Loading...
•
Sep 30, 2024
Carter Bankshares Q3 2024 Earnings Report
Announced third quarter results with net income of $5.6 million and EPS of $0.24.
Key Takeaways
Carter Bankshares, Inc. reported a net income of $5.6 million, or $0.24 diluted earnings per share, for the third quarter of 2024. The company saw increases in total portfolio loans and total deposits. The lawsuit filed by GLAS Trust Company, LLC was voluntarily dismissed with prejudice during the third quarter of 2024.
Nonperforming loans decreased by $12.5 million to $287.7 million compared to the prior quarter.
Total portfolio loans increased $46.3 million, or 5.2% on an annualized basis, to $3.6 billion.
Total deposits increased $203.8 million, or 20.9% on an annualized basis.
Net interest income totaled $28.8 million, an increase of $0.7 million, or 2.5% compared to the prior quarter.
Carter Bankshares
Carter Bankshares
Forward Guidance
The company feels positive about the fundamentals and balance sheet structure, with strong capital and liquidity levels. Loan production and pipeline remain solid. Deposit growth is occurring in most categories. Expects a decline in the cost of funds in the fourth quarter from the recent rate cut and that the net interest margin will return to a more normalized level once the large nonperforming lending relationship is fully resolved.
Positive Outlook
- Capital and liquidity levels continue to be strong.
- Loan production was solid in the third quarter.
- Loan production pipeline also remains solid, providing good visibility through year end.
- Deposit growth is occurring in most categories, with the majority of growth coming from increases in interest checking and CD accounts.
- Balance sheet is slightly liability sensitive and is well positioned so that a declining interest rate environment should positively impact our margin.
Challenges Ahead
- The large nonperforming lending relationship continues to have a negative impact on our financial and credit metrics.
- Net interest margin continues to be significantly impacted by the Bank’s largest lending relationship remaining on nonaccrual status since the second quarter of 2023.
- Funding costs increased 104 basis points, offset by an increase of 43 basis points on the yield on earning assets for the nine months ended September 30, 2024 compared to the same period in 2023.
- The decline in net interest income and net interest margin were significantly driven by the aforementioned large nonperforming lending relationship, which negatively impacted interest income by $27.2 million for the nine months ended September 30, 2024 as compared to $20.7 million for the same period in 2023.
- 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.