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Carter Bankshares Q1 2025 Earnings Report
Carter Bankshares, Inc. announced its first quarter 2025 financial results, reporting increased net income and diluted EPS compared to the previous quarter and the same period last year, driven by loan growth and a gain on bank-owned life insurance.
Key Takeaways
Carter Bankshares, Inc. reported a net income of $9.0 million and diluted EPS of $0.39 for the first quarter of 2025. This represents an increase from $8.3 million net income and $0.36 diluted EPS in Q4 2024, and $5.8 million net income and $0.25 diluted EPS in Q1 2024. The company's total portfolio loans grew by $62.7 million, or 7.0% annualized, to $3.7 billion. Net interest income increased to $30.1 million, and total deposits rose by $47.5 million. A significant non-recurring gain of $1.9 million from a bank-owned life insurance death benefit contributed to the noninterest income.
Net income for Q1 2025 increased to $9.0 million, up from $8.3 million in Q4 2024 and $5.8 million in Q1 2024.
Total portfolio loans grew by $62.7 million, or 7.0% annualized, reaching $3.7 billion at March 31, 2025.
Total deposits increased by $47.5 million, or 4.6% annualized, compared to December 31, 2024.
The company recorded a $1.9 million gain on a bank-owned life insurance death benefit, contributing to noninterest income.
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
The company anticipates continued growth in core deposits and diversified loan portfolios, with a focus on noninterest income expansion. They expect net interest margin to improve as funding costs decline and are well-positioned for future interest rate changes. The resolution of the large nonperforming credit relationship is expected to normalize net interest margin.
Positive Outlook
- Anticipates closing the Branch Purchase transaction in May, adding approximately $60 million in funding to the deposit base.
- Expects net interest margin expansion as cost of funds declined due to Federal Reserve rate cuts.
- Balance sheet remains slightly liability sensitive, positioning for positive benefit from further declines in short-term interest rates.
- Capital and liquidity levels continue to be strong.
- Loan pipeline remains healthy with expected tailwind from prior construction lending coming online.
Challenges Ahead
- The large nonperforming credit relationship continues to negatively impact financial and credit metrics.
- The timing or amount of future payments or collections on nonaccrual loans cannot be assured.
- The company cannot guarantee ultimate collection of all amounts contractually due under the terms of nonaccrual loans.
- The efficiency ratio was impacted by the Bank's largest lending relationship being on nonaccrual status.
- The efficiency ratio was impacted by one-time gain on death benefit and expenses related to the surrender of BOLI.