Core Insights - BIRKENSTOCK has launched a new body care range under its CARE ESSENTIALS line, expanding its focus from foot care to full-body care with products made from 100% natural origin ingredients [1][2][3] Product Overview - The new body care range includes four products designed for daily use, featuring a Hand and Body Wash and Lotion, available in Relaxing and Balancing formulations [6] - All products are vegan-certified, COSMOS-Natural-certified, and made in Germany, emphasizing the brand's commitment to quality and sustainability [2][5][6] Brand Philosophy - BIRKENSTOCK's expansion into body care aligns with its holistic approach to natural care, combining functionality with sensory experience [2][3] - The brand aims to empower consumers to care for their bodies as nature intended, reflecting its core values of function, quality, and tradition [4][7] Sustainability Efforts - The packaging for the new body care products is designed with sustainability in mind, utilizing post-consumer recycled materials and FSC-certified components [8] - The company emphasizes its commitment to environmentally friendly practices in both product formulation and packaging [8][12]

Core Viewpoint - Carter Bankshares, Inc. (CARE) is showing solid improvement in earnings estimates, which may lead to continued stock price momentum [1][2]. Earnings Estimate Revisions - Analysts are increasingly optimistic about Carter Bankshares' earnings prospects, as reflected in the upward trend of estimate revisions [2][3]. - The current quarter's earnings estimate is projected at $0.39 per share, indicating a year-over-year increase of +69.6% [5]. - The Zacks Consensus Estimate for the current quarter has risen by 14.71% over the last 30 days, with two estimates increasing and no negative revisions [5]. - For the full year, the earnings estimate stands at $1.50 per share, representing a +42.9% change from the previous year [6]. - The consensus estimate for the current year has increased by 15.39% due to two upward revisions and no negative changes [7]. Zacks Rank and Performance - Carter Bankshares currently holds a Zacks Rank 2 (Buy), indicating favorable conditions for investment based on earnings estimate revisions [8]. - Stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) have historically outperformed the S&P 500 [8]. Investment Outlook - The stock has appreciated by 7.5% over the past four weeks due to strong estimate revisions, suggesting potential for further upside [9].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-39731 CARTER BANKSHARES, INC. (Exact name of registrant as specified in its charter) | Virginia | | | 85-3365661 | | --- | --- | --- | --- | | (State or other jurisdicti ...

Core Insights - Carter Bankshares reported Q2 2025 earnings with an EPS (GAAP) of $0.37, exceeding the consensus estimate of $0.34, marking a 76.2% increase year-over-year from $0.21 in Q2 2024 [1][2][5] - The bank's net interest margin improved to 2.82% (non-GAAP), up from 2.56% in Q2 2024, reflecting better credit metrics despite ongoing revenue challenges [2][8] - Nonperforming loans decreased to $250.6 million from $300.2 million in Q2 2024, with a significant portion attributed to the Justice Entities relationship [6][5] Financial Metrics - EPS (GAAP) for Q2 2025 was $0.37, compared to an estimate of $0.34 and $0.21 in Q2 2024, showing a year-over-year increase of 76.2% [2] - Net interest margin (non-GAAP) rose to 2.82%, an increase of 0.26 percentage points from Q2 2024 [2] - Pre-tax pre-provision income (non-GAAP) reached $8.0 million, up 29.0% from $6.2 million in Q2 2024 [2] - The efficiency ratio (GAAP) improved to 78.63% from 81.62% in Q2 2024 [2][9] Business Overview - Carter Bankshares operates as a regional bank in Virginia and North Carolina, focusing on commercial real estate loans, residential mortgages, and deposit products [3] - The bank aims to differentiate itself through brand enhancement and personalized customer relationships [3][4] - Recent strategic initiatives include expanding market presence, attracting new commercial loan clients, and returning capital to shareholders via stock buybacks [4] Operational Highlights - Commercial real estate loans increased to $2.00 billion from $1.80 billion in Q2 2024, indicating growth momentum [7] - Deposit growth reached $4.22 billion, up from $3.88 billion, largely due to a branch acquisition in North Carolina [7] - Noninterest income (GAAP) fell 11.3% year-over-year to $4.9 million, impacted by the absence of a one-time gain recorded in Q1 2025 [9] Strategic Developments - The bank completed the acquisition of two branch offices from First Reliance Bank, enhancing its presence in North Carolina [10] - Stock repurchases totaled 547,332 shares at an average price of $16.70, costing $9.1 million out of a $20 million approved program [10] - Management expressed confidence in a healthy loan pipeline, particularly in construction lending, expected to contribute significantly in the next 12 to 18 months [11] Future Outlook - Key issues for investors include the resolution of the Justice Entities loan, organic deposit growth trends, and expense control [12] - The bank remains sensitive to Federal Reserve rate changes, with expectations for benefits from additional rate cuts [11]

