Carter Bankshares reports Q2 EPS 24c, consensus 61c

The Company remained well capitalized as of June 30, 2023. The Company’s Tier 1 Capital ratio was 11.46% at June 30, 2023 compared to 12.28% at March 31, 2023. The Company’s leverage ratio was 10.02% at June 30, 2023 compared to 10.09% at March 31, 2023. The Company’s Total Risk-Based Capital ratio was 12.72% at June 30, 2023 compared to 13.54% at March 31, 2023. “Obviously we are disappointed with the negative impact to our financial results of placing our largest lending relationship into nonaccrual status due to loan maturities and failure to pay in full during the second quarter. However, aside from the impact of this one lending relationship, our financial performance for the quarter was solid. Also, this large lending relationship is well secured based on the net carrying value of the credit relationship and we are pursuing all remedies to resolve this in a manner that best protects the Company and its shareholders. We expect that the Company’s net interest margin will return to a more normalized level once this matter is resolved. Our balance sheet continues to be asset sensitive, with a large portion of floating rate loans and securities benefiting from higher interest rates. On the deposit side, we are seeing mounting pressure on funding costs and expect that trend will continue to affect our margin in the coming quarters. We do believe that continued positive trends in loan growth and expense control will help support earnings in the near term. During the second quarter, loans grew by an annualized rate of 10.1%. Lending pipelines are beginning to show signs of slowing, but we are still pursuing high quality deals and adhering to our conservative credit underwriting guidelines,” stated Litz Van Dyke, CEO. “I want to assure our investors, our customers and the market that our Company continues to be financially sound with strong capital, liquidity levels and a high level of allowance for credit losses, all of which position us for continued prosperity. Additionally, we believe our balance sheet structure will allow us to effectively manage our capital and liquidity levels through any industry or economic challenges that may emerge in the coming quarters. Lastly, I want to reiterate that we are pursuing all remedies to resolve the Company’s nonaccrual loans in a manner that best protects the Company and its shareholders.”