had no outstanding federal funds purchased at June 30, 2024 and March 31, 2024.
Capitalization and Liquidity
The Company remained well capitalized as of June 30, 2024. The Company’s Tier 1 Capital ratio was 10.95% at June 30, 2024 compared to 10.89% at March 31, 2024. The Company’s leverage ratio was 9.43% at June 30, 2024 compared to 9.34% at March 31, 2024. The Company’s Total Risk-Based Capital ratio was 12.22% at June 30, 2024 compared to 12.15% at March 31, 2024.
The Bank also remained well capitalized as of June 30, 2024. The Bank’s Tier 1 Capital ratio was 10.86% at June 30, 2024 compared to 10.80% at March 31, 2024. The Bank’s leverage ratio was 9.35% at June 30, 2024 compared to 9.27% at March 31, 2024. The Bank’s Total Risk-Based Capital ratio was 12.13% at June 30, 2024 compared to 12.07% at March 31, 2024.
Total capital of $364.4 million at June 30, 2024, reflects an increase of $5.3 million compared to March 31, 2024. The increase in equity during the quarter ended June 30, 2024 was primarily due to net income of $4.8 million for the three months ended June 30, 2024, a $0.2 million increase in other comprehensive income due to changes in fair value of investment securities and $0.3 million related to restricted stock activity for the quarter ended June 30, 2024.
At June 30, 2024, funding sources accessible to the Company include borrowing availability at the FHLB, equal to 25.0% of the Company’s assets or approximately $1.1 billion, subject to the amount of eligible collateral pledged, of which the Company is eligible to borrow up to an additional $669.5 million. The Company has unsecured facilities with three other correspondent financial institutions totaling $50.0 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 fed funds lines as of June 30, 2024. In addition to the above funding resources, the Company also has $438.2 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 & Trust. The Company has $4.5 billion in assets and 65 branches in Virginia and North Carolina. For more information or to open an account visit www.carterbank.com.



7
Important Note Regarding Non-GAAP Financial Measures
In addition to traditional measures presented in accordance with 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. Non-GAAP measures should not be considered as an alternative to any measure of performance as promulgated under GAAP, nor are they necessarily comparable to non-GAAP performance 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 quotes 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 assumption 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 loan and securities portfolios;
inflation, market and monetary fluctuations;
changes in trade, monetary and fiscal policies and laws of the U.S. government, including policies of the Federal Reserve, FDIC and Treasury Department;
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;



8
changes in the Company’s liquidity and capital positions;
concentrations of loans secured by real estate, particularly commercial real estate, and the potential impacts of changes in market conditions on the value of real estate collateral;
increased delinquency and foreclosure rates on commercial real estate 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 military conflicts (such as the war between Israel and Hamas and the ongoing war between Russia and Ukraine) or public health events (such as the COVID-19 pandemic), 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, including the outcome of lawsuits related to the large nonperforming lending relationship;
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 recent 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, continuing supply chain disruptions and slowdowns in economic growth;



9
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 employees;
expansions or consolidations in the Company’s branch network, including that the anticipated benefits of 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 SEC including in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. 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 prepared. 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.
Carter Bankshares, Inc.
Wendy Bell, 276-656-1776
Senior Executive Vice President & Chief Financial Officer
wendy.bell@CBTCares.com


CARTER BANKSHARES, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
BALANCE SHEETS
(Dollars in Thousands, except per share data)June 30,
2024
March 31,
2024
June 30,
2023
(unaudited)(unaudited)(unaudited)
ASSETS  
Cash and Due From Banks, including Interest-Bearing Deposits of $21,364 at June 30, 2024, $73,218 at March 31, 2024 and $8,403 at June 30, 2023.
$61,746 $108,110 $53,275 
Securities Available-for-Sale, at Fair Value746,325 768,832 821,370 
Equity Securities5,063 — — 
Loans Held-for-Sale— — 173 
Portfolio Loans3,549,521 3,509,071 3,330,442 
Allowance for Credit Losses(96,686)(96,536)(94,144)
Portfolio Loans, net3,452,835 3,412,535 3,236,298 
Bank Premises and Equipment, net73,347 73,339 74,946 
Other Real Estate Owned, net2,501 2,528 3,379 
Federal Home Loan Bank Stock, at Cost14,467 17,910 19,403 
Bank Owned Life Insurance58,828 58,463 57,415 
Other Assets117,397 113,229 117,731 
Total Assets$4,532,509 $4,554,946 $4,383,990 
 
