Carter Bankshares, Inc. · NASDAQ:CARE
Carter Bankshares — Q2 2025 Earnings Presentation
52 slides from Carter Bankshares's earnings presentation, Jul 28, 2025
Slide 1: Investor Presentation Second Quarter 2025
Investor Presentation Second Quarter 2025 Nasdaq: CARE
Slide 2: Forward-Looking Statement
Forward-Looking Statement 2 This information contains or incorporates certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements relating to our financial condition, market conditions, results of operat
Slide 3: Table of Contents
Table of Contents 3 SECTION 01 Overview 4-14 SECTION 02 Financial Highlights 15-26 SECTION 03 Asset Quality 27-33 SECTION 04 Deposit Mix 34-36 SECTION 05 Commercial Loans 37-46 SECTION 06 Non-GAAP Reconciliation 47-52
Slide 4: Overview
Overview SECTION 01
Slide 5: Company History
5As of June 30, 2025 Company History Focused on the future. A well-capitalized franchise with momentum 1974 Bank established de novo in 1974 as First National Bank of Rocky Mount, VA 2006 Carter Bank & Trust charter established in 2006 with the merger of ten banks 2020 Carter Bankshares, Inc. holdin
Slide 6: Regional Footprint
As of Month XX, XXXX Regional Footprint 6 VIRGINIA N. CAROLINA Charlotte Martinsville Raleigh Greensboro Lynchburg Charlottesville Corporate Headquarters Regional Offices Branches Map Key 51 Total Branches in Virginia – Total VA Deposits $3.7B 13 Total Branches in North Carolina – Total NC Deposits
Slide 7: Leadership Team
Leadership Team 7 Loran Adams Executive Vice President Director of Regulatory Risk Management 42 years in Industry 8 years at the Bank Tami Buttrey Executive Vice President Chief Retail Banking Officer 42 years in Industry 6 years at the Bank Paul Carney Executive Vice President Chief Human Resource
Slide 8: Our Purpose
OUR PURPOSE To create opportunities for more people and businesses to prosper.
Slide 9: Rewarding Relationships
As of Month XX, XXXX Rewarding Relationships 9 Regulators Customers Community Associates Investors Nurturing relationships and rewarding customers, associates, and shareholders. As of June 30, 2025
Slide 10: Corporate & Social Responsibility
Corporate & Social Responsibility 10As of June 30, 2025 1,314 Volunteer Community Service Hours – 45 Nonprofits Supported by Associates Serving on Boards & Committees – $473,531 Charitable Donations & Sponsorships to Nonprofits – 38 Financial Education Classes Facilitated for 662 Students For the 6t
Slide 11: Investment Highlights
As of Month XX, XXXX Investment Highlights Strong Financial Performance • Strong Liquidity & Capital Position • CET1 of 10.87% • ͏͏ACL coverage of 1.90% • ͏͏$1.4B of total available liquidity • ͏͏179.6% total available liquidity / uninsured deposits Attractive Markets & Customers • Well-positioned i
Slide 12: Strategic Initiatives
As of Month XX, XXXX Strategic Initiatives 12 Superior financial performance and operational excellence. Growing responsibly with financial safety and soundness in mind is an essential practice that enables the Bank to prosper and remain independent. We’re known for our ability to provide exceptiona
Slide 13: Expansion: Purchase of two North Carolina branches
13As of June 30, 2025 Expansion Completed purchase of two North Carolina branches from First Reliance Bank At the close of business on May 23, 2025, the Company completed the acquisition of two leased branch facilities and the deposits associated therewith, located in Mooresville, North Carolina and
Slide 14: Safety & Soundness
Safety & Soundness 14As of June 30, 2025 Capital Asset Quality Earnings 10.87% Common Equity Tier 1 Ratio (CET1) – 12.12% Total Risk-based Capital Ratio – 9.46% Leverage Ratio – $17.89 Book Value 0.43% Delinquency/Portfolio Loans – 6.69% NPL/Portfolio Loans1 – 1.90% ACL/Portfolio Loans2 – 0.01% Net
