Carter Bankshares(US:CARE)2023-05-03 16:00Financial Performance - Net income for the three months ended March 31, 2023, was $15.941 million, up from $9.323 million in the same period of 2022, representing a year-over-year increase of 70.5%[71] - Comprehensive income for the three months ended March 31, 2023, was $28.193 million, compared to a loss of $24.653 million in the same period of 2022[71] - Net interest income increased by $12.6 million, or 44.5%, to $40.8 million for the three months ended March 31, 2023, compared to the same period in 2022[251] - The Company reported net income of $15.9 million, or $0.67 diluted earnings per common share, for the three months ended March 31, 2023, compared to net income of $9.3 million, or $0.36 diluted earnings per common share, for the same period in 2022[252] - Total noninterest income decreased by $0.6 million to $4.7 million for the three months ended March 31, 2023, compared to $5.3 million for the same period in 2022[252] Loan Performance - Nonperforming loans (NPLs) increased by $1.7 million, or 25.9%, to $8.4 million as of March 31, 2023, compared to $6.7 million at December 31, 2022[37] - NPLs as a percentage of total portfolio loans rose to 0.26% at March 31, 2023, from 0.21% at December 31, 2022[37] - Total portfolio loans amounted to $3,248,898,000 as of March 31, 2023, up from $3,148,913,000 at the end of 2022, indicating a 3.2% growth[112] - Total commercial loans reached $1,865,968,000 as of March 31, 2023, an increase from $1,780,354,000 at the end of 2022, marking a 4.8% growth[112] - Total consumer loans increased to $716,648,000 as of March 31, 2023, compared to $702,510,000 at the end of 2022, showing a 2.0% increase[112] - The company reported no credit-related net investment impairment losses during the three months ended March 31, 2023, and 2022[111] - As of March 31, 2023, the company had $72,000 in residential real estate loans in the process of foreclosure, down from $902,000 at the end of 2022[117] - Loans past due 30 to 89 days decreased by $2.5 million to $2.3 million at March 31, 2023, compared to $4.8 million at December 31, 2022[157] - No loans were past due 90 days or more and still accruing as of March 31, 2023, and December 31, 2022, indicating strong loan performance[157] - Nonaccrual loans totaled $8,368,000 as of March 31, 2023, reflecting a stable status in loan performance[159] Credit Losses and Provisions - Provision for credit losses increased to $1.499 million for the three months ended March 31, 2023, compared to $0.394 million in the same period of 2022[71] - The allowance for credit losses has been adjusted to reflect the current economic conditions and risk assessments[152] - The allowance for credit losses on loans at the end of the period was $18,595,000, compared to $17,992,000 at the beginning of the period, indicating an increase of 3.4%[160] - The provision for credit losses on loans for the three months ended March 31, 2023, was $1,415,000, compared to a recovery of $630,000 for the same period in 2022[160] - The company recorded net charge-offs of $573,000 for the three months ended March 31, 2023, compared to net recoveries of $193,000 for the same period in 2022[160] Securities and Investments - The total debt securities amount to $956,645,000 with a fair value of $862,856,000, reflecting gross unrealized losses of $95,147,000[80] - The fair value of residential mortgage-backed securities is $103,884,000, with an amortized cost of $114,509,000, indicating unrealized losses of $10,625,000[80] - The company holds U.S. Treasury securities with an amortized cost of $19,336,000 and a fair value of $18,132,000, reflecting unrealized losses of $1,204,000[80] - The total corporate notes amount to $70,750,000, with a fair value of $61,733,000, showing unrealized losses of $9,017,000[80] - The total fair value of available-for-sale securities with unrealized losses was $791.528 million, with significant losses in residential mortgage-backed securities totaling $12.009 million[136] Cash Flow and Capital Management - Net cash provided by operating activities was $22.435 million for the three months ended March 31, 2023, compared to $12.470 million in the same period of 2022[71] - Net cash used in investing activities was $125.455 million for the three months ended March 31, 2023, compared to $181.671 million in the same period of 2022[71] - Net cash provided by financing activities was $137.529 million for the three months ended March 31, 2023, compared to a cash outflow of $0.562 million in the same period of 2022[71] - Cash and cash equivalents at the end of the period were $81.378 million as of March 31, 2023, compared to $108.036 million at the end of March 31, 2022[71] - The company repurchased 1,523,157 shares of common stock, totaling $24.626 million during the reporting period[71] Strategic Initiatives - The company is focusing on expanding its market presence and enhancing its product offerings in response to evolving customer needs[152] - Future guidance indicates a cautious outlook on loan growth, with an emphasis on maintaining credit quality amid economic uncertainties[152] - The Company announced a common share repurchase program to purchase up to 1,000,000 shares of common stock over a period of twelve months, effective May 1, 2023[261] - The Company is shifting its focus from restructuring the balance sheet to pursuing a prudent growth strategy, targeting organic growth and opportunistic acquisitions[250] - The Company aims to increase fee income while closely monitoring operating expenses as part of its growth strategy[250] Regulatory and Compliance - The company has not adopted any new Accounting Standards Updates during the three months ended March 31, 2023[99] - The transition away from LIBOR is being managed by a cross-functional team, ensuring compliance with guidelines established by the FCA and ARRC[103] - The company has selected one month term SOFR as the replacement benchmark for LIBOR-based loans, with the transition team having completed key milestones for a smooth transition[103]