Group 1 - Carter Bankshares, Inc. (CARE) shares have increased by 3.4% over the past four weeks, closing at $17.93, with a mean price target of $22.67 indicating a potential upside of 26.4% [1] - The mean estimate includes three short-term price targets with a standard deviation of $1.53, where the lowest estimate of $21.00 suggests a 17.1% increase, and the highest estimate of $24.00 indicates a 33.9% increase [2] - Analysts show a strong consensus that CARE will report better earnings than previously estimated, with a positive trend in earnings estimate revisions correlating with potential stock price increases [4][11] Group 2 - The Zacks Consensus Estimate for CARE has increased by 10.4% due to one upward revision in earnings estimates over the last 30 days, with no negative revisions [12] - CARE holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for upside [13] - While the consensus price target may not be a reliable indicator of the extent of potential gains, it does provide a directional guide for price movement [14]

Core Insights - Carter Bankshares, Inc. reported a revenue of $37.44 million for the quarter ended June 2025, reflecting a year-over-year increase of 10.7% [1] - The earnings per share (EPS) for the quarter was $0.41, a significant rise from $0.21 in the same quarter last year, resulting in an EPS surprise of +32.26% against the consensus estimate of $0.31 [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $37.77 million, showing a surprise of -0.88% [1] Financial Performance Metrics - The efficiency ratio for the quarter was reported at 78.6%, which is higher than the estimated average of 76.9% by two analysts [4] - The net interest margin stood at 2.8%, matching the average estimate based on two analysts [4] - Total noninterest income was reported at $4.91 million, which fell short of the two-analyst average estimate of $5.41 million [4] Stock Performance - Over the past month, shares of Carter Bankshares have returned +3.9%, compared to a +5.7% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating it may perform in line with the broader market in the near term [3]

Group 1 - Carter Bankshares, Inc. reported quarterly earnings of $0.41 per share, exceeding the Zacks Consensus Estimate of $0.31 per share, and showing an increase from $0.21 per share a year ago, resulting in an earnings surprise of +32.26% [1] - The company posted revenues of $37.44 million for the quarter ended June 2025, which was below the Zacks Consensus Estimate by 0.88%, but an increase from $33.82 million year-over-year [2] - Over the last four quarters, Carter Bankshares has surpassed consensus EPS estimates three times, but has only topped consensus revenue estimates once [2] Group 2 - The stock's immediate price movement will depend on management's commentary during the earnings call, as Carter Bankshares shares have gained about 1.3% year-to-date, compared to the S&P 500's gain of 8.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.34 on revenues of $39.64 million, and for the current fiscal year, it is $1.30 on revenues of $155.48 million [7] - The Zacks Industry Rank for Banks - Northeast is currently in the top 23% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

[Q2 2025 Financial Results Overview](index=1&type=section&id=Q2%202025%20Financial%20Results%20Overview) Carter Bankshares reported Q2 2025 net income and net interest income growth year-over-year, with slight sequential declines in net income and EPS [Quarterly and Year-to-Date Performance](index=1&type=section&id=Quarterly%20and%20Year-to-Date%20Performance) The company reported mixed quarterly results with year-over-year growth but sequential declines in net income and diluted EPS Quarterly and Year-to-Date Financial Performance (Millions USD) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------- | :------ | :------ | :------ | :------- | :------- | | Net Income (millions) | $8.5 | $9.0 | $4.8 | $17.5 | $10.6 | | Diluted EPS | $0.37 | $0.39 | $0.21 | $0.76 | $0.46 | | Net Interest Income (millions) | $32.4 | $30.1 | $28.1 | $62.5 | $56.5 | | Pre-tax Pre-provision Income (millions) | $8.0 | $9.0 | $6.2 | $17.0 | $13.4 | - The company completed the acquisition of two leased branch facilities, acquiring **$55.9 million of deposits** and welcoming 10 new associates[1](index=1&type=chunk) - A stock repurchase program was announced to purchase up to **$20.0 million of common stock**; **547,332 shares** were repurchased for **$9.1 million** at a weighted average cost of **$16.70 per share** as of June 30, 2025[2](index=2&type=chunk) - Loans related to Justice Entities negatively impacted interest income by **$6.7 million** in Q2 2025; aggregate curtailment payments of **$66.4 million** reduced the NPL balance from **$301.9 million** (June 30, 2023) to **$235.5 million** (June 30, 2025)[3](index=3&type=chunk)[4](index=4&type=chunk) [CEO Commentary and Strategic Highlights](index=2&type=section&id=CEO%20Commentary%20and%20Strategic%20Highlights) CEO highlighted strong fundamentals, margin expansion, and loan growth, strategically positioning the company for future interest rate shifts - The company experienced margin expansion and solid loan growth, with an annualized loan growth of **6.5%** reflecting momentum in commercial lending[6](index=6&type=chunk) - Deposit balances showed modest growth, and the cost of deposits continued to decline, positioning the company to benefit if the Federal Reserve reduces short-term interest