Q1 2026: Investor Presentation

Published: 2026-05-04 10:01:11 ET CARE

Published on 05/04/2026 at 10:01 am EDT

Investor Presentation

First Quarter 2026 Nasdaq: CARE

Table of Contents

SECTION 01

Overview

4-14

SECTION 02

Financial Highlights

15-26

SECTION 03

Asset Quality

27-33

SECTION 04

Deposit Mix

34-36

SECTION 05

Commercial Loans

37-46

SECTION 06

Non-GAAP Reconciliation

47-53

SECTION 01

Overview

Company History

Executed the successful resolution of the Company's largest legacy nonperforming credit relationship on March 26, 2026

Further enhanced capital and liquidity levels

Reinstated Quarterly Cash Dividend on April 22, 2026

66.7% of Loan Production funded at a weighted average rate of 6.42% YTD 2026, with Construction loans of approximately $450M funding over the next 12-18 months.

Diversified and Granular Deposit base, approximately 78.2% Retail Customers

Corporate Highlights

$4.8B

Assets

$3.7B

Loans

$4.2B

Deposits

Stats

Martinsville, Virginia

Branches

Corporate Centers

Footprint

Focused on the future.

A well-capitalized franchise with momentum

1974 Bank established de novo

in 1974 as First National Bank of Rocky Mount, VA

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

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

Carter Bankshares, Inc. unveiled a new logo and a refreshed visual brand identity to reflect

our revitalized focus

As of March 31, 2026

50 Total Branches in Virginia Total VA Deposits $3.7 billion

13 Total Branches in North Carolina Total NC Deposits $0.6 billion

VIRGINIA

Blacksburg

Roanoke

Lynchburg

Fredericksburg

Charlottesville

1 Loan Production Office in South Carolina

Martinsville

Map Key

N. CAROLINA

Winston-Salem

Greensboro

Branches

Mortgage Loan Offices

S. CAROLINA

Greenville

Charlotte

Raleigh

Leadership Team

Loran Adams

Executive Vice President Director of Regulatory Risk Management

43 years in Industry 9 years at the Bank

Tami Buttrey

Executive Vice President Chief Retail Banking Officer 43 years in Industry

7 years at the Bank

Jane Ann Davis

Executive Vice President Chief Administrative Officer 41 years in Industry

41 years at the Bank

Tony Kallsen

Senior Executive Vice President

Chief Credit Risk Officer 35 years in Industry

8 years at the Bank

Joyce Parker

Executive Assistant 39 years in Industry 35 years at the Bank

Litz Van Dyke

Chief Executive Officer 40 years in Industry

9 years at the Bank

Bradford Langs

President

Chief Strategy Officer 39 years in Industry

8 years at the Bank

Wendy Bell

Senior Executive Vice President Chief Financial Officer

41 years in Industry 8 years at the Bank

Chrystal Parnell

Executive Vice President Chief Marketing & Communications Officer 23 years in Industry

4 years at the Bank

Kimberly Schaufenbuel

Executive Vice President

Chief Human Resources Officer 7 years in Industry

>1 year at the Bank

Matt Speare

Senior Executive Vice President

Chief Operations Officer 23 years in Industry

8 years at the Bank

Rich Spiker

Senior Executive Vice President

Chief Lending Officer 36 years in Industry 7 years at the Bank

Charlie Sword

Senior Vice President Controller

19 years in Industry 4 years at the Bank

Nurturing relationships

and rewarding customers, associates, and shareholders.

Rewarding Relationships

Customers

Regulators

Community

Associates

Investors

As of Month XX,

XXXX

As of March 31, 2026

757

Volunteer Community Service Hours

Nonprofits Supported by Associates Serving on Boards & Committees

$179,371

Charitable Donations & Sponsorships to Nonprofits

Financial Education Classes Facilitated for 725 Students

Corporate & Social Responsibility

Associates in Northern Virginia participated in the "14th Annual Canstruction" event and were the winners of the 'Best Use of Labels' category for the Celebrating America's 250th Birthday design.

