Carter Bankshares, Inc. Announces Fourth Quarter and Full Year 2025 Financial Results

MARTINSVILLE, VA / ACCESS Newswire / January 29, 2026 / Carter Bankshares, Inc. (the "Company") (NASDAQ:CARE), the holding company of Carter Bank (the "Bank") today announced quarterly net income of $8.5 million, or $0.38 diluted earnings per share ("EPS"), for the fourth quarter of 2025 compared to net income of $5.4 million, or $0.24 diluted EPS, for the third quarter of 2025 and net income of $8.3 million, or $0.36 diluted EPS, for the fourth quarter of 2024. Net interest income was $34.6 million for the fourth quarter of 2025, $33.7 million for the third quarter of 2025, and $29.1 million for the fourth quarter of 2024. Pre-tax pre-provision income 1 was $8.8 million for the fourth quarter of 2025, $10.4 million for the third quarter of 2025 and $5.7 million for the fourth quarter of 2024.

For the year ended December 31, 2025, net income was $31.4 million, or $1.38 diluted EPS, compared to net income of $24.5 million, or $1.06 diluted EPS for the year ended December 31, 2024. Net interest income was $130.8 million for the year ended December 31, 2025 and $114.5 million for the year ended December 31, 2024. Pre-tax pre-provision income 1 was $36.2 million and $25.8 million for the years ended December 31, 2025 and 2024, respectively.

The Company's financial results continue to be significantly impacted by loans in the Bank's Other segment of the Company's loan portfolio, the significant majority of which have been on nonaccrual status since the second quarter of 2023. The Bank's loans, now reduced to judgments, relate to various entities in which James C. Justice, II has an interest (collectively, the "Justice Entities"), remain the Bank's largest credit relationship and comprise the significant majority of the Other segment with an aggregate principal balance of $214.0 million as of December 31, 2025. Interest income was negatively impacted by $6.1 million during the fourth quarter of 2025, $6.5 million during the third quarter of 2025 and $7.9 million during the fourth quarter of 2024, due to these credits being on nonaccrual status. The negative impact to interest income during the years ended December 31, 2025 and December 31, 2024, was $26.1 million and $35.1 million, respectively. Interest income has been negatively impacted by $91.2 million in the aggregate since placement of these credits on nonaccrual status during the second quarter of 2023.

As of December 31, 2025, $87.9 million of aggregate curtailment payments made by the Justice Entities to the Bank have decreased the aggregate nonperforming loan ("NPL") principal balance from $301.9 million as of June 30, 2023 to $214.0 million as of December 31, 2025. Curtailment payments received during the fourth quarter of 2025 and the year ended December 31, 2025 totaled $14.5 million and $38.0 million, respectively. For additional information regarding the Bank's credit relationship with the Justice Entities, see "Credit Quality."

Fourth Quarter and Full Year 2025 Financial Highlights

Total portfolio loans increased $43.9 million, or 4.5%, on an annualized basis, to $3.9 billion at December 31, 2025 from September 30, 2025 and increased $254.7 million, or 7.0%, from December 31, 2024;

Net interest income totaled $34.6 million in the fourth quarter of 2025, an increase of $0.9 million, or 2.6%, from the prior quarter and an increase of $5.5 million, or 18.7%, compared to the fourth quarter of 2024. Net interest income was $130.8 million for the year ended December 31, 2025, an increase of $16.4 million, or 14.3%, compared to the year ended December 31, 2024;

Net interest margin increased six basis points to 2.92% in the fourth quarter of 2025 compared to the prior quarter and increased 35 basis points compared to the year over year quarter. Net interest income and net interest margin continue to be significantly impacted by the Bank's largest lending relationship remaining on nonaccrual status since the second quarter of 2023;

NPLs decreased by $14.7 million to $244.0 million at December 31, 2025 compared to September 30, 2025. NPLs to total portfolio loans were 6.29% at December 31, 2025, 6.74% at September 30, 2025 and 7.15% at December 31, 2024;