rates[6](index=6&type=chunk) - The purchase of two leased branch facilities in North Carolina added **$55.9 million of deposits** and new associates[7](index=7&type=chunk) - Approximately **46%** of the **$20.0 million** stock repurchase program has been utilized as of June 30, 2025, deemed the most prudent way to deliver shareholder value given the strong capital position[7](index=7&type=chunk) [Key Financial and Operational Metrics](index=2&type=section&id=Key%20Financial%20and%20Operational%20Metrics) Q2 2025 metrics show positive trends in loan and deposit growth, net interest income, net interest margin, and asset quality Key Financial and Operational Metrics | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | YoY Change (Q2 2025 vs Q2 2024) | | :-------------------------------- | :------------ | :------------- | :------------ | :------------------------------ | | Total portfolio loans | $3.7 billion | $3.6 billion | $3.5 billion | +5.6% ($197.6 million) | | Allowance for credit losses to total portfolio loans | 1.90% | 1.99% | 2.72% | -82 bps | | Total deposits | $4.2 billion | $4.2 billion | $3.9 billion | +8.8% ($340.9 million) | | Net interest income | $32.4 million | $30.1 million | $28.1 million | +15.2% ($4.3 million) | | Net interest margin (FTE) | 2.82% | 2.70% | 2.56% | +26 bps | | NPLs to total portfolio loans | 6.69% | 7.09% | 8.46% | -177 bps | | Efficiency ratio | 78.63% | 75.71% | 81.62% | -299 bps | | Adjusted efficiency ratio (non-GAAP) | 75.55% | 78.67% | 81.33% | -578 bps | [Operating Highlights](index=3&type=section&id=Operating%20Highlights) This section details the company's Q2 operating performance across credit quality, net interest income, noninterest income, and expenses [Credit Quality](index=3&type=section&id=Credit%20Quality) Q2 2025 credit quality improved, marked by decreased nonperforming loans and a lower NPLs to total portfolio loans ratio due to curtailment payments Credit Quality Metrics (Millions USD) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :------------ | | NPLs to total portfolio loans | 6.69% | 7.09% | 8.46% | | Total NPLs (millions) | $250.6 | $261.4 | $300.2 | | Justice Entities NPL balance (millions) | $235.5 | $245.1 | $294.1 | | Specific reserves for Justice Entities (millions) | $24.0 | $27.1 | N/A | | (Recovery) Provision for Credit Losses (millions) | $(2.3) | $(2.0) | $0.5 | | Recovery for Unfunded Commitments (thousands) | $(335) | $(114) | $(236) | - The decrease in NPLs during Q2 2025 was primarily due to **$9.5 million** of curtailment payments from the Bank's largest NPL credit relationship and a **$1.2 million** decline in nonaccrual residential mortgages[9](index=9&type=chunk) - The Justice Entities NPL relationship represents **94.0%** of total NPLs and **6.3%** of total portfolio loans at June 30, 2025[10](index=10&type=chunk) [Net Interest Income](index=3&type=section&id=Net%20Interest%20Income) Net interest income and margin significantly increased in Q2 2025, driven by lower funding costs and higher asset yields, benefiting from rate cuts Net Interest Income and Margin Performance (Millions USD) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | QoQ Change (Q2 2025 vs Q1 2025) | YoY Change (Q2 2025 vs Q2 2024) | | :-------------------------------- | :------ | :------ | :------ | :------------------------------ | :------------------------------ | | Net Interest Income (millions) | $32.4 | $30.1 | $28.1 | +7.4% ($2.2 million) | +15.2% ($4.3 million) | | Net Interest Margin (FTE) | 2.82% | 2.70% | 2.56% | +12 bps | +26 bps | | Total interest-bearing deposit costs | 2.70% | 2.86% | N/A | -16 bps | N/A | | Average interest-bearing deposits (millions) | N/A | N/A | N/A | +$31.8 million | N/A | | Total average borrowings (millions) | $119.5 | $80.3 | N/A | +$39.2 million | N/A | - The increase in net interest income 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 Q1 2025 and Q2 2024, respectively[14](index=14&type=chunk) - Lower interest-bearing funding costs were positively impacted by the Federal Reserve's cut of short-term interest rates by **100 basis points** from September 2024 to December 2024[16](index=16&type=chunk) [Noninterest Income](index=4&type=section&id=Noninterest%20Income) Noninterest income decreased sequentially due to a Q1 BOLI gain and year-over-year from lower other noninterest income and insurance commissions Total Noninterest Income (Millions USD) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | QoQ Change (Q2 2025 vs Q1 2025) | YoY Change (Q2 2025 vs Q2 2024) | | :-------------------- | :------ | :------ | :------ | :------------------------------ | :------------------------------ | | Total Noninterest Income (millions) | $4.9 | $6.9 | $5.5 | -28.9% ($2.0 million) | -11.3% ($0.6 million) | - The primary driver for the sequential decrease was a **$1.9 million** gain on a BOLI death benefit recorded in other noninterest income in Q1 2025[17](index=17&type=chunk) - Significant year-over-year decreases included **$0.3 million** in other noninterest income and **$0.2 million** in insurance commissions due to lower activity[17](index=17&type=chunk) [Noninterest Expense](index=4&type=section&id=Noninterest%20Expense) Noninterest expense rose due to higher other noninterest expenses, professional fees, and salaries, influenced by a BOLI exchange fee and branch acquisition Total Noninterest Expense (Millions