Carter Bankshares reports Q1 EPS 39c, consensus 28c

Net interest margin, on a fully taxable equivalent basis, increased 12 basis points to 2.70% for the first quarter of 2025, compared to 2.58% for the prior quarter and increased 10 basis points from the year ago 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; The Company remained well capitalized at March 31, 2025. The Company’s Tier 1 Capital ratio was 11.01% at March 31, 2025 as compared to 10.88% at December 31, 2024. The Company’s leverage ratio was 9.67% at March 31, 2025 as compared to 9.56% at December 31, 2024. The Company’s Total Risk-Based Capital ratio was 12.27% at March 31, 2025 as compared to 12.13% at December 31, 2024. “Our 2025 focus is building and enhancing relationships through core deposit acquisition, diversified loan growth and noninterest income expansion. In the first quarter we registered strong deposit growth, from increases in interest-bearing checking accounts and money market accounts. In addition, we received all necessary approvals for the Branch Purchase we announced in the fourth quarter of 2024. We anticipate closing that transaction in May. That transaction will add close to $60 million in funding to our deposit base. We are excited to welcome those First Reliance customers to Carter Bank. We were also pleased to see net interest margin expansion as our cost of funds declined as a result of the Federal Reserve rate cuts in late 2024. Our balance sheet remains slightly liability sensitive and is well positioned so that further declines in short-term interest rates should continue to positively benefit our net interest margin. We also expect that our net interest margin will return to a more normalized level once the large nonperforming lending relationship is fully resolved. Capital and liquidity levels continue to be strong, and loan production was solid in the first quarter. Our loan pipeline remains healthy and we are expecting a tailwind from prior construction lending that will come online over the coming 12 to 18 months as projects progress,” stated Litz Van Dyke, CEO. “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 best protects the Company, the Bank, and shareholders. We continue to believe we are well positioned for a strong 2025.”