Carter Bankshares(US:CARE)2026-03-05 17:53Financial Performance - Net income for 2025 was $31,362 thousand, up from $24,523 thousand in 2024, reflecting a year-over-year increase of 27.5%[516] - Basic earnings per common share increased to $1.38 in 2025 from $1.06 in 2024, representing a growth of 30.2%[516] - Comprehensive income for 2025 was $53,723,000, compared to $31,441,000 in 2024, reflecting a significant growth[517] - The net unrealized gains recognized in other comprehensive income for 2025 were $22,361,000, up from $6,918,000 in 2024[517] - Cash provided by operating activities in 2025 was $39,862,000, an increase from $36,938,000 in 2024[521] Loan Portfolio - Total portfolio loans increased by $254.7 million, or 7.0%, during the year ended December 31, 2025[360] - Total gross loans increased by $255.1 million to $3,879.9 million as of December 31, 2025, compared to $3,624.8 million at December 31, 2024[430] - The loan portfolio composition included 24.1% floating rate loans, 37.5% variable rate loans, and 38.4% fixed rate loans[423] - Commercial Real Estate (CRE) loans represented 54.5% of total portfolio loans at December 31, 2025, up from 51.6% at December 31, 2024[424] - The Company actively monitors its loan portfolio in response to changing market conditions and borrower performance[423] Credit Quality - Nonperforming loans (NPLs) declined by $15.4 million to $244.0 million as of December 31, 2025, with NPLs as a percentage of total portfolio loans at 6.29% compared to 7.15% in 2024[360] - The allowance for credit losses (ACL) on portfolio loans totaled $71.5 million at December 31, 2025, down from $75.6 million at December 31, 2024, with the ACL to total portfolio loans ratio at 1.84% compared to 2.09%[360] - Net loan charge-offs significantly decreased to $0.5 million in 2025 from $16.4 million in 2024, with net charge-offs as a percentage of average portfolio loans dropping to 0.01% from 0.46%[381] - The Company established specific reserves of $18.0 million for nonperforming loans, representing 8.4% of the aggregate principal amount, down from 12.0% the previous year[447] - The Other segment reserve rate declined to 8.43% at December 31, 2025, from 12.01% at December 31, 2024, indicating improved credit quality[379] Deposits and Funding - Total deposits increased by $57.5 million, or 1.4%, to $4.2 billion at December 31, 2025, compared to December 31, 2024[360] - The Company acquired $55.9 million in deposits from two leased branch facilities in North Carolina during 2025[348] - Average interest-bearing liabilities increased to $3.7 billion in 2025 from $3.5 billion in 2024, primarily due to growth in interest-bearing deposits[374] - The cost of total interest-bearing deposits declined to 2.69% in 2025 from 2.91% in 2024, reflecting lower deposit rate offerings[374] - Federal Home Loan Bank borrowings increased by $108.5 million to $178.5 million at December 31, 2025, primarily to fund loan growth[469] Interest Income and Margin - Net interest income increased by $16.4 million, or 14.3%, to $130.8 million for the year ended December 31, 2025, compared to 2024[360] - Interest and dividend income increased to $232.2 million in 2025 from $221.7 million in 2024, reflecting a growth of 2.3%[368] - Net interest margin (GAAP) increased to 2.82% in 2025 from 2.57% in 2024, while net interest margin (FTE) rose to 2.83% from 2.58%[369] - Total interest earned on interest-bearing assets increased by $10.4 million, or 80.5%, from 2024 to 2025, driven by a $15.4 million increase in total loans[377] - The yield on total interest-earning assets (GAAP) increased to 5.00% in 2025 from 4.97% in 2024, while the yield on total loans (FTE) rose to 5.39% from 5.32%[372] Noninterest Income and Expense - Total noninterest income increased by $1.0 million, or 4.8%, in 2025, primarily due to a $2.0 million rise in other noninterest income, including a $1.9 million gain on a BOLI death benefit[385] - Total noninterest expense rose to $117.1 million in 2025, an increase of $7.1 million, or 6.4%, driven by operational growth and inflationary pressures[388] - Salaries and employee benefits remained flat due to higher salary cost deferrals of $5.7 million, with actual expenses increasing by $5.5 million due to merit increases and strategic hires[389] - Occupancy expenses increased by $2.0 million, attributed to higher software maintenance costs and increased depreciation related to branch purchases[391] - Gains on sales of securities decreased by $22,000, or 32.4%, from 2024 to 2025, reflecting lower market activity[385] Capital and Liquidity - Total capital increased to $419.7 million, up $35.4 million from 2024, driven by net income of $31.4 million[476] - The leverage ratio for Carter Bankshares, Inc. was 9.43% as of December 31, 2025, down from 9.56% in 2024[476] - The total risk-based capital ratio was 11.95% as of December 31, 2025, compared to 12.13% in 2024[476] - Total liquidity sources decreased to $1.225 billion in 2025 from $1.393 billion in 2024, reflecting a reduction in cash and due from banks[495] - The ratio of highly liquid assets to total assets was 9.7% as of December 31, 2025, down from 10.9% in 2024[493] Strategic Initiatives - The Company aims to shift from balance-sheet restructuring to a prudent growth strategy, focusing on organic growth and opportunistic acquisitions[351] - The Company renovated 47 retail branch locations and seven corporate offices in 2025 as part of its brand enhancement strategy[350] - The Company initiated $27.4 million in 1035 exchanges of BOLI to transfer proceeds to new insurance carriers, enhancing credit ratings and yields[402] - The Company actively monitors liquidity and maintains a comprehensive contingency funding plan, with defined liquidity metrics reviewed monthly[488] - The Company announced a new stock repurchase program on February 2, 2026, authorizing up to $10.0 million in common stock purchases[500]