The charity-focused competition benefits the Fredericksburg Regional Food Bank through the donation of canned food. The eleven competing teams donated nearly 10,000 meals for neighbors facing hunger across the Central Rappahannock River Region.

The Charlotte team showed up through service to support Nourish Up, the largest network of food pantries in North Carolina. The Associates spent their time packing food boxes that were distributed to pantries throughout Mecklenburg County that afternoon. Their volunteerism ensured that community members had a stocked local pantry when doors opened the next day.

For the sixth consecutive year, the Bank participated in the Virginia Reads One Book program, through the Virginia Bankers Association. In 2026, the Bank expanded its involvement by sponsoring four elementary schools in our Danville, Martinsville, Roanoke, & Wytheville markets. The program promotes literacy and financial education by having the school community read the same book over a 3-week period. Associates also led financial education classes at each school.

As of March 31, 2026

Investment Highlights

Strong Financial Performance

Strong Liquidity & Capital Position

CET1 of 13.52%

ACL coverage of 1.41%

$1.6B of total available liquidity

214.5% total available liquidity / uninsured deposits

Attractive

Markets & Customers

Well Positioned in Virginia & North Carolina including Fast Growing Markets such as Charlottesville, Charlotte, Greensboro, Roanoke, Raleigh and Winston-Salem.

Conservative Credit Culture

Strong Credit Position

0.64% NPLs to Total Portfolio Loans

0.73% NPAs to Total Portfolio Loans plus OREO

219.03% Allowance for Credit Losses to NPLs

0.08% Past Due Loans to Total Portfolio Loans

(1.55)% Net (Recoveries)/Charge-offs to Avg Loans

Executing Strategic Objectives

Investments in Human Capital, Brand & Culture, Technology, Loan & Deposit Diversification, Customer Experience, and Safety & Soundness should provide operational leverage and growth going forward

As of Month XX,

XXXX

As of March 31, 2026

Strategic Initiatives

Growing responsibly with financial safety and soundness in mind is an essential practice that enables the Bank to prosper and remain independent. We're known for our ability to provide exceptional service and build long-lasting relationships with customers. We will continue to build upon this differentiation with exceptional experiences, strong relationships, and community impact by investing in ways to improve the customer experience and gain operational efficiencies.

Invest

Enhance

Expand

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 focus on initiatives around enhancing technology, operations, customer experience, C&I, CRA, channel delivery, and product development. From a risk management perspective, 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.

As of Month XX,

XXXX

As of March 31, 2026

Legacy Nonperforming Loans

Note Book Balance

$ 209,483,864

Premium on Sale

65,000,000

Recovery of $15 million charge-off

15,000,000

Total Consideration Received

289,483,864

Payoff Note Balances

209,483,864

Gain on Sale and Recovery

80,000,000

Release Remaining Specific ACL Reserve

18,035,471

Gain on Sale, Recovery and Reserve Release

$ 98,035,471

Net Income after Tax

$ 77,448,022

Diluted Earnings Per Share

$ 3.50

Tangible/Book Value

$ 3.49

Safety & Soundness

13.52%

Common Equity Tier 1 Ratio (CET1)

14.78%

Total Risk-based Capital Ratio

11.10%

Leverage Ratio

$22.78

Book Value

Capital

0.08%

Delinquency/Portfolio Loans

0.64%

NPL/Portfolio Loans

1.41%

ACL/Portfolio Loans

(1.55)%

Net Recovery/Portfolio Loans (YTD)

Asset Quality

7.13%

ROA (YTD)1

80.05%

ROE (YTD)2

3.08%

NIM (FTE) (YTD)3

72.66%

Adjusted Efficiency Ratio (YTD)3

Earnings

$1.6B

Total Liquidity Sources

12.49%

Highly Liquid Assets/Total Assets

82.47%

Highly Liquid Assets/Uninsured Deposits

214.52%

Total Available Liquidity/Uninsured Deposits

Liquidity

1 ROA excluding the Loan Sale Transaction = 0.72%3

2 ROE excluding the Loan Sale Transaction = 8.06%3

3 Non-GAAP Financial Measure - see Non-GAAP reconciliation

As of March 31, 2026

SECTION 02

Financial

Balance Sheet & Income Statement

Operational Results

1Q 2026

4Q 2025

Q/Q Change $

1Q 2025

Y/Y Change $

Net Interest Income

$ 35,934

$ 34,604

$ 1,330

$ 30,138

$ 5,796

Recovery for Credit Losses

(33,917)

