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Mar 31, 2024
Carter Bankshares Q1 2024 Earnings Report
Reported a net income increase compared to the previous quarter, but a decrease compared to the same quarter last year, impacted by nonperforming loans.
Key Takeaways
Carter Bankshares, Inc. reported a net income of $5.8 million for Q1 2024, a significant improvement from the net loss in the previous quarter but lower than the net income in Q1 2023. The results were impacted by placing a significant loan relationship on nonaccrual status. The company is pursuing remedies to resolve these loans.
Net income was $5.8 million, or $0.25 diluted EPS, compared to a net loss of $(1.9) million, or $(0.08) EPS, in the previous quarter and net income of $15.9 million, or $0.67 diluted EPS, for the first quarter of 2023.
Net interest income increased $1.0 million, or 3.6%, compared to the fourth quarter of 2023 but decreased $12.4 million, or 30.3% compared to the first quarter of 2023.
Total deposits increased $108.6 million compared to December 31, 2023 and increased $293.5 million compared to March 31, 2023.
Nonperforming loans to total portfolio loans were 8.76% for the quarter ended March 31, 2024, significantly impacted by placing its largest lending relationship on nonaccrual status during the second quarter of 2023.
Carter Bankshares
Carter Bankshares
Carter Bankshares Revenue by Segment
Revenue by Segment
Commercial Real Estate Revenue
CapyFin.comCommercial and Industrial Revenue
CapyFin.comResidential Mortgages Revenue
CapyFin.comOther Consumer Revenue
CapyFin.comConstruction Revenue
CapyFin.comOther Revenue
CapyFin.comInterest-Bearing Deposits with Banks Revenue
CapyFin.comTax-Free Investment Securities Revenue
CapyFin.comTaxable Investment Securities Revenue
CapyFin.comTax-Free Loans Revenue
CapyFin.comTaxable Loans Revenue
CapyFin.comFederal Home Loan Bank Stock Revenue
CapyFin.com Forward Guidance
Carter Bankshares expects moderate loan growth this year and anticipates that the net interest margin will return to a more normalized level once the large nonperforming loan relationship is resolved. The company believes its balance sheet is positioned to benefit when the Fed begins to cut short-term interest rates.
Positive Outlook
- Capital and liquidity levels continue to be strong.
- Loan production was again solid in the quarter.
- The bond portfolio is well positioned to outperform many peers in a period of higher interest rates.
- Modest deposit growth is occurring in most categories except savings accounts.
- The balance sheet is positioned to positively impact margins when the Fed cuts short-term interest rates.
Challenges Ahead
- Lending pipelines have slowed.
- There continues to be pressure on the cost of funds, impacting the margin.
- The current rate environment will continue to impact the margin in the coming quarters.
- The large NPL continues to have a negative impact on financial results.
- Cannot give any assurance regarding the timeline for resolution of the large NPL.