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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 1, 2024
CARTER BANKSHARES, INC.
(Exact name of registrant as specified in its charter)
Virginia001-3973185-3365661
(State or other jurisdiction
of incorporation)
(Commission
file number)
(IRS Employer
Identification No.)
1300 Kings Mountain Road, Martinsville, Virginia 24112
(Address of Principal Executive Offices) (Zip Code)
(276) 656-1776
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b))
 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $1.00 par valueCARENASDAQ Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 



ITEM 7.01.    REGULATION FD DISCLOSURE.

The attached investor presentation contains financial data that members of management will use from time to time with investors, analysts and other interested parties to assist in their understanding of Carter Bankshares, Inc. (“the Company”). The investor presentation is also available on the Company’s website at www.CBTCares.com. The presentation is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
ITEM 9.01.    FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
Exhibit No.
Exhibit 99.1    September 30, 2024 Investor Presentation.
The information in this Form 8-K, including Exhibit 99.1 attached hereto, is being furnished under Item 7.01 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of such section, nor shall it be deemed incorporated by reference in any filing of Carter Bankshares, Inc., under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.
Important Note Regarding Forward-Looking Statements 
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements made in Mr. Van Dyke’s quotes and statements relating to our financial condition, market conditions, results of operations, plans, objectives, outlook for earnings, strategic initiatives and related earn-back periods, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality and nonaccrual and nonperforming loans. Forward looking statements are typically identified by words or phrases such as “will likely result,” “expect,” “anticipate,” “estimate,” “forecast,” “project,” “intend,” “ believe,” “assume,” “strategy,” “trend,” “plan,” “outlook,” “outcome,” “continue,” “remain,” “potential,” “opportunity,” “comfortable,” “current,” “position,” “maintain,” “sustain,” “seek,” “achieve” and variations of such words and similar expressions, or future or conditional verbs such as will, would, should, could or may.
These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumption that are difficult to predict and often are beyond the Company’s control. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. The matters discussed in these forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected, or implied in or by the forward-looking statements including, but not limited to the effects of:
market interest rates and the impacts of market interest rates on economic conditions, customer behavior, and the Company’s loan and securities portfolios;
inflation, market and monetary fluctuations;
changes in trade, monetary and fiscal policies and laws of the U.S. government, including policies of the Federal Reserve, FDIC and Treasury Department;
changes in accounting policies, practices, or guidance, for example, our adoption of Current Expected Credit Losses (“CECL”) methodology, including potential volatility in the Company’s operating results due to application of the CECL methodology;
cyber-security threats, attacks or events;
rapid technological developments and changes;
1


our ability to resolve our nonperforming assets and our ability to secure collateral on loans that have entered nonaccrual status due to loan maturities and failure to pay in full;
changes in the Company’s liquidity and capital positions;
concentrations of loans secured by real estate, particularly commercial real estate, and the potential impacts of changes in market conditions on the value of real estate collateral;
increased delinquency and foreclosure rates on commercial real estate loans;
an insufficient allowance for credit losses;
the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, war and other military conflicts (such as the war between Israel and Hamas and the ongoing war between Russia and Ukraine) or public health events (such as the COVID-19 pandemic), and of any governmental and societal responses thereto; these potential adverse effects may include, without limitation, adverse effects on the ability of the Company's borrowers to satisfy their obligations to the Company, on the value of collateral securing loans, on the demand for the Company's loans or its other products and services, on incidents of cyberattack and fraud, on the Company’s liquidity or capital positions, on risks posed by reliance on third-party service providers, on other aspects of the Company's business operations and on financial markets and economic growth;
a change in spreads on interest-earning assets and interest-bearing liabilities;
regulatory supervision and oversight, including our relationship with regulators and any actions that may be initiated by our regulators;
legislation affecting the financial services industry as a whole, and the Company and the Bank, in particular;
the outcome of pending and future litigation and/or governmental proceedings;
increasing price and product/service competition;
the ability to continue to introduce competitive new products and services on a timely, cost-effective basis;
managing our internal growth and acquisitions;
the possibility that the anticipated benefits from acquisitions cannot be fully realized in a timely manner or at all, or that integrating acquired operations will be more difficult, disruptive or more costly than anticipated;
the soundness of other financial institutions and any indirect exposure related to recent large bank failures and their impact on the broader market through other customers, suppliers and partners or that the conditions which resulted in the liquidity concerns with those failed banks may also adversely impact, directly or indirectly, other financial institutions and market participants with which the Company has commercial or deposit relationships with;
material increases in costs and expenses;
reliance on significant customer relationships;
general economic or business conditions, including unemployment levels, supply chain disruptions and slowdowns in economic growth;
significant weakening of the local economies in which we operate;
changes in customer behaviors, including consumer spending, borrowing and saving habits;
changes in deposit flows and loan demand;
our failure to attract or retain key employees;
2


expansions or consolidations in the Company’s branch network, including that the anticipated benefits of the Company’s branch network optimization project are not fully realized in a timely manner or at all;
deterioration of the housing market and reduced demand for mortgages; and
re-emergence of turbulence in significant portions of the global financial and real estate markets that could impact our performance, both directly, by affecting our revenues and the value of our assets and liabilities, and indirectly, by affecting the economy generally and access to capital in the amounts, at the times and on the terms required to support our future businesses.
Many of these factors, as well as other factors, are described in our filings with the SEC including in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. All risk factors and uncertainties described herein and therein should be considered in evaluating the Company’s forward-looking statements. Forward-looking statements are based on beliefs and assumptions using information available at the time the statements are prepared. We caution you not to unduly rely on forward-looking statements because the assumptions, beliefs, expectations and projections about future events are expressed in or implied by a forward-looking statement may, and often do, differ materially from actual results. Any forward-looking statement speaks only as to the date on which it is made, and we undertake no obligation to update, revise or clarify any forward-looking statement to reflect developments occurring after the statement is made.
3


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 CARTER BANKSHARES, INC.
 (Registrant)
Date: November 1, 2024By:/s/ Wendy S. Bell
Name:Wendy S. Bell
Title:Chief Financial Officer