The (recovery) for credit losses was $2.2 million for the fourth quarter of 2025, compared to a provision of $2.9 million for the third quarter of 2025 and a (recovery) of $5.1 million for the fourth quarter of 2024. The (recovery) provision for credit losses continues to be significantly impacted by curtailment payments and related Other segment reserve release in connection with the Bank's largest lending relationship;

The allowance for credit losses to total portfolio loans was 1.84%, 1.92% and 2.09% at December 31, 2025, September 30, 2025 and December 31, 2024, respectively; and

The efficiency ratio was 77.84%, 73.43% and 83.63%, and the adjusted efficiency ratio (non-GAAP) 4 was 76.85%, 73.37%, and 82.76% for the quarters ended December 31, 2025, September 30, 2025 and December 31, 2024, respectively. The efficiency ratio for the fourth quarter of 2025 continues to be impacted by the Bank's largest lending relationship that was placed in nonaccrual status during the second quarter of 2023.

"We are pleased to report continued strong fundamentals and positive trends for the fourth quarter and for the full year 2025. During the quarter, we again realized margin expansion and solid loan growth throughout our footprint. Our annual loan growth of 7.0% reflects good momentum in our commercial lending platform. In the second half of 2025, we were fortunate to add new seasoned commercial lending teams in Western North Carolina, and we also entered South Carolina with the establishment of a commercial lending presence in Greenville. Our loan pipeline remains healthy and we continue to expect a tailwind from prior construction lending that will fund online over the coming 12 to 18 months as projects progress. Our balance sheet remains slightly liability sensitive. As the Federal Reserve continues to reduce short-term interest rates, we believe we are well positioned to benefit, including with further margin expansion, especially given the short-term nature of our certificates of deposit ("CD") portfolio," stated Litz H. Van Dyke, Chief Executive Officer.

Van Dyke concluded, "Although our large nonperforming credit relationship continues to have a negative impact on our financial and credit metrics, aside from this impact, our fundamentals, financial performance, and asset quality metrics all remain solid. We are committed to resolving this lending relationship in a manner that is most beneficial to our Company and our shareholders. We continue to believe we are well positioned for a strong 2026 and beyond."

Operating Highlights

Credit Quality

NPLs as a percentage of total portfolio loans declined to 6.29% at December 31, 2025, compared to 6.74% at September 30, 2025 and 7.15% at December 31, 2024. Total NPLs decreased $14.7 million to $244.0 million from September 30, 2025 and decreased $15.4 million from December 31, 2024. The quarter-over-quarter decline was primarily driven by $14.5 million of curtailment payments received during the fourth quarter of 2025 from the Bank's largest nonperforming lending relationship. The year-over-year decrease was also attributable to total curtailment payments of $38.0 million received during 2025, partially offset by the transfer of certain loans to nonperforming status, including a $9.5 million commercial real estate ("CRE") relationship consisting of four loans during the first quarter of 2025, a $14.3 million CRE loan during the third quarter of 2025 and a $0.8 million residential mortgage loan during the third quarter of 2025. The $14.3 million CRE loan is secured by an office building that government agency tenants vacated during the fourth quarter of 2025. While this CRE loan was originated at a relatively low loan-to-value ratio, an updated appraisal was received in the fourth quarter of 2025 and a $1.0 million specific reserve was established. The Company believes it is well secured based on the net carrying value of the credit. The Bank continues to closely monitor this CRE loan and other similar loans in its CRE portfolio for changes in valuation and other market impacts.

Since the Bank's largest lending relationship was transferred to nonaccrual status, in the second quarter of 2023 due to loan maturities and failure to pay in full, this relationship's NPL balance has decreased from $301.9 million at June 30, 2023 to $214.0 million at December 31, 2025. Note that, because U.S. GAAP requires the full amount of each curtailment payment to be applied to this relationship's NPL balance, this relationship's total legal obligations to the Bank significantly exceed the NPL balance. This NPL relationship represents 87.7% of total NPLs and 5.5% of total portfolio loans at December 31, 2025. The Company continues to believe it is well secured based on the net carrying value of the credit relationship and is appropriately reserved for potential credit losses with respect to all such loans based on information currently available. However, the Company cannot give any assurance as to the timing or amount of future payments or collections on such loans or that the Company will ultimately collect all amounts contractually due under the terms of such loans.