(2,178)

(31,739)

(2,025)

(31,892)

Recovery for Unfunded Commitments

(218)

(80)

(138)

(114)

(104)

Noninterest Income

70,974

5,225

65,749

6,901

64,073

Noninterest Expense

31,012

31,004

28,042

2,970

Income Tax Expense

24,274

2,603

21,671

2,183

22,091

Net Income

$ 85,757

$ 8,480

$ 77,277

$ 8,953

$ 76,804

Balance Sheet Condition

Assets

$ 4,799,270

$ 4,851,922

$ (52,652)

$ 4,700,287

$ 98,983

Gross Loans

3,728,802

3,879,899

(151,097)

3,687,495

41,307

Allowance for Credit Losses

(52,503)

(71,491)

18,988

(73,518)

21,015

Securities

662,127

691,612

(29,485)

745,390

(83,263)

Deposits

4,235,250

4,210,889

24,361

4,200,927

34,323

Borrowings

178,500

(178,500)

55,000

(55,000)

Shareholders' Equity

$ 504,902

$ 419,697

$ 85,205

$ 401,766

$ 103,136

$1.3M / $5.8M

Net Interest Income up Q/Q & Y/Y

$(33.9)M

Recovery for Credit Losses 1Q26

$65.0M

Gain on the Transaction 1Q26

$8.6M

Adjusted Net Income1 1Q26

$(151.1)M / $41.3M

Loan Growth down Q/Q & up Y/Y

$58.4M or 6.1%

Loan Growth Q/Q Excluding Loan Sale1

$24.4M / $34.3M

Deposits up Q/Q & Y/Y

$(178.5)M / $(55.0)M

Borrowings down Q/Q & Y/Y

$85.2M / $103.1M

Shareholders' Equity up Q/Q & Y/Y

1Non-GAAP Financial measure - see Non-GAAP reconciliation

As of March 31, 2026

Shareholder Ratios 1Q 2026 4Q 2025 Q/Q Change 1Q 2025 Y/Y Change

$3.50 / $3.49

Diluted Earnings Per Share up Q/Q & Y/Y

$0.40

Adj. Diluted EPS1 Q/Q

7.13% / 0.70% / 0.78%

ROA 1Q26, 4Q25 & 1Q25

0.72%

Adj. ROA1 1Q26 Excluding Loan Sale

80.05% / 8.12% / 9.27%

ROE 1Q26, 4Q25 & 1Q25

8.05%

Adj. ROE1 1Q26 Excluding Loan Sale

0.15% / 0.38%

NIM (FTE) up Q/Q & Y/Y

(5.65)% / (6.45)%

NPL / Portfolio Loans down Q/Q & Y/Y

(0.43)% / (0.58)%

ACL / Portfolio Loans down Q/Q & Y/Y

Diluted Earnings Per Share (QTD)

$ 3.88

$ 0.38

$ 3.50

$ 0.39

$ 3.49

Financial Ratios

Return on Avg Assets (QTD)

7.13%

0.70%

6.43%

0.78%

6.35%

Return on Avg Shareholders' Equity (QTD)

80.05%

8.12%

71.93%

9.27%

70.78%

Net Interest Margin (FTE)(QTD)1

3.08%

2.93%

0.15%

2.70%

0.38%

Adjusted Efficiency Ratio (QTD)1

72.66%

76.85%

(4.19)%

78.67%

(6.01)%

Financial / Shareholder Ratios

Asset Quality Ratios

NPL / Portfolio Loans

0.64%

6.29%

(5.65)%

7.09%

(6.45)%

NPA / Total Assets plus OREO

0.73%

6.29%

(5.56)%

7.10%

(6.37)%

ACL / Portfolio Loans

1.41%

1.84%

(0.43)%

1.99%

(0.58)%

Net Chg-offs / Portfolio Loans (QTD annualized)