LIABILITIES
Deposits:
Noninterest-Bearing Demand$653,296 $671,981 $689,224 
Interest-Bearing Demand565,465 515,614 489,971 
Money Market500,475 520,785 422,780 
Savings399,833 427,461 526,588 
Certificates of Deposit1,762,232 1,694,680 1,451,540 
Total Deposits3,881,301 3,830,521 3,580,103 
Federal Home Loan Bank Borrowings238,000 310,500 407,135 
Federal Funds Purchased— — 7,900 
Reserve for Unfunded Commitments2,914 3,150 2,736 
Other Liabilities45,883 51,709 41,879 
Total Liabilities4,168,098 4,195,880 4,039,753 
 
SHAREHOLDERS’ EQUITY
Common Stock, Par Value $1.00 Per Share, Authorized 100,000,000 Shares;
23,072,750 outstanding at June 30, 2024,
23,020,542 outstanding at March 31, 2024 and 23,371,835 at June 30, 2023
23,073 23,021 23,372 
Additional Paid-in Capital91,274 90,947 95,506 
Retained Earnings319,697 314,894 307,344 
Accumulated Other Comprehensive Loss(69,633)(69,796)(81,985)
Total Shareholders’ Equity364,411 359,066 344,237 
Total Liabilities and Shareholders’ Equity$4,532,509 $4,554,946 $4,383,990 
 
PERFORMANCE RATIOS
Return on Average Assets (QTD Annualized)0.43 %0.52 %0.52 %
Return on Average Assets (YTD Annualized)0.47 %0.52 %1.01 %
Return on Average Shareholders' Equity (QTD Annualized)5.40 %6.59 %6.38 %
Return on Average Shareholders' Equity (YTD Annualized)5.99 %6.59 %12.45 %
Portfolio Loans to Deposit Ratio91.45 %91.61 %93.03 %
Allowance for Credit Losses to Total Portfolio Loans2.72 %2.75 %2.83 %
 
CAPITALIZATION RATIOS
Shareholders' Equity to Assets8.04 %7.88 %7.85 %
Tier 1 Leverage Ratio9.43 %9.34 %10.02 %
Risk-Based Capital - Tier 110.95 %10.89 %11.46 %
Risk-Based Capital - Total12.22 %12.15 %12.72 %


CARTER BANKSHARES, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
INCOME STATEMENTS
Quarter-to-DateYear-to-Date
(Dollars in Thousands, except per share data)June 30,
2024
March 31,
2024
June 30,
2023
June 30,
2024
June 30,
2023
(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)
Interest Income$54,583 $54,049 $43,716 $108,632 $95,671 
Interest Expense26,491 25,630 17,005 52,121 28,175 
NET INTEREST INCOME28,092 28,419 26,711 56,511 67,496 
Provision for Credit Losses491 16 85 507 1,500 
(Recovery) Provision for Unfunded Commitments(236)(43)360 (279)444 
NET INTEREST INCOME AFTER PROVISION (RECOVERY) FOR CREDIT LOSSES27,837 28,446 26,266 56,283 65,552 
NONINTEREST INCOME
Gains (Losses) on Sales of Securities, net36 — 36 (9)
Service Charges, Commissions and Fees1,852 1,875 1,759 3,727 3,597 
Debit Card Interchange Fees1,933 2,086 1,934 4,019 4,039 
Insurance Commissions934 614 508 1,548 682 
Bank Owned Life Insurance Income365 348 341 713 680 
Commercial Loan Swap Fee Income— — — — 114 
Other413 122 483 535 660 
TOTAL NONINTEREST INCOME5,533 5,045 5,028 10,578 9,763 
NONINTEREST EXPENSE
Salaries and Employee Benefits14,216 14,200 13,649 28,416 27,301 
Occupancy Expense, net3,793 3,748 3,601 7,541 7,001 
FDIC Insurance Expense1,566 1,687 702 3,253 1,343 
Other Taxes894 903 786 1,797 1,590 
Advertising Expense528 357 431 885 770 
Telephone Expense342 417 412 759 839 
Professional and Legal Fees1,542 1,513 1,659 3,055 2,493 
Data Processing1,234 891 1,058 2,125 1,778 
Debit Card Expense808 756 771 1,564 1,250 
Other2,523 1,785 2,467 4,308 4,747 
TOTAL NONINTEREST EXPENSE27,446 26,257 25,536 53,703 49,112 
INCOME BEFORE INCOME TAXES5,924 7,234 5,758 13,158 26,203 
Income Tax Provision 1,121 1,423 54 2,544 4,558 
NET INCOME $4,803 $5,811 $5,704 $10,614 $21,645 
 