The specific reserves with respect to the Bank's largest NPL credit relationship were $18.0 million at December 31, 2025 compared to $21.7 million at September 30, 2025. The decline during the fourth quarter of 2025 was driven by the aforementioned curtailment payments. The Company uses a discounted cash flow model to calculate the associated reserve. Each quarter, the model is updated to reflect changes in assumptions and inputs regarding the credit relationship, legal risk and related risks.

The (recovery) for credit losses was $2.2 million for the fourth quarter of 2025, compared to a provision of $2.9 million for the third quarter of 2025 and a (recovery) of $5.1 million for the fourth quarter of 2024. The quarter-over-quarter improvement was driven primarily by a $3.7 million reduction in the reserve for the Other loan segment, reflecting a decrease in the reserve rate from 9.49% at September 30, 2025 to 8.43% at December 31, 2025. The change was a result of higher curtailment payments during the fourth quarter of 2025 compared to the prior quarter. These improvements were partially offset by the establishment of a new $1.0 million specific reserve on the CRE loan discussed above during the fourth quarter of 2025 resulting from an updated appraisal, offset by a net $0.6 million decrease in a specific reserve related to an existing CRE loan under contract to sell and the establishment of $1.1 million in general reserves associated with new loan originations during the fourth quarter.

During the fourth quarter of 2025, the (recovery) for unfunded commitments was a (recovery) of $80 thousand compared to a provision of $335 thousand in the third quarter of 2025 and a provision of $81 thousand in the fourth quarter of 2024. The change from the prior quarter was primarily due to decreased unfunded commitments in construction loans.

Net Interest Income

Net interest income for the fourth quarter of 2025 increased $0.9 million to $34.6 million compared to the third quarter of 2025 and increased $5.5 million compared to the fourth quarter of 2024. The linked-quarter increase was primarily driven by a nine basis point decline in funding costs, partially offset by a two basis point decrease in the yield on average interest-earning assets. The year-over-year increase was primarily attributable to a 43 basis point decline in funding costs and a three basis point increase in the yield on average interest-earning assets.

On an FTE basis, 3 net interest income totaled $34.8 million and $131.5 million for the three months and year ended December 31, 2025, respectively, representing increases of $5.4 million and $16.3 million compared to the same periods in the prior year. Net interest income for both the three months and year ended December 31, 2025 was positively impacted by lower rates paid on average interest-bearing liabilities and higher loan balances compared to the prior year periods. These benefits were partially offset by declines in both the average securities balances and yields on securities during the three months and year ended December 31, 2025.

Net interest margin was 2.92% and 2.82% for the three months and year ended December 31, 2025, respectively, compared to 2.57% for both periods ended December 31, 2024. On an FTE basis, 3 net interest margin was 2.93% and 2.83% for the three months and year ended December 31, 2025, respectively, compared to 2.58% for both periods ended December 31, 2024.

During 2025, interest-bearing funding costs benefited from the Federal Reserve's prior 100 basis point reduction in the federal funds target rate during the third and fourth quarters of 2024. In addition, the Federal Reserve's most recent 75 basis point reduction in the federal funds target rate during the third and fourth quarters of 2025 continues to allow the Company to lower interest-bearing funding costs.

Noninterest Income

Noninterest income was $5.2 million for the fourth quarter of 2025, a decrease of $0.1 million, compared to both the third quarter of 2025, and the fourth quarter of 2024. The primary driver of the decreases was lower insurance commissions, partially offset by an increase in BOLI income.

For the full year 2025, noninterest income was $22.4 million, an increase of $1.0 million, or 4.8% compared to the same period in 2024. This growth was primarily due to a $2.0 million increase in other noninterest income, partially offset by a $1.0 million decline in insurance commissions. The increase in other noninterest income included a $1.9 million gain on a BOLI death benefit recorded in the first quarter of 2025. The decline in insurance commissions was due to lower activity during 2025.

Noninterest Expense

Noninterest expense totaled $31.0 million in the fourth quarter of 2025, representing an increase of $2.3 million, or 8.0%, compared to the prior quarter. The linked-quarter increase was primarily driven by higher seasonal salaries and employee benefits, elevated medical claims and lower deferred compensation associated with lower loan growth in the fourth quarter of 2025 as compared to the third quarter of 2025.

