Carter Bankshares Reports Mixed Q3 Results, Net Income Up 55% Year-Over-Year

Carter Bankshares, Inc. reported its financial results for the third quarter and nine months ended September 30, 2024, showing a mixed performance compared to the previous fiscal period. The company’s total assets increased to $4.6 billion, up from $4.5 billion at the end of 2023. Total deposits rose significantly by $363.2 million, or 13.0%, to $4.1 billion, driven by a notable increase in certificates of deposit, which grew by $343.4 million.

For the three months ended September 30, 2024, net income was $5.6 million, reflecting an increase from $3.6 million in the same period of 2023. Basic earnings per share rose to $0.24 from $0.16 year-over-year. However, net income for the nine months ended September 30, 2024, decreased to $16.2 million from $25.3 million in the prior year, indicating a decline in profitability over the longer term.

Net interest income for the third quarter was $28.8 million, a 5.1% increase from $27.4 million in the same quarter of 2023. The net interest margin improved slightly to 2.58% from 2.52%. However, for the nine-month period, net interest income fell to $85.3 million, down 10.1% from $94.9 million in 2023, primarily due to increased funding costs and the impact of nonperforming loans.

The company’s total portfolio loans increased by $90.0 million, or 3.4%, to $3.6 billion, with commercial real estate loans being a significant contributor to this growth. Nonperforming loans decreased to $287.7 million, down from $309.5 million at the end of 2023, largely due to curtailment payments from a major nonperforming relationship.

Carter Bankshares also reported a decrease in the allowance for credit losses, which fell to $80.9 million, or 2.25% of total portfolio loans, from $97.1 million, or 2.77%, at the end of 2023. The company’s capital position improved, with total shareholders' equity rising to $386.8 million, up $35.6 million from the previous period.

Strategically, the bank is focusing on organic growth and prudent acquisitions, while also managing its nonaccrual loans. The dismissal of a significant federal court lawsuit related to a major lending relationship has also positively impacted the bank's outlook. The company continues to refine its brand image and enhance its market position through a multi-year implementation plan.