Carter Bankshares(US:CARE)2025-10-23 12:06Financial Performance - Carter Bankshares, Inc. reported a net income of $5.4 million, or $0.24 diluted EPS, for Q3 2025, a decrease from $8.5 million, or $0.37 diluted EPS, in Q2 2025[1] - Noninterest income for Q3 2025 was $5.4 million, an increase of $0.5 million, or 9.4%, compared to the prior quarter[15] - Net income for the quarter was $5,419 thousand, a decrease of 36.5% from $8,510 thousand in the previous quarter[38] - Adjusted net income for Q3 2025 was $5,711,000, compared to $9,312,000 in Q2 2025 and $5,352,000 in Q3 2024, indicating a decrease of 38.5% quarter-over-quarter but a 6.7% increase year-over-year[45] Loan and Asset Growth - Total portfolio loans increased by $88.5 million, or 9.4%, on an annualized basis, reaching $3.8 billion as of September 30, 2025[6] - The company experienced an annualized loan growth of 9.4%, indicating strong momentum in its commercial lending platform[4] - Total loans increased to $3,836,131 thousand as of September 30, 2025, from $3,747,367 thousand in June 2025, with commercial loans reaching $2,281,219 thousand[41] - Total assets increased to $4,840,119 thousand as of September 30, 2025, up from $4,613,435 thousand a year earlier, representing a growth of 4.9%[37] Credit Quality and Provisions - Nonperforming loans (NPLs) increased by $8.1 million to $258.6 million at September 30, 2025, with NPLs to total portfolio loans at 6.74%[6] - The provision for credit losses was an expense of $2.9 million in Q3 2025, compared to a recovery of $(2.3) million in Q2 2025[10] - The provision for credit losses in Q3 2025 was $2,896,000, compared to a recovery of $(2,330,000) in Q2 2025 and $(432,000) in Q3 2024, reflecting a shift towards increased provisions[43] - Total charge-offs for Q3 2025 amounted to $256,000, significantly lower than $15,448,000 in Q3 2024, indicating improved credit quality[43] Efficiency and Operational Metrics - The efficiency ratio improved to 73.43% in Q3 2025, down from 80.17% in Q3 2024, reflecting better operational efficiency[6] - The adjusted efficiency ratio for Q3 2025 improved to 73.37%, compared to 75.55% in Q2 2025 and 80.65% in Q3 2024, indicating enhanced operational efficiency[46] - The return on average assets (QTD annualized) decreased to 0.45% from 0.72% in the previous quarter[37] Deposits and Capital - Total deposits decreased by $11.9 million to $4.2 billion as of September 30, 2025, during the seasonally slow third quarter[23] - The Company's Tier 1 Capital ratio was 10.66% at September 30, 2025, down from 10.87% at June 30, 2025[25] - Approximately 81.6% of total deposits were insured under standard FDIC insurance coverage limits as of September 30, 2025[24] Shareholder Actions - The Company repurchased 262,269 shares of common stock at a total cost of $4.9 million during the three months ended September 30, 2025[26] Interest Income and Margin - Net interest income for Q3 2025 was $33.7 million, an increase of $1.4 million, or 4.2%, from the prior quarter, and an increase of $4.9 million, or 17.1%, from Q3 2024[6] - The net interest margin (GAAP) for Q3 2025 was 2.86%, compared to 2.80% in Q2 2025 and 2.58% in Q3 2024, reflecting improved profitability on interest-earning assets[45] - Year-to-date net interest income for the nine months ended September 30, 2025 was $96,728 thousand, with a net interest margin of 2.80%[40]