Compared to the fourth quarter of 2024, noninterest expense increased by $2.1 million. This year-over-year increase was driven primarily by higher salaries and employee benefits of $1.1 million, professional and legal fees of $0.4 million, debit card expenses of $0.3 million and occupancy expense of $0.2 million.

For the year ended December 31, 2025, noninterest expense was $117.1 million, an increase of $7.1 million, or 6.4%, compared to 2024. The increase was primarily driven by higher other noninterest expense of $2.3 million, occupancy expenses of $2.0 million, professional and legal fees of $1.2 million, data processing expenses of $0.8 million, debit card expenses of $0.8 million and advertising expenses of $0.6 million. These increases were partially offset by a $0.4 million decrease in FDIC insurance expense.

The increase in other noninterest expense was primarily attributable to $1.1 million of OREO related activity, $0.7 million of fees associated with 1035 exchanges resulting from the early surrender of certain BOLI policies during 2025 and $0.2 million amortization expense related to core deposit intangibles. The increase in occupancy expense was driven by higher software maintenance costs and increased depreciation. Professional and legal fees increased during the year primarily due to acquisition-related activity, consulting costs related to troubled or nonperforming loans, and higher expenses associated with the management of special assets.

Data processing expenses increased primarily due to inflationary cost increases related to existing and new service agreements. Debit card expenses increased during the year driven by higher miscellaneous fees and elevated costs associated with ATM and debit card fraud activity. Advertising expense increased primarily due to higher spending related to rebranding initiatives and expanded new account promotions and advertising campaigns. The decline in FDIC insurance expense reflected reduced loan balances associated with the Company's largest nonperforming lending relationship.

Financial Condition

Total assets increased $11.8 million to $4.9 billion at December 31, 2025 compared to September 30, 2025. Cash and due from banks decreased $1.8 million to $105.2 million at December 31, 2025 compared to September 30, 2025.

Available-for-sale securities decreased $36.3 million to $691.6 million compared to September 30, 2025. These securities represented 14.3% of total assets at December 31, 2025, down slightly from 15.0% at September 30, 2025. The decrease was primarily driven by sales, and normal paydowns, partially offset by a reduction in unrealized losses and purchases of securities during the fourth quarter.

Total portfolio loans increased $43.9 million, or 4.5%, on an annualized basis, to $3.9 billion at December 31, 2025 compared to September 30, 2025. The breakdown of loan growth compared to September 30, 2025 related to the following increases: $51.1 million in CRE loans and $13.9 million in commercial and industrial ("C&I"), partially offset by the following decreases: $14.5 million in Other due to curtailment payments, $4.8 million in residential mortgages, $1.1 million in construction, and $0.7 million in other consumer.

Total deposits increased slightly by $0.5 million to $4.2 billion at December 31, 2025 compared to September 30, 2025. Federal Home Loan Bank ("FHLB") borrowings increased $3.0 million to $178.5 million at December 31, 2025 compared to September 30, 2025 to help fund loan growth.

As of December 31, 2025, approximately 81.3% of our $4.2 billion in total deposits were insured within standard Federal Deposit Insurance Corporation ("FDIC") coverage limits, while approximately 18.7% were uninsured deposits exceeding those limits, compared to 81.6% insured and 18.4% uninsured at September 30, 2025.

Capitalization and Liquidity

The Company remained well capitalized at December 31, 2025. The Company's Tier 1 Capital ratio was 10.70% at December 31, 2025 as compared to 10.66% at September 30, 2025. The Company's leverage ratio was 9.43% at December 31, 2025 as compared to 9.41% at September 30, 2025. The Company's Total Risk-Based Capital ratio was 11.95% at December 31, 2025 as compared to 11.91% at September 30, 2025.

During the three months and year ended December 31, 2025, the Company repurchased 315,089 and 1,124,690 shares of its common stock at a total cost of $6.0 million and $20.0 million, respectively, at weighted average cost per share of $18.91 and $17.78, respectively.