Shares Outstanding, at End of Period23,072,750 23,020,542 23,371,835 23,072,750 23,371,835 
Average Shares Outstanding-Basic & Diluted22,826,510 22,770,311 23,513,837 22,798,476 23,641,109 
PER SHARE DATA
Basic Earnings Per Common Share*$0.21 $0.25 $0.24 $0.46 $0.91 
Diluted Earnings Per Common Share*$0.21 $0.25 $0.24 $0.46 $0.91 
Book Value$15.79 $15.60 $14.73 $15.79 $14.73 
Market Value$15.12 $12.64 $14.79 $15.12 $14.79 
PROFITABILITY RATIOS (GAAP)
Net Interest Margin
2.55 %2.58 %2.51 %2.56 %3.22 %
Efficiency Ratio
81.62 %78.46 %80.46 %80.05 %63.57 %
PROFITABILITY RATIOS (non-GAAP)
Net Interest Margin (FTE)3
2.56 %2.60 %2.54 %2.58 %3.25 %
Adjusted Efficiency Ratio4 (non-GAAP)
81.33 %79.01 %79.77 %80.17 %62.94 %
*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, 2024March 31, 2024June 30, 2023
(Dollars in Thousands)Average
Balance
Income/
Expense
RateAverage
Balance
Income/
Expense
RateAverage
Balance
Income/
Expense
Rate
ASSETS
Interest-Bearing Deposits with Banks$31,083 $420 5.43 %$24,129 $335 5.58 %$17,902 $215 4.82 %
Tax-Free Investment Securities3
11,779 86 2.94 %11,818 85 2.89 %27,894 210 3.02 %
Taxable Investment Securities841,787 7,721 3.69 %853,540 7,743 3.65 %912,292 7,688 3.38 %
Total Securities853,566 7,807 3.68 %865,358 7,828 3.64 %940,186 7,898 3.37 %
Tax-Free Loans3
105,487 854 3.26 %111,471 897 3.24 %126,453 1,016 3.22 %
Taxable Loans3,430,330 45,395 5.32 %3,407,659 44,817 5.29 %3,157,780 34,529 4.39 %
Total Loans3,535,817 46,249 5.26 %3,519,130 45,714 5.22 %3,284,233 35,545 4.34 %
Federal Home Loan Bank Stock16,611 304 7.36 %20,403 378 7.45 %19,331 315 6.54 %
Total Interest-Earning Assets4,437,077 54,780 4.97 %4,429,020 54,255 4.93 %4,261,652 43,973 4.14 %
Noninterest Earning Assets91,648 91,171 97,525 
Total Assets$4,528,725 $4,520,191 $4,359,177 
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-Bearing Demand$532,700 $1,689 1.28 %$496,052 $1,112 0.90 %$490,423 $659 0.54 %
Money Market510,828 3,926 3.09 %524,896 3,996 3.06 %414,852 1,858 1.80 %
Savings411,457 145 0.14 %439,775 137 0.13 %566,312 151 0.11 %
Certificates of Deposit1,731,358 16,963 3.94 %1,635,819 15,472 3.80 %1,396,307 9,114 2.62 %
Total Interest-Bearing Deposits3,186,343 22,723 2.87 %3,096,542 20,717 2.69 %2,867,894 11,782 1.65 %
Federal Home Loan Bank Borrowings283,154 3,675 5.22 %366,782 4,819 5.28 %405,443 5,080 5.03 %
Federal Funds Purchased— — — %— — — %5,363 71 5.31 %
Other Borrowings8,460 93 4.42 %7,703 94 4.91 %6,163 72 4.69 %
Total Borrowings291,614 3,768 5.20 %374,485 4,913 5.28 %416,969 5,223 5.02 %
Total Interest-Bearing Liabilities3,477,957 26,491 3.06 %3,471,027 25,630 2.97 %3,284,863 17,005 2.08 %
Noninterest-Bearing Liabilities693,336 694,293 715,576 
Shareholders' Equity357,432 354,871 358,738 
Total Liabilities and Shareholders' Equity$4,528,725 $4,520,191 $4,359,177 
Net Interest Income3
$28,289 $28,625 $26,968 
Net Interest Margin3
2.56 %2.60 %2.54 %



