Carter Bankshares (CARE) investor relations material

Executive summary

• Achieved net income of $28.9M for Q2 2026 and $114.7M for H1 2026, driven by major nonrecurring gains from a loan sale and insurance transaction totaling $100.9M.

• Completed sale of largest nonperforming loan relationship and insurance group membership, improving asset quality and capital position.

• Strategic repositioning of the securities portfolio resulted in a $12.5M pre-tax loss but is expected to enhance future earnings and asset yields.

• Reinstated quarterly cash dividend and executed a $10M share repurchase program, repurchasing $2.9M in shares in 2Q2026.

• Opened a regional loan office in Greenville, SC, and expanded into South Carolina.

Financial highlights

• Net interest income rose to $40.0M in Q2 2026, up 11.2% from Q1 2026 and 23.5% year-over-year.

• Net interest margin improved to 3.40% in Q2 2026 from 3.08% in Q1 2026 and 2.82% in Q2 2025.

• Noninterest income surged to $28.7M in Q2 2026, reflecting a $65M gain on loan sale and $35.9M gain on insurance transaction, offset by $12.5M securities loss.

• Adjusted net income was $11.6M, up $3.0M sequentially and $2.3M year-over-year; diluted EPS was $1.31, down $2.57 sequentially but up $0.94 year-over-year.

• Shareholders’ equity increased $119.4M to $539.1M, driven by earnings and improved OCI.

Outlook and guidance

• Strategic focus on investing in people, technology, and infrastructure to drive sustainable growth and operational excellence.

• Portfolio repositioning and redeployment of liquidity are expected to enhance future net interest income and asset yields.

• Management anticipates continued focus on prudent growth, capital optimization, and risk management.

• Deposit mix targeted to further reduce reliance on CDs and increase lower-cost, core relationships.

• Anticipates continued loan growth, especially in small business and commercial/industrial lending, with a healthy pipeline for the next 12–18 months.