Carter Bankshares (CARE) Q4 2022 earnings summary

Executive summary

• Net income was $50.1 million, or $2.03 diluted EPS, in 2022, versus $31.6 million, or $1.19, in 2021; higher net interest income drove the improvement.

• Strategic priorities shifted toward organic growth, loan and deposit growth, fee income, expense discipline and selective, opportunistic acquisitions.

Financial highlights

• Net interest income rose $28.7 million, or 25.9%, to $139.9 million in 2022; provision for credit losses fell $0.9 million to $2.4 million.

• Noninterest income decreased $7.2 million to $21.7 million, mainly as securities gains fell; noninterest expense declined $5.3 million to $97.0 million.

• Income tax expense increased to $11.6 million from $4.1 million; the effective tax rate was 18.8% versus 11.5%, reflecting higher pretax income and lower tax benefits.

• Total assets increased 1.7% to $4.2 billion; portfolio loans grew 12.0% to $3.1 billion, while deposits declined $68.2 million to $3.6 billion.

Outlook and guidance

• The 2023–2025 strategy emphasizes organic growth, with consideration of acquisitions that fit the strategic direction; a refreshed mission, vision and values were planned for rollout in 2023.

• Higher mortgage rates were expected to moderate residential mortgage growth; management also cautioned that some elevated loan pricing may not recur and funding costs may rise.

• Management expected higher short-term rates to improve yields on some variable-rate securities over the next six to twelve months.