CARTER BANKSHARES, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
NET INTEREST MARGIN (FTE) (YTD AVERAGES)
(Unaudited)
June 30, 2024June 30, 2023
(Dollars in Thousands)Average
Balance
Income/
Expense
RateAverage
Balance
Income/
Expense
Rate
ASSETS
Interest-Bearing Deposits with Banks$27,606 $755 5.50 %$17,023 $415 4.92 %
Tax-Free Investment Securities3
11,799 171 2.91 %28,491 415 2.94 %
Taxable Investment Securities847,664 15,464 3.67 %916,439 15,081 3.32 %
Total Securities859,463 15,635 3.66 %944,930 15,496 3.31 %
Tax-Free Loans3
108,479 1,751 3.25 %129,580 2,069 3.22 %
Taxable Loans3,418,994 90,212 5.31 %3,115,799 77,657 5.03 %
Total Loans3,527,473 91,963 5.24 %3,245,379 79,726 4.95 %
Federal Home Loan Bank Stock18,507 682 7.41 %16,784 555 6.67 %
Total Interest-Earning Assets4,433,049 109,035 4.95 %4,224,116 96,192 4.59 %
Noninterest Earning Assets91,409 94,549 
Total Assets$4,524,458 $4,318,665 
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-Bearing Demand$514,376 $2,801 1.10 %$490,518 $1,156 0.48 %
Money Market517,862 7,922 3.08 %445,654 3,112 1.41 %
Savings425,616 282 0.13 %604,004 316 0.11 %
Certificates of Deposit1,683,589 32,435 3.87 %1,339,269 14,717 2.22 %
Total Interest-Bearing Deposits3,141,443 43,440 2.78 %2,879,445 19,301 1.35 %
Federal Home Loan Bank Borrowings324,968 8,494 5.26 %345,834 8,475 4.94 %
Federal Funds Purchased— — — %9,831 247 5.07 %
Other Borrowings8,081 187 4.65 %6,305 152 4.86 %
Total Borrowings333,049 8,681 5.24 %361,970 8,874 4.94 %
Total Interest-Bearing Liabilities3,474,492 52,121 3.02 %3,241,415 28,175 1.75 %
Noninterest-Bearing Liabilities693,814 726,656 
Shareholders' Equity356,152 350,594 
Total Liabilities and Shareholders' Equity$4,524,458 $4,318,665 
Net Interest Income3
$56,914 $68,017 
Net Interest Margin3
2.58 %3.25 %
LOANS AND LOANS HELD-FOR-SALE
(Unaudited)
(Dollars in Thousands)June 30,
2024
March 31,
2024
June 30,
2023
Commercial  
Commercial Real Estate$1,801,397 $1,728,929 $1,642,597 
Commercial and Industrial240,611 257,176 279,156 
Total Commercial Loans2,042,008 1,986,105 1,921,753 
Consumer
Residential Mortgages783,903 788,125 707,893 
Other Consumer31,284 32,428 38,736 
Total Consumer Loans815,187 820,553 746,629 
Construction394,926 397,219 356,805 
Other297,400 305,194 305,255 
Total Portfolio Loans3,549,521 3,509,071 3,330,442 
Loans Held-for-Sale— — 173 
Total Loans$3,549,521 $3,509,071 $3,330,615 



