Second Quarter 2025 Presentation

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Table of Contents

S D B T I O N

A e R a e W R f

Company History

Completed the acquisition of two First Reliance Bank North Carolina branches

-

Two Corporate Office Expansions in Winston-Salem and Gastonia, North Carolina

-

71.0% of Loan Production funded at a weighted average rate of 6.82% YTD 2025, with Construction loans of approximately $450M funding over the next 12-18 months.

_

Strong Deposit Growth of 8.8% compared to Q2'24

-

Strong Available Liquidity Position -

Diversified and Granular Deposit base, approximately 78.0% Retail Customers

$4.8B

Assets

-

$3.7B

Loans

-

$4.2B

Deposits

HQ

Martinsville, Virginia

-

64

Branches

-

10

Corporate Centers

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 2020

Carter Bank & Trust charter established in 2006 with the merger of ten banks

Carter Bankshares, Inc. holding company established in Q4 2020 with the assets of Carter Bank & Trust

2024

Carter Bankshares, Inc. unveiled a new logo and a refreshed visual brand identity to reflect

our revitalized focus

As of June 30, 2025

5

Regional Footprint

Charlottesville

51 Total Branches in Virginia

-

Total VA Deposits $3.7B

13 Total Branches in North Carolina

-

Total NC Deposits $0.5B

Map Key

VIRGINIA

Winston-Salem

Roanoke

Martinsville

Greensboro

Lynchburg

Raleigh

Corporate Headquarters

Regional Offices

Branches

Gastonia

N. CAROLINA

Charlotte

As of Month XX,

XXXX

6

Leadership Team

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 Resources Officer 13 years in Industry

6 years at the Bank

Jane Ann Davis

Executive Vice President Chief Administrative Officer 41 years in Industry

41 years at the Bank

Tony Kallsen

Senior Executive Vice President

Chief Credit Risk Officer 34 years in Industry

7 years at the Bank

Litz Van Dyke

Chief Executive Officer 40 years in Industry

9 years at the Bank

Bradford Langs

President

Chief Strategy Officer 39 years in Industry 8 years at the Bank

Wendy Bell

Senior Executive Vice President Chief Strategy Officer

41 years in Industry 8 years at the Bank

Joyce Parker

Executive Assistant 39 years in Industry 35 years at the Bank

Chrystal Parnell

Executive Vice President Chief Marketing & Communications Officer 22 years in Industry

3 years at the Bank

Matt Speare

Senior Executive Vice President

Chief Operations Officer 23 years in Industry

8 years at the Bank

Rich Spiker

Senior Executive Vice President

Chief Lending Officer 36 years in Industry 7 years at the Bank

Charlie Sword

Senior Vice President Internal Audit Director 19 years in Industry

4 years at the Bank

7

Nurturing relationships

and rewarding customers, associates, and shareholders.

Rewarding Relationships

Customers

Regulators

Community

Associates

Investors

As of Month XX,

XXXX

As of June 30, 2025

9

Corporate & Social Responsibility

For the 6th year in a row, the bank celebrated National Financial Literacy Month by sponsoring the Chancellor Lions Club's Big Oink contest in Fredericksburg, VA.

This annual event encourages contestants from ten age groups, including an adult division, to make a "piggy bank with personality" out of any material in an effort to promote money management and savings.

The bank partnered with the Montgomery County Chamber of Commerce (VA) to award complimentary chamber memberships to four minority-owned businesses.

The investment is part of a continued effort to provide opportunity to underserved communities.

Congratulations to the 2025 recipients: Ride-A-Rescue, ITT Cleaning, Anjalia Productions, and MVEE Creations & More.

The Facilities team engaged a local small business' herd of goats to transform a roughly 5-acre wooded area at the bank's headquarters that had become overgrown. This economical and environmentally friendly move also had an 'agri-tainment' factor enjoyed by our Associates.

As of June 30, 2025

10

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 in Virginia & North Carolina including Fast Growing Markets such as Charlottesville, Charlotte, Greensboro, Roanoke, Raleigh, and Winston-Salem.

    Conservative Credit Culture

• Well-reserved with our other segment reserve for the largest lending relationship

• Excluding the largest lending relationship, credit quality remains strong and underwriting remains conservative

  Executing Strategic Objectives

• Investments in Human Capital, Brand & Culture, Technology, Loan & Deposit Diversification, Customer Experience, and Safety & Soundness should provide operational leverage and growth going forward

As of Month XX,

XXXX

As of June 30, 2025

11

Strategic Initiatives

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 exceptional service and build long-lasting relationships with customers. We will continue to build upon this differentiation with exceptional experiences, strong relationships, and community impact by investing in ways to improve the customer experience and gain operational efficiencies.