At December 31, 2025, funding sources accessible to the Company include borrowing availability at the FHLB, equal to 30.0% of the Company's assets or approximately $1.5 billion, subject to the amount of eligible collateral pledged, of which the Company is eligible to borrow up to an additional $609.4 million. The Company has unsecured facilities with three other correspondent financial institutions totaling $30.0 million, a fully secured facility with one other correspondent financial institution totaling $45.0 million, and access to the institutional CD market. The Company did not have outstanding borrowings on these federal funds lines as of December 31, 2025. In addition to the above funding resources, the Company also has $402.2 million of unpledged available-for-sale investment securities, at fair value, as an additional source of liquidity.

About Carter Bankshares, Inc.

Headquartered in Martinsville, VA, Carter Bankshares, Inc. (NASDAQ:CARE) provides a full range of commercial banking, consumer banking, mortgage and services through its subsidiary Carter Bank. The Company has $4.9 billion in assets and 64 branches in Virginia and North Carolina as of December 31, 2025. For more information or to open an account visit www.carterbank.com.

Important Note Regarding Non-GAAP Financial Measures

In addition to the results of operations presented in accordance with generally accepted accounting principles in the United States ("GAAP"), our management uses, and this press release contains or references, certain 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. This press release and the accompanying tables discuss financial measures that we believe are useful because they enhance the ability of investors and management to evaluate and compare the Company's operating results from period to period in a meaningful manner. Management also believes these measures provide information useful to investors in understanding our underlying business, operational performance and performance trends as these measures facilitate comparisons with the performance of other companies in the financial services industry. The Company also believes the presentation of interest and dividend income, yield on interest-earning assets, net interest income and net interest margin on an FTE basis ensures the comparability of interest and dividend income, yield on interest earning assets, net interest income and net interest margin arising from both taxable and tax-exempt sources and is consistent with industry practice.

Although management believes that these non-GAAP financial measures enhance investors' understanding of its business and performance, these non-GAAP measures should not be considered as an alternative to GAAP or considered to be more relevant than financial results determined in accordance with GAAP, nor are they necessarily comparable with similar non-GAAP measures that may be presented by other companies. Investors should consider the Company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results or financial condition as reported under GAAP.

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 quotations and may include statements relating to our financial condition, market conditions, results of operations, plans, including our strategic plan, brand strategy, and guiding principles and the anticipated results of the foregoing, objectives, outlook for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality, loan pipeline 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 assumptions 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. Actual results may differ significantly from those expressed in or implied by these forward-looking statements. 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 net interest margin, net interest income, funding costs and its deposit, loan and securities portfolios;

inflation, market and monetary fluctuations;

changes in trade policies, tariffs, monetary and fiscal policies and laws of the U.S. government and the related impacts on economic conditions and financial markets, and changes in policies of the Federal Reserve, FDIC and U.S. Department of the Treasury;

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 CRE loans, and the potential impacts of changes in market conditions on the value of real estate collateral;

increased delinquency and foreclosure rates on CRE 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 geopolitical conflicts or public health events (such as pandemics), 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 and changes impacting the rulemaking, supervision, examination and enforcement priorities of the federal banking agencies;

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 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, slowdowns in economic growth, government shutdowns and geopolitical instability and tensions;

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 associates;

expansions or consolidations in the Company's branch network, including that the anticipated benefits of the Company's branch acquisitions or 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 Securities and Exchange Commission, including in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2024. 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 made. 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, except as required by law.

Carter Bankshares, Inc.

[email protected]

CARTER BANKSHARES, INC.

CONSOLIDATED SELECTED FINANCIAL DATA

BALANCE SHEETS

December 31,

2025

September 30,

2025

December 31,

2024

(unaudited)

(audited)

105,163

106,948

131,171

691,612

727,903

718,400

10,291

10,269

10,041

339

478

3,879,560

3,835,653

3,624,826

(71,491

)

(73,762

)

(75,600

)

