Carter Bankshares : Investor Presentation First Quarter 2024

CARE

INVESTOR

PRESENTATION

FIRST QUARTER 2024

F O R W A R D - L O O K I N G S T A T E M E N T

This information contains or incorporates certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that relate to our financial condition, market conditions, results of operations, plans, objectives, outlook for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, and asset quality and nonaccrual and nonperforming loans. Forward looking statements are typically identified by words or phrases such as "will likely result," "expect," "anticipate," "estimate," "forecast," "project," "intend," " believe," "assume," "strategy," "trend," "plan," "outlook," "outcome," "continue," "remain," "potential," "opportunity," "comfortable," "current," "position," "maintain," "sustain," "seek," "achieve" and variations of such words and similar expressions, or future or conditional verbs such as will, would, should, could or may. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumption that are difficult to predict and often are beyond the Company's control. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. The matters discussed in these forward- looking statements are subject to various risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected, or implied in or by the forward- looking statements including, but not limited to the effects of: market interest rates and the impacts of market interest rates on economic conditions, customer behavior, and the Company's loan and securities portfolios; inflation, market and monetary fluctuations; changes in trade, monetary and fiscal policies and laws of the U.S. government, including policies of the Federal Reserve, FDIC and Treasury Department; changes in accounting policies, practices, or guidance, for example, our adoption of Current Expected Credit Losses ("CECL") methodology, including potential volatility in the Company's operating results due to application of the CECL methodology; cyber-security threats, attacks or events; rapid technological developments and changes; our ability to resolve our nonperforming assets and our ability to secure collateral on loans that have entered nonaccrual status due to loan maturities and failure to pay in full; changes in the Company's liquidity and capital positions; concentrations of loans secured by real estate, particularly commercial real estate, and the potential impacts of changes in market conditions on the value of real estate collateral; increased delinquency and foreclosure rates on commercial real estate loans; an insufficient allowance for credit losses; the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, war and other military conflicts (such as the war between Israel and Hamas and the ongoing war between Russia and Ukraine) or public health events (such as the COVID-19 pandemic), and of any governmental and societal responses thereto; these potential adverse effects may include, without limitation, adverse effects on the ability of the Company's borrowers to satisfy their obligations to the Company, on the value of collateral securing loans, on the demand for the Company's loans or its other products and services, on incidents of cyberattack and fraud, on the Company's liquidity or capital positions, on risks posed by reliance on third-party service providers, on other aspects of the Company's business operations and on financial markets and economic growth; a change in spreads on interest-earning assets and interest- bearing liabilities; regulatory supervision and oversight, including our relationship with regulators and any actions that may be initiated by our regulators; legislation affecting the financial services industry as a whole (such as the Inflation Reduction Act of 2022), and the Company and the Bank, in particular; the outcome of pending and future litigation and/or governmental proceedings, including the outcome of the lawsuit filed against the Bank and its directors by West Virginia Governor James C. Justice, II, his wife Cathy Justice, his son James C. Justice, III and various related entities that he and/or they own and control, concerning their lending relationship with the Bank, and other lawsuits related to the large NPL relationship; increasing price and product/service competition; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; managing our internal growth and acquisitions; the possibility that the anticipated benefits from acquisitions cannot be fully realized in a timely manner or at all, or that integrating the acquired operations will be more difficult, disruptive or more costly than anticipated; the soundness of other financial institutions and any indirect exposure related to recent large bank failures and their impact on the broader market through other customers, suppliers and partners or that the conditions which resulted in the liquidity concerns with those failed banks may also adversely impact, directly or indirectly, other financial institutions and market participants with which the Company has commercial or deposit relationships with; material increases in costs and expenses; reliance on significant customer relationships; general economic or business conditions, including unemployment levels, continuing supply chain disruptions and slowdowns in economic growth; significant weakening of the local economies in which we operate; changes in customer behaviors, including consumer spending, borrowing and saving habits; changes in deposit flows and loan demand; our failure to attract or retain key employees; expansions or consolidations in the Company's branch network, including that the anticipated benefits of the Company's branch network optimization project are not fully realized in a timely manner or at all; deterioration of the housing market and reduced demand for mortgages; and re-emergence of turbulence in significant portions of the global financial and real estate markets that could impact our performance, both directly, by affecting our revenues and the value of our assets and liabilities, and indirectly, by affecting the economy generally and access to capital in the amounts, at the times and on the terms required to support our future businesses. Many of these factors, as well as other factors, are described in our filings with the SEC including in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2023. All risk factors and uncertainties described herein and therein should be considered in evaluating the Company's forward-looking statements. Forward-looking statements are based on beliefs and assumptions using information available at the time the statements are prepared. We caution you not to unduly rely on forward-looking statements because the assumptions, beliefs, expectations and projections about future events are expressed in or implied by a forward-looking statement may, and often do, differ materially from actual results. Any forward-looking statement speaks only as to the date on which it is made, and we undertake no obligation to update, revise or clarify any forward-looking statement to reflect developments occurring after the statement is made.

