Carter Bankshares (CARE) investor relations material

Executive summary

• Net income for Q2 2025 was $8.5 million and $17.5 million for the first half, up from $4.8 million and $10.6 million year-over-year, driven by higher net interest income and recoveries in credit losses.

• Net interest income increased 15.2% year-over-year to $32.4 million for Q2 2025, with net interest margin (FTE) rising to 2.82%.

• The company completed the acquisition of two North Carolina branches, adding $55.9 million in deposits and 10 associates.

• Announced a $20 million stock repurchase program, with $9.1 million (547,332 shares) repurchased by June 30, 2025.

• Nonperforming loans decreased by $8.8 million to $250.6 million, mainly due to curtailment payments on the largest credit relationship.

Financial highlights

• Total assets reached $4.8 billion, with portfolio loans up $122.3 million (6.8% annualized) and deposits up $68.8 million (3.3% annualized) since year-end 2024.

• Allowance for credit losses to total loans was 1.90% at June 30, 2025, down from 2.72% a year ago.

• Noninterest income decreased $0.6 million (11.3%) for Q2 but increased $1.2 million (11.6%) for the first half, aided by a $1.9 million BOLI death benefit.

• Noninterest expense rose $1.9 million (6.8%) for Q2 and $3.6 million (6.8%) for the first half, driven by higher occupancy, professional fees, and other expenses.

• Diluted EPS was $0.37 for Q2 and $0.76 for the first half, up from $0.21 and $0.46 year-over-year.

Outlook and guidance

• Management expects continued loan growth, margin expansion, and a healthy loan pipeline, with benefits anticipated from prior construction lending over the next 12–18 months.

• The balance sheet remains liability sensitive, positioning for potential net interest income increases if rates decline.

• Focus remains on resolving the large nonperforming credit relationship to protect long-term shareholder value.