CARE · Carter Bankshares, Inc.

Cash generation marked another highlight, with net cash provided by operating activities reaching $303.9 million, up dramatically from $6.4 million year-over-year. After modest capital expenditures of $1.5 million (comparable to $1.5 million prior year), free cash flow stood at $302.4 million. This robust liquidity influx supports balance sheet flexibility and positions the company to manage borrowings reliably and cost-effectively, as management actively monitors these sources. The resolution of a major troubled loan relationship has notably improved overall asset quality, reduced credit concentration risk, and optimized both capital and liquidity—key factors enabling this cash surge and profitability rebound.

Operationally, the bank maintains a focus on core lending activities, including C&I loans for working capital, equipment, inventory, and receivables financing. Routine appraisal adjustments continue for property valuations, accounting for variations in location, size, and income capacity relative to subject properties. The decline in the reserve for unfunded loan commitments aligns with decreased unfunded commitments, tied to growth in the construction loan segment during 2026. No shares were repurchased under the active program in the quarter, which the Board may modify or terminate at any time.

While current liquidity sources are deemed sufficient by management, they note potential vulnerabilities to extended economic downturns or market disruptions that could elevate reliance on costlier funding. Results for this interim period are not necessarily indicative of full-year or future performance, emphasizing the importance of ongoing execution amid evolving conditions. Overall, these outcomes reflect disciplined cost management, strategic resolutions, and a fortified liquidity profile, setting a strong foundation for sustained performance.