USD) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | QoQ Change (Q2 2025 vs Q1 2025) | YoY Change (Q2 2025 vs Q2 2024) | | :-------------------- | :------ | :------ | :------ | :------------------------------ | :------------------------------ | | Total Noninterest Expense (millions) | $29.3 | $28.0 | $27.4 | +4.5% ($1.3 million) | +$1.9 million | - Primary drivers for the sequential increase were increases in other noninterest expenses (**$0.3 million** 1035 exchange fee on BOLI), professional and legal fees (**$0.4 million**), and salaries and employee benefits (**$0.4 million**), due to higher medical expenses, an extra day, and ten new associates from the Branch Purchase[18](index=18&type=chunk) - Occupancy expense, net, increased **$0.4 million** year-over-year primarily due to additional software and maintenance expenses and higher depreciation expense as a result of the Branch Purchase[19](index=19&type=chunk) [Financial Condition](index=4&type=section&id=Financial%20Condition) This section reviews the company's asset composition, liabilities (deposits and borrowings), and overall capitalization and liquidity position [Assets](index=4&type=section&id=Assets) Total assets grew to **$4.8 billion**, driven by increases in cash, available-for-sale securities, and portfolio loans, especially commercial real estate Asset Overview (Millions USD) | Metric | June 30, 2025 | March 31, 2025 | QoQ Change | | :-------------------------------- | :------------ | :------------- | :--------- | | Total Assets (millions) | $4,784.1 | $4,700.3 | +$83.8 | | Cash and Due From Banks (millions) | $99.9 | $89.0 | +$10.9 | | Available-for-Sale Securities (millions) | $755.2 | $745.4 | +$9.8 | | Total Portfolio Loans (millions) | $3,747.1 | $3,687.5 | +$59.6 | - The increase in portfolio loans was driven by growth of **$84.9 million** in commercial real estate loans and **$12.9 million** in residential mortgages[21](index=21&type=chunk) - These increases were partially offset by decreases of **$15.7 million** in construction, **$12.1 million** in commercial and industrial, **$9.5 million** in other, and **$0.8 million** in other consumer loans[21](index=21&type=chunk) [Liabilities (Deposits & Borrowings)](index=5&type=section&id=Liabilities%20(Deposits%20%26%20Borrowings)) Total deposits increased due to a branch acquisition, though core deposits declined, while FHLB borrowings rose to support loan growth Liabilities Overview (Millions USD) | Metric | June 30, 2025 | March 31, 2025 | QoQ Change | | :-------------------------------- | :------------ | :------------- | :--------- | | Total Deposits (millions) | $4,222.2 | $4,200.9 | +$21.3 | | FHLB Borrowings (millions) | $113.5 | $55.0 | +$58.5 | - Total deposits included **$55.9 million** related to the Branch Purchase; excluding these, total deposits decreased **$34.6 million**, primarily due to large commercial depositors repositioning funds[22](index=22&type=chunk) - Approximately **81.5%** of total deposits were insured under standard FDIC limits, with **18.5%** being uninsured deposits over the limit at June 30, 2025[23](index=23&type=chunk) [Capitalization and Liquidity](index=5&type=section&id=Capitalization%20and%20Liquidity) The company maintained a well-capitalized status with substantial liquidity, including significant borrowing availability and unpledged investment securities Capital Ratios | Capital Ratio | June 30, 2025 | March 31, 2025 | | :---------------------- | :------------ | :------------- | | Tier 1 Capital ratio | 10.87% | 11.01% | | Leverage ratio | 9.46% | 9.67% | | Total Risk-Based Capital ratio | 12.12% | 12.27% | - The Company has borrowing availability at the FHLB of approximately **$1.2 billion**, with eligibility to borrow up to an additional **$732.0 million**[25](index=25&type=chunk) - Additional funding sources include unsecured facilities totaling **$30.0 million**, a fully secured facility of **$45.0 million** with other correspondent financial institutions, access to the institutional CD market, and **$438.8 million** in unpledged available-for-sale investment securities[25](index=25&type=chunk) [About Carter Bankshares, Inc.](index=5&type=section&id=About%20Carter%20Bankshares%2C%20Inc.) This section provides a brief overview of Carter Bankshares, Inc., its services, asset size, and branch network [Company Overview](index=5&type=section&id=Company%20Overview) Carter Bankshares, Inc. is a Martinsville, VA-based holding company offering diverse banking services with **$4.8 billion** in assets and 64 branches - Headquartered in Martinsville, VA, Carter Bankshares, Inc. (NASDAQ: CARE) provides commercial banking, consumer banking, mortgage, and services through its subsidiary Carter Bank[26](index=26&type=chunk) - The Company has **$4.8 billion** in assets and operates **64 branches** in Virginia and North Carolina[26](index=26&type=chunk) [Important Notes and Disclaimers](index=6&type=section&id=Important%20Notes%20and%20Disclaimers) This section outlines important considerations regarding non-GAAP financial measures and forward-looking statements, including associated risks [Important Note Regarding Non-GAAP Financial Measures](index=6&type=section&id=Important%20Note%20Regarding%20Non-GAAP%20Financial%20Measures) This section clarifies the use of non-GAAP financial measures for evaluating operating results, noting they are not GAAP alternatives and require careful