Grow Responsibly - Provide Exceptional Experience - Gain Operational Efficiency

Invest

Enhance

Expand

We will invest in human capital strategies to enhance the associate experience. We will continue to drive efficiency and process improvement across all levels of the organization, leveraging technology and automation. We will make significant investments in the new brand strategy working on updating and enhancing the image and reputation of the Bank.

We will focus on initiatives around enhancing technology, operations, customer experience, C&I, CRA, ESG, DEI, channel delivery, and product development. From a risk management perspective, we will strengthen change management systems and leverage the Board's ERM Committee.

We will continue strategies to deepen existing relationships and acquire new relationships in current markets. We will focus on increasing market share in target growth markets. We will focus on expanding through organic growth and opportunistic acquisition.

As of Month XX,

XXXX

As of June 30, 2025

12

Expansion

Completed purchase of two North Carolina branches from First Reliance Bank

Overview

$56M

Deposits

10

Associates

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 Winston-Salem, North Carolina, from First Reliance Bank (the "Branch Purchase"). In the Branch Purchase the Bank acquired $55.9 million of deposits, as well as cash, personal property and other fixed assets related to the branch locations purchased, and welcomed 10 new associates to its team. The Branch Purchase did not include any loans.

As of June 30, 2025

13

Safety & Soundness

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 Charge-offs/Portfolio Loans (YTD)

0.75%

ROA (YTD)

-

8.85%

ROE (YTD)

-

2.76%

NIM (FTE) (YTD)3

-

77.06%

Adjusted Efficiency Ratio (YTD)3

$1.4B

Total Liquidity Sources

-

10.26%

Highly Liquid Assets/Total Assets

-

62.74%

Highly Liquid Assets/Uninsured Deposits

-

179.62%

Total Available Liquidity/Uninsured Deposits

10.40% without the largest NPL relationship, see non-GAAP reconciliation

21.26% without the largest NPL relationship, see non-GAAP reconciliation

3Non-GAAP Financial measure - see Non-GAAP reconciliation

As of June 30, 2025

14

S D B T I O N

7 W ] M ] P W M Z

Balance Sheet & Income Statement

As of June 30, 2025

16

Financial / Shareholder Ratios

1Non-GAAP Financial measure - see Non-GAAP reconciliation

As of June 30, 2025

17

Financial Performance Trends

$32,215

73.51%

60.67%

80.95% 77.06%

72.54%

1

2021 2022 2023 2024 YTD 2Q2025

2021 2022 2023 2024 YTD 2Q2025

1.21%

0.76%

0.75%

8.48%

8.25%

7.78%

9.86%

0.53% 0.54%

2021 2022 2023 2024 YTD 2Q2025

7.82%

2021 2022 2023 2024 2Q2025

1 Net Income for the six months ended June 30, 2025 is YTD annualized

2Non-GAAP Financial Measure - see Non-GAAP reconciliation

As of June 30, 2025

18

Carter Bankshares

Regulatory Well Capitalized

Actual

Excess ($) (In Thousands)

Excess ($)

Excludes Impact Excludes Impact of Large NPL of Large NPL

(In Thousands)

Capital Management

• Focus on maintaining a strong regulatory capital position in excess of regulatory thresholds.

• Ensure capital levels are commensurate with the Company's risk profile and strategic plan objectives.

• As of June 30, 2025 we purchased 547,332 shares of common stock under 2025 Program, effective May 1, 2025 at a total cost $9.1 million at an average cost per share of $16.70.

  Critically Undercapitalized Category

  Capital Conservation Buffer

  >= 2.5% composed

  of CET 1

  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%	191,844
  Total Risk-based Capital Ratio	10.00%	12.12%	88,971	13.97%	161,570
  Leverage Ratio	5.00%	9.46%	214,884	10.75%	277,031

  Tangible equity to total assets ≤ 2%

  Actual ($) 06/30/25

  Cumulative AOCL Impact 06/30/25

  Other Segment Reserve Impact 06/30/251

  REGULATORY CAPITAL

  10.87%

  12.12%

  9.46%

  TIER 1

  TOTAL

  LEVERAGE

  Book Value per Common Share $ 17.89 $ (2.31) $ (0.85)

  Adjusted Book Value2

  $

  21.05

  (3.16)

  $

  
  
  
  
  
  

  1Non-GAAP Financial measure - see Non-GAAP reconciliation

  2During 2024 and 2025, $30.3 million of the other segment reserve released from the $66.4 million of curtailment payments and a decline in reserve rate from 17.99% to 10.18% which resulted in a $1.08 per share increase in book value. Included in the total reserve release is $15.0 million related to the Other segment of the loan portfolio that was charged off during the third quarter of 2024.

