Carter Bankshares, Inc. (CARE) reported a net income of $24.5 million, or $1.06 diluted earnings per share, for the year ended December 31, 2024, compared to $23.4 million, or $1.00 diluted earnings per share, for the year ended December 31, 2023. Net interest income decreased by $7.9 million (6.4%) to $114.5 million in 2024, primarily due to higher funding costs offsetting loan growth and higher yields. The provision for credit losses decreased by $10.5 million to a recovery of $5.0 million in 2024, compared to a $5.5 million provision in 2023, largely due to curtailment payments received and updated loan analysis. Total noninterest income increased by $3.1 million to $21.4 million, while total noninterest expense rose by $4.5 million to $110.0 million.
Significant changes compared to the previous year include a decrease in nonperforming loans by $50.2 million to $259.3 million (7.15% of total portfolio loans), primarily due to curtailment payments from the company's largest credit relationship. Total deposits increased by $431.5 million (11.6%) to $4.2 billion. The available-for-sale securities portfolio decreased by $60.6 million, representing 15.4% of total assets compared to 17.3% in the prior year. The company's portfolio loan-to-deposit ratio improved to 87.3% from 94.2%. The company also reported a decrease in FHLB borrowings to $70 million from $393.4 million, primarily due to deposit growth.
During 2024, Carter Bankshares unveiled a new brand identity and introduced a new set of guiding principles for its associates. The company is shifting its strategic focus from balance sheet restructuring to pursuing a prudent growth strategy, primarily through organic growth but also considering opportunistic acquisitions. The company entered into an agreement to acquire two branch facilities in North Carolina from First Reliance Bank, expected to close in the first half of 2025, pending regulatory approvals. The company also successfully resolved pending litigation with the Justice Entities, resulting in curtailment payments and the dismissal of lawsuits.
As of December 31, 2024, Carter Bankshares employed 680 full-time associates. The company hired 182 associates during fiscal year 2024, and its voluntary separation turnover rate was 12.3%. The company operates 65 branches across Virginia and North Carolina. The company's largest credit relationship, placed on nonaccrual status in the second quarter of 2023, had an aggregate principal balance of $252.0 million as of December 31, 2024. The company continues to monitor this relationship and its impact on collateral values and potential recoveries.
The company's outlook anticipates a shift towards prudent growth, focusing on organic growth and opportunistic acquisitions. However, the filing also highlights several risk factors, including those related to credit quality, market interest rates, cybersecurity, and regulatory compliance. The company acknowledges the uncertainties associated with these risks and their potential impact on future financial performance.
About Carter Bankshares, Inc.
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