THIRD QUARTER 2024 INVESTOR PRESENTATION


 
2 F O R W A R D - L O O K I N G S T A T E M E N T This information contains or incorporates certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that relate to our financial condition, market conditions, results of operations, plans, objectives, outlook for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality and nonaccrual and nonperforming loans. Forward looking statements are typically identified by words or phrases such as “will likely result,” “expect,” “anticipate,” “estimate,” “forecast,” “project,” “intend,” “ believe,” “assume,” “strategy,” “trend,” “plan,” “outlook,” “outcome,” “continue,” “remain,” “potential,” “opportunity,” “comfortable,” “current,” “position,” “maintain,” “sustain,” “seek,” “achieve” and variations of such words and similar expressions, or future or conditional verbs such as will, would, should, could or may. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumption that are difficult to predict and often are beyond the Company’s control. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. The matters discussed in these forward- looking statements are subject to various risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected, or implied in or by the forward- looking statements including, but not limited to the effects of: market interest rates and the impacts of market interest rates on economic conditions, customer behavior, and the Company’s loan and securities portfolios; inflation, market and monetary fluctuations; changes in trade, monetary and fiscal policies and laws of the U.S. government, including policies of the Federal Reserve, FDIC and Treasury Department; changes in accounting policies, practices, or guidance, for example, our adoption of Current Expected Credit Losses (“CECL”) methodology, including potential volatility in the Company’s operating results due to application of the CECL methodology; cyber-security threats, attacks or events; rapid technological developments and changes; our ability to resolve our nonperforming assets and our ability to secure collateral on loans that have entered nonaccrual status due to loan maturities and failure to pay in full; changes in the Company’s liquidity and capital positions; concentrations of loans secured by real estate, particularly commercial real estate, and the potential impacts of changes in market conditions on the value of real estate collateral; increased delinquency and foreclosure rates on commercial real estate loans; an insufficient allowance for credit losses; the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, war and other military conflicts (such as the war between Israel and Hamas and the ongoing war between Russia and Ukraine) or public health events (such as the COVID-19 pandemic), and of any governmental and societal responses thereto; these potential adverse effects may include, without limitation, adverse effects on the ability of the Company's borrowers to satisfy their obligations to the Company, on the value of collateral securing loans, on the demand for the Company's loans or its other products and services, on incidents of cyberattack and fraud, on the Company’s liquidity or capital positions, on risks posed by reliance on third-party service providers, on other aspects of the Company's business operations and on financial markets and economic growth; a change in spreads on interest-earning assets and interest- bearing liabilities; regulatory supervision and oversight, including our relationship with regulators and any actions that may be initiated by our regulators; legislation affecting the financial services industry as a whole, and the Company and the Bank, in particular; the outcome of pending and future litigation and/or governmental proceedings; increasing price and product/service competition; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; managing our internal growth and acquisitions; the possibility that the anticipated benefits from acquisitions cannot be fully realized in a timely manner or at all, or that integrating acquired operations will be more difficult, disruptive or more costly than anticipated; the soundness of other financial institutions and any indirect exposure related to recent large bank failures and their impact on the broader market through other customers, suppliers and partners or that the conditions which resulted in the liquidity concerns with those failed banks may also adversely impact, directly or indirectly, other financial institutions and market participants with which the Company has commercial or deposit relationships with; material increases in costs and expenses; reliance on significant customer relationships; general economic or business conditions, including unemployment levels, supply chain disruptions and slowdowns in economic growth; significant weakening of the local economies in which we operate; changes in customer behaviors, including consumer spending, borrowing and saving habits; changes in deposit flows and loan demand; our failure to attract or retain key employees; expansions or consolidations in the Company’s branch network, including that the anticipated benefits of the Company’s branch network optimization project are not fully realized in a timely manner or at all; deterioration of the housing market and reduced demand for mortgages; and re-emergence of turbulence in significant portions of the global financial and real estate markets that could impact our performance, both directly, by affecting our revenues and the value of our assets and liabilities, and indirectly, by affecting the economy generally and access to capital in the amounts, at the times and on the terms required to support our future businesses. Many of these factors, as well as other factors, are described in our filings with the SEC including in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. All risk factors and uncertainties described herein and therein should be considered in evaluating the Company’s forward-looking statements. Forward-looking statements are based on beliefs and assumptions using information available at the time the statements are prepared. We caution you not to unduly rely on forward-looking statements because the assumptions, beliefs, expectations and projections about future events are expressed in or implied by a forward-looking statement may, and often do, differ materially from actual results. Any forward-looking statement speaks only as to the date on which it is made, and we undertake no obligation to update, revise or clarify any forward-looking statement to reflect developments occurring after the statement is made.


 
SECTION TITLE SLIDES 1 Overview 4-12 2 Financial Highlights 13-24 3 Asset Quality 25-31 4 Deposit Mix 32-34 5 Commercial Loans 35-44 6 Non-GAAP Reconciliation 45-50 3


 
OVERVIEW S E C T I O N 0 1


 
5 As of September 30, 2024 FOCUSED ON THE FUTURE 65 CORPORATE CENTERS BRANCHES ◦ Strong Deposit Growth in Q3 2024, 20.9%, annualized ◦ Strong and Improving Available Liquidity Position in Q3 2024, 207.8% available liquidity to uninsured deposits ◦ Diversified and granular deposit base, approximately 78.5% Retail Customers ◦ Approximately 82.7% of Deposits, including Collateralized Muni deposits are FDIC Insured ◦ Branch network expansion in strategic growth markets (Charlottesville and Raleigh) with Commercial and Retail Teams CORPORATE HIGHLIGHTS Carter Bank & Trust charter established in 2006 with the merger of ten banks Carter Bankshares, Inc. holding company established in Q4 2020 with the assets of Carter Bank & Trust Bank established denovo in 1974 as First National Bank of Rocky Mount, VA 1974 2006 2020 CORPORATE OFFICES IN VIRGINIA03 MARTINSVILLE, VIRGINIA LOANS $3.6B $4.6B ASSETS $4.1B DEPOSITS A Well-Capitalized Franchise with Momentum


 
6 L E A D E R S H I P T E A M Litz Van Dyke Chief Executive Officer 38 years in Industry 8 years at the Bank Bradford Langs President Chief Strategy Officer 37 years in Industry 7+ years at the Bank Wendy Bell Senior Executive Vice President Chief Financial Officer 39 years in Industry 7+ years at the Bank Loran Adams Tami Buttrey EVP Chief Retail Banking Officer 41 years in Industry 5+ years at the Bank Paul Carney EVP Chief Human Resources Officer 13 years in Industry 5+ years at the Bank Jane Ann Davis EVP Chief Administration Officer 40 years in Industry 40 years at the Bank Tony Kallsen SEVP Chief Credit Officer 33 years in Industry 6+ years at the Bank Phyllis Karavatakis SEVP Special Projects Executive 46 years in Industry 46 years at the Bank Richard Owen EVP Mortgage Banking & Corporate Sales Director 32 years in Industry 6+ years at the Bank Chrystal Parnell EVP Chief Marketing & Communications Officer 17 years in Industry 2+ years at the Bank Matt Speare SEVP Chief Operations Officer 22 years in Industry 7+ years at the Bank Rich Spiker SEVP Chief Lending Officer 35 years in Industry 6+ years at the Bank EVP Director of Regulatory Risk Management 40 years in Industry 8 years at the Bank


 
Branches in Metropolitan Statistical Areas 7 R E G I O N A L F O O T P R I N T V I R G I N I A N O R T H C A R O L I N A 53 BRANCHES TOTAL $3.6 DEPOSITS TOTAL BILLION Washington DC Roanoke Lynchburg Charlottesville Blacksburg- Christiansburg Non MSA VIRGINIA NORTH CAROLINA 12 BRANCHES TOTAL Charlotte Greensboro Raleigh Durham Fayetteville Non MSA $0.5 DEPOSITS TOTAL BILLION September 30, 2024 YEAR END BRANCHES 2018 105 2019 101 2020 92 2021 69 2022 66 » » » » 2023 65 » 2024 65 » DOING MORE WITH LESS:


 
8 R E W A R D I N G R E L A T I O N S H I P S CMO 20% SBA 8% MBS 13% Nurturing Relationships and Rewarding Customers, Associates, and Shareholders Rewarding Relationships Regulators Customers Communities Associates Investors


 
CLASSES FACILITATED FOR 1,130 STUDENTS 9 * C O R P O R A T E & S O C I A L R E S P O N S I B I L I T Y The Facilities team engaged a local small business’ herd of goats to transform a wooded area at the Bank’s headquarters that had become overgrown. This economical and environmentally friendly move also had an ‘agro-tainment’ factor enjoyed by our Associates. VOLUNTEER COMMUNITY SERVICE HOURS CHARITABLE DONATIONS & SPONSORSHIPS TO NONPROFITS Beginning January 1, 2024 through September 30, 2024. To support a multi-year downtown revitalization project, Carter Bank donated two acres of land to the Town of Boones Mill, VA for the development of the Town’s first community park. The overall design of the park is to place heavy emphasis on accessibility and environmental sustainability while using pervious parking materials and native plant landscaping. The Bank partnered with the Montgomery County Chamber of Commerce to award complimentary chamber memberships to four minority-owned businesses. The investment is part of a continued effort to provide opportunity to underserved communities.