Slide 15: Financial Highlights
Financial SECTION 02
Slide 16: Balance Sheet & Income Statement
Balance Sheet & Income Statement 16As of June 30, 2025 Operational Results 2Q 2025 1Q 2025 Q/Q Change $ 2Q 2024 Y/Y Change $ Net Interest Income $ 32,359 $ 30,138 $ 2,221 $ 28,092 $ 4,267 (Recovery) Provision for Credit Losses (2,330) (2,025) (305) 491 (2,821) Recovery for Unfunded Commitments (335)
Slide 17: Financial / Shareholder Ratios
Financial / Shareholder Ratios 17As of June 30, 2025 Shareholder Ratios 2Q 2025 1Q 2025 Q/Q Change 2Q 2024 Y/Y Change Diluted Earnings Per Share (QTD) $ 0.37 $ 0.39 $ (0.02) $ 0.21 $ 0.16 Financial Ratios Return on Avg Assets (QTD) 0.72 % 0.78 % (0.06) % 0.43 % 0.29 % Return on Avg Shareholders' Equ
Slide 18: Financial Performance Trends
Financial Performance Trends 18As of June 30, 2025 Net Income, in thousands $31,590 $50,118 $23,384 $24,523 $17,463 2021 2022 2023 2024 YTD 2Q2025 Adjusted Efficiency Ratio 73.51% 60.67% 72.54% 80.95% 77.06% 2021 2022 2023 2024 YTD 2Q2025 ROA 0.76% 1.21% 0.53% 0.54% 0.75% 2021 2022 2023 2024 YTD 2Q2
Slide 19: Capital Management
Carter Bankshares Regulatory Well Capitalized Actual Excess ($) (In Thousands) Excludes Impact of Large NPL Excess ($) Excludes Impact of Large NPL (In Thousands) Common Equity Tier 1 Ratio ("CET 1") 6.50 % 10.87 % $ 183,056 12.71 % $ 252,954 Tier 1 Risk-based Ratio 8.00 % 10.87 % 120,157 12.71 % 19
Slide 20: Liquidity
Liquidity 20As of June 30, 2025 $ in thousands June 30, 2025 December 31, 2024 Change Cash and Due From Banks, including Interest-bearing Deposits $ 99,905 $ 131,171 $ (31,266) FHLB Borrowing Availability1 731,967 735,294 (3,327) Unsecured Lines of Credit 30,000 30,000 — Collateralized Lines of Cred
Slide 21: Loan Composition
Loan Composition 21As of June 30, 2025 For the Period Ending Variance $ in thousands 6/30/2025 3/31/2025 6/30/2024 Quarter Year Commercial Real Estate $ 2,000,766 $ 1,915,863 $ 1,801,397 $ 84,903 $ 199,369 Commercial and Industrial 221,880 234,024 240,611 (12,144) (18,731) Residential Mortgages 814,
Slide 22: Loan Portfolio Repricing & Index
Loan Portfolio Repricing & Index 2Q2025 22As of June 30, 2025 Loan Portfolio by Rate Type Fixed $1,361 36% Floating $947 25% Variable $1,439 Loan Portfolio by Rate Index Type Fixed $1,361 36% SOFR $540 Prime $412 11% Treasury $1,434 38% $3.7B $3.7B 1Floating Rate Loans are defined as loans with cont
Slide 23: Top Ten Relationships (Total Commitment)
Top Ten (10) Relationships (Total Commitment) 23As of June 30, 2025 For the Periods Ending Change % of Gross Loans % of RBC $ in thousands 6/30/2025 12/31/2024 1. Hospitality, Agriculture & Energy $ 235,542 $ 251,982 $ (16,440) 6.29 % 46.34 % 2. Multifamily 58,741 58,871 (130) 1.57 % 11.56 % 3. Offi
Slide 24: Bond Portfolio
Bond Portfolio 24As of June 30, 2025 June 30, 2025 December 31, 2024 $ in thousands Amortized Cost Net Unrealized (Losses)/ Gains Fair Value Amortized Cost Net Unrealized (Losses)/ Gains Fair Value U.S. Government Agency Securities $ 23,405 $ (507) $ 22,898 $ 27,634 $ (684) $ 26,950 Residential Mort
Slide 25: Deposit Composition
Deposit Composition 25As of June 30, 2025 For the Period Ending Variance $ in thousands 6/30/2025 3/31/2025 6/30/2024 Quarter Year Lifetime Free Checking $ 635,192 $ 631,714 $ 653,296 $ 3,478 $ (18,104) Interest-Bearing Demand 805,013 794,059 565,465 10,954 239,548 Money Market 544,764 528,381 500,4
Slide 26: Deposit Mix: Past, Present, Future
As of Month XX, XXXX Past Present Future Deposit Mix - 12/31/2017 Deposit Mix - 06/30/2025 Deposit Mix - Target Deposits 26 Goal is to enhance and diversify funding sources with a focus on lower cost/core relationships (both retail and commercial): •Deposits currently stand at $4.2B •CD Portfolio ($
