Carter Bankshares reports Q3 EPS 24c vs. 16c last year

The Company remained well capitalized as of September 30, 2024. The Company’s Tier 1 Capital ratio was 10.83% at September 30, 2024 compared to 10.95% at June 30, 2024. The Company’s leverage ratio was 9.53% at September 30, 2024 compared to 9.43% at June 30, 2024. The Company’s Total Risk-Based Capital ratio was 12.09% at September 30, 2024 compared to 12.22% at June 30, 2024. “As previously noted, the lawsuit filed by GLAS Trust Company, LLC was voluntarily dismissed with prejudice during the third quarter of 2024, and the Justice Entities have continued to curtail their debt owed to the Bank in accordance with the Forbearance Agreement currently in place. These are favorable outcomes for our Company and represent continued progress towards the ultimate resolution of our large nonperforming relationship. We remain committed to resolving this lending relationship in a manner that best protects the Company, the Bank and shareholders”, stated Litz H. Van Dyke, CEO, “Although the large nonperforming lending relationship continues to have a negative impact on our financial and credit metrics, aside from this impact, our financial performance and asset quality metrics remain solid. We continue to feel positive about the fundamentals of the Company and the structure of our balance sheet. Capital and liquidity levels continue to be strong, and loan production was solid in the third quarter, although much of this production was construction lending which has a lag time before it is fully funded and earning interest. Our 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. During the third quarter, the Federal Reserve cut short-term interest rates 50 basis points. We expect an immediate decline in the cost of funds in the fourth quarter from this recent rate cut. Our balance sheet is slightly liability sensitive and is well positioned so that a declining interest rate environment should positively impact our 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.”