 
• Investments in Human Capital & Technology Should Provide Operational Leverage Going Forward • Well Positioned in Virginia & North Carolina including Fast Growing Markets such as Charlottesville, Charlotte & Raleigh • Extraordinarily well-reserved with our other segment reserve for the largest lending relationship • Excluding the largest lending relationship, credit quality remains strong & underwriting remains conservative • Strong Liquidity & Capital Position • CET1 of 10.83% • ACL coverage of 2.25% • $1.5B of total available liquidity • 207.8% total available liquidity/ uninsured deposits Strong Conservative Financial Credit Performance Culture Attractive Executing Markets & Strategic Customers Objectives 10 I N V E S T M E N T H I G H L I G H T S ABS 10% SBA 8% As of September 30, 2024


 
11 S T R A T E G I C I N I T I A T I V E S E N H A N C E E X P A N DI N V E S T We will invest in human capital strategies to enhance the associate experience. We will continue to drive efficiency and process improvement across all levels of the organization, leveraging technology and automation. We will make significant investments in the new brand strategy working on updating and enhancing the image and reputation of the Bank. We will continue to enhance the transformational work that has been done over the past five years. We will focus on initiatives around enhancing technology, operations, customer experience, C&I, corporate & social responsibility, channel delivery, and product development. We will strengthen change management systems and leverage the Board’s ERM Committee. We will continue strategies to deepen existing relationships and acquire new relationships in current markets. We will focus on increasing market share in target growth markets. We will focus on expanding through organic growth and opportunistic acquisition. S U P E R I O R F I N A N C I A L P E R F O R M A N C E & O P E R A T I O N A L E X C E L L E N C E


 
12 8.00% ACL/Total Portfolio Loans 2 NPL/Portfolio Loans 1 Net Chg-offs/ Portfolio Loans (YTD) 0.61% Delinquency/ Portfolio Loans S A F E T Y A N D S O U N D N E S S 2.25% 0.08% Asset Quality Earnings LiquidityCapital Return on Avg Assets (YTD)0.48% 5.99% NIM(FTE)(YTD) 2.59% Adj. Efficiency Ratio (YTD) 80.33% Highly Liquid Assets / Uninsured Deposits Highly Liquid Assets / Total Assets Total available liquidity / uninsured deposits 10.7% 207.8% Total Liquidity Sources 70.0% $1.5B Leverage Ratio Total Risk- based Capital Ratio Book Value 12.09% $16.77 Common Equity Tier 1 Ratio ("CET1") 9.53% 10.83% As of September 30, 2024 1 0.19% without the largest NPL relationship, see non-GAAP reconciliation 2 1.22% without the largest NPL relationship, see non-GAAP reconciliation Return on Avg Shareholders' Equity (YTD)


 
FINANCIAL HIGHLIGHTS S E C T I O N 0 2


 
14 $ in thousands 3Q 2024 2Q 2024 QTD Q/Q Change % 3Q 2023 QTD Y/Y Change % Operational Results Net Interest Income $28,798 $28,092 2.5 % $27,394 5.1 % (Recovery) Provision for Credit Losses (432) 491 (188.0) % 1,105 (139.1) % Provision (Recovery) for Unfunded Commitments 191 (236) (180.9) % (130) (246.9) % Noninterest Income 5,422 5,533 (2.0) % 5,270 2.9 % Noninterest Expense 27,433 27,446 — % 27,282 0.6 % Income Tax Provision 1,399 1,121 24.8 % 780 79.4 % Net Income $5,629 $4,803 17.2 % $3,627 55.2 % Diluted Earnings Per Common Share $0.24 $0.21 14.3 % $0.16 50.0 % Balance Sheet Condition Assets $4,613,435 $4,532,509 1.8 % $4,452,168 3.6 % Portfolio Loans 3,595,861 3,549,521 1.3 % 3,410,940 5.4 % Allowance for Credit Losses (80,909) (96,686) (16.3) % (94,474) (14.4) % Securities Available-for-Sale 742,635 746,325 (0.5) % 793,389 (6.4) % Equity Securities 5,207 5,063 2.8 % — NM Deposits 4,085,068 3,881,301 5.2 % 3,559,554 14.8 % Borrowings 90,000 238,000 (62.2) % 514,135 (82.5) % Shareholders' Equity 386,825 364,411 6.2 % 330,621 17.0 % B A L A N C E S H E E T & I N C O M E S T A T E M E N T 17.2%/55.2% Net Income up QoQ & YoY 6.2%/17.0% Shareholders' Equity up QoQ & YoY As of September 30, 2024 5.2%/14.8% Deposits up QoQ & YoY 2.5%/5.1% Net Interest Income up QoQ & YoY 1.3%/5.4% Loan Growth QoQ & YoY 62.2%/82.5% Borrowings down QoQ & YoY


 
3Q 2024 2Q 2024 QTD Q/Q Change % 3Q 2023 QTD Y/Y Change % Shareholder Ratios Diluted Earnings Per Share (QTD) $0.24 $0.21 14.3 % $0.16 50.0 % Financial Ratios Return on Avg Assets (QTD) 0.49 % 0.43 % 14.0 % 0.33 % 48.5 % Return on Avg Shareholders' Equity (QTD) 5.99 % 5.40 % 10.9 % 4.19 % 43.0 % Net Interest Margin (FTE)(QTD)1 2.59 % 2.56 % 1.2 % 2.54 % 2.0 % Adjusted Efficiency Ratio (QTD)1 80.65 % 81.33 % (0.8) % 79.55 % 1.4 % Asset Quality Ratios NPL/Portfolio Loans 8.00 % 8.46 % (5.4) % 9.04 % (11.5) % NPA/Total Assets plus OREO 8.04 % 8.52 % (5.6) % 9.14 % (12.0) % ACL/Total Portfolio Loans 2.25 % 2.72 % (17.3) % 2.77 % (18.8) % Net Chg-offs/Portfolio Loans (QTD annualized) 1.71 % 0.04 % 4,175.0 % 0.09 % 1,800.0 % 15 F I N A N C I A L / S H A R E H O L D E R R A T I O S As of September 30, 2024 1 Non-GAAP Financial measure - see Non-GAAP reconciliation ◦ Diluted EPS up $0.03 / $0.08 QoQ & YoY ◦ ROA up 14.0% / 48.5% QoQ & YoY ◦ ROE up 10.9% / 43.0% QoQ & YoY ◦ NIM (FTE) up 1.2% / 2.0% QoQ & YoY ◦ NPL to total portfolio loans declined $13.2M QoQ and $21.0M YoY due to curtailment payments made by the Bank's largest NPL relationship HIGHLIGHTS


 
Efficiency Ratio 75.20% 73.51% 60.67% 72.54% 80.33% 2020 2021 2022 2023 YTD 3Q 2024 Net Income, in millions $(45,858) $31,590 $50,118 $23,384 $21,697 2020 2021 2022 2023 3Q 2024 16 F I N A N C I A L P E R F O R M A N C E T R E N D S ROA (1.12)% 0.76% 1.21% 0.53% 0.48% 2020 2021 2022 2023 YTD 3Q 2024 TCE 10.53% 9.86% 7.82% 7.78% 8.38% 2020 2021 2022 2023 3Q 2024 1 A loss of $57.7 million was recognized during the third quarter of 2020 related to a one-time charge resulting from goodwill impairment. This impairment charge reduced net income by $62.2 million, resulting in a net loss for the third quarter of 2020. Excluding the impairment charge of $62.2 million, net income would have been $16.3 million. 2 Net income for the nine months ended September 30, 2024 is YTD annualized. 3 Non-GAAP Financial Measure - see Non-GAAP reconciliation 3 * 2 $16,334 1