Slide 27: Asset Quality
Asset Quality SECTION 03
Slide 28: Asset Quality
Asset Quality 28As of June 30, 2025 $236 $4, $1, $10 2Q20251 Nonperforming Loan Breakdown YE 2021 YE 2022 YE 2023 YE 2024 Q2 2025 NPL CRE $ 3 $ 2 $ 1 $ 1 $ 10 C&I 1 — — 1 1 Res. Mtg. 1 1 4 5 4 Other Consumer 2 4 — — — Construction — — 3 — — Other — — 302 252 236 Total NPL $ 7 $ 7 $ 310 $ 259 $ 251 1
Slide 29: Delinquency Trends
Delinquency Trends 29As of June 30, 2025 Past Due Loans / Total Portfolio Loans 0.06% 0.15% 0.17% 0.13% 0.43% 0.05% 0.08% 0.16% 0.13% 0.42% 0.01% 0.07% 0.01% 0.01% $1,670 $4,837 $6,032 $4,828 $16,248 30-59 Days PD 60-89 Days PD Total PD Amt YE 2021 YE 2022 YE 2023 YE 2024 Q2 2025 —% 0.06% 0.12% 0.18
Slide 30: Delinquency Trends
Delinquency Trends 30 As of June 30, 2025 Delinquency Trends $16,248 0.43% $250,581 6.69% $3,480,292 92.88% 30-89 Days Past Due NPL Current June 30, 2025 $ in thousands Current 30-89 Days Past Due NPL Total Portfolio Loans Commercial Real Estate $ 1,983,106 $ 8,047 $ 9,613 $ 2,000,766 Commercial and
Slide 31: Nonperforming Relationships
Nonperforming Relationships 31As of June 30, 2025 Nonaccrual Balance Change Comments $ in thousands 6/30/2025 12/31/2024 1. Other $ 235,542 $ 251,982 $ (16,440) Other 2 CRE 9,495 — 9,495 Commercial Property 3. Residential Construction 2,018 2,053 (35) Residential Construction 4. Commercial & Industr
Slide 32: Loan Portfolio - Risk Ratings
Loan Portfolio - Risk Ratings 32As of June 30, 2025 Portfolio Credit Quality Trend $2,812 $3,149 $3,506 $3,625 $3,747 $2,616 $2,992 $3,192 $3,351 $3,489 $186 $142 $310 $267 $255 93.0% 95.0% 91.1% 92.4% 93.1% Pass Substandard Special Mention % of Pass to Total YE 2021 YE 2022 YE 2023 YE 2024 Q2 2025
Slide 33: Net Charge-offs & Provision Expense
Net Charge-offs & Provision Expense 33As of June 30, 2025 ACL Composition & ACL Coverage Ratio $95,939 $93,852 $97,052 $75,600 $71,023 $94,974 $93,183 $42,738 $44,895 $46,582 $965 $669 $54,314 $30,705 $24,441 3.41% 2.98% 2.77% 2.09% 1.90% General Reserves Individually Evaluated Loan Reserves ACL to
Slide 34: Deposit Mix
Deposit Mix SECTION 04
Slide 35: Deposits
Deposits 35As of June 30, 2025 Total Deposit Composition $3,698 $3,633 $3,722 $4,153 $4,222 $748 $706 $685 $634 $635 $2,950 $2,927 $3,037 $3,519 $3,587 Noninterest-bearing deposits Interest-bearing deposits YE 2021 YE 2022 YE 2023 YE 2024 Q2 2025 $— $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,
Slide 36: Net Interest Income & NIM
Net Interest Income & NIM 0.57% 0.50% 1.73% 2.41% 2.25%3.41% 4.01% 4.60% 4.99% 5.01% 2.84% 3.51% 2.87% 2.58% 2.76% Total Cost of Funds Yield on Interest-earning Assets Net Interest Margin YE 2021 YE 2022 YE 2023 YE 2024 YTD Q2 2025 Net Interest Income 36As of June 30, 2025 $252 Avg. Earning Assets &
Slide 37: Commercial Loans
Commercial Loans SECTION 05
Slide 38: CRE Segment Overview
CRE Segment Overview 38As of June 30, 2025 $252 Total CRE: $2,656.3 Total CRE, excluding "Other": $2,496.8 1 Other CRE & Other Commercial Segments include, but are not limited to, Special / Limited Use, Church, Mobile Home Park, Gas Station, Self-Storage Facilities & Auto Shops 2 Includes restaurant
Slide 39: Hospitality Metrics
Hospitality Metrics 39As of June 30, 2025 $252 • Total portfolio balance $367.0M • Geographic diversification (see map) • Mean loan size in portfolio $6.5M1 • Median of loans in portfolio $4.3M1 • The largest loan in portfolio $51.6M1 • 18.81% are under construction1 • Top 10 borrowers make up 44.62
Slide 40: Hospitality Metrics
Hospitality Metrics 40As of June 30, 2025 $ in thousands Category Hospitality Portfolio Balance Percentage of Total Balance Hospitality Commitment Balance Weighted Avg. Commitment LTV Avg. GL Balance Size Avg. of Debt per Key - Total Commitment Hilton $ 121,853 33.2 % $ 171,213 60.4 % $ 7,616 $ 118