CARTER BANKSHARES, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
ASSET QUALITY DATA
(Unaudited)
(Dollars in Thousands)June 30,
2024
March 31,
2024
June 30,
2023
Nonaccrual Loans
Commercial Real Estate$611 $641 $2,512 
Commercial and Industrial1,084 109 113 
Residential Mortgages1,951 2,491 3,288 
Other Consumer30 50 12 
Construction2,426 2,093 2,908 
Other294,140 301,913 301,913 
Total Nonperforming Loans300,242 307,297 310,746 
Other Real Estate Owned2,501 2,528 3,379 
Total Nonperforming Assets$302,743 $309,825 $314,125 
 
Nonperforming Loans to Total Portfolio Loans8.46 %8.76 %9.33 %
Nonperforming Assets to Total Portfolio Loans plus Other Real Estate Owned8.52 %8.82 %9.42 %
Allowance for Credit Losses to Total Portfolio Loans2.72 %2.75 %2.83 %
Allowance for Credit Losses to Nonperforming Loans32.20 %31.41 %30.30 %
Net Loan Charge-offs (Recoveries) QTD$341 $532 $635 
Net Loan Charge-offs (Recoveries) YTD$873 $532 $1,208 
Net Loan Charge-offs (Recoveries) (Annualized) to Average Portfolio Loans QTD0.04 %0.06 %0.08 %
Net Loan Charge-offs (Recoveries) (Annualized) to Average Portfolio Loans YTD0.05 %0.06 %0.08 %

ALLOWANCE FOR CREDIT LOSSES
(Unaudited)
 Quarter-to-DateYear-to-Date
(Dollars in Thousands)June 30,
2024
March 31,
2024
June 30,
2023
June 30,
2024
June 30,
2023
Balance Beginning of Period$96,536 $97,052 $94,694 $97,052 $93,852 
Provision for Credit Losses491 16 85 507 1,500 
Charge-offs:
Commercial Real Estate— — — — — 
Commercial and Industrial18 — 19 
Residential Mortgages23 67 27 70 
Other Consumer488 480 651 968 1,308 
Construction— 156 42 156 42 
Other— — — — — 
Total Charge-offs493 677 760 1,170 1,421 
Recoveries:
Commercial Real Estate— — — — — 
Commercial and Industrial
Residential Mortgages22 24 
Other Consumer129 142 119 271 206 
Construction— — — — — 
Other— — — — — 
Total Recoveries152 145 125 297 213 
Total Net Charge-offs341 532 635 873 1,208 
Balance End of Period$96,686 $96,536 $94,144 $96,686 $94,144 