 
17 As of September 30, 2024 1 During the second and third quarters of 2024, $3.1M of the other segment reserve release from the $21.0M curtailment payments resulted in a $0.11 per share increase in book value. 2 Non-GAAP Financial measure - see Non-GAAP reconciliation Carter Bankshares September 30, 2024 Regulatory Well Capitalized Actual Excess ($) (In Thousands) Excludes impact of Large NPL Excess ($) Excludes impact of Large NPL (In Thousands) Common Equity Tier 1 Ratio ("CET1") 6.50 % 10.83 % $ 176,032 12.38 % $ 230,525 Tier 1 Risk-based Ratio 8.00 % 10.83 % 115,087 12.38 % 171,712 Total Risk-based Capital Ratio 10.00 % 12.09 % 85,024 13.64 % 142,738 Leverage Ratio 5.00 % 9.53 % 209,158 10.51 % 254,407 Critically Undercapitalized Category Tangible equity to total assets ≤2% Capital Conservation Buffer ≥2.5%; composed of CET1 Focus on maintaining a strong regulatory capital position in excess of regulatory thresholds. Ensure capital levels are commensurate with the Company's risk profile and strategic plan objectives. Since December of 2021, 3.8 million shares have been repurchased at a total cost of $59.8 million at an average cost per share of $15.95. 10.83% TIER 1 TOTAL LEVERAGE C A P I T A L M A N A G E M E N T 12.09% 9.53% Actual ($) 09/30/2024 Cumulative AOCI impact 09/30/2024 Other Segment Reserve impact 09/30/2024 1 Book Value per Common Share $ 16.77 $ (2.31) $ (1.28) $(3.59) Adjusted Book Value 2 $ 20.36 REGULATORY CAPITAL


 
$ in thousands September 30, 2024 December 31, 2023 YoY Change Cash and Due From Banks, including Interest-bearing Deposits $ 104,992 $ 54,529 $ 50,463 FHLB Borrowing Availability1 791,403 480,266 311,137 Unsecured Lines of Credit 30,000 50,000 (20,000) Collateralized Lines of Credit 45,000 — 45,000 Unpledged Investment Securities 433,273 563,537 (130,264) Excess Pledged Securities 65,931 61,774 4,157 Total Liquidity Sources $ 1,470,599 $ 1,210,106 $ 260,493 18 As of September 30, 2024 1 For the periods presented above, the Company maintained a secured FHLB Borrowing Facility with FHLB of Atlanta equal to 25% of the Bank's assets approximating $1.2 billion, with available borrowing capacity subject to the amount of eligible collateral pledged at any given time. Continue to maintain a strong liquidity position: • Ongoing FHLB collateral pledging1 • Maintain three unsecured lines of credit • Maintain one secured line of credit • Majority of bond portfolio is unpledged • Available sources to leverage unpledged bonds • Federal Reserve Discount Window • Federal Home Loan Bank of Atlanta • Secured Federal Funds Lines Strong coverage of uninsured deposits: • Total available liquidity / uninsured deposits 207.8% L I Q U I D I T Y $1.5B TOTAL AVAILABLE LIQUIDITY


 
19 For the Period Ending Variance $ in thousands 09/30/24 06/30/24 09/30/23 Quarter Year Commercial Real Estate $ 1,857,997 $ 1,801,397 $ 1,688,947 $ 56,600 $ 169,050 Commercial and Industrial 241,474 240,611 264,329 863 (22,855) Residential Mortgages 782,930 783,903 738,368 (973) 44,562 Other Consumer 29,813 31,284 36,487 (1,471) (6,674) Construction 399,502 394,926 377,576 4,576 21,926 Other1 284,145 297,400 305,233 (13,255) (21,088) Total Portfolio Loans2 $ 3,595,861 $ 3,549,521 $ 3,410,940 $ 46,340 $ 184,921 L O A N C O M P O S I T I O N LOAN PORTFOLIO • Total loans increased $184.9M, or 5.4% YoY due to solid loan growth, primarily in the commercial real estate, residential mortgages and construction segments. • Year-to-date loan growth was muted by $80.0M in loan pay-offs of two large commercial real estate loans. 1 Other loans include unique risk attributes considered inconsistent with our current underwriting standards. 2 Total Portfolio Loans is net of loans held-for-sale and Loan Portfolio Segments are sourced from Fed. Call Codes (RC-C). 3 Loan growth for the quarter ended September 30, 2024 is annualized and $ in millions. CRE 51% C&I 7% Residential Mortgages 22% Other Consumer 1% Construction 11% Other 8% Total Portfolio Loan Growth $2,947 $2,812 $3,149 $3,506 $3,596 2.15% (4.58)% 11.98% 11.34% 10.21% Portfolio Loans Growth YE 2020 YE 2021 YE 2022 YE 2023 Q3 20243


 
20 L O A N P O R T F O L I O R E P R I C I N G & I N D E X 3Q 2024 1 Floating Rate Loans are defined as loans with contractual interest rate terms that allow the loan to reprice at lease once each month. 2 Variable Rate Loans are defined as loans with contractual interest rate terms that allow the loan to reprice at least once during the life of the loan agreement, but not more frequently than once per quarter. $ in millions Loan Portfolio by Rate Type Fixed $1,243 35% Floating $949 26% Variable $1,405 39% Loan Portfolio by Rate Index Type Fixed $1,243 35% Sofr $520 14% Prime $438 12% Treasury $1,396 39% 2 1 $3.60B $3.60B


 
21 For the Periods Ending Change % of Gross Loans % of RBC $ in thousands 09/30/24 12/31/23 1. Hospitality, Agriculture & Energy $ 280,905 $ 301,913 $ (21,008) 7.81% 57.17% 2. Multifamily 58,935 15,000 43,935 1.64% 12.00% 3. Health Care Facility / Long-Term Care 53,087 53,683 (596) 1.48% 10.81% 4. Retail & Office 52,666 53,576 (910) 1.46% 10.72% 5. Warehouse 50,069 51,185 (1,116) 1.39% 10.19% 6. Long-Term Care 46,199 21,803 24,396 1.29% 9.40% 7. Health Care Facility 44,779 — 44,779 1.25% 9.11% 8. Retail 44,683 45,187 (504) 1.24% 9.09% 9. Hospitality 43,268 44,297 (1,029) 1.20% 8.81% 10. Warehouse 42,582 20,082 22,500 1.18% 8.67% Top Ten (10) Relationships $ 717,173 $ 606,726 $ 110,447 19.94% 145.97% Total Gross Loans $ 3,596,251 $ 3,505,910 $ 90,341 % of Total Gross Loans 19.94% 17.31% 2.63% Concentration (25% of RBC) $ 122,832 $ 121,231 T O P T E N ( 1 0 ) R E L A T I O N S H I P S ( T O T A L C O M M I T M E N T ) As of September 30, 2024


 
22 9/30/2024 12/31/2023 $ in thousands Amortized Cost Net Unrealized (Losses)/ Gains Fair Value Amortized Cost Net Unrealized (Losses)/ Gains Fair Value U.S. Government Agency Securities 27,986 (511) 27,475 44,185 (358) 43,827 Residential Mortgage-Backed Securities 107,515 (8,706) 98,809 110,726 (11,576) 99,150 Commercial Mortgage-Backed Securities 23,524 (483) 23,041 31,578 (415) 31,163 Other Commercial Mortgage-Backed Securities 24,097 (1,830) 22,267 24,522 (2,666) 21,856 Asset Backed Securities 128,726 (7,580) 121,146 150,832 (10,826) 140,006 Collateralized Mortgage Obligations 165,377 (8,959) 156,418 174,396 (12,863) 161,533 States and Political Subdivisions 262,960 (31,788) 231,172 263,557 (41,449) 222,108 Corporate Notes 70,750 (8,443) 62,307 70,750 (11,390) 59,360 Total Debt Securities 810,935 $ (68,300) $ 742,635 870,546 $ (91,543) $ 779,003 B O N D P O R T F O L I O BOND OVERVIEW • The bond portfolio is 100% available-for-sale. • Our portfolio consists of 46.9% of securities issued by United States government sponsored entities and carry an implicit government guarantee. • States and political subdivisions comprise 31.1% of the portfolio and are largely general obligation or essential purpose revenue bonds, which have performed very well historically over all business cycles, and are rated AA and AAA. • At September 30, 2024, the Company held 56.3% fixed rate and 43.7% floating rate securities. • The material improvement in unrealized losses was largely due to bond maturities, amortizations and lower intermediate-term interest rates. • Securities comprise 16.1% of total assets at September 30, 2024. • Shorter maturity profile with an average life of 5.5 years; less interest rate risk with an effective duration of 4.1; and higher than peer book yield of 3.52%. CMO 21% Muni 31% ABS 7% SBA 6% Corporates 8%MBS 14% CMBS 12% As of September 30, 2024 1% Agencies & Treasuries