3,808,069

3,761,891

3,549,226

72,497

71,653

74,329

1,193

940

1,007

142

330

659

16,830

11,598

6,487

44,811

51,649

59,588

100,035

95,200

109,288

4,851,922

4,840,119

4,659,189

620,473

606,203

634,436

808,171

809,527

726,947

553,964

552,564

512,162

326,182

335,502

355,506

1,902,099

1,906,551

1,924,370

4,210,889

4,210,347

4,153,421

178,500

175,500

70,000

2,992

3,072

3,186

39,844

38,362

48,269

4,432,225

4,427,281

4,274,876

22,083

22,406

23,069

74,806

79,997

92,159

364,968

356,488

333,606

(42,160

)

(46,053

)

(64,521

)

419,697

412,838

384,313

4,851,922

4,840,119

4,659,189

0.70

0.45

0.71

0.66

0.64

0.54

8.12

5.24

8.58

7.74

7.61

6.67

92.13

91.10

87.27

1.84

1.92

2.09

8.65

8.53

8.25

9.43

9.41

9.56

10.70

10.66

10.88

11.95

11.91

12.13

CARTER BANKSHARES, INC.

CONSOLIDATED SELECTED FINANCIAL DATA

INCOME STATEMENTS

Quarter-to-Date

Years Ended

December 31,

2025

September 30,

2025

December 31,

2024

December 31,

2025

December 31,

2024

(unaudited)

(audited)

(unaudited)

(audited)

59,298

59,170

56,502

232,222

221,729

24,694

25,451

27,354

101,402

107,272

34,604

33,719

29,148

130,820

114,457

(2,178

)

2,896

(5,114

)

(3,637

)

(5,039

)

(80

)

335

(194

)

36,862

30,488

34,181

134,651

119,503

1,813

1,860

1,846

7,312

7,393

1,947

1,942

1,917

7,935

7,843

666

1,004

1,074

2,728

3,685

456

357

385

1,511

1,473

297

207

114

2,872

906

5,225

5,370

5,368

22,404

21,368

15,981

14,023

14,889

57,743

57,908

4,336

4,582

4,123

17,620

15,608

1,527

1,450

1,418

5,843

6,200

876

867

879

3,612

3,559

883

669

1,070

3,171

2,540

293

312

310

1,216

1,393

1,874

1,852

1,427

6,877

5,675

1,492

1,367

1,457

5,698

4,919

1,250

959

970

4,192

3,423

2,492

2,623

2,323

11,082

8,777

31,004

28,704

28,866

117,054

110,002

11,083

7,154

10,683

40,001

30,869

2,603

1,735

2,403

8,639

6,346

8,480

5,419

8,280

31,362

24,523

22,083,007

22,406,406

23,069,175

22,083,007

23,069,175

21,857,904

22,294,228

22,834,975

22,456,705

22,817,149

0.38

0.24

0.36

1.38

1.06

0.38

0.24

0.36

1.38

1.06

19.01

18.42

16.66

19.01

16.66

19.66

19.41

17.59

19.66

17.59

2.92

2.86

2.57

2.82

2.57

77.84

73.43

83.63

76.39

80.99

2.93

2.87

2.58

2.83

2.58

76.85

73.37

82.76

76.05

80.95

*All outstanding unvested restricted stock awards are considered participating securities for the earnings per share calculation. As such, these shares have been allocated to a portion of net income ($104 thousand, $68 thousand and $85 thousand for the quarters ended December 31, 2025, September 30, 2025 and December 31, 2024, respectively and $361 thousand and $248 thousand for the years ended December 31, 2025 and 2024, respectively) and are excluded from the diluted earnings per share calculation.

CARTER BANKSHARES, INC.

CONSOLIDATED SELECTED FINANCIAL DATA

NET INTEREST MARGIN (FTE) (QTD AVERAGES)

(Unaudited)

