Carter Bankshares(CARE) - 2025 Q4 - Annual Results

Financial Performance - Carter Bankshares reported a net income of $8.5 million, or $0.38 diluted EPS, for Q4 2025, an increase from $5.4 million, or $0.24 diluted EPS, in Q3 2025[1]. - For the full year 2025, net income was $31.4 million, or $1.38 diluted EPS, compared to $24.5 million, or $1.06 diluted EPS in 2024, representing a 28.2% year-over-year increase[1]. - The return on average assets (QTD annualized) improved to 0.70% in Q4 2025, compared to 0.45% in Q3 2025[41]. - Adjusted net income for the quarter ended December 31, 2025, was $9,058 thousand, compared to $5,711 thousand for the quarter ended September 30, 2025, reflecting a growth of 58.5%[49]. Net Interest Income - Net interest income for Q4 2025 was $34.6 million, up $0.9 million, or 2.6%, from Q3 2025, and increased by $5.5 million, or 18.7%, compared to Q4 2024[3]. - Net interest income for the quarter ended December 31, 2025, was $34,604 thousand, an increase from $33,719 thousand in the previous quarter[48]. - Net Interest Income for Q4 2025 reached $34,604,000, up from $33,719,000 in Q3 2025, representing a growth of 2.6%[50]. - Total Net Interest Income (FTE) (Non-GAAP) for the year ended December 31, 2025, was $131,491,000, compared to $115,232,000 in 2024, marking an increase of 14.1%[50]. Loan Portfolio - Total portfolio loans increased by $43.9 million, or 4.5%, on an annualized basis, reaching $3.9 billion as of December 31, 2025, and grew by $254.7 million, or 7.0%, year-over-year[3]. - Total portfolio loans rose by $43.9 million, or 4.5%, to $3.9 billion at December 31, 2025, with notable increases in CRE loans by $51.1 million and C&I loans by $13.9 million[26]. - Total loans as of December 31, 2025, reached $3,879,899 thousand, an increase from $3,624,826 thousand in December 2024, representing a growth of 7.0%[45]. - The portfolio loans to deposit ratio stood at 92.13% as of December 31, 2025, up from 91.10% in the previous quarter[41]. Nonperforming Loans - Nonperforming loans (NPLs) decreased by $14.7 million to $244.0 million at December 31, 2025, with NPLs as a percentage of total portfolio loans declining to 6.29%[6]. - Total nonperforming loans decreased to $243,982 thousand as of December 31, 2025, from $258,637 thousand on September 30, 2025, representing a reduction of 5.6%[46]. - Nonperforming loans to total portfolio loans ratio improved to 6.29% as of December 31, 2025, down from 6.74% on September 30, 2025[46]. Efficiency and Expenses - The efficiency ratio for Q4 2025 was 77.84%, impacted by the Bank's largest lending relationship that has been on nonaccrual status since Q2 2023[7]. - Noninterest expense totaled $31.0 million in Q4 2025, an increase of $2.3 million, or 8.0%, compared to Q3 2025, driven by higher seasonal salaries and employee benefits[19]. - The efficiency ratio for the year ended December 31, 2025, improved to 76.39%, down from 80.99% in 2024, indicating better cost management[42]. - Adjusted Efficiency Ratio (Non-GAAP) improved to 76.85% in Q4 2025 from 73.37% in Q3 2025, suggesting better cost management[50]. Capital and Assets - Total assets increased by $11.8 million to $4.9 billion as of December 31, 2025, compared to September 30, 2025[24]. - The Tier 1 Capital ratio improved to 10.70% at December 31, 2025, compared to 10.66% at September 30, 2025[29]. - The Company remains well-capitalized with a Total Risk-Based Capital ratio of 11.95% at December 31, 2025, compared to 11.91% at September 30, 2025[29]. - Total assets as of December 31, 2025, were $4,832,462 thousand, up from $4,637,440 thousand in December 2024, representing a growth of 4.2%[43]. Deposits and Liquidity - Total deposits increased slightly by $0.5 million to $4.2 billion at December 31, 2025[27]. - Approximately 81.3% of total deposits were insured within standard FDIC coverage limits as of December 31, 2025, down from 81.6% at September 30, 2025[28]. - The Company has $402.2 million of unpledged available-for-sale investment securities as an additional source of liquidity[32]. Other Income and Expenses - Noninterest income for Q4 2025 was $5.2 million, a slight decrease from the previous quarter and the same quarter last year, primarily due to lower insurance commissions[17]. - Noninterest income for the quarter ended December 31, 2025, was $5,225 thousand, slightly down from $5,370 thousand in the previous quarter[48]. - The total Noninterest Expense for the year ended December 31, 2025, was $117,054,000, compared to $110,002,000 in 2024, an increase of 6.3%[50]. - Gains on Sales and write-downs of OREO, net, for the year ended December 31, 2025, were $(203,000), compared to $866,000 in 2024, indicating a significant decline[50].