consideration - Non-GAAP financial measures are used to enhance the ability of investors and management to evaluate and compare the Company's operating results and understand its underlying business, operational performance, and trends[27](index=27&type=chunk) - These measures should not be considered as an alternative to GAAP or more relevant than GAAP results, nor are they necessarily comparable with similar non-GAAP measures presented by other companies[27](index=27&type=chunk) - Investors should consider the Company's performance and financial condition as reported under GAAP and all other relevant information[27](index=27&type=chunk) [Important Note Regarding Forward-Looking Statements](index=6&type=section&id=Important%20Note%20Regarding%20Forward-Looking%20Statements) This section disclaims forward-looking statements, highlighting inherent risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are not guarantees of future results or performance and involve certain risks, uncertainties, and assumptions that are difficult to predict and often beyond the Company's control[29](index=29&type=chunk) - Key risks include market interest rates, inflation, changes in government policies, cyber-security threats, the ability to resolve nonperforming assets, changes in liquidity and capital positions, concentrations of loans (especially CRE), and regulatory supervision[29](index=29&type=chunk)[30](index=30&type=chunk) - Other factors include general economic conditions, changes in customer behaviors, failure to attract or retain key associates, and potential turbulence in financial and real estate markets[32](index=32&type=chunk) [Consolidated Financial Data Tables](index=9&type=section&id=Consolidated%20Financial%20Data%20Tables) This section provides detailed consolidated financial data tables, including balance sheets, income statements, and net interest margin analyses [Balance Sheets](index=9&type=section&id=BALANCE%20SHEETS) This table presents consolidated balance sheet data for June 30, 2025, March 31, 2025, and June 30, 2024, detailing assets, liabilities, and equity Balance Sheets (Dollars in Thousands, except per share data) | | June 30, | | March 31, | | June 30, | | --- | --- | --- | --- | --- | --- | | (Dollars in Thousands, except per share data) | 2025 | | 2025 | | 2024 | | ASSETS | (unaudited) | | (unaudited) | | (unaudited) | | 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 Real Estate Owned, net | 1,657 | | 577 | | 2,501 | | Federal Home Loan Bank Stock, at Cost | 8,653 | | 5,875 | | 14,467 | | Bank Owned Life Insurance | 48,365 | | 48,224 | | 58,828 | | Other Assets | 109,384 | | 113,123 | | 117,397 | | Total Assets | $4,784,091 | | $4,700,287 | | $4,532,509 | | LIABILITIES | | | | | | | Deposits: | | | | | | | Noninterest-Bearing Demand | 635,192 | | 631,714 | | 653,296 | | Interest-Bearing Demand | 805,013 | | 794,059 | | 565,465 | | Money Market | 544,764 | | 528,381 | | 500,475 | | Savings | 343,659 | | 353,394 | | 399,833 | | Certificates of Deposit | 1,893,611 | | 1,893,379 | | 1,762,232 | | Total Deposits | 4,222,239 | | 4,200,927 | | 3,881,301 | | Federal Home Loan Bank Borrowings | 113,500 | | 55,000 | | 238,000 | | Reserve for Unfunded Loan Commitments | 2,737 | | 3,072 | | 2,914 | | Other Liabilities | 39,980 | | 39,522 | | 45,883 | | Total Liabilities | 4,378,456 | | 4,298,521 | | 4,168,098 | | SHAREHOLDERS' EQUITY | | | | | | | Common Stock, Par Value $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 Shareholders' Equity (QTD Annualized) | 8.45 % | | 9.27 % | | 5.40 % | | Return on Average Shareholders' Equity (YTD Annualized) | 8.85 % | | 9.27 % | | 5.99 % | | Allowance for Credit Losses to Total Portfolio Loans | 1.90 % | | 1.99 % | | 2.72 % | | Portfolio Loans to Deposit Ratio | 88.75 % | | 87.78 % | | 91.45 % | | Shareholders' Equity to Assets | 8.48 % | | 8.55 % | | 8.04 % | | CAPITALIZATION RATIOS | | | | | | | 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 % | [Income Statements](index=10&type=section&id=INCOME%20STATEMENTS) This table provides consolidated income statement data for quarterly and year-to-date periods, detailing interest income, expenses, and net income Income Statements (Dollars in Thousands, except per share data) | | | June 30, | | March 31, | | June 30, | | June 30, | | June 30, | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | (Dollars in Thousands, except per share data) | | 2025 | | 2025 | | 2024 | | 2025 | | 2024 | | | | (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) | | | | | | | | | | | | 3 Net Interest Margin (FTE) | | 2.82 % | | 2.70 % | | 2.56 % | | 2.76 % | | 2.58 % | | 4 Adjusted Efficiency Ratio (Non-GAAP) | | 75.55 % | | 78.67 % | | 81.33 % | | 77.06 % | | 80.17 % | [Net Interest Margin (FTE) - QTD Averages](index=11&type=section&id=NET%20INTEREST%20MARGIN%20(FTE)%20(QTD%20AVERAGES)) This table details average balances, income/expense, and rates for interest-earning assets and liabilities on an FTE basis for quarterly periods Net Interest Margin (FTE) - QTD Averages (Dollars in Thousands) | | Average | | June 30, 2025 Income/ | | | Average | March 31, 2025 Income/ | | Average | June 30, 2024 Income/ | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | (Dollars in Thousands) | Balance | | Expense | Rate | | Balance | Expense | Rate | Balance | Expense | Rate | | ASSETS | | | | | | | | | | | | | Interest-Bearing Deposits