Slide 41: Multifamily Metrics
Multifamily Metrics 41As of June 30, 2025 $252 • Total portfolio balance $433.9M • Geographic diversification (see map) • Mean loan size in portfolio $4.1M1 • Median of loans in portfolio $312K1 • The largest loan in portfolio $27.0M1 • 37.49% are under construction1 • Top 10 borrowers make up 53.04
Slide 42: Multifamily Metrics
Multifamily Metrics 42As of June 30, 2025 $252 Category Multifamily Portfolio Balance Percentage of Total Balance Multifamily Commitment Balance Weighted Avg. Commitment LTV Avg. GL Balance Size Avg. of Debt per Door - Total Commitment Multifamily $ 357,645 82.4 % $ 451,134 50.1 % $ 5,677 $ 113 Stud
Slide 43: Retail Metrics
Retail Metrics 43As of June 30, 2025 $252 4.22 RISK RATING LTV DEBT/SQ FT 57.0% $133 AVERAGE • Total portfolio balance $489.5M** • Geographic diversification (see map) • Mean loan size in portfolio $3.1M1 • Median of loans in portfolio $1.4M1 • The largest loan in portfolio $27M1 • 13.12% are under
Slide 44: Retail Metrics
Retail Metrics 44As of June 30, 2025 $252 Category Retail Portfolio Balance Percentage of Total Balance Retail Commitment Balance Weighted Avg. Commitment LTV Avg. GL Balance Size Avg. of Debt per Square Ft- Total Commitment Anchored Strip Centers $ 259,253 53.0 % $ 261,979 58.8 % $ 5,401 $ 118 Unan
Slide 45: Office Metrics
Office Metrics 45As of June 30, 2025 $252 • Total portfolio balance $229.2M • Geographic diversification (see map) • Mean loan size in portfolio $1.94M1 • Median of loans in portfolio $405K1 • The largest loan in portfolio $23.1M1 • 3.70% are under construction1 • Top 10 borrowers make up 56.69% of
Slide 46: Office Metrics
Office Metrics 46As of June 30, 2025 $ in thousands $252 Category Office Portfolio Balance Percentage of Total Balance Office Commitment Balance Avg. GL Balance Size Avg. of Debt per Square Ft- Total Commitment General Office Space $ 196,942 85.9 % $ 211,673 $ 2,141 $ 124 Medical Offices 24,805 10.8
Slide 47: Non-GAAP Reconciliation
Non-GAAP Reconciliation SECTION 06
Slide 48: Non-GAAP Statement
Non-GAAP Statement 48As of June 30, 2025 Statements in this exhibit include non-GAAP financial measures and should be read along with the accompanying tables in our definitions and reconciliations of GAAP to non-GAAP financial measures. Management uses, and this exhibit references, the adjusted NPL/
Slide 49: Non-GAAP Reconciliation
Non-GAAP Reconciliation 49As of June 30, 2025 $252 Quarter-to-Date Adjusted Net Interest Income (FTE) (Non-GAAP) 2Q 2025 1Q 2025 2Q 2024 (Dollars in Thousands) Interest Income (FTE) (Non-GAAP) Interest and Dividend Income (GAAP) $ 57,747 $ 56,007 $ 54,583 Tax Equivalent Adjustment 3 171 178 197 Inte
Slide 50: Non-GAAP Reconciliation
Non-GAAP Reconciliation 50 3 Computed on a fully taxable equivalent basis ("FTE") using a 21% federal income tax rate for the 2025 and 2024 periods. 5 The gain on BOLI death benefit is tax-exempt. $252 Quarter-to-Date Adjusted Efficiency Ratio (Non-GAAP) 2Q 2025 1Q 2025 2Q 2024 (Dollars in Thousands
Slide 51: Non-GAAP Reconciliation
Non-GAAP Reconciliation 51As of June 30, 2025 $252 The adjusted book value ratio excludes accumulated other comprehensive loss ("AOCL") and adds back the other segment reserve release, net of tax. The Company believes this adjusted measure enables investors to assess the Company's capital levels and
Slide 52: Non-GAAP Reconciliation
Non-GAAP Reconciliation 52As of June 30, 2025 $252 Adjusted Nonperforming Loans ("NPL") to Total Portfolio Loans (Non-GAAP) June 30, 2025 (Dollars in Thousands) Adjusted NPLs (Non-GAAP) Total NPL $ 250,581 Less: Bank's Largest Lending Relationship 235,542 Total NPL, excluding Bank's Largest Lending