Carter Bankshares (CARE) investor relations material

Executive summary

• Net income for Q1 2026 was $85.8 million ($3.88 diluted EPS), up from $8.5 million ($0.38 EPS) in Q4 2025 and $9.0 million ($0.39 EPS) in Q1 2025, driven by a significant one-time transaction gain.

• The sale of nonperforming loans related to James C. Justice, II resulted in a $80.0 million net gain, boosting EPS by $3.50 and tangible book value per share by $3.49.

Financial highlights

• Net interest income rose to $35.9 million, up 3.8% sequentially and 19.2% year-over-year.

• Net interest margin increased to 3.07% from 2.92% in Q4 2025 and 2.68% in Q1 2025.

• Noninterest income surged to $71.0 million, mainly due to the $65.0 million transaction gain.

• Noninterest expense was $31.0 million, flat sequentially but up $3.0 million year-over-year, with increases in salaries, data processing, and occupancy.

• Efficiency ratio improved to 29.01% from 77.84% in Q4 2025, with adjusted efficiency ratio at 72.66%.

Outlook and guidance

• Management expects continued loan growth, supported by a healthy pipeline and funding from prior construction commitments over the next 12–18 months.

• The balance sheet remains slightly liability sensitive, positioning for potential Fed rate cuts to further support margin expansion.