  As of June 30, 2025

  19
  
  

  Liquidity

  $ in thousands June 30, 2025 December 31, 2024 Change

Continue to maintain a strong liquidity position:

1Other loans include unique risk attributes considered inconsistent with our current underwriting standards.

2Total Portfolio Loans is net of loans held-for-sale and Loan Portfolio Segments are sourced from Fed. Call Codes (RC-C).

3$ in millions

As of June 30, 2025

21

Loan Portfolio Repricing & Index 2Q2025

Loan Portfolio by Rate Type Loan Portfolio by Rate Index Type

Floating 3

$947 25%

$3.7B

Variable 3

$1,439 39%

Fixed 3

$1,361 36%

Prime 3

$412 11%

Treasury 3

$1,434 38%

SOFR 3

$540 15%

$3.7B

Fixed 3

$1,361 36%

1Floating Rate Loans are defined as loans with contractual interest rate terms that allow the loan to reprice at least once each month.

2Variable Rate Loans are defined as loans with contractual interest rate terms that allow the loan to reprice at least once during the life of the loan agreement, but not more frequently than once per quarter.

3$ in millions

As of June 30, 2025

22

Top Ten (10) Relationships (Total Commitment)

As of June 30, 2025

23

Bond Portfolio

U.S. Government

Agency Securities $ 23,405 $ (507) $ 22,898 $ 27,634 $ (684) $ 26,950

Commercial Mortgage-Backed

Securities 24,987 (390) 24,597 22,233 (646) 21,587

• The bond portfolio is 100% available-for-sale.

  $ in thousands

  June 30, 2025

  Net Unrealized

  Amortized (Losses)/

  Cost Gains Fair Value

  Amortized Cost

  December 31, 2024 Net

  Unrealized

  (Losses)/

  Gains Fair Value

• Our portfolio consists of 45.1% of securities issued by United States government sponsored entities and carry an implicit government guarantee.

• States and political subdivisions comprise 30.3% of the portfolio and are largely general obligation or essential purpose revenue bonds, which have performed very well historically over all business cycles, and are rated AA and AAA.

  Residential Mortgage-Backed Securities

  105,587

  (8,322)

  97,265

  106,593

  (10,440)

  96,153

• At June 30, 2025, the Company held 58.2% fixed rate and 41.8% floating rate securities.

• The material improvement in unrealized losses was largely due to bond maturities, amortizations and lower intermediate-term interest rates.

  Other Commercial Mortgage-Backed Securities

  31,004

  (1,426)

  29,578

  24,064

  (2,094)

  21,970

  Collateralized Mortgage Obligations

  181,303

  (8,711)

  172,592

  158,610

  (10,022)

  148,588

  • Shorter maturity profile with an average life of 5.03 years; less interest rate risk with an effective duration of 3.78; and higher than peer book yield of 3.38%

  Asset Backed Securities

  122,292

  (7,186)

  115,106

  127,978

  (9,457)

  118,521

  Muni 30%

  CMO 23%

  SBA 5%

  ABS 6%

  Corporate 8%

  CMBS 13%

  MBS 14%

  Total Debt Securities

  Agencies 1%

  $

  821,906

  $

  (66,694)

  $

  755,212

  $

  800,741

  $

  (82,341)

  $

  718,400

  As of June 30, 2025

  24

  
  
  

• Securities comprise 15.8% of total assets at June 30, 2025.

  States and Political Subdivisions	262,578	(33,410)	229,168	262,879	(41,698)	221,181
  Corporate Notes	70,750	(6,742)	64,008	70,750	(7,300)	63,450

  
  
  

  Deposit Composition

  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	500,475	16,383	44,289
  Savings	343,659	353,394	399,833	(9,735)	(56,174)
  Certificates of Deposits	1,893,611	1,893,379	1,762,232	232	131,379

  • Total deposits increased $340.9M YoY

  • Diversified and granular deposit base, approximately 78.0% Retail Customers

  • Approximately 81.5% of Deposits, including Collateralized Muni deposits are FDIC Insured

  • Partnership with IntraFi for available coverage over $250K FDIC insured limit

Total Deposits Composition1

DDA Int. Free 15%

$3,633

$2,927

$3,722

$3,037

$4,153

$3,519

$4,222

$3,587

DDA Int. Bearing 19%

CDs

45%

MMA 13%

Savings 8%

$748

YE 2021

$706

YE 2022

$685

YE 2023

$634

YE 2024

Interest-bearing Deposits

$635

Q2 2025

Noninterest-bearing Deposits

$3,698

$2,950

1Period end balances at, $ in millions

As of June 30, 2025

25

Deposits

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 ($1.9B) is relatively short with 77.8% of the retail portfolio scheduled to mature within 12 months and 97.6% of the retail portfolio scheduled to mature within 24 months, allowing for opportunities to lower deposit costs quickly when short term rates begin to ease

• Multiple strategies are in place to grow all non maturity deposit accounts with a focus on lower cost of funds

• Established product road map and working to expand deposit offerings for retail and commercial customers

As of Month XX,

XXXX

Deposit Mix - 12/31/2017

Deposit Mix - 06/30/2025

Deposit Mix - Target

DDA - Int. Free

14%

DDA - Int.