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-DateYear-to-Date
(Dollars in Thousands)June 30,
2024
March 31,
2024
June 30,
2023
June 30,
2024
June 30,
2023
Net Interest Income$28,092 $28,419 $26,711 $56,511 $67,496 
Noninterest Income5,533 5,045 5,028 10,578 9,763 
Noninterest Expense27,446 26,257 25,536 53,703 49,112 
Pre-tax Pre-provision Income (Non-GAAP)$6,179 $7,207 $6,203 $13,386 $28,147 
2 Adjusted Net Income (Non-GAAP)
Quarter-to-DateYear-to-Date
(Dollars in Thousands, except per share data)June 30,
2024
March 31,
2024
June 30,
2023
June 30,
2024
June 30,
2023
Net Income$4,803 $5,811 $5,704 $10,614 $21,645 
(Gains) Losses on Sales of Securities, net(36)— (3)(36)
Less: Equity Security Unrealized Fair Value Gain(63)— — (63)— 
Losses on Sales and Write-downs of Bank Premises, net44 33 45 66 
Gains on Sales and Write-downs of OREO, net(8)(342)(5)(350)(5)
OREO Income (20)(8)(18)(28)(34)
Contingent Liability— — — — 115 
Total Tax Effect18 73 (1)91 (32)
Adjusted Net Income (Non-GAAP)$4,738 $5,535 $5,710 $10,273 $21,764 
Average Shares Outstanding - diluted22,826,510 22,770,311 23,513,837 22,798,476 23,641,109 
Adjusted Earnings Per Common Share (diluted) (Non-GAAP)$0.21 $0.24 $0.24 $0.45 $0.92 
3 Computed on a fully taxable equivalent basis ("FTE") using a 21% federal income tax rate for the 2024 and 2023 periods.
Net Interest Income (FTE) (Non-GAAP)Quarter-to-DateYear-to-Date
(Dollars in Thousands)June 30,
2024
March 31,
2024
June 30,
2023
June 30,
2024
June 30,
2023
Interest Income (FTE)(Non-GAAP)
Interest and Dividend Income (GAAP)$54,583 $54,049 $43,716 $108,632 $95,671 
Tax Equivalent Adjustment3
197 206 257 403 521 
Interest and Dividend Income (FTE) (Non-GAAP)54,780 54,255 43,973 109,035 96,192 
Average Earning Assets4,437,077 4,429,020 4,261,652 4,433,049 4,224,116 
Yield on Interest-earning Assets (GAAP)4.95 %4.91 %4.11 %4.93%4.57%
Yield on Interest-earning Assets (FTE) (Non-GAAP)4.97 %4.93 %4.14 %4.95%4.59%
Net Interest Income (GAAP)$28,092 $28,419 $26,711 $56,511 $67,496 
Tax Equivalent Adjustment3
197 206 257 403 521 
Net Interest Income (FTE) (Non-GAAP)28,289 28,625 26,968 56,914 68,017 
Average Earning Assets4,437,077 4,429,020 4,261,652 4,433,049 4,224,116 
Net Interest Margin (GAAP)2.55 %2.58 %2.51 %2.56 %3.22 %
Net Interest Margin (FTE) (Non-GAAP)2.56 %2.60 %2.54 %2.58 %3.25 %



CARTER BANKSHARES, INC.
CONSOLIDATED SELECTED FINANCIAL DATA
4 Adjusted Efficiency Ratio (Non-GAAP)
Quarter-to-DateYear-to-Date
(Dollars in Thousands)June 30,
2024
March 31,
2024
June 30,
2023
June 30,
2024
June 30,
2023
Noninterest Expense$27,446 $26,257 $25,536 $53,703 $49,112 
Less: Losses on Sales and Write-downs of Bank Premises, net(44)(1)(33)(45)(66)
Less: Gains on Sales and Write-downs of OREO, net342 350 
Less: Contingent Liability — — — — (115)
Adjusted Noninterest Expense (Non-GAAP)$27,410 $26,598 $25,508 $54,008 $48,936 
 
Net Interest Income$28,092 $28,419 $26,711 $56,511 $67,496 
Plus: Taxable Equivalent Adjustment3
197 206 257 403 521 
Net Interest Income (FTE) (Non-GAAP)28,289 28,625 26,968 56,914 68,017 
Less: (Gains) Losses on Sales of Securities, net (36)— (3)(36)
Less: Equity Security Unrealized Fair Value Gain(63)— — (63)— 
Less: OREO Income(20)(8)(18)(28)(34)
Noninterest Income5,533 5,045 5,028 10,578 9,763 
Net Interest Income (FTE) (Non-GAAP) plus Noninterest Income$33,703 $33,662 $31,975 $67,365 $77,755 
Efficiency Ratio (GAAP)81.62 %78.46 %80.46 %80.05 %63.57 %
Adjusted Efficiency Ratio (Non-GAAP)81.33 %79.01 %79.77 %80.17 %62.94 %


v3.24.2
Cover
Jul. 25, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jul. 25, 2024
Entity Registrant Name CARTER BANKSHARES, INC.
Entity Incorporation, State or Country Code VA
Entity File Number 001-39731
Entity Tax Identification Number 85-3365661
Entity Address, Address Line One 1300 Kings Mountain Road
Entity Address, City or Town Martinsville
Entity Address, State or Province VA
Entity Address, Postal Zip Code 24112
City Area Code 276
Local Phone Number 656-1776
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $1.00 par value
Trading Symbol CARE
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001829576
Document Fiscal Period Focus
Document Fiscal Year Focus
Amendment Flag false

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