 
23 D E P O S I T C O M P O S I T I O N Total Deposits Composition $3,685 $3,698 $3,633 $3,722 $4,085 709 748 706 685 629 2,976 2,950 2,927 3,037 3,456 Noninterest-bearing Deposits Interest-bearing Deposits YE 2020 YE 2021 YE 2022 YE 2023 Q3 2024 DEPOSIT STATISTICS • Total deposits increased $525.5M YoY • Diversified and granular deposit base, approximately 78.5% Retail Customers • Approximately 82.7% of Deposits, including Collateralized Muni deposits are FDIC Insured • Partnership with IntraFi for available coverage over $250K FDIC insured limit DDA - Int. Free 16% DDA - Int.- Bearing 16% Money Market 12% Savings 9% CDs 47% 1 Period end balances at September 30, 2024, $ in millions 1 For the Period Ending Variance $ in thousands 09/30/24 06/30/24 09/30/23 Quarter Year Lifetime Free Checking $ 628,901 $ 653,296 $ 664,819 $ (24,395) $ (35,918) Interest-Bearing Demand 649,005 565,465 469,904 83,540 179,101 Money Market 504,206 500,475 426,172 3,731 78,034 Savings 372,881 399,833 487,105 (26,952) (114,224) Certificates of Deposits 1,930,075 1,762,232 1,511,554 167,843 418,521 Total Deposits $ 4,085,068 $ 3,881,301 $ 3,559,554 $ 203,767 $ 525,514


 
24 D E P O S I T S Goal is to enhance and diversify funding sources with a focus on lower cost/core relationships (both retail and commercial): • Deposits currently stand at $4.1B • CD Portfolio ($1.9B) is relatively short with 93.0% of the retail portfolio scheduled to mature within 12 months and 97.0% of the retail portfolio scheduled to mature within 24 months, allowing for opportunities to lower deposit costs quickly when short term rates begin to ease • Multiple strategies are in place to grow all non maturity deposit accounts with a focus on lower cost of funds • Established product road map and working to expand deposit offerings for retail and commercial customers CDs DDA - Int. Free DDA - Int. Bearing Money Markets Savings Past Present Future 56% 47% 30% 15% 12% 3% 10% Deposit Mix - 12/31/17 Deposit Mix - 9/30/24 Deposit Mix - Target 20% 9% 20% 7% 16% 25% 14% 16% As of September 30, 2024


 
ASSET QUALITY S E C T I O N 0 3


 
26 A S S E T Q U A L I T Y Nonperforming Loans / Total Portfolio Loans $2,947 $2,812 $3,149 $3,506 $3,596 32 7 7 310 288 2,915 2,805 3,142 3,196 3,308 1.09% 0.26% 0.21% 8.83% 8.00% Nonperforming Loans Performing Loans Nonperforming Loans/ Total Portfolio Loans YE 2020 YE 2021 YE 2022 YE 2023 Q3 2024 Delinquency / Portfolio Loans 6 2 5 6 3 2,947 2,812 3,149 3,506 3,596 0.21% 0.06% 0.15% 0.17% 0.08% Delinquency Portfolio Loans Delinquency / Portfolio Loans YE 2020 YE 2021 YE 2022 YE 2023 Q3 2024 As of September 30, 2024, $ in millions 1 The Company placed commercial loans in the Other segment of the Company’s loan portfolio, relating to the Bank’s largest lending relationship which has a current principal balance of $280.9 million, on nonaccrual status due to loan maturities and failure to pay in full during the second quarter of 2023. $281 $1, $5, $1 Q3 20241 Nonperforming Loan Breakdown $288 $1 Q3 20241 Nonperforming Assets 1 1 YE 2020 YE 2021 YE 2022 YE 2023 Q3 2024 NPL CRE $ 22 $ 3 $ 2 $ 1 $ 1 C&I 1 1 — — 1 Res. Mtg. 5 1 1 4 5 Other Consumer 4 2 4 — — Construction — — — 3 — Other — — — 302 281 Total NPL $ 32 $ 7 $ 7 $ 310 $ 288 YE 2020 YE 2021 YE 2022 YE 2023 Q3 2024 NPA NPLs $ 32 $ 7 $ 7 $ 310 $ 288 OREO 16 11 8 2 1 Total NPA $ 48 $ 18 $ 15 $ 312 $ 289 1 1 1 11


 
27 D E L I N Q U E N C Y T R E N D S Past Due Loans / Total Portfolio Loans 0.19% 0.05% 0.08% 0.16% 0.07% 0.03% 0.01% 0.07% 0.01% 0.01% —% —% —% —% —% 0.22% 0.06% 0.15% 0.17% 0.08% $6,404 $1,670 $4,837 $6,032 $2,778 30-59 Days PD 60-89 Days PD 90+ Days PD and still accruing Total PD Loans Total PD Amt YE 2020 YE 2021 YE 2022 YE 2023 Q3 2024 0.00% 0.06% 0.12% 0.18% 0.24% $— $3,000 $6,000 $9,000 $12,000 As of September 30, 2024, $ in thousands


 
28 D E L I N Q U E N C Y T R E N D S 1 Represents the Bank’s largest lending relationship with a current principal balance of $280.9 million placed on nonaccrual status during the second quarter of 2023. Note: Other Real Estate Owned was $1.5M as of Q3 2024. Note: Peers include BHB, AROW, BHB, CCBG, CCNE, CFFI, CHCO, CTBI, FBMS, FCBC, FRST, GSBC, HTBI, MPB, MVBF, ORRF, PFIS, RBCA.A, SHBI, SMBK, SYBT, UVSP WASH. Delinquency Trends $2,778 0.08% $287,710 8.00% $3,305,373 91.92% 30-89 Days Past Due NPL Current September 30, 2024 #s in thousands Current 30-89 Days Past Due NPL Total Portfolio Loans Commercial Real Estate $ 1,856,591 $ 428 $ 978 $ 1,857,997 Commercial and Industrial 240,380 — 1,094 241,474 Residential Mortgages 777,569 879 4,482 782,930 Other Consumer 29,524 269 20 29,813 Construction 398,069 1,202 231 399,502 Other1 3,240 — 280,905 284,145 Total $ 3,305,373 $ 2,778 $ 287,710 $ 3,595,861 ◦ The $280.9M commercial loans placed in "other" which comprises the largest lending relationship represents 97.6% of the total nonperforming loans ◦ Excluding the largest lending relationship, the Q3 2024 NPL & delinquency ratios are significantly better than peers (0.19% vs 0.58%) and (0.08% vs 0.31%) COMMENTARY:


 
29 Nonaccrual Balance Change Comments $ in thousands 09/30/24 12/31/23 1. Other 1 $ 280,905 $ 301,913 $ (21,008) Other 2. Residential Construction 2,106 2,090 16 Residential Construction 3. Commercial & Industrial 1,037 — 1,037 Purchase Business Equipment 4. CRE 434 689 (255) Commercial Property 5. Residential 393 — 393 Residential Mortgage Loan 6. Residential — 825 (825) Residential Mortgage Loan 7. Residential — 1,142 (1,142) Residential Mortgage Loan 8. Construction — 808 (808) Residential Lot Developer Subtotal: Top Nonaccrual Loans 284,875 307,467 (22,592) Total Nonaccrual Loans 287,710 309,535 (21,825) Top Nonaccrual Loans / Total Nonaccrual Loans 99.01 % 99.33 % (0.32) % Total Portfolio Loans 3,595,861 3,505,910 89,951 Total Nonaccrual Loans / Total Portfolio Loans 8.00 % 8.83 % (0.83) % Total Nonaccrual Loans excluding "Other 1" / Total Portfolio Loans 0.19 % 0.22 % (0.03) % N O N P E R F O R M I N G R E L A T I O N S H I P S As of September 30, 2024 1 The Company placed commercial loans in the Other segment of the Company’s loan portfolio, relating to the Bank’s largest lending relationship which has a current principal balance of $280.9 million, on nonaccrual status due to loan maturities and failure to pay in full during the second quarter of 2023.