Bearing

7%

DDA - Int. Free 15%

DDA - Int. Bearing 19%

DDA - Int. Free

25%

DDA - Int.

Bearing

10%

MMA 15%

MMA 3%

CDs

56%

MMA 13%

Savings

20%

CDs

45%

Savings

20%

Savings 8%

CDs

30%

As of June 30, 2025

26

Past Present Future

S D B T I O N

2 b b R c C d M Z W c h

Asset Quality

Nonperforming Loan Breakdown

Nonperforming Loans / Total Portfolio Loans

251

6.69%

3,496

259

7.15%

3,366

8.83%

$3,506 $3,625 $3,747

YE YE YE YE 1Q21

2Q20251

$3,149

NPL

2021 2022 2023 2024 2025

$236

$2,812

$ 3 $ 2 $ 1 $ 1 $ 10

1 - - 1 1

1 1 4 5 4

2 4 - - -

- - 3 - -

- - 302 252 236

Total NPL $ 7 $ 7 $ 310 $ 259 $ 251

$4, $1, $10

3,196

2,805

3,142

0.26% 7

7 0.21%

310

YE 2021 YE 2022 YE 2023 YE 2024 Q2 2025

Nonperforming Loans Performing Loans Nonperforming Loans/ Total Portfolio Loans

Nonperforming Assets

Q2 20251

Delinquency / Portfolio Loans

3,625

2,812

3,506

YE YE

1 1

3,747

YE YE Q2

$251

3,149

NPA

2021 2022

2023 2024 2025

0.43%

$ 7 $ 7 $ 310 $ 259 $ 251

11 8 2 1 1

0.15%

0.17%

0.13%

5

Total NPA $ 18 $ 15 $ 312 $ 260 $252

0.06%

2

5

6

16

$1

YE 2021 YE 2022 YE 2023 YE 2024 Q2 2025

Delinquency Portfolio Loans Delinquency / Portfolio Loans

1The Company placed commercial loans in the Other segment of the Company's loan portfolio, relating to the Bank's largest credit relationship, which has a current principal balance of $235.5 million in nonaccrual status due to loan maturities and failure to pay in full during the second quarter of 2023.

$ in millions

As of June 30, 2025

28

Delinquency Trends

0.43$%16,248 1

0.17%

0.15%

0.13%

0.06%

$1,670 0.05%

0.01%

0.08%

0.13%

$4,828

0.07%

$4,837

0.16%

$6,032

0.01%

0.42%

0.01%

0.48%

Past Due Loans / Total Portfolio Loans

$18,000

0.42%

$15,000

0.36%

$12,000

0.30%

0.24% $9,000

0.18%

$6,000

0.12%

0.06%

$3,000

-% $-

YE 2021 YE 2022 YE 2023 YE 2024 Q2 2025

30-59 Days PD 60-89 Days PD Total PD Amt

$'s in thousands

1Portfolio loans past due 30 to 89 days increased $11.4 million to $16.2 million at June 30, 2025 compared to $4.8 million at December 31, 2024. The increase is primarily attributable to

$8.2 million of loan maturities without completion of the internal extension process as of June 30, 2025, which are primarily in commercial real estate. Also contributing to the increase are several credits in residential mortgages with four credits totaling $2.4 million and an additional credit of $4.5 million in the construction segment.

As of June 30, 2025

29

Delinquency Trends

$16,248 0.43%

$250,581 6.69%

$3,480,292 92.88%

June 30, 2025

30-89 Days Past Due NPL Current

1Represents the Bank's largest lending relationship with a current principal balance of $235.5 million placed on nonaccrual status during the second quarter of 2023. Note: Other Real Estate Owned was $1.7 million as of June 30, 2025.

Note: Peers include AROW, BHB, CFFI, CCBG, CHCO, CCNE, CTBI, FCBC, GSBC, HTB, MPB, MVBF, ORRF, PFIS, FRST, RBCA.A, SHBI, SMBK, SYBT, UVSP, WASH, BHRB, THFF, PEBO

As of June 30, 2025

30