2

SECTION

TITLE

SLIDES

1

Overview

4-10

2

Financial Highlights

11-22

3

Asset Quality

23-29

4

Deposit Mix

30-32

5

Commercial Loans

33-42

6

Non-GAAP Reconciliation

43-47

3

S E C T I O N 0 1

OVERVIEW

FOCUSED ON

THE FUTURE

A Well-Capitalized Franchise with Momentum

1974

Bank established denovo in 1974 as First National Bank of Rocky Mount, VA

2006

Carter Bank & Trust charter established in 2006 with the merger of ten banks

2020

Carter Bankshares, Inc. holding company established in Q4 2020 with the assets of Carter Bank & Trust

As of March 31, 2024

MARTINSVILLE,

VIRGINIA

65 BRANCHES

CORPORATE

CENTERS

03 CORPORATE OFFICES IN VIRGINIA

$4.6B

ASSETS

$3.5B

LOANS

$3.8B

DEPOSITS

CORPORATE

HIGHLIGHTS

5

L E A D E R S H I P T E A M

Litz Van Dyke

Bradford Langs

Wendy Bell

Chief Executive Officer

President

Senior Executive

Chief Strategy Officer

Vice President

Chief Financial Officer

Loran Adams

Tami Buttrey

Paul Carney

Jane Ann Davis

Tony Kallsen

Executive Vice President

Executive Vice President

Executive Vice President

Executive Vice President

Senior Executive Vice

Director of Regulatory

Chief Retail Banking

Chief Human Resources

Chief Administration

President

Risk Management

Officer

Officer

Officer

Chief Credit Officer

Phyllis

Richard Owen

Chrystal

Matt Speare

Rich Spiker

Karavatakis

Parnell

Executive Vice President

Senior Executive Vice

Senior Executive Vice

Senior Executive Vice

Mortgage Banking &

Senior Vice President

President

President

President

Corporate Sales Director

Chief Marketing &

Chief Operations

Chief Lending Officer

Special Projects

Officer

Communications

Executive

Officer

6

R E G I O N A L F O O T P R I N T

Branches in

Metropolitan

Statistical

Areas

March 31, 2024

VIRGINIA

TOTAL

BRANCHES

53

Washington DC

Roanoke

Lynchburg

Charlottesville

Blacksburg-

Christiansburg

Non MSA

TOTAL

DEPOSITS

$3.4

BILLION

NORTH

V I R G I N I A

CAROLINA

TOTAL

BRANCHES

12

Charlotte

Greensboro

Raleigh Durham

Fayetteville

Non MSA

TOTAL

N O R T H C A R O L I N A

DEPOSITS

$0.4

BILLION

YEAR END 2018 » 2019 » 2020 » 2021 » 2022 » 2023 » 2024

BRANCHES 105 101 92 69 66 65 65

The following counties are also included in our CRA Assessment area: Randolph, NC: Greensboro MSA & Niagara, NY: Varsity Bank

7

C O R P O R A T E & S O C I A L R E S P O N S I B I L I T Y

VOLUNTEER COMMUNITY

SERVICE HOURS

Associates attended a luncheon in High

*

Point, NC to support Go Red for Women,

which is a worldwide initiative of the

American Heart Association to increase

women's heart health awareness and serve

as a catalyst for change to improve the lives

of women locally, nationally, and globally.

To assist in breaking the cycle of poverty, associates participated in the United Way of Henry County & Martinsville's annual Dollars & Sense Reality Fair. Over 270 area students participated in the event, which is meant to expose high school seniors to the costs associated with real life.

CHARITABLE DONATIONS &

SPONSORSHIPS TO NONPROFITS

CLASSES FACILITATED

FOR 158 STUDENTS

As of March 31, 2024

8

S T R A T E G I C I N I T I A T I V E S

I N V E S TE N H A N C EE X P A N D

We will invest in human capital strategies to enhance the associate experience.

We will continue to drive efficiency and process improvement across all levels of the organization, leveraging technology and automation.

We will make significant investments in the new brand strategy working on updating and enhancing the image and reputation of the Bank.

We will continue to enhance the transformational work that has been done over the past five years.

We will focus on initiatives around enhancing technology, operations, customer experience, C&I, corporate & social responsibility, channel delivery, and product development.

We will strengthen change management systems and leverage the Board's ERM Committee.

We will continue strategies to deepen existing relationships and acquire new relationships in current markets.

We will focus on increasing market share in target growth markets.

We will focus on expanding through organic growth and opportunistic acquisition.

S U P E R I O R F I N A N C I A L P E R F O R M A N C E & O P E R A T I O N A L E X C E L L E N C E

9

S A F E T Y A N D S O U N D N E S S

Capital

Common Equity

10.89% Tier 1 Ratio

("CET1")

Total Risk-

12.15% basedRatio Capital

9.34% Leverage Ratio

$15.60 Book Value

Asset Quality

0.25% Delinquency/ Portfolio Loans

8.76% NPL/PortfolioLoans

2.75% ACL/Total Portfolio Loans

Net Chg-offs/

0.06% Portfolio Loans

(YTD)

Earnings

0.52% Return on Avg Assets (YTD)

Return on Avg

6.59% Shareholders' Equity (YTD)

2.60% NIM(FTE)(YTD)

79.01% Core Efficiency Ratio (YTD)

Liquidity

$1.3B Total Liquidity Sources

11.8% Highly Liquid

Assets / Total

Assets

Highly Liquid

82.0% Assets /

Uninsured

Deposits

Total available

199.0% liquidity / uninsured deposits

As of March 31, 2024

10

Disclaimer

Carter Bankshares Inc. published this content on November 05, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on November 05, 2024 at 22:31:11.162.