Carter Bankshares, Inc. · NASDAQ:CARE
Carter Bankshares — Q4 2024 Earnings Presentation
52 slides from Carter Bankshares's earnings presentation, Jan 28, 2025
Slide 1: Investor Presentation Fourth Quarter and Year Ended 2024
Investor Presentation Fourth Quarter and Year Ended 2024 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 December 31, 2024 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. ho
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 53 Total Branches in Virginia – Total VA Deposits $3.7B 12 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 41 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 Resourc
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 December 31, 2024
Slide 10: Corporate & Social Responsibility
Corporate & Social Responsibility 10As of December 31, 2024 4,200 Volunteer Community Service Hours – 61 Nonprofits Supported by Associates Serving on Boards & Committees – $292,902 Charitable Donations & Sponsorships to Nonprofits – 84 Financial Education Classes Facilitated for 1,579 Students – 78
Slide 11: Investment Highlights
As of Month XX, XXXX Investment Highlights Strong Financial Performance • Strong Liquidity & Capital Position • CET1 of 10.88% • ͏͏ACL coverage of 2.09% • ͏͏$1.4B of total available liquidity • ͏͏182.6% total available liquidity/ uninsured deposits Attractive Markets & Customers • Well Positioned in
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 from First Reliance Bank
13As of December 31, 2024 Expansion Purchase of two North Carolina branches from First Reliance Bank On December 10, 2024, Carter Bankshares entered into a definitive Purchase and Assumption Agreement with First Reliance Bancshares under which Carter Bank will acquire deposits and locations associat
Slide 14: Safety & Soundness
Safety & Soundness 14As of December 31, 2024 Capital Asset Quality Earnings 10.88% Common Equity Tier 1 Ratio (CET1) – 12.13% Total Risk-based Capital Ratio – 9.56% Leverage Ratio – $16.66 Book Value 0.13% Delinquency/Portfolio Loans – 7.15% NPL/Portfolio Loans1 – 2.09% ACL/Portfolio Loans2 – 0.46%
Slide 15: Financial Highlights
Financial SECTION 02
Slide 16: Balance Sheet & Income Statement
Balance Sheet & Income Statement 16As of December 31, 2024 Operational Results 4Q 2024 3Q 2024 QTD Q/Q Change $ 4Q 2023 QTD Y/Y Change $ YE 2024 YE 2023 YTD Change $ Net Interest Income $ 29,148 $ 28,798 $ 350 $ 27,420 $ 1,728 $ 114,457 $ 122,310 $ (7,853) (Recovery) Provision for Credit Losses (5,1
Slide 17: Financial / Shareholder Ratios
Financial / Shareholder Ratios 17As of December 31, 2024 Shareholder Ratios 4Q 2024 3Q 2024 QTD Q/Q Change % 4Q 2023 QTD Y/Y Change % YE 2024 YE 2023 YTD Change % Diluted Earnings (Loss) Per Share (QTD & YTD) $ 0.36 $ 0.24 $ 0.12 $ (0.08) $ 0.44 $ 1.06 $ 1.00 $ 0.06 Financial Ratios Return on Avg As
Slide 18: Financial Performance Trends
Financial Performance Trends 18As of December 31, 2024 Net Income, in thousands $(45,858) $31,590 $50,118 $23,384 $24,523 2020 2021 2022 2023 2024 Adjusted Efficiency Ratio 75.20% 73.51% 60.67% 72.54% 80.95% 2020 2021 2022 2023 2024 ROA (1.12)% 0.76% 1.21% 0.53% 0.54% 2020 2021 2022 2023 2024 TCE 10
Slide 19: Capital Management
Carter Bankshares Regulatory Well Capitalized Actual Excess ($) (In Thousands) Excludes Impact of Large NPL Excess ($) Excludes Impact of Large NPL (In Thousands) Common Equity Tier 1 Ratio ("CET 1") 6.50 % 10.88% $ 180,570 12.51 % $ 240,332 Tier 1 Risk-based Ratio 8.00 % 10.88% 118,663 12.51 % 180,
Slide 20: Liquidity
Liquidity 20As of December 31, 2024 $ in thousands December 31, 2024 December 31, 2023 Change Cash and Due From Banks, including Interest-bearing Deposits $ 131,171 $ 54,529 $ 76,642 FHLB Borrowing Availability1 735,294 480,266 255,028 Unsecured Lines of Credit 30,000 50,000 (20,000) Collateralized
Slide 21: Loan Composition