December 31, 2025

September 30, 2025

December 31, 2024

Rate

67,998

697

4.07

64,407

720

4.44

77,608

937

4.80

11,543

2.85

11,583

2.88

11,701

2.89

767,913

6,165

3.19

802,184

6,672

3.30

802,953

6,780

3.36

779,456

6,248

3.18

813,767

6,756

3.29

814,654

6,865

3.35

2,088,480

31,822

6.05

2,038,930

31,595

6.15

1,855,999

29,108

6.24

208,819

3,122

5.93

193,609

3,205

6.57

213,130

3,533

6.59

828,866

9,076

4.34

826,413

8,832

4.24

808,567

8,567

4.22

28,468

349

4.86

27,886

365

5.19

29,038

428

5.86

450,531

7,923

6.98

441,945

7,716

6.93

421,979

7,126

6.72

240,527

264,755

292,751

3,845,691

52,292

5.39

3,793,538

51,713

5.41

3,621,464

48,762

5.36

13,772

220

6.34

8,956

144

6.38

6,569

120

7.27

4,706,917

59,457

5.01

4,680,668

59,333

5.03

4,520,295

56,684

4.99

125,545

123,748

117,145

4,832,462

4,804,416

4,637,440

817,489

3,046

1.48

809,318

3,509

1.72

700,049

3,341

1.90

547,874

3,198

2.32

554,903

3,614

2.58

507,778

3,544

2.78

329,663

107

0.13

341,123

141

0.16

361,624

113

0.12

1,907,556

16,726

3.48

1,899,939

16,761

3.50

1,925,634

19,475

4.02

3,602,582

23,077

2.54

3,605,283

24,025

2.64

3,495,085

26,473

3.01

144,402

1,476

4.06

119,870

1,284

4.25

71,739

742

4.11

11,033

141

5.07

11,145

142

5.05

10,247

139

5.40

155,436

1,617

4.13

131,015

1,426

4.32

81,987

881

4.27

3,758,018

24,694

2.61

3,736,298

25,451

2.70

3,577,072

27,354

3.04

660,217

658,178

676,506

414,227

409,940

383,862

4,832,462

4,804,416

4,637,440

34,763

33,882

29,330

2.93

2.87

2.58

CARTER BANKSHARES, INC.

CONSOLIDATED SELECTED FINANCIAL DATA

NET INTEREST MARGIN (FTE) (YTD AVERAGES)

(Unaudited)

December 31, 2025

December 31, 2024

Rate

64,451

2,808

4.36

44,250

2,289

5.17

11,602

336

2.90

11,759

340

2.89

799,043

26,288

3.29

828,437

29,510

3.56

810,645

26,624

3.28

840,196

29,850

3.55

2,006,830

123,119

6.13

1,786,092

111,505

6.24

216,288

12,951

5.99

221,032

14,660

6.63

819,697

34,988

4.27

809,085

34,196

4.23

28,141

1,522

5.41

30,820

2,128

6.90

449,842

30,265

6.73

421,167

26,864

6.38

239,273

292,264

3,760,071

202,845

5.39

3,560,460

189,353

5.32

9,432

616

6.53

13,696

1,012

7.39

4,644,599

232,893

5.01

4,458,602

222,504

4.99

124,350

102,239

4,768,949

4,560,841

794,603

13,602

1.71

583,735

8,980

1.54

541,250

13,641

2.52

511,342

15,478

3.03

343,367

490

0.14

399,748

548

0.14

1,902,757

68,451

3.60

1,782,573

70,425

3.95

3,581,977

96,184

2.69

3,277,398

95,431

2.91

110,944

4,648

4.19

222,719

11,379

5.11

10,830

570

5.26

9,126

462

5.06

121,774

5,218

4.28

231,845

11,841

5.11

3,703,751

101,402

2.74

3,509,243

107,272

3.06

660,244

684,033

404,954

367,565

4,768,949

4,560,841

131,491

115,232

2.83

2.58

CARTER BANKSHARES, INC.

CONSOLIDATED SELECTED FINANCIAL DATA

LOANS AND LOANS HELD-FOR-SALE

(Unaudited)

December 31,

2025

September 30,

2025

December 31,

2024

2,114,314

2,063,181

1,869,831

231,921

218,038

230,483

2,346,235

2,281,219

2,100,314

822,141

826,944

777,471

28,416

29,077

28,908

850,557

856,021

806,379

465,613

466,701

462,930

217,155

231,712

255,203

3,879,560

3,835,653

3,624,826

339

478

3,879,899

3,836,131

3,624,826

ASSET QUALITY DATA

(Unaudited)

For the Periods Ended

December 31,

2025

September 30,

2025

December 31,

2024

23,861

24,124

1,176

1,013

1,072

1,078

4,623

4,822

4,865

440

228

214,020

228,554

251,982

243,982

258,637

259,349

142

330

659

244,124

258,967

260,008

6.29

6.74

7.15

6.29

6.75

7.17

1.84

1.92

2.09

29.30

28.52

29.15

157

195

472

379

16,413

0.01

0.02

0.01

0.46

CARTER BANKSHARES, INC.

