0001829576-26-000018
SEC filingCarter Bankshares, Inc. reported net income of $31.4 million for fiscal year 2025, driven by net interest income of $130.8 million and total noninterest income of $22.4 million. The company's net interest margin was supported by total interest income of $232.2 million, partially offset by total interest expense of $101.4 million. A recovery of $3.6 million in provision for credit losses contributed to net interest income after provision of $134.7 million. Total noninterest expense was $117.1 million, with salaries and employee benefits representing the largest component at $57.7 million. The company ended the year with total assets of $4.85 billion, total deposits of $4.21 billion, and shareholders' equity of $419.7 million. Operating activities generated $39.9 million in cash, while investing activities used $155.9 million primarily for loan originations and securities purchases. The company repurchased $20.0 million of common stock during the year under an authorized program.
Carter Bankshares, Inc. reported net income of $31.4 million for the fiscal year ended December 31, 2025. The company generated total interest income of $232.2 million, consisting of $200.0 million from taxable loans, $2.3 million from non-taxable loans, $26.3 million from taxable investment securities, $265,000 from non-taxable investment securities, $2.5 million from Federal Reserve Bank excess reserves, $268,000 from interest on bank deposits, and $616,000 from dividend income. Total interest expense was $101.4 million, resulting in net interest income of $130.8 million. The company recorded a recovery of $3.6 million in provision for credit losses and $194,000 in recovery for unfunded commitments, leading to net interest income after provision of $134.7 million. Noninterest income totaled $22.4 million, while noninterest expense was $117.1 million, resulting in income before income taxes of $40.0 million. The income tax provision was $8.6 million.
The company's revenue is primarily derived from interest income on loans and investment securities. Loan interest income totaled $202.3 million ($200.0 million taxable and $2.3 million non-taxable), representing the largest component of total interest income. Investment securities contributed $26.6 million in interest income ($26.3 million taxable and $265,000 non-taxable). Noninterest income sources included service charges, commissions and fees of $7.3 million, debit card interchange fees of $7.9 million, insurance commissions of $2.7 million, bank owned life insurance income of $1.5 million, and other noninterest income of $2.9 million. Gains on sales of securities were minimal at $46,000.
The company's net interest margin cannot be calculated from the provided data as average earning assets are not disclosed. However, the net interest income of $130.8 million represents the spread between total interest income of $232.2 million and total interest expense of $101.4 million. The recovery of $3.6 million in provision for credit losses improved profitability. Noninterest expense as a percentage of total revenue (net interest income plus noninterest income) was approximately 76.5% ($117.1 million / $153.2 million). The largest expense categories were salaries and employee benefits at $57.7 million, occupancy expense at $17.6 million, professional and legal fees at $6.9 million, and FDIC insurance expense at $5.8 million.
Operating activities generated $39.9 million in cash, primarily from net income of $31.4 million adjusted for non-cash items including recovery of credit losses of $3.8 million, depreciation/amortization of $7.9 million, and various other adjustments. Investing activities used $155.9 million, with significant outflows for loan originations net of $255.3 million, partially offset by proceeds from securities maturities and sales. Financing activities provided $90.0 million, including net proceeds from Federal Home Loan Bank borrowings of $108.5 million and net changes in deposit accounts. The balance sheet shows total assets of $4.85 billion, with portfolio loans net of allowance of $3.81 billion, securities available-for-sale of $691.6 million, and cash of $105.2 million. Total liabilities were $4.43 billion, including total deposits of $4.21 billion. Shareholders' equity was $419.7 million.
The company's management discussion indicates active monitoring of interest rate sensitivity through its Asset Liability Committee (ALCO) to mitigate effects of inflation-driven rate changes on net interest income. The company completed a $20.0 million stock repurchase program in 2025 and announced a new $10.0 million repurchase program authorized in February 2026. Management notes that future legislative, regulatory, and policy initiatives could affect the company's operations, potentially increasing compliance costs or restricting business activities. The company became a financial holding company in October 2025 and the Bank became a member of the Federal Reserve System in November 2025, which may affect regulatory oversight and permissible activities.