Loan Composition 21As of December 31, 2024 For the Period Ending Variance $ in thousands 12/31/2024 9/30/2024 12/31/2023 Quarter Year Commercial Real Estate $ 1,869,831 $ 1,857,997 $ 1,670,631 $ 11,834 $ 199,200 Commercial and Industrial 230,483 241,474 271,511 (10,991) (41,028) Residential Mortgage
Slide 22: Loan Portfolio Repricing & Index
Loan Portfolio Repricing & Index 4Q2024 22As of December 31, 2024 Loan Portfolio by Rate Type Fixed $1,291 36% Floating $921 25% Variable $1,413 39% Loan Portfolio by Rate Index Type Fixed $1,291 36% Sofr $517 14% Prime $412 11% Treasury $1,405 39% $3.6B $3.6B 1Floating Rate Loans are defined as loa
Slide 23: Top Ten Relationships (Total Commitment)
Top Ten (10) Relationships (Total Commitment) 23As of December 31, 2024 For the Periods Ending Change % of Gross Loans % of RBC $ in thousands 12/31/2024 12/31/2023 1. Hospitality, Agriculture & Energy $ 251,982 $ 301,913 $ (49,931) 6.95 % 50.32 % 2. Retail Real Estate & Food Services 58,871 15,000
Slide 24: Bond Portfolio
Bond Portfolio 24As of December 31, 2024 12/31/2024 12/31/2023 $ in thousands Amortized Cost Net Unrealized (Losses)/ Gains Fair Value Amortized Cost Net Unrealized (Losses)/ Gains Fair Value U.S. Government Agency Securities $ 27,634 $ (684) $ 26,950 $ 44,185 $ (358) $ 43,827 Residential Mortgage-B
Slide 25: Deposit Composition
Deposit Composition 25As of December 31, 2024 For the Period Ending Variance $ in thousands 12/31/2024 9/30/2024 12/31/2023 QUARTER YEAR Lifetime Free Checking $ 634,436 $ 628,901 $ 685,218 $ 5,535 $ (50,782) Interest-Bearing Demand 726,947 649,005 481,506 77,942 245,441 Money Market 512,162 504,206
Slide 26: Deposit Mix: Past, Present, Future
As of Month XX, XXXX Past Present Future Deposit Mix - 12/31/2017 Deposit Mix - 12/31/2024 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 December 31, 2024 $252 $5, $1, $1 YE 20241 Nonperforming Loan Breakdown YE 2020 YE 2021 YE 2022 YE 2023 YE 2024 NPL CRE $ 22 $ 3 $ 2 $ 1 $ 1 C&I 1 1 — — 1 Res. Mtg. 5 1 1 4 5 Other Consumer 4 2 4 — — Construction — — — 3 — Other — — — 302 252 Total NPL $ 32 $ 7 $ 7 $ 310 $ 259
Slide 29: Delinquency Trends
Delinquency Trends 29As of December 31, 2024 Past Due Loans / Total Portfolio Loans 0.22% 0.06% 0.15% 0.17% 0.13% 0.19% 0.05% 0.08% 0.16% 0.13% 0.03% 0.01% 0.07% 0.01% $6,404 $1,670 $4,837 $6,032 $4,828 30-59 Days PD 60-89 Days PD Total PD Amt YE 2020 YE 2021 YE 2022 YE 2023 YE 2024 —% 0.06% 0.12% 0
Slide 30: Delinquency Trends
Delinquency Trends 30 As of December 31, 2024 Delinquency Trends $4,828 0.13% $259,349 7.15% $3,360,649 30-89 Days Past Due NPL Current December 31, 2024 $ in thousands Current 30-89 Days Past Due NPL Total Portfolio Loans Commercial Real Estate $ 1,866,013 $ 2,642 $ 1,176 $ 1,869,831 Commercial and
Slide 31: Nonperforming Relationships
Nonperforming Relationships 31As of December 31, 2024 Nonaccrual Balance Change Comments $ in thousands 12/31/2024 12/31/2023 1. Other1 $ 251,982 $ 301,913 $ (49,931) Other 2. Residential Construction 2,053 2,090 (37) Residential Construction 3. Commercial & Industrial 1,026 — 1,026 Purchase Busines
Slide 32: Loan Portfolio - Risk Ratings
Loan Portfolio - Risk Ratings 32As of December 31, 2024 Portfolio Credit Quality Trend $2,947 $2,812 $3,149 $3,506 $3,625 $2,523 $2,616 $2,992 $3,192 $3,351 $238 $186 $142 $310 $267 $186 85.6% 93.0% 95.0% 91.1% 92.4% Pass Substandard Special Mention % of Pass to Total YE 2020 YE 2021 YE 2022 YE 2023
Slide 33: Net Charge-offs & Provision Expense
Net Charge-offs & Provision Expense 33As of December 31, 2024 ACL Composition & ACL Coverage Ratio $54,074 $95,939 $93,852 $97,052 $75,600 $38,824 $94,974 $93,183 $42,738 $44,895 $15,250 $965 $669 $54,314 $30,705 1.83% 3.41% 2.98% 2.77% 2.09% General Reserves Individually Evaluated Loan Reserves ACL
Slide 34: Deposit Mix
Deposit Mix SECTION 04
Slide 35: Deposits
Deposits 35As of December 31, 2024 Total Deposit Composition $3,685 $3,698 $3,633 $3,722 $4,153 $709 $748 $706 $685 $634 $2,976 $2,950 $2,927 $3,037 $3,519 Noninterest-bearing deposits Interest-bearing deposits YE 2020 YE 2021 YE 2022 YE 2023 YE 2024 $— $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500
