Carter Bankshares (CARE) Q4 2023 earnings summary

Executive summary

• FY2023 net income was $23.4M, down 53.3% YoY; Q4 posted a $1.9M net loss and diluted loss per share of $0.08.

• A $301.9M lending relationship placed on nonaccrual in Q2 reduced FY2023 interest income by $30.0M.

Financial highlights

• Q4 net interest income was $27.4M, flat QoQ and down 34.0% YoY; FY net interest income fell 12.6% to $122.3M.

• Q4 noninterest income was $3.2M and included a $1.5M securities-sale loss; FY noninterest income declined 15.8% to $18.3M.

• Q4 noninterest expense was $29.1M; FY expense rose 8.7% to $105.5M, driven by compensation, FDIC insurance and other costs.

• Year-end assets were $4.51B, up 7.3% YoY; shareholders’ equity was $351.2M, up $22.6M.

Outlook and guidance

• Lending pipelines moderated, but near-term loan growth was expected to remain respectable; funding-cost pressure was viewed as beginning to stabilize.

• NIM was expected to normalize after resolution of the large nonaccrual relationship; the $1.5M securities-sale loss was expected to be earned back in less than one year.

• 79.7% of time deposits were set to mature and reprice within 12 months, creating flexibility to manage deposit pricing if short-term rates declined in 2024.

• Strategic priorities included diversified, attractively priced lending, reducing CRE concentration, expanding C&I and consumer lending, and growing share in target markets.