 
Portfolio Credit Quality Trend $2,947 $2,812 $3,149 $3,506 $3,596 2,523 2,616 2,992 3,192 3,300 238 186 142 310 296 186 85.6% 93.0% 95.0% 91.1% 91.8% Pass Substandard Special Mention % of Pass to Total YE 2020 YE 2021 YE 2022 YE 2023 Q3 2024 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 30 L O A N P O R T F O L I O - R I S K R A T I N G S Non-Pass Credit Quality Trend $424 $196 $157 $314 $296 238 186 142 310 296 186 10 15 4 — 97.5% 95.0% Substandard Special Mention % "Other " to Substandard YE 2020 YE 2021 YE 2022 YE 2023 3Q 2024 $0 $120 $240 $360 $480 As of September 30, 2024, $ in millions 1 The Company placed $301.9 million of commercial loans in the Other segment of the Company’s loan portfolio, relating to the Bank’s largest lending relationship which has a current principal balance of $280.9 million, on nonaccrual status due to loan maturities and failure to pay in full during the second quarter of 2023. 1 10 15 4 1 1 1 1


 
31 A C L, N E T C H A R G E - O F F S & P R O V I S I O N E X P E N S E Net Charge-offs & Provision Expense $2,694 $23,127 $4,506 $2,300 $15,345 $18,006 $3,350 $2,419 $5,500 $(432) 0.09% 0.79% 0.15% 0.07% 1.71% Net Charge-offs Provision Expense Net Charge-offs (annualized)/ Average Loans YE 2020 YE 2021 YE 2022 YE 2023 Q3 2024 ACL Composition & ACL Coverage Ratio $54,074 $95,939 $93,852 $97,052 $80,909 38,824 94,974 93,183 42,738 43,568 15,250 965 669 54,314 37,341 1.83% 3.41% 2.98% 2.77% 2.25% General Reserves Individually Evaluated Loan Reserves ACL to Total Portfolio Loans YE 2020 YE 2021 YE 2022 YE 2023 Q3 2024 2 As of September 30, 2024, $ in thousands 1 Included in 2021 is the $61.6 million Day 1 adjustment related to the adoption ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. 2 YTD Net charge-offs for 2021 consist of $9.2 million for nine sold loans that were a part of two relationships in 3Q21 and $6.3 million and $1.9 million in 2Q21 for the resolution of our two largest nonperforming credits, which were previously reserved. 3 YTD Net charge-offs for Q3 2024 consist of a $15.0 million principal charge-off related to the Other segment of the loan portfolio. 4 The individually evaluated loans increased $53.6 million during the second quarter of 2023 due to our largest lending relationship, that was previously reserved in general reserves within the Other segment, moved to nonperforming status and is currently individually evaluated. 1 4 3


 
DEPOSIT MIX S E C T I O N 0 4


 
Total Deposit Composition $3,685 $3,698 $3,633 $3,722 $4,085 2,976 2,950 2,927 3,037 3,456 709 748 706 685 629 Interest-bearing deposits Noninterest-bearing deposits YE 2020 YE 2021 YE 2022 YE 2023 Q3 2024 $0 $600 $1,200 $1,800 $2,400 $3,000 $3,600 $4,200 $4,800 33 D E P O S I T S 1 Period end balances, at September 30, 2024, $ in millions 2 Collateralized Muni deposits are FDIC insured up to $250,000. All balances in excess of $250,000 are fully collateralized with eligible securities 1 Insured/Uninsured Deposits $707.5 17% $186.0 $3,191.5 78% Uninsured Deposits Collateralized Muni Insured Deposits 2 • Well-diversified deposit base of 213,041 customers – average commercial deposit account balance is $47.1K – average retail deposit account balance is $15.4K • Deposit mix of 78.5% Consumer / 21.5% Business • At September 30, 2024, the Bank had no deposit relationships greater than, or equal to, 2.5% of total deposits. • Partnership with IntraFi for available coverage over $250K FDIC insured limit. 5%


 
Net Interest Income & NIM 0.94% 0.57% 0.50% 1.73% 2.49% 3.74% 3.41% 4.01% 4.60% 5.08% 2.80% 2.84% 3.51% 2.87% 2.59% Total Cost of Funds Yield on Interest-earning Assets Net Interest Margin YE 2020 YE 2021 YE 2022 YE 2023 Q3 2024 Avg. Earning Assets & Yield $3,834 $3,972 $4,024 $4,294 $4,447 3.74% 3.41% 4.01% 4.60% 5.08% Avg. Earning Assets Yield on Earning Assets YE 2020 YE 2021 YE 2022 YE 2023 Q3 2024 34 N E T I N T E R E S T I N C O M E Avg. Interest-Bearing Liabilities & Costs $2,969 $2,974 $3,044 $3,321 $3,510 1.21% 0.76% 0.67% 2.23% 3.15% Avg. Interest-Bearing Liabilities Cost YE 2020 YE 2021 YE 2022 YE 2023 Q3 2024 1 2 Average balances, as of September 30, 2024, $ in millions 1 Cost of Funds incorporates the free funds contribution with the rate on total interest-bearing liabilities to illustrate the impact of noninterest-bearing liabilities on the overall cost of funds. 2 Computed on a fully taxable equivalent basis (FTE) using 21% federal income tax statutory rate for 2020 through 2024. 2 2


 
COMMERCIAL LOANS S E C T I O N 0 5


 
36 C R E S E G M E N T O V E R V I E W As of September 30, 2024, $ in millions 1 Other CRE & Other Commercial Segments include, but are not limited to, Special / Limited Use, Church, Mobile Home Park, Gas Station, Self-Storage Facilities & Auto Shops 2 Includes restaurant loans of $35.4 million By Collateral Type Total CRE: $2,520.2 2 1 Total CRE, excluding "Other": $2,285.1 2 2 1 1


 
37 H O S P I T A L I T Y M E T R I C S As of September 30, 2024 *Relates to the Company's largest lending relationship. 1 Commitment Level • Total portfolio balance $354.7M • Geographic diversification (see map) • Mean loan size in portfolio $6.0M1 • Median of loans in portfolio $4.1M1 • The largest loan in portfolio $51.6M1 • 11.96% are under construction1 • Top 10 borrowers make up 45.35% of the total hospitality commitment1 • No delinquent loans in the hospitality portfolio1 • 12.82% are in nonaccrual status • There are 12.82%* loans in the hospitality portfolio that are adversely classified or NPL1 • 92.69% of hospitality portfolio is funded1 4.83 RISK RATING LTV DEBT/KEY 52.2% $92K AVERAGE


 
38 H O S P I T A L I T Y M E T R I C S As of September 30, 2024, $ in thousands Category Hospitality Portfolio Balance Percentage of Total Balance Hospitality Commitment Balance Weighted Avg. Commitment LTV Avg. GL Balance Size Avg. of Debt per Key - Total Commitment Hilton $116,498 32.9 % $138,636 61.3 % $8,321 $113 IHG 90,879 25.6 101,309 55.5 5,346 93 Upscale Independent/Boutique 61,547 17.4 61,547 29.1 20,516 83 Wyndham 23,572 6.6 23,572 57.9 2,357 40 Marriott 20,737 5.8 35,437 48.2 4,147 79 Independent 15,192 4.3 15,250 51.4 2,532 150 Radisson 10,780 3.0 10,780 51.3 2,695 37 Best Western 7,796 2.2 7,796 37.0 1,949 18 Choice 7,682 2.2 7,682 49.3 1,921 30 Hospitality Totals $354,683 100.0 % $402,009 52.2 % $5,532 $92 Category Hospitality Portfolio Balance Percentage of Total Balance Hospitality Commitment Balance Weighted Avg. Commitment LTV Avg. GL Balance Size Avg. of Debt per Key - Total Commitment North Carolina $179,699 50.7 % $215,977 55.9 % $4,729 $93 South Carolina 65,362 18.4 76,352 61.0 6,536 104 West Virginia 55,817 15.7 55,817 24.4 18,606 69 Virginia 43,275 12.2 43,333 53.2 3,091 104 Georgia 10,530 3.0 10,530 55.6 5,265 61 Hospitality Totals $354,683 100.0 % $402,009 52.2 % $7,645 $92