with Banks | $58,006 | $643 | | 4.45 % | $67,387 | $748 | 4.50 % | $31,083 | $420 | 5.43 % | | 3 Tax-Free Investment Securities | 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 % | | 3 Tax-Free Loans | 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 | | | | 3 Net Interest Income | | $32,530 | | | | $30,316 | | | | $28,289 | | | Net Interest Margin 3 | | | | 2.82 % | | | 2.70 % | | | 2.56 % | [Net Interest Margin (FTE) - YTD Averages](index=12&type=section&id=NET%20INTEREST%20MARGIN%20(FTE)%20(YTD%20AVERAGES)) This table presents average balances, income/expense, and rates for interest-earning assets and liabilities on an FTE basis for year-to-date periods Net Interest Margin (FTE) - YTD Averages (Dollars in Thousands) | | | Average | | Six Months Ended June 30, 2025 Income/ | | Average | Income/ | Six Months Ended June 30, 2024 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | (Dollars in Thousands) | | Balance | | Expense | Rate | Balance | Expense | | Rate | | ASSETS | | | | | | | | | | | Interest-Bearing Deposits with Banks | $ | 62,670 | $ | 1,391 | 4.48 % | $27,606 | $ | 755 | 5.50 % | | 3 Tax-Free Investment Securities | | 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 % | | 3 Tax-Free Loans | | 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 | | | | | 3 Net Interest Income | | | $ | 62,846 | | | $ | 56,914 | | | 3 Net Interest Margin | | | | | 2.76 % | | | | 2.58 % | [Loans and Loans Held-for-Sale](index=12&type=section&id=LOANS%20AND%20LOANS%20HELD-FOR-SALE) This table provides a detailed breakdown of the loan portfolio by category, including Commercial Real Estate, Residential Mortgages, and Construction Loans and Loans Held-for-Sale (Dollars in Thousands) | | | June 30, | | March 31, | | June 30, | | --- | --- | --- | --- | --- | --- | | (Dollars in Thousands) | | 2025 | | 2025 | | 2024 | | Commercial | | | | | | | | Commercial Real Estate | $ | 2,000,766 | $ | 1,915,863 | $ | 1,801,397 | | Commercial and Industrial | | 221,880 | | 234,024 | | 240,611 | | Total Commercial Loans | | 2,222,646 | | 2,149,887 | | 2,042,008 | | Consumer | | | | | | | | Residential Mortgages | | 814,188 | | 801,253 | | 783,903 | | Other Consumer | | 27,991 | | 28,804 | | 31,284 | | Total Consumer Loans | | 842,179 | | 830,057 | | 815,187 | | Construction | | 443,573 | | 459,285 | | 394,926 | | Other | | 238,723 | | 248,266 | | 297,400 | | Total Portfolio Loans | | 3,747,121 | | 3,687,495 | | 3,549,521 | | Loans Held-for-Sale | | 246 | | — | | — | | Total Loans | $ | 3,747,367 | $ | 3,687,495 | $ | 3,549,521 | [Asset Quality Data](index=13&type=section&id=ASSET%20QUALITY%20DATA) This table presents key asset quality metrics, including nonaccrual loans, total nonperforming assets, and various related ratios Asset Quality Data (Dollars in Thousands) | | | | | For the Periods Ended | | | | --- | --- | --- | --- | --- | --- | --- | | | | June 30, | | March 31, | | June 30, | | (Dollars in Thousands) | | 2025 | | 2025 | | 2024 | | Nonaccrual Loans | | | | | | | | Commercial Real Estate | $ | 9,613 | $ | 9,733 | $ | 611 | | Commercial and Industrial | | 1,048 | | 1,070 | | 1,084 | | Residential Mortgages | | 4,142 | | 5,326 | | 1,951 | | Other Consumer | | 29 | | 38 | | 30 | | Construction | | 207 | | 213 | | 2,426 | | Other | | 235,542 | | 245,064 | | 294,140 | | Total Nonperforming Loans | | 250,581 | | 261,444 | | 300,242 | | Other Real Estate Owned | | 1,657 | | 577 | | 2,501 | | Total Nonperforming Assets | $ | 252,238 | $ | 262,021 | $ | 302,743 | | Nonperforming Loans to Total Portfolio Loans | | 6.69 % | | 7.09 % | | 8.46 % | | Nonperforming Assets to Total Portfolio Loans plus Other Real Estate Owned | | 6.73 % | | 7.10 % | | 8.52 % | | Allowance for Credit Losses to Total Portfolio Loans | | 1.90 % | | 1.99 % | | 2.72 % | | Allowance for Credit Losses to Nonperforming Loans | | 28.34 % | | 28.12 % | | 32.20 % | | Net Loan Charge-offs QTD | $ | 165 | $ | 57 | $ | 341 | | Net Loan Charge-offs YTD | $ | 222 | $ | 57 | $ | 873 | | Net Loan Charge-offs (Annualized) to Average Portfolio Loans QTD | | 0.02 % | | 0.01 % | | 0.04 % | | Net Loan Charge-offs (Annualized) to Average Portfolio Loans YTD | | 0.01 % | | 0.01 % | | 0.05 % | [Allowance for Credit Losses](index=14&type=section&id=ALLOWANCE%20FOR%20CREDIT%20LOSSES) This table details changes in the allowance for credit losses, including provisions, charge-offs by loan category, and recoveries Allowance for Credit Losses (Dollars in Thousands) | | | | Quarter-to-Date | | | | Year-to-Date | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | June 30, | | March 31, | | June 30, | June 30, | | June 30, | | | (Dollars in Thousands) | 2025 | | 2025 | | 2024 | 2025 | | 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 Real Estate | | — | | — | | — | | — | | — | | Commercial and Industrial | | — | | 7 | | 1 | | 7 | | 19 | | Residential Mortgages | | — | | — | | 4 | | — | | 27 | | Other Consumer | | 288 | | 171 | | 488 | | 459 | | 968 | | Construction | | — | | 1 | | — | | 1 | | 156 | | Other | | — | | — | | — | | — | | — | | Total Charge-offs | | 288 | | 179 | | 493 | | 467 | | 1,170 | | Recoveries: | | | | | | | | | | | Commercial Real Estate | | — | | — | | — | | — | | — | | Commercial and Industrial | | 2 | | 3 | | 1 | | 5 | | 2 | | Residential Mortgages | | 2 | | 8 | | 22 | | 10 | | 24 | | Other Consumer | | 119 | | 110 | | 129 | | 229 | | 271 | | Construction | | — | | 1 | | — | | 1 | | — | | Other | | — | | — | | — | | — | | — | | Total Recoveries | | 123 | | 122 | | 152 | | 245 | | 297 | | Total Net Charge-offs | | 165 | | 57 | | 341 | | 222 | | 873 | | Balance End of Period | $ | 71,023 | $ | 73,518 | $ | 96,686 | $ | 71,023 | $ | 96,686 | [Pre-tax Pre-provision Income (Non-GAAP)](index=14&type=section&id=Pre-tax%20Pre-provision%20Income%20(Non-GAAP)) This table reconciles GAAP financial measures to the non-GAAP measure of Pre-tax Pre-provision Income for quarterly and year-to-date periods Pre-tax Pre-provision Income (Non-GAAP) (Dollars in Thousands) | 1 Pre-tax Pre-provision Income (Non-GAAP) | Quarter-to-Date | | | | | Year-to-Date | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | June 30, | March 31, | | | June 30, | | June 30, | | June 30, | | (Dollars in Thousands) | 2025 | 2025 | | | 2024 | | 2025 | | 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 | [Adjusted Net Income (Non-GAAP)](index=15&type=section&id=Adjusted%20Net%20Income%20(Non-GAAP)) This table reconciles GAAP Net Income to Adjusted Net Income (Non-GAAP) by adjusting for non-recurring items and their tax effects Adjusted Net Income (Non-GAAP) (Dollars in Thousands, except per share data) | 2 Adjusted Net Income (Non-GAAP) | | | | Quarter-to-Date | | | Year-to-Date | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | June 30, | | | March 31, | June 30, | | June 30, | | June 30, | | (Dollars in Thousands, except per share data) | 2025 | | | 2025 | 2024 | | 2025 | | 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 | | — | | 5 Gain on BOLI death benefit | | — | | (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 | [Net Interest Income (FTE) (Non-GAAP)](index=15&type=section&id=Net%20Interest%20Income%20(FTE)%20(Non-GAAP)) This table reconciles GAAP Interest and Dividend Income and Net Interest Income to their FTE Non-GAAP counterparts, including yields and margins Net Interest Income (FTE) (Non-GAAP) (Dollars in Thousands) | Net Interest Income (FTE) (Non-GAAP) | | | | Quarter-to-Date | | | | | Year-to-Date | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | June 30, | | March 31, | | June 30, | | June 30, | | June 30, | | (Dollars in Thousands) | | 2025 | | 2025 | | 2024 | | 2025 | | 2024 | | Interest and Dividend Income (GAAP) | $ | 57,747 | $ | 56,007 | $ | 54,583 | $ | 113,754 | $ | 108,632 | | 3 Tax Equivalent Adjustment | | 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 | | 3 Tax Equivalent Adjustment | | 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 % | [Adjusted Efficiency Ratio (Non-GAAP)](index=16&type=section&id=Adjusted%20Efficiency%20Ratio%20(Non-GAAP)) This table reconciles GAAP Noninterest Expense and Net Interest Income to calculate the Adjusted Efficiency Ratio for quarterly and year-to-date periods Adjusted Efficiency Ratio (Non-GAAP) (Dollars in Thousands) | 4 Adjusted Efficiency Ratio (Non-GAAP) | | | | Quarter-to-Date | | | | | Year-to-Date | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | June 30, | | March 31, | | June 30, | | June 30, | | June 30, | | (Dollars in Thousands) | | 2025 | | 2025 | | 2024 | | 2025 | | 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 | | 3 Plus: Taxable Equivalent Adjustment | | 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) | | 5 Gain on BOLI death benefit | | — | | (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 % |

PART I - FINANCIAL INFORMATION This section encompasses the Company's unaudited consolidated financial statements and management's discussion and analysis for the three months ended March 31, 2025 [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS) This section presents the Company's unaudited consolidated financial statements for the three months ended March 31, 2025, and comparative periods, including balance sheets, income statements, comprehensive income, changes in shareholders' equity, cash flows, and detailed notes to provide a comprehensive view of its financial position and performance [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) This statement details the Company's financial position at March 31, 2025, compared to December 31, 2024 Consolidated Balance Sheet Highlights (March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 (Thousands) | December 31, 2024 (Thousands) | Change (Thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | :----------------- | | Total Assets | $4,700,287 | $4,659,189 | $41,098 | | Portfolio Loans, net | $3,613,977 | $3,549,226 | $64,751 | | Securities Available-for-Sale | $745,390 | $718,400 | $26,990 | | Total Deposits | $4,200,927 | $4,153,421 | $47,506 | | Federal Home Loan Bank Borrowings | $55,000 | $70,000 | $(15,000) | | Total Liabilities | $4,298,521 | $4,274,876 | $23,645 | | Total Shareholders' Equity | $401,766 | $384,313 | $17,453 | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) This statement presents the Company's revenues, expenses, and net income for Q1 2025 versus Q1 2024 Consolidated Statements of Income Highlights (Three Months Ended March 31, 2025 vs. 2024) | Metric | Three Months Ended March 31, 2025 (Thousands) | Three Months Ended March 31, 2024 (Thousands) | Change (Thousands) | % Change | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :----------------- | :--------- | | Total Interest Income | $56,007 | $54,049 | $1,958 | 3.62% | | Total Interest Expense | $25,869 | $25,630 | $239 | 0.93% | | Net Interest Income | $30,138 | $28,419 | $1,719 | 6.05% | | (Recovery) Provision for Credit Losses | $(2,025) | $16 | $(2,041) | NM | | Total Noninterest Income | $6,901 | $5,045 | $1,856 | 36.80% | | Total Noninterest Expense | $28,042 | $26,257 | $1,785 | 6.80% | | Net Income | $8,953 | $5,811 | $3,142 | 54.07% | | Basic Earnings per Common Share | $0.39 | $0.25 | $0.14 | 56.00% | | Diluted Earnings per Common Share | $0.39 | $0.25 | $0.14 | 56.00% | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This statement reports net income and other comprehensive income for Q1 2025 and Q1 2024 Consolidated Statements of Comprehensive Income Highlights (Three Months Ended March 31, 2025 vs. 2024) | Metric | Three Months Ended March 31, 2025 (Thousands) | Three Months Ended March 31, 2024 (Thousands) | Change (Thousands) | % Change | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :----------------- | :--------- | | Net Income | $8,953 | $5,811 | $3,142 | 54.07% | | Net Unrealized Gains Arising during the Period | $10,383 | $2,119 | $8,264 | 390.00% | | Tax Effect | $(2,235) | $(476) | $(1,759) | 369.54% | | Net Unrealized Gains Recognized in Other Comprehensive Income | $8,148 | $1,643 | $6,505 | 396.04% | | Comprehensive Income | $17,101 | $7,454 | $9,647 | 129.42% | [Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) This statement details changes in shareholders' equity for Q1 2025 and Q1 2024 Consolidated Statements of Changes in Shareholders' Equity Highlights (March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 (Thousands) | December 31, 2024 (Thousands) | Change (Thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | :----------------- | | Balance, December 31, 2024 / 2023 | $384,313 | $351,243 | $33,070 | | Net Income | $8,953 | $5,811 | $3,142 | | Other Comprehensive Income, Net of Tax | $8,148 | $1,643 | $6,505 | | Forfeiture of Restricted Stock | $(129) | $(72) | $(57) | | Issuance of Restricted Stock | $0 | $0 | $0 | | Recognition of Restricted Stock Compensation Expense | $481 | $441 | $40 | | Balance, March 31, 2025 / 2024 | $401,766 | $359,066 | $42,700 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes cash flows for Q1 2025 and Q1 2024 Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31, 2025 vs. 2024) | Metric | Three Months Ended March 31, 2025 (Thousands) | Three Months Ended March 31, 2024 (Thousands) | Change (Thousands) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :----------------- | | Net Cash Provided By Operating Activities | $6,376 | $17,634 | $(11,258) | | Net Cash (Used In) Provided by Investing Activities | $(81,054) | $10,241 | $(91,295) | | Net Cash Provided By Financing Activities | $32,506 | $25,706 | $6,800 | | Net (Decrease) Increase in Cash and Cash Equivalents | $(42,172) | $53,581 | $(95,753) | | Cash and Cash Equivalents at End of Period | $88,999 | $108,110 | $(19,111) | [Notes to Unaudited Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the unaudited consolidated financial statements [NOTE 1 – Basis of Presentation](index=10&type=section&id=NOTE%201%20%E2%80%93%20Basis%20of%20Presentation) The financial statements are prepared in accordance with GAAP for interim information, consolidating Carter Bankshares, Inc. and its subsidiaries. The Company adopted ASU 2024-02 in January 2025 with no material impact and is evaluating ASU 2023-09 for 2025 and ASU 2024-04 and 2024-03 for later periods - The Company's unaudited Consolidated Financial Statements are prepared in accordance with GAAP for interim financial information, consolidating Carter Bankshares, Inc. and its wholly-owned subsidiary, Carter Bank & Trust[20](index=20&type=chunk)[21](index=21&type=chunk) - The adoption of ASU 2024-02 on January 1, 2025, which amends the Codification to remove references to various concepts statements, did not have a material impact on the Company's Consolidated Financial Statements[24](index=24&type=chunk) - The Company is currently evaluating the impact of ASU 2023-09 (effective January 1, 2025) on income tax disclosures and ASU 2024-04 (effective January 1, 2026) and ASU 2024-03 (effective fiscal years beginning after December 15, 2026) on its financial statements, with no significant impact expected from ASU 2024-04[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) [NOTE 2 – Earnings Per Common Share](index=11&type=section&id=NOTE%202%20%E2%80%93%20Earnings%20Per%20Common%20Share)

Core Insights - Carter Bankshares, Inc. (CARE) reported a revenue of $37.22 million for the quarter ended March 2025, reflecting an 11.2% increase year-over-year and a surprise of +6.92% over the Zacks Consensus Estimate of $34.81 million [1] - The earnings per share (EPS) for the quarter was $0.32, up from $0.24 in the same quarter last year, with an EPS surprise of +6.67% compared to the consensus estimate of $0.30 [1] Financial Performance Metrics - The efficiency ratio for Carter Bankshares was reported at 75.7%, better than the average estimate of 80.2% from two analysts [4] - The net interest margin stood at 2.7%, slightly above the average estimate of 2.6% based on two analysts [4] - Total noninterest income was $6.90 million, exceeding the estimated $5.37 million from two analysts [4] Stock Performance - Over the past month, shares of Carter Bankshares have returned -8%, compared to a -5.1% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]