Slide 36: Net Interest Income & NIM
Net Interest Income & NIM 0.94% 0.57% 0.50% 1.73% 2.41%3.74% 3.41% 4.01% 4.60% 4.99% 2.80% 2.84% 3.51% 2.87% 2.58% Total Cost of Funds Yield on Interest-earning Assets Net Interest Margin YE 2020 YE 2021 YE 2022 YE 2023 YE 2024 Net Interest Income 36As of December 31, 2024 $252 Avg. Earning Assets &
Slide 37: Commercial Loans
Commercial Loans SECTION 05
Slide 38: CRE Segment Overview
CRE Segment Overview 38As of December 31, 2024 $252 Total CRE: $2,545.6 Total CRE, excluding "Other": $2,369.6 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 restau
Slide 39: Hospitality Metrics
Hospitality Metrics 39As of December 31, 2024 $252 • Total portfolio balance $354.7M • Geographic diversification (see map) • Mean loan size in portfolio $6.2M1 • Median of loans in portfolio $4.2M1 • The largest loan in portfolio $51.6M1 • 16.33% are under construction1 • Top 10 borrowers make up 4
Slide 40: Hospitality Metrics
Hospitality Metrics 40As of December 31, 2024 $ 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 $ 117,167 33.0 % $ 157,842 60.7 % $ 7,811 $
Slide 41: Multifamily Metrics
Multifamily Metrics 41As of December 31, 2024 $252 • Total portfolio balance $391.9M • Geographic diversification (see map) • Mean loan size in portfolio $4.2M1 • Median of loans in portfolio $287K1 • The largest loan in portfolio $35.5M1 • 48.08% are under construction1 • Top 10 borrowers make up 5
Slide 42: Multifamily Metrics
Multifamily Metrics 42As of December 31, 2024 $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 $ 312,533 79.8 % $ 454,905 50.8 % $ 5,209 $ 113
Slide 43: Retail Metrics
Retail Metrics 43As of December 31, 2024 $252 4.26 RISK RATING LTV DEBT/SQ FT 56.4% $130 AVERAGE • Total portfolio balance $435.6M** • Geographic diversification (see map) • Mean loan size in portfolio $2.8M1 • Median of loans in portfolio $1.1M1 • The largest loan in portfolio $28M1 • 15.00% are un
Slide 44: Retail Metrics
Retail Metrics 44As of December 31, 2024 $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 $ 240,134 55.1 % $ 243,735 58.8 % $ 5,003 $ 119
Slide 45: Office Metrics
Office Metrics 45As of December 31, 2024 $252 • Total portfolio balance $229.4M • Geographic diversification (see map) • Mean loan size in portfolio $1.88M1 • Median of loans in portfolio $377K1 • The largest loan in portfolio $23M1 • 4.36% are under construction1 • Top 10 borrowers make up 57.56% o
Slide 46: Office Metrics
Office Metrics 46As of December 31, 2024 $ 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 $ 195,715 85.3 % $ 213,144 $ 2,082 $ 124 Medical Offices 25,325
Slide 47: Non-GAAP Reconciliation
Non-GAAP Reconciliation SECTION 06
Slide 48: Non-GAAP Statement
Non-GAAP Statement 48As of December 31, 2024 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
Slide 49: Non-GAAP Reconciliation
Non-GAAP Reconciliation 49As of December 31, 2024 $252 Quarter-to-Date Year-to-Date Adjusted Net Interest Income (FTE) (Non-GAAP) 4Q 2024 3Q 2024 4Q 2023 12/31/24 12/31/23 (Dollars in Thousands) Interest Income (FTE)(Non-GAAP) Interest and Dividend Income (GAAP) $ 56,502 $ 56,595 $ 51,863 $ 221,729
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 2024 and 2023 periods. $252 Quarter-to-Date Year-to-Date Adjusted Efficiency Ratio (Non-GAAP) 4Q 2024 3Q 2024 4Q 2023 12/31/24 12/31/23 (Dollars in Thousands) Noninterest Exp
Slide 51: Non-GAAP Reconciliation
Non-GAAP Reconciliation 51As of December 31, 2024 $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
Slide 52: Non-GAAP Reconciliation
Non-GAAP Reconciliation 52As of December 31, 2024 $252 Adjusted Nonperforming Loans ("NPL") to Total Portfolio Loans (Non-GAAP) December 31, 2024 (Dollars in Thousands) Adjusted NPLs (Non-GAAP) Total NPL $ 259,349 Less: Bank's Largest Lending Relationship 251,982 Total NPL, excluding Bank's Largest