 
39 M U L T I F A M I L Y M E T R I C S As of September 30, 2024 1Commitment Level • Total portfolio balance $391.5M • Geographic diversification (see map) • Mean loan size in portfolio $3.6M1 • Median of loans in portfolio $252K1 • The largest loan in portfolio $35.5M1 • 50.17% are under construction1 • Top 10 borrowers make up 53.56% of the total multifamily commitment1 • There are no loans in the portfolio that are delinquent1 • There are no loans in the portfolio that are considered NPL1 • 1.59% of the portfolio is considered adversely classified1 • 88.49% of portfolio is funded1 4.78 RISK RATING LTV DEBT/DOOR 52.9% $107K AVERAGE


 
40 M U L T I F A M I L Y M E T R I C S As of September 30, 2024, $ in thousands (1) The Other category consists of multifamily properties for which we do not have the data. Category Multifamily Portfolio Balance Percentage of Total Balance Multifamily Commitment Balance Weighted Avg. Commitment LTV Avg. GL Balance Size Avg. of Debt per Door - Total Commitment Multifamily $311,243 79.5 % $464,015 52.3 % $3,990 $117 Student 71,251 18.2 71,251 62.5 7,728 50 Other(1) — — 50 — — — Participations in Affordable Housing 9,018 2.3 10,810 19.3 173 13 Multifamily Totals $391,512 100.0 % $546,126 52.9 % $2,973 $107 Category Multifamily Portfolio Balance Percentage of Total Balance Multifamily Commitment Balance Weighted Avg. Commitment LTV Avg. GL Balance Size Avg. of Debt per Door - Total Commitment Multifamily North Carolina $159,153 40.7 % $289,721 51.3 % $2,449 $127 South Carolina 42,079 10.7 46,183 52.1 1,753 119 Virginia 119,029 30.4 138,971 51.7 2,768 89 Student Housing Virginia 49,711 12.7 49,711 60.5 5,523 56 South Carolina 19,679 5.0 19,679 68.6 19,679 40 North Carolina 1,861 0.5 1,861 51.7 1,861 8 Multifamily Totals $391,512 100.0 % $546,126 52.9 % $5,672 $107


 
41 R E T A I L M E T R I C S As of September 30, 2024 ** Excludes restaurant loans of $35.4 million 1Commitment Level • Total portfolio balance $435.6M** • Geographic diversification (see map) • Mean loan size in portfolio $2.8M1 • Median of loans in portfolio $1.1M1 • The largest loan in portfolio $28M1 • 14.20% are under construction1 • Top 10 borrowers make up 36.48% of the total retail commitment1 • 0.03% of the portfolio1 is considered delinquent • 0.08% of this portfolio are considered adversely classified1 • 0.08% are in NPL status1 • 95.88% of retail portfolio is funded1 4.27 RISK RATING LTV DEBT/SQ FT 55.9% $131 AVERAGE


 
42 R E T A I L M E T R I C S As of September 30, 2024, $ in thousands (1) Excludes restaurant loans of $36.1 million (2) A Power Center is a large outdoor shopping mall that usually includes three or more "Big Box" stores. Category Retail Portfolio Balance Percentage of Total Balance Retail Commitment Balance Weighted Avg. Commitment LTV Avg. GL Balance Size Avg. of Debt per Square Ft- Total Commitment Anchored Strip Centers $239,681 55.0 % $245,197 59.1 % $4,993 $119 Unanchored Strip Centers 89,429 20.5 103,569 49.2 1,626 168 Outparcels/Single Tenant 75,926 17.4 78,800 52.6 1,406 135 Power Centers 28,081 6.5 28,638 62.8 9,360 104 Big Box 2,446 0.6 2,446 45.6 815 43 Retail Totals $435,563 100.0 % $458,650 55.9 % $3,640 $131 Category Retail Portfolio Balance Percentage of Total Balance Retail Commitment Balance Weighted Avg. Commitment LTV Avg. GL Balance Size North Carolina $264,236 60.7 % $284,761 52.6 % $3,003 Virginia 88,481 20.3 88,835 63.9 1,770 Georgia 36,527 8.4 36,527 63.8 4,566 South Carolina 21,967 5.0 24,175 48.5 1,690 Ohio 10,576 2.4 10,576 58.4 10,576 Florida 9,842 2.3 9,842 76.3 9,842 Maryland 3,552 0.8 3,552 32.3 3,552 West Virginia 382 0.1 382 46.3 382 Retail Totals $435,563 100.0 % $458,650 55.9 % $4,423


 
43 O F F I C E M E T R I C S As of September 30, 2024 1Commitment Level • Total portfolio balance $221.6M • Geographic diversification (see map) • Mean loan size in portfolio $1.84M1 • Median of loans in portfolio $373K1 • The largest loan in portfolio $23M1 • 2.39% are under construction1 • Top 10 borrowers make up 57.75% of the total office commitment1 • 0.19% of this segment is delinquent1 • 0.40% of loans are primarily rated special mention1 • 0.40% are in NPL status1 • 96.27% of office portfolio is funded1 4.30 RISK RATING DEBT/SQ FT $112 AVERAGE


 
44 O F F I C E M E T R I C S As of September 30, 2024, $ in thousands Category Office Portfolio Balance Percentage of Total Balance Office Commitment Balance Avg. GL Balance Size Avg. of Debt per Square Ft- Total Commitment General Office Space $187,817 84.8 % $205,899 $ 2,041 $117 Medical Offices 25,319 11.4 26,479 1,582 83 Veterinary Offices 7,507 3.4 13,538 375 102 Law Offices 969 0.4 969 162 63 Office Totals $221,612 100.0 % $246,885 $ 1,040 $112 Category Office Portfolio Balance Percentage of Total Balance Office Commitment Balance Avg. GL Balance Size Avg. of Debt per Square Ft- Total Commitment Virginia $102,284 46.2 % $104,836 $1,967 $100 North Carolina 63,639 28.7 81,299 1,224 117 South Carolina 31,325 14.1 35,996 7,831 135 Maryland 6,698 3.0 6,698 6,699 123 Georgia 4,638 2.1 5,028 1,159 172 Tennessee 3,068 1.4 3,068 1,534 55 West Virginia 2,441 1.1 2,441 814 70 Ohio 1,938 0.9 1,938 969 107 Michigan 1,659 0.7 1,659 415 125 Conneticut 1,355 0.6 1,355 452 93 Vermont 935 0.4 935 468 166 Illinois 529 0.3 529 529 132 Maine 375 0.2 375 375 157 Indiana 292 0.1 292 292 46 Kentucky 235 0.1 235 235 75 Florida 201 0.1 201 201 77 Office Totals $221,612 100.0 % $246,885 $1,573 $112


 
NON-GAAP RECONCILIATION S E C T I O N 0 6


 
46 N O N - G A A P S T A T E M E N T Statements in this exhibit include non-GAAP financial measures and should be read along with the accompanying tables in our definitions and reconciliations of GAAP to non-GAAP financial measures. Management uses, and this exhibit references, the efficiency ratio, the adjusted book value, net interest income and net interest margin, each on a fully taxable equivalent, or FTE, basis, which are non-GAAP financial measures. Management believes the efficiency ratio, adjusted book value, net interest income and net interest margin on an FTE basis provide information useful to investors in understanding our underlying business, operational performance and performance trends as they facilitate comparisons with the performance of other companies in the financial services industry. Although management believes that these non-GAAP financial measures enhance investors’ understanding of our business and performance, these non-GAAP financial measures should not be considered alternatives to GAAP or considered to be more important than financial results determined in accordance with GAAP, nor are they necessarily comparable with non-GAAP measures which may be presented by other companies.


