Carter Bankshares, Inc. reported significant financial performance improvements for the first quarter of 2026, with net income soaring to $85.8 million, or $3.88 per diluted share, compared to $8.9 million, or $0.39 per diluted share, in the same period last year. This increase was largely driven by a $65 million gain from the sale of nonperforming loans, which contributed to a total noninterest income of $71 million, up from $6.9 million in the prior year. Net interest income also rose by 19.2% to $35.9 million, reflecting a net interest margin increase to 3.07%, up from 2.68% in the previous year.
The company's total assets decreased to $4.8 billion as of March 31, 2026, down from $4.9 billion at the end of 2025. This decline was primarily due to a $151.1 million reduction in portfolio loans, attributed to the aforementioned loan sale. However, the company experienced net loan growth of $58.4 million during the quarter. The allowance for credit losses decreased to $52.5 million, or 1.41% of total portfolio loans, from $71.5 million, or 1.84%, at the end of 2025, reflecting the release of specific reserves related to the sold loans.
Carter Bankshares has also made strategic moves to enhance its market position, including the acquisition of two leased branch facilities in North Carolina in 2025, which added $55.9 million in deposits. The company is focused on organic growth and plans to expand its consumer and business banking services while maintaining a strong capital position. As of March 31, 2026, the bank's total deposits increased to $4.2 billion, with a notable rise in interest-bearing demand deposits.
Operationally, the bank's nonperforming loans decreased significantly to $24 million, down from $244 million at the end of 2025, primarily due to the loan sale. The bank's credit quality indicators improved, with the allowance for credit losses covering 219% of nonperforming loans. Looking ahead, Carter Bankshares aims to leverage its strong capital and liquidity positions to pursue growth opportunities while managing risks associated with its loan portfolio and market conditions.
About Carter Bankshares, Inc.
Carter Bankshares, Inc. is a holding company for Carter Bank & Trust, a Virginia-chartered bank with 65 branches in Virginia and North Carolina. It offers retail and commercial banking services, including deposits, loans, and digital banking. The company focuses on organic growth, community engagement, and prudent risk management, serving individual and business customers with a competitive suite of financial products in its regional markets.
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