(1.55)%

0.01%

(1.56)%

0.01%

(1.56)%

1Non-GAAP Financial measure - see Non-GAAP reconciliation

As of March 31, 2026

Financial Performance Trends

Net Income, in thousands

Adjusted Efficiency Ratio 2

60.67%

80.95%

$23,384

$24,523

$31 ,362

$34,995

$50,11 8

76.05%

72.54% 72.66%

2022 2023 2024 2025 1 Q2026 1, 2

2022 2023 2024 2025 1 Q2026

ROA

TCE

7.1 3%

1 .21 %

0.53%

0.54%

0.66%

0.72%

1 0.52%

8.25%

8.65%

7.82%

7.78%

2022 2023 2024 2025 1 Q2026 3

2022 2023 2024 2025 1 Q2026

1 Adjusted Net Income (non-GAAP)2 and YTD annualized for the three months ended March 31, 2026

2 Non-GAAP Financial Measure - see Non-GAAP reconciliation

3 ROA excluding the Loan Sale Transaction = 0.72%2

As of March 31, 2026

Capital Management

Carter Bankshares

Regulatory Well Capitalized

Actual

Excess ($) (In Thousands)

Focus on maintaining a strong regulatory capital position in excess of regulatory thresholds.

Common Equity Tier 1 Ratio ("CET 1")

6.50%

13.52%

$ 283,476

Tier 1 Risk-based Ratio

8.00%

13.52%

222,935

Total Risk-based Capital Ratio

10.00%

14.78%

192,724

Leverage Ratio

5.00%

11.10%

300,024

Critically Undercapitalized Category

Tangible equity to total assets ≤ 2%

Capital Conservation Buffer

>= 2.5% composed of CET 1

Ensure capital levels are commensurate with the Company's risk profile and strategic plan objectives.

On February 2, 2026, the Board authorized a repurchase program to purchase up to

$10.0 million of the Company's common stock in the aggregate over a period of twelve months beginning February 11, 2026. The Company did not repurchase any shares under this plan during the three months ended March 31, 2026.

Actual ($) 03/31/26

Cumulative AOCL Impact 03/31/26

REGULATORY CAPITAL

13.52%

14.78%

11.10%

TIER 1

TOTAL

LEVERAGE

Book Value per Common Share $ 22.78 $ (1.94)

Adjusted Book Value1

24.72

1Non-GAAP Financial measure - see Non-GAAP reconciliation

As of March 31, 2026

Liquidity

$ in thousands March 31, 2026 December 31, 2025 Change

$1.6B

TOTAL AVAILABLE LIQUIDITY

Cash and Due From Banks, including

$ 228,318

$ 105,163

$ 123,155

FHLB Borrowing Availability1

816,643

609,392

207,251

Unsecured Lines of Credit

30,000

Collateralized Lines of Credit

25,000

45,000

(20,000)

Unpledged Investment Securities

407,764

402,220

5,544

Excess Pledged Securities

51,500

33,443

18,057

Total Liquidity Sources

$ 1,559,225

$ 1,225,218

$ 334,007

Continue to maintain a strong liquidity position:

Ongoing FHLB collateral pledging1

Maintain three unsecured lines of credit

Maintain one secured line of credit

Majority of bond portfolio is unpledged

Available sources to leverage unpledged bonds

Federal Reserve Discount Window

Federal Home Loan Bank of Atlanta

Secured Federal Funds Lines

Strong coverage of uninsured deposits:

Total available liquidity / uninsured deposits 214.5%

Interest-bearing Deposits

1For the periods presented above, the Company maintained a secured FHLB Borrowing Facility with FHLB of Atlanta equal to 30% of the Bank's assets approximating $1.4 billion, with available borrowing capacity subject to the amount of eligible collateral pledged at any given time.

As of March 31, 2026

Disclaimer

Carter Bankshares Inc. published this content on May 04, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 04, 2026 at 14:00 UTC.