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Dec 31, 2023
Carter Bankshares Q4 2023 Earnings Report
Announced a net loss due to placing loans on nonaccrual status and incurring increased legal expenses.
Key Takeaways
Carter Bankshares, Inc. reported a net loss of $1.9 million, or $(0.08) earnings per share (“EPS”), for the fourth quarter of 2023 compared to net income of $3.6 million in the third quarter of 2023. The results were significantly impacted by placing loans with an aggregate principal value of $301.9 million on nonaccrual status during the second quarter of 2023.
Net interest income remained consistent with the prior quarter but decreased compared to the fourth quarter of 2022.
Total portfolio loans increased $95.0 million, or 11.0% on an annualized basis.
Total deposits increased $162.4 million, or 18.1% on an annualized basis.
Nonperforming loans as a percentage of total portfolio loans were 8.83%.
Forward Guidance
Carter Bankshares expects respectable loan growth in the near term and anticipates the net interest margin will return to a more normalized level once the large NPL is resolved. They believe the trend of pressure on funding costs is beginning to stabilize.
Positive Outlook
- Expecting respectable loan growth in the near term.
- Investing in strong markets within the footprint.
- Bond portfolio is of very high credit quality, with a shorter average life and duration than peers.
- Deposits are showing modest growth.
- Capital and liquidity levels remain strong.
Challenges Ahead
- Largest lending relationship remains in nonaccrual status and continues to have a negative impact on financial results.
- The fourth quarter was impacted by several expenses and increased legal and other expenses related to efforts dealing with the large nonaccrual loan.
- Experienced a loss of $1.5 million on the sale of $30 million of available-for-sale securities.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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