 
47 N O N - G A A P R E C O N C I L I A T I O N Net Interest Income (FTE) (Non-GAAP) Quarter-to-Date (Dollars in Thousands) 3Q 2024 2Q 2024 3Q 2023 Interest Income (FTE)(Non-GAAP) Interest and Dividend Income (GAAP) $ 56,595 $ 54,583 $ 48,886 Tax Equivalent Adjustment 3 190 197 247 Interest and Dividend Income (FTE) (Non-GAAP) 56,785 54,780 49,133 Average Earning Assets 4,447,455 4,437,077 4,320,390 Yield on Interest-earning Assets (GAAP) 5.06 % 4.95 % 4.49 % Yield on Interest-earning Assets (FTE) (Non-GAAP) 5.08 % 4.97 % 4.51 % Net Interest Income (GAAP) $ 28,798 $ 28,092 $ 27,394 Tax Equivalent Adjustment 3 190 197 247 Net Interest Income (FTE) (Non-GAAP) 28,988 28,289 27,641 Average Earning Assets 4,447,455 4,437,077 4,320,390 Net Interest Margin (GAAP) 2.58 % 2.55 % 2.52 % Net Interest Margin (FTE) (Non-GAAP) 2.59 % 2.56 % 2.54 % 3 Computed on a fully taxable equivalent basis ("FTE") using a 21% federal income tax rate for the 2024 and 2023 periods. Net interest income (FTE) (non-GAAP) and total Interest and dividend income (FTE) (non- GAAP) , which are used in computing net interest margin (FTE) (non-GAAP), and adjusted efficiency ratio (non-GAAP), respectively, provide valuable additional insight into the net interest margin and the efficiency ratio by adjusting for differences in tax treatment of interest income sources. The entire FTE adjustment is attributable to interest income on earning assets, which is used in computing yield on earning assets. Interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the FTE components.


 
48 Adjusted Efficiency Ratio (Non-GAAP) Quarter-to-Date (Dollars in Thousands) 3Q 2024 2Q 2024 3Q 2023 Noninterest Expense $ 27,433 $ 27,446 $ 27,282 Less: Losses on Sales and Write-downs of Branch Premises, net (9) (44) (18) Less: Gains on Sales and Write-downs of OREO, net 502 8 (904) Less: Non-recurring one-time Operating Expense — — (193) Less: Contingent Liability (303) — — Adjusted Noninterest Expense (Non-GAAP) $ 27,623 $ 27,410 $ 26,167 Net Interest Income $ 28,798 $ 28,092 $ 27,394 Plus: Taxable Equivalent Adjustment3 190 197 247 Net Interest Income (FTE) (Non-GAAP) $ 28,988 $ 28,289 $ 27,641 Less: (Gains) Losses on Sales of Securities, net — (36) 1 Less: Equity Security Unrealized Fair Value Gain (144) (63) — Less: OREO Income (16) (20) (20) Noninterest Income 5,422 5,533 5,270 Net Interest Income (FTE) (Non-GAAP) plus Noninterest Income $ 34,250 $ 33,703 $ 32,892 Efficiency Ratio (GAAP) 80.17 % 81.62 % 83.52 % Adjusted Efficiency Ratio (Non-GAAP) 80.65 % 81.33 % 79.55 % N O N - G A A P R E C O N C I L I A T I O N 3 Computed on a fully taxable equivalent basis ("FTE") using a 21% federal income tax rate for the 2024 and 2023 periods. Net interest income (FTE) (non-GAAP) and total Interest and dividend income (FTE) (non-GAAP) , which are used in computing net interest margin (FTE) (non-GAAP) , and adjusted efficiency ratio (non-GAAP), respectively, provide valuable additional insight into the net interest margin and the efficiency ratio by adjusting for differences in tax treatment of interest income sources. The entire FTE adjustment is attributable to interest income on earning assets, which is used in computing yield on earning assets. Interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the FTE components. The adjusted efficiency ratio (non-GAAP) excludes losses on sales and write-downs of branch premises, net, gains on sales and write-downs of OREO, net, non-recurring one-time operating expenses, contingent liability, the (gains) losses on sales of securities, net, equity security unrealized fair value gains, and OREO income. This measure is similar to the measure utilized by the Company when analyzing corporate performance and is also similar to the measure utilized for incentive compensation. The Company believes this adjusted measure provides investors with important information about the combined economic results of the Company's operations.


 
49 N O N - G A A P R E C O N C I L I A T I O N Adjusted Book Value (Non-GAAP) Quarter-to-Date Q3 2024 (Dollars in Thousands) Adjusted Book Value (Non-GAAP) Total Shareholders' Equity 0 0$ 386,825 Add: AOCI 53,305 Add: Other Segment Reserve Release, net of tax 29,137 Total Shareholders' Equity, excluding AOCI and segment reserve release (Non-GAAP) $ 469,267 Common Shares Outstanding at End of Period 23,072,014 Book Value (GAAP) $ 16.77 Adjusted Book Value (Non-GAAP) $ 20.36 The adjusted book value ratio excludes accumulated other comprehensive loss and adds back the other segment reserve release, net of tax. The Company believes this adjusted measure enables investors to assess the Company's capital levels and capital adequacy without the effects of changes in accumulated other comprehensive income ("AOCI") and the other segment reserve, some of which are uncertain and difficult to predict, or assuming that the Company realized all the previously unrealized losses on available-for-sale securities at the end of the period or the hypothetical release of the other segment reserve.


 
50 N O N - G A A P R E C O N C I L I A T I O N Adjusted Nonperforming Loans ("NPL") to Total Portfolio Loans (Non-GAAP) Quarter-to-Date Q3 2024 (Dollars in Thousands) Adjusted NPLs (Non-GAAP) Total NPL 0 0$ 287,710 Less: Bank's Largest Lending Relationship 280,905 Total NPL, excluding Bank's Largest Lending Relationship (Non-GAAP) $ 6,805 Total Portfolio Loans $ 3,595,861 NPL to Total Portfolio Loans (GAAP) 8.00 % Adjusted NPL to Total Portfolio Loans (Non-GAAP) 0.19 % Adjusted Allowance for Credit Losses ("ACL") to Total Portfolio Loans (Non-GAAP) Quarter-to-Date Q3 2024 (Dollars in Thousands) Adjusted ACL (Non-GAAP) Total ACL 0 0$ 80,909 Less: Bank's Largest Lending Relationship Reserve 36,883 Total ACL, excluding Bank's Largest Lending Relationship Reserve (Non-GAAP) $ 44,026 Total Portfolio Loans $ 3,595,861 ACL to Total Portfolio Loans (GAAP) 2.25 % Adjusted ACL to Total Portfolio Loans (Non-GAAP) 1.22 %


 
v3.24.3
Cover
Nov. 01, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 01, 2024
Entity Registrant Name CARTER BANKSHARES, INC.
Entity Incorporation, State or Country Code VA
Entity File Number 001-39731
Entity Tax Identification Number 85-3365661
Entity Address, Address Line One 1300 Kings Mountain Road
Entity Address, City or Town Martinsville
Entity Address, State or Province VA
Entity Address, Postal Zip Code 24112
City Area Code 276
Local Phone Number 656-1776
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $1.00 par value
Trading Symbol CARE
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001829576
Document Fiscal Period Focus
Document Fiscal Year Focus
Amendment Flag false

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