CONSOLIDATED SELECTED FINANCIAL DATA

ALLOWANCE FOR CREDIT LOSSES

(Unaudited)

Quarter-to-Date

Years Ended

December 31,

2025

September 30,

2025

December 31,

2024

December 31,

2025

December 31,

2024

73,762

71,023

80,909

75,600

97,052

(2,178

)

2,896

(5,114

)

(3,637

)

(5,039

)

164

256

370

879

1,759

157

15,000

164

256

370

887

16,988

127

394

495

175

415

575

157

195

472

16,413

71,491

73,762

75,600

71,491

75,600

DEFINITIONS AND RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES:

(Unaudited)

Quarter-to-Date

Years Ended

December 31,

2025

September 30,

2025

December 31,

2024

December 31,

2025

December 31,

2024

34,604

33,719

29,148

130,820

114,457

5,225

5,370

5,368

22,404

21,368

31,004

28,704

28,866

117,054

110,002

8,825

10,385

5,650

36,170

25,823

CARTER BANKSHARES, INC.

CONSOLIDATED SELECTED FINANCIAL DATA

Quarter-to-Date

Years Ended

December 31,

2025

September 30,

2025

December 31,

2024

December 31,

2025

December 31,

2024

8,480

5,419

8,280

31,362

24,523

(46

)

(32

)

(46

)

(68

)

(22

)

(69

)

166

(250

)

(41

)

188

256

108

(51

)

(89

)

(14

)

203

(866

)

133

660

419

(1,882

)

(46

)

303

(54

)

(36

)

(289

)

128

121

123

244

254

259

513

9,058

5,711

8,416

31,323

24,041

21,857,904

22,294,228

22,834,975

22,456,705

22,817,149

0.41

0.26

0.37

1.39

1.05

3 Net interest income has been computed on a fully taxable equivalent basis ("FTE") using 21% federal income tax rate for the 2025 and 2024 periods.

Quarter-to-Date

Years Ended

December 31,

2025

September 30,

2025

December 31,

2024

December 31,

2025

December 31,

2024

59,298

59,170

56,502

232,222

221,729

159

163

182

671

775

59,457

59,333

56,684

232,893

222,504

4,706,917

4,680,668

4,520,295

4,644,599

4,458,601

5.00

5.02

4.97

5.00

4.97

5.01

5.03

4.99

5.01

4.99

34,604

33,719

29,148

130,820

114,457

159

163

182

671

775

34,763

33,882

29,330

131,491

115,232

4,706,917

4,680,668

4,520,295

4,644,599

4,458,601

2.92

2.86

2.57

2.82

2.57

2.93

2.87

2.58

2.83

2.58

CARTER BANKSHARES, INC.

CONSOLIDATED SELECTED FINANCIAL DATA

Quarter-to-Date

Years Ended

December 31,

2025

September 30,

2025

December 31,

2024

December 31,

2025

December 31,

2024

31,004

28,704

28,866

117,054

110,002

(188

)

(11

)

(54

)

(256

)

(108

)

(203

)

866

(133

)

(660

)

(33

)

(419

)

(55

)

(95

)

(38

)

(303

)

30,679

28,749

28,826

115,383

110,457

34,604

33,719

29,148

130,820

114,457

159

163

182

671

775

34,763

33,882

29,330

131,491

115,232

(46

)

(32

)

(46

)

(68

)

(22

)

(69

)

166

(250

)

(41

)

(1,882

)

(46

)

5,225

5,370

5,368

22,404

21,368

39,920

39,183

34,830

151,717

136,445

77.84

73.43

83.63

76.39

80.99

76.85

73.37

82.76

76.05

80.95